TMI Blog2022 (8) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... receive any amount from the assessee as claimed by him except Rs.20 lakhs, Rs.14 lakhs and Rs.20 lakhs, respectively. On perusal of the impugned order and also written submissions as filed by the ld. AR vide letter dated 30-05-2022 before us, we note that admittedly there is no proof to show that the assessee paid Rs.92,00,000/- except, payment to the above said three persons. Therefore, we find no infirmity in the order of CIT(A) in confirming addition. Addition on account of payable to three parties - addition made as liability is not crystallized - HELD THAT:- There is no proof to show that the liability is crystallized before us, therefore, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground raised by the assessee is dismissed. - ITA No. 534/PUN/2015 - - - Dated:- 1-8-2022 - SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI , JUDICIAL MEMBER Assessee by : Shri Pramod S. Shingte Revenue by : Shri S. P. Walimbe ORDER PER S. S. VISWANETHRA RAVI , JM : This appeal by the assessee against the order dated 05-02-2015 passed by the Commissioner of Income Tax (Appeals)-2, Nashik [ CIT(A) ] for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of interest being non-genuine. The relevant portion from paras 6.1 to 7.4 of impugned order is reproduced here-in-below : 6.1 Grounds 1 to 7 relate to the addition of Rs.2,77,50,000/- u/s. 68 of the Act on account of unsecured loan taken from Rangnath Dattatraya Gadekar and disallowance of Rs.3,47,022/- on account of interest claimed on unsecured loan taken from Rangnath D Gadekar (referred to as Shri Gadekar hereafter). Facts of the case 1. As per the ledger account furnished to the A.O. during the assessment proceedings, the appellant had received Rs.2,77,50,000/- from Shri Rangnath D Gadekar on 5/10/2009 and he had repaid back Rs.1,38,00,000/- to Shri Gadekar from 15/11/2009 to 02/01/2010. The outstanding credit balance was Rs.1,42,91,022/- as on 31/03/2010. 2. In order to verify the above loan, Shri Rangnath D. Gadekar was summoned by the A.O. and his statement was recorded on 15/01/2013. He had stated that his agricultural land bearing Survey No.37/2 (94R) at Deolali was acquired by Nashik Municipal Corporation (NMC) in the year 2009 and he had received Rs.4,28,53,376/-. 3. In the course of recording his statement, Shri R. D. Gadekar ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant for his explanation. In the meantime, Shri Gadekar had sent a letter to the A.O. enclosing therein an affidavit dated 16/01/2013. In the affidavit, Shri Gadekar had inter alia stated-that he had given loan of Rs.2,77,50,000/- to the appellant Shri Shivaji Sahane. He had further stated that the statement given under section l31 of the Act on 15/01/2013 be considered as cancelled. In view of his affidavit and the contents therein, the AO. was forced to summon him again. But due to his health, Shri Gadekar was re-examined and his statement u/s, 131 of the Act was recorded at his residence as per his request. In this statement recorded on 07/02/2013, he had stated that the statement given by him on 15/01/2013 was the correct statement and the said affidavit be treated as invalid and cancelled. According to his statement, the appellant had prepared the affidavit and he was not aware of the contents of the affidavit. When he was informed of the contents of the affidavit, he expressed his disagreement with the contents therein. He also stated that the return of income for AY, 2010- 11 was prepared and filed by the CA of the appellant and the refund was also transferred to the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty as per the reservation by the Nashik Municipal Corporation and to give compensation for the same to executors, but the Executors or any person of said family on their behalf could not do the compliance, and hence Executors have decided to give the development rights of said property to any third person and to accept the fixed compensation amount from him and the persons giving developments rights, as per their will may this land released from reservation or receive compensation from Nashik Municipal Corporation for the same. As mentioned above, the Executors have offered the development rights to the Power of Attorney Holder and discussions were held between the Executors and the power of Attorney Holder accepted to develop the same as per the terms as mentioned below. Accordingly both the parties have written and registered a Development Agreement. As on of the inseparable part of said document, the Executors has executed today this General Power of Attorney in favour of the Power of Attorney Holder. 4. For facilitating the development of said property and to carry out the all ancillary work independently by the Power 'of Attorney Holder, the Executors have accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal Corp ation and the compensation of Rs.4,28,53,376/- was paid on 05/10/2009. As the said land was registered in the name of Shri Gadekar, the cheque was issued in his name being the owner of the land. Shri Gadekar had received the compensation amount on behalf of the appellant as stipulated in the said power of attorney agreement. Thus, the compensation amount of Rs.4,28,49,000/- was immediately transferred to the bank account of the appellant on the same date i.e.06/10/2009. 7.2 As per the terms and conditions of the power of attorney dated 13/07/2007, the appellant had already paid Rs.1.51 crores to Shri Gadekar as under:- 1. Rs.1,07,50,0008/- 2. Rs.26,39,000/- 3. Rs.17,11,000/- Rs.1,51,00,000/- Shri Gadekar had deposited the amounts of Rs.1.51 crores in his account with NDCC bank and had taken 3 fixed deposit receipts of Union Bank of India on 24/09/2009, 06/10/2009 and 09/10/2009. The appellant has claimed to have another power of attorney dated 17/06/2009. This document was never produced before the AO. This document was produced at the later part of the appellate proceedings. There was no reference to this document in any submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nath Dattatraya Gadekar to the assessee for his explanation. As matter stood thus, Mr. Rangnath Dattatraya Gadekar has sent a letter to the AO enclosing the affidavit dated 16-01-2013 stating that he had given loan of Rs.2,77,50,000/- to the assessee and further, the statement given by him u/s. 131 of the Act on 15-01-2013 be cancelled. In view of the same, the AO again summoned the said Mr. Rangnath Dattatraya Gadekar and recorded statement u/s. 131 of the Act as per his request at his residence of Mr. Rangnath Dattatraya Gadekar on 07-02-2013. We note that the said Mr. Rangnath Dattatraya Gadekar stated that the statement given by him on 15-01-2013 is correct and the affidavit dated 16-01-2013 be treated as invalid and cancelled. According to the CIT(A) that the assessee had no knowledge about the contents of the affidavit dated 16-01-2013 and the assessee only prepared the said affidavit without the knowledge of said Mr. Rangnath Dattatraya Gadekar and filed before the AO. 7. We note the said Mr. Rangnath Dattatraya Gadekar affirmed the statement what was made on 15-01-2013 in the second statement made before the AO at his residence on 07-02-2013. Therefore, as contended by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded his statement u/s. 131 of the Act wherein he clearly stated that he did not given any loan to the assessee. Therefore, the facts before the Hon ble High Court of Bombay is different from the facts on hand, therefore, the ratio laid down by the Hon ble High Court of Bombay in the case of Jainam Investments (supra) is not applicable to the facts in the present case. Therefore, we find no infirmity in the order of CIT(A) in holding that there is no loan advanced by Mr. Rangnath Dattatraya Gadekar to assessee and consequently, disallowance of interest is not justified. We concur with the findings of CIT(A) in toto from Para Nos. 6.1 to 7.4 of the impugned order. Thus, ground Nos. 1 and 2 raised by the assessee fails and are dismissed. 10. Ground No. 3 raised by the assessee challenging the action of CIT(A) in confirming the addition of Rs.38,00,000/- on account of claim of excess payment. 11. We find the assessee claimed that he paid an amount of Rs.92,00,000/- and payable Rs.1,37,00,000/- to three persons that are Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. The AO had issued summons to the said three persons in order to verify the claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. 13. We note that the assessee has shown gross profit of Rs.1,61,15,468/- from sale of Adgaon land (Gat No. 772) belong to three persons i.e. Smt. Shaila D. Jadhav, Shri Padmakar D. Jadhav and Shri Shivaji D. Jadhav. The assessee has shown an amount of Rs.1,37,00,000/- as payable to the said three persons at Rs.28,00,000/-, Rs.45,75,000/- and Rs.63,25,000/-, respectively. According to the profit and loss account of the assessee it was shown an amount of Rs.71,00,000/-, Rs.79,75,000/- and Rs.78,25,000/-, respectively but however in the cross-examination they denied the payment of the said amount. We find that the amount of Rs.1,37,00,000/- payable to the above said three persons in his Balance sheet. We discussed above while dealing the ground No. 3 where we noted the assessee claimed payment of Rs.92,00,000/- to the above said three persons. According to the CIT(A) he found that during the cross-examination the assessee did not put a question to them as to an amount of Rs.1,37,00,000/- is payable. Admittedly, the said amount has been shown as payable to the assessee since 2009 and in the cross-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant has not said anything to them while cross examining them. The cross examination of the three land owners is one great opportunity for the appellant to announce to them and the Department that he has to pay Rs.1,37,00,000/- to the three land owners. The appellant could have proved his contention at this stage. 6. The appellant has not paid the said amount to the land owners till date. As per the appellant's own record and contention, the amount has been shown as payable since 2009. Now it is more than 5 years and yet, the said amount has not been paid and is not likely to be paid in future. 7. There are claims and counter-claims between the appellant and the three Jadhav family members and they have filed complaints and suits against each other. I have demanded from the appellant copies of such suits and affidavits filed before the courts. The appellant was given the opportunity to furnish the same by 15/01/2015. But the appellant has failed to furnish the same. These copies are in possession of the appellant, but still they are not furnished. These court documents would have established the actual stand of the appellant as to whether the appellant is ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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