TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 1961
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....rds are that the assessee is a partnership firm engaged in the business of real estate. Search u/s. 132 of the Act was conducted at the business premises of the assessee firm as well as on the premises of other concerns/business associates on 29.01.2014. Notices u/s. 153A of the I.T. Act dated 12.09.2014 were issued to the assessee for filing returns for Assessment Years 2008-09 to 2013-14 and in response to that assessee filed return of income on 28.1.2016. For Assessment Year 2008-09 the assessee filed its regular return u/s. 139 of the Act on 30.09.2008 showing income of Rs. 2,10,410/- but for remaining assessment years return of income were filed for the first time after the issuance of notice u/s. 153A of the Act. Notices u/s. 143(2) followed by detailed questionnaire u/s. 142(1) were served upon the assessee. Written submissions with supporting documents were filed by the assessee. Consolidated assessment order were passed for Assessment Year 2008-09 to Assessment Year 2011-12 & Assessment Year 2013-14 u/s. 153A and for Assessment Year 2014-15 u/s. 143(3) of the Act. Ld. A.O. after considering the submissions made by the assessee made following disallowance/additions for vari....
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.... IT (SS) A No. 247/Ind/2017 Assessment Year 2010-11 1. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A), was not justified in holding that the AO was justified in making disallowance of Rs. 2,08,819/- towards interest paid on loan holding that the loan funds were not utilized for the purpose of the business. 2. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax CA), was not justified in holding that the AO was justified in making addition of Rs. 21,000/- treating the recovery of excess withdrawal of capital as unexplained. 3. That the assessee craves leave to add, alter, delete or modify any ground(s) of appeal during or before the hearing of the appeal. IT (SS) A No. 248/Ind/2017 Assessment Year 2011-12 1. That on the facts and in the circumstances of the case of the assessee the Ld. Commissioner of Income Tax (A), was not justified in holding that the AO was justified in making disallowance of Rs. 2,29,024/- towards interest paid on loan holding that the loan funds were not utilized for the purpose of the business. 2. That on the facts and in the circums....
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....e course of assessment proceedings. Through Ground No. 2 the impugned addition of Rs. 2,24,326/- is challenged with regard to disallowance of interest paid on loan holding that the loan funds were not utilized for the business purposes. 9. We find that the Co-ordinate Bench while adjudicating similar issue in the case of Sainath Coloniers V ACIT (2019) 35 ITJ 77 (Trib. Indore) following the judgment of Hon'ble High Court of Delhi in the case of CIT V/s. Kabul Chawla (2016) 380 ITR 573 (Del) observed as follows; "We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied by the Ld. Counsel for the assessee are of the considered view that no addition/disallowance was called for Assessment Year 2008-09 to 2010-11 as no incriminating material was found during the course of search at the premises of the assessee as the time limit of issuance of notice u/s. 143(2) of the Act stood expired much before the date of conducting search u/s. 132 of the Act". 10. Examining facts of the instant appeal in the light of decision of Coordinate Bench, we find that the assessee filed regular return of income u/s. 139 of the Act for....
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....aterial found during the course of search. Therefore the assessee fails to succeed in this legal ground raised in Ground No. 1 and the same stands dismissed. As facts and issues remains the same for Assessment Years 2010-11, 2011-12, 2013-14 and 2014-15 similar Ground No. 1 raised in these four appeals also stands dismissed. 14. Now we take up Ground No. 2 for Assessment Year 2009-10 raising disallowance of interest paid on loan for the alleged non utilization of the loan for the business purposes. 15. Ld. Counsel for the assessee prayed for deleting the addition on the basis of submission made before Ld. CIT(A) page 1 to 10 of the paper book and also submitted that the assessee firm is not carrying any business activity from Assessment Year 2009-10 onwards. No interest expenses have been claimed against revenue, therefore no disallowance for the interest paid was called for. 16. Ld. Departmental Representative vehemently argued and supporting the orders of lower authorities. 17. We have heard rival contentions and perused the records placed before us. The common issue raised in Ground No. 2 relates to disallowance of interest paid on loan. There is no dispute to the fact that ....
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.... under appeal assessee is having NIL revenue and it is not the case of the revenue authorities that the assessee has claimed the interest to reduce its tax liability. We accordingly delete the disallowance of Rs. 2,11,264/- for Assessment Year 2009-10 and allow this issue raised in Ground No. 2 of assessee's appeal. Similar issue is raised in Ground No. 2 for 2010-11 & 2011-12 and in view of our above finding we delete the disallowance of Rs. 2,08,819/- and Rs. 2,29,024/- and allow Ground No. 2 of Assessee's appeal for 2010-11 & 2011-12 also. 20. Now we take up the third issue for addition towards unexplained recovery of excess withdrawal of capital at Rs. 3,00,000/- for Assessment Year 2009-10 against which the assessee is in appeal raising Ground No. 3. Brief facts relating to this issue are that there was an addition in the capital account of Rs. 3,00,000/- which was given by the partner Mr. Manoj Jain as part of its capital contribution. Ld. A.O. treated the alleged credit of Rs. 3,00,000/- as unexplained u/s. 68 of the Act by holding that the assessee failed to explain the cash credit. Ld. CIT(A) confirmed the view. Now the assessee is in appeal before the Tribunal. L....
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....f the transaction which was entered into for repaying the bank loan outstanding on the firm. Now the last limb for us to examine is the creditworthiness of the partner Mr. Manish Rawatiya who has paid a sum of Rs. 8,52,000/-. Ld. Counsel for the assessee has contended that no books of accounts were prepared therefore provisions of Section 68 of the Act are not applicable. We however find no merit in this contention because the partnership firm is required to maintain the books of accounts. Balance sheet and capital account has been furnished. The capital contribution by the partner Mr. Manish Rawatiya for Rs. 8,52,000/- during Assessment Year 2011-12 has to pass through certain entries in which entry is made for receiving the money in bank by which the bank account is debited and partners capital account is credited. Now asking about the creditworthiness of the partner for investing capital of Rs. 8,52,000/- is well within the powers of the Ld. A.O. The assessee is bound to satisfy the Ld. A.O. by placing various evidences to prove the creditworthiness of the partner. In the instant case with regard to the amount received from Mr. Manish Rawatiya for Rs. 8,52,000/- assessee failed ....