Dy.CIT, Circle-1(1), Hyderabad V. M/s Abhinandana Housing Private Limited, Hyderabad

ITA 695/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74603 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Business expenditure; Ignorance of law
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 695/HYD/2013 ASSESSMENT YEAR 2009+10 THE DEPUTY CIT CIRCLE+1(1) HYDERABAD VS. M/S. ABHINANDANA HOUSING PVT. LTD., HYDERABAD PAN: AAECA1098F [APPELLANT] [RESPONDENT] ITA NO. 612/HYD/2013 ASSESSMENT YEAR 2009+10 M/S. ABHINANDANA HOUSING PVT. LTD., HYDERABAD PAN: AAECA1098F VS. THE DEPUTY CIT CIRCLE+1(1) HYDERABAD [APPELLANT] [RESPONDENT] REVENUE BY: SRI D. SUDHAKAR RAO ASSESSEE BY: SRI T. CHAITANYA KUMAR DATE OF HEARING: 20.01.2014 DATE OF PRONOUNCEMENT: 12.02.2014 ORDER ORDER ORDER ORDER PER CHANDRA POOJARI, AM : THE ABOVE APPEALS ARE CROSS APPEALS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)+II, HYDERABAD DATED 19.2.20 13 FOR ASSESSMENT YEAR 2009+10. 2. THE ISSUE INVOLVED IN BOTH THE APPEALS IS WITH REGA RD TO ADDITION/DELETION MADE U/S. 40A(3) OF INCOME+TAX AC T, 1961. ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 2 3. BRIEF FACTS OF THE CARE ARE THAT THE ASSESSEE+COMPA NY FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING A TOTAL INCOME OF RS. 93,79,560. THE RETURN WAS PROCESSED U/S. 14 3(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT W AS COMPLETED U/S. 143(3) OF THE ACT. THE ASSESSEE+COM PANY IS IN THE BUSINESS OF PURCHASE OF LAND IN BULK AND SALE O F DEVELOPED PLOTS. DURING THE YEAR UNDER CONSIDERATION THE ASS ESSEE+ COMPANY PURCHASED LAND WORTH RS. 39,53,49,054 AND S HOWN SALES AT RS. 18,24,67,028. DURING THE ASSESSMENT P ROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE+COMPA NY MADE CASH PAYMENTS FOR PURCHASE OF LANDS AND ASKED THE A SSESSEE AS TO WHY THE PROVISIONS OF SECTION 40A(3) OF THE ACT SHOULD NOT BE ATTRACTED AND ALSO REQUESTED TO FURNISH THE DETAILE D STATEMENT OF CASH AND CHEQUE PAYMENTS MADE TOWARDS PURCHASE O F LAND. THE PROPERTIES IN QUESTION WERE LOCATED IN V IJAYAWADA AND GUNTUR REGIONS. THE ASSESSEE FILED THE DETAILS OF CASH PAYMENTS MADE WHERE NO BANKING FACILITIES ARE AVAIL ABLE, CASH PAYMENTS ON THE DAYS THE BANKS WERE CLOSED ON ACCOU NT OF HOLIDAYS AND THE CASH PAYMENTS MADE TO AGENTS AS BE LOW: SL. NO. PARTICULARS AMOUNT (RS.) 1. CASH PAYMENTS IN PLACES WHERE THERE WERE NO BANK ING FACILITIES AVAILABLE (CLAUSE (G) OF RULE 6DD) 4,49,45,449 2. CASH PAYMENTS ON WHICH DAY BANKS WERE CLOSED ON ACCOUNT OF HOLIDAY (CLAUSE (I) OF RULE 6DD) 69,29,000 3. CASH PAYMENTS TO AGENTS WHO ARE REQUIRED TO MAKE PAYMENTS IN CASH TO LANDLORDS (CLAUSE (K) OF RULE 6 DD) 3,15,65,268 4. CASH PAYMENTS MADE BELOW RS. 20,000 ON EACH OCCA SION 18,99,109 TOTAL 8,53,38,826 ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 3 4. THE CLAIM OF EXEMPTION IN RESPECT OF CASH PAYMENTS OF LESS THAN RS. 20,000 EACH WAS ACCEPTED BY THE AO, B UT, HOWEVER, THE PAYMENTS MADE THROUGH AGENTS OF RS. 3, 15,65.268, PAYMENTS MADE ON DAYS WHEN BANKS WERE CLOSED ON ACC OUNT OF HOLIDAY OF RS. 69,29,000, PAYMENTS MADE WHERE TH ERE WAS NO BANKING FACILITY OF RS. 4,49,45,449 AND THE PAYMENT S MADE IN RESPECT OF PURCHASES MADE IN EARLIER YEARS OF RS. 7 2,21,000 WERE ADDED U/S. 40A(3) OF THE INCOME+TAX ACT, 1961. THE OBSERVATIONS OF THE ASSESSING OFFICER ARE AS FOLLOWS: (A) WITH REGARD TO THE PAYMENTS MADE IN PLACES WHERE TH ERE WERE NO BANKING FACILITIES, THE AGGREGATE OF CASH PAYMENTS MADE IN EXCESS OF RS. 20,000 IN EACH CASE STOOD AT RS. 4,49,45,449. THE AO DISCUSSED THIS IS SUE FROM PARA 6.1 OF HIS ORDER AT PAGE 5. THE AO ENLISTED TH E NAMES OF THE VILLAGES, WHERE THE CASH PAYMENTS WERE MADE AS PROVIDED BY THE ASSESSEE AND OBSERVED THAT PAYMENTS IN QUESTION RELATES TO VILLAGERS LOCATED I N KRISHNA GUNTUR DISTRICTS AND ALMOST ALL THE VILLAGES IN THE SE DISTRICTS ARE COVERED BY BANKING FACILITIES AND MOST OF THE F ARMERS POSSESS KISAN CARDS ISSUED BY BANKS. HE FURTHER ST ATED THAT PAYMENTS WERE MADE PARTLY IN CASH AND PARTLY I N CHEQUE. SOME OF THE RECIPIENTS ARE RESIDING IN TOW NS HAVING BANKING FACILITIES. HE ALSO ENLISTED CASH PA YMENTS MADE IN EXCESS OF RS. 20,000 TO PERSONS LIVING IN T OWNS AT PARA 7, PAGE+7 OF THE ASSESSMENT ORDER. HE FURTHER STATED THAT THE ASSESSEE CONTENDED THAT EVEN WHERE THERE W ERE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 4 BANKING FACILITIES AVAILABLE, THE FARMERS INSISTED ON CASH PAYMENTS. HE DID NOT ACCEPT THE ASSESSEE'S ARGUMENT THAT THE PAYMENTS ARE GENUINE AND, THEREFORE, IN SU CH A SITUATION CASH PAYMENTS IN EXCESS OF THE LIMIT PRES CRIBED UNDER THE ACT AND RULE 6DD CANNOT BE DISALLOWED AND ALSO DID NOT ACCEPT THE DECISION RELIED UPON BY THE ASSESSEE IN THE CASE OF M/S ACE INDIA ABODES LTD. V S. ACIT, CENTRAL CIRCLE, .JAIPUR IN ITA NO 79/JP/2011 DT. 12.8.2011 (B) THE AGGREGATE AMOUNT PAID IN CASH TO THE SELLERS OF LAND ON BANK HOLIDAYS DURING THE ACCOUNTING YEAR STOOD A T RS. 69,29,000. WITH REGARD TO THE CASH PAYMENTS MADE O N BANK HOLIDAYS, THE AO OBSERVED THAT THE ASSESSEE MA DE PAYMENTS IN CASH IN INSTALMENTS AND NOT ON A SINGLE DAY: I.E., ON A HOLIDAY WHEN THE DEAL IS CLINCHED ON A H OLIDAY. HE FURTHER OBSERVED THAT THERE WAS NO REQUIREMENT O F MAKING THE PAYMENT ON A HOLIDAY AND COULD HAVE WAITED FOR ONE DAY MORE AND MADE THE PAYMENT ON THE NEXT DAY. FOR THE ABOVE PROPOSITION, HE PLACED REL IANCE ON THE DECISION OF THE RAJASTHAN HIGH COURT IN THE CASE OF NAGHILAL VS. CIT (167 ITR 139) AND DENIED EXEMPTION CLAIMED U/R 6DD(I) OF THE IT RULES R.W.S. 40A(3) OF THE ACT. (C) THE AO'S OBSERVATION ON THE ISSUE OF PAYMENTS MADE THROUGH AGENTS WAS THAT A BROKER CANNOT BE TREATED AS AN AGENT AND HELD THAT THE ASSESSEE'S CONTENTION TH AT ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 5 THE COMPANY ENGAGED THE SERVICES OF AGENTS/BROKERS FOR PROCUREMENT OF LAND AND PAYMENTS MADE THROUGH THEM IS ONLY A SELF SERVING STATEMENT. THE AO EXAMINED S IX OUT OF SEVEN AGENTS/BROKERS ON OATH. THE AGENTS DEPOSE D BEFORE THE AO GIVING THE DETAILS OF SERVICES PROVID ED BY THEM AND THE NAMES OF THE SELLERS AND STATED THAT T HEY ACTED AS MEDIATORS AT THE TIME OF PURCHASE OF LAND MAINLY TO IDENTIFY THE PROSPECTIVE SELLERS. THE AO FURTHER OPINED THAT THE INVOLVEMENT OF AGENTS IN THE LAND D EAL IS DOUBTFUL AND IN ORDER TO CLAIM SOME COMMISSION PAYMENTS TO THE BROKERS, THE ASSESSEE COMPANY CAME OUT WITH THE THEORY THAT THEY ARE COMPANY'S AGENTS AND CASH PAYMENTS MADE THROUGH THEM IS COVERED BY EXEMPTION PROVIDED UNDER CLAUSE (K) OF RULE 6DD. T HE AO FURTHER STATED THAT THE AGENTS UTILISED THE VEHICLE S PROVIDED BY THE COMPANY TO HAND OVER CASH ON THE SAME DAY AND, THEREFORE, IT PROVED THAT THEY ACTED ONLY AS MESSENGERS, LIKE HIS OWN EMPLOYEES. THE AO FURT HER OBSERVED THAT THE ASSESSEE FAILED TO EXPLAIN AS TO HOW THE BROKERS WERE REQUIRED TO MAKE PAYMENTS EITHER B Y CASH OR BY CHEQUE. THE AGENTS NEVER PAID THEIR OWN MONEY AS ADVANCE TO PROSPECTIVE SELLERS. THEREFORE , THE ASSESSEE WOULD NOT GET THE EXEMPTION PROVIDED UNDER RULE 6DD. IT WAS ONLY TO CIRCUMVENT THE PROVISIONS OF SECTION 40A(3), THE ASSESSEE CAME OUT WITH THE THEO RY OF ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 6 CASH PAYMENTS THROUGH BROKERS/AGENTS. IN THIS VIEW OF THE MATTER, THE AO MADE A DISALLOWANCE OF RS. 3,15,65,2 68. 5. ON APPEAL, THE CIT(A) DELETED ADDITION OF RS. 4,45, 20,449 IN RESPECT OF PAYMENT WHERE THERE WERE BANKING FACI LITIES AVAILABLE. AGAINST THIS THE REVENUE IS IN APPEAL B EFORE US. HOWEVER, THE CIT(A) CONFIRMED ANOTHER ADDITION OF R S. 4,25,000, THOUGH THE ASSESSEE HAS CLAIMED AS PAYMENT MADE TO THE PARTIES WHERE NO BANKING FACILITIES WERE AVAILABLE BUT IN FACT THERE IS BANKING FACILITY AVAILABLE IN THAT VILLAGE . REGARDING CASH PAYMENT ON WHICH DAY BANKS ARE CLOSED ON ACCOU NT OF HOLIDAY, THE CIT(A) DIRECTED THE AO TO VERIFY THESE CASH PAYMENTS TO SATISFY WHERE THESE PAYMENTS ARE MADE O N PUBLIC HOLIDAYS, IF IT IS SO TO ALLOW THE SAME AS RULE 6DD OF THE IT RULES, 1962. REGARDING CASH PAYMENT TO AGENTS, THE CIT(A) DISALLOWED A SUM OF RS. 3,15,65,263 AS THE PAYMENTS ARE NOT MA DE TO THE AGENTS OF THE COMPANY BUT THEY WORKED AS MIDDLEMEN AND OFFERED THEIR SERVICES TO OTHER PARTIES AS WELL. H E DISTINGUISHED THE BROKERS FROM AGENTS AND CONFIRMED ADDITION OF R S. 3,15,65,263. AGAINST SUSTAINING THE ADDITION OF RS . 3,21,65,268, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE CIT(A) DELET ED THE ADDITION OF RS. 4,45,20,449 ON THE REASON THAT THE PAYMENTS WERE MADE IN THE PLACES WHERE THERE IS NO BANKING FACILITY AV AILABLE. THE FACTS OF THE CASE UNDER CONSIDERATION NEED TO B E ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 7 EXAMINED. AS STATED EARLIER THE ASSESSEE COMPANY I S IN THE BUSINESS OF REAL ESTATE PURCHASING BULK LANDS AND D EVELOPING THEM INTO PLOTS AND SELLING OF THE SAME. IT IS COM MON KNOWLEDGE THAT IN VILLAGES GENERALLY THE TRANSACTIO NS ARE BY CASH NOT BECAUSE THE TRANSACTIONS ARE NOT GENUINE O R THEY WANT TO AVOID BANKS BUT BECAUSE IT IS STILL A CONVE NIENT MODE OF TRANSACTION AND PEOPLE ARE MORE COMFORTABLE IN DEAL ING WITH CASH. THIS WILL NOT GIVE IMMUNITY TO THE TRANSACTI ONS IN VILLAGES BUT IT HELPS IN UNDERSTANDING THE REASON WHICH WILL HELP IN APPRECIATING THE FACTS OF THE CASE. THE ASSESSEE H AS FURNISHED ALL THE DETAILS STATING THAT THE SAID VILLAGES DID NOT HAVE BANKING FACILITIES. THE ASSESSEE FILED CONFIRMATIONS FROM THE VILLAGE SURPANCHES WHO CERTIFIED THAT THERE WERE NO BANKING FACILITIES IN THE VILLAGES CONCERNED AND THE ASSESSEE HAS ALSO P RODUCED CONFIRMATIONS FROM THE VILLAGE SURPANCHES CONFIRMIN G THE IDENTITY OF THE SELLERS OF THE LAND. THE OBSERVATI ON OF THE ASSESSING OFFICER THAT KRISHNA AND GUNTUR DISTRICTS ARE MOST DEVELOPED DISTRICTS IN THE STATE AND ALMOST ALL THE VILLAGES IN THESE DISTRICTS ARE COVERED BY BANKING FACILITIES I S ONLY BASED ON HIS ASSUMPTIONS. BUT THE VILLAGE SURPANCHES WHO AR E THE RESPONSIBLE PERSONS OF THE VILLAGES HAVE CONFIRMED THAT THERE WERE NO BANKING FACILITIES IN THE SAID VILLAGES. IT IS NOT PROPER TO DISBELIEVE THE CONFIRMATIONS FILED BY RESPONSIBLE V ILLAGE OFFICERS AND PROCEED ON ASSUMPTION THAT THERE SHOULD BE BANK S IN THE SAID VILLAGES. DESPITE ALL THE PROGRESS THERE ARE S OME VILLAGES IN ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 8 ANDHRA PRADESH WHICH ARE NOT CONNECTED BY PROPER BA NKING FACILITIES. IT MAY BE NOTED THAT RULE 6DD(G) SAYS 'SECTION 40A(3) DISALLOWANCE CANNOT BE MADE WHERE T HE PA Y MEN T IS MADE IN A VI LLA G E OR TOWN WHICH ON THE DATE OF SUCH PAYMENT IS NOT SERVED BY ANY BANK TO ANY PERSON WHO ORDINARILY RESIDES, OR IS CARRYING ON ANY BUSINESS, PROFESSION OR VOCATION, IN A NY SUCH VILLAGE OR TOWN' WHICH SHOWS THAT THE SAID RULE DOES NOT MAKE ANY QU ALIFYING EXEMPTION AND IF THERE ARE NO BANKS AT THE PLACE OF TRANSACTION NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF CASH PAYM ENTS MADE TO THE PERSONS RESIDING IN SUCH PLACE I.E., VI LLAGE OR TOWN. 7. THE CONTENTION OF THE ASSESSING OFFICER THAT SOME PAYMENTS WERE MADE IN CASH AND SOME WERE MADE BY CHEQUE TO THE VERY SAME PERSON WAS NOT SUPPORTED BY ANY SPECIFIC INSTANCES. THE ASSESSING OFFICER DID NOT D OUBT THE GENUINENESS OF THE TRANSACTION OR THE IDENTITY OF T HE SELLERS. IF THE PAYMENTS ARE GENUINE AND IF THE BUSINESS EXPEDIENCY SO REQUIRES AND THE ASSESSEE MAKES THE PAYMENTS IN CAS H, THE TECHNICAL REQUIREMENT SHOULD NOT COME IN THE WAY OF CLAIMING IT AS EXPENDITURE IN VIEW OF THE PROVISO TO SECTION 40 A(3). AS NOTED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE SUBMITT ED CONFIRMATIONS FROM THE SURPANCHS OF THE VILLAGES WI TH REGARD TO NON+AVAILABILITY OF BANKING FACILITIES IN THE SAID VILLAGES ALONG WITH THE CONFIRMATION OF THE ADDRESSES OF THE SELLE R+FARMERS. THERE IS NOTHING ON RECORD TO SHOW THAT THE AO HAD MADE ANY ENQUIRIES IN THIS REGARD. ACCORDINGLY, AS DECIDED B Y THE TRIBUNAL ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 9 JAIPUR 'B' BENCH IN THE CASE OF SRI SALASAR OVERSEA S PVT. LTD. VS. DCIT (SUPRA) WHERE IT HAS BEEN HELD THAT THE ASSESS EE HAVING MADE CASH PAYMENTS FOR PURCHASING LAND FROM FARMERS RESIDING IN VILLAGES WHERE THERE IS NO BANKING FACILITY, THE DISALLOWANCE CASH PAYMENT U/S. 40A(3) READ WITH RULE 6DD(G) IS N OT WARRANTED. 8. FURTHER WE CAME ACROSS A DECISION OF THE CO+ORDINAT E BENCH IN THE CASE OF SAHITYA HOUSING PVT. LTD. VS. DCIT IN ITA NO. 246/HYD/2011. THE TRIBUNAL VIDE ORDER DATED 24.1.2 014 HELD AS UNDER: '13. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIE S, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE REVENUE AUTHORITIES. SEC 40A(3) READS AS UNDER: PROVIDED THAT NO DISALLOWANCE SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF BUSI NESS OR PROFESSION UNDER SUB SECTION (3) AND THIS SUB SECTI ON WHERE A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON I N A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND R UPEES IN SUCH CASES AND UNDER SUCH CIRCUMSTANCES AS MAY BE P RESCRIBED HAVING REGARD TO THE NATURE AND EXTENT OF BANKING F ACILITIES AVAILABLE CONSIDERATIONS OF BUSINESS EXPENDITURE AN D OTHER RELEVANT FACTORS. 14. THE EXCEPTIONS TO THE APPLICATION OF SEC 40A(3 ) IS LAID DOWN IN RULE 6DDJ. RULE 6DD AFTER ITS AMENDMENT FRO M 1995, READS AS UNDER: RULE 6DD PRIOR TO 25.7.1995, CLAUSE (J) OF RULE 6DD OF THE I T RULES READ AS FOLLOWS: 6DD....... I) IN ANY OTHER CAUSE, WHERE THE ASSESSEE SATISFIES THE ASSESSING OFFICER THAT THE PAYMENT COULD NOT BE MADE BY A CRO SS CHEQUE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 10 DRAW ON A BANK OR BY A DRAWN ON A BANK OR BY A CROS SED BANK DRAFT...... (1) DUE TO EXCEPTIONAL OR UNAVOIDABLE CIRCUMSTANCES OR (2) BECAUSE PAYMENT IN THE MANNER AFORESAID WAS NOT PRACTICABLE, OR WOULD HAVE CAUSED GENUINE DIFFICULT Y TO THE PAYEE, HAVING REGARD TO THE NATURE OF THE TRANSACTI ON AND THE NECESSITY FOR EXPEDITIOUS SETTLEMENT THEREOF. AND ALSO FURNISHES EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER AS TO THE GENUINENESS OF THE PAYMENT AND ID ENTITY OF THE PAYEE. THE ABOVE CLAUSE (J) OF RULE 6DD HAS BEEN OMITTED B Y THE IT (FOURTEENTH AMENDMENT) RULES 1995 W.E.F. 27.5.1995. IT IS PERTINENT TO REFER AT THIS JUNCTURE, TO THE DECISIO N OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. CH. MANGAYAMMA VS. UNION OF INDIA AND OTHERS (239 ITR 6 87), WHEREIN CONSIDERING THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF S.40A(3) OF THE ACT IN THE LIGHT OF THE ABOVE AM ENDMENT MADE TO RULE 6DD OF THE IT RULES, THE HONBLE HIGH COURT OBSERVED AND HELD AT PAGE 693 OF THE REPORTS (239 I TR) AS FOLLOWS: IN VIEW OF THE AFORESAID PRINCIPLES AS LAID DOWN A ND THE OBJECT AS SOUGHT TO BE ACHIEVED U/S 40A(3) OF THE ACT, ANY CHANGES MADE IN THE SUBORDINATE LEGISLATION WOULD NOT IN AN Y WAY AFFECT THE SUBSTANTIVE PROVISION. MOREOVER, BY DELETING TH E CIRCUMSTANCES AS CONTEMPLATED EARLIER, VIZ., SUB CL AUSES (1) AND (2) OF RULE 6DD(J) THE OBJECTS OF CURBING THE CIRCU LATION OF BLACK MONEY AND REGULATING THE BUSINESS TRANSACTION S BECOME MORE STRENGTHENED AND IT AVOIDS ANY UNDUE ADVANTAGE BEING TAKEN BY UNSCRUPULOUS ASSESSEES OR LITIGATION BEING MULTIPLIED. AS THE POSITION STANDS NOW 20% OF THE CASH TRANSACT IONS EXCEEDING RS. 20,000 ARE DISALLOWED IN COMPUTING TH E BUSINESS EXPENDITURE BUT NOT THE ENTIRE RS. 20,000/- WHILE T HE AMENDED PROVISION CONFERS ADVANTAGE TO THE ASSESSEE TO THIS EXTENT, THE CIRCUMSTANCES PERMITTED TO BE TAKEN INTO ACCOUNT BY THE ASSESSING AUTHORITY ARE NO LONGER AVAILABLE BY REAS ON OF DELETION OF OLD RULE 6DD(J). BUT THAT BY ITSELF DOE S NOT MAKE SECTION 40A(3) ARBITRARY AND UNCONSTITUTIONAL. ONE CANNOT PLEAD IGNORANCE OF LAW AND MAKE CASH PAYMENTS CONTRARY TO LAW. IT IS TOO LATE IN THE DAY TO ACCEPT ANY SUCH PROPOSITION. FURTHERMORE, IN THE PRESENT DAY BANKING SCENARIO, THE MODE OF PA YMENT BY WAY OF CROSSED CHEQUES OR DEMAND DRAFTS CANNOT BE S AID TO BE ONEROUS DUTY CASE ON AN ASSESSEE WHICH CAN BE MADE A FOUNDATION FOR ATTACKING THE VALIDITY OF THE SAID S ECTION. ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 11 THEREFORE, IT IS NOT OPEN FOR ATTACKING THE PROVISI ON AS VIOLATIVE OF ANY PROVISION OF THE CONSTITUTION. THERE IS NO A RBITRARINESS OR DISCRIMINATION IN THE SAID PROVISION WARRANTING INT ERFERENCE BY THIS COURT UNDER THE CIRCUMSTANCES. IN VIEW OF THE ABOVE THERE IS ABSOLUTELY NO MERITS IN THE CHALLENGE MADE AS TO THE VALIDITY OF SECTION 40A(3) OF THE ACT BY MERE DELETION OF SUB CLAUSES (1) AND (2) OF RULE 6DD(J). THE SAID PROVISION IS PERFECTLY VALID AND WE MAY HASTEN TO ADD THAT THE DELETION OF SUB CLAUSES (1) AND (2) OF RULE 6DD (J) IS ONLY A STEP FORWARD IN THE ACHIEVEMENT OF THE AVOWED OBJEC T ENVISAGED U/S 40A(3) OF THE ACT. 15. THEREFORE THE ONLY EXCEPTION THAT THE ASSESSEE CAN CLAIM IS WHEN PAYMENTS ARE REQUIRED TO BE MADE ON DAYS WHEN THE BANKS WERE CLOSED ON ACCOUNT OF HOLIDAYS OR STRIKE. TRANSACTIONS AFTER THE BANKING HOURS IN THE COURSE OF REGULAR BUSINESS WILL NOT FALL WITHIN THIS EXCEPTION. IN TH OSE TRANSACTIONS, THE PAYMENT IS NOT REQUIRED TO BE MAD E WHEN THE BANKS ARE CLOSED I.E. AFTER BANKING HOURS. FURTHER THE PURPOSE OF THE DISALLOWANCE U/S 40A (3) IS TO DISSUADE TRAN SACTIONS BY CASH. 16. SEC 40A(3) ITSELF PROVIDES THAT THE EXCEPTIONS WILL HAVE TO BE PRESCRIBED HAVING REGARD TO THE NATURE AND EXTEN T OF BANKING FACILITIES AVAILABLE, CONSIDERATIONS OF BUS INESS EXPEDIENCY AND OTHER RELEVANT FACTORS. TAKING ALL T HESE FACTORS, CONSIDERING THE NATURE OF ACTIVITY OF THE ASSESSEE AND THE NECESSITY FOR THEM TO PAY CASH TO THE LAND OWNERS W E ARE OF THE OPINION THAT THE CONDITION UNDER RULE 6DD FOR EXEMP TION VIZ., TRANSACTIONS SHOULD HAVE TAKEN PLACE ON BANK HOLIDA YS SHOULD BE READ DOWN IN THE CASE OF THE ASSESSEE. 17. IN THE CASE UNDER CONSIDERATION, NO BANKING FAC ILITY IS AVAILABLE WHERE THE PROPERTIES WERE PURCHASED BY AS SESSEE, THEREFORE, THERE WAS NO CHOICE FOR THE ASSESSEE EXC EPT TO MAKE THE PAYMENTS IN CASH DUE TO EXCEPTIONAL OR UNAVOIDA BLE CIRCUMSTANCES AS PROVIDED UNDER RULE 6DD. IN VIEW O F THE ABOVE DISCUSSION, WE SET ASIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION OF RS. 4,09,98,105/- MADE U/S 40A(3) O F THE ACT.' 9. IN VIEW OF THE ABOVE DISCUSSION, SINCE THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE AO TO SUGGEST THE AVAILABILITY OF BANKING FACILITY IN THE PLACE WHERE THE PROPERTIES WERE PURCHASED BY THE ASSESSEE, THEREFORE, IN VIEW OF RULE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 12 6DD(G) THE DISALLOWANCE CANNOT BE MADE U/S. 40A(3). HENCE, THE CIT(A) IS JUSTIFIED IN DELETING THE ADDITION. 10. REGARDING PAYMENT ON HOLIDAY AT RS. 69,29,000, THE DEPARTMENT CANNOT HAVE ANY GRIEVANCE ON THIS ISSUE AS THE CIT(A) DIRECTED THE AO TO VERIFY WHETHER CASH PAYME NTS DISALLOWED BY THE AO WERE MADE ON PUBLIC HOLIDAY AN D IF IT IS SO TO ALLOW THE EXPENDITURE AS PER RULE 6DD(J) OF T HE IT RULES. ACCORDINGLY, THIS GROUND OF THE REVENUE IS REJECTED . 11. NOW COMING TO SUSTAINING ADDITION OF RS. 3,15,65,26 3 WHERE PAYMENTS WERE MADE TO AGENTS. THE LEARNED AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER HAS SUMMONED THE AGENTS FOR VERIFICATION. OUT OF 7 AGENTS 6 HAVE APPEARED BEFORE HIM (SEVENTH ONE COUL D NOT APPEAR BECAUSE OF ILLNESS) AND CONFIRMED THAT THEY HAD ARRANGED THE SALE TRANSACTION FOR THE ASSESSEE COMP ANY, AND THE SELLERS INSISTED ON CASH PAYMENT. THEY HAVE AL SO CONFIRMED THAT THEY HAVE RECEIVED COMMISSION FROM THE ASSESSE E COMPANY FOR THE SERVICES RENDERED, ON WHICH TDS WAS ALSO MADE. THE ASSESSING OFFICER HELD THAT THE SAID AGEN TS ARE ONLY BROKERS AND A BROKER CANNOT BE TREATED AS AN AGENT AND THE EXEMPTION UNDER RULE 6DD IS AVAILABLE ONLY IN RESPE CT OF PAYMENTS MADE THROUGH AN AGENT OF THE PARTY CONCERN ED. THE AO WAS OF THE VIEW THAT THE AGENTS UTILISED THE VEH ICLES PROVIDED BY THE COMPANY TO HAND OVER THE CASH TO TH E INTENDED AGRICULTURISTS WHICH GOES TO PROVE THAT TH EY WERE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 13 ACTING ONLY AS MESSENGERS OF THE EMPLOYEES OF THE A SSESSEE+ COMPANY. 12. THE AR SUBMITTED THAT AS PER RULE 6DD(K) WHICH SAYS 'WHERE THE PAYMENT IS MADE BY ANY PERSON TO HIS AGE NT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR GOODS OR SERVICES ON BEHALF OF SUCH PERSON' EXEMPTION IS AVAILABLE FOR CASH PAYMENTS U/S. 40A(3 ). THE REQUIREMENT IS THE PAYMENT SHOULD HAVE BEEN MADE TO AN AGENT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR G OODS OR SERVICES ON BEHALF OF THE PERSON FOR WHOM HE IS ACT ING AS AN AGENT. IT MAY BE NOTED THAT THE EXEMPTION UNDER RUL E 6DD(K) IS AVAILABLE ONLY IN RESPECT OF CASH PAYMENTS MADE TO AN AGENT, HENCE, IT IS IMPORTANT TO KNOW THE MEANING OF 'AGEN T' VIS+A+VIS 'BROKER'. THE WORDS 'AGENT' & 'BROKER' ARE NOT DEFI NED IN THE IT ACT. THERE IS NO DEFINITION OF THE TERM 'AGENT' IN SECTION 40(A)(3) OR IN SECTION 2 OF THE ACT. AS PER WELL SETTLED PR INCIPLES, WHEN THERE IS NO STATUTORY DEFINITION OF A WORD, THE MEA NING OF THE TERM SHOULD BE ASCERTAINED BY APPLYING COMMON PARLA NCE TEST VIZ., AS THE WORD IS UNDERSTOOD IN THE POPULAR SENS E I.E., THE MEANING ATTACHED TO SUCH EXPRESSION IN THE PARTICUL AR TRADE CIRCLE INSTEAD OF ATTACHING A TECHNICAL MEANING. 13. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT TH E DIFFERENCE IN THE MEANING OF 'AGENT' AND 'BROKER' I S VERY THIN AND THE EXPRESSION 'AGENT' USED IN RULE 6DD(K) CONN OTES TO AGENTS OF THE COMPANY BUT IN THE PRESENT CASE THE ASSESSEE USED THE SERVICES OF LOCAL VILLAGERS / AGRICULTURIS TS TO BROKER THE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 14 DEAL BETWEEN THE COMPANY AND THE SELLERS AND THEREF ORE, THE SAID PEOPLE CANNOT BE TERMED AS AGENTS OF THE COMPA NY. IT IS COMMON KNOWLEDGE THAT EMPLOYING BROKERS IS A COMMON PRACTICE AMONG REAL ESTATE DEALS AND IF THE INTENTI ON OF THE LEGISLATURE IS TO EXEMPT CASH PAYMENTS MADE THROUGH MIDDLEMEN FROM THE PURVIEW OF SECTION 40A(3) THEY W OULD HAVE INDICATED ACCORDINGLY. THE FACT THAT RULE 6DD(K) SP ECIFICS PAYMENTS MADE THROUGH AGENTS IT IS IMPORTANT TO EXA MINE THE SERVICES RENDERED BY THE 7 PERSONS TO COME TO THE C ONCLUSION WHETHER THEY ARE AGENTS OF THE COMPANY OR BROKERS W HO RENDERED SERVICES FOR COMMISSION. HE DREW OUR ATTENTION TO THE STATEMENTS GIVEN BY THE 6 PERSONS AND THE RELEV ANT QUESTIONS AND ANSWERS ARE REPRODUCED AS UNDER: 'SWORN STATEMENT OF TADIBONDA VENKATESWARA RAO, OCC UPATION SHOWN US AGRICULTURIST AND REAL ESTATE AGENT. Q.7 PLEASE EXPLAIN THE MODUS OPERANDI OF SERVICES R ENDERED? A. 7 ABHINANDANA PEOPLE APPROACHED ME JAR ACQUIRIN G OF LAND. I INTRODUCE THE COMPANY'S PEOPLE TO THE INTERESTED FA RMERS AND I ACTED AS AGENT BETWEEN THE TWO PARTIES. I PARTICIP ATE IN THE NEGOTIATION PROCESS ALSO. MY RESPONSIBILITY ENDS WI TH REGISTRATION. BECAUSE I AM ILLITERATE, I TAKE SUPP ORT FROM MY NEPHEW, G. SRINIVASA RAO. Q. 15 ON YOUR OWN, DID YOU MAKE ANY ADVANCES TO THE LANDLORDS? A. 15 NO. I DID NOT MAKE ANY PAYMENTS TO FANNERS O N BEHALF OF ABHINANDANA. Q. 16 SO, YOU ARE NOT INVOLVED IN PAYING ANY AMOUN TS TO LANDLORDS? A. 16 ON MY OWN, I DID NOT GIVE ANY AMOUNTS. AFTER DEAL STRUCK, CASH WILL BE WILL BE PAID BY ABHINANDANA TO THE FARMERS THROUGH ME. IF THERE IS BIG AMOUNT, FARMERS WILL COME TO THE CO MPANY. IF THERE ARE LITTLE AMOUNTS, I TAKE THE MONEY FROM ABH INANDANA AND THE SAME ARE PAID TO THE FARMERS. EVERY TRANSAC TION WAS ROUTED THROUGH BY ME ONLY. AS SUBMITTED EARLIER, IN ALL THESE TRANSACTIONS, I USE TO TAKE SUPPORT FROM MY NEPHEW. ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 15 Q. 22 AT ANY TIME, DID ABHINANDANA PAY THE AMOUNT TOWARDS COST OF LAND BY CHEQUES INTO YOUR ACCOUNT? A. 22 NO, ALL THE AMOUNTS PAID IN CASH ONLY TO ME, TOWARDS COMMISSION INCOME. Q. 23 HAVE YOU GIVEN ANY RECEIPTS IN RESPECT OF CA SH RECEIVED BY YOU ON BEHALF OF LANDLORDS? A. 23 I GIVE RECEIPTS TO ABHINANDANA IN PROOF OF C ASH TAKEN BY ME. AFTER RECEIPT FROM THE LANDLORDS, I TAKE BACK THE INITIAL RECEIPT GIVEN BY ME TO ABHINANDANA. Q. 28 THOUGH YOU HAVE GOT TDS, YOU HAVE NOT FILED Y OUR IT RETURNS. A. 28 I DO NOT KNOW ABOUT THESE PROCEDURES HENCE TH E FAILURE TO SUBMIT THE ROI. SWORN STATEMENT OF SRI M. RAJA VENKATESWARA RAO Q. 3 PLEASE EXPLAIN THE FULL DETAILS OF BROKERAGE INCOME? A. 3 I USE TO BROKERAGE LANDS FOR ABHINANDANA. IN VERY FEW CASES, I DID SO FOR OTHERS. PER YEAR, THE INCOME ON BROKERA GE WILL BE AROUND RS. 2 TO 2.5 LAKHS. I USE TO GET AT LEASE R S. 5,000 PER ACRE AND UP TO RS. 35,000. I ASSISTED IN PURCHASIN G LAND FOR ONE MR. SUSHIL KUMAR WHO RESIDES IN USA. ANOTHER P ERSON WAS C. RAVI KUMAR, WHO RESIDES AT CHENNAI. Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR BROKERAGE INCOME. WHAT WAS THE BASIS OF DETERMINATION OF BROKERAGE INCOME AND WHAT ARE THE DUTIES AND RESPONSIBILITIES AS COMMISSION AGENT ? A. 6 I AM ACTING AS BROKERAGE AGENT FOR PURCHASE O F LAND FOR THE LAST 7 YEARS. I HAVE BEEN RELATED TO ABHINANDANA HOUSING PVT. LTD. FOR THE LAST 5 YEARS. THERE IS NO RATE OF FIXED RAT E OF COMMISSION I GOT. THEY USE TO GIVE ON A RANDOM BASIS. AS THERE IS NO INVESTMENT ON MY SIDE, I USE TO TAKE WHATEVER THE C OMMISSION INCOME AS MY EXTRA INCOME ONLY. WE IDENTIFY PROSPEC TIVE FARMERS WHO ARE WILLING TO SELL LAND AND INTRODUCE THE SAME TO THE COMPANY. I USE TO ACT AS MEDIATOR FROM THE AGRE EMENT STAGE TILL THE REGISTRATION. Q. 11 ON YOUR OWN, DID YOU MAKE ANY ADVANCES TO TH E LAND LORDS? A. 11 NO. I DID NOT MAKE ANY PAYMENTS TO FARMERS O N BEHALF OF ABHINANDANA. Q. 12 SO, YOU ARE NOT INVOLVED IN PAYING ANY AMOUN TS TO LANDLORDS? A, 12 ON MY OWN, I DID NOT GIVE ANY AMOUNTS; AFTER DEAL STRUCK, CASH WILL BE PAID BY ABHINANDANA TO THE FANNERS THROUGH ME. I TAKE THE MONEY FROM ABHINANDANA AND THE SAME ARE PAID TO THE ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 16 FARMERS. EVERY TRANSACTION WAS ROUTED THROUGH BY M E ONLY. THE COMPANY USED TO PROVIDE VEHICLE(S) FOR THESE TR ANSACTIONS. SWORN STATEMENT OF SRI K. SURESH KUMAR Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR COMMISSIO N INCOME. WHAT WAS THE BASIS OF DETERMINATION OF COMMISSION INCOME AND WHAT ARE THE DUTIES AND RESPONSIBILITIES AS COMMISSION A GENT? A. 6 I AM ACTING AS COMMISSION AGENT FOR PURCHASE OF LAND FOR SINCE THE YEAR 2005 FOR ABHINANDANA HOUSING PUT. LTD. THE RE IS NO RATE OF FIXED RATE OF COMMISSION, I GOT. THEY USE T O GIVE ON A RANDOM BASIS. AS THERE IS NO INVESTMENT ON MY SIDE, 1 USE TO TAKE WHATEVER THE COMMISSION INCOME AS MY EXTRA INC OME ONLY. WE IDENTIFY PROSPECTIVE FARMERS WHO ARE WILLING TO SELL LAND AND INTRODUCE THE SAME TO THE COMPANY. 1 USE TO ACT US MEDIATOR FROM THE AGREEMENT STAGE TILL THE REGISTR ATION. SWORN STATEMENT OF MUNNANGI SIVA SESHAIAH Q. 6. PLEASE EXPLAIN THE MODUS OPERANDI OF SERVICE S RENDERED? A. 6 ABHINANDANA PEOPLE APPROACHED ME FOR ACQUIRIN G OF LAND. I INTRODUCE THE COMPANY'S PEOPLE TO THE INTERESTED FA RMERS AND I ACTED AS AGENT BETWEEN THE TWO PARTIES. I PARTICIPA TE IN THE NEGOTIATION PROCESS ALSO. SWORN STATEMENT OF BASHYAM HARI BABU Q. 5 PLEASE FURNISH THE DETAILS OF SOURCE OF YOUR INCOME. A. 5 I CULTIVATE ON BEHALF OF MY OWN AND MY DECEAS ED BROTHER-IN- LAW'S AGRICULTURAL LAND. OUT OF THE SAME, 1 ACRE ON MY WIFE'S NAME. MY ANOTHER SOURCE OF INCOME IS COMMISSION OF REAL ESTATE BROKING. DURING THE YEAR 2008-09, 1 EARNED A BOUT RS. 1.30 LAKHS. IN THE PREVIOUS YEARS, IT WAS ABOUT RS . 40 TO 50 THOUSAND. IN 2010, I TOOK RS. 37,000/- AND IN 2011 TILL TODAY, 1 GOT AROUND RS. 20,000/-. Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR COMMISSIO N INCOME. WHAT WAS THE BASIS OF DETERMINATION OF COMMISSION INCOME AND WHAT ARE THE DUTIES AND RESPONSIBILITIES AS COMMISSION A GENT? A. 6 I AM DOING REAL ESTATE WORKS SINCE 2004. I OF FER SERVICES ONLY FOR ABHINANDANA. IN VERY FEW CASES, I OFFERED TO P RIVATE PARTIES. PER ACRE I EARN UP TO RS. 20,000. MEKALA SRINIVASA RAO (KUNCHANAPALLI), THOTAKURA SRINIVAS (PORANKI) ( TO MY MEMORY GOES). ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 17 14. THE DR SUBMITTED THAT FROM THE ABOVE STATEMENTS IT IS APPARENT THAT THE ABOVE SAID PARTIES ARE NOT THE AG ENTS OF THE COMPANY BUT THEY WORKED AS MIDDLEMEN AND OFFERED TH E SERVICES TO OTHER PARTIES AS WELL AND THIS DISTINGU ISHES THE BROKERS FROM THE AGENTS AND HENCE, THE CONTENTION OF THE AS SESSING OFFICER THAT THE ALLEGED AGENTS WERE JUST MIDDLE ME N/BROKER PROVIDING SERVICES FOR COMMISSION BUT NOT AGENTS AN D HENCE, THE EXEMPTION CLAUSE (K) UNDER RULE 6DD OF IT RULES DOES NOT APPLY, APPEARS CORRECT. ACCORDINGLY, THE CASH PAYM ENTS MADE THROUGH THIRD PARTIES CANNOT BE BROUGHT UNDER THE E XEMPTION CLAUSE AND THE ASSESSING OFFICER IS JUSTIFIED IN DI SALLOWING THE PAYMENT MADE IN CASH IN CONTRAVENTION OF THE PROVIS IONS OF SECTION 40A(3) AND, THEREFORE, THE DISALLOWANCE OF RS. 3,15,65,263 IS JUSTIFIED. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL ON RECORD. THE STRONG CONTENTION OF THE DEPARTMENT IS THAT THE ABOVE AGENTS WORKED FOR OTHER PERSONS AS AGENTS AND THEY CANNOT BE AGENTS TO THE ASSESSEE. THERE IS NO PRO HIBITION OR RESTRICTION ON A MIDDLEMAN TO WORK AS AGENT OF DIFF ERENT PARTIES, IF HE WAS ACTING ON BEHALF OF THE ASSESSEE AS AGENT . THE ASSESSEE'S CASE FALLS UNDER THE PURVIEW OF CLAUSE 6 DD(K) OF IT RULES, 1962. BEING SO, EXEMPTION IS TO BE GIVEN AN D ADDITION CANNOT BE MADE U/S. 40A(3) OF THE ACT. THE REASONS ADVANCED BY THE DEPARTMENT ARE NOT APPROPRIATE. ACCORDINGLY , WE ARE INCLINED TO ALLOW THE CLAIM OF THE ASSESSEE AT RS. 3,15,65,263. ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 18 16. REGARDING THE BALANCE AMOUNT OF RS. 4,25,000, THE ASSESSEE CANNOT HAVE ANY GRIEVANCE, SINCE THE ASSES SEE BEFORE THE CIT(A) SUBMITTED THAT THIS PAYMENT OF RS. 4,25, 000 PERTAINS TO THE VILLAGE OF PEDAVADLAPUDI AND IT WAS WRONGLY CLA IMED BY THE ASSESSEE THAT NO BANKING FACILITY WAS AVAILABLE IN THAT VILLAGE. BUT, IN FACT, THERE IS BANKING FACILITIES AVAILABLE IN THAT VILLAGE. BEING SO, THIS PAYMENT CANNOT BE COVERED BY RULE 6DD(G) OF IT RULES. ACCORDINGLY, TO THAT EXTENT, T HIS ISSUE IS DECIDED AGAINST THE ASSESSEE. IT IS ALSO NOTED THA T THE AMOUNT MENTIONED BY THE ASSESSEE IN ITS APPEAL AT RS. 3,21 ,65,268 IS NOT CORRECT. INSTEAD, IT SHOULD BE RS. 3,19,90,263 AS IT COMPRISES OF ONE AMOUNT OF RS. 3,15,65,263 AND ANOTHER AMOUNT OF RS. 4,25,000, AS DISCUSSED ABOVE. APPEAL OF THE ASSES SEE IS PARTLY ALLOWED. 17. IN THE RESULT, REVENUE APPEAL IS DISMISSED AND ASSE SSEE'S APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2014. SD/+ (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/+ (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 12 TH FEBRUARY, 2014 TPRAO ITA NOS. 695 & 612/HYD/13 M/S. ABHINANDANA HOUSING PVT. LTD. ============================== 19 COPY FORWARDED TO: 1. THE DEPUTY CIT, CIRCLE+1(1), 4 TH FLOOR, AAYAKAR BHAVAN, L.B. STADIUM ROAD, BASHEERBAGH, HYDERABAD+4 2. M/S. ABHINANDANA HOUSING PVT. LTD., 6+3+347/9/N/ 1, OFFICE PREMISES NO. 303, 3 RD FLOOR, NV PLAZA, DWARAKAPURI COLONY, HYDERABAD. 3. THE CIT(A)+II, HYDERABAD. 4. THE CIT+I, HYDERABAD. 5. THE DR BENCH 'B', ITAT, HYDERABAD