Swadesh Villas Private Limited, Hyderabad, Hyderabad V. DCIT, Circle-3(1), Hyderabad, Hyderabad

ITA 489/HYD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7557 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2008-2009
• Appeal Filed On: 15-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MOHANKUMAR
• Assessee Lawyers: B SHANTHI KUMAR
• Keywords: Set aside
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMEBR ITA NO. 489/HYD/2017 ASSESSMENT YEAR: 2008-09 SWADESH VILLAS PRIVATE LIMITED, HYDERABAD. PAN AAKCS1018D VS. DCIT, CIRCLE 3(1) HYDERABAD. (APPLICANT) (RESPONDENT) ASSESSEE BY : SRI B. SHANTHI KUMAR REVENUE BY : SRI R. MOHAN KUMAR DATE OF HEARING : 21-01-2019 DATE OF PRONOUNCEMENT : 18-04-2019 ORDER PER P. MADHAVI DEVI, J.M.: THIS IS ASSESSEES APPEAL FOR THE A.Y 2008-09 AGAINST THE ORDER OF THE CIT(A)-3, HYDERABAD DATED 09.12.2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY, ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF PLOTS, FILED ITS RETURN OF INCOME WHICH WAS INITIALLY PROCESSED U/S 143(3) OF THE ACT ON 24.12.2010 DETERMINING THE TOTAL INCOME AT RS. 65,98,200/-. SUBSEQUENTLY THE CIT(A), VIDE ORDER U/S 263 OF THE ACT DATED 13..03.2013, SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO THE A.O TO VERIFY AS TO 2 ITA.NO. 489/HYD/2017 SWADESH VILLAS PVT LTD., HYD. WHETHER THE EXTRA AMOUNTS PAID BY THE ASSESSEE COMPANY OVER AND ABOVE THE CONSIDERATION RECORDED IN THE SALE DEEDS TO LAND OWNERS IN RESPECT OF CERTAIN PROPERTIES PURCHASED BY IT IS TOWARDS PURCHASE OF LAND AND WHETHER SUCH EXTRA AMOUNTS WERE RECEIVED BY THE SELLERS. ACCORDINGLY THE NOTICES U/S 143(2) WERE ISSUED BY THE A.O, IN RESPONSE TO WHICH THE ASSESSEES REPRESENTATIVE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORMATION CALLED FOR. 3. THE A.O OBSERVED THAT DURING THE RELEVANT ASSESSMENT YEAR 2008-09, THE ASSESSEE COMPANY HAS DEBITED AN AMOUNT OF RS. 6,60,83,000/- TOWARDS PURCHASE OF LAND AND OUT OF THE SAID EXPENDITURE, IT HAS CLAIMED TO HAVE PURCHASED SEVEN PROPERTIES OF THE VALUE OF 1,06,83,000/- AS AGAINST THE PURCHASE VALUE OF SALE DEEDS AGGREGATING TO RS. 15,83,000/-. THE ASSESSEE WAS THEREFORE, ASKED TO FURNISH THE CONFIRMATION LETTERS FROM THE SAID SEVEN LAND OWNERS AS TO THE ACTUAL CONSIDERATION RECEIVED BY THEM IN RESPECT OF THE PROPERTIES SOLD BY THEM. THE ASSESSEE FURNISHED THE RECEIPTS ISSUED BY THE LAND IT WAS SUBMITTED OWNERS AT THE TIME OF PURCHASING OF THE LAND AND THAT THE LATEST RECONFIRMATION LETTERS COULD NOT BE OBTAINED FROM THE 3 ITA.NO. 489/HYD/2017 SWADESH VILLAS PVT LTD., HYD. SAID LAND OWNERS DUE TO NON-AVAILABILITY OF THE SAID OWNERS. THE ASSESSEE COMPANY ALSO REQUESTED THE A.O TO ACCEPT THE GENUINENESS OF THE CHEQUE PAYMENTS MADE TOWARDS ADDITIONAL PAYMENTS TO THE LAND OWNERS. THE A.O, HOWEVER, HELD THAT THE ONUS LIES ON THE ASSESSEE TO PROVE THAT THE AMOUNTS PAID OVER AND ABOVE THE SALE CONSIDERATION RECORDED IN THE SALE DEEDS WAS TOWARDS PURCHASE OF THE ABOVE PROPERTIES ONLY. OBSERVING THAT THE ASSESSEE HAS NOT BEEN ABLE TO FURNISH THE CONFIRMATION LETTERS NOR WAS ABLE TO PRODUCE THE PARTIES BEFORE HIM AND ALSO AFTER TAKING NOTE OF THE FACT THAT THE ASSESSEE COMPANY HAS NOT MADE THE ENTIRE ALLEGED PAYMENTS OF EXTRA AMOUNTS DIRECTLY TO THE LAND OWNERS BUT PART OF THE PAYMENTS WERE CLAIMED TO HAVE BEEN MADE TOWARDS ADJUSTMENT OF PAYMENT MADE TO OTHER PERSONS, HE DID NOT ALLOW THE DIFFERENCE OF THE AMOUNT CLAIMED BY THE ASSESSEE AND THE AMOUNT RECORDED IN THE SALE DEEDS. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF THE A.O AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS. 1,09,00,000/- MADE BY THE A.O. 4 ITA.NO. 489/HYD/2017 SWADESH VILLAS PVT LTD., HYD. 2. THE CIT(A) ERRED IN CONFIRMING THE ACTION OF A.O IN DISALLOWING THE ADDITIONAL PAYMENTS OF RS. 1,09,00,000/- WHICH WERE MADE TO LAND OWNERS FOR THE PURPOSE OF ACQUIRING STOCK-IN-TRADE. 3. THE CIT(A) OUGHT TO HAVE ACCEPTED THE ASSESSEES PLEA THAT THE IMPUGNED PAYMENTS OF RS. 1,09,00,000/- TO THE LAND OWNERS ARE TO BE ALLOWED AS A DEDUCTION. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BY THE AUTHORITIES BELOW AND SUBMITTED THAT ALL THE PAYMENTS ARE THROUGH CHEQUES AND THEREFORE THE A.O OUGHT NOT TO HAVE DOUBTED THE PAYMENTS MADE TO THE PARTIES. HE ALSO SUBMITTED THAT THIS IS THE ONLY PROPERTY PURCHASED BY THE ASSESSEE AND THEREFORE THE PAYMENTS MADE TO THE LAND OWNERS ARE TOWARDS PURCHASE OF THE LAND AS IS EVIDENCED BY THE RECEIPTS ISSUED BY THEM AND ALSO THE CHEQUE PAYMENTS. THEREFORE, ACCORDING TO HIM, NO DISALLOWANCES OUGHT TO HAVE BEEN MADE BY THE A.O AND CONFIRMED BY THE CIT(A). 5. THE LD. DR, HOWEVER, SUPPORTED BY THE ORDERS OF THE AUTHORITIES BELOW. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS FILED TWO PAPER BOOKS, ONE PAPER BOOK CONTAINING THE COPIES OF SALE 5 ITA.NO. 489/HYD/2017 SWADESH VILLAS PVT LTD., HYD. DEEDS OF THE LAND PURCHASED BY THE ASSESSEE FROM THE SEVEN PARTIES AND THE SECOND PAPER BOOK CONTAINING THE RECEIPTS FROM SELLERS FOR LAND PAYMENTS, RETURN AND COMPUTATION OF INCOME, PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND BANK STATEMENTS SHOWING THE PAYMENT DETAILS. AFTER GOING THROUGH THESE DOCUMENTS, WE ARE CONVINCED THAT ALL THE PAYMENTS ARE MADE BY CHEQUES AND THEREFORE THE IDENTITY AND GENUINENESS OF THE TRANSACTION IS PROVED. WE FIND THAT THE ASSESSEES CONTENTION THAT THE ASSESSEE HAS NOT PURCHASED ANY OTHER LAND IS ALSO WORTH CONSIDERING TO ACCEPT THAT THE ASSESSEE HAS MADE THE PAYMENTS TO THE LAND OWNERS / VENDORS OVER AND ABOVE THE SALE CONSIDERATION RECORDED IN THE REGISTERED SALE DEEDS. THEREFORE, WE ARE OF THE OPINION THAT THE ADDITION OUGHT NOT TO HAVE BEEN MADE. ACCORDINGLY WE DELETE THE ADDITION. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 18 TH APRIL, 2019 SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 18 TH APRIL, 2019 6 ITA.NO. 489/HYD/2017 SWADESH VILLAS PVT LTD., HYD. KRK 1) SWADESH VILLAS PVT LTD., C/O B. SHANTHI KUMAR, ADVOCATE,111, TARAMANDAL COMPLEX, 5-9-13, SAIFABAD, HYDERABAD. 2) DCIT, CIRCLE 3(1) HYDERABAD. 3) CIT(A)-3, HYDERABAD. 4) PR.CIT-3, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE.