2020 (2) TMI 1268

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....ief facts of the case are that the assessee is a real-estate developer. It has e-filed its return of income on 25.9.2014 declaring total income at Rs.NIL. The case of the assessee was selected for scrutiny assessment by issuance of notice under section 143(2) on 1.9.2015. During the scrutiny assessment proceedings, it was noticed by the assessing officer that the assessee has paid Rs. 4.50 lakhs to three companies viz. Gokul organizers P.Ltd., Shreeji Arcade P.Ltd., and Shridhar Reality P.Ltd. of Rs. 1.50 lakhs each as rent expenses for the premises hired at "Vashu Nivas", Alkapuri Road, Baroda. On verification of details, it was assumed by the AO that there were some group concerns of the assessee operating from that premises, and therefor....

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....pective customers and investors, it required a prime location in posh areas, and therefore, it had to look for such location which is idly suited for its business activities. The premises in question was found to be proper and the assessee hired the same and incurred the rental expenses. The lower authorities have denied the claim of the assessee on the ground that some of group concerns were situated in the same premises, and therefore, the claim of the assessee was bogus, and accordingly rejected. We find that lower authorities have not disputed the quantum of rent paid by the assessee nor business requirement of the assessee. Addition made by the Department on the assumption that some of the group of concerns of the assessee also situ....

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..... The assessee has shown complete details as required under section 68 of the Act. The ld.CIT(A) has accepted the explanation of the assessee except Rs. 28,000/-. This addition of Rs. 28,000/- has been confirmed on the ground that a sum of Rs. 25,000/- was found to be deposited in cash in the account of Balaji Trust on 7.1.2014. Therefore, the ld.CIT(A) construed that this cash must have been given by the assessee, which has been introduced in this trust. Similar is the finding with regard to other creditors; for example from Shree Ganga Family Trust, assessee has received fresh loan of Rs. 7,12,000/-. The ld.CIT(A) disbelieved explanation of the assessee qua only Rs. 10,000/-. After considering order of the ld.CIT(A) we are of the....