U.Rambabu, CHENNAI V. ITO, CHENNAI

ITA 1924/CHNY/2010

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7652 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained cash credit; Unexplained expenditure; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! ' , # $% BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO.1924/MDS/2010 / ASSESSMENT YEAR : 2007-08 SHRI U. RAMBABU , NEW NO.10, OLD NO.19, IV CROSS STREET, SASTRI NAGAR, ADYAR, CHENNAI- 400 020. PAN AHOPR4477K ( /APPELLANT) VS THE INCOME-TAX OFFICER, BUSINESS WARD-IV(4), CHENNAI-34. ( /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI R. DURAI PANDIAN, JCIT / DATE OF HEARING : 16.01.2017 ! / DATE OF PRONOUNCEMENT: 22.02.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 1. 9.2010. - - ITA 1924/MDS/10 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. THE HONBLE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR 15 LAKHS TOWARDS THE AMOUNT RECEIVED AS CONFIRMATORY PARTY I N SPITE OF PROVIDING THAT THERE IS NO INCOME TO THE A PPELLANT IN THAT TRANSACTION AND THE AMOUNT RECEIVED REPRESE NTS THE AMOUNT OF REIMBURSEMENT OF ADVANCE MADE TO THE FARMERS OF AGRICULTURAL LAND. 2. THE HONBLE CIT(APPEALS) HAS ERRED IN UPHOLDIN G THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR 1,75,175/- TOWARDS THE BALANCE C OMISSION IN THE TRANSACTION O F PURCHASE OF LAND ON BEHALF OF COMMISSION IN THE TRANSACTION OF PURCHASE OF LAND ON BEHALF OF MRS. GNANESWARI WHEREAS THE APPELLANT HAS CLEARLY PROVED BY PRODUCING THE STAMPED RECEIPT FOR THE AMOUNT OF 1,75,000/- TOWARDS THE COMPENSATION PAID TO THE LAN D OWNER FOR THE LOSS OF AGRICULTURAL ACTIVITY. 3. THE HONBLE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITIONS OF 24,47,663/- MADE BY THE ASSESSING OFFICER TOWARDS UNEXPLAINED CREDITS IN THE BANK ACCOUNT OF THE APPELLANT TOWARDS THE AMOUNT RECEIVED FROM NUZIVEED U SEEDS PVT. LTD. BEING THE EMPLOYER OF THE APPELLANT DESPITE THE FACT THAT IT WAS CLEARLY ESTABLISHED TH AT THE AMOUNT SENT BY THE EMPLOYER WAS FOR THE REPAIR AND RENOVATION WORK AT THE COMPANY PREMISES AT CHENNAI TO BE SPENT ON BEHALF OF THE COMPANY AND NO INCOME HAD ARISEN FOR THE APPELLANT. FURTHER CIT(APPEALS) VII I HAS AFFIRMED THE ADDITION OF 16,000/- TOWARDS SALARY WHICH IS INCORRECT WHEREAS THE APPELLANT HAD RECEIVED ONLY 50,000/- TOWARDS SALARY. 4. THE HONBLE CIT(APPEALS) HAS ERRED IN CONFIRMIN G THE ADDITIONS OF 7,50,200/- TOWARDS ADVANCE PAID TO LAND OWNERS IN SPITE OF PROVING THAT THERE WAS NO DEFICI T IN THE - - ITA 1924/MDS/10 3 CASH FLOW STATEMENT AND SUCH AMOUNTS WERE PAID ONLY TO THE LAND OWNERS WHO WERE FARMERS AS COMPENSATION AMOUNT FOR LOSS OF AGRICULTURAL ACTIVITY BUT FOR SU CH PAYMENT THE TRANSACTION WOULD NOT HAVE TAKEN PLACE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE FILED HIS RETURN OF INCOME FOR THE AY 2007-08 ON 23.7.2007 BY ADMITTING THE TAXABLE INCOME OF 3,11,980/-. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE AO HAD MADE FOUR ADDITIONS UNDER VARIOUS HEADS AND FIN ALLY ASSESSED THE TOTAL INCOME AS 52,01,010/-. PARTICULARS AMOUNT IN RS.( `) CONSIDERED RECEIVED AS CONFIRMING PARTY 15,00,000 COMMISSION INCOME FROM MRS.GNANAESWARI 1,75,175 SALARY AND OTHER RECEPTS FROM NUZIVEEDU SEEDS PVT LTD. 26,63,663 ADVANCE PAID TO LAND OWNERS 7,50,200 AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS), WHO CONFIRMED THE ADDITIONS BY DISMIS SING THE APPEAL OF THE ASSESSEE. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR SUBMITTED THAT THE ASSESSEE WAS APPOI NTED AS LIASONING AGENT TO PURCHASE AGRICULTURAL LAND NEAR CHENNAI, FOR AND ON BEHALF OF GOWRI REALTORS P. LTD., BANGALORE. THE - - ITA 1924/MDS/10 4 ASSESSEE WAS PAID 15 LACS BY GOWRI REALTORS P. LTD. TOWARDS PAYMENT AS A CONFIRMING PARTY, WHICH REPRESENTS THE AMOUNT OF REIMBURSEMENT OF ADVANCE MADE TO THE FARMERS OF THE AGRICULTURAL LAND. THE COMPANY ALSO PAID CONSIDERA TION OF 2.5 CRORES BY WAY OF VARIOUS D.DS DRAWN FAVOURING THE V ENDORS WHICH WERE DULY PAID TO THE OWNERS OF LAND. THERE IS NO INVOLVEMENT OF ANY INCOME FOR THE ASSESSEE FOR THIS YEAR. 4.1 THE AO HAS STATED THAT VARIOUS D.DS FOR 2.5 CRORES WERE PAID TO THE ASSESSEE AS PER THE AGREEMENT. TH IS AMOUNT REPRESENTS THE AMOUNT OF PURCHASE CONSIDERATION PAI D FOR THE AGRICULTURAL LAND PURCHASED FROM THE FARMERS AND PA ID DIRECTLY TO THE FARMERS WHO ARE THE OWNERS OF THE LAND. FURTHE R THE D.DS WERE DRAWN IN FAVOUR OF THE VENDOR AND NOT IN FAVOU R OF THE ASSESSEE AND WERE GIVEN TO THE FARMERS AND HENCE SU CH D.DS COULD NOT HAVE BEEN DEPOSITED IN THE ASSESSEES BAN K ACCOUNT. EVEN THE AMOUNT OF 15 LACS PAID AS CONFIRMING PARTY RELATES TO THE REIMBURSEMENT OF ADVANCE PAID ON BEHALF OF GOWR I REALTORS TO THE FARMERS AND IT DOES NOT CONSTITUTE INCOME IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IS NOT HAVING ANY OTHER BANK ACCOUNT THAN THE ONE DECLARED BY HIM. HIS ONLY BAN K ACCOUNT - - ITA 1924/MDS/10 5 WAS AXIS BANK, ADYAR. THE SALE DEED DATED 21.03.20 07 BETWEEN GOWRI REALTORS P. LTD. AND DR. SUNDARARAJAN WITH THE ASSESSEE AS CONFIRMING PARTY IS THE DOCUMENT TO PRO VE THE LIASIONING WORK DONE BY THE ASSESSEE. FOR THE LIAS IONING WORK DONE BY THE ASSESSEE, THE ASSESSEE HAS RAISED BILL FOR SERVICE CHARGES TOGETHER WITH SERVICE TAX IN THE SUBSEQUENT YEAR AND OFFERED THE SAME AS INCOME. 4.2 THE VARIOUS D.DS ON VARIOUS DATES AMOUNTING TO 2.5 CRORES WERE DRAWN IN FAVOUR OF THE VENDORS AND HENC E THERE IS NO QUESTION OF DEPOSITING THE D.DS IN THE ASSESSEE S BANK ACCOUNT. THE AMOUNT OF 15 LACS PAID TO THE ASSESSEE AS CONSIDERATION REPRESENTS THE PART OF SALE CONSIDERA TION OF THE PROPERTY PURCHASED BY GOWRI REALTORS P. LTD. THE S ALE CONSIDERATION ADVANCED TO THE VENDOR BY THE ASSESSE E WAS REIMBURSED TO THE ASSESSEE. THERE WAS NO INVOLVEME NT OF ANY INCOME OF WHATSOEVER FOR THE ASSESSEE. THE LIASONI NG WORK CONSISTS OF IDENTIFYING THE LAND, NEGOTIATING WITH THE LAND OWNERS NAMELY FARMERS, NEGOTIATING WITH THE AGREEMENT HOLD ERS IF ANY, PAYING COMPENSATION TO THE FARMERS FOR LOSS OF AGRI CULTURAL ACTIVITY ETC. FOR THE SERVICES RENDERED THE ASSESS EE HAS - - ITA 1924/MDS/10 6 BEEN PAID SERVICE CHARGES ALONG WITH THE SERVICE TA X IN THE SUBSEQUENT YEARS. SALE CONSIDERATION IS PAID DIREC TLY TO THE OWNERS BY WAY OF D.DS. THE ADVANCE AMOUNT AND COMPENSATION AMOUNT IS ROUTED THROUGH THE ASSESSEE. 4.3 THE REIMBURSEMENT AMOUNT GIVEN IN THE NAME OF T HE ASSESSEE WAS DEPOSITED IN ASSESSEES BANK ACCOUNT. THE D.DS OF SALE CONSIDERATION WAS PAID TO THE VENDORS DIRECTLY. HENCE, THERE IS NO INCOME INVOLVED AND THE ADDITION S MADE IN THIS REGARD FOR AN AMOUNT OF 15 LACS IS INCORRECT AND FIT TO BE DELETED. 4.4. ON THE OTHER HAND, THE LD. DR RELIED ON THE OR DER OF LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN CONTENTION OF THE LD.A .R IS THAT AN AMOUNT OF ` 2.5 CRORES THROUGH VARIOUS DEMAND DRAFTS (D.D.S) WAS NOT GIVEN TO THE ASSESSEE AND IT WAS DIRECTLY GIVEN TO THE VENDORS, ONE DR.R.SUNDARARAJA N. HOWEVER, THE LEARNED ASSESSING OFFICER GIVEN A CATEGORICAL FINDING IN HIS ORDER THAT AN ADVANCE OF ` 2.5 CRORES VIDE VARIOUS D.D.S PAID IN FAVOUR OF THE ASS ESSEE BY - - ITA 1924/MDS/10 7 M/S.GOWRI REALTORS PVT. LTD.,BANGALORE VIDE MEMORAN DUM OF AGREEMENT DATED 13.03.2007 BETWEEN ASSESSEE AND M/S.GOWRI REALTORS PVT. LTD.,BANGALORE. FURHTER, TH E ASSESSEE HAS NOT PROVIDED THE BANK ACCOUNT THROUGH WHICH THESE D.DS WERE ENCASHED. THE ASSESSEE RECEIVED THE AMOUNT OF ` 2.5 CRORESTHE SALE DEED DATED 21.03.2007 EXECUTED BY DR.R.SUNDARARAJAN AS A VENDOR AND THE ASSESSEE HAS CONFIRMING THE PARTY IN FAVOUR OF M/S .GOWRI REALTORS PVT. LTD.,BANGALORE, WHICH SHOWS THAT THE ASSESSEE RECEIVED ` 15 LAKHS AS CONSIDERATION ON ACCOUNT OF CONFIRMING PARTY. THE EXPLANATION OFFERED BY TH E ASSESSEE IS THAT THIS AMOUNT OF ` 15 LAKHS REPRESENT THE PART OF SALE CONSIDERATION PAID TO DR.R.SUNDARARAJA N IS NOT SUPPORTED BY ANY DOCUMENTS. IN SUCH SITUATION, IT I S NOT POSSIBLE TO HOLD THAT ASSESSEE HAS NOT IN RECEIPT O F ` 15 LAKHS, WHEN THE DOCUMENTS SHOWS OTHERWISE. ACCORDI NGLY, IN OUR OPINION, WE HAVE NO HESITATION IN CONFIRMING THE ADDITION OF ` 15 LAKHS TOWARDS RECEIPT OF CONSIDERATION AS CONFIRMING PARTY FROM M/S.GOWRI REALTORS PVT. LTD.,BANGALORE. ACCORDINGLY, THE ADDITION IS SUSTA INED. - - ITA 1924/MDS/10 8 HENCE, THIS GROUND STANDS DISMISSED. 6. REGARDING SECOND GROUND RELATING TO RECEIPT OF COMMISSION FROM SMT. GNANESWARI, THE LD. AR, SUBMIT TED THAT DURING THE PERIOD FROM 1.9.2006 TO 12.3.2007, THE ASSESSEE ACTED AS A LIASIONING AGENT FOR PURCHASING AGRICULTURAL LAND FOR ONE MRS. GNANESWARI, A N.R.I . FOR WHOM HE PURCHASED LAND AND FOR THIS SERVICE HE HAS RECEIVED COMMISSION OF 2,57,000/-. THIS AMOUNT WAS ADMITTED AS INCOME IN HIS RETURN OF INCOME. THE AO CONTENDED THAT THE DIFFERENCE AMOUNT OF 4,32,175/- IS THE AMOUNT RECEIVED FROM MRS. GNANESWARI AND THE COST INCLUDING THE STAMP DUTY AND REGISTRATION EXPENSES I.E. 60,00,000 55,67,825, IS COMMISSION INCOME. BUT WHEREAS APART FROM STAMP DUTY, REGISTRATION EXPENSE S, SALE CONSIDERATION, AN AMOUNT OF 1,75,000/- WAS PAID TO THE FARMERS WHO WERE OWNERS OF AGRICULTURAL LAND AS COMPENSATION FOR LOSS OF AGRICULTURAL ACTIVITY AND 175/- TOWARDS INCIDENTAL EXPENSES IN THIS CONNECTION. 6.1.ACCORDING TO AR,THERE IS EXTRA COST INVOLVED BE YOND THE SALE CONSIDERATION, STAMP DUTY,REGISTRATION CHARGES AND THE - - ITA 1924/MDS/10 9 REGISTRATION EXPENSES, TOWARDS COMPENSATION FOR LOS S OF AGRICULTURAL ACTIVITY PAID TO THE FARMERS, IT HAS T O BE PART OF THE TOTAL COST INVOLVED IN THE TRANSACTION. THE CO MMISSION AMOUNT FOR THE SAME WAS ONLY 2,57,000/- WHICH WAS DULY DECLARED IN THE ASSESSEES RETURN OF INCOME. THE V OUCHER NAMELY, THE STAMPED RECEIPT FOR THE PAYMENT OF COMPENSATION TO THE EXTENT OF 1,75,000/- WAS FURNISHED BEFORE THE LOWER AUTHORITIES. HENCE, THE AMOUNT OF 1,75,175/- ADDED IN THE COMMISSION AMOUNT HAS TO BE DELETED. THE COMMISSION AMOUNT OF 2,57,000/- WAS CORRECTLY DISCLOSED BY THE ASSESSEE AND NO OTHER AM OUNT WAS DERIVED AS INCOME FROM THE TRANSACTION BY THE ASSESSEE. WITHOUT PAYING THE COMPENSATION TO THE FARMERS, THE AGRICULTURAL LAND CANNOT BE PURCHASED IN THE FIRST PLACE. AFTER THE PAYMENT OF COMPENSATION ONL Y, THE NEGOTIATION FOR THE PURCHASE OF LAND WOULD GO THROU GH. THE PAYMENT OF COMPENSATION TO THE FARMERS IS ESSENTIAL PAYMENT AND BUT FOR SUCH PAYMENT THE PURCHASE COULD NOT HAPPEN. HENCE THE AMOUNT OF 1,75,175/- WAS TO BE ADDED WITH THE PURCHASE COST. THE ASSESSEE WAS NOT - - ITA 1924/MDS/10 10 BENEFITTED BY ANY OTHER AMOUNT THAN 2,57,000/- TOWARDS HIS COMMISSION. WHAT HE GOT AS COMMISSION WAS DULY DECLARED IN HIS RETURN OF INCOME. HENCE, THE LD. A R SUBMITTED THAT THE ADDITION OF 1,75,175/- HAS TO BE DELETED. 6.2 THE LD DR RELIED ON THE ORDER OF LOWER AUTHORI TIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE CLAIM OF ASS ESSEE IS THAT AN AMOUNT OF 1,75,175/- WAS PAID AS A COMPENSATION TO THE FARMERS AND WITHOUT WHICH THE AGRICULTURAL L AND COULD NOT BE PURCHASED. TO THAT EXTENT, THE ASSESSEE HAS ALSO FILED THE DETAILS LIKE STAMP DUTY, REGISTRATION CHA RGE ETC., FOR PAYMENT OF COMMISSION TO THE FARMERS. HOWEVER, THI S WAS NOT CONSIDERED BY THE LD. LEARNED COMMISSIONER OF I NCOME TAX(A). IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF LEARNED ASSESSING OFFICER TO EXAMINE TH E GENUINENESS OF THE CLAIM OF ASSESSEE AND DECIDE ACCORDINGLY. HENCE, THIS ISSUE IS REMITTED BACK TO THE FILE OF LEARNED ASSESSING OFFICER FOR FRESH CONSIDERATION. 8. IN RESPECT OF THIRD GROUND RELATING TO PAYMENTS OF - - ITA 1924/MDS/10 11 SALARY AND OTHER RECEIPTS FROM NUZIVEEDU SEEDS PVT. LTD., THE LD. AR SUBMITTED THAT THE ASSESSEE WAS EMPLOYED TILL APRIL 2006 FOR A PERIOD OF ONE AND HALF YEARS AS BR ANCH IN CHARGE FOR CHENNAI BRANCH OF A COMPANY BY NAME, NUZIVEEDU SEEDS P. LTD. HIS RESPONSIBILITY WAS TO ADMINISTER AS MANAGER AND TO PURCHASE AGRICULTURAL LAND FOR AND ON BEHALF OF THE COMPANY. THE ASSESSEE WAS THE AUTHORIZED SIGNATORY TO EXECUTE THE DOCUMENT ON BEH ALF OF THE COMPANY. THE COMPANYS REGISTERED OFFICE WAS SITUATED AT HYDERABAD. HE WAS PAID A SALARY OF 10000/- PER MONTH BY THE COMPANY. FOR MEETING THE EXPENSES OF BRANCHY OFFICE AND ALSO TOWARDS MEETING THE REPAIR AND REMODELLING EXPENSES OF THE COMPANYS BUILDING AT A NNA SALAI, CHENNAI TOWARDS REIMBURSEMENT AGAINST BILLS, THE COMPANY USED TO SEND D.DS TO HIS SAVINGS ACCOUNT WI TH AXIS BANK, CHENNAI. 8.1 ACCORDING TO AR, THE AMOUNT SENT BY THE COMPANY REPRESENTS ONLY FOR THE EXPENSES OF CHENNAI OFFICE AND THE REPAIR AND REMODELLING EXPENSES FOR THE COMPANYS BUILDING AT CHENNAI. FOR THE PREVIOUS YEAR ENDED - - ITA 1924/MDS/10 12 31.3.2007, THE ASSESSEE WAS PAID 50,000/- TOWARDS SALARY FOR FIVE MONTHS. 8.2 ACCORDING TO AR, THIS AMOUNTS SENT BY THE COMPA NY, NUZIVEEDU SEEDS P. LTD. WERE OF THREE CATEGORIES OF PAYMENT. ONE TOWARDS THE OFFICE EXPENSES FOR THE C HENNAI OFFICE OF THE COMPANY, THE SECOND ONE TOWARDS REPAI RING AND REMODELLING EXPENSES FOR THE COMPANYS BUILDING AT CHENNAI AND THE THIRD ONE TOWARDS THE SALARY OF THE ASSESSEE. THE AO HAD OBTAINED CONFIRMATION LEDGER FROM THE COMPANY DIRECTLY WHICH COMPRISES ONLY OF OFFICE EXPENSES AND SALARY. THE OTHER PAYMENT RELATING TO REPAIR AND REMODELLING EXPENSES WAS NOT CONTAINED IN THAT LEDGER. THE AMOUNT SENT FOR MEETING THE REPAIR AND REMODELL ING EXPENSES FOR THE COMPANYS BUILDING AT CHENNAI WILL NATURALLY BE REFLECTED IN A SEPARATE LEDGER UNDER D IFFERENT HEAD OF ACCOUNT IN THE COMPANYS BOOKS, WHEREAS THE ASSESSEE HAS RECEIVED THE AMOUNT IN ALL THE THREE CATEGORIES AND DEPOSITED THE SAME IN HIS BANK ACCOU NT. 8.3 THE AO HAS ALSO STATED THAT SOME OF THE D.DS SE NT - - ITA 1924/MDS/10 13 BY THE COMPANY WERE NOT TRACEABLE IN THE ASSESSEES BANK ACCOUNT. THAT IS BECAUSE SOME OF THE D.DS WERE DR AWN IN FAVOUR OF THE WORKS CONTRACTORS AND SUCH D.DS WERE SENBT TO THE ASSESSEE BY DEBITING HIS ACCOUNT. HENCE, SU CH D.DS COULD NOT BE FOUND IN ASSESSEES BANK ACCOUNT. THE ASSESSEE HAD RECEIVED TOWARDS OFFICE EXPENSES AND F OR REPAIRS AND REMODELLING OF THE COMPANYS BUILDING A T CHENNAI 29,75,012/-, WHICH WAS DULY DEPOSITED IN HIS BANK ACCOUNT AND SPENT FULLY FOR COMPANY. AN AMOUN T OF 5,27,349/- PLUS EXTRA AMOUNT OR 16000/- SHOWN UNDER THE HEAD SALARY IN THE CONFIRMATION LEDGER FROM THE COMPANY REPRESENT THE OFFICE EXPENSES. APART FROM THIS, THE ASSESSEE RECEIVED 24,47,663/- TOWARDS REPAIRS AND REMODELLING EXPENSES OF THE COMPANYS BUILDING AT CHENNAI. ALL THE AMOUNTS WERE SPENT IN FULL ON BEH ALF OF THE COMPANY. 8.4 HE SUBMITTED THAT THE ASSESSEES INCOME DURING HIS WORK AS MANAGER OF CHENNAI BRANCH OF M/S.NUZIVEEDU SEEDS P. LTD. WAS ONLY BY WAY OF SALARY OF 16,000/- P.M. FOR THE YEAR ENDED 31.3.2007, HE WORKED ONLY FOR FI VE - - ITA 1924/MDS/10 14 MONTHS FOR WHICH HE WAS PAID A SALARY OF 50,000/- ONLY. AN AMOUNT OF 16,000/- SHOWN EXTRA UNDER THE HEAD SALARY REPRESENTS THE SALARY OF THE STAFF AT CHENNAI OFFIC E. 8.5 ACCORDING TO AR, THE ADDITION MADE FOR 24,47,663/- AND 16,000/- WERE WRONG AND THEY ARE FIT TO BE DELETED . THE AO SHOULD HAVE CALLED FOR THE LEDGER RELATING T O REPAIRS AND REMODELLING EXPENSES OF THE COMPANYS BUILDING AT CHENNAI. IF CALLED THEN THE AMOUNT OF 24,47,663/- CAN BE CORRELATED. THE AO HAS NOT GIVEN ENOUGH OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. NOR SHE HAS CALLED FO R THE CLARIFICATION IN THIS REGARD. 9. THE LD. DR RELIED ON THE ORDER OF THE LD. LEARNE D COMMISSIONER OF INCOME TAX(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE CONTENTION OF THE LD. AR I S THAT THE ABOVE IMPUGNED AMOUNT HAS BEEN RECEIVED TOWARDS REIMBURSEMENT OF EXPENDITURE INCURRED TOWARDS AND RENOVATION WORK AT THE COMPANY PREMISES, CHENNAI A ND THE ASSESSEE HAS RECEIVED ONLY 10,000/- SALARY PER MONTH AND THIS AMOUNT OF 24,47,663/- CANNOT BE - - ITA 1924/MDS/10 15 CONSIDERED AS AN INCOME OF ASSESSEE. FURTHER, ACCO RDING TO HIM, ANOTHER AMOUNT OF 16000/- TOWARDS SALARY IS NOT CORRECT, IT IS THE SALARY OF STAFF AT CHENNAI OFFIC E. HOWEVER, THE DR SUBMITTED THAT AS FOR THE CONFIRMATION RECEI VED FROM M/S.NUZIVEEDU SEEDS P. LTD., REGARDING MISCELLANEOU S RECEIPTS OF ` 5,27,349/- AS AGAINST THE CLAIM OF ` 29,75,012/- AS CLAIMED BY THE ASSESSEE. HENCE, THE RE WAS AN ADDITION OF 24,47,663/- AS UNEXPLAINED EXPENDITURE IN THE HANDS OF ASSESSEE. IN OUR OPINION, IT IS APPRO PRIATE TO REMIT THE ISSUE TO THE FILE OF LEARNED ASSESSING OF FICER TO CALL FOR THE DETAIL STATEMENT OF ACCOUNT FROM THE EMPLOYER, M/S.NUZIVEEDU SEEDS P. LTD., AND THE AMOUNT REIMBUR SED TO THE ASSESSEE TOWARDS THIS COUNT. ACCORDINGLY, T HIS ISSUE IS REMITTED BACK TO THE FILE OF LEARNED ASSESSING O FFICER FOR FRESH CONSIDERATION. AT THE SAME TIME, THE LEARNED ASSESSING OFFICER HAS TO ASCERTAIN THE EXACT AMOUNT OF SALARY PAID TO THE ASSESSEE WHETHER IT IS 66,000/- OR 50,000/- PER MONTH AND DECIDE ACCORDINGLY. THIS ISS UE IS ALSO REMITTED BACK TO THE FILE OF LEARNED ASSESSING OFFICER FOR FRESH CONSIDERATION. - - ITA 1924/MDS/10 16 11. REGARDING ADVANCE PAID TO LAND OWNERS, THE AO H AS MADE AN ADDITION OF 7,50,200/- ON PRESUMPTIVE BASIS TOWARDS THE DIFFERENCE BETWEEN THE CASH WITHDRAWALS AND THE AMOUNT PAID AS COMPENSATION FOR LOSS OF AGRICUL TURAL ACTIVITY TO THE FARMERS TO PURCHASE AGRICULTURAL LA ND. THE ASSESSEE HAS FURNISHED THE FUND FLOW STATEMENT BY W AY OF BANK ANALYSIS ALONG WITH THE RETURN OF INCOME. THE BANK ANALYSIS REPRODUCED BY THE AO IN HER ORDER INDICATE THE AMOUNT USED TO PURCHASE LAND FOR 1,25,98,000/- ON BEHALF OF THE PRINCIPAL PARTIES. THE BANK ANALYSIS ALSO I NDICATES THE AMOUNT RECEIVED FROM MRS. GNANSEHWARI AND OTHER S TOWARDS THE PURCHASE OF LAND FOR AN AMOUNT OF 1,28,55,000/-. ACCORDING TO THE ASSESSEE, IT IS CL EARLY PROVED THAT THE RECEIPTS AND PAYMENTS SHOWN IN THE BANK ANALYSIS TALLY WITH THE ACTUAL INFLOW AND OUTFLOW O F FUNDS AS EXPLAINED AND THERE IS NO ROOM FOR ANY SHORT FALL I N THE RECEIPTS WARRANTING AN ADDITION. HOWEVER, THE AO M ADE AN ADDITION OF 7,50,200/- TO THE RETURNED INCOME TOWARDS THE DIFFERENCE BETWEEN THE CASH WITHDRAWALS FROM THE BA NK AND - - ITA 1924/MDS/10 17 THE AMOUNT PAID AS COMPENSATION TO THE FARMERS. TH AT IS 53,55,000/- (COMPENSATION) MINUS 46,04,800/-(CASH WITHDRAWALS). APART FROM THE CASH WITHDRAWALS FROM THE BANK, THE ASSESSEE WAS HAVING CASH ON HAND FOR THE PURPOSE OF UTILIZING TO PAY ADVANCE TO THE FARMERS WHO ARE OWNERS OF AGRICULTURAL LAND. THE TOTAL CASH RECEIV ED BY THE ASSESSEE IS 47,50,000/- FROM MRS. GNANESHWARI, 51,00,000/- FROM MR. NARAYANAMURTHY FATHER OF THE ASSESSEE, 2,55,000/- FROM GOWRI REALTORS PVT. LTD. FOR MEETING THE REGISTRATION EXPENSES IN ALL TOTALLING TO 1,01,50,000/- OUT OF WHICH THE CASH EXPENSES WERE M ET. ACCORDING TO THE ASSESSEE, FROM THE BANK STATEMENT, IT IS EVIDENT THAT THE TOTAL WITHDRAWAL FROM THE BANK IS 47,56,800/- AND IT IS NOT 46,04,800/- AS STATED BY THE AO. SIMILARLY, THE TOTAL BANK DEPOSIT INTO THE BAN K IS 51,01,500/- AND IT IS NOT 42,03,500/- AS STATED BY THE AO IN HER ORDER. FURTHER, THE ASSESSEE SUBMITTED THAT FROM THE CASH FLOW STATEMENT GIVEN IT IS EVIDENT THAT THE CA SH RECEIPTS AND PAYMENTS ARE CORRECTLY INDICATED AND T HERE IS NO DEFICIT CASH BALANCE AS STATED BY THE AO TO MEET THE - - ITA 1924/MDS/10 18 PAYMENT OF COMPENSATION. 11.1 THE LD. AR, FURTHER SUBMITTED THAT THE DATE WISE BREAK UP OF WITHDRAWALS AND DEPOSITS INTO THE BANK ACCOUNT IS ALSO ENCLOSED AND THE ADDITIONS MADE BY WAY OF 7,50,200/- WAS PURELY ON PRESUMPTIVE BASIS AND FACT UALLY INCORRECT AND IT IS TO BE DELETED. FURTHER, THE AO HAS STATED IN THE LAST PARAGRAPH OF HER ORDER THAT THE ASSESSE E IS OWNING PRESENTLY 6.02 CRORES WORTH OF PROPERTY. THIS STATEMENT IS ABSOLUTELY WRONG IN THE SENSE THAT THE BUSINESS OF THE ASSESSEE IS THAT OF LIASONING AGENT . THE ASSESSEE HAD OBTAINED THE POWER OF ATTORNEY FOR SOM E OF THE PROPERTIES, WHICH ARE MEANT FOR TRANSFERRING TO THE PRINCIPAL COMPANY, THERE WERE PURCHASED BY USING TH E ADVANCE RECEIVED FROM THE PRINCIPAL COMPANIES. HENC E, THEY FORM PART OF THE BUSINESS ASSET CONSIDERING TH E NATURE OF BUSINESS. THE PROPERTIES WILL BE TRANSFERRED AS PER THE LIAONING AGENCY ARRANGEMENT. THEREFORE, HE PRAYED THAT THE ADDITIONS MADE BY THE AO AND CONFIRMED BY THE C IT(A) TO BE DELETED. - - ITA 1924/MDS/10 19 11.2 ON THE OTHER HAND, LD. D.R RELIED ON THE ORDE R OF LD. CIT(A). 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE TOTAL DEPOSIT OF ` 53,55,000/- TO THE BANK ACCOUNT OF ASSESSEE BY WAY OF CASH, WHICH WAS SAID TO HAVE RECEIVED FROM M/S.BALAJI REALTORS PVT. LTD., TOWARDS ADVANCE PAYMENT OT THE LAND OWNERS. OUT OF THIS, ASE MADE A WITHDRAWAL OF ` 46,04,800/- FOR PURCHASE OF AGRICULTURAL LAND. THUS, THERE WAS A DIFFERENCE OF ` 7,50,200/- WHICH WAS CONSIDERED AS INCOME OF ASSESS EE. THE CONTENTION OF THE LD. AR IS THAT ASSESSEE RECEI VED ` 53,55,000/- FROM M/S.BALAJI REALTORS PVT. LTD., AND THE SAME AMOUNT HAS BEEN PAID TO THE LAND OWNERS, THOUG H THE ENTIRE AMOUNT WAS NOT PAID, OUT OF THE DEPOSITS, TH E ASSESSEE IS ALREADY HAVING CASH IN HAND TO MAKE SUC H PAYMENT. IN OUR OPINION, THIS CONTENTION OF ASSESS EE IS REQUIRED TO BE VERIFIED WITH REFERENCE TO BANK ACCO UNTS OF ASSESSEE AND BY RECONCILING THE CASH BALANCE IN THE HANDS - - ITA 1924/MDS/10 20 OF ASSESSEE. THEREFORE, THIS ISSUE IS ALSO REMITTED BACK TO THE FILE OF LEARNED ASSESSING OFFICER FOR FRESH CONSIDERATION. 13. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22 ND FEBRUARY , 2017 AT CHENNAI. SD/- SD/- ( ' . . ' . #$ ) ( % & ' ( ) ) N.R.S.GANESAN * )+,-./0-1223-04* 5 67 /JUDICIAL MEMBER 6789::2;.<-.<=>?@>0 %5 /CHENNAI, A6 /DATED, THE 22 ND FEBRUARY, 2017. K S SUNDARAM 6$ BCDC /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. E)* /CIT(A) 4. E /CIT 5. CF# G /DR 6. #HI /GF.