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2023 (12) TMI 800 - AT - Income TaxAssessment u/s 153A/153C - addition on account of income from undisclosed sources, disallowance made u/s 37(1) of additional payment and disallowance u/s 40A(3) - HELD THAT:- Since the addition made by the AO is based on the incriminating documents seized during the course of search carried out on BPTP on 15.11.2007 and the documents seized relates to the assessee company, the AO has rightly invoked the provisions of Section 153C. Thus, the judgments relied upon by the assessee in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT and others judgment are not applicable to the facts of the case. Also found in the order of the coordinate Bench in respect of other related companies relied by the Ld. AR, the Tribunal has specifically observed the finding of CIT(A) that the ‘assessment order also nowhere records any finding that any of the documents seized belong to the assessee’. However, in the present case, CIT(A) has given a categorical finding that the seized material belonged to the assessee company which is incriminating nature, in the case in hand the additions have been made based on the incriminating materials found during the search, therefore, the orders relied by the assessee are not applicable and we find no merit in Ground No. 1 of the Assessee, accordingly, Ground No. 1 of the Assessee is dismissed. Interest paid on post dated cheques - AO made addition regarding the interest paid on post dated cheques outside the books of accounts in cash - CIT(A) partly confirming the addition - HELD THAT:- Since, we have already upheld action of the A.O. in invoking the provisions of Section 153C of the Act, we find no merit in the submission of the Assessee. Further, considering the fact that the Ld. CIT(A) has elaborately considered the seized material and gave a factual finding which has not been controverted by the assessee even on merits, we find no error or infirmity in the order of CIT(A). Disallowance of additional payment - AO disallowed u/s 37 on account of additional payment for purchase of land - CIT(A) gave a direction to quantify the disallowance made by the A.O. and as per the directions while giving appeal effect, confirmed part addition - HELD THAT:-Jurisdictional High Court in the case of Group Company of the Assessee i.e. M/s Vasundrha Promoters Pvt. Ltd. [2018 (6) TMI 74 - DELHI HIGH COURT] as opined broad interpretation of the Explanation to Section 37(1) given by the Revenue is in the circumstances of this case not well founded. The other submission is that the such amount has to be taken as falling within the mischief of the said provision, in our opinion, is an incorrect premise. It is not every alleged violation of law, but such violation as results in a penal consequence, determined by that law, which is attracted by Section 37(1). The other interpretation would confer jurisdiction on matters beyond the Income Tax Act. The revenue authorities do not have such powers. Revenue Authority argued that this is to decide what constitutes infraction of other provisions of law. Disallowance u/s 40A(3) - cash payment made for purchase of land - assessee had received imbursement of all amounts paid related to transaction of purchase of land - It is the case of the Assessee that the amount paid on account of purchase of land was neither debited to profit and loss account nor claimed through computation of taxable income - HELD THAT:- By respectfully following the ratio laid down by the Co-ordinate Bench in the case of M/s. Westland Developers Pvt. Ltd. [2014 (12) TMI 254 - ITAT DELHI] and considering the fact that the Assessee has neither debited the amount of cost of land in P & L account nor claimed any deduction in respect of cost of land through computation and finding the parity, we allow the Ground by deleting the disallowance.
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