Emirates Hindustan Builders & Developers Vs ACIT (ITAT Bangalore)
Partner Confession Can’t Seal the Case- Sworn Statement Alone Not Enough – Admissions Need Corroboration – ITAT Bangalore Remands Builders’ Cash Credit Additions
These batch appeals arose from search & seizure assessments framed u/s 153C/143(3) against Emirates Hindustan Builders & Developers, Tabesco Hindustan Infra Developers Pvt. Ltd., and MKH Infrastructure, all Kasargod-based developers. The disputes centered on additions made u/s 68 for unexplained cash contributions and unsecured loans, primarily based on sworn statements of partners recorded during search.
Emirates Hindustan Builders (ITA 414 & 415/Bang/2024, AYs 2017-18 & 2018-19)
A Joint Development Agreement dated 19.04.2017 revealed refundable security deposit of ₹2.50 crore paid to landowners, including ₹1.02 crore in cash. Managing Partner Mohammed Ibrahim admitted in sworn statements u/s 132(4) that this was undisclosed income of the firm. AO treated the cash portion (₹82.25 lakh in FY 2016-17 & ₹20 lakh in FY 2017-18) as unexplained credits u/s 68, along with unsecured loans of ₹5 lakh (AY 2017-18) and ₹31.32 lakh (AY 2018-19). CIT(A) confirmed the additions.
Before Tribunal, Assessee argued that the cash came from partners whose confirmations were filed, and that statement of a partner cannot be conclusive without corroboration. Reliance was placed on Lovely Exports (SC). The Department relied on Roshanlal Sanchiti (SC) & other precedents to justify reliance on un-retracted admissions.
