ITAT allows appeal on Rs. 60,00,000 disallowance to M/s. Global Properties, emphasizing transaction legitimacy.

The ITAT allowed the appeal against the disallowance of Rs. 60,00,000 paid to M/s. Global Properties, emphasizing the genuine nature of the transaction as a legitimate business decision by the assessee. The decision overturned the CIT(A)'s ruling, noting the absence of evidence indicating impropriety in the payment. The judgment focused on the transaction's legitimacy, leading to the favorable outcome for the assessee without addressing other tax provisions raised by the AO.

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Issues:
Disallowance of Rs. 60,00,000 paid to M/s. Global Properties for nominating appellant's name in property transaction.

Analysis:
The appeal was filed against the CIT(A)'s order for the Assessment Year 2011-12, where the sole ground was the disallowance of Rs. 60,00,000 paid to M/s. Global Properties. The assessee, engaged in construction and property development, declared income of Rs. 10.67 crores, which the AO adjusted to Rs. 11,26,92,440, adding Rs. 60 lakhs for release of rights. The payment was made to M/s. Global Properties for nominating the appellant in a property transaction. The AO contended that M/s. Global Properties' involvement was unnecessary, leading to the disallowance. The assessee argued that the payment was for business purposes, justifying it as a legitimate transaction. The CIT(A) upheld the AO's decision, prompting the appeal.

During the appeal, the assessee reiterated arguments, presenting documents supporting the transaction. The appellant's counsel highlighted a confirmation letter from Tata Autocomp Systems Ltd. acknowledging M/s. Global Properties' role in negotiations. The Revenue's representative argued that these documents were self-serving. The ITAT noted that the payment was made through banking channels, with no evidence of repayment to the assessee. Both parties paid taxes at the maximum marginal rate. Despite an undated letter, the ITAT found the payment a legitimate business transaction, overturning the CIT(A)'s decision in favor of the assessee. As a result, the appeal was allowed, with no need to address other tax provisions invoked by the AO.

In conclusion, the ITAT ruled in favor of the assessee, allowing the appeal against the disallowance of Rs. 60,00,000 paid to M/s. Global Properties. The judgment emphasized the genuine nature of the transaction, considering it a business decision made by the assessee. The decision highlighted the lack of evidence suggesting any impropriety in the payment, leading to the reversal of the CIT(A)'s decision.

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