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2019 (6) TMI 1471 - AT - Income TaxAddition u/s 68 - bogus loan - Additions made on account of loan taken by the assessee from M/s.Golden Agro Products Pvt. Ltd.- HELD THAT:- Company had advanced loans during the year to the assessee from refund of loan received from M/s.Ali Mohammed Qasim Duberia, whom the company had advanced the loans in May, 2012. In this respect, an affidavit had also been filed by the said person. Even otherwise the loan received from the company cannot be doubted as bogus because the AO had failed to establish that M/s Golden Agro Products Co. is a shell company. The AO could not prove or record that there was cash deposits or cash withdrawals in the bank account either by the assessee or the directors of the company. In the case of loan from creditors is concerned, the same could not be enquired by the Assessing Officer as the enquiry of source of source is not the requirement of law as had been held in the case of CIT Vs. Nirav Modi [2016 (6) TMI 1004 - BOMBAY HIGH COURT] and CIT Vs. Pr.CIT Vs. Veedhata Tower Pvt. Ltd. [2018 (4) TMI 1004 - BOMBAY HIGH COURT] - Although Assessing Officer had commented upon the financials of the company, who had failed to establish on record that the said company i.e., M/s.Golden Agro Products Pvt. Ltd., was a shell company and he also not brought any anomaly in the banking transactions of the company, while granting loan to the assessee. Thus, when we have upheld that the loan taken from M/s.Golden Agro Products Pvt. Ltd cannot be treated as bogus. Thus the interest paid on such loan cannot be disallowed. Additions under the head “capital gains‟ - re-development of the tenanted property - Transfer u/s 2(47) - HELD THAT:- Clause-4 provided that the new building was to be constructed in the space available behind the existing building, without causing any hardship or harassment to the current tenants. According to Clause-12, the new building would be ready within 3 years from the receipt of the commencement certificate. As per the terms of the agreement, the owners have agreed that during the operation of the agreement and till the tenants were put in the possession of the alternate accommodation on ownership basis, the tenancy rights of the tenants/occupants including the tenant/occupant herein, shall be treated as continued intact, secured and undisturbed as covered by the Maharashtra Rent Control Act, 1999 - terms of the agreement clearly reflects that there was no surrender of tenancy on the date of agreement i.e., 17-09-2012, because as per the clauses of the agreement, the obligation of the assessee was to hand over the possession of its tenanted flat to the developer, only in exchange of a flat in the re-developed new building. The handing over of the flat would be completed only when the re-developed building was constructed and possession is given to the assessee. Thus in this way, only when the assessee gets possession of the new flat in the re-developed building, then he loses the rights as tenant in the tenanted premises. Hence, considering those facts, it cannot be treated as that of transfer as defined u/s. 2(47) of the Income Tax Act. Once there is no transfer, there is no question of invocation of the provisions of Section 50C of the Act. Neither the new property was received by the assessee nor parted with his tenancy right/tenanted property. The assessee continued to be the tenant of the property, which has been established by payment of rents subsequent to the execution of the agreement with the developer. Thus, CIT(A) also rightly concluded that this cannot be treated as a case involving ‘transfer’ as per Section 2(47) - once there is no surrender of tenancy rights, the action of the AO in computing the valuation of the tenancy right is not justified. Hence, we uphold the action of Ld.CIT(A) in deleting the addition under the head “capital gain’. - Decided in favour of assessee.
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