TaxTMI 
TaxTMI 
2015 (9) TMI 490
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....made by the assessing officer on account of unexplained share capital under section 68 of the IT Act, 1961 treating the same as income from undisclosed sources without appreciating the fact that the assessee has failed to discharge its onus to prove the credit worthiness of company providing share capital and also the genuineness of the transaction. 3. On the facts and in the circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 3,12,000/- made by the assessing officer on account of disallowance of 50% out of salary expenses on adhoc basis. 4. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal." 3. Vide ground no. 2 grievance of the d....
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....lowed 50% of the salary expenses and made the addition of Rs. 3,12,000/- 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the assessee had furnished following documents to prove the existence of the parties and genuineness of the transactions: (i) Name and address (ii) Share application Form (iii) Permanent Account Number (iv) Detail of Bank Account from where money is paid along with copy of bank statement (v) Copy of Acknowledgement of Income Tax Return (vi) Confirmation from the subscribers (vii) Copy of Balance Sheets of Companies 5. It was further submitted that the assessee furnished the affidavit from all the three companies confirming the transaction which included th....
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....e transaction. However, instead of personally appearing they had choosen to respond via letter posted directly to the AO and if it was necessary then the AO should have issued notice u/s 131 of the Act but he had never issued the notice u/s 131 of the Act and made the addition of Rs. 44,00,000/-. It was further submitted that the addition cannot be made with regard to the share capital money in the hands of the assessee company if the identity of the investor is proved. The reliance was placed on the following case laws: - CIT Vs M/s General Exports Credits Ltd. in ITA No. 880/2006 (Del) - CIT Vs Raghvi Finance Ltd. ITA 1264/2010 (Del HC) - CIT Vs Orbital Communications (P) Ltd. ITA 989/2010 (Del. HC) - CIT Vs Ultratech Finance ....
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....was nothing but bogus introduction by way of accommodation entries. The ld. CIT(A) categorically stated that all the three investors had sent their letters to the AO along with their confirmations, share application form, copy of ITR acknowledgment, copy of balance sheet, bank statement. He also observed that the assessee had also requested the AO for issuing summons for personal appearance to all investors as it was not within the assessee's power to enforce their attendance. According to the ld. CIT(A), the assessee had discharged the onus cast upon it and provided all the essential ingredients to prove genuineness, creditworthiness and identity of the investors as required u/s 68 of the Act. The ld. CIT(A) deleted the addition of Rs.....
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....avita as a Director. It was accordingly submitted that the confirmation furnished by the assessee was not reliable. The ld. DR also stated that the assessee could not discharge the onus cast upon it, to prove the identity and creditworthiness of the share applicants and genuineness of the transaction. Therefore, the AO rightly made the addition u/s 68 of the Act and the ld. CIT(A) was not justified in deleting the impugned addition. As regards to the disallowance out of salary, the ld. DR reiterated the observations made by the AO. 11. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that all the requisite documents and information asked by the AO....
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....he given addresses. The assessee also did not furnish the change of address, if any, therefore, the onus cast upon the assessee was not fully discharged. In our opinion the ld. CIT(A) was not justified in deleting the addition made by the AO particularly when the assessee failed to produce the concerned parties. At the same time, it also appears that the AO without considering the documents furnished by the assessee in the form of share applications, copy of bank account from where money was paid, copy of acknowledgment of Income Tax Return, copy of the balance sheet etc. and made the addition. It is also noticed that the confirmation furnished by the assessee were doubt full which is evident from the confirmation placed at page no. 28 of t....