TMI Blog2017 (2) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses of ₹ 53.21 crores and he has objected only to interest on loan of ₹ 39,75,165/- stating that it is an inadmissible amount under section 40(a)(ia) of the Act and the Ld. CIT(A) has restricted the disallowance to this amount. Thus, we do not find any infirmity in the order passed by the Ld. CIT(A) in restricting the disallowance to ₹ 39,75,165/- and deleting the balance disallowance.- Decided against revenue - ITA No. 6395/M/2013 - - - Dated:- 30-11-2016 - SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER For The Assessee : None For The Revenue : Shri M. Dayasagar, D.R. ORDER Per C.N. Prasad, Judicial Member: This appeal is filed by the Revenue against the order of the Commissioner of Income Tax-8, Mumbai (hereinafter referred to as the CIT) dated 26.08.2013 for the assessment year 2009-10. 2. The Revenue has raised the following grounds: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in accepting additional evidence without recording the reasons as per Rule 46A(2). 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred accepting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly TEMPPL which was taken over by the assessee and the correspondence filed by the assessee are insufficient to prove that the transaction is genuine. In the course of assessment proceedings the assessee submitted that assessee company took over Trauma Emergency Medical Products Pvt. Ltd. (for short TEMPPL) along with their assets and liabilities by allotting 5 shares each of ₹ 10/- on a premium of ₹ 10/- for each debenture of ₹ 100/- held by TEMPPL. The assessee also submitted copies of letters issued by Pune and Ahmedabad Stock Exchange listing the said equity shares in support of the increase in share capital/share premium. However, the Assessing Officer made addition treating such increase in share capital as unexplained cash credit observing that assessee has not furnished copy of any agreement for acquisition of the said company and the terms and conditions as per which the assessee company took over is not known. Therefore the Assessing Officer concluded that the assessee has not discharged his onus to establish that the transaction is genuine, the genuineness of the creditors and creditworthiness of the creditors have not been proved. 7. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Emergency Medical Products Pvt. Ltd. As per the agreement, the assessee had issued 1,46,97,000 shares at ₹ 20/- charging premium of ₹ 10/- to 12 parties in lieu of fully convertible debentures of ₹ 100/- each, for a value of ₹ 29,39,40,000/-. The balance sheet of M/s. Trauma Emergency Medical Products Pvt. Ltd. for F. Y. 2007-08 2008-09 is filed. The confirmations of 6 parties to whom shares more than 10 lacs have been issued by the assessee is also filed alongwith PAN. The letter of Pune and Ahmedabad Stock Exchange regarding acknowledgement of 1,46,97,000 new shares allotted was filed at the time assessment. The quoting of share price on BSE in between 1.1.2009 to 19.3.2009 is also filed. The assessee is a public ltd. co. listed on Stock Exchange. Hence books of accounts are not called for. As per the submission, the share capital is increased as per agreement dated 26.09.2008 between assessee and M/s. Trauma Emergency Medical Products Pvt. Ltd. 2.3 A copy of the comments was forwarded to the appellant for further comments on his part. The appellant vide letter dated 18.03.2013 has submitted comments on Remand Report submitted by the AO. The c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given complete details of direct expenses and were given only the names of the parties to whom payments were made on various dates. He observed that the assessee has not given the complete details of its different heads of expenses and the nature of direct expenses incurred, not furnished bills, vouchers. Therefore the onus of providing details called for were not discharged by the assessee and therefore the expenses cannot be verified and therefore on an adhoc basis the Assessing Officer disallowed 20% of such expenses. 10. The assessee preferred an appeal before the Ld. CIT(A) and the Ld. CIT(A) after calling for remand report restricted the disallowance to ₹ 39,75,165/- observing as under: 3.2 During the course of appellate proceedings, the AR of the appellant submitted detailed submissions and evidences etc. in support of its claim of direct expenses. The details/submissions of the appellant were forwarded to the AO for his comments vide this office letter dated 13.12.2012. The AO after verifying the submissions and details filed by the appellant submitted his comments vide letter dated 15.02.2013. The comments of the AO on this issue are reproduced as under: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills, The AO has neither denied anything nor has put any adverse remark on the issue in his remand report except the claim of interest expenses of ₹ 39,75,165/- paid to 37 parties without deducting tax at source. As a result, he has stated that the interest of ₹ 39,75,165/- claimed as direct expenses is not allowable ti/s. 40('a)(ia). But as regards deduction of TDS on interest expenses claimed by the assessee company, we have to state that the TDS was deducted and paid by the assessee, but the details thereof is not available at present with the company. It is also evident from the Auditor's report that there was no non-compliance as regards deduction of Tax at source, which is also acknowledged by the Ld. AO in the Remand report. 3.4 I have considered the Remand report submitted by the AO and the comments of the appellant carefully. It is seen that the AO was satisfied with the claim of expenses. However, the AO observed that interest expenses of ₹ 39,75,165/- claimed as direct expenses is not allowable u/s.40(a)(ia). During the course of appellate proceedings, the AR of the appellant had no objection in confirming the addition to the extent of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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