2014 (12) TMI 216

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.... company has made only part payment of sale consideration to the seller at the time of executing sale deed and balance payment is made by way of post dated cheques (PDCs). During assessment, the Assessing Officer obtained details of such PDCs given at the time of registration to the seller and obtained date of encashment and applied rate of 15% interest per annum paid for the period from sale deed to date of encashment, on the amount of PDCs on the basis of seized material. The Assessing Officer gave the finding in the assessment order that total such interest payable comes to Rs. 5,06,625/- on PDCs and such interest is paid in cash out of books of account. Therefore, such interest is added as unaccounted/unexplained expenses. Learned CIT(A) gave the following direction for the recalculation of the interest on PDCs:- "5.4 Conclusion :- 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 o....

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....rywide Promoters Ltd. or in stray case by some other companies. Assessing Officer has applied the case of Eusuf Ali for applying interest on PDCs for all companies of BPTP Group for all assessment year under consideration. Ld AR has tried to differentiate the above cited case on facts. In my view, as interest payment on extension of period of PDCs are established on numerous seized documents. A trend is established for the group as the overall management is controlled by one person Sh. Kabul Chawla and activities of all companies are interrelated. If it is not possible to work out the extension of PDCs in each case then A.O. is directed to recompute interest on PDCs after six months from 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. This view is formed on the basis the statement of Sh. Chhotu Ram 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 Ramvati Beero 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 mon....

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....000 per acre from CWPPL which is over and above the cost of land. In para 3.1 of the assessment order, it is mentioned that BPTP Group has made more than Rs. 45.02 crores to the vendors of land which is over and above the sale consideration and these payments have been made much after the execution of sale deed. During the year under consideration, the assessee company has made following additional payment:- Name of the Payee Amount(Rs.) Date of Payment Evidence Ranjeet Singh 30,38,438 01-08-2007 Affidavit Amar Chand 30,38,438 06-08-2007 Affidavit Baljeet Singh 20,27,813 11-08-2007 Affidavit Satyapal 10,13,906 01-08-2007 Affidavit Kuldeep 10,13,906 06-08-2007 Affidavit Total 1,01,32,501 8. The Assessing Officer, after considering the assessee's explanation, disallowed the payment of Rs. 1,01,32,501/- on the ground that there is no basis for making of additional payment and additional payment is not to be allowed under the specific provisions of Section 37(1). He opined that the additional payments are in clear violations and contraventions to the law and rules and regulations for payment of stamp duty. The CIT(A) partly accepted the assessee's contention and....

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....rned counsel that when no expenditure is claimed by the assessee, the question of disallowing the same by the Assessing Officer does not arise. It was explained by the learned counsel that the assessee was purchasing the land for and on behalf of another company of BPTP Group viz., M/s Countrywide Promoters Pvt.Ltd. and whatever payment is made by the assessee to land owners or their relatives for purchase of land was debited by the assessee to the account of CWPPL and the payment for purchase of land whether as per stamp duty or additional payment has not been claimed as an expenditure by the assessee. We find that on this factual aspect, there is neither any finding by the CIT(A) nor by the Assessing Officer. The ITAT in the case of M/s Westland Developers Pvt.Ltd. (supra) has also accepted the principle that when the expenditure is not claimed by the assessee, the same cannot be disallowed. In fact, there cannot be any dispute to the said legal proposition. However, the question still remains whether such payment i.e. additional payment made by the assessee to land owners or their relatives is claimed by the assessee as a deduction or not. We, therefore, set aside this matter to....