TaxTMI 
TaxTMI 
2018 (4) TMI 329
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....The brief facts of this issue is that the assessee is an investment company. The return of income for the Asst Year 2008-09 was filed on 30.9.2008, which was duly processed u/s 143(1) of the Act. Later the assessment was reopened by issuance of notice u/s 148 of the Act and re-assessment was completed u/s 147/143(3) of the Act on 5.5.2010 determining total income at Rs. 93,834/-. This re-assessment was subjected to revision proceedings u/s 263 of the Act by the ld CIT on the ground that the ld 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. Hence the ld CIT passed the revision order u/s 263 of the Act on 26.3.2013 by setting aside the order passed by the ld AO u/s 147/143(3) of the Act dated 5.5.2010 with certain specific guidelines regarding investigation to be carried out while assessing the assessee de novo. The ld AO in the consequential proceedings giving effect to the order of ld CIT u/s 263 of the Act, had reproduced the relevant portion of the ld CIT's directions. The notice u/s 142(1) of the Act calling for certain details and fi....
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.... Tax(Appeals) erred in upholding the addition of Rs. 32,71,45,000/- on account of share application money being added as cash credit u/s 68 of the IT Act, 1961. The addition is not called for and hence the same be deleted. 4. The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. 5. For that the Ld. Commissioner of Income Tax (Appeals) did not permit the assessee to produce relevant documents/evidences in the course of the hearing. Hence, the appellate order was bad in law for want of opportunity and proper hearing and thus be quashed. 7. We have heard the rival submissions. According to the assessee, the shareholders of the assessee had duly responded to notices issued u/s 133(6) of the Act directly to the ld AO by giving proper replies with regard to details called for by the ld AO. Therefore, according to assessee, the identity of shareholders stands proved. According to ld AR, the ld AO was directed by the ld CIT in the section 263 order to make independent enquiries from the shareholders of the subscribing companies on his own and not through the assessee. The ld CIT had a....
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....d have brought all evidences before the ld AO to substantiate the identity, genuineness and creditworthiness of share subscribers. The ld AO has noted that the assessee did not co-operate with the assessment proceedings and, therefore, the assessee cannot be given another innings. We note that the ld CIT's exercise of revisional jurisdiction u/s 263 of the Act setting aside the 147/143(3) order was passed on 26.3.2013. The ld AO after noticing that none appeared on behalf of the assessee company in response to the summons issued u/s 131 of the Act, concluded that the assessee had not co-operated 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. 32,71,45,000/- . 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 application money of Rs. 32,71,45,000/- and since the ld AO had not enquired into the source of the same by verifying the identity, genuineness and creditworthiness of the shareholders, the ld CIT found the AO while doin....
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....ectors of the assessee company who did not appear before him which lead to ld AO drawing adverse inference against the assessee by resorting to make best judgment assessment. We find that the assessment order has been passed u/s 144 of the Act on the ground of non-cooperation by the assessee. Similarly the ld CITA also had passed an ex parte order. 9.1. We find that it is not in dispute that the entire transactions of share application money were the subject matter of verification in the re-assessment proceedings by the ld AO, wherein the shareholders had duly responded to notice u/s 133(6) of the Act by confirming the fact of making investments in the assessee company. The shareholders had also duly furnished their income tax assessment particulars. Pursuant to directions of the ld CIT u/s 263 of the Act, the ld AO was mandated to make direct verifications about the genuineness of the transactions and creditworthiness of the shareholders by making necessary specific enquiries as listed out supra. The ld CIT had specifically directed the ld AO to make enquiries directly from the shareholders and not through the assessee. Hence non-appearance of the assessee or its directors befo....