- (1.) This order shall dispose of IT Appeal Nos. 563 of 2005 and 421 of 2006 as the issues involved in both the appeals are common. For brevity, the facts are being taken from IT Appeal No. 563 of 2005.
(2.) This appeal has been preferred by the revenue under section 260A of the IT Act, 1961 (in short ''the Act'') against the order dt. 13-6-2005 passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as ''the Tribunal'') in ITA No. 320/Asr/2000, for the asst. yr. 1995-96, claiming the following substantial questions of law : (i) Whether the Tribunal, Amritsar Bench, Amritsar is right in confirming the action of the learned CIT(A) adopting the value of the land at Rs. 330 per sq. yard as against Rs. 60 per sq. yard applied by the AO in view of the allotment made by the improvement trust, Bathinda in the year 1981-82 in respect of adjoining land (ii) Whether the Honble Bench is right in treating the demolishing charges and repair expenses as revenue expenditure when no business activity was carried out after these expenses were incurred
(3.) Briefly stated, the facts necessary for adjudication as narrated in the appeal are that the assessee-company filed its return on 28-11-1995 for the asst. yr. 1995-96 declaring a loss of Rs. 12,62,170. The case was taken up for scrutiny and notice under section 143(2) of the Act was issued. In response thereto, the assessee filed a revised return on 31-1-1997 reducing the loss to Rs. 2,53,089 excluding Rs. 10,09,077 the amount of TDS on the interest payment. The assessment was completed on 11th March, 1998. Addition of Rs. 3,31,645 was made under the head ''Demolishing charges'' as these expenses were not allowable under section 37 of the Act. Further, addition of Rs. 2,13,094 was also made under the head'' ''Repair'' of'' building'''' as'' these'' expenses'' were'' incurred'' on construction of boundary wall and being of capital nature, the same were disallowed under section 37(1) of the Act. The assessment was completed at an income of Rs. 4,41,098 which was other than long-term capital gain. The AO determined the long-term capital gains at Rs. 11,36,520 by taking the fair market value of the capital asset at Rs. 60 per sq. yard as on 1-4-1981 as against Rs. 350 per sq. yard claimed by the assessee. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals)in short ''the CIT(A)''.. The CIT(A) vide order dt. 1-3-2000 estimated the rate of the land for the purpose of capital gains at Rs. 330 per sq. yard as on 1-4-1981 and thereby reduced the addition to Rs. 62,160 by allowing the relief to the turie of Rs. 8,39,160 to the assessee... The CIT(A) also deleted additions of Rs. 3,31,645 and Rs. 2,13,094 made under the heads ''Demolition charges'' and ''Repair of building'', respectively. Being dissatisfied, the revenue preferred an appeal before the Tribunal who vide order dt. 13th June, 2005 upheld the order of the CITfA) and dismissed the appeal. Hence, the present appeal by the revenue.;