TaxTMI 
TaxTMI 
2022 (2) TMI 473
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....th some information filed by the assessee and completed the assessment making various additions at Rs. 1,68,16,749/- and assessing the loss at Rs. 1,19,78,664/- in the following manner: Total Loss (-) Rs. 2,87,95,413/- Add: Addition u/s 68 on A/c of share application money Rs. 1,31,50,000/- Add: Disallowance out of Commission Expenses Rs. 19,70,099/- Add: Disallowance of legal and professional exp. Rs. 16,08,000/- Add: Interest proportionately disallowed Rs. 88,650/- Total Loss Assessed Rs. 1,19,78,664/- 3. Aggrieved assessee preferred an appeal before the Ld. CIT(A) and partly allowed. 4. Now revenue is in appeal before this Tribunal raising following grounds of appeal: "On the facts and in the circumstances of the case, the CIT(A) has erred in : 1. Whether on the facts and in the circumstances of the case the Ld. CIT(A) was justified in deleting addition of Rs. 1,3150,000/- u/s 68 of the Income Tax Act 1961 on account of share capital received by holding that identity, creditworthiness and genuineness of the transaction is established. 2. Whether on the facts and in the circumstances of the case the Ld. CIT(A) was justified in deleting the addition of Rs. 19,7....
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..... Snehlata Rupramka, it is observed that confirmation along with PAN was produced before the AO. Copy of bank account was also produced before the A.O. During appeal, copy of return of this person has been filed. It is observed that Smt. Snehlata Rupramka has shown total income of over Rs. 15,00,000/- in A.Y. 2009-10. Further, it is also seen from her bank account that Smt. Snehlata was maintaining huge balance in the bank account from which the share application money has been given. Furthermore, there is no cash deposit in the bank account and there are frequent transactions other than the transaction in question during the period under consideration. Regarding the genuineness of transaction, it is observed that the money was routed through banking channel and the applicant has confirmed the transaction. In view of these facts, the identity and creditworthiness of this person and genuineness of the transaction stands proved. 8.6 In respect of share application money of Rs. 3,00,000/- received from received from Smt. Anjali Baijal, it is observed that the appellant has filed confirmation and copy of passport which proves the identity of Smt. Baijal. Regarding creditworthiness, t....
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....A No. 413/Ind/2012. A perusal of the orders of CIT(A) and ITAT shows that the same are based on the same evidences as submitted by the appellant in this case. 8.11 In totality of facts and circumstances, it is concluded that the appellant has established the identity and creditworthiness of the three persons and genuineness of the transaction. Therefore, the addition made by A.O. is not sustainable. Further, as in the identical circumstances, the A.O., after examination, has accepted the share capital received from Shri Jayvant N Patel and other persons in A.Y. 2007-08, the addition made in assessment year under consideration becomes unjustified and cannot be sustained. The addition of Rs. 1,31,50,000/- made u/s 68 IS, therefore, deleted. 7.2. From perusal of the above finding as well as documents placed on record in the paper book, we find that the share applicants namely Shri Jayvant N. Patel & Smt. Anjali Baijal are non-resident Indian having sufficient source of income. Share application money has been given through NRE account. All relevant details including Passport, proof of earing income outside India, bank statements, support the finding of Ld. CIT(A). It is also eviden....
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.... industry, they had to pay commission to various agents for procurement of raw materials. Likewise, they had to pay commission to agents for procuring sales. Details of these commissions were furnished which showed that details of only Rs. 26,18,864/ - was provided. On being confronted, the appellant submitted that expenditure on commission and discount paid during the year amounted to Rs. 52,26,858/-. Details of discount allowed on sales amounting of Rs. 26,07,995/- were furnished. The A.O. noted that the appellant had merely furnished the list giving name of parties and amount totaling Rs. 26,07,995/- of discount given and neither full address nor details of sales made in respect of discount was furnished. The A.O. noted the appellant had tried to disguise the payment of 26,70,994/- as discount. As TDS had been deducted on commission payment of Rs. 32,56,760/- only out of the total payment of Rs. 52,26,858/and no TDS was deducted on the balance amount of Rs. 19,79,098/-, disallowance ss]« 40(ia) was made. 8.1 We further find that before the ld. CIT(A) assessee made following submissions: "It is worth mentioning here that during the year under consideration the total manu....
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.... 524, SC 3. Banshidhar Onkarmal vs. CIT (1953) 23 ITR353, HC Orissa 4. Commissioner of Income Tax Vs. JDS ApperalsPvt. Limited Source (2015) 273 CTR (Del) 1 : (2015) 113 DTR (Del) 137 : (2015) 370 ITR 454 (Del) I HIGH COURT OF DELHI" 8.2 We further find that the ld. CIT(A) after considering submissions made by the assessee deleted the addition observing as follows: 9.3 It is observed from schedule 7 annexed to the audited Final Accounts that during the year under consideration the total manufacturing and other expenses included Rs. 52,26,858/ - on account of Commission and Discount. The details furnished to the A.O. showed that Commission and brokerage on sales was Rs. 26,18,864/- and Discount on sales was Rs. 25,99,994/-. The AO while disallowing the amount of Rs. 19,70,098/- drew an inference that the amount shown under the head "commission & Discount Expenses" amounting to Rs. 52,26,858/- did not include any amount of discount but represented commission only. This assumption was based on the TDS amount which the appellant had deducted. At page 3 of his order, the A.O. has himself mentioned that the appellant had submitted the details of Rs. 52,26,858/ - of Commission and ....
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....ing, we note that brief facts relating to this issue are discussed by the Ld. CIT(A) in para 10.1 of the impugned order which reads as follows:- 10.1 The A.O. observed that legal & professional expenses of Rs. 22,97,095/- were debited to P&L A/c as against Rs. 15,42,092/ - in the previous year. On being asked, the details were furnished by the appellant. In respect of 6 persons aggregating to Rs. 16,08,000/-, the AO found that the appellant had not furnished the purpose of payment to these persons. No copies of contracts with these parties were furnished. Neither PAN nor addresses are given. The A.a. concluded that the appellant could not substantiate the expenditure. Therefore, legal and professional expenses of Rs. 16,08,000/- were disallowed. 9.1 We further find before Ld. CIT(A) assessee made detailed submissions along with details of income Tax Return of the professionals who offered the alleged amount to tax and the same has been reproduced in the impugned order which reads as follows: "The details required by the Ld AO was submitted during the proceedings of the assessment to the extent demanded by him. Further details were not submitted to him as they were not asked by....
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.... HC) (FB) * Hero Cycles (P) Ltd vs Commissioner of Income-tax (Central) Ludhiana [(2015) 63 taxmann.com 308(SC)]" 9.2 We further find that ld. CIT(A) after appreciating the facts of the issue relating to legal and professional charges, commercial expediency and the settled legal principles deleted the disallowance of legal and professional charges of Rs. 16,08,000/- observing as follows: 10.3 It is observed that the details required by the AO were submitted during the assessment proceedings to the extent asked. From the order sheet maintained by the A.O. and produced by the appellant, it is observed that further details on which the addition is based were never asked by the AO. It is also observed that the appellant had produced books of accounts before the A.O. and no deficiencies have been found therein by the AO. In the circumstances, the A.O.'s finding that PAN was not produced by the appellant is not found to be reasonable. Further, the AO's reason that no written agreement with parties was produced is not material as such work in many cases is got done without written agreements. In any case such detail was never asked by the A.O. Further, another basis of disall....