TaxTMI 
TaxTMI 
2016 (8) TMI 315
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....s made by both the lower authorities. We proceed further and find that the assessee's second appeal challenges section 271(1)(c) penalty of Rs. 7,13,790/- imposed by both the lower authorities corresponding to above stated quantum disallowance of Rs. 20 lacs 3. We come to quantum appeal first. The assessee had acquired land measuring 10.85 hectares at village Kala for Rs. 98,15,000/-. He debited these sums in P & L account as direct expenditure thereby treating the land in question as stock in trade. The Assessing Officer noticed the expenditure in question 1.5 lacs as paid to the vendor Shri B. Kurtutia through FDR on 30-12-2008. The assessee had debited a sum of Rs. 20 lacs for RRC house construction, borewell and fencing etc. through journal entry dated 15-11-2008 and claimed the same as land development expenses. The Assessing Officer invoked section 40A(3) of the act to disallow the entire sum of Rs. 21,50,000/- in assessment order dated 28-12-2011. 4. It further transpires from the case file that the Assessing Officer thereafter sought to verify the land development expenditure in question. He found the same to have remained outstanding as on 31-03-2009. The assessee's alle....
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.... deed is mentioned at Rs. 98.15 lacs whereas, the appellant has claimed that it has paid Rs. 1.50 lacs in addition to the sale consideration of Rs. 97.65 lacs which is factually wrong claim on the basis of order of the collector and the registered sale deed. The appellant has put Rs. 50,000 in FDR in the name of Shri Budhia Kurkutia by issuing cheque no. 003411 dt. 29-12-2008 on IDBI Bank against which the bank has issued an FDR in favour of Shri Budhia Kurkutia. Another cheque No. 003410 for Rs. 1.00 lac was issued by the appellant on 29-12- 2008 for issuing an FDR in favour of Shri Budhia Kurkutia on behalf of the seller. In view of these facts, it is held that the Assessing Officer was not justified in making disallowance of Rs. 1.50 lacs u/s. 40A[3]. However, as it is clear from the above mentioned facts that appellant was not required to make payment of Rs. 1,00 lac for issuing FDR of Rs. 1.00 lacs on behalf of the seller. The additional cheque of Rs. 1.00 lacs was issued for making FDR in the name of seller, was against the purchase consideration of Rs. 97.65 lacs. This expenditure of Rs. 1.00 lac was debited in land cost by the assessee which was actually not in the nature o....
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.... U.T. of D&NH sold his land bearing S. No. 41/2/4 admeasuring 4 hectares and land bearing S. No. 41/2/5 admeasuring 6.85 hectares [total land 10.85 hectares] for Rs. 97.65 lacs i.e. at the rate of Rs. 9000 per Aare. In addition to this price, the appellant paid Rs. 50,000 to the purchaser in the form of FOR making total sale consideration of Rs. 98.15 lacs. As per page no. 7 of the registered sale deed, the title of the said agricultural land with all rights and the possession of the said land was handed over to the purchaser on the date of registered sale document. As per receipt enclosed with the sale deed, total payment of Rs. 98.15 lacs was made to the seller Shri Budhia Kurkutia from 5-1-2008 to 29-12-2008. As per the permission order by the collector dt. 23-12-2008, the sale consideration of the land was settled @ Rs. 3.60 lacs per acre i.e. Rs. 9000 per Aare, which was existing circle rate of agricultural land, situated at village Kala. This permission was given by the collector for sale of agricultural land from tribal person to non tribal person. Similarly, as per sale deed dt 30-12-2008, Shri A. F. Chauhan, the appellant sold his land bearing S. No. 63 admeasuring 8 hecta....
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....ellant, it is clear that as on 31-3-2009, 31-3-2010 and 31-3-2011, Rs. 20 lacs was outstanding. The payment of Rs. 20 lacs is claimed to have been made on 14-5-2012 and 15-5-2012 leaving the debit balance of Rs. 1.15 lacs in the account of Shri Budhia Kurkutia. Even during the appellate proceedings no details of expenditure incurred for the agricultural land sold by the appellant was filed. It is clearly mentioned in the registered sale deed of land bearing S. No. 41/2/5 that the title with all the rights and possession of land was handed over to the purchaser. Similarly, possession of the land bearing S. no. 63 sold by the appellant was also handed over to the purchaser Shri Budhia Kurkutia on the date of registered sale deed dt 29-12-2008 and 30-12-2008. No payment against sale consideration of land was outstanding in case of both the sale transaction of land. In the registered sale documents, no where any condition for incurring any expenditure on account of land leveling, fencing, compound wall, and to make useful for agricultural purpose is mentioned. The MOU is written only on a stamp paper of Rs. 10 and the same is not registered document and even not a notarized document. O....
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....laimed on the basis of the alleged MOU. Hence, the addition of Rs. 20 lacs made by the Assessing Officer on account of disallowance of alleged expenditure being unverifiable, unconfirmed and unsubstantiated is hereby confirmed and the related Ground of Appeal is dismissed." 7. We have heard both the parties and perused the case file. Relevant facts narrated hereinabove qua the two issues in question are not repeated for the sake of brevity. We find that the ld. CIT(A) has deleted disallowance of Rs. 21.50 lacs as made by the Assessing Officer u/s. 40A(3) of the act by concluding that the same does not apply. He holds that the assessee has made FDR payment of Rs. 1 lacs over and above that agreed with the vendor and the same is not allowable as business expenditure. We find that the CIT(A) takes note of the case that the assessee has made payments of Rs. 20 lacs on 14-05-2012 and 15-05-2012 to Shri Kurkutia as land development expenses. He also placed on record relevant ledger account to prove that the same are paid through banking channel. This prima-facie rebuts case of the lower authorities that there was no land development agreement between assessee and his payees. We further....