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2018 (5) TMI 1261 - AT - Income TaxDisallowance of estimated expenditure - Held that:- The revenue’s case is not with regard to genuineness of expenditure. Business requirements and planning for future has to be decided by the assessee but not by the Department. It is the assessee who has to run the business. The revenue has not proved that the assessee has made any bogus claim or incurred personal expenditure in the guise of marketing, godown and plant and maintenance expenses. In the absence of specific evidence to establish that the expenditure claimed by the assessee is bogus or unsubstantiated with relevant evidences we hold that the CIT(A) has rightly deleted the addition. Introduction of share capital - Unconfirmed identity of the shareholder, address and sources of income of the contributor to the share capital - Held that:- The assessee has furnished the confirmation letters explaining the identity of the shareholder, address and sources of income of the contributor to the share capital along with the evidence for land holdings and copies of IT returns in 4 cases before the AO. The assessee has discharged its burden with regard to the identity, genuineness of share capital and also explained the source of share capital. The AO did not make any enquiry to verify the correctness of the information furnished by the assessee and bring any evidence to establish that the contributors to share capital does not have sufficient source or the source explained by the share holders is bogus. The CIT(A) also observed that the shares were allotted in favour of the contributors. It is evident from the above that the revenue has not discharged it’s burden to prove that the shareholders did not have credit worthiness. - Decided in favour of assessee.
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