2009 (10) TMI 587 - HC - Income Tax

Cash credit - Share application money - The assessee had given the details of name and address of the shareholder their PAN/GIR number and had also given the cheque number name of the bank - It was expected on the part of the Assessing Officer to make proper investigation and reach the shareholders - The Assessing Officer ought to have found out their details through PAN cards bank account details or from their bankers so as to reach the shareholders since all the relevant material details and particulars were given by the assessee to the Assessing Office - Decided in favor of assessee.

Summary

Issues:
Failure of Assessing Officer to investigate alleged bogus shareholders thoroughly.

Analysis:
The High Court, in this judgment, addressed the issue of the failure of the Assessing Officer to conduct a proper investigation into alleged bogus shareholders of the assessee company. The Court noted that the assessee had provided all necessary details regarding the shareholders, including their names, addresses, PAN/GIR numbers, and bank details. Despite this, the Assessing Officer only issued summons, which were returned as "not traceable." The Court emphasized that the Assessing Officer should have utilized PAN cards, bank account details, or contacted their bankers to reach the shareholders. The Court highlighted that the Tribunal had correctly followed the precedent set by the apex court in a similar case, emphasizing that the Department could proceed against the alleged bogus shareholders individually if necessary. Ultimately, the Court found no substantial question of law involved in the appeal and dismissed it with no order as to costs.