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2022 (3) TMI 1377 - AT - Income TaxLTCG - exemption from levy of capital gains tax - business assets of the assessee proprietary business were taken over by the company - whether transaction does not constitute “transfer’ for the purposes of capital gains? - HELD THAT:- As in the case of the assessee before us goodwill is a part of the assets of the proprietary concern as per the balance sheet dated 28-2-2009 - assessee goodwill has not arisen out of succession rather it is within the assets of the proprietary concern as explained through Schedule “G’ and Schedule “A’ corresponding to the assets as per the balance sheet of the proprietary concern of the assessee. When the facts are substantially different in the decision of KANTILAL G. KOTECHA VERSUS ITO - 8 (2) (4) , MUMBAI [2016 (7) TMI 975 - BOMBAY HIGH COURT] referred by the learned D.R., the same cannot be applied to the present facts and circumstances of the assessee’s case before us. Thus, on examination of aforestated facts and circumstances and judicial pronouncements, we are of the considered view that no interference is called for in the order of the CIT(A) in deleting the addition made by the A.O holding that the provisions of sec. 47(xiv) are not applicable since the transaction does not constitute “transfer’ for the purposes of capital gains in view of the said provision. We confirm the order of the learned CIT(A) deleting the said addition and the relief provided to the assessee is sustained. Ground No. 1 of the revenue’s appeal stands dismissed. Unexplained bank deposits and the subsequent cash withdrawals - HELD THAT:- We are of the considered view that the ld. A.O should verify the sanctity and correctness of the Bank A/c No. 7922320000307 in HDFC Bank Ltd. belonging to the assessee and examine whether the funds deposited of Rs. 2,64,00,000/- in the bank account No. 07921000006316 of the HDFC Bank, whether they were from this account or not and re-adjudicate this issue in totality as per law. Needless to say that, the ld. A.O. shall comply with the principles of natural justice and provide an opportunity of hearing to the assessee. Ground No. 2 of the revenue’s appeal is allowed for statistical purposes. Undisclosed expenditure funds recorded in the seized material - CIT(A) gave benefit of telescoping adjustment and deleted the addition - HELD THAT:- When the only addition made is with regard to the bogus purchases there is no need for separate cash flow statement for telescoping unexplained expenditure. We are in conformity with the submission made by the ld. A.R since it is undisputed fact that for A.Y 2006-07 to 2008-09 and during the year under consideration unexplained cash credit on account of bogus purchases totaling to Rs. 59,58,770/- was made by the ld. A.O and the assessee did not press the addition on merit. Therefore, telescoping benefit on account of cash being available by debiting factious purchases should be allowed. Therefore, availability of cash to that extent is to be considered for telescoping against unexplained expenditure. We agree with the findings of the ld. CIT(A) that there is no justification for making separate addition on account of unexplained expenditure. The relief provided to the assessee is sustained. Ground No. 3 of the Revenue’s appeal is dismissed. Addition on account of interest income on the interest free advances - CIT-A deleted the addition - HELD THAT:- Revenue also could not bring any materials/documents on record to suggest facts otherwise and therefore, it remains undisputed fact that the assessee’s capital was in excess of advances made for non-business purposes and hence we do not find any reason for interference with the findings of the ld. CIT(A) in deleting the said addition. Therefore, the relief granted to the assessee is sustained. Ground No. 4 of the Revenue’s appeal is dismissed.
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