Prateek Agarwal , Kota vs Assessee

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. 291/JP/2012 fu/kZkj.k o"kZ@Assessment Year : 2008-09

Prateek Agarwal cuke ACIT, 2-PA-9, Dadabari, Kota. Vs. Circle-1, Kota.

LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGSPA 4319 E vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : Shri B.V. Maheshwari (C.A.) jktLo dh vksj ls@ Revenue by : Mrs. Neena Jeph (JCIT)

lquokbZ dh rkjh[k@ Date of Hearing : 17/03/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2015

vkns'k@ ORDER

PER: T.R. MEENA, A.M.

This is an appeal filed by the assessee against the order dated

29/02/2012 passed by the learned CIT (A), Kota for A.Y. 2008-09. The

effective grounds of appeal are as under:-

"(1) That the Ld. CIT(A) grossly erred in sustaining the part addition of Rs. 50,000/- on account of cash deposited in the Bank by the assessee. The Ld. A.O. made the addition of Rs. 1.00 Lac. The Ld. CIT(A)

2 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

allowed relief of Rs. 50,000/- and balance was sustained.

(2) That the Ld. CIT(A) grossly erred in confirming the addition of Rs. 9,00,000/- towards undisclosed investment in House at Vigyan Nagar, Kota.

The house was purchased by Kendriya Academy Vidyalaya Shiksha Samiti, the investment is shown by Samiti hence the addition in this case is wrongly made by Ld. A.O.. The Ld. A.O. made the addition of Rs. 33.00 Lacs and the Ld. CIT(A) deleted the addition of Rs. 24.00 Lacs and balance Rs. 9.00 Lac was sustained."

2. The first ground of appeal is against cash deposited in the bank

account at Rs. 1.00 lacs. The ld CIT(A) confirmed the addition of Rs.

50,000/-. The Ld. Assessing Officer observed that the assessee has

maintained bank account with Central bank of India, Kota. He deposited

Rs. One lac in this bank account. The Assessing Officer gave reasonable

opportunity of being heard on this issue, which was availed by the

assessee vide letter dated 30/12/2010 and it was submitted that the

cash deposited was from Prathana Agarwal on account of her LIC being

paid by the assessee and from sale of course data. The Assessing

Officer observed that the assessee's explanation was not found

satisfactory on the ground that no supporting evidence was filed

alongwith reply to prove that the cash was accepted from Prathana 3 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

Agarwal, therefore, he made addition of Rs. One lac U/s 68 of the

Income Tax Act, 1961 (In short the Act).

3. Being aggrieved by the order of the Assessing Officer, the

assessee carried the matter before the learned CIT(A), who had

allowed the appeal by observing that the assessee had deposited cash

of Rs. 40,000/- on 26/04/2007, Rs. 30,000/- on 06/09/2007 and Rs.

1,00,000/- on 12/01/2008. As against this, the assessee claimed that

Rs. 40,000/- was received from Prarthana Kansal in cash, Rs. 52,000/-

was received from sale of coaching material, Rs. 30,000/-, Rs. 25,000/-,

Rs. 25,000/-, Rs. 25,000/- were withdrawn on 27/10/2008, 23/10/2008,

09/10/2008 and 10/10/2008 respectively. It was seen that during the

period October to January, assessee paid a sum of Rs. 68,000/- to

Prarthana Kansal and the net cash flow from her was (-) Rs. 28,000/-.

Similarly, net cash flow from Om Prakash Sharma was (-) Rs. 31,000/-

during October to January.

In view of the above discussion, the assessee's contention that

part of the money was deposited out of cash received from his sister,

Prarthana Kansal was found unsatisfactory. However, assessee's 4 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

contention regarding sale of coaching material cannot be doubted for

the simple reason that the same has already been offered to taxation.

In view of the above, out of deposit of Rs. 1,00,000/-, source of

Rs. 50,000/- was considered as explained. Balance addition of Rs.

50,000/- is confirmed.

4. Now the assessee is in appeal before us. The learned A.R. for the

assessee has submitted that the details of cash deposited in the bank

were filed. The said amount was received from Prathana Agarwal, sister

has income of coaching and withdrawal from the bank in past. There is

a source of Rs. One lac. He again drawn our attention on copy of return

and copy of account and argued that the cash received from Prathana

Agarwal was deposited in the bank account.

5. At the outset, the learned D.R. supported the order of the Ld.

CIT(A).

6. We have heard the rival contentions of both the parties and

perused the material available on record. The Ld. CIT(A) had analysed

all cash transactions in the books of account with reference to

withdrawal made by Prathana Agarwal, his sister. Therefore, we do not 5 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

find any reason to intervene in the order of the Ld. CIT(A). Accordingly,

this ground of assessee's appeal is dismissed.

7. The second ground of appeal is against confirming the addition of

Rs. 9 lacs towards undisclosed investment in house at Vigyan Nagar,

Kota. The Assessing Officer observed that a property at 2-Chh-14,15

Vigyan Nagar, Kota was purchased by Sh. Prateek Agarwal and Sh.

Subhash Agarwal for Rs. 48 lacs. However, during the course of survey

U/s 133A of the Act at the business premises of Kendriya Academy

Vidhyalaya Shiksha Samiti, an Ikrarnama dated 18/12/2006 was

impounded. As per this Ikrarnama the said property was purchased by

them for Rs. 66 lacs. This agreement was executed by Sh. Subhash

Chand Agarwal and his son. However, Sh. Shubash Chand Agarwal

stated for that agreement that he and his son purchased the property

only for Rs. 48 lacs only. The ld Assessing Officer held that Mr.

Mahendra Bhutiyani and Smt. Kavita Sharma were sellers, had accepted

in their statements U/s 131 of the Act that they had sold the property at

Rs. 66 lacs. The Ikrarnama dated 18/12/2006 was impounded from the

premises of the assessee, which was executed by Sh. Subhash Chand

Agarwal and his son Sh. Prateek Agarwal. The difference of Rs. 18 lacs, 6 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

which was undisclosed investment of both the parties being equal share

holding in said property. The ½ share i.e. Rs. 9 lacs were added in the

income of the assessee as undisclosed investment U/s 69 of the Act. It

was further held that the said property was purchased for the purpose

of M/s Kendriya Academy Vidhyalaya Shiksha Samiti. It is further

submitted before the Assessing Officer that the payments were made

directly from the said society and the asset has been reflected in the

balance sheet of the society. He also held that it did not explain the

source of investment being made in the said property as the Ikrarnama

was executed by both the persons. Therefore, he made separate

addition of Rs. 24 lacs on protective basis in the hands of assessee.

Thus, total addition was made at Rs. 33 lacs in the income of the

assessee.

8. Being aggrieved by the order of the Assessing Officer, the

assessee carried the matter before the learned CIT(A), who had allowed

the appeal partly by observing as under:

"The assessee's contention that property was purchased by KAVSS is not acceptable for the following reasons:-

(i) If the property could not be purchased in the name of KAVSS then the same cannot be purchased in the name of anybody else, as it violates specific 7 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

provisions of law i.e. the benami Transactions Prohibition Act, 1988. As per this Act, assessee being registered owner, he has to be taken as lawful owner of the property.

(ii) The agreement and registration of property was done in favour of assessee and his father, Shri Subhash Chand Agarwal.

The assessee's contention that the property was purchased at Rs. 48.00 lakhs is not acceptable for the following reasons:-

(i) An ikrarnama was found from the possession of assessee duly signed by the owners of property wherein the value of property was agreed at Rs. 66.00 lakhs.

(ii) The owners of this property Mahendra Bhutiyani and Kavita Sharma accepted in their statement U/s 131 that the said property was sold for Rs. 66.00 lakhs. In view of the above, addition of Rs. 9.00 lakhs, (50% of Rs. 18.00 lakhs) is confirmed in the hands of the assessee. Regarding balance addition of Rs. 24.00 lakhs, it was seen that this amount was paid by KAVSS and therefore the same is treated as explained. The A.O. is directed to delete this addition. This ground of appeal is therefore partly allowed.

9. Now the assessee is in appeal before us. The learned A.R. for the

assessee submitted as under:-

8 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

This is the addition made in relation to the property situated at 2-chh-14-15, Vigyan Nagar, Kota. In course of survey, it is categorical finding that this property was purchased by Kendriya Academy Vidayalaya Shiksha Samiti to run its school and as per agreement, an amount of Rs. 24.00 lacs was paid directly from the books of the school. The school was there in the survey and the agreement was done by the assessee on behalf of the school. In relation to the investment, we have filed various documents, but no importance has been given by the learned A.O. as well as by the learned CIT (Appeals), Kota.

It has been observed by the learned CIT (Appeals), Kota that the agreement was executed by Shri Subhash Chand Agarwal and his son Shri Prateek Agarwal. It is true that in the agreement of Rs. 66.00 lacs; there are no signatures of Shri Subhash Chand Agarwal and Shri Prateek Agarwal. We have categorically submitted that these houses together were purchased for running K.G. school of the Society in Vigyan Nagar, Kota and agreement which is mentioned, has no value since it is one sided agreement. Further in relation to the payment of Rs. 48.00 lacs, we have filed the vouchers, duly signed by all the persons. However, all these things are not material here since the property was purchased by the Society and, therefore, the entire addition, if any, can be made in the Society as the investment is in the Society. In relation to the purchase of house by the Society, we have 9 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

submitted the relevant documents, but the learned CIT (Appeals) has not accepted this by observing:

(i) If the property cannot be purchased in the name of Kendriye Academy Vidyalaya Shiksha Samiti, the same cannot be purchased in the name of anybody as it violates the provisions of "Benami Transactions Act".

This is a wrong observation. In the Income Tax Act, there are so many cases and if the property is purchased by use of funds of assessee, then he is treated as beneficial owner for that property and the Income Tax law treats is as owner. It may be "Benami" or. Further, even if any investment is found in any Society at the time of survey, then the said investment is treated as investment of the society though in the name of the others. As such Benami Transaction Act is not applicable here.

(ii) The agreement is one sided agreement; no registration was done, hence it is wrong to say that the agreement and registration of property was in the name of the assessee or his father. Again he has ignored our contention that the purchase in Rs. 48 lacs by mentioning (i) Ikrarnama was found from the possession of the assessee duly signed by the seller of the property mentioning Rs. 66.00 lacs, but he has ignored to state that the said agreement was one 10 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

sided agreement left over there and it has not been signed by Shri Subhash Chand Agarwal and Shri Prateek Agarwal. Therefore, it has no value in the eye of law. In relation to the statement recorded of Shri Mahendra Bhutiani and Smt. Kavita Sharma, the statements were recorded in the back of the assessee in the case of Kendriya Academy Vidyalaya Shiksha Samiti and no cross examination was allowed with them to the assessee. Even the statement of Shri Mahendra Bhutiani and Smt. Kavita Sharma are different. All these things show that the property was purchased for the purpose of school of the society and hence it has no relation with the assessee.

The payment was perfectly made of Rs. 48.00 lacs by the society and again the society itself sold the same, therefore, the addition made in the case of assessee is totally wrong and baseless and may kindly be deleted'

10. At the outset, the learned D.R. vehemently supported the order

of the learned CIT(A).

11. We have heard the rival contentions of both the parties and

perused the material available on the record. A copy of Ikrarnama

found during the course of survey, which was impounded by the

department. The statement recorded U/s 131 of the Act of Shri 11 ITA 291/JP/2012_ Pratik Agarwal Vs. ACIT

Mahendra Bhutiyani and Smt. Kavita Sharma, who had accepted that

they received Rs. 66 lacs. The assessee did not raise any argument

before the lower authorities to cross examine the deponents even this

difference has not been explained from the books of society. Therefore,

we uphold the order of the ld. CIT(A).

12. In the result, the assessee's appeal dismissed.

Order pronounced in the open court on 10/04/2015.

Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 10th April, 2015

*Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Prateek Agarwal, Kota.

2. izR;FkhZ@ The Respondent- ACIT, Circle-1, Kota.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr¼vihy½@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. 291/JP/2012) vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar