S.Ravindra Bhat, J. (Open Court)

1. The following substantial question of law arises for consideration : -

“Did the Tribunal fall into error of law in upholding the deletion of Rs.31.94 lakhs which had been added under Section 68 by the Assessing Officer in respect of AY 2006-07 in the circumstances of the case?”

2. With the consent of counsel for the parties, the matter is heard for disposal.

3. The facts in brief are that the assessee filed its income tax return for the year 2006-07. It is a matter of record that the assessee was incorporated on 20.10.2005 and commenced business thereafter. The assessee had reported receipt of share capital to the tune of Rs.11 lakhs; it sold them at 1000% premium and claimed to have received Rs.1.1 crores on that count. During the enquiry made at the time of assessment proceedings, the AO required the assessee to furnish various particulars which have been set out in pages 21-23 of the paper book and contained in about 10 columns. He also proceeded to make further enquiry to that end and issued notices under Section 133 (6) of the Income Tax Act, 1961 to the individuals and entities who had applied as shareholders directly. This yielded ce