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TMI Blog2022 (7) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... d have examined this aspect and should have taxed the income as capital gains in the hands of the assessee instead of treating it as unexplained investment U/s. 68. In view of the above findings, we find no infirmity in the order of the Ld. CIT(A) and we hereby direct the Assessing Officer to examine the aspect of treating the sale of shares as capital gains in the hands of the assessee. Needless to say the assessee has to be provided with one more opportunity before passing any order in accordance with law by the Ld. AO. Advances received from the sale of flats - AR submission that the project has been taken over by M/s. Aishwarya Constructions wherein the assessee is a Managing Partner and has received advances which are to be adjusted by M/s. Aishwarya Constructions as the original project supposed to be constructed by Sthira Infra Projects Pvt. Ltd, could not be executed due to pending litigation. The assessee has also submitted that since the advances paid by the prospective buyers has been taken by the assessee in its personal concern the CIT(A) has rightly directed the AO to delete the addition received as advanced from the prospective buyers. However the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd has been declared by the company to its members. We are of the considered view that the issue of bonus shares cannot partake the character of the dividend in the hands of the assessee. CIT(A) has rightly appreciated these facts and we therefore find no infirmity in the order of the Ld. CIT(A) and this ground raised by the Revenue is dismissed. Disallowing the agricultural income - HELD THAT:- We find that the Ld. AR failed to produce any evidences regarding the sale of Mangoes from the said agricultural land of the assessee. In the absence of any supporting evidences regarding quantity of the Mangoes sold and expenses incurred in earning of such agricultural income, the Ld. AO has rightly disallowed the agricultural income and treated it as income from other sources. In view of the above, we find no infirmity in the order of the Ld. AO and we uphold the order of the AO on this ground and accordingly Ground raised by the Revenue is allowed. - I.T.A. Nos.71 And 72/Viz/2021 And CO No.46 And 47/Viz/2021 In I.T.A. No. 71 And 72/Viz/2021 - - - Dated:- 21-7-2022 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT(A) ignored the material facts like non-execution of the sale deeds due to a legal issue or for other reasons while no other supporting documents, including any confirmation letters, from the customers were furnished. Grounds No. 3 4 in AY 2013-14 3. The Ld. CIT(A)-1, Visakhapatna, is not justified in deleting the addition made by treating the advances to the extent of Rs. 48,08,000/- as unexplained cash credits U/s. 68 of the Act. The Ld. CIT(A) ignored the material facts like non-transfer of the shares even after 8 years from the date of receiving the advances towards sale of shares. 4. The Ld. CIT(A)-1, Visakhapatnam is erred in deleting the addition made by treating the advances to the extent of Rs. 45,08,000/- as unexplained cash credits U/s. 68 of the Act. The Ld. CIT(A) ignored the material facts like non-execution of sale deeds due to a legal issue or for other reasons while no other supporting documents including any confirmation letters from the consumers were furnished. 4. The first issue with respect to the ground raised by the Revenue is addition of Rs. 338 lakhs for the AY 2012-13 and Rs. 48 lakhs for the AY 2013-14 being the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the gas supply to M/s. Chiraditya Power Private Limited was cancelled by ONGC. In view of this, after negotiations, the final consideration by the parties was agreed to the extent of advance payment made by the prospective buyers of the company as full and final settlement for the transfer of the entire 3.2 MW Gas Based Mini Power Plant by way of sale of shares. It is also admitted that the company is not ACTIVE compliant company as per the Companies Act, 2013 due to the fact that it has not filed statutory returns as prescribed under the Act. The Ld. AR submitted that the transfer of shares of the company is between the individuals and not between the companies ie., M/s. Chiraditya Power Private Limited and the prospective buyer. It is also admitted that Mr. Santosh Varalwar and Mr. D. Saibaba who are prospective buyers of the company as per the MoU has paid Rs. 3.86 Crs through their Asoociated Etntities and group companies as detailed in 4.2.4 of the order of the Ld. CIT(A). It is also not disputed that the identity of the investors namely Mr. Santosh Varalwar and Mr. D. Saibaba and their creditworthiness has been filed before the AO along with the PAN details of the prosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Needless to say the assessee has to be provided with one more opportunity before passing any order in accordance with law by the Ld. AO. 7. With respect to the advances received for the AY 2012-13, from the sale of flats, the confirmation from the prospective buyers were made before the Ld. CIT(A) by the Ld. AR of the assessee. The Ld. CIT(A) remanded the matter to the Ld. AO for verification of the documents and called for the remand report from the AO. The AO submitted his remand report. After considering the evidences adduced by the Ld. AR, the Ld.AO treated the amount of Rs.57,95,500/- as unexplained cash credits. It is noted from the remand report of the ld. AO that the assessee has refunded an amount of Rs. 26 lakhs as on 31/3/2014 as the assessee could not execute the project due to litigation. The Ld. AR also produced a letter as given in paper book page 121 wherein the Joint Sub-Registrar-1, Vizianagaram has refused to register the documents considering the land as LCC land as per the Revenue Records. Further, it is also noted from the submissions made by the Ld.AR, a Writ Petition has been filed before the Hon ble High Court which is still pending before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red during the FY 2011-12 for a sum of Rs. 9,81,100/- has been taken to the capital account. The Ld. AR further submitted that the assessee later decided to sell the flat and the flat was sold in the FY 2012-13 for Rs. 38,18,000/- which has been accounted as a turnover in the relevant assessment year. Accordingly, the Ld. AR pleaded that this addition may please be deleted. The Ld. DR on the other hand supported the order of the Ld. AO. 11. We have perused the materials available on record and heard both the sides. We find from the submissions made by the Ld. AR vide the copy of the ledger account has been extracted by the Ld. CIT(A) in para 4.1 of the order, the assessee has reversed the transaction and sold the Flat No.501 and has accounted it as a turnover in the P L Account for the relevant AY. The Ld. CIT(A) has rightly considered the facts and directed the Assessing Officer to delete the addition. In view of the findings that the assessee has sold the flat and offered it as assessable for the AY 2013-14, we find no infirmity in the order of the Ld. CIT(A) and therefore this ground raised by the Revenue is dismissed. 12. Grounds No.1 and 5 raised by the Revenue in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. Per contra, the Ld. AR argued that the assessee has received only bonus shares and no income has been credited to the books of account of the assessee. In order to match with the investments the assessee has increased the cost of investment by crediting the capital account of the assessee in the books of account. Further, it is noted that Akash Engineering and Tech Pte Ltd, Singapore is not a domestic company and provisions of section 115(O) of the Act are not applicable to the said transaction. We also find from the page 59 of the paper book that Akash Engineering and Tech Pte Ltd have confirmed issue of 1,25,000 bonus shares to the assessee during the year 2012 and also has stated that no dividend has been declared by the company to its members. We are of the considered view that the issue of bonus shares cannot partake the character of the dividend in the hands of the assessee. The Ld. CIT(A) has rightly appreciated these facts and we therefore find no infirmity in the order of the Ld. CIT(A) and this ground raised by the Revenue is dismissed. 18. Ground No.6 of ITA No.72/Viz/2021 (AY 2013-14) Ground No.6: The Ld. CIT(A) is not justified in deleting the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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