TaxTMI 
TaxTMI 
2004 (11) TMI 292
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....d in asst. yr. 1995-96 and the order thereon may be followed in asst. yr. 1994-95. 4. The learned representatives of both the parties have accordingly argued only in ITA No. 4260/Del/2003 for asst. yr. 1995-96. ITA No. 4260/Del/2003 (Assessee's appeal)-Asst. yr. 1995-96 5. This appeal by the assessee is filed on the following grounds: "1. The learned CIT(A)'s order is vitiated and is not tenable in law on account of wrong recording of several facts and arguments of the appellant on the grounds of appeal/issues raised during the appellate proceedings, and on account of omitting and not dealing with some of the important points relevant to the grounds of appeal as made out by the appellant, which shall be enlisted and explained at the time of hearing this appeal. 2. The learned CIT(A) has erred in law in holding that Addl. CIT had no jurisdiction under s. 144A to deal with the question of validity of initiating the proceeding under s. 147 and that, on the facts and in the circumstances of the case, the latter was right in ignoring the appellant's application on the question of the validity of the proceeding under s. 147 and scope thereof. 3. On the facts and in the ....
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....pening of the assessment under ss. 147 and 148 of the IT Act. (ii) Whether assessee was entitled for exemption under s. 10(22) of the IT Act? 8. The facts as taken from the assessment order are that: 8.1 In this case return of income was filed in the status of AOP on25th Oct., 1995, declaring nil income. Since assessee-trust was running educational institution, surplus of Rs. 14,56,373 was claimed as exempt under s. 10(22) of the IT Act. The case was processed under s. 143(1)(a) on21st Nov., 1995, without making any adjustment. The case was finally completed under s. 143(3) on24th Sept., 1996, on nil income. 8.2 Survey under s. 133A was conducted on 30th Dec., 1999 and among other things, statements of Shri R.C. Singhal, principal, S.S. Bisht, accounts officer, Mahadeo Sahi, estate superintendent, were recorded whereby they were primarily questioned about payments made to certain non-existent persons towards civil repairs and maintenance and interest-free advances to Stepping Stone School, concern being run under proprietorship of Smt. Chandra Raj Laxmi, and also president of Cambrian Hall Educational Trust. The relevant portions of their statements are reproduced which....
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....rs had not yet been received. Statement of the principal indicates that no proper care was taken by concerned officials to scrutinise such payments and these were probably being allowed to happen with deliberate consent of the persons concerned. Regarding interest-free advances toSteppingStoneSchool, the principal stated that forSteppingStoneSchoolalso perhaps the president was Chandra Raj Laxmi and payments were made as loan to the said school for the purpose of construction or extension of school. He was unaware as to whether interest is being charged or not on the amount advanced. Shri S.S. Bisht, Accounts Officer: When asked about certain payments having been made to S/Shri K.B. Singh, Devesh Sharma, Banwari Lal, Kanwar Pal Singh, Sanjay Goyal, Sudhir Gupta, Balraj Suri, Prem Bahadur Singh, Balwant Singh, Shishu Pal Singh, Hem Raj Sahni, Vinod Jain, Pawan Kumar, Jai Kishan, Mohan Singh and to produce their bills related to the work done, he stated bill details in respect of Shri K.B. Singh only. About Shri Prem Bahadur Singh, it was stated that he was a petty contractor and takes some work of minor repair and maintenance. His address was stated to be 5,Guru Road, Dehradun....
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....ted with the fact of the ten persons appeared as sundry debtors in March, 1999, and was asked to clarify when these amounts were adjusted against the bills. He replied that bills were not received by them and amount was outstanding against their names. About specific questions that as per current ledger, Rajendra Kumar and Pranav Pandya have been shown as debtors for amounts of Rs. 85,760, Rs. 75,200, Rs. 62,400, Rs. 67,280, he stated that he did not have bills, therefore, these amounts were pending as sundry debtors. Shri S.S. Bisht also stated that M/sSteppingStoneSchoolis an affiliated institute wherefrom children above class 2 are automatically admitted in this school. Accordingly, payment is made to them according to their need as loan without interest. Shri Mahadeo Sahi, Estate Superintendent: Shri Sahi stated that all petty works are to be attended by daily wage labour but comparatively bigger contracts are awarded to certain contractors like Mr. Jai Prakash and Nand Lal. About major repairs works of last 5 years, Shri Sahi stated that grouting of Shashi Block 1996-97, roof replacement 1998 (auditorium), Septic tank 1997-98, water tank 1998, plaster of boundary wall 19....
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.... Cambrian Hall Educational Trust to which he replied that personally he did not know any person other than Shri Krishan Bhatt, who was employed with him for the last 10 years. Sh. Prem Bahadur and K.B. Singh were stated to be closely known to the president/other members of the trust. Shri Singhal was informed that a survey was conducted in the school trust and after the survey, the enquiries have revealed that the abovenamed persons (except Shri Krishna Bhatt) are not traceable at the given addresses and the payments made by the trust through cheques have been credited in the bank account of such non-existent persons and from there either the money has been withdrawn in cash (through self cheques) by Shri Krishn Bhatt or the money has been converted into a FDR which on maturity has been transferred in the accounts of his (I.C. Sanghal) family members/family concerns. Being an auditor of the school, he was asked to state whether these facts came to his knowledge and whether he had seen that there were proper vouchers and bills in respect of the payments made by the trust because during the course of survey, in many cases, there were no bills available with the trust in respect of th....
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....on-existent. It was done to siphon the school funds for non-educational purposes. Details of money siphoned to non-existent persons are as given below: S. No. Name of the recipient Cheque No. Date Amount (Rs.) Issuing Bank a/c Recipient bank a/c 1. Abhinav Prakash 263065 28-3-1994 1,37,357 CH-6,Young Road 1367, PNB, Indiranagar 2. Lokesh Singh 263073 28-3-1994 1,26,062 -do- 1373, -do- 3. Onkar Singh 263066 28-3-1994 1,27,850 -do- 1366, -do- 4. Onkar Singh 254 23-5-1998 50,000 CH-1 PNB, Indiranagar 5. Onkar Singh 856 29-5-1998 73,528 CH-1 -do- 6. Shree Krishan 263070 29-5-1998 1,54,656 CH-6 1370, -do- 7. Hem Raj Sahni 263068 -do- 132,396 CH-6 1365, -do- 8. Ram Kumar 263067 -do- 1,29,141 -do- 1364, -do- 9. Bir Singh 263069 -do- 1,33,785 -do- 1371, -do- 10. Anurag Garg 263072 -do- 80,896 -do- 1372, -do- 11. Ratan Singh 263075 -do- 1,96,370 -do- 1368, -do- 12. Madan Mohan 263076 -do- 1,84,520 -do- 1369, -do- 13. ....
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....fides of enquiry into the siphoning of money toSteppingStoneSchoolon the ground that the reasons recorded for s. 148 did not carry the siphoning of money toSteppingStoneSchool. However, the AO rejected the contention of the assessee as after amendment no such plea could be taken. The AO on getting the sanction from CIT, Meerut, issued notice under s. 148 of the IT Act on 24th Aug., 2000. The learned counsel for the assessee requested for inspection of the file prior to proceeding under s. 148 which was allowed by the AO. The assessee was informed that reasons have been made part of separate file and could be disclosed when notice under s. 148 is complied with. The assessee has written to the AO that return originally filed may be treated as having been filed in response to notice under s. 148. The statutory notices under s. 143(2)/142(1) were issued and initially the assessee tried to say that no reasons have been recorded under s. 147 of the IT Act. The AO issued notice to the assessee seeking certain clarifications. The assessee was specifically asked that as per facts gathered during the course of s. 133A proceeding in its case, following payments have been found to be made to n....
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....on the part of the assessee-trust to establish the genuineness of the payments allowed against civil repairs and maintenance to non-existent persons. The assessee has all along contested the validity of s. 148 proceedings. About these payments it has been stated that they were producing details of payments made to the contractors, copy of bank statement in support of the payment, copy of TDS return and copy of bill in support of genuineness of expenditure. Reliance was also placed on the statement of Shri I.C. Sanghal. The AO however observed that to prove the genuineness of the expenditure nothing new has been offered. The assessee was not able to prove as to why the payments have been made to such untraceable persons. The AO, therefore, has taken following transactions as unexplained and amounts as mentioned below were added to the income of the assessee as unexplained expenditure on account of following reasons: "1. Shri Vinod Jain has been paid Rs. 1,34,650. Address of Shri Jain as stated by the assessee is Vinod Enterprises, 69, Old Dalanwala, Dehradun, while as per the Department it is 150/1,Chakrata Road, Dehradun,. Shri Mahadev Sahi, estate superintendent, has verified h....
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....llowed and is added to the income of the assessee-trust. 5. Shri Prem Bahadur Singh, who has been allowed payment of Rs. 50,000 is resident of 5B,Guru Road, Dehradun. Assessee has not submitted any bill of Shri Prem Bahadur Singh. Shri Mahadev Sahi, estate superintendent, has stated that he never knew Shri Prem Bahadur Singh. Enquiries conducted by the Department reveal that Shri Prem Bahadur Singh is employed with M/sSteppingStoneSchool, a proprietorship concern of the president of the assessee-trust and is not engaged in any contract work. In the circumstances, payments allowed to him are bogus and same are being disallowed to be being added to the income of the assessee-trust." Addition Rs. 5,99,500 8.6 Transactions with SteppingStoneSchool 8.6.1 The AO from the statements of various persons recorded found that the assessee-trust has been advancing interest-free amount to Stepping Stone School, a proprietary concern of the president of trust, wherein she has substantial interest as per provision of s. 13(1)(c). Time and again assessee was asked to furnish copy of account ofSteppingStoneSchoolas appearing in its books, which was not complied with. It was stated by the....
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.... Raj Laxmi has returned a sum of Rs. 50,00,000 to the assessee-trust in April, 2001. In this background, it was stated that the transaction with M/sSteppingStoneSchoolhas been beneficial to the trust and there has been no siphoning of funds for non-educational purposes. 8.6.3 The AO referred to minutes-referred property at 12, Lytton Road, Dehradun, being taken over by Cambrian Hall Educational Trust as concessional rate by paying a sum of Rs. one crore spread over a period of ten years. The minutes are dt.19th Aug., 1988. The MoU dt.29th Nov., 1988, has been filed which is between Smt. Chandra Raj Laxmi representing M/s Banu & Sons (P) Ltd., 3,Hanuman Road,New Delhi, and M/s Cambrian Hall Educational Trust. It is mentioned under the understanding that the company is the owner of properties at 12,Lytton Road, Dehradun,26 Rajpur Road, Dehradun,,4 Guru Road, Dehradun, and 5,Guru Road, Dehradun. The property at 12,Lytton Road, Dehradun, was agreed upon to be transferred by company to Cambrian Hall Educational Trust to raise funds forSteppingStoneSchoolon the following conditions: "1. That since party No. 2 is not in a position to advance the sum of Rs. one crore at a time being ....
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.... of the case concluded that these agreements were hurriedly made agreements having all sorts of contradictions and discrepancies within itself showing clearly that the name of M/s Banu & Sons (P) Ltd. is being projected to cover up the illegal siphoning of the money toSteppingStoneSchool. Careful consideration of these documents reveals many infirmities. According to the AO, the MoU dt.29th Nov., 1988is an afterthought and concocted story in order to prove the transactions between the Cambrian Hall Educational Trust andSteppingStoneSchool. The AO noted the points of contradictions in the assessment order to prove the point of the Department: "1. M/s Banu & Sons (P) Ltd. is not running this school, which is evident from the case record available in the circle. Also, no advances are shown to have been received by this company from assessee-trust. In fact, the income derived in this company is only by way of interest/rent. On the other hand, Smt. Chandra Raj Laxmi is shown to be proprietor ofSteppingStoneSchoolwhich again is assessed in this range only. In the case records ofSteppingStoneSchoolfor asst. yr. 1998-99, Rs. 4,67,360 received from assessee-trust appears as unsecured loa....
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....per the details submitted by Cambrian Hall Educational. Trust, theSteppingStoneSchoolis debited by an amount of Rs. 4,37,020 at the end of the year. 8. Notwithstanding board minutes dt.19th Aug., 1988, MoU dt.29th Nov., 1988, the fact is that the money given toSteppingStoneSchoolas interest-free has given undue benefit to the president of the trust who is the proprietor of the said school and is having substantial interest in the trust. 9. The principal of the school, accounts officer and the auditor of the school have confirmed in their statements that money given toSteppingStoneSchoolwas in the nature of interest-free loans. 10. The evidence (i.e., assessment records of Banu & Sons (P) Ltd.) reveal that no advance has ever been shown in the balance sheet of Banu & Sons (P) Ltd. The agreement has been entered by Mrs. Chandra Raj Laxmi on behalf of Banu & Sons (P) Ltd., then how is it that the advances are not reflected in the balance sheet of Banu & Sons (P) Ltd.? These advances have been categorically shown in the hands ofSteppingStoneSchoolwhich is under the proprietorship of Mrs. Chandra Raj Laxmi and who has got substantial interest inSteppingStoneSchool. Never in 10 ....
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.... mentioned above. 11. Though many grounds are taken in the grounds of appeal but these raise two issues mainly, that is, reopening of the assessment under s. 147 of the IT Act and claim of the exemption under s. 10(22) of the IT Act. We, therefore, take both the issues separately. Reopening of the assessment under s. 147 of the IT Act 12. The learned counsel for the assessee relied upon ground No. 3 of the appeal and argued that CIT(A) erred in upholding the invoking of the provision of s. 147 and reopening the assessment under the said section and extending its scope to cover the transaction withSteppingStoneSchool. He has referred to p. 27 of the paper book in which reasons for reopening have been mentioned. The learned counsel for the assessee submitted that earlier assessment was completed under s. 143(3) of the IT Act vide order dt.24th Sept., 1996, and no evidence is available on record to justify the reopening of the assessment and that there is no nexus between the material collected and the reasons recorded by the authorities below. He has further argued that at original assessments, facts were disclosed to the Revenue Department. Therefore, there is no question of t....
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....ing the survey statement of four persons, that is, R.C. Singhal, principal, S.S. Bisht, accounts officer, Mahadev Sahi, estate superintendent and I.C. Sanghal, chartered accountant, of the assessee-trust were recorded. From the survey proceedings and further proceedings and investigations carried into the matter, the Revenue Department decided to reopen the assessment proceedings and, as such, proposal was sent to the competent authority who has granted sanction to initiate proceedings under s. 147 of the IT Act. Sec. 147 of the IT Act has been amended w.e.f. 1st April, 1989, and now it is provided that "If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of ss. 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in ss. 148 to 153 referred to as the relevant assessment yea....
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....Mewal Das, Hon'ble Supreme Court held that the reasons for the formation of the belief contemplated by s. 147(a) of the IT Act, for the reopening of an assessment must have rational connection or relevant bearing on the formation of the belief. In the case of Bhanji Lavji, the Hon'ble Supreme Court held that when primary facts necessary for assessment are fully and truly disclosed to the ITO at the stage of assessment of the original assessment proceedings, he is not entitled on change of opinion to commence proceedings for reassessment. In the case of Hindustan Lever Ltd., it was held that facts disclosed and accepted in original assessment, notice under s. 147 not valid. In the case of KelvinatorIndia, it was held that on mere change of opinion no ground for the reassessment. 14.3 However, in the present case, the IT authorities came to the material, facts and evidence with regard to payments to certain non-existent persons towards civil repairs only during the course of survey proceedings conducted under s. 133A on 30th Nov., 1999, that is, after passing of the assessment order on 24th Sept., 1996. The IT authorities collected evidence and material against the assessee which ....
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....nt proceedings". In the matter of Phool Chand Bajrang Lal & Anr. vs. ITO & Anr. (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC), Hon'ble Supreme Court considered the facts that cash loan claimed to be taken by assessee from company, accepted as genuine and original assessments made allowing interest thereon as deduction. Subsequent information from officer of the assessing company that its managing director had confessed that company had not advanced any loan to any person during period covering date of cash loan. Subsequent information (being) definite, specific and reliable, Hon'ble Supreme Court on such facts held that notice for reassessment valid and not mere change of opinion. 14.4 In the present case the IT authorities collected evidence and material against the assessee during survey and came to the knowledge that assessee has made payments to non-existent persons. Despite enquiry such persons were not found available and during course of survey also IT authorities came to the knowledge that the alleged payments given to non-existent persons have been diverted to the family members of I.C. Sanghal, chartered accountant of the assessee, or through them to their connecte....
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.... for rejecting the claim of the assessee. The CIT(A) dismissed the application of the assessee under r. 46A of the IT Rules in which assessee had made a request for admission of the additional document, that is, registered sale deed dt.6th May, 2002, which is with regard to transfer of land in village Khairi Kurd, Pargana Parwa Doon, District Dehradun, in favour of the assessee by Rishi Rana and Krishna Shamsher Rana. The CIT(A) held that this deed was executed after the assessment order and that assessee has failed to prove sufficient cause for not producing this document before the AO. The CIT(A) also held that since the agreement to sale in between the same parties has already been considered and contention of the assessee has been rejected, therefore, there is no question of admission of additional evidence sought to be admitted at the appellate stage. The application of the assessee was accordingly rejected. The CIT(A) also considered the MoU dt.29th Nov., 1988, in which it was held that the assessee-trust advanced the amount in question toSteppingStoneSchoolthrough the MoU was made with Smt. Chandra Raj Laxmi, representing the company, M/s Banu & Sons (P) Ltd. The CIT(A), the....
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....bmitted that statement of Mahadeo Sahi was recorded under s. 131 of the IT Act when no proceeding was pending before the AO and no right to cross-examination is given to the assessee, therefore, such statement cannot be relied on at the assessment stage. The learned counsel for the assessee relied upon the following case law : (i) Decision of Bombay High Court in the matter of G.M. Braveries Ltd. vs. Union of India & Ors. (2001) 161 CTR (Bom) 33 : (2000) 108 Taxman 547 (Bom) in which it was held that power under s. 131(1) can be exercised only if proceedings are pending before concerned authority. (ii) Decision of Allahabad High Court in the matter of Gargi Din Jwala Prasad vs. CIT (1974) 96 ITR 97 (All) in which facts were that permission to cross- examine witnesses given but names of witnesses and substance of statements made by them not given. Therefore, it was held that assessment was vitiated by violation of principles of natural justice, as the permission given for cross-examination of the witness was illusory. (iii) Decision of Bombay High Court in the matter of Jamnadas Madhavji & Co. vs. J.B. Panchal, ITO (1986) 58 CTR (Bom) 1 : (1986) 162 ITR 331 (Bom) in which i....
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....: (1985) 154 ITR 244 (Pat) in which facts were that lenders making payments to the assessee by account payee cheque and assessee also repaid loan and interest and brokerage through account payee cheque, and assessee produced certificate from the bank, therefore, it was held that assessee discharged onus and cash credit cannot be treated as income. The learned counsel for the assessee further submitted that the assessee made advance to M/s Stepping Stone School during 10 years through MoU for the purchase of land but the deal was cancelled as the land was taken into possession forcibly by the police department so another land was offered by Smt. Chandra Raj Laxmi at half of the rate and proper reply was filed before the AO on 21st March, 2002, the copy of the same is filed at p. 53 of the paper book. The learned counsel for the assessee submitted that ultimately, the other subsequently offered land came into the ownership of the assessee-trust through registered sale deed dt.6th May, 2002, and, therefore, assessee filed an application under r. 46A before the CIT(A) for admission of the additional evidence but the same was wrongly rejected by the CIT(A). The learned counsel for the a....
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....hip was not with Smt. Chandra Raj Laxmi. It was with the company, M/s Banu & Sons (P) Ltd., but payment is taken in the account of M/s Stepping Stone School, therefore, the whole story is made to cover siphoning of the funds systematically from assessee-trust to M/s Stepping Stone School as Smt. Chandra Raj Laxmi is proprietor of M/s Stepping Stone School as well as president of the assessee-trust. The learned Departmental Representative submitted that, therefore, the story of purchase of the land and making advance is clearly afterthought and has rightly been rejected by the authorities below. The learned Departmental Representative further submitted that assessee did not prove any sufficient cause for admission of the additional document, that is, sale deed dt.6th May, 2002, and it is afterthought document, therefore, CIT(A) rightly did not admit the additional evidence. The learned Departmental Representative further submitted that since the deal contained in sale dt.6th May, 2002, is not connected earlier with any MoU, etc., therefore, it was rightly rejected from taking into consideration. The learned Departmental Representative submitted that assessee can be entitled for exem....
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....hal, principal, S.S. Bisht, accounts officer, Mahadeo Sahi, estate superintendent and I.C. Sanghal, chartered accountant, during survey. They have made statements, which were incriminating in nature and were made against the assessee and clearly proved in their statements that payments were made to non-existent persons. The IT authorities further gave opportunity to the assessee not only at the stage of survey but at the assessment stage also to prove the genuineness of payments to the non-existent persons. The assessee did not avail of any of the opportunities to prove the genuineness of the payments allowed to non-existent persons. Therefore, the AO has to resort to issue of show-cause notice under s. 144 of the IT Act. Even after issue of such notice, the assessee did not prove the genuineness of the payments to non-existent persons. But, assessee tried to agitate at the assessment stage that the initiation of the proceedings under s. 148 of the IT Act is not in accordance with law. We have reproduced the part of the statements of all the four persons recorded during survey, which is also reproduced in the assessment order. The findings of the AO are also reproduced in this orde....
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....whether the bills for all such payments have been received or not ? In reply to query, Shri R.C. Singhal, principal, stated that these are for general repair and maintenance. Regarding the bills, why these have not been received, it is not in his knowledge. He has further stated in his statement that the estate superintendent or the dealing accountant got the cheques signed from him after showing that either the work has been completed or the bills have been obtained. Relying upon their submissions, the principal signed the cheques. We have reproduced the substance of this statement which was taken from assessment order in the above order, which clearly supports the finding of the AO for rejecting the contention of the assessee as regards payment to the contractors. However, we have also recorded some more part from his statement which clearly proves that it was the duty of the principal to sanction the payments after verifying the bills but the principal in his statement has very clearly stated that he does not know as to why bills have not been received against whom payments have been made. He was unable to answer as to why these amounts have not been adjusted in the accounts. Th....
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....e. Therefore, it is a specific fact came on record that the assessee-trust issued certain cheques in the name of four non-existent persons and from their accounts the amounts are withdrawn by Krishna Bhatt who is working in the office of I.C. Sanghal, chartered accountant of the assessee-trust, and from there, amount is transferred to the family members/family concern of the chartered accountant. The assessee never proved before the authorities below that payments were made genuinely to all the contractors; rather, it came on record that the money paid by the assessee ultimately came in the hands of the chartered accountant of the assessee-trust. Therefore, it was clearly and systematically siphoning of the funds of the assessee-trust. The assessee in its reply dt.15th Feb., 2002, copy of which is filed at p. 3 of the paper book, offered certain comments with regard to the facts emerging from the statements of I.C. Sanghal, chartered accountant. 22.2 The assessee has filed copies of the bills of three of the contractors in the paper book. In the case of Vinod Jain, copy of the bill in a sum of Rs. 1,34,650 is filed at p. 38. On perusal of this bill we find that there is no bill ....
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....he assessee-trust wherein she has substantial interest as per provisions of s. 13(1)(c) of the IT Act. The AO vide letter dt.15th March, 2002, asked the assessee if the transactions of the assessee withSteppingStoneSchoolhave been approved by members of the society and directed to furnish copies of the minutes. The AO specifically asked as to why it should not be taken that the money of the assessee-society has been utilised for the purposes of other than educational by siphoning of the funds. In the same query AO specifically mentioned that copy of the statement of I.C. Sanghal, chartered accountant, has been made available to the assessee. The assessee tried to explain the advances made toSteppingStoneSchoolon the basis of MoU dt.29th Nov., 1988. The authorities below found that the MoU was executed in between Smt. Chandra Raj Laxmi representing M/s Banu & Sons (P) Ltd. and the assessee-trust. The authorities below found that the advance money should have gone to Banu & Sons (P) Ltd. who is owner of the property No. 12, Lytton Road, Dehradun, which is to be transferred to the assessee-trust but the money in question has gone to Stepping Stone School who was not owner of any of th....
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....hoolwas without any valid/lawful reason. The assessee also tried to explain that when deal through MoU was cancelled then Smt. Chandra Raj Laxmi offered another land for assessee-trust for which agreement was executed on 21st March, 2002, in between Rishi Rana, Krishna Shamsher Rana and the assessee-trust, and land was offered at the lesser price for which further sale deed was executed in favour of the assessee on 6th May, 2002, and assessee moved an application for admission of the additional evidence before the CIT(A). We find it is also after thought story of the assessee. This deal was not at all connected with MoU executed by Smt. Chandra Raj Laxmi representing M/s Banu & Sons (P) Ltd. Company. It was a new transaction which appears to have been made to cover up the explanation of the assessee. We further find from the sale deed dt. 6th May, 2002, copy of which is filed on the paper book, that all the payments to these two persons have been made by the assessee for transfer of the land from the year 1996 to 2002. The agreement is executed on21st March, 2002, and all the payments have been made prior to the agreement. The assessee has not explained as to why huge payment was m....
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....s which on maturity have been transferred in the accounts of his family members/family concern and father of the chartered accountant has filed a petition before Settlement Commission for settlement of the matter on the same issue. Therefore, the above cases are clearly applicable against the assessee. The case law relied upon by the counsel for the assessee are, therefore, not applicable. 22.4 It is an admitted fact that all the four persons, that is, principal, etc. of the assessee-trust who have been examined during survey, are still in the service of the assessee-trust. It is also, admitted fact that all the copies of their statements recorded during survey have been supplied to the assessee-trust. It is also admitted fact that assessee never asked for cross-examination of any such person despite copies of the statements were made available to the assessee and they admittedly made the statement against the assessee. Therefore, it is not a case of denial of opportunity to the assessee at any stage. The statements of the four persons which were recorded during survey were recorded by the IT authorities under s. 133A(3)(iii)/133A(6) of the IT Act in which it is provided that an....
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....est in the assessee-trust which were also repaid. The Hon'ble High Court dismissed the appeal of the Revenue mainly on the reasons that the contentions laid down in s. 11 and 13 are not relevant for the purposes of s. 10(22) of the IT Act. In the case before us, no advancing of the loan is alleged. What is stated is that amount was advanced toSteppingStoneSchoolfor the purchase of land but the explanation of the assessee is not found to be correct and explanation of the assessee appears to be afterthought and based upon the documents which according to the authorities below were concocted subsequently to cover up the explanation of the assessee. There was no land available withSteppingStoneSchoolfor transfer to the assessee-trust against whom advance is made. The land belonged to company, M/s Banu & Sons (P) Ltd., represented by Smt. Chandra Raj Laxmi. Therefore, there is no question of making any advance to theSteppingStoneSchool. The reasons given by the AO for rejecting the contention of the assessee at pp. 16, 17 and 18 of the assessment order have not been rebutted by the assessee by any evidence or material, therefore, explanation of the assessee cannot be accepted. The case ....