DCIT 1(3)(1), MUMBAI, AAYAKAR BHAVAN, MUMBAI V. GGEOPRENEUR REALTY PRIVATE LIMITED , MALAD WEST,MUMBAI

ITA 2186/MUM/2024

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A) which pertained to the assessment year 2014-15. The revenue challenged the deletion of additions made by the AO concerning unsecured loans, interest on these loans, and consultancy fees. The CIT(A) had admitted additional evidence under Rule 46A and based on the remand report from the AO, deleted the additions. The Tribunal, after reviewing the CIT(A)'s order and the remand report, agreed with the CIT(A)'s findings and dismissed the revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28558 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANGEPATIL PUSHKARAJ RAMESH; DR
• Assessee Lawyers: MAHAVEER JAIN; SHOBHIT MISHRA; ARS
• Keywords: Set aside; Additional evidence; Capital expenditure
• Section: 68; 133(6); 27; 194J

Judgement Text

" | आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 2186 /Mum/2024 Assessment Year: 2014-15 DCIT, 1(3)(1), Mumbai, Aayakar Bhavan, Mumbai Vs Ggeopreneur Realty Private Limited 1001, 10th Floor First Avenue Goregaon Mulund Link Road Malad West Mumbai - 400053 [PAN: AAECG9513F] अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Mahaveer Jain & Shobhit Mishra, A/Rs Revenue by : Shri Bhangepatil Pushkaraj Ramesh, Sr. D/R सुनवाई की तारीख/Date of Hearing : 19/02/2025 घोषणा की तारीख /Date of Pronouncement: 24/02/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the revenue is preferred against the order dated 09/02/2024 by the NFAC, Delhi [hereinafter ‘the ld. CIT(A)’], pertaining to AY 2014-15. 1.1. Delay of 15 days is condoned. 2. The grievance of the revenue reads as under:- “1. Ground No.1 Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs. 6,94,00,000/- towards un-secured loan and deleting the addition of Rs. 41,41,016/- towards interest, without following the due procedure laid down in Rule 46A of I.T.Rules, 1961 i.e. without recording the reason for admission of additional evidence as specified in clause 1 of Rule 46A\"? 2. Ground No.2\" Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) is justified in deleting the addition of Rs. 6,94,00,000/- towards un-secured loan and deleting the addition of Rs. 41,41,016/- towards interest, I.T.A. No. 2186 /Mum/2024 2 without considering the remand report of the AO wherein he has objected to admission of additional evidence during appellate stage?\" 3. Ground No.3\" Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs. 8,51,165/- towards consultancy fees, without considering the remand report of the AO wherein it is stated that the assessee has merely proved the identity of the receipient but failed to explain the nature of expenses, basis of payment, business expediency and also stated that genuineness of the transaction is not proved'\"? 4. Ground No.4 The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the AO be restored 5 Ground No.5 The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary.” 3. Briefly stated, the facts of the case are that the assessee electronically filed its return of income on 20/09/2014 declaring a loss of Rs.33,15,887/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the AO sought details in respect of unsecured loans of Rs.6.94 Crores in the light of Section 68 of the Act. The assessee was further asked to explain the interest payable of Rs.41,41,016/- and consultancy fees of Rs.8,51,165/-. On receiving no plausible reply, the AO made the impugned disallowance/additions. 5. Before the ld. CIT(A), the assessee filed additional evidence and requested for admission under Rule 46A. The ld. CIT(A) was convinced with the additional evidence and admitted the same and called for a remand report from the AO. Vide letter dated 13/10/2017, the AO submitted the remand report to the ld. CIT(A) wherein the additional evidence forwarded by the ld. CIT(A) were verified and for verification, notice u/s 133(6) of the Act was issued to the all the unsecured loan parties for furnishing information in relation to loan given by them to the I.T.A. No. 2186 /Mum/2024 3 assessee. The remand report is exhibited at pages 1 to 6 of the paper book. After due verification at para 5, the AO observed “The details filed has been examined. Prima facie, the loan confirmation seems to be in order.” On the basis of the remand report, the ld. CIT(A) deleted the addition on account of unsecured loan. 6. After giving a thoughtful consideration to the order of the ld. CIT(A) read with the remand report, we are of the considered view that the assessee has successfully discharged the onus cast upon it by the provisions of Section 68 of the Act. Therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). The impugned ground is dismissed. 7. The next grievance relates to the deletion of addition on account of consultancy fees amounting to Rs. 8,51,165/- paid to Tushar Vira. 8. Facts on record show that the assessee has paid consultancy fees and has deducted tax at source on the consultancy fees as per the provisions of Section 194J of the Act. The AO added the same on the ground that expenses are not for business purposes. 8.1. Before the ld. CIT(A), it was strongly contended that all the expenses charged to profit and loss account have been incurred wholly and exclusively for the purpose of business of the assessee. The impugned expenses is neither capital expenditure nor personal. Therefore, the same should be allowed. The ld. CIT(A) verified the confirmation, copies of ITR and the financials and was convinced that the payment in question was proved with identity of the party and the nature of expenditure was also described and deleted the addition. I.T.A. No. 2186 /Mum/2024 4 9. We find that the ld. CIT(A) has deleted the addition after verifying the facts of the case with documentary evidence. Therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). The effective ground/s raised by the revenue are dismissed. 10. The assessee has also moved an application u/s 27 of the ITAT Rules. Since it was not pressed, the same stands dismissed. 11. In the result, appeal of the revenue is dismissed. Order pronounced in the Court on 24th February, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 24/02/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0015ितिलिप अ\u001aेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001c / The Appellant 2. \u0015\u001dथ\u001c / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "