TaxTMI 
TaxTMI 
2022 (8) TMI 446
X X X X Extracts X X X X
X X X X Extracts X X X X
....ravelling expenses Rs. 55,040/- without considering facts, which 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd No. 8 taken by the assessee in that appeal reads as under : "8. On the facts and in the circumstances of the case ld. ACIT erred and ld. 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 10....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceived by the appellant in cash from following 8 persons: 1. Master Love Morani Rs. 75,000/- 2. Smt. Vinita Morani Rs. 1,00,000/- 3. Mr. Lakshya Morani Rs. 75,000/- 4. Ms. Khushi Morani Rs. 50,000/- 5. Mr. N.R. Morani Rs. 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 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r son stated on oath before Ld. AO and accepted the subscription of share capital. Laxman Das Morani Rs. 25000.00 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. 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Nishan Indo Commerce Ltd. (2014)101 DTR 413 (Calcutta High Court). It was held in another case that when two conditions had to be satisfied. First the transaction should be genuine, true and not a camouflaged, and secondly the transaction should be duly recorded in the books of the share applicants. In case any of the two conditions were not satisfied, it would be open to the A.O to act in accordance with the law and make appropriate additions 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, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sted and stated to be of past savings. In case of T. M. Morani he has sold the TVS dealership. All these parties have also invested in Morani Cars and in that case also the amount is invested in cash. So, the capacity of investors is not clearly established. 11. We have heard the rival contentions, perused the submission made before us, orders of the lower authorities and also the decision relied upon on the issue on hand. It is not disputed in 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 applica....