AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2018 (3) TMI 1713
X X X X Extracts X X X X
X X X X Extracts X X X X
....nces of the case, the learned CIT(A) has erred in giving relief of Rs. 1,16,100/- out of addition of Rs. 2,85,550/- made by the AO as unexplained expenditure ? ." (d) "Whether in law and on facts and circumstances of the case, the learned CIT(A) has erred in deleting the additions u/s 68 of the IT Act, 1961 of Rs. 8.02,00,000/- and Rs. 2,90,00.000/- made by the AO as unexplained cash Credits in the form of unexplained share capital?." (e) "Whether in law and on facts and circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 36.86.000/- made by the AO on account of unexplained brokerage and commission expense ? ." 3. Briefly stated the facts of the case are that the assessee is engaged in the business as property developers and real estate. The return for the year was filed electronically declaring total income at Rs. 1.04 crores. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 4. During the course of the scrutiny assessment proceedings, the A.O. found that in the immediately preceding assessment year A.Y. 2010-11, the A.O. had made disallowance u/s. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcle- 1(2) v. M/s R.P. Real Estate Pvt. Ltd. In the said matter, this Court has referred to the order passed by Gauhati High Court in [Walford Transport (Eastern India) v. CIT] 1999-240 ITR 902 and Saraswati Housing & Developers v. Additional Commissioner of Income Tax, (2013) 142 ITD 0198, Delhi Bench (G) to hold that once the Appellate Court and the Tribunal have concurrently found that the explanation offered by the assessee as to why the cash payments made to the sellers is acceptable, the same does not involve any substantial question of law as the reasoning assigned and the interpretation applied by the Tribunal and the CIT (Appeals) are duly supported by the judicial precedents. 8. In view of the above, we find no substance in this appeal as it does not involve any substantial question of law. Accordingly, the appeal is dismissed. 10. As the issue is now stand settled in favour of the assessee and against the revenue by the judgment of the Hon'ble Jurisdictional High Court of Chhattisgarh (supra), we do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 1 is accordingly dismissed. 11. The next grievance of the revenue relates ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ers of the authorities below. It is true that the Stamp duty and the registration charges are borne by the purchaser. It is equally true that sometimes it is agreed between the parties that part of the Stamp duty/ registration charges shall be borne by the seller. In the case in hand, we find that the sellers have agreed to bear the charges over and above, the charges mentioned in the deed. We find that after due verification, the ld. CIT(A) has restricted the addition to Rs. 169450/- which calls for no interference. Ground no. C is accordingly dismissed. 19. The next ground relates to the deletion of the addition of Rs. 8.02 crores and 2.90 crores made by the A.O. u/s. 68 of the Act. 20. While scrutinizing the return of income, the A.O. noticed that the share capital which was at Rs. 94.17 lacs as on 31.03.2010 was increased to Rs. 4.92 crores as on 31.03.2011. The A.O. further noticed that the share premium account as on 31.03.2010 was Rs. 3.71 crores and became 10.15 crores as on 31.03.2011. 21. The A.O. asked the assessee to furnish complete details of the persons from whom share capital and share premium has been received. The assessee was further directed to furnish ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e three companies were incorporated nearly the same dates and have common promoters. The A.O. further observed that one of the directors of the assessee company was also the director of the share applicant companies. The A.O. was of the strong belief that the share applicant companies are paper companies of Kolkata. The A.O. questioned the genuineness of the transaction and came to the conclusion that the assessee has not discharged the primary onus cast upon it by virtue of Section 68 of the Act and proceeded by making the addition of 8.02 crores being share application/share premium amount received from the three companies mentioned elsewhere. 26. The assessee strongly agitated the matter before the ld. CIT(A) and vehemently contended that the share applicant companies are investment companies and the promoters were known to the appellant company as one of the director of the appellant company Shri Rakesh Pandey happens to be the director of all the three share applicant companies. It was further explained that the allegation that the assessee has charged hefty share premium is not correct as the book value of the shares of the appellant company is about Rs. 1007 per share. It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the A.O. has demonstrated that the share applicant companies fulfil the requirement of Shell Company. Merely because the share applicant companies are located at Kolkata would not make them ipso facto Shell Company. The A.O. has completely ignored the fact that Shri Rakesh Pandey is also one of the directors of the share applicant companies and is also a director in the assessee company. Therefore, it can be safely concluded that the share applicant companies are not strangers to the assessee company. 30. The undisputed fact is that the entire transactions have been done through banking channels. Complete details along with bank statements of the share applicant companies have been furnished before the A.O. The A.O. has disregarded the direct evidences furnished by the assessee merely on the basis of surmises and conjectures. 31. Surprisingly, the very same share applicant companies have also purchased shares in A.Yrs. 2012-13 & 2013-14. In those years, the A.O. has accepted the transactions in the assessment framed u/s. 143(3) of the Act. For the transactions with the same three parties, the A.O. cannot blow hot and cold in the same breath. 32. An identical issue was co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....46A of the IT Rules, 1962, which was accepted and appeal of the assessee was allowed on the basis of additional evidence adduced by the assessee as also keeping in view of the fact that for subsequent assessment year, the shareholders investment was confirmed during the assessment proceedings. 5. The appeal preferred by the Revenue was further dismissed by the impugned order. 6. Mr. Dubey, learned senior advocate appearing for the respondent submits that apart from the reasons assigned by the respondent, the Tribunal, wherein it has been held that the investment has been verified on the basis of the additional evidence adduced by the assessee, in view of the latest judgment of the Hon'ble Supreme Court in the matter of CIT v. Lovely Exports (P) Ltd. (2008) 216 CTR (SC) 195 : (2008) 6 DTR (SC) 308, investment by the alleged bogus shareholders in a company cannot be regarded as the undisclosed income of the assessee-company, though individual investors can be proceeded against by the Department. 7. Mr. Rajeshwar Rao, learned counsel for the appellant, does not dispute their ratio of law laid down by the Hon'ble Supreme Court in the aforesaid judgmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... companies, investment made by Shri Rakesh Pandey has also been accepted by the Assessing Officer in subsequent assessment years. 36. In the light of the judicial decisions referred to hereinabove vis-à-vis the documentary evidences available on record, we have no hesitation in upholding the findings of the ld. CIT(A). This ground is accordingly dismissed. 37. The last grievance of revenue relates to the deletion of the addition of Rs. 36.86 lakhs made by the A.O. on account of brokerage and commission expenses. 38. The A.O. noticed that the assessee has paid brokerage and commission to various persons totaling to Rs. 36.86 lakhs. The assessee was asked to justify the claim of expenditure by supporting evidences. 39. On receiving no plausible reply, the A.O. disallowed the entire amount of brokerage and commission expenses. Before the ld. CIT(A), the assessee strongly contended that the details of entire brokerage paid have been submitted before the A.O. It was explained that all the payments have been made through account payee cheques and tax has been deducted at source wherever applicable. 40. After considering the facts and the submissions, the ld. CIT(A) ....