TaxTMI 
TaxTMI 
2022 (8) TMI 446
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.... is unjustified and liable to be quashed. 4. On the facts and in the circumstances of case ld. ACIT erred and ld. CIT (A) sustained disallowing the payment of rent of Rs. 3,00,000/- without considering the submission of assessee, which is unjustified and liable to be quashed. 5. On the facts and in the circumstances of case ld. ACIT erred and ld. CIT (A) sustained, in adding Rs. 8,64,000/- by disallowing interest wrongly alleging that interest was not charged on some advances without considering the submission of assessee, which is illegal, grossly unjustified and liable to be deleted. 6. On the facts and in the circumstances of case ld. ACTT erred and ld. CIT (A) sustained, in adding Rs. 6,00,000/- by disallowing interest wrongly alleging that capital expenses were incurred out of interest bearing funds, which is illegal, grossly unjustified and liable to be deleted. 7. On the facts and in the circumstances of case ld. CIT (A) erred in partly disallowance of salary of Rs. 4,56,583/- out of total disallowance of Rs. 9,21,527/- made by AO, which is unjustified and liable to be deleted. 8. On the facts and in the circumstances of case ld. ACIT erred and ld. CIT (A) sustaine....
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..... CIT(A) sustained, in adding Rs. 18,25,000/- u/s 68 out of share application money without considering evidences, which is unjustified and liable to be quashed." 5. The fact related to this appeal is that the assessee company is an authorized dealer of Hero Brand of two wheelers and engaged in the sale and service of two wheelers. It filed its return of income on 29.09.2011 declaring total income of Rs 48,33,130 and the assessment was completed u/s 143(3) at assessed income of Rs 1,20,48,981/-. Against various disallowances made by the Assessing officer which have been sustained by the ld CIT(A). The assessee has filed an appeal before us. In the assessment proceeding the ld. AO noted that the assessee has received share application money from various persons in cash details of which is as under:- S. No. Name No. of Share Allotted Issue Price of the shares Fresh Share Capital introduction during FY 2010-11 Cheque Cash 1 Master Love Morani 7500 10 75000 0 75000 2 Smt. Vinita Morani 10000 10 100000 0 100000 3 Mr. Lakshya Morani 7500 10 75000 0 75000 4 Ms. Khushi Morani 5000 10 50000 0 50000 5 Mr. N.R. Morani ....
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..... 9,25,000/- 6. Smt. Durga Devi Morani Rs. 1,75,000/- 7. Smt. Laxman Das Morani Rs. 25,000/- 8. Shri T.M. Morani Rs. 5,00,000/- During the course of appellate proceedings, the appellant insisted that it should be provided copy of the statements of the share applicants recorded by the AO. The copies of the statements were provided to the appellant but no further submission has been made on this issue by the appellant but no further submission has been made on this issue by the appellant after receipt of the copies of the statements. As far as the credit of Rs. 1 lac received from Smt. Vinita morani is concerned, I am of the considered view that the no addition was required to made by the AO in respect of the amount of Rs. 1 lac received from Smt. Vinita as she had invested total sum of Rs. 8,70,000/- in the share capital of the appellant company. Out of which, sum of Rs. 2,70,000/- was invested in cash and the remaining amount was paid through cheque. When the AO has accepted the nature and source of credit of Rs. 7,70,000/- received from Smt. Vinita Morani as explained satisfactory then there was no justification for not accepting the nature and source of remaining credi....
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....umstances accepts the genuineness if deposits were in cash. T.M. Morani Rs. 500000.00 Confirmation was filed. He is regular income tax payer and man of high means. He appeared and stated on oath, explained the subscription of share capital. Ld. AO accepted the creditworthiness. Only genuineness was in doubt due to cash transaction. Ld. AO in no circumstances accepts the genuineness if deposits were in cash. Your honour, in most of the case identification and creditworthiness were proved as held by assessing officer himself page no 21 and 22 of AO order. Ld AO did not accepted genuineness, being the receipts were from cash. He added all the amount treating cash deposit as unlawful, without having held where were it is unlawful. I fully accept and endorse the version of AO that assessee is required to prove the identity of payer, genuineness of transactions and creditworthiness of lender. Assessee by producing almost all the payers and in turn they have accepted the transaction taken place with assessee was able to establish the genuineness. Had only bank transaction is sacrosanct for genuineness then law makers categorically prohibit the cash receipts like section 40A(3), 269S....
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....dditions if justified and mandated by Statute (AY. 200 1-02). CIT vs. Kansal Fin cap Ltd. (2014)221 Taxman 151 (Mag.) (Delhi High Court). Your honour, in all the above cash credit against share application money, assessee produces, confirmations, Name & Addresses of depositors, PAN and bank accounts of them and the most important all have been produced and stated on oath and confirm the transaction. In view of above the addition based on preponderance of human probability is unjustified and' liable to be quashed." 9. In respect of this ground the ld. AR of the assessee relied upon the written submission filed by him as extracted here in above. He also submitted that against the share application money, assessee produces the depositor, confirmations of each share applicant placed on record, PAN of depositors filed, bank account details placed on record and also statement on oath were recorded for all the share applicant. All share applicant has confirmed to have made the investment in the assessee company. Thus, the ld. AR of the assessee submitted that the primary burden as per the provisions of section 68 is established as affirmation of the all the share applicant is made.....
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....this case that all the 8 share applicants' compliance to confirm the credit worthiness were made. The same is tabulated here in below: Sr. No. Name of share applicant Amount Rs. Documents submitted 1 Master Love Morani 75,000/- Confirmation and statement of father to prove genuineness and creditworthiness. 2 Smt. Vinita Morani 1,00,000/- Ld. CIT(A) has already accepted her investment and the same is not disputed. 3 Mr. Lakshya Morani 75,000/- Confirmation and statement of father to prove genuineness and creditworthiness. 4 Ms. Khushi Morani 50,000/- Confirmation and statement of father to prove genuineness and creditworthiness. 5 Mr. N.R. Morani 9,25,000/- The applicant passed away, his son appeared and stated on oath. He submitted that his father was assessed to tax and due to his illhealth he closed the business and off loaded the business and invested the sum in the assessee company. 6 Smt. Durga Devi Morani 1,75,000/- The share applicant expired and her son stated on oath before ld. AO and accepted the investment made. 7 Smt. Laxman Das Morani 25,000/- Confirmation was filed. He is regular tax payer. He appeared in person and stated on oath and a....