ORDER

PER MAHAVIR PRASAD - JM:

This appeal has been preferred by the revenue against the order of Ld. CIT(A) Appeal No. CIT(A)-5/ITO. Wd. 5(2)(3)/128/2015-16 dated 28.11.2016 arising from assessment order dated 27.03.2015 and Revenue has taken following grounds:-

“1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,40,00,000/- by considering the loss on termination agreement as revenue loss u/s. 28 of the Act without appreciating the fact that the financial position of the assessee was very good on records as she has also made huge investment in various mutual funds in that period.

2. The Ld. CIT(A) has erred in appreciating the fact that the bank accounts of relevant period in F.Y. 2011-12 shows investment in mutual funds and has also failed to verify that the assessee has made other investments and not paid outstanding amount to seller of subjected properly which lead to huge financial loss.

3. On the facts and circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer.

4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and the order of the Assessing Officer be restored to the above extent.

5. The appellant craves leave to add, alter and/or to amend all or any of the ground before the final hearing of the appeal.”

 2. Facts of the case are as emanates from the assessment order page no. 2 to 13 of CIT(A):-

“1. That during the year under consideration the appellant had bought a property at Kolkata Mr. Chandan Agarwal, Kolkata for Rs. 3,00,00,000/- as part of his main business activity of trading in land and properties. Accordingly an MOU was entered into with the said party on 24.02.2012 at Ahmedabad during the course of visit of Shri Chandan Agarwal at Ahmedabad. A copy of the said MOU is enclosed herewith vide Annexure-2 (Page No. 23 to 27)

2. That the following are the main terms and conditions of the above mentioned MOU entered into between the appellant, the purchaser and Shri Chandan Agarwal, the seller, which are reproduced hereunder for immediate reference, the same having an important bearing on the issue in dispute.

Clause-C: The vendor has agreed to transfer and convey the said property at or for a total consideration of Rs.3,00,00,000/- (Rupees Three Crores only) and the PURCHASER has agreed to purchase the same at or for a total consideration of Rs.3,00,00,000/- (Rupees Three Crores only) free from all encumbrances, mortgages, charges, liens, lispendenses, trust, order of acquisition/requisition, execution/attachment proceedings and all other liabilities - whatsoever upon the terms and conditions hereinafter appearing.

Clause-D: The said consideration shall be paid by the PURCHASER herein to the VENDOR herein as per the following schedule:-

By 5^th of March 2012- Rs.75,00,000/-(Rupees Seventy Five Lakhs only)

By 15th of March 2012 - Rs. 75,00,000/- (Rupees Seventy Five Lakhs only) 

By 20th of March 2012 - Rs.75,00,000/- (Rupees Seventy Five Lakhs only)

By 25th of March 2012 - Rs. 75,00,000/- (Rupees Seventy Five Lakhs only) 

Clause-G: Within 30 days of receipt of the entire consideration money, the VENDOR shall take steps to get the Deed of Conveyance registered in favour of the PURCHASER (at the cost of the PURCHASER)

Clause-H: In case the PURCHASER is unable to pay all sums due under this Memorandum of Understanding within the stipulated dates, the VENDOR shall be entitled to forfeit the amounts already received by the Vendor till that time.

3. The appellant accordingly made following payments by RTGS in terms of the above mentioned MOU.

However, in view of liquidity crunch, the appellant could not make any further payment till 25^th March, 2012 as per the terms of the MOU due to shortage of funds in the month of March, 2017 and thus requested the seller to extend the time for making the remaining payment of Rs.1,60,00,000/-.

In the