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TMI Blog2024 (6) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. V.K. Sasikala, we find that she has denied having entered into any kind of MoU and also payment of advance in cash. The facts are totally contradictory. We further came to know that the department has completed assessments of alleged buyer Smt. V.K. Sasikala and also made additions towards advance claimed to have paid by her as per MoU, for purchase of property as unexplained money. The Assessing Officer, has also made additions in the hands of the appellants towards additions as forfeiture of money. There is no concept of deemed forfeiture of advance as per sub clause (ix) of section 56(2) of the Act, because if you go by said provisions, it is very clear that sum can be assessed u/s. 56(2)(ix) of the Act, in a case where any sum of money received as advance or otherwise in the course of negotiation for transfer of a capital asset, if, (a) such sum of forfeited and (b) the negotiations do no result in transfer of said capital asset. If you go by the arguments of the Ld. Counsel for the assesse s, two conditions prescribed u/s. 56(2)(ix) of the Act are not satisfied. Further, they claimed that even now they are ready to transfer of property in favour of the buyer. From the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals)-19, Chennai, all even dated 23.03.2022 and pertains to assessment years 2013-14, 2014-15, 2015-16, 2016-17, 2017-18 2018-19. Since, facts are identical and issues are common and interlinked to each other, for the sake of convenience, these cross appeals filed by the assessees and as well as the revenue are being heard together and are disposed off, by this consolidated order. 2. In this bunch of 34 appeals, mainly there are two groups. The first group of cases consists of M/s. Pondicherry Sri Lakshmi Jewellery, a partnership firm and their directors and associates and second group of cases consisting of M/s. Senthil Paper and Boards Pvt Ltd and their directors and associates. The assessees and as well as the revenue have taken various grounds, on additions made by the Assessing Officer and sustained by the ld. CIT(A) and additions deleted by the ld. CIT(A) in their appellate order. Since, we are disposing off these bunch of 34 appeals by way of a common order, we deem it not necessary to reproduce grounds of appeal raised by individual assessee s and grounds of appeal raised by the revenue in their appeals filed against the order of the ld. CIT(A) for all assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance in cash and balance amount of Rs. 20 crores towards equity share capital and premium to be paid at the time of transfer of shares. Further, Mr. Naveen Balaji, had also explained how he has appropriated sum of Rs. 148 crores received from the alleged buyer of the property and deposited into bank account of his partnership firm. Similarly, a MoU between M/s. Senthil Paper and Boards Pvt Ltd and unknown buyer was also entered into on 22.11.2016 for purchase of assets including paper mill running business, 15MV co-generation power plant, 89.82 acres of land along with building for a consideration of Rs. 599 crores and received Rs. 400 crores advance in cash in specified bank notes. Once again, Mr. S. Senthil, Advocate confirmed the transactions including the MoU between the company and its directors and Smt. V.K. Sasikala and also payment of Rs. 400 crores advance in cash in specified bank notes. A sworn statement u/s. 132 of the Act, was recorded from Smt. V.K. Sasikala, as claimed by the Ld. Counsel for the assessees and as well as Ld. DR and according to the contents of sworn statement (which was not available for us to go through the contents) Smt. V.K. Sasikala denied havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9A of the Act, in the hands of the directors, which is offshoot at transactions of advance received by the companies and directors for sale of assets. Further, in the group case of M/s. Pondicherry Sri Lakshmi Jewellery, the Assessing Officer after considering the arguments of the assessee opined that, out of Rs. 148 crores advance received in cash towards transfer of equity shares of M/s. Bonjour Bonheur Pvt Ltd, they have deposited 97.5 crores into bank account of M/s. Pondicherry Sri Lakshmi Jewellery and accordingly, the Assessing Officer made additions of Rs. 92.78 crores u/s. 68 of the Act, in the hands of partnership firm. 5. Being aggrieved by the assessment orders, the assessees have filed appeals before the ld. CIT(A) and challenged the additions made by the Assessing Officer towards for feature of advance u/s. 56(2)(ix) of the Act, under the head income from other source . The assessees have also challenged various other additions made by the Assessing Officer. The ld. CIT(A), after considering relevant submissions of the assessees and also taken note of relevant facts, has confirmed additions made by the Assessing Officer in the hands of the directors of M/s. Bonjour Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals filed by her and their associates are pending before the ld. CIT(A). Since, the appellants claimed to have received advance in cash and the other party denies having paid any advance, these appeals needs to be heard together at the level of first appellate authority. Therefore, he submitted that these appeals may be set aside to the file of the ld. CIT(A), with a direction to the first appellate authority to decide these appeals along with connected appeals of alleged buyer of the property and their associates. 7. The Ld. Counsel for the assessee of M/s. Senthil Paper and Boards Pvt Ltd, Shri. S. Sridhar, Advocate, submitted that there is no dispute with regard to MoU between the company and their directors and unknown buyer, for sale of property for a consideration of Rs. 599 crores and receipt of sum of Rs. 400 crores advance in cash in specified bank notes during demonetization period. But fact remains that, if you go through the MoU between the company and the buyer, it is for the purpose of transfer of a business as whole like slump sale. Further, advance money has been received by the company. Therefore, the same needs to be considered in the hands of M/s. Senthil Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards transfer of property because of failed negotiation. The ld. DR, further submitted that the additions made in the hands of Smt. V.K. Sasikala and pending appeals before the first appellate authority is although having bearing on these appeals, but these appeals can be independently decided. Therefore, he submitted that there is no need to set aside these appeals to the file of the ld. CIT(A) and may be decided in accordance with law. 10. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The undisputed facts as culled out from the orders of the authorities below are that, a search and seizure operation u/s. 132 of the Act was carried out on various groups on 09.11.2017. During the course of search in the hands of M/s. Pondicherry Sri Lakshmi Jewellery on 09.11.2017 and M/s. Senthil Paper and Boards Pvt Ltd on 09.11.2017, incriminating documents in the form of MoU and share certificate evidencing the sale of various assets of prominent business group across Tamil Nadu were found. On perusal of MoU dated 22.11.2016, between M/s. Bonjour Bonheur Pvt Ltd and its directors with unknown buyer (the buyer name is kep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for purchase of assets and also denied having paid any advance in cash in specified bank notes during demonetization period. The Assessing Officer, has made additions towards advance received by the appellants as forfeiture of advance in the course of negotiation for transfer of capital asset and same is forfeited for failed negotiation and thus, opined that advance received by the appellant is taxable u/s. 56(2)(ix) of the Act. It was the contention of the appellants that the negotiation were not failed and further, even now they are ready to execute sale deed in favour of the buyer, provided the documents including share certificate seized by the department is given to the appellants. If you go by the arguments of the Ld. Counsel for the assesses, he claims that the negotiation was never failed and it is still alive and they are ready to transfer the properties in favour of the buyer. At the same time, from the arguments from both the parties, in light of statement recorded from Smt. V.K. Sasikala, we find that she has denied having entered into any kind of MoU and also payment of advance in cash. The facts are totally contradictory. We further came to know that the department h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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