TMI Blog2020 (1) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961 which attracts the provisions of in that section as the said advance is in the nature of business advance which did not fall within the ambit of provisions of section 2(22)(e) of the Income tax Act, 1961. It it is the company which owes the assessee the money rather vice-versa, it is unequivocally proved that the advance received from the company by the assessee is in the nature of trade advance against the booking of commercial place being built by the assessee, we hereby decline to interfere with the order of the ld. CIT (A) in deleting the addition made by the AO u/s 2(22)(e). - Decided against revenue - ITA No. 6892/Del/2015 - - - Dated:- 26-12-2019 - Sh. H. S. Sidhu, Judicial Member And Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Akshat Jain, CA Sh. Rajat Jain, CA For the Revenue : Ms. Nidhi Srivastava, CIT DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been fi led by the revenue against the order of ld. CIT (A)-XXVI, New Delhi dated 12.10.2015. 2. The only one ground raised in this appeal reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years. The AO also held that the expenses paid or amount transferred to different persons by M/s Apra Auto India Pvt. Ltd. on behalf of the assessee also came under the purview of deemed dividend. The AO placed reliance on the following judgments: Walchand Co. Ltd. vs CIT (1975) 100 ITR 598(Bom) CIT vs. K. Shrinavasan 50 ITR 788 CIT vs. P. Sarada 154ITR 387 (1985) (Mad) MD Jindal vs. CIT 164 1TR 028 (Cal) (1987) Tarulata Shyam vs. CIT 108 ITR 345 (1977)(SC) Rajesh P. Ved vs. AC1T 001 ITR 275 (ITAT Mumbai) (2010) Ms. Sarada P vs. CIT 229 ITR 444(SC) (1998) 6. During the arguments before us, the ld. DR argued that the trifurcation of the total amount into three different heads as i) Advance against commercial building ₹ 5,62,00,000/- ii) Anumod Sharma (expense account) ₹ 73,76,584/- iii) Anumod Sharma ledger ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 7,00,00,000/- and has received advance of ₹ 5,62,00,000/- against sale of such commercial space from M/s Apra Auto (India) Private Limited. However, the said company was unable to pay the total consideration upto scheduled date as per Clause 5 and 6 of Buyer s agreement, therefore the said agreement was terminated and the assessee refunded the said advance received to the said company during the financial year under consideration. The amount of ₹ 10,87,21,000/- shown as given to the assessee and amount of ₹ 10,84,00,000/- received from the assessee includes amount paid on account of advance of ₹ 5,62,00,000/- against purchase of commercial space and also refund of ₹ 5,62,00,000/- after termination of the said agreement. 9. We find that the assessing officer has invoked section 2(22)(e) of the Income tax Act, 1961 by treating the entire payments made by M/s Apra Auto (India) Private Limited only on the basis that the assessee has received huge amount throughout the year from the said company. We also note that the assessee has not taken any loan from M/s Apra Auto (India) Private Limited during the financial year under consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Repaid To Anumod Sharma 100,000 15,684,793 24/05/2011 Received from Anumod Sharma 50,0000 16,184,793 26/05/2011 Repaid To Anumod Sharma 5,700,000 10,484,793 30/05/2011 Repaid To Anumod Sharma 50,000 10,434,793 07/06/2011 Received from Anumod Sharma 250,0000 12,934,793 14/06/2011 Received from Anumod Sharma 900,0000 21,934,793 22/06/2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id To Anumod Sharma 500,000 19,374,793 11/08/2011 Repaid To Anumod Sharma 100,000 19,274,793 20/08/2011 Repaid To Anumod Sharma 61,000 19,213,793 26/08/2011 Repaid To Anumod Sharma 70,000 19,143,793 27/08/2011 Repaid To Anumod Sharma 200,000 18,943,793 30/08/2011 Repaid To Anumod Sharma 600,000 18,343,793 02/09/2011 Repaid To Anumod S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,000 12,293,793 22/11/2011 Repaid To Anumod Sharma 30,000 12,263,793 01/12/2011 Repaid To Anumod Sharma 500,000 11,763,793 01/12/2011 Repaid To Anumod Sharma 300,000 11,463,793 03/12/2011 Repaid To Anumod Sharma 400,000 11,063,793 08/12/2011 Repaid To Anumod Sharma 400,000 10,663,793 02/01/2012 Repaid To Anumod Sharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the assessee has not taken any loan from the said company, while the assessee has actually given loan and received repayment during the financial year under consideration of loan given to M/s Apra Auto India Private Limited. 11. We find that the assessee has entered into buyer's agreement with M/s Apra Auto (India) Private Limited for sale of 7000 Sq. Ft. commercial space at Signature Tower - II, Sector - 15, Gurgaon, Haryana for a consideration of ₹ 7,00,00,000/- and received advance of ₹ 5,62,00,000/- against sale of such commercial space from M/s Apra Auto (India) Private Limited. As per the buyer's agreement, the buyer, M/s Apra Auto (India) Private Limited has to pay total consideration upto 31st December 2011. The buyer has paid ₹ 1,40,00,000/- as advance payment to the assessee vide cheque no. 845668 drawn on the Nainital Bank Limited, Gurgaon in favour of the assessee upon signing of the said buyer s agreement. 12. As per clause of the said agreement, in case of default in payment the owner (assessee) reserves right to terminate the agreement and refund advance to the buyer (M/s Apra Auto (India) Private Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial year under consideration as advance as per the terms and conditions of the agreement. The copy of such buyer s agreement with M/s NH Learning Infrastructure Services Limited along with confirmation from the said company for payment of ₹ 2,50,00,000/- to the assessee during the financial year under consideration is similar to the one entered with M/s Apra Auto (India) Pvt. Ltd. The said agreement with M/s NH Learning Infrastructure Services Limited had been terminated during the financial year under consideration and the assessee has repaid an amount of ₹ 2,30,00,000/- out of advance received amounting to ₹ 2,50,00,000/- up to 31.12.2012 to M/s NH Learning Infrastructure Services Limited. 15. Hence, as per the facts it is quite evident that the assessee has not taken any loan from M/s Apra Auto (India) Private Limited instead he has given loan to the said company and received advances from the said company against sale of commercial space as per buyer s agreement and the same was refunded during the financial year under consideration on termination of buyer s agreement as per its clauses. It is to note that the same are in the normal co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... II, Sector - 15, Gurgaon, Haryana. Since, the said receipts of advance of ₹ 5,62,00,000/- against sale of commercial space is not a receipt in the nature of loan or advance as contemplated in section 2(22)(e) of the Income tax Act, 1961 which attracts the provisions of in that section as the said advance is in the nature of business advance which did not fall within the ambit of provisions of section 2(22)(e) of the Income tax Act, 1961. 18. We have gone through the rationale given by the ld. CIT (A), the relevant operative portion is as under: 9. I have considered the specific arguments raised by the appellant during appellate as well as assessment proceedings and the comments of the AO/JCIT in the remand report. It is seen that the AO, in the assessment order has highlighted receipt of amount of ₹ 10,08,41,000 from M/s Apra Auto India P. Ltd and the said receipt of payments by the appellant have been highlighted in the assessment order in the form of a account which does not have a opening balance or the closing balance. It is important to appreciate that the appellant on being confronted with the proposed addition had specifically clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant was in a haste because of which the incorrect submission had been made. The AR, during the course of appellate proceedings, has submitted his explanation to clarify the issue as raised by the AO in the assessment order. The submission of the appellant are contained at para 1.2.32 to 1.2.35 of his reply dated 29.07.2015. It has been stressed that the mistake had crept in on account of a technical flaw in the accounting software used by the appellant namely TALLY in which the name of first entry on a single day crops up on the query being issued to the software and on this account, the later entry gets eclipsed for which manual cross check has to be done so as to correctly present the factual picture. The mistake, however, has been confirmed to the extent that at the time of submission, the printout taken from the computer was having the name of transaction entered into with bank of baroda being the first entry on that day. In the circumstances, I don t consider it any issue of material consequence as factually, the amount in question has been transacted through the Nainital bank only. 12. The AO had further highlighted in the assessment order at page no 9 that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the tune of ₹ 78,84,793 and ₹ 1,95,390 as on 31.03.2011 and 31.03.2011 from M/s Apra Auto India P. Ltd. The perusal of the copy of account shows that during the entire period of the FY under consideration, there have been amounts outstanding towards M/s Apra Auto India P. Ltd rather than the other way round. Therefore, apart from receipt of amounts on account of the proposed commercial sale by the appellant, no amounts had been received by the appellant from M/s Apra Auto India P. Ltd. The amounts that had been received were on account of repayments by M/s Apra Auto India P. Ltd to the appellant rather than other way round. The transaction of proposed sale of commercial space, being on commercial considerations and in the normal course of business of the appellant clearly comes in the exception clause of section 2(22)(e). In view of the above facts and circumstances of the case, the addition made by the AO to the tune of ₹ 10,57,01,194 is directed to be deleted. 19. Having gone through the entire factum of the issue, the case laws cited by both the parties, rationale of the ld. CIT (A), keeping in view the fact that it is the company which o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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