DCIT, NEW DELHI vs. M/S. HI- TECH RESIDENCY PVT. LTD., NEW DELHI

Date of Hearing : Date of Hearing : 09 Date of Hearing : Date of Hearing : 09 09-12 09 12 12-201 12 201 2015 201 Date of Order : Date of Order : 18 Date of Order : Date of Order : 18 18-12 18 12 12-201 12 201 2015 201

ORDER ORDER ORDER ORDER PER H.S. SIDHU PER H.S. SIDHU : : : : JM PER PER H.S. SIDHU H.S. SIDHU The Revenue has filed the present appeal against the impugned order dated 18/6/2012 passed by the Ld. Commissioner of Income Tax (Appeals)-XV, New Delhi on the following grounds:-

1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that the Assessee has discharged its onus or proving the identity, creditworthiness and genuineness of the nine corporate entities from whom share application money of RS.13,00,000/-, share premium of Rs.1, 17,00,000/- and unsecured loans of RS.95,00,000/- shown to have been received by the Assessee.

2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the adverse findings of the AO. mentioned in the assessment order.

3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of RS.1,30,00,000/- made u/s 68 of the Act in respect of unexplained credits introduced in the garb of share application money/share capital and share premium shown to have been received from six corporate entities.

4. On the facts and circumstances of the case and. in law, the Ld. CIT(A) has erred in deleting the addition of Rs.95,00,000/- made u/s 68 of the Act in respect of unexplained credits introduced in the garb of unsecured loans shown to have been received from three corporate entities.

5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.15,00,000/- made u/s 68 in respect of unexplained earnest money shown to have been received from two parties, by accepting the additional evidence without providing any opportunity to the AO.

6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.9,50,000/- made u/s 68 in respect of unexplained cash deposit in Bank account by accepting the additional evidence without providing any opportunity to the AO.

7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of RS.1,96,920/- made u/s 50C(1) of the Act.

2. The brief facts of the case are that the Assessee Company is engaged in the business of Real Estate and also shown interest income on loans and advances given. The Assessee filed e-return declaring income of Rs. 32,73,227/- on 29.9.2009. The return was processed u/s. 143(1) and the case was selected for scrutiny. Notice u/s. 143(2) dated 27.8.2010 was issued and served upon the Assessee. Subsequent Notices u/s. 143(2) and 142(1) alongwith questionnaire dated 11.7.2011 was issued and served upon the Assessee. In response to these notices Authorised Representative of the Assessee attended the assessment proceedings from time to time, filed details and produced accounts and documents which were seen on test check basis by the Assessee. Thereafter, the assessment order was passed by the AO on 29.12.2011 u/s. 143(3) of the Income Tax Act, 1961, assessing the total income at Rs. 2,87,31,150/- for the assessment year 2009-10 thereby making various additions.

3. Against the above assessment order, the Assessee appealed before the Ld. CIT(A), who vide impugned order dated 18.6.2012 has partly allowed the appeal of the Assessee.

6. On the other hand, Ld. Counsel for the Assessee relied upon the order of the Ld. CIT(A).

7.1 With regard to issue raised in ground no. 3 relating to deletion of addition of Rs. 1,30,00,000/- made u/s. 68 of the Act in respect of unexplained credits introduced in the garb of share application money/share capital and share premium shown to have been received from six corporate entities is concerned, we find that Ld. CIT(A) has elaborately discussed/ given the finding on the issue in dispute vide para no. 5 to 5.16 from pages 13 to 21 of the impugned order. For the sake of convenience, we are reproducing the findings of the Ld. CIT(A) as under:-

“5. I have gone through the above submissions of the appellant and considered the facts and evidences available on record. I have also perused the AO's order and have considered the case laws relied upon both by the AO as well as by the appellant.

5.2 It is an established prepositions that whenever there is a cash credit in the assessee's books of account, the onus is on the assessee to prove the three things namely, identity, creditworthiness and genuineness. If the assessee fails on any of these parameters the AO is bound to add such cash credit to the Income of the assessee.

5.3 In the facts of the case in hand it is seen that the appellant who is engaged in the business of real estate had during the year allotted 1,30,000 shares and collected Rs. 1,30,00,000 from the following 6 corporate entities:

1 MIs Zircon Exim Pvt. Ltd. Rs. 25,00,000 2 MIs Charminar Imp ex Pvt. Ltd. Rs.20,OO,OOO 4 3 MIs KPM Exim Pvt. Ltd. Rs.20,OO,OOO 4 MIs Rishikesh Trexim Pvt. Ltd. Rs.20,OO,OOO 5 MIs Dinanath Scrap Dealer Pvt. Ltd. Rs. 20,00,000 6 MIs OPA Distributors Pvt. Ltd. Rs. 25,00,000 During the course of assessment proceeding the AO received following documents from appellant, where in appellant tried to satisfy the identity, as well as the genuineness and creditworthiness of the shareholders.

(i) Copy of Certificate of Incorporation. (ii) Copy of Company Master Detail, as taken out from MCA site. (iii) Copy of ITR Acknowledgement for assessment year 2009-10 & 2010-11

(iv) Copy of Bank Statement, evidencing payment made to the appellant towards share allotment.

(v) Copy of Confirmation

(vi) Copy of Balance Sheet as at 31.03.2009.

5.3 However the above evidences were disregarded by the AO and he held that the identity, genuineness and creditworthiness is not proved and it is the case of accommodation entry, primarily because of the following reasons:

• Share applicant companies are bogus companies as they are non existent.

• These entities are not doing any business • The bank transactions are all sham in nature and only one page bank statement was submitted and immediately after credit entry, on the very next day there is a 5 debit entry of the same amount. The credit has come from the account of one Gola Securities Ltd., Mumbai which is engaged in the business of finance and investment.

• When summons were issued to these 6 corporate entities, there principal officer/director didn't appear and even the appellant expressed its inability to produce them.

• The returns of income for assessment year 2009-10 and 2010-11 of these entities didn't show the adequate income • All the 6 entities are. On paper and process all the formalities of PAN, CIN, DIN etc. to claim that they are in existence.

Thus the appellant has failed to prove the physical identity of these 6 corporate entities, creditworthiness and genuineness of transaction, hence Rs. 1,30,000/- remained unexplained. .

5.4 From the evidences placed on record it is seen that the shares were allotted to 6 corporate entities by the appellant and the money was received through cheques and the appellant in its support of these share capital provided the details viz certificate of incorporation, copy of details from the website of Ministry of Corporate Affairs, copies of ITR acknowledgements for assessment year 2009-10 and 2010-11, copies of bank statements etc.

Even the appellant provided the AO with addresses of these 6 entities and requested AO to issue the summons under section 131. The facts that the summons were issued by the AO and all the 6 entities did responded to these summons proves the fact that these entities are in existence and thus I hold that the identity of the shareholders is proved.

5.5 With regard to the creditworthiness and genuineness of the transaction, it is observed that the Balance sheet of all the 6 corporates were on record and were available with the AO. From the perusal of same it is seen that all the 6 corporates had sufficient assets and they had substantial investments in shares of different companies, of which around 20% of investments only is invested in the appellant company as will be evident from bellow mentioned table.

Name of company Total of Total Total balance sheet Investment in Investment as at 31.3.2009 equity shares in equity as on shares in shares in assessee Zircon Exim Pvt. Ltd. 1,63,06,883.57 1,36,50,000 25,00,000 Charminar Impex Pvt. Ltd. 1,26,92,851.53 1,25,00,000 20,00,000 KPM Exim Pvt. Ltd. 98,05,010.58 80,15,000 20,00,000 Rishikesh Trexim Pvt. Ltd. 2,00,11,754.91 1,90,00,000 20,00,000 Dinanath Scrap Dealer (P) Ltd. 1,77,77,052.00 1,74,95,000 20,00,000 OPA Distributors Pvt. Ltd. 1,76,65,024.50 1,73,00,000 25,00,000 5.6 If the principal officers / directors of these corporates have not appeared before the AO consequent to issue of summons under section 131, I find from the record that no further actions / efforts has been taken by the AO, by imposing any penalty on these corporate or any kind of verification is got done by deputing the inspectors of the department to verify the creditworthiness and genuineness of these corporate entities.

I find that no independent evidence is collected by the AO, nor any enquiry has been done from any sources internal or external sources to come to the conclusion that these 6 entities are sham and are paper companies.

No doubt that these 6 corporate entities have not shown the substantial income in their return of income and in their bank account there are credit entries coming from Gola Securities immediately before the money is invested with the appellant, but without examining or without making any enquiries from the Gola Securities or from 6 corporate entities and going into source of source, one fails to understand on what basis the AO's has concluded that the share money coming from 6 corporate entities is appellant's own money. AO has neither collected any iota of evidence nor has brought any material on record which can prove that the said share application money was appellant's own money.

It is also not a case where the inquiries have been done by the investigation wing of the department where detailed information regarding entry operators / accommodation provide were provided to the AO.

5.7 There are plethora of judgments of various judicial authorities, including Hon'ble Apex Court and also the jurisdictional High Court wherein it has been held that in case of money received towards share capital, only the identity of the shareholders needs to be proved. Once identity of the shareholders is established and it is proved that the money did in fact come from them, it is not for the assessee to prove as to how the shareholders came to be in possession of the money.

5.8 In a judgment dated 30/01/2009 Hon'ble Delhi High Court in the case of CIT vs. Gangour Investment Ltd. (Income Tax Act No. 34/2007) has held that Revenue can make addition under Section 68 of the Act only if the assessee is unable to explain the credits appearing in its books of accounts. In the said case the appellant has duly explained the said credit entries in the form of various documentary evidences. The said documentary evidence contained details, which set out not only the identity of the subscribers, but also gave information, with respect to their address, as well as, PAN, Assessment particulars etc. Based on these facts, the Hon'ble Delhi Court dismissed the appeal of revenue.

5.9 In yet another decision as to the correctness of treating share application money on par with cash credit, the Hon'ble Delhi High Court in CIT vs. Value Capital Services P. Ltd. (2008) 307 ITR 334 (Delhi) found after referring to the two of the decisions of the Delhi High Court on the subject that in respect of share capital amounts, they cannot be assessed in the hands of the company, unless the Department is able to show that the amount received towards share capital actually emanated from the coffers of the assessee company.

5.10 From the facts of the appellant's case, I find that the appellant has discharged its onus by giving the complete details viz address copy of ITR, bank statement, balance sheet etc. Even, when the appellant expressed his inability to produce the principal officers/directors, he requested the AO to issue summons to them.

Further it is seen that when summons have been issued to the 6 corporate entities, these summons have not only been accepted but the shareholders have duly responded to these summons and have given the details to the AO. If the AO was not satisfied with details so submitted by the 6 corporate entities, the onus was on the AO to ensure its compliance and take the requisite action. I find from the facts and evidences on record that AO has entirely failed to discharge its onus on these fronts and tries to shift the entire burden upon the appellant and without any conclusive evidences comes to the conclusion that the share capital introduced during the year represents appellant's undisclosed income.

5.11 It is pertinent to mention here the Hon'ble Delhi High Court's decisions in the case of ClT vs. Pradeep Gupta 207 CTR 115, which has also been relied upon by the Delhi ITAT in the recent judgment in the case of Babita Gupta wherein it is held that "in the facts of the case before us it may be seen that from the very beginning Ld AO had shifted entire burden upon the assessee and no material was brought by him to prove his allegation that the impugned amount represented assessee company's undisclosed income. Therefore, on this ground alone the entire addition deserves to be deleted and may kindly be held so.

5.12 The above view of mine also gets support from the decision of Hon'ble High Court of Delhi at New Delhi in the case of CIT Vs. Oasis Hospitalities Pvt. Ltd [333 ITR 119]. The Hon'ble Court held as under:-

The initial burden is upon the assessee to explain the nature and source of Share Application money received by it, in order to discharge this burden, the assessee is required to prove (i) the identity of shareholder; (ii) the genuineness of shareholder ; and (iii) the creditworthiness of shareholder. If the creditor/ subscribers is a company, then the details in the form of registered address or PAN identity etc, can be furnished. When the money is received by cheque and is transmitted through banking or other undisputable channels, the genuineness of the transaction will be proved. Other documents showing the genuineness of the transactions could be copies of the shareholders register, share application forms, share transfer registers etc. As far as credit worthiness or financial strength of the creditors/subscriber is concerned, that can be proved by producing the bank statement of the creditors/subscribers, showing that it had sufficient balance in its accounts to enable it to subscribe to the share capital. Once these documents are produced, the assessee would have satisfactorily discharge the onus caste upon him. Thereafter, it is for the assessing officer to scrutinize the same and in case he nurtures any doubt about the veracity of these documents, to probe the matter further. However, to discredit the documents produced by the assessee on the aspects, there had to be some cogent reasons and materials for the assessing officer and he cannot go into the realm of suspicion.

5.13 In view of the factual position as well as the judicial pronouncement on the subject, discussed above, I am of the considered view that the appellant has discharged the onus of establishing the bona-fides of the transactions and the AO was not justified in ignoring various evidences provided to him by the appellant. Nothing adverse has been brought on record by the AO to establish that the amount of share capital money of Rs. 1,30,00,000 received by the appellant from the said parties represents its own undisclosed income.

If there was doubt about the source of investment of the said 6 corporate entities, then additions should have been made in the case of investor company and not in the hands of the appellant company.

5.14 The decisions relied upon by the AO have no bearing on the case of the appellant. It may not be out of place to mention here that most of the decisions relied upon by the AO are already referred to/discussed in the decisions pronounced subsequently in favor of the appellant Hon'ble Delhi High Court, while deciding the cases of Divine Leasing & Finance Ltd., General Exports & Credits Ltd. and Lovely Exports Pvt. Ltd. (299 ITR 268), had taken care of the earlier decisions in the cases of Stellar Investment Ltd. (251 ITR 263-SC}, Sumati Dayal (214 ITR 801-SC}, Sophia Finance Ltd (205 ITR 98-Del), Korley Trading Co. Ltd. (232 ITR 820-Cal), Shankar Industries (114 ITR 689-Cal), Precision Finance P. Ltd. (208 ITR 465- Cal), United Commercial and Industrial Company Pvt. Ltd. (187 ITR S96-Cal). It may be worth pointing out here that the Hon'ble Supreme Court of India has dismissed the Revenue's SLP against the said order of Hon'ble Delhi High Court in Lovely Exports Ltd. Other decisions relied upon by the AO are not relevant to the case of the appellant.

5.15 Reliance in this regard is also placed on the decision of Hon'ble Delhi High Court in the case of CIT vs. Pondy Metal and Rolling Mill Pvt Ltd (Delhi) (ITA No. 788/2006) dated 19.02.2007, wherein the Hon'ble Court concurred with the findings of the Appellate Tribunal, Delhi Bench 'F' that once the identity of the investor has been manifest and is proved, the investment cannot be said to be the undisclosed income of the assessee. At best, the amount could be added in the hands of the investor but it certainly could not be treated as undisclosed income of the assessee. The appeal filed against the said decision, was dismissed by the Hon'ble Supreme Court in CC 12860/2007 dated 08/01/2008. 5.16 In the light of the above discussion, I am inclined to agree with the arguments and evidences provided by the appellant to substantiate that the transaction regarding Share capital received by it was a genuine transactions and the same was not an accommodation entry. I also do not find any evidence collected by the AO which could prove otherwise. Accordingly, the AO is not justified in treating the amount of share capital money received by the appellant as its undisclosed income.

In view of our aforesaid discussion, I delete the addition of Rs. 1,30,00,000 made by the AO under Section 68 of the Income Tax Act, 1961.”

7.2 We note that during the hearing, Ld. DR filed a copy of judgment dated 27.1.2014 in the case of CIT vs. Empir Buildtech Pvt. Ltd. of the Hon’ble High Court of Delhi wherien the Appeal of the Revenue was partly allowed and stated that the issue of deletion in dispute in the present case u/s. 68 of the I.T. Act is squarely covered by the aforesaid judgment of the High Court dated 27.1.2014, hence, he requested that the action of deletion in dispute by the Ld. CIT(A) may be cancelled and addition made by the AO may be restored.

7.3 On the contrary, Ld. Counsel for the assessee has stated that during the course of assessment proceedings, the assessee had furnished the confirmations with supporting documents in respect of all the six companies. Vide letter dt.22.11.2011 (page 11), the assessee had stated to the Id. A.O. that (i) all the six companies who had subscribed it's share capital during the year are very much available on the present addresses, as given in their confirmations and are regularly assessed to income tax; (ii) AO should make investigations either by correspondence or may summon the directors of such companies at your own level; and (iii) assessee by submitting all the documents relating to share capital subscribed by all the six companies, it has discharged its onus. The A.O. had made direct inquiries from these six companies. The summons issued to all these six companies were served upon them (no summon was returned unserved). After receiving the letters from the A.O, all these six companies had directly furnished their documents to the A.O. He further stated that the A.O. had sat back with folded hands on such information/documentary evidences and thereafter had made additions in the hands of the company. To support his contention, he filed a copy of judgment dated 21.1.2013 of the Hon’ble Delhi High Court in the case of CIT vs. Gangeshwari Metal Pvt. Ltd. wherien the Hon’ble High Court has decided the issue in favour of the assessee and stated that the present issue is squarely covered by the judgment dated 21.1.2013. He further filed a copy of 13 the decision of the ITAT, ‘C’ Bench, New Delhi in the case of ITO vs. GRG Steels P Ltd. & C.O. No. 475/Del/2012 in the case of GRG Steels P Ltd. vs. ITO wherein the Tribunal has decided the issue in dispute in favour of the assessee by respectfully following the judgment of the Hon’ble High Court of Delhi in the case of CIT vs. Gangeshwari Metal Pvt. Ltd. (Supra).

7.4 In the background of the aforesaid discussions and respectfully following the precedent in the case of CIT vs. Gangeshwari Metal Pvt. Ltd. (Supra), we are of the of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has decided the issue in dispute in favour of the assessee after appreciating the evidence filed by the assessee as well as various decisions rendered by the Hon’ble Supreme Court as well as Hon’ble High Court and the decisions of the ITAT Benches. We are of the view that the share application money received in the hands of the assessee company is properly explained by the assessee during the course of assessment proceedings as well as before the Ld. CIT(A) and even before us. Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A), hence, we uphold the same by rejecting the ground no. 3 raised by the Revenue.

8. With regard to issue raised in ground no. 4 relating to deletion of addition of Rs. 95,00,000/- made u/s. 68 of the Act in respect of unexplained credits introduced in the garb of unsecured loans shown to have been received from three corporate entities is concerned, we find that Ld. CIT(A) has elaborately discussed/given the findings on the issue in dispute vide para no. 7 to 7.7 from pages 27 to 30 of the impugned order. For the sake of convenience, we are reproducing the findings of the Ld. CIT(A) as under:-

“7. I have gone through the above submission of the appellant and have considered the facts and evidences available on record and have perused the AO's order and the case laws relied upon by the appellant.

7.1 As discussed earlier in this order, the primary onus is always on the assessee to prove the identity, creditworthiness and genuineness of the transaction the persons, from whom the assessee obtains the cash credit. Only when the assessee fails on his part to satisfy any of these 3 parameters (namely identity, creditworthiness and genuineness), only then the AO has the right to add such cash credit to the assessee's income under section 68 of the Act.

7.2 In the facts of the case in hand, I find that in respect of Mr. Manoj Kumar from whom the appellant received Rs. 5,01,000 as cash credit on 03.02.2009, no details whatsoever were made available to the AO, no confirmation, no PAN number, no details etc were made available with the AO, from which one could ascertain the identity and creditworthiness of Mr. Manoj Kumar.

The only details filed with the AO was the bank statement of appellant's own bank account for Financial Year 2009-10, which shows that money was allegedly been returned back.

Hence in view of these facts, I agree with AO, that the appellant has not discharged its onus and has failed to establish the identity and creditworthiness of Mr. Manoj Kumar, accordingly the additions made under section 68 is upheld.

7.3 However with regard to the 3 corporate entities namely ANG Automotive Components (P) Ltd (Rs. 45,00,000), Tara Estates (P) Ltd. (Rs. 15,00,000), and Synfonia Pharmaceuticals (P) Ltd. (Rs. 35,00,000), I find that the appellant filed the copy of certificate of incorporations, details from the website of Ministry of Corporate Affairs, copy of Income-tax return, Copy of balance sheet, Copy of confirmation in respect of these 3 entities. Apart from above, the appellant also filed the copy of its own bank statement for assessment year 2010-11, evidencing that the loan were re-paid bank to the above mentioned 3 entities and file the copy of bank statement only in respect of Tara Estates (P) Ltd. and not the bank statement of other 2 corporate entities.

7.4 The AO also asked the appellant to produce the director/principal officer of these 3 corporate entities from whom cash credit came. The appellant couldn't produce these parties on the ground that since their accounts have been squared up therefore they are not been able to persuade them to appear before the AO, instead the appellant provided the addresses of these entities and requested the AO to issue the summons to them.

7.5 In my considered view the appellant by filing the copy of confirmation, copy of Income Tax Return, and by providing the latest addresses to the AO has discharged the initial onus cast upon him to prove the identity, genuineness and creditworthiness of its creditor. Therefore it was the task of the AO to make the enquiries by issuing summons or deputing inspector etc. or other and external or internal sources etc. before coming to the conclusion that the 3 corporate entities "Nere sham and bogus, which I am afraid AO has not done. It is not the case of the AO that payments have not been received through account payee's cheque, therefore when AO was having the full address and appellant was not having any control over the squared up creditors, the onus was on the AO to call for the respective details from them, if there was any doubt about the identity and creditworthiness of the creditors. Though the bank statement of other 2 parties were filed during the appellate proceeding but as discussed the AO's case is not that payment is received in cash, but his case is that the 3 corporate entities who have given among as cash creditor are sham and bogus.

7.6 From the Income Tax details as well as balance sheet and other evidence of these 3 corporate entities, I find that all the corporate entities are assessed to tax in Delhi, their PAN number and Income Tax return are available on record. Further the balance sheet of 2 entities show that they had sufficient assets as will be evident from below, proves that they had the capacity to pay the amount to the appellant:

S. Particulars Assets in Balance Amount No. sheet Advanced to appellant

In coming to the above conclusion, I carry the support from the decision of the jurisdictional High Court in the case of CIT Vs. Real Time Marketing {P} Ltd. {306 ITR 35} {Delhi}.

8.1 On this issue , Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal.

8.2 On the contrary, Ld. Counsel for the Assessee relied upon the order of the Ld. CIT(A) and stated that the same may be upheld. In support of his contention, he submitted before us that during the course of assessment proceedings, the assessee had furnished the confirmations with supporting documents in respect of the three companies. He further submitted that the assessee vide letter dated 5.12.2011 & 21.12.2011 requested the AO to make direct inquiries from these three companies at his end by issuing summons u/s. 131 to them, while informing him that it had already repaid such loans to these three companies. He stated that the AO had neither issued summons to these three companies, nor carried out any inquiries from these three companies. Thereafter, the AO had made the addition in the hands of the Assessee.

8.3 In the background of the aforesaid discussions, we are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has rightly held that when the assessee had provided the AO with the latest address of the squared up cash creditor (as the assessee had no such control on them therefore they were unable to produce before the AO and no further enquiries have been done of any kind by the AO) Ld. CIT(A) found that even the basic step i.e. summons or query letter were not issued, to these cash creditor and not an iota of evidence has been collected and brought on record which indicates or prove that the cash credit money was assessee's own money, in such an event, he rightly held that AO is not correct in holding the Rs. 95,00,000 received from 3 corporate entities mentioned above are bogus, sham and they are engaged in providing accommodation entry. Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A), hence, we uphold the same by rejecting the ground no. 4 raised by the Revenue.

9. With regard to issue raised in ground no. 5 relating to deletion of addition of Rs. 15,00,000/- made u/s. 68 of the Act in respect of unexplained earnest money shown to have been received from two parties, by accepting the additional evidence without providing any opportunity to the AO is concerned, we find that Ld. CIT(A) has elaborately discussed/given the findings on the issue in dispute vide para no. 9 at page 32 of the impugned order. For the sake of convenience, we are reproducing the findings of the Ld. CIT(A) as under:-

“9. I have gone through the assessment order, the documents filed by the appellant during the course of assessment proceedings and also the submissions made by the appellant during the course of appellate proceedings. In my opinion, the AO was not justified in making addition of Rs. 15,00,000 on account of earnest Money, particularly when the property which was reflected as part of the inventory as on 31.03.2009 and the same is sold in the subsequent year for Rs. 35,00,000 and profit on the same has duly been reflected in and profit and loss account for assessment year 2010-11. Hence the addition of Rs. 15,00,000 made on account of earnest money is deleted.”

9.1 On this issue , Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal.

9.2 On the contrary, Ld. Counsel for the Assessee relied upon the order of the Ld. CIT(A) and stated that the same may be upheld. In support of his contention, he submitted that the assessee had received an earnest money of Rs. 15,00,000/- from Ms. Neelam Chugh against Property No. B-90, Ramprastha, Ghaziabad through cheques in the year. During the course of assessment proceedings, the assessee had furnished the confirmation from Ms. Neelam Chugh in r/o such earnest money of Rs. 15,00,000/-, while informing the AO that it had sold the said property to Ms. Neelam Chugh in the next year against total sale of Rs. 35,00,000/-. The AO had made addition of Rs. 15,00,000/- in the hands of the assessee. On the specific direction of the Ld. CIT(A), the assessee had furnished the details of sale / purchase made in FY 2009-10 and also the P&L A/c for the FY 2009-10. After verification, the Ld. CIT(A) had deleted the addition.

9.3 In the background of the aforesaid discussions, we are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has rightly held that AO was not justified in making addition of Rs. 15,00,000 on account of earnest Money, particularly when the property which was reflected as part of the inventory as on 31.03.2009 and the same is sold in the subsequent year for Rs. 35,00,000 and profit on the same has duly been reflected in and profit and loss account for assessment year 2010-11. Hence the addition of Rs. 15,00,000 made on account of earnest money was rightly deleted. Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A), hence, we uphold the same by rejecting the ground no. 5 raised by the Revenue.

10. With regard to issue raised in ground no. 6 relating to deletion of addition of Rs. 9,50,000/- made u/s. 68 in respect of unexplained cash deposit in Bank

account by accepting the additional evidence without providing any opportunity to the AO. On this issue , Ld. DR relied upon the order of the AO and reiterated the contentions raised in the grounds of appeal.

10.1 On the contrary, Ld. Counsel for the Assessee relied upon the order of the Ld. CIT(A) and stated that the same may be upheld. In support of his contention, he submitted that during the year assessee had sold one of its property (forming part of its stock in trade) for Rs. 9,50,000/- and deposited such sale proceeds in its bank account. During the course of assessment proceedings, the assessee had explained this fact to the AO. The AO had made addition of Rs. 9,50,000/- in the hands of the assessee. On the specific direction of the Ld. CIT(A), the assessee had furnished the property wise details of sales made in the year and closing stock as on 31.3.2008, 31.3.2009 and 31.3.2010. After verification the Ld. CIT(A) had deleted the addition of Rs. 9,50,000/-.

10.2 In view of above, we are of the considered view that no interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has rightly observed that during the year the assessee sold 2 of properties, namely Property no. 11, N.K. II Indirapuram (Rs. 75,00,000) and property no. 392, Shakti Khand-III, Indirapuram (Rs.9,50,000). We find that both the property sale are duly been reflected in assessment year 2009-10. The assessee had received the sale consideration of Rs. 9,50,000 in cash and the same was shown as a source of cash being deposited in the bank account. The AO had accepted the sales of Rs. 84,50,000 declared by the assessee, in these circumstances the action of the Ld. CIT(A) in deleting the addition of Rs. 9,50,000 on account of cash deposited in the bank account was a rightful one. Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A), hence, we uphold the same by rejecting the ground no. 6 raised by the Revenue.

11. With regard to issue raised in ground no. 7 relating to deletion of addition of Rs. 1,96,920/- made u/s. 50C(1) of the Act is concerned, we find that the it is an established fact that the assessee is engaged in the real estate business, therefore, the immovable properties are appearing in assessee’s books of account as stock-in-trade. Further from the perusal of Circular No. 8 of 2002 which relates to the provisions of Section 50C, it was seen that the provisions of Section 50C are only applicable to those assets which are capital assets and on which capital gain is to be computed. In view of above, in our considered opinion, Ld. CIT(A) has rightly held that since the immovable properties are treated as stock-in-trade accordingly, the provisions of section 50C(1) are not applicable, and the addition made by the AO was rightly deleted by the Ld. CIT(A). Therefore, we find no infirmity in the impugned order passed by the Ld. CIT(A), hence, we uphold the same by rejecting the ground no. 7 raised by the Revenue.

12. Other grounds are general in nature, hence the same are not being adjudicated.