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TMI Blog2013 (9) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... 43,03,250. In both years, the case was taken up for scrutiny and assessments were completed by orders under section 143(3) of the Act determining the income of the assessee at Rs. 3,08,96,240 for the assessment year 2006-07 and at Rs. 2,83,04,610 for the assessment year 2007-08 dated December 29, 2008 and December 18, 2009 respectively. Aggrieved by the orders of assessment for the impugned assessment years, the assessee preferred appeals before the Commissioner of Income-tax (Appeals). The learned Commissioner of Income-tax (Appeals) disposed of the assessee's appeals for the assessment year 2006-07 by order dated February 23, 2011 giving the assessee partial relief. For the assessment year 2007-08, the learned Commissioner of Income-tax (Appeals) allowed the assessee's appeal by order dated February 23, 2011. The Revenue is now in appeal before us against the orders for both the assessment years 2006-07 and 2007-08. The assessee has filed cross objections for the assessment year 2006-07. I. T. A. No. 705/Bang/2011 (assessment year 2006-07) In this appeal Revenue has raised the following grounds: "1. The order of the learned Commissioner (Appeals) is opposed to law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Appeals) had faithfully recorded the written and oral submissions of the assessee from paragraphs 5 to 7 on pages 3 to 14 of the order and then in paragraph 8, consisting of about 8 lines, allowed the assessee's appeal on this issue of deemed dividend under section 2(22)(e) of the Act without any discussion of the facts of the case on this issue, the legal position or assigning any reasons for taking the decision he took. In short, the learned Departmental representative submitted that there was no speaking order passed by the learned Commissioner (Appeals). He, therefore, prayed that the matter of deemed dividend under section 2(22)(e) of the Act required to be remitted back to the file of the Commissioner (Appeals) for de novo consideration in the interest of justice. Learned counsel for the assessee supported the order of the learned Commissioner (Appeals), but submitted that he had no objection if the issue of deemed dividend under section 2(22)(e) of the Act be remanded to the file of the Commissioner (Appeals) for consideration afresh. We have heard both parties and carefully perused the material on record. We have perused the order of the learned Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2006-07) In the cross-objection, the assessee has challenged the order of the learned Commissioner (Appeals) sustaining the following additions : (Rs.) (i) Payment for purchase of land 17,58,527 (ii) Disallowance of commission and brokerage 4,44,342 (iii) Disallowance under levelling and fencing charges 7,32,280 We will consider and dispose of them in seriatim. The grounds raised in cross-objection are as follows : "(a) Payment for purchase of land disallowed under section 40A(3) of Rs. 17,58,527. (i) He failed to appreciate that the payments were made to agriculturists and farmers who insisted on cash payments ; (ii) The respondent submits that the Commissioner (Appeals), having accepted that the transactions were genuine, should not have sustained the additions since the payments were made under 'exceptional and unavoidable circumstances'. (b) Disallowance of commission and brokerage of Rs. 4,44,342. (i) He failed to appreciate that the entire payments were supported by vouchers. (ii) The Commissioner (Appeals) failed to appreciate that non-deduction of tax could not be a reason for disallowance of expenditure. (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the consideration were residing in that area and some of them were in receipt of government compensation for land acquisition and had accounts and deposits in such banks. In this view of the matter, the Assessing Officer held that the provisions of section 40A(3) of the Act was applicable in the present case and consequently disallowed a sum of Rs. 17,58,527 (being 20 per cent. of the amount paid in cash, i.e., Rs. 87,92,635). In appeal, we find the learned Commissioner (Appeals) after examination of the facts upheld the disallowance made by the Assessing Officer as he was of the view that the assessee could not demonstrate with any cogent evidence that there was any business expediency or sufficient cause for such cash payments to various parties in the relevant period. Before us, learned counsel for the assessee merely reiterated the submissions made before the learned Commissioner (Appeals). On careful consideration of the facts and circumstances of the case, we find that the assessee's arguments that the transactions were genuine ; that the cash payments were made in the absence of proper banking facilities being available in Devanahalli, that the payments were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 33,52,658. It is seen that the learned Commissioner (Appeals) examined the matter in detail and came to the view that expenses on commission and brokerage charges, on which TDS had been deducted and remitted to the treasury in the instant case were genuine as per the facts placed before him and accordingly allowed the assessee relief of Rs. 29,10,316 and sustained the disallowance to Rs. 4,44,342. Before us learned counsel for the assessee has merely reiterated the submission made before the learned Commissioner (Appeals). No cogent evidence has been brought on record to establish that any part of the expenses, brokerage and commission out of Rs. 4,44,342 were genuine. In this view of the matter, we find there is no reason to interfere with the finding of the learned Commissioner (Appeals) and, therefore, uphold the disallowance of Rs. 4,44,342 out of commission and brokerage charges as sustained by the learned Commissioner (Appeals). The assessee's ground is accordingly dismissed. Levelling and fencing charges : Rs. 7,32,280 Learned counsel for the assessee submitted that the learned Commissioner (Appeals) should not have sustained the disallowance to the extent of Rs. 7,32,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has not furnished any cogent evidence to establish that the expenses of Rs. 7,32,280, which stood disallowed, were verifiable. In these circumstances, we are of the considered opinion that there is no reason or cause for us to interfere with the finding of the learned Commissioner (Appeals) and therefore sustain the disallowance of Rs. 7,32,280 out of levelling and fencing charges. The cross objection of the assessee accordingly stands dismissed. In the result, the cross-objection of the assessee is dismissed. I. T. A. No.706/Bang/2011 (assessment year 2007-08) In this appeal, the Revenue has raised the following grounds : "1. The order of the learned Commissioner (Appeals) is opposed to law and facts of the case. 2. The learned Commissioner (Appeals) erred in deleting the addition of Rs. 3,26,07,860 made under section 2(22)(e) by erroneously accepting the assessee's version that the amount shown as loan in the balance-sheet was an advance received for sale of land on the basis of an memorandum of understanding with M/s. Dynasty Developers P. Ltd. The learned Commissioner (Appeals) ought to have appreciated the facts and circumstances inasmuch as the considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this issue, the legal position or assigning any reasons for taking the decision he took. In short, the learned Departmental representative submitted that there was no speaking order passed by the learned Commissioner (Appeals). He, therefore, prayed that the matter of deemed dividend under section 2(22)(e) of the Act required to be remitted back to the file of the Commissioner (Appeals) for de novo consideration in the interest of justice. Learned counsel for the assessee supported the order of the learned Commissioner (Appeals), but submitted that he had no objection if the issue of deemed dividend under section 2(22)(e) of the Act be remanded to the file of the Commissioner (Appeals) for consideration afresh. We have heard both parties and carefully perused the material on record. We have perused the order of the learned Commissioner (Appeals) on the issue of deemed dividend under section 2(22)(e) of the Act and agree with the contention of the learned Departmental representative that the learned Commissioner (Appeals) merely recorded the submissions of the assessee at paragraphs 2 to 5.5 from pages 2 to 13 of his order and then in paragraph 6 of his order allowed the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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