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28-02-2019, Business Match Services, Section 68, 133(6), 78, Tribunal Mumbai

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2 weeks 5 days ago #8716 by amit
Section - 68, 133(6), 78
Order Date - 28-02-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - DCIT
Respondent - Business Match Services Pvt. Ltd.
Justice - SANDEEP GOSAIN, JM & G. MANJUNATHA, AM
Citation - 219Taxpundit146
Appeal No. - I.T.A. No. 5925/Mum/2017
Asstt. Year - 2011-12

Order

PER : Sandeep Gosain

The present Appeal has been filed by the revenue against the order of Commissioner of Income Tax (Appeals)-20, Mumbai, dated 29.06.17 for AY 2011-12 on the grounds mentioned herein below:-

1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.2,74,45,0007- on account of unexplained cash credit u/s 68 of the IT Act.

2." Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in disallowance of interest of Rs.2,90,96,145/- u/s 36(1)(iii)

3."The appellant prays that for these and other reasons it is submitted that the order of the Ld. CIT(A) on the above grounds be set aside and that of the A.O. be restored."

4. "The appellant craves leave to amend add, amend or alter all or any of the grounds of appeal."

2. The brief facts of the case are that the assessee is a private limited company engaged in the business of providing consultancy services, etc. The return of income for the year under consideration was filed on 30.09.11 declaring total income of (-) Rs. 3,90,36,096/-. Subsequently the case was selected for scrutiny and after serving statutory notices and providing opportunity of hearing, assessment order u/s 143(3) of the I.T. Act was passed by the AO thereby making
additions/disallowances under different heads.

3. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee.

4. Aggrieved by the order of Ld. CIT(A), the revenue has filed the present appeal before us on the grounds mentioned herein above.

Ground No. 1

5. This ground raised by the revenue relates to challenging the order of Ld. CIT(A) in deleting the addition of Rs.2,74,45,000/- on account of unexplained cash credit u/s 68 of the IT Act.

6. Ld. DR appearing on behalf of the revenue relied upon the order passed by AO and submitted that during the course of assessment proceedings, it was noticed by the AO that the assessee had issued non-cumulative, non-convertible preference shares of 100 each at the premium of Rs. 49,900/- per share. In this regard, assessee was asked to furnish the justification of premium charge with valuation of shares, however the submissions furnished by the assessee, were not found to be acceptable and therefore while relying upon the principles laid down by the judicial pronouncements in the case of Shri Lekha Banerjee Vrs. CIT 49 ITR 112 (SC) and Major Metals Vrs. Union of India 207 taxman.com 185 (Bom HC). It was submitted that premium received by the assessee was unreasonable as the shares were issued at unjustifiable amount of premium and the entire transactions were not genuine. Therefore, Ld. CIT(A) had erred in deleting the additions on account of unexplained cash credit u/s 68 of the I.T. Act.

7. On the other hand, Ld. AR relied upon the orders passed by the Ld. CIT(A) and reiterated the same arguments as were raised by him before Ld. CIT(A). It was submitted that assessee company had issued 550 number, 1% non-cumulative, nonconvertible preferential shares to an individual namely Anuj

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