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TMI Blog2013 (5) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... rties, genuineness of the transaction and capacity of the creditors as held by jurisdictional High Court in the case of R.B. Mittal (2000 (8) TMI 54 - ANDHRA PRADESH High Court). Accordingly, the issue is remitted back to the file of the Assessing Officer for fresh consideration - assessee appeals are partly allowed for statistical purposes. - ITA No. 1635/Hyd/2012, ITA No. 1636/Hyd/2012, ITA No. 1637/Hyd/2012 - - - Dated:- 3-5-2013 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. For the Appellant : Sri J. J. Varun For the Respondent : Sri D. Sudhakar Rao ORDER Per Chandra Poojari, AM:- These three appeals by the assessee are directed against the common order of the CIT(A)-I, Hyderabad dated 24.8.2012 for assessment years 2002-03 to 2008-09. 2. The Bench enquired with the learned counsel for the assessee that whether the assessee has filed any appeals other than for these three assessment years viz., 2004-05, 2007-08 and 2008-09 as the order of the CIT(A) is common for A.Ys. 2002-03 to 2008-09. For this query, the learned AR submitted that the assessee filed appeals only for these three assessment years. Accordingly, we take up these three appeals for adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 and in the case of CIT vs. Baishnab Charan Mohanti reported in 212 ITR 195 and held that even where confirmations were filed, that itself does not discharge the onus cast on the assessee in view of the legal position that assessee is required to establish the identity of the party, capacity of the party to advance the money and the genuineness of the transaction. Since the assessee has neither filed any confirmations nor any evidence to prove the capacity of the parties for advancing the loans amounts, he treated the amounts as unexplained cash credits u/s. 68 and added to the total income of the assessee in A.Ys. 2002-03 and 2007-08. 6. The Assessing Officer also observed that in the balance sheets filed for the A.Ys. 2002-03, 2003-04, 2004-05, 2005-06 and 2007-08, the assessee had shown new creditors for expenses of Rs. 44,15,789/- in A.Y. 2002-03, Rs. 18,01,776/- in A.Y. 2003-04, Rs. 9,41,059/- in A.Y. 2004-05, Rs. 13,12,418/- in A.Y. 2005-06 and Rs. 3,36,78,174/- in A.Y. 2007-08. The Assessing Officer called for the details of these new creditors but the assessee, in spite of sufficient time and opportunity granted, did not furnish the details. The Assessing Officer treate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated the above amounts as unexplained cash credits u/s. 68 and added the same to the total income of the assessee in respective assessment years i.e., Rs. 27,53,680/- in A.Y. 2004-05 and Rs. 80,55,762/- in A.Y. 2008-09. 9. That apart, the Assessing Officer also noticed in A.Y. 2004-05 that as per the seized material A/AVR/RES/2, the assessee company had entered into MoU dated 22.12.2003 2003 with Lahari Homes for development of its land of 39 guntas of land situated at Kondapur and in exchange, the company would get two independent houses of (Plot Nos. 19 and 23) 445 square yards and 185 square yards respectively and the constructed area would be 3400 square feet and 2800 square feet respectively. The Assessing Officer observed that as per the seized documents in the case of Lahari Homes, the market value of these plots is Rs. 2,584/- per square yard and the construction cost is Rs. 1050/- per square foot. The Assessing Officer required the assessee to explain as to why the profits on sale of these lands should not be taxed as business profits. The assessee in its reply dated 16.12.2009 stated that the MoU that was entered on 22.12.2003 by the company with M/s. Lahari Homes w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has grievance in these assessment years with regard to certain disallowances. ITA No. 1635/Hyd/2012 (A.Y. 2004-05) 11. In this year the assessee raised the ground that the CIT(A) ought not have confirmed the profit on sale of land at Kondapur amounting to Rs. 73,57,920. 12. Brief facts of the issue are that in this case an MoU was executed without subsequent follow-up action of handing over of the property or any development work carried by the developer nor any consideration has passed on in this transaction. It is submitted that the property in question is still with the assessee and has been mortgaged to the bank for obtaining loan. Further, the Assessing Officer himself has observed that in the case of M/s, Lahari Homes (Developer) a sum of Rs. 9,75,000/ - is payable to the assessee company towards the land cost. Assessing Officer also observed that M/s. Lahari Homes has developed the land and constructed the houses on this land. On the contrary, the assessee submitted that the Assessing Officer is totally erred in concluding that the land in question has been developed by M/s. Lahari Homes and the land still is with its possession without any trace of development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se necessary enquiry to the file of the AO so as to establish whether the assessee owns this property or sold the same. Only in the event of sale of this land property the profit arising out of sale has to be taxed by the AO. This ground in ITA No. 1635/Hyd/2012 is allowed for statistical purposes. In the result, ITA No. 1635/Hyd/2012 is partly allowed for statistical purposes. ITA No. 1636/Hyd/2012 (A.Y. 2007-08):- 14. The assessee raised the ground disallowance on creditors amounting to Rs. 30,05,195 is not justified. 15. Brief facts of the issue are that in the Balance Sheet the assessee has shown new creditors for expenditure at Rd. 3,36,78,174. The Assessing Officer vide letter dated 9.11.2009 requested the assessee to furnish the details of sundry creditors. The assessee has not filed details or confirmation letter from the parties. In spite of giving opportunity, the assessee failed to furnish necessary details. Being so, the Assessing Officer made an addition of Rs. 3,36,78,174 as unproved liability. 16. On appeal, the CIT(A) observed that Rs. 3,36,78,174/ - in A.Y. 2007-08 in respect of creditors for expenses was shown in the Balance Sheet. After considering the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of M/s. Nakaht Real Estates as on 31-3-2007. In the subsequent year another Rs. 20 lakhs was received on 17-7-2007 and total of Rs. 45 lakhs was transferred to Lahari Green Park A/c on 31.3.2008. The assessee submitted that this amount was adjusted in the hands of Lahari Green Park towards sale of land to the above party in A.Y. 2008-09. M/s. Lahari Green Park declared the same as sale consideration of land in their books. Therefore, addition cannot be made on these balances on the basis of mere appearance in the books of assessee without examining the nature of receipt. 17. It is also noticed that in the financial year 2005-06 relevant to A.Y. 2006-07, assessee had written off sundry creditors amounting to Rs. 26,74,610/- and credited the same to the Profit and Loss A/c. This amount represents credit balances carried over from earlier years without any further transactions. Similarly in the financial year 2007-08 relevant to A.Y. 2008-09, assessee had written off sundry creditors amounting to Rs. 3,46,065 and credited the same to the Profit and Loss account. However, in the A.Y. 2007 08, it is noticed that in some of the cases of creditors, no transactions have taken place b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,55,762 in its books of account. There was also share application money at Rs. 50 lakhs. The total addition was made at Rs. 80,55,762 as the assessee could not furnish necessary details regarding the nature, source and genuineness of the transaction. 22. On appeal, the CIT(A) observed that a sum of Rs. 30,55,762/- was added under unsecured loan, and Rs. 50,00,000/- was assessed under share application money. As far as Rs. 30,55,762/- is concerned, remand report was obtained from the Assessing Officer wherein the Assessing Officer has clarified that the assessee sold factory to M/s. Yantra Tools Pvt. Ltd., for a consideration of Rs. 2.15 crores and received advance of Rs. 30 lakhs from them on three different dates for Rs. 10 lakhs each i.e., on 23-2-2008, 29-3-2008, and 31-3-2008. Further clarified that these payments were duly reflected in the sale deed dated 28.11.2008. The Assessing Officer also submitted that the sale deed has been verified and the claim of the assessee appears to be true. In view of the above submission of the Assessing Officer, the CIT(A) observed that the addition of Rs. 30,00,000 does not stand and accordingly, he directed the Assessing Officer to delete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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