M/S. PGF LTD.,CHANDIGARH vs. DCIT, NEW DELHI

आयकर अपीलीय अिधकरण
िदʟी पीठ “एफ”, िदʟी
ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं
मनीष अŤवाल, लेखाकार सद˟ के समƗ

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “F”, DELHI
BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER &
SHRI MANISH AGARWAL, ACCOUNTANT MEMBER
आअसं.4273 /िदʟी/2013 (िन.व. 2007-08)
आअसं.4457 /िदʟी/2016 (िन.व. 2007-08)
PGF Ltd.,
SCO, 1042-43, Sector-22B,
Chandigarh
PAN No: AABCP-2805-N

...... अपीलाथᱮ/Appellant
बनाम Vs.

Assessing Officer,
Central Circle-4, New Delhi

..... ᮧितवादी/Respondent

आअसं.1322 /िदʟी/2011 (िन.व. 2007-08)
आअसं.2024 /िदʟी/2012 (िन.व. 2008-09)
Assistant Commissioner of Income Tax,
Central Circle-4, R.No. 318, 3rd Floor,
ARA Centre, Jhandewalan Extn.
New Delhi

...... अपीलाथᱮ/Appellant
बनाम Vs.

PGF Ltd.,
SCO, 1042-43, Sector-22B,
Chandigarh
PAN No: AABCP-2805-N

..... ᮧितवादी/Respondent

Assessee by : Dr. Rakesh Gupta with S/Shri Somil Agarwal& Deepesh Garg, Advocates
Department by : Ms. Harpreet Kaur Hansra, Sr. DR
1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09)

सुनवाई कᳱ ितिथ/ Date of hearing

:
15/07/2025

घोषणा कᳱ ितिथ/ Date of pronouncement :
:
13/10/2025

आदेश/ORDER

PER VIKAS AWASTHY, JM:

These four appeals, two by the assessee and two by the Department are for AY 2007-08 and 2008-09. Since, the issues raised in these appeals are intervened these appeals are taken up together for adjudication and are decided by this common order.
2. For the sake convenience, appeal of the Revenue for AY 2007-08 is taken up first for adjudication and thereafter appeals of the assessee for AY 2007-08 will be taken up.
ITA No.1322/Del/2011 for AY 2007-08
3. This appeal by Revenue is directed against the order of Commissioner of Income Tax (Appeals)-III (hereinafter referred to as ‘the CIT (A)’) dated 31.12.2010
for AY 2007-08. This appeal emanates from the assessment order passed u/s.
143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
4. The Assessing Officer (AO) vide assessment order dated 30.12.2009 passed u/s. 143(3) of the Act made addition of Rs.2,11,28,720/- rejecting assessee’s claim of Land Development Expenses paid to following parties:

i.
Ancient Infra Build (P) Ltd.

Rs.68,44,000/- ii.
Bell Flower Infra Build (P) Ltd.
Rs.69,04,000/- iii.
Smt. Lalita Mittal

Rs.14,75,000/-
1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09) iv.
Sh. Rameshwar Mittal

Rs.19,67,920/- v.
Sh. Rameshwar Mittal (HUF)
Rs.9,84,640/- vi.
Sh. Abhishek Mittal

Rs.14,76,280/- vii.
Sh. Abhishek Mittal (HUF)

Rs.14,76,280/-

Total

Rs.2,11,28,720/-
5. Aggrieved by the said assessment order, the assessee carried the issue in appeal before the CIT(A). The assessee furnished additional evidences in the form of copies of ITR’s, confirmations and affidavit etc. of the parties to whom development expenses were paid. The CIT(A) sought remand report from the AO on written submissions and additional evidences filed by the assessee. The Assessing Officer submitted his remand report on 03.12.2010. The CIT(A) after examining the remand report deleted the addition in toto. Hence, the present appeal by the Department.
6. Ms. Harpreet Kaur Hansra, representing the department vehemently defending the assessment order submitted that the survey u/s. 133A of the Act was conducted on the business premises of the assessee i.e. 2nd Floor, Vaishali
Building, Paschim Vihar, New Delhi on 25.11.2008. Certain incriminating documents were found and impounded from the said premises. The assessee was asked to furnish details of the expenses claimed for the year under consideration on account of Land Development Agreements. The assessee was also asked to furnish party wise details along with copies of the accounts. Summons u/s. 131 of the Act was issued to the parties which were served through Inspector. The report from the Inspector was also obtained. As per Inspector report dated 15.12.2009
parties at Sr. No i and ii are operating from same address, whereas, parties mentioned at Sr. No iii to vii are from one family. The assessee was asked to 1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09) produce the parties to whom Land Development Expenses were paid. The assessee expressed its inability to produce the parties. Further no documentary evidences were filed by the assessee to substantiate expenditure claimed. In the absence of any documentary evidences, the assessee failed to discharge its onus in proving genuineness of the expenditure. The ld. DR further submitted that in remand report, the AO objected to admission of additional evidences, no remand report on the additional evidences and merits was filed by the AO. The CIT(A) without granting further opportunity to the AO deleted the additions.
7. Dr. Rakesh Gupta, appearing on behalf of the assessee submitted that the CIT(A) had sought remand report on the additional evidences filed by the CIT(A).
The AO deliberately choose not to comment on additional evidences and only objected to filing of the additional evidences. Thus, the AO accepted additional evidences filed by the assessee. The AO during assessment proceedings gave the name of seven parties (tabulated above) to the assessee on 18.12.2009 i.e. at fag end of the assessment and thereafter completed the assessment on 30.12.2009. The assessee was not given sufficient time by the Assessing Officer to furnish the requisite details. The ld. Counsel submits that the issue relating to Land
Development Expenditure is now settled by the Tribunal in assessee’s own case in the subsequent assessment years i.e. AYs 2004-05 to 2006-07 in ITA No. 2135 to 2137/Del/2010 decided on 27.06.2025. The Tribunal has upheld the order of CIT(A) in deleting the addition on account of Land Development Expenditure.
8. Both sides heard, orders of the authorities below examined. The short issue in appeal by the Department is against deleting of disallowance of Land
Development Expenditure by the CIT(A). The Revenue has also alleged that 1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09) additional evidence was admitted without granting sufficient opportunity to the AO in violation of Rule 46A. A perusal of the impugned order reveals that the assessee had filed certain additional evidences in the form of copies of ITR’s, confirmation and affidavits etc. from the parties to whom payments were made for Land Development. The written submissions and additional evidences were forwarded to the AO and remand report was sought. The Assessing Officer submitted remand report vide letter dated 03.12.2010. The CIT(A) while admitting the additional documentary evidences filed by the assessee observed that during assessment proceedings, the AO provided Inspector report to the assessee on 18.12.2009 at 6 P.M and asked the assessee to furnish requisite documents in relation to payments amounting to Rs.2,11,28,720/-. The assessee vide letter dated 24.12.2009 pointed that due to holidays from 25.12.2009 to 28.12.2009 it is not possible to produce parties or procure documents from the parties in such a short time. The AO completed the assessment on 30.12.2009 as assessment was getting time barred. Thus, the assessee was constrained to file additional evidence during the first appellate proceedings. The opportunity was given to the AO to comment on the additional evidence filed, however, he chose to remain silent on merits of additional evidences. The CIT(A) after examining the documents, submissions of the assessee, also taking note of the remand report deleted the addition.
9. We find that in the subsequent assessment years i.e. AY 2004-05 to 2006-
07, the additions were made by the AO after disallowing assessee’s claim of Land
Development Expenditure. The said additions were made in similar manner allowing insufficient time to the assessee during assessment proceedings. The CIT(A) deleted the additions made by AO. The Revenue carried the issue in appeal
1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09) before the Tribunal in ITA No. 2135 to 2137/Del/2010 (supra). The Coordinate
Bench upheld the order of CIT(A) observing as under:-
“19. We have heard the rival submissions and have perused the relevant material on record. We find that the Assessing Officer disallowed the payment of Rs.
2,52,36,513/- for non-production of A.I. Estates for examination. It is the say of the ld. counsel for the assessee that the said party could not be produced due to the short notice of 7 days. We find that the company is having office in Delhi whereas the services were rendered in Tamil Nadu. We further find that the ld.
CIT(A) observed that the services were provided by the company and payment for the services rendered was made as per the agreement and the bills were raised by the concerned company. Therefore, there is no scope for doubt or suspicion regarding the services rendered. We also find that the Assessing Officer has not brought any positive material or evidence to indicate that there is no services rendered. The ld. CIT(A) is quite justified in holding that merely because of the subjective satisfaction that the company is based in Delhi and not capable of providing services in Tamil Nadu would not give juri iction under the peculiar facts of the case to disallow the genuine expenditure. In view of the above discussion, we uphold the findings of the ld. CIT(A) and dismiss Ground No. 4.”
10. The Revenue has failed to controvert the findings of the CIT(A) and has also failed to distinguish the decision of the Coordinate Bench in assessee’s own case on similar set off facts in subsequent assessment years. In absence of any contrary material, we find no reason to interfere with findings of the CIT(A) on this issue.
11. The Revenue vide application dated 10.10.2019 has raised additional ground of appeal as under:
“1. The ld. CIT(A) has erred in deciding the assessee’s appeal without considering the decision of the Hon’ble Punjab and Haryana High Court (2005)
124 COMP CAS 201 PH.2004-4 Comp LJ 288P, 2004 TTSCL 165 P&H dated
30.07.2024 letter affirmed by the Hon’ble Supreme Court in Civil appeal number
6572 of 2004 dated 12.03.2013 in assessee’s own case.”
1322/Del/2011 & 2024/Del/2012 (AY 2007-08 & 2008-09)