TMI Blog2024 (4) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income. Thus, existence of incriminating material which is found in the course of search is a very foundation of acquiring jurisdiction u/s 153A in the case of unabated / completed assessment. This principle laid down by the Hon ble Bombay High Court and Hon ble Delhi High Court and various other High Courts have been reaffirmed by the Hon ble Supreme Court in the case of Abhisar Buildwell Pvt.ltd [ 2023 (4) TMI 1056 - SUPREME COURT] as held no addition can be made in respect of the completed assessments in absence of any incriminating material. Here, in this case if there was any such information or material which was found much prior to the date of search, then the ld. AO should have reopened the assessment after exercising the powers u/s. 147 / 148 subject to the fulfillment of the conditions and limitations provided u/s. 147/ 148 and these powers are specifically saved u/s. 153. Instead of resorting to action u/s. 147 / 148, ld. AO has proceeded to use pre-search enquiry and information within the scope of Section 153A which cannot be referred as incriminating material found in the course of search. As stated above in the course of search, in so far as stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder company which was received from sale of unquoted shares of various companies and in support of which, ITR, financial statements and bank statements and confirmation of the parties were submitted, including consideration paid by the lender company for the purchase of unquoted shares and sale were also filed before the ld. AO during the remand proceedings which has been duly examined by the ld. CIT(A). Nowhere, AO has inquired about the source and veracity of the source of the funds of the lender company, albeit it has been accepted in the order passed u/s 143(3). Thus, it cannot be held that source of the source has not been proved by the assessee. Accordingly, the aforesaid finding of the ld. CIT (A) is affirmed. Appeal of the Revenue is dismissed. Disallowance u/s 14A - assessee has not earned any exempt income during the year under consideration - HELD THAT:- Once it is an admitted fact that there is no exempt income earned by the assessee, then no disallowance u/s. 14A can be made. This issue stands covered by the decision of M/s. Nirved Traders Pvt. Ltd. [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT] and catena of other judgments of Hon ble High Courts including Hon ble Madras H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search proceedings do not constitute incriminating material. 3. Since the facts and issues are involved in both the years are exactly same including the finding of the ld. AO and ld. CIT (A), therefore, both these appeals are taken simultaneously. In the cross objection, assessee has raised the issue on merits of the additions, as ld. CIT (A) has quashed the assessment and deleted the addition on the ground that the additions made by the ld. AO are beyond the scope of section 153A as they are not based on any incriminating material found during the course of search and both the assessment years were unabated assessments, i.e. the assessments in these cases had attained finality prior to the date of search. 4. The brief facts and background of the case in so far as the grounds raised by the department are that for the A.Y. 2013-14, original return u/s. 139(1) was filed on 27/09/2013 declaring total income of Rs. 26,42,530/-. The said return was selected for scrutiny and after examining the books of accounts and entries in the balance sheet and the profit and loss account, assessment order u/s. 143(3) was passed on 02/11/2015 assessing the total income at Rs. 26,73,210/-. Similarly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Infrastructure Pvt. Ltd, from whom assessee has received share capital. In the field enquiries before search it was found that the Inspector has submitted a report wherein at the time of enquiry, it was informed that these companies had been amalgamated and were not existent on these addresses. He also noted that the Directors in six Kolkata based companies including M/s. Nimbus Dealers Pvt. Ltd., M/s Marina Commercial Private Limited; M/s Rashidhan Infrastructure Private Limited and others were mostly common with common address. He also listed the name of the Directors and various companies in the order and their addresses to demonstrate they are same. Thereafter, he has referred to various pre-search enquiries and post-search enquiries conducted on these companies and various statements of the persons which have been reproduced in detail from pages 16-77 of the assessment order. 7.1 In response to the show-cause notice, the assessee submitted the entire details of the share applicant companies, their returns of income, bank statements, financial statements etc. and submitted that they were regularly assessed to tax even under scrutiny proceedings u/s 143(3). The assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iries conducted by investigation wing without any reference to any incriminating material 2. Statement of Saroj Swaika and Renu Swaika u/s 131 dated 30.06.2017 at DDIT(lnv.) office Third party statement not recorded at the premises of the appellant without any reference to any incriminating material 3 Inspector report dated 30.6.2017 Field Inquiries conducted by the investigation wing without any reference to any incriminating material 4 Statement of Shri Mrudul Kumar Gehlot u/s 131 dated 01. 07. 2017 Statement of employee at the premises of the appellant without any reference to any incriminating material 4 Statement of Shri S.G.Mehta u/s 132(4) dated 30.06.2017 at his office premises Third party statement not recorded at the premises of the appellant without any reference to any incriminating material 5 Statement of Shri Vineet Mittal u/s 132(4) dated 03.07.2017 and 131 dated 29.07.2017 Statement of promoter at the promises of the appellant without any reference to any incriminating material 6 Statement of Dinesh Dhandhania u/s 131 dated 19.11.2014 at ADIT(lnv.) office Pre search enquiries conducted by investigation wing, Kolkata 7. Statement of Naresh Chhaparia u/s 131 dated 15. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO dated 05/07/2022, ld. AO stated that the expression incriminating evidence has not been defined in the Income Tax Act. Incriminating material can be in any form of evidence either document or the entry in the books of accounts, assets, statement given on oath etc., During the course of search on 30/06/2017, various incriminating documents / information was found which reveals that assessee has received accommodation entries. However, no such reference of incriminating documents have been given except for one copy of ledger account of M/s. Marina Commercial Pvt. Ltd about share application money of Rs. 57,50,000/- alongwith share application form of Rs. 5,30,00,000/-. Ld. AO has then referred to Inspector s report and the finding carried out pre-search and how the business activity has been carried out by these companies. The ld. AO has also analysed the bank statement of shareholders and investors and their purported links to hawala entry operators. The entire content of the remand report has been incorporated in the appellate order from pages 78-85 alongwith remand report dated 26/07/2022 containing one seized material which was in the form of ledger account in the books of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch should be of such nature that it should not merely raise doubt or suspicion but should be of such nature which would prima facie show that the real and true nature of transaction between the parties is something different from the one recorded in the books or documents maintained in ordinary course of business Until such conditions are satisfied, it cannot be held that every seized material or document found in the course of search as incriminating in nature. In other words, any and every seized material which comes in AO's possession cannot be construed as incriminating material straightaway Hence, if a search is conducted to investigate certain allegations which are found to be correct during search and based on the various documents collected during the search action, specific information or finding is generated on account of inquiries conducted during search process which has a bearing on the determination of total income of an assessee, the AO would be within his power to proceed under section 153A of the Act against such person on the basis of such finding which would also constitute incriminating material. Hence, if during the course of search action, elaborate and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to consider the statement recorded u/s 132(4) as incriminating material since it was not supported by any corroborative evidence. The relevant portion is reproduced hereunder- The preliminary question under consideration before us is whether a statement under Section 132(4) constitutes incriminating material for carrying out assessment under S. 153(A) of the Act. A reading of the impugned order reveals that the statement of Mr. Jindal recorded under Section 132(4) forms the foundation of the assessment carried out under Section 153A of the Act. That statement alone cannot justify the additions made by the AO. Even if we accept the argument of the Revenue that the failure to cross-examine the witness did not prejudice the assessee, yet, we discern from the record that apart from the statement of Mr Jindal, Revenue has failed to produce any corroborative material to justify the additions. On the contrary we also note that during the course of the search, in the statement made by the assessee, he denied having known Mr. Jindal. Since there was insufficient material to support the additions, the ITAT deleted the same. This finding of fact, based on evidence calls for no interference, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n companies before its amalgamation with the assessee, has accepted that no actual work was done by him. I find that in the statement of Shri Mridul Gehlot recorded u/s 131 during the course of search who has explained that he was working with the group from 2010 and was entrusted with the administrative work in the capacity of Dy. GM (Admin). Further, he also explained that he was appointed director by the promoter considering his managerial potential However, he had never stated that the said company was engaged in non-genuine transaction. Therefore no negative inference can be brought out from his statement 9.12 I also find that statement of another employee Mr. Satish Sharma was recorded u/s 131 during the course of search. He has clearly stated that he was in- charge of keeping the books of the group companies and no doubt on the genuineness of the transaction has been raised by him 9.13 The AO has also submitted the statement of one Mr Amad Despande recorded u/s 131. On perusal of the said statement, I find that no question has been asked regarding the share capital received. Further, he has confirmed regarding his directorship and cross question has been asked by the officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the companies operated by such persons into the companies from whom funds were received to the assessee company. I find that legal position is clear that the incriminating material should be unearthed from the search on the assessee company As apparent from the statements, the same were recorded much earlier to the date of search by the investigation wing independently and had no relation with the assessee I also find that there is no mention of the assessee company or its group by such person in their statements recorded. 9.18 Further, AO has relied upon the statement of third party persons which were recorded consequent to the search action at the assessee company 9.18.1 In this regard, AO has relied upon the statement of one Mr. Saroj Swaika and Mrs Renu Swaika recorded u/s 131 who were ex-directors in some of the companies from which the share capital was received to the assessee group in the assessment order, the AO has produced a table at para no 6.4.2 giving details of directorship of the companies from the share capital has been received On perusal of the said details, it is noted that the said persons were directors as early as AY 2011-12 which was much earlier to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, showed that the search officials were also not satisfied with the statement given by Mr. Mehta which was based on hearsay. 9.19.3 I further find that the entire allegation in the statement of Mr Menta is related to share capital received from M/s Luxury Vinimay Pvt. Ltd. However, no such share capital has been received from the said company in the assesses company. Therefore, the question of relevance of such statement in the assessee's case is not established and accordingly, the same cannot be considered as incriminating material for the assessee 9.20 Further, in the assessment order, AO has relied upon the statement of certain entry operators recorded u/s 131 by the Kolkata investigation wing in the post search proceedings whose statement were earlier recorded by investigation wing in year 2014 which have already been discussed in earlier paras 9.20.1 In this regard, I find that the said statement cannot be termed as incriminating material unearthed during the course of search since the same were recorded in the post search proceedings u/s 131 of the Act by the Kolkata Investigation wing Further. I also find that the statements themselves cannot be treated as incrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pta v CIT (supra) where the admission by the Assessees themselves on critical aspects. of failure to maintain accounts and admission that the seized documents reflected transactions of unaccounted sales and purchases is non-existent in the present case in the said case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh contained any such admission 9.20.5 In such circumstances and as discussed above, I hold that such statement cannot be termed as incriminating material in the case of the assessee 9.21 Further, in the remand report AO has referred to the field enquiry conducted in the post search enquiries, in respect of various companies of the assessee group as well as the shareholder companies. As per the inspector's report the same have been reported to be non-existant. 9.21.1 I find that the said findings are not arising out of the findings of the search action conducted at the premises of the assessee company Rather the same were enquiries conducted at the time of post se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.07.2016 Such supporting documents, therefore, do not bring out any incriminating fact that reveals that the share application money received pertained to accommodation entries Accordingly, such documents cannot be termed as incriminating material unearthed during the course of search. In this regard reliance is placed on the decision of Hon'ble Delhi High Court in the case of the Param Dairy Ltd. in ITA No. 37/2021 dated 15.02.2021 wherein it was held that the seized material containing accounted ledgers cannot be termed as incriminating material. The relevant portion of the order is reproduced hereunder 5. We have considered the aforesaid contentions and are of the view that no substantial question of law arises, as the matter is squarely covered by Kabul Chawla supra, which has been correctly applied to the facts of the case by the ITAT The ITAT, in the impugned order has held that in the audited report filed by the assessee along with the report, cash book, ledger, bank book etc. were mentioned, the me respondent assessee, was maintain books on TALLY Accounting Software which was seized during the search and was being treated as incriminating material however, regular book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine for the reason that these entities were not available at the addresses mentioned; secondly, there was an Income Tax Inspector s report that these companies were not conducting business on the address mentioned; thirdly, the Directors of these companies were common and were dummy Directors; and lastly, reference to statements of various persons pre-search enquiry by investigation wing and during search. 12.1 In order to appreciate various finding of the ld. AO, allegation of the ld. AO and the finding of the ld. CIT(A) on the issue of various statements and whether they constitute incriminating material or not, same is being tabulated and can be summarized in the following manner:- Sr. No. Nature of Finding Allegation of AO Findings of CIT(A) / contention of the assessee Pre-search inquiries 1 Statement of Dincsh Dhandhania u/s 131 dated 19.11.2014 at ADIT (Inv.) office, Kolkat a Pre search enquiries conducted by investigation wing, Kolkata, on certain entry providers. These entry operators were engaged in providing accommodation entries through various entities. It is also alleged that such entities have provided accommodation entries to the shareholders companies of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of Shri Vineet and he is not aware about running these companies. Shri Mridul Gehlot has explained that he was working with the group from 2010 and was entrusted with the administrative work in the capacity of Dy. GM(Admin), He has confirmed that he was appointed as director considering his managerial potential. Shri Vineet Mi!lal, promoter, in his statement has confirmed that Mr. Gehlot was appointed as director as per his merits. Statement recorded of Shri Mrudul Kumar Gehlot never stated that the company was engaged in non-genuine transaction and ii does not makes any reference incriminating material. His statement is further supported by statement of another employee Shri Satish Sharma who has clearly stated that he was in-charge of updating and keeping the books of the said companies since they had subsequently merged with the assessee. 5 Statement of Shri Vineet Millal u/s 132(4) dated 03.07.201/ and 131 dated 29.07.2017. Mr. Vineet Mittal when confronted with the statements given by other employers, he could not give plausible explanation about various answer given by other employees in their statements. Mr. Mittal in his statement has categorically stated that the em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay Pvt. Ltd.. However, no share capital has been received from the said company in the assessee. Mr. Mehta has merely expressed his opinion and he has no concrete knowledge regarding the transaction and was based on hearsay. Statement of Mr. Satish Sharma and Mr. Amol Despande was recorded subsequent to Mr. S.G. Mehta statement; however, no cross question was asked to them. Statement recorded of Shri S.G. Mehla does not makes any reference to any incriminating material and such third party statement per se cannot be termed as incriminating material found/recovered from the premises of the appellant. 8 Statement of Saroj Swaika and Renu Swaika u/s 131 dated 30.06.2017 at DDIT(Inv.) office, Kolkata Saroj Swaika Renu Swaika were ex-directors in Nimbus Dealers Pvt. Ltd. Luxury Agencies Pvt. Ltd. Both these person in their statement have accepted that they are dummy directors and their role was restricted to mere signing the papers. The said persons were directors as early as AY2011-12 which was much earlier to which the share capital were received by assessee group. Mr. Swaika in his statement denied of having known to the assessee company Important to note that they were ex-directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Bhutoria Naresh Kumar Chhaparia in their statement have categorically admitted that the entities run by them are for accommodation entries only. The statement s have been recorded post search without any reference to any material found during the search at the assessee. The statement of Naresh Chapparia has been specifically rejected by the Hon'ble Tribunal in the case of Adhumk Gases Ltd (lTA No. 47/Kol/2015) Statement of I heir party cannot be considered as incriminating material unearthed during the search conducted on the assessee. 13. Now whether these allegations and discussions made by the ld. AO in the assessment order can be said to be incriminating material found in the course of search so as to justify the additions made by the ld. AO within the scope and ambit of Section 153A, especially in the case of unabated assessments which had attained finality before the date of search. 14. There are certain statements which had taken much before the search, i.e., pre-search enquiries and there is reference of pre-search enquiries conducted by Investigation Wing, Kolkata, which has nothing to do with the assessee nor has any such material relating to or pertaining to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch albeit it just gives the details of entries incorporated in the balance sheet. 15. Now coming to the certain statements and enquiries during the course of search at third parties, from the perusal of the finding given by the ld. CIT (A) as incorporated above, as per his findings and analysis of every statement, nothing can be said to incriminate the assessee about the share application money or any reference to incriminating material which can be said to be corroborated by these statements. 16. Thus, enquiries during the search also with the third parties, no adverse inference can be drawn that the share application money received by the assessee in the A.Y. 2013-14 and 2014-15 which was part of records at the time of original assessment proceedings can be reckoned as incriminating. 17. Another important fact which has been brought on record by the ld. Counsel of the assessee that the entire premise of the ld. AO is that these two companies from whom assessee had received share application money were not found at the given addresses, clarified that office of these companies had shifted to Mumbai and later on became part of the group company of the assessee and these companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments /unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged /mentioned under sections 147/148 of the Act and those powers are saved. 19. If we apply aforesaid principle upheld by the Hon ble Supreme Court, then for assuming jurisdiction to assess or re-assess the total income u/s. 153A, there has to be some kind of incriminating material found during the course of search. In case, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. CIT(A) erred in deleting the addition made u/s 68 of the income tax Act, 1961 even though the assessee could not prove the genuineness of the transaction and creditworthiness of the M/s. Integral Distributors LLP (Earlier Integral Distributors Pvt. Ltd.) ? 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition made u/s 69C of the income tax Act, 1961 on account of undisclosed commission paid in cash being 1% of bogus unsecured loan taken from M/s. Integral Distributors LLP? 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance made u/s. 14A of the Income Tax Act, 1961 to the book profit of the assessee without appreciating the provisions of clause (f) of explanation 1 to section 115JB(2) of the Income Tax Act, 1961 and the decision of the Hon'ble ITAT Mumbai 'F' Bench in the case of Deputy Commissioner of Income Tax, Central Circle-18 19, Mumbai vs. Viraj Profiles Ltd. in ITA No. 4439/ (Mum.) of 2013. 23. The brief facts are that assessee had filed return of income u/s. 139(1) on 28/09/2016 declaring total income of Rs. 1,06,12,840/-. A search and seizure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng AY 2016-17. 4.2 The following documents were submitted by the assessee as additional evidence in support of the claim a. Copy of ITR and financials of Integral Distributors. b. Copy of bank statement of M/s Integral Distributors LLP reflecting the transaction with the appellant. c. Copy of documents showing source in the hands of M/s Integral Distributors LLP. d. Copy of supporting evidence in respect of source of credits in the hands of details showing source in the hands of M/s Integral Distributors LLP. e. Copy of details of usage of funds by the appellant along with the copy of agreement entered into between the appellant and M/s Welspun Energy Pvt.Ltd. made u/s 68 of the Income-tax Act in the assessment order. The document and issue wise comments are presented below: a. The returned total income of the Lender is Rs. NIL for AY 2016-17. The bank of funds from various entities Fusequently transferred to Sirius Media Pvt. Ltd. (the erstwhile entity that existed before amalgamation) There are no fixed assets in the balance sheet apart from Capital work-in-progress of Rs. 18,74,938/-. The investments in unlisted equities are worth Rs. 37,26,49,088/- h. On page 76 of the paper bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s available under capital gains schedule. Some of them have overlapping Directorships. They have bulky balance sheets in contrast to their P L accounts. Their reserves and surplus are more than 20-30 times their share capital, which shows that they have raised share capital on substantial premium. 4.6 The assessee in its additional evidence has also submitted the utilization proof of the funds received from the lender. Most of the funds i.e. Rs. 21,00,00,000/- have been used to extend a loan to another company Welspun Energy Private Limited. 5. Conclusion: The documents submitted have shown the source of funds at the hands of the lender M/s Integral Distributors LLP. However, the source of source cannot be conclusively justified in the light of the above observations. The creditworthiness and genuineness of the source of source companies is also doubtful. The sale of share has not been supported with proper contracts and compliances with Company law. The additional evidence is not contributing towards substantiating the creditworthiness of the lender, which remains doubtful. 24.1 The ld. CIT (A) noted that assessee was given show-cause notice at the very fag end of the assessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO at Kolkata at the very same address wherein the notices were served and the assessment was completed. It is also pointed out that the lender was also assessed post search by the very same AO at Mumbai wherein the notices were duly served. I find that the above facts pointed out by the assessee clearly show that the lender was existing. Therefore, the said allegation of the AO cannot be accepted. With respect to low income, the appellant has explained that the said lender had made major investment in the unquoted shares whose income would arise over the period of time. Also, the lender had own funds since AY 2012-13 which were also assessed by the then AO and this further establishes its creditworthiness. 14.22 In view of the above, I find that the assessee has proved the identity, creditworthiness and genuineness of the lender by producing the relevant documents. 14.23 Further, in the assessment order, AO has alleged that the lender M/s. Integral Distributor Pvt. Ltd. and its shareholders are a paper company. The appellant has pointed out that while making the said allegation, no evidence to prove the same has been bought on record which was found during the search or otherwise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allegation nowhere shows that the transaction entered by the lender is not genuine. The common address of the purchase parties doesn t lead to any negative inference. Similarly, the appellant has explained that the parties from whom funds have been received by the purchase parties have been struck off by ROC much after the funds have been received by the lender. Such action of the ROC cannot lead to an inference that the transaction is not genuine. Accordingly, I do not find any substance in the above allegation of the AO. 14.28 In view of the above, I find that AO has not been able to bring on record any concrete evidence to disprove the source of the source of the unsecured loans. 14.29 As already stated above, the assessee has discharged its onus to prove the source in its hands and no doubt has been raised by the AO in the remand report on the said evidences. Further, I also find that except relying upon the enquiry made by the investigation wing, no independent enquiry has been conducted by the AO and no concrete evidence has been brought on record by the AO to show that the unsecured loans received of Rs. 28 crore were not genuine. 14.30 In view of the above, I hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of unsecured loans. This company in the balance sheet has declared own funds of Rs. 91 Crores for A.Y. 2012-13 out of which loan of Rs. 28 Crores was passed to assessee. Further, the source of the comments of the letter was also assessee by the AO wherein AO has verified the funds and accepted to be genuine in the order passed u/s. 143(3) for A.Y. 2012-13. Once the ability of funds have been accepted of Rs. 91 Crores in A.Y. 2012-13, then it cannot be held that lender company did not have sufficient funds when the loan was given and moreover even for A.Y. 2016-17, assessment has been made u/s. 143(3) in the case of lender company and even the present AO has also passed the assessment order in A.Y. 2018-19, which goes to prove that it is not a paper company. These facts has not been rebutted before us and in so far as allegation of the ld. AO that lender and shareholders were not found at the address of the Kolkata becomes irrelevant when assessment has been done from the same address and also brought on record that address of the lender company had already shifted to Mumbai which is also evident from the order of the present AO in the case of the lender company wherein he has pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 and the decision of the Hon'ble ITAT Mumbai 'F' Bench in the case of Deputy Commissioner of Income-tax, Central Circle-18 19, Mumbai vs. Viraj Profiles Ltd. in ITA No. 4439/ (Mum.) of 2013 . 31. The only issue involved is that ld. AO has made disallowance u/s. 14A r.w.r.8D of Rs. 1,60,37,492/-. It is an admitted fact that assessee has not earned any exempt income during the year under consideration and ld. AO has wrongly mentioned that assessee had earned dividend income. The ld. CIT (A) had deleted the disallowance after observing as under:- 11.2 I have gone through the submission of the assessee and contention of the AO. The assessee has submitted that for the purpose of computing disallowance u/s 14A, the amount of disallowance shall be restricted to the amount of exempt income earned by the assessee. This is as per the ratio of the decisions laid out by the Hon ble Courts in the case of CIT vs. Ballarpur Industries Limited vide ITA No. 51 of 2016 and Hon ble Mumbai Tribunal in the case of Assistant Commissioner of Income-tax v. Bajaj Capital Ventures (P.) Ltd reported in [2022] 140 taxmann.com 1 (Mumbai - Trib.). In the submission, the assessee has contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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