SHRI NANDKUMAR RATANLAL KOTHARI, Nagpur V. INCOME TAX OFFICER WARD-7(1), Nagpur

ITA 431/NAG/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9654 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 19-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Unexplained cash credit; Business income
• Section: 143(3); 68; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.431/NAG./2014 ( ASSESSMENT YEAR : 200809 ) SHRI NANDKUMAR RATANLAL KOTHARI S12, C/O PLASTOMATIC INDUSTRIES MIDC INDUSTRIAL AREA, NAGPUR 440 013 PAN ACSPK0308H APPELLANT V/S INCOME TAX OFFICER WARD7(1), NAGPUR .... RESPONDENT ASSESSEE BY : SHRI K.P. DEWANI REVENUE BY : SHRI A.R. NINAWE DATE OF HEARING 27.06.2017 DATE OF ORDER 30.06 .2017 O R D E R PER AMARJIT SINGH, J.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE IMPUGNED ORDER DATED 2 ND JULY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, FOR THE ASSESSMENT YEAR 2008 09. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED BELOW: 1. THE LEARNED A.O. ERRED IN ASSESSING SUM OF ` 55,23,000 IN RESPECT TO AMOUNT RECEIVED FROM PARTIES AND INTERES T FROM BANK. 2. THE ADDITION MADE BY A.O. AT ` 55,23,000 IS JUSTIFIED, UNWARRANTED AND EXCESSIVE. 3. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING TH E ADDITION OF ` 55,23,000 MADE BY THE A.O. HOLDING THAT APPELLANT F AILED TO EXPLAIN THE SOURCE OF CASH IN THE BANK ACCOUNT. 2 SHRI NANDKUMAR RATANLAL KOTHARI 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF ` 1,61,830. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) DETERMINING TOTAL INCOME TO THE TUNE OF ` 74,54,270 BY ASSESSING OFFICER, VIDE ORDER DATED 2 8 TH DECEMBER 2010. THE ASSESSEE, IN THE COURSE OF ASSESSMENT PRO CEEDINGS, HAD PRODUCED CASH BOOK AND LEDGER EXPLAINING VARIOUS TR ANSACTIONS AS FOUND IN BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE IN SUPPORT OF TRANSACTIONS IN BANK ACCOUNT HAS ALSO SUBMITTED COP IES OF AGREEMENTS TO SALE AND PURCHASE ALONG WITH CANCELLATION OF AGR EEMENTS WITH RESPECTIVE PARTIES BEFORE THE ASSESSING OFFICER. TH E ASSESSING OFFICER WANTED TO PRODUCE THE PARTIES WITH WHOM ASSESSEE HA S TRANSACTIONS FOR SALE / PURCHASE OF IMMOVABLE PROPERTY. HOWEVER, AFORESAID PARTIES WERE NOT AVAILABLE AT THE RELEVANT TIME AND ASSESSE E HAS SUBMITTED AFFIDAVIT OF ONE OF THE PARTIES IN SUPPORT OF TRANS ACTION IN RESPECT TO AGREEMENT FOR SALE OF PROPERTY. THE ASSESSEE HAD RE CEIVED SUM OF ` 5,23,000 AS INTEREST AND SIMILAR INTEREST AND OTHER CHARGES WAS PAID TO BANK AND, THEREFORE, NO INTEREST INCOME WAS SHOWN I N THE RETURN. THE ASSESSING OFFICER HAS ASSESSED THE SAID SUM OF ` 5,23,000 AS INTEREST INCOME ALONG WITH SUM OF ` 50,00,000 SHOWN TO HAVE BEEN RECEIVED FOR TRANSACTIONS OF PROPERTY. HENCE, THE ASSESSING OFFICER HAS MADE 3 SHRI NANDKUMAR RATANLAL KOTHARI AGGREGATE ADDITION OF ` 55,23,000. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED COMMISSIONER (APPEALS) CONFIRMED THE OR DER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, SUBMISSIONS OF THE APPELLANT AND REMAND REPORT AND COUNTER REPL Y OF THE APPELLANT. IT IS EVIDENT THAT THE APPELLANT HAS NOT BEEN ABLE TO PROPERLY EXPLAIN THE SOURCE OF CASH CREDIT APPEARIN G IN HIS BOOKS OF ACCOUNT. SUFFICIENT EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO COMPREHENSIVELY ESTABLISH THAT THE CASH CREDITS APP EARING IN THE BOOKS OF ACCOUNT OF THE APPELLANT TO THE EXTENT OF RS. 50 LACS ARE NOT PROPERLY EXPLAINED. 7.1 IN RESPECT OF THE INDUSTRIAL PLOT, VARIOUS ISSU ES HAVE BEEN RAISED BY THE AO WHICH COULD NOT BE VALIDLY EXPLAIN ED BY THE APPELLANT EITHER DURING THE COURSE OF ASSESSMENT PR OCEEDINGS OR DURING APPELLATE PROCEEDINGS. IT IS SEEN THAT THE A LLOTMENT LETTER IN RESPECT OF THE SAID PLOT WAS ISSUED BY MIDC ON 5 TH MARCH 2007 AND THERE WERE CERTAIN CONDITIONS WAS ONLY AFTER TH E COMPLETION OF THE ABOVE CONDITION THAT THE APPELLANT WOULD BECOMI NG THE LEGAL OWNER OF THE SAID PROPERTY. THE APPELLANT COULD NOT BRING ON RECORD ANY EVIDENCE TO ESTABLISH THAT IT HAD INDEED SATISFIED THE STIPULATED CONDITION AND HAD BECOMING THE OWNER OF THE SAID PROPERTY AND COULD ENTER INTO FURTHER AGREEMENT TO SELL OFF THE SAID PROPERTY TO THE SAID PURCHASERS. IN A WAY THER EFORE, THE APPELLANT WAS INCOMPETENT TO ENTER INTO THE SAID AG REEMENT FOR TRANSFER OF HIS INTEREST IN THE SAID PLOT EVEN BEFO RE HE HAD EXECUTED THE LEASE AGREEMENT WITH MIDC. 7.2 IT IS VERY CLEARLY MENTIONED IN THE ALLOTMENT L ETTER OF MIDC TO THE APPELLANT THAT THE APPELLANT SHALL NOT DIRECTLY OR INDIRECTLY TRANSFER THE SAID PROPERTY WITHOUT THE PREVIOUS CON SENT OF THE MIDC. NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO EST ABLISH THAT THE SAID CONSENT WAS TAKEN. AS A MATTER OF FACT ONE OF THE STATED REASONS FOR THE CANCELLATION OF THE AGREEMENT IS TH AT THE APPELLANT COULD NOT TAKE CONSENT FROM THE CORPORATION AND THE REFORE THE AGREEMENT HAD TO BE CANCELLED. THIS EXPLANATION DOE S NOT HOLD GROUND AS ANY PRUDENT BUSINESSMAN WOULD HAVE PERUSE D THE ALLOTMENT LETTER OF MIDC BEFORE ENTERING INTO THE A GREEMENT WITH 4 SHRI NANDKUMAR RATANLAL KOTHARI THE APPELLANT WHEREIN IT WAS CLEARLY MENTIONED THAT THE APPELLANT SHOULD OBTAIN PRIOR CONSENT OF THE CORPORATION. 7.3 THERE IS ALSO THE MERIT IN THE CONTENTION OF LD . AO THAT THE PLOT WHICH WAS ALLOTTED TO HIM FOR AN AMOUNT OF RS. 4 LAC AGAINST THE APPLICATION DATED 29-09-2006 COULD EVENTUALLY B E SOLD AT RS. 40 LACS WITHIN A PERIOD OF SIX MONTHS. DURING THE C OURSE OF APPELLATE PROCEEDINGS THE APPELLANT HAS NOT BEEN AB LE TO VALIDLY EXPLAIN ANY OF THE ABOVE ISSUES, WHICH CLEARLY INDI CATE THAT THE TRANSACTION ENTERED INTO BY THE APPELLANT WAS OF A QUESTIONABLE NATURE. 7.4 THE MAIN CONTENTION OF THE APPELLANT IS THAT TH E SAID AMOUNT OF RS. 30 LACS HAS BEEN PAID BACK BY THE APPELLANT BY WAY OF CHEQUE SUBSEQUENT TO THE CANCELLATION OF THE AGREEM ENT. HOWEVER NOT MUCH CAN BE READ INTO THE SAID CONTENTION OF TH E APPELLANT AS IT IS POSSIBLE THAT THE SAID AMOUNT OF RS. 30 LACS PAID BY THE APPELLANT MAY BE FOR SOME OTHER REASON. IT IS PRECI SELY FOR THIS REASON THAT THE LD. AO HAD REQUIRED THE APPELLANT T O PRODUCE THE SAID PARTY VIZ. SHRI PRAVATA KUMAR NIRANJAN BHOI FO R EXAMINATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS SO AS T O COME TO A CONCLUSION REGARDING THE GENUINENESS OF ANY CASH RE CEIVED FROM THE SAID PARTY AND THE AMOUNT CLAIMED TO HAVE BEEN PAID TO THE SAID PARTY BY CHEQUE. THE EXAMINATION OF THE SAID I NDIVIDUAL WAS VITAL SO AS TO COME TO A CONSIDERED CONCLUSION REGA RDING THE GENUINENESS OF THE CASH CREDITS AND THE REASONS FOR WHICH THE SAID AMOUNT OF RS. 30 LACS HAS BEEN PAID BY THE APP ELLANT. 7.5 HOWEVER, THE APPELLANT COULD NOT PRODUCE MR. BH OI BEFORE THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FOR THIS REASON THAT THE MATTER WAS REMANDED BACK TO TH E LD. AO DURING THE APPELLATE PROCEEDINGS SO AS TO ALLOW THE APPELLANT TO PRODUCE THE SAID PARTY BEFORE THE LD. AO IN REMAND PROCEEDINGS. HERE AGAIN THE APPELLANT COULD NOT PRODUCE THE SAID PARTY BEFORE THE LD. AO. IT IS EVIDENT THEREFORE THAT THE APPELL ANT HAS BEEN UNABLE TO DISCHARGE THE MOST BASIC ONUS CAST UPON H IM IN RESPECT OF CASH CREDITS VIZ. TO ESTABLISH THE IDENTITY OF T HE CREDITOR, ESTABLISH THE GENUINENESS OF THE TRANSACTION AND CR EDITWORTHINESS OF THE CREDITOR. IT IS IMPORTANT TO NOTE THAT THE I DENTITY OF SHRI BHOI HAS NOT BEEN CLEARLY ESTABLISHED AS HE WAS NEV ER PRODUCED BEFORE THE LD. AO. ONLY HIS AFFIDAVIT WAS FILED WHE REIN A CERTAIN ADDRESS HAS BEEN GIVEN. THE CREDITWORTHINESS IS ALS O 1UESTIONABLE. THE PAN OF THE SAID SHRI BHOI WAS NEV ER PRODUCED BEFORE THE LD. AO. IF AN AMOUNT OF RS. 30 LACS HAS BEEN GIVEN IN CASH BY THE SAID PARTY TO THE APPELLANT, AND IF THE PAN OF THE SAID PARTY IS ALSO NOT PROVIDED TO THE LD. AO, THE CREDI TWORTHINESS OF THE SAID PARTY DOES NOT STAND ESTABLISHED. THE ONUS WAS ON THE APPELLANT TO SUBMIT HIS ACKNOWLEDGEMENT OF RETURN O F INCOME, 5 SHRI NANDKUMAR RATANLAL KOTHARI PAN, BALANCE SHEET, BANK STATEMENT ETC. SO AS TO ES TABLISH HIS CREDITWORTHINESS. THE SAME WAS NEVER DONE. THE FACT THAT RS. 30,00,000/- WAS RECEIVED BACK IN CHEQUES CANNOT ABS OLVE THE APPELLANT OF REQUIREMENTS OF SECTION 68. ALSO, THE SAID AMOUNT MAY HAVE BEEN RECEIVED BY CHEQUE FOR ENTIRELY DIFFE RENT SET OF REASONS WHICH THE ID. AO COULD NOT VERIFY AS THE SA ID PARTY WAS NEVER PRODUCED. SINCE THE LD. AO COULD NEVER EXAMIN E THE SAID SHRI BHOI, THE GENUINENESS OF THE TRANSACTION IS UN DER QUESTION. THE ONUS CAST UPON THE APPELLANT AS PER THE PROVISI ONS OF SECTION 68 HAS NOT BEEN DULY DISCHARGED. THE ACTION OF THE LD. AO IN ADDING THE AMOUNT OF CLAIMED TO HAVE BEEN RECEIVED IN CASH FROM THE SAID PARTY CANNOT BE QUESTIONED AND HE HAS BEEN CORRECTLY ADDED THE SAID AMOUNT OF RS. 30,00,000/- TO THE INC OME OF THE APPELLANT AS UNEXPLAINED CASH CREDIT. 7.6 THE SITUATION IS NOT VERY DIFFERENT IN RESPECT OF THE SAID LAND TRANSACTION ENTERED INTO BY THE APPELLANT IN RESPEC T OF BHILGAON PLOT. HERE ALSO SERIOUS DEFECTS IN THE AGREEMENT TO SALE HAVE BEEN POINTED OUT BY THE LD. AO WHEREIN IT IS SEEN THAT T HE NAME OF GENERAL POWER OF ATTORNEY APPEARS IN THE DOCUMENT A S THE OWNER OF THE SAID PROPERTY. THIS WOULD NEVER HAPPEN IN A GENUINE LAND TRANSACTION. NO VALID EXPLANATION FOR THIS LACUNA H AS BEEN GIVEN BY THE APPELLANT. ALSO THE APPELLANT COULD NEVER PR ODUCE THE SAID PARTY BEFORE THE LD. AO SO THAT HE COULD EXAMINE TH E GENUINENESS OF THE TRANSACTION OR TO ESTABLISH THE CREDITWORTHI NESS AND THE IDENTITY OF THE SAID PARTIES. 8. THUS IT IS EVIDENT THAT THE APPELLANT HAS FAILED TO EXPLAIN THE SOURCE OF CASH IN THE BANK ACCOUNT AND THEREFORE TH E ADDITION MADE BY THE LD. AO AMOUNTING TO RS.5523000/-INCLUDI NG THE SUM OF RS. 523000/- (CLAIMED BY HIM TO BE INTEREST EARN ED BUT NOT DISCLOSED IN HIS RETURN OF INCOME), IS HEREBY CONFI RMED. THESE GROUNDS ARE THEREFORE DISMISSED. THE ASSESSEE BEING AGGRIEVED BY THE AFORESAID ORDER OF THE LEARNED COMMISSIONER (APPEALS), FILED APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR ASSESSEE SUBMITTED BEFORE U S THAT THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDIN GS HAD FURNISHED CASH BOOK AND LEDGER ACCOUNTS ALONG WITH SUPPORTING DOCUMENTS WHERE FROM THE ENTIRE DEPOSIT IN THE BANK ACCOUNT WITH ICICI BANK STOOD EXPLAINED AND THERE WAS NO CA SE FOR 6 SHRI NANDKUMAR RATANLAL KOTHARI MAKING ANY ADDITION ON ACCOUNT OF UNEXPLAINED DEPOS IT AT THE HANDS OF ASSESSEE. IN THE CASE OF ASSESSEE BOOKS OF ACCOUNT HAVE NOT BEEN FAULTED OR REJECTED. BUSINESS INCOME IS AC CEPTED AND DETERMINED AS PER BOOKS OF ACCOUNT. (P-1 - 115) [VO L-LL] THE AGREEMENT OF SALE DATED 12/4/2007 PLACED BEFORE A.O. HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. IT IS LEGA L EVIDENCE AS REGARD TO RECEIPT OF RS.30 LACS IN CASH ON 12/4/200 7 BEING AVAILABLE TO EXPLAIN THE DEPOSIT IN BANK ACCOUNT. T HE REJECTION OF LEGAL EVIDENCE BY A.O. IS FOR NO VALID JUSTIFICATIO N. (P- 21 - 31) [VOL. - I] (P- 23) THE AMOUNT RECEIVED AS ADVANCE FOR SALE OF PROPERTY HAS BEEN REFUNDED BY ACCOUNT PAYEE CHEQUE DURING THE PREVIOU S YEAR UNDER CONSIDERATION AS IS EVIDENT AS PER THE LEDGER ACCOU NT. THE PAYMENT IS MONEY FLOWN FROM THE BANK ACCOUNT OF ASS ESSEE. THE AFORESAID FACTUAL SUBMISSION HAS ALSO NOT BEEN FOUN D TO BE INCORRECT OR FALSE. REPAYMENT OF MONEY BY CHEQUE IS NOT DISPUTED BY A.O. BOOKS OF ACCOUNT OF ASSESSEE ARE ACCEPTED A ND NOT REJECTED. ON THE ABOVE UNDISPUTED FACTUAL POSITION ADDITION MADE BY A.O. AT THE HANDS OF ASSESSEE IS UNJUSTIFIED AND UNSUSTAINABLE. (LEDGER A/C) (P- 90-91) (P-106) [VOL.- II] THE AFFIDAVIT OF SHRI PRAVATAKUMAR NARAYAN BHOI PLA CED BEFORE A.O. HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. T HE CONTENTS OF THE AFFIDAVIT HAVE GONE UNREBUTTED AND HAVE TO BE T AKEN AS TRUE AND CORRECT. RELIANCE FOR THE SAME IS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. VS. CIT, 30 ITR 181 (SC). (P-32 - 35) [VOL. - I] THE ASSESSEE HAD SUBMITTED AGREEMENT FOR PURCHASE O F PROPERTY ON 25/9/2006 WHICH HAS BEEN CANCELLED DURING THE PR EVIOUS YEAR UNDER CONSIDERATION. IN TERMS OF CANCELLATION DEED ASSESSEE HAD RECEIVED REFUND OF ADVANCE GIVEN AT RS. 20 LACS ALO NG WITH INTEREST OF RS. 5,23,000/-. THE AGREEMENT OF PURCHA SE HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. THE ADDITION O F RS. 20 LACS BEING REFUND OF ADVANCE AND INTEREST OF RS. 5,23,00 0/- HAS BEEN SUBJECTED TO TAX AT THE HANDS OF ASSESSEE IN TERMS OF AGREEMENT OF PURCHASE ITSELF. A.O. HAVING DETERMINED INCOME O N THE BASIS OF AGREEMENT OUGHT NOT TO HAVE DISBELIEVED AVAILABILIT Y OF CASH IN TERMS OF AGREEMENT. ON THE ABOVE UNDISPUTED FACTUAL POSITION ADDITION MADE' BY A.O. AT THE HANDS OF ASSESSEE IS UNJUSTIFIED. (P-36 - 42) [VOL. - I] THE BALANCE SHEET FOR THE YEAR ENDING 31/3/2007 SUB MITTED BEFORE A.O, IS PLACED IN THE PAPER BOOK. (P- 3) [VO L.-I]. THE AMOUNT GIVEN AS ADVANCE OF RS.20 LACS APPEARING IN THE BALANCE SHEET AS ON 31/3/3007. THE AFORESAID EVIDENCE HAS N OT BEEN 7 SHRI NANDKUMAR RATANLAL KOTHARI FOUND TO BE INCORRECT OR FALSE. THE AVAILABILITY OF THE AMOUNT RECEIVED ON CANCELLATION ON THE BASIS OF LEGAL EVID ENCE CANNOT BE DOUBTED/DISPUTED. IN REMAND REPORT ALSO A.O. HAS NOT DISPUTED THE REG ULAR BOOKS OF ACCOUNT. THE ADDITION MADE BY A.O. IS UNJUSTIFIED A ND UNSUSTAINABLE. THE ASSESSEE COULD NOT PRODUCE THE P ARTIES AS THEY WERE NOT COOPERATING WITH ASSESSEE TO APPEAR BEFORE A.O. THIS WAS EXPLAINED IN THE COURSE OF ASSESSMENT PROCEEDIN GS. THE ABOVE FACT CANNOT BE VIEWED ADVERSELY IGNORING THE LEGAL EVIDENCE PLACED ON RECORD. RELIANCE ON WRITTEN SUBMISSION BE FORE CIT(A) ON REPRODUCED AT PAGE 3 TO 5 OF APPELLATE ORDER. 5. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE LEARN ED COMMISSIONER (APPEALS). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS HAD FURNISHED CASH BOOK AND LEDGER ACCO UNTS ALONG WITH SUPPORTING DOCUMENTS COPY OF WHICH IS PLACED BEFORE US. IN ASSESSEES CASE, THE ASSESSING OFFICER HAS MADE ADDITION OF ` 30 LAKH, AS, ACCORDING TO THE ASSESSING OFFICER, THE AMOUNT OF C ASH RECEIVED SHOWN BY ASSESSEE FROM SHRI P.N. BHOI AND SHRI N.B. HARICH ANDAN, TOWARDS ADVANCE FOR SALE OF MIDC PROPERTY HAS NOT BEEN EXPL AINED SATISFACTORILY. THE ASSESSING OFFICER HAS ALSO MAD E ADDITION OF ` 25.23 LAKH BY NOT ACCEPTING EXPLANATION OF ASSESSEE THAT ` 20 LAKH IS THE REFUND OF MONEY IN RESPECT TO ADVANCE GIVEN FOR PUR CHASE OF PROPERTY ALONG WITH RECEIPT OF INTEREST OF ` 5,23,000. IT IS SEEN THAT ALL THE 8 SHRI NANDKUMAR RATANLAL KOTHARI TRANSACTION AS DISCUSSED ARE RECORDED IN BOOKS OF A CCOUNT. THE AGREEMENT FOR SALE DATED 12 TH APRIL 2007 EVIDENCING RECEIPT OF ` 30 LAKH ADVANCE FROM SHRI P.B. BHOI AND SHRI N.B. HARICH ANDAN, WAS PLACED ON RECORD OF THE ASSESSING OFFICER. THE AFO RESAID TRANSACTION WAS IN RESPECT TO PLOT AT MIDC WHICH WAS ALLOTTED V IDE LETTER NO.1452/2007 DATED 5 TH MARCH 2007 BY MIDC. THE AFORESAID ACTS ARE NOT IN DISPUTE. THE ASSESSEE HAD ALSO SUBMITTED AFF IDAVIT OF SHRI PRAVATA KUMAR AND SHRI NIRANJAN BHOI IN SUPPORT OF SUBMISSION MADE COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGE32 TO 34. THE AFFIDAVIT OF SHRI PRAVATA KUMAR AND SHRI NARAYAN BHOI, PLACED BEFORE THE ASSESSING OFFICER, HAS NOT BEEN FOUND TO BE INCORRE CT OR FALSE. THE CONTENTS OF THE AFFIDAVIT HAVE GONE UNREBUTTED AND HAVE TO BE TAKEN AS TRUE AND CORRECT. RELIANCE FOR THE SAME IS PLACE D ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MEHTA PARIKH & CO. V/S CIT, 30 ITR 181 (SC). THE DEED OF CANCELLATION FOR AGREEME NT TO SALE WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER AND COPY OF WHICH IS PLACED AT PAPER BOOK PAGE30 TO 31. THE LEGAL EVIDENCE ON REC ORD HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. IT IS FURTHER SEEN THAT PAYMENT OF ADVANCE RECEIVED HAS BEEN BY VARIOUS CHEQUES ON DIF FERENT DATE AND SOME AMOUNT IN CASH. ALL THE REPAYMENTS ARE PROPERL Y RECORDED IN THE BOOKS OF ACCOUNTS. A DETAILED STATEMENT INDICATING THE REPAYMENT RECORDED IN BOOKS WAS ALSO SUBMITTED BEFORE US. THE BOOKS OF 9 SHRI NANDKUMAR RATANLAL KOTHARI ACCOUNTS ARE ACCEPTED BY THE ASSESSING OFFICER AND HAVE NOT BEEN REJECTED. AS REGARDS TO REPAYMENT BY CHEQUES, THE A SSESSING OFFICER HAS MADE NO ADVERSE OBSERVATIONS CONSIDERING THE EV IDENCE ON RECORD AND BOOKS OF ACCOUNT. WE ARE OF THE OPINION THAT TH E ASSESSING OFFICER WAS NOT JUSTIFIED IN NOT ACCEPTING THE SUBMISSION O F ASSESSEE TO MAKE ADDITION AT THE HANDS OF ASSESSEE. AS REGARD SUM O F ` 20 LAKH BEING REFUND OF ADVANCE GIVEN ALONG WITH INTEREST OF ` 5.23 LAKH IT IS SEEN THAT TRANSACTION IS PROPERLY RECORDED IN BOOKS OF A CCOUNT. THE BALANCE SHEET OF ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 W AS SUBMITTED BEFORE THE ASSESSING OFFICER AND COPY OF WHICH IS P LACED IN THE PAPER BOOK AT PAGE3. THE AMOUNT GIVEN AS ADVANCE OF ` 20 LAKH APPEARING IN THE BALANCE SHEET AS ON 31 ST MARCH 3007. THE AFORESAID EVIDENCE HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. THE AV AILABILITY OF THE AMOUNT RECEIVED ON CANCELLATION ON THE BASIS OF LEG AL EVIDENCE CANNOT BE DOUBTED / DISPUTED. THE ASSESSEE HAD SUBMITTED A GREEMENT FOR PURCHASE OF PROPERTY ON 25 TH SEPTEMBER 2006 WHICH HAS BEEN CANCELLED DURING THE PREVIOUS YEAR UNDER CONSIDERAT ION. IN TERMS OF CANCELLATION DEED ASSESSEE HAD RECEIVED REFUND OF A DVANCE GIVEN AT ` 20 LAKH ALONG WITH INTEREST OF ` 5,23,000. THE AGREEMENT OF PURCHASE HAS NOT BEEN FOUND TO BE INCORRECT OR FALSE. THE AD DITION OF ` 20 LAKH BEING REFUND OF ADVANCE AND INTEREST OF ` 5,23,000 HAS BEEN SUBJECTED TO TAX AT THE HANDS OF ASSESSEE IN TERMS OF AGREEME NT OF PURCHASE 10 SHRI NANDKUMAR RATANLAL KOTHARI ITSELF. THE ASSESSING OFFICER HAVING DETERMINED INC OME ON THE BASIS OF AGREEMENT OUGHT NOT TO HAVE DISBELIEVED AVAILABILIT Y OF CASH IN TERMS OF AGREEMENT. ON THE ABOVE UNDISPUTED FACTUAL POSIT ION ADDITION MADE BY THE ASSESSING OFFICER AT THE HANDS OF ASSESSEE I S UNJUSTIFIED. IN REMAND REPORT ALSO, THE ASSESSING OFFICER HAS NOT D ISPUTED THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE COULD NOT PRODUCE TH E PARTIES AS THEY WERE NOT COOPERATING WITH ASSESSEE TO APPEAR BEFORE THE ASSESSING OFFICER. THIS WAS EXPLAINED IN THE COURSE OF ASSESS MENT PROCEEDINGS. THE ABOVE FACT CANNOT BE VIEWED ADVERSELY IGNORING THE LEGAL EVIDENCE PLACED ON RECORD. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES IN THE CASE OF ASSESSEE, WE ARE OF THE CONSIDERED OPIN ION THAT ADDITION MADE BY THE ASSESSING OFFICER IS UNJUSTIFIED AND SA ME IS DIRECTED TO BE DELETED. THE GROUNDS RAISED BY THE ASSESSEE ARE ALL OWED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 30.06.2017 11 SHRI NANDKUMAR RATANLAL KOTHARI COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR