TMI Blog2018 (6) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Appellate Commissioner - no scope for the Revisional Commissioner to exercise jurisdiction under Section 263 also had no justification to add cost price in a sum of ₹ 2,71,13,658/- stating that it pertained to sales made for the subsequent year. Assessee submitted full details regarding payment of commission and also proper TDS has been deducted on the said expenses - thus it was not open for the revisional authority u/s 263 to interfere with the same only because another view was possible as followed in the case of THE COMMISSIONER OF INCOME TAX VERSUS SHRI NIRAV MODI [2016 (6) TMI 1004 - BOMBAY HIGH COURT] - Decided in favor of assessee. - Decided in favor of assessee. - I.T.A.No.604/2017 c/w I.T.A.No.605/2017 - - - Dated:- 29-5-2018 - B. S. Patil And S. Sunil Dutt Yadav, JJ. For the Petitioner : Sri K.V.Aravind, Adv. For the Respondent : Smt.Vani H., Adv. JUDGMENT 1. These appeals are filed under Section 260A of the Income Tax Act, 1961 (for short, the Act ) challenging the orders dated 17.03.2017 passed by the Income Tax Appellate Tribunal, Bengaluru, in ITA No.613/Bang/2014 and ITA No.614/Bang/2014, thereby allowing the appeals file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the subsequent sale made in favour of Brigade Enterprises did not tally in respect of both the assessment orders, and therefore, directed re- consideration of the entire materials. The Revisional Commissioner further found that the development expenses consisting of labour charges, work in progress, had to be added for the assessment year 2008-09. Similarly, in respect of payment towards commission, the Revisional Commissioner found that the cheque payments and TDS made for claiming expenditure had to be verified. Thus, he ordered for making addition in respect of both the assessment years vide his order dated 20.03.2013. 6. Aggrieved by the said order passed in the revisions, the assessee preferred appeals to the Income Tax Appellate Tribunal, Bengaluru. Both the appeals were clubbed and heard together. By a common order dated 17.03.2017, the Tribunal has set aside the order passed by the Revisional Commissioner, thereby allowing the appeals of the assessee. It is this common order passed by the Tribunal is assailed by the Revenue by filing these two appeals in respect of the two assessment years by raising the following substantial question of law. whether, on the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years in question, the same did not tally, and therefore, the Revisional Commissioner was justified in exercising revisional jurisdiction; (3) In respect of the expenses claimed for payment of commission to agents for purchase and sale of lands, Revenue contends that as rightly held by the Revisional Authority, the address furnished, details of payments made by way of cheques, TDS deduction of agents were not sufficient to identify the sellers and purchasers to establish the actual service rendered. Thus, the Revenue has contended that Commissioner was right and justified in exercising revisional jurisdiction in holding that the expenses incurred under different categories deserved to be disallowed. 9. Learned Counsel appearing for the respondent- assessee has contended that as regards point no.(1) pertaining to development expenses, both the Assessing Officer as well as the Appellate Commissioner did consider the entire matter and for the assessment year 2008-09, disallowed a sum of ₹ 50 lakhs and as regards the assessment year 2009-10, disallowed ₹ 2 Crores, and therefore, the assessment order passed merged with the appellate order; hence, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the assessee to furnish the details. In reply, assessee furnished names and addresses of parties to whom the amount had been paid along with PAN numbers, bills and vouchers. Considering the details furnished in support of the development expenses for the assessment year 2008-09, the Assessing Officer concluded as under which is evident from paragraph 6.5 of the order passed by the Assessing Officer. The assessee has offered an amount of ₹ 50 lakhs for the assessment year 2008-09 in respect of the development expenses claimed by him for this assessment year and has offered an amount of ₹ 2,00,00,000/- on this account for the assessment year 2009-10. The additional income admitted by the assessee in respect of unsubstantiated development expenses have been accepted after examining the details filed by the assessee and the details available on records. The amount of ₹ 50 lakhs and ₹ 2,00,00,000/- admitted by the assessee for the assessment year 2008- 09 and 2009-10 have been treated as assessee s undisclosed income for the relevant assessment years and brought to tax accordingly. 14. In respect of the assessment year 2009-10, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. in para 6 6.1 wherein they had offered ₹ 50,00,000/- over and above the income declared in the return of income, this addition is confirmed. 16. In so far as the head unexplained investment , the Appellate Commissioner has held as under in paragraph 3.3.6. .. It is fact that the appellant has offered a sum of ₹ 50,00,000/- out of the developmental expenses claimed of ₹ 20,87,92,471/-. The A.O. has categorically stated that no bills and vouchers were produced In view of inability of the appellant to furnish the details of actual expenditure, they have offered a sum of ₹ 50,00,000/- as income since they were not able to substantiated their expenses to the extent of ₹ 20,87,92,471/- In view of inflation of expenses and in view of the assessment proceedings which is over and above the returned income the benefit of this amount shall be given towards investments made during the year . 17. In respect of assessment year 2009-10 also, the Appellate Commissioner considered the question regarding development expenses and has proceeded to confirm the addition made observing as under in paragraph 4.3.3. 4.3.3. The appellant had clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority cannot, by acting under Section 263 of the Act interfere and upset the order passed by the Appellate Commissioner. If the Revenue was aggrieved by the order of the Appellate Commissioner, the only remedy was to file an appeal to the Tribunal or to re-open the assessments. Counsel for the respondent is right and justified in placing reliance on the judgment of this Court in the case of DCIT Vs VARMA INDUSTRIAL LTD. (2001) 250 ITR 472 (KAR) and order dated 17.11.2015 passed in ITA No.699/2009 in the case of SRI SALIL PUNOOSE VS ITO. The law laid down in the aforesaid two judgments applies to the facts of the present case because the Appellate Commissioner has considered the matter while concurring with the order passed by the Assessing Officer, and therefore, the order of the Assessing Officer stood merged with the order of the Appellate Commissioner. In such circumstances, the same question cannot be re-opened by the Revisional Authority exercising power under Section 263 of the Act. 19. As regards the second point urged by the Revenue, regarding expenses of purchase of land and profit from sale of properties to M/s. Brigade Enterprises, it is the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtained to sales made for the subsequent year. He also erred in directing the Assessing Officer to re-examine the purchase price of the lands. 21. As rightly contended by the Counsel for the respondent, the conclusion reached by the Commissioner while exercising revisional jurisdiction tantamounts to directly interfering with the conclusions reached by the Appellate Commissioner. Such power of the revisional authority cannot be conceded to enable him to interfere with the orders passed by the Appellate Commissioner in view of the doctrine of merger. Hence, it has to be held that the Revisional Commissioner acted without jurisdiction in passing the said order. 22. As regards commission expenses:- Similar is the factual matrix involved in respect of commission expenses claimed by the assessee for the two assessment years. Admittedly, during the relevant assessment years, assessee had purchased 63 acres 20 guntas of land in Kaggalipura from various agriculturists under registered sale deeds. The said properties were converted for non- agricultural purpose; residential layout was formed, thereafter these properties were transferred to M/s. Brigade Enterprises by executing registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings recorded in paragraph 11 of the order passed by the Tribunal makes it clear that as regards commission expenses, the Assessing Officer after examining the assessee, had questioned him to state details regarding evidence he had supporting the claim of commission and development expenses and also as to whether TDS had been deducted and remitted by him of the said payments. In response to the same, the assessee had stated that evidence would be placed before the Assessing Officer. As a sequel of the same, the assessee submitted full details regarding payment of commission. After considering the material, the Assessing Officer chose not to make any addition on the item pertaining to commission. Therefore, the Tribunal has rightly found that the items of expenses on which the Revisional Commissioner proposed to revise the assessment having been thoroughly supported by the Assessing Officer, it was not open for the revisional authority to interfere with the same only because another view was possible. The Tribunal has supported its conclusion by referring to the judgment of the Bombay High Court in this regard in the case of CIT vs NIRAV MODI - (2017) 390 ITR 292 (BOM). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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