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2018 (4) TMI 930 - ITAT RAIPURUnexplained share capital receipts - A.O. issued notices u/s. 133(6) of the Act to the share applicant companies which were returned unserved - Held that:- As seen that not only the directors are common but also the director of the appellant company is also a director of the share applicant companies. Therefore, it can be safely concluded that the impugned transaction is not between strangers. We find that the Assessing Officer and the First Appellate Authority has completely ignored the direct evidences which justify the share application money and the share premium. The direct evidence are in the form of confirmations by the share applicant companies, their bank accounts, and most importantly one of the directors Shri Rajesh Agarwal attended the proceedings on behalf of the investor companies. We find that the A.O. has disbelieved the existence of the share applicant companies on the basis of the questions asked to Shri Rajesh Agarwal which questions in our opinion are irrelevant. A perusal of the bank statements of the share applicant companies clearly shows that no cash was found to be deposited prior to the issue of cheque - It was brought to the notice of the A.O. and the First Appellate Authority that Samrat Dealcom Pvt. Ltd. was converted into LLP on 25.07.2014, Breeze Mercantile Pvt. Ltd. was converted into LLP on 24.03.2015 and Shristi Barter Pvt. Ltd. was converted into LLP on 01.01.2015. Moreover, the attendance of one of the directors Shri Rajesh Agarwal has been recognized by the A.O., therefore the allegation that the share applicant companies do not exist holds no water. No merit in the additions made by the A.O. and confirmed by the First Appellate Authority - Decided in favour of assessee.
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