TaxTMI 
TaxTMI 
2013 (8) TMI 822
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....mputers/software Rs. 1,24,000/- 3. The assessee company was incorporated on 15.2.2006. The Directors of the company with their respective capital investments are mentioned below: S.No. Name of Directors Amount Invested (Rs.) 1. Sri Syed Asadullah Hussaini 10,00,000 2. Smt Rasheeds Begum 9,00,000 3. Sri Syed Armanullah Hussaini 9,15,000 TOTAL 28,15,000 4. From the capital accounts of the Directors produced by the Authorised Representative, it can be seen that the capital investments made by all the Directors mentioned above was in "cash" mode. In spite of calling for information from the assessee about the details of capital investment, the AR could not produce the sources of income for the same. In the show cause notice dated 21.12.2009, it was mentioned that in absence of ledger copy, bank statements etc why the said total capital investment should not be treated as unexplained investment in the hands of the company and added back to the returned income. 5. In response to the show cause notice, the assessee submitted the reply dated 29.12.2009 along with explanation. In the case of Smt Rasheeda Begum's capital investment in the Company, the assessee in re....
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....ts made by Sri Armanullah to the extent of Rs.9,15,000/- is treated as unexplained investment in the hands of the Company and the same is added back to the total income of the Company as its income. 7. In the case of Sri Syed Asadullah Hussaini's capital investment, bank statement was produced in reply to show cause notice. When the capital account of Sri Asadullah and the bank statement were compared, the dates of cash withdrawals from banks did not match with capital investment dates as shown in the capital account. The Assessing Officer held that there was no clarity about when and from where the investments made in the Company by Sri Asadullah, were sourced from. Further, the Assessing Officer observed in the submissions made by the assessee on 29.12.2009, it clearly mentions that heavy cash balance is required to be maintained to satisfy the customer needs, who bring foreign money without banking knowledge and according to RBI guidelines, any payment exceeding Rs.50,000/- should be made only through cheque. The Assessing Officer held that in the absence of money withdrawal statement of bank and cash statement, the assessee's argument is devoid of any merit. Therefore, the cap....
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....l investment of Rs.9,15,000/-. A letter to the effect was filed during the appeal proceedings. In the light of the above, the disallowance of the capital introduced by Sri Syed Armanullah Hussaini is restricted to Rs.4,35,000/-. 12. As regards the next issue is disallowance of Rs.1,02,000/- towards salaries paid to employees, we find that the signatures of the employees were being taken on the day book on the day of disbursement of the salary and a copy of the day book evidencing such payments was produced during the appeal proceedings. The CIT(A) has deleted the addition satisfying himself with the explanation and the evidences produced by the assessee. 13. As regards the next issue is with respect to the addition of Rs.24,000/- towards Director's remuneration, it was submitted by the learned Authorised Representative before the CIT(A) that a resolution was passed on 7.8.2006 by all the directors to give a fixed remuneration of Rs.24,000/- to Sri Syed Asadullah Hussaini at the end of the financial year. Evidence in the form of his signature in the day book for the receipt of the amount in cash on 31.3.2007 was produced before the CIT(A). Further, the above remuneration was inclu....
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....p; 8. The CIT(A) erred in giving relief of Rs.33,400/-, accepting the additional evidence of a purchase order copy of a computer for the amount, which was not produced before the Assessing Officer during the course of assessment proceedings. 9. The CIT(A) erred in deleting the addition of Rs.24,000/- towards director's remuneration, without verifying bank withdrawals for the purpose of paying remuneration to the Director. 10. The order passed by the CIT(A) is not in line with the provisions of Rule 46A of IT Rules, 1962. 15. Before us, the prime contention of the learned DR is that the order passed by the CIT(A) is not in line with the provisions of Rule 46A of IT Rules, 1962, for the following reasons: i) In the case of Sri Syed Armanullah Hussaini, additional evidences had been admitted by CIT(A) without the same being made available to Assessing Officer. ii) In the case of Sri Syed Armanullah Hussaini the CIT(A), deleted the disallowance without sending it back to the Assessing Officer for remand report or placing material before him. iii) in the case of Smt. Ra....