TMI Blog2022 (11) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... wn the AO of any kind whatsoever. AO even stated in the remand report that investors were either engaged in small scale proprietory business of trading in paddy or were engaged in agricultural operations. AO also noted that the cash deposited into the bank accounts was out of was out of normal business operation and all have filed their ITRs , balance Sheets, personal P L A/Cs and bank statements who invested in the assesse company by cheques. As regards those investors who invested in the assessee s shares in cash in small amounts have filed their voter I.D cards , balance sheets and confirmed the transactions by personally appearing before the AO in response to summons issued u/s131 of the Act. As also stated by the AO that there is no bar on buying shares in cash and any person can invest this much amount. Under these facts and circumstances, we are not in concurrence with the conclusion of the Ld. CIT(A) that the assessee has failed to discharge the onus of proving the creditworthiness of all the creditors and genuineness of the transactions. Accordingly we set aside the order of Ld. CIT(A) on this issue and direct the AO to delete the addition - Accordingly ground rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of filing appeal during the COVID- 19 pandemic is to be excluded for the purpose of counting the limitation period. In view of this, the appeal is treated as filed within the limitation period. 3. The issue raised in Ground nos. 1,2 and 3 is against the part confirmation of addition of Rs. 72,96,000/- by the Ld. CIT(A) out of total addition of Rs. 1,63,24,000/- made by the AO u/s 68 of the Act. 4. Facts in brief are that the AO during the course of assessment proceedings noted that the assessee has received money under the head share capital of Rs. 33,64,800/- as well as share premium of Rs. 1,34,59,200/- aggregating to Rs. 1,68,24,000/- and accordingly called upon the assessee to furnish the proofs of identity,creditworthiness and genuineness of the investors with their confirmations. The assesse furnished the details of allottees with other evidences including the bank statements of the share applicants. The assessee submitted that the share capital and share premium were received from 160 persons. It was submitted that from 28 persons share application money was received by cheques whereas in case of 132 persons share application money was received in cash . The AO do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vote I.D. cards ,confirmations, balance sheets, identity proofs with regard to128shareholders, we note that all these investors were belonging to far flung areas which san banking facilities and were primarily engaged in agricultural and farming activities. We further note that the AO issued summons u/s 131 to all the share subscribers who personally appeared before the AO in compliance to the summons and confirmed their investments in the equity shares of the assessee besides furnishing the evidences as to the source thereof. We note that these parties were identifiable and were with rural background and were not having access to the banking facilities. We observe that the ld AO has added the amount received in cash from 128 investors u/s 68 of the Act as unexplained only on the ground that this investment were made in cash. Even the remand report called for by the Ld. CIT(A) in the appellate proceedings did not doubt the genuineness of the agricultural background of the investors and it was accepted by the AO himself that these persons were belonging to rural areas. We observe that the AO has harped on the sole basis of investments being in cash which cannot be a sole ground for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacs computed the excess stocks at Rs. 51,34,000/- and added the same to the income of the assessee as unexplained investments besides making additions grossprofits and unexplained stocks in the assessment framed u/s 143(3) of the Act dated 28.03.2014. 9. The Ld. CIT(A) in the appellate proceedings came to the conclusion that Rs. 50 Lakhs which was disclosed by the assessee during survey operation is required to be added to the income of the assessee on the ground that the assessee has failed to give necessary proofs of incorporating the same in the return of income and also in the profit and loss account for AY 2011-12 whereas the remaining additions were deleted .Pertinent to state that explanation of the assesse as regards Rs. 50 lacs disclosure of stock has been accepted by the AO and he allowed credit of the same while making the addtion. Now the assessee has challenged the said order of Ld. CIT(A) before us on the ground that the first appellate authority has totally failed to appreciate the facts of disclosure having been fully disclosed in the return of income and profit and loss account. 10. The Ld. A.R. took us through the copy of stock extracts of paddy, Banskathi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made u/s 40a(ia) of the Act which was replied by the assessee s Counsel before the AO by submitting that the said payment has duly been shown as income by Satyam Services in its return of income for AY 2011-12 and has paid tax accordingly. The assessee relied on the decision of Hon ble Apex Court in the case of Hindusthan Coca Cola Beverages Pvt. Ltd. vs. CIT Appeal (civil) 3765 of 2007 wherein it has been held that no disallowance is required to be made as due tax has already been made under the Act by the recipient of income. 14. The Ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee has admitted the non-deduction of tax at source and thus reached a conclusion that assessee has committed a default u/s 194C of the Act. The ld CIT(A) also distinguished the decision in the case of Hindustan Coca Cola Beverages Pvt. Ltd. vs. CIT (supra) and held that it was not applicable to the facts of the case as this case covers the issue of short deduction of tax whereas in the case of assessee it has failed to deduct TDS totally and thus confirmed the addition. 15. Having heard the rival submissions and perusing the material on record, the undisputed facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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