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TMI Blog2019 (9) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... n facts and circumstances, when both the partners of the partnership firm were of 20 years of age and were still studying, then and also where the investment has been admitted to have been made by Shri Subash G. Pingale, there is no question of rejecting the plea of the assessee in this regard. Accordingly, we reverse the orders of the authorities below and hold that once the addition has been made in the hands of Shri Subash G. Pingale, may be, the block assessment was not upheld on technical grounds, but where the partners were minors and were studying and had no source of income, then no addition is warranted in the hands of the partnership firm. Charge of interest u/s 158 BFA(1) - whether the said interest levied for filing the return late for the block period is to be upheld or not ? - HELD THAT:- As plea of the assessee before us is that the delay was on the ground that Assessing Officer had not provided the photo copies of the documents. The learned Authorised Representative has pointed out that the issue stands covered by the order of the Pune Bench of the Tribunal in the case of ACIT Vs. Mr. Amod Subhash Pingale [ 2016 (7) TMI 1542 - ITAT PUNE] . The said paras are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished following concise grounds of appeal:- 1. In the facts and circumstances of the case and in law, both the lower authorities have erred in holding that during the block period, the appellant had made unexplained investment of ₹ 55,52,500.00 for purchase of lands at Katraj and have further erred in taxing the said amount as undisclosed income of the appellant for the Block Period. Both the lower authorities have failed to properly appreciate the evidence adduced by the appellant in this regard. The decision of both the lower authorities in this behalf being arbitrary and perverse the same may please be vacated and it may please be held that the appellant did not make any unexplained investment for purchase of lands at Katraj. 2. Without prejudice to Ground No.[1] above and by way of alternate submission the appellant submits that since he is carrying on the business of Promoters and Builders and since the lands at Katraj are acquired for the business of the appellant, the unexplained investment if any in purchase of these lands is a revenue expenditure and the learned C.I.T.[A] ought to have allowed the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the same is dismissed as not pressed. 8. Now coming to the ground of appeal No.3 wherein the assessee is aggrieved by the disallowance made u/s 40A(3) of the Act. 9. This is a block assessment proceeding completed u/s 158BC(c) for the block period 01.04.1989 to 08.12.1999. The assessee is aggrieved by disallowance of ₹ 10,30,500/- for assessment year 1996-97 and ₹ 80,000/- for assessment year 1997-98. 10. The learned Authorised Representative for the assessee before us pointed out that the said disallowance made is outside the scope and purview of Section 40A(3) of the Act. In this regard, he pointed that the cash payment was made to land owners at Katraj. He also pointed out that during the course of search, document was found in which there was cheque entries and other entries, the total amount was ₹ 55,52,500/- and 20% of the same was disallowed u/s 40A(3) of the Act. He placed reliance on the decision of ITAT, Pune in the case of ACIT Vs. Rushiraj Builders in ITA No.1802/PN/2005 order dated 13.02.2012 and the decision of ITAT Bangalore in the case of Madhuvana House Building Co-operative Society Vs. ACI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in the hands of assessee firm. 14. The learned Authorised Representative for the assessee before us pointed out that the partnership firm was formed on 15.01.1990 and it comprised of Shri Ankul Pingale and Shri Amod S. Purandare, who were both of 20 years of age. He further pointed out that the Assessing Officer in the case of Shri Subash G. Pingale i.e., father of Shri Amod Pingle had made addition of the aforesaid amount in his hands which was deleted on technical grounds as the proceedings under section 158BC(c) failed. The same was confirmed by the Hon ble Bombay High Court. He also referred to paras 33 and 34 and pointed out that the findings of the Assessing Officer were that the money was invested by Shri Subash G. Pingale. Hence, no addition on merits to be made in the hands of the assessee firm. He also pointed out that the Assessing Officer made addition on account of unexplained investment and also made disallowance u/s 40A(3) of the Act for the entire amount. However, vide order u/s 154 of the Act, the same was reduced to 20%. Another aspect which was raised was that Assessing Officer was asked to summon the witness as per the letters placed at Pages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made by Shri Subash G. Pingale, there is no question of rejecting the plea of the assessee in this regard. Accordingly, we reverse the orders of the authorities below and hold that once the addition has been made in the hands of Shri Subash G. Pingale, may be, the block assessment was not upheld on technical grounds, but where the partners were minors and were studying and had no source of income, then no addition is warranted in the hands of the partnership firm. In such facts and circumstances, we allow the claim of the assessee vide ground of appeal No.1. 18. Now coming to the grounds of appeal No.4 which is against the charge of interest u/s 158 BFA(1). 19. The brief facts relating to the issue are whether the said interest levied for filing the return late for the block period is to be upheld or not ? The said interest has been levied u/s 158 BFA(1) by the Commissioner of Income Tax (Appeals) by way of enhancement on the ground that the return of income for the block period was delayed by the assessee. However, the plea of the assessee before us is that the delay was on the ground that Assessing Officer had not provided the photo copies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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