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2010 (1) TMI 907 - AT - Income TaxViolation of provisions of section 269SS of the Act - assessee received the amounts towards the share application money, contrary to the evidence on record. There mere fact that the shares had been allotted in the succeeding year and had been allotted in consideration of the value of land can be held to be no basis to assume that the value of land did not represent share application money and represented an amount of loan or deposit accepted by the assessee company and was thus in violation of provisions contained in section 269SS of the Act – Held that:- credit in the account was not for receipt of money but for purchase of land and the liability was partly discharged by taking as share application money - allotment of shares was in lieu of land purchased, amounts were received as share application money and subsequently shares were allotted to these persons. - Therefore, the amounts partook the character of deposit till final decision and the deposit in cash attracted the provision contained in section 269SS. If we apply the analogy of this case, if the shares had not been allotted to Vatika Ltd., the purchase price of the land would have been paid by the assessee. There would have been no occasion to receive the money, which could not be termed as loan or deposit. - the assessee did not receive any loan or deposit of money and the debt by way of unpaid purchase price was partly satisfied by allotment of shares to Vatika Ltd. - No penalty.
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