TaxTMI 
TaxTMI 
2012 (1) TMI 369
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....e company for making payment of liabilities towards the erstwhile shareholders of the company from the sources of family members of the assessee. The Assessing Officer has made this addition by dealing the issue at Page 3-5, Para 2, 2.1 & 2.2 and giving conclusive findings in para 2.2 at page 4-5 of the assessment order. Assessing officer has relied on the following documents /papers found and impounded during the course of survey at M/s. Gravita India Limited: i). Draft Agreement between M/s. Shah Buildcon P. Ltd. & Shri Rajat Agrawal. As per this draft sale consideration of this plot was Rs. 2,51,00,000/- out of which sum of Rs. 11,00,000/- had already been paid on 30.12.2006 through cheque as advance. Out of the balance, a sum of Rs. 14,00,000/- was to be paid by January 20.01.2007 and Rs. 2,26,00,000/- were to be paid within 60 days of the date of agreement. ii). Page 47 of Annexure A-36: This loose paper (dated 30.12.2006) conveys that deal finalized in 251/- and advance paid is 11/-. During the course of assessment proceedings, the assessee submitted that these papers found from the premises of M/s. Gravita India Limited did not indicate the complete facts of the transac....
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....eement is neither signed by the buyer nor by the seller. iii) The draft agreement is also not signed by any witnesses. iv) The draft agreement is on a plain sheet of paper and not on stamp paper. v) There are several corrections including overwriting. The dates of payment of Rs. 14 lakhs have been changed from 16.01.2007 to 20.01.2007 and payment of Rs. 2.26 crores from 45 days to 60 days from the date of agreement. vi) There is no mention that balance payment was to be made in cash. 5. The ld. CIT (A) found that the document in question could not be termed as reliable evidence as it was undated and unsigned by the parties in question. It was further observed by ld. CIT (A) that the document impounded from the assessee may not be complete in all respects as businessmen may not choose to sign it or record minimum details on a document and keep the rest in their memory. It is the duty of the Assessing Officer to carry out the necessary investigation by correlating the document with other documents such as the regular books of account, with record kept by outside agencies, such as banks or financial institutions or debtors/creditors and finally by recording the statements of ....
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....ce of Rs. 11 lacs has been paid and balance is payable within 75 days. It does not prove or corroborate that cash of Rs. 1.85 crores had been paid by the assessee. There is no dispute that family members of the assessee i.e. father, mother and wife had actually purchased 10,000 shares of M/s. Shah Buildcon Pvt. Ltd. on payment of Rs. 66 lacs for discharging liabilities. Further an amount of Rs. 1,00,000/- was also spent on transfer of shares. None of these Amounts were found mentioned in the draft agreement. Therefore, the ld. CIT (A) observed that it was clear that the terms of the purchase transactions as mentioned in the draft agreement were never acted upon. According to him, the apprehension of the AO that the final agreement dated 02.01.2007 was not on a stamp paper is unfounded since it was made on a stamp paper (special kind of adhesive stamp) without printed denomination and was also notarized by notary public. The ld. CIT (A) found that the AO had not made any enquiry to prove that the contents of the final agreement and revised agreement were incorrect and not true. The assessee has filed copy of shareholder register of M/s. Shah Buildcon Pvt. Ltd. which showed that shar....
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....trary to the averments made in the subsequent agreements. Nothing was brought on record by the AO that the assessee had actually paid the amount. Under these circumstances, the assessee had successfully shifted the onus on to the Revenue by filing the final and revised agreements dated 02.01.2007 and 14.3.2007. Once the onus shifted to the Revenue, the AO was duty bound to collect evidences so as to believe the contents of these agreements and hold that the transactions recorded therein were not true. The ld. CIT (A) has found that the AO had drawn inferences without corroborative evidences and thus made unsustainable additions. He also relied on the decision in case of D.N.Kamani HUF vs. DCIT (70 ITD 77), Pooja Bhatt vs. ACIT (79 ITD 205) and Aishwarya K Rai vs. DCIT (104 ITD 166) to support his views. 6. The CIT(A) also provided an opportunity to the assessing officer who vehemently argued that the agreement was found from the control and possession of the assessee. In this regard the CIT (A) found that assessee has not disputed the ownership of the documents. What is contended by the assessee is that the transactions as contained in the draft agreement were never acted upon and....
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....ent was also found showing total consideration of Rs. 2.51 crore of which the advance of Rs. 11 lacs was paid on 30.12.2006 and further Rs. 14 lacs was to be paid by January 20.01.2007 and Rs. 2.26 crores was to be paid within 60 days of the agreement. He submitted that though this agreement was not signed but, since, the deal is ultimately finalized by transferring shares of the owner company into the name of family members of the assessee, therefore, there cannot be any doubt as to making payment of the balance consideration as shown in these papers found during the course of survey. He referred the subsequent agreements submitted by the assessee and argued that since these were not found during the course of survey, these are merely afterthought and no cognizance of the same can be taken. He therefore, requested to reverse the order of the CIT(A) and sustain the addition made by the AO. 8. The ld. A/R on the other hand has relied on the order of the ld. CIT(A) and supported all his findings and judgments relied upon by him in deleting the addition. He drew our attention towards the draft agreement found during the course of survey at Gravita India Limited placed in the Paper Bo....
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....anner and the same is evident from the annual reports, share transfer register and books of accounts of M/s. Shah Buildcon Private Limited. All the annual reports etc. were timely filed with the Registrar of Companies before the date of survey itself. The advance payment made as per the documents found also finds place in the final agreements and the same have been found duly recorded. He accordingly argued that the unsigned agreement found during survey was just a first draft prepared by some deed writer which reached finality in form of the signed agreement submitted during the course of assessment proceedings. He submitted that the survey was carried out at Gravita India Limited and the original final agreements were placed by the assessee at his residence and therefore, the same was not found during the course of survey. Had there been statements of the assessee during the course of survey, he could have explained the complete facts during the course of survey proceedings. He submitted that both the agreements are on the proper stamp papers of Rs. 100/-, duly attested by the notary and their enforceability in court of law cannot be dined. He also produced original agreements fo....
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.... consideration and the terms of payment were revised and the payments have been made according to the said terms which are verifiable from the books of accounts and other records of the company M/s. Shah Buildcon Private Limited. A total of Rs. 67,00,000/- have been paid of which Rs. 1,00,000/- is paid by the new shareholders, Shri M. P. Agrawal, father of assessee, Smt. Shashi Agrawal, mother of assessee & Smt. Anchal Agrawal, wife of the assessee to the existing shareholders for purchase of shares and this fact is recorded in the share transfer register of the company placed in the paper book pages 25 & 26. The balance amount of Rs. 66,00,000/- have been paid by these 3 persons related to the company as unsecured loan which have been used by the company to repay the existing loan obligations towards the seller group. The details of payment so made as per the books of the company is placed in the paper book at page 24. Taking into account the above facts, the ld. CIT(A) found that the balance amount of Rs. 1,85,00,000/- cannot be said to have been paid by the assessee only on the basis of the draft agreement and the papers found. We further find that the agreements and the revised....