Revision over share capital receipts upheld for failure to examine identity, creditworthiness and genuineness of transactions.

Revisionary jurisdiction under section 263 was sustained because the assessments had accepted share application money and share premium without the enquiry required under section 68. The Tribunal noted that the assessment orders did not adequately examine the identity of the share applicants, their creditworthiness, or the genuineness of the transactions, and therefore were treated as erroneous and prejudicial to the revenue. The Commissioner's exercise of revision was upheld on the ground of inadequate investigation into the share capital receipts.

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Issues: Whether the revisionary orders under section 263 of the Income-tax Act, 1961, setting aside the assessments for failure to examine the share application money and share premium were justified.

Analysis: The appeals concerned additions arising from receipt of share application money and premium. The Tribunal noted that the assessments had accepted the claims without carrying out the enquiry required under section 68 of the Income-tax Act, 1961, particularly as to the identity of the share applicants, their creditworthiness, and the genuineness of the transactions. It further noted that the Commissioner had found the assessment orders to be passed without adequate investigation and had accordingly exercised revisionary jurisdiction under section 263 of the Income-tax Act, 1961.

Conclusion: The revision under section 263 was upheld and the appeals failed.

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