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2014 (10) TMI 694 - AT - Income TaxJurisdiction of CIT u/s 263 – Requisite enquiries carried out or not – AO not acted after obtaining the information - Held that:- the return of income was filed on 31.08.2009 - The assessee company had shown no trading activity - after collecting some information the AO did not act any further - There is no whisper in the order sheet as to whether AO made any discussion or enquiry with regard to the share capital and share premium - there was no enquiry by the AO and hence the CIT was justified in taking action u/s 263 of the Act - CIT has referred to the common practice being followed particularly in Kolkata where through the entries of share capital and share premium in dummy companies a very large amount is sought to be introduced and laundered by way of these companies - the issue of share capital and share premium needed an enquiry in the proper sense of the word and not a facade of enquiry. It is evident that after collecting some information the AO did not act any further. There is no whisper in the order sheet as to whether AO made any discussion or enquiry with regard to the share capital and share premium. In order dated 18.03.2011 it was barely two days after the receipt of last reply the AO writes in the assessment order that “notice u/s 133(6) of the Act were issued to the share subscribers on test check basis the replies from their end are verified”. In this regard we agree with the ld. DR, the AO has shown undue haste in completing the assessment. There was no enquiry whatsoever by the AO rather the entire exercise was to make a perfunctory attempt to give a facade of enquiry – there was no cogent substance in the submission that prior to the introduction of proviso to section 68 and introduction of section 56(2)(viib) there was no requirement on the AO to enquire the genuineness of amount received as share capital and share premium - The receipt of any amount by whatever name called if the same is not genuine does fall under the ken of section 68 - there is no infirmity in the order passed by the CIT u/s 263 – Decision in Zigma Commodities Private Limited vs ITO [2014 (5) TMI 672 - CALCUTTA HIGH COURT] followed - Decided against assessee.
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