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TMI Blog2015 (12) TMI 1760X X X X Extracts X X X X X X X X Extracts X X X X ..... on the expenditure incurred during the transfer of an asset deduction can be allowed on the expenditure incurred during the transfer of an asset and it clearly shows that the burden is on the assessee to demonstrate that the expenses incurred for the transfer of asset is fulfilled. In the case on hand also, the assessee produced the bill issued by M/s. Sood Realtors & Developers and the amount paid by the assessee by way of cheque, therefore, the ld. CIT(Appeals) has rightly applied the principle laid down by the ITAT Pune Bench in the case of KRA Holding & Trading Pvt. Ltd. [2011 (5) TMI 498 - ITAT PUNE]. We are of the view that the CIT(Appeals) was rightly justified in directing the Assessing Officer to allow the said deduction. Addition u/s 41 - Held that:- In the case on hand, the father of the assessee died long back, the said amount given by him as in the nature of personal loan to purchase a house property and also received from the estate of her father entered into the books of account of the assessee since long back. The assessee did not credit the said amount to her profit & loss account Therefore, in our view, scope of section 41(1)(a) is not applicable to the case on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a monthly rent of ₹ 13,558.50 on 02.08.2001. Further, the assessee also granted licence to renovate the rented portion and to conduct business of catering food, convention centre or marriage hall @ ₹ 32,000/- per month. Accordingly she filed a return declaring total income of ₹ 1,26,16,980/- on 11.03.2010. During the assessment proceedings, the Assessing Officer determined the income from house property at ₹ 24,48,897/- as against ₹ 3,56,524/-. In support of the assessee s contention, ld. A.R. produced a Deed of rent dated 01.08.2001 and submitted that the assessee is receiving ₹ 13,558.50 per month from 01.08.2001. But however, the Assessing Officer did not take into consideration the agreement and it is not registered and does not contain the duration of rent and observed as under:- The agreement can only be treated as a self serving document to suit the assessee s purpose. This is very unusual of any rent agreement not to mention the date upto which the rent agreement shall remain in force. Normally an agreement is entered into between the owner and the tenant for a period of 11 months subject to renewal and on such renewals the rent str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants also, the assessee has all along been assessed in terms of the said agreement and the returns were accepted by the Revenue. Further, the ld. CIT(Appeals) has also found fault to the order of Assessing Officer that he ought not to have accorded much credence to the report of the Income Tax Inspector and the ld. CIT(Appeals) observed that in the absence of any evidence that the assessee is receiving the rent higher than the amount returned and in the absence of any corroborative evidence in support of books of account, the Assessing Officer is unjustified in determining the rent on few estimates without concrete evidence. Therefore, the ld. CIT(Appeals) directed the Assessing Officer to accept the rental income as per the return filed by the assessee. 6. Before us, the ld. D.R. submitted that the ld. CIT(Appeals) without taking into consideration the merits of the case deleted the enhancement of rental income of house property. Further, the ld. D.R. submits that the property under consideration is situated in Kolkata city and it is a commercial complex. The Assessing Officer rightly determined and enhanced the rent at ₹ 50/- per sq.ft. as per the report of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department estimating the lettable value in the locality cannot partake the assessment of an approved valuer inasmuch as Inspector is not a technical person to do such thing. According to the Ld. AR, the appellant entered into agreements with M/s. Samuel Fitz Co. Pvt. Ltd. for letting out 3013 sq.ft. and Regency Convention Centre in August, 2001 for a period of 9 years with option to carry out necessary renovation to facilitate running of their businesses and the monthly rents as per the agreements were settled upto F.Y. 2010-11 and in such circumstances, in my opinion, such agreed settlement of rent cannot be changed unilaterally by the appellant without the option of the tenants. It is further brought to my notice by the Ld. AR that the rent received on the basis of the aforesaid agreements has been accepted in earlier years, where in the appellant's income from house property has been determined on the basis of such agreements. Therefore, when the rent received from the same house property as shown by the appellant was accepted in past years, there remains no conceivable rationale to disbelieve the rental income from house property on the basis of the same very agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or cess or taxes paid to the Government of Karnataka. The assesese has not produced any documentary evidence that M/s. Sood Realters and Developers rendered any services to the assessee and the assessee failed to establish the business expediency. Therefore, the Assessing Officer disallowed the sum paid therein to the said M/s. Sood Realters and Developers treating the same as not genuine. The ld. CIT(Appeals) relying on two orders of the Hon ble Delhi Benches of this Tribunal in the case of DCIT -vs.- Jindal Equipment Leasing Consultancy Services Limited reported in [2011] 131 ITD 263 and ITAT, Pune Bench in the case of KRA Holding Trading (P) Ltd. -vs.- DCIT reported in [2011] 46 SOT 19 (Pune) opined that the Assessing Officer was not justified in disallowing the expenditure on payment to M/s. Sood Realters Developers and thereby directed the Assessing Officer to allow the said deduction. During the proceedings before this Tribunal, ld. D.R. contended that there is no agreement between the assesese and M/s. Sood Realters Developers to show that M/s. Sood Realters Developers rendered their services in selling the property belonging to the assessee. He also submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000/- and ₹ 31,50,000/- totalling to ₹ 46,50,000/- as income of the assessee. 11. During the course of first appellate proceedings, ld. A.R. contended that the order of the Assessing Officer is bad in law and the assessee was never assessed under the head business and there is no cessation of liability and section 41(1) is not relatable to the assessee. 12. Ld. CIT(Appeals) following the judgment of the Hon ble Supreme Court in the case of CIT -vs.- Sougali Sugar Works Pvt. Ltd. which confirmed the judgment of the Hon ble Calcutta High Court, which was reported in 236 ITR at page 518 reproduced as under:- The principle that expiry of the period of limitation prescribed under the Limitation Act could not extinguish the debt but it would only prevent the creditor from enforcing the debt, has been, well settled. If that principle is applied, it is clear that mere entry in the books of account of the debtor made unilaterally without any Act on the part of the creditor will not enable the debtor to say that the liability has come to an end. Apart from that, that will not buy itself confer any benefit on the debtor as contemplated by the section . 13. Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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