TMI Blog2018 (2) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... have been considered for levy of penalty. Coming to the balance amount, it is the Assessee’s contentions that these are advances received for sale of apartments. The statement recorded in the course of survey do indicate that Assessee has taken over certain flats being constructed by the firm for individual trading / construction business, but assessee admitted in the course of survey that these are borrowed on promissory notes. Subsequently Assessee retracted statement to submit that these were advances received and relied on copies of the agreement of sale impounded along with promissory notes. During the course of present hearing, it was pointed out that there are only three promissory notes involving Sri Polisetty Venkateswarlu (Rs. 5 lakhs) Konda Venkateswalu (Rs. 2.50) lakhs and T. Harshavardhan (Rs. 3 lakhs) and for the balance of amounts, there were no promissory notes at all. A.O did not examine these aspects and relied on the statement alone holding that all the amounts were received by way of promissory notes. This aspect require examination by A.O. Thus set aside the order of the A.O U/s 271Dand restore the entire issue to the file of the A.O for examination of facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No Date Details of promissory notes Amount received Amount repaid 1 06.05.2010 P. Venkateswarlu 5,00,000 2 06.05.2010 Konda Venkateswarlu 2,50,000 3 2008 D Raju 4,00,000 4 2009 D Raju 4,00,000 5 2009 D Raju 4,00,000 6 2009 D Srinu 4,00,000 7 2009 D Srinu 2,00,000 8 2009 Y Murthy 2,00,000 10 2008 N Malla Reddy 3,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 N Malla Reddy 3,00,000 307 Page 71 to 74 AR-PB Total 19,50,000 Balance off ered to tax f or A.Y 2010-11 14,00,000 4. Ld. DR however, submitted that Assessee has not supported the contentions and referred to the detailed order of the CIT(A). It was submitted that the Assessee admitted that these are cash loans and agreement of sale is an afterthought. 5. I have considered the rival contentions and the paper book placed on record. As far as the documents stated have been impounded and placed on record, there are certain agreements of sales which indicate receipt of money. However a statement placed at page No. 33 with the index list of sale agreements indicate the following details: Sl. No Name Flat Advance Amount 1 Konda Venkateswarlu 303 1,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the provisions of Sec. 269I, therefore levy of penalty u/s 271E of the Act is not warranted. Therefore the levy of penalty u/s 271E is cancelled and appeal in ITA No. 1005 is accordingly allowed. 7. Now coming to the levy of penalty u/s 271D, both A.O and CIT(A) erred in confirming the amount without examining the facts. To the extent, Assessee has admitted the income, out of the borrowed amounts, there cannot be any penalty u/s 271D, therefore ₹ 13.50 lakhs admitted by Assessee should not have been considered for levy of penalty. Coming to the balance amount, it is the Assessee s contentions that these are advances received for sale of apartments. The statement recorded in the course of survey do indicate that Assessee has taken over certain flats being constructed by the firm for individual trading / construction business, but assessee admitted in the course of survey that these are borrowed on promissory notes. Subsequently Assessee retracted statement to submit that these were advances received and relied on copies of the agreement of sale impounded along with promissory notes. During the course of present hearing, it was pointed out that there are only three promis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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