TaxTMI 
TaxTMI 
2017 (12) TMI 1056
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....y expenses of Rs. 46,840/- written off which was disallowable had not been disallowed in the returned exempt income of Rs. 10,539/- has not been taken into account and there was on that account escapement of income. So, he issued notice u/s. 148 of the Act and reopened the assessment and passed order u/s. 147/143(3) of the Act on 07.07.2010 determining the total income at Rs. 48,680/-. 4. The Ld. CIT-2, Kolkata invoked the revisional jurisdiction u/s. 263 of the Act, since the AO had not properly enquired and verified the genuineness and source of share capital as well as the identity and creditworthiness of the shareholders who had applied for shares of the company. So, the CIT set aside the order passed by the AO u/s. 147/143(3) of the Act on 07.07.2010 for fresh assessment vide her order dated 26.03.2013, with certain specific guidelines regarding investigation to be carried out while assessing the assessee de novo. Consequently, the AO vide order dated 30.03.2014 passed the reassessment order giving effect to the order of Ld. CIT. 5. We also take note that the AO has reproduced the relevant portion of the Ld. CIT-2, Kolkata's order passed u/s. 263 of the Act from pages 1 ....
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....hat replies were in fact received from the shareholders to whom notice u/s. 133(6) of the Act were issued by him. Therefore, according to assessee, the identity of shareholders stands proved. According to Ld. AR, subsequently when AO noticed that the directors of the shareholder companies did not appear before him personally on 18.03.2014, the AO issued show cause notice to assessee for invoking best judgment assessment and thereafter, concluded that the assessee could not prove the identity and creditworthiness of the shareholders. According to the Ld. AR, despite the AO was in receipt of the revisional order of the Ld. CIT on 26.03.2013 and after a lapse of more than a year did not give sufficient opportunity to the assessee and in fact had issued notices to the directors of the shareholders to appear on 18.03.2014 and within twelve days from the date of non appearance of the directors/shareholders of the company, the AO has drawn an inference against the assessee and, therefore, no proper opportunity was granted to the assessee company to assist the AO in proving the identity, genuineness and creditworthiness of the shareholders. The Ld. AR relied on the decision of Hon'ble Supr....
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....u/s. 263 of the Act setting aside the 147/143 order was passed on 26.03.2013. The AO while giving effect to the order of the Ld. CIT has noted that he had issued notice u/s. 133(6) of the Act to the shareholders of the assessee company by post and the AO has acknowledged that he has received replies from the shareholders to whom notice u/s. 133(6) of the Act was issued. The AO noted that in pursuance of the 131 notice, since the directors of the shareholder companies had not appeared before him on 18.03.2014, the AO thereafter gave assessee another notice on 21.03.2014 as to why best judgment assessment should not be resorted to and after fixing the hearing on 26.03.2014, the AO after noticing that none appeared on behalf of the assessee, concluded that the assessee has not cooperated and, therefore, according to him, the identity and genuineness of the shareholder subscriber companies could not be established beyond doubt and, therefore, he made the addition of Rs. 24,55,00,000/-. We note that the Ld. CIT invoked the revisional jurisdiction u/s. 263 of the Act and found that the assessee company in its Balance Sheet has shown to have infused equity share capital of Rs. 24,55,00,00....
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.... of the Hon'ble jurisdictional High Court has been dismissed by the Hon'ble Supreme Court. Therefore, similar order of the Ld. CIT passed u/s. 263 of the Act has been upheld. We note that the AO while giving effect to the CIT's 263 order has noted that the shareholders of the assessee company has in fact replied to his notice u/s. 133(6) of the Act. However, the AO took the adverse view against the assessee on the plea that the directors of the share subscribing companies had not appeared before him on 18.03.2014 and thereafter giving notice on 21.03.2014 as to why he should not resort to best judgment assessment and after taking note that none appeared on 26.03.2014 concluded on 30.03.2014 that assessee has not proved beyond doubt the identity and creditworthiness of the shareholders and the lack of cooperation from the assessee has also been mentioned by the AO. We note that the AO had fixed the date of 18.03.2014 for the directors of share subscribing companies to appear before him, since none appeared, the AO issued notice to assessee on 21.03.2014 to show cause why best judgment assessment should not be resorted by him and fixed the matter on 26.03.2014. Thus the assessee prac....