2018 (6) TMI 63

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.... 3. The return of income for the A.Y. 2009-10 was filed on 18/09/2010 declaring total loss at Rs. 9,109/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called the Act) on 01/11/2010. Subsequently, the case was selected for scrutiny & notice u/s 143(2) of the Act, dated 19/08/2011 was duly served upon the assessee by speed post. In response to the said notice from time to time, the Chartered Accountant attended the office & submitted the necessary details & clarifications as placed on record. The Assessing Officer observed that in BPTP and some of its group companies first search & seizure operation was carried out on 15/11/2007. During the earlier assessment proceedings u/s 153A of the Act, it was very well proved that the assessee was used to pay part payments of the sale consideration in respect of the land purchased at the time of execution of the sale-deed and the payments of balance sale consideration were invariably made through post dated cheques (PDCs) and for the intervening period )i.e. period between the date of sale deed and the date of encashment of PDCs), interest was paid in cash to the vendors of the land by the vendee company on mont....

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....e that the Tribunal in case of Sunglow Overseas Pvt. Ltd. (Supra) held as under: "10. After considering the submissions of both the parties, it is noticed that this issue was decided in favour of the assessee in assessee's own case in ITA No. 1367/Del/2013 for the assessment year 2007-08 wherein the findings given in the order dated 31.10.2014 in ITA Nos. 1674 & 1765/Del/2013 for the assessment year 2008-09 in the case of M/s IAG Promoters and Developers Pvt. Ltd. have been followed. The relevant findings have been given in the said order dated 14.09.2015 in para 11 & 12 read as under:- "11. We have considered the submissions of both the parties and carefully gone through the material available on the record. It is noticed that an identical issue having similar facts has already been adjudicated by the ITAT Delhi Bnech 'C', New Delhi in the case of ACIT vs. M/s IAG Promoters and Developers Pvt. Ltd. (supra) wherein vide order dated 31.10.2014, the relevant findings are given in para 5 which read as under: "5 We have heard the arguments of both the sides and perused relevant material placed before us. At the outset, the ground raised by the Revenue is misc....

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....eques (PDCs) and for the intervening period )i.e. period between the date of sale deed and the date of encashment of PDCs), interest was paid in cash to the vendors of the land by the vendee company on monthly basis @ 1.25% p.m. on the amount of PDCs and this cash payment of interest by the vendee company, was not accounted for by it, in its books of account. The addition on the ground has been made in the several group companies of the BPTP group during the course of earlier assessment proceedings u/s 143(3)/148/153A in consequence to search carried out on 15/11/2007. Thus, the Ground No. 1 of the Revenue's appeal is dismissed. 8. As regards to Ground No. 2 is also in favour of the assessee by the Hon'ble High Court decision in case of Vasundara Promoters Pvt. Ltd. (Supra). The Hon'ble High Court held as under: "This Court is of the opinion that the broad interpretation of the Explanation to Section 37(1) of the Act given by the Revenue is in the circumstances of this case not well founded. The other submission is that the such amount has to be taken as falling within the mischief of the said provision, in our opinion, is an incorrect premise. It is not every alleg....

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.... case law relied upon by the parties has been taken into consideration. On a consideration of the same we are of the view that since in the facts of the present case the material issue is that the said expenditure was never claimed as assessee's business expenditure the occasion to make a disallowance of the same does not arise. On this fact there is no dispute as admittedly the expenditure was never claimed as an expense by the assessee and consequently has not been routed through its P&L A/c, In the circumstances, the occasion to make an addition of the same by way of a disallowance in these peculiar facts and circumstances of the case does not arise. The reasoning and finding given while considering the arguments 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 hereto 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 throug....