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TMI Blog2009 (9) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 145(3) of the act was not made out. 3. The Ld. Commissioner of Income-tax (Appeals)-XI, Ahmedabad has also erred in law and on facts in restricting the disallowance of interest from ₹ 5,49,000/- to ₹ 27,472/-. 4. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has also erred in law and on facts in restricting the interest and granting relief of ₹ 5,27,528/- without giving a finding that the assessee had interest free borrowings from which the assessee had advanced the amount from its own funds. 5. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has further erred in law and on facts in deleting the addition of ₹ 40,74,165/- made u/s.68 of the I.T.Act. 6. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has also erred in law in not appreciating the fact that in case of deposits in the name of AMP Investment and Victoria Capital ventures, the assessee had not discharged its primary onus of furnishing confirmation and in the case of other three creditors, the confirmations furnished were defective and incomplete. 7. On the facts and in the circumstances of the case, the Ld. Commissioner of Income-tax(Appeals)-XI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. For holding discussion for persons who came for booking ₹ 5,000/- 5. Other matters ₹ 100/- Total ₹ 52,600/- 6. There was no justification found for charging the above fees. The Assessing Officer accordingly invoked the provisions of section 145(3) of the I.T. Act, 1961 and estimated the development fees at 2% of book amount of ₹ 12,08,34,010/-. It was worked out at ₹ 24,16,680/- resulting in an addition of ₹ 9,76,322/-. 7. The Learned CIT(Appeals) deleted the addition by holding that the Assessing Officer has not brought any material on record to prove that the assessee has charged more fees than what has been shown in the books. No defect in the books of account has been pointed out. The Assessing Officer has arbitrarily fixed the development fees at 2% for which there is no basis. The assessee is following "mercantile system" of accounting, therefore, there is no case for making addition. He accordingly deleted the addition by observing as under:- "5.2. I have considered the facts of the case and submissions of the A.R. of the appellant carefully. I have also gone through the decisions relied upon by the A.R. and the observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the order of the Assessing Officer. 10. After hearing the rival submissions and carefully perusing the material on record, we are of the view that there is no case for interfering with the order of the Learned CIT(Appeals). For the reasons mentioned by the Learned CIT(Appeals) in his order, we confirm his order. This ground of the Revenue is, therefore, rejected. 11. Ground No.2 of Revenue's appeal relates to rejection of books of account which is related to ground No.1(supra). 12. We have heard the parties. No case is made out to reject the books, no defect is found and, hence, there is no reason to reject the books of the assessee. Therefore, this ground of Revenue's appeal is also rejected. 13. Ground No.3 of Revenue's appeal relates to reduction in disallowance of interest from ₹ 5,49,000/- to ₹ 27,472/-. 14. During the course of assessment proceedings, the Assessing Officer noticed that assessee has taken unsecured loan of ₹ 2,70,03,132/-. Against this, the assessee has made advances of ₹ 2,68,29,316/-. It has received interest of ₹ 5,58,542/-, whereas interest paid is ₹ 8,33,266/-. From the details furnished by the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not provided. Even PANs were also not mentioned. Accordingly, the Assessing Officer inferred that identity, creditworthiness and genuineness of the credits are not proved. He accordingly made the addition. 22. The Learned CIT(Appeals) noted that the assessee has placed on record of the Assessing Officer, the names of the parties, complete addresses, statement of accounts, etc. He accordingly deleted the addition by observing as under:- "8.2. I have considered the facts of the case and the submissions of the A.R. of the appellant carefully. I have also gone through the details filed before me by the A.R. and the observations of the assessing officer in the assessment order. The issue was restored back to the file of the undersigned by Hon'ble ITAT, Ahmedabad vide its order, referred to above, for deciding the appeal a fresh in accordance with law and after giving opportunity of being heard. The opportunity was given to the appellant and the I.T.O. having jurisdiction and the issue was discussed. Enquires were made by this office from Computer Section of the department and it is ascertained that the parties, namely, (1) AMP Investments, 502, Panchkuva, Ahmedabad is assessed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posit/booking amount and in the two cases P.ANs. The Assessing Officer could have carried out detailed inquiries with regard to the parties concerned, which he has not done. Further, I find that the Assessing Officer has not brought on record any material evidence for such addition by rebutting the assessee's contentions. In the case of Deputy CIT Vs. Rohini Builders reported in 256 IT.R 360, the Hon'ble Gujarat High Court has held that once the assessee has discharged the initial onus by proving the identity of creditors by giving their complete address, GIR/PANos and the copies of assessment order wherever readily available and amounts have been received by cheques, the addition is not justified. Further in the case of Orisa Corporation reported in 159 ITR 79, the Hon'ble Supreme Court has held that when the assessee furnished names and address of the alleged creditors and the GIR Numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition, the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer u/s.131, by the allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter-head of Navratna Organisers & Developers Pvt.Ltd. At page No.68 of the paper-book, is the copy of account of Yogesh Anubhai Shah (HUF) which shows the address of the party as 88, Lavanya Society Vasna, Ahmedabad-7. This is also on the letter-head of the assessee. Page Nos.72 & 73 of the paper-book show account of Payal Yogesh Shah on the letter-head of the assessee and also address of that party. At page No.77 of the paper-book shows the account of Nilay Yogesh Shah on the letter-head of the assessee with the address of the party. The copies of account show that money was transferred through cheque, i.e. though banking channels. It is not a case where no data is available for verification. The assertion of the Learned Authorised Representative of the assessee is that these documents were submitted to the Assessing Officer. In any case, we restore the matter to the file of Assessing Officer. The assessee will submit these documents before the Assessing Officer with complete details of the creditors, name of the bank through which money was transferred to the assessee and paid back by the assessee. The assessee will furnish these information so as to enable the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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