2025 (3) TMI 869

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..... of the share subscribers company appeared before the AO and therefore, the identity, creditworthiness of the investors and genuineness of the transactions could not be examined. CIT (A) after discussing the credentials of each of the investors affirmed the order of AO. We note from the analysis and discussion made by CIT(A) about the subscribing companies of the appellate order that these company have sufficient available source of funds in their respective hands and even filed the proof of identity, creditworthiness before the AO as well as before the CIT(A). CIT (A) has relied on the decision of Govindarajulu Mudaliar [1958 (9) TMI 3 - SUPREME COURT], Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT], NRA Iron & Steel (P.) Ltd. [2019 .....

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..... necessary information/ details with the ld. AO, in response to notice u/s 142(1) of the Act comprising names, addresses, PANs, ITR's, computations of income, audited annual accounts, bank statements along with confirmations from the investors qua the investments made in the equity capital of the assessee company. All these details qua five share subscribers are available at page no.77 to 185. The ld. AO also issued summons u/s 131 of the Act on 12.02.2015, to the directors of the assessee company for personal deposition, and also to produce certain details as mentioned at page no.2 of the assessment order besides produicing the share subscribers. However, the said summons to the directors of the assessee company returned unserved on 28.02.2 .....

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..... are available at page no.77 to 99 of the Paper Book. The ld. AO has not commented on the evidences furnished by the assessee and also has not pointing out any defect or deficiency and simply made the addition by treating the share capital/ share premium as unexplained expenditure u/s 68 of the Act on the ground that there was no compliance to the summons u/s 131 of the Act, as neither the directors of the assessee company nor the directors of the share subscribers company appeared before the AO and therefore, the identity, creditworthiness of the invetors and genuineness of the transactions could not be examined. Similarly, the ld. CIT (A) after discussing the credentials of each of the investors affirmed the order of the ld. Assessing Off .....

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