TaxTMI 
TaxTMI 
2022 (11) TMI 205
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....estments in properties were found and seized from the office premises of the Assessee. A Memorandum Of Understanding dated 14th December, 2011 ('MOU') marked as Annexure A-11 between one Shri Devender Kumar ('Devender') and M/s Newage Infrabuilders P. Ltd. ('Newage Infra') pertaining to investment in property in village Harchandpur, Gurgaon was seized from the premises of the Assessee. Devender made a payment of Rs. 20 crores cash for the purchase of land at village Harchandpur from Smt. Saroj Sharma and others ('Saroj'). The MOU led to the addition of Rs. 20 crores in the hands of the Assessee under Section 68 of the Act which has been deleted by the ITAT in its impugned order, and the said deletion is a subject matter of challenge in the present appeal. 3. Learned senior standing counsel for the Revenue states that the ITAT failed to consider that the MOU executed between Devender and Newage Infra was found at the premises of the Assessee. The non-traceability of Newage Infra and its directors, the filing of the police complaint and court cases against Smt. Saroj Sharma ('Saroj') in the name of the individuals is attributable to the Assessee as well as Devender and not the compa....
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....ever, the summons was received back unserved and the inspectors deputed to serve the summons reported that the company could not be found at the given address. Notices issued under Section 153A read with Section 153C of the Act to Newage Infra also remained unserved. Similarly, the notices issued by the AO to the directors of Newage Infra remain unserved and the inspectors reported that no such person was found at the address. 5.3. During the course of the assessment proceedings, the Assessee submitted before the AO that Devender is an independent person and not related to the Assessee. 5.4. The Assessee stated before the AO that he had entered into a separate agreement for purchase of land at village Harchandpur from Saroj on behalf of a distinct company Megatech Realtors Pvt. Ltd. ('Megatech') and had separately paid Rs. 10 crores to Saroj. However, the said transaction is independent, distinct and unrelated with the transaction undertaken by Devender on behalf of Newage Infra. 5.5. Though the statement of Devender had been recorded by the Investigation Wing on 18th October, 2013, before the Assistant Director of Income Tax ('ADIT') (Inv.), the AO summoned Devender under Secti....
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....vender and Newage Infra and the Assessee herein is not even remotely connected to MOU. Thus, the ITAT held that the addition of Rs. 20 crores in the hands of the Assessee is wholly unjustified and thereby directed the deletion of the said amount. The relevant finding of the ITAT is at paragraph 14 of the impugned order, which reads as under: - "14. ...... The AO ignored all these above material evidences on record and merely relied upon the later statement of Sh. Devender Kumar recorded on 11.03.2016 at the assessment stage in which Sh. Devender Kumar has stated that he has signed the agreement in question at the instance of the assessee. However, he has admitted that he has purchased land from Smt. Saroj Sharma and others on the basis of the agreement to sell. In this statement also he has stated that police complaint was prepared at the instance of assessee. From this statement, it appears that the AO deliberately recorded this statement without any justification against the statement recorded by the investigation wing immediately after search on 18.10.2013. Sh. Devender Kumar tried to contradict the contents of MOU and the agreement to sell without any justification. The AO ....
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....ssee to connect him with addition of Rs. 20 crores. Even if the Directors of M/s Newage Infrabuilders P. Ltd. were not produced for examination before AO, the entire material on record clearly justify explanation of the assessee that assessee had not dealt with amount of Rs. 20 crores. The contents of the document speak against the RevenueDepartment. The presumption against the assessee that the document belong to him have been rebutted by the above material on record including the seized material found during the course of search which is corroborated by statement of Sh. Devender Kumar recorded on 18.10.2013 in ADIT(Inv.). Sh. Devender Kumar has taken action against Smt. Saroj Sharma etc., therefore, there was no justification to make addition of Rs. 20 crores against the assessee. Whatever reasons have been given by the authorities below for making addition against the assessee are irrelevant on the face of the evidences brought on record. Therefore, the decisions relied upon by the Ld. DR would not support case of the Revenue. In view of the above discussion, we are of the view that addition of Rs. 20 crores against the assessee is wholly unjustified. We, accordingly, set asid....
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....chase of the land at Harchandpur. The Assessee is not named in MOU, either as a party or as a witness. No cash was found or seized during the search conducted on the premises owned by the Assessee. 8. The ITAT also noted that since the evidence on record duly substantiated the stand taken by Devender in his first statement recorded before the investigation wing on 18th October, 2013, there was no occasion for the AO to record a fresh statement on 11th March, 2016. Devender, in his first statement recorded on 18th October, 2013 confirmed that he had executed the MOU with Newage Infra. He also confirmed the receipt of Rs. 20 crores in cash for the purchase of land in village Harchandpur from Saroj. Devender affirmed that he had paid Rs. 20 crores to Saroj vide two agreements to sell, one of them was recovered during the course of search and he agreed to supply the second agreement to the Investigation Wing. Devender confirmed that he agreed to undertake the said transaction for a commission of Rs. 50,000 per acre from Newage Infra. He stated that after Saroj resiled from the agreement to sell, he filed a civil suit against Saroj and there is a stay order granted in favour of Devende....