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TMI Blog2016 (8) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicate the entire issue in view of all these developments as per law after affording adequate opportunity of hearing to the assessee. - ITA Nos. 2849/Ahd/2012 & 146/Ahd/2016 - - - Dated:- 29-6-2016 - Shri Pramod Kumar, Accountant Member and Shri S. S. Godara, Judicial Member For The Revenue : Shri O.P. Chaudhary, Sr. D.R. For The Assessee : Shri S.K. Kabra, A.R. ORDER PER : S. S. GODARA, JUDICIAL MEMBER:- The assessee has filed instant quantum and penalty appeals for A.Y. 2009-10 against separate orders of the CIT(A)-II, Ahmedabad and CIT(A), Valsad dated 18-10-2012 16-11-2015 respectively; in appeal nos. CIT(A)-II/CC-2/254/2011-12 and CIT(A)/VLS/08/14-15, in proceedings under section 143(3) and section 271(1)(c) of the Income Tax Act, 1961; in short the Act . 2. We come to assessee s pleadings first. His former appeal raises two substantive grounds. The first one seeks to delete disallowance of expenditure of ₹ 1 lacs made by the CIT(A) by reversing Assessing Officer s action invoking section 40A(3) of the Act qua FDR payments of ₹ 1,50,000/- . Latter ground challenges the lower appellate order confirming unverifiable purchase claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1.00 lacs and ₹ 50,000 in favour of Shri Budhia Kurkutia as per the conditions laid down in non agriculture use permission granted by Revenue dept of Administration of Dadra and Nagar Haveli. In fact, the appellant was required to put an amount of ₹ 50,000 in FDR in a nationalized bank for 5 years and the tribal seller i.e. Shri Budhia Kurkutia was required to keep an amount of ₹ 1.00 lacs in FDR in a nationalized bank. From the perusal of receipt issued by Shri Budhia Kurkutia seller of the land, it is clear that the appellant Shri Abisheksingh Chauhan made the full and final payment towards sale consideration of total land admeasuring 10.85 hectares of village Kala bearing survey No. 41/2/4 and 5 and this includes FDR of ₹ 50,000 issued on 30-12-2008 and FDR of ₹ 1.00 lac issued on the same date. As per registered sale deed dt. 30-12-2008, total price of land admeasuring 10.85 hectares was ₹ 97.65 lacs [at the rate of ₹ 9000 per Aare]. In addition to this, the purchaser i.e. the appellant has kept ₹ 50,000 in the form of FDR in the favour of seller as an additional amount and ₹ 1.00 lac has been kept by the seller in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant gets the relief of ₹ 50,000. 6. We find that the lower appellate findings thereafter hold that section 40A(3) disallowance does not apply qua the latter sum of ₹ 20 lacs being in the nature of a journal entry in question. The CIT(A) deletes the corresponding disallowance. He however proceeds to confirm the corresponding unverifiable purchase disallowance of ₹ 20 lacs as under:- 2.8 I have considered the basis of disallowance made by the Assessing Officer, the submissions made by the Ld. AR and also perused the copy of MoU dt 18-6-2008, the copy of registered sale deed dt 30-12-2008 for land bearing S. No. 41/2/4 and 5 admeasuring 10.85 hectares at village Kala sold by Shri Budhia Kurkutia to the appellant and also the sale deed dt 30-12-2008 for 8 hectares of land in village Parzai bearing S. No. 63 sold by the appellant Shri A. F. Chauhan to Shri Budhia Kurkutia. I have also perused the order of the collector of D N Haveli dt. 11-9-2008 regarding grant of permission to sell the agricultural land bearing S. No. 63 by Shri A. F. Chauhan in favour of Shri Budhia Kurkutia of Parzai. Before adjudicating the issued under consideration, it will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture of land leveling and land developing, for construction of house, and to make a compound wall and make it useful for agricultural purpose for which the appellant has agreed to make an expenditure of not more than ₹ 20 lacs or pay the same to the present vendor i.e. Shri Budhia Kurkutia only after the present vendor has fully vacated the said property and demolished his as well as his sister's old existing house situated on the said property at village Kala. The appellant has claimed expenditure of ₹ 20 lacs as part of the land cost by passing JV entry on 15-11-2008. It is also admitted by the appellant that the appellant has not made payment of ₹ 20 lacs to Shri Budhia Kurkutia and that remained outstanding as on 31-3-2009. The assessment order was passed on 20-8-2011 i.e. after three and half years from the date of MoU and till that date, no payment of ₹ 20 lacs was made because Shri Budhia Kurkutia has not fulfilled his obligation. Considering the above facts on record and after considering all the arguments, it is held that the Assessing Officer was fully justified to disallow the alleged expenditure of ₹ 20 lacs debited to the cost o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own payment of ₹ 20 lacs on 14-5-2012 and 15-5-2012 only after assessment order and addition of ₹ 20 lacs made by the Assessing officer and even during the appellate proceedings, the appellant has not produced any evidence of actual incurrence of the expenditure on the said land by the appellant or by Shri Budhiya Kurkutia. The expenditure claimed by JV entry remains unverifiable, unconfirmed and unsubstantiated even after providing adequate opportunities during the assessment order and appellate proceedings. Hence, it is held that the Assessing Officer was justified in disallowing claim of expenditure of ₹ 20 lacs on the basis of facts and circumstances of the case and relying on the various judgements mentioned in para 7.9 of the assessment order which have been reproduced on page No. 3 to 5 of this order. It is also held that the appellant has prepared and signed into MOU with alleged purchaser to increase the cost of land by making false claim of expenditure to be incurred on the land sold by the appellant so that the income chargeable to tax arising on sale of land can be reduced. The alleged MOU was neither a notarized nor a registered document. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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