TMI Blog2015 (12) TMI 1529X X X X Extracts X X X X X X X X Extracts X X X X ..... e could not adduce any reason for not completing the sale. It is quite unusual that agreement of sale has been prepared on stamp paper which was purchased almost two years back. Further, there is nothing in the company’s books to indicate that any such transaction has been taken during the relevant financial year under consideration. The assessee is continuing to enjoy the benefits of the property by getting rent from the company. The assesse contention is that the property is given as collateral security to bank to avail the loan for the company business purpose. But, from this fact alone we cannot come to the conclusion that the company is having the possession of the property and the assessee has entered into a sale agreement. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 142(1) of the Income-tax Act, 1961 (hereafter called as the Act ) was issued on 27.11.2007, requesting assessee to file return of income on or before 17.12.2007. In response to this notice, the assessee filed a return of income on 20.3.2009 declaring total income of ₹ 6,55,900/-. The case was selected for scrutiny and accordingly notice u/s 142(1) of the Act along with questionnaire was issued to the assessee. In response to show cause notice, the assessee s authorized representative appeared from time to time and furnished the information called for. During the course of assessment proceedings, the assessing officer found that as per the books of accounts of NEPPP Ltd., the assessee has received an amount of ₹ 35,68,404/-. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. made the additions purely on guess and surmises without considering the fact that all debit balances cannot be considered as loan or deposit. The assesse further submitted that she had received the amount from the company towards sale of property, to this effect furnished a copy of the sale agreement entered into with the company. The assessee further submitted that she did not derive any individual benefit from the said amount, as this is not a loan or advance from the company. The assessee further submitted that just because the amount was shown as director s advance in the company s books of accounts, it cannot be considered as loan or advance to the assessee. The A.O. is required to judge whether the nature of transaction i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of the assesse, submitted that the debit balance appearing in the Company books in the name of the assesse is the advance paid for purchase of property. The A.R. further submitted that the assesse entered into sale agreement with the company and received money towards advance. The A.R. further submitted that she did not derive any individual benefit from the said amount, as the possession of property was already with the Company and company given the said property as collateral security to bank for availing loan for the company business. The A.R. further submitted that just because the amount was shown as director s advance in the company s books of accounts, it cannot be considered as loan or advance to the assesse within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erusal of the ledger account, we noticed that there are credits in the account in the form of bank receipts, remuneration and rent. The net effect of these transactions appears debit in the name of the assessee for an amount of ₹ 35,68,404/-. We also examined the copy of sale agreement filed by the assessee and noticed that the said sale agreement is unregistered one, which is also entered in the year 2005, on the stamp paper which was purchased in the year 2003. The assessee could not adduce any reasons for using the stamp paper purchased almost 2 years back for entering the sale agreement. As stated by the CIT(A) in his order, the sale transaction is not completed even now. The assessee contended is that since, the company is unable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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