HMJ ASSOCIATES,PUNE vs. DCIT, CIR-8, PUNE

PDF · subscribers
ITA 1899/PUN/2026Status: DisposedITAT Pune15 October 2026AY 2013-147 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) erred in confirming the additions without referring to the remand report submitted by the AO. Regarding the unsecured loan of Rs. 30,00,000/- from Shri Shirish A Hivale, the Tribunal noted that the AO, in the remand report, accepted that the genuineness of the loan was proven, citing the retirement-cum-admission deed and bank statements. The Tribunal directed the AO to delete this addition. Similarly, for the current liability of Rs. 30,00,000/- towards Mr. Ramchandra Dagdu More, the Tribunal observed that the AO had verified the details and was satisfied, as stated in the remand report. Consequently, the Tribunal directed the AO to delete this addition. Concerning the TDR purchases of Rs. 51,86,760/-, the Tribunal found that the AO had factually verified all the facts and was satisfied with the expenditure in the remand report, noting the submission of the TDR agreement and its utilization for a specific project. The Tribunal directed the AO to delete this addition as well. The ratio decidendi is that appellate authorities must consider and give due weight to remand reports where the Assessing Officer has verified and accepted the assessee's contentions.

What were the facts?

The assessee, M/s. HMJ Associates, filed an appeal against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi, for Assessment Year 2013-14. This order confirmed additions made by the Assessing Officer (AO) in an assessment order passed under Section 143(3) of the Income Tax Act, 1961. The additions in dispute were Rs. 30,00,000/- as unsecured loan from Shri Shirish A Hivale, Rs. 30,00,000/- as current liability towards Mr. Ramchandra Dagdu More, and Rs. 51,86,760/- on account of TDR purchases. The assessee had submitted additional evidence before the Ld. CIT(A), leading to a remand report from the AO. The assessee contended that the AO, in the remand report, accepted the genuineness of these transactions.

What were the issues?

1. Whether the Ld. CIT(A) erred in confirming the addition of Rs. 30,00,000/- on account of unsecured loan from Shri Shirish A Hivale, despite the AO's acceptance of its genuineness in the remand report, turning on Section 68 of the Income Tax Act, 1961. 2. Whether the Ld. CIT(A) erred in sustaining the addition of Rs. 30,00,000/- towards current liability of Mr. Ramchandra Dagdu More, notwithstanding the AO's verification and acceptance in the remand report, concerning Section 68 of the Income Tax Act, 1961. 3. Whether the Ld. CIT(A) erred in upholding the disallowance of Rs. 51,86,760/- on account of TDR purchases and capitalizing the amount, when the AO had factually verified and accepted the expenditure in the remand report, relating to the deductibility of expenses under the Act. Assessee's contentions: The assessee argued that the AO, in the remand report, accepted the identity, genuineness, and creditworthiness of the unsecured loan from Shri Shirish A Hivale and the current liability towards Mr. Ramchandra Dagdu More. The assessee also submitted that the AO verified the facts regarding TDR purchases and accepted them as true in the remand report. Therefore, the Ld. CIT(A) erred in confirming the additions without considering the remand report. Revenue's contentions: The Ld. DR supported the order of the Ld. CIT(A) by reading relevant paragraphs from the assessment and appellate orders.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI PAVAN KUMAR GADALE & SHRI Dr. DIPAK P. RIPOTE

For Appellant: Shri B.C. Malakar &, Shri Vishal Mahajan
For Respondent: Shri Rajesh Haladkar, Addl. CIT

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2013-14 on 21.03.2026, emanating from the Assessment Order u/s 143(3) of the Act, dated 01.03.2016.

Submission of Ld. AR :

2.

The Ld. AR filed paper book. The Ld. AR submitted that the assessee had filed additional evidences before the Ld. CIT(A) under Rule 46A of the Income Tax Rules. The Ld. CIT(A) called for remand report from the Assessing Officer (AO). The Ld. AR invited our attention to pages 48-62 of the paper book which was copy of remand report submitted by the AO to the Ld. CIT(A). The Ld. AR submitted that in the remand report the AO

ITA No. 1899/PUN/2026 has accepted the contention of the assessee. In the remand report regarding the addition of Rs.30,00,000/- made by the AO. The AO accepted that the identity, genuineness and creditworthiness has been proved in the case of Shri Shirish A Hivale. The Ld. AR read the relevant paragraph of the remand report filed by the AO. The Ld. AR submitted that regarding the addition made on account of current liability towards Mr. Ramchandra Dagdu More the AO specifically mentioned in the remand report that the identity, genuineness and creditworthiness is proved. The Ld. AR submitted that regarding the issue of TDR purchases the AO in the remand report has verified the facts and accepted it to be true. The Ld. AR submitted that since in the remand report the AO has verified all the facts and accepted the contention of the assessee, the Ld. CIT(A) erred in confirming the addition without referring to the remand report. The Ld. AR submitted that the addition may kindly be deleted.

Submission of Ld. DR :

3.

The Ld. DR read the relevant paragraphs of the assessment order and the Ld. CIT(A)’s order. The Ld. DR supported the order of the Ld. CIT(A).

Findings and Analysis:

4.

We have heard both the parties and perused the records. In this case, the basic dispute is regarding following three additions made in the assessment order for AY 2013-14 are : i. Unsecured loan of Rs.30,00,000/- from Shri Shirish A Hivale. ii. Current liability of Rs.30,00,000/- towards Mr. Ramchandra Dagdu More and

ITA No. 1899/PUN/2026

iii. TDR purchases.

4.1 It is an admitted fact that during the assessment proceedings, the assessee had not made specific submissions. However, during the appellate proceedings before the Ld. CIT(A), the assessee made elaborate submission. The Ld. CIT(A) called remand report from the AO as per Rule 46A of the Income Tax Rules. Copy of the said remand report is at pages 58-62 of the paper book.

5.

We will discuss each addition separately.

6.

The first addition is unsecured loan of Rs.30,00,000/- from Shri Shirish A Hivale. The Ld. CIT(A) has mentioned as under : “9.2 Addition of Rs. 30,00,000/- on account of unsecured loan:- The Assessing Officer had treated the unsecured loan of Rs 30,00,000/- as unexplained credit due to failure of the appellant to furnish necessary evidence during assessment proceedings. In the remand proceedings the appellant submitted that the amount represents balance payable to the retiring partner Shri Shirish A. Hivale pursuant to a retirement-cum- admission deed dated 03/12/2012. Although certain documents such as the retirement deed and bank statement were produced during remand proceedings, it is noticed that the appellant has not furnished complete evidence establishing the genuineness of the transaction in terms of identity, creditworthiness and genuineness as required under the Act. The explanation regarding subsequent adjustment of the balance amount is also not supported by adequate documentary evidence establishing the transaction beyond doubt. In view of the above facts, the addition made by the Assessing Officer is found to be justified and is therefore sustained.”

6.1 However, in the remand report dated 09.05.2024, the AO has mentioned as under : “Now, assessee in remand proceedings has submitted that it is a partnership firm which has been formed vide partnership deed

ITA No. 1899/PUN/2026

executed on dtd. 12/11/2009 and registered on 15/02/2010 having registration No.MPA-77130 and was having following partners. 1. Shri Sudam B More 2. Mrs Nirmala V Shrikhande 3. Shri Shirish A Hivale (ii) Thereafter, vide retirement cum admission deed dtd.03/12/2012 Shri Shirish A Hivale had retired due to his personal reasons and Shri Ajinkya D Gawade & Mrs Suvarna S More were newly admitted as a partner in this partnership firm. (iii) As per the above said retirement cum admission deed dtd.03/12/2012 the amount of Rs.90,00,000/- was to be settled and payable to the retiring partner Shri Shirish A Hivale towards his capital in the partnership firm as on the date of retirement. Out of total payable of Rs.90 Lacs, the amount of Rs.60,00,000/- was paid on 03/12/2012 vide Ch No.947163 drawn on Pavana Sahakari Bank Chinchwad Branch, Pune and the balance amount of Rs.30,00,000/- was payable to retiring partner and this amount was shown as unsecured loan as on 31st March 2013. Rs. 15,00,000/- Out of these Rs.30,00,000/- have been returned by the assessee to the Shri Shirish A Hivale on 09/03/2015 through banking channel. (iv) The assesse has submitted Xerox of above said retirement cum admission deed dtd. 03/12/2012 and bank account statement in support of its claim. (v) Thus, the identity and genuineness of the unsecured loan of Rs.30,00,000/- from Shri Shirish A Hivale is proven by the assessee in its submission. The factual report is hereby submitted for your kind consideration, if deemed fit.”

6.2 Thus, in the remand report, the AO accepted that genuineness of unsecure loan of Rs.30,00,000/- has been proved. In these facts and circumstances of the case, there is no merits in the order of the Ld. CIT(A) wherein the Ld. CIT(A) contains that identity, creditworthiness and genuineness has not been proved without speficying any defect in the remand report. In these facts and circumstances of the case, we direct the AO to delete the addition of Rs.30,00,000/-.

ITA No. 1899/PUN/2026

7.

Addition of Rs.30,00,000/- towards Shri Ramchandra Dagdu More. The Ld. CIT(A) has discussed this issue in para 9.3. The same is as under : “9.3 Addition of Rs. 30,00,000/- on account of current liability:- The Assessing Officer had treated the amount of Rs. 30,00,000/- shown as payable to Shri Ramchandra Dagdu More as unexplained credit in the absence of supporting details. During the remand proceedings, the appellant submitted that the amount represented money received from flat purchasers on behalf of the land owner pursuant to a development agreement. However, the supporting evidences placed on record such as ledger extracts and copies of agreements do not conclusively establish the entire chain of transactions including the receipt of funds from flat purchasers and the corresponding liability towards the land owner. Further, the explanation regarding adjustment of security deposit and liability in subsequent years is not supported by complete documentary evidence. In absence of satisfactory corroboration of these transactions, the explanation of the appellant cannot be accepted. Accordingly, the addition of Rs. 30,00,000/- made by the Assessing Officer is upheld.”

7.1 The AO has discussed this issue in para 5.2 of the remand report. The relevant paragraph is reproduced here as under : “(vi) So, the current liability shown of Rs.30,00,000/- towards Ramchandra Dagdu More which was added as unexplained credit in absence of any details is explained by the assesse in its submission. Thus, the identity, genuineness and creditworthiness of the current liability of Rs.30,00,000/- from Ramchandra Dagdu More is proven in the submission of the assessee. The factual report is hereby submitted for your kind consideration, if deemed fit.”

7.2 In these facts once the AO has verified the said details and was satisfied regarding the transaction the Ld. CIT(A) erred in sustaining the addition without finding any fault in the remand report filed by the AO. Accordingly, we direct the AO to delete the addition of Rs.30,00,000/-.

8.

Regarding disallowance of Rs.51,86,760/- on account of TDR purchases, the Ld. CIT(A) has discussed the issue in para 9.5. The same is as under :

ITA No. 1899/PUN/2026

“9.5 Disallowance of Rs. 51,86,760/- on account of TDR purchases: The Assessing Officer disallowed the claim of TDR purchase expenses and capitalized the amount as the appellant failed to furnish relevant details during assessment proceedings. In remand proceedings, the appellant submitted copy of TDR agreement and claimed that the TDR was utilized for the ongoing project. However, the appellant has not demonstrated through books of account, project records or supporting documentation that the expenditure was allowable as revenue expenditure during the year under consideration. The evidence furnished is insufficient to establish the exact nature and timing of the claim. In absence of satisfactory verification and considering the failure of the appellant to furnish the required details during assessment proceedings, the action of the Assessing Officer in capitalizing the expenditure is upheld.”

8.1 In this case, the Ld. AR has specifically submitted that the assessee has executed only one project during the year and TDR was used only for that project. This fact is evident from the submission made by the assessee before the Ld. CIT(A). In this case, the AO in the remand report in para 5.4 has mentioned as under : “5.4 Capitalised Rs. 51,86,760/- on the issue of TDR purchases- The assessee has debited TDR purchases expenses of Rs. 51,86,760/-. But, details of these TDR purchases and undergoing projects at that time were not available on record during the scrutiny proceedings. So, deduction of this claim was disallowed and this amount of Rs. 51,86,760/- was allowed to be capitalized by the AO. Now, assessee in remand proceedings has submitted that the assessee has purchased a TDR area admeasuring 1020 sq.mtr from sandip rasiklal shah POA of Ganesh Gaikwad and Nilesh Gaikwad for total consideration of Rs. 50,00,000/- and incurred Rs. 1,86,760/- towards stamp duty and registration charges for these purchases vide TDR agreement dt. 05/12/2012 vide document 10332/2012. This document has been submitted by the assessee in remand proceedings. The assessee has utilized the above TDR exclusively for its project at Gut no. 1248, Chikhali, Dist-Pune and have loaded this TDR on the project. The factual report is hereby submitted for your kind consideration, if deemed fit.”

8.2 Thus, the AO has factually verified all the facts and was satisfied regarding expenditure on TDR. In these facts and circumstances of the case, there is no merit in the addition

ITA No. 1899/PUN/2026

sustained by the Ld. CIT(A). Accordingly, we direct the AO to delete the addition of Rs.51,86,760/-.

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 15th October, 2026

Sd/- Sd/- (PAVAN KUMAR GADALE) (Dr. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER

पुणे/Pune; दिन ांक/Dated : 15-10-2026 Ravi Kumar आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. The concerned Pr. CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, Digitally signed by Sunil Kumar Sunil Kumar More More // True Copy // Date: 2026.10.25 10:21:36 +05'30' Assistant Registrar आयकर अपीलीय अदिकरण,पुणे / ITAT, Pune

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →