TaxTMI 
TaxTMI 
2022 (6) TMI 413
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssible to earn such huge profits i.e., even double than the turnover, in the first year of business and thus the additions for cash credits needs to be deleted on this ground itself. 2.On facts and circumstances of the case, the learned CIT(A) has grossly erred in not appreciating the fact that the impugned re-assessment proceedings in the case of the appellant firm, is ab-initio bad-in-law since, the individual partners of the appellant firm and related persons, who have introduced the capital and unsecured loans, respectively, have preferred a settlement petition before the Hon'ble Settlement Commission, in respect of the capital and loan introduced in the appellant firm and accordingly, the impugned reassessment order needs to be annulled out rightly. 3.On facts and circumstances of the case, the learned CIT(A) has grossly erred in upholding the addition u/s 68 of the Act for unexplained partners capital of Rs.1,98,50,000/-. As made by the ITO in the hands of the appellant firm, which is not only factually erroneous but also bad-in-law and hence, needs to be deleted. 4.On facts and circumstances of the case, the learned CIT(A) has grossly erred in restricting the addit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of survey, it was unearthed that such unexplained / capital has also been introduced in the name of assessee, Shri Mohanlal Dhanji Patel (M D Patel) as a main person of the group involved in such capital creation. Therefore, consequential survey was conducted on the premises of M D Patel. During the course of survey, statement of Kirit M. Patel, son of M D Patel was recorded and was confronted with the evidence recovered in the survey on Pankaj Danawala. The assessee and its group was beneficiary of such capital creation. Later on, assessee group disclosed / admitted unaccounted income of Rs.5.0 crores. The Assessing Officer recorded that no break-up of such disclosure was furnished. During the survey, it was noted that assessee and its group used to maintain 150 bank accounts in the name of various persons and deposited unaccounted money in their business in those accounts. Later on the funds were transferred either to assessee or their sister concern. No regular assessment was made for the assessee for AY 2003-04. On the basis of such information and evidences the case of assessee was reopened under section 147. Notice under section 148 date 28.03.2008 was served on the assessee.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ii Kailashben V Roy 8,00,000/- iii Venubhai V Roy 7,00,000/- iv Jagdishbhai Balar 7,00,000/- v Kailashben B Roy 6,00,000/- vi Chandrikaben J Roy 6,00,000/- vii Mamtaben Roy 10,00,000/- viii Rekhaben Balar 7,00,000/ 59,00,000/- Total 84,00,000/- 6. The assessee explained and submitted that for the loan Kaushik Granite Pvt Ltd., the assessee filed confirmation of party, name, address; PAN. For M D International, the assessee submitted that it is member of M D Group. for remaining lender mentioned at serial No 3 (i) to (viii) in para-5 above, the assessee submitted that they were mere name lender and M D Patel had disclosed such sums in his individual hand in the petition filed before ITSC for settlement of the various additions. It was brought to the notice that in the assessment of M D Patel a total sum of Rs 5.26 Crore has been added in the assessment order passed under section 143(3) r w s 147 dated 31.12.2008, which covers the capital contribution by partners of and unsecured loan of Rs. 59 lakhs. The assessee also furnished the copy of assessment order passed in case of M D Patel by Income t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntative (Sr-DR) of the Revenue and have gone through the orders of authorities below carefully. The Ld. AR of the assessee submits that substantial ground No.1 is covered in favour of the assessee by the decision of Hon'ble jurisdictional High Court in the case of PCIT Vs Vaishnodevi Refoils & Solvex (2018) 89 ttaxmann.com 80 (Guj), wherein it was held that capital introduced by one partner of the firm, in view of the fact that it is duly reflected in books of account maintained by the concerned partner and confirmed by such partner the impugned addition is liable to be set aside. The Ld. AR for the assessee submits that there is no dispute about the capital introduced by such partner which is duly reflected in the books of account maintained by such partner. Thus, the addition of Rs.1.98 lakh is to be liable to be deleted. 11. On the second ground which relates to addition of Rs.48 lakh Ld. AR for the assessee submits that submitted that for the loan Kaushik Granite Pvt Ltd., the assessee filed confirmation of party, name, address; PAN. For M D International, the assessee submitted that it is member of M D Group. The group has already filed petition before ITSC for settlement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ground No. 1 of the appeal is allowed. 14. Substantial ground No. 2 relates to the addition of unsecured loans. We find that the ld CIT(A) in the setting aside appellate proceedings recorded that the assessee failed to submit any details regarding identity, creditworthiness and genuineness of such transaction thus, the addition of Rs.48 lakh was upheld again. Before us, the ld AR for the assessee vehemently argued that for the loan Kaushik Granite Pvt Ltd., the assessee filed confirmation of party, name, address; PAN. For M D International, the assessee submitted that it is member of M D Group. And that the assessee group has already filed petition before ITSC for settlement of the various additions owning all capital formation and other transaction which is also included in the additions of unsecured loan of Rs. 59 lakhs. 15. On careful perusal of the order of lower authority, we are of the view that the transaction of unsecured loan can be divided in two parts. First part relates to the unsecured loan of Rs. 10.00 lakhs from Kaushik Granites Pvt Ltd and second part/ transaction are of M D International of Rs. 15.00 lakhs and/ or other transactions from three other lenders which....