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2015 (6) TMI 363 - ITAT DELHI

2015 (6) TMI 363 - ITAT DELHI - TMI - Disallowance u/s 40A(3) - 1/5th of total expenditure incurred otherwise than by crossed cheque - CIT(A) deleted disallowance - Held that:- The assessee’s claim has been that these payments were "Bayana" "token" money in cash outside the banking hours for sales effected to parties ultimately to whom major payments were made by cheque payments remains unsupported on record as the assessee also pleads that no expenditure has been claimed in the year under consi .....

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no amount has been claimed as expenditure in the year under consideration" is a finding of fact which was not confronted to the AO in the light of multi-faceted arguments advanced. None of these facts are coming out from the assessment order and in the absence of the correctness of the finding available on record being established, we are of the view that blindly relying upon the order of the CIT(A) in the case of the issue being covered by the decision of the ITAT in the case of Vansidhar Proj .....

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the assessee submitted that the assessee as per record had withdrawn ₹ 1.15 crores and it is out of this ₹ 86.90 lacs were transferred to the Oriental Bank of Commerce Bank at Mathura. A perusal of the impugned order shows that the assessee’s claim was that infact total cash withdrawn from the banks was ₹ 1,97,00,000/- and the amounts found deposited were only ₹ 86.90 lacs. The assessee has also taken the plea that this was for disbursement of the funds for the purchases .....

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ic date in Mathura due to inadequacies in the bank account at Mathura has not been attempted. The said facts and evidence as has rightly been observed by the AO can be demonstrated by way of a cash flow statement relating the same to the instances of sale needs to be established and it is only then it can be considered whether the amounts were to be added u/s 69 or not. In the absence of relevant evidence on record, the afore-quoted finding of the CIT(A) is set aside and the issue is restored ba .....

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ctness of the order dated 14/1/2013 of CIT(A) III, New Delhi pertaining to 2007-08 assessment year has been assailed on the following grounds:- "1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the disallowance of ₹ 15,04,300/- made by the Assessing Officer u/s 40A(3) of the Income Tax Act, being 1/5th of total expenditure of ₹ 75,21,500/-incurred otherwise than by crossed cheque. 2. On the facts and in the circumstances of the case, the CIT .....

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of real estate projects in various parts of India. The group is stated to be involved in conceiving and executing real estate projects such as Township, Group housing, Luxury Apartments, Shopping Malls and Office Complexes. 3. A perusal of the record shows that return disclosing net loss of ₹ 1,20,760/- was originally filed by the assessee. Subsequently notice u/s 153A was issued to the assessee pursuant to search u/s 132 conducted on the assessee on 25/9/2008 . In response thereto, the a .....

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ore the First Appellate Authority. Before the CIT(A), it was submitted that the Assessing Officer has not addressed the facts correctly. Addressing the facts it was submitted that the assessee had purchased land measuring 175.2342 acres for ₹ 15,60,77,500/- out of which payment in cash amounting to ₹ 72,70,500/- was effected instead of ₹ 75,21,500/- as considered by the AO. It was further stated that the payments were stated to be made for "bayana" and were made outsi .....

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bed limits of ₹ 20,000/- were genuine on account of following:- (i) The transaction of land purchase was supported by registered documents which were executed before the Sub-Registrar. (ii) The cash payments were made to those persons to whom payments were also made through account payee cheques and these cheque payments accounts for more than 95% of the total value of transactions. Therefore identity of the persons was established beyond any doubt. (iii) The genuineness of the transaction .....

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ty to the assessee company. Hence these payments were made in cash for business expediency." 4.2. The facts were claimed to be identical to the facts considered in the case of a sister concern in the name of Vansidhar Projects Ltd. as herein also no deduction had been claimed for this expenditure. 5. The CIT(A) considering the explanation accepted the claim that disallowance if any, could have been restricted only to 14,54,100/- i.e 20% of ₹ 72,70,500/- and not ₹ 75,21,500/-. Fu .....

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t the issue is fully covered by the order of the Tribunal in the case of Vansidhar Projects and facts are identical. It was further submitted that the inaccuracies in holding that payment in excess of ₹ 20,000/- totaling ₹ 72,70,500/- instead of ₹ 75,21,500/- have been brought out in the impugned order and have not been rebutted by the Revenue. It was also submitted by him that on facts the CIT(A) has been very fair as he has held in para 6.3 that as and when the claim of expen .....

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the inaccuracies brought out in pages 6 to 7 of the impugned order qua serial No.7, 21, 22 & 19, it has been submitted that the amount should have been ₹ 72,70,500/- as per the details brought out in pages 10-12 of the impugned order. A perusal of the same shows that these facts were never confronted by the CIT(A) to the AO. It is further seen that the assessee s claim has been that these payments were "Bayana" "token" money in cash outside the banking hours for sal .....

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idence available that upto the assessment year 2007-08 closing work in progress in land to the tune of ₹ 18,13,70,146/- had been shown which comprises of opening work in progress, purchases and development cost but no amount has been claimed as expenditure in the year under consideration" is a finding of fact which was not confronted to the AO in the light of multi-faceted arguments advanced. None of these facts are coming out from the assessment order and in the absence of the correc .....

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order is set aside and it is restored back to the file of the AO to decide the same afresh by way of a speaking order in accordance with law. Needless to say that the assessee shall be afforded a reasonable opportunity of being heard. Accordingly, Ground No.-1 of the Revenue is allowed for statistical purposes. 9. The second issue agitated by the Revenue in the present appeal is found to be addressed in para 5 of the assessment order. A perusal of the same shows that the Assessing Officer refer .....

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e claim made, the explanation offered was rejected and addition of ₹ 56,22,088/- was made. 10. Aggrieved by this the assessee went in appeal before the CIT(A) reiterating the submissions advanced before the CIT(A). It was explained that the source stood disclosed and infact cash was withdrawn from various banks amounting to ₹ 1,97,00,000/- and cash deposits were only ₹ 86,90,000. It was claimed that for purchases effected in Mathura withdrawals were made at Head Office Delhi Br .....

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ant company that cash deposits of ₹ 56,22,088 in OBC bank account were made out of cash withdrawals from HDFC bank account is found to be correct. Further the contention of the appellant deserves to be accepted that since both these bank account have been duly incorporated in the audited annual accounts, the deposits in these bank accounts can not be termed as investment made outside the books of accounts. 8.2. Further I also find that the explanation given by the appellant company with re .....

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ddition can not be sustained. Hence the addition of ₹ 56,22,088 made by AO is here by deleted and appellant gets a relief of ₹ 56,22,088/-" 12. Aggrieved by this, the Revenue is in appeal before the Tribunal. The Ld. CIT DR submitted that the findings and observations of the AO spelt out clearly in the assessment order have not been dealt with specifically by the CIT(A). It was his submission that the issue could have been addressed only by way of a cash flow statement which adm .....

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nd made deposits in the other as per the needs. The dates were claimed to be reasonably close and the arguments that they were utilized for the purchases made at Mathura is consistently on record. Accordingly relying on the same, it was his submission that ht impugned order deserves to be upheld. 14. We have heard the rival submissions and perused the material available on record. A perusal of the explanation filed by the assessee before the AO as per para 5.1 extracted in the assessment order d .....

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