RAJKUMARI SUNIEL MUTHA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This Appeal is filed by the Assessee to challenge the Judgment of the Income Tax Appellate Tribunal. Following revised questions are presented for our consideration.

(2.) Though as many as 6 questions are framed, the disputed issues are only 2, namely of the disallowance of expenditure of a sum of Rs. 6,00,60,000/- paid by the Assessee to one public charitable trust and another sum of Rs. 4.07 Crores paid by the Assessee to individuals. These questions arise in the following background.

(3.) The Appellant - Assessee is an individual. For the Assessment Year 2009-2010, she had filed the return of income declaring total income of Rs. 5.58 Lakhs from her business of real estate development. The Assessing Officer undertook scrutiny assessment of this return. During such assessment, it was found that the Assessee had entered into an agreement for purchase of an immovable property. According to her, it was found that there were number of charges and impediments in the title to the property and to clear this, the Assessee had to incur considerable expenditure. Out of various expenditures, the Assessing Officer disputed 2 of them. One was with respect to a sum of Rs. 6,00,60,000/- to one BRAC Trust by way of lumpsum compensation. Upon inquiry by the Assessing Officer, the Assessee sought to justify the said expenditure on the ground that the said trust had advanced a sum of Rs. 11.31 Crores to the Assessee in lieu of the Assessee providing land free from encumbrances and with non-agricultural use permission. The Assessee could not provide the land upon which the Assessee had to repay the sum. The Assessee was unable to repay the entire amount immediately. An MOU was executed to repay the principal with lumpsum compensation of Rs. 6,00,60,000/-, out of which Rs. 2,28,00,000/- was paid at the time of execution of MOU. The rest would be paid in installments over 24 months.