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Issues involved: Block assessment for the years 1986-87 to 1995-96 and for the period April 1, 1995, to September 27, 1995 under section 260A of the Income-tax Act, 1961.
Commission paid to Mr. Koneru: The Tribunal found that the cheque for Rs. 10 lakhs acknowledged by Mr. Koneru was returned prior to the search operations, and Mr. Koneru denied receiving any commission. The Tribunal concluded that the burden of proof to prove a negative fact did not arise, and the unfructified transaction was not considered. The Tribunal's decision was based on evidence and reasonable conclusions, dismissing the Revenue's argument of perversity in approach. Unexplained share capital investments: Directors admitted undisclosed income of Rs. 74.2 lakhs representing investments in names of friends and relatives. The Assessing Officer questioned the genuineness of confirmation letters provided, but the Tribunal held that the stereotyped form of letters did not go against the assessee. The Tribunal noted that shareholders were not examined, and the genuineness of the letters should not have been doubted. While expressing reservations on certain observations, the Court found no substantial question of law in the Tribunal's decision. The Court emphasized the need for a finding that the shareholders were mere name-lenders to treat the money invested as unaccounted income of the assessee, which was lacking in this case. The appeal was dismissed as no substantial question of law arose for consideration. This judgment highlights the importance of evidence, burden of proof, and the need for findings to establish unaccounted income in cases of undisclosed transactions and investments.
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