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Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI
Before: Shri Joginder Singh, & Shri Ashwani Taneja
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 19/08/2011 of the First Appellate Authority, Mumbai. The only ground raised in the present appeal is with respect to enhancing the income by Rs.23,50,000 u/s 40A(3) and addition of Rs.24,84,750/- made to the returned income and further confirming the disallowance of commission expenses of Rs.2,61,454/- made to the returned income.
During hearing, the ld. counsel for the assessee, Shri Vijay Kothari, advanced arguments, which are identical to the ground raised by inviting our attention to the relevant finding contained in the assessment order as well as in the order of the Commissioner of Income Tax (Appeal). On the other hand, ld. CIT-DR, Shri N.P. Singh, though defended the conclusion arrived at in the impugned order but fairly explained the contradictions contained in the orders i.e. assessment order as well as in the impugned order.
2.1. We have considered the rival submissions and perused the material available on record. The facts in brief, are that Shri Mahendra M. Banthia, the present assessee, at the relevant time was a broker, dealing in land and was also acting as a land aggregator to various groups. One of the main business of the assessee was to purchase the lands from the farmers, as per the requirements of the various groups/corporate and thereafter to complete the legal formalities and then to sell the same to the groups/corporate. A search and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter the Act) was carried out at the business/residential premises of the assessee on 05/03/2009. It was found that none of the family members of the assessee were filing returns of income. As per the Revenue, even the assessee did not file return of income u/s 139 of the Act and only consequent to the action u/s 132 of the Act, notice u/s 153A was served upon the assessee to which the assessee filed return declaring total income at Rs.4,13,78,790/-. Subsequently notices u/s 143(2) and 142(1) of the Act along with questionnaire were issued and served upon the assessee. As per the details filed by the assessee, it was noticed that the assessee claimed expenditure in respect of payments made otherwise than by an account payee cheque, exceeding Rs.20,000/-. The details of such payment are available in para 3.1 of the impugned order. Considering the reply of the assessee, the commission payment were disallowed u/s 40A(3) and added back to the income of the assessee.
2.2. It was further noticed that as per sale deeds, submitted by the assessee, in the case of one shri Dattu Shivram Kohli, the assessee has received Rs.23,25,000/- from M/s Selene Buildwell Pvt. Ltd. for purchase of 0.93 acres land in Jasai Village for which nothing was paid to the farmers and the sale deed was registered on 20/06/2007. A show cause notice was issued to the assessee as to why the impugned amount should not be treated as income of the assessee. In response, to the show cause notice, the assessee claimed that the concerned farmer refused to take the payment. In the absence of any evidence or satisfactory reply from the assessee, the amount of Rs.23,25,000/- was held to be income of the assessee u/s 28(iv) of the Act and the same was added as income of the assessee.
2.3. Likewise, the assessee has claimed brokerage/commission of Rs.52,61,984/- during Assessment year 2008-09 on account of one Adinath V. Patkar, who on verification confirmed receipt of Rs.50,00,530/- only, thus, the remaining amount of Rs.2,61,454/- was disallowed and added as income of the assessee.
2.4. On appeal before the Commissioner of Income Tax (Appeal), in para 2.6, there is a finding that the impugned amounts were made in cash or through bearer cheque. The assessee took a stand before the Commissioner of Income Tax (Appeal) that the payments were made to the village farmers, who are illiterate. However, this factual matrix was neither confronted to the Assessing Officer nor any evidence was brought on record, thus, there are contradictions between the claim of the Assessing Officer that payments were not accepted by the farmers and the finding in the impugned order that the payments were made to the farmers is not borne out from the facts, thus, the assessee is directed to furnish the necessary evidence of factual matrix before the Assessing Officer, who will examine the claim of the assessee and then directed to decide in accordance with law. The assessee be given opportunity to substantiate his claim. If the Ld. Assessing Officer, so desires, he may record the statement of the farmers from whom lands were purchased. The assessee is directed to produce such farmers before the Assessing Officer. Thus, the appeal of the assessee is allowed for statistical purposes only.
Finally, the appeal of the assessee is allowed for statistical purposes only.
This order was pronounced in the open court in the presence of Ld. representative from both sides at the conclusion of the hearing on 25/04/2016.
Sd/- Sd/- (Ashwani Taneja) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 25/04/2016 f{x~{tÜ? P.S/.�न.स.
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai