ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, ALWAR vs. SHRI BALBIR SINGH, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES “B”, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 669/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2014-15 cuke A.C.I.T., Balbir Singh, Vs. Circle-2, A-88, BSNL Exchange, Behror, Alwar. Distt.- Alwar (Raj). LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AUQPS 2392 R vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by : Shri A.S. Nehra (JCIT) fu/kZkfjrh dh vksj ls@ Assessee by : Shri Siddartha Ranka & Ms. Pallavi Bhargava (Adv) lquokbZ dh rkjh[k@ Date of Hearing: 30/10/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 20/12/2018 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M.:

This appeal by the revenue is directed against the order dated

07/03/2018 of ld. CIT(A), Alwar for the A.Y. 2014-15. The revenue has

raised following grounds of appeal: “1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in deleting the penalty U/s 271D of the Act Rs. 1,00,00,000/- imposed by the JCIT for violation of provision of Section 269SS of the It Act, 1961.” That the appellant craves leave to add, amend or alter the grounds of appeal on or before the date of appeal is finally heard for disposal.” 2. The assessee is an individual and engaged in the business of hotel

and agricultural activities. The assessee e-filed his return of income on

2 ITA No. 669/JP/2018 ACIT vs. Balbir Singh

29/3/2015 declaring total income of Rs. 73,76,400/-. While completing

the assessment U/s 143(3) of the Income Tax Act, 1961 (in short the

Act) on 19/12/2016, the Assessing Officer assessed the total income of

Rs. 1,58,32,530/-. While passing the scrutiny assessment, the Assessing

Officer initiated the penalty proceedings U/s 271D of the Act in respect of

the cash loan of Rs. 1.00 crore taken by the assessee from Smt. Maya

Devi in contravention of provisions of Section 269SS of the Act.

Subsequently a notice U/s 271 of the Act was issued to the assessee on

25/1/2017 proposing levy of penalty U/s 271D of the Act. The assessee

explained that the amount of Rs. 1.00 crore received from Smt. Maya

Devi was not a loan but it was an advance against the sale of land vide

agreement dated 12/12/2012. The Assessing Officer examined the

alleged agreement and held that this is an afterthought prepared

document on a old stamp paper and nothing but an attempt to create

evidence that the transaction is for sale of property and not as a loan

taken in cash. Consequently, the Assessing Officer levied the penalty of

Rs. 1.00 crore U/s 271D of the Act vide order dated 17/5/2017.

and reiterated the contention that the amount in question was received

as an advance for sale of property to Smt. Maya Devi, subsequently due

to the financial crisis, the purchaser could not make the balance payment

3 ITA No. 669/JP/2018 ACIT vs. Balbir Singh

and therefore, the transaction could not ne materialized, accordingly, the

ld. CIT(A) has deleted the penalty levied U/s 271D of the Act.

was stated to have been executed on 20/6/2013 whereas the payments

were made on 11/4/2013, 22/4/2013 and finally Rs. 10.00 lacs on

20/6/2013, therefore, in absence of any other record regarding the

payments made prior to the agreement, it cannot be accepted that these

payments were made only as advance for sale of property. The assessee

has prepared this document which is an afterthought to give a colour to

the transaction of loan as advance against the property. This fact is also

supported by the development that the transaction of sale of property

never materialized and even the assessee has not claim to have repaid

the said amount rather the assessee has claimed that since the

purchaser has not paid the balance amount of sale consideration,

therefore, the assessee forfeited the said amount of Rs. 1.00 crore. Even

otherwise, the advance received by the assessee falls under the

definition of loan or deposits as per the explanation to Section 269SS of

the Act. The ld DR has further pointed out that though the agreement in

question was claimed to have been executed on 12/12/2012, however,

the same was notarized on 20/6/2013 which shows that this agreement

was prepared subsequently by using old stamp paper to give the colour

4 ITA No. 669/JP/2018 ACIT vs. Balbir Singh

of sale of the property. Thus, he has relied upon the order of the

Assessing Officer.

the assessee has taken Rs. 1.00 crore as advance against the sale of

agricultural land from Smt. Maya Devi, the amount was received on

various dates from 11/4/2013 to 20/6/2013. The agreement to sell was

executed and notarized on 20/6/2013. As per the agreement, the time

was given up to 31/5/2015 for execution of sale deed and payment of

the balance amount. Smt. Maya Devi could not make the balance

payment and due to the mutual relation, the assessee extended time till

23/12/2016 and thereafter till 20/4/2017. Smt. Maya Devi has accepted

and confirmed the transaction of giving advance for purchase of the land

in the statement recorded U/s 131 of the Act. The assessee attended the

office of the Sub-Registrar, Behror on 21/4/2017 and deposited Rs. 50/-

against his attendance for the purpose of registration of sale deed. Since

the purchaser did not turn-up and has not paid the balance amount,

therefore, the assessee forfeited the amount of Rs. 1.00 crore. The ld AR

further pointed out that Smt. Maya Devi has filed a civil suit against the

assessee before the Additional District & Sessions Judge, Behror for

getting the sale deed executed as per the agreement. The suit is still

pending before the Court. Thus, the present transaction is not loan or

5 ITA No. 669/JP/2018 ACIT vs. Balbir Singh

deposit but it was an advance received for sale of the property and

therefore, does not fall in the ambit of provision of Section 269SS of the

Act. The ld AR has further submitted that explanation to Section 269SS

of the Act has been inserted w.e.f. 01/6/2015 and therefore, the same is

not applicable for the assessment year under consideration. He has

supported the order of the ld. CIT(A).

available on the record. The Assessing Officer has observed that the

amount of Rs. 1.00 crore received by the assessee from Smt. Maya Devi

was a loan and the alleged agreement produced by the assessee is

nothing but an afterthought attempting to create an evidence to give the

colour of the transaction of loan as advance against the sale of the

property. Thus, the Assessing Officer has treated the said amount as

loan in contravention of the provisions of Section 269SS of the Act and

consequently imposed the penalty U/s 271D of the Act. The ld. CIT(A)

has accepted the transaction as advance received against the sale of

property by accepting the agreement to sell notarized on 20/6/2013.

Except the agreement in question which is claimed to have been

notarized and not a registered agreement there is no other document in

support of the claim that the amount was received as an advance against

the sale of property. The only evidence which can be independently

6 ITA No. 669/JP/2018 ACIT vs. Balbir Singh

verified is the receipt of payment of Rs. 50/- in the office of the Sub-

Registrar, Behror on 21/4/2017. The said receipt was subsequent to the

assessment order as well as the show cause notice issued U/s 271D of

the Act on 25/1/2017, therefore, prior to the show cause notice U/s

15/1/2017, there was no document which can independently verified the

existence of this claim though the assessee has produced this agreement

dated 20/6/2013. It is pertinent to note that if the assessee is having/

holding the land in question i.e. khasra No. 24 measuring 1.11 hectare

situated at village Dhodhakari, Tehsil-Neemrana, Alwar then in absence

of any contrary record, the explanation of the assessee that the said

amount was received as an advance against the sale of the land, cannot

be rejected. However, neither the Assessing Officer nor the ld. CIT(A)

has examined whether the assessee owned this land in question which is

subject matter of the transaction. Even the assessee did not produce any

record about the ownership of the said land in question, therefore, to

give the concluding finding on the matter, it is necessary to verify the

fact that the land in question is owned by the assessee and free from all

encumbrances so it can be freely transferred. Accordingly for the limited

purpose we set aside this issue to the record of the Assessing Officer to

conduct a necessary enquiry in respect of the status and ownership of

the land in question as on the date of the alleged agreement. In case,

7 ITA No. 669/JP/2018 ACIT vs. Balbir Singh the land in question is found to be owned by the assessee then the claim of the assessee shall be accepted and no penalty can be levied.

Order pronounced in the open court on 20th December, 2018.

Sd/- Sd/- ¼foØe flag ;kno½ ¼fot; iky jko½ (VIKRAM SINGH YADAV) (VIJAY PAL RAO) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 20th December, 2018 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- The A.C.I.T., Circle-2, Alwar. 2. izR;FkhZ@ The Respondent- Shri Balbir Singh, Alwar. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण]जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA No. 669/JP/2018) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत