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TaxTMI 
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2023 (4) TMI 1276
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....eals deal with unaccounted interest payment by M/s Vatika Ltd. to M/s UK Paints, M/s Span India Pvt. Ltd., M/s SEH Realtors Pvt. Ltd. and M/s Scorpio Research & Consultants Pvt. Ltd. in case of Jaipur Project and NH8 Project. In addition, the other issues pertains to cash receipts, addition u/s 69A on account of cash received on booking of plots by M/s Vatika Ltd. 2. A search & survey operation was conducted by Investigation Wing in the case of Sh. K.S. Dhingra, Sh. G.S. Dhingra & others on 16.09.2011. On the basis of the seized documents, the revenue alleged that the assessee, M/s Vatika Ltd. has entered into a loan agreement with group entities of Dhingra group, Shahi Exports group and Span India group which has been camouflaged as sale-purchase of property transaction. A search and seizure u/s 132 and survey action u/s 133A were carried out on the premises of Vatika Group on 16.01.2013. During the search and survey operation, various incriminating documents pertaining to Vatika Group were alleged to have been found and seized. 3. The case of the assessee company was re-opened u/s 147/148 of the Income Tax Act, 1961 for the assessment year 2006-07 after recording of the reasons....
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....orrowers. * A unilateral right has been given to the lender to opt for the purchase of residential plots. * The above right to land in lieu of principal and accrued interest amounts has to be exercised in writing by the lender. * In case the lender opts for land in lieu of principal and accrued interest amounts, the agreement will be deemed to be an agreement for sale and purchase of residential plots. In such a scenario the loan amount along with accrued interest thereon has to be adjusted towards the sale consideration. * In case the borrower fails to obtain necessary permissions from the state authorities or the lender does not opt for purchase of plots, the amendatory loan cum purchase agreement will automatically extend upto 30.06.2007. * As per clause 12 the borrower is under an obligation to buy-back the plots opted by the lender to purchase, at the sole option of the lender. The repurchase price has not been fixed and is to be paid by the borrower at the prevailing market rate. * As per clause 13, the lender need not pay transfer charge on first transfer of the plots opted to be purchase by the lender. 7. During the Income Tax proceedings, the AO relied ....
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....nt of plots, the real motive of the deal is the loan and interest on it, which has been paid and received in a manner camouflaged as sale- purchase of property transaction. 11. The revenue has also relied on the statement of Sh. Navin Choudhary wherein he has admitted that the Jaipur deal was actually a loan transaction which was shown as sale-purchase of property transaction due to the fact that the lender got allotment of plots and NH8 deal, even the plots have not been allotted as per the agreement and hence held that this is a coloured transaction to evade payment of tax at higher rate. The revenue based on a letter dated 12.04.2010 from Vatika Ltd. addressed to Sohan Singh Dhingra (HUF), wherein it has been informed that Sohan Singh Dhingra HUF is being allotted 3410 sq. yards in the residential colony 'Vatika India Next' Gurgaon Haryana held that since in this letter reference has also been made to the original Loan cum Purchase agreement executed on 13.09.2005 between the parties, agreements for sale between the lenders was nothing but the repayment of loan along with interest being done by Vatika Ltd. in the guise of 'buy-back'. The revenue held that this 'buy-back' has be....
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....2011 5,00,000 SOHAN SINGH LINCOLN 31.05.2011 1,00,00,000 UKPI LINCOLN 31.05.2011 1,10,00,000 Vatika Ltd. 02.06.2011 1,50,00,000 SOHAN SINGH LINCOLN 02.06.2011 1,50,00,000 Vatika Ltd. 06.06.2011 1,00,00,000 SPAN INDIA LINCOLN 06.06.2011 1,00,00,000 08.06.2011 1,00,00,000 SPAN INDIA LINCOLN 08.06.2011 1,00,00,000 Vatika Ltd. 10.06.2011 1,00,00,000 SPAN INDIA LINCOLN 10.06.2011 1,00,00,000 14.06.2011 1,00,00,000 SPAN INDIA LINCOLN 14.06.2011 1,00,00,000 15.06.2011 1,00,00,000 SPAN INDIA LINCOLN 15.06.2011 1,00,00,000 Total 62,72,96,000 69,93,36,000 15. From the above fund flow, revenue inferred that the funds deficit Vatika Ltd. provided requisite funds to M/s Lincoln Developers Pvt. Ltd. to 'purchase plots' form the Consortium. It was held that this establishes that this transaction is a colourable device adopted by the parties to camouflage the nature of the transaction as well as suppress the actual amounts paid/ received by citing market situation for reduced price. 16. To conclude, the revenue held that the interest expenditu....
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....t. Ltd. (Harman Singh Dhingra 25.04.2006 4,35,700/- TOTAL 1,86,77,000/- 21. Salient features of the agreement is as under: 'Buyer' 'Sale consideration' (Amount ) Sale price per sq. yards (Amount) Date of re-sale to Vatika group Re-sale price agreed per sq. yards( ) SEH Realtors Pvt. Ltd. 50,00,00,000/- (out of this 1.01 crores has beenpaid by the buyer) 3400/- Within two years period from the date of this agreement/MoU 5100/-per sq. yards U.K. Paints IndiaPvt. Ltd. 15,00,00,000/ - 3400/- Within two years period from the date of this agreement/ MoU 5100/-per sq. yards Adbantage Fashions Pvt. Ltd. 13,00,00,000/- 3400/- Within two years period from the date of this agreement/ MoU 5100/-per sq. yards * Sanskar Buildtech Pvt. Ltd. , Nakshatra Buildcon Pvt. Ltd. are the confirming parties * Land under the so-called 'sale' was not identified and measured. (Refer paras under the pareamble part "Whereas" and clause d & e of the agreement). * Residential Plots agreed to be sold and purchased have not been developed as on date and even the requisite permission to develop and sell the plots have not been taken by the seller or the confirming p....
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....y by Mr. B. Parmeshwaran) 7 ORRIS Infrastructure 4,00,00,000.00 29.05.2010 31.07.2010 yes Due for renewal 24. The revenue held that from the above document it can be seen that amount of Rs.43 Crores due from Vatika Ltd. as on 23.06.2010 has been categorized as ICD by the Dhingra group. It was further held that this Rs.43 Crores due from Vatika is in respect to Jaipur deal which clearly shows that this is accrued amount from Rs.13 Crores advanced by U.K. Paints India Pvt. Ltd. to Vatika Landbase Pvt. Ltd. The revenue held that this corroborates the finding that the amount advanced by Dhingra group to Vatika group were loan and that the plots agreed to be sold under the ostensible agreement for sale, were mere security for this loan. The revenue also relied on the statement of Sh. Navin Choudhary, CFO of the Dhingra Group that the amount advanced to M/s Vatika Ltd. is a loan. 25. Based on the seized material, the loan agreements, Jaipur plots buy-back deal, the revenue held that there has been suppression of amounts and camouflaging of the transactions. For the sake of ready reference, the relevant part of the Assessment Order is reproduced as under: "Another document has ....
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.... oath on 16.01.2013. relevant excerpt of his statement is reproduced below: - "Q. 2 Did you (or your group) enter into any deal with M/s Vatika Group regarding land at Vatika Infotech City Jaipur? If yes, please produce a copy of all such agreements/addendums to these agreements and also any communications exchanged between these groups regarding these transactions. Ans. Yes, we have entered in agreements for land at M/s Vatika Infotech City, Jaipur. We will provide the copies of the same in two days. Similar agreements were entered with M/s Span group and M/s Dhingra group with Vatika group. Q.3 Please describe the Jaipur deal entered into between Shahi Group & Vatika group. Ans. The agreement to purchase land was entered into May 2005, valuing Rs. 20 Crores. On April 2006 we paid Rs.85 lacs (approx.)(for PLC charges. On April 2010, we sold the same land to M/s Vatika on May 2010 for a total consideration of Rs.29,99,82,000/- (Rs. Twenty nine Crores, ninety nine lacs & Eighty two thousand). Q.7 Please explain (point-wise) what are the similarities between agreements entered into by M/s Shahi Exports group, Span India group and Dhingra group as mentioned by you in re....
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.... and S E H Realtors Pvt. Ltd. was for 50 crores but it was then modified for 20 crores. Then there is another document which corroborates the above evidence and also establish that his deal was actually loan taken by Vatika group from the Consortium at a particular rate of interest. This document has been extracted from Annexure A-56 (hard disc) seized during the course of search at Vatika Triangle, Sushant Lok-I, M G Road, Gurgaon on 16.01.2013. The navigation path for its extraction is Drive\Vatika Landbase\Audit 2007-08\Scanned ICDs Agreement 01.04.07 to 31.03.08xls. From the heading of the above excel sheet which reads "Summary of inter Corporate Deposits for Jaipur Project" it is amply clear that the table on the above document is regarding loan raised by Vatika Ltd. for the Jaipur Project. When the table on this document is perused it is clear that this document is regarding the loan taken by Vatika Ltd. totaling 50 crores from the lender parties for its Jaipur Project during the F.Y. 200506@25% pa interest. Here it is noteworthy that: All the details in columns "Name of the Lender" "Date of execution of documents", "Amount", "Details of collateral security provided ....
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....a group: Date of Receipt Amount (Rs.) Receiving Company Paying Company Immediate Source Date Ultimate Source AMOUNT PAYING COMPANY DATE AMOUNT (RS.) PAYING COMPANY 19.05.2010 11,27,86,417 SEH ESPO 19.05.2010 11,28,00,000 FAMOUS DWELLERS 19.05.2010 11,28,00,000 VATIKA LTD. 11.06.2010 8,31,53,221 ADVANTAGE VINCENT 11.06.2010 8,32,00,000 VATIKA LTD. 17.06.2010 6,42,81,361 SEH ESPO 17.06.2010 6,40,00,000 ASPIRE 17.06.2010 6,40,00,000 VATIKA LTD. 23.06.2010 7,34,77,554 UKPI ESPO 23.06.2010 7,35,00,000 ASPIRE 23.06.2010 7,35,00,000 VATIKA LTD. 24.06.2010 1,10,50,101 UTTAM ESPO 23.06.2010 1,10,00,000 ASPIRE 23.06.2010 1,10,00,000 VATIKA LTD. 10.07.2010 9,13,54,635 ADVANTAGE ESPO 08.07.2010 9,15,00,000 ASPIRE 8.07.2010 3,15,00,000 VATIKA LTD. 19.07.2010 12,16,85,729 SEH ESPO 17.07.2010 12,20,00,000 ASPIRE 08.07.2010 6,00,00,000 VATIKA LTD. 23.07.2010 1,21,39,974 UTTAM ESPO 23.07.2010 9,00,00,000 ASPIRE 16.07.2010 12.20,00,000 VATIKA LTD. 23.07.2010 8,07,24,655 UKPI ESPO 23.07.2010 9,00,00,000 VATIKA LTD. 08.09.2010 12....
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....nst purchase of property. This shows that no property has been acquired so the question of capital gains on the sale of property does not arise. From the above discussion, it is clear that the transaction was actually a financing/loan arrangement which was camouflaged as sale/purchase transaction to pay tax at lower rates. CONCLUSION: From the documentary and oral evidence discussed above it is clearly established and corroborated that: Shahi Exports group, Dhingra group, Span India group and Harman Singh Dhingra Group advanced the following loan amounts to M/s Vatika Landbase Pvt. Ltd. (Vatika Ltd.) in the F.Y.2005-06. S. No. Name of the company Amount (Rs.) 1 U. K. Paints India Pvt. Ltd. 13,00,00,000 2 S E H Realtors Pvt. Ltd. 20,00,00,000 3 Advantage Fashions Pvt.Ltd. 15,00,00,000 4 Uttam Enterprises Pvt. Ltd. 2,00,00,000 TOTAL 50,00,00,000 The above 'buyers paid following further amounts to Vatika Ltd. under the deal: S. No. Name of the company Date of payment Amount (Rs.) 1 U. K. Paints India Pvt. Ltd. 25.04.2006 58,86,100 2 S E H Realtors Pvt. Ltd. 25.04.2006 85,82,900 3 Advantage Fashions Pvt. Ltd. 25.04.2006 37....
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....ility of M/s Vatika Ltd. in Jaipur deal during the Financial 2005-06 comes to Rs. 19.38 crores. It is therefore clear that the assessee has not fully disclosed its interest expenditure in its books of accounts. An amount of Rs.22.80 crore (Rs.3.42 crore + Rs.19.38 crore) has been incurred by the M/s Vatika Ltd. as interest expenditure in these two deals during the financial year 2005-06 relevant to Assessment Year 2006-07from out of books and thus remains unaccounted." 26. Thus holding the AO treated an amount of Rs.22.80 Cr. as "Unaccounted Interest Expenditure". 27. Aggrieved the assessee filed appeal before the ld. CIT(A). 28. The adjudication of the ld. CIT(A) on the issue of NH8 deal and Jaipur deal is as under: NH8 Transactions 29. The ld. CIT(A) considered the material details of the search conducted u/s 132 and survey executed u/s 133A and the seized/impounded material pertaining to U.K. Paints/Dhingra group, Shahi Group, Span Group and Vatika group and others. The ld. CIT(A) referred to the seized material, loan agreements, the extension of loan agreements, agreements with the guarantors, loan-cum-purchase agreements and material pertaining to buy-back agreements....
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....d Cheques (PDCs) to each lender towards repayment of principal and also PDCs towards interest computed @100%, with an assurance to honor the same. (viii) To further secure the loan, the Borrower has handed over a Promissory Note also. Moreover, vide a separate "Guarantee agreement", certain other properties belonging to Mark Buildtech P. Ltd. (the "confirming party") were also set out as collateral security for ensuring performance by the Borrower. (ix) Any subsequent agreement/understanding on the variation/modification/amendment to the loan agreement shall be only by way of a written document, which shall form part of this Loan agreement. 4.3.2.12 Subsequently, on 31.03.2006, the Borrower and the Lender entered into another agreement in pursuance of the Loan agreement. The agreement was called a "Amendatory loan-cumpurchase agreement", which carried the following provisions: (i) The requisite development permissions having not been received on time by the Borrower, the parties agreed to extend the date of repayment of loan to 31.12.2006. (ii) The rate of interest for the period upto 31.12.2006 was revised to 24% p.a. compounded quarterly, w.r.e.f. the date of origi....
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....rs P. Ltd., for sale of the allotted plots at a registered sale consideration of Rs. 16,000/- per square yard. The plots were never registered in the name of the lenders at any point of time." 33. The ld. CIT(A) held that, "based on the recitals that the original agreements of May/June 2005 were undisputedly pure loan agreements. It was called a "Loan Agreement". The parties are called Lenders and Borrowers. Of course, the nomenclature is not determinative of the nature of an agreement. But the recital also show clearly that the amount was meant to be a loan agreement only, initially on interest of 100% p.a., which was later revised by mutual agreement to 24% p.a. (compounded quarterly). There is no indication therein of any purchase of the land. Thus the agreement was a loan transaction simpliciter." 34. The relevant portion of the order of the ld. CIT(A) is as under: "4.3.2.17 The Loan agreement was subjected to an amendment on 31.03.2006. The crucial issue that requires examination is whether, as a result of this amendment, the nature of the transaction changed to a purchase agreement. The main clauses of this agreement have been discussed above at para 4.3.2.10 above. I....
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....on the date of exercising of option will be adjusted towards the sale consideration as agreed. I am therefore of the firm view that the original loan amounts continued as a loan amount till the A.Y. 2010-11, and interest @ 24% p.a.(compounded quarterly) accrued in the hands of the lenders till (and including) the A.Y. 2010-11, as per terms of agreement, the loan amount plus accrued interest thereon was to be adjusted towards consideration payable. 4.3.2.18 I, therefore, agree with the conclusions of the A.O. that the transaction was a loan simpliciter till the date of allotment of plots, when admittedly the appellant gave constructive delivery of the plots (upon the lender exercising its right to purchase), and that this conclusion could be drawn only upon examination of the agreements unearthed during the Search and Seizure action. It is pertinent to note that the appellant, vide its letter to the A.O. dated 24.03.2015 (at para 5 therein), also admits that as a result of search conducted on the appellant on 16.01.2013, several agreements/deeds in respect of "sale and purchase" of land by UK Plants, Shahi group and Span group were found and seized from the appellant's premises. ....
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....find that the description of the agreement by the A.O. for the transaction with SEH Realtors P Ltd is completely different from the recitals of actual document entered into by the appellant with the other parties. This is a very crucial issue, as it is the content of the agreement entered into between two parties that would throw light on the actual nature of the transaction intended between them. It would appear that the A.O. has relied upon the contract between UK Paints P. Ltd and Vatika, instead of the contract between SEH Realtors P Ltd. and Vatika. Be that is it may, it is then the duty of the CIT(A) to make up for the deficiencies in the assessment Order; in this case, to analyze the agreements between SEH Realtors P Ltd. and Vatika, and to see whether the seized material/statements relied upon by the A.O. provide a view in line with the conclusions drawn by the A.O. 4.3.2.20 In the appellant's case, it is seen that it entered into an agreement with SHE Realtors P Ltd. on 12.08.2005. This date is different from the dates of agreements entered into by the other parties with Vatika. The key features of this agreement are as follows: (i) The first agreement between the pa....
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.... 4% of 193.6 sq. yds. of commercial plots, 20% of 968 s.yds of housing plots and 31% of 1500.40 sq. Yds. of residential plots exclusively to the appellant. It was agreed that the "seller" (the appellant) will grant, sell, transfer and convey these plots to the "purchaser" (SEH Realtors P Ltd.) not later that 11.08.2006. The Seller explicitly agreed that any reduction of the agreed area will constitute breach of contract. However, in the event of larger availability of developed land after completion of development, SEH Realtors P Ltd. undertook to pay additional sale consideration on a pro-rata basis. c. The Seller (appellant) undertook to purchase back the plots, at the option of the purchaser, within a period of two years from the date of the agreement, at the prevailing market rates. In case the Seller fails to discharge this obligation, the purchaser (SEH Realtors P. Ltd.) had the right to seek specific performance of the same. d. In the event of the Purchaser selling the plots to any third party, no transfer charges will be payable by SEH Realtors P Ltd. / the third party to the appellant. e. In consideration of the payment made by SEH Realtors P. Ltd., the seller and....
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....ement to Sell" with Lincoln Developers P. Ltd. to sell these plots total admeasuring 17045 sq. yds. to the latter, for a total consideration of Rs.27,27,20,000/-, i.e. @Rs. 16000 per sq. yd., free of all encumbrances, and including EDC/IDC/municipal and other charges. 4.3.2.25 It can be seen from the discussion above, that the key agreement between the parties is the first agreement dt. 12.8.2005, called a "loan-cum-purchase" agreement. All subsequent agreements are merely extension agreements on the same lines, with one difference, viz. the replacement of PDCs representing interest on the sum of Rs.10,00,00,000/- the manifest agreement is called an "loancum-purchase agreement", indicating it is both a loan and a purchase agreement . However, the nomenclature given by the parties is not determinative of the nature of the agreement, nor does it actually resolve the issue, so we must proceed further. In the text of the agreement there are two agreements viz., (a) A loan agreement and (b) A purchase agreement. The gist of these two separate agreements have been discussed above. The consideration amount in question viz. Rs. 10 crores is the subject matter of both the agreements. The....
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....oan transaction. The fact that certain agreements between Vatika and other parties have been found in a folder called "ICD exceptions" in the computer of Vatika/U.K. Paints cannot be held against the appellant. Even otherwise, placing an agreement in a folder which is named in a particular way, does not detract from the true nature of the transaction as evidenced from the language of the agreement. On the contrary, the A.O. has referred to an inter-office memo dated 20.04.2011 issued by Sh. Manmohan Mehra, V.P. (Corporate Affairs) of Vatika group where it is clearly mentioned that the Vatika group is planning to repurchase the plots sold to the Shahi group (i.e. SEH Realtors P Ltd.). It also mentions therein that the purchase price by Lincoln Developers is Rs. 16,000/- per square yard and would be sold to Vatika Ltd. at the price of Rs. 22,000/- per square yard. There is yet another seized document extracted from the hard disc at Annexure A-75 from Vatika premises which particularly relates to SEH Realtors P. Ltd. Even in this inter-office memo seized during search, after the subject matter of the memo is a different transaction at Sector-86, NH-8, it is abundantly clear that "Old ....
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.... were allocated. In other words, accrued interest as per the agreement would have been paid before the plots were allotted. This interest payment is not reflected on the books of the appellant. The only conclusion that can be drawn is that the appellant has paid the entire accrued interest till the date of allotment of plots to the lender, as agreed, but outside its books in cash. This constitutes unaccounted expenditure to be assessed u/s 69C of the Income Tax Act, 1961. In fact, there is no contemporaneous documentation found during search or adduced later by the appellant before the search team or the A.O. to show that the exhaustive terms of the earlier loan agreements and the repeated extensions and PDCs were explicitly overridden so as to free the appellant from its contractual obligations to pay interest to the lenders. The plots have been transferred in consequence of the agreement between the parties, and in the absence of any contemporaneous evidence to the contrary, it must be presumed that the plots were transferred as per the terms of agreement. However, this interest cannot be assessed in the appellant hands over the entire period AY 2006-07 to AY 2011-12, since the a....
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....llant has not actually paid the interest due, it has to be held that plots have been allotted in lieu of the original loan amount plus accrued interest thereon; in other words, the appellant has under-reported the sale consideration (by an amount equivalent to the accrued interest discussed at para 4.3.2.27 above) that accrued to it as a result of these agreements. This a real income, to be taxed under the specific provisions of Section 5 of the Income tax Act, 1961. 4.3.2.29 As discussed in para 4.3.2.25 above, the conclusion that is drawn is that the accrued interest has been paid in A.Y.2011-12. Accordingly, the addition would have to be deleted for A.Y.2006-07 (and the assessed income would be correspondingly enhanced for A.Y. 2011-12. This enhancement matter is dealt with separately in my appellate order for A.Y. 2011-12). The A.O. is directed accordingly." 35. The ld. CIT(A) held that, * The recitals of the original loan agreement were important in determining the nature of the transactions and since the agreement mentions the parties as lenders and borrowers, the interest needs to be paid. * There was no indication of real purchase of land except on agreement. * T....
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....s allotted, as per existing agreement between the parties proves that the transactions were for purchase of plots but not a financial transactions in the nature of loan. * The agreements for sale have been entered by these parties with Vatika the "seller", on various dates in the month of May and June, 2005. Sanskar Buildtech P. Ltd. and Nakshatra Buildcon P. Ltd., who are the owners of the property, were the "confirming parties" to these agreements. * The parties made full and complete payments of the cost of the plots including preferential location charges. * The assessee has the exclusive rights of development of these properties. * Corporate guarantee agreements have also been entered into between parties. The Seller offered collateral security of immovable property which is distinct from the property which was the subject matter of the agreement. * Construing the intention of the parties from the contents of a contractual document between the, the entirety of the contract must be construed and an effort must be made to harmonize the individual parts into the whole. * A harmonious reading of the agreements reveal that the intention was to purchase the plots b....
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....oad, Gurgaon iii. Personal Guarantee agreement:- Lender and Shri Anil Bhalla (promoter of Borrower group) entered simultaneously in a personal guarantee agreement to secure the right of the lender and obligation of the borrower. One of such agreement is detailed as under:-3 Lender Date of the agreement Page No. Annexure No. Seized from U.K. Paints India Pvt. Ltd. 13.09.2005 137 to 133 A43 Vatika Triangle Sushant Lok-1, M.G. Road iv. The lender and Borrower then entered subsequently into an amendatory loan cum purchase agreement dated 31.03.2006 where the borrower was given option to purchase of residential plot. Various such agreements are detailed as under:- Lender Borrower Date of the agreement Page No. Annexure No. Seized from Sohan Singh Dhingra (HUF) Vatika Landbase Pvt. Ltd. 31.03.2006 125 to 116 A41 Vatika Triangle Sushant Lok-1, M.G. Road, Gurgaon U.K. Paints India Pvt. Ltd. Vatika Landbase Pvt. Ltd. Buzz Estates Pvt. Ltd. 31.03.2006 (1) 107 to 99 (2) 158 to 149 (3) 48 to 10 (1) (2) (3) A41 A43 A4 (1 & 2) Vatika Triangle Sushant Lok-1, M.G. Road, Gurgaon (3) 19 DDA commercial complex, zamrudpur, Kailash Colony, New Delhi ....
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....der Kumari which is seized documents during Search conducted at 16.01.2013 page 127, 83, 37 and 19 of annexure A-41 (seized from Vatika Triangle, Sushant Lok, MG Road, Gurgaon) which extended the terms of repayment upto 30.03.2007. viii. Lender and Borrowers concerns entered into another extension agreement which were seized from during the course of Search detailed as under:- Lender Borrower Date of the extension agreement Page No. Annexure No. Seized from SEH Realtors Pvt. Ltd. Vatika Ltd. and Wonder Developers Pvt. Ltd. as confirming party 29.06.2007 160 to 157 A41 Vatika Triangle, Sushant Lok-1, M.G.Road, Gurgaon Sohan Singh (HUF) Vatika Ltd. and Wonder Developers Pvt. Ltd. as confirming party 30.06.2007 115 to 112 A41 Vatika Triangle, Sushant Lok-1, M.G.Road, Gurgaon U.K. Paints India Pvt. Ltd. Vatika Ltd. Buzz Estates Pvt. Ltd. as confirming party 30.06.2007 80 to 77 A41 Vatika Triangle, Sushant Lok-1, M.G.Road, Gurgaon Span India Pvt. Ltd. Vatika Ltd. Buzz Estates Pvt. Ltd. as confirming party 29.06.2007 17 to 14 A41 Vatika Triangle, Sushant Lok-1, M.G.Road, Gurgaon The following were some of the features of this extension agreement/MOU: Lend....
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.... fund of Validate tabulated as under:- Date of receipt Amount Receiving Company Paying Company Lincoln Ultimate Source Date Amount Paying Company 04.02.2011 9,09,12,000 SEH Lincoln 03.02.2011 9,09,12,000 Vatika Ltd. 07.02.2011 9,09,12,000 SEH Lincoln 07.02.2011 9,09,12,000 Vatika Ltd. 09.02.2011 9,09,12,000 SEH Lincoln 09.02.2011 9,09,12,000 Vatika Ltd. 14.02.2011 7,50,00,000 UKPI Lincoln 14.02.2011 7,50,00,000 Vatika Ltd. 21.02.2011 7,25,00,000 UKPI Lincoln 21.02.2011 7,25,00,000 Vatika Ltd. 24.02.2011 7,50,00,000 Span India Lincoln 24.02.2011 10,50,00,000 Vatika Ltd. 24.02.2011 3,00,00,000 UKPI Lincoln 08.03.2011 2,40,60,000 Sohan Singh Lincoln 08.03.2011 9,66,00,000 Vatika Ltd. 28.04.2011 25,00,000 Sohan Singh Lincoln 01.04.2011 15,00,000 Vatika Ltd. 28.04.2011 5,00,000 Sohan Singh Lincoln 31.05.2011 1,00,00,000 UKPI Lincoln 31.05.2011 1,10,00,000 Vatika Ltd. 02.06.2011 1,50,00,000 Sohan Singh Lincoln 02.06.2011 1,50,00,000 Vatika Ltd. 06.06.2011 1,00,00,000 Span India Lincoln 06.06.2011 1,00....
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....ers of the group, while making the addition. 2. The Department has assessed the transaction as transfer of land transaction and addition added interest too. 3. Such expenditure which is impugned addition has never been recorded. 4. The Assessing Officer has given the finding that assessee has incurred liability of interest expenditure proceeded to invoke Section 69C to make addition. 5. Ld. CIT(A) has erred in confirming the entire addition for NH-8 deal for A.Y. 2011-12 without any evidence. 6. For unabated assessment, no addition can be made u/s 153A in absence of incriminating materials found as a result of search. 7. In enhancement notice CIT(A) has not quantified the enhancement notice. My submission on the issue of addition of interest in NH-8 are as under: 1. All lenders have entered into agreement with advancing of money to the assessee initially as loan agreement except SEH Realtors Pvt. Ltd. where initial agreement is Loan cum Purchase agreement. In all other cases the initial lenders have entered into loan agreement and subsequently loan agreement was changed to loan cum purchase agreement. However, in all cases material facts has remained same....
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....principal. Ld. ARs argument that the Assessing Officer has accepted the assessee's contention in assessment year 2011-12 that the transaction is a purchase and sale transaction, therefore, there is contradiction in treating the transaction as loan transaction and payment of interest for same transaction. The revenue's stand is the payment of unaccounted interest which is not reflected and recorded in Books of Accounts. Therefore, unaccounted interest payments has no bearing in recorded transactions. If the transaction is held to be loan transaction and unaccounted interest payable is upheld, to the extent of change in work in progress due to buy back of property, set off can be given from the interest. Ld. ARs argument that the section 69C has been wrongly involved by the Ld. AO is not tenable as from the conduct of assessee by accepting buy back value less than principal and interest at buy back proves the assessee has paid unaccounted interest and therefore such expenditure has incurred and section 69C can be invoked. Ld. ARs argument that Ld. CIT(A) has enhanced the interest for A.Y. 201112 without any basis is also not tenable as CIT(A) has held that all interest was p....
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.... agreements were basically in the nature of purchase agreements where as in other lenders can in NH 8 deals initial agreements was a loan agreements. Accordingly Ld. CIT(A) deleted the addition of unaccounted interest made by the AO. My Submission against deletion of unaccounted interest in case of SEH Realtors Pvt. Ltd. (Revenue's Appeal): In substance, the agreements between the assessee and U.K Paints & other are similar to agreements entered between the assessee & SEH Realtors Pvt. Ltd. Only change of date of agreements and initial agreement in the case U.K Paints Ltd. & other being loan agreements and loan cum purchase agreement in the case of SEH Realtors Pvt. Ltd will not change the basic character of the transaction. Basic Characters of the transaction are as under which are common in both transaction either with U.K paints & other with SEH Realtors Pvt. Ltd. 1. In both the cases the amount of principle with interest is guaranteed by a guarantee agreement where immovable property of a group concern is offered as guarantee which can be utilised for securing interest plus Principals in case of default by leaders. 2. In both cases the personal guarantee has been of....
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....the hand written dairy in the handwriting of Sh. Naveen Choudhary was seized from this cabin marked as annexure AA-1 & AA-2 respectively. Contents of various pages of AA-1 & AA-2 has been analyzed by AO and where ever 'M / Material' is written, on such pages has been held as Cash interest paid by M/S Vatika Ltd. AO's finding in supported by interest calculation of interest which comes @ 36% per annum, 15% interest has been disclosed in the books of accounts and balance interest has been paid in cash by M/s Vatika ltd. Content of the seized documents of Page No. 12 of AA1, Page 52 of annexre-AA1, Page 53 of AA1, Page 12 of AnnexureAA1, Page 52 of Annex AA-1 which contains the interest calculation of loan advanced by lender group and interest Calculation is codified with 'M / Material' has been scanned & reproduced in the assessment. Sh. Naveen Choudhary, CFO of U.K. Paints Ltd has accepted that the dairy is in his hand writing but gave evasive reply by saying that "I don't recall". He subsequently stated that 'M' stands for material supplied by U.K. Paint to Vatika Ltd. & finally answer to question no 60 & 61 of statement to recorded during Simultaneously Search ....
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....portunity to cross examine the person has been given by the AO. Before utilizing the such statement. 4. During the present search, no incriminating documents were seized, therefore, no addition Can be made for non abated assessment u/s 153A relying on the decisions of Hon'ble Delhi in the case of Kabul Chawla. My arguments in support of additions made for unaccounted interest on ICDs Confirmed by (CIT (A) & against the arguments of Ld. AR: 1. Ld. AR has raised the issue of invoking provisions of Section 153C for utilizing the seized documents AA-I, & AA-2 seized from the premise of Zamrupur, from third party on U. K. Paint group on 24.11.2011 for invoking addition & argued, that without invoking provisions of See 153C, such evidences cannot be used. The primary issue is whether during the present Search where M/s Vatika ltd & U.K. Paints, group were simultaneously searched on 16.01.2013 evidence for making the addition of unaccounted interest on ICD was found or not. During the present search .evidence in form of emails & texts were found from the computer of Sh. Naveen Choudhary, CFO of U. K. Paint group inform of emails to Sh. C. S. Agarwal for opinion, opinion given ....
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....isclosed income separately, Such interpretation will jeopardies the operation of present search and assessment scheme u/s 153 A & 153C. (iii) I rely on the decision of Hon'ble Supreme Court in the case of Sh. Vinod Gupta 2018-TIOL-350 (SC) Where Hon'ble Supreme Court has upheld the use of evidence gathered from one person in the hands of other person in simultaneous search. In view of the above the contention of Ld. AR is not tenable that satisfaction should have been recorded u/s 153C & proceedings should have been taken u/s 153C before utilizing the seized documents of one persons in the hands of other person when both person were simultaneously searched being part of same group by virtue of common satisfactions and proceedings are pending u/s 153A for same block period. ii. Second arguments of Ld. AR is that these documents are dumb documents. These documents have been analyzed by the assessing officer Ld. CIT(A) in details in the assessment order. The contents of various pages in annexure AA-1 & AA-2 clearly indicate that against the word used 'material', there in calculation of interest as principal is multiplied by period and interest rate which comes interest rate of....
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.... ICD on the ground that there is no evidences in case of another lender. Evidence is only for U.K. Paints and Wang Investment (Para 4.6.10 of CIT(A)'s order). Hon'ble CIT(A) has over looked the findings of AO on page 49 for A.Y. 2007-08 which contains the scanned copy of page 81 & 82 of annexure A13 seized during the search on page 49 & 50 of AO (for AY 2007-08). Scanned copies of page 49 & 50 shows that Sh. Naveen choudhary was in possession of interest cheques for M/Sarla fabrics Pvt. Ltd. (Shahi group), Span Holdings P. Ltd. (Span group) & Wang Investment & Finance P. Ltd. Similar findings in given for all AYs. Therefore, in seized documents for all three group of lenders namely U.K. Paints group, Spangroup and Shahi group, interest cheques are mentioned. Sh. Naveen Choudhary used to coordinate all lenders for interest on ICDS. Therefore, similar cash interest payment must have been made to all members of U.K. Paints group, Shahi group & Span Group. Accordingly it is prayed that unaccounted interest paid to all lenders as per assessment order, should be upheld. V. Revenue Appeal for A.Y. 2010-11: Deletion of addition on account of (GND No. 9 & 10) Cash receipt Rs.....
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....ed into 3 agreements of sale to 3 group companies of Shahi, Dhingra & Span group as tabulated in earlier paragraph of AO's findings. The period of such agreements of sale is Jan. 2010. In case of Scorpio research & consultants Pvt. Ltd. The date of agreements to sale is 20.01.2010. 2. All three mails are in the month of Jan 2010 i.e. date 02.01.2010. 13.01.2010 & 15.01.2010. 3. These emails are between promoters of M/s Vatika Ltd. & senior persons of Purchaser group or copy worked to them such as Sh. Anil Bhalla of M/s Vatika Ltd. Sh. Parmeshwara Arora, Sh. Naveen Chourdhary CFO of U.K. Paints group, Dhingra group. 4. Email dated 13.01.2010 has attached with documents named Vatika 100 crores NH 8 agreement word 1997 documents. Therefore, the name of documents clearly suggests that the deal is regarding NH-8 land in respect of sector 85 & 86 of Gurgaon which matches with the agreements to sale. Further this attachment contains the Shahi funding, U.K. Paints funding & Span group funding reproduced in the assessment order (page 68 & 69). Still further the area sold for each group is 37556 sq. Yard & actual agreement to sale is for 40000 sq. Yard which almost matches. 5. In....
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....s. 8.00 crore(to be given) c) . SPAN funding 'B' - Rs. 12.00 crore B+ - Rs. 3.00 crore(to be given) (Pg No 72 & 73 of AO) Total comes to Rs. 45 Crore. These fund already given or to be given is reduced from total costing to arrive at the figure for agreement to sale. In view of the above , total black/unaccounted fund already given or to be given as per record email dated 20.01.2022 should be considered as final black money correspondent which is Rs. 45 crore in the deal which is just a day earlier to date of agreement to sale. Since the wordings of seized material are quite clear & specific, the addition made by AO may be restored." Sd/- (H.K. Choudhary) Commissioner of Income Tax (DR), G-Bench, ITAT, New Delhi 40. The ld. DR argued extensively on various dates detailing the entire events of all the groups involved along with the M/s Vatika Ltd. He has taken us through the seized material pertaining to U.K. Paints India Pvt. Ltd. and the agreements thereof, the agreements with Sohan Singh Dhingra, Heminder Kumari, Span India Pvt. Ltd. and also SEH Realtors Pvt. Ltd. He has argued based on the fund flow showing that the fund used in repurchase ....
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....o offered by the assessee while framing assessment, thus, accepting that the transactions have been accepted as that of sale. The ld. AR argued that notwithstanding the fact whether these transactions were loan transactions or advance received against sale of plots, the interest cannot be charged in the A.Y. 2011-12 as no evidence was found either as a result of search or even otherwise to indicate that the assessee actually made the payments. It was argued that even the ld. DR during the arguments did not bring out any evidence to prove that any interest has been paid to the lender parties. 43. Heard the arguments of both the parties and perused the material available on record. 44. We find that the learned CIT(A) while summing up in para 4.3.3.18 has held that the conclusion drawn by the AO in respect of the appellant's transactions for the Jaipur deal are erroneous and thus interest income added by the AO for AY 2006-07 to A.Y. 2011-12 in respect of the Jaipur deal was deleted. With regard to Jaipur Deal, the ld. CIT(A) held that the parties executed documents of agreement to sale in respect of certain properties owned by Vatika at Jaipur. As per these agreements, a specific r....
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....he proportionate interest in respect of sum of Rs. 15 crores received from 4 customers/lenders has been sustained on the ground that transaction with such 4 customers/lenders was loan simplicitor till the date of allotment of plot. While concurring with the decision of the ld. CIT(A) pertaining to M/s SEH Realtors Pvt. Ltd. on the issue of deletion made on account of alleged interest paid, we are unable to agree with the decision of the ld. CIT(A) holding that transaction with such 4 customers/lenders was loan simplicitor for the following reasons. In respect of NH-8 deal qua aforesaid four customers, the ld. CIT(A) has held that initial agreements were loan agreements, as in such agreements there was no indication of any purchase of land. By entering into the amendatory loan cum purchase agreement, the original agreement is amended to extend the periodicity of loan with an additional amendatory clause giving an option to the lender to opt for purchase of plots. It was held that this clause only provide an option to purchase at future date, and same by itself does not convert the loan agreement to purchase agreement. It was held that subsequent extension agreements only change the ....
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....ecurity pending allotment so that the amounts are secured. 47. It is an undisputed fact that ultimately the plots were allotted to these parties as per Amendatory Loan cum Purchase Agreement/extension agreements. The situation could have been different, had they not exercised the option to purchase the plots or the plots were not allotted to such lenders. Once the plots were ultimately allotted to such parties, the nature of the agreements changed from loan agreement to agreement to sell/purchase of the plots. It is also a fact on record that no evidence of payment of any such interest has been found, which itself proves that no such liability by way of interest has accrued to the assessee. Infact, neither in the assessment proceedings nor in the first appellate proceedings, any material has been brought on record to support the assumption that the assessee has incurred a liability by way of interest. There is no evidence, even, to suggest that the lenders have actually received any interest. Under these circumstances, the contention of the revenue that the assessee has paid the entire accrued interest till the date of allotment of the plots to the lenders, as agreed, but outside ....
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....e entered into between these groups and Vatika group. Following are the amounts stipulated [in the 'agreements to sell'] to be 'advanced' by each of these groups: 'Buyers/Group Total 'sales' Rate per Total area Consideration (Amount Rs.) sq. yards (Amount Rs.) (Sq. yards) under 'sale' Scorpio Research & Consultants Pvt. Ltd. /Dhingra group 35,00,00,000/- 8140/- 43000 H.A Realtors Pvt. Ltd. (Shahi Exports group) 35,00,00,000/- 8140/- 43000 Positive Buildwell Pvt. Ltd. (Span India group) 35,00,00,000/- 8140/- 43000 52. E-mail dated 02.01.2010 retrieved from the computers reads as under: "From: [email protected] Date: Sat, 2 Jan 2010 18:36 05 +0530 To: [email protected] Subject: Shahi New Deal Dear Mr. Bhalla, Major highlights of the new agreement with Shahi Group 1. Total deal size 150 crs (including 30 of present loan). 2. Total area to be purchased - 100 acres. 3. Total yards to be given - 1,30,000 yds computed at 1300/- yds per acre. 4. Total Ch component is Rs.100 Crs (Rs.33.34 Cr. per party). 5. Total yds per entity - 43,333 yds. 6. Total Net rate per yard - 100 ....
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....bsp;divided by Rs. 11538.50. i.e. 37555.430 sq. yd. of plots That is, 37556 sq. yd. of Plots (making round Figure) SHAHI FUNDING Total Plots to be taken 37555 sq.yds @ Rs.11538.50 per sq.yd i.e. Rs.43,33,39,906.00 Funds Already given "A" .. Rs.1.50 Cr "B" .. Rs.8.50 Cr Cost of plot per sq. yd re-worked to give adjustment of "B" i.e. Rs.43,33,39,905.00 minus Rs.8,50,00,000/-divided by 37556 which is Rs.9275.213 (roundabout figure of Rs.9275 per sq. yd) After above adjustments, Total Plots to be taken by Shahi 37556 sq.yd @ Rs.9275/- per sq. yd i.e. Rs.34,83,31,900/- Money already given Rs. 1,50,00,000/- Balance to be given by 15.1.10 Rs.Rs.33,33,31,900/- Re-purchase agreed after 2 years 37555 sq. yd @ Rs.25000/- per sq. yd i.e. Rs.93,89,00,000/- UK PAINTS FUNDING Total Plots to be taken 37556 sq.yds'@ Rs.11538.50 per sq.yd i.e. Rs.43,33,39,906.00 Funds Already given "A" .. Rs.3.00Cr "....
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....he rate per sq. yards to exclude 'B' amount already received. In the result rate per sq. Yards goes down. However the total area to be 'sold' does not gets changed. The following becomes the rate per sq. yards: Sl. No. Group Rate per sq. yards (Rs.) 1 Shahi Exports 9275 2 Dhingra (UK Paints) 9675 3 Span India 8343 * All these facts clearly show that the "B" part of "money already given" is actually cash amount which is not accounted for. This is supported from the fact that the cost per sq. Yards is re-worked and it goes down with the introduction of "B" portion into calculations. * Further the above funding proposal clearly show that some part of the money totaling Rs. 33 crores have already been given by three groups to the Vatika group. This money includes amounts of Rs. 27.5 crores of "B" portion. However it is evidently seen above that the declared amounts of 'considerations' to be reflected in the above agreements will be adjusted to show only "A" part and other amounts which are still to be given and not the "B" part. * The concealment of "B" part of the 'consideration' clearly corroborate the above mentioned email of S....
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....se of Span India group would be in the name of Positive Buildwell Pvt. Ltd. 57. The Assessing Officer relied on the emails and held that it established that the above deal finally entailed cash component of larger amounts. The details are as under: Email dated 20.01.2010 from Sh. Bala Parmeswaran to Sh. Anupam Nagalia with copies marked to Sh. Naveen Choudhary and Smt. Vandana Wadhwa. The subject of the email is "Vatika New Funding". It may be mentioned that this email has been was found deleted and thus has been recovered from a hard disc Annexure A35 seized in the case of search of Dhingra group on 16.09.2011 at 19 DDA Commercial Complex, Zamrudpur, New Delhi on 16.09.2011. The navigation path for its extraction is Drive:\Vasanta mail\outiook express\2010 mail.dbx. A word document is attached to this email. Scanned image of this word document is inserted below: FUNDING PROPOSED BY SHAHI, SPAN AND UK Total Funding Rs.150 Cr Cost agreed Rs.1.50 Cr per acre Plots agreed per acre 1300 sq.yds per acre Cost agreed per sq.yd Rs 1.50 Cr divided by 1300 i.e. Rs.11538"50 per sq.yd Total No of Plot area to be Allotted 150,00,00,000 divided by Rs. 11538.50 i.e. 130000 sq.y....
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....has increased to 'funding' of Rs. 150 crores by three groups to Vatika group, from the earlier Rs. 130 crores. * Based on above total funding, rate per sq. yards is agreed to be Rs.11538.50. * Now 'money already given' is brought into calculations and adjustment is made in the rate per sq. yards to exclude 'B' amount already received as well as "B+" amount (which is yet to be given). In the result rate per sq. Yards goes down. The following becomes the rate per sq. yards: Sl.No. Group Rate per sq. yards (Rs.) Total area to be 'sold' (sq.yards) 1 Shahi Exports 8129 44000 2 Dhingra Paints) (UK 8050 43000 3 Span India 8050 43000 * All these facts clearly show that the "B" part of "money already given" and "B+" amount (which is yet to be given) are actually cash amounts which are not accounted for. This is supported from the fact that the cost per sq. Yards is re-worked and it goes down with the increase in "B" portion which is reflected by introduction of "B+" portion. * It is further noticeable that even though the rate per sq. yards to be shown as the 'sale price' goes down with the 'B* and 'B+' component go....
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....ties have even acted on the 'funding proposed' and it can be clearly seen that the actual rate of Rs. 11538.50 per sq. Yards for plots have not been stated as 'sale price' in the agreement. Rather the understated rate of Rs. 8140 has been mentioned in these agreements because cash payments/receipts as discussed above are involved in the deal. It is therefore evidently established from the documentary evidence seized during the search that the following amounts in cash have been received by Vatika Group. SI. No. Name of the company/Group Cash amount which is not reflected in the books of accounts "B" portion (Rs.) Cash amount which is not reflected in the books of accounts "B+" portion (Rs.) Total "B" and "B+" portion (Rs.) 1 Scorpio Research & Consultants Pvt. Ltd. 7,00,00,000/- 8,00,00,000/- 15,00,00,000/- 2 HA Realtors Pvt. Ltd. Shahi Exports Group 8,50,00,000/- 6,50,00,000/- 15,00,00,000/- 3 Positive Buildwell Pvt. Ltd. Span India Group 12,00,00,000/- 3,00,00,000/- 15,00,00,000/- Total 27,50,00,000/- 17,50,00,000/ 45,00,00,000 59. Aggrieved with the addition of Rs.45 Cr., the assessee filed appeal before the....
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....ts from the email- dated 20.01.2010 from the total amounts mentioned in the respective emails, the consideration so computed does not quite match the actual consideration mentioned in the Agreements to Sale. There is no evidence about the exact nature of these 'B' and B+" categories that establish that these sums are unaccounted consideration paid in respect of the Agreements to Sale. The ld. CIT(A) also held that no statement has also been recorded u/s 132(4A) or 132(1A) of the Income Tax Act, 1961 on these seized emails. 63. The ld. CIT(A) also held that in the absence of any seized material conclusively showing that the 'B' and 'B+' amounts were actually paid or that any such sums were adjusted against the sale consideration, it has also to be examined if the proposals contained in the emails are actually in respect of the Agreement to Sale entered into with Scorpio Research & Consultants Pvt. Ltd. on 20.01.2010. It would be noticed from the table at para 4.1.7 above that the consideration amounts mentioned in the Agreement to Sale does-;not quite match with the consideration figures in the emails (after excluding the 'B' and 'B+' sums). Moreover, it would be seen that the main....
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....lied on the order of the Assessing Officer and the ld. AR supported the order of the ld. CIT(A). The ld. AR argued that the assessment order is merely an extract/reproduction of the Appraisal report and therefore does not bear any application of mind by the A.O. It was argued that no notice, much less any notice of enquiry or a show cause notice was issued to the appellant requiring it to show cause why the addition of a sum of Rs. 45,00,00,000/-, as has been made in the assessment order, being made. Therefore the addition suffers from a basic legal infirmity, inasmuch as that the appellant had not been provided any opportunity. The appellant relied on certain case laws in support of its contention that an order made in violation of principle of natural justice is a nullity in the eyes of law. It was argued that there was no basis of the conclusion that the agreed consideration was Rs. 105 crores, but actual deal size was of Rs. 150 crores. Neither the assessee nor the parties to the agreements have confirmed that finally agreed sale price was actually in excess of the amount of Rs. 8,140 per sq. yard as recorded in the agreement for sale. 68. We have considered rival submissions ....
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.... the recorded sale consideration, however, such suspicion, howsoever strong, cannot take place of evidence. It is a fact on record that the Assessing Officer has not brought any evidence to establish that cash payments were actually made to the assessee. 70. In view of the aforesaid, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on this ground. ITA No. 3712/Del/ 2017 : A.Y. 2013-14 Addition u/s 69A: 71. During the course of search on 16.01.2013, cash of Rs. 3,42,93,000/- has been found from the office premises of appellant. The A.O. held that a sum of Rs. 32,93,000/- is explained and the remaining sum of Rs. 3,10,00,000/- has been treated as unexplained and addition has been made u/s 69A of the Income Tax Act, 1961. 72. The assessee submitted that this sum of Rs. 3.10 crores has been received by the appellant as in advance on 15.01.2015 against booking of property by 9 persons. The appellant submitted that these advances were received one day prior to the date of the search and therefore not entered into books of accounts of the assessee company on the day of the search. It was submitted that in the absence of booking forms provided....
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....estment is explained as compensation money received on acquisition of his agricultural land.Further, when be was asked to explain the date of withdrawals he was not able to recall the same. Analysis of the bank statement of the party shows that the credit balance in the account of the party on 27.12.2012 was Rs. 1,50,052/-. The party has not furnished his bank statement for January 2013 onwards. Hence, the creditworthiness of the party could not be established. Further, it is important to note that the party was not having his copy of application form or allotment letter/receipt of the payment made it was submitted by him that it will be furnished later. But no such submission was made. Another interesting fact is that which emerges is that the party having the annual source of income of Rs. 50,000/- has booked the plot with M/s. Vatika Ltd for a sum of Rs 1.25 crores. Also, two years have been passed since the date of application of the plot but no further installments have been paid by the party. Hence, the genuineness of the so-called transactions claimed by M/s. Vatika Ltd is in itself questionable. Sh. Deepak Kumar Similarly, if we examine the statement of the third party....
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....ing the cash found and seized from his premises but no reasonable explanation could be furnished by the assessee, the AO treated the amount of Rs.3.10 Cr. u/s 69A of the Income Tax Act, 1961. 75. The addition made by the AO has been confirmed by the ld. CIT(A) on the grounds that reasons given by the A.O. while rejecting the same has been elaborately brought out in the assessment Order and the AO has found that the explanation for the sum of Rs.3.10 crores as unsatisfactory. The ld. CIT(A) held that the onus is on the appellant not only provide a prima facie satisfactory explanation but also to lead evidence in support of its claim. 76. Heard the arguments of both the parties and perused the material available on record. 77. Having considered rival submissions, we find that the assessee had explained the source of cash seized amounting to Rs.3,10,00,000/- by stating that he has received the amount towards advance booking from 9 persons, who intended to purchase land from the assessee. In support of such contention, the assessee had furnished the names and addresses of the concerned persons and the amount received from them. It is a fact on record that in course of assessment pro....
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.... power. 78. On the other hand, he has put the entire burden on the assessee to prove the source of cash seized. When the assessee has furnished explanation regarding the source of cash seized, the Assessing Officer was duty-bound to make proper inquiry to take the issue to its logical end. Since, the departmental authorities have failed to undertake necessary inquiry to ascertain the veracity of assessee's claim regarding source of cash seized, the assessee cannot be faulted for not providing the required details and proving the source, identity of the persons from whom the amount has been received on account of advance bookings of the plots. The onus having been discharged by the assessee, it was for the revenue to disprove the contentions of the assessee. The assessee cannot be faulted for not issuing the summons u/s 131 by the Assessing Officer and to make further enquiries as deemed fit. Hence, the appeal of the assessee on this ground is liable to be allowed. 79. In the result, this ground of appeal is allowed. 80. To conclude, * With regard to payment of unaccounted interest by Vatika Ltd., in the absence of any details, proof, it is hereby held that the addition made on....