JUDGMENT :

K.R. SHRIRAM, J.

1. Since identical issues are involved in both petitions, facts from Writ Petition No.602 of 2014 in the case of Mr. Pavan Murarka (petitioner) are referred to hereunder :

Petitioner held 50% of the equity share capital of Shivum Holdings Pvt. Ltd. (Shivum) and 25% of the equity share capital of P & A Estate Pvt. Ltd. (P&A). Petitioner’s wife, Rachana Murarka (RM), petitioner in Writ Petition No.2145 of 2014, held 50% of the equity share capital of Shivum and 25% of the equity share capital of P&A. Balance 50% of the equity share capital of P&A was held by Mr. Akshat Prasad. Shivum held 85% interest in a partnership firm named Laxmi Trading Company (LTC) and petitioner held the balance 15% interest in LTC. During the previous year relevant to the assessment year 2006-2007, LTC gave an advance of Rs.1,25,00,000/- to P&A on behalf of Shivum. The accumulated profits of Shivum as on 31st March 2006 were Rs.3,38,53,410/-.

2. On 29th July 2006 petitioner filed return of income for Assessment Year 2006-2007. An assessment order dated 25th November 2008 came to be passed under Section 143(3) of the Income Tax Act, 1961 (the said Act). In the meanwhile, an assessment