TaxTMI 
TaxTMI 
2017 (5) TMI 61
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....were called for hearing, neither the assessee nor his authorized representative appeared nor any application for adjournment or any written submission was placed before the Bench. On perusal or records, we find that these appeals are pending for a considerable period and despite several opportunities given to the assessee, the assessee is not appearing himself or through his counsel. Therefore, these appeals are pending for adjudication since long for want of prosecution. In view of the above, we are of the considered opinion that further adjournment of these appeals would not be just and proper and these appeals may be disposed off on the basis of record after hearing, the learned CIT(DR) appearing on behalf of the Revenue. We, therefore, proceed to hear and adjudicate these appeals accordingly. ITA No. 2894/Del/2010 for AY 2001-02 4. First we take up the appeal of assessee having ITA No. 2894/Del/2010 for assessment year 2001-02. The grounds of appeal reproduced as under: "1. In law and in the facts and circumstances of the appellant's case, the order passed by CIT(A) is bad in law and deserves to be cancelled as he has passed an order without considering and appreciatin....
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....n recalled and case was fixed on 19/01/2015. Due to non-functioning of the bench, the case was again fixed on 03/06/2015. Again due to non-functioning of the bench case was fixed on 21/09/2015. On said date the case was adjourned to 29/12/2015 on the request on behalf of the assessee. On 29/12/2015, again the case was adjourned to 21/04/2016 on the request of the person authorized by the assessee on the ground that the counsel who had to attend hearing was out of town, due to some personal reasons. Case was again adjourned to 07/07/2016 on the request of the authorized person of the assessee that Ld. counsel of the assessee could not appear as he was out of the town due to some personal reasons. Thereafter, due to non-functioning of the bench fresh notices were issued. The notice issued on 05/12/2016, fixing the date 10/01/2017 at the address provided in form No. 36 written back with the comment of the post office that refused to receive. None attended on 10/01/2017 on behalf of the assessee. Again fresh notice was issued on 8/02/2017 by registered post at the address provided in form No. 36 fixing the date on 29/03/2017. According to the record, this notice has not been returned b....
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....ssee contended that said premises was the guest house of the assessee company and the company used to send on account payment of the said premises to incur these expenses. According to the Assessing Officer, said premises were residential premises of the director of the assessee company in view of the statements recorded of the persons available at the premises during the course of search action. The Assessing Officer held the expenses personal expenses of the director, which couldn't be allowed in the hands of the assessee company. Accordingly, he disallowed the said expenses of Rs. 5,47,350/-. The Ld. CIT-A upheld the disallowance. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 8. The grounds No. 1 and 5 raised in the appeal are general in nature and thus not required to be adjudicated by us and accordingly dismissed as infructuous. 9. In ground No. 2, the assessee has challenged assessment order completed under section 153A of the Act. 9.1 The Ld. CIT(DR) relying on the order of the Assessing Officer, submitted that the assessment was completed as per the provisions of the Act and there being no error in the section und....
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....case and the submissions of the appellant. It is noted that during the search on 22.9.2005 a diary containing the details of the expenditure was seized showing the following: A/6. 1. Page No.24 08.04.2000 to 10.04.2000 Rs. 1,38,500/- 2. Page No.26 08.04.2000 to 05.05.2000 Rs. 2,82,350/- 3. Page No 28 06.50.2000 to 19.05.2000 Rs. 1.26.500/- The Assessing Officer asked the appellant to explain the source of the expenditure noted on these documents. It was submitted that the premises was the guest house of the company and the company used to send the on account payment to incur these expenses. The Assessing Officer after examining the documents held that the place is used by Sh. N.S. Bhangoo as the residence whenever he visits Delhi and the expenditure is personal in nature. During the appellate proceedings, the Counsel was asked to submit the details of the expenditure in view of the observations of the Assessing Officer. It was contended that the expenditure noted in the documents is connected with the business of the company, however, no details have been filed to rebut the observations of the Assessing Officer. To decide this iss....
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....exclusively for the business. 6. The expenditure should be for the purpose of business. 3.4 Adverting back to the facts of the case, it is noted that the appellant has not discharged the onus cast on him by the provisions of Section 37(1) of the Act. No submissions/evidence is filed to rebut the presumption u/s 132(4A) of the Act regarding the expenditure mentioned in the documents seized during the search. In view of totality of facts and circumstances, the addition made by the Assessing Officer is sustained." 10.3 In our opinion, the finding of the Ld. CIT-A on the issue in dispute is comprehensive and well reasoned and therefore no interference on our part is required. Accordingly, we uphold the finding of the Ld. CIT-A on the issue in dispute and dismiss the relevant grounds of the assessee. 11. In the ground No. 4, the assessee has challenged liability to pay interest. In the ground, the assessee has not specified the interest charged under any particular section, with which it was aggrieved. In our opinion, charging of interest is consequential in nature and further, the section is not particularly specified, we are not required to adjudicate the ground. Acc....
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....e facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred, while disposing of Grounds No. 6 to 8 of its appeal before him, in not fully granting the relief prayed for by the respondent vide para 6 to 10 of its written submissions dated 8.5.2010 before him but instead, confining the relief by directing the Assessing Officer to rectify the errors pointed out by the respondent at paras 8 to 9.2 of its said written submissions before him. He ought also to have appreciated that apart from the other substantive relief sought by the respondent vide paras 6 to 10 of its written submissions before him, there also were other errors in the assessment order impugned before him which had been specifically pointed out by the respondent vide para 6.2 of its written submissions and which too deserved to be rectified in the same manner as the other errors whose rectification had been directed by him. 5. In law and in the facts and circumstances of the respondent's case, the learned CIT(A) has grossly erred in omitting to consider Ground No. 9 of its appeal before him. He ought to have appreciated, inter alia, that in reality, all the Grounds No. 5 to 9 of the respo....
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....ssue in dispute are that after purchasing barren lands , the assessee used to carry out certain development works like lavelling, bush cutting, boulder removing, providing irrigation facility and fencing etc. on the land sites located in various states of the country. This work was used to execute through various contactors. In the year under consideration also the assessee carried out similar land development activity and incurred total expenses of Rs. 141,21,31,529/-. The Assessing Officer observed that the assessee was not debiting whole of the amount incurred during the year in profit and loss account. The assessee used to claim in profit and loss account only the expenses relating to land sold in respective years and the balance used to debit to land account. Thus, the remaining expenses on unsold plots were used to be included in the land cost, which was a stock in trade of the assessee and same was directly shown in the balance sheet. Whenever the land was sold, development expenses corresponding to that land were debited to profit and loss account. The Assessing Officer noted that the assessee was regularly following this practice. During the year under consideration, the a....
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....ce on 01/05/2007. The inspectors visited addresses of more than 100 alleged contactors, but no one was available at the addresses given by the assessee. 16.4 During the year under consideration also, the Assessing Officer carried out the exercise of verification of addresses of the alleged contactors. During the year assessee has shown a contract awarded to M/s Manami Construction Company Private Limited, Kolkata. In the enquiries carried out by the Deputy Director of Income Tax, Kolkata, it was revealed that no such company was existing at the address given by the assessee and the person available at the address was also not knowing anything about that company. 16.5 The Assessing Officer provided all the information and evidences gathered to the assessee. In response the assessee submitted that all those parties were genuine and each of having a PAN and payments made through account payee cheque, but the assessee did not file their confirmations before the Assessing Officer. In the circumstances, the Assessing Officer observed that payments made by account payee cheque is not conclusive evidence of services rendered by the parties and held the following parties as not genuin....
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....place to mention here that the Hon'ble Supreme Court in the case of CIT vs. Manmohan Das reported in 59 ITR 699 had observed as under:- "The second question presents little difficulty in making his order of assessment for the year 1950-51, the Income tax Officer declared that the loss computed in that year could not be carried forward to the next year under section 24(2) of the Income-tax Act, as it was not a business loss. The amount of loss as computed by him, if it is established in the course of assessment of the total income that the assessee has suffered loss of profit. Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward the loss as is not set off under sub-section (1) to the following year, and to set it off against his profits and gains, if any, from the same business, profession or vocation for that year. Whether the loss of profits or gains in any year may be carried forward to the following year and set off against the profits and gains of the same business, profession or vocation under section 24(2)....
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....hose expenses are not debited to the profit and loss account, disallowance of those in the year under consideration also does not arise. But before us, the Ld. CIT(DR) has contested that this fact has been assumed by the Ld. CIT(A) and it was not coming out of the assessment order. Further we find that the assessee even did not furnish confirmation letters from the alleged contactors to establish the services rendered by them. This was the basic requirement, which the assessee was required to fulfill to discharge his onus particularly in the circumstances when many persons alleged to be contactors have admitted of not carrying out any contract work for the assessee. In the circumstances, we feel it appropriate to restore the issue of disallowance of land development expenses of Rs. 1,57,61,800/- to the file of the Assessing Officer for examining afresh and decide after carrying out necessary Inquiries as deemed fit. It is needless to mention that assessee shall be afforded sufficient opportunity of hearing. Accordingly, the grounds of appeal raised by the Revenue are allowed for statistical purpose. Cross objection of the assessee 18. In ground no. 1 of the cross objections, ....
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..... In view of above facts and circumstances, the ground raised in cross objection is dismissed. 20. In ground No. 3, the assessee has challenged sustaining of addition of Rs. 1,57,24,188/- by the Ld. CIT(A). The Ld. CIT(DR) supported the finding of the learned CIT-A and requested for upholding the same in view of the details reasoning given by the Ld. CIT-A. 20.1 We have heard the submission of the Ld. CIT(DR) and perused the relevant material on record. The learned CIT-A, in para-4.3 of the impugned order has decided the issue in dispute as under: "4.3 I have carefully considered the facts of the case and submissions of the appellant. The Counsel of the appellant contended that the amount of cash of Rs. 1,57,24,188/- was offered for taxation u/s 132(4) of the Act and formed part of the declaration of Rs. 23 crore made by the appellant. The perusal of the bifurcation submitted before the Assessing Officer reveals that the amount of cash found and seized during the search does not form part of the declaration made by the appellant at the time of the search. The submissions made by the counsel of the appellant are devoid of any merit. The Assessing Officer has rightly treated....
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....the Ld. CIT(DR) and perused the relevant material on record. We find that the addition of Rs. 2,35,75,009/- has been made after taking into account additions proposed against incriminating documents and after reducing the amount of Rs. 23 crores declared by the assessee. The learned CIT-A has considered all the arguments of the assessee regarding the additions proposed on incriminating documents and surrendered under section 132(4) of the Act. The Ld. CIT-A has held that no evidence or explanation has been filed by the assessee during the appellate proceeding to rebut the presumption under section 132(4A) of the Act and accordingly upheld the addition. The relevant finding of the Ld. CIT is reproduced as under: "5.2 I have carefully considered the facts of the case and the submissions made by the Counsel of the appellant. It is perused from the assessment order that various documents were seized during the search conducted on 25.09.2005. The Assessing Officer afforded various opportunities to the appellant to explain the documents seized during the search. The Assessing Officer made the various additions as no plausible explanation was filed in regard to the documents seized dur....
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....mpugned had been arrived at. Out of abundant caution only, we beg to point out that the relief that may be granted in respect of the impugned addition of Rs. 3,63,07,499 will need to be appropriately dealt with considering the said table. " The ACIT, Central Circle-4, New Delhi attended the appellate proceedings. The submissions of the appellant were discussed with him. The Assessing Officer vide letter No. ACIT/CC-4/2010-11/429 dated 26.05.2010 submitted that the contention of the appellant in this regard has been found to be correct. In view of this, the Assessing Officer is directed to take the remedial action accordingly." 22.3 In view of above, we are of the opinion that finding of the Ld. CIT-A on issue in dispute is comprehensive and well reasoned and no interference on our part is required. Accordingly we uphold the finding of the Ld. CIT-A in on the issue in dispute and dismiss the ground of the cross objection . 23. Ground No. 6 of the cross objection being general in nature, we are not required to adjudicate upon and dismissed as infructuous. 24. In the result, cross objection of the assessee is dismissed. ITA No. 3779/Del/2011 & C.O. No. 325/Del/2011 for ....
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.... four preceding assessment years had been used to justify disallowance of Land Development Expenses which had already been deleted in first appeal; (b) The appellant's present case was squarely covered by the second Proviso to Section 147. 3. In law and in the facts and circumstances of the appellant's case, the CIT(A) has erred in capriciously dealing with the ground raised by the appellant that the interest levied u/s 234B of Rs. 2,63,99,524/- was invalid. CIT(A) has held that the levy of interest was consequential in nature without appreciating the facts of the case. 4. In law and in the facts and circumstances of the appellant's case, the CIT(A) has erred in capriciously dismissing the ground raised by the appellant that initiation of penalty proceedings was not warranted in appellant's case. 5. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal." 27. The facts in brief of the case are that the assessment was completed under section 153A read with section 143(3) of the Act on 31/12/2008 at total income of Rs. 27,32,23,810/-as against returned incom....
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.... Sh. I V P Gupta 11 P P BUILDMART PVT.LTD 3,58,20,000 Sh. Rajeev Kumar 12 PAWANSUT CONTRACTORS PVT. LTD. 1,83,98,000 Sh. Vidya sagar 13 PRAKRIT HOTELS PVT. Lib. 1,31,00,000 NO AFFIDAVIT 14 NOVA BUILDCOM PVT. Lib. 6,66,00,000 NO AFFIDAVIT 15 NEEL KAMAL BUILDTECH PVT. LTD. 90,40,000 Sh. Sushil Tiwari 16 RADHA BALLABH BUILDERS PVT.LTD. 21,96„000 Sh. Pradeep Singh 17 RADHA BALLABH NEST BUILD PVT.LTD. 1,83,95,000 Sh. Pradeep Singh 18 RADHA BALLABH CONSTRUCTIONS PVT.LTD. 1,24,97,000 Sh. Pradeep Singh TOTAL 43,57,22,000 27.1 Further, the Assessing Officer asked the assessee to provide complete detail of land development expenses and produce the person, who claimed to have carried out the said land development work in the copy of affidavits submitted. Regarding the land development expenses details, the assessee submitted that it was not possible to provide due to huge volume. The Assessing Officer pointed out certain discrepancies in the affidavits which are listed on page 7 of the assessment order as under: "All the above alleged affidavits su....
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....cer to examine the genuineness/allowability of such development expenses in the year in which same are debited in the books of accounts and claimed as an expenses. 27.6 Aggrieved, the Revenue is in appeal raising grounds as reproduced above. 28. Before us, the Ld. CIT(DR) submitted that the assessee failed to discharge its onus to establish that said expenses were wholly and exclusively incurred for the purpose of the business. She also further submitted that the assessee had filed affidavit of the parties in support its claim of the expenses and thus it was onus of the assessee to produce those parties for verification, rather than asking the Assessing Officer to produce them for cross-examination and failure in producing those parties by the assessee, the Assessing Officer has rightly disallowed the land development expenses corresponding to those parties. Further for verification of the fact, whether the expenses corresponding to the parties were debited in the profit and loss account were not, the Ld. CIT DR requested to restore the matter to the file of the Assessing Officer. On the other hand, none represented on behalf of the assessee and therefore the appeal is heard ....
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....ct and that too by the same Assessing Officer and that therefore the present reopening is mere " change of opinion" and therefore not a valid ground for reopening. I have given deep thought over the matter and am of the view that the information received from the office of CIT-V , Delhi regarding the investigation done by the AO's in his charge was with respect to a different set of 18 companies to whom development charges were paid by the appellant during the relevant period. It is also noted that the expenses paid to these 18 parties was not the subject matter of scrutiny and consequent allowance of such expense by- the AO in the original assessment order. In addition to this the issue is also to be seen from the perspective as to whether the information received subsequent to the passing of original assessment order constituted valid and sufficient ground for reopening. It is well settled law, as has been held by Apex Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in (291 ITR 500) that "section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessmen....
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....ssessee company with number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under Section 147 of the Act. The reason to believe has been appropriately understood by the assessing officer and there is material on the basis of which the notice was issued". Keeping in view the legal proposition referred above, I am of the considered view that, the information received by the AO from office of CIT-V, Delhi in which inter alia various grounds were cited [ which have been reproduced in para 4 to XI above] to hold that the companies receiving development expenses were non genuine parties, did constitute relevant and material information on the basis of which the Assessing Officer had reason to believe that, income has escaped assessment. The said reason had a rational connection or live link with the formation of the belief that income chargeable to tax has escaped assessment in the hands of the assess....
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....sessment year 2008-09. 36. The grounds of appeal raised by the Revenue are as under: "1. On the facts and in the circumstances of the case, the CIT(A) has erred in deleting the addition of Rs. 6,37,85,561/- made by the A.O. u/s 69B of the Income tax Act, 1961. 2. On the facts and in the circumstances of the case, the C1T (A) has erred in deleting the addition of Rs. 1,78,28,308/- made by the A.O. on account of consultancy charges (commission/ brokerage). 3. On the facts and in the circumstances of the case, the CIT(A) has erred, in violation of the rule 46A of the Income-tax Rules, 1962, by not following the decision of Hon'ble Delhi High Court in the case of Manish Build Well Pvt. Ltd. 204 Taxman 106, wherein it was held by the Hon'ble jurisdictional High Court to give two stage opportunity under rule 46A, i.e. first before admission of additional evidences and second after admission of additional evidences. 4. On the facts and in the circumstances of the case, the CIT (A) has erred in deleting the addition of Rs. 1,74,20,000/- made by the A.O. on account of land development expenditure. 5. The order of the CIT (A) is erroneous and is not tenable on facts and in ....
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....s amounting to Rs. 1,74,20,000/-. 38.1 Aggrieved, the assessee filed appeal before the Ld. CIT-A, who, partly allowed the appeal of the assessee. Aggrieved both the Revenue and assessee are in the appeal raising grounds as reproduced above. 39. Before us, the Ld. CIT(DR), first took the ground No. 3 of the appeal of the Revenue and submitted that the assessee had filed additional evidences before the Ld. CIT-A , which were objected by the Assessing Officer in remand proceedings . She further submitted that While admitting those additional evidences under rule 46A of the Income Tax Rules, 1962, the Ld. CIT-A has not followed the decision of the Hon'ble Delhi High Court in the case of Manish Buildwell Private Limited, 204 taxmann 106, according to which the Assessing Officer should have been provided two stage opportunity under Rule 46A, i.e. firstly for admission of additional evidences and Second, after admission of additional evidences. Accordingly, she submitted that the ground No. 1 and 2 of the Revenue's appeal and grounds No. 1 to 3 of assessee's appeal need to be restored to the file of the Assessing Officer for considering those evidences and deciding the issue afresh.....
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..... to produce any evidence or document or any witness in rebuttal of the additional evidences produced by the assessee. 44. On the issue of providing opportunity to the Assessing Officer while admitting additional evidences, the Hon'ble Delhi High Court in the case of Manish Buildwell Private Limited (supra) has held as under: "23. It is for the aforesaid reason that r. 46A starts in a negative manner by saying that an appellant before the CIT(A) shall not be entitled to produce before him any evidence, whether oral or documentary, other than the evidence adduced by him before the AO. After making such a general statement, which is in consonance with the principle stated in the above judgment, exceptions have been carved out that in certain circumstances it would be open to the CIT(A) to admit additional evidence. Therefore, additional evidence can be produced at the first appellate stage when conditions stipulated in the r. 46A are satisfied and a finding is recorded. Rule 46A reads : "46A. Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals).-(1) The appellant shall not be entitled to produce before the Deputy Commissioner ....
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....ed and maintained between a case where the assessee invokes r. 46A to adduce additional evidence before the CIT(A) and a case where the CIT(A), without being prompted by the assessee, while dealing with the appeal, considers it fit to cause or make a further enquiry by virtue of the powers vested in him under sub-s. (4) of s. 250. It is only when he exercises his statutory suo motu power under the above sub-section that the requirements of r. 46A need not be followed. On the other hand, whenever the assessee who is in appeal before him invokes r. 46A, it is incumbent upon the CIT(A) to comply with the requirements of the rule strictly. 24. In the present case, the CIT(A) has observed that the additional evidence should be admitted because the assessee was prevented by adducing them before the AO. This observation takes care of cl. (c) of sub-r. (1) of r. 46A. The observation of the CIT(A) also takes care of sub-r. (2) under which he is required to record his reasons for admitting the additional evidence. Thus, the requirement of subrs. (1) and (2) of r. 46A have been complied with. However, sub-r. (3) which interdicts the CIT(A) from taking into account any evidence produced for....
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.... thus we feel it appropriate to restore the issue is in ground No. 1 and 2 of the appeal of the Revenue and ground No. 1 to 3 of the appeal of the assessee for deciding afresh after taking into account the additional evidences produced by the assessee before the learned CIT(A). We order accordingly. Thus, the respective grounds of the appeal of the Revenue and the assessee are allowed for statistical purposes. The ground No. 3 of the appeal of the Revenue is accordingly allowed also. 46. In ground number 4, the Revenue has challenged the addition of Rs. 1,74,20,000/-on account of land development expenditure deleted by the Ld. CIT-A. 46.1 We find that the issue in dispute is identical to the ground No. 1 raised by the revenue in ITA No. 3694/Del/2010 and in ITA No. 3779/Del/2011, which we have already restored to the file of the Assessing Officer for deciding afresh. Following the same finding, the issue in dispute, is restored to the file of the Assessing Officer for deciding afresh. It is needless to mention that the assessee shall be afforded sufficient opportunity of hearing. Accordingly the ground No. 4 of the appeal of the Revenue is allowed for statistical purpose. ....
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....In law and on the facts and circumstances of the case, the Ld. CIT(A) erred in sustaining the addition of Rs. 3,48,27,265/- under the head commission and market development expenses ignoring the fact that payment is made through banking channels, genuineness of the payment is not doubted and such payment of brokerage to these parties has been allowed in earlier years. 3. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or at the time of hearing of the appeal." 51. The facts in brief of the case are that during the relevant period, a survey action under section 133A of the Act was conducted on 25/11/2008 at the business premises of the assessee located at 7th floor, Gopal das Bhawan, Barakhamba road, New Delhi, during which incriminating documents were impounded. For the year under consideration the assessee filed return of income electronically on 30/09/2010 declaring total income of Rs. 27,27,31,417/-. The case was selected for compulsory scrutiny and notice under section 143(2) of the Act was issued on 11/08/2010 which was duly served upon the assessee. The incriminating documents impounded during the course of su....
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....07-08 and expenses corresponding to those were debited as land development expense during the year in question. Accordingly, the assessee company reversed the entries and surrendered the amount of Rs. 15,06,41,600/-. During the assessment proceeding, the Assessing Officer observed that assessee offered income of Rs. 15 crores in profit and loss account by way of reversal of land development expenses charged to profit and loss account, and therefore he added the balance amount of Rs. 6, 47, 600/-, which was declared during the course of survey however not reversed in the profit and loss account of the year under consideration. Before the Ld. CIT-A, the assessee submitted that it reversed the entire amount of Rs. 15,06,41,600/-. Accordingly, the Ld. CIT-A held as under: "c) Decision I have considered the assessment order, written submission & argument of learned AR. As evident in para 5.1 of assessment order reproduced supra, the appellant has made surrender of Rs. 15,06,41,600 being total of payment made to 10 parties under the head 'Land Development Expense' & furnished copy of ledger of these 10 parties. These payment were made in F.Y. 07-08 but not claimed expense in A.Y. ....
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....r-1, Rohini, New Delhi 2008-09 87,40,000 2 M/s SPT Impex P Ltd., 119/2, Kishan Kunj, Laxmi Nagar, New Delhi 2008-09 51,30,000 3 M/s Reliable Buildwell (P) Ltd. 1257/37, W, Falehpuri Colony, New Delhi 2008-09 13,69,000 4 M/s Raj Bala Agro P Ltd 2007-08 18,70,000 1,71,09,000 56.2 Since in earlier years, we have already restored the issue of disallowance of land development expenses to the file of the Assessing Officer for deciding afresh, therefore we feel it appropriate to restore the issue of land development expenses of Rs. 1,71,09,000/-, related to above parties in the year under consideration also. It is needless to mention that the assessee shall be afforded sufficient opportunity of hearing on the issue in dispute. We order accordingly. 56.3 Regarding the disallowance of Rs. 2,37,71,236/- out of the land development expenses is concerned, the Ld. Assessing Officer observed that the assessee failed to submit complete addresses and other details in respect of the parites and therefore genuineness of the expenses of balance amount of Rs. 23,77,12,364/- under the head land development expens....
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....,92,475 Brokerage paid below 5 lacs 4164981 60. Similarly the Assessing Officer observed that PAN/addresses in respect of the following parties were also not provided: Commission /Brokerage paid List as per Annexure A-4 pages 108 to 126 / Brokerage paid below' 5 lacs S. No. Name Amount (Rs.) 1. Amar Deep Construction (P) Ltd. 117600 2. Ardent Consultancy Services (P) Ltd. 156000 3. Confluence Leasing & Credit Ltd. 120000 4. Dazzle Holding (P) Ltd. 80000 5. Econ Trade World 200000 6. Ishaan Fininvest & Securities (P) Ltd. 120000 7. MSR Securities (P) Ltd. 120000 8. PSC Holding (P) Ltd. 60000 9. Rainbow Credit & Securities (P) Ltd. 60000 10. Sunstar Securities & Credits (P) Ltd. 60000 11. Suren Electronic & Electrical (P) Ltd. 10000 12. Yashika Finlease & Holdings (P) Ltd. 141525 Total 12,45,125/- 61. The Ld. AO disallowed the claim of the brokerage for following reasons: (i) payment to the parties were made as per the direction of the top management (Three parites) (ii) the assessee has not fu....
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....upport of specific work done, even at appellate stage. Therefore. 1 am of the opinion that the disallowance made under brokerage head to extent of Rs. 53.37.600 00is proper. Accordingly 1 confirm the addition made by the A.O." 63. We find that the Ld. CIT-A has considered the submission of the assessee and concluded that the assessee failed to provide addresses of three parties and PAN out 12 parties. In our opinion, the assessee has failed to discharge its onus of providing the basic details in respect of the parties, which was in its possession only. In the circumstances, we find the finding of the Ld. CIT on the issue in dispute as well reasoned and comprehensive and no interference on our part is required. Accordingly we uphold the disallowance of Rs. 53,37,600/- made by the Assessing Officer. 64. With regard to disallowance of Rs. 13,34,48,276/-out of commission and market development expenses, the Ld. assessing officer carried out enquiries under section 133(6) of the Act to verify the genuineness of the expenses on test check basis and in case of five parties letters sent were returned back with postal remarks that " no such person is residing at this address". The lis....
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....han 3 063035754 Shailendra Partap Yadav NULL 1235023 UP 4 063051310 Laxmi Yada NULL 1388682 UP 5 638250068 N. Begam NULL 2686247 UP 6 0720001841 Sarita Verma NULL 910742 Rajasthan 7 0723503804 Suresh Kumar Sharma NULL 889579 Rajasthan 8 0780016672 S: Antonyraj NULL 602839 Tamil Nadu 9 0788750022 K. Veenu Reddy NULL 516210 1014727 Tamil Nadu 10 1030001139 Ombir patel NULL Haryana 11 125205587 Mahendra Kr. Vishwakarma NULL' 661900 UP 12 1258750025 Raj Mani Maurya NULL 534266 UP 13 1330007644 J Shanlhi NULL 739721 TN 14 1360004133 Bapurao H. Balale NULL 939887 Maharashtra 15 1368750007 Manisha Sadashiv Bankar NULL 523806 Maharashtra 66. In view of the observation, the Ld. Assessing Officer disallowed the 10% of the expenses out of the commission market development expenses of Rs. 1,33,48,22,756/-, which was worked out to Rs. 13,34,82,275/-. 67. The learned CIT-A, out of the above disallowance, sustained the disallowance of Rs. 3....
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....sons amounting to Rs. 47,09,396 under this head as service rendered by these persons are not proved. On the issue of non furnishing of PAN & state in respect of 30 parties, 15 under each category, Ld. AR has argued that through PAN directory, state could have been verified by the A.O. I do not agree with the argument of Ld. AR. The appellant company should have given complete address of the payee. A.O. has insisted at least state of the parties, should be given. Even state could not be furnished by the appellant company. Therefore, appellant company does not possess entire details of expenditure. Further, PAN is not provided in respect of 15 payee. The payment to these persons was quite substantial from Rs. 5 lakhs to 26 lakhs. In absence of the PAN of these persons, genuiness of transaction is not proved. In absence of these primary details, the A.O. in my view is correct in drawing adverse inference in respect of these parties. 1 hereby confirm the addition made under this head to the extent of payment made to these 30 parties under this head to the extent of Rs. 3,01,17,869 is confirmed. Ld. AR has objected to the estimation of addition & relied on its submission made in r....
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.... (A) has erred in deleting the addition of Rs. 10.0 crore made by the AO to the declared profit of the assessee company on account of steep decline in the net profit. ii. On the facts and in the circumstances of the case, the CIT (A) has erred in restricting the addition to Rs. 18,21,087/- out of total of Rs. 1,71,54,550/- made by the AO on account of land and farm development expenses. iii. On the facts and in the circumstances of the case, the CIT (A) has erred in restricting the disallowance to Rs. 1,63,80,358/- out of total of Rs. 22,64,08,533/- made by the AO on account of brokerage / commission expenses. iv. On the facts and in the circumstances of the case, the CIT (A) has erred in brushing aside the findings of the survey proceedings / enquiries conducted by the Department. v. On the facts and in the circumstances of the case, the CIT (A) has committed a serious infirmity by not appreciating the factual matrix in respect of which various additions were made in the impugned assessment order. vi. The order of the CIT (A) is erroneous and is not tenable on facts and in law. vii. The appellant craves leave to add, alter or amend any/ all of the grounds of appe....
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.... part relief to the assessee. Aggrieved, both the Revenue and the assessee are in appeal raising the grounds as reproduced above. 76. The Ld. CIT(DR) relied on the finding of the Assessing Officer and submitted that in last many years , the assessee has been subjected to either search or survey action and lot of incriminating documents have been found and the assessee has also offered certain amount for taxation on account of the incriminating materials found during the course of survey or search action. She submitted that in such circumstances the book results of the assessee claiming substantial higher expenses on personnel, selling and advertising , general and administrative expenses cannot be accepted and accordingly the trading addition of Rs. 10 crore made by the Assessing Officer is justified. She also justified the disallowance made by the Assessing Officer under the head land development expenses and brokerage in commission expenses. Accordingly she prayed for upholding the order of the Ld. Assessing Officer. On the contrary, none attended on behalf of the assessee and therefore appeal is heard ex parte qua the assessee. 77. We have heard the submissions of the Ld. ....
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....ssee and amount of Rs. 39,62,302/- in respect of 14 persons, whose PAN was not provided. Thus, total amount of Rs. 1,63,80,358/- was confirmed by the Ld. CIT-A and relief of the balance amount was allowed to the assessee. The Revenue is in appeal against the relief allowed and the assessee in appeal in respect of amount of Rs. 1,24,18,056/- and amount of Rs. 39,62,302/- sustained by the Ld. CIT-A. The facts in the year under consideration are identical to the facts of the appeal of revenue in ITA No. 6462/Del/2012 and appeal of the assessee in ITA No. 6385/Del/2012 for assessment year 2009-10, wherein the identical issue in dispute has been restored to the file of the Assessing Officer for deciding afresh. Thus following the same finding, we feel it appropriate to restore the issue to the file of the Assessing Officer for deciding afresh for the year under consideration also. We order accordingly. It is needless to mention that the assessee shall be afforded sufficient opportunity of hearing on the issue in dispute. 80. In ground No. 1 of the appeal, the revenue challenged trading addition of Rs. 10 crores deleted by the learned CIT-A. The Assessing Officer made addition in view....
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....onal income u/s 133A. He argued that the surrender of additional income of Rs. 35- crores is on the basis of unaccounted investment i.e. application of income. Therefore, the disclosure of current year is nothing but income generated. Therefore, he argued that the surrendered amount if considered, even net profit ratio is not low. After considering the entire facts & arguments of Ld. AR, I agree with the arguments of Ld. AR that the assessing officer has not brought on record any finding that any expenditure claimed by the assessee is bogus or in admissible before arriving the ad-hoc addition of Rs. 10,00,00,000/-. In that circumstances, it is improper to make addition just by comparing certain expenses vis-a-vis turnover. Ld. AR's argument that certain expenditure such as advertisement, commission may give result in term of profit or increase in turn over in subsequent years appears to be reasonable. After taking into account of Judicial pronouncements relied by Ld. AR that the ad hoc addition is not permissible, I hereby delete the addition of Rs. 10,00,00,000/- made by the assessing officer. I will deal with specific disallowance made by assessing officer in subsequent gro....