AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 120
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....de by the -AO u/s. 68 of the I.T. Act on account of impugned advance received from M/s. Tirthyatra Investment & Properties Ltd. for sale of land.?" 3. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- when the assessee had failed to discharge his primary onus to justify the cash credits on account of impugned advance received against sale of land and impugned advance from customers by producing necessary documents/evidences in this respect?" 4. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- made by the AO on account of impugned advance from customers & M/s Tirthyotra Investment & Properties Ltd., by ignoring the evidence brought on record by the AO that the assessee failed to prove the identity, creditworthiness and genuineness of transaction as per legal parameter of the provisions u/s. 68 of the IT Act? 5. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,00....
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....act source?" 9. Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,28,50,000/- & Rs. 2,10,00,000/- made by the AO on account of impugned advance from customers & M/s. Tirthyatra Investment & Properties Ltd., thereby without considering and distinguishing the ratio of the judgment of the cases such as Rameshwar Prasad Bagla 68 ITR 653(Allahabad) & Homi Vs CIT 41 ITR 135, 142 by (Supreme Court) wherein it is stated that the totality of circumstances must be considered in a case of circumstantial evidence & the totality of the circumstances has to be taken into consideration and the combined effect of all those circumstances is determinative of the question as to whether or not a particular Act is proved?" 10. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the disallowance of Rs. 6,52,712/- made u/s. 14A of the IT Act r.w.s 8D of the IT Rules made by the AO?". 11. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made u/s. 14A, when clause (3) of the Section 14A of the Act ....
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.... Adv. 500000.00 Anita Chandel 500000.00 Chhaya Yadav 400000.00 Kamlesh Sahu S/o. Pitamberlal Land Adv. 500000.00 Kishor Agrawal Land Adv. 400000.00 Lakhan Yadu 3200000.00 Modi Resources Pvt. Ltd. 1500000.00 Mohit Agrawal 400000.00 Monika Agrawal 500000.00 Naresh Singhania 850000.00 Preeti Sahu Land Adv. 300000.00 Raju Bag Adv. Land 500000.00 Rakesh Madan 400000.00 Ram Bhawan Pandey Land Adv. 500000.00 Sanjay Pandey 500000.00 Sanjeevan Lal Shoury 2200000.00 Santan Sahu Land Adv. 500000.00 Shantilal Meghraj Parakh HUF ( Land Adv.) 1000000.00 Subodh Singhnia HUF ( Land Adv.) 250000.00 Suchi Aurara Land Adv. 500000.00 Sudha Chandel Land Adv. 500000.00 Tirthayatra Properties and Finance Pvt. Ltd. 21000000.00 Total 37,000,000.00 It was observed by the A.O that the aforesaid "agreements to sell" in case of 18 parties were executed on stamp papers sold by Shri Zafar Ali, Stamp vendor. The A.O in order to verify the authenticity of the aforesaid agreements issued a letter u/s. 133(6) of the Act dated 17.12.2016 to the Sr. District Registrar, Raipur wherein he was called upon to furnish his report as regards the genuineness of the stamp papers wh....
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....wan Pande P-580396 434 of 13.05.2013 500000/- 14. Sanjay Pandey P-580428 325 of 03.05.2013 500000/- 15. Sanjeevan Lal Sori P-580430 278 of 30.04.2013 2200000/- 16. Santan Sahu P-580379 -- 500000/- 17. Smt. Suchi Arora P-580380 321 of 03.05.2013 500000/- 18. Smt. Sudha Chandel P-580381 322 of 03.05.2013 500000/- Total Amount 1,28,50,000/- The A.O on the basis of his aforesaid observations called upon the assessee to explain that now when the stamp papers on which the impugned "agreements to sell" that were claimed to have been executed with the aforementioned 18 parties were proved to be fake, therefore, why the amount of Rs. 1,28,50,000/- that was shown to have been received from the aforementioned 18 parties may not be held to be his unaccounted income. In reply, the assessee placed on record "affidavits" of all the aforementioned parties wherein they had duly confirmed of having given advances to the assessee for purchase of land. However, the A.O did not find favour with the aforesaid explanation of the assessee and rejected the same for the following reasons: (a) Out of the total land advance of Rs. 3,70,00,000/- all the ....
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....ce of the Sr. District Registrar. (b) The writing in back of stamp, which is written by the stamp vendor is same as used in the above case of Zafar Ali, Stamp Vendor. (c) The assessee in his submission dated 26.12.2016 in para 10.1 of page no 13, it is submitted that he is enclosing the ledger account and bank statement of the M/s. Trithyatra Investment & Properties Ltd., Raipur but the submission was only supported with ledger account of the purchaser company. (d) Looking to the status of the purchaser company it is not possible to give such a huge amount to the assessee. (e) The purchaser company has cancelled the agreement and not purchased the land for which the land advance was given." 5. It was further observed by the A.O that though the assessee had made investments in exempt income yielding shares but had not offered on a suo-motto basis any disallowance u/s. 14A of the Act. Accordingly, the A.O worked out the disallowance u/s. 14A r.w.r 8D(2)(iii) at an amount of Rs. 6,52,712/-. 6. The A.O on the basis of his aforesaid observations after. inter alia, making the aforesaid additions/disallowances, vide his order passed u/s. 143(3) dated 30.12.2016 assessed the inco....
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.... from the aforementioned parties as unexplained cash credits u/s. 68 of the Act. The CIT(Appeals) was also not persuaded to subscribe to the adverse inferences which were drawn by the A.O by relying on the standalone statements of the stamp vendors. The CIT(Appeals) observed that the duly substantiated claim of the assessee of having received the aforesaid amounts towards advance/earnest money from the aforementioned 18 parties could not have been dislodged only for the reason that the stamp vendor concerned had acted in an irresponsible manner and not properly maintained his records. In fact, it was observed by him that now when all the 18 parties had themselves confirmed the transactions in question and admitted of having advanced money to the assessee, therefore, merely on the basis of suspicion that found its roots in the uncorroborated statements of the stamp vendors that the claim of the assessee could not have been summarily rejected and impugned additions made in his hands. The CIT(Appeals) further observed that Shri Sabbir Ali (supra) had filed an 'affidavit' dated 12.02.2017, wherein he had duly confirmed of having sold the stamp papers on which the "agreement to ....
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....ing sold the stamp papers under consideration. Also, the CIT(Appeals) was of the view that though Shri Zafar Ali (supra) had claimed that he had restarted his work of purchase/sale of stamp papers from 31.03.2014, however, there was no material available on record which would irrefutably evidence that he was not carrying out the activities prior to the said date. The CIT(Appeals) on the basis of his aforesaid observations concluded that there was no justifiable reason for the A.O to have drawn adverse inferences as regards the receipt of advance/earnest money by the assessee on the basis of the respective "agreements to sell" from the aforementioned parties. The CIT(Appeals) was also of the view that now when the assessee had duly substantiated the authenticity of the transactions by placing on record confirmations of the parties who had admitted of having given the respective advances to the assessee, therefore, re-characterization of the amounts received by him from the said parties as unexplained cash credits u/s. 68 of the Act could not be sustained and was liable to be vacated. Accordingly, the CIT(Appeals) on the basis of his aforesaid observations vacated the entire addition....
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.... that the aforesaid addition of Rs. 338.50 lac comprises of two parts, viz. (i) addition towards advances received by the assessee from 18 parties : Rs. 1,28,50,000/-; and (ii) addition towards advance received by the assessee from M/s. Tirthyatra Investment & Properties Pvt. Ltd. Raipur.: Rs. 2,10,00,000/-, which are being dealt with as under: (A) Advance received by the assessee from 18 parties: Rs. 1,28,50,000/- 14. On a perusal of the records it transpires that the assessee was in receipt of an amount of Rs. 1.60 crore from 22 parties. The A.O accepted advances of Rs. 31.50 lac that were received by the assessee from four parties. Accordingly, the controversy hinges around the advances which are claimed by the assessee to have been received by him in lieu of "agreements to sell" from 18 parties, as under: Particulars Amount Amrik Singh Land Adv. 100000.00 Anil Verma Land, Adv. 500000.00 Anita Chandel 500000.00 Chhaya Yadav 400000.00 Kamlesh Sahu S/o. Pitamberlal Land Adv. 500000.00 Kishor Agrawal Land Adv. 400000.00 Lakhan Yadu 3200000.00 Modi Resources Pvt. Ltd. 1500000.00 Mohit Agrawal 400000.00 Monika Agrawal 500000.00 Naresh Singhania 850000.00 Pr....
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....stified drawing of adverse inferences as regards the genuineness of the transactions under consideration which the assessee had duly substantiated on the basis of supporting documentary evidence. Also, we are persuaded to subscribe to the view taken by the CIT(Appeals) that now when both the parties to the respective "agreements to sell" had confirmed the transactions, then, due weightage was required to be given to their respective statements and the same could not have been brushed aside merely on the basis of the unsubstantiated claim of the stamp vendor who had declined of having sold the stamp papers in question. 15. Coming to the supporting documentary evidences which were filed by the assessee to substantiate the authenticity of the respective transactions of receipt of advance/earnest money from the aforementioned 18 parties aggregating to an amount of Rs. 128.50 lac, we find that the A.O had proceeded with on the basis of incorrect facts and had wrongly observed that the entire amount in question was received by the assessee from the said persons in cash. On a perusal of the records, it transpires that an amount of Rs. 62.50 lacs out of Rs. 128.50 lac was received by the ....
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....unable to persuade ourselves to subscribe to the view taken by the A.O that the authenticity of the transaction was to be summarily rejected on the basis of the unsubstantiated claim of Shri Zafar Ali, Stamp vendor. We, thus, in the totality of facts involved in the present case before us finding no infirmity in the view taken by the CIT(Appeals) who in our considered view had rightly vacated the addition of Rs. 128.50 lac made by the A.O u/s. 68 of the Act uphold his order to the said extent. (B). Advance received from M/s. Tirthayatra Investment & Properties Ltd. Raipur by the assessee : Rs. 2,10,00,000/- 17. Before proceeding with the aforesaid issue, we may herein observe that though the A.O had made an addition of Rs. 2.10 crore on the ground that the assessee was in receipt of the said amount from the aforementioned party, viz. M/s. Tirthayatra Investment & Properties Ltd. Raipur, but the same on a perusal of the latter's account is found to be factually incorrect, Page 186 of APB. As is discernible from the record, it transpires that the opening balance of the aforementioned party as on 01.04.2013 was Rs. 1.75 crore (Cr.)., which during the year was supplemented/topped....
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....t, which thereafter on the cancellation of the deal was refunded in tranches through banking channel. Copy of the account of the aforesaid party for the immediately succeeding year i.e. period relevant to A.Y 2015-16 reveals that the total outstanding balance of Rs. 2.10 crore (supra) was repaid by the assessee through banking channel by 30.03.2015., Page 411 of APB. We further find that the assessee had also filed before the A.O a copy of the bank statement which revealed the receipt of entire amount of advance from the aforementioned party, viz. M/s. Tirthayatra Investment & Properties Ltd. Raipur through banking channel. On the basis of the aforesaid facts, we are of the considered view that the assessee had duly substantiated the authenticity of the transaction in question on the basis of irrefutable documentary evidences which till date had not been dislodged by the department on the basis of any material proving to the contrary. 20. At this stage, we may herein observe that the only issue that had weighed in the mind of the A.O for dubbing the transaction under consideration as bogus, was the fact that the entry as regards sale of stamp paper on which the "agreement to sell"....