DCIT, Mangalore V. M/s Mohtisham Complexes Pvt. Ltd., Mangalore

ITA 1409/BANG/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80730 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRISCILLA SINGSIT
• Assessee Lawyers: N O N E
• Keywords: Additional evidence
• Section: 40A(3); 132

Judgement Text

ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 1 OF 11 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1392/BANG/2012 (ASSESSMENT YEAR: 2009-10) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE MANGALURU VS. M/S MOHITSHAM ESTATES PRIVATE LTD 7 TH FLOOR, EMPIRE MALL, MG ROAD, MANGALURU 575003 PAN: AAFCM 1684 C (APPELLANT) (RESPONDENT) ITA NO.1462/BANG/2013 (ASSESSMENT YEAR: 2009-10) M/S. MOHITSHAM COMPLEXES PRIVATE LIMITED, 7 TH FLOOR, EMPIRE MG ROAD MANGALORE PAN: AABCM 3814 A VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE MANGALORE (APPELLANT) (RESPONDENT) ITA NO.1409/BANG/2013 (ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE MANGALURU VS. M/S. MOHITSHAM COMPLEXES PRIVATE LIMITED, 7 TH FLOOR, EMPIRE MG ROAD MANGALORE PAN: AABCM 3814 A (APPELLANT) (RESPONDENT) DEPARTMENT BY: MS. PRISCILLA SINGSIT, (DR) ASSESSEE BY: N O N E DATE OF HEARING: 30/10//2014 DATE OF PRONOUNCEMENT: 31/10/2014 ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 2 OF 11 O R D E R PER RAJPAL YADAV, J.M. ITA NO.1392/BANG/2012 HAS BEEN DIRECTED AT THE INS TANCE OF THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT (A), DATED 17/08/2012 PASSED IN ASSESSMENT YEAR 2009-10. AGAIN ST THE ORDER OF THE LEARNED CIT (A) DATED 16.07.2013, PASS ED ON THE APPEAL OF M/S MOHITSHAM COMPLEXES (P) LTD, IN ASSES SMENT YEAR 2009-10, THE ASSESSEE AND REVENUE ARE IN CROSS APPE ALS. 2. ITA NO.1392/BANG/2012 IS ON BOARD SINCE 10.06.20 13. IT HAS BEEN LISTED ALMOST ON 15 OCCASSIONS, OUT OF THA T ON 4 OCCASSIONS, THE BENCH DID NOT FUNCTION. THE LEARNED COUNSEL FOR THE ASSESSEE HAS FILED AN APPLICATION FOR ADJOURNME NT ON THE GROUND THAT HE HAS A BACK PROBLEM AND UNABLE TO UND ERTAKE TRAVEL TO BANGALORE. ON PERUSAL OF THE RECORD, WE F IND THAT RIGHT FROM 10 TH JUNE, 2013, THE LEARNED COUNSEL FOR THE ASSESSEE H AS BEEN ASKING ADJOURNMENTS ON MOST OF THE DATES. FROM THE LAST 4 OCCASSIONS, REQUEST FOR ADJOURNMENT HAS BEEN MADE F OR ONE OR THE OTHER REASONS. ON 2.8.2014, HE SENT A LETTER PO INTING OUT THAT THESE APPEALS ARE POSTED FOR HEARING ON 5.8.2014, S INCE HE IS HAVING AYURVEDIC TREATMENT, HE IS NOT IN A POSITION TO TRAVEL AND REPRESENT THE APPEAL. THE TRIBUNAL HAS ADJOURNED TH E HEARING FOR 10.09.2014. THE LEARNED COUNSEL FOR THE ASSESSEE AG AIN SENT A LETTER POINTING OUT SOME SOCIAL FUNCTIONS IN THE FA MILY. HEARING WAS ADJOURNED TO 30.10.2014. TODAY HE MADE A REQUES T FOR ADJOURNMENT ON THE GROUND THAT HE HAS A BACK PROBLE M. NO MEDICAL PRESCRIPTION IS BEING ATTACHED WITH THE APP LICATION. NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE OR F ROM THE OFFICE ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 3 OF 11 OF THE LEARNED C.A. WE FIND THAT THE LEARNED CA TOO K IT GRANTED THAT HE WILL SENT ADJOURNMENT AND HEARING WOULD AUT OMATICALLY BE ADJOURNED. CONSIDERING THIS DIALATORY TACTITICS, WE DO NOT FIND ANY GROUND TO ADJOURN THE HEARING AND PRCEED TO DEC IDE THE APPEAL EX-PART, QUA THE ASSESSEE. 3. ALL THESE APPEALS INVOLVE COMMON ISSUES, THEREFO RE, WE HEARD THEM TOGETHER AND DEEMED IT APPROPRIATE TO DI SPOSE OF THEM BY THIS COMMON ORDER. 4. IN ITA NO.1392/BANG/2012, REVENUE HAS TAKEN TWO SUBSTANTIAL GROUNDS. IT HAS PLEADED THAT THE LEARNE D CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,09,09,277/- WHICH WAS ADDED BY THE ASSESSING OFFICER, ON THE GROUND THAT THE ASSESSEE HAS MADE PAYMENT OF THE EXPENSES IN CASH EXCEEDING THE LIMIT PROVIDED U/S 40A(3). THEREFORE, THESE EXPENSES ARE TO BE DISALLOWED. THE REVENUE FURTHER PLEADED THAT THE LE ARNED CIT (A) HAS DELETED THIS ADDITION BY ENTERTAINING ADDITIONA L EVIDENCE IN VIOLATION TO RULE 46A(3). THE GROUND NO.2 TAKEN BY THE REVENUE READ AS UNDER: GROUND NO.2 THE LEARNED CIT (A) ERRED IN FACT AND IN LAW IN ADJUDICATING THE ISSUE BY ADMITTING THE ADDITIONAL EVIDENCE IN FORM OF DEVELOPMENT AND MEMORANDUM OF UNDERSTANDING WITHOUT ALLOWING THE OPPORTUNITY TO THE ASSESSING OFFICER AS REQUIRED UNDER RULE 46A(3) AND ADMITING SUCH EVIDENCE WITHOUT REGARDING ANY REASON AS REQUIRED AS PER RULE 46A(2) OF THE INCOME TAX RULES. 5. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CARRIED OUT IN THE GROUP OF M/S MOHIT SHAM ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 4 OF 11 COMPLEXES (P) LTD U/S 132 OF THE INCOME TAX ACT ON 13.02.2009. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR ASS ESSMENT YEAR 2009-10 ON 30.09.2009 DECLARING TOTAL LOSS OF RS.16 ,57,302/-. THE CASE OF THE ASSESSEE M/S MOHITSHAM ESTATES (P) LTD WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND A NOTICE U/S 1 43(2) WAS ISSUED ON 17.05.2010. THE LEARNED ASSESSING OFFICER ON AN ANALYSIS OF PAGE NO.85 OF THE SEIZED DOCUMENT NO.A/ MCPL/88 DATED 13.02.2009 OBSERVED THAT THIS PAGE CONTAINS T HE DETAILS OF EXPENSES INCURRED IN CASH BY THE ASSESSEE AS ON 31. 01.2009. ASSESSING OFFICER THEREAFTER CONSIDERED PAGES NO.80 & 84 OF THIS SEIZED FILE AND CONFRONTED THE ASSESSEE THAT IT HAD MADE PAYMENT OF RS.1,09,09,277/- IN CASH, IN VIOLATION OF PROVIS IONS OF SECTION 40A(3). ACCORDING TO THE ASSESSING OFFICER, SECTION 40A(3) CONTEMPLATES THAT WHERE THE ASSESSEE INCURS ANY EXP ENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENT MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE, DRAWN ON A BANK, OR ACCOUNT PAY BANK DRAFT EXCEEDS RS.20,000/-, NO DEDUCTION SHALL BE ALLOWED IN RESPE CT OF SUCH EXPENDITURE. THEREFORE, THESE EXPENSES ARE TO BE DI SALLOWED TO THE ASSESSEE. IN RESPONSE TO THE QUERY OF ASSESSIN G OFFICER, ASSESSEE FILED A WRITTEN SUBMISSION AND CONTENDED T HAT IT HAS NOT INCURRED ANY EXPENDITURE WHICH WAS CLAIMED AS A DEDUCTION. THEREFORE, SECTION 40A(3) IS NOT APPLICABLE. 6. ASSESSING OFFICER HAS OBSERVED THAT IT MAY BE TR UE THAT THESE EXPENSES ARE IN THE NATURE OF CAPITAL EXPENSE S TO ACQUIRE LAND FOR ITS CELEBRATION PROJECT. HOWEVER, THESE EXPENSES ARE REQUIRED TO BE CLAIMED AS A REVENUE EXPENSES IN ITS P&L A/C WHEN THE LAND/PROPERTY WILL BE SOLD TO THE BUYER. A SSESSING ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 5 OF 11 OFFICER PUT RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ATTAR SINGH GURMUKH SINGH. VS ITO(SC ), REPORTED IN 191 ITR 667 AND CONFRONTED THE ASSESSEE THAT, ON ACQUISITION OF STOCK IN TRADE, IF ANY EXPENDITURE IS INCURRED I N CASH EXCEEDING THE LIMIT PROVIDED U/S 40A(3), THEN SUCH EXPENDITUR E WOULD BE DISALLOWED TO THE ASSESSEE. THE ASSESSEE CONTENDED THAT IT IS NOT A STOCK-IN-TRADE, BUT ASSESSING OFFICER HAS REJECTE D THE CONTENTION AND OBSERVED THAT THE ASSETS WHICH WAS A CQUIRED BY MOHITSHAM COMPLEXES (P) LTD THROUGH THE MONEY PROVI DED BY THE ASSESSEE IS NOTHING BUT CLOSING STOCK/WORK IN P ROGRESS FOR THE PURPOSE OF SALE IN FUTURE AFTER MAKING IMPROVEM ENT/ DEVELOPING IT INTO RESIDENTIAL/COMMERCIAL UNITS. TH EREFORE, THE CASH PAYMENT CLEARLY ATTRACTS THE PROVISIONS OF SEC TION 40A(3), HE MADE AN ADDITION OF RS.1,09,09,277/-. 7. ON APPEAL, THE LEARNED CIT (A) HAS DELETED THE A DDITION. HER OBSERVATION IN THE CONCLUDING PARAGRAPH READ AS UND ER: IT IS RELEVANT TO NOTE THAT THE ASSESSEE HAS NOT CLAIMED THESE EXPENSES AND IT HAS NOT BEEN CLAIMED BY M/S MOHITSHAM COMPLEXES PVT LTD AS THEY HAVE CAPITALIZED THESE EXPENSES AS THEY ARE CAPITAL IN NATURE AND THEY HAVE BEEN CAPITALIZED IN THEIR BOOKS OF ACCOUNTS. IT IS VERY SIMPLE PROPOSITION THAT THESE EXPENSES HAVE NOT BEEN MADE BY THE ASSESSEE BUT HAVE BEEN MADE BY MOHITSHAM COMPLEXES WHO HAVE ALSO NOT CLAIMED IT AND HAVE CAPITALIZED IN THEIR BOOKS OF ACCOUNTS SO, THEY WOULD NOT FALL UNDER THE AMBIT OF SECTION 40A(3). IN THIS CONTEXT, THE AGREEMENT WAS ALSO PRODUCED BEFORE ME WHICH HAS ALSO MADE IT VERY CLEAR THAT IT IS THE M/S. MOHITSHAM COMPLEXES PVT LTD WHO WILL MAKE THE PAYMENTS. THE DEVELOPMENT AND MEMORANDUM OF UNDERSTANDING IS PRESENTED AND IS ANALYZED. ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 6 OF 11 THE DEVELOPMENT AGREEMENT HAS MADE IT VERY CLEAR THAT THE MOHITSHAM ESTATE PVT LTD HAS AGREED TO INVEST A PARTICULAR AMOUNT. IN CONSIDERATION FOR THEIR INVESTMENT BY M/S MOHITSHAM ESTATE PVT LTD, M/S. MOHITSHAM COMPLEXES PVT LTD (MCPL) SHALL TAKE UP THE ENTIRE PROJECT DEVELOP IT AND PROMOTE IT. THEY SHALL BE RESPONSIBLE FOR THE CONTRACTS, CONSTRUCTION AND SHALL BEAR THE INVESTMENT COST OF THE PROJECT AND THEY SHALL MAKE ALL MISCELLANEOUS EXPENSES OF THE PROJECT. THEREFORE, IT IS VERY CLEAR THAT M/S MOHITSHAM ESTATE IS A COMPANY WHICH HAS JUST MADE INVESTMENTS AND ALL THE EXPENSES REGARDING PROJECTS UNDERTAKEN IN REGARD TO THE MEMORANDUM OF UNDERSTANDING HAS BEEN DONE BY M/S MOHITSHAM COMPLEXES. THEREFORE, AS FAR AS M/S MOHITSHAM ESTATES ARE CONCERNED, THERE ARE NO INVESTMENTS, NO P&L A/C HAS BEEN DRAWN, NO EXPENDITURE HAVE BEEN CLAIMED AND THEREFORE, DISALLOWANCE OF EXPENSES U/S 40A(3) IN THE HANDS OF M/S MOHITSHAM ESTATE TO THE TUNE OF RS.1,09,09,277/- IS NOT CORRECT AND IS ACCORDINGLY DELETED. 8. THE LEARNED CIT (DR) CONTENDED THAT THIS MEMORAN DUM BETWEEN THE ASSESSEE AND M/S. MOHITSHAM COMPLEXES ( P) LTD WAS NOT PRODUCED BEFORE THE ASSESSING OFFICER. IT W AS PRODUCED BEFORE THE CIT (A). LEARNED CIT (A) FAILED TO PROVI DE OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER TO COMMENT ON THIS DOCUMENT. THEREFORE, THE CONDITION ENUMERATED IN SUB-RULE 3 O F 46A IS VIOLATED. SHE PRAYED THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND IT BE REMITTED TO THE FILE OF THE FIRST APPELLATE A UTHORITY FOR RE- ADJUDICATION. ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 7 OF 11 9. WE HAVE GONE THROUGH THE RECORD CAREFULLY. RULE 46A HAS A DIRECT BEARING ON THE CONTROVERSY. THEREFORE, IT IS A SALUTARY UPON US TO TAKE NOTE OF THIS RULE. IT READ AS UNDER: 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRO DUCE BEFORE THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)], ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENC E PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BE FORE THE [ASSESSING OFFICER], EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : (A) WHERE THE [ASSESSING OFFICER] HAS REFUSED T O ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFIC IENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALL ED UPON TO PRODUCE BY THE [ASSESSING OFFICER] ; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFI CIENT CAUSE FROM PRODUCING BEFORE THE [ASSESSING OFFICER] ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE [ASSESSING OFFICER] HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO AN Y GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE (1 ) UNLESS THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CAS E MAY BE, THE COMMISSIONER (APPEALS)] RECORDS IN WRITING THE REASONS FOR ITS ADMISSION. (3) THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS)] SHALL NOT TAKE INTO ACCOUNT ANY EVIDENCE PRODUCED UNDER SUB-RULE (1) U NLESS THE [ASSESSING OFFICER] HAS BEEN ALLOWED A REASONAB LE OPPORTUNITY (A) TO EXAMINE THE EVIDENCE OR DOCUMENT OR TO C ROSS- EXAMINE THE WITNESS PRODUCED BY THE APPELLANT, OR (B) TO PRODUCE ANY EVIDENCE OR DOCUMENT OR ANY WITNESS IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRO DUCED BY THE APPELLANT. (4) NOTHING CONTAINED IN THIS RULE SHALL AFFECT THE POWER OF THE [DEPUTY COMMISSIONER (APPEALS)] [OR, AS THE CAS E MAY BE, THE COMMISSIONER (APPEALS)] TO DIRECT THE PRODU CTION OF ANY DOCUMENT, OR THE EXAMINATION OF ANY WITNESS, TO ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 8 OF 11 ENABLE HIM TO DISPOSE OF THE APPEAL, OR FOR ANY OTH ER SUBSTANTIAL CAUSE INCLUDING THE ENHANCEMENT OF THE ASSESSMENT OR PENALTY (WHETHER ON HIS OWN MOTION OR ON THE REQUEST OF THE [ASSESSING OFFICER]) UNDER CLAUS E (A) OF SUB-SECTION (1) OF SECTION 251 OR THE IMPOSITION OF PENALTY UNDER SECTION 271.] 10. ON A BARE PERUSAL OF THIS RULE WOULD SUGGEST TH AT SUB RULE-1 PUTS AN EMBARGO UPON THE ASSESSEE TO SEEK PE RMISSION FOR PRODUCING ADDITIONAL EVIDENCE EITHER ORAL OR DO CUMENTARY. SUCH EVIDENCE CAN ONLY BE PERMITTED TO BE PRODUCED, IF CONDITIONS ENUMERATED IN SUB CLAUSE A TO D ARE AVAILABLE. THE LEARNED COMMISSIONER HAS TO RECORD IN WRITING AS TO WHY SHE HAD ADMITTED THE ADDITIONAL EVIDENCE. SUB RULE-3 CONTEM PLATES THAT IF ADDITIONAL EVIDENCE IS TAKEN ON RECORD, THEN IT CANNOT BE CONSIDERED ON MERIT, UNLESS AN OPPORTUNITY TO THE A SSESSING OFFICER IS BEING GIVEN TO COMMENT THE EVIDENCE OR D OCUMENTS OR TO CROSS EXAMINE THE WITNESS PRODUCED BY THE ASSESS EE. APART FROM THAT THE LEARNED ASSESSING OFFICER WOULD BE GI VEN AN OPPORTUNITY TO PRODUCE ANY EVIDENCE OR DOCUMENTS OR ANY EVIDENCE IN REBUTTAL OF THE ADDITIONAL EVIDENCE PRO DUCED BY THE ASSESSEE. SUB RULE-4 IS AN EXCEPTION TO ALL OTHER S UB RULES. THIS RULE AUTHORIZES THE CIT (A) TO DIRECT ANY PART FOR PRODUCTION OF ANY DOCUMENTS OR EXAMINATION OF ANY WITNESS TO ENAB LE HER TO DISPOSE OF THE APPEAL OR FOR ARRIVING AT A JUST CON CLUSION. 11. IN THE LIGHT OF THE ABOVE, IF WE EXAMINE THE FA CTS OF THE PRESENT CASE, THEN IT WOULD REVEAL THAT THE LEARNED CIT (A) HAS NOT CALLED FOR PRODUCTION OF MEMORANDUM OF UNDERSTA NDING. IT MUST HAVE BEEN FILED BY THE ASSESSEE. THE LEARNED C IT (A) FAILED ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 9 OF 11 TO GIVE A OPPORTUNITY OF HEARING TO THE ASSESSING O FFICER. SHE DID NOT CALL FOR ANY REMAND REPORT. THEREFORE, FOR THIS SIMPLE REASON, HER ORDER IS NOT SUSTAINABLE. WE SET ASIDE THE ORDE R OF THE CIT (A) AND REMIT THE ISSUE TO THE FILE OF THE LEARNED FIRS T APPELLATE AUTHORITY FOR RE-ADJUDICATION AFTER PROVIDING OPPOR TUNITY OF HEARING TO THE ASSESSING OFFICER AS WELL AS THE ASS ESSEE. OUR OBSERVATION WILL NOT IMPAIR THE CASE OF THE ASSESSI NG OFFICER NOR WILL CAUSE ANY PREJUDICE TO THE ASSESSEE. 12. IN THE RESULT APPEAL IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO.1409/BANG/2013 : 13. IN THIS APPEAL THE REVENUE IS IMPUGNING THE DEL ETION OF RS.1,68,40,857. THE BRIEF FACTS ARE THAT THE ASSESS ING OFFICER HAS MADE AN ADDITION OF THIS AMOUNT ON PROTECTIVE BASIS . THE ADDITIONS ARE AS UNDER: 1 M/S MOHITSHAM INVESTMENTS LTD 1,12,980 2 M/S MOHITSHAM INVESTMENTS LTD 40,72,640 3 M/S MOHITSHAM ESTATES PVT LTD 1,09,09,277 4 M/S MOHITSHAM REALTORS PVT LTD 18,45,960 THE SUBSTANTIVE ADDITION OF RS.1,09,09,277/- HAS BE EN MADE IN THE HANDS OF M/S MOHITSHAM ESTATES (P) LTD. THIS AD DITION HAS BEEN DELETED BY THE CIT (A) AND FOLLOWING HER ORDER IN THIS CASE, SHE HAS DELETED THE ADDITION IN THE PRESENT CASE. S INCE WE HAVE ALREADY SET ASIDE THE ORDER OF THE CIT (A) PASSED I N ITA NO.388/DCIT/CC-BANG WHICH IS THE BASIS OF DELETING THE ADDITION OF RS.1,09,09,277/-, WE HAVE REMITTED THIS ISSUE FOR RE- ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 10 OF 11 ADJUDICATION. THEREFORE, THE VERY BASIS FOR DELETIN G ONE OF THE SUBSTANTIAL AMOUNT IS EXTINGUISHED. CONSIDERING THI S FACTOR, WE SET ASIDE THE ORDER OF THE CIT (A) AND REMIT IT TO THE FILE OF THE LEARNED FIRST APPELLATE AUTHORITY. LEARNED FIRST AP PELLATE AUTHORITY SHALL RE-ADJUDICATE THIS APPEAL AFTER THE DECISION TAKEN IN THE CASE OF M/S MOHITSHAM ESTATES (P) LTD. THIS APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1462/BANG/2013 14. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LEARN ED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.4,36,180 /- WHICH WAS ADDED BY THE ASSESSING OFFICER WITH THE AID OF SECT ION 40A(3) OF THE INCOME TAX ACT. THE BRIEF FINDINGS OF THE LEARN ED CIT (A) ON THIS ISSUE READ AS UNDER: 3. THE GROUNDS NOS. 1 & 2 RELATE TO THE DISALLOWANCES U/S 40A(3) MADE OF RS.4,36,180/- AS DETAILED AT PARA 3 OF THE ASSESSMENT ORDER. THE EXPENSES SO CLAIMED HAVE BEEN DEBITED TO THE P&L A/C AND PAYMENTS ARE IN CASH IN EXCESS OF THE AMOUNTS ALLOWED UNDER THE INCOME TAX ACT AS DETAILED IN THE ASSESSMENT ORDER. HOWEVER, THE APPELLANT HAS CLAIMED THAT CERTAIN EXPENSES TOTALIN G RS.2,78,030/- ARE BELOW RS.20,000/- AND THEREFORE, SHOULD NOT BE DISALLOWED U/S 40A(3) AND THAT THE DISALLOWANCE SHOULD BE RESTRICTED TO RS.1,58,150/- ONLY. THE APPELLANT HAS HOWEVER BEEN UNABLE TO SHOW THAT THE PAYMENTS REFERRED TO ARE BELOW RS.20,000/- PER DAY AS CLAIMED BY IT. THEREFORE, I AM UNABLE TO ALLOW ANY RELIEF ON THIS ACCOUNT. 15. THE ASSESSEE HAS NOT FILED ANY STATEMENT OF FAC TS BEFORE THE TRIBUNAL, NOR FILED ANY PAPER BOOK. WE HAVE PERUSED THE STATEMENT OF FACTS FILED BEFORE THE CIT (A). IN THE GROUNDS BEFORE THE CIT (A) THE ASSESSEE HAS CONTENDED THAT THE ASS ESSING OFFICER ITA NOS.1392 1462 AND 1409 MOHITSAM ESTATES & COMPL EX PVT LTD BANGALORE PAGE 11 OF 11 HAS WRONGLY ARRIVED AT A FIGURE OF RS.4,36,180/-. I T ALSO CONTENDED IN THE STATEMENT OF FACTS THAT IN THE SEI ZED PAPERS, AGGREGATE OF THE PAYMENT MADE TO THESE PARTIES ARE MENTIONED. THE INDIVIDUAL PAYMENT TO A LARGE EXTEND ARE WITHIN THE LIMIT PRESCRIBED U/S 40A(3). LEARNED FIRST APPELLATE AUTH ORITY HAS GONE THROUGH THIS STATEMENT OF FACTS AND RECORDED A FIND ING THAT THE ASSESSEE FAILED TO SUBSTANTIATE THIS CLAIM. NOTHING MORE HAS BEEN BROUGHT TO OUR NOTICE. THEREFORE, WE DO NOT FIND AN Y MERIT IN THIS APPEAL, IT IS DISMISSED. 16. IN THE RESULT, APPEALS IN ITA NOS.1392/BANG/20 13 & ITA NO.1409/BANG/2013 ARE ALLOWED FOR STATISTICAL PURPO SES, WHEREAS APPEAL IN ITA NO/1462/BANG/2013 IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2014. SD/- SD/- (ABRAHAM P. GEORGE) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 31 ST OCTOBER, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE