ANTS MULTIMEDIA PVT. LTD.,AHMEDABAD V. THE DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD

ITSSA 119/AHD/2021

AI Insights

The case involves Ants Multimedia Pvt. Ltd. appealing against the orders of the Deputy Commissioner of Income-tax, Central Circle - 2(2), Ahmedabad, concerning several additions made under various sections of the Income Tax Act, 1961, for the assessment years 2010-11 to 2013-14. The appeals were consolidated due to the similarity of issues across the assessment years. The main issues revolved around the additions made for unexplained share capital, unexplained cash deposits, and unsecured loans, along with disallowances related to expenses and remuneration. The tribunal examined the validity of the additions and disallowances made by the Assessing Officer (AO) and the Commissioner of Income-Tax (Appeals), considering the explanations and evidence provided by the appellant.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 102626 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B. P. SRIVASTAV
• Assessee Lawyers: SURESH GANDHI
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Document seized; Documents seized; Gift; TDS; Bogus Share capital; Bogus
• Section: 143(3); 192; 153A; 68; 69; 13; 153C; 40(a)(ia); 40a(ia); 20

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER & SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील (एस.एस.) सं./I.T(SS).A. Nos. 118, 119, 120 & 121/Ahd/2021 (Ǔनधा[रण वष[ / Assessment Years : 2010-11, 2011-12, 2012-13 & 2013-14) Ants Multimedia Private Limited Block C-4, 101, 1st Floor, Anushruti Tower, Near Muktidham Derasar, Thaltej Char Rasta, Ahmedabad, Gujarat - 380054 बनाम/ Vs. The Deputy Commissioner of Income-tax Central Circle - 2(2), Ahmedabad èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAGCM2348N (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Suresh Gandhi, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri B. P. Srivastav, Sr. DR Date of Hearing 19/02/2025 Date of Pronouncement 16/04/2025 O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: These four appeals are filed by the assessee against the separate orders of the Commissioner of Income-Tax (Appeals)- 12, Ahmedabad (in short ‘the CIT(A)’), all dated 16.01.2020 for the Assessment Years 2010-11, 2011-12, 2012-13 & 2013-14. 2. There was a delay of 492 days in filing of these appeals. The assessee has explained that the order of the Ld. CIT(A) was IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 2 – received on 18.02.2020 and the time limit to file the appeal had expired during pandemic period. It has further been stated that the company was being managed by Shri Vikas Arvindbhai Shah, one of the Directors, who had passed away on 04.11.2019 and after his death the business activities of the company had virtually closed. Other members of the management were unaware of the fact regarding adverse order of First Appellate Authority, which was compounded by frequent closures during pandemic period. It was only much later that the requirement of filing the appeal against the order of Ld. CIT(A) was brought to the knowledge of the surviving Director. Shri Suresh Gandhi, Ld. AR of the assessee explained that due to expiry of working Director Shri Vikas Arvindbhai Shah, there was nobody in the management to take the decision and that the delay in filing of the appeals was due to bona-fide reasons. We have considered the explanation for delay in filing the appeals. A copy of death certificate of Shri Vikas Arvindbhai Shah, has also been brought on record. Considering the death of the main Director of the company as well as the cessation of activities due to pandemic period, the delay in filing the appeals is condoned. 3. Since some of the issues involved in these four appeals are identical, all the appeals were heard together and are being disposed of vide this common order for the sake of convenience. 4. We first take up IT(SS)A No. 118/Ahd/2021 for A.Y. 2010 -11. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 3 – IT(SS)A No. 118/Ahd/2021 for A.Y.2010 -11 5. The assessee has taken following grounds of appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.1,00,000/-originally made by the AO, in respect of the introduction of share capital of this amount. The Appellant humbly submits and prays that the following additional grounds of appeal, which are of legal nature, may please be admitted, despite the fact of the same not having been raised at the lower levels 2. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 153C r.w.s. 153A r.w.s. 143(3) of the Act. He did these clearly against the provisions of law. as interpreted by various judicial authorities. 3. Without prejudice and through this additional legal ground, the Appellant challenges the addition made by the AO without the same having any link or co-relation with the finding of the underlying search and by ignoring the fact of this being a non-abated year.” 6. All the grounds taken in this appeal pertain to addition of Rs.1 Lakh on account of share capital. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2010- 11 on 28.09.2010 declaring loss of Rs.8966/-. The assessment was completed under Section 153C r.w.s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) on 31.12.2015 at total income of Rs.91,030/-. The AO found that the assessee company was incorporated on 05.11.2009 and this was the first year of assessee company. The assessee had received share capital, in cash, of Rs. 50,000/- each from Shri Vikas Arvindbhai Shah and Mrs. Chhaya Vikas Shah. As the source of the share capital was not IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 4 – satisfactorily explained, the AO had treated the same as unexplained cash credit of the assessee and made the addition. 7. Shri Suresh Gandhi, Ld. AR of the assessee submitted that the addition made by the AO was not based on any seized document and that this year being a non-abated assessment year, no addition could have been made in the absence of any seized material. On merits, he submitted that the fact of share capital contribution by Shri Vikas Arvindbhai Shah and Mrs. Chhaya Vikas Shah, the Directors of the company, was not under dispute. Therefore, the addition, if any, was required to be made in the hand of individual shareholders and not in the hands of assessee company. According to the Ld. AR, since this was the first year of the company, there was no question of any unaccounted income of the assessee being introduced in the guise of bogus share capital. 8. Per contra, Shri B. P. Srivastav, Ld. Sr. DR supported the order of the lower authorities. 9. We have considered the rival submissions. The fact that the share capital was contributed by Shri Vikas Arvindbhai Shah and Smt. Chhaya Vikas Shah has not been disputed. If the AO was not satisfied with the explanation of share capital contribution of respective shareholders, the addition should have been made in their respective hands. Since this is the first year of the company, there was no question of any unaccounted income of the assessee company being introduced in the guise of bogus share capital. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 5 – Therefore, the addition as made by the AO on account of unexplained share capital contribution cannot be sustained. Accordingly, the addition made by the AO is deleted and the ground of the assessee is allowed. 10. Since the addition made by the AO has been deleted on merit, we do not deem it necessary to adjudicate the legal grounds. 11. In the result, the appeal of the assessee is allowed. IT(SS)A No. 119/Ahd/2021 for A.Y. 2011-12 12. The assessee has taken following grounds in this appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs.64,000/- originally made by the AD, in respect of expenses incurred for increase in authorized share capital. 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs 35,51,544/- originally made by the AO in respect of cash deposited in the bank account, treating the same as unexplained income under section 68 of the Act. 3. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs. 10,25,731/- originally made by the AO, treating this as unexplained investment under section 69 of the Act The Appellant humbly submits and prays that the following additional grounds of appeal, which are of legal nature, may please be admitted, despite the fact of the same not having been raised at the lower levels. 4. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 1530 r.w.s. 153A IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 6 – r.w.s. 143(3) of the Act. He did these clearly against the provisions of law, as interpreted by various judicial authorities. 5. Without prejudice and through this additional legal ground, the Appellant challenges that the action of the AO in making various additions is clearly non-sustainable, in view of the same having been made without their having any base or co-relation with the finding of the underlying search and by ignoring the fact of this being a non-abated year.” 13. The brief facts of the case are that the assessee had filed its return of income for A.Y. 2011-12 on 06.01.2015 declaring total loss of Rs.81,900/-. Subsequently, a search action u/s.132 of the Act was carried out in the case of Shri Vikas Arvindbhai Shah, a Director of the assessee company on 03.01.2013. In the course of which, certain incriminating materials as per Annexure - ‘X’ were found and seized. The said seized materials pertained to Ants Multimedia Pvt. Ltd., the assessee company, and consisted of handwritten notes with details of financial transactions by way of demand draft, cheque and cash from bank accounts of the assessee company as well as balances in the bank accounts of the assessee company. Shri Vikas Arvindbhai Shah in his statement recorded on 10.02.2013 had stated that entries in the seized documents were related to Ants Multimedia Pvt. Ltd. as well as to Ants Studio Pvt. Ltd. On the basis of these materials, proceeding u/s.153C of the Act was initiated in the case of the assessee company. The assessment was completed u/s.153C r.w.s. 143(3) of the Act on 31.12.2015 at total income of Rs.45,59,380/, wherein various additions were made in respect of disallowance of expense pertaining to issue of share capital, addition on account of cash deposit in the bank account and addition on account of unexplained investment. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 7 – 14. Aggrieved with the order of the AO, the assessee had filed the appeal before the First Appellate Authority, which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Now, the assessee is in second appeal before us. 15. At the outset, Shri Suresh Gandhi, the Ld. AR of the assessee did not press Ground Nos. 1, 4 & 5. Accordingly, these three grounds are dismissed. 16. Ground No.2 pertains to addition of Rs.35,51,544/- on account of cash deposit in the bank account of the assessee. The assessee was having an Account No.029605500088 with ICICI Bank wherein cash deposit of Rs.35,51,544/- was made during the year on various dates. The assessee had explained that this cash deposit represented share application money received from Shri Vikas Arvindbhai Shah. The AO had rejected this evidence for the reason that no cash book was found in the course of search at the premises of Shri Vikas Arvindbhai Shah. Further, the nexus of withdrawal from the bank account of Shri Vikas Arvindbhai Shah vis-à-vis the deposits in the bank account of the assessee was not explained. Therefore, the AO had treated the entire cash deposit of Rs.35,51,544/- as unexplained income of the assessee u/s.68 of the Act. 17. Shri Suresh Gandhi, the Ld. AR of the assessee explained that the AO did not dispute the fact that share application money was received by the assessee from its Director Shri Vikas IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 8 – Arvindbhai Shah during the year. He further submitted that the statement of bank account of Shri Vikas Arvindbhai Shah was produced before the AO in which total withdrawal of Rs.33,11,176/- was appearing. Under these circumstances, the AO was not correct in treating the entire cash deposit of Rs.35,51,544/- in the bank account of the assessee as unexplained. 18. Per contra, Shri B. P. Srivastav, Ld. Sr. DR supported the orders of the AO and the Ld. CIT(A). He submitted that when the total withdrawal in the bank account of Shri Vikas Arvindbhai Shah was less than the cash deposits appearing in the bank account of the assessee, the source of the deposits could not have been satisfactorily explained. 19. We have considered the rival submissions. The fact that there was cash deposit of Rs.35,51,544/- in the bank account of the assessee is not under dispute. The contention of the assessee is that this deposit was out of share application money received in cash from Shri Vikas Arvindbhai Shah. At the same time, the total cash withdrawal from the bank account of Shri Vikas Arvindbhai Shah was to the extent of Rs.33,11,176/- only. The assessee has not explained as to why the share application money was not directly transferred by Shri Vikas Arvindbhai Shah from his bank account through cheque. The AO has also given a finding that the cash withdrawals made by Shri Vikas Arvindbhai Shah was utilized towards gift expense of Rs.18 Lakhs and household personal expense of Rs.4,20,000/-, which has not been IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 9 – controverted by the assessee. After taking into account these deployment of funds, Shri Vikas Arvindbhai Shah could have utilized a sum of Rs.10,91,176/- only towards share application money in cash. Thus, even if we accept the fact that the share application money from Shri Vikas Arvindbhai Shah was received in cash, the source thereof was explained to the extent of Rs.10,91,176/- only. This fact was also accepted by the AO in the assessment order. However, there was no explanation given by the assessee for the balance cash deposit of Rs.24,60,368/-. Under the circumstances, the source of cash deposit of Rs.24,60,368/- in the bank account remains unexplained. Therefore, the addition made by the AO on account of cash deposit in the bank account is upheld to the extent of Rs.24,60,368/-, the source of which is unexplained. The ground taken by the assessee is allowed in part. 20. The Ground No.3 pertains to addition of Rs.10,25,731/- on account of unexplained investment. The AO found that in the seized document, page no.22 of Annexure – ‘AA/2’ had a printout of summary on unexplained loan of Ants Group. In this summary, Ants Group had shown the assessee as a depositor for an amount of Rs.10,23,600/-. However, no such investment was appearing in the balance sheet of the assessee. The AO, therefore, treated this balance as unexplained investment of the assessee and made addition of Rs.10,25,731/-. 21. Shri Suresh Gandhi, Ld. AR submitted that the actual amount appearing in the seized document was Rs.10,23,600/- IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 10 – whereas the AO had made addition of Rs.10,25,731/-, which was not correct. On merits, he submitted that the seized document was only a group summary of unsecured loans of Ants Group, which was not final. He submitted that only transactions as recorded in the books of accounts and duly audited should be considered as final. According to the Ld. AR the entries appearing in respect of unsecured loans of Ants Group as appearing in the seized documents were unverified figures and were not co-related with the books of accounts. He further submitted that it was not the case of the AO that this amount of Rs.10,23,600/- was appearing as loan from assessee in the books of accounts of M/s. Ants Studio Pvt. Ltd. He, therefore, submitted that the entire addition was based on wrong premise. 22. Per contra, Shri B. P. Srivastav, Ld. Sr. DR supported the orders of the AO & the Ld. CIT(A). 23. We have considered the rival submissions. This addition is based on the basis of Page No.22 of Annexure – ‘AA/2’ which is found to be as under: IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 11 – The seized document has group summary of unsecured loans of Ants Group. From the entries as appearing in the seized document, it cannot be conclusively established that the assessee had advanced loan of Rs.10,23,600/- to Ants Studio Pvt. Ltd. Further, loan balances were appearing in respect of other group companies also and even the loan balances of Ants Studio Pvt. Ltd. were appearing therein. The AO did not co-relate the entries appearing in the seized documents with the books of accounts/balance sheet of the concerned companies in order to establish that the entries as appearing in the seized documents were correct and reliable. In order to treat the sum of Rs.10,23,600/- as unsecured loan advanced by the assessee company to Ants Studio Pvt. Ltd., it was necessary to co-relate this entry not only with the books of accounts of the assessee but also with the books of accounts of M/s. Ants Studio Pvt. Ltd. Merely because this entry was not appearing in the books of account/balance sheet of the assessee, the investment could not have been held as unexplained. The AO should have verified the books of accounts/balance sheet of M/s. Ants Studio Pvt. Ltd. and given a categorical finding as to whether any loan of Rs.10,23,600/- from the assessee company was appearing in the books of accounts/balance sheet of M/s. Ants Studio Pvt. Ltd. In the absence of any such co-relation the correctness of the addition as made by the AO can’t be ascertained. The matter is, therefore, set aside to the file of the AO to first verify whether any such loan of Rs.10,23,600/-advanced by the assessee was appearing in the books of accounts/balance sheet of the assessee and thereafter IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 12 – re-decide the matter. The ground taken by the assessee is allowed for statistical purposes. 24. In the result, appeal of the assessee is partly allowed. IT(SS)A No. 120/Ahd/2021 for A.Y. 2012-13 25. The assessee has taken following grounds in this appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs. 18,00,000/- originally made by the AO, in respect of share application money received. 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.9,17,300/- originally made by the AO, in respect of accounted and explained cash found deposited in the bank account. 3. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.68,80,400/- originally made by the AO on protective basis and under section 68 of the Act, in respect of unsecured loan accepted from Chhaya Shah and Vikas Shah. 4. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs. 5,00,000/- originally made by the AO in respect of payment of remuneration, by arbitrarily holding that the same was liable for TDS and thus covered under section 40(a)(ia) of the Act. 5. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs. 18,065/-, originally made by the AO, in respect of lump-sum disallowance of 20% of various specified heads of expenses. The Appellant humbly submits and prays that the following additional ground of appeal, which is of legal nature, may please be admitted, despite the fact of the same not having been raised at the lower levels. 6. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 153C r.w.s. 153A r.w.s. 143(3) of the Act. He did these clearly against the IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 13 – provisions of law, as interpreted by various judicial authorities.” 26. The first two grounds taken by the assessee pertain to addition of Rs.27,17,300/- made by the AO in respect of cash deposits in the bank account of the assessee. The total cash deposit made during the year in the bank account of the assessee with ICICI Bank was Rs.27,17,300/-. It was explained that a sum of Rs.18 Lakhs was received as share application money from Shri Vikas Arvindbhai Shah in cash, which was deposited in the bank account. The balance amount of Rs.9,17,300/- was also explained as cash received from Shri Vikas Arvindbhai Shah, the Director of assessee company. The AO was, however, not satisfied with the explanation of the assessee and treated the entire cash deposit of Rs.27,17,300/- as unexplained income of the assessee. 27. Shri Suresh Gandhi, Ld. AR of the assessee submitted that the fact regarding receipt of share application money of Rs.18 Lakhs in cash from Shri Vikas Arvindbhai Shah was not disputed by the AO. Further, huge addition was made in the case of Shri Vikas Arvindbhai Shah on account of cash received on land dealing transactions. Therefore, the cash was available with Shri Vikas Arvindbhai Shah, which was transferred to the assessee company and, therefore, the source of entire cash deposit of Rs.27,17,300/- in the bank account of the assessee was duly explained. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 14 – 28. Per contra, Shri B. P. Srivastav, Ld. Sr. DR submitted that the AO had critically examined the withdrawals from the bank account of Shri Vikas Arvindbhai Shah and a finding was given that no fund was available with Shri Vikas Arvindbhai Shah which could have been deposited in the bank account of the assessee. He, therefore, strongly supported the orders of the AO & the Ld. CIT(A). 29. We have considered the rival submissions. The contention of the assessee is that the share application money of Rs.18 Lakhs was received from Shri Vikas Arvindbhai Shah in cash. In support thereof, a cash book of Shri Vikas Arvindbhai Shah was furnished before the AO in the course of assessment proceeding. The AO had rejected this evidence for the reason that no such cash book was found in the course of search at the premises of Shri Vikas Arvindbhai Shah. Neither any such cash book was produced in the course of assessment proceeding in the case of Shri Vikas Arvindbhai Shah. These facts have not been controverted by the assessee and, therefore, the AO had rightly rejected the evidence in the form of cash book of Shri Vikas Arvindbhai Shah produced before him. The assessee has not explained as to why the share application money was given in cash by Shri Vikas Arvindbhai Shah, when he was maintaining a bank account and why the amounts were not transferred directly from bank account of Shri Vikas Arvindbhai Shah to the bank account of the assessee company through cheque or electronic mode. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 15 – 30. The assessee had also filed a copy of the bank statement of ICICI Bank of the assessee, a copy of which is available in the paper book filed. It is found that the share application money totaling to Rs.18 Lakhs was received in cash on seven different occasions. However, there is no one-to-one co-relation of the share application money with the cash deposits in the bank account of the assessee. Further, the assessee has also not established the nexus between the cash withdrawals from the bank account of Shri Vikas Arvindbhai Shah and their deposits in the bank account of the assessee. Further, the AO has given a finding that cash withdrawal from the bank account of Shri Vikas Arvindbhai Shah was Rs.2,87,300/- only whereas his personal household expenses were to the extent of Rs.4,80,000/-. Therefore, no fund was available with Shri Vikas Arvindbhai Shah for depositing the same, in cash, in the bank account of the assessee. In addition, Shri Vikas Arvindbhai Shah had also invested Rs.10 Lakhs in cash in share application money of M/s. Mansi Infrabuild Pvt. Ltd. Considering these evidences, the AO had treated the entire cash deposit of Rs.27,17,300/- as unexplained. The assessee has been unable to controvert the findings regarding insufficient cash withdrawals from his bank account. In the absence of any cogent evidence to explain the source of cash deposits in the bank accounts of the assessee, we do not find any reason to interfere with the order of the AO, which has been rightly upheld by the Ld. CIT(A). The addition of Rs.27,17,300/- in respect of unexplained cash deposits is confirmed and the Ground Nos. 1 & 2 as taken by the assessee are dismissed. IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 16 – 31. Ground No.3 pertains to addition of Rs.68,80,400/- made by the AO on protective basis in respect of unsecured loans taken by the assessee. The assessee has taken loans of Rs.36,92,000/- from Shri Vikas Arvindbhai Shah, Rs.31,88,400/- from Smt. Chhaya Vikas Shah and Rs.49 Lakhs from M/s. Mansi Infrabuild Pvt. Ltd. While the loan transaction of M/s. Mansi Infrabuild Pvt. Ltd. was accepted, the AO had made addition for loans taken from Shri Vikas Arvindbhai Shah and Smt. Chhaya Vikas Shah in the hand of the assessee on protective basis. 32. Shri Suresh Gandhi, Ld. AR submitted that no substantive addition was made by the AO in the hands of Shri Vikas Arvindbhai Shah and Smt. Chhaya Vikas Shah. Therefore, the protective addition as made by the AO in the hand of the assessee can’t survive. He further submitted that evidences to prove the identity, creditworthiness and genuineness of the loan transactions were duly filed before the Ld. CIT(A), which was not taken into account. Therefore, the order of the Ld. CIT(A) was unjustified and unsustainable. On the other hand, Ld. Sr. DR supported the orders of the lower authorities. 33. We have considered the rival submissions. It is found that the assessee had submitted evidences in the form of PAN, Aadhar Card, loan confirmation, bank statement copy, copy of ITR of the loan creditors before the Ld. CIT(A) to establish the identity, genuineness and creditworthiness. However, these additional evidences were not admitted by the Ld. CIT(A). The assessee had filed only copy of ledger account and the copy of bank IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 17 – statement of the loan creditors before the AO. It is also found that both the loan creditors were assessed under the jurisdiction of the same AO. Under these circumstances, the AO should have examined whether the loans advanced by Shri Vikas Arvindbhai Shah and Smt. Chhaya Vikas Shah to the assessee were disclosed in their Income-tax returns or not. Be that as it may, by making the addition in the hands of the assessee on protective basis, the AO had accepted the genuineness of the loan transactions. Further, since both the loan creditors were directors of the assessee company their identity was not under dispute. As regarding their creditworthiness, if the AO had any doubt in this respect, the addition should have been made in their respective hands. There was no case for the AO to make the addition in the hands of the assessee, even on protective basis. Considering the fact that the assessee had brought on record the evidences to establish the identity, genuineness and creditworthiness of the loan transactions and that both the loan creditors were Directors of the assessee company, no addition was called for in the hands of the assessee. Therefore, the protective addition of Rs.68,80,400/- in the hands of the assessee is deleted. The ground taken by the assessee is allowed. 34. The ground no.-4 pertains to disallowance of Rs.5 Lakhs u/s.40a(ia) of the Act. The AO found that the assessee has paid Director’s remunerations of Rs.5 Lakhs to the assessee on which no TDS was made. According to the AO, this payment was subject to TDS u/s.194J(1)(ba) of the Act. Shri Suresh Gandhi, Ld.AR submitted that the provision of Section 194J(1)(ba) of the IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 18 – Act was introduced w.e.f. 01.07.2012 i.e. from the A.Y. 2013-14. Therefore, the disallowance as made by the AO in the current year was not correct. 35. We have considered the submission of the assessee. It is found that the provision of Section 194J(1)(ba) of the Act was brought on statute w.e.f. 01.07.2012. Therefore, this provision was applicable to the Director’s remuneration paid after 01.07.2012 only. Since, the Director’s remuneration of Rs.5 Lakhs in this case was received prior to 01.07.2012 i.e. during the F.Y. 2011-12, no disallowance u/s.194J(1)(ba) r.w.s. 40a(ia) of the Act could have been made in this year. Therefore, the addition as made by the AO is deleted. The ground is allowed. 36. The ground no-5 pertains to disallowance of expense of Rs.18,065/- u/s.37 of the Act. The AO found that no bills and vouchers in respect of miscellaneous expense, repairs and maintenance expense, traveling expense and electric expense were available. He, therefore, made ad hoc disallowance of 20% of the expense. The Ld. AR submitted that the disallowance made by the AO was excessive. Per contra, the ld. Sr. DR supported the order of the AO. 37. We have considered the submissions. The fact that the assessee was unable to produce the bill and vouchers in respect of the expenses as flagged by the AO, is not under dispute. However, the AO has not given any reason for making the IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 19 – disallowance of the expenses @ 20%. Considering the totality of the facts and the nature of expense, the disallowance as made by the AO is restricted to 10%. The AO is directed to allow necessary relief to the assessee accordingly. The ground taken by the assessee is allowed in part. 38. Ground No.6, which is the legal ground, was not pressed by the assessee in the course of appeal, hence dismissed. 39. In the result, appeal of the assessee is partly allowed. IT(SS)A No. 121/Ahd/2021 for A.Y. 2013-14 40. The assessee has taken following grounds in this appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs. 15,36,060/-, originally made by the AO, in respect of cash deposited in the bank account (including Rs.6,00,000/- sourced out of share application money), treating the same as unexplained income. 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs.3,00,000/-originally made by the AO, in respect of payment of remuneration, by invoking the provisions of section 40(a)(ia) of the Act. 3. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs.8,670/- originally made by the AO, in respect of lump-sum disallowance of 20% of various specified heads of expenses. The Appellant humbly submits and prays that the following additional ground of appeal, which is of legal nature, may please be admitted, despite the fact of the same not having been taken at the lower levels. 4. Without prejudice and through this additional legal ground, the Appellant challenges the invocation of the provisions of section 153C and consequential passing of the assessment order under section 153C r.w.s. 153A r.w.s. 143(3) of the Act by the AO, IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 20 – which are against the express provisions of law, thus bad in law as well as on facts.” 41. Ground Nos. 1, 3 & 4 are identical to the grounds as decided in IT(SS)A No.120/Ahd/2021. Therefore, the decision taken in IT(SS)A No.120/Ahd/2021 is applicable mutatis mutandis in respect of these three grounds. 42. Ground No.2 pertains to disallowance of Rs.3 Lakhs in respect of payment of Director’s remuneration made u/s.194J(1)(ba) r.w.s. 40a(ia) of the Act. The payment of Director’s remuneration is squarely covered by the provision of Section 194J(1)(ba) of the Act, which was introduced w.e.f. 01.07.2012. The Ld. AR submitted that the provision of Section 194J(1)(ba) of the Act is applicable to those payments which are not covered u/s.192 of the Act and, therefore, the disallowance as made by the AO was not correct. On the other hand, the ld. Sr. DR supported the order of the lower authorities on this issue. 43. We have considered the rival submissions. It is true that provision of Section 194J(1)(ba) of the Act is applicable only to the remuneration, other than on which tax is deductible u/s.192 of the Act. However, the assessee has not brought on record any evidence to show that it had deducted tax u/s. 192 of the Act on the remuneration paid to Directors. Therefore, the matter is set aside to the file of the Jurisdictional AO with a direction to verify as to whether any TDS was made u/s.192 of the Act on the Director’s remuneration paid by the assessee. If yes, then no disallowance u/s.40a(ia) rws 194J(1)(ba) of the Act, is IT(SS)A Nos. 118 to 121/Ahd/2021 [Ants Multimedia Pvt. Ltd. vs. DCIT] - 21 – required to be made. The ground taken by the assessee is allowed for statistical purposes. 44. In the result, appeal of the assesse is allowed in part. 45. The final outcome of these appeals is summarized in the table below: Sl. No. ITA No. A.Y. Outcome 1 IT(SS)A No. 118/Ahd/2021 2010-11 Allowed 2 IT(SS)A No. 119/Ahd/2021 2011-12 Partly allowed 3 IT(SS)A No. 120/Ahd/2021 2012-13 Partly allowed 4 IT(SS)A No. 121/Ahd/2021 2013-14 Partly allowed This Order pronounced on 16/04/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 16/04/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "