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ACIT Versus M/s. Business Park Promoters (P) Ltd.

Disallowance of interest on PDCs paid out of books of account - CIT(A) deleted the addition - Held that:- The issue in question is covered by the order of the Tribunal in the group case of the assessee namely M/s IAG Promoters and Developers Pvt. Ltd. [2014 (12) TMI 216 - ITAT DELHI] wherein held that ground raised by the Revenue is misconceived because the CIT(A) has not deleted the addition. The CIT(A) has only directed the A.O. to recomputed the interest on post dated cheques after six months .....

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assessee has successfully demonstrated that the payment were reimbursement made by CWPPL, thus we hold that CIT (A) is justified in deleting the addition. Also see case of Glitz Builders and Promoters Pvt.Ltd. [2015 (5) TMI 384 - ITAT DELHI] Decided in favour of assessee. - ITA No.1404/Del/2013, ITA No.1732/Del/2013 - Dated:- 20-4-2015 - Shri George George K. and Shri T.S. Kapoor JJ. For the Appellant : Shri V.S. Rastogi, AR For the Respondent : Smt. Anuradha Mishra, CIT DR ORDER Per Shri Geo .....

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n PDCs paid out of books of account. 2. On the facts and in the circumstances of the case, the CIT (A) has erred in deleting the addition of ₹ 60,76,555/- made by the Assessing Officer 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. GROUND NO.1 4. Briefly stated the facts of the case are as follows. During assessment proceedings, Assessing Officer noticed that the assessee company is one of the gr .....

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from sale deed to date of encashment, on the amount of PDCs on the basis of seized material. The A.O. gave the findings in the assessment order that total such interest payable comes to ₹ 40,22,546/- on PDCs and such interest is paid in cash outside of books of account. Therefore, such interest is added as unaccounted/unexplained expenses. 5. Aggrieved the assessee preferred an appeal before the First Appellate Authority. The CIT(A) after examining the seized papers/documents directed to r .....

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or the A.Y. 2008-09. The Ld. D.R. relied on the assessment order. 7. We have heard the rival submissions and perused the material on record. The ground raised by the Revenue is misconceived because the CIT(A) has not deleted the addition of ₹ 40,22,546/-. The CIT(A) has only directed the A.O. to recomputed the interest on post dated cheques after six months from the date of issue of PDCs. In the group case an identical/similar order of the CIT(A) was confirmed by the Co-Ordinate Bench of t .....

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T(A) and also the submissions of both the parties and we do not find any infirmity in the order of the Ld.CIT(A). After examining the loose papers seized at the time of search at the assessee s premises, it was noticed that interest is paid on the PDCs only during the period of extension of PDCs and, therefore, he directed the A.O. to recomputed the interest on PDCs at the time of extension of the PDCs. He has further observed that if it is not possible to work out the extension of PDCs in each .....

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e of search. In view of the above, we do not find any justification to interfere with the order of ld.CIT(A) in this regard and accordingly, we reject ground no.1 of the revenue s appeal. 8. In view of the Co-Ordinate Bench order of the Tribunal in the group concern of the assessee in the case of M/s IAG Promoters and Developers Pvt. Ltd. (supra), we hold that the CIT(A) s order is correct and no interference is called for. It is ordered accordingly. GROUND NO.2 9. The AO had made a disallowance .....

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; 45.02 crores to the vendors of land which was over and above the sale consideration and these payments had been made much after the execution of sale deed. During the year under consideration, the assessee company made the following additional payments :- Name of the Payee Amount (Rs.) S/D in respect of which paid Prem Chand 18,35,615 1666 dt. 06-05-2005 Dharam Veer 16,93,125 1667 dt. 06-05-2005 Karan Singh & Others 10,47,815 3655 dt. 09-06-2005 Ranveer 6,41,285 4424 dt. 27-06-2005 Narveer .....

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tion of the assessee. He, however, gave certain direction to quantify the disallowance made. While giving effect to the directions of the CIT (A), the entire amount of ₹ 60,76,555/- was allowed. Revenue being aggrieved is in appeal before us. 11. At the very outset, ld. counsel for the assessee submitted that assessee has not claimed the expenses as a deduction and AO is not justified in disallowing the same. It was further submitted by the ld. counsel that similar disallowance was made in .....

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Ltd. (supra), the order of co-ordinate Bench of the Tribunal in case of M/s. Westland Developers Pvt. Ltd. may be followed. The ld. DR was unable to controvert the submissions made by the ld. AR. 12. We have heard rival submissions and perused the material on record. In the case of Group concern, namely, M/s. Westland Developers Pvt. Ltd., the Tribunal vide its order dated 22.08.2014 in ITA No.1752/Del/2013, on identical facts and circumstances, has held as follows :- 13. We have heard the riva .....

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sessee 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 arri .....

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here 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/2013 7 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. 13. Further similar disallowance has been deleted by the Tribunal in other group cases, namely, (i .....

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A No.1732/Del/2013 (Assessee s Appeal) 15. In assessee s appeal, six grounds are raised. However, in course of hearing, the ld. AR did not press grounds no.1, 2, 2.1, 5 and 6, hence, these grounds are dismissed as not pressed. The surviving grounds, namely, grounds no.3, 3.1, 3.2, 4 and 4.1 read as follows :- 3. That on the facts and circumstances of the case and in law the CIT(A) erred in not accepting the appellant's contention that Additional Payments having not been claimed as deduction .....

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ch no deduction was claimed by the appellant. 4.1 That even on merits the disallowance was not justified. We shall take up for adjudication the issues groundwise as under. GROUND NOS.3, 3.1 & 3.2 16. The AO had made a disallowance of ₹ 60,76,555/- u/s 37(1) of the Act on account of additional payment for purchase of land. The assessee has challenged before the CIT (A) that the deduction of purchase of land having not being claimed by the assessee, no disallowance could be made. The CIT .....

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laim of the assessee and hence, there is no grievance arising for the assessee. Moreover, for our reasoning in para 12 to 14 of this order, these grounds of the assessee s appeal need not be adjudicated. It is ordered accordingly. GROUND NOS.4 & 4.1 18. Brief facts in relation to the above ground are as follows. The assessee company has made cash payment for acquiring certain land. The total cash payment was ₹ 41,27,344/-. The A.O. invoking the provisions of Section 40A(3) of the Act d .....

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e land from various farmers/land owners in its own name by entering into sale deed. Registration is done in the name of assessee. The payment is made by appellant. As per the collaboration agreement, the assessee company would acquire the land and transfer 100% of its development right to M/s CWPPL. The appellant company is shown as owner of the land. In lieu of transferring the development right, the appellant company gets cost of land plus ₹ 35,000 per acre for CWPPL. This being the case .....

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llant and only developmental right is transferred to CWPPL. In that scenario, the appellant company can be safely termed as engaged in the business of development of real estate. What he receives i.e. cost of land and ₹ 35,000 per acre in receipt in its hand for the transfer of development right and the payment for purchase of land is its expenditure. On these facts in my opinion the payment made to land owner is expense in appellants hand and entire receipts including cost of land plus &# .....

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eliance is placed on Hon ble S.C. decision in the case of Tuticorin Alkalies Chemicals and Fertilisers Ltd. Vs. CIT (1997) 227 ITR 172. 20. The assessee being aggrieved is in appeal before us. 21. The Ld. Authorised Representative for the assessee submitted that the issue in question is covered in favour of the assessee by the orders of the Tribunal in the case of Glitz Builders and Promoters Pvt.Ltd. 1747/Del/2013 dt. 2.1.2015 for the A.Y. 2006-07 and in the case of Westland Developers Pvt.Ltd. .....

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