Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 1541 - AT - Income TaxAddition invoking section 68 - accretion in share capital - as per AO foreign inward remittance certificates furnished by the assessee did not correspond to the previous year relevant to the assessment year under consideration and he held that the assessee company had failed to establish the identity or creditworthiness of the shareholder and the genuineness of the transaction of receipt of share capital - Held that:- Evidently, the appellant company had furnished Foreign Inward Remittance Certificates (FIRC) issued by the bank and it is also not disputed that contribution to the shareholder’s capital is in terms of RBI regulations. It is also clear from the copies of the documents submitted by the assessee company to the RBI in connection with receipt of share capital monies from Becrux Trade & Invest Ltd. that the nature of such receipts are of share capital. In fact the observation of the Assessing Officer that the FIRCs issued by the HDFC Bank do not pertain to the year under consideration is contrary to the fact-situation. In the Paper Book filed before us, assessee has placed copies of the three FIRCs issued by HDFC Bank, which clearly evidence that a sum of ₹ 3,25,13,110/- has been received during the previous year relevant to the assessment year under consideration. In the Paper Book assessee has also placed copies of the share certificates issued to the holding company M/s. Becrux Trade & Invest Ltd., Cyprus and also other documents filed with the Registrar of Companies in connection with the issue of share capital. In fact, assessee company has also placed on record the financial statements of holding company Becrux Trade & Invest Ltd., Cyprus at pages 46 to 81 of the Paper Book, which clearly depicts investment made in the assessee company. Thus we find no reason for the Assessing Officer to invoke the provisions of section 68 - Decided in favour of assessee Disallowance under section 40(a)(ia) - non deduction of tds - non issue of show cause notice - Held that:- The order of the CIT(A), clearly reveal that no show casue notice was issued to the assessee for disallowing a sum of ₹ 1,04,36,195/- by invoking the provisions of section 40(a)(ia) of the Act. Quite clearly, the issue relating to invoking of section 40(a)(ia) was not before the Assessing Officer at all and in this background, it was imperative for the CIT(A) to have issued an appropriate notice to the assessee . In fact the provisions of section 251(2) of the act clearly militate against the aforesaid approach of the CIT(A). Moreover, even on facts, the assessee has pointed out that the impugned amount is a part of a suo-motu disallowance made in the return of income itself. Thus the impugned addition is unwarranted and is hereby directed to be deleted. - Decided in favour of assessee
|