9911796707
TMI Blog2023 (1) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... other companies promoted by Shri C.C.Thampy in their dealings with M/s. Kent Constructions (P) Ltd. These companies approached the ITSC and proceedings have since become final. The CIT(A) also did not appreciate that several other businessmen who sold land to M/s. Kent Constructions (P) Ltd. admitted on money receipt and paid tax thereon on the basis of the impugned seized material. These persons include, Paul Alukkas and George Thomas of Arya Bhangy group. 4. The CIT(A) ought to have noted that adverse contents in seized material based on which addition was made was communicated to the assessee and the assessee should have given proper explanation before Assessing Officer. 5. The reasons 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies in Middle East for past many years and the source of funds are from these concerns. 3. The AO did not accept the contention on the ground that Mr.Thampi has approached the settlement commission in order to settle the discrepancies in the various transactions with Kent Constructions and therefore cannot take a different stand for this one transaction alone. Accordingly the AO and made an addition of Rs.7,59,54,600/- as shortterm capital gain in the hands of the assessee. The AO also made the addition towards the amounts borrowed from Mr.Thampi for an amount of Rs.3,44,00,000/- as unexplained credits under section 68 of the Act in the hands of the assessee on the ground that the 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, many anomalies are noticed in this entry - raising doubt about the correctness and veracity of these entries. According to this entry, Rs.2.2 Crores has been paid in cheque by M/s. Kent Constructions to the appellant and the balance amount was Rs.6,29,54,000/- which was paid to Shri C.C. Thampi in cash on 15.09.2008. Therefore, the agreement for sale of land and the registration should have been done for an amount of Rs.2.2 Crores, whereas the agreement has been done for Rs. 90 lacs only. The cash component should have been Rs.6,29,54,600/-whereas the AO has worked out the cash component at Rs.7,59,54,600/-. Normally. the registration of sale would not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany. If at all, the amount is not explained, it is not explained in the hands of Shri C.C. Thampi. Shri C.C. Thampi has been working abroad for past 30 years and the AO has not doubted this fact. In view of the facts and discussion above. in my opinion, the AO was not justified in adding the amount of loan credit, brought in the Director of the company, Shri C.C. Thampi, amounting to Rs.3,44,00,000/-, in the hands of the appellant company and the same is hereby deleted. This ground of appeal of the company is allowed accordingly." 8. Aggrieved the revenue is in appeal. 9. The ld DR reiterated the submissions made through the grounds 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.9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly substantiated by the AO. The AO while making the addition did not establish the nexus that the entry found during the course of search belongs to the assessee and how the amount mentioned therein as received by Mr.Thampi is indeed received on behalf of the assessee and not someone else. We also see merit in the argument that the assessee is not given proper opportunity to confront the allegations as the AO did not share furnish the actual details of material seized. The assessee has substantiated that the actual transaction happened for an amount of Rs.90,00,000 only by producing the sale deed which is registered much before 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 tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
