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TMI Blog2023 (8) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 10 Lacs on account of agricultural income and disallowance u/s 37(1) for Rs. 8.16 Lacs is without jurisdiction. The additional ground no.1 has not been pressed before us. 2. The Ld. AR advanced arguments and submitted that the terms of the agreement which form the basis of impugned addition of Rs. 200 Lacs were not acted upon. For the same, Ld. AR drew out attention to various documents as placed in the paper-book. The Ld. CIT-DR, on the other hands, submitted that the additions are based on incriminating material found during the course of search operations. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. The assessee being resident individual is stated to be engaged in road transportation. Assessment Proceedings 3.1 From the case records, it emerges that a search and seizure operation u/s. 132 of the Act was conducted in the case of Shri Danda Brahmanandam and Shri Javvaji Ramanjaneyulu on 21.02.2019. During those proceedings, the assessee was also subjected to search proceedings and consequently, an assessment was framed u/s. 143(3) r.w.s 153C of the Act wherein impugned additions were made and the same is under ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement deed of Mrs. Pardwaz who is stated to be the sister of Mrs. Daulat Beagum who cheated the assessee in the transaction. The statement of the assessee was again recorded during the course of assessment proceedings on 04.02.2021 wherein the aforesaid facts were reiterated. The Ld. AO held that it was very much evident that the assessee gave advance for purchase of property. The sale consideration was Rs. 420 Lacs out of which the assessee paid advance of Rs. 200 Lacs on the date of agreement and balance Rs. 220 Lacs was agreed to be paid on the day of registration. 3.4 The loose sheets at page nos.230 to 236 were the copy of complaint filed by the assessee on 02.03.2020 before police authorities. In the complaint, it was stated by the assessee that he paid advance of Rs. 200 Lacs for purchase of said property. The Ld. AO held that the assessee did not produce any evidence that the advance of Rs. 5 Lacs only was paid and not Rs. 200 Lacs. The assessee failed to produce evidence for his claim of advancing Rs. 5 Lacs only. The loose sheets also contained promissory note signed by Shri A.M. Jinna along with his wife and son in favor of the assessee. It reads as pledging document n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Based on the advice of some of police friends, the assessee prepared this agreement himself for the purpose of filing an FIR with the police. In order to secure the investment of Rs. 5 Lacs, the assessee took settlement deed executed by Mrs. Pardwaz who is the sister of Mrs. Dhoulat Begum who cheated the assessee in this transaction. The assessee reiterated that he paid only Rs. 5 Lacs and not Rs. 200 Lacs as alleged by Ld. AO. 4.2 The assessee also submitted that since Mrs. Dhoulat Begum was not the legal owner of the aforesaid plots, the sale deed could not be executed and therefore, he had requested for refund of the aforesaid advance amount. Finally, cancellation deed was executed on 01.03.2016 and advance of Rs. 5 Lacs was recovered from alleged seller's sister. 4.3 However, not convinced, Ld. CIT(A) held that the addition was based on seized material. The assessee failed to prove that it advance only Rs. 5 Lacs and therefore, impugned addition of Rs. 200 Lacs was confirmed. 4.4 Regarding agricultural income, Ld. CIT(A) held that the assessee obtained agricultural land only through settlement deed. Once the settlement deed is executed, the assessee becomes individual owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, the assessee obtained pledge of title deed. It could also be seen that the conclusion of Ld. AO is based merely only on this sale agreement and the complaint filed with the Police Authorities for recovery of advance amount of Rs. 200 Lacs. However, the complaint to Police Authorities has not yielded any result and finally, no FIR has been lodged. Further, there is no concrete evidence on record to suggest that the assessee paid said alleged sum of Rs. 200 Lacs at agreement stage itself. It is also inconceivable that the assessee would part with approx. 48% of sale consideration at agreement stage itself when the sale transaction was to be completed within 6 months from the date of the agreement. 6. It could further be seen that no independent enquiry has been conducted by Ld. AO from any of the parties to establish the flow of fund to the extent of Rs. 200 Lacs. The assessee's case is further substantiated by the fact that the assessee entered into cancellation agreement on 01.03.2016 with the sister of the alleged seller. As per the terms of this agreement, the assessee was to receive back the said advance amount of Rs. 5 Lacs. The same lend credence to the submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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