×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
09-07-2019, Kalyan Lok Nirman, Section 153A, 40A(3), 40A, Tribunal Indore
The above captioned two appeals are filed at the instance of the assessee. Appeals No. 658 & 659/Ind/2017 for Assessment Years 2012-13 & 2013-14 are directed against the order of Ld. CIT(Appeals)-III (in short ‘CIT(A)’), Indore dated 27.07.2017 which are arising out of the order u/s 143(3) of the Income Tax Act 1961 (In short the ‘Act’) dated 30.12.2013 and 22.02.2016 framed by DCIT (Central) & DCIT (Central)-2, Indore respectively.
2. As the issues raised in these appeals are mostly common, these were heard together and are being disposed off by this common order for the sake of convenience and brevity.
3. The sole common issue raised in both these appeals relates to disallowance u/s 40A(3) of the Act for the alleged payment in cash in excess of the limit prescribed u/s 40A(3) of the Act for making payment for purchase of land. Disallowance of Rs.4,26,060/- has been made for Assessment Year 2012-13 and disallowance of 18,50,000/- has been made for Assessment Year 2013-14 u/s 40A(3) of the Act. As agreed by both the parties that the facts and issue remains the same for both the years, we will therefore adjudicate the issue based on the facts and figures for Assessment Year 2012-13. Grounds of appeal raised by the assessee for Assessment Year 2012-13 which reads as follows;
1. That the Ld. CIT(A) erred in confirming the addition of Rs.4,26,060/- made by the AO in respect of cash payment made for purchase of land u/s 40A(3). That on the facts and in the circumstances of the case, the said addition is bad in law, uncalled for and deserves to be deleted.
2. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises.
4. Brief facts of the case are that the assessee is a company belonging to Kalyan Group of Indore engaged in the business of construction, real estate and infrastructure development. The original return of income u/s 139(1) was filed electronically declaring income of Rs. Nil. Search operations were conducted on the business as well as residential premises of the Kalyan Group of Indore from 05.05.2011 to 07.05.2011. Assessment proceeding were initiated under Section153A in this case wherein notices u/s 143(2) and 142(1) were issued on 06.09.2013 and 01.11.2013 respectively. During the course of assessment proceedings the Ld. A.O observed that the assessee had purchased lands during the year as part of its stock in trade, and since they were not sold during the year they were carried forwarded as closing stock. On examining the transaction it was revealed that a cash sum of Rs.4,26,060/- was made for the purchase of land in violation of the limits prescribed u/s 40A(3) of the Act which for the relevant assessment year was Rs.20,000/-. Genuineness of the transaction of purchase of land was not in dispute. Ld. A.O accordingly made disallowance u/s 40A(3) of the Act at Rs.4,26,060/- and assessed the income u/s 153A r.w.s. 143(3) of the Act at Rs.4,26,060/- . The assessee preferred appeal before Ld. CIT(A) but could not succeed.
5. Now the assessee is in appeal before the Tribunal.
6. Ld. Counsel for the assessee submitted that the appellant company acquired certain lands during the year under consideration. Out of the total purchases made during the year a piece of land situated at Gram -Bada Bangda Tehsil -Indore (New Tehsil -Hatoad) Zila -Indore M.P. was purchased and got registered on 31.03.2012 for a total consideration of Rs.17,04,240/- out of which only a nominal amount of Rs. 4,26,060/- was paid in cash whereas the balance amount was paid through banking channel. Complete details and copies of registered sale deeds evidencing the purchase, substantiating the identity of the payees and establishing the genuineness of the transactions were filed before the Learned AO and as well as before the Learned CIT(A), copies of which are