TMI Blog2020 (2) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of various expenses by the CIT(A) - HELD THAT:- We find that there are no specific findings by the Assessing Officer in terms of the expenses not been incurred for the purpose of business or bogus in nature. Therefore, in absence of specific defect been highlighted by the Assessing Officer, the adhoc disallowance so made and confirmed by the ld. CIT(A) is hereby deleted. - ITA No. 733/JP/2019 - - - Dated:- 7-2-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Sh. Sunil Porwal (CA) Sh. Ram Swaroop Jaju (Adv.) For the Revenue : Ms Chanchal Meena (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 25.01.2019 wherein the assessee has taken the following grounds of appeal:- Under the facts circumstances of case, the Ld. CIT(A) has erred in:- 1) Confirming the addition of ₹ 80.00 lakhs (out of total addition of ₹ 1,11,42,000/-) u/s 68 of Income Tax Act, 1961 for share application and share premium money received from various entities. 2) Confirming the 50% adhoc of disallowance of various exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived any return on such investments, it must have sold its shareholding either to assessee company or to some other investors, however, nothing of this sort took place. Even without receiving any returns, still investor Company had kept its hard earned money/funds blocked with assessee company which is against normal business prudence. It was accordingly held that the investment was not made with the motive of earning any profits but it must have some other purpose which was not disclosed by either assessee company or by the investor company and in view of the same, the genuineness of the transaction was not established. Further, the commission u/s 131(1)(d) was issued to ACIT at Kolkata and the inspecting authority also furnished a report stating that nobody was found at the address furnished by the assessee company. Further, the assessee was requested to produce the directors of the investor company for examination but they have not been produced for verification. It was accordingly held that the explanation offered by the assessee company regarding the genuineness of the transaction and identity and credit worthiness of the investor company is not satisfactory and hence, amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) Copy of application for equity shares in M/s Jajoo Rashmi Refractories (P) Ltd. Dated 23.06.2011 (f) Copy of confirmation filed to ACIT u/ se c. 133(6) of Income Tax Ac t , 1961 (g ) Copy of Bank Statement (Kotak Dalhousie, Kolkata Branch) (A/c No. 11092) (h ) Copy of Audit Report, Directors Report and other financial statements For year ending 31.03.2012, Income Tax Acknowledgement (i) Copy of search report by Company secretary from the portal of Ministry of Corporate Affairs about the existence and financial activities (j) Copy of search report AOC-4, for 31/03/2017 f rom MCA Portal 3. M/s Sundrm Consultants (P) Limited (a) Copy of Certificate of Registration with RBI For Non - Banking Financial Corporation (b) Copy of Memorandum Articles of Association (c) Copy of Search report by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10/- each have been issued at a premium of ₹ 490/- per share thus looking at high capital appreciation, the investor company has decided to invest in the assessee company and there is thus no basis for alleging that there was no basis for making investment in the assessee company. 8. Regarding M/s Sundram Consultants Pvt Ltd, it was submitted by the ld AR that it is registered as an Non Banking Financial Corporation with Reserve Bank of India vide license no. B-05-04216 dated 13.04.2001 and also with the Registrar of Companies vide incorporation certificate no. 709424 dated 19.04.1996. The registered office of the company was initially at P-41; Princep street R. No. 611, 6th Floor, Kolkata (WB) and subsequently, got changed to B/1; Lal Bazar Street Bikaner Building Suit No. 28, 2nd Floor, Kolkata (W.B). It is having PAN AAES1225L and regularly filling its return of income with the income tax authorities as well as making the necessary filings with the Registrar of the Company, Kolkatta. Therefore, there cannot be any question of its identity not been established. It was further submitted that as per the audited financial statements of the company as on 31.03.2012, it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the findings of the Assessing Officer. It was submitted by the ld. DR that the Assessing Officer has carried out necessary verification in terms of issuance of notice u/s 133(6) and also issuing commission u/s 131(1)(d) of the Act and basis such inquiry and investigation has given a finding that the assessee company has failed to justify and provided suitable explanation regarding identity, credit worthiness and genuineness of the transactions. It was accordingly submitted that there is no infirmity in the order of the Assessing Officer which has been rightly confirmed by the ld. CIT(A). He accordingly requested for confirmation of the order of the lower authorities. 11. We have heard the rival submissions and perused the material available on record. It is a settled legal proposition that where any sum is found credited in the books of accounts maintained by the assessee company, Section 68 requires that the assessee company should offer an explanation about the nature and source of such sum found credited in its books of accounts to the satisfaction of the Assessing officer. The primary requirements, which should be satisfied cumulatively by the assessee in such case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from their filings with the ROC and there has been no further enquiry conducted by the Assessing officer. Therefore, as far as the identity and existence of these investor companies are concerned, their registration and regular filings with the appropriate regulatory authorities duly demonstrate the same. Regarding genuineness of the transaction wherein they have invested in the share capital of the assessee company, it is noticed that investment is part of their core business activity and as part of such business activity, these companies have decided to invest in the assessee company and amount has been transferred through banking channels into the assessee company s bank account and basis the share application request received by the assessee company, the shares have been issued to these investor companies. Further, as per the finding of the Assessing Officer, the amount had remained invested in the assessee company as on the date of the assessment order and therefore, it is not a case that the money has been initially invested by these investor companies and thereafter, within a short period, there has been subsequent transfer or buyback of these shares by the assessee comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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