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TMI Blog2024 (5) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... light of the various documents produced by the assessee as proof of the transaction of allotment of shares against the amount received, it set aside the assessment order, insofar as the addition of Rs. 4.99 crores to the income of the assessee. The reasoning adopted by the ITAT is based upon a sound legal principle and reflected from the documents placed by the assessee before the assessment officer. The documents, which consist of return of allotment of shares, resolutions of the company, and other documents filed in terms of the Companies Act before the Authorities to substantiate the transaction had not been doubted. In addition, the record of the company petition filed by Mrs. N. Sunita before the High Court, which was ultimately disposed by consent terms filed by the parties by which Sunita was made 25% shareholder in the Company was also produced, but not considered by the AO. CIT(A) considered these documents, including the copy of the company petition and though it records that according to the consent terms, shares were allotted to N. Sunita to the extent of 25% of shareholding of the Company, it holds that the amount advanced was towards some other purpose such as against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company had not brought to tax and disclosed certain income. Notice under Section 153C was issued to the Assessee on 9/6/2010 calling upon it to file a return of income. In response to this notice Assessee Company filed a return of income on 12/8/2011 declaring a loss of Rs. 4,97,189/-. Thereafter, on a notice dated 26/8/2011 under Section 143(2) and 142(1) of the Act being issued, the Assessee produced its books of accounts for verification and filed details of transactions done by it with Smt. Sunitha, whereby funds were transferred to the Assessee Company and utilized by it. It is the case of the Revenue that the Directors of the Company accepted that the receipt of the disputed amount of Rs. 4.99 crores was received by it by a cheque, the Assessee failed to explain the actual purpose of this receipt with evidence. It is further Revenue s case that statements were recorded of N. Suryanarayan, who admitted payment of Rs.4.99 crores to the Assessee from by N. Sunitha was towards an advance towards purchase of property, and based on this evidence, the Assessee was unable to justify and explain as to why this amount should not be brought to tax as income from other sources. The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, Mr Nikhil Pai appearing for the Respondent-Assessee submits that the findings of the AO and CIT(A) not being based upon any material, as claimed to have be unearthed during the search, the findings of the ITAT that the Assessee had supported its claim to deduct the amount of Rs.4.99 crore based upon various documents referred to in para 2.3 of its order do not call for any interference. It was submitted that the two substantial questions of law on which these appeal is admitted are to be answered in favour of the Assessee since the findings rendered by the ITAT are neither perverse nor can be termed to have been arrived de hors the material on record. 5. We have considered the rival submission and the material on record. The main thrust of this appeal, on the basis of which the Revenue submits the two substantial questions of law ought to be decided in his favour is based upon the contention that after enactment of Section 68 of the Act, the assessee is required to discharge the burden of proving the credit appearing in his books of account with positive material to demonstrate that such money advanced was by a person whose identity was established and who had the capacity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form 2 and Annual Report in Form 20B which was filed before the Registrar of Companies. It is further the case of the assessee in reply that Form 23AC which has the Balance Sheet and Profit Loss Account of the Company also reflects this fact. All these documents were placed on record of the AO to reflect that the allotment of shares was shown as on 14.03.2007 while the transactions for allotment of shares to Mrs. N. Sunita were also recorded during the annual general meeting of the company on 29.09.2008. 8. It was further the case of the assessee in reply that since the shares allotted as partly paid, to Mrs. N. Sunita, the Company forfeited the shares on 01.03.2008 as calls made on the shares on 23.07.2007 remained unpaid by Mrs. Sunita; Writ Petition came to be filed by Mrs. N. Sunita before the High Court of Bombay at Goa and therein, a consent order was passed, on the basis of which the shares were allotted to Mrs. Sunita. All these records including the copies of the petition and orders of the Court were placed before the AO. 9. From this record, therefore, the entire transaction, supported by the above-referred documentation was before the AO, who, if one peruses the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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