JUD CEMENT LIMITED,SHILLONG vs. ASSISTANT COMMISSIONER OF INCOME, CIRCLE - SHILLONG , SHILLONG

The assessee has raised the following grounds:-

Brief facts of the case as culled out from records are that the assessee is a limited company. It is engaged in the business of manufacturing of clinker and cement. Loss of Rs.12,84,55,691/- declared in the revised return filed on 30-11-2013 for the AY 2013-14. Original e-return was filed on 27-09-2013. Case selected for scrutiny under CASS followed by serving of notices issued u/s. 143(2) and 142(1) of the Act. After considering the submissions of the assessee the assessment was concluded on 06-02-2016 making various additions including addition u/s. 68 of the Act for unexplained share application money of Rs.89 lakhs and denial of deduction u/s. 80IE of the Act at Rs. 10,58,332/-.

Aggrieved, the assessee preferred an appeal before the ld. CIT(A) challenging the impugned additions made by the ld. AO, but partly succeeded.

Aggrieved, now the assessee is now in appeal before this Tribunal raising the aforementioned grounds of appeal.

Per contra, the Ld. Departmental Representative vehemently argued supporting the orders of the lower authorities.

We have heard the rival contentions and perused the material placed before us. The sole grievance of the assessee is with regard to ground no. 1 challenging the addition of Rs. 89 lakhs made u/s. 68 of the Act for unexplained share application money.. We observe that in the balance sheet Rs.89 lakhs was shown as share application money pending for allotment in the name of Mr. Adarsh Kr. Jhunjhunwala. Further the ld. AO also observed that since it was not reflected in the books of Mr. Adarsh Kr. Jhunjhunwala, the same was unexplained. We, however, on perusal of the P/B and also the bank statement Mr. Adarsh Kr. Jhunjhunwala, notice that Mr. Adarsh Kr. Jhunjhunwala is the director as well as shareholder of the assessee company holding 16.54% equity shares. We also note that out of the alleged addition of Rs.89 lakhs, Rs. 50 lakhs was received on 25-07-2011 through account payee cheque of SBI from Mr. Adarsh Kr. Jhunjhunwala during FY 2011-12 relevant to AY 2012-13. Since this amount was not received during the year, the addition u/s. 68 of the Act for sum of Rs. 50 lakhs is uncalled for.

As far as remaining amount of Rs.39 lakhs is concerned, we notice that the assessee received the sum of Rs. 39 lakhs through banking channel. Identity and genuineness of the transaction could not be disputed as alleged AY 2013-14 Jud Cements Ltd . Page 4 cash creditor, Mr. Adarsh Kr. Jhunjhunwala is director as well as shareholder of the assessee company. The creditworthiness is further proved from the fact that for issuing of cheque of SBI of Rs. 39 lakhs to the assessee company, Mr. Adarsh Kr. Jhunjhunwala took loan of Rs.41 lakhs from Sibren Sumer, resident of Meghalaya, which thus explains the source of share application money of Rs. 39 lakhs given to assessee company. Though the ld. DR has stated that documents were not filed before the lower authorities, we, however considering the fact that the alleged cash creditor, Mr. Adarsh Kr. Jhunjhunwala is a director/shareholder of the assessee company and bank statement clearly shows such transaction as well as source of fund used/utilized for the purpose of share application money, are of the view that the assessee has successfully/satisfactorily explained the source of sum of Rs.39 lacs and therefore, the addition made u/s. 68 of the Act is uncalled for. We, therefore, set aside the finding of ld. CIT(A) and delete the addition of Rs. 89 lakhs made u/s. 68 of the Act. Ground no. 1 of assessee’s appeal is allowed.

Ground no. 3 is general in nature, which needs no adjudication.

In the result, the appeal of the assessee is partly allowed.