9911796707
TMI Blog2023 (2) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Brief facts of the case are that the assessee is a company in the name and style of M/s. ATR Ware Housing Pvt. Ltd., Visakhapatnam is deriving income from business and capital gains, filed its return of income for the AY 2013-14 on 31/10/2016 declaring a total income of Rs. 1,97,91,850/-. The main source of business income is license fee collected from the tenants for the ware housing godowns at various places viz., Visakhapatnam, Kakinada and Hyderabad. Sri AT Rayudu and Sri A. Avnash are the Directors of the assessee-company who hold 45% each of the share-holding in the company. The case was selected for scrutiny under CASS and a notice U/s. 143(2) was issued on 15/09/2014 but the assessment got abated as search and seizure operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of material found and seized in the coursed of search and seizure operations conducted at the business premises of the applicant and residential premise of the Directors etc and the assessee was asked to furnish the information by 30/08/2017. After considering the submissions of the assessee as well as the material available before the Ld. AO, the Ld. AO rejected the claim of unsecured loans borrowed by the assessee amounting to Rs. 16,08,00,000/- and consequently disallowed the claim of interest of Rs. 32,56,608/- relatable to such unexplained cash credits. Ld.AO also made addition of Rs. 75,05,08,016/- being the excess amount collected for 1,93,655 shares and taxed as income from other sources U/s. 56(2)(viib) of the Act. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is passed without proper application of mind as it is also contrary to the spirit and provisions of the Income Tax Act, 1961. 1. That having regard to the facts and circumstances of the case, the present assessment pursuant to section 153A is not justified as the search conducted on the appellant was based on illegal search warrant. 2. That having regard to the facts and circumstances of the case, the present assessment is not justified as no incriminating material was found in the course of search. 3. That having regard to the facts and circumstances of the case, the Ld. AO has erred in passing the impugned assessment order which was passed pursuant to a notice issued u/s. 153A which itself was perverse in law. 4. The Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that no such opportunity was provided to the assessee. Therefore, following the principles of natural justice, we are of the considered view that the assessee shall be provided a reasonable opportunity with respect to enhancement of disallowance of interest of Rs. 25,93,067/-. Accordingly, in order to provide a reasonable opportunity, we remit the issue back to the Ld. CIT(A) for deciding the issue afresh after affording a reasonable opportunity of being heard to the assessee. Thus, Ground No.4 raised by the assessee is allowed for statistical purposes. 7. With respect to Ground No.5, the Ld. AR argued that the Ld. CIT(A) confirmed the addition made by the Ld. AO with respect to allotment of shares by M/s. Usha Tubes and Pipes Ltd [UTP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head income from other sources. The procedure for computation of fair market value is prescribed under Rule 11U and 11UA of the IT Rules, 1962. However, in the instant case it is established that the assessee is holding 99.68% of the equity shares in the subsidiary company viz., M/s. UTPL. The assessee company being the holding company fully controls the management and affairs of M/s. UTPL. It is also noted that the entire assets and liabilities of the subsidiary company also belong to the assessee company as being a major shareholder and also the holding company. Considering the relationship between the assessee company and M/s. UTPL the allotment of the further equity shares in M/s. UTPL (subsidiary company) to the assessee com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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