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TMI Blog2018 (6) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... al purpose. Treatment of loan borrowed as unexplained cash credit u/s 68 - Held that:- the issue is remitted to the file of the AO - AO is directed to consider the issue afresh in light of the additional evidence submitted by assessee after giving adequate opportunity of being heard - allowed for statistical purpose. - I.T.A. No. 3451/Mum/2014 - - - Dated:- 11-6-2018 - SHRI SHAMIM YAHYA, AM AND SHRI RAVISH SOOD, JM For The Appellant : Shri K. Gopal And Ms. Neha Paranjape For The Respondent : Shri M. C. Omi Ningshan ORDER Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals)-17, Mumbai dated 18.02.2014 and pertains to the assessment year 2010-11. 2. The grounds of appeal read as under: 1. The Learned Commissioner of Income Tax (Appeal)-17, Mumbai (herein after referred to Ld. CIT(A) ) erred in passing the order dated 18.02.2014 without appreciating the facts and circumstances of the case. The Appellant, therefore, prays that the order passed by Ld. CIT(A) is without any basis and the same may be quashed. 2. Treating the 'Business Income' as 'Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of the relevant Assessment Year. Thus, the disallowance under section 40(a)(ia) is not at all justified and the same may be deleted. 5. Treating the loan borrowed as unexplained cash credit under section 68 of the Act -Rs.5,00,000/- (a) The Ld. CIT(A) further erred in upholding the action of the Ld. A. O. in making addition of ₹ 5,00,000/- treating the same as unexplained cash credit under section 68 of the Act without appreciating the fact and circumstance of the case. The Appellant prays that treating the amount of ₹ 5,00,000/- as unexplained justified and the same may be deleted. (b) The Ld. CIT(A) failed to appreciate that the Appellant has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of the loan creditor by furnishing the loan confirmation. Thus, the treating the amount of ₹ 5,00,000/-as unexplained cash credit under section 68 of the Act is not at all justified and the same may be deleted. 6. Treating the cash deposited in the bank account as unexplained cash credit under section 68 of the Act -Rs.8,08,000/- (a) The Ld. CIT(A) further erred in confirming the action of the Ld. A. O. i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erties and the rental income derived from the same and it should be treated as business income. In this regard, he referred to the decision of Hon'ble Supreme Court in the case Rayala Corporation (P) Ltd. vs. ACIT 72 taxmann.com 149 (SC). 6. Per contra learned Departmental Representative relied upon the orders of the authorities below. He further referred to the decision of Hon'ble Supreme Court in the case of Raj Dadarkar Associates vs. ACIT 81 taxmann.com 193. 7. On careful consideration I note that it is undisputed that assessee company's only source of income is from letting out of properties. This is duly supported by the profit and loss account submitted by the assessee. Even the Assessing Officer has accepted that the entire receipt of the assessee consists of rentals for letting out of property. In these circumstances, I find that Hon'ble Apex court decision in the case Rayala Corporation (P) Ltd. vs. ACIT (supra) duly covers the issue in favour of the assessee. In the said decision Hon'ble Apex court has expounded as under 9. Upon hearing the learned counsel and going through the judgments cited by the learned counsel, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no other income of the assessee except the income from letting out of the said properties, which was the business of the assessee. On those facts, this Court came to the conclusion that judgment of this Court in Karanpura Development Co. Ltd. v. CIT [I962J 44 ITR 362 (SC) was applicable and the judgment of this Court in East India Housing Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 CSC) was held to be distinguishable 9. In accordance with aforesaid discussion, having found the issue to be covered in favour of the assessee by the Supreme Court decision in the case Rayala ITA No.3326//Mum/2017 Knight Raj Properties P. Ltd Corporation (P) Ltd, I set aside the orders of authorities below and hold that the assessee''s receipts should be considered as business income and the consequences would follow. 7. Since facts are the same, following the above precedent, we set aside the order of the authorities below and hold that the income is to be treated as business income and the consequences will follow. Apropos ground no. 3 above relating to disallowance of expenses debited to profit and loss account: 8. This issue is consequential to our decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 14.10.2010 declaring total income of ₹ 23,440/-. The assessment was finalized vide assessment order dated 14.03.2013 passed under section 143(3) of the Act. While passing the assessment order the Ld.A.O. made following additions/disallowances: Sr. No. Particulars Amount (Rs.) 1 Addition by treating the business income as House property income 25,84,281/- 2 Disallowance of expenses debited to Profit Loss account 21,22,889/- 3 Disallowance of Management Consultancy charges 8,35,000/- 4 Addition on account of loan u/s.68 5,00,000/- 5 Addition on account of cash deposits 8,08,000/- 2. The Applicant submits that during the course of assessment proceedings the Ld.A.O. after perusing the Profit and Loss accounts asked the Applicant to explain the nexus of expenditure (Rs.21,22,889/-) debited to Profit and Loss Accounts. In repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Tribunal. 8. The Applicant strongly objects to the addition made by the Ld. A.O. and confirmed by Ld. CIT(A). The Applicant submits that the additional evidences produced by it at serial no. 12 to 18 have got direct bearing on the present appeal filed before your Honours. The Applicant submits that the Hon'ble Bench has been vested with the discretion to admit the additional evidence under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963. 9. The Applicant prays that your Honours may be pleased to admit the additional evidence as the same substantiates the legality of the case and this evidence go into the root of the issues. It is therefore, respectfully submitted that the aforesaid additional evidence may kindly be admitted in the interest of justice. The Applicant relies on the ratio laid by Bombay High Court Smt. Prabhavati Shah vs. CIT 231 ITR 1 (Bom) and Patna Tribunal in the case of Abhay Kumar 63 ITD 144 (Pat.)(TM) for admission of Additional evidence. 15. We have heard both the counsel and carefully considered the submissions and perused the records. Upon careful consideration, we are of the considered opinion that these issues need to be sent to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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