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2022 (9) TMI 458 - AT - Income TaxReopening of assessment u/s 147 - Reassessment on basis of the survey operation u/s 133A - assessee has introduced share capital on fictitious names and in the names of companies and entities who were not having financial capabilities over such investment - whole cases evolving on the statement made by Shri Rupang Shah before the Investigation Wing of the Department - HELD THAT:- In the said statement, Shri Rupang Shah had admitted the business of share investment and trading. The statement indicates that Shri Mahendra Shah one of the Director in the company had made cash payment who introduced unaccounted income in the garb of share capital and share premium in M/s. Goldfinch Jewellery Ltd. But the statement of Shri Rupang Shah was never supplied to the assessee, for which, assessee wrote a letter to AO on 16.12.2011 requesting him to supply a copy of Investigation Wing . He also stated that unless and until some cogent evidences in support of contention is made available to the assessee to its reserve its right of cross examination of Shri Rupang Shah. AO passed the said assessment order on 22.12.2011 and investments have been made through banking channel and addresses were supplied to the AO. But, learned AO did not inquire from the return of income of the person whom shares were transferred. It is pertinent to note that copy of PAN Card was supplied to the AO alongwith computation of income. Bank statements from where investment had been made but learned AO did not examine abovesaid documents rather learned AO made addition solely on the basis of the Investigation Wing Report. AO has made addition on the basis of the borrowed satisfaction. He has not applied his mind and in our opinion, he ought to have done independent home work but in the present case no such exercise was done by the learned AO for the reason best known to him. Therefore, in our considered opinion, in such case, addition cannot be made. Appeal of assessee allowed. Depreciation claimed on two wheeler vehicles and motor car - Real owner - AO had not granted the depreciation in the name of the Directors of assessee company for the reason that no proof for evidences have been submitted to substantiate claim that the two wheeler vehicles and car under question was actually used for the business purpose of the company - HELD THAT:- As decided in own case[2019 (3) TMI 891 - ITAT AHMEDABAD] beneficial ownership vest with the assessee. It is because the payment was made for the purchase of the assets by the assessee though the assets were registered in the name of the directors of the company. Since this fact has not been doubted by any of the authorities below, therefore, we can safely presume that the assessee is the beneficial owner of the assets - authorities below have made the addition on account of depreciation without the application of mind. - Decided in favour of assessee. Disallowance @ 25% of labour charges claimed by the assessee - HELD THAT:- As decided in own case [2019 (3) TMI 891 - ITAT AHMEDABAD] payment was made by the assessee periodically after the deduction of TDS. Thus, the assessee cannot be penalized if the laborers have raised the bills at the end of the accounting year - assessee has shown huge turnover from the sale of jewelry amounting to Rs 98.89 crores and against such sale the assessee has claimed Labour expenses which is constituting less than 1% of the turnover. As such the genuineness of the Labour expenses cannot be doubted considering the huge turnover of the assessee - Decided in favour of assessee. Addition u/s 68 - amounts received as share Capital & Share Premium - HELD THAT:- It is pertinent to mention here that as per Ministry of Corporate Affairs Website still shares are held in the name of respective companies to whom shares were allotted. As learned AO provided merely three days’ time to produce the investor companies’ Directors same is like justice hurried, justice buried and learned CIT(A) did not admit additional evidences and to our mind assessee company has discharged its onus by providing share application form, Bank details, PAN Numbers, return of income and audited balance sheet and other relevant details but lower authorities failed to appreciate evidences submitted by the assessee. In view of the aforesaid observation and after going through the aforesaid judgments, therefore, in such case, the addition cannot be made in the hands of the assessee company. Thus, we delete the addition made by lower authorities and allow this ground of appeal.
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