TMI Blog2003 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was justified in making the disallowances under the head 'Additions' under section 40A(3) of the Income-tax Act when, on the facts and circumstances of the case, it would be evident and clear that the appellant-firm in view of the unavoidable and explainable circumstances had to make the aforesaid cash payments. - The appeal is partly allowed - - - - - Dated:- 7-5-2003 - Judge(s) : P. P. NAOLEKAR., A. H. SAIKIA. JUDGMENT The judgment of the court was delivered by P.P. NAOLEKAR C.J.-Heard Mr. G.N. Sahewalla, learned counsel for the appellant, and Mr. U. Bhuyan, learned standing counsel for the income-tax. The appeal is admitted on the following questions of law: "(1) Whether, on the facts and circumstances of the case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative Society Ltd., which was engaged in implementation of the said housing complex for residential and commercial purposes. Under the agreement, the appellant-firm agreed to provide a plot of land measuring 17 bighas, O katha, 14 lechas or say 2,44,816 sq. ft. and to build thereon in the form of buildings/flats/structures, etc. The structures required to be constructed on the area measuring 3,16,710 sq. ft. for a composite consideration of Rs. 7,07,67,001 only including the cost of the land. Under the contract, the project was required to be completed within a period of 3 (three) years from the date of agreement. The appellent-company further entered into an agreement dated August 20, 1988, with Assam Vegetable and Oil Products Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement entered into on August 20, 1988, that these payments have been made by account payee cheque, that it is not disputed that the said consultancy and service charges have been paid for rendering services for construction and supervising works of the housing society. The Tribunal has arrived at the finding that the payment of inflated charges were made only on the basis that the directors of the consultancy firm are closely related with the partners of the assessee-firm. In our considered view the reasoning adopted by the Tribunal for disallowing the part of consultancy charges is not based on business practice or on the basis of any material placed on record. The findings arrived at by the Tribunal on the consultancy charges a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sultancy company. The findings arrived at by the Tribunal in that regard are set aside and we accept the findings recorded by the Income-tax Appellate Tribunal and in consequence thereof, we hold that the assessee/appellant is entitled for a deduction of an amount of Rs. 4,70,518 which has been paid by it as consultancy charge. On the other issue which relates to the amount spent for purchase of land and development charge of Rs. 4,18,000, the assessee claimed that under the agreement he was required to construct a school building and also to develop the children's park for the residents of the housing society and for that he has purchased the land and paid the sale price and also spent an amount for development. It was found by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of relevant facts and circumstances reached the conclusion that the payments by way of cash has not been proved by the assessee. Whether the cash payment is made by the assessee to three parties is a question of fact and thus this court does not have jurisdiction to interfere with the pure question of fact. Learned counsel for the appellant is unable to show us any circumstance on the basis of which we can arrive at a conclusion that the findings arrived at by the Assessing Officer or the Tribunal are perverse. The Tribunal has rightly disallowed the claim of the assessee for Rs. 93,213. For the aforesaid reasons, the appeal is partly allowed as indicated above and the appellant/assessee is entitled for deduction of an amount of Rs. 4,70, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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