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TMI Blog2015 (6) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... sh on evidence that the land development expenses were incurred wholly and exclusively for the purpose of its business. Thus restore the matter to the file of the A.O. for deciding the same afresh - Decided in favour of revenue for statistical purposes. Disallowance of commission expenses - assessee had not discharged its onus to prove that the expenses were incurred for its business - CIT(A) deleted the disallowance - Held that:- CIT(A) has again erred in relying only on the fact that the amount of commission was paid by the assessee by cheque after deducting tax at source to allow the claim of the assessee without appreciating that it is for the assessee to establish on evidence that the commission expenses claimed by it were incurred wholly and exclusively for the purpose of its business. We therefore set aside the impugned order of the Ld. CIT(A) on this issue and restore the matter to the file of A.O. for deciding the same afresh - Decided in favour of revenue for statistical purposes. Disallowance made u/s. 40A(3) - CIT(A) deleted the disallowance - Held that:- The payments made by the assessee to the land lords in cash were found to be covered by the Ld. CIT(A) by exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting guards etc., in respect of Ganesh Vision City and Ganesh City Projects. As regards the cost of land, it was submitted by the assessee that a sum of ₹ 30,00,000 was paid to the land owners of Ganesh Pearl City and a sum of ₹ 16,00,000 was paid to the land owners of Ganesh Vision City as extra price. These payments were claimed to be made partly by cheque and partly by cash. As regards the commission expenses, it was submitted by the assessee that the payment on account of commission was made by cheque after deducting tax at source. Copy of relevant TDS certificate was also filed by the assessee in support. 2.1. The A.O. did not find merit in the explanation offered by the assessee in respect of its claim for land development charges, commission and payment towards land to be satisfactory. As regards the payment made towards land, he noted that the assessee could not produce the copies of relevant agreements for payment of extra compensation claimed to be paid to the land lords. He also noted that even the confirmations from the concerned land owners could not be furnished by the assessee. As regards the payment of ₹ 32,00,000 claimed to be made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer that the amount of ₹ 32 lakhs was paid by the appellant to M/s. Ganesh Estates, which is a proprietary concern of Sri U. Rajendra Prasad, for the development of Ganesh Millennium City with an extent of 250 acres, but only has doubts over the services really rendered by Sri U. Rajendra Prasad to the appellant company. The appellant also submitted Form NO.16A evidencing TDS on the amount of ₹ 32 lakhs paid to M/s. Ganesh Estates. An affidavit was filed by Sri U. Rajendra Prasad, wherein, he stated that he had entered into an agreement with the appellant during F.Y.2005-06 for carrying on the developmental works and construction of site office etc. and had received ₹ 32 lakhs by way of account payee cheques in respect of the works executed by him and he stated that he was assessed with ITO, Ward 6(3), Hyderabad. As rightly argued by the appellant, no prudent business company will pay such a huge amount of ₹ 32 lakhs to any other company including sister concern without any services being rendered by the recipient. If the A.O. had doubts over the services rendered by Sri U. Rajendra Prasad for Ganesh Millennium City, he should have caused independent enq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessee had not discharged its onus to prove that the expenses were incurred for its business. 4. The Ld. CIT(A) has Ld. CIT(A) has erred in deleting disallowance made u/s. 40A(3) of I.T. Act amounting to ₹ 5,30,000/- even though it was established by AO that the cash payments were made to persons who were having banking accounts and these payments were not covered by exception laid down in Rule 6DD of I.T. Rules. 5. Any other ground that may be argued at the time of hearing. 3. In this case, the appeal of the Revenue was fixed for hearing on various dates i.e., 08.01.2014, 29.04.2014, 18.08.2014 and 18.12.2014. However, nobody appeared on behalf of the assessee on these dates nor any application seeking adjournment was filed. The hearing therefore was finally fixed before the Tribunal on 05.05.2015 and a notice of the same was sent through the O/o Learned D.R. However still none has appeared on behalf of the assessee on 05.05.2015 despite the fact that notice of the said hearing sent through the department was duly served on the assessee, a proof of which is placed on record before us. This appeal of the Revenue is therefore being disposed of exparte qua the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred wholly and exclusively for the purpose of its business. We therefore set aside the impugned order of the Ld. CIT(A) on this issue and restore the matter to the file of A.O. for deciding the same afresh after giving the assessee one more opportunity to support and substantiate its claim of commission expenses. Ground No.3 is also treated as allowed for statistical purposes. 6. As regards the issue involved in ground No.4 relating to the disallowance under section 40A(3) for payments made by the assessee to the land lords in cash exceeding the stipulated limit of ₹ 20,000, it is observed that the payments made by the assessee to the land lords in cash were found to be covered by the Ld. CIT(A) by exceptional circumstances specified in Rule 8DD of I.T. Rules inasmuch as the same were made in respect of projects of the assessee located in remote villages where banking facilities were not in existence. At the time of hearing before us, the learned D.R. has not been able to dispute or controvert this finding recorded by the Ld. CIT(A) while allowing the relief to the assessee on this issue. We therefore find no justifiable reason to interfere with the order of the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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