2013 (10) TMI 1360

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.... no such evidence was filed nor there was any entry of this amount in the bank account of the assessee." " Whether the Hon'ble ITAT was right in giving a finding that the share premium amount lying as reserve and surplus of the company is not an income of the company and thus are not accumulated profit of the company." Counsel for the appellant submits that the Income Tax Appellate Tribunal has ignored relevant facts, disregarded evidence on record and erred in holding that Rs. 1.50 crores was given by the assessee to the company on 15.3.2008, whereas no such evidence was filed before the Assessing Officer or before the Commissioner of Income Tax (Appeals). The Tribunal has also erred in recording a finding that the share premium amou....

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....x (Appeals), accepted the appeal by holding that Rs. 1.50 crores was the assessee's capital, originally in the hands of the proprietorship concern, which issued a cheque to the assessee, who deposited the cheque with the company, which, in turn, returned the amount to the assessee. The Commissioner of Income Tax, Ludhiana, held that since accumulated profits were only Rs. 34,858/-, it has to be treated as deemed dividend. The revenue and the assessee filed separate appeals. The Income Tax Appellate Tribunal considered the entire controversy and held as follows:- "...... However, the question is whether the said company has given any advance or loan to the assessee or not? The company was incorporated by way of conversion of proprietors....

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....ressed on the fact that this seems to be adjustment entry. We are of the opinion that the AO has failed to appreciate that because of the conversation of the proprietorship concern, the cheque could only be encashed by the assessee. The cheque has been shown as liability in the balance sheet of proprietorship concern and was later on returned by the assessee to the Private Limited Company. Since all the assets have been taken over by the Private Limited Company, the said company owed assessee this amount of Rs. 1.50 crores which was credited to his account on 15.03.2008. Because of non encashment of the cheque the same is not reflected in the bank statement. This fact has been correctly appreciated by the ld. CIT(A)." A perusal of the orde....