Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (9) TMI 490 - ITAT DELHI

2015 (9) TMI 490 - ITAT DELHI - TMI - Addition on unexplained share capital under section 68 - CIT(A) deleted addition - Held that:- CIT(A) was not justified in deleting the addition made by the AO particularly when the assessee failed to produce the concerned parties. At the same time, it also appears that the AO without considering the documents furnished by the assessee in the form of share applications, copy of bank account from where money was paid, copy of acknowledgment of Income Tax Retu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it appropriate to remand this issue back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunities of being heard to the assessee. - Decided in favour of revenue for statistical purposes.

Disallowance of salary - CIT(A) deleted addition - Held that:- AO while making the disallowance @ 50% had not given any basis or cogent reasons. The ld. CIT(A) also accepted the contention of the assessee by simply stating that a business .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecided in favour of revenue for statistical purposes. - ITA No. 5148/Del/2012 - Dated:- 3-7-2015 - D. Manmohan, VP And N. K. Saini, AM, JJ. For the Appellant : Shri Umesh Thaakur, CA For the Respondent : Shri J S Minhas, ACIT DR ORDER Per N. K. Saini, AM This is an appeal by the department against the order dated 31.07.2012 of ld. CIT(A)-XXXI, New Delhi. 2. Following grounds have been raised in this appeal: "1. The order of Ld. CIT(A) is not correct in law and facts. 2. On the facts and in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

case, Ld. CIT(A) has erred in deleting the addition of ₹ 3,12,000/- made by the assessing officer on account of disallowance of 50% out of salary expenses on adhoc basis. 4. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 3. Vide ground no. 2 grievance of the department relates to the deletion of addition of ₹ 44,00,000/- made by the AO on account of unexplained share capital. The facts related to this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of share application money & share premium, to produce those persons for examination of genuineness of transactions, to examine the identity of the persons and their creditworthiness. The AO observed that no one was produced and no documentary evidence had been filed showing the source of funds contributed by the applicants of the share application money and share premium paid by them except for the assessment details of the companies contributing to the share capital and premium. The AO ma .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he matter to the ld. CIT(A) and submitted that the assessee had furnished following documents to prove the existence of the parties and genuineness of the transactions: (i) Name and address (ii) Share application Form (iii) Permanent Account Number (iv) Detail of Bank Account from where money is paid along with copy of bank statement (v) Copy of Acknowledgement of Income Tax Return (vi) Confirmation from the subscribers (vii) Copy of Balance Sheets of Companies 5. It was further submitted that t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

submitted by the assessee. It was stated that all the three investors are private limited company registered with Registrar of company, so, it was quite easy to prove identity of those as the details were available on the website of the Registrar of companies and could be viewed by public at large. So, there could not have been any doubt about the identity and existence of the applicants. It was further submitted that the copy of bank account, balance sheet and Income Tax Returns were furnished .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e assessee requested all the subscribers to make themselves available for confirmation of the transaction. However, instead of personally appearing they had choosen to respond via letter posted directly to the AO and if it was necessary then the AO should have issued notice u/s 131 of the Act but he had never issued the notice u/s 131 of the Act and made the addition of ₹ 44,00,000/-. It was further submitted that the addition cannot be made with regard to the share capital money in the ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd Tyagi Pvt. Ltd. 276 ITR 433 (Delhi HC) - CIT Vs Illac Investment Pvt. Ltd. 287 ITR 135 (Delhi) - Barkha Synthethics 286 ITR 377 (Raj.) - Avantika Investment 262 ITR 493 (Delhi) - CIT Vs Suntech Vision Ltd. (Delhi HC) ITA No. 463/2010 7. As regards to the disallowance out of the salary expenses, it was submitted that all the relevant details as required by the AO were submitted during the course of assessment proceedings which were accepted by the AO and it was not the case of the AO that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee independently through the account payee cheque and nothing was apparent from the assessment order that any adverse material existed in the assessment folder for the relevant period. He further observed that it was not the case where any person claimed before the department that the impugned share capital was nothing but bogus introduction by way of accommodation entries. The ld. CIT(A) categorically stated that all the three investors had sent their letters to the AO along with their confir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

u/s 68 of the Act. The ld. CIT(A) deleted the addition of ₹ 44,00,000/-. The reliance was placed on the judgment of the Hon'ble Supreme Court in the case of CIT Vs Lovely Exports Pvt. Ltd. reported at 216 CTR 195. 9. As regards to the another addition of ₹ 3,12,000/-, the ld. CIT(A) observed that the action of the AO was based only on suspicion and it was not the case of the AO that the employees were not actually employed or not paid the salary. He further observed that when a b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der of the AO and further submitted that the assessee did not produce the persons although the AO specifically asked to do so. He further submitted that when the inquiries were made through inspector of the department the concerned parties were not traceable. He also drew our attention towards page no. 28 of the assessee's paper book, which is the copy of confirmation furnished by M/s Chandra Buildcon Pvt. Ltd. and stated that in the said confirmation it has been mentioned that Surbhi Chandr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on. As regards to the disallowance out of salary, the ld. DR reiterated the observations made by the AO. 11. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that all the requisite documents and information asked by the AO to prove the identity and creditworthiness of the investors, genuineness of transaction, were furnished before the AO. Therefore, the addition made by the AO was not justified. It was f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee reiterated the submissions made before the authorities below and strongly supported the impugned order. 12. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the assessee received a sum of ₹ 44,00,000/- from three parties on account of share premium amounting to ₹ 41,80,000/- and the share application money amounting to ₹ 2,20,000/- on 22000 shares. The AO f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version