DCIT 5(3)(1), MUMBAI, MUMBAI vs. SANGHVI REALTY PRIVATE LIMITED, MUMBAI

1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 4. 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.

1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 4.4. 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 :

4.5.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.

1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 4.6. 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 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited toward premium. He submitted that the Assessee then called up for balance amount of Rs.1,45,00,000/- @ Rs.100/- per share consisting of Rs.5/- towards paid up value and Rs.95 toward premium during FY 2016-17. The Assessee received Rs.95,00,000/-on 95000 shares during FY 2016-17 out of Rs. 1,45,00,000/-. The balance Rs.50,00,000/-on 50,000 shares was received during FY 2017-18.

5.4. The Ld.AR submitted that the submission made by Narois Impex Pvt.Ltd in response to Notice u/s133(6) was ignored during the assessment proceedings only on the ground that, the name of the company was struck off in subsequent years. He submitted that striking off of the name does not question the said company's identity, creditworthiness and genuineness of the amount received received during the years under consideration. He also emphasised that the current status of the applicant company is active on the MCA Portal.

5.5. The Ld.AR submitted that further inquiry was made and notice u/s 133(6) of the Act was sent to Narois Impex Pvt.Ltd., dated 11.12.2024 and Narois Impex Pvt. Ltd., furnished reply to the notice issued u/s 133(6) of the Act vide mail dated 02/01/2025 and submitted ITR and Computation of income for A.Y. 2017-18 and 2018-19 along with audited financials, confirmation of Ledger account of M/s. Sanghvi Realty Private Limited in its books of account for the year under consideration and relevant extract of bank statement of Corporation bank reflecting transaction with M/s.Sanghvi Realty Private Limited done in FY 2016-17 and 2017-18.

1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 5.6. 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 registrar of the companies at the time of allotment and document received with the share application form during the financial year 2010-11 5.8. The Ld.AR submitted that, based on the documents furnished during the remand proceedings,the Ld.AO accepted claim of assessee in respect of Narois Impex Pvt. Ltd. and Empower India Ltd. on the issue of call money. The Ld.CIT(A) thus deleted the addition in respect of the call money received from Empower Industries Ltd. and Narois Impex Pvt. Ltd. for both the years underconsideration. 5.9. The Ld.AR submitted that, as no addition was made u/s.68 for assessment year 2017-18 in respect of call money received during financial year 2016-17 in case of call money received from Duralloy Cutters Ltd and Real Stone Exports Pvt. Ltd., the assessee did not submit any additional evidences regarding the same. The Ld.CIT(A).AO did not express his view in respect of these companies 5.10. He submitted that, for A.Y. 2017-18 the assessing officer accepted call money received from Duralloy Cutters Ltd and Real Stone Exports Pvt. Ltd. The Ld.AR drew our attention to page 63 of the paper book filed for assessment year 2017-18 that narates details of the call money received during the financial year 2016- 17 relevant to assessment year 2017-18. He submitted that, no addition was made by the Ld.AO u/s.68 in respect of Duralloy Cutters Ltd. and Real Stone Exports Pvt. Ltd. for assessment year 2017-18. But the call money received from these two companies received during assessment year 2018-19 were doubted and the addition was made under section 68 of the act. It was once again 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited submitted that, the call money was received from Duralloy Cutters Ltd. and Real Stone Exports Pvt. Ltd is against the final payment towards the shares issued by the assessee during financial year 2009-10 & 2010-11. The Ld.AR emphasised that, for assessment year 2017-18 the assessee had furnished during the assessment proceedings all relevant details which was duly verified by the Ld.AO. He thus prayed for addition to be deleted for A.Y. 2018-19 as no contrary evidences has been furnished by the revenue and no appeal has been filed by the revenue in the respect of these two companies before this Tribunal in any of the preceding assessment year.

We have perused the submissions advance by both sides in the light of record placed before us.

1 NASEEN 25000 250000 125000 4750000 2375000 TRADELINK PVT. LTD. 2 EMPOWER 55000 550000 275000 10450000 5225000 INDUSTRIE S LTD. 3 MANAV 70000 700000 350000 13300000 6650000 REALITIES PVT. LTD. 4 KINGS 90000 900000 450000 17100000 8550000 MERCHANT S PVT. LTD. 5 SOUT EAST 85000 850000 425000 16150000 8075000 ASIA PACKAGIN G P. LTD. 6 RIGVEDA 75000 750000 375000 14250000 7125000 PROPERTIE S LTD 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 7 DURALLOY 95000 950000 475000 18050000 9025000 CUTTERS LTD 8 REALSTON 60000 600000 300000 11400000 5700000 E EXPORTS PVT. LTD Total 555000 5550000 2775000 105450000 52725000 The Ld.AR submitted that, during the scrutiny assessment proceedings for these years assessee had submitted all details in respect of the investors and the same was accepted by the department after due verification. Relying on the assessment order passed for these assessment orders u/s. 143(3) of the Act. Placed at page 214-226 of the paper book. The Ld.AR submitted that, no additions were made in respect of the same. He thus submitted that, the amount of share capital and share premium was accepted and frizzed at Rs. 200 per share during these assessment orders being 2009-10 and 2010-11 coming to the present year under consideration. The Ld.AR submitted that the assessee vide its letter dated 19/08/2016 made call on the above companies to make the above allotted equity shares fully paid up. The assesse received during the assessment year 2017-18 and 2018-19 call money fromfollowing companies bifurcated into Rs.5 towards share capital and Rs.95 towards share premium received by the assessee: S Name of PAN No. of No. of Total Amt. Details of r. the Partly Shares Received Payment N company Paid on @ 100/- Receipt o. Shares which per Held Call Shares Money (Rs. 5/- Paid towards Capital & 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited Rs.95/- towards premium) 1 Duralloy AABCD4127B 95000 26000 2600000 2600000 – 06.12.2017 2 Empower AAACH3967N 105000 50000 5000000 2500000 – Industries 29.05.2017 Ltd. 2500000 – 05.06.2017 3 NaroisImp AADCN1076D 145000 50000 5000000 2500000 – exPvt. 09.05.2017 Ltd. 2320000 – 17.05.2017

180000 – 25.05.2017 4 Realstone AACCR8504K 60000 42000 4200000 2000000 – Exports 21.07.2017 Pvt Ltd 2200000 – 13.12.2017 Total 405000 168000 16800000 16800000 Admittedly, there is no fresh issue of capital that was made during the years under consideration and the assessee had received the fully paid up towards the shares issued during the assessment year 2018-19.

6.1. It is noted that, for assessment year 2017-18 and 2018-19 the call money received from Narois Impex Pvt. Ltd. And Empower Industries Ltd. Has been accepted by the assessing officer as per the remand report furnished. The Ld.CIT(A) thus deleted the addition u/s.68 of the Act in respect of these two companies. 6.2. In respect of Duralloy Cutters Ltd. And Real Stone Expots Pvt. Ltd., the assesse furnished complete details establishing 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited genuineness of the transaction during the assessment year 2017- 18 and no addition was made in the hands of the assesse. The Ld.AO doubted the balance call money received during assessment year 2018-19. It is noted that there is no consistency in action of the assessing officer. 6.3. In our opinion the share capital and share premium got finalised and accepted by the department during the assessment year relevant to financial year 2009-10 and 2010-11 which was subject to verification by the assessing officer in scrutiny assessment for those years. Thereafter any subsequent payment received by the assessee from the applicants in respect of the same cannot be doubted more so when the three ingredients under section 68 of the Act was accepted by the assessing officer for assessment year 2017-18. Merely because notice under section 133(6) was not responded during the assessment proceedings for the assessment year 2018-19, the transaction cannot be doubted, unless there is any contrary evidence in the coffers of the revenue. We therefore do not find any reason to upheld the disallowance confirmed by the Ld.CIT(A) in respect of call money received from Duralloy Cutters Ltd. And Real Stone Expots Pvt. Ltd. Accordingly, the grounds raised by the revenue in their appeals for assessment years 207-18 and 2018-19 stands dismissed and grounds 1(a) and 1(b) raised by the assessee for assessment year 2018-19 stands allowed.

Issue 2: Unsecured Loan from M/s.Golden Tobaco and interest pain thereon 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited 7. Grounds 2(a) and 2(b) are raised by the assessee for assessment year 2018-19 challenging addition confirmed on account of unsecured loan of Rs.12,00,000/- from M/s. Golden Tobacco Ltd., and interest paid thereon. 7.1. The Ld.AR submitted that, during the course of assessment proceedings, the assessee filed the confirmation of all loan creditors during the year under consideration as under: a. Confirmation of the loan from party giving complete details of name, address, and PAN. b. Details of interest paid. c. The details of TDS deducted on interest. 7.2. The Ld.AO out of the 12 unsecured loan creditors accepted the transaction from 11 parties. However, rejected the loan transaction with M/s. Golden Tobacco Ltd. As the assessee did not furnished relevant documents in respect of this company. The Ld.AR submitted that, the assessee was not granted sufficient time to procure documents from M/s. Golden Tobacco and before the same was could be filed assessment order was passed. The Ld.AO thus made the disallowance u/s.68 in respect of unsecured loan from M/s. Golden Tobacco and disallowed the interest expenditure of Rs.3,39,694/-. 7.3. The Ld.AR submitted that, during the appellate proceeding, once again the loan confirmation letter by M/s. Golden Tobacco was furnished by the assesse. The Ld.CIT(A) called for report from the Ld.AO, wherein the transaction was not verified. The assessing officer in the remand report noted that no evidence were furnished by the assesse.The Ld.AR submitted that this 1966 & 1957/Mum/2025; A.Y. 2017-18 & 2018-19 Sanghvi Realty Private Limited observation is incorrect as assesse had furnished confirmation letter. 7.4. Before us, the Ld.AR submitted the profit & loss statement from the MCA portal for assessment year 2018-19 and the bank statement of the assesse showing the loan received from Golden Tobaco was through banking channel. He also filed the bank statement for financial year 2018-19 to show that that the loan has been repaid by the assesse on 08/10/2018. The NEFT form details for processing the payment has also been placed in the paperbook in support of loan repayment along with the letter from bank confirming the payment of loan with interest to Golden Tobaco. He has placed on record the TDS certificate in form 16A, showing the TDS deducted on the interest payment. He thus prayed that the loan transaction cannot be treated to be not in accordance with law and section 68 cannot be invoked. 7.5.On the contrary, the Ld.DR relied on the orders passed by the authorities below. We have perused the submissions advanced by both sides in light of records placed before us.

We have perused the submissions advance by both sides in the light of record placed before us.

It is noted that, the revenue has not been able to establish that the documents furnished by the assessee cannot be considered. Revenue has not placed on record any document contrary to the documents furnished by the assesse before this Tribunal. We therefore do not find any reason to uphold the disallowance.

In the result the appeals filed by the revenue for assessment years 2017-18 and 2018-19 stands dismissed and cross appeal filed by the assessee for assessment year 2018-19 stands allowed. Order pronounced in the open court on 28/07/2025