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2016 (8) TMI 1484 - AT - Income TaxAddition u/s 68 - assessee failure to discharge its onus to establish identity, genuineness and creditworthiness of companies - HELD THAT:- After receiving report from the Investigation Wing, Kolkata dated 18.03.2013, Assessing Officer has drawn his own conclusion which was not based on any facts and figures as Assessing Officer has not mentioned anything in the order on what basis the conclusion was arrived on and what were the facts and materials available with him. Therefore, the addition made by him u/s.68 of the Act on account of share application money received without considering the various facts brought to the knowledge of Assessing Officer, which is not justified. Assessee has already proved the identity of the share applicant by furnishing their PAN, copy of IT return filed for asst. year 2010-11.Regarding the genuineness of the transaction, assessee has already filed the copy of the bank account of these three share applicants from which the share application money was paid and the copy of account of the assessee in which the said amount was deposited, which was received by RTGS. Regarding credit-worthiness of the party, it has been proved from the bank account of these three companies that they had the funds to make payment for share application money and copy of resolution passed in the meeting of their Board of Directors. Regarding source of the source, Assessing Officer has already made enquiries through the DDI (Investigation), Kolkata and collected all the materials required which proved the source of the source, though as per settled legal position on this issue, assessee need not to prove the source of the source. Assessing Officer has not brought any cogent material or evidence on record to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represent company’s own income from undisclosed sources. Accordingly, no addition can be made u/s.68 of the Act. In view of above reasoned factual finding of CIT(A) needs no interference from our side - Decided in favour of assessee. Disallowance of 80% of the expenses claimed as interest repayment by treating same as pre-operative expenses of capital nature - HELD THAT:- These expenses were neither of personal nature, nor of capital nature or of pre-operative nature. These were all of revenue nature which were incurred for the purpose of carrying on the business and therefore, same are obviously allowable as revenue expenses during the year. Assessing Officer has neither given any finding as to why any part of these expenses were to be disallowed, nor he has issued any show cause notice why he intends to disallow part of these expenses. In view of above, CIT(A) was justified in granting relief to the assessee as discussed above. We are not inclined to interfere with the finding of CIT(A) on this issue. Same is upheld. Addition u/s 14A r.w.Rule 8D - HELD THAT:- As decided in M/s. Daga Global Chemicals Pvt. Ltd [ 2015 (1) TMI 1204 - ITAT MUMBAI] any disallowance can be made that can be restricted to the exempt income claimed by assessee, so, disallowance u/s.14A r.w. Rule 8D is restricted to that extent. Assessing Officer is directed accordingly.
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