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TMI Blog2020 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... l/2019, ITA No. 5231/Del/2019 - - - Dated:- 27-11-2020 - Sh. Amit Shukla, Judicial Member And Dr. B. R. R. Kumar, Accountant Member Assessee by : Sh. Y. K. Sud, CA And Sh. S. S. Kalra, CA Revenue by : Sh. Avikal Mannu, Sr. DR ORDER Per Bench: The present appeals have been filed by the assessee and revenue against the orders of the ld. CIT(A)-16, New Delhi dated 08.03.2019. 2. In ITA No. 3682/Del/2019, following grounds have been raised by the assessee: A. That the CIT(A) was not justified in sustaining the disallowance of ₹ 2,02,65,593/- on account of Short Term Capital loss incurred by the appellant on sale and purchase of the Equity Shares. B. That while sustaining the disallowance of Short Term Capital loss, the CIT(A) failed to appreciate not only the submissions made by the appellant but also the vital facts and the evidence which clearly supported the sale and purchase of the shares. Hence, the actions of the AO the CIT(A) are required to be vacated. C. That the CIT(A) further erred by sustaining the action of the AO in placing the reliance on the statement recorded of an official of the Axis Bank at the back of assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the outset, it was brought to the notice of bench by the ld. AR that the assessee has filed application under the Direct Tax Vivad se Vishwas Act 2020 and has already submitted Form 1 and 2. 6. Keeping in view the exercise of option by the assessee to opt for the scheme, the appeal of the assessee is being dismissed as infructuous with liberty to the assessee to approach the Tribunal in case the Form 3 has not been issued by the designated authority. Appeal of the Revenue in ITA 5231/Del/2019: Addition on account of Unexplained Income: 7. The facts of the issue and the arguments taken up by the assessee before the revenue authorities as per the order of the ld. CIT (A) are as under: The brief facts of the case are that the assessee received an advance of ₹ 1.80 Crores from True Value Contactors (P) Ltd. Delhi in pursuance to the agreement to sell off his Plot No. 5, Road-H-9, DLF Qutab Enclave Complex, Gurgaon. The copy of the agreement signed by both the parties and also duly witnessed by two witnesses was filed before the AO at the time of assessment. The agreement have been reproduced by AO on page 18 to 21 of assessment order. The salient feat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not for the A.O. to determine that what could be the market value of a particular plot which can even vary looking into location of plot or other market factors such as accessibility, land development of the area which the A.O. has no where tried to considered those factors. Hence this action of the ITO cannot be sustained on this ground. v. The A.O. further in para 5.3 of her order observed that the forfeited amount of ₹ 1.80 Crores does not appear in the books of accounts of the assessee and also she observed that the assessee has not discharged his onus of establishing the identity, genuineness and credit worthiness of the same7 Further she referred to the statement of the assessee recorded by her in which while answering the question no 50 the assessee had stated that he had no contact with the buyer after 2014. However the A.O. had stated that the assessee had submitted a bank statement of True Value Contactors (P) Ltd./Jafna Contractors (P) Ltd. which had been scanned and made a part of the assessment order. Further in para 5.3 the AO has alleged that the amount of ₹ 1.80 Crores which is a forfeiture of advance was not found as a credit entry in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought to our notice that Axis Bank has stated that the said account from where the RTGs has come belongs to M/s. Excel Builtech(P) Ltd. And just on the basis of that she concluded that the intention of the assessee is malafide and she gave a show cause as to why ₹ 1.80 Crore be not treated as income of the assessee. vii. In this regard the assessee would like to submit that at the very outset the AO has made up her mind without confronting the material to the assessee to treat the forfeited amount as income from undisclosed sources. It is pertinent to mention here that she has just given 2 days notice u/s 142(1) to the assessee and that too without confronting the letter received from the bank wherein the bank had denied that account from where the money has travelled does not belong to the purchaser i.e. True Value Contractors (P) Ltd./Jafna Contractors (P) Ltd. Her action is totally against the principle of natural justice and she acted in a predetermined mind to make this uncalled for addition despite all the clear evidences provided by the assessee. Now the appellant assessee would like to make the following submissions before your goodself in this/regard: a. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement to sell is not on the Stamp Paper and therefore not a legal paper. In this regard it is submitted that an agreement can be executed even on the normal papers and it is not understood that how she has given a finding that the papers are not the legal papers having no evidentiary value. It is further submitted here that this agreement has been signed by purchaser and seller and even the consideration paid by the purchaser is through the banking channel and is proved and even the agreement has been confirmed-by the purchaser by way of affidavit. Hence this agreement have complete evidentiary value and cannot be treated as fake. If it all AO had any doubt she could have summoned the purchaser and the witnesses to the agreement which she failed to do so possibly because of paucity of time. The finding of the AO deserves to be set aside. (b) In para 5.6 she has referred to the show-cause notice dated 28.12.2016 which was given with. The preset mind giving assessee only one day time to rebut the letter of Axis Bank procured by her at the back of the assessee and not even confronting the same to the assessee and giving the assessee an opportunity to explain. This action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores without any legal assurance. The AO had again tried to go beyond her powers and interfere into an agreement which has been proved and confirmed beyond any doubt by both the parties. (f) In para 5.10 the AO has alleged that the copies of letter dated 10.02.2014 and receipt dated 02.02.2014 are ineligible and therefore she has doubted the advance of ₹ 1.80 Crores paid by the purchaser. In this regard it is submitted that both the letter and receipt are totally eligible and photocopy of the same are enclosed herewith for your ready reference. Kindly see pages 14 15. Even the assessee can produce original for your verification. Even otherwise this payment-of ₹ 1.80 Crores has been acknowledged by both the parties in the agreement to sell and the payment has been made through the Banking Channels by way of RTGs duly confirmed by the bank and also the affidavit of the buyer which has been filed before your goodself to prove that the objections are without any basis. (g) In para 5.11 the AO has doubted-the market value of the plot on the basis of the circle rate for which we have already made our submissions in para 3(iv) of our submissions and also the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lony known as DLF Qutab Enclave Complex, Dist Gurgaon. Further, vide, letter dated 16/12/2016 the assessee submitted the copy of letter dated 10/02/2014 of True Value Contractors Pvt. Ltd. informing their inability to make the balance payment because of their tight financial position and their no objection to forfeiture of earnest money. 5.1 Summon u/s 131 of the Income Tax, Act 1961 was issued to True Value Contractors Pvt. Ltd and Jaafa Contractors Ltd-(in whose Axis account the advance money is credited), both the summon remained unserved as per the Inspector report dated 16/12/2016. When the same was confronted to the assessee by Q. no 50 of the statement recorded u/s 131 the reply given was that: I have no contact with them after 2014 and I do not know their where about, I have already provided the documents . 5.2 Also vide letter dated 19/12/2016 information was sought u/s 133(6) from Sub-Registrar, Gurugram, Haryana to provide the circle rate of the property as mentioned above. The submission made by them vide letter dated 20/12/2016 shows that circle rate for DLF Phase-I is ₹ 70,000/- per sq. yards for residential property. The area in the above mentioned prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is reproduced as under: scan show cause 5.8 The submissions filed by the assessee have been considered but not found tenable and satisfactory. The assessee bps stated that he has received the amount from A/C no. 913020032425869 only. Whereas it has already been brought on record vide para 5.4 mentioned above that the said account is in the name of M/S Excel Buildtech Pvt. Ltd. and there are no entries of ₹ 1,80,00,000/- in respect of the assessee on the relevant dates as seen from the bank statement of M/S Excel Buildtech Pvt. Ltd. as reproduced above. Also, the account of True Value Contractors Pvt. Ltd Operated in the name of Jaffa Contractors Pvt. Ltd which was submitted by the assessee himself vide letter dated 15/12/2016 has already been proved to be false as mentioned in para 5.4. above. Therefore, the statement given by the assessee is fake and clearly shows the malafide intention of the assessee. 5.9 Further, the agreement to sell (reproduced below) submitted by the assessee with respect to sale of plot no. 5, Road H-9 in the residential colony known as DLF Qutab Enclave Complex, Distt. Gurgaon, submitted by the assessee vide letter dated 26/12/2016 between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is evident from the bank statement of the assessee furnished by the assessee. Therefore, even the accounting has not been done in the books of accounts. The account of drawings is reproduced as below: In view of the above, the claim of the assessee with regard to the advance money received to the tune of ₹ 1,80,00,0/00/- is a concocted one and the assessee has failed to discharge the onus of explanation for the same. Hence, the amount of ₹ 18,00,00,000/- is being added back to the total taxable income of the assessee on the grounds of unexplained income. Penalty proceeding U/s 271(l)(c) of I. T. Act are being initiated for furnishing inaccurate particulars of his income. Discussion Decision The facts of the case, the submissions of the AR and the finding of the AO were examined. The brief facts of the case are that during the year under consideration the appellant signed an agreement with one True value Contractors (P) ltd (now Jaffna contractors) for sale of Plot No 5, Road H-9 in the residential colony- DLF Qutub Enclave, Distt. Gurgaon for an amount of ₹ 9 crore. The appellant received ₹ 1.80 crore as earnest/advance money as detailed in clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are: c) Certificate issued by the SBI. d) Statement of the account of the assessee. 5. While making addition of ₹ 1,80,00,000/- as it was mentioned in the Assessment order assessee was not able to prove the genuineness of the transaction with M/s True Value Contractors Pvt. Ltd./Jafffa Contractors Pvt. Ltd. Also the bank account/details provided by the assessee for the M/s True Value Contractors Pvt. Ltd./Jafffa Contractors Pvt. Ltd. i.e. 913020032425869 was found wrong and the same was found to be the A/c of M/s Excel Buildtech Pvt. Ltd. 6. Also the agreement to sell submitted by the assessee with respect of the sale of the property was without any legal stamp paper, which raised doubt on the veracity of the claim of the assessee. Also the assessee had not credited the asset account or the capital asset account with the amount of the forfeiture of the advance; instead the assessee has shown the same in his drawings account. 7. Now assessee is submitting the Certificate issued by the SBI and his Statement of the account, but still the same are not acceptable as these submissions arc readily available with the bank and could have been submitted during the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred to the capital account of CP Chawla. Copy of Axis bank Account of True Value Contractors (P) ltd showing a debit of ₹ 1.80 crore (Ref Page 13 of assessment order) Regarding the information obtained by the AO from the Manager Axis bank, the appellant stated that it was information of the wrong bank account. Further, this fact was confronted only on 28.12.2016 and the appellant was required to rebut it by 30.12.2016. This could not be done on account of paucity of time and was therefore filed as additional evidence during the appellate proceedings. The additional evidence was examined. It is noted that the SBI has certified the receipt of ₹ 1.80 crores in the SBI account of the appellant. A scanned copy of the certificate is detailed as under (overleaf): The SBI has also given a detailed certificate of the transaction with a detailed narration which very clearly states that the amounts have emanated from the bank account of True Value Contractors (P) Ltd. A scanned copy of the certificate is reproduced as under (overleaf): From a perusal of the above certificate of SBI, it is apparent that the AO fell into error in holding that the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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