VENUS DRUGS AND COSMETICS LTD,MUMBAI vs. ITO, WORD-8(3)(1), MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI SANDEEP GOSAIN () & SHRI OM PRAKASH KANT () Assessment Year: 2011-12
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated
31.07.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2011-12, raising following grounds:
1. On the facts and the circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of Foreign
Travelling Expenses of Rs.48,976 though the expenditure was incurred for the purpose of business.
On the fac learned CIT(A Development expenditure w the nature of business. 3. On the fac learned CIT(A Expenses of R nature. 4. On the fac learned CIT(A Expenses of R nature 5. On the fac learned CIT(A alleged bogus act though the 6. a) On the f the learned C increase in S though the ap the credit wor b) The AO ha has not given direction of th submission an On facts and S.68) are not made. 7. a) On the f the learned C Share Premiu the appellant premium. b) The AO ha has not given direction of th submission an Venus Dr ITA ts and the circumstances of the case and A) erred in confirming the disallowance Expenses of Rs.1,50,000 though was in the nature of revenue. The expend f day to day expenses incurred for the ts and the circumstances of the case and A) erred in confirming the disallowance Rs.37,603 though the said expenditure w ts and the circumstances of the case and (A) erred in confirming the disallowa Rs.23,543 though the said expenditure w ts and the circumstances of the case and A) erred in confirming the addition on s purchases of Rs.75,600 made by AO u/ e purchases were genuine. facts and the circumstances of the case CIT(A) erred in confirming the addition o Share Capital of Rs.50,55,980 under S.6 ppellant has proved sufficient document rthiness and identity of the applicants. as erred in not considering the details su n Remand report in spite of repeated he CIT(A). The CIT(A) failed to have cons nd documents filed. d circumstances of the case and law p applicable and hence no additions coul facts and the circumstances of the case CIT(A) erred in confirming the addition o um of Rs.67,25,020 under S.56(1) of the t has provided sufficient documents for as erred in not considering the details su n Remand report in spite of repeated he CIT(A). The CIT(A) failed to have cons nd documents filed. rugs and Cosmetics Ltd 2 A No. 5933/MUM/2025 d in law, the e of Product the said diture was in e purpose of d in law, the Trade Mark was revenue d in law, the ance Domain was revenue d in law, the n account of /s 69C of the and in law, on account of 68) of the act ts explaining ubmitted and request and sider the full provisions of ld have been and in law, on account of e act though charging the ubmitted and request and sider the full c) On facts a S.56(1) are no made. 8. a) On the f the learned C Share Warran (Times of Indi b) The learne CIT(A) erred failed to have On facts and are not applic could have b 2. At the outset, it of notice, neither d behalf of the assessee filed. In these circum A.Y. 2012-13 and ha time, we are constrai in pursuing the app appeal ex-parte qua the learned Departm record. 3. The facts in br return of income for declaring total incom by the assessee was engaged in the manu Venus Dr ITA and circumstances of the case and law p ot applicable and hence no additions cou facts and the circumstances of the case CIT(A) erred in confirming the addition o nt of Rs.90,00,000 issued to Bennet Cole ia) u/s 68 of the act. ed CIT(A) was provided with full deta in not considering the details submitted e consider the full submission and docume circumstances of the case and law provis cable to the facts of the case and hence been made. t is pertinent to record that des did any authorised representa e nor was any application seekin mstances, and noting that the ma as already remained pending f ined to hold that the assessee i peal. We therefore proceed to the assessee, after hearing the mental Representative (DR) and ief of the case are that the a r the year under consideration me of Rs.8,56,032/-. The return selected for scrutiny. The asses ufacturing of cosmetics product rugs and Cosmetics Ltd 3 A No. 5933/MUM/2025 provisions of ld have been and in law, on account of eman Co Ltd ails, however d. The CIT(A) ents filed. sions of S.68 no additions spite due service ative appear on ng adjournment atter pertains to for considerable is not interested adjudicate the submissions of d examining the ssessee filed its on 30.09.2012 n of income filed ssee was mainly ts. In the course of scrutiny, the Ass details of various exp travelling expenses o trade mark expenses from M/s Payal Ent related party detai considering the subm made following additi Add Disallowance out as discussed in p
Foreign Travel
As discussed in p
Out of Various E
As discussed in p
Unexplained Exp
As discussed in p
Unexplained Cas
As discussed in p
Unexplained Cas
As discussed in p
Income from Oth
As discussed in p
Taxable Total inc
Rounded off to 4. In relation to g noted that the Dire assessee failed to pr travel was undertak invoices, no evidence or business reports—
Officer or before the the learned CIT(A) co
Venus Dr
ITA sessing Officer asked the asse penses inter-alia penalty of Rs.
of Rs.48,976/-, product develop s, domain registration expenses terprises expenses purchases ils of share application mo mission of the assessee, the A ions:
t of expenses para (4) above
5000
para (5) above
48976
Expenses para (6) above
211147.60
penditure para (7) above sh Credits para (9) above sh Credits para (10) above her sources para (8) come ground No. 1 of the appeal, the ector travelled to Dubai and roduce any material demonstra en for business purposes. Apa e—such as meeting schedules, c
—was furnished either before
CIT(A). In absence of any nexus onfirmed the disallowance. Bef rugs and Cosmetics Ltd
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A No. 5933/MUM/2025
ssee to furnish
5,000/-, foreign pment expenses, purchase made made from the ney etc. After ssessing Officer
(-)1163343.40
75600
5055980
9000000
6725020
22003256.60
22003257
e learned CIT(A)
Bangkok. The ating that such art from certain correspondence, e the Assessing s with business, fore us also, no material whatsoever findings of the learne that the assessee fail
The ground No. 1 o dismissed.
5. The ground No disallowance of prod
The ground no. 3 rel
Rs.37,603/- /-. The expenses of Rs. Rs.2
the assessee incurre trademark charges, contended that the supporting evidence nature of services, o
Said arguments of t authorities. The lea issue. Before us, as evidence to establish these expenditures.
learned CIT(A) on th accordingly dismissed
6. The next groun purchases of Rs.75
Venus Dr
ITA r has been placed to contrad ed CIT(A). We find no infirmity in led to discharge its burden unde of the appeal of the assessee o. 2 of the appeal of the ass duct development expenses of late to disallowance of trade m ground No. 4 relates to doma
23,543/-. The Assessing Office ed ₹2,11,147/- towards produc
, and domain registration.
expenses improved product e—such as reports, invoices or proof of business necessity—
the assessee were not accepte arned CIT(A) sustained disallo well, the assessee has not prod h the business necessity or rev
Accordingly, we uphold the his issue. The ground No. 2 to d.
nd in relation to addition on ac
,600/-. The facts in brief qu rugs and Cosmetics Ltd
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A No. 5933/MUM/2025
dict the factual n his conclusion er section 37(1).
e is accordingly sessee relate to f Rs.1,50,000/-.
mark expenses of ain development r observed that ct development,
The assessee quality, yet no explaining the —was furnished.
ed by the lower owance on this duced any fresh venue nature of findings of the 4 of appeal are ccount of bogus ua the issue in dispute are that the A Investigation Wing involved in providing section 133(6) to the was informed of this or any corroborative learned CIT(A), not documents, confirma held that mere pro establish genuinenes substantiate the p
₹75,600/- stands con
7. The ground 6 r ground No. 7 relate ground No. 8 relat
Assessing Officer ma the Act share premiu of the Act. The learne and the evidence on onwards, held that:
Only identity of However, credi unproved;
Venus Dr
ITA
Assessing Officer received inform indicating that M/s Payal E g accommodation entries. A noti said concern remained unserve fact but failed to furnish an alte e evidence to establish receipt ting absence of delivery pr ations or discrepancies in stock oduction of purchase bills is ss. We concur that the assesse purchases, and therefore, th nfirmed.
relate to share capital at Rs.50
e to share premium of Rs.67
te to share warrant of Rs.90
ade addition of all these three cr um has been additionally consi ed CIT(A), after analysing the as n record in meticulous detail some subscribers may have bee itworthiness and genuinenes rugs and Cosmetics Ltd
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A No. 5933/MUM/2025
mation from the Enterprises was ce issued under ed. The assessee ernative address t of goods. The oofs, transport records, rightly insufficient to ee has failed to he addition of 0,55,980/-. The 7,25,020/- and 0,00,000/-. The redits u/s 68 of idered u/s 56(1) ssessment order from para 6.5
en established; s were wholly
Substantial jud were distinguish
The AO had jus especially in vie declining EPS;
The high share with insignifican
7.1 The learned CIT principles, including to pierce the corp transactions. He acc finding of the Ld. CIT
“6.5 Ground pertains to th at significan submitted co
86.96% along accounts, ph assessment o raised share of Rs. 67,25,0
issued 5 shar
90,00,000/-.
has discussed have subscrib
50,55,980/- a 8.4 to 8.33 a discussed by conditions as including rega length to esta elements i.e.
share subscr appellant befo the appellate
Venus Dr
ITA dicial precedents relied upon b hable on facts; stifiably applied the test of huma ew of the assessee’s weak financ premium was wholly unjustified nt business performance.
T(A) further relied on binding
McDowell & Co., that empower porate veil and examine the cordingly upheld the respective
T(A) is reproduced as under:
No. 7 to 10 and Additional Grounds (i).
he addition w.r.t. share capital raised du nt premium despite the appellant c onfirmations from major shareholders g with the details of their address, PA hotocopies of all shareholders. Vide pa order the AO has noted that the appel capital amounting to Rs. 50,55,980/- at 020/- during the year. Further, the appe re warrants of Rs. 18,00,000/- each am
Vide para 8.2 and 8.3 of the assessment d in detail including the names of 31 su bed to the shares of the company to the at cumulative premium of Rs. 67,25,020
and further para 9 to 11 elaborate deta y the AO completely establishing abse s envisaged in sec 68 of the Income Ta arding share warrants so issued. The AO ablish that the appellant failed to establis genuineness, creditworthiness and the i ribers. I have perused the documents fore the AO as well as the documents sub proceedings and I observed that at bes rugs and Cosmetics Ltd
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by the assessee an probabilities, cial position and d in a company
Supreme Court r tax authorities e substance of e additions. The .: This ground uring the year company had amounting to AN No., ledger ara 8 of the llant company t the premium llant company mounting to Rs.
t order, the AO bscribers who e extent of Rs.
0/-. Vide para ails have been ence of the 3
Tax Act, 1961,
O has gone at sh all the three identity of the filed by the bmitted during t only identity appears to h squarely faile principles i.e subscribers. M documents/ev merely assist
(ii). It is furth cited judgme primarily relie
(SC), Azaadi B
563, Bhopal F
Income Tax [
appellant has Ltd. 216 CTR various bench do bear some on the aspect case stands comprehensiv
The assessm detailed analy findings whic
Furthermore, decisions of t which have u veil of form a surrounding probability. T
Appellant, tho dislodge the based on a appellate for subscriptions numbers or I establish the Regarding th applicability o why the sub consistently lo profits. The A EPS since la tabulated in supports his f
(iii). Having co taken by the Venus Dr
ITA ave established by the appellant. The ed to establish the other 2 limbs of the e. genuineness and creditworthiness
Mere production of share application for vidences pertaining to these transactio t the appellant.
her observed that both the appellant and nts delivered by superior appellate for es on the cases like McDowells [1985]
Bachao Andolan & others v/s Union of Fire & General Insurance Limited v/s Co
[1964] 53 ITR 108 and several others.
s primarily relied upon the case of Lovely
R 195 and certain decisions of various Hig hes of ITAT. While the judgments cited by e thematic relevance to the issues involve t of procedural fairness-their applicability materially diluted in view of the ve factual matrix brought out by the Asse ent order, spanning various paragraphs ysis of financial records, reasoning, circu ch go beyond mere reliance placed by the Assessing Officer has relied u the Hon'ble Supreme Court-including McD upheld the authority of the tax departmen and examine the substance of a transac circumstances and preponderance
Therefore, the legal propositions adva ough not without academic merit, do n cogent findings recorded in the asse broader evidentiary foundation. Var rums have held in various cases that through banking channels or submitting
ITRs of the subscribers/investors is no e other 2 limbs of the mandated he arguments with respect to the dilu of section 56 it may be seen that it defies bscriber would invest at such a large p oss making company or in a company sh
AO's remarks with respect to consistent ast 4 years (from AY 2008-09 till AY para 8.12 (a) is consistent with the findings.
onsidered the same at length, I find that t appellant are not able to assail the find rugs and Cosmetics Ltd
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A No. 5933/MUM/2025
appellant has relevant legal of the share rms or certain ons does not d the AO have rums. The AO
154 ITR 148
India 256 ITR ommissioner of Similarly, the y Exports Pvt.
gh Courts and y the Appellant ed particularly to the present specific and essing Officer.
s, incorporates umstances and the appellant.
upon binding
Dowell & Co.,- nt to pierce the ction based on of human anced by the not sufficiently essment order rious superior t establishing g names, PAN ot sufficient to requirements.
uted EPS and s reason as to premium in a howing meager tly decreasing
Y 2011-12) as records and the arguments dings recorded by the AO in the AO exhib appellant. Ac grounds of a unexplained
50,55,980/- s share warra hereby confir
7.2 After going thro that the order is coge law. No rebuttal mate findings.
8. Having regard t absence of any contra find no infirmity in learned CIT(A). The a section 68 nor est expenditures.
9.The respective grou
10. In the result, the Order pronoun (SANDEEP G
JUDICIAL M
Mumbai;
Dated: 26/11/2025
Rahul Sharma, Sr. P.S.
Venus Dr
ITA detail and the judicial pronouncements r bit more applicability than that relied ccordingly, I am constrained to dismiss appeal and to confirm the additions o cash credit being share capital to the share premium to the extent of Rs. 67,2
ants to the extent of Rs.
90,0
rmed.”
ough the findings of the learned ent, reasoned, and supported by erial has been placed before us to the totality of the facts of th ary evidence filed by the assess the detailed and well-reasone assessee has not discharged its tablished the business purp unds of appeal are accordingly d appeal of the assessee is dismis ced in the open Court on 26/
-
S
GOSAIN)
(OM PRAK
MEMBER
ACCOUNTA rugs and Cosmetics Ltd
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relied upon by upon by the s the relevant on account of extent of Rs.
25,020/-, and 00,000/- are d CIT(A), we find y both facts and to dispute these he case, and in ee before us, we ed order of the s burden under ose of various dismissed.
ssed.
11/2025. KASH KANT)
ANT MEMBER
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
////
Venus Dr
ITA ded to :
BY ORDER
(Assistant Re
ITAT, Mu rugs and Cosmetics Ltd
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R, gistrar) umbai