TMI Blog2020 (4) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... not the case of the revenue authorities that the assessee in this case has not offered any explanation so as to attract the provisions of Section 69A - Referring to observations made by the coordinate bench of the Tribunal in case of the purchaser Shri Raghav Garg [ 2013 (8) TMI 671 - ITAT AGRA] from whom the assessee has taken advance on account of purchase of house property of the assessee in accordance with the agreement to sale, we are of the considered view that since the assessee has duly explained the source of complete cash found during the search by the FEMA and the investigation has also been closed in the case of the assessee by FEMA as reproduced hereinabove, the addition made by the AO and sustained by the Ld. CIT(A) is bad in law and liable to be deleted. Therefore, we delete the addition in dispute and allow the ground No.1 raised by the assessee. Disallowance of reimbursement of expenses - HELD THAT:- Before us ld. AR submitted that the assessee is having the supporting documents as placed in the paper book, therefore, prayed for one more opportunity to substantiate its claim before the AO. In view of the above facts and circumstances of the case, we restore t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.10.2010 is contrary to facts, against principles of natural justice, arbitrary, erroneous and bad in law. b. That both the learned AO and CIT(Appeals) has misconstrued/mis-appreciated the facts and the addition of ₹ 82,14,500 u/s. 69A of the Act is on presumptions, conjectures and surmises, without any material evidence on record and is against principles of natural justice, unjustified, excessive, arbitrary, erroneous and bad in law. c. The learned AO and CIT(Appeals) has mis-appreciated/ ignored the supporting and documents filed in the Paper Book before him and the sustenance of the addition of ₹ 82,14,500 u/s. 69A of the Act is on non-appreciation of/ contrary to facts, against principles of natural justice, arbitrary, excessive, unjustified, erroneous and bad in law. d. That the assessee has satisfactorily explained the source of the aforesaid ₹ 82,14,500 of cash seized by FEMA and hence the addition of the same u/s. 69A of the Act is contrary to facts, erroneous and bad in law. e. That without prejudice to Ground (a) to (d) above, the learned CIT(Appeals) has failed to adjudicate the specific grounds (i.e. under (d) to (f) of Grounds No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad in law. d. That without prejudice to the Grounds (a) to (d) above, the learned CIT(Appeals) ought to have allowed the Tax credit for the Taxes paid in UK instead of directing that the 'Assessee is at liberty to approach the AO' for credit of Taxes paid in UK. 7. Levy of interest of ₹ 43,974 and ₹ 18,536 u/s.234B, 234C of the Act. a. That the learned CIT(Appeals) has failed to adjudicate the Ground No 6 before him regarding levy of interest of ₹ 43,974 and ₹ 18,536 u/s.234B and 234C of the Act respectively. b. That in view of seizure and retention of cash of ₹ 82,14,500 by FEMA (which is under the Ministry of Finance, Govt, of India), the levy of interest, from June 2006, of ₹ 43,974 and ₹ 18,536 u/s.234B and 234C of the Act respectively is against principles of natural justice, erroneous and bad in law. 8. Non credit of tax payment of ₹ 3,74,099. a. That the learned CIT(Appeals) has failed to adjudicate the Ground No 7 before him regarding non credit of tax of ₹ 3,74,099 paid on 17.3.2008 b. That in view of tax of ₹ 3,74,099 having been paid on 17.3.2008 and the proof of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 85 lakhs at New Delhi in cash, on 23.06.2006 which was brought by him to his Bhubaneswar residence. Receipt of advance against sale of the inherited property is supported by sale agreement dt. 23.06.2006, copy of which is placed in the paper book-I at pages 1-2. Thereafter, the assessee immediately left for London (UK) on 26lh June 2006 and the said cash received on account of the said advance for sale of property along with agreement of sale was lying at his residence, therefore, the said cash could not be deposited into the bank before departing for U.K. as the intervening two days 24th 25th were weekends. The FEMA in the course of the search found the aforesaid cash amounting to ₹ 82,14,500/-, which is out of the advance received against the sale of the house property at Gwalior and seized the same. Thereafter on return from London on 5th July, 2006, the assessee intimated to Director of Enforcement, FEMA vide his letter dt. 10.07.2006 about the sale agreement for selling the House Property at Gwalior. Thereafter the I.T. Department started enquiry with the buyers as the cash received as advance against sales was seized. The buyer confirmed the purchase and pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FEMA and Income-tax Authorities on the first available opportunity on 10.07.2007 and 17.07.2007 respectively. 7. Further, the contention of ld. AR is that during the course of assessment proceeding, on the show cause notice issued by the AO on 22.12.2008 communicating the assessee as to why ₹ 82,14,500/- should not added to the total income of the assessee on account of undisclosed income, the assessee submitted before the AO that the sale agreement dated 23.06.2006 has duly been executed by the assessee as well as Mr. Raghav Garg on 23.06.2006 and the money as per the said agreement (i.e ₹ 85 lakhs) was received by the assessee from Mr. Raghav Garg on 23.06.2006 in the presence of witness Sri Anand Jain, therefore, ld. AR submitted that the transaction of ₹ 82,14,500/- is not undisclosed income of the assessee. However, the AO did not accept the same and added to the total income of the assessee. The CIT(A) has also not considered the submissions of the assessee even all the documents provided during the appellate proceedings and confirmed the baseless addition made by the AO. It was also the contention of ld. AR that the source of receipt of the amount in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money has been explained by the buyer as the department has made addition in the hands of the buyer, which subsequently, has been deleted by the appellate authority in the respective appeals. Therefore, the assessee is not required to explain the source of source. 10. Now, to enter into the case of the assessee, we deem it necessary to discuss the case of Mr. Raghav Garg, from whom the alleged money has been received by the assessee on account of sale of house property at Gwalior. The details of the case of Shri Raghav Garg along with other assessees have been filed by the assessee in the additional paper book at pages 40 to 60. With regard to the addition made in the hands of Shri Raghav Garg and others, it was explained that ₹ 65,00,000/- received from sale of jewellery on which AO made addition and CIT(A) deleted on the basis of fact that sale of jewellery by cash sales made to M/s Kalicharan Durgaprasad, Sarafa Bazar, Gwalior. ₹ 20 lakh accepted as advance from Kaushal Kishore Pawaiya. In case of Raghav Garg, the CIT(A) observed that all family members of Raghav Garg are found to be regularly accessed to Income Tax. Their affidavit admitting the fact of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osing stock of ₹ 1,74,66,056/- and ₹ 2,55,45,620/- respectively. The same has been accepted by the AO and no adverse inference drawn against trading results and return income declared on the basis of his books of accounts. AO has failed to bring any adverse material on record before rejecting the submissions, statements, affidavits and books of accounts of purchasers, seller produced during the course of assessment proceedings. Accordingly, the CIT(A) deleted the addition of ₹ 65,00,000/-. However, the CIT(A) confirmed the addition of ₹ 20 lakhs. Thereafter the assessee-Raghav Garg the carried the matter before the Tribunal and the Tribunal after considering the submissions of the assessee and findings of both the authorities below has upheld the addition deleted by the CIT(A) of ₹ 65 lakhs and deleted the addition of ₹ 20 lakhs as made by the AO and confirmed by the CIT(A) in ITA No.251 275/Agra/2012, order dated 12.07.2013, at para 12, 12.1 12.2 of the order, after observing as under :- 12. We have considered the rival submissions and the material available on record. The facts noted by the ld. CIT(A) in the appellate order have not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gards the addition of ₹ 20,00,000/- confirmed by the ld. CIT(A), it is not in dispute that the assessee produced agreement to sale dated 06.06.06 before the AO through which the assessee received advance of ₹ 20,00,000/- from Shri Kaushal Kishore Pawaiya. The genuineness of the sale agreement has not been doubted by the AO. Copy of the sale agreement is produced in the paper book at page 11 12. The same agreement of sale is signed by two marginal witnesses. The AO examined Shri Kaushal Kishore Pawaiya, who has admitted in his statement of giving of advance of ₹ 20,00,000/- in cash to the assessee. When the purchaser of the property has admitted giving of advance to the assessee, if there was any doubt in the minds of the AO of execution of agreement to sale, at least he should have examined the marginal witnesses who have signed the agreement to sale to find out the truth in the matter. The AO, however, did not take any such step. Therefore, it is proved on record that the assessee and Shri Kaushal Kishore Pawaiya have genuinely entered into the agreement to sale dated 06.06.06, whereby the assessee was given advance of ₹ 20,00,000/- by the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase the house property from the present assessee i.e. Shailendra Kumar Tamotia, has taken advance by selling his land located in Gwalior and he has been able to prove identity of the purchaser, genuineness of the transaction and the amount actually received from the purchaser as advance. Therefore, availability of ₹ 20,00,000/- with Shri Raghav Garg on execution of agreement to sale is proved by him satisfactorily. Therefore, the Tribunal deleted the addition of ₹ 20,00,000/-. Accordingly, amount of (₹ 6500000+2000000)=₹ 85,00,000/- has been deleted by the Tribunal as the same has been explained by the buyer Shri Raghav Garg from whom the assessee Shri Shailendra Kumar Tamotia received the said money in cash. In this case, the FEMA seized ₹ 82,14,500/- from the residence of the assessee and the assessee replied that the same amount is part of ₹ 85,00,000/- which has been taken as advance for sale of his house property from the purchaser Shri Raghav Garg. Now, fact remains that when the amount received by the assessee has duly been explained by the purchaser and the same has been deleted by the Tribunal as mentioned above, in our considered opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of complete cash found during the search by the FEMA and the investigation has also been closed in the case of the assessee by FEMA as reproduced hereinabove, the addition made by the AO and sustained by the Ld. CIT(A) is bad in law and liable to be deleted. Therefore, we delete the addition in dispute and allow the ground No.1 raised by the assessee. Ground No.5 : Addition/Disallowance of ₹ 5,32,562/-(reimbursement of expenses) received from Magmesium International, Australia. 13. Ld. AR before us submitted that the assessee has duly submitted all the documents as required by the AO during the course of assessment proceedings as well as in the appellate proceedings also, however, both the authorities below have not considered the submissions of the assessee and the evidence produced by the assessee with regard to the fact that the claim of the assessee being reimbursement of expenses received from M/s Magmesium International, Australia being not income in the hands of the assessee is not taxable. Therefore, ld. AR submitted that addition made on the above account may kindly deleted. 14. On the other hand, ld. DR relied on the orders of authorities below. 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and similar payments derived by a resident of a contracting state in his capacity as a member of the board of directors of a company which is a resident of the other contracting state may be taxed in that other state. From the above, we are of the opinion that the issue requires further examination on the part of the AO. We have also perused the order of coordinate bench of the Tribunal in assessee s own case for AYs. 2005-2006 2006-2007, passed in ITA Nos.70/71/CTK/2010, order dated 30.08.2010, as produced by the ld. AR of the assessee and found that the Tribunal while dealing with the very same issue has remitted the matter back to the file of AO for fresh adjudication. In view of the above facts and circumstances of the case and respectfully following the order of the Tribunal in assessee s own case as cited supra, we remit this issue to the file of AO to decide the disputed issue after examining and verifying the documents available with the assessee in form of paper book. Needless to say, the assessee shall be given reasonable opportunity of hearing. The assessee is also directed to cooperate with the AO for early disposal of the issue. This ground of appeal of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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