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2016 (4) TMI 351 - ITAT MUMBAI

2016 (4) TMI 351 - ITAT MUMBAI - TMI - Earnest money received - addition u/s 68 - Held that:- We find that an FIR was filed on 30. 7. 2008, in pursuance of the order of the Metropolitan Magistrate dt. 27. 5. 2008 with regard to monetary transaction taken place between the assessee and MDC, that in the order of the Metropolitan Magistrate it has been observed that the assessee had received token money ₹ 73. 21 from MDC, that those papers with regard to the FIR were filed during the course o .....

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or of the MDC and the assessee are fighting legal battle in the Court and the order of the Magistrate clearly states that payment of ₹ 23. 00 lacs was made by MDC to the assessee during the under appeal. Therefore, in absence of existence of basic ingredients of Section 68, the FAA was not justified in upholding the order of the AO, who had made the addition of ₹ 23 lakhs. - Decided in favour of the assessee.

Disallowance of administrative expenses, employees expenses and .....

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cannot be stated that assessee was not carrying out any business activity. It is a fact that assessee has closed down its manufacturing unit long back, but it does not mean that he was not carrying out any business activities. We find that while finalising the assessment of the assessee for the AY. 2005-06, the AO had allowed 75% of the identical expenses. On a query by the Bench the AR conceded that assessee had not agitated the issue before the FAA in that matter. Considering the peculiar fac .....

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fficer(AO) have filed appeals for the above mentioned AY. s. As the appeals are of the same group, so, we are adjudicating them by a single common order. The details of filing of return, returned incomes etc. can be summarized as under : ITA Nos. A. Y. ROI filed on Returned Income Assessment dt. Assessed Income Dt. of orders of CIT(A) 4119/M/2014 2006-07 14. 03. 2008 2, 00, 532/- 23. 12. 2008 25, 00, 530/- 12. 03. 2014 1314/M/2011 2006-07 14. 03. 2008 2, 00, 532/- 23. 12. 2008 25, 00, 530/- 03. .....

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the purchase of TDR to be generated as a municipal market plot, from M D Construction Co. (MDC)-a proprietary concern of Yogesh Mehta. The assessee produced a xerox copy of MOU entered between his proprietary concern and MDC. The AO directed the assessee to submit confirmation from MDC. However, the assessee expressed his inability to file confirmation stating that there was dispute with MDC. The AO held that in absence of confirmation, amount claimed to have been received from MDC, could not be .....

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was made available to the AO. The FAA called for a remand report from the AO. After considering the available material that the assessee was not able to produce confirmation from MDC, that there were many discrepancies in the MOU, that there was no mention of the payment to be made to the assessee, subsequent to the MOU, that the MOU could not be treated for credible evidence, that the source of the deposit remained unexplained. He confirmed the order of the AO. 4. During the course of hearing b .....

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e case assessee was not in a position to obtain confirmation from MDC, that it was not a fit case for invoking provisions of section 68 of the Act. Departmental Representative (DR) supported the order of the FAA. 5. We have heard the rival submissions and perused the material before us. We find that an FIR was filed on 30. 7. 2008, in pursuance of the order of the Metropolitan Magistrate dt. 27. 5. 2008 with regard to monetary transaction taken place between the assessee and MDC, that in the ord .....

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of the transaction stands proved because the money has come from a known source-through banking channels. As far as identity and credit worthiness is concerned, same cannot be doubted. Proprietor of the MDC and the assessee are fighting legal battle in the Court and the order of the Magistrate clearly states that payment of ₹ 23. 00 lacs was made by MDC to the assessee during the under appeal. Therefore, in absence of existence of basic ingredients of Section 68, the FAA was not justified .....

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the FAA for the disputed amount i. e. ₹ 23lacs. 7. We find that the FAA had considered the FIR, order of the Metropolitan Magistrate and payment made by MDC during the year and in the subsequent years, while deciding the penalty appeal. Considering these facts, he had deleted the penalty imposed by AO u/s. 271 (1) (c)of the Act. As we have deleted the addition made by the AO, while deciding the quantum appeal, so, penalty would not survive. Confirming the order of the FAA we decide the ef .....

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out any business activity in the last few years, that the solitary transaction undertaken by the assessee was of selling a painting, that assessee was not carrying out any regular business transaction, accordingly he held that the expenses incurred by the assessee did not fulfill the requirement of section 30 to 37 of the Act. Aggrieved by the order of the AO the assessee preferred an appeal before the FAA. Before him it was contended that assessee was running a business c entre, the expenses in .....

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could not be attributed to business service centre. The FAA referred to case of Lahore Electric Supply Co. (60ITR1);Inderchand Hariram (23 ITR 437); Sherwani Brothers & Co. (23ITR51); and National Syndicate (41 ITR 225) and upheld the order of the AO. 9. Before us, the AR sated that assessee was running a business centre, that it had earned income, and had incurred expense from the business centre/for running the business centre, that income from the business centre has gone down during the .....

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