DCIT- CC- 6(2), MUMBAI vs. SAMIRA HABITATS INDIA LTD., MUMBAI

The assessee company is engaged in the business of real estate. The solitary issue involved in this appeal is the deletion of the addition of Rs.4,28,70,000/- by the ld. CIT(A), which was made by the Assessing Officer (‘A.O.’ for short) on account of unexplained investment being deposited with Kotak Mahindra Bank, for which the (A.Y. 2011-12) Dy. CIT vs. Samira Habitats India Ltd. assessee has not furnished complete details, explaining the source of the said fixed deposits and also that the said investment was not proved to be recorded in the books of accounts of the assessee.

Brief facts of the case are that the assessee company filed its return of income for the impugned year dated 30.09.2011, declaring total income of Rs.2,37,74,450/-.

Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A).

The ld. CIT(A) passed an order, confirming certain additions and deleting certain addition/disallowances. The addition pertaining to unexplained investment in time deposit was deleted by the ld. CIT(A) on the ground that the assessee has proved the source of the investment in time deposit.

The ld. Departmental Representative (ld. DR for short) for the Revenue contended that the assessee has failed to furnish the details pertaining to the party-wise breakup of the sales, income, details of purchase, etc., declared by the assessee, thereby failing to establish the source of the investment accounted in its books of account. The ld. DR relied on the order of the A.O.

The ld. Authorized Representative (‘AR’ for short), on the other hand, controverted the same and submitted that the assessee company had filed additional evidences before the ld. CIT(A), which had substantiated the assessee’s claim that these were not unexplained investments. The ld. AR further stated that the current account of the assessee with Kotak Mahindra Bank reflected the receipts from the various sources which include the maturity amount of fixed deposit with the same bank. The ld. AR further contended that all the bank details were disclosed by the assessee and relied on the order of the ld. CIT(A).

We have heard the rival submissions and perused the material available on record.

The A.O. made addition on the impugned amount for the reason that the assessee has failed to furnish the details of the party-wise break up of sales, income, details of project, declared by the assessee along with the supporting documents. It is observed that the assessee has furnished the additional evidences during the first appellate proceedings consisting of the bank accounts of the assessee. The A.O. in his remand report has stated that the assessee has not proved the sources of the said investments. The ld. CIT(A), on the other hand, observed that the impugned amount was made by the assessee as time deposit with Kotak Mahindra Bank and also observed that the assessee was also maintaining a current account with Kotak Mahindra Bank, Chembur, Mumbai branch with A/c. No. 09602010000193.

The ld. CIT(A) has submitted that the time deposits are in the nature of auto sweep from the bank account and that the current account showed receipts from various sources, including the maturity amount of fixed deposits of the assessee with the same bank. The ld. CIT(A) has also held that the payment has been made by cheque from the bank account of the assessee with Kotak Mahindra Bank, thereby establishing the source of the investment in time deposit by the assessee. The ld. CIT(A) has also held that the A.O. has not justified the fact that the assessee has failed to furnish all its bank accounts. On this ground, the ld. CIT(A) held that the impugned amount is not unexplained investment in time deposit and thereby deleted the impugned addition made by the A.O.

In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 07.11.2022.