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TMI Blog2016 (5) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of land in the year under consideration. ii. Assessee's utter failure to justify its capacity to arrange a huge amount of Rs. 3 crores within 35 days particularly when it was having meager capital base of Rs. 1,00,000/- only without any other liquid assets/reserves, coupled with its failure to give any evidence in support of efforts made by it for arranging such amount. iii. Assessee's utter failure to produce evidence of efforts made by it to recover the amount in question. iv. Vendor's utter failure to produce even a single example of an agreement of purchase/sale containing similar terms and conditions as in the agreement with the assessee company. 2. While granting relief to the assessee on the above counts, reliance made by the Ld. CIT(A) Vs. Vishal Builders Ltd, 164 Taxman 615 appears to be misplaced as agreement in that case was with government body where as in the instant case it is between two private parties. 3. During the course of hearing, the Ld. DR submitted that he will press only Ground No.1. The other ground is, therefore, dismissed. 4. The assessee claimed a sum of Rs. 54,58,554/- as "Administrative & Other Expenses". The breakup of expenses shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. We hereby inform you that you had to make the final payment to us on before 31.01.2006 but you have not yet paid any amount. Time was the essence of this Agreement, therefore, we have forfeited your entire earnest money and our Agreement to Sell dated 26.12.2005 stands cancelled". f) 06.03.2006: A deed "Cancellation of Agreement to Sell" was executed between the parties where the assessee company and the vendor agree to the forfeiture of 50% of the earnest money i.e. Rs. 50 Lac. The remaining 50 Lac was refunded to the assessee company (Rs.37.50 lac on 06.03.2006 and Rs. 12.50 lac on 17.03.2006). g) 31.03.2006: Entries of loss and corresponding gain are passed in the books of the parties. 6. The assessee company owns some land which was acquired by it in the financial year 1998-99 and held by it as "inventories" (valued at Rs. 88,03,288/- as per the balance sheet as on 31.03.2006). No further purchases were made in the subsequent years. Nor has there been any activity by way of sale of land. The only year (except for the year under assessment) during which sales have taken place is the Financial Year 2000-01 (Land costing Rs. 25,18,850/- was acquired by the Govt of Rs. 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required to be made, failing which the forfeiture clause would stand triggered). Both the persons were asked whether such a forfeiture clause (where Time of payment has been made of essence) has been incorporated in any transaction involving immovable property with any other party. The reply on behalf of the assessee company (Answer to question No. 17) was that "no land was purchased by it during the year under assessment or in the past but it is a regular practice to incorporate forfeiture clause in the agreement". The Director of the vendor company also stated (vide answer to question no. 8) as follows:" Normally such clause is provided for in the agreements. However, for exact details of other deals containing such clauses, I shall have to refer to the agreements..." He was, therefore, asked to furnish copies of such agreements. Vide its letter dated 13/10/2008, the vendor company sent a copy of the papers purporting to be "Application Form" issued by the group companies to prospective applicants for registration and provisional allotment of residential plots in a proposed residential colony. The relevant clause (Clause no. 12 in the portion laying down the "basic terms and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd sole rested the entire burden of proving the said transaction as sham and bogus on the Assessing Officer which is not just and proper. The Ld. DR relied upon the judgment of CIT vs. Ganasamparna Advertising 2015 TOIL 600 Delhi High Court. The Ld. DR further submitted that the decision of the CIT (A) is perverse because the genuineness of the transaction was always doubted. There was no money with the assessee to purchase the land and the substantial evidence shows that the assessee was not in a position to fulfill the transaction at its threshold and, therefore, should have not take the forfeiture as its business loss. The Ld. CIT(A) should have remitted back the matter to the Assessing Officer for taking additional evidence to prove that the transaction was not genuine instead he has allowed the appeal of the assessee. 10. The Ld. AR submitted that the Assessing Officer has given its finding mainly on presumptions and assumptions and no efforts have been taken by the Assessing Officer to prove that the transaction was not permissible or the transaction was not genuine. The Ld. AR also produced all the documents related to the sale. The Ld. AR further submitted that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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