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TMI Blog2017 (11) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... the same day. However, no TDS was deducted by M/s Sathi Properties and M/s Sathi Associates and further no details are mentioned in copy of the bill regarding services rendered by the assessee company for which commission was paid. The Assessing Officer further noted that the assessee has made the trading of fabric only in the month of February and March, 2009. Neither any payment was received nor any payment was made against the sale or purchase. He observed that all purchases were made from M/s Stallion Textiles and similarly all sales were made to M/s Anshu Garments Pvt. Ltd.. He, therefore, was of the opinion that the assessee has not done any business in the present year and the commission income shown by the assessee is the assessee's own money which is being introduced through this route. According to the Assessing Officer, the expenses claimed by the assessee during the year are not allowable as the assessee company has not done any work during the year. He, therefore, disallowed the expenses claimed under the head Administrative & selling expenses amounting to Rs. 9,62,282/- and depreciation amounting to Rs. 2,43,139/- and accordingly made addition of Rs. 12,05,421/- to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the assessee. Further, according to the Assessing Officer, the assessee company has made the trading of fabric only in the month of February and March, 2009 and neither any payment was received nor any payment was made against the sale or purchase. According to the Assessing Officer, the assessee has introduced its own money through this route and, therefore, the expenses not being genuinely incurred for the purposes of business should be disallowed. We find in appeal ld. CIT(A) upheld the action of the Assessing Officer in disallowing the administrative expenses and depreciation. It is the submission of the ld. counsel for the assessee that the assessee has done genuine business and no such disallowance was made in the preceding year. We find merit in the submissions of the ld. counsel for the assessee that mere non-deduction of tax by the payer cannot change the character of the income. We find the Assessing Officer in the assessment order has also mentioned that assessee company has made trading of fabric only in the month of February and March, 2009. This otherwise indicates that the assessee has done some business. Further, the Assessing Officer has computed the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asked the assessee to prove the genuineness of the loan. In support of its claim, the assessee company just filed only the confirmation without filing the copy of ITR and capacity to prove the genuineness of the transactions. In view of the above, the Assessing Officer held that the assessee could not substantiate the claim. He accordingly made addition of Rs. 80,00,000/-. Thus, he made total addition of Rs. 1,05,00,000/- to the total income of the assessee. 12. Before the CIT(A), it was submitted that the Assessing Officer has made the addition on general allegations that documentary evidence has not been furnished during the assessment proceedings. It was argued that no summons u/s 133(6) of the I.T. Act has been issued to verify the transaction. It was submitted that the assessee has filed all the details to prove the identity, creditworthiness as well as genuineness of the amount received from the above parties. However, the Assessing Officer without going through the details furnished before him and without giving any reasonable opportunity to the assessee to explain the nature and source of transaction has made the addition. Various decisions were brought to the notice of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9-10 with computation of total income. Referring to page 91 of the Paper Book, he drew the attention of the Bench to the copy of Confirmation of Accounts from M/s TKS Projects Pvt. Ltd. for the assessment year 2009-10 along with audit report. Referring to page 66 to 68 of the Paper Book, he drew the attention of the Bench to the copy of the Confirmation of Accounts from Tanvir Ur. Rehman along with copy of bank statement from 06.08.2008 to 06.09.2008, copy of ITR for the assessment year 2009-10. He submitted that the assessee has discharged the onus cast on it. However, the Assessing Officer did not issue any summons u/s 131 nor called the information u/s 133(6) of the I.T. Act. 15. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Gangeshwari Metal (P.) Ltd. reported in 361 ITR 10, he submitted that the Hon'ble High Court in the said decision has held that where there is a clear lack of enquiry on the part of the Assessing Officer once the assessee had furnished all the relevant material, in such an eventually no addition can be made u/s 68 of the I.T. Act. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. D. K. Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that where the assessee failed to prove identity and capacity of subscriber companies who paid share application money, amount so received was liable to be taxed u/s 68 of the I.T. Act. 19. Referring to the decision of Hon'ble Delhi High Court in the case of CIT vs. Nova Promoters & Finlease (P) Ltd. reported in 342 ITR 169, ld. DR submitted that the Hon'ble High Court in the said decision has held that amount received by assessee from accommodation entry providers in garb of share application money, was to be added to its taxable income u/s 68 of the I.T. Act. 20. Referring to the decision of Hon'ble Delhi High Court in the case of CIT vs. Ultra Modern Exports (P.) Ltd. reported in 40 taxmann.com 458, ld. DR submitted that the Hon'ble High Court in the said decision has held that where in order to ascertain genuineness of assessee's claim relating to receipt of share application money, the Assessing Officer sent notices to share applicants which were returned unserved, however, the assessee still managed to secure documents such as their income-tax returns as well as bank account particulars, in such circumstances, the Assessing Officer was justified in drawing adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 50 taxmann.com 110, ld. DR submitted that the Hon'ble High Court in the said decision has held that in case of private limited companies, generally persons known to directors or shareholders, directly or indirectly, buy or subscribe to shares and, therefore, an assessee cannot simply furnish some details and remain quiet when summons issued to shareholders remain unserved and uncomplied, their reluctance and hiding may reflect on genuineness of transaction and creditworthiness of creditors. 27. Referring to the decision of Hon'ble Allahabad High Court in the case of Suman Gupta vs. ITO vide ITA No.680/2012 order dated 07.08.2012, ld. DR submitted that the Hon'ble High Court in the said decision has held that where identical amounts were found to have been deposited in accounts of half a dozen lenders prior to lending, and assessee could only produce one lender for examination, addition is to be made as assessee failed to prove genuineness of loans. 28. Referring to the decision of Hon'ble Delhi High Court in the case of Sanraj Engineering Pvt. Ltd. vs. CIT vide ITA 79/2016, ld. DR submitted that the Hon'ble High Court in the said decision has held that the addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Township Ltd. is concerned, we find the assessee has filed the confirmation from the said company with PAN Number, copy of which is placed at page 69 of the Paper Book. The assessee has filed the bank statement of the said company showing the amount paid from the bank account, copy of which is placed at page 70 -71 of the Paper Book. Acknowledgement of the income-tax return filed by the said company for the assessment year 2009-10 is also placed at page 72 of the Paper Book, the computation of income along with audited accounts are enclosed in the Paper Book from pages 73 to 90 of the Paper Book. 33. So far as the amount of Rs. 5,00,000/- received from M/s TKS Project Pvt. Ltd. is concerned, we find the assessee has filed the confirmation of the said party along with PAN Number and the copy of the audited accounts. Although the said amount was received through banking channel, however, bank statement of the said company is not enclosed in the Paper Book from the confirmation filed. Thus, a perusal of the Paper Book shows that the assessee has filed certain details to establish the identity and creditworthiness of the creditor and genuineness of the transactions. However, the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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