TMI Blog2021 (10) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the decision of the Coordinate Bench of ITAT in the case of group concern and also in order to maintain judicial consistency, we apply the same findings in the present case which are applicable mutatis mutandis. Resultantly this ground raised by the revenue stands dismissed. Addition u/s 68 - unsecured loans receipt - HELD THAT:- We find that the amount of loans taken by the assessee is sufficiently proved. Under these circumstances, we are inclined to uphold the order of Ld. CIT(A) in respect of 7 parties wherein the Ld. CIT(A) deleted the addition - we are not in agreement with the findings of Ld. CIT(A) on the loan taken from V.J. Shah Co after examining all the evidences which were also filed before the Ld. CIT(A) and consequently we set aside the order of Ld. CIT(A) so far as the part confirmation in respect of whom the necessary evidences were filed before us also. Therefore, appeal of the Revenue is dismissed whereas the appeal of the assessee is allowed. Protective addition as made in the hands of the assessee - substantive addition made by the AO in the hands of Shri Jitendra Mehta have now been confirmed by the Ld. CIT(A) without appreciating the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non reconciliation of AIR - HELD THAT:- We find that the assessee has filed reconciliation before the Ld. CIT(A) and based on the said reconciliation the Ld. CIT(A) deleted the addition made by the AO. The Ld. CIT(A) recorded a finding of fact that the amount of ₹ 24,66,760/- has been duly accounted in the books of accounts of the assessee and this amount represented the interest received from Roxina Real Estate Pvt. Ltd. and TDS on interest under section 194A has been deducted of ₹ 2,46,676/- on the said interest. The Ld. CIT(A) also noted that the said interest income has been reduced from the interest paid to various parties and therefore net interest was shown on the debit side of the P L account. It was also noted by Ld. CIT(A) that a net interest was debited in P L account. - Decided against revenue. - ITA Nos.6042 & 6043/M/2019, ITA Nos.6298, 6299, 6300, 6301 & 6302/M/2019 - - - Dated:- 9-9-2021 - Shri Rajesh Kumar, Accountant Member And Shri Ravish Sood, Judicial Member For the Assessee : Shri Kamal Kishor, A.R. For the Revenue : Shri Nikhil Choudhary, D.R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER: The above titled cross appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 30% over and above the agreement value. 5. The facts in brief are that a Search and Seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 26.05.2011 by the DDIT(Inv),Unit -III(3), Mumbai at the business premises of M/s Rohan Developers Pvt. Ltd. and other group companies / entities promoted by Shri Harresh N. Mehta and Late Shri Jitendra N. Mehta along with the residential premises of the Directors, Associates and employees of the companies, etc. All these entities are commonly hereinafter referred to as Rohan Group . The Rohan Group , headed by the then Shri Jitendra Mehta and is mainly engaged in construction of residential / office premises and redevelopment of old dilapidated buildings. Apart from M/s Rohan Developers Pvt. Ltd., other main concerns of the group are M/s Goodwill Properties Pvt. Ltd., M/s Silver Arch Builders Promoters Pvt. Ltd., M/s. Satara Builders Pvt. Ltd. and M/s. Mindset Estate Pvt. Ltd. etc. The main person of the group particularly in the case of Rohan Developers as on the date of search was Late Shri Jitendra N. Mehta. During the course of search, the search team seized various documents including page no 114 of annexure A-1 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,96,10,000/- to the income of the assessee which was calculated @ 30% of ₹ 9,87,00,000/- the total sales during the year. 6. The Ld. CIT(A) deleted the addition as made by the AO on account of on money on the ground that neither the assessee s name nor the name of the projects done by the assessee is on page No.140 of Annexure A-1 on the basis of which the addition was made by the AO. While deleting the addition Ld. CIT(A) relied on the decision of a sister concern in the case of Goodwill Properties Pvt. Ltd. in ITA No.4023 4026/M/2016 A.Y. 2008- 09 2009-10. Similarly, the Ld. CIT(A) relied on the decision of co-ordinate Bench of the Tribunal in assessee s own case in ITA No.3162 3163/M/2016 A.Y. 2007-08 2008-09 which has been reproduced by the Ld. CIT(A) in para 19.21 of the appellate order. While deleting the addition Ld. CIT(A) also referred to the decision of other group concerns in ITA No.4030/M/2016, DCIT vs. M/s. Sitara Building Pvt. Ltd. A.Y. 2010-11, DCIT vs. Peccadally Estate Pvt. Ltd. for A.Y. 2011-12, DCIT vs. Mindset Estate Pvt. Ltd. A.Y. 2011-12. 7. After hearing the rival submissions of both the parties and perusing the material on record, we fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T contained in para no. 2 to 5, which is reproduced below:- 2.The brief facts of the case are that Rohan group of entities along with directors, family members and related parties were subject to search and seizure operations u/s. 132 of the Act on 26/05/2011,that the assessees was also associated with the said group. Subsequent to the search a notice u/s. 153A was issued to the assessee on 11/01/2013.It filed a return on 04/03/2013, declaring income at ₹ 36.65 lakhs. During the assessment proceedings, the AO found that the assessee had undertaken the construction of a commercial project Rameswaram.During the search proceedings statements of Haresh Mohanlal Mehta(HMM), one of the directors of the Rohan group,were recorded,who admitted that that 30% on money was accepted over and above the receipt value of the agreement and the same was not recorded in the regular books of accounts.The AO also took note of the statements of sales and marketing executive, accountant of the group and of the liason officer for the proposition that on money was collected on sale transactions and accordingly asked the assessee to explain as to why such addition should not be made in its hand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had to based on incriminating material seized during the search, that the only document referred to in the impugned order was page 114 of annexure A-1 and the statements of HMM along with the statements of employees, that the perusal of the seized paper revealed that there was no mention of the assessee or the project undertaken by it on the said paper, that the above referred paper did not make any mention of the assessee, that the perusal of the statements of the employees reflected that no specific mention of receipt of on money, that the impugned assessment was not based on any incriminating material pertaining to the assessee seized during the search, that the addition made on account of on money was not emanating from the material found and seized during the search action. Finally, she deleted the addition made by the AO. 4.During the course of hearing before us, the Departmental Representative stated that the employees of the assessee had accepted the fact that on money at the rate of 30% of the registered value was accepted by the company.As stated earlier, none appeared on behalf of the assessee. 5.We have perused the available material. We find that the FAA has gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us are similar to one as decided by the co-ordinate Benches of the Tribunal in assessee s own case in A.Y. 2008-09 as well as in the related companies as stated hereinabove, we, therefore respectfully following the same dismiss the ground Nos.1 to 3 of Revenues appeal. 10. The issue raised in ground Nos.4 5 is against the deletion of ₹ 55,00,000/- by Ld. CIT(A) as made by the AO under section 68 in respect of unsecured loans of ₹ 55,00,000/-. The assessee has also challenged the part sustaining of addition by Ld. CIT(A) to the extent of ₹ 5,00,000/- in its cross appeal. 11. The facts in brief are that during the course of assessment proceedings the AO called upon the assessee to furnish the loan confirmations from 8 parties from whom the assessee has raised loans during the year besides other evidences to prove the identity , creditworthiness of the lenders and genuineness of the transactions the details whereof are as under: Sr. Name Amount 1. Mahendra Nagindas Shah 10,00,000/- 2. Manilal N. Haria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V.J. Shah Co. We find that the assessee has filed before us the similar evidences in respect of V.J. Shah Co. comprising, loan confirmations, ITRs, bank statements of the lenders, bank account of the assessee which were also filed before the lower authorities. Thus we find that the amount of loans taken by the assessee is sufficiently proved. Under these circumstances, we are inclined to uphold the order of Ld. CIT(A) in respect of 7 parties wherein the Ld. CIT(A) deleted the addition of ₹ 55,00,000/-. However, we are not in agreement with the findings of Ld. CIT(A) on the loan taken from V.J. Shah Co after examining all the evidences which were also filed before the Ld. CIT(A) and consequently we set aside the order of Ld. CIT(A) so far as the part confirmation of ₹ 5,00,000/- in respect of whom the necessary evidences were filed before us also. Therefore, appeal of the Revenue is dismissed whereas the appeal of the assessee is allowed. ITA No.6299/M/2019 (Revenue s Appeal) ITA No.6043/M/2019 (Assessee s Appeal) 15. The issue raised in ground No.1 to 3 is against the deletion as on money of ₹ 2,25,00,000/- by Ld. CIT(A) which has been add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of cash interest, however, in the return filed under section 153A the late Shri Jitendra Mehta did not offer the said undisclosed income to tax. Consequently, on the basis of the said seized papers the AO held that the assessee has paid interest in cash in respect of loans appearing in the books of account, over and above the interest already debited in the books of accounts. Thus, on the basis of these seized material, the AO made substantive addition in the case of Late Jitendra Mehta (Legal Heir, Rohan Mehta) of ₹ 17,20,35,681/- and protective addition of various amounts as stated above aggregating to ₹ 17,20,35,681/- in the hands of various parties which are also mentioned in the above table. The cash interest attributable to the respondent-assessee was ₹ 1,77,82,408/- and protective addition was also made in the case of respondent-assessee accordingly. 18. In the appellate proceedings, the CIT(A) has confirmed the substantive addition made in the case of Rohan Mehta and thus, he deleted the protective addition made in the case of appellant. The CIT(A) has discussed this issue in its appellate order in paras 36 to 39.21 page nos. 154 to 179 and has giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the assessee under section 69C of the Act which was duly replied by the assessee. The AO, however, not accepting the contentions of the assessee, added the same to the income of the assessee. 22. In the appellate proceedings, the Ld. CIT(A) deleted the addition by observing and holding as under: 43.0 I have considered the facts of the case, submissions of the Appellant Company, the observations of the AO contained in the assessment order and the other materials on record on this issue. 43.1 The addition is made on account of cash interest paid on a loan of ₹ 6 lakhs. The Appellant had denied taking of the said cash loan. The department has not been able to provide any evidence to prove that such loan was actually taken except a statement of one Shri Anuj Shah, the broker. An addition has been made of ₹ 12,000/- on account of interest on such loan. In his statement, Shri Anuj Shah had stated that the amount was a commission for arranging the loan. Thus the addition on account of cash interest in itself is wrong. There's no such cash interest paid/ received/ accepted by any party. Even if it is accepted that the commission was received by Shri Anuj Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses. 27. The facts in brief are that the assessee has incurred ₹ 60,300/- under the head Conveyance charges . The AO was of the opinion that the personal element in these expenses can not be ruled out and accordingly the AO disallowed @ 20% of the conveyance expenses which worked out to ₹ 12,060/- and added the same to the income of the assessee. Similarly, in respect of telephone expenses the assessee incurred ₹ 70,680/- and the AO disallowed 30% of the expenditure towards personal element which worked out to ₹ 21,204/- and added the same to the income of the assessee. 28. In the appellate proceedings, the Ld. CIT(A) deleted the addition on the ground that AO has failed to establish that said expenditure was not incurred wholly and exclusively for the purpose of business. The Ld. CIT(A) observed that the assessment order does not state any show cause notice or communication to the respondent-assessee asking to reproduce the relevant evidences in support of the expenses. Thus the Ld. CIT(A) observed that the disallowance made by the AO lacked any incriminating material and purely based on conjunctures and surmises and adhocism which is not permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Revenue are identical to ones as decided by us in ground No.5 in ITA No.6298/M/2019 A.Y. 2010-11. Accordingly, our decision on ground No.5 6 in ITA No.6298/M/2019 A.Y. 2010- 11 would, mutatis mutandis, apply to the ground Nos.5 6 as well. Accordingly, ground Nos.5 6 of the Revenue are dismissed. 34. The issue raised in ground No.7 is against the order of Ld. CIT(A) deleting the addition of ₹ 2,42,62,583/- by Ld. CIT(A) as made by the AO on account of unexplained interest expenditure under section 69C of the Act. 35. The issue raised in ground No.7 is identical to one as decided by us in ground No.4 in ITA No.6299/M/2019 A.Y. 2011-12. Therefore, our decision on ground No.4 in ITA No.6299/M/2019 A.Y. 2011-12 would, mutatis mutandis, apply to the ground No.7 of this appeal as well. Accordingly, ground No.7 is dismissed by upholding the order of Ld. CIT(A) on this issue. ITA No.6301/M/2019 (Revenue s appeal) 36. The issue raised in ground Nos.1 to 3 in respect of on money on sale of flats is identical to one as decided by us in ground Nos.1 to 3 in ITA No.6298/M/2019 A.Y. 2010-11. Therefore, our decision on ground Nos.1 to 3 in ITA No.6298/M/2019 A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the interest received and paid, the interest received amounting to ₹ 24,66,760/- was not directly visible in the return of income of the Appellant Company. 20.3 In view of the above mentioned facts and circumstances, the AO is directed to delete the addition made on account of non-reconciliation of AIR information. Accordingly, the Ground No. 4 of the present appeal is allowed. 41. After hearing both the parties and perusing the material on record, we find that the assessee has filed reconciliation before the Ld. CIT(A) and based on the said reconciliation the Ld. CIT(A) deleted the addition made by the AO. The Ld. CIT(A) recorded a finding of fact that the amount of ₹ 24,66,760/- has been duly accounted in the books of accounts of the assessee and this amount represented the interest received from Roxina Real Estate Pvt. Ltd. and TDS on interest under section 194A has been deducted of ₹ 2,46,676/- on the said interest. The Ld. CIT(A) also noted that the said interest income has been reduced from the interest paid to various parties and therefore net interest was shown on the debit side of the P L account. It was also noted by Ld. CIT(A) that a net in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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