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2020 (6) TMI 32 - HC - Income TaxDisallowance u/s 36 (1) (iii) - assessee has one bank account which consists of mixed funds - AO held that the assessee was not able to satisfy that the advances which were made for the purchase of land and investment in construction of the godown were entitled to the benefit of Section 36 (1) (iii) - CIT(A) gave a categoric finding that the funds used for purchase of land and construction were interest free funds and were not those which were obtained as loan from the bank and this finding on fact has been upheld by the Tribunal - HELD THAT:- Petitioner is not in a position to deny that the matter is squarely covered by the judgments of S.A. Builders Limited Versus CIT (Appeals) [2006 (12) TMI 76 - SUPREME COURT]and Bright Enterprises (P) Ltd. Versus Commissioner of Income Tax [2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] - First question is answered in negative. Sum received as share capital from two companies were accommodation entries - ground taken by the AO was that those investors had sufficient funds yet they have been showing meagre profit from their business - Appellate Authorities noticed that on the asking of the AO, not only all the financers but even the directors of the company were produced. Moreover, the returns of those assessees had been accepted by the revenue and held that in these circumstances the share money investment could not be deemed to have been a paper transaction or an accommodation entry.
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