TaxTMI 
TaxTMI 
2018 (2) TMI 91
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....I erred in holding that subscription expenses of Rs. 2,15,357/- is allowable, without appreciating the fact that during the course of assessment the assessee failed to establish that this expenditure was incurred wholly and exclusively for the purpose of business." 2.1. Brief facts of this issue are that the expenditure on account of subscription amounting to Rs. 2,15,357/- has been disallowed which, inter alia, included Rs. 1,00,000/- paid to National Stock Exchange being annual subscription for assessment year under consideration and Rs. 1,15,357/- paid to 'The Conclave', a business club, of which director of the assessee was a member. The AO disallowed the expenditure on the ground that the assessee did not file details of these expen....
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.... urged before the bench to confirm the order of AO as the assessee did not file details of these expenses. He also submitted that subscriptions were in the nature of contributions made to some parties which was of non-business expenditure. Hence, the order of Ld. CIT(A) ought to be reversed and that of the AO be restored. On the other hand, the Ld. Counsel for the assessee submitted that the finding of the AO is self contradictory. If the assessee had not furnished the details, then on what basis the AO concluded that expenditure was for non-business purposes. In absence of the details furnished, AO could not have ascertained the purpose for which the amounts were paid. In this regard he submits that both the subscriptions were paid for bus....
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.... the identity, genuineness of transaction and creditworthiness of the loan creditors, which are precondition to prove the genuineness of any amount credited in the books." 3.1. Brief facts of this issue are that the assessee had obtained loans from nine parties listed on page no. 4 of the assessment order. The AO issued notice u/s. 131 of the Act to five parties. Among them three notices were returned unserved with the postal remark "not found/not known" and remaining two parties did not appear. The AO asked for explanation of the assessee. Assessee has filed written submission before the AO but he has opined that creditworthiness and genuineness of the party have not been established. Accordingly, he treated the loans of Rs. 66,52,649/-....
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....r lending. As long as sources of fund is properly explained, no adverse inference can be drawn merely because of amount of loan is higher than income / net assets in the year. The companies, who have given loan to the appellant, are all having balance sheet with substantial assets. Thus, they were having funds more than sufficient to advance loan to the appellant. The assessing officer's assertion that they were jama kharchi companies is an unsubstantiated allegation. While the assessing officer may have such suspicion, he has not brought out any material on record to back such an allegation. As held in the decision in the case of CIT vs. Ram Narain Goel 224 ITR 180 (P&H) and various other cases, suspicion, however strong, cannot substi....