IAG Promoters & Developers Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 1765/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81952 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-03-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: V S RASTOGI
• Keywords: Business income; Loose papers; Document seized; Documents seized
• Section: 37(1); 37; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH C CC C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1674/DEL/2013 1674/DEL/2013 1674/DEL/2013 1674/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2008 2008 2008 2008 - -- - 09 0909 09 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRC CENTRAL CIRC CENTRAL CIRC CENTRAL CIRCLE LELE LE- -- -23, 23, 23, 23, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) LTD., LTD., LTD., LTD., M MM M- -- -11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN : AAACI7995R. PAN : AAACI7995R. PAN : AAACI7995R. PAN : AAACI7995R. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO .1765/DEL/2013 .1765/DEL/2013 .1765/DEL/2013 .1765/DEL/2013 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2008 2008 2008 2008 - -- - 09 0909 09 M/S IAG PROMOTER & M/S IAG PROMOTER & M/S IAG PROMOTER & M/S IAG PROMOTER & DEV DEV DEV DEVELOPERS (P) LTD., ELOPERS (P) LTD., ELOPERS (P) LTD., ELOPERS (P) LTD., M MM M- -- -11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, CONNAUGHT CIRCUS, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN : AAACI7995R. PAN : AAACI7995R. PAN : AAACI7995R. PAN : AAACI7995R. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -23, 23, 23, 23, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SATPAL SINGH, SR. DR. ASSESSEE BY : SHRI V.S. RASTOGI, AR. ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: : ITA NO.1674/DEL/2013 REVENUES APPEAL :- THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXXIII, NEW DELHI DATED 24 TH DECEMBER, 2012 FOR THE AY 2008-09. 2. GROUND NO.1 RAISED BY THE REVENUE READS AS UNDER :- ITA-1674/D/2013 & 1765/D/2013 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.5,06,625/-, MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON PDCS PAID OUT OF BOOKS OF ACCOUNT. 3. THE FACTS OF THE CASE RELATING TO THIS GROUND AR E THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE COMPANY IS ONE OF THE GROUP COMPANIES OF B PTP GROUP IN WHICH LAND HAS BEEN PURCHASED MAINLY IN THE NCR (NA TIONAL CAPITAL REGION). THE ASSESSEE COMPANY HAS MADE ONLY PART P AYMENT OF SALE CONSIDERATION TO THE SELLER AT THE TIME OF EXECUTIN G SALE DEED AND BALANCE PAYMENT IS MADE BY WAY OF POST DATED CHEQUE S (PDCS). DURING ASSESSMENT, THE ASSESSING OFFICER OBTAINED D ETAILS OF SUCH PDCS GIVEN AT THE TIME OF REGISTRATION TO THE SELLE R AND OBTAINED DATE OF ENCASHMENT AND APPLIED RATE OF 15% INTEREST PER ANNUM PAID FOR THE PERIOD FROM SALE DEED TO DATE OF ENCASHMENT, ON THE AMOUNT OF PDCS ON THE BASIS OF SEIZED MATERIAL. THE ASSESSING OFF ICER GAVE THE FINDING IN THE ASSESSMENT ORDER THAT TOTAL SUCH INTEREST PA YABLE COMES TO `5,06,625/- ON PDCS AND SUCH INTEREST IS PAID IN CA SH OUT OF BOOKS OF ACCOUNT. THEREFORE, SUCH INTEREST IS ADDED AS UNACCOUNTED/UNEXPLAINED EXPENSES. LEARNED CIT(A) G AVE THE FOLLOWING DIRECTION FOR THE RECALCULATION OF THE IN TEREST ON PDCS:- 5.4 CONCLUSION :- LEARNED AR HAS BEEN MAINTAIN ALL ALONG THAT INTERES T IS NOT PAID AS ALL THE RECEIPTS ARE ONLY MEMORANDUM ON LY. ANALYSIS OF THESE ABOVE SEIZED DOCUMENT REVEALS THA T THESE SEIZED DOCUMENTS DEFINITELY PROVES THAT INTER EST IS PAID ON PDCS. VARIOUS VOUCHER IN SEIZED DOCUMEN TS CONCLUSIVELY PROVES THAT THE RECIPIENT HAS SIGNED O N VOUCHER FOR RECEIPT OF THE INTEREST. LD ARS CONTE NTION THAT THESE ARE ONLY WORKING OF INTEREST CLAIMED BY SELLER FOR PUTTING UP BEFORE SENIOR MANAGEMENT DOES NOT APPEAR TO BE CONVINCING. IN CASE OF CLAIM, THE REC EIVER WILL NOT SIGN THE VOUCHER AS RECIPIENT. AMOUNTS AR E SPECIFIC AND CALCULATION IS 15% PER ANNUM. THEREFO RE, LD AR WITHOUT CONCEDING THAT THE INTEREST IS PAID O N ITA-1674/D/2013 & 1765/D/2013 3 PDCS HAS TAKEN THE STAND THAT IN NONE OF THE SEIZED MATERIAL, I.E., EVEN IN RECEIPT SEIZED, THE INTERES T IS FROM DATE OF ISSUE OF PDCS. NOW ISSUE ARISES WHETHER INTEREST ON PDCS ARE PAID FROM DATE OF ISSUE OR FOR EXTENSION OF PDCS. DOCUMENTS DISCUSSED ABOVE WHERE THERE IS CLEAR EVIDENCES OF RECEIPT OF INTEREST IS FOR EXTENSION OF PERIOD OF PDCS. LD ARS ARGUMENTS THA T CALCULATION OF INTEREST ON PDCS HAS BEEN CONSIDERED WHILE ENTERING INTO AGREEMENTS HOLDS SOME LOGIC. B UT WHEN DATE OF PDCS ARE EXTENDED, THE RECIPIENT WILL DEFINITELY ASK AND SETTLE FOR SOME ADDITIONAL COMPENSATION IN FORM OF INTEREST. THERE IS NO EVID ENCE WHICH PROVES THAT INTEREST IS PAID FROM THE DATE OF SALE TO DATE OF ENCASHMENT OF POST DATED CHEQUES. HOWEVER, THERE IS CONCRETE EVIDENCE IN FORM OF SEIZ ED MATERIAL TO SHOW THAT INTEREST IS PAID AND RECEIVED BY SELLER ON THE EXTENSION OF PDCS AS DISCUSSED ABOVE WHILE ANALYZING THE SEIZED DOCUMENT. THEREFORE, IN MY VIEW WHERE EVER THE DATE OF PDCS ARE EXTENDED INTER EST IS PAID @ 15% PER ANNUM IN CASH OUT OF BOOKS OF ACCOUNTS WHICH ARE EVIDENT FROM SEIZED MATERIAL. THEREFORE, INTEREST ON PDCS TO THE EXTENT OF EXTENS ION PERIOD APPEARS TO QUITE REASONABLE AND LOGICAL. ACCORDINGLY, INTEREST ON PDCS EITHER AS SALE CONSIDERATION OR ADDITIONAL PAYMENT MAY BE RECOMPUTED TO THE EXTENT OF EXTENDED PERIOD OF PDCS BY THE A.O. AND TO THAT EXTENT ADDITION IS CONFIRME D. THE ABOVE FORMULAE WILL APPLY TO ALL GROUP COMPANIE S UNDER THE MANAGEMENT OF BPTP I.E. (M/S BPTP AND ASSOCIATE COMPANIES) INCLUDING THE APPELLANT COMPAN Y AS EVIDENCE IS FOUND IN RESPECT OF VARIOUS COMPANIE S OF BPTP AND SOME SEIZED PAPER COULD NOT BE RELATED TO SPECIFIC COMPANY. THEREFORE, IT IS PROPER TO APPLY THIS FORMULA FOR ALL COMPANIES UNDER THE COMMON MANAGEMENT OF BPTP GROUP, HEAD BY SHRI KABUL CHAWLA. ALL THESE COMPANIES ARE CLOSELY LINKED. S OME COMPANIES PURCHASE LAND AND TRANSFER THE SAME TO M/ S BPTP LTD. OR COUNTRYWIDE PROMOTERS (P) LTD. FOR HOU SING OR COMMERCIAL PROJECTS ARE ULTIMATELY DEVELOPED AND SOLD BY M/S BPTP LTD. AND COUNTRYWIDE PROMOTERS LTD . OR IN STRAY CASE BY SOME OTHER COMPANIES. ASSESSIN G OFFICER HAS APPLIED THE CASE OF EUSUF ALI FOR APPLY ING INTEREST ON PDCS FOR ALL COMPANIES OF BPTP GROUP FO R ALL ASSESSMENT YEAR UNDER CONSIDERATION. LD AR HAS TRI ED TO DIFFERENTIATE THE ABOVE CITED CASE ON FACTS. IN MY VIEW, AS INTEREST PAYMENT ON EXTENSION OF PERIOD OF PDCS ARE ESTABLISHED ON NUMEROUS SEIZED DOCUMENTS. A TREND IS ESTABLISHED FOR THE GROUP AS THE OVERALL ITA-1674/D/2013 & 1765/D/2013 4 MANAGEMENT IS CONTROLLED BY ONE PERSON SH. KABUL CHAWLA AND ACTIVITIES OF ALL COMPANIES ARE INTERREL ATED. IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE THEN A.O. IS DIRECTED TO RECOMPUTE INTERE ST ON PDCS AFTER SIX MONTHS FROM DATE OF ISSUE OF PDCS I.E. DATE OF SALE, AS SIX MONTHS IS TAKEN AS REASONABLE PERIOD FOR GIVING PDC AS PER SALE DEED. THIS VIEW IS FORMED ON THE BASIS THE STATEMENT OF SH. CHHOTU RAM WHICH SAYS THAT NORMALLY PDCS ARE GIVEN FOR 8 TO 10 MONTHS. FURTHER LD AR HAS ALSO SUBMITTED FEW SALE DEED IN RESPECT OF SOME OF SEIZED RECORD IN THE CAS E OF RAMVATI BEERO ETC. WHERE THE INTEREST WORKING IS MA DE AFTER 9/15 MONTHS. TAKING THESE FACTS INTO CONSIDERATION, IT WOULD BE PROPER TO COMPUTE INTERE ST AFTER 6 MONTHS FROM DATE OF SALE ON CONSERVATIVE SI DE. ACCORDINGLY THIS GROUND IS PARTLY ALLOWED. 4. THE REVENUE, AGGRIEVED WITH THE ORDER OF LEARNED CIT(A), IS IN APPEAL BEFORE US VIDE GROUND NO.1 REPRODUCED ABOVE. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D PERUSED RELEVANT MATERIAL PLACED BEFORE US. AT THE OUTSET, THE GROUND RAISED BY THE REVENUE IS MISCONCEIVED BECAUSE LEARNED CIT(A) HAS NOT DELETED THE ADDITION OF `5,06,625/- BUT HAS ONLY DIRECTED T O RECALCULATE THE INTEREST. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE LEARNED CIT(A) AND ALSO THE SUBMISSIONS OF BOTH THE PARTIES AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). AFTER EXAMINING THE LOOSE PAPERS SEIZED AT THE TIME OF SEARCH AT THE AS SESSEES PREMISES, IT WAS NOTICED THAT INTEREST IS PAID ON THE PDCS ONLY DURING THE PERIOD OF EXTENSION OF PDCS AND, THEREFORE, HE DIRECTED THE A SSESSING OFFICER TO RECOMPUTED THE INTEREST ON PDCS AT THE TIME OF EXTE NSION OF THE PDCS. HE HAS FURTHER OBSERVED THAT IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE, THEN THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTED INTEREST ON PDCS AFTER SIX MONTHS FRO M THE DATE OF ISSUE OF THE PDCS. THEREFORE, THE GROUND OF APPEAL OF TH E REVENUE THAT THE CIT(A) DELETED THE ADDITION OF `5,06,625/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON PDCS IS FACTUALLY INCORRECT AND ITA-1674/D/2013 & 1765/D/2013 5 CONTRARY TO THE ORDER OF THE CIT(A). THE CIT(A) DI RECTED TO RECALCULATE THE INTEREST ON PDCS AND THERE WAS A SOUND LOGIC FO R SUCH DIRECTION. HIS DIRECTION IS BASED ON MATERIAL FOUND AND SEIZED AT THE TIME OF SEARCH. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY J USTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A) IN THIS REGARD AND ACCORDINGLY, WE REJECT GROUND NO.1 OF THE REVENUES APPEAL. 6. GROUND NO.2 READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1,01,32,501/-, MADE BY THE ASSESSING OFFICER IN VIEW OF THE PROVISIONS OF SECTION 37(1) OF THE INCOME TA X ACT, 1961 ON ACCOUNT OF ADDITIONAL PAYMENT IN VIOLATION OF STAMP DUTY ACT, 1899. 7. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE COM PANY PURCHASES THE LAND FROM FARMERS AND LAND OWNERS AND TRANSFERS THE SAME TO ONE OF FLAGSHIP COMPANY OF BPTP GROUP NAMELY M/S COUNTR Y WIDE PROMOTERS (P) LTD. (CWPPL) UNDER COLLABORATION AGRE EMENT FOR DEVELOPMENT AND RECEIVES RS.35,000 PER ACRE FROM CW PPL WHICH IS OVER AND ABOVE THE COST OF LAND. IN PARA 3.1 OF TH E ASSESSMENT ORDER, IT IS MENTIONED THAT BPTP GROUP HAS MADE MORE THAN `45.02 CRORES TO THE VENDORS OF LAND WHICH IS OVER AND ABOVE THE SAL E CONSIDERATION AND THESE PAYMENTS HAVE BEEN MADE MUCH AFTER THE EXECUT ION OF SALE DEED. DURING THE YEAR UNDER CONSIDERATION, THE ASS ESSEE COMPANY HAS MADE FOLLOWING ADDITIONAL PAYMENT:- NAME OF THE PAYEE AMOUNT(RS.) DATE OF PAYMENT EVI DENCE RANJEET SINGH 30,38,438 01-08-2007 AFFIDAVIT AMAR CHAND 30,38,438 06-08-2007 AFFIDAVIT BALJEET SINGH 20,27,813 11-08-2007 AFFIDAVIT SATYAPAL 10,13,906 01-08-2007 AFFIDAVIT KULDEEP 10,13,906 06-08-2007 AFFIDAVIT TOTAL 1,01,32,501 ITA-1674/D/2013 & 1765/D/2013 6 8. THE ASSESSING OFFICER, AFTER CONSIDERING THE ASS ESSEES EXPLANATION, DISALLOWED THE PAYMENT OF `1,01,32,501 /- ON THE GROUND THAT THERE IS NO BASIS FOR MAKING OF ADDITIONAL PAY MENT AND ADDITIONAL PAYMENT IS NOT TO BE ALLOWED UNDER THE SPECIFIC PRO VISIONS OF SECTION 37(1). HE OPINED THAT THE ADDITIONAL PAYMENTS ARE IN CLEAR VIOLATIONS AND CONTRAVENTIONS TO THE LAW AND RULES AND REGULAT IONS FOR PAYMENT OF STAMP DUTY. THE CIT(A) PARTLY ACCEPTED THE ASSESSE ES CONTENTION AND CONCLUDED AS UNDER:- IN VIEW OF THE ABOVE ADDITIONAL PAYMENT MADE TO TH E OWNER OF THE LAND OR TO HIS BROTHER, FATHER SONS & THEIR SPOUSES WHO HAVE GOT SOME LEGAL CLAIM OVER SUCH LAN D BY WAY OF ACCOUNT PAYEE CHEQUE IS HEREBY ALLOWED AS AN EXPENSE U/S 37 AND ADDITIONAL PAYMENT MADE TO OTHERS PAYMENTS ARE NOT SUPPORTED BY ANY LEGAL RIGH T OVER THE LAND AND SIMILARLY PAYMENT MADE IN CASH TO THE OWNER OF LAND IS CONFIRMED AS, THERE ARE INSTAN CES OF NOT CONFORMING THE RECEIPT BY FEW SELLER AS STAT ED SUPRA. THEREFORE, THE GROUND IS PARTLY ALLOWED. 9. THE REVENUE, AGGRIEVED WITH THE ORDER OF THE CIT (A), IS IN APPEAL BEFORE US VIDE GROUND NO.2. HERE AGAIN, THE REVENU ES GROUND OF APPEAL IS MISCONCEIVED BECAUSE THE CIT(A) HAS NOT D ELETED THE ENTIRE ADDITION OF `1,01,32,501/- BUT HAS PARTLY DELETED T HE ADDITION I.E. IN RESPECT OF PAYMENT MADE TO OWNER OF THE LAND OR TO HIS NEAR RELATIVES VIZ., BROTHER, FATHER, SONS AND THEIR SPOUSES WHO M AY HAVE SOME LEGAL CLAIM OVER SUCH LAND. HE HAD SUSTAINED THE DISALLO WANCE IN RESPECT OF PAYMENT MADE TO OTHERS I.E., WHO ARE NOT THE LAND O WNERS OR CLOSE RELATIVES. THE ASSESSEE IS ALSO AGGRIEVED ON THIS POINT AND HAS RAISED GROUND NOS.4, 4.1 AND 4.2 IN ITS APPEAL WHICH READ AS UNDER:- 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN NOT ACCEPTING THE APPELLANTS CONTENTION THAT ADDITIONAL PAYMENTS HAV ING NOT BEEN CLAIMED AS DEDUCTION BY APPELLANT, NO DISALLOWANCE COULD HAVE BEEN MADE IN THE HANDS OF T HE APPELLANT. ITA-1674/D/2013 & 1765/D/2013 7 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 L AND 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. 10. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITT ED BY THE LEARNED COUNSEL THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT DATED 22.08.2014 IN THE CASE OF SI STER CONCERN I.E. M/S WESTLAND DEVELOPERS PVT.LTD. VIDE ITA NO.1752/DEL/2 013 IN WHICH THE ITAT DELETED THE ADDITION ON THE GROUND THAT WHEN N O EXPENDITURE IS CLAIMED BY THE ASSESSEE, THERE CANNOT BE ANY QUESTI ON OF DISALLOWANCE OF CERTAIN SUM. 11. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE SIDES. SO FAR AS THE LEGAL PRINCIPLE IS CONCERNED, WE AGRE E WITH THE LEGAL PROPOSITION MADE BY THE LEARNED COUNSEL THAT WHEN N O EXPENDITURE IS CLAIMED BY THE ASSESSEE, THE QUESTION OF DISALLOWIN G THE SAME BY THE ASSESSING OFFICER DOES NOT ARISE. IT WAS EXPLAINED BY THE LEARNED COUNSEL THAT THE ASSESSEE WAS PURCHASING THE LAND F OR AND ON BEHALF OF ANOTHER COMPANY OF BPTP GROUP VIZ., M/S COUNTRYWIDE PROMOTERS PVT.LTD. AND WHATEVER PAYMENT IS MADE BY THE ASSESS EE TO LAND OWNERS OR THEIR RELATIVES FOR PURCHASE OF LAND WAS DEBITED BY THE ASSESSEE TO THE ACCOUNT OF CWPPL AND THE PAYMENT FO R PURCHASE OF LAND WHETHER AS PER STAMP DUTY OR ADDITIONAL PAYMEN T HAS NOT BEEN CLAIMED AS AN EXPENDITURE BY THE ASSESSEE. WE FIND THAT ON THIS FACTUAL ASPECT, THERE IS NEITHER ANY FINDING BY THE CIT(A) NOR BY THE ASSESSING OFFICER. THE ITAT IN THE CASE OF M/S WES TLAND DEVELOPERS PVT.LTD. (SUPRA) HAS ALSO ACCEPTED THE PRINCIPLE TH AT WHEN THE EXPENDITURE IS NOT CLAIMED BY THE ASSESSEE, THE SAM E CANNOT BE DISALLOWED. IN FACT, THERE CANNOT BE ANY DISPUTE T O THE SAID LEGAL PROPOSITION. HOWEVER, THE QUESTION STILL REMAINS W HETHER SUCH PAYMENT I.E. ADDITIONAL PAYMENT MADE BY THE ASSESSE E TO LAND OWNERS ITA-1674/D/2013 & 1765/D/2013 8 OR THEIR RELATIVES IS CLAIMED BY THE ASSESSEE AS A DEDUCTION OR NOT. WE, THEREFORE, SET ASIDE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO VERIFY WHETHER THE ASSESSEE HAS CLAIM ED THE PAYMENT OF `1,01,32,501/- AS AN EXPENDITURE WHILE COMPUTING IT S BUSINESS INCOME. IF NO DEDUCTION IS CLAIMED, THEN THE QUESTION OF AN Y DISALLOWANCE WOULD NOT ARISE. IF THE DEDUCTION IS CLAIMED, THEN THE A SSESSING OFFICER WOULD WORK OUT THE DISALLOWANCE AS DIRECTED BY THE CIT(A) . ACCORDINGLY, GROUND NO.2 OF THE REVENUES APPEAL IS REJECTED AND GROUND NOS.4, 4.1 & 4.2 OF THE ASSESSEES APPEAL ARE DEEMED TO BE ALL OWED FOR STATISTICAL PURPOSES. ITA NO.1765/DEL/2013 ASSESSEES APPEAL :- 12. BY WAY OF GROUND NO.1, THE ASSESSEE HAS CONTEND ED THE VALIDITY OF THE INITIATION OF PROCEEDINGS UNDER SECTION 153 OF THE ACT. HOWEVER, AT THE TIME OF HEARING BEFORE US, NO SPECIFIC ARGUM ENTS WERE RAISED IN SUPPORT OF THIS GROUND. ACCORDINGLY, GROUND NO.1 I S TREATED AS NOT PRESSED. 13. GROUND NO.2 IS ALSO IN SUPPORT OF ABOVE GROUND NO.1. ACCORDINGLY, THE SAME IS ALSO REJECTED. 14. GROUND NO.3 & 3.1 READ AS UNDER:- 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN HOLDING TO QUOTE, T HAT SEIZED DOCUMENTS DEFINITELY PROVE THAT INTEREST IS PAID ON PDC DESPITE- I. THAT THE SEIZED RECORD ON THE BASIS OF WHICH ABO VE FINDING WAS GIVEN, EVEN ACCORDING TO HIS OWN FINDIN G 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). ITA-1674/D/2013 & 1765/D/2013 9 3.1 THAT THE FINDING OF THE CIT(A) IS BASED ON MERE SURMISES AND CONJECTURES WITHOUT PROOF AND CORROBORATION BY INDEPENDENT EVIDENCE. 15. AT THE TIME OF HEARING BEFORE US, THE LIMITED A RGUMENT RAISED BY THE ASSESSEE IN THIS REGARD WAS THAT DURING THE YEA R UNDER CONSIDERATION, NO PDC WAS ISSUED BY THE ASSESSEE AN D THEREFORE, NO INTEREST IS CHARGEABLE. HOWEVER, WHILE DECIDING TH E REVENUES APPEAL, WE HAVE ALREADY UPHELD THE ORDER OF LEARNED CIT(A) IN THIS REGARD WHEREIN HE HAS DIRECTED TO RECOMPUTE THE INTEREST O N PDCS ONLY IF THERE IS EITHER EXTENSION OF PDCS DURING THE YEAR U NDER CONSIDERATION OR SIX MONTHS HAVE ELAPSED SINCE THE ISSUE OF PDCS. IF THERE IS NO PDCS DURING THE YEAR UNDER CONSIDERATION, NATURALLY NO I NTEREST WOULD BE WORKED OUT THEREON. THEREFORE, NO FURTHER DIRECTIO N/RELIEF IS REQUIRED VIDE GROUND NO.3 & 3.1 OF THE ASSESSEES APPEAL. 16. GROUND NOS.4, 4.1 & 4.2 OF THE ASSESSEES APPEA L HAVE ALREADY BEEN ADJUDICATED BY US WHILE ADJUDICATING GROUND NO .2 OF THE REVENUES APPEAL. 17. GROUND NOS.5 & 6 ARE OF GENERAL NATURE AND REQU IRE NO ADJUDICATION. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS DEEMED TO BE PARTLY ALLOW ED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2014. SD/- SD/- (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG (CHANDRA MOHAN GARG ) )) ) (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL (G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 31.10.2014 VK. ITA-1674/D/2013 & 1765/D/2013 10 COPY FORWARDED TO: - 1. REVENUE : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -23, NEW DELHI. 23, NEW DELHI. 23, NEW DELHI. 23, NEW DELHI. 2. ASSESSEE : M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) M/S IAG PROMOTER & DEVELOPERS (P) LTD., LTD., LTD., LTD., M MM M- -- -11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, 11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR