TaxTMI 
TaxTMI 
2018 (10) TMI 185
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....the following manner: "i) Examine the genuineness and source of share capital, not on a test check basis, but in respect of each and every shareholder by conducting independent enquiry not through the assessee. The bank account for the entire period should be examined in the course of verification to find out the money trail of the share capital. ii. Further the AO should examine the directors as well as examine the circumstances which necessitated the change in directorship if applicable. He should examine them on oath to verify their credentials as director and reach a logicl conclusion regarding the controlling interest. iii). The AO is directed to examine the source of realization from the liquidation of asset shown in the balance sheet after the change of Directors, if any. After conducting the inquiries & verification as directed above, the AO should pass a speaking order, providing adequate opportunity of being heard to the assessee." 3. The assessee company preferred an appeal before the Tribunal against the said order u/s. 263 of the Act. Meanwhile, reassessment proceeding pursuant to order u/s. 263 of the Act was initiated against th....
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....n original which have been examined. He also furnished the other details/documents etc., which have also been perused. Information was also sought for by issuing notices u/s.133[6] of the LT. Act,1961 from various shareholders and reply[s] received are placed on record. To verify the justification of the share capital and share premium received, the identity, creditworthiness and genuineness of the above 18 [ eighteen ], alleged shareholders, summons u/s.131 of the I.T. Act, 1961 were issued to the Principal Officers [the, then Directors ] of the assessee company. But, it has been observed that none has been appeared. Even the AIR of the assessee failed to produce the then Directors. The onus of the assessee company to prove identity, creditworthiness and genuineness of the transactions are hence not discharged. Therefore, the identity, creditworthiness and genuineness of the above 18 [ eighteen ] alleged shareholders remain unexplained. It is also to be mentioned that the share capital, reserve and surplus, net worth, turnover of the assessee company also remained unexplained which are necessary for an investor to consider before an investment is made. It leads t....
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....hat the fact in case of the assessee company is otherwise than what has been observed in the proceedings u/s.263 of the I.T. Act, 1961. It is, therefore, logical to hold that in its case, the transaction revolving around the raising of share capital and the investments thereof have been prejudicial to the interest of revenue. Considering the facts, circumstances and the order passed u/s.263 dated 30-03-2013, the sum so credited amounting to Rs. 10,22,50,000/- in the books of the assessee company for the relevant previous year from 18 [ eighteen ]alleged shareholders and Rs. 1,00,000/ - initial share capital is hereby treated as bogus and charged to Income Tax being income of the assessee company for the assessment year 2008-09 u/s.68 of the I.T.Act, 1961." 5. We note that while giving effect to the order passed u/s. 263 of the Act by the AO, Ld. CIT's direction has not been complied with. Ld. AR drew our attention to page 5 of the reassessment order wherein we note that the Ld. AR of the assessee had produced the books of account like cash book, bank statement in original etc., which the AO acknowledges to have been examined. Thereafter, AO admits that Ld. AR of assesse....
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....matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Incometax Officer had not given a proper opportunity of hearing to the assessee ?" In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the assessee. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated." 6. In similar case this Tribunal in ITA No.393/Kol/2016 in M/s. Star Griha (P) Ltd. Vs. ITO for AY 2008-09 dated 15.12.2017 has observed as under:- "......We also note that the Ld. CIT after looking into the pernicious practi....