9911796707
TMI Blog2018 (6) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... id for sale, the court cannot come to the conclusion that the price mentioned in the sale deed is not correct. In this case, appeal of the Revenue was dismissed - since the Assessing Officer has failed to prove the payment of on-money by bringing on any direct evidence, we are not in a position to sustain the addition - Decided in favour of assessee Disallowance of entire expenditure claimed against professional receipts as a result of changing head of income from business or profession to income from other sources - Held that:- when there is a valid agreement to render the services as a retainer and the assessee being an advocate, maintains office for the purpose of his profession, the Assessing Officer is not justified in disallowing the expenditure on the reason of non rendering of services to a particular client. In our opinion when the assessee made himself ready to be available to the client and the client has not availed his services as a retainer, we do not find fault with the assessee so as to disallow the expenditure incurred by the assessee. In our opinion, the Assessing Officer did not allow the expenditure only on the presumption that the assessee has not rendered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, there is no rejection of books of accounts by the Assessing Officer. Hence, in our opinion, referring the matter to the DVO for valuation of the property itself is bad in law. Even otherwise, the Assessing Officer has no other evidence than the DVO report. In our opinion, the DVO report cannot be the only basis for making the addition. More so, the DVO has applied Central PWD rates. When the property is situated in a mofussil area, the State PWD rates have to be applied. - Decided in favour of assessee Addition as unexplained credits - Held that:- Lower authorities came to the conclusion that the assessee‘s explanation regarding the credit could not be accepted and we cannot disturb such finding as the assessee has not brought any fresh material on record before us. More so, mere furnishing of name and address of the lender would not amount to sufficient discharge of the burden placed upon the assessee u/s. 68 of the Act. This is because u/s. 68 of the Act, the assessee has to prove all the ingredients as mentioned earlier. When the identity of the creditor and the creditworthiness of the credits were not established, addition u/s. 68 of the Act is justified. Addition of ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted her own money through M/s. Rosy Blue India Pvt. Ltd. In such circumstances, we are inclined to delete the addition Disallowance of depreciation on motor car - @ 50% OR 15% - use for purposes of bunions purposes - Held that:- The period of acquisition of commercial vehicle on or after 1st June, 2009 or on or before October, 2009 was amended as per the amended provisions with effect from 1.4.2009. Being so, commercial vehicle purchased upto October, 2009 is entitled for higher depreciation. Hence, we direct the Assessing Officer to grant depreciation at the rate of 50% on the commercial vehicle acquired by the assessee. Thus, this ground of appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... horization or letter to the Bank requesting the Bank to permit the assessee to remit the money into his firm's account. It was submitted that the registration authorities registered the sale deed without allegation of understatement of sale value and unless there is proof that there was understatement of sale value or payment of on-money, the Assessing Officer cannot presume that there was undervaluation of the properties purchased by the assessee. The Ld. AR further submitted that even the seller has not shown additional consideration received from the sale of the said land in his income tax return and this fact was admitted by Shri K.R. Ramesh Kumar in the cross examination. Further it was submitted that in similar situations, the land transactions within a year in the locality showed the going rate at ₹ 985 per cent.. For this purpose, he referred to Sale Deed No. 367/2006 executed on 17/01/2006 for sale of 81 cents and 250 sq. links of wet land by Smt. D. Sarasakumari and Shri A. Raveendran Nair. While the assessee has shown ₹ 2300 per cent, the sale deed showed the payment of ₹ 3,10,000/- for 134.75 cents and this being a wet land, that should be cheaper than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 80,000/- by cash to him. Hence, the Assessing Officer presumed that there was an on-money payment of ₹ 4,03,600/- over and above the sale value mentioned in the sale deed. Apart from the allegation from the Assessing Officer that the assessee had paid the amount into the vendor's Bank account to clear off his liabilities with the Bank, there was no other evidence brought on record by the Assessing Officer to substantiate the payment of on- money for this transaction. The vendor, Shri K.R. Ramesh Kumar stated in his statement recorded u/s. 131 that he himself had not disclosed the alleged sale consideration in his return of income. Being so, we cannot give any credit to the sworn statement recorded from Shri K.R. Ramesh Kumar. Further, there is no allegation of any extra payment by the registration authorities in respect of these two properties. Therefore in the absence of any corroborative evidence to the contrary, the value mentioned in the sale deed is to be treated as correct sale consideration. Further, as held by the Madras High Court in the case of CIT vs. P.V. Kalyanasundaram (2006) (282 ITR 259) and confirmed by the Supreme Court in the case of CIT vs. P.V. Kal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is allowed. 3. Ground No. 2 is with regard to disallowance of entire expenditure claimed against professional receipts as a result of changing head of income from business or profession to income from other sources. 3.1 The facts of the case are that during the year, the assessee had received an amount of ₹ 1,00,000/- per month between the period from July 2006 to June, 2009 from M/s. Rosy Blue (India) Pvt. Ltd. and ₹ 50,000/- from Aerena Gold Souk International. The Assessing Officer found that the nature of receipts from M/s. Rosy Blue (India) Pvt. Ltd., which was claimed as professional receipts in the books of the assessee, were actually not in the nature of professional receipts because the entire amount was received without providing any professional services. Accordingly, the receipt was treated as income from other sources and thus, as per section 57 the expenses claimed against income from profession and debited to P&L account was disallowed. The Assessing Officer disallowed the expenditure on the basis of the sworn statement recorded u/s. 131 of the Act of Shri Russel Mehta, M.D. of M/s. Rosy Blue (India) Pvt. Ltd. which was engaged in diamond merchandis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses were maintained or produced before the Assessing Officer or during the appellate proceedings. Moreover, according to the Ld. DR, no professional receipts were shown over and above the amount of fees received on account of retainer-hip. Hence, it was submitted that since the assessee could not produce the details related to the services rendered to the clients, the Assessing Officer had rightly treated the professional receipts as income from other sources which was confirmed by the CIT(A). 3.5 We have heard the rival contentions and perused the record. Admittedly, in this case, the assessee entered into an agreement on 01/07/2006 as a retainer to advise M/s. Rosy Blue (India) Pvt. Ltd. on legal matters. As per this agreement, the assessee was paid by M/s. Rosy Blue (India) Pvt. Ltd. at the rate of ₹ 1 lakh each per month. The Assessing Officer has not doubted this agreement. The only contention of the Assessing Officer is that the assessee has not rendered services to M/s. Rosy Blue (India) Pvt. Ltd. The assessee has also not disputed this fact. The payment has been made to the assessee on the basis of valid agreement. Even if it is assumed that no service was rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ABB deals with expenditure for obtaining licence to operate telecommunication services. Section 35AC deals with expenditure on eligible project. Section 35AD deals with deduction in respect of expenditure on specified business. Section 35B deals with export market development allowance. Section 35C deals with agricultural development allowance. Section 35CC deals with rural development allowance. Section 35CCA deals with expenditure by way of payment to association and institutions for carrying out rural development programmes. Section 35CCB deals with expenditure by way of payment to associations and institutions for carrying out programmes of conservation of natural resources. Section 35D deals with amortization of certain preliminary expenses and 35DD deals with amortization of expenditure in case of amalgamation or de-merger. Section 35DDA deals with amortization of expenditure incurred under voluntary retirement scheme. Section 35E deals with deduction for expenditure on prospecting etc. for certain minerals. Section 36 deals with other deduction in respect of premium paid, interest etc. 3.7 In the present case, there is no allegation by the Assessing Officer that the sassess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.B. account with ICICI Bank Ltd., Edapally Branch on 19/10/2006, has not furnished any other evidence to establish either the identity of the person or the creditworthiness or the particulars like PAN Number or IT return filed. In view of this, CIT(A) upheld the addition made by the Assessing Officer on this count. 4.4 We have heard the rival contentions and perused the record. Before us also, the assessee was not able to prove the identity as well as the creditworthiness of the creditors. Hence, we do not find any infirmity in the finding of the CIT(A) and confirm it. This ground of appeal of the assessee is rejected. 5. The next ground, Ground No. 4 is with regard to cash gifts received from relatives of ₹ 7,50,000/-. 5.1 The facts of the case are that the Assessing Officer found that in the cash flow statement, apart from ₹ 2,50,000/- which represents the opening balance, another amount of ₹ 5,00,000/- was received as cash gift from the relatives. Apart from the withdrawals from the bank account ₹ 3,23,500/- everything was received as gift. The Assessing Officer noticed that the assessee did not have any details to prove the source of the gift. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment year under consideration. Accordingly, this ground of appeal of the assessee is partly allowed. Thus, the appeal of the assessee in ITA No. 383/Coch/2015 is partly allowed. ITA No. 384/Coch/2015 6. The first ground, Ground No. 1 is with regard to addition of investment in purchase of property at Varapuzha at ₹ 4,82,500/-. 6.1 The facts of the case are that the assessee had purchased land admeasuring 36.1 cents in Varapuzha from Shri Linjo Joseph on 08/04/2008 at a documented price of ₹ 7,27,000/-. Mr. Linjo Joseph on oath had admitted to have received ₹ 16,92,000/- in cash for this transaction. On the assessee's request the Assessing Officer allowed cross examination of Shri Linjo Joseph and, he has confirmed his earlier statement. The Assessing Officer rejected the explanation of the assessee that Shri Linjo Joseph was not able to produce any documentary evidence and accordingly, 50% of this land value was added in the hands of the assessee as unexplained investment of the assessee at ₹ 8,46,000/- u/s. 69 of the Act, while the remaining 50% was considered in the hands of the assessee's wife. 6.3 On appeal, the CIT(A) observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,00,000/- was paid by the assessee and his wife and the same deserves to be reduced from the total consideration of ₹ 1,14,00,000/- However, for the balance amount of ₹ 1,00,00,000/-, the CIT(A) held that the same is to be treated as the amount paid in cash towards investment in land for which the Assessing Officer had relied on the sworn statement of Shri K.A.M. Iqbal Mather. The CIT(A) observed that in most of the cases, the sellers have admitted to have received the amount of consideration in the sworn statement and later on, filed return of income, showing the same amount. In such a situation, the CIT(A) concluded that the evidentiary value of the sworn statement of the seller cannot be disputed by the assessee on subjective arguments. In view of this, the CIT(A) held that excess consideration, after considering the actual cost of ₹ 14 lakhs shown by the assessee and his wife was ₹ 1 crore out of which 50% of the sum was treated in the hands of the assessee. Accordingly, the CIT(A) upheld the addition to the extent of ₹ 50 lakhs, being consideration paid in cash for the purchase of the land as unexplained investment of the assessee. 6.8 Against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned earlier, is a small plot with house and asphalted roads. This property also cannot be compared with the impugned property of the assessee. Being so, these two properties are to be taken out from comparison. The remaining four properties are to be considered to arrive at the fair market value of the property. For this purpose, we remit this issue to the file of the Assessing Officer to re-calculate the value of the assessee's property on the basis of average value of the property in Document Nos. 1142/07, 3311/06, 129/08 and 1716/09. Thus, this ground of appeal of the assessee is partly allowed for statistical purposes. Hence, the appeal of the assessee in ITA No. 384/Coch/2015 is partly allowed for statistical purposes. ITA No. 385/Coch/2015 7. The first ground, Ground No. 1 is with regard to addition of unexplained investment in purchase of land at Keethi Nagar at ₹ 91,50,000/-. 7.1 The facts of the case are that the assessee had purchased land admeasuring 29.6 cents of land in Keerthi Nagar from Dr. K.K. Dandapani vide Document No. 1220/09 dated 05/06/2009 for a sum of ₹ 30,00,000/-. However, it was noticed that Shri Dandapani in the sworn statement stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Department. The Ld. AR submitted that the Department's stand that the assessee and his wife had paid ₹ 2.13 crores for buying 29.6 cents of land from Shri Dandapani which is at the rate of ₹ 7.5 lakhs per cent is incorrect. According to him, the transaction was for ₹ 1 lakh per cent. It was submitted that the assessee had received a notice in Form II and a reference in Form 1A from District Collector that the assessee had undervalued the property for registration and issued notice to the assessee stating that the value of property was ₹ 1.5 lakhs and not ₹ 1 lakh. The Ld. AR submitted that the sale of land was on 4.4.2008 and consideration was for ₹ 4,97,000/- at the rate of ₹ 82,68d2/- per cent. Moreover, it was submitted that the land was not subjected to valuation by DVO, only the building under construction was subjected to valuation. The Ld. AR further submitted that the amount of ₹ 30,00,000/- as per registered document was recorded in the assessee's and his wife's books of account at ₹ 15,00,000/- each towards cost of acquisition. Hence, it was pleaded that the value as per registered document should be adopted and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) observed that the DVO is a technical wing and competent to evaluate the cost of construction which is based on their own parameters and the assessee cannot claim that the two properties at two different places should have the same rate for the front construction. The CIT(A) observed that so far as the rate for front portion of the two buildings are concerned, the same cannot be one and if there is any difference, the assessee cannot have a claim that why the two rates were not considered as the same. In view of this, the CIT(A) justified the valuation of the DVO. But as regards the addition, since the assessee had already shown the construction value of ₹ 7,60,574/- as on 31/03/2010, the CIT(A) restricted the same to ₹ 26,33,926/- (33,94,000 - 7,60,574). 8.3 Against this, the assessee is in appeal before us. The Ld. AR submitted that the addition made by the Assessing Officer was without considering that ₹ 7,60,574/- was spent by the assessee (3,24,526/-) and his wife (4,36,046/-) as per their books of account till 31/03/2010. The assessee raised following objections regarding the valuation of building at Annamanada before the Assessing Officer: (i) In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the report, estimating the cost of construction at ₹ 67,89,000/-. The sole basis for addition was the DVO report. Before referring the matter to the DVO for valuation, it is incumbent upon the Assessing Officer to reject the books of account by noticing the defects in the books maintained by the assessee. In this case, there is no rejection of books of accounts by the Assessing Officer. Hence, in our opinion, referring the matter to the DVO for valuation of the property itself is bad in law. Even otherwise, the Assessing Officer has no other evidence than the DVO report. In our opinion, the DVO report cannot be the only basis for making the addition. More so, the DVO has applied Central PWD rates. When the property is situated in a mofussil area, the State PWD rates have to be applied. We place reliance on the judgment of the Madras High Court in the case of CIT vs. Raja Varadarajan (89 CCH 207). Hence, this ground of appeal of the assessee is allowed. Thus, the appeal of the assessee in ITA No. 385/Coch/2015 is allowed. ITA No. 386/Coch/2015 9. The first ground is with regard to unexplained investment in purchase of land in the name of the assessee's mother at ₹ 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The Ld. AR submitted that the assessee had paid ₹ 5 lakhs to his mother as gift for the purchase of 3.5 cents of land at Keerthi Nagar from Shri K.V. Sohan for ₹ 15,00,000/- and was reflected in his drawings. the drawings. The Ld. AR submitted that the assessee had produced a copy of the assessment order of K.V. Sohan for the assessment year 2011-12 dated 20/11/2013 wherein the sales consideration for the said land of 3.5 cents was shown in the order as only ₹ 15,00,000/-. The Ld. AR submitted that the assessee should not be assessed protectively and assessment may be made on his mother and his mother had paid ₹ 15,00,000/- and got the sale deed registered. 9.4 The Ld. DR relied on the orders of the lower authorities. 9.5 We have heard the rival contentions and perused the record. The addition is made only on the basis of the statement of the seller, Shri K.V. Sohan. As we have already discussed n ITA No. 383/Coch/2015 for the assessment year 2007- 08 in para nos. 2.5 and 2.6 of this order, the third party statement cannot be relied upon without any corroborative material. Hence, this ground of appeal of the assessee is allowed. 10. The next ground, Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout sufficient reasons. In the present case, on appreciation of the material facts on record, the lower authorities came to the conclusion that the assessee's explanation regarding the credit could not be accepted and we cannot disturb such finding as the assessee has not brought any fresh material on record before us. More so, mere furnishing of name and address of the lender would not amount to sufficient discharge of the burden placed upon the assessee u/s. 68 of the Act. This is because u/s. 68 of the Act, the assessee has to prove all the ingredients as mentioned earlier. When the identity of the creditor and the creditworthiness of the credits were not established, addition u/s. 68 of the Act is justified. This ground of appeal of the assessee is rejected. 11. The next ground is with regard to addition of ₹ 2,45,198/- as agricultural income as undisclosed income. 11.1 The facts are that assessee claimed ₹ 2,45,198/- as agricultural income. The Assessing Officer relied on Part-IV of the Finance Act which elaborates the rule for computation of net agricultural income. The relevant rules are reproduced below: Agricultural income of the nature referred to in sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rival submissions and perused the record. In the present case, the Assessing Officer has not doubted the owning of the agricultural land measuring 279 cents and the income from the same was shown by the assessee in his books of account. The contention of the Ld. AR is that no separate books of account are kept for agricultural income. In our opinion, a small farmer like the present assessee cannot be expected to maintain separate accounts for agricultural income as stated by the Assessing Officer. Since the Assessing Officer has not doubted the owning of the agricultural land and raising of crops, it is appropriate to estimate the income from such agricultural activities at ₹ 1,50,000/- as against ₹ 2,45,198/-. Accordingly, this ground of appeal of the assessee is partly allowed. Hence, the appeal of the assessee in ITA No. 386/Coch/2015 is partly allowed. ITA No. 374/Coch/2015 : Revenue's Áppeal 12. The Revenue has raised the following grounds of appeal: 1. In view of the facts and circumstances of the case, the Ld. CIT(A) erred in reducing the addition of R.1,14,00,000/- on account of purchase of land at Annamanada to ₹ 50,00,000/-. 2. As the red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in the notice as stated in the earlier para and set aside the assessment order dated 31/03/2013 as it was found to be erroneous in so far as it was prejudicial to the interest of the Revenue and directed the Assessing Officer to pass fresh assessment order after proper verification and examination of relevant facts in accordance with law. 13.2 Against this, the assessee is in appeal before us. The Ld. AR submitted that the assessee has not purchased any land measuring 136 cents at Varapuzha during the financial year relevant to the assessment year 2008-09. As such the issue of development expenditure incurred for the land does not arise. The Ld. AR drew our attention to the Document Nos. 1552/2007 and 1553/2007 dated 07/03/2007 for the financial year 2006-07 relevant to the AY 2007-08 towards purchase of 134.75 cents of land at Alangad village which is placed at PB pg. nos. 2-14 filed before us. He also submitted that the assessee purchased another land measuring 36.1 cents of land at Varapuzha on 08/04/2008 for the financial year 2008-09 relevant to the assessment year 2009-10 vide Document No. 2221 dated 08/04/2008, the English translation of which is placed at PB pg. nos. 20- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o liable to be set aside for the simple reason that the CIT raised the issue with regard to incurring of development expenditure on the land at Varapuzha. As seen from the argument of the Ld. AR, the land at Varapuzha was purchased on 08/04/2008 relevant to the assessment year 2009-10. Another land in Alangad village was purchased on 07/03/2007 in the financial year 2006-07 relevant to the assessment year 2007-08. This fact is also fortified by the finding of the Assessing Officer in the giving effect order to the order passed u/s. 263 of the Act by the CIT. The Assessing Officer has mentioned in the order passed u/s. 143(3) r.w.s. 147 r.w.s. 263 of the Act dated 31/03/2016 as under "The land development works at Varapuzha are seen related to AY 2010- 11 and will be assessed therein." 13.5 Further, no new material has been brought on record by CIT to suggest that the assessment order is erroneous in so far as it is prejudicial to the interest of the Revenue. Therefore, the jurisdiction u/s. 263 of the Act cannot be assumed. The Assessing Officer, after duly considering the explanations and information placed before him by the assessee and on being satisfied with the said explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the Act to the assessee by observing as follows: i) As per information available with the Department, it is seen that the assessee has purchased a land at two places namely Varapuzha and Annamanada and has constructed buildings after developing the land and that substantial amount was spent for the development of the land and filling with earth and gravel etc. A perusal of the records shows that the AO had not examined the expenditure for the land filling and development of the land at both places viz. Varapuzha and Annamanada. ii) Further, it is noticed that expenditure in respect of professional receipts from Rosy Blue and Amity Projects which has been earned without rendering meaningful service is not an allowable expenditure which had not been disallowed in the assessment. The personal expenditure and drawings had not been examined by the Assessing Officer. 14.1 As discussed in the earlier appeal in ITA No. 322/Coch/2015 in para nos. 13.4 and 13.5 of this order, we are inclined to quash the order of the CIT passed u/s. 263 of the Act. Hence, the appeal of the assessee in ITA No. 323/Coch/2015 is allowed. ITA No. 324/Coch/2015 15. The CIT(A) had set aside the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands, this aspect had not been considered in the assessment. 16.2 As discussed in the earlier appeal in ITA No. 322/Coch/2015 in para nos. 13.4 and 13.5 of this order, we are inclined to quash the order of the CIT passed u/s. 263 of the Act. Hence, the appeal of the assessee in ITA No. 319/Coch/2015 is allowed. ITA No. 320/Coch/2015 17. The CIT(A) had set aside the assessment order dated 31/03/2013 for the assessment year 2009-10 which was passed u/s. 143(3) r.w.s 148 of the Act by issuing notice u/s. 263 of the Act to the assessee by observing as follows: i) A perusal of the records and information available with the Department, it is seen that assessee had purchased a property at Varapuzha and that substantial amount was spent for the development of the land. The records shows that Assessing Officer had not estimated the undisclosed expenditure on land filling at Varapuzha. ii) Further it is noticed that expenditure in respect of professional receipts from Rosy Blue and Amity Projects which has been earned without rendering meaningful service is not an allowable expenditure which had not been disallowed in the assessment. Further, personal expenditure and drawings had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. 19.2 On appeal, the CIT(A) observed that the assessee had argued that the statement given by Shri Martin Jose should not be treated as an evidence for taking the inference that excess unaccounted money was passed on to the seller for the purchase of the flat in Travancore Residency. According to the CIT(A), Shri Martin Jose in his reply stated that he had not received any notice from the Income Tax Department regarding whether he had shown ₹ 10 lakhs as sale consideration in his income tax return for assessment year 2007-08, he had replied that he had shown ₹ 6 lakhs only in his return of income. The assessee raised the question that why proceedings against Shri Martin Jose were not initiated. The CIT(A) found from the records called from the Assessing Officer that the assessment in the case of Martin Jose was completed u/s. 143(3) dated 6.1.2015 in which the statement of income showed the computation for long term capital gain, were the sale consideration was shown at a sum of ₹ 10 lakhs. This fact clearly established that Martin Jose stood consistently with the same stand during the cross examination by the assessee and the same amount of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from profession to the head of income from other sources. We direct the Assessing Officer to allow the above expenditure incurred by the assessee. Hence, this ground of appeal of the assessee is allowed. 21. The next ground, Ground No. 3 is with regard to value of motor car provided by M/s. Rosy Blue (India) Pvt. Ltd. 21.1 The facts of the case are that the assessee was provided a car in 2009 vide clause 2.3 of the Consultancy Agreement with M/s. Rosy Blue (India) Pvt. Ltd. The ambassador car was registered in the name of the assessee and the purchase consideration of ₹ 5,46,872/- was paid by the company by demand draft. The Assessing Officer held that the assessee had not rendered any service to the said company and therefore, the amount provided by the company to buy the car which was subsequently registered in her name, is to be treated as receipt under income from other sources and the entire value of the car was assessed as income of the assessee. 21.2 On appeal, the CIT(A) observed that the payment for buying car by M/s. Rosy Blue (India) Pvt. Ltd. has been made without having rendered any services. Hence, the CIT(A) held that the purchase consideration of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the sworn statement of the seller Shri Linjo Joseph. 50% of the sale consideration was treated in the hands of the assessee and 50% in the hands of her husband Shri P.V. Sreenijin. 22.2 We have heard the rival submissions and perused the record. A similar issue was considered by us in her husband's case in ITA No. 384/Coch/2015 in para nos. 2.4 and 2.5 of this order for the assessment year 2009-10. Hence, we are inclined to delete the addition made by the Assessing Officer and confirmed by the CIT(A) for similar reasons. This ground of appeal of the assessee is allowed. Thus, the appeal of the assessee in ITA No.388/Coch/2015 is allowed. ITA No. 389/Coch/2015 23. Ground No. 1 in this appeal is with regard to sustenance of addition of ₹ 9.5 lakhs with regard to investment in purchase of land at Keerthi Nagar, Kaloor. A similar issue was considered in assessee's husband's case in ITA No. 385/Coch/2015 for the assessment year 2010-11 in para no. 7.5 of this order, wherein we have observed that addition cannot be made only on the basis of third part statement by placing reliance on the finding in para nos. 2.5 and 2.6 of this order in ITA No. 383/Coch/2015 we deleted the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... motor vehicles meant for transport vehicle or omni bus. The contention raised by the appellant for the claim of depreciation on the motor car is not correct because the car Corolla Altis would not come in the purview of the commercial vehicle which is meant to be transport vehicle or omni bus. Further, only because the unladen weight of Corolla Altis is 1160kg, which is within the weight prescribed in the definition for the light motor vehicle, which is included in the category of commercial vehicle, does not suffice the conditions for the assessee's car to be categorized under light motor vehicle within the definition of the word commercial vehicle. In view of this, the claim for depreciation is found to be not a valid claim. Thus, the CIT(A) upheld the disallowance made by the assessing officer. 24.3 The Ld. AR submitted that in the assessment order, the Assessing Officer had made an addition of 2,22,644/- to the total income by holding that the assessee is not eligible for 50% depreciation on motor car and the excess depreciation claimed by the assessee was disallowed. The assessee had submitted as per the Income Tax Rules, 1962, in the Table to New Appendix 1, in Part -A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther of which or a Motor Car or a Tractor or road roller, the unladen weight of any of which does not exceed 7500 Kg." According to the Ld. AR, the unladen weight of Corolla Altis is 1160 Kg. The Ld. AR submitted that in point No. 5, A.O has disallowed the entire expenditure of ₹ 8,56,853/-, which included depreciation on Motor Car at ₹ 3,18,064.50. Again A.O disallowed excess depreciation of ₹ 2,22,644/- which was included in ₹ 3,18,064.50. Hence, addition of ₹ 2,22,644/- may be deleted. 24.4 The Ld AR submitted that in exercise of the powers conferred by section 295 of the Income tax Act, 1961 (43 of 1961) the CBDT made the following rules further to amend the Income-tax Rules, 1962, namely:- "1. (1) these rules may be called the Income tax (Third Amendment) Rules, 2009. (2) they shall come into force on the 1st day of April, 2009. In the Income tax rules, 1962, in the Table to New Appendix I, in part-A relating to Tangible assets, under the heading III. Machinery and PLANT, in item(3), after sub-item (vi) and entries relating thereto, the following shall be inserted, namely:- "via) New commercial vehicle which is acquired on or after t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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