Case Law Details
DCIT Vs B.N Ramachandra (HUF) (ITAT Kolkata)
ITAT Kolkata held that compensation paid out of sale proceeds to various parties is duly explained by the assessee with documentary evidences. Accordingly, addition towards compensation paid deleted.
Facts- The assessee along with one Shri Chethan A. Gandhi as the confirming party, sold land measuring 1 acre 16 guntas of land in Survey in favour of MARS Builders, under sale deed dated 20.01.2020 for a total consideration of Rs.7 Crores. Out of the said amount, a sum of Rs.2,50 Crores was paid to the confirming party, through a cheque.
AO disallowed expenditure of Rs.3,86,40,000/- claimed by the assessee. There is no mention with regard to the sum of Rs.2.50 Crores in the assessment order. Whilst the matter was under consideration before the CIT(A), AO wrote letter dated 04.09.2013 to the CIT(A) to add a sum of Rs.2.50 Crores paid to Shri Chethan A. Gandhi.
So far as expenditure of Rs.3,86,40,000/- disallowed by the AO, the CIT(A) held that a sum of Rs.3,27,00,000/- had been paid through cheques and accordingly confirmed disallowance to the extent of Rs.59,40,000/-. Revenue challenged CIT(A)’s order before the ITAT. The ITAT upheld payment of Rs.2.50 Crores to Shri Chethan Gandhi. So far as disallowance of Rs.3.27 Crores, the ITAT considered the list of payments recorded of it’s order and allowed Revenue’s appeal.
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