TaxTMI 
TaxTMI 
2020 (4) TMI 579
X X X X Extracts X X X X
X X X X Extracts X X X X
....dicious application of mind, based on presumptions, surmises and conjectures, without any material evidence on record, contrary to facts, without or in excess of jurisdiction, is not sustainable in the eye of law excessive, erroneous and bad in law, the dismissal of the appeal by the learned CIT(Appeals) vide order dt.22.10.2010 is contrary to facts, arbitrary, erroneous and bad in law. 4. Addition of Rs. 82,14,500 u/s.69A of the I.T.Act. a. That the sustaining of the addition of Rs. 82,14,500 under cash seized by the Director of Enforcement, FEMA u/s.69A of the I.T.Act by the learned CIT(Appeals) vide order dt.22.10.2010 is contrary to facts, against principles of natural justice, arbitrary, erroneous and bad in law. b. That both the learned AO and CIT(Appeals) has misconstrued/mis-appreciated the facts and the addition of Rs. 82,14,500 u/s. 69A of the Act is on presumptions, conjectures and surmises, without any material evidence on record and is against principles of natural justice, unjustified, excessive, arbitrary, erroneous and bad in law. c. The learned AO and CIT(Appeals) has mis-appreciated/ ignored the supporting and documents filed in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Directors fees (being a Director in the Board of Vedanta Resources Pic. U.K (a non resident Company of UK) is not taxable in India in view of Article 17 of the India-UK DTAA and the same is fully excludible from Total Income and hence the said having been taxed in the assessment order is contrary to facts, wrong and erroneous and deserves to be excluded from the assessed total income. c. That without prejudice to (a) & (b) above, the order of the learned CIT(Appeals) in sustaining the addition of Rs. 30,75,787/- (being 50% of the aforesaid amount of Rs. 61,51,574) from Vedanta Resources Pic. U.K is contrary to facts, erroneous and bad in law. d. That without prejudice to the Grounds (a) to (d) above, the learned CIT(Appeals) ought to have allowed the Tax credit for the Taxes paid in UK instead of directing that the 'Assessee is at liberty to approach the AO' for credit of Taxes paid in UK. 7. Levy of interest of Rs. 43,974 and Rs. 18,536 u/s.234B, 234C of the Act. a. That the learned CIT(Appeals) has failed to adjudicate the Ground No 6 before him regarding levy of interest of Rs. 43,974 and Rs. 18,536 u/s.234B and 234C of the Act resp....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....1 to 3. Accordingly, we dismiss the ground Nos.1 to 3 as not argued. Ground No.4: Addition of Rs. 82,14,500/- u/s.69A of the I.T.Act. 6. Ld.AR before us submitted that the assessee in the capacity as Karta of his HUF inherited house property at Gwalior along with his three brothers 'HUF, which was sold to Shri Raghav Garg of Mall Road, Morar, Gwalior for a sum of Rs. 100.80 lacs and received advance of Rs. 85 lakhs at New Delhi in cash, on 23.06.2006 which was brought by him to his Bhubaneswar residence. Receipt of advance against sale of the inherited property is supported by sale agreement dt. 23.06.2006, copy of which is placed in the paper book-I at pages 1-2. Thereafter, the assessee immediately left for London (UK) on 26lh June 2006 and the said cash received on account of the said advance for sale of property along with agreement of sale was lying at his residence, therefore, the said cash could not be deposited into the bank before departing for U.K. as the intervening two days 24th & 25th were weekends. The FEMA in the course of the search found the aforesaid cash amounting to Rs. 82,14,500/-, which is out of the advance received against the sale of the house pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ailable. Further, ld. AR submitted that the supporting documents relating to the said seized cash and foreign currency was available at the residence of the assessee and the source of the said seized cash could have been explained to the FEMA authorities but for the absence of the assessee being abroad(UK) and in any case have already been submitted to the FEMA and Income-tax Authorities on the first available opportunity on 10.07.2007 and 17.07.2007 respectively. 7. Further, the contention of ld. AR is that during the course of assessment proceeding, on the show cause notice issued by the AO on 22.12.2008 communicating the assessee as to why Rs. 82,14,500/- should not added to the total income of the assessee on account of undisclosed income, the assessee submitted before the AO that the sale agreement dated 23.06.2006 has duly been executed by the assessee as well as Mr. Raghav Garg on 23.06.2006 and the money as per the said agreement (i.e Rs. 85 lakhs) was received by the assessee from Mr. Raghav Garg on 23.06.2006 in the presence of witness Sri Anand Jain, therefore, ld. AR submitted that the transaction of Rs. 82,14,500/- is not undisclosed income of the assessee. However,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cellation of the sale agreement dated 23.06.06 by virtue of which the buyer agreed to take Rs. 80 lakhs in place of advance given of Rs. 85 lakhs, in installments upto 31st March, 2009 giving rebate of Rs. 5 lakhs, if refund of advance money is made by 31" March, 2008. Ld.AR before us vehemently argued that the source of money has been explained by the buyer as the department has made addition in the hands of the buyer, which subsequently, has been deleted by the appellate authority in the respective appeals. Therefore, the assessee is not required to explain the source of source. 10. Now, to enter into the case of the assessee, we deem it necessary to discuss the case of Mr. Raghav Garg, from whom the alleged money has been received by the assessee on account of sale of house property at Gwalior. The details of the case of Shri Raghav Garg along with other assessees have been filed by the assessee in the additional paper book at pages 40 to 60. With regard to the addition made in the hands of Shri Raghav Garg and others, it was explained that Rs. 65,00,000/- received from sale of jewellery on which AO made addition and CIT(A) deleted on the basis of fact that sale of jewellery ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is seen that return of Shri Rakesh Mangal, Proprietor -M/s Kalicharan Durgaprasad for the assessment year under consideration has been filed on 26.10.2007 declaring income of Rs. 4,01,042/- in Range-1(1), Gwalior. Total purchases of Rs. 1,69,49,690/- have been shown along with sales and closing stock of Rs. 1,74,66,056/- and Rs. 2,55,45,620/- respectively. The same has been accepted by the AO and no adverse inference drawn against trading results and return income declared on the basis of his books of accounts. AO has failed to bring any adverse material on record before rejecting the submissions, statements, affidavits and books of accounts of purchasers, seller produced during the course of assessment proceedings. Accordingly, the CIT(A) deleted the addition of Rs. 65,00,000/-. However, the CIT(A) confirmed the addition of Rs. 20 lakhs. Thereafter the assessee-Raghav Garg the carried the matter before the Tribunal and the Tribunal after considering the submissions of the assessee and findings of both the authorities below has upheld the addition deleted by the CIT(A) of Rs. 65 lakhs and deleted the addition of Rs. 20 lakhs as made by the AO and confirmed by the CIT(A) in ITA No.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., therefore, explained. In the departmental appeal, the Revenue has not produced any material to contradict the findings of facts recorded by the ld. CIT(A). We, therefore, do not find any merit in the departmental appeal. The same fails and is dismissed. 12.1 As regards the addition of Rs. 20,00,000/- confirmed by the ld. CIT(A), it is not in dispute that the assessee produced agreement to sale dated 06.06.06 before the AO through which the assessee received advance of Rs. 20,00,000/- from Shri Kaushal Kishore Pawaiya. The genuineness of the sale agreement has not been doubted by the AO. Copy of the sale agreement is produced in the paper book at page 11 & 12. The same agreement of sale is signed by two marginal witnesses. The AO examined Shri Kaushal Kishore Pawaiya, who has admitted in his statement of giving of advance of Rs. 20,00,000/- in cash to the assessee. When the purchaser of the property has admitted giving of advance to the assessee, if there was any doubt in the minds of the AO of execution of agreement to sale, at least he should have examined the marginal witnesses who have signed the agreement to sale to find out the truth in the matter.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ri Raghav Garg, it is clear that the CIT(A) as well the Tribunal both were satisfied that Rs. 65 lakhs has duly been explained by the purchaser. With regard to Rs. 20 lakhs, the Tribunal observed that Shri Raghav Garg to accumulate the money to purchase the house property from the present assessee i.e. Shailendra Kumar Tamotia, has taken advance by selling his land located in Gwalior and he has been able to prove identity of the purchaser, genuineness of the transaction and the amount actually received from the purchaser as advance. Therefore, availability of Rs. 20,00,000/- with Shri Raghav Garg on execution of agreement to sale is proved by him satisfactorily. Therefore, the Tribunal deleted the addition of Rs. 20,00,000/-. Accordingly, amount of (Rs. 6500000+2000000)=Rs. 85,00,000/- has been deleted by the Tribunal as the same has been explained by the buyer Shri Raghav Garg from whom the assessee Shri Shailendra Kumar Tamotia received the said money in cash. In this case, the FEMA seized Rs. 82,14,500/- from the residence of the assessee and the assessee replied that the same amount is part of Rs. 85,00,000/- which has been taken as advance for sale of his house property fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvations made by the coordinate bench of the Tribunal in case of the purchaser Shri Raghav Garg(supra), from whom the assessee has taken advance on account of purchase of house property of the assessee in accordance with the agreement to sale, we are of the considered view that since the assessee has duly explained the source of complete cash found during the search by the FEMA and the investigation has also been closed in the case of the assessee by FEMA as reproduced hereinabove, the addition made by the AO and sustained by the Ld. CIT(A) is bad in law and liable to be deleted. Therefore, we delete the addition in dispute and allow the ground No.1 raised by the assessee. Ground No.5 : Addition/Disallowance of Rs. 5,32,562/-(reimbursement of expenses) received from Magmesium International, Australia. 13. Ld. AR before us submitted that the assessee has duly submitted all the documents as required by the AO during the course of assessment proceedings as well as in the appellate proceedings also, however, both the authorities below have not considered the submissions of the assessee and the evidence produced by the assessee with regard to the fact that the claim of the assesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the assessment order deserves to be excluded from the assessed total income. Ld. AR also drew our attention to the paper book filed by him and also case laws relied on by him which are placed on record. He also drew our attention to Article 17 of India-UK DTAA, wherein it is mentioned that directors' fees and similar payments derived by a resident of a contracting state in his capacity as a member of the board of directors of a company which is a resident of the other contracting state may be taxed in that other state. From the above, we are of the opinion that the issue requires further examination on the part of the AO. We have also perused the order of coordinate bench of the Tribunal in assessee's own case for AYs. 2005-2006 & 2006-2007, passed in ITA Nos.70/71/CTK/2010, order dated 30.08.2010, as produced by the ld. AR of the assessee and found that the Tribunal while dealing with the very same issue has remitted the matter back to the file of AO for fresh adjudication. In view of the above facts and circumstances of the case and respectfully following the order of the Tribunal in assessee's own case as cited supra, we remit this issue to the file of AO to decide the dis....