ACIT Vs H.K. Imp ex Pvt. Ltd. (ITAT Mumbai)- The dispute is regarding addition of Rs. 4.85 crores being the share application money invested by the two directors who were holding 50% share in the company. We find from the records that the assessee vide letter dated 17.9.09 addressed to AO had given full details such as name, address, PAN of the two directors. The source of the money had been explained as the money withdrawn from the capital account in the firm M/s. S.G. Enterprises.
The assessee had also filed copy of the balance sheet of M/s. S.G.Enterprises along with copy of capital account of the partners showing withdrawal for making investment in shares. The two directors were assessed with the same AO. Under these circumstances we see no infirmity in the order of CIT(A) deleting the addition made by the AO and the same is therefore upheld.
IN THE INCOME TAX APPELLATE TRIBUNAL
“H” Bench, Mumbai
Before Shri Rajendra Singh(AM) and Shri V.D.Rao, (JM)
ITA No. 4465/M/2008
Assessment Year- 2005- 06
ACIT Vs. H.K. Imp ex Pvt. Ltd.
ORDER
PER RAJENDRA SINGH (AM)
This appeal by the revenue is directed against the order dated 28.3.2008 of CIT(A) for the assessment year 2005-06. The revenue in this appeal has raised disputes on three different grounds.
2. The first dispute is regarding addition of Rs. 4.85 crores being the share application money invested by the directors in the assessee company. The AO noted that the above investment had been made by the two directors who had share holding of 50% each. The AO observed that the assessee did not give details- name, address, balance sheet, bank statement of the share holders and only filed ledger copy of share application money. No confirmation was filed nor PAN of the directors was given. He therefore added the amount under section 68 of the Income-tax Act. In appeal the assessee submitted that during the assessment proceedings the assessee vide letter dated 13.12.2007 and 17.12.2007 had submitted confirmation, ledger copy of account and PAN etc before the AO which was ignored. CIT(A) was satisfied by the explanation given and observed that the assessee had explained the source of investment as withdrawal from the firm in which the directors were partners. The directors were assessed with the same AO. He therefore deleted the addition aggrieved by which the revenue is in appeal.
