2015 (7) TMI 662

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....wance of Rs. 50,02,425/- on account of Development expenses. In ITA No. 992/PN/2013, the assessee has impugned the order of Commissioner of Income Tax (Appeals) in confirming levy of penalty of Rs. 17,00,324/- u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 2. The brief facts of the case as emanating from records are: The assessee is a partnership firm and is engaged in sale and purchase of land. The assessee filed its return of income for the assessment year 2008-09 on 13-10-2008 declaring total income of Rs. 18,70,183/-. The case of the assessee was selected for scrutiny and notice u/s. 143(2) was issued to the assessee. During the course of scrutiny assessment, the Assessing Officer observed that the....

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....eal of the assessee. 4. Shri Prayag Jha appearing on behalf of the assessee submitted that, the assessee had purchased a piece of land on 15-05-2007 for Rs. 2,25,00,000/- and sold the same vide sale deed dated 24-10-2007 for Rs. 3,17,00,000/-. The assessee had incurred expenditure to the tune of Rs. 71,53,380/- for the development of aforesaid land. The assessee had produced all the bills/vouchers in respect of development expenditure incurred. However, the Assessing Officer rejected the same by treating them as bogus. In order to buy piece the assessee offered an amount of Rs. 50,02,425/- for tax. 5. On the other hand Shri B.C. Malakar representing the Department vehemently supported the impugned order. The ld. DR submitted that the ....

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....,17,00,000/-. The assessee claimed plot development expenses of Rs. 71,53,380/-. During the course of scrutiny assessment, the assessee was not able to substantiate expenditure to the tune of Rs. 50,02,425/-. Accordingly, the same was offered to tax. The contention of the ld. AR of assessee is that the expenditure was towards construction of compound wall, electrical fittings, painting etc. The Assessing Officer during the course of assessment proceedings found discrepancies in the bills submitted by the assessee. Most of the bills were hand written on plain paper and were in same hand writing. The bills were dated between 25-10-2007 and 31-10-2007. The contention of the Revenue is that the bills were procured by the assessee subsequently. ....

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....Karla bearing Gat No. 74 and admeasuring 1 Hectare 1.8 Ares and assessed at Rs. 2728:53p and bounded as follows, i.e. On or towards the East by         :   Gat No. 73 On or towards the West by       :   Gat No. 75 and 230 On or towards the South by      :   Indrayani River On or towards the North by      :   Road The assessee has also placed on record development agreement dated 15-05-2007 in respect of same property. The details of the property are also given in the said development agreement. The same are as under: SCHEDULE OF THE PROPERTY (A) All that piece an....

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....nce, therefore, the same were disbelieved. Further, the Assessing Officer observed that most of the parties who had allegedly carried out development work were shown as sundry creditors outstanding as on 31-03-2008. The assessee had allegedly made payments to the said person in assessment years 2009-10, 2010-11 and 2011-12 through cheques drawn on, The Thane Janata Sahakari Bank, Nigadi Branch. The enquiry made by the Assessing Officer revealed that most of the outstanding sundry creditors were paid by bearer cheques and in majority of the cases amount was withdrawn by one Shri Jaganan Thorat who is stated to be a close relative of one of the partners of the assessee firm. Since, the assessee was not able to substantiate the claim, the amou....

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....s the assessee was not able to substantiate development expenditure of Rs. 50,02,425/-. The assessee had submitted bills in support of the expenditure claimed. However, the same were rejected by the Assessing Officer by treating them as not genuine. In coming to such a conclusion, the Assessing Officer had made personal oral enquiries and also contacted the persons who had issued bills. None of the persons who had issued the bills ever denied the issuance of such bills. It is an undisputed fact that the assessee had claimed total expenditure of Rs. 71,53,380/- out of which the Assessing Officer has disallowed Rs. 50,02,425/-. Thus, the Revenue has admitted that some amount of expenditure has been incurred towards the development of land. It....