TaxTMI 
TaxTMI 
2022 (11) TMI 967
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....at assessee is in the business of manufacturing of optical and lenses. During the year under consideration, the assessee has shown income from house property, loss from business and profession and income from other sources for which details and supporting evidences were filed during the course of assessment proceedings. During the course of assessment proceedings, the ld. AO noticed that assessee had debited a sum of Rs.12,00,000/- on account of underwriting charges. When show-caused as to why the same should not be disallowed as not incurred for the purpose of business, assessee filed detailed explanation vide letter dated 29/10/2015 as under:- h. Underwriting Charges Rs 12 lacs M/s Reflect Optics (P) Ltd ["ROPL"] has been in the business of running restaurants and in the year under assessment was running a restaurant by the name of "Balthazar" at Juhu Road Opp Lido petrol Pump, Santacruz (W), Mumbai. The said restaurant was not doing well and Company wanted to close down the Said Restaurant because of continuous losses. Whereas, Assessee is also in the business of running various restaurants through its partnership firm namely "Payless A Optics" and based on its....
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...., that order of the ld. CIT(A) had attained finality. Hence, we do not find any infirmity in the present CIT(A) following his predecessor the ld. CIT(A)‟s order on the very same issue for the year under consideration. Accordingly, the ground No.(i) raised by the Revenue is dismissed. 3. The ground No.(ii) raised by the assessee is challenging the deletion of addition of Rs.1,67,10,442/- made u/s.68 of the Act. 3.1. We have heard rival submissions and perused the materials available on record. We find from para 9 of the assessment order, the ld. AO had mentioned that assessee had credited an amount of Rs.1,67,10,442/- on account of gifts received from Shri Anil Hingorani. During the course of assessment proceedings, the assessee was asked to explain and furnish the occasion for which the gift was received creditworthiness of the donor, bank statement of the donor etc. In response to the query raised by the ld. AO, the assessee submitted that the gifts were received out of natural love and affection from his brother. It was explained that assessee had actually taken loans in earlier years from his brother which was converted as gift during the year under consideration. Th....
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.... 3.3. It is not in dispute that the assessee‟s proprietorship concern Savy Designs had borrowed loan from Mr. Anil Hingorani in earlier years. At the time of receipt of loan, no addition has been made u/s.68 of the Act in the hands of the assessee. It is not in dispute that this loan lying in the proprietorship concern books of the assessee is converted as gift during the year under consideration. Thus, there was no fresh receipt of money during the year under consideration. Hence, on this count itself, the provisions of Section 68 of the Act could not come into operation at all. In any case, we find that the ld. AO in the remand report had agreed that the creditworthiness of the donor is established in addition to identity and genuineness of the transaction. The ld. CIT(A) had categorically stated that there is nothing on record brought by the ld. AO to show that the transaction of gifts are of doubtful nature. In any case, this is nothing but gift received by the assessee from his own brother which would be exempt u/s.56(2) of the Act. On this count also no addition could be made in the hands of the assessee in respect of the gift. It is also a fact on record that gift has ....
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....gly, he proceeded to treat the receipt of advance of Rs.27,00,000/- as income of the assessee without mentioning under what provisions of the Act, the said receipt is taxable in the eyes of law. This was deleted by the ld. CIT(A). 4.2. We find that assessee was holding 50,500 shares of Rs.100/- each of Rs.50,50,000/- of FCPL. Vide an agreement, the assessee agreed to sell his entire shareholding in FCPL to M/s BJN Hotels Pvt. Ltd., for a consideration of Rs.68,00,000/-. The assessee received an advance of Rs.27,00,000/- towards sale of shares of FCPL from BJN during the year under consideration. However, certain disputes arose between parties and also because of death of Mr. P.B. Nichani, the key person of BJN, shares of FCPL could not be transferred to BJN. We find that the ld. CIT(A) had categorically held that shares held by the assessee in FCPL was continued to be shown in the balance sheet of the assessee under the head "investments". These shares were purchased by the assessee in 2007 and have held for more than six years and were purchased as strategic investment. These facts were not controverted by the Revenue before us. In any case, we find what is received by the asse....