TaxTMI 
TaxTMI 
2023 (12) TMI 800
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....t there is no specific reference of any seized material belonging to the appellant on the basis of which above finding was given, and ii. that no enquiries were made from any of the alleged recipients of the interest and none was confronted with relevant document(s). 2.1 That the finding of the CIT(A) is based on mere surmises and conjectures without proof and corroboration by independent evidence. 2.2 That without prejudice the CIT(A) erred in upholding the addition of interest for the period for which PDC's were extended. 2.3 That without prejudice the CIT(A) erred in not quantifying the addition and instead giving ambiguous directions to compute the interest after six months from the date of sale. 3. That on the facts and circumstances of the case and in law the CIT(A) erred in not accepting the appellant's contention that Additional Payments having not been claimed as deduction by appellant, no disallowance could have been made in the hands of the appellant. 3.1 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. 3.2 That ....
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....deletion of the addition by the CIT(A) the Department filed an Appeal in ITA No. 2739/Del/2013 which was dismissed by the Tribunal on 07/11/2019 due to low tax effect. Aggrieved by the order of the CIT(A) in sustaining the additions/disallowances the Assessee preferred the present Appeal on the grounds mentioned above. 5. In Ground No. 1, the assessee contended that the CIT(A) erred in rejecting the Assessee's contention that the assumption of jurisdiction by Assessing Officer for making assessment u/s 153C of the Act was bad on facts and in law, thereby rendering the assessment also as bad in law and void ab- initio. 6. The Ld. Counsel for the assessee submitted that the assessment was completed u/s 153C of the Act as no search was carried out on the assessee, the A.O. relied upon various seized documents found during the course of search on BPTP Group wherein none of the documents are said to be incriminating in nature and none of the documents relate/pertain to the assessee. The disallowance made as per Explanation 2 Section 37(1) on account of additional payment made to the farmers and the disallowance made u/s 40A(3) of the Act in assessment order passed u/s 153C of the Act ....
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....ame, there is a specific finding of the CIT(A) that 'the analysis of the seized documents reveals that the seized documents definitely proves that interest is paid on PDC'. The conclusion of the CIT(A) is reproduced as under:- "Learned AR has been maintain all along that interest is not paid as all the receipts are only memorandum only. Analysis of these above seized document reveals that these seized documents definitely proves that interest is paid on PDCs. Various voucher in seized documents conclusively proves that the recipient has signed on voucher for receipt of the interest. Ld AR's contention that these are only working of interest claimed by seller for putting up before senior management does not appear to be convincing. In case of claim, the receiver will not sign the voucher as recipient. Amounts are specific and calculation is 15% per annum. Therefore, Ld AR without conceding that the interest is paid on PDCs has taken the stand that in none of the seized material, i.e. even in receipt seized, the interest is from date of issue of PDCs. Now issue arises whether interest on PDCs are paid from date of issue or for extension of PDCs. Documents discussed above where ....
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....ch case then A.O. is directed to recomputed interest on PDCs after six months from date of issue of PDCs i.e. date of sale, as six months is taken as reasonable period for giving PDC as per sale deed. This view is formed on the basis the statement of Sh. Chhotu Ram which says that normally PDCs are given for 8 to 10 months. Further Ld AR has also submitted few Sale Deed in respect of some of Seized record in the case of Ramvati Beero etc where the interest working is made after 9/ 15 months. Taking these facts into consideration. It would be proper to compute interest after 6 months from date of Sale on conservative side. Accordingly this ground is partly allowed." 10. Since the addition made by the AO is based on the incriminating documents seized during the course of search carried out on BPTP on 15.11.2007 and the documents seized relates to the assessee company, the AO has rightly invoked the provisions of Section 153C of the Act. Thus, the judgments relied upon by the assessee of Hon'ble Delhi High Court in the case of Kabul Chawla 380 ITR 589, (Delhi) and others judgment are not applicable to the facts of the case. It is also found that in the order of the coordinate Bench ....
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....e company keeps record to manage funds availability for clearing the PDCs. Nowhere on this paper, there is a mention of interest paid on this amount. I have considered the A.O's finding and argument of Ld AR and contents of paper. I agree with Ld AR that no where the interest word or calculation is mentioned in this paper. Therefore, this paper does not correlate the payment of interest on PDCs. (ii) Page no. 93 Annexure AI party BO1. (Annexed to Assessment order) I have perused this paper. This page is computer printout having different column. Various columns of this page contains Name of the seller, the name of purchaser company i.e. Associate Group Company of BPTP Group namely STP, (Shalimar Town Planning Ltd) and JB(.............), area of land, cost of land, etc. Last column mentions calculation of one month interest (15% on PDC). Total such interest is calculated for Rs. 5,05,84,042. This paper shows that some calculation of this sheet at the rate of 15% interest. Ld AR emphasized that there is no payment mentioned to a particular person. Further, he argued that total interest calculated for one month for all the land mentioned is Rs. 5.05.84,042 and total sale con....
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....21,875 Rs. 51,21,875 Pg 30 3 Sh. Ratan Singh and Azad Kumar 0.51 acres Rs. 35,43,750 Rs. 4,46,425 Pg 32 S. No. Interest received Reference of seized material for int. received 1 Rs. 55,000/- Pg. 28 of Annexure-A- 2, BO-III 2 Pg. 26 of Annexure-A- 2, BO-III During post search enquiry. Bank statement of five persons above namely Smt. Rajwati, Sh. Rampal, Sh. Rattan Singh and Azad Singh, Sh. Vijay Pratap and Sh. Kartar Singh were obtained and cash deposit were found. A.O. has tried to establish that source of these cash deposit are interest on PDCs learned AR has argued that source of cash deposit in Bank Account of these persons can only be explained by them. None of them were examined or asked to explain their source. Ld AR further argued that Assessing Officer has not during assessment proceeding has given an opportunity or shown these Bank statement before being used against the appellant in Assessment Order. Therefore, linking of these cash deposit with assumption of interest on PDCs is only hypothesis of A. O. As far as interest receipt by seller, and mentioned in seized mat....
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....5 lacs dt. 4.11.2007 with the signature of recipient. Ld AR explain that the paper was explained during assessment proceeding that it was debit not for Rs. 5 lacs for purchase of stamp and sent for approval. The same stand is reiterated during appellate proceeding. As this voucher contains receiver signature. Therefore, it is difficult to accept appellant's submission. Therefore, it is unacounted payment. A.O has treated as interest. However interest is not written on this paper. Therefore it is not related to interest. However, this payment has to be treated as unaccounted payment in the hands of payer u/s 69B. A.O. has to identify the payer company and assess the same u/s 69B. (ix) Page no. 36, Annexure A-1, BO-3. This page is also debit voucher for cash payment of Rs. 1,00,000 duly signed by the receiver with a remark 'interest paid to Ram Singh/ Nanak for Rs. 80,00,000/- for the month of November. It is pertinent to note that if we apply 15% per annum on Rs. 80,00,000/- it comes to Rs. 1,00,000. During appellate proceeding, L.d AR has reiterated that no payment of interest was made, it is only voucher for approval of senior management. Since on the voucher it is c....
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....id to Jaipal for Rs. 1,00,000 in cash duly signed by receiver with remark For October Ld. AR's argument that is is only memorandum or demand cannot be accepted. (xiv) Page 80. Annexure A-9 Party BO-3 It contains many jottings of cash receipt and payment. At serial no. 7 on this page, against interest paid to Ramvati & Veero is written for figure Rs. 14.33,000/-. The Ld. AR reiterated it to be only a memorandum. (xv) Page no. 25, Annexure A-2 Party Bo-3 is again jotting of some cash receipt and payment at sr. no. 15, the narration is interest paid to Jaipal Rs. 10.00.000 for month of October, Ld. AR explained it be memorandum of some employee. (xvi) Page no 27 of Annexure A2 of party BO-II. This page again contains jotting of some cash transaction. AT item no. 7, the narration is 'Kaptan (int)- 11,00,000. The Ld. AR again explained it to be memorandum of employee. (xvii) Page No. 70, Annexure A1, Party BO-3 Interest &nbs....
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....nbsp; = 8, 12,500/- Total Interest 5,00,000 8,75.000 A.O. has correlated these transactions with Shalimar Town Planners (P) Ltd. and has stated that these interest paid of Rs. 21.87.....
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.... AR further reiterated that there is no such transaction in Green Valley Housing & Land Developers (P) Ltd. A.O. may verify the same. Further as per this receipt, it is for extension of period of some cheque & interest has been acknowledged by the receiver for extension of time. (xxiii) Page 55-56 of Annexure A-23, Party BO-III. It is an oath paper on Non Judicial stamp of Rs. 10 signed by Ramvati and Biro, daughters of late Harijivan stating that they have sold land at Khedikalan and Ramvati has received for Rs. 1.52,94,500 vide cheque no. 834868 and Rs. 4, 20,45,625 vide cheque no. 8348 72 both and dt. 12.10.2007. Biro has received Rs. 1,52,94,500 and Rs. 4.20,45.625 vide cheque no. 834869 and 839873 respectively both dt. 12.10.2007 from Shalimar Town Planners (P) Ltd. The date is extended and interest is receivable. However, no date of extension is mentioned and no interest amount is mentioned in this oath paper." 15. It is observed that the Assessee has challenged the similar addition before the Tribunal in AY 2006-07 & 2008-09 in ITA No. 1824 & 1826/Del/2013 wherein the Assessee has not pressed the said ground and the same has been dismissed by the Tribunal. Since, we hav....
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....ks of account and included in the principle loss or that separate amount was used for that purpose. It was submitted that the amounts in fact constituted flagrant violation of law in as much as the provisions of the Stamp Act and other connected laws were sought to be evaded by the sale deed. 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 alleged violation of law, but such violation as results in a penal consequence, determined by that law, which is attracted by Section 37(1). The other interpretation would confer jurisdiction on matters beyond the Income Tax Act. The revenue authorities do not have such powers. Revenue Authority argued that this is to decide what constitutes infraction of other provisions of law. No question of law arises, therefore, on this issue" 19. By respectfully following the ratio laid down by the Jurisdictional High Court in the case of Vasundhra Pro....