Virtual Builder Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1749/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3245 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 03-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 26-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Validity of assessment; Commercial expediency; Documents seized; Reassessment proceedings
• Section: 37(1); 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 1528/DEL /2013 ASSESSMENT YEAR: 2006-07 ACIT, CENTRAL CIRCLE-23, ROOM NO. 359, E-2, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI-110055 VS VIRTUAL BUILDERS (P) LTD., M-11, MIDDLE CIRCLE, CONNAUGHT PLACE, NEW DELHI. (PAN: AABCV8989M) (APPELLANT) (RESPONDENT) ITA NO. 1749/DEL /2013 ASSESSMENT YEAR: 2006-07 VIRTUAL BUILDERS (P) LTD., NEW DELHI. VS ACIT, CENTRAL CIRCLE-23, NEW DELHI-110055 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.S. RASTOGI, SHRI AJAY BHAGW ANI, CA RESPONDENT BY : SHRI AMIT JAIN, SR. DR DATE OF HEARING : 22.11.2017 DATE OF PRONOUNCEMENT: 20. 02.2018 ORDER PER BENCH ITA NO. 1528/DEL/2013 IS PREFERRED BY THE DEPARTMENT AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(A)-XXXIII, NEW DELHI FOR ASSESSMENT YEAR ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 2 2006-07 WHEREAS ITA NO.1749/DEL/2013 IS THE CROSS APPEAL BY THE ASSESSEE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT, CONSTRUCTIO N AND MARKETING OF REAL ESTATE PROJECTS FOR COMMERCIA L AND RESIDENTIAL USE. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED ON 28.11.2006 DECLARING NIL INCOME. THERE WAS A SEARCH AND SEIZURE ACTION ON T HE BPTP GROUP OF COMPANIES ON 15.11.2007. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A/153C OF T HE INCOME TAX ACT, 1961 (HEREINAFTER CALLED 'THE ACT') IN THE CASE OF BPTP LTD. AND ITS GROUP COMPANIES, IT WAS NOTICED THAT THE ASSESSEE COMPANY WHICH WAS ONE OF THE GROUP COMPANIES HAD PURCHASED LAND IN DISTRICT FARIDABAD DURING THE FINANCIAL YEAR 2005-06. ON PE RUSAL OF THE DETAILS OF PAYMENTS MADE TOWARDS PURCHASE CONSIDERATION, IT WAS FURTHER NOTICED THAT IN VARIO US CASES, THE ASSESSEE HAD MADE ONLY PART PAYMENT OF T HE PURCHASE CONSIDERATION AT THE TIME OF EXECUTION OF THE SALE DEED AND THE BALANCE CONSIDERATION WAS PAID THROUGH POST DATED CHEQUES WHICH WERE EN-CASHED AFT ER ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 3 SEVERAL MONTHS FROM THE DATE OF SALE DEED. THERE W AS ALSO SOME INFORMATION WITH THE DEPARTMENT THAT BETW EEN THE INTERVENING PERIOD I.E. THE PERIOD BETWEEN THE DATE OF SALE DEED AND THE DATE OF ENCASHMENT OF POST DATED CHEQUES, INTEREST WAS PAID IN CASH TO THE VENDORS O F THE LAND ON MONTHLY BASIS @1.25% PER MONTH AND THIS CAS H PAYMENT OF INTEREST WAS NOT ACCOUNTED FOR IN THE BO OKS OF ACCOUNTS. SIMILARLY, THERE WAS SOME EVIDENCE GATHE RED THAT THE ASSESSEE COMPANY HAD MADE SOME ADDITIONAL PAYMENTS AGAINST PURCHASE OF LAND TO VARIOUS LAND OWNERS WHICH WERE NOT GENUINE. IN LIGHT OF THIS INFORMATION, THE ASSESSING OFFICER WAS OF THE OPINI ON THAT INCOME HAD ESCAPED ASSESSMENT AND, THEREFORE, HE PROCEEDED TO ISSUE NOTICE U/S 148 OF THE ACT ON 29.03.2010. 2.1 IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED I TS RETURN OF INCOME FOR ASSESSMENT YEAR UNDER CONSIDERATION DECLARING LOSS OF RS. 7,182/-. DURIN G THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE WA S ASKED TO SUBMIT DETAILS OF INTEREST PAID IN CASH TO THE VENDORS ON THE AMOUNT OF POST DATED CHEQUES, ITS ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 4 TREATMENT IN THE BOOKS OF ACCOUNTS AND THE SOURCE O F THESE PAYMENTS. FURTHER, IN THE CASE OF DENIAL OF PAYMENT OF INTEREST IN CASH TO THE VENDORS, THE ASS ESSEE WAS ASKED TO PRODUCE THE VENDORS TO WHOM THE PAYMEN TS HAD BEEN MADE THROUGH POST DATED CHEQUES FOR EXAMINATION. IN RESPONSE, THE ASSESSEE DID NOT PRO DUCE THE VENDORS AND STATED IN ITS SUBMISSIONS THAT THER E WAS NO INCRIMINATING DOCUMENT SEIZED WHICH INDICATED PAYMENT OF INTEREST TO THE VENDORS. IT WAS ALSO SUBMITTED THAT THE CONSIDERATION FOR DELAY IN PAYME NT WAS ALREADY FACTORED IN THE SALE PRICE AGREED UPON AND THAT SINCE THE POST DATED CHEQUES WERE DULY MENTION ED IN THE SALE DEEDS, IT ESTABLISHED THAT BOTH THE PAR TIES HAD AGREED FOR THE PAYMENT THROUGH POST DATED CHEQUES. HOWEVER, THE ASSESSING OFFICER REFERRED TO THE VARI OUS SEIZED DOCUMENTS AND BASED ON THE SAME, HELD THAT T HE ASSESSEE HAD PAID INTEREST IN CASH TO THE VENDORS O N THE AMOUNT OF POST DATED CHEQUES @1.25% PER MONTH OUTSI DE ITS BOOKS OF ACCOUNTS. HE CALCULATED THE AMOUNT OF SUCH INTEREST AT RS. 93,07,200/- AND PROCEEDED TO ADD TH E SAME TO THE INCOME OF THE ASSESSEE. ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 5 2.2 FURTHER, DURING THE COURSE OR ASSESSMENT PROCEEDINGS U/S 153A/153C IN THE CASE OF BPTP AND I TS GROUP COMPANIES, IT HAD COME TO THE NOTICE OF THE DEPARTMENT THAT BPTP LTD. AND ITS GROUP COMPANIES H AD MADE ADDITIONAL PAYMENTS OF MORE THAN RS. 45.02 CRO RES TO THE VENDORS OF THE LAND OVER AND ABOVE THE SALE CONSIDERATION MENTIONED IN THE SALE DEEDS. AS PER THE INFORMATION AVAILABLE WITH THE DEPARTMENT, THE ASSE SSEE HAD CLAIMED TO HAVE MADE ADDITIONAL PAYMENT TO THE TUNE OF RS. 2,97,23,785/-. THE ASSESSEE WAS ASKED DURIN G THE COURSE OF REASSESSMENT PROCEEDINGS TO SUBMIT THE DE TAILS OF ADDITIONAL PAYMENTS AS AFORESAID. THE ASSESSEE WAS ALSO ASKED TO PRODUCE PERSONS FOR EXAMINATION TO WH OM THE ADDITIONAL PAYMENTS WERE CLAIMED TO HAVE BEEN MADE. IN RESPONSE, THE ASSESSEE DID NOT PRODUCE TH E VENDORS BUT SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAD A COLLABORATION AGREEMENT WITH M/S COUNTRYWIDE PVT. LTD. UNDER WHICH THE ASSESSEE WAS TO ACQUIRE LANDS. IT WAS SUBMITTED THAT UNDER THE COLLABORATION AGREEMENT, IT WAS AGREED THAT M/S COUNTRYWIDE PROMOTERS PVT. LTD. SHALL REIMBURSE TO THE ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 6 ASSESSEE ALL COSTS AND EXPENSES INCURRED BY THE ASS ESSEE IN RESPECT OF ACQUISITION OF THE CONCERNED LAND. I T WAS FURTHER SUBMITTED THAT SINCE THE PAYMENT WAS OFTEN MADE BY POST DATED CHEQUES, THERE WAS A CONSIDERABLE ESCALATION IN PRICE AT THE TIME OF ENCASHMENT OF CH EQUES AND THE SELLERS, THEREFORE, RAISED THE CLAIMS OF COMPENSATION FOR DELAY IN PAYMENT. IT WAS ALSO SUBMITTED THAT THERE WERE NUMEROUS POST SALE SITUAT IONS AND THE ASSESSEE, IN VIEW OF COMMERCIAL EXPEDIENCY, HAD TO INCUR ADDITIONAL EXPENDITURE, SO THAT A PURCHASE ALREADY MADE DOES NOT GET ABORTED. IT WAS ALSO SUBMITTED THAT THE ENTIRE EXPENDITURE WAS REIMBURSE D BY M/S COUNTRYWIDE PROMOTERS PVT. LTD. IN VIEW OF THE COLLABORATION AGREEMENT AND, THEREFORE, THE REIMBURSEMENT WAS NOT A REVENUE RECEIPT. HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE CONTEN TIONS OF THE ASSESSEE AND PROCEEDED TO HOLD THAT THE ADDI TIONAL PAYMENT HAD BEEN MADE IN CLEAR CUT VIOLATION AND CONTRAVENTION OF LAW AND REGULATION FOR PAYMENT OF STAMP DUTY AND WAS NOT, THEREFORE, ALLOWABLE AS DEDUCTION . THE ASSESSING OFFICER ALSO ADDED THE AMOUNT OF RS. ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 7 2,97,23,785/- SHOWN AS ADDITIONAL PAYMENT BY THE ASSESSEE TO THE INCOME OF THE ASSESSEE AND COMPLETE D THE ASSESSMENT AT RS. 3,90,23,800/-. 2.3 AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE LD. COMMISSIONER OF INCOME TAX (A) CHALLENGING THE ADDITION ON MERITS. THE ASSESSEE ALSO RAISED A LEG AL GROUND THAT THE ADDITION WAS NOT VALID AS THERE WAS NO FINDING BY THE ASSESSING OFFICER THAT THE SEIZED MA TERIAL BELONGED TO THE ASSESSEE COMPANY. THE LD. COMMISSIONER OF INCOME TAX(A) DISMISSED THE ASSESSE ES CHALLENGE TO THE VALIDITY OF ASSESSMENT PROCEEDINGS BUT GAVE SUBSTANTIAL RELIEF TO THE ASSESSEE ON MERITS B Y DELETION ADDITION OF RS. 81,02,700/- OUT OF TOTAL A DDITION OF RS. 93,07,200/- ON ACCOUNT OF INTEREST ON POST D ATED CHEQUES. THE LD. COMMISSIONER OF INCOME TAX(A) ALS O DELETED THE ADDITION OF RS. 2,90,73,785/- OUT OF TO TAL ADDITION OF RS. 2,97,23,785/- MADE ON ACCOUNT OF ADDITIONAL PAYMENT MADE IN VIOLATION OF STAMP DUTY ACT 1899. NOW, THE DEPARTMENT IS IN APPEAL BEFORE THE ITAT AND IS CHALLENGING THE DELETION BY THE LD. COMMISSI ONER OF INCOME TAX (A) WHEREAS THE ASSESSEE IS IN APPEAL ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 8 CHALLENGING THE SUSTENANCE OF ADDITION BY THE LD. COMMISSIONER OF INCOME TAX (A). THE ASSESSEE IS AL SO RAISING THE LEGAL GROUND THAT THE ASSESSMENT SHOULD HAVE BEEN MADE U/S 153C OF THE ACT AND NOT U/S 143(3)/14 7 OF THE ACT. 2.4 THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE DEPARTMENT IN ITA NO. 1528/DEL/2013:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 81,02,700/- OUT OF TOTAL ADDITION OF RS. 93,07,200/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTERES T ON PDCS PAID OUT OF BOOKS OF ACCOUNT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,90,73,7851- OUT OF TOTAL ADDITION OF RS. 2,97,23, 785 MADE BY THE ASSESSING OFFICER IN VIEW OF THE PROVIS IONS OF SECTION 37(1) OF THE INCOME TAX ACT, 1961 ON ACC OUNT OF ADDITIONAL PAYMENT IN VIOLATION OF STAMP DUTY AC T, 1899. 3. THE ORDER OF THE CIT (A) IS ERRONEOUS AND IS NO T TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. 2.5 THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN ITA NO. 1749/DEL/2013:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN REJECTING APPELLANT'S CONTENTION THAT ASSESSMENT ORDER ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 9 MADE BY ASSESSING OFFICER WAS BAD IN LAW AND VOID AB-INITIO ON THE GROUND THAT IT OUGHT TO HAVE BEEN MADE U/S 153C OF THE INCOME TAX ACT, AND NOT, AS WAS DONE U/S 143(3)/147 OF THE INCOME TAX ACT. 2. THAT WITHOUT PREJUDICE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN UPHOLDING THE ASSUMPTION OF JURISDICTION U/S 147 BY THE ASSESSING OFFICER AND IN MAKING THE ASSESSMENT IN PURSUANCE THEREOF, WITHOUT DEALING WITH APPELLANT'S OBJECTIONS ON MERITS. 2.1 THAT THE CIT(A) HAVING GIVEN A FINDING THAT NO SEIZED MATERIAL OBTAINED FROM THE SEARCH OF BPTP GROUP OF CASES (NO SEARCH HAVING BEEN MADE ON THE APPELLANT ) BELONGED TO THE APPELLANT, CLEARLY ERRED IN YET UPHOLDING THE ACTION U/S 147 TAKEN IN THE HANDS OF THE APPELLANT BASED ON SUCH SEIZED MATERIAL. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN HOLDING TO QUOTE, 'THAT SEIZED DOCUMENTS DEFINITELY PROVES THAT INTEREST IS PAID ON PDC' DESPITE- I. THAT THE SEIZED RECORD ON THE BASIS OF WHICH ABOVE FINDING WAS GIVEN, EVEN ACCORDING TO HIS OWN FINDING BY THE CIT(A), DID NOT BELONG TO THE APPELLANT AND, II. THAT NO ENQUIRIES WERE MADE FROM ANY OF THE ALLEGED RECIPIENTS OF THE INTEREST AND NONE WAS CONFRONTED WITH RELEVANT DOCUMENT(S). 3.1 THAT THE FINDING OF THE CIT(A) IS BASED ON MERE SURMISES AND CONJECTURES WITHOUT PROOF AND CORROBORATION BY INDEPENDENT EVIDENCE. 3.2 THAT WITHOUT PREJUDICE THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF INTEREST FOR THE PERIOD FOR WHICH PDCS WERE EXTENDED. 3.3 THAT WITHOUT PREJUDICE THE CIT(A) ERRED IN NOT QUANTIFYING THE ADDITION AND INSTEAD GIVING ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 10 AMBIGUOUS DIRECTIONS TO COMPUTE THE INTEREST AFTER SIX MONTHS FROM THE DATE OF SALE. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) ERRED IN NOT ACCEPTING THE APPELLANT'S CONTENTION THAT ADDITIONAL PAYMENTS HAVING NOT BEEN CLAIMED AS DEDUCTION BY APPELLANT, NO DISALLOWANCE COULD HAVE BEEN MADE IN THE HANDS OF THE APPELLANT. 4.1 THAT WITHOUT PREJUDICE THE CIT(A) ERRED IN UPHOLDING THE DISALLOWANCE OF ADDITIONAL PAYMENTS MADE TO THE RECIPIENTS WHO WERE NOT THE OWNERS OF LAND AND TO THE PAYMENT MADE IN CASH. 4.2 THAT WITHOUT PREJUDICE THE CIT(A) ERRED IN NOT HIMSELF QUANTIFYING THE ADDITION TO BE MADE. 4.3 THAT WITHOUT PREJUDICE THE CIT(A) DID NOT DEAL WITH THE FOLLOWING SPECIFIC GROUNDS NO.4,1 TO 4.4:- '4.1 WITHOUT PREJUDICE, THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING AN ADDITION OF RS.2,97,23,785/- ON ACCOUNT OF ADDITIONAL PAYMENT INSTEAD OF RS. 6,50,000/-. 4.2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN WRONGLY TREATING THE AMOUNT OF LEASE MONEY PAID OF RS.2,84,73,785/- AS PER LEASE DEED (LEASE MONEY PAID 2,75,93,750+STAMP DUTY PAID 8,80,035) AS ADDITIONAL PAYMENT. 4.3 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER HAS ERRED IN DISALLOWING ADDITIONAL PAYMENT MADE OF RS.6,00,000/- TO UDHAM SINGH & OTHERS DURING THE YEAR ENDED 31.3.2007 WHICH IS ALREADY DISALLOWED BY THE LEARNED ASSESSING OFFICER DURING THE ASSESSMENT YEAR 2007-08. 4.4 THAT THE LEARNED ASSESSING OFFICER HAS ERRED IN MAKING ADDITION OF RS. 2,97,23,785/- ON ACCOUNT OF ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 11 PAYMENT OF ADDITIONAL PAYMENTS AS RECORDED IN BOOKS OF ACCOUNT OF APPELLANT COMPANY AS AGAINST AMOUNT OF RS.6,50,000/- PAID ON ACCOUNT OF ADDITIONAL PAYMENT AND RECORDED IN BOOKS OF ACCOUNTS.' 5. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS)-XXXIII, NEW DE LHI ARE BAD IN LAW AND VOID AB-INITIO. 6. THE APPELLANT CRAVES PERMISSION TO ADD, AMEND, ALTER OR VARY ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE T HE DATE OF HEARING OF THE APPEAL. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT GROUND NOS. 1, 2, 2.1, 5 AND 6 OF THE ASSESSEES APPEAL WERE NO T BEING PRESSED. THUS, THESE GROUNDS ARE BEING DISMISSED A S NOT BEING PRESSED. IN EFFECT, ONLY GROUND NO. 3 AND 4 WILL BE ARGUED AND ADJUDICATED UPON. 3.1 THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS. 93,07,200/- IN RESPECT OF INTE REST ON POST DATED CHEQUES. IN APPEAL, THE LD. COMMISSI ONER OF INCOME TAX(A) DIRECTED THE ASSESSING OFFICER THA T IF IT WAS NOT POSSIBLE TO WORK OUT THE EXTENSION OF POST DATED CHEQUES IN EACH CASE, THE ASSESSING OFFICER WAS TO RE- COMPUTE THE INTEREST ON POST DATED CHEQUES AFTER SI X MONTHS FROM THE DATE OF ISSUANCE OF POST DATED CHEQ UES. IT WAS SUBMITTED THAT AS A RESULT, THE ASSESSING OF FICER ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 12 GAVE APPEAL EFFECT WHEREBY ADDITION OF RS. 81,02,70 0/- WAS DELETED AND ONLY RS. 12,04,500/- WAS CONFIRMED. LD. AR FURTHER SUBMITTED THAT SINCE THERE WAS A MIS TAKE IN MAKING ADDITION IN RESPECT OF POST DATED CHEQUES , IN THE APPEAL EFFECT ORDER, APPLICATION U/S 154 WERE SUBMITTED ON 28.01.2011 AND 17.04.2017 WHEREIN IT W AS SUBMITTED THAT THE INTEREST ON POST DATED CHEQUES I N RESPECT OF SALE DEED NO. 444 EXECUTED WITH MR. SHRI CHAND HAD BEEN WRONGLY COMPUTED W.E.F. 20.03.2005 INSTEAD OF 20.03.2006 AND ACCORDINGLY, THE PERIOD O F ENCASHMENT OF TWO POST DATED CHEQUES WAS LESS THAN SIX MONTHS AND AS A RESULT IF THIS RECTIFICATION WAS AL LOWED, THE ENTIRE AMOUNT OF RS. 93,07,200/- WOULD BE DELET ED. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAD SO FAR NOT TAKEN ANY ACTION ON THE RECTIFICATION APPLICATI ON MOVED BY THE ASSESSEE. WITH RESPECT TO THE DEPARTM ENT CONTESTING THE PAYMENT OF ABOVE IN RESPECT OF INTER EST ON POST DATED CHEQUES, LD. AR SUBMITTED THAT IDENTICAL ISSUE HAD COME UP FOR CONSIDERATION IN THE CASE OF SISTER CONCERN, M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. WHEREIN ALSO THE LD. COMMISSIONER OF INCOME TAX(A) HAD ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 13 GIVEN SIMILAR DIRECTIONS AND THE ITAT HAD UPHELD TH E DIRECTIONS VIDE ORDER DATED 31.10.2014 IN ITA NO. 1674/DEL/2013 AND 1765/DEL/2013 FOR ASSESSMENT YEAR 2008-09 BY HOLDING THAT THERE WAS A SOUND LOGIC FOR SUCH DIRECTION BY THE LD. COMMISSIONER OF INCOME TAX(A) AND THE SAME WAS BASED ON MATERIAL FOUND AND SEIZED AT THE TIME OF SEARCH. LD. AR ALSO SUBMITTED THAT THIS OR DER OF ITAT DELHI IN THE CASE OF IAG PROMOTERS AND DEVELOP ERS PVT. LTD. (SUPRA) HAS BEEN ACCEPTED BY THE DEPARTME NT AND, THEREFORE, THE DEPARTMENTS GROUND NO. 1 SHOUL D BE DISMISSED. IT WAS ALSO SUBMITTED THAT ITAT DELHI B ENCH HAD TAKEN A SIMILAR VIEW AS THAT IN THE CASE OF IAG PROMOTERS AND DEVELOPERS PVT. LTD. IN THE CASES OF M/S COUNTRYWIDE PROMOTERS PVT. LTD. (ITA NO. 6303/DEL/1 3 AND 6342/DEL/2013), M/S KA PROMOTERS AND DEVELOPERS PVT. LTD. (ITA NO. 1677/DEL/2013 AND 1737/DEL/2013) AND M/S VASUNDRA PROMOTERS PVT. LTD. (ITA NO. 1527/DEL/2013 & 1758/DEL/2013) WHICH WERE SISTER CONCERNS OF THE ASSESSEE COMPANY. IT WAS ALSO SUBM ITTED THAT IF DEPARTMENTS GROUND NO. 1 IS DISMISSED, THE N ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 14 ASSESSEES GROUND NO. 3, 3.1, 3.2 AND 3.3 WILL NOT SURVIVE. 3.2 WITH RESPECT TO GROUND NO. 4 RELATING TO DISALL OWANCE OF ADDITIONAL PAYMENT, THE LD. AR SUBMITTED THAT TH E ASSESSING OFFICER HAD MADE DISALLOWANCE OF RS. 2,97,23,785/- U/S 37(1) OF THE ACT ON THE GROUND TH AT THESE PAYMENTS WERE IN VIOLATION OF THE STAMP DUTY ACT. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEE HA D CONTENDED BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) THAT THE DEDUCTION TOWARDS PAYMENT FOR PURCHASE WAS NOT CLAIMED AS A DEDUCTION AND HENCE NO DISALLOWANC E COULD BE MADE BUT THE LD. COMMISSIONER OF INCOME TA X (A) DID NOT ACCEPT THE ASSESSEES CONTENTION BUT GA VE DIRECTION TO THE ASSESSING OFFICER TO QUANTIFY THE DISALLOWANCE TO BE MADE. IT WAS FURTHER SUBMITTED THAT AS PER THE DIRECTIONS AFTER GIVING THE APPEAL EFFEC T, ONLY THE BALANCE DISALLOWANCE OF RS. 65,0000/- REMAINED. THE LD. AR SUBMITTED THAT SINCE THE ASSESSEE HAS NO T CLAIMED THE EXPENDITURE, THE SAME CANNOT BE DISALLO WED. IT WAS FURTHER SUBMITTED THAT AN IDENTICAL ISSUE AR OSE IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD. IN IT A NO. ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 15 1752/DEL/2013 FOR ASSESSMENT YEAR 2006-07, WHICH WA S A GROUP COMPANY, AND THE ITAT, VIDE ORDER DATED 22.08.2014, HAD DELETED THE ADDITION. IT WAS ALSO SUBMITTED THAT THE ORDER OF ITAT IN M/S WESTLAND DEVELOPERS PVT. LTD. HAD BEEN ACCEPTED BY THE DEPARTMENT AND, THEREFORE, THE SAME HAD BECOME FINA L. IT WAS ALSO SUBMITTED THAT THIS ORDER OF THE ITAT W AS ALSO FOLLOWED BY COORDINATE BENCH OF ITAT IN THE CASE OF SISTER CONCERN OF THE ASSESSEE M/S COUNTRYWIDE PROMOTERS PVT. LTD. IT WAS SUBMITTED THAT BOTH THE GROUNDS OF THE ASSESSEE ARE ALLOWED AND THE GROUNDS RAISED BY THE DEPARTMENT ARE DISMISSED. 4. IN RESPONSE, THE LD. SR. DR READ OUT EXTENSIVELY FROM THE ORDER OF ASSESSMENT AND PLACED EXTENSIVE RELIANCE ON THE FINDINGS RECORDED THEREIN. LD. SR. DR VEHEMENTLY ARGUED THAT THE LD. COMMISSIONER OF INCO ME TAX (A) HAD GIVEN RELIEF TO THE ASSESSEE WITHOUT GI VING PROPER CONSIDERATION TO THE FACTUAL MATRIX AND THE SETTLED LEGAL POSITION. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. GROUND NOS.1, 2, 2.1. 5 ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 16 AND 6 OF THE ASSESSEES APPEAL HAVE ALREADY BEEN DISMISSED AS NOT BEING PRESSED. GROUND NO. 1 OF TH E DEPARTMENTS APPEAL AND GROUND NO. 3, 3.1, 3.2 AND 3.3 OF THE ASSESSEES APPEALS ARE INTERRELATED. IT IS THE CONTENTION OF THE LD. AR THAT THE ISSUE OF INTEREST ON POST DATED CHEQUES STANDS SETTLED BY THE ORDER OF I TAT IN THE CASE OF MS/ IAG PROMOTERS & DEVELOPERS PVT. LTD . WHICH IS A SISTER CONCERN IN THE GROUP OF CASES. H ERE ALSO, THE LD. COMMISSIONER OF INCOME TAX (A) HAD GI VEN A SIMILAR DIRECTION FOR RECALCULATING THE INTEREST FR OM A DATE SIX MONTHS AFTER THE ISSUE OF POST DATED CHEQU E AND THE ITAT HAD UPHELD THESE DIRECTIONS AS THERE BEING A SOUND LOGIC BEHIND SUCH DIRECTION. THEREFORE, ON IDENTICAL FACTS, RESPECTFULLY FOLLOWING THE ORDER O F ITAT IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD ., WE ALSO HOLD THAT THE LD. COMMISSIONER OF INCOME TAX ( A) HAS GIVEN A DIRECTION WHICH IS HAVING A SOUND LOGIC AND THE DIRECTIONS ARE ACCORDINGLY UPHELD. WE ALSO FIN D THAT THE LD. AR HAS SUBMITTED THAT THERE IS AN ERROR IN COMPUTING THE CALCULATION OF DISALLOWANCE BY THE ASSESSING OFFICER IN GIVING THE APPEAL EFFECT. IT HAS BEEN ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 17 CONTENDED THAT THE ENTIRE DISALLOWANCE WILL BE DELE TED AS INTEREST ON POST DATED CHEQUES IN RESPECT OF SALE D EED EXECUTED WITH M/S SHRI CHAND HAS BEEN WRONGLY COMPUTED BY TAKING THE DATE OF COMPUTATION AS 22.03.2005 INSTEAD OF 22.03.2006. THIS ISSUE NECESSARILY WILL HAVE TO BE EXAMINED BY THE ASSESSI NG OFFICER. ACCORDINGLY, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO CONSIDE R THE RECTIFICATION APPLICATION MOVED BY THE ASSESSEE IN THIS REGARD AND CORRECTLY COMPUTE THE INTEREST THEREAFTE R AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO PRESEN T ITS CASE. ACCORDINGLY, GROUND NOS. 3, 3.1, 3.2, 3.3 OF THE ASSESSEES APPEAL STAND ALLOWED FOR STATISTICAL PUR POSES AND RESPECTFULLY FOLLOWING ITATS ORDER IN THE CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. (SUPRA), WE DISMISS GROUND NO. 1 RAISED BY THE DEPARTMENT. 5.1 COMING TO GROUND NO. 2 OF THE DEPARTMENTS APPE AL AND GROUND NOS. 4, 4.1, 4.2, 4.3 AND 4.4 OF THE ASS ESSEES APPEAL WHICH ARE RELATED, WE FIND THAT THIS ISSUE I S COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF I TAT DELHI BENCH IN THE CASE OF M/S WELLWORTH DEVELOPERS PVT. ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 18 LTD. IN ITA NO. 16754/DEL/2013 AND 1761/DEL/2013 F OR ASSESSMENT YEAR 2006-07 AS WELL AS IN THE CASE OF M /S WESTLAND DEVELOPERS PVT. LTD. (SUPRA) ALONG WITH NUMEROUS OTHER CASES. THE ITAT DELHI BENCH HAS ALS O TAKEN A SIMILAR VIEW IN THE CASE OF M/S COUNTRYWIDE PROMOTERS PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HEL D THAT BEING BOUND BY THE DECISION OF THE COORDINATE BENCH , IT IS HELD THAT NO DISALLOWANCE ON ADDITIONAL PAYMENT CAN BE MADE. THE COORDINATE BENCH FURTHER HELD THAT TH E LD. COMMISSIONER OF INCOME TAX (A) WAS NOT JUSTIFIED IN UPHOLDING PART OF THE DISALLOWANCE OF ADDITIONAL PA YMENT ON THE GROUND THAT NEITHER THE ASSESSEE HAS DEBITED ADDITIONAL PAYMENT IN ITS PROFIT AND LOSS ACCOUNT N OR HAS CLAIMED IT. THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE COORDINATE BENCHES AS AFORESAID, WE ALLOW GROUN D NOS. 4, 4.1, 4.2, 4.3 AND 4.4 OF THE ASSESSEES APP EAL AND DISMISS GROUND NO. 2 OF THE DEPARTMENTS APPEAL. 6. IN THE RESULT, THE ASSESSEES APPEAL STANDS PART LY ALLOWED WHEREAS THE DEPARTMENTS APPEAL STANDS DISMISSED. ITA NO. 1528/D/2013, 1749/D/2013 ASSESSMENT YEAR 2006-07 19 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.0 2.2018. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 20 TH FEBRUARY, 2018 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR