TMI Blog2021 (11) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... g PAN with the address at Secunderabad, but, no other documents were filed. Whereas the CIT(A) has allowed the addition of ₹ 60,00,000/- without examining the issue in detail as per section 68 of the Act. The AR of the assessee also did not prove the genuineness of the transactions and credit-worthiness of the share applicant, namely, Yashoda Energy Pvt. Ltd. as per section 68 of the Act. The address provided by the assessee is vague as merely quoting the address as Secunderabad, how the department can trace the share applicant whereabouts. In view of the above observations, we deem it fit and proper to remit this issue to the file of the AO with a direction to decide the issue afresh. The assessee is directed to substantiate its claim as per section 68 of the Act before the AO. Thus, the ground raised by the revenue is partly allowed for statistical purposes. - ITA No. 2168/H/2017 - - - Dated:- 21-10-2021 - Shri Satbeer Singh Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Revenue : Shri Rohit Mujumdar For the Assessee : Shri P. Murali Mohana Rao ORDER PER L.P. SAHU, A.M.: This appeal filed by the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessee was acceptable with regard to the claim that no borrowed funds were utilized for the investments on the basis of the information given in respect of the flow of funds and utilization of the loans. However, the provisions of rule 8D(2)(iii) of the IT rules 1962 rws 14A were attracted in the case of expenditure on the basis of investments made. He accordingly, disallowed the expenditure to the extent of ₹ 65,000/-. 5.1 Before the CIT(A), the assessee, inter-alia, submitted that since the assessee did not earn any dividend income on the investment made in associate company disallowance u/s 14A cannot be made. For this proposition, it relied on the decision in the case of Prathista Industries ltd. Vs. DCIT in ITA No. 1302/Hyd/2014. 5.2 After considering the submissions of the assessee, the CIT(A) relying on the decision of Prathista Industries Ltd., (supra), deleted the addition made by the AO by holding that there is no dividend income during the year under consideration. 5.3 We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. We observe that there is no exempt inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion letters but failed to furnish the source of their investment except in the case of Sri PRK Reddy, where the assessee had furnished the confirmation letter, return of income, computation and also the bank statement indicating the amount invested. 6.3 As assessee has failed to furnish necessary and sufficient evidence to establish the genuineness of the credits received in the form of share application money from the above concerned persons(except in the case of Sri PRK Reddy) and also failed to establish the creditworthiness of the said investors. It is also gathered from the information available on the web that the paid up share capital of Lepakshi Ayush park Pvt. Ltd., and Nandian PVK Energy Pvt. Ltd., is only ₹ 1,00,000/- each which further adds to the doubt about their creditworthiness. As per the principles laid down by the decisions of Hon'ble Supreme Court in Kale Khan Mohammad Hanif vs. CIT (50 ITR 1) and A. Govindarajulu Mudaliar vs. CIT (34 ITR 807), the onus of proving the source of a sum of money found to have been received by an assessee is on him. When the nature of source of a receipt cannot be satisfactorily explained by the assessee, it is open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the parties are income tax assessees and are regularly filing their income tax returns. He further submitted that the during the course or scrutiny proceedings, the assessee has submitted confirmation letters from the creditors and PAN, which proves the identity, creditworthiness and identity of the parties. He relied on the following case law: 1. Lovely Exports Ltd., 216 CTR 195 (SC) 2. Vaishnodevi Refooils Solvex, 96 Taxman.com 469 (SC) 3. Orchid Industries (P.) Ltd., 116 Taxamann.com 4. Orissa Corp. (P) Ltd., 25 Taxman 80F (SC) 5. Samyu Glass (P) Ltd., ITA No. 1218/Hyd/2015. 10. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. During the course of assessment proceedings, the assessee furnished the following details in respect of share application money: Particulars Opening balance Transactions Closing balance Debit Credit Lepakshi Ayush Park Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 9,50,000 viii) Yashoda Energy Pvt. Ltd. - ₹ 60,00,000 Total -₹ 3,65,55,496 In respect of the parties at Sl.No. i) ii), there is a debit and credit amounts as appearing in the above table, out of which, the AO has accepted the payments made to them. Had it been the doubt in the receipt of the monies, the entire receipt could have been added, whereas, the AO has added only the closing balance, which is not proper. Therefore, the assessee gets relief in respect of the parties mentioned at Sl.No. i) Ii). Further, in respect of the parties at Sl.No. iv) to vii), these parties names are included under the head share application money in the above table as evident from the order of the AO, but, under the same head, there is also opening balance as stated above and on perusal of the assessment order, it is clear that the amount has been received in the FY 2011-12, but, not in the impugned AY. Therefore, the amount received in the previous year cannot be taxed in the current AY. Accordingly, the assessee gets relief. Further, on p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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