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TMI Blog2020 (10) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws etc on his record 3. The learned CIT Appeal erred in law and on facts by confirming A.O.'s disallowance / addition of Rs. 1,00,000/- for disallowance of expenses paid to Mr. Netaji Surya leveling stating ground was not pressed in spite of the detailed submission with Bill etc on his record .. 4. The learned CIT Appeal erred in law and on facts in confirming addition disallowance / addition of Rs. 27,01,649/ out of Rs. 42,42,182/- for disallowance of expenses made by A.O, paid to various parties towards compound wall, land development expenses and evacuation payment made user of land, in spite of all credible details on his record and also without rejection of same and also by jumbling of figures in his order beyond understanding. 5) The Learned CIT-Appeal has erred in law and on facts by not considering that expenses were incurred wholly and exclusively for the purpose of business, and also decision of jurisdiction IT AT and Supreme court, while sustaining disallowance for commission expenses, leveling charges and compound wall expenses etc. 6) The learned CIT - Appeal erred in law by passing order without giving reasoning / finding in his order, for not consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee resorted to directly reduce the value of the sale consideration by the said amount and did not pass the commission expenditure through the Profit and Loss account. In Audit Report also, the same has not been reported by the auditor in the column where the payments made to the relatives were reported. It was further noted that assessee had shown sales of some other plots of the land to the same party i.e., M/s. Mahalaxmi Builders, without paying any commission to any other party, including Mrs. Farzana Khan. That further as apparent at Para 6.5 of the learned Commissioner of Income Tax (Appeals)'s order vide order sheet note dated 30.03.2016, the learned Authorised Representative of the assessee has informed the learned Commissioner of Income Tax (Appeals) that the assessee is not interested in pursuing this ground of appeal and accordingly, the disallowance of Rs. 6,30,000/- made by the learned Assessing Officer on account of unexplained payment of commission was upheld. 5. At the time of hearing before us, the learned Authorised Representative only reiterated the submissions made before the Subordinate Authorities without filing any credible documents / evidences to justify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that the land which was purchased in 2009-10 and sold in 2011- 12, the appellant has never incurred any such expenditure till 31.03.2011. It is surprise to note that the appellant resorted to incur expenditure in the month of April, just before sale of land on 28.04.2011, i.e. between 01.04.2011 to 28.04.2011. In view of these facts, and in the absence of valid explanation along with credible documents, vide order sheet noting dated 30.03.2016, the Ld AR informed that the appellant is not interesting in pursuing this ground of appeal. Accordingly, disallowance of Rs. 1,00,000/-, made by the AO, on account of unexplained expenditure on leveling of land, is hereby sustained and this ground of appeal is dismissed." 8. Regarding the other disallowance of Rs. 42,42,182/- on account of unexplained expenditure incurred against sales of plots of land, learned Commissioner of Income Tax (Appeals) held as follows : "8.5. I have carefully considered the facts of the case, findings of the AO in the assessment order, submission of the Ld AR and material placed on record. In view of the above facts, during the course of appellate proceedings, the Ld AR was requested to produce the. partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m, the copies of ledger accounts, building accounts, along with P&L account were called for and examined. On verification of ledger account of parties, to whom the above payments were made, it is seen that the payment details are duly reflected along with receipt of material on various dates. In view of these facts, the claim of the appellant cannot be denied in toto. Accordingly, the P&L Account of the appellant was examined and found the following entries: Particulars Amount Particulars Amount To Cost incurred on project 56425524.24 By WIP of Project at yr end 57966057.24 To cost of land 21723188.00 By Sale of land 30875000.00 To profit trsf to partner A/c as under Arvind L. Patil 2138469.00 Aarti Dinesh Nayak 1099234.50 Iqbal Khan 3207703.50 Farhaan Khan 2138469.00 Nomaan Khan 2138469.00 10692345.00 . 88841057.24 88841057.24 8.8 From the above details, it is seen that the appellant, in addition to sale of plots of land, it had also shown work in progress amounting to Rs. 5,79,66,0571- and cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 14,00,000/- i.e. payments to tenants, as discussed above, and unsubstantiated expenditure of Rs. 13,01,649/-, is hereby, sustained. This ground of appeal is partly allowed." 9. We are in conformity with the findings of learned Commissioner of Income Tax (Appeals) that since the assessee has already offered the profit of Rs. 15,40,533/- i.e., difference between Work in Progress (WIP) and cost of project for tax, therefore, the disallowance to that extent was correctly deleted. We also find that the learned Authorised Representative of the assessee could not produce the tenants namely, Maruti Narayan Patil to whom an amount of Rs. 13 lakh was paid and Shri Sudhakar Patil to whom Rs. 1 lakh was paid, totaling to Rs. 14 lakhs, for removing the encroachment. The assessee failed to substantiate the basis of such payments. The assessee also failed to prove through the return of income reflecting the above payments. Therefore, the disallowance of Rs. 14 lakhs i.e., payment to tenants is hereby upheld. 10. With regard to the other un-substantiated expenses of Rs. 13,01,649/-, the learned Authorised Representative prayed that this amount as the WIP. Since the learned Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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