PR. COMMISSIONER OF INCOME TAX vs. M/S SILVER OAKS TOWNSHIP CENTRAL LUDHIANA

The details of appeals and cross-objections are tabulated below: Sr. No. ITA No. before Tribunal Parties Name Assessment Year Order dated 1. 751/Chd/ 2014 Cross objection No.73- CII of 2017 Pr. Commissioner of Income Tax (Central), Ludhiana Versus M/s Silver Oaks Township Ltd. 2009-10 30.03.2016 2. 749/Chd/ 2014 Pr. Commissioner of Income Tax (Central), Ludhiana Versus M/s Silver Oaks Township Ltd. 2006-07 30.03.2016 3. 464/Chd/ 2014 Cross- objection u/s 260A(7) of the Act. Pr. Commissioner of Income Tax (Central), Ludhiana Versus M/s Silver Oaks Township Ltd. 2008-09 30.03.2016 4. 750/Chd/ 2014 Pr. Commissioner of Income Tax (Central), Ludhiana Versus M/s Silver Oaks Township Ltd. 2007-08 30.03.2016 REEMA SAINI 2018.11.02 16:00 authenticity of this document [HIGH COURT, CHANDIGARH]

The facts are being extracted from ITA No. 245 of 2016. The revenue has filed the appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 30.03.2016 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (for short 'the Tribunal') passed in ITA No. 751/Chd/2014 The assessment year involved is 2009-10. 4. The appellant has claimed following substantial questions of law: ''(i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in law in deleting the addition of Rs.1,22,57,417/- made on account of disallowance u/s 40A(3) of the IT Act, 1961, in respect of cash payments made to sellers of the agricultural land without appreciating that the assessee's business is of real estate and the land is its stock in trade? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in law in deleting the addition of Rs.1,22,57,417/- made on account of disallowance u/s 40A(3) of the I.T.Act, 1961 whereas the assessee could not prove the business exigency/exceptional circumstances for making the cash payments? (iii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in law in allowing the appeal of the assessee by relying on the judgdment of Hon'ble Punjab and Haryana High Court in Income Tax Department has filed a review application in that case?''

The assessee-company was a real estate developer. A search was REEMA SAINI 2018.11.02 16:00 authenticity of this document [HIGH COURT, CHANDIGARH]

Learned counsel for the appellant-revenue argued that the Tribunal had relied upon the decision of this Court in the case of Gurdas Garg's case (supra), wherein the revenue had filed a review petition against the said decision and order dated 16.07.2015 has been re-called by this Court vide order dated 30.09.2016. 8. Learned counsel for the assessee-company contended that the Tribunal has rightly allowed the appeal after considering the case as per the provisions of Section 40A(3) of the Act. REEMA SAINI 2018.11.02 16:00 authenticity of this document [HIGH COURT, CHANDIGARH]

In view of the changed position and the Tribunal being final fact finding authority, it is necessary that the factual aspect of each case is examined afresh.

From the perusal of the order of the Tribunal, it is evident that the Tribunal allowed the appeal following the decision of this Court in Gurdas Garg's case (supra). The said order no longer exists as the same has been re-called in a review application filed by the revenue. In such circumstance, it would be appropriate to remand the matter back to the Tribunal to decide the appeals and the cross-objections afresh after examining the facts of each case in detail. Ordered accordingly.

The appeals, cross-objections and the questions claimed are disposed of as indicated above.