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TMI Blog2016 (4) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 68 can be invoked if the identity and creditworthiness of the creditor is not established and that the transaction is not genuine. In the case under consideration, the genuineness of the transaction stands proved because the money has come from a known source-through banking channels. As far as identity and credit worthiness is concerned, same cannot be doubted. Proprietor of the MDC and the assessee are fighting legal battle in the Court and the order of the Magistrate clearly states that payment of ₹ 23. 00 lacs was made by MDC to the assessee during the under appeal. Therefore, in absence of existence of basic ingredients of Section 68, the FAA was not justified in upholding the order of the AO, who had made the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Shri Deepak Tralshawala ORDER Per Rajendra A. M. Challenging the orders of CIT(A)-5, Mumbai the assessees and the Assessing Officer(AO) have filed appeals for the above mentioned AY. s. As the appeals are of the same group, so, we are adjudicating them by a single common order. The details of filing of return, returned incomes etc. can be summarized as under : ITA Nos. A. Y. ROI filed on Returned Income Assessment dt. Assessed Income Dt. of orders of CIT(A) 4119/M/2014 2006-07 14. 03. 2008 2, 00, 532/- 23. 12. 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and made he made an addition u/s. 68 of the Act for the said amount. 3. Aggrieved by the order of the AO, the assessee filed an appeal before the First Appelate Authority (FAA). Before him it was stated that the assessee had filed a copy of MOU dt. 26. 10. 2005, that the MOU clearly mentioned that ₹ 23. 00 lacs were received as earnest money, the address of the payer was made available to the AO. The FAA called for a remand report from the AO. After considering the available material that the assessee was not able to produce confirmation from MDC, that there were many discrepancies in the MOU, that there was no mention of the payment to be made to the assessee, subsequent to the MOU, that the MOU could not be treated for credible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itworthiness of the creditor is not established and that the transaction is not genuine. In the case under consideration, the genuineness of the transaction stands proved because the money has come from a known source-through banking channels. As far as identity and credit worthiness is concerned, same cannot be doubted. Proprietor of the MDC and the assessee are fighting legal battle in the Court and the order of the Magistrate clearly states that payment of ₹ 23. 00 lacs was made by MDC to the assessee during the under appeal. Therefore, in absence of existence of basic ingredients of Section 68, the FAA was not justified in upholding the order of the AO, who had made the addition of ₹ 23 lakhs. So, reversing the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was of selling a painting, that assessee was not carrying out any regular business transaction, accordingly he held that the expenses incurred by the assessee did not fulfill the requirement of section 30 to 37 of the Act. Aggrieved by the order of the AO the assessee preferred an appeal before the FAA. Before him it was contended that assessee was running a business c entre, the expenses incurred were routine in nature, that manufacturing unit of the assessee stopped functioning since 1990, expenses were allowable to maintain a minimum staff and office set up. After considering the assessment order and the submission of the assessee the FAA held that the main business of the assessee stood closed as far back as 1990, that the expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. It is a fact that assessee has closed down its manufacturing unit long back, but it does not mean that he was not carrying out any business activities. We find that while finalising the assessment of the assessee for the AY. 2005-06, the AO had allowed 75% of the identical expenses. On a query by the Bench the AR conceded that assessee had not agitated the issue before the FAA in that matter. Considering the peculiar facts and circumstances of the case, we want to restrict the disallowance to 25% of the expenses disallowed. Effective ground of appeal is decided in favour of the assessee in part. As a result appeal filed by the Assessee-Individual for the AY. 2006-07 stands allowed and the appeal of the AO for that year stands dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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