Appeal details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 4667 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 9 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-09-2017
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Next Hearing Date
07-03-2017
Assessment Year
2006-2007
Appeal Filed On
28-11-2013
Judgement Text
1 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCHES: B NEW DELHI ] BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER I. T. APPEAL NO. 6303/DEL/2013 ASSESSMENT YEAR : 2006-07. COUNTRYWIDE PROMOTERS PVT. LTD., ASSTT. COMMISSIONER M 11, MIDDLE CIRCLE, VS. OF INCOME TAX, CONNAUGHT CIRCUS, CENTRAL CIRCLE : 23, NEW DELHI 110 001. NEW DELHI. PAN : AAACC 3536 A A N D I. T. APPEAL NO. 6342/DEL/2013 ASSESSMENT YEAR : 2006-07. ASSTT. COMMISSIONER COUNTRYWIDE PROMOTERS PVT. LTD., OF INCOME TAX, VS. M 11, MIDDLE CIRCLE, CENTRAL CIRCLE : 23, CONNAUGHT CIRCUS, NEW DELHI. NEW DELHI 110 001. PAN : AAACC 3536 A (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI V. S. RASTOGI, A. R.; DEPARTMENT BY : MS. RACHNA SINGH, CIT [DR]; DATE OF HEARING : 21.08.2017 DATE OF PRONOUNCEMENT : 11.09.2017 O R D E R. 2 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. PER I. C. SUDHIR, J. M. : GROUND NOS. 1 AND 7 ARE NOT PRESSED BY THE ASSESSEE. 2. GROUND NO. 2 OF THE ASSESSEE : THIS GROUND IS AS UNDER :- 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (APPEALS) ERRED IN REJECTING THE APPELLANTS CONTENTION THAT THE ASSUMPTION OF JURISDICTION BY ASSESSING OFFICER FOR MAKING ASSESSMENT U/S 153C OF THE I.T. ACT WAS BAD ON FACTS AND IN LAW, THEREBY RENDERING THE WHOLE ASSESSMENT ALSO AS BAD IN LAW AND VOID AB-INITIO. 3. IN THIS GROUND, THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER IN MAKING ASSESSMENT U/S 153C. IN ELABORATION OF THIS CONTENTION THE ASSESSEE HAS TAKEN A SPECIFIC GROUND BY WAY OF ADDITIONAL GROUND, AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (APPEALS) ERRED IN REJECTING THE APPELLANTS CONTENTION THAT THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER FOR MAKING ASSESSMENT U/S 153C WAS BAD ON FACTS AND IN LAW ON THE GROUND THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON HAD NOT RECORDED SATISFACTION IN THE FILE OF THE SEARCHED PERSON, FOR ASSUMING JURISDICTION U/S. 153C OF THE ACT IN THE CASE OF THE APPELLANT. 3 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 3.1 ASSESSEE IS ONE OF THE GROUP COMPANY OF M/S BPTP LTD, WHICH IS THE FLAGSHIP COMPANY, ENGAGED IN THE DEVELOPMENT OF REAL ESTATES. THE ASSESSEE HAS EITHER ACTED AS A LAND HOLDING COMPANY PURCHASING LAND AND TRANSFERRING THE DEVELOPMENT RIGHTS IN RESPECT OF LAND PURCHASED TO BPTP LTD. OR ACCUMULATING DEVELOPMENT RIGHTS IN RESPECT OF LAND PURCHASED BY OTHER GROUP COMPANIES AND TRANSFERRING THESE LAND DEVELOPMENT RIGHTS TO BPTP LTD. A SEARCH WAS CONDUCTED ON M/S BPTP LTD ON 15.11.2007 WHEREBY SOME DOCUMENTS WERE SEIZED. AS SOME DOCUMENTS WERE FOUND TO BELONG TO THE ASSESSEE I.E. M/S COUNTRYWIDE PROMOTERS PVT. LTD, ACTION U/S 153C OF THE ACT WAS TAKEN AND A NOTICE U/S 153C OF THE ACT WAS ISSUED TO THE ASSESSEE ON 16.07.2009. RETURN WAS FILED BY THE ASSESSEE ON 25.08.2009 IN RESPONSE TO THE NOTICE UNDER SECTION 153C. ASSESSMENT WAS MADE ON 31.12.2009, WHICH IS THE SUBJECT MATTER OF THE PRESENT APPEAL. 3.2 IT WAS CONTENDED BY THE LEARNED AR OF THE ASSESSEE THAT IN THE PRESENT CASE THE SATISFACTION NOTE WAS NOT RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON NAMELY, M/S BPTP LTD IN THE FILE OF BPTP LTD. INSTEAD, THE SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER OF COUNTRYWIDE PROMOTERS PVT. LTD I.E. THE ASSESSEE, BEING THE OTHER PERSON IN THE FILE OF THE ASSESSEE. RELYING ON THE CIRCULAR NO.24/2015 DATED 31.12.2015 OF CBDT, IT WAS CONTENDED THAT THE SATISFACTION NOTE HAVING NOT BEEN RECORDED AS ENVISAGED BY LAW, THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S. 153C IN THE 4 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. PRESENT CASE WAS BAD IN LAW. ACCORDINGLY, IT WAS SUBMITTED THAT THE ASSESSMENT MADE WAS ALSO BAD IN LAW AND BE ANNULLED. 3.3 ON BEHALF OF THE REVENUE, LEARNED CITDR OBJECTED TO THE ADMISSION OF ADDITIONAL GROUND FOR WHICH RELIANCE WAS PLACED ON NUMBER OF CASES. ON MERITS, RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN GANPATI FINCAP SERVICES PVT. LTD VS. CIT DECIDED ON 25.05.2017 IN WP(C) 525/2015.IT WAS POINTED OUT THAT IN THE PRESENT CASE, THE AO OF THE SEARCHED PERSON I.E. M/S BPTP LTD, AND OF THE ASSESSEE BEING THE SAME, THERE WAS NO INFIRMITY IN RECORDING OF THE SATISFACTION, AS HELD IN THE AFORESAID CASE BY THE HONBLE DELHI HIGH COURT. 3.4 SUBMISSIONS MADE BY THE PARTIES HAVE BEEN CONSIDERED. IT CANNOT BE DOUBTED THAT THE OBJECTION RAISED IN THE ADDITIONAL GROUND BY THE ASSESSEE IS PURELY A QUESTION OF LAW, GOING TO THE ROOT OF THE MATTER AND THE RELEVANT FACTS ARE ALSO ON RECORD. ACCORDINGLY, THE ADDITIONAL GROUND, TAKEN BY THE ASSESSEE, IS ADMITTED BASED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN NTPC VS. DCIT 229 ITR 383 (SC). ON MERITS, THE CONTENTION OF THE LEARNED CITDR IS, HOWEVER ACCEPTED, WHICH IS BASED ON THE JUDGMENT IN GANPATI FINCAP SERVICES (SUPRA). SINCE THE ASSESSING OFFICER OF THE SEARCHED PERSON ALSO HAPPENS TO BE ASSESSING OFFICER OF THE OTHER PERSON I.E. THE ASSESSEE, THERE IS NO INFIRMITY IN THE SATISFACTION NOTE RECORDED IN THE PRESENT CASE. ACCORDINGLY, BOTH GROUND NO. 2 AND THE ADDITIONAL GROUND, ARE REJECTED. 5 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 4. GROUND NO.3 AND 3.1 OF THE ASSESSEES APPEAL : THESE GROUNDS ARE AS UNDER :- 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (APPEALS) ERRED IN HOLDING, TO QUOTE, THAT SEIZED DOCUMENTS DEFINITELY PROVES THAT INTEREST IS PAID ON PDC IN VIEW OF THE FACT THAT NO ENQUIRIES WERE MADE FROM ANY OF THE ALLEGED RECIPIENTS OF INTEREST TO THAT EFFECT AND NONE WAS CONFRONTED WITH THE RELEVANT DOCUMENT(S); 3.1 THAT THE FINDINGS OF THE ASSESSING OFFICER AND CIT (APPEALS) ARE BASED ON MERE SURMISES AND CONJECTURES WITHOUT PROOF AND CORROBORATION BY INDEPENDENT EVIDENCE THAT ANY INTEREST WAS ACTUALLY PAID BY THE APPELLANT AND RECEIVED BY THE RECIPIENT. 5. GROUND NO.1 OF DEPARTMENT APPEAL : THIS GROUND IS AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT (APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.1,72,42,433/- MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2006-07 ON ACCOUNT OF INTEREST ON PDCS PAID OUTSIDE THE BOOKS OF ACCOUNT. 5.1 THE GROUNDS OF THE ASSESSEE AND THE DEPARTMENT ARE DEALT WITH TOGETHER. 6 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 5.2 IT HAS BEEN POINTED BY THE ASSESSEE THAT THE ADDITION OF RS.1,72,42,433/- HAS SINCE BEEN RECTIFIED TO RS.77,36,402/- BY THE ASSESSING OFFICER VIDE ORDER U/S 154 DATED 31.03.2010 AND COPY OF ORDER U/S 154 DATED 31.03.2010 HAS BEEN FILED AT PAGE NO.99-100 OF PAPER BOOK FILED ON 21.06.2017. 5.3 BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS. DURING ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT THE ASSESSEE COMPANY IS ONE OF THE GROUP COMPANY OF BPTP GROUP. THE ASSESSEE HAD PURCHASED SEVERAL TRACTS OF LAND IN THE NCR (NATIONAL CAPITAL REGION) AND TRANSFERRED DEVELOPMENT RIGHTS IN RESPECT OF LAND PURCHASED TO BPTP LTD. LIKE AS OTHER GROUP COMPANIES HAVE PURCHASED LAND AND TRANSFERRED DEVELOPMENT RIGHTS TO ASSESSEE. IN SOME CASES, THE ASSESSEE COMPANY HAS MADE ONLY PART PAYMENT OF SALE CONSIDERATION TO THE SELLERS AT THE TIME OF EXECUTING SALE DEED AND BALANCE PAYMENT IS MADE BY WAY OF POST DATED CHEQUES (PDCS). DURING THE ASSESSMENT, THE ASSESSING OFFICER OBTAINED DETAILS OF SUCH PDCS GIVEN AT THE TIME OF REGISTRATION TO THE SELLER AND DATE OF ENCASHMENT. THE ASSESSING OFFICER APPLIED RATE OF15% INTEREST PER ANNUM PAID FOR THE PERIOD FROM SALE DEED TO DATE OF ENCASHMENT, ON THE AMOUNT OF PDCS IN ALL CASES ON THE BASIS OF SEIZED MATERIAL RELATED TO ANY OF THE COMPANIES OF BPTP GROUP INCLUDING ASSESSEE. THE ASSESSING OFFICER GAVE THE FINDING IN THE ASSESSMENT ORDER THAT TOTAL SUCH INTEREST PAYABLE COMES TO RS.17242433/- (WHICH WAS RECTIFIED LATER ON U/S 154 TO RS.7736402/-) ON PDCS AND SUCH INTEREST WAS HELD TO BE PAID IN CASH OUTSIDE THE BOOKS 7 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. OF ACCOUNT. THEREFORE, SUCH INTEREST WAS ADDED AS INCOME ON ACCOUNT OF UNACCOUNTED / UNEXPLAINED EXPENSES. 5.4 AGGRIEVED BY ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT (APPEALS). THE LEARNED CIT (APPEALS) DEALT WITH THE MATTER IN PARA 6 OF HIS ORDER. THE LEARNED CIT (APPEALS) AFTER EXAMINING THE SEIZED PAPERS / DOCUMENTS DIRECTED TO RECOMPUTE INTEREST ON PDCS. HIS DIRECTIONS CONTAINED IN PARA 6.5 WERE AS UNDER :- IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE THEN ASSESSING OFFICER IS DIRECTED TO RECOMPUTED INTEREST ON PDCS AFTER SIX MONTHS FROM THE 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 5.5 AS A RESULT OF THIS ORDER THE ENTIRE ADDITION OF RS.77,36,402/- AS REVISED IN ORDER U/S 154 DATED 31.03.2010 WAS DELETED. 6. ON BEHALF OF ASSESSEE, RELIANCE WAS PLACED ON THE ORDER OF TRIBUNAL IN C BENCH, DELHI IN THE CASE OF GROUP COMPANY M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. DATED 31.10.2014 IN ITA NOS. 1674/D/2013 AND 1765/D/2013 FOR ASSESSMENT YEAR 2008-09. IN THIS ORDER, IN PARA 3, THE TRIBUNAL HELD AS UNDER :- THE CIT (APPEALS) DIRECTED TO RECALCULATE THE INTEREST ON PDCS AND THERE WAS A SOUND LOGIC FOR SUCH DIRECTION. HIS DIRECTION IS 8 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. BASED ON MATERIAL FOUND AND SEIZED AT THE TIME OF SEARCH. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF LEARNED CIT(A) IN THIS REGARD AND ACCORDINGLY, WE REJECT GROUND NO.1 OF THE REVENUES APPEAL. 6.1 IT WAS SUBMITTED BY THE LEARNED AR THAT THE FACTS OF THE CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. (SUPRA) AND THOSE OF THE ASSESSEE ARE IDENTICAL. IT WAS STATED THAT THE SAID ORDER IN M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. HAS BEEN ACCEPTED BY THE DEPARTMENT AND NO APPEAL HAS BEEN FILED TO THE HONBLE HIGH COURT. IT WAS ALSO POINTED THAT THE SAID ORDER HAS SINCE BEEN FOLLOWED IN NUMBER OF THE CASES BY THE COORDINATES BENCHES, OF ITAT, DELHI FOR WHICH A COMPILATION WAS FILED. IT WAS THEREFORE SUBMITTED THAT THE ORDER IN CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. MAY BE FOLLOWED AND THE APPEAL OF THE DEPARTMENT ON GROUND NO. 1 BE DISMISSED. 6.2 THE LEARNED CITDR IN HER SUBMISSIONS CONTENDED THAT THE FACTS OF THE CASE OF THE ASSESSEE WERE DISTINGUISHABLE FROM THE FACTS OF THE CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. SHE FILED A PAPER BOOK, CONTAINING 54 SEIZED DOCUMENTS, WHICH WERE CATEGORIZED AS PDC 1 TO PDC 54 BY THE ASSESSING OFFICER AND WERE ANNEXED TO THE ASSESSMENT ORDER. SHE MADE HER ARGUMENTS ON THE PREMISE THAT THE FACTS IN THE PRESENT CASE WERE DISTINGUISHABLE FROM THE FACTS IN THE CASE OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. SHE ARGUED 9 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ON SOME OF THE SEIZED DOCUMENTS FROM THE PAPER BOOK FILED BY HER AT LENGTH WHICH WERE RELATED TO ADDITION OF INTEREST ON PDCS PAID IN CASH OUTSIDE BOOKS OF ACCOUNT TO PUT FORTH HER ARGUMENT THAT TREND OF PAYMENT OF INTEREST ON PDCS WAS CLEARLY VISIBLE AND PLEADED THAT THE ORDER OF THE TRIBUNAL IN M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD BE NOT FOLLOWED AND INSTEAD THE ORDER OF THE ASSESSING OFFICER BE SUSTAINED, WHERE THE ADDITION OF RS.77,36,402/- WAS MADE IN RESPECT OF PDC INTEREST RIGHT FROM THE DATE OF SALE DEEDS TO THE DATE OF ENCASHMENT OF THE CHEQUES. 6.3 IN THE REJOINDER THE LEARNED AR FILED COPIES OF ALL SEIZED DOCUMENTS, EXPLANATION IN RESPECT OF EACH AND EVERY SEIZED DOCUMENTS AS TO SHOW TO WHOM THE SAID SEIZED RECORDS BELONG / RELATE / PERTAIN TO AND THE PERIOD TO WHICH THE SAID SEIZED DOCUMENTS PERTAIN TO, COPIES OF REPLIES FILED BEFORE ASSESSING OFFICER. THE LD. AR STRONGLY OBJECTED TO THE STATEMENT MADE BY THE LEARNED CITDR TO THE EFFECT THAT THE FACTS IN THE CASE OF THE ASSESSEE WERE DIFFERENT, AND WERE THEREFORE DISTINGUISHABLE, FROM THE FACTS OF THE CASE IN M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT THE ASSESSING OFFICER IN THE PRESENT CASE HAD LISTED 54 SEIZED DOCUMENTS (SEIZED IN THE SEARCH ON BPTP LTD. ON 15.11.2007) AND MARKED THEM AS PDC 1 TO PDC 54. THE ASSESSING OFFICER DEALT WITH THESE DOCUMENTS IN PARA 2.2 OF THE ASSESSMENT ORDER, DESCRIBING EACH DOCUMENT BY THE PARTICULAR PDC NUMBER GIVEN TO THE SAID DOCUMENT. ALL THE 54 SEIZED DOCUMENTS WERE MADE AS ANNEXURES TO THE ASSESSMENT ORDER. HE GAVE FINDING IN THE SAME PARA AT PAGES 13 TO 14 AND HELD 10 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. THAT INTEREST TO BE ADDED AS INCOME AND BE TAXED ON ALL THE PDCS FROM THE DATE OF SALE DEED TO TILL THE DATE OF ENCASHMENT. HE WORKED OUT THE ADDITION AT RS.1,72,42,433/- WHICH WAS LATER ON REDUCED TO RS.7736402/- UNDER SECTION 154. THE LEARNED AR FILED COPIES OF THOSE SEIZED DOCUMENTS WHICH WERE RELIED AND ARGUED BY THE LD. CITDR AND SHOW THAT MOST OF THESE DOCUMENTS EITHER DO NOT BELONG TO THE ASSESSEE OR DID NOT PERTAIN TO THE YEAR UNDER CONSIDERATION. 6.4 IT WAS SUBMITTED THAT IN THE ASSESSMENT ORDER OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD. ALSO, SAME 54 SEIZED DOCUMENTS WERE USED BY THE ASSESSING OFFICER. NOT ONLY THAT THE SAME SEIZED DOCUMENTS WERE USED IN THE ASSESSMENT OF M/S IAG PROMOTERS AND DEVELOPERS PVT. LTD., THE CONCLUSION DREW BY THE ASSESSING OFFICER IN THAT CASE WAS ALSO IDENTICAL. THE ASSESSING OFFICER HAD WORKED THE ADDITION OF INTEREST ON PDCS OF RS.506625/- IN THAT CASE. 6.5 WE WERE ALSO TAKEN THROUGH THE RELEVANT PORTIONS OF THE ORDERS OF THE LEARNED CIT (APPEALS) IN THE TWO CASES. THE LEARNED CIT (APPEALS) IN BOTH THE CASES SPECIFICALLY DEALT WITH THE VERY SAME 54 SEIZED DOCUMENTS AND GAVE HIS FINDING. IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD., THE LEARNED CIT (APPEALS) DEALT WITH THE SEIZED DOCUMENTS IN PARA 5 AT PAGES 4 TO 15 AND GAVE HIS FINDING IN PARA 5.4; THE CONCLUDING PORTION OF THE FINDING WAS THIS :- 11 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. IF IT IS NOT POSSIBLE TO WORK OUT THE EXTENSION OF PDCS IN EACH CASE THEN ASSESSING OFFICER IS DIRECTED TO RECOMPUTED INTEREST ON PDCS AFTER SIX MONTHS FROM THE 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 6.6 IT WAS ALSO SHOWN THAT IN THE PRESENT CASE, THE LEARNED CIT (APPEALS) DEALT WITH THE SAME 54 SEIZED DOCUMENTS IN PARA 6 AT PAGES 9 TO 19. AFTER DEALING WITH SAME DOCUMENTS AS WERE DEALT WITH IN CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. AND AFTER GOING THROUGH THEM THE LEARNED CIT (APPEALS) GAVE SIMILAR FINDING AS QUOTED ABOVE, WHICH WAS CONTAINED IN PARA 6.5. 6.7 HAVING SHOWN THAT THE FACTS OF THE TWO CASES BEING EXACTLY IDENTICAL, AND THE ORDERS OF THE ASSESSING OFFICER AND THE LD. CIT (APPEALS) ALSO BEING IDENTICAL, IT WAS SUBMITTED THAT THE LEARNED CITDR WAS FACTUALLY WRONG AND INCORRECT IN STATING THAT THE FACTS OF THE PRESENT APPEAL WERE DIFFERENT AND THEREFORE SHE ERRONEOUSLY SOUGHT LIBERTY TO DISTINGUISH THEM. SINCE THE FACTS IN THE TWO CASES WERE IDENTICAL, THERE WAS NO QUESTION OF DISTINGUISHING THEM. IT WAS PLEADED BY THE LEARNED AR THAT ON THE FACTS STATED ABOVE IN VIEW OF PRINCIPLES OF JUDICIAL DISCIPLINE AND DOCTRINE OF PRECEDENT, THE ORDER OF THE ITAT BENCH IN CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. (SUPRA) BE FOLLOWED. 12 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 6.8 IN SUPPORT FOLLOWING SUBMISSION WAS MADE WHERE ABOVE PRINCIPLES WERE LAID DOWN :- I) HONBLE GUJARAT HIGH COURT IN SAYAJI IRON AND ENGINEERING CO. V. CIT 253 ITR 749 (GUJ.) HAS REITERATED THAT NO TRIBUNAL OF FACT HAS ANY RIGHT OR JURISDICTION TO COME TO A CONCLUSION ENTIRELY CONTRARY TO THE ONE REACHED BY ANOTHER BENCH OF THE SAME TRIBUNAL ON THE SAME FACTS , AND IF A BENCH OF A TRIBUNAL ON IDENTICAL FACTS IS ALLOWED TO COME TO A CONCLUSION DIRECTLY OPPOSED TO THE CONCLUSION REACHED BY ANOTHER BENCH OF THE TRIBUNAL ON AN EARLIER OCCASION, THAT WILL BE DESTRUCTIVE OF THE INSTITUTIONAL INTEGRITY ITSELF. IF THE TRIBUNAL WANTS TO TAKE AN OPINION DIFFERENT FROM THE ONE TAKEN BY AN EARLIER BENCH, IT SHOULD PLACE THE MATTER BEFORE THE PRESIDENT OF THE TRIBUNAL SO THAT HE COULD HAVE THE CASE REFERRED TO A FULL BENCH OF THE TRIBUNAL CONSISTING OF THREE OR MORE MEMBERS FOR WHICH THERE IS A PROVISION IN THE ACT. REFERENCE WAS MADE TO THE SIMILAR VIEW TAKEN IN CIT VS. L.G. RAMAMURTHI 110 ITR 453 (MAD.). REFERENCE WAS ALSO MADE TO THE JUDGMENT OF HONBLE SUPREME COURT IN UNION OF INDIA VS. PARAS LAMINATES PVT. LTD. 1991 AIR 696, WHERE IT WAS HELD :- IT IS TRUE THAT A BENCH OF TWO MEMBERS MUST NOT LIGHTLY DISREGARD THE DECISION OF ANOTHER BENCH OF THE SAME TRIBUNAL ON AN IDENTICAL QUESTION . -------------------------------. THE RATIONALE 13 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. OF THIS RULE IS THE NEED FOR CONTINUITY, CERTAINTY AND PREDICTABILITY IN THE ADMINISTRATION OF JUSTICE. PERSONS AFFECTED BY DECISIONS OF TRIBUNALS OR COURTS HAVE A RIGHT TO EXPECT THAT THOSE EXERCISING JUDICIAL FUNCTIONS WILL FOLLOW THE REASON OR GROUND OF THE JUDICIAL DECISION IN THE EARLIER CASES ON IDENTICAL MATTERS. CLASSIFICATION OF PARTICULAR GOODS ADOPTED IN EARLIER DECISIONS MUST NOT BE LIGHTLY DISREGARDED IN SUBSEQUENT DECISIONS, LEST SUCH JUDICIAL INCONSISTENCY SHOULD SHAKE PUBLIC CONFIDENCE IN THE ADMINISTRATION OF JUSTICE. HONBLE MP HIGH COURT IN AGARWAL WAREHOUSING AND LEASING LTD V. CIT 257 ITR 235 (MP) HAS HELD THAT THE ORDERS PASSED BY THE TRIBUNAL ARE BINDING ON ALL THE TAX AUTHORITIES FUNCTIONING UNDER THE JURISDICTION OF THE TRIBUNAL. WHILE SO HOLDING IT FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN UOI V. KAMLAKSHI FINANCE CORPORATION LTD AIR 1992 SC 711, 712 WHICH HAS RULED THUS :- THE PRINCIPLE OF JUDICIAL DISCIPLINE REQUIRE THAT THE ORDERS OF THE HIGHER APPELLATE AUTHORITIES SHOULD BE FOLLOWED UNRESERVEDLY BY THE SUBORDINATE AUTHORITIES. THE MERE FACT THAT THE ORDER OF THE APPELLATE AUTHORITY IS NOT ACCEPTABLE TO THE DEPARTMENT IN ITSELF AN OBJECTABLE PHRASE AND IS THE SUBJECT MATTER OF AN APPEAL CAN FURNISH NO GROUND FOR NOT FOLLOWING IT UNLESS ITS OPERATION HAS BEEN SUSPENDED BY A COMPETENT COURT . IF THIS HEALTHY 14 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. RULE IS NOT FOLLOWED, THE RESULT WILL ONLY BE UNDUE HARASSMENT TO ASSESSEES AND CHAOS IN ADMINISTRATION OF TAX LAW. II) INSTRUCTIONS OF CBDT F. NO. 279/MISC/52/2014-(ITJ) DT. 10.12.2015 CBDT HAS DIRECTED IN THESE INSTRUCTIONS TO THE FIELD OFFICERS THAT IF A QUESTION RAISED IS COVERED BY ANY EARLIER DECISION OF THE TRIBUNAL, WHICH HAS BEEN ACCEPTED BY THE REVENUE, AND NO APPEAL HAS BEEN FILED, THEN SUCH APPEALS SHOULD EITHER BE WITHDRAWN OR DISMISSED AS NOT PRESSED . UNDERSTANDABLY, VIOLATION OF THESE INSTRUCTIONS IS BOUND TO BE ADVERSELY VIEWED BY THE CBDT, IF IT COMES TO THE NOTICE OF THE BOARD. SECTION 119(1) OF THE IT ACT, 1961 STATES :- 119. INSTRUCTIONS TO SUBORDINATE AUTHORITIES.- (1) THE BOARD MAY, FROM TIME TO TIME, ISSUE SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS TO OTHER INCOME-TAX AUTHORITIES AS IT MAY DEEM FIT FOR THE PROPER ADMINISTRATION OF THIS ACT, AND SUCH AUTHORITIES AND ALL OTHER PERSONS EMPLOYED IN THE EXECUTION OF THIS ACT SHALL OBSERVE AND FOLLOW SUCH ORDERS, INSTRUCTIONS AND DIRECTIONS OF THE BOARD. SECTION 119(1) USES THE WORD SHALL, WHICH MEANS THAT THE ORDERS / DIRECTIONS / INSTRUCTIONS OF THE BOARD HAVE TO BE FOLLOWED MANDATORILY / UNRESERVEDLY BY THE AUTHORITIES 15 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. WORKING UNDER THE CBDT. THE LEARNED CIT[DR] IS ONE SUCH AUTHORITY FUNCTIONING ON WHOM THE AFORESAID INSTRUCTIONS ARE BINDING. 6.9 IT WAS ALSO SUBMITTED BY THE LEARNED AR THAT THE ORDER IN CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. HAS BEEN ACCEPTED BY THE DEPARTMENT AND HAS BEEN FOLLOWED BY THE COORDINATE BENCHES OF ITAT, ON IDENTICAL FACTS IN THE FOLLOWING CASES :- ORDER OF ITAT F BENCH, NEW DELHI IN M/S POONAM PROMOTER AND DEVELOPER PVT. LTD. IN ITA NO.4064/DEL/2013 & 1590/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT F BENCH, NEW DELHI IN CASE OF M/S PRECISION INFRASTRUCTURE PVT. LTD 2542/DEL/2013 DATED 09.01.2015 FOR THE ASSESSMENT YEAR 2008-09; ORDER OF ITAT G BENCH, NEW DELHI IN M/S SARASWATI KUNJ INFRASTRUCURE PVT. LTD IN ITA NO. 1369/DEL/2013 & 1766/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S BUSINESS PARK BUILDERS PVT. LTD IN ITA NO. 1768/DEL/2013 & 1530/DEL/2013 FOR THE AY 2006-07 AND ITA NO.1733/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; 16 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S ANUPAM TOWER PVT. LTD IN ITA NO.1740/DEL/2013 & 1536/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; COPY OF ORDER OF ITAT C BENCH, NEW DELHI IN CASE OF M/S ISG ESTATE PVT. LTD. IN ITA. NOS. 1532/DEL/2013 AND 1756/DEL/2013 DATED 23.01.2015 FOR THE ASSESSMENT YEAR 2006-07; COPY OF ORDER OF ITAT B BENCH, NEW DELHI IN M/S FRAGRANCE CONSTRUCTION PVT. LTD IN ITA NO. 2547/DEL/2013 & 2314/DEL/2013 FOR THE ASSESSMENT YEAR 2008-09; COPY OF ORDER OF ITAT B BENCH, NEW DELHI IN CASE OF M/S DRUZBA OVERSEAS PVT. LTD IN ITA NO. 2545/DEL/2013 DATED 25.02.2015 FOR THE ASSESSMENT YEAR 2008-09; COPY OF ORDER OF ITAT B BENCH, NEW DELHI IN CASE OF M/S EVENTUAL BUILDERS PVT. LTD IN ITA NO. 1368/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; COPY OF ORDER OF ITAT A BENCH, NEW DELHI IN M/S BUSINESS PARK OVERSEAS PVT. LTD IN ITA NO. 1731/DEL/2013 & 1403/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07. 17 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 6.10 IT WAS ALSO SUBMITTED BY THE LEARNED AR THAT THE ARGUMENTS MADE BY THE LEARNED CITDR ON SOME OF THE SEIZED DOCUMENTS BE NOT CONSIDERED AS IT WOULD AMOUNT TO REVISITING THE SAME DOCUMENTS, WHICH WERE ALREADY CONSIDERED BY THE ITAT IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. AND BY THE COORDINATE BENCHES IN THE VARIOUS CASES WHERE ON SAME FACTS THE ORDER IN M/S IAG PROMOTERS & DEVELOPERS PVT. LTD WAS FOLLOWED. IT WAS ALSO REITERATED THAT IN THE CIRCUMSTANCES, LIKE THE PRESENT CASE, WHERE ON SIMILAR FACTS THE ORDERS OF THE TRIBUNAL HAVE BEEN ACCEPTED, EVEN ADMINISTRATIVELY THE CBDT HAS INSTRUCTED THE DEPARTMENT NOT TO PRESS SUCH MATTERS AND INSTEAD WITHDRAW THE APPEALS OR GET THEM DISMISSED. ALL THE ORDERS OF THE BENCHES INCLUDING THAT IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD, IT WAS REITERATED, HAVE BEEN ACCEPTED BY THE DEPARTMENT. THE LEARNED AR RELIED ON JUDGEMENT OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN CASE OF KABUL CHAWLA AND LATEST JUDGEMENT IN CASE OF MEETA GUTGUTIA TO PUT FORTH ARGUMENT THAT AS IT IS HELD BY HONBLE HIGH COURT IN CASES AS MENTIONED SUPRA THAT IN SEARCH CASES WHERE ASSESSMENT IS COMPLETED UNDER SECTION 153-A / 153-C, THE ADDITION MUST BE RESTRICTED TO INCRIMINATING SEIZED DOCUMENRTS ONLY. AS IN THIS CASE, NONE OF THE INCRIMINATING SEIZED DOCUMENTS RELATED TO ISSUE OF PAYMENT OF INTEREST ON PDCS BELONG TO APPELLANT AND ALSO NONE OF THE DOCUMENTS PERTAIN TO YEAR UNDER CONSIDERATION, ACCORDINGLY NO ADDITION IS TO BE MADE IN RESPECT OF ISSUE RELATED TO PAYMENT OF INTEREST ON PDCS IN CASH OUTSIDE BOOKS OF ACCOUNTS FOLLOWING THE JUDGEMENTS AS REFERRED ABOVE. 18 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 6.11 WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES THAT THE ASSESSEE IS RIGHT IN POINTING OUT THAT THE FACTS IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD AND THOSE IN THE CASE OF THE ASSESSEE ARE IDENTICAL. SAME 54 SEIZED DOCUMENTS WERE USED BY THE AOS IN MAKING THE ASSESSMENTS IN BOTH THE CASES. THE CONCLUSION DRAWN WAS ALSO THE SAME. FURTHER, THE ORDERS OF THE LEARNED CIT (APPEALS) IN BOTH THE CASES ARE ALSO IDENTICAL. BOTH THE ORDERS ARE PASSED BY THE SAME LEARNED CIT (APPEALS), WHO EXAMINED EACH OF THE SEIZED DOCUMENT AND GAVE HIS FINDING. THE FINDINGS OF THE LEARNED CIT (APPEALS) IN BOTH THE CASES ARE SAME. THE FINDING OF THE LEARNED CIT (APPEALS) HAS BEEN AFFIRMED BY THE TRIBUNAL IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. (SUPRA). BY THE PRINCIPLE OF JUDICIAL DISCIPLINE AND DOCTRINE OF PRECEDENT AND AS THERE IS NO CHANGE IN THE FACTS OF TWO CASES, WE ARE BOUND BY THE ORDER IN THE CASE OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD., WHICH HAS ALSO BEEN CONSISTENTLY FOLLOWED BY VARIOUS COORDINATE BENCHES OF THE ITAT. 7. BEFORE CONCLUDING, IT MAY BE STATED THAT THE LEARNED CITDR ARGUED SOME OF THE SEIZED DOCUMENTS. IN REJOINDER THE LEARNED AR HAS EXPLAINED IN WRITING THOSE DOCUMENTS AND SUBMITTED THAT MOST OF THESE SEIZED DOCUMENTS NOT BELONG TO ASSESSEE AND NONE OF THESE SEIZED DOCUMENT RELATE TO PERIOD UNDER CONSIDERATION. WE ARE AFRAID THAT WE CANNOT TAKE COGNIZANCE OF THE ARGUMENTS MADE BY THE CITDR ON THE SEIZED DOCUMENTS AND ALSO OF THE REJOINDER BY THE LEARNED AR 19 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ON THEM, BECAUSE THAT WOULD BE AMOUNTING TO REVISITING THE SAME DOCUMENTS, WHICH HAVE ALREADY BEEN CONSIDERED IN THE M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. (SUPRA) BY THE TRIBUNAL AND ON WHICH DECISION HAS ALREADY BEEN GIVEN AND ALSO BY THE SUCCESSIVE BENCHES IN THE CASES WHICH FOLLOWED THE ORDER OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. ACCORDINGLY, FOLLOWING THE ORDER OF M/S IAG PROMOTERS & DEVELOPERS PVT. LTD. (SUPRA) THE ORDER OF THE LEARNED CIT (APPEALS) IS SUSTAINED AND THE GROUND OF THE REVENUE IS REJECTED. AS A RESULT, THE GROUNDSNO.3 AND 3.1 OF THE ASSESSEE WILL NOT SURVIVE AND ARE REJECTED AS SUCH. 8. GROUNDS NOS. 4, 4.1 & 4.2 OF THE ASSESSEE : THESE GROUNDS ARE AS UNDER :- 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (APPEALS) ERRED IN NOT ACCEPTING THE APPELLANTS CONTENTION THAT ADDITIONAL PAYMENTS HAVING NOT BEEN CLAIMED AS DEDUCTION BY APPELLANT, NO DISALLOWANCE COULD HAVE BEEN MADE IN THE HANDS OF THE APPELLANT. 4.1 THAT WITHOUT PREJUDICE THE CIT (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF ADDITIONAL PAYMENTS MADE TO THE RECIPIENTS WHO WERE NOT THE OWNERS OF LAND AND TO THE PAYMENT MADE IN CASH. 4.2 THAT WITHOUT PREJUDICE THE CIT (APPEALS) ERRED IN NOT HIMSELF QUANTIFYING THE ADDITION TO BE MADE. 20 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 8.1 GROUND NO. 2 OF THE DEPARTMENT : THIS GROUND IS AS UNDER :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.25924132/- MADE BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2006-07 RESPECTIVELY, IN VIEW OF THE PROVISIONS OF SECTION 37(1) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF ADDITIONAL PAYMENT IN VIOLATION OF STAMP DUTY ACT, 1899. 8.2 BOTH THESE GROUNDS ARE DEALT WITH TOGETHER. 9. THE ASSESSING OFFICER MADE A DISALLOWANCE OF RS.2,59,24,132/- ON ACCOUNT OF ADDITIONAL PAYMENT MADE FOR THE PURCHASE OF LAND. THE ASSESSEE COMPANY PURCHASED LANDS FROM FARMERS AND LAND OWNERS AND TRANSFERRED100% DEVELOPMENT RIGHTS IN LAND TO THE FLAGSHIP COMPANY I.E M/S BPTP LTD UNDER COLLABORATION AGREEMENT FOR DEVELOPMENT AND RECEIVED RS.40000/- PER ACRE FROM BPTP LTD AS COLLABORATION FEES. IT WAS EXPLAINED ABOUT NATURE OF ADDITIONAL PAYMENT THAT IT IS A PAYMENT WHICH IS MADE SUBSEQUENT TO REGISTRATION OF SALE DEED EITHER TO SELLER OF LAND OR THEIR RELATIVES TO SETTLE THE DISPUTES IF ANY ON ACCOUNT OF INCREASE IN PRICES OF LAND AS ON DATE OF SALE DEED TO TILL THE DATE OF ACTUAL PAYMENT, STANDING CROPS ON THE LAND, TUBE WELL CONNECTION, STRUCTURE ON LAND ETC. OR TO ANY THIRD PARTIES HAVING ANY INTEREST IN THE LAND. THE ASSESSING OFFICER HELD THAT THE ADDITIONAL PAYMENT IS NOT ALLOWABLE AS PER EXPLANATION 37(1) OF THE 21 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ACT AS THE SAME WAS TO AVOID CORRECT STAMP DUTY. THE ASSESSEE CHALLENGED THE ADDITION MADE BEFORE THE LEARNED CIT (APPEALS). IT WAS SUBMITTED THAT NO DEDUCTION HAS BEEN CLAIMED BY ASSESSEE WITH REGARD TO THE ADDITIONAL PAYMENT FOR THE PURCHASE OF LAND AND HENCE, NO DISALLOWANCE CAN BE MADE. THE LEARNED CIT (APPEALS) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. THE LEARNED CIT (APPEALS) HELD THAT THERE IS NO VIOLATION OF ANY OF THE PROVISIONS OF STAMP DUTY AND PROVISIONS OF SECTION 37(1) ARE NOT APPLICABLE IN RESPECT OF DISALLOWANCE OF ADDITIONAL PAYMENT. HE GAVE CERTAIN DIRECTIONS TO QUANTIFY THE DISALLOWANCE MADE. THESE DIRECTIONS WERE TO THE FOLLOWING EFFECT IN PARA 7.3.8 :- ADDITIONAL PAYMENT MADE IS IN CONNECTION WITH POSSESSION OF PARTICULARS LAND, THEREFORE, IT IS IN BUSINESS EXPEDIENCY. THEREFORE, ADDITIONAL PAYMENT TO THE EXTENT OF ENHANCEMENT IN LAND PRICE IS AN ALLOWABLE EXPENDITURE, AS THE SAME IS NOT COVERED TO BE INCLUDED FOR STAMP DUTY, AS IT IS SUBSEQUENT PHENOMENA. HOWEVER, AS IN SOME CASES, THE ADDITIONAL PAYMENT ITSELF IS QUESTIONED OR PAYMENT IS NOT MADE TO OWNER OF LAND, ETC., THOSE PAYMENT, I DO NOT FIND FOR BUSINESS EXPEDIENCY AS THESE PERSON TO NOT HAVE LEGAL RIGHT OVER THE LAND IN QUESTION, THE SAME IS NOT MENTIONED IN THE SALE DEED. IN VIEW OF THE ABOVE ADDITIONAL PAYMENT MADE TO THE OWNER OF THE LAND BY WAY OF ACCOUNT PAYEE CHEQUE IS HEREBY ALLOWED AS AN EXPENSE U/S 37 AND ADDITIONAL PAYMENT MADE TO OTHER PAYMENTS 22 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ARE NOT SUPPORTED BY ANY LEGAL RIGHT OVER THE LAND AND SIMILARLY PAYMENT MADE IN CASH TO THE OWNER OF LAND IS CONFIRMED AS, THERE ARE INSTANCE OF NOT CONFORMING THE RECEIPT BY FEW SELLER AS STATED SUPRA. THEREFORE, THE GROUND IS PARTLY ALLOWED. 9.1 AS A RESULT OF THE ABOVE DIRECTIONS ADDITION OF RS.1,55,80,945/- WAS DELETED AND BALANCE OF RS.1,03,43,187/- WAS CONFIRMED. 9.2 IT WAS SUBMITTED BY THE LEARNED AR THAT THE ASSESSEE HAS NOT CLAIMED THE EXPENSES MADE CATEGORIZED AS ADDITIONAL PAYMENT AS A DEDUCTION EITHER BY DEBITING TO PROFIT AND LOSS ACCOUNT OR THROUGH COMPUTATION AND THEREFORE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE SAME. IT WAS SUBMITTED THAT SIMILAR DISALLOWANCE WAS MADE IN M/S WESTLAND DEVELOPERS PVT. LTD., A GROUP COMPANY, FOR THE ASSESSMENT YEAR 2006-07. IT WAS PARTLY ALLOWED BY THE LEARNED CIT (APPEALS). THE TRIBUNAL IN FURTHER APPEAL VIDE ORDER DATED 22.08.2014 IN ITA NO.1752/DEL/2013 HAS DELETED THE ADDITION. IT WAS SUBMITTED THAT SINCE THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF THE ASSESSEE THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN M/S WESTLAND DEVELOPERS PVT. LTD. MAY BE FOLLOWED. IT WAS SUBMITTED BY THE LEARNED AR THAT THE ORDER IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD. (SUPRA) HAS BEEN ACCEPTED BY THE DEPARTMENT AND NO APPEAL HAS BEEN FILED TO THE HONBLE HIGH COURT. IT WAS ALSO STATED THAT THE SAID ORDER HAS SINCE BEEN FOLLOWED BY THE VARIOUS CO-ORDINATE BENCHES OF THE ITAT IN FOLLOWING CASES :- 23 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ORDER OF ITAT C BENCH, NEW DELHI IN CASE OF M/S GLITZ BUILDERS AND PROMOTERS PVT. LTD. IN ITA. NOS. 1747/DEL/2013 & 1406/DEL/2013 DATED 02.01.2015 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT H BENCH, NEW DELHI IN M/S WELLWORTH DEVELOPERS PVT. LTD. IN ITA NOS. 1675/DEL/2013 & 1761/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07 DATED 10.02.2016; ORDER OF ITAT F BENCH, NEW DELHI IN M/S POONAM PROMOTER AND DEVELOPER PVT. LTD. IN ITA NOS. 4064/DEL/2013 & 1590/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S BUSINESS PARK BUILDERS PVT. LTD. IN ITA NOS. 1768/DEL/2013 & 1530/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07 AND ITA NO.1733/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S ANUPAM TOWER PVT. LTD. IN ITA NOS. 1740/DEL/2013 & 1536/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; COPY OF ORDER OF ITAT C BENCH, NEW DELHI IN CASE OF M/S ISG ESTATE PVT. LTD. IN ITA. NOS. 1532/DEL/2013 AND 24 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 1756/DEL/2013 DATED 23.01.2015 FOR THE ASSESSMENT YEAR 2006-07; COPY OF ORDER OF ITAT B BENCH, NEW DELHI IN M/S FRAGRANCE CONSTRUCTION PVT. LTD IN ITA NOS. 2547/DEL/2013 & 2314/DEL/2013 FOR THE ASSESSMENT YEAR 2008-09; COPY OF ORDER OF ITAT A BENCH, NEW DELHI IN M/S BUSINESS PARK OVERSEAS PVT. LTD IN ITA NOS. 1731/DEL/2013 & 1403/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07. 9.3 THE LEARNED CITDR CONTENDED THAT THE ORDER OF THE CO-ORDINATE BENCH IN M/S WESTLAND DEVELOPERS PVT. LTD (SUPRA) BE NOT FOLLOWED ON THE GROUND THAT THE FACTS IN THE PRESENT CASE WERE DIFFERENT FROM THE FACTS IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD (SUPRA). IT WAS ARGUED BY HER THAT ADDITIONAL PAYMENT IS NOT RECORDED IN BOOKS OF ACCOUNT. IT WAS PLEADED THAT THE EXPENDITURE WAS REQUIRED TO BE CONSIDERED IN THE HANDS OF THE ASSESSEE. IT WAS ALSO CONTENDED THAT THE DOCUMENTS DEALT WITH BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER WERE ALSO REQUIRED TO BE CONSIDERED. IN THE REJOINDER THE LEARNED AR SUBMITTED THAT THE FACTS IN THE TWO CASES WERE IDENTICAL AND SO ALSO THE ORDERS OF THE LEARNED CIT (APPEALS). THE FACTS IN THE PRESENT CASE BEING IDENTICAL THERE CAN BE NO SCOPE OF ACCEPTING ANY ARGUMENTS ON THE SPECIOUS GROUND THAT THE FACTS WERE DISTINGUISHABLE. IT WAS SUBMITTED BY THE LEARNED AR THAT ARGUMENT OF THE LEARNED CIT [DR] 25 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. THAT ADDITIONAL PAYMENT IS NOT RECORDED IN BOOKS OF ACCOUNT IS FACTUALLY INCORRECT AND NOT BORNE OUT FROM ASSESSMENT ORDER AND ORDER OF THE LEARNED CIT (APPEALS) AND THERE IS NO FINDING FROM ASSESSING OFFICER OR THE LEARNED CIT (APPEALS) TO THE EFFECT THAT ADDITIONAL PAYMENTS ARE MADE OUT OF BOOKS OF ACCOUNT. 9.4 SINCE NO DEDUCTION WAS CLAIMED FOR ADDITIONAL PAYMENT, WHICH POSITION HAS BEEN ACCEPTED BY THE TRIBUNAL ON SIMILAR FACTS IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD., ANY DISCUSSION ON THOSE DOCUMENTS IS A NON ISSUE. THE LEARNED CITDR REITERATED THAT THE ORDER OF M/S WESTLAND DEVELOPERS PVT. LTD BE FOLLOWED, AS HAS BEEN DONE IN THE OTHER CASES OF THE COORDINATE BENCHES ON SIMILAR FACTS. 9.4.1 THE LEARNED AR RELIED ON JUDGEMENT OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND LATEST JUDGEMENT IN THE CASE OF MEETA GUTGUTIA TO PUT FORTH ARGUMENT THAT AS IT IS HELD BY HONBLE HIGH COURT IN CASES AS MENTIONED SUPRA THAT IN SEARCH CASES WHERE ASSESSMENT IS COMPLETED UNDER SECTION 153-A / 153-C, THE ADDITION OR DISALLOWANCE MUST BE RESTRICTED TO INCRIMINATING SEIZED DOCUMENTS ONLY. AS IN THIS CASE, ADDITION / DISALLOWANCE OF ADDITIONAL PAYMENT IS NOT ON THE BASIS OF ANY INCRIMINATING SEIZED DOCUMENTS, ACCORDINGLY ADDITION / DISALLOWANCE OF ADDITIONAL PAYMENT NEED TO BE DELETED FOLLOWING THE JUDGEMENTS AS REFERRED ABOVE. 26 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 9.5 WE HAVE CONSIDERED SUBMISSIONS MADE BY THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD., WHERE THE FACTS WERE IDENTICAL, THE TRIBUNAL VIDE ITS ORDER DATED 22.08.2014 IN ITA NO.1752/DEL/2013 HELD AS UNDER :- 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CASE LAW RELIED UPON BY THE PARTIES HAS BEEN TAKEN INTO CONSIDERATION. ON A CONSIDERATION OF THE SAME WE ARE OF THE VIEW THAT SINCE IN THE FACTS OF THE PRESENT CASE THE MATERIAL ISSUE IS THAT THE SAID EXPENDITURE WAS NEVER CLAIMED AS ASSESSEE'S BUSINESS EXPENDITURE THE OCCASION TO MAKE A DISALLOWANCE OF THE SAME DOES NOT ARISE. ON THIS FACT THERE IS NO DISPUTE AS ADMITTEDLY THE EXPENDITURE WAS NOT CLAIMED AS AN EXPENSE BY THE ASSESSEE AND CONSEQUENTLY HAS NOT BEEN ROUTED THROUGH ITS P & L A/C. IN THE CIRCUMSTANCES, THE OCCASION TO MAKE AN ADDITION OF THE SAME BY WAY OF A DISALLOWANCE IN THESE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE DOES NOT ARISE. THE REASONING AND FINDING GIVEN WHILE CONSIDERING THE ARGUMENTS QUA GROUND NO. 4 WOULD FULLY APPLY HERE ALSO. THE DIFFERENCE THAT HERE THE ENTIRE AMOUNT IS ADDED U/S 37 AS OPPOSED TO PART OF THE EXPENDITURE DISALLOWED U/S 40A(3) IS NOT SO MATERIAL AS THE FINDING IS ARRIVED AT TAKING COGNIZANCE OF THE MATERIAL FACT THAT HEREIN ALSO NO SUCH CLAIM OF EXPENDITURE HAS BEEN MADE. THE FACT THAT THE ADDITIONAL PAYMENTS WERE WARRANTED IN ORDER TO AVOID POTENTIAL DISPUTES AMONGST THE CLAIMANTS OF THE LAND HOLDING WHICH HAVE BEEN PASSED THROUGH TO THE LAND HOLDERS FROM GENERATION TO GENERATION WHEREIN 27 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. THERE MAY BE INFORMAL ARRANGEMENTS OF OWNERSHIP AND OR THE PAYMENTS WERE FOR COMMERCIAL EXPEDIENCY TO FACILITATE PEACEFUL POSSESSION AND REGISTRATION OF THE LANDHOLDING; WHERE BY THE TIME REGISTRY WAS MADE THE LANDHOLDERS FELT A HIGHER PAYMENT WAS NECESSITATED DUE TO INCREASE IN VALUE ARE ISSUES WHICH ARE NOT REQUIRED TO ITA NOS.1532 & 1756/DEL/20137 BE ADDRESSED IN THE PRESENT PROCEEDINGS. GROUND NO-3 ON THE FACTS AVAILABLE ON RECORD CONSIDERING THE JUDICIAL PRECEDENT REFERRED TO IN DETAIL WHILE DECIDING GROUND NO. 4 HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE. 9.5.1 WE HAVE GONE THROUGH THE RECORDS AND FIND THAT THE ASSESSEE HAS ALSO EITHER ACTED AS A LAND HOLDING COMPANY PURCHASING LAND AND TRANSFERRING THE DEVELOPMENT RIGHTS IN RESPECT OF LAND PURCHASED TO BPTOP LTD. OR ACCUMULATING DEVELOPMENT RIGHTS IN RESPECT OF LAND PURCHASED BY OTHER GROUP COMPANIES AND TRANSFERRING THESE LAND DEVELOPMENT RIGHTS TO BPTOP LTD. TO THAT EXTENT, THE FACTS OF CASE OF ASSESSEE COMPANY ARE SIMILAR AND IDENTICAL TO THE FACTS OF OTHER CASES WHICH ARE DECIDED BY VARIOUS COORDINATE BENCHES OF TRIBUNAL, NEW DELHI ON WHICH RELIANCE IS PLACED BY THE LEARNED AR OF THE ASSESSEE. 9.5.2 THERE IS NOTHING ON RECORD THAT ADDITIONAL PAYMENT IS NOT RECORDED IN BOOKS OF ACCOUNT AND WE ARE UNABLE TO FIND ANY MENTION BY THE ASSESSING OFFICER IN ASSESSMENT ORDER OR BY THE LEARNED CIT 28 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. (APPEALS) IN HIS ORDER. ACCORDINGLY, THE ARGUMENT OF THE LEARNED CIT [DR] THAT ADDITIONAL PAYMENT IS NOT RECORDED IN BOOKS OF ACCOUNTS IS NOT FACTUALLY CORRECT. 9.6 AS FACTS OF CASE OF ASSESSEE ARE SIMILAR AND IDENTICAL TO THE VARIOUS CASES DECIDED BY COORDINATE BENCHES OF TRIBUNAL, NEW DELHI WHERE SIMILAR DISALLOWANCE HAS BEEN DELETED BY THE TRIBUNAL IN OTHER GROUP CASES CITED BY THE ASSESSEE. BEING BOUND BY THE DECISION OF THE COORDINATE BENCH, IT IS HELD THAT NO DISALLOWANCE OF ADDITIONAL PAYMENT CAN BE MADE. IN THE RESULT, IT IS HELD THAT THE LEARNED CIT (APPEALS) WAS NOT JUSTIFIED IN UPHOLDING PART OF THE DISALLOWANCE OF ADDITIONAL PAYMENT ON THE GROUND THAT NEITHER THE ASSESSEE HAS DEBITED ADDITIONAL PAYMENT IN ITS PROFIT & LOSS ACCOUNT NOR HAS CLAIMED IT. ACCORDINGLY, GROUND NO. 4 OF THE ASSESSEE IS ALLOWED AND THE ADDITION UPHELD BY THE LEARNED CIT (APPEALS) IS DELETED. IN THIS VIEW, GROUNDS NO. 4.1 AND 4.2 OF THE ASSESSEE DO NOT SURVIVE. GROUND NO. 2 OF THE DEPARTMENT IS REJECTED. 10. GROUND NOS. 5 AND 5.1 OF THE ASSESSEE ARE AS UNDER :- 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE U/S. 40A(3) OF RS.32,28,037/- IN RESPECT OF WHICH NO DEDUCTION WAS CLAIMED BY THE APPELLANT. 5.1 THAT EVEN ON MERITS THE DISALLOWANCE WAS NOT JUSTIFIED. 29 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 10.1 THE ASSESSEE COMPANY HAD MADE CASH PAYMENTS FOR ACQUIRING CERTAIN LANDS. THE ASSESSING OFFICER INVOKED PROVISION OF SECTION 40A(3) AND DISALLOWED 20% AMOUNTING TO RS.32,28,037/-. THE ASSESSEE BEING AGGRIEVED FILED APPEAL BEFORE THE LEARNED CIT (APPEALS), WHO CONFIRMED THIS DISALLOWANCE. BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 10.2 THE LEARNED AR SUBMITTED THAT THE ISSUE IN QUESTION IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN CASE OF WESTLAND DEVELOPERS PVT. LTD IN ITA NO.1752/DEL/2013 VIDE ORDER DATED 22.08.2014 FOR THE AY 2006-07. IT WAS SUBMITTED THAT THIS ORDER OF THE TRIBUNAL HAS BEEN ACCEPTED BY THE DEPARTMENT AND NO APPEAL HAS BEEN FILED BEFORE THE HONBLE HIGH COURT. IT WAS ALSO SUBMITTED THAT ON IDENTICAL FACTS THE ORDER OF THE WESTLAND DEVELOPERS PVT. LTD. (SUPRA) HAS BEEN FOLLOWED IN THE FOLLOWING CASES BY THE VARIOUS COORDINATE BENCHES :- ORDER OF ITAT C BENCH, NEW DELHI IN CASE OF M/S GLITZ BUILDERS AND PROMOTERS PVT. LTD 1747/DEL/2013 & 1406/DEL/2013 DATED 02.01.2015 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT H BENCH, NEW DELHI IN M/S WELLWORTH DEVELOPERS PVT. LTD. IN ITA NOS. 1675/DEL/2013 & 1761/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07 DATED 10.02.2016; 30 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. ORDER OF ITAT F BENCH, NEW DELHI IN M/S POONAM PROMOTER AND DEVELOPER PVT. LTD. IN ITA NOS. 4064/DEL/2013 & 1590/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT G BENCH, NEW DELHI IN M/S SARASWATI KUNJ INFRASTRUCURE PVT. LTD. IN ITA NOS. 1369/DEL/2013 & 1766/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S BUSINESS PARK BUILDERS PVT. LTD. IN ITA NOS. 1768/DEL/2013 & 1530/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07 AND ITA NO. 1733/DEL/2013 FOR THE ASSESSMENT YEAR 2007-08; ORDER OF ITAT C BENCH, NEW DELHI DATED 29.04.2015 IN M/S ANUPAM TOWER PVT. LTD. IN ITA NOS. 1740/DEL/2013 & 1536/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07; ORDER OF ITAT B BENCH, NEW DELHI IN M/S FRAGRANCE CONSTRUCTION PVT. LTD. IN ITA NOS. 2547/DEL/2013 & 2314/DEL/2013 FOR THE ASSESSMENT YEAR 2008-09; ORDER OF ITAT A BENCH, NEW DELHI IN M/S BUSINESS PARK OVERSEAS PVT. LTD. IN ITA NOS. 1731/DEL/2013 & 1403/DEL/2013 FOR THE ASSESSMENT YEAR 2006-07. 31 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. 10.2.1 THE LEARNED AR RELIED ON JUDGEMENT OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND LATEST JUDGEMENT IN THE CASE OF MEETA GUTGUTIA TO PUT FORTH HIS ARGUMENT THAT AS IT IS HELD BY HONBLE DELHI HIGH COURT IN CASES AS MENTIONED SUPRA THAT IN CASES WHERE SEARCH ASSESSMENT IS COMPLETED UNDER SECTION 153-A / 153-C, THE ADDITION OR DISALLOWANCE MUST BE RESTRICTED TO INCRIMINATING SEIZED DOCUMENTS ONLY. AS IN THIS CASE, DISALLOWANCE OF CASH PAYMENT UNDER SECTION 40A(3) IS NOT ON THE BASIS OF ANY INCRIMINATING SEIZED DOCUMENTS, ACCORDINGLY DISALLOWANCE OF CASH PAYMENT MADE UNDER SECTION 40A(3) NEED TO BE DELETED FOLLOWING THE JUDGEMENTS AS REFERRED ABOVE. 10.3 THE LEARNED CITDR WAS UNABLE TO CONTROVERT THE SUBMISSION MADE BY THE LEARNED AUTHORIZED REPRESENTATIVE. 10.4 WE HAVE CONSIDERED SUBMISSIONS MADE BY THE PARTIES AND PERUSED THE MATERIAL MADE AVAILABLE ON RECORD. IN WESTLAND DEVELOPERS PVT. LTD. (SUPRA) ON IDENTICAL FACTS IT WAS HELD AS UNDER :- 10.10. WE HAVE ALSO TAKEN OURSELVES THROUGH THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS INDUSTRIAL ENGINEERING PROJECTS PVT. LTD. (CITED SUPRA) WHICH HAS BEEN RELIED UPON BEFORE US FOR THE PROPOSITION THAT REIMBURSEMENT OF EXPENSES CANNOT BE TREATED TO BE A REVENUE RECEIPT. HOW THE JUDGEMENT OF THE APEX COURT IN TUTICORIN ALKALI CHEMICALS & FERTILIZERS IS 32 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. APPLICABLE TO THE FACTS OF THE PRESENT CASE HAS NOT BEEN SET OUT IN THE ORDER OF THE AUTHORITIES NOR HAS THE LD. DR BEEN ABLE TO ADDRESS THE APPLICABILITY OF THE SAID JUDGEMENT TO THE ISSUE AT HAND. WE HAVE TAKEN OURSELVES THROUGH THE SAID JUDGEMENT AND SEEN THAT IT PROCEEDS ON ENTIRETY DIFFERENT FACTS AND CIRCUMSTANCES AND HAS NO APPLICABILITY TO THE FACTS OF THE PRESENT CASE. CONSEQUENTLY, IT IS SEEN THAT FROM THE RATIO OF THE JUDGEMENTS RELIED UPON BEFORE THE CIT(A) AND ALSO BEFORE US WHICH HAVE BEEN DISCUSSED IN THE EARLIER PART OF THIS ORDER NO ARGUMENTS HAVE BEEN ADVANCED BY THE REVENUE SO AS TO CONTEND HOW THEY ARE NOT APPLICABLE TO THE CASE AT HAND, NO DISTINGUISHING FACT, CIRCUMSTANCE OR POSITION OF LAW HAS BEEN RELIED UPON SO AS TO COME TO A CONTRARY FINDING THAN THE ONE ARRIVED AT. ACCORDINGLY ON A CONSIDERATION OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDGEMENTS RELIED UPON CONSIDERING THE RELEVANT PROVISION OF THE ACT NAMELY SECTION 40A(3), WE HOLD FOR THE DETAILED REASONS GIVEN HEREINABOVE THAT SECTION 40A(3) OF THE ACT HAS BEEN WRONGLY INVOKED AS ADMITTEDLY NO EXPENSES RELATABLE TO THE ADDITION HAS BEEN CLAIMED AND THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THAT THE PAYMENT WERE REIMBURSEMENT MADE BY CWPPL. ACCORDINGLY GROUND NO.4 IS ALLOWED. 10.5 AS FACTS OF CASE OF ASSESSEE ARE SIMILAR AND IDENTICAL TO THE VARIOUS CASES DECIDED BY COORDINATE BENCHES OF TRIBUNAL, NEW DELHI DETAILS OF WHICH ARE GIVEN ABOVE WHERE SIMILAR DISALLOWANCE BY FOLLOWING THE ORDER IN CASE OF M/S WESTLAND DEVELOPERS PVT. LTD. 33 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. (SUPRA) AS AFORESAID IS DELETED BY VARIOUS COORDINATE BENCHES OF THE TRIBUNAL, NEW DELHI, THE GROUND NO. 5 IS ALLOWED AND DISALLOWANCE OF CASH PAYMENT MADE UNDER SECTION 40A(3) IS DELETED AS ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN RESPECT OF CASH PAYMENT MADE. 11. GROUND NO.6 OF THE ASSESSEE : THIS GROUND IS AGAINST ADDITION OF RS.9 LACS BASED ON DOCUMENT OF PAGE 11 OF ANNEXURE A-25/PARTY BO-III. THE ASSESSEE TOOK A BASIC OBJECTION THAT IN THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER, THIS DOCUMENT WAS NOT MENTIONED. IT WAS THEREFORE ARGUED THAT THE DOCUMENT COULD NOT BE USED IN THE ASSESSMENT MADE U/S 153C. 11.1 IT WAS CONTENDED BY THE LEARNED AR OF ASSESSEE THAT AS THIS IS A CASE OF OTHER PERSON AS PER PROVISIONS OF SECTION 153-C WHERE SEARCH DID NOT TAKE PLACE AND JURISDICTION IS ASSUMED UNDER SECTION 153-C OF I. T. ACT, THE ASSESSING OFFICER HAS TO RECORD SATISFACTION LISTING ALL SEIZED DOCUMENTS WHICH BELONG TO ASSESSEE AND ARE INCRIMINATING IN NATURE AND CONTAIN NOTING OR INFORMATION REGARDING UNDISCLOSED INCOME. 11.2 WE HAVE PERUSED THE SATISFACTION NOTE AND FIND THAT THE ASSESSEE IS RIGHT IN STATING THAT THE RELEVANT DOCUMENT WAS NOT INCLUDED IN THE SATISFACTION NOTE. THE ASSESSEES CONTENTION IS THAT IN CIT VS SINGHAD TECHNICAL EDUCATION SOCIETY [2015] 63 TAXMANN.COM 14 34 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. (BOMBAY) IT WAS HELD THAT THE VALIDITY OF NOTICE WAS NOT UPHELD ON THE GROUND THAT SATISFACTION NOTE WAS SILENT ABOUT THE ASSESSMENT YEAR IN WHICH INCRIMINATING INFORMATION WAS DISCOVERED ON SEARCH. THE JUDGMENT HAS SINCE BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN CIVIL APPEAL NO. 11080 OF 2017 DATED 29.08.2017. 11.3 AS THE ASSESSING OFFICER HAS FAILED TO RECORD THE SAID DOCUMENTS IN THE SATISFACTION NOTE AND IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER CANNOT GO BEYOND THE DOCUMENTS REFERRED IN THE SATISFACTION NOTE. ACCORDINGLY ON THIS REASON ALONE, THIS DOCUMENT COULD NOT BE CONSIDERED FOR ASSESSMENT UNDER SECTION 153-C AND THE ABOVE DOCUMENT CANNOT BE USED IN THE ASSESSMENT MADE U/S. 153-C, THEREFORE, THE ADDITION OF RS. 9 LACS IS NOT WARRANTED AND IS HEREBY DELETED. GROUND NO. 6 OF THE APPEAL IS THUS ALLOWED. 12. IN SUMMARY, APPEAL PREFERRED BY THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 13. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON : 11 TH SEPTEMBER, 2017 . SD/- SD/- ( L. P. SAHU ) ( I. C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : THE 11 TH SEPTEMBER, 2017 . *MEHTA* 35 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANTS; 2. RESPONDENTS; 3. CIT; 4. CIT (APPEALS); 5. DR, ITAT, ND. BY ORDER ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 11.09.2017 DRAFT PLACED BEFORE AUTHOR 11.09.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. 36 I. T. APPEAL NO. 6303/DEL/2013 AND I. T. APPEAL NO. 6342/DEL/2013. ASSESSMENT YEAR : 2006-07.
