9911796707
TMI Blog2018 (4) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that all the necessary details were very much available before him. CIT had directed the ld AO to investigate into multiple layers of the investment in shares made by respective shareholders and identify the ultimate person holding controlling interest including the change in shareholding, directorship etc and then take the entire matter to its logical conclusion to bring out the facts on record. From the perusal of the assessment order, we find that this has not been done by the ld AO. Remand the matter back to the file of the ld AO for de novo assessment and to decide the matter as mandated by the ld CIT in section 263 order, after giving sufficient opportunity of being heard to the assessee. - I.T.A No. 1755/Kol/2016 - - - Dated:- 4-4-2018 - Shri M.Balaganesh, AM And Shri S.S.Viswanethra Ravi, JM For The Appellant : Shri M.D. Shah, AR For The RespondentShri G. Hangshing, CIT ORDER Per M . Balaganesh, AM 1. This is an appeal of the assessee directed against the order passed by the Learned Commissioner of Income Tax (Appeals) 6, Kolkata (in short the ld CITA) in Appeal No. 396/CIT(A)-6/Kol/2015-16 dated 28.7.2016 against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d again on 29.1.2014 and submitted documents relating to rental agreement and change of Directorship. Later the ld AO issued a show cause notice dated 30.1.2014 asking to explain why the allotment of shares in Asst Year 20085-09 should not be considered as not genuine and be taxed under the deeming provisions of section 68 of the Act. A complete reply to the notices u/s 133(6) of the Act similar to the one filed during the reassessment proceedings u/s 147/143(3) of the Act were filed by the A/R before the ld AO during this assessment proceedings. Summons u/s 131 were issued to the Directors of the company on 4.3.2014 to verify the genuineness and creditworthiness of the shareholders. They were asked to appear personally before the ld AO and produce / furnish details / documents in support of their case. None appeared before the ld AO and one of the Director Sri Binod Sharma refused to accept the summons. 5. The ld AO noticed that the assessee had received share application money of ₹ 32,71,45,000/- during the year in question. The ld AO observed that the assessee failed to provide any details / documents in support of the share application money received and accordingly th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is a statement in the order of the Tribunal, the fact - finding authority, that reads thus : We will straightaway agree with the assessee s submission that the Income - tax Officer had not given to the assessee proper opportunity of being heard . That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts . That order must be made after the assessee has been given a reasonable opportunity of setting out his case . We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the 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 Income - tax Officer had not giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and for that we note that the ld CIT had given the following directions:- 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 logical conclusion regarding the controlling interest . iii ) The AO is directed examine the source of realization from the liquidation of assets 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 . 9. With the aforesaid direction, the ld CIT set aside the order of the ld AO which was passed u/s 147 / 143(3) of the Act. We also note that simila ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uding the change in shareholding, directorship etc and then take the entire matter to its logical conclusion to bring out the facts on record. From the perusal of the assessment order, we find that this has not been done by the ld AO. In this regard, we would like to place reliance on the decision of Hon ble Delhi High Court in the case of CIT vs Jansampark Advertising Marketing Pvt Ltd in ITA No . 525 / 2014 dated 11 . 3 . 2015 wherein after noticing inadequate enquiry by authorities below, the court had 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 . ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
