9911796707
TMI Blog2020 (1) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 143(2) of the Act was issued on 5.9.2014 which was duly served upon the assessee. On scrutiny of the accounts, as well as AIR information received by the AO it was observed that the assessee company has not shown any purchase of immovable property either under the head 'fixed assets' or under the head 'current assets' in the balance sheet, whereas as per AIR information, it had entered into sale/conveyance deed dated 7.12.2011 for purchase of land admeasuring 8398 sq.meters at survey no.507/1 of village Khoraj District Gandhinagar and final plot no.78 of TP scheme 63(Khoraj) for a consideration of Rs. 3.22 crores. The ld.AO obtained details from the office of Sub-Registrar by using power under section 133(6) of the Act. On analysis of these accounts and accounting policies of the assessee, it was observed by the AO that the assessee should have shown the land on the 'asset' side and if any payment is required to be made to the vendors, then such payment should have been shown as 'liability' side in the balance sheet. Since the assessee failed to recognize the 'asset' in the balance sheet, he construed that this must have been purchased by the assessee from unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only. Copy of joint venture agreement dated 15/04/2011 entered into between the appellant and Shri Dilipbhai Purshotambhai Suthar is appearing at Pages 1 to 8 of Paper Book. 2. Under these circumstances, the appellant in the year under consideration in order to achieve its objects purchased land at P.P. 78 of T.P. Scheme No. 63 of Survey No. 507/1 mouje Village Khoraj, Taluka & District Gandhinagar from Shri Shivabhai Popatbhai Gohil who was the owner of the land for a agreed consideration of Rs. 40,00,000/- (Rupees Forty Lacs only). Before making sale of land to the appellant, Shri Shivabhai Popatbhai Gohil had entered into an understanding with M/s Shubham Granite Ltd (now known as Blazon Marbles Ltd) to get the encroachments on the land clear and to make the land clear in all respects. Shri Shivabhai Popatbhai Gohil had agreed to compensate M/s Shubham Granite Ltd for this purpose an amount of Rs. 2,82,00,0007- (Rupees Two Crore Eighty Two Lacs only) only on clearing the encroachments and to clear the land title in all respect. Since, appellant was interested in the said land for its business, it agreed to make payment of Rs. 40,00,0007- to Shri Shivabhai Popatbhai Gohil and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to get it vacant. The appellant accordingly, entered into agreement to sale with M/s Tvisha Tradelink and Consultancy LLP on 11/02/2013 for a consideration of Rs. 3,10,69,500/- (Rupees Three Crores Ten Lac Sixty Nine Thousand Five Hundred only). As per the terms, the appellant was to get 50% of the agreed consideration at the time of handing over clear and vacant possession of land and time period agreed to hand over the vacant possession of land was two months from the date of agreement failing which buyer had right to claim liquidated damages as per para 12 of the agreement. Balance of 50% of consideration was to be received by the appellant at the time of execution of sale deed in favour of the buyer. Copy of agreement to sale entered into by appellant with M/s Tvisha Tradelink and Consultancy LLP dated 11/02/2013 is appearing at Pages 28 to 34 of Paper Book. 5. During the period of two months appellant made all attempts to negotiate with the occupiers of the land in order to get the land vacant by making compensation to them but failed to do so and under these circumstances, appellant failed to handover vacant possession of land to M/s Tvisha Tradelink & Consultancy LLP. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure agreement with Shri Dilipbhai Purshotambhai Suthar as there were no disputes to share the income with him as per agreement entered into with him. 8. As per the settlement terms agreed into with M/s Tvisha Tradelink & Consultancy LLP on 18/05/2013, appellant was required to pay the liquidated damages with 18 months failing which it was also required to make payment of interest @ 36% on the agreement amount of liquidated damages. The 18 month period came to an end on 18/11/2014. By this date appellant had not made any payment to M/s Tvisha Tradelink & Consultancy LLP. Therefore, Tvisha approached the appellant in the month of December, 2014 to make payment of liquidated damages as well as interest as agreed in the settlement agreement. Due to sluggish and recessionary market conditions in real estate market, the appellant expressed its inability to make payment of liquidated damages and also the interest @ 36%. Instead it sought more time to make payment of original amount of liquidated damages. Both the parties discussed the matter by meeting again and again and finally it was decided to revise the terms of payment by modifying the original terms of settlement. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h remained to be explained by the appellant. It is in this back ground of the matter, appellant makes following submissions with regard to each of the grounds of appeal taken in the appeal memo on the basis of which actions of the Assessing Officer have been disputed." 5. Apart from the above factual submissions of the assessee, the assessee has made submissions as to how the addition under section 69 could not be made. The ld.CIT(A)has gone though the submissions of the assessee and thereafter deleted the addition. "2.3 Decision: I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The addition of an amount of Rs. 3,41,29,844/- has been made by the AO being unexplained investment in the land purchased in FP- 78 of TP Scheme No.63 of Survey No.507/1 Moje Village, Khoraj Taluka and Dist. Gandhinagar for an amount of Rs. 3,22,00,000/- being sales consideration and stamp duty expenses at Rs. 19,29,844/-. 2.4 It has been noticed that the appellant has entered into a sale/conveyance deed dtd. 7.12.2011 for purchase of the land admeasuring at 8398 Sqr. Mtr. in the aforesaid survey number for consideration of Rs. 3,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e except copy of extract of agricultural holding of Shri Dilip Suthar has been filed. 2.6 It is worth here to mention that possession of the aforesaid land was not given by the original land owner to the appellant although the sale deed of the same have already been executed on 7.12.2011. Except the cash payments the cheques given to Shri Shivabhai Gohil for Rs. 35 lakhs and to Shubham Granite Pvt. Ltd. at Rs. 2.82 crores have not been encashed due to the dispute and non-providing the possession by the land owner over the land to the appellant. In between various disputes arosed in respect of possession of the aforesaid land and various transactions have taken place. However, finally a settlement agreement dtd. 16.2.2015 was executed between the appellant and the original land owner Shri Shivabhai Gohil and according to such settlement the appellant was to pay a sum of Rs. 40 lakhs over and above to Rs. 5 lakhs paid by Shri Dilip Suthar to Shri Gohil at the time of the execution of the sale deed. It is worth here to mention here that the original land owner Shri Shivabhai P. Gohil has filed a regular civil suit No.l6 of 2005 dtd. 22.1.2015 before the Hon'ble Principle Civil J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest, share in the said land in any manner whatsoever. However, the defendant is illegally claiming its right and likely to demise the suit property to third party. Therefore, it is necessary to restrain the defendant and its agents, servants, representatives, etc. from gifting, demising, transferring, alienating, leasing and or dealing with the suit property in any manner whatsoever in the interest of justice by permanent injunction. 12. The plaintiff states that the act of the defendant has caused mental harassment, torture, trauma to the plaintiff and has further caused monetary loss to the plaintiff apart from inconvenience. The plaintiff is required to spend money on litigations etc. In view of the above referred facts, the defendant is liable to compensate the plaintiff. As a matter of fact by virtue of illegal acts and deed by the defendant the plaintiff has suffered mental tension, trauma, loss of reputation & good will and hence demands damages from the defendant. The Hon'b1e Court may grant appropriate compensation to the plaintiff from the defendant. 14. That the cause of action has arisen within the jurisdiction of this Hon'b1e Court in 2011 when the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and conditions of the sale Deed resulting in a default. 2. That the Second Party hereby admits and agrees that though it did not receive the vacant and peaceful possession of the said Land, the Second Party has been successful in getting the said Land vacated and obtaining peaceful possession of the same, after great hardships, efforts and after incurring huge expenditures. The Second Party further acknowledges that it did not allow the Cheques issued to the First Party and the Confirming Party to be encashed which were to the tune of Rs. 35 lakhs and Rs. 2.82 crores respectively. 4. That in order to resolve all the disputes with the First Party with regards to the sale of the said Land, the Second Party undertakes and agrees to pay a lump sum amount of Rs. 40 Lakhs to the First Party over and above the Rs. 5 Lakhs which has already been paid to the First Party subject to the condition that the Second Party shall not be liable to pay any further amount either to the First Party or to the Confirming Party. 6. That the First Party hereby expressly agrees and acknowledges that over and above the amount of Rs. 40 lakhs paid by the Second Party as stated herein above, no further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Defendant Advocate for defendant 2.7.1. In other words, this litigation came to an end vide agreement of settlement dtd. 16.2.2015 and the order of the Hon'ble Court dtd. 21.2.2015 passed thereupon. 2.7.2. Thereafter, the Hon' ble Court vide its order dated 21/2/2015 has disposed of the Civil Suit with the following order. Spl. Civil Suit No. 16/2015 Order Below Exh. No. I: In view of the withdrawn pursis at Exh. 9 This suit is disposed of accordingly. Refund certificate be issued in the name of Plaintiff as per rule. Date: 21/02/2015. Gandhinagar (V.A.Buddha), 5th Addl. Sr. Civil Judge ,Gandhinagar 2.7.3 According to this final settlement the appellant had to pay only Rs. 40 lakhs to Shri Gohil as against the sale consideration of the land without any further payment to anyone by taking the possession of the land. All these documents were available before the AO in the assessment proceeding and the same have not been controverted. 2.8 Now AO has made the observation that as per para-5 on page-4 and 5 of the agreement dtd. 16.2.2015 an amount of Rs. 50 lakhs was to be paid to Shri Gohil although in the subsequent para No.6 on page-5 the amount which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of Rs. 5 lakhs and Rs.l9,29,844/- made by Shri Dilip Suthar by bringing anything on record. The summary of the cash transactions of Shri Dilip Suthar explaining the source of above payments have been submitted to the AO also and same is verifiable. As per the JV agreement between the appellant and Shri Suthar, it is on record that the aforesaid payments have been made as per the terms and conditions of the JV agreement by Shri Dilip Suthar and appellant has not paid any amount except the cheques of Rs. 35 lakhs to Shri Gohil and Rs. 2.82 crores to M/s. Subham Granite Pvt. Ltd. Even if there was any doubt in respect of the sources of the initial payments of Rs. 5 lakhs and the registration charges of Rs. 19,29,844/- the necessary action in that case could have been taken in the case of Shri Dilip Suthar but not in the hands of the appellant. It is worth to note that Shri Dilip Suthar has been regularly filing its return of income having PAN No. CCRPS 8918 Q. 2.11 Further with regard to the aforesaid cheque payments, the cheques have not been encashed from the bank account of the appellant as the possession over the land has not been handed over to the appellant. Thus the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the sale consideration in the year under consideration although sale deed was executed but in absence of taking over of the possession of the land the litigation going on, which ultimately settled in A.Y. 2015-16 no adverse view is warranted in the hands of appellant. Nothing has been brought on record to show that besides Rs. 5 lakhs and Rs. 19,29,844/- paid by Shri Dilip Suthar any further payments has been made by the appellant out of its undisclosed income. Even the cheque so issued as per sale deed dated 07/12/2011 were to be cleared only upon handing over of the vacant and peaceful possession of the land which did not materialized in the year under consideration. Non- clearance of the cheques from the bank account of the appellant itself proves non-payment by the appellant obviously due to litigation and non- handing over of the peaceful possession over the land to the appellant. Even after a lapse of 6 months period from the date of issue of cheques, the cheques itself becomes time barred and subsequently no payments are cleared by the bank. Even as per the copy of extract of 7/12 on the basis of the sale deed name of the appellant has been entered in the revenue record b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any source of income, and the assessee failed to give any explanation or such explanation was not to the satisfaction of the AO, then the value of the investment may be deemed to be the income of the assessee of such financial year. Thus, the first condition for invoking section 69 is, there should be some investment, which are not recorded in the books of accounts, if any maintained by the assessee for any source of income. The second condition is that the assessee failed to give any explanation, and if some explanation was given, it was not to the satisfaction of the AO. In this situation, the value of such investment may be deemed as income of the assessee of such financial year. 8. There is no doubt that the assessee is maintaining books of accounts, which are audited also. In the submissions (extracted supra), assessee has explained that there was no investment as construed by the AO. On an analysis of the submissions, as well as finding of the AO, it emerges out that basically, the AO has assumed existence of the investment on the basis of mercantile system of accounting only. He did not dispute the terms and conditions for project agreement in a way, but was of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
