SATHIYAM TELEVISION LIMITED,CHENNAI vs. ITO, NON CORP WARD-20(5), CHENNAI

The only issue in this appeal of assessee is as regards to the order of CIT(A) sustaining the addition made by A.O as unexplained credit u/s. 68 of the Act amounting to Rs. 8 Lakhs. For this, the assessee has raised grounds which are argumentative in nature and hence, need not to be reproduced.

I have heard the rival contentions and gone through the facts and circumstances of the case. I noticed that the A.O during the course of scrutiny assessment proceedings noticed that the assessee being a public limited company increased its share capital during the year to the extent of Rs. 17 Lakhs in the paid up share capital. The A.O after considering the explanation of the assessee made addition of share capital received from Shri P. Amalraj amounting to Rs. 1 Lakh, Ms. V.Anjala amounting to Rs. 5 Lakhs, Shri Sudheer amounting to Rs.1 Lakh and Shri Melvin Robert amounting to Rs. 1 Lakh.

According to A.O, the above share capital received of Rs. 8 Lakhs from four investors is unexplained and accordingly, added u/s. 68 of the Act. Aggrieved, the assessee preferred appeal before the CIT(A).

I have gone through the case records and submissions made by both the sides. I noted that Shri P. Amalraj invested a sum of Rs. 1 Lakh and amount received by the assessee-company vide bearing Cheque No.642714 for amount of Rs. 1 Lakh and this has debited from the bank account of Shri P. Amalraj and he has submitted copy of acknowledgement for filing of return of income along with the details of bank account. Even, the narration of the bank statement of the assessee-company, the payment is received by the assessee- company is clearly debited. Hence, I find no reason to treat this as bogus or unexplained cash credit.

Coming to the share application money received from Ms. V.

Coming to the next investment in the name of Shri Sudheer, who invested a sum of Rs. 25,000/- on 02.01.2014 and Rs. 75,000/- on 09.06.2014 in the assessee-company and these transactions were duly reflected in the assessee’s bank statement and he has filed acknowledgment of filing of return of income and he has source of income. The assessee has also provided copy of bank account, the assessee-company reflecting this transaction in both the years. Hence, I find that the source is explained and hence, this addition is to be deleted. I delete the addition accordingly.

Coming to Mr. Melvin Robert, the assessee filed bank statement, acknowledgment of return of income of the investor and also provided bank account of the assessee-company reflected the transaction. The investor is assessed to tax is a substantial income declared in the return of income and hence, this investment of share application is also deleted.

As regards to the creditworthiness of all the creditors is proved, I delete the addition made by A.O on account of unexplained cash credit of Rs. 8 Lakhs. Hence, the appeal of the assessee is allowed.

In the result, the appeal of the assessee is allowed.