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6. Shri Satyakam Mishra, the learned Departmental Representative strongly supported the order of the CIT. He further submitted that the order of the CIT clearly brings out the fact that apart from accepting the interpretation of the assessing officer with reference to the transactions involved, the Dy. CIT made no enquiry or effort to ascertain the true facts relating to these transactions. According to him, these transactions were examined only from the angle of cash credits at the level of the assessing officer and that no examination was done as far as the provisions of sections 271D and 271E are concerned. He also submitted that as per the balance sheet as on 31-3-1993, the subscribed capital was Rs. 18,500 while share application money was Rs. 2,14,000. He further pointed out that the said balance sheet also shows that investment of Rs. 2,14,000 was made in Venus Eye Vision Ltd. It was also brought tour notice that as per balance sheet as on 31-3-1994, the share application money was at Rs. 2,14,000 but subscribed capital increased to Rs. 92,500. According to the learned Departmental Representative, this fact alone shows that no shares were allotted from the pending share application money of Rs. 2,14,000 but that fresh inflow of funds was used for such allotment. This raises fundamental queries and doubts regarding the assessees assertion that this money was indeed of the nature as it was purported to be. Similarly, the balance sheet as on 31-3-1995 shows that the share application money increased to Rs. 19,71,500 and as on 11-1-1996 the share application money was Rs. 15,81,500. It was brought to our notice that out of this alleged share application money, substantial amounts were invested with M/s Venus Eye Vision Ltd. There is no evidence on record to show that any steps were taken for increasing the limit of authorized share capital. The learned Departmental Representative also pointed out that from perusal of the copies of accounts of the so-called share application money account, it would be clear that there are repeated transactions showing of receipt of share application money on various dates. This is a clear deviation from the normal case where if any person applies for shares there are no repeated payments on account of investments in the shares. The learned Departmental Representative also submitted that it was one of the contentions of the learned counsel for the assessee that if the company had recorded any transaction in the books of account and in the balance sheet as a transaction relating to share application money, the same was sufficient to prove that the amounts received were indeed share application money. If this contention of the learned counsel is accepted, then the purpose of inserting sections 269SS and 269T is defeated as far as company cases are concerned, because the companies can accept the cash from different parties and record this in the books as share application money. It was also submitted that the decision of the ITAT, Jaipur Bench in the case of Jagvijay Auto Finance (P.) Ltd. (supra) relied upon by the learned counsel for the assessee is not applicable to the facts of the present case. In the said case, there was no dispute regarding the nature of receipts. The ITAT Jaipur Bench was mainly concerned with the issue as to whether in a case where share application money was received by a company, the provisions of section. 269SS would apply or not. The Tribunal held that in the case of share application money if the amounts were received in cash, there is no contravention of sections 269SS and 269T. In the instant case, the main issue is as to whether the amounts received by the assessee were share application or not, submitted the learned Departmental Representative. He further submitted that the Dy. CIT before dropping the penalties had not made any enquiry to ascertain the exact nature of the transactions. He further submitted that merely the book entries are not sufficient to prove the nature of receipt or expenditure and that the same needs to be substantiated. As regards the office note written by the Dy. CIT dropping the penalty proceedings, the learned Departmental Representative submitted that there is nothing to show that the Dy. CIT has gone into details of the case, studied the relevant records, examined the exact nature of the transactions or raised any query as to why the amounts were received in cash. It was submitted that the Dy. CIT has dropped the penalty proceedings merely on the basis of submissions given by the assessee and certain observations made by the assessing officer during the course of assessment proceedings.