Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI SANDEEP SINGH KARHAIL, JM
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI SANDEEP SINGH KARHAIL, JM ITA No. 584 & 585/Mum/2022 (Assessment Year 2015-16 & 2016-17) M/s Wadhawa Constructions & ACIT Infrastructure Ltd. Central Circle 5(4) Room No. 1927, 1 st Floor, 301, Platina, Plot C-50, Vs. G-Block Bandra Kurla Air India Bldg. Complex, Bandra (E), Nariman Point, Mumbai-400 021 Mumbai-400 051 ITA No. 631/Mum/2022 (Assessment Year 2015-16) ITA No. 227/Mum/2022 (Assessment Year 2016-17) ITA No. 851/Mum/2022(Assessment Year 2014-15)
M/s Wadhawa Constructions ACIT & Infrastructure Ltd. Central Circle 5(4) Room No. 1927, 1 st Floor, 301, Platina, Plot C-50, Air India Bldg. G-Block Bandra Kurla Vs. Nariman Point, Complex, Bandra (E), Mumbai-400 021 Mumbai-400 051 (Respondent) (Appellant) PAN No. AAACW5097J Assessee by : Shri Jitendra Jain, AR Revenue by : Shri Ajay Singh, DR Date of hearing: 05.09.22 Date of pronouncement : 21.09.2022 O R D E R PER PRASHANT MAHARISHI, AM: A.Y. 2015-16 01. ITA No. 584/Mum/2022 is filed by the assessee against Appellate order passed by the Commissioner of Income- tax (Appeals)-53, Mumbai [the learned CIT (A)] dated
“a) The Commissioner of Income Tax (Appeals) - 53, Mumbai [hereinafter referred to as "CIT(A)"] erred in confirming the addition of Rs.3,68,000/- towards undisclosed income. The Appellant submits that the income has been offered on a percentage of receipt basis under the real income theory and thus the addition made is unjust and deserves to be deleted.
b) The CIT (A) erred in not allowing the deduction of selling and administrative expenses as the same as "Period Cost" and such allowable in the year of its incurrence.”
ITA No. 631/Mum/2022 is filed by the Asst. Commissioner of Income-tax, 5(4), Mumbai (the learned Assessing Officer) against the same order raising following grounds of appeal:-
“(1) Whether the Ld. CITIA) erred in admitting additional evidence under rule 46A despite the fact Whether the repeated opportunities were given to the assessee by the AO and he was not prevented by sufficient cause from producing the evidence as the land is an agricultural land.
(2) Whether the Ld. CITA) erred in admitting additional evidences in contravention of the judgment of Hon'ble Delhi high Court in the case of CIT V. Manish Build Well Pvt. Ltd.(2012) 204 TAXMAN 106 that additional evidence can be produced at first
(3) Whether the Ld. CIT(A) erred in deleting the addition of Rs. 7,03,96,000/ u/s. 40(a)(ia) on account of Agricultural land on the basis of additional evidence submitted by the assessee without providing opportunity to the Assessing Officer of rebuttal under rule 46A.
(4) Whether the Ld. CIT(A) erred in deleting the addition of Rs. 7,03,96,000/ u/s. 40(a)(ia) on account of Agricultural land on the basis of Additional evidence submitted by the assessee without providing opportunity to the Assessing Officer of rebuttal under rule 46A thereby ignoring the reasons mentioned in the assessment order.
(5) Whether the Ld. CIT(A) erred in deleting the addition of 7,03,96,000/- u/s. 40(a)(ia) on account of Agricultural land on the basis additional evidence submitted by the assessee without appreciating the finding of Survey of India (Govt. of India) that such parcel of land lying at Vadoli/Bherele Taluka falls within 8 Km of Panvel Municipal Limits and hence not an agricultural land within the meaning of Section 2(1A) of the Income tax Act, 1961.
(6) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the assessing officer of Rs. 1,78,55,000/- as unaccounted cash expenditure based on seized digital evidence, on the ground that
During the course of assessment proceedings, the learned Assessing Officer noted that
i. Assessee has not deducted tax at source on purchase of land under Section 194IA of the Income-tax Act, 1961 (the Act) amounting to ₹7,03,96,000/- and therefore, it was disallowed under Section 40(a)(ia) of the Act.
ii. as per data assessee has incurred expenditure of ₹1,79,55,000/- during the year and therefore, the addition was made under Section 69C of the Act on account of unexplained expenditure.
iii. Addition of ₹3,68,000/- was made on account of undisclosed income.
The Revenue is in appeal before us. As per ground no.1- 5 of the appeal, the learned Assessing Officer is aggrieved wherein it has been held by the learned CIT (A) that payment made by the assessee for purchase of land amounting to ₹7,03,96,000/- is not subject to tax deduction at source under Section 194IA and accordingly, the disallowance under Section 40(a)(ia) of the Act was deleted allowing the assessee to increase the work-in- progress during the year.
The brief facts in the issue shows that the assessee is constructing residential township at Panvel and acquired agricultural land in the surrounding villages from farmers for its township project at village Bhelre and Bardoli. Admittedly, assessee did not deduct tax at source on purchase of land stating that it is an ‘agricultural land’. Assessee submitted details before learned Assessing Officer stating that the agricultural land purchased is situated in villages which satisfy the criteria of an agricultural land as per provision of Section 2(14) of the Act and therefore, provisions of Section 194-IA of the Act is not applicable. The learned Assessing Officer referred to the data available from the survey of India which provided that the impugned land is situated within 8 K.M. from the local limits of Panvel municipality and therefore, it is not an agricultural land and tax should have been deducted at source on purchase under Section 194-IA of the Act. As the impugned cost of the purchase of land is included in
“5.3 The findings of the AO in the assessment order and the submission made by the appellant have been considered.
During the year under consideration, the Appellant has made payment of Rs. 7,03,96,000/- towards purchase of land at Bherle, Vardoli and Bhinegrwadi in Panvel Taluka. The appellant has not deducted TDS considering the land being an agricultural land. On the other hand, the AO has relied upon a letter from Survey of India in which it was stated that the land at Bherle, Vardoli and Bhngerwadi falls within 8 kms of Panvel Municipal limits. Therefore, the AO has held the land as Non agricultural land within the meaning of section 2(1A) of the IT Act. Accordingly, the AO has made disallowance of Rs.7,03,96,000/- u/s 40(a)(ia) of the Act.
During the appellate proceedings, the appellant has submitted that as per the last census of 2011, the population of Panvel Municipal Council was 1,80,020, therefore, situated within 6 kms from the limits of Panvel Municipal Council is Non-agricultural land. It is also submitted that the letter of Surveyor of India referred by the AO is a general letter and does not give precise distance of the land in question situated villages at Bherle, Vardoli and Bhingerwadi. Further during the appellant proceeding, the Appellant has filed a letter from Sub-Engineer Raigarh Zilla Parishad
The appellant has also brought to my notice that out of total land of Rs. 7,03,96,000/-, the land aggregating to Rs. 1,34,00,000/- was purchased by the Appellant from Mr. Navin Makhija, Managing Director of the Group Companies of the Appellant. In the case of Shri Navin Makhija, the AO in the assessment order u/s 153A r.w.s. 143(3) had made addition of capital gain on sale of such as against exempt agricultural land claimed by the assessee. On appeal by the assessee, my predecessor CIT(A) has treated the land as agricultural land and allowed the appeal in case of Shri Navin Makhija by his order dated 04.11.2019 in Appeal No. CIT(A)-53/1T- 484/DCCC 5(4)/2017-18 for A.Y.2015-16.
The relevant part of the appellate order is as under:-
“5.5. I have considered the submission of the appellant carefully. It is noted that as per the last Census of 2011, the population of Panvel Municipal Council was 1,80,020. Later in 2016 the Municipal Council was upgraded to Panvel
Similar order was passed by My Predecessor in the case of Mr. Navin Makhija for A.Y.2014-15 in appeal no.CIT(A)-53/IT-490/DCC-5(4)/2017-18 order dt. 4.11.2019 and in the case of Mr. Sanjay Chabbaria for A.Y.2014-15 order dt.30.10.2019 in appeal no. CIT(A)-53/IT-572/DCCC-5(4)/2017-18.
Thus respectfully following the order of my precedent CIT(A) in the case of Shri Navin Makhija (supra) for A.Y. 2014-15 and AY 2015-16, the land purchased by the appellant situated at village Bherle, Vardoli and Bhingerwadi is held as the agricultural and TDS provision u/s 194IA of the Act is not applicable in the case of the Appellant. Therefore, the disallowance of Rs. 7,03,96,000/- u/s 40(a)(ia) of the Act made by the AO is deleted.
Accordingly, grounds of appeal no.2 and 3 are allowed.”
According to the provisions of Section 194IA any transferee person responsible for paying to a transferor resident any sum by way of a consideration for transfer of any immovable property, other than an agricultural land, shall at the time of credit of such sum to the account of the transferor or at the time of payment, whichever is earlier shall deduct an amount equal to 1% of such sum as income tax thereon. According to this provision, there is no requirement of withholding tax if the impugned transferred property is an agricultural land. According to explanation (a) agricultural land is defined as agricultural
Ground no. 6 to 10 of Revenue’s appeal is with respect to the deletion of addition under Section 69C of the Act. 013. The brief facts of the case show that certain data was perused by the learned Assessing Officer, which was
Accordingly, both the appeals, of the learned Assessing Officer as well as assessee for A.Y. 2016-17, are dismissed.
A.Y. 2014-15 031. ITA No. 851/Mum/2022 is filed by the Asst. Commissioner of Income Tax, Mumbai against the order passed the CIT (A)-53, Mumbai dated 23rd January, 2022, wherein the assessee has raised following grounds of appeal:-
“(1) That the Ld.CIT (A) erred in admitting additional evidences under rule 46A despite the fact that the repeated opportunities were given to the assessee by the AO and he was not prevented by sufficient cause from producing the evidence as the land is an agricultural land. (2) That the Ld. CIT (A) erred in admitting additional evidences in contravention of the judgment of Hon'ble Delhi high Court in the case of CIT v. Manish Build Well Pvt. Ltd. (2012) 204 TAXMAN 106 that additional evidence can be produced at first appellate stage only when conditions stipulated in rule 46 A are satisfied. (3) That the Ld. CIT(A) erred in deleting the addition of Rs. 29,28,23,500/- under Section 40(a)(ia) on
(4) That the Ld. CIT(A) erred in deleting the addition of Rs. 29,28,23,500/-u/s 40(a)(ia) on account of Agricultural land on the basis of additional evidence submitted by the assessee without providing opportunity to the Assessing Officer of rebuttal under rule 46A thereby ignoring the reasons mentioned in the assessment order.
(5) That the Ld. CIT(A) erred in deleting the addition of Rs. 29,28,23,500/- u/s 40(a)(ia) on account of Agricultural land on the basis of additional evidence submitted by the assessee without appreciating the finding of Survey of India (Govt. of India) that such parcel of land lying at Vadoli/Bherele Taluka falls within 8 Km of Panvel Municipal Limits and hence not an agricultural land within the meaning of Section 2(1A) of the Income tax Act, 1961.
(6) On the facts and in the circumstances of the case and in law, the Id CIT(A) erred in restricting the disallowance of Rs. 21,08,798/- u/s. 14A to the tune of Rs.65,197/-even when the AO rightly worked out the disallowance u/s 14A as per the rule 8D(ii) of Income tax Rule, 1962.
(7) On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in restricting the disallowance u/s. 14A r.w.r 8D to the extent of the
(8) Whether the Ld CIT(A) is justified in deleting the addition of Rs. 21,08,798/- made by the assessing officer u/s 14A r.w. Rule 80D on the basis that the same is not to be applied if no exempt income is earned during the year and neither can it exceed the quantum of exempt income earned during the year, ignoring the clear provisions of the Act and as clarified by the CBDT Circular No. 05/2014 dated 11.02.2014.
(9) On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the addition u/s. 68 of Rs.4,00,00,000/- ignoring the fact that the debenture holders- M/s. Silfix Tradelink Private Ltd (STPL) and M/s. Sitram Investment Limited were dummy companies as per finding of Investigation Wing, Kolkata and assessee has also failed to prove the genuineness of transaction in respect of debenture issued amounts to Rs. 4,00,00,000/- to above dummy parties.
10) The Applicant craves to leave, to add, to amend and/or to alter any of the ground of appeal, if need be.”
Ground no. 9 of the appeal is with respect to the deletion of the addition under Section 68 of the Act of ₹4 crores. We find that two companies have been allotted, the debentures of ₹ 4 crores. The report of the Director of Investigation, Kolkata stated that these are table space companies with no real business and therefore, addition under Section 68 of the Act was made. The assessee submitted that there was a funding arrangement with IIFL Realty Ltd. and India Infoline Finance Ltd. (IIFL) for funding of financial assistance for housing project at Panvel. The trustee to the debentures trust deed was IDBI trusteeship Services Limited. The funding was made by IIFL realty Limited. Based on this, the debentures of ₹4 crores were issued to Sitaram Investment Ltd of ₹1.5 crores and Selfix Trade link Pvt. Ltd. of ₹ 2.5 crores. The debenture was at the coupon rate of 20% per annum payable quarterly. The tenure of the debenture was for 36 months. The debentures were held in Demat account. These debentures were redeemed in 2015. During the course of assessment proceedings, the assessee submitted the requisite bank account, Permanent Account Number, annual accounts and confirmation etc. Sources of fund were stated to be redemption of mutual fund units from income opportunities fund real estate fund. In case of Sitaram Investment Ltd and Silfix Tradelink Private Ltd made investment from Sunlife, the balance sheet of Silfix Tradelink pvt ltd. shown the investment in mutual funds of
Sd/- Sd/- (SANDEEP SINGH KARHAIL) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 21. 09.2022 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. CIT DR, ITAT, Mumbai 5. 6. Guard file. BY ORDER, True Copy//
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai