- (1.) This appeal, under section 260A of the Income Tax Act. is directed against a judgment and/or order of the Income Tax Appellate Tribunal, 'C Bench, Calcutta dismissing the departmental appeal against an order of Commissioner of Tax (A) dated 3rd June, 1994, deleting addition of Rs. 52,03,500/- allegedly on account of unexplained cash credit in respect of the Assessment Year 1991-92. The assessee, a public limited company, incorporated under the Companies Act, 1956, carries on business inter alia of investment and financing.
(2.) The authorized share capital of the assessee company is Rs. 1,10,00,000/- divided into 11,00,000 equity shares of Rs. 10/- each. During the relevant Assessment Year, i.e. 1991-92 the assessee company issued 6,12,000 equity shares of Rs. 10/- each for cash at par by issue of prospectus for total issue amount of Rs. 61,20,000/-. However, as on 31st March, 1991, allotment money of Rs. 9,16,500/- was in arrears and accordingly the paid up share capital of the company was increased by Rs. 52,03,500/- in the Assessment Year 1991-92. In the previous Assessment Year i.e. 1990-91 also the assessee company had increased its share capital by issuing shares amounting to Rs. 40,80,000/-.
(3.) During the assessment the assessee company filed details of 2,155 shareholders along with their addressees, number of shares allotted etc. The Assessing Officer caused enquiries by test check to be conducted, and on the basis of the report of the Income Tax Inspector dated 30th March, 1994, held that the investment by the shareholders of the assessee company was not genuine and the claim of the assessee to allot the shares to the public was false.;