TaxTMI 
TaxTMI 
2020 (1) TMI 314
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 10.57 crores from the account of M/s Apra auto India P. Ltd. Keeping in view the fact, that the said company that is M/s. Apra Auto India p. Ltd. was also having accumulated profits of Rs. 21.65 crore, the amount so received by the assessee has been treated as deemed dividend as per the Section 2(22)(e) of the Income Tax Act, 1961. 4. The assessee claimed before the AO that the amount received from M/s Apra Auto India Pvt. Ltd. represented following three distinct transactions: "i) Advance against commercial building Rs. 5,62,00,000/- ii) Anumod Sharma (expense account) Rs. 73,76,584/- iii) Anumod Sharma ledger account Rs. 6,00,84,793/-" (showing Rs. 1,95,390/- as credit Balance) 5. The AO after considering the assessee's explanation on the issue highlighted that claim of receiving advance against commercial building was a ploy to escape the deeming provision of section 2(22)(e). The AO highlighted that agreement to sell between the assessee and M/s Apra Auto India Pvt. Ltd. was dated 03.04.2011 in which reference of bank transaction dated 08.04.2011 was recorded representing a sum of Rs. 1.40 crore given as advance payment and credited i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he oath commissioner and also not registered. It is a ploy to escape the rigors of provisions of Section 2(22)(e). The documents like buyer's agreement and the trifurcated ledger accounts of the assessee in the books of said company appear to have been prepared in so haste that in those ledger accounts the name of the bank in all entries (Debit/Credit) has been mentioned as bank of Baroda whereas all the transactions have been made through bank account of assessee as well as of the company in Nainital bank. She has taken us to the contents of the assessment order along with the Annexures which have been duly perused by us. 7. The ld. AR relied on the submissions made before the ld. CIT (A) and reiterated the same and relied on the order of the ld. CIT (A). 8. Heard the arguments of both the parties and perused the material available on record. The assessee is also engaged in the business of real estate development in collaboration with M/s Unitech Limited and was developing Signature Tower - II, Sector - 15, Gurgaon, Haryana. The assessee entered into buyer's agreement with intending buyers in respect of commercial space in the said property and received advances during t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00 24,284,793 19/05/2011 Repaid To Anumod Sharma 8,500,000 15,784,793 24/05/2011 Repaid To Anumod Sharma 100,000 15,684,793 24/05/2011 Received from Anumod Sharma 50,0000 16,184,793 26/05/2011 Repaid To Anumod Sharma 5,700,000 10,484,793 30/05/2011 Repaid To Anumod Sharma 50,000 10,434,793 07/06/2011 Received from Anumod Sharma 250,0000 12,934,793 14/06/2011 Received from Anumod Sharma 900,0000 21,934,793 22/06/2011 Repaid To Anumod Sharma 5,000,000 16,934,793 22/06/2011 Repaid To Anumod Sharma 400,000 16,534,793 30/06/2011 Repaid To Anumod Sharma 50,000 16,484,793 01/07/2011 Repaid To Anumod Sharma 50,000 16,434,793 05/07/2011 Repaid To Anumod Sharma 500,000 15,934,793 07/07/2011 Repaid To Anumod Sharma 100,000 15,834,793 08/07/2011 Repaid To Anumod Sharma 160,000 15,674,793 14/07/2011 Repaid To Anumod Sharma 1,300,000 14,374,793 25/07/2011 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,000 2,613,793 01/03/2012 Repaid To Anumod Sharma 200,000 2,413,793 02/03/2012 Repaid To Anumod Sharma 150,000 2,263,793 03/03/2012 Repaid To Anumod Sharma 100,000 2,163,793 28/03/2012 Repaid To Anumod Sharma 300,000 1,863,793 29/03/2012 Received from Anumod Sharma 5700,000 7,563,793 31/03/2012 Anumod Sharma (Expenses A/c) 7,368,403 195,390 Total 59,889,403 60,084,793 Closing Balance as on 31/03/2012 195,390 10. From the above, it can be gauged that the assessee had credit balance during the entire financial year in the books of the M/s Apra Auto India Private Limited. Therefore, it can be said that the assessee has not taken any loan from the said company, while the assessee has actually given loan and received repayment during the financial year under consideration of loan given to M/s Apra Auto India Private Limited. 11. We find that the assessee has entered into buyer's agreement with M/s Apra Auto (India) Private Limited for sale of 7000 Sq. Ft. commercial spac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee and amount of Rs. 10,84,00,000/- received from the assessee which includes amount paid on account of advance of Rs. 5,62,00,000/- against purchase of commercial space and also refund of Rs. 5,62,00,000/- after termination of the Buyer's agreement. 14. Further, it can be found that the assessee has also entered into similar buyer's agreement dated 18.04.2011 with M/s NH Learning Infrastructure Services Limited during the financial year under consideration. The buyer's agreement was executed for sale of 5000 sq ft to M/s NH Learning Infrastructure Services Limited for a consideration of Rs. 5,00,00,000/- out of which amount of Rs. 2,50,00,000/- has been received by the assessee during the financial year under consideration as advance as per the terms and conditions of the agreement. The copy of such buyer's agreement with M/s NH Learning Infrastructure Services Limited along with confirmation from the said company for payment of Rs. 2,50,00,000/- to the assessee during the financial year under consideration is similar to the one entered with M/s Apra Auto (India) Pvt. Ltd. The said agreement with M/s NH Learning Infrastructure Services Limited had been terminated du....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee in the books of account of the said company. 17. In nutshell, the assessee has also not received any advance in the nature of loan or advances as contemplated in the section 2(22)(e) of the Income tax Act, 1961 but received advance against sale of commercial space developed by the assessee on his own land in collaboration with M/s Unitech Limited as per Buyer's agreement. We find that provisions of section 2(22)(e) of the Income tax Act, 1961 are not applicable in case of the assessee as the assessee has received advance of Rs. 5,62,00,000/- from the said company against sale of commercial space in Signature Tower - II, Sector - 15, Gurgaon, Haryana. Since, the said receipts of advance of Rs. 5,62,00,000/- against sale of commercial space is not a receipt in the nature of loan or advance as contemplated in section 2(22)(e) of the Income tax Act, 1961 which attracts the provisions of in that section as the said advance is in the nature of business advance which did not fall within the ambit of provisions of section 2(22)(e) of the Income tax Act, 1961. 18. We have gone through the rationale given by the ld. CIT (A), the relevant operative portion is as under: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ings was directed to offer his comments vide this office letter dated 30.07.2015. The AO vide his report dated 29.09.2015 submitted his comments. 11. The perusal of the order of the AO at page no 9 shows that a issue has been raised that the assessee at the time of submission before him submitted ledger account of appellant's dealing with Apra Auto (India) P Ltd and the name of the bank was written as Bank of Baroda whereas actual transaction had taken place through bank of Nainital. The AO on the basis of this mistake opined that the appellant was in a haste because of which the incorrect submission had been made. The AR, during the course of appellate proceedings, has submitted his explanation to clarify the issue as raised by the AO in the assessment order. The submission of the appellant are contained at para 1.2.32 to 1.2.35 of his reply dated 29.07.2015. It has been stressed that the mistake had crept in on account of a technical flaw in the accounting software used by the appellant namely TALLY in which the name of first entry on a single day crops up on the query being issued to the software and on this account, the later entry gets eclipsed for which manual cr....