TaxTMI 
TaxTMI 
2017 (12) TMI 1170
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.....22 and 51 of 2015 for the assessment year 2008-09. ITA No.114/2015 is with respect to M/s.Right Hand Developers India (P) Ltd. for the assessment year 2008-09. 3. Assessments were initiated on the basis of the search conducted in the residence of the Directors of both the Companies under Section 132 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act', for short) on 26.3.2008. There were objections raised with respect to the search and seizure and the subsequent proceedings, which were negatived by the first appellate authority and the Tribunal, against which there is no appeal filed. We are concerned only with the claim of expenses made by the assesses before the Assessing Officer, who disallowed a major portion on computation made by himself. The fact that the vendors of the assesses had expended amounts to develop the property was also taken into account. The assesses claimed benefit of the presumption available under Section 132(4A) of the Act. The first appellate authority in the context of both assesses allowed the claims to the extent of the cheque payments as disclosed from the documents seized from the premises and disallowed it for the balance. The Tribun....
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....he seized materials and even with respect to the seized materials, whether the Tribunal was justified in not having put the assessee to proof under Section 37 of the Act. 7. Both the assesses were incorporated in the year 2006. The transactions itself took place during the years 2007-08 and 2008-09 with respect to M/s.Damac Holdings Pvt. Ltd., and 2008- 09 with respect to M/s. Right Hand Developers India (P) Ltd. In fact, the subject transactions, which were assessed by the Income Tax Authorities took place in the previous year of the assessment year 2008-09. The expenditure was claimed for the year 2007-08 by M/s.Damac Holdings Pvt. Ltd. only since they had entered into agreements with certain property owners in the previous year to the assessment year 2007-08 and had expended some amounts in pursuance of the purchase effected of the properties in the financial year 2007-08. The purchases were made in August, 2007 and the sale was also effected within 4-6 months. In the case of M/s.Damac Holdings Pvt. Ltd., the purchase price was about Rs. 5 crores and the sale price about Rs. 13 crores. With respect to M/s.Right Hand Developers India (P) Ltd. also, the situation was almost sim....
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....ve gone through the assessment orders, the orders of the first appellate authority and the Tribunal. The question of law raised is only with respect to the amounts that has to be allowed as expenditure. We see from the assessment orders that the Assessing Officer has proceeded on a mere presumption in computing the amounts, which the assessee would have expended for developing the property. The Assessing Officer worked out the total expenditure as Rs. 2,40,91,920/- and apportioned it to the total area arriving at the cost expended per cent to be Rs. 6,832/-. There was absolutely no basis for such a computation. The Assessing Officer's finding that the vendors of the property had spend Rs. 18,000/- per cent for leveling the property and hence, there was no requirement for the assesses to make the expenditure at the extent claimed, also cannot be sustained. The first appellate authority considering the documents produced allowed the claim to the extent that there were cheque payments; as is discernible from the documents seized. 11. The claim for benefit of presumption under Section 132 (4A) has to be considered at first. Section 132(4A) provides for presumption, inter alia, o....
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....the lower authorities. The Assessing Officer, even when a remand report was called for by the first appellate authority, has categorically stated that the assesses did not maintain any books of accounts. The further submission that subsequent payments were made on liabilities accrued in the assessment year cannot also be countenanced. The purchase of the property and the sale were carried within the course of 4-6 months. The entire expenditure said to have been made is for the development of the plots by filling up the same, building compound wall, etc. The claim is also with respect to the documents seized disclosing both cash and cheque payments; which itself reveal considerable expenditure having been made even to the extent of more than the purchase price. To substantiate the cash payments, the specific contention was that it was for purchase of red earth for filling up of the properties which payments were made on each lorry load being received. The Tribunal had also noticed the fact that the cash payments were all below Rs. 20,000/- and there was no requirement for a cheque transaction or deduction of tax at source. There could have been no liability, hence, accrued in the co....