TMI Blog2015 (10) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... hey cannot be considered for addition in the impugned AY. Accordingly, we delete the addition sustained by ld. CIT(A). - Decided in favour of assessee. - ITA No. 741/Hyd/2014, ITA No. 754/Hyd/2014 - - - Dated:- 4-9-2015 - SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For The Assessee : Shri Sunil Kumar Sanjay Kumar Sharda For The Revenue : Shri Konda Ramesh ORDER PER SAKTIJIT DEY, J.M.: These cross appeals by assessee and the department are against the order dated 24/02/14 of ld. CIT(A) VIII, Hyderabad for AY 200809. 2. While assessee is aggrieved with the addit ion of ₹ 33,50,000 sustained by ld. CIT(A) out of total addition of ₹ 80 lakhs made by AO on account of unexplained investment, department is contesting partial relief granted by CIT(A). 3. Brief ly the facts are, assessee a company is engaged in the business of construction and letting out of commercial space (warehouse) including equipments and providing logistics and infrastructure facility. Pursuant to search and seizure operat ion u/s 132 of the Act carried out in case of M/s MBS Jewellers Pvt. Ltd. and its group concerns, a search operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee cheque for distribution to land owners. It was submitted by assessee that the amount shown towards acquisition of land in the audited balance sheet for AY 200910 is ₹ 5,89,83,112. Reconciling the difference between the amount mentioned in the agreement of sale and the registered sale deed, it was submitted by assessee that apart from the price mentioned in the registered sale deed at ₹ 4 crores, an amount of ₹ 34,05,000 was paid to Shri G. Ranganath and the amount of ₹ 83,50,000 was paid to Shri Syed Asif for distributing to other land owners. AO af ter considering the submissions of assessee, however, observed that the general power of attorney given to Shri Syed Asif , is only in respect of 10 guntas of land for total consideration of ₹ 3,75,000, hence, it cannot be stated that ₹ 50 lakhs paid to Syed Asif is on account of purchase of land. Though, assessee submitted a memorandum of understanding executed with Syed Asif towards purchase of land, but, AO was not convinced with the same. He observed that as per the reverse side of agreement of sale executed on 20/11/2007, an amount of ₹ 28,51,250 was paid to four families totaling to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibility to clear off any disputes or litigat ion before executing the sale deed. Finally page 6 of the MOU also states that Sri Syed Asif will pay all the vendors through demand drafts as applicable and the balance amount of agreed sale consideration by way of cash on the date of execution of sale deed. (d) The AO is erroneous to hold that payment to Sri Syed Asif is for some other services and not related to land acquisition. (e) All the payments were accounted in the books and were mostly through bank except ₹ 5,50,000/- by way of cash . (f) The sequence of events were actually as under: S.No. Date Particulars 1 17/09/07 Memorandum of Understanding entered Mr.Syed Asif and Mr.Pramod Kumar Gupta for acquiring of land at hikballapur District, Karnataka 2 20/11/07 Agreement of sale entered between Coowners of land and Mr.Pramod Kumar Gupta for purchase of land admeasuring 15 acres 06 quntas 3 01/03/08 GPA entered between Co-owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land to the appellant.( Schudule A and B to the GPA-pages 21 and 22) (ii) Agreement of sale between the original land owners and the appellant company. (iii) The absolute sale deed between the original land owners and the company. (iv) MOU dated 17.09.2007 between Syed Asif and the appellant. (v) Account copy of Syed Asif in the books of appellant company. (vi) Account copy of land development charges totaling 1,37,85,000/- in the books of appellant company. (vii) Account copy of land in the books of appellant company indicating value of 5.89 crores by 31.03.2009. (viii) Detailed land account copy indicating value of 4.20 crore and which is part of 5.89 crores mentioned supra 5. Af ter considering the submissions of assessee in the light of the materials placed on record, ld. CIT(A) observed that af ter the registration of sale deed on 29/05/08, assessee has made payments of ₹ 33,50,000 on different dates to Shri Syed Asif . He observed that if the land was registered on 29/05/08, how can it be believed that agriculturist land owners would wait for another six months to receive sale amounts in instalments. He opined that while i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y ld. AR, when the entire payments have been ref lected in the books of account and assessee has made payment in cheque to Shri Syed Asif , there is no reason to disallow a part of such payment and treat it as unexplained investment. 7. Ld. DR, on the other hand, relied upon the reasoning of the AO. 8. We have considered the submissions of the parties and perused the orders of revenue authorities as well as other materials on record. As could be seen from the assessment order, the addition made by AO was on account of the fact that while the agreement of sale recorded the consideration to be paid at ₹ 5,17,50,000, the actual registered sale deed was for the consideration of ₹ 4 crores. He, therefore, treated the differential amount as payments made by assessee outside the books. However, it is a fact on record that assessee in its books of account as well as audited f inancial statements has shown an amount of ₹ 5.89 crores towards expenditure incurred for acquiring land. In fact, AO as would be evident, out of the amount of ₹ 1,14,05,000 treated to have been paid outside the books of account has accepted payment of ₹ 34,05,000 to Shri G. Rangana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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