TaxTMI 
TaxTMI 
2014 (6) TMI 442
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....his case, according to the ld.representative, the assessment was framed u/s 153C of the Act. Therefore, the assessment order is null and void. According to the ld.representative, during the year under consideration, the assessees company purchased land and incurred expenditure for filling up the land with soil. The expenses for filling up the land was claimed as deduction. According to the ld.representative, the claim of the assessees is supported by plan, voucher, estimate, etc. The seized document includes the vouchers for payment for filing up the land. According to the ld.representative, the total expenditure was Rs.3,46,60,990; however, the assessing officer disallowed Rs.3,13,56,840. The only reason for disallowing the claim is that the vendors of the land also claimed expenditure for filling up the land, therefore, the assessees could not have spent so much of money for filling up the land. According to the ld.representative, it is not the case of the revenue that no expenditure was incurred by the assessees for filling up the land. Referring to the reply given to the CIT(A), the copy of which is available at page 185 of the paper book, the ld.representative submitted that t....
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....there is no need for mentioning this clause for filling up the land by the assessees in the agreement to sell. The ld.representative further submitted that during the course of assessment proceedings, the assessees has also filed a detailed report of survey of the property estimating the filling requirements from LAN-DEC ENGINEERS the copy of which is available at page 13 of the paper book. According to the ld.representative, both the authorities below failed to make any reference to this document. The ld.representative further submitted that a photograph was taken before filling up the land and after filling up the land. The assessing officer as well as the CIT(A) has not considered these documents while rejecting the claim of the assessees. 5. In the post search enquiry, the persons, who were engaged for land filling were examined and statements were recorded from them. According to the ld.representative, the persons engaged for the land filling have produced their respective bank account showing the receipts from the assessees for land filling and confirmed that the expenditure was incurred by the assessees. Even though these evidence were available with the Investigation Win....
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....ture incurred by the assessees for purchase of the red soil and the payments made to the contractor is available on the search material, therefore, there is a presumption that the assessees has incurred the expenditure. It is for the revenue to rebut the presumption if at all they have any material to suggest that the assessees has not incurred such expenditure. According to the ld.representative, when there is an agreement between the assessees and the vendor of the land which clearly shows that the assessees has to fill up the land within a specified period, the lower authorities are not justified in saying that the cost was incurred by the erstwhile owner before the assessees purchased the land. Referring to the copy of the remand report, more particularly paragraph 10, the ld.representative submitted that the assessing officer is not correct in saying that the search was conducted before purchase of the property by the assessees. According to the ld.represetnative, the very purpose of conducting the search is to find out the correctness of the claim of expenditure for land filling. According to the ld.representative, only after ascertaining the approximate expenditure for filli....
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....representative for the assessees submitted that as per the copy of the order served on the assessees, the assessment order was said to be made u/s 153C r.w.s. 153A of the Act. However, when the assessees contended that no order could be passed u/s 153A, the department has produced another copy of the order said to be passed u/s 153C of the Act. According to the ld.representative, inter-changing of section and issue of notice under wrong section are not curable defect u/s 292B of the Act. 10. Referring to the panchanama and the assessment order, the ld.representative submitted that panchanama clearly indicates that the warrant was in the case of Damac Holdings Pvt Ltd. However, as per the assessment order, the search warrant was in respect of Mohiyuddin and searched place is the assessee company. Therefore, according to the ld.representative, it is not clear in whose hand the search was initiated. 11. Coming to the land development expenditure, the ld.representative for the assessees submitted that the assessing officer rejected the claim of the assessees to the extent of Rs. 6,34,79,700 on the ground that the vendor of the land also claimed expenditure to the extent of Rs.18,....
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....spective directors have taken a decision to acquire the land before formation of the company. According to the ld.representative, the expenditure incurred by the assessees is only after the agreement entered into for purchase of the property by the respective directors. According to the ld.representative, the assessees company has also entered into agreement on 16-02-2007, 14-03-2007 and 25-09-2007 for purchase of property with M/s Neptune and Blue Lagoon Real Estates Pvt Ltd. According to the ld.representative, the company, after its formation incurred the expenditure to make the land saleable condition. The assessees has explained the details of payment and the expenditure incurred to the extent of Rs.6,81,57,390. Referring to the remand report said to be filed by the assessing officer, the ld.representative submitted that the assessing officer has not considered the material available on record. The vouchers for payment of the money, the details of expenditure on day to day basis are found during the course of search operation. According to the ld.representative, the lower authority failed to consider the same. Therefore, the disallowance made by the assessing officer is not jus....
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....ons which was found in other documents. 15. Referring to the objection of the assessees on the assessment order in the case of Damac Holdings (P) Ltd, the ld.DR submitted that originally, the assessees company was assessed at Bangalore and subsequently, by an order u/s 127 for consolidated enquiry the jurisdiction was transferred to Ernakulam. According to the ld.DR, the order passed u/s 127 is not subjected to appeal before this Tribunal. Therefore, the transfer of jurisdiction from Bangalore to Ernakulam cannot be challenged before this Tribunal. According to the ld.DR, the transfer of jurisdiction was made after giving necessary notice to the assessees. Therefore, it is not correct to say that the transfer was made without following the procedure. 16. According to the ld.DR, the search was conducted on 26-03-2008 in the case of Mohiyuddin, who was the director of the company on the date of search. Merely because the designation was referred as managing director instead of director, that will not vitiate the assessment proceedings. It is only a rectifiable error. After change of jurisdiction from Bangalore to Ernakulam, the assessment has to be made by one officer at Ernaku....
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....Rs.1,32,24,240. The assessees now claims expenditure of Rs.6,29,39,746. Referring to the agreement said to be entered into between Nazir Abbas and Shri Mathew Jopseph, the ld.DR submitted that the vendor Shri Nazir Abbas agreed to level the property filled in water with red soil and clean the land making it suitable for measuring. In this case, Shri Nazir Abbas, the vendor claimed Rs.18,000 per cent. Therefore, there is no justification for claiming any further expenditure. According to the ld.DR, the assessees has claimed Rs.6,12,21,269 in respect of Rajagiri property towards development charges. According to the ld.DR, at Rjagiri, the assessees acquired 12.29 acres of land. Out of this, 7.95 acres of land was sold to two companies. The ld.DR submitted that prior to acquisition of land at Rajagiri, the assessees has already claimed Rs.1,05,73,857 as development expenses. The assessees claims that the development charges were incurred after payment of advance for purchase of the property. According to the ld.DR, nobody will incur an expenditure before completing the registration formalities. The claim of the assessees that they incurred the expenditure after paying the advance amou....
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....iving due notice to the assesseess as required u/s 127 of the Income-tax Act for consolidating enquiry / investigation. Once the authorities followed the due process for transferring the case from one city to another for the purpose of effective investigation and completion of the assessments by one assessing officer, this Tribunal is of the considered opinion that the contention of the assesseess has no merit at all. Therefore, the present assessing officer, who completed the assessment order has jurisdiction in pursuance to the order passed by the concerned authority transferring the case u/s 127 of the Income-tax Act. 20. The next contention of the assesseess is that the original assessments were made u/s 153C r.w.s. 153A of the Act and no order was passed u/s 153A of the Act. According to the ld.representative, assessments should be made only u/s 153A of the Act. The assessees have produced another copy of the order said to be passed u/s 153C of the Act in the course of the proceedings before the Tribunal. The fact remains is that the search was in the case of Shri Mohiyuddin u/s 132A of the Act and material was found with regard to the present assessees. Therefore, the pres....
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....diture incurred by both the assesseess for filling up the land, the assessing officer rejected the claim of the assesseess mainly on the ground that the vendor has already claimed a similar expenditure for filling up the land @18,000 per cent. The contention of the assessees is that seized material found in the course of search operation discloses the expenditure incurred by both the assessees and the assessing officer has ignored the seized document while rejecting the claim of the assessees. The assessing officer mainly placed his reliance on the agreement said to be executed by one Shri Naseer Abbas and the vendors. 23. We have carefully gone through the said agreement dated 07-02- 2006, the copy of which is available at page 17 of the paper book. Clause 6 of the said agreement reads as follows: "6. The schedule properties shall be measured by the parties with competent authority before execution of the sale deed as per the Re-Survey records and a sketch of the properties shall be got prepared, which shall form part of the sale deed to be executed by the Vendors in favour of the Purchaser or its nominees. The First Party also agrees to level the properti....
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....sessees have to fill up the land. Therefore, it is obvious from the agreement between the parties, the vendor has to fill up the land so as to make the land suitable for measurement by the surveyor. However, the assessees had to fill up the land and make it suitable for sale. In view of this, this Tribunal is of the considered opinion that merely because the vendors claimed Rs.18,000 per cent for filling up the land it cannot be a sufficient and reasonable cause to disallow any claim in the hands of the present assessees. 26. In the course of the assessment proceedings, the assesseess have filed estimate from the contractors for filling up the land. The contractors estimated the quantity of red earth required to fill up the land at 185604.025 cubic metre. The assessees have also plotted the land subsequently. The copies of the bank statement available on paper book and the ledger account clearly establishes the payment made by the assessees for filling up the land. The seized material discloses the payment on daily basis. The payment made was of less than Rs.20,000 to each person, therefore, the payment does not require any deduction of tax. Even though the payment was made by c....