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TMI Blog2023 (9) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no clinching evidence to show that the transaction under loan agreement was taken to its logical conclusion, it cannot be presumed that cash component was received by the assessee. In the event of the loan agreement, reaching its logical conclusion, even then, the assessee cannot be fastened with any liability, because as the document reads as it is, such transaction does not pertain to the assessee at all. It, therefore, appears that because the assessee appropriated Rs. 80 lakhs in its books of accounts, the transaction entered by the Shri Uttam Kumar Reddy is taken to have been continued. As rightly contended by the counsel for the assessee, it does not mean that the loan agreement continued into the purchase of flat. We do not know the basis for the AO to conclude that such cash component under the agreement of loan had become income of Shri Uttam Kumar Reddy during the financial year 2017-18. In such an event it destroys the case of the Revenue that the same amount had become the income of the assessee for the financial year 2016-17. AO does not determine in which year such cash was paid and if so, whether the entire receipt becomes income in that particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not agree with the submissions made by the assessee and holding that Shri Uttam Kumar Reddy acted as a representative of the assessee and the very fact that the sum said to have been received by him under the loan agreement was adjusted by the assessee in their books clearly shows that Shri Uttam Kumar Reddy did not act in his individual capacity, but he was only a representative of the assessee. Learned Assessing Officer, derived strength to his opinion from the fact that the requisite stamp paper for drafting the loan agreement was purchased in the name of the assessee. Learned Assessing Officer, accordingly added the said amount of Rs. 20 lakhs to the income of the assessee under section 68, 69, 69A and 69C read with section 115BBE of the Income Tax Act, 1961 (for short the Act ). 5. Assessee preferred appeal before the learned CIT(A). It could be seen from the impugned order that the assessee pressed into service the documents that were adduced before the learned Assessing Officer and further stated that the amounts from the creditors were directly credited to the assessee s account which shows that insofar as the transaction of sale of flats and adjusting Rs. 80 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties and which does not speak of the name of the assessee when it was prepared. It is only subsequently through said banking channels, the prospective purchasers of flats remitted the amounts to the assessee which were adjusted by the assessee in their books and the cash component of Rs. 20 lakhs never reached the assessee. 8. Learned AR further submits that when the document was prepared, the parties were agreeing on the terms of payment including cash component, but subsequently, coming to know all the consequences of any payment in cash of any amount more than the threshold limit, the parties have given up the idea of acting upon the alleged document and they directly remitted the amounts through banking channels, giving up the idea of any payment through cash. That is the reason why the agreement of loan was not signed by the alleged borrower and such a document was given a clean quietus and never thought of acting upon. 9. Learned DR placed heavy reliance on the contents of the document to show that a total amount of Rs. 1 crore was transferring under the said document and it is only an after thought that the amount received under the banking channels was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y shows that the parties of this document were not acted upon at all. If the transaction under this document was entered into by Shri Uttam Kumar Reddy, such a thing would have clearly been mentioned in the document itself. The entire agreement of loan does not speak of such amount being paid as advance for purchase of flat or such amounts to be adjusted subsequently. What all it speaks that the borrower desires to deposit agreement of sale dated 29/09/2016 with the creditors towards security. When Shri Uttam Kumar Reddy does not enter into the transaction without specifically mentioning that he was doing so on behalf of the assessee, such a transaction will not bind the assessee at all. Viewing these facts in gist positions to each other, it clearly establishes that though there was an attempt to enter into a particular transaction under this document, such a transaction was not taken to its logical conclusion. It further shows that the transaction of loan was abundant and another transaction of advancing the amounts towards sale consideration of the flat was taken up and the amounts paid through the banking channels were adjusted accordingly by making relevant entries in the book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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