The Pr. Commissioner of Income-tax-2, Chandigarh v. Randhir Sood
[Citation -2020-LL-0320-20]

Citation 2020-LL-0320-20
Appellant Name The Pr. Commissioner of Income-tax-2, Chandigarh
Respondent Name Randhir Sood
Court HIGH COURT OF PUNJAB & HARYANA
Relevant Act Income-tax
Date of Order 20/03/2020
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags genuineness of transaction • advance money received • documentary evidence • purchase of land • advance received • unsecured loan
Bot Summary: 3 The facts in brief are that TATA Housing Development Company appointed M/s Hash Builders Pvt. Ltd. to procure land in Village Kansal, District Mohali for its project who further authorised the assessee to do the needful, advance payments were received by the assessee including the amount of addition. 5 Learned senior counsel for the assessee contended that the advance received is not an income. 6 From the perusal of the paper book, it is forthcoming that in spite of repeated requests agreement of authorisation was neither produced by the assessee nor by M/s Hash Builders Pvt. Ltd. The assessee failed to comply with the requirements of the summons issued under Section 131 of the Act. On perusal of the said information it was noticed that most of the land deals were executed by the assessee with TATA Housing Development Company through M/s Hash Builders Pvt. Ltd., further that in most of the cases the sale deeds were executed by the assessee as General Power of Attorney G.P.A. of the land owners. Without furnishing the relevant documents, the assessee claimed that no surplus was generated from the advance which was with 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 advance received was being used by the assessee for the purpose other than procuring land for M/s Hash Builders Pvt. Ltd.:- 4 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 5 Sr. Name of a/c Natuer of Amount Remarks of assessing No. holder account officer 1. Smt. Sumti Advance 55,00,000/- It has been stated by the Devi assessee that Rs.55,00,000/- was paid in cash to Smt. Sumti Devi for purchase of land in A.Y. 2009-10.


ITA No.356 of 2018 [1] IN HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH **** ITA No.356 of 2018 Date of Decision: 20/3/2020 Pr. Commissioner of Income Tax-2, Chandigarh Appellant Versus Randhir Sood Respondent CORAM: HON'BLE MR. JUSTICE AJAY TEWARI HON'BLE MR. JUSTICE AVNEESH JHINGAN Present: Ms. Urvashi Dhugga, Senior Standing Counsel for Revenue. Ms. Radhika Suri, Senior Advocate with Mr. Manpreet Singh Kanda, Advocate for respondent. **** AVNEESH JHINGAN, J. [1] This appeal is filed under Section 260-A of Income Tax Act, 1961 [for brevity 'the Act'] against order dated 01.01.2018 passed by Income Tax Appellate Tribunal, Chandigarh. assessment year involved is 2009-10. Following substantial questions of law are claimed:- (i) Whether on facts and in circumstances of case and in law, Hon'ble ITAT is right in upholding order of Ld. CIT(A), deleting addition of Rs.4,46,75,000/- made by assessing officer for advance money received or determining income earned 1 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 [2] in this transaction with M/s Hash Builders Pvt. Ltd., particularly when assessee had failed to bring on record any agreement/contract essential to ascertain genuineness of transaction or adduce evidence in support that no surplus was generated, since advance was made to potential sellers? (ii) Whether on facts and in circumstances of case and in law, Hon'ble ITAT is not perverse in upholding order of Ld. CIT(A) by deleting addition of Rs.4,46,75,000/- made by assessing officer for advance money received by assessee, even though Rs.3,91,75,000/- out of Rs.4,46,75,000/- was never utilized by assessee for making advance to potential sellers, and neither were any sale deeds executed as per finding of facts by assessing officer? [2] issue involved in present appeal is with regard to deletion of addition made of `4,46,75,000/-. [3] facts in brief are that TATA Housing Development Company appointed M/s Hash Builders Pvt. Ltd. to procure land in Village Kansal, District Mohali for its project who further authorised assessee to do needful, advance payments were received by assessee including amount of addition. Return for assessment year was filed declaring income of `8,33,390/-. case was selected for scrutiny and detailed questionnaire was issued on 10.01.2011. assessment was finalized on 29.12.2011, various additions were made and income was assessed as `6,62,72,169/-. Aggrieved of order, appeal was filed. first appellate authority partly allowed appeal on 29.04.2015, 2 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 [3] impugned addition was deleted. Aggrieved both parties challenged order before Tribunal, vide order dated 01.01.2018 deletion of `4,46,75,000/- was upheld, hence present appeal. [4] Learned counsel for Revenue argued that assessee had not produced agreement with M/s Hash Builders Pvt. Ltd. authorizing him to purchase land for TATA Housing Development Company's project. She further argued that alleged advance received of `4,46,75,000/- was not utilized by assessee for advance to proposed sellers, rather it was utilized elsewhere and appellate authorities failed to appreciate said aspects while deleting addition. [5] Learned senior counsel for assessee contended that advance received is not income. She places reliance upon Section 2(24) of Act. Further to buttress contention states that Section 56(2)(ix) was only amended in year 2014, it is by virtue of said amendment that advance received was brought within taxation ambit, said amendment is not applicable for year in question. It is submitted that objection i.e. agreement of authorisation was not produced is duly met with as agreement dated 09.03.2007 has been placed on record in present appeal. [6] From perusal of paper book, it is forthcoming that in spite of repeated requests agreement of authorisation was neither produced by assessee nor by M/s Hash Builders Pvt. Ltd. assessee failed to comply with requirements of summons issued under Section 131 of Act. Assessing officer made specific requests to furnish detail of purchase and sale during year, 3 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 [4] needful was not done. information was collected by department from Sub-Registrar's office, Chandigarh and from banks. On perusal of said information it was noticed that most of land deals were executed by assessee with TATA Housing Development Company through M/s Hash Builders Pvt. Ltd., further that in most of cases sale deeds were executed by assessee as General Power of Attorney [G.P.A.] of land owners. case of assesee was that during relevant assessment year no sale deed could be executed as there was litigation pending. Certain information was furnished with regard to details of land procured for M/s Hash Builders Pvt. Ltd., both where sale deeds were executed and where advances were given but sale deed could not be executed but date wise and year wise details were not furnished. It is worth noting that huge transactions were made by assessee in cash. Even evidence/information with regard to sale deed executed as G.P.A. was not complete in sense that it was not substantiated that seller had received same amount as paid by M/s Hash Builders Pvt. Ltd. to assessee. Without furnishing relevant documents, assessee claimed that no surplus was generated from advance which was with assessee to tune of `4,46,75,000/-. [7] assessing officer, from information collected, made following table to establish that amount of advance received was being used by assessee for purpose other than procuring land for M/s Hash Builders Pvt. Ltd.:- 4 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 [5] Sr. Name of a/c Natuer of Amount Remarks of assessing No. holder account officer 1. Gulmohar Investment 1,00,00,000/- During asstt. Proceeding, it Landcon was confirmed that assessee had invested this amount with M/s Gulmohar Landcon Pvt. Ltd. in project floated by company. 2. Sudhir Loan 1,25,00,000/- Assessee as well as Sh. Chadha Sudhir Chadha confirmed this transaction as unsecured loan. 3. Darshan Investment 79,00,000/- No documentary evidence of Singh this transaction furnsihed by assessee. Sh. Darshan Singh MD of M/s Gulmohar Landcon Pvt. Ltd. refused to have received any such amount by company or in his individual capacity during A.Y. 2009-10. 4. Smt. Sumti Advance 55,00,000/- It has been stated by Devi assessee that Rs.55,00,000/- was paid in cash to Smt. Sumti Devi for purchase of land in A.Y. 2009-10. detail discussion is being made in forth coming para. [8] From table reproduced, it is evident that unsecured loan was given to Sh. Sudhir Chadha and investment of `1,00,00,000/- was made in project of M/s Gulmohar Landcon Pvt. Ltd. It was claimed that `79,00,000/- was invested with Sh. Darshan Singh who declined said investment. There was one entry of advance made to Smt. Sumti Devi for purchase of land, it is worth noting that `55,00,000/- was paid in cash. [9] appellate authority while deleting addition has taken tubular vision of issue involved. only basis was that advance received cannot be treated as income, aspects mentioned in above para were not considered. It was not merely 5 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: ITA No.356 of 2018 [6] that advance received was treated as income, addition was made as said money was used for purpose other than procuring land for TATA Housing Development Company's project and no document/ evidence was produced to support claim that there was no surplus being generated from said advance. aspect that assessee was getting sale deeds executed as G.P.A. of land owners was totally ignored. [10] assessee successfully by with-holding information which was in his possession, avoided scrutiny. agreement of authorisation was not produced during assessment proceedings or in appellate proceedings thereby avoiding further investigation, same has now been produced before this Court. [11] In such circumstances, deletion of addition of `4,46,75,000/- cannot be sustained. However, as now agreement has been produced, matter is remitted back to assessing officer to decide issue afresh after providing opportunity to assessee. It is clarified that anything recorded hereinabove shall not be construed by assessing officer as expression on merits of issue while deciding remand. [12] appeal is allowed. [AVNEESH JHINGAN] [AJAY TEWARI] JUDGE JUDGE 20/3/2020 pankaj baweja 1. Whether speaking/ reasoned : Yes 2. Whether reportable : Yes 6 of 6 ::: Downloaded on - 21-03-2020 10:42:44 ::: Pr. Commissioner of Income-tax-2, Chandigarh v. Randhir Sood
Report Error