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TMI Blog2010 (3) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the assessee company, amounts were received from M/s Bhuwania Brothers Pvt. Ltd., Calcutta totaling to ₹ 55 lakhs on various dates against a proposed contract for sale. The sale was not executed for some reasons. Therefore, the accounts of the assessee company also showed the repayment of the said amount in different dates to M/s Bhuwania Brothers Pvt. Ltd. The account of the assessee with M/s Bhuwania Brothers Pvt. Ltd was squared up during the previous year relevant to the assessment year itself. For the detailed reasons discussed in the assessment order, the explanations of the assessee were rejected by the assessing authority and the total sum of ₹ 55 lakhs was treated as unexplained cash credits in the hands of the assessee. It was accordingly added to the returned income. 3. The assessee had sold properties to four parties in the previous year relevant to the assessment year under appeal. On verification of the details, the Assessing Officer found that the sale value of the land has been recorded much less than the guidance value prescribed by the State Government for the purpose of registration. The assessee explained that the guidance value issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities have erred in law in holding and approving that the provisions of sec. 50C of the Income-tax Act, 1961 are attracted to the facts of the case. Such a view being totally against the provisions of law is to be rejected. (iii) The learned CIT(A) has also erred in holding that the assessing officer did not resort to sec. 50 of Income-tax Act, 1961 and that this section was taken only as guidance. Such finding and conclusion being opposed to the fact is to be rejected. (iv) Even otherwise the lower authorities have erred in concluding that in case of sale of stock in trade the actual value can be disregarded, and assumed sale value can be adopted, without an iota of any other evidence. (v) Without further prejudice and without conceding, the appellant also prays the adoption of uniform value of ₹ 200 per square feet by the assessing officer (as against the actual sale price of ₹ 75 to ₹ 104 per square feet) and the reduction thereof to ₹ 150 per square fee by the learned CIT(A) have no basis and are purely based on surmises and imaginations. In any case and on the facts of the case, the value as per sale deed being correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of accounts. It is also to be noticed that the assessing authority has not conducted any enquiry with the buyers of the properties to rebut the consideration accounted by the assessee. In these circumstances, we are of the considered view that the AO has adopted a higher sale value only out of the compulsion induced by a misreading of statutory provision contained in sec. 50C. There is no material on record to discredit the version of the assessee on this point of sale consideration. 7.5 In the facts and circumstances of the case, we set aside the orders of the lower authorities on this point and direct the AO to compute the profits on sale of plots as per sales consideration accounted by the assessee. 8. This issue is decided in favour of the assessee and the assessee succeeds in its appeal filed before us. 9. Next, we will consider the appeal filed by the Revenue in ITA No.1010/Bang/2009. 9.1 The first issue is the deletion of ₹ 55 lakhs made by the CIT(A) against the addition made by the assessing authority u/s 68. The relevant grounds are extracted below : (i) The learned CIT(A) was not justified in deleting the addition of ₹ 55 lakhs made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finally, the assessing authority issued a final show cause notice asking the assessee to explain the whereabouts of the creditors, failing which, the amount would be treated as unexplained cash credits u/s 68. In reply to the said final notice, the assessee filed a copy of the balance sheet and profit and loss account of M/s Bhuwania Brothers Pvt. Ltd. which, according to the AO did not support the creditworthiness of the said party. 9.6. In the above circumstances, he added the amount of ₹ 55 lakhs income as unexplained cash credits u/s 68. 9.7. The CIT(A), on the other hand observed that the identity of the creditor M/s Bhuwania Brothers Pvt. Ltd. is established and the genuineness of the transactions has also been established. The CIT(A) further felt that if there was any doubt in the mind of the assessing authority, he should have gone for further enquiries to rebut the explanations of the assessee. Finally, he concluded that M/s Bhuwania Brothers Pvt. Ltd. was sound enough to give that much amount to the assessee, as they had a capital of ₹ 24 crores in their balance sheet. Accordingly, he accepted the contentions of the assessee and deleted the addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty in Bangalore. When we specifically asked at the time of hearing for a copy of the said agreement, it was fairly conceded before us that the assessee did not have any such copy at present and the agreement was not produced either before the AO or before the CIT(A). Not only the original agreement, but the revocation agreement also was not produced before the lower authorities or before the Tribunal. 9.12 The finding of the CIT(A) that the identity of the creditor is established has been arrived at without reading the facts of the case. The entries made by the assessee in its books of account are selfserving evidences. They were proved to be genuine. Just for the reason that the assessee has accounted some cash credits in the name of a party. Just the name is sufficient? Does it mean that the identify of the creditor is established? By filing the balance sheet, is it safe to say that the identity of the party is established? As already observed by us, M/s Bhuwania Brothers Pvt. Ltd. at Calcutta was never seen and never heard. The CIT(A) has erred in coming to the conclusion that the identity of the party was established just for the reason that the name of the party is re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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