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Issues involved: Assessment of unexplained cash credit u/s 68 of the Income Tax Act, 1961 based on share application money received by the assessee company.
Summary: The appeal was filed by the Revenue against the Order of the Income-tax Appellate Tribunal, 'B' Bench, Kolkata, dismissing the appeal related to the assessment year 2006-07 concerning the treatment of share application money as unexplained cash credit. The Assessing Officer considered a portion of the share application money as unexplained cash credit due to concerns regarding the parties' addresses, lack of fixed assets, and absence of formalities in raising share capital. The Commissioner of Income-tax (Appeals) overturned the Assessing Officer's decision, noting that the share applicants/companies were tax-assessed, provided PAN details, I.T. returns, audited balance sheets, and bank statements. The Commissioner highlighted that multiple companies registered at the same address were legally permissible, refuting the Assessing Officer's doubts. The Tribunal upheld the Commissioner's decision, leading to the Revenue's appeal before the High Court. After reviewing the case and arguments presented by the Revenue's advocate, the Court agreed with the Tribunal's findings. It was observed that the Assessing Officer failed to prove that the share applicants lacked the means to invest, as the share capital receipts were properly recorded in the assessee company's books and the applicants' audited accounts. Consequently, the Court found no defects in the Tribunal's order and no substantial legal errors warranting interference. The appeal was summarily dismissed, with instructions to provide a certified copy of the order to the concerned parties.
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