Adv. money recd. against land sold deal forfeited

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Ajay Agarwal (Querist)
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08 February 2014 Sir, in one of my case the assessee received advance of Rs. 20 Lac in Cash against land sale agreement. But this sale deal could not be matterlised, & I forfeited this amount. My Case was taken up in scrutiny under AIR. As I purchased a New land from this forfieted amount. I Submitted the copy of Sale agreement before the ITO, but he pressed for personal presence of this person who made this advance payment with source. This guy refused to co-Operate, and ITO made the addition of Rs. 20 Lac in my income. Now what steps/plea I should take in appeal before the CIT (A), because, this guy will also not co-Operate in future.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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09 February 2014 well as such it is not a taxable amount...but yes, the AO is within his right to check the veracity of your claims...

often the forfeiture route is used to move tainted money...

regardless, you can make an appeal to CIT(A). given that the person concerned is not cooperating, you can just submit whatever documentary proof you have (I hope the payment was received through cheque).

Also, you can make a request the AO/CIT(A) that the said person can be asked to present information under section 133(6). Under section 133(6), income tax department can issue notice to the said person to provide specific information as may be required.

CA MAHAVIR PARSAD GUPTA

CA MAHAVIR PARSAD GUPTA (Expert)
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10 February 2014 Dear Ajay you can make an appeal to CIT (A) with in time and produce the documentry evidence available with you like bayana agreement, letter written to the buyer to get the property registered, bank statement, and all other documents available.

also you submit in writing to CIT(A) to issue summon/notice U/s 133(6)of the I. T. Act 1961 to presence of the buyer with supporting evidence.

when you produce the supporting evidence it is the onus on the AO to prove the concealment of income.

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