2007 (8) TMI 87

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....n 133A of the Income Tax Act, it was noticed that the company had constructed the hotel with the share capital funds said to have been floated by the Directors. On enquiry with the assessees,  the assessees  offered a sum of Rs.12,00,000/- as income,  out of which Rs.2,00,000/- each   in the name of the assessees  and remaining in the name of other  members in Hindu Undivided Family. The assessees also admitted that there was no source for share capital and their share in the construction amounting to Rs.2,00,000/- each  can be taken as unexplained investment. The assessees filed return of income on September 21, 2001 admitting the income of Rs.2,80,000/- each.  However, when notice  under S....

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....enue and perused the materials on record. 5. It is not argued by the counsel for the revenue that the circular issued is not binding on the revenue. However, he relied  on the decision reported  in CIT v. Abhishek Industries Ltd. [2006] 286 ITR 1 (P&H) The issue involved in these appeals has been considered by us in  the order made in T.C.(A) No. 222 of 2004 (CIT v. Associated Electrical Agencies [2007] 295 ITR 496 (Mad)) dated August 16, 2007   and  held against the Revenue in the sense that if the tax effect is less than as provided in the  Central Board Direct Taxes circular in F.No.279/126/98-ITJ and  if the case has not come within the exceptions made  in the circular, the appeals filed b....

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....sp; Commissioner of Income Tax (Appeals) after considering the statement  submitted before him has found that the  statement  showed  the business  of the assessee, capital contribution  shown in the returns of income before the survey, amount of authorised capital, paid up capital, loan from SUCB,  Kondalampatty Branch, amount received from  shareholders, estimated expenditure  for furniture and fittings,  status of maintenance of books of accounts, date of purchase of land, rate thereof etc., It was not on record that concealment was discovered as a result of enquiry  or investigation of material found during the course of survey conducted by the Department nor it was a case of compat....