Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 0768 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 6 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-12-2015
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Next Hearing Date
15-09-2015
Assessment Year
2009-2010
Appeal Filed On
20-05-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1103/PN/2013 %' ( ')( / ASSESSMENT YEAR : 2009-10 SMT. RAJKUMARI SUNIEL MUTHA, 1087, SHUKRAWAR PETH, PUNE 411002 PAN : ADFPM7722D ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 5(4), PUNE / RESPONDENT ASSESSEE BY : SHRI HARI KISHAN REVENUE BY : DR. HARSHVARDHINI BUTY / DATE OF HEARING : 16-09-2015 / DATE OF PRONOUNCEMENT : 14-12-2015 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 28-0 2-2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORD ARE: THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE REAL ESTATE BUSINESS 2 ITA NO. 1103/PN/2013, A.Y. 2009-10 AND LEASE OF VEHICLES. THE ASSESSEE FILED HER RETURN OF INCO ME FOR THE IMPUGNED ASSESSMENT YEAR ON 31-10-2009 DECLARING TOTAL INCOME OF RS.5,58,660/-. THE ASSESSEE HAD CLAIMED LOSSES IN THE CURR ENT YEAR TO THE TUNE OF RS.12,46,765/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 23-08-2010. THE ASSESSEE HAD PURCHASED AGRICULTURAL LAND ADMEASURING 13.5 ACRES VIDE REGISTERED SALE DEED DATED 1 8/2/2008. THE SAID LAND WAS SOLD DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE CLAIMED DEDUCTION ON A CCOUNT OF COMPENSATION PAID TO VARIOUS PARTIES WHO HAD CREATED INT EREST IN THE SAID LAND. THE ASSESSEE ALLEGEDLY PAID THE SAID COMPENSATIO N TO REMOVE ENCUMBRANCES/INTERESTS IN THE LAND. IN SCRUTINY ASSESSM ENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITIONS/DISALLOWANCE S IN THE INCOME RETURNED BY THE ASSESSEE ON FOLLOWING COUNTS: I. DISALLOWANCE OF COMPENSATION PAID RS.10,07,60,000/- THIS INCLUDES PAYMENT OF COMPENSATION TO: A. KISHORE GUNDECHA RS.1,18,00,000/- B. JALINDER B. PADALE RS.3,00,000/- C. SURESH B. PADALE RS.2,00,000/- D. SANJAY P. KALATE RS.74,00,000/- E. M/S. PARAMOUNT INFRASTRUCTURE RS.2,10,00,000/- TOTAL RS.4,07,00,000/- F. BANSILAL RAMNATH AGARWAL RS.6,00,60,000/- CHARITABLE TRUST (HEREINAFTER REFERRED TO AS THE BRACT) II. DEEMED DIVIDEND U/S. 2(22)(E) RS.4,39,918/- III. INTEREST RECEIVED FROM SHRI MADANLAL NAHAR RS.69,10 2/- 3 ITA NO. 1103/PN/2013, A.Y. 2009-10 AGGRIEVED BY THE ASSESSMENT ORDER DATED 30-12-2011, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) AFTER E XAMINING THE FACTS OF THE CASE AND DOCUMENTS ON RECORD UPHELD T HE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING T HE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3. SHRI HARI KISHAN APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE FACTS IN THE PRESENT CASE ARE COMPLEX AND PEC ULIAR. THUS, THE AUTHORITIES BELOW HAVE NOT BEEN ABLE TO APPRECIATE THE S AME IN THE RIGHT SPRIT. THE DISALLOWANCE OF PAYMENT OF COMPENSATION IS IN RE SPECT OF AGRICULTURAL LAND MEASURING 13.5 ACRES COMPRISING IN SURVEY NO. 45, VILLAGE-MHALUNGE, TEHSIL-MULSHI, PUNE (HEREIN AFTER REFERRED TO AS THE LAND). THE SAID LAND WAS JOINTLY OWNED BY THE FAMILIES OF P ASHANKARS, PADALES AND SOME OTHER PERSONS. THEY HAD RECEIVED THE LAND U/S. 32 OF THE TENANCY ACT. IN THE MONTH OF DECEMBER, 2004, ONE K ALATE FAMILY CONSISTING OF 8 MEMBERS PAID RS.20,00,000/- TO THE OWNERS OF THE AFORESAID LAND BY 11 DIFFERENT CHEQUES DRAWN ON COSMOS CO -OP. BANK LTD. SANEWADI, PUNE FOR PURCHASE OF THE SAID LAND. A VISAR PAVTI DATED 07-03-2005 WAS EXECUTED BETWEEN THE OWNERS OF THE LAN D AND KALATE FAMILY FOR A TOTAL CONSIDERATION OF RS.1,20,00,000/-. ON 25-01- 2007 THE KALATE FAMILY ENTERED INTO AN AGREEMENT FOR SALE OF THE LAN D WITH SHRI AJIT BANDHU MUTHA FOR RS.4,91,00,000/- AND RECEIVED RS.30,00 ,000/- AS ADVANCE VIDE CHEQUE DATED 20-01-2007 DRAWN ON CEN TRAL BANK OF INDIA, BHAWANI PETH BRANCH, PUNE. 3.1. ON THE OTHER HAND, THE ASSESSEE ENTERED INTO A MEM ORANDUM OF UNDERSTANDING (MOU) DATED 26-02-2007 WITH BRACT FOR TRAN SFER/SALE 4 ITA NO. 1103/PN/2013, A.Y. 2009-10 OF SHARE IN THE AFORESAID LAND FOR A CONSIDERATION OF RS.12,25,00,000/-. AS PER THE TERMS AND CONDITIONS OF THE M OU BETWEEN THE ASSESSEE AND BRACT THE ASSESSEE WAS TO FULFILL INTER ALIA THE FOLLOWING CONDITIONS: I. OBTAIN ORDER U/S. 43 OF THE BOMBAY TENANCY AND AGRICULTU RAL LANDS ACT, 1948. II. OBTAIN PERMISSION U/S. 63(1) OF BOMBAY TENANCY AND AGRICULTURAL ACT IN FAVOUR OF THE BRACT. III. ENSURE CLEAR AND MARKETABLE TITLE OF THE LAND. IV. OBTAIN PERMISSION FOR CONVERSION OF LAND TO RESIDENTIAL AND I T/OR SIMILAR USAGE. APART FROM THE ABOVE MOU, THE ASSESSEE HAD UNWRITTEN UNDERSTANDING WITH SHRI JUGRAJ H. PALRESHA FOR SALE OF 3.25 ACRES OF THE LAND I.E. SHARE IN THE LAND AND HAD RECEIVED RS.1,00,00,000/ - VIDE TWO CHEQUES FROM HIM. THE ASSESSEE HAD ALSO UNWRITTEN UNDERSTAN DING WITH M/S. BAFNA MOTORS (MUMBAI) PVT. LTD. FOR THE SALE OF REMA INING 1/4 TH SHARE IN THE LAND MEASURING 3.25 ACRES. THE ASSESSEE RECEIVED RS.36,50,000/- BY CHEQUE FROM M/S. BAFNA MOTORS (MUMBAI) PVT. LTD. 3.2. ON 02-03-2007 KALATE FAMILY TRANSFERRED THEIR RIGHTS IN THE LAND TO SHRI AJIT MUTHA, VIDE AGREEMENT DATED 25/01/2007. TH E SAID AGREEMENT IS AT PAGE 130 TO 133 OF THE PAPERBOOK. IN ANOTHER TRANSACTION, THE OWNERS OF THE LAND AS VENDORS AND THE KALATE FAMILY, A S CONSENTING PARTY THROUGH THEIR POWER OF ATTORNEY SHRI SANJAY P. KALATE ENTERED INTO AN AGREEMENT FOR SALE OF THE LAND WITH THE A SSESSEE FOR A CONSIDERATION OF RS.2,12,00,000/-. IN THIS AGREEMENT IT WAS MENTIONED THAT THE OWNERS HAVE ALREADY RECEIVED RS.20,00,000/-. ALT HOUGH, AN AGREEMENT TO SALE IN RESPECT OF THE LAND WAS EXECUTED O N 19-04-2007, 5 ITA NO. 1103/PN/2013, A.Y. 2009-10 THE REGISTERED SALE DEED COULD ONLY BE MADE IN FAVOUR OF THE ASSESS EE ON 18/2/2008 AS ONE OF THE CO-OWNERS OF THE LAND SHRI AN AND BAJIRAO PADALE WAS MURDERED IN APRIL, 2007. 3.3. IN THE PARALLEL SERIES OF TRANSACTIONS, SHRI AJIT MUTHA EXECUTED MOU WITH M/S. PARAMOUNT INFRASTRUCTURE FOR TRANSFER OF HIS RIGHTS IN THE LAND ACQUIRED BY HIM VIDE AGREEMENTS DATED 25-01-20 07 FOR A CONSIDERATION OF RS.40,00,000/- (AT PAGE 232 TO 235 OF THE PAPER BOOK). SHRI AJIT MUTHA RECEIVED RS.25,00,000/- BY CHEQUE TOWARDS PART PAYMENT OF THE AGREED CONSIDERATION. THEREAFTER, ON 10/12 /2007, M/S. PARAMOUNT INFRASTRUCTURES TRANSFERRED THEIR RIGHTS IN TH E LAND OBTAINED FROM SHRI AJIT MUTHA TO THE ASSESSEE FOR A CONSIDERATION OF RS.4,10,00,000/- VIDE A TABDEEL PATRA (TRANSFER DEED) PLA CED AT PAGE 240 TO 243 OF THE PAPER BOOK. 3.4. ON 16-02-2008 THE ASSESSEE COULD OBTAIN PERMISSION U/S. 43 AND 63(1) OF THE BOMBAY TENANCY AND AGRICULTURAL ACT. HO WEVER, THE SUB-DIVISIONAL OFFICER IMPOSED A CONDITION THAT 50% OF THE MA RKET RATE WILL HAVE TO BE PAID TO THE GOVERNMENT IF THE LAND IS TO BE USED FOR NON- AGRICULTURAL PURPOSE. SINCE, THE ASSESSEE COULD NOT COMPL Y WITH THE CONDITIONS LAID DOWN IN THE MOU WITH BRACT, THE MOU WAS C ANCELLED VIDE DEED OF CANCELLATION DATED 01-04-2008 (PAGE 374 TO 383 OF THE PAPER BOOK). BY THE TIME THE TRUST HAD ALREADY PAID RS.11,,31,00,000 /- TO THE ASSESSEE AS PART CONSIDERATION FOR PURCHASE OF LAND. THE A SSESSEE AS PER THE DEED OF CANCELLATION WAS TO PAY RS.6,00,60,000 /- AS COMPENSATION TO THE TRUST FOR CANCELLATION OF DEED. THE S AID AMOUNT WAS PAID BY THE ASSESSEE TO THE TRUST VIDE VARIOUS CH EQUES DRAWN ON BANK OF MAHARASHTRA, HDFC BANK AND RUPEE CO-OP. BANK L TD. THE ASSESSEE ALSO PAID COMPENSATION OF RS.63,50,000/- TO M/S. B AFNA 6 ITA NO. 1103/PN/2013, A.Y. 2009-10 MOTORS (MUMBAI) PVT. LTD. AND RS.1,45,00,000/- TO SHRI JUGRA J H. PALRESHA FOR CANCELLATION OF THE UNDERSTANDING FOR SELL OF LAND MEASURING 3.25 ACRES, EACH. THE ASSESSEE FURTHER PAID CO MPENSATION FOR REMOVING ENCUMBRANCES AND INTERESTS IN THE LAND TO T HE FOLLOWING PERSONS: I. SHRI SURESH BAJIRAO PADALE II. MS. LAXMIBAI NAMDEO BHARNE III. SHRI SHALAN KUNDALIK YEWALE IV. SOU BHIMA GULAB JAMBHULKAR 3.5. THE ASSESSEE FURTHER PAID A SUM OF RS.91,25,000/- TO SHRI SHANTARAM BAJIRAO PADALE FOR CLEARING THE TITLE OF THE LAND AND FOR CONSENTING THE ENTRY OF ASSESSEES NAME IN THE REVENU E RECORDS. A COPY OF PAVTI (RECEIPT) DATED 5/3/2008 TO THIS EFFECT IS AT PAGE 367 TO 370 OF THE PAPER BOOK. THE LD. AR SUBMITTED THAT ALL THE PAYME NTS HAVE BEEN MADE THROUGH BANKING CHANNELS AND THE PERSONS/PARTIES TO WHOM COMPENSATION HAS BEEN PAID HAVE FILED CONFIRMATIONS. THE AU THORITIES BELOW HAVE ERRED IN DISBELIEVING THE SAME. ADMITTEDLY, VARIO US DOCUMENTS VIZ MOU, AGREEMENT TO SELL, ETC. ARE NOT REGIST ERED BUT THEY ARE SUPPORTED BY THE PAYMENTS MADE THROUGH THE BANK S. THE SAID PAYMENTS HAVE NOT BEEN DISPUTED BY THE REVENUE. 3.6. THE ASSESSEE FINALLY SOLD THE LAND TO M/S. RIVERVIEW PR OPERTIES PVT. LTD. FOR A CONSIDERATION OF RS.15,30,00,000/- VIDE REGISTE RED SALE DEED DATED 03/7/2008. A COPY OF THE SALE DEED IS AT PAG E 403 TO 414 OF THE PAPER BOOK. THE ASSESSEE HAS CLAIMED THE AMOUNTS P AID AS COMPENSATION TOWARDS THE COST OF LAND. THERE IS NO ALLEGA TION THAT THE MONEY HAS FLOWN BACK TO THE ASSESSEE AND THERE IS NO E VIDENCE ON RECORD TO SHOW THAT THE AGREEMENTS WERE BOGUS/FABRICA TED. DURING THE 7 ITA NO. 1103/PN/2013, A.Y. 2009-10 SEARCH OPERATION CARRIED OUT AT THE BUSINESS PREMISES OF THE FAMILY ON 26-02-2014, AFTER PASSING OF THE ASSESSMENT ORDER AND T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) NO INCRIMINATING DOCUMEN TS OR INFORMATION RELATING TO PURCHASE AND SALE OF LAND WAS EVER RECEIVED. THE PAYMENTS MADE TO SMT. LAXMI BHARNE, SMT. SHALAN YEOLE , SMT. BHEEMA JHAMBULKAR, SHRI SHANTARAM BAJIRAO PADALE, SHRI MAR UTI WAMAN KOLEKAR, M/S. BAFNA MOTORS (MUMBAI) PVT. LTD. AND SHRI JUGRAJ H. PALRESHA HAVE BEEN ACCEPTED BY THE DEPARTMENT. THE CASE OF THE REMAINING PERSONS IS ALSO ON THE SAME FOOTING. THE REVENUE IN AN ARBITRARY AND UNJUSTIFIED MANNER WITHOUT ANY REASON HAS DISALLOWED THE PAYMENT OF COMPENSATION TO SOME OF THE PERSONS. 3.7. IN RESPECT OF PAYMENT OF COMPENSATION OF RS.4,07,00,000/ - IT IS CLEARLY EVIDENT FROM THE SEQUENCE OF EVENTS AND THE DO CUMENTS ON RECORD THAT KALATE FAMILY HAD ORIGINALLY ACQUIRED RIGHTS TO PURCHASE THE LAND AND HAD PAID RS.20,00,000/- TO THE ACTUAL OWNERS OF THE LAND IN DECEMBER, 2004. THE OWNERS OF THE LAND HAD EXECUTED VIS AR PAVTI IN FAVOUR OF KALATE FAMILY ON 11-03-2005 FOR PURCHASE OF THE LAND FOR CONSIDERATION OF RS.1,20,00,000/-. THE FACT OF EXECUTION OF VISAR PAVTI IS CLEARLY MENTIONED IN POWER OF ATTORNEY EXECUTED BY TH E KALATE FAMILY IN FAVOUR OF ONE OF THEIR FAMILY MEMBERS, SHRI SANJAY KALATE ON 19-04- 2007 WHICH IS DULY NOTARIZED. THIS FACT IS AGAIN MENTIONED IN THE PURCHASE DEED DATED 19-04-2007 BETWEEN THE OWNERS O F THE LAND AND THE ASSESSEE IN WHICH THE KALATE FAMILY IS CONSENTING PAR TY. HOWEVER, NO AMOUNT WAS PAID TO THE KALATE FAMILY IN LIEU OF RELINQUISHIN G THEIR RIGHTS IN FAVOUR OF THE ASSESSEE. THEREFORE, SOME AMOUNT WAS TO PAID TO KALATE FAMILY BY THE ASSESSEE TO GET THE CLEAR TITLE OVER THE LAND. 8 ITA NO. 1103/PN/2013, A.Y. 2009-10 3.8. IN RESPECT OF COMPENSATION OF RS.6,00,60,000/- PAID TO BRACT THE LD. AR SUBMITTED THAT AS PER THE MOU DATED 26-02-2 007 THE ASSESSEE HAD AGREED TO SELL 6.5 ACRES OF NON-AGRICULTURAL LAND WITHIN 1 YEAR TO BRACT AND HAD RECEIVED A SUM OF RS.11,31,00,000/- OUT OF THE AGREED TOTAL PRICE OF RS.12,25,00,000/- ON THE TERMS AND C ONDITIONS MENTIONED IN THE MOU. SINCE, THE ASSESSEE WAS NOT ABLE T O FULFILL THE CONDITIONS SATED IN THE MOU WITHIN THE SPECIFIED TIME FRAME T HE MOU WAS CANCELLED BY DEED OF CANCELLATION DATED 01-04-2008 AN D ASSESSEE WAS TO PAY COMPENSATION OF RS.6,00,60,000/- FOR CANCELLATION OF THE MOU AS WELL AS FOR EXTENSION OF THE PERIOD FOR PAYMENT OF AMOUNT OF COMPENSATION. 3.9. IN SUPPORT OF HIS SUBMISSIONS THAT NOTARIZED AGREEME NT CANNOT BE DISBELIEVED/REJECTED WITHOUT BRINGING ON RECORD EVIDENC E TO SHOW THAT THE AGREEMENTS WERE SHAM, FABRICATED OR NON GENUIN E, THE LD AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. KURUPESHBHAI N. PATEL, 359 ITR 504 (GUJ.); II. CIT VS. A S WARDEKAR, 283 ITR 432 (CAL.); III. ITO VS. SATISH KUMAR, 163 TTJ 33 (JODH.); AND IV. ITO VS. SANJAY KUMAR GOEL, 108 TTJ 823 (DEL.). THE LD. AR FURTHER SUBMITTED THAT SUSPICION HOWEVER STRON G CANNOT TAKE PLACE OF THE MATERIAL IN SUPPORT OF THE FINDINGS OF THE AO. TO SUPPORT THIS ARGUMENT THE LD. AR PLACED RELIANCE ON: I. DHAKESWARI COTTON MILLS LTD. VS. CIT, 26 ITR 775 (SC); AND II. BANSAL STRIPS (P) LTD. VS. ACIT, 99 ITD 177 (DEL.). 3.10. IN RESPECT OF GROUND NO. 3 RELATING TO DEEMED DIVIDEN D, THE LD. AR SUBMITTED, THAT THE ASSESSEE HAD RECEIVED ADVANCE FROM M/S. TULIPS 9 ITA NO. 1103/PN/2013, A.Y. 2009-10 AMBIENCE (DELHI) PVT. LTD. IN WHICH THE ASSESSEE IS A DIRECTO R. THE SAID AMOUNT OF ADVANCE IS IN FACT HIRE CHARGES PAID BY THE COM PANY TO THE ASSESSEE FOR HIRING OF THE VEHICLES OWNED BY THE ASSESSEE . THEREFORE, THE CONTENTION OF THE REVENUE THAT THE AMOUNT RECEIVED IS ADVANCE AND IS TO BE TREATED AS DEEMED DIVIDEND IS BASED ON WRONG A PPRECIATION OF FACTS. IN FACT THE COMPANY IS HAVING ACCUMULATED LOSSES O F RS.37.25 LAKHS AS ON 31/3/2008 AND RS.41.42 LAKHS AS ON 31/3/200 9. IN THE ABSENCE OF ACCUMULATED PROFITS, THE PROVISIONS OF SECTION 2(2 2)(E) WILL NOT APPLY. 3.11. THE LD. AR SUBMITTED THAT THE AUTHORITIES BELOW HAVE ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS RECEIVE D INTEREST FROM SHRI MADANLAL NAHAR. NO INTEREST WAS EVER RECEIVED FROM S HRI MADANLAL NAHAR AND NO TDS WAS EVER DEDUCTED ON THE INTEREST A LLEGEDLY RECEIVED BY THE ASSESSEE. THE LD. AR ALSO PLACED ON RECORD A CO PY OF THE COMPUTATION OF TOTAL INCOME FOR THE ASSESSMENT YEAR 200 9-10 TO SHOW THAT UNDER THE HEAD. INCOME FROM OTHER SOURCES, EXCE PT FOR BANK INTEREST AND INTEREST ON SAVING ACCOUNT, NO OTHER INCOME HAS BEEN RECEIVED AS INTEREST. THE LD. AR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND ACCEPTING THE APPEAL OF THE ASSESSEE. 4. ON THE OTHER HAND DR. HARSHVARDHINI BUTY REPRESENTIN G THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF THE AUT HORITIES BELOW. THE LD. DR SUBMITTED THAT THE LIABILITIES IN THE FORM OF PAYMENT OF COMPENSATION HAVE BEEN CREATED TO DIVERT THE PROFITS OF THE BUSINESS. ALL THE DOCUMENTS REFERRED TO BY THE ASSESSEE INVOLVING H UGE TRANSACTIONS ARE UNREGISTERED AND ARE THUS, INVALID. PAYM ENT MADE BY THE CHEQUES DOES NOT MAKE THE TRANSACTIONS SACROSANC T. THE LD. DR FURTHER CONTENDED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT 10 ITA NO. 1103/PN/2013, A.Y. 2009-10 MOU WITH BRACT AND THE CANCELLATION DEED WERE NOT MADE ON THE SAME DAY. BOTH THESE DOCUMENTS ARE FABRICATED. A PER USAL OF BOTH THE DOCUMENTS WOULD SHOW THAT THEY HAVE BEEN CREATED TO DIVERT THE PROFITS AND REDUCE TAX LIABILITY. THE LD. DR VEHEMENTLY SUPPORTED THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND SUBMITTED T HAT THE IMPUGNED ORDER IS WELL REASONED AND DETAILED. THEREFORE, THE SAME SHOULD BE SUSTAINED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES IN EXTENSO AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE DOCUMENTS AND VARIO US AGREEMENTS ON WHICH THE LD. AR HAS PLACED RELIANCE IN SUPP ORT OF HIS SUBMISSIONS. IN APPEAL, THE ASSESSEE HAS CHALLENGED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE DISALLOW ANCE OF RS.4,07,00,000/- PAID AS COMPENSATION TO THE VARIOUS PAR TIES TO REMOVE ENCUMBRANCE/INTEREST IN THE LAND. THE ASSESSEE HAS ALSO ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE DISALLOWANCE OF RS.6,00,60,000/- PAID TO BRACT AS COMPENSATION FOR CANCELLING MOU IN RESPECT OF SALE OF THE LAN D. APART FROM THE ABOVE THE ASSESSEE HAS IMPUGNED THE ADDITION O F RS.4,39,918/- AS DEEMED DIVIDEND U/S. 2(22)(E) AND RS.69,102/- ON ACCOUNT OF INTEREST RECEIVED FROM SHRI MADANLAL NAHAR. 6. THE FACTS IN THE PRESENT CASE WITH RESPECT TO THE S ALE OF LAND ARE QUITE PECULIAR. THERE ARE TWO SETS OF PARALLEL TRANSACTIONS IN RESPECT OF SAME PARCEL OF LAND. MAJORITY OF THE TRANSACTIONS BETWEE N THE PARTIES ARE UNREGISTERED ON NON-JUDICIAL STAMP PAPER WITH CONFLICTIN G DATES. THE ASSESSEE HAS ALLEGEDLY PAID COMPENSATION OF RS.10,07,6 0,000/- TO REMOVE THE ENCUMBRANCES/INTERESTS OF VARIOUS PARTIES CR EATED THROUGH 11 ITA NO. 1103/PN/2013, A.Y. 2009-10 VARIOUS AGREEMENTS/MOU IN RESPECT OF SAME PIECE OF LAND. IN ORDER TO SETTLE THE INTEREST OF SUCH PARTIES IN ONE LIMB OF THE TRAN SACTIONS THE ASSESSEE HAS ALLEGEDLY PAID RS.4,07,00,000/- AS COMPENSATIO N. THE DETAILS OF THE PARTIES TO WHOM AFORESAID AMOUNT OF COMPENS ATION IS PAID IS AS UNDER: I. KISHORE GUNDECHA RS.1,18,00,000/- II. JALINDER B. PADALE RS.3,00,000/- III. SURESH B. PADALE RS.2,00,000/- IV. SANJAY P. KALATE RS.74,00,000/- V. M/S. PARAMOUNT INFRASTRUCTURE RS.2,10,00,000/- TOTAL RS.4,07,00,000/- 7. THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME T AX (APPEALS) AFTER APPRECIATING THE FACTS AND DOCUMENTS ON RE CORD CONCLUDED THAT THE AFORESAID PAYMENTS TO THE PARTIES AR E NOT GENUINE AND THE DOCUMENTS IN SUPPORT OF THE PAYMENTS ARE FABRIC ATED. WE HAVE THOROUGHLY EXAMINED THE DOCUMENTS THAT HAVE BEEN PLAC ED ON RECORD BEFORE US IN THE FORM OF PAPER BOOK. THE LAND MEASURING 13.5 ACRES COMPRISING IN SURVEY NO. 45, VILLAGE-MHALUNGE, TEHSIL-MULSHI, PUN E WAS JOINTLY OWNED BY THE FAMILIES OF PASHANKARS, PADALES AN D SOME OTHER PERSONS. THE KALATE FAMILY ENTERED INTO AN AGREEM ENT WITH THE OWNERS OF THE LAND IN DECEMBER, 2005. A VISAR PAVTI DA TED 07-03- 2005 WAS EXECUTED BY THE OWNERS OF THE LAND IN FAVOUR O F KALATE FAMILY, CONSIDERATION OF THE LAND WAS FIXED AT RS.1,20,00,000/-. THE KALATE FAMILY PAID RS.20,00,000/- TO THE OWNERS OF THE LAND THROUG H VARIOUS CHEQUES. THEREAFTER, ON 25-01-2007 THE KALATE FAMILY ENT ERED INTO AN AGREEMENT FOR SALE OF THE LAND WITH SHRI AJIT BANDHU MUTHA . THE AGREEMENT BETWEEN KALATE FAMILY AND SHRI AJIT BANDHU MUT HA IS AT PAGES 111 TO 115 OF THE PAPER BOOK. A CLOSE SCRUTINY O F THE AGREEMENT 12 ITA NO. 1103/PN/2013, A.Y. 2009-10 SHOWS THAT IT HAS BEEN EXECUTED ON RS.100/- NON-JUDICIA L STAMP PAPER AND IT IS AN UNREGISTERED DOCUMENT. THE AGREEMENT IS NE ITHER WITNESSED NOR NOTARIZED. THE TOTAL SALE CONSIDERATION AG REED AS PER THE SAID DOCUMENT IS RS.4,91,00,000/- AND AN ADVANCE OF RS.30,00 ,000/- HAS BEEN ALLEGEDLY PAID VIDE CHEQUE. HOWEVER, NO DETAILS OF THE CHEQUE ARE GIVEN. THUS, THE AGREEMENT BETWEEN THE KALATE FAMILY AND SHRI AJIT BANDHU MUTHA APPARENTLY SEEMS TO BE AFTERTHOUGHT AND ITS GENUINENESS IS IN SERIOUS DOUBT. THERE IS ANOTHER AGREEM ENT BETWEEN KALATE FAMILY AND SHRI AJIT BANDHU MUTHA DATED 02-03-200 7 AT PAGES 130 TO 133 WHICH REITERATES THE ADVANCE PAYMENT OF RS.33,00,0 00/-. IN THE SUBSEQUENT AGREEMENT IT IS STATED THAT DUE TO UNA VOIDABLE CIRCUMSTANCES THE TRANSACTION COULD NOT BE COMPLETED. IN ORDER TO COMPLETE THE TRANSACTIONS THE BUYER WILL INFORM THE OWNER S TO EXECUTE THE SALE DEED IN FAVOUR OF THE PARTIES AT A LATER STAGE. THIS DOCUMENT IS ALSO EXECUTED ON NON-JUDICIAL STAMP PAPER AND IS UNREGIST ERED LIKE EARLIER AGREEMENT. THIS AGREEMENT IS ALSO NEITHER WITNESS ED NOR NOTARIZED. ANOTHER INTERESTING STUDY OF THE AGREEMENTS SHOW THAT THE STAMP PAPERS USED FOR EXECUTING THE AGREEMENTS DATED 25-01-2007 AND 02-03-2007 WERE PURCHASED ON THE SAME DATE I.E. 24-01- 2007 AND ARE CONSECUTIVELY NUMBERED I.E. AG183119 AND AG183120. IT IS BEYOND COMPREHENSION, AS TO HOW THE PARTIES TO AGREEMENT KNOW BEFORE HAND THAT SUBSEQUENT/SUPPLEMENTARY AGREEMENT WILL BE REQUIRE D TO BE EXECUTED FOR WHICH NON-JUDICIAL STAMP PAPER IS PURCHASED ALONG WITH THE STAMP PAPER FOR WRITING SALE AGREEMENT. THESE ENTIR E FACTS CAST SHADOW OF DOUBT OVER THE TRANSACTION BETWEEN KALATE FAM ILY AND SHRI AJIT BANDHU MUTHA. THEREAFTER, SHRI AJIT BANDHU MUTHA ENTERED INTO AN AGREE MENT WITH M/S. PARAMOUNT INFRASTRUCTURE ON 07-12-2007. THE AGREEMENT 13 ITA NO. 1103/PN/2013, A.Y. 2009-10 BETWEEN SHRI AJIT BANDHU MUTHA AND PARAMOUNT INFRASTRU CTURE IS PLACED AT PAGES 232 TO 239 OF THE PAPER BOOK. 8. IN PARALLEL SERIES OF TRANSACTIONS IN RESPECT OF THE SAM E PIECE OF LAND, THE ASSESSEE ENTERS INTO MOU WITH BRACT FOR TRANSFE R/SALE OF THE LAND IN QUESTION ON 26-02-2007. IT IS NOTEWORTHY TO POIN T OUT HERE THAT WHEN THIS MOU BETWEEN THE ASSESSEE AND BRACT WAS EXE CUTED, THE ASSESSEE HAS ABSOLUTELY NO INTEREST OR RIGHT IN THE LAN D. THE ASSESSEE WITHOUT HAVING ANY INTEREST OR RIGHT IN RESPECT OF THE LA ND EXECUTED THIS MOU WITH BRACT FOR A CONSIDERATION OF RS.12,25,00,000/- AN D RECEIVED RS.75,00,000/- AT THE TIME OF EXECUTION OF THE SA ID MOU AND THE REMAINING AMOUNT OF RS.11,00,50,000/- WAS TO BE PAID O VER A PERIOD OF TIME. THE ASSESSEE FURTHER UNDERTAKES TO ATT AIN NECESSARY PERMISSIONS UNDER VARIOUS ACTS AND TRANSFER CLEAR MARKET ABLE TITLE OF THE LAND. THE ASSESSEE FURTHER UNDERTAKES TO HANDOVER VACANT POSSESSION OF THE LAND. THE LD. AR HAS FAILED O EXPLAIN AS TO HOW THE ASSESSEE ENTERED INTO MOU IN RESPECT OF LAND IN WHICH SHE HAS NO INTEREST OR RIGHT IN ANY MANNER WHATSOEVER, TILL THAT TIME. 9. THEREAFTER, THE ASSESSEE ENTERED INTO AN AGREEMENT OF SALE WITH THE OWNERS OF THE LAND, WHEREIN, KALATE FAMILY WAS THE CONS ENTING PARTY. A REGISTERED AGREEMENT TO SELL WAS EXECUTED ON 19-04-2007 BETWEEN THE PARTIES. A CONSIDERATION OF RS.2,12,00,000/- WA S AGREED TO BE PAID FOR THE TRANSFER OF LAND. ON PERUSAL OF CLAUSE (3) OF THE SAID AGREEMENT SHOWS THAT THE SAID LAND WAS STATED TO BE FR EE FROM ENCUMBRANCES EXCEPT SEEKING PERMISSIONS U/S. 43 OF THE T ENANCY ACT. THE RELEVANT EXTRACT OF THE AGREEMENT IS REPRODUCED HERE-IN-UN DER: 3). THAT THE VENDOR HEREBY ASSURES TO THE PURCHASE RS THAT THE PROPERTY DESCRIBED IN PARA 1 IS FREE FROM ENCUMBRAN CE/S EXCEPT TO GET 14 ITA NO. 1103/PN/2013, A.Y. 2009-10 THE PERMISSION UNDER SECTION 43 OF TENANCY ACT AND FURTHER THAT VENDORS HAS NOT ENTERED IN TO ANY AGREEMENT OR ARRANGEMENT OF WHATSOEVER NATURE WITH ANY PERSON OTHER THAN THE PURCHASERS. AND IF ANY ISSUE RAISED THEN VENDORS WILL BE RESPONSIBLE FOR THE CON SEQUENCES. 10. IT WOULD BE RELEVANT TO MENTION HERE THAT ALTHOUGH IN THE AGREEMENT IT HAS BEEN STATED THAT THE LAND IS FREE FROM ALL ENCUMBRANCES, IN THE PARALLEL TRANSACTIONS, PRIOR TO THIS A GREEMENT DATED 19-04-2007, KALATE FAMILY WHICH WAS A CONSENTING PA RTY IN THE SAID AGREEMENT HAD PURPORTEDLY EXECUTED AGREEMENT TO SALE DATED 25-01-2007 WITH SHRI AJIT MUTHA. THE CLAUSE (3) OF THE RE GISTERED AGREEMENT IS CONTRARY TO THE PARALLEL TRANSACTION BETWEE N KALATE FAMILY AND SHRI AJIT MUTHA. DURING THE COURSE OF ARGUMENTS THE LD. AR OF THE ASSESSE E HAS ALSO PLACED RELIANCE ON THE TRANSFER DEED (TABDIL PATRA) BE TWEEN THE ASSESSEE AND M/S. PARAMOUNT INFRASTRUCTURE DATED 10-0 8-2007. THE SAID TRANSFER DEED IS PLACED AT PAGES 242 TO 243 OF THE PAPER BOOK. A PERUSAL OF THE TRANSFER DEED SHOWS THAT IT HAS BEEN EXE CUTED ON RS.100/- NON-JUDICIAL STAMP PAPER. THE STAMP PAPER WAS PURCHASED ON 26-03-2007 BY THE ASSESSEE (I.E. PRIOR TO THE DATE O F EXECUTION OF REGISTERED SALE AGREEMENT) AND THE TABDIL PATRA WAS EXEC UTED ON THE SAID NON-JUDICIAL STAMP PAPER ON 10-08-2007. THE SAID DO CUMENT WAS NOTARIZED ON 07-01-2008. IN RESPECT OF THIS DOCUMENT IT WOULD BE RELEVANT TO MENTION THAT THE TABDIL PATRA EXECUTED BET WEEN THE ASSESSEE AND M/S. PARAMOUNT INFRASTRUCTURE IS PRIOR TO THE DATE OF AGREEMENT BETWEEN SHRI AJIT MUTHA AND M/S. PARAMOUNT INFRASTRUCTURE. THE AGREEMENT BETWEEN SHRI AJIT MUTHA AND M/S. PARAMOUNT INFRASTRUCTURE IN RESPECT OF LAND WAS EXECUTE D ON A SUBSEQUENT DATE I.E. 07-12-2007. THUS, THERE HAS BEEN TOTAL 15 ITA NO. 1103/PN/2013, A.Y. 2009-10 INCONSISTENCY IN THE EXECUTION OF THE UNREGISTERED DOCUME NTS. THIS CLEARLY SHOWS THAT THESE DOCUMENTS HAVE BEEN MADE JU ST TO CREATE ARTIFICIAL ENCUMBRANCES AND INTEREST IN THE LAND. A FURTHER PERUSAL OF TABDIL PATRA DATED 10-08-2007SHOWS THAT THE LAND IN QUE STION IS SAID TO BE FREE FROM ALL ENCUMBRANCES. THE RELEVANT EXTRACT O F THE TABDIL PATRA IS REPRODUCED HERE-IN-UNDER: 5) THAT THE VENDOR HEREBY AGREE, ACCEPT AND DECLAR E THAT :- A) THAT THE SAID PROPERTY IS FREE FROM ENCUMBRANCES . B) THAT THE VENDOR HEREBY ASSURES TO THE PURCHASER THAT THE SAID PROPERTY IS NOT SUBJECT MATTER OF ANY ACQUISITION O R REQUISITION, NOR HAS HE RECEIVED ANY NOTICE TO THAT EFFECT TILL TODAY. THA T THE SAID PROPERTY IS NOT A SUBJECT MATTER OF A DISPUTE OR PENDING LITIGATION . THAT THE VENDOR WILL COOPERATE THE PURCHASER IF ANYONE ON BEHALF OF THEM WILL ASK FOR THEIR SHARE AND WILL COOPERATE TO BRING THE SAID LAND TO RE-TENABLE UNIT UNDER CEILING ACT. AND IS SAID ACT IS ABOLISHED THEN TO COOPERATE FOR THE DEVELOPMENT OF THE SAID PROPERTY. 11. THE LD. AR IN SUPPORT OF HIS SUBMISSIONS THAT THE ASS ESSEE HAD PAID A SUM OF RS.2,10,00,000/- TO M/S. PARAMOUNT INFRASTRUC TURE AS COMPENSATION HAS ALSO REFERRED TO THE CONFIRMATION LETTER DATED 22-09-2008 FROM M/S. PARAMOUNT INFRASTRUCTURE AND THE LETTER DATED 18-12-2013 ADDRESSED BY THE ASSESSEE TO M/S. PARAMOU NT INFRASTRUCTURE. THESE DOCUMENTS ARE PLACED AT PAGES 435 AND 437 OF THE PAPER BOOK, RESPECTIVELY. A PERUSAL OF THE CONFIRMATIO N LETTER SHOWS THAT THERE IS NO MENTION OF THE DATE OF EXECUTION OF TABD IL PATRA AND IT REFERS TO THE DATE ON WHICH THE DOCUMENT IS NOTARIZED I.E . 07-01-2008. A FURTHER PERUSAL OF THE CONFIRMATION LETTER SHOWS THAT T HE CONFIRMATION IS ONLY WITH RESPECT TO RS.2,10,00,000/- ONLY OUT OF THE AGREED CONSIDERATION OF RS.4,07,00,000/- WHEREAS IN THE TABDIL PATRA THE TOTAL CONSIDERATION TO BE PAID BY THE ASSESSEE TO M/S. PARAMO UNT INFRASTRUCTURE IS RS.4,10,00,000/-. IN SO FAR LETTER DATED 18-12-2013 IS CONCERNED, WE FAIL TO UNDERSTAND ITS RELEVANCE. ONCE THE CONFIRMATION 16 ITA NO. 1103/PN/2013, A.Y. 2009-10 LETTER HAS BEEN RECEIVED FROM M/S. PARAMOUNT INFRASTRUC TURE WAY BACK IN 2008, THERE WAS NO POINT IN AGAIN GIVING DETAILS OF THE ALLE GED PAYMENTS MADE IN RESPECT OF TRANSACTION WHICH HAS BEEN ADMITTED BY M/S. PARAMOUNT INFRASTRUCTURE. A PERUSAL OF LETTER FURTH ER SHOWS THAT THERE WAS NO REQUEST FROM M/S. PARAMOUNT INFRASTRUCTUR E TO FURNISH SUCH INFORMATION/DETAILS EITHER. THUS, THERE ARE SERIES OF CONTRADICTIONS IN THE AGREEMENTS EXECUTED BETWEEN VARIO US PARTIES AND ALL THE AGREEMENTS IN RESPECT OF THE LAND ARE UNREGISTERE D. THE DOCUMENTS REFERRED ABOVE HAVE BEEN CREATED TO GENERATE FALSE EV IDENCE. 12. IN RESPECT OF COMPENSATION PAID TO KISHORE GUNDECHA , JALINDER B. PADALE, SURESH B. PADALE AND SANJAY P. KALATE WE FIND THA T THERE IS NO AGREEMENT WITH THE SAID PERSONS. THERE ARE NO CONFIR MATIONS FROM THE AFORESAID PERSONS. NO BONAFIDE REASON HAS BEEN SHOW N FOR THE PAYMENT OF COMPENSATION TO THEM. THEREFORE, IN VIEW OF THE FACTS AND OUR OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE UNREGISTERED AGREEMENTS EXECUTED BETWEEN VARIOUS PARTIES CREATING INTEREST/ENCUMBRANCES ON THE LAND ARE BOGUS DOCUMENTS AND HAVE BEEN CREATED TO SUPPRESS THE INCOME GENERATED FROM SALE OF THE LAND. 13. IN SO FAR AS THE PAYMENT OF RS.6,00,60,000/- TO BRAC T IS CONCERNED, THE AUTHORITIES BELOW HAVE HIGHLIGHTED THE DEFIC IENCIES IN THE TRANSACTIONS, AND THE DOCUMENTS EXECUTED. IN OUR CONSIDERED OPINION THE DISCREPANCIES HIGHLIGHTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ARE VERY RELEVANT AND MATERIAL. AS WE HAVE POINTED OUT EARLIER, THE ASSESSEE HAD ENTERED INTO MOU WITH BRACT IN RESPECT OF THE LAND ON 26-02-2007. ON THE SAID DATE THE ASSESSEE HAD NEITHER ANY INTEREST NOR ANY RIGHT IN THE LAND. IT WAS ONLY ON 19-0 4-2007 WHEN THE ASSESSEE ENTERED INTO AN AGREEMENT WITH OWNERS OF THE LAND, THE 17 ITA NO. 1103/PN/2013, A.Y. 2009-10 INTEREST OF ASSESSEE WAS CREATED IN THE LAND. IN THE FI RST INSTANCE IT HAS NOT BEEN EXPLAINED AS TO IN WHAT CAPACITY THE MOU WAS E NTERED INTO BY THE ASSESSEE WITH BRACT. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE BRACT HAS ALREADY SHOWN THE AMOUNT OF RS.6,00,6 0,000/- IN BOOKS OF ACCOUNT AND HAS ALSO DISCLOSED THE SAME IN ITS RETURN OF INCOME. WE ARE OF THE CONSIDERED VIEW THAT THE TRANSAC TION BY THE ASSESSEE WITH BRACT IS MERELY AN EYEWASH AND AN ATTEM PT TO CIRCUMVENT THE PROVISIONS OF THE ACT. THE BRACT IS A TR UST AND IS ENJOYING THE BENEFIT OF SECTION 12A OF THE INCOME TAX AC T. THE AMOUNT OF RS.6,00,60,000/- WHICH HAS BEEN DIVERTED TO BRACT BY TH E ASSESSEE IN THE NAME OF ALLEGED COMPENSATION EVEN IF SHOWN BY THE TRUST IN ITS RETURN OF INCOME WOULD NOT ATTRACT TAX LIABILITY. THUS, IN TH E GUISE OF COMPENSATION THE ASSESSEE IS TRYING TO REDUCE TAX INCIDE NCE ON THE HUGE INCOME GENERATED FROM SALE OF LAND. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GIVEN DETAILED REASON FOR DISBELIEVING THE TRANSACTIONS WITH BRACT. FOR THE SAKE OF BREVITY WE ARE NOT REPROD UCING THE SAME HERE. WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE COMM ISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION OF ALLEGED PA YMENT OF COMPENSATION. 14. THE LD. AR HAS SUBMITTED THAT ALL THE PAYMENTS HAVE BEEN MADE THROUGH CHEQUES AND THE DETAILS OF THE PAYMENTS HAVE B EEN PLACED BEFORE THE AUTHORITIES BELOW. WE ARE OF THE CONSIDERED VIE W THAT MERE PAYMENT OF AMOUNT THROUGH CHEQUES WOULD NOT MAKE THE TRANSACTIONS SACROSANCT. THE PAYMENTS HAVE TO BE CORROBORATED WIT H COGENT EVIDENCE WHICH IS MISSING IN THE TRANSACTIONS IN THE PRESEN T CASE. THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE ON VARIOUS DEC ISIONS IN SUPPORT OF HIS SUBMISSIONS THAT NOTARIZED DOCUMENT CANNO T BE DISBELIEVED OR REJECTED WITHOUT BRINGING ON RECORD THE EV IDENCE TO SHOW 18 ITA NO. 1103/PN/2013, A.Y. 2009-10 THAT THE AGREEMENTS WERE SHAM, FABRICATED OR NOT GENU INE. IN THE PRESENT CASE IT HAS BEEN UNAMBIGUOUSLY BROUGHT OUT TH AT VARIOUS DOCUMENTS PLACED ON RECORD ARE NOT GENUINE. TWO PARALLE L SETS OF TRANSACTION HAVE BEEN CARRIED OUT. AFTER THE EXECUTION OF ONE TRANSACTION IN THE ONE LIMB OF TRANSACTIONS, IT HAS BEEN M ENTIONED THAT THERE HAS BEEN NO ENCUMBRANCES ON THE LAND. THE DOCU MENTS EXECUTED THROUGHOUT ARE UNREGISTERED AND SUFFER FROM VA RIOUS CONTRADICTIONS AND SHORTCOMINGS. THE ONLY DOCUMENTS REGIST ERED IN THE ENTIRE GAMUT OF TRANSACTIONS IS TO AN AGREEMENT OF SALE B ETWEEN THE OWNERS OF THE LAND AND THE ASSESSEE FOLLOWED BY A REGIST ERED SALE DEED AND THE SALE DEED EXECUTED BY THE ASSESSEE IN FAVOUR O F M/S. RIVER VIEW PROPERTIES PVT. LTD. THESE REGISTERED TRANSACTIONS ARE NOT IN DISPUTE AND HAVE RESULTED IN HUGE GAIN TO THE ASSESSEE. THE OT HER PERIPHERAL TRANSACTIONS HAVE BEEN INDUCED TO REDUCE THE TAX LIABILITY . THUS, WE ARE OF THE CONSIDERED VIEW THAT THE JUDGMENTS RELIED BY THE LD. AR DURING THE COURSE OF SUBMISSIONS WILL NOT SUPPORT THE CASE OF ASSESSEE AND HAVE NO APPLICATION IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN VIEW OF OUR DETAILED REASONS ABOVE, WE DISMISS GR OUND NOS. 1 AND 2 RAISED IN APPEAL BY THE ASSESSEE. 15. IN GROUND NO. 3 THE ASSESSEE HAS ASSAILED THE ADDIT ION OF RS.4,39,918/- AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. TH E LD. AR HAS SUBMITTED THAT THE ASSESSEE IS ALSO ENGAGED IN LEASIN G OF VEHICLES. THE COMPANY HAS GIVEN ADVANCE TO THE ASSESSEE FOR HIRIN G OF THE VEHICLES. THE LD. AR HAS ALSO POINTED OUT THAT IN THE FINAN CIAL YEAR ENDING ON 31-03-2008 THE ASSESSEE HAS ACCUMULATED LOSS OF RS.37.25 CRORES AND IN THE FINANCIAL YEAR ENDING ON 31-03-2009 THE ACCUMULATED LOSS IS TO THE TUNE OF RS.41.42 CRORES. THE COMPANY WAS NOT HAVING AN Y ACCUMULATED PROFITS. IN THE ABSENCE OF ACCUMULATED PROFITS THE 19 ITA NO. 1103/PN/2013, A.Y. 2009-10 PROVISIONS OF SECTION 2(22)(E) WILL NOT APPLY. WE FIND FORCE IN TH E SUBMISSIONS OF THE LD. AR. HOWEVER, WE FIND FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THERE ARE NO FINDINGS WITH REGARD T O THE ACCUMULATED LOSS OF TULIPS AMBIENCE DELHI PVT. LTD. IN WHICH TH E ASSESSEE IS A DIRECTOR. ACCORDINGLY, IN OUR CONSIDERED VIE W THIS ISSUE NEEDS A REVISIT TO THE ASSESSING OFFICER FOR FRESH ADJUDICAT ION IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE. ACCORDINGLY, GROU ND NO. 3 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 16. IN GROUND NO. 4 THE ASSESSEE HAS IMPUGNED THE FIND INGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITIO N OF RS.69,102/- ON ACCOUNT OF INTEREST RECEIVED. THE CONTENT ION OF THE ASSESSEE IS THAT NO INTEREST HAS BEEN RECEIVED FROM SHR I MADANLAL NAHAR. THEREFORE, THERE WAS NO QUESTION OF TDS ON INTEREST. THE LD. AR HAS SUBMITTED THAT THE TDS WAS DEDUCTED ON THE AMOUN T IN ANTICIPATION THAT INTEREST WOULD BE PAYABLE. HOWEVER, THE ACCOUNT WAS SETTLED WITHOUT ANY INTEREST PAYMENT. THE COMMISSIONER OF INCOM E TAX (APPEALS) HAS OBSERVED THAT THE ASSESSEE HAS NOT PLACED ON RECORD ANY DOCUMENT TO SHOW THAT THE ACCOUNT WAS SETTLED OR CLOS ED WITHOUT PAYING INTEREST TO THE ASSESSEE AND OR TO HOW THE ACC OUNT WAS FINALLY RECONCILED. EXCEPT FOR THE BALD ASSERTIONS NOTHING HAS B EEN BROUGHT ON RECORD BY THE ASSESSEE TO SUBSTANTIATE HER CONTENTION S. THE LD. AR HAS PLACED ON RECORD COMPUTATION OF TOTAL INCOME FOR ASSESSME NT YEAR 2009-10 TO SHOW THAT EXCEPT FOR THE BANK INTEREST NO OTHER INTEREST HAS BEEN RECEIVED BY THE ASSESSEE. IN THE ABSENCE OF COMP LETE DETAILS WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. THE ASSESSEE SHALL PRODUCED NECESSARY DOCUMENTS TO SUBSTANTIATE HER SUBMISSIONS. THE ASSESSI NG OFFICER AFTER CONSIDERING THE SAME SHALL DECIDE THIS ISSUE AFRESH, IN ACCORDANCE 20 ITA NO. 1103/PN/2013, A.Y. 2009-10 WITH LAW. THE GROUND NO. 4 RAISED IN THE APPEAL OF THE ASS ESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSE. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR THE STATISTICAL PURPOSE IN THE AFORESAID TERMS. ORDER PRONOUNCED ON MONDAY, THE 14 TH DAY OF DECEMBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 14 TH DECEMBER, 2015 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-III, PUNE 4. ' / THE CIT-III, PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. / // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE
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