M/S. TRINITY GLOBAL ENTERPRISES LTD.,JAIPUR vs. ITO, NEW DELHI

ITA 2122/DEL/2016Status: DisposedITAT Delhi12 January 2024AY 2011-12Bench: Dr. B. R. R. Kumar, Accountant Member Sh. Yogesh Kumar US (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence for the share application money and that the provisions of Section 40A(2)(b) were not attracted for the supervisory and risk management charges. The payment to Sh. Harpreet Singh Jolly and consultation charges were also allowed.

What were the facts?

The assessee company received Rs. 90 Lacs as share application money and paid supervisory and risk management charges to a sister concern. The Assessing Officer treated the share application money as unexplained cash credit and disallowed 70% of the charges paid to the sister concern.

What were the issues?

Whether the share application money received by the assessee is unexplained cash credit under Section 68. Whether the disallowance of supervisory and risk management charges paid to a sister concern under Section 40A(2)(b) is justified.

Which sections of the Income-tax Act were involved?

Section 68,Section 40A(2)(b)

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI

Before: Dr. B. R. R. KumarSh. Yogesh Kumar US

For Appellant: CA &
Hearing: 09.01.2024Pronounced: 12.01.2024

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the Assessee against the order of ld. CIT(A)-9, New Delhi dated 29.03.2016. 2. Following grounds have been raised by the assessee:

“1. Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition of Rs. 90 Lacs u/s 68 of the income Tax Act, 1961 for share application received by the company.

2.

Under the facts and circumstances of the case the Learned CIT(A) has erred in confirming the addition to the extent of 70% of supervisory and risk management charges of Rs. 4,46,50,000/- paid to the sister concern u/s 40A(2)(b) of the I

The order continues below.

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