DCIT, New Delhi v. M/s VIPUL Infracon Pvt. Ltd., New Delhi

ITA 6141/DEL/2015 | 2010-2011
Pronouncement Date: 07-11-2019 | Result: Dismissed

Appeal Details

RSA Number 614120114 RSA 2015
Assessee PAN AAACT4544M
Bench Delhi
Appeal Number ITA 6141/DEL/2015
Duration Of Justice 3 year(s) 11 month(s) 19 day(s)
Appellant DCIT, New Delhi
Respondent M/s VIPUL Infracon Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 07-11-2019
Appeal Filed By Department
Tags 6141
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 07-11-2019
Last Hearing Date 29-08-2019
First Hearing Date 29-08-2019
Assessment Year 2010-2011
Appeal Filed On 18-11-2015
Judgment Text
1 I.T.A NO. 6141/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N. K. BILLAIYA ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE JUDICIAL MEMBER I.T.A NO. 6141/DEL/2015 (A.Y 2010-11) DCIT CIRCLE 26(2) NEW DELHI. (APPELLANT) VS M/S. VIPUL INFRACON PVT. LTD. 14/185-186 GROUND FLOOR MAIN SHIVALIK ROAD MALVIYA NAGAR NEW DELHI 110 017 (AAACT 4544 M) (RESPONDENT) APPELLANT BY SHRI SURENDRA PAL SR. D.R RESPONDENT BY SHRI RAJESH ARORA C.A ORDER PER SUCHITRA KAMBLE JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 20/07/2015 PASSED BY CIT(A)-I NEW DELHI FOR ASSESSMENT YEAR 2 010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E AND IN LAW THE ORDER PASSED BY LD CIT(A) IS ERRONEOUS AND THE LEARNED CI T(A) HAS ERRED (I) HAS ERRED IN DELETING THE ADDITION OF RS.22 50 000/ - AND RS.16 30 000/- MADE BY AO ON ACCOUNT OF INTEREST PA ID AND DISALLOWANCE OF RENT EXPENSES RESPECTIVELY. (II) HAS ERRED IN DELETING THE ADDITION OF RS.1 09 17 20 0/- MADE BY AO ON ACCOUNT OF DISALLOWANCE OF COMPENSATION EXPENSES . DATE OF HEARING 06.11.2019 DATE OF PRONOUNCEMENT 07.11.2019 2 I.T.A NO. 6141/DEL/2015 (III) HAS ERRED IN DELETING THE ADDITION OF RS.50 32 287/ - MADE BY AO ON ACCOUNT OF NOT DISCLOSING MAINTENANCE INCOME. 2. THE APPELLANT CRAVES LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE ASSESSEE WAS ENGAGED IN THE REAL ESTATE DEVE LOPMENT IN GURGAON AND MANESAR. IT HAS ALSO RECEIVED INCOME FROM SERVI CES OF MAINTENANCE OF THE BUILDING. DURING THE YEAR UNDER CONSIDERATION THE APPELLANT COMPANY HAS RECEIVED INCOME FROM SALE OF REAL ESTATE AND INTERE ST INCOME. IN THE ASSESSMENT ORDER FRAMED FOR THIS YEAR ASSESSING OFFICER HAS M ADE ADDITION ON ACCOUNT OF INTEREST PAYMENT OF RS.22 50 000/- TO M/S DINESH NA NDINI RAM KRISHNA DALMIA FOUNDATION ON ACCOUNT OF MONEY RECEIVED AMOU NTING TO RS.1.5 CRORES. ASSESSING OFFICER FURTHER ADDED RS. 16 50 500/- ON ACCOUNT OF ASSURED RETURN IN THE FORM OF RENT PAID TO SHRI ARUN KHANNA AND KA ILASH KHANNA. THE ASSESSING OFFICER TREATED THESE EXPENSES NOT INCURR ED FOR BUSINESS PURPOSES. THE ASSESSING OFFICER ALSO ADDED RS.1 09 17 200/- P AID TO VARIOUS PARTIES WHO HAD BOOKED THE UNITS WITH THE ASSESSEE. HOWEVER SU BSEQUENT TO THE BOOKING THERE WAS A CHANGE IN THE FLOOR PLAN THEREFORE CE RTAIN PARTIES WHO HAD BOOKED UNITS EARLIER HAD OPTED OUT FROM THE BOOKING AND TH EY WERE PAID COMPENSATION. SUCH EXPENSES WERE NOT ALLOWED BY THE ASSESSING OFF ICER ON THE GROUND THAT SAME WERE NOT INCURRED WHOLLY & EXCLUSIVELY FOR BUS INESS PURPOSES. THE ASSESSING OFFICER ALSO ADDED RS.50 32 287/- ON ACCO UNT OF THE SERVICE INCOME NOT OFFERED BY THE ASSESSEE FOR TAXATION PERTAINING TO THIS YEAR WHICH WAS NOT TAKEN INTO CONSIDERATION IN THE A.Y. 2010-11 BY THE APPELLANT. THE ASSESSING OFFICER ALSO DISALLOWED RS.2 56 169/- U/S 14A OF TH E I.T. ACT. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 3 I.T.A NO. 6141/DEL/2015 5. THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN DE LETING THE ADDITION OF RS.22 50 000/- AND RS.16 30 000/- MADE BY THE ASSES SING OFFICER ON ACCOUNT OF INTEREST PAID AND DISALLOWANCE RENT EXPENSES. TH E LD. DR SUBMITTED THAT THESE PAYMENTS ARE DOUBTFUL AND SHOULD BE REMANDED BACK TO THE ASSESSING OFFICER AS NO PROPER EVIDENCES WERE SUBMITTED BEFOR E THE ASSESSING OFFICER. 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. THE CIT(A) WHILE DELETING GROU ND NO.1(I) HAS GIVEN A CATEGORICAL FINDING THAT THE PAYMENTS MADE TO THE P ARTIES WERE VERIFIABLE AS THE PAYMENTS WERE RECEIVED BY WAY OF CHEQUES AND SAME W AS UTILIZED BY THE ASSESSEE FOR ITS BUSINESS PURPOSE FOR COMPLETING TH E PROJECTS. THE CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND OBSERVATION OF THE ASSESSING OFFICER MADE IN THE ASSESSMENT ORDER. IT IS SEEN THAT THE APPELLANT HAS CLAIMED INTEREST PAYMENT OF RS.22 50 500/- TO M/S DINESH NANDINI RAM KRISHNA DAIMIA FOUNDATION AND RS. 16 30 500/- TO SH. ARUN KHANNA AND KAILASH KHANNA. THE APPELLANT HAS CLAIME D THAT THE BUILDERS REQUIRED HUGE AMOUNT OF FUNDS TO BUILD THE PROJECTS . SUCH FUNDS ARE NOT EASILY AVAILABLE IN THE FORM OF LOAN AS REAL ESTATE MARKET WAS RUNNING IN RECESSION FOR LAST SO MANY YEARS. THEREFORE THE AP PELLANT HAS TO LOOK FOR OTHER AVENUES FROM WHERE FUNDS COULD BE GENERATED F OR CONSTRUCTION PURPOSES. THEREFORE THE APPELLANT COMPANY HAS ENTE RED INTO AN AGREEMENT WITH VARIOUS BUYERS TO RAISE THE FUNDS FOR COMPLETI NG THE PROJECT. IN ORDER TO RAISE THE FUNDS THE APPELLANT HAS TO PROVIDE IN VESTORS LENDERS SECURITY OF THEIR FUNDS AND FIXED RETURNS WHICH APPELLANT HA D PROVIDED TO THEM IN THE FORM OF BOOKING OF SPACE AND ASSURED AMOUNT OF RETURN IN THE FORM OF INTEREST OR RENT. THE APPELLANT HAS ALSO CLAIMED TH AT THIS IS A GENERAL PRACTICE IN THE MARKET AND IN SUPPORT OF ITS CONTEN TION IT HAS SUBMITTED VIDE ANNEXURE-1 OF ITS SUBMISSION WHEREIN FIXED RETURN O R ASSURED RENTAL PLAN HAS BEEN OFFERED BY M/S ABC BUILDCON PVT. LTD. M/S SUPERTECH ASSOTECH REALITY AND OMEX BUILDERS IN NATIONAL CAPITAL REGIO N. THE APPELLANT CLAIMED THAT EXPENSES INCURRED IN THE FORM OF ASSUR ED RENTAL PLAN AND ASSURED INTEREST ARE WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSES AND THE SAME ARE ALLOWABLE U/S 37 OF THE I.T. ACT. THE APPELLANT HAS SUBMITTED BEFORE ASSESSING OFFICER AS WELL AS BEFORE ME THAT IT HAS ENTERED INTO AN 4 I.T.A NO. 6141/DEL/2015 AGREEMENT WITH M/S DINESH NANDINI RAMKRISHNA DAIMIA FOR BOOKING OF SPACE AT VIPUL TECH SQUARE ON MAIN GOLF COURSE RO AD SECTOR-43 GURGAON. WHILE BOOKING THE SPACE IN SAID PROJECT TH E PARTY I.E. M/S DINESH NANDINI RAM KRISHNA DAIMIA FOUNDATION OPTED FOR THE INVESTMENT RETURN PLAN AND PAID RS.1.5 CRORE TO THE APPELLANT ON 30. 04.2008. FOR THIS APPELLANT AS WELL AS M/S DINESH NANDINI RAM KRISHNA DAIMIA FOUNDATION ENTERED INTO AN MOU ON 09.06.2008. COPY OF THE SAID MOU IS PLACED AT PAGE 48- SI OF THE PAPER BOOK. IN THIS MOU IT IS M ENTIONED THAT APPELLANT WOULD PAY GUARANTEED INVESTMENT RETURN TO THE INVES TOR AT QUARTERLY INTERVALS. THE GUARANTEED RETURN WAS FIXED AT RS.12 5/- PER SQ. FT PER MONTH AS MENTIONED IN CLAUSE (6) OF THE MOU. THIS G UARANTEED INVESTMENT RETURN WAS PAID TO THE INVESTOR FROM 1 ST OF MAY 2008 TILL IT WAS COMPLETED OR LEASED OUT TO SOME OTHER PARTY. THE APPELLANT HA S ALSO FILED COPY OF THE FORM NO. 16A AT PAGE NO. 61 OF THE PAPER BOOK WHER EIN THE APPELLANT HAS DEDUCTED TDS ON THIS PAYMENT U/S 194A OF THE I.T. A CT. THE TDS SO DEDUCTED HAS BEEN DEPOSITED TO THE GOVERNMENT ACCOU NT. THE APPELLANT CLAIMS THAT THIS GUARANTEED RETURN INVESTMENT HAS B EEN PAID TO ATTRACT THE MUCH NEEDED FUNDS FROM THE CUSTOMERS. IF THIS SCHEM E WAS NOT OPTED BY THE APPELLANT THEN APPELLANT WOULD HAVE BORROWED F UNDS FROM THE MARKET AND WOULD HAVE PAID THE INTEREST. THEREFORE THE EX PENDITURE PAID IN THE FORM OF FIXED RETURN INVESTMENT PLAN IS FOR THE PUR POSES OF BUSINESS AND SAME IS ALLOWABLE AS BUSINESS EXPENDITURE. SIMILARLY THE APPELLANT HAS PAID ASSURED RENTAL TO SH. ARUN KHANNA AND KAILASH KHANNA VIDE MOU DATED 22.09.2008 FILED AT PAGE NO. 68-75 OF THE PAPER BOOK. THE APPELLANT HAS RECEIVED AMOUN T FOR BOOKING IN 'VIPUL TECH SQUARE' FROM SH. KAILASH KHANNA OF RS.13 32 50 0/- ON 22.09.2008 RS.19 45 000/- ON 23.09.2008 AND RS.21 57 500/- ON 24.09.2008 AGAINST THE BOOKING OF SPACE. THE SIMILAR AMOUNT ON THE VER Y SAME DATES HAS BEEN RECEIVED FROM SH. ARUN KHANNA. BOTH THE PARTIES HAV E OPTED THE BOOKING UNDER 'ASSURED RENTAL PLAN SCHEME'. AS PER THE MOU SH. ARUN KHANNA AND KAILASH KHANNA INVESTED IN THE 'VIPUL TECH SQUA RE' AND HAVE ADVANCED MONEY TO THE APPELLANT TO THE TUNE OF RS.5 4 35 000/- EACH ON ACCOUNT OF VARIOUS SPACES MENTIONED IN THE AGREEMEN T. AS PER MOU THE APPELLANT HAS AGREED TO PAY ASSURED RENTAL TO THESE PARTIES FROM JANUARY 2009 TILL THE COMPLETION OR ACTUAL LEASING OF THE S PACE TO THE THIRD PARTY. THE RATE OF ASSURED RETURN WAS 125/- PER SQ. FT. PE R MONTH. IT IS SUBMITTED BY THE APPELLANT THAT THOUGH THE ASSURED RENTAL WAS TO BE PAID TO SH. KAILASH KHANNA AND ARUN KHANNA FROM JANUARY 2009 H OWEVER THE APPELLANT HAS REQUESTED TO THESE PARTIES THAT IT IS NOT POSSIBLE TO PAY ASSURED RETURN FROM JANUARY 2009 AND ACCORDINGLY OB TAINED WAIVER FROM THESE PARTIES TILL MARCH 2009. THE COPIES OF WAIVER OBTAINED FROM SH. KAILASH KHANNA AND ARUN KHANNA ARE FILED AT PAGE 80 -85 OF THE PAPER 5 I.T.A NO. 6141/DEL/2015 BOOK. THE APPELLANT HAS PAID THE ASSURED RENTAL TO SH. KAILASH KHANNA AND ARUN KHANNA FROM APRIL 2009 OF RS.16 30 498/- E ACH. HOWEVER THE AMOUNT PAID FROM APRIL TO SEPTEMBER 2009 AS ASSURED RENTAL WAS DEBITED TO THE 'WORK IN PROGRESS ' AS THE CONSTRUCTION WORK WAS IN PROGRESS AND THE ASSURED RENTAL PAID FROM OCTOBER 2009 TO MARCH 31 2010 WAS CLAIMED AS EXPENDITURE IN THE PROFIT & LOSS A/C. FOR PAYMENT O F ASSURED RENT TO THESE PERSONS THE APPELLANT HAS DEDUCTED TDS U/S 1941 OF THE I.T. ACT AS RENT. THE TDS CERTIFICATE ISSUED BY THE APPELLANT ARE PLA CED AT PAGE 78 AND 79 OF THE PAPER BOOK. IT IS SEEN THAT THE APPELLANT HA S CAPITALIZED RS. 16 30 500/- PAID TILL THE MONTH OF SEPTEMBER 2009 AND THE BALANCE PAYMENT OF RS. 16 30 500/- PAID FROM OCTOBER 2009 T O 31 ST MARCH 2010 HAS BEEN CLAIMED AS EXPENDITURE IN THE PROFIT & LOS S A/C. SINCE EXPENDITURE INCURRED BY THE APPELLANT IS FOR THE PU RPOSE OF BUSINESS AND FOR MEETING ITS REQUIREMENTS FOR MUCH NEEDED FUNDS. THEREFORE THE PAYMENT MADE BY THE APPELLANT UNDER THE HEAD ASSURE D RENTAL PLAN IS AN ALLOWABLE EXPENDITURE. IT IS SEEN THAT THE PAYMENT MADE TO THESE PARTIES IS FULLY VERIFIABLE AND THE FUNDS RECEIVED FROM THESE PARTIES WERE RECEIVED BY WAY OF CHEQUES AND SAME WERE UTILIZED BY THE APPELL ANT FOR ITS BUSINESS PURPOSES FOR COMPLETING THE PROJECT. THE PAYMENTS O F ASSURED RETURN IN THE FORM OF INTEREST TO DINESH NANDINI RAM KRISHNA DALM IA FOUNDATION AND ASSURED RENTAL TO SH. ARUN KHANNA AND KAILASH KHANN A HAVE BEEN MADE AFTER DEDUCTING TDS THEREFORE THERE IS NO DISPUTE ABOUT INCURRING OF EXPENDITURE. SINCE THE FUNDS RECEIVED FROM THESE P ARTIES WERE ON THE BASIS OF VALID MOUS AGAINST BOOKING OF SPACE AND ON THE B ASIS OF FIXED RETURN PLANS OFFERED BY THE APPELLANT HENCE THE EXPENDITU RE INCURRED WAS IN FURTHERANCE OF COMMERCIAL EXPEDIENCY AND MEETING TH E FUND REQUIREMENT OF THE BUSINESS. IN VIEW OF THE FACTS DISCUSSED ABOVE THE CLAIM OF THE INTEREST PAYMENT OF RS.22 50 500/- MADE TO M/S DINESH NANDIN I RAM KRISHNA DALMIA FOUNDATION AND ASSURED RENT PAID TO SH. KAIL ASH KHANNA AND ARUN KHANNA OF RS. 16 30 500/- ARE ALLOWABLE EXPEND ITURE. ACCORDINGLY THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF R S.22 50 500/- AND RS.16 30 500/- IS DELETED. AS A RESULT GROUND OF A PPEAL NO. 1 AND 2 ARE ALLOWED. IT IS PERTINENT TO NOTE THAT THE PAYMENT MADE TO TH E PARTIES WAS VERIFIED BY THE CIT(A) AND THE FUNDS RECEIVED FROM THESE PAR TIES WERE RECEIVED BY WAY OF CHEQUES AND SAME WERE UTILIZED BY THE ASSESSEE FOR ITS BUSINESS PURPOSES FOR COMPLETING THE PROJECT. THE PAYMENTS OF ASSURED RET URN IN THE FORM OF INTEREST TO DINESH NANDINI RAM KRISHNA DALMIA FOUNDATION AND ASSURED RENTAL TO SH. ARUN KHANNA AND KAILASH KHANNA HAVE BEEN MADE AFTER DEDUCTING TDS 6 I.T.A NO. 6141/DEL/2015 THEREFORE THERE IS NO DISPUTE ABOUT INCURRING OF E XPENDITURE. SINCE THE FUNDS RECEIVED FROM THESE PARTIES WERE ON THE BASIS OF VA LID MOUS AGAINST BOOKING OF SPACE AND ON THE BASIS OF FIXED RETURN PLANS OFFERE D BY THE ASSESSEE HENCE THE EXPENDITURE INCURRED WAS FOR COMMERCIAL EXPEDIENCY AND IS A REQUIREMENT OF THE BUSINESS. THUS THE CIT(A) HAS GIVEN A DETAILED FINDING AND THERE IS NO NEED TO INTERFERE WITH THE SAME. HENCE GROUND NO. 1(I) OF THE REVENUES APPEAL IS DISMISSED. 8. AS REGARDS GROUND NO. 1(II) THE LD. DR SUBMITTE D THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.1 09 17 200/- MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF COMPENSATION EXPENSES. T HE LD. DR SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION AS THE COMPENSATION GIVEN BY THE ASSESSEE WAS NOT IN CONSONANCE WITH THE BUSINES S PRACTICES AS THE PROPERTIES WERE SOLD AT A LOWER RATE THAN THE CIRCL E RATE. 9. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) A ND ALSO POINTED OUT VARIOUS DOCUMENTS. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND OBSERVATION MADE BY THE AO IN THE ASSESSMENT ORDER. IT IS SEEN THAT APPELLANT HAS CLAIMED AN EXPENDITURE OF RS. 1 09 17 200/- AS COMPENSATION EXPENDITURE WHICH WAS PAID TO THE PARTIES WHO HAVE ORIGINALLY BOOKED THE SPACE AT 'VIPUL TECH SQUARE'. IT IS CLAIMED BY THE APPELLANT BEFORE THE AO AS WELL AS BEFORE ME THAT AT THE TIME OF BOOKING OF UNITS THE LAYOUT OF THE BUILDING WAS IN CONCEPTUAL STAGE HOWEVER ON FINALIZATION OF THE L AYOUT THERE WERE CERTAIN CHANGES IN THE FLOOR PLAN. BECAUSE OF CHANGE OF THE FLOOR PLAN THE EXISTING BUYERS WERE RELUCTANT TO ACCEPT THE SPACE ACCORDING TO THE REVISED LAYOUT PLAN AND SOME OF THE BUYERS OPTED OUT FROM THE BOOK ING AND THE APPELLANT COMPANY HAD TO PAY COMPENSATION TO SUCH BUYERS TO A VOID LITIGATION WITH THE ORIGINAL BUYERS. IT IS CLAIMED BY THE APPELLANT THAT IT HAS BOUGHT BACK THE UNITS FROM THE FOLLOWING ORIGINAL BUYERS AND PA ID COMPENSATION AS UNDER: 7 I.T.A NO. 6141/DEL/2015 S.NO. NAME OF THE PARTY AMOUNT (RS.) 1. PUNEET MAGO & MADHU MAGO 23 07 600/- 2. ANIL CHAUHAN 20 00 000/- 3. ASHOK KUMAR MEHTA & BANU MEHTA 29 52 000/- 4. NARINDER KUMAR CHOPRA 17 84 800/- 5 SADHARTH SINGH 3 10 400/- 6. KAUSHAL KUMAR GUPTA & SWATI GUPTA 15 62 400/- TOTAL (RS.) 1 09 17 200/- THE APPELLANT HAS FILED COPIES OF THE MEMORANDUM OF TERMINATION OF AGREEMENT WITH THE ABOVEMENTIONED PARTIES WHICH WER E ENTERED INTO IN THE MONTH OF NOVEMBER DECEMBER 2009 AND JANUARY 2010 . THESE MTAS ALONGWITH THE COPIES OF THE CHEQUES THROUGH WHICH P AYMENTS WERE MADE TO THESE PARTIES ARE PLACED FROM PAGE 111 -132 OF T HE PAPER BOOK. THE APPELLANT HAS EXPLAINED THE REASONS FOR CANCELLATIO N OF BOOKING BY THE EARLIER BUYERS AND SUBSEQUENT SALE OF SUCH UNITS AR E AS UNDER: 1. UNIT NO. 406 WAS BOOKED BY SH. PUNEET MAGO AND MADH U MAGO HAVING INITIAL AREA AS PER THE DRAWING 1282 SQ. F T. (P.B. PG.155-160). DUE TO CHANGE IN THE FLOOR PLAN AND THE LOCATION OF STA IRCASE THIS PARTICULAR UNIT WAS REDUCED TO THE SIZE 568 SQ. FT. ONLY. THE RATE OF BOOKING WAS ACCORDINGLY ENHANCED FROM 3000 PER SQ. FT. WHICH TH E ALLOTTEE DID NOT OPT. HENCE THE APPELLANT COMPANY TOOK THE SAID FLAT FRO M THE CUSTOMER @ RS. 4800 PER SQ. FT. AS PER THE AGREEMENT FILED AT PAGE 111-114 OF THE PAPER BOOK AFTER PAYING COMPENSATION OF RS. 1800/- PER SQ . FT. THIS PARTICULAR UNIT WAS RESOLD @ RS.5000/- PER SQ. FT. TO OTHER PA RTY. THIS PARTICULAR UNIT WAS SOLD TO RENU NARANG ON 24.09.2009. THE COPY OF THE AGREEMENT ENTERED WITH MS. RENU NARANG IS FILED AT PAGE 161-1 63 OF THE PAPER BOOK. IT IS CLAIMED BY THE APPELLANT THAT APPELLANT STILL GAINED RS. 200 PER SQ. FT. IN THIS PARTICULAR UNIT WHICH HAS BEEN CREDITED IN THE PROFIT & LOSS A/C. THE ENTIRE RECEIPTS OF THE SALE OF THIS UNIT HAS BEEN T AKEN TO THE PROFIT & LOSS A/C. THE ADDITIONAL AMOUNT PAID AS COMPENSATION WAS RS.23 07 600/- TO SH. PUNEET MAGO AND MADHU MAGO HAS BEEN CLAIMED AS COMPENSATION PAID IN THE PROFIT & LOSS A/C. IT IS CLAIMED BY THE APPELLANT THAT AS SUCH THERE WAS NO LOSS TO THE REVENUE IN REBOOKING OF TH IS UNIT. 2. UNIT NO. 231: THIS UNIT WAS ALLOTTED TO MR. SIDHART H SINGH. THE INITIAL AREA AS PER THE DRAWING WAS 776 SQ. FT. HOWEVER DU E TO CHANGE IN THE 8 I.T.A NO. 6141/DEL/2015 FLOOR PLAN THIS PARTICULAR UNIT WAS REDUCED TO THE SIZE 741 SQ. FT. ONLY. THE RATE OF BOOKING WAS ACCORDINGLY ENHANCED FROM 2200 PER SQ. FT. TO RS.3150/- PER SQ. FT. WHICH THE ALLOTTEE DID NOT OP T. HENCE THE APPELLANT COMPANY TOOK THE SAID FLAT FROM THE CUSTOMER @ RS. 2600 PER SQ. FT. AS PER THE AGREEMENT FILED FROM PAGE 115-118 OF THE PAPER BOOK. AFTER PAYING COMPENSATION OF RS. 400/- PER SQ. FT. THE SAME ARE A WAS REBOOKED @ RS.3150/- PER SQ. FT. IN THE NAME OF AJAY RAJ SINGH . COPY OF THE AGREEMENT ENTERED WITH AJAY RAJ SINGH IS FILED AT PAGE 170-17 3 OF THE PAPER BOOK. IT IS CLAIMED BY THE APPELLANT THAT APPELLANT STILL GA INED RS.550 PER SQ. FT. ON THIS PARTICULAR UNIT WHICH HAS BEEN CREDITED IN THE PROFIT & LOSS A/C. THE ENTIRE RECEIPTS OF THE SUBSEQUENT SALE OF THIS UNIT HAS BEEN TAKEN TO THE PROFIT & LOSS A/C. THE ADDITIONAL AMOUNT PAID AS CO MPENSATION WAS RS.3 10 400/- TO SH. SIDHARTH SINGH HAS BEEN CLAIME D AS COMPENSATION PAID IN THE PROFIT & LOSS A/C. IT IS CLAIMED BY THE APPELLANT THAT AS SUCH THERE WAS NO LOSS TO THE REVENUE IN REBOOKING OF TH IS UNIT. 3. UNIT NO. 417: THIS UNIT WAS ALLOTTED TO MR. AND MRS . KAUSHAL KUMAR GUPTA HAVING AREA AS PER DRAWING 868 SQ. FT.(P.B. PG. 147-151). HOWEVER DUE TO CHANGE IN THE FLOOR PLAN THIS PARTICULAR UN IT WAS REDUCED TO THE SIZE 858 SQ. FT. ONLY. THE RATE OF BOOKING WAS ACCORDING LY ENHANCED TO 3000 PER SQ. FT. WHICH THE ALLOTTEE DID NOT OPT. HENCE THE APPELLANT COMPANY TOOK THE SAID FLAT FROM THE ABOVE PARTY @ RS. 4800 PER S Q. FT. AS PER THE AGREEMENT ENTERED INTO IN JANUARY 2010 WHICH IS PLA CED AT PAGE 129-132 OF THE PAPER BOOK. AS PER THIS TERMINATION AGREEMEN T APPELLANT HAS PAID COMPENSATION @ RS.1800/- PER SQ. FT. THE APPELLANT SOLD THIS UNIT @ RS.5000/- PER SQ. FT. TO MS. GEETANJALI PAHIL. IT I S CLAIMED BY THE APPELLANT THAT APPELLANT STILL GAINED RS. 200 PER SQ. FT. ON THIS PARTICULAR UNIT WHICH HAS BEEN CREDITED IN THE PROFIT & LOSS A/C. THE ENT IRE RECEIPTS OF THE SALE OF THIS UNIT HAS BEEN TAKEN TO THE PROFIT & LOSS A/C. THE ADDITIONAL AMOUNT PAID AS COMPENSATION WAS RS. 15 62 400/- TO MR. AND MRS. KAUSHAL KUMAR GUPTA HAS BEEN CLAIMED AS COMPENSATION IN THE PROFIT & LOSS A/C. IT IS CLAIMED BY THE APPELLANT THAT AS SUCH THERE W AS NO LOSS TO THE REVENUE IN REBOOKING OF THIS UNIT. 4.1 UNIT NO. 318: THERE WERE TWO PARTS IN UNIT NO. 318. THE UNIT WHICH WAS HAVING AREA OF 1000 SQ. FT. WAS ALLOTTED TO MR. ANIL CHAUHAN AS PER THE MEMORANDUM OF UNDERSTANDING FILED AT PAGE 183-1 89 OF THE PAPER BOOK. HOWEVER DUE TO CHANGE IN THE FLOOR PLAN THI S PARTICULAR UNIT WAS REDUCED TO THE SIZE OF 933 SQ. FT. ONLY. THE RATE O F BOOKING WAS ACCORDINGLY ENHANCED TO RS.2800 PER SQ. FT. WHICH THE ALLOTTEE DID NOT OPT. HENCE THE APPELLANT COMPANY TOOK THE SAID FLAT FROM THE ALLOT TEE @ RS.4800 PER SQ. FT. AS PER THE MEMORANDUM OF TERMINATION OF AGREEMENT F ILED AT PAGE 119- 121 ALONGWITH THE COPY OF PAYMENT OF CHEQUE TO SH. ANIL CHAUHAN. THIS 9 I.T.A NO. 6141/DEL/2015 UNIT WAS ULTIMATELY SOLD AT RS.4950/- PER SQ. FT. T O SH. AJIT PAUL AND SONS HUF. THE COPY OF THE SALE LETTER IS FILED AT PAGE 1 90-192 OF THE PAPER BOOK. THE ENTIRE SALE CONSIDERATION OF THIS UNIT HAS BEEN CREDITED TO THE PROFIT & LOSS A/C OF RS.47 61 845/- AND THE COMPENSATION AMO UNT OF RS.20 00 000/- WAS DEBITED TO THE PROFIT & LOSS A/C . 4.2 THE ANOTHER PART OF THIS UNIT WAS ALLOTTED TO MR. ASHOK KR. MEHTA HAVING AREA AS PER THE DRAWING 1440 SQ. FT. (P.B. PG.193-198). THIS UNIT WAS MISTAKENLY SOLD TO OTHER PARTY ALSO AND ACCORDI NGLY ONE UNIT WAS SOLD TO TWO PERSONS. AT THE TIME OF FINAL SETTLEMENT IT WAS OBSERVED THAT A MISTAKE HAS HAPPENED AND THE APPELLANT DID NOT HAVE ANY ADDITIONAL AREA TO BE GIVEN TO THIS PARTY IN LIEU OF HIS ENTITLEMEN T. THEREFORE TO AVOID UNNECESSARY LITIGATION WHICH WAS NOT IN THE INTERES T OF ANYBODY APPELLANT ENTERED INTO AN UNDERSTANDING WITH THIS PARTY AND A N AGREEMENT FOR TERMINATION OF THE AGREEMENT WAS SIGNED IN THE MONT H OF DECEMBER 2009 WHICH IS FILED AT PAGE NO. 122-124 OF THE PAPER BOO K. AS PER THIS AGREEMENT THE UNIT WAS BOUGHT BACK BY THE APPELLAN T COMPANY FROM SH. ASHOK K. MEHTA @ RS.4800/- PER SQ. FT. THE ENTIRE C ONSIDERATION WAS PAID INCLUDING THE MONEY RECEIVED FROM SH. ASHOK K. MEHT A. THE DIFFERENTIAL AMOUNT OF RS.29 52 000/- WAS DEBITED TO COMPENSATIO N ACCOUNT. 5. UNIT NO. 432: AS PER THE ORIGINAL PLAN THIS UN IT WAS ALLOTTED TO MR. NARINDER KUMAR CHOPRA HAVING AREA OF 776 SQ. FT. HO WEVER AT THE TIME OF FINAL DELIVERY AS PER THE NEW LAYOUT THE SIZE GOT REDUCED TO 741 SQ. FT. THE PARTY DID NOT AGREE TO ACCEPT THE UNIT OF REDUCED S IZE. THEREFORE TO AVOID THE UNNECESSARY LITIGATIONS WHICH WAS NOT IN THE IN TEREST OF EITHER OF THE PARTIES THE APPELLANT ENTERED INTO A COMMERCIAL UN DERSTANDING WITH SH. NARINDER KUMAR CHOPRA WHICH IS FILED AT PAGE 125-12 8 OF THE PAPER BOOK. AS PER THIS UNDERSTANDING THIS UNIT WAS BOUGHT BAC K FROM SH. NARINDER KUMAR CHOPRA @ RS.4800/- PER SQ. FT. ACCORDINGLY TH E DIFFERENCE AMOUNT OF RS.17 84 800/- WAS PAID TO THE ABOVE PARTY AND SAME WAS DEBITED TO COMPENSATION ACCOUNT. HOWEVER THE APPELLANT COMPAN Y SOLD THIS UNIT TO UTTARA DEVI @ RS.2500/- PER SQ. FT. AS PER THE COPY OF THE ALLOTMENT LETTER DATED 24.09.2009 WHICH IS FILED AT PAGE 179-181 OF THE PAPER BOOK. THE SALE CONSIDERATION OF RS. 18 52 500/- WAS CREDITED TO THE PROFIT & LOSS A/C. IN VIEW OF THE FACTS STATED ABOVE IT IS AMPLY CLEA R THAT THE COMPENSATION WAS PAID TO THE PARTIES IN WHOSE CASE THE AREA OF T HE ORIGINAL ALLOTTED UNIT WAS REDUCED DUE TO CHANGE OF THE LAYOUT OF THE BUIL DING. HAD THE APPELLANT DID NOT PAY COMPENSATION TO THESE PARTIES IT WOULD HAVE LED TO UNNECESSARY LITIGATIONS WITH THE APPELLANT AND ALSO WOULD HAVE CREATED THE BAD REPUTATION IN THE MARKET. TO AVOID UNNECESS ARY LITIGATION THE 10 I.T.A NO. 6141/DEL/2015 APPELLANT REACHED WITH AN UNDERSTANDING WITH THE OR IGINAL UNIT HOLDERS AND BOUGHT BACK THE ORIGINAL ALLOTTED UNITS FROM TH EM AND PAID COMPENSATION AS PER THE PREVAILING MARKET RATES. TH E EXPENDITURE INCURRED WAS WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE S. THEREFORE THE EXPENDITURE PAID IN THE NATURE OF COMPENSATION IS F ULLY ALLOWABLE U/S 37 OF THE I.T. ACT AND DISALLOWANCE MADE BY THE AO OF RS. 1 09 17 200/- IS DELETED. THUS THE CIT(A) HAS GIVEN A DETAILED FINDING IN RE SPECT OF EACH UNIT WHICH WAS DOUBTED BY THE ASSESSING OFFICER. IN FACT THE EXPENDITURE INCURRED WAS WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSE S WHICH WAS NOT REFUTED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDING AS WELL. THEREFORE THE GROUND NO. 1(II) IS DISMISSED. 11. AS REGARDS GROUND NO. 1(III) THE LD. DR SUBMIT TED THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.50 32 287/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NET DISCLOSING MAINTENANCE INCOME. THE L D. DR SUBMITTED THAT THE ASSESSING OFFICER HAS MADE THESE ADDITIONS BECAUSE SUFFICIENT DOCUMENTS WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. 12. THE LD. AR SUBMITTED THAT BEFORE THE CIT(A) THE ASSESSEE FILED THE ADDITIONAL DOCUMENTS WHICH WAS THOUGH NOT CONSIDERE D STILL ON THE BASIS OF ORDER SHEET ENTRIES THIS ISSUE WAS DECIDED IN FAVO UR OF THE ASSESSEE ON MERIT. 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AND OBSERVATION OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. IT IS SE EN THAT DURING THE YEAR THE APPELLANT HAD RECEIVED MAINTENANCE INCOME OF RS .50 27 287/- AND TDS OF RS.99 998/- WAS DEDUCTED ON THE SAME. THE AP PELLANT HAD CLAIMED TDS OF RS.99 998/- IN THE A.Y. 2010-11 BUT AT THE S AME TIME INADVERTENTLY THE INCOME RELATED TO THIS TDS WAS NOT DECLARED IN THE PROFIT & LOSS A/C IN THE A.Y. 2010-11. IT IS CLAIMED BY THE APPELLANT TH AT IT HAS NEITHER SHOWN THIS MAINTENANCE INCOME NOR CLAIMED THE EXPENSES CO NNECTED TO THIS INCOME WHICH WERE OF RS.49 31 321/- IN THE A.Y. 201 0-11. IT IS CLAIMED BY THE APPELLANT THAT WHILE MERGING THE TRIAL BALANCE IN WHICH MAINTENANCE 11 I.T.A NO. 6141/DEL/2015 INCOME AND MAINTENANCE EXPENSED WERE RECORDED THE SAME WERE LEFT OUT TO BE TAKEN IN THE PROFIT & LOSS A/(L/THE APPELLANT OFFERED THIS INCOME IN A.Y. 2011-12 FOR WHICH THE APPELLANT HAS FILED COPY OF COMPUTATION OF INCOME AT PAGE NO. 101-104. AT PAGE 104 WHICH IS P ROFIT & LOSS A/C FOR A.Y. 2011-12 THE APPELLANT HAS SHOWN UNDER THE HEA D 'INCOME ITEMS RELATED TO PREVIOUS YEAR ' AND OFFERED RS.1 00 966/- IN P&L A/C. IT IS SEEN THAT THE MISTAKE WAS BONA FIDE AS THIS POINT WAS PO INTED OUT BY THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IN F.Y. 2012-13 WHEREAS THE APPELLANT HAD ALREADY TAKEN STEPS TO OFFER THIS INCOME OF RS. 1 00 966/- IN THE A.Y. 2011-12 FOR WHICH RETURN OF INCOME WAS FILED ON 28.09.201I. DURING THE COURSE OF THE APPELLATE PROC EEDINGS THE APPELLANT FILED AN APPLICATION UNDER RULE 46A OF THE I.T. RUL ES 1962 ON 25.02.2015 ALONGWITH THE PAPER BOOK. THE COPY OF THE PAPER BOO K ALONG WITH THE SUBMISSION OF THE APPELLANT WAS FORWARDED TO THE AO VIDE THIS OFFICE LETTER DATED 10.03.2015. THE ASSESSING OFFICER SUBMITTED H IS REPORT VIDE HIS LETTER DATED 20.03.2015. IN THIS REPORT IT IS MENTI ONED BY THE ASSESSING OFFICER THAT AT THE TIME OF ASSESSMENT MANY OPPORTU NITIES WERE GRANTED TO THE APPELLANT FOR SUBMITTING THE DETAILS OF THE MAI NTENANCE EXPENSES HOWEVER NO DETAILS WERE SUBMITTED BY THE APPELLANT AT THAT TIME. THE AO HAS FURTHER MENTIONED THAT APPELLANT HAD SUFFICIENT TIME TO REVISE THE RETURN OF INCOME WHEN THIS MISTAKE WAS DETECTED BY HIM WHILE FINALIZING THE ACCOUNTS FOR A.Y. 2011-12. THE RETURN OF INCOME FOR A.Y. 2011-12 WAS FILED ON 28.09.2011 WHEREAS TIME TO REVISE THE RETU RN OF INCOME FOR A.Y. 2010-11 WAS AVAILABLE TILL 31.03.2012. THEREFORE T HE APPELLANT CANNOT GET THE BENEFIT OF ADMITTING ADDITIONAL EVIDENCE AT THIS STAGE. THE A O-HAS ENCLOSED THE COPIES OF THE ORDER SHEET ENTRIES MADE BY THE AO FOR A.Y. 2010-11. I HAVE EXAMINED THE ORDER SHEET ENTRIES RE CORDED BY THE AO IT IS SEEN THAT THERE ARE SUFFICIENT OPPORTUNITIES GRANTE D TO THE APPELLANT ON VARIOUS ISSUES. HOWEVER THE AO HAS NOT SPECIFICALL Y ASKED ABOUT THE EXPENSES RELATING TO MAINTENANCE IN THE PROCEEDINGS . AS REGARDS THE AOS OBSERVATION THAT IT HAD SUFFICIENT TIME TO REVISE T HE RETURN OF INCOME FOR A.Y. 2010-11 AFTER THE MISTAKE WAS DETECTED IT IS SEEN THAT APPELLANT TREATED IT AS BONA FIDE MISTAKE AND INCOME RELATING TO MAINTEN ANCE WAS OFFERED IN A.Y. 2011-12 BY SHOWING IT AS 'PREVIOUS YEAR ITEM' IN THE PROFIT & LOSS A/C . THEREFORE THE APPELLANT BONAFIDELY BELIEVED THAT O NCE INCOME IS OFFERED IN SUBSEQUENT YEAR NO HARM IS CAUSED TO THE REVENUE AS THE RATE OF TAXATION IS SAME IN BOTH THE YEARS. THEREFORE THE OBJECTION S RAISED BY THE AO FOR NOT ADMITTING THE ADDITIONAL EVIDENCE ON THE GROUND THAT SUFFICIENT OPPORTUNITIES WERE PROVIDED TO THE APPELLANT AT THE TIME OF ASSESSMENT AND ALSO THERE WAS SUFFICIENT TIME WITH THE APPELLANT F OR REVISING THE RETURN OF INCOME ARE NOT TENABLE AND THE SAME ARE REJECTED. T HE ADDITIONAL EVIDENCE FILED BY THE APPELLANT ARE ADMITTED AS IT WAS A BON A FIDE MISTAKE. THEREFORE THE AO IS DIRECTED TO GIVE CREDIT OF EXP ENSES OF RS.49 31 321/- 12 I.T.A NO. 6141/DEL/2015 AGAINST THE MAINTENANCE INCOME OF RS. 50 32 287/- A ND ADD THE NET INCOME OF RS. 1 00 966/- IN THE A.Y. 2010-11. THE A SSESSING OFFICER IS ALSO DIRECTED TO PASS A CONSEQUENTIAL ORDER FOR A.Y. 201 1-12 WHEREIN THE APPELLANT HAS ALREADY OFFERED INCOME OF RS. 1 00 96 6/- WHICH MAY BE REDUCED TO THAT EXTENT IN THAT ASSESSMENT YEAR. THI S GROUND OF APPEAL IS PARTLY ALLOWED. THE CIT(A) HAS GIVEN A DETAILED REASONS AND DESPIT E NOT ADMITTING ADDITIONAL EVIDENCES HAS TAKEN COGNIZANCE THAT WHEN THE MISTAKE WAS DETECTED BY THE ASSESSEE RELATING TO INCOME IN RESPECT OF MA INTENANCE THE SAME WAS OFFERED TO TAX IN A.Y. 2011-12 BY SHOWING PREVIOUS YEAR ITEM. THEREFORE GROUND NO. 1(III) OF THE REVENUE IS DISMISSED. 14. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF NOVEMBER 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 07/11/2019 PRITI YADAV SR. PS * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 13 I.T.A NO. 6141/DEL/2015 DATE OF DICTATION 0 6 . 11 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06 .11 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK