2011 (10) TMI 496 - ITAT INDORE

Unexplained cash credits - addition u/s 68 - assessee alleged of not explaining amount representing share capital and share premium received from Hindustan Continental Ltd. of ₹ 40,00,000/- and from Optimates Textile Industries Ltd. of ₹ 10,00,000/- Held that:- It is clear that the initial burden is upon the assessee to explain the nature and source of share application money received by the assessee. Any addition in the hands of such subscribing companies is only possible when the assessee is able to establish identity of these companies which the assessee has grossly failed not only before the AO but also before CIT (A) and the Tribunal. Merely giving the names of such share applicants is not enough especially when these applicants were found non-existent.

The addresses (4 places) given to the department of the companies given be assessee were found to be non-existent. Even the Inspector was deputed to verify the addresses who also reported that these companies were not available at the given addresses. It is not possible that the companies making huge investment in the form of share application are not found at the given addresses. There is a possibility that there may be a change of address but till the stage of the Tribunal no such address was furnished by the assessee, therefore the onus was not discharged as the assessee neither furnished the correct addresses nor the creditors were produced rather the assessee tried to stall the assessment proceedings by giving misleading facts and incorrect addresses - Decided against the assessee

Dis-allowance of telephone expenses - Held that:- No reason has been assigned for making such ad hoc disallowance by the AO and secondly that since the company is a juristic person, no disallowance of personal nature can be made in the case of a company - Decided in favor of assessee