DCIT, Bhubaneswar V. M/s Srusti Estates Pvt. Ltd, Bhubaneswar

ITA 219/CTK/2013

• Counselvise Citation: 21922114 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-04-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 05-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K AJAY KUMAR
• Assessee Lawyers: G NAIK; R KAR
• Keywords: Business income; Document seized; Wrong claim; Documents seized
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH, CUTTACK BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 219/CTK/2013 : (ASST. YEAR : 2005 - 06) DY. COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), BHUBANESWAR. (APPELLANT) VS. M/S. SRUSTI ESTATES P. LTD., PLOT NO. 339 (P), BMC - MOUSIMA MAIN ROAD, GOUTAM NAGAR, BHUBANESWAR (RESPONDENT) PAN : AAECS5765R CO NO. 30/CTK/2013 (IN ITA NO. 219/CTK/2013) : (ASST. YEAR : 2005 - 06) M/S. SRUSTI ESTATES P. LTD., PLOT NO. 339 (P), BMC - MOUSIMA MAIN ROAD, GOUTAM NAGAR, BHUBANESWAR (CROSS OBJECTOR) PAN : AAECS5765R VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 1(2), BHUBANESWAR. (RESPONDENT) ASSESSEE BY : G. NAIK & R. KAR REVENUE BY : K. AJAY KUMAR, DR DATE OF HEARING : 2 2 /04/2014 DATE OF PRONOUNCEMENT : 30 /05/2014 O R D E R PER P.K. BANSAL : 1. THIS APPEAL AS WELL AS THE CROSS OBJECTION HAVE BEEN FILED AGAINST THE ORDER OF CIT(A) DT. 23.1.2013 FOR THE A.Y. 2005 - 06. 2. THE ASSESSEE DID NOT PRESS THE CROSS OBJECTION, THEREFORE, THE SAME STANDS DISMISSED AS NOT PRESSED. 2 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) 3. IN THE APPEAL FILED BY THE REVENUE, THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING RS.8, 0 5, 000/ - OUT OF THE ADDITION MADE BY THE A O ON ACCOUNT OF UNDISCLOSED INVESTMENT IN LAND U/S.69 OF THE ACT RELYING ON THE CONTENTION OF THE ASSESSEE WITHOUT ANY MATERIAL EVIDENCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. C I T(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.4,05,000 / - MADE BY THE A O ON ACCOUNT OF SALE OF LAND RELYING ON THE CONTENTION OF THE ASSESSEE WITHOUT ANY MATERIAL EV IDENCE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. C I T(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.12,00,000 / - MADE BY THE A O ON ACCOUNT OF SUPPRESSION INVESTMENT RELYING ON THE CONTENTION OF THE ASSESSEE WITHOUT ANY MATERIAL EVI DENCE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. C I T(A) IS NOT JUSTIFIED IN ALLOWING RELIEF OF RS.8,93,810 / - ON ACCOUNT OF ADDITION MADE BY THE A O TOWARDS SUPPRESSION OF SALES IGNORING THE MATERIAL EVIDENCE SEIZED DURING THE SEARCH. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING RELIEF OF RS.26,84,000 / - ON ACCOUNT OF ADDITION MADE BY THE AO TOWARDS INFLATION IN PURCHASE OF LAND RELYING ON THE CONTENTION OF THE ASSESSEE WITHOUT ANY MAT ERIAL EVIDENCE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING RELIEF OF RS.6,60,250 / - ON ACCOUNT OF ADDITION MADE BY THE AO TOWARDS BOGUS LAND DEALING EXPENSES WHEN THE ASSESSEE COULD NOT PRODUCE ANY EVI DENCE TO SUBSTANTIATE THE CLAIM. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ACCEPTING THE CONTENTIONS OF THE ASSESSEE AND NOT ACCEPTING THE FINDINGS OF THE A O ON THE DISPUTED ISSUES IN VIOLATION OF RULE 46A . 4. GROUND NO. 1 RELATES TO THE DELETION OF THE ADDITION OF RS. 8,05,000/ - MADE BY THE AO AS UNDISCLOSED INVESTMENT U/S 69. THE FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT AS PER THE SALE AGREEMENT DT. 31.12.2004 THE ASSESSEE 3 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) HAS PURCHASED LA ND UNIT NO. 11, SAH I D NAGAR, KHATA NO. 1032/137, PLOT 1676 , AREA - A C. 0.05 4 DEC IMALS , G . A . PLOT NO. A / 227 FOR A CONSIDERATION OF RS.19,00,000/ - BUT THE SALE DEED NO. 520 DT. 15.1.2005 FOR THE SAID PROPERTY WAS REGISTERED FOR RS. 8,05,000/ - WHICH WAS ALSO NO T DISCLOSED IN THE BOOKS OF ACCOUNTS. THEREFORE, HE MADE ADDITION OF RS.19,00,000/ - AS UNDISCLOSED INCOME U/S 69. 4.1 THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). CIT(A) AFTER CONSIDERING THE REMAND REPORT OF THE AO DT. 24.7.2012 IN WHICH THE AO HAS C ONFIRMED THAT THE ASSESSEE PAID AN AMOUNT OF RS.8,05,000/ - TO SMT. PADMA ACHARI WHICH IS MENTIONED IN THE MONEY RECEIPT (SEIZED DOCUMENT) AS AN ADVANCE TO THE LAND OWNER, REDUCED THE ADDITION TO RS. 10,95,000/ - BY HOLDING AS UNDER : 3.3 I HAVE CAREFULLY CONSIDERED THE MATTER. THERE IS NO DISPUTE THAT THERE WAS AN AGREEMENT TO BUY THE PROPERTY FOR AN AMOUNT OF RS. 19 LACS. THE APPELLANT HAS SUBMITTED THAT THE LAND IN QUESTION WAS DISPUTED ONE FOR WHICH THE BALANCE CONSIDERATION OF RS.10,95,000/ - HAS NOT BEEN PAID TO THE SELLER OF THE LAND. HOWEVER, NO DETAILS REGARDING ALLEGED DISPUTE HAS BEEN GIVEN BEFORE THE AO AND NO SUCH DETAILS HAVE BEEN GIVEN DURING APPEAL PROCEEDINGS. THE FACT THAT THE LAND WAS SUBSEQUENTLY SOLD FOR AN AMOUNT OF RS.10 LACS AS PER THE REGISTERED DOCUMENT IS NOT MATERIAL TO THE ISSUE. HOWEVER, THE APPELLANT HAS MADE PAYMENTS AS PER BOOKS OF ACCOUNTS AMOUNTING TO RS. 8,05,000/ - . ACCORDINGLY, THE INVESTMENT UNDISCLOSED IS RS.10,95,000/ - (RS.19,00,000 - RS. 8,05,000). ACCORDINGLY, T HE ADDITION OF RS. 19 LACS IS RESTRICTED TO RS. 10,95,000/ - . 4.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. THE CIT(A) HAS GIVEN A FINDING OF FACT THAT THE PAYMENT OF RS. 8,05,000/ - WAS MADE BY THE ASSESSEE AS PER THE BOOKS O F ACCOUNTS. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. DR EXCEPT RELYING ON THE ORDER OF THE AO SO THAT THE FINDING GIVEN BY THE CIT(A) MAY BE PROVED TO BE INCORRECT. UNDER THESE FACTS AND CIRCUMSTANCES WE DO NOT HAVE ANY OTHE R 4 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) ALTERNATIVE EXCEPT TO CONFIRM THE FINDING OF CIT(A). THUS, GROUND NO. 1 STANDS DISMISSED. 5. GROUND NO. 2 RELATES TO THE DELETION OF THE ADDITION OF RS. 4,05,000/ - . THE FACTS RELATING TO THIS GROUND RE THAT THE LAND MENTIONED IN GROUND NO. 1 WAS LATER SOLD OFF ON 5.1.2005 TO SMT. SMRUTI SUDHA NAYAK FOR A SUM OF RS. 4,05,000/ - . THE AO, THEREFORE, ADDED THE SUM IN THE INCOME OF THE ASSESSEE AS ACCORDING TO HIM, THIS AMOUNT WAS NOT APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. WHEN THE MATTER WENT BEFORE THE CIT(A), CIT(A) DELETED THE ADDITION BY OBSERVING AS UNDER : 4.2 I HAVE CONSIDERED THE MATTER CAREFULLY. THE APPELLANT HAS EXPLAINED THE CIRCUMSTANCES OF SALE FOR RS. 4,05,000/ - . THE APPELLANT HAS OFFERED INCOME FOR THE AY 2008 - 09 IN RESPECT OF SALE OF THE SAID PROPERTY FOR RS. 10 LACS. IN ANY CASE, THE VALUE OF PROPERTY HAS BEEN TAKEN AT RS. 19 LACS FOR WHICH FURTHER SALE FOR RS. 4,05,000/ - RESULTS IN CAPITAL LOSS. SINCE UNDISCLOSED INVESTMENT IN THE SAID PROPERTY HAS BEEN ASSESSED, NO FUR THER ADDITION IS CALLED FOR ON ACCOUNT OF SALE. ACCORDINGLY, THE ADDITION OF RS. 4,05,000/ - IS DELETED. 5.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. THE LD. DR SIMPLY RELIED ON THE ORDER OF THE AO. IN OUR OPINION, NO INTE RFERENCE IS CALLED FOR IN THE ORDER OF THE CIT(A). CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS. 4,05,000/ - AS THE VALUE OF THE PROPERTY HAS ALREADY BEEN TAKEN TO BE RS. 19,00,000/ - AND TO THE EXTENT THE VALUE OF THE PROPERTY WAS NOT DISCLOSED, HAS ALREA DY BEEN ADDED. THE ADDITION HAS BEEN CONFIRMED BY THE CIT(A). THE ASSESSEE IS NOT IN APPEAL BEFORE US. THEREFORE, WE CONFIRM THE ORDER OF CIT(A). THUS, THIS GROUND ALSO STANDS DISMISSED. 6. GROUND NO. 3 RELATES TO THE DELETION OF THE ADDITION OF RS. 1 2,00,000/ - . THE FACTS RELATING TO THIS ADDITION ARE THAT TWO DEMAND DRAFTS OF RS. 6 LACS EACH TOTALLING TO RS. 12 LACS WERE TAKEN FROM THE BANK ACCOUNT OF THE ASSESSEE FOR THE PURCHASE OF PROPERTY AT A/25, ASHOK NAGAR BY M/S. SAMBIT RESORTS PVT. LTD. 5 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) THE AO ON THE BASIS OF THE SEIZED DOCUMENT SN - 01 (PG. 104) NOTED TOTAL PAYMENT ON DIFFERENT DATES AMOUNTING TO RS. 28,20,000/ - TO DIMPLE AGARWAL, SARADA DEVI AGARWAL , DURGESH KUMAR. IT WAS NOTED THAT THE PAYMENT TO DURGESH KUMAR WAS RS. 5 LACS. A SUM OF RS. 6 LACS EACH WERE PAID TO DIMPLE AGARWAL AND SMT. SARADA DEVI AGARWAL ON 14.2.2005 VIDE PAY ORDER AND DD AND THESE PAYMENTS EVEN THOUGH DISCLOSED IN THE BOOKS OF THE ASSESSEE AND FORM PART OF THE CONSIDERATION OF THE PROPERTY BEARING NO. A/25, ASHOK NAG AR BUT THE AO TOOK THEM AS SUPPRESSED INVESTMENT. WHEN THE MATTER WENT BEFORE CIT(A), CIT(A) NOTED THAT THE PAYMENT OF RS. 12 LACS TO SMT. DIMPLE AGARWAL AND SMT. SARADA DEVI AGARWAL WERE MADE THROUGH BANK ACCOUNT S OF THE ASSESSEE. AS THE BANK ACCOUNT S O F THE ASSESSEE WERE DISCLOSED ONE, THEREFORE, HE DELETED THE SAID ADDITION. 6.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME. IN THE ABSENCE OF ANY COGENT MATERIAL OR EVIDENCE BEING BROUGHT TO OUR KNOWLEDGE BY THE LD. DR WHICH MAY PROVE THAT TH E S E BANK ACCOUNT S WERE NOT DISCLOSED , WE DISMISS THIS GROUND AND CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE. 7. GROUND NO. 4 RELATES TO THE ADDITION MADE ON ACCOUNT OF SUPPRESSION OF SALES. THE BRIEF FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAS SHOWN SALES OF FLATS/UNITS OF SRUSTI VILLA PHASE - 3 AT RS.1,78,95,500/ - AND THE COST OF THE CO NSTRUCTION AT RS. 1,77,43,162/ - . SALE VALUE AS PER THE SEIZED DOCUMENT MARKED SR - 13 OF 14 DUPLEXES IS RECORDED AT RS.2,02,22,810/ - . THEREFORE, AFTER CALLING FOR EXPLANATION OF THE ASSESSEE THE AO ADDED THE SUM OF RS. 23,27,310/ - . THE ASSESSEE WENT IN AP PEAL BEFORE THE CIT(A). BEFORE CIT(A) THE ASSESSEE REITERATED THE SUBMISSION THAT THE ASSESSEE RECEIVED ACTUAL SALE CONSIDERATION FROM 13 CUSTOMERS AGAINST THE ESTIMATE SALE VALUE AMOUNTING TO RS.1,78,95,500/ - . THE ACTUAL SALE CONSIDERATION WAS LOWER. T HUS, THERE WAS A DIFFERENCE. THE AO DID NOT GIVE 6 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) OPPORTUNITY TO CROSS - EXAMINE SHRI MAHESWAR LENKA TO PROVE THE FACT. IT WAS STATED THAT SHRI LENKA IN REPLY TO QUESTION NO. 4 ADMITTED THAT HE HAS PAID RS.15,40,000/ - WHEREAS THE AO HAS TAKEN THE SALE CONSI DERATION AT RS.16,15,000/ - . SIMILARLY, IN OTHER CASE THE ASSESSEE HAS FILED CONFIRMATION LETTER WHICH WAS IGNORED BY THE AO. CIT(A) REDUCED THE ADDITION TO RS.14,33,500/ - AFTER ANALYSING THE FACTS BY OBSERVING AS UNDER : 6.2 I HAVE CAREFULLY CONSIDERED THE RELEVANT MATERIALS. THE APPELLANT HAS S HOWN SALES FOR AN AMOUNT OF RS .1 ,78,95,500/ - IN THE P&L ACCOUNT. HOWEVER, AS PER THE SEIZED DOCUMENT IDENTIFIED AS SR - 13, THE TOTAL AMOUNT ACTUALLY RECEIVED (INCLUDING THE REGISTRATION CHARGES IN SOME CASES) IS FOR AN AMOUNT OF RS.1,92,72,000/ - . APART FROM THE ACTUAL RECEIPT OF RS.1,92,72,000/ - THE SAID SEIZED LEDGER ALSO CONTAINS COST AND ADDITIONAL COST TOTALING TO RS.2,04,73,310/ - WHICH HAS BEEN CONSIDERED BY THE AO AS TOTAL SALES RECORDED (AO HAS ACTUALLY TAK EN THE FIGURE OF RS.2,02,22,810/ - ) AND THE DIFFERENCE OVER SALES SHOWN IN THE P&L ACCOUNT HAS BEEN ADDED AS SUPPRESSED SALES. THE SALES SHOWN AS PER P&L ACCOUNT, ACTUAL RECEIPT AND ESTIMATED STANDARD SALE PRICE (COST AND ADDITIONAL COST) IS AS UNDER: SL. NO. NAME OF CUSTOMER HOUSE NO. SALE AS PER PROFIT & LOSS A/C. RECEIPT AS PER SEIZED DOCUMENT SR - 13 DIFFERENCE ESTIMATED STANDARD SALE PRICE AS MENTIONED IN SR - 13 1 AJAY KU DAS 1 1,637,500 1,637,500 - 1,644,225 2 PRASANT KU DAS 2 1,295,000 1,295,000 - 1,325,750 3 NIRANJAN MISHRA 3 1,280,000 1,280,000 - 1,299,000 4 MAHESWAR LENKA 4 1,390,000 1,615,000 225 , 000 1,615,000 5 AJAYA MISHRA/KAILASH CHANDRA MISHRA 5 750,000 1,400,000 650,000 1,650,000 6 ABHIJIT PANI 6 1,214,500 1,230,000 15,500 1,254,500 7 BIJAYA MANGARAJ 7 1,740,000 1,740,000 - 1,749,400 8 RAJENDRA MISHRA 8 1,515,000 1,515,000 - 1,561,850 9 MANASI SATPATHY 9 750,000 1,320,000 570,000 1,320,500 10 ABHAYA ROY 10 1,488,000 1,488,500 - 1,489,250 11 BRAHMADEO PRASAD 11, 12 2,685,000 2,685,000 - 2,722,500 12 PRAFULLA MISHRA 13 1,316,000 1,316,000 - 1,341,335 13 RAMESH SRICHANDAN (NAYAK) 14 834,000 750,000 MINUS FIGURE, IGNORED 1,500,000 TOTAL 17,895,500 19,272,000 14,60,500 20,473,310 7 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) FROM THE ABOVE TABLE AND THE SEIZED DOCUMENTS, IT IS CLEAR THAT THE APPELLANT HAS NOT RECEIVED THE ESTIMATED SALE PRICE, OTHERWISE CALLED COST PLUS ADDITIONAL COST TO THE BUYERS. ACCORDINGLY, WHAT IS ACTUALLY RECEIVED AS SALES HAS TO BE TAXED WHICH IS DIFFERENT AND HIGHER THAN THE AMO UNTS SHOWN IN THE P&L ACCOUNT. THE APPELLANT MAY HAVE ESTIMATED CERTAIN COST TO THE BUYER BUT THE ACTUAL PAYMENT MAY BE DIFFERENT AND SUCH ACTUAL PAYMENT BY THE BUYER IS THE SALES RECEIPT FOR THE APPELLANT. IN VIEW OF THE SAME, THE TOTAL RECEIPTS ON ACCOUN T OF SALE OF FLATS INCLUDING REGISTRATION CHARGES IN SOME OF THE CASES HAS TO BE TAKEN AT RS.1,92,72,000/ - INSTEAD OF RS.2,02,22,810/ - TAKEN BY THE A O . AS SHOWN IN THE ABOVE TABLE, THE DIFFERENCE BETWEEN THE 4TH COLUMN AND 5TH COLUMN COMES TO RS . 14,60,500 / - WHICH IS THE AMOUNT NOT SHOWN BY THE APPELLANT IN THE BOOKS OF ACCOUNTS. HOWEVER, IN THE CASE OF AJAY KUMAR MISHRA/KAILASH CHANDRA MISHRA, THE TOTAL INCOME TAKEN AS PER THE LEDGER IS RS.14,00,000 / - INCLUDING REGISTRATION EXPENSES OF RS.27,000/ - AND THE BALANCE IN THE SAID LEDGER HAS BEEN SHOWN AT RS.13,73,000/ - MEANING THEREBY THE SALES FOR THE APPELLANT IS RS.13,73,000/ - . ACCORDINGLY, THE DIFFERENCE OF SALES SHOWN IN THE BOOKS OF ACCOUNTS AND ACTUALLY RECEIVED COMES TO RS.14,33,500/ - (14,60,500 - 27,000 ). THE APPELLANTS SUBMISSIONS THAT THE MONEY WAS REFUNDED BACK TO SOME OF THE BUYERS IS NOT BELIEVABLE AND WITHOUT ANY EVIDENCE. ACCORDINGLY, THE APPELLANT HAS SUPPRESSED SALES TO THE EXTENT OF RS.14,33,500/ - , HENCE, THE ADDITION OF RS.23,27,310/ - IS REDU CED TO RS.14,33,500/ - . 7.1 THE LD. DR BEFORE US EVEN THOUGH RELIED ON THE ORDER OF THE AO BUT DID NOT DISPUTE THE FACT THAT THE AMOUNT ACTUALLY RECEIVED BY THE ASSESSEE INCLUDES REGISTRATION CHARGES AND IF THE REGISTRATION CHARGES ARE REDUCED, THE SALE CONSIDERATION IS LESS AND IN SOME CASES MONEY HAS ACTUALLY BEEN REFUNDED BY THE ASSESSEE TO THE EXTENT IT WAS RECEIVED IN EXCESS. IN VIEW OF THIS FACT, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). THUS, THI S GROUND ALSO STANDS DISMISSED. 8. GROUND NO. 5 RELATES TO THE DELETION OF THE ADDITION OF RS. 26,84,000/ - . THE BRIEF FACTS OF THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE HAS CL AIMED RS. 31,59,000/ - ON ACCOUNT OF PURCHASE OF LAND FOR SRUSTI VILLA PHASE - 3 PROJECT. THIS LAND WAS PURCHASED BY THE ASSESSEE FROM SHRI RAMESH SRICHANDAN VIDE SALE DEED NO. 7720 OF 2001 AND PUNI DAS VIDE SALE DEED NO. 711 OF 2002. THE AO ASKED FOR THE P RODUCTION OF THE SALE DEEDS. THE ASSESSEE SUBMITTED THAT THE SALE DEED WAS EXECUTED FOR RS. 96,000/ - WITH SHRI RAMESH 8 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) SRICHANDAN AND RS. 34,000/ - WITH SMT. PUNI DAS BUT THE ACTUAL PAYMENT MADE WAS RS. 30,39,000/ - AND RS. 1,20,000/ - AS PER THE BOOKS OF ACCO UNTS OF THE ASSESSEE. THE AO NOTED THAT IN THE BOOKS THE ASSESSEE HAS SHOWN PURCHASE ONLY AT RS. 1,20,000/ - . THEREFORE, HE DISALLOWED THE SUM OF RS. 30,63,000/ - AS BOGUS CLAIM OF EXPENDITURE. THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). BEFORE CIT(A) THE ASSESSEE CONTENDED THAT AS PER THE BOOKS OF ACCOUNTS, THE ASSESSEE HAS MADE THE PAYMENT OF RS.31,59,000/ - , THE AGREEMENT TO SELL ENTERED INTO BY THE ASSESSEE, WHICH WAS DULY REGISTERED, ALSO REFLECTS THE SAID CONSIDERATION. THEREFORE, IT WAS CONTENDED TH AT SINCE THE SAID PAYMENT WAS DULY MADE OUT OF THE BOOKS, NO ADDITION IS TO BE MADE. CIT(A) NOTED THAT THE ASSESSEE MADE PAYMENT OF RS.18,50,000/ - THROUGH CHEQUE TO THE SELLER OF THE PROPERTY, SHRI RAMESH SRICHANDAN THROUGH CANARA BANK (CA NO. 183) DURING DECEMBER, 2001 AND AS PER BANK DETAILS, DD FOR RS. 10 LACS WAS TAKEN ON 11.12.2001 THROUGH CHEQUE NO. 787571 FOR RS. 10,01,000/ - IN FAVOUR OF SHRI RAMESH NAYAK AND CHEQUE NO. 787573 FOR RS. 5 LACS ISSUED IN FAVOUR OF SHRI R.C. SRICHANDAN DEBITED ON 14.12.2001 AND CHEQUE NO. 787572 FOR SUM OF RS.3,50,000/ - IN FAVOUR RAMESH NAYAK DEBITED ON 21.12.2001. THUS, A SUM OF RS. 18,50,000/ - WAS PAID THROUGH THE BANKING CHANNEL. FURTHER, THE SELLER OF THE LAND IS ALSO BUYER OF HOUSE NO. 14 FROM TH E ASSESSEE, COST OF WHICH WAS RS.8,34,000/ - AS PER THE SEIZED LEDGER. THIS PAYMENT WAS ALSO ADJUSTED AGAINST THE PAYMENT FOR THE COST OF THE LAND. ACCORDINGLY, CIT(A) REDUCED THE ADDITION BY RS.8,34,000/ - AND RS. 18,50,000/ - . THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION OF RS. 8,34,000/ - AND RS. 18,50,000/ - TOTALLING TO RS.26,84,000/ - . 8.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE NOTED THAT THE CIT(A) HAS GIVEN A FINDING OF FACT AND HAS DULY VERIFIED THE FACT THAT THE PAYMENT OF RS.18,50,000/ - WAS MADE BY THE ASSESSEE THROUGH BANKING CHANNEL AND WAS DULY RECORDED IN HIS BOOKS OF ACCOUNTS. WE NOTED THAT WHILE GIVING THE APPEAL 9 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) EFFECT IN THE ORDER PASSED U/S 251 THE AO HAS DULY VERIFIED THAT THE SUM OF RS.18,50,000/ - WAS PAID BY THE ASSESSEE OUT OF THE BOOKS OF ACCOUNTS. SIMILARLY, THE SUM OF RS.8,34,000/ - WAS ADJUSTED AGAINST THE SALE OF HOUSE NO. 14 AND THIS FACT IS AVAILABLE IN THE SEIZED LEDGER. THE LD. DR E VEN THOUGH RELIED ON THE ORDER OF THE AO BUT DID NOT DISPUTE THE FINDING OF THE FACT ARRIVED AT BY CIT(A). WE, THEREFORE, DO NOT HAVE ANY OTHER ALTERNATIVE EXCEPT TO DISMISS THE GROUND TAKEN BY THE REVENUE. THUS, THIS GROUND ALSO STANDS DISMISSED. 9. GR OUND NO. 6 RELATES TO THE DELETION OF THE ADDITION OF RS.6,60,250/ - . THE FACTS RELATING TO THIS GROUND ARE THAT THE AO NOTED THAT THE ASSESSEE CLAIMED COMMISSION EARNED FOR THE LAND DEALING AT RS.3,02,870/ - AGAINST WHICH LAND DEVELOPMENT EXPENSES OF RS.2, 48,740/ - WAS CLAIMED. THE ASSESSEE ALSO CLAIMED EXPENSES TOTALLING TO RS.6,50,250/ - ON ACCOUNT OF COST OF LAND TRANSFERRED. IN THE ABSENCE OF ANY EVIDENCE REGARDING THE EXPENDITURE CLAIMED ON ACCOUNT OF LAND DEALING, THE AO DISALLOWED THE SUM OF RS.9,08, 990/ - (RS.6,60,250 + RS.2,48,740). THE ASSESSEE WENT IN APPEAL BEFORE CIT(A). CIT(A) RESTRICTED THE DISALLOWANCE TO RS.2,48,740/ - RELATING TO THE EXPENSES INCURRED BY THE ASSESSEE FOR LAND DEVELOPMENT. 9.1 THE LD. DR RELIED ON THE ORDER OF THE AO WHIL E THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A). 9.2 AFTER HEARING THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERING THE SAME, WE NOTED THAT IN THE ABSENCE OF ANY EVIDENCE BEING SUBMITTED BY THE ASSESSEE, THE CIT(A) REDUCED THE DISALLOWANCE OF THE EXPENSES TO RS.2,48,740/ - . IN OTHER WORDS, THE WHOLE OF THE EXPENSES CLAIMED BY THE ASSESSEE TOWARDS THE LAND DEVELOPMENT EXPENSES WERE DISALLOWED. SO FAR AS THE OTHER EXPENSES OF RS.6,60,250/ - , THIS EXPENDITURE RELATES TO THE COST OF THE LAND TRANSFERRED. THE ASSESSEE HAS EARNED THE INCOME FROM COMMISSION. THIS IS NOT DENIED. THE 10 ITA NO. 219/CTK/2013 & CO NO. 30/CTK/2013 (ASST. YEAR : 2005 - 06) ASSESSEE IS BOUND TO INCUR THE COST FOR THE LAND WHICH IS BEING TRANSFERRED BY THE ASSESSEE. THIS FACT HAS ALSO NOT BEEN DISPUTED. UNDER THESE FACTS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF RS.6,60,250/ - MADE BY THE AO. THUS, THIS GROUND ALSO STANDS DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED AND THE CO FILED BY THE ASSESSEE ALSO STANDS DISMI SSED AS NOT PRESSED. 11. ORDER PRONOUNCED IN PURSUANCE OF RULE 34(4) OF ITAT RULES, 1963 BY PUTTING ON NOTICE BOARD OF THE BENCH AT CUTTACK ON 30 / 05 /201 4 . SD/ - (D.T.GARASIA) JUDICIAL MEMBER SD/ - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI DATED : 30 / 05 /201 4 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER