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2025 (4) TMI 645 - AT - Income TaxAddition on account of cash credit in the form of shares - CIT(A) deleted addition - HELD THAT - We find that the issue under consideration is squarely covered in favour of the assessee and CIT (A) has rightly deleted the addition made by the AO. No infirmity in the order of the CIT (A) and also the matter is squarely covered by the aforesaid decision in the case of M/s. Mauria Udyog Ltd. 2019 (1) TMI 204 - ITAT DELHI Addition on account of bogus expenses - CIT(A) deleted addition - HELD THAT - AO has not brought on record any material evidence related to any such material which was transported to Kandla and which formed part or the total turnover of the appellant company not to talk of lack of any evidence that any material was kept in those godowns or that payment of any nature or purpose Was made to M/s Trinity Shipping Allied Services Pvt. Ltd. Addition on account of payment of rent to TSASPL is not sustainable. AO has also not brought on record any material for making further addition on ad hoc basis. We find cogency in the submissions of the ld. AR of the assessee as well as ld. CIT (A) has rightly dealt with the issue under consideration. Accordingly we do not find any infirmity in the order of the CIT (A) which is upheld. Appeal of the Revenue is dismissed.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS 1. Addition of Rs. 3,00,00,000/- as Cash Credit in the Form of Shares Relevant Legal Framework and Precedents: The issue revolves around Section 68 of the Income-tax Act, 1961, which deals with unexplained cash credits. Court's Interpretation and Reasoning: The Tribunal noted that the CIT(A) had deleted the addition based on similar facts and circumstances in related group companies' cases, which were upheld by higher judicial authorities. Key Evidence and Findings: The assessee had shown a short-term capital gain from the sale of shares, which was accepted by the AO. The CIT(A) found that the transactions were genuine and similar to those in related cases where additions were deleted. Application of Law to Facts: The Tribunal agreed with the CIT(A) that the transactions were genuine and covered by precedents in related cases. Conclusions: The Tribunal upheld the CIT(A)'s decision to delete the addition, finding no infirmity in the order. 2. Protective Addition of Rs. 14,97,50,000/- as Unexplained Share Application Money Relevant Legal Framework and Precedents: Section 68 of the Income-tax Act, 1961, concerning unexplained cash credits, was central to this issue. Court's Interpretation and Reasoning: The CIT(A) deleted the protective addition, noting that the substantive addition in the hands of the group companies had been deleted by the ITAT and upheld by the High Court. Key Evidence and Findings: The CIT(A) found no evidence of cash credit in the assessee's accounts and noted that the transactions were accepted in the group companies' hands. Application of Law to Facts: The Tribunal found that the CIT(A) correctly applied the law, as the substantive additions were already deleted in related cases. Conclusions: The Tribunal upheld the CIT(A)'s decision to delete the protective addition, finding it consistent with judicial precedents. 3. Addition of Rs. 2,00,000/- on Account of Bogus Expenses Relevant Legal Framework and Precedents: The issue concerned the genuineness of expenses claimed by the assessee. Court's Interpretation and Reasoning: The CIT(A) deleted the addition, noting that the assessee provided evidence of payment and the AO failed to substantiate the disallowance. Key Evidence and Findings: The assessee provided a copy of the agreement and bank statements supporting the payment. The AO's addition was found to be ad-hoc and unsupported by evidence. Application of Law to Facts: The Tribunal agreed with the CIT(A) that the expenses were genuine and the disallowance was unjustified. Conclusions: The Tribunal upheld the CIT(A)'s decision to delete the addition, finding no basis for the AO's disallowance. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: The Tribunal noted, "We do not find any infirmity in the order of the ld. CIT (A) and also the matter is squarely covered by the aforesaid decision of ITAT and Hon'ble Delhi High Court." Core Principles Established: The judgment emphasized the importance of consistency with judicial precedents and the necessity of adequate evidence to support additions under Section 68. Final Determinations on Each Issue: The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletions of the additions on all grounds.
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