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TMI Blog2022 (10) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Apex Court judgement in the case of Kale Khan Mohammad Hanif [ 1963 (2) TMI 33 - SUPREME COURT] and Roshan Di Hatti [ 1977 (3) TMI 3 - SUPREME COURT] We are of the considered opinion that ground 1 raised by the assessee deserves to fail as we do not find any infirmity in the order of the CIT(A) on this ground. In the result, ground 1 is dismissed. Disallowance of legal and professional charges - HELD THAT:- The lower authorities has disallowed the said expenses on the ground that the assessee has failed to submit documentary evidence to substantiate the assessee s claim that these were business expenses and not payment made for legal and professional expenses for the purchase of factory premises. CIT(A) has relied on the decision in the case of Calcutta Agency Ltd [ 1950 (12) TMI 4 - SUPREME COURT] wherein the burden of proving the necessary facts pertaining to the claim of expenses is on the assessee. The assessee has failed to furnish evidence to prove that these were expenses for the purpose of business and we are of the opinion that the burden of proving the profits / loss of the assessee, is on the assessee. In the present case, assessee has not produced any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pertaining to assessment year 2010-11. 2. The assessee is not present before us nor has it been represented by any counsel inspite of several opportunities. Therefore, we proceed to decide this appeal exparte qua the assessee after hearing the Ld.DR and upon perusal of the available records. 3. The grounds raised in this appeal are as below:- 1. The learned assessing officer has erred in adding Rs.8,00,000/- u/s 68 on the ground of preference shares is a dubious transaction for which no proper explanation was given. However the appellant provided all the necessary information and explanation along with documentary evidence during the assessment proceedings. The learned assessing officer has acted on the basis of suspicion. 2. The learned assessing officer has erred in disallowing legal and professional charges of Rs.4,11,935/- considering the same as capital expenditure. This disallowance is very unreasonable and unrealistic. 3. The learned assessing officer has erred in disallowing ROC Filing Fees Registration expenses to the extent of Rs.48,805/-. 4. The background facts leading to this appeal are that the assessee is engaged in the business of tex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare application money of Rs.8 lakhs from the two companies of Shri Mukesh M Chokshi, who was accommodation entry provider. On this finding, the Ld.CIT(A) had confirmed the addition made by the Assessing Officer. Aggrieved by the said order, the assessee is in appeal before us. 5. It is observed that there was no representation from the assessee s side constantly in spite of several opportunities given to the assessee. 6. The Ld.DR contended that the assessee has been habitual in not appearing either before the lower authorities or before the Tribunal. The Ld.DR relied on the order of the lower authorities. 7. Having heard the learned DR and perused the materials on record, we have no doubt that the assessee was provided with ample opportunities to furnish details pertaining to his claim. From the submissions made by the assessee, notice under section 133(6) was issued by the Assessing Officer to the concerned parties which was found to be returned as unserved . The assessee has not proved the identity, creditworthiness of the investors and genuiness of the transaction. The Ld.CIT(A) has rightly relied on the decision of the Hon ble Supreme Court in the case of PCIT vs NR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on the grounds that the same is a capital expenditure. The assessee has stated that the said expenses were incurred for issue of preference shares. The assessee has claimed the same to be for the purpose of business as it was revenue in nature. It is observed that the Ld.CIT(A) has reiterated the view of the Assessing Officer that the same is in the nature of capital expenditure as against the assessee s claim of revenue expenditure. The Ld.CIT(A) has relied on the decision of Hon ble Supreme Court in the case of Punjab State Industrial vs CIT 225 ITR 792 (SC) wherein it was held that the fees paid to the Registrar of Companies is of capital base of the company and was directly related to capital expenditure incurred by the company and although incidentally that would help in the business of the company and may also help in profit making, it still remains the character of the capital expenditure since the expenditure was directly related to the expansion of the capital base of the company. The relevant portion of the judgement is as under:- We do not consider it necessary to examine all the decisions in extenso because we are of the opinion that the fee paid to the Registra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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