TMI Blog2012 (11) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence to show that the above cited Co-operative banks would not fall in the category of Scheduled Bank as defined in sec. 11(5)(iii) of the Act, more particularly the copy of Second Schedule to the Reserve Bank India Act, 1934. - matter remanded back. Share application money - held that:- here is no dispute with regard to the fact that the impugned amount of Rs.36.60 lakhs pertains to Share application money and the assessee has furnished the names and addresses of the share holders along with other details that were available with it. - Decided in favor of assessee. - ITA No.811/Ahd/2006 with C.O.No.138/AHD/2006 - - - Dated:- 19-1-2012 - SHRI G.C. GUPTA AND SHRI B.R. BASKARAN, JJ. Revenue. Mr. P.K. Srivastava, Sr. D.R. Assessee. Mr. S.N.Soparkar, Sr.Advocate. ORDER PER: SHRI B.R. BASKARAN, A.M. The appeal of the revenue and the cross objection of the assessee are directed against the order dated 24.01.2006 passed by Ld CIT (A)-XI, Ahmedabad and they relate to the assessment year 2002-03. 2. In the appeal of the revenue, following three issues are contested. (a) Deletion of Rs.69,75,846/- relating to Commission expenses. (b) Deletion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtinent to note that the AO denied the opportunity of cross examination of Shri Sandeep Mehta by stating that the said person is actually a witness of the assessee company. Before the AO, the assessee strongly stood by its books of account and accordingly categorized the statement of Shri Sandeep Mehta as blatant lies. In the appellate proceeding, the Ld CIT (A) found fault with the AO in not confronting the terms of agreement with Shri Sandeep Mehta and also in not affording opportunity of cross examination to the assessee. Since the impugned addition was made by placing reliance on the statement of Shri Sandeep Mehta only, the CIT (A) did not find merit in the impugned addition and accordingly deleted the same. Aggrieved, the revenue is in appeal before us. 6. The Ld D.R strongly supported the order of the A.O and stated that the assessing officer has taken pains to investigate into the issue and has found out that the commission expenses accounted by the assessee are in excess. On the contrary, the Ld A.R contended that the impugned addition could not be made as the assessee was denied opportunity of cross examination. In this regard, he relied upon the decision dated 13.4.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling in that case. Accordingly, in our view, the assessee could not take support of the said decision in the regular assessment proceeding. 9. Turning to the facts of the instant case, the contention of the assessee is that statement made by Shri Sandeep Mehta is totally against the facts and evidences available with it. Further, it was pointed out that the AO has failed to confront the Agreement entered by it with Shri Sandeep Mehta, which is the sole basis for incurring the impugned commission expenses. The assessee has also pointed out that the said person had stated in his statement that he provided service to the assessee only up to May, 2001. However, we notice that the assessee has produced certain vouchers to prove that the said Shri Sandeep Mehta was providing services to the assessee beyond that date also, which fact was not properly appreciated by the A.O. Further, the AO has also failed to appreciate the contention of the assessee that the impugned commission payments consisted of two components viz., the commission paid to Shri Sandeep Mehta and the reimbursement of expenses. In our view, the AO was more influenced by the statement given by Shri Sandeep Mehta. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act shall not apply to the said interest claim. Accepting the contentions of the assessee, the Ld CIT (A) deleted the impugned addition. Aggrieved, the revenue is in appeal before us. 12. Before us, the assessee did not file any evidence to show that the above cited Co-operative banks would not fall in the category of Scheduled Bank as defined in sec. 11(5)(iii) of the Act, more particularly the copy of Second Schedule to the Reserve Bank India Act, 1934. The Ld D.R also submitted that the said claim of the assessee needs verification. We also notice that the claim of payment of interest payable to the Andhra Bank before the due date of filing the return of income has been accepted by the Ld CIT (A) without confronting the same with the AO. The Ld A.R submitted that he could furnish the copy of Second Schedule to the Reserve Bank of India Act existed at the relevant point of time. Even if the relevant schedule is submitted before us, the same is required to be examined at the end of the AO. Accordingly, we set aside the order of Ld CIT (A) on this issue and restore the same to the file of the AO with a direction to verify the claim of the assessee in this regard and take appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/Ahd/2008, wherein the tribunal has taken the decision in favour of the assessee under identical facts by duly considering the decisions rendered by various courts and Tribunal, including the order of Hon ble Supreme Court in the case of Lovely Exports (P) Ltd. 15. We have heard the rival contentions on this issue. There is no dispute with regard to the fact that the impugned amount of Rs.36.60 lakhs pertains to Share application money and the assessee has furnished the names and addresses of the share holders along with other details that were available with it. Hence the decision rendered in the case of Belgium Glass Ceramics (P) Ltd by duly considering the various decisions including the decision of Hon ble Delhi High Court in the case of M/s Divine Leasing finance ltd (299 ITR 268) and the order of Hon ble Apex Court in the case of M/s Lovely Exports (P) Ltd squarely covers the issue under consideration. Accordingly, we do not find any infirmity in the decision of Ld CIT (A) on this issue. 16. The Ld A.R did not press the Cross objection filed by the assessee and hence the grounds raised in the Cross objection are dismissed as not pressed. 17. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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