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2015 (5) TMI 507

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..... 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 George George K, JM: These are cross appeals directed against the order of the CIT (A) XXXIII, New Delhi dated 24.12.2012. The relevant assessment year is 2006-07. 2. We shall first adjudicate the revenue s appeal. ITA No.1404/Del/2013 (Revenue s Appeal) 3. In Revenue s appeal, the following effective grounds are raised :- 1. On the facts and in the circumstances of the case, the CIT (A) has erred in deleting the addition of ₹ 40,22,546/- made by the Assessing Officer on account of interest on 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 acco .....

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..... follows. 5. We have heard the arguments of both the sides and perused relevant material placed before us. At the outset, the ground raised by the Revenue is misconceived because Ld.CIT(A) has not deleted the addition of ₹ 5,06,625/- but has only directed to recalculate the interest. We have carefully gone through the order of the Ld.CIT(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 case, then the A.O. is directed to recomputed interest on PDCs after six months from the date of issue of the PDCs. Therefore, the ground of appeal of the Revenue that the CIT(A) deleted the addition of ₹ 5,06,625/- made by the A.O. on account of interest on PDCs is factually incorrect and contrary to the order of the CIT(A). The CIT(A) directe .....

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..... he purchase of land and hence, no disallowance could be made. The CIT (A) did not accept this contention 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 the case of Group concern, namely M/s. Westland Developers Pvt. Ltd. for assessment year 2006-07 which was partly confirmed by the CIT (A). The Tribunal, on further appeal, vide order dated 22.08.2014 in ITA No.1712/Del/2013 (copy enclosed at pages 34 to 68 of the paper book filed by the assessee) deleted the addition confirmed by the CIT (A). It was submitted by the ld. counsel for the assessee that since the facts in the present case are identical to the facts of M/s. Westland Developers Pvt. Ltd. (supra), the order of co-ordinate Bench of the Tribunal in case of M/s. Westland Developers .....

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..... ly, (i) M/s. Glitz Builders and Promoters Pvt. Ltd. - ITA Nos.1747/Del/2013 1406/Del./2013 dated 02.01.2015 for AY 2006-07 and (ii) M/s. ISG Estate Pvt. Ltd. - ITA Nos.1532/Del./2013 1756/Del/2013 dated 23.01.2015 for AY 2006-07. 14. Since the facts in the present case are identical to the facts considered by the Tribunal in the case of M/s. Westland Developer Pvt. Ltd. (supra), we hold that CIT (A) is justified in deleting the addition of ₹ 60,76,555/-. It is ordered accordingly. ITA 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 by appellant, no disallowance could have been made in the hands of the appellant. 3.1 That without prejudice the CIT(A) erred in upholding the disallowance of Additional Payments made to .....

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..... 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, what is transferred is the development right, the ownership remains with assessee. Therefore, it is difficult to accept the Ld.AR s contention that the cost of land is reimbursed by CWPPL. If the land would have been sold to CWPPL, view might have been that the appellant is only working as an agent of CWPPL and expenditure pertains to CWPPL and the appellant is only receiving the cost of land as reimbursement of expenditure. I agree with the finding of AO that ownership continues with the appellant 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 .....

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