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TMI Blog1992 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ed company was completed by the Income-tax Officer under section 143(3) on September 4, 1986. The Commissioner of Income-tax called for and examined the assessment records. He noticed that the assessee-company was incorporated on May 11, 1985, and that the issued and subscribed capital of Rs. 10 lakhs was divided into 1 lakh equity shares of Rs. 10 each fully paid up. On enquiry, he found that the Assessing Officer did not make a proper and detailed enquiries into the genuineness and creditworthiness of the persons who subscribed to the equity capital of the assessee-company. Relying on the case of Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi), he opined that the assessment order framed by the Assessing Officer was erroneous in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e record that the Assessing Officer issued summons to 34 persons to appear and make depositions before him. But, out of these, 13 notices came back unserved with the postal remarks "not known". With respect to 17 other persons, though summonses were served, they did not appear and simply they sent letters confirming the subscription to the share capital of the assessee-company. It was also found that these letters were written on similar papers and typed in the same typewriter. No acknowledgment or reply was received from six persons. From the facts and circumstances of the case, the Commissioner of Income-tax was convinced that the present case is covered by the decision of the Delhi High Court in Gee Vee Enterprises [1975] 99 ITR 375, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Jayanta Prasad Khaitan, an advocate, to assist the court which he has ably done. At the very outset, it has to be observed that, although an issue was raised before the Tribunal as to whether an enquiry from the assessee-company about the source of investment of its shareholders in the shares of the assessee-company was authorised and called for in the assessment of the assessee-company, in the view we have taken on the facts, it is not necessary to go into that question or to decide the issue one way or the other. The Tribunal proceeded on the footing that there could be no enquiry regarding the source of investment of the shareholders in the shares of the company but we are not in a position to accept this extreme proposition. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. As a matter of fact, the Commissioner of Income-tax, in this particular case, came to the conclusion on the facts that the matter relating to shareholders and their subscription to the shares of the assessee-company was not looked into by the Assessing Officer while framing the assessment relevant to the subsequent assessment year and it was found that the Assessing Officer issued summons to all the 34 persons to appear before him and to make depositions in this connection. Out of that, 13 notices came back unserved with the postal remark "not known". With respect to 17 other persons, though the summons was served, they did not appear and they simply sent letters confirming their subscription to the share capital of the company. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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