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TMI Blog2018 (10) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... from house property, business income in the capacity of partner and income from other sources. A search and seizure action u/s 132 of the I.T. Act, 1961 was conducted on the business premises of M/s. Aarti Infrastructure & Buildcon Ltd., residential premises of its directors and the residential/business premises of the other members and related persons/ concerns in the above business group. The materials seized from the persons covered under search were examined and the relevant persons were asked to furnish their explanations upon findings of assets and entries made in the loose papers and various discrepancies found in accounts/documents. Certain papers were found from the above premises wherein the name of the assessee was mentioned in certain transactions of land and in redistribution of some assets on dissociation of the assessee and few others from the affairs of M/s. Aarti Infrastructure & Buildcon Ltd. In the course of verification of the documents seized from the residential premises of Shri Kishore Atlani (namely a pen drive) and also the documents seized from Shri Rajesh Atlani, certain documents belonging to the assessee were found, based on which the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque of Rs. 1,15,20,000/- bearing number 864642 dated 01/06/2006. These details were found entered in the sale deed itself. The payments through above instruments were made more than 2 years ago, but the sale was registered much later. Further, the sale consideration which was adopted was on a lower side as compared to the stamp duty valuation. These findings made during the course of search was itself being probed when at premises of Shri Rajesh Atlani, a copy of agreements relating to sale of land at Mowa was found. Apart from this from the residence of Shri Kishore Atlani, one pendrive was seized in which one excel file was present showing details of one land transaction. On superficial examination above these transactions are found to be one and the same. 4. The Assessing Officer, therefore, asked the assessee to explain as to why the addition should not be made in the hands of the assessee to the extent of Rs. 2,65,52,456/-. It was explained by the assessee that the funds to the extent of Rs. 12,00,00,000/- were to be received by him along with others from M/s Suncity Projects Private Limited and initial payment of Rs. 1,80,00,000/- was also made. But subsequently a severa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is entitled for the above amount being his share on account of compensation equivalent to Rs. 2,61,50,496/-, which is the amount receivable as on 31/0312006. In absence of any explanation from the side of the assessee, the Assessing Officer made addition to the income of the assessee by invoking the deeming provision of section 69B of Income Tax Act, 1961. According to him, the compensation received represents the investments which are not recorded in the accounts of hence by virtue of the deeming provisions, the addition of Rs. 2,61,50,496/- was made by the Assessing Officer to the income of the assessee. 7. Before the ld. CIT(A), the assessee made elaborate submissions which has been summarized by the ld. CIT(A) and which read as under :- "(i) No part of the agreement dated 01.04.2006 was ever implemented by any party to the agreement and it is no more than a MOU which has remained unimplemented. (ii) That the agreement was signed by the directors of Aarti Infrastructure and Buildcon Ltd. (other than Shri Suresh Atlani) unwillingly. The immovable properties described in para no. 6 of the agreement were never given/transferred to the person named in the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made in the instant case is deleted. "6. 1 have carefully gone through the assessment order and written submissions of the appellant. It is not in dispute that the appellant had disclosed the sale of land at Mowa under question in its books of accounts as the A.O. has also recorded his finding of fact in Para 2 of the assessment order. It is gathered that the land was sold for Rs. 2,95,20,000/- on 13.03.2008 to M/s. Purandar Promoters and Developers Private Limited through the registered sale deed on the even date. It is seen that as per registered sale deed, the market value adopted for stamp duty purposes was Rs. 3,68,90,000/-, however, the sale consideration was Rs. 2,95,20,000/-; that the payment was received two years before the registry of the sale deed through one demand draft of Rs. 1,80,00,000/- bearing number 018122 dated 18.01.2006 and one cheque of Rs. 1,15,20,000/- bearing number 864642 dated 01.06.2006. The action of the A.O is based on the information gathered and inference drawn from the following: a) At another premises, which is a residential premises of brother of one of the past director in the appellant company, a copy of agreements relating to sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Suncity Project Pvt. Ltd. that was received as unsecured loan by the appellant. I also find that M/s Aarti Sponge & Power (P) Ltd. had repaid the sum of Rs. 2 crores to Suncity Project Pvt. Ltd. Similarly, Mr. Rajeev Agrawal and Mr. Chhagan Lal Mundra had also repaid sum of Rs. 1 crore and Rs. 1.50 crores respectively to Sun city Project Pvt. Ltd. It is not the case of the A. O. that Purandar Promoters & Developers Pvt. Ltd., the buyer of the land had confirmed having paid any amount over and above that appearing in the registered sale deed. It transpires that the persons named in the Table have shown the receipts as unsecured loan. M/s Aarti Sponge & Power (P) Ltd. is also an assessee covered under the same search assessment proceedings being a group company, however, it is not the case of the A. O. that the payment particulars appearing in copy of account of Suncity Project Pvt. Ltd. in the books of M/s Aarti Sponge & Power (P) Ltd. have not been received by Suncity Project Pvt. Ltd. I find that the specific queries were raised by the A.O. from the appellant and Mr. Rajeev Agrawal. I find that, in spite of specific request having been made by the appellant during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Lok Adalat dated 20.06.2010 itself signifies that the agreement was never acted upon between the parties. I do find force in the submission of the appellant that the land was sold to Purandar Promoters and Developers Pvt. Ltd., whereas, the payments have been received from Suncity Project Pvt. Ltd. As there is no lifting of corporate veil between Purandar Promoters and Developers Pvt. Ltd. and Suncity Project Pvt. Ltd., the receipts cannot be said to be receipt of sales consideration against transfer of land. The agreement dated 01.04.2006 is not the agreement to sell the property in question, but it is an agreement having reference to some amount receivable from Suncity Project Pvt. Ltd. Neither the agreement nor the pen drive was found from the control and possession of the appellant and on the contrary, these were found from the brother of an ex-director of the company. For this reason, the agreement and the so called contents of the pen drive requires to be viewed and relied upon more cautiously. As rightly contended by the appellant, the contents of the pen drive are absurd and unauthentic, because it relates to the alleged sale price of the land with the loans by seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account. 11.. In the case of Godhra Electricity Co. Ltd. v. CIT (1997) 225 ITR 746 (SC) enhanced rates shown as receipt in accounts but not realized due to litigation and takeover of the company by Government was held by the Supreme Court as not accruing to the assessee on real income basis in the following words: "The question whether there was real accrual of income to the assessee-company in respect of the enhanced charges for supply of electricity has to be considered by taking the probability or improbability of realisation in a realistic manner. If the matter is considered in this light, it is not possible to hold that there was real accrual of income to the assesseecompany in respect of the enhanced charges for supply of electricity which were added by the ITO while passing the assessment orders in respect of the assessment years under consideration. The AAC was right in deleting the said addition made by the ITO and the Tribunal had rightly held that the claim at the increased rates as made by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant does not figure out on any official papers, under such circumstances, in my considered view, the onus on the A.O. to establish the nexus of the appellant with Aarti Infrastructure & Buildcon Ltd. and transaction giving rise to impugned capital gain was much more. Looking to the facts and circumstances of the case and keeping in view findings in the above referred appellate orders dt. 13.08.2013 and 23.05.2014, I am convinced that the AO was not justified in making addition of Rs. 2,61,50,496/- and the same cannot be sustained. Accordingly, the addition of Rs. 2,61,50,496/- made by the AO is deleted." 9. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds :- "1. Whether in law and on facts & circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 2,61,50,496/- made by the A.O. by invoking section 69B of the IT Act, 1961? 2. The Order of the Ld. CIT(A) is erroneous both in law and on facts. 3. Any other ground that may be adduced at the time of hearing." 10. The ld. counsel for the assessee at the outset referred to the decision of the Tribunal in the case of DCIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record. In the instant case, a search & seizure operation was conducted on 23.6.2010. According to the Assessing Officer, during the course of search in the premises of the assessee, a sale deed was found which evidences sale of land situated at Mowa for Rs. 2,95,20,000/- by the assessee to M/s. Purandar Promoters and Developers Private Limited on 13.3.2008. The said sale was disclosed by the assessee in its return of income for the year under consideration at Rs. 2,95,20,000/-. The Assessing officer further observed that on 23.6.2010, a search was conducted simultaneously at the premises of Shri Suresh Atlani, Ex. Director of the assessee company. During that search, one Pen drive was found and in that Pen driver one Excel sheet was found. In that Excess-sheet, on the left hand side, description of the very same land which was sold by the Registered Deed dated 13.3.3008 for Rs. 2,95,20,000/- was mentioned and its cost was stated at Rs. 12,13,11,005/- being 397741 sq.ft @ Rs. 305/- per sq.ft. On the right hand side, amount received from SUNCITY Project (P) Ltd., was stated at Rs. 12,05,20,000/- and balance to receive was Rs. 7,91,005/-. The aforesaid Rs. 12,05,20,OOO/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Mowa. According to him, only real income can be brought to tax as because the amount received from SUNCITY Project (P) Ltd. in excess of Rs. 2,95,20,000/-were repaid back and no real income actually accrued or received by the assessee. 22. Ld D.R. reiterated the findings of the Assessing Officer. 23. We find that the undisputed facts of the case are that the assessee company sold its land situated at Mowa to Purandar Promoters and Developers Private Limited vide a registered sale deed dated 13.3.2008. As per the said sale deed, the consideration for the said land was Rs. 2,95,20,000/- only. The stamp duty value of the said land was Rs. 3,68,90,000/- at the time of execution of sale deed. Section 43CA was inserted in the Statute by the Finance Act 2013 w.e.f. 1.4.2014 and, therefore, not applicable in the assessment year under appeal. Nowhere in the course of search, any agreement for the said sale of land in question for an amount other than Rs. 2,95,20,000/- was found. On the basis of excel sheet contained in the pen drive, the Assessing Officer inferred that the entire amount of Rs. 12,13,11,005/- received/receivable from SUNCITY Project Pvt. Ltd., was on account of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the amount of Rs. 12,13,11,005/-, the word stated was "cost" and not the "sale value' of the land and that in the agreement dated 01.04.2006 nowhere it was stated that the amount of Rs. 10,33,11,005/- receivable from Suncity Project (P) Ltd. was against the sale value of land in question, therefore, in absence of any contrary material brought to our notice, we find no infirmity in the order of the ld. CIT(A) in deleting the addition for the year under consideration in the hands of the assessee. Accordingly, the order of the ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed. ITA No.185/RPR/2014 (Abhishek Atlani): ITA No.186/RPR/2014 (Suresh Atlani) : 15. After hearing both the sides, we find the grounds raised by the Revenue in the above two appeals are identical to the grounds in ITA No.314/RPR/2014 where the addition was made by the Assessing Officer on the basis of the same seized documents and the ld. CIT(A) has deleted the addition. We have already decided the issue and the grounds raised by the Revenue have been dismissed. Following similar reasoning, the grounds raised by the Revenue in the above two appeals are also dismissed. 16. In the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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