TaxTMI 
TaxTMI 
2026 (1) TMI 1473
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....collected by A.O. u/s 133(6). 3) The additions made u/s. 41(1) are bad in law and wrongly facing onus on the Assessee. 4) Ld. CIT (Appeal) has erred in confirming addition of Rs. 19,19,890/- u/s. 68 received in the earlier year as share application money Ignoring the confirmation letter produced. 5) The Appellant craves leaves to add amend alter or withdraw any of the grounds of Appeal as and when occasions demands. 6) The Appellant craves leaves to produce such further evidence to substantiate the case as and when occasions demands. 3. Brief facts of the case are that the assessee is a Private Limited Company engaged in the business of providing IT and IT enabled solutions by integrated technology. Income of Rs.4,51,048 declared in the return of income for A.Y. 2012-13 furnished on 29.09.2012. After the case being selected for scrutiny and valid notices u/s. 143(3) and 142(1) of the Act served on the assessee, ld. Assessing Officer carried out the proceedings. Various information were called for by the ld. Assessing Officer were furnished to the possible extent by the assessee and certain information were also called by the Assessing Officer ....
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....M/s. EBZ Online Private Limited. Ld. Assessing Officer alleged that the outstanding liability of Rs.37.50 lakh pertains to F.Y. 2004-05. However, the documents placed at pages 79 to 96 clearly demonstrate that the alleged liability of Rs.37.50 was credited during F.Y. 2010-11 on 09.06.2009 when the assessee company entered into the contract with M/s. EBZ Online Private Limited for purchase of Business of Customers, Contracts and Hardware and amount of Rs.37.50 lakh was accounted as capital work in progress payable to M/s. EBZ Online Private Limited. Copy of business Transfer Agreement is also placed on record. The documents also states that the amount is not forgone by the software supplier EBZ Online Pvt.Ltd. and is still payable to them. Considering the fact that the transaction took place during F.Y. 2009-10 and the assessment year under consideration is 2011-12, clearly indicates that even the limitation period of three years did not expire and the very basis of the addition made by the Assessing Officer of the transaction pertains to A.Y.2004-05 is factually incorrect and that the liability of making the payment to M/s. EBZ Online Private Limited is still active and therefore ....
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.... Explanation 2.-For the purposes of this sub-section, "successor in business" means,- (i) where there has been an amalgamation of a company with another company, the amalgamated company; (ii) where the first-mentioned person is succeeded by any other person in that business or profession, the other person; (iii) where a firm carrying on a business or profession is succeeded by another firm, the other firm; (iv) where there has been a demerger, the resulting company." 11. On going through the above provision, we have to find that whether the alleged liability ceased to exist. In the instant case, ld. AO called for the information from Shree Suvarna Sahakari Bank Ltd. u/s. 133(6) of the Act to which reply was received directly from the liquidator of Shree Suvarna Sahakari Bank Ltd. and for the sake of completeness reply dated 30.01.2015 is reproduced below : 12. Now the contents of the letter issued by the liquidator of Shree Suvarna Sahakari Bank Ltd. remains uncontroverted and that the claim of the bank against the assessee company for the outstandings has increased to Rs.3,31,24,968.86 as on 31.12.2014 and is still active and recovery act....
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....atisfactory: Provided also that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 15. On going through the above provision, we note that section 68 can be invoked on the credits during the previous year appearing in the books of account which have been credited/received during the year the assessee is unable to explain the nature and source of such sum to the satisfaction of the Assessing Officer. Before us, ld. Counsel for the assessee has contended that alleged sum has not been received during the year and in support reference has been made to the Audited Balance sheet placed at pages 44 to 70 of the paper book and precisely to Note No.2 to Balance sheet placed at page 47 which shows that the share application money pending allotment at Rs.19,19,890 is the opening balance and no fresh amount under this head has been received during the year. Therefore, in absence of any amount received during the year towards share application money pending allotment, we are of the considered vie....