Tribunal remands cases for fresh assessment, directs examination of investor company directors. Appeals allowed, cross objection dismissed.

The Tribunal remanded the cases back to the Assessing Officer for fresh assessment, directing the examination of directors of investor companies to establish identity, creditworthiness, and genuineness of transactions. The Tribunal allowed appeals of both revenue and assessee for statistical purposes, dismissing the sole cross objection by the assessee. Orders were pronounced on 05/02/2020.

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Issues Involved:
1. Deletion of addition under Section 68 on account of unexplained share capital.
2. Jurisdictional issues under Sections 153A and 143(2).
3. Principles of natural justice and adequacy of inquiry by the Assessing Officer (AO).
4. Charging of interest under Sections 234A, 234B, and 234C.

Detailed Analysis:

1. Deletion of Addition under Section 68 on Account of Unexplained Share Capital:
The primary issue revolves around the deletion of addition under Section 68, where the AO added unexplained share capital received by the assessees. The AO contended that neither the creditworthiness of the creditors nor the genuineness of the transactions was established. The CIT(A) deleted the addition for non-Kolkata based companies but confirmed the addition for Kolkata based companies. The Tribunal observed that the AO made the addition based on the inability of the assessee to produce the directors of the investor companies and the lack of substantial income of these companies. The CIT(A) deleted the addition for non-Kolkata based companies without examining the directors, which was deemed erroneous by the Tribunal. The Tribunal directed the assessee to produce the directors of the investor companies before the AO for examination to establish the identity, creditworthiness, and genuineness of the transactions.

2. Jurisdictional Issues under Sections 153A and 143(2):
The assessee challenged the jurisdiction of the AO to assess under Section 153A and the framing of the assessment order under Section 143(3)/153A without issuing and serving the jurisdictional notice under Section 143(2). The Tribunal did not delve deeply into this issue but set aside the appeals to the AO for fresh assessment, implying that these jurisdictional issues would be reconsidered during the reassessment process.

3. Principles of Natural Justice and Adequacy of Inquiry by the AO:
The assessee argued that the CIT(A) confirmed the addition without observing the principles of natural justice and that the AO did not conduct a proper inquiry. The Tribunal noted that the AO asked the assessee to produce the directors at the fag end of the assessment proceedings, which was unreasonable. The Tribunal emphasized that the CIT(A) should have exercised his powers of inquiry and not merely relied on judicial precedents. The Tribunal directed the AO to conduct a thorough inquiry by examining the directors of the investor companies and to allow the assessee to produce any additional evidence.

4. Charging of Interest under Sections 234A, 234B, and 234C:
The assessee contested the charging of interest under Sections 234A, 234B, and 234C. The Tribunal did not specifically address this issue in detail but implied that the matter would be reconsidered during the reassessment process.

Conclusion:
The Tribunal set aside the orders of the CIT(A) and remanded the cases back to the AO for a fresh assessment. The AO was directed to examine the directors of the investor companies to establish the identity, creditworthiness, and genuineness of the transactions. The Tribunal allowed the appeals of both the revenue and the assessee for statistical purposes and dismissed the solitary cross objection filed by the assessee. The order was pronounced in open court on 05/02/2020.

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