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TMI Blog2023 (8) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... addition u/s 68 - Decided in favour of assessee. Addition u/s 14A - expenses incurred on earning exempt income - AO during the course of assessment proceedings observed that the assessee was holding investments which were capable of generating exempt income and noted that the assessee has claimed expenses of interest payment in the profit and loss account - HELD THAT:- We find that undisputedly the assessee has not earned an exempt income during the year and it is a settled position of law that if the assessee has not earned any exempt income, no disallowance is required to be made u/s 14A of the Act. We note that Ld. CIT(A) has passed the appellate after following the decision of case of Cheminvest Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] and Ashika Global Securities Ltd. [ 2018 (7) TMI 1425 - CALCUTTA HIGH COURT] . Accordingly, we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the Revenue. - SRI RAJESH KUMAR, ACCOUNTANT MEMBER SONJOY SARMA, JUDICIAL MEMBER For the Appellant : Sh. Percy G. Pardiwalla, Sr. Adv., Sh. Devashish A. Mehrotra G.G. Mehrotra, A/R. For the Respondent : Sh. P.P. Barman, Addl. CIT, Sr. D/R. ORDER Per Rajesh Kumar, Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ummons u/s 131 of the Act dated 09.03.2015 to the assessee calling upon the assessee to substantiate the identity and creditworthiness of the share subscribers and genuineness of the transactions. Ld. AO noted that the directors of the assessee company did not appear personally in compliance to the summon issued u/s 131 of the Act on 09.03.2015 and however, duly acknowledged having filed the necessary details called for. Ld. AO noted that simply furnishing of the details and evidences would not prove the identity and creditworthiness of the investors and the genuineness of the transactions. Finally, Ld. AO made the addition on account of non- compliance to the summons issued on the part of the assessee by treating Rs. 2.34 Cr as unexplained cash credit and added the same to the income of the assessee. 5. In the appellate proceedings, Ld. CIT(A) allowed the appeal of the assessee by giving a detailed finding that the assessee has substantiated the three ingredients of Section 68 of the Act i.e. identity and creditworthiness of the shareholders and genuineness of the transactions and mere issuing of shares at a premium would not make the subscription of equity shares subscription val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re capital/share premium and filed confirmation of share applicants, bank account details and have shown that payments were through account payee cheques then it could be said that the assessee has discharged the initial burden and just because some of the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke Section 68 of the Act without bringing any additional and substantive materials to prove that the money raised does not satisfy the requirement of section 68 of the Act. We find support from the decision of Hon ble Supreme Court in the case of Orissa Corporation Ltd. in 159 ITR 78 (SC) (supra) wherein the Hon ble Apex Court has held as under: That in this case the respondent had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the Revenue. The Revenue, apart from issuing notices under Section 131 at the instance of the respondent, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this situation. In the said judgment noted by us at page 463, the Supreme Court has observed as follows: The Income-Tax Appellate Tribunals performs a judicial function under the Indian Income-tax Act. It is invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and records its findings on all the contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner, in the light of the evidence and the relevant law. It is also ruled in the said judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. Taking inspiration from the Supreme Court observation we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Ld. CIT(A). We also found no single word has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectors of the investor company for examination by the AO it cannot be held that the identity of a limited company has not been established. For the reasons given above we uphold the order of Ld. CIT(A) and dismiss the appeal of the revenue. 6.3. In the instant case before us also, the assessee has furnished all the evidences proving identity and creditworthiness of the investors and genuineness of the transactions but AO has not commented on these evidences filed by the assessee. Under these facts and circumstances and considering underlying facts in the light of ratio laid down in the decisions as discussed above , we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the Revenue. 7. The second issue raised by the Revenue is against the deletion of addition of Rs. 39,13,556/- u/s 14A of the Act by Ld. CIT(A) as made by Ld. AO. 8. The facts in brief are that Ld. AO during the course of assessment proceedings observed that the assessee was holding investments which were capable of generating exempt income. Ld. AO noted that the assessee has claimed expenses of interest payment in the profit and loss account. Ld. AO also noted that since the assessee has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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