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TMI Blog2022 (5) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the share subscribers and on its examination he did not find any cash deposits in the account of the subscriber prior to the issue of cheque for share capital to the assessee - HELD THAT:- CIT(A) on considering the remand report along with the order sheet entry has given a finding that order sheet entry reveals that assessee had filed letter dated 13.03.2013 after which the case was adjourned on 15.03.2013 for filing certain information and after entry dated 13.03.2013 there is no further entry either on 15.03.2013 or 22.03.2013 indicating of any proceedings being conducted after 13.03.2013. He has further noted that though in assessment order AO has referred to the notice dated 22.03.2013 but the order sheet record does not prove the service of the notice to the assessee. He has thus accepted the contention of the assessee that the report of the DDIT (Investigation), Kolkata was never confronted to the assessee. He has further given a finding that assessee had furnished certain details before the AO vide letter dated 11.03.2013 13.03.2013 but AO has not rebutted the contention of the assessee. He has further given a finding that the evidences furnished by the assessee not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not substantiate these expenses with documentary evidence. 2. That ld CIT(A) has erred in law as well as on facts in deleting the addition of Rs.3 Cr. made by the AO u/s 68 of I.T. Act, 1961 on account of unexplained creditors as the assessee failed to prove the genuineness of transaction where the AO established the creditors as bogus and only paper entities supported by report of ITI and DDIT (Inv.), Kolkata. 3. The Ld. CIT(A) has erred in law in ignoring the decision of Hon ble Supreme Court in the case Unneeri Kutty vs. CIT (SLP (Civil) No.4789 of 1993) 201 ITR 23 (st.) where the Hon ble Apex Court has clearly opined while dealing with the onus of the assessee to establish (a) proof of identity on his creditors (b) capacity of creditors to advance money and (c) genuineness of the transaction. 4. Therefore, the order of Ld. CIT(A) may be set aside and the order of the AO by restored. 4. First Ground is with respect to deletion of addition of Rs.6,67,420/- made on account of disallowance under the head distribution expenses. 5. AO on perusing the details of expenses noticed that assessee had shown distribution expenses of Rs.1,84,660/- and labour and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived share capital of Rs.30,00,000/- and share premium of Rs.2,70,00,000/- aggregating to Rs.3 crores from four concerns namely Vasudev Enterprises (P.) Ltd., M/s. Delhi Tradecom P. Ltd., M/s. Guru Udyog Pvt. Ltd. and M/s. Skand International P. Ltd. The assessee was asked to justify the premium charged and to prove the identity, creditworthiness as well as genuineness of the transactions. Assessee made the submissions which were not found acceptable to AO. AO noted that the income tax returns of the four investors filed by the assessee showed their returned incomes did not commensurate with the investments made. He also issued notices u/s 133(6) of the Act to the four concerns and has noted that the notices in the case of Skand International P. Ltd. and Vasudev Enterprises (P.) Ltd. were returned back by the postal authorities with remarks that no such company exists at the given address. With respect to Guru Udyog Pvt. Ltd. and Delhi Tradecom P. Ltd., he noticed that on enquiries, it was found that no such company was operating from those premises. With respect to the confirmation furnished by the assessee, he noted that there was some internal inconsistencies. He also noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worth and those companies being active is true is borne by the fact that AO himself had downloaded the details about the directors of the investors companies and their Balance Sheet from ROC website. He further submitted that no evidence has been brought on record to prove that the investors company has deposited cash in their accounts. It was further submitted that capacity of investors depends upon the availability of the funds and not on the basis of the tax paid. He further submitted that the assessee had furnished its reply to the remand report and no adverse comment of the assessee s submission has been brought on record by the Revenue. He further submitted that proviso Section 68 was inserted from 01.04.2013 i.e. A.Y 2013-14 and the year under consideration being 2010-11, no addition could have been made in the hands of the assessee on account of share capital and premium. He thus supported the order of CIT(A). 15. We have heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the addition made by AO u/s 68 of the Act but deleted by CIT(A). CIT(A) while deleting the addition has given a finding that he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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