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TMI Blog2017 (6) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not claimed as expenditure to the Profit & Loss account the cost of land was debited to the work–in–progress. Commissioner (Appeals) has deleted the addition on the basis of the finding of the Co–ordinate Bench of the Tribunal, Delhi Bench, in the case of M/s. AT Properties Pvt. Ltd. [2013 (11) TMI 1723 - ITAT DELHI] Disallowance on account of rent expenditure - Held that:- As going through the facts of the case and by going through the record of the assessee and even on going through the record of the landlord namely Shri Ganpatrao Ahirkar, Shri Anil Ahirkar and Smt. Surekha Ahirkar, learned Commissioner (Appeals) has arrived at the conclusion that there is no ambiguity of any kind in the transaction. These facts are not distinguishable at this stage also. The learned Commissioner (Appeals) passed the order judiciously and correctly which is not liable to be interfered with at this appellate stage. - Revenue’s appeal is dismissed. - ITA no. 70/Nag./2015 - - - Dated:- 30-6-2017 - SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER Assessee by : Shri Manoj Moryani Revenue by : Shri A.R. Ninawe O R D E R PER AMARJIT SINGH, J.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) who allowed the claim of the assessee, therefore, the Revenue is in appeal before us. ISSUE NO.1 3. Under this issue, the Revenue has challenged the deletion of addition of ₹ 42,49,485 on account of commission. Now it is to be seen what are the reasons taken by the learned Commissioner (Appeals) for the deletion of the said addition. Therefore, it is necessary to advert the findings of the learned Commissioner (Appeals) on record. 7.0 I have carefully gone through the assessment order, the submissions of the AR of the appellant and the aforesaid judicial decisions relied upon by the AO and the appellant. 7.1 On careful examination of the facts, it is seen that the appellant has booked the commission on sale of plots on accrual basis. However, sale is booked when sale deed is executed and possession of the plot sold is given to the buyer on execution of the Agreement to Sale. It is but for this method of accounting followed by the appellant that the appellant has claimed the commission on accrual basis on finalisation of deals and receipt of advance against sale of property but the sale has been booked in the subsequent year. The appellant in this regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the appellant. Thus, the Assessing Officer s action that having admitted the claim for commission, without challenging the veracity of its genuineness and by not disturbing the taxability of profits attributable to such sales in the respective years, without pointing out any infirmity, amounts the acceptance of mercantile method of accounting followed by the appellant. It is not a case where taxability embedded in the transaction of sale has been omitted or that the commission actually has not been paid. The AO has brought to tax, the income embedded in the transaction of sale of plots by the appellant without disturbing the method of accounting followed by the appellant. The A.O. has also not challenged the genuineness of the actual payment of the commission. The books of account of the appellant are duly audited and such audit report was furnished by the assessee before the A.O. along with the books of account and bills and vouchers which were examined by the AO as is obvious from the finding recorded in Para 2 of the assessment order without pointing out any defect as such in the books of account and Bills vouchers. If, there was any deviation in the method of accounting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground raised by the Revenue. ISSUE no.2 5. Under this issue, the Revenue has challenged the deletion of addition of ₹ 24 lakh made by the Assessing Officer on account of disallowance under section 14A(3) on account of cash payment of ₹ 12 lakh each in respect of land in Khasra no.7/2, 7/3, Ph. No.46, Mouza, Isanami, Teh. Hingna, Dist. Nagpur. On verification of the return of income and documents, the Assessing Officer observed that the assessee paid the amount of ₹ 24 lakh otherwise than through an account payee cheque or demand draft. Therefore, the assessee has violated the provisions of section 14A and accordingly, an amount of ₹ 24 lakh was added to the income of the assessee. Before going further, it is necessary to advert the finding of the learned Commissioner (Appeals) on record. Para 9 of the learned Commissioner (Appeals) s order is reproduced below: 9.0 I have carefully gone through the assessment order, the submissions of the AR of the appellant and the aforesaid judicial decisions relied upon by the AO and the appellant. 9.1 The appellant is a Developer. The appellant purchases the Agricultural land, gets it converted into N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. On appraisal of the order passed by the learned Commissioner (Appeals) in question, we noticed that the appellant is a developer and purchased the land to get it converted into the non agricultural land. The same was to be sold after plotting. It is not in dispute that the amount of ₹ 24 lakh was paid in cash to the vendor. The said amount was not claimed as expenditure to the Profit Loss account the cost of land was debited to the work in progress. In view of this factual position, the learned Commissioner (Appeals) has deleted the addition on the basis of the finding of the Co ordinate Bench of the Tribunal, Delhi Bench, in ITA no.330/Del./2013 in the case of M/s. AT Properties Pvt. Ltd. The factual position is also the same. Since the matter of controversy has been decided by the learned Commissioner (Appeals) on the basis of finding of the Tribunal, Delhi Bench, cited supra, therefore, we are of the view that the learned Commissioner (Appeals) has decided the matter judiciously and correctly specifically in the circumstances that no distinguishable material has been placed on record before us. Therefore, the finding of the learned Commissioner (Appeals) is not li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese aspects have not been disputed by the A.O. Therefore, the addition made by eth A.O. of ₹ 9,60,000 on account of disallowance of rent is directed to be deleted. Hence, this ground is allowed. 8. On appraisal of the above mentioned findings, we noticed that the appellant was paying the rent of the premises through account payee cheque on which the TDS has also been deducted. It is not disputed that the appellant was not using the said premises the landlord has also reflected the rent in their return of income and accordingly they also paid the tax. This factual position was not in dispute. Therefore, in the circumstances, by going through the facts of the case and by going through the record of the assessee and even on going through the record of the landlord namely Shri Ganpatrao Ahirkar, Shri Anil Ahirkar and Smt. Surekha Ahirkar, learned Commissioner (Appeals) has arrived at the conclusion that there is no ambiguity of any kind in the transaction. These facts are not distinguishable at this stage also. The learned Commissioner (Appeals) passed the order judiciously and correctly which is not liable to be interfered with at this appellate stage. Accordingly, we affirm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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