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TMI Blog2017 (6) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... ostal services only Reply by Subscribers of Share Capital pursuant to the notices issued u/s 133(6) must be made by postal mode only because hand delivery is not recognized / illegal mode of delivery. iii) Examination of Subscribers of Share Capital by issuing notice u/s 133(6) was inadequate inquiry and AO was compulsorily required to cross examine the subscribers to share capital u/s 131 iv) AO did not enquire the existence, creditworthiness and genuineness of the subscribers. v) sharing the same address with some more companies renders the assessee to become unidentified and ingenuine. vi) assessee did not respond to the notice issued by the Ld. CIT. vii) SC judgment of Sumati Dayal was relevant to the present case. 4. The appellant craves leave to add to, alter, amend and/or modify the ground taken herein." 3. The Assessee is a company. It's income comprises of interest, service charges and profit on sale of investments. For A.Y.2008-09 the assessee filed return of income on 29.09.2008 showing a total income of Rs. 2,270/-. The said return was processed u/s 143(1) of the Act. Subsequently it was noticed by the AO that certain service charges had not been accounted f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and proper enquiry which was required in the case of the assessee company has not been done. The A.O. even did not cross examine or did not record the statement of any director of any subscriber companies u/s 131 of the LT. Act, 1961, before passing the assessment order, to check the genuineness of the identity of the directors or the actual existence of the Co.. The A.O. has also failed to send any intimation to the A.O. of the subscribers to the share-capital regarding the amount paid by them as contribution to the share capital. 4. It is seen from the copy of bank statement of the assessee that there are several debit and credit entries of similar figures - involving huge transactions during the period from 08.11.2007 to 05.03.200S. The total of credit side and debit side is about Rs. 8.09 Cr. Scrutiny in respect of the peculiar nature of such Bank transactions were required to be made. 5. Hence it is seen that thorough and proper inquiry into the existence, credit-worthy-ness and genuineness of subscribers in the case as claimed by the assessee company was not made by the A.O., nor the genuineness of the company and its directors was examined." 5. A show cause notice u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducted any enquiries into the various layers through which the money has been rotated for bringing it ultimately in the assessee company as subscription to the share capital. The duty of the A.O. becomes even more onerous specially in view of the fact that the modus operandi adopted by the assessee has been repeated in large number of cases completed by the same A.O. 19. In view of the above, the order passed by the A.O. is erroneous and judicial to the interest of revenue and hence, the order passed by the A.O. is set aside with the direction that he/ she should pass the assessment order after conducting independent detailed arid complete enquiries into the subscription to the share capital and premium to the extent of Rs. 7,60,00,000/ - introduced in this case. The A.O. should trace the source of share capital by enquiring into the various layers through which the money has been introduced in this company as share capital and also examine the directors of subscriber companies by issuing summons u/s 131 of the LT. Act. The A.O. should send information to the A.Os. having jurisdiction over the subscriber company to the share capital regarding its investment* into share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the main order having been passed in a group of cases led by Subhlakshmi Vanijya Pvt. Ltd. vs. CIT (ITA No.1104/Kol/2014) dated 30.7.2015 for the A.Y. 2009-10. 11. We find as has also been admitted by the ld. DR and the Ld AR that facts and circumstances of the cases under consideration are mutatis mutandis similar to those decided earlier. In our aforesaid order in Subhlakshmi Vanijya Pvt. Ltd., vs. CIT (ITA No. 1104/Kol/2014 A.Y. 2009-10), we have drawn the following conclusions: - A. Contention of the assessee that since the AO of the assessee-company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable. B. Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order, by holding that :- i) the enquiry conducted by the AO in such cases can't be construed as a proper enquiry; ii) CIT u/s 263 can set aside the assessment order and direct the AO to conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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