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TMI Blog2019 (11) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... is without any basis and not applicable as the assessment has been reopened within four years from the end of relevant assessment year. We find that in group cases of the assessee, it has been categorically established the modus-operandi followed by the group companies and the assessee was also found indulging in land purchases. The sufficiency or correctness of the material is not a thing to be considered at such stage. Therefore, considering these facts on record,we are of the considered opinion that AO was justified in reopening assessment. Addition on account of PDC interest - HELD THAT:- We find that the modus operandi adopted by the Group has been established from the findings as given in the number of group concern. We find that Ld. CIT (A) has found that wherever the date of post dated cheque was extended, interest was being paid at 15% p.a. in cash out of books of account as was evident from the seized material, therefore, the interest on PDC to the extent of extension period was logical. Ld. CIT (A), therefore, directed the AO to re-compute the interest on PDC either on the sale consideration or additional payment to the extent of extended period of PDCs by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 and Post search enquiries, revealed that the group while dealing in land purchase was paying part payment at the time of execution of sale deed and the balance payment was being invariably paid by Post Dated Cheques (PDCs) and for intervening period (i.e. period between the date of sale deed and the date of encashment of PDCs) interest was being paid in cash @ 1.25% per month, on the amount of PDCs and this cash payment was not being accounted in the books of accounts. The assessee company has also purchased a large chunk of land and followed this modus operandi of pertaining interest on PDCs in cash and not accounting the same in the books of accounts. Therefore, notice under section 148 of the Act was issued on 29.03.2010 and same was duly served upon the assessee by speed post.In response to which, the assessee has filed return of income on 22.04.2010, declaring total income of ₹ 2,70,090/-. The assessee has also filed objection to issue of notice under section 148 of the Act which were disposed-off by the AO vide letter dated 03.12.2010. 5. Being, aggrieved, the assessee filed an appeal before the Ld.CIT (A). Wherein relying in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for assessment. The learned counsel for the assessee referred reasons recorded for reopening of assessment, placed at Paper Book, Page No. 93 and contended that that there is no charge against the assessee that there was any failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment.The learned counsel for the assessee further submitted that search and seizure operation was carried out on 15.11.2007 in the BPTP Group. The original assessment in the case of the assessee was made on 31.12.2008, therefore, the seized material was available at the time of making original assessment. However, the AO has not made any addition based on such seized material nor invoked the provisions of section 153C of the Act. Accordingly, reference to post search enquiries has no relevance. The learned counsel for the assessee further referred para 4.3 and 4.4 of the order of CIT (A) wherein the ld. CIT (A) observed that nowhere the AO has stated that part of seized material belonged to the assessee. It was also mentioned that seized material in group companies have shown trend of making additional payment for purchase of land, but there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BPTP group on 15.11.2007. Further, post search enquiries revealed that the group was dealing in land purchase and paying part payment at the time of execution of sale and balance was invariably paid by the post dated cheques and for the intervening period i.e. period between the date of sale deed and the date of encashment of PDC s interest was being paid @1.25% per month. The AO has analysed these papers and grouped them into PDS-1 to PDS-54 which supports the modus-operandi adopted by the assessee. The reasons recorded for reopening of assessment placed at PB-93 and with Annexure-A at page 94 to 99 shows that based on number of seized material, the A.O. found that the assessee has also purchased large chunk of land and followed the modus-operandi of making payment of interest on PDC s andhas made payment of interest in cash out of cash book of account. We, further find that the assessment was involved is A.Y.2006-07 and the notice for reopening of assessment has been issued on 29.03.2010, after recording the reasons. Thus, the assessment has been reopened within four years from the end of relevant assessment year, hence the assessment can be reopened even where there is no failur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at such stage. Therefore, considering these facts on record,we are of the considered opinion that AO was justified in reopening assessment. So far as reliance placed on the decision of Westland Developers (supra)of ITAT is concerned, we find that the reopening of assessment has been made within four years from the end of the assessment year, hence, proviso to section 147 was not applicable, nor this arguments has been discussed.Further, the Tribunal in that case has carried away by independent evidence in respect of interest of PDC, hence whereas modus-operandi by recording of statement of Group concern and their directors was duly established, hence, the said case is distinguishable. Further, the ld.DR has cited decision of Co-ordinate Bench decision in the case of ACIT Vs. IAG Promoters and Developers Pvt. Ltd., in ITA No.1674/Del/2013 for A.Y.2008-09 dated 31.10.2014 in which modus- operandi of group was approved, accordingly this ground of appeal is dismissed. 10. Ground No. 3 read as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Learned AR has been maintain all along that interest is not paid as all the receipts are only memorandum only.Analysis of these above seized document reveals that these seized documents definitely proves that interest is paid on PDCs. Various voucher in seized documents conclusively proves that the recipient has signed on voucher for receipt of the interest. Ld AR's contention that these are only working of interest claimed by seller for putting up before senior management does not appear to be convincing. In case of claim, the receiver will not sign the voucher as recipient. Amounts are specific and calculation is 15% per annum. Therefore, ld AR without conceding that the interest is paid on PDCs has taken the stand that in none of the seized material, i.e., even in receipt seized, the interest is from date of issue of PDCs. Now issue arises whether interest on PDCs are paid from date of issue or for extension of PDCs. Documents discussed above where there is clear evidences of receipt of interest is for extension of period of PDCs. Ld AR's arguments that calculation of interest on PDCs has been considered while entering into agreements holds some logic. But when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable period for giving PDC as per sale deed. This view is formed on the basis the statement of Sh. ChhotuRam which says that normally PDCs are given for 8 to 10 months. Further Ld AR has also submitted few sale deed in respect of some of seized record in the case of RamvatiBeero etc. where the interest working is made after 9/15 months. Taking these facts into consideration, it would be proper to compute interest after 6 months from date of sale on conservative side. Accordingly this ground is partly allowed. 13. Being, aggrieved the assessee filed this appeal before the Tribunal. The learned counsel for the assessee submitted that the AO categorized seized documents and marked as PDC-1 to PDC-54 relating to various companies of BPTP Group. The AO utilized all these documents in making present assessment. The assessee on purchase of several tracks of land in NCR National Capital Region and in some cases made part payment on sale consideration to the seller at the time of execution of sale deeds and balance payment was made by way of PDC. The AO obtained details of such PDC s given at the time of registration to the sellers and dates of encash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncern. We find that Ld. CIT (A) has found that wherever the date of post dated cheque was extended, interest was being paid at 15% p.a. in cash out of books of account as was evident from the seized material, therefore, the interest on PDC to the extent of extension period was logical. Ld. CIT (A), therefore, directed the AO to re-compute the interest on PDC either on the sale consideration or additional payment to the extent of extended period of PDCs by the AO and in case the working out of the same is not possible, to re-compute the 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. The Ld. CIT(A) has above relied on the statement of Shri Chhoturam as mentioned aboe. We find that the Co-ordinate Bench of Delhi Tribunal C Bench in the case of ACITv. M/s.IAG Promoters Developers (P) Ltd. [I.T.A.No.1674/Del/2013/A.Y. 2008-09 dated 31.10.2014 has upheld the findings of Ld. CIT (A) on similar circumstances in appeal by the Revenue. Which are reproduced as under: 5. We have heard the arguments of both the sides and perused relevant material placed before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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