Case Law Details
Kalyan Constructions Vs ITO (ITAT Hyderabad)
Where assessee had not claimed cash payment of Rs. 1.50 crores for purchase of land as business expenditure or treated as stock or capitalized the same in order to claim depreciation in the future, disallowance under section 40A(3) could not be made.
FULL TEXT OF THE ITAT JUDGMENT
This appeal filed by the assessee is directed against the order dated 05/10/2016 of CIT(A) – 4, Hyderabad for AY 2009-1 0.
2. The assessee is a partnership firm engaged in the real estate business. The assessee filed its return of income for the AY 2013-14 on 30.09.2013 admitting a total income at Rs.10,85,100/-. A Survey u/s.133A was conducted on 21.01.2015. During the survey proceedings, it was noticed that the assessee purchased Plot no.25 & 26 admeasuring 360 sq. yds. at Haripuri Colony, Nagole vide Doc NO.555/2013 dated 31.01.2013 for a consideration of Rs.58,00,000/-. However, an agreement of sale dated 20.11.2012 shows the value agreed and paid was Rs.2,08,00,000/-. The assessee paid Rs.58 lakhs through cheque and Rs.1,50,00,000/- was paid through cash which violates Section 40A(3). In view of this, the case was reopened by issuing notice u/s.148 on 27.01.2015. In response, the assessee filed revised return of income on 26.05.2015 admitting total income at Rs.61,86,860/-. The assessment was completed u/s.143(3) r.w.s 147 on 31 .03.2016 by determining total income at Rs.2,11,86,863/-.
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