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TMI Blog2010 (5) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the AO under section 68 of the IT Act, by holding that the source of share capital stood satisfactorily proved and that the assessee was not liable to explain the source of the sources." 3. Briefly stated, the facts of the case are that during the period relevant to the assessment year under consideration, the assessee had introduced share capital for 2,000 shares @ Rs. 100 per share on share premium @ Rs. 4,900 per share in the name of four companies. In compliance to the above queries, the assessee filed copy of equity share ledger, list of shareholders as on 31st March, 2006, copy of IT returns, resolution of the board and copy of memorandum etc. The AO took the view that these documents were not enough to prove the creditworthi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sell or distribute, grant or otherwise in any part of the world newspapers, magazines, news cassettes, journals and periodicals in Hindi, Urdu, Marathi, Gujarati, English." 4.1 Before the learned CIT (A), the assessee moved a petition under rule 46A of the IT Rules, 1962 for admission of additional documentary evidence in the form of bank statements, of the purchasers of the shares, confirmation letters regarding share purchases of Hitkarni Prakashan Ltd. by the four companies. The assessee submitted true copy of the IT return for the asst. yr. 2006-07, copy of PAN, copy of resolution passed at the meeting of the board of directors along with the copy of memorandum of association and articles of association of the four specific companies, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the board of directors of the company to purchase shares on a premium and it was an investment and had nothing to do with the object of the company to be pursued as per the memorandum of association. The law, neither the company law nor the IT law lays down bar against such type of investment by company. Still on perusal of their memorandum of association it is found that one of the objects of these companies was related to 'to start, conduct, edit, print, publish, manage, control, sell or distribute, grant or otherwise in any part of the world newspapers, magazines, news cassettes, journals and periodical in Hindi, Urdu, Marathi, Gujarati, English'. Further, there is also no bar as per the Companies Act nor any res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explain the source of sources. Since the source of share capital stood satisfactorily proved, the addition made by the AO under section 68 of the IT Act, 1961 was uncalled for. The same is therefore, hereby deleted." 7. We have heard the rival submissions and have also perused the materials available on record. It is observed that the following were the companies, who had purchased shares from the assessee-company: 1. Seawaves Traders Ltd., 79-80 Khemka Bhavan 143-D, Fanaswadi, Sitaram Poddar Marg, Mumbai, 2. M/s Columbus Traders Ltd., 12 Engineering Mansion, 1st Floor, 4th Cavel, X Lane, Mumbai, 3. M/s Saikripa Metallic Tradecom Ltd., 12, Engineering Mansion, 1st Floor, 4th Cavel, Cross Lane, Kalbadevi Road, Mumbai, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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