TMI Blog2018 (10) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the hands of the assessee. Accordingly, the order of the ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed. - ITA No.185/RPR/2014, ITA No.186/RPR/2014 And ITA No.314/RPR/2014 - - - Dated:- 12-10-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER ANDMS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Department : Shri R. K. Singh, CIT-DR For The Assessee : Shri R. B. Doshi, CA ORDER PER R. K. PANDA, AM : ITA Nos.185 186/RPR/2014 filed by the Revenue are directed against the separate orders dated 23.05.2014 of the ld. CIT(A), Raipur (CG) relating to assessment year 2006-07 respectively. ITA No.314/RPR/2014 filed by the Revenue is directed against the order dated 27.08.2014 of the ld. CIT(A), Raipur (CG) relating to assessment year 2006-07. Since common grounds of appeal have been taken by the Revenue in all these three appeals, therefore, they were heard together and are being disposed of by this common order for the sake of convenience. 2. First, we take up ITA No.314/RPR/2014 in the case of Taral Modi as the lead case. 2.1 Facts of the case, in brief, are that the assessee is an individual and derives income from house p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrates transaction of sale of land and sharing of profit out of it by the outgoing stake holders mentioned in the agreement. As already mentioned earlier, the assessee is specified to be the beneficiaries from this devolution of the profits worked out and included in the agreement. The said company M/s. Aarti Infrastructure Buildcon Limited was having receipts from sale of land also. In the accounts for financial year 2007-08, the sale of lands include sale of land at Mowa which was sold for ₹ 3,53,52,000/- and included in the accounts of head-office. From its ledger account, it was also found that a land was sold for ₹ 2,95,20,000/- on 13/03/2008 to one M/s. Purandar Promoters and Developers Private Limited vide sale deed on the same date. A copy of the sale deed was found in the office premises of the said company and seized under identification mark A/3/30 containing pages from 1 to 197. As per this document, the market value adopted for stamp duty calculation was ₹ 3,68,90,000/- whereas the sale was registered at much lower amount of ₹ 2,95,20,000/-. The payment was made through one demand draft of ₹ 1,80,00,000/- bearing number 018122 dated 18/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was advanced by the company M/s. Aarti Infrastructure Buildcon Limited in their case but by itself is not convincing. The fact that the impugned land was ultimately sold and that valuation of its price for stamp duty purposes is on lower side, does not preclude the possibility of the transaction taking place in the manner amount as appearing from the seized documents. Thus there are umpteen cases where the actual sale price is much higher than the valuation for stamp duty purposes and this is a common feature in transactions relating to sale of lands. The company also contended that funds represent inter-corporate transfers but considering the circumstances in totality the argument does not substantiate that the sale of the land was done in other manner than as appearing in the seized document. Hence the assessee failed to clarify his position from the accounts vis- -vis the situation appearing out of the execution of the above referred agreement. 6. The Assessing Officer further observed that the agreement clearly vests with the assessee the right and entitlement for compensation from M/s. Aarti Infrastructure Buildcon Limited equivalent to ₹ 2,61,50,496/- from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of M/s Aarti Infrastructure Buildcon Ltd. deleted the addition made by the Assessing Officer by observing as under :- 6. I have carefully gone through the assessment order and submissions of the appellant. The addition has been made by the AO holding that as per the agreement dated 01.04.2006, the appellant was entitled to the amount of ₹ 2,61,50,496/-. A perusal of the copy of agreement shows that major amount is comprised of share of appellant in the alleged undisclosed sale consideration of land sold by Aarti Infrastructure and Buildcon Ltd. (hereinafter referred to as AIBL) to Suncity Project Pvt. Ltd. On the basis of this very agreement, an addition of ₹ 9,17,91,005/- was made by the AO as undisclosed capital gain in the case of AIBL. The issue covered by this ground of appeal is thus identical to Ground No. 1 in Appeal no. 30/13-14 in the case of M/s Aarti Infrastructure and Buildcon Ltd. for AY 2008-09. The said assessee had also filed an appeal which has been decided in assessee's favour vide order dated 13.08.2013. Since the issue covered in this appeal is already decided in the above appeal, for the reasons detailed in the opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 397741 305 121311005.00 20.01.2006 18122 18000000.00 Aarti Buildcon Pvt. Ltd. (407741-10000 For CSEB) 05.06.2006 864496 10000000.00 Rajeev Agrawal 13.06.2006 864642 11520000.00 Aarti Buildcon Pvt. Ltd. 26.06.2006 864800 20000000.00 Aarti Sponge Pvt. Ltd. 04.07.2006 865067 20000000.00 Aarti Buildcon Pvt. Ltd. 29.07.2006 196882 20000000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no enquiry was made by the A.O. to support his conclusion. It is also not the case of the A.O. that the buyer had recognized the cost of the land i.e. asset at ₹ 12,13,11,005/-. It is not the case of the A. O. that the actual sales consideration was agreed between the appellant and the buyer at ₹ 12,13,11,005/- and not at ₹ 2,95,00,000/- which transpired from the Agreement to Sale which is a common procedure adopted by the parties to protect their interest. Conversely, the action of the A.O does not derive any strength from any such Agreement to Sale . The A.O. has referred to the agreement dated 01.04.2006 wherein sum of ₹ 10,33,11,005/- is appearing as receivable from Suncity Project Pvt. Ltd and share of Party No.2 and 3 in the said agreement. It is gathered that the A.O. has drawn nexus between the said agreement between the directors of the appellant company in their capacity as directors and also in their individual capacity for distribution of assets of the companies. I have perused the said agreement dated 01.04.2006, from the perusal of the Table in para 3 of the assessment order, it is clear that the funds were received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence, entry in any records, documents etc. was found during search. I find that the conclusion drawn by the A. O. is not deriving any strength from the enquiries conducted by the A.O. from Mr. Kishore Atlani i.e. the person from whose possession the Pen Drive was seized. I am convinced that the sums referred by the A.O represents loan received by various persons of the group and out of the sums received, loans have been repaid also by the parties including the appellant which cannot be construed as an afterthought as the repayments were made much earlier than the search. 1 am convinced that the sums do not represent receipt of sales consideration to the tune of ₹ 12,13,11,005/-. As the sums were repaid, there is no question of holding the same as sales consideration giving rise to capital gain. It is only the real income which gets charged as income under the Income-tax Act as pointed out by the Hon'ble Supreme Court in State Bank of Travancore v. CIT (1986) 158 ITR 102 (SC) later superseded by the decision in UCO Bank v. CIT (1999) 237 ITR 889 (SC) the concept of real income has certainly to be applied in judging what the assessee has received is income or not. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which necessary entries were made represented only hypothetical income and the impugned amounts as brought to tax by the ITO did not represent the income which had really accrued to the assessee-company during the relevant previous years. The High Court, in our opinion was in error in upsetting the said view of the Tribunal. 12. Looking to the facts and circumstances of the case, as also decisions cited above, the addition made by the A.O. cannot be sustained. Hence, the addition is deleted. 6.1 The findings given in the above referred appellate order are applicable in the present appeal also for the reason that the issue involved in both the appeals is identical. The addition has been made in the hands of appellant by the A.O based on the contents of agreement dt. 01.04.2006, which was also the subject matter of dispute in the appeal of Aarti Infrastructure Buildcon Ltd. A clear finding has been given in the above appellate order that the agreement dt. 01.04.2006 is of no avail for the AO as it is illegal, invalid, un-implemented and none of the party to the agreement ever fulfilled its part of the agreement. When no undisclosed capital gain is earned by Aart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the case of DCIT vs. M/s. Aarti Infrastructure Buildcon Ltd. vide ITA no.30/RPR/2013 order dated 15.02.2018 for assessment year 2008-09 and submitted that the Tribunal after considering all the aspects has dismissed the appeal filed by the Revenue. Since in the instant case also the addition has been made by the Assessing Officer on the basis of the documents seized from the premises of M/s. Aarti Infrastructure Buildcon Ltd. and related persons, therefore, this being a covered matter in favour of the assessee the grounds raised by the Revenue should be dismissed. 11. The ld. DR on the other hand heavily relied on the order of the Assessing Officer. 12. We have considered the rival arguments made by both the sides and perused the material available on record. We find the Assessing Officer on the basis of documents seized from the premises of M/s. Aarti Infrastructure Buildcon Ltd. and its directors which were belonging to the assessee initiated proceedings u/s 153C in case of the assessee and, thereafter, made addition of ₹ 2,61,50496/-. While doing so, he observed that the assessee is entitled to receive compensation equivalent to 2,61,50,496/- which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receive was ₹ 7,91,005/-. The aforesaid ₹ 12,05,20,OOO/- was received by cheque as detailed hereunder: Name of recipient Date Amount Aarati Buildcon Ltd. 20.1.2006 1,80,00,000.00 Rajeev Agrawal 5.6.2006 10,00,00,000.00 Vimal Agrawal 5.6.2006 20,00,00,000.00 Aarati Buildcon Ltd. 13.6.2006 11,52,00,000.00 Aarati Sponge (P) Ltd. 26.6.2006 20,00,00,000.00 Chhagan Lal Mundra 27.6.2006 10,00,00,000.00 Aarati Buildcon Ltd. 4.7.2006 11,00,00,000.00 12,05,20,000.00 20. Further, during the course of search at the residential premises of Shri Suresh Atlani, one agreement marked as LPS A-7/13 was also found. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the said land was ₹ 2,95,20,000/- only. The stamp duty value of the said land was ₹ 3,68,90,000/- at the time of execution of sale deed. Section 43CA was inserted in the Statute by the Finance Act 2013 w.e.f. 1.4.2014 and, therefore, not applicable in the assessment year under appeal. Nowhere in the course of search, any agreement for the said sale of land in question for an amount other than ₹ 2,95,20,000/- was found. On the basis of excel sheet contained in the pen drive, the Assessing Officer inferred that the entire amount of ₹ 12,13,11,005/- received/receivable from SUNCITY Project Pvt. Ltd., was on account of sale of the land at Mowa whereas the explanation of the assessee was that on the basis of inflated and projected value of the land of which development was to be carried out by the assessee and its other associates, the SUNCITY Project (P) Ltd., agreed to investment ₹ 12,13,11,005/- with the assessee and its associates as unsecured loan and share application, etc. for becoming a future partner in the development of the said land. However, this deal could not be materialized and the loan etc received from SUNCITY Project (P) Ltd., was re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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