TaxTMI 
TaxTMI 
2015 (5) TMI 351
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.... in the case of M/s Green Valley Housing and Land Development Pvt. Ltd. In the assessee's appeal in ITA No. 1771/Del/2013. Following grounds have been raised: "1. That on the facts and circumstances of the case and in law the CIT(A) erred in rejecting appellant's contention that assessment order made by Assessing Officer was bad in law and void ab-initio on the ground that it ought to have been made u/s153C of the Income Tax Act, and not, as was done u/s 143(3) of the Income Tax Act. 2. That without prejudice, on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the action of the Assessing Officer in relying upon the material seized in the case of search on M/s BPTP group of cases despite:- i) that such material had no nexus/relevance with the case of the appellant and, ii) that, the CIT(A) himself holding that such material did not belong to the appellant. 3. That on the facts and circumstances of the case and in law the CIT(A) erred in holding to quote, ' that seized documents definitely prove that interest is paid on PDC' despitei. that the seized record on the basis of which above finding was given, even according to his own findin....
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....iced that a similar issue has already been adjudicated by this Bench of the Tribunal vide Para 10 of the aforesaid referred to order wherein relevant matters has been given as under:- "10. The above facts stated by the Ld. Counsel during assessment proceedings have not been found to be incorrect or non-genuine. As per the collaboration agreement, the assessee was to purchase the land for and on behalf of CWPPL and whatever was the purchase price including the additional payment was debited to CWPPL and the assessee only received fixed remuneration i.e. Rs. 35,000/- per acre. Thus, we agree with the contention of the Ld. Counsel that the assessee has not claimed any deduction in respect of cost of the purchase of the land, whether original or additional payment. When the cost of the land, as well as additional payment is not claimed by the assessee as deduction, the question of any disallowance u/s40A(3) or otherwise in the case of the assessee does not arise. We, therefore, delete the entire disallowance made by the Assessing Officer u/s 40A (3) as well as additional payment." 6. Since, the facts in the case of the assessee are similar to the facts involved in the case of M/s....
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.... of Assessing Officer should be sustained. 9. We have carefully considered the submissions of both the sides and perused relevant material placed before us. The assessee has produced the collaboration agreement before the Assessing Officer and has submitted as under:- "Based on the aforesaid Agreement the assessee purchased land for which the (M/s Countrywide Promoters Pvt. Ltd.) has reimbursed all costs and expenses with respect to the acquisition of the said land and also in conformity with the Collaboration Agreement the assessee has received fees calculated @ Rs. 35,000/- per acre, which is duly credited to the Profit and Loss Account as the income." 10. The above facts stated by the Ld. Counsel during assessment proceedings have not been found to be incorrect or nongenuine. As per the collaboration agreement, the assessee was to purchase the land for and on behalf of CWPPL and whatever was the purchase price including the additional payment was debited to CWPPL and the assessee only received fixed remuneration i.e. Rs. 35,000/- per acre. Thus, we agree with the contention of the Ld. Counsel that the assessee has not claimed any deduction in respect of cost of the purchas....
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....r the Assessment Year 2008-09. 14. In his rival submissions, the ld. DR although supported the order of the AO and could not controvert the aforesaid contention of the Ld. Counsel for the assessee. After considering the submissions of both the parties it is noticed that an identical issue having similar facts was involved in the case of ACIT Vs Pricison Infrastructure Pvt. Ltd (Supra) wherein by following the earlier orders of the ITAT Bench 'C' New Delhi, the similar findings given by the Ld. CIT(A) as have been given in the impugned order, had been confirmed by observing in Para 7 of the aforesaid order dated 09.01.2015 which read as under:- "7. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that the facts of the present case are identical to the facts involved in the case of M/s IAG Promoters and Developers Pvt. Ltd. (supra). The said company is a sister concerns of the assessee and belonged to the same group companies of BPTP Group to which the assessee belongs. In the said case vide order dated 31/10/2014 the ITAT Bench 'C', New Delhi in ITA Nos. 1674/Del/2013 & 1765/Del/2013 for the a....
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.... the assessment year 2006-07. The ld. DR although supported the order of the AO but could not controvert the aforesaid contention of the Ld. Counsel for the assessee. 18. After considering the submissions of both the parties and perusing the material available on the record, it is noticed that a similar issue was involved in the aforesaid referred case of M/s West Land Developers Pvt. Ltd. Vs ACIT, wherein the relevant findings has been given in paras 12, 12.1 12.2 & 13 which read as under:- "12. Referring to the order it was submitted that the AO makes a passing reference to search on BPTP Ltd. and its group companies taking note of the fact that no search was conducted on the assessee and proceeded to make a disallowance u/s 37 ignoring the fact that no such claim was made by the assessee as these were not routed through the P&L A/c of the assessee and were also like the earlier payment were made to the claimants of the land holdings and for the assessee these were re-imbursements. The issue has been considered by the CIT(A) in paras 5.3.1 to paras 5.3.8 however he has restored the matter with certain directions referring to facts which were not relatable to the assessee. A....
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....40A(3) has held that the payment for purchase of land was assessee's expenditure (kindly see para 5.3.1). He has given directions to the AO to deal with the admissibility of additional payment in para 5.3.8 of his order. 6.2. The finding of the CIT(A), that cost of land is assessee's expenditure is challenged for identical reason as in Ground No-4 (supra). It is contended that cost of land cannot be considered in the hands of the assessee and resultantly the directions contained in para 5.3.8 are non-issue in the hands of the assessee. IT is prayed that the assessee's contention be allowed, viz that no disallowance u/s 37(1) can be made in the hands of the assessee." 12.1. In the said background it was submitted that these additional payments made to the parties which admittedly have not been routed as an expense in assessee's P&L A/c has been wrongly added as an addition in assessee's hands. In this background it was contended that since cost of the land as assessee's expenditure has been assailed in Ground No-4 for similar reasons additional payments for the purchase of the land reimbursed by CWPPL cannot be disallowed u/s 37(1) in the hands of the assessee as no expenditur....
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.... CIT(A) suffers from factual errors and legal infirmity. Firstly, in clauses (ii) and (iii) of para 5.2 he has referred to some submissions allegedly made by the assessee. No such submissions were made. Secondly, yet again what he has stated in paras 5.3.3, 5.3.4, 5.3.5, & 5.3.6, nothing emerges from order of the Assessing Officer nor from any reply by the assessee. Unfortunately, the CIT(A) has mixed up the facts from some of his order(s) in other appeals. (iv) The CIT(A) in para 6.3 says, to quote, "Undoubtedly AO has utilized the documents seized from the premise of M/s BPTP Ltd and group companies. However, assessment order nowhere mentions that any part of the seized material belong to appellant company". The CIT(A) therefore himself gives a finding that no material seized belonged to the assessee and was utilized in making the assessment. (v) However, notwithstanding having stated as above, the CIT(A) justifies in para 6.4, the utilization of alien material seized from a different assessee in the hands of an assessee in making assessment u/s 143(3) by relying on the judgment in Pooran Mal vs. CIT 93 ITR 505 (SC). The CIT(A) has misread this judgment. There is no q....
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....qua Ground No-4 would fully apply here also. The difference that here the entire amount is added u/s 37 as opposed to part of the expenditure disallowed u/s 40A(3) is not so material as the finding is arrived at taking cognizance of the material fact that herein also no such claim of expenditure has been made. The fact that the additional payments were warranted in order to avoid potential disputes amongst the claimants of the land holding which have been passed through to the land holders from generation to generation wherein there may be informal arrangements of ownership and or the payments were for commercial expediency to facilitate peaceful possession and registration of the land holding; where by the time Registry was made the landholders felt a higher payment was necessitated due to increase in value are issues which are not required to be addressed in the present proceedings. GroundNo-3 on the facts available on record considering the judicial precedent referred to in detail while deciding Ground No-4 has to be decided in favour of the assessee. Ground No.3.1 and 3.2 as such need not be adjudicated in the present case. Qua Ground No-2 the observation and findings to the ex....
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....on account of advance received by other company of BPTP group. The assessee also belonged to the said group and Shri Kabul Chawala is having substantial interest in all the companies. The AO found that the assessee received advance from M/s Countrywide Promoters Pvt. Ltd. (a company of BPTP group) and treated the advance to the extent of accumulated profit of Rs. 51,65,726/- as deemed dividend u/s 2(22)(e) of the Act. The contention of the assessee before the AO was that the amount was an advance for the purpose of suitable land and that the said amount was shown in the balance sheet as current liability. However, the AO did not find merit in the submissions of the assessee and made the impugned addition. However, the ld. CIT(A) deleted the addition by following the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Ankitek Pvt. Ltd. (2011) 11 Taxman.com 100 wherein at paras 25 to 27 it has been held as under: "25. Further, it is an admitted case that under normal circumstances, such a loan or advance given to the shareholders or to a concern, would not qualify as dividend. It has been made so by legal fiction created under Section 2(22)(e) of the Act. We h....
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....ssessee had shown the impugned amount in its balance sheet as current liability which was received as an advance against the purchase of suitable land. The AO although invoked the provisions of Section 2(22)(e) of the Act but could not bring any material on record to substantiate that the amount in question was a loan or deposit and not the advance received from associates concern M/s Countrywide Promoters Pvt. Ltd.. We, therefore, by keeping in view the ratio laid down by the Hon'ble Jurisdictional High Court in the aforesaid referred to case of CIT Vs. Ankitek Pvt. Ltd. (supra), do not see any valid ground to interfere with the findings of the ld. CIT(A). In that view of the matter, we do not see any merit in this ground of the departmental appeal. 23. Now, we will deal with the cross appeals relating to the M/s Green Park Estate Pvt. Ltd. First we will deal with the departmental appeal in ITA No. 1672/Del/13 for the A.Y 2007-08. Following grounds have been raised in this appeal: "1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 17,89,219 out of total addition of Rs. 35,78,438/-, made by the Assessing Officer on acco....