TaxTMI 
TaxTMI 
2012 (11) TMI 760
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....passed. ITA NO. 1469/Hyd/2011 2. Briefly the facts of the case are that a search and seizure operation was conducted in the case of Sri Venkata Kutumba Rao & Others on 28/07/2008. The search and seizure was also conducted at the assessee's business premises, namely, Shasta Luxury Hotels Pvt. Ltd. Consequent to the search operation, assessment was completed by the AO making an addition of Rs. 38,57,851/- on account of unexplained share application money. Aggrieved, the assessee carried the matter in appeal before the CIT(A). 3. Before the CIT(A), the 1st ground raised against the assessment order was that during the search operation no incriminating material was found and there was no seizure and hence, the AO should not have issued....
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.... of sufficient time and opportunity given. 3. The ld. CIT(A) ought to have upheld the addition towards share capital as the assessee failed to prove the identity, creditworthiness and genuineness of the transaction as discussed in the assessment order. 4. The ld. CIT(A) erred in relying on the decision of Hon'ble Supreme Court in the case of CIT Vs. Lovely Exports (P) Ltd. as reported in 216 CTR 195(2008)(SC) and in that case, the additions were made on account of sums received from directors and promoters by way of public issue of shares where as the assessee is closely held company and Sri C. Shashidhar Reddy is not even a director and does not even appeal to be a promoter. 5. The ld. CIT(A) erred in holding that Sri C. Shashidha....
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....shareholders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be regarded as undisclosed income u/s 68 of the assessee company." We agree with the finding of the CIT(A) that if at all addition is made it should have been made only in the promoters hand and not in assessee's hand. Therefore, respectfully following the ratio laid down by the Hon'ble Supreme Court in the case of Lovely Exports Pvt. Ltd. (supra), we confirm the order of the CIT(A) on this count and dismiss the grounds of appeal of the revenue. 8. In the result, appeal of the revenue is dismissed. ITA NO. 1470/Hyd/11 9. Ground Nos. 1 to 5 are pe....
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....oks of account and other supporting bills & vouchers whereas earlier in the order he had mentioned that the assessee appeared from time to time and filed required information. However, the CIT(A) observed that the AO has not pointed out any specific defects while making disallowance. The CIT(A) restricted the disallowance to the extent of 10% of the disallowance made by the AO. Aggrieved, the revenue is in appeal before us. 13. Before us, the learned counsel for the assessee reiterated the submissions made before the CIT(A). We are inclined to confirm the order of the CIT(A) on the ground that the disallowance sustained by the CIT(A) is reasonable as the assessee was not able to produce any evidence regarding the genuineness of expend....