TMI Blog2021 (4) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... through banking channels and the company, during the impugned assessment year has a balance sheet of the size of ₹ 151 crores. The total turnover of the said investor is ₹ 7,21,25,000/-. Similarly, in the case of M/s Kabir Commodities Pvt. Ltd., the amount has been received through banking channels and the company has a balance sheet of the size of ₹ 90 crores. From the various details furnished by the assessee, we further find an amount of ₹ 2,49,55,000/- was received from the same company and also the payment of ₹ 4,05,10,000/- made to the said company in the immediately succeeding assessment year, i.e., 2013-14 and the AO in the order passed u/s 143(3) has accepted such receipts and payments. The investing companies are group companies and have common directors or their family members. Both the investing companies have been assessed u/s 143(3) of the Act, a fact stated before the lower authorities and not controverted by the Revenue. There is no evidence whatsoever that the investing companies were controlled by any entry operator - there is no evidence or allegation that cash was deposited in the investing companies or even downstream of invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld earlier along with premium on cancellation. Provision for site development expenses against sale of plots - Order of the CIT(A) is a cryptic one. He has not at all considered the various details furnished by the assessee before him including the notes to accounts in the audited balance sheet. Since the AO in the instant case has made the addition on account of non-furnishing of details and the ld.CIT(A) has not at all considered the various submissions made before him and has passed a cryptic order, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue of provision for site development expenses to the file of AO with a direction to give one more opportunity to the assessee to substantiate its case and decide the issue as per fact and law. The grounds of appeal No.1-3 are accordingly allowed for statistical purposes. - ITA No.2422/Del/2017, ITA No.2927/Del/2017 - - - Dated:- 17-3-2021 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Shri Sudesh Garg, Advocate For the Revenue : Shri Jagdish Singh, Sr. DR ORDER PER R.K. PANDA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares @ ₹ 900 per share (₹ 10 face value + ₹ 890 share premium on each share) raising ₹ 25,94,600/- as Share Capital ₹ 23,09,19,400/- as Share Premium. 3. From the various details furnished by the assessee, he noted that the abovementioned shares were issued on account of share application money received from these entities, the details of which are as under:- S. No. Name and address of the company Opening Balance (In Rs.) Amount received during the year (In Rs.) Share issued /Amount repaid Closing Balance as on 31.03.2012 (In Rs.) 1 M/s Global Merchandisers Pvt. Ltd., 12, Ring Road, Lajpat Nagar-IV, New Delhi-24 6,58,85,000i 1,75,00,000 ₹ 6,78,54,600/- on account of 75,394 shares issued @ Rs, 900 per share (₹ 10 face value + ₹ 890 share premium on each share + Repayment of ₹ 1,55,30,400/- Nil 2 M/s Kabir Commodities Pvt. . Ltd., 5, Central Avenue, lst Floor, Maharani Bagh, New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money before passing on to beneficiaries like the assessee. He, therefore, inferred that the assessee has taken credit entries of ₹ 3,41,40,000/- from these two companies, the details of which are as under: 1. M/s Global Merchandisers Pvt. Ltd. Share Application Money received during F.Y. 2011-12 ₹ 1,75,00,000 2. M/s Kabir Commodities Pvt. Ltd. Share Application Money received during F.Y. 2011-12 ₹ 1,66,40,000 Total amount credited from these two companies ₹ 3,41,40,000 /- 5. Since, according to the AO, the assessee failed to his satisfaction regarding the identity and credit worthiness of the above two companies and genuineness of the transaction, therefore, following the decisions of the Hon ble Delhi High Court in the case of CIT vs. Titan Securities Ltd. in ITA No.263/2012 and in CIT vs. Nova Promoters Finlease (P) Ltd., reported in 342 ITR 169, the AO made an addition of ₹ 3,41,40,000/- to the total income of the assessee by invoking the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 151 crores. The company has purchased shares of other companies as stock in trade as well as for the investment purposes. The non current investments have decreased from ₹ 22.9 crores to ₹ 12.4 crores whereas the loans and advances have increased from ₹ 39.3 to 63.5 crores. The inventory of the investments have decreased from 82.2 crores to 75.2 crores. It is clear from the information as discussed above that the company was having a liquidity during the year and the share application money has been subscribed from the funds available with the company which have been generated from the sale of investments. 3.2 Further, the company has received the share application money of ₹ 1,66,40,000/- from M/s Kabir Commodities (P)Ltd. The size of the balance sheet of the company during the year under consideration is ₹ 90 crores. The company has achieved the turn over to the extent of ₹ 108.9 crores. The company has purchased the shares of other companies as stock in trade as far as for the investment purposes. The non current investments have decreased from ₹ 32.8 to ₹ 12.2 crores whereas the loans and advances have increased f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and share premium from the group companies who are assessed u/s 143(3) of the Act, therefore, there is no justification on the part of the AO to make the addition and the ld.CIT(A) was fully justified in deleting the addition. He also drew the attention of the Bench to the following statements made before the CIT(A):- From the details as pointed out above it can be seen that there are receipts as well as repayments. Even if the deposits are treated as non- genuine in that case also the net of receipts and payment can only be added. In the case of M/s Global Merchandisers Pvt. Ltd. the receipts are to the extent of ₹ 1,75,00,000/- where as the repayments have been made to the extent of ₹ 1,53,30,400/-. That means the net of the two i.e. receipt and payment remains to the extent of ₹ 21,69,600/-. Even if it is accepted for the sake of the argument that nothing is genuine then only the balance figure can only be added i.e. the addition could be only to the extent of ₹ 21,69,600/-. 3.5 In the case of M/s Kabir Commodities Pvt. Ltd. the receipts are to the extent of ₹ 1,66,40,000/- where as the repayments have been made to the extent of ₹ 9,69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of appellant is part of the paper book on page -. On the basis of evidence filed in AY 2013-14, the genuineness has been accepted by the AO and no addition on this account is made. Copy of the assessment order of the appellant for the AY 2013-14 is made part of the paper book on page no . Copy of the assessment order of M/s Rajdarbar Commodities Pvt. Ltd. for the AY 2013- 14 is made part of the paper book on page no.____ 11. The ld. Counsel also drew the attention of the Bench to the various submissions made before the CIT(A) and submitted that this is a case based on facts and the various decisions relied on by the AO are not applicable to the facts of the present case. The ld. Counsel for the assessee drew the attention of the Bench to the submissions made before the CIT(A) giving details of directors of the assessee company as well as the investor companies and submitted that either the directors of the assessee company or their family members are also directors of the investing companies from whom share capital is received. 12. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and CIT(A) and the paper book fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are to the extent of ₹ 175 lakhs whereas the repayments have been made to the extent of ₹ 1,53,30,400/-. Therefore, there is net receipt of ₹ 21,69,600/- only. From the various details furnished by the assessee, we find, the amount of ₹ 175 lakhs was received from M/s global Merchandisers Pvt. Ltd. through banking channels and the company, during the impugned assessment year has a balance sheet of the size of ₹ 151 crores. The total turnover of the said investor is ₹ 7,21,25,000/-. Similarly, in the case of M/s Kabir Commodities Pvt. Ltd., the amount has been received through banking channels and the company has a balance sheet of the size of ₹ 90 crores. From the various details furnished by the assessee, we further find an amount of ₹ 2,49,55,000/- was received from the same company and also the payment of ₹ 4,05,10,000/- made to the said company in the immediately succeeding assessment year, i.e., 2013-14 and the AO in the order passed u/s 143(3) has accepted such receipts and payments. 14. From the various details furnished by the assessee, we further find that the investing companies are group companies and have commo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the appellant and without dealing with them. 4. The appellant craves for liberty to add fresh ground(s) of appeal and And also to amend, alter and modify any of the grounds of appeal. 16. Facts of the case, in brief, are that during the course of assessment proceedings, the AO asked the assessee to justify the expenses with documentary evidence. However, according to the AO, the assessee could not justify the following expenses:- a) Premium on repurchase - ₹ 21,00,000/-. No details and justification has been filed in this regard. As the expense claimed on account of premium paid for repurchase of the booked plot is unsubstantiated, the same is disallowed. b) Provision for site development expenses against sold plots - ₹ 83,36,756/-. Since no specific justification with regard to the aforesaid expenses was filed and this is only provision which was supposed to be added back in the computation of income, the same expense amounting to ₹ 83,36,756/- is disallowed. 16.1. He, therefore, made addition of ₹ 1,04,36,756/- to the total income of the assessee. 17. In appeal, the ld.CIT(A) confirmed both the additions by observing as under:- 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P L Account is concerned, he submitted that such premium became payable on account of re-purchase of plots already booked by three persons the details of which are as under:- 1. Global Merchandisers Pvt. Ltd. - ₹ 16,00,000/- 2. Sh. Devi Das Garg - ₹ 2,50,000/- 3. Smt. Kusum Lata - ₹ 2,50,000/- Total - ₹ 21,00,000/- 20. He submitted that the above three persons had booked plots in the projects being developed by the assessee. They requested to cancel the booking as there was an upside on the resale. The persons who have booked the plots have been paid the premium on booking to the extent of ₹ 21 lakhs. He submitted that in the case of M/s Global Merchandisers Pvt. Ltd., the payment of ₹ 3 lakhs was received on 16th June, 2011 whereas on re-purchase of the said plot, premium of ₹ 16 lakhs was credited to his account and the entire amount of ₹ 19 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the ld.CIT(A) is not at all a speaking order. He has not considered the details furnished before him, therefore, both the additions made by the AO should be deleted. 23. The ld. DR, on the other hand, heavily relied on the order of the AO and the CIT(A). 24. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We find, the AO in the instant case made an addition of ₹ 21 lakhs on account of premium on re-purchase of plots and addition of ₹ 83,36,756/- on account of provision for site development expenses against sale of plots on the ground that the assessee failed to justify the above mentioned expenses to his satisfaction. We find, the ld.CIT(A) sustained both the additions, the reasons of which have already been reproduced in the preceding paragraphs. So far as the premium of re-purchase is concerned, it is the submission of the ld. Counsel that three of the customers have cancelled their bookings and since the market price was higher during the relevant period, they were paid certain extra amount as premium and the assessee thereafter sold the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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