9911796707
TMI Blog2019 (12) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings u/s. 153 A of the Act, it was very well proved that the assessee used to wave part payments of the sale consideration in respect of the land purchased at the time of execution of the sale-deed and the payments of balance sale consideration were invariably made through post dated cheques (PDCs) for the intervening period i.e. period between the date of sale deed and the date of encashment of PDCs interest was paid in cash to the vendors of the land by the vendee company on monthly basis @ 1.25% p.m. on the amount of PDC's and this cash payment of interest by the vendee company was not accounted for by it, in its books of account. The addition on this ground has been made in the several group companies of the BPTP group during the course of earlier assessment proceedings u/s. 143 (3) /148/153A in consequence to search carried out on 15.11.2007. 3. The AO, therefore, asked the assessee to explain as to why additions should not be made on PDC's. Rejecting the various explanations given by the assessee and observing that the assessee was following a business model as part of which only part payments of the sale consideration in respect of lands purchased were paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.11.2007 that BPTP group is engaged in payment of unaccounted interest on post dated cheques given for acquisition of land. I have heard many appeals in BPTP group of cases. On this issue my findings after considering the evidential value of seized documents as a result of search was that the BPTP group of companies are paying unaccounted interest payment on post dated cheques wherever the same get extended for the period of extension & if such period of extension cannot be ascertained then unaccounted interest payment on PDCs should be computed after six month from date of conveyance deed. Such findings in the case M/s Business Park Promoters Pvt. Ltd. being one of BPTP group of companies A.Y. 2006-07 in ITA no 521/09-10/309 dt.24/12/2012 is reproduced as under:- Learned AR has been maintaining all along that interest is not paid as all the receipts are only memorandum only. Analysis of these above seized document reveals that these seized documents definitely proves that interest is paid on PDCs. Various vouchers in seized documents conclusively proves that the recipient has signed on voucher for receipt of the interest. Ld AR's contention that these are only working o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Assessing Officer has applied the case of Eusuf Ali for applying interest on PDCs for all companies of BPTP Group for all Assessment Year under consideration. LdAR has tried to differentiate the above cited case on facts. In my view, as interest payment on extension of period of PDCs are established on numerous seized documents. A trend is established for the group as the overall management is controlled by one person Sh. Kabul Chawla and activities of all companies are interrelated. If it is not possible to work out the extension of PDCs in each case then A.O. is directed to recomputed interest on PDCs after six months from 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. This view is formed on the basis the statement of Sh. Chhotu Ram which says that normally PDCs are given for 8 to 10 months. Further Ld AR has also submitted few Sale Deed in respect of some of Seized record in the case of Ramvati Beero etc where the interest working is made after 9/15 months. Taking these facts into consideration. It would be proper to compute interest after 6 months from date of Sale on conservative side. Accordingly thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in confirming the addition made by the AO. He submitted that the AO in assessee's own case in scrutiny assessment for the A. Y. 2012-13 has passed the order u/s. 143 (3) and has not made any addition on account of interest on PDC's. In that year also the payments to sellers of the land were outstanding in the books of the assessee company. 7. Referring to the decision of Hon'ble Supreme Court in the case of CIT Vs. Excel Industries reported in 358 ITR 295 he submitted that the Hon'ble Supreme Court in the said decision has held that when the revenue itself has accepted the position in favour of the assessee, than the revenue cannot be allowed to flip flop on the issue and it ought laid the matter to rest. He submitted that the AO in the assessment order has made addition with respect to four sale deeds. The first sale deed dated 04.11.2010 relate to assessment year 2011-12 whereas the three remaining sale deeds pertaining to assessment year 2010-11. He submitted that the Ld. CIT(A) has deleted the interest on PDCs in respect of the first sale deed whereas he sustained the interest on PDCs in respect of the remaining three sale deeds which pertain to A.Y.2010-11 and, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order. We find in appeal the Ld. CIT(A) deleted the interest of Rs. 36,87,500/-in respect of one sale deed and sustained the balance amount of Rs. 73,20,188/- in respect of three sale deeds the reasons of which have already been reproduced in the preceding paragraph. It is the argument of the Ld. Counsel for the assessee that the company was incorporated only on 06.07.2009, copy of which is placed at page-150 of the paper book whereas the first search took place on 15.11.2007 and, therefore, when the company was not in existence at the time of first search the AO could not have inferred the modus operandi adopted by the group companies prior to the date of first search. Further during the course of second search nothing was found belonging to the assessee either from its own premises or from the premises of any of its related concerns. It is also his submission that while the CIT(A) deleted the addition in respect of the sale deed related to the impugned assessment year, however, he sustained the addition of interest on PDCs relating to three sale deeds pertaining to the preceding assessment year which is not correct. It is also his argument that in the immediately subsequent ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Id. CIT(A) has given part relief to the said assessee, however, the said decision has not been accepted by the Department and appeal is pending before the Tribunal. We find the Id. CIT(A) following his decision in the case of M/s Business Park Promoters Pvt. Ltd. for assessment year 2006-07 directed the Assessing Officer to compute the interest on the PDCs after a period of six months from the sale deed, as a result of which only an amount of Rs. 2,92,851/- was sustained and the balance amount was deleted. 18..... 19.... 20... Now, coming to the amount sustained by the Id. CIT(A) is concerned, it is a matter of fact that the assessee company was incorporated on 30.12.2009 which is much after the past date of search i.e. 15.11.2007. Similarly, during the course of second search that has taken place on 07.12.2010 and concluded on 05.02.2011, we find none of the documents belong to the assessee or relate to the assessee. Similarly, none of the seized documents also belong to assessment year 2011-12 and no notice u/s 153C has been issued. We, therefore, find merit in the submission of the Id. counsel for the assessee that when the assessee company was not in existence at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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