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TMI Blog2018 (6) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... d since none represented on behalf of assessee, has passed the ex parte order. As per the Ld. AR, the assessee was promptly following up the appeal and whenever it could not represent before the Ld CIT(A) for reasons beyond its control, had promptly filed adjournment application which fact has been acknowledged by the Ld. CIT(A). However, according to Ld AR, the Ld. CIT (A) found fault with the assessee not appearing before him on 04.08.2016 and came to the conclusion that assessee is not interested in pursuing the appeal is not correct, when the facts as revealed by Ld. CIT(A) himself is that assessee had filed an adjournment application before him on 17.06.2016, and thereafter the assessee did not get any notice of hearing fixing the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. xxxvi) 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." 4. However, we note that AO's investigation as per his own words is as under: "The company issued 804000 shares at face value of Rs. 10/- per share but at premium of Rs. 90/- per share. "What prompted the subscribers to the shares to pay such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see could not furnish the reason of giving different addresses. Under the circumstances, it was a great confusion about the addresses of shareholders. In reply to the notice u/s.142(1) of the IT Act, 1961, the A/R of assessee could not produce books of accounts and share registers of the assessee for A.Y. 2008-09. So the genuineness of share capital of the assessee could not be ascertained. The amount of Share Capital Fund is actually the own money of the assessee company routed through the hands of the shareholders. Under the circumstance hereby disallowed share capital of Rs. 80,40,000/- and share premium Rs. 7,23,60,000/- of the assessee company and added back to the total income of assessee for the A.Y.2008-09." 5. So, we note that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd conducted the investigation in a fair manner in the light of CIT order. Without doing that AO has suddenly come to a conclusion that assessee failed to prove the genuineness of the share capital. These facts per-se reveal non-application of mind. Therefore, we find force in the submission of the Ld. AR that no proper opportunity was given to assessee by AO during the reassessment proceedings and so we are, therefore, of the opinion that assessee did not get proper opportunity before the AO during reassessment proceedings. The Hon'ble (three judge bench) of the Hon'ble Supreme Court in Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) has held as under: "It is unnecessary to go into great detail in these matters for there is a statement i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter shall now be remanded to the assessing authority for fresh consideration, as aforestated." 7. In similar case this Tribunal in ITA No.393/Kol/2016 in M/s. Star Griha (P) Ltd. Vs. ITO for AY 2008-09 dated 15.12.2017 has observed as under:- "......We also note that the Ld. CIT after looking into the pernicious practice of converting black money into white money has given the guidelines to AO as to how the investigation should be conducted to find out the source. Since similar order of the Ld. CIT passed u/s. 263 of the Act has been upheld by the Tribunal as well as by the Hon'ble Calcutta High Court as well as the SLP has been dismissed by the Hon'ble Supreme Court, similar order of the Ld. CIT has to be given effect to as direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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