Venus Drugs & Cosmetics Ltd. Vs ITO (ITAT Mumbai)
No Evidence, No Relief- All Additions Upheld: ITAT Mumbai Confirms Disallowances & ₹2.07 Cr Share Capital/Premium/Warrant Addition u/s 68- Identity Alone Isn’t Enough – Share Subscribers Fail Genuineness & Creditworthiness Test- High Share Premium With Weak Financials: Human Probability Test Sinks Assessee’s Case
Assessee, engaged in manufacturing cosmetic products, filed return declaring ₹8.56 lakh. The case was scrutinised & AO made multiple additions-foreign travel expenses, product development, trademark & domain expenses, alleged bogus purchases from Payal Enterprises, unexplained share capital of ₹50,55,980, share premium of ₹67,25,020, & share warrants of ₹90,00,000—treating credits as unexplained u/s 68 & premium additionally taxable u/s 56(1). CIT(A) confirmed all additions.
Before Tribunal, no one appeared for Assessee despite service of notice, so the appeal was heard ex-parte. Tribunal examined the record & CIT(A)’s detailed findings.
On foreign travel, Tribunal noted that director visited Dubai & Bangkok but Assessee produced no evidence of business purpose such as meeting schedules, correspondence or reports. Disallowance was upheld.
On product development, trademark & domain expenses, Tribunal agreed with CIT(A) that Assessee failed to file any supporting documentation explaining nature of services or business necessity. These disallowances also stood confirmed.
