TaxTMI 
TaxTMI 
2021 (3) TMI 49
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustified in adding a sum of Rs. 2,94,57,825/- which was shown as receipt of share application by the assessee in its books of account, as unexplained credit under section 68 of the Income Tax Act, 1961 (the 'Act'). 3. The assessee is a company engaged in the business of rendering corporate and investment advisory services. In the course of assessment proceedings for Assessment Year 2010-11, the AO noticed that the assessee had shown infusion of capital of Rs. 7,24,57,825/- in the form of share application money. The AO called upon the assessee to explain the receipt of share application money towards issue of share capital by the assessee by furnishing the name and address of the share applicant and other details. In response to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee company. The various clauses of the agreement by which the assessee took over the liability of PRPL to KHPL was as follows: "NOW IT IS HEREBY MUTUALLY AGREED AND DECLARED AS FOLLOWS: 1. The agreement is deemed entered on 30.11.2009 2. TAAL paid, by this day, on behalf of PRPL, a sum of Rs. 2,94,57,825/- (Rupees Two Crore Ninety four Lakhs Fifty Seven Thousand Eight Hundred Twenty Five only) (hereinafter referred to as "Outstanding Loan") divided into Principal amount of Rs. 2,70,00,000/- and outstanding interest of Rs. 24,57,825/- to KHPL. and KHPL acknowledges the receipt of the outstanding loan. 3. KHPL. confirms that there are no dues, either Principal or Interest outstanding, to it either f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5.13 Thus as per the agreement the amount of Rs. 2,94,57,825/- was duly paid by the appellant to KHPL on behalf of PRPL on 30.11.2009 and KHPL acknowledged receipt of the same. There is nothing in the agreement to suggest that the appellant had treated the amount payable to KHPL by PRPL as its (KHPL's) share application money or the amount will be paid in future by it to KHPL although PRPL stood discharged of its obligation. So the claim of the appellant that the amount relates to the liability taken over and thus outstanding towards KHPL and treated as share application money does not carry any weight. So the action of the J in treating the amount of Rs. 2,94,57,825/- as unexplained is upheld." 7. Aggrieved by the order of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ney adjusted against Primus Loan. It was submitted that from the ledger account of KHPL in the books of the assessee it would be clear that only a journal entry was passed by debiting PRPL to the extent of Rs. 2,94,57,825/- towards share application money adjusted against Primus Loan. Our attention was also drawn to the ledger extract of the assessee's account in the books of KHPL wherein a journal entry is passed by crediting Primus loan account to the extent of Rs. 2,94,57,825/- towards loan amount transferred from PRPL to the appellant as per the agreement dated 02.02.2010. It was argued that it can be seen from the ledger extract of the assessee's account in the books of PRPL wherein a journal entry is passed by debiting KHPL to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for additional evidence. Learned DR relied on the order of the CIT(A). 11. We have considered the rival submissions and are of the view that the additional evidence now sought to be filed is required to be admitted as it is necessary for deciding the issue in controversy. As we have already seen the only basis on which the addition is made is clause 2 of the agreement dated 02.02.2010. If there is no actual payment as recited in clause 2 of the agreement dated 02.02.2010, then the impugned addition under section 68 of the Act cannot be sustained. Since the contention of the assessee is that there was no actual payment but there was only a mere book entry and since this is sought to be proved with the help of the additional evidence and ....