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2015 (9) TMI 840 - ITAT DELHI

2015 (9) TMI 840 - ITAT DELHI - TMI - Addition made on account of interest on Post Dated Cheques (PDCs) - Held that:- As decided in the case of ACIT Vs M/s IAG Promoters and Developers Pvt. Ltd. [2014 (12) TMI 216 - ITAT DELHI] CIT(A) was rightly of the view that there is no evidence which proves that interest is paid from the date of sale to date of encashment of postdated cheques - where ever the date of PDCs are extended interest is paid @ 15% per annum in cash out of books of accounts which .....

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to re-compute the interest on PDCs at the time of extension of the PDCs - if it is not possible to work out the extension of PDCs in each case, then the AO is directed to recomputed interest on PDCs after six months from the date of issue of the PDCs the order of the CIT(A) is upheld Decided against revenue.

Disallowance on account of additional payments for the purchase of land - Held that:- As decided in the case of M/s Westland Developers Pvt. Ltd. Vs ACIT [2014 (12) TMI 254 - .....

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een the parties as to what is the true nature and effect of the terms embodied in an agreement between the parties - the assessee claimed relying upon the agreement entered that the assessee had acquired various lands through farmers/villagers and after acquiring the same handed over to the developer for development of an integrated township project and in terms of the collaboration agreement the assessee received a consolidated fee - relying upon Commissioner Of Income-Tax Versus Industrial Eng .....

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eated by the Legislature. - the definition of shareholder is not enlarged by any fiction - The assessee who was recipient of the amount was not the shareholder in the payer company and therefore, provisions of Section 2(22)(e) of the Act were not applicable. - Even the money which was paid was not in the nature of loan or advance simplicitor, but the amounts were advanced for business transaction. The expression "shareholder being a person who is the beneficial owner of shares" referred to in th .....

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3,ITA No. 1252/Del/2013 ITA No. 1734/Del/2013, ITA No. 1367/Del/2013, ITA No. 1753/Del/2013, ITA No. 1754/Del/2013, ITA No. 1529/Del/2013, ITA No. 1670/Del/2013, ITA No. 1759/Del/2013, ITA No. 1534/Del/2013 - Dated:- 14-9-2015 - Sh. N. K. Saini, AM And Sh. Kuldip Singh, JM, JJ. For the Petitioner : Sh. Ajay Bhagwani, CA For the Respondent : Sh. Sujit Kumar, Sr. DR ORDER Per Bench These cross appeals are directed against the separate orders of the ld. CIT(A)-XXXIII, New Delhi as per following det .....

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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 withou .....

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the appellant based on such seized material. 3. That on the facts and circumstances of the case and in law the CIT(A) erred in holding to quote, that seized documents definitely proves that interest is paid on PDC despitei) that the seized record on the basis of which above finding was given, even according to his own finding by the CIT(A), did not belong to the appellant and, ii) that, no enquiries were made from any of the alleged recipients of the interest and none was confronted with relevan .....

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l Payments made to the recipients who were not the owners of land and to the payment made in cash. 4.2 That without prejudice the CIT(A) erred in not himself quantifying the addition to be made. 5. That the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXXIII, New Delhi are bad in law and void ab-initio. 6. The appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal. 4. In the departmen .....

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Act, 1961 on account of additional payment in violation of Stamp Duty Act, 1899. 3. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 4. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 5. Ground Nos. 1, 2, 2.1, 5 & 6 of the assessee s appeal were not pressed, therefore, these grounds are dismissed as not pressed. 6. Vide Ground Nos. 3 & 3.1 of the assessee s appeal and .....

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ieved 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 i .....

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noticed that an identical issue having similar facts has already been adjudicated by the ITAT Delhi Bench C , New Delhi in the case of ACIT Vs M/s IAG Promoters and Developers Pvt. Ltd. (supra) wherein vide order dated 31.10.2014, the relevant findings are given in para 5 which read as under: 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 learned CIT(A) has not deleted the ad .....

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ted 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 Assessing Officer 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 Assessing Officer on account of interest on PDCs is factually incorrect and contrary to the order .....

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moters and Developers Pvt. Ltd. So, respectfully following the aforesaid 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 la .....

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n 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 assessee to the seller of the land mainly on account of enhanced rate of land at the time of realization of PDCs and the said payment made to the owner of the land by way of account payee cheque was allowable as an expense u/s 37 of t .....

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s ACIT wherein the issue has been decided vide para 13 of the order dated 22.08.2014. The said contention of the ld. Counsel for the assessee was not controverted by the ld. DR. 17. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts has already been adjudicated in the aforesaid referred to case of M/s Westland Developers Pvt. Ltd. vide order dated 22.08.2014 in ITA No. .....

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not arise. On this fact there is no dispute as admittedly the expenditure was not claimed as an expense by the assessee 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 .....

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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. .....

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ditions made. In the afore-mentioned peculiar facts and circumstances taking cognizance of the fact that in the facts of the present case the CIT(A) makes a reference to facts not borne out from the record namely recording of statement of some patwari and Chotu Ram the support drawn by the CIT(A) in sustaining the addition is found to be misplaced. However since the specific additions under challenge have been addressed on facts and the legal position thereon Ground No-2 in terms of the above ob .....

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y ground raised relates to the deletion of addition of ₹ 14,32,980/- made by the AO on account of interest on PDCs. A similar issue was involved in ITA No. 1252/Del/2013 in the departmental appeal in the case of M/s Sunaina Tower Pvt. Ltd. (supra), therefore, our findings given in the former part of this order shall apply mutatis mutandis. In that view of the matter, we do not see any merit in this appeal of the department. 20. In the assessee s appeal in ITA No. 1734/Del/2013 for the asse .....

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ase of M/s Westland Developers Pvt. Ltd. (a group company) in ITA No. 1752/Del/2013 for the assessment year 2006-07 and relevant findings have been given in para 10.10 of the said order dated 22.08.2014. The aforesaid contention of the ld. Counsel for the assessee was not controverted 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 .....

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xpenses 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 applicability to the facts of th .....

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mstances of the case and the judgments 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 relatable to the addition has been claimed and the assessee has successfully demonstrated that the payment were re-imbursement made by CWPPL. Accordingly Ground No-4 is allowed. 22. So, respectfully following the aforesaid referred to order, the p .....

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partmental appeal in ITA No. 1252/Del/2013 in the case of ACIT Vs Sunaina Tower Pvt. Ltd. in the former part of this order. Therefore, our findings given therein shall apply mutatis mutandis for this assessee also. In that view of the matter, we do not see any merit in this appeal of the department. 24. In the assessee s appeal in ITA No. 1753/Del/2013, Ground Nos. 1, 2, 5 and 6 were not pressed, therefore, those grounds are dismissed as not pressed. 25. Vide Ground Nos. 3 to 3.2 the grievance o .....

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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 .....

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n therein in the former part of this order shall apply mutatis mutandis. Accordingly, the ground raised by the assessee i.e. 3 & 3.1 are allowed while Ground No. 1 of the departmental appeal is dismissed. 30. The another issue agitated by the department vide Ground No. 2 relates to the deletion of addition of ₹ 7,63,025/- made by the AO u/s 2(22)(e) of the Act. The said addition was deleted by the ld. CIT(A) by following judgment of the Hon ble Jurisdictional High Court in the case of .....

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issions of both the parties and the material on record, it is noticed that an identical issue having similar facts has been adjudicated by the ITAT Delhi Bench C , New Delhi in the case of ACIT Vs ISG Estate Pvt. Ltd. wherein on a similar issue relevant findings have been given in paras 21 & 22 of the order dated 23.01.2015 which read as under: 21. We have heard the both parties and perused the relevant record available with us specially the impugned order passed by the Revenue Authorities; .....

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following conditions are to be satisfied : (i) the payer company must be a closely held company; (ii) it applies to any sum paid by way of loan or advance during the year to the following persons : (a) a shareholder holding at least 10 of the voting power in the payer company; (b) a company in which such share holder has at least 20 per cent of the voting power; (c) a concern (other than company) in which such share holder has at least 20 per cent interest; (iii) the payer company has accumulate .....

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e High Court. During the assessment proceedings, the Assessing Officer noticed that the assessee company had received advances of ₹ 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 .....

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n deleting the addition of ₹ 6,32,72,265/- made by the Assessing Officer in the hands of the assessee company under section 2(22)(e). 22. Keeping in view the aforesaid decision of the Hon ble Delhi High Court, we find considerable cogency in the contention of the Ld. Counsel of the assessee that the issue in dispute in the present case has been squarely covered in favor of the assessee by the decision of the Hon ble Delhi High Court in CIT vs. Ankitech P Ltd. (Supra). Respectfully followin .....

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