M/s Uniways Agri-Commodities Pvt. Ltd., Bhopal V. The ACIT, 3(1), Bhopal

CO 43/IND/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1746 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ANIL KHAA; SUMIT KHAA CAS
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard; Deemed to accrue or arise in india; Speculation loss; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A.NO. 47/IND/2013 A.Y. : 2009-10 ACIT, 3(1), M/S.UNIWAYS AGRI-COMMODATION PRIVATE LIMITED, BHOPAL VS. E-6, MIG-127, ARERA COLONY, BHOPAL APPELLANT RESPONDENT PAN NO.AABCU0306P C.O.NO.43/IND/2013 (ARISING OUT OF I.T.A.NO. 47/IND/2013 ) A.Y. : 2009-10 ACIT, 3(1), M/S.UNIWAYS AGRI-COMMODATION PRIVATE LIMITED, BHOPAL VS. E-6, MIG-127, ARERA COLONY, BHOPAL APPELLANT RESPONDENT DEPARTMENT BY : SHRI R. A. VERMA, DR ASSESSEE BY : SHRI ANIL KHABYA AND SHRI SUMIT KHABYA, CAS DATE OF HEARING : 08.10.2015. DATE OF PRONOUNCEMENT : 01.12.2015 2 2 O R D E R PER D. T. GARASIA, J.M. APPEAL BY THE DEPARTMENT AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)-I I, BHOPAL, FOR ASSESSMENT YEAR 2009-10. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN 1. DELETING THE ADDITION OF RS. 2,22,90,750/- MADE B TO ON ACCOUNT OF SPECULATION LOSS ON INVESTMENT SET OFF A GAINST BUSINESS INCOME. 2. DELETING THE ADDITION OF RS. 2,38,738 MADE B Y THE ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME-TAX ACT, 1961. 3. DELETING THE ADDITION OF RS. 6,93,490/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF INT EREST PAID ON BORROWED FUNDS GIVEN AS INTEREST FREE LOAN. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY HAS BEEN INCORPORATED WITH THE OBJECTIVE OF TRADING IN 3 3 AGRICULTURAL AND BIOTECH PRODUCTS. DURING THE YEAR UNDER CONSIDERATION, NIL RECEIPTS HAVE BEEN DECLARED AND RETURN HAS BEEN FILED ON 28.09.2009 DECLARING SPECULATIVE LOSS OF RS. 1,20,30,750/-. GROUND NO. 1 : 4. ON GOING THROUGH THE PROFIT AND LOSS ACCOUNT OF THE COMPANY IT WAS OBSERVED BY THE ASSESSING OFFICER TH AT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 2,22,90,750/- AS LOSS ON INVESTMENT UNDER THE HEAD ADMINISTRATION AND OFFICE EXPENSES. THE ASSESSEE HIMSELF DECLARED THAT THIS IS LOSS ON INVESTMENT WHICH IN FACT IS NOT THE BUSINESS ACTIVITIES OF THE ASSESSEE COMPANY. THIS LOSS EXACTLY PERTAINS TO INVESTMENT A ND SHOULD HAVE BEEN SHOWN UNDER THE HEAD CAPITAL GAIN. BASICA LLY BY DEBITING THE SAME IN THE PROFIT AND LOSS ACCOUNT, T HE ASSESSEE COMPANY HAS REDUCED ITS MAIN BUSINESS ACTIVITIES PR OFIT. IN THE RETURN THE ASSESSEE HIMSELF HAS BIFURCATED THE LOSS OF RS. 2,22,90,750/- TO SPECULATIVE LOSS OF RS. 1,27,39,75 0/- AND THE BALANCE WAS CONSIDERED NORMAL BUSINESS LOSS. THE A SSESSEE HIMSELF HAS ACCEPTED THE FACT THAT THE TOTAL LOSS I S OF SPECULATIVE NATURE GENERATED FROM THE INVESTMENTS. SINCE THE IN VESTMENT ON LOSS OF RS. 2,22,90,750/- DID NOT PERTAIN TO THE BU SINESS OF THE 4 4 COMPANY, THE AO DISALLOWED AND ADDED THE SAME TO TH E INCOME OF THE ASSESSEE. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASS ESSEE HAS MADE FOLLOWING SUBMISSIONS :- THE ASSESSEE COMPANY WAS INCORPORATED WITH OBJECTIV E OF TRADING IN AGRICULTURE COMMODITIES. HOWEVER, DURING THE FINANCIAL YEAR 2008-09 IT DID NOT CARRY ON ANY NORMAL BUSINES S TRANSACTION AND FILED RETURN OF INCOME WITH NIL INCOME AND SPEC ULATION LOSS OF RS. 1,20,30,750/-. THE COMPUTATION OF INCOME IS HERE BY PROVIDED FOR KIND REFERENCE. AS SPECULATION LOSS CANNOT BE SE T OFF WITH OTHER HEAD OF INCOME BUT CAN ONLY BE ADJUSTED AGAINST ANY SPECULATION INCOME IN CURRENT YEAR AND IF NOT FULLY SET OF THEN CARRIED FORWARD TO NEXT ASSESSMENT YEAR, THE SAME WAS CARRIED FORWA RD. THE AO, WHILE ACKNOWLEDGING THE FACT THAT THE ASSESS EE INCURRED SPECULATION LOSS, HAS WRONGLY CONCLUDED THAT THE AS SESSEE HAS FILED A LOSS RETURN CLAIMING CARRY FORWARD OF LOSS RS. 1,20,30,750/- AS NORMAL BUSINESS LOSS. WHILE FILING THE RETURN OF INCOME THE ASSESSEE HAS ADDED BACK SPECULATION LOSS OF RS. 1,27,30,750/- AND FURTHER ADDED BACK A SUM OF RS. 1,03,10,460/- U/S 37. THE NET BUSINESS INCOME (ORDI NARY) COMPUTED BY THE ASSESSEE WAS NIL. WHILE COMPUTING S PECULATION 5 5 LOSS THE ASSESSEE HAS HIMSELF ADDED BACK ESTIMATED EXPENSES OF RS. 7 LAKHS WHICH INCLUDED INTEREST PAYMENT OF RS. 6, 93,490/- AND COMPUTED THE SAME AT RS. 1,20,30,750/-. THE AO WITHOUT UNDERSTANDING THE COMPUTATION OF LOSS RETURN OF RS. 1,20,30,750/- ADDED BACK RS. 2,22,90,750 WHICH WA S DEBITED IN PROFIT AND LOSS ACCOUNT AS LOSS IN INVE STMENT WHEN SUCH AMOUNT WAS NEVER CLAIMED AS DEDUCTION BY THE A SSESSEE WHILE COMPUTING NORMAL BUSINESS INCOME. THE AO DID N OT REFER TO THE RETURN OF INCOME IN PARTICULAR COMPUTATION OF B USINESS INCOME. 6. THE LD. DR RELIED ON THE ORDER OF THE AO. 7. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) DELETED THE ADDITION. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE AO, WHI LE CONSIDERING THE FACT THAT THE ASSESSEE HAS INCURRED SPECULATION LOSS AND HAS WRONGLY CONCLUDED THAT THE ASSESSEE HA S FILED A LOSS RETURN CLAIMING CARRY FORWARD OF LOSS AT RS. 1 ,20,30,750/- AS NORMAL BUSINESS LOSS. THE ASSESSEE HAS ADDED BAC K SPECULATION LOSS OF RS. 1,27,30,750/- WHILE FILING THE RETURN OF INCOME AND FURTHER ADDED BACK A SUM OF RS. 1,03,10 ,460/- U/S 37. THE NET BUSINESS INCOME COMPUTED BY THE ASSESSE E WAS 6 6 NIL. WHILE COMPUTING THE SPECULATION LOSS THE ASSES SEE HAS HIMSELF ADDED BACK ESTIMATED EXPENSES OF RS. 7 LAKH S WHICH INCLUDED INTEREST PAYMENT OF RS. 6,93,490/- AND COM PUTED THE SAME AT RS. 1,20,30,750/-. IT WAS THE SUBMISSION O F THE ASSESSEE THAT THE AO WITHOUT UNDERSTANDING THE COMP UTATION OF LOSS RETURN OF RS. 1,20,30,750/- ADDED BACK RS. 2,2 2,90,750/-, WHICH WAS DEBITED IN PROFIT AND LOSS ACCOUNT AS LO SS IN INVESTMENT WHEN SUCH AMOUNT WAS NEVER CLAIMED AS D EDUCTION BY THE ASSESSEE WHILE COMPUTING NORMAL BUSINESS INC OME. THE AO DID NOT REFER TO THE RETURN OF INCOME IN PARTICU LAR COMPUTATION OF BUSINESS INCOME. THE ASSESSEE HIMSEL F HAS ACCEPTED THE FACT THAT THE TOTAL LOSS IS OF SPECULA TIVE NATURE GENERATED FROM THE INVESTMENTS. THE LD. CIT(A) HAS NOT GIVEN ANY FINDING TO THE SAME. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF AO WITH THE DI RECTION TO AFFORD AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND H E SHALL REFER TO THE COMPUTATION OF BUSINESS INCOME AND OTHER ASP ECTS AS DISCUSSED ABOVE AND THEN DECIDE THE MATTER AFRESH A S PER LAW. THE AO SHALL PASS A SPEAKING ORDER. CONSEQUENTLY, T HE GROUND NO.1 IS ALLOWED FOR STATISTICAL PURPOSES. 7 7 GROUND NO. 2 : 9. SECOND GROUND RELATES TO ADDITION OF RS. 2,38,783/- U/S 2(22)(E) BY TREATING RESERVES AND SURPLUSES OF RS. 2,38,783/- IN BALANCE SHEET OF UNI ARC PRIVATE LIMITED, AS DEEMED DIVIDEND. 10. THE AO MADE THE ADDITION BY OBSERVING AS UNDER :- ON GOING THROUGH THE BALANCE SHEET, THE AO OBSERVED THAT THE ASSESSEE COMPANY HAS RECEIVED LOAN OF RS. 105,18,350/- FROM UNI ARC PVT.LTD. THE SHAREHOLDING PATTERN OF THE ASSESSEE COMPANY AS SUBMITTED BY THE ASSESSEE SHOWED THAT UNI ARC PVT.LTD. HOLDS 1607600 SHARES OF THE ASSESSEE COMPANY OUT OF 1617600 SHARE S WHICH COMES TO 99.38%. THE PROVISIONS OF SECTION 2(22)(E) SPEAKS THAT 2(22)(E) ANY PAYMENT BY A COMPANY, NOT BE ING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF ANY SUM (WHETHER AS REPRESENTING A PART OF THE ASSETS O F THE COMPANY OR OTHERWISE) MADE AFTER THE 31 ST DAY OF MAY, 1987, BY WAY OF ADVANCE OR LOAN TO A SHAREHOLDER, B EING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIXED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS 8 8 THAN TEN PER CENT OF THE VOTING POWER, OR TO ANY CO NCERN IN WHICH SUCH SHAREHOLDER IS A MEMBER OR A PARTNER AND IN WHICH HE HAS A SUBSTANTIAL INTEREST (HEREAFTER IN T HIS CLAUSE REFERRED TO AS THE SAID CONCERN) OR ANY PAYMENT BY ANY SUCH COMPANY ON BEHALF, OR FOR THE INDIVIDUAL BENEF IT, OF ANY SUCH SHAREHOLDER, TO THE EXTENT TO WHICH THE CO MPANY IN EITHER CASE POSSESSES ACCUMULATED PROFITS. ' FURTHER, EXPLANATION-3(B) OF THIS SECTIO N SPEAKS THAT 'A PERSON SHALL BE DEEMED TO HAVE A SUBSTANTIAL INTERE ST IN A CONCERN, OTHER THAN A COMPANY, IF HE IS, AT ANY TIME DURING THE PREVIOUS YEAR, BENEFICIARY ENTITLED TO N OT LESS THAN 20 % OF THE INCOME OF SUCH CONCERN. IN BOTH THE COMPANIES I. E. UNI ARC PVT. LTD. AND THE ASSESSEE COMPANY DIRECTORS ARE COMMON. THE DIRECTOR S HOLDS SUBSTANTIAL INTEREST IN UNI ARC. THUS LOAN GIV EN BY THE UNI ARCH PVT. LTD. TO THE ASSESSEE COMPANY ATTRA CTS THE PROVISIONS OF SECTION 2(22)(E) OF THE IT ACT. AS PER THE BALANCE SHEET OF UNI ARC PVT. LTD. IT HAS RESERVES AND SURPLUS TO THE TUNE OF RS. 2,38,783/- .. SINCE THE ASSESSEE COMPANY HAS RECEIVED LOANS FROM UNI 9 9 ARC PVT. LTD. HENCE AMOUNT OF RS. 2,38,783/- ACCUMULATED RESERVES AND SURPLUS OF UNI ARC PVT. LTD. IS CONSIDERED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE COMPAN Y AND ACCORDINGLY ADDED BACK TO THE TOTAL INCOME OF T HE ASSESSEE. 11. THE LD. DR RELIED ON THE ORDER OF THE AO. 12. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASS ESSEES SUBMISSIONS MADE ON THIS GROUND ARE REPRODUCED AS U NDER :- THE AO HAS COMPLETELY MIS-INTERPRETED PROVISION OF S EC 2(22)(E). UNDER THE PROVISIONS OF SEC 2(22)(E) ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBL IC ARE SUBSTANTIALLY INTERESTED, OF ANY SUM (WHETHER A S REPRESENTING A PART OF THE ASSETS OF THE COMPANY OR OTHERWISE) MADE, BY WAY OF ADVANCE OR LOAN TO A SHAREHOLDER, BEING A PERSON WHO IS THE BENEFICIAL OWNER OF THE SHARES HOLDING NOT LESS THAN 10 % OF THE VOTING POWER, OR TO ANY CONCERN IN WHICH SUCH SHAREHOLDER IS A ME MBER OR A PARTNER AND IN WHICH HE HAS A SUBSTANTIAL INTE REST OR ANY SUCH SHAREHOLDER , TO THE EXTENT TO WHICH THE COMPANY 10 10 IN EITHER CASE POSSESSES ACC UMULATED PROFITS IS TREATED AS DEEMED INCOME OF THAT SHAREHOLDER. SEC2(22}(E) CLEA RLY TREATS PAYMENT MADE TO SHAREHOLDER HAVING NOT LESS THAN 10 % HOLDING OR TO FIRM IN WHICH THE SHAREHOLDER HAS SUBSTANTIAL INTEREST AS MEMBERS OR PARTNER AS HIS DIVIDEND INCOME. 1N THIS CASE THE ASSESSEE HAS RECE IVED LOAN BY ITS SHAREHOLDER (UNI ARC PVT LTD) AND THE AS SESSEE COMPANY DOES NOT HOLD ANY SHARE IN LENDER COMPANY M IS UNI ARC PVT LTD . SO FAR AS QUESTION OF COMMON DIRECTORS ARE CONCERNED .SEC 2(22}(E) HAS NO PROVISION TO TRE AT LOAN BY A COMPANY TO ANOTHER COMPANY AS DEEMED DIVIDEND. THERE IS NO RESTRICTION ON DIRECTORSHIP. ' 13. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) DELETED THIS ADDITION BY OBSERVING AS UNDER :- 4.2 ON PERUSAL, APPELLANT'S SUBMISSIONS ARE FOUND ACCEPTABLE. THE APPELLANT COMPANY IS NOT FOUND TO HAVE HELD ANY SHARE IN THE LENDER COMPANY VIZ. M/S. UNI ARC PVT. LTD. WHO HAS ADVANCED LOAN OF RS. 1,05,18,350/- THOUGH BOTH HAVE COMMON DIRECTORS. PROVISIONS OF SEC.2(22)(E) ARE REPRODUCED AS UNDER; 11 11 '2(22) ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF ANY SUM (WHETHER AS REPRESENTING A PART OF THE ASSETS OF THE COMPANY OR OTHERWISE) [MADE AFTER THE 31ST DAY OF MAY, 1987, BY WAY OF ADVANCE OR LOAN TO A SHAREHOLDER, BEING A PERSON WH O IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIXED RATE OF DIVIDEND WHETHER WITH O R WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS THAN TEN PER CENT OF THE VOTING POWER, OR TO A NY CONCERN IN WHICH SUCH SHAREHOLDER IS A MEMBER OR A PARTNER AND IN WHICH HE HAS A SUBSTANTIAL INTEREST (HEREAFTER IN THIS CLAUSE REFERRED TO AS THE SAID CONCERN] OR ANY PAYMENT BY ANY SUCH COMPANY ON BEHALF, OR FOR THE INDIVIDUAL BENEFIT, OF ANY SUCH SHAREHOLDER, TO THE EXTENT TO WHICH THE COMPANY IN EITHER CASE POSSESSES ACCUMULATED PROFITS' THUS THE PROVISIONS STIPULATE PAYMENT BY A COMPANY (I.E. LENDER CO.) TO ITS SHAREHOLDER HOLDING NOT LESS THAN 10% O F THE VOTING POWER OR TO ANY CONCERN IN WHICH SUCH SHAREHOLDER I S A MEMBER OR PARTNER HAVING A SUBSTANTIAL INTEREST. SHAREHOLD ING PATTERN OF 12 12 THE LENDER CO. I.E. M/S. UNI ARC PRIVATE LIMITED IS FOUND BE AS UNDER, AS PER ITS ANNUAL RETURN :- S.NO. NAME OF THE SHAREHOLDER NO. OF SHARES AMOUNT (RS.) % OF HOLDING 1. ANIL AGRAWAL 5000 50,000 0.17 2. NITIN GARG 2500 25 , 000 0.08 3. NITIN GOYAL 2500 25,000 0.08 4. UNIQUEWAYS MANAGEMENT SERVICES PVT.LTD. 29,90,000 2,99,00,000 99.67 THUS THE APPELLANT CO. IS NOT A SHAREHOLDER AT ALL IN THE LENDING COMPANY. FURTHER, FROM THE PERUSAL OF AUDITED BALAN CE SHEET OF M/S .UNI ARC PVT. LTD., IT IS SEEN THAT IT HAS NO AM OUNT OF RESERVES & SURPLUS AVAILABLE WITH IT AS ON 31.03.2008 FOR DI STRIBUTION DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION TO BE BROUGHT INTO THE AMBIT OF PROVI SIONS OF SEC.2(22)(E). THE AMOUNT OF RS. 2,38,783/-- TAKEN B Y THE A.O., REPRESENTS RESERVE/SURPLUS AS ON 31.03.2009 AVAILAB LE FOR DISTRIBUTION DURING PREVIOUS YEAR RELEVANT TO A Y 20 10-11. ON THE BASIS OF FACTS ABOVE AND AFTER PERUSAL OF RECORDS, A.O. IS NOT FOUND JUSTIFIED IN INVOKING PROVISIONS OF THE SEC.2 (22)(E) IN CASE OF THE APPELLANT COMPANY. ACCORDINGLY, ADDITION OF RS.2 ,38,783/- IS NOT FOUND SUSTAINABLE AND HEREBY DELETED. 13 13 14. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. THE LD. DR COULD NOT BRING ANYTHING CONTRARY TO THE FINDING OF THE LD. CIT(A). WE UPHOLD THE ACTION OF THE LD. CIT (A). OUR INTERFERENCE IS NOT REQUIRED. 15. CONSEQUENTLY GROUND NO. 2 OF THE DEPARTMENT IS REJECTED. GROUND NO. 3 : 16. GROUND NO. 3 RELATES TO DISALLOWANCE OF INTERESTS O F RS. 6,93,490/-. 17. THE AO MADE THE ADDITION BY OBSERVING AS UNDER :- ON GOING THROUGH THE BALANCE SHEET IT IS SEEN THAT THE ASSESSEE HAS GIVEN LOAN OF RS. 1,59,22,000/- TO UNIW AYS REALTERS. THIS LOAN IS GIVEN INTEREST FREE WHEREAS, IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAS CHARGED IN TEREST OF RS. 6,93,490/-. ON ONE HAND THE ASSESSEE IS CLAIMING EXPENDITURE OF INTEREST WHEREAS ON THE OTHER HAND I T IS GIVING INTEREST FREE LOANS TO OTHER. SINCE, THE LOAN IS GIVEN INTEREST FREE, THE INTEREST EXPENDITURE OF RS. 6,93,490/- DE BITED IN P & L ACCOUNT IS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 14 14 18. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT(A) DELETED THIS ADDITION BY OBSERVING AS UNDER :- 6.2 ON PERUSAL OF RECORDS, APPELLANT'S SUBMISSIONS ARE FOUND ACCEPTABLE. AS MENTIONED IN PRECEDING PARA 3.2 (PG.3-4) OF THIS APPEAL ORDER WH ILE REFERRING TO COMPUTATION OF INCOME AS PER RETURN FI LED BY APPELLANT, IT HAS ITSELF MADE DISALLOWANCE OF ALL EXPENSES IN FORM OF FINANCE CHARGES (RS.6,95,900/- INCLUDING INTEREST OF RS.6,93,490/-), AUDIT FEES (RS.2,206/-), DEMAT CHARGES (RS.2,900/-), LEGAL FEES (RS. 1 967/-) AND PRELIMINARY EXPENSES (RS.47,486/-) AND HAS DECLARED NIL BUSINESS INCOME. THUS, AO IS NO T FOUND JUSTIFIED IN MAKING SEPARATE ADDITION FOR DISALLOWANCE OF INTEREST. ACCORDINGLY, ADDITION OF RS.6,93,490/- IS, HEREBY, DELETED. 19. WE HAVE HEARD THE RIVAL CONTENTION S OF BOTH THE PARTIES. THE LD. DR COULD NOT BRING ANYTHING CONTRARY TO THE FINDING OF THE LD. CIT(A). WE UPHOLD HIS ACTION. OUR INTERFERE NCE IS NOT REQUIRED. CONSEQUENTLY, GROUND NO. 3 OF DEPARTMENT S APPEAL IS DISMISSED. CROSS OBJECTION NO. 43/IND/2013 : 20. THE FOLLOWING GROUND HAS BEEN TAKEN BY THE ASSESSE E :- THAT THE LD. CIT(A) ERRED IN MAINTAINING ADDITION OF RS 15 15 72,000/- TREATING SHARE APPLICATION MONEY AS UNEXPLAINED CREDIT. 21. THE FACTS ARE THAT DURING THE YEAR THE ASSESSEE HAS RECEIVED SHARE APPLICATION MONEY OF RS. 72,000/-. T HE DETAILS REGARDING IDENTITY, CREDITWORTHINESS OF INVESTOR AN D GENUINENESS OF THE TRANSACTION WERE NOT FURNISHED BY THE ASSESS EE COMPANY. SINCE THE ONUS WAS ON THE ASSESSEE COMPANY, WHICH W AS NOT DISCHARGED, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 22. AS PER THE ASSESSEE, SHARE APPLICATION MONEY WAS RECEIVED FROM RELATIVES OF DIRECTORS WHO ARE INCOME TAX ASSESSEES AND ASSESSED AT BHOPAL. COPY OF LEDGER AC COUNT WITH CONFIRMATION WAS GIVEN STATING THAT PROPER HEARING WAS NOT ALLOWED TO EXPLAIN THE MATTER. 23. THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 24. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) CONFIRMED THE ADDITION OF RS. 72,000/- HOLDING THAT THE ASSESSEE HAS FAILED MISERABLY TO PROVE ALL THE THRE E INGREDIENTS VIZ. IDENTITY AND CREDITWORTHINESS OF THE APPLICANT S ALONGWITH GENUINENESS OF THE TRANSACTIONS AND DISCHARGE EVEN THE PRIMARY ONUS. 16 16 25. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. WE FIND THAT THE ISSUE REQUIRES VERIFICATION AT THE END OF THE AO. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF AO , WHO SHALL DECIDE THIS MATTER AFTER AFFORDING OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE ASSESSEE SHALL PROVIDE ALL THE IN FORMATION AS ASKED BY THE AO TO PROVE THE THREE INGREDIENTS SUCH AS IDENTITY, CREDITWORTHINESS, AND GENUINENESS. 26. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION IS ALSO ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 1 ST DECEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 1 ST DECEMBER, 2015. CPU* 92311 17 17