UGC Buildwell Pvt. Ltd., New Delhi v. ACIT, New Delhi

ITA 2155/DEL/2015 | 2005-2006
Pronouncement Date: 12-03-2021 | Result: Allowed

Appeal Details

RSA Number 215520114 RSA 2015
Assessee PAN AAACU4507B
Bench Delhi
Appeal Number ITA 2155/DEL/2015
Duration Of Justice 5 year(s) 10 month(s) 29 day(s)
Appellant UGC Buildwell Pvt. Ltd., New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 12-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 12-03-2021
Last Hearing Date 11-02-2020
First Hearing Date 11-02-2020
Assessment Year 2005-2006
Appeal Filed On 13-04-2015
Judgment Text
1 ITA NOS. 1351 & 2155/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI N. K. BILLAIYA ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE JUDI CIAL MEMBER (THROUGH VIDEO CONF ERENCING) I.T.A. NO.2155/DEL/2015 (A.Y 2005-06) USG BUILDWELL PVT. LTD. M-11 MIDDLE CIRCLE CONNAUGHT CIRCUS NEW DELHI AAACU4507B (APPELLANT) VS ADDITIONAL COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-32 NEW DELHI (RESPONDENT) I.T.A. NO.1351/DEL/2015 (A.Y 2006-07) USG BUILDWELL PVT. LTD. M-11 MIDDLE CIRCLE CONNAUGHT CIRCUS NEW DELHI AAACU4507B (APPELLANT) VS DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-32 NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST ORDER DATED 21/11/2014 & 30/12/2014 PASSED BY CIT(A)-XXX NEW D ELHI FOR ASSESSMENT YEAR 2006-07 & 2005-06 RESPECTIVELY. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- APPELLANT BY SH. AJAY BHAGWANI CA RESPONDENT BY SH. SATPAL GULATI CIT DR DATE OF HEARING 02.02.2021 DATE OF PRONOUNCEMENT 12.03.2021 2 ITA NOS. 1351 & 2155/DEL/2015 I.T.A. NO.2155/DEL/2015 (A.Y. 2005-06) 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW NO INCRIMINATING DOCUMENTS HAVING BEEN SEIZED IN THE C OURSE OF SEARCH U/S 132 ON 07.12.2010 ON THE ASSESSEE THE ADDITION OF RS.3 0LACS WAS NOT PERMISSIBLE IN THE ASSESSMENT MADE U/S 153A OF THE ACT AND THE INCOME DECLARED AND ASSESSED ON 27.02.2006 U/S 143(1) AT RS.2 71 770/- OUGHT TO HAVE BEEN ACCEPTED. 2. THAT WITHOUT PREJUDICE THE ORDER PASSED BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS BAD ON FACTS AND IN LAW IN AS MUCH AS IT SUFFERS FROM THE VICE OF VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND DENIAL OF OPPORTUNITY OF BEING HEARD RENDERING THE ASSESSMEN T VOID AB INITIO. 3. THAT WITHOUT PREJUDICE ON THE FACTS AND CIRCUMST ANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.30 00 000/- AS INCOME FROM UNDISCLOSED SOURCES. 4. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS)-XXX NEW DELHI ARE BAD IN LAW AND VOI D AB INITIO. I.T.A. NO.1351/DEL/2015 (A.Y. 2006-07) 1. THAT THE ORDERS PASSED BY THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS)-XXX NEW DELHI ARE BAD IN LAW AND VOID AB-INITIO. 2. THAT THE CIT(A) ERRED IN UTILIZING THE MATERIAL SEIZED IN THE COURSE OF SEARCH ON BPTP GROUP OF CASES (EXCLUDING APPELLANT) ON 15.11.2007 WHICH DID NOT BELONG TO THE APPELLANT. 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) HAS ERRED IN HOLDING THAT WHEREVER THE DATE OF PDCS ARE EXTENDED INTEREST IS TO BE TAKEN TO HAVE BEEN PAID @ 15% P.A IN CASH OUTSIDE THE BOOKS OF ACCOUNT AND IS TO BE TREATED AS UNDISCLOSED INCO ME. 2.2 THAT NO ENQUIRIES WERE MADE FROM ANY OF THE AL LEGED RECIPIENTS OF THE INTEREST AND NONE WAS CONFRONTED WITH THE RELEV ANT DOCUMENT(S). 2.3 THAT THE ADDITION WAS UNWARRANTED BEING BASED MERELY ON SURMISES AND CONJECTURES WITHOUT PROOF AND CORROBOR ATION BY INDEPENDENT EVIDENCE. 3 ITA NOS. 1351 & 2155/DEL/2015 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) ERRED IN NOT ACCEPTING THE APPELLANT'S CONTENTION T HAT 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 UPHO LDING THE DISALLOWANCE OF ADDITIONAL PAYMENTS MADE TO THE REC IPIENTS WHO WERE NOT THE OWNERS OF LAND AND TO THE PAYMENT MADE IN CASH. 3.2 THAT WITHOUT PREJUDICE THE CIT(A) ERRED IN NOT HIMSELF QUANTIFYING THE ADDITION TO BE MADE. 4. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW THE CIT(A) ERRED IN SUSTAINING THE DISALLOWANCE OF RS.408 490/- U/S 40A(3) OF THE IT ACT DESPITE THE RACT THAT NO DEDUCTION IN RESPECT OF SA ID SUM WAS CLAIMED IN THE COMPUTATION OF INCOME FROM BUSINESS. 4.1. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW THE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE U/S 40A(3) OF RS. 4 08 490/- DESPITE THE FACT THAT SIMILAR DISALLOWANCE MADE UNDER SIMILAR C IRCUMSTANCES WAS DELETED BY ITAT VIDE ORDER DATED 22.08.2014 IN ITA NO. 1752 /DEL/2013 IN CASE OF M/S WESTLAND DEVELOPER PVT. LTD. FOR THE ASSESSMENT YEAR 2006-07 BEING A GROUP COMPANY COPY OF WHICH ORDER WAS FILED BEFORE THE CIT(A) AND WHOSE FACTS WERE AKIN TO THE FACTS OF THE APPELLANT COMPA NY. 3. FIRSTLY WE ARE TAKING THE APPEAL FOR A.Y. 2005-0 6. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE VARIOUS PREMISES O F M/S BPTP LTD. AND ITS GROUP CONCERNS AND ASSOCIATED PERSON ON 7/12/2010 A ND FINALLY CONCLUDED ON 5/2/2011. THE ASSESSEE IS A COMPANY INCORPORATED UN DER COMPANIES ACT 1956. IT HAD FILED ITS ORIGINAL RETURN OF INCOME F OR ASSESSMENT YEAR 2005-06 DECLARING TOTAL INCOME AT RS.2 71 770/- ON 30/10/20 05. ON 11/1/2012 THE ASSESSING OFFICER ISSUED A NOTICE U/S 153A OF THE A CT. IN RESPONSE TO SAID NOTICE RETURN WAS FILED ON 23/1/2012 DECLARING THE TOTAL INCOME AT RS. 2 71 770/-. THE ASSESSING OFFICER ISSUED A SHOW CA USE NOTICE DATED 1/3/2013 IN WHICH THE ASSESSING OFFICER RAISED A QUERY RELAT ED TO THE STATEMENT OF SHRI SURESH KUMAR GUPTA WHEREIN CERTAIN ACCOMMODATION EN TRY TO THE ASSESSEE 4 ITA NOS. 1351 & 2155/DEL/2015 COMPANY WAS DEPICTED. THE ASSESSING OFFICER OBSERV ED THAT THE SUM OF RS. 30 00 000/- WAS RECEIVED AS ACCOMMODATION ENTRIES A ND ASKED THE ASSESSEE TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THES E CREDITOR AND GENUINENESS OF TRANSACTION U/S 68. THE ASSESSEE FILED ITS SUBMISS ION AND DETAILS BEFORE THE ASSESSING OFFICER. AFTER TAKING COGNIZANCE OF THE SAME THE ASSESSING OFFICER MADE ADDITIONS OF RS. 30 00 000/- WHICH WAS CREDITE D BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS IN THE FORM OF SALE OF INVESTMENT TO M/S NAMRATA MARKETING PVT. LTD. DURING FINANCIAL YEAR 2004-05 AND TREATED THE SAME AS THE DEEMED/UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE INCOME TAX ACT 1961. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A) . THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE. 5. THE LD. AR SUBMITTED THAT A SUM OF RS. 30 00 00 0/- WAS RECEIVED BY WAY OF SALE OF SHARES OF M/S ALLIANCE BUILDCON (IND IA) PVT. LTD. TO M/S NAMRATA MARKETING PVT. LTD. AND SALE PROCEEDS WERE RECEIVED BY CHEQUE FROM M/S NAMRATA MARKETING PVT. LTD. THE SAID SHARES WERE AL LOTTED TO THE ASSESSEE COMPANY IN PRECEDING YEAR ON 30/03/2003 BY MAKING P AYMENT THROUGH CHEQUE. THE COPIES OF THE SHARE CERTIFICATES WERE FILED BEFORE THE ASSESSING OFFICER FOR REFERENCE. THEREFORE THE SOURCE OF AM OUNT IS TRACED BACK TO THE PRECEDING YEAR AND CREDIT DURING THE YEAR IS NOTHIN G BUT REDEMPTION OF EARLIER INVESTMENT. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE FILED DETAILED REPLY AND SUBMITTED THAT SINCE THE SAID SUM WAS REC EIVED ON ACCOUNT OF SALE OF INVESTMENT THE SAME CANNOT BE HELD AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE ACT. THE LD. AR SUBMITTED THAT NOTICE U/S 14 8 WAS NOT SERVED AT THE TIME OF SEARCH. THUS THE LD. AR SUBMITTED THAT TH E ASSESSING OFFICER AS WELL AS THE CIT(A) HAS NOT TAKEN A PROPER COGNIZANCE OF THE ASSESSEES CLAIM AND MADE ADDITIONS. THUS THE LD. AR PRAYED THAT THE AD DITION BE DELETED. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 5 ITA NOS. 1351 & 2155/DEL/2015 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE SEARCH AND SEIZURE IN RESPECT OF ASSESSEE COMPA NY HENCE THE DECISION OF THE DELHI HIGH COURT IN CASE OF KABUL CHAWLA IS SQU ARELY APPLICABLE IN THE PRESENT CASE. THE HONBLE DELHI HIGH COURT HELD AS UNDER: SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT READ WITH THE PROVISOS THERETO AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE A O WHICH CAN BE RELATED TO THE EVIDENCE FOUND IT DOES NOT MEAN THAT THE ASSES SMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. THOSE 6 ITA NOS. 1351 & 2155/DEL/2015 PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSE SS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARAT ELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS 2002-03 2005- 06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STO OD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. SINCE NO INCRIMINATING MATERIAL WAS FOUND IN THE AS SESSEES CASE NO ADDITION CAN BE MADE IN THE PRESENT CASE. BESIDES THIS THE ASSESSEE HAS MADE INVESTMENT IN PRIOR PERIOD AND SOLD THE SAID INVEST MENT IN THIS PARTICULAR YEAR WHICH WAS CLEARLY SET OUT FROM THE SUBMISSIONS AND THE EVIDENCES PRODUCED BEFORE THE ASSESSING OFFICER AND THE CIT(A). THERE FORE THE APPEAL OF THE ASSESSEE BEING ITA NO. 2155/DEL/2015 FOR ASSESSMENT YEAR 2005-06 IS ALLOWED. 8. NOW WE ARE TAKING UP APPEAL BEING I.T.A. NO.1351 /DEL/2015 FOR A.Y. 2006-07. THE ASSESSEE IS A GROUP COMPANY OF BPTP LT D WHICH IS THE FLAGSHIP COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE DEV ELOPMENT. A SEARCH WAS CONDUCTED ON M/S BPTP LTD ON 07.12.2010 INCLUDING T HE ASSESSEE. A NOTICE WAS ISSUED U/S 153A ON 11.01.2012 IN RESPONSE TO WH ICH RETURN WAS FILED ON 30.01.2012. THE PRESENT ASSESSMENT WAS MADE U/S 153 A OF THE ACT AFTER MAKING FOLLOWING ADDITIONS/ DISALLOWANCES:- 7 ITA NOS. 1351 & 2155/DEL/2015 I) ON ACCOUNT OF INTEREST ON PDCS OF RS.9 81 326/- II) ON ACCOUNT OF DISALLOWANCE U/S 37(1) ON ADDITIONAL PAYMENT OF RS.5 92 250/- III) DISALLOWANCE U/S 40A(3) OF RS.4 08 490/- 9. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 10. THE LD. AR SUBMITTED THAT GROUND NO.1 2 2.1 2.2 & 2.3 AND 5 ARE NOT PRESSED. HENCE GROUND NO. 1 2 2.1 2.2 2.3 AND 5 ARE DISMISSED. 11. THE LD. AR SUBMITTED THAT AS REGARDS TO GROUND NO. 4 AND 4.1 (ASSESSEES APPEAL) AGAINST THE DISALLOWANCE U/S 40 A(3) - RS.4 08 490/- THE ASSESSEE HAD PURCHASED LAND AND MADE PART PAYMENT O F RS.4 08 490/- IN CASH. THE DEVELOPMENT RIGHTS IN LAND PURCHASED WERE ASSIGNED IN FAVOUR OF M/S COUNTRYWIDE PROMOTERS PVT. LTD PURSUANT TO COLL ABORATION AGREEMENT ENTERED INTO WITH THEM. THE ASSESSEE HAS RECEIVED R EIMBURSEMENT OF ALL AMOUNTS PAID RELATED TO TRANSACTION OF PURCHASE OF LAND. STAMP DUTY. REGISTRATION CHARGES ETC. AS PER CLAUSE 3(B) OF CO LLABORATION AGREEMENT. AN AGREEMENT WAS ENTERED INTO ON 15.09.2004 BETWEEN AS SESSEE AND M/S COUNTRYWIDE PROMOTERS PVT. LTD (HEREINAFTER CWPP). BASED ON THE AGREEMENTS THE ASSESSEE SHOWED THE INCOME BY WAY OF FEES @ RS. 35000/- PER ACRE IN THE YEAR IN WHICH LICENSE ON SAID LAND WAS RECEIVED. THE LD. AR SUBMITTED THAT THE CIT(A) IS TOTALLY INCORRECT IN STATING THAT IT IS D IFFICULT TO ACCEPT THE AR'S CONTENTION THAT THE COST OF LAND IS REIMBURSED BY C WPPL. IN STATING SO THE CIT(A) TOTALLY IGNORED THE FACT THAT PARA 3(B) OF T HE COLLABORATION AGREEMENT CLEARLY SHOWS THAT CWPP SHALL REIMBURSE ALL COSTS A ND EXPENSES INCURRED BY THE ASEESSEE WITH RESPECT TO THE ACQUISITION OF SAI D LAND. IN THE BOOKS OF ACCOUNT MAINTAINED CONTEMPORANEOUSLY THE SUM RECEIV ED FROM CWPP WAS SHOWN AS REIMBURSEMENT. THE BOOKS OF ACCOUNTS ARE D ULY ACCEPTED BY THE LOWER AUTHORITIES AND CIT(A) ARE NOT REJECTED. WHAT THE CIT(A) HAS DONE IS TO 8 ITA NOS. 1351 & 2155/DEL/2015 BRUSH ASIDE THE TERMS OF AGREEMENT AND THE FACT THA T THE TERMS OF AGREEMENT WERE CARRIED OUT AND THAT REIMBURSEMENT WAS ACTUALLY MADE. IN DISREGARDING THE ABOVE EVIDENCE THE CIT(A) HAS UNFORTUNATELY DOI NG NOTHING BUT TO REWRITE THE AGREEMENT WHICH AS REFERRED TO ABOVE IS NOT P ERMISSIBLE BY HIM AS A TAXING AUTHORITY IT IS NOT NECESSARY TO DWELL FURT HER ON THIS EVIDENT MATTER. THE LD. AR FURTHER SUBMITTED THAT THE CIT(A) IS WRONG A ND INCORRECT IN STATING THAT ASSESSEE WAS 'ENGAGED IN THE BUSINESS OF DEVELOPMEN T OF REAL ESTATE 1 . PARA 1 OF THE ADDENDUM CLEARLY SHOWS THAT CWPP SHALL SHARE 10 0% OF BUILT UP AREA AND ASSESSEE SHALL HAVE NO RIGHT IN THE FSI. THE AO HAS ACCEPTED THESE BOOKS OF ACCOUNTS ARE NOT REJECTED BY AO. ON THESE FACTS TH E CIT(A) IS TOTALLY WRONG IN STATING THAT ASSESSEE IS CARRYING ON OR ENGAGED THE BUSINESS OF DEVELOPMENT OF REAL ESTATE. IT IS PLAIN THAT ASSESSEE NOT BEING ENTITLED TO ANY INCOME FROM THE DEVELOPMENT OR REAL ESTATE CANNOT IN ANYWAY BE SAI D TO BE CARRYING ON OR ENGAGED IN THE BUSINESS OF DEVELOPMENT OF REAL EST ATE. THE CIT(A) IS WRONG IN STATING THAT THE RECEIPTS TOWARDS COST OF LAND FROM CWPP ARE REVENUE RECEIPTS IN THE HAND OF THE ASSESSEE. THE CIT(A) HAS IGNORED THE FACT THAT RECEIPTS FROM CWPP TOWARDS THE COST OF LAND WERE NOT THE TRADING RECEIPTS OF THE ASSESSEE BUT WERE REIMBURSEMENT OF COST INCURRED BY THE ASSE SSEE WITH RESPECT TO THE ACQUISITION OF THE SAID LAND AS PER PARA 3(B) OF TH E AGREEMENT (PAGE 8 OF PAPER BOOK). TO SAY THAT IT IS THE TRADING RECEIPT AGAIN AMOUNTS TO REWRITING THE AGREEMENT BETWEEN THE ASSESSEE AND CWPP. /AS STATED THE COURTS INCLUDING THE APEX COURT HAVE FROWNED UPON THE ATTEMPT OF TA XING AUTHORITIES TO REWRITE THE AGREEMENT IN THE GARB OF INTERPRETING THE SAME. THE CIT(A) HAS ALSO ERRED IN IGNORING THE SETTLED LEGAL POSITION THAT A REIMB URSEMENT UNDER NO CIRCUMSTANCES CAN BE REGARDED AS REVENUE RECEIPT AS HELD IN- (I) CIT VS. TEJAJI FARASRAM KHARAWALA 67 1TR 95 (SC) AND (II) THE JURISDICTIONAL HIGH COURT IN CIT VS . INDUSTRIAL ENGINEERING PROJECTS PVT. LTD. 202 ITR 1014 (DELHI). THESE JUDGMENTS WERE REFERRED TO BUT THE CIT(A) SK IRTED TO DEAL WITH THEM. 9 ITA NOS. 1351 & 2155/DEL/2015 MORE RECENTLY HON'BLE BOMBAY HIGH COURT IN DI(INTER NATIONAL TAXATION) I/S. KRUPP UDHE GMBH 354 ITR 173 (BOMBAY) FOLLOWING DELH I HIGH COURT JUDGMENT IN INDUSTRIAL ENGINEERING PROJECTS (P) LTD (SUPRA) HAVE HELD THAT REIMBURSEMENT OF EXPENSES WOULD NOT BE LIABLE TO BE INCLUDED IN INCOME. TO CONCLUDE A REIMBURSEMENT CAN NEVER BE A TRADING REC EIPT. THE LD. AR SUBMITTED THAT THE CIT(A) IS EQUALLY WRONG IN HOLDI NG THAT THE COST OF LAND IS EXPENDITURE IN APPELLANTS HAND. HERE AGAIN THE CI T(A) IGNORED THE SETTLED POSITION AS TO WHAT CONSTITUTES EXPENDITURE. THE LD. AR RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF GENERA L INSURANCE COMPANY OF INDIA LTD VS. CIT 2401TR 139(SC) THE COURT EXPLAINE D THE TERM EXPENDITURE. IN THE PRESENT CASE THE COST OF LAND IS NOT INCURRED OUT OF ASSESSEES POCKET AND MORE IMPORTANTLY IS NOT SOMETHING WHICH HAS GONE IR RETRIEVABLY. AFTER IT IS INCURRED IT IS REIMBURSED TO THE ASSESSEE. HENCE T HE SAME DOES NOT HAVE THE ATTRIBUTES OF 'EXPENDITURE'. FURTHER IN ATTAR SINGH GURMUKH SINGH 191 ITR 667 (SC) EXPENDITURE WAS HELD TO MEAN WHICH HAVE BEEN TAKEN INTO ACCOUNT WHILE DETERMINING THE PROFIT U/S 28 AND PURCHASE O F STOCK-IN-TRADE IS ONE SUCH OUTGOING WHICH WOULD BE COVERED BY THE WORD EX PENDITURE. IN THE PRESENT CASE COST OF LAND CANNOT BE TAKEN INTO DETERMINING PROFIT U/S 28 NOR FOR ACQUISITION OF STOCK-IN-TRADE. THE LD. AR ALSO SUBM ITTED THAT THE DECISIONS IN CASE OF TUTICORIN ALKALI CHEMICALS & FERTILIZERS (S UPRA) AND CIT VS. SUN ENGG WORKS PVT. LTD 198 ITR 297 (SC) ARE NOT APPLICABLE IN PRESENT CASE. IN THE PRESENT CASE THE CIT(A) HAS CHALLENGED THE ACCOUNT S AND HAS IN EFFECT REWRITTEN THEM HIMSELF BY CASTING A TRADING AND PRO FIT AND LOSS ACCOUNT. THE ACTION OF THE CIT(A) AS STATED SUPRA IS BASED ON CH ALLENGING THE BOOKS OF ACCOUNT BY CONSTRUING THE ACTIVITY OF THE ASSESSEE IN THE MATTER OF PURCHASE OF LAND AND TRANSFERRING ITS DEVELOPMENT RIGHTS AS A T RADING ACTIVITY. THE CIT(A) HAS NOT INVOKED PROVISIONS OF SECTION 145 IN REJECT ING THE ACCOUNTS. THE ENTIRE ORDER IS OF BARREN OF ANY FINDING WHATSOEVER THAT S ECTION 145 WAS APPLICABLE AND THEREFORE CIT(A) WAS NOT PERMITTED TO REJECT THE ACCOUNTED VERSION IN TH E MANNER HE HAS DONE AND TO HOLD THAT SECTION 40A(3) WAS APPLICABLE. THE LD. AR FURTHER SUBMITTED THAT THE COST OF ACQUISITION O F LAND WAS NOT AN 10 ITA NOS. 1351 & 2155/DEL/2015 EXPENDITURE IN THE HANDS OF THE ASSESSEE AND IT WAS NEITHER DEBITED TO PROFIT AND LOSS ACCOUNT NOR IT WAS CLAIMED THROUGH COMPUTA TION OF INCOME AND THEREFORE WAS NOT SUBJECT TO THE PROVISIONS OF SECT ION 40A(3). THE COST OF LAND HAVING NOT BEEN CLAIMED AS EXPENDITURE THERE COULD BE NO DISALLOWANCE U/S 40A(3). ON THE PROPOSITION THAT NO DISALLOWANCE CAN BE MADE U/S 40A(3) WHERE NO DEDUCTION IS CLAIMED THE LD. AR RELIED UPON THE FOLLOWING DECISIONS:- I) CIT VS. MOTILAL KHATRI (2008) 218 CTR 602 (RAJ.) II) CIT FARIDABAD VS. ALPHA TOYO LTD (2008) 174 TAXMANN 427 (PUNJ. & HAR.) III) CIT VS. BANWARI LAI BANSIDHAR [1998] 229 ITR 2 29 (ALL) IV) EMBEE CLEARING & SHIPPING SERVICE PVT. LTD [2007] 1 2 SOT 227 (MUM.) THUS THE LD. AR SUBMITTED THAT THE DISALLOWANCE U/ S 40A(3) SHOULD BE DELETED. THE ISSUE OF DISALLOWANCE U/S 40A(3) OF CA SH PAYMENT MADE FOR PURCHASE OF LAND WAS FIRST DECIDED BY THE TRIBUNAL NEW DELHI IN THE CASE OF ANOTHER GROUP COMPANY OF M/S BPTP GROUP VIZ. M/S W ESTLAND DEVELOPERS PVT. LTD VIDE ORDER DATED 22.08.2014 IN ITA NO.1752/DEL/ 2013. THE TRIBUNAL HELD AS UNDER IN PARA 10.10:- 'ACCORDINGLY ON A CONSIDERATION OF THE PECULIAR FAC TS AND CIRCUMSTANCES OF THE CASE AND THE JUDGMENTS RELIED UPON CONSIDERING THE RELEVANT PROVISION OF THE ACT NAMEL Y SECTION 40A(3) WE HOLD FOR THE DETAILED REASONS GIVEN HERE INABOVE THAT SECTION 40A(3) OF THE ACT HAS BEEN WRONGLY INVOKED AS ADMITTEDLY NO EXPENSES RELATABLE TO THE ADDITION HAS BEEN CLAI MED AND THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THAT THE PAY MENT WERE REIMBURSEMENT MADE BY CWPPL. ACCORDINGLY GROUND NO- 4 IS ALLOWED' THE DISALLOWANCE MADE BY THE ASSESSING OFFICER CON FIRMED BY THE CIT(A) WAS DELETED BY ACCEPTING THE PLEA OF ASSESSEE SINCE ASS ESSEE HAS NEITHER DEBITED THE AMOUNT OF COST OF LAND IN PROFIT AND LOSS ACCOU NT NOR CLAIMED ANY DEDUCTION IN RESPECT OF COST OF LAND THROUGH COMPUT ATION. IN VIEW OF ABOVE 11 ITA NOS. 1351 & 2155/DEL/2015 FACTS THAT AS AMOUNT WAS NOT CLAIMED THE ISSUE OF DISALLOWANCE U/S 40A (3) DOES NOT ARISE. THE ORDER IN WESTLAND DEVELOPERS PV T. LTD (SUPRA) IS FOLLOWED BY VARIOUS COORDINATE BENCHES OF THE TRIBUNAL DELHI B ENCHES. IT IS IMPORTANT TO MENTION THAT DISALLOWANCE U/S 40A(3) WAS MADE BY TH E ASSESSING OFFICER RELYING ON ORDER OF THE CIT(A)-XXX NEW DELHI IN CA SE OF M/S BUSINESS PARK PROMOTERS PVT. LTD IN APPEAL NO.521/2009-10/309 DAT ED 24.12.2012. APPEAL FILED AGAINST THE SAID ORDER IN APPEAL NO.521/09-10 /309 DATED 24.12.2012 IS ALLOWED BY THE TRIBUNAL NEW DELHI BENCH 'A VIDE I N ITA NO.1732/DE/2013 FOR THE AY 2006-07 ORDER DATED 20.04.2015. AS THE VERY BASIS OF MAKING DISALLOWANCE DOES NOT SUSTAIN THE DISALLOWANCE NEE D TO BE DELETED. THE LD. AR FURTHER POINTED OUT THAT DECISION OF VARIOUS COO RDINATE BENCHES OF THE TRIBUNAL IN 34 CASES MOST OF THE CASES LIKE M/S CO UNTRYWIDE PROMOTERS PVT. LTD M/S JASMINE BUILDTECH PVT. LTD ETC. ARE ACCEPT ED BY INCOME TAX DEPARTMENT AS NO APPEAL WAS FILED BEFORE HONBLE DE LHI HIGH COURT ON THE ISSUE OF DISALLOWANCE U/S 40A(3) DESPITE THE FACT THAT TAX EFFECT WAS MORE THAN PRESCRIBED LIMITS FOR FILING APPEAL BEFORE HON'BLE HIGH COURT OF DELHI. IT IS RELEVANT TO STATE AS UNDER:- FACTS IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. L TD AND M/S BUSINESS PARK PROMOTERS PVT. LTD (SUPRA) AND ASSESSEE ARE ID ENTICAL. ORDER OF M/S WESTLAND DEVELOPERS PVT. LTD AND M/S BUSINESS PARK PROMOTERS PVT. LTD (SUPRA) HAS BEEN ACCEPTED BY THE DEPARTMENT AND NO APPEAL HAS BEEN FILED BY THE DEPARTMENT. THE ORDER OF M/S WESTLAND DEVELOPERS PVT. LTD AND M/S BUSINESS PARK PROMOTERS PVT. LTD (SUPRA) HAS BEEN FOLLOWED WITHOU T ANY EXCEPTION BY COORDINATE BENCHES OF THE ITAT IN VARIOUS CASES AS STATED ABOVE PRINCIPLES OF JUDICIAL DISCIPLINE AND DOCTRINE OF PRECEDENT HA VE BEEN CONSISTENTLY FOLLOWED BY THE COORDINATE BENCHES OF THE TRIBUNAL IN FOLLOWING THE ORDER OF M/S WESTLAND DEVELOPERS PVT. LTD. HENCE THE LD. AR SUBMITTED THAT GROUND NO. 4 AND 4 .1 OF THE ASSESSEE AGAINST DISALLOWANCE U/S 40A(3) BE ALLOWED. 12 ITA NOS. 1351 & 2155/DEL/2015 12. THE LD. DR RELIED UPON THE ORDER OF THE CIT(A) AND THE ASSESSMENT ORDER. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS GROUND NO. 4 & 4.1 THE DEVELOPMENT RIGHTS IN LAND PURCHASED WERE ASSIGNED IN FAVOUR OF M/S COUNT RYWIDE PROMOTERS PVT. LTD. PURSUANT TO COLLABORATION AGREEMENT ENTERED IN TO WITH THEM. FROM THE PERUSAL OF THE RECORDS IT CAN BE SEEN THAT THE ASSE SSEE HAS RECEIVED REIMBURSEMENT OF ALL AMOUNTS PAID RELATED TO TRANSA CTION OF PURCHASE OF LAND STAMP DUTY REGISTRATION CHARGES AS PER CLAUSE 3(B) OF COLLABORATION AGREEMENT. BASES ON THE AGREEMENT THE ASSESSEE SHO WED THE INCOME BY WAY OF FEES AT RS. 35 000/- PER ACRE IN THE YEAR IN WHICH LICENSE ON SAID LAND WAS RECEIVED. WHILE MAKING THE ADDITION THE ASSESSING OFFICER HAS TOTALLY IGNORED PARA 3.3 (B) OF THE COLLABORATION AGREEMENT WHICH C LEARLY SHOWS THAT COUNTRYWIDE PROMOTERS PVT. LTD. SHALL REIMBURSEMENT OF COST AND EXPENSES INCURRED BY THE ASSESSEE WITH RESPECT TO ACQUISITIO N OF LAND. THE ASSESSEE HAS MAINTAINED PROPER BOOKS OF ACCOUNTS AND ALL THESE T RANSACTIONS ALONG WITH EXPENSES WERE THOROUGHLY SHOWS IN THE BOOKS OF ACCO UNTS SPECIALLY THAT OF REIMBURSEMENT AS WELL. THE ASSESSING OFFICER AT NO POINT OF TIME REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THOUGH THE FIND ING OF THE ASSESSING OFFICER AS WELL AS CIT(A) IS THAT THE ASSESSEE WAS CARRYING BUSINESS OF DEVELOPMENT OF REAL ESTATE. FROM THE PERUSAL OF RECORD IT CAN BE SEEN THAT THESE FACTS ARE NOT CORRECT. THE ASSESSEE IS ONLY CARRYING OUT ACQUISI TION OF LAND AND HE EXPENSES INCURRED ON TRANSACTIONS OF PURCHASE OF LANDS. IN CASE OF M/S WEST LAND DEVELOPERS PVT. LTD. THE TRIBUNAL HAS DEALT THIS I SSUE AND ALLOWED THE SIMILAR ISSUE RELATING TO REIMBURSEMENT MADE BY THE COUNTRY WIDE PROMOTERS PVT. LTD. THE LD. DR COULD NOT POINT OUT THE DISTINGUISHING F ACTS. THUS THE FACTS OF THE PRESENT CASE ARE ALSO IDENTICAL. THEREFORE GROUND NO. 4 & 4.1 ARE ALLOWED. 14. AS REGARDS TO GROUNDS NO.3 3.1 AND 3.2 OF ASSE SSEES APPEAL RELATING TO THE DISALLOWANCE OF ADDITIONAL PAYMENT THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAD MADE A DISALLOWANCE OF RS.5 9 2 250/- U/S 37 ON ACCOUNT 13 ITA NOS. 1351 & 2155/DEL/2015 OF ADDITIONAL PAYMENTS FOR THE PURCHASE OF LAND. TH E ASSESSEE HAD CHALLENGED BEFORE THE CIT(A) THAT THE DEDUCTION OF THE PURCHAS E OF LAND HAVING NOT BEEN CLAIMED BY THE APPELLANT NO DISALLOWANCE COULD BE MADE. THE CIT(A) DID NOT ACCEPT THIS CONTENTION VIZ. THAT THE ASSESSEE HAVI NG NOT CLAIMED THE DEDUCTION NO DISALLOWANCE COULD BE MADE. THE ASSESSEE ALSO TO OK PLEA THAT THERE IS NO VIOLATION OF PROVISIONS OF STAMP DUTY ACT AS PAYMEN T OF ADDITIONAL PAYMENT IS SUBSEQUENT TO REGISTRATION OF SALE DEED. THUS PROV ISIONS OF SECTION 37(1) ARE NOT APPLICABLE INSTANT CASE. CIT(A) GAVE HIS FINDIN G IN PARA 6.3.7 OF CIT(A) ORDER AND HELD THAT THERE IS NO VIOLATION OF PROVISIONS O F STAMP DUTY ACT AND PROVISIONS OF SECTION 37(1) OF INCOME TAX ACT 1961 ARE NOT APPLICABLE IN INSTANT CASE. HE HOWEVER GAVE CERTAIN DIRECTIONS T O QUANTIFY THE DISALLOWANCE TO BE MADE. AS PER THESE DIRECTIONS WHILE GIVING AP PEAL EFFECT THE DISALLOWANCE OF RS.5 72 250/- WAS DELETED AND BALANCE OF RS.20 0 00/- WAS CONFIRMED. THE CONTENTION IN GROUND OF APPEAL NO.3 HOWEVER IS TH AT THE ASSESSEE HAVING NOT CLAIMED THE EXPENDITURE THE SAME CANNOT BE DISALLO WED. SIMILAR DISALLOWANCE WAS MADE IN THE CASE OF M/S WESTLAND DEVELOPERS PVT . LTD (A GROUP COMPANY) FOR THE AY 2006-07 AND WAS PARTLY CONFIRMED BY THE CIT(A). THE TRIBUNAL VIDE ORDER DATED 22.08.2014 IN ITA NO.1752/DE!/2013 FOR THE AY 2006-07 DELETED THE ADDITION AND IN PARA 13 HELD AS UNDER:- GROUND NO.3 ON THE FACTS AVAILABLE ON RECORD CONSI DERING THE JUDICIAL PRECEDENT REFERRED TO IN DETAIL WHILE DECIDING GROU ND NO.4 HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE.' THE ORDER OF THE CIT(A) IN M/S WESTLAND DEVELOPERS PVT. LTD IS WHOLLY IDENTICAL TO THE ORDER OF CIT(A) IN CASE OF ASSESSEE. THESE O RDERS ARE PASSED BY THE SAME ASSESSING OFFICER AND SAME CIT(A). THE LD. AR SUBMI TTED THAT THE ORDER OF THE COORDINATE BENCH IN M/S WESTLAND DEVELOPERS PVT. LT D BE FOLLOWED. THE ORDER OF THE TRIBUNAL IN M/S WESTLAND DEVELOPERS PVT. LTD HAS BEEN ACCEPTED BY THE DEPARTMENT AND HAS BEEN FOLLOWED BY VARIOUS COORDIN ATE BENCHES OF THE TRIBUNAL DELHI IN 28 CASES. THE LD. AR POINTED OUT THAT DISALLOWANCE U/S 14 ITA NOS. 1351 & 2155/DEL/2015 40A(3) WAS MADE BY THE LEARNED ASSESSING OFFICER RE LYING ON ORDER OF CIT(A)- XXX NEW DELHI IN CASE OF M/S BUSINESS PARK PROMOTE RS PVT. LTD IN APPEAL NO.521/2009-10/309 DATED 24.12.2012. APPEAL FILED A GAINST THE SAID ORDER IN APPEAL NO.521/09-10/309 DATED 24.12.2012 IS ALLOWED BY THE TRIBUNAL NEW DELHI BENCH A VIDE IN ITA NO.1732/DE/2013 FOR THE AY 2006-07 ORDER DATED 20.04.2015. AS THE VERY BASIS OF MAKING DISALLOWANC E DOES NOT SUSTAIN THE DISALLOWANCE NEED TO BE DELETED. IT IS IMPORTANT TO MENTION HERE THAT IN ONE OF THE GROUP COMPANY IN CASE OF M/S VASUNDRA PROMOTERS PVT. LTD DEPARTMENT HAD FILED APPEAL BEFORE HONBLE DELHI HIGH COURT ON THE ISSUE OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF ADDITIONAL PAYMENT DE LETED BY TRIBUNAL ON THE SAID ACCOUNT. THUS THE LD. AR FURTHER SUBMITTED TH AT THE FACTS IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD AND M/S BUSINESS P ARK PROMOTERS PVT. LTD (SUPRA) AND ASSESSEE ARE IDENTICAL. ORDER OF M/S WE STLAND DEVELOPERS PVT. LTD AND M/S BUSINESS PARK PROMOTERS PVT. LTD (SUPRA) HA S BEEN ACCEPTED BY THE DEPARTMENT AND NO APPEAL HAS BEEN FILED BY THE DEPA RTMENT. EVEN OTHERWISE HON'BLE DELHI HIGH COURT HAS NOT ADMITTED APPEAL OF REVENUE ON THE ISSUE OF DISALLOWANCE OF ADDITIONAL PAYMENT BY HOLDING THAT VIOLATION OF PROVISIONS OF STAMP DUTY ACT DOES NOT IPSO FACTO RESULT IN DISALL OWANCE U/S 37(1) OF INCOME TAX ACT 1961. PRINCIPLES OF JUDICIAL DISCIPLINE AN D DOCTRINE OF PRECEDENT HAVE BEEN CONSISTENTLY FOLLOWED BY THE COORDINATE BENCHE S OF THE TRIBUNAL IN FOLLOWING THE ORDER OF M/S WESTLAND DEVELOPERS PVT. LTD. HENCE THE LD. AR PRAYED THAT GROUNDS NO. NO.3 3.1 AND 3.2 OF THE AS SESSEE BE ALLOWED. THE LD. AR FURTHER POINTED OUT THAT BOTH THE DISALLOWANCE M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADDITIONAL PAYMENT AND ON ACC OUNT OF 40A(3) ARE IN RESPECT OF PAYMENTS/TRANSACTION ARE DULY RECORDED I N BOOKS OF ACCOUNT. FURTHER ASSESSMENT IN THIS CASE WAS MADE U/S 153A OF INCOME TAX ACT 1961. NO INCRIMINATING SEIZED DOCUMENTS WERE FOUND DURING THE COURSE SEARCH QUA ASSESSEE QUA ASSESSMENT YEAR. THE LD. AR FURTHER RE LIED UPON THE DECISIONS WHICH ARE AS UNDER:- A) GUJARAT HIGH COURT IN SAYAJI IRON AND ENGINEERING CO. V. CIT 253 ITR 15 ITA NOS. 1351 & 2155/DEL/2015 749 (GUJ.) WHEREIN REFERENCE WAS MADE FOR SIMILAR VIEW TAKEN I N CIT VS. L.G. RAMAMURTHI 110 ITR 453 (MAD ). B) UNION OF INDIA VS. PARAS LAMINATES PVT. LTD 1991 AI R 696 SC. C) MP HIGH COURT IN AGARWAL WAREHOUSING AND LEASING LT D V. CIT 257 ITR 235 (MP) FOLLOWED THE DECISION OF THE SUPREME COURT IN UOI V . KAMLAKSHI FINANCE CORPORATION LTD AIR 1992 SC 711 712 D) HONDA SIEL POWER PRODUCTS LTD. VS. CIT 165 TAXMANN 307 (SC) E) CIT VS. GOODLAS NEROLAC PAINTS LTD [2016] 386 ITR 1 08 (BOM). THE LD. AR REITERATED THAT THE FACTS IN THE CASE OF M/S WESTLAND DEVELOPERS PVT. LTD AND M/S BUSINESS PARK PROMOTERS PVT. LTD ( SUPRA) AND FACTS OF THE ASSESSEE ARE IDENTICAL. THE DEPARTMENT CANNOT BE AL LOWED TO REVISIT THE MATTER ON SAME FACTS ON WHICH THE TRIBUNAL HAVE PASSED THE ORDER WHICH HAVE BEEN FOLLOWED BY NUMBER OF COORDINATE BENCHES. HENCE TH E LD. AR SUBMITTED THAT GROUND NOS.3 3.1 AND 3.2 OF THE ASSESSEE BE ALLOWE D AND DISALLOWANCE OF RS.20 000/- BE DELETED. 15. THE LD. DR SUBMITTED THAT THE DISALLOWANCE U/S 37 ON ACCOUNT OF ADDITIONAL PAYMENT FOR PURCHASE OF LAND WAS RIGHTY MADE AS THE ASSESSEE COULD NOT ESTABLISH HIS CASE AS THE EXPENDITURE WAS INCUR RED WITHOUT ANY SUBSTANTIAL EVIDENCE PRODUCED BEFORE THE ASSESSING OFFICER TO T HAT EFFECT BY THE ASSESSEE. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CITA). 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN CASE OF M/S WEST LAND DEVELOPERS PVT. L TD. THE ISSUE WAS CONTESTED AND WAS DECIDED IN FAVOUR OF THE ASSESSEE THEREIN. BESIDES THESE FACTS IN ONE OF THE GROUP COMPANY IN CASE OF M/S VASUNDHARA PROM OTERS PVT. LTD. (ITA NO.211/2018 VIDE ORDER DATED 14.05.2018) THE HONBL E DELHI HIGH COURT DECIDED THIS ISSUE AND DELETED THE SAID ADDITIONS W HILE DISMISSING THE APPEAL OF 16 ITA NOS. 1351 & 2155/DEL/2015 THE REVENUE. THE HONBLE DELHI HIGH COURT HAS NOT ADMITTED THE APPEAL OF DEPARTMENT ON THE ISSUE OF DISALLOWANCE OF ADDITION AL PAYMENT BY HOLDING THUS:- THE SECOND QUESTION OF LAW URGED IS WITH RESPECT T O 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 TH E PRINCIPLE LOSS OR THAT SEPARATE AMOUNT WAS USED FOR THAT PURPOSE . IT WAS SUBMITTED THAT THE AMOUNTS IN FACT CONSTITUTED FLAGRANT VIOLATION OF L AW IN AS MUCH AS THE PROVISIONS OF THE STAMP ACT AND OTHER CONNECTED LAW S WERE SOUGHT TO BE EVADED BY THE SALE DEED. THIS COURT IS OF THE OPINION THAT THE BROAD INTERPR ETATION 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 ALIENED 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 JURISD ICTION ON MATTERS BEYOND THE INCOME TAX ACT. THE REVENUE AUTHORITIES DO NOT HAVE SUCH POWERS. REVENUE AUTHORITY ARGUED THAT THIS IS TO DECIDE WHA T CONSTITUTES INFRACTION OF OTHER PROVISIONS OF LAW. NO QUESTION OF LAW ARISES THEREFORE ON THIS ISSUE ' BESIDES THIS BOTH THE DISALLOWANCE ON ACCOUNT OF A DDITIONAL PAYMENT U/S 37 & ON ACCOUNT OF SECTION 40A(3) ARE IN RESPECT OF PAYM ENTS/TRANSACTIONS WHICH WERE DULY RECORDED IN BOOKS OF ACCOUNT. AS THE FAC TS OF THE PRESENT ASSESSEE ARE IDENTICAL TO THAT OF THE GROUP OF COMPANIES IN CASE OF WESTLAND DEVELOPERS PVT. LTD AND M/S VASUNDHARA PROMOTERS PVT. LTD. TH E ISSUE IS ALLOWED. THE DR COULD NOT DISTINGUISH ANY FACTS FOR THE PRESENT ASS ESSMENT YEAR. IN FACT THE ASSESSEE HAVING NOT CLAIMED THE EXPENDITURE THE SA ME CANNOT BE DISALLOWED 17 ITA NOS. 1351 & 2155/DEL/2015 UNDER SECTION 37 OF THE ACT ON ACCOUNT OF ADDITIONA L PAYMENT FOR THE PURCHASE OF LAND. HENCE GROUND NO. 3 3.1 AND 3.2 ARE ALLOWE D. THUS APPEAL BEING ITA NO. 2155/DEL/2015 FILED BY THE ASSESSEE FOR A.Y. 20 06-07 IS ALLOWED. 17. IN RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF MARCH 2021 SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 12/03/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 18 ITA NOS. 1351 & 2155/DEL/2015