Case Law Details
KVR Infra Vs ACIT (ITAT Mumbai)
Introduction: The case of KVR Infra vs. ACIT (ITAT Mumbai) revolves around the deletion of an addition made under Section 69B of the Income Tax Act concerning the inflated cost of a crane in an agreement. The agreement’s exaggeration was primarily aimed at securing a higher banking loan facility for financing the crane. In this article, we provide a detailed analysis of the case’s background, arguments, and the ITAT’s decision.
Detailed Analysis
1. Background of the Case KVR Infra, a partnership firm engaged in crane hiring, purchased a crane (Manitowoc 3900) during the relevant assessment year (2011-12). The agreement for the crane’s purchase, dated 31.03.2011, mentioned a cost of Rs. 1,40,62,500/-, while the firm’s books of accounts reflected a cost of Rs. 90,37,625/-. The Assessing Officer (AO) questioned the difference of Rs. 50,24,875/-, leading to an addition under Section 69B of the Income Tax Act.
2. Explanation by the Assessee The assessee explained that the actual cost of the crane, as per its books, was Rs. 90,37,625/-. However, the inflated cost in the agreement was a deliberate act to secure additional banking loan facilities. The AO rejected this explanation, resulting in the addition.
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