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TMI Blog2015 (9) TMI 1643X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of scrutiny assessment the AO noticed that the assessee company has received share application money of Rs. 2.20 crore during the year under assessment. The assessee company was asked to submit/substantiate the said share application money receipt. The assessee has made submission that M/s Speed Trade Securities Pvt. Ltd. (STSPL) has given share application money of Rs. 2.20 crore. Copy of the Board Resolution and letter from STSPL was also furnished. The summon u/s.131 of the Act was issued to director of STSPL to appear in person and examine him on oath about the genuineness of the transaction. He was also asked to furnish details regarding balance payment of share application money, subsequent date of allotment, details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the assessee is in further appeal before us. 4. It was contended by ld. AR that under the Indian Contract Act, 1872, Section 73 deals with the compensation of loss or damage caused by Breach of contract and Section 74 deals with compensation of breach of contract where penalty stipulated for. It was submitted that even if the said sections apply, then to the breach is committed by the STSPL and not by the assessee, as the assessee had suffered on account of non-payment of balance amount by STSPL and assessee is not sought for any compensation of loss or damage or penalty from STSPL on account of breach. Further reliance was placed by ld. AR on the following judicial pronouncements :- CIT Vs. Lovely Exports (P) Ltd. (Del.HC) 299 ITR 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance amount as per law. Vide letter dated 10-7-2008 the assessee company requested STSPL to pay balance of 50% on 30-9-2008, which is the due date and on the receipt of the said balance amount, it was to increase its authorized capital and allot 22 lakhs equity shares to STSPL. However, vide letter dated 21-7-2008, the STSPL sought for extension and requested the assessee to extend the due date upto 31-10-2008 for payment of balance 50%. 7. The second extension was sought by STSPL uptil 31-12-2008. However, nothing materialized. Thereafter again on 20-12-2008 STSPL sought for third and final extension and requested the assessee to extend date upto 20-3-2009 for balance payment of 50%, failing which assessee can forfeit 50% amount already p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & 2009-2010 has also been completed under scrutiny assessment proceedings u/s.143(3). Even the assessee has furnished valuation report/certificate from the Chartered Accountant on 25-7-2007 to the effect that its share price was Rs. 20.83 before receiving of 50% of share application money on 8-9-2007 from STSPL and on the basis of such valuation of equity shares of assessee, the shares were issued at a premium of Rs. 10/- per share. Ld. AR drew our attention not only to the source of funds by STSPL but also the source of source and so on and soforth by giving details/documents of STSPL. We also found that STSPL had paid the money by selling its own investments/shares in the stock exchange through its broker M/s Satco Securities and Financi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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