THE COMMISSIONER OF INCOME TAX-I vs. M/S MAGNIFICENT CONSTRUCTION PVT. LTD.

Income Tax Appeal No.93/2012 20.11.2012 Shri R.L. Jain, learned Senior Counsel with Ms. Veena Mandlik, learned counsel for the appellant. Heard on the question of admission. This order shall also govern the disposal of Income Tax Appeals No.94 to 100 of 2012, as according to the learned Senior Counsel for the appellant, the facts and the question of law involved in all the appeals are identical. For the sake of convenience, facts are taken from ITA No.93/2012. Briefly stated, the respondent – assessee purchased a land for Rs.3.5 crores in an open auction held by the High Court of Judicature at Bombay. The payment of the amount was made by M/s. Zoom Developers Private Limited on behalf of the respondent – assessee. The Assessing Officer made an addition of Rs.70,00,000/- being 20% of the total payment of Rs.3.5 crores by holding that the payment was made in cash as the details of payment were not available in the conveyance deed and no details of payment nor the copies of the relevant bank accounts were furnished.

Feeling aggrieved by the order passed by the Assessing Officer (AO), the respondent – assessee preferred an appeal 2 before the Commissioner of Income Tax (Appeal). The CIT (Appeal) allowed the appeal of the assessee and deleted the dis- allowance made under Section 40-A (3) of the Income Tax Act, 1961 by accepting the submission of the assessee that the AO did not bother to consider that the land was purchased through the open auction conducted by the High Court of Bombay and the amount was paid by M/s. Zoom Developers Private Limited on it's behalf and the AO did not bother to go through the confirmation submitted by M/s. Zoom Developers Private Limited before him. He also ignored the relevant bank statement of M/s. Zoom Developers Private Limited, though filed during the course of the assessment proceedings. The CIT (Appeal) held from the record that the entire payment of Rs.3.5 crores was made through Pay Orders and the Drafts prepared from bank accounts of M/s. Zoom Developers Private Limited on behalf of the assessee and considering the fact that the auction was conducted by the High Court, allowed the appeal and deleted the additions made under Section 40-A (3) of the Act. Against the aforesaid order passed by the CIT (Appeal), the appellant – revenue had approached to the Income Tax 3 Appellate Tribunal (for short, the Tribunal). The Tribunal vide the impugned common order dated 07.06.2012 affirmed the view taken by the CIT (Appeal). The Tribunal found that during the course of appellate proceedings, the CIT (Appeal), after calling the AO, perused the copy of account of the assessee – company and in the books of accounts of M/s. Zoom Developers Private Limited reflecting payment of the entire amount of Rs.3.5 crores through their accounts maintained in Allahabad Bank, United Bank of India and Punjab National Bank had recorded the finding. The Tribunal affirmed the finding of the CIT (Appeal) by observing that the payment was made through different bank accounts and the land in question was purchased through the open auction by the High Court of Bombay and the amount was paid by M/s. Zoom Developers Private Limited on behalf of the assessee. Having considered the submissions made by the learned Senior Counsel for the appellant and having gone through the order passed by the Tribunal, we are of the view that no substantial question of law is involved in the matter. The findings recorded by the CIT (Appeal) and the Tribunal are pure findings of fact based upon appreciation of material available on 4 record. We find no question of law being involved in the matter. The appeal being devoid of any merit deserves to be and is hereby dismissed. No other point urged. (Shantanu Kemkar) (Prakash Shrivastava) Judge Judge Pithawe RC