M/s Beeta Promoters Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 3692/DEL/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6984 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Keywords: Additional evidence; Tax effect

Judgement Text

1ITA NO. 3692/DEL/2011 & ITA NO.1451/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-3692/DEL/2011 (ASSESS MENT YEAR 2006-07) BEETA PROMOTERS PVT. LTD. RECTANGLE-1, D-4 SAKET DISTRICT CENTRE, SAKET NEW DELHI AAACB4062A (APPELLANT) VS ITO WARD-2(4) NEW DELHI (RESPONDENT) ITA NO .-1451/DEL/2014 (ASSESS MENT YEAR 2006-07) ITO WARD-21 NEW DELHI (APPELLANT) VS BEETA PROMOTERS PVT. LTD. RECTANGLE-1, D-4 SAKET DISTRICT CENTRE, SAKET NEW DELHI AAACB4062A (RESPONDENT) APPELLANT BY SH. GAUTAM JAIN, ADV. SH. PIYUSH KUMAR KAMAL. ADV RESPONDENT BY SH. S. K. JAIN, SR. DR ORDER PER SUCHITRA KAMBLE, JM THE LD. DR AND LD. AR DURING THE COURSE OF HEARING SUBMITTED THAT ITA NO. 1451/DEL/2014 IS A PENALTY APPEAL FILE D BY THE DATE OF HEARING 08.08.2016 DATE OF PRONOUNCEMENT 26.09.2016 2ITA NO. 3692/DEL/2011 & ITA NO.1451/DEL/2014 DEPARTMENT WHICH HAS A TAX EFFECT LESSER THAN 10 LA CS. IN RESULT OF THIS, ITA NO. 1451/DEL/2014 IS DISMISSED FOR LOW TA X EFFECT. 2. ITA NO. 3692/DEL/2011 IS FILED BY THE ASSESSEE A GAINST THE ORDER DATED 26/4/2011 PASSED BY CIT(A)-V, NEW DELHI . 3. BRIEF FACTS OF THE CASE ARE AS UNDER:- 3.1 DURING THE YEAR, THE ASSESSEE COMPANY SOLD THE PROPERTY FOR THE COST OF RS.19,53,125/- AND THE COST OF PURCHASE DEDUCTED WAS FOR RS.10,16,105/- INCLUDING PAYMENT OF RS.6,87,500 /- PAID AS COMPENSATION FOR ACQUIRING PURCHASE RIGHTS. THE AS SESSEE COMPANY WAS ASKED TO JUSTIFY AS TO WHY THIS COMPENS ATION SHOULD BE ALLOWED TO BE DEDUCTED AGAINST THE SALES AS COST OF PURCHASE. THE ASSESSEE COMPANY SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE COMPANY HAD PAID RS.6,87,500/- TO M/S M.L. PROMOTERS PVT. LTD. FOR CANCELLING THE AGREEMENT TO SALE WHICH WAS EXECUTED FOR THE SALE OF IMPUGNED PROPERTY. LATER THE ASSESSEE COMPANY FOUND A NEW REPUTED BUYER M/S OMAX LTD FOR THE PURCHASE OF PROPERTY. TO EARN PROFIT, THE ASSESSEE COMPANY CANCELLED THE AGREEMENT AGAINST PAYMENT OF CANCELLA TION CHARGES. 3.2 HOWEVER, NEITHER A COPY OF SALE DEED NOR ANY AG REEMENT ENTERED WITH M/S M.L. PROMOTERS PVT. LTD. WAS PRODU CED BEFORE THE ASSESSING OFFICER. THE ASSESSEE COMPANY CLAIMS TO HAVE MADE PAYMENT OF RS.6,87,500/- AS COMPENSATION. BUT THE PAYMENT OF COMPENSATION WAS ON ACCOUNT OF A DECISION OF THE AS SESSEE 3ITA NO. 3692/DEL/2011 & ITA NO.1451/DEL/2014 COMPANY ONLY AND WAS NOT INCIDENTAL TO THE BUSINESS . THE ASSESSING OFFICER OBSERVED THAT THE SUBMISSION BY T HE ASSESSEE COMPANY THAT THE AGREEMENT WAS CANCELLED ON ACCOUNT OF EARNING HIGHER PROFIT WAS NOT CORRECT. THERE WAS NO EVIDEN CE TO SUGGEST THAT THE AMOUNT RECEIVED FROM OMAX WAS HIGHER THAN WHAT WAS BEING RECEIVED FROM L. M. PROMOTERS IN ABSENCE OF A NY AGREEMENT PRODUCED BY THE ASSESSEE COMPANY. HENCE, THE PAYMEN T OF COMPENSATION PAID WAS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE COMPANY. 4. BEING AGGRIEVED BY THIS THE ASSESSEE FILED APPEA L BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT THE ORIGINAL DOCUM ENTS WERE NOT FILED HENCE, DISMISSED THE APPEAL OF THE ASSESSEE. 5. THE LD. AR SUBMITTED THAT THE DEPARTMENT HAS ACC EPTED ADDITIONAL EVIDENCE AND AT NO POINT QUESTIONED THE AUTHENTICITY OF DOCUMENTS WHICH WERE SEALED WHEN THE PREMISES WERE SEALED BY THE SUPREME COURTS DIRECTIONS. THE REMAND REPORT ALSO STATED THE SAME, BUT HAS NOT VERIFIED FROM THE SAID DOCUMENTS. 6. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 7. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE ASSESSEE PRODUCED THE PHOTOCOPIES OF THE AGREEM ENT TO SELL DATED 12.04.2005 AND CANCELLATION DEED DATED 31.08. 2005 AS ADDITIONAL EVIDENCE BEFORE THE CIT(A). THE CIT(A) H AS ACCEPTED ADDITIONAL EVIDENCE AND AT NO POINT THE AUTHENTICIT Y OF DOCUMENTS 4ITA NO. 3692/DEL/2011 & ITA NO.1451/DEL/2014 WERE QUESTIONED BY THE REVENUE WHICH WERE IN THE PR EMISES WHICH WAS SEALED BY THE SUPREME COURTS DIRECTIONS. THE REMAND REPORT ALSO STATED THAT THE ORIGINAL CANCELLATION DEED AS SUBMITTED BY THE ASSESSEE BEFORE THE CIT(A) WAS NOT PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER. THE SAME WAS NOT VERIFIED BY THE ASSESSING OFFICER. SINCE THE DOCUMENTS WERE NOT PROPERLY VERI FIED AND THERE WAS NO COGNIZANCE TO THE EFFECT OF THE ADDITIONS MA DE BY THE ASSESSING OFFICER, THE MATTER NEEDS TO BE ADJUDICAT ED BASED ON THE EVIDENCE BEFORE THE ASSESSING OFFICER. THUS, THE MA TTER IS REMANDED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N. 8. IN THE RESULT, APPEAL (ITA NO. 3692/DEL/2011) IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND APPEAL IN RESP ECT OF PENALTY (ITA NO. 1451/DEL/2014) IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT 26TH OF SEPTEMBER, 2016. SD/- SD/- (G. D. AGRAWAL) (S UCHITRA KAMBLE) VICE PRESIDENT JUD ICIAL MEMBER DATED: 26/09/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI 5ITA NO. 3692/DEL/2011 & ITA NO.1451/DEL/2014 DATE 1. DRAFT DICTATED ON 08.07.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 08.08.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 26.09.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 26.09.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.