2025 (6) TMI 1525
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....preciating that mere filing of confirmation letter, PAN, bank statement will not discharge the assessee's onus in this case where AO has established non- existence of credit worthiness of the applicant companies." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the ratio laid down by Apex Court in the case of Sumati Dayal (1995 AIR 2109) and Durga Prasad More (82 ITR 540) even though the AO has mentioned the circular transaction details in the assessment order." 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made u/s. 14A read with Rule 8D without appreciating that the fact that disallowance of expenditure can be made even when the tax payer in particular year has not earned any exempt income. 5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made u/s. 14A read with rule 8D without appreciating that the fact that in the assessment order, the AO has stated that income on the assets amounting to Rs. 11,71,95,236/- are exempt and therefore, the interest expenses and other expenses on th....
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....ssessee had not earned any exempt income during the year. 3.3. The issue in hand is no longer "res integra" as assessee did not earn any exempt income during the year and therefore, no disallowance can be made u/s. 14A r.w. rule 8D for the year under consideration i.e. AY 2012-13. The amendment brought in Section 14A by way of explanation in this regard is effective from 01.04.2022 i.e. AY 2022-23, as held by the Hon'ble High Court of Delhi in the case of PCIT vs. Era Infrastructure (India) Ltd. [2022] 141 taxmann.com 289 (Del). Considering the facts on record and the said judicial precedent as well as the position of law, we do not find any reason to interfere with the findings arrived at by the ld. CIT(A) who deleted the disallowance made by the ld.AO u/s. 14A r.w. rule 8D. Accordingly, ground no. 1 raised by the revenue is dismissed. 4. On the second issue relating to addition of Rs. 5 crores on account of unexplained income towards share capital and share premium u/s. 68, assessee submitted that it had received share application money of Rs. 20 lacs and share premium of Rs. 4.80 crores from two share subscribers who had invested Rs. 2.5 crores each in the equity share capital....
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....hare capital of the assessee in their respective audited financial statement. For the purpose of establishing genuineness of the transactions, reference was made to bank account statements of the share subscribers. He also noted that there is no cash trail in respect of the impugned transactions so as to hold them as not genuine. Thus, assessee discharged its own as casted u/s. 68 of the Act. Ld. CIT(A) further, observed that while arrive at adverse conclusion, ld. AO did not consider it worthwhile to make further enquires on the details and documents placed on record but, proceeded merely, on the basis of surmises and suspicion. According to him, there is no finding to the effect as to how the alleged unaccounted cash/money of the assessee was routed through various layers to finally reach in the hands of the assessee. According, to him merely because the share subscriber could not be produced before the Ld. AO, it cannot be concluded that the assessee indulged in bogus/accommodation entries by arranging share capital through these two share subscribers. Ld. CIT(A) referred to various judicial precedents including that of Hon'ble Jurisdictional High Court of Bombay in the case of ....
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....e records placed by the assessee of both the share subscribing companies, it can be safely held that the assessee has discharged its initial burden and the burden shifted on the ld. AO to enquire further into the matter which he failed to do so. It is also noted from their audited financial statements that all the investing companies have sufficient own funds available with them to make investment in the assessee. 5.3. From the perusal of paper book and documents placed therein, it is vivid that both the share applicants are (i) income tax assessees, (ii) they are filing their income tax returns, (iii) share application form and allotment letter is available on record, (iv) share application money was made by account payee cheques, (v) details of the bank accounts belonging to share applicants and their bank statements, (vi) in none of the transactions there are any deposit of cash before issuing cheques to the assessee, (vii) all the share applicants having are substantial represented by their capital and reserves. 5.4. In the course of assessment proceeding. ld. AO directed the assessee to produce the subscriber companies along with relevant documentary evidences and details wh....