Appeal details
Counselvise Citation
254520114 RSA 2013
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 25 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-02-2015
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
18-02-2015
Assessment Year
2008-2009
Appeal Filed On
30-04-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B , NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 2545/DEL/2013 ASSESSMENT YEAR : 2008-09 ACIT, CC-23, VS. M/S. DRUZBA OVERSEAS (P) LTD., NEW DELHI M-11, MIDDLE CIRCLE, CONNAUGHT CIRCUS, NEW DELHI GIR / PAN:AABCD5112E (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PARWINDER KAUR, SR.DR RESPONDENT BY : SHRI V S RASTOGI. AR ORDER PER T.S. KAPOOR, AM: THIS IS REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A) DATED 23.01.2013. THE ONLY EFFECTIVE GROUND TAKEN BY REV ENUE IS THE GRIEVANCE WITH THE ACTION OF LD. CIT(A) BY WHICH HE HAD DELET ED THE ADDITION OF RS.29,74,652/- MADE BY A.O. ON ACCOUNT OF INTEREST PAID OUTSIDE BOOKS OF ACCOUNTS. 2. THE BRIEF FACTS AS NOTED IN THE ASSESSMENT ORDER ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT, CONSTRUCTIO N AND MARKETING OF REAL ESTATE IN THE COMMERCIAL AND RESIDENTIAL SECTOR. S EARCH AND SEIZURE OPERATION WAS CARRIED OUT ON BPTP GROUP COMPANIES O N 15.11.2007 THE ASSESSEE COMPANY ALSO BELONGS TO BPTP GROUP. ON TH E BASIS OF CERTAIN DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND SE IZURE AND ALSO ON THE BASIS OF POST SEARCH ENQUIRIES, IT WAS ESTABLISHED THAT THE GROUP COMPANIES OF ITA NO.2545/DEL/2013 2 BPTP WERE FOLLOWING A BUSINESS MODEL AS A PART OF W HICH ONLY PART PAYMENTS OF THE SALE CONSIDERATION IN RESPECT OF TH E LAND PURCHASED WERE PAID AT THE TIME OF EXECUTION OF THE SALE DEED AND THE PAYMENTS OF BALANCE SALE CONSIDERATION WERE MADE THOUGH POST DATED CHEQ UES (PDCS) AND FOR THE INTERVENING PERIOD, INTEREST WAS PAID IN CASH TO TH E VENDORS OF THE LAND BY THE VENDEE COMPANY ON MONTHLY BASIS @ 1.25% P.M., ON TH E AMOUNT OF PDCS AND THIS CASH PAYMENT OF INTEREST BY THE VENDEE COM PANY, WAS NOT ACCOUNTED FOR BY IT, IN ITS BOOKS OF ACCOUNT. THE A.O. OBSER VED THAT THE ASSESSEE COMPANY HAD ALSO PURCHASED LARGE CHUNK OF LAND DURI NG THE FINANCIAL YEAR 2007-08 AND FOLLOWING THE SAME MODUS OPERANDI HAD P AID INTERESTS IN CASH TO THE VENDORS OF THE LAND ON MONTHLY BASIS @ 1.25% P.M. ON THE AMOUNT OF PDCS AND THIS CASH PAYMENT OF INTEREST HAD NOT BEEN ACCOUNTED FOR BY IT IN ITS BOOKS OF ACCOUNTS. THEREFORE, AFTER ISSUING QU ESTIONNAIRE AND AFTER GOING THROUGH REPLY FROM THE ASSESSEE, THE A.O. MADE ADDI TION OF RS.29,74,652/- REPRESENTING THE INTERESTS ON PDCS. BREAK UP OF DETAILS AND CALCULATION OF INTEREST HAS BEEN MADE BY A.O. VIDE PARA 2.6. AGG RIEVED, THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) PARTLY ALLO WED RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: 5.4 CONCLUSION: - LEARNED AR HAS MAINTAINED ALL ALONG THAT INTEREST I S NOT PAID AS ALL THE RECEIPTS ARE ONLY MEMORANDUM ONLY. ANALYSIS OF THESE ABOVE SEIZED DOCUMENT REVEALS THAT THESE SEIZED DOCUMENTS DEFINITELY PROVES THAT INTEREST IS PAID ON PDCS. VARIOUS VOUCHER IN S EIZED DOCUMENTS CONCLUSIVELY PROVES THAT THE RECIPIENT HAS SIGNED O N VOUCHER FOR RECEIPT OF THE INTEREST. LD AR'S CONTENTION THAT T HESE 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 RECEIVER WILL NOT SIGN THE VOUCHER AS RECIPIENT. AMOUNTS ARE SPEC IFIC AND CALCULATION IS 15% PER ANNUM. THEREFORE, LD. AR WIT HOUT CONCEDING THAT THE INTEREST IS PAID ON PDCS HAS TAKEN THE STA ND THAT IN NONE OF ITA NO.2545/DEL/2013 3 THE SEIZED MATERIAL, I.E. EVEN IN RECEIPT SEIZED, T HE INTEREST 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. DOCUME NTS DISCUSSED ABOVE WHERE THERE IS CLEAR EVIDENCE OF RECEIPT OF I NTEREST IS FOR EXTENSION OF PERIOD OF PDCS. LD AR'S ARGUMENTS THAT CALCULATION OF INTEREST ON PDCS HAS BEEN CONSIDERED WHILE ENTERING INTO AGREEMENTS HOLDS SOME LOGIC. BUT WHEN DATES OF PDCS ARE EXTEND ED, THE RECIPIENT WILL DEFINITELY ASK AND SETTLE FOR SOME ADDITIONAL COMPENSATION IN FORM OF INTEREST. THERE IS NO EVIDENCE 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 O N THE EXTENSION OF PDCS AS DISCUSSED ABOVE WHILE ANALYZING THE SEIZED DOCUMENT. THEREFORE, IN MY VIEW WHERE EVER THE DATE OF PDCS A RE EXTENDED INTEREST IS PAID @ 15% PER ANNUM IN CASH OUT OF BOO KS OF ACCOUNTS. WHICH ARE EVIDENT FROM SEIZED MATERIAL. THEREFORE, INTEREST ON PDCS TO THE EXTENT OF EXTENSION PERIOD APPEARS TO QUITE REASONABLE AND LOGICAL. ACCORDINGLY, INTEREST ON PDCS EITHER AS SA LE CONSIDERATION OR ADDITIONAL PAYMENT MAY BE RECOMPUTED TO THE EXTENT OF EXTENDED PERIOD OF PDCS BY THE A.O. AND TO THAT EXTENT ADDIT ION IS CONFIRMED. THE ABOVE FORMULAE WILL APPLY TO ALL GROUP COMPANIE S UNDER THE MANAGEMENT OF BPTP I.E.( M/S BPTP AND ASSOCIATE COM PANIES) INCLUDING THE APPELLANT COMPANY AS EVIDENCE IS FOUN D IN RESPECT OF VARIOUS COMPANIES OF BPTP AND SOME SEIZED PAPER COU LD NOT BE RELATED TO SPECIFIC COMPANY. THEREFORE, IT IS PROPE R TO APPLY THIS FORMULA FOR ALL COMPANIES UNDER THE COMMON MANAGEME NT OF BPTP GROUP, HEAD BY SHRI KABUL CHAWLA. ALL THESE COMPANI ES ARE CLOSELY LINKED. SOME COMPANIES PURCHASE LAND AND TRANSFER T HE SAME TO M/S BPTP LTD, OR COUNTRYWIDE PROMOTERS (P) LTD. FOR HOU SING OR COMMERCIAL PROJECTS ARE ULTIMATELY DEVELOPED AND SO LD BY M/S BPTP LTD AND COUNTRYWIDE PROMOTERS LTD. OR IN STRAY CASE BY SOME OTHER COMPANIES. ASSESSING OFFICER HAS APPLIED THE CASE O F EUSUF ALI FOR APPLYING INTEREST ON PDCS FOR ALL COMPANIES OF BPTP GROUP FOR ALL ASSESSMENT YEAR UNDER CONSIDERATION. LD AR HAS TRIE D TO DIFFERENTIATE THE ABOVE CITED CASE ON FACTS. IN MY VIEW, AS INTER EST PAYMENT ON EXTENSION OF PERIOD OF PDCS ARE ESTABLISHED ON NUME ROUS SEIZED DOCUMENTS. A TREND IS ESTABLISHED FOR THE GROUP AS THE OVERALL MANAGEMENT IS CONTROLLED BY ONE PERSON SH,. KABUL C HAWLA AND ACTIVITIES OF ALL COMPANIES ARE INTERRELATED. ITA NO.2545/DEL/2013 4 IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE THEN A.O. IS DIRECTED TO RECOMPUTED INTEREST ON PDC S AFTER SIX MONTHS FROM DATE OF ISSUE OF PDCS I.E. DATE OF SALE, SIX M ONTHS 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 SEIZE D RECORD IN THE CASE OF RAMVATI BEERO ETC WHERE THE INTEREST WORKIN G IS MADE AFTER 91 15 MONTHS. TAKING THESE FACTS INTO CONSIDERATION. IT WOULD BE PROPER TO COMPUTE INTEREST AFTER 6 MONTHS FROM DATE OF SAL E ON CONSERVATIVE SIDE. ACCORDINGLY THIS GROUND IS PARTLY ALLOWED. 2.1 AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 3. AT THE OUTSET, LD. A.R. INVITED OUR ATTENTION TO THE FACT THAT VARIOUS PAPER BOOKS WERE FILED BUT AT PRESENT ONLY PAPER BO OK CONTAINING 76 PAGES WAS RELEVANT AS NOW, THE MATER STANDS COVERED IN TH E CASE OF GROUP COMPANIES WHERE SIMILAR ADDITION HAS BEEN DEALT BY HONBLE TRIBUNAL IN I.T.A. NO. 1532 AND 1756/DEL/2013 AS PLACED AT PAPE R BOOK PAGES 65-76. LD. A.R. ALSO TOOK US TO PAGES 73-74 OF THE PAPER B OOK. 4. LD. D.R. FAIRLY CONCEDED THAT THE MATTER IS COVE RED IN FAVOUR OF ASSESSEE. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT SIMILAR ISSUE AROSE IN THE CASE OF ISG ESTATE (P) LTD. WHICH IS ALSO A GROUP COMPANY OF BPTP AND FINDINGS OF THE TRIBUNAL AS CONTAINED VIDE PARAS 14-17 ARE REPRODUCED BELOW: REVENUE'S APPEAL 14. AS REGARDS GROUND NO.1 RAISED BY THE REVENUE RE LATING TO DELETION OF ADDITION OF RS. 26,69,785/- MADE BY THE AO ON AC COUNT OF INTEREST ON PDCS PAID OUT OF BOOKS OF ACCOUNT IS CONCERNED, IT IS WAS SUBMITTED BY THE LD. COUNSEL OF THE ASSESSEE THAT T HIS WAS THE INTEREST CALCULATED @ 15% P.M. ON PDCS FROM THE DATE OF ISSU E (SALE DEED) TO ITA NO.2545/DEL/2013 5 THE DATE OF ENCASHMENT. WE FIND THAT CIT(A) HELD IN PARA 5.4 AT PAGE 17 OF HIS ORDER THAT 'IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE THEN A. O. IS DIRECTED TO RECOMPU TED INTEREST ON P DCS 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'. LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTE D THAT SINCE THE PDCS WERE ENCASHED IN LESS THAN SIX MONTHS FROM THE DATE OF ISSUE, ENTIRE INTEREST OF RS.26,69,785/- WAS DELETED IN PU RSUANCE TO THE ORDER OF CIT(A). COPY OF APPEAL EFFECT BY WAY OF REVISED TAX COMPUTATION IS ENCLOSED AT PAGE 98-99 OF THE PB. HE FURTHER SUBMIT TED THAT THE MATTER IN THE PRESENT APPEAL IS COVERED BY THE ORDER OF TH E TRIBUNAL 'C' BENCH DELHI IN THE CASE OF A SISTER CONCERN VIZ., M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD DATED 31.10.2014 PASSED IN ITA NO. 1674/DEL113 & 1765/DEL113 FOR AY 2008-09. (EXTRACT COPY IS ENCL OSED AT PAGES 69-73 OF THE PB. LD. COUNSEL FOR THE ASSESSEE STATE D THAT THE FACTS OF THE CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. L TD (SUPRA) ARE IDENTICAL TO THE FACTS OF THE CASE OF THE ASSESSEE AND BOTH COMPANIES ARE GROUP/SISTER COMPANIES. 15. LD. DR DID NOT HAVE ANY RAISED ANY OBJECTION TO THE AFORESAID PROPOSITION OF THE ID. COUNSEL OF THE ASS ESSEE. 16. WE HAVE HEARD THE BOTH PARTIES AND PERUSED THE RELEVANT REC ORD AVAILABLE WITH US SPECIALLY THE IMPUGNED ORDER PASSED BY THE REVEN UE AUTHORITIES; PAPER BOOK FILED BY THE ASSESSEE, WE FIND CONSIDERA BLE COGENCY IN THE CONTENTION OF THE ID. COUNSEL OF THE ASSESSEE THAT THE ISSUE RAISED IN GROUND NO. 1 RAISED IN THE REVENUE'S APPEAL IS SQUA RELY COVERED BY THE ORDER DATED 31.10.2014 OF THE ITAT, DELHI 'C' B ENCH PASSED IN ITA NO. 1756/DEL/2013 (A.Y. 2008-09) IN THE CASE OF M/S IAG PROMOTER & DEVELOPERS (P) LTD. VS. ACIT WHEREIN THE TRIBUNAL HELD VIDE PARA NO. 3 AT PAGE 5 AS UNDER:- 'THE CLT(A) DIRECTED TO RECALCULATE THE INTEREST ON PDCS AND THERE WAS A SOUND LOGIC FOR SUCH DIRECTION. HIS DIR ECTION IS BASED ON MATERIAL FOUND AND SEIZED AT THE TIME OF S EARCH. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CLT(A) IN THIS REGARD AND ACCORDINGLY, WE REJECT GROUND NO.L OF THE REVENUE'S APPEAL.' 17. RESPECTFULLY FOLLOWING THE PRECEDENT AS AFORESA ID, WE DISMISS THIS GROUND OF THE REVENUE'S APPEAL. ITA NO.2545/DEL/2013 6 6. WE FIND THAT IN THE PRESENT CASE ALSO, THE PDCS HAVE BEEN ENCASHED WITHIN A PERIOD OF SIX MONTHS AS IS APPARENT FROM P AGE 11 OF ASSESSMENT ORDER WHERE A.O. HAS NOTED THE DATE OF SALE OF PROP ERTIES AND DATE OF ENCASHMENT OF CHEQUES. THEREFORE, WE FIND THAT T HE FACTS IN THE PRESENT CASE ARE SIMILAR TO THAT OF GROUP COMPANIES OF ISG ESTATES (P) LTD., THEREFORE, FOLLOWING THE TRIBUNAL ORDER IN THE CASE OF GROUP COMPANY, WE DISMISS THIS APPEAL OF REVENUE. 7. IN VIEW OF ABOVE, APPEAL OF REVENUE IS DISMISSED . 8. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEB., 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAP OOR) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 25 TH FEB., 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 20/2 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 20,23 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 25/2 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 25/2 SR. PS/PS 7 FILE SENT TO BENCH CLERK 25/2 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER
