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TMI Blog2015 (2) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... Report clearly pointed to the three share applicants not only being genuine business concerns but also having substantial business activities and further having reasonably sized turnovers. In these circumstances, to establish implausibility on the part of the share applicants to have possessed the means when they applied, the AO ought to have probed further. He did not do so as is evident from the Remand Report where the AO did not offer any comments upon the materials taken into account by the CIT (Appeals). Consequently, the ITAT’s order cannot be faulted. - Decided in fvaour of assessee. Unaccounted cash deposits - ITAT deleted addition - Held that:- AO did not comment adversely in respect of the assessee’s explanation pertaining to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths. The AO disallowed the entire amount of ₹ 1.65 crores on the basis of his decision that the three entities, i.e. the share applicants did not have adequate resources. The AO, in the assessment order framed under Sections 143(3)/147 of the Act felt that each of the three concerns did not have the volume of business which could have reasonably enabled them to invest to the extent that they did. The AO s decision was appealed; the CIT (Appeals) considered the submissions of the parties and also took into account a remand report. In the course of the remand, it appeared that the three share applicants had transacted business and had in fact reported to the income tax. For M/s. Goyal Textiles Industries Pvt. Ltd., the total volume of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aries. The balance sheet of the creditors shows that they had sufficient funds. In case of M/s. Goyal Textiles Pvt. Ltd. the balance sheet shows paid up capital of ₹ 5.00 crores. The funds have been given as loans advances. In case of M/s. Ankur Distributors Pvt. Ltd. as well as in case of M/s. Richi Rich Overseas Pvt. Ltd. the paid up share capital is of ₹ 5.00 crores each. In the instant case no evidence has been brought on record by the AO to prove that the share application money emanated from the coffers of the applicant. The AO has not made any enquiries from the concerned parties nor did he examine the assessment records of the share applicants. Relying on the various documents placed on record and the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ardly any business transacted by the share applicants which could have legitimately allowed them to invest large sums of money in the assessee s shares. It is also contended that merely because the share applicants had a large volume of turnover did not mean that they had sufficient funds to invest in the assessee s shares. Learned counsel also submitted that the CIT(A) and the ITAT fell into error in directing deletion of ₹ 1,18,50,000/- since the assessee could not explain these amounts withdrawn from its accounts. 5. The preceding discussion so far as the share application money of ₹ 1.65 crores is concerned, clearly reveals that the AO s suspicions formed the basis of including the amounts under Section 68 of the Act; whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, ld. counsel of the assessee pointed out that the copies of the replies before the Assessing Officer (page no.19 to 74), copies of ledger and cash book (PB page no.75-76), copy of bank statement related to financial year (PB page no.77 to 86), copies of the submission before the Commissioner of Income Tax(A) dated 08.02.2009 (PB page no.87-92), copy of remand report of Assessing Officer dated 23.04.2010 (PB page 93-98), copy of submissions before the Commissioner of Income Tax (A) dated 26.05.2010 (PB page 99- 177) and copies of last submissions before the Commissioner of Income Tax (A) (PB 178-193). The counsel of the assessee submitted that the disputed cash deposits were made out of cash withdrawals made from the same bank on earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X
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