TMI Blog2016 (10) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... o support the view of lower authorities. In view of these circumstances, the finding of lower authorities are upheld for the addition of and the balance addition is deleted. This grounds of appeal of allowed is therefore, partly allowed. Unexplained investment u/s. 69 in purchase agreement - HELD THAT:- Shri Santosh Kumar Lalwani had agreed to purchased 1/3rd of land for ₹ 43,27,400/- and paid ₹ 8 lakhs as advance for the same which means that the total value of the said land must be three times of ₹ 43 lakh meaning there by around ₹ 120-130 lakhs. Therefore, in the same way , Shri Vijay Jain, is very likely might have paid 1/5th of as advance as Bayana at ₹ 120/5=24 lakhs or ₹ 20 lakhs ). Since the assessee has failed to produce the agreement for purchase of land with Shri Devidas others, therefore, we are of the considered view that the lower authorities have justified in making addition of ₹ 20 lakhs on this account. AO has not only made addition based on the statement but also having regards to entire circumstances of the case. The circumstantial evidence and surrounding circumstances make the view of the AO as correct. We als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 131 of the Act was recorded from the assessee Shri Vijay Jain, director of the company. Wherein it was admitted that he has purchased shares of ₹ 35,000/- of M/s. Kunjika Construction Pvt. Ltd. and also invested in share application money at ₹ 44,28,000/-. The source of investment was claimed as under: From own capital/savings ₹ 1,75,710/- Loans from16 friends and relatives ₹ 3,00,000/- Loan from Shri Devi Dutta Yeolo ₹ 34,00,000/- From recovery of opening debtors ₹ 5,52,290/- Total ₹ 44,28,000/- 3. The AO examined the source and found that the assessee has raised loans of ₹ 34,00,000/- ( ₹ 29,00,000 on 21.11.2005 and ₹ 5,00,000 on 18.11.2005) from Shri Devdutta Yeolo. This source was found acceptable by the AO. However, the balance amount of ₹ 10,28,000/- (44,28,000- 34,00,000) was not found explained. It was further noticed that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited in the books of account is not satisfactory, there is prima facie evidence against the assessee with viz the receipt of income. The burden is on the assessee to rebut the same and if he fails to do so, it can be held against the assessee that it was a receipt of an income nature. The money came through cheque and was paid through banking channels was by itself not of consequence. The ld. CIT (A) further relied in the case of Sumati Dayal vs. CIT (1995) 214 ITR 801(SC) wherein it was held Any sum credited in the books of account may be added under section 68 ,if explanation offered about nature and source thereof is , in the opinion of the A.O. not satisfactory. In CIT vs. Durga Prasad More (1969) 72 ITR 807(SC) it was held even where no entry was made in the books of accounts in respect of certain receipt, the receipt was assessable as undisclosed income. The apparent must be considered as real until it is shown that there were reasons to believe that apparent was not real and taxing authorities are entitled to look into the surrounding circumstances, to find out the reality and the matter has to be examined by applying the test of human probabilities. Since the three th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opening balance , the assessee has applied funds of ₹ 43,500/- as investment in vehicle, ₹ 75,600/- towards jewellery and ₹ 15,780/- towards house hold equipment s and ₹ 1,21,481/- is cash and bank balance. This leaves the only amount of ₹ 3,65,450/- being opening capital balance, ₹ 36,840/- capital in business on account of closure of business, and ₹ 1,50,000/- being loan and advance, aggregating to ₹ 5,52,290/-(365450+36840+150000). Therefore, this amount can be treated as explained as against the source of cash deposits out of ₹ 7,38,000 claimed at Rs. I.e. (175710+552290) leaving the balance of ₹ 1,75,710/- as unexplained investment. As regards loans from friends and relatives of ₹ 3,00,000/- is concerned , we find that the assessee has failed to produce the sundry creditors for examination having been allowed sufficient opportunity of being heard by the AO on various dates viz. 03.07.2009, 03.08.2009, 10.08.2009, 14.09.2009, 07.10.2009 and finally on 04.11.2009. The assessee has filed confirmation only on 08.12.2009, which are stereo type letters without PAN thereon. Further, none of creditors is assessed to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- to Shri Vijay Jain . It was observed that the land so intended to be purchased from Shri Devidas and others , the assessee has made agreement of sale of around 1/3rd of land to Shri Santosh Kumar Lalwani for ₹ 43,27,4000/- and received advance of ₹ 8,00,000/- on 15.08.2005. The assessee has claimed that the amount of ₹ 7,85,000/- was deposited on 21.11.2005 with M/s. Kunjika Construction Pvt. Ltd. out of the amount received on 15.08.2005. The AO also noted that the assessee has not denied the contention of the statement of Shri Santosh Kumar Lalwani. The AO further observed that the assessee intentionally not produced the agreement executed between Shri Devidas and others and Shri Vijay Jain Shri Ajay Singh Kushwaha, because only agreement can took the truth open. The assessee has not produced source of amount advanced to Shri Devidas others. In view of the statement of Shri Santosh Kumar Lalwani; and not filing the copy of agreement entered into between the assessee with Shri Santosh Kumar Lalwani, the AO held that the assessee had paid ₹ 20,00,000/- as Bayana to Shri Devidas and others at the time of executing agreement for purchase of land. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised the appellant to register the property in the name of self or others in part or in full . Therefore, the contention of the appellant that this was only agreement cannot be accepted, because such authorization can`t be given by the seller only based on oral agreement. Further, no one would pay such huge amount of ₹ 8 lakh based on oral agreement, which cannot be displayed to anyone. Moreover, the amount claimed to be ₹ 51,000/- only towards oral agreement can`t form the basis for passing ₹ 8,00,000/- for one third of the land. The ld. CIT (A) further observed that affidavits submitted are self-serving evidence documents and given as after thought cannot be accepted. Accordingly, the ld. CIT (A) confirmed the addition by holding that as the appellant had received ₹ 8, 00,000/- as advance against agreement to sell 1/3rd of the said property from Shri Santosh Kumar Lalwani. Since the appellant failed to produce the copy of the first agreement executed between the appellant and the owners of the property which duly existed as mentioned in the copy of agreement executed between the appellant and Shri Santosh Kumar Lalwani. 11.Being aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd. relates to him. The source of this advance is claimed to be ₹ 8,00,000/- received from Shri Santosh Kumar Lalwani as advance towards agreement to sale of land to vide agreement executed on 15.08.2005. To verify this contention of the assessee, the AO examined Shri Santosh Kumar Lalwani and recorded his statement on oath on 01.12.2009 u/s. 131 of the Act. We find that Shri Santosh Kumar Lalwani has accepted that he had entered into an agreement to purchase land situated at Gram Nanakheda, Ujjain on 15.08.2005 and paid an amount of ₹ 8 lakh as advance because of Bayana being advance for land intended to be purchased by him. It is also noticed that the assessee along with Shri Ajay Singh Kushwaha have purchased the said land from Shri Devidas others by paying ₹ 51,000/- as Bryana amount. The assessee further stated that they have entered into an agreement for sale of 1/3rd land to Shri Santosh Kumar Lalwani on 15.08.2005 and received ₹ 8 lakh as advance out of which the assessee has deposited ₹ 19.05 lakh as advance in M/s. Kunjika Construction Pvt. Ltd. We find that Shri Santosh Kumar Lalwani has also accepted this fact and the AO has accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t placed at paper book page 36 of the assessee, which find place at page 5 of assessment order also and same is referred in question 14 of statement of Shri Santosh Kumar Lalwani, which clearly shows that the there is a written agreement with the assessee from the owner of land and as written in the said agreement, they have right to sell the property and register the property in the name of self or others in part or in full. Further, in reply to question 14 of his statement (Shri Santosh Kumar Lalwani) , has clearly stated that he has entered into this agreement and paid a sum of ₹ 8 lakhs after seeing the executors of said agreement for purchase of 1/3rd part of land had an agreement with original owner of the land in which it was clearly mentioned that they have right to sell the said property and so far as he remember they have paid ₹ 20 towards Bayana for the purchase of said land. We also find that Shri Santosh Kumar Lalwani had agreed to purchased 1/3rd of land for ₹ 43,27,400/- and paid ₹ 8 lakhs as advance for the same which means that the total value of the said land must be three times of ₹ 43 lakh meaning there by around ₹ 120-130 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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