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

2016 (1) TMI 1092 - ITAT DELHI

2016 (1) TMI 1092 - ITAT DELHI - TMI - Disallowance u/s 68 - Held that:- Certain investigations have been done by the A.O. Evidences have been gathered by the A.O. in support of the addition made by him. The deletion by the Ld.CIT(A) of this addition, on the ground that these evidences were not confronted to the assessee, was not proper. When the inspection report can be put to the assessee by the Ld.CIT(A), other evidences should have also been put to the assessee by the Ld.CIT(A). The assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

AO for fresh adjudication. We issue the following directions to be followed by the A.O.

(a) The assessee should be confronted with the information and material based on which the AO made this addition and there after pass a speaking order after considering the contentions of the assessee.

(b) Similarly, in case the A.O. chooses to rely on the statement of any person, copies of the same should be furnished to the assessee and opportunity to cross examine those witnesses of R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

For the Appellant : Sh. R. S. Negi, Sr. D. R. For the Respondent : Sh. Pradeep Dinodia and Sh. RK Kapoor, C.As. ORDER Per J. Sudhakar Reddy, A. M. This is an appeal filed by the Revenue is directed against the order of the Ld.Commissioner of Income Tax (Appeals), New Delhi dated 24.06.2008 pertaining to the Assessment Year (A.Y.) 2004-05. 2. Facts in brief:- The assessee is a company and is in the business of leasing, finance and investments. It belongs to the Minda Group of Companies. For 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

is order. When asked to substantiate the genuineness of this share application money, the assessee filed certain details such as copies of confirmation from the companies, Pan details, evidence of filing of income tax returns by these companies and copies of bank statements of the share applicants. The AO at page 4 observed the following defects/deficiencies in the evidences filed. 1. Verification affidavits do not bear the date and month; 2. Signature on affidavits are not attested; 3. Stamp Ve .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(a) The premises of these companies are locked; (b) That they are operated by one Mr.Pardeep Kumar Jindal, C.A. who visits this premises once or twice in a month. Most of them are located in the same premises. The stamp vendor of affidavits made could not be traced. Notice u/s 131 of the Act was issued to Shri Jindal but he could not be traced. The AO verified the transactions of the bank accounts, while issuing notices u/s 133(6) of the Act to various banks and obtaining bank statements. At pa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

beneficiaries. It is very much clear from the above that the money received by the assessee company by way of share application money, is its own money but rooted through the bank accounts of various persons/firms/companies. 2.3. Thereafter the AO referred to the information received from DIT (Investigations), New Delhi and the statements of the alleged Directors of these companies recorded u/s 131 of the Act in the month of April, 2005 by Addl. DIT (Investigation), New Delhi, wherein they had .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) is erroneous & contrary to facts and law. 2. On the facts and in the circumstances of the case, the learned CIT(Appeals) has erred in deleting addition of ₹ 3,50,88,000/- made u/s 68 of the I.T. Act, 1961 in respect of share application money ignoring - a) that the assessee company has miserably failed to explain the amount introduced and apart from the identity, the genuineness and creditworthiness of the involved entities remained to be proved. b) the detailed findings as discussed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed to be proved. e) that the said additions were made by Assessing Officer on the basis of definite information from investigation wing that the said amounts were accommodation entries. f) that in respect of many involved entities, their key persons have admitted on oath before the investigation Wing of the Deptt. as reproduced in the assessment order that the said entities merely functioned as entry operators and not carried out any actual business. g) that the inspector also reported on local .....

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 ₹ 4,89,587/- notwithstanding - a) that due to non-furnishing of any details by assessee attributable to earning of exempt dividend income, the Assessing Officer was left with no other alternative except to work out the proportionate disallowable expenses relatable to the earning of dividend Income. b) the provisions of sections 14A, wherein it is clearly mentioned that all expenses incurred in relation to the exempt income must be disallowed. Notably, the expression used in section 14A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

able to the facts of the case of the assessee company. e) the working adopted by the Assessing Officer for computing the proportionate disallowance is also in consonance with amendments made to section 14A w.e.f. 01.04.2007. f) the ratio of the decision in the case of CIT Vs. HR Sugar Factory (P) Ltd. 187 ITR 363, where it has been held that if parts of the funds have been utilized for non business purposes, part disallowances of interest is justified. g) the ratio of the decision in the case of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

perusal of material on record, orders of lower authorities, case laws cited, we hold as follows. 6. The Ld.CIT(A) in this case has deleted the addition on the sole ground that the identity of the share applicants has been established. On the contentions of the assessee that he was not confronted with the Inspector s Report, the Ld.CIT(A) provided the report to the assessee and obtained his comments. Regarding statements and information obtained by the A.O. from the ADIT (Investigation) and which .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me. In this case the assessee had not asked for cross examination of the witnesses. Hence the ground of the Ld.CIT(A) on this issue is bad in law. 8. In our view, certain investigations have been done by the A.O. Evidences have been gathered by the A.O. in support of the addition made by him. The deletion by the Ld.CIT(A) of this addition, on the ground that these evidences were not confronted to the assessee, was not proper. When the inspection report can be put to the assessee by the Ld.CIT(A) .....

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