TMI Blog2017 (11) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... d, then the question of any disallowance would not arise. If the deduction is claimed, then the Assessing Officer would work out the disallowance as directed by the CIT(A). Disallowance u/s 40(A)(3) - Held that:- As perused the orders in the group company’s cases and it is held in both M/s IAG Promoters and Developers Pvt. Ltd. and Westland Developers P. Ltd. that when the payments are not claimed as expense no disallowance arises. We, therefore, hold that disallowance u/s 40(A)(3) is not sustainable and the same has to be deleted. - ITA No.-1679/Del/2013 And ITA No.-1767/Del/2013 - - - Dated:- 21-11-2017 - SHRI G.D. AGRAWAL, HON BLE PRESIDENT AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER For The Assessee : Sh. V.S. Rastogi Sh. Aja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsion period was logical. Ld. CIT (A), therefore, directed the AO to re-compute the interest on PDC either on the sale consideration or additional payment to the extent of extended period of PDCs by the AO and in case the working out of the same is not possible, to re-compute the interest on PDCs after six months from the date of issue of PDCs i.e. date of sale, as six months is taken as reasonable period for giving PDC as per sale deed. In respect of the additional payment of ₹ 97,45,249/- Ld. CIT (A) directed the deletion of ₹ 97,27,124/- on the ground that such payments were made to the owners of the land or their immediate family members who have got some legal claim over such land, on account of enhanced rate of land at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bench of this Tribunal in ITA No. 1674/Del/2013 examined the issue at length and reached a conclusion that the directions given by the Ld. CIT (A) to recalculate the interest on PDCs was on a sound logic and was upheld. The observations of the Tribunal, vide paragraph no. 5 are as follows: After examining the loose papers seized at the time of search at the assessee's premises, it was noticed that interest is paid on the PDCs only during the period of extension of PDCs and, therefore, he directed the Assessing Officer to recomputed 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the legal principle is concerned, we agree with the legal proposition made by the learned counsel that when no expenditure is claimed by the assessee, the question of disallowing the same by the Assessing Officer does not arise. It was explained by the learned counsel that the assessee was purchasing the land for and on behalf of another company of BPTP Group viz., M/s Countrywide Promoters Pvt.Ltd. and whatever payment is made by the assessee to land owners or their relatives for purchase of land was debited by the assessee to the account of CWPPL and the payment for purchase of land whether as per stamp duty or additional payment has not been claimed as an expenditure by the assessee. We find that on this factual aspect, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not arise. If the deduction is claimed, then the Assessing Officer would work out the disallowance as directed by the CIT(A). 8. Now coming to the disallowance u/s 40(A)(3), similar pleas taken by the assessee to the effect that when no payments were claimed as expense the question of deduction does not arise and in the case of a group company namely Westland Developers P. Ltd. vs. ACIT, I.T.A .No. 1752/Del/2013 (Assessment Year-2006-07) a coordinate bench of this Tribunal held as follows: 10. 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 reimbursem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romoters and Developers Pvt. Ltd. and Westland Developers P. Ltd. that when the payments are not claimed as expense no disallowance arises. We, therefore, hold that disallowance u/s 40(A)(3) is not sustainable and the same has to be deleted. We direct the AO to do so. Grounds of appeal on this aspect are answered accordingly. 10. In view of our findings in the preceding paragraph, the findings of the Ld. CIT (A) in respect of the interest on the PDCs is upheld, the matter relating to the additional payments is restored to the file of the AO for re-computation as directed above and the disallowance u/s 40(A)(3) is directed to be deleted. 11. In the result, the appeals of the both Revenue Assessee are allowed in part for statistical p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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