ACIT, Mohali V. Sh. Fateh Jang Singh Bajwa, Chandigarh

ITA 707/CHANDI/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2453 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Non compliance; Capital receipt
• Section: 142(1); 133A; 131; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 707/CHD/2014 ASSESSMENT YEAR: 2006-07 THE ACIT, VS. SH. FATEH JANGH SINGH, CIRCLE 6(1), CHANDIGARH CHANDIGARH PAN NO. AEARPB0933J (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RAJINDER KAUR RESPONDENT BY : SH. SUDHIR SEHGAL DATE OF HEARING : 03.11.2015 DATE OF PRONOUNCEMENT : 07. 01.2016 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER DATED 8.5.2014 OF CIT(A), CHANDIGARH RELATING TO ASSESSME NT YEAR 2006-07. 2. IN THIS APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS:- 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSESSEE WITHOU T APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 5 CR BY E QUATING THE FACTS OF THE CASE WITH THAT TO THE CASES OF SH. JATINDER SINGH VIRK , SH. MOHIT GAWRI, SH. PRECT INDER SINGH & SH. PARVEEN KAUSHAL AS THE ASSESSEE W AS MERELY A CONFIRMING PARTY IN BOTH 'CANCELLATION AGREEMENT' & 'AGREEMEN T TO SELL' AND NO MONETARY OBLIGATION WHATSOEVER WAS INCURRED BY THE ASSESSEE.' 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW. THE CIT(A) HAS ERRED IN ALLOWING THE FORFEITURE OF BIYANA AMOUNT OF RS, 5 CR, THE AUTHENTICITY OF WHICH IS HIGHLY DOUBTFUL L AND EVEN OTHERWISE ALSO THE FORFEITURE OF THAT BIYANA AMOUNT HAS NO NEXUS W HATSOEVER WITH AMOUNTS RECEIVED BY THE ASSESSEE FROM M/S MGF LTD. 3. GROUND NO.1 OF THE APPEAL IS GENERAL IN NATURE A ND, HENCE, NO COMMENTS ARE BEING OFFERED. 4. VIDE GROUND NOS. 2 & 3 OF THE APPEAL, THE REVENU E HAS CHALLENGED THE ACTION OF CIT(A) IN DELETING THE ADDITION OF RS. 5 CRORES. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE SUBMITTED HI S RETURN OF INCOME ON 28.3.2007 DECLARING TOTAL INCOME AT RS. 5,16,240/-. THE ASSESSEE HAS ALSO CLAIMED AGRICULTURAL INCOME OF RS. 8,67,500/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE A CT') ON 30.11.2007. THE ASSESSING OFFICER NOTED THAT THE OFFICE OF DCIT, CI RCLE 6(1) MOHALI CARRIED OUT CERTAIN ENQUIRIES FROM M/S MGF DEVELOPMENTS LTD. (M GF LTD.) AS PER THIS INFORMATION, M/S MGF LTD AND ITS SUBSIDIARY COMPANI ES M/S COLUMBIA HOLDING PVT. LTD MADE PAYMENTS TO CERTAIN PERSONS INCLUDING ASSESSEE. THESE PAYMENTS WERE MADE IN FEBRUARY 2006 FOR THE PURCHASE OF LAND AND AS SETTLEMENT IN PURSUANCE OF CANCELLATION OF AGREEMENT SIGNED BY TH E COMPANY IN OCTOBER 2004. THE CANCELLATION AGREEMENT WAS BASICALLY RELINQUISH MENT OF CERTAIN RIGHTS AS PER AGREEMENT BY THE COMPANY WITH SHRI PREET INDER, SHR I JATINDER SINGH VIRK, SHRI PARVEEN KAUSHAL AND SH. MOHIT GAWRI SIGNED IN OCTOB ER, 2004. ACCORDING TO THE ASSESSING OFFICER, NO LAND TRANSFER WAS INVOLVE D AS PER THE CANCELLATION AGREEMENT. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE WAS NOT CONFIRMING PARTY OF THE TWO AGREEMENTS SIGNED ON 15 .2.2006. ACCORDING TO ASSESSING OFFICER, ON THE BASIS OF ABOVE INFORMATIO N AND OTHER INFORMATION 3 GATHERED FROM DEPARTMENTAL RECORDS AND FIELD ENQUIR IES; SURVEY OPERATION U/S 133A OF THE ACT WAS CARRIED OUT ON 18.6.2009 IN THE CASE OF SHRI HARINDER PAL SINGH AND SHRI PREET INDER SINGH, SH. JATINDER SING H VIRK AND M/S MODAGE HOUSING DEVELOPMENT PVT LTD (IN WHICH SHRI PARVEEN KAUSHAL AND SHRI MOHIT GAWRI ARE DIRECTORS). THE ASSESSING OFFICER OBSERVE D THAT DURING THE SURVEY AND SUBSEQUENT INQUIRIES IT WAS GATHERED THAT SHRI PREE T INDER SINGH, SHRI PARVEEN KUSHASL, SH. MOHIT GAWRI AND SHRI F.J.S. BAJWA HAVE NOT SHOWN THE INCOME RECEIVED FROM M/S MGF LTD IN THEIR RETURNS OF INCOM E. SUBSEQUENTLY, NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 20.7. 2009 AFTER RECORDING THE REASONS. AS PER THE NOTICE ISSUED U/S 148 OF THE AC T, THE ASSESSEE WAS REQUIRED TO FILE THE RETURN WITHIN 30 DAYS OF THE RECEIPT OF THE NOTICE. HOWEVER, THE ASSESSEE DID NOT SUBMIT ANY RETURN IN RESPONSE TO N OTICE U/S 148 OF THE ACT. SUBSEQUENTLY, NOTICES U/S 131 AND 142(1) ALONGWITH QUESTIONNAIRE WERE ISSUED TO THE ASSESSEE. DUE TO THE NON COMPLIANCE OF THE NOTI CE U/S 148 / 147(1) OF THE ACT, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 31.8.2009 AND THE ASSESSEE WAS ASKED BY THE ASSESSING OFFICER AS TO W HY ASSESSMENT IN THIS CASE SHOULD NOT BE COMPLETED U/S 144 OF THE ACT. THE AS SESSEE ALSO DID NOT RESPOND TO THE SAID SHOW CAUSE NOTICE. IN THE ABOVE CIRCUMS TANCES, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 10,00,00,001/- RECEIVED F ROM M/S DEVELOPMENTS LTD AS CONFIRMING PARTY. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE, WHO WAS CONFIRMING PARTY TO THE AGREEMENT RECEIVED RS. 10,0 0,00,001/-, OUT OF WHICH RS. 9,01,00,001/- WAS PAID BY WAY OF CHEUQE AND RS. 9 L AKHS BY CASH. THE ASSESSING OFFICER NOTICED THAT THE COMPANY VIDE ITS LETTER DA TED 22.8.2009 HAS CLARIFIED THAT SHI F.J.S. BAJWA (ASSESSEE ) WAS THE CONFIRMING PAR TY. THE ROLE OF SH BAJWA WAS FURTHER CLARIFIED FROM SH JATINDER SINGH VIRK AND S H HARINDER PAL SINGH WHOSE STATEMENTS WERE RECEDED U/S 131 OF THE ACT ON 30.6. 2009. IN THEIR STATEMENTS THEY HAVE STATED THAT THE ASSESSEE HELPED TO ARRANG E THE DEAL BETWEEN THEM AND THE COMPANY M/S MJF LTD AND SHRI BAJWA DID NOT INVE ST ANY MONEY IN THE LAND. THE ASSESSING OFFICER FURTHER OBSERVED THAT AS PER THE INFORMATION OBTAINED FROM 4 THE BANK ENQUIRY, THE ASSESSEE DEPOSITED THE MONEY RECEIVED IN PURSUANCE TO THE AGREEMENT WITH M/S MJF LTD IN TWO BANK ACCOUNTS IN STATE BANK OF PATAILA, SECTOR 8, CHANDIGARH IN HIS OWN NAME. ACCORDING TO ASSESSING OFFICER, THE ASSESSEE DID NOT REFLECT THE AMOUNT OF RS. 10,00,00 01/- IN HIS RETURN OF INCOME FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSES SING OFFICER CONCLUDED THAT THE ASSESSEE HAD CONCEALED RS. 10,00,000,01/- RECEI VED BY HIM FROM M/S MGF LTD AND M/S COLUMBAIA HOLDING PVT LTD IN THE CAPACI TY OF CONFIRMING PARTY TO THE AGREEMENTS DATED 15.2.2006. HE THEREFORE, ADDED AMOUNT OF RS. 10,00,00,001/- TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) AND THE LD. CIT( A) ALLOWED A RELIEF OF RS. 5 CORES OUT OF RS. 10,00,00,001/- OBSERVING AS UNDER: - 5.2 I HAVE CONSIDERED THE FACTS OF THE ISSUE AND A LSO DISCUSSED THE MATTER IN DETAIL WITH THE ASSESSING OFFICER, TH E APPELLANT IS IN REAL ESTATE BUSINESS AND HAD ACTED AS AGENT OF M GF GROUP IN PROCURING LAND- HE HAD PAID TOKEN MONEY TO THE SELL ERS OF LAND ON BEHALF OF THE COMPANY AND ALL THE RECORDS OF TOK EN MONEY PAID WERE HANDED OVER TO MGF GROUP. HE ACTED AS CONFIRMI NG PARTY TO AGREEMENTS DATED 15.02.2006 AND HAD RECEIVED AN AMO UNT OF RS. 10,00,00,001/- FROM THE SUBSIDIARY COMPANIES OF M/S MGF LTD. THE IMPUGNED AMOUNT RECEIVED BY THE APPELLANT IS NO T CAPITAL RECEIPT AND AMOUNT IS TO BE TAXED AS BUSINESS RECEI PTS OF THE ASSESSMENT PROCEEDINGS AND SO THE CONTENTION OF THE LD. COUNSEL IN THIS REGARD IS NOT ACCEPTABLE. THE APPELLANT HAD PAID BIANA MONEY FOR BUYING MORE LAND IN ANTICIPATION THAT SUC H LAND COULD BE SOLD TO M/S MGF LTD OR ANY OTHER BIG COMPANY IN THE REAL ESTATE BUSINESS. M/S MGF GROUP DID NOT BUY FURTHER LAND FROM THE APPELLANT AND THE APPELLANT DID NOT FIND ANY BU YER SUBSEQUENTLY TO SELL THESE LANDS AND SO THE BIANA M ONEY PAID BY THE APPELLANT GOT FORFEITED, AS A RESULT OF WHICH T HE APPELLANT HAD SUFFERED BUSINESS LOSS TO THE EXTENT OF BIANA MONEY PAID BY HIM. 5 5.2.1 THE NEXT QUESTION IS REGARDING DETERMINATION OF INCOME OF THE APPELLANT, ON ACCOUNT OF VARIOUS TRANSACTIONS E NTERED INTO BY HIM. IT HAS BEEN SUBMITTED BY THE LD. COUNSEL IN THE APPELLATE PROCEEDINGS THAT ONLY THE SURPLUS AMOUNT RESULTING FROM SALE AND PURCHASE OF GOODS COULD BE BROUGHT TO TAX AND THE B ENEFIT OF INVESTMENT IN LAND IS TO BE GIVEN TO THE APPELLANT, SINCE BENEFIT IN RESPECT OF SIMILAR TYPE OF TRANSACTIONS HAS BEEN GI VEN BY THE ASSESSING OFFICER IN THE CASE OF SH. JATINDER SINGH VIRK, IN WHOSE CASE ALSO, SURVEY WAS CARRIED OUT ON THE SAME DAY. IT HAS ALSO BEEN CONTENDED BY THE LD. COUNSEL THAT BENEFIT OF P AYMENT TOWARDS FORFEITURE OF BIANA MONEY HAS BEEN ALLOWED IN THE CASE OF SH. MOHIT GAWRI AND SH. PARVEEN KAUSHAL. 5.2.2 THE ASSESSING OFFICER HAS MAINLY SUBMITTED I N THE REMAND REPORT THAT THE AGREEMENTS TO SELL FILED BY THE APP ELLANT DO NOT HAVE ANY LEGAL SANCTITY, SINCE THESE ARE NOT REGIST ERED, BUT THIS ARGUMENT OF THE ASSESSING OFFICER DOES NOT HOLD WAT ER, SINCE WITHDRAWAL OF CASH WAS MADE FROM THE BANK ACCOUNT W ITHIN A FEW DAYS PRIOR TO THE RESPECTIVE DATE(S) OF THE AGREEME NTS TO SELL, WHICH HAPPENS TO BE THE DATE(S) OF PAYMENT ALSO. MO REOVER, THERE IS NO OTHERWISE EVIDENCE AVAILABLE WITH THE DEPARTM ENT TO DISPROVE THE CONTENTION OF THE APPELLANT. 5.2.3 THE AMOUNT RECEIVED BY THE APPELLA NT FROM THE SUBSIDIARY COMPANIES OF M/S MGF LTD HAS BEEN TREATE D AS BUSINESS INCOME. IN VIEW OF WHAT HAS BEEN DISCUSSE D IN PRECEDING PARAS, BENEFIT OF FORFEITURE OF ADVANCE B Y THE SELLERS HAS TO BE ALLOWED TO THE APPELLANT. THE TOTAL BIA NA MONEY PAID IN RESPECT OF VARIOUS DEALS HAPPENS TO BE RS. 6,00, 00,000/-. A RECONCILIATION OF WITHDRAWAL OF CASH FROM THE BANK ACCOUNT WITH THE PAYMENTS AS BIANA WAS MADE AND IT WAS NOTICED T HAT THE APPELLANT HAD PAID RS. 1 ; 50,00,000/- TO SH. HARDIT SINGH AS BIANA MONEY FOR PURCHASE OF LAND ON 27,02.2006, BUT THE W ITHDRAWALS MADE FROM THE BANK ACCOUNT BETWEEN 23 & 27.02.2006 WERE OF RS. 50,00,000/- ONLY AND SO THE SOURCE OF PAYMENT OF RS . 1,00,00,000/- IS UNEXPLAINED. IN RESPECT OF OTHER A GREEMENTS TO SELL, THE APPELLANT HAD MADE SUFFICIENT WITHDRAWALS FROM HIS BANK ACCOUNT JUST A FEW DAYS PRIOR TO THE DATE OF PAYMEN T OF BIANA 6 MONEY. THUS, THE APPELLANT IS TO BE ALLOWED BENEFIT OF BIANA MONEY PAID OF RS. 5,00,00,0007- ONLY, WHICH IS TO B E DEDUCTED FROM THE TOTAL AMOUNT RECEIVED OF RS. 10,00,00,001/ - FOR WORKING OUT THE INCOME OF THE APPELLANT. THEREFORE, THE INC OME TO BE ASSESSED IN THE HANDS OF THE APPELLANT WORKS OUT TO RS. 5,00,00,001/- (10,00,00,001 - 5,00,00,000). THE ASS ESSING OFFICER IS DIRECTED ACCORDINGLY. GROUNDS OF APPEAL NOS. 3 8 6 4 ARE PARTLY ALLOWED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E ALSO PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS APPARENT FROM THE RECORDS THAT SURVEY OPERATION U/S 133 OF THE ACT WAS CARRIED OUT IN THE CASE OF M/S MODAGE HOUSING DEVELOPMENT (P) LTD AND SOME OTHER PERSONS ON 18.6. 2009. DURING SURVEY ACTION AND SUBSEQUENTLY IT CAME TO THE NOTICE OF TH E ASSESSING OFFICER THAT SHRI F.J.S. BAJWA (ASSESSEE), SHRI PREET INDER SINGH, SH . PARVEEN KAUSHAL AND SHRI MOHIT GAWRI HAVE NOT SHOWN THE INCOME RECEIVED FROM M/S MODAGE HOUSING DEVELOPMENT (P) LTD AND SOME OTHER COMPANIES IN THE IR RESPECTIVE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07. THERE IS NO DISPUTE REGARDING THE RECEIPT OF RS. 10,00,00,01/- BY THE ASSESSEE FROM M /S MGF DEVELOPMENTS LTD AND THE SAID RECEIPT WAS ADDED BY ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) ALLOWED A PARTIAL RELIEF TO THE ASSESSEE ON ACCOUNT OF FORFEITURE OF BIANA AMOUNT OF RS. 5 CR ORES. ADMITTEDLY, THE ASSESSEE IS NOT IN APPEAL AGAINST THE ADDITION OF RS. 5,00,0 0,001/- SUSTAINED BY THE ASSESSING OFFICER TREATING THE SAME AS BUSINESS INC OME, THEREFORE, BENEFIT OF FORFEITURE ADVANCE (BIANA) BY THE SELLERS WAS ALLOW ED TO THE ASSESSEE TAKING THE SAME AS WAS NORMAL LOSS. THE DETAILS OF THE BIANA M ONEY PAID IN RESPECT OF VARIOUS DEALS AS FURNISHED BY THE ASSESSEE ARE AS U NDER;- 1. THE FIRST EVIDENCE IS BIANA AMOUNT IN WHICH THE APPELLANT (FJS BAJWA) HAD ENTERED INTO AN AGREEMENT FOR PURCHASE OF 48 BI GHAS 0 BISWAS (APPROX. 10 ACRES) OF LAND FOR A SALE CONSIDERATION OF KS. 2 ,00,00,0007-PER ACRE WITH 7 SH. JAGDISH BISHNOI S/O SH. INDERJEET AND SH. RAHUL S/O SH. JAGDISH BISHNOI ON 07-03-2006. UNDER THIS AGREEMENT, A BIANA OF RS. 50 ,00,000/- WAS GIVEN TO SH. JAGDISH BISHNOI BY THE ASSESSEE (SH, F.J. S. BAJWAF IN CASH. IT IS ALSO MENTIONED IN THE SAID AGREEMENT THAT THE PROPOSED B UYER (I.E. SH. F.J.S. BAJWA) SHALL BE LIABLE TO MAKE A PART PAYMENT OF KS . L,50,00,000/~ TO THE PROPOSED SELLERS (I.E. SH. JAGDISH BISHNOI AND SH. RAHUL) BEFORE 21-03-2006. IT IS FURTHER MENTIONED IN THE AGREEMENT THAT THE BALA NCE (REMAINING) PAYMENT PERTAINING TO THE DEAL WOULD BE PAID BY THE ASSESSE E ON 31-3-2006. THE ASSESSEE HAS ALSO SUBMITTED A RECEIPT DATED 20-03-2 006 ISSUED BY SH. JAGDISH BISHNOI WHEREBY SH. JAGDISH BISHNOI HAS ACKNOWLEDGE D HAVING RECEIVED A SUM. OF 2 R OO,000/- (I,E. RS. 50,00,000/- ON 07-03-2006 + RS. 1,50,00,000/- ON 20-03-2006) IN CASH AS PER THE TERMS AND CONDITIONS MENTIONED IN THE AGREEMENT. 2. SECOND EVIDENCE IS BIANA AMOUNT IN WHICH THE APPELLANT HAD ENTERED INTO AN AGREEMENT FOR THE PURCHASE OF 4 BIGHAS 1/4 BISWA S (APPROX.. 0.835 ACRES) OF LAND FOR A SALE CONSIDERATION OF RS. 2,10,00,000 /- PER ACRE WITH SH. HARDIT SINGH S/O SH. RAUNKI RAM ON 15-03-2006. UNDER THIS AGREEMENT, A BIANA OF RS, 1,00,00,000/- WAS GIVEN TO SH. HARDIT SINGH BY THE ASSESSEE (SH. F.J.S. BAJWA) IN CASH. IT IS FURTHER MENTIONED IN THE AGRE EMENT THAT THE BALANCE (REMAINING) PAYMENT PERTAINING TO THE DEAL WOULD BE PAID BY THE ASSESSEE ON 31-3-2006. THE ASSESSEE HAS ALSO SUBMITTED A RECEIPT DATED 15- 3-2006 ISSUED BY SH. HARDIT SINGH WHEREBY SH, HARDIT SINGH HAS ACKNOWLED GED HAVING RECEIVED A SUM OFRS. 1,00,00,000/- ON 15-03-2006 IN CASH AS PE R THE TERMS AND CONDITIONS MENTIONED IN THE AGREEMENT. 3. THIRD EVIDENCE IS BIANA AMOUNT IN WHICH THE APPELLANT HAD ENTERED INTO AN AGREEMENT FOR THE PURCHASE OF 10 BIGHAS 0 BISWAS (APPROX. 2.08 ACRES) OF LAND FOR A SALE CONSIDERATION OF RS. 2,00,00,000/- PER ACRE WITH SH. HARDIT SINGH, S/O SH, RAUNKI RAM ON 09-03-2006. UNDER THIS AGREEMENT, A BIANA OF RS. 7,50,00,000/- WAS GIVEN TO SH. HARDIT SINGH BY THE ASSESSEE (SH. F.J. S. BAJWA) IN CASH. IT IS FURTHER MENTIONED IN THE AGRE EMENT THAT THE BALANCE (REMAINING) PAYMENT PERTAINING TO THE DEAL WILL BE PAID BY THE ASSESSEE ON 31- 3-2006. THE ASSESSEE HAS ALSO SUBMITTED A RECEIPT DATED 09- 03-2006 ISSUED BY SH. HARDIT SINGH WHEREBY SH. HARDIT SINGH HAS ACKNOWLED GED HAVING RECEIVED A 8 SUM OF RS. 1,50,00, 000/-ON 09-03-2006 IN CASH AS P ER THE TERMS AND CONDITIONS MENTIONED IN THE AGREEMENT. 4. FOURTH EVIDENCE IS BIANA AMOUNT IN WHICH THE APPELLANT HAD ENTERED INTO AN AGREEMENT FOR THE PURCHASE OF 7 BIGHAS 7 BISWAS (APPROX. 1.53125 ACRES) OF LAND FOR A SALE CONSIDERATION OFRS. 2,05,00, 000 /- PER ACRE WITH SH. HARDIT SINGH S/O SH. IN THE AGREEMENT THAT THE BALANCE (RE MAINING) PAYMENT PERTAINING TO THE DEAL WILL BE PAID BY THE ASSESSES ON 32-3-2006. THE ASSESSEE HAS ALSO SUBMITTED A RECEIPT DATED 27- 02-2006 ISSUED BY SH. HARDIT SINGH WHEREBY SH. HARDIT SINGH HAS ACKNOWLED GED HAVING RECEIVED A SUM OFRS. 2,50,00,000/- ON 27-02-2006 IN CASH AS PE R THE TERMS AND CONDITIONS MENTIONED IN THE AGREEMENT. IN ALL THE ABOVE BIANA AGREEMENTS LD. A.O. HAS VERI FIED THAT APPELLANT HAD PAID MONEY TO THE SELLER AS PER BIANA AGREEMENT. SO THIS IS THE AMOUNT WHICH THE APPELLANT HAD PAID AS BIANA FOR ACQUIRING LAND FOR FURTHER SELLING IT TO EITHER TO THE COMPANY MGF LTD. OR ANY OTHER COMPANY . THE LD. A. O. HAS NOT QUESTIONED THE GENUINENESS OF THE AMOUNT PAID. LD. A.O. HAD IN/ACT TESTIFIED THE AMOUNT THAT AS PER SUCH BIANA AGREEMENTS SUCH A MOUNT WAS PAID AND THE AMOUNT WAS ALSO ACKNOWLEDGED BY THE SELLERS. AS ALR EADY WRITTEN IN EARLIER PART OF THE LETTER THE ASSESSEE HAD INVESTED SUCH A MOUNT FOR FUTURE PROFITS BY TAKING HIGHER RISKS FOR FURTHER SELLING IT TO THE P ROSPECTIVE BUYERS HAVING HIGHER PROFITS IN MIND BY INVESTING SMALL AMOUNT TH OUGH THE ASSESSEE HAD NO SUCH FINANCIAL CAPACITY TO BUY SUCH LAND AT HIS OWN AND ALSO HE COULD NOT GET RIGHT BUYER AND HE U>AS NOT ABLE TO INVOLVE ANY OTH ER INVESTOR IN SUCH DEALS THE DEAL, ULTIMATELY RESULTED IN HUGE LOSSES OF THE BIANA AMOUNT TRANSACTED AS THE ASSESSEE COULD NOT GET THE MEANS TO SAVE SUCH B IANA MONEY. SUCH LOSSES AS ALREADY EXPLAINED ARE INHERENT IN SUCH TYPE OF LAND DEAL, AND THESE LOSSES ARE ORDINARY LOSSES, THE ASSESSEE DESERVED THAT THOSE L OSSES BE ALLOWED TO HIM AS ORDINARY BUSINESS LOSSES OF THE AMOUNT OF BIANA FOR FEITED. IT IS FURTHER STATED THAT, YOUR HONOUR HAD ALREADY DECIDED THE CASES OF OTHER MEMBERS OF THE GROUP WHERE THE BENEFIT OF SUCH FORFEITURE OF BIANA WAS ALLOWED TO THEM IN THESE RESPECTIVE APPEALS. SO IT IS ONCE AGAIN PRAYED THAT THE BENEFIT OF FORF EITURE OF BIANA BE ALLOWED TO THE APPELLANT.' 9 7. SHRI SUDHIR SEHGAL LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BENEFIT OF FORFEITURE OF BIANA BY THE SELLERS HAS ALSO BEEN ALLOWED IN THE CASE OF SH. MOHIT GAWRI AND SHRI PAREVEEN KAUSHAL BY THE LD. CI T(A), CHANDIGARH VIDE HIS ORDER DATED 21.1.2014. IT IS STATED THAT FACTS OF T HE ABOVE CASE ARE SIMILAR TO THE FACTS OF THE PRESENT CASE. SHRI SUDHIR SEHGAL LD. C OUNSEL FOR THE ASSESSEE CONTENDED THAT THE ORDERS PASSED BY THE CIT(A) IN T HE CASE OF MOHIT GAWRI AND SHRI PARVEEN KAUSHAL HAVE BECOME FINAL SINCE THE RE VENUE HAS NOT FILED APPEALS AGAINST THE ORDERS OF CIT(A) DATED 21.1.2014. 8. ON THE OTHER HAND, THE CONTENTION OF SMT. RAJID NER KAUR, LD. DR WAS THAT THE FACTS OF THE PRESENT CASE CANNOT BE COMPARED W ITH THE CASE OF SHRI MOHIT GAWRI, SHRI PARVEEN KUMAR, SHRI JATINDER SINGH VIRK AND SHRI PREET INDER SINGH AS THE ASSESSEE WAS MERELY A CONFIRMING PARTY IN BO TH CANCELLING THE AGREEMENT AND AGREEMENT TO SELL AND NO MONETARY OBLIGATION WH ATSOEVER WAS INCURRED BY THE ASSESSEE. 9. IN OUR CONSIDERED VIEW, THE ABOVE CONTENTION OF THE LD. DR IS NOT SUSTAINABLE. THE ASSESSEE IS IN THE REAL ESTATE BUS INESS AND AS ALSO ACTED AS AGENT OF THE MGF LTD AND ITS SUBSIDIARIES COMPANY FOR WHICH HE ALONG WITH OTHERS PERSONS ENTERED INTO AN AGREEMENT OF SALE OF LAND WITH VARIOUS PERSONS FOR PROCUREMENT OF THE LAND ON BEHALF OF THE COMPANY. I T IS CLAIMED THAT THE ASSESSEE HAD PAID TOKEN MONEY TO VARIOUS SELLERS ON BEHALF OF THE AFORESAID COMPANY AND AS SUCH LAND WAS GOT REGISTERED IN THE NAME OF THE COMPANY ONLY. THE COMPANY PAID RS. 10 CRORES TO THE ASSESSEE TO C ARRY ON THE SAME BUSINESS. THE ASSESSEE FURTHER PAID ADVANCES FOR THE LAND IN VIEW OF THE FACT THAT SUCH LAND WOULD ALSO BE SOLD TO THE COMPANY OR ANY OTHER COMPANY IN THE REAL ESTATE BUSINESS AND SUCH BIANA AGREEMENT WAS SUBMITTED BEF ORE THE LOWER AUTHORITIES AS 10 EVIDENCE OF THE AMOUNT SPENT FOR PROCUREMENT OF FUR THER LAND. SINCE THE ASSESSEE COULD NOT IMMEDIATELY FOUND THE BUYER OF S UCH LAND, THE AMOUNT GIVEN AS PER SALE AGREEMENT EVENTUALLY GOT FORFEITED AND THE ASSESSEE HAS SUFFERED A HUGE LOSS ON ACCOUNT OF SMALL AMOUNT OF BIANA. IN O UR VIEW, THE LD. CIT(A) HAS CORRECTLY ALLOWED A RELIEF OF RS. 5 CORERS BECAUSE SUCH LOSSES ARE PART AND PARCEL OF THE REAL ESTATE BUSINESS. THERE IS NO DOUBT THAT IN REAL ESTATE BUSINESS, SOME PERSONS TAKE RISK FOR FUTURE GAINS AND PROCURE LAND BIANA TO FURTHER SELL IT TO OTHERS WITH THE OBJECT TO GET HIGHER PROFITS AND TH E LAND WOULD BE GOT REGISTERED DIRECTLY IN THE NAME OF THE PURCHASER AND, THEREFO RE, DEALER WHO HAVE GIVEN BIANA ONLY SHALL SHARE PROFIT IN SUCH DEALS. IN THE INSTANT CASE, THE ASSESSEE THOUGH SPENDED MONEY WHICH HE HAD RECEIVED FROM TH E COMPANY IN PAST, WAS FURTHER GOT INVESTED IN THE BIANA AGREEMENT FOR EAR NING FUTURE PROFITS WHICH COULD NOT EVENTUALLY MATERIALIZE AS THE ASSESSEE C OULD NOT FIND THE SUITABLE BUYER FOR SUCH LAND EITHER FROM MGF LTD OR OTHER C OMPANY. THE ASSESSEE HIMSELF WAS NOT IN A POSITION TO BUY SUCH LAND DUE TO HIS FINANCIAL POSITION AND HIS BIANA AMOUNT WAS FORFEITED. IN OUR CONSIDERED VIEW, THE LD. CIT(A) HAS CORRECTLY OBSERVED THAT THE AMOUNT OF BIANA FORFEIT ED BY SELLERS IS A REVENUE LOSS TO THE ASSESSEE AND, THEREFORE, HE HAS CORRECT LY ALLOWED A DEDUCTION OF SUCH FORFEITURE TO THE ASSESSEE AS NORMAL BUSINESS LOSS . THUS, CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.01.2016 SD/- SD/- (RANO JAIN) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 07 TH JANUARY, 2016 RKK 11 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR