TaxTMI 
TaxTMI 
2012 (10) TMI 851
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....xpenditure had been incurred for the purpose of assessee's business. 3. On the facts and in the circumstances of the case, the Ld CIT(A)- X, New Delhi has erred and on facts in confirming the addition on account of interest charged u/s 234A, 234B & 234C of Income Tax Act, 1961 when the assessee had not committed such default. The action of the Ld CIT(A)-X is illegal and bad in law. 4. That no reasonable opportunity of hearing was granted to the assessee. 5. The appellant craves leave to add, amend, modify or alter grounds of appeal before the appeal is decided. 2. The brief facts of the case are that as per assessment order, the assessee is engaged in the business of real estate and it filed its return of income on dated 21.11.2003 declaring an income of Rs.86,966/-. The case was selected for scrutiny. During assessment proceedings, the Assessing Officer noted that assessee had sold property at 193-Jor Bagh, New Delhi on 25.3.2003 and it had declared the profit earned from it as business income. The Assessing Officer also noted that assessee had purchased the said property for its development and purchase and further sale and for this purpose it had entered into an agre....
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....ate preceding year against claim of Rs. 2 lakhs during the year under consideration. The Assessing Officer further noted that amount of claim was on higher side keeping in view the fact that assessee had only one property and that was sold to only one party. 3. Dissatisfied with this order, the assessee filed appeal before Ld CIT(A) and submitted as under:- 1. That the Assessing Officer was not justified in making disallowance of Rs.52,60,758/- of expenditure incurred by the appellant on construction and improvement of basement and ground floor as per the requirement of the purchaser Shri Amit Sibal. 2. That the accounts of the assessee were duly audited and all the vouchers were verified by the auditors and audit report in form, No.3CD was also enclosed with the return and the auditors had not qualified the balance sheet & P&L Account. 3. That copy of MOU with M/s Corn Hills Promoters Pvt. Ltd. and copy of sale deed were duly produced before Assessing Officer along with regular books of accounts but no defect was pointed out by the Assessing Officer. 4. The Ld CIT(A) forwarded the above submissions to Assessing Officer in the light of fact that appellant had contend....
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....o double benefits of these bills/vouchers/invoices. The Ld AR also submitted that request for cross verification of the supplier was made to Assessing Officer but he did not examine the suppliers. The Ld AR also filed an affidavit of the director in respect of expenditure incurred and also filed a letter from Shri Amit Sibal showing a request by him to conduct renovation and improvement in the building. In respect of the name of Nahar Theatre appearing on the bills, the ld AR submitted that one of the main project was carried out by M/s Nahar Theatre for a cinema-cum-commercial complex and the contractors who were supplying the material to the appellant for the reconstruction/improvement of building at Jor Bagh, New Delhi and at Nahar Theatre were generally common and major requirement of material was at Nahar Theatre. The supplier had supplied the material as per requirements of various sites. The Ld AR further submitted that by mistake bills were raised by suppliers in the name of Nahar Theatre which were later on corrected and accordingly the payments were made by appellant company for the material supplied for reconstruction/improvement of the building at Jor Bagh. With regard ....
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....indicating that they had no dealing with the assessee he argued that Assessing Officer should have examined them. Our attention was invited to page 117 of paper book where a letter from assessee to Assessing Officer was placed in which the assessee had requested for examination of suppliers. Reliance was placed on the judgment in the case of Commissioner of Income-tax v. Real Time Marketing P. Ltd. [2008] 306 ITR 35 (Del). On the basis of above judgment, the Ld AR argued that before arriving at any conclusion, Assessing Officer should have examined the suppliers. 9. On the second ground of appeal, the Ld AR argued that Assessing Officer had made the addition arbitrarily and without any observation. Reliance was placed in the case of State Of Orissa. v. Maharaja Shri B. P. Singh Deo 76 ITR 690. 10. On the other hand, Ld DR submitted that books of accounts were rejected. No evidence of completion certificate was furnished and assessee had failed to show as to for what purposes the expenses were incurred. He further argued that goods were received at Nahar Theatre and there was no proof of transferring the material to Jor Bagh. With regard to argument of Ld AR that the expend....
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....t forfeiting which always remains as the standard condition in any agreement to sell and then by agreeing to sell the same to another buyer after a period of about five months at a much lower net consideration after considering the alleged claim of expenses. This situation does not arise in reality and is against the normal human behavior. 13. The Ld AR has not demonstrated any particular defect in the property which may have prompted the assessee to sell it at such a discounted price as compared to original agreement to sell with Smt. Kavita Agarwal. Moreover, despite various requests by the Assessing Officer and despite issue notice u/s 131 to Smt. Kavita Agarwal, neither Smt. Kavita Agarwal appeared nor any effort was made by the assessee for her appearance before the Assessing Officer. 14. The assessee did not submit the original invoices of construction alleged to have been done on the property. It had submitted only photo copy of invoices and most of the invoices were in the name of Nahar Theatre Pvt. Ltd. and name of the assessee was written after cutting the name of Nahar Theatre Pvt. Ltd. 15. From the details of invoices as placed at page 11 to 13 of paper book, t....