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TMI Blog2022 (1) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in the assessee company is not coming out clearly. It is also not in dispute that all the five company s address are in the same building and the building is deserted. In this situation, we are of the view that the Ld. CIT (A) s finding is erroneous. Hence, we hereby set aside the order of the Ld. CIT(A) on this issue and uphold the order of the Ld. AO. Therefore, the issue is decided in favour of the Revenue. Addition towards notional interest charged on interest free advances extended to Directors of the assessee company - HELD THAT:- Before us, the assessee has filed the income tax returns and statement of affairs of M/s. Jagadamba Cotton Industries Pvt Ltd for the relevant assessment year to establish the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee company. (ii) The Ld. CIT (A) has erred in upholding the order of the Ld. AO who had made addition aggregating to ₹ 1,18,10,000/- by treating the share application money received from M/s. Jagadamba Cotton Industries Private Limited for ₹ 1 Cr and from Smt. Suseelabai Rungta for ₹ 18,10,000/-, U/s. 68 of the Act. 3. The Revenue has raised seven grounds in its appeal however, the crux of the issue is that: (i) The Ld. CIT (A) has erred in deleting the addition made by the Ld. AO U/s. 68 of the Act towards unexplained share capital / share application money received from Kolkata and Hyderabad based companies. Revenue s appeal: 4. The brief facts of the case are that the assessee is a Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng reasons: (i) The Registered Offices of the above cited five companies are located in the same premises i.e., Flat No.21, Amartolla Street, Kolkata and the building was abandoned. (ii) All the above companies did not have its own source for making the investment. It was revealed that all the five entities source fund from other companies and invested the same in the assessee company in the preceding day. (iii) From the income tax return filed by these companies it was revealed that either they were making loss or generating meagre income viz., (i) M/s. Tirumala Dealers Private Limited ₹ 401/-; (ii) M/s. Punctual Vincom Private Limited ₹ 64,904/- (Loss); (iii) M/s. Approach Trade Links Private Limited &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet and P L Account of M/s. Tirumala Dealers Private Limited enclosed in paper book at pages 11 to 17 it is apparent that the company is making loss. We further observed from the balance sheet of M/s. Tirumala Dealers Private Limited that the investment of ₹ 7,05,00,000/- was made from the earlier reserves and surplus amounting to ₹ 6,18,75,051/-. Therefore, the exact source of the reserves and surplus of the earlier years resulting in liquidity to the company for making investment in the assessee company is not coming out clearly. It is also not in dispute that all the five company s address are in the same building and the building is deserted. In this situation, we are of the view that the Ld. CIT (A) s finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors and evidence to prove the identity and creditworthiness of the investors. Since the assessee failed to produce the required explanation and documentary evidence, the ld. AO treated the amount of ₹ 1,18,10,000/- as unexplained cash credit u/s. 68 of the Act. On appeal, the Ld. CIT (A) confirmed the order of the Ld. AO since with respect to these parties, the assessee could not produce any evidence to establish the genuineness of the transaction and creditworthiness of the investors. Before us, the assessee has filed the income tax returns and statement of affairs of M/s. Jagadamba Cotton Industries Pvt Ltd for the relevant assessment year to establish the genuineness of the transaction. However, we find that there is no discu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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