2015 (4) TMI 551

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....shown a receipt of Rs. 82,09,300/- from M/s Ayushajay Construction Pvt. Ltd. The assessee is shareholder in M/s Ayushajay Construction Pvt. Ltd., And holding 5,03,000 equity shares out of total issued share capital of 54,82,913 equity shares which are 9.17% of the total capital which is below 10% thus Section 2 (22)(e) is not applicable in this case and rejected the plea of the assessee and held that the amount received was in the nature of loans and advances and made an addition under Section 2(22)(e) of the Income Tax Act, 1961. The assessee/respondent challenged the afore said order by filing an appeal before the Commissioner of Income Tax (Appeals). The learned Commissioner gave a finding in favour of the assessee and rejected the co....

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.... journal entries which could not carry the intention of investment. For that reason the AO was of the view that the name given to the account as 'Share: application money was just an after thought'. 4.2.1 During the appeal proceedings, the detailed submissions have been made which find place in para 3 above. My attention was also drawn to the relevant entries in the balance sheets of assessee company (Ayush Ajay Tolls Pvt. Ltd) and that of Ayush Ajay Construction Pvt. Ltd for the relevant year (i.e. 31st March 2007). The amount of Rs. 82,06,000/- is shown in the assessee's balance sheet as received on account of 'share application money'. The details / breakup in this regard is given in para 2.3, 2.4 and 2.5 of assess....

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..... It is also pleaded that lateron the assessee company had also allotted share of Rs. 82,09,300/- to M/s Ayush Ajay Construction Pvt. Ltd A copy of return of allottment filed before the ROC in this respect has also been submitted. The date of allottment as mentioned there is 01.10.2009. Having considered the facts of the case and the nature of receipts as shown in the audited balance sheet of both the companies and the fact that shares were also ultimately allotted, I do not approve the Assessing Officer's view that the amounts were received as loans and advances and later on shown as share application money as a result of after thought. In the facts of the case nature of the receipts is to be regarded as of 'Share application money&#39....