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2024 (5) TMI 1068 - ITAT JODHPURAddition u/s 68 - bogus Share Application Money received from various paper companies - specific information was received from the Investigation Wing - CIT(A) deleted addition - HELD THAT:- CIT(A) on a very detailed examination was satisfied about identity, creditworthiness and genuineness of the investor companies and held that the assessee had discharged the primary onus to prove their identity, creditworthiness, and genuineness. We, therefore, concur with the finding of the CIT(A) that the AO has made an addition under section 68 of the Act without any basis. CIT(A) has analyzed the transaction with each share holder and assigned reasons as to why the share capital have to be treated as genuine and has rightly deleted the addition. There is no reason to interfere in this finding of fact particularly since nothing has been shown by the department to conclude that the finding of fact was perverse in any manner whatsoever. We hold that the impugned order it did not suffer from any legal infirmity or perversity to the facts on record. We hold that the CIT(A) has been legally justified in deleting the addition made by the AO u/s 68 - Accordingly, the decision of the CIT(A) on the first issue of deleting addition of share capital is sustained. Thus, the 1st ground of appeal of the department is rejected. Commission expenses paid for bogus share application money - The share application money received by the assessee is genuine. Therefore, payment of brokerage/commission does not arise. Hence, the disallowance made by the AO, on account of payment of brokerage/commission is uncalled for and needs to be deleted. Validity of reassessment proceedings - CIT(A) did not adjudicate this ground by holding that since the addition made by the AO have already been deleted, this ground has become academic in nature - HELD THAT:- Hon’ble Madras High Court in case of CIT Vs. India Cements Ltd. [2019 (8) TMI 1485 - MADRAS HIGH COURT] has held that issue of validity of reassessment raised by assessee before CIT(A), taken note of by CIT(A) and not decided by him in view of decision on merits should be taken to have been decided against the assessee. Though assessee did not file an appeal against the order of CIT(A) could support the order on that issue in appeal filed by the department in light of Rule 27 of ITAT Rules and thus Tribunal was right in permitting the assessee to argue on the issue relating to the validity of reassessment proceedings.
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