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TMI Blog2015 (7) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... ved and not returned. As assessee is one of the legal owners of the impugned land for sale; so the entire theory of the AO (that the trust has been designed for tax evasion and assessee has earned income from other sources), crumbles down. Section 51 is found to be applicable in such cases; the assessee is asked to reduce the amount of advance if forfeited after arbitration, from cost of property while working out gain on any subsequent sale. The AO is also directed to take note of this, for future assessment purposes. We find Ld. CIT(A) has rightly held that for the-time being, there is no basis for any addition of,Rs.75,OO,OOO/- and accordingly he deleted the addition in dispute. - Decided against revenue. - I.T.A. No. 835/DEL/2011 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om other sources and siphoning of funds by the paying concern. 4. That the Ld. CIT CA) has erred in law and on facts in failing to pierce the corporate veil in this case to expose the true nature of transaction which is attempt by the assessee to evade taxation till the final transfer of capital asset and prevent the advance forfeited to be considered as income from other sources even if the capital asset is never transferred In the thus preventing any taxation on the advance forfeited till then. 5. That the Ld.CIT(A) has erred in law and on facts by not considering the case law CIT Vs Sterling Investment Corporation Ltd.(1979) I taxman 396: (1979) 12 CTR 263: (1980) 123 ITR 441 (Bom) whereby held by Hon ble Bombay High Court to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el of the assessee relied upon the order of the Ld. CIT(A) and submitted that the order of the Ld. CIT(A) may be upheld. 7. We have heard both the parties and perused the records especially the orders of the revenue authorities, we find that the assessee is an individual. AO observed that an agreement dated 25.4.2005 was made to sell certain properties belonging to the trust to M/s Raj Hans Tower Pvt. Ltd. Certain amounts in the form of part payment were received by the Trust as well as assessee and assessee s brother, Shri Vineet Goyal Total amount received by the assessee was ₹ 75,00,000/-. Later on, litigation occurred due to non approval of map by the GDA and assessee has not returned back the amount. The AO held that the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of sale advances. We note from the records that these land owners have received advances from M/s JMD Buildtech Private Limited and Mls Rajhans Towers Private Limited, the share of the assessee, in total of such advances, being ₹ 75,OO,QOO/-. However, Mls Rajhans Towers Private Limited has gone in litigation: currently in the form of arbitration proceedings pending before retired Justice J.P. Singh. According to the assessee, he and other two legal owners have no intention to withhold the advances, but have countered the claim of Mls Raj Hans Towers Private Limited by saying that as Mls Raj Hans Towers Private Limited has not fulfilled their part of commitments; so the amount received as advance part payment was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. It is more interesting to note that the same AO, who is also assessing Shri Vineet Goel, another recipient and legal owner, does not take any remedial action in case of Shri Vineet Goel. The above facts shows the inconsistent attitude of the AO. 7.1 We find from the above, that in nutshell, as assessee is one of the legal owners of the impugned land for sale; so the entire theory of the AO (that the trust has been designed for tax evasion and assessee has earned income from other sources), crumbles down. Section 51 is found to be applicable in such cases; the assessee is asked to reduce the amount of advance if forfeited after arbitration, from cost of property while working out gain on any subsequent sale. The AO is also directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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