2018 (4) TMI 571

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....2012-13 on 26.9.2012 admitting an income of Rs. 41,43,330. During the assessment proceedings u/s 143(3) of the Act, the AO called for various details. After examining the details furnished by the assessee, the AO observed that the assessee has invested Rs. 13,66,33,500 in M/s. Pitti Laminations Ltd by purchase of 34,90,000 shares @ Rs. 39.15 per share. He observed that the income from such investment in shares is receivable in the form of dividend which is exempt from tax. Therefore, according to him, the expenditure debited to the P&L A/c of Rs. 1,38,300 towards payment of listing fee to SEBI for purchase of "Pitti Laminations Ltd" shares; Rs. 7,72,100 incurred towards "professional consultancy fees" paid to "BOB Capital Markets Ltd" for h....

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....e list of 12 shareholders in 'A' category and 8 shareholders in 'B' category. The AO addressed letters to the companies to whom the shares were allotted, in order to verify the genuineness of the share allotment, calling for information u/s 133 (6) of the Act. Only 3 parties and furnished confirmation of the investment while there was no response from other 4 parties. The AO therefore, observed that the assessee company has failed to prove the genuineness of the investment and also the creditworthiness of the Investors and accordingly treated the share capital of Rs. 1,85,00,000 as unexplained cash credit and brought it to tax. Aggrieved, the assessee preferred an appeal before the CIT (A), who deleted the additions made u/s 68 of the Act a....

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....ness need to be verified by the AO. Further, the submission of the assessee that Ms. Pitti has offered this income in her hands and therefore, bringing the same into tax again in the hands of the company would amount to double taxation of the same amount also needs verification. We, therefore, deem it fit and proper to remit this issue to the file of the AO for verification of the assessee's claim in accordance with law. The assessee's appeal is therefore, treated as allowed for statistical purposes. 8. The Revenue has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in Law, the CIT (A) erred in deleting the disallowance made u/s 14A by holding that assessee did not earn any exempt income.....