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TMI Blog2012 (11) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- Order of the CIT(A) on the ground that the disallowance sustained by the CIT(A) is reasonable as the assessee was not able to produce any evidence regarding the genuineness of expenditure even before us during the hearing is confirmed - disallowance only to the extent of 10% of the claim of assessee is sustained - ground of appeal is dismissed – in favour of assessee. - ITA No. 1469 & 1470/HYD/2011 - - - Dated:- 27-7-2012 - SMT. ASHA VIJAYARAGHAVAN AND SHRI D. KARUNAKARA RAO, JJ. Appellant by : Shri K. Gnana Prakash Respondent by : Shri M.V. Anil Kumar ORDER PER ASHA VIJAYARAGHAVAN, J.M.: Both these appeals filed by the revenue are directed against the respective orders of CIT(A)-VII, Hydera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Shri C. Shashidhar Reddy, whose PAN details were provided to the AO. The AR relied upon the decision of the Hon ble Supreme Court in the case of CIT Vs. Lovely Exports Pvt. Ltd., 216 CTR 195 [2008] (SC). After considering the submissions of the AR of the assessee, the CIT(A) held that the AO should have verified the source of share application money and if at all any addition is there, it should have been made only in the promoter s hand but not in the hands of the assessee. Accordingly, he deleted the addition of Rs. 38,57,851/- made by the AO. 5. Aggrieved, the revenue is in appeal before us raising the following grounds of appeal:- 1. The ld. CIT(A) erred in facts in allowing appeal of the assessee. 2. The ld. CIT(A) ought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt. Ltd., 216 ITR 195(SC). 7. It was pointed out by the learned counsel for the assessee that the promoter has been assessed to income-tax and income tax details of the promoter were furnished. We are of the opinion that the AO had wrongly made the addition in the hands of the assessee company without verifying the source of share application money. The Hon ble Supreme Court in the case of Lovely Exports Pvt. Ltd. (supra) held as follows: Section 68 of the IT Act, 1961 cash credit If share application is received by assessee-company from alleged bogus share holders, whose names are given to AO, then Department is free to proceed to reopen their individual assessments in accordance with law but this amount of share money cannot be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings or appellate proceedings, or penalty proceedings. 11. The AO made disallowance of Rs. 52,27,861/- on account of the following heads:- (Rs.) a) Purchases 10,58,260/- b) Repairs to building 10,96,362/- c) Other expenses 23,56,124/- d) Advertisement 3,19,265/- e) Consumption of stores 3,48,106/- f) Repairs 49,744/- Total 52,27,861/- 12. Before the CIT(A), it was contended that the assessee had produced books of account, vouchers and bills , which had been mentioned in the body of the assessment order by the AO and without appreciating the fact that the assessee had produced books of account and other details, the AO had disallowed the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any defects in the books of account. After considering the submissions of the assessee, the CIT(A) restricted the disallowance to Rs. 1,00,000/- by giving a relief of Rs. 8,99,576/- to the assessee. Aggrieved, the revenue is in appeal before us. 16. After hearing the parties and perusing the record, it is observed that the AO in his assessment order at para 3.2 held that the assessee has not produced its books of account/vouchers and bills despite sufficient opportunities having been given to him. The AO had also observed that the receipts of the assessee during the year is only Rs. 18,15,500/- and compared to the receipts expenditure claimed is very high. Taking into consideration the totality of the facts, we find that the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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