Harsha Associates P. Ltd., New Delhi V. DCIT, New Delhi

ITA 3297/DEL/2016

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5169 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 02-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MITHUN SHETE
• Section: 131; 6; 10; 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI YOGESH KUMAR US, JUDICIAL MEMBER I.T.A. No.3297/DEL/2016 Assessment Year 2007-08 Harsha Associates P. Ltd., 117, Har Govind Enclave, New Delhi. v. DCIT, Circle-12(1), New Delhi. TAN/PAN: AAACH0568D (Appellant) (Respondent) I.T.A. No.3536/DEL/2016 Assessment Year 2007-08 DCIT, Circle-11(1), New Delhi. v. Harsha Associates P. Ltd., 117, Har Govind Enclave, New Delhi. TAN/PAN: AAACH0568D (Appellant) (Respondent) Appellant by: Shri Sanjiv Sapra, CA Respondent by: Shri Mithun Shete, Sr.D.R. Date of hearing: 05 04 2022 Date of pronouncement: 21 06 2022 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The ca pt io ne d c ro s s ap pe al s h av e b ee n f ile d b y t he as se s see as wel l as Rev en ue a gai ns t th e or de r of the C o mmi ss io ne r of Inco me Tax (A pp ea ls )-X VI, Ne w D el hi [ ‘CIT (A )’ i n s hor t] , da te d 18. 03 .2 01 6 a ri si ng f ro m t he as se ss me nt o rd er da te d 31. 12 .2 00 9 pas se d b y th e As se ssi ng Of f ice r (A O) un de r Sec ti on 1 43 (3) of t he Inc o me Ta x Ac t, 19 61 (t he A ct) c on ce r nin g A Y 2 00 8- 09 . I.T.As. No.3297 & 3536/Del/2016 2 2. Bri ef l y st at ed , t he ass es se e i s en gag ed in th e bu si nes s act ivi t y as r ea l e sta te de v elo pe rs an d d eal in g th er ei n. Th e a ss ess ee f i led ret ur n of in co me f or As se ss me nt Y ea r 2 00 7- 08 i n q uest ion w hi ch was su bje ct ed t o s cru ti n y a ss es s men t unde r Se ct io n 14 3(3 ) of the Act . I n t he co ur se of ass es s men t p ro c eed in gs , t he As se ss ing Of f ice r int er a lia f ou nd t hat t he ou ts ta nd in g l ia bil it ie s t ow ar ds va ri ou s ban ks , i.e ., B an k of Ba ro da, I nd ia n Ov er se as Ba nk and Pu nj ab Nat io na l Ba nk ar e ove rs ta te d t o th e e xte nt of Rs .4,44 ,1 2 ,98 9/ -. T he As ses si ng Of f icer acc or di ng l y a dde d the sa id a mo un t t o the t ot al inc o me of t he as se s see ho ld in g t he sa me t o b e b og us li a bil it y s ho wn b y t he as ses se e t o red uc e th e t axa bl e pr of it s of the co mp an y. T he As ses si ng Of f icer f urth er ob ser ve d t h at t he as ses see h as sho w n an a mou nt of Rs .1 3,4 6,8 80 /- as re cei pt s un der di sp ut e a pp e ari ng un de r the he ad “ ot he r l ia bil it ie s”. Th e A ss e ssi ng Of f icer al le g ed t ha t s uch lia bi li t y h as c ea se d to e xi st a nd c on seq ue nt l y a dd ed t h e af ore sa id su m t o t he to ta l i n co me. T he As se ss i ng Of f icer ne xt o b ser ve d t ha t ass es se e ha s re cei ved a n a mo un t of Rs. 1. 40 c ror e f ro m on e Sh ri As ho k Ve r ma. I n t h e ab se nce of an y c o nf ir mat io n f rom the af ores ai d len de r, t he As se s sin g Of f ice r tr ea ted th e a mou nt rec ei pt a s une xp la in ed in co m e i ntr od uc ed in th e s ha pe of ca sh c red it s. Th e As ses si ng Of f ice r als o ma de so me ot her ad di ti on s ( wi th wh ic h w e are n ot pr es en tl y c on ce rne d) a n d a ss es se d t he inc o me of Rs .7, 11 ,8 0, 31 3/ - a g ain st t he re tu rn ed i nco me of Rs .2 8, 71 , 04 7/- . 3. Ag gri ev ed , the a ss ess ee p ref er re d a p pea l bef or e th e CI T( A). The CI T( A) g ra nt ed ce rt ai n re lief s and c onf ir me d s ome of the act io ns of t he A ss ess in g Of f ice r as agi ta te d in r espe ct ive ap pea ls rep ro du ce d i n su ce edi ng p ar agr ap h. 4. Ag gri ev ed b y th e o rde r of the C IT (A ), bot h as se sse e as w ell a s Re ven ue a re i n Cr oss Ap pe als bef or e the T rib un al . Th e gro un ds of I.T.As. No.3297 & 3536/Del/2016 3 app ea l rai se d b y t h e a ss es se e r ea d as u nde r: “ 1 . T h e L d . CI T (A ) h a s e rr e d b o t h i n l a w a n d o n t he f a c t s o f t h e c a se c o n f i rm i n g t h e o r d e r o f t h e A O . 2 . T h e L d . CI T (A ) h a s e r r e d b o t h i n l a w a n d o n f a c ts o f t h e c a se u p h o l d i n g t h e a d d i t i o n o f R s. 1 , 4 0 , 0 0 , 0 0 0 / - m a d e b y t h e A O u / s . 6 8 o f t h e I n c o m e T a x A c t , 1 9 6 1 i g n o ri n g t h e b u si n e s s in t e re st i n v o l v e d i n t h e t ra n sa c t i o n e x p l a i n e d b e f o r e A O a s w e l l a s be f o re CI T (A ) , i g n o r i n g t h e n o n - re s i d e n t i n v e st m e n t o ri g i n a t e d f rom f o re i g n i n wa rd r e m i t t a n c e , o u t si d e t h e t a x j u r i s d i c t i o n , a s e x p l a i n e d t o A O a s we l l CI T (A ), i g n o ri n g t h e c l a i m o f d e p o si t o r i n H i g h Co u rt p l a i n t e x p l a i n e d t o CI T (A ) i n d i c a t i n g t h a t c o m p a n y w a n t e d to d i sc h a rg e t h e l i a b i l i t y g e n u i n e l y a n d i n a n d i n t h is c o n n e c t i o n a D e m a n d D ra f t o f R s . 5 0 , 0 0 , 0 0 0 / - wa s i s s u e d a s e x p l a in e d d u ri n g t h e A s se s s m e n t p ro c e e d i n g a l s o . H e n c e , t h e r e h a s b e e n a g e n u i n e n e ss i n t h i s b u si n e s s t r a n s a c t i o n w h i c h h a s b e e n i g n o r e d a l t o g e t h e r a nd t h e A ss e s si n g O f f i c e r i n c l u d i n g CI T (A ) wi t h o u t a p p li c a t i o n o f m i n d i n si st e d t h e c o n f i r m a t i o n o f st a t e m e n t o f A c c o u n t , i g n o ri n g t h e j u d i c i a l p r o c e s s i n p r o g r e ss t o l i q u i d a t e t h e o u t sta n d i n g a n d d r a wi n g a d v e r s e i n f e re n c e s o n a t ra n sa c t i o n wh e re th e j u d i c i a l m o n i t o r i n g o f Co u r t i s i n p r o g r e s s . 3 . T h e L d . CI T (A ) h a s e r r e d b o t h i n l a w a n d o n f a c ts o f t h e c a se u p h o l d i n g t h e a d d i t i o n s m a d e b y t h e A O a m o u n t i n g t o R s. 4 , 8 9 , 7 4 4 / - t o w a rd s A d v a n c e s f r o m c o st u m e rs r e c e i ve d i n re g u l a r c o u r s e m e re l y o n t h e b a si s o f n o re s p o n s e t o su m m o n U / s 1 3 1 wi t h o u t c o n si d e r i n g t h e a rr a n g e m e n t s f o r r e a l t y t r an s a c t i o n . T h e se t r a n sa c t i o n s a re m a d e wi t h c o st u m e r f o r a l l o t m e n t of sp a c e i n a sh o p p i n g m a l l f i n a l l y a l l o t t e d a n d c r e d i t g i v e n f o r a d v a n c e re c e i v e d . ” 4.1 Gro u nd s of ap pea l rai se d b y th e R ev enu e i s al so re pro duc ed I.T.As. No.3297 & 3536/Del/2016 4 her eu nd er : 1 . W h e t h e r o n t h e f a c t s & t h e Ci r c u m s t a n c e s o f t h e c a s e , L d . CI T (A ) wa s c o r r e c t i n d e l e t i n g t h e a d d i t i o n o f R s . 4 , 4 4 , 1 2 , 9 8 9 / - o n a c c o u n t o f o t h e r l i a b i l i t y ? 2 . W h e t h e r o n t h e f a c t s & t h e c i r c u m st a n c e s o f t h e c a se , L d . CI T (A ) w a s c o r re c t i n d e l e t i n g t h e a d d i t i o n o f R s. 2, 4 6 , 8 8 0 / - o n a c c o u n t o f c e s sa t i o n o f l i a b i l i t y i g n o r i n g t h e f a c t t h e a s s e s s e e h a s n o t f i l e d a n y c o n f i rm a t i o n i n re s p e c t o f t h e s e l i a b i l i t y e i t h e r b e f o re t h e A O o r CI T (A ) ? (3 ) W h e t h e r o n t h e f a c t s & t h e c i r c u m s t a n c e s o f t h e c a s e , L d . CI T (A ) wa s c o r re c t i n d e l e t i n g t h e a d d i t i o n o f R s . 1 2 , 9 2 , 2 4 1 / - o n a c c o u n t o f a d v a n c e r e c e i v e d f r o m S h . J a g d i sh Ku ma r & S h . A v a n i sh Ku m a r i g n o ri n g t h e f a c t t h a t t h e i d e n t i t y , g e n u i n e n e s s & c r e d i t wo rt h i n e s s o f t h e s e t wo c u st o m e r we r e p ro v e d e i t h e r b e f o re t h e A O o r t h e CI T (A ) . ” 5. W h en th e mat te r w as cal le d f or h ear in g, th e l d. co un se l f or th e ass es se e ad ver te d to th e gr ou nd s of ap pe al of t he as ses se e an d poi nt ed ou t tha t f ir st is sue c onc er ns a ddi ti on of Rs. 1. 40 cro re ma de b y th e As se ssi ng O f f icer u nd er S ect io n 6 8 of th e Act a nd co nf ir me d b y t he CI T( A). In the ma tt er, th e ld . cou ns el po inted o ut t ha t th e ass es se e ha s en te r ed i nt o th e co ll a bor at io n ag re e men t wi th t he len de r, Sh ri As ho k Ver ma an d h is br oth er , S hr i R akesh Ver ma f o r con st ru ct io n of M ult ip le x C ine ma , Kar na l, Har ya n . How eve r, the pro je ct c ou ld no t be c o mpl ete d a nd the f i nan ce s re ce i ved b y the ass es se e we re re t urn ed t o th e le n der s in t er ms of co mpri se agr ee me nt d at ed 2 5.1 1. 20 11 en ter ed int o b et wee n t he a sse ss ee a n d the le nd er a nd su b mit te d b ef ore th e Ho n’ ble De lh i Hig h C our t f or f inal se tt le me nt. I t wa s f ur th er su b mi tte d t ha t prior to s uch a ct of co mpr o mis e, the le nde r h ad f ile d c o mpla in t da te d 0 5.0 5. 20 10 a ga in st I.T.As. No.3297 & 3536/Del/2016 5 the as ses se e bef o r e th e Re gi st rar of Co mpa ni es wh ich i mp li es a dee me d co nf ir mat i on of f ina nc es of t he le nd er in vo lv ed. It wa s th us con te nd ed t hat u nd er th e c ir cu ms ta nc e s, wh er e the mo ne y re ce ive d is vo uch ed b y c o mpl a int s f or it s no n- re tu rn co up le d with a c o mpr o mise in t he s ub se qu en t year , th e b on a fi de s of the f in anc e re ce i ved ca nn ot be q ue st io ned . I t w as s ub mi tt ed t ha t th e do cu me nt ary ev id enc es f il ed b y wa y of p ape r bo ok c le ar l y de mo nst ra te s t he act of adv an ci ng Rs .1. 40 cr ore b y t he l en der s t o th e ass es se e in th e f in anc ia l ye ar rel ev an t to A ss es s ment Yea r 20 07 - 08 i n qu est io n a nd f urt he r a mou nts in t he s ub seq ue nt a ss es s men t ye ar as p er t he c o lla bo ra ti on agr ee me nt . It w as con te nde d t hat t hes e s eq uen ce of eve nt s an d doc u men ta ti on c le a rl y pr ove s t hat th e on us p la ced up on t he a ss ess ee un der S ec ti on 68 s tan ds d ul y d is ch ar g ed in t he li ght of t he ju di cia l pro no un ce me nt s; C IT v s. Or is sa Co r po rat io n P . L td ., 15 9 IT R 7 8 (S C ); C IT v s. Mo d Cr ea ti on s PV t. Lt d., 3 54 I TR 28 2 ( Del hi H .C . ); CI T v s. N em i Ch an d K ot ha ri , 26 4 I T R 2 54 (Ga uh ar ti H.C. ); D CI T vs. R oh ini B ui ld er s, 25 6 I TR 3 60 ( Gu j. HC ); CI T vs . Re al Ti me Ma rke ti ng (P ) Lt d. , 221 CT R 7 16 (De l hi H C ); CI T v s. D wa rk ad his h Inv es tm en t Pvt . Lt d ., 33 0 IT R 29 8 (De l hi H C ). It w as th us su b mit ted in c on cl us io n t hat the CI T( A) mi sd i rec te d h i mself in l aw a nd on f acts in c onf i r min g the ac ti on of t he A sse ss in g Of fice r t o war ds su ch unt en ab le ad di ti on s op po se d to t he f a ct s o n re co rd. 6. Ad ver ti ng t o th e s eco nd i ss ue , ld . c ou nse l f or th e as s ess ee su b mitt ed tha t t he A ss es si ng Of f icer mad e a n add it io n of Rs .3 2,8 0, 66 9/ - t ow ard s a ll eg ed un ex p lai ne d a dv an ce rec eiv ed f r o m cus to me r. It was su b mitt ed th at the a mo u nt w as re ceive d f ro m var io us cu st o mer s pen di ng ex ec ut io n of agr ee me nt f or s ale of f lat. The CI T( A) s us tai n ed t he ad di ti on t o t he ex te nt of R s. 4,8 9,7 44 /- o ut of th e af ore sa id a mo un t wh ich i s no t j us tif ie d in the f act s an d the cir cu ms ta nc es of th e as se sse e. Th e ld . Cou ns el po int ed o ut t ha t th e I.T.As. No.3297 & 3536/Del/2016 6 Re ven ue ha s al so c hal le ng ed t he a ct io n of the CIT (A) f or an a mou nt of Rs. 12 ,9 2, 24 1/ - o ut of t he re mai ni ng rel ief gr an te d b y t he C IT (A ). In th e mate r, t he l d. co un se l su b mit te d tha t th e sale a gr ee men t wa s ult i mat el y e xe cut ed wi th all t he c us to mer s i n qu estio n. T he c op y of f lat bo ok in g agr ee me nt et c. w ere a d ver te d an d i t was poi nt ed o ut tha t t he a dv an ce r e cei ve d ag ai ns t t he s ale of f lat wa s i n t he o rd in ar y cou rs e of r eal es ta t e bu si ne ss an d i s b ack ed b y cl in chi ng doc u men ts in c or ro bor at io n. I t wa s t hu s su b mit ted th at t he CIT( A) w as no t jus tif i ed in de n yi n g t he re li ef to th e ext en t of Rs.4 ,8 9, 7 44/ - to th e ass es se e. B y th e s a me to ke n, it wa s c lai me d t ha t t he ap pea l of t he Re ven ue c ha ll en gi ng t he re li ef to th e ext en t of Rs.12 , 92, 24 1/ - is wit ho ut an y s o un d bas is . I t w as th us s ub mit te d t ha t G ro u nd no .3 of the R ev en ue ap pea l is in te gra ll y c on ne cte d t o cor resp on di ng Gr ou nd no. 3 of t he ap pe al of th e as ses se e. 7. As r eg ar ds Gr ou n d n o.1 of th e R e ven ue ’s ap pe al, th e ld . cou ns el f or t he a s ses se e su b mit te d t hat t he As ses sing Of f icer h ad ma de su ch ad di ti on on a cco un t of ‘o th er lia bi li ti es’ p a ya b le to ba nk s as sh ow n i n t he f i nan ci al st ate me nt of the as se ss ee on the g ro un d tha t su ch li ab ili t y was n ot c onf ir me d f ro m th e r es pe cti ve ba nk s. In thi s r eg ar d, th e l d. c ou ns el su b mit ted th at th e C IT( A) rig ht l y app re ci ate d th e f ac t t ha t it w as n ot a cas e of b an k ove rd raf t wh ere the b an k c ou ld ref l ect s uc h l ia bi lit y o f the as se ssee in i ts bo ok s an d conf i r m i t. I t wa s o nl y a ca se of bo ok ove rd raf t a s pe r th e asse ss ee ’s bo ok s w he re pa ym ent c heq ue s wer e iss ue d b y th e a ss esse e t o it s var io us cre di to rs , i.e ., v en do rs /s up pl ier s t ow ard s t he e nd of th e f inan ci al ye a r a lt h ou gh the re wa s not en ou gh ba nk ba la nce in s uch ban ks . As ex pl ai ne d b ef ore t he CI T( A ), suc h pa yme n t c h equ es w ere iss ue d to var io us cred it or s ag ai nst the p a yme nts outst an di ng i n ant ic ip ati on of e ns uin g re co ver ie s. Th e c he qu es is su ed w ere cl ea re d on t he su bs eq uen t dat es a s r ef lec te d in th e ba nk rec onc il ia ti on I.T.As. No.3297 & 3536/Del/2016 7 sta te me nt . T he cre d ito rs we re th us re d uce d o n a cc ount of iss ua nc e of che qu es b y w a y o f journ al e nt r y a n d lia bi li ti es b y w a y of b oo k ove rd raf t w er e cr eat ed . Th e L d. c ou nse l p oi nte d o u t th at s uc h pra ct ice s a re co m mo n a nd in vo gue in t he bu si ne ss worl d. It wa s con te nd ed t ha t th e che qu es a re i ss ue d wer e ei th er ulti ma t el y r ea li zed in t he s ub se que nt year o r s uch ent ri es sto od rev er se d ow n ing to n on rea li zat io n o r r e ma ini ng un se tt le d f or an y re as on . T he Ld. co un se l thu s s ub mi tt ed th at the ac ti on of the CI T( A) i n g rant in g rel ief o n thi s co un t is in con so na nce wit h ru di me nta r y p r inc ip le s of acc ou nt in g an d bu s ine ss p ra ct ice s. N o loss of Reve nu e h as ca us ed due t o s uc h j ou rn al e nt ri es wh ic h h as the ef f ect of r edu ct io n of cre di to rs f o r co rre s po ndi ng i nc rea se i n ‘o th er li abil iti es ’. 8. Ad ver ti ng t o G ro u nd N o. 2 of the ap pea l of the Reve nu e, ld . cou ns el s ub mi tte d tha t the R ev en ue h as as sai le d th e a ct ion of t he CI T( A) t ow ard s de let io n of add it io n of Rs. 2, 46, 88 0/- on acco un t of ces sa ti on of l ia bi li t y. I t wa s s ub mi tt ed th at C IT( A) w as ri gh t i n hol di ng th at Sec ti o n 41 (1 ) c an not be a ppl ie d s in ce s uc h l i abi li t y wa s in di sp ut e b ef or e t he Ci vi l Co ur t K a rna l f or p ar t perf o r ma nc e of con tr ac t. T he a sse s see c la i med r ig ht t o f orf eit wh ic h is u n der d is pu te f or w hi ch d ocu me n tar y e v ide nc es a re pla ce d b y wa y of pap er b oo k bef or e t he CIT (A ) as w el l a s Tr ib una l. Th e L d. Co unsel th us su b mitt ed t ha t g ri eva nc e rai se d b y wa y of Gr ou nd N o.2 i n th e rev en ue a ppe al i s a lso n ot j us tif ie d. 9. Ld. D R f or the R e ven ue re li ed up on the or de r of t he CI T( A) ins of ar as ap pea l o f the a ss es se e i s co nce rn ed . H owev er, in o rd er to cha ll en ge re li ef s gra nt ed b y t he C IT( A) . Th e L d. DR f or th e Re ven ue re li ed u po n t he pr oc es s of rea so ni ng a do p ted b y t he As ses si ng Of f ic er. 10. W e h av e ca ref u ll y c o ns id ere d t he riv al s ub mi ss io n s an d I.T.As. No.3297 & 3536/Del/2016 8 per us ed the as se ss me nt o rd er a s w ell as f irs t ap pe ll at e ord er . Th e mat te r ref er re d to a nd re li ed u po n ha s als o be en l oo ke d in to in t er ms of Ru le 18 of t he I nco me T ax (A pp el l ate Tr ib un al ) Ru les . W e n o w pro ce ed t o e xa mi ne va ri ou s is sue s ra is ed he re in. 11. Gro u nd N o.1 of th e ap pe al of t he a sse s see i s gener al i n na tur e. 12. Gro u nd No .2 co nc e rns ad di ti on of R s. 1.4 0 cro re re ce ive d f ro m Sh ri A sh ok Ku ma r Ver ma un de r Se ct i on 6 8 of the Ac t. I t is th e ca se of the a sse ss ee t hat th e a mo u nt w as r ec ei ve d i n p u rsu an ce of col la bo rat io n a gr ee me nt dat ed 21 .0 8. 2 00 8 t o p ur su e ce rt a in bu sin es s int er es t i n th e f or m of 3 5% sh are i n ‘ Har sh a K 3C M all Ci ne ma Kar na l’ . An a mou nt of R s. 1. 25 la kh s w er e c la i med t o ha ve be en rec ei ve d di re ct l y f ro m S hr i A sh ok Ver ma an d R s. 15 lac s w ere rec ei ve d f ro m hi s bro th er Shr i R ak esh Ku ma r o n be h alf of Shr i As ho k Ver ma . Th e a mou nt s we re st at ed to h ave b ee n re cei ve d b y wa y of f o rei gn i nw ard r e mitt an ce f ro m t he l en der w ho c lai ms t o be Bri ti sh N at io nal s and p er so ns of I ndi an o ri gi n. Th e f ina nci n g tra ns ac tio ns cu l mi nat ed in co mp la in t dat ed 05 .0 5. 2010 aga in st th e ass es se e b y th e le n der bef or e R O C (p lac ed a t p ag e no.6 1-6 4 of t he pap er b oo k) . Co p y of c onf ir ma to r y l ett er f ro m I CI CI Ba nk al on g wit h c op y of c he q ues is su ed b y Sh ri As ho k V er ma f rom h is NR I acc ou nt w er e pl ac ed f or p a yme nts ma de b y th e f ina n cie rs t o th e ass es se e. C op y of co mpr o mis e ag re e me nt da te d 15 .1 1.2 01 1 e nt er ed int o b y t he as se ss ee w it h t he le nd er f or se tt le me nt of out st an di ng due as su b mit ted b ef ore t he Ho n’ bl e Del hi Hi gh Co urt was ref er re d to es ta bl is h t he g en uin en es s of th e i mp ug ned a mo un t. 12. 1 In the l ig ht of th e co ge nt do cu me nt a r y evi de nces , t he bo na fid es of th e lo an /d epo si ts tr an sac ti on in q ue st io n w it h Sh ri A sh o k Ku ma r Ver ma , in o ur vi ew , is b e yo n d an y i ot a of doubt . The CIT (A ) has g ro ss l y ig no re d t he se se lf ex pl an ato r y d oc u ments to co me to a I.T.As. No.3297 & 3536/Del/2016 9 con cl us io n a dv er se to th e a ss es see . T h e ac ti on of th e CIT (A) ca nn ot be j us tif ie d i n v ie w of f or mid ab le doc u men ta r y ev ide nce s n ot ed abo ve . Th e co nf ir mat io n of mo ne y lent i s se lf evi den t f ro m co mpr o mis e ca rr ie d ou t. T he a cti on o f the CI T( A) i s th u s set asi de and t he A sse ss in g Of f icer is d ire ct ed t o c an cel t he ad di ti o ns so mad e un der S ec ti on 6 8 of th e Ac t. 12. 3 Gro u nd N o.2 of th e ap pe al of t he a sse s see i s all ow ed . 13. Gro u nd No .3 of t he ap pe al of t he as se s see c on cer ns a dd iti on of Rs .4, 89 ,7 44 /- a s sus ta in ed b y t he CI T( A) t ow ar ds u nex pl ai ne d adv an ce f ro m cu s to mer . Si mi la rl y, the R eve nu e ha s par al le ll y cha ll en ge d t he del eti on of ad di ti on t o t he e xt en t of R s. 12, 92 ,2 41 /- on a cc ou nt of si m ila r ad va nc es . Or i gin al l y, ag gr eg at e add it io n of Rs .3 2,8 0, 66 9/ - w er e ma de b y t he As s ess in g Of f ice r tow ard s r ece ip t of adva nc es f ro m vari ou s cu st o mer s/ f l at b u ye rs a llegi ng s uc h adv an ce s t o ha ve re mai ne d une xp la i ned . As al le ge d by A ss es si ng Of f icer , no ti ce un d er S ec ti on 1 31 of t he A ct we re iss ue d to c ert ai n cus to me rs /b u ye r s o f the f lat whi ch ei t her ret ur ne d u ns erv ed o r re pl y was not r ec ei ve d b y t he A sse ss in g Of f icer re su lt in g i n add it io ns to war ds u ne xp la ine d a dv an ce re ce iv ed b y th e as se ssee. 13. 1 The C IT (A ) i n f ir st ap pea l su sta in ed t he ad ditio n to th e e xte nt of Rs. 4, 89 ,7 44 /- a nd d el et ed t he re st. In its cr os s a ppe al , t he Re ven ue ha s al so cha ll en ged th e p art de let io n t o the ex te nt of Rs .1 2,9 2, 24 1/ - ou t of adva nc es r ec eip t s f ro m v ari ous c ust o mers . T he tab ul at ed pa rt y- w i s e p os it io n is re pr od uce d he re un der : S.No Name of buyer Amount of addition made by AO (Rs.) Amount of addition deleted by CIT(A) (Rs.) Amount of addition sustained by CIT(A) (Rs.) Assessee’s appeal before ITAT Revenue’s appeal before ITAT (i) Jagdish Kumar 15,74,983 15,74,983 — - 5,51,243 I.T.As. No.3297 & 3536/Del/2016 10 (ii) Shahid 7,86,783 7,05,039 81,744 81,744 - (iii) Ashutosh Awashti 1,20,000 — 1,20,000 1,20,000 — (iv) Sandeep Chaudhry 7,86,903 7,86,903 — — (v) Avanish Kumar 7,41,000 7,41,000 — — 7,41,000 (Vi) Santosh Kr. Chugh 2,00,000 2,00,000 — — - (vii) Mohan Lal 4,00,000 2,00,000 2,00,000 2,00,000 — (viii) Rajiv 88,000 — 88,000 — Total 32,80,669 4,89,744 4,89,744 12,92,2414 13. 2 The a ss es se e has su b mitt ed p ar t y- wi se ex pl an ati on t o war ds adv an ce s re ce iv ed f ro m d if f eren t c us t o mers , w hi ch is no ted he rei n f or a pp rec ia ti on of f acts i n p ro pe r per s pec ti ve ; (a) a dd it io n of R s.8 1, 74 4/ - su st ai ne d b y t he CIT (A ) was o n acc ou nt of rec ei pt f ro m a c us to me r na med Mr. Sha hi d. I n th is reg ar d, it w as su b mit te d th at to ta l a mo un t of Rs .7 ,8 6, 78 3/- w as rec ei ve d f ro m Mr. Sh ahi d o ut of w hic h Rs .7 ,0 5, 83 9/- wa s rec ei ve d in t he ear li er ye a r a nd r e mai ni ng Rs .8 1 ,74 4/ - i n q ue sti on r ela te s t o cur re nt f i na nci al year . F la t b oo ki ng agr ee me nt da ted 1 0.0 3. 20 06 evi de nc es t he so urc e be in g mone y r ece ive d a gai ns t flat bo oki ng to the a ss es see . Th e CI T( A) ha s wr on gl y p ro ce ede d on the f act ual l y inc or re ct p re mis e t hat t he a mo u nt h as not b ee n co nte st e d wh ic h has b ee n co nt ro ve r ted b y th e as se ss e e. In t he se f act s, wh ere t he pa yme nt r ec ei ve d i n ear li er ye ar has b een a cc ep te d, th e a dva nc e of Rs .8 1,7 44 /- rec ei v ed d ur in g th e ye ar can no t be bl e mis hed . T he add it io n of R s. 81, 7 44/ - th us a ppe ar s to be w ho ll y un te nab l e. (b) an a mo un t of Rs .1. 20 la kh s is st ate d t o hav e bee n rec ei ve d f ro m cu st o mer M r. A sh uto sh Aw ast hi w hic h is s up po rte d b y f l at bo oki ng ag re e men t dat ed 05 .0 4. 20 06 . In t he wa ke of th ese f a ct s, add it io ns s us ta in ed f or the af or es ai d s u m of Rs .1 .20 la kh s b y t he CI T( A) is n ot ju st if ied . (c) an ot her su m of Rs. 2 l ak hs wa s r e cei ve d f ro m o ne M r. M oh an Lal . I n t hi s r ega rd , it i s c la i med th at af ore sa id amou nt h as b ee n I.T.As. No.3297 & 3536/Del/2016 11 rec ei ve d aga in st f lat b oo ki ng a gr ee me nt da te d 03 .0 9. 20 06 i n Har sh a C it y Ma ll . In t he l ig ht of s uc h evi de nce , t he a cti on of th e CI T( A) is r eve rs ed . (d) a n a mo un t of Rs .8 8,0 00 /- is c lai me d t o h av e been re cei ve d f ro m cu st o mer M r. Ra je ev K u mar . Fl at bo ok in g ag ree ment d at ed 09. 10 .2 00 6 su pp ort s t he re cei pt of a dv anc e a ga in st bo ok i ng of f lat in H ar sha Ci t y M a ll. I n t he ci rc u mst anc es , th e af ores ai d a mou nt can no t be tr ea te d a s u ne xp la in ed. 13. 3 In v ie w of t he f act ual p os iti on n ot ed abo ve , t he ac ti on o f the CI T( A) f or s ust ai ni ng t he a dd iti on t o the e xt en t of Rs. 4, 89, 74 4/ - in res pe ct of a bo ve n ote d cu st o mer s i s wh oll y u n ju st ified and l ia ble t o be re ve rse d. 13. 4 Gro u nd N o.3 of th e as se ss ee ’s ap pe al i s a ll ow ed . 14. The R ev en ue ha s a lso c hal le ng ed th e rev er sa l of a dd it io n o n acc ou nt of f lat cu st o mers Mr . J ag di sh Ku ma r R s.5 ,5 1, 24 3 /- a nd Mr . Av ina sh K u mar Rs .7, 41 ,0 00 /- ag gre ga tin g t o Rs. 12 ,9 2, 24 1/- as pe r Gro u nd N o.3 of it s app ea l. 14. 1 The CI T( A) h as de let ed t he ad dit io n in r es pec t of th es e two par ti es f or th e r ea s on s n ot ed b el ow . “ F i n d i n g : - I h a v e c o n s i d e r e d t h e a s s e s s m e n t o r d e r a s w e l l a s t h e s u b m i s s i o n o f t h e L d A R . T h e L d A R s u b m i t t e d t h a t du r i n g t h e y e a r u n d e r c o n s i d e r a t i o n o f R s . 5 , 5 1 , 2 4 1 / - w a s r e c e i v e d fr o m S h J a g d i s h . T h e L d A R h a s f i l e d t h e c o p y o f a g r e e m e n t b e t w e e n J a g d i s h K u m a r a n d t h e a p p e l l a n t , t h e a p p l i c a t i o n f or m f i l l e d b y J a g d i s h K u m a r , t h e c o p y o f P A N c a r d o f S h J a g d i s h Ku m a r a n d a l s o t h e l e d g e r a c c o u n t i n a p p e l l a n t ’ s c o m p a n y . O u t o f R s . 1 5 , 7 4 , 9 8 3 / - , R s . 1 0 , 2 3 , 7 4 0 / - w a s o p e n i n g b a l a n c e t ha t R s . 5 , 5 1 , 2 4 1 / - h a s b e e n r e c e i v e d d u r i n g t h e p r e v i o u s y e a r u n d e r I.T.As. No.3297 & 3536/Del/2016 12 c o n s i d e r a t i o n . H o w e v e r c o n s i d e r i n g t h e e v i d e n c e f i le d b e f o r e m e I a m o f t h e o p i n i o n t h a t t h e i d e n t i t y , t h e c r e d i t w o r th i n e s s o f l e n d e r a n d g e n u i n e n e s s o f t h e t r a n s a c t i o n h a s b e e n p r o v e d t h e r e f o r e n o a d d i t i o n i s c a l l e d f o r . x x x x x x x x x x A n a m o u n t o f R s . 7 , 4 1 , 0 0 0 / - h a s b e e n r e c e i v e d f r o m Sh A v i n a s h K u m a r f o r S h o p N o . 1 7 4 a t H a r s h a c i t y M a l l a t I n d r a pu r a m . T h e L d . A R h a s a l s o s u b m i t t e d t h e c o p y o f a g r e e m e n t b e tw e e n S h A v i n a s h K u m a r a n d M / s H a r s h a A s s o c i a t e d L t d . t h e l ed g e r a c c o u n t o f S h A v i n a s h K u m a r i n t h e b o o k s o f a p p e l l a n t c o m p an y i s a l s o f u r n i s h e d a n d i t i s s e e n t h a t a l l t h e p a y m e n t h a v e b e e n r e c e i v e d b y c h e q u e . C o n s i d e r i n g a l l t h e e v i d e n c e s t h e a d d i t i o n o n a / c a d v a n c e r e c e i v e d f r o m S h A v i n a s h K u m a r i s d e l e t e d . ” 14. 2 In th e li gh t of the agr ee me nt w it h th e abov e no te d pa rt ie s f or pro po se d p ur cha se of f lat, t he c on si de rat io n f or r ece ip t o f busi ne ss adv an ce st an ds pr ove d. T he a ct io n of the C IT( A) t hus ca nn ot be f ault ed . 14. 3 Gro u nd N o.3 of th e Re ve nu e’ s ap pea l i s t hu s dis mis se d. 15. W e n ow a dv ert t o Gro u nd N o. 1 of the app ea l of the R e ven ue wh ich co nce rn s re v ers al of ad di ti on o f Rs.4 ,4 4,1 2, 98 9/ - on a cco un t of ‘ot he r l ia bi lit ie s ’. The a sse ss ee ha s de cla re d cer tai n l i abi li ti es in res pe ct of v ari ou s b ank s, viz . ( i) B an k of Bar od a Rs .6 7, 43 ,54 9/ -; ( ii ) Ind ia n O ve rs eas B ank Rs .4 ,9 0, 07 1/ -; (ii i) Pu nja b Nat i ona l B an k Rs .3, 71 ,7 9, 36 9/ -. I t is th e c ase of t he a ss es se e that a lth ou gh th e lia bi li t y wa s ref l ec ted i n th e n a me of abo ve men ti on ed b ank s at t he end of t he ye a r, su ch lia bi li tie s we re sh ow n o ut st an din g mer el y o n acc ou nt of bo ok o ver dr af ts, i .e ., o n acc ou nt of is sua nc e of ch eq ue f ro m t he se ba nk s to v ar io us cre di tor s a ga in st pa ym ent du e i n ant ic ip ati on of f ut ure a nt ici pa te d r ec ove ri es , t he d eta il s of wh ic h I.T.As. No.3297 & 3536/Del/2016 13 wer e gi ve n t o th e A sse ss in g Of f icer . 15. 1 The a sse ss ee th us c ont en ds th at th e l ia bil it y s ho wn a gai ns t t he ban ks ar e n ot ac tu al or r ea l l ia bi lit i es bu t o n a ccou nt of jo ur nal ent r y pa ss ed b y i ncr ea si ng th e b oo k o ver dr af t a nd redu ci ng th e cor re sp on di ng c re d ito rs l ia bi li t y. Th e Ass es se e th us c o nte nd s t hat the A ss es si ng Of f ice r has mad e a d dit io ns i n r es pe ct of ab ov e lia bi li t y o n t he g ro un d th at r es pe cti ve ban ks h av e n ot c o nf ir med the abo ve st at ed li ab il i tie s o wi ng t o w ro n g a pp rec ia ti on of t hes e f ac ts . The a ss es se e c on te nd s t ha t th e l ia bi li tie s be in g book ov erd raf t an d not t he re al l ia bil it y, co ul d no t hav e b een c onf ir me d b y t he ba nk . 15. 2 The CI T( A) in th e f irst ap pea l w hi le gra nt in g t he r el ie f has dis cu ss ed t he is su e as un de r: F i n d i n g : - D u ri n g t h e a p p e l l a t e p ro c e e d i n g s t h e L d AR s t a t e d t h a t t h e s e l i a b i l i t i e s a r e o n a / c o f b a n k o v e rd r a f t o n a/ c o f i ss u a n c e o f c h e q u e s t o v a ri o u s p a rt i e s f o r p u r c h a se o f c o n st ru ct i o n m a t e ri a l , a g a i n st a n t i c i p a t e d re c o v e r i e s i n t h e E s c r o w A c c o u nt f r o m b u y e r s o f p r o p e rt i e s. T h e A R st a t e d t h a t t h e A s se s si n g O f f i c er d i d n o t p r o v i d e h i m t h e a d e q u a t e o p p o rt u n i t y , a s t h e q u e ry p e r t a i n in g t o t h e i s su e wa s ra i s e d j u s t o n e we e k b e f o re t h e p a s si n g o f t h e o r d e r. T h e L d A R su b m i t t e d t h e b a n k r e c o n c i l i a t i o n st a t e m e n t s i n t h e p a p e r b o o k p a g e s 1 7 t o 1 9 . T h e se b e i n g t h e a d d i t i o n a l e v i d e n c e w e r e s e n t t o t h e A s se s si n g O f f i c e r f o r h i s c o m m e n t s o n a d m i s si b i l i t y a s w e l l a s m e ri t v i d e l e t t e r N o . D E L / CI T (A )- X X V I I / R - R / A - P No . 4 4 5 / 2 0 1 2- 1 3 / 4 2 d a t e d M a y , 2 0 1 2 t h e c o p y o f wh i c h w a s d e l i v e re d t o t h e o ff i c e o f A d d l . CI T , R a n g e - 1 2 , Ne w D e l h i o n 2 1 / 0 5 / 2 0 1 2 , a p a rt f ro m A ss e ssi n g O f f i c e r , A CI T , Ci rc l e 1 2 (1 ) . T h e A O w a s a s k e d t o su b m i t h i s r e p o rt , t h e c o n t e n t s o f t h e l e t t e r s e n t t o A O a r e re p ro d u c e d b el o w: - “ R e t u r n d e c l a ri n g a n i n c o m e o f R s. 2 8 , 7 1 , 0 4 7 / - wa s f i l e d . I n t h e a s s e ss m e n t o rd e r, t h e i n c o m e o f t h e a p p e l l a n t wa s de t e r m i n e d a t I.T.As. No.3297 & 3536/Del/2016 14 R s. 7 , 1 1 , 8 0 , 3 1 3 / - b y m a k i n g v a ri o u s a d d i t i o n s . Wi t h r e g a r d t o t h e a d d i t i o n s m a d e , t h e a p p e l l a n t h a s f i l e d c e rt a i n e v id e n c e s wh i c h we r e n o t t i l e d a t t h e t i m e o f a s se s s m e n t a s u n d e r: - i . Wi t h r e g a rd t o t h e a d d i t i o n o f R s. 4 , 4 4 , 1 2 , 9 8 9 / -, i t h a s b e e n su b m i t t e d t h a t t h e s e l i a b i l i t i e s we r e o n a c c o un t o f b o o k o v e r d ra f t s o n a c c o u n t o f c h e q u e s i s s u e d t o v a ri o u s p a rt i e s. Co n f i r m a t i o n s f ro m su c h p a r t i e s h a v e b e e n f i l e d . i i . Wi t h re g a r d t o t h e a d d i t i o n o f R s . 1 3 , 4 6 , 8 8 0 / -, i t h a s b e e n su b m i t t e d t h a t n o d e t a i l s w e re a s k e d f o r b y t h e A . O. i n r e sp e c t o f t h i s l i a b i l i t y . A c o p y o f a g re e m e n t w i t h M / s T e c h so f t G l o b a l L t d a n d c o p y o f t h e j u d g m e n t o f Ci v i l C o u rt , Ka rn a l h a s b e e n f i l e d i n su p p o r t o f t h e a p p e l l a n t ' s c o n t e n t i o n . i i i . W i t h r e g a rd t o t h e a d d i t i o n o f R s . 1 . 4 0 C ro r e s, a c o p y o f a g re e m e n t wi t h S h . A sh o k K u m a r a n d c o p y o f a c c o u n t wi t h S h . A sh o k K u m a r a n d h i s b ro t h e r S h . R a k e sh K u m a r f o r h av i n g i n v e st e d R s. 1 . 2 5 C ro r e s a n d R s. 1 5 . 0 0 L a c s r e sp e c ti v e l y h a s b e e n f i l e d . A l s o S h . A sh o k K u m a r V e r m a o n 2 . 5 . 2 0 1 2 f i l e d a l e t t e r a t t h e R e c e i p t Co u n t e r, c o p y o f wh i c h h a v e be e n f i l e d b e f o re t h e D CI T , C i rc l e - 1 2 (1 ) i n w h i c h h e h a s f i l e d c o n f i r m a t i o n f o r h a v i n g i n v e st e d v a ri o u s a m o u n t wi t h t h e a p p e l l an t . i v . S u b m i s si o n s a n d d o c u m e n t a r y e v i d e n c e h a s b e e n fi l e d wi t h re g a r d t o t h e b a l a n c e a d d i t i o n s. A c o p y o f t h e a p p e l l a n t ’ s s u b m i s si o n s a l o n g wi t h t he d o c u m e n t a r y e v i d e n c e f i l e d b y h i m i s e n c l o se d h e r e wi t h f o r y o u r c o m m e n t s a n d y o u a re r e q u e st e d t o f u rn i s h y o u r c o m me n t s o n t h e sa m e wi t h i n 1 5 d a y s o f t h e r e c e i p t o f t h i s l e t t e r. A c o p y o f t h e a p p e l l a n t ’ s su b m i s si o n s a l o n g wi t h t h e d o c u m e n t a r y e v i d e n c e f i l e d b y h i m i s e n c l o s e d h e r e w i t h f o r y o u r c o m m e n t s I.T.As. No.3297 & 3536/Del/2016 15 a n d y o u a r e r e q u e st e d t o f u r n i sh y o u r c o m m e n t s o n th e sa m e wi t h i n 1 5 d a y s o f t h e re c e i p t o f t h i s l e t t e r . " T h e r e a f t e r m a n y l e t t e r s we r e s e n t t o t h e A s s e ss i n g O f f i c e r a sk i n g h i m t o su b m i t h i s re p o rt . H o we v e r u n t i l t h e p a s si n g o f t h i s o r d e r n o re p o rt h a s b e e n su b m i t t e d b y t h e A s s e s si n g O f f i c e r, I a m t h e re f o r e a d m i t t i n g t h e a d d i t i o n a l e v i d e n c e a n d d e c i d i n g a c c or d i n g l y . A s f a r a s t h e a d d i t i o n o n a / c o f o t h e r l i a b i l i t i e s i s c o n c e r n e d t h e L d A R h a s f u rn i s h e d t h e c o n f i rm a t i o n o f I n d i a n O v e r s e as B a n k . W i t h re s p e c t t o P u n j a b Na t i o n a l B a n k i t i s su b m i t t e d b y t h e L d A R v i d e l e t t e r d a t e d 1 6 / 0 3 / 2 0 1 6 t h a t t h e se a re l i a b i l i t i e s o f E s c ro w A c c o u n t o f P u n j a b N a t i o n a l B a n k . I t i s su b m i t t e d t h a t d u e to re c e s s i o n i n m a rk e t , i n v e st o r h a s n o t g i v e n m o n e y t o t h e c o m p a n y t h a t i s w h y p r o j e c t c o u l d n o t b e c o m p l e t e d a n d h e l d u p a n d c o m pa n y h a s re t u rn e d m a t e ri a l t o t h e r e sp e c t i v e s u p p l i e r a n d s et t l e d t h e a c c o u n t b y r e t u r n i n g t h e m a t e ri a l t o t h e m a n d r e c e i v e d t h e c h e q u e s b a c k . Co p y o f r e sp e c t i v e a c c o u n t s a r e e n c l o s e d . I t wa s f urt h e r s u b m i t t e d b y t h e A R t h a t e v e n i f t h e a c c o u n t i s n o t s e t t l e d wi t h t h e p a r t i e s w i t h re s p e c t t o P NB E s c r o w a c c o u n t t h e s a m e wo u l d st i l l r e m a i n t h e l i a b i l i t y o f t h e a p p e l l a n t c o m p a n y t o w a rd s b a n k f o r t h e A Y 2 0 0 7 - 0 8 . W h e t h e r t h e a c c o u n t i s se t t l e d o r n o t , i s n o t g o i n g t o c h a n g e o f n a t u r e o f t r a n sa c t i o n . T h e c o n t e n t i o n o f t h e L d . A R i s a c c e p t e d a s t h e a p p e l l a n t c o m p a n y h a s m a d e p a y m e n t wh i c h a re rev e r se d i n t h e su b se q u e n t y e a r. T h e sa m e c a n n o t b e t r e a t e d a s i n c om e o f a n y y e a r. Wi t h r e sp e c t t o B a n k o f B a r o d a t h e A R st a t e d t h a t th e b a n k w a s n o t c o o p e r a t i n g a n d si n c e t h e l i a b i l i t y i s g e n u i n e i t ma y b e c o n f i r m e d d i re c t l y f ro m t h e b a n k . I t w a s a l so s t a t e d b y t h e Ld A R t h a t i n re s p e c t o f B a n k o f B a r o d a t h e c h e q u e s h a v e b e e n i ssu e d t o v a ri o u s p a rt i e s i n t h e m o n t h o f M a rc h , t h e e a rl i e st p a y m e n t m a d e o n 7 t h M a r c h , 2 0 0 7 a n d t h e l a t e st b e i n g o n 3 0 / 0 3 / 2 0 0 7 . Co nsi d e ri n g a l l t h e f a c t s a n d c i rc u m s t a n c e s o f t h e c a s e a n d t h e m a t e ri al b r o u g h t b e f o re I.T.As. No.3297 & 3536/Del/2016 16 m e a n d c o n si d e ri n g t h e f a c t t h a t t h e l i a b i l i t y h a s a ri se n o n a / c o f b o o k / o v e rd ra f t p r o v i d e d b y t h e b a n k a n d a l so c o n si de ri n g t h e f a c t t h a t t h e wh o l e t r a n sa c t i o n s h a v e l e f t i t s f o o t p ri n ts i n t h e b a n k i n g c h a n n e l wh i c h c a n n o t b e m a n i p u l a t e d . I a m t h e r e f o r e, o f t h e v i e w t h a t a d d i t i o n o f R s. 4 , 7 1 , 5 2 , 0 1 3 / - o n a / c o f o t h e r li a b i l i t i e s a re n o t wa r ra n t e d a n d t h e s a m e i s d e l e t e d . ” 15. 3 The R ev en ue ha s c hal le ng ed th e a ct io n of CIT (A) in re v ers al of add iti on ma de b y t h e As se ss in g Of f ice r on th e basi s of unv er if ied add it io na l ev id en ce s pl ace d b ef ore th e CI T( A) . We ha v e ex a min ed the i ss ue . As p er t he st at e men t of f ac ts bef o re th e CI T( A), i t is t he cas e of th e as se ss e e th at a dd it io n in thi s r ega rd wa s made b y t he As ses si ng Of f icer wit ho ut g iv in g suf f icie nt o pp or tun it y. T he conf i r mat io n f ro m corr es po nd in g cre dit or s we re n ot d e ma nde d b y the A ss es si ng Of f icer . The C IT (A ) i n t he f i rs t a pp ea l as ke d f or re man d re po rt o n t he is su e b ut ad mi tt ed th e ad di ti on al e vid en ce s on the g ro un d th at t he Ass es si ng Of f ice r has f ai le d to r es po nd t o su ch inq ui r y b y w a y of re man d pr oc ee din gs o n th e i ss ue. T he C IT (A ) eve nt ua ll y de cid ed the i ss ue i n f avo ur of the a ss esse e base d o n su b mis sio ns mad e o n b eh alf of th e as se sse e. 16. On i nq ui r y f ro m the Be nc h, t he ass es se e f ile d cer ta in rec on ci lia ti on s tat e me nt f or th e af o res ai d ba nk s s ho w ing a ct ual dis ch ar ge of th e lia bi li tie s. O n p ag e n o. 34 of th e p ape r b oo k, rec on ci lia ti on s ta te me nt of ‘In di an O ver se as B an k’ s ho ws t hat t he out st an di ng l ia bi lit y of R s. 6, 76, 70 7/ - to war ds v ar io us c r edi to rs h as bee n di sch ar ge d b e twe en 0 3. 04. 20 07 t o 1 9. 04 .2 00 7. In t he li ght of pa yme nt sh ow n t o hav e b ee n ma de , t he e xp la nat io n of t he a ss es see in re sp ect of ou ts tan di ng t ow ar ds I ndi an O ve rs ea s Bank i s th us con si de re d sat isf a ct or y. 16. 1 The ac ti on of the CI T( A) i n r ev er sal of th e a ddi ti o n of I.T.As. No.3297 & 3536/Del/2016 17 Rs .4, 90 ,0 71 /- l in ke d t o In di an O ver se a s Ban k is t hus e n do rse d. 16. 2 On pe ru sa l of t he r eco nc il iat io n st at e me nt of ‘ Ba nk of B aro da ’ a mou nti ng to R s. 67 ,43 ,5 49 /- pl ace d a t pag e n o. 39 of th e p ape r b oo k, it i s no tic ed th at i t i s n ot sh ow n a s to ho w t he liab ili t y h as be en dis ch ar ge d b y pa yme nt o r r ev ers al of ent r y in c re dito rs acc ou nt . N o conf i r mat io n of c red it or s is pl ace d eit her . T he date of actu al pa yme nt th ro ug h b ank in g c ha nn el i s not ref le ct ed . Si mi lar is t he cas e in re spe ct o f liabi li ti es l in ke d to Pu nja b N ati ona l B an k a mou nti ng to R s. 3 ,71 ,7 9, 36 9/ -. Th e rec on ci lia ti on st at e me nt doe s not sh ow t he d ate of disc ha rg e of lia bil it y in a n y man n er. I t wa s cur so ri l y cl ai me d tha t th e mat er ial r ece iv ed we re retu r ned t o the cre di to rs in di sc h arg e of lia bi li ti es . H ow ev er, n o e vid en ce is ava il ab le on r ec or d to j us tif y th e na rra tiv es s o made . 16. 3 In t he se f a ct ual ba ckd ro p, th e C IT (A ), i n o ur vi ew , h a s n ot exa mi ne d th e i ss ue in r ig ht pe rs pe ct i ve. T he C IT (A ) h a s f ai le d t o det er mi ne th e b on a fid es of th e li ab il iti es an d h as hu rri edl y r el ie d up on th e nar ra ti ve can va ss ed o n b eh al f of the a sse ss ee a nd th at to o, wit ho ut wa it in g f or an y ve rif ic at io n re por t of th e A ss es si ng Of f ic er. The b an k rec on ci li ati on s tat e men t cl a i me d to h av e bee n ref err ed b y the CI T( A) do es n ot pro ve st an d of t he a ss es se e t owar d s d isc ha rg e of lia bi li tie s or bo n a f ide of ou ts ta nd in g li ab il ity i n a n y m ann er . W e are th us un ab le to see a n y ju stif i ca t ion i n t he reaso ni ng of th e CI T( A) wh ic h i s co ntr ar y t o th e f ac tua l p os it io n o n rec or d. It is th e ad mit te d po si ti on t hat no d oc u men ts wer e f ile d bef ore t he A ss es si ng Of f icer . Th e do cu m ent s f ile d b ef ore t h e CI T( A) n ei th er s up por ts the cla i m of ass es see nor u n ver if ie d b y t h e A sse ss in g Of f icer . Th e CI T( A) hi ms elf h a s o pt ed to mak e n o i nd ep en de nt in qu ir y a nd ha s mec ha ni ca ll y ac ce p ted th e e xpl an at io n of f ered b y t he as se sse e w hi ch doe s no t ap pe ar to be b ac ke d b y a n y so u nd ba si s. T he r ef ore , the I.T.As. No.3297 & 3536/Del/2016 18 act io n of the CI T( A) f or r ev ers al of add it io n in rel at io n to Ba nk of Bar od a Rs .6 7,4 3 ,54 9/ - a nd P u nja b Nat io na l Ba nk of Rs .3, 71 ,7 9, 36 9/ - i s be ref t of a n y s ou n d f ac tu al ba si s. T h e A ss es se e has f ai le d to dis cha rg e th e on us wh ich la y up on i t to of f er sat isf a cto r y e xp lan ati on o n i nf la ted B ank l ia bil it y. He nc e, the a cti on of the A ss es si ng Of f icer i s re st ore d t o the e xt en t of Rs .4, 3 9,2 2, 91 8/ - and t he ac ti on of C IT( A) i s set a si de . 16. 4 Gro u nd N o.1 of th e Re ve nu e’ s ap pea l i s t hu s allo we d i n p art . 17. Gro u nd No .2 of t he Re ve nu e’ s a pp e al co nc ern s addi ti on of Rs .2, 46 ,8 80 /- on t h e ce ssa ti on of lia bi lit y. The outs ta nd in g li ab ili t y, ho we ver , i s c la i med t o be di sp ute d b y th e a ss es see and pe nd in g bef or e th e Co ur t. A s e merg es f ro m re c ord , th e as se ss ee e nte re d in to agr ee me nt wi th T ec hs of t Gl ob al Pv t. L td. an d re ce ived so me a mo un t aga in st it . A c ivi l sui t wa s f ile d b y M/ s. Te ch sof t Gl ob al Pv t. Lt d. f or re co ver y of a dv anc e p ai d as to ke n mo ne y. T he CIT( A ) ha s d ea lt wit h th e is su e a s un der : “ F i n d i n g s: - T h e L d A R su b m i t t e d t h a t t h e a p p e l l a n t wa s g i v e n a n a d v a n c e , a s t o k e n m o n e y o f R s. 1 1 l a c s f o r p u r c h a s e o f e n t i re 2 n d a n d 3 r d f l o o r a l o n g w i t h ro o f ri g h t i n M / s H a r sh a M al l , f o r a c o n s i d e r a t i o n o f R s . 4 , 7 5 , 0 0 , 0 0 0 / - b y S h H a r i sh A ro ra , C h a i r m a n a n d M a n a g i n g D i r e c t o r o f M / s T e c h s o f t G l o b a l P v t L td , 1 4 7 , G a u t a m Na g a r, N e w D e l h i , o n 1 8 / 0 9 / 2 0 0 5 b y c h e q u e , wh i c h wa s e n c a sh e d b y t h e a p p e l l a n t o n 2 0 / 0 9 / 2 0 0 5 . T h e r e s t of t h e p a y m e n t wa s t o b e m a d e i n t h e f o l l o wi n g m a n n e r : - i ) 2 0 % o f t h e t o t a l sa l e c o n s i d e r a t i o n o n s i g n i n g of a g r e e m e n t . i i ) 2 0 % a f t e r o n e m o n t h o f si g n i n g o f a g r e e m e n t i i i ) 3 0 % a t t h e t i m e o f p o s se s si o n i n t h e m o n t h o f D e c e m b e r , 2 0 0 5 I.T.As. No.3297 & 3536/Del/2016 19 i v ) 3 0 % a t t h e t i m e o f o p e n i n g o f c i n e m a i . e . i n A pri l , 2 0 0 6 . A f t e r wa r d s so m e d i s p u t e a ro s e b e t we e n t h e a p p e l l a n t a n d M / s T e c h so f t G l o b a l P v t L t d . I t i s s t a t e d t h a t M / s T e c hso f t G l o b a l P v t L t d f i l e d a c i v i l su i t , a g a i n s t t h e a p p e l l a n t t o p erf o r m i t s p a rt o f t h e c o n t ra c t i . e . h a n d i n g o v e r t h e p o s se s si o n o f t he p ro p e r t y , a s p e r t h e c o n t r a c t . I t i s c o n t e n d e d b y t h e L d A R , t h at M / s T e c h so f t G l o b a l P v t L t d f a i l e d t o p e rf o r m i t s p a rt o f t h e c on t r a c t a n d d i d n o t p a y t h e m o n e y t o t h e a p p e l l a n t , a s p e r t h e t e r m s a nd c o n d i t i o n s p r o v i d e d i n t h e c o n t r a c t . H o w e v e r, si n c e t h e d i sp u te w a s p e n d i n g i n a c o u rt o f l a w t h e p a y m e n t o f R s . 1 1 l a c s, r e c e i ve d f r o m M / s T e c h so f t G l o b a l P v t L t d wa s b e i n g re f l e c t e d a s l i a bi l i t y i n t h e b a l a n c e s h e e t o f t h e a p p e l l a n t . I n t h e l a st , i t wa s c o n t e n d e d b y t h e L d A R t h a t t h e c i v i l su i t f i l e d b y M / s T e c h so f t G l o b a l P v t L t d f o r r e c o v e r y o f t h e a d v a n c e o f R s. 1 1 l a c s, a s t o k e n m o n e y , g i v e n t o t h e a p p e l l a n t wa s d e c i d e d i n f a v o u r o f t h e a p p e l l a n t b y t h e c o u rt d e c r e e d a t e d 16 / 0 8 / 2 0 1 1 . T h e a p p e l l a n t e a rn e d ri g h t t o f o rf e i t t h e a m o u n t . S o t he l i a b i l i t y c e a se d t o e x i st i n t h e f i n a n c i a l y e a r 2 0 1 1 - 1 2 a n d t h e s a m e i s a s se s sa b l e a s i n c o m e i n t h e A Y 2 0 1 2 - 1 3 . T h i s i m p l i e s, t h a t t h e l ia b i l i t y wa s v e r y m u c h i n e x i s t e n c e i n t h e A Y 2 0 0 7 - 0 8 w h i c h i s b e f o re m e , t h e re f o r e sa m e c a n n o t b e a s s e s s e d i n t h i s y e a r . Co n se q u e n t l y t h e a d d i t i o n o f R s. 1 3 , 4 6 , 8 8 0 / - o n a / c o f c e s sa t i o n o f l i a b i l i t i e s u / s 4 1 (1 ) i s d e l e t e d . 18. In t he c ou rs e of hea ri ng , th e l d. c ou nse l f or the as s ess ee con te nd s t hat ag ai n st t he r ev er sa l of a ddi ti on of Rs .1 3,4 6 ,88 0/ -, the Re ven ue h as c ha ll eng ed t he a dd it io n of Rs. 2, 46, 88 0/- onl y an d acc ep te d th e re st of the del et io n. T he Re ven ue co uld no t pro vi de an y jus tif i cat io n on n at ure of di sp ute t o t he ex te nt of R s. 2, 4 6,8 80 /- a nd ho w t hi s f igu re ha s bee n det er mi ne d b y t he Re ven ue . I n t he a bs en ce I.T.As. No.3297 & 3536/Del/2016 20 of an y ex pla na ti on f ro m t he R ev en u e an d o n ex a min ation of the f indi ng s r eco rd ed b y t he CI T( A), w e do no t se e a n y rea so n to int erf er e wi th th e o rde r of the C IT (A ). Gr ou nd N o.2 of t h e a ppe al of the R ev en ue i s d is mi sse d. 19. In t he res ul t, th e app ea l of th e a ss e sse e i s allo we d a n d th e app ea l of th e Re ve n ue is p art l y a ll ow ed . Order pronounced in the open Court on 21/06/2022. Sd/- Sd/- [YOGESH KUMAR US] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /06/2022 Prabhat