TMI Blog2020 (7) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ues to be binding. Addition u/s 69B - suppressed purchase consideration of the property - HELD THAT:- Adoption of the purchase consideration of the property in question by the A.O was only on the basis of an unsubstantiated and dumb rough notings on a piece of paper seized during the course of the search proceedings. On a perusal of the aforesaid seized document, we find, that the same only refers to a set of figures which on a standalone basis could not have been adopted as the purchase consideration of the property in question. Apart from that, we find that the support drawn by the A.O from the fact that while framing the assessment in the case of the seller i.e M/s Ganesh Paper Mills an addition of ₹ 1 crore was made in respect of the transaction under consideration looses all the force as the said addition on appeal had already been deleted by the CIT(A)-29, Delhi, vide his order dated 05.02.2016. Lastly, we find that the landed cost (inclusive of stamp duty and other charges) had been recorded by the assessee in its books of accounts at ₹ 14.14 crores i.e an amount in excess of the impugned purchase consideration of ₹ 14.01 crores. Accordingly, we are pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-13 on 30.09.2012, declaring a total income of ₹ 242,60,95,470/-. The return of income was processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) of the Act. 3. In the course of the assessment proceedings the A.O inter alia made the following two additions/disallowances : Sr. No. Particulars Amount 1. Disallowance u/s 36(1)(iii) of interest attributable to the borrowed funds utilised towards capitalised value of work-in-progress. ₹ 94,80,600/- 2. Addition of Unexplained Investment u/s 69B made towards suppressed purchase value of a property. ₹ 1,00,00,000/- After inter alia making the aforesaid addition/disallowance the income of the assessee company was assessed by the A.O at ₹ 246,61,73,540/-, vide his order passed u/s 143(3), dated 23.03.2015. 4. Aggrieved, the assessee inter alia assailed the aforesaid addition/disallowance made by the A.O before the CIT(A). Observing, that the assessee had sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led that the assesee had a capital WIP of ₹ 137.40 crore on 31.03.2012 as regards its new factory at Rabale. It was noticed by the A.O that the assessee in its Profit loss account had claimed interest expenditure of ₹ 15.26 crores on long term/short term borrowings aggregating to ₹ 266.24 crores. Also, it was observed by him that the assessee had self owned funds of ₹ 920.90 crores. It was gathered by the A.O that no part of the interest expenditure was capitalised by the assessee to the capital WIP of its new upcoming factory at Rabale. Observing, that the assessee had both self-owned and interest bearing borrowed funds the A.O held a conviction that interest expenditure pertaining to the capital WIP was required to be capitalised and consequently disallowed the same to the said extent u/s 36(1)(iii) of the Act. In the backdrop of the aforesaid facts, the A.O after considering the availability of both self-owned and interest bearing borrowed funds with the assessee, therein worked out the average rate of interest at 1.38% (15.96 crs/₹ 1152.72 crs X 100). Adopting the average rate of interest of 0.69% on the capital WIP of ₹ 137.40 crore the A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id that the same does not find favour with us. As the operation of the order of the Hon ble High Court in the case of HDFC Bank Ltd. (supra) had not been stayed by the Hon ble Apex Court, therefore, the same holds the ground till date and continues to be binding. Ground of appeal No. (i) is dismissed. 8. We shall now take up the addition of ₹ 1 crore that was made by the A.O u/s 69B of the Act, which however was vacated by the CIT(A). Succinctly stated, the assessee during the year had made an investment towards purchase of land at Ghaziabad for a consideration of ₹ 13.01 crore. On a perusal of the contents of a hand written paper that was seized during the course of search proceedings from the residential premises of the president of the assessee company as Annexure -1 Page 53, it was gathered by the A.O that the assessee had purchased the aforesaid land from M/s Ganesh Paper Mills for a consideration of ₹ 14.01 crores. Also, it was noticed by him that while framing the assessment in the case of the seller i.e M/s Ganesh Paper Mills an addition of ₹ 1 crore was already made in respect of the transaction under consideration. Accordingly, the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, that the same only refers to a set of figures which on a standalone basis could not have been adopted as the purchase consideration of the property in question. Apart from that, we find that the support drawn by the A.O from the fact that while framing the assessment in the case of the seller i.e M/s Ganesh Paper Mills an addition of ₹ 1 crore was made in respect of the transaction under consideration looses all the force as the said addition on appeal had already been deleted by the CIT(A)-29, Delhi, vide his order dated 05.02.2016. Lastly, we find that the landed cost (inclusive of stamp duty and other charges) had been recorded by the assessee in its books of accounts at ₹ 14.14 crores i.e an amount in excess of the impugned purchase consideration of ₹ 14.01 crores. Accordingly, we are persuaded to subscribe to the view taken by the CIT(A) that in the totality of the facts of the case the addition of an amount of ₹ 1 crore made by the A.O towards suppressed purchase consideration of the property in question cannot be sustained and is liable to be vacated. Accordingly, we uphold the view taken by the CIT(A) in context of the issue under consideration. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment‖. In the rule so framed, as a result of these directions, the expression ordinarily‖ has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any extraordinary‖ circumstances. 12. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai F Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. The epidemic situation being grave, there was not much of a relaxation in subsequent lockdo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made time bound by this Court, the period for which the order dated 26th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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