DCIT-13(1)(2) Vs Qyuki Digital Media Pvt. Ltd. (ITAT Mumbai)
ITAT Mumbai held that disallowance of entire expenses alleging that assessee has not started its business activity till date not justified since non-generation of income after setting up of business cannot be a ground to disallow expenses. Accordingly, disallowance of expenses deleted.
Facts- The assessee- company is engaged in the business of production and development of internet programmes, products, services, applications etc. During the course of assessment proceedings, AO noticed that the assessee has issued shares to four persons, namely, Sekhar Kapur, Mr. A.R. Rahman, Mrs. Nishith Desai and M/s CSI BD Mauritius. It is noticed that the assessee has issued shares at par value of Rs. 10/- each to the first three persons and at Rs. 302.80 to M/s CSI BD Mauritius. Before the AO, the assessee furnished copies of income tax returns and Balance Sheet of Sekhar Kapur and Mr. A.R. Rahman. With regard to two other investors, the assessee did not furnish any details. Aggregate amount of share capital received from Mr. Nishith Desai and M/s CSI BD Mauritius was Rs. 27.23 crores and the AO assessed the same as unexplained cash credit u/s. 68 of the Act.
