Claim for deduction on account of land vacation compensation charges allowed without specific enquiry by the AO, the Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) upheld the revisional order the Principal Commissioner of Income-tax, Ahmedabad-4, Ahmedabad [“PCIT”] dated 24.03.2020 passed under Section 263 of the Income-tax Act, 1961.
The assessee was represented by Shri Suresh Gandhi and the revenue was represented by Shri Vijay Kumar Jaiswal.
The assessee, Texraj Realty Pvt. Ltd engaged in the real estate business. The return of income for the year under consideration was filed by it on 05.10.2015 declaring a total income of Rs.1,30,24,380/-. In the assessment completed under Section 143(3) of the Act vide an order dated 18.12.2017, the total income of the assessee was determined by the Assessing Officer at Rs.10,72,87,310/- after making the disallowances.
The assessee contended that the issue relating to the land vacation compensation charges claimed by the assessee in the year under consideration was duly examined by the Assessing Officer by making the necessary inquiries and after satisfying himself on perusal of the relevant details and documents placed on record by the assessee.
It was observed that the land vacation compensation charges of Rs.10 crores were paid by the assessee-company to M/s. Bosch Rexroth India Ltd. for vacating the land was claimed by the assessee company as a deduction in the return of income filed for the year under consideration. The PCIT observed that the Assessing Officer did not inquire into certain specific issues while passing the assessment order. Further, viewed from the submission made by the assessee that the claim for land vacation compensation charges was allowed by the Assessing Officer partly by applying his mind.
Shri P M Jagtap, vice-president and Shri T R Senthil Kumar, judicial member upheld the order passed under Section 263 of the Act on the issue of the claim of the assessee for credit of TDS of Rs.9,05,000/- as the same was wrongly allowed by the Assessing as agreed even by the assessee at the time of the hearing. The appeal of the assessee is partly allowed.
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