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2013 (5) TMI 173 - AT - Income TaxUnexplained Share Application Money - addition u/s 68 - Held that - The said 18 para of CIT (A) s order is very specific about the addition of Rs. 1 Cr on account of Share Application Money and the same is silent about the other sum of Rs. 25 lacs, the Share Application Money interpreted by the Odyssey Corporation Limited. The said para was drafted in a singular form and it does not indicate both the Share Application Money subscribers. Therefore, this issue involving Odyssey Corporation Limited should be set aside to the files of the CIT (A) for specific adjudication after granting a reasonable opportunity of being heard to the assessee. Accordingly, the grounds raised by the assessee in this regard are allowed for statistical purposes.
Issues:
1. Disallowance of Share Application Money as unexplained cash credits u/s 68 of the Income Tax Act, 1961. 2. Confirmation of interest charged. 3. Appeal by the assessee against the addition of Rs. 25 lacs from M/s. Odyssey Corporation Limited. 4. Appeal by the Revenue against the deletion of addition of Rs. 1 Cr involving M/s. D. Kumar Trading Company Limited. Issue 1: Disallowance of Share Application Money as unexplained cash credits u/s 68 of the Income Tax Act, 1961: The AO disallowed Share Application Money of Rs. 1.25 Cr from two subscribers, stating they were bogus and not genuine. The AO's reasoning relied on a statement by a director admitting to accommodation entries. The CIT (A) allowed the claim of the assessee and deleted the addition of Rs. 1 Cr but not the Rs. 25 lacs. The Tribunal observed that the CIT (A) decision only referred to the Rs. 1 Cr addition, leading to the issue being set aside for specific adjudication. The Tribunal directed the CIT (A) to hear the case involving Odyssey Corporation Limited. The appeal by the assessee was allowed for statistical purposes. Issue 2: Confirmation of interest charged: The appeal did not provide detailed information or developments related to the confirmation of interest charged. No specific judgment or decision was mentioned in this regard. Therefore, no further analysis or outcome can be derived for this issue. Issue 3: Appeal by the assessee against the addition of Rs. 25 lacs from M/s. Odyssey Corporation Limited: The CIT (A) had only directed the deletion of Rs. 1 Cr addition in favor of the assessee, leading to the appeal by the assessee against the non-deletion of the Rs. 25 lacs addition. The Tribunal set aside this issue for specific adjudication by the CIT (A) after granting a reasonable opportunity of being heard to the assessee. The grounds raised by the assessee in this regard were allowed for statistical purposes. Issue 4: Appeal by the Revenue against the deletion of addition of Rs. 1 Cr involving M/s. D. Kumar Trading Company Limited: The Revenue appealed against the deletion of the Rs. 1 Cr addition, arguing that the alleged share applicants were involved in accommodation transactions. The CIT (A) examined the identity, creditworthiness, and genuineness of the transaction, granting relief to the assessee based on relevant court judgments. The Tribunal found no merit in the Revenue's appeal and dismissed it, upholding the CIT (A) decision. In conclusion, the judgment involved multiple issues related to the disallowance of Share Application Money, appeals by both the assessee and the Revenue, and the confirmation of interest charged. The Tribunal provided detailed analysis and directions for each issue, ensuring a fair and thorough adjudication process.
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