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TMI Blog2023 (1) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... a clear finding while deleting the additions. We therefore see no reason to interfere with the order of the CIT(A) with regard to this issue. Addition on account of loans taken from the Director Shri. C. C. Thampi on the ground that the source is not properly explained - AO has made the addition on the ground that the assessee had not furnish the relevant details to substantiate the source - HELD THAT:- AO has not considered the submissions of the assessee that all contributions are made through proper banking channel as a foreign remittance from abroad and that Mr.Thampi is working abroad for last 30 years having involved in many business ventures in middle east. We notice that the assessee had submitted the annual reports of various entities in which Mr.Thampi is involved and the AO has rejected these on the ground that the annual reports pertain year ended 31.03.2012 and cannot considered for contributions made during 2007. AO has also alleged that the assessee is producing irrelevant details to divert the issue. We are unable to appreciate this stand of the AO for the reason that the assessee has submitted evidences in the form of bank statements where the entries of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asons pointed out by the CIT(A) for rejection of the relevant entry in the seized material are in fact without basis. The CIT(A) has mentioned that the relevant entry in the seized book refers to payment of Rs. 2.2 crores by cheque from the account of Kent Constructions. No such inference can be drawn from the concerned entry nor has Assessing Officer made such finding of any cheque payment in the assessment order. The decision of CIT(A) is therefore not based on any relevant material. 6. The CIT(A) has pointed out that there was a delay of six months between the payment of on-money as per the seized material and the date of the sale deed. The CIT(A) finds it improbable. The CIT(A) has overlooked that Sri.CC. Thampy the promoter of the assessee company, had a long standing business relationship with M/s. Kent Constructions (P) Ltd. stretching over several years. Hence delay in payment is perfectly reasonable and should not be held against the department and should not have gone by weaker presumption . 2. The assessee filed the return of income for Assessment Year 2008-09 on 29.11.2008 declaring a total income of Rs.11,14,991/-. There was a search under section 132 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness of Shri. C. C. Thampi was not properly established by the assessee. 4. Before the CIT(A), the assessee raised the legal contention that the assessment in the hands of the assessee ought to have been done u/s.153C r.w.s. 143(3) and not u/s.147. The CIT(A) accepted the contentions of the assessee with regard to this, but proceeded to adjudicate the appeal on merits also. With regard to the addition made towards capital gains the assessee submitted before the CIT(A) that the AO did not provide the alleged incriminating material to the assessee which is against the principles of natural justice. The assessee also submitted that the AO did not cross examine the assessee with respect to the seized material and there is no corroborative material evidence to prove that the material found during the course of search belongs to the assessee. The assessee relied on the following decisions in this regard (i) Mahindra B Bagdai, Rajkot vs DCIT (ITA No.1133/Ahd/2009 dated 30.06.2011) (ii) Trident Creations Pvt Ltd vs DCIT (ITANo.1078/Ahd/2009 dated 01.09.2010) 5. The CIT(A) accepted the contentions of the assessee and deleted the addition by stating that: In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be done by the seller until he has received entire sale consideration. As per this entry, the major component of sales consideration has been paid on 15.09.2008 and. therefore, the Registration should be done after that date. I have on my record, a copy of Deed of Sale relating to this land. The Deed has been signed by respective Directors of the two concerns, i.e. Shri C.C. Thampi and Shri F.M. Shamter Marickar. The Deed has been signed on 07.02.2008. At page No. 18 of this Deed, the consideration is mentioned, which is Rs.90,00,000/-. On page No.19, it is mentioned that entire sale consideration has been received. In pursuance of the said agreement and in consideration of a total sum of Rs.90,00,000/- (Rupees ninety lakhs only) paid by the purchaser to the vendqr, the receipt of which the vendor hereby admits and acknowledges the entire sale consideration thus fully satisfied .. Now, as per the alleged entry in the ledger account, the balance money has been paid on 15.09.2008, i.e. after 7 months of execution of the Sale Deed. This is ironical and contradictory. In view of these anomalies, in my opinion, the entries in the alleged ledger account are unreliable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal. 10. The learned AR submitted that the entry found in the books of Kent Constructions Pvt. Ltd., mentioning that an amount of Rs.6,29,54,600/- was paid to Shri. C. C. Thampy towards maha land cost cannot be considered as incriminating to make addition since there was no further enquiry conducted and there was no nexus established with the assessee to the entry. The learned AR submitted that the entire addition made by the AO is based on this entry whereas the assessee has submitted the actual sale deed wherein consideration paid of Rs.90 lakhs is substantiated which has been ignored by the AO. The learned AR submitted that the impugned entry found is dated 15.09.2008 whereas the actual sale took place in February, 2008, much before the date of the entry and no person would complete the transfer of an asset without receiving the consideration in full. The learned AR further submitted that there is no corroboration between the entry and the actual transaction that took place and the revenue has not brought anything on record to show that the entry has any nexus to the transaction of sale entered into by the assessee. The learned AR therefore prayed that the CIT(A) has ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the date of the entry found during the course of search. It is also noted that as per the registered sale deed the entire consideration is already been paid to the assessee. Given this, in our view the burden is now on the AO to prove that the assessee received some additional onmoney payments and considering the facts circumstances of the case we are of the view that the AO has not brought sufficient material on record against the assessee warranting the addition. The addition made by the AO is based on the assumption that Mr.Thampi has admitted transactions relating to other concerns, and therefore the impugned transaction should have taken place for what he found in the entry. This cannot be the right approach for making an addition when no other corroborative evidence is brought on record to show that the transaction happened for a higher amount and there were on-money transactions. In our view the CIT(A) has looked into the facts and circumstances of the case and has given a clear finding while deleting the additions. We therefore see no reason to interfere with the order of the CIT(A) with regard to this issue. 13. With regard to the addition made on account of loans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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