AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1485
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....r 45 to 56 of Annexure-A/SP/OFF/Hyd./04. From the said agreement, it is seen that, the vendor Mr. K. Venkata Ramanaidu has entered into Joint Development Agreement [in short "JDA"] with M/s. Shriram Properties Limited in Bangalore for construction of multi-storeyed residential building complex known as "Sameeksha". It is also seen from the said agreement that, both the parties are mutually agreed to share the built-up area and the land in the ratio of 32% to the Vendor and 68% to the Developer. It is also seen from the said documented that, Mr. K. Venkata Ramanaidu has sold 35 units from his share of apartments in project "Sriram Sameeksha" to M/s. Suresh Productions for a sale consideration of Rs. 6 crore by cash. During the course of search, a statement on oath was recorded from Sri D. Suresh Babu, partner of Suresh Productions. In his statement, he stated that, cash payment mentioned in the exchange agreement of sale which was entered into with Mr. K. Venkata Ramanaidu in March 2013, there is a typographical error and no cash payment was made at the time of exchange agreement of sale. Subsequently, sworn statement under section 131 of the Act has been recorded from Mr. K. Venkat....
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....lant-firm, the repayment of principle amount of Rs. 6 crore + minimum guarantee of Rs. 3 crore, in total amount of Rs. 9 crore along with the 12% share of net surplus income derived over and above Rs. 75 crores received by the borrower on the disposal of total extent of the above land within a period of 12 months from the date of borrowing. Subsequently, Mr. K. Venkata Ramanaidu was unable to repay the agreed amount. Therefore, a new agreement was entered into and as per which, 35 units in "Shriram Sameeksha" aggregating to 30,130 square feet of built-up area has been mortgaged in lieu of the earlier land. However, the assessee neither paid any cash while entering into agreement for purchase of property. 4. The Assessing Officer after considering the relevant submissions of the assessee and also taking note of incriminating material found during the course of search observed that, as per the documents, it is clearly referred to as cash payment of Rs. 6 crore for purchase of property from Mr. K. Venkata Ramanaidu. Further, the argument of the assessee that, the exchange agreement of sale was made for exchange of the original sale deed of property for the subsequent property is not ....
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.... because, the property in question was attached by the Income Tax Department and it was having higher market value. Further, Mr. K. Venkata Ramanaidu has approached the appellant-firm for releasing the documents, so as to settle the loan amount. Further, while entering into exchange sale agreement, by an inadvertent typographical error Rs. 6 crore consideration has been referred to in cash, even though, there is no cash has been paid for purchase of property. The learned CIT(A) after considering the relevant submissions of the assessee and also taken note of various evidences, deleted the addition made by the Assessing Officer towards consideration paid in cash for purchase of property on the basis of exchange sale of agreement dated 20.03.2016 on the ground that, in the agreement, though, it has been mentioned as cash payment, but, it is nothing, but, a typographical error. Once the evidences and circumstances were considered in a comprehensive manner, a sum of Rs. 6 crore is nothing, but, cheque amount given to the borrower in February and March 2013. In view of the same, the addition of Rs. 6 crore made under section 68 and 69 of the Act is here by deleted. The relevant observat....
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....e towards unexplained investment under section 68 and 69 of the Act without appreciating the fact that, as per Clause-2 of Exchange Agreement of Sale, the agreement was primarily entered for advancing loan of Rs. 6 crore in cash by the assessee to the borrower Mr. K. Venkata Ramanaidu which was returnable/ refundable within 3 months by the borrower. The learned CIT(A) erred in not appreciating the fact that, as per clause 2 of the exchange agreement of sale, the built-up area of 30,130 square feet comprising of 35 apartments/units was to be registered in favour of the assessee by executing sale deed only when the barrower fails to return the loan of Rs. 6 crore to the assessee. The learned CIT(A) ought to have appreciate the fact that, there is not even a whisper in the exchange agreement of sale either by virtue of loan given by the assessee earlier to Mr. K. Venkata Ramanaidu by cheque or loan agreement entered into on 06.02.2013 is showed that, the amount of Rs. 6 crore advance in cash was a distinct transaction having no connection with the loan given earlier by the assessee by cheque. The learned CIT(A) erred in holding that, the exchange agreement of sale was entered into in ....
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....the Partner of the Partnership Firm were recorded. As per the seized documents, an exchange agreement of sale dated 20.03.2016 between Mr. K. Venkata Ramanaidu and M/s. Suresh Productions was found and seized and as per the said deed, Mr. K. Venkata Ramanaidu has sold 35 units from his share of apartments in a project "Shriram Sameeksha" to the appellant for a consideration of Rs. 6 crore and the same has been paid in cash. The documents found during the course of search was confronted to Shri D. Suresh Babu, Partner of the appellant-firm and called-upon him to explain the contents. In response to a specific question, he has stated that, the Firm had given loan of Rs. 6 crore on 08.02.2013 and 19.03.2013 to Mr. K. Venkata Ramanaidu and entered into a simple mortgage deed dated 06.02.2013 as a security for the loan. Subsequently, sworn statement under section 131 of the Act has been recorded from Mr. K. Venkata Ramanaidu on 03.01.2020 wherein he has stated that, cash payment referred to in the exchange agreement of sale is a typographical error and no cash payment was made at the time of exchange of deed of sale. He further submitted that, income tax survey operation was conducted i....
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....pages 2 and 3. Further, as per the simple mortgage deed dated 06.02.2013, a charge on property to the extent of 72,000 square feet was made in lieu of Rs. 3 crore advance on 06.02.2013 and further, as per the terms of agreement, Mr. K. Venkata Ramanaidu agreed to pay a sum of Rs. 9 crore and profits of 12% over and above the sum of Rs. 75 crore realised by Mr. K. Venkata Ramanaidu. Further, the agreement provides for interest on default, in repaying the said sum, if not repaid in that year. It is seen that, the appellant-firm has accounted for interest of Rs. 5.8 crore in financial year 2014-2015 and interest of Rs. 2.15 crore in financial year 2015-2016 on this amount of Rs. 6 crore and offered to tax. The second document found during the course of search proceedings is, exchange agreement of sale between Mr. K. Venkata Ramanaidu and the appellant-firm and as per the said deed, the appellant-firm is agreed to purchase 30,130 square feet comprising of 23 units of 1 BHK apartments and 12 units of 2 BHK apartments for a consideration of Rs. 6 crore and the same has been paid by cash in the presence of the witnesses. The Assessing Officer took support from the said documents and claim....