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2020 (7) TMI 47 - AT - Income TaxAddition on account of additional payments - HELD THAT - In the case of the assessee such payment was found to be of ₹ 6529376/-. As the identical additions have been made in the hands of the all other group concern the AO also made the above additions in the hands of the assessee. The matter reached before the ld CIT (A) wherein addition was deleted and addition as confirmed. Identical issue arose and in assessee s own case for Assessment Year 2010-11, wherein, the coordinate bench deleted addition. The coordinate bench in that year dealt with the above issue as per para No. 8 of that order. The coordinate bench followed the decision of the Hon'ble Delhi High Court in case of Vasundhara Promoters Ltd 2018 (6) TMI 74 - DELHI HIGH COURT That being a binding judicial precedent, respectfully following the decision of the coordinate bench in assessee s own case, we direct the ld AO to delete the addition on account of additional payment to the farmers/ land vendors. Accordingly, ground of the appeal of the assessee is allowed. Disallowance u/s 40A(3) - Cash payment made by the assessee for purchase of land disallowed - HELD THAT - With respect to cash payment made by the assessee for purchase of land disallowed by the ld AO. The above issue is squarely covered in favour of the assessee by the decision of the coordinate bench in Westland Developers Pvt. Ltd 2014 (12) TMI 254 - ITAT DELHI The deletion of the addition is for the reason that assessee has neither debited the above sum in the profit and loss account and nor claimed in deduction of the above amount. Therefore, the coordinate bench have held that provision of section 40A(3) cannot apply in the above circumstances. In view of overwhelming judicial precedents in favour of the assessee deleting the above addition, respectfully following the same we direct the ld AO to delete the addition/ disallowance u/s 40A(3). Unexplained interest expenditure paid to the various vendors of the land through post dated cheque were issued - HELD THAT - The assessee did not justify the above additional payment, hence, same were added. Against these two additions the assessee preferred appeal before the ld CIT(A). The ld CIT(A) upheld the addition on account of interest however, directed the ld AO to re-compute the interest on post dated cheque after 6 months from the date of issue of post dated cheques. Therefore, according to him no interest is chargeable for the first six months from the date of PDC. Assessment u/s 153C - HELD THAT - Admittedly, no notice u/s 153C was issued for Assessment Year 2009-10 and assessment was concluded on 15.12.2011 u/s 143(3). In case of Shri Jasjit Singh 2015 (8) TMI 982 - DELHI HIGH COURT the revenue challenged the order of the coordinate bench dated 05.11.2014 wherein, it was held that in case of the assessee the date of receipt of the seized material would be the date of search and six year period would be reckoned from that date. The coordinate bench in that case quashed the assessment framed u/s 143(3) of the Act for Assessment Year 2009-10 where the satisfaction note was recorded and material belonging to the assessee was received on 16.06.2009. The Hon'ble Delhi High Court on appeal upheld the order of the coordinate bench quashing the assessment. In the present case also identical facts are on record. The satisfaction was recorded on 19.08.2009 and assessment for Assessment Year 2009-10 is passed u/s 143(3) of the Act. Therefore, respectfully following the decision of the Hon'ble Delhi High Court for CIT Vs. Jasjit Singh 2015 (8) TMI 982 - DELHI HIGH COURT we quashed the order passed by the ld AO u/s 143(3) of the Act for impugned assessment order. In view of this, additional ground raised by the assessee is allowed.
Issues Involved:
1. Validity of assumption of jurisdiction by the Assessing Officer (AO) under section 153C of the Income Tax Act. 2. Justification of disallowance under section 40A(3) for expenses not claimed by the appellant. 3. Addition on account of unrealized rent. 4. Disallowance of additional payments to land vendors. 5. Validity of assessment orders passed under section 143(3) instead of section 153C for AY 2009-10 and AY 2008-09. Issue-wise Detailed Analysis: 1. Validity of assumption of jurisdiction by the AO under section 153C: The appellant contested the jurisdiction of the AO for making assessments under section 153C, arguing that the assumption of jurisdiction was bad in law and void ab-initio. The Tribunal noted that for AY 2005-06, the assessment was concluded and any addition required incriminating material found during the search. The Tribunal found no such material for AY 2005-06 and allowed the appellant's grounds, deleting the additions made by the AO and confirmed by the CIT(A). 2. Justification of disallowance under section 40A(3): For AY 2005-06 and AY 2006-07, the appellant argued that disallowances under section 40A(3) were made without any reference to incriminating material found during the search. The Tribunal agreed with the appellant, noting that the disallowances were not justified as no deduction was claimed by the appellant. The Tribunal allowed the appellant's grounds and deleted the disallowances. 3. Addition on account of unrealized rent: For AY 2005-06, the appellant contested the addition of ?16,500 on account of unrealized rent. The Tribunal found no reference to any incriminating material justifying this addition and allowed the appellant's ground, deleting the addition. 4. Disallowance of additional payments to land vendors: For AY 2006-07 and AY 2009-10, the appellant contested the disallowance of additional payments made to land vendors. The Tribunal noted that similar issues were decided in favor of the appellant in previous years and by the Hon'ble Delhi High Court in the case of Vasundhara Promoters Ltd. The Tribunal followed these precedents and directed the AO to delete the disallowances. 5. Validity of assessment orders passed under section 143(3) instead of section 153C: For AY 2009-10 and AY 2008-09, the appellant raised additional grounds challenging the validity of assessment orders passed under section 143(3) instead of section 153C. The Tribunal admitted these additional grounds, noting that they were purely legal and went to the root of the matter. The Tribunal found that the assessments should have been made under section 153C, as the additions were based on seized material. Citing the Hon'ble Delhi High Court's decisions in CIT vs. Jasjit Singh and Pr. CIT vs. Bhupinder Pal Singh Sarna, the Tribunal quashed the assessment orders for AY 2009-10 and AY 2008-09. Conclusion: The Tribunal allowed the appellant's appeals for AY 2005-06, AY 2006-07, AY 2008-09, and AY 2009-10, deleting the disallowances and additions made by the AO and confirmed by the CIT(A). The Tribunal quashed the assessment orders for AY 2009-10 and AY 2008-09, holding that they should have been made under section 153C. The Tribunal dismissed the revenue's appeal for AY 2008-09.
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