TaxTMI 
TaxTMI 
2016 (12) TMI 1541
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....he law that no such approval by RBI is required and also documents required by RBI were duly filed by assessee and the copies thereof were duly produced before the CIT(A) and AO. 3. That the Id CIT(A) wrongly observed that there is no approval from SEBI for the issue of such shares when no such approval is required as the assessee company is a private limited company. 4. That learned CIT(A) has erred in law and facts in making a disallowance of Rs. 1,04,36,195 u/s 40(a)(ia). 5. That learned CIT(A) has erred in law and facts in enhancing the income of the assessee by disallowing a sum of Rs. 1,04,36,195 u/s 40(a)(ia) when this issue was not before the AO and without giving any opportunity to the assessee u/s 251(2). 6. That the Id CIT(A) was not justified in making a disallowance of Rs. 10436195 especially when the assessee has suo-moto made the disallowance amounting to Rs. 10292587 u/s 40(a)(ia) and Rs. 29450537 u/s 40(a)(i) in the return of income as per finding of auditor in the Tax Audit Report. 7. The learned CIT(A) has erred in law and facts in confirming the addition ofRs.1741 u/s 14A read with rule 8D of Income Tax. 2. In brief, the relevant facts are that....
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....n of receipt of share capital and, therefore, he invoked the provisions of section 68 of the Act and added the amount of Rs. 3,25,13,110/- as an unexplained cash credit. The CIT(A) has also affirmed the stand of the Assessing Officer primarily on the ground that the assessee has failed to satisfy the ingredients prescribed in section 68 of the Act. 4. In the above background, Ld. Representative for the assessee vehemently pointed out that the impugned share capital has been received from its 100% holding company and that the entire amount was received in terms of the RBI regulations. At the time of hearing, our attention was invited to the respective documents placed in the Paper Book filed, which according to the appellant, clearly demonstrate the nature and source of the impugned credits. Ld. Representative for the assessee has also made a statement at Bar that similar subscription towards share capital made by the holding company in the earlier assessment year has been accepted by the Revenue and there was no justification not to treat the impugned subscription to the share capital as an unexplained transaction. 5. On the other hand, Ld. Departmental Representative has pri....
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..... In fact the observation of the Assessing Officer that the FIRCs issued by the HDFC Bank do not pertain to the year under consideration is contrary to the fact-situation. In the Paper Book filed before us, assessee has placed copies of the three FIRCs issued by HDFC Bank, which clearly evidence that a sum of Rs. 3,25,13,110/- has been received during the previous year relevant to the assessment year under consideration. At page 23 of the Paper Book are placed copies of the relevant forms submitted to the RBI for issuance of 74,915 equity shares of Rs. 10/- each at a premium of Rs. 424/- per share. In the Paper Book assessee has also placed copies of the share certificates issued to the holding company M/s. Becrux Trade & Invest Ltd., Cyprus and also other documents filed with the Registrar of Companies in connection with the issue of share capital. In fact, assessee company has also placed on record the financial statements of holding company Becrux Trade & Invest Ltd., Cyprus at pages 46 to 81 of the Paper Book, which clearly depicts investment made in the assessee company. On the basis of all the aforesaid material, which was very much before the lower authorities, it clearly em....
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....IT(A) is completely misplaced because in the return of income filed, assessee had made a suo-motu disallowance of Rs. 1,05,47,651/- and the same was indeed noticed by the CIT(A) in his order dated 23/02/2012, which has been relied upon by the instant CIT(A). For this purpose out attention was invited to a copy of the order of CIT(A) dated 23/2/2012, rendered in proceedings arising from the order of the Assessing Officer us/ 201(1)/201(1A) of the Act, which have been placed in the Paper Book at pages 430 to 439. In particular, attention was invited to para 7 of this order, wherein it is noted that a provision of Rs. 1,05,47,651/- was made as on 31/3/2008, which has not been claimed as deduction while computing total taxable income. It was, therefore, contended that no further disallowance as done by the CIT(A), was required to be made. Apart therefrom the Ld. Representative for the assessee pointed out that the issue of any disallowance under section 40(a)(ia) of the Act was not before the CIT(A) as no such disallowance was made by the Assessing Officer. It was pointed out that the CIT(A) did not show cause the assessee on this aspect at all before making the disallowance of Rs. 1,0....