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2022 (1) TMI 295 - AT - Income TaxUnexplained share capital / share application money received from Kolkata based companies - HELD THAT:- AO had categorically held that the all the companies are bogus - on perusing the balance sheet and P & L Account of M/s. Tirumala Dealers Private Limited it is apparent that the company is making loss. We further observed from the balance sheet of M/s. Tirumala Dealers Private Limited that the investment of ₹ 7,05,00,000/- was made from the earlier reserves and surplus - Therefore, the exact source of the reserves and surplus of the earlier years resulting in liquidity to the company for making investment in the assessee company is not coming out clearly. It is also not in dispute that all the five company’s address are in the same building and the building is deserted. In this situation, we are of the view that the Ld. CIT (A)’s finding is erroneous. Hence, we hereby set aside the order of the Ld. CIT(A) on this issue and uphold the order of the Ld. AO. Therefore, the issue is decided in favour of the Revenue. Addition towards notional interest charged on interest free advances extended to Directors of the assessee company - HELD THAT:- Before us, the assessee has filed the income tax returns and statement of affairs of M/s. Jagadamba Cotton Industries Pvt Ltd for the relevant assessment year to establish the genuineness of the transaction. However, we find that there is no discussion about these documents in the order of the Ld. Revenue Authorities. Therefore, to verify the veracity of these documents, we remit back the issue of share application money received from M/s. Jagadamba Cotton Industries Pvt Ltd to the file of the Ld. AO for de novo verification. As regards the amount received from share application money received from Smt. Susheelabai Rungta even before us at this stage nothing is produced to establish the genuineness of the transaction. Therefore, we do not find it necessary to interfere with the orders of the Ld. Revenue Authorities. Accordingly ground raised in para 2(ii) is disposed off.
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