ASOK KUMAR AGARWAL, Jaipur V. ACIT, Jaipur

ITA 810/JPR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5377 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY GOYAL CA SHRI
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 810/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 . SHRI ASHOK KUMAR AGARWAL, 25, DAYAL NAGAR, GOPALPURA BY PASS, JAIPUR. CUKE VS. THE ACIT, CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAMPA 9472 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI D.S. KOTHARI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.02.2016. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 4.03.2016. VKNS'K@ ORDER PER SHRI T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER OF LD. CIT (A), CENTRAL, JAIPUR DATED 09.10.2014 FOR THE A.Y. 2010-11. THE EFFECTIVE GROUNDS ARE AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 99,50,794/- MADE BY LD. AO ON ACCOUNT OF DEEMED DIVIDEND BY APP LYING THE PROVISIONS OF SECTION 2(22)(E) OF INCOME TAX ACT MO RE SO WHEN THE PAYMENT BY M/S. ASHISH BUILDCON PRIVATE LTD. TO THE ASSESSEE WAS NOT IN THE NATURE OF LOANS AND ADVANCES BUT ADVANCE AGA INST THE SALE OF THE LAND TO THE COMPANY IN THE NORMAL COURSE OF THE BUSINESS. 2 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. 2. THAT THE ORDER OF THE LD. CIT (A), CONFIRMING THE A DDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE AN D AGAINST THE LAW AND FACTS OF THE CASE. THE ORDER OF LD. CIT (A) IN THIS REGARD DESERVES TO BE SET ASIDE AND ADDITION MADE BY THE LD. AO DES ERVES TO BE DELETED. 2. THE ASSESSEE IS IN REAL ESTATE BUSINESS. HE FILE D HIS RETURN ON 21.09.2010 DISCLOSING INCOME AT RS 8,29,26,530/-. THE CASE WAS SCRUTINIZED UNDER SECTION 153A/143(3) OF THE IT ACT. BOTH THE GROUNDS OF THE ASSESSEE ARE AGAINST CONFIRMING ADDITION OF RS. 99,50.794/- ON ACCOUNT OF DEEMED DI VIDEND UNDER SECTION 2(22)(E) OF THE IT ACT. THE AO OBSERVED THAT ASSESSEE IS A DIR ECTOR IN COMPANY M/S. ASHISH BUILDCON PVT. LTD. THE ASSESSEE IS HAVING SHAREHOL DING MORE THAN 10% IN THE SAID COMPANY. IT IS NOTICED THAT ASSESSEE COMPANY HAD PA ID RS. 1,22,55,000/- AS ADVANCE TO THE ASSESSEE IN THE CURRENT ACCOUNT THROUGH WHICH D AY TO DAY TRANSACTIONS WERE BEING CARRIED OUT. THE ASSESSEE WAS HAVING ACCUMULATED R ESERVE AND SURPLUS TO THE TUNE OF RS. 99,50,794/-. THE AO FURTHER OBSERVED THAT M/S. ASHISH BUILDCON PVT. LTD IS NOT A COMPANY IN WHICH THE PUBLICS ARE SUBSTANTIALLY INTE RESTED. THE COMPANY HAD SHOWN ADVANCES TO THE ASSESSEE. THE AO GAVE REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE ON THIS ISSUE WHICH WAS REPLIED BY THE ASS ESSEE ALSO. AFTER CONSIDERING THE ASSESSEES REPLY, THE AO HELD THAT THE CONTENTION O F THE ASSESSEE WAS NOT TENABLE. THE PROVISIONS OF DEEMED DIVIDEND ARE APPLICABLE NOT ON LY TO THE LOANS AND ADVANCES BUT RATHER TO ANY PAYMENT IN THE NATURE OF LOANS AND AD VANCES. IN FACT, THE PROVISIONS OF SECTION 2(22)(E) ARE ALSO APPLICABLE TO DAY TO DAY TRANSACTIONS BETWEEN A COMPANY AND A SHAREHOLDER. HE FURTHER RELIED ON HONBLE SUPREME COURT DECISION IN THE CASE OF MISS 3 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. P SARDA VS. CIT, 229 ITR 444 (SC) ON DEEMED DIVIDEN D. HE FURTHER RELIED ON IN THE CASE OF SHYAMA CHARAN GUPTA VS. CIT, 337 ITR 511 (A LL) WHEREIN IT HAS BEEN HELD THAT AMOUNT PAID BY THE COMPANY TO ASSESSEE HOLDING MORE THAN 10% SHAREHOLDING WAS SHOWN AS ADVANCE COMMISSION PAYMENT IS DEEMED DIVID END SINCE ON THE DATE OF PAYMENT THE COMPANY DID NOT HAVE ANY LIABILITY TO P AY COMMISSION. ACCORDINGLY HE MADE ADDITION OF RS. 99,50,794/- BEING RESERVE AND SURPLUS LESS THAN AMOUNT ADVANCED BY THE COMPANY. 3. BEING AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A), WHO CONFIRMED THE ADDITION BY OBSERVING TH AT THE APPELLANT IS A DIRECTOR ALONG WITH HIS WIFE SMT. RENU AGARWAL IN M/S. ASHISH BUIL DCON PVT. LTD AND HOLDING SHARES MORE THAN 10% IN IT. THERE WAS A SEARCH AND SURVEY OPERATION CARRIED OUT AT THE RESIDENCE AS WELL AS BUSINESS PREMISES OF THE APPEL LANT ALONG WITH THAT OF COMPANY ON 22.09.2010. THE LD. A/R OF THE APPELLANT FURNISHED AN UNREGISTERED AGREEMENT TO SALE DATED 22.07.2009 BETWEEN THE APPELLANT AND TH E COMPANY. IT HAS BEEN SUBMITTED THAT THIS MONEY WAS ADVANCED IN THE NORMA L COURSE OF BUSINESS BY COMPANY AS PER THE SAID AGREEMENT TO SALE BECAUSE IT HAS BE EN GIVEN BY THE COMPANY TO THE APPELLANT AS AN ADVANCE FOR PURCHASE OF LAND. SHE HELD THIS AGREEMENT TO SALE AS UNRELIABLE EVIDENCE DUE TO IT BEING NOT REGISTERED. DURING THE COURSE OF SEARCH, THIS AGREEMENT TO SALE WAS NOT FOUND. AS PER THE IKRARN AMA, THE APPELLANT SHRI ASHOK KUMAR AGARWAL HAD AGREED TO SELL 1.0166 HECTARES OF AGRICULTURAL LAND IN VILLAGE AJAYRAJPURA, TEHSIL SANGANER TO M/S. ASHISH BUILDCO N PVT. LTD. FOR RS. 1.25 CRORE. IT 4 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. WAS MENTIONED IN THIS IKRARNAMA THAT THE COMPANY HA D PAID RS. 7.25 LACS TILL 22.7.2009 AND RS. 92.75 LACS BY 31.12.2009 AND BALANCE AMOUNT OF RS. 25 LACS WAS TO BE GIVEN ON THE DATE OF REGISTRATION. SHE ALSO CONSIDERED CLAU SE (4) OF THE AGREEMENT TO SALE WHEREIN IT HAS BEEN PROVIDED THAT IF ASSESSEE COULD NOT GET 90B APPROVAL BY 15.03.2010, THEN THIS AGREEMENT TO SALE WOULD BE DE EMED TO BE CANCELLED AND THESE AMOUNTS WILL BE RETURNED BACK. THE LD. CIT (A) PRE SUMED THAT THE IKRARNAMA WAS CANCELLED BECAUSE SANCTION UNDER SECTION 90B COULD NOT BE OBTAINED BY SHRI ASHOK KUMAR AGARWAL, THE SELLER BY 15.03.2010. SHE ALSO ASKED THE APPELLANT TO SUPPLY ANY CORRESPONDENCE UNDERTAKEN BY THE APPELLANT FOR GETT ING THE CONVERSION OF THIS LAND AS REQUIRED BY THE IKRARNAMA. THE ASSESSEE ADMITTED BE FORE HER VIDE LETTER DATED 28.08.2014 THAT AT THE TIME OF ENTERING INTO THE AG REEMENT WITH THE COMPANY CONVERSION OF LAND UNDER 90B PROCEEDINGS WAS NOT PO SSIBLE BECAUSE JDA WAS NOT ACCEPTING APPLICATIONS FOR CONVERSION OF AGRICULTUR AL LAND, THEREFORE NO CORRESPONDENCE WAS MADE BY THE APPELLANT. THUS EVEN AT THE TIME OF SIGNING THIS IKRARNAMA, THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AND AS A DIRECT OR OF THE COMPANY KNEW VERY WELL THAT THE USE OF LAND WAS NOT GOING TO BE CONVERTED UNDER 90B BY 15.03.2010, TO THAT EXTENT THIS IKRARNAMA IS VOID AB-INITIO. SHE HELD THAT IKR ARNAMA IS NOTHING BUT AN AFTER THOUGHT TO JUSTIFY THE LOANS TAKEN BY HIM FROM THE COMPANY AS ADVANCES FOR LAND TO ESCAPE THE DEEMING PROVISIONS OF SEC. 2(22)(E) OF THE ACT. THE RETURN OF THE COMPANY M/S. ASHISH BUILDCON PVT. LTD. WAS ELECTRONICALLY FILED ON 21.0 9.2010 I.E. ONE DAY PRIOR TO THE SEARCH. IN THE NOTES TO ACCOUNTS, THE AUDITOR HAS MENTIONED THAT THE COMPANY HAD GIVEN 5 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. ADVANCE TO THE APPELLANT OF RS. 91.90 LAKH. ON PER USAL OF THE AUDITED ACCOUNTS ENCLOSED WITH THE RETURN IT IS SEEN THAT EVEN THOUG H 80% PAYMENT HAD BEEN MADE BY THE COMPANY BY 31.12.2009 AS PER THIS IKRARNAMA FOR PURCHASE OF LAND, THE LAND WAS NOT INCLUDED IN THE STOCK OF THE COMPANY FOR THIS A SSESSMENT YEAR. IT IS FURTHER FOUND BY HER THAT IN BALANCE SHEET OF THE COMPANY T HIS AMOUNT HAS BEEN SHOWN IN SCHEDULE-7 UNDER THE HEAD ADVANCES RECOVERABLE IN C ASH OR IN KIND FOR WHICH VALUE WAS STILL TO BE RECEIVED. SHE HAS REPRODUCED THE SCHEDU LE-7 AT PAGE 10 OF HER ORDER. THUS IN THE RETURN FILED BY THE COMPANY A DAY PRIOR TO THE SEARCH, THE TRANSACTIONS AS PER THE IKRARNAMA HAD NOT BEEN REFLECTED BY THE COMPANY EIT HER BY WAY OF INCLUSION OF THIS LAND IN ITS STOCK OR AS AN ADVANCE RECOVERABLE IN C ASH OR KIND. SHE RELIED ON THE EVIDENCES BY WAY OF RETURN OF THE COMPANY TO HOLD T HAT THE IKRARNAMA FURNISHED BY THE APPELLANT IS UNRELIABLE EVIDENCE. ON PERUSAL OF TH E BANK ACCOUNT OF THE APPELLANT, IT IS SEEN THAT SUBSTANTIAL AMOUNTS WERE BEING FREELY WIT HDRAWN BY HIM FROM THE BOOKS OF THE COMPANY AS PER HIS PERSONAL REQUIREMENT. SHE AL SO GAVE THE EXAMPLE THAT RS. 10 LACS EACH WERE WITHDRAWN ON 10.07.2009 AND ON 13.07 .2009 FOR PERSONAL PURPOSES. OTHER WITHDRAWALS WERE ALSO MADE BY THE ASSESSEE FR OM THE COMPANY FOR ADVANCE TAX, LIC PREMIUM, REPAYMENT OF HOUSING LOAN ETC. SHE FUR THER CONSIDERED THE CASE LAWS CITED BY THE LD. A/R OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CREATIVE DYEING AND PRINTING PVT. LTD. ITA NO. 250/2009 DATED 22.09 .2010 AND THE ORDER OF THE INCOME TAX SETTLEMENT COMMISSION IN THE CASE OF M/S. CAREE R POINT INFOSYSTEMS LTD., SHRI PRAMOD KUMAR MAHESHWARI, SHRI OM PRAKASH MAHESHWARI AND SHRI NAVAL KISHORE 6 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. MAHESHWARI (S.A.NO.RJ/JP 51/2011-12/28 TO 31-IT). A FTER EXAMINING THESE ORDERS, SHE HELD THAT CASE LAWS REFERRED BY THE ASSESSEE ARE CO MPLETELY DISTINGUISHABLE FROM THE FACTS OF THE CASE OF THE APPELLANT. THEREFORE, THE FACTS OF THE CASE OF THE APPELLANT ARE COVERED BY THE FINDING OF HONBLE SUPREME COURT IN THE CASE OF ALAGSUNDARAM CHETTIAR (L) VS. CIT (2001) 252 ITR 893 (SC) AND CIT VS. MUK UNDRAY K. SHAH (2007) 290 ITR 433 (SC). ACCORDINGLY SHE CONFIRMED THE ADDITION. 4. NOW ASSESSEE IS BEFORE US. 5. THE LD. A/R SUBMITTED THAT ASSESSEE HAS EXPLAINE D BEFORE THE AO BY LETTER DATED 22.03.2013 THAT WHATEVER TRANSACTIONS TOOK PLACE BE TWEEN THE ASSESSEE AND THE COMPANY ARE FOR AGREEMENT TO SALE OF LAND. WHEN THE 90B PROCEEDINGS COULD NOT BE GOT FROM JDA, THE AGREEMENT WAS CANCELLED AND AMOUN T WAS REFUNDED TO THE COMPANY. THE ASSESSEE IS A REGULAR DEALER IN THE LAND AND CO MPANY IS ALSO DEALER IN THE LAND. THE ADVANCE TRANSACTION IS NORMAL BUSINESS TRANSACT ION AND SAME CANNOT BE TREATED AS A DEEMED DIVIDEND. HE ALSO RELIED UPON HONBLE DEL HI HIGH COURT DECISION IN CASE OF CIT VS. CREATIVE DYEING AND PRINTING PVT LTD. (SUPR A) BEFORE THE AO. THE LD. A/R ALSO FILED COPY OF AGREEMENT TO SALE EXECUTED BETWEEN AS SESSEE AND THE COMPANY BEFORE THE AO. HE HAS DRAWN OUR ATTENTION TO PAGES 71 TO 76 OF PAPER BOOK WHICH IS AGREEMENT TO SALE DATED 22.07.2009 OF KHASRA NOS. 1 05, 106, 115, 123, 124, 147, 148, 149, 151 & 156 TOTAL 10 KHASRAS HAVING AREA OF 3.05 HECTORS AT VILLAGE AJAYRAJPURA, TEHSIL SANGANER, WHEREIN THE ASSESSEE HAS 1/3 RD SHARE. THE ASSESSEE AS WELL AS COMPANY ARE ENGAGED IN THE BUSINESS OF REAL ESTATE DURING THE YEAR UNDER CONSIDERATION 7 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. AND DURING NORMAL COURSE OF BUSINESS BOTH THE PERSO NS ARE RECEIVING ADVANCES FROM THE CUSTOMERS AND THEREAFTER SELLING THE PLOTS TO THEM. THEREFORE, THIS IS A GENERAL PRACTICE OF THE TRADE TO FIRST RECEIVE ADVANCES FROM THE CUS TOMERS AND THEREAFTER SELL THE PLOTS/LAND TO THEM. SINCE THE LAND UNDER THE AGREEM ENT TO SALE COULD NOT BE GOT APPROVED FOR THE PURPOSE OF 90B FORMALITIES, THE AG REEMENT WAS CANCELLED AND AMOUNT WAS REFUNDED TO THE COMPANY. BUT LATER ON ANOTHER L AND WAS SOLD TO THE COMPANY BY THE ASSESSEE BY EXECUTING THE REGISTERED SALE DEED ON 30.03.2013. THE LD. A/R HAS DRAWN OUR ATTENTION TO PAGES 79 TO 86 OF THE PAPER BOOK AND ARGUED THAT IT IS A NORMAL PRACTICE IN THE LINE OF REAL ESTATE BUSINESS. AS P ER SECTION 2(22)(E) OF THE IT ACT SUCH ADVANCES ARE NOT COVERED UNDER THIS SECTION AND CAN NOT BE TERMED AS DEEMED DIVIDEND UNDER THIS SECTION HE RELIED UPON THE CASE OF ITAT AGRA BENCH IN CASE OF SHRI KRISHAN MURARI LAL AGARWAL VS. DCIT (2013) (9) TMI 445. TH E WORD ADVANCE HAS TO BE READ IN CONJUNCTION WITH THE WORD LOAN. USUALLY ATTRIBUT ES OF A LOAN ARE THAT IT INVOLVES THE POSITIVE ACT OF LENDING, COUPLED WITH ACCEPTANCE BY THE OTHER SIDE OF THE MONEY AS LOAN. IT GENERALLY CARRIES INTEREST AND THERE IS AN OBLIG ATION OF REPAYMENT. ON THE OTHER HAND, IN ITS WIDEST MEANING THE TERM ADVANCE MAY OR MAY NOT BE PROVED LENDING, FOR WHICH HE RELIED ON THE DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. RAJ KUMAR, 318 ITR 462 (DELHI). FURTHER HE RELIED ON THE FOLL OWING DECISIONS :- CIT VS. OM PRAKASH SURI (NO.2) 359 ITR 41 (MP) ACIT VS. SMT. G. SREEVIDYA, 138 ITD 427 (CHENNAI ITAT) PRADIP KUMAR MALHOTRA VS. CIT, 338 ITR 538 (CAL.) 8 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. CIT VS. CREATIVE DYEING AND PRINTING PVT. LTD., 3 18 ITR 476 (DELHI) CIT VS. AMBASSADOR TRAVELS P. LTD., 318 ITR 376 ( DELHI) CIT VS. ARVIND KUMAR JAIN, 2011-TIOL-790-HC-DEL-I I. 5.1. HE FURTHER ARGUED THAT IN CASE OF CAREER POINT INFOSYSTEMS LTD. (SUPRA), THE SETTLEMENT COMMISSION WHEREIN AN IDENTICAL ISSUE HA D BEEN DECIDED AGAINST THE REVENUE. THE LD. CIT (A) OBSERVED THAT ASSESEES A GREEMENT WAS UNREGISTERED AND AFTER THOUGHT, HAS NO BASIS AS IN THIS LINE OF BUSI NESS ALL THE LAND TRANSACTIONS ARE GENERALLY MADE ON AGREEMENT TO SALE TO SAVE THE STA MP DUTY AND INCREASE THE PROFITABILITY ON THAT TRANSACTION. BESIDES THIS, N UMBERS OF FORMALITIES ARE REQUIRED TO BE COMPLETED TO GET REGISTRY IN THE NAME OF PURCHASER. FURTHER, IT WAS OBSERVED THAT DURING THE COURSE OF SEARCH AGREEMENT TO SALE WAS N OT FOUND, IT IS SUBMITTED BY THE LD. A/R THAT ASSESSMENTS FOR THE A.Y 2004-05, 05-06, 06 -07 AND 07-08 WERE SCRUTINIZED UNDER SECTION 143(3) OF THE IT ACT. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, NUMBER OF EVIDENCE OF AGREEMENT TO SALE WAS GIVEN T O THE AO WHICH HAS BEEN ACCEPTED. FURTHER, OBSERVATIONS OF THE LD. CIT (A) THAT ASSESSEE KNEW THE FACT THAT THE LAND COULD NOT BE CONVERTED AS A NON AGRICULTURAL. IT IS SUBMITTED THAT JDA HAD PUBLISHED NOTIFICATION ON 10.11.2009 AND RESTRICTED THE 90B FOR A MINIMUM OF 25 ACRE. THEREAFTER THIS LIMIT WAS FURTHER REDUCED TO 10 HEC TARES. THE LD. A/R REFERRED THE DRAFT MASTER PLAN APPROVED BY THE JDA AND ARGUED THAT THI S WAS THE REASON FOR NOT GETTING THE 90B APPROVAL. WHEN LAND HAD NOT GOT REGISTERED IN THE NAME OF THE COMPANY, THEREFORE, IT COULD NOT BE INCLUDED IN THE CLOSING STOCK OF THE COMPANY. THE BALANCE AS 9 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. ON 31.03.2010 WAS NIL, THEREFORE, THIS AMOUNT HAS A LSO NOT BEEN REFLECTED UNDER THE HEAD ADVANCE RECOVERABLE IN CASH OR IN KIND. THE CASE LAW REFERRED BY THE LD. CIT (A) ARE TOTALLY ON DIFFERENT ISSUE AND DISTINGUISHABLE. IN CASE OF ALAGSUNDARAM CHETTIAR (L) VS. CIT (SUPRA) LOAN WAS ADMITTEDLY GIVEN TO THE DI RECTOR AND IN CASE OF CIT VS. MUKUNDRAY K. SHAH (SUPRA), LOAN WAS TAKEN THROUGH C OMPANY AND PARTNERSHIP FIRM FOR PURCHASE OF BOND IN THE PERSONAL NAME. THE LD. AO ALSO IGNORED THE FACT THAT AS ON 01.04.2009 IN THE BOOKS OF ACCOUNT OF THE COMPANY T HE ASSESSEE HAS BEEN SHOWN AS CREDITOR FOR RS. 1,12,17,000/- AFTER SEVERAL RECEIP TS FROM THE ASSESSEE TO COMPANY. THE PEAK DEBIT BALANCE IN THE NAME OF ASSESSEE IN THE B OOKS OF ACCOUNT OF THE COMPANY WAS RS. 91.90 LAKHS ON 10.02.2010. WHEREAS THE LD A O MADE ADDITION OF RS. 99,50,794/- WHICH IS ALSO NOT JUSTIFIABLE. ACCORDIN GLY HE REQUESTED TO DELETE THE ADDITION. 5.3. AT THE OUTSET, THE LD. D/R VEHEMENTLY SUPPORTE D THE ORDER OF LD. CIT (A) AND ARGUED THAT LD. CIT (A) HAD DISCUSSED AND GIVEN THE FINDING IN THIS ISSUE IN DETAIL AFTER CONSIDERING EACH AND EVERY ASPECT ON FACTS AND LAW, THEREFORE, SAME IS REQUIRED TO BE UPHELD. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. ON VERIFICATION OF COPY OF ACCOUNTS PLACED AT PAGES 38 TO 39 OF THE PAPER BOOK, IT IS SEEN THAT ASSESSEE HAD GIVEN MONEY TO THE COMPANY. THE O PENING BALANCE AS ON 1.4.2009 WAS RS. 1,12,17,000/-. THEREAFTER, HE WITHDREW MONE Y FROM THE COMPANY UPTO 15.7.2009. ON 18.07.2009 THE ASSESSEE AGAIN PAID T O COMPANY RS. 7 LAKHS. THEREAFTER 10 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. ASSESSEE WITHDREW VARIOUS AMOUNTS FROM THE COMPANY. ON 21.8.2009 AGAIN HE PAID RS. 2 LAKHS TO COMPANY, RS. 9.5 LAKHS ON 28.07.2009, RS . 3 LAKHS ON 13.10.2009, RS 1.25 LAKHS ON 15.10.2009, RS. 5 LAKHS ON 26.10.2009, RS. 5 LAKHS ON 29.10.2009, RS. 20 LAKHS ON 10.02.2010 AND RS. 60 LAKHS ON 10.3.2010 ( RS. 20 LAKHS EACH) AND RS.13 LAKHS ON 10.03.2010 AND RS. 1.25 LAKHS ON 10.3.2010 WHICH SHOW THAT THERE ARE NUMBERS OF TRANSACTIONS BETWEEN THE ASSESSEE AND COMPANY. FIN ALLY, THE ASSESSEES ACCOUNTS HAS BEEN SQUARED UP. THE ASSESSEE AND COMPANY ARE IN R EAL ESTATE BUSINESS. IT IS A GENERAL PRACTICE IN THE LINE OF BUSINESS THAT MOST OF THE LAND ARE PURCHASED AND SOLD ON AGREEMENT TO SALE BASIS TO SAVE THE STAMP DUTY AND TO INCREASE THE PROFIT ON THE TRANSACTIONS. THESE FACTS HAVE BEEN ACCEPTED BY TH E AO IN SCRUTINY ASSESSMENT ALSO IN NUMBER OF YEARS. THE CONDITION LAID DOWN IN THE SEC TION 2(22)(E) ARE SQUARELY APPLIED IN CASE OF THE ASSESSEE BUT ONLY ISSUE DISPUTED IS WHE THER THESE ADVANCES WERE LOAN FOR BUSINESS PURPOSES OR OTHERWISE. THE PRIMA FACIE CO PY OF ACCOUNTS IN THE BOOKS OF THE COMPANY SHOWS THAT ASSESSEE HAD PAID MUCH MORE THAN AMOUNT RECEIVED FROM THE COMPANY. THE TRANSACTIONS WERE REGULAR. THE ASSES SEE PRODUCED THE EVIDENCE BEFORE THE LOWER AUTHORITIES TO JUSTIFY THE TRANSACTION AS A BUSINESS TRANSACTION ON THE BASIS OF AGREEMENT TO SALE DATED 22.7.2009. THERE WERE CERTA IN CONDITIONS AS PER THIS IKRARNAMA, WHICH COULD NOT BE FULFILLED BY THE ASSE SSEE BUT IT DOES NOT MEAN THAT ASSESSEES LOANS AND ADVANCES ARE NOT FOR BUSINESS PURPOSES. THE LD. A/R OF THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT GETTING 90B DONE OF AGRICULTURAL LAND AT VILLAGE AJAYRAJPURA, TEHSIL SANGANER AS DRAFT MASTE R PLAN GOT CHANGED BY THE JDA BY 11 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. DRAFT NOTIFICATION DATED 10.11.2009 WHEREIN IT HAS BEEN DECIDED BY THE JDA THAT LAND USE UNDER 90B WAS TO BE APPROVED NOT LESS THAN 25 A CRES BUT IN FINAL MASTER PLAN THIS AREA HAS BEEN REDUCED TO 10 HECTARES. THE ASSESSEE FILED APPLICATION ON 23.08.2012 UNDER SECTION 90B OF THE LAND REVENUE ACT BEFORE TH E JDA WHICH WAS REJECTED BY THE JDA. THE CASE LAWS RELIED ON BY THE LD. A/R ARE SQU ARELY APPLICABLE ON THE FACTS OF THE CASE. THEREFORE, WE HOLD THAT TRANSACTIONS MADE BY THE ASSESSEE AND THE COMPANY ARE FOR BUSINESS PURPOSES AND ARE NOT DEEMED DIVIDEND U NDER SECTION 2(22)(E) OF THE ACT. ACCORDINGLY, WE ALLOW THE ASSESSEES APPEAL AND REV ERSE THE ORDER OF LD. CIT (A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 4.03.2016. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 4/03/2016. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ASHOK KUMAR AGARWAL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE ACIT, CENTRAL CIRCLE-3, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 810/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR. 12 ITA NO. 810/JP/2014 ASHOK KUMAR AGARWAL VS. ACIT. 4- ;G FD ;FN IZFKE I{K MDR HKWFE DH 90&CH] RDKLEK ] VUQEKSNU FNUAKD 15-03- 2010 RD UGHA DJOK IKRK GS RKS MDR BDJKJUKEK FUJLR E KUK TK;SXK ,OA IZKIR DH XBZ JKF'K OKIL YKSVK NH TK;SXHA