Case Law Details
Prerna Developers Vs ITO (ITAT Ahmedabad)
In the remand report it has been stated by the assessing officer that summons were issued to 14 persons under section 131 of the Act and out of 14 persons 13 persons responded and that the recording their statement/s under section 131 of the Act was concluded. The assessing officer has further stated that one of the persons Sh. Sanjay Patel could not attend the office as he was abroad. It has been further stated in the remand report that the creditworthiness and the genuineness of the transactions were examined on oath and it is verified from the statement/s recorded that all the 13 persons have made their bookings and that they have invested with the assessee for booking of the property. It has also been stated by the assessing officer that out of the 13 persons, 9 persons have stated that they have cancelled their bookings and have received back their booking amounts and have also submitted their confirmations in this regard. The remand report further states that the remaining 3 persons have stated that the cancellation amounts were converted into unsecured loans and interest was received by them on the said amounts. It has also been mentioned in the remand report that in the case of one Smt Smitaben Mahendra Kumar Patel she was allotted shop No. 3 against her booking. Thus a perusal of the remand report submitted by the assessing officer in this regard clinches the issue in favour of the assessee in as much as out of the 14 persons, 13 persons have duly accepted and confirmed the transactions. The assessing officer has also examined their creditworthiness and has not drawn any negative inference in this regard. Only one out of the 14 persons, one Sh. Sanjay Patel was not available for recording of the statement under oath as he was abroad. It is seen that Sh. Sanjay Patel has only advanced an amount of Rs. 51,000/- and looking into the facts and totality of the circumstances that other 13 persons out of the 14 persons have confirmed the transactions of the assessee, the amount of Rs. 51,000/- loses significance. Accordingly, in view of the remand report of the assessing officer, we are of the considered opinion that the impugned addition does not have any foundation to survive. Accordingly we set aside the order of the Ld. Commissioner of Income Tax (Appeals) and direct the assessing officer to delete impugned addition.
FULL TEXT OF THE ITAT JUDGEMENT
Both the appeals have been preferred by the assessee. ITA No. 820/AHD/2015 is the assessee’s appeal against the order dated 19/01/2015 passed by the Ld. Commissioner of Income Tax (Appeals), Gandhinagar, wherein the issue in dispute is the quantum addition of Rs. 52,14,000/-. ITA No. 2347/AHD/2016 is against that order of the Ld. Commissioner of Income Tax (Appeals), Gandhinagar wherein the Ld. first appellate authority has upheld the imposition of penalty imposed under section 271 (1) (c) of the Income Tax Act, 1961 (hereinafter called ‘the Act’). Both the appeals pertain to assessment year 2006 – 07. Both the appeals were heard together and are being disposed of through this common order for the sake of convenience.
2.0 The brief facts of the case are that the assessee is a partnership firm engaged in the business as builders and developers. The return of income was filed declaring a gross total loss of Rs. 9,33,845/-. The return was initially processed section 143 (1) of the Act and case was later selected for scrutiny. The assessment was completed at an income of Rs. 49,33,155/- after making addition of Rs. 6,53,000/- to the partners’ capital account and Rs. 52,14,000/- being booking advance deposits remaining unconfirmed.
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