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TMI Blog2017 (11) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... icer in assessment order or by the learned CIT (Appeals) in his order. Accordingly, the argument of the learned CIT [DR] that Additional payment is not recorded in books of accounts is not factually correct. As facts of case of assessee are similar and identical to the various cases decided by coordinate benches of Tribunal, New Delhi where similar disallowance has been deleted by the Tribunal in other group cases cited by the assessee. Being bound by the decision of the Coordinate Bench, it is held that no disallowance of additional payment can be made. In the result, it is held that the learned CIT (Appeals) was not justified in upholding part of the disallowance of additional payment on the ground that neither the assessee has debited additional payment in its Profit & Loss account nor has claimed it. - Decided in favour of assessee. Disallowance of cash payment made under section 40A(3) is deleted as assessee has not claimed any deduction in respect of cash payment made. Assessment u/s 153A - Held that:- Validity of notice was not upheld on the ground that satisfaction note was silent about the assessment year in which incriminating information was discovered on search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... development rights in respect of land purchased by other group companies and transferring these land development rights to BPTP Ltd. A search was conducted on M/s BPTP Ltd on 15.11.2007 whereby some documents were seized. As some documents were found to belong to the assessee i.e. M/s Countrywide Promoters Pvt. Ltd, action u/s 153C of the Act was taken and a notice u/s 153C of the Act was issued to the assessee on 16.07.2009. Return was filed by the assessee on 25.08.2009 in response to the notice under section 153C. Assessment was made on 31.12.2009, which is the subject matter of the present appeal. 3.2 It was contended by the learned AR of the assessee that in the present case the satisfaction note was not recorded by the Assessing Officer of the searched person namely, M/s BPTP Ltd in the file of BPTP Ltd. Instead, the satisfaction note was recorded by the Assessing Officer of Countrywide Promoters Pvt. Ltd i.e. the assessee, being the other person in the file of the assessee. Relying on the Circular no.24/2015 dated 31.12.2015 of CBDT, it was contended that the satisfaction note having not been recorded as envisaged by law, the assumption of jurisdiction by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of ₹ 1,72,42,433/- made by the Assessing Officer in assessment year 2006-07 on account of interest on PDCs paid outside the books of account. 5.1 The grounds of the assessee and the Department are dealt with together. 5.2 It has been pointed by the assessee that the addition of ₹ 1,72,42,433/- has since been rectified to ₹ 77,36,402/- by the Assessing Officer vide order u/s 154 dated 31.03.2010 and copy of order u/s 154 dated 31.03.2010 has been filed at page no.99-100 of Paper Book filed on 21.06.2017. 5.3 Briefly stated the facts of the case are as follows. During assessment proceedings, Assessing Officer noticed that the assessee company is one of the group company of BPTP group. The assessee had purchased several tracts of land in the NCR (National Capital Region) and transferred development rights in respect of land purchased to BPTP Ltd. like as other group companies have purchased land and transferred development rights to assessee. In some cases, the assessee company has made only part payment of sale consideration to the sellers at the time of executing sale deed and balance payment is made by way of post dated cheques (PDCs). During the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Promoters and Developers Pvt. Ltd. has been accepted by the Department and no appeal has been filed to the Hon ble High Court. It was also pointed that the said order has since been followed in number of the cases by the Coordinates Benches, of ITAT, Delhi for which a compilation was filed. It was therefore submitted that the order in case of M/s IAG Promoters and Developers Pvt. Ltd. may be followed and the appeal of the Department on Ground No. 1 be dismissed. 6.2 The learned CIT DR in her submissions contended that the facts of the case of the assessee were distinguishable from the facts of the case of M/s IAG Promoters and Developers Pvt. Ltd. She filed a paper book, containing 54 seized documents, which were categorized as PDC 1 to PDC 54 by the Assessing Officer and were annexed to the assessment order. She made her arguments on the premise that the facts in the present case were distinguishable from the facts in the case of M/s IAG Promoters and Developers Pvt. Ltd. She argued on some of the seized documents from the Paper Book filed by her at length which were related to addition of interest on PDCs paid in cash outside books of account to put forth her argument that tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also taken through the relevant portions of the orders of the learned CIT (Appeals) in the two cases. The learned CIT (Appeals) in both the cases specifically dealt with the very same 54 seized documents and gave his finding. In the case of M/s IAG Promoters Developers Pvt. Ltd., the learned CIT (Appeals) dealt with the seized documents in para 5 at pages 4 to 15 and gave his finding in para 5.4; the concluding portion of the finding was this :- If it is not possible to work out the extension of PDCs in each case then Assessing Officer is directed to recomputed interest on PDCs after six months from the date of issue of PDCs i.e. date of sale, as six months is taken as reasonable period for giving PDC as per sale deed 6.6 It was also shown that in the present case, the learned CIT (Appeals) dealt with the same 54 seized documents in para 6 at pages 9 to 19. After dealing with same documents as were dealt with in case of M/s IAG Promoters Developers Pvt. Ltd. and after going through them the learned CIT (Appeals) gave similar finding as quoted above, which was contained in para 6.5. 6.7 Having shown that the facts of the two cases being exactly identical, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the administration of justice. Hon ble MP High Court in Agarwal Warehousing and Leasing Ltd v. CIT 257 ITR 235 (MP) has held that the orders passed by the Tribunal are binding on all the tax authorities functioning under the jurisdiction of the Tribunal. While so holding it followed the decision of the Hon ble Supreme Court in UOI v. Kamlakshi Finance Corporation Ltd AIR 1992 SC 711, 712 which has ruled thus :- The principle of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not acceptable to the Department in itself an objectable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax law. ii) Instructions of CBDT F. No. 279/Misc/52/2014-(ITJ) dt. 10.12.2015 CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 23.01.2015 for the assessment year 2006-07; Copy of order of ITAT B Bench, New Delhi in M/s Fragrance Construction Pvt. Ltd in ITA No. 2547/Del/2013 2314/Del/2013 for the assessment year 2008-09; Copy of order of ITAT B Bench, New Delhi in case of M/s Druzba Overseas Pvt. Ltd in ITA No. 2545/Del/2013 dated 25.02.2015 for the assessment year 2008-09; Copy of order of ITAT B Bench, New Delhi in case of M/s Eventual Builders Pvt. Ltd in ITA No. 1368/Del/2013 for the assessment year 2007-08; Copy of order of ITAT A Bench, New Delhi in M/s Business Park Overseas Pvt. Ltd in ITA No. 1731/Del/2013 1403/Del/2013 for the assessment year 2006-07. 6.10 It was also submitted by the learned AR that the arguments made by the learned CIT DR on some of the seized documents be not considered as it would amount to revisiting the same documents, which were already considered by the ITAT in the case of M/s IAG Promoters Developers Pvt. Ltd. and by the Coordinate Benches in the various cases where on same facts the order in M/s IAG Promoters Developers Pvt. Ltd was followed. It was also reiterated that in the circumstances, like the present case, where o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese seized documents not belong to assessee and none of these seized document relate to period under consideration. We are afraid that we cannot take cognizance of the arguments made by the CIT DR on the seized documents and also of the rejoinder by the learned AR on them, because that would be amounting to revisiting the same documents, which have already been considered in the M/s IAG Promoters Developers Pvt. Ltd. (supra) by the Tribunal and on which decision has already been given and also by the successive Benches in the cases which followed the order of M/s IAG Promoters Developers Pvt. Ltd. Accordingly, following the order of M/s IAG Promoters Developers Pvt. Ltd. (supra) the order of the learned CIT (Appeals) is sustained and the ground of the Revenue is rejected. As a result, the groundsNo.3 and 3.1 of the assessee will not survive and are rejected as such. 8. Grounds Nos. 4, 4.1 4.2 of the Assessee : These grounds are as under :- 4. That on the facts and circumstances of the case and in law the CIT (Appeals) erred in not accepting the appellant s contention that Additional Payments having not been claimed as deduction by appellant, no disallowance could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These directions were to the following effect in para 7.3.8 :- Additional Payment made is in connection with possession of particulars land, therefore, it is in business expediency. Therefore, additional payment to the extent of enhancement in land price is an allowable expenditure, as the same is not covered to be included for stamp duty, as it is subsequent phenomena. However, as in some cases, the additional payment itself is questioned or payment is not made to owner of land, etc., Those payment, I do not find for business expediency as these person to not have legal right over the land in question, the same is not mentioned in the sale deed. In view of the above additional payment made to the owner of the Land by way of account payee cheque is hereby allowed as an expense u/s 37 and additional payment made to other payments are not supported by any legal right over the land and similarly payment made in cash to the owner of land is confirmed as, there are instance of not conforming the receipt by few seller as stated supra. Therefore, the ground is partly allowed. 9.1 As a result of the above directions addition of ₹ 1,55,80,945/- was deleted and ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment year 2008-09; Copy of order of ITAT A Bench, New Delhi in M/s Business Park Overseas Pvt. Ltd in ITA Nos. 1731/Del/2013 1403/Del/2013 for the assessment year 2006-07. 9.3 The learned CIT DR contended that the order of the Co-ordinate Bench in M/s Westland Developers Pvt. Ltd (supra) be not followed on the ground that the facts in the present case were different from the facts in the case of M/s Westland Developers Pvt. Ltd (supra). It was argued by her that Additional payment is not recorded in books of account. It was pleaded that the expenditure was required to be considered in the hands of the assessee. It was also contended that the documents dealt with by the Assessing Officer in the assessment order were also required to be considered. In the rejoinder the learned AR submitted that the facts in the two cases were identical and so also the orders of the learned CIT (Appeals). The facts in the present case being identical there can be no scope of accepting any arguments on the specious ground that the facts were distinguishable. It was submitted by the learned AR that argument of the learned CIT [DR] that Additional payment is not recorded in boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the arguments qua Ground No. 4 would fully apply here also. The difference that here the entire amount is added u/s 37 as opposed to part of the expenditure disallowed U/S 40A(3) is not so material as the finding is arrived at taking cognizance of the material fact that herein also no such claim of expenditure has been made. The fact that the additional payments were warranted in order to avoid potential disputes amongst the claimants of the land holding which have been passed through to the land holders from generation to generation wherein there may be informal arrangements of ownership and or the payments were for commercial expediency to facilitate peaceful possession and registration of the landholding; where by the time Registry was made the landholders felt a higher payment was necessitated due to increase in value are issues which are not required to ITA Nos.1532 1756/Del/20137 be addressed in the present proceedings. Ground No-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. 9.5.1 We have gone through the records and find that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved, the assessee is in appeal before us. 10.2 The learned AR submitted that the issue in question is fully covered in favour of the assessee by the order of the Tribunal in case of Westland Developers Pvt. Ltd in ITA No.1752/Del/2013 vide order dated 22.08.2014 for the AY 2006-07. It was submitted that this order of the Tribunal has been accepted by the Department and no appeal has been filed before the Hon ble High Court. It was also submitted that on identical facts the order of the Westland Developers Pvt. Ltd. (supra) has been followed in the following cases by the various Coordinate Benches :- Order of ITAT C Bench, New Delhi in case of M/s Glitz Builders and Promoters Pvt. Ltd 1747/Del/2013 1406/Del/2013 dated 02.01.2015 for the assessment year 2006-07; Order of ITAT H Bench, New Delhi in M/s Wellworth Developers Pvt. Ltd. in ITA Nos. 1675/Del/2013 1761/Del/2013 for the assessment year 2006-07 dated 10.02.2016; Order of ITAT F Bench, New Delhi in M/s Poonam Promoter and Developer Pvt. Ltd. in ITA Nos. 4064/Del/2013 1590/Del/2013 for the assessment year 2006-07; Order of ITAT G Bench, New Delhi in M/s Saraswati Kunj Infrastrucure Pvt. Ltd. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgement and seen that it proceeds on entirety different facts and circumstances and has no applicability to the facts of the present case. Consequently, it is seen that from the ratio of the judgements relied upon before the CIT(A) and also before us which have been discussed in the earlier part of this order no arguments have been advanced by the Revenue so as to contend how they are not applicable to the case at hand, no distinguishing fact, circumstance or position of law has been relied upon so as to come to a contrary finding than the one arrived at. Accordingly on a consideration of the peculiar facts and circumstances of the case and the judgements relied upon considering the relevant provision of the Act namely Section 40A(3), we hold for the detailed reasons given hereinabove that Section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatable to the addition has been claimed and the assessee has successfully demonstrated that the payment were reimbursement made by CWPPL. Accordingly Ground No.4 is allowed. 10.5 As facts of case of assessee are similar and identical to the various cases decided by coordinate benches of Tribunal, New Delhi det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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