TMI Blog2017 (10) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... d fact that assessee is evidently in the real estate business and also in jewellery business and as such the assessee is eligible for deduction of all the business expenses and the depreciation etc. and accordingly, Ld. CIT(A) has rightly deleted all the additions/disallowances made by the AO, which does not need any interference on our part, hence, we uphold the same and reject the ground no. 2 raised by the Revenue. Unexplained cash credit u/s. 68 - Held that:- We note that in this case the share capital money has been received through the banking channel and all the details and confirmations of the parties were submitted before the AO but the AO has selectively made the addition of ₹ 30,00,000/- in the case of two share holders only without any valid reasons, which is not permissible under the law. We further note that no material evidence has been collected against the assessee for making the selective addition of the two shareholders of the share capital of ₹ 30,00,000/-only out of total share capital of ₹ 68,30,000/- and accordingly the addition made by the AO was rightly deleted by the Ld. CIT(A), which does not need any interference on our part, hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 21,70,000/- and share premium of ₹ 46,60,000/-. The assessee had collected the share capital with premium of ₹ 90/- per share on the face value of ₹ 10/- from 07 shareholders out of which the AO has made the addition of ₹ 30,00,000/- under the head unexplained cash credit from the share capital of New Creation Fuels Pvt. Ltd. of ₹ 20,00,000/- and Aryan Infra Equipment Pvt. Ltd. of ₹ 10,000/- mainly on the ground of unsatisfactory source of the money. Accordingly, the AO assessed the income of the assessee at ₹ 64,42,302/- vide his assessment order dated 30.3.2013 passed u/s. 143(3) of the Act. Against the said assessment order, assessee appealed before the Ld. CIT(A), New Delhi, who vide his impugned order dated 04.9.2014 has allowed the appeal of the assessee. Aggrieved with the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 3. Ld. DR relied upon the Order of the AO and reiterated the contentions raised in the grounds of appeal. In support of his contention, he filed the written submissions, which read as under:- Sub: Written Submission in the above case- reg. Grounds of Appeal 1 2 : CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3: CIT(A) erred in deleting addition made by the AO u/s 68. Facts 1) Assessee company raised Share Capital of ₹ 85 lacs during the year by allotting its shares to 7 different parties. 2) All these parties were relatives and friends of the directors, accept two corporate parties:- (i) New Creation Fuels Pvt. Ltd. (ii) Aryan Infra Equipment Pvt. Ltd. 3) Premium of ₹ 90/- per share were taken from these two parties whereas no such premium was taken from other allottees. 4) These investors later transferred back the shares to an associate entity of the director of assessee company at face value. 5) In view of the above facts AO notice that above two corporate are doubtful. Thus he asked the assessee to produce the directors of the two companies. Assessee could not produce the before the AO. 6) AO issued summons u/s 131 (1) to the directors of the companies however these summons were not complied by these alleged applicants. 7) AO has noticed that bank account of the applicant companies just show routing of money, and no business activities. Total turnover of Aryan Infra Equipment P. Ltd was of ₹ 32, 725/- whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. CIT Vs N R Portfolio Pvt Ltd (29 taxmann.com 291) (Copy Enclosed) where Hon'ble Delhi High Court held that if AO doubts the documents produced by assessee, the onus shifts on assessee to further substantiate the facts or produce the share applicant in proceeding. Mere production of incorporation details, PAN Nos. or fact that third person or company had filed income tax details in case of private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts reflect and indicate proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive. 4. On the contrary, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A) and also relied upon the decision of the Hon ble Supreme Court of India in the case of Chennai Properties Investments Ltd. vs. CIT reported [2015] 56 taxmann.com 456 (SC) in support of argument relating to ground no. 1 and filed the copy of the said decision before us. 5. We have heard both the parties and perused the relevant records, especially the impugned order and the written submissions and the case law cited by both the parties. With regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 56 taxmann.com 456 (SC) wherein, it has been observed that Section 28(i), read with section 22, of the Income Tax Act, 1961 Business income chargeable as (letting out of properties) Whether where in terms of memorandum of association, main object of assessee-company was to acquire properties and earn income by letting out same, said income was to be brought to tax as business income and not as income from house property. (Heads Notes only). 5.1 Apropos ground no. 2 relating to deletion of addition/disallowance of ₹ 38,12,230/- under the head interest expenses, ₹ 4,20,000/- under the head salary and wages as business expenses, ₹ 1,56,000/- under the head Director s remuneration and ₹ 4,97,287/- under the head depreciation is concerned, we find that AO has disallowed all the business and administrative expenses mainly on the ground that the assessee is not in business but in investment. In appeal before the Ld. CIT(A), assessee has submitted that the AO is not justified to disallow all the business and administrative expenses without any valid reasons, because the assesse is in the real estate business and also in the jewellery business and as suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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