9911796707
TMI Blog2025 (3) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... that unregistered document [MoU] is not enforceable contract. And as noted, the AO has not been able to rebut the onus which shifted on him after the MoU was presented before him and the payer/purchaser has confirmed the transfer of Rs 2 Crs online to assessee's account.
Having said so, we also agree with the Ld.CIT(A) that the addition u/s.68 of the Act was not warranted because the identity of the credit is not disputed [i.e. Shri Ramajayam Rangasamy]; and the nature of the transaction has been shown as advance for the purchase of scheduled property owned by the assessee.
Section 68 addition could have been made only if assessee failed to prove the identity, creditworthiness and genuineness of the transaction. In this case, even if the statement of assessee recorded during the search is accepted, then it is loan from Shri Ramajayam Rangasamy; and if the statement of transferee of the credit is taken, then it is 'advance' of the sale consideration given to assessee; in both scenario, there is no element of income embedded in either transaction. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... r a search action was carried out u/s.132 of the Act on 21.09.2019 at the residential premise of the assessee. During the course of search proceedings, they came across, the statement of bank-account of assessee, which showed that assessee got Rs. 2 Cr. through online transfer from the bank account of Shri Ramajayam Rangasamy of M/s G Square Group [through online on 21.12.2018], and when asked by the search team to explain about this credit in his account, assessee stated it to be interest free loan from Shri Ramajayam Rangasamy; and, when Shri Ramajayam Rangasamy was confronted on 19.09.2019 with this explanation/transaction, he is noted to have stated it to be an advance for purchase of the property handled by the assessee, but in this regard, the AO noted that Shri Ramajayam Rangasamy didn't divulge the details of the property for which the purported advance of Rs. 2 Crs. was given to the assessee. Thus, according to the AO, there was per se contradiction in the statement given by the assessee as well as Shri Ramajayam Rangasamy in respect of the nature of the online transaction of Rs. 2 Crs; but the AO acknowledges in this context that the assessee filed an MoU dated 21.12.2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yam Rangasamy. Later, Shri Ramajayam Rangasamy was confronted on 19.09.2019 about the transfer of Rs. 2 Cr. to assessee and he explained it to be advance for purchase of property, and in support of the same, presented an MoU dated 21.12.2018 wherein at Para No.2, there was averment evidencing payment of Rs. 2 Crs. on the same day [i.e. 21.12.2018] through RTGS to the assessee as advance for purchase of property that was owned by the assessee at Eruvakkam Village [details of which is given in the schedule therein]. However, the AO disbelieved the explanation given by Shri Ramajayam Rangasamy as well as the veracity of the MoU dated 21.12.2018, since there was contradiction in the statement given by the assessee during the course of search on 31.01.2019 and further, he noted that in the MoU, there was averments stipulating the time period of three years for completion of the execution of the sale, but there was no evidence showing the execution of the sale of the said property referred to in MoU. Therefore, he added Rs. 2 Crs. u/s.68 of the Act. On appeal, the Ld.CIT(A) has deleted the addition having found that the assessee has received on 21.12.2018 Rs. 2 Crs through online/bank tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any default on his part. As long as there is no cessation, irrespective of the nature of receipt being loan or advance, the same cannot be treated as income of the appellant. Therefore, in the light of the above discussion, the AO is directed to delete the addition of Rs. 2 crores made u/s 68. 9. We do countenance the impugned action of the Ld CIT(A) and find that that assessee had received on 21.12.2018 Rs. 2 Crs through RTGS/online from the account of Shri Ramajayam Rangaswamy, and when asked during search on 29.01.2019, assessee had explained it to be interest-free loan from Shri Ramajayam Rangaswamy, but when asked, Shri Ramajayam Rangaswamy though confirmed the transaction had stated it to be advance given to assessee for purchase of a property [owned by assessee] and in order to corroborate it filed MoU dated 21.12.2018, which evidenced the existence of an agreement for purchase of land and advance payment of Rs 2 crs on the same day to assessee. The AO disbelieved the MoU as an afterthought and an accommodation-deed. In this regard, it is noted that MoU dated 21.12.2018 was executed on stamp paper, a perusal of which revealed that the stamp-paper has been purchased on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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