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TMI Blog2016 (5) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of assessee - ITA No. 1950/Del/2011 - - - Dated:- 28-4-2016 - Shri Chandra Mohan Garg, Judicial Member And Shri L. P. Sahu, Accountant Member For the Appellant : Shri R.S. Singhvi, CA For the Respondent : Shri Ashis Chandra Mohanty, Sr. DR ORDER Per Chandra Mohan Garg, Judicial Member This appeal has been filed by the assesee against the order of the Commissioner of Income Tax (Appeals) XVII, New Delhi dated 24.2.2011 passed in the first appeal No. 198/CIT(A)XVII/Del/09-10 for asstt. year 2007-08. The grounds raised by the appellant assessee read as under :- 1. That the impugned order dated 24.02.2011 passed by the learned Commissioner of Income-tax(Appeals)XVII, New Delhi is bad in law and wrong on facts. 2. That on the facts and circumstances of the case, the learned Commissioner of Income-tax(Appeals)XVII has erred in law in upholding the action of the Assessing Officer treating the amount payable to the consolidator amounting to RS.37,22,734/- as non genuine expenditure. 2.1 That on the facts and circumstances of the case, the learned Commissioner of Income-tax(Appeals)XVII has erred in law in upholding the action of the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red an appeal before the Ld. CIT(A) but remained empty handed as appeal of the assessee was dismissed. Further, the empty handed assessee has filed this appeal before the Tribunal with the grounds as reproduced hereinabove. 3. We have heard arguments of both the sides and carefully perused the relevant material placed on record. Ld. Assessee s representative (AR) contended that on the identical set of facts and circumstances similar issue has been decided in favour of the assessee by the ITAT F Bench in ITA No. 1949/Del/2011 in the similar asstt. year 2007-08 in the case of Philana Builders Developers P. Ltd. vs. ITO order dated 11.2.2016. The Ld. AR further contended that the assessee and Philana Builders Developers P. Ltd. belong to a same group company and in the similar facts and circumstances ITAT H Bench Delhi in the case of Zebina Real Estate P. Ltd. vs. ITO in ITA No. 1429/D/2011 and 1430/D/2011 order dated 12.4.2013 the Tribunal has followed the order dated 5th October,2011 passed in the case of M/s. Finian Estate Developers P Ltd. vs. ITO reported in 142 TTJ 545 (Del) which is also a group company of the assessee group. 4. Ld. AR contended that except amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 2011, the ITAT examined the nature of the MoU between Finian and VEEPL with particular reference to the clauses therein and concluded that Finian was transacting with VEEPL on a principal to principal basis and that it could not be said that the payment to VEEPL was for rendering services. Consequently, it was held that section 194H of the Act was not at all applicable . The ITAT noted that in terms of clause 3.2 of the MoU no sum was due to be paid to VEEPL for the services rendered by it till it procured 27 acres of land. The amount paid to VEEPL was duly reflected by Finian in its purchases and the closing stock and no sales had been made during the year in question. The payment of 2% of the sale amount of VEEPL as consideration for transferring VEEPL s rights in the land was in terms of Clause 3.2 of the MoU and it had not been shown that such payment was not a fair compensation. 12. As already noticed hereinbefore, no appeal was filed by the Revenue in this Court against the decision of the ITAT on the above aspect in the case of Finian. 13. ..It is submitted that while in the case of Finian the Consolidator invested its own funds for purchasing the land f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t P. Ltd. as mutually agreed. This was the mutually agreed price. 7.5. The ld.AR submitted that Vikram Electric Equipment P.Ltd. worked for land acquisition and after scrutiny of the concerned documents of the land, Vikram Electric Equipment P. ltd. would suggest the appropriate land for purchase by the assessee. He submitted that Vikram Electric Equipment P. Ltd. thus acted with the farmers on its own account rather than for and on behalf of the assessee, on principle to principle basis, with the farmers on the one hand and the assessee on the other. 7.6. The ld.AR further submitted that this being so, the provisions of neither section 194C nor section 194H get attracted to the payment made by the assessee to Vikram Electric Equipment P. Ltd. It has been submitted by the ld.AR that the payment along with payment made to the farmers directly represented the purchase of the cost of land and had been correctly treated as such in the assessee s books of account. It has been contended that alternatively, in any case, the payment made to Vikram Electric Equipment P. Ltd. has not affected the taxable profits of the assessee during the year. The total purchases were lyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Buyer Company. 7. In view of the above it is amply clear that the amounts paid to the consolidator i.e. M/s. Vikram Electric Co. (P) Ltd. was duly accounted by the assessee in the purchases and closing stock. Undisputedly no sales have been made by the assesee during the period under consideration. In view of above scenario and facts we concur with the conclusion of the coordinate bench of the Tribunal in the case of the Philana Builders Developers P. Ltd. (supra) and hold that the provisions of section 40(i)(ia) of the Act do not apply to the present case on the payments made by the assessee to the consolidator as the assessee has not claimed any deduction for payment as amounted to the consolidator i.e payment made to M/s. Vikram Electric Co. (P) Ltd. either in the profit and loss account or in the computation of the taxable income filed alongwith the return of income. Thus, we decline to accept contention of the Ld. DR that the payment made by the assessee to the consolidator on purchase of land attracts the TDS provision of section 194C or section 194H of the Act. Hence, respectfully following the decision of the Tribunal dated 11.2.2016 (supra) the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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