Chander Prakash Chawla, New Delhi V. ACIT Circle-46(1), New Delhi

ITA 3682/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2537 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 26-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AVIKAL MANNU
• Assessee Lawyers: Y K SUD; S S KALRA
• Keywords: Capital asset; Income from undisclosed sources; Principle of natural justice; Opportunity of cross examination; Additional evidence; Cost of acquisition; Onus to prove; Set aside
• Section: 142(1); 133(6); 205; 13; 22; 131; 68; 69; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3682/DEL/2019 : ASSTT. YEAR : 2014-15 CHANDER PRAKASH CHAWLA, 14, DREAM LAND HOUSE, 1/18-B, ASAF ALI ROAD, NEW DELHI-110002 VS ACIT, CIRCLE-46(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AADPC4885A ITA NO. 5231/DEL/2019 : ASSTT. YEAR : 20 14-15 ACIT, CIRCLE-46(1), NEW DELHI VS CHANDER PRAKASH CHAWLA, 14, DREAM LAND HOUSE, 1/18-B, ASAF ALI ROAD, NEW DELHI - 110002 (APPELLANT) (RESPONDENT) PAN NO. AADPC4885A ASSESSEE BY : SH. Y. K. SUD, CA & SH. S. S. KALRA, CA REVENUE BY : SH. AVIKAL MANNU, SR. DR DATE OF HEARING: 09.11.2020 DATE OF PRONOUNCEMENT : 27.11.2020 ORDER PER BENCH: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AND REVENUE AGAINST THE ORDERS OF THE LD. CIT(A)-16, NE W DELHI DATED 08.03.2019. 2. IN ITA NO. 3682/DEL/2019, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 2 A. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE DISALLOWANCE OF RS.2,02,65,593/- ON ACCOUNT OF SHORT TERM CAPITAL LOSS INCURRED BY THE APPELLANT O N SALE AND PURCHASE OF THE EQUITY SHARES. B. THAT WHILE SUSTAINING THE DISALLOWANCE OF SHORT TERM CAPITAL LOSS, THE CIT(A) FAILED TO APPRECIATE NOT ONLY THE SUBMISSIONS MADE BY THE APPELLANT BUT ALSO THE VITAL FACTS AND THE EVIDENCE WHICH CLEARLY SUPPORTED THE SALE AND PURCHASE OF THE SHARES. HENCE, THE ACTIONS OF THE AO & THE CIT(A) ARE REQUIRED TO BE VACATED. C. THAT THE CIT(A) FURTHER ERRED BY SUSTAINING THE ACTION OF THE AO IN PLACING THE RELIANCE ON THE STATEMENT RECORDED OF AN OFFICIAL OF THE AXIS BANK AT THE BACK OF ASSESSEE AND FURTHER NOT PROVIDING ANY OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. SUCH ACTION OF THE AO & CIT(A) CANNOT BE SUSTAINED AS CLEARLY AGAINST THE NATURAL JUSTICE. D. THAT BOTH CIT(A) & AO HAVE EXCEEDED THEIR JURISDICTION BY GIVING A FINDING THAT APPELLANT ASSESSEE SHOULD NOT HAVE INVESTED IN THE SHARES OF THE COMPANY NAMELY INDIA INFOTECH & SOFTWARES LTD. AND FURTHER CIT(A) HAS ALSO UPHELD THE DISALLOWANCE PURELY ON THE BASIS OF SUSPICION BY IGNORING THE DIRECT EVIDENCE FILED BY THE ASSESSEE. E. THAT THE CIT(A) HAS WRONGLY UPHELD THE DISALLOWANCE OF RS.1,16,04,591/- MADE OUT OF INTEREST CLAIMED U/S 24B OF THE INCOME TAX ACT, 1961. 3. IN ITA NO. 5231/DEL/2019, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE: 1. LD. C1T(A) HAS ERRED ON FACTS AND IN LAW BY DELETING THE QUESTIONABLE CREDIT ENTRIES OF RS. 1,80,00,000/- RECEIVED BY ASSESSEE FROM M/S TRUE VALUE CONTRACTORS P. LTD. MERELY ON THE BASIS THAT ASSESSEE PRODUCED ADDITIONAL EVIDENCE BEFORE THE LD. CIT(A) THAT SUCH AMOUNT WAS PAID FROM SBI AND NOT FROM AXIS BANK/CITI BANK AS PER AFFIDAVIT OF SU CH CREDITOR FILED ORIGINALLY DATED 29.03.2017 WITHOUT ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 3 OVERCOMING TWIN HURDLES, FIRSTLY THAT IT WAS A BOGU S MAKE BELIEVE TRANSACTION WHERE A PROPERTY WORTH MARKET VALUE OF RS. 3,51,62,400/- (ACCORDING TO SUB-REGISTRAR) WAS CLAIMED TO BE SOLD TO M/S TRUE VALUE CONTRACTORS P. LTD. THAT TOO THROUGH UNREGISTERED SALE AGREEMENT AT THREE TIMES MORE VALUE OF RS. 9 CRORE AGAINST WHICH SUCH ADVANCE OF RS. 1.80 CRORES WAS RECEIVED, AND SECOND PART ASSESSEE FAILED TO PROVE ANY BASIS OF SUBSEQUENT CLAIM THAT SUCH BUYER BACKED OUT BECAUSE PROPERTY PRICES FELL AND THUS THE CREDITOR OF SUCH AMOUNT AGREED FOR ASSESSEE FORFEITING SUCH AMOUNT. 2. LD. CIT(A) HAS ERRED ON FACTS AND IN LAW BY DELETING AMOUNT OF RS. 1,80,00,000/- WITHOUT PREJUDICE TO GROUND NO (I), THAT FORFEITURE OF ANY ADVANCE PAID TO THE SELLER FOR PURCHASE OF ANY IMMOVABLE ASSET BEING NOT INCOME U/S 56(2)(IX) IN AY 2014- 15 BY NOT CONSIDERING THAT SUCH FORFEITURE OF ADVANCE PAID TO THE SELLER WOULD BE TAXABLE REVENUE INCOME U/S 28 OF I.T. ACT, 1961 WHEN SUCH IMMOVABLE ASSET IS PART AND PARCEL OF BUSINESS ASSETS OF ASSESSEE SHOWN IN ACCOUNTS OF M/S PER MEDIA ENTERPRISES. APPEAL OF THE ASSESSEE IN ITA 3682/DEL/2019: 4. THE ASSESSEE HAS FILED THE GROUNDS OF SHORT TERM CAPITAL LOSS AND INTEREST U/S 24(B). 5. AT THE OUTSET, IT WAS BROUGHT TO THE NOTICE OF B ENCH BY THE LD. AR THAT THE ASSESSEE HAS FILED APPLICATION UNDER THE DIRECT TAX VIVAD SE VISHWAS ACT 2020 AND HAS ALREADY SUBMITTED FORM 1 AND 2. 6. KEEPING IN VIEW THE EXERCISE OF OPTION BY THE AS SESSEE TO OPT FOR THE SCHEME, THE APPEAL OF THE ASSESSEE IS BEING DISMISS ED AS INFRUCTUOUS WITH LIBERTY TO THE ASSESSEE TO APPROACH THE TRIBUNAL IN CASE THE FORM 3 HAS NOT BEEN ISSUED BY THE DESIGNATED AUTHORITY. ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 4 APPEAL OF THE REVENUE IN ITA 5231/DEL/2019: ADDITION ON ACCOUNT OF UNEXPLAINED INCOME: 7. THE FACTS OF THE ISSUE AND THE ARGUMENTS TAKEN U P BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES AS PER THE ORDER OF THE LD. CIT (A) ARE AS UNDER: THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE RECEIVED AN ADVANCE OF RS. 1.80 CRORES FROM TRUE VALUE CONTACTO RS (P) LTD. DELHI IN PURSUANCE TO THE AGREEMENT TO SELL OFF HIS PLOT NO. 5, ROAD-H-9, DLF QUTAB ENCLAVE COMPLEX, GURGAON. THE C OPY OF THE AGREEMENT SIGNED BY BOTH THE PARTIES AND ALSO D ULY WITNESSED BY TWO WITNESSES WAS FILED BEFORE THE AO AT THE TIME OF ASSESSMENT. THE AGREEMENT HAVE BEEN REPRODUCED B Y AO ON PAGE 18 TO 21 OF ASSESSMENT ORDER. THE SALIENT FEAT URES OF AGREEMENT ARE AS FOLLOWS:- I. THE ASSESSEE IS THE SELLER AND M/S. TRUE VALUE C ONTRACTORS (P) LTD. WHICH IS A COMPANY REGISTERED VIDE CIN U45201DL2005PTC13297J HAVING ITS REGISTERED OFFICE AT C-17 G/F GURUNANAK PURA, LAXMI NAGAR, NEW DELHI THROUGH ITS DIRECTOR MR. SAURAB JAIN AS BUYER. II. THE TOTAL CONSIDERATION OF THE SALE OF SAID PRO PERTY IS DULY MENTIONED AS 9 CRORES IN CLAUSE NO. 1 OF THE AGREEM ENT AND FURTHER IN THE SAID CLAUSE IT IS CLEARLY MENTIONED THAT THE EARNEST MONEY OF RS.1.80 CRORES HAS BEEN PAID BY TH E BUYER BY MAKING 4 RTGS FROM HIS ACCOUNT TO THE ACCOUNT OF TH E SELLER AND DETAILS HAVE BEEN DULY MENTIONED IN THE AGREEMENT T O SELL. THE BALANCE PAYABLE AMOUNT HAS BEEN AGREED AS 7.20 CROR ES AND THE INSTALLMENTS AND DUE DATES ARE ALSO MENTIONED I N THE AGREEMENT ITSELF. FURTHER OTHER VARIOUS CLAUSES WHI CH ARE THE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 5 NORMAL CLAUSES IN THE AGREEMENT TO SELL ARE ALSO ME NTIONED IN THE AGREEMENT. THE AGREEMENT HAS BEEN DULY SIGNED B Y BOTH BUYER AND SELLER AND ALSO IT IS DULY WITNESSED BY T WO WITNESSES. III. THEREAFTER THE ASSESSES FURTHER FILED A COPY O F LETTER DATED 10.02.2014 WRITTEN BY BUYER I.E. M/S. TRUE VALUE CO NTRACTOR (P) LTD. INFORMING THEIR INABILITY TO MAKE BALANCE PAYM ENT BECAUSE OF THEIR TIGHT FINANCIAL POSITION. FURTHER THE BUYE R HAS ALSO WRITTEN IN THE LETTER THAT HE HAS NO OBJECTION FOR FORFEITURE OF THE AMOUNT PAID BY HIM. THE POWER OF FORFEITURES IS ALSO AVAILABLE AS PER THE CLAUSE NO. 2 OF THE AGREEMENT TO SELL WHICH MAY KINDLY BE REFERRED TO. THE AFORESAID LETTER IS AVAILABLE AT PAGE 23 OF THE ASSTT. ORDER. IV. THE A.O. FURTHER SOUGHT INFORMATION FROM THE SU B- REGISTRAR GURUGRAM ENQUIRING ABOUT THE CIRCLE RATE OF PROPERT Y WHICH WAS 70000/- PER SQ. YARD AS PER THE INFORMATION PROVIDE D BY SUB- REGISTRAR. ALTHOUGH THERE IS NO CONNECTION OF CIRCL E RATE AND THE MARKET VALUE BUT DESPITE THIS FACT SHE WORKED OUT T HE TOTAL VALUE OF THE PROPERTY AS PER THE CIRCLE RATE AT RS. 3,51,62,400/-. IT MAY BE SUBMITTED HERE THAT CIRCLE RATE IS FIXED BY THE GOVT., AS A MINIMUM PRICE OF THE PROPERTY ON WHICH THE STA MP DUTY IS RECOVERED AND IT HAS NOTHING TO DO WITH THE MARKET VALUE WHICH CAN BE MUCH MORE OR EVEN LESS THEN THE CIRCLE RATE FIXED BY THE GOVT. THE A.O. HAS EXCEEDED HER POWER BY TRYING TO INTERFERE WITH THE AGREEMENT TO SELL WHICH IS CLEARLY A CONTR ACT BETWEEN THE BUYER AND THE SELLER FOR A SPECIFIC CONSIDERATI ON AND IT IS NOT FOR THE A.O. TO DETERMINE THAT WHAT COULD BE THE MA RKET VALUE OF A PARTICULAR PLOT WHICH CAN EVEN VARY LOOKING IN TO LOCATION OF PLOT OR OTHER MARKET FACTORS SUCH AS ACCESSIBILITY, LAND DEVELOPMENT OF THE AREA WHICH THE A.O. HAS NO WHERE TRIED TO ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 6 CONSIDERED THOSE FACTORS. HENCE THIS ACTION OF THE ITO CANNOT BE SUSTAINED ON THIS GROUND. V. THE A.O. FURTHER IN PARA 5.3 OF HER ORDER OBSERV ED THAT THE FORFEITED AMOUNT OF RS. 1.80 CRORES DOES NOT APPEAR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ALSO SHE OBSE RVED THAT THE ASSESSEE HAS NOT DISCHARGED HIS ONUS OF ESTABLI SHING THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE SAME7 FURTHER SHE REFERRED TO THE STATEMENT OF THE ASSESS EE RECORDED BY HER IN WHICH WHILE ANSWERING THE QUESTION NO 50 THE ASSESSEE HAD STATED THAT HE HAD NO CONTACT WITH THE BUYER AFTER 2014. HOWEVER THE A.O. HAD STATED THAT THE ASSESSEE HAD SUBMITTED A BANK STATEMENT OF TRUE VALUE CONTACTORS (P) LTD./JAFNA CONTRACTORS (P) LTD. WHICH HAD BEEN SCAN NED AND MADE A PART OF THE ASSESSMENT ORDER. FURTHER IN PAR A 5.3 THE AO HAS ALLEGED THAT THE AMOUNT OF RS. 1.80 CRORES W HICH IS A FORFEITURE OF ADVANCE WAS NOT FOUND AS A CREDIT ENT RY IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THIS OBSERVATIONS OF THE A.O. ARE NOT ONLY FACTUALLY INCORRECT BUT IT APPEARS THA T SHE HAS NOT EVEN APPLIED HER MIND TO THE BOOKS OF ACCOUNT OF TH E ASSESSEE WHERE THE SAME HAS BEEN CREDITED. IN THIS REGARD TH E ASSESSEE WOULD LIKE TO DRAW YOUR KIND ATTENTION TO THE COPY OF ACCOUNT OF TRUE VALUE CONTRACTORS (P) LTD. WHEREIN RS. 1.80 CR ORES HAS BEEN REFLECTED AS RECEIPTS THROUGH RTGS FROM TRUE V ALUE CONTRACTORS WHICH STANDS DULY CREDITED TO THEIR ACC OUNT AND ON 31ST MARCH AS A FORFEITURE OF THE ADVANCE THE CREDI T OF RS. 1.80 CRORES HAS BEEN CREDITED TO THE DRAWING ACCOUNT OF MR. C.P. CHAWLA THE ASSESSEE AND THE RESULTANT CREDIT 'BALAN CE OF RS. 82,81,764/- HAS BEEN REFLECTED IN HIS CAPITAL ACCOU NT IN THE BALANCE SHEET. THE COPY OF ACCOUNT AND THE BALANCE SHEET ARE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 7 ENCLOSED HEREWITH FOR YOUR KIND PERUSAL AND ARE ENC LOSED AT PAGES 1 TO 6. FURTHER THE AO HAS STATED THAT IN THE STATEMENT OF THE ASSESSEE RECORDED BY HER THE ASSESSEE HAS STATE D THAT THE ASSESSEE HAD NO CONTACT WITH TRUE VALUE CONTRACTOR (P) LTD./JAFNA CONTRACTOR (P) LTD AFTER 2014. IN THIS R EGARD IT IS SUBMITTED THAT ONCE THE TRANSACTION IS COMPLETE THE ASSESSEE IS NOT SUPPOSED TO KEEP ANY TRACK OF THE PROPOSED BUYE R. HENCE NO COGNIZANCE CAN BE TAKEN FROM THIS STATEMENT OF T HE ASSESSEE. IT MAY FURTHER BE ADDED THAT THE AO HAS S TATED THAT THE ASSESSEE HAS FILED BANK STATEMENT OF AXIS BANK VIDE HIS LETTER DATED 15.12.2016. THE ASSESSEE IN THIS REGAR D WOULD LIKE TO SUBMIT THAT THIS STATEMENT OF AXIS BANK WAS ALRE ADY AVAILABLE WITH THE ASSESSEE WHICH WAS OBTAINED BY HIM AT THE TIME OF PAYMENT MADE BY THE BUYER. VI. IN PARA 5.4 THE AO HAS STATED THAT ON THE BASI S OF COPY OF BANK STATEMENT FROM WHERE THE MONEY HAS TRAVELLED T HROUGH RTGS TO THE ACCOUNT OF THE ASSESSEE THE LETTER WAS SENT FOR VERIFICATION BY HER TO THE AXIS BANK AND SHE HAS ST ATED THAT AXIS BANK VIDE THEIR LETTER DATED 28.12.2016 HAS STATED THAT ACCOUNT NO. 9130200 32425869 BELONGS TO ONE M/S EXCEL BUILD TECH (P) LTD IN THE NAME OF BASHESHWAR NATH, 4132, NAYA BAZA R, NEW DELHI WITHOUT CONFRONTING THIS STATEMENT OF THE BAN K TO THE ASSESSEE. ALL SHE DID WAS SHE ISSUED A FINAL NOTICE U/S 142(1) TO THE ASSESSEE ON 28.12.2016 TO FILE VARIOUS DETAILS ON 30.12.2016 AND THE REASON OF SHORT NOTICE SHE HAS G IVEN THAT THE CASE WAS GETTING BARRED BY LIMITATION ON 31.12. 2016. IN PARA 3.4 OF THE SAID NOTICE SHE HAS BROUGHT TO OUR NOTICE THAT AXIS BANK HAS STATED THAT THE SAID ACCOUNT FROM WHE RE THE RTGS HAS COME BELONGS TO M/S. EXCEL BUILTECH(P) LTD. AND JUST ON THE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 8 BASIS OF THAT SHE CONCLUDED THAT THE INTENTION OF T HE ASSESSEE IS MALAFIDE AND SHE GAVE A SHOW CAUSE AS TO WHY RS. 1. 80 CRORE BE NOT TREATED AS INCOME OF THE ASSESSEE. VII. IN THIS REGARD THE ASSESSEE WOULD LIKE TO SUB MIT THAT AT THE VERY OUTSET THE AO HAS MADE UP HER MIND WITHOUT CONFRONTING THE MATERIAL TO THE ASSESSEE TO TREAT T HE FORFEITED AMOUNT AS INCOME FROM UNDISCLOSED SOURCES. IT IS PE RTINENT TO MENTION HERE THAT SHE HAS JUST GIVEN 2 DAYS NOTICE U/S 142(1) TO THE ASSESSEE AND THAT TOO WITHOUT CONFRONTING TH E LETTER RECEIVED FROM THE BANK WHEREIN THE BANK HAD DENIED THAT ACCOUNT FROM WHERE THE MONEY HAS TRAVELLED DOES NOT BELONG TO THE PURCHASER I.E. TRUE VALUE CONTRACTORS (P) LTD./ JAFNA CONTRACTORS (P) LTD. HER ACTION IS TOTALLY AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND SHE ACTED IN A PREDETERMINED MI ND TO MAKE THIS UNCALLED FOR ADDITION DESPITE ALL THE CLEAR EV IDENCES PROVIDED BY THE ASSESSEE. NOW THE APPELLANT ASSESSE E WOULD LIKE TO MAKE THE FOLLOWING SUBMISSIONS BEFORE YOUR GOODSELF IN THIS/REGARD: A. THE ADVANCE PAID BY THE BUYER IS THROUGH THE RTGS A ND THE DETAILS OF THE SAME ARE CLEARLY MENTIONED IN THE AG REEMENT TO SELL (REFER TO PAGE 19 OF ASST. ORDER) AND THE S AME IS SIGNED AND WITNESSED BY THE BUYER. B. DESPITE THIS ON THE ALLEGATION LEVIED BY THE AO THE ASSESSEE HAD VERY LIMITED TIME OF JUST 1 DAY TO FIL E FURTHER EVIDENCE IN THIS REGARD BUT HOWEVER THE ASSESSEE CONFRONTED ITS OWN BANK STATE BANK OF INDIA FOR THE VERIFICATION OF THE FACTS AND THE SBI VIDE THEIR CE RTIFICATE DATED 04.03.2017 (COPY ENCLOSED) HAS CERTIFIED THAT RS. ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 9 1.80 CRORES HAVE BEEN CREDITED TO THE ACCOUNT OF CH ANCIER PARKASH CHAWLA, THE ASSESSEE IN HIS ACCOUNT NO. 10237358054 FROM AXIS BANK LTD. FURTHER THE SBI HAS ALSO GIVEN DETAILS OF RTGS WHEREIN IT IS VERY CLEARLY ME NTIONED THAT THIS RTGS HAS BEEN MADE BY TRUE VALUE CONTRACT ORS (P) LTD. AND STAND RECEIVED FROM AXIS BANK (COPY ENCLOSED). THE ABOVE CERTIFICATES OF SBI ARE ENCLOS ED AT PAGES 7 & 8. C. THE ASSESSEE THEN MADE THE SEARCH OF THE RECORDS OF THE REGISTRAR OF COMPANIES TO TRACE THE WHEREABOUTS OF TRUE VALUE CONTRACTORS (P) LTD./JAFNA CONTRACTORS (P) LT D. AND THE SEARCH REPORT OF ROC RECORD IS ENCLOSED HEREWIT H WHEREIN IT WAS CONFIRMED THAT COMPANY IS EXISTING H AVING ITS REGISTERED OFFICE AT C-17, GURUNANAKPURA, LAXMI NAGAR DELHI AND HAS FILED ITS LAST BALANCE SHEET OF 31.03 .2016 AND ANNUAL REPORT OF AGM ON 27.09.2016 (COPY ENCLOS ED). THE SEARCH REPORT IS ENCLOSED AT PAGES 9 & 10. AFTE R THAT THE ASSESSEE APPROACHED THE DIRECTOR OF JAFNA CONTR ACTORS (P) LTD. AND OBTAINED AFFIDAVIT FROM THEM IN FURTHE R CONFIRMATION OF THE PAYMENT MADE BY THEM AND THEY H AVE CONFIRMED THESE PAYMENTS IN PARA 3 OF THE AFFIDAVIT AND ALSO CONFIRMED THE FORFEITURE OF THE EARNEST MONEY IN PARA 4 OF THE AFFIDAVIT. FURTHER IN PARA 5 THEY HAVE STA TED THAT THE NAME OF THE COMPANY TRUE VALUE CONTRACTORS (P) LTD. WAS CHANGED TO JAFNA CONTRACTOR (P) LTD. ON 22.03.2 016 (COPY OF THE AFFIDAVIT IS ENCLOSED FOR YOUR KIND PE RUSAL). THE COPY OF AFFIDAVIT IS ENCLOSED AT PAGES 11 TO 13 . ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 10 VIII. THE AO HAS GIVEN HER FINDINGS STARTING FROM P ARA 5.5 OF THE ORDER AND THE PARAWISE REBUTTAL AND SUBMISSIONS OF THE ASSESSEE ARE AS FOLLOWING:- (A) IN PARA 5.5 THE AO HAS ALLEGED THAT THE ASSESSE E HAS FURNISHED IHE FALSE BANK STATEMENT WHICH THE ASSESS EE HAS ALREADY REBUTTED IN THE SUBMISSIONS MADE ABOVE IN P ARA NO. VI & VII. FURTHER THE AO HAS OBSERVED THAT THE AGREEMENT TO SELL IS NOT ON THE STAMP PAPER AND THEREFORE NOT A LEGAL PA PER. IN THIS REGARD IT IS SUBMITTED THAT AN AGREEMENT CAN BE EXE CUTED EVEN ON THE NORMAL PAPERS AND IT IS NOT UNDERSTOOD THAT HOW SHE HAS GIVEN A FINDING THAT THE PAPERS ARE NOT THE LEGAL P APERS HAVING NO EVIDENTIARY VALUE. IT IS FURTHER SUBMITTED HERE THAT THIS AGREEMENT HAS BEEN SIGNED BY PURCHASER AND SELLER A ND EVEN THE CONSIDERATION PAID BY THE PURCHASER IS THROUGH THE BANKING CHANNEL AND IS PROVED AND EVEN THE AGREEMENT HAS BE EN - CONFIRMED-BY THE PURCHASER BY WAY OF AFFIDAVIT. HEN CE THIS AGREEMENT HAVE COMPLETE EVIDENTIARY VALUE AND CANNO T BE TREATED AS FAKE. IF IT ALL AO HAD ANY DOUBT SHE COU LD HAVE SUMMONED THE PURCHASER AND THE WITNESSES TO THE AGR EEMENT WHICH SHE FAILED TO DO SO POSSIBLY BECAUSE OF PAUCI TY OF TIME. THE FINDING OF THE AO DESERVES TO BE SET ASIDE. (B) IN PARA 5.6 SHE HAS REFERRED TO THE SHOW-CAUSE NOTICE DATED 28.12.2016 WHICH WAS GIVEN WITH. THE PRESET M IND GIVING ASSESSEE ONLY ONE DAY TIME TO REBUT THE LETTER OF A XIS BANK PROCURED BY HER AT THE BACK OF THE ASSESSEE AND NOT EVEN CONFRONTING THE SAME TO THE ASSESSEE AND GIVING THE ASSESSEE AN OPPORTUNITY TO EXPLAIN. THIS ACTION OF THE AO IS TOTALLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE STAT EMENT OF AXIS BANK PROCURED AT THE BACK OF THE ASSESSEE CANNOT BE RELIED ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 11 UPON. EVEN OTHERWISE BY WAY OF AN ADDITIONAL EVIDE NCE NOW BEING FILED THE ASSESSEE HAS PROVED THE FORFEITURE OF RS. 1.80 CRORES RECEIVED FROM TRUE VALUER/JAFNA CONTRACTORS (P) LTD. AS GENUINE. (C) IN PARA 5.7 THE AO HAS REPRODUCED THE REPLY OF THE ASSESSEE DATED 30.12.2016 WHEREIN THE ASSESSEE COMP LETELY MET WITH ALL THE REQUIREMENTS FOR PROVING THE CASH CREDIT IN THE BOOKS OF THE ASSESSEE AND DISCHARGE HIS ONUS COMPLE TELY AS STATED ABOVE. (D) IN PARA 5.8 THE AO HAS AGAIN ALLEGED THAT RS. 1 .80 CRORES RECEIVED BY THE ASSESSEE IN HIS BANK ACCOUNT FROM AXIS BANK ACCOUNT NO.913020032425869 DOES NOT FIND PLACE IN T HE STATEMENT OF AXIS BANK FILED BY THE ASSESSEE. THIS FINDING IS TOTALLY FACTUALLY INCORRECT AND THE TRANSFERS ARE C LEARLY REFLECTED IN THE STATEMENT OF ACCOUNT OF AXIS BANK FILED BY T HE ASSESSEE. HOWEVER ON HER ENQUIRIES FROM THE AXIS BANK SHE FOU ND OUT THAT ACCOUNT NUMBER MENTIONED ON THE STATEMENT IS NOT CO RRECT AND IT PERTAINS TO SOME EXCEL BUILTECH (P) LTD. THUS SH E CONCLUDED THAT STATEMENT GIVEN BY THE ASSESSEE IS FALSE AND W ITH A MALAFIDE INTENTION. IN THIS REGARD IT IS SUBMITTED THAT AS ALREADY MENTIONED ABOVE THIS STATEMENT WAS GIVEN TO THE ASS ESSEE BY TRUE VALUE CONTRACTORS (P) LTD. AND AS IT IS IT WAS FILED BEFORE THE AO. HOWEVER ON POINTING OUT BY THE AO THE ASSES SEE HAS PROCURED FURTHER EVIDENCE SUCH AS CERTIFICATE FROM SBI SUPPORTED BY COMPLETE NARRATION AND REF. NOS. OF RT GS SENT BY AXIS BANK TO THE A/C OF THE ASSESSEE AND THE AFFIDA VIT OF TRUE VALUE CONTRACTORS (P) LTD. AND HAS PROVED THAT THE CASH CREDIT OF RS. 1.80 CRORES HAS TRAVELLED BY WAY OF RTGS FRO M AXIS BANK THROUGH TRUE VALUE CONTRACTORS (P) LTD. ONLY AND IF THE EARLIER ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 12 STATEMENT WHICH WAS GIVEN BY THE BUYER IS BY ANY CH ANCE IS NOT PROPER NO COGNIZANCE CAN BE TAKEN AFTER THE COMPLET E PROOFS WHICH HAVE BEEN FILED BY THE ASSESSEE NOW. IT HAS B EEN WRONGLY ALLEGED BY THE AO THAT INTENTION OF THE ASSESSEE IS MALAFIDE BECAUSE THE ASSESSEE HAS COMPLETELY DISCHARGED HIS ONUS TO PROVE THE CASH CREDIT BY WAY OF PROPER EVIDENCE. (E) IN PARA 5.9 THE AO HAS AGAIN MENTIONED THAT THE AGREEMENT TO SELL IS WITHOUT ANY LEGAL STAMP PAPER AND SIMPLY ON THIS BASIS SHE HAS MADE A PRESUMPTION THAT NOBOD Y WOULD GIVE A ADVANCE OF RS. 1.80 CRORES WITHOUT ANY LEGAL ASSURANCE. THE AO HAD AGAIN TRIED TO GO BEYOND HER POWERS AND INTERFERE INTO AN AGREEMENT WHICH HAS BEEN PROVED AND CONFIRM ED BEYOND ANY DOUBT BY BOTH THE PARTIES. (F) IN PARA 5.10 THE AO HAS ALLEGED THAT THE COPIE S OF LETTER DATED 10.02.2014 AND RECEIPT DATED 02.02.2014 ARE I NELIGIBLE AND THEREFORE SHE HAS DOUBTED THE ADVANCE OF RS. 1. 80 CRORES PAID BY THE PURCHASER. IN THIS REGARD IT IS SUBMITT ED THAT BOTH THE LETTER AND RECEIPT ARE TOTALLY ELIGIBLE AND PHO TOCOPY OF THE SAME ARE ENCLOSED HEREWITH FOR YOUR READY REFERENCE . KINDLY SEE PAGES 14 & 15. EVEN THE ASSESSEE CAN PRODUCE ORIGIN AL FOR YOUR VERIFICATION. EVEN OTHERWISE THIS PAYMENT-OF RS. 1. 80 CRORES HAS BEEN ACKNOWLEDGED BY BOTH THE PARTIES IN THE AGREEM ENT TO SELL AND THE PAYMENT HAS BEEN MADE THROUGH THE BANKING C HANNELS BY WAY OF RTGS DULY CONFIRMED BY THE BANK AND ALSO THE AFFIDAVIT OF THE BUYER WHICH HAS BEEN FILED BEFORE YOUR GOODSELF TO PROVE THAT THE OBJECTIONS ARE WITHOUT ANY BASIS. (G) IN PARA 5.11 THE AO HAS DOUBTED-THE MARKET VAL UE OF THE PLOT ON THE BASIS OF THE CIRCLE RATE FOR WHICH WE H AVE ALREADY ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 13 MADE OUR SUBMISSIONS IN PARA 3(IV) OF OUR SUBMISSIO NS AND ALSO THE ASSESSEE IN HIS STATEMENT RECORDED BY AO HAS EX PLAINED THIS FACT WHILE ANSWERING TO QUESTION NO. 51. FURTHER TH E AO HAS PUT A CHARGE THAT THE ASSESSEE HAD TRIED TO EVADE TAX. THIS CHARGE OF THE AO IS COMPLETELY BASELESS WITHOUT ANY EVIDEN CE SINCE THE AMOUNT RECEIVED AND FORFEITED BY THE ASSESSEE WOULD REDUCE THE COST OF THE ASSET AND AT THE TIME OF THE SALE THE C APITAL GAIN WOULD GO UP WITH THE SAME AMOUNT. HENCE THERE CANNO T BE ANY TAX EVASION. THE COMPLETE COPY OF STATEMENT OF THE ASSESSEE IS ENCLOSED AT PAGES 16 TO 27. (H) THE OBSERVATION OF THE AO IN PARA 5.12 IS FACTU ALLY INCORRECT UNDERSTANDING AND APPLYING HER MIND ON THE BOOKS OF ACCOUNTS AND DETAILS OF THE SAME HAVE BEEN EXPLAINED IN OUR SUBMISSIONS IN PARA 3(V). IT IS WELL SETTLED LAW THAT WHERE THE ASSESSEE HAS ESTABLISHED THE IDENTITY OF THE CREDITOR AND THE TRANSACTION HA S BEEN DONE THROUGH THE BANKING CHANNEL THE INITIAL BURDEN CAST UPON THE ASSESSEE TO PROVE THE CREDIT IS DISCHARGED AND NO A DDITION U/S 68 & 69 CAN BE MADE YOUR ATTENTION IS DRAWN TOWARDS THE FOLLOWING JUDGMENTS:- I. 292 ITR (P&H) 597 - CIT \/S JEETA KHAN II. 299 ITR (P&H) 53 - CIT VS KULWLANT SINGH & CO. III. (2015) 372 ITR 232 (CAT) IV. (2015) 378 ITR 351 (DEL) V. (2006) 205 CTR 0571 CIT VS GLOWCOM IMPEX (P) LTD . VI. 173 TTJ (CHD) UO 75 - DCIT VS LOIL HEALTH FOODS LTD. ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 14 ASSESSEE HAVING FILED COPY OF CERTIFICATE OF INCORP ORATION OF THE CREDITOR COMPANY AND CONFIRMATION FROM THE CREDITOR AS WELL AS THE BANK STATEMENT OF THE CREDITOR; BESIDES ITS OWN BANK STATEMENT WHICH SUPPORT THE ASSESSEE'S EXPLANATION THAT THE LOAN WAS GIVEN BY THE CREDITOR TO THE ASSESSEE ON F OUR DATES THROUGH BANKING CHANNELS, THE INITIAL BURDEN THAT L AY UPON HE ASSESSEE TO PROVE THE IDENTITY EXISTENCE OF THE CRE DITOR> ITS CREDITWORTHINESS AND GENUINENESS OF TRANSACTION HAS BEEN DISCHARGED BY IT AND, THEREFORE, ADDITION UNDER S. 68 WAS NOT JUSTIFIED. IN VIEW OF ABOVE FACTS AND THE LEGAL POSITION THE A DDITION OF RS.1,80,00,000/- MADE BY THE A.O. IS REQUESTED TO B E DELETED. THE FINDING OF THE AO WAS ALSO PERUSED AND IS DETAI LED AS UNDER: THE ASSESSEE VIDE LETTER DATED 15/12/2016 SUBMITTED THAT AN ADVANCE OF RS.1,80,00,000/- WAS RECEIVED FROM TRUE VALUE CONTRACTORS PVT. LTD. (C-17, G/F, GURU NANAK PURA, LAXMI NAGAR, DELHI-110092) AS ADVANCE MONEY ON ACCOUNT OF DEAL FOR SALE OF PLOT NO. 5, ROAD H-9 IN THE RESIDENTIAL COL ONY KNOWN AS DLF QUTAB ENCLAVE COMPLEX, DIST GURGAON. FURTHER, V IDE, LETTER DATED 16/12/2016 THE ASSESSEE SUBMITTED THE COPY OF LETTER DATED 10/02/2014 OF TRUE VALUE CONTRACTORS PVT. LTD . INFORMING THEIR INABILITY TO MAKE THE BALANCE PAYMENT BECAUSE OF THEIR TIGHT FINANCIAL POSITION AND THEIR NO OBJECTION TO FORFEITURE OF EARNEST MONEY. 5.1 SUMMON U/S 131 OF THE INCOME TAX, ACT 1961 WAS ISSUED TO TRUE VALUE CONTRACTORS PVT. LTD AND JAAFA CONTRACTO RS LTD(IN ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 15 WHOSE AXIS ACCOUNT THE ADVANCE MONEY IS CREDITED), BOTH THE SUMMON REMAINED UNSERVED AS PER THE INSPECTOR REPOR T DATED 16/12/2016. WHEN THE SAME WAS CONFRONTED TO THE ASS ESSEE BY Q. NO 50 OF THE STATEMENT RECORDED U/S 131 THE REPL Y GIVEN WAS THAT: 'I HAVE NO CONTACT WITH THEM AFTER 2014 AND I DO NOT KNOW THEIR WHERE ABOUT, I HAVE ALREADY PROVIDED THE DOCUMENTS'. 5.2 ALSO VIDE LETTER DATED 19/12/2016 INFORMATION W AS SOUGHT U/S 133(6) FROM SUB-REGISTRAR, GURUGRAM, HARYANA TO PROVIDE THE CIRCLE RATE OF THE PROPERTY AS MENTIONED ABOVE. THE SUBMISSION MADE BY THEM VIDE LETTER DATED 20/12/201 6 SHOWS THAT CIRCLE RATE FOR DLF PHASE-I IS RS. 70,000/- PE R SQ. YARDS FOR RESIDENTIAL PROPERTY. THE AREA IN THE ABOVE MENTION ED PROPERTY IS 502.32 SQ YARDS AS PER THE SUBMISSION MADE BY TH E ASSESSEE, WHICH MEANS THE CIRCLE RATE COMES OUT TO BE RS. 3,5 1,62,400/-. 5.3 THE AMOUNT OF RS. 1,80,00,000/- BEING FORFEITU RE OF ADVANCE WAS NOT A CREDIT ENTRY APPEARING IN THE BOO KS OF ACCOUNTS AND THE ASSESSEE WAS NOTABLE TO DISCHARGE THE ONUS OF ESTABLISHING THE IDENTITY, GENUINENESS AND CREDITWO RTHINESS OF THE SAME. THERE WERE CONTRADICTIONS NOTED IN THE ST ATEMENT RECORDED OF THE ASSESSEE, THAT IS IN THE ANSWER TO QUESTION NO. 50 THE ASSESSEE HAS STATED THAT HE HAD NO CONTACT W ITH THE TRUE VALUE CONTRACTORS PVT. LTD./JAFFA CONTRACTORS PVT. LTD. AFTER 2014. HOWEVER, DURING THE COURSE OF ASSESSMENT PROC EEDINGS THE ASSESSEE HAS SUBMITTED THE BANK STATEMENTS AND OTHER DETAILS OF TRUE VALUE CONTRACTORS PVT. LTD./JAFFA C ONTRACTORS PVT. LTD. VIDE LETTER DATED 15/12/2016.THE BANK STA TEMENT OF AXIS BANK HAVING ACCOUNT NO. 913020032425869, SUBMI TTED BY THE ASSESSEE IS SCANNED AS UNDER (EXTRACTED IN BODY OF ORDER): ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 16 5.4 INFORMATION WAS SOUGHT U/S 133(6) FROM THE MAN AGER, AXIS BANK, STATESMAN HOUSE, NEW DELHI TO VERIFY THE BANK STATEMENT OF JAFFA CONTRACTORS PVT. LTD. SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 15/12/2016. IN RESPONSE TO NOTICE U/S 133(6) AXIS BANK HAS MADE SUBMISSION VIDE LETTE R DATED 28/12/2016 WHEREIN HE HAS STATED THAT THE ACCOUNT N O. 913020032425869 BELONGS TO M/S EXCEL BUILDTECH PVT. LTD., IN THE NAME OF SH. BASHESHWAR NATH, 4132, NAYA BAZAR, NEW DELHI CONTRARY TO THE CLAIM MADE BY THE ASSESSEE. THE REL EVANT PORTION OF THE BANK STATEMENT OF M/S EXCEL BUILDTEC H PVT. LTD. IS REPRODUCED AS UNDER: 5.5 IN VIEW OF THE ABOVE, IT WAS ESTABLISHED THAT THE ASSESSEE HAD FURNISHED FALSE BANK ACCOUNT STATEMENT. EVEN TH E AGREEMENT BETWEEN TRUE VALUE CONTRACTOR PVT. LTD. A ND THE ASSESSEE IN RESPECT OF THE ALLEGED SALE OF LAND WAS NEITHER STAMPED NOR ON LEGAL PAPER, THEREBY HAVING NO EVIDE NTIARY VALUE. THUS, THE CREDIT ENTRY OF RS. 1,80,00,000/- WAS NOT EXPLAINED BY THE ASSESSEE. 5.6 VIDE LETTER DATED 28/12/2016 THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE ABOVE MENTIONED AMOUNT OF RS.1,80,00,000/- SHOWN BY HIM AS ADVANCE RECEIVED A ND FORFEITED AND WHICH REMAINS UNEXPLAINED INCOME SHOU LD NOT BE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS P ER THE PROVISIONS OF INCOME TAX ACT, 1961. 5.7 IN RESPONSE THE ASSESSEE VIDE LETTER DATED 30/ 12/2016 SUBMITTED THE FOLLOWING WHICH IS REPRODUCED AS UNDE R: SCAN SHOW CAUSE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 17 5.8 THE SUBMISSIONS FILED BY THE ASSESSEE HAVE BEEN CONSIDERED BUT NOT FOUND TENABLE AND SATISFACTORY. THE ASSESSEE BPS STATED THAT HE HAS RECEIVED THE AMOUNT FROM A/C NO. 913020032425869 ONLY. WHEREAS IT HAS ALREADY BEEN B ROUGHT ON RECORD VIDE PARA 5.4 MENTIONED ABOVE THAT THE SA ID ACCOUNT IS IN THE NAME OF M/S EXCEL BUILDTECH PVT. LTD. AND THERE ARE NO ENTRIES OF RS.1,80,00,000/- IN RESPECT OF THE ASSES SEE ON THE RELEVANT DATES AS SEEN FROM THE BANK STATEMENT OF M /S EXCEL BUILDTECH PVT. LTD. AS REPRODUCED ABOVE. ALSO, THE ACCOUNT OF TRUE VALUE CONTRACTORS PVT. LT D OPERATED IN THE NAME OF JAFFA CONTRACTORS PVT. LTD WHICH WAS SU BMITTED BY THE ASSESSEE HIMSELF VIDE LETTER DATED 15/12/2016 H AS ALREADY BEEN PROVED TO BE FALSE AS MENTIONED IN PARA 5.4. A BOVE. THEREFORE, THE STATEMENT GIVEN BY THE ASSESSEE IS F AKE AND CLEARLY SHOWS THE MALAFIDE INTENTION OF THE ASSESSE E. 5.9 FURTHER, THE AGREEMENT TO SELL (REPRODUCED BELO W) SUBMITTED BY THE ASSESSEE WITH RESPECT TO SALE OF P LOT NO. 5, ROAD H-9 IN THE RESIDENTIAL COLONY KNOWN AS DLF QUT AB ENCLAVE COMPLEX, DISTT. GURGAON, SUBMITTED BY THE ASSESSEE VIDE LETTER DATED 26/12/2016 BETWEEN BOTH THE PARTIES WAS WITHO UT ANY LEGAL STAMP PAPER AND IT IS UNLIKELY THAT AN ADVANC E PAYMENT TO THE TUNE OF RS. 1,80,00,000 GIVEN BY SECOND PARTY ( TRUE VALUE CONTRACTORS PVT. LTD.) WOULD BE POSSIBLE WITHOUT AN Y LEGAL ASSURANCE FROM THE FIRST PARTY (ASSESSEE). IN THE S AME LETTER THE ASSESSEE HAS FURTHER SUBMITTED THATTHE AGREEME NT BEING PRODUCED WAS AGREEMENT WITHIN THE PARTIES AND NOT O N ANY LEGAL STAMP PAPER'. THIS ITSELF RAISES DOUBT ON THE VERAC ITY OF THE CLAIM OF THE ASSESSEE. ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 18 5.10 THE GENUINENESS OF THE TRANSACTIONS ARE FURTH ER QUESTIONABLE BY THE FACT THAT THE RECEIPT OF PAYMEN T (REPRODUCED BELOW) OF ADVANCE MONEY TO THE TUNE OF RS.1,80,00,000/- SUBMITTED VIDE LETTER DATED 15/12/ 2016 AND ALSO THE COPY OF LETTER DATED 10/02/2014 OF TRUE VA LUE CONTRACTORS PVT. LTD INFORMING THEIR INABILITY TO M AKE BALANCE PAYMENT VIDE LETTER DATED 16/12/2016 ARE NOT CERTIF IED COPIES AND HAVE ILLEGIBLE SIGNATURE OF THE PARTY THAT IS T RUE VALUE CONTRACTORS PVT. LTD. THE COPY OF THE SAME IS REPRO DUCED BELOW. 5.11 EVEN THE CIRCLE RATE OF THE PROPERTY, AS INFO RMED BY THE SUB-REGISTRAR; GURUGRAM U/S 133(6) COMES OUT TO BE RS. 3,51,62,400/- AS AGAINST THE SAID VALUE OF RS.9,00, 00,000/- BY THE ASSESSEE SUBMITTED VIDE LETTER DATED 15/12/2016 . THE ASSESSEE MADE AN AGREEMENT OF RS.9,00,00,000/- WHIC H IS ALMOST TWO AND A HALF TIMES THE CIRCLE RATE AND IN RESPECT OF THE SAME THE SECOND PARTY GAVE AN ADVANCE OF RS. 1,80,0 0,000/- (WITHOUT ANY LEGAL AGREEMENT) AND THE ADVANCE WAS F ORFEITED WITHIN A MONTH OF THE SO CALLED AGREEMENT. THESE FA CTS INDICATE BEYOND DOUBT THAT IT IS A BOGUS TRANSACTION AND WAS A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE OF EVADE TAXES. 5.12 NOW, GOING BY THE ACCOUNTING TREATMENT FOR FOR FEITURE OF ADVANCE, IT IS SEEN THAT THE ENTRY CAN BE PASSED IN TWO WAYS- (I) BY CREDITING THE ASSET ACCOUNT (II) BY CREDITING THE CAPITAL ACCOUNT THE ASSESSEE HAS NOT CREDITED THE ASSET ACCOUNT AS THE VALUE OF ASSET BEING PLOT NOR 5, ROAD H-9 IN THE RESIDENTIAL COLONY KNOWN AS DLF QUTAB ENCLAVE COMPLEX, DIST GURGAON IS SHOWN AS SAME ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 19 IN BALANCE SHEET AS ON 31/03/2014. THE OTHER ENTRY COULD HAVE BEEN INCREASE OF CAPITAL. HOWEVER, THE ASSESSEE HAS SHOWN DRAWINGS OF RS.1,80,00,000/- SCAN ON ACCOUNT OF FOR FEITURE OF ADVANCE. HOWEVER, THE AMOUNT OF RS.1,80,00,000/- HA S NOT BEEN WITHDRAWN BY THE ASSESSEE FROM BANK ACCOUNT AS IS EVIDENT FROM THE BANK STATEMENT OF THE ASSESSEE FUR NISHED BY THE ASSESSEE. THEREFORE, EVEN THE ACCOUNTING HAS NO T BEEN DONE IN THE BOOKS OF ACCOUNTS. THE ACCOUNT OF DRAWINGS I S REPRODUCED AS BELOW: IN VIEW OF THE ABOVE, THE CLAIM OF THE ASSESSEE WIT H REGARD TO THE ADVANCE MONEY RECEIVED TO THE TUNE OF RS.1,80,0 0,0/00/- IS A CONCOCTED ONE AND THE ASSESSEE HAS FAILED TO DISC HARGE THE ONUS OF EXPLANATION FOR THE SAME. HENCE, THE AMOUNT OF RS.18,00,00,000/- IS BEING ADDED BACK TO THE TOTAL TAXABLE INCOME OF THE ASSESSEE ON THE GROUNDS OF UNEXPLAINE D INCOME. PENALTY PROCEEDING U/S 271(L)(C) OF I. T. ACT ARE B EING INITIATED FOR FURNISHING INACCURATE PARTICULARS OF HIS INCOME . DISCUSSION & DECISION THE FACTS OF THE CASE, THE SUBMISSIONS OF THE AR AN D THE FINDING OF THE AO WERE EXAMINED. THE BRIEF FACTS OF THE CAS E ARE THAT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT S IGNED AN AGREEMENT WITH ONE TRUE VALUE CONTRACTORS (P) LTD ( NOW JAFFNA CONTRACTORS) FOR SALE OF PLOT NO 5, ROAD H-9 IN THE RESIDENTIAL COLONY- DLF QUTUB ENCLAVE, DISTT. GURGAON FOR AN AM OUNT OF RS.9 CRORE. THE APPELLANT RECEIVED RS.1.80 CRORE AS EARNEST/ADVANCE MONEY AS DETAILED IN CLAUSE 1 OF TH E AGREEMENT TO SELL. HOWEVER, SUBSEQUENTLY, THE DEAL FELL THROUGH AND THE BUYER TRUE VALUE CONTRACTORS AGREED TO FORF EIT THE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 20 AMOUNT OF RS.1.80 CRORE PAID AS EARNEST MONEY. THES E FACTS WERE BROUGHT TO THE NOTICE OF THE AO APPELLANT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT SUB MITTED THAT PAYMENT WAS MADE BY THE BUYER FROM HIS AXIS BANK AC COUNT THROUGH RTGS IN 4 TRANCHES AND WAS CREDITED IN THE BANK ACCOUNT OF THE SELLER APPELLANT. THE AO MADE INDEPE NDENT INQUIRIES. SUMMONS WERE ISSUED TO THE BUYER TO VERI FY THE FACTS DETAILED BY THE ASSESSEE BUT WERE NOT RESPONDED TO. INFORMATION U/S 133(6) WAS ALSO CALLED FOR FROM THE MANAGER, AXIS BANK TO VERIFY THE BANK STATEMENT OF THE BUYER . THE MANAGER INFORMED THAT ACCOUNT NO 913020032425869 BE LONGED TO M/S EXCEL BUILDTECH (P) LTD IN THE NAME OF BASHE RSHAR NATH RESIDENT OF 4132, NASA BAZAR, NEW DELHI. A PERUSAL OF THE ACCOUNT SHOWED THERE WAS NO ENTRY OF RS 1.80 CRORE. THE AO CONFRONTED THIS FACT TO THE APPELLANT AND SUBSEQUEN TLY MADE AN ADDITION ON THIS ACCOUNT HOLDING THAT THE AMOUNT OF RS 1.80 CRORE WAS UNEXPLAINED INCOME OF THE APPELLANT. BEFORE ME, DURING THE COURSE OF APPELLATE PROCEEDIN GS, THE APPELLANT, THROUGH HIS AR, CONTENDED THAT THE ADVAN CE MONEY WAS A BANK TO BANK TRANSFER VIA RTGS AND WAS DETAIL ED IN THE AGREEMENT TO SELL. THE APPELLANT ALSO FILED AN APPL ICATION FOR ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A WHI CH I HAVE ADMITTED AS DISCUSSED IN PARA 4 OF MY ORDER. THE AP PELLANT FILED THE FOLLOWING ADDI110NAL EVIDENCE: CERTIFICATES ISSUED BY SBI CERTIFYING THE PAYMENT T HOUGH RTGS AMOUNT OF RS 1.80 CRORE BY TRUE VALUE CONTRACT ORS (P) LTD. ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 21 THE REPORT FROM THE MINISTRY OF COMPANY AFFAIRS SHO WING THE NAME/ADDRESS OF THE COMPANY TRUE VALUE CONTRACT ORS (P) LTD (NOW CONTRACTORS). AFFIDAVIT OF TRUE VALUE CONTRACTORS (P) LTD CERTIFY ING THE FORFEITURE EARNEST MONEY PAID BY THEM TO THE APPELL ANT. THE COMMENTS OF THE AO WERE REQUISITIONED ON THE AP PLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE. I HAVE ALREAD Y ADJUDICATED ON THE ADMISSIBILITY APPLICATION IN PARA 4 OF MY OR DER. HERE, I WILL EXAMINE THE ADDITIONAL GROUNDS ON MERITS. THE AO'S COMMENTS ON THE MERITS OF THE ADDITIONAL EVIDENCE A RE REPRODUCED AS UNDER: 4. AS PER THE SUBMISSION OF THE ASSESSEE IN HIS LET TER DURING THE APPEAL VIDE HIS LETTER DATED 23/05/2017, ADDITI ONAL EVIDENCES ARE: C) CERTIFICATE ISSUED BY THE SBI. D) STATEMENT OF THE ACCOUNT OF THE ASSESSEE. 5. WHILE MAKING ADDITION OF RS. 1,80,00,000/- AS IT WAS MENTIONED IN THE ASSESSMENT ORDER ASSESSEE WAS NOT ABLE TO PROVE THE GENUINENESS OF THE TRANSACTION WITH M/S T RUE VALUE CONTRACTORS PVT. LTD./JAFFFA CONTRACTORS PVT. LTD. ALSO THE BANK ACCOUNT/DETAILS PROVIDED BY THE ASSESSEE FOR THE M/ S TRUE VALUE CONTRACTORS PVT. LTD./JAFFFA CONTRACTORS PVT. LTD. I.E. 913020032425869 WAS FOUND WRONG AND THE SAME WAS FO UND TO BE THE A/C OF M/S EXCEL BUILDTECH PVT. LTD. 6. ALSO THE AGREEMENT TO SELL SUBMITTED BY THE ASSE SSEE WITH RESPECT OF THE SALE OF THE PROPERTY WAS WITHOUT ANY LEGAL STAMP PAPER, WHICH RAISED DOUBT ON THE VERACITY OF THE CL AIM OF THE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 22 ASSESSEE. ALSO THE ASSESSEE HAD NOT CREDITED THE AS SET ACCOUNT OR THE CAPITAL ASSET ACCOUNT WITH THE AMOUNT OF THE FORFEITURE OF THE ADVANCE; INSTEAD THE ASSESSEE HAS SHOWN THE SAM E IN HIS DRAWINGS ACCOUNT. 7. NOW ASSESSEE IS SUBMITTING THE CERTIFICATE ISSU ED BY THE SBI AND HIS STATEMENT OF THE ACCOUNT, BUT STILL THE SAME ARE NOT ACCEPTABLE AS THESE SUBMISSIONS ARC READILY AVAILAB LE WITH THE BANK AND COULD HAVE BEEN SUBMITTED DURING THE ASSES SMENT. AFTER PROVIDING REASONABLE OPPORTUNITIES TO THE ASS ESSEE HE FAILED TO PROVIDE THE ABOVE MENTIONED SUBMISSIONS. SO, THE ABOVE MENTIONED AMOUNT I.E. RS. 1,80,00,000/- WAS A DDED BACK TO THE TAXABLE INCOME OF THE ASSESSEE. 8. ALSO, ASSESSEE'S CONTENTION THAT AO ASKED FOR T HE SUBMISSIONS AT THE LAST MOMENT, DOESN'T HOLD GROUND AS ITS ASSESEE'S OWN ACCOUNT, SO ASSESSEE INTENTIONALLY DE LAYED THE ASSESSMENT PROCEEDINGS TO THE LAST HOUR SO THAT PRO PER INVESTIGATION OR INQUIRY COULD NOT BE MADE. FROM A PERUSAL OF THE ABOVE, IT IS CLEAR THAT THE A O HAS REFRAINED, COMMENTING ON THE MERITS OF ADDITIONAL D OCUMENTS FILED AND HAS .SIMPLY STATED THAT THE CERTIFICATE O F SBI COULD HAVE BEEN FILED DURING ASSESSMENT PROCEEDINGS AND A S IT WAS NOT FILED THEN, AND HENCE IT MAY NOT BE ADMITTED UN DER RULE 46A. THE AO'S COMMENTS DO NOT CONTROVERT THE CREDIB ILITY OF THE BANK CERTIFICATES AND REFRAINING TO COMMENT UPON TH IS RELEVANT DOCUMENT SUGGESTS A TACIT ACCEPTANCE OF THE CREDIBI LITY OF THE DOCUMENTS SO FILED. BE THAT AS IT MAY I WILL NOW EX AMINE THE CLAIM OF THE APPELLANT VIS-A-VIS, THE FINDING OF TH E AO. THE APPELLANT HAS CLAIMED THAT THE AO HAS WRONGLY H ELD THAT THE AMOUNT OF RS 1.80 CRORE IS UNEXPLAINED INCOME OF TH E APPELLANT. THE AR HAS CLAIME OF EVIDENCES HAVE BEEN FILED TO SUBSTANTIATE THE CL AIM THAT THE RECEIPT OF RS 1.80 CRORE IS THE NATURE OF FORFEITED EARNEST/ADVANCE MONEY FOR SALE OF QUTAB ENCLAVE PRO PERTY. THE APPELLANT FIRST DREW MY ATTENTIO RECORD BEFORE THE AO I.E. AN AGREEMENT TO SELL BETWEEN THE APPELLANT AND THE BUYER TRUE VALUE CONTRACTORS(P) LTD WHICH CLEARLY SHOWS T HAT RS 1.80 CRORE WERE PAID BY THE BUYER TO THE APPELLANT AS EARNEST MONEY THROUGH RTGS FRO ACCOUNTS THE RELEVANT PAGE OF AGREEMENT TO SELL IS SCANNED AND REPRODUCED AS ITA NO 23 THE APPELLANT HAS CLAIMED THAT THE AO HAS WRONGLY H ELD THAT THE AMOUNT OF RS 1.80 CRORE IS UNEXPLAINED INCOME OF TH E APPELLANT. THE AR HAS CLAIME D, ON BEHALF OF THE APPELLANT THAT ALL MANNER OF EVIDENCES HAVE BEEN FILED TO SUBSTANTIATE THE CL AIM THAT THE RECEIPT OF RS 1.80 CRORE IS THE NATURE OF FORFEITED EARNEST/ADVANCE MONEY FOR SALE OF QUTAB ENCLAVE PRO PERTY. THE APPELLANT FIRST DREW MY ATTENTIO N TO THE VARIOUS EVIDENCES ON RECORD BEFORE THE AO I.E. AN AGREEMENT TO SELL BETWEEN THE APPELLANT AND THE BUYER TRUE VALUE CONTRACTORS(P) LTD WHICH CLEARLY SHOWS T HAT RS 1.80 CRORE WERE PAID BY THE BUYER TO THE APPELLANT AS EARNEST MONEY THROUGH RTGS FRO M THEIR AXIS BANK ACCOUNTS THE RELEVANT PAGE OF AGREEMENT TO SELL IS SCANNED AND REPRODUCED AS UNDER(OVERJEAF): ITA NO . 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA THE APPELLANT HAS CLAIMED THAT THE AO HAS WRONGLY H ELD THAT THE AMOUNT OF RS 1.80 CRORE IS UNEXPLAINED INCOME OF TH E APPELLANT. D, ON BEHALF OF THE APPELLANT THAT ALL MANNER OF EVIDENCES HAVE BEEN FILED TO SUBSTANTIATE THE CL AIM THAT THE RECEIPT OF RS 1.80 CRORE IS THE NATURE OF FORFEITED EARNEST/ADVANCE MONEY FOR SALE OF QUTAB ENCLAVE PRO PERTY. THE N TO THE VARIOUS EVIDENCES ON AN AGREEMENT TO SELL BETWEEN THE APPELLANT AND THE BUYER TRUE VALUE CONTRACTORS(P) LTD WHICH CLEARLY SHOWS T HAT RS 1.80 CRORE WERE PAID BY THE BUYER TO THE APPELLANT AS M THEIR AXIS BANK ACCOUNTS THE RELEVANT PAGE OF AGREEMENT TO SELL IS SCANNED LETTER FROM TRUE VALUE CONTRACTORS DETAILING T FORFEITURE OF RS 1.8 REPRODUCED AS UNDER(OVERLEAF): COPY OF THE LEDGER ACCOUNT OF TRUE VALUE CONTRACTOR S REFLECTING A JOURNAL ENTRY OF RS 1.80 CRORE AS TRAN SFERRED AMOUNT ON 31.03.2014. COPY OF DRAWINGS ACCOUNT OF CP CHAWLA ALSO R CREDIT OF THE SAID AMOUNT. THE CREDIT BALANCE IN TH IS ACCOUNT WAS THEN TRANSFERRED TO THE CAPITAL ACCOUNT OF CP CHAWLA. ITA NO 24 LETTER FROM TRUE VALUE CONTRACTORS DETAILING T FORFEITURE OF RS 1.8 0 CRORE. A SCANNED COPY OF THE LETTER IS REPRODUCED AS UNDER(OVERLEAF): COPY OF THE LEDGER ACCOUNT OF TRUE VALUE CONTRACTOR S REFLECTING A JOURNAL ENTRY OF RS 1.80 CRORE AS TRAN SFERRED AMOUNT ON 31.03.2014. COPY OF DRAWINGS ACCOUNT OF CP CHAWLA ALSO R CREDIT OF THE SAID AMOUNT. THE CREDIT BALANCE IN TH IS ACCOUNT WAS THEN TRANSFERRED TO THE CAPITAL ACCOUNT OF CP ITA NO . 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA LETTER FROM TRUE VALUE CONTRACTORS DETAILING T HE FACT OF 0 CRORE. A SCANNED COPY OF THE LETTER IS COPY OF THE LEDGER ACCOUNT OF TRUE VALUE CONTRACTOR S REFLECTING A JOURNAL ENTRY OF RS 1.80 CRORE AS TRAN SFERRED COPY OF DRAWINGS ACCOUNT OF CP CHAWLA ALSO R EFLECTING CREDIT OF THE SAID AMOUNT. THE CREDIT BALANCE IN TH IS ACCOUNT WAS THEN TRANSFERRED TO THE CAPITAL ACCOUNT OF CP ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 25 COPY OF AXIS BANK ACCOUNT OF TRUE VALUE CONTRACTORS (P) LTD SHOWING A DEBIT OF RS 1.80 CRORE (REF PAGE 13 O F ASSESSMENT ORDER) REGARDING THE INFORMATION OBTAINED BY THE AO FROM T HE MANAGER AXIS BANK, THE APPELLANT STATED THAT IT WAS INFORMA TION OF THE WRONG BANK ACCOUNT. FURTHER, THIS FACT WAS CONFRONT ED ONLY ON 28.12.2016 AND THE APPELLANT WAS REQUIRED TO REBUT IT BY 30.12.2016. THIS COULD NOT BE DONE ON ACCOUNT OF PA UCITY OF TIME AND WAS THEREFORE FILED AS ADDITIONAL EVIDENCE DURING THE APPELLATE PROCEEDINGS. THE ADDITIONAL EVIDENCE WAS EXAMINED. IT IS NOTED THAT THE SBI HAS CERTIFIED THE RECEIPT OF RS 1.80 CRORES IN THE SBI ACCOUNT OF THE APPELLANT. A SCANNED COPY OF THE CERTIFICATE IS DETAILED AS UNDER (OVERLEAF): ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 26 THE SBI HAS ALSO GIVEN A DETAILED CERTIFICATE OF TH E TRANSACTION WITH A DETAILED NARRATION WHICH VERY CLEARLY STATES THAT THE AMOUNTS HAVE EMANATED FROM THE BANK ACCOUNT OF TRUE VALUE CONTRACTORS (P) LTD. A SCANNED COPY OF THE CERTIFIC ATE IS REPRODUCED AS UNDER (OVERLEAF): ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 27 FROM A PERUSAL OF THE ABOVE CERTIFICATE OF SBI, IT IS APPARENT THAT THE AO FELL INTO ERROR IN HOLDING THAT THE AMO UNT OF RS 1.80 CRORE DID NOT EMANATE FROM THE BANK ACCOUNT OF TRUE VALUE CONTRACTORS (P) LTD AND WAS HENCE UNEXPLAINED INCOM E OF THE APPELLANT. AN AFFIDAVIT FROM JAFFNA CONTRACTORS (P) LTD (PREVIOUSLY TRUE VALUE CONTRACTORS (P) LTD. WAS ALS O FILED TO AUTHENTICATE CLAIM. IN NORMAL CIRCUMSTANCES, AN AFF IDAVIT DOES NOT HAVE ANY EVIDENTIARY VALUE. HOWEVER, THE SBI CE RTIFICATES CORROBORATE THE DEPOSITION IN THE AFFIDAVIT AND THE AFFIDAVIT CAN THEREFORE NOT BE BRUSHED ASIDE. ALSO, THE AO HAS FA ILED TO CONTROVERT THE VERACITY AND CREDIBILITY OF THE SBI CERTIFICATES FURNISHED BY THE APPELLANT AND REPRODUCED SUPRA. IT IS APPARENT THAT THE AO RELIED UPON A BANK CERTIFICATE PERTAINI NG TO THE ACCOUNT OF ONE EXCEL BUILDTECH INSTEAD OF THE BANK ACCOUNT OF TRUE VALUE CONTRACTORS (P) LTD. AS THIS FACT WAS CO NFRONTED TO THE APPELLANT AT THE FAG END OF THE ASSESSMENT PROC EEDINGS AND AS HE WAS ALLOWED ONLY A DAY TO REBUT THE SAME, THE ERROR AND THE CONSEQUENT CONCLUSIONS OF THE AO WERE BASED ON A FACTUALLY INCORRECT PREMISE. THIS ERROR CAME TO LIGHT ONLY AF TER THE APPELLANT FURNISHED THE SBI BANK CERTIFICATES CERTI FYING THAT THE PAYMENT OF RS 1.80 CRORE, CREDITED IN THE BANK ACCO UNT OF THE APPELLANT VIA RTGS WAS FROM TRUE VALUE CONTRACTORS (P) LTD. ALSO, THE AO'S CLAIM THAT THIS AMOUNT OF FORFEITURE IS NOT REFLECTED IN THE BOOKS OF ACCOUNT OF THE APPELLANT IS FACTUALLY INCORRECT. IT IS CLEARLY CREDITED IN THE BANK ACCOU NT OF THE APPELLANT AND IS FURTHER TRANSFERRED TO THE CAPITAL ACCOUNT OF THE APPELLANT AS DISCUSSED SUPRA. HERE, IT IS PERTINENT TO OBSERVE THE PROVISIONS OF SECTION 51 OF THE INCOME TAX ACT ARE APPLICABLE FOR THE A.Y 2014-15, WHICH IS THE YEAR B EFORE ME IN APPEAL, WHEREIN IT IS MANDATED THAT THE ADVANCE MON EY ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 28 FORFEITED WILL BE REDUCED FROM COST OF ACQUISITION AT THE TIME OF THE SALE OF PROPERTY. THE NEW PROVISIONS UNDER SECT ION 56(2)(IX), APPLICABLE FROM THE A.Y 2015-16, HOWEVER MANDATE THAT SUCH A FORFEITURE BE TREATED AS 'INCOME FROM O THER SOURCES' IN THE HANDS OF THE ASSESSEE. THIS LATTER PROVISION IS NOT APPLICABLE IN THE INSTANT YEAR. IN THE LIGHT OF THE ABOVE DETAILED DISCUSSION AND A FTER DUE EXAMINATION OF ALL EVIDENCES ON RECORD I HOLD THAT THE ADDITION BY THE AO HAS BEEN MADE ON A WRONG FACTUAL PREMISE. THIS ADDITION IS ACCORDINGLY DELETED. 8. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 9. IN NUTSHELL, THE ASSESSEE RECEIVED AN AMOUNT OF RS.1,80,00,000/- ON ACCOUNT OF SALE OF PROPERTY AND RECEIVED MONEY FROM ONE ENTITY NAMELY TRUE VALUE CONTRACTORS PVT. LTD. WHOSE NAME HAS BEEN CHANGED TO JAFFNA CONTRACTORS. THE AMOUNT HAS BEEN DULY REFL ECTED IN THE BANK ACCOUNT OF THE ASSESSEE AND A CERTIFICA TE FROM THE STATE BANK OF INDIA THAT THE PAYMENTS TO THE TU NE OF RS.1,80,00,000/- HAVE BEEN RECEIVED FROM AXIS BANK INTO THE ACCOUNT OF THE ASSESSEE. THE COPY OF THE BANK STATEMENTS HAVE BEEN DULY PROVIDED TO THE REVENUE AUTHORITIES. THE AMOUNT FORFEITED SUBSEQUENTLY OF RS.1,80,00,000/- IS NOT TAXABLE UNDER INCOME FROM OTHER SOURCES U/S 56(2)(IX) IN THE ASSESSMENT YEAR 2014- 15 BUT IS A SUBJECT MATTER OF PROVISIONS OF SECTION 51 OF THE ACT EFFECTIVE FOR THE YEAR UNDER CONSIDERATION. HEN CE, WE ITA NO. 3682 & 5231/DEL/2019 CHANDER PRAKASH CHAWLA 29 DECLINE TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) ON THIS ISSUE. THE APPEAL OF THE REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE AND T HE APPEAL OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2020. SD/- SD/- (AMIT SHUKLA) (DR . B. R. R. KUMAR) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 27/11/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR