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TMI Blog2020 (3) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... unal was recalled for the limited purpose of adjudication of Ground No. 3 of the assessee's appeal and the findings of the Coordinate Bench while recalling the order reads as under: "5. We have considered the rival submissions as well as the relevant material on record. On careful perusal of the impugned order, we find that the Tribunal in para 3.4 of the impugned order has decided the ground no. 1 of the assessee's appeal for assessment year 2007-08. For ready reference, we reproduce para 3.4 and 3.5 as under :- 3.4 We have heard the rival contentions and perused the materials available on record. We find that the ld. CIT(A) vide its judgement dated 30-12-2016 for the Assessment Year 2007-08 had taken into consideration the judgement dated 20-11- 2015 of Hon'ble Upper District Judge, Room No. 19, Jaipur Mahanagar and rejected the contention of the assessee by observing as under (Page 20) of ld. CIT(A)'s order):- "(v) Further vide above referred order, the Hon'ble ADJ has held as under:- "(vi) Thus it is evident from the above that the issue of genuineness or otherwise of the MOU dated 14-07-2007 was not before the Court of Hon'ble ADJ and the MOU dated 22-03- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal while deciding ground no. 1 for the assessment year 2007-08 in para 3.4 has reproduced the finding of the ld. CIT (A) which also covers the issue involved in ground no. 3, however, the said reproduction of finding of ld. CIT (A) for deciding ground no. 1 does not lead to the conclusion that the said ground was independently decided by the Tribunal when it was not common to the assessment year 2006-07. Accordingly, we are of the considered opinion that there is a mistake crept in the impugned order so far as the ground no. 3 for the assessment year 2007-08 is not adjudicated by a speaking order. Accordingly, we recall the impugned order to the extent of non-adjudication of ground no. 3 for the assessment year 2007-08 and direct that the appeal of the assessee in ITA No. 109/JP/2017 for the assessment year 2007-08 be fixed for fresh hearing and adjudication of ground no. 3 of the assessee's appeal." 3. The present appeal has, therefore, come up for adjudication before us wherein the limited issue under consideration relates to Ground No. 3 of the assessee's appeal which reads as under: "On the facts and circumstances of the case learned CIT Appeals was not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission filed before the Assessing officer on 23.02.2015, submitted that the MOU dated 22.03.2006 for sale and purchase of land measuring 125000 Sq. Yards @ Rs. 1270.00 Per Sq. Yard was cancelled due to non-fulfillment of certain conditions stated in the said MOU vide cancellation agreement dated 14.10.2007 which was duly signed by directors of both the companies, notarized and registered with the Notary public vide registration entry No. 426 dated 19.07.2007. It was further submitted that a fresh MOU was entered into between the two companies on 14.07.2007 for sale and purchase of 72,000 Sq. Yard land @ Rs. 1270.00 per Sq. Yard and the said MOU was duly signed by directors of both the companies, notarized and registered with the notary public vide registration entry No. 427 dated 19.07.2007. It was further submitted that during the F.Y 2006-07, the assessee has received a sum of Rs. 3,89,00,000/- which is duly supported by confirmation receipt from 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order is liable to be set and aside. 11. It was submitted by the ld AR that there exist no books of accounts of the assessee wherein any entry pertaining to cash received from M/s. U-Turn Housing Pvt. Ltd. is present. It is submitted that the assessee has merely received an amount of Rs. 5.69 Crores from the M/s. U-Turn Housing Pvt. Ltd. and Rs. 5 Lakh from Mr. Nikhil Tripathi in the assessment year 2007-08 through banking channel and no cash amount has been received by the assessee company from M/s. U-Turn Housing Pvt. Ltd. 12. The ld. AR further submitted that in Paragraph No. 4 of the impugned assessment order, the Assessing Officer has provided the computation of the purported unexplained cash credit totaling Rs. 3,26,00,000/- which is as under: 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/- 6. 17.05.2006 40,00,000/- 7. 28.05.2006 40,00,000/- 8. 14.08.2006 8,00,000/- Total 3,26,00,000/- In this regard, it was submitted that the aforementioned entries do not even match with the Books of Accounts of M/s. U- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irector of M/s. U-Turn Housing Pvt. Ltd. and there existed no reason for non-consideration of the same. The same cannot be permitted to be disregarded merely on the basis of denial of the same by Shri Nikhil Tripathi in his statement. 15. The ld. AR further submitted that the Assessing Officer has failed to consider the revised MOU dated 14.07.2007 and the cancellation agreement dated 14.07.2007 which were recovered in original from possession of Mr. Nikhil Tripathi during police investigations. It was submitted that these documents were duly signed by both the parties and there existed no reason for denying the same by any of the parties. In this regard, it was submitted that it is evident from the aforementioned documents that M/s. U-Turn Housing Pvt. Ltd. had merely paid a sum of Rs. 5.69 Crores to the assessee in the financial year 2006-07 and no further amount has been paid. However, the Assessing Officer ignored these original documents and relied on the testimony of Shri Nikhil Tripathi. It was further submitted that Shri Nikhil Tripathi has himself accepted the existence of the MOU dated 14.07.2007 in its application filed before the learned C.M.M, Patiala House Court, New ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these documents nor has provided any reason for disregarding the same. 18. It was further submitted that the Hon'ble Tribunal while hearing the Misc. Application for recalling of order filed by the assessee vide its order dated 22.03.2019 asked the Department to file the detailed report supported by relevant documents relying on which the assessment has been done by the Assessing Officer for the assessment year 2007-08. It is submitted that in response, the Department has filed a report dated 05.04.2019 before the Hon'ble Tribunal. It is evident from the said report that the entire assessment has been done merely on the basis of the statement given by Shri Nikhil Tripathi under Section 131 of the Act. Further, the Report itself mentions that the entire re-assessment has been done on the basis of the presumptions. It has been stated that "Further, a specific modus operandi is in circulation amongst the real state sector entities that part payment is paid in cash and part in cheques. Further, the transactions cannot be void itself. One has made payment to the other, then it is ought to be understood that the other has received it. Also, whatever is paid according to the intention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had failed to consider that Nikhil Tripathi had every reason to make false statement regarding the payment of the cash amount to the assessee in order to create his defense in the FIRs/ complaint filed against Nikhil Tripathi by the persons who have booked their flats/properties in "Silver City Project" of M/s. U-Turn Housing Pvt. Ltd. It was submitted that it is unfair to the assessee that the entire re-assessment has been done on the un-challenged testimony of the person who has been an accused in several cases and has been declared as absconder by the Court of law. 23. It was further submitted that in order to assess a person u/s 68 of the Act, there must be running books of account available on record. However, in the instant case, no return has been filed by M/s. U-Turn Housing Pvt. Ltd. after the Assessment Year 2007-08 and the name of the company has been strike off by the ROC and a certified copy of the company master data of M/s. U-Turn Housing Pvt. Ltd. is annexed. 24. It was further submitted that the addition of Rs. 3.26,00,000/- is based on conjunction, surmises and presumption and the addition is bound to be deleted as per the decision of the Hon'ble Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, regarding the suit filed by the assessee company against Sh. Nikhil Tripathi before the ADJ-19, Jaipur, it was submitted that the ld. CIT(A) has gone through the order passed by the ADJ-19, Jaipur dated 20.11.2015 and the ld CIT(A) has recorded a finding that the issue of genuineness or otherwise of the MOU dated 14.07.2007 was not before the Court of Hon'ble ADJ and the MOU dated 22.03.2006 was not placed before the Hon'ble Court and the said order has been passed ex-parte in the absence of respondents. Therefore, the contention of the assessee company cannot be accepted. It was accordingly submitted that the AO was justified in making the addition of Rs. 3.26 crores u/s 68 of the Act and the findings so recorded by the AO should be confirmed. He accordingly supported order of the lower authorities. 29. We have heard the rival contentions and perused the material available on record. The case of the Revenue is that the assessee company has received a sum of Rs. 3.26 crores in cash from M/s U-Turn Housing Pvt. Ltd. during the F.Y 2006-07 relevant to impugned assessment year and the same is not shown in its books of accounts, accordingly, by invoking provisions of section 68 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee may be charged to income tax as the income of the assessee. In the instant case, the case of the Revenue is that the assessee has received a sum of Rs. 3.26 crores in cash from M/s U-Turn Housing Pvt. Ltd. and the same is not shown in its books of accounts. The assessee has disputed the receipt of such sum of money (which we shall be dealing subsequently) and therefore, said sum of money is neither shown by the assessee in its books of accounts nor found credited by the Assessing officer in the books of accounts of the assessee. In such a scenario, it may be treated as unaccounted receipts in the hands of the assessee, however, as far as the provisions of section 68 of the Act are concerned, the same can be invoked only where such receipts are accounted for in the books of accounts and explanation regarding nature and source of such receipts is either not forthcoming or not found satisfactory. Therefore, as far as invoking the provisions of section 68 is concerned, in absence of the requisite requirements so specified therein, the said provisions cannot be invoked to bring such unaccounted receipts to tax as income in the hands of the assessee. 31. Having said that, let's l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts of M/s U-Turn Housing Pvt. Ltd. 34. Further, the Assessing Officer has also relied upon copy of account of the assessee in the books of accounts of M/s U-Turn Housing Pvt. Ltd. as furnished by the latter during the course of assessment proceedings and held that as per such copy of account, it is found that cash payment of Rs. 3.26 crores was made to assessee company on various dates as we have noted in para 4 above. 35. Therefore, we find that the statement of Shri Nikhil Tripathi and the copy of account of the assessee in the books of accounts of M/s U-Turn Housing Pvt. Ltd are the two pieces of document which have been relied upon by the Assessing officer while arriving at the finding that sum of Rs. 3.26 Crores has been received by the assessee during the financial year 2006-07 and which has not been accounted for in its books of accounts. 36. At the same time, we find that the Assessing officer has not accepted the submission of the assessee company that the earlier MOU dated 22.03.2006 was cancelled due to non-fulfillment of certain conditions as evidenced by the cancellation agreement dated 14.10.2007 and a fresh MOU was entered into between the two compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on record to suggest that the assessee has any dealing with M/s U-Turn Housing Pvt. Ltd. regarding any land situated at Bharatpur. Further, there is nothing on record to show any linkage or connection of Shri Chandra Mohan with the assessee company. In this regard, apparently, no question has been asked from Sh. Nikhil Tripathi by the ADIT (Investigation) Special Cell, New Delhi during the course of his statement recorded u/s 131 of the Act. Further, no enquiry or investigation has been carried by the Assessing officer even though these entries are apparent on the face of assessee's ledger account. Therefore, as far as these payments relating to Bharatpur land are concerned, the same cannot be related to the assessee company and have been wrongly debited in the accounts of the assessee company in the books of M/s U-Turn Housing Pvt. Ltd. for the reasons best known to such company and which have not been enquired or investigated by the Assessing officer. Therefore, the statement of Shri Nikhil Tripathi that the said payments made to the assessee company matches with the entries in the books of accounts of M/s U-Turn Housing Pvt. Ltd. doesn't stand the test of corroboration to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid ledger account of the assessee in the books of M/s U-Turn Housing Pvt. Ltd., we also find that there are various entries totaling to Rs. 1.77 crores wherein cash payments have been shown to have been made to the assessee company by M/s U-Turn Housing Pvt. Ltd out of its petty cash book. In this regard, firstly, it is noted that date and amount of cash payment as reflected in the ledger account doesn't tally with the date and amount of cash payment as recorded by the Assessing officer in the assessment order as apparent from following comparative table: As per assessment order As per ledger account S. No. Date Amount (Rs.) Date Amount (Rs.) 1. 01.04.2006 25,00,000/- 22.04.2006 20,00,000/- 2. 10.04.2006 1,00,00,000/- 22.05.2006 40,00,000/- 3. 15.04.2006 50,00,000/- 11.06.2006 20,00,000/- 4. 24.04.2006 37,00,000/- 17.06.2006 12,00,000/- 5. 30.04.2006 16,00,000/- 23.06.2006 15,00,000/- 6. 17.05.2006 40,00,000/- 27.07.2006 13,00,000/- 7. 28.05.2006 40,00,000/- 22.08.2006 15,00,000/- 8. 14.08.2006 8,00,000/- 10.09.2006 10,00,000/- 9. - 11.09.2006 10,00,000/- 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been accounted for in the books of assessee company during the financial year 2006-07. The same payment of Rs. 3.89 crores has also been confirmed by Shri Nikhil Tripathi in the confirmation submitted before the AO which has apparently not being considered by the AO while framing the assessment apparently for the reason that such confirmation has been obtained and submitted by the assessee company and blind reliance on the statement of Shri Nikhil Tripathi which fails the necessary corroboration test as we have noted above. 43. Now coming to the assessee company's contention regarding the basis of receipt of Rs. 5.69 crores from M/s U-Turn Housing Pvt. Ltd. out of which Rs. 3.89 crores was received/recorded in its books of accounts during the financial year 2006-07 relevant to impugned assessment year. The assessee company has submitted a document by way of a memorandum of understanding (MOU) dated 14.07.2007, notarized and registered with Notary Public, which has been entered into between the assessee company and M/s U-Turn Housing Pvt. Ltd. wherein both the entities have come together and agreed on terms and conditions including relevant obligations and payment of consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of earlier MOU. In such a scenario, certain basic due diligence was required in the matter where the matter relating to forged signatures could have been referred to the forensic expert and his report should be called upon. Further, necessary enquiry could have been conducted with the Notary Public who has authenticated the execution and signing of second MOU dated 14.07.2007 and cancellation agreement of even date where the earlier MOU dated 22.03.2006 was cancelled by both the parties. However, there is nothing on record which suggest any such assistance was sought from forensic experts or any enquiry and investigation was carried out by the Assessing officer. 45. In addition, we note that original copy of MOU dated 14.07.2007 executed between the two parties was found during the course of investigation by the police authorities while investigating the economic offence alleged to be committed by Sh. Nikhil Tripathi, find mention in the copy of chargesheet filed in the ADJ Court, Patiala House, New Delhi, a copy of which is available as part of assessment records submitted before us and available at Department's paper book pages 51 to 75 and the relevant contents thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record, I am of the opinion that in the present case offence alleged against the accused persons is serious in nature wherein the land was put for sale even prior to acquisition of ownership rights from M/s Rajasthan Land Developers Private Limited. As per the 2nd MOU, the applicant acquired the rights over the land in the year 2007 whereas the applicant had invited applications for allotment of land way back in the year 2006. Even M/s Rajasthan Land Developers Private Limited has also raised objection over lifting of embargo and is willing to get the same removed only to the extent of 42,000 sqyds for which it has been paid for. The applicant has applied for lifting of embargo for the benefit of victims but it is silent about making allotment of land or repayment to all the 408 investors involved in the present. The applicant has not come up with any concrete proposal to compensate them. Even the investors who are to be compensated have not been brought forward to substantiate the plea of the applicant. The applicant has not come up with any plan to justify as to how he will compensate the investors who left off after allotment of the available land since he has allotted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.07.2007. The MOU talks about selling of marketing rights by the assessee company to M/s. U-Turn Housing Pvt. Ltd. in respect of 72,000 sq yards of land which shall include the booking of plots and receiving the payment from prospective customers at the rate of Rs. 1270 per sq yard for a total consideration of Rs. 9.14 crores. Further, on perusal of the MOU, we find that both the parties have agreed therein that the amount to the tune of Rs. 5.69 Crores has already been paid by M/s. U-Turn Housing Pvt. Ltd. prior to entering into such fresh MOU and the same shall be adjusted against the total consideration of Rs. 9.14 crores. The Court of ld. ADJ Jaipur has also taken cognizance of receipt of Rs. 5.69 crores by the assessee company. The said assertion in the MOU has also been confirmed separately by way of annual confirmation statement submitted before the Assessing officer duly signed by Shri Nikhil Tripathi and it is not the case of the Revenue that his signature on such confirmation was forged. Further, credit notes are issued by M/s. U-Turn Housing Pvt. Ltd. again signed by Shri Nikhil Tripathi drawing reference to MOU dated 14.07.2007 and stating that sum has been credited in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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