TaxTMI 
TaxTMI 
2019 (11) TMI 646
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.... by AO under section 143(3) read with section 153C of the Act. Actually, in ITA No. 5584/Mum/2017, the addition under challenge is amounting to Rs. 4,07,48,957/- as against the order passed by AO under section 143(3) of the Act. Following are the grounds in respective appeals:- In ITA No. 5584/Mum/2017 "(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs.l 4,07,48,976 on account of commission income stating that the said commission income has already been included in assessee's income as miscellaneous income?" In ITA No. 3205/Mum/2019 "(i) On the facts and in the circumstances of the case and in law, the ld CIT(A) was justified in deleting the addition of Rs. 3,09,50,705/- on account of commission income stating that the said commission income has already been included in assessee's income as miscellaneous income." 3. Briefly stated facts are that the AO while completing the assessment under section 143(3) of the Act completed the assessment under section 143(3) of the Act and computed commission of bogus purchases contending that the assessee has earned commission of Rs. 97,98,271/....
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....stated that Shri Shah charges commission in this regard, the rate being 0.30% and that he promised to give him half share in the commission but never kept his promise. The AO has estimated the commission income @1% since the appellant company was found to be involved in providing accommodation entries by way of bogus sales and purchase and by way of giving entries of investment and advances. 6.4.2 I find that the rate of 1% adopted by the AO is reasonable, considering that the commission made as reflected in the seized documents in the case of Shri Shrish Shah is in the rate of 2%. I am also inclined to agree with the AO that the commission income should be considered in respect of the sales and the new investment during the year, as done in the order under section 153C of the Act and not in respect of the purchase. I find that merit in the submission of the appellant that so far as the sale is concerned, the rate 1% should be considered in respect of the sales of Rs. 56,47,72,218/- made to outside parties, since no such commission would be received on making sales to group/ related concern like, mobile Telecommunication. Further, I find that the appellant has shown miseal....
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....income, sundry debtors written off and profit on sale of unquoted shares, the assessee company had credited miscellaneous income of Rs. 4,07,18,363 to its profit and loss account and since all loans and advances given and share held by the assessee company are not genuine, the income derived there from is also not genuine and represented the commission income accrued to the assessee. We also noted that apart from foreign exchange fluctuation other components of other income aggregating to Rs. 3,66,32,003/- credited to profit and loss account represented commission income and CIT(A) computed the assessable commission income at Rs. 3,10,06,562/- being 1% of the aggregate of new investments and sales to outside parties and held that since the assessee company has already offered income of Rs. 3,66,32,003/-, which is more than the commission income, no further addition can be made in the hands of the company. Hence, we find no infirmity in the order of the CIT(A). Both the appeals of Revenue are dismissed on this issue. 7. Coming to the assessee's appeal in ITA No. 5207/Mum/2017, the learned Counsel for the assessee stated that he is not interested in prosecuting the following groun....
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....have bene provided on which salary and wages and staff welfare expenses of Rs. 262,38,008.- have been incurred and receipt of Rs. 263,36,743/- has been shown against this head. I find that the appellant has shown profit of 0.375% which is very low and points of inflation of expenses. Therefore, some disallowance out of such expenses is found to be justified. However, I find that the disallowance @30% is very high and the same is restricted to 10% of such expenses, i.e. to Rs. 26,23,800/-. Accordingly, the balance addition of Rs. 42,57,602/- is deleted." Aggrieved, against the restriction at 10% assessee came in appeal before Tribunal. 12. We have also heard rival contentions and gone through the facts and circumstances of the case. We noted that AO as well as CIT(A) has just on the basis of presumption made disallowance just on adhoc basis. No reason whatsoever is cited, hence, we are of the view that this disallowance confirmed by CIT(A) on adhoc basis of Rs. 26,23,800/- is without basis. Hence, we delete the disallowance and allow the appeal of the assessee. 13. The next issue in this appeal of assessee is against the order of CIT(A) confirming the action of the....
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....rt has held as under: We do not consider it necessary to examine all the decisions in extenso because we are of the opinion that the fee paid to the Registrar for expansion of the capital base of the company was directly related to the capital expenditure incurred by the company and although incidentally that would certainly help in the business of the company and may also help in profit-making, it still retains the character of a capital expenditure since the expenditure was directly related to the expansion of the capital base of the company. We are, therefore, of the opinion that the view taken by the different High Courts in favour of the revenue in this behalf is the preferable view as compared to the view based on the decision of the Madras High Court in Kisenchand Chellaram (India) (P.) Ltd.'s case (supra) . We, therefore, answer the question raised for our determination in the affirmative, i.e., in favour of the revenue and against the assessee. The above said decision has been followed in the case of Brooke Bond India Ltd. vs. CIT 91 TAxmann 26 (SC) and it has been held that, the expenditure incurred of issuing share to increases its share capital by ....
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....premium 1560000000 Share premium 1273876500 Total 3778857500 On going the details of closing share capital, it is seen that the share capital includes bonus shares of Rs. 69,00,00,000/-. The share capital on account of bonus share cannot be treated as unexplained credit under section 68 as the same is out of reserve and surplus. Therefore, the addition of Rs. 69,00,00,000/- under section 68 of the Income-tax Act 1961 is mistake apparent from the records and rectified under section 154 of the Income-tax Act 1961 as under: - Total income as per order u/s 143(3) r.w.s 153C dated 22nd March 2016 351,47,83,330 Less addition on account of bonus shares -69,00,00,000 Revised total income 282,47,83,330 16. In view of the above, it was contended that the issued share capital of the assessee company was increased from Rs. 99,31,430/- to Rs. 107,01,23,875/- in the corresponding period the increase in issued share capital of Rs. 94,59,81,000/- consisted of issue of bonus share capital of Rs. 80,42,11,445/-. The details of issue of bonus share capital is as under: - Date of issue of bonus shares Amount 26-03-2010 11,42,11,445 13.07.2010....