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TMI Blog2023 (10) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... is liable to be made. Even in the present facts, the principal CIT observed that in some of the cases prior to making the investments in the assessee company, there was immediate credits in the bank accounts of some of the investors, for which no explanation has been provided by the assessee during the course of assessment proceedings. As decided in case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] case that if due to an erroneous order of ITO, Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to interests of revenue. Further, if due to an erroneous order of Assessing Officer, revenue is losing tax lawfully payable by a person, it should be certainly prejudicial to interest of revenue. In our considered view, the enquiry made by the Assessing Officer was not adequate and he simply accepted the version of the assessee without application of mind. Principal CIT has not erred in facts and in law in holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the revenue. Decided against assessee. - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank statements of some of these persons also revealed that in some cases Cash / Cheques were deposited / Credited in their bank accounts immediately prior to issuing funds to the assessee company either as share capital or as loan and in some cases, the money was routed through two layers. Further, PCIT observed that, out of 21 subscribers to share capital, only four persons submitted their balance-sheets and in the cases of these four persons also, apart from mere filing of balance sheet, no explanation was available on record for the source of investment in the hands of these subscribers. On perusal of such balance-sheets in the cases of these four persons, it was observed that huge amount of unsecured loans was availed by these persons indicating that the money invested by them was not their own but was a loan in their hands. Further, it is also observed that all these share-holders, had invested substantial amount of money by way of unsecured loan or share application money but barring only three persons, all of them are having income less than 3.00 lacs as per the copy of return filed by them. Accordingly, the PCIT was of the view that this proves that these subscribers are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 09.11.2018, the Assessing Officer had again called for details of unsecured loans taken by the assessee during the year under consideration. Accordingly, the Counsel for the assessee submitted that the Assessing Officer had made adequate enquiries on the aforesaid aspects during the course of assessment proceedings and accordingly, the Counsel for the assessee placed reliance on judicial precedents, including by the Rajkot Tribunal in support of his contention that once Assessing Officer made sufficient enquiries, proceedings under Section 263 of the Act cannot be initiated by the principal CIT. 5. In response, the Ld. DR placed reliance on the fact that the principal CIT has made a specific observation that sufficient enquiries which was required to be made in the matter was not done by the Assessing Officer during the course of assessment proceedings. The Ld. DR placed reliance on the case of Babulal S. Solanki104 taxmann.com 155 (Ahmedabad-Trib.), wherein it was held that Revision proceedings under Section 263 were justified as Assessing Officer accepted assessee's claim of considering sale consideration as per agreement, instead of jantri value on which stamp duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it in the bank accounts of some of the investors, for which there is no plausible explanation, then addition under Section 68 of the Act is liable to be made. Even in the present facts, the principal CIT observed that in some of the cases prior to making the investments in the assessee company, there was immediate credits in the bank accounts of some of the investors, for which no explanation has been provided by the assessee during the course of assessment proceedings. In the case of Malabar Industrial Co. Ltd. 109 Taxman 66 (SC), the Hon'ble Supreme Court held that if due to an erroneous order of ITO, Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to interests of revenue. In the case of Neelkantha Commosales (P.) Ltd. 135 taxmann.com 326 (Calcutta), the High Court held that even under non-amended provision of Section 68, an Income-tax Officer was not precluded from making an inquiry about true nature and source of sum found credited in books of assessee, even if same was credited as receipt of share application money. In the case of Nisha Sharma146 taxmann.com 209 (Jabalpur - Trib.), the ITAT held that where assessee's case was select ..... X X X X Extracts X X X X X X X X Extracts X X X X
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