SMT. RAMA SALUJA,NEW DELHI vs. JCIT, NEW DELHI

ORDER This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-20, New Delhi dated 08.5.2015 pertaining to Assessment Year 2011-12 on the following ground:-

“1. The learned CIT (A) was not justified to dismiss the appeal and uphold the addition of Rs

28,89,000/- to the income of the appellant as per details below:-

(i) Amount received in respect of transfer of f booking rights in property No. 618-A, Spaze Towers,

Sohna Road, Gurgaon : Rs. 20,89,000/- (ii) Amount received from sale of plot at Nangloi, New Delhi-110041. : Rs. 5,00,000/- (iii) Amount received from sale of old furniture etc. : Rs. 3,00,000/- The addition of Rs. 28,89,000/- is unfounded, uncalled for and unwarranted.

2. The following observations 1 findings of the learned

CIT(A) are incorrect:-

(a) The appellant has not filed any documents to show that the transactions claimed by her, as source of Investment in property, were genuine.

(b) None of the Bank Statements from where the withdrawals have allegedly been made, have been filed to confirm the genuineness of transactions.

(c) No Photo Identification of the persons have been filed and the persons have not been produced to confirm the identity of the persons.

(d) Their PANs and Income-tax Returns and Bank

Statements have not been filed to confirm the genuineness of the transaction and their capacity to pay.

(e) The appellant has failed to establish the genuineness, identity and creditworthiness of the three persons and genuineness of the sale transactions against which the amounts have been received, which in turn has been invested in the purchase of Unit No. 914, Spaze Towers for Rs 28,89,000/-.

(f) The appellant has been unable to explain the source from which the appellant has allegedly received the amounts in its bank account.

(g) The explanation offered by the assessee about the nature and source of the sums found credited in the books, was not satisfactory.

(h) The appellant failed to discharge its onus to produce legally acceptable evidence of genuineness of the transactions.

(i) The appellant has offered no creditable explanation about the amounts of Rs.28,89,000/- credited in the books maintained by the assessee.

3. The learned CIT(A) failed to appreciate that :-

(a) The appellant had filed sufficient evidence in respect of purchase of rights of 618A, "SPAZE-I,

TECH PARK", Sector 49, Sohna-Gurgaon Road, which were for a consideration of Rs.20,89,0001- in November 2009 and transfer thereof to the original allottee, namely, Sanjiv Bindra-HUF in terms of letter dated 01.03.2011.

(b) The appellant received investment return of Rs.5,57,280/- from M/s. Spaze Towers Pvt. Ltd., which was shown as interest income under the head, "Income from other sources" in her Income- tax Return. However, the appellant inadvertently declared interest of Rs.5,01,552/- (Net amount after deducting TDS) in the Income-tax Return. The assessee during the assessment proceedings, therefore, requested the learned Assessing Officer to assess the interest income at Rs.5,57,280/- instead of Rs.5,01,552/- and the Return for the assessment year 2011-12 may please be treated to have been revised accordingly.

(c) The appellant filed a copy of Agreement to Sell and Purchase and the Receipt in respect of sale of plot at Nangloi, Delhi. The working of Capital Loss

(Long Term) on the sale of the plot was also filed.

Since the plot at Nangloi sold was an agricultural land and had not been notified by the Sub

Registrar, Rohtak Road, Nangloi, no Sale Deed in respect of this land was allowable. The appellant, therefore, sold the said plot through documents, such as, Agreement to Sell and Purchase, Power of Attorney, receipt, etc. These documents duly proved that the appellant had received full consideration of Rs.5,00,000/--, which were through Alc Payee cheques.

(d) The appellant owned 1/4th share in the House

No. 62, Kirti Nagar, New Delhi-l10015, which was sold in the subsequent year i.e. assessment year

2012-13. However, during the assessment year

2011-12, she sold her household goods and furniture etc. for a sum of Rs. 3,00,000/- to Smt.

Shashi Aggarwal and for which necessary evidence had been adduced.

4. The various reasons given by the learned

CIT (A) to uphold the addition of Rs.28,89,000/- to the incomer of the assessee are misconceived and incorrect, particularly, when there was no such income earned or expenditure incurred by the appellant in the assessment year under appeal.

5. The appellate order is contrary to the facts

and law of the case.

6. The appellant craves leave to add, amend or alter any of the foregoing grounds of appeal at the time of hearing of the appeal.”

2. The brief facts of the case are that Assessee filed her return of income declaring income of Rs. 6,59,638/- on 21.3.2012. The return of the assessee was processed u/s. 143(1) of the I.T. Act, 1961 on 09.6.2012. Subsequently, the case of the assessee was selected for scrutiny. However, the assessment has been made at an income of Rs. 36,04,367/- vide assessment order dated 31.3.2014 passed u/s. 143(3) of the Act by makings the additions of Rs. 28,89,000/-. Aggrieved with the assessment order, assessee filed the appeal before the Ld. CIT(A) who vide his impugned order dated 08.5.2015 has dismissed the appeal of the assessee thereby upholding the addition made by the AO.

3. Aggrieved with the impugned order of the Ld. CIT(A), the Assessee is in appeal before the Tribunal.

4. Ld. Counsel of the assessee stated that Ld. CIT(A) while upholding the additions in dispute has failed to appreciate that the assessee had filed sufficient evidence in respect of purchase of rights of 618A, "SPAZE-I, TECH PARK", Sector 49, Sohna-Gurgaon Road, which were for a consideration of Rs.20,89,000/- in November 2009 and transfer thereof to the original allottee, namely, Sanjiv Bindra-HUF in terms of letter dated 01.03.2011; the assessee received investment return of Rs.5,57,280/- from M/s.

Spaze Towers Pvt. Ltd., which was shown as interest income under the head, "Income from other sources" in her Income-tax Return.

However, the assessee inadvertently declared interest of Rs.5,01,552/- (Net amount after deducting TDS) in the Income-tax Return. The assessee during the assessment proceedings, therefore, requested the learned Assessing Officer to assess the interest income at Rs.5,57,280/- instead of Rs.5,01,552/- and the Return for the assessment year 2011-12 may please be treated to have been revised accordingly; the assessee filed a copy of Agreement to Sell and Purchase and the Receipt in respect of sale of plot at Nangloi, Delhi. The working of Capital Loss (Long Term) on the sale of the plot was also filed. Since the plot at Nangloi sold was an agricultural land and had not been notified by the Sub Registrar, Rohtak Road, Nangloi, no Sale Deed in respect of this land was allowable. The assessee, therefore, sold the said plot through documents, such as, Agreement to Sell and Purchase, Power of Attorney, receipt, etc.

These documents duly proved that the assessee had received full consideration of Rs.5,00,000/--, which were through Alc Payee cheques; the assessee owned 1/4th share in the House No. 62, Kirti Nagar, New Delhi-l10015, which was sold in the subsequent year i.e. assessment year 2012-13. However, during the assessment year 2011-12, she sold her household goods and furniture etc. for a sum of Rs. 3,00,000/- to Smt. Shashi Aggarwal and for which necessary evidence had been adduced. Hence, he submitted that Ld. CIT(A)’s action in upholding the addition of Rs. 28,89,000/- to the incomer of the assessee are misconceived and incorrect, particularly, when there was no such income earned or expenditure incurred by the assessee in the assessment year under appeal. In order to support his case, Ld. Counsel of the Assessee has filed a Paper Book containing pages 1 to 51 in which he has attached the copy of statement of income, profit and loss account and balance sheet; copy of General Power of Attorney dated 23.12.2010; copy of agreement to sell and purchase dated 23.12.2010; copy of affidavit; copy of reply to questionnaire dated 28.10.2013; copy of bank account details; copy of Memo of Understanding dated 12.9.2007; copy of letter dated 16.11.2009 of the appellant to M/s Spaze Towers Pvt. Ltd; copy of affidavit of the allottee Sh. Sanjiv Bindra Karta of Sanjiv Bindra (HUF); copy of the receipt dated 7.9.2007 issued by M/s Spaze Towers Pvt. Ltd; copy of affidavit of the appellant; copy of the agreement to sell and purchase dated 23.12.2010; copy of letter dated 1.3.2011 of Sh. Sanjiv Bindra Karta of Sanjiv Bindra (HUF) to M/s Spaze Towers Pvt. Ltd; copy of the cheque given by the assessee to Sh. Sanjiv Bindra Karta of Sanjiv Bindra (HUF); copy of receipt of the cheque in respect of sale of old furniture; copy of the affidavit of Sh. Bal Kishan Vij alongwith Will for the sale of land; and copy of the written submissions filed before the Ld. CIT(A). In view of the above, he requested that additions in dispute may be deleted and appeal of the assessee may be allowed.

(a) Addition uls 69C of the Act of Rs. 28,89,000/-

(b) Income from other sources (to be added to the income as per assessee's contention) of Rs. 55,728/-. The said sum is not in dispute any more.

The addition thus disputed in this appeal is only of Rs.

28,89,000/- comprises of the following sums:-

(i) Amount received in respect of Rs. 20,89,000/- transfer of the booking rights in property No. 618-A Spaze Towers, Sohna Road, Gurgaon (ii) Amount received from sale of plot at Rs. 5,00,000/- Nangloi, New Delhi – 41 (iii) Amount received from sale of old Rs. 3,00,000/- furniture etc.

6.1 I find that the assessee got registered two properties, one Flat No. 1203, Greater Noida and another office space at 914, Tower A, Spaze Corporation Park, Sector 69-70, Gurgaon. In respect of the Flat No. 1203, Greater Noida, consideration was paid in earlier years from accounted sources, however in the instant year, assessee has incurred an expenditure of Rs. 1,79,200/- as stamp duty charges and Rs. 8,09,274/- as miscellaneous charges paid to UP Township, Turquoise Construction and Falcon Infrabuilt P Ltd. Further, in respect of office space at 914, Tower A, Spaze Corporation Park, Sector 69-70, Gurgaon, assessee got the aforesaid property registered for a sum of Rs. 26,42,127/- during the year. The aforesaid investments were made by the assessee out of the sums credited in its bank account which was submitted to the AO (placed at page no. 21-22 of the PB) and has not been disputed either by the assessee or by the revenue. Since assessee had made an investment of Rs. 26,42,127/- and not Rs. 28,89,000/- which sum was paid by her to Spaze Tower through a cheque and is duly 11 debited in her bank account on 05.03.2011 (placed at page 22 of the PB). On the aforesaid date, the balance in the aforesaid bank account of assessee was Rs. 26,71,782.16. It is thus more than clear that the amount of investment made was of Rs. 26,71,782/- and not Rs. 28,89,000/- and the same was also met out of her existing bank account which shows the credit balance of Rs. 26,71,782.16. In such circumstances, to conclude that an amount of Rs. 28,89,000/- was an unexplained expenditure is not sustainable in the eyes of law.

6.2 I further note that assessee explained that Rs. 26,71,782.16 was a sum invested by her out of her existing account and that the aforesaid sum is paid out of her balance in the account. It was submitted that the first of the credit of Rs. 20,89,0001- (which is a sum added) represented an amount of receipt on 01.03.2011 on transfer of rights in a space which had been acquired by her from M/s Sanjiv Bindra HUF on 16.11.2009. It was explained that the assessee had acquired such right in the space from M/s Sanjiv Bindra HUF on 16.11.2009 (page 27-28 of PB) which rights had been acquired by M/s Sanjiv Bindra HUF under an MOU dated 12.09.2007 from M/s Spaze Towers Pvt. Ltd. Thus the credit of Rs. 20,89,000/- appearing in the bank account represents a sum of receipt which is fully and satisfactorily explainable and is supported by evidence and is in fact a refund of the amount earlier invested on 16.11.2009 (A Y 2010-11). In such circumstances, it is evident that the payment made by the assessee of Rs. 26,42,127/- cannot be regarded as an unexplained expenditure by any stretch of imagination. To support the receipt from M/s Sanjiv Bindra HUF on transfer of rights, the assessee had placed on record the following documentary evidences:

S.No. Date Particulars Pages of Paper Book 1. 16.11.2009 Purchase rights in Unit No. Page 40 618A, Gurgaon, Sohna photocopy of Road, Gurgaon from Sanjiv the cheque Bindra HUF who had issued in favour acquired the same from M/s of Sanjiv Bindra Spaze Towers Pvt. Ltd. for a HUF sum of Rs. 20,89,000/- and paid the consideration by cheque bearing no. 756677 dated 10.11.2009 drawn on PNB, Kiriti Nagar, New Delhi 2. 16.11.2009 Intimation given to M/s Pages 27-28 Spaze Towers Pvt. Ltd. 3. 07.9.2009 Payment detail made by Page 31 Sanjiv Bindra HUF to M/s Spaze Towers Pvt. Ltd. of Rs. 20,64,000/- 4. Affidavit of assessee at the Page 32-33 time of the execution of the agreement acquiring booking rights. 5. Endorsement made by M/s Page 31 Spaze Towers Pvt. Ltd. in Reverse page favour of assessee on the reverse of the receipt.

6.3 In view of the above, in my considered opinion, the assessee had received a sum of Rs. 20,89,000/- from M/s Sanjiv Bindra HUF in the property 618A, Sohna Road, Gurgaon, which had been acquired by the assessee and had made a payment of Rs. 20,89,000/- on 16.11.2009 relevant to the assessment year 2010-11. In other words, the rights acquired by the assessee on 1.6.11.2009 were retransferred to M/s Sanjiv Bindra HUF and was a fully explained credit. Thus such rights as had been acquired by the assessee were thus transferred in favour of Sanjiv Bindra HUF on 01.03.2011 when the assessee had received Rs. 20,89,000/- through bank account and is duly reflected (Page 22 of PB). To support the aforesaid transfer of such rights in favour of Sanjiv Bindra HUF, the assessee had furnished the following documentary evidence: a. Confirmation of the vendee to the Mis Spaze Tower P.

Ltd. reading as under: Page 38

"This is to inform you that, I have purchase the above said unit no. 618A in sector-49 on Sohna

Gurgaon Road, Tehsil and District Gurgaon for Rs.

20,89,0001- (Rupees Twenty Lakh Eighty Jvine

Thousand only) as total consideration including other charges paid to you also. I have made full payment to Mrs. Rama Saluja wlof Mr. Ram Avatar

Saluja Rio H-63, Kirti Nagar, New Delhi -110015 in her SB Ale No. 151321 with PNB, Branch Kirti

Nagar, and New Delhi through RTGS on OFt March'

2011. " b. M/s Spaze Tower P. Ltd. as would be seen accordingly endorsed the booking right. Page 39 6.4 Keeping in view of the facts and circumstances of the case, in my opinion, the AO has incorrectly made an addition of the aforesaid sum by invoking the provision of section 69C of the Income Tax Act. However, the assessee has not incurred expenditure in respect of which she has not been able to explain the source of such expenditure and hence the addition of Rs. 20,89,000/- is not tenable as the same amount of Rs.20,89,000/- sum which is an amount received by the assessee and is thus fully explained and assessee has laid complete documentary evidences to establish the same as such, addition made and sustained is wholly unsustainable in law. Apart from above, the identity of the creditor and existence and identity cannot be doubted or disputed. Further merely because, such person on account of medical ground did not appear, but had duly filed all necessary detail, no adverse inference can be drawn against the assessee, as the power to enforce the attendance of a witness is with the AO. In fact it is settled law that if a creditor ignore the summons or don't appear before the AO could not be a ground to draw adverse inference against the assessee. In view of above, the addition of Rs. 20,89,000/- in dispute is hereby deleted.

6.5 With respect to addition amounting to Rs. 5,00,000/- received on 04.01.2011 from sale of plot at Nangloi, New Delhi – 110041 is concerned, I find that there is no expenditure incurred by the assessee but represent a credit appearing in the bank account of the assessee of Rs. 5 lakhs. It was noted that in the bank account of the assessee, a sum of Rs. 5,00,000/- was credited on 04.01.2011 (page 22B of PB), which has been added by the AO as an unexplained expenditure, which has been upheld by the learned CIT(A). I further note that the assessee on 30.12.1994 has purchased an agricultural land situated in the revenue estate of village Nangloi Jat, New Delhi for a total consideration of Rs. 1,90,000/-. The aforesaid agricultural land had been acquired from Shri Bal Kishan Vij which is duly supported by an affidavit and also so stated in the will (Page 42-43 of the PB). The consideration for the same was also acknowledged by the seller (Page 44 of the PB). The aforesaid land as had been acquired as aforesaid was transferred on 23.12.2010 to Shri. Amar Nath Goyal for a total consideration of Rs. 5,00,000/-, when the following documents had been executed:

6.6 Thus, the aforesaid sum of consideration had been received against the transfer made by the assessee through account payee cheque and same was also acknowledged by the assessee (page 14 of the PB). Hence, the entire receipt is well explained and has not been doubted as an unexplained credit. The AO has again made no attempt to dispute the receipt through bank account of the vendee to whom the land was transferred which fact has duly been admitted by the transferee. In view of the above, the addition in dispute is hereby deleted.

6.7 With respect to addition of Rs. 3,00,000/- received from sale of old furniture etc. is concerned, I find that assessee has received a sum of Rs. 3,00,000/- on 08.01.2011 by account payee cheque from Mrs. Sashi Aggarwal in respect of the sale of the old furniture, and to support the aforesaid transaction, assessee has also filed the confirmation from Mrs. Sashi Aggarwal who has duly confirmed the purchase of the furniture from the appellant. Copy of the receipt of the cheque from Smt. Sashi Aggarwal has been placed at page 41 of the Paper Book. As per record the assessee was a co-owner of 1/4th share in house no. 62, Kirti Nagar, New Delhi which house property was sold for an aggregate consideration of Rs. 1 crores and assessee share being 1/4th received a sum of Rs. 25 lakhs being 1/4th of the total consideration which was credited in her account on 12.08.2011 when the sale deed was registered (copy of the sale deed and bank account is placed on record). Apart from the aforesaid, the assessee has also received Rs. 3 lakhs towards the sale of household goods such as Furniture, cabins, boards, drawing tables, sofas etc which were lying in the said house. The AO has not disputed the aforesaid sale of the property, in such circumstances, having accepted the sale of aforesaid house property, revenue was not justified by any logic to dispute the consideration received by the assessee of Rs. 3 lakhs towards the sale of house hold items from Mrs. Sashi Aggarwal, who has confirmed the purchase of house hold items and is a tax assessee having PAN AAAPA3587A. In fact, the AO has issued summons uls 131 of the Act which summons were duly served and were also complied as such, he could not have thus made the addition, as per settled law. I further note that in response to the summons issued u/s 131 of the Act, Mrs. Sashi Aggarwal duly confirmed the aforesaid transaction and also filed her copy of ITR. However, requested to excuse her presence on medical grounds and in support also filed the medical certificates. The copy of the aforesaid reply has not been made available to the assessee and same is on the record of the AO has also been noted by the AO in his order at page 6. In such circumstances, in my view, neither the identity of the creditor nor the creditworthiness can be disputed.

Further merely because, such a person on account of medical ground did not appear in response to summons, but file all necessary detail, no adverse inference can be drawn against the assessee, as power to enforce the attendance of a witness is with the AO, as per settled law. In fact, it is settled law that if a creditor ignore the summons or don't appear before the AO could not be a ground to draw adverse inference against the assessee. In view of the in my opinion, since the assessee has discharged its burden and not an iota of material has been brought on record, except of harboring the suspicion, addition made by the AO and sustained by the learned CIT(A) is not tenable, hence, the same is deleted.

Order pronounced on 27/11/2017.