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TMI Blog2015 (5) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... ly during the period of extension of PDCs and, therefore, he directed the Assessing Officer to recompute the interest on PDCs at the time of extension of the PDCs. He has further observed that if it is not possible to work out the extension of PDCs in each case, then the Assessing Officer is directed to recompute interest on PDCs after six months from the date of issue of the PDCs. See ACIT Vs M/s Pricison Infrastructure Pvt. Ltd. [2015 (2) TMI 105 - ITAT DELHI]- Decided against revenue. Additional payment in violation of Stamp Duty Act, 1899 - CIT(A) deleted the addition made by AO in view of the provisions of Section 37(1) - Held that:- This issue is covered in favour of the assessee vide order in the case of M/s West Land Developers Pvt. Ltd Vs ACIT [2014 (12) TMI 254 - ITAT DELHI] as these additional payments made to the parties which admittedly have not been routed as an expense in assessee’s P&L A/c has been wrongly added as an addition in assessee’s hands. - Decided in favour of assessee. Addition on account of deemed dividend - CIT(A) deleted addition - Held that:- the assessee had shown the impugned amount in its balance sheet as current liability which was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) himself holding that such material did not belong to the appellant. 3. That on the facts and circumstances of the case and in law the CIT(A) erred in holding to quote, that seized documents definitely prove that interest is paid on PDC despitei. that the seized record on the basis of which above finding was given, even according to his own finding by the CIT(A), did not belong to the appellant and, ii. that no enquiries were made from any of the alleged recipients of the interest and none was confronted with relevant document(s). 3.1 That the finding of the CIT(A) is based on mere surmises and conjectures without proof and corroboration by independent evidence. 4. That on the facts and circumstances of the case and in law the CIT(A) erred in not accepting the appellant s contention that Additional Payments having not been claimed as deduction by appellant, no disallowance could have been made in the hands of the appellant. 4.1. That without prejudice the CIT(A) erred in upholding the disallowance of Additional Payments made to the recipients who were not the owners of land and not the payment made in cash. 4.2 That without prejudice the CIT(A) erred in no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot claimed by the assessee as deduction, the question of any disallowance u/s40A(3) or otherwise in the case of the assessee does not arise. We, therefore, delete the entire disallowance made by the Assessing Officer u/s 40A (3) as well as additional payment. 6. Since, the facts in the case of the assessee are similar to the facts involved in the case of M/s Glitz Builders and Promoters Pvt. Ltd. (supra), we, therefore, by respectfully following the said order dated 02.01.2015 in ITA No. 1747/Del/2013 for the assessment year 2006-07, delete the impugned addition made by the AO and sustained by the ld. CIT(A). 7. The next issue vide Ground No. 5, relates to the confirmation of disallowance made by the AO u/s 40A (3) of the Act. 8. As regards to this issue, the ld. Counsel for the assessee at the very outset stated that this issue is covered vide order dated 02.01.2015 in ITA No. 1747/Del/2013 in the case of M/s Glitz Builders and Promoters Pvt. Ltd Vs ACIT (Supra). In her rival submissions, the Ld. DR although supported the orders of the authorities below but could not controvert the aforesaid contention of the Ld. Counsel for the assessee. 9. After considering the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was to purchase the land for and on behalf of CWPPL and whatever was the purchase price including the additional payment was debited to CWPPL and the assessee only received fixed remuneration i.e. ₹ 35,000/- per acre. Thus, we agree with the contention of the Ld. Counsel that the assessee has not claimed any deduction in respect of cost of the purchase of the land, whether original or additional payment. When the cost of the land, as well as additional payment is not claimed by the assessee as deduction, the question of any disallowance u/s40A(3) or otherwise in the case of the assessee does not arise. We, therefore, delete the entire disallowance made by the Assessing Officer u/s 40A (3) as well as additional payment. 10. Since the facts of the present case are identical to the facts involved in the aforesaid referred case so respectfully following the earlier order dated 02.01.2015 of this Bench of the Tribunal in ITA No. 1747/Del/2013 (supra), the disallowance sustained by the ld. CIT(A) is deleted. 11. For the assessment year 2008-09 is assessee s appeal in ITA No. 2309/Del/2013 the issues involved are identical having similar facts, therefore our find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case are identical to the facts involved in the case of M/s IAG Promoters and Developers Pvt. Ltd. (supra). The said company is a sister concerns of the assessee and belonged to the same group companies of BPTP Group to which the assessee belongs. In the said case vide order dated 31/10/2014 the ITAT Bench C , New Delhi in ITA Nos. 1674/Del/2013 1765/Del/2013 for the assessment year 2008-09 observed in para 5 as under:- 5. We have heard the arguments of both the sides and perused relevant material placed before us. At the outset, the ground raised by the Revenue is misconceived because Ld. CIT(A) has not deleted the addition of ₹ 5,06,625/- but has only directed to recalculate the interest. We have carefully gone through the order of the Ld. CIT(A) and also the submissions of both the parties and we do not find any infirmity in the order of the Ld. CIT(A). After examining the loose papers seized at the time of search at the assessee s premises, it was noticed that interest is paid on the PDCs only during the period of extension of PDCs and, therefore, he directed the Assessing Officer to recompute the interest on PDCs at the time of extension of the PDCs. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese were not routed through the P L A/c of the assessee and were also like the earlier payment were made to the claimants of the land holdings and for the assessee these were re-imbursements. The issue has been considered by the CIT(A) in paras 5.3.1 to paras 5.3.8 however he has restored the matter with certain directions referring to facts which were not relatable to the assessee. Addressing these facts Ld. AR submitted the arguments herein also remain the same as these were payments for the purchase of land and have not been claimed as an expenditure by the assessee as these were reimbursed to the assessee. The argument herein also remains the same that since no claim of expenditure has been incurred by the assessee as the payment was made as they were paid on behalf of CWPPL to settle the claims of the various claimants for the lands sold where potential disputes, claims and counter claims of the land holders had to be paid for peaceful litigation free possession of the land holding. It was re-iterated by the Ld. AR that the AO has recorded certain findings in paras 4 to 4.6 of the assessment order to search on BPTP It was contended and he gave no indication in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted as an expense in assessee s P L A/c has been wrongly added as an addition in assessee s hands. In this background it was contended that since cost of the land as assessee s expenditure has been assailed in Ground No-4 for similar reasons additional payments for the purchase of the land reimbursed by CWPPL cannot be disallowed u/s 37(1) in the hands of the assessee as no expenditure has been claimed by the assessee. Apart from this similarity of facts qua the arguments for Ground No-3 with Ground No.-4, it was submitted that the assessee has specifically challenged vide Ground No-2 the action of the CIT(A) who no doubt was dealing with multiple cases of search and has virtually cut and pasted in his order facts which are not even emerging from the assessment order as such keeping in mind the fact that AO never gave any hint during the hearing that he would refer to BPTP Ltd. group cases which were searched where assessee admittedly was not searched and the CIT(A) has made observation on the facts which are not on facts of the case. Since herein also the issue is addressed in the synopsis filed by the assessee, we extract para 7 from the same:- 7. Ground No.2 While the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and was utilized in making the assessment. (v) However, notwithstanding having stated as above, the CIT(A) justifies in para 6.4, the utilization of alien material seized from a different assessee in the hands of an assessee in making assessment u/s 143(3) by relying on the judgment in Pooran Mal vs. CIT 93 ITR 505 (SC). The CIT(A) has misread this judgment. There is no quarrel on the proposition as laid down in that case, that where search and seizure were in contravention of the provisions of section 132, material seized would be liable to be used. But what has been held in this judgment is that such material would be liable to be used, subject to law, against the person from whose custody it was seized. This is what was stated by the court in this regard:- In that view, even assuming, as was done by the High Court, that the search and seizure were in contravention of the provisions of section 132 of the Income Tax Act, still the material seized was liable to be used subject to law before the income tax authorities against the person from whose custody it was seized. (Copy of order being furnished.) The CIT(A) is plainly wrong and incorrect in extending the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue are issues which are not required to be addressed in the present proceedings. GroundNo-3 on the facts available on record considering the judicial precedent referred to in detail while deciding Ground No-4 has to be decided in favour of the assessee. Ground No.3.1 and 3.2 as such need not be adjudicated in the present case. Qua Ground No-2 the observation and findings to the extent that general observations based on material found during BPTP group of companies which were searched does not have any bearing. The material not having been confronted to the assessee in the face of the argument that even otherwise has no nexus has not been rebutted by the Revenue by any evidence or argument as the thrust of the parties attention remained focused on addressing the additions made. In the afore-mentioned peculiar facts and circumstances taking cognizance of the fact that in the facts of the present case the CIT(A) makes a reference to facts not borne out from the record namely recording of statement of some patwari and Chotu Ram the support drawn by the CIT(A) in sustaining the addition is found to be misplaced. However since the specific additions under challenge have been addressed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional High Court in the case of CIT Vs. Ankitek Pvt. Ltd. (2011) 11 Taxman.com 100 wherein at paras 25 to 27 it has been held as under: 25. Further, it is an admitted case that under normal circumstances, such a loan or advance given to the shareholders or to a concern, would not qualify as dividend. It has been made so by legal fiction created under Section 2(22)(e) of the Act. We have to keep in mind that this legal provision relates to dividend . Thus, by a deeming provision, it is the definition of dividend which is enlarged. Legal fiction does not extend to shareholder . When we keep in mind this aspect, the conclusion would be obvious, viz., loan or advance given under the conditions specified under Section 2(22)(e) of the Act would also be treated as dividend. The fiction has to stop here and is not to be extended further for broadening the concept of shareholders by way of legal fiction. It is a common case that any company is supposed to distribute the profits in the form of dividend to its shareholders/members and such dividend cannot be given to non-members. The second category specified under Section 2(22)(e) of the Act, viz., a concern (like the assessee herein) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to the M/s Green Park Estate Pvt. Ltd. First we will deal with the departmental appeal in ITA No. 1672/Del/13 for the A.Y 2007-08. Following grounds have been raised in this appeal: 1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 17,89,219 out of total addition of ₹ 35,78,438/-, 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 ₹ 7,00,000/- out of total addition of ₹ 27,40,625/-, made by the Assessing Officer in the 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. The order of the CIT(A) is erroneous and is not tenable on facts and in law. 24. From the above grounds, it would be clear that the issues involved are identical to the issues involved in ITA No. 1533/Del/13 in the case of M/s Green Valley Housing and Land Development Pvt. Ltd for the assessment year 2007-08. Therefore, our findings given in the former part of this order in the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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