2009 (9) TMI 1060

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....in holding that a case for invoking the provisions of Section 145(3) of the act was not made out. 3. The Ld. Commissioner of Income-tax (Appeals)-XI, Ahmedabad has also erred in law and on facts in restricting the disallowance of interest from Rs. 5,49,000/- to Rs. 27,472/-. 4. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has also erred in law and on facts in restricting the interest and granting relief of Rs. 5,27,528/- without giving a finding that the assessee had interest free borrowings from which the assessee had advanced the amount from its own funds. 5. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has further erred in law and on facts in deleting the addition of Rs. 40,74,165/- made u/s.68 of the I.T.Act. 6. The Ld. Commissioner of Income-tax(Appeals)-XI, Ahmedabad has also erred in law in not appreciating the fact that in case of deposits in the name of AMP Investment and Victoria Capital ventures, the assessee had not discharged its primary onus of furnishing confirmation and in the case of other three creditors, the confirmations furnished were defective and incomplete. 7. On the facts and in the circ....

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....r holding discussion with Airport Authority Rs. 2,500/- 3. For holding discussion with Architects Rs. 15,000/- 4. For holding discussion for persons who came for booking Rs. 5,000/- 5. Other matters Rs. 100/-    Total Rs. 52,600/- 6. There was no justification found for charging the above fees. The Assessing Officer accordingly invoked the provisions of section 145(3) of the I.T. Act, 1961 and estimated the development fees at 2% of book amount of Rs. 12,08,34,010/-. It was worked out at Rs. 24,16,680/- resulting in an addition of Rs. 9,76,322/-. 7. The Learned CIT(Appeals) deleted the addition by holding that the Assessing Officer has not brought any material on record to prove that the assessee has charged more fees than what has been shown in the books. No defect in the books of account has been pointed out. The Assessing Officer has arbitrarily fixed the development fees at 2% for which there is no basis. The assessee is following "mercantile system" of accounting, therefore, there is no case for making addition. He accordingly deleted the addition by observing as under:- "5.2. I have considered the facts of the ca....

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.... 570 (5) CIT vs. U.P. State Industrial Development Corpn. 225 ITR 703 (SC) (6) Gujarat Electricity Board vs. CIT 226 ITR 746 9. Against this, ld.DR relied on the order of the Assessing Officer. 10. After hearing the rival submissions and carefully perusing the material on record, we are of the view that there is no case for interfering with the order of the Learned CIT(Appeals). For the reasons mentioned by the Learned CIT(Appeals) in his order, we confirm his order. This ground of the Revenue is, therefore, rejected. 11. Ground No.2 of Revenue's appeal relates to rejection of books of account which is related to ground No.1(supra). 12. We have heard the parties. No case is made out to reject the books, no defect is found and, hence, there is no reason to reject the books of the assessee. Therefore, this ground of Revenue's appeal is also rejected. 13. Ground No.3 of Revenue's appeal relates to reduction in disallowance of interest from Rs. 5,49,000/- to Rs. 27,472/-. 14. During the course of assessment proceedings, the Assessing Officer noticed that assessee has taken unsecured loan of Rs. 2,70,03,132/-. Against this, the assessee has made advan....

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....head and not on the letter-head of the parties concerned. The language of the confirmatory letters was uniform. The basic information like complete names and addresses of the depositors were not provided. Even PANs were also not mentioned. Accordingly, the Assessing Officer inferred that identity, creditworthiness and genuineness of the credits are not proved. He accordingly made the addition. 22. The Learned CIT(Appeals) noted that the assessee has placed on record of the Assessing Officer, the names of the parties, complete addresses, statement of accounts, etc. He accordingly deleted the addition by observing as under:- "8.2. I have considered the facts of the case and the submissions of the A.R. of the appellant carefully. I have also gone through the details filed before me by the A.R. and the observations of the assessing officer in the assessment order. The issue was restored back to the file of the undersigned by Hon'ble ITAT, Ahmedabad vide its order, referred to above, for deciding the appeal a fresh in accordance with law and after giving opportunity of being heard. The opportunity was given to the appellant and the I.T.O. having jurisdiction and the issu....

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....the present case, it is found that the appellant has discharged its onus by giving details like confirmations of accounts, addresses of the parties from whom the appellant has received money as loan/deposit/booking amount and in the two cases P.ANs. The Assessing Officer could have carried out detailed inquiries with regard to the parties concerned, which he has not done. Further, I find that the Assessing Officer has not brought on record any material evidence for such addition by rebutting the assessee's contentions. In the case of Deputy CIT Vs. Rohini Builders reported in 256 IT.R 360, the Hon'ble Gujarat High Court has held that once the assessee has discharged the initial onus by proving the identity of creditors by giving their complete address, GIR/PANos and the copies of assessment order wherever readily available and amounts have been received by cheques, the addition is not justified. Further in the case of Orisa Corporation reported in 159 ITR 79, the Hon'ble Supreme Court has held that when the assessee furnished names and address of the alleged creditors and the GIR Numbers, the burden shifts to the Department to establish the Revenue's case and in ord....

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....arat House, 1st Floor, 104, Bombay Samachar Marg, Bombay-23 and also some Numbers, such as, AAA - CV 3287-D/D.C.Cir(I)/1. This is also a copy of account of Victoria Capital Ventures Ltd. on the letter-head of Navratna Organisers & Developers Pvt.Ltd. At page No.68 of the paper-book, is the copy of account of Yogesh Anubhai Shah (HUF) which shows the address of the party as 88, Lavanya Society Vasna, Ahmedabad-7. This is also on the letter-head of the assessee. Page Nos.72 & 73 of the paper-book show account of Payal Yogesh Shah on the letter-head of the assessee and also address of that party. At page No.77 of the paper-book shows the account of Nilay Yogesh Shah on the letter-head of the assessee with the address of the party. The copies of account show that money was transferred through cheque, i.e. though banking channels. It is not a case where no data is available for verification. The assertion of the Learned Authorised Representative of the assessee is that these documents were submitted to the Assessing Officer. In any case, we restore the matter to the file of Assessing Officer. The assessee will submit these documents before the Assessing Officer with complete details of ....