Tribunal dismisses Revenue's appeal on interest and Stamp Duty Act violations

The Revenue's appeal challenging the deletion of additions on account of interest on post-dated cheques (PDCs) paid outside the books of account and additional payments violating the Stamp Duty Act was dismissed by the Tribunal. The Tribunal upheld the CIT(A)'s decisions, directing the Assessing Officer to compute interest on PDCs after six months from the sale date and confirming that the additional payment for land purchases was not in violation of the Stamp Duty Act. The Tribunal found previous Tribunal orders in favor of the assessee and dismissed the Revenue's appeal in its entirety.

---

---

Issues Involved:
1. Deletion of addition on account of interest on post-dated cheques (PDCs) paid outside the books of account.
2. Deletion of addition on account of additional payment in violation of the Stamp Duty Act, 1899.

Detailed Analysis:

Issue 1: Deletion of Addition on Account of Interest on PDCs Paid Outside the Books of Account
The Revenue challenged the deletion of an addition of Rs. 3,41,08,967/- made on account of interest on PDCs paid outside the books of account. The assessee, part of the BPTP Group engaged in real estate development, was found during a search operation to have paid interest in cash to land vendors for the period between the sale deed execution and PDC encashment. This interest payment was not recorded in the books of account. The Assessing Officer (AO) added Rs. 3,30,81,969/- as unaccounted interest paid by the assessee, which was later increased to Rs. 4,13,41,937/- through a rectification order. The CIT(A) partly allowed the appeal, directing the AO to compute interest after six months from the sale date, resulting in a deletion of Rs. 3,34,75,648/-.

The Tribunal noted that the issue was covered in favor of the assessee by previous Tribunal orders, including in the case of M/s. Impower Infrastructure Private Limited and IAG Promoters and Developers Private Limited. It upheld the CIT(A)’s finding, confirming that interest was indeed paid on PDCs but should be computed after six months from the sale deed date. The Tribunal dismissed the Revenue's appeal on this ground, following its earlier decisions.

Issue 2: Deletion of Addition on Account of Additional Payment in Violation of the Stamp Duty Act, 1899
The Revenue also challenged the deletion of an addition of Rs. 6,80,15,748/- made under Section 37 of the Income Tax Act on account of additional payments for land purchases, allegedly violating the Stamp Duty Act. The AO disallowed Rs. 6,88,71,998/- but the CIT(A) accepted the assessee's contention that there was no violation of the Stamp Duty Act. The CIT(A) directed the AO to verify stamp paper and court fee charges, leading to the deletion of Rs. 6,80,15,748/-.

The Tribunal found that the issue was covered in favor of the assessee by previous Tribunal orders, including in the case of Impower Infrastructure Private Limited and Westland Developers Private Limited. It confirmed that the payment for acquiring land was not an expense claim but part of the land cost. The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)’s decision.

General Grounds:
The Tribunal found the general grounds raised by the Revenue to be infructuous and dismissed them without further adjudication.

Conclusion:
The appeal filed by the Revenue was dismissed in its entirety, with the Tribunal upholding the CIT(A)’s decisions on both the deletion of the addition on account of interest on PDCs and the additional payment in violation of the Stamp Duty Act. The Tribunal's order was pronounced on 30th June 2021.

---