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TMI Blog2015 (9) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... der for the sake of convenience and brevity. 3. First we will deal with the cross appeals pertaining to M/s Sunaina Tower Pvt. Ltd. for the assessment year 2006- 07. In the assessee's appeal in ITA No. 1748/Del/2013, following grounds have been raised: "1. That on the facts and circumstances of the case and in law the CIT(A) erred in rejecting appellant's contention that assessment order made by Assessing Officer was bad in law and void ab-initio on the ground that it ought to have been made u/s 153C of the Income Tax Act, and not, as was done u/s 143(3)/147 of the Income Tax Act. 2. That without prejudice, on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the Assessing Officer and in making the assessment in pursuance thereof, without dealing with appellant's objections on merits. 2.1 That the CIT(A) having given a finding that no seized material obtained from the search of BPTP Group of cases (no search having been made on the appellant) belonged to the appellant, clearly erred in yet upholding the action u/s 147 taken in the hands of the appellant based on such seized material. 3. That on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 & 3.1 of the assessee's appeal and Ground No. 1 of the departmental appeal relates to the addition made by the AO on account of interest on Post Dated Cheques (PDCs). 7. The facts related to this issue in brief are that the AO made the addition of Rs. 28,42,472/- on account of interest on Post Dated Cheques for the part payment of purchase of land. He calculated interest @ 15% per annum from the date of issue (sale deed) to the date of encashment of the cheque and made the addition in the hands of the assessee. 8. Being aggrieved the assessee carried the matter to the ld. CIT(A) who held that if it is not possible to work out the extension of PDCs in his case then the AO is directed to recompute interest of PDCs after six months from date of issue of PDCs i.e. date of sale. 9. Now both the parties are in appeal. During the course of hearing the ld. Counsel for the assessee reiterated the contents of the grounds of appeal and at the very outset stated that this issue is squarely covered vide order dated 31.10.2014 in ITA Nos. 1674 & 1765/Del/2013 for the assessment year 2008-09 in the case of M/s IAG Promoters and Developers Pvt. Ltd. (copy of which is placed at page nos. 69 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said referred to order dated 31.10.2014, we do not see any valid ground to interfere with the findings given by the ld. CIT(A). Accordingly, we do not see any merit in the grounds of the assessee as well as the department, on this issue. 13. Next issue vide Ground Nos. 4 to 4.2 of the assessee's appeal and Ground No. 2 of the departmental appeal relates to the disallowance on account of additional payments for the purchase of land. 14. The facts related to this issue in brief are that the AO made a disallowance of Rs. 15,66,979/- on account of additional payments made for the purchase of land by observing that said payment was in violation of Stamp Duty Act and such expenditure was hit by explanation to Sec. 37(1) of the Act. 15. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that for the purchase of land, the assessee has not claimed the expenses, therefore, no disallowance has been called for in the hands of the assessee. The ld. CIT(A) however, did not accept the contention of the assessee i.e. the assessee having not claimed the deduction, so no disallowance could have been made. The ld. CIT(A) held that additional payment was made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein also no such claim of expenditure has been made. 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 were for commercial expediency to facilitate peaceful possession and registration of the land holding; where 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 be addressed 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. Ground No.3.1 and 3.2 as such need not be adjudicated in the present case. Qua Ground No-2 the observation and findings to the extent that general observations based on material found during BPTP group of companies which were searched does not have any bearing. The material not having been confronted to the assessee in the face of the argument that even otherwise has no nexus has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verted by the ld. DR. 21. After considering the submissions of both the parties and the material available on the record, it is noticed that an identical issue having similar facts was a subject matter of adjudication by the ITAT Delhi Bench 'H', New Delhi in the case of Westland Developers Pvt. Ltd. Vs ACIT in ITA No. 1752/Del/2013 for the assessment year 2006-07 wherein relevant findings have been given in para 10.10 of the order dated 22.08.2014 which read as under: "10.10. We have also taken ourselves through the judgment 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 judgment 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 been able to address the applicability of the said judgment to the issue at hand. We have taken ourselves through the said judgment and seen that it proceeds on entirety different facts and circumstances and has no applicabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. Accordingly, we do not see any merit in these grounds of the assessee. 26. Vide Ground Nos. 4 & 4.1 the issue agitated by the assessee relates to the confirmation of disallowance u/s 40A(3) of the Act. A similar issue was involved vide Ground Nos. 2 & 2.1 of the assessee's appeal in ITA No. 1734/Del/2013 in the case of M/s Sunglow Overseas Pvt. Ltd. Vs ACIT which we have already adjudicated in the former part of this order. Therefore, by giving the same reasoning this issue is decided in favour of the assessee. 27. Now we will deal with the appeal of the assessee in ITA No. 1754/Del/2013 and the departmental appeal in ITA No. 1670/Del/2013 in the case of M/s Super Growth Construction Pvt. Ltd. 28. Ground Nos. 1, 2, 2.1, 4 & 5 of the assessee's appeal were not pressed, so these are dismissed as not pressed. 29. The another issue agitated by the assessee vide Ground Nos. 3 & 3.1 and Ground No. 1 in the departmental appeal relates to the interest on PDCs. This issue is similar to the issue involved in the case of M/s Sunaina Tower Pvt. Ltd. (supra), therefore, our findings given therein in the former part of this order shall apply mutatis mutandis. Accordingly, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumulated profits on the date of any such payment and the payment is out of accumulated profits; (iv) the payment of loan or advance is not in the course of ordinary business activities. By a deeming provision it is the definition of dividend which is enlarged. The legal fiction does not extend to "shareholder". The fiction is not to be extended further for broadening the concept of shareholders. Circular No. 495, dated September, 22, 1987, issued by the Central Board of Direct Taxes is not binding on the High Court. During the assessment proceedings, the Assessing Officer noticed that the assessee company had received advances of Rs. 6,32,72,265/- by way of book entry from a company, JGPL and the share holders having substantial interest in the assessee company also had 10 per cent of the voting power in JGPL. The Assessing Officer was of the view that as the two Guptas were members holding substantial interest in JGPL which had provided loans and advances to the assessee company and these very persons had substantial interest in the assessee company, for the purpose of section 2(22)(e) of the Act the amount received by the assessee from JGPL which constituted "advances and loans" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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