TMI Blog2022 (8) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee and, in our view, the tax authorities cannot enter into the shoes of the assessee in this matter. The important point is that there was sufficient reason for the assessee in not completing the sale transaction. Further, the Act contains specific provision with regard to the manner of treatment to be given for advances forfeited in respect of a sale transaction. Hence, in the facts and circumstances of the case, the question of applying the provisions of sec. 56(2) do not arise. Tax authorities have given undue importance to the clauses of MOU and expressed the view as to how the assessee should have dealt with these transactions. Under the provisions of sec. 68, the initial onus placed upon the assessee is to prove three main ingredients, viz., the identity of the creditor, the credit worthiness of the creditor and the genuineness of the transactions. We notice that the AO has not expressed the view that the assessee has not discharged the initial onus placed upon it. The independent enquiry has been made by AO and the intended buyer has also confirmed the transaction and MOU. Hence, the registration or otherwise of MOU may not be relevant here, when the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from outsiders : Rs. 6,20,46,758/- Less : withdrawals : Rs. 4,43,14,540/- Rs. 1,77,32,218/- Hence learned CIT(A) called for a remand report from the Assessing Officer. The dispute herein is with regard to the advance of Rs. Rs.2,11,99,999/- received by the assessee. The facts relating thereto are that the assessee has entered into the MOU on 23-09-2009 for sale of the property located at Kashid Kopar, Vasai with M/s. Samarth Enterprises for a sum of Rs. 2,75,00,000/- and received a sum of Rs.2,11,99,999/- as advance from it. The assessee, in turn, had earlier entered into an agreement on 22.09.2009 with Smt. Jayaben V. Shah and others for purchase of above said property However, it was noticed that the assessee has finally purchased the above said land from Smt. Jayaben V. Shah and others on 01.10.2011 for a sum of Rs. 1,82,70,900/-. The Assessing Officer noticed that the assessee had entered into a MOU on 23.9.2009 with M/s Samarth Enterprises (Rajendra Desai) for sale of land, which was actually purchased by him only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not execute either Agreement for Sale or a Conveyance Deed with the said Samarth Enterprises. 4/ A Memorandum of Understanding [ the MOU ] was executed on 23-09- 2009 and as per the said MOU, the said Samarth Enterprises (Proprietor Rajendra Desal) paid Rs. 2,11,99,999/- to the appellant as follows: Rs. 99,99 999/- on 23-09-2009 through RTGS of IDBI Bank vide UTR No. UTIBH09266004691. Rs. 1,12,00,000/ on 21-01-2010 through RTGS of IDBI Bank vide UTR No. UTIBH10021025587. [Copy of the Memorandum of Understanding (M.O.U.) is attached herewith ]. 5/ The appellant [ along with Mr. Ranka ] became Absolute Owner by the Sale Deed referred above on 10-01-2011. Till then the appellant had received part payment of Rs. 2,11,99,999/ from the said M/s. Samarth Enterprises. 6/ Immediately on 25-01-2011 the appellant sent a letter asking for balance consideration of Rs. 63,00,000/- and for completing the transaction of sale, to the said Samarth Enterprises, which is duly acknowledged by the said Mr. Rajendra Deasi 7/ However, Samarth Enterprises could not / did not pay the balance of Rs. 63,00,000/- to the appellant. Said amount is not received by the assessee as on date. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Asst. Commissioner of Income Tax, Cir 2, Kalyan during the remar proceedings of the appellant. e/ Certificate given by the IDBI Bank, Ambernath East, confirming the payment received from the bank account of Samarth Enterprises. f) RBI RTGS Settlement Report showing the transfer from the bank account of Samarth Enterprises to he appellant's account [ 2 pages ]. Also attached herewith: Copy of letter forwarding letter dated 29-11-2 by Sarangdhar Co., CAs in the course of remand proceedings, w explains the facts clearly. 4/ The Ld. Dy. CIT has observed in point C) on page 8 that The proprietor of Samarth Enterprises Mr. Rajendra Desai who had advanced a sum of Rs. 2,11,99,999/= in FY 2009-10..... AND in point F) The assessee has received an amount of Rs. 2,11,99,999/= from some Rajendra Desai,............ This shows that the Ld. Dy. CIT accepts that the appellant has received the sum from Samarth Enterprises, proprietor Mr. Rajendra Desal. The appellant did not receive balance of Rs. 63 Lacs from the said Samarth Enterprises and hence the Sale Deed was not executed by the appellant in favour of Samarth Enterprises. 5/ Thus the appellant has also proven t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the land to M/s Samarth Enterprises only after that date. It is the submission of the assessee that the purchaser, viz., M/s Samarth Enterprises has not paid the balance consideration and hence the sale deed could not be executed. The assessee has also given copies of notices sent to M/s Samarth Enterprises asking them to complete the transaction. The said party has also confirmed the transaction in an independent enquiry. Hence we find no reason to doubt the genuineness of the transaction entered by the assessee with M/s Samarth Enterprises. The question as to whether the assessee should wait for completion of the sale transaction or should forfeit the advance money as per the clause stated in MOU is the matter to be decided by the assessee and, in our view, the tax authorities cannot enter into the shoes of the assessee in this matter. The important point is that there was sufficient reason for the assessee in not completing the sale transaction. Further, the Act contains specific provision with regard to the manner of treatment to be given for advances forfeited in respect of a sale transaction. Hence, in the facts and circumstances of the case, the question of applying the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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