TaxTMI 
TaxTMI 
TaxTMI 
2018 (8) TMI 1796
X X X X Extracts X X X X
X X X X Extracts X X X X
.... AO] under section 144/263/143(3)/147 of the Income Tax Act, 1961 ( in short "the Act") dated 14.03.2014 for the Assessment Year 2008-09. 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in upholding the addition made u/s 68 of the Act towards share capital in the sum of Rs. 10,31,00,000/- , in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is an investment company . The assessment for the Asst Year 2008-09 was framed u/s 143(3) / 147 of the act on 12.5.2010 determining total income of Rs. 35,777/- as against the returned income of Rs Nil. This re-assessment was subjected to revision proceedings u/s 263 of the Act by the ld CIT on the ground that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riber companies. The ld AO accordingly observed that the transactions of share capital are not genuine one in as much as the assessee had failed to produce the shareholders for verification of share capital investments obtained from them. Therefore, the entire share capital and share premium money of Rs. 10,31,00,000/- was added to the total income of the assessee by the ld AO. The ld CITA upheld the action of the ld AO. Aggrieved, the assessee is in appeal before us. 4. We have heard the rival submissions. According to the ld AR, 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. There....
X X X X Extracts X X X X
X X X X Extracts X X X X
....infused into the assessee company by verifying the identity, genuineness and creditworthiness of the shareholders, the ld CIT found the AO while doing assessment did not exercise the role of investigator and, therefore, the order of ld AO is erroneous so far as prejudicial to the interest of the revenue and directed the ld AO to make fresh assessment after taking into consideration the pernicious practice of converting black money by the modus operandi as described by the ld CIT. We also note in the said backdrop, the ld CIT has given certain guidelines which were given in order to facilitate deep investigation into the case. The ld AO cannot remain quiet after issuing summons u/s 131 to the share subscriber companies. The same when went un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntire transactions of share capital and share premium was 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 in the revision order u/s 263 of the Act. The ld CIT had specifically directed the ld AO to make enquiries directly from the shareholders....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 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....