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TMI Blog2024 (6) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act were not covered under the limited scrutiny, therefore, the assessment order cannot be held to be erroneous for want of detailed enquiries on these issues by the AO. Claim of deduction u/s 80JJAA - We note that the adequate enquiries were made by the AO on these issues and the ld. PCIT has not pointed out what additional enquiries were required to be made by the AO on this issue. Moreover, the assessee has duly explained before the ld. PCIT that the assessee has outsourced the employees, therefore, the expenditure on account of additional infrastructure was not incurred. The ld. PCIT has simply held the order erroneous on this issue by making general observation that the AO was required to make more enquiries, which, in our view, is not a valid ground to hold the assessment order erroneous and prejudicial to the interests of the Revenue. Issue of shares to the two companies - PCIT has not pointed out in the impugned order that what further enquiries were required to be made by the AO in this case which have not been so made. The ld. PCIT has only by single observation held that these claims of the assessee alongwith claim on the issue of share capital paid to the companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the infrastructure for newly added employees. He further observed that in addition to the infrastructure expenses, the assessee might have incurred expenses for advertisement, interviews, hospitality expenses etc. He observed that the assessee had simply provided the list of employees which was not sufficient for fulfillment of the requirements u/s 80JJAA of the Income Tax Act. He observed that the AO had not made adequate enquiries in this respect. 3.1 The ld. PCIT further observed that during the year, the assessee had raised loans and also paid huge interest thereupon. He observed that the said loan amount was incurred for capital work in progress and therefore, the disallowance in respect of interest expenditure was attracted u/s 36(1)(iii) of the Act, however, the AO has not examined this issue. 3.2 The ld. PCIT further observed that the assessee had made certain investments, income from which was exempt and therefore, the disallowance u/s 14A of the Act in respect of making those investments was attracted, however, the AO has not examined the said issue. 3.3 The ld. PCIT also observed that the assessee during the year had issued 0.25% Non Cumulative Compulsory Redeemable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. 9. Now coming to the issue relating to the claim of deduction u/s 80JJAA of the Act, the ld. Counsel for the assessee has invited our attention to the various details and explanations given by the assessee during the assessment proceedings. He has further invited our attention to the reply filed before the ld. PCIT wherein, the reference was made to the various enquiries made by the AO on this issue and the reply and explanation given by the assessee in this respect. The sum and substance of the reply of the assessee has been that the assessee was also providing manpower services and that out of 1640 employees, services of 1133 employees had been placed under the other company namely Quadrant Televentures Ltd. and the assessee company had also raised the bills during the Financial Year and the said amount was remitted to it and the same was paid to the employees. It was submitted that there was no extra burden upon the assessee company for creating infrastructure etc. The ld. counsel in this reply has also placed reliance on page 92 of the Paper Book wherein the reply relating to the claim of deduction u/s 80JJAA have been furnished along with certificate of the Chartered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e enquiries, which, in our view, is not a valid ground to hold the assessment order erroneous and prejudicial to the interests of the Revenue. 12. So far as the issue relating to the issue of shares to the two companies namely M/s Takecare India Pvt. Ltd. and Videocon Realty Infrastructure Ltd. was concerned, the assessee explained that the AO had made adequate enquiries on this issue and various replies and details were furnished to the AO, considering which the AO has accepted the claim of the assessee. The ld. counsel, in this respect has submitted that the AO had issued questionnaire dated 28.12.2020 wherein, the following details were asked for from the assessee, on this issue : a) Name and address of the shareholders b) PAN of the shareholders c) Face Value of each share. d) Number of shares allotted to each shareholder. e) Total value of the shares allotted to each shareholder, f) Payment received from each shareholder during the financial year. 2) Provide documentary evidence to substantiate the identity and ITR of the shareholders to substantiate creditworthiness the shareholders as well as the proof of genuineness of transaction in respect of fresh credit of the share cap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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