TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 959
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....ing the addition of Rs. 2.50,00,000/- made by the AO. u/s 68 of the IT Act, 1961 following the ration down by the Hon'ble Supreme Court in the case of Lovely Exports (P) Ltd. (2008) 216-CTR-195, ignoring the fact that the identity of the alleged share holders remained unproved and the book value of the shares was Rs. 120/- only as against Rs. 5,000/- per share ? 3. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition by the A.O. on account of. sale of business property below the market price out of the unsold stock relating to year ending on 31/03/2009 ignoring the fact that the transactions were shown at price much below the circle rates ? 4. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 2,83,28,690/- being the land development expenses allegedly paid by the assessee for the work contract stated to have been received from Era Land Mark (India) Ltd. for Rs. 2,97,53,359/- ignoring the facts that no TDS was made on contract payment, and the entire expenses were unverifiable. 5. Whether in the facts and circumstances of the case, the Ld. CIT(A) has erred ....
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....of tax on payments of expenditure more specifically that of development expenditure. Further, the Assessing Officer made addition of Rs. 4,15,250/- related to agricultural income and Rs. 1,48,75,000/- relating to advance from customers for which there was no specific material produced by the assessee. The Assessing Officer also made addition of Rs. 16,82,610/- relating to difference of sale amount in absence of details where the assessee has taken the sale value for unsold stock. The Assessing Officer finally made addition of Rs. 7,29,144/-on account of contravention to Provisions of Section 40A (v)(iii). 6. Being aggrieved by the penalty order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 7. As regards to Ground No. 1, the Ld. DR submitted that the Assessing Officer has applied Circle Rate. The Assessing Officer has given a categorical finding that the assessee could not prove the commercial expediency or distress sale made to a family member. The assessee also could not prove that the property was not worth fetching market value. Smt. Upasna Devi to whom the shop was sold is the widow of Major Naveen Yadav, who is the elder ....
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....ing vacant and the Assessing Officer applied Section 50C of the Act. The assessee transferred the said shop in the assets and not claimed it as stock year after year. The genuineness of the transaction was never doubted by the Assessing Officer, and the buyer Smt. Upasna Devi is the daughter-in-law of elder brother of the Assessee. The Assessing Officer has applied Section 50C of the Act, but the CIT(A) has not given any finding as to why the Cost Inflation Index Benefit has to be given to the assessee. Therefore, it needs verification of the entire issue. Thus, we are remanding back this issue to the file of the Assessing Officer for proper adjudication and decide the same afresh as per law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground No. 1 of the Revenue's appeal is partly allowed for statistical purpose. 10. As regards Ground No. 2, the Ld. DR submitted that the Investigation Wing has given a clear report that these parties are non-existent and are accommodation entry providing Companies. The Ld. AR further submitted that the assessee at no point of time has given the basis as to how the book value of shares w....
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....suspicion and conjectures and on the precedent of Emm Vee Infrastructures. To discredit the valuation of shares as presented by the Assessee, the AO worked out the value of shares as per book instead of taking the value, as per the market value of the assets held by the Assessee Company. Notwithstanding the fact that cogent and copious evidence was filed during assessment to prove the identity, credit-worthiness and genuineness of the transactions, the AO ignored the same on suspicious and fallacious grounds. He failed to repudiate the evidence as filed on behalf of the Assessee. Had only the AO taken the value of assets held by the Assessee on the valuation date at their contemporaneous value, the justification for the share premium would have been self- evident to him. The factum of the investing companies not having handsome income was not of much relevance in face of the fact that both the investing companies had massive reserves and thus had at their command adequate financial resources to support any investments proposed to be made by them. 11.3. The Ld. AR submitted that the various decisions relied upon by the Ld. DR are distinguishable and are not applicable to the facts ....
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....astructures India Private Ltd. as referred to the order of the lower authorities has subsequently been confirmed by the Tribunal for relief in that case as pointed out hereinbefore. In the circumstances, the addition as deleted by the CIT(A) being correct both on facts and on law. 12. We have heard both the parties and perused all the relevant material available on record. We find that the CIT(A) while deleting the addition has held as under:- "7.5 Decision and reasons therefor: I have gone through the assessment order of the AO and considered the written submissions and arguments of the AR. I have also gone through the remand report as well the rejoinder made by the AR. I have also gone through the case laws referred to by the AR. The AO has made reference for enquiry to the Investigation Wing, Delhi. He also obtained a similar enquiry report made by ACIT, Circle, 1, Meerut in the case of Emm Vee Infrastructures India Pvt. Ltd. The AO formed his opinion on the basis of the report of the Investigation Wing, Delhi and of ACIT Circle 1, Meerut without going himself for the verification from the share applicants about the confirmation and the documents submitted by the assessee c....
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....Leasing Finance and Investment Pvt. Ltd. amounting to Rs. 50,00,000 and 8000 equity shares of Rs. 100 each at a premium of Rs. 4,900/- to Shalini Holdings Ltd. The total of issue capital amounted to Rs. 250,00,000 including the share premium of Rs. 245,00,000/-. The assessee Company has furnished details of shares issued to the two Companies. We find merit in the contention of Ld. AR/ Assessee Company that the premium is worth by looking the orders in hand, the assets in possession and the workings of the tear results. The details of the issued capital and the confirmations were provided by the assessee to the Assessing Officer. The copy of Bank Statement of the Share applicants along with ITR acknowledgments, the set of balance sheets were also forwarded to the Assessing officer. The change in the address of Investor Companies were also informed to the Assessing Officer. Thus, the assessee company had discharged the burden by proving the genuineness of the transactions by submitting the bank statements, the creditworthiness of the investors by submitting the set of balance sheets of the investor companies and also proved identity while submitting the details of their income tax ac....
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....Thus, we are remanding back this issue to the file of the Assessing Officer for proper adjudication and decide the same afresh as per law. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Ground No. 3 of the Revenue's appeal is partly allowed for statistical purpose 16. As regards to Ground No. 4, the Ld. DR relied upon the assessment order. The Ld. DR further submitted that the CIT(A) has erred in deleting the addition of Rs. 2,83,28,690/- being the land development expenses allegedly paid by the assessee for the works contract stated to have been received from Era Land Mark (India) Ltd. for Rs. 2,97,53,359/- ignoring the facts that no TDS was made on contract payment, and the entire expenses were unverifiable. 17. The Ld. AR submitted that Ground No. 4 is in respect of addition of Rs. 2,83,23,690/- made on account of land development expenses. The assessee company had a business contract with the Era Land Market India Ltd. for the development of their lands. Full facts with regard to this issue is stated by the AO in the assessment order on pages 17 to 19. The addition has been made by the AO in terms of the alleged non-c....
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.... the correct amount of income which he wanted to be taxed as the real surplus of the assessee from the work contract. He has disallowed he entire expenditure taking the same as payments made above the statutory limit of Section 194C of the Income-tax Act, 1961. The AO has failed to establish from the list of vouchers/details as submitted by the assessee for his verification to show that there was any payment made in excess of Rs. 20,000/-, the statutory limit for TDS. The AO was confused by the book entry adjustment of the purchase of commercial space made by the assessee company from the Era Land Mark Limited. The application of Section 40(a)(ia) has to do nothing on the adjustments for he commercial space. If any payment is made exceeding Rs. 20,000/-, the same could be disallowed. The AO took the advantage of the form 3CD without going to the basic requirements of verifying the books. No details, as stated by the AO, was produced, but he could verify from the books of accounts the amount to be disallowed. The AO has expressed that if at a later stage any payment of TDS is made, the income shall be treated as Rs. 1.65 Crore. The AO has himself noted regarding the submission of fe....