TaxTMI 
TaxTMI 
2026 (7) TMI 1575
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....he case are that assessee has filed its return of income on 30.10.2017 declaring total income at Rs. 85,98,810/-. The assessee engaged in the business of running of a shopping Mall under the name of M/s Shalimar ELDEE Plaza, Indira Nagar, Lucknow. The assessee company has declared the rental income as business and profession. The case of the assessee was selected for scrutiny and notice u/s. 143(2) was issued on 18.09.2018 period by the notices issued u/s. 142(1) along with questionnaire from time to time. The AO observed that as per the Form 26AS assessee has received Rs. 1,57,53,703/- as a rental income from M/s Future Retail Limited (Big Bazaar). However, the AO based on the copy of the rent agreement dated 18.12.2019 has recomputed the total rental income at Rs. 2,28,48,000/- and the differential of amount of Rs. 70,94,297/- was added as income of the assessee. The AO further observed that assessee has shown booking advance of Rs. 1,21,09,580/- including advance from M/s VJS Properties Pvt. Ltd. of Rs. 51,97,500/- and when the AO has made enquiry from the said company, it was replied that M/s VJS Properties Pvt. Ltd. has purchased office space in the year 2011-12 for Rs. 51,97,....
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.... (a) the correct MOU dated 24.06.2011could not be brought on records of AO due to inadvertent oversight explained in detail in the Rule 46A petition; (b) supporting confirmations, emails, rent advice, monthly bills, and payment proof from Future Retail Ltd. could not be produced before AO because the AO never required or confronted any discrepancy and never issued a show-cause notice; (c) the additional evidence was crucial, authentic, and directly relevant for adjudicating Grounds raised. 2.1 BECAUSE the Ld. CIT(A) further erred in dismissing the Rule 46A application on legally untenable grounds despite acknowledging that the AO never issued a proper opportunity or confronted the Assessee with the basis of the proposed addition thus violating section 142(3). 3. BECAUSE the Ld. CIT(A) erred in sustaining the addition of Rs. 70,94,297 towards alleged "notional rent" by relying on a cancelled MOU dated 03.02.2011, ignoring: (i) the correct operative MOU dated 24.06.2011, duly explained in submissions and produced as additional evidence; (ii) the confirmation dated 08.02.2022 from Future Retail Ltd. confirming that rent was paid strictly in....
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....ount. Once the amount is an opening balance, no addition can be made in the year under appeal. 6.1 BECAUSE the AO's action in relying on alleged non-compliance by the creditor without confronting the assessee violates section 142(3) and renders the addition unsustainable; the CIT(A) erred in not deleting the addition. 7 BECAUSE the CIT(A) erred in sustaining disallowance of Rs. 1,05,588 (Yellow Chillies) ignoring that the debt was duly written off as irrecoverable, fulfilling the conditions of section 36(1)(vii); no show-cause notice was ever issued. 8 BECAUSE the CIT(A) erred in sustaining disallowance of Rs. 7,00,609 under repairs and maintenance merely on alleged absence of vouchers, overlooking: • payments through banking channels, • nature of expenditure, and • absence of any specific defect or show-cause notice. 9. BECAUSE the CIT(A) erred in sustaining disallowance of Rs. 1,25,108 treating legitimate business expenses (pooja expenses, TDS/service tax interest, stamp charges) as "personal or penal", ignoring: • interest on service tax/TDS is compensatory, • stamp-duty write-of....
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....erefore, requested for deletion of the same. 10. On the other hand, ld. Sr. DR vehemently supported the order of the lower authorities and submits that the assessee itself has filed the copy of rent agreement dated 02.02.2011 before the AO and, therefore, taking plea that the said agreement was never acted and filed another agreement is purely an afterthought, and therefore, requested for the confirmation of the addition so made. 11. Heard the parties and perused the materials available on record. It is observed that AO has computed the monthly rent at Rs. 19.04 lacs on the basis of the MOU dated 03.02.2011. It is further observed that the assessee has later filed another MOU (rent agreement) dated 24.06.2011 executed between the appellate company and M/s Future Retail Limited (Big Bazaar) available at Page 4 to 22 of the PB. The claim of the assessee is that the rent was paid by the tenant M/s Future Retail Limited (Big Bazaar) which is an independent party. The other MOU dated 03.02.2011 was never acted upon and was later modified vide MOU dated 24.06.2011. Another important fact which was ignored by both the lower authorities is that the claim of the assessee was further c....
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.... has also verified this facts that they have purchased shop/office space, and rather accepted that the funds were given to the assessee company against the proposed transactions of purchases of office space/ shop. The Ld. AR further submits that in the case of advance received from Amita Gupta and Nitin Bansal, they transferred their booking rights to M/s Mentor Infratech Pvt. Ltd. and copies of the necessary affidavits and the endorsement letter were filed before the lower authorities which are available at pages 239 to 242 of PB. Ld. AR submits that the once that booking were transferred by the respective parties, merely continued the said advance booking amount in the name of the old buyers in the books by the assessee does not made the said booking advances as cessation of liability and therefore, he prayed that the additions so made may please be deleted. 15. On the other hand, the Ld. Sr. DR vehemently supported the orders of the lower authorities and submits that AO has made direct enquiries from respective parties and wherein they had accepted that the transactions of purchases of property were either stood completed or cancelled and, therefore, the AO has rightly treate....
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..../- made by the AO and sustained u/s. 68 of the Act. 19. Heard both the parties and perused the materials available on record. The AO made the addition for the reason that the notice issued u/s. 131 of the said party remained un-complied. The Ld. CIT(A) also confirmed the action of the AO by holding that the genuineness of the transactions and creditworthiness of the lender was not proved. It was the claim of the assessee that the amount was not received during the year under appeal and it was the opening balance brought forward from the preceding assessment years which fact was duly informed to the Assessing Officer in terms of letter dated 18.12.2019 along with the copy of ledger account of Mr. Ajit Kumar as appearing in the books of the assessee, placed at pages 243 and 244 of PB. The provisions of section 68 of the Act could be invoked where a sum is found credited during the previous year in the books of account of the assessee. In the instant case, since no sum was credited in the books of account of the assessee during the year under appeal and the amount under dispute was actually brought forward from the preceding year and shown as the opening balance, no addition could ....
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....to delete the disallowance so made of Rs. 1,05,588/-. 22. Regarding the disallowance of Rs. 7,00,609/- made out of repair and maintenance expenses, it is observed that the assessee has filed all the relevant evidence before the AO and after filing the details, the AO never asked the assessee for file any further details and made the disallowance. When the AO has not pointed out any defect in the details so filed therefore, no disallowance could be made and, accordingly, the same is hereby deleted. 23. Regarding disallowance of Rs. 1,25,108 out of various expenses by holding the same as personal in nature, it is observed that the relevant details were filed before the AO vide letter dated 18.12.2019 placed at PB page 243 along with respective copies of the ledger accounts of the expenses claimed. The AO has ignored the same by holding the same as personal expenses whereas for these expenses are on account of Pooja expenses which is a customary business expenditure, interest paid on service tax which is a normal business expenses and interest on TDS. Except interest on TDS, other expenses are in the nature of routine business expenditures, therefore, disallowance to the extent ....