TMI Blog2022 (2) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... s of account on Post Dated Cheques (PDCs) - HELD THAT:- Undoubtedly, the issue is decided by the coordinate benches in cases of the group concerns COUNTRYWIDE PROMOTERS PVT. LTD. AND VICE - VERSA [ 2021 (5) TMI 897 - ITAT DELHI] where the identical addition made on account of PDCs Interest has been deleted on similar facts. DR was unable to bring on record any fresh evidence or material to show us any valid and justifiable reason to deviate from the earlier orders of the coordinate benches as discussed above. The judicial discipline, rule of consistency and rule of precedence requires that unless those orders on same facts in case of other group companies are upset or facts are different or any fresh material or any evidence is brought on record to deviate from earlier decisions, same should be followed. Therefore respectfully following the decision of the coordinate benches, we direct the learned assessing officer to delete the whole addition on account of PDC Interest . Disallowance of Additional Payment made in view of the provisions of Section 37(1) on the basis of violation of Stamp Duty Act, 1899 - HELD THAT: - Undoubtedly, the issue is decided by the Co-ordinate Benche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 24.09.2019. 4. Ground nos. 1, 2, 2.1, 2.2, 2.3 and 4 are not pressed. The only effective ground remains relates to disallowance u/s 40A(3) of ₹ 5,31,124/- u/s 40A(3). 5. The assessee has purchased land and paid part of amount in cash. The cash paid is recorded in books of accounts of assesseee. The assessee has entered into collaboration agreement with M/s Countrywide Promoters Pvt. Ltd. Pursuant to which assigned development rights in land are assigned by assessee in favour of M/s Countrywide Promoters Pvt. Ltd. The assessee has received reimbursement of cost of land along with some fees for collaboration charges in lieu of assignment of development rights in land assigned to M/s Countrywide Promoters Pvt. Ltd. 6. In respect of cash payments made of ₹ 26,55,623/- for acquiring land, the Assessing Officer invoked provision of Section 40A(3) and disallowed 20 % amounting to ₹ 5,31,124/. 7. Aggrieved the assessee filed appeal before the ld. CIT(A), who confirmed the disallowance. Being aggrieved, the assesse is in appeal before us. 8. During the course of assessment proceedings, the AO noticed that the assessee company has acquired various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision in case of Westland supra 10. We have considered submissions made by the parties and perused the material made available on record. In Westland Developers Pvt. Ltd. (supra) on identical facts it was held in para 10.10 at page 29 of Tribunal order as under: 10.10. Accordingly on a consideration of the peculiar facts and circumstances of the case and the judgments relied upon considering the relevant provision of the Act namely Section 40A(3), we hold for the detailed reasons given hereinabove that Section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatable to the addition has been claimed and the assesse has successfully demonstrated that the payment were reimbursement made by CWPPL. Accordingly Ground No.4 is allowed. 11. The ld. CIT DR heavily relied on the order of AO and CIT(A) and submitted that these may be followed. 12. Heard the arguments of both the parties and perused the material available on record. 13. Undoubtedly, the issue is decided by the coordinate benches in 38 cases of the group concerns where the identical disallowance under section 40 A (3) of the income tax act has been deleted. On perusal of the most of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue) 16. The grounds are as under: 1. On the facts and in the circumstances of the case, CIT(A) has erred in deleting the addition of ₹ 7832133/- out of total addition of ₹ 12533522/- made by the Assessing Officer on account of interest on PDCs paid out of books of account. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 1,40,90,457/- made by the Assessing Officer in view of the provisions of Section 37(1) of the Income Tax Act, 1961 on account of additional payment in violation of Stamp Duty Act, 1899 3. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 4,58,000/- made by the Assessing Officer in view of the provision of Section 2 (22)(e) of the Income Tax Act, 1961 on account of deemed dividend. 17. Ground of Appeal No. 2 3 of the assessee and Ground of No. 1 of Revenue which are on the same issue on account of interest paid in cash outside the books of account on Post Dated Cheques (PDCs). 18. During the course of search on BPTP group on 15. 11.2007, certain documents were found and seized. As per these seized doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e might have also paid interest on post dated cheques given towards purchase of land. This issue is settled by the co- ordinate bench in case of Westland Developers Pvt. Ltd. in ITA no. 1757/Del/2013 vide order dated 23.11.2015 wherein it was held by the Tribunal that in absence of any cogent, definite material which belonged to the assessee or any evidence demonstrating the payment of interest by the assessee on PDCs, reasons recorded for initiation of proceedings u/s 147 were not in consonance with law having been based on mere suppositions, surmises and extrapolation of material seized. The bench completely discarded the argument of AO and Ld. CIT (A) of common management and the assessee belonging to the same group and held that it cannot be equated with existence of incriminating seized material belonging to the assessee. In this case also, there is no seized document found which belongs to the assessee and it is so confirmed by the Ld. CIT (A) also in his order. No statement of any vendors of land is recorded by the AO. Statement of Shri Chottu Ram is referred to although the assessee has denied to have purchased any land from Shri Chottu Ram. The statement of Shri Chottu Ram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of ITAT, the issue of PDC interest as contested in assesse s appeal is also squarely covered in assessee s favour in case of another group company in ACIT vs. M/s Countrywide Promoters Pvt. Ltd. in cross appeals for AY 2007-08 in ITA No. 6343/Del/13 6304/Del/13 dated 04.05.2021 wherein by following the decision of Green Valley Tower (supra) similar addition on account of interest paid on PDCs in cash outside books of account was deleted. 22. The ld. CIT DR heavily relied on the order of AO and submitted that during the course of search lot of seized documents of several other assessee were found and seized which shows payment of interest on PDCs. Accordingly, as this company also belong to same group might have paid interest on PDCs. Accordingly, order of AO may be followed. 23. Heard the arguments of both the parties and perused the material available on record. 24. Undoubtedly, the issue is decided by the coordinate benches in cases of the group concerns where the identical addition made on account of PDCs Interest has been deleted on similar facts. The ld. DR was unable to bring on record any fresh evidence or material to show us any valid and justifiable reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted. 28. The ld. AR submitted that the issue in question is fully covered in favour of the assessee by the order of the Co- ordinate Bench of ITAT in case of Westland Developers Pvt. Ltd in ITA No.1752/Del/2013 vide order dated 22.08.2014 for the AY 2006-07. He further submitted that this order of the Tribunal has been accepted by the Department and no appeal has been filed before the Hon ble High Court. It was also submitted that on identical facts the order of the Westland Developers Pvt. Ltd. (supra) is followed in more than 30 cases of group companies wherein it has been held that there can be no disallowance in respect of additional payment if no deduction was claimed either by debiting to Profit and Loss account or through computation. The assessee submitted compilation of 30 orders passed by various Co-ordinate Benches on identical facts and circumstances in various group companies of BPTP group where addition made on account of disallowance of additional payment made by the assessing officer was deleted following the decision in case of Westland Developers Pvt. Ltd (supra). 29. The ld. AR submitted that similar issue is also decided by Hon ble jurisdictional Delhi Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. The ld. CIT DR could not show us any reason or fresh material that why earlier decisions of the coordinate benches should not be followed. Considering judicial discipline, rule of consistency and rule of precedence which requires that unless those orders are upset or reversed at later stage or something fresh is brought on record which necessitate for different view to be taken however which is not the case, earlier decisions of coordinate benches should be followed. Therefore respectfully following the decision of the coordinate benches and Hon ble Delhi High Court decision on this issue, Ground No. 2 of the Revenue s appeal is dismissed. 33. Ground No. 3 of Revenue appeal in respect of addition of ₹ 4,58,000/- made by the AO on account of deemed dividend under section 2 (22)(e) of the Income Tax Act, 1961 in respect of amounts received by the assessee from some of its group company where Mr. Kabul Chawla held substantial shareholding in assessee as well as payer companies. 34. The ld. AR submitted that the assessee is not a share holder of companies who paid loan/advance to the assessee which is treated as deemed dividend by the AO. As dividend is to be received by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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