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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER
I.T.A. No.265/Asr/2022 Assessment Year: 2017-18
M/s Jove Enterprises Pvt. Ltd. Vs. DCIT, Central Circle-1, 5, Vasant Avenue, Near Jalandhar. Cheema Nagar Extn, Jalandhar. [PAN:AABCJ6451E] (Respondent) (Appellant)
Appellant by None. (Written submission) Respondent by Sh. S. R. Kaushik, CIT. DR
Date of Hearing 27.04.2023 Date of Pronouncement 15.05.2023
ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals),-5Ludhiana,[in brevity the CIT (A)] order passed u/s 250 (6) of the Income Tax Act 1961[in brevity the Act], for A.Y. 2017-
18.The impugned order was emanated from the order of the ld.JCIT (OSD),
I.T.A. No.265/Asr/2022 2 Assessment Year: 2017-18
Central Circle-1, Jalandhar, [in brevity the AO] order passed u/s 153C/143(3) of the Act.
The assessee has taken the following grounds: - “1. That the order passed by the Hon’ble CIT(A) dated 14.12.2022 is against the law and facts of the case.
That having regard to the facts and circumstances of the case, Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 153C r.w.s. 143(3) of the Act and without complying mandatory conditions u/s 153C/143 as envisaged under the Income Tax Act, 1961.
That having regard to the facts and circumstances of the case,Hon’ble CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making an addition of Rs.50,00,000/- u/s 69 of the Act, on account of alleged cash payment, without considering the fact of the case and submissions of the assessee.
That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.” 2. Brief fact of the case is that the assessment was completed u/s 153C by addition of Rs.50 lac related to the cash payment for purchase of property to Shri
I.T.A. No.265/Asr/2022 3 Assessment Year: 2017-18
Gundeep Singh. The addition was made u/s 69 of the Act in assessment. During
search proceeding the document was found. Accordingly, on basis of the copy of
the agreement, the investment of assessee was determined by a cash payment for
purchase of this property situated at 213-214, AGI Business Complex. The
assessee’s claim was that the entire transaction amount was paid through HDFC
Bank bearing a/c no 50200013186245. But the assessment was completed with an
addition amount of Rs.50 lac. Being aggrieved assessee filed an appeal before the
ld. CIT(A) and the ld. CIT(A) upheld the order of the ld. AO. Being aggrieved the
assessee filed an appeal before us.
During the hearing the ld. AR filed a letter and prayed that the adjudication
may be completed on basis of their written submission. The ld. AR depicted the
fact of the case in the written submission. The specific paragraph of the submission
is reproduced as below:
“OUR SUBMISSIONS Sir, it is submitted that during the course of assessment proceedings u/s 153C of the Act, assessee company was asked about payment made to Sh. Gundeep Singh on account of purchase of property/showroom situated as 213- 214, AGI Business Complex, to which assessee submitted that assessee company made payment of Rs.34,00,000/- through cheque( in actual payment for purchase of property was for Rs.31,50,000/- as Rs.2,50,000/- was self cash withdrawal which was mistakenly included in purchase of property)from the bank account maintained with HDFC Bank account no. 50200013186245, the detail of which is as under: Date Amount Remarks
30.07.2016 10,00,000/- Property purchase 10.08.2016 6,00,000/- Property purchase 11.08.2016 6,00,000/- Property purchase
I.T.A. No.265/Asr/2022 4 Assessment Year: 2017-18
16.08.2016 6,00,000/- Property purchase
29.08.2016 2,50,000/- Self Cash withdrawal and not for purchase of property 17.10.2016 3,50,000/- Property purchase
Total 34,00,000/-
Sir, the investments amounting to Rs 34,00,000/- was reflected in the name of Sh. Gundeep Singh (mistakenly stated as Gurdeep Singh and in actual payment for purchase of property was for Rs.31,50,000/- as Rs.2,50,000/- was self cash withdrawal which was mistakenly included in purchase of property and this Rs. 2,50,000/- should be added to cash in hand). The copy of Balance Sheet which was filed during assessment proceedings along with bank statement is enclosed herewith. Sir, Ld. AO stated that assessee company has made a payment of Rs. 50,00,000/- in cash for the purchase of property situated as 213-214, AGI Business Complex, Jalandhar which is reproduced on page 3 of the Assessment Order and to substantiate the same AO relied on photocopy of unregistered agreement found and seized from the business premises of Sh. Gundeep Singh which is reproduced on page 4-8 of the Assessment Order. Further Ld. AO relied on the submissions of Sh. Gundeep Singh filed in his own case wherein he accepted that he sold showroom no.213-214 AGI Business Centre for Rs.83,38,000/-, which is also reproduced on page 9-10 of the Assessment Order. Sir, in this regard it is submitted that assessee has never entered into any such agreement with Gundeep Singh as stated in the assessment order and has nevermade any cash payments of Rs.50,00,000/- against the purchase of property /showroom as stated by Ld. AO. Assessee has purchased the showroom for a consideration of Rs 31,50,000/- and all the payments for the same have been made through banking channel of the assessee company . Sir,Ld.AO had relied upon photocopy of unregistered agreement found at the premises of Sh. Gundeep Singh .During assessment proceedings Ld. AO provided photocopy of the alleged agreement and thereafter assessee company has requested to confront/provide the original agreement to verify the authenticity of the agreement and also requested for cross examination of the alleged person, as the assessee has never entered into such agreement and the signatures of the assessee was forged in the agreement but no opportunity was provided to assessee . Sir, considering all the facts of this case stated above it is submitted that addition made by the Ld. Assessing Officer on the basis of seized document is not justified on account of following reasons:
That assessee purchased property/showroom situated as 213-214, AGI Business Complex and made payment of Rs. 31,50,000/- through HDFC Bank account no. 50200013186245, the detail of payment is stated above. 2. That Sale deed is duly registered on 07.08.2019 and the copy of registered deed is uploaded herewith. 3. That the property was purchased by the assessee on the circle rate/ segment rate prevalent at the time of registration.
I.T.A. No.265/Asr/2022 5 Assessment Year: 2017-18
That the registry charges was paid from bank account of assessee company i.e. Jove Enterprises through account no.50200013186245, the copy of bank statement is uploaded herewith. 5. That Ld. AO relied on the photocopy of unregistered agreement. 6. That during assessment proceedings Ld. AO provided photocopy of the alleged unregistered agreement, thereafter assessee company requested to confront/provide the original agreement to verify the authenticity of the agreement and also requested for cross examination of the alleged person, as assessee has never entered into such agreement, but no opportunity was provided to assessee. 7. That assessee company has made payment through bank and the same has been reflected as investments in the Audited balance sheet of Jove enterprises, which has already been provided to Ld. AO. 8. That there is no concrete and credible material/evidence on record that could show that assessee company has made payment in cash. 9. That the alleged photocopy of unregistered agreement bears forged signature of the authorized signatory of the assessee company, that too only on the last page wherein no amount is mentioned, and no details of payment is mentioned. 10. That Ld. AO relied on alleged photocopy of unregistered agreement wherein amounts in cash received are stated, but no where it bears the signature of authorised person of assessee company or nowhere it is certified that the payment was made the payment in cash. 11. That search was conducted on Sh. Gundeep Singh and he might have accepted this alleged photocopy of unregistered agreement under pressure or he might have made disclosure on the basis of other documents found in his search. 12. That the entire addition in the hand of the assessee is based on the dumb document found, but there is no evidence against assessee company that the huge figure whatever be its quantum over and above the figure booked in the record and accounts changed hands between the parties. 13. That without prejudice to the above it is stated that, on perusal of the alleged photocopy of agreement and registered deed it is clearly visible that the signatures of Authorized Signatory i.e. Sh. Vinod Bhalla are not same and they are forged. 14. That agreement to sell is not treated as the transfer of the title of the immovable property. Thus, the agreement found in the residence of the Sh. Gundeep Singh has no value in the eyes of law. 15. That the registered sale deed results in the transfer of the asset. Thus , the deed was executed by the assessee company as on 07.08.2019 for a consideration of 31,50,000/-“ 4. The ld. DR has first drawn our attention in assessment order page 3
paragraph 3 of the assessment order which is reproduced as below:
“3. In response to the query, the assessee has stated that the assessee company had never entered into an agreement with Sh. Gundeep Singh regarding purchase of immovable property in question amounting to Rs.83,38,000/-. Further the assessee submitted that the assesses company had only given advance amounting to Rs.34,00,000/- during the year under consideration. The assessee has also requested to confront the copy of documents / agreement which was found and impounded during search from the residence of Shri
I.T.A. No.265/Asr/2022 6 Assessment Year: 2017-18
Gundeep Singh and opportunity to cross examination to Sh. Gundeep Singh with whom alleged agreement was found.”
Further the ld. DR invited our attention in the appeal order paragraph 5.3 page 6 which is reproduced as below: “5.3 Ground of Appeal No. 3: The brief of the case is as under: In the case of Sh. Gundeep Singh search u/s 132 was carried out on 08.09.2016. During the search, documents pertaining to the assessee M/s. Jove Enterprises Pvt. Ltd. were seized. It was noticed by the AO that Sh. Gundeep Singh had sold property bearing no. 213-214, AGI Business Centre, Jalandhar to M/s. Jove Enterprises Pvt. Ltd. vide agreement dated 29.07.2016 at a consideration of Rs. 83,38,000/-. M/s. Jove Enterprises Pvt. Ltd. had paid Rs. 50 lacs in cash (Rs. 10 lacs on 29.07.2016 and Rs. 40 lacs on 01.07.2016) as per the said agreement. Notice u/s 153C was issued by the AO concerned on the basis of said information and assessment was framed by the AO by treating the said payment of Rs. 50 lacs in cash as unexplained investment u/s 69 of the Income Tax Act, 1961. The AR in his grounds of appeal has inter-alia raised the following issues: (1)That the assessee had made a payment of Rs. 34 lacs as advance to Sh. Gundeep Singh through bank transfer. (2) No cash payment of Rs. 50 lacs were ever made by the assessee to Sh. Gundeep Singh. (Payment of Rs. 50 lacs in cash)
I.T.A. No.265/Asr/2022 7 Assessment Year: 2017-18
A perusal of the agreement to sell reveals that though an amount of Rs. 34 lacs has been paid by bank transfer but there is clear reference of Rs. 50 lacs paid through cash in the agreement. The said agreement is signed by the seller as well as the buyer, witnesses and duly notarized by the Notary. The date of payments of various instalments is clearly mentioned in the agreement.
The said agreement to sell has been seized during the course of search u/s 132. As per section 132(4)(A) where any books of accounts and documents are found in possession of any person in course of search then, it shall be presumed then such books of accounts/documents belong to the person and the contents of such documents are true. From the reading of the above provision of law, it is very clear that the basic presumption as per Section 132(4)(A) is satisfied in the case of the assessee. The onus is on the assessee to prove that the said document is not genuine or the contents of the same are not genuine.”
We heard the rival submission and relied on the documents available on the record. The entire addition was made by the ld. AO on basis of the copy of the agreement. But during hearing the registered deed was filed by the assessee in APB page 2 to 9 and the copy of the audited balance sheet of the assessee in APB page 1. Where it is clear that the entire amount Rs.31,50,000/- was paid
I.T.A. No.265/Asr/2022 8 Assessment Year: 2017-18
throughbanking channel. Supporting document was also submitted before the first appellate authority. The ld. DR had not made any contradictory submission against
the facts of the assessee. During assessment and in the appeal proceeding the issue was fully agitated by the assessee but it was not taken care by the revenue. Accordingly, the addition amount of Rs.50 lac is quashed.
In the result, the appeal of the assessee bearing ITA No. 265/Asr/2019 is allowed. Order pronounced in the open court on 15.05.2023
Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order