TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 326
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.... Samudra Polycoats, G L Investments & Joshi Advertising to the tune of Rs. 16,05,440/- as Bogus Sales. 4. The learned CIT(A) erred in stating that the appellant was earning only Commission. 5. The learned CIT(A) erred in treating Rs. 9,98,000 as unexplained cash credit u/s 68. The assessee has moved an Additional Ground of appeal also which reads as as under : "The learned erred in not allowing the interest of Rs. 1,99,302 deductible u/s 24(b)." 2. The facts of the case are that the assessee derives income from salary , income from house property and income from his proprietary concern Surya Enterprises. 3. Ground No 1 relates to Rental Income - The assessee has rented out Industrial Galas ie unit No 302 having area of above 710 square feet and gala no 303 having area of 920 square feet at Navyug Industrial Estate, Sewri , Mumbai to M/s Ashpura Garments Private Limited who is a related party. The said Gala was purchased for Rs. 80,88,565 by assessee and the said Gala was given on rent to company M/s Ashpura Garments Private Limited of which assessee and his wife are shareholders . The assessee is also Executive Director of the said company and also undertaking trading transac....
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....ill be reasonable to hold the rent to be Rs. 16 per square feet per month, being comparable rent in the same area. The FAA also held that municipal rateable value being lower than actual rent cannot be accepted.The FAA thus reduced the rent to be chargeable to tax at Rs. 312960 instead of Rs. 14,40,000 held by the Assessing Officer. 3.3 Aggrieved by the orders of FAA, the assessee is before us . The assessee contended that the actual rent being higher than the municipal rateable value, the actual rent received shall be accepted as income from rent of the two Gala which is Rs. 114000 per annum for both the galas (Rs 4750 X2). The assessee also relied upon the decision of the4 Hon'ble Bombay High Court Bombay High Court in the case of CIT vs. Tip Top Typography, 368 ITR 330 (Bom). CIT v. Tip Top Typography. 3.4 In the cross appeal, Revenue is agitated by action of the CIT(A) in restricting the ALV of the property to Rs. 3,12,960/- instead of Rs. 14,40,000/- considered by the AO. Since the said cross ground of the Revenue is similar to the ground of appeal of the assessee, the cross grounds are being taken together. 4. The Ld. DR relied upon the orders of the Assessing Officer in s....
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.... 23(1) of the Act is quite justified which based on the prevailing rentals in the same building. Thus we hold that income from rent should be charged to tax at Rs. 16 per square feet per month being fair rent rate for comparable properties as submitted by society itself where the assessee flat is situated and hence total rental income to be brought to tax shall be Rs. 312960 as held by FAA. We uphold the findings of FAA. We order accordingly. 6. Ground No 2 relates to the bogus purchase for amount of Rs. 915564 made by the asseseee from M/s Keshav Enterprises and M/s Narayani Textiles while ground no 3 relate to the bogus sales made to M/s Supreme Aagencies, Samudra Polycoats,G L Investments and Joshi Advertising to the tune of Rs. 16,05,440. The assessee was asked to substantiate these purchases and sales by Assessing Officer. The assessee merely submitted copy of ledger account and invoices of these parties. Thus , the assessee failed to submit the delivery challans, bank statement, IT particulars etc as desired by Assessing Officer to substantiate these sales and purchases. The Assessing Officer , made addition of bogus purchase of Rs. 915564 . The Assessing Officer also held t....
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....these transactions, bank statements, financial statements, etc. In view of the above discussion, we hold that FAA has rightly treated these purchases of Rs. 915564 and sales of Rs. 1605440 as bogus and added the same as income of the assessee chargeable to tax. Since we have already held that sales to the tune of Rs. 1605440 is income of the assessee chargeable to tax , it will be fair that the said income of Rs. 1605440 is reduced from sales declared and disclosed by the assessee in the return of income filed with the Revenue otherwise it will be leading to taxing the same amount twice. We order accordingly. 9. Ground No 5 relates to holding by CIT(A) that there is unexplained credit u/s 68 of the Act of Rs. 9,88,000.00 which is shown as advance received on account of sales made. The assessee submitted that the sales made to Josh Advertising of Rs. 688000 and M/s G L Investment of Rs. 3,00,000 aggregating to Rs. 9,88,000 is already treated as bogus sales and added u/s 68 of the Act by FAA and hence the same cannot be added again which will lead to double addition of the same amount. 10. Ld DR had relied upon the order of CIT(A) in support of the case of Revenue. 11. We have per....
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....he deduction is to be allowed u/s 24(b) in order to compute income from house property. 14. The Ld DR supported the order of Assessing Officer by placing reliance thereon. 15. We have heard rival contentions and perused the material on record. The assessee has borrowed funds for purchase of 2 Galas bearing number unit 302 admeasuring 710 sq feet and unit 303 having area of 920 sq feet at Navyug Industrial Estate, Sewri , Mumbai. The assessee is liable to pay interest on such borrowings , however, no interest is paid during the impugned assessment year and the loan is stated to have become NPA, but as per therecord liability of interest is accruing on the loan borrowed. As per Section 24(b), the deduction of interest is allowed on the interest payable on borrowing for purchase, construction , repair etc of house property . However, from the records,it is not clear about the quantum of interest payable and also about the property on which the assessee is intending to claim deduction u/s 24(b) of the Act vide additional ground raised before us. We restore this issue to the file of assessing officer to verify the claim of the assessee as to the quantum of interest payable and also th....