TaxTMI 
TaxTMI 
2023 (12) TMI 800
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....terest is paid on PDC' in view of the fact:- i. that 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 ....
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....00/-. iii) Addition on account of disallowance made as per explanation to Section 37(1) in respect of additional payment of Rs. 1,05,000/-. 4. As against the 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 Ex....
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....inating seized document Not incriminating 9. On the contrary, on perusal of order of the CIT(A), regarding 'Findings on seized material', it is found that the Ld. CIT(A) has referred the seized materials at page No. 7 to 14 of the order. Apart from the same, 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....
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....re established on numerous seized documents. A trend is established for the group as the overall management is controlled by one person Sh. Kabul Chawla and activities of all companies are interrelated. If it is not possible to work out the extension of PDCs in each 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 ....
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.... BO III seized from B-1/ A-5, Mohan Nagar Indl co-operative Estate, New Delhi. A.O. has stated that total amount of PDCs are Rs. 188 crores and mentioned that interest @ 15% is paid on PDCs Ld AR during appellate proceedings has stated that definitely this page contains details of PDCS which the 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 ....
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.... various seized document and different persons as under:- S. No. Name of the seller Area of Land Amt. of sale consideration Amt of additional payment Reference of seized material 1 Smt. Rajwati 5.56 acres Rs. 2,25,75,000 Rs. 13,43,750 Pg. 35 of Annexure1, Party BO1 2 Sh. Ramphal 0.93 acres Rs. 51,21,875 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 exa....
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....ount is written in the case of Countrywide Promoters Pvt. Ltd. Without any amount. (vii) Page 88, Annexure A1 Party 303 This page is debit voucher of cash payment of Rs. 13, 80,000/- duly signed by receiver. Ld AR explained it to be return of advance given by recipient Sh. Vijay Pratap. However, Since it is a signed voucher, it is apparently unaccounted cash payment. (vili) Page no. 35, Annexure A-2, BO-3 It is debit voucher of cash payment of Rs. 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 n....
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....rest was paid. (xii) Page No. 36, annexure A-2, Party BO3 This is again a debit voucher of cash payment of Rs. 1,90,000 paid to one Sh. Sadanand. The Ld AR reiterated the stand taken before AO that Sadanand is consultant and the debit voucher is duly signed by receiver. Therefore, explanation of Id. AR cannot be accepted. However, there is no mention of interest paid' on this voucher. (xiii) Page no. 37, Annexure A-2, Party BO-3 This page is again a debit voucher at 09.10.2007 with narration interest paid 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 employe....
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....nbsp; = 8,75.000/- 25 lacs cheque cleared on 6-2-2007 Bal. Amt. 3, 25, 00,000/-(2months) Interest = 8, 12,500/- Total Interest 5,00,000 &....
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....e in cash. The reply of Ld AR is not convincing. (xxii) Page 53/ A-23/BO-III The page contains receipt with full narration in Hindi duly signed by one Sh. Gaje Singh which states that he has entered in agreement to sale for land in Mauja Sihi sale for dt 7.6.2007 with M/s Green Valley Housing and Land Development (P) Ltd. He has received Rs. 1,22,47,482 vide cheque no. 275435 and Rs. 5.75.000 vide cheque no. 275440 both dated 31.10.2007. In lieu of extension of date of these two cheques by one month @ 15% on 29.10.2007. Further he writes that he has accepted the extension of date without any pressure. Ld AR reiterated the stand that the farmer has demanded the interest which was never paid. Ld. 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 lan....
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....ide order dated 14/05/2018, not admitted the Appeal filed by the Revenue on the issue of disallowance of additional payment. Therefore, sought for deletion of the sustained disallowance. 18. Heard. The Jurisdictional High Court in the case of Group Company of the Assessee i.e. M/s Vasundrha Promoters Pvt. Ltd. dismissed the Appeal filed by the Department in ITA No. 211/2018, vide order dated 14/05/2018, held as under:- "The second question of law urged is with respect to the payment of Rs. 1,05,86,958/- made by the assessee to the farmer/owners of the agricultural land from whom the land was purchased. It is contended by the Revenue that the ITAT ought not to have gone by the fact that the amount was routed from the books 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 th....