Subsequently directly deal with the saler cannot rule out the role of Coordinator and coordinator also affected by the transaction under IT Act

Last updated: 17 February 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
The assessee company is engaged in the business of real estate. During this year it purchased some land in district Alwar (Rajasthan) through Shri Jagdish Beniwal, who used to coordinate in purchases between the assessee company and the sellers of the lands, being local farmers. In the course thereof, assessee advanced a sum of Rs. 88,55,000/- to Shri Jagdish Beniwal with the directions to of and on deliver the part amounts to these farmers/ sellers of the lands. The land being situated in rural areas, the sellers/ farmers insisted for cash payments, which were thus given by Shri Jagdish Beniwal out of the imprest account so advanced by the assessee through bank a/c. Shri Jagdish Beniwal disbursed the amount of Rs. 27,71,500/- by way of cash, which is questioned by AO during the course of assessment proceedings. AO issued summons u/a 131 to Shri Jagdish Beniwal to attend on 16-12-2009, as he had fallen ill, Shri Jagdish Beniwal could not attend. However, the assessee’s CA Sh. Tarun Kandhari appeared before AO and explained the nature of imprest account of Rs. 88,55,000/- paid to Shri Jagdish Beniwal for coordination of purchase of lands in Alwar. AO, however, held that the assessee had failed to explain this amount of advances and made the impugned addition as unexplained expenditure u/s 69C.

Citation :
Kirti Realtors Pvt. Ltd. (Now merged with M/s AEZ Infratech Pvt. Ltd.)C/o Dr. Ravi Gupta,D-10. Kailash Colony,New Delhi-110048.PAN/GIR No. AACCK2036M (Appellant) Vs.ITO, Ward 5(3),New Delhi.(Respondent)