9911796707
TMI Blog2015 (11) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... ent : Respondent : Shri Devendra A Mehta ORDER Per B. R. Baskaran The revenue has filed this appeal challenging the order dated 31.12.2013 passed by Ld CIT(A)-31, Mumbai and it relates to the assessment year 2007-08. 2. The Revenue is aggrieved by the decision of the ld.CIT(A) in deleting the addition of ₹ 80 lakhs made by the AO. 3. We heard the parties and perused the record. Revenue carried out the search and seizure operation in the cases of Shri Dharampal Dembla Group/M/s Delhiwalla Real Estate Pvt Ltd. During the course of search operation, it was noticed that the assessee herein had received a sum of ₹ 80 lakhs in cash. Accordingly, the assessee was examined under section 131(1) of the Act, wherein he admitted that the above said sum of ₹ 80 lakhs was received in connection of sale of property and the same was not accounted for. Accordingly, the AO reopened the assessment by issuing notice u/s 148 of the Act. Before the AO, the assessee did not furnish any reply with regard to the various quarries raised by the AO. Hence, the AO assessed the sum of ₹ 80 lakhs as income of the assessee. 4. In the appellate proceedings, the assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not registered with the registration authorities. In view of the above, the ld.CIT(A) has accepted the submission of the assessee that the agreement for sale of land was entered into in order to determine the mutually agreeable value. The ld. CIT(A() further noticed that the difference between capital gains arising on sale of land and the sale of shares was very minimal. Under these set of facts, the ld. CIT(A) held the the addition of ₹ 80 lakhs made by the AO cannot be sustained. 7. For the sake of convenience, we extract below the relevant observation made by the ld. CIT(A) on this issue: 5.2.1 The facts as they emerge from the impugned assessment order, remand report and submissions of the appellant during these proceedings reveal that the appellant and his wife were directors of the company M/s Mourya Realty Pvt. Ltd. that was incorporated on 22.03.2006. On 06.12.2006, the appellant entered into an agreement for the sale of land owned by M/s Mourya Realty Pvt. Ltd. to M/s Delhiwala Real Estate Pvt. Ltd. for a consideration of ₹ 3,99,21,000/-. Subsequently, the shares of M/s Mourya Realty Pvt. Ltd. were transferred to M/s Delhiwala Real Estate Pvt. Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-12-2006 5000000 028602 05-01-2007 5000000 028603 16-01-2007 10000000 028604 Not Deposited 8206000 028605 Not deposited 11715000 TOTAL 39921000 However, as noted by the AO, in actual fact, the appellant received a total amount of ₹ 4,72,78,000/- (through cheques and by cash) as follows: Cheque No. Date Amount 028601 13-12-2006 5000000 028602 05-01-2007 5000000 028603 16-01-2007 10000000 758572 29-03-2007 1732000 09-05-2007 6340000 12-05-2007 1000000 05-05-2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, though an agreement was entered to sell the land, the actual modus operandi for the transaction is through the sale of shares and not the sale of land. In other words, instead of transferring the land, the appellant transferred the shares of M/s Mourya Realty Pvt. Ltd to M/s Delhiwala Real Estate Pvt. Ltd. and through this transfer, M/s Delhiwala Real Estate Pvt. Ltd. came to be owner of the land in the name of M/s Mourya Realty Pvt. Ltd. Thus the appellant transferred the land through what is commonly known as an 'alibi asset' i.e. shares of the company. In the instant case, the A.O. has not doubted the cost of acquisition of the land transferred-by the appellant nor the full value of consideration received as sale consideration of the said land. Neither has anything been brought on record to cast doubt on the expenses claimed in connection with this transfer. The capital gain ensuing from the transfer is to be computed only on the basis of the cost of land, the sale price thereof is to be computed only on the basis of the cost of land, the sale price thereof and the expenses claimed in relation to such transfer. As stated before, the ownership of the land came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of shares to the tune of ₹ 1,06,64,000/- and ₹ 24,22,000/- has been reflected in the returns filed by the appellant and his wife respectively for AY 2009-10. 5.2.7 In the remand report, the AO has stated that repayment of ₹ 23,57,000/- could not be confirmed. In this regard it must be noted that the receipt of cash of ₹ 82,06,000/- by the appellant from M/s Delhiwala Real Estate Pvt.Ltd is not disputed by the AO. The said cash had not been shown to be utilised elsewhere by the AO. Thus, considering the facts of the case at hand, the repayment of cash of ₹ 23,57,000/- cannot be upheld simply for lack of response to letter u/s 133 (6). 5.2.8 Thus, on reviewing the entire conspectus of facts relating to the issue at hand, I find that the addition of ₹ 80,00,000/- cannot be sustained as there is no dispute a regards the full value of consideration of the assets so transferred. Accordingly, the ground raise by the appellant is allowed. 8. We have carefully gone through order passed by the ld. CIT(A) on this issue. We are of the view that the ld. CIT(A) has analyzed the facts concerning to the issue in a proper perspective and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
