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TMI Blog2019 (3) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... action. from the purview of Section 2(22)(e). Having regard to the overall circumstances of the case the ITAT disbelieved the assessee’s explanation concluded it is apparent that Agreement to Sell dated 8/6/2009 and cancellation of such deed by Agreement dated 1/8/2009 for the purchase of property is merely cover up and a camouflage for giving loan to the assessee by the above Company to avoid contravention of the provision of Section 2(22)(e). Assessee also failed to give the adequate evidence and cogent, reliable, and credible evidences about the transaction. CIT(A) has completely brushed aside finding of the A.O. in remand report and the statement of the assessee and further has not applied his mind to find out the true nature of the tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of assessment proceedings, the AO issued a Show Cause Notice as to why the addition ought not to be made with respect to the sum of ₹ 1,01,36,328/- under Section 2(22)(e). Apart from denying the general applicability of that provision, the assessee did not produce any material in support of its contentions. On the addition being made and the same brought to tax, the assesse preferred an appeal; the CIT(A) elicited no less than three remand reports. In the course of these remand proceedings, the assessee furnished agreements to sell that he had entered into with the company [vendee i.e. Charu Home Products (P) Ltd], other materials in the form of cancellation deed and copies of bank statement etc. were also furnished. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought not to have interfered with the exercise of discretion in the course of his justified jurisdiction by the CIT(A). The ITAT elaborately noted the sequence of events as well as the nature of the documents presented during the course of proceedings. It also noticed that according to the prevailing law, the general approach of the Revenue is to exclude a genuine commercial transaction. from the purview of Section 2(22)(e). However, having regard to the overall circumstances of the case the ITAT disbelieved the assessee s explanation stating as follows:- 10. We have carefully considered the rival contentions and perused the order of the Lower Authorities. The assessee has received sums from M/s Charu Home Products Pvt. Ltd. from 8/6/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of deemed dividend does not apply. During the course of remand proceedings, the assessee was summoned and asked that the property was a leasehold property and was to be used for the development. The Company could not raise the funds from the banks, which resulted into cancellation of the agreements. The assessee could not explain being the Director that which bank was approached and what efforts were made. Even the assessee himself could not show which bank was approached. No documentary evidence could be produced before the A.O. Further, the property was leasehold property what efforts were made by the assessee Director to sell the property and transfer lease rights; he submitted that as the property could not be sold he did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 6.1 Crores. No evidence or explanation is forthcoming on this point form assessee. The repayment of the sum was also made on 30/3/2010 of ₹ 78 lacs after 8 months of the cancellation deed, which should have been otherwise repaid immediately. There is no claim of interest by the company or any efforts to recover the above sum from the director. Not all these facts inspire any confidence that Agreement to sell, subsequent cancellation entered into within merely one, and half months by the assessee and the Company is a business transaction. The LD AO in remand report has specifically stated that the documents produced shows lack of genuineness. It is also apparent that there is no whisper before the Assessing Officer about any such tra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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