Gurdass Garg,, Bathinda vs Department Of Income Tax on 22 January, 2014

Sl.No. Name of the person Amount Date of Date on which advance payment was received back

1. Sh.Sunil Kumar Bansal 18,00,000 03.12.2008 24.03.2009 S/o Sh. Girdhari Lal, Bathinda, 27,00,000 04.12.2008 24.03.2009

2. Sh. Subhash Goyal C/o 11,00,000 05.09.2008 30.03.2009 M/s. Subhash Auto Home, Bathinda 3 M/s. Neha Enterprises 5,00,000 01.04.2008 16.04.2008 Prop. Sh. Tarlochan Kumar S/o Sh.Raj Kumar, Bathinda.

S.No. Name of the Date               Debit      Date of Credit            Interest
      person                         balance    credit  amount            @
                                                                          15.875%



1.     Sh.Sunil     Kumar    3.12.2008    18,00,000   24.3.2009    1,800,000   212.625
       Bansal S/o Sh.
       Girdhari        Lal   04.12.2008   27,00,000   24.3.2009    2,700,00
       Bhatinda
2.     Sh.Subhash Goyal      05.09.2008   1,100,000   10.03.2009   1,00,000    97,694
       C/o M/s. Subhash
       Auto         Home,
       Bathinda
3.     M/s.           Neha   01.04.2008   500,000     16.04.2008   500,000     3.281
       Enterprises   Prop.
       Sh        Tirlochan
       Kumar S/o Sh. Rai
       Kumar Bathinda
4.     Smt. Seema Mittal                  500.000                              1.094

5.     Smt. Anu                           179.200                              28.224

6.     M/s. Saree Palace     01`04.2008   3,000,000   06.03.2009   3,00,000    433.133

                                                                               776,043

4. The assessee submitted the reply which is available at pages 8 to 14 of AO's order. The AO considered the reply of the assessee and submitted that it is correct that payment of Rs.1,78,150/- has been made to the government on account of purchase of stamp papers for registration of such title deeds of the said properties but no evidence regarding payment to the Arji Navis for drafting/writing the registration deeds has been furnished. Hence, the value of Rs.1,78,150/- made on account of purchase of stamp duty papers is liable to be deducted from the value of stock by considering the contravention of violation of section 40A(3) has no weightage as the assessee is maintaining many number of bank accounts and most of the title deeds have been registered with the Registrar, Bathinda which is the place where his office as well as residence is situated. Moreover, the sellers of the land/properties are also residents of Bathinda. Hence there is no possibility of emergency or business difficulty by preparing and issuing demand drafts to the sellers. These days everyone is maintaining bank accounts and no one can deny to receive the demand draft, nor he may have any complication or difficulty in preparing or encashment of the instrument. No hardship seems to be there in purchasing of demand draft or making payment order etc. Hence, the plea taken by the assessee is devoid of logical force. The assessee has brought nothing on record to show that he made slightest of efforts to convince the sellers to accept the payments by cheque/demand draft nor he could produce any evidence that the sellers of land refused to accept cheques/demand drafts. The real estates deals are such that it normally takes 2-3 months to complete a deal and there is hardly any emergency of any sort with such a long time available with the assessee. Bank drafts can be easily prepared. There might be a chance of a cheque getting bounced but a demand draft is as good as cash and can be credited to the bank a/c of seller in one day. The conduct of both buyer and sellers is not above suspicion and the circumstances clearly indicate that no effort was made to convince the sellers of land to accept crossed cheques/demand drafts nor anything has been brought on record by the assessee to substantiate his claim. It is for the assessee to prove that there were "EXCEPTIONAL CIRCUMSTANCES" to make cash payment to purchase stock-in-trade.

10. In the result, the appeal of the Revenue in ITA No.456(Asr)/2013 is allowed.

Order pronounced in the open court on 28th February, 2014.

                   Sd/-                         Sd/-
            (H.S. SIDHU)                    (B.P. JAIN)
      JUDICIAL MEMBER               ACCOUNTANT MEMBER
Dated: 28th February, 2014
/SKR/
Copy of the order forwarded to:
   1.    The Assessee:Sh.Gurdas Garg, Bathinda.
   2.    The DCIT, Cir. 1 Bathinda.
   3.    The CIT(A)
   4.    The CIT
   5.    The SR DR, ITAT, Amritsar.
                                     True copy
                                     By order


                                     (Assistant Registrar)
                                Income Tax Appellate Tribunal,
                                Amritsar Bench: Amritsar

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