The Pr. Commissioner Of Income Tax-2, Chandigarh v. Randhir Sood

ITA No.356 of 2018 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH **** ITA No.356 of 2018 Date of Decision: 20/3/2020 The Pr. Commissioner of Income Tax-2, Chandigarh Versus Appellant Randhir Sood Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE AVNEESH JHINGAN Present:Ms. Urvashi Dhugga, Senior Standing Counselfor the Revenue.for the Revenue. Ms. Radhika Suri, Senior Advocate with Mr. Manpreet Singh Kanda, Advocatefor the respondent. AVNEESH JHINGAN, J. **** [1]This appeal is filed under Section 260-A of the Income Tax Act, 1961 [for brevity 'the Act'] against the order dated01.01.2018 passed by the Income Tax Appellate Tribunal,Chandigarh. The assessment year involved is 2009-10. Followingsubstantial questions of law are claimed:- (1)Whether on the facts and in the circumstances of thecase and in law, the Hon'ble ITAT 1s right in upholdingthe order of the Ld. CIT(A), deleting the addition ofRs.4,46,75,000/-- made by the assessing officer foradvance money received or determining income earnedcase and in law, the Hon'ble ITAT 1s right in upholdingthe order of the Ld. CIT(A), deleting the addition ofRs.4,46,75,000/-- made by the assessing officer foradvance money received or determining income earned in this transaction with M/s Hash Builders Pvt. Ltd.,particularly when assessee hadfailed to bring on recordany agreement/contract essential to ascertain thegenuineness of transaction or adduce evidence insupport that no surplus was generated, since advancewas made to potential sellers? (11)Whether on the facts and in the circumstances of thecase and in law, the Hon'ble ITAT is not perverse inupholding the order of the Ld. CIT(A) by deleting theaddition of Rs.4,46,75,000/- made by the assessingofficer for advance money received by assessee, eventhough Rs.3,91,75,000/- out of Rs.4,46,75,000/- wasnever utilized by the assessee for making advance topotential sellers, and neither were any sale deedsexecuted as perfinding offacts by assessing officer?case and in law, the Hon'ble ITAT is not perverse inupholding the order of the Ld. CIT(A) by deleting theaddition of Rs.4,46,75,000/- made by the assessingofficer for advance money received by assessee, eventhough Rs.3,91,75,000/- out of Rs.4,46,75,000/- wasnever utilized by the assessee for making advance topotential sellers, and neither were any sale deedsexecuted as perfinding offacts by assessing officer? [2]The issue involved in the present appeal is with regard todeletion of addition made of V4,46,75,000/-. [3]The facts in brief are that TATA Housing DevelopmentCompany appointed M/s Hash Builders Pvt. Ltd. to procure land inVillage Kansal, District Mohali for its project who further authorisedthe assessee to do the needful, advance payments were received bythe assessee including the amount of addition. The Return for theassessment year was filed declaring the income of 48,33,390/-. Thecase was selected for scrutiny and a detailed questionnaire wasissued on 10.01.2011. The assessment was finalized on 29.12.2011,various additions were made and income was assessed as=6,62,72,169/-. Aggrieved of the order, an appeal was filed. The firstappellate authority partly allowed the appeal on 29.04.2015, the ITA No.356 of 2018 [3] impugned addition was deleted. Aggrieved both the partieschallenged order before the Tribunal, vide order dated 01.01.2018deletion of �4,46,75,000/- was upheld, hence the present appeal. [4]Learned counsel for the Revenue argued that assesseehad not produced the agreement with M/s Hash Builders Pvt. Ltd.authorizing him to purchase land for TATA Housing DevelopmentCompany's project. She further argued that alleged advancereceived of �4,46,75,000/- was not utilized by the assessee foradvance to the proposed sellers, rather it was utilized elsewhere andthe appellate authorities failed to appreciate the said aspects whiledeleting the addition. ITA No.356 of 2018 [3] impugned addition was deleted. Aggrieved both the partieschallenged order before the Tribunal, vide order dated 01.01.2018deletion of �4,46,75,000/- was upheld, hence the present appeal. [4]Learned counsel for the Revenue argued that assesseehad not produced the agreement with M/s Hash Builders Pvt. Ltd.authorizing him to purchase land for TATA Housing DevelopmentCompany's project. She further argued that alleged advancereceived of �4,46,75,000/- was not utilized by the assessee foradvance to the proposed sellers, rather it was utilized elsewhere andthe appellate authorities failed to appreciate the said aspects whiledeleting the addition. [5]Learned senior counsel for the assessee contended thatthe advance received is not an income. She places reliance uponSection 2(24) of the Act. Further to buttress the contention statesthat Section 56(2)(ix) was only amended in the year 2014, it is byvirtue of the said amendment that advance received was broughtwithin taxation ambit, the said amendment is not applicable for theyear in question. It is submitted that the objection i.e. agreement ofauthorisation was not produced is duly met with as the agreementdated 09.03.2007 has been placed on record in the present appeal. [6]From the perusal of the paper book, it is forthcoming thatin spite of repeated requests agreement of authorisation was neitherproduced by the assessee nor by M/s Hash Builders Pvt. Ltd. Theassessee failed to comply with the requirements of the summonsissued under Section 131 of the Act. Assessing officer made specificPANKAJ BAWEJA2020.03.20 12:16requests to furnish the detail of purchase and sale during the year,I attest to the accuracy andintegrity of this documentHigh Ciourt, Chandigarh ITA No.356 of 2018 [4] needful was not done. The information was collected by thedepartment from the Sub-Registrar's office, Chandigarh and from thebanks. On perusal of the said information it was noticed that most ofthe land deals were executed by the assessee with TATA HousingDevelopment Company through M/s Hash Builders Pvt. Ltd., furtherthat in most of the cases the sale deeds were executed by theassessee as General Power of Attorney [G.P.A.] of the land owners.The case of the assesee was that during the relevant assessmentyear no sale deed could be executed as there was litigationpending. Certain information was furnished with regard to details ofland procured for M/s Hash Builders Pvt. Ltd., both where the saledeeds were executed and where the advances were given but saledeed could not be executed but date wise and year wise detailswere not furnished. It is worth noting that huge transactions weremade by the assessee in cash. Even evidence/information withregard to sale deed executed as G.P.A. was not complete in thesense that it was not substantiated that the seller had received thesame amount as paid by M/s Hash Builders Pvt. Ltd. to theassessee. Without furnishing the relevant documents, the assesseeclaimed that no surplus was generated from the advance which waswith the assessee to the tune of �4,46,75,000/-. [7]The assessing officer, from the information collected,made the following table to establish that the amount of advancereceived was being used by the assessee for the purpose other thanprocuring land for M/s Hash Builders Pvt. Ltd.:- ITA No.356 of 2018 [5] [8]From the table reproduced, it is evident that unsecuredloan was given to Sh. Sudhir Chadha and investment of�1,00,00,000/- was made in the project of M/s Gulmohar LandconPvt. Ltd. It was claimed that �79,00,000/- was invested withSh. Darshan Singh who declined the said investment. There was oneentry of advance made to Smt. Sumti Devi for purchase of land, it isworth noting that �55,00,000/- was paid in cash. [7]The assessing officer, from the information collected,made the following table to establish that the amount of advancereceived was being used by the assessee for the purpose other thanprocuring land for M/s Hash Builders Pvt. Ltd.:- ITA No.356 of 2018 [5] [8]From the table reproduced, it is evident that unsecuredloan was given to Sh. Sudhir Chadha and investment of�1,00,00,000/- was made in the project of M/s Gulmohar LandconPvt. Ltd. It was claimed that �79,00,000/- was invested withSh. Darshan Singh who declined the said investment. There was oneentry of advance made to Smt. Sumti Devi for purchase of land, it isworth noting that �55,00,000/- was paid in cash. [9]The appellate authority while deleting the addition hastaken a tubular vision of the issue involved. The only basis was thatadvance received cannot be treated as income, the aspectsmentioned in the above para were not considered. It was not merely that the advance received was treated as income, the addition wasmade as the said money was used for purpose other than procuringthe land for TATA Housing Development Company's project and nodocument/ evidence was produced to support the claim that therewas no surplus being generated from the said advance. The aspectthat the assessee was getting the sale deeds executed as G.P.A. ofthe land owners was totally ignored. [10]The assessee successfully by with-holding theinformation which was in his possession, avoided the scrutiny. Theagreement of authorisation was not produced during the assessmentproceedings or in the appellate proceedings thereby avoiding furtherinvestigation, the same has now been produced before this Court. [11]In such circumstances, the deletion of addition of�4,46,75,000/- cannot be sustained. However, as now the agreementhas been produced, the matter is remitted back to the assessingofficer to decide the issue afresh after providing opportunity to theassessee. It is clarified that anything recorded hereinabove shall notbe construed by the assessing officer as expression on merits of theissue while deciding the remand. [12]The appeal is allowed. 20/3/2020������������� ���������������������������������������������������������������������������������������