TMI Blog2018 (6) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... k. All the necessary papers and documents have been found by the AO - thus we find no infirmity in the direction of the CIT(A) to delete the said addition - Decided in favor of assessee. - I.T.A. Nos. 627 to 629/Mum/2014 - - - Dated:- 13-6-2018 - Shri Shamim Yahya, AM And Shri Ravish Sood, JM Appellant by : Shri M. C. Omi Ningshan Respondent by : Shri Vipul Joshi ORDER Per Shamim Yahya, A. M. These are appeals by the Revenue directed against the respective order of the Commissioner of Income Tax (Appeals), pertaining to the assessment years 2002-03 to 204-05. Since the issues are common and connected and the appeals were heard together these are being consolidated and disposed of by this common order. ITA No. 627/Mum/2014 2. The grounds of appeal read as under: (1) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addtion of ₹ 2,02,72,000/- even though the assessee failed to discharge the onus u/s.68 of the I.T.Act. (2) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of ₹ 1,20,00,000/- even though the assessee fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-07-2000 60,00,000 b) 20-07-2000 60,00,000 c) 22-12-2003 15,00,000 d) 23-12-2003 20,00,000 e) 24-12-2003 10,00,000 f) 27-12-2003 10,00,000 6) Assessee entered into Memorandum of Understanding with the said Saigal for purchase of flat No. 1301 and 1302 for total consideration of ₹ 1,20,00, OOO/- in the said building. The assessee paid ₹ 60,00,000/- on 20-07-2000 by cheque No. 841542 drawn on OBC to Saigal Similarly, ₹ 60,00,000/- was paid by cheque No. 841541 to Saigal dt. 20-07-2000. 7) Confirmatory letter of Trambak Polypack Pvt. Ltd. confirming repayment of ₹ 55 lacs is enclosed herewith. 8) Trambak Polypack Pvt. Ltd subsequently sold the entire project to Mrs Gouri Khan. 9) Allotment of flat No. 1301 and 1302 was cancelled and as per deed of cancellation was entered into wherein Mrs Gouri Khan paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f flat booking. The assessee also claimed that same amount of ₹ 1,20,00,000/- was paid by him to Mr. Saigal on account of flat booking and theefore there is no taxable profit in-this transaction. However, the amount paid for the said booking has not been verified/ established by the assessee. Necessary evidences to establish that the assessee had paid any amount for such flat booking of flat No. 1301/1302 to Mr. Saigal were not provided. The assessee has further filed a copy of the deed of cancellation dated 23-08-2001 entered with M/s Trambak Polypack Pvt Ltd in which it has been mentioned that the one Shri Harsh K. Saigal has, vide agreements ' dated 18-07-2000 and 19-07-2000 assigned and transferred to the assessee all the benefits arising out of the allotment letter dated 23-11-1993. However, the said cancellation deed nowhere establishes that the assessee actually paid any amount to Shri Saigal on account of these two sale agreements referred in the cancellation.deed. The agreement of M/s Trambak Polypack (P) Limited with Mrs. Gouri S. Khan and Shri Shahrukfr Khan does not say anywhere that the said amount is a refund of any amount paid by the assessee. Further, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit of ₹ 1,20,00,000/- , the assessee has stated that he has deposited this money in Oriental Bank of Commerce on 23.08.2001 which was received from Shahrukh Khan Gauri Khan. It is explained that the assessee had booked a flat in 1st floor (Flat No.101) in the year 1994 with M/s. Trambak Polypack Pvt.Ltd. ('the builder') at 'Trambak Garden' and had paid ₹ 1,75,00,000/- to the Builder. Copy of letter dated 29th July, 1994 in stamp paper along with From 37-I and its annexure have been filed. Subsequently, the booking of the said flat bearing No.101 was cancelled by the assessee. Later on another fiat in the same building at 13th floor bearing No.1301 was transferred to the assessee which was originally allotted to one Mr. Harsh Saigal Ors. Mr. Saigal had paid a sum of ₹ 1,20,00,000/- to the builder. As per two agreement dated 18.07.2000 19.07.2000 Mr. Saigal transferred the flat No.1301 in favour of the assessee for ₹ 1,20,00,000/-. In short, the flat No.101 was cancelled and purchased flat No.1301. The builder then refunded a sum of ₹ 60,00,000/- on 20.07.2000 to the assessee and in turn the assessee paid ₹ 60,00,000/- to Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that memorandum of intent was entered into between TrambaK Polypack Pvt.Ltd. and Sharukh Khan. As per the said memorandum the amount paid by person who had booked the flats were to be refunded. The transaction entered into between the assessee and Saigais has no connection with memorandum of intent because assessee had stepped into the shoes of Saigal hence instead of amount being refunded to Saigal the same was now to be refunded to the assessee. The A.O. further observed that there is no confirmation from Saigal regarding receipt of ₹ 1,20,00,000/-When asked about this, the assessee stated that as per para (ii) , (iii) (iv) of page 2 of the deed of cancellation dated 23.08.2001 entered into between Trambak Poly Pack Pvt.Ltd. and th.e assessee, it is very clear that as per letter of allotment dated 23,11.1993 flat on 13th floor was allotted to Harsh K. Saigais and Others and pursuant to the said letter of allotment, Saigais had paid a sum of ₹ 1,20,00,OOO/- to the builder. Further as per two agreements dated 18.7.2000 and 197.2000 the said Saiga transferred flat on 13th floor to the assessee. The builder recognised the assessee as the allottee of the said flat and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded above shows that the amount received by the- appellant is towards purchase of the project by Smt. Gouri Khan and is of capital in nature. In so far as the appellant is concerned, he had purchased the allotment rights of flats from Shri Saigal vide MOU dated 18.7.2000 and 19.7.2000, for ₹ 1.20 crores and his rights by way of allotment of flat no.1301 1302 in the proposed project were cancelled in the year 2001. There is no profit arising to the appellant on' account of the said capital transaction. The AO has disregarded the above facts and brought the entire amount to tax as unexplained cash credits. I, therefore, do not find, any. justification in the above stand taken by the AO and delete the addition made on the said account. This ground of appeal is allowed. 8. Against the above order, the assessee is in appeal before us. 9. We have heard both the counsel and perused the record. The ld. Counsel of the assessee in his submissions reiterated the sequence of events as submitted above and referred to his letters in this regard filed before the Assessing Officer and the ld. Commissioner of Income Tax (Appeals). The ld. Counsel of the assessee further referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 and deposited with Vysya Bank. Assessee has asked Shri Raj Bastani to give confirmatory letter but it will take few days as matter is very old. 17) No adverse inference be drawn for non-submission of confirmatory letter on 23-12-2009. 12. Further, the ld. Counsel of the assessee also filed one confirmation from Shri Raj Basantani. However, the Assessing Officer noted that the said confirmation was not supported by any PAN, copy of return of income, bank details of Shri Raj Basantani. Therefore, the Assessing Officer held that even as the identity of the said party could not be established, let alone the credit worthiness or genuineness of the transaction. The Assessing Officer noted that despite opportunities, the assessee did not filed details in this regard. He held that the same is also drawn in the matter of credit of ₹ 2,00,000/-. He held that the assessee was not able to provide even the basic details like address, PAN, etc. for such credit of ₹ 2,00,000/- claimed to be loan taken from M/s. Rushi Realty Pvt. Ltd. Accordingly, the Assessing Officer added the afore-said amount of ₹ 2,02,72,000/-. 13. Against the above order, the assessee appeale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Overseas Branch. The continuity number of cheque issue can be seen from the statement submitted to your office for account No. 506 (Cheque Nos. 909281 to 289 all have been debited in the account) . A copy of confirmation is also filed. Further, the asseessee vide its letter dated 30.08.29012 submitted copies of Bank account of The Vysya Bank Ltd., Bandra (West) Branch, Mumbai from where the loan was advanced to Mr. Raj Basantani. The relevant portion is reproduced below:- Date Particulars Chq. No. withdrawal Deposits 23.10.2001 CL RAJ BASANTANI 87082 20271670 - Creditworthiness of Shri Raj Basantani is not proved with sufficient documentary evidence. However, in the affidavit sworn in, Shri Basantani has stated that the loan was repaid out of his own fund. It is also stated that he had enough overdraft facility with the Bank and in financial year 2001-02 total turnover of his group was approx. 200 ciore The AR of the assessee produced zerox copy of bank statement of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Considering the above report, the ld. Commissioner of Income Tax (Appeals) deleted the addition concluding as under: 7.2.1 In view of the above discussion, I find that following facts are undisputed. 1. The appellant had advanced total loan of Rs, 5*93,66, 16,1 /- to Raj Basantani, which has also been confirmed by Shri Basantani in his statement of oath recorded by the AO during the course of remand proceedings, 2. Shri Basantani has confirmed that he has not paid any interest on the above amount. 3. The amount of ₹ 2,02,72,000/- was received by the appellant from Shri Basantani vide cheque no. 87082 of his bank account with the Indian Bank. Shri Basantani, also confirmed in his statement recorded by the AO that he had enough overdraft facility with the above bank from which the amount was paid and the. said payment was towards part repayment of loan of Rs,5,93,66,161/-. 7.2.2 Therefore, the above facts show that the appellant had to recover an amount of ₹ 5,93,66,161/- advanced to Shri Raj Basantani, and the amount of ₹ 2,02,72,000/- received during the year from Shri Basantani's account is towards such repayment. I, accordingly, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y.2003-04. A survey action u/s.133A of the IT Act was conducted on the premises of M/s. Sandhu Builders, a firm in which the assessee is a partner. Consequent to the post-survey investigations carried out, it was noticed that there were certain credits in the bank accounts of the assessee which were prima facie not verifiable or ascertainable, that is whether the same have been considered as part of the income in A.Y.2003-04. These credits being ₹ 1,50,00,000/-, ₹ 20,94,481/- and ₹ 1,00,00,000/- deposited on 12.8.2002, 13.8.2002 and 18.10.2002 respectively, i.e. total of ₹ 2,70,94,481/- in the assessee's bank account with the Global Trust Bank. The assessment was, therefore, reopened by issue of notice u/s. 148 of the IT Act. In response to the said notice, the assessee filed return of income on 3.5.2010 declaring income of ₹ 3,343/-. The Assessing Officer vide letter dated 12.10.2010 asked the assessee to furnish copies of bank statements and explain the nature of above entries in his bank account. The assessee vide letter dated 25.10.2010 stated that all the above amounts were return of loan from Shri Raj Basantani, advanced to him earlier. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian Bank, Overseas Branch show that Mr. Basantani was enjoying credit facility from the said bank, however, no documentary evidence was produced to establish the claim that turnover of his group companies during the F.Y. 2002-03, was more than ₹ 200 crore. The AO, to ascertain the Banker's Pay Order dated 10.8,2002, .for ₹ 20,94,481/- issued by the SBI, Khar (West) Branch, in favour of the appellant, issued notice u/s. 133(6) to the Bank,. In response to the same, SBI confirmed the issue of Pay Order of ₹ 20,94,481/- in favour of the . appellant by debiting the account of Shri Basantani. He also served summons on the Indian Bank, Fort Branch to confirm the account and status of Shri Basantani. The Bank initially replied that Shri Basantani was not maintaining account from 1.4.2000 to 2003-04 in their branch. However, subsequently, vide reply dated 6.6.2011 and 7.6.2011, Indian Bank in response to notice u/s. 133(6) confirmed that Shri Basantani was maintaining account with the Bank. As for the balance amount of ₹ 1 crore, the AO has reported that a copy of account only of the appellant with OBC, was produced from which the amount of ₹ 1 crore was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel and perused the record. The ld. Counsel of the assessee in his submissions reiterated the sequence of events as submitted above and referred to his letters in this regard filed before the Assessing Officer and the ld. Commissioner of Income Tax (Appeals). The ld. Counsel of the assessee further referred to evidences in this regard filed before the Assessing Officer and the ld. Commissioner of Income Tax (Appeals). 26. Upon careful consideration, we find that this credit entry is also the repayment of loan from Shri Raj Basantani as discussed in ITA No. 628/Mum/2014 above. All the necessary documents in this regard have been produced by the assessee before the authorities below. This is a part of the refund of the total loan of ₹ 5,93,66,151/- given by the assessee to Shri Raj Basantani in the earlier years. Part repayment of the above loan has already been confirmed by us in our order as above. Hence, on this issue also, we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals). ITA No. 629/Mum/2014 27. The grounds of appeal read as under: (1) On the facts and in the circumstances of the case and in law, the learned CIT(A) erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er account of the assessee in their books of accounts: The Assessing Officer from the ledger account of the assessee in the books of Trambak Polypack noted that amount of ₹ 55 lakh had been received on account of cancellation of agreement. In respect of the other party, M/s Fresh Leasing and Finance P. Ltd, the Assessing Officer deputed an Inspector from his office to serve notice u/s.133(6) of the Act. However, the Inspector reported that no firm by the above name existed on the given address. Therefore, vide notice dated 2.11.2010 u/s. 142(1) of the Act, the AO asked the assessee to furnish the details of loans, source of fund, interest charged and received from the above two parties and their copy of return with Balance Sheet and P L account. The assessee, vide letter dated 12.11.2010 submitted that he had a fixed deposit with Indian Bank, which was encashed and from the same, loan of ₹ 75 lakh was given to Fresh Leasing and Finance Ltd, prior to the year 2001, and from the confirmation letter filed by M/s, Fresh Leasing and Finance Ltd, it can be seen that the above amount was received during the period 24.2,2004 to 23.3.2004, and the remaining amount of ₹ 55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the entire project was sold by M/s., Trambak Polypack Pvt. Ltd to Mrs. Gauri Khan and Shahrukh Khan, the said amount of ₹ 1.20 crore was received from them on behalf of M/s. Trambak Polypack Pvt. Ltd. I have, accordingly, deleted the addition of ₹ 1 .20 crore made in the Asst.Year. 2002-03. The AO in the remand report has confirmed that the amount of ₹ 55 lakh along with dates of deposits in the ledger account are1 tallying with the entries in the bank statement. His only objection is that cheque numbers of the above amounts totaling ₹ 55 lakh are not appearing in the said statement. The appellant's submission in this regard is, first of all, amount and dates are tallying which is also confirmed by M/s. Trambak Polypack Pvt. Ltd also. Secondly, the dates are not recorded in the statement in case of deposit of cheques and the same are recorded only in case of clearing of cheques issued by the account holder. 7.1.2 In view of the discussion made above, and in the appellate order in A.Y.2002-03, I hold that ₹ 55 lakh received by the appellant during the year is the balance amount out of ₹ 1.75 crore receivable by the appellant from M/s. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2.04 on this issue. 31. Against the above order, the assessee is in appeal before us. 32. We have heard both the counsel and perused the record. The ld. Counsel of the assessee in his submissions reiterated the sequence of events as submitted above and referred to his letters in this regard filed before the Assessing Officer and the ld. Commissioner of Income Tax (Appeals). The ld. Counsel of the assessee further referred to evidences in this regard filed before the Assessing Officer and the ld. Commissioner of Income Tax (Appeals). 33. Upon careful consideration, we find that in explanation for the credit entry in the bank account for ₹ 1,30,00,000/-, the assessee has claimed two sources as under: (i) ₹ 55 lacs: Rs.55 lacs returned from Trambak Polypack Pvt. Ltd. the said amount relates to an advance of ₹ 1,75,00,000/- paid to Trambak Polypack Pvt. Ltd. for booking of space as discussed in ITA No. 628/Mum/2014 above. Out of this ₹ 1,20,00,000/- was returned from Trambak Polypack Pvt. Ltd. earlier and the balance of ₹ 55 lacs has been received during this year. In view of all the factual details and the evidences already on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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