TaxTMI 
TaxTMI 
2021 (9) TMI 699
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....s for reopening of assessment and issued noticed u/s 148 of the Act. The assessment u/s 147 of the Act was made after making the following additions and disallowances: i) On account of interest on Post Dated Cheques (PDCs) of Rs. 26,08,186/- ii) On account of disallowance u/s 37(1) of the Act on additional payment of Rs. 41,50,000/- towards purchase of land. iii) Addition on account of deemed dividend u/s 2(22)(e) of Rs. 4,54,171/-. 2.1 Aggrieved, the assessee preferred an appeal before the Ld. First Appellate Authority, who was pleased to partly delete the addition on account of interest on post dated cheques amounting to Rs. 24,12,406/-. The Ld. CIT(A) also partly deleted the disallowance made u/s 37(1) of the Act on additional payment of Rs. 40,50,000/. The assessee also got relief with respect to addition on account of deemed dividend u/s 2(22)(e) of the Act amounting to Rs. 4,54,171/. However, the Ld. CIT(A) upheld the initiation of re-assessment proceedings. Thus, in effect the Ld. CIT(A) confirmed the addition on account of post dated cheques amounting to Rs. 1,95,780/- and also the disallowance u/s 37(1) of the Act on additional payment of Rs. ....
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....nt. 4.1 That without prejudice the CIT(A) erred in upholding the disallowance of Additional Payments made to the recipients who were not the owners of land and to the payment made in cash. 4.2 That without prejudice the CIT(A) erred in not himself quantifying the addition to be made. 4.3 That without prejudice the CIT(A) did not deal with the following specific ground No.4.1:- "4.1. That learned Assessing Officer has erred in making an addition of Rs. 41,50,000/- on account of additional payments as recorded in books of account of appellant company as against amount of Rs. 40,00,000/- paid on account of additional payment and recorded in books of account" 5. That the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXXIII, New Delhi are bad in law and void ab-initio. 6. The appellant craves permission to add, amend, alter or vary all or any grounds of appeal on or before the date of hearing of the appeal." 3.0 We also note that the Cross Appeal filed by the Department against the relief allowed by the Ld. CIT(A) was dismissed by this Tribunal due to low tax effect in ITA No.1531/Del/2013 vide or....
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....ssessee company had made additional payments 'aggregating to Rs. 1,50,000A against the purchase of land to various land owner's. 'The post-search Investigations / enquiries were also made to verify the genuineness of the additional payments actually having been made and summons u/s 131 were issued to several farmers from whom the land was acquired. The enquiries made revealed that the additional payments made 'were not genuine. Moreover, the additional payments were made in violation of the section 24 of the Stamp Duty Act and as such the same are not admissible as expenditure as per explanation to u/s 37 (I) of the I.T. Act. The income has, thus, been under assessed to the extent of Rs. 1,50,000/- on account of additional payments against the purchase of land. I have, therefore reasons to believe that income chargeable to tax amounting to Rs. 26,74,110/- (Rs. 25,24,110+Rs. 1,50,000) has escaped assessment within meaning of section 147 Notice u/s 148 is issued." 4.2 The Ld. AR submitted that the issue of reopening of the assessment proceedings was fully covered in favour of the assessee by the order of this Tribunal in the case of one of the group compan....
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....and and, therefore, the Assessing Officer was absolutely correct in initiating reassessment proceedings u/s 147/148 of the Act. The Ld. Sr. DR supported the orders of the Lower Authorities on the legal issue of validity of reassessment proceedings as well as on the merits of the case. 6.0 We have heard the rival submissions and have also gone through the records. We have also perused the reasons recorded in the case of Green Valley Tower Pvt. Ltd. for Assessment Year 2006-07 which are being reproduced herein under for a ready reference: Reasons for reopening the case u/s 147 read with section 148 ''Return declaring an income of Rs. 4,03,150/- was filed on 15.11.2006. The case was processed u/s 143(1). A search and seizure action was conducted on BPTP and its Group companies on 15.11.2007. Certain documents seized in the search action (Details enclosed as per Annexure-A) on the Group and the post-search enquiries made revealed that the group was following a business model as a part of which only part payments of the sale consideration in respect of the land purchased were paid at the time of execution of the sale-deed and the payment of balance sale con....
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....ry of these seized documents. It is the assessee contention that there was no seized documents which were referred to in the assessment order which could the said to be belonging to the assessee. The Ld. Sr. DR has also failed to bring to anything on record to establish that any seized documents were found during the course of search belonging to the assessee. There is a clear finding recorded by the Ld. CIT(A) in the impugned order in Para. 4.3 & 4.4 of his order that none of the seized documents belonged to the assessee. The Ld. Sr. DR was unable to controvert this categorical finding recorded by the Ld. CIT(A). Thus, undisputedly, in the present case, no documents belonging to the assessee were found during the course of search. We also note that this issue has been dealt with in detail in the case of M/s Green Valley Tower Pvt. Ltd. in ITA No.1735/Del/2013 for Assessment Year 2006-07 vide order dated 15.01.2021. The relevant findings of the Co-ordinate Bench of the Tribunal are contained in paragraphs 7.3, 7.4 and 8 of the said order and the same is being reproduced herein under for a ready reference: "7.3 In our considered view, each and every assessee is a separate a....
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....material belong to the appellant company. The assessee has been denying to have paid any interest on PDCs. No cogent material was found during the course of search which could repel this contention of assessee. The reasons have been recorded by the AO after drawing the inference from the seized documents that trend of payment of interest on PDCs by the group companies stood depicted and the assessee being a group company of BPTP Ltd., might have also paid interest on such PDCs. This approach of the authorities below, to our mind, is not tenable at all being based on fake inferences drawn. The assessee is a separate and distinct assessee under the Act and is to be assessed on the basis of material which belongs to it or specifically relevant for its assessment. In the instant case no specific document is pointed out belonging to the assessee nor any evidence or material,whatsoever, has been demonstrated by the authorities below to show that the assessee had paid interest on PDCs. Therefore, there being no definite material belonging to the assessee, in our opinion, the reasons recorded for initiation of proceedings u/s. 147 against the assessee, are not in consonance with law, havin....