TaxTMI 
TaxTMI 
2012 (12) TMI 170
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1961 on assessee's return in re-assessment proceedings, were deleted. 2. The facts of the case are that in the reassessment proceedings for assessment year 2002-03, the revenue sought to tax the income which had escaped assessment. This resulted in addition to the tune of Rs.55,01,125/-. This was on account of share application money which was received during the previous year in question. The proceedings under Section 148 have been initiated on 26th March, 2009. An investigation report received by the assessing officer which implicated on the basis of, inter alia, statement by one Mr. Mahesh Garg and other materials revealed that the assessee was involved in accommodation entry transactions. The assessing officer's order was carried in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ares in the present case. 4. The CIT(Appeals) while dealing with the facts at hand sought a remand report in the present case. The relevant extracts of his order are as follows: "From the remand report dated 17.09.10 it is observed that the error in making an addition of Rs.55,01,125/- instead of Rs.52,51,125/- has been admitted by the AO, which is due to some totaling mistake. Thus in effect the AO has admitted that the addition u/s 68 should have been for an amount of Rs.52,51,125/- only. Further to this the appellant has through his submissions dated 31.01.2011 and copy of bank accounts for the relevant period further stated that the total share application money received during the financial year from the 7 companies is only fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplication money transfer through banking channels. g. Certificate of Incorporation of share holder companies. h. Memorandum and articles of association of the share holder companies as well as their Balance Sheet. i. Certificate from the Auditor of share applicants certifying that their company has invested in shares of assessee company. j. Confirmation & Affidavit of the then Directors of share applicant companies to the effect that as per company's records investment had been made during FY 2001-02. k. Affidavit filed during the appellate proceedings from the present Directors of the share applicant companies with respect to confirming the share application made and the fact of shares being allotted. l. Form of annual r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mination has been provided to the assessee. The AO has also rejected the confirmation & affidavits and also the statement on oath of the present Directors of 7 share applicant companies. In this connection the observation of the jurisdictional High Court in case of Dwarkadhish Investment (Supra) are quite relevant where the court has observed that it is the revenue which has all the power and wherewithal to trace any person. Further in the case of CIT vs. Victor Electrodes Ltd. 329 ITR 271 it has been held that there is no legal obligation on the assessee to produce some Director or other representative of the Director or other representative of the applicant companies before the A.O. Therefore failure on part of the assessee to produ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment order was passed on 21.12.09 which goes to show that the principles of natural justice has not been adhered to." 5. The ITAT impugned order as follows: "9. It may be mentioned here that after going through the facts of the case, it was found that the assessee has issued aforementioned shares on the face value of 10 and no premium has been charged. It was stated by ld. Counsel of the assessee that even fresh affidavits of all the share applicants were filed. It was observed from the record that fresh affidavits in respect of shares allotted to M/s. Royal Credits (P) Ltd. were not placed on record. The learned AR was requested to furnish the same on record. The learned AR was also directed to submit the certificate from the directo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee on record, we find no infirmity in the order of the CIT (A) vide which the aforementioned addition has been deleted. We decline to interfere." 6. This Court has considered the submissions of the parties. In this case the discussion by the CIT(Appeals) would reveal that the assessee has filed documents including certified copies issued by the Registrar of Companies in relation to the share application, affidavits of the Directors, Form 2 filed with the ROC by such applicants confirmations by the applicant for company's shares, certificates by auditors etc. Unfortunately, the assessing officer chose to base himself merely on the general inference to be drawn from the reading of the investigation report and the statement of Mr. Mahesh Ga....