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TMI Blog2022 (5) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for grant of deduction u/s 80IA (4) of the Act. Under these circumstances, we are of the view that the deduction u/s 80IA(4) in respect of Salarpuria Touchstone park cannot be allowed. However, in case the Hon ble High Court decides the issue favorably and the project is notified in future by the competent authority , then the assessee may approach the AO for grant of relief/deduction 80IA(4) of the Act and the AO will be bound to amend the order accordingly. Subject to above observations, this issue is decided against the assessee. Accordingly, ground nos. 1 2 are dismissed with the above observations. Disallowing the relief in respect of TDS being the short credit allowed by the AO by restoring the issue back to the file of AO with the direction to allow the TDS on the basis of TDS certificates - HELD THAT:- We are inclined to direct the AO to allow the credit of TDS of Rs. 1,38,282/- to the assessee after verifying the TDS certificates and other evidences as may be furnished by the assessee in respect of its claim. Accordingly the ground no. 3 is allowed for statistical purposes. Allowability of MAT credit of taxes of earlier years u/s 115JAA - HELD THAT:- Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance can be made in consonance with the ratio laid down by the Hon ble Apex Court in the case of Max India Ltd. [ 2018 (3) TMI 805 - SUPREME COURT] . After perusing the order of Ld. CIT(A) in the light of the decisions as discussed above, we do not find any infirmity in the appellate order and accordingly ground nos. 1 of the revenue s appeal is dismissed. Addition on account of bad debts during the year - HELD THAT:- We note that sundry balances were written off by the assessee including unserviceable stocks to the tune of Rs. 2,36,454/- which were apparently arising in normal course of business or pertaining to amounts receivable and therefore the assessee is entitled to charge the same against the profits during the year in terms of ratio laid down in T.R.F Ltd. [ 2010 (2) TMI 211 - SUPREME COURT] We therefore do not find any infirmity in the order of Ld. CIT(A) and accordingly ground no. 3 raised by the revenue is dismissed. Addition on account of on money received upon sale of flats - HELD THAT:- As no addition can be made on the basis of doubt unless there is material to prove the receipt of on-money by the assessee. Similarly the addition made on the basis of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4)(iii) without considering the facts that since filing of the Application on 15.12.2006 under the I.P scheme. 2002 before the concerned Authority all the requisite papers documents were periodically filed and all the formalities were observed to obtain the approval u/s 801 A(4)(iii) and in that event the assessee company cannot be legally deprived of the said deduction merely due to the failure of the CBDT to issue the Notification for no fault of the assessee. 3. For that in view of the facts and circumstances of the case the Ltd. CIT(A) was wholly wrong unjustified in directing the A.O to verify the TDS data in the ITD system and allow, if found correct, the assessee's claim of TDS of Rs. 9,68,352/- which was not allowed in the assessment, instead of issuing a clear direction to the A.O to straightway allow the TDS credit of Rs. 8,30,070/- at least on the basis of the TDS certificates and other relevant papers filed before him identifying which particular TDS amounts were disallowed in the assessment. 4. For that in view of the facts and circumstances and your petitioner being fully eligible for MAT credit of taxes of the earlier assessment years ( i.e A.Ys 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly produced in respect of Salarpuria G.R. Tech Park, Phase-II. For the sake of ready reference the details of deductions u/s 80IA and 80IB of the Act during the year as given below: Deduction u/s 80IA Salarpuria G.R. Tech Park, Phase-II, Deduction u/s 80(IA) Rs. 25,01,24,225/- Salarpuria Touchstone Deduction u/s 80(IA) Rs. 6,81,07,687/- Deduction u/s 80IB Salarpuria Sanctity Deduction u/s 80(IB) Rs. 48,89,64,524/- Salarpuria Serenity Deduction u/s 80(IB) Rs. 8,57,67,540/- Accordingly the AO came to the conclusion that deduction of Rs. 6,81,07,687/- as claimed u/s 80IA of the Act in respect of Salarpuria Touchstone cannot be allowed in absence of the notification of CBDT and consequesntly the same was rejected by the AO in the assessment framed u/s 143(3) of the Act vide order dated 26.03.2013. 3.2. The aggrieved assessee assailed the order of AO before the Ld. CIT(A). The Ld. CIT(A) dismissed the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80IA(4) of the Act of Rs. 6,81,07,687/- in respect of Salarpuria Touchstone park cannot be allowed. However, in case the Hon ble High Court decides the issue favorably and the project is notified in future by the competent authority , then the assessee may approach the AO for grant of relief/deduction 80IA(4) of the Act and the AO will be bound to amend the order accordingly. Subject to above observations, this issue is decided against the assessee. Accordingly, ground nos. 1 2 are dismissed with the above observations. 3.4. The issue raised in ground no. 3 is against the order of Ld. CIT(A) not allowing the relief in respect of TDS of Rs. 1,38,282/- being the short credit allowed by the AO by restoring the issue back to the file of AO with the direction to allow the TDS on the basis of TDS certificates. 3.5. The facts in brief are that the total TDS claimed by the assessee in the return of income was Rs. 9,68,352/- whereas the AO has allowed the credit of TDS to the tune of Rs. 8,30,070/- thereby claim has been short allowed by Rs. 1,38,282/-. The Ld. CIT(A) has restored to the issue back to the file of AO to examine and allow the claim on the basis of TDS certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such order u/s 143(3) had merged with the order so passed u/s 153A/ 143(3) and in view of the facts and in the circumstances it may be held accordingly. 4. Without prejudice to Grounds No. 1, 2 3 above, the Ld. CIT(A) erred in not appreciating the fact and the law that since the order so passed u/s 143(3) was unabated, no addition could have been made in the order u/s 153A/ 143(3) and the Ld. CIT(A) s vague direction to the AO is bad in law and in view of the facts and in the circumstances it may be held accordingly. 5. Without prejudice to Grounds No. 1, 2, 3 4 above, the Ld. CIT(A) erred in not directing and not adjudicating himself on the deduction u/s 80IA(4)(iii) for Rs. 6,81,07,687/- on the Industrial Park named Salarpuria Touchstone and such action of the Ld. CIT(A) is bad in law and in view of the facts and in the circumstances it may be held accordingly. 6. Without prejudice to Grounds No. 1, 2, 3 4 above, the Ld. CIT(A) erred in not adjudicating on the disallowance of Rs.1,15,630/- on account of membership, subscription donation and in view of the facts and in the circumstances such action of the Ld. CIT(A) is bad in law and in view of the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the adjudication in the appeal order passed as a result of original order u/s 143(3), therefore the AO has not made any fresh addition. Further on the issues on which AO has made fresh addition the assessee has been granted relief in this order. Therefore, in my view there is no need to adjudicate these grounds are hereby dismissed. 4.4. The Ld. A.R vehemently submitted before us that the Ld. CIT(A) has grossly erred by not deciding the legal/jurisdictional issue raised by the assessee qua the authority of AO to make additions in an unabated assessment year on the date of search. The Ld. A.R. submitted that the instant assessment has already attained finality vide order dated 26.03.2013 passed u/s 143(3) of the Act whereas the search was conducted on 15.03.2016. The Ld. A.R. ,on the basis of these facts, submitted that the assessment has not abated on the date search and therefore in order to make additions in an unabated assessment there have to be incriminating searched materials found during the course of search otherwise the AO has no jurisdiction to make any such additions. The Ld. A.R. in defense of his arguments relied on the following decisions: a) Veerprab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down in various decisions as cited by the assessee s counsel supra. After carefully analyzing the facts of the acts and after the perusal of assessment order, we find that there is no reference at all by the AO to any such incriminating material found during search. The various additions were undisputedly made on the basis of observation of the AO during assessment proceedings for which were no incriminating materials found during search. The additions made inter alia include disallowance u/s 14A, disallowance of interest on service tax TDS , disallowance of donation , membership and subscription and loss on sale of fixed assets etc. the case of the assessee is squarely supported a series decisions as decided by various judicial forums which have laid down the same ratio namely PCIT vs. Meeta Gutgutia (supra), CIT vs. Kabul Chawla , and CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. Under these facts and circumstances and respectfully following the ratio as laid down in the above decisions, we hold that the additions have been made without any incriminating material found during the course of search and, therefore cannot be sustained. The legal and jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f deduction u/s 80IA(4)(iii) for the project Salarpuria Touchstone is bad in law especially in absence of incriminating material and in view of the facts and in the circumstances it may be held accordingly. 5. For that your petitioner craves the right to put additional grounds and / or to alter / amend / modify the present grounds at the time of hearing. 6.2. The issues raised in ground nos. 1 2 are not pressed at the time of hearing and therefore the same are dismissed as not pressed. 6.3. The issue raised ground no. 3 4 is against the order of Ld. CIT(A) confirming the action of AO in not granting the deduction u/s 80IA(4)(iii) in respect of industrial park known as Salarpuria Touchstone . We have already decided the identical issue in ITA No. 2094/Kol/2017 for AY 2010-11 wherein dismissed the appeal of the assessee on this issue with a rider that in case the writ petition pending before the Hon ble Karnataka High Court is decided favourably , the assessee can approach the AO for grant of deduction u/s 80(IA)(4) of the Act and AO is bound to amend the order accordingly. Consequently, the ground nos. 3 4 are dismissed with the above observations. The appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act as interest was not incurred for the purpose of business wholly and exclusively but to earn dividend and long term capital gain on shares. Accordingly the AO calculated the proportionate interest at Rs. 10,05,218 to be disallowed u/s 14A r.w.r. 80D2(ii) and added the same to the income of the assessee. 8.3. The Ld. CIT(A) allowed the appeal of the assessee on the ground that there is no exempt income during the year by following the decision of Hon ble Calcutta High Court in the case of REI Agro Ltd. in 144 ITD 141 (Cal) whereby the Hon ble Court has affirmed the decision of Hon ble Tribunal reported in 144 ITD 141 and also the decision of the Hon ble Apex Court in Maxopps Investments Ltd. 402 ITR 640 (SC). 8.4. After hearing the rival parties and perusing the material on record. We find that during the year the assessee has not earned any exempt income. The ld. Counsel of the assessee took us through the audited balance sheet for the year ended on 31.03.2014 to show that there is no exempt income during the year. Besides the Ld. Counsel of the assessee also argued that sum of the share capital reserve and surplus are far more than the investments made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Rs. 4,573/- on account of stock written off during the year which were not allowable as the assessee has failed to prove the claim with documentary evidences. 8.11. The Ld. CIT(A) allowed the appeal of the assessee on the basis of details/evidences filed by the assessee. The Ld. CIT(A) noted that the amount written off by the assessee were qua the rent which was not realized by the assessee and has been written off. Similar was position with regards to stocks which were not serviceable and were also written off during the year. 8.12. After hearing the rival parties and perusing the material on record, we note that sundry balances were written off by the assessee including unserviceable stocks to the tune of Rs. 2,36,454/- which were apparently arising in normal course of business or pertaining to amounts receivable and therefore the assessee is entitled to charge the same against the profits during the year in terms of ratio laid down in T.R.F Ltd. reported in 323 ITR 397 (SC). We therefore do not find any infirmity in the order of Ld. CIT(A) and accordingly ground no. 3 raised by the revenue is dismissed. 8.13. The issue raised in ground no. 4 by the revenue is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uments and sample customer application related to Sattva Gold as to why the on -money should not be calculated and added to the income of the assessee. The show cause was replied by the assessee by filing written submissions objecting to be addition on account of on-money as there were no incriminating material found during search relating to the assessee s project and whatever was documents seized by the search team were belonging to other group companies and there can be no addition on the basis of extrapolation ,conjectures and surmises. The contentions of the assessee did not find favour with the AO and he calculated the amount of on-money at Rs. 72,93,646/- by working out average sale price and after making some allowances at 5 to 10% as given on page no. 35 of the assessment order and added the same as unexplained cash credit to the income of the assessee in the assessment framed u/s 143(3) r.w.s. 153A of the Act. 8.15. In the appellate proceedings, the Ld. CIT(A) deleted the addition by observing that nothing incriminating was found during search relating to assessee s projects and in respect of incriminating documents found in respect of group companies , the group has m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded of various employees during the search which proved that the assessee has been receiving on-money on sale of flats. The Ld. D.R. argued that the AO has analyzed the information in the form of seized documents, statements recorded during the search and sample application form of Shri William Joseph Subash as well as incentive payments to the employees who effected sales in the market and came to the conclusion that the assessee has received on-money. The Ld. D.R. stated that it is apparent from the sale agreement entered into by the assessee in respect of Melody project that they were glaring variations in the sale deeds and therefore the AO has rightly made the addition on the basis of calculation chart as appended on page 35 of the assessment order. The ld DR argued that the Ld. CIT(A) while allowing the relief to the assessee has only relied on the theory that these additions were based upon extrapolation, surmises and conjectures whereas this is not so as the AO has analyzed all these documents. The ld. D.R also referred to the sample application form in respect of Sattva Gold Project which related to Shri William Joseph Subash and submitted that there were lot of overwr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and its income belonged to Salarpuria Developers Pvt. Ltd. which is the group company. The ld AR stated that on further on a perusal of said form it can be seen that there were minor alterations which same could not be presumed as incriminating materials in any manner more so in the hands of the assessee and therefore cannot be held to be incriminating material in any manner. Similarly on page no. 6, the AO referred to the sales incentive paid to various dealers/brokers but again no particular material/document has been brought on record which testified the fact of assessee having received on-money in respect of Melody project. The Ld. A.R. submitted that the AO only referred to cash found in the various entities at the time of search however overlooked the fact the said cash belonged to those group companies and on the basis of said cash and has extrapolated on money in the hands of the assessee. The Ld. A.R. referred to page 27 to 31 where the AO has reproduced the statement of Managing Director of assessee company wherein Mr. Bijay Kumar Agarwal offered Rs. 55 crores in various group companies and not in the assessee company. The Ld. A.R. then referred to page no. 35 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made a surrender of Rs. 55 crores in various group companies which was duly offered to tax by filing a settlement petition which has been accepted by the settlement commission. Needless to say that the said surrender was made having regards and having considered the material found during the course of search. The AO while making the addition on account of on-money has referred to general statement made by the employees and managing director and also a sample application form of Sattva Gold Project which was extracted by AO on page 25 of assessment order which was overwriting and having cuttings on the amounts received by the assessee but it is also undisputed that the said project did not belong to the assessee and belong to Salarpuria Developers pvt. Ltd. and has been referred to while making the assessment of the said group companies and necessary addition has been made on the basis of said sample form. The Ld. A.R. referred to the incriminating material as referred in the assessment order and explained that the said document did not contain anything pertaining to assessee. The Ld. A.R. referred to the Panchanama prepared the name of Sattva Builders Pvt. Ltd. and Sattva Realter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed earlier, we are inclined to uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue. 8.19. The assessee has filed cross objection supporting the order of Ld. CIT(A) on various issues on which the Ld. CIT(A) has allowed the appeal. Since we have dismissed the appeal of the revenue therefore the cross objection filed by the assessee becomes infructuous and is accordingly dismissed. 9. Now we shall adjudicate the Revenue s appeal in IT(SS)A No. 66/Kol/2019 for 2015-16 and assessee s cross objection in C.O No. 44/Kol/2019 for AY 2015- 16. 9.1. The issue raised in the various grounds of appeal by the revenue are similar as decided by us in IT(SS)A No. 65/Kol/2019 for AY 2014-15. Accordingly our finding in IT(SS)A No. 65/Kol/2019 would mutatis mutandis apply so this appeal of the revenue is dismissed. The cross-objections raised by the assessee supporting the order of Ld. CIT(A) on various issues which have been challenged by the revenue.Since we have dismissed the appeal of revenue and cross objection filed by the assessee becomes infructuous and is accordingly dismissed. 10. Revenue s appeal in IT(SS)A No. 67/Kol/2019 for AY 2016-17 and assessee s Cros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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