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TMI Blog2021 (11) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... ture hence need no adjudication. Ground Nos. (i) to (iii) are relating to the action of ld. CIT(A) in deleting the disallowance made by the AO u/s 14A rwr 8D and ground Nos. (iv) to (vi) are relating to the action of the CIT(A) in deleting the disallowance made by the AO u/s 68 of the Act of Rs. 3,65,55,496/-. 2.1 Briefly the facts of the case are that the assessee company, in the business of manufacturing gas turbine auxiliaries, filed its return of income for the AY 2013-14 admitting total income of Rs. 1,32,50,090/- under normal provisions and Rs. 1,24,80,000/- under Book profit u/s 115JB of the I.T. Act. The case was selected for scrutiny and accordingly the Assessing Officer issued statutory notices. In response to the notices, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the flow of funds and utilization of the loans. However, the provisions of rule 8D(2)(iii) of the IT rules 1962 rws 14A were attracted in the case of expenditure on the basis of investments made. He accordingly, disallowed the expenditure to the extent of Rs. 65,000/-. 5.1 Before the CIT(A), the assessee, inter-alia, submitted that since the assessee did not earn any dividend income on the investment made in associate company disallowance u/s 14A cannot be made. For this proposition, it relied on the decision in the case of Prathista Industries ltd. Vs. DCIT in ITA No. 1302/Hyd/2014. 5.2 After considering the submissions of the assessee, the CIT(A) relying on the decision of Prathista Industries Ltd., (supra), deleted the addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investors with regards to their investment in the above company. The AR of the assessee was asked to furnish necessary and supporting evidence in respect of the share application money received from the above persons i.e., Balance sheet along with relevant Schedule and Ledger account of the investor companies reflecting their investments and sources along with relevant bank account statement in respect of individual investors and the assessee furnished the details in respect of share application money and sought time for furnishing of evidence sought for but has not furnished any evidence on the said date as well as till date. As the assessee failed to provide or furnish any supporting evidence in support of the share application money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a receipt cannot be satisfactorily explained by the assessee, it is open to the revenue to hold that it is the income of the assessee. Accordingly, it is treated that the assessee has not satisfactorily explained. In view of the above observations, the AO treated the amount of Rs. 3,65,55,496/- as unexplained cash credits u/s 68 of the I.T. Act and brought to tax in the assessment in respect of Sea Gold Aqua Farms Ltd., the assessee themselves have invested amount of Rs. 2.60 crores more than the amount of Rs. 2.40 crores received by them. Considering the same and in the absence of any adverse information on file at this point of time, no addition is made in the assessment on this count. 7. Before the CIT(A), the assessee made elabora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the submissions made before the CIT(A) and submitted that the assessee company has received an amount of Rs. 3,65,55,496/- from various parties and same has been accounted monies and further, the parties are income tax assessees' and are regularly filing their income tax returns. He further submitted that the during the course or scrutiny proceedings, the assessee has submitted confirmation letters from the creditors and PAN, which proves the identity, creditworthiness and identity of the parties. He relied on the following case law: 1. Lovely Exports Ltd., 216 CTR 195 (SC) 2. Vaishnodevi Refooils & Solvex, 96 Taxman.com 469 (SC) 3. Orchid Industries (P.) Ltd., 116 Taxamann.com 4. Orissa Corp. (P) Ltd., 25 Taxman 80F (SC) 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the opinion of the A.O. the assessee did not discharge the liability as provided u/s 68 of the Income Tax Act.1961. The AO made the addition in respect of the share application money received from the following parties: i) Lepakshi Ayush Park Pvt. Ltd. - Rs. 52,95,534 ii) Nandian PVK Energy Pvt. Ltd. - Rs. 2,01,59,962 iv) Sri V. Krishna Mohan Rao - Rs. 11,50,000 v) Sri V. Sarath Babu - Rs. 15,00,000 vi) Sri VSRD Choudary - Rs. 15,00,000 vii) Sri Madan Reddy - Rs. 9,50,000 viii) Yashoda Energy Pvt. Ltd. - Rs. 60,00,000 Total -Rs. 3,65,55,496 In respect of the parties at Sl.No. i) & ii), there is a debit and credit amounts as appearing in the above table, out of which, the AO has accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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