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TMI Blog2013 (12) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) of Rs.1,01,20,910/- under Section 56 read with Section 2 (22) (e) of the Income Tax Act (in short the Act); Rs.10 lacs under Section 28 (iv) of the Act and Rs.1,34,794/- under Section 36 (1) (iii) of the Act. 3. The revenue has preferred the appeal on the question of law as follows:- "1. Whether the Hon'ble ITAT was legally correct in deleting the addition of Rs.1,01,20,910/- made by AO u/s 56 i.e. income from other sources read with section 2 (22) (e) of the Act inspite of being afforded multiple opportunities the assessee failed to produce the copy of MOU (Memorandum of Understanding) before the AO. 2. Whether the Hon'ble ITAT was legally correct in holding that the assessee had prima facie discharged his burden in establishing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of the property and the amount was given as token money for purchase of the property. It was stipulated in the agreement, that if the seller of the property fails to execute the sale deed by the due date, the amount of advance given for purchase of plot of land shall be recovered from him along with interest. A Memorandum of Understanding (MOU) to this effect was also executed. The transaction appeared in the balance sheet. Since it was not a receipt by the shareholder but was a business transaction for sale of property, the same could not be brought within the ambit of provisions of Section 2 (22) (e). 5. The MOU was not brought on record before the AO. It was, however, brought on record in appeal before CIT (A). 6. The ITAT hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. FURTHER RESOLVED THAT, SHRI HARI SHANKAR AGARWAL, DIRECTOR, be and is hereby authorized by and on behalf of the board to give effect to the above resolution and also to do all such acts, deeds and things as may be deemed necessary in relation to the purchase above property." 18. However, the matter could not be materialized and MOU was executed on 28.3.2008 cancelling the said transaction, a copy of MOU has been placed at Page Nos. 4 & 5 of the assessee's paper book. 19. Considering the facts of the case and material on record, we notice that the assessee has prima facie discharged the burden in establishing that the amount received was a commercial transaction, therefore, the transaction is not covered by Section 222 (e) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelled, the transaction could not be treated as a business transaction and would amount to loan as it reflected in the audited books of account. 8. We find that the MOU relied on by the assessee was brought on record in appeal before CIT (A). The Tribunal being final Court of fact accepted the explanation that the amount of Rs. 1 crore was received as advance sale consideration for sale of cold storage of the assessee. The agreement, however, could not materialise on which the MOU was executed cancelling the transaction. In the circumstances, even if the amount was reflected in the books of account as loan, the finding recorded by the Tribunal that for the purpose of income tax one has to examine the nature of transaction in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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