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2015 (5) TMI 904 - ITAT DELHI

2015 (5) TMI 904 - ITAT DELHI - TMI - Disallowance u/s 40A(3) - Held that:- Similar disallowance made by the A.O. in another group company namely Westland Developments Pvt. Ltd was deleted by Tribunal and hold the fact that the additional payments were warranted in order to avoid potential disputes amongst the claimants of the land holding which have been passed through to the land holders from generation to generation wherein there may be informal arrangements of ownership and or the payments w .....

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in is decided in favour of the assesse.

Reimbursement of expenses - whether cannot be treated to be a Revenue receipt? - Held that:- The assessee had made payment on behalf of country vide developers which was reimbursed to the assessee and it had not claimed any expenditure for these payments - Decided in favour of assesse.

Disallowance of interest on PDCS - CIT(A) deleted the disallowance - Held that:- After examining the loose papers seized at the time of search at the a .....

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ue that the CIT(A) deleted the addition of ₹ 5,06.625/- made by the Assessing Officer on account of Interest on PDCs is factually incorrect and contrary to the order of the CIT(A). - Decided against revenue. - I.T.A. No.1731 /Del/2013, I.T.A.No. 1403/Del/2013 - Dated:- 24-4-2015 - Shri G. 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 T.S. Kapoor, AM: These are cross appeals filed by assessee and rev .....

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ssessee is covered in its favour by the order of various benches of the Tribunal in the case of group companies of assessee itself. The Ld. A.R. explained the facts of the case and submitted that assessee was engaged in the business of development of land and it had been acquiring land on behalf of another group company. During the year under consideration, the assessee had made payments for purchase of land which was duly reimbursed by the company on whose behalf land was purchased. It was subm .....

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r company and for which assessee was reimbursed and therefore, there was no reason for disallowance. Regarding another addition made by A.O. the Ld. A.R. stated that A.O. had made additions on the basis that assessee must have paid interest out of books on post dated cheques. The Ld. A.R. submitted that all these issues are covered in favour of assessee in the case of group companies of the assessee. Regarding grounds No.3, 3.1 and 3.2, Ld. A.R. invited our attention to the fact that the A.O. ha .....

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peal for the relief granted by Ld. CIT(A) which the department has taken in its grounds of appeal vide ground No.2. Explaining the facts of the case, Ld. A.R. submitted that the assessee is part of group companies of BPTP and was engaged in the business of development of land. It was submitted that the assessee had made payment for purchase of land on behalf of M/s. Countrywide Promoters Pvt. Ltd. in view of collaboration agreement entered into between these two companies entered into on 15th Se .....

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n the land was fixed @ 5% and the remuneration was fixed @ ₹ 25,000/- per acre whereas vide appendix to the agreement entered into on 15.09.2004, 5% share as mentioned in the original agreement was reduced to 0% and the fee for purchase of land on behalf of M/s. Countrywide Promoters Pvt. Ltd. was increased to ₹ 35,000/- per acre. Ld. A.R. further submitted that in similar circumstances in the group companies in the case of Westland Development Pvt. Ltd., similar addition was made an .....

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ot warranted. He submitted that similar disallowance was made by the A.O. in another group company namely Westland Developments Pvt. Ltd. and the tribunal vide order dated 22.08.2014 had allowed relief under similar set of circumstances and in this respect, our attention was invited to paper book pages 29-63 where a copy of such order was placed. Our specific attention was invited to para 10.10 at page 58 of such paper book and in view of the above, it was submitted that the matter is covered in .....

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T(A) has wrongly deleted the addition of ₹ 5.36 lacs which the A.O. had made on account of additional payments. As regards ground No.1 in Revenue s appeal, Ld. D.R. submitted that the A.O. had held that assessee had made payments of interest on post dated cheques which were not recorded in the books of accounts, therefore, the A.O. had rightly made the addition and Ld. CIT(A) has not dealt the issue in its right perspective. 5. Ld. A.R. on the other hand submitted that ground No.1 of reven .....

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our by the order of Tribunal in the case of group company M/s. Westland Developers Pvt. Ltd. wherein under similar facts and circumstances, the Tribunal vide order dated 22.08.2014, vide para 13 at paper book page 62, it had deleted the similar addition. For the sake of convenience, the findings of Tribunal are reproduced below: 13. We have heard the rival submissions and perused the material available 0.1 record. The case law relied upon by the parties has been taken into consideration. On a co .....

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y 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 arrived at taking cognizance of the material fact that herein also no such claim of expenditure has been made. The fact that the additional p .....

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ot required to be adduced in the present proceedings. GroundNo-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. 7. We find that in the present case also, the assessee had not routed the additional payment through P & L account and the facts and circumstances in the present case are similar. Therefore respectfully following the above tribunal order, we allow grounds No.3, 3.1 and .....

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We have also taken ourselves through the judgement of the Jurisdictional High Court in the case of CIT vs Industrial Engineering Projects Pvt. Ltd. (cited supra) which has been relied upon before us for the proposition that reimbursement of expenses cannot be treated to be a Revenue receipt. How the judgement of the Apex Court in Tuticorin Alkali Chemicals & Fertilizers is applicable to the facts of the present case has not been set out in the order of the authorities nor has the Ld, DR bee .....

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re not applicable to the case at hand, no distinguishing fact, circumstance or position of law has been relied upon so as to come to a contrary finding than the one arrived at. Accordingly on a consideration of the peculiar facts and circumstances of the case and the judgements relied upon considering the relevant provision of the Act namely Section 40A(3), we hold for the detailed reasons given hereinabove that Section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatab .....

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bout this ground and has not pressed the same therefore, the same is dismissed as not pressed. 11. Now, coming to Revenue s appeal, we have already decided ground No.2 while adjudicating assessee s appeal. So far as ground No.1 is concerned, the same is covered in favour of assessee vide Tribunal order dated 31.10.2014 wherein under similar set of circumstances, in the case of group company namely M/s. IAG Promoters and Developers (P) Ltd., the Tribunal has allowed relief to the assessee. The re .....

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