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TMI Blog2012 (10) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... ower net consideration after considering the alleged claim of expenses. This situation does not arise in reality and is against the normal human behavior. The assessee did not submit the original invoices of construction alleged to have been done on the property. It had submitted only photo copy of invoices and most of the invoices were in the name of Nahar Theatre Pvt. Ltd. and name of the assessee was written after cutting the name of Nahar Theatre Pvt. Ltd - From the details of invoices as placed it is apparent that major amount was alleged to have been spent between 7.4.2002 to 23.10.2002. Therefore, how it can be claimed that alteration/addition/renovations were done at the direction of ultimate buyer Shri Amit Sibal because agreement to sell could only be entered into with him after termination of first agreement of dated 16.,8.2002 which was said to have been terminated on 24.10.2002. Therefore, it emerges from the above that most of the expenses related to the period before entering into agreement to sell with Shri Amit Sibal which ultimately implies that expenses incurred before agreement with Shri Amit Sibal cannot be said to have been incurred at his behest - against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein it was agreed that M/s Corn Hills Promoters Pvt. Ltd. will reconstruct the entire basement first, second floor and will incur expenses from its own sources. In return the assessee was to retain basement and ground floor whereas the first second floors were to be taken over by the developers. The Assessing Officer further noted that assessee had entered into an agreement to sell with Mrs. Kavita Agarwal for the sale of basement and ground floor for a total consideration of Rs.80 lakhs vide agreement dated 16th August, 2002 and assessee had claimed to have received Rs.25 lakhs from said Smt. Kavita Agarwal but subsequently the transaction could not materialize and the amount was shown to be refunded to Smt. Kavita Agarwal and finally the property was sold to one Mr. Amit Sibal for a total consideration of Rs.1,01,00,000/- vide sale deed executed on 25.3.2003. The Assessing Officer further observed that assessee had debited a sum of Rs.52,60,758/- on construction and improvement of basement and ground floor as per the alleged requirement of buyer Shri Amit Sibal. The assessee claimed that at the direction of buyer Shri Amit Sibal the assessee had to make certain renovations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore Assessing Officer during assessment proceedings whereas Assessing Officer had made a finding that books of accounts were not produced before him. The Assessing Officer was asked to submit his report after verification of genuineness of the expenses claimed and after making necessary enquiries from the relevant parties. The Assessing Officer in his remand report dated 29.8.2007 pointed out that most of the bills submitted by the appellant were originally in the name of M/s Nahar Theatre Pvt. Ltd, New Delhi and name of the assessee was over-written on the bills. He further reported that in order to verify the genuineness of the bills, summons u/s 131 were issued to some of the parties. The Assessing Officer further reported that two out of four parties had stated that they do not have any dealings with the assessee whereas two of the parties submitted that they had dealing with Nahar Theatre Pvt. Ltd. The Assessing Officer further reported that on the copy of the bills, there were stamp of Security Staff of M/s Nahar Theatre Pvt. Ltd. who had put their signatures along with dates of receipt of material which clearly proved that goods were sold to Nahar Theatre Pvt. Ltd. and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that material was initially purchased by them which could not be utilized by them on account of delay in their project and the same was sold to appellant and appellant had made the payment by account payee cheque. The Ld CIT(A) after going through the submissions made by Ld AR of the assessee segregated the amount of bills into two categories i.e. one wherein originally the name of Nahar Theatre was written and the assessee s name was over-written and the one wherein the name of the appellant was written. On that basis, he held that an amount of Rs.23,58,344/- where the name of the assessee was over written deserves to be upheld as disallowance and for the remaining amount of Rs.25,62,414/- the Ld CIT(A) deleted the addition. Similarly, out of total labour charges of Rs.3,40,000/- the Ld CIT(A) allowed the expenditure of Rs.2 lakhs and upheld the addition with respect to remaining amount Rs.1,40,000/-. In nutshell, the Ld CIT(A) upheld the total disallowance to the extent of Rs.24,98,344/-. The revenue in its appeal has taken this amount as Rs.24,48,344/- which seems to be a typing error. 6. In respect of second disallowance, it was submitted before the Ld CIT(A) that fest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is a separate assessee and there is no proof that Nahar Theatre has not claimed such expenses. He further argued that ceiling work is generally done at the completion stage whereas in the present case after invoices of ceiling expenses there were invoices of rori and bricks etc. He further argued that all construction work was done by developer as per agreement with them and assessee was not able to demonstrate as to what particular work it had done. With regard to payment by the assessee from its bank account, the Ld DR submitted that mere production of vouchers and payment through cheques alone canot prove the genuineness of the expenses. Reliance was placed on the following judgments:- 1. Commissioner Of Income Tax. v. Chandravilas Hotel. 164 ITR 102. 2. Lakshmiratan Cotton Mills Company Limited. v. Commissioner Of Income Tax, Uttar Pradesh 73 ITR 634. 3. CIT v. Modi Stone Ltd. 11. In his rejoinder, the Ld AR argued that order of Assessing Officer merges with the order of Ld CIT(A) and Ld CIT(A) had over ruled the Assessing Officer s order. He argued that Ld CIT(A) had given part relief and Department had not filed any appeal against that relief. With respect to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in the form of debit note placed at page 134 is issued by M/s Deluxe Properties Ltd., which describes that this debit note is for supply of building material supplied between the period from April, 2002 to March, 2003 and which does not specify any material and further no evidence of any break up of such material has been placed by Ld AR in the paper book. 16. The analysis of invoices noted at pages 11 to 13 reveals the position as under:- Total amount of invoices. Rs.49,34,240/- Lesss: Amount of invoices from 24.10.2002 i.e. when the original agreement with Smt. Kavita Agarwal was terminated. Rs.11,08,813/- Alleged amount of expenditure between Period 7.4.2002 to 23.10.2002. Rs.38,,25,427/- 17. From the above even without considering the labour charges, it is apparent that major amount was alleged to have been spent between 7.4.2002 to 23.10.2002. Therefore, how it can be claimed that alteration/addition/renovations were done at the direction of ultimate buyer Shri Amit Sibal because agreement to sell could only be entered into with him after termination of first agreement of dated 16.,8.2002 which was said to have been t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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