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TMI Blog2019 (9) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... wing donation / subscription as well as entertainment expenses of Rs.1,445/- and Rs.12,075/-; respectively. These two substantive grounds are dismissed as not pressed. 3. Next comes the assessee's third substantive grievance that the Assessing Officer as well as the CIT(A) have erred in adding his loan amount from M/s Chakra Infrastructure Ltd. (hereinafter referred to as CIL) as unexplained cash credits u/s. 68 of the Act. 4. We advert to relevant facts as per para-6 pages 2 and 3 in assessment order dated 26.12.2016. The Assessing Officer had issued section 133(6) notice to CIL which stood returned back by the Postal Authority "left". He then required the assessee to profile photo id , supportive documents, profit and loss account, balance sheet and return relating to the relevant previous year creditworthiness and the corresponding bank statement thereof. 5. Case file suggests that CIL's director Shri, Pranab KR. Roy appeared before the Assessing Officer on 19.12.2016 alongwith voter ID card, muster data, director's signatory details and unsigned confirmation of account in assessee's name. He stated that CIL profit and loss account, balance-sheet, ITR and bank statement for f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. amount of outstanding loan as on 31.03.2014 was Rs. 6,44,96,068/- 3. In this regard, to verify the loan transaction, u/s. 133(6) notice was issued on 9.11.2016 which was returned back by the postal authority with the remark 'that the loan creditor was not found" on the given address at M/s Chakra Infrastructure Ltd., Chakramadhumati, 40D North Purbachal, Haltu, Kalitala Link Road, Kolkat-700078. 4. The assessee was asked to produce the party. As per order sheet noting dated 19.12.2016, Sri Pranab KR. Roy, Director of M/s Chakra Infrastructure Ltd., submitted a photocopy of his ID card and one unsigned confirmation of account. 5. The documents which were called by 133(6) notice were not submitted by him like profit & loss account. Balance-sheet and bank statement of M/s Chakra Infrastructure Ltd. This proves that genuineness of transaction is not proved for which onus is on the assessee. 6. He also stated that the company has not filed return of income for AY : 2014-15. This also proves that genuineness of transaction is not proved for which onus is on the assessee. 7. In this regard during appellate proceeding, the assessee has submitted that he has entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative material is already on record. Thus, the Ld. AO should have considered that the assessee produced the director of CIL before him on his request who confirmed the transactions with the assessee. Comments of A.O 11. Mere statement without corroboratory evidences are not valid. The documents which were called by 133(6) notice were not submitted by Director like Profit & Loss Account, Balance-sheet and bank statement of M/s Chakra Infrastructure Ltd. He also stated that the Company has not filed return of income for Assessment Year: 2014-15. This proves that genuineness of transaction is not proved for which onus is on the assessee. 12. Further, it is stated by assessee that- (c) In the relevant year, the assessee received only sum of Rs. 8,52,000/- from CIL. However, the AO wrongly added the closing balance of Rs. 6,44,95,068/- to the income of the assessee without considering that the said amount also included brought forward balance. The details of the transactions with CIL in the relevant year is given as under. Opening balance Amount received Amount paid Closing balance Rs. 6,83,85,969/- Rs. 8,52,000/- Rs. 47,901/- Rs. 6,44,95,068/- The above facts fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 6,44,95,068/- was reflected in the balance-sheet as on 31.03.2014 of the said concern (Annexure-A)." 14. The perusal of submission as verified from balance sheet, the whole transaction is found to be accommodated entries shown under the head 'loan from, others" and "loan from, friends and relatives" and balance Rs. 6,44,95,068/- is shown as outstanding. No transaction directly from Chakra Infrastructure Ltd is appearing in the books of account. Further the identity of the loan creditors is not established on this fact and as return of income was not file by Chakra Infrastructure Ltd., genuineness of the transaction is not established. Further, profit & loss account, balance-sheet and bank statement were not filed by M/s Chakra Infrastructure Ltd., therefore, creditworthiness is not established. Therefore, the balance appearing in balance sheet of the assessee of Rs. 6,44,95,068/- remains unexplained. 15. The above discrepancies in account of assessee was categorically mentioned as it leads to some circumstantial evidences in case of assessee. In this regard, circumstantial evidences are of crucial importance collected from Public Domain which are of crucial importan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Police(II), Detective Department, 18, Lal Bazar Street, Kolkata forwarded its Memo No.22/SIT/DD dated 29.05.2017 stating that the case was filed against the assessee with Ref No.Garfa PS.DD/SIT, Case No.227 dated 09.07.2014 u/s. 120B/420/406/409 IPC and had started the investigation. Comments 1. The amount estimated by SEBI in its order and the amount shown as sale of Chakranarayan hotel is same of Rs. 10 crores. 2. Circumstantial evidence proves that the agreement filed by assessee is nothing but created document to accommodate illegal fund and might be tainted money. 3. It is further strengthened on the basis of Report of Inspector, who was deputed and in his report dated 25.8.2017, he stated that In case of Shri Jitendra Prasad Singh, DA-33,Sagarika Apartment, 1set Floor, New Town, Kolkata, Inspector - Shri Ganesh Chandra Chakladar's report is as follow- 'First I try to find out the existence the address i.e. of "M/.s Chakara Infrastructure Ltd. of 40B/B, North Purbachal, P.O.Haltu, Kali Tala Link Road, [P.No.28, Purbachal Main Road, Kolkata-78". Everybody of the area failed to inform about such name and address. But a grocer, named Bapi Barick, informed that M/s Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid Rs.20,000/- as advance and balance figure(s) of Rs.99,980,000/- had to be transferred not later than 31.03.2014. the assessee and his vendee further agreed that the later would be entitled to use the above said thirty rooms units upon paid of 25% of the consideration money. We re-emphasis that department has not doubted assessee's ownership as well as possession all these foregoing assets. 11. We now deal with the registration aspect of the above stated agreement. The Revenue's case as per the lower authorities finding is that the impugned agreement does not deserve to be accepted as genuine since an un-registered document. We find that the very issue had come up before this tribunal's co-ordinate benches in Smt. Sapnaben Depakbhai Patel vs. ITO Ward-10(1) Ahmedabad in ITA No.2414/Ahd/2013 decided on 13.01.2016. Learned co-ordinate bench considered the interplay between sec. 24D of the Income Tax Act vis-à-vis the sec. 17(2)(1A) and Sec. 49 of the Registration Act as well as sec. 53A of the Transfer of Property Act as under:- "23. The first reason assigned by the ld.First Appellate Authority for ignoring the agreement dated 4.4.2008 and 2.3.2009 for holding them inva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in the case of Suraj Lamp & Industries (supra) is concerned, it is altogether in different context. There is no dispute with regard to the proposition that transfer of an immovable property having value of more than Rs. 100/- can only be completed by way of registered sale deed, as contemplated in section 17 of the Registration Act. This judgment deals with the concept of power of attorney, lease, licence etc. Definition of expression "transfer" provided in section 2(47) is more wider than in the general law. As observed earlier, while dealing with the issue no.(ii), the expression "transfer" employed in section 2(47) includes (a) any transaction which allows possession to be taken/retained in part performance of a contract of the nature referred to in section 53A of the TPA, and (b) any transaction entered into in any manner which has the effect of transferring, or enabling the enjoyment of, any immovable property. In these two eventualities, profits on account of capital gains would be taxable in the year in which such transactions are entered into, even if a transfer of immovable property is not effective or completed under the general law. In the present case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Ram Kishan Vs. Bijeder Mann. The Hon'ble High Court has resolved the controversy and held that such unregistered agreement can be produced as evidence in suit for specific performance. It can be made basis of suit for specific performance. The finding recorded by the Hon'ble Punjab & Haryana High Court in this case reported in (2013) 1 PLR 195 as under: "11. A conjoint appraisal of sections 53A of the Transfer of Property Act, 1882, sections 17(1A) and 49 of the Indian Registration Act, 1908, particularly the proviso to section 49 of the Indian Registration Act, in our considered opinion, leaves no ambiguity that, though, a contract accompanied by delivery of possession or executed in favour of a person in possession, is compulsorily registrable under section 17(1A) of the Registration Act, 1908, but the failure to register such a contract would only deprive the person in possession of any benefit conferred by section 53A of the 1882 Act. The proviso to section 49 of the Indian Registration Act clearly postulates that non-registration of such a contract would not prohibit the filing of a suit for specific performance based upon such an agreement or the leading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above stated unregistered agreement followed the vendees multiple payments of transfers made former name as well as his proprietory concern M/s Chakra Nayantara Hotel, M/s Nayantara Appliances and M/s B.N. as on 31.03.2013 (supra). The relevant ledger account to this effect from 01.04.2013 indicates all these payments instances. The assessee's opening balance as on 01.04.2013 including these payments indication that a figure of Rs.6,83,85,969/-. 12. The Revenue's stand that all these are accommodation entries in the name of assessee's three concern, does not inspire concurrence therefore since the lower authorities have themselves included payments made in respect of assessee as well as his proprietary concern name. We reiterat that impugned addition sum of Rs.6,44,95,068/- is the net balance of CIL. We accordingly observe that the Revenue's action of making the impugned addition of the very sum in assessee's hand on one hand and holding the same as accommodation entries on the other is not acceptable. 13. Coming to equally important aspect that the assessee's opening balance figure(s) as on 01.04.2018 read an amount of Rs.6,83,85,969/- followed by further amount received of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e treated as unexplained cash credit for the year under consideration. To arrive at this conclusion, the Ld. CIT(A) relied on the following judicial pronouncements: "i. In CIT v. Usha Stud Agricultural Farms Ltd. 301 ITR 384 (Delhi) it was held in para (6) of the order: '(6) Here, the CIT(A) has deleted the addition of Rs. 15 lacs mainly on the ground that this credit balance of Rs. 15 lacs is being reflected in the accounts of the assessee over the past four to five years or so and hence this was not a fresh credit entry of the previous year under consideration and these credit entries were already made and accounted for in the A.Y.s 1995-96 and 1997-98 which were introduced in the form of advance against breeding stallions owned by the assessee and thus these credit entries did not relate to the year under consideration for being considered under section 68 of the Act. Since it is a finding of fact recorded by the CIT(A) that this credit balance appearing in the accounts of the assessee, does not pertain to the year under consideration, under these circumstances, the A.O. was not justified in making the impugned addition under section 68 of the Act and as such no fault can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premium which was received by the assessee company in the earlier year and not in the year under consideration. At the time of hearing before us, the learned DR has not disputed this factual position or even the applicability of the ratio of the said two judicial pronouncements relied upon by the Ld. CIT(A) while deleting the addition made by the A.O. under section 68. 10. It is also observed that the similar issue involving identical facts and circumstances has been decided by the coordinate bench of this Tribunal vide its order dated 05.07.2018 passed in ITA No. 1972/K/2016 wherein the order of the Ld. CIT(A) deleting the addition made by the A.O. under section 68 by treating the share capital and share premium amount received in the earlier year as unexplained cash credit in the subsequent year was upheld by the Tribunal for the following reasons given in paragraph no 4 & 5 of its order: "4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is an income tax assessee under PAN AABCJ9581H of the Tax Ward 1(4), Kolkata. The A.O. has passed the assessment order dated 21.03.2014 u/s 147/143(3)/263/144 of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the Ld. CIT(A) deleting the addition made by the A.O. under section 68 by treating the amount of share capital and share premium received during the earlier year as unexplained cash credits for the year under consideration." 14. Coming to the Revenue's vehement arguments that CIL has been facing both the SEBI and criminal proceedings (supra), we observe that same has no bar on the issue before us as all these are subsequent developments than the relevant accounting period and more so when we are adjudicating identity, genuineness and creditworthiness of the assessee's advance payments received from the said entity. We further are of the view that the mere fact of the said entity not having filed its return does not prove not fatal to the assessee's explanation proving identity, genuineness and creditworthiness of the advance receipts. We therefore direct the Assessing Officer to delete the impugned addition of Rs.6,44,95,068/-. 15. Next comes assessee's fourth substantive ground seeking to delete alleged bogus loan addition of Rs.71,57,971/- in case of M/s Disha Productions and Media Pvt. Ltd. This paper book page 88 contains RNI licence agreement dated 23.10.2013 with M/s ..... 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