GRR Holdings Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad held that addition under section 68 of the Income Tax Act as unexplained credit towards capital contribution or amount received from partners not sustainable since identity of partners and genuineness of transaction was established. Accordingly, appeal of the assessee allowed.
Facts- M/s. GRR Holdings is a firm was incorporated on 31.01.2014 with two partners Shri Gaddam Shyam Prasad Reddy & Shri Syed Fayaz Mohammed. The main objective of the partnership firm is to carry on real estate business.
Post search operation, AO, considering consideration paid for purchase of property by cheque and cash and stamp duty paid for registration of the documents, has made addition of Rs.42.00 lakhs u/s 69 of the Act as unexplained investment for the A.Y 2014-15. AO had also made addition of Rs.27,42,21,320/- for the A.Y 2015-16 u/s 69 of the I.T. Act, 1961 as unexplained investment towards cash consideration paid for purchase of property amounting to Rs.25,17,00,000 and total stamp duty and other charges paid for Rs.2,25,21,320/- on the ground that the assessee has paid an amount of Rs.20.17 crores in cash to the vendors of the property in the financial year relevant to A.Y 201516. Similarly, AO has made addition of Rs.15,41,85,625/- for the A.Y 2017-18 towards sale consideration paid in cash and total stamp duty and other charges paid for purchase of the property.
