2018 (10) TMI 1842

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....y any of the grounds of appeal. 3. The appropriate cost be awarded to the assessee." 2. The assessee is a partnership firm constituted on 11/05/2005 with the objects of carrying out plantation, real estate and construction business. The assessee filed its return of income on 31/10/2006 declaring a loss of Rs. 10,772/-. The Assessing Officer received a report of DDIT(Inv), Jaipur vide letter dated 28/3/2010 regarding the on money payment by the assessee in respect of purchase of land situated at Bhankrota, Jaipur for a sale consideration of Rs. 1,76,34,000/- shown in the sale deed, however, an amount of Rs. 1,80,80,000/- was also found to have been paid in cash and was deposited in the bank account of the sellers of the land. Accordingly, the Assessing Officer reopened the assessment by issuing notice U/s 148 of the Income Tax Act, 1961 (in short the Act) on 21/3/2013. The Assessing Officer in the assessment framed U/s 143(3) read with Section 147 of the Act has made an addition of Rs. 2,23,10,000/- U/s 69 of the Act on account of cash payment over and above the sale consideration recorded in the sale deed. 3. The assessee challenged the action of the Assessing Office....

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....le deed cannot be disputed by placing reliance on such photo copy of unregistered agreement, which is not signed by the assessee. Further the Assessing Officer has relied upon the statements recorded of various persons including the sellers without giving an opportunity of cross examination to the assessee. The ld AR has referred to the letter dated 24/2/2014 and 06/3/2014 filed by the assessee during the assessment proceedings and submitted that the assessee has demanded the cross examination of the persons whose statements were proposed to be relied upon by the assessee for making the addition. However, the Assessing Officer did not grant the opportunity of cross examination to the assessee and therefore, in view of the decision of the Hon'ble Supreme Court in the case of Andaman Timber Industries Vs. CCE passed in Civil Appeal No. 4228 of 2006 judgment dated 02/09/2015, the addition made in violation of principles of natural justice is not sustainable. The second leg of argument advances by the ld AR that this is the first year of the assessee firm after its constitution and therefore, in absence of any source of income in the hands of the assessee firm, no addition U/s 69 o....

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....sons and wife of sellers further establishes this fact that there was a cash payment over and above consideration shown in the sale deed. The deposit made in the bank account of the sellers and their relatives matches with the dates of the agreement and sale deeds. Hence, even if the said agreement was not signed by both the parties, the facts revealed in the agreements are further corroborated and established by the sale deed as well as the statements of the sellers and the bank manager. Hence, the ld DR has submitted that this is not a case of addition based on mere statement but tangible material was available with the Assessing Officer which cannot be disputed being the bank account statement, agreement as well as the sale deeds all are conferring the fact of payment of cash against the purchase of the lands in question. As regards the opportunity for cross examination, the ld DR has submitted that the ld. CIT(A) has called for a remand report from the Assessing Officer for giving the opportunity of cross examination to the assessee. During the remand proceedings, one of the person was available for cross examination, however, the assessee chose not to cross examine the witness....

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.... 3. Sh. Ballu Ram Meena 1007108 4,00,000/- 11,70,666/- 14/05/2005 12/08/2005 Do 4. Sh. Harphool Meena 1004534 11,70,667/- 12/08/2005 Do 5. Sh. Satendra Basanwal 1007978 14,00,000/- 12/08/2005 Son of Sh. Bagwataram Seller 6. Sh. Rajendra Kumar Meena 1003946 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Do 7. Sh. Om Prakash Meena 1004337 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Do 8. Sh. Ashok Kumar Meena 1001168 14,00,000/- 12/08/2005 Do 9. Sh. Roshal Lal Meena 1006877 1,50,000/- 14,00,000/- 12/05/2005 12/08/2005 Grandson of Sh Bagwataram, Seller 10. Sh. Jagdish Pd. Meena 100131 7,50,000/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 11. Sh. Manna Lal Meena 1008064 7,15,800/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 12. Sh. Nemi Chand Meena 1005293 7,50,000/- 12/08/2005 Son of Smt. Dhapu Devi Meena, Seller 13. Smt. Sushila Meena W/o Prabhu Dayal Meena 21050100007726 7,50,000/- 12/08/2005 W/o- Sh. Prabhu Dayal Meena, S/o- Smt. Dhapu Devi Meena, Seller The dates of deposit o....

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....ecision is no doubt laid down a guidance and liberty for deciding the issue of addition U/s 69 of the Act but once the fact of payment of cash by the assessee and indisputably the failure of the assessee to explain the source is established by the Assessing Officer then the said decision of the Hon'ble Supreme Court cannot be applied in the facts of the present case. Moreover, it is not the case of the explanation of source of investment was not found to be satisfactory but the assessee has denied the payment of the cash against the purchase of the land and hence there was no explanation on the part of the assessee for the source of such cash payment. Once the fact of payment of cash is established and there is no explanation of such investment by the assessee then the decision of the Hon'ble Supreme Court has no role in the case of the assessee. The ld AR has also relied upon the decision of the Coordinate Bench in the case of M/s Kamakshi Hospitality Pvt. Ltd. Vs DCIT (supra) wherein the Coordinate Bench has deleted the addition made by the Assessing Officer on the ground that the said addition was made on the basis of statement of a third person without giving a opportun....

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....ssessing Officer for non-cross examination if any. 6.2 The addition made by the Assessing Officer in the hand of seller U/s 68 instead of capital gain would not affect the merits of the addition made in the hand of the assessee. The ld. CIT(A) has considered the objections raised by the assessee on this issue in para 4.3 as under: "4.3 I have gone through the assessment order, statement of facts, grounds of appeal, written submission, remand report and rejoinder carefully. It is seen that the AO has made the addition in respect of the unaccounted cash of Rs. Rs. 2,23,10,000/- paid by the appellant towards purchase of land situated at Bhankrota, Jaipur. The cash paid by the appellant over and above the sales consideration recorded in the sale deed was deposited by the sellers in their bank account. The bank manager in his statement recorded by the DDIT, Jaipur has confirmed that it was explained by the depositors that the cash being deposited by them was received by them on sale of the land (Page No. 2 & 3 of the assessment order). The statements of the sellers of property were also recorded u/s 131 and they also confirmed that the cash deposited by them in the bank acco....

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2018 (10) TMI 1842