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2017 (11) TMI 1148 - AT - Income TaxAddition towards share capital u/s 68 - addition solely on the basis of communication received from Mauritius Revenue Authorities which suggest that the Mauritius company did not have funds to make investment in assessee company - difference in two communications received from Mauritius Revenue Authorities which has not been properly explained by the assessee with necessary evidences - Held that:- The second communication received from the Mauritius Revenue Authorities contains full details sought by the AO including the name, address and citizenship of directors, copy of share certificate issued by the assessee company, income-tax return filed by Mauritius company with Mauritius Revenue Authorities, bank statements of M/s Strand Developers Mauritius Ltd, the business customer information cum account opening form of HSBC Mauritius Ltd and financial statement of M/s Strand Developers Mauritius Ltd. The AO also not disputed the fact that the reasons for difference in two communications sent by the Mauritius Revenue Authorities has been clarified by the Director General of Mauritius Revenue Authorities in their communication dated 21-12-2011 which has been extracted by the CIT(A) in his order at para 3.4.1. The other documents sent by the Mauritius Revenue Authorities has also been listed by the CIT(A) in the same paragraph. By these documents, a clarification has been received from the Director General of Mauritius Revenue Authorities which was forwarded by the Under Secretary, FT & TR-II, CBDT directly to the AO. Therefore, we are of the view that there is no merit in the arguments of the Ld.DR that the CIT(A) has not considered the necessity of further enquiry with regard to the genuineness of transactions and creditworthiness of the parties. We further are of the opinion that once communication received from the designated authority through FT & TR which is the authorized agency for exchanging information between two countries u/s 90 of the Income-tax Act, 1961 and such information has been received through proper channel, then there is no scope for the AO as well as the CIT(A) to conduct further enquiries with regard to the creditworthiness of the parties. All details like share certificate issued by the assessee company and bank statement of M/s Strand Developers Mauritius Ltd clearly establishes receipt of money by the assessee company. The assessee also furnished copies of FCGPR and other compliances with respect to RBI and Foreign Inward Remitance Certificate which clearly proves the identity, genuineness of transactions of investment received from M/s Strand Developers Mauritius Ltd. The subsequent communication received from Mauritius Revenue Authorities alongwith the income-tax return further prove the fact of creditworthiness of the share and capacity to invest in assessee company. Therefore, we are of the considered view that the AO was incorrect in holding that the assessee has failed to discharge the genuineness of transactions and creditworthiness of the parties. - Decided in favour of assessee Disallowance of proportionate administrative and other sales and marketing expenses attributable to Income from house property - AO has disallowed expenses relatable to income under the head ‘ Income from house property’ on the ground that the assessee has claimed separate deductions as provided u/s 24(a) & 24(b) in the computation of income under the head 'Income from house property’ whereas failed to disallow corresponding expenditure debited in the P&L Account while computing income under the head ‘Income from business’ - assessment year 2008-09 - Held that:- We find force in the arguments of the Ld.Counsel for the assessee that the AO while calculating disallowance of expenditure relatable to income from house property has allowed deductions towards property maintenance expenses already disallowed by the assessee in its computation and failed to deduct rates and taxes, professional fees and donations without any reason. We further observe that the assessee has already disallowed on its own expenses directly relatable to the activity of income from house property. The other expenses debited in the P&L Account are purely in the nature of corporate / routine expenses allowable u/s 37. The AO has not given any reasons for not considering the expenses already disallowed by the assessee in its computation and also corporate and other routine expenses, which are allowable u/s 37. Therefore, we are of the considered view that the issue needs to be examined by the AO . For 2009-10 admittedly, the assessee has filed revised return during the course of assessment proceedings to make a claim of deduction towards property maintenance expenses against business income which has not been taken cognizance on account of limitation. Therefore, we are of the considered view that considering the facts and circumstances of the case and also relying upon the decision of Hon’ble Supreme Court in the case of Goetze (India) Ltd [2006 (3) TMI 75 - SUPREME Court] and CIT vs Prithvi Brokers & Shareholders Pvt Ltd (2012 (7) TMI 158 - BOMBAY HIGH COURT), the claim of the assessee with regard to the deduction towards property maintenance expenses against business income needs to be considered in the lights of the facts without going into the technicality of the issue of limitation of filing revised return. Therefore, we set aside the issue to the file of the AO and direct him to consider the issue afresh after affording reasonable opportunity of hearing to the assessee.
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