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TMI Blog2017 (10) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the Companies Act, 1956 and it is part of the group of companies known by the name of M/s. Flemingo/Bermaco group. A search and seizure action u/s 132(1) of the Act was carried out in the Flemingo/Bermaco group on 30.10.2009 and, as a consequence, an assessment u/s 153C r.w.s. 143(3) of the Act was also made on the assessee for the instant assessment year. The Assessing Officer notes that the assessee was incorporated on 20.03.2008 and it is engaged in the business of organising, undertaking, developing, executing all kinds of infrastructure activities and to construct, build, develop, maintain, operate, own and transfer infrastructure facilities of all kinds. In the assessment order, the Assessing Officer has discussed in detail the monies received by the assessee and other group concerns by way of loans, share application monies, advances, etc. from other concerns. Particularly, the Assessing Officer has noted that assessee received a sum of Rs. 20,00,00,000/- from M/s. IL&FS Transportation Network Ltd. in terms of an Agreement dated 18.04.2008. The assessee had explained that the amount was received as security deposit in terms of an Agreement (Memorandum of Underst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tancies rendered by assessee for various purposes as discussed above. Therefore, the receipts in the respective assessment year are required to be taxed in the hands of the group companies in which funds are received." Following his aforesaid approach, the Assessing Officer assessed the amounts of Rs. 20,00,00,000/- received from M/s. IL&FS Transportation Network Ltd. and Rs. 2,50,00,000/- from M/s. Utility Energy Tech and Engineers Pvt. Ltd. as revenue receipts in the hands of the assessee as received for professional services or consultancy rendered by the assessee. The aforesaid addition was challenged by the assessee in appeal before the CIT(A). The varied submissions made by the assessee have been considered by the CIT(A) who also called for a Remand report from the Assessing Officer. The Assessing Officer furnished a report and after considering the stand of the assessee thereof, the CIT(A) has proceeded to delete the addition of Rs. 2,50,00,000/- representing amount received from M/s. Utility Energy Tech and Engineers Pvt. Ltd. in its entirety, and with respect to the amount of Rs. 20,00,00,000 crores received from M/s. IL&FS Transportation Network Ltd., he has deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the CIT(A) to confirm the addition to the extent of Rs. 40,00,000/- merely because the amount was yet to be repaid. At the time of hearing, the learned representative has also referred to the Paper Book filed, wherein is placed the material that was before the CIT(A) on the basis of which the addition of Rs. 20,00,00,000/- has been restricted to Rs. 40,00,000/-, and contended that the explanation about the nature of amount cannot be accepted in part. 6. On the other hand, the ld. DR appearing for the Revenue pointed out that the CIT(A) has based his decision on the fact that the amount has been repaid by the assessee to the extent of Rs. 19,60,00,000/- and, therefore, the balance of Rs. 40,00,000/- which remained unpaid is of the nature as inferred by the Assessing Officer. Thus, he has defended the order of the Assessing Officer in this manner. The ld. DR also referred to the Agreement (Memorandum of Understanding) with M/s. IL&FS Transportation Network Ltd. to point out that none of the obligations set out in the said arrangement have been carried out by the assessee and, therefore, there was no justification for not repaying the impugned sum of Rs. 40,00,000/-. 7. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out by the Assessing Officer, except for the exceptions pointed and explained by the appellant. It is established that the advance received by the appellant has ultimately been repaid. It is seen that the amount of Rs. 19,60,00,000/- to IL & FS Transportation Network Ltd. out of the advance of Rs. 20,00,00,000/- and Rs. 2,50,00,000/- to Utility Energy Tech Engineers Pvt Ltd has been repaid and so the very basis of the addition of the AO on the basis that it is without any liability to repay becomes infructuous and so the addition of Rs. 22.10 crores (Rs.19.60 crores + Rs. 2.50 crores) is deleted. Out of the total amount of Rs. 20 crores, the appellant has given satisfactory documentary evidence relating to the amount of Rs. 19.60 crores and so the same is deleted. The balance amount of Rs. 40 lakhs is confirmed for non-repayment. Therefore, Ground of Appeal No.4 is partly allowed. The AO is directed to delete Rs. 21.10 crores and confirm Rs. 40 lakhs." 8. Insofar as the findings of the CIT(A) in relation to the amounts deleted are concerned, they are not in dispute before us. The grievance of the assessee is against the action of the CIT(A) in non-suiting the assessee fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its receipt. So however, it has been the case of the assessee that apart from the test of repayment, there is enough justification to say that the amount has been received for which assessee has a liability to either repay or render the services as envisaged in the MOU. Whether or not the said plea is tenable is relevant to decide the fate of the impugned sum of Rs. 40,00,000/-, but the same has not been addressed by the CIT(A). So far as the source of the credit is concerned, there is no dispute, and the only dispute is with regard to the nature of the amount and, in our considered opinion, the onus to prove the nature of impugned credit is entirely on the assessee. In our considered opinion, it would be in the fitness of things that the assessee is allowed an opportunity to demonstrate with positive evidence that with respect to the sum of Rs. 40,00,000/-, the liability to repay M/s. IL&FS Transportation Network Ltd. continues inspite of the fact that the arrangement envisaged in the Agreement (Memorandum of Understanding) dated 18.04.2008 has not fructified, a fact which is not in dispute. Since the aforesaid aspect requires a factual appreciation of the state of affairs, we de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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