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TMI Blog2019 (11) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... ation money. Observations made, inferences drawn and findings recorded are against the facts and circumstances of the case. 2. The L'd Commissioner of Income Tax (Appeals) has failed to appreciate the facts and circumstances of the case while sustaining the disallowance of Rs. 27,072/- U/S 40A(3) of the Income Tax Act, 1961. 3. That the L'd Commissioner of Income Tax (Appeals) has erred on facts and law in sustaining addition of Rs. 2,83,160/- alleged to be interest income of this year." 3. The ld. counsel for the assessee, at the outset, did not press ground of appeal No. 2 on account of smallness of the amount for which the ld. DR has no objection. Accordingly, ground No.2 is dismissed. 4. So far as ground No.1 is concerned, the same relates to the order of the CIT(A) in sustaining the addition of Rs. 3 crores made by the Assessing Officer u/s 68 of the IT Act being share application money received by the assessee. 5. Facts of the case, in brief, are that the assessee is a private limited company and is engaged in the business of manufacturing of craft paper. It filed its return of income on 27.09.2012 declaring the total income at Rs. 17,07,650/-. However, tax was paid u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46A of the IT Act for admission of certain additional evidences such as acknowledgement of ITR for the year under consideration, copy of PAN card, jurisdiction of the Assessing Officer under the IT Department, copy of the master data available at the Registrar of Companies, confirmations of share applicants, photo copy of certificate of share as obtained from the Share Applicant, Board Resolution of the share applicant along with confirmation, Memorandum & Articles of Association of the Share Applicant Company and Balance Sheet & Profit & Loss Account of the Share Applicant company. 8. The ld.CIT(A) admitted the additional evidences and called for a remand report from the Assessing Officer. After considering the remand report of the Assessing Officer and rejoinder of the assessee to such remand report, the ld.CIT(A) confirmed the addition made by the Assessing Officer u/s 68 of the Act in respect of the share application money and share premium. 9. Aggrieved with such order of the CIT(A), the assessee is in appeal. 10. The ld. counsel for the assessee, at the outset, submitted that the assessee has discharged the onus cast on it by producing all the relevant documents before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transaction, therefore, in view of the decisions cited above and in the light of the decision of the Hon'ble Supreme Court in the case of Lovely Exports, reported in 319 ITR 005, the addition made by the Assessing Officer and sustained by the CIT(A) is not justified. 11. In his alternate contention, the ld. counsel, referring to the decision of this Bench of the Tribunal in the case of Mannat Hospitality (P) Ltd. vs. ITO, vide ITA No.7348/Del/2018, order dated 7th June, 2019, for assessment year 2009-10, submitted that under identical circumstances, the Tribunal has restored the issue to the file of the Assessing Officer with a direction to decide the issue afresh in the light of the decision of the Hon'ble Supreme Court in the case of PCIT vs. NRA Iron and Steel Pvt. Ltd, order dated 05.03.2019 and the decision of the Hon'ble Delhi High Court in the case PCIT vs. NDR Promoters Pvt. Ltd, 2019-TIOL-172-HC-DEL-IT. Referring to the Standard Operating Procedure issued by the CBDT, for deciding issues involving addition u/s 68, he submitted that the said Standard Operating Procedure was issued by the CBDT after the order of the CIT(A). He accordingly submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. vs. DCIT (2018) 90 taxmann.com 56 (Bombay); viii) Pratham Telecom India Pvt. Ltd. vs. DCIT (2018-TIOL-1983-HC-MUM-IT) ix) CIT vs. Nipun Builders & Developers (P) Ltd., 30 taxmann.com 292; x) CIT vs. Nova Promoters & Finlease (P) Ltd., 18 taxmann.com 217; xi) CIT vs. NR Portfolio Pvt. Ltd. (2014) 42 taxmann.com 339 (Delhi); xii) CIT vs. Empire Builtech (P) Ltd., 366 ITR 110; xiii) PCIT vs. Bikram Singh (2017) 85 taxmann.com 104 (Del); & xiv) ITO (E) vs. M/s Synergy Finlease Pvt. Ltd., ITA No.4778/Del/2013, order dated 08.03.2019. 13. She also relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Titan Securities Ltd., vide ITA 263/2012, order dated 28th February, 2013. 13.1 We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer, in the instant case, made addition of Rs. 3 crores u/s 68 of the IT Act being the amount received by the assessee on account of issue of 3 lakhs share of Rs. 10/- each at a premium of Rs. 90/- on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to the assessee to substantiate with evidence to his satisfaction regarding the identity and credit worthiness of the share applicants and the genuineness of the transactions. The Assessing Officer, if feels necessary, may summon the directors of the investor companies or ask the assessee to produce the directors of the investor companies. The Assessing Officer shall decide the issue as per fact and law, after giving due opportunity of being heard to the assessee. Further, while doing so, the Assessing Officer shall keep in mind the decision of the Hon'ble Supreme Court in the case of NRA Iron & Steel Pvt. Ltd. (supra) and the decision of the Hon'ble Delhi High Court in the case of NDR Promoters Pvt. Ltd. The ground of appeal No.1 raised by the assessee is accordingly allowed for statistical purposes. 15. So far as ground No.3 is concerned, the same relates to the order of the CIT(A) in sustaining the addition of Rs. 2,83,160/- alleged to be interest income for this year. 16. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed from ITS details that the assessee company has earned interest income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. However, it is a mater of record that the assessee has not substantiated by producing necessary evidence either before the Assessing Officer or before the CIT(A) that the balance interest has been offered to tax in the subsequent year. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to give one more opportunity to the assessee to substantiate its case and decide the issue as per fact and law. We hold and direct accordingly. Ground No.3 is accordingly allowed for statistical purposes. ITA No.7644/Del/2018 21. The assessee in its grounds of appeal has challenged the order of the CIT(A) in confirming the penalty of Rs. 98,34,200/- levied by the Assessing Officer u/s 271(1)(c) of the IT Act. 22. After hearing both the sides, we find the quantum appeal has been restored to the file of the Assessing Officer for fresh adjudication. Therefore, the penalty so levied by the Assessing Officer and upheld by the CIT(A) has no legs to stand. Accordingly, the penalty levied by the Assessing Officer and sustained by the CIT(A) is cancelled. However, the Assessing O ..... 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