AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1014
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.... are that the assessee being an individual filed his return of income for the AY 2012-13 and 2013-14 on 30/09/2012 & 29/09/2013 declaring total income of Rs. 23,98,250/- and Rs. 20,31,280/- respectively for the relevant assessment years. Subsequent to the summary assessment, the case was selected for scrutiny under CASS and the statutory notices U/s. 143(2) and 142(1) of the Act were issued and served on the assessee. The AO after considering the submissions made by the Ld. AR of the assessee, concluded the assessments making additions of Rs. 5,22,70,600/- and Rs. 1,66,64,987/- for the AY 2012-13 and 2013-14 respectively. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A), Visakhapatnam. The Ld. CIT(A) considering the submissions and additional evidences made by the assessee, partly allowed the appeal. Aggrieved by the orders of the Ld. CIT(A), the Revenue is in appeal before us. 3. The Revenue has raised two common grounds in both the AYs ie., Ground No.2 & 3 for the AY 2012-13 and Grounds No. 3 & 4 in AY 2013-14 which read as under: Grounds No.2 & 3 for the AY 2012-13: 2. The Ld. CIT (A)-1, Visakhapatnam is not justified ....
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....he Ld. CIT(A) and further stated that the MoU is unregistered. The Ld. DR also submitted that the shares have been transferred after a period of almost seven years. The Ld. DR also produced a copy of the company master data downloaded from the Ministry of Corporate (MCA) website, to state that the company has been struck off by the Registrar of Companies (RoC) for non-compliance. On the second issue pertaining to advances received from prospective buyers of the flats, the Ld. DR submitted that no confirmation letters were received from the prospective buyers evidencing the buying of flats from the assessee before the Ld. AO. Per contra, the Ld. Authorized Representative (Ld. AR) argued that the assessee entered into the MoU being in the nature of slump sale of the company namely Chiraditya Power Private Limited. The Ld. AR further argued that the MoU for transfer of shares between individuals need not require registration as the buyer and the seller have agreed to the terms and conditions as stated in the MoU. On the second issue pertaining to the advance from the prospective buyers of the flats, the Ld. AR submitted that the sale agreement copies of the confirmation letters hav....
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....f the Act. We note from the records that the shares deemed to have been transferred in FY 2017-18. The Assessing Officer, as rightly pointed out by the Ld. CIT(A) should have examined this aspect and should have taxed the income as capital gains in the hands of the assessee instead of treating it as unexplained investment U/s. 68 of the Act. We extract below para 4.2.10 of the CIT(A) order for reference: "4.2.10. The above terms clearly establish that the appellant had sold the plant by way of MoU probably, he was not able to transfer the shares till 2007. In these circumstances the shares deemed to have been transferred to the investors in the FY 2017-18. The Assessing Officer is directed to examine this aspect and bring to tax the capital gains. There is a definite transfer of plant in lieu of shares. Be that as it may, as Assessing Officer's observation that, the transaction is not genuine as there is no transfer of shares, is not correct. The Assessing Officer is directed to examine the GPA and sale deed in favour of investors as well. The alternative view expressed by Assessing Officer in remand report (para 4.5 of Remand report) is answered in MoU dated 6/12/2017. On....
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....that an amount of Rs. 11,35,000/- is pending for settlement with the prospective buyers as they could not be identified. The Ld. CIT(A) has rightly disallowed the amount of Rs. 11,35,000/- which is pending for settlement and were are of the considered view that there is no infirmity in the order of the Ld. CIT(A) on this ground. 8. With respect to additions of Rs 45,08,000/- made during the AY 2013-14 it is observed that the assessee has produced confirmation letters from Sri BV Rao, Sri JRG Verma, Sri N. Apparao, Sri P. Kondala Rao, Sri P. Srinu and Sri Y. Balaraju as per the sale agreement executed. The Ld. AO has also confirmed that the amount was not refunded through prospective buyers by the assessee. Since the Agreement of Sale produced by the assessee confirms the intention of the buyers to buy the flats from the assessee the contention of the assessee that the identity of the creditors and the genuineness of the transaction was not proved by the assessee was not accepted. We therefore find no infirmity in the order of the Ld. CIT(A) and hence no interference is required with respect to the ground adjudicated by the Ld. CIT(A). 9. Ground No.4 raised in AY 2012-13: ....
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....lar year has not earned any exempt income." 14. The Ld. AR submitted that since the assessee has not earned any exempt income during the relevant assessment year and hence disallowance U/s. 14A r.w.r 8D is not warranted. The Ld. AR pleaded that the order of the Ld. CIT(A) be upheld. The Ld. DR relied on the order of the Ld. AO. 15. We find from the record that the assessee has not earned any exempt income to invoke the provisions of section 14A r.w.r 8D of the IT Rules, 1962. Various High Court and Coordinate Benches of the Tribunal have laid down the ratio that there is no requirement for disallowance U/s. 14A of the Act where the assessee has not earned any exempt income. We, therefore respectfully following the judicial precedents on this issue, find no infirmity in the order of the Ld. CIT(A) and this ground raised by the Revenue is dismissed. 16. Ground No.5 of ITA No.72/Viz/2021 (AY 2013-14) Ground No.5. The Ld. CIT (A) is not justified in deleting the addition made by treating the credit entry for Rs. 55,66,536/- in the capital account of the assessee as unexplained cash credits U/s. 68 of the Act. The Ld. CIT(A) has failed to appreciate that this is a colo....