DCIT 42 1 1 , MUMBAI vs. PRATAP UTTAM PUROHIT, MUMBAI

ITA 2042/MUM/2025Status: DisposedITAT Mumbai16 June 202553 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided on Ground No. 1 concerning agriculture income. The AO had made an addition of Rs.22,85,200/- by estimating agricultural income at Rs.12,00,000/- against the assessee's claim of Rs.34,85,200/-, based on unrealistic gross receipts and suppressed expenses, and a field verification report. The CIT(A) deleted this addition, noting that while the AO's observations about the assessee not conducting operations personally and low expenses were made, there was no dispute regarding land holding and crops grown. The CIT(A) also noted that the assessee sold crops in a grain mandi and filed sale bills, and the only reason for the AO's doubt was the non-filing of evidence regarding entry of goods in the mandi compound. Since sales through the mandi were undisputed, the receipts could not be doubted. The Tribunal, after hearing both parties and perusing the material, noted that the CIT(A) had considered the facts and deleted the addition. The judgment does not record the Tribunal's final decision on this ground or any other grounds.

What were the facts?

The Revenue has filed an appeal against the order of the CIT(A) for Assessment Year 2014-15. The assessee, an individual engaged in civil work, declared a total income of Rs.5,82,18,710/-. The Assessing Officer (AO) made additions on various grounds. The CIT(A) granted relief on several issues. The Revenue's appeal challenges the deletion of additions related to inflated agriculture income, bogus subcontract expenses, car hiring charges, outstanding sundry creditors, unsecured loans, disallowed interest, alleged accommodation entries for LTCG in penny stocks, and commission paid for such entries.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the CIT(A) erred in deleting the addition of Rs.22,85,200/- on account of inflated agriculture income claimed by the assessee, contrary to the AO's finding of unrealistic gross receipts and suppressed expenses. 2. Whether the CIT(A) erred in deleting the addition of Rs.99,63,000/- on account of bogus subcontract expenses, given the Revenue's contention that FZ Khan and BG Corporation did not render services. 3. Whether the CIT(A) erred in deleting the addition of Rs.1,78,500/- in respect of car hiring charges. 4. Whether the CIT(A) erred in deleting the addition of Rs.24,64,661/- made under Section 41(1)(a) by ignoring that sundry creditors were outstanding for over four years with no transactions. 5. Whether the CIT(A) erred in restricting the addition to Rs.10,00,000/- and deleting Rs.2,46,00,000/- in respect of unsecured loans, as the creditworthiness of lenders and genuineness of transactions remained unproved. 6. Whether the CIT(A) erred in deleting the disallowance of interest of Rs.27,87,396/-, as the creditworthiness of lenders and genuineness of transactions remained unproved. 7. Whether the CIT(A) erred in deleting the addition of Rs.5,30,47,379/- made under Section 68, as the AO had proved the alleged transaction and LTCG in penny stocks as accommodation entries. 8. Whether the CIT(A) erred in deleting the addition of Rs.26,52,368/- made under Section 69C in respect of commission paid for obtaining accommodation entries in penny stocks. Assessee's contentions: Not recorded in the provided text. Revenue's contentions: As stated in the grounds of appeal, the CIT(A) erred in deleting the additions by not appreciating the facts regarding inflated agriculture income, bogus subcontracts, outstanding creditors, unproved creditworthiness of lenders for unsecured loans and interest, and accommodation entries in penny stocks.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(1),Section 131(1)(d),Section 41(1)(a),Section 68,Section 69C

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Cause title — parties, addresses and appearances
| आयकर अपीलीय न्यायाधिकरण न्यायपीठ, मुंबई | IN THE INCOME-TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORESHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER & SHRI SANDEEP GOSAIN, JUDICIAL MEMBER आयकर अपीलसं./ITA No.2042/MUM/2025 (निर्धारणवर्ष / Assessment Year :2014-) DCIT 42(1)(1) v/s. Room No. 732, Kautilya बनाम Bhavan, BKC, Maharashtra-400051 Pratap Uttam Purohit 307, Jalaram Business Centre, Ganjawala Lane, Chamunda Circle, Borivali West, Maharastra-400092 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AHCPP6451F Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारितीकी ओर से/Assessee by: Shri Bharat Kumar राजस्वकीओरसे /Revenue by: Shri R. A. Dhyani सुनवाईकीतारीख / Date of Hearing 14.05.2025 घोषणाकीतारीख/Date of Pronouncement 16.01.2025

आदेश /ORDER PERSANDEEP GOSAIN [J.M.]:- This appeal is filed by the revenue against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)"] passed u/s.250 of the Income-tax Act, 1961 [hereinafter referred to as “Act"] for Assessment Year [Α.Υ.] 2014-15. Page 2 Α.Υ. 2014-15 Pratap Uttam Purohit

2.

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