DY CIT - 32(1), MUMBAI vs. SHRI MANGESH TUKARAM SAWANT, MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

2. “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs.4,38,37,691/- u/s.68 of the Income Tax Act, 1961, without appreciating the fact that the assessee had not shown the loan amount in balance sheet as unsecured loans.” 3. “Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the addition of Rs.4,38,37,691/- u/s.68 of the Income Tax Act, 1961, without appreciating the fact that the assessee has neither paid any interest nor principal.” 4. “The appellant prays that the order of the CIT (A) on the above grounds be set aside and that of the Assessing Officer be restored.” 5. “The appellant craves leave to amend or to alter any ground or add a new ground „which may be necessary.”

Rs.4,38,37,691/- was not supported by corresponding changes/reduction in existing assets of the assessee. As no other individual account of the assessee was maintained, the introduction of capital of Rs.4,38,37,691/- was to be taxed. Thereafter, the notice was given and after the reply of the assessee, the AO raised the addition of Rs.4,38,37,691/- u/s 68 of the Act and the total income of the assessee was assessed to the tune of Rs.7,83,75,480/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who deleted the said addition, therefore, the revenue has filed the present appeal before us.

ISSUE NOS. 1 TO 3

“5.4 I have considered the Submissions made by the appellant and also perused the materials available on record. The appellant has requested to delete the impugned addition made u/s 68 of the Act at Rs.4,38,37,691. The appellant's main contentions are that the source of said capital introduction is amount received from Late Shri Harshad P Doshi during the relevant assessment year at Rs.5 Crores. The appellant has also submitted that during the course of remand proceedings, Smt. Madhu Harshad Doshi, spouse of late Shri Harshad Doshi has confirmed said transactions and she

AO that till date an amount of Rs.9,30,00,000 has kéen paid to the appellant, including Rs.5,00,00,000 in FY 2007-08 as an advance for buying of development rights. The appellant has further submitted that some negotiations are going on with Shri. karshad „Doshi/his legal heir‟ for transfer of Development Rights, klowever, due, disputes over the property and amount of development. considerations this negotiation have not been finalized till date and hence since has been treated in his books as loan.

5.5 In her above referred remand report, after making necessary inquiry/verification with Smt. Madhu Harshad Doshi, spouse of late Shri Harshad Doshi, the Ld. AO has confirmed the receipt of Rs.5 crores during the relevant financial year by the appellant from late Shri Harshad P Doshi. Further, the Ld. AO has not made any adverse comments on the details/submissions made by the appellant and on the information received from Smt. Madhu Harshad Doshi, spouse of late Shri Harshad Doshi and also confirmed that Smt. Madhu Harshad Doshi is assessed with her i.e. Circle-32(2) with PAN: AEMPD0391K. From the facts discussed above, it is evident that the appellant has duly explained the Sources of sum of Rs.5 crores received during the relevant financial year from late Shri Harshad P Doshi. In view of the facts & circumstances of the case and keeping in view of the remand report submitted by the AO. I am of the considered opinion that the Ld. AO was not justified in making addition of Rs.4,38,37,691/- u/s 68 of the Act. Hence, the Ld. AO is directed to delete the impugned addition made at Rs.4,38,37,691/-. Accordingly, the Ground No.1 raise in appeal allowed.”

Madhu Harshad Doshi spouse of late Shri Harshad Doshi during the remand proceeding. It was also explained that an amount of Rs.9,30,00,000/- was paid to the appellant including 5,00,00,000/- in the F.Y.2007-08 as an advance for buying of development rights but negotiations was going on. However, the transaction was treated as loan in the books of account. The AO nowhere raised any adverse remark to the details submitted by the assessee. Late Shri Harshad Doshi was assessed I Circle -32(2) with PAN AEMPD0391K. The transaction has been explained, therefore, the CIT(A) has allowed the claim of the assessee. We nowhere found any illegality and infirmity of the order passed by CIT(A) in question. We affirm the finding of the CIT(A) on this issue and decide these issues in favour of the assessee against the revenue.