NAM ESTATES PVT. LTD Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2006-07. The appeal was admitted by a bench of this Court vide order dated 10.07.2013 on the following substantial question of law:

(2.) The facts leading to filing of this appeal in a nut shell are that assessee is private limited company registered under the Companies Act , 1956 engaged in the business of real estate development. The assessee filed its return of income on 12-06-2007 declaring an income of Rs.3,48,240/-. A survey was conducted under Section 133A of the Act in the business premises of the assessee. The case of the assessee was selected for scrutiny and an order of assessment under Section 143(3) of the Act was passed on 29-12-2008 by which the Assessing Officer disallowed business expenditure to the tune of Rs.17,52,527/- holding that the payment towards purchased of land during the assessment year was hit by Section 40A(3) .

(3.) The assessee filed an appeal before the Commissioner of Income Tax (Appeals), who by an order dated 23-02-2011 confirmed the order of the Assessing Officer with regard to the disallowance of business expenditure of the assessee. The assessee filed its cross objections against the aforesaid order in the appeal preferred by the revenue before the Income Tax Appellate Tribunal. The tribunal by its order dated 05-10-2012 affirmed the order of the Commissioner of Income Tax (Appeals) with regard to the disallowance of business expenditure. In the aforesaid factual background, the instant appeal has been filed.