9911796707
TMI Blog2020 (3) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the assessee company against sale proceeds of specified plots of land. As we have noted above, the payment of 3.89 Crores also corroborates with the books of accounts of M/s. U-Turn Housing Pvt. Ltd. The statement of Shri Nikhil Tripathi cannot be held as reliable piece of evidence against the assessee company in view of various discrepancies and lack of corroboration as we have discussed above. Further, there is no material on record which can form the basis to hold that the assessee company has received 3.26 crores in cash from M/s U-Turn Housing Pvt. Ltd. which has not been accounted for in its books of accounts during the financial year 2006-07. Addition made by the Assessing officer to this effect is hereby directed to be deleted. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case, it is held that the AO was justified in making addition of ₹ 3.26 crores u/s 68 of the Act and hence the same is hereby sustained.'' It is noted that filing of additional evidence by the ld.AR of the assessee has no relevance as the same has already been taken into consideration in the case of the assessee for the Assessment Year 2007-08. In this view of the matter and facts and circumstances of the case, we concur with the findings of the ld. CIT(A) for the Assessment Year 2007-08 and do not find merit in admitting the additional evidence filed by the assessee. Hence, the additional evidence filed by the assessee for the Assessment Year 2007-08 is not admitted. Thus Ground No. 1 of the assessee is dismissed. 3.5 As regards Ground No. 2, 3 and 4, we have heard the rival contentions and perused the materials available on record. It is not imperative to repeat the same facts as similar issue has been decided against the assessee in assessee's own case for the Assessment Year 2006-07. We further noted that in this case the ld. CIT(A) has rightly confirmed the action of the AO as the assessee could not advance any contrary material/ evidence as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income and also requested for copy of the reasons which were duly supplied to the assessee. 5. As per the Assessing officer, the assessee has entered into a memorandum of understanding (MOU) dated 22.03.2006 with M/s U- Turn Housing Pvt. Ltd. for sale of its land situated at Sanganer - Diggi, Malpura Road in the revenue villages of Panwalia, Manpur Tillawala, Jaisinghpura, Roopwas falling in Sanganer Tehsil of Jaipur. Further, as per copy of account furnished by M/s U-Turn Housing Pvt. Ltd., it was found that cash payment of ₹ 3,26,00,000/- was made to assessee against purchase of land on the following dates: S.No. Date Amount (Rs.) 1. 01.04.2006 25,00,000 2. 10.04.2006 1,00,00,000 3. 15.04.2006 50,00,000 4. 24.04.2006 37,00,000 5. 30.04.2006 16,00,000 7. 17.05.2006 40,00,000 8. 28.05.2006 40,00,000 9. 14.08.2006 8,00,000 Total 3,26,00,000 6. The Assessing officer, however, found that no such receipts have been declared by the assessee in its books of accounts. In order to examine M/s U.Turn Housing Pvt. Ltd., commission u/s 131(1)(d) was issued to ADIT (Inv.), Special Cell, New Delhi wherein Shri Nikhil Tripathi, Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not accounted for said payment in its books of accounts. Therefore, cash payment of ₹ 3,26,00,000/- was treated as assessee's unexplained cash credit, by invoking provisions of section 68 of the Act, which is not shown in the books of accounts and the same was added to income of the assessee for the impugned assessment year. The assessment was accordingly completed at an income of ₹ 5,16,08,880/- vide order passed u/s 147 read with 143(3) dated 20.03.2015. 9. Being aggrieved, the assessee carried the matter in appeal before the ld CIT(A) who has since sustained the said additions and against the said findings, the assessee company is in appeal before us. 10. During the course of hearing, the ld. AR submitted that the impugned order passed by the Assessing Officer and further confirmed by the learned CIT(A) vide its impugned order dated 30.12.2016 is ex-facie illegal, unjust and is against the settled preposition of law. The ld. AR submitted that the said assessment order has been passed under Section 68 of the Act which deals with the unexplained cash credit in the books of the accounts of the assessee. It is submitted that in the instant case, the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned amount would be ₹ 3,16,00,000/- and not ₹ 3,26,00,000/- as mentioned in the table. 13. It was further submitted that even from the perusal of the Ledger Account of M/s U-Turn Housing Pvt. Ltd. for the assessment year 2007-08, it is evident that the cash entries mentioned in such ledger have not been actually paid to the assessee but to some other person and the entry itself state that the payment was been made to "Chandra Mohan for advance payment of Bharatpur Land" dated 19.05.2006 for the payment of ₹ 4,00,000/-, Entry dated 25.05.2006 for the payment of ₹ 40,00,000/-, Entry dated 09.06.2006 for the payment of ₹ 10,00,000/-, Entry Dated 16.06.2006 for the payment of ₹ 10,00,000/- and Entry dated 24.07.2006 for the payment of ₹ 4,00,000/-). It is submitted that the assessee has no link with any person named as Mr. Chandra Mohan and further, no project was undertaken by the Assessee in Bharatpur. Thus, it is evident that the said entries have been wrongly made by M/s U-Turn Housing Pvt. Ltd. in its ledger account pertaining to the assessee and the same cannot be added in the income of the assessee. 14. The ld. AR further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. to check the availability of the amount claim to have been paid to the assessee. Further, M/s. U-Turn Housing Pvt. Ltd. has claimed that it has withdrew the amount from its Bank Account on several occasions in order to pay cash to the assessee Company. However, they have not produced any Bank Statement to show such withdrawal made by them. It was submitted that in compliance of the directions of the Bench dated 22.03.2019, the Department has presented the Petty Cash Book Register of M/s. U-Turn Housing Pvt. Ltd. during the period between 01.04.2006 to 30.04.2006 as per which only the cash amount of ₹ 37,10,000/- has been received by M/s. U-Turn Housing Pvt. Ltd. in that month. However, it has been claimed by M/s. U-Turn Housing Pvt. Ltd. that they have paid an amount of ₹ 2,28,00,000/- to the assessee Company during that month. Thus, M/s. U-Turn Housing Pvt. Ltd. was not having such huge amount with it in that month and has merely made the false claim of paying the same to the assessee Company. It is also pertinent to mention here that the Department was duty bound to file the Bank Statement of M/s. U-Turn Housing Pvt. Ltd. during the period between 01.04.2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while considering the explanation of the assessee, it is incumbent on the Assessing authority to enquire into the same. It cannot overlook one or the other materials or it cannot undertake a half-hearted enquiry. When looking at the facts, the Court has every right to scrutinize the situation and find out as to whether enquiry was made reasonably with the prudence of a reasonable man. Reliance is placed on the case of Hindustan Tea Trading Co Ltd vs. CIT, 263 ITR 289. However in the instant case, the learned Assessing Officer acted contrary to the said principle. 20. The ld. AR further placed reliance on the case of Commissioner of Income Tax vs. S.C. Sethi, 2006 SCC Online Raj. 329, wherein in the similar set of circumstances, the Hon'ble Rajasthan High Court has held the assessment cannot be done solely on the basis of the loose papers received from the premise of third party. It was submitted that the assessee has also sought for cross examination of Shri Nikhil Tripathi but the same was rejected. 21. The ld. AR further submitted that the only document on which the department has relied to justify the said assessment is the list of cash payments given by Shri Nikhil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be assessee". 25. The ld. AR finally submitted that the income of the assessee company has been wrongly reassessed in contradiction of the documents available on record. It is submitted that the assessee company cannot be made to suffer for the wrong committed by any other person and the impugned order passed by the Assessing officer deserve to be quashed and set aside. 26. Per contra, the ld. CIT DR submitted that statement of Sh. Nikhil Tripathi, Director of M/s U-Turn Housing Pvt. Ltd. was recorded on oath u/s 131 wherein he has confirmed the cash payment of ₹ 3.26 crores to the assessee company. It was further submitted that in the ledger account of the assessee in the books of M/s U-Turn Housing Pvt. Ltd., payment of ₹ 3.26 crores in cash to the assessee company is appearing and the assessee company has not brought on record any reasons as to why M/s U-Turn Housing Pvt. Ltd. would show cash payment of ₹ 3.26 crores in its audited books of accounts if no such payments were actually made by it. 27. Regarding the contention of the ld AR that MOU dated 14.07.2007 and cancellation agreement whereby the earlier MOU dated 22.03.2006 was cancelled were reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 30. As apparent from a reading of the aforesaid provisions, where a sum is found credited in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. Firstly, we find that the Assessing officer has relied on the statement of Sh. Nikhil Tripathi, Director of M/s U-Turn Housing Pvt. Ltd. which was recorded u/s 131 of the Act by the ADIT (Investigation) Special Cell, New Delhi. Even during the course of hearing, our reference was drawn by the ld CIT DR to question no. 7 and his response thereto, which has also been referred to by the ld CIT(A) in his order, accordingly, we deem it appropriate to reproduce the same as under:- "Q. No. 7: I am also showing you a copy of document titled 'Detail of payments made to Rajasthan Land Developers Pvt. Ltd. Jaipur during the period wef 01/03/2006 to 31/03/2007' which has been filed by your company before the ITO, Ward-2(2), Jaipur u/s 133(6) of the I.T. Act, 1961. Please state whether you accept that this document has been filed by your company and if so why it does not match with your books of accounts? Ans: I confirm that the said document has been filed by UTHPL before the ITO, Ward-2(2), Jaipur u/s 133(6) of the I.T. Act, 1961. The total payment of ₹ 9.83 Crore made to M/s RLDPL matches with our books of accounts. However, the dates as per book of accounts and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as accounted for in its books of accounts and is duly supported by confirmation signed by Shri Nikhil Tripathi on behalf of M/s U-Turn Housing Pvt. Ltd. and basis the same, the assessee has sold the land as per MOU dated 14.07.2007 and issued the possession and allotment letter along with site plan to the allottee /nominee names provided by U-Turn Housing Pvt. Ltd., which was again not taken into consideration by the Assessing officer for the reason that Sh. Nikhil Tripathi in his statement has categorically denied to have signed any such cancellation agreement dated 14.07.2007 wherein in response to question No. 4, he has denied the said document has been executed by him on behalf of U-Turn Housing Pvt. Ltd. as his signatures were forged. 37. Firstly, if we look at the copy of account/ledger account of the assessee in the books of M/s U-Turn Housing Pvt. Ltd. for the period 1.4.2006 to 31.03.2007 which is available as part of assessment records, it shows opening balance of ₹ 2.45 crores and closing balance of ₹ 9.83 crores. Therefore, mere looking at the closing balance of ₹ 9.83 crores in the assessee's ledger account, one may tend to believe that the same corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submission dated 19.03.2014 filed before the Assessing Officer, the assessee has denied knowing or having any linkage with Sh. R. K. Gupta or having authorized him to act on its behalf. Therefore, where the Revenue is relying on the statement of Sh. Nikhil Tripathi and in turn, entries in the books of accounts of M/s U-Turn Housing Pvt. Ltd. and the entries on the face of it suggest that certain cheques have been encashed through Sh. R. K. Gupta and there is denial by the assessee company regarding knowing or have authorised Sh R. K Gupta, than it was incumbent on the part of the Assessing Officer to have enquired the matter further from Sh. Nikhil Tripathi about such transaction and Sh. R. K. Gupta and his linkage/relationship with M/s U-Turn Housing Pvt. Ltd. or the assessee company and should have recorded his statement as well as statement of Sh R.K. Gupta in order to build chain of events as to the involvement of Sh. R. K Gupta, on whose behalf he has encashed the cheques and how the payment have been made to the assessee company. However, we again find that there is nothing on record in terms of any question asked in this regard from Sh. Nikhil Tripathi while recording his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r account of the assessee in books of M/s U-Turn Housing Pvt. Ltd. and apparently, both these details of payments are claimed to be emerging from the books of accounts of M/s U-Turn Housing Pvt. Ltd. However, we find that the first set of data is emerging from a statement signed by Sh. Nikhil Tripathi and apparently handed over by him during the course of recording of his statement u/s 131 which has no corroboration when the same is compared with the entries in the ledger account of assessee in books of M/s U-Turn Housing Pvt. Ltd. Given these apparent and inherent inconsistencies on face of record, the question is whether the Assessing officer carried out any further enquiry or investigation to verify the veracity of statement given by Shri Nikhil Tripathi. We note that there is no enquiry or investigation carried out by the Assessing officer regarding these discrepancies. Further, no finding has been recorded by him which proves that at the relevant point in time, M/s U-Turn Housing Pvt. Ltd. had sufficient cash balance in its hands or the money has been collected from prospective buyers or the money has been withdrawn from its bank to pay to the assessee company. We therefore fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein it has been stated as under: "That both the parties entered into an MOU earlier to this MOU (which is the present MOU) on 23.02.2006 and in pursuance of the earlier MOU dated 23.02.2006 party of the second part has already made a payment of ₹ 5,69,00,000/- (Rupees Five Crore Sixty Nine Lac only) to the party of the first part but due to some unavoidable circumstances on the part of the second party the earlier MOU dated 23.02.2006 has been cancelled by a separate cancelled deed, executed by the mutual consent of both the parties, on dated 14.07.2007 wherein it has been agreed that both the parties will execute another MOU (which is the present MOU) with fresh understanding and with fresh terms and conditions and the said amount of ₹ 5,69,00,000/- (Rupees Five Crore Sixty Nine Lac only) which was paid by the party of the second part to the party of the first part will be adjusted against the total payment of ₹ 9,14,40,000/- (Rupees Nine Crore Fourteen Lac Forty Thousand only) which is to be made by the party of the second party to the party of the first part under this MOU." 44. The Assessing officer has not accepted the said MOU dated 14.07.2007 stating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id MOU M/s Rajasthan Land Developers Pvt. Ltd had agreed. to sell the marketing rights to M/s U-Turn Housing Pvt. Ltd in respect of 72,000 Sq. Yards of land out of the total land of 10.63 Acres situated in Villages Jaisinghpura & Manpura Tilawala, Tehsil Sanaganer, Jaipur. In the said MOU, it is mentioned that NOC and proceedings U/s 90B of the Land Revenue Act 1956 in respect of the land had been passed by the Competent Authority and Layout plans have been submitted & approved by the Zonal Level Committee, whereas the proceedings u/s 25(2) of the Jaipur Development Act were under process and lay out plans were yet to be released. The total consideration for the above rights was fixed @ 1270 Per sq. Yards totaling to ₹ 9,14,40,000/-, out of which ₹ 5.69 Crores had already been received as per an earlier agreement Dt. 22.03.2006 (wrongly referred as 23.02.2006) in this MOU, which was cancelled on the same date i.e. 14.07.07. The remaining payment of ₹ 3.45 Crores was agreed to be paid by the U-turn Housing Pvt. Ltd. on the release of maps by the Jaipur Development Authority. It is also mentioned in the MOU that because of the reasons beyond the control of M/s Rajas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argo would actually benefit the investors/victims and as such the application being devoid of any merit is dismissed." 47. Further, we note that the existence of MOU dated 14.07.2007 and payment of ₹ 5.69 crores also find mention in the suit filed by the assessee company before the ADJ-19, Jaipur which has been taken cognizance of by the ADJ Court and decree has been issued by ld. ADJ, Jaipur vide order dated 20.11.2015 which reads as under: 48. Therefore, where the existence of fresh MOU dated 14.07.2007 has been stated to be recovered in original during the course of police investigation and also find mention in the filings before the appropriate Courts and taken cognizance of even by the Appropriate Courts, it was not correct on part of the Assessing officer to brush aside the contention of the assessee and negate the very existence of such an MOU and that too, on basis of the statement of Shri Nikhil Tripathi which as we have noted above lacks necessary corroboration even with the books of accounts of M/s. U-Turn Housing Pvt. Ltd. The statement of Shri Nikhil Tripathi may raise certain initial apprehension in the mind of the Assessing officer and rightly so, however, su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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