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Income Tax Appellate Tribunal, DELHI BENCH “SMC-II”, NEW DELHI
Before: SHRI H.S. SIDHU
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.
The grounds of appeal read as under:-
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.
That the findings are based on surmises and conjectures and order is perverse.
Therefore, it is hereby prayed that the said addition may kindly be deleted and claim of loss may be allowed.
The brief facts of the case are that the Return of Income in this case was filed on 30-3-2011 declaring income of Rs. 4,86,700/-. The case was selected for scrutiny under CASS. Accordingly, notice u/s. 143(2) of the I.T. Act was issued, but nobody complied. Again a fresh notice u/s. 142(1) of the I.T. Act, 1961 was issued on 30.8.2012. This notice also remained unattended. Therefore, again fresh notices dated 5.11.2012 for 20.11.2012 and 10.12.2012 for 17.12.2012 were issued and in response thereto, the assessee’s AR attended the proceedings and filed the reply. During the course of assessment proceedings the account of the assessee shows a cash credit of Rs. 20,00,000/-. It was stated that this is out of funds of Rs. 15,00,000/- and Rs. 5,00,000/- were received in cash on 04.12.2009 and on 16.01.2010 respectively which was taken as advance against the sale of property settled at total consideration of Rs. 30,00,000/-. AO observed that since the Registry was not made, it is not acceptable, hence, he added Rs. 20 lacs in the hands of the assessee as unexplained cash and assessed the income of the assesse at Rs. 24,86,700/- vide his order dated 26.3.2013 passed u/s. 143(3) of the I.T. Act, 1961.
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.
At the time of hearing, Ld. Counsel of the assessee draw my attention towards 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/-. The seller/assessee has received Rs. 15 lacs on 4.12.2009 and Rs. 5 lacs on 16.1.2010 totaling to Rs. 20 lacs as Bayana payment and the remaining Rs. 10 lacs will be received at the time of finalizing the Deal. He further draw my attention towards page no. 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 Seller Mrs. Jyoti Aggarwal has made the payment of Rs. 20 lacs vide cheque no. 845431 dated 10.5.2114 of Punjab National Bank of Rs. 8.50 lacs and balance payment of Rs. 11.50 lacs shall be paid to M/s Vasudev Enterprises within ten days from 10.5.2014. 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. Ld. Counsel of the assessee further draw my attention towards 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. Ld. Counsel of the assessee further draw my attention towards 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 the case of Jyoti Agarwal relating to AY 2010-11 in which the Company has stated that the (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. In view of the above, he stated that it is crystal clear 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 same was returned by 4 cheque on 10.5.2014 for Rs. 8.50 lacs and 15.5.2014 for Rs. 11.50 lacs which even otherwise confirmed by M/s Vasudev before the Assessing Officer of the assessee vide its reply and by filing the confirmation of accounts etc. In view of the above, he requested that the addition in dispute may be deleted and ground no. 1 may be allowed.
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.
On the other hand, Ld. DR relied upon the orders of the lower authorities and opposed the request of the Ld. Counsel of the assessee.
I have heard both the parties and perused the orders passed by the Revenue Authorities alongwith relevant records available with me especially the impugned order as well as the Paper Book filed by 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.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the Open Court on 20/01/2017.