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TMI Blog2014 (2) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... lant prays that the order of the CIT (A) be set aside on the grounds mentioned above and that of the Assessing Officer be restored. 4. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. Ground filed by the assessee read as under: 1. The learned C. I. T. (A) has erred in fact and in law in confirming the partial addition of Rs. 70, 40, 850/- as Deemed dividend u/s. 2(22)(e) of the Income Tax Act, 1961. 2. The learned C. I. T. (A) has erred in fact and in law in confirming disallowance of Rs. 3, 10, 215/- u/s. 57(iii) of the Income Tax Act, 1961 being the Interest paid on overdrawn capital with partnership firm viz. M/s. Sagar Construction. 3. The assessee craves leave to add, alter or delete any of the above Grounds of appeal. ITA/9170/Mum/2010, AY-2007-08: 2. Assessee, an individual, filed his return of income on 31.10.2007, declaring total income of Rs. 62, 780/-.AO finalised the assessment order u/s. 143(3) of the Act, on 04.12. 2009, determining the total income of the assessee at Rs. 1, 52, 29, 770 /-. First Ground of appeal pertains to deleting the addition of Rs. 48, 95, 739/-which represents unexplained inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e properties during the year under appeals, that the first property was at SV Road, Vile Parle, that the said property was declared as Self occupied property the other two were shown as let out, that the assessee computed loss of Rs. 79, 931 under the head 'Income from House Property' which was set off against salaries. Referring to the assessment records of the wife of the assessee, AO observed that the assessee had let out the property at SV Road to M/s Sagar Constructions (SC) and M/s Karodia Constructions (KC), that he did not offer any rental income to tax, that he did not offer any explanation in this regard. As a result AO computed income from this property at Rs. 50, 400/-. AO further observed that the assessee had two other properties from which he had not disclosed any income, that the properties were stated to be at SV Road and were also let out to SC and KC, that one Gala at Sampada was claimed to be let out to Bianco Textiles Solutions(BTS). The AO estimated income from properties and made an addition of aggregate sum of Rs. 4, 24, 200/- (50, 400+100800+273000) under the head 'Income from House Property'. 3.1. Assesse preferred an appeal before the FAA. Before him AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Rs. 1, 09, 67, 500/- and not Rs. 97, 67, 511/- as worked out by the AO, that the AO had ignored the opening debit balance of Rs. 30, 87, 850/- and other debits of Rs. 3, 30, 000/-, Rs. 2, 88, 800/-, and Rs. 2, 00, 000/-aggregating to Rs. 39, 26, 650/-which should have not been considered for addition. Regarding the balance outstanding of Rs. 70, 40, 850/-, assessee submitred that it represented advance received from the company towards purchase of flat which ultimately fell through and the amount was later refunded, that it was not a loan or advance covered by section 2(22)(e) and the entire addition of Rs. 99, 32, 251 should be deleted. 4.1.a. In his order FAA held that the AO had erred in bringing to tax Rs. 1, 65, 000/-which represse nted remuneration from KCPL, that the assessee had correctly pointed out errors committed by the AO, that the ledger account of the assessee with the said company revealed total credit of Rs. 1, 09, 67, 500/-, that there were opening debit balance and other debits aggregating to Rs. 39, 26, 650/-as pointed out by the assessee, that there was a credit balance of Rs. 70, 40, 850/- which alone could have been considered as loan or advance for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, Mrs. Amisha B Koradia(supra), identical issue was discussed by the Tribunal as under : "We have considered the rival submissions as well as the relevant material on record. The dispute before us is regarding the advance of Rs. 58 lacs stated to have been given to the assessee by the company for purchase of flat. The assessee has filed a copy of the resolution of M/s Koradia Construction P. Ltd. dated 09.09.2006 wherein the company had decided to purchase the flat Nos C-402 and C-403 situated at Gokul Divine, Irla, S. V. Road, Vile Parle(W) Mumbai 400 056 from the assessee and her husband. From the books of accounts and audit report of M/s Koradia Construction P. Ltd. , it is evident that the company has shown this amount of Rs. 58 lacs as advance for the purchase of property. As per the Schedule E to the balance Sheet of M/s Koradia construction P. Ltd, the amount of Rs. 58 lacs has been clearly shown as towards purchase of premises. Therefore, in view of the fact that the company is engaged in the business of construction and dealing in properties and the purpose of advancing money to the assessee, as per the record of the company is for purchase of property; therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee had adjusted the interest amount against interest payment of Rs. 3, 10, 215/-on overdrawn capital from M/s. SC. AO held that the interest payment had no nexus with the interest earned and was thus not an admissible deduction under section 57(iii) of the Act. As a result, he added the entire interest income of Rs. 1, 24, 775/- to the income of the assessee under the head income from other sources. 5.1. Assessee preferred an appeal before the FAA. After considering the submissions of the assessee and the assessment order, he held that the assessee withdrew a total sum of Rs. 16, 20, 000/- between 20.07.2006 and 07.09.2006 from M/s. SC and introduced a sum of Rs. 20, 00, 000/- on 27.12.2006 in M/s AD, that both the transactions were through bank, that there was time gap of more than 3 months between the amounts drawn from one firm and the amount deposited with the other firm, that no explanation was given about the time gap between the two transactions, that there was no linkage between the two that the onus was on the assessee to prove the claim made by him. He upheld the action of the AO in disallowing the deduction. 5.2. Before us, AR contended that the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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