DCIT, Jaipur V. SHREE SALASAR OVERSEAS PVT. LTD., Jaipur

ITA 496/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9716 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: VIJAY GOYAL C A DHK
• Section: 40A(3); 143(3); 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NO. 496/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2012-13. THE DCIT, CIRCLE 2, JAIPUR. CUKE VS. M/S. SHREE SALASAR OVERSEAS PVT. LTD., B-14, HEERA NAGAR, GANGA JAMUNA CROSSING, SHIPRA PATH CORNER, MANSAROVAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAGCS 8940 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL. CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03.03.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08 /03/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A)-I, JAIPUR DATED 03.02.2016 PERTAINING TO ASSESSMENT YE AR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE AD DITION OF RS. 79,22,175/- MADE BY THE ASSESSING OFFICER BY DISALL OWING THE PROVISION FOR DEVELOPMENT EXPENSES MADE BY THE ASSE SSEE, IGNORING THE PROVISIONS OF SECTION 37(1) OF THE ACT AND WRONGLY HOLDING THE SAME AN ASCERTAINED LIABILITY? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN DELETING THE AD DITION OF RS. 1,65,50,000/- MADE BY THE AO U/S 40A(3) OF THE ACT, IGNORING THAT THE SAID EXPENSES WERE INCURRED IN CASH AND WE RE NOT FALLING WITHIN THE EXCEPTIONS PROVIDED UNDER RULE 6 DD OF THE INCOME TAX RULES? 2 ITA NO. 496/JP/2016 SHREE SALASAR OVERSEAS PVT. LTD. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMEN T WAS FRAMED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE ORDER DATED 04.03.2015. WHILE FRAMING THE ASSESSMENT, TH E AO MADE ADDITIONS OF RS. 79,22,175/- ON ACCOUNT OF DISALLOWANCE OF DEVELOPME NT EXPENSES AND RS. 1,65,50,000/- ON ACCOUNT OF PAYMENT MADE IN CASH IN CONTRAVENTION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A), WHO ALLOWED THE APPEAL OF THE ASSESSEE TAKING INTO CONSIDERING THE DECISIONS OF THE TRIBUNAL IN THE ASSESSEES OWN CAS E. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE EARLIER ORDERS OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE INCLUDING ORDER PASSED I N ITA NO. 416/JP/2015 FOR THE ASSESSMENT YEAR 2010-11 ORDER DATED 15.06.2016. TH EREFORE, HE PRAYED THAT THE ORDER OF LD. CIT (A) BE UPHELD. 3.1 ON THE OTHER HAND, THE LD. D/R SUPPORTED THE OR DER OF ASSESSING OFFICER. 3.2 WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE MA TERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. WE FIND THAT THE ISSUES RAISED IN THIS APPEAL ARE SQUARELY COVERED BY THE EARLIER ORDERS OF THE TRIBUNAL. THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 416/JP/ 2015 FOR THE A.Y. 2010-11 VIDE ORDER DATED 15.06.2016 ON THE IDENTICAL GROUNDS HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN RESPECT OF IDENTICAL GROUND NO. 1 ABOVE, THE COORDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSE RVING AS UNDER :- 3 ITA NO. 496/JP/2016 SHREE SALASAR OVERSEAS PVT. LTD. 2.5 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ISSUE IN QUESTION IS COVERED IN FAVOUR OF THE ASSESSEE BY THE EARLIER DE CISIONS OF THE COORDINATE BENCHES IN ASSESSEES OWN CASE. RESPECT FULLY FOLLOWING THE EARLIER DECISIONS OF THE COORDINATE B ENCHES, PROVISION FOR DEVELOPMENT EXPENSES OF RS. 5,18,11,4 42/- IS ALLOWED AS AN ELIGIBLE DEDUCTION AGAINST THE PROFIT S AND GAINS OF THE BUSINESS OF THE ASSESSEE. THUS, THE GROUND RAI SED BY THE REVENUE IS DISMISSED. IN RESPECT OF IDENTICAL GROUND NO. 2 ABOVE, THE COO RDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UND ER :- 3.9 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT DUR ING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS MADE CASH PAY MENTS OF RS. 74.51 LACS IN RESPECT OF 21 SEPARATE TRANSACTIONS T OWARDS PURCHASE OF AGRICULTURE LAND. OUT OF 21 TRANSACTIONS, 19 PA YMENTS WERE MADE TO VARIOUS FARMERS ON SUNDAY AND THE REMAINING TWO PAYMENTS TOTALLING TO RS. 5,51,000/- WAS MADE AFTER THE CLOSE OF THE BANKING HOURS. UNDISPUTEDLY THE GENUINENESS OF THE TRANSACTIONS AND IDENTITY OF THE PARTIES HAVE BEEN CLEARLY SPELT OUT BY THE ASSESSEE AND FORMS PART OF THE ASSESSMENT RE CORDS. THE PAYMENTS WERE MADE TO FARMERS FOR PURCHASE OF THEIR AGRICULTURAL LAND AND THE PAYMENTS ARE DULY SUPPORTED BY THE VAR IOUS DOCUMENTATION IN FORM OF AGREEMENT TO SALE, CONVEYA NCE DEED ETC. THE FACT THAT THE PAYMENTS WERE MADE EARLIER THROUGH CHEQUE CANNOT BE MADE THE SOLE BASIS FOR DISALLOWAN CE U/S 40A(3) OF PAYMENTS BEING MADE IN CASH. THE ASSESSEE HAS E XPLAINED THE CIRCUMSTANCES IN WHICH THE LAND DEALS/NEGOTIATIONS ARE DONE WITH THE FARMERS AND THE NEED FOR CASH PAYMENT GIVEN THE LACK OF BANKING FACILITY, CHEQUES GIVEN EARLIER NOT BEING D EPOSITED THUS REQUIRING CASH PAYMENTS IN RESPECT OF THESE 21 TRAN SACTIONS. FURTHER, IT IS NOTED THAT THESE CASH PAYMENTS OF RS 74.51 LACS CONSTITUTE ONLY A SMALL PERCENTAGE OF TOTAL PAYMENT S TOWARDS PURCHASE OF LAND TOTALLING TO RS. 236.90 CRORES DUR ING THE YEAR 4 ITA NO. 496/JP/2016 SHREE SALASAR OVERSEAS PVT. LTD. UNDER CONSIDERATION AND THUS CONSTITUTE AN EXCEPTIO N RATHER THAN A NORM. IN OUR VIEW, THE NEED FOR CASH PAYMENTS ON SUNDAYS/AFTER BANKING HOURS AND TEST OF BUSINESS EX PEDIENCY HAS BEEN SATISFACTORILY FULFILLED IN THE INSTANT CASE A ND THE SECOND PROVISO TO SECTION 40A(3) READ WITH RULE 6DD WHICH PROVIDES RELAXATION FROM THE RIGOUR OF DISALLOWANCE UNDER SE CTION 40A(3) IS CLEARLY ATTRACTED. 3.10 FURTHER IT IS NOTED THAT THE ASSESSEE HAS BEEN IN THIS LINE OF BUSINESS AND IN THE PAST UNDER SIMILAR CIRCUMSTANCE S, CASH PAYMENTS HAVE BEEN MADE TO THE FARMERS FOR PURCHASE OF THE LAND AND THE CO-ORDINATE BENCH VIDE ITS ORDER DATED 28.0 3.2014 HAS DELETED THE DISALLOWANCE IN A.Y. 2006-07, 2007-08 A ND 2008-09. 3.11 IN THE LIGHT OF ABOVE DISCUSSIONS, FACTS AND C IRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH (SUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE DISALLOWANCE OF RS. 74, 51,000 U/S 40A(3) OF THE INCOME TAX ACT. 1961. WE FIND THAT IN THE YEAR UNDER CONSIDERATION THE IS SUES INVOLVED ARE IDENTICAL TO THE GROUNDS RAISED IN ASSESSMENT YEAR 2010-11 AND THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. D/R HAS ALSO NOT CONTROVERTED THE SUBMISSIONS OF THE ASSESSEE. THEREFORE, RESPECTFULLY FOLLOWING TH E DECISIONS OF THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NO. 416/JP/2015 DATED 15.06.2016, WE FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT (A), THE SAME IS AFFIRMED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 08/03 /2017. SD/- SD/- ( HKKXPUN] ( DQY HKKJR ) (BHAGCHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 08/03/2017. 5 ITA NO. 496/JP/2016 SHREE SALASAR OVERSEAS PVT. LTD. D/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CIRCLE-2, JAIPUR. 2. THE RESPONDENT M/S. SHREE SALASAR OVERSEAS PVT . LTD., JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 496/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR