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2022 (3) TMI 619 - AT - Income TaxAddition on protective basis u/s 69 - money paid for purchase of lands - Difference of amount as per sale agreement and registered deed - On receipt of information from Investigation Wing, Guntur, AO found that Shri G.Punna Rao has shown receipts from consideration on account of sale of agricultural land to the assessee for more than the amount mentioned in registered deeds, whereas the books of accounts of the assessee depicts only the registered value - assessee has contended that the agricultural lands were purchased from Shri G.Kalyan Babu for the purpose of construction of spinning mill, but not entered into any agreement with Shri G.Kalyan Babu before purchase of the property - HELD THAT:- Revenue made substantive and protective assessments in the hands of Shri Punna Rao and the assessee company. But there is no evidence to show that the said Shri Punna Rao is the owner of the property. As per the agreements of sale as well as the sale deeds, one Shri Kalyan babu, is the owner of the lands and he has entered into an unregistered agreement of sale in favour of Shi Masthan Rao, but he executed registered sale deeds in favour of the assessee company. Assessee company never entered into any agreements of sale with Shri Kalyan Babu. There are no recitals in the agreements of sale that the assessee company has purchased the land. Therefore, one thing is clear that there is no seller and buyer relationship between Shri Punna Rao and the assessee company. Thus, the contention of the revenue has no legs to stand. Some portion of payments were made through cheques which were issued by the assessee company and the said cheques photostat copy was affixed on the agreement of sale as acknowledgement - Unregistered agreement for purchase of the property cannot be material to rely on, when the registered sale deed has been produced and the same shows that the property was purchased at particular price. According to us, the agreement of sale loses it’s character, the moment, the registered sale deed is executed. The property has been purchased at a higher price than that of amount mentioned in the purchase deed, the burden to prove is heavily placed on the AO to establish the said fact. After considering the above said facts, we are of the considered view that the AO as well as Ld.CIT(A) have done guess work while coming to conclusion that the price of the property is more than mentioned in the sale deed. In the present case on hand, as discussed above, there is no seller, buyer relationship between Shri G.Punna Rao and the assessee company. Therefore, the protective assessment which was made in the hands of the assessee company is not sustainable. In this case, except the oral statement of Shri G.Punna Rao, there is no other piece of evidence to establish that the amount of sale consideration was paid by way of cash to Shri Punna Rao by the assessee company. Therefore, we allow the ground No.2 raised by the assessee.
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