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2012 (7) TMI 624 - AT - Income TaxAddition on account of unaccounted income - the credit entries in the books of the assessee in the form of share application as unexplained - Held that:- As procedures has been prescribed for increasing the authorised capital of the company and there is nothing on record to prove that the Assessee has complied with the prescribed procedures especially with respect to the increase in authorised capital and for forfeiture of the share application money - thus the share application transaction is nothing but a design to bring in Assessee’s own unaccounted income into the books without payment of taxes. As AO had issued summons u/s 131 to the Managing Director but there was no compliance - the share application money received from the investors were forfeited by the Assessee and for which nothing is on record to prove that the notice was issued to investors to indicate the intention of the Assessee to forfeit the share application money - the assessee had received premium on the share to be allotted though it was a loss making company - A.O. has rightly added the amount to its income - against assessee.
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