Mr. Randhir Sood, Mohali V. Addl. CIT, Mohali

ITA 679/CHANDI/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5334 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 22-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: NEERAJ ARORA
• Keywords: Unexplained cash credit; Business income; Additional evidence; Capital receipt
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.679/CHD/2015 ASSESSMENT YEAR: 2009-10 MR. RANDHIR SOOD VS. THE ADDL. CIT H.NO. 1, VILLAGE- KANSAL RANGE VI MOHALI MOHALI PAN NO. ALHPS6381G ITA NO.668/CHD/2015 ASSESSMENT YEAR: 2009-10 THE ITO VS. SH. RANDHIR SOOD WARD 6(4), MOHALI HOUSE NO. 1 VILLAGE KANSAL, MOHALI (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. NEERAJ ARORA REVENUE BY : SH. RAVI SARANGAL DATE OF HEARING : 04/10/2017 DATE OF PRONOUNCEMENT :01/01/2018 ORDER PER DR. B.R.R. KUMAR A.M. BOTH THE ABOVE APPEALS HAS BEEN FILED BY THE ASSESS EE AND THE REVENUE AGAINST THE COMMON ORDER OF LD. CIT(A)-2, CHANDIGA RH DT. 29/04/2015. 2. ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPE AL: 1. THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN DISMISSI NG THE GROUND OF APPEAL NO. 4 RAISED BY THE ASSESSEE AND CONFIRMING THE ACTION OF LD. ASESSING OFFICER IN MAKING ADDITION OF RS. 78,00,000/- BY TREATING THE SAME AS BOGUS LIABILITY AND CONSEQUENTLY UNDISCLOSED INCOME OF THE ASSESSEE. TH E LD. CIT(A) HAD CONFIRMED THE ADDITION JUST BY PRESUMING THAT THE SAID LIABIL ITY MIGHT BE A SEPARATE CASH TRANSACTION. THERE WAS NO SUCH LIABILITY AS ALLEGED BY THE ASSESSING OFFICER. 3. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WI THOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE AND ALLOWING RELIEF ON THAT BASIS PARTICULARLY WHEN THE ASSESSEE DID NOT FULFILL THE CONDITIONS PRESCRIBED UNDER RULE 46A AND THE ASSESSEE WAS PROVIDED SUFFICIENT OPPORT UNITIES AS IS APPARENT FROM 2 ORDER SHEET ENTERIES OF ASSESSMENT PROCEEDINGS RUNN ING INTO 17 PAGES SHOWING THAT ASSESSEE OR HIS REPRESENTATIVE ATTENDED PROCEEDINGS ON MORE THAN 24 OCCASIONS, BESIDES THE OPPORTUNITIES PROVIDED BUT N OT AVAILED BY THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 38,00,000/- M ADE BY THE A.O ON ACCOUNT OF BOGUS LIABILITY PARTICULARLY WHEN THE ASSESSEE COUL D NOT BRING ON RECORD ANY EVIDENCE TO ESTABLISH CREDITWORTHINESS OF THE ALLEG ED CREDITOR SH YASHPAL AGGARWAL AND/OR TO ESTABLISH ANY BUSINESS RELATIONS WITH THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 31,00,000/- ( RS. 40,00,000 - RS. 9,00,000) MADE BY A.O ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS OF R S. 40,00,000/- BY RELYING MERELY UPON THE SUBMISSION OF THE ASSESSEE IN ABSEN CE OF ANY CREDIBLE EVIDENCE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT(A) HAS ERRED IN PASSING ORDER U/S 250(6) READ WITH SECTION 251(1) WITHOUT DETERMINING INCOME EARNED BY ASSESSEE THROUGH TRANSACTION BETWE EN M/S HASH BUILDERS PVT. LTD AND THE ASSESSEE PARTICULARLY WHEN ASSESSEE HAS FAILED TO BRING ON RECORD ANY AGREEMENT/CONTRACT IN RESPECT OF PROPERTY TRANSACTI ON FOR WHICH HE HAS CLAIMED RECEIPT OF RS. 4,46,75,000/- FROM M/S HASH BUILDERS PVT LTD. WHICH IS THE MOST CRUCIAL DOCUMENT FOR ANY AGREEMENT 4. FIRSTLY WE SHALL DEAL WITH THE APPEAL OF THE ASS ESSEE IN ITA NO. 679/CHD/2015. ONLY ONE EFFECTIVE GROUND WAS TAKEN B Y THE ASSESSEE. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D SUBMITTED ONE BALANCE SHEET (AS ON 31.03.2009) IN MARCH, 2011 AND A LIST OF LIABILITIES AND ASSETS (AS ON 31.03.2009) ON 16.12.2011. THE ASSESSING OFFICER FO UND THAT THERE WAS A CREDIT BALANCE OF RS. 78,00,000/- AGAINST THE LAND GULMOH AR A/C' IN THE BALANCE SHEET FILED IN MARCH, 2011, BUT THIS AMOUNT WAS NOT REFLE CTED IN THE STATEMENT OF ASSETS AND LIABILITIES, WHICH WAS FURNISHED ON 16.12.2011. 6. THE ASSESSING OFFICER OBTAINED INFORMATION FROM BANK REGARDING ADDRESS OF THIS PARTY I.E. M/S GULMOHAR LANDCONS (P) LTD, I SSUED LETTER U/S 133(6) TO THIS COMPANY FOR VERIFICATION AND CONFIRMATION AND ISSUE D SUMMONS U/S 131 TO SH.'DARSHAN SINGH, M.D. OF M/S GULMOHAR LANDCONS (P ) LTD. THE ASSESSING OFFICER RECORDED HIS STATEMENT AND SH. DARSHAN SINGH HAD SU BMITTED THAT RS. 1,00,00,000/- WAS RECEIVED FROM THE ASSESSEE BY M/S GULMOHAR LANDCONS (P) LTD IN F.Y. 2008-09 AS ADVANCE FOR A PROJECT, BUT THE P ROJECT DID NOT TAKE OFF AND SO APPROXIMATELY RS. 50,00,000/- WERE RETURNED TO THE ASSESSEE IN F.Y. 2011-12 AND REMAINING AMOUNT WAS YET TO BE REFUNDED. 7. THE ASSESSING OFFICER NOTICED THAT SH. DARSHAN S INGH HAD NOT CONFIRMED THE LIABILITY OF RS. 78,00,000/- IN THE NAME OF GUL MOHAR A/C EITHER IN THE CAPACITY 3 OF M.D. OF THE COMPANY OR IN THE PERSONAL CAPACITY AND SO HE TREATED THIS AMOUNT AS BOGUS LIABILITY AND ADDED IT AS UNDISCLOS ED INCOME OF THE ASSESSEE. 8. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE LD. CIT(A), THE LD. COUNSEL FOR THE ASSESSEE HAS FILED A WRITTEN SUBMIS SION, RELEVANT PORTION OF WHICH IS REPRODUCED BELOW: 'IN THIS REGARD IT IS SUBMITTED THAT THERE WAS NO O UTSTANDING AMOUNT OF RS. 78 LACS AS ALLEGED BY THE ASSESSING OFFICER. SHRI DARS HAN SINGH HAD NEVER STATED BEFORE THE A.O. THAT ANY ADVANCE HAS BEEN GIVEN BY HIM OR HIS COMPANY, M/S GULMOHAR LANDCONS PUT LTD. IN FACT, THE ASSESSEE HA D GIVEN ADVANCE TO M/S GULMOHAR LANDCONS PVT LTD. THE ASSESSING OFFICER HA D TAKEN THE FIGURE OF RS. 78 LACS FROM ONE STATEMENT FURNISHED IN MARCH 2011. A PERUSAL OF THE SAID STATEMENT SHOWS THAT THE SAME WAS NOT A BALANCE SHEET OF THE ASSESSEE. IN FACT THE STATEMENT OF ASSETS AND LIABILITIES OF THE ASSESSEE WAS FURNISHED BEFORE THE A.O. 16-12-2011 & THERE WAS NO LIABILITY OF RS. 78 LACS IN THE NAME OF DARSHAN SINGH. SINCE NO LIABILITY OF RS. 78 LACS EXISTED IN THE BA LANCE SHEET OR THE BOOKS OF ACCOUNTS OF THE ASSESSEE, THE DISALLOWANCE WAS UNCA LLED FOR AND DESERVES TO BE DELETED.' 9. LD. CIT(A) HELD THAT THE ASSESSEE HAD HIMSELF FU RNISHED A BALANCE SHEET AS ON 31.03.2009 BEFORE THE ASSESSING OFFICER IN MARCH , 2011 AND IN THIS BALANCE SHEET, HE HAD SHOWN LIABILITY OF RS. 78,00,000/- IN LAND GULMOHAR A/C. THIS LIABILITY WAS NOT CONFIRMED BY THE COMPANY AND SO IT WAS TREA TED AS BOGUS LIABILITY BY THE ASSESSING OFFICER. LD. CIT(A) FURTHER HELD THAT SINCE THE ASSESSEE HAD FILED THIS STATEMENT AND THIS AMOUNT WAS CLEARLY MENTIONED AS LIABILITY IN LAND GULMOHAR A/C. IT IS QUITE POSSIBLE THAT THE AMOUNT RELATING TO THIS LIABILITY WAS A SEPARATE TRANSACTION IN CASH IN ADDITION TO THE AMOUNT OF RS . 1,00,00,000/- GIVEN BY THE ASSESSEE TO M/S GULMOHAR LANDCONS (P) LTD. 10. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE US. THE LD. AR REITERATED THE SUBMISSION TAKEN BEFORE THE LD. CIT(A). 11. THE LD. DR SUPPORTED THE ORDERS OF THE LOWER AU THORITIES. 12. THUS THE FACTUM OF ADVANCE OF RS. 1,00,00,000/- GIVEN TO M/S GULMOHAR LANDCONS (P) LTD. AND ALSO THE RECEIPT OF THE AMOUN TS BACK BY THE ASSESSEE HAVE NOT BEEN EXAMINED CLEARLY EITHER BY THE ASSESS ING OFFICER OR BY THE LD. CIT(A). THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 78,00,000/- ON ACCOUNT OF ASSET AND LIABILITIES STATEMENT FILED BY THE ASS ESSEE AND BASED ON THE STATEMENT OF THE SHRI. DARSHAN SINGH WHEREAS THE AMOUNT ADVANCED WAS RS. 1,00,00,000/-AS PER THE STATEMENT OF SHRI. DARSHAN SINGH. HENCE THIS ISSUE IS 4 BEING SENT BACK TO THE FILE OF ASSESSING OFFICER WI TH A DIRECTION TO EXAMINE THE ISSUE AFRESH. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13. NOW WE SHALL TAKE UP THE APPEAL FILED BY THE RE VENUE IN ITA NO. 668/CHD/2015. 14. THE GROUND NO. 2 & 3 RELATES TO ADMISSION OF AD DITIONAL EVIDENCES UNDER RULE 46A AND DELETING THE ADDITION OF RS. 38,00,000 /- ON ACCOUNT OF BOGUS LIABILITY. 15. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE REFLECTED LIABILITY OF RS. 38,00,000/- IN THE NAME OF SH. YASH PAL AGGARWAL. THE AO ASKED THE ASSESSEE TO FURNISH THE NATURE OF TRANSACTION AND TO PRODUCE SH. YASH PAL AGGARWAL WHICH THE ASSESSEE FAILED. OWING TO NON PRODUCTION OF SH. YASH PAL AGGARWAL, THE ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF RS. 38,00,000/- AS BOGUS LIABILITY AND ADDED THE SAME AS CASH CREDIT. 16. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(A) , THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASS ESSEE COULD NOT CONTACT SH. YASH PAL AGGARWAL DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND SO CONFIRMATION COULD NOT BE FILED. THE LD. COUNSEL FI LED CONFIRMATION IN THE APPELLATE PROCEEDINGS AND REQUESTED THAT THE SAME M AY BE ADMITTED UNDER RULE 46A OF THE INCOME TAX RULE, 1962, SINCE THE AS SESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE, WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER. THE LD. COUNSEL H AS ALSO SUBMITTED BEFORE THE LD. CIT(A) THAT THE ENTIRE TRANSACTION WAS THROUGH CHEQUE AND INTEREST WAS NOT CHARGED, AS THE SAID AMOUNT WAS RECEIVED IN NORMAL COURSE OF BUSINESS. LD. CIT(A) HELD THAT SINCE THE ASSESSEE COULD NOT CONTA CT SH. YASH PAL AGGARWAL AT THE TIME WHEN THE ASSESSMENT PROCEEDINGS WERE ON, H E COULD NOT OBTAIN CONFIRMATION FROM HIM AND SO HE WAS PREVENTED BY SU FFICIENT CAUSE FROM PRODUCING THE EVIDENCE, WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER. HENCE, THE EVIDENCE IN THE FORM OF CONFIRMATION FROM SH. YASH PAL AGGARWAL, FILED BY THE ASSESSEE, WAS ADMITTED B Y THE LD. CIT(A) AND FORWARDED TO THE ASSESSING OFFICER FOR COMMENTS. 17. THE ASSESSING OFFICER OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE ON THE GROUND THAT THE ASSESSEE WAS PROVIDED SUFFICIEN T OPPORTUNITY BY THE THEN 5 ASSESSING OFFICER, BUT THIS OBJECTION IS NOT TENABL E, SINCE THE ASSESSEE COULD NOT CONTACT SH. YASH PAL AGGARWAL FOR GETTING THE CONFI RMATION, WHICH WAS ASKED FOR BY THE ASSESSING OFFICER AND THIS EVIDENCE IS RELEV ANT TO THE GROUND OF APPEAL. THE ASSESSING OFFICER HAS ALSO SUBMITTED ON THE ISS UE VIDE HIS REPORT DATED 17.04.2015 AS UNDER: 'THE ASSESSEE HAS ALSO FURNISHED COPY OF BANK STATE MENTS OF SH. YASH PAL AGGARWAL TO VERIFY THE DEBIT/ CREDIT ENTRIES TOTAL AMOUNT OFRS. 38,00,000/- SHOWN BY THE ASSESSEE IN ITS BALANCE SHEET BEFORE M E (COPY ENCLOSED). THEREFORE, ALL THE ENTRIES MADE BY SH. YASH PAL AGG ARWAL WERE THROUGH ACCOUNT PAYEE CHEQUES ONLY. 1 HAVE VERIFIED THE COP Y OF LEDGER ACCOUNT OF THE ASSESSEE ALONGWITH THE CONFIRMATION OF THE AMOU NT AND BANK STATEMENTS OF SH. YASH PAL AGGARWAL. IT IS THEREFOR E REQUESTED THAT THE APPEAL OF THE ASSESSEE MAY KINDLY BE DECIDED ON MER ITS ACCORDINGLY.' 18. AS THE ASSESSING OFFICER HAD DULY VERIFIED THE RECEIPT OF THE AMOUNT FROM SH. YASH PAL AGGARWAL FROM HIS BANK STATEMENT AND T HE AMOUNT RECEIVED WAS THROUGH ACCOUNT PAYEE CHEQUE, ADVERSE INFERENCE REG ARDING THE SAME CANNOT BE DRAWN. 19. DURING THE HEARING BEFORE US THE LD. DR ARGUED THAT THE LD. CIT(A) HAS GRAVELY ERRED IN ACCEPTING THE ADDITIONAL EVIDENCES . 20. LD. AR RELIED ON THE ORDER OF THE LD. CIT(A). 21. WE HAVE GONE THROUGH THE RECORD BEFORE US. 22. THE LD. CIT(A) HAS GIVEN JUSTIFICATION IN PARA 3.2 OF THE ORDER THE REASONS FOR ACCEPTING THE ADDITIONAL EVIDENCES. THE ADDITIONAL EVIDENCES WERE ACCEPTED AS THE ASSESSEE COULD NOT CONTACT SHRI. YASHPAL AGG ARWAL DURING THE ASSESSMENT PROCEEDINGS AND A REMAND REPORT WAS ALSO CALLED FRO M THE ASSESSING OFFICER WHO IN TURN EXAMINED THE DETAILS SUBMITTED BEFORE T HE LD. CIT(A) AND FOUND NO ADVERSE MATERIAL CONTRARY TO THE SUBMISSIONS MADE A ND HENCE THE LD. CIT(A) DELETED THE ADDITION. SINCE THE ASSESSING OFFICER H AS DULY EXAMINED THE COPY OF THE LEDGER ACCOUNT AND THE CONFIRMATIONS AND NOT BR OUGHT ANY MATERIAL REBUTTING THE CONTENTION OF THE ASSESSEE, THE DECIS ION OF THE LD. CIT(A) DELETING THE ADDITION IS HEREBY CONFIRMED. 23. GROUND NO. 4 OF THE REVENUE DEALS WITH DELETION OF RS. 31,00,000/-. 24. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER NOTICED A DEPOSIT OF RS. 40,00,000/- ON 26.09.2008 IN THE BANK ACCOUNT O F THE ASSESSEE WITH SYNDICATE BANK. HE ASKED THE ASSESSEE TO EXPLAIN THE SOURCE O F THIS DEPOSIT AND THE 6 ASSESSEE HAD SUBMITTED THAT THIS AMOUNT WAS RECEIVE D BY HIM FROM ONE SH. JOGINDER SINGH TO WHOM HE HAD ADVANCED RS. 31,00,00 0/- IN CASH ON AN EARLIER OCCASION FOR SOME LAND DEAL, WHICH DID NOT MATERIAL ISE AND SH. JOGINDER SINGH HAD REFUNDED RS. 40,00,000/-. THE ASSESSEE HAD FUR NISHED PHOTOCOPY AS WELL AS ORIGINAL COPY OF AGREEMENT TO SELL EXECUTED ON 16.0 7.2008 WITH SH. JOGINDER SINGH. 25. AS PER THIS AGREEMENT TO SELL, THE AMOUNT OF RS . 31,00,000/- WAS PAID AS ADVANCE IN CASH BY THE ASSESSEE TO SH. JOGINDER SIN GH AND BALANCE AMOUNT WAS TO BE PAID BY 30.09.2008. THE ASSESSING OFFICER FOUND THAT THE SAID AGREEMENT WAS NOT EXECUTED ON JUDICIAL STAMP PAPER AND SO ITS AUTHENTICITY WAS NOT ESTABLISHED. IN RESPONSE TO NOTICE U/S 133 (6), SH. JOGINDER SINGH HAD SUBMITTED BEFORE THE ASSESSING OFFICER THAT THIS MO NEY WAS PAID BY THE ASSESSEE FOR PROCURING A PIECE OF LAND FOR THE PASSAGE TO TH E PROJECT OF TATA HOUSING, WHICH WAS LATER ON SHELVED. IT WAS ALSO SUBMITTED THAT SUBSEQUENTLY THE AGREEMENT WAS CANCELLED AND AN AMOUNT OF RS. 40,00, 000/- WAS REFUNDED IN CASH. 26. THE ASSESSING OFFICER HAS OBSERVED THAT THE AGR EEMENT WAS CANCELLED BY THE ASSESSEE AND SO AS PER TERMS OF AGREEMENT, RS. 31,0 0,000/- WAS TO BE FORFEITED BY SH. JOGINDER SINGH, BUT CONTRARY TO THAT SH. JOGINDER S INGH REFUNDED RS. 40,00,000/-; RS. 9,00,000/- MORE THAN AMOUNT PAID, WHICH WAS NOT BEL IEVABLE. FINALLY, THE ASSESSING OFFICER HELD THAT IT WAS AN AFTERTHOUGHT ON THE PAR T OF THE ASSESSEE TO MANIPULATE AND FABRICATE THE FACTS OF UNACCOUNTED CASH INTRODUCTIO N. THE ASSESSING OFFICER HAS TREATED THE ENTIRE AMOUNT OF RS. 40,00,000/- AS UNEXPLAINED CASH CREDIT. 27. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(A), THE LD. COUNSEL FOR THE ASSESSEE HAS FILED A WRITTEN SUBMIS SION, RELEVANT PORTION OF WHICH IS REPRODUCED BELOW: 'THE ADDITION MADE IS HIGHLY UNJUSTIFIED AS THE ASS ESSEE HAD PROVED THE SOURCE OF CASH DEPOSITED IN HIS BANK ACCOUNT. COPY OF CONFIRMATION FROM MR. JOGINDER SINGH IS ENCLOSED. MOREOVER SH. JOGIND ER SINGH IN REPLY TO NOTICE U/S 133(6) HAD STATED BEFORE THE A.O. THAT T HE AMOUNT OF RS. 40 LACS WERE REFUNDED TO THE ASSESSEE. AT BEST, AN ADD ITION OF RS. 9 LACS COULD HAVE BEEN MADE BY THE ASSESSING OFFICER. HOWE VER, EVEN THE SAME WOULD HAVE BEEN UNJUSTIFIED SINCE THE AMOUNT OF RS. 9 LACS RECEIVED BY THE ASSESSEE WAS A CAPITAL RECEIPT AND NOT HIS BUSI NESS INCOME OR INCOME FROM OTHER SOURCES.' 28. THE LD. CIT(A) HELD THAT AN AMOUNT OF RS. 31,00 ,000/- WAS ADVANCED BY THE ASSESSEE TO SH. JOGINDER SINGH FOR PURCHASE OF SOME LAND. LD. CIT (A) HELD 7 THAT THE ASSESSEE HAD DULY FURNISHED THE ORIGINAL A GREEMENT TO SELL DATED 16.07.2008, WHICH WAS SUBSEQUENTLY CANCELLED AND TH E ASSESSEE HAD RECEIVED BACK RS. 40,00,000/- FROM SH. JOGINDER SINGH. HE HE LD THAT IN THE INSTANT CASE, SH. JOGINDER SINGH HAD CONFIRMED TO HAVE RECEIVED THE A MOUNT OF RS. 31,00,000/- AS ADVANCE FOR SALE OF LAND AND SUBSEQUENT REPAYMENT O F RS. 40,00,000/- FOR CANCELLING THE AGREEMENT. THE LD. CIT(A) HAS CONFIR MED THE ADDITION TO THE TUNE OF RS.9,00,000/- WHICH HAS BEEN RECEIVED IN EXCESS OF THE ADVANCE AMOUNT GIVEN AND DELETED THE ADDITION OF RS.31,00,000/-. FURTHER THE LD. CIT(A) HELD THAT IF THE DEPARTMENT HAD ANY DOUBT, IT COULD HAVE ENQU IRED INTO THE SOURCE OF PAYMENT MADE OF RS. 31,00,000/- BY THE ASSESSEE, WH ICH HAS NOT BEEN DONE. 29. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER AND THE LD. AR RELIED ON THE SUBMISSION MADE BEFORE THE LOW ER AUTHORITIES AND ON THE ORDER OF THE LD. CIT(A). 30. AFTER GOING THROUGH THE MATERIAL AVAILABLE ON T HE RECORD SINCE THE AMOUNT OF RS. 31,00,000/- HAS BEEN RECEIVED BACK BY THE ASSESSEE AND THE SOURCES HAVE BEEN FULLY EXPLAINED AND CONFIRMED BY THE PAYEE, SUPPORTED BY THE AGREEMENTS WE DECLINE TO INTERFERE WITH THE ORD ER OF THE LD. CIT(A). 31. GROUND NO. 5 RELATES TO THE TRANSACTION BETWEEN THE M/S. HASH BUILDERS PVT. LTD. AND THE ASSESSEE. 32. BRIEF FACTS OF THE ISSUE ARE THAT HASH WAS APPO INTED AS AGENT OF TATA HOUSING DEVELOPMENT COMPANY LTD (HEREINAFTER REFERR ED TO AS TATA 1 ) AND HASH, IN TURN, AUTHORIZED THE ASSESSEE TO PROCURE L AND FOR THE PROJECT OF TATA IN VILLAGE KANSAL, TO WHICH THE ASSESSEE WAS WELL KNOW N AND CONVERSANT, SINCE HE WAS NATIVE OF THIS VILLAGE. THE ASSESSING OFFICER N OTICED A LARGE NUMBER OF TRANSACTIONS IN THE BANK ACCOUNT OF THE ASSESSEE AN D CALLED FOR THE LEDGER ACCOUNT OF THE ASSESSEE FROM HASH. HASH HAD INFORME D THE ASSESSING OFFICER THAT THIS AMOUNT WAS PAID TO THE ASSESSEE AS ADVANC E AGAINST LAND TO BE PURCHASED BY HIM FOR TATA. HASH HAD FURTHER CONFIRM ED THAT NO SALE DEEDS WERE EXECUTED IN RESPECT OF THE AMOUNTS ADVANCED TO THE ASSESSEE. THE ASSESSEE HAD ALSO CONFIRMED THE NATURE OF THIS TRAN SACTION AS ADVANCE AGAINST LAND. THE ASSESSING OFFICER ASKED THE ASSESSEE TO E XPLAIN AS TO WHY NO INCOME HAD BEEN DECLARED UNDER THE HAD BUSINESS INCOME ON ACCOUNT OF SALE/ PURCHASE OF LAND FOR WHICH ADVANCE OF RS. 4,46,75,0 00/- WAS RECEIVED BY HIM 8 FROM HASH AND HE EXPLAINED THAT SINCE NO SALES DEED S WERE EXECUTED WITH REFERENCE TO THE SAID ADVANCE, NO INCOME WAS REFLEC TED. THE ASSESSEE HAD ALSO CONVEYED THAT NO SURPLUS WAS GENERATED FROM THIS TR ANSACTION AS HE HAD ADVANCED THE ENTIRE AMOUNT OF RS. 4,46,75,000/- TO THE POTENTIAL SELLERS. 33. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLAN ATION OF THE ASSESSEE ON THE GROUND THAT THE SUBMISSION OF THE ASSESSEE WAS NOT BACKED BY ANY DOCUMENTARY EVIDENCES. HE ALSO OBSERVED THAT THE AM OUNT OF RS. 3,91,75,000/- WAS NEVER UTILIZED BY THE ASSESSEE FOR MAKING ADVAN CES TO THE POTENTIAL SELLERS OF LAND. HE FINALLY HELD THAT THE ASSESSEE DID NO T ADVANCE ANY AMOUNT DURING THE YEAR UNDER CONSIDERATION FOR PROPOSED DEALS OF LAND TRANSACTIONS TO BE EXECUTED WITH TATA THROUGH HASH. THE ASSESSING OFFI CER ALSO HELD THAT IF THE ASSESSEE HAD PROVED GENUINENESS OF ADVANCES PAID TO OTHERS, HE WOULD HAVE GOT THE BENEFIT OF SUCH DEDUCTION AS EXPENSES AGAIN ST THE RECEIPT OF RS. 4,46,75,000/-, BUT HE WAS NOT ABLE TO PROVE THAT. F INALLY, THE ENTIRE AMOUNT OF RS. 4,46,75,000/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 34. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD. CIT(A), ASSESSEE FILED A WRITTEN SUBMISSION, WHICH IS AS UN DER: THE ASSESSEE WAS AN AGENT OF HASH TO PROCURE LAND O N ITS BEHALF FOR THE PROJECT OF TATA AND HAD RECEIVED RS. 4,46,75,000/- FROM HAS H AS ADVANCE FOR THE PURPOSE OF PROCURING LAND IN VILLAGE KANSAL, DISTRI CT MOHALI. THE FACT OF RECEIPT OF ADVANCE IS NOT IN DISPUTE. IT IS SEEN THAT SALE DEE DS COULD NOT BE EXECUTED BY THE ASSESSEE DUE TO SOME LEGAL COMPLICATIONS AND THE MA TTER IS PENDING BEFORE HONBLE DELHI HIGH COURT EVEN TODAY. THE ASSESSEE H AS FILED RELEVANT DOCUMENTS OF COURT PROCEEDINGS. DUE TO PENDING LITIGATION, TH E LAND COULD NOT BE TRANSFERRED AND SALE DEEDS COULD NOT BE EXECUTED IN FAVOUR OF TATA. THE ASSESSING OFFICER HAS TREATED THE ENTIRE AMOUNT OF ADVANCE RECEIVED FROM HASH AS INCOME OF THE ASSESSEE. THE MAIN REASON GIVEN BY THE ASSESSING OFFICER FOR MAKING THE ADDITION IS THAT THE ASSESSEE DID NOT UT ILIZE THE ADVANCE DURING THE YEAR FOR PROPOSED DEALS OF LAND TRANSACTIONS, BUT T HE ASSESSEE COULD NOT DO IT BECAUSE OF PENDING LITIGATION. IT MAY NOT BE OUT OF PLACE TO MENTION THAT THE ASSESSING OFFICER HAS HIMSELF OBSERVED AT PARA 26 O F HIS ORDER THAT THE ASSESSEE DID NOT ADVANCE ANY MONEY DURING THE YEAR UNDER CON SIDERATION FOR PROPOSED DEALS OF LAND TRANSACTIONS TO BE EXECUTED WITH TATA THROUGH HASH, BUT THE SAME WAS DONE BECAUSE OF THE PENDING LITIGATION BEFORE H ONTDLE DELHI HIGH COURT. IN ANY CASE, ADVANCE RECEIVED BY THE ASSESSEE FROM HAS H CANNOT BE TAXED AS INCOME OF THE ASSESSEE BECAUSE OF NOT ADVANCING MON EY FURTHER TO THE POTENTIAL SELLERS OF LAND. LD. CIT(A) HELD THAT THE ADVANCE RECEIVED OF RS. 4, 46,75,000/-, CANNOT BE TREATED AS INCOME. MOREOVER, THERE IS NO EVIDENCE IN POSSES SION OF THE DEPARTMENT THAT THE ASSESSEE HAD EARNED ANY INCOME OUT OF THE ADVAN CE RECEIVED FROM HASH, WHICH COULD BE TAXED. IN VIEW OF THIS DISCUSSION, I T IS HELD THAT THE ASSESSING OFFICER WAS NOT RIGHT IN TAXING THE AMOUNT OF ADVANCE RECEI VED FROM HASH OF RS. 4,46,75,000/- AND SO THE ADDITION MADE ON THIS ACCO UNT IS DELETED. 35. BEFORE US THE LD. DR ARGUED THAT WHEN SO MUCH O F WORK HAS BEEN DONE BY THE ASSESSEE FOR THE TATA GROUP THE ASSESSEE MUS T HAVE GOT SOME 9 COMMISSION OR INCOME OUT OF THE TRANSACTIONS AND RE LIED ON THE ASSESSMENT ORDER. WHILE THE LD. AR ARGUED THAT THE AMOUNTS HAV E BEEN RECEIVED AS ADVANCES ONLY AND SINCE THE DEEDS WERE NOT MATERIAL IZED NO AMOUNT HAS BEEN EARNED BY THE ASSESSEE AND BY NO STRETCH OF IMAGINA TION THE AMOUNT RECEIVED AS ADVANCE CAN BE TREATED AS INCOME OF THE ASSESSEE . 36. WE HAVE GONE THROUGH THE DETAILS ON RECORD. THE RE WAS NO DISPUTE REGARDING THE ADVANCES RECEIVED, THE SOURCES WERE N EVER IN QUESTION. AT THE MOST THE ASSESSING OFFICER COULD HAVE ESTIMATED COM MISSION INCOME ON ACCOUNT OF TRANSACTIONS DONE THROUGH THE ASSESSEE F OR THE ACQUISITION OF PROPERTIES FOR THE COMPANIES FOR WHICH HE IS WORKIN G. INSTEAD, THE ASSESSING OFFICER HAS TREATED THE ENTIRE ADVANCES AS INCOME O F THE ASSESSEE WHICH CANNOT BE ACCEPTED AND WITHOUT ANY LEGAL OR FACTUAL BASIS. HENCE WE REFRAIN FROM INTERFERING WITH THE ORDER OF THE LD. CIT(A) I N DELETING THE ADDITION. 37. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (B.R.R.KUM AR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01/01/2018 AG COPY TO: THE ASSESSEE, THE RESPONDENT, THE CIT, THE CIT(A), THE DR