Sh. R.P. Malik, Delhi V. DCIT, New Delhi

CO 227/DEL/2010

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0999 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 01-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 11-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Unexplained investment; Search and seizure; Reason to believe
• Section: 143(3); 154; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI I. C. SUDHIR , JUDICIAL MEMBER AND SHRI J. S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 2732 /DEL/2010 ASSESSMENT YEAR: 2006 - 0 7 DCIT VS. SHRI R. P. MALIK, ROOM NO. 333, E - 2, ARA A - 16, NIRMAN VIHAR, CENTRE, JHANDEWALAN, EXTN. DELHI. NEW DELHI. PAN: AA RPM0072B (APPELLANT) (RESPONDENT) C.O. NO. 227 /DEL/2010 (IN I.T.A. N O . 2732 /DEL/2010) ASSESSMENT YEAR : 2006 - 0 7 SHRI R. P. MALIK, VS. DCIT A - 16, NIRMAN VIHAR, , ROOM NO. 333, E - 2, ARA DELHI. CENTRE, JHANDEWALAN, EXTN. PAN: AA RPM0072B NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI VIVEK WADEKAR, CIT. DR. ASSESSEE BY: SHRI. V. P. GUPTA , A DV . DATE OF HEARING: 01 /0 6 /2015 DATE OF PRONOUNCEMENT: 29 TH /06/2015 ORDER PER J. S. REDDY, AM : THESE APPEAL S ARE FILED BY THE REVENUE AND CROSS - OBJECTION FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF CIT (APPEALS) - I , NEW DELHI, DATED 31 .0 3 .2010 FOR THE AY 200 6 - 0 7 . I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 2 2 . THE FACTS IN BRIEF, THE ASSESSEE IS INDIVIDUAL . A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT ROOM NO. 101, HOTEL SARA INTERNATIONAL, HYDERGUDA, HYDERABAD ON 17/03/2006. THE AO PASSED ORDER U/S 153C R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 O N 30.12.2008 DETERMINED THE TOTAL INCOME AT RS.11,85,86,805/ - BY MAKING THE FOLLOWING ADDITIONS; A) RS.5,34,20,400/ - ON THE GROUNDS THAT THE PAYMENT IS MADE BY THE ASSESSEE FOR TAKING OVER G.B. EDUCATIONAL SOCIETY BASED ON AN MOU DATED 27.6.2005. B) AN ADDITION OF RS.1,28,53,800/ - U/S 68 OF THE IT ACT 1961. C) AN AMOUNT OF RS.1,20,00,000/ - ON THE GROUND S THAT NUMBER OF PERSONS HAVE GIVEN UNSECURED LOAN TO G.B.E.S AND AS THE ASSESSEE HAS TAKEN OVER G.B.E.S , LOAN ALSO B ELONG TO THE ASSESSEE. D) THE OTHER ADDITIONS ARE RS.50,00,000/ - BEING AMOUNT RECEIVED FROM SHRI BHUPINDER SINGH , RS.25,00,000/ - BEING PAYMENT IN CASH TO MR. RAJA SINGH AND RS.6,00,000/ - ON ACCOUNT OF SALE OF FOUR FLATS. E) THE ADDITIONS OF RS .50,00,000/ - , RS.25,00,000/ - AND RS.6,00,000/ - ARE NOT DISPUTED BY THE ASSESSEE. 3 . AS REGARDS THE OTHER ADDITIONS, THE ASSESSEE CARRIED THE MATTER IN APPEAL. 4 . THE FIRST APPELLATE AUTHORITY FRAMING THE FOLLOWING QUESTIONS WHICH ARE EXTRACTED FROM PARA 5.5 PAGE 11 OF THE CIT ORDER : I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 3 5.5 NOW THE ISSUE TO BE DECIDED IS....... A) WHETHER THERE WAS TAKEOVER OF M/S G B EDUCATIONAL SOCIETY (REGD) ALONG WITH 24282 SQ MTS OF LAND ALLOTTED TO IT BY M/S LOVELY BAL SHIKSHA PARISHAD (REGD) THROUGH ITS PRESIDENT SHRI R.P. MALIK I.E. THE ASSESSEE? B) IF SO, WHAT IS THE AMOUNT OF UNEXPLAINED INVESTMENT MADE BY THE ASSESSEE FOR THE SAID TAKE OVER TO BE ASSESSED U/S 68 OF THE IT ACT? 5 . IN THE VARIOUS REASONS GIVEN IN HIS ORDER, THE FIRST APPELLATE AUTHORITY ALLOWED THE APPEA L OF THE ASSESSEE. 6 . AGGRIEVED THE REVENUE IS BEFORE US ON THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LD. CIT(APPEALS) IS NOT CORRECT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT (A) HAS ERRED IN LAW AND FACTS OF THE CA SE IN DELETING THE ADDITION OF RS.3,12,53,280/ - TOWARDS UNEXPLAINED INVESTMENT IN TAKEOVER OF GB EDUCATIONAL SOCIETY AS RECORDED IN IMPOUNDED DOCUMENTS PAGE - 37 AND 32 - 35 OF ANNEXURE - 4 WHILE IGNORING PROVISIONS OF SECTION 292C(1) OF INCOME - TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT (A) HAS ERRED IN LAW AND FACTS OF THE CASE IN DELETING THE ADDITION OF RS.1,28,53,000/ - ON ACCOUNT OF LOANS FROM GBES REPAID BACK AND UNEXPLAINED INVESTMENT IN LORD TIRUPATI EDUCATIONAL SOCIETY WHILE DIS - BELIEVING IMPOUNDED DOCUMENTS AND IGNORING THE PROVISIONS OF SECTION 292C(1) OF INCOME - TAX ACT, 1961. I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 4 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT (A) HAS ERRED IN LAW AND FACTS OF THE CASE IN DELETING ADDITION OF RS.1,20,00,000/ - TOWARDS UNEXPLAINED LOANS FROM VARIOUS PERSONS TO GBES TAKEN OVER BY THE ASSESSEE AS EVIDENCED BY IMPOUNDED DOCUMENTS. 7 . THE ASSESSEE HAS FILED CROSS - OBJECTION ON THE FOLLOWING GROUNDS: 1) THAT THE RESPONDENT FILED THE RETUR N OF INCOME ON 27.09.2007 DECLARING AN INCOME OF RS.3,22,12,605/ - . 2) THAT THE LD. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 20, NEW DELHI PASSED AN ASSTT. ORDER U/S 143(3) COMPUTING AN INCOME OF RS.11,85,86, 805/ - ON 30.12.2008. 3) THAT THE ASSESSING AUTHORITY MADE THE FOLLOWING ADDITION AS PER ASSTT. ORDER: - 1) PAYMENT TO G.B. EDUCATIONAL SOCIETY (ITEM 13) RS.53420400 / - 2) PAYMENT TO G.B. EDUCATIONAL SOCIETY (ITEM 14) RS.12853800/ - 3) UNSECURED LOAN TO G.B. EDUCATIONAL SOCIETY (ITEM 15) RS.12000000/ - 4) RECEIPT OF CASH FROM SH. BHUPINDER SINGH (ITEM 16) RS.5000000/ - 5) PAYMENT TO S. RAJA SINGH & OTHERS (ITEM 17) RS.2500000 6) SALE OF 4 FLATS (ITEM 18) RS.600000 I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 5 4) THAT THE RESPONDENT WENT INTO AN APPEAL BEFORE CIT (APPEALS - 1) AGAINST THE ASSTT. ORDER OF ACIT CENTRAL CIRCLE - 20 ON 30.12.2008 AND THE LD. CIT(APPEALS - 1) HAS ACCEPTED THE CONTENTION OF THE RESPONDENT IN RESPECT OF 1 TO 3 STATED ABOVE IN PARA 3 AND OTHER P OINTS 4 TO 6 OF PARA 3 WERE NOT CONTENDED BY THE RESPONDENT. 5) THAT THE RESPONDENT ALSO FILED RECTIFICATION APPLICATION IN WHICH AN AMOUNT OF RS.22167120/ - WAS RECTIFIED BY LD. ACIT CC - 20 OUT OF RS. 53420400/ - AS STATED IN 1 OF PARA 3. 6) THAT LD. DY. CO MMISSIONER OF INCOME TAX, CIRCLE - 20, NEW DELHI FILED AN APPEAL BEFORE YOUR GOODSELF AGAINST THE APPELLATE ORDER OF LD. CIT(APPEALS - 1) NEW DELHI ON 04.06.2010. 7) THAT THE RESPONDENT OBJECT IN RESPECT OF THE APPEAL FILED BY LD. DY. CIT, CENTRAL CIRCLE - 20, NEW DELHI. MOREOVER, THE APPELLANT HAS NOT FILED ANY GROUND TO SUBSTANTIATE THEIR CLAIM IN FAVOUR OF APPEAL. 8) THAT THE RESPONDENT FURTHER SUBMITS TO STAND BY THE SUBMISSION MADE AT TIME OF HEARINGS IN APPEAL BEFORE LD. CIT(APPEALS - 1) NEW DELH I . 8 . WE HA VE HEARD MR. VIVEK WADEKAR, LD. CIT DR ON BEHALF OF THE REVENUE AND SHRI V. P. GUPTA , THE LD. A DVOCATE ON BEHALF OF THE ASSESSEE. 9 . MR. V.P. GUPTA SUBMITTED THAT THE CROSS - OBJECTION FILED BY THE ASSESSEE DO NOT RISE ANY ISSUE OTHER THAN THE ISSUE ON WHICH THE APPEAL HAS BEEN FILED BY THE DEPARTMENT. 1 0 . THE LD. DR MR. VIVEK WADEKAR, RELIED ON THE ORDER OF THE AO AND SUBMITTED THAT THE FIRST APPELLATE AUTHORITY HAS NOT PROPERLY APPRECIATED THE FACTS I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 6 OF THE CASE AND GRANTED RELIEF. HE ARGUED THAT THE LAND IN QUESTION IS HELD BY THE SOCIETY AND IT IS THIS LAND WHICH IS TARGETED FOR ACQUISITION BY THE ASSESSEE WHO IS IN THE BUSINESS OF PU RCHASE AND SALE OF REAL ESTATE. HE SUBMITTED THAT THIS IS BASICALLY A REAL ESTATE TRANSACTION WHICH THE ASSESSEE SOUG HT TO ENTER AND GAIN FROM. HE POINTED OUT THAT THE LAND ALLOTTED TO GB EDUCATIONAL SOCIETY BY M/S GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTH ORITY WAS MEASURING 24,282 SQ. MTRS. HE ARGUED THAT MEMORANDUM OF UNDERSTANDING WAS FOUND AND THIS DISCLOSED THAT THE ASSESSEE HAD TAKEN OVER M/S GB EDUCATIONAL SOCIETY. HE POINTED OUT THE PAGE S 96 TO 98 OF THE ASSESSEE S PAPER BOOK WHICH IS MEMORANDUM UND ERSTANDING DATED 27 TH JUNE, 2005 ENTERED INTO BETWEEN GB EDUCATIONAL SOCIETY AND M/S LOVELY BAL SHIKSHA PARISHAD THROUGH ITS PRESIDENT MR. R.P. MALIK. HE RE FERRED TO PARA 5.4.7 OF THE LD. CIT(A) ORDER HE SUBMITTED THAT THE ASSESSEE WAS ADMITTED A MEMBER OF GOVT BODY AND WAS AUTHORIZED TO OPERATE BANK ACCOUNT WITH PUNJAB NATIONAL BANK. HE FURTHER REFERRED TO PARA 5.6 OF THE LD. CIT(A) S ORDER AND DISPUTED THE SAME. ON G ROUNDS NO. 3 & 4 HE SUBMITTED THAT THIS IS LINK ED WITH THE DECISIONS T HAT WOULD BE TAKEN BY THE BENCH ON THE FIRST GROUND AND HENCE NO SEPARATE ARGUMENTS WERE ADVANCED. 1 1 . THE LD. COU NSEL FOR THE ASSESSEE SHRI V.P. GUPTA, ADVOCATE ON THE OTHER HAND SUBMITTED THAT THE TRANSACTIONS HAD NOT MATERIALIZED AND IN THE MOU DID NOT GET ACTED UPON. H E FILE D WRITTEN SUBMISSIONS AND RELIED ON THE ORDERS OF THE I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 7 FIRST APPELLATE AUTHORITY. HE V EHEMENTLY CONTENDED THAT THE ADDITION IS A HYPOTHETICAL ADDITION FOR THE REASON THAT , NO TRANSACTIONS HAS TAKEN PLACE. 1 2 . IN REPLY THE LD. DR REFERRED TO STATEMENT OF PRESIDENT OF GB EDUCATIONAL SOCIETY, MR. SATISH CHANDER GOEL, DATED 18.12.2008 WHICH IS AT PAGES 115 TO 126 ASSESSEE S PAPER BOOK AND SPECIFICALLY TO QUESTION NOS. 13, 16 AND 21 AND ARGUE THAT ONCE A PART PAYMEN T IS MADE IT IS A CASE OF THE TRANSACTION HAVING BEEN GONE THROUGH. 1 3 . ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD AS FOLLOWS; 1 4 . THE FACTS THAT EMERGE ARE THAT THERE WAS A PROPOSAL FOR TAKEOVER OF GB EDUCATIONAL SOCIETY. DURING THE IMPUGNED ASSESSMENT YEAR, THE PAYMENT OF RS.30 LACS AND RS.63,13,320/ - AGGREGATING TO RS.93,13,320/ - WERE MADE BY WAY OF CHEQUES TO GB EDUCATIONAL SOCIETY AND TO G REATER NOIDA INDUSTRIAL AUTHORITY RESPECTIVELY. 1 5 . FURTHER AN AMOUNT OF RS.1,28,53,800/ - IN CASH WAS HANDED OVER TO ONE SHRI AJAY KUMAR A GAINST PAYMENTS TO BE MADE. THESE PAYMENTS ARE RECORDED IN THE BOOKS OF ACCOUNTS. 1 6 . THERE IS NO EVIDENCE TO PROVE THAT THE ASSESSEE OR M/S LOVELY BAL SHIKSHA PARISHAD HAD MADE PAYMENTS AMOUNTING TO RS.3,12,53,280 / - . I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 8 1 7 . THOUGH THE DEAL WAS NEGOTIATED, THE FINAL TRANSFER HAD NOT TAKEN PLACE AND THIS IS CLEAR FROM THE LETTER OF THE REGISTRAR OF SOCIETY, GIVEN IN AN INQUIRY MADE BY AO THAT THERE WAS NO CHANGE IN THE LIST OF MEMBERS OF THE SOCIETY. COPIES OF THE LETTER ARE AT PAGE NOS. 110 TO 114 OF THE PAPER BOOK. PUNJAB NATIONAL BANK CONFIRMED THAT MR. R.P. MALIK AND OTHERS WERE JOINT SECRETARIES BETWEEN 16.07.2005 TO 1.03.2007 AND THAT THE ACCOUNT HAS BEEN CLOSED ON 11.08.2008. THE AO MADE REFERENCE OF HAND WRITTEN SLIPS, A COPY OF WHICH ARE AT PAGE S 94 & 95 OF THE PAPER BOOK. A PERUSAL OF THE SAME DEMONSTRATES THAT ONLY PAYMENTS WHICH ARE APPEARING ON RECORDS A RE M ENTIONED HEREIN. 1 8 . WITH THIS FACTUAL BACKGROUND, WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS IN HIS ORDER AT PARA 5.5 UPHELD THE CONTENTION OF THE ASSESSEE AND DELETED THE ADDITION. WHILE DOING SO HE HELD AS FOLLOWS; A) THERE IS NO CHANGE IN THE MEMB ERSHIP OF THE SOCIETY FROM THE DATE OF ALLOTMENT OF LAND, TILL THE DATE OF ISSUE OF LETTER BY THE REGISTRAR OF THE SOCIETY ON 11.11.2008. IT WAS ALSO CONFIRMED THAT AS PER THE RECORDS, SHRI SATISH CHANDRA GOEL IS THE AUTHORIZED PERSON TO DEAL IN ALL MATTER S OF THE SOCIETY WITH THEM. B) SHRI SATISH CHANDRA GOEL IN HIS SWORN STATEMENT , STATED THAT THE MOU IS A WASTE PAPER WHICH WAS NEITHER FRAMED NOR SIGNED BY HIM. HOWEVER, HE I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 9 CONFIRMED THE CLAUSES 1, 2, 3 AND 6, AND FURTHER DENIED CLAUSE NOS. 4, 5 & 8 CLAUSE NO. 2 OF THE MOU READS AS FOLLOWS: 2. THAT PARTY OF THE SECOND PART SHALL PAY RS.31,56,660/ - (RUPEES THIRTY ONE LAC FIFTY THOUSAND SIX HUNDRED AND SIXTY SIX ONLY) AND RS.55,00,000/ - (RUPEES FIFTY FIVE LAC ONLY) IN CASH AND THE BALANCE WILL BE P AID AS AND WHEN REQUIRED BY PARTY OF THE FIRST PART. THE BALANCE OF RS.2.841 CRORES SHALL BE PAID BY THE PARTY OF THE SECOND PART DIRECTLY TO GREATER NOIDA AUTHORITY AS AND WHEN DUES. HOWEVER , IF ANY, GOVERNMENT AUTHORITY DOES NOT ALLOW THE SMOOTH TRANSFER OF SOCIETY TO THE PARTY OF THE SECOND PART, THE WHOLE AMOUNT WILL BE REFUNDED BY PARTY OF THE FIRST PART ALONG WITH INTEREST @ 2% PER MONTH TO THE PARTY OF THE SECOND PART. 19 . AS PER THE MEMORANDUM OF M/S GB EDUCATIONAL SOCIETY, THE SOCIETY CANNOT BE T AKEN OVER UNLESS AND UNTIL MAJORITY OF THE MEMBERS ARE INDUCTED FROM ANOTHER GROUP . A S PER THESE CLAUSES, AT LEAST 12 MEMBERS SHOULD BE INDUCTED BY THE ASSESSEE S GROUP, WHICH HA S NOT TAKEN PLACE. WHEN THE SAME MEMBERS OF THE SOCIETY CONTINUE, IT CANNOT BE SAID THAT THERE WAS A TAKEOVER OF GBES . 2 0 . REGARDING AUTHORIZATION TO OPERATE CORPORAT ION BANK ACCOUNT, THIS IS LIMITED AUTHORIZATION AND IS NOT CONCLUSIVE PROOF THAT THE TRANSFER HAS TAKEN PLACE. AS PER CLAUSE 2 OF MOU DATED 27.06.2005, THE AMOUNT INVESTED BY THE ASSESSEE UPTO 31 ST MARCH, 2006 WOULD BE RS.1,49,69,980/ - , OUT OF WHICH THE AO I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 10 IS ALREADY HELD THAT THE SOURCE TO THE EXTENT OF RS.2,21,67,732/ - IS EXPLAINED BY THE ASSESSEE IN HIS ORDER U/S 154 OF THE ACT DATED 11.02.2010 AND NO FURTHER ADD ITION IS WARRANTED. 2 1 . THE SAME CLAUSE S IN MOU S TATES THAT, IN CASE GOVERNMENT AUTHORITY DOES NOT ALLOW THE SMOOTH TRANSFER OF SOCIETY, THEN THE ENTIRE AMOUNT HAS TO BE REFUNDED WITH INTEREST OF 2% PER MONTH TO THE PARTY , BY GB EDUCATIONAL SOCIETY. THUS THE ASSESSEE S CLAIM THAT THE DEAL WAS CANCELLED AND THE AMOUNT PAID TO GB EDUCATIONAL SOCIETY AND THE AMOUNT G O T DEPOSIT ED WITH INTERMEDIARY WAS RETURNED, CANNOT BE REJECTED WITHOUT CONTRA RY PROOF . 22. AT PARA 5.6 OF THE ORDER OF LD. CIT(A) HELD AS FOLLOWS: 5.6 I HAVE EXAMINED THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE AND ALSO THE BASIS ON WHICH THE AO HAS MADE ADDITIONS. IN MY OPINION THE STAND TAKEN BY THE AO FOR MAKING ADDITION TOWARDS TAKE OVER OF GBES INCLUDING 24,282 SQ MTRS OF LAND A LLOTTED BY GNIDA FOR RS.5,34,20,400/ - LACKS EVIDENCE. THE UNSIGNED MEMORANDUM OF UNDERSTANDING MADE FOR LAND AREA MEASURING 24282 SQ. MTRS. @RS.2200/ - PER SQ. MTR. CAN NOT BE TAKEN INTO COGNIZANCE. PRIMARILY BOTH THE CONCERNED AUTHORITIES VIZ., GNIDA FOR A LLOTMENT OF LAND AND REGISTRAR OF SOCIETIES HAVE CONFIRMED THAT THE LAND WAS ALLOTTED TO GBES AND THAT THERE IS NO CHANGE IN EITHER THE MEMBERS OR THE EXECUTIVE COUNCIL EVER SINCE THE DATE OF INCORPORATION TO THE DATE OF REPORTING WHICH CONFIRMS THE FACT T HAT THE ASSESSEE HAS NOT TAKEN OVER NEITHER THE SOCIETY NOR THE LAND. THE AO HIMSELF HAS RECTIFIED THE ORDER BY ALLOWING PAYMENTS VERIFIED BY HIM IN THE BOOKS OF ACCOUNTS OF RS.93, 13,320/ - AND RS.1 ,28,53,400/ - . FURTHER THE GNIDA ALLOTMENT LETTER SHOWS TH AT STILL A SUM OF RS.1, 1 0,48,310/ - WAS NOT DUE FOR PAYMENT AT ALL AND THAT THE AO HAS NOT ESTABLISHED PROOF OF PAYMENT OF RS.3,12,53,280/ - APART FROM RS.2,21 ,66,720/ - WHICH WAS PAID AND RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 11 THE ASSESSEE ONL Y ACTED AS AN AUTHORIZED SIGNATORY FOR A SPECIFIC LIMITED PERIOD WHICH DOES NOT MEAN THAT HE HAS TAKEN OVER THE MANAGEMENT OF THE SOCIETY. AGAIN THE STATEMENT OF SRI SATISH CHANDRA GOEL IS ALSO FALSE IF IT IS LOOKED FROM OVER ALL POINT OF VIEW INCLUDING TH E MEMORANDUM OF UNDERSTANDING. HENCE, THE GROUND ON WHICH THE AO HAS RELIED IS NOT ACCEPTABLE IN LAW. I HAVE CLEAR EVIDENCE AND REASONS TO BELIEVE THAT THE ASSESSEE'S EFFORTS TO TAKE OVER GBES ALONG WITH LAND DID NOT MATERIALIZE. THE ASSESSEE HAS RECEIVED BACK ALL THE PAYMENTS MADE TOWARDS MEMBERSHIP AND ALSO LOAN TO GBES ARE RETURNED BY CHEQUE AND RECORDED IN THE BOOKS OF THE ASSESSEE. THEREFORE, THE CONTENTION OF THE ASSESSEE HAVING RECEIVED CASH ALSO IN THE BOOKS ON CANCELLATION CANNOT BE REJECTED. I HAV E SCRUTINIZED THE LOAN CONFIRMATION LETTERS FROM THE VARIOUS PARTIES TO GBES. THESE CONFIRMATIONS ARE SELF EXPLANATORY GIVING COMPLETE PARTICULARS OF PAYMENT AND ALSO OF THE PARTIES. I HAVE NO REASON TO BELIEVE THAT THESE UNSECURED LOANS ARE FICTITIOUS. AS SESSEE EVEN THOUGH IF HAD TAKEN OVER GBES, THE LOANS IF EXISTED ON THE DATE OF TAKING OVER WOULD HAVE BECOME THE LOANS OF THE SOCIETY UNDER THE NEW MANAGEMENT. UNDER NO CIRCUMSTANCES THE ASSESSEE CAN BE BROUGHT TO TAX ON ACCOUNT OF THESE UNSECURED LOANS. T HE AO HAS GROSSLY ERRED IN MAKING THIS ADDITION. FOR THE DETAILED REASONS STATED IN PARAS SUPRA, THE FOLLOWING ADDITIONS ARE DELETED FROM THE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2006 - 07 WHICH WAS SUBSEQUENTLY RECTIFIED BY THE AO IN THE ORDER U/ S 154 PASSED ON 11/02/2010. 2 3 . THE ABOVE FACTUAL FINDINGS COULD NOT BE CONTROVERTED WITH EVIDENCE BY THE LD. DR . T HE EVIDENCE POINTED OUT TO THE FACT THERE WAS A NEGOTIATION AND CERTAIN PAYMENT FOR TRANSFER OF GB EDUC ATIONAL SOCIETY TO THE ASSESSEE AND T HAT THE TRANSACTION COULD NOT BE COMPLETED AND UNDER THOSE CIRCUMSTANCES THE FINDING OF THE FIRST APPELLATE AUTHORITY HAVE TO BE UPHELD. 2 4 . GROUND NOS. 3 & 4 ARE CONSEQUENTIAL TO THE VIEW TAKEN BY US ON GROUND NO. 2. THUS THESE GROUNDS ALSO HAVE TO BE RE JECTED. I.T.A. NO. 2732/DEL/2010 & C.O. NO.227/DEL/2010 12 2 4(A) . GROUND NOS. 1 &5 ARE GENERAL IN NATURE. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. 2 5 . COMING TO THE CROSS - OBJECTION THESE ARE IN SUPPORT OF THE ORDERS O F THE FIRST APPELLATE AUTHORITY, I N VIEW OF OUR DECISION IN THE REVENUE APPEAL, NO SEPARATE ADJUDICATION IS REQUIRED IN THIS APPEAL. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED 2 6 . IN THE RESULT, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS - OBJECTION OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH /06/2015 . SD/ - SD/ - ( I. C. SUDHIR ) (J. S. REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH /06/2015 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR