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2020 (5) TMI 431 - AT - Income TaxAddition u/s 40A(3) being 20% of the amount paid - assessee was acquiring the land from the various farmers by paying cash to them - HELD THAT:- Disallowance u/s 40A(3) on identical facts and circumstances is decided by the several of the coordinate benches in the group cases holding that provisions of section 40A(3) does not apply to the facts of the case. The decision in case of Westland Developers Pvt. Ltd [2014 (12) TMI 254 - ITAT DELHI] has held that the provisions of section 40A(3) has been wrongly invoked as no expenses related to the addition has been claimed by the assessee but the amount was shown in the capital work in progress at the time of purchase of land which was reimbursed - assessee was acquiring the land from the various farmers by paying cash to them and debiting it to the capital work in progress account. This sum was not claimed as an “expenditure‟ in the profit and loss account. Therefore, there was no question of claiming deduction of this sum. The land was acquired on behalf of the other company who paid the assessee through account payee cheque. Such sum was credited in the capital work in progress account. The whole transaction of purchase of land as well as transfer to the sister concern was not routed through profit and loss account but were shown in the balance sheet. On these facts, coordinate bench held that provision of section 40A(3) of the Act do not apply. Addition on account of additional payments made for purchase of land - HELD THAT:- Identical disallowances were made in case of the other group concerns and also in case of Westland Developers Pvt. Ltd [2014 (12) TMI 254 - ITAT DELHI] wherein as deleted the identical addition.
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