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TMI Blog2019 (3) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... intentionally or unintentionally does not make any relevance here. AO admittedly did not resort to make enquiries in the manner stated by the CIT u/s 263 inspite of the fact that all the necessary details were very much available before him. CIT had directed the 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. We deem it fit and appropriate, in the interest of justice and fair play, to remand the matter back to the file of the 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. Grounds raised by the assessee are allowed for statistical purposes. - I.T.A No. 509/Kol/2018 - - - Dated:- 1-1-2019 - Shri S. S. Godara, JM And Shri M.Balaganesh, AM For The Appellant : Shri M.D. Shah, AR For The Respondent : Shri Radhey Shyam, CIT DR ORDER Per M.Balaganesh, AM 1. This is an appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the shareholder companies. But no compliance was made against such summons. The ld AO accordingly observed that the transactions of share capital are not genuine one in as much as the assessee had failed to produce the persons who were directors of the assessee during the relevant period, failed to produce the shareholders before the ld AO for verification of share capital investments obtained from them. He also observed that the identity and creditworthiness of the shareholders could not be explained. Accordingly, he brought the receipt of share application money in the total sum of ₹ 7,65,00,000/- to tax as unexplained cash credit u/s 68 of the Act. 4. The ld CITA observed that since the source of assessee company s share capital remained unexplained in the light of the failure of the directors to attend personally and explain the business prudence of the investments and their own credentials, the addition on the facts of the case had been rightly made u/s 68 of the Act. Accordingly the ld CITA upheld the action of the ld AO. Aggrieved, the assessee is in appeal before us. 5. We have heard the rival submissions. According to the assessee, the shareholders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. In response to this, the 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 evidences before the ld AO to substantiate the identity, genuineness and creditworthiness of share subscribers. The ld AO has noted that the assessee did not co-operate 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(3) order was passed on 28.3.2013. The ld AO while giving effect to the order of the ld CIT has noted that he had issued summon u/s 131 of the Act to the directors of the shareholder companies , who had not appeared before him , the ld AO thereafter gave assessee another notice as to why the addition should not be made in the hands of the assessee in the facts and circumstances of the case. The ld AO after these enquiries had proceeded to hold that the identity, creditworthiness and genuineness of the shareholder subscriber companies could not be established beyond doubt and, therefore, he made the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in those cases , one of it of Subhalakshmi Vanijya Pvt Ltd vs CIT in ITA No. 1104/Kol/2014 dated 30.7.2015, 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. We note that the shareholders had duly replied during the original re-assessment proceedings confirming the factum of investments before the ld AO . The ld AO chose to issue summons to the directors of the shareholders companies who did not appear before him which lead to ld AO drawing adverse inference against the assessee by resorting to make addition towards share application money u/s 68 of the Act. 7.1. We find that it is not in dispute that the entire transactions of share capital and share premium was the subject matter of verification in the re-assessment proceedings by the ld AO, wherein the shareholders had duly responded to notice u/s 133(6) of the Act by confirming the fact of making investments in the assessee company. The shareholders had also duly f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a further enquiry in exercise of the power under Section 250(4). His approach not having been adopted, the impugned order of ITAT, and consequently that of CIT(Appeals), cannot be approved or upheld. 7.2. In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the decision of Hon ble Delhi High Court supra, we deem it fit and appropriate, in the interest of justice and fair play, to 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. Accordingly, the Grounds raised by the assessee are allowed for ..... 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