TMI Blog2021 (8) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Inturi Rama Rao, AM And Shri S.S. Viswanethra Ravi, JM For the Assessee : Shri Rakesh Joshi For the Revenue : Shri A.M. Mahadevan Krishnan ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of the ld. Commissioner of Income Tax (Appeals)-12, Pune [ the CIT(A) ] dated 23.10.2017 for the assessment year 2014-15. 2. The appellant raised the following grounds of appeal :- 1. Upholding the issue of Notice u/s 153A the assessment order passed u/s 143(3) r.w.s. 153A, inspite of absence of any incriminating material or unexplained asset found in the search action conducted u/s 132 against the appellant. Therefore, it is prayed to annul the Notice issued u/s 153A the Assessment Order passed u/s 143(3) r.w.s. 153A. 2. Upholding the addition of ₹ 5,31,58,400/-, on the ground of alleged receipt of cash over above the consideration declared in the sale deed, merely on the basis of assumptions, presumptions, surmises conjectures. Therefore, it is prayed to cancel the addition upheld of ₹ 5,31,58,400/-. 3. Upholding the addition of ₹ 5,31,58,400/-, on the ground of alleged r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kers Developers Ltd (ITA No. 581/PN/2008 decided on 30.01.2015). 9. Appellant leave to add / amend / alter any grounds of appeal and / or prayers before or at the time of hearing. 3. Briefly, the facts of the case are as under :- The appellant is a Private Limited Company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of Builders and Developers of land. The return of income for the assessment year 2014-15 was filed on 29.11.2014 disclosing total income of ₹ 5,96,19,880/-. Against the said return of income, there was no scrutiny assessment proceeding. Subsequently, the search and seizure operations u/s 132 of the Income Tax Act, 1961 ( the Act ) were conducted in the business premises of the assessee on 15.01.2015. Following the search and seizure operations, a notice u/s 153A of the Act was issued on 11.05.2016. The appellant filed the return of income in response to notice u/s 153A of the Act on 07.06.2016 declaring same income as shown in the original return of income. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Central Circle-1, Nashik ( the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements given by Directors of SPPL, the Assessing Officer of appellant had called upon the assessee vide show cause notice dt.21.10.2016 to explain as to why the addition of ₹ 5,31,58,400/- should not be made in the hands of the appellant company. After receipt of the show cause notice, the appellant had sought for cross-examination of the said Directors of SPPL namely, Shri Pradeep M. Gupta and Shri Sanjeev R. Adgaonkar. On 24.10.2016, the cross-examination of the said Directors was held. One of the Directors on the cross-examination had stated that they negotiated and finalized the terms and conditions regarding the sale of land with one Mr. Kenny Kataria, who acted as a broker between the appellant and SPPL and finally, the appellant had filed a detailed submission in response to show cause notice on 30.09.2016 which is extracted by the Assessing Officer vide para 7.12 of the assessment order denying the payment of any consideration over and above the consideration stated in the sale deed. The said explanation was rejected by the Assessing Officer by stating that the Directors of purchasing company i.e., SPPL had changed their stand on the cross-examination by stating tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant had not pressed the ground relating to jurisdiction u/s 153A of the Act. He took us through the statements of Directors of SPPL namely, Shri Pradeep M. Gupta and Shri Sanjeev R. Adgaonkar recorded by the ADIT, Nashik and submitted that in the statements given by the said two Directors, the name of the appellant company had been nowhere mentioned. They only stated that consideration of ₹ 5,31,58,400/- was paid in cash over and above the consideration stated in the sale deed to the seller of the land. He also took us through the statements recorded on cross-examination of the said two Directors. He submitted that on due consideration of the statements given by the said Directors, it cannot be concluded that there is any evidence to say that the appellant has received consideration of ₹ 5,31,58,400/- in cash over and above the consideration stated in the sale deed. Finally, he submitted that the subject land was already sold to M/s. Thakkers Developers Ltd vide the Development Agreement dt.12.05.1995 which is executed and registered on the same day. He has also taken us through the relevant clause of the English translated copy of the said Development of Agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opers Ltd vide Development Agreement and Power of Attorney entered on 12.05.1995. On mere reading the covenants in clauses 3, 9, 13 and 16 of the said agreement placed at Pages 35 to 38, it would be evident that the rights of the said property were transferred in favour of Thakkars Developers Ltd. Further, on perusal of the Agreement to Sale entered on 23.04.2013 among SPPL as a purchaser, Rajendra M. Builders and Developers as vendor and Thakkars Developers Ltd as consenting party, it clearly shows that the sale consideration was paid to Thakkars Developers Ltd and Thakkars Developers Ltd had acknowledged the receipt of the consideration also. We refer to the decision of Hon ble Apex Court in the case of Sanjeevlal and Smt. Shantilal Motilal Vs. CIT reported in 365 ITR 389 wherein it was clearly held that on entering into an agreement to sale, it results in relinquishing of an interest in property which amounts to transfer. The relevant portion is extracted below for ready reference. 23. Consequences of execution of the agreement to sell are also very clear and they are to the effect that the appellants could not have sold the property to someone else. In practical life, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport of allegation of the Assessing Officer that the appellant was paid on money consideration in cash of ₹ 5,31,58,400/-. Even otherwise, no addition can be made merely based on the statement given by third parties without bringing independent corroborative evidence on record, in the present assessment proceedings. Reliance in this regard can be placed on the following decisions: i) Pr.CIT vs. Umesh Ishrani (2019) 108 taxmann.com 437 (Bom) ii) CIT vs. Atam Valves (P.) Ltd. (2009) 184 Taxman 6 (P H) iii) CIT vs. Maulikkumar K. Shah (2008) 307 ITR 137 (Guj) iv) CIT vs. C.L. Khatri (2006) 282 ITR 97 (MP) v) Pr.CIT vs. Kamlesh Prahladbhai Modi (2018) 94 taxmann.com 356 (Guj) vi) CIT vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) vii) CIT vs. Vivek Aggarwal (2015) 56 taxmann.com 7 (Del) viii) CIT vs. Salek Chand Agarwal (2008) 300 ITR 426 (All) ix) CIT vs. Dinesh Jain (HUF) 352 ITR 629 (Del). 11. We find that the conclusions reached by the Assessing Officer are merely based on presumptions and assumptions without bringing corroborative material on record. It is settled position of law that no addition in the assessment can be made merely based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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