TaxTMI 
TaxTMI 
2020 (12) TMI 1
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....(A) are required to be vacated. C. That the CIT(A) further erred by sustaining the action of the AO in placing the reliance on the statement recorded of an official of the Axis Bank at the back of assessee and further not providing any opportunity of cross examination to the assessee. Such action of the AO & CIT(A) cannot be sustained as clearly against the natural justice. D. That both CIT(A) & AO have exceeded their jurisdiction by giving a finding that appellant assessee should not have invested in the shares of the company namely India Infotech & Softwares Ltd. and further CIT(A) has also upheld the disallowance purely on the basis of suspicion by ignoring the direct evidence filed by the assessee. E. That the CIT(A) has wrongly upheld the disallowance of Rs. 1,16,04,591/- made out of interest claimed u/s 24b of the Income Tax Act, 1961." 3. In ITA No. 5231/Del/2019, following grounds have been raised by the revenue: "1. Ld. C1T(A) has erred on facts and in law by deleting the questionable credit entries of Rs. 1,80,00,000/- received by assessee from M/s True Value Contractors P. Ltd. merely on the basis that assessee produced additional e....
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....signed by both the parties and also duly witnessed by two witnesses was filed before the AO at the time of assessment. The agreement have been reproduced by AO on page 18 to 21 of assessment order. The salient features of agreement are as follows:- i. The assessee is the seller and M/s. True Value Contractors (P) Ltd. which is a company registered vide CIN U45201DL2005PTC13297J having its registered office at C-17 G/F Gurunanak Pura, Laxmi Nagar, New Delhi through its director Mr. Saurab Jain as buyer. ii. The total consideration of the sale of said property is duly mentioned as 9 Crores in clause no. 1 of the agreement and further in the said clause it is clearly mentioned that the earnest money of Rs. 1.80 Crores has been paid by the buyer by making 4 RTGs from his account to the account of the seller and details have been duly mentioned in the agreement to sell. The balance payable amount has been agreed as 7.20 Crores and the installments and due dates are also mentioned in the agreement itself. Further other various clauses which are the normal clauses in the agreement to sell are also mentioned in the agreement. The agreement has been duly signed by both buy....
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....ors (P) Ltd. which had been scanned and made a part of the assessment order. Further in para 5.3 the AO has alleged that the amount of Rs. 1.80 Crores which is a forfeiture of advance was not found as a credit entry in the books of account of the assessee. This observations of the A.O. are not only factually incorrect but it appears that she has not even applied her mind to the books of account of the assessee where the same has been credited. In this regard the assessee would like to draw your kind attention to the copy of account of True Value Contractors (P) Ltd. wherein Rs. 1.80 Crores has been reflected as receipts through RTGS from True Value Contractors which stands duly credited to their account and on 31st March as a forfeiture of the advance the credit of Rs. 1.80 Crores has been credited to the drawing account of Mr. C.P. Chawla the assessee and the resultant credit "balance of Rs. 82,81,764/- has been reflected in his capital account in the balance sheet. The copy of account and the balance sheet are enclosed herewith for your kind perusal and are enclosed at pages 1 to 6. Further the AO has stated that in the statement of the assessee recorded by her the assessee has s....
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....ermined mind to make this uncalled for addition despite all the clear evidences provided by the assessee. Now the appellant assessee would like to make the following submissions before your goodself in this/regard: a. The advance paid by the buyer is through the RTGs and the details of the same are clearly mentioned in the agreement to sell (Refer to page 19 of Asst. Order) and the same is signed and witnessed by the buyer. b. Despite this on the allegation levied by the AO the assessee had very limited time of just 1 day to file further evidence in this regard but however the assessee confronted its own bank State Bank of India for the verification of the facts and the SBI vide their certificate dated 04.03.2017 (copy enclosed) has certified that Rs. 1.80 Crores have been credited to the account of Chancier Parkash Chawla, the assessee in his account No. 10237358054 from Axis Bank Ltd. Further the SBI has also given details of RTGS wherein it is very clearly mentioned that this RTGS has been made by True Value Contractors (P) Ltd. and stand received from Axis Bank (copy enclosed). The above certificates of SBI are enclosed at pages 7 & 8. c. The assessee....
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....en with. The preset mind giving assessee only one day time to rebut the letter of Axis Bank procured by her at the back of the assessee and not even confronting the same to the assessee and giving the assessee an opportunity to explain. This action of the AO is totally against the principles of natural justice. The statement of Axis Bank procured at the back of the assessee cannot be relied upon. Even- otherwise by way of an additional evidence now being filed the assessee has proved the forfeiture of Rs. 1.80 Crores received from True Valuer/Jafna Contractors (P) Ltd. as genuine. (c) In para 5.7 the AO has reproduced the reply of the assessee dated 30.12.2016 wherein the assessee completely met with all the requirements for proving the cash credit in the books of the assessee and discharge his onus completely as stated above. (d) In para 5.8 the AO has again alleged that Rs. 1.80 Crores received by the assessee in his bank account from Axis Bank account no.913020032425869 does not find place in the statement of Axis Bank filed by the assessee. This finding is totally factually incorrect and the transfers are clearly reflected in the statement of account of Axis B....
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.... to prove that the objections are without any basis. (g) In para 5.11 the AO has doubted-the market value of the plot on the basis of the circle rate for which we have already made our submissions in para 3(iv) of our submissions and also the assessee in his statement recorded by AO has explained this fact while answering to question no. 51. Further the AO has put a charge that the assessee had tried to evade tax. This charge of the AO is completely baseless without any evidence since the amount received and forfeited by the assessee would reduce the cost of the asset and at the time of the sale the capital gain would go up with the same amount. Hence there cannot be any tax evasion. The complete copy of statement of the assessee is enclosed at pages 16 to 27. (h) The observation of the AO in para 5.12 is factually incorrect understanding and applying her mind on the books of accounts and details of the same have been explained in our submissions in para 3(v). It is well settled law that where the assessee has established the identity of the creditor and the transaction has been done through the banking channel the initial burden cast upon the assessee to....
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....u/s 133(6) from Sub-Registrar, Gurugram, Haryana to provide the circle rate of the property as mentioned above. The submission made by them vide letter dated 20/12/2016 shows that circle rate for DLF Phase-I is Rs. 70,000/- per sq. yards for residential property. The area in the above mentioned property is 502.32 sq yards as per the submission made by the assessee, which means the circle rate comes out to be Rs. 3,51,62,400/-. 5.3 The amount of Rs. 1,80,00,000/- being forfeiture of advance was not a credit entry appearing in the books of accounts and the assessee was notable to discharge the onus of establishing the identity, genuineness and creditworthiness of the same. There were contradictions noted in the statement recorded of the assessee, that is in the answer to Question no. 50 the assessee has stated that he had no contact with the True Value Contractors Pvt. Ltd./Jaffa Contractors Pvt. Ltd. after 2014. However, during the course of assessment proceedings the assessee has submitted the bank statements and other details of True Value Contractors Pvt. Ltd./Jaffa Contractors Pvt. Ltd. vide letter dated 15/12/2016.The bank statement of Axis Bank having Account no. 9130200....
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....he assessee. 5.9 Further, the agreement to sell (reproduced below) submitted by the assessee with respect to sale of plot no. 5, Road H-9 in the residential colony known as DLF Qutab Enclave Complex, Distt. Gurgaon, submitted by the assessee vide letter dated 26/12/2016 between both the parties was without any legal stamp paper and it is unlikely that an advance payment to the tune of Rs. 1,80,00,000 given by second party (True Value Contractors Pvt. Ltd.) would be possible without any legal assurance from the first party (assessee). In the same letter the assessee has further submitted that"the agreement being produced was agreement within the parties and not on any legal stamp paper". This itself raises doubt on the veracity of the claim of the assessee. 5.10 The genuineness of the transactions are further questionable by the fact that the receipt of payment (reproduced below) of advance money to the tune of Rs. 1,80,00,000/- submitted vide letter dated 15/12/2016 and also the copy of letter dated 10/02/2014 of True Value Contractors Pvt. Ltd informing their inability to make balance payment vide letter dated 16/12/2016 are not certified copies and have illegible signature ....
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....actors (P) ltd (now Jaffna contractors) for sale of Plot No 5, Road H-9 in the residential colony- DLF Qutub Enclave, Distt. Gurgaon for an amount of Rs. 9 crore. The appellant received Rs. 1.80 crore as earnest/advance money as detailed in clause 1 of the agreement to sell. However, subsequently, the deal fell through and the buyer True value Contractors agreed to forfeit the amount of Rs. 1.80 crore paid as earnest money. These facts were brought to the notice of the AO appellant during the course of assessment proceedings. The appellant submitted that payment was made by the buyer from his Axis bank account through RTGS in 4 tranches and was credited in the bank account of the seller appellant. The AO made independent inquiries. Summons were issued to the buyer to verify the facts detailed by the assessee but were not responded to. Information u/s 133(6) was also called for from the manager, Axis bank to verify the bank statement of the buyer. The manager informed that Account No 913020032425869 belonged to M/s Excel Buildtech (P) Ltd in the name of Bashershar Nath resident of 4132, Nasa Bazar, New Delhi. A perusal of the account showed there was no entry of Rs. 1.80 crore. The ....
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....ngs account. 7. Now assessee is submitting the Certificate issued by the SBI and his Statement of the account, but still the same are not acceptable as these submissions arc readily available with the bank and could have been submitted during the assessment. After providing reasonable opportunities to the assessee he failed to provide the above mentioned submissions. So, the above mentioned amount i.e. Rs. 1,80,00,000/- was added back to the taxable income of the assessee. 8. Also, assessee's contention that AO asked for the submissions at the last moment, doesn't hold ground as its assesee's own account, so assessee intentionally delayed the assessment proceedings to the last hour so that proper investigation or inquiry could not be made. From a perusal of the above, it is clear that the AO has refrained, commenting on the merits of additional documents filed and has .simply stated that the certificate of SBI could have been filed during assessment proceedings and as it was not filed then, and hence it may not be admitted under Rule 46A. The AO's comments do not controvert the credibility of the bank certificates and refraining to comment upon this relevan....
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....ractors (P) Ltd. A scanned copy of the certificate is reproduced as under (overleaf): From a perusal of the above certificate of SBI, it is apparent that the AO fell into error in holding that the amount of Rs. 1.80 crore did not emanate from the bank account of True Value Contractors (P) Ltd and was hence unexplained income of the appellant. An affidavit from Jaffna Contractors (P) Ltd (previously True Value Contractors (P) Ltd. was also filed to authenticate claim. In normal circumstances, an affidavit does not have any evidentiary value. However, the SBI certificates corroborate the deposition in the affidavit and the affidavit can therefore not be brushed aside. Also, the AO has failed to controvert the veracity and credibility of the SBI certificates furnished by the appellant and reproduced supra. It is apparent that the AO relied upon a bank certificate pertaining to the account of one Excel Buildtech instead of the bank account of True value contractors (P) Ltd. As this fact was confronted to the appellant at the fag end of the assessment proceedings and as he was allowed only a day to rebut the same, the error and the consequent conclusions of the AO were based on a fac....
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.... revenue are dismissed. Order Pronounced in the Open Court on 27/11/2020. ============= Document 1 NOW THEREFORE, THIS AGREEMENT WITHNESSTH AS FOLLOWS: 1. Sale Price: The total sale consideration for the sale of the said property has been fixed at Rs.9,00,00,000/- (Rupees Nine Crores only), of which the BUYER has paid a sum of Rs. 1,80,00,000/- (Rupees one crore eighty lacs only) as per details given below: Date Bank Mode of payment 01.01.2014 Axis Bank Ltd. RTGS 01.01.2014 Axis Bank Ltd. RTGS 02.01.2014 Axis Bank Ltd. 02.01.2014 Axis Bank Ltd. RTGS RTGS Amount (Rs.) 50,00,000/- 50,00,000/- 40,00,000/- 40,00,000/- 2 3. Total 1,80,00,000/- As "Earnest Money" by RTGS through Axis Bank prior to the execution of this Agreement, receipt of which the VENDOR hereby confirms and acknowledges. The balance sum of Rs. 7.20,00,000/- (Rupees Seven Crores Twenty Lacs only) shall be payable as follows: " A sum of Rs. 1,80.00.000/- (Rupees One Crore Eighty Lacs only) shall be payable on or before but not later than 20th January, 2014. A sum of Rs. 1,80.00.000/- (Rupees One Crore Eigh....
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....r True Value Contractors (P) Limited Document 3 STATE BANK OF INDIA ASAF ALI ROAD NEW DELHI PH-011-23233141, 011-23237223 e-mail- [email protected] Date: 04/03/2017 TO WHOM IT MAY CONCERN This is to certify that the following transactions were credited to Sh Chander Parkash Chawla account no 10237358054 from Axis Bank Ltd. Date Amount UTR No. 01/01/14 50,000,00 UTIBH14001063922 01/01/14 50,000,00 UTIBH14001063895 02/01/14 40,000,00 UTIBH14002090386 02/01/14 40,000,00 UTIBH14002098649 à¤à¤¾à¤°à¤¤à¥€à¤¯ सà¥à¤Ÿà¥‡à¤Ÿ STATE BANK O Branch Manager J KALRA Document 4 STATEMENT OF THE ACCOUNT: 00000010237358054 FOR THE PERIOD 20140104 TO 20140304 select to _date('31-dec-1899', 'DD-MON-YYYY)+VALUEDATE as VALUEDATE,to_date('31- dec-1899', 'DD-MON-YYYY)+POSTDATE as POST DATE, TRANCODE.jrino as JOURNAL NO AMOUNT BALANCE,CHEQUENO, NARRATION, INB_REF_NO from output0052745272 order by recno desc ERROR at line 1: ORA-00942: table or view does not exist VALUEDAT POST_DAT BALANCE CHEQUENO TRANCODE JOURNAL_NO NARRATION AMOU....