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TMI Blog2017 (12) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... DER Per Shri A.T.Varkey, JM This is an appeal filed by the assessee against the order of Ld. CIT(A)-2, Kolkata dated 01.01.2016 for AY 2008-09. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the addition of ₹ 24,55,00,000/- made by the AO on account of alleged unexplained cash credit by invoking the provisions of sec. 68 of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 3. Brief facts of the case are that assessee filed its original return of income declaring total income of ₹ 1,840/- which was processed u/s. 143(1) of the Act. AO noticed that the assessee derives income from share dealing and investment. The AO after examination of the Balance Sheet and P L Account of the assessee company noticed that preliminary expenses of ₹ 46,840/- written off which was disallowable had not been disallowed in the returned exempt income of ₹ 10,539/- has not been taken into account and there was on that account escapement of income. So, he issued notice u/s. 148 of the Act and reopened the assessment and passed order u/s. 147/143(3) of the Act on 07.07.2010 determining the total income at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sum reflected by the assessee in the Balance sheet as share capital and share premium was added back in the hands of the assessee as undisclosed cash credit and thus made an addition of ₹ 24,55,00,000/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to dismiss the appeal and thus confirmed the action of the AO. 6. We have heard rival submissions and gone through the facts and circumstances of the case. According to the assessee, this appeal emanates from the order of AO dated 30.03.2014 giving effect of the order of Ld. CIT passed u/s. 263 of the Act dated 26.03.2013. The Ld. AR brought to our notice that the AO while giving effect to the order of the Ld. CIT issued notice u/s. 133(6) of the Act to the shareholders of the assessee company by post and the AO has acknowledged clearly that replies were in fact received from the shareholders to whom notice u/s. 133(6) of the Act were issued by him. Therefore, according to assessee, the identity of shareholders stands proved. According to Ld. AR, subsequently when AO noticed that the directors of the shareholder companies did not appear before him personally on 18.03.2014, the AO issued sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our 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. 7. On the other hand, Ld. DR vehemently opposed this plea of the assessee and contended that the assessee company was very well aware of the revisional order passed by the Ld. CIT and should have brought all evidence before the AO to substantiate the identity, genuineness and creditworthiness of the share subscribers. The AO has noted that the assessee did not cooperate 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 order was passed on 26.03.2013. The AO while giving effect to the order of the Ld. CIT has noted that he had issued notice u/s. 133(6) of the Act to the shareholders of the assessee company by post and the AO has acknowledged that he has received replies from the shareholders to whom notice u/s. 133(6) of the Act was issued. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn 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. 8. With the aforesaid direction, the Ld. CIT set aside the order of the AO which was passed u/s. 147/143(3) of the Act. We also note that similarly placed assessees had challenged the exercise of revisional jurisdiction u/s. 263 of the Act before this Tribunal in those cases one of it of Subha Lakshmi Vanijya Pvt. Ltd. Vs. CIT in ITA No. 1104/Kol/2014 dated 30.07.2015, wherein the Tribunal was pleased to uphold 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. Therefore, similar order of the Ld. CIT passed u/s. 263 of the Act has been upheld. We note that the AO while giving effect to the CIT s 263 order has noted that the shareholders of the assessee company has in fact replied to his notice u/s. 133(6) of the Act. However, the AO too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s aforestated it has to go back to AO. We also note that the Hon ble Delhi High Court in the case of CIT Vs. Jansampark Advertising Marketing Pvt. Ltd. in ITA No. 525/2014 dated 11.03.2015 wherein after noticing inadequate enquiry by authorities below have held as under: 41. We are inclined to agree with the CIT(Appeals), and consequently with ITAT, to the extent of their conclusion that the assessee herein had come up with 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, par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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