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2019 (3) TMI 688 - AT - Income TaxAddition u/s 68 - Share capital and premium money received from investor company as not genuinely doing any business but is providing the accommodation entries of share premium in garb of genuine business activity - receipt of accommodation entries - HELD THAT:- Assessee has submitted all the necessary details in support of the share applicant and share premium receipt. The A.O. has not pointed out any defect in the documents. As a matter of fact, the A.O. has not even issued a notice u/s. 133(6) of the Act to the share applicant, if he had any doubt about the identity, genuineness and creditworthiness of the share applicant. In fact, the share applicant is the sister concerned of the assessee, from whom similar share application with premium were received in the earlier year. The identical addition in that year by the A.O. was deleted by the CIT(A) and confirmed by the ITAT. It is not the case that the Hon'ble Jurisdictional High Court has reversed the said ITAT decision. The facts in the present Assessment Year are identical as in the earlier year. Assessment of the share applicant has also been completed u/s. 143(3) of the Act and no adverse comment has been made by the A.O. in that case. The balance sheet of the share applicant shows ample source of funds. Hence, the A.O.’s negative observation about share applicant’s availability of funds is factually incorrect. The funds obtained by the share applicant appearing in its balance sheet cannot be disregarded. No adverse observation is noted in the assessment order of the said share applicant. Hence, the veracity of share applicant’s fund position remains undoubted by the A.O. of the said concern itself. It is not the case that the A.O. had wanted some information from the share applicant and which the assessee or the share applicant failed to provide. - decided in favour of assessee Disallowance u/s 14A r.w.r. 8D - sufficiency of non interest bearing own funds - Held that:- Submissions of the assessee with regard to the availability of the non interest bearing own funds being more than investments made are found to be correct. Hence, no disallowance is justified with regard to disallowance u/s. 8D(2)(ii). As regards the disallowance u/s. 8D(2)(iii) is concerned, the A.O. has computed the disallowance of ₹ 87,649/-. The ld. CIT(A) has sustained a disallowance of ₹ 50,380/- out of exempt income of ₹ 2,51,899/-. When this is considered under the context of the fact that majority of the shares are held as stock-in-trade and the fact that not all the investments have yielded exempt income during the year, the sustenance of the addition by the ld. CIT(A) meets the ends of justice - Decided against revenue
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