2016 (4) TMI 1085

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....2008-2009. In the appeal filed by the Revenue, Tribunal set aside the order passed by the Commissioner of Income Tax (Appeals), by which the order passed by the Joint Commissioner of Income Tax levying penalty on the assessee under Section 271D of the Income Tax Act was set aside and the penalty levied was restored. 2. We heard the learned Senior Counsel for the appellant and the learned Senior Standing Counsel for the Revenue. 3. Brief facts of the case are that the assessee is a non-resident Indian. Based on letter dated 13.12.2010 from one K.C.Basheer to the Assistant Commissioner of Income Tax, Calicut where Sri.Basheer confirmed that he had paid a sum of Rs. 15,00,000/- to the assessee on behalf of his brother Sri. K.C. Usman, a ....

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....eipt of this notice, the assessee submitted his reply dated 04.03.2011. In this letter, he denied of having taken or accepted any loan or deposit from any person relating to assessment year 2008-2009 and according to him, Rs. 15,00,000/- received from Sri.K.C. Basheer was only an advance received in connection with the sale of a property. He also stated that he is not denying that one Mr.Sreedharan Nair had received Rs. 15,00,000/- for and on his behalf. According to him, he had intention to sell a part of the land near K.V.R. Tower in Kannur and that his friend K.C.Usman was interested in purchasing the property and as such made the advance of Rs. 15,00,000/- through his brother K.C. Basheer from Tellicherry. He also enclosed letter dated ....

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....th his reply to the notice dated 24.02.2011. Counsel clarified that this was an advance paid to the assessee by Sri.K.C.Basheer on behalf of his brother Usman pursuant to an agreement for sale entered into between the parties for the sale of a plot of land owned by the children of the assessee. Therefore, according to the learned counsel, the Commissioner of Income Tax (Appeals) rightly set aside the order of penalty and the Tribunal without any valid reasons interfered with the said order. 8. However, these contentions were contradicted by the learned Senior Standing Counsel for the Revenue and according to him, originally it was conceded that this was a loan and later that was sought to be modified as a case of payment of advance for s....

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....khs as property advance does not find to be a convincing one to us for the following reasons.  (a) The property was said to belong to the four children of the assessee. From the recitals made in the agreement, it is seen that two persons are residing in India and other two persons are doing business abroad. However, the said agreement was signed by one Shri. V.V.Sreedharan, on behalf of the four children of the assessee. It is not explained as to how a third person could enter into such an agreement, that too for sale of a property. The reason why the four children or at least the two persons who are residing in Kathirur Village, Tellicherry Taluk, did not sign the said agreement is also not explained.  (b) The p....

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....unt from 20.10.2010 onwards, i.e., during the course of assessment proceedings. However, the letters furnished by Shri.K.C.Basheer did not mention about the repayments nor did it state about the reasons for cancellation of the sale agreement. The names of children of the assessee or the details of property also do not find place in the said letters. (g) If the amount of Rs. 15.00 lakhs was received as advance for sale of property belonging to four children of the assessee, then the said amount belong to them only and the assessee shall be deemed to have received the amount from his children only. However, the letters written by Shri.K.C.Basheer do not mention about the children of the assessee. The assessee has also failed to furni....