M/s. Renaissance Infraprojects, Raigad V. Deputy Commissioner of Income-tax,

ITA 1207/PUN/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6252 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 03-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: HARI KRISHAN
• Keywords: Unexplained expenditure; Principle of natural justice; Corroborative evidences; TDS
• Section: 208; 22

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE ( THROUGH VIRTUAL COURT) BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ) AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.1207/PUN/2016 / ASSESSMENT YEAR: 2012-13 M/S. RENAISSANCE INFRAPROJECTS, G-002, PLOT NO.447, HIGHLAND PARK, OPP. MORAJ, TAKKA, PANVEL, RAIGAD 410206. PAN : AALFR2979L. . / APPELLANT. V/S THE DY.C OMMISSIONER OF INCOME TAX , PANVEL CIRCLE, PANVEL. . / RESPONDENT ASSESSEE BY : SHRI HARI KRISHAN. REVENUE BY : SHRI S.P. WALIMBE. / ORDER PER SHRI PARTHA SARATHI CHAUDHURY, THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 2, THANE DT.3 1.03.2016 FOR A.Y. 2012-13 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD : 1. THE LEARNED CIT-APPEAL ERRED IN LAW AND ON FACT S BY NOT ADJUDICATING THE FIRST GROUNDS OF APPEAL THAT THE ORDER PASSED BY A. O. IS IN VIOLATION OF PRINCIPAL OF NATURAL JUSTICE STATING GROUND WAS NOT PRESSED WITHOUT CONSIDERING THE DETAILED SUBMISSION ON HIS RECORD. / DATE OF HEARING : 1 8 .09. 2020 / DATE OF PRONOUNCEMENT : 22 .0 9 .2020 2 2. THE LEARNED CIT APPEAL ERRED IN LAW AND ON FACTS BY CONFIRMING A.OS DISALLOWANCE 1 ADDITION OF RS. 6,30,000/- FOR DISALLOWANCE OF EXPENSES PAID TO MRS. FARZANA KHAN TOWARDS COMMISSION CHARGES STATIN G GROUND WAS NOT PRESSED IN SPITE OF THE DETAILED SUBMISSION WITH CO NFIRMATION, CASE LAWS ETC ON HIS RECORD 3. THE LEARNED CIT APPEAL ERRED IN LAW AND ON FACT S BY CONFIRMING A.O.S DISALLOWANCE / ADDITION OF RS. 1,00,000/- FOR DISALLOWANCE OF EXPENSES PAID TO MR. NETAJI SURYA LEVELING STATING GROUND WAS NOT PRESSED IN SPITE OF THE DETAILED SUBMISSION WITH BILL ETC ON HIS RECORD .. 4. THE LEARNED CIT APPEAL ERRED IN LAW AND ON FACT S IN CONFIRMING ADDITION DISALLOWANCE / ADDITION OF RS.27,01 ,649/ OUT OF RS.42,42,182/- FOR DISALLOWANCE OF EXPENSES MADE BY A.O, PAID TO VARIO US PARTIES TOWARDS COMPOUND WALL, LAND DEVELOPMENT EXPENSES AND EVACUA TION PAYMENT MADE USER OF LAND, IN SPITE OF ALL CREDIBLE DETAILS ON H IS RECORD AND ALSO WITHOUT REJECTION OF SAME AND ALSO BY JUMBLING OF FIGURES I N HIS ORDER BEYOND UNDERSTANDING. 5) THE LEARNED CIT-APPEAL HAS ERRED IN LAW AND ON F ACTS BY NOT CONSIDERING THAT EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, AND ALSO DECISION OF JURISDICTION IT AT A ND SUPREME COURT, WHILE SUSTAINING DISALLOWANCE FOR COMMISSION EXPENSES, LE VELING CHARGES AND COMPOUND WALL EXPENSES ETC. 6) THE LEARNED CIT - APPEAL ERRED IN LAW BY PASSING ORDER WITHOUT GIVING REASONING / FINDING IN HIS ORDER, FOR NOT CONSIDERI NG VARIOUS CREDIBLE DOCUMENT FILED BY ASSESSEE AND ALSO NOT CONSIDERING SUPREME COURT AND OTHER JUDGMENT QUOTED DURING HEARING PROCEEDING. 2. AT THE VERY OUTSET, THE LEARNED AUTHORISED REPRESE NTATIVE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.1. THEREFORE, RECORD ING THE SUBMISSION OF LEARNED AUTHORISED REPRESENTATIVE, GROUND NO.1 IS DISMIS SED AS NOT PRESSED. 3. GROUND NO.2 PERTAINS TO DISALLOWANCE WITH REGARD TO TH E COMMISSION PAID TO ONE MRS. FARZANA KHAN. THE FACTS ON THIS ISSUE ARE THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT MR S. FARZANA KHAN TO WHOM COMMISSION OF RS.6,30,000/- CLAIMED TO HAVE BEEN PA ID AGAINST SALE OF PLOT OF LAND, FOUND TO BE A RELATIVE / WIFE OF MR. IKB AL KHAN, ONE OF THE PARTNERS OF THE ASSESSEE FIRM. IN VIEW OF THESE FACT S, LEARNED AUTHORISED REPRESENTATIVE WAS REQUESTED BY THE LEARNE D ASSESSING OFFICER 3 TO FURNISH NECESSARY CREDIBLE DOCUMENTS INCLUDING NATURE O F SERVICES RENDERED TO MATERIALIZE THE ABOVE DEAL. BASICALLY, THE LEA RNED ASSESSING OFFICER WANTED THE LEARNED AUTHORISED REPRESENTATIVE TO FILE EVIDENCES IN ORDER TO JUSTIFY SUCH PAYMENT OF COMMISSION AND FOR WHAT WORK SUCH COMMISSION WAS PAID AND WHETHER THAT WAS GENUINE OR NO T. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED WRITTEN SUBMISSIONS BEFORE THE LEARNED ASSESSING OFFICER WHICH IS ON RECORD. THE THRUST IN THE ARGUMENT OF THE LEARNED AUTHORISED REPRESENTATIVE WAS THAT THE S AID AMOUNT WAS PAID BY ACCOUNT PAYEE CHEQUE, TDS WAS DEDUCTED AND MR S. FARZANA KHAN HAS SHOWN THE SAME IN HER INCOME TAX RETURN. THE LEARN ED ASSESSING OFFICER DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE IN VIEW OF THE DETAILED REASONING GIVEN AT PAGES 3 AND 4 OF THE ASSESSMENT ORD ER AND DISALLOWED THE CLAIM OF RS.6,30,000/- AND ADDED TO THE INCOME OF THE ASSESSEE FIRM. 4. THAT AT THE TIME OF THE APPELLATE PROCEEDINGS, THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) ASKED THE LEARNED AU THORISED REPRESENTATIVE TO PRODUCE MRS. FARZANA KHAN ALONG WITH CREDIBLE DOCUMENTS, IF ANY, LIKE COPY OF IT RETURNS ETC., TO ASCERTAIN THE GENUINENESS OF THE PAYMENT OF CASH OF RS.6,30,000/-. THE LEARNED AUT HORISED REPRESENTATIVE HAD SHOWN HIS INABILITY TO PRODUCE MRS. F ARZANA KHAN ALONG WITH THE SUPPORTING EVIDENCES AS CALLED FOR. IT WAS FURTHER NOTICED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT INSTE AD OF DEBITING THE COMMISSION IN PROFIT AND LOSS ACCOUNT, THE ASSESSEE R ESORTED TO DIRECTLY REDUCE THE VALUE OF THE SALE CONSIDERATION BY TH E SAID AMOUNT AND DID NOT PASS THE COMMISSION EXPENDITURE THROUGH THE PR OFIT AND LOSS ACCOUNT. IN AUDIT REPORT ALSO, THE SAME HAS NOT BEEN R EPORTED BY THE AUDITOR IN THE COLUMN WHERE THE PAYMENTS MADE TO THE R ELATIVES WERE 4 REPORTED. IT WAS FURTHER NOTED THAT ASSESSEE HAD S HOWN SALES OF SOME OTHER PLOTS OF THE LAND TO THE SAME PARTY I.E., M/S. MAHA LAXMI BUILDERS, WITHOUT PAYING ANY COMMISSION TO ANY OTHER PARTY, INCLUDING MRS. FARZANA KHAN. THAT FURTHER AS APPARENT AT PARA 6.5 OF THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS)S ORDER VIDE ORDER SHEET NOTE D ATED 30.03.2016, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS INFORMED THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THAT THE ASSE SSEE IS NOT INTERESTED IN PURSUING THIS GROUND OF APPEAL AND ACCORDING LY, THE DISALLOWANCE OF RS.6,30,000/- MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED PAYMENT OF COMMISSION WAS UPHELD. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNED AUTHORISE D REPRESENTATIVE ONLY REITERATED THE SUBMISSIONS MADE BE FORE THE SUB- ORDINATE AUTHORITIES WITHOUT FILING ANY CREDIBLE DOCUMENTS / EVIDENCES TO JUSTIFY THE NEED FOR PAYMENT OF SUCH COMMISSION TO THE SAID MRS. FARZANA KHAN. IN THIS CASE, ABSOLUTELY, NO MATERIAL ON RECORD HAS BEEN BROUGHT BY THE ASSESSEE TO SUGGEST AS TO HOW THE COMMISSION AGEN T I.E., THE SAID MRS. FARZANA KHAN HAS WORKED IN ORDER TO FACILITATE THE SALE OF THE PLOT OF THE LAND. 6. WE ALSO TAKE GUIDANCE FROM THE DECISIONS OF THE HIGHER FORUM AS ON RECORD IN THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) S ORDER I.E., (1) CIT VS. PRECISION FINANCE PVT. LTD., REPORTED AT 208 ITR 465 (CAL), (2) M/S. KANCHWALA GEMS VS. JCIT REPORTED AT 288 ITR 10 (SC), (3) LACHMINARAYAN MADAN LAL VS. CIT REPORTED AT (1972) 86 ITR 439 (SC). I N ALL THESE CASES, MERELY PAYMENT THROUGH BANKING CHANNELS IS NOT SUFFICIENT TO ESTABLISH THE GENUINENESS OF THE PARTICULAR TRANSACTION. THERE HAS T O BE SOME SPECIFIC 5 MATERIAL ON RECORD, 3 RD PARTY CONFIRMATION AND MOST IMPORTANT THAT THE FACTS SHOULD CONVEY THE BASIC NEED FOR WHY THE COMMISSION WAS PAID. IN THE PRESENT CASE OF THE ASSESSEE, THESE ASPECTS ARE NOT AT ALL PROVED. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE UPHOLD THE FINDINGS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). GROUND NO.2 OF THE ASSESSEE IS DISMISSED. 7. THE GROUND NOS. 3 TO 6 PERTAINS TO DISALLOWANCE ON AC COUNT OF VARIOUS EXPENSES REGARDING THE LEVELING OF LAND, EXPENSES T OWARDS COMPOUND WALL, LAND DEVELOPMENT EXPENSES AND EVACUATION P AYMENT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS CONFIRMED T HE DISALLOWANCE OF RS.1 LAKH PAID TO MR. NETAJI SURYA FOR LAND LEVELING WORK WHICH IS AS FOLLOWS : 7 . 3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , FINDINGS OF THE AO IN THE ASSESSM E NT ORDER, SUBMISSION OF THE LD AR AND MATERIAL PLAC ED ON RECORD . IN VIEW OF THE ABOVE FACTS , DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD AR WAS REQUESTED TO PRODUCE M R NETA J I SURYA, ALONG WITH CREDIBLE DOCUMENTS , COPY OF AGREEMENT, IF ANY, BANK STATEMENT , COPY OF IT RETURNS, ETC ., TO ASCERTAIN THE GENU I NENESS OF PAYMENT OF RS. 1,00,000/- AGAINST LEVELING OF LAND. THE LD AR, HOWEVER , SHOWED HIS INABILITY TO PRODUCE THE SAID PERSON, ALONG WITH CREDIBLE DOCUMENTS, FOR THE REASONS BEST KNOWN TO HIM . IT IS FURTHER NOTICED THAT I NSTEAD O F DEBITING THE LEVELING EXPENDITURE IN THE P&L ACCOUNT, THE APPELLANT RESORTED TO REDUCE T HE VALUE OF SALE CONSIDERATION BY THE SAID AMOUNT AND DID NOT PASS T HE SAME T HROUGH P& L ACCOUNT. IT IS FURTHER NOTICED THAT THE LAND WHICH WAS PURCHASED IN 2009-10 AND SOLD IN 2011- 12, THE APPELLANT HAS NEVER INCUR RED ANY SUCH EXPENDITURE TILL 31.03.2011. IT I S SURPRISE TO NOTE THAT THE APPELLANT RESORTED TO I NCUR EXPENDITURE IN THE MONTH OF APRIL , JUST BEFORE SALE OF LAND ON 28.04.2011, I.E . BETWEEN 01.04 . 2011 TO 28 . 04.2011. IN VI E W OF THESE FACTS, AND IN TH E ABSENCE OF VALID EXPLANATION ALONG WITH CREDIBLE DO CUMENTS, VIDE ORDER S HE E T N O TI NG DA TE D 30.03 . 2016, THE LD AR INFORMED THAT THE APPELL A NT I S NOT INTER E STING IN PURSU IN G T HIS GRO U ND OF APPEAL. ACCORDINGLY, DISALLOWANCE OF RS 1,00,000/-, MADE BY THE AO, ON ACCOUNT OF UNEXPLAIN ED EXPENDITURE ON LEVELING OF LAND, IS HEREBY SUSTAINED AND THIS GROU ND OF APPEAL IS DISMISSED. 8. REGARDING THE OTHER DISALLOWANCE OF RS.42,42,182/- ON A CCOUNT OF UNEXPLAINED EXPENDITURE INCURRED AGAINST SALES OF PLOTS OF LA ND, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HELD AS FOLLOWS : 6 8.5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, FINDINGS OF THE AO IN THE ASSESSMENT ORDER, SUBMISSION OF THE LD AR AND M ATERIAL PLACED ON RECORD. IN VIEW OF THE ABOVE FACTS, DURING THE COUR SE OF APPELLATE PROCEEDINGS, THE LD AR WAS REQUESTED TO PRODUCE THE . PARTIES TO WHOM THE PAYMENT OF RS.42,42,182/-, FOR PURCHASE OF MATERIAL, CONSTRUCTION OF BOUNDARY WALLS, LEVELING OF LAND, V ACATING OF ENCROACHMENTS ETC. WAS MADE, ALONG WITH CREDIBLE DOCUMENTS, IN SU PPORT OF ABOVE CLAIM. IN COMPLIANCE, THE LD AR HAS SUBMITTED THE COPIES O F BILLS IN RESPECT OF PURCHASE OF CEMENT, STEEL RODS, MURUM, LABOUR CHARG ES, TRANSPORT ETC., AND ALSO FILED COPY OF BANK STATEMENT, REFLECTING THE C LEARING OF CHEQUES IN RESPECT OF ABOVE EXPENDITURES. 8.6. THE LD AR, HOWEVER, FAILED TO PRODUCE EITHER O F THE ABOVE PARTIES, WHICH COULD CERTIFY THE ABOVE CONTENTION OF THE APP ELLANT. IN-SPITE OF GIVING SEVERAL OPPORTUNITIES OF BEING HEARD, THE LD AR COU LD NOT PRODUCE THE TENANTS NAMELY MARUTI NARAYAN PATIL (PAID AN AMOUNT OF RS.13,00,000/-) AND SHRI SUDHAKAR PATIL (RS 1,00,000/-), TO WHOM TH E AMOUNT OF RS. 14,00,000/- WAS PAID FOR REMOVING THE ENCROACHMENT AND ALSO FAILED TO SUBSTANTIATE THE BASIS OF SUCH PAYMENTS. THE LD AR, ALSO FAILED TO PRODUCE THE PROOF OF RETURN OF INCOME, REFLECTING THE ABOVE PAYMENTS, AS THEIR INCOME. IT IS PERTINENT TO MENTION HERE THAT THE A PPELLANT ISSUED AS CHEQUE OF RS.17,00,000/- DATED 27.09.2011 IN FAVOUR OF MR. MARUTI NARAYAN PATIL, OUT OF WHICH IT HAD CLAIMED THAT RS 14,00,000/- HA D BEEN PAID FOR SALE OF ABOVE PLOTS OF LAND. THAT THE APPELLANT HAD PAID TH E ABOVE AMOUNT, MUCH AFTER THE SALE DATE OF 28.04.2011. ON THE OTHER HAN D, THE SALE DEED STATES THAT THE PLOTS WERE SOLD WITH CLEAR TITLE. THE LD A R, IN COMPLIANCE, COULD NOT EXPLAIN THIS CONTRADICTION, WITH CREDIBLE DOCUMENTS. IN VIEW OF THESE FACTS, VIDE ORDER SHEET NOTING DATED 30.03.20 16, THE LD AR INFORMED THAT THE APPELLANT IS NOT INTERESTING IN PRESSING T HE ABOVE DISALLOWANCE. ACCORDINGLY, THE DISALLOWANCE OF EXPENDITURE OF RS. 14,00,000/-, MADE BY THE AO, ON ACCOUNT OF UNEXPLAINED PAYMENT TO TENANT S, IS SUSTAINABLE. 8.7 AS REGARDS THE BALANCE EXPENDITURE OF RS 28,42, 182/-( RS. 42,42,182 LESS 14,00,000/- ) IS CONCERNED, IT IS NOTICED THA T THE LD AR OF THE APPELLANT HAS PRODUCED RELEVANT BILLS, ALONG WITH B ANK STATEMENTS, REFLECTING THE CLEARING OF CHEQUES, PARTY-WISE, DAT E-WISE, FOR PURCHASE OF RAW- MATERIAL, TRANSPORT, LABOUR CHARGES ETC. IT IS FURTHER NOTICED THAT MOST OF THE PAYMENTS WERE CLEARED AFTER THE DATE I.E., 2 8.04.2011, WHEN THE PLOTS OF LAND WERE SOLD TO M/S. MAHALAXMI BUILDERS. IN ORDER TO ASCERTAIN THE GENUINENESS OF THE ABOVE CLAIM, THE COPIES OF LEDGER ACCOUNTS, BUILDING ACCOUNTS, ALONG WITH P&L ACCOUNT WERE CALL ED FOR AND EXAMINED. ON VERIFICATION OF LEDGER ACCOUNT OF PARTIES, TO WH OM THE ABOVE PAYMENTS WERE MADE, IT IS SEEN THAT THE PAYMENT DETAILS ARE DULY REFLECTED ALONG WITH RECEIPT OF MATERIAL ON VARIOUS DATES. IN VIEW OF THESE FACTS, THE CLAIM OF THE APPELLANT CANNOT BE DENIED IN TOTO. ACCORDINGLY , THE P&L ACCOUNT OF THE APPELLANT WAS EXAMINED AND FOUND THE FOLLOWING ENTR IES: 7 PARTICULARS AMOUNT PARTICULARS AMOUNT TO COST INCURRED ON PROJECT 56425524.24 BY WIP OF PROJECT AT YR END 57966057 . 24 TO COST OF LAND 21723188 . 00 BY SALE OF LAND 30875000 . 00 T O PROFIT TRSF TO PARTNER A/C AS UNDER ARVIND L . PATIL 2138469 . 00 AARTI DINESH NAYAK 1099234.50 IQBAL KHAN 3207703 . 50 F ARHAAN KHAN 2138469 . 00 NOMAAN KHAN 2138469.00 10692345 . 00 . 88841057.24 88841057.24 8.8 FROM THE ABOVE DETAILS, IT IS SEEN THAT THE APP ELLANT, IN ADDITION TO SALE OF PLOTS OF LAND, IT HAD ALSO SHOWN WORK IN PR OGRESS AMOUNTING TO RS 5,79,66,0571- AND COST INCURRED AGAINST THE SAID PR OJECT HAS BEEN SHOWN AT RS 5,64,25,524/-, WHICH IS LESS BY RS 15,40,533/ - (5,79,66,057/- LESS 5,64,25,524/-), IN THE P & L ALE. AS PER ACCOU NTING PRINCIPLE, THE COST INCURRED IN THE CONSTRUCTION OF PROJECT, SHOUL D HAVE BEEN SHOWN AS WIP. SINCE THE COST OF PROJECT HAS BEEN SHOWN LESS BY RS.15,40,533/-, CLEARLY INDICATE THAT THE APPELLANT HAS DIVERTED IT S ABOVE EXPENDITURE, FROM THE PROJECT COST TO THE COST AGAINST SALE OF P LOTS OF LAND, THEREFORE, TRIED TO REDUCE THE PROFIT AGAINST SALE OF LAND. 8.9. IN ADDITION TO ABOVE, IT IS FURTHER NOTICED TH AT THE APPELLANT HAS TAKEN THE VALUE OF SALE CONSIDERATION OF PLOTS AT RS 3,08 ,75,000/-- AS AGAINST ACTUAL SALE CONSIDERATION OF RS 3,16,05,000/-, WHIC H IS LESS BY 7,30,000/- (RS 3,16,05,000/- (-) RS 3,08,75,000/-) , THAT IS THE AMOUNT WHICH WAS CLAIMED TO HAD BEEN PAID TO MRS FARZANA K HAN (RS 6,30,000/- FOR (COMMISSION) AND MR. NETAJI SURYA 9 RS.1,00,000/- FOR LEVELLING). THE PAYMENTS TO THESE PARTIES HAVE ALR EADY BEEN HELD AS UNEXPLAINED AND DISALLOWED, AS ABOVE. 8.10. LIKEWISE, THE APPELLANT HAD CLAIMED THE COST OF LAND AT RS 2,17,23,1 F'. (1,74,81,006/- + RS 42,42,182/-), IN THE P&L ACCOUNT, AS AGAINST THE ACTUAL COST OF RS 1,74,81,006/-. SINCE THE APPELLANT HAD PURCHASED THE ABOVE PLOTS OF LAND IN THE MONTH OF J ULY AND SEPTEMBER, 2009, AND SOLD THE SAME ON 28.04.2011, JUST AFTER 1 YEAR WITHOUT INCURRING ANY EXPENDITURE, AS ABOVE, THEREFORE, THE CONTENTION REGARDING CLAIM OF EXPENDITURE OF RS. 42,42,182/-, AGAINST SA LE OF PLOTS OF LAND, IS NOT TENABLE. 8.11. FROM THE ABOVE P&L ACCOUNT, IT IS FURTHER SEE N THAT THE APPELLANT HAD ALREADY OFFERED THE PROFIT OF RS 15,40,533/- (5 ,79,66,057/- LESS 5,64,25,524/-) ,I.E. DIFFERENCE BETWEEN WIP AND COS T OF PROJECT, FOR TAX, THEREFORE, THE DISALLOWANCE TO THAT EXTENT IS LIABL E TO BE DELETED. AS REGARDS THE BALANCE EXPENDITURE OF RS 13,01,649/ - [42,42,182/- (-) 29,40,533/- (15,40,533/- (+) 14,00,000/-)], IS CONC ERNED, THE APPELLANT MIGHT HAVE INCURRED THE SAME FOR HIS RUNNING PROJEC T, AS ABOVE, THE APPELLANT, HOWEVER, COULD NOT SUBSTANTIATE THE BALA NCE EXPENDITURE OF RS 13,01,649/- ( RS 28,42,182/- (-) RS 15,40,533/-), T HEREFORE, THE SAME IS 8 LIABLE TO BE UPHELD. TO SUMMARIZE THE ABOVE FINDING , IT IS HELD THAT, OUT OF TOTAL DISALLOWANCE OF RS 42,42,182/-, AN AMOUNT OF RS 15,40,533/- IS DELETED AND BALANCE AMOUNT OF RS 14,00,000/- I.E. PAYMENTS TO TENANTS, AS DISCUSSED ABOVE, AND UNSUBSTANTIATED EXPENDITURE OF RS.13,01,649/-, IS HEREBY, SUSTAINED. THIS GROUND OF APPEAL IS PART LY ALLOWED. 9. WE ARE IN CONFORMITY WITH THE FINDINGS OF LEARNED COMMISSION ER OF INCOME TAX (APPEALS) THAT SINCE THE ASSESSEE HAS ALREADY OFFERED THE PROFIT OF RS.15,40,533/- I.E., DIFFERENCE BETWEEN WORK IN PROGRESS (W IP) AND COST OF PROJECT FOR TAX, THEREFORE, THE DISALLOWANCE TO THAT EX TENT WAS CORRECTLY DELETED. WE ALSO FIND THAT THE LEARNED AUTHORISED REPRES ENTATIVE OF THE ASSESSEE COULD NOT PRODUCE THE TENANTS NAMELY, MARUT I NARAYAN PATIL TO WHOM AN AMOUNT OF RS.13 LAKH WAS PAID AND SHRI SUDHAK AR PATIL TO WHOM RS.1 LAKH WAS PAID, TOTALING TO RS.14 LAKHS, FOR REMOVING THE ENCROACHMENT. THE ASSESSEE FAILED TO SUBSTANTIATE THE B ASIS OF SUCH PAYMENTS. THE ASSESSEE ALSO FAILED TO PROVE THROUGH THE RETURN OF INCOME REFLECTING THE ABOVE PAYMENTS. THEREFORE, THE DISALLOWANC E OF RS.14 LAKHS I.E., PAYMENT TO TENANTS IS HEREBY UPHELD. 10. WITH REGARD TO THE OTHER UN-SUBSTANTIATED EXPENSES OF RS.13,01,649/-, THE LEARNED AUTHORISED REPRESENTATIVE PR AYED THAT THIS AMOUNT AS THE WIP. SINCE THE LEARNED COMMISSIONER OF INC OME TAX (APPEALS) IN HIS ORDER AT PARA 8.11 MENTIONS THAT THIS AMOU NT OF RS.13,01,649/-, THE ASSESSEE MIGHT HAVE INCURRED THE SAM E FOR RUNNING HIS PROJECT. HOWEVER, NOTHING WAS PLACED ON RECORD BY T HE LEARNED AUTHORISED REPRESENTATIVE BEFORE US, AS REGARDS ANY RUN NING PROJECT OF THE ASSESSEE DURING THE RELEVANT YEAR. HOWEVER, CONSIDERING THE PRAYER OF THE ASSESSEE AND THE FACT THAT LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IN HIS ORDER MENTIONS OF WIP, THIS ISSUE IS RESTORED TO TH E FILE OF LEARNED ASSESSING OFFICER FOR FACTUAL VERIFICATION WHETHER THE SAID AMO UNT COULD 9 QUALIFY AS WIP. THE LEARNED ASSESSING OFFICER SHALL DECIDE T HIS ISSUE OF BALANCE EXPENDITURE OF RS.13,01,649/- WHETHER WIP OR NOT WHILE COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. THEREFORE THESE GROUNDS 3 TO 6 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22 ND DAY OF SEPTEMBER, 2020. SD/- SD/- - ( P.M. JAGTAP ) ( PARTHA SARATHI CHAUDHURY ) VICE PRESIDENT JUDICIAL MEMBER PUNE; DATED : 22 ND SEPTEMBER, 2020. YAMINI , -./0 10. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. CIT(APPEALS), THANE. PR. CIT, THANE 2. '#$ %%&',) &', / DR, ITAT, A PUNE; $*+,/ GUARD FILE. / BY ORDER , // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.