TaxTMI 
TaxTMI 
2023 (4) TMI 330
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....for the assessment year 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us: "1.That CIT Appeals-NFAC has erred in both fact and in law in confirming the penalty of Rs.10,95,149/- made by Assessing Officer u/s.271(1)(c) of the Income Tax Act, 1961. 2.That CIT Appeals- NFAC while confirming the penalty has failed to consider the that the appellant is before Hon'ble ITAT on the merits of the case against the CIT(A) order rejecting the Appellant's appeal against assessment order, which is yet to be disposed off. 3. That the assessee craves to add, amend or delete any of the above grounds of appeal during the course of hearing. 4. That the above grounds are without prejudice to each othe....
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....n put to notice about the hearing of the appeal, we find that neither any representation has been made on its behalf nor any application seeking adjournment has been filed before us. Considering the aforesaid facts, we are constrained to dispose off the appeal after hearing the Ld. Authorized Representative (for short 'AR') for the assessee and perusing the orders of the lower authorities. 9. We have heard the Ld. AR and perused the orders of the lower authorities, as well as the order passed by the Tribunal while disposing off the quantum appeal of the assessee company in ITA No.102/RPR/2019 dated 26.07.2022. As stated by the Ld. AR and, rightly so the very basis for imposition of penalty in the present case, viz. (i) addition towards une....
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.... Page 45 of APB clearly evidences the investment made by it towards share application money a/w. source thereof, which, for the sake of clarity is culled out as under: Account Number Name Holding status Customer ID 200013977831 Aayush Steel Co Private Limited Primary holder 10208539 Product Description current account-Indus Blue Branch Address: Vishakhapatnam CDR Hospital, A 3 Raja Complex, Walter Main Road, Vishakhapatnam, Andhra Pradesh-530002 Statement period : 01 June-2014 to 30-June-2014 Statement Frequency : Monthly Average monthly balance required : Rs.5000/- SMS Alert No. Branch MICR Code : 530234001 Branch IFSC Code : INDB0000581 Nomination Registered : No. Date Particulars C....
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....s a partner with M/s Sri Balaji Iron & Steel; Traders, Vishakapatnam and not on the basis of any fresh amount which was found parked in the same during the year under consideration. As regards the adverse inferences drawn by the lower authorities, for the reason that M/s. Abharani Vinimay Pvt. Ltd., a share holder of the investor company had allegedly emerged as a shell company, we are of the considered view that the same by no means would have any bearing in so far the issue in hand is concerned. As stated by the Ld. AR, and rightly so, as the investment towards the share application money is sourced from the 'opening balance' of Rs.89.18 lac in the capital account of the investor company with M/s. Sri Balaji Iron & Steel Traders, therefor....
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....the case in making an addition of Rs.75,000/- u/s. 56(2)(viib) of the Act. As observed by us hereinabove, the assessee company had allotted additional 5000 shares having face value of Rs.10/- each to its existing share holders at a premium of Rs.90/- per share. Accordingly, the assessee company on account of the said allotment had raised an amount of Rs.50,000/- towards share capital a/w. share premium of Rs.4.5 lac. As the FMV of the unquoted equity shares of the assessee company as per sub-rule (2) of Rule 11UA was Rs.85/- per share, therefore, the A.O held the excess amount of Rs.15/- per share so received by the assessee as its income u/s. 56(2)(viib) of the Act. 14. After having given a thoughtful consideration to the contentions of....
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....our considered view, as the provisions of Sec. 56(2)(vii) were introduced as an anti-abuse measure to prevent laundering of unaccounted money in the garb of gifts after abolition of Gift Tax Act, therefore, there is no justifiable reason to depart from the understanding that the said provisions were in the nature of counter evasion mechanism to prevent laundering of unaccounted money. In the case of issuance of bonus shares, allotting of shares to existing shareholders in proportion to their existing shareholding (akin to issue of right shares), there is neither any increase or decrease in the wealth of the shareholder (or of the issuing company) on account of a bonus issue and his percentage holding therein remains the same. What in effect....