TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1582
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee is an investment company. The return of income for the Asst Year 2008-09 was filed on 9.8.2008 declaring total income of Rs. 2,230/-, 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 22.7.2010 determining total income at Rs. 9,870/-. This reassessment 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 application money / 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 22.7.2010 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 ld AO observed that the assessee had raised ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... share capital of Rs. 3,69,01,543/- as unexplained cash credit. Accordingly the ld CITA enhanced the addition to Rs. 3,69,01,543/- from Rs. 3,68,00,000/- and upheld the action of the ld AO. Aggrieved, the assessee is in appeal before us. 5. 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 in the first round. Therefore, according to assessee, the identity of shareholders stands proved. According to ld AR, the notices issued to the assessee company could not be served as the address mentioned by the ld AO even in the assessment order is incomplete in as much as 'Block A', where the office of the assessee was situated, had not been mentioned in the notice as well as in the assessment order. That is the reason the assessee could not appear before the ld AO and present its case which eventually lead to framing of best judgment assessment u/s 144 of the Act by the ld AO. Hence the mistake committed by the ld AO in not fully mentioning the address of the assessee company had resulted in exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 passéd on 26.3.2013. The ld AO while giving effect to the order of the ld CIT has noted that he had issued summon u/s 131 of the Act to the directors of the shareholder companies, who had not appeared before him, the ld AO thereafter gave assessee another notice as to why the best judgment assessment should not be resorted to in the facts and circumstances of the case. The ld AO after noticing that none appeared on behalf of the assessee, 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. 3,68,00,000/- which was later enhanced to Rs. 3,69,01,543/- by the ld CITA . 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. 3,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hold the order passed by the ld CIT passed u/s 263 of the Act, which we learn to have been confirmed by the Hon'ble Jurisdictional High Court and the SLP preferred against the decision of the Hon'ble Jurisdictional High Court has been dismissed by the Hon'ble Supreme Court. We note that the shareholders had duly replied during the original re-assessment proceedings confirming the factum of investments before the ld AO . The ld AO chose to issue summons to the directors of the shareholders companies 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 exparte order for non-service of notice and non-appearance of the assessee. In this regard, we find that the address of the assessee noted by the ld CITA in his order is "M/s Wise Enclaves Pvt Ltd, 9/12A, Lal Bazar Street, 1st Floor, Kolkata -700001". The ld AR stated that Lal Bazar street is a huge place and in the absence of specific mention of Room Number and Block Number, it is not pra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith some proof of identity of some of the entries in question. But, from this inference, or form the fact that the transactions were through banking channels, it does not necessarily following that satisfaction as to the creditworthiness of the parties or the genuineness of the transactions in question would also have been established. 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT(Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the fact of the allegations of the Revenue that the account statements reveal uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of mak....