2007 (4) TMI 574

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....ct, 1961. 3. The facts leading to the dispute, briefly, are as under : Assessee filed the return on 31-10-2001 declaring nil income. The case was processed under section 143(1) on 24-12-2002 and subsequently, selected for scrutiny. Assessee is engaged in the business of financing, investments, placing deposits, leasing, etc. 4. It was noticed by the Assessing Officer that the assessee received unsecured loans of Rs. 41,30,000 under the head "Loan funds" from M/s. Surya Spices Vyapar (P.) Ltd. Assessee filed confirmation letters along with P&L a/c and balance sheet of M/s. Surya Spices Vyapar (P.) Ltd. Assessee was asked to explain its shareholding pattern and that of M/s. Surya Spices Vyapar (P.) Ltd. From the shareholding pattern ....

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....e previous year, i.e., 1-4-2000 to 31-3-2001. He found that Shri Sharan P. Khanna was having percentage of beneficial ownership of equity shares of more than 20 per cent in the assessee company. The claim of the assessee was rejected by the Assessing Officer. The matter was carried before the CIT(A) by the assessee. 7. It was reiterated before the CIT(A) that Shri Sharan P. Khanna became the shareholder of the assessee company only on 9-4-2001 when 100 equity shares were transferred in favour of him. The chronology of the events relating to the transactions was also submitted before the CIT(A), which is reflected at p. 3 of his order. It reads as under : 28-3-2001 Mr. Sharan Khanna and Mr. Tapin Khanna became directors of Sagar. ....

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....eated as member of the assessee. He held, the crucial issue would be whether Shri Sharan P. Khanna was a member of the assessee company on the date of advancing loan by the lender company. There is no evidence on record to show that Shri Sharan P. Khanna became member of the assessee company on or before 31-3-2001. He became the shareholder only on 9-4-2001. Assessing Officer only relied on the return of income for the allegation that Shri Sharan P. Khanna was beneficial owner of the shares of more than 100 per cent of the assessee company. CIT(A) further held, this was the position as on the date of filing of the return and not on the date of close of the assessment year under consideration. Hence, he allowed the claim of the assessee. ....