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Income Tax Appellate Tribunal, C/“SMC” BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI
आदेश / O R D E R
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-9, Chennai dated 30.03.2017 pertaining to assessment year 2009-10.
The main grievance of the assessee in his appeal is with regard to confirmation of addition of `16,89,051/- u/s.68 of the Act.
The brief facts of the case are that the assessee is a M.D of company called Gurudev Foundations Pvt. Ltd., and is engaged in the business of Real estate. During the financial year 2007-08, the assessee entered into an oral understanding with one Mr.N K Kothari to sale the Plot bearing No.30 & 1 at No.153, Perumbakkam village, Tambaram and received the payments from Mr.N.K.Kothari during Financial Year 2007-08.
3.1 During the course of assessment proceedings, the AO noticed from the balance sheet as on 31.03.2009 that `18,53,637/- was shown as cash in hand in current assets and the corresponding amount as on 31.03.2008 was `1,63,986/-. The AO asked the assessee to submit the details for the cash in hand. The AR of the assessee vide letter dated 16.12.2011 submitted that the assessee received a sum of `16,65,000/- on various dates from Shri N K Kothari, as advance towards the land during the financial year 2007-
The assessee due to dispute did not mix the amount with other cash balance assuming that he was not the absolute owner of the said sum and did not enter the same in the return of income for the Assessment Year 2008-09. The assessee took the said amount into account only in the financial year 2008-09 after arriving at a settlement and included the same in his books of account and passed necessary entries The AO did not accept the submission of the assessee for the reasons that as the AR did not submit any proof for the money being secured by the assessee from Shri, N.K, Kothari during hearing and filed a revised balance sheet as on 31.03.2008 only when the AO pointed out that the cash balance was `1,63,986/- during the relevant assessment year. The AO also observed that the assessee has not filed any wealth tax return of the Assessment Year 2008-09 and if he had received the money in the Assessment Year 2008-09, the cash balance in hand would be `18,14,416/- which was above the non-taxable wealth tax limit of `15,00,000/-. The AO also observed that the assessee has not submitted any proof that he acted only in trust and he was not the absolute owner of the cash received by way of agreement between Shri N K Kothari and the assessee. No details were submitted regarding how the dispute was settled. Hence, the ld. Assessing Officer brought to tax `16,89,651/- u/s 68 (by mistake taken as `16,9,051/- in the assessment order) being the difference between the amount credited of Rs 1,53,637/- in Assessment Year 2009-10 and Rs 1,63,986/- in Assessment Year 2008-09 as the assessee has not given any satisfactory explanation.
Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A).
3.2 Before the Ld.CIT(A), the ld.A.R submitted that the appellant is the Managing Director of a Company called M/s. Gurudev Foundations Pvt. Ltd.,. It is submitted, that the appellant on behalf of .M/s Gurudev Foundations Pvt. Ltd., entered into an understanding with Shri. N.K. Kothari to purchase his property and accordingly a sum of `16,65,000/- was paid during the financial year 2007-08. The appellant submitted that the sale deed was registered on 12.01.2009 for a total sum of Rs.2 1.50 lakhs, out of which `4,35,000/- was directly paid by Mr. N K Kothari to M/ s Gurudev Foundations Pvt Ltd, and a sum of Rs 16,65,000/- was paid by Shri N K Kothari through the appellant. According to Ld.CIT(A), the submissions of the assessee was that the assessee merely acted as an agent for M/s.
Gurudev Foundations Pvt. Ltd., and therefore assessment of that income would not arise in assessee’s case and the second argument of the appellant is that transaction took place in the financial year 2007-08 relevant to the Assessment year 2008-09 and therefore the sum could not be considered for the Assessment year 2009-10.
3.4 On appeal, the Ld.CIT(A) observed that the submission of the appellant is not acceptable if the appellant stood as an agent for M/s.
Gurudev Foundations Pvt. Ltd., there is no need for reflecting ‘the sum of Rs. 16,65,000/- as cash in hand in the books of the appellant.
The entry which comes into the balance sheet of the appellant must belong to him. It is only then such entry should be made in his books of account. According to Ld.CIT(A), the appellant has not submitted any evidence in support of his contention that he acted as an agent for M/s. Gurudev Foundations Pvt. Ltd., and the money was received during the financial year 2007-08. Filing of revised balance sheet for the year ending 31.03.2008 after initiation of enquiry by the AO cannot be accepted as evidence in the absence of any other evidences in support of the claim. The appellant could not even furnish confirmation from Shri. N.K. Kothari to substantiate his claim.
In these circumstances, Ld.CIT(A) came to a conclusion that the appellant has not explained the sources for `16,65,000/- and such unexplained sum is required to be assessed during the previous year 2008-09 relevant to the Assessment year 2009-10 because it is in that year that the sum was introduced in the books of account.
Therefore, the addition Rs. 16,65,000/- is hereby confirmed by the Ld.CIT(A). Against the order of Ld.CIT(A), now the assessee is in appeal before Tribunal.
I have heard both the parties and perused the material on record. The contention of the ld.A.R is that the assessee is a Managing Director of the company, M/s. Gurudev Foundations Pvt. Ltd., which deals in Real estate. During the assessment year under consideration, the assessee on behalf of the said company received the said sum for the sale of property at Plot bearing No.30 & 1 at No.153, Perumbakkam village, Tambaram and the amount has been received by the assessee only as the Trustee and finally M/s.
Gurudev Foundations Pvt. Ltd., entered into sale deed with Shri. N.K.
Kothari. In my opinion, the assessee has made “make believe” story for self-serving purpose, which cannot be given any credit. The assessee has not placed any evidence to show that the assessee has received money from Shri. N.K. Kothari on behalf of M/s.
Gurudev Foundations Pvt. Ltd., In the absence of evidence brought on record, I am not in a position to appreciate the argument of ld.A.R.
Further, the ld.A.R made a plea that the transaction is not related to the assessment year under consideration i.e. 2009-10, instead it was related to assessment year 2008-09. This argument also is not supported by any relevant evidences. Hence, I am not in a position to appreciate the argument of the ld.A.R.
In the result, the appeal of assessee is dismissed.
Order pronounced on 21.12.2017.