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M/s. Aakash Enterprise Versus Income Tax Officer, Ward – 2 (3) , Jalgaon

2016 (2) TMI 232 - ITAT PUNE

Addition u/s 68 - Held that:- CIT (Appeals) in his order has given a finding that the details of the brokers through whom the shops were sold or agreed to be sold was not furnished. The assessee has further failed to provide any evidence to prove the source of cash advances received from the alleged buyers. The amount of compensation which is said to be source of funds is much less than the amount of advances received or the agreement value of the shops. All the transactions in respect of advanc .....

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uring the course of business - Held that:- Before the Commissioner of Income Tax (Appeals), the assessee never raised any plea that the assessee was having sufficient own interest free funds for advancing interest free loans. This plea of sufficient funds was raised by the assessee for the first time before the Tribunal. However, the assessee has not substantiated its plea from the records. In the absence of any such evidence, the reliance on the decision of Hon'ble Bombay High Court in the case .....

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- SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Pramod Shingte For The Revenue : Shri B.C. Malakar ORDER PER VIKAS AWASTHY, JM : The appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-II, Nashik dated 26-12-2012 for the assessment year 2009-10. In appeal, the assessee has assailed the findings of Commissioner of Income Tax (Appeals) on two grounds : i. Confirming addition of ₹ 67,50,000/- as unexplained advances u/s. 68 .....

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e case of the assessee was selected for scrutiny and accordingly notice u/s. 143(2) was issued to the assessee. During the course of scrutiny assessment the Assessing Officer observed that in balance sheet the assessee has shown loans and advances to the tune of ₹ 1,82,57,320/-. All the loans and advances were found to be old except advances against property of ₹ 95,00,000/-. On further scrutiny of accounts it was found that the advances as on 31-03-2008 were to the tune of ₹ 2 .....

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ns: i. Beenakumar Badani Rs.1,50,000/- ii. Sanjay B. Satana Rs.2,00,000/- iii. Sevak Basantani Rs.7,51,061/- iv. Sharda Khadse Rs.18,00,000/- Whereas, the assessee firm had taken loan from the bank@ 15%. The Assessing Officer concluded that the assessee has diverted interest bearing funds for non-business purpose to the aforesaid persons. The Assessing Officer charged interest @ 13% on the said loans and thus made addition of ₹ 3,77,130/-. Aggrieved by the assessment order dated 20-12-2011 .....

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ere were some arithmetical errors in determination of interest on debit balances. According to the assessee the party wise interest @ 13% comes to ₹ 2,28,345/-. There is difference of ₹ 1,48,785/- in the interest computed by the Assessing Officer and the assessee. The Commissioner of Income Tax (Appeals) accepted the alternate plea of the assessee and granted relief of ₹ 1,48,785/-. Against the findings of the Commissioner of Income Tax (Appeals) the assessee is in second appea .....

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brokers for sale of shops/offices in the commercial complex known as Nath Plaza . There are 39 shops in shopping complex. The assessee has sold 20 shops out of total 39 shops. The shops are sold to farmers through broker. The assessee could not produce the details of the purchasers before the Assessing Officer as the details were available with the broker who was not available at the relevant period of time. Moreover, the business transactions at Jalgaon were done through telephonic instructions .....

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uiry before rejecting the documents. In support of his submissions, the ld. AR of the assessee placed reliance on the decision of Hon'ble Supreme Court of India in the case of Commissioner of Income-tax Vs. Orissa Corporation P. Ltd. reported as 159 ITR 78 (SC) and the decision of Tribunal in the case of Vishnu Jaiswal Vs. Commissioner of Income Tax (Appeals) reported as 137 ITD 259 (TM) (Luck.). The ld. AR further submitted that the assessee has discharged his onus by giving the details, th .....

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Commissioner of Income-tax Vs. Reliance Utilities and Power Ltd. reported as 313 ITR 340 (Bom). 5. On the other hand Shri B.C. Malakar representing the Department vehemently supported the findings of the Commissioner of Income Tax (Appeals) in confirming the addition made by the Assessing Officer. The ld. DR submitted that in proceedings before the Assessing Officer, the assessee did not give details of the persons from whom advances were received. The Assessing Officer had no other option but t .....

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hops against which the advances were received by the assessee have been allotted to the persons from whom advances were accepted. The assessee has not been able to prove the creditworthiness of the alleged buyers. It has been stated that the amount has been paid by the farmers from the compensation received. The Commissioner of Income Tax (Appeals) has recorded a finding that the amount of compensation is much less than the amount of advance paid the agreement value. The assessee has placed on r .....

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to show from the records that the assessee was having own funds for advancing such loans. Therefore, the decision of Hon'ble Bombay High Court in the case of Commissioner of Income-tax Vs. Reliance Utilities and Power Ltd. (supra) will not apply in the facts of the present case. The ld. DR prayed for dismissing the appeal of the assessee. 6. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also considered .....

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st booking of shops in the commercial complex Nath Plaza . The assessee has placed on record the copy of agreements with the concerned persons/parties from whom the alleged advances or booking amounts were received. Undisputedly, these agreements were never produced before the Assessing Officer. The assessee has placed on record the said documents in the form of paper book before us. A perusal of the same shows that they are in vernacular language (Marathi). A cursory look of the agreements show .....

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agreements to substantiate that the shops were ultimately registered in the name of the persons from whom advances were taken. The Commissioner of Income Tax (Appeals) in his order has given a finding that the details of the brokers through whom the shops were sold or agreed to be sold was not furnished. The assessee has further failed to provide any evidence to prove the source of cash advances received from the alleged buyers. The amount of compensation which is said to be source of funds is m .....

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asoned and detailed on the issue. Accordingly, the first ground raised in the appeal by assessee is dismissed being devoid of any merit. 8. In the second ground the assessee has assailed the addition of ₹ 2,28,345/- being notional interest on advances given during the course of business. Qua this addition the assessee has made two fold submissions before the Commissioner of Income Tax (Appeals) : (i) To delete the addition in toto as there is no concept of notional interest in the provisio .....

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