IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER (Assessment Year: 2015-16)

M/s Tayani Holdings Vs. ^{ITO, Ward 8(3)(1)}

285, Park View Bhiwanji 616, Ayakar Bhavan, MK Road, Mumbai Arjan Khimji Marg, 400020.

Matunga, Central Railway Mumbai 400019.

PAN/GIR No. AADCT3311K (Applicant) (Respondent)

Assessee by Ms. Sanjukta Samantara Revenue by Shri Sunil Agawane, Sr. DR Date of Hearing 30.01.2025 Date of Pronouncement 11.02.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the assessee challenging the impugned order 28.11.2024, passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the Commissioner of Income Tax (Appeal) / Addl/ JCIT (A) -4, Chennai (‘Ld. CIT(A)’) for the assessment year 2015-16. The assessee has raised the following grounds of appeal:

1. Addition u/s. 68 alleged unexplained credit on Capital account - Share Application Money - Rs. 18,25,000/-

i) The Id. CIT(A) erred in confirming the addition u/s 68 on account of share application money without appreciating that the funds raised were genuine where Appellant had duly discharged its primary onus and the parties having responded to the notices u/s.133(6); the deemed addition u/s. 68 out of Capital Account is uncalled for and the same may be deleted.

ii) Without prejudice to above, as the parties are not related parties within the meaning of Section 40A(2)(b) the addition is uncalled for and the same may be deleted.

2. Levy of penal interest u/s. 234A, 234B and 234C The Appellant, on merits, denies its liability to penal interest.

3. The Appellant craves leave to add, amend or alter all or any of the above Grounds of Appeal.

2. The only effective ground raised by the assessee is with regard to challenging the orders of Ld. CIT(A) in confirming the additions U/s 68 of the Act on account of share application money received by the assessee .

3. In this regard Ld. AR appearing on behalf of assessee, reiterated the same arguments as were raised by her before the revenue authorities and also relied upon her written submissions. The contents of which are reproduced here in below

4.1. The Appellant, is a Pvt Ltd. Co It operates as a holding parent Co. to raise funds for its entire use by its subsidiary Co and it was on the lookout for capital funding from its parties [who are not parties within the meaning of of Sec 40(A)(2)(b)].

4.2 In pursuance to its efforts, it succeeded to raise the capital funds from four following parties by way of shares application money.

Parties Names AMT 133(6) confirmations PAN notice Pages

1. Narshi Mulji Shah HUF- Rs.9,50,000/-, Yes- 21, AACHN6126L II Kalpana K. Gala Rs.4,25,000/-, Yes- 23 AJZPG1080E III Gunvanti V. Gala Rs.3,00,000/-, Yes- 22 ABJPG3211H VI Form metal press P. Ltd Rs.1,50,000/-, Yes- 20 AAACF0676J Total Rs. 18,25,000/-

Asst. Order Pg. 2

4.3 To three parties; shares at par were allotted in subsequent years, ROC returns filed by one party and to last party its share application money is reflecting in Balance Sheet as pending action.

4.4 The Appellant wholeheartedly and with utmost co-operation had attempted to discharge its primary onus except it failed to produce the parties to whom the Assessing Officer's had issued notices u/s. 133(6) and the parties had responded directly to the Assessing Officer. All except one are not related parties.

4.5 Sequence of Events as to Return and Assessment (A.Y 2015-

16)

1. Original Return - Filed on 17.10.2016 Declared income Rs NIL

2. Intimation u/s. 143(1)- Accepting the Return

3 Notice u/s 143(2)- Issued on 13.07.2017

4. Order u/s. 143(3)- Dated 28.12.2017 Assessed Income Rs.

18,25,000/- (addn. u/s.68)

4.6 As immediate sources had been provided and all are bank entries, explanation needs to be appreciated. Kindly appreciate the merits we rely upon:

159 ITR 78 (SC) CIT Vs. Orissa Corporation Ltd.

256 ITR 360 (Guj) Dy. CIT Vs. Rohini Builders CIT vs Gagandeep Infrastructure Pvt. Ltd. 317 ITR 218 (BOM)

Parties being unknown parties and