SMT JYOTI AGARWAL,GHAZIABAD vs. ITO, GHAZIABAD

ORDER This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals), Ghaziabad dated 16.3.2016 pertaining to assessment year 2010-11.

1. That the Ld. Lower Authority grossly erred in sustaining the addition of Rs. 20,00,000/-, being the advance against the property, disregarding that the only objection of AO met and despite confirming transaction again and again through four remand reports.

2. That, in addition to above, Ld. Lower authority further erred in sustaining the addition merely because in B/s of party

filed with ROC was not depicting the bifurcation of amount and given to assessee was depicting the bifurcation even after tallying each and every figure/ item of party’s B/s, in whole disregard of the facts / evidences on the record.

3. That the Ld. Lower Authority, committed mistake in not even considering the claim of business loss of Rs. 11,85,430/- and in effect not allowing the same either for set off or otherwise even after verifying the same.

Therefore, it is hereby prayed that the said addition may kindly be deleted and claim of loss may be allowed.

4. Aggrieved with the assessment order, assessee appealed before the Ld. CIT(A) who vide his impugned order dated 16.3.2016 has dismissed the appeal of the assessee.

5.1 With regard to ground no. 3 relating to mistake committed in not even considering the claim of business loss of Rs. 11,85,430/- and in effect not allowing the same either for set off or otherwise even after verifying the same.

He stated that assessee has claimed business loss before the AO as well as Ld. CIT(A) which has not been considered by both the authorities. Hence, he requested that the issue may be set aside to the AO to consider the same afresh under the law, after giving adequate opportunity of being heard to the assessee.

7.1 With regard to ground no. 1 relating to addition of Rs. 20 lacs is concerned, I had perused the Page no. 10 of the Paper Book vide which a Bayana Agreement 16.1.2010 was executed between Mrs. Jyoti Aggarwal W/o Sh. Sharad Aggarwal and M/s Vasudev Enterprises for selling the property being Shop No. B-33, area 128.58 sq.ft. and B-34, area 128.58 sq.ft., Globus-D, Plot No. 5 & 6, situated at Sector-63, Noida Distt. Gautambudh Nagar at a total cost of Rs. 30,00,000/-. This agreement shows that the assessee has received Rs. 15 lacs on 4.12.2009 and Rs. 5 lacs on 16.1.2010 thus totaling to Rs. 20 lacs as Bayana payment and the remaining Rs. 10 lacs will be received at the time of finalizing the Deal in respect of the aforesaid property. I further perused the Page noa. 82 to 84 which is a Cancellation Agreement dated 10.5.2004 executed between the Mrs. Jyoti Aggarwal/Assessee and M/s Vasudev Enterprises Pvt. Ltd. in respect of the above said property vide which the assessee has made the payment of Rs. 8.50 lacs vide cheque no. 845431 dated 10.5.2114 of Punjab National Bank and balance payment of Rs. 11.50 lacs shall be paid to M/s Vasudev Enterprises within ten days from 10.5.2014. I further note that in this Cancellation Agreement it was specifically mentioned that after the payment of second installment of Rs. 11.50 lacs both parties of this agreement undertake not to take any legal action against each other. I further note from Page no. 68 of the Paper Book which is a copy of Bank Statement of the assessee with Punjab National Bank, Ghaziabad GT Road Branch with S/B A/c No. 0180000100477660 which clearly shows that assessee has made the balance payment of Rs. 11.50 lacs through RTGS on 15.5.2014 to M/s Vasudev Enterprises. I also find that as per Page no. 69 of the Paper Book which is a reply of M/s Vasudev Enterprises Pvt. Ltd. to the Income Tax Officer, Ward 1(3), New Delhi under Notice u/s. 133(6) of the I.T. Act, 1961 in 6 the case of Jyoti Agarwal relating to AY 2010-11 in which the Company has stated that the following :-

(i) the Company has given an advance of Rs. 20 lacs to Jyoti Agarwal enclosing therewith the copy of account and mode of payment; (ii) copy of bank statement; (iii) copy of ITR of AY 2010-11 with Audited Balance Sheet and Profit and Loss account; (iv) copy of agreement of property and (v) copy of agreement of cancellation of agreement to sell.

7.2 After going through the aforesaid documents, I am of the considered view that assessee has received advance of Rs. 20 lacs from M/s Vasudev Enterprises as a Bayana and due to non-finalization of the deal, the said amount was repaid by cheque on 10.5.2014 for Rs. 8.50 lacs and 15.5.2014 for Rs. 11.50 lacs through RTGS to M/s Vasudev Enterprises, which even otherwise confirmed by M/s Vasudev Enterprises before the Assessing Officer of the assessee vide its reply at Page no. 69 of the Paper Book alongwith copy of account, bank statement, copy of ITR of AY 2010-11 with Audited Balance Sheet and Profit and Loss account; copy of agreement of property and copy of agreement of cancellation of agreement to sell.

7.3 Keeping in view of the facts and circumstances of the case, I delete the addition of Rs. 20 lacs and allow the ground no. 1 raised by the assessee.

7.4 With regard to ground no. 3 relating to not considering the claim of business loss of Rs. 11,85,30/- is concerned, I find considerable cogency in the contention of the Ld. Counsel of the assessee that the assessee has claimed business loss before the AO as well as Ld. CIT(A) which has not been considered by both the authorities. Hence, I am of the considered view that this issue is required to be considered and adjudicated at the level of the AO. Therefore, I am setting aside this issue to the file of the AO to consider the same afresh, under the law, after giving adequate opportunity of being heard to the assessee.

Order pronounced in the Open Court on 20/01/2017.