M/s. Stride Infrastructure (P) Ltd., New Delhi V. ITO, New Delhi

ITA 5349/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3176 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-02-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 13-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: PI YUSH KUMAR
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 234B; 133(6); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA A. PILLAI , JM IT A NO. 5349 /DEL/201 6 : ASSTT. YEAR : 2010 - 11 M/S STRIDE INFRASTRUCTURE (P) LTD. FLAT NO. 100 - K, BASEMENT MILAP BHAWAN, NEW DELHI - 110002 VS INCOME TAX OFFICER, WARD - 9(2), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AJCS4888A ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH. PIYUSH KUMAR, ADV. REVENUE BY : SH. S. S. RANA, CIT DR DATE OF HEARING : 16 .0 2 .201 7 DATE OF PRONOUNCE MENT : 15 .05 . 201 7 ORDER PER N. K. SAINI, AM : THIS IS A N APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 22.09.2016 OF LD. CIT(A) - 28 , NEW DELHI . 2 . F OLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 28, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN C ONFIRMING AN ADDITION OF RS. 10,03,46,128 / - REPRESENTING THE ALLEGED UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 1.1 THAT WHILE CONFIRMING THE ABOVE ADDITION, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THE FACTUAL SU BSTRATUM OF THE CASE, STATUTORY PROVISIONS OF LAW AND AS SUCH, ADDITION SO SUSTAINED IS ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 2 HIGHLY MISCONCEIVED, TOTALLY ARBITRARY, WHOLLY UNJUSTIFIED AND THEREFORE, UNSUSTAINABLE. 1.2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPREC IATE THAT SUM OF RS. 10,03,46,128 / - REPRESENTED ADVANCES RECEIVED BY THE APPELLANT COMPANY AGAINST SALE OF PLOTS THROUGH MARKETING AGENTS FROM VARIOUS BUYERS BY ACCOUNT PAYEE CHEQUES AND AS SUCH THE SUM RECEIVED COULD NOT BE REGARDED AS UNEXPLAINED CASH CR EDIT U/S 68 OF THE ACT. 1.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO FAILED TO APPRECIATE THAT SUM RECEIVED BY THE APPELLANT WAS UNDER A MEMORANDUM OF UNDERSTANDING WITH M/S MAHAMEDHA BUILDERS, AND, M/S SUPERIOR ASSOCIATES (BOTH OF W HOM UNDISPUTEDLY ARE IDENTIFIABLE PARTIES) AND HAD BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES AND AS SUCH, THE BURDEN WHICH LAY UPON THE APPELLANT TO EXPLAIN THE NATURE AND SOURCE OF CREDIT STOOD DISCHARGED AND THEREFORE, ADDITION CONFIRMED UNDER SECTION 68 OF THE ACT IS WITHOUT SATISFYING THE PRE - CONDITIONS PROVIDED IN THE ACT AND THEREFORE, UNWARRANTED. 1.4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS PROCEEDED TO CONFIRM IMPUGNED ADDITION WITHOUT APPRECIATING THE SETTLED POSITION OF LAW THAT, I T IS NOT FOR THE APPELLANT TO EXPLAIN THE SOURCE OF SOURCE OF THE CREDITOR AND THEREFORE, ANY ADDITION CONFIRMED ON IRRELEVANT AND EXTRANEOUS CONSIDERATIONS IS ILLEGAL, UNJUSTIFIED AND HENCE UNTENABLE. 1.5 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED BOTH IN LAW AND ON FACTS IN FAILING TO APPRECIATE THE WRITTEN SUBMISSIONS FURNISHED BY THE ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 3 APPELLANT COMPANY AND OVERLOOKING THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT COMPANY. 1.6 THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN RECORDING VARIOUS ADVERSE INFERENCES WHICH ARE CONTRARY TO THE FACTS ON RECORD, MATERIAL PLACED ON RECORD AND, ARE OTHERWISE UNSUSTAINABLE IN LAW AND THEREFORE, ADDITION SO CONFIRMED IS ABSOLUTELY UNWARRANTED. 1.7 THAT THE ENTIRE ADDITION IS BASED ON SURMISES CONJECTURE AND SUSPICION AND THEREFORE ILLEGAL, INVALID AND, UNSUSTAINABLE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST U NDER SECTION 234B OF THE ACT OF RS. 1,22,73,255 WHICH IS NOT LEVIABLE ON THE FACTS OF THE INSTANT CASE. IT IS THEREFORE, PRAYED THAT THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER AND SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. 3 . THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF ADDITION OF RS.10,03,46,128/ - REPRESENTING THE ADVANCES RECEIVED BY THE ASSESSEE BUT ALLEGEDLY CONSIDERED BY THE AO AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 4 4 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ELECTRONIC RETURN DECLARING LOSS OF RS.44,956/ - ON 07.09.2010 WHICH WAS PROCESSED U/S 143(1 ) OF THE ACT. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED FROM THE BALANCE SHEET OF THE ASSESSEE THAT IT HAD SHOWN ADVANCE BOOKING AMOUNT RECEIVED FOR RS.13,22,23,000/ - AS ON 31.03.2010 AND THE AMOUNT SHOWN AS OPENING BALANCE WAS RS.3,18,76,872/ - , AS SUCH THERE WAS AN INCREASE OF RS.10,03,46,128/ - . THE AO ASKED THE ASSESSEE TO FILE DETAIL OF PERSONS WITH NAME AND ADDRESS FROM WHOM THIS AMOUNT WAS RECEIVED AND ALSO THE DESCRIPTION OF THE UNIT FOR WHICH THIS ADVANCE BOOKING WAS RECEIVED. THE ASSESSEE VIDE REPLY DATED 10.12.2012 FURNISHED THE LIST OF PERSONS FROM WHOM BOOKING AMOUNT HAD BEEN RECEIVED CONTAINING THE NAME, ADDRESSES AND AMOUNT RECEIVED. THE ASSESSEE ALSO FILED COPY OF THE SITE PLAN OF THE PROJECT. THE AO AGAIN ASKED THE ASSESSEE TO FILE AGREEMENT MADE WITH CUSTOMER S FOR TAKING ADVANCE FROM THEM WITH THE PORTION OF STOCK MARKED FOR SALE AND THE OPENING BALANCE OF CUSTOMER ADVANCE RECEIVED. IN RESPONSE THE ASSESSEE FURNISHED THE LOCATION OF THE STOCK IN TRADE AND COPIES OF APPLICATION FORM S OF PERSON S FROM WHOM ADVANCE S WERE RECEIVED. THE AO AGAIN ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNT SHOWN IN BANK BOOK AS ADVANCE FROM CUSTOMER WAS RECEIVED FROM DIFFERENT ACCOUNT THAN THE APPL ICANTS AND TO FILE BROCHURE OF TOWNSHIP FOR WHICH ADVANCE HAD ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 5 BEEN RECEIVED. IN RESPONSE THE ASSESSEE VIDE LETTER DATED 11.02.2013 SUBMITTED AS UNDER: THE COMPANY STARTED ITS BUSINESS INITIALLY WITH THE OBJECT OF DEVELOPMENT OF LAND OWNED BY IT TO DO THE SALE OF THE SAID DEVELOPED LAND BY SPLITTING IN PLOTS OF DIFFERENT SIZES. THEREFORE THE ASSESSEE COMPANY APPLIED WITH HPDA FOR NECESSARY APPROVAL OF PROPOSED LAY OUT OF THE LAND WHICH HAD BEEN APPROVED BY HPDA AS ON DATED 15.02.2007. THE COPY OF THE SITE P LAN IS ENCLOSED. LATER ON THREE MORE COMPANIES NAMED M/S NUTECH BUILDCON PRIVATE LIMITED, M/S NAUGE BUILDCON PRIVATE LIMITED AND M/S GAIN INFRASTRUCTURE PRIVATE LIMITED BELONGING TO THE SAME GROUP OF COMPANIES HAVING LAND ADJOINING TO THE LAND OWNED BY TH E ASSESSEE COMPANY JOINED HANDS WITH THE ASSESSEE COMPANY TO ESTABLISH A GROUP HOUSING PROJECT OVER THE LAND OWNED BY THEM AND TO DO THIS ALL THESE FOUR COMPANIES EXECUTED A JOINT CONSORTIUM AGREEMENT DATED 01.02.2008 (COPY ENCLOSED) AND IN PURSUANCE THERE OF PREPARED A JOINT LAYOUT OF THE PROPOSED GROUP HOUSING PROJECT AND APPLIED WITH HPDA FOR ITS NECESSARY APPROVAL HAS BEEN APPROVED BY HPDA AS ON DATED 15.07.2003. THE COPY OF THE APPROVED OUT OF THE PROJE CT IS ENCLOSED. AS PER THE NORMS OF THE HPDA IT IS MANDATORY TO USE SOME OF THE FRONT PORTION OF THE LAND FOR GREEN BELT PURPOSES AND THEREFORE THE SAID SPACE IS NOT AVAILABLE E ITHER FOR RESIDENTIAL OR COMMERCIAL USE PURPOSES. THEREFORE THE SAID FRONT PORTION OF THE LAND HAS BEEN APPROVED BY HPDA FOR D EVE LOPMENT OF NURSERY IN ACCORD AN CE WITH THE A PPROVAL SITE PLAN DAT E D 07.01.2010 (COPY ENCLOSED). ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 6 THE LAND PORTION OWNED BY GAIN INFRASTRUCTURE PRIVATE LIMITED HAD NOT BEEN CONSIDERED FOR GROUP HOUSING PURPOSE AT PRESENT AND THE SAID LAND HAD BEEN KEPT FOR F UTURE DEVELOPMENT PURPOSE. AFTER THIS ALL THE ABOVE FOUR COMPANIES FURTHER AGREED TO PROMOTE THE ASSESSEE COMPANY AS DEVELOPER COMPANY FOR DEVELOPMENT AND CONSTRUCTION OF THE APPROVED JOINT GROUP HOUSING PROJECT AND AUTHORIZED IT TO DO MARKETING OF ALL TH E PLOTS/FLATS DEVELOPED AND CONSTRUCTED OVER THE LAND OWNED BY ALL THE ABOVE FOUR COMPANIES . IT WAS ALSO AGREED BETWEEN THE CO M PANIES THAT THE BOOKING MONEY FOR WHOLE OF THE PROJECT WILL ALSO BE COLLECTED BY THE ASSESSEE COM PANY EITHER DIRECTLY OR THROUGH APPOINTMENT OF ANY OF THE AGENT TO NOURISH FUNDS FOR DEVELOPMENT MID CONSTRUCTION OF THE PROJECT. THE ASSESSEE COMPANY HAD ALREADY APPOINTED M/S MAHAMEDHA BUILDERS, A - 30, ASHOK NAGAR, GHAZIABAD VIDE A GREEMENT DATED 19.02.2007 IN TH IS RESPECT OF ACT AS AN M ARKETING AGENT GIVING IT THE AUTHORITY TO SOLICITED CUSTOMERS, COLLECT BOOKING AMOUNT AND DOING PUBLICITY OF THE PROJECT IN THE NAME OF 'MAHAMEDHA CITY'. THE COPY OF AGREEMENT IS ENCLOSED, WHICH LATER ON HAD BEEN APPLIED FOR MARKETING T HE PRODUCTS OF GROUP HOUSING PROJECT. AN AGREEMENT DATED 16.03.2007 HAD ALSO BEEN EXECUTED BETWEEN THE ASSESSEE COMPANY, SEVEN HEAVEN DEVELOPERS PRIV ATE LIMITED AND IT SISTER CONCERN SUPERIOR ASSOCIATES (COPY ENCLOSED) TO BOOK AND ALLOT 85 PLOTS OF DIFFERENT CUSTOMERS FROM WH OM BOOKING AMOUNT HAS INITIALLY BEEN COLLECTED BY THE M/S SEVEN HEAVEN DEVELOPERS PRIVATE LIMITED AND ITS SISTER CONCERN M/S SUPERIOR ASSOCIATES. THE MONEY SO COLLECTED BY M/S SEVEN HEAVEN DEVELOPERS PRIVATE LIMITED AND ITS SISTER CONCERN M/S SUPERIOR ASSO CIAT ES FROM THE BUYERS OF 85 PLOTS H AD BEEN PAID BACK ON BEHALF OF THE SAID BUYERS ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 7 TO THE ASSESSEE COMPANY AND OTHER COMPANIES OF THE SAME GROUP. THE BOOKING AMOUNT COLLECTED BY M/S MAHAMEDHA BUILDERS TIME TO TIME IN PURSUANCE TO THE ABOVE SAID AGREEMENT DATED 19.02.2007 HAD BEEN PAID BACK TO THE ASSESSEE COMPAN Y THROUGH ACCOUNT PAYEE CHEQUES. A COMPLETE LIST OF PERSONS FROM WHOM THE TOTAL BOOKING AMOUNT HAD BEEN COLLECTED ALONGWITH THE ADDRESS PROOF/ID PROOFS OF ALL THE CUSTOMERS HAVE BEEN ALREADY BEEN FU RNISHED ON EARLIER DATE OF HEARING.' 5 . THE AO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED AS UNDER: FROM THE ABOVE STATED FACTS BY THE ASSESSEE AND THE DOCUMENTS SUBMITTED, THE FOLLOWING POINTS WERE NOTICED - (1) THERE WAS A CONDITIONAL A PPROVAL FROM HPDA ( HAPUR PILAKHWA DEVELOPMENT AUTHORITY) DATED 19.02.2007 FOR RESIDENTIAL LAYOUT PLAN BEARING NO. 162/2006 FOR KHASARA NO. 77. FURTHER VIDE CLAUSE 3 OF THE APPROVAL IT HAS BEEN STATED THAT DEVELOPMENT WORK WAS TO BE COMPLETED WITHIN 2 YEARS FROM THE DATE OF APPROVAL. (2) THE ASSESSEE FILED AN AGREEMENT OF THE SAME DATE WITH M/S. MAHAMEDHA BUILDERS STATING THAT THEY WOULD BE ENTRUSTING THE WORK OF MANAGING ITS AFFAIRS LIKE ISSUANCE OF PROSPECTUS, DOING PUBLICITY AND CALLING FOR APPLICATIONS FROM PUBLIC. FROM THE PERUSAL OF THESE TWO DOCUMENTS IT WAS SEEN THAT THE ASSESSEE WAS ONLY GIVEN THE SANCTION FOR DEVELOPMENT OF THE SAID SITE BY HPDA WHEREAS THE AGREEMENT FILED BY THE ASSESSEE TALKS OF COLLECTION OF FUNDS FROM PUBLIC FOR SALE OF PLOTS/ FLATS. MOREOVER THE AUTHENTICITY OF THIS AGREEMENT WAS ALSO CALLED FOR BY ASKING THE ASSESSE E TO PRODUCE THE ORIGINAL STAMP PAPER OF ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 8 AGREEMENT WHICH IT HAS NOT BEEN ABLE TO DO SO. ALSO THE BROCHURE FILED AND THE APPLICATION FORM FILED IT IS SEEN THAT NOWHE RE IT HAS BEEN STATED THAT THE AMOUNT WAS BEEN GIVEN FOR M/S. STRIDE INFRASTRUCTURE PRIVATE LIMITED DEVELOPED UNIT. A READING OF THE APPLICATION FORM STATES THE FOLLOWING, WHI CH IS BEING REPRODUCED HERE - ' I/WE WISH TO BOOK A RESIDENTIAL PLOT FOR PREMIUM V ILLA SIZE >>>>> SQ. YARDS/FLAT HAVING SUPER AREA ___ SQ . FEE T/COMMERCIAL PLOT OF SIZE ___ SQ . YARDS IN YOUR UPCOMING TOWNSHIP AT NH - 24, HAPUR'. FURTHER AS PER CLAUSE 1 OF THE AGREEMENT IT IS STATED THAT THE ALLOTMENT OF PLOT IN THE SCHEME WAS TO BE MADE WIT HIN 12 MONTHS. NOW HERE IN THE APPLICATION FORM IT HAS BEEN MENTIONED THAT M/S. MAHAMEDHA BUILDERS WERE ACTING AS AGENTS FOR COLLECTING OF ALLOTMENT MONEY ON BEHALF OF THE ASSESSEE. FURTHER TO VERIFY THE FACTS, NOTICE U/S. 133(6) OF THE ACT WERE ISSUED TO F OUR OF THE APPLICANTS. AMONG THIS, REPLY WAS RECEIVED FROM MS. ASHA PREM NATH DENYING ANY TRANSACTION WITH THE ASSESSEE COMPANY. THE RELEVANT PORTION OF HER REPLY IS BEING REPRODUCED HERE - ' ..THAT M /S. STRIDE INFRASTRUCTURE IS NOT KNOWN TO ME. THE NAME OF THIS COMPANY I COME TO KNOW THROUGH YOUR NOTICE ONLY. I FURTHER DECLARE THAT I H AVE NEVER DONE ANY TRANSACTION WITH T HIS COMPANY DURING MY LIFETIME... ' I T FALLS TO MY UNDERSTANDING THAT H O W COULD AN APPLICANT H AVE INVESTED AN AMOUNT THROUGH AN AGENT/BROK ER WITHOUT BEING AWARE OF THE NAME OF THE COMPANY OR ANY GROUP OF CONSORTIUM IN WHICH THE COMPANY WAS ALSO A PART OF, FOR GIVING ADVANCE FOR PURCHASE OF PLOT? HENCE ON THE ABOVE STATED FACTS, THE AGREEMENT COPY FIL ED BETWEEN THE ASSESSEE AND M/S MAHAMEDHA BUILDERS IS NOT FOUND TO BE GENUINE AND FOR THE PURPOSE IT IS STATED TO BE FOR. FURTHER THE ASSESSEE VIDE THE SAID LETTER FILED PHOTOCOPY OF SUPPLEMENTARY AGREEMENT BETWEEN ITSELF AND M/S. MAHAMEDHA ESTATES PRIVATE LIMITED AS ONE PARTY AND M/S. ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 9 SEVEN HEAV ENS DEVELOPERS PRIVATE LIMITED DATED 16.03.2007 WHICH STATES THAT IT WILL PROVIDE LAND IN FORM OF PLOTS OF 200 SQ YARDS FOR 85 PLOTS TO THE SECOND PARTY IN LIEU OF CONSIDERATION RECEIVED BY IT. IT COMPLETELY FAILS TO DERIVE ANY LOGICAL SEQUENCE OF EVENT IN WHICH ONE HAND THE ASSESSEE SEEMS TO HAVE ENTERED INTO ANY AGREEMENT WITH M/S. MAHAMEDHA BUILDERS FOR MARKETING AND COLLECTING OF MONEY FROM PUBLIC OF ITS TOWNSHIP AS STATED TO HAVE BEEN APPROVED BY THE HDPA ON 19.02.2007 AND THEN ON 16.03.2007 IT DECIDES TO SELL OF THE P LOTS TO M/S. SEVEN HEAVENS DEVELOPERS PRIVATE LI MITED FOR AN AMOUNT SUPPORT OF THE AMOUNT SHOWN AS RECEIVED FROM CUSTOMER DURING THE YEAR. THIRDLY THE ASSESSEE VIDE THE SAME LETTER HAS FILED A COPY OF CONSORTIUM AGREEMENT BETWEEN M/S. NUT ECH BUILDCON PRIVATE LIMITED, M/S. NUAGE BUI L DCON PRIVATE LIMITED, M/S. GAIN INFRASTRUCTURE PRIVATE LIMITED AND THE ASSESSEE DATED 01.02.2008 WHEREBY IT IS STATED THAT ALL THESE PARTIES WOULD COMBINE THEIR LAND HOLDING FOR JOINT DEVELOPMENT OF LAND OWNED B Y THEM INTO A RESIDENTIAL COLONY IN THE NAME OF MAHAMEDHA CITY. THE ASSESSEE FILED A COPY OF CONDITIONAL APPROVAL FROM HPDA DATED 15.07.2008 FOR LAYOUT PLAN 193/07 - 08 STATING THE APPROVAL FROM IN THE NAME OF M/S. NUTECH BUILDCON PRIVATE LIMITED, M/S. NUAGE BUILDCON PRIVATE LIMITED AND THE ASSESSEE COMPANY. THE NAME OF M/S. GAIN INFRASTRUCTURE PRIVATE LIMITED WAS NOT I N THE APPROVAL LETTER. HENCE TH IS AGREEMENT FILED ALSO APPEARS TO BE NOT IN ANY LOGIC OR REASON FOR THE AMOUNT COLLECTED AS ADVANCE FROM CUSTO MERS. FURTHER INFORMATION ON THE ABOVE FACTS WERE CALLED FROM HPDA U/S. 133(6) OF THE ACT ON 28.02.2013. REPLY IN THIS REGARD WAS RECEIVED FROM HPDA VIDE ITS LETTER DATED ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 10 06.03.2013 WHOSE ENGLISH TRANSLATION IS BEING REPRODUCED BELOW: (1 ) HPDA HAD GIVEN APPROVAL TO M/S. STRIDE INFRASTRUCTURE PRIVATE LIMITED OF LAYOUT PLAN 162/06 - 07/L/HPR DATED 18.12.2006. (2) HPDA REV ISED THE ABOVE APPROVAL AND VIDE LAYOUT PLAN 193/2007 - 08/L/HPR APPROVAL W AS GRANTED TO THE FOLLOWING LAND OWNERS: (A) M/S STRID E INFRASTRUC TURE PRIVATE LIMITE D, M/S NUTECH BU ILDCON PRIVATE LIMITED, M/S. NUAGE BUILDCON PRIVATE LIMITED, (B) .................... (3) HPDA REVISED THE PLAN APPROVAL AS STATED IN (1) ABOVE VIDE LAYOUT NO. 193/2007 - 08/L /HPR IN THE NAME OF THE FOLLOWING COMPANIES : M/S. STRIDE INFRASTRUCTURE PRIVATE LIMITED, M/S. NUTECH BUILDCON PRIVATE LIMITED, M/S. NUAGE BUILDCON PRIVATE LIMITED. (4) M/S. MAH AMEDHA BUILDERS AND M/S. MAHAM EDHA BUILDERS PRIVATE LIMITED HAVE NEVER BEEN APPROVED FO R ANY LAYOUT PLAN. 6. THEREAFTER, THE AO ASKED THE ASSESSEE TO SHOW CAUSE THAT AS TO WHY THE BOOKING AMOUNT RECEIVED WAS NOT TO BE TREATED UNEXPLAINED CREDIT ENTRY. IN RESPONSE THE ASSESSEE SUBMITTED AS UNDER: THE LETTERS/NOTICES AND OTHER DOCUMENTS SOUGHT AS ABOVE SAID , ARE VERY MUCH NE CESSARY FOR THE ASSESSEE TO GIVE CORRECT REPLY IN THE MATTER. THE ASSESSEE HAS PLACED RELIANCE ON FOLLOWING CASE LAW WHEREIN THE HON BLE PUNJAB & HARYANA HIGH COURT HAS HELD THAT THE ASSESSING AUTHORITY IS DULY BOUND TO DISCLOSE ALL THE EVIDENCES ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 11 COLLECTED BY HIM TO GIVE THE ASSESSEE A REASONABLE OPPORTUNITY OF REBUTTING IT. CHIRANJI LAL STEEL ROLLING MILLS VS CIT PUNJAB (1970) 84 ITR 222 (P&H). 7. HOWEVER, T HE AO DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND MADE THE ADDITION OF RS.10,03,46 ,128/ - BY OBSERVING AS UNDER: I HAVE CAREFULLY GONE THROUGH THE SUBMISSION OF THE ASSESSEE AND ALSO TO THE DOCUMENTS COLLECTED IN THIS REGARD. THE CONTENTION OF THE ASSESSEE WAS THAT BURDEN OF THE ASSESSEE IN RESPECT OF THE ADVANCE RECEIVED AGAINST BOOKIN G FROM THE TWO PARTIES STANDS DISCHARGED AND THEREFORE NO ADDITION IS TENABLE. FURTHER THAT ONCE THE AMOUNT HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES AND THE CREDITORS HAVE DULY CONFIRMED THE TRANSACTIONS NO ADVERSE INFERENCE CAN BE DRAWN. IN THIS REGARD IT IS TO BE STATED THAT THE ADVANCE HAS BEEN RECEIVED FROM TWO PARTIES, WHICH I HAVE DISCUSSED ABOVE HAD NO LOCUS STANDI VIS A VIS THE ASSESSEE TO COLLECT SUCH AMOUNT ON BEHALF OF THE APPLICANT IN ITS NAME. THE CREDITORS STANDS IN THE BOOKS OF THE ASSESSEE IN THE NAME .OF ADVANCE FOR BOOKING AND THESE ADVANCE ARE STATED BY IT TO HAVE BEEN RECEIVED FROM INDIVIDUALS WHO HAVE DENIED THAT THEY KNOW THE EXISTENCE OF THE ASSESSEE COMPANY. HENCE THE WHOLE MATRIX OF TRANSACTION STATED IS SHAM AND NOT PROVED TO BE G ENUINE IN THE NAME OF THE ASSESSEE. THE AMOUNT MERELY BEIN G RECEIVED THROUGH CHEQUES DOES NOT DISCHARGE THE ONU S FROM THE ASSESSEE COMPANY TO OBLIGATE IT FROM THE LIABILITY TO PROVE IT NOT TO BE FALLING WITHIN THE AMBIT OF SECTION 68 OF THE ACT. THE ASSESS EE HAS FURTHER STATED THAT PLOTS HAVE BEEN FINALLY GIVEN TO THE CUSTOMERS AND HAVE FILED SALE AGREEMENT FOR FEW OF THEM. PERUSAL OF THE SAME SHOWS THAT THESE SALE AGREEMENTS WERE WITH M/S. GAIN INFRASTRUCTURE PRIVATE LIMITED AND M/S. PUSHPANJALI BUILDERS P RIVATE ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 12 LIMITED AND THAT THE KH ASRA NO . GIVEN F OR THE PLOTS SOLD WERE NOT THE SAME AS KHASARA NO . 77 WHICH THE ASSESSEE OWNS. ALSO THAT IN THE C ONSORTIUM APPROVAL AS PER HPDA BOTH THESE COMPANIES I.E . M/S. GAIN INFRASTRUCTURE PRIVATE LIMITED AND M/S. PUSHP ANJALI BUILDERS PRIVATE LIMITED WERE NOT IN THE APPROVED LAYOUT PLANS WITH THE OTHER THREE COMPANIES . THE LAYOUT PLAN APPROVAL GIVEN TO THESE TWO PARTIES VIDE APPROVAL DATED 20.06.2008 BY HPDA HAS NO MENTION O F TH E ASSESSEE COMPANY OR THE OTHER TWO COMPANI ES OF THE CONSORTIUM. UNDER SUCH CIRCUMSTANCES 1 AM OF THE VIEW THAT THE BOOKING AMOUNT RECEIVED BY THE ASSESSEE HAS NOT BEEN CONCLUSIVELY PROVED BY THE ASSESSEE AS BEING GENUINE RECEIPT OF THE ASSESSEE. THE CREDITS IN THE NAME OF THIRD PARTIES HAVE NOT BE EN PROVED BY THE ASSESSEE ON THEIR IDENTITY, CAPACITY OF CREDITORS AND GENUINENESS OF TRANSACTION. JUDGMENTS IN SUPPORT OF THE ABOVE VIEW: 1. PRADEEP KUMAR AGARWAL V. INCOME - TAX OFFICER, GIRID IH [2011] 12 TAXMANN.COM 328 (JHAR.) DATED MAY 3, 2011 2. HAC IENDA FARMS (P.) LTD, V. COMMISSIONER OF INCOME TAX [ 2011] 198 TAXMAN 509 (DELHI) 3. YASH PAL GOEL VS. COMMISSIONER OF INCOME - TAX (APPEA LS), CHANDIGARH IT APPEAL NO. 38 9 OF 2008 4. SHANKAR INDUSTRIES VS. CIT(CAL) 114 ITR 689 5. CIT VS PRESICION FIANANCE PRIVATE LIMITED (CAL) 208 ITR 465 HENCE THE AMOUNT OF RS.10,03,46,128/ - IS TREATED AS INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT AS PER THE PROVISIONS OF SECTION 68 OF THE ACT IN VIEW OF THE DETAILED DISCUSSION ABOVE. 8. BEING AGGRI EVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE INITIALLY STARTED ITS BUSINESS ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 13 WITH THE OBJECT OF DEVELOPMENT OF LAND OWNED BY IT TO DO THE SALE OF THE SAID DEVELOPED LAND BY SPLITTING IN PLOTS OF DIFFERENT SIZES. THE REFORE, THE ASSESSEE APPLIED WITH HPDA FOR NECESSARY APPROVAL OF THE PROPOSED LAYOUT OF THE LAND WHICH HAD BEEN APPROVED BY HPDA AS ON 15.02.2007. IT WAS FURTHER STATED THAT THE ASSESSEE COMPANY APPOINTED M/S MAHAMEDHA BUILDERS AS MARKETING AGENT FOR BOOKI NG OF PLOTS/FLATS AND LATER ON THRE E MORE COMPANIES, NAMELY, M/S NUTECH BUILDCON P LTD., M/S NUAGE BUILDCON P LTD. AND M/S GAIN INFRASTRUCTURE PVT. LTD. TO THE SAME GROUP OF COMPANIES HAVE LAND AT VILLAGE TARAPUR , HAPUR , JOINED HANDS WITH THE ASSESSEE TO ESTABLISH A GROUP HOUSING PROJECT OVER THE LAND OWNED BY THEM AND TO DO THIS , ALL THESE FOUR COMPANIES EXECUTED A JOINT CONSORTIUM AGREEMENT DATED 01.02.2008 AND IN PURSUANCE THEREOF PREPARED A JOINT LAYOUT OF THE PROPOSED HOUSING PROJECT APPLIED WITH H PDA FOR ITS NECESSARY APPROVAL WHICH HAD BEEN APPROVED BY HPDA ON 15.07.2008. IT WAS STATED THAT ALL THE ABOVE SAID FOUR COMPANIES FURTHER AGREED TO PROMOTE THE ASSESSEE COMPANY AS DEVELOPER COMPANY FOR DEVELOPMENT AND CONSTRUCTION OF THE APPROVED JOINT G R OUP HOUSING PROJECT AND AUTHORIZED IT TO DO MARKETING OF ALL THE APPROVED JOINT GROUP HOUSING PROJECT AND AUTHORIZED IT TO DO MARKETING OF ALL THE PLOTS/FLATS DEVELOPED AND CONSTRUCTED OVER THE LAND OWNED BY ALL THE FOUR COMPANIES. IT WAS ALSO AGREED BETWE EN THE COMPANIES THAT THE BOOKING MONEY FOR WHOLE OF THE PROJECT WILL ALSO BE COLLECTED BY THE ASSESSEE COMPANY EITHER DIRECTLY OR THROUGH APPOINTMENT OF ANY OTHER ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 14 AGENT TO NOURISH FUNDS FOR DEVELOPMENT AND CONSTRUCTION OF THE PROJECT. IT WAS FURTHER STATE D THAT THE ASSESSEE HAD ALREADY APPOINTED M/S MAHAMEDHA BUILDERS, A - 30, ASHOK NAGAR, GHAZIABAD VIDE AGREEMENT DATED 19.02.2 007 IN THIS RESPECT TO ACT AS A MARKETING AGENT GIVING IT THE AUTHORITY TO SOLICIT CUSTOMERS, COLLECT BOOKING AMOUNT AND DOING PUBLIC ITY OF THE PROJECT IN THE NAME OF MAHAMEDHA CITY AND THAT THE AGREEMENT DATED 16.03.2007 HAD ALSO BEEN EXECUTED BETWEEN THE ASSESSEE COMPANY , SEVEN HEAVEN DEVELOPERS PVT. LTD. AND ITS SISTER CONCERN M/S SUPERIOR ASSOCIATES TO BOOK AND ALLOT 85 PLOTS TO D IFFERENT CUSTOMERS FROM WHOM BOOKING AMOUNT HAD INITIALLY BEEN COLLECTED BY THE SEVEN HEAVEN DEVELOPERS PVT. LTD. AND ITS SIS TER CONCERN SUPERIOR ASSOCIATES, T HE SAID AMOUNT HAD BEEN PAID BACK ON BEHALF OF THE SAID BUYER TO THE ASSESSEE COMPANY AND OTHER C OMPANIES OF THE SAME GROUP AND THAT THE BOOKING AMOUNT COLLECTED BY M/S MAHAMEDHA BUILDERS TIME TO TIME IN PURSUANCE TO THE ABOVE SAID AGREEMENT DATED 19.02.2007 HAD BEEN PAID BACK TO THE ASSESSEE COMPANY THROUGH ACCOUNT PAYEE CHEQUES. IT WAS EXPLAINED THA T THE ADVANCE BOOKING AMOUNT HAD BEEN RECEIVED BY THE ASSESSEE FROM THE FOLLOWING ENTRIES (I) M/S MAHAMEDHA BUILDERS RS.4,75,57,230/ - (II) M/S SUPER ASSOCIATES RS.5,06,90,000/ - . 9. IT WAS FURTHER STATED THAT IN ORDER TO SUPPORT THE FACTUM OF ADVANCE AGAI NST BOOKING, THE ASSESSEE HAD PLACED ON RECORD COPY OF THE LEDGER ACCOUNT IN THE NAME OF M/S MAHAMEDHA BUILDERS AND M/S ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 15 SUPERIOR ASSOCIATES AND ALSO FURNISHED COPIES OF THE AFFIDAVIT S OF THE PROPRIETOR S OF THE AFORESAID FIRM S , COPY OF AGREEMENT AND SUPPLE MENTARY AGREEMENT BETWEEN TH E PARTIES, LIST OF CUSTOMERS FR OM WHOM BOOKING AMOUNT HAD BEEN COLLECTED BY THE TWO AGENTS. IT WAS ACCORDINGLY SUBMITTED THAT THE BURDEN OF THE ASSESSEE IN RESPECT OF THE ADVANCE AGAINST BOOKING FROM THE TWO PARTIES STOOD DISCHA RGED AND THEREFORE, ADDITION WAS NOT TENABLE. IT WAS ALSO STATED THAT THE AMOUNT HAD BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES AND CREDITORS HAD DULY CONFIRMED THE TRANSACTION S , NO ADVERSE INFERENCE COULD HAVE BEEN DRAWN. 10 . THE LD. CIT(A), HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND SUSTAINED THE ADDITION MADE BY THE AO BY OBSERVING IN PARAS 3.4 TO 3.7 OF THE IMPUGNED ORDER WHICH IS REPRODUCED VERBATIM AS UNDER: 3.4 IN THIS CASE UNDER CONSIDERATION , IT WAS NOTED BY THE ASSESSING OFFI CER THAT IN THE BALANCE SHEET OF TH E ASSESSEE COMPANY THERE IS INCREASE IN CURRENT LIABILITIES OF RS.10,03,46,128/ ON ACCOUNT OF ADVANCE RECEIVED FROM CUSTOMERS. ACCORDINGLY THE ASSE S SEE WAS ASKED TO FURNISH NECESSARY DE T AILS AS PER QUESTIONNAIRE DATED 23. 05.2012 AND SUBSEQUENT NOTING, IN RESPONSE THE ASSESSEE FURNISHED COPY OF T HE LEDGER ACCOUNT OF THE APPELLANT IN THE HOOKS OF M/S MAHAMEDHA BUILD ERS AND M/S S UPERIOR ASSOCIATES . COPY OF AFFIDAVIT OF SH. RAJ SINGH, PROP M/S MAHAMEDHA BUILDERS AND SHRI SUNIL SINGH PROP M/S SUPER ASSOCIATES , LIST OF CUSTOMERS FROM WHOM BOOKING AMOUNT HAVE BEEN ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 16 COLLECTED BY THE TWO AGENTS, COPY OF APPLICATION OF 15 CUSTOMERS . 3.5 ON VERIFIC ATION OF THE VARIOUS AGREEMENT AND CONFIRMATIONS FROM HAPUR PALAKHWA DEVELOPMENT A UTHO RITY THE A.O FOUND LOT OF CONTRADICTIONS IN THE SUBMISSION OF THE ASSESSEE AS DISCUSSED IN DETAIL ON PAGE 3 AND 5 OF THE ASSESSMENT ORDER . FURTHER TO VERIFY THE GENUINENESS OF THE CUSTOMERS , NOTICE UNDER SECTION 1 33(6) WAS ISSUED TO APPLICANTS OF 24 PLOTS NAMELY MS ASHA PREMNATH ( APPLICANT SHOWN FOR 6 PLOTS), SRI. INDE R SINGH (APPLICANT SHOWN FOR 5 PLOTS), SRI. JOGIDER S INGH MAVI( APPLICANT SHOWN 7 PLOTS) AND MS MEE NA DEV I (APPLICANT SHOWN FOR 6 PLOTS) . ALL THE NOTICES WERE RETURNED UN - SERVED EXCEPT NOTICE SENT TO MS ASHA PREMNATH , STA TED TO HAVE MADE PAYMENT OF RS. 61,20,000/ - FOR BOOKING OF 6 PLOTS. IN HER REPLY TO TH E SAID NOTICE MS ASHA PREMNATH CATEGORICALLY DENIED TO HAVE MADE ANY PAYMENT TO THE ASSESS EE. IT WAS FURTHER STATED THAT SHE HAS NEVER DONE AN Y TRANSACTION WITH T HE COMPANY DURING HER LIFE TIME . IT WAS ALSO CO NFIRMED BY HER THAT SHE HAS NOT PURCHASED ANY FIXE D ASSET NEITHER FROM THE ASSESSE E COMPANY NOR FROM ANY OTHER CONCERNS. ACCORDINGLY AFTER ISSUING SHOW CAUSE NOTICE TO T HE ASSESSEE AND CONF RONTING WITH THE EVIDENCE COLLECTED AND TAKING INTO ACCOUNT THE REPLY OF THE ASSESSEE THE AMOUNT IN QUESTION WAS HELD TO BE UNEXPLAINED CASH CREDIT AND RS. 10,03,46,128/ WAS ADDED UNDER SECTION 68 OF THE ACT. 3.6 I HAVE CAREFULLY CONSIDERED THE FACT OF THE CASE, FINDING OF THE ASSESSING OFFICER AND THE SUBMISSION OF THE LD. A.R . ON VERIFICATION OF THE LEDGER ACCOUNT OF THE BOOKING AGENTS IT IS NOTED THAT ONLY ONE ENTRY HAS BEEN SHOWN ON 31.03.2010 THAT IS 'BY DEBIT TO PARTIES FOR BOOKING MADE ON THEIR BEHAL F. FURTHER ON PERUSAL OF ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 17 APPLICATION FORMS OF THE CUSTOMERS , IT IS NOTED THAT NO WHERE IT IS MENTIONED THAT THE BOOKING IS BEING MADE OR ADVANCE MONEY IS BEING RECEI VED ON BEHALF OF THE ASSESSEE COMPANY M/S STRIDE INFRASTRUCTURE PVT. LTD. FURTHER THE FORM AR E INCOMPLETE AND THE CO LUM 'ADVANCE REGISTRATION AMOUNT RECEIVED BY CHEQUE NO. ------- DATE --- --- FOR RS. ------- DRAWN ON ----- BANKER NAME ' IS LEFT BLANK . ACCORDINGLY DURING THE COURSE OF THE APPELLA TE PROCEEDING THE APPELLANT WAS ASKED TO FURNIS H THE COPY OF ACCOUNT OF THE CUSTOMERS IN THE BOOKS OF ACCOUNT OF THE BOOKING AGENTS. HOWEVER EVEN AFTER BEING GIVEN SUFFICIENT OPPORTUNITY NEITHER THE COPY OF ACCOUNT OF THE CUSTOMERS IN THE BOOKS OF ACCO UN T OF THE BOOKING AGENTS WERE FILE D NOR THE DETAIL S OF THE AMOUNT RECEIVED FROM THE CUSTOMERS WERE FURNISHED. 3.6 THE FILING OF AN AFFIDAVIT FROM THE PROPRIETORS OF REL ATED CONCERNS (1) M/S MAHAMEDHA B UILDERS AND M/S SUPER ASSOCIATES THAT THEY HAVE REC EIVED BOOKING AMOUNT IN QUESTIO N I.E . RS. 4,75,57,230/ & RS.5,06,90,000/ FROM THE CUSTOMERS DOES NOT ESTABLISHED THE GENUINENESS OF THE TRANSACTIONS. IN THE CASE OF KRIS H AN KUMAR JHAMB VS. I.T.O HIGH COURT O F PUNJAB & HARAYNA (2009) 179 TAXMAN 141 HAS OPINED THAT IN CASE OF AMOUNT RECEIVED IN CASH, ON STATED EXECUTION OF AGREEMENTS FOR SALE OF SHOPS, SAME DOES NOT ST AND PROVED MERELY BY FILING OF AFFIDAVITS OF PAYERS, WHEN THOSE COULD NOT BE PRODUCED FOR AUTHENTICATION; SIMILARLY PRODUCTION OF AGREEMENT T O SALE , INCOMPLETE AND UNSIGNED DOES NOT PROVE ASSESSEE' S VERSION . MOREOVER IN THE CASE UNDER CONSIDERATION IT IS APPARENT THAT THE AMOUNT OF ADVANCE WAS N OT RECEIVED BY THE BOOKING AGENT S BY ACCOUNT PAYEE CHEQUES OR BY THE BANK DRAFTS. FURTHER SINCE CREDITS HAD BEEN RECEIVED IN ASSESSEE'S BOOKS OF ACCOUNTS . SE CTION 68 PUT CERTAIN OBLIGATIONS ON THE ASSESSE E, WHICH HE HAS TO PROVE. THE ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 18 ASSESSEE HAS TO PROVE THE IDENTITY OF THE PERSON FROM WHOM THE AMOUNT HAS BEEN RECEIVED. THE ASSESSEE HAS ALSO TO PROVE THE CREDITWORTHINESS F ROM WHOM THE CREDIT HAS BEEN RECEIVED . T HE ASSESSEE HAS AL SO PROVED THE GE NUINENESS OF THE TRANSACTION. THE ASSESSING OFFICER HAD FOUND MANY DISCREPANCIES. IT WAS NECESSARY TO VERIFY WHETHER THE BOOKING AMOUNT CAME FROM THE PERSON WHO THE ASSESSEE CLAIMED TO HAVE PAID TO HIS BOOKING AGENTS. H OWEVER ON VERIFICATION THE SAME WAS NOT CONFIRMED BY THE SO CALLED BUYERS. MOREOVER EVEN THE DETAIL OF AMOUNT RECEIVED FROM THE SO CALLED BUYERS WERE NOT FURNISHED. 3.7 HENCE IT IS APPARENT THAT THE APPELLANT HAD BEEN GIVEN PROPER OPPORTUNITIES OF BEING H EARD TO PROVE THE CREDITWORTHINESS OF THE INDIVIDUAL CUSTOMERS AND CONSEQUENTLY THE GENUINENESS OF THE ADVANCE RECORDED IN THE BOOKS OF ACCOUNT IN THEIR NAMES BUT THE APPELLANT FAILED TO DISCHARGE ITS ONUS BY PROVING THE I DENTITY, GENUINENESS AND CREDITWOR THINESS OF THE CREDITORS. IN ORDER TO ESTABLISH THE FACT OF THE RECEIPT OF THE CASH CREDIT AS REQUIRED UNDER SECTION 68, THE ASSESSEE MUST PROVE 3 IMPORTANT CONDITIONS NAMELY (1 ) THE IDENTITY OF THE PERSON, (2) THE GENU INENESS OF THE TRANSACTION AND (3) TH E CAPABILITY OF THE PERSON GIVEN THE CASH CREDIT AND ALL THE CONDITIONS SHOULD BE M E T CUMULATIVELY FAILURE TO PROVE /FULFILL ANY ONE OF THE CONDITIONS WOULD RENDER THE CASH CRED IT AS UNEXPLAINED. IN THE CASE OF THE APPELLANT, NEITHER THE IDENTI TY OF THE CREDITORS HAS BEEN ESTABLISHED NOR THE OTHER TWO CON DITIONS NAMELY GENUINENESS OF TH E TRANSACTION AND CREDIT WORTHINESS OF THE CREDITORS HAVE BEEN PROVED. CONSIDERING ABOVE I DON'T FIND ANY INFIRMITY IN FINDING OF THE ASSESSING OFFICER THAT THE BU RDEN OF THE ASSESSEE IS NOT DISCHARGED ONLY BY STATING THAT IT HAS RECEIVED THE AMOUNT IN QUESTION F ROM THE BOOKING AGENTS THROUGH ACCOUNT PAYEE CHEQUES. SINCE ACCORDING TO THE ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 19 ASSESSEE THE BOOKING AGENTS WERE COLLECTING THE MONEY IN QUESTION ON BEHALF OF THE COMPANY , HENCE IT IS RESPONSIBILITY OF THE APPELLANT COMPANY TO EXPLAIN AND PROVE THE IDENTITY OF THE BUYERS AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY THE ADDITION OF RS.10,03,46,128 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS CONFIRMED . 11 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD RECEIVED THE ADVANCE FR OM THE CUSTOMERS AGAINST SALE OF PLOTS AND HAD SHOWN DULY IN ITS BALANCE SHEET IN EARLIER YEARS WHICH HAS BEEN ACCEPTED BY THE DEPARTMENT AND THAT THERE WAS NO CESSATION OF LIABILITY. THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) W AS NOT JUSTIFIED. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE FURNISHED THE CONFIRMATION FROM THE CONCERNED PERSONS AND APPOINTED TWO FIRMS AS MARKETING AGENTS, THE SAID FIRMS, NAMELY, M/S MAHAMEDHA BUILDERS AND M/S SUPERIOR ASSOCIATES WERE DULY ASSESSED TO TAX AND FURNISHED COPY OF ACKNOWLEDGMENT OF THEIR RESPECTIVE RETURNS OF INCOME (COPIES OF WHICH ARE PLACED AT PAGE NOS. 60 AND 61 OF THE ASSESSEE S PAPER BOOK). IT WAS FURTHER SUBMITTED THAT THE PROPRIETOR S OF THE AFORESAID FIRMS FURNISHED THEIR AFFIDAVIT S AND STATED IN THE SAID AFFIDAVIT S THAT THE ADVANCES COLLECTED FROM CUSTOMERS AGAINST BOOKING OF PLOTS/FLATS HAD BEEN REMITTED TO THE ASSESSEE AND THE DETAIL WAS GIVEN IN THE SAID AFFIDAVIT S EACH DATED 15.03.2013 (COPIES OF WHICH ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 20 ARE PLACED AT PAGE NOS. 5 8, 59 AND 62 OF THE ASSESSEE S PAPER BOOK). IT WAS ACCORDINGLY SUBMITTED THAT NEITHER THE AO NOR THE LD. CIT(A) APPRECIATED THE FACTS IN RIGHT PERSPECTIVE. THEREFORE, THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) WAS NOT JUSTIFIED. ALTERNATIV ELY, IT WAS SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE AO TO BE ADJUDICATED AFRESH AFTER CONSIDERING ALL THE RELEVANT DOCUMENTS FURNISHED BY THE ASSESSEE AND BY GIVING A PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 12 . IN HIS RIVAL SUBMIS SIONS THE LD. DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND REITERATED THE OBSERVATIONS MADE IN THEIR RESPECTIVE ORDERS. IT WAS FURTHER SUBMITTED THAT THE AO HAD GIVEN THE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THER EAFTER MAD E THE ADDITION AS THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON IT. 1 3 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF REAL ESTATE AND WAS DEVELOPING THE PLOTS WHICH WERE SOLD TO THE CUSTOMERS. THE ASSESSEE APPOINTED TWO MARKETING AGENTS, NAMELY, M/S MAHAMEDHA BUILDERS PROPRIETOR SHIP CONCERN OF SH. RAJ SINGH BHATI, S/O LATE SH. BHIM SING H AND M/S SUPERIOR ASSOCIATES PROPRIETORSHIP CONCERN OF SH. SUNIL SINGH S/O SH. DAYA SINGH. THE ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 21 SAID PERSONS WERE APPOINTED AS MARKETING AGENTS VIDE AN AGREEMENT DATED 19.02.2007 WITH M/S MAHAMEDHA BUILDERS AN D AGREEMENT DATED 16.03.2007 WITH M/S SUPERIOR ASSOCIATES AND M/S SEVEN HEAVEN DEVELOPERS PVT. LTD. THE ASSESSEE CLAIMED THAT RS.4,84,06,128/ - WERE RECEIVED FROM M/S M AHAMEDHA BUILDERS AND RS.5,19,40 ,000/ - WERE RECEIVED FROM M/S SUPERIOR ASSOCIATES WHO IN TURN RECEIVED THE SAID AMOUNT AS AN ADVANCE FRO M PROSPECTIVE BUYERS OF PLOTS/FLATS. BOTH THE AFORESAID F I RM ARE ASSESSED TO TAX AND COPY OF ACKNOWLEDGMENT FOR FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2010 - 11 BY SH. RAJ SINGH BHATI PROPRIETOR OF M/S MA HAMEDHA BUILDERS IS PLACED AT PAGE NO. 60. THE AFFIDAVIT DATED 15.03.2013 IS PLACED AT PAGE NOS. 58 TO 59 OF THE ASSESSEE S PAPER BOOK. THE CONTENTS OF THE SAID AFFIDAVIT READ AS UNDER: I, R AJ SINGH BHATI S/O LATE SH. BHIM SINGH, AGED 44 YEARS, R/O A - 30/ 31, ASHOK NAGAR, GHAZIABAD, DO HEREBY SOLEMNLY AFFIRM AND DECLARE AS UNDER: - 1. THAT I AM PROPRIETOR OF M/S MAHAMEDHA BUILDERS, A - 30 - 31, ASHOK NAGAR, GHAZIABAD . 2. THAT M/S MAHAMEDHA BUILDERS HAD ENTERED INTO AN AGREEMENT ON DATED 19 - 02 - 2007 WITH M/S STRIDE IN FRASTRUCTURE (P) LTD. 100 - K, BASEMENT, MILAP BHAWAN, BAHADURSHAH ZAFFAR MARG, I.P. ESTATE, NEW DELHI FOR COLLECTING ADVANCES FROM CUSTOMERS AGAINST BOOKING OF P L OTS/FLATS. ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 22 3. THAT THE DETAILS OF ADVANCES COLLECTED BY M/S MAHAMEDHA BUILDERS FROM CUSTOMERS A GAINST BOOKING OF PLOTS/FLATS AND REMITTED TO M/S STRIDE INFRASTRUCTURE (P) LTD, IS AS UNDER: SR. NO. ASSESSMENT YEAR AMOUNT (RS.) I) 2007 - 08 17,28,000/ - II) 2008 - 09 2,90,56,000/ - III) 2009 - 10 10,92,872/ - IV) 2010 - 11 4,84,06,128/ - TOTAL 8,02,83,000/ - 4. THAT THE ENTIRE ADVANCES RECEIVED BY M/S MAHAMEDHA BUILDERS STAND CREDITED IN ITS BANK ACCOUNTS AND THEREAFTER REMITTED TO M/S STRIDE INFRASTRUCTURE (P) LTD. 5. THAT I AM HAVING PAN NO. AGQPS6977A AND DULY ASSESSED TO TAX WITH WARD NO. 2 (2), GHAZIABAD S D/ - DEPONENT VERIFICATION I, THE ABOVE NAMED DEPONENT DO HEREBY VERIFY THAT THE CONTENTS OF THE ABOVE AFFIDAVIT IN PARA 1 TO 5 ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. VERIFIED TODAY THE 15 TH DAY OF MARCH 2013 AT GHAZIABAD. SD/ - DEPO NENT 1 4 . COPY OF ACCOUNT OBTAINED FROM THE SAID FIRM M/S MAHAMEDHA BUILDERS IS PLACED AT PAGE NOS. 56 & 57 OF THE ASSESSEE S PAPER BOOK. SIMILARLY, CONFIRMATION OF ACCOUNTS FROM M/S SUPERIOR ASSOCIATES IS PLACED AT PAGE NO. 61 AND THE AFFIDAVIT OF SH. SUN IL SINGH PROPRIETOR OF M/S SUPERIOR ASSOCIATES IS PLACED AT PAGE NO. 62 OF THE ASSESSEE S ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 23 PAPER BOOK. THE CONTENTS OF THE AFORESAID AFFIDAVITS HAS NOT BE EN DOUBTED. T HE ASSESSEE ALSO FURN ISHED THE AFFIDAVIT OF SH. RAJ SINGH AT PAGE NOS. 79 & 80 WHEREIN IT HAS BEEN STATED THAT BEING A DIRECTOR OF THE ASSESSEE COMPANY HE ENTERED INTO AN AGREEMENT WITH OTHER THREE COMPANIES NAMELY, M/S NUTECH BUILDCON P LTD., M/S NUAGE BUILDCON P LTD. AND M/S GAIN INFRASTRUCTURE P LTD. ANOTHER AFFIDAVITS FROM THE DIRECTO RS OF THE AFORESAID COMPANY WITH WHOM SH. RAJ SINGH ENTERED INTO AN AGREEMENT IN CAPACITY OF DIRECTOR OF THE ASSESSEE COMPANY ARE PLACED AT PAGE NOS. 83 TO 88 OF THE ASSESSE S PAPER BOOK. IN THE SAID AFFIDAVITS IT HAS BEEN MENTIONED THAT THE AGREEMENT WAS EXECUTED TO CARRY ON THE REAL ESTATE BUSINESS MAINLY TO DEVELOP AND CONSTRUCT GROUP HOUSING PROJECT ON THE LAND OWNED BY THEM. THE ASSESSEE ALSO FURNISHED THE AFFIDAVIT OF SH. SUNIL SINGH PROPRIETOR OF M/S SUPERIOR ASSOCIATES, COPY OF THE SAME IS PLACED AT PAGE NO. 62 OF THE ASSESSEE S PAPER BOOK AND READS AS UNDER: I, SUNIL SINGH S/O SH. DAYA SINGH , AGED 40 YEARS, R/O D - 198 , SEC - 47, NOIDA, DO HEREBY SOLEMNLY AFFIRM AND DECLARE AS UNDER: - 1. THAT I AM PROPRIETOR OF M/S SUPERIOR ASSOCIATES, D - 198, SEC - 47, NO IDA. 2. THAT I HAVE COLLECTED A SUM OF RS.5,19,40,000/ - DURING THE FINANCIAL YEAR 2009 - 10 FROM PROSPECTIVE BUYERS OF PLOTS/FLATS. ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 24 3. THAT THE ABOVE ENTIRE ADVANCE AMOUNT STAND CREDITED IN MY BANK ACCOUNTS AND THEREAFTER REMITTED TO M/S STRIDE INFRASTRUCTURE (P ) LTD. 4. THAT MY PAN IS BDLPS1201G SD/ - DEPONENT VERIFICATION I, THE ABOVE NAMED DEPONENT DO HEREBY VERIFY THAT THE CONTENTS OF THE ABOVE AFFIDAVIT IN PARA 1 TO 4 ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. VERIFIED TODAY THE 15 TH DAY O F MARCH 2013 AT GHAZIABAD. SD/ - DEPONENT THE CONTENTS OF THE AFORESAID AFFIDAVIT ARE ALSO NOT REBUTTED BY BRINGING COGENT MATERIAL ON RECORD. 1 5 . IN THE PRESENT CASE, IT APPEARS THAT NEITHER THE AO NOR THE LD. CIT(A) APPRECIATED THE FACTS IN RIGHT PERS PECTIVE AND DID NOT MAKE THE FURTHER INQUIRY FROM THOSE PERSONS WHO FURNISHED THE CONFIRMATION S AND AFFIDAVIT S STATING THEREIN THAT THE IMPUGNED AMOUNT WAS GIVEN TO THE ASSESSEE AND THE SAID AMOUNT WAS RECEIVED BY THEM FROM DIFFERENT CUSTOMERS FROM WHOM BO OKING AMOUNT FOR PLOTS/FLATS HAD BEEN COLLECTED. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE AO TO ITA NO. 5349/DEL/2016 STRIDE INFRASTRUCTURE (P) LTD. 25 BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 1 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . (O RDER PRONOUNCED IN THE OPEN COURT ON 15 /0 5 /2017 ) SD/ - SD/ - ( BEENA A. PILLAI ) (N. K . SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 /05 /2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR