Kaalkaa Real Estates Pvt. Ltd. Vs ITO (ITAT Mumbai)
Identity, Creditworthiness and Genuineness Established: Mumbai ITAT Deletes ₹25-Lakh Addition for Joint-Venture Advance
The assessee received ₹25 lakh from Minaxi Suppliers Pvt. Ltd. as an advance towards a joint-venture transaction and disclosed it under “Advances” in its balance sheet. The Assessing Officer made the addition on the ground that the assessee had failed to establish the identity and creditworthiness of the contributor and genuineness of the transaction.
The Mumbai ITAT noted that the assessee had furnished comprehensive evidence, including the contributor’s certificate of incorporation, PAN, income-tax return, audited financial statements, confirmation and affidavit. The contributor’s financial statements reflected shareholders’ funds exceeding ₹79.46 crore, demonstrating sufficient financial capacity.
The Tribunal further observed that identical transactions involving the same contributor had already been accepted by coordinate benches in the assessee’s own case and other connected matters. The Revenue neither identified any distinguishing fact nor produced any contrary binding decision.
Applying judicial consistency and binding precedent, the Tribunal held that the transaction stood adequately substantiated and directed deletion of the ₹25-lakh addition.
List of Cases Discussed / Relied Upon
- ITO-12(3)(2) v. Kaalkaa Real Estates Pvt. Ltd., ITA Nos. 1233/Mum/2020 and 1234/Mum/2020, order dated 19.10.2020, Mumbai ITAT, “G” Bench;
- ITO-14(3)(4) v. Supergold Properties Pvt. Ltd., ITA Nos. 177/Mum/2020 to 180/Mum/2020, orders dated 19.10.2020, Mumbai ITAT, “G” Bench;
- Goldcity Properties Pvt. Ltd. v. Pr. CIT-14, ITA No. 2179/Mum/2019; and
- ITO-14(3)(4) v. Nextgen Construction Pvt. Ltd., ITA No. 3593/Mum/2019.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
