DCIT, Mohali V. M/s Aishani Developers Pvt. Ltd., Chandigarh

ITA 248/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2522 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 248/CHD/2014 ASSESSMENT YEAR: 2008-09 THE DCIT, VS M/S AISHANI DEVELOPERS P.LTD. , CIRCLE 6(1), SCF 79, 1 ST FLOOR, MOHALI. SECTOR 47-D, CHANDIGARH. PAN: AAGCA3229G & ITA NO. 174/CHD/2014 ASSESSMENT YEAR: 2008-09 M/S AISHANI DEVELOPERS P.LTD., VS THE DCIT, SCF 79, 1 ST FLOOR, CIRCLE 6(1), SECTOR 47-D, MOHALI. CHANDIGARH. PAN: AAGCA3229G (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI MANOJ MISHRA ASSESSEE BY : SHRI AJAY JAIN DATE OF HEARING : 22.12.2015 DATE OF PRONOUNCEMENT : 05.01.2016 O R D E R PER BHAVNESH SAINI,JM THE DEPARTMENTAL APPEAL AND APPEAL OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS) 2 CHANDIGARH DATED 30.12.2013 FOR ASSESSMENT YEAR 2008-09. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF AUTHORITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECORD. 3. BEFORE TAKING UP VARIOUS GROUNDS RAISED IN THE CROSS-APPEALS, IT WOULD BE RELEVANT TO DISCUSS THE FACTS OF THE CASE AS NOTED IN THE IMPUGNED ORDER. THE ASSESSEE COMPANY HAD PROCURED LAND ON BEHALF OF M/S INSCOL HEALTHCARE LTD. (HEREINAFTER REFERRED TO AS INSCOL) IN PURSUANCE TO MEMORANDUM OF UNDERSTANDING (MOU) DATED 11.07.2007 ). THE RELEVANT CLAUSE OF THE MOU BETWEEN FIRST PARTY I.E. INSCOL AND SECOND PARTY I. E. THE ASSESSEE ARE AS UNDER : '1. THAT THE FIRST PARTY AGREES TO THE PROPOSAL MOO TED BY THE SECOND PARTY THAT THEY WILL PROVIDE THE SAID LAND AT RATE OF RS.60 LAKHS PER ACRE AND THE AMOUNT WILL INCLUDE: THE COST OF LAND I.E. PAYMENT MADE TO LAND OWNERS STAMP DUTY AND REGISTRATION CHARGES DOCUMENT CHARGES/MISCELLANEOUS EXPENSES DEVELOPMENT CHARGES , CLU CHARGES & INCIDENTAL EXPENSES (@RSL5 LAKH PER ACRES) FORFEITURE AMOUNT COMMISSION / BROKERAGE FOR PROCUREMENT OF LAND SERVICE CHARGES FOR GETTING PERMISSION @RS 75000 / - PER ACRES. 2. THAT THE SECOND PARTY WILL ESTABLISH THE BOUNDAR Y ONCE THE AGREEMENT TO SELL HAS BEEN ENTERED INTO AN D WILL BEAR FULL RESPONSIBILITY TILL THE REGISTRATION AND CLU OF THE SAID LAND TAKES PLACE. 5. THAT THE FIRST PARTY SHALL PAY THE ST AMP DUTY/REGISTRATION EXPENSES/MISCELLANEOUS AND SAME SHALL BE DEDUCTED FROM THE AGREED PRICE MENTIONED I N THE CLAUSE L OR SALE CONSIDERATION. 3 6. THE FIRST PARTY SHALL NOT BE RESPONSIBLE FOR ADVANCES GIVEN FOR PURCHASING LAND ON BEHALF OF FIR ST PARTY IN CASE REGISTRATION OF LAND IS NOT DONE OR I N CASE OF FORFEITURE OF ADVANCES. THE AMOUNT OF ADVANCES FORFEITED SHALL BE BORNE BY THE SECOND PARTY OR DEDUCTED FROM THE AGREED SALE CONSIDERATION. 7. THAT IS FURTHER AGREED THAT THE SALE CONSIDERATION OF RS60 LAKHS PER ACRE INCLUDES THE CLU & EDC CHARGES @15 LAKHS PER ACRE & THE 2 ND PARTY SHALL BE RESPONSIBLE FOR TAKING CLU. ALL EXPENSES FOR GETTIN G PERMISSION &EDC CHARGES SHALL BE THE RESPONSIBILITY OF 2ND PARTY & IN CASE OF NON AVAILABILITY OF PERMISSI ON THEN THE 2ND PARTY SHALL REFUND @ RS 15 LAKHS PER ACRES AFTER DEDUCTING ACTUAL EXPENSES. THE ACTUAL EXPENSES SHALL BE ALLOWED ONLY AFTER PRODUCTION OF NECESSARY EVIDENCE. IN CASE OF REJECTION OF PERMISS ION NO SERVICES CHARGES SHALL BE PAID BY 1 ST PARTY TO 2ND PARTY. 8. THAT FIRST PARTY SHALL NOT INTERFERE IN PURCHASE PRICE PAID TO LAND OWNERS OR AMOUNT PAID AT THE TIM E OF REGISTRATION & ONLY ABIDE BY THE TERMS & CONDITION & CONSIDERATION MENTIONED IN CLAUSE 1 OF THIS MOU.' 4. IN PURSUANCE OF THE MOU, THE ASSESSEE COMPANY PURCHASED LAND FROM VARIOUS LAND OWNERS AND TRANSFERRED THE SAME TO INSCOL. THE ASSESSEE COMPA NY HAD SOLD LAND MEASURING 16.08 ACRES TO INSCOL @ RS. 60 LACS PER ACRE. INSCOL HAD CREDITED THE ASSESSEE'S ACCOUNT BY RS. 9,43,63,500/-AT THE TIME OF REGISTRA TION OF THE SAID LAND AND ALSO CREDITED RS. 6,86,500/- O N ACCOUNT OF COMMISSION/BROKERAGE ON PURCHASE OF LAND . THE ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN I N ITS RETURN OF INCOME. THE FOLLOWING AMOUNTS WERE CLAIM ED AS DEDUCTION OUT OF SALE CONSIDERATION : I) COST OF LAND RS. 5,75,15,000/- II) ADVANCE FORFEITED AGAINST RS. 50,00,000/- LAND BY LAND OWNERS III) STAMP DUTY RS. 57,15,000/- 4 IV) REGISTRATION EXPENSES RS. 5,44,000/- V) MISC. EXPENSES RS. 4,35,000/- VI) CLU & EDC CHARGES RS. 2,40,00,000/- 5. THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF STAMP DUTY AND REGISTRATION EXPENSES PAID BY THE ASSESSEE ON THE GROUND THAT IN NORMAL COURSE, STAMP DUTY AND REGISTRATION CHARGES ARE PAID BY BUYER. T HE ASSESSING OFFICER ALSO NOTICED THAT ASSESSEE HAD RE DUCED THE AMOUNT OF RS. 2,40,00,000/- FROM SALE CONSIDERATION ON ACCOUNT OF CLU AND EDC CHARGES. WHEN THE ASSESSING OFFICER QUESTIONED, IT WAS SUBMI TTED THAT IT WAS TO BE BORNE BY THE SELLER AS PER MOU. IT WAS ALSO SUBMITTED THAT THE CLU WAS DENIED AND ASSESSEE HAD REFUNDED RS. 2 CRORES IN FINANCIAL YEAR 2008-09 . THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HELD THAT CLU CHARG ES WERE TO BE RECOVERED FROM INSCOL BY THE ASSESSEE AN D IN THIS FINANCIAL YEAR, ASSESSEE HAD NOT PAID ANY CLU CHARGES AND SO, ITS CLAIM OF REDUCING CLU CHARGES F ROM SALE PROCEEDS WAS NOT CORRECT. THE ASSESSING OFFIC ER, ACCORDINGLY, REDUCED THE AMOUNT OF RS. 2,40,00,000/ - FROM COST OF ACQUISITION. HOWEVER, SUBSEQUENTLY, A RECTIFICATION ORDER HAS BEEN PASSED BY THE ASSESSIN G OFFICER, SINCE THE ACTION OF THE ASSESSING OFFICER RESULTED INTO DOUBLE DISALLOWANCE OF RS. 2,40,00,00 0/-. 5 6. THE ASSESSEE HAD ALSO REDUCED AN AMOUNT OF RS. 50 LACS FROM THE SALE CONSIDERATION ON ACCOUNT OF ADVANCES GIVEN FOR ACQUISITION OF LAND TO THE FOLLO WING PERSONS : I) SHRI NIRMAL GURDEV RS. 20 LACS II) SHRI SANDEEP SINGLA RS. 10 LACS III) SHRI PRABHJIT SINGH RS. 20 LACS TOTAL RS. 50 LACS 7. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE PURPOSE FOR WHICH THE ADVANCES WERE GIV EN AND TO PROVIDE THE AGREEMENTS RELATING TO THESE PER SONS. THE ASSESSEE HAD FILED ONE AGREEMENT FROM WHICH ASSESSING OFFICER NOTICED THAT THIS AGREEMENT RELAT ED TO PURCHASE OF PROPERTY ENTIRELY DIFFERENT FROM THE PR OPERTY IN RESPECT OF WHICH SHORT TERM CAPITAL GAIN HAD BEE N DECLARED. THE ASSESSEE'S COUNSEL ADMITTED THAT THE ADVANCES WERE PAID TO THESE PERSONS FOR ACQUISITION OF LAND OTHER THAN THE LAND FOR WHICH SHORT TERM CAPIT AL GAIN HAD BEEN DECLARED. BUT THESE LANDS COULD NOT BE ACQUIRED. THE ASSESSING OFFICER, THEREFORE, REDUCE D THE COST OF ACQUISITION BY RS. 50 LACS. THE ASSESSING OFFICER HAS ALSO REDUCED THE COST OF ACQUISITION BY RS. 4,35,000/- CLAIMED ON ACCOUNT OF MISCELLANEOUS EXPENSES AT REGISTRARS OFFICE, SINCE THE ASSESSEE COULD NOT GIVE ANY DETAILS OF THIS EXPENDITURE. 8. THE ASSESSEE CHALLENGED THESE ADDITIONS BEFORE L D. CIT(APPEALS) WHICH HAVE BEEN SEPARATELY DECIDED BY LD. 6 CIT(APPEALS) ALLOWING APPEAL OF THE ASSESSEE PARTLY , ON WHICH THE REVENUE AS WELL AS ASSESSEE ARE IN CROSS APPEALS BEFORE THE TRIBUNAL. IN THE BACKGROUND OF THESE FACTS, WE PROCEED TO DECIDE THE CROSS APPEALS AS UN DER : DEPARTMENTAL APPEAL 9. GROUND NO. 1 IS GENERAL AND NEED NO ADJUDICATION . 10. ON GROUND NO. 2, REVENUE CHALLENGED THE DELETIO N OF ADDITION OF RS. 2,40,00,000/- ON ACCOUNT OF CLU AND EDC CHARGES. THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS) THAT ASSESSEE COMPANY HAS AGREED TO PR O VIDE THE FOLLOWING SERVICES TO INSCOL FOR A CONSIDE RATION OF RS. 10,47,50,000/- I.E (I) PROCUREMENT OF LAND ( COST OF ACQUISITION + STAMP DUTY + REGISTRATION CHARGES) AND (II) GETTING PERMISSION FROM DIRECTOR, TOWN & COUNT RY PLANNING, HARYANA FOR SETTING UP INTEGRATED HEALTHC ARE INSTITUTE ON THE LAND SOLD TO INSCOL ( CLU AND EDC CHARGES). THE ASSESSEE COMPANY HAS DEDUCTED RS. 2,40,00,000/- FROM THE TOTAL AMOUNT RECEIVED FROM T HE INSCOL AS A CONSIDERATION OF RS. 10,47,50,000/- INC LUDES THE COST OF LAND, STAMP DUTY AND EDC & CLU CHARGES. THE ASSESSEE COMPANY HAS SHOWN AS ON 31.03.2008 EDC AND CLU AS LIABILITY IN THE BALANCE SHEET UNDER THE HEAD CURRENT LIABILITY BEING ON THE CLOSE OF FIN ANCIAL YEAR, NO PAYMENT HAS BEEN MADE TO HARYANA GOVERNMEN T ON ACCOUNT OF EDC AND CLU CHARGES. THE ASSESSEE 7 COMPANY HAS INCURRED EXPENSES AMOUNTING TO RS. 40 LACS ON ACCOUNT OF EDC AND CLU CHARGES. 11. THE LD. CIT(APPEALS), ON EXAMINATION OF THE MATERIAL FOUND THAT THE AMOUNT OF RS. 2,40,00,000/- WAS ON ACCOUNT OF CLU AND EDC CHARGES. THE ASSESSEE HAD SHOWN THIS AMOUNT AS LIABILITY IN THE BALANCE S HEET. AS PER ASSESSEE, EXPENDITURE OF RS. 40 LACS WAS INC URRED ON THIS ACCOUNT BUT THE GOVERNMENT DID NOT GRANT CL U AND SO THE ASSESSEE HAD REFUNDED RS. 2 CRORES TO IN SCOL IN THE NEXT YEAR. SINCE THE ASSESSEE HAD INCURRED EXPENDITURE OF RS. 40 LACS AND HAVE REFUNDED RS. 2 CRORES TO INSCOL, LD. CIT(APPEALS) HELD THAT ASSESS EE HAD RIGHTLY CLAIMED THE DEDUCTION AT RS. 2,40,00,000/- OUT OF TOTAL RECEIPTS FROM INSCOL AND ASSESSING OFFICER HAS WRONGLY DISALLOWED THIS AMOUNT. THIS ADDITION WAS ACCORDINGLY, DELETED. 12. AFTER HEARING RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER A ND CONTENDED THAT THIS AMOUNT WAS PAID TO THE ASSESSEE , THEREFORE, IT WAS INCOME OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE IS A SERVICE PROVIDER AND T HESE EXPENSES INCLUDED IN THE VALUE OF THE LAND. COPY O F THE MOU IN REFERENCE HAS BEEN FILED. COPY OF THE LETTE R FROM DIRECTOR, TOWN & COUNTRY PLANNING, HARYANA DATED 8 03.11.2008 IS ALSO FILED ON RECORD WHICH SHOWS THAT PERMISSION TO SETTING UP OF AN INTEGRATED HEALTHCAR E INSTITUTE HAS BEEN REJECTED. IN VIEW OF THE FACTS OF THE CASE AND IN THE LIGHT OF THE MOU AND THE LETTER FRO M TOWN & COUNTRY PLANNING, HARYANA, IT IS CLEAR THAT ASSESSEE WAS SERVICE PROVIDER TO INSCOL AND MADE AVAILABLE LANDS TO THE INSCOL AT A FIXED PRICE WHIC H INCLUDES THE CLU AND EDC CHARGES. SINCE, THE GOVERNMENT DID NOT GRANT CLU, THEREFORE, ASSESSEE REFUNDED RS. 2 CRORES TO INSCOL AND HAS SHOWN AS LIABILITY IN THE BALANCE SHEET. RS. 40 LACS WAS IN CURRED FOR GETTING CLU, THEREFORE, LD. CIT(APPEALS) WAS JU STIFIED IN HOLDING THAT THE AMOUNT SHALL HAVE TO BE REDUCED FROM THE TOTAL RECEIPTS RECEIVED FROM INSCOL. WE, THEREFORE, DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE SAME IS ACCORDINGLY, DISMISSED. 13. ON GROUND NO. 3 AND 4, REVENUE CHALLENGED THE DELETION OF ADDITION OF RS. 57,15,000/- ON ACCOUNT OF PAYMENT OF STAMP DUTY CHARGES AND IN DELETING THE ADDITION OF RS. 5,44,300/- ON ACCOUNT OF PAYMENT FO R REGISTRATION CHARGES. 13(I) THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS ) THAT ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF S TAMP DUTY AND REGISTRATION CHARGES PAID BY ASSESSEE ON BEHALF OF INSCOL ON THE GROUND THAT IN NORMAL COURS E, STAMP DUTY IS PAID BY PURCHASER AND FAILED TO APPRECIATE THE TERM AND CONDITIONS GIVEN IN THE MOU 9 BETWEEN BUYER AND THE ASSESSEE. IT WAS SUBMITTED T HAT ASSESSEE COMPANY IS ONLY SERVICE PROVIDER AND WHATE VER THE PURCHASES AND SALES HAVE BEEN MADE, IT HAS BEEN MADE ON BEHALF OF INSCOL. THE SALE PRICE IS INCLUSI VE OR EXCLUSIVE OF STAMP DUTY OR PAYMENT OF STAMP DUTY ME T BY THE PURCHASER OR SELLER IS AS PER AGREEMENT BETW EEN ASSESSEE AND INSCOL. THE MOU CLEARLY SHOWS THAT IN SCOL HAS GIVEN CREDIT OF SALE CONSIDERATION AND COMMISSI ON TO THE ASSESSEE AND WHATEVER THE PAYMENT TO LAND OWNER AND PAYMENTS TOWARDS STAMP DUTY AND REGISTRATION EXPENSES, HAS BEEN DEBITED TO THE ASSESSEE'S ACCOUN T. THE ASSESSEE ALSO FILED COPY OF THE BALANCE SHEET O F INSCOL HOSPITAL WHICH CLEARLY SHOWS THAT INSCOL HAS PURCHASED LAND INCLUSIVE OF STAMP DUTY AT RS. 9,43,63,500/- AND NO STAMP DUTY HAS BEEN SEPARATELY DEBITED TO LAND ACCOUNT AND THEREFORE, IT IS CLEAR THAT SALE CONSIDERATION IS INCLUSIVE OF STAMP DUTY AND REGISTRATION CHARGES. THE ASSESSEE HAS MADE SALES O F RS. 9,43,63,500/- AND STAMP DUTY AND REGISTRATION CHARGES HAVE BEEN MADE BY THE ASSESSEE. THEREFORE, ASSESSEE IS ENTITLED FOR DEDUCTION OF THE SAME. 14. THE LD. CIT(APPEALS) CONSIDERED THE ISSUE IN TH E LIGHT OF THE MOU BETWEEN ASSESSEE AND THE BUYER AND FOUND ASSESSEE WAS TO BEAR STAMP DUTY AND REGISTRAT ION EXPENSES. THE MOU WAS FOR PURCHASE OF LAND BY THE ASSESSEE ON BEHALF OF INSCOL AND ALL THE DETAILS REGARDING WHO WILL MAKE THE PAYMENT FOR WHAT, ARE 10 MENTIONED IN THIS MOU. PERUSAL OF THE BALANCE SHEE T OF INSCOL REVEALS THAT IT HAD PURCHASED LAND INCLUSIVE OF STAMP DUTY AND NO STAMP DUTY AND REGISTRATION CHARG ES WAS SEPARATELY DEBITED TO THE LAND ACCOUNT AND SO, IT WAS EVIDENT THAT THIS AMOUNT IS INCLUSIVE OF STAMP DUTY AND REGISTRATION CHARGES. THE ASSESSEE IS A SERVIC E PROVIDER WHO PURCHASED THE LAND ON BEHALF OF INSCOL , THEREFORE, THE CONDITIONS MENTIONED IN THE MOU CLEA RLY SHOWS THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING STAMP DUTY AND REGISTRATION CHARGES FRO M THE COST OF ACQUISITION. THE LD. CIT(APPEALS), ACCORDINGLY, DELETED BOTH THE ADDITIONS. 15. AFTER HEARING RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. DR RELIED UPON ORDER OF THE ASSESSING OFFICER. THE COPY OF THE MOU IS FILED ON RECORD WHICH SHOWS THAT ASSESSEE WOULD BE ENTITLED FOR THE AMOUNT FOR SALE OF THE LAND AT FIXED PRICE WHICH INCLUDES THE COST OF THE LAND PAID TO THE LAND OWNERS AND STAMP DUTY AND REGISTRA TION CHARGES. THEREFORE, THE GENERAL PROPOSITION ADOPTE D BY THE ASSESSING OFFICER WOULD NOT BE APPLICABLE TO TH E FACTS AND CIRCUMSTANCES OF THE CASE. THIS FACT IS SUPPORTED BY THE BALANCE SHEET OF INSCOL WHICH REVE ALED THAT IT HAS PURCHASED THE LAND INCLUSIVE OF STAMP D UTY AND REGISTRATION CHARGES. SINCE, THE TRANSACTION I S INCLUSIVE OF STAMP DUTY AND REGISTRATION CHARGES, THEREFORE, LD. CIT(APPEALS), ON PROPER APPRECIATION OF 11 FACTS AND MATERIAL ON RECORD CORRECTLY DELETED BOTH THE ADDITIONS. THESE GROUNDS OF APPEAL OF THE REVENUE ARE ACCORDINGLY DISMISSED. 16. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED . ASSESSEE'S APPEAL 17. GROUND NO. 1 IS GENERAL AND NEED NO ADJUDICATIO N. 18. ON GROUND NO. 2, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 50 LACS ON ACCOUNT OF ADVANCES FORFEITED BY THE LAND OWNERS. 18(I) THE ASSESSEE SUBMITTED BEFORE LD. CIT(APPEALS ) THAT ASSESSEE IS ONLY A SERVICE PROVIDER AND RECEIV ED COMMISSION ON SALE AND PURCHASE MADE ON BEHALF OF INSCOL. DURING THE COURSE OF PROCUREMENT OF LAND, INSCOL HAS MADE PAYMENTS AMOUNTING TO RS. 50 LACS T O SHRI NIRMAL GURDEV, SHRI SANDEEP SINGLA AND PRABHJI T SINGH AS ADVANCE AGAINST PURCHASE OF LAND FOR ITS HOSPITAL PROJECT AND DEBITED THE ACCOUNT OF THE ASS ESSEE COMPANY. HOWEVER, INSCOL COULD NOT PURCHASE THE LAN D FROM THESE LAND OWNERS AND AMOUNT WAS FORFEITED BY THE LAND OWNERS. INSCOL HAS DEBITED THE ASSESSEE'S ACC OUNT AS THE ASSESSEE COMPANY IS RESPONSIBLE FOR GETTING REGISTRATION DONE IN THE NAME OF INSCOL. THE ADVAN CE WAS GIVEN FOR PURCHASE OF LAND ON BEHALF OF INSCOL AND THE TOTAL CONSIDERATION RECEIVED FROM INSCOL IS TRE ATED AS INCOME AND THEREFORE, ADVANCE GIVEN ON BEHALF OF IN SCOL 12 SHOULD BE ALLOWED AS DEDUCTION OR ALTERNATIVELY, ON LY COMMISSION INCOME ON BEHALF OF INSCOL SHOULD BE TRE ATED AS INCOME. IT IS HIGHLY UNJUSTIFIED TO TAKE THE RE CEIPT AS INCOME AND DISALLOW THE PAYMENT MADE ON BEHALF OF INSCOL. THE ASSESSEE FILED COPY OF ACCOUNT OF INSC OL AND COPY OF THE AGREEMENTS FOR PURCHASE OF LAND FOR CONSIDERATION. 19. THE LD. CIT(APPEALS),CONSIDERING THE SUBMISSION S OF THE ASSESSEE, NOTED THAT LANDS WERE FINALLY NOT PURCHASED BY ASSESSEE AND THESE THREE PERSONS FORFE ITED THE AMOUNT. SINCE ADVANCES WERE NOT GIVEN FOR PURCHASE OF LAND IN RESPECT OF WHICH, SHORT TERM CA PITAL GAIN HAS BEEN DECLARED, THE LD. CIT(APPEALS) CONFIR MED THE ORDER OF ASSESSING OFFICER AND DISMISSED THIS G ROUND OF APPEAL OF THE ASSESSEE. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMITTED THAT MO U IN QUESTION INCLUDES FORFEITURE AMOUNT AND REFERRED TO CLAUSE-I AND 10 OF THE MOU, WHICH IS REPRODUCED ABO VE AS CLAUSE-I AND 6. ON THE OTHER HAND, LD. DR RELIE D UPON ORDER OF THE AUTHORITIES BELOW. 21. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ADDITION OF RS. 50 LACS. IT IS NOT IN DISPUTE THAT ADVANCES WERE G IVEN FOR ACQUISITION OF LAND TO THREE PERSONS IN A SUM O F 13 RS. 50,00,000/-. IT IS ALSO NOT IN DISPUTE THAT IN SCOL COULD NOT PURCHASE THE LAND FROM THESE LAND OWNERS AND THE AMOUNTS WERE FORFEITED BY THE LAND OWNERS. INS COL HAS DEBITED THE ASSESSEE'S ACCOUNT AS THE ASSESSEE COMPANY WAS RESPONSIBLE FOR GETTING THE REGISTRATIO N DONE IN THE NAME OF INSCOL. THE ADVANCE WAS GIVEN FOR PURCHASE OF LAND ON BEHALF OF INSCOL AND THE TOTAL CONSIDERATION RECEIVED FROM INSCOL HAS BEEN CONSIDE RED AS INCOME. CLAUSE-1 OF THE MOU IN QUESTION CLEARLY SHOWS THAT ASSESSEE WOULD BE ENTITLED FOR SALE CONSIDERATION AT THE FIXED PRICE WHICH INCLUDES THE COST OF THE LAND I.E. PAYMENT MADE TO THE LAND OWNERS AN D FORFEITED AMOUNT. CLAUSE-10 OF THE MOU ALSO PROVID ES THAT INSCOL (FIRST PARTY) SHALL NOT BE RESPONSIBLE FOR ADVANCES GIVEN FOR PURCHASING LAND, IN CASE REGISTR ATION OF LAND IS NOT DONE OR IN CASE OF FORFEITURE OF THE ADVANCE AMOUNT. THE AMOUNT OF ADVANCE FORFEITED SH ALL BE BORNE BY SECOND PARTY I.E. ASSESSEE COMPANY OR DEDUCTED FROM THE AGREED SALE CONSIDERATION. IT WO ULD, THEREFORE, CLEARLY SHOW THAT FORFEITED AMOUNT HAS B EEN INCLUDED INTO THE TOTAL SALE CONSIDERATION AND IN C ASE OF FORFEITURE OF ADVANCE, IT SHALL BE BORNE BY THE ASS ESSEE COMPANY. WHEN THE TOTAL SALE CONSIDERATION RECEIVE D FROM INSCOL IS TREATED AS INCOME IN THE HANDS OF TH E ASSESSEE, AUTHORITIES BELOW WERE NOT JUSTIFIED IN N OT ALLOWING BENEFIT OF FORFEITED AMOUNT AS EXPENDITURE IN THE HANDS OF THE ASSESSEE. SINCE IT WAS LIABILITY O F THE ASSESSEE TO BEAR THE EXPENDITURE INCURRED ON ACCOUN T OF 14 FORFEITED AMOUNT AS ADVANCE GIVEN TO THE LAND OWNER S, THEREFORE, IT SHALL HAVE TO BE ALLOWED AS DEDUCTION IN FAVOUR OF THE ASSESSEE. FURTHER, ON THE SAME ANOLO GY, WHEN THE ASSESSING OFFICER HAS ALLOWED COST OF LAND I.E. PAYMENT MADE TO THE LAND OWNERS AS DEDUCTION IN FAV OUR OF THE ASSESSEE IN RECTIFICATION ORDER, THERE WAS N O REASON TO DISALLOW THE DEDUCTION OF RS. 50 LACS ON THIS ISSUE. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND DELETE ADDITION OF RS. 50 LAC S. IN THE RESULT, GROUND NO. 2 OF APPEAL OF THE ASSESSEE IS ALLOWED. 22. ON GROUND NO. 3, ASSESSEE CHALLENGED THE ADDITI ON OF RS. 4,35,000/- ON ACCOUNT OF MISCELLANEOUS EXPEN SES. THE ASSESSING OFFICER REDUCED THE COST OF ACQUISITI ON BY RS. 4,35,000/- CLAIMED ON MISC. EXPENSES AS THE ASSESSEE COULD NOT GIVE THE DETAILS OF THESE EXPENS ES. THE ASSESSEE WAS ASKED TO PRODUCE VOUCHERS FOR THES E EXPENSES BUT ASSESSEE FAILED TO PROVIDE VOUCHERS OF THESE EXPENSES, ACCORDINGLY ADDITION WAS MADE. THE LD. CIT(APPEALS) NOTED THAT ON THIS ISSUE, NO REPLY HAS BEEN FILED AT APPELLATE STAGE THEREFORE, IN THE ABSENCE OF ANY MATERIAL ON RECORD, IT WAS HELD THAT ASSESSING OFFI CER HAS RIGHTLY REDUCED THIS AMOUNT FROM COST OF ACQUIS ITION AND DISALLOWANCE WAS UPHELD. 23. AFTER HEARING RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE ASSESSEE. SINCE ASSESSEE FAILED TO PRODUCE ANY VOUCHER OF THE 15 EXPENDITURE ON THIS ISSUE AND NO DETAILS HAVE BEEN PROVIDED, THEREFORE, ASSESSING OFFICER WAS JUSTIFIE D IN MAKING THE ADDITION BY REDUCING THE COST OF ACQUISI TION. NO REPLY HAVE BEEN FILED BEFORE LD. CIT(APPEALS). FURTHER, NO VOUCHERS OR EVIDENCES HAVE BEEN PRODUCE D BEFORE US ON THIS ISSUE, THEREFORE, WE ARE UNABLE T O INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. WE, ACCORDINGLY, CONFIRM THE ADDITION OF RS.4,35,000/- AND REJECT THIS GROUND OF APPEAL OF T HE ASSESSEE. 24. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 25. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED AND APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNES H SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH JANUARY, 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD