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TMI Blog2015 (4) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... a was available but not discussed by the AO. Had he cared to do so, the identity of the investors, the genuineness of the transaction and the credit worthiness of the share applicants would have been apparent. Even otherwise, the share applicants’ particulars were available with the AO in the form of balance sheets income tax returns, PAN details etc. While arriving at the conclusion that he did, the AO did not consider it worthwhile to make any further enquiry but based his order on the high nature of the premium and certain features which appeared to be suspect, to determine that the amount had been routed from the assessee’s account to the share applicants’ account. As held concurrently by the CIT (Appeals) and the ITAT, these conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association, income tax return, balance sheet, PAN details etc. The AO considered the submissions and the materials on record. He also took note of the fact that the notices sent under Section 133(6) to the share applicants were returned unserved. After his analysis of the material placed on the record, the AO added back the sum of ₹12,78,60,000/-. Before the CIT (Appeals) - to whom the assessee preferred an appeal, it was contended that all necessary documents to establish the identity of the share applicants, their creditworthiness and genuineness of the transaction had been placed on record. In these circumstances, the AO could not have on the basis of suspicion fuelled by the higher premium claimed by the assessee and the lack of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness and file their tax returns on regular basis. The taxes are paid by them on the income so earned by them. The Principal Officers from the companies attended before the ADIT, Investigation in Kolkata and submitted that the investment in the appellant company has been made from the realisation of sale of earlier investments held by the companies. In the light of observations of the Hon'ble Supreme Court in the case of CIT Vs. Lovely Exports (P) Ltd. reported in 216 CTR 295, the onus on the appellant has been duly discharged. Further, the search had been conducted at the premises of the appellant u/s 132 of the Act and no incriminating documents or other assets were found or seized to indicate that the appellant had in fact routed its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors of the Companies stated, in their depositions that the companies still hold the shares. Photocopies of the statements are enclosed. 5. The ITAT also noted that the balance sheets of the investors showed that the share applicants were possessed of considerable means and had been existing for a long period of time prior to the transaction in question. The ITAT reasoned as follows: 10. On an analysis of these records, we are of the view that the department was able to lay its hands on the addresses of the share applicants and where the share applicants are assessed. These companies are existing from long period. They have confirmed that they have contributed to the share capital of the assessee company. The next aspect is their c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent status of these companies as well as position of investment. The learned counsel for the assessee has placed on record the details of shareholding pattern as on 31.3.2013, it reveals that these companies are still keeping the shares of the respondent. Shri Mahabir Management is keeping 10,000 share and Bhuvania Brothers is holding 12,590 share in M/s Anshika Consultants Pvt Ltd. Similarly, in Anant Overseas, Bhuvania Brothers is holding 12,000 shares, Star Pleat Vincom is holding 14,700 shares. In Flex International, Shri Mahabir Management Services is holding 37210 shares. Though these details were not before the Assessing Officer and could not be because this in the shareholding pattern as on 31.3.20 13, these were referred by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheets income tax returns, PAN details etc. While arriving at the conclusion that he did, the AO did not consider it worthwhile to make any further enquiry but based his order on the high nature of the premium and certain features which appeared to be suspect, to determine that the amount had been routed from the assessee s account to the share applicants account. As held concurrently by the CIT (Appeals) and the ITAT, these conclusions were clearly baseless and false. This Court is constrained to observe that the AO utterly failed to comply with his duty considers all the materials on record, ignoring specifically the most crucial documents. We place these observations on the record and direct a copy of the judgment to be furnished to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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