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TMI Blog2021 (8) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... one is sold during the year and others were used business and profession. 4. The Hon'ble CIT(A) and the Ld. A.O failed to appreciate the fact that the Midas Banquet Hall was a depreciable asset falling within the block of asset and hence the sale of the said asset ought to have been calculated under Sec.50 of the I. T. Act." 2. Briefly stated, the assessee who is a film actor had e-filed a revised return of income for A.Y. 2014-15 on 30.11.2014, declaring a total income of Rs.Nil after claiming current year loss of Rs. 46,12,269/-. The return of income filed by the assessee was processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. 3. Assessment was framed by the A.O vide his order passed u/s 143(3), dated 31.12.2016 at an income of Rs. 2,45,48,460/- after inter alia making the following additions/disallowances: Sr. No. Particulars Amount 1. Disallowance of interest expenditure u/s 36(1)(iii) Rs. 58,77,140/- 2. Addition towards the notional lettable value of three house properties owned by the assessee. Rs. 17,15,589/- 3. Addition u/s 50C qua the difference in the segment rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r authorities, had either failed to communicate to him about the requisite details and documents that were required to be filed in the course of the proceedings before the lower authorities, and/or had adopted a lackadaisical approach resulting to non-furnishing of the said documents before the said respective authorities. It is further stated by the assessee that as he is a film artist and not technically qualified, therefore, not being aware of the fact that the aforesaid documents were indispensably required to be filed to dispel all doubts, and substantiate his respective claims that were raised in the return of income, the same, thus, had resulted to the aforesaid failure in not placing the said documents on the records of the lower authorities. 6. We have perused the aforesaid application filed by the assessee under Rule 29 of the Appellate Tribunal Rules, 1963, which is supported by his 'affidavit' substantiating the reasons leading to failure on his part in filing the aforementioned documents before the lower authorities. After giving a thoughtful consideration, we are of the considered view that there are bonafide reasons on the part of the assessee in not filing the afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee was vague and not supported by any documentary evidence, the A.O disallowed the claim for deduction u/s 36(1)(iii) of Rs. 58,77,140/- that was raised by the assessee. Also, the A.O while concluding as hereinabove, observed, that the assessee as against his normal professional income and a paltry interest income had claimed deduction of the aforesaid exorbitant amount of interest expenditure. Backed by his aforesaid observation, the A.O disallowed the assessee's claim for deduction of interest expenditure of Rs. 58,77,140/-. On appeal, the assessee tried to impress upon the CIT(A) that the interest expenditure of Rs. 58,77,140/- on the loans were incurred by him qua his profession as that of a film artist and furnished the details as regards the same, as under: Sr. No. Particulars Amount Utilisation 1. Interest on OD Axis Bank 82,830 Utilization for pre-production of movie Poster Boys. 2. Interest on OD (Deustsche Bank) 8,58,719 Amount being used to purchase of commercial property located at Samarth Aishwarya which is subsequently let out. 3. Interest on Secured Loans 1,38,999 They are utilized to pay the overdraft of Axis Bank. 4. Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence', viz. letters from 3 script writers i.e Ms. Pratima Kulkarni, Ms. Sharvari Patankar and Mr. Sandesh Nayak, wherein they had stated that they had visited the premises of the assessee i.e Godrej Waldrof 13B and 14B for official work. Also, the ld. A.R in order to buttress his aforesaid claim that the properties in question were used by the assessee for the purpose of his business took us through the photographs showing photo shoots of models, rehearsals, auditions, look tests etc. On the basis of the aforesaid documentary evidence, it was the claim of the ld. A.R that the aforementioned properties in question were undeniably being used by the assessee for the purpose of his business. 9. We have heard the ld. Authorized Representatives for both the parties and perused the orders of the lower authorities, as well as the material available on record to which our attention was drawn in the course of hearing of the appeal. As the aforesaid documents, viz. letters of the scripts writers; photographs showing photo shoots of models; rehearsals; auditions; look tests etc. to which our attention was drawn by the ld. A.R in order to fortify his claim that the aforementioned properti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the A.O backed by his aforesaid observations worked out the ALV of the aforementioned 3 properties at Rs. 17,15,589/-, as under: Sr. No. Name of property Value as per balance sheet 8% of the book value Less 30% deduction u/s 24(a) Net value after 30% deduction u/s 24(a) 1. Property at Waldrof - (13B)- office 2,20,57,530 17,64,602 5,29,381 12,35,221 2. Office premises - Godrej Waldrof 80,78,000 6,46,240 1,93,872 4,52,368 3. Residential flat - Pune 5,00,000 40,000 12,000 28,000 Total 24,50,842 7,35,253 17,15,589 On appeal, it was inter alia submitted by the assessee that as the property owned by him at Pune was sold during the year, therefore, there was no question of determining the ALV of the same. Insofar the aforesaid claim was concerned, the CIT(A) in all fairness directed the A.O to verify the genuineness and veracity of the same and allow the consequential relief after carrying out necessary verifications. 11. Before us, it is submitted by the ld. A.R that the aforementioned properties were being used by the assessee for business purposes. In order to drive home his aforesaid claim, the ld. A.R once again t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the property sold by him during the year, viz. Midas Banquet Hall was a depreciable asset that formed part of the 'block of assets', therefore, the sale of the same ought to have been considered under Sec. 50 of the Act. Briefly stated, the assessee had sold an immovable property viz. Midas Banquet Hall for a consideration of Rs. 1,75,00,000/-. On a perusal of the agreement/registration deed, it was observed by the A.O that the registrar had adopted the stamp duty valuation of the aforesaid property at an amount of Rs. 3,90,68,000/-. In the backdrop of the aforesaid facts, the A.O called upon the assessee to put forth an explanation as to why the value adopted by the registrar may not be taken as the deemed sale consideration for the purpose of computing the LTCG by applying the provisions of Sec. 50C of the Act. As the reply filed by the assessee did not find favour with the A.O, therefore, he adopted the sale consideration of the aforementioned property at Rs. 3,90,68,000/- and made a consequential addition of Rs. 2,15,68,000/- [Rs. 3,90,68,000/- (-) Rs. 1,75,00,000/-] towards LTCG in the hands of the assessee. On appeal, it was the claim of the assessee that as the property i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment order, the A.O had summarily made an addition of an amount of Rs. 2,15,68,000/- (supra) i.e the difference in the value adopted by the registrar for stamp duty valuation i.e Rs. 3,90,68,000/- and the sale consideration for which the said property as per the A.O had been sold by the assessee i.e Rs. 1,75,00,000/-, under the head Long Term Capital Gain (LTCG) in the hands of the assessee. However, contrary to the aforesaid observation of the A.O that the assessee had sold the property in question, viz. Midas Banquet Hall for a consideration of Rs. 1,75,00,000/-, we find that the assessee's Chartered Accountant had at Sr.No.17 of his 'audit report' in 'Form 3CD' reflected the sale consideration of the said property at an amount of Rs. 4,25,00,000/- (as against the value adopted by the Stamp Valuation authority at Rs. 3,90,63,000/-). Also, we find, that the assessee's claim of having earned STCG of Rs. 3,01,01,488/- on sale of the aforesaid property under consideration, viz. Midas Banquet Hall (as per the assessee's 'Capital a/c') had also not been dislodged by the A.O while treating the differential amount of Rs. 2,15,68,000/- (supra) [i.e Rs. 3,90,68,000/- (value adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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