Smt D.Suvarna, Hyderabad V. ACIT, Hyderabad

ITA 462/HYD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6128 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 18-03-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A TRIPATHY
• Assessee Lawyers: M V R PRASAD
• Keywords: Capital asset; Business income; Cost of acquisition; Corroborative evidences; Valuation report
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER . ITA NO.462/HYD/2008 : ASSESSMENT YEAR 2003-04. SMT. D. SUVARNA, BAGHAMBERPET, HYDERABAD. (PAN:AGBPD9042N) VS ACIT, CIR-4(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.V.R. PRASAD DEPARTMENT BY : SHRI A. TRIPATHY O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT (A)-V, HYDERABAD DATED 15-1-2008 AND IT PERTAINS TO THE ASSESSMENT YEAR 2003-04. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 25-9- 2003, ADMITTING AN INCOME FROM HOUSE PROPERTY AND I NCOME FROM CAPITAL GAINS, TOTALLING TO RS.30,06,360. THE CASE HAS BEEN SELECT ED FOR SCRUTINY VIDE CIT (A)S LETTER DATED 29-9-2004. THE INCOME WAS SHOWN UNDER THE HEAD HOUSE PROPERTY AND FROM CAPITAL GAINS. THE ASSESSING OFFI CER NOTICED THAT, AS PER THE COMPUTATION OF CAPITAL GAIN, THE ASSESSEE SHOWN GRO SS SALE CONSIDERATION OF RS.1,41,56,700 WAS SHOWN AT RS.70,78,350 AND AFTER CLAIMING DEDUCTION FOR RS.24,62,650 TOWARDS THE EXPENDITURE UNDER SECTION 48(I) AND FOR RS.2,80,180 UNDER SECTION 48(II) OF THE ACT, THE LONG TERM CAPI TAL GAINS WAS SHOWN AT ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 2 RS.43,35,520. AFTER CLAIMING DEDUCTION FOR RS.13,85 ,000 UNDER SECTION 54F, TAXABLE LONG TERM CAPITAL GAINS WAS SHOWN AT RS.29, 50,520. DURING SCRUTINY OF THE RETURN, THE ASSESSING OFFICER NOTED THAT THE HO USE PLOTS SOLD BY THE ASSESSEE WERE IN THE NATURE OF SOCK-IN-TRADE, SINCE AS PER THE PAHANIS ENCLOSED ONLY WITH THE RETURN WHICH RELATES TO THE YEAR 1993 -94, THE DESCRIPTION OF THE PROPERTY IS SHOWN AS PLATLU IN TELUGU LANGUAGE. ACCORDING TO THE ASSESSING OFFICER, THE LANDS WERE CONVERTED AS PLOTS AND STOC K-IN-TRADE IN THE YEAR 1993- 94. THE ASSESSING OFFICER WAS OF THE VIEW THAT CON VERSION OF THE LAND INTO PLOTS CONSTITUTES ACTIVITY OF ADVENTURE IN THE NATURE OF TRADE AND THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54F OF THE ACT . ACCORDINGLY, VIDE LETTER DATED 13-10-2005, WHILE ASKING THE ASSESSEE FOR FUR NISHING EVIDENCES IN SUPPORT OF THE EXPENSES CLAIMED UNDER DIFFERENT HEA DS, HE HAS ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PROFIT FROM SALE OF LAND SHOULD NOT BE TAXED AS BUSINESS INCOME. 3. IN RESPONSE TO THIS, THE ASSESSEE HAS SUBMITTED THAT AGRICULTURAL LANDS WERE ALLOTTED IN HER NAME JOINTLY WITH SHRI G . LAXMA REDDY. ON THE ABOVE AGRICULTURAL LANDS, THE ASSESSEE HAS BEEN CAR RYING ON AGRICULTURAL OPERATIONS. AFTER SOME YEARS, AS AGRICULTURAL ACTI VITY WAS NOT VIABLE, SHE COULD NOT CARRY ON AGRICULTURAL ACTIVITY. FOR THE PURPOSE OF CALCULATING LAND REVENUE, SINCE SHE HAS NOT CARRIED OUT AGRICULTURAL ACTIVITY IN THE YEAR 1993-94, PLOT MIGHT HAVE BEEN WRITTEN IN PAHANIS. AS THE AGRICUL TURAL ACTIVITY WAS NOT VIABLE, TO SECURE BETTER PRICE, THEY HAVE CONVERTED THE AGR ICULTURAL LANDS INTO PLOTS IN THE YEAR 2000-01. HENCE, THESE TRANSACTIONS CANNOT BE CONSIDERED AS ADVENTURE IN THE NATURE OF TRADE. REGARDING EXPEND ITURE OF RS.22,19,907, CLAIMED FOR LAYING OF ROADS, DRAINAGE SYSTEM, ETC., THE ASSESSEE REFERRED TO THE VALUATION REPORT OBTAINED FROM THE APPROVED MCH STR UCTURAL ENGINEER AND SUBMITTED THAT CONSIDERING THE EXTENT OF LAND AND N ATURE OF ACTIVITY, THE SAME IS REASONABLE. THE ASSESSEE FURTHER SUBMITTED THAT THEY HAVE PAID STAMP DUTY AND REGISTRATION FEE ON SALE OF THEIR PLOTS AS PER THE TERMS AND CONDITIONS BETWEEN THEM AND PURCHASERS. IN THIS CONTEXT, THE ASSESSEE REFERRED TO THE CONFIRMATION LETTERS OBTAINED FROM THE PURCHASERS W HICH HAVE BEEN FILED ALONG WITH THE RETURN F INCOME. THE ASSESSEE FURTHER SUB MITTED THAT THEY HAVE ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 3 INCURRED BROKERAGE ON SALE OF PLOTS, AND THE EXPEND ITURE CLAIMED ON THIS ACCOUNT IS REASONABLE AND IT IS FURTHER SUBMITTED T HAT AS THE INCOME ARISING FROM SALE OF HER AGRICULTURAL LAND IS LONG TERM CAP ITAL GAINS, SHE HAS CLAIMED DEDUCTION UNDER SECTION 54F OF THE ACT TOWARDS COST OF CONSTRUCTION OF HOUSE PROPERTY MADE IN THUNGATURTHI VILLAGE, NALGONDA DIS TRICT. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED SUCH EXPLANATION OF THE ASSESSEE AND HE NOTED THAT EXPENDITURE TOWARDS STAMP DUTY HAS TO BE MET BY THE PURCHASER ONLY AND NOT BY THE SELLER, AND THEREFORE THE CLAIM FOR RS.17,00,387 IS NOT ALLOWABLE. SIMILARLY, THE EXPENDITURE TOWARDS REGI STRATION FEES HAS TO BE MET BY THE PURCHASER AND THEREFORE THE SAME CANNOT BE A LLOWED IN THE HANDS OF THE ASSESSEE. AS REGARDS THE CLAIM FOR RS.22,19,900 TOW ARDS LAYOUT EXPENDITURE IS CONCERNED, IN THE ABSENCE OF ANY EVIDENCE FURNISHED BY THE ASSESSEE IN SUPPORT OF SUCH EXPENDITURE, THE ASSESSING OFFICER DISALLOWED THE ENTIRE AMOUNT AND ALSO IN THE ABSENCE OF ANY SUPPORTING EVIDENCE FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXPEN DITURE OF RS.9,36,650 TOWARDS BROKERAGE. IN THE RETURN OF INCOME THE ASS ESSEE CLAIMED FOR PAYMENT OF RS.4,50,000 TO THE PREVIOUS OWNERS FOR SECURING UNINTERRUPTED RIGHT OVER THE LAND AND THE ASSESSEE HAS ADDED THE ABOVE AMOUN T FOR COMPUTING THE INDEXED COST OF ACQUISITION OF THE LAND. HOWEVER, AS THE ASSESSEE HAS NOT FURNISHED DETAILS OF SUCH PAYMENTS NAMELY, MODE AND PARTICULARS OF PAYMENT, INCLUDING THE CHEQUE NUMBER, BANK A/C ETC., THE ASS ESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE FOR MAKING SUC H PAYMENTS. THE ASSESSING OFFICER CONSIDERED THE TRANSACTIONS IN TH E HANDS OF THE ASSESSEE AS ADVENTURE IN THE NATURE OF TRADE AND TAXED THE ENTI RE AMOUNT OF 50% SHARE IN THE SALE OF CONSIDERATION AMOUNTING TO RS.70,78,350 WITHOUT ALLOWING ANY DEDUCTION AND COMPLETED THE ASSESSMENT ACCORDINGLY. AGGRIEVED AGAINST THE ORDER OF ASSESSING OFFICER, THE ASSESSEE WENT IN AP PEAL BEFORE THE CIT (A). ON APPEAL, THE CIT (A) AFTER CONSIDERING THE ISSUES EL ABORATELY IN HIS ORDER HELD THAT THE PROFIT ARISING FROM THE SALE OF THE LAND IN QUESTION HAS TO BE TAXED UNDER THE HEAD CAPITAL GAINS AND NOT UNDER THE HE AD BUSINESS INCOME AND DISALLOWED THE EXPENDITURE CLAIMED BY THE ASSESSEE AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. FURTHER AGGRIEVED, THE AS SESSEE IS IN APPEAL BEFORE US. ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 4 4. 1ST AND 6 TH GROUNDS RAISED IN THIS APPEAL ARE GENERAL IN NATUR E AND NO ADJUDICATION IS REQUIRED. 5. SECOND GROUND OF APPEAL IS WITH REGARD TO DISAL LOWANCE OF EXPENDITURE OF RS.22,19,900 INCURRED BY THE ASSESSE E ON THE LAYING OF ROADS, DRAINAGE SYSTEM, ELECTRIFICATION AND PLANTATION ETC ., AS COST OF IMPROVEMENT OF THE CAPITAL ASSET IN TERMS OF SECTION 48(II) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS INCURR ED THE EXPENDITURE TOWARDS LAYING OF ROADS, DRAINAGE SYSTEM ETC. THE A SSESSEE SPENT THE AMOUNT TOWARDS THE ABOVE EXPENDITURE TO GET BETTER PRICE F OR HER PROPERTY. IT WAS CONTENDED THAT THE EXPENDITURE INCURRED TOWARDS DEV ELOPMENT OF PLOTS SHOULD HAVE BEEN ALLOWED AS EXPENDITURE. THE ASSESSEE BEI NG AN AGRICULTURALIST HAS NOT MAINTAINED FULL VOUCHERS/BILLS FOR THE ABOVE WO RK. SHE HAS FURNISHED A STATEMENT OF SUCH EXPENDITURE FROM AN APPROVED ENGI NEER. IT WAS CONTENDED THAT CONSIDERING THE EXTENT OF LAND AND ACTIVITIES CARRIED OUT IN THE LAYOUT TOWARDS DEVELOPMENT, THE EXPENDITURE INCURRED IS QU ITE REASONABLE. IT WAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER DISALL OWED THE ABOVE EXPENDITURE AS IT WAS NOT INCURRED DURING THIS YEAR. IT WAS SU BMITTED THAT EXPENDITURE INCURRED BY THE ASSESSEE IN EARLIER YEARS SHOULD BE ALLOWED AS EXPENDITURE AS THE SAME HAS TO BE CONSIDERED AS OPENING WORK-IN-PR OGRESS ACCOUNT. AS THE EXPENDITURE TRANSFERRED TO WORK-IN-PROGRESS ACCOUNT YEAR WISE, THE TOTAL EXPENDITURE INCURRED IN THE OPENING WORK IN PROGRES S/COST OF THE PROPERTY OF THE ASSESSEE, SHOULD HAVE BEEN ALLOWED AS EXPENDITU RE AT THE TIME OF SALE. IN SUPPORT OF HIS CLAIM, HE FILED COPY OF THE STATEMEN T OF EXPENDITURE INCURRED IN CONNECTION WITH THE LAYING OF ROADS ETC., AND ALSO FILED A COPY OF VALUATION REPORT OF THE MCH STRUCTURAL ENGINEER IN HIS PAPER BOOK FILED IN SUPPORT OF HIS CONTENTION AND IT IS SUBMITTED THAT THE ASSESSEE CL AIMED ALONG WITH CO-OWNER AN AMOUNT OF RS.49,25,302 TOWARDS EXPENDITURE INCUR RED WHOLLY IN CONNECTION WITH TRANSFER UNDER SECTION 48(I) OF THE ACT AND CL AIMED 50% OF THE SAID EXPENDITURE AS ITS EXPENDITURE AS DEDUCTION UNDER S ECTION 48(I) OF THE ACT WHICH INCLUDES LAYOUT EXPENDITURE, STAMP DUTY, REGI STRATION FEES AND ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 5 BROKERAGE. HE ALSO RELIED ON THE FOLLOWING DECISIONS IN SUPPORT OF ITS CONTENTION. I) CIT VS. KOTHARI REPORTED IN 82 ITR 794 II) BRIJ BHUSHAN LAL PARDUMAN KUMAR VS CIT (115 ITR 524) 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE BY RELYING ON THE ORDERS OF THE AUTHORITIES BELOW OPPO SED THE CONTENTIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IN FACT CONVERTED THE AGRICULTURAL LAND IN TO PLOTS BY MAKING A LAY OUT. THE ASSESSEE ALSO SUBMITTED A VALUATION REPORT OBTA INED FROM MCH ENGINEER VALUING THE EXPENDITURE AT RS.23,08,891 AND ALSO FU RNISHED A COPY OF STATEMENT SHOWING EXPENDITURE INCURRED FOR PROVIDIN G BASIC AMENITIES IN THE LAYOUT DONE BY THE ASSESSEE ALONG WITH HIS CO-OWNER . IT IS OBVIOUS THAT THE ASSESSEE WOULD HAVE EXPENDED THE SAID EXPENDITURE T O GET BETTER PRICE FROM THE MARKET FOR HER PROPERTY. WITHOUT MAKING SUCH E XPENDITURE, IT IS NOT PRACTICABLE TO MAKE OUT A LAYOUT BY CONVERTING AGRI CULTURAL LAND INTO PLOTS. HOWEVER, THE ASSESSEE NOT MAINTAINED VOUCHERS, BILLS ETC., FOR THE ABOVE WORK DONE. SHE HAS FURNISHED ONLY STATEMENT OF SUCH EXP ENDITURE FROM AN APPROVED ENGINEER. IN OUR CONSIDERED VIEW, THE AMOUNT OF RS .22,19,900 INCURRED BY THE ASSESSEE ALONG WITH CO-OWNER FOR CONVERSION OF AGRI CULTURAL LAND INTO PLOTS SEEMS TO BE ON HIGH SIDE AND THEREFORE CONSIDERING TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN THE ABSENCE OF PRO PER EVIDENCE, WE ESTIMATE THE EXPENDITURE INCURRED BY THE ASSESSEE JOINTLY WI TH THE CO-OWNER FOR CONVERSION OF PLOTS FROM AGRICULTURAL LAND AT RS. 12 LAKHS AS AGAINST RS.22,19,900 CLAIMED BY THE ASSESSEE. THEREFORE, T HIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 6. 3 RD GROUND OF APPEAL IS WITH REGARD TO THE PAYMENT OF RS.4,50,000 TO THE PREVIOUS OWNERS FOR SECURING UNINTERRUPTED R IGHT OVER THE LAND. WE FIND ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 6 THAT THE ASSESSEE HAS ADDED THIS AMOUNT FOR COMPUTI NG THE INDEXED COST OF ACQUISITION OF THE LAND. IN THE RETURN, THE ASSESSE E HAS FILED PHOTOCOPIES OF 5 RECEIPTS OF RS.1 LAKH EACH IN SUPPORT OF THE CLAIM OF THE ABOVE PAYMENT MADE TO THE FAMILY MEMBERS OF THE PREVIOUS OWNERS OF THE SAID LAND. HOWEVER, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS NO T FURNISHED DETAILS OF PAYMENTS LIKE MODE OF PAYMENT, WHETHER PAID IN CASH OR CHEQUE, BANK ACCOUNT PARTICULARS AND SOURCES OF THE PAYMENT AND HENCE TH E ASSESSING OFFICER DISALLOWED THE ENTIRE CLAIM OF THE ASSESSEE WHILE C OMPUTING THE CAPITAL GAINS AND CIT(A) ALSO CONFIRMED THE DISALLOWANCE. THE LEA RNED A COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS. 4.50,000 WAS PAID TO THE SONS OF PREVIOUS OWNERS WHO WERE IN THE POSSESSION OF THE L AND FOR SECURING UNINTERRUPTED RIGHT OVER THE SAID LAND BY MAKING TH E PAYMENT, THE ASSESSEE IMPROVED THE TITLE OF THE LAND AND HENCE THE SAID E XPENDITURE HAS TO BE ALLOWED AS DEDUCTION UNDER SECTION 48(II) OF THE ACT WHILE COMPUTING CAPITAL GAINS. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE AFORESAID PAYMENT WAS MADE PURELY ON PERSONAL CONSIDERATION A ND HENCE IT CANNOT BE SAID THAT THE SAID AMOUNT HAS BEEN PAID FOR ACQUIRI NG UNINTERRUPTED RIGHT OVER THE SAID PROPERTY AND THEREFORE NO DEDUCTION CAN BE ALLOWED UNDER SECTION 48(II) OF THE ACT. THEREFORE, THE ORDERS OF THE LO WER AUTHORITIES ARE TO BE UPHELD. 8. WE HAVE HEARD THE SUBMISSIONS OF THE RIVAL PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE PAID ADDITIONAL CONSIDERATION TO THE PREVIOUS OWNERS FOR ACQUIRING UNINTERRUPTED RIGHT OVER THE SAID LAND FOR WHICH THE ASSESSEE PRODUCED COPIES OF RECEIPTS ISSUED BY THE SONS OF PREVIOUS OWNERS AND THEY HAVE ADMITTED THAT THEI R FATHERS HAVE RECEIVED FULL SALE CONSIDERATION FROM THE PURCHASERS AND PAID THE SAID AMOUNT IN VIEW OF THEIR POOR FINANCIAL CONDITION. IT IS COMMON PRAC TICE THAT WHILE SECURING THE UNINTERRUPTED TITLE OVER THE PROPERTY, THE LAND OWN ERS MADE THE PAYMENT TO THE POSSESSORS OF THE SAID LAND AND THE DEPARTMENT DID NOT BRING ANYTHING ON RECORD TO CONTROVERT THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 7 NO ONE POSSESSED THE LAND UNDER DISCUSSION. AFTER GOING THROUGH THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND CONSIDERING THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE , WE FIND FORCE IN THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESSEE T HAT THE ASSESSEE HAS PAID RS.4,50,000 TO THE SONS OF THE PREVIOUS OWNERS TOWA RDS IMPROVING THE TITLE OF THE LAND AND TO AVOID FURTHER LITIGATION IN THIS MA TTER. IN VIEW OF THE ABOVE, WE ALLOW THE CLAIM OF THE ASSESSEE ON THIS ISSUE. 7. FOURTH GROUND OF APPEAL IS WITH REGARD TO THE D ISALLOWANCE OF STAMP DUTY OF RS.17,00,387 AND REGISTRATION FEE OF RS.68,365 UNDER SECTION 48(I) OF THE ACT. IT WAS SUBMITTED THAT THE ASSESS EE HAS BORNE THE STAMP DUTY OF RS.17,00,387 ON BEHALF OF THE PURCHASERS, AGREED AS PER THE TERMS AND CONDITIONS BETWEEN THE ASSESSEE AND THE PURCHASERS. IT WAS STATED BEFORE THE FIRST APPELLATE AUTHORITY THAT FOR THIS EXPENDITURE , THE ASSESSEE HAS FILED CONFIRMATION LETTERS FROM THE INDIVIDUAL PURCHASERS BEFORE THE ASSESSING OFFICER AND IT IS SUBMITTED THAT SUCH EXPENDITURE ON STAMP DUTY IS AN ALLOWABLE EXPENDITURE INCURRED WHOLLY IN CONNECTION WITH THE TRANSFER AS PER SECTION 48(I) OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE RE ITERATED THE SAME SUBMISSIONS BEFORE US WHICH WERE SUBMITTED BEFORE T HE FIRST APPELLATE AUTHORITY. WE FIND THAT THE PAYMENT TOWARDS STAMP DUTY AND REGISTRATION FEE HAS TO BE MET BY THE PURCHASER ONLY AND NOT BY THE VENDOR. THE CONFIRMATION LETTERS OBTAINED FROM THE INDIVIDUAL PURCHASERS, TH E FIRST APPELLATE AUTHORITY RIGHTLY OBSERVED THAT THE SAME ARE UNDATED AND CONT AINED SIGNATURE OF THE ASSESSEE ONLY. AS PER THE TERMS AND CONDITIONS MENT IONED IN THE COPIES OF THE SALE AGREEMENTS, THE VENDEE HAD TO BEAR THE STAMP D UTY AND REGISTRATION FEES. HENCE, WE ARE NOT INCLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE THAT HE HAS BORNE THE STAMP DUTY AND REGISTRATION FEES WHILE SE LLING THE LANDS TO DIFFERENT PERSONS. IN VIEW OF THE ABOVE, WE DO NOT SEE ANY IN FIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES BELOW AND WE UPHOLD THE ACTION OF THE CIT (A) ON THIS ISSUE AND REJECT THE GROUND RAISED BY THE ASSESSEE. 8. FIFTH AND LAST GROUND OF APPEAL IS WITH REGARD TO DISALLOWANCE OF DEDUCTION ON ACCOUNT OF BROKERAGE OF RS.9,36,650. I T WAS SUBMITTED BEFORE ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 8 THE FIRST APPELLATE AUTHORITY THAT THE ASSESSEE HAS INCURRED EXPENDITURE OF THIS AMOUNT TOWARDS BROKERAGE FOR SALE OF PLOTS AND STAT ING THAT IT IS COMMON AND GENERAL PRACTICE TO INCUR BROKERAGE FOR SALE OF PLO TS AND THE EXPENDITURE INCURRED IS QUITE REASONABLE IN THIS LINE OF BUSINE SS. THE FIRST APPELLATE AUTHORITY FOUND THAT SINCE THE ASSESSEE FAILED TO F URNISH ANY EVIDENCE IN SUPPORT OF THE ABOVE EXPENDITURE OF RS.9,36,650, TH E ASSESSING OFFICER HAS DISALLOWED SUCH CLAIM OF THE ASSESSEE. BEFORE THE FIRST APPELLATE AUTHORITY ALSO, THE ASSESSEE DID NOT FURNISH ANY SUPPORTING EVIDENC E IN THIS REGARD. HOWEVER, IT IS COMMON AND GENERAL PRACTICE TO INCUR SOME EXP ENDITURE ON ACCOUNT OF BROKERAGE FOR SALE OF PLOTS. TO MEET THE ENDS OF J USTICE, WE ESTIMATE THE EXPENDITURE ON ACCOUNT OF BROKERAGE AT 2% OF THE T OTAL SALE CONSIDERATION IN THE ABSENCE OF ANY SUPPORTING EVIDENCE OF SUCH EXPE NDITURE CLAIMED. HENCE, THIS GROUND OF THE ASSESSEE IS ALLOWED IN PART. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. ORDER WAS PRONOUNCED IN THE COURT ON 30- 11-201 0. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER DT. 30- 11-2010. COPY FORWARDED TO: 1. SRI M.V.R. PRASAD, ADVOCATE, 5-9-22/1, ADARSHNAG AR, HYDERABAD. 2. 3. 4. 5. ACIT, CIR-4(1), HYDERABAD. CIT (A)-V, HYDERABAD. CIT, A P, HYDERABAD. THE D.R., ITAT, HYDERABAD JMR ITA NO.462/HYD/2008 SMT. D. SUVARNA,HYD. 9