2015 (10) TMI 2494 - ITAT CHANDIGARH

Addition u/s 68 - share capital and share premium received from non-resident company - Held that:- In the present case, assessee company had received money on allotment of shares from M/s Glacis Investment Limited through banking channel and furnished complete details of the shareholder, no addition would be made under section 68 of the Act, in the absence of any positive material or evidence to indicate that the shareholder company was benamidar or fictitious company or that any part of the share capital represented the assessee's own income from undisclosed sources. The assessee on the basis of the documentary evidence on record has been able to prove that Non Resident Company i.e. M/s Glacis Investment Limited was an existing company and that the shareholder company made investment in the assessee company would prove that assessee received genuine share application money from this non-resident company. Thus, assessee had established the identity of the shareholder company and that transaction was genuine. The assessee has also proved the credit worthiness of the shareholder company, therefore, authorities below were not justified in making the huge addition against the assessee. We are of the view that assessee has been able to prove the identity of the creditor which is not in dispute, credit worthiness of the shareholder company and genuineness of the transaction in the matter. Therefore, addition under section 68 of the Act is wholly unjustified. - Decided in favour of assessee

Disallowance of amount paid for up- gradation of Power Station required for supply of power to the assessee company - Held that:- Assessee has explained the scheme formulated by Ministry of Textiles, Government of India, the aim of the scheme of Integrated Textile Parks was to encourage group of entrepreneurs to come together and establish Integrated Textile Parks with world class infrastructure under a public private partnership frame work. Therefore, the scheme in the case of the assessee was intended to encourage the group of entrepreneurs to come together and establish Integrated Textile Parks with world class infrastructure under a public private partnership frame work and the grant-in-aid was given for setting up of the industries/textile parks in the State, therefore, the grant-in-aid could not be considered as a payment directly or indirectly to meet any portion of actual cost and thus, it would fall outside the purview of Explanation 10 to Section 43(1) of the Act. All the decisions relied upon by ld. counsel for the assessee are on identical point and support the contention of the assessee that assessee is entitled for depreciation on the same amount.

Considering the above discussion in the light of the scheme formulated by the Government of India we set aside the orders of authorities below and direct them to grant depreciation to assessee on the amount of ₹ 3 Cr being the capital expenditure. - Decided in favour of assessee

Disallowance of depreciation - Held that:- Expenditure 10 to Section 43 (1) is not applicable in this case because the scheme of the Government was to encourage group of entrepreneurs to come together and establish integrated textile parks with worth class infrastructure under a Public Private partnership frame work. The grant-in-aid was granted to the entrepreneurs to develop textile parks under the scheme. Following the reasons for decision on ground No. 2 above, we set aside the orders of authorities below and direct the authorities below to grant depreciation to the assessee without reducing the grant received from Ministry of Textiles.- Decided in favour of assessee

Disallowance of proportionate interest on interest free advances - Held that:- The details furnished by the assessee show that assessee was having sufficient funds to make advances out of its own sources. The details of capital advances have also been filed which according to the ld. CIT(Appeals), were not filed before the authorities below. The authorities below should also give a finding whether amounts are advanced for commercial exigencies. Therefore matter should be remanded to Assessing Officer. - Decided in favour of assessee for statistical purposes.