1.   Naresh T. Wadhwani Vs. DCIT, I.T.A. Nos. 18, 19 & 20/PN/2013, Date of Order: 28.10.2014, ITAT - Pune

Projected terrace area i.e. open to sky is not to be included from the meaning of expression “built-up area” for the purposes of S. 80IB(10)(c).

The Finance (No.2) Act, 2004 inserted the definition of built-up area w.e.f. 01.04.2005 in terms of section 80IB(14)(a) of the Act. In terms of the said definition, built-up area means the inner measurement of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units. Consequently, area of terrace cannot be included as a part of the ‘built-up area’ in a case where such terrace is a projection attached to the residential unit and there being no room under such terrace, even if the same is available exclusively for use of the respective unit holders. (Ceebros Hotels Private Limited vs. DCIT, vide Tax Case (Appeal) No. 581 of 2008 order dated 19.10.2012, CIT vs. Sanghvi and Doshi Enterprise, (2013) 255 CTR 156 (Mad.), Amaltas Associates vs. ITO, (2011) 131 ITD 142, Modi Builders & Realtors (P.) Ltd., ITA No. 1541 of 2010 (Hyd.), Siddhivinayak Homes 28 September, 2012, ITA No.8726/Mum/2010 & order dated 26.09.2012 referred).

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2.  Praveen Saxena Vs. JCIT, I.T.A. No. 3674/Del/2010 , Date of Order: 31.10.2014 , ITAT - Delhi

Whether expenditure incurred on legal fees to defend criminal proceedings explained is allowable u/s 37(1)

Held No.

In the cases where assessee is able to demonstrate positively that the claimed expenditure on legal fees and proceedings is in extricably or proximately related to caring on the business of the assessee more effectively then the same shall be allowable. However, in the cases where the given or claimed expenditure on legal fees and proceedings is remotely connected or unconnected to caring on of business of the assessee, then the same may not be allowable u/s 37 of the Act. Applying this to the facts in extant case, it can be safely inferred that expenditure to defend in custom duty evasion criminal case, having no connection with caring on of business, is held to rightly disallowed by the AO and same disallowance was upheld by the CIT(A) on cogent and reasonable basis. Ergo the assessees contentions are jettisoned.   

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