SANGHVI REALTY PRIVATE LIMITED,MUMBAI vs. ACIT, CIRCLE-5(3)(1), MUMBAI

It is submitted that, the assessee has filed cross appeal only for assessment year 2018-19 against the disallowance confirmed by the Ld.CIT(A). As the facts and circumstances leading to the additions in the hands of the assesse are identical and similarfor both the years they are being disposed off by way of common order. Brief facts of the case are as under: 3. The assessee is company and is engaged in the business of real estate during the year under consideration and filed its return of income for assessment year 2017-18 on 30/10/2017 declaring total income of Rs.54,24,530/-. The return was processed u/s.143(1) of the Act and the case was selected for 3 ITA No. 1965, 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited scrutiny. Accordingly notice u/s.143(2) along with notice u/s.143(1) issued to the assessee. The Ld.AO called for various submissions from assessee on the issues. The Ld.AO rejected the submission of the assessee and based on materials available on record, the assessment was completed by making following additions. Sr. no Nature of additions Amount(Rs.) 1 Addition of call Money received from NaroisImpex Private Limited made u/s 68 Rs. 95,00,000/- 2 Addition of Call Money received from Naseen Trade Link Private Limited made u/s 68. Rs. 25,00,000/-

1 Similarly, for assessment year 2018-19 the assessee filed its return of income on 09/10/2018 declaring total income of Rs.27,50,970/-.The Ld.AO called for various submissions from assessee on the issues. However there was non compliance from the assessee. Therefore, based on the materials available on record, the Ld.AO completed the assessment making following additions: Sr. No. Nature of additions Amount(Rs.) 1 Addition of Unsecured Loan u/s 68 r.w.s 115BBE from M/s. Golden Tobacco Ltd Rs. 12,00,000/- 2 Disallowance of Interest Expenditure. Rs. 3,39,694/- 3 Addition of Receipts of Call Money made u/s 68 r.w.s. 115BBE from Duralloy Cutters Ltd Empower Industries Ltd, NaroisImpexPvt. Ltd, Realstonexports Pvt Ltd Rs. 1,68,00,00/-

Before the Ld.CIT(A), the assessee submitted that assessee had furnished all documents regarding the call money for assessment year 2017-18, however without verifying the same, the Ld.AO concluded the transaction to be not genuine. For assessment year 2018-19, the assessee contended that due to on going COVID 19 pandemic, the assessee could not represent its case before the Ld.AO. Thus, on the additions u/s.68 towards call money received from 4 parties for assessment years 2017-18 & 2018-19, the assesse submitted that these were towards the paid up shares issued in part during financial years relevant to assessment years 2010 -11 and 2011-12. He submitted that the value per share got crystalised during the previous year itself. It was further submitted that what was paid during the years under consideration was the call money in two parts being the final payment towards the shares issued.by the assesse. It is thus submitted that the genuineness of the transaction cannot be doubted for the years under consideration. 4.1. In respect of addition made on account of unsecured loan from M/s. Golden Tobacco for assessment year 2018-19 and interest expenditure claimed by the assesse.The assesse furnished loan confirmation letter from Golden Tobaco to substantiate its claim. 4.2. The assesse submitted supporting documents to substantiate both transaction by furnishing documents/evidence in support before the Ld.CIT(A) in the form of additional evidence. The Ld.CIT(A) thus called for remand report from the Ld.AO in respect of the same.

4. The Ld.AO vide remand report dated 03/01/2025 and 15/01/2025 for assessment year 2017-18 and 2018-19 respectively submitted before the Ld. CIT(A) as under :

5.Based on the above remand report, the Ld.CIT(A) deleted addition for assessment years 2017-18 & 2018-19, in respect of the call money received from Narois Impex Pvt. Ltd., and Empower Industries India Ltd. for assessment years 2017-18 & 2018-19. However as sufficient evidences were not furnished in respect of called money received from Duralloy Cutters Ltd. and Real stone Exports Pvt. Ltd., the addition was sustained only for assessment year 2018-19. 13 ITA No. 1965, 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited

6. Further regarding unsecured loan transaction from M/s. Golden Tobaco Ltd., along with interest paid on such unsecured loan was also sustained due to insufficiency of evidences. Aggrieved by the order of the Ld.CIT(A) the assessee as well as revenue are in appeal for the year under consideration. Issue 1:Call money received from Narois Impex Pvt. Ltd., Empower India Ltd., Duralloy Cutters Ltd and Real Stone Exports Pvt. Ltd. 5.In the appeals filed by the revenue for assessment year 2017- 18 and 2018-19 common issue raised is on the relief granted by the Ld.CIT(A) by deleting addition on account of call money received by the assessee from Narois Impex Pvt. Ltd., and Empower Industries India Ltd. 5.1. The revenue alleges that these are non genuine and the transaction has not been proved to discharge the onus cast upon the assessee u/s.68 of the Act. 5.2. On the contrary the Ld.AR submitted that due to the COVID pandemic at the time of the assessment proceedings were going on assessee could not collate relevant information in order to discharge its onus u/s.68 of the Act. However, at the time of hearing before the Ld.NFAC/CIT(A), assessee furnished all relevant evidence for both the years under consideration to substantiate the genuineness of the call money received. 5.3. The Ld.AR submitted that during the FY 2009-10, the Assessee issued 145000 shares of Rs.10 each to Narois Impex Pvt. Ltd., at a premium of Rs. 190 per share against which the Assessee received Rs. 1,45,00,000/- called up @ Rs.100/- per share consisting of Rs.5/-towards paid up value and Rs.95

6. The Ld.AR submitted that,audited financial statements and audit report of Empower India Ltd for the FY 2017-18 were also furnished by the assesse and further inquiry was made by issuing notice u/s 133(6) on 11.12.2024 during the remand. The Empower India Ltd was called upon to provide details of all the transactions with Sanghvi Realty Pvt. Ltd. for AY 2018-19. In response, Empower India Ltd., furnished reply dated 09/01/2025 and submitted ITR and Computation of income for A.Y. 2018-19 along with audited financials, confirmation of Ledger account of M/s Sanghvi Realty Pvt Ltd., in its books of account for the year under consideration and relevant extract of bank statement reflecting transaction with M/s Sanghvi Realty Pvt Ltd., done in FY 2016-17. 5.7. It is submitted that the assessee filed: (a) confirmation letters along with relevant extracts of bank statements of Narois Impex Pvt. Ltd. And its activity status of the website MCA records (b) Audited financial statements and audited report of Empower India Limited for the financial year ending on 31/03/2018 (c) Detailed chart of the share allotted to the various companies in financial year 2009-10 and 2010-11 (d) Details of applicant company from whom called money was received during the year under consideration (e) Relevant extracts of the bank statement of assessee for the payment of call money received copies of Form filed with