TaxTMI 
TaxTMI 
2025 (5) TMI 98
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....s 80IA/80IAB/80IAC/IB/IC/IBA/80ID/80IE/10A/10AA iii. Share Capital / Other Capital iv. Other Income reported in Schedule A-OI not credited to P&L Account 3. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed the requisite details from time to time as asked by the Assessing Officer. 4. During the course of assessment proceedings the Assessing Officer noted that there is a difference between the capital account as per the business balance sheet and the capital account reported in the ITR. He further noted that the capital as on 31.03.2017 was Rs. 5,72,65,831/- whereas the capital as on 31.03.2018 was Rs. 45,94,20,606/- as per the I.T. Return. Thus, there is a huge difference of Rs. 40,21,54,775/-, He, therefore, asked the assessee to reconcile the difference. It was explained by the assessee that the capital account as per the business balance sheet represented only the business capital whereas the capital account reported in ITR included the personal capital account balance as well. However, the Assessing Officer did not agree with the submissions made by the assessee. He a....
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....d business balance sheet cannot be accepted. Since the assessee was required to file his balance sheet with his entire business transactions including his capital account, Profit and Loss Account from proprietorship concern, income from partners and other income. Rejecting the various explanations given by the assessee, the Ld. CIT(A) / NFAC sustained the addition of Rs. 40,21,54,775/- by observing as under: "6.1.3 From the above submissions of appellant and the documents attached thereto, it is abundantly clear that the appellant is a prudent businessman, running business for the last three decades. However, when filing the ITR for the year under consideration as well as for the earlier Assessment years, he has got the accounts audited related to his proprietorship business only and not of his entire assets including the capital. In fact, the appellant has bifurcated his capital into two parts i.e. introduced in his proprietorship business and personal. It is quite amazing that the appellant who, is running his business for the last three decades, and also hires professional for auditing his accounts has drawn such bifurcation with respect to his capital. Further, while t....
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....e is upheld. Accordingly, the Ground No. 1 is dismissed." 8. So far as the issue of sundry creditor is concerned, the Ld. CIT(A) / NFAC sustained the same by observing as under: "7.1 With respect to the above addition the appellant vide his submission dated 04.02.2024 has stated that the amount shown as Sundry Creditor has been mentioned mistakenly as the same is 'unsecured loan. However, the appellant in support of his submission has not attached any documentary evidence along with copy of bank account statement. The appellant should have submitted the copy of confirmation letter of the concerned party, copy of respective ledger and the bank account entries, so as to prove the genuineness of the transactions. In absence of these documents the submission of the appellant is not acceptable. Therefore, the addition made by the AO with respect to the sundry creditor amounting Rs. 13,60,27,619/- is also sustainable and the same is upheld. Accordingly, the Ground No. 2 is dismissed." 9. Aggrieved with such order of Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1] The learned CIT(A) erred in confirming an ad....
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....n made by the learned A.O. was justified. 9] The learned CIT(A) erred in holding that the appellant had failed to submit confirmation, bank account and ledger of the concerned party to prove the genuineness of the transaction and therefore, the addition made was justified. 10) The learned CIT(A) erred in not appreciating that the addition made of Rs. 13,60,27,619/- was not justified at all and the reduction in the sundry creditors was on account of change in classification of certain amounts from sundry creditors to unsecured loans (same side of Balance sheet) and therefore, the addition made is not justified and the same may kindly be deleted. 11] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 10. Grounds of appeal Nos. 1 to 7 relates to the addition of Rs. 40,21,54,775/ -. 11. The Ld. Counsel for the assessee submitted that the assessee had prepared his balance sheet which includes the assets relating to solar business, money lending activities and construction activities. In the ITR form, the assessee has given the details of his assets on a consolidated basis by including business and personal asset....
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.... the same, the Ld. Counsel for the assessee filed the following chart: SANJAY BAFNA A.Y.2018-2019 ITA NO : 2047/Pn/2024 YEARWISE ANALYSIS OF INCOME & TAX PAID FROM AY 2006-07 TO AY 2018-19 Sr. No. ROI Year TAXABLE INCOME EXEMPT INCOME INCOME TOTAL TAX PAID A B C D E F 1 AY 2006-07 13,83,091 2,48,22,365 2,62,05,456 6,26,068 2 AY 2007-08 13,40,027 1,89,76,425 2,03,16,452 5,66,231 3 AY 2008-09 24,76,768 1,48,00,872 1,72,77,640 8,88,456 4 AY 2009-10 37,06,012 92,49,631 1,29,55,643 11,19,654 5 AY 2010-11 47,71,943 91,22,833 1,38,94,776 13,43,223 6 AY 2011-12 80,59,005 70,71,999 1,51,31,004 23,09,378 7 AY 2012-13 83,26,262 1,93,52,083 2,76,78,345 25,09,073 8 AY 2013-14 1,13,88,252 3,37,01,224 4,50,89,476 32,84,776 9 AY 2014-15 1,11,41,324 2,81,47,923 3,92,89,247 35,49,107 10 AY 2015-16 3,16,16,789 1,93,67,881 5,09,84,670 1,02,57,649 11 AY 2016-17 17,30,250 69,10,219 86,40,469 3,12,619 1,27,61,048 1,27,61,048 ....
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....se made addition of Rs. 45,94,20,606/- on the ground that the capital account of the assessee as on 31.03.2017 is Rs. 5,72,65,831/- whereas the capital account as on 31.03.2018 is Rs. 45,94,42,606/- and the assessee failed to explain to his satisfaction regarding the difference of Rs. 40,21,54,775/ -. We find the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the assessee in the ITR form has reported the closing capital balance as on 31.03.2018 at Rs. 45,94,20,606/- which includes his business and personal capital account whereas the capital account as per the business balance sheet was Rs. 11,21,81,842/ -. It is also his submission that in the ITR form filed for assessment year 2017-18 the assessee had reported the details only relating to the business assets and accordingly had reported closing capital account balance of Rs. 5,72,65,831/ -. It is his submission that the difference between the two capital account balances is on account of reporting of all the personal liabilities and assets in the balance sheet in the ITR form ....
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....tate that there is no difference in Balance Sheet nor there is any mismatch rather it is pointed out that since audit is conducted only for my Solar and Other Businesses separate certified Financial Statements are submitted by the auditors, and I have submitted the combined Balance Sheet, including the Solar and Other Businesses financials in the return of income. a. Statement of affairs (Combined Balance Sheet) as on 31/03/2018. (Page No ) b. Solar and Other Businesses Balance sheet (Revised), and Profit and loss account, as attached with Tax audit report in Form no 3CD/3CB for AY 2018- 19.(Page No ) c. Solar and Other Businesses Balance sheet(original), and Profit and loss account, as attached with Tax audit report in Form no 3CD/3CB for AY 2018-19. (Page No d. Statement of affairs (Combine Balance Sheet) as on 31/03/2017. (Page Nos ) e. Solar and Other Businesses Balance Sheet and Profit and Loss account, as attached with Tax Audit report in Form No. 3CB/3CD for AY 2017-18 (Page Nos ) Perusal of these documents will reveal the fact that, all the figures are correctly reported, however there appears apparent confusion and we w....
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....rious firms, fixed deposits in banks, etc. We further find for assessment year 2016-17 the assessee had similarly filed the consolidated balance sheet, copy of which is placed at page 189 of the paper book which reads as under: Sanjay Bafna [CONSOLIDATED] Balance Sheet as at 31^st March, 2016 Schedule No. As at 31^st March, 2016 (Rs.) Liabilities Capital Account 1 33,70,42,571 Loans 2 14,49,06,204 Current Liabilities 3 1,16,87,753 50,36,36,527 Assets Fixed assets 4 3,42,24,025 Investments 5 15,98,88,491 Sundry Debtors 6 63,17,704 Current assets 7 30,32,06,307 50,36,36,527 22. We find the Assessing Officer passed the order u/s 143(3) on 26.12.2018 for assessment year 2016-17 accepting the said balance sheet. Similarly, for assessment year 2022-23 also the assessee had submitted the capital account as per business balance sheet and the personal balance sheet as on 31.03.2016 and the Assessing Officer, after verifying the same, has accepted the claim of the assessee without making any addition in the order passed u/s 143(3) dat....
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..../- INFAVOUR OF SANJAY MOHANLAL BAFNA HUF NC Payment 000080 36,25,000.00 36,90,086.00 12,48,01,000.00 12,11,10,914 Cr Closing Balance 12,48,01,000.00 12,48,01,000.00 26. He submitted that this Ledger account was also submitted before the Assessing Officer. The said loan was shown under the head sundry creditor in assessment year 2017-18 which can be verified from the balance sheet as on 31.03.2017, copy of which is placed at page 162 of the paper book. Therefore, merely because there is change in the head from sundry creditor to unsecured loan, the Assessing Officer should not have made the addition and the Ld. CIT(A) / NFAC should not have confirmed the same. 27. The Ld. DR on the other hand relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. 28. We have heard the rival arguments made by both the sides, perused the order of the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We find from the balance sheet of Sanjay....
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....abilities 74,713.00 VEHICLE -SCODA 11,40,387.00 Duties & Taxes 32,261.00 VEHICLE - TWO WHEELER 41,915.00 Sundry Creditors 42,500.00 INCOME TAX AG IDS-2016 (-)9.00 Investments 20,60,06,236.34 K.K.V.CESS TAX @ 0.05% 3.00 IFL PRIVATE WEALTH MANAGEMENT ( BHAVESH) 12,35,69,852.71 S.B.CESS TAX @ 0.5% (-)2.00 INVESTMENT WITH DEUTSCHE BANK 2,24,74,468.24 WINDSOR SHELTRS ( PRAMOD BAFNA ) (-)40.00 PLOTS & ADV. FOR PLOTS 2,09,27,071.50 AUTIMN REALITY IND PVT LTD 64,74,000.00 Profit & Loss A/c CAPMETRICS INVESTMENTS ADVISERS L LTD 1,72,500.00 Opening Balance DESTIMONY SECURITIES PVT LTD 21,52,520.90 Current Period 5,29,34,395.66 FIXED DEPOSIT WITH HDFC BANK (-)2,07,621.18 Less: Transferred 5,29,34,395.66 GLOBE CAPITAL MARKET LTD 25,20,686.56 INVESTMENT IN ELSS-KOTAK 1,00,000.00 INVESTMENT IN GOLD FUND 5,38,873.17 INVESTMENT WITH MOTILAL OSWAL 50,00,000.00 MOTILAL OSMAL ASSET MANAGEMENT COMPANY LTD 25,00,000.00 NEELKANTH JEWELLARS 30,00,000.00 PPF A/C NO 10521138477 ( SURABHI) 9,83,569.89 PURINARTHA INVESTMENT ADVISORS PVT LTD 4,30,563.00 RELIAGRE SECURITIES LTD 15,00,000.00 RKSV SECURITIES INDIA PVT LTD JAC NO-285258) 1,07....