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2017 (6) TMI 182 - ITAT KOLKATA

2017 (6) TMI 182 - ITAT KOLKATA - TMI - Revision u/s 263 - CIT directing the AO to make proper enquiries in respect of the receipt of share capital - no enquiry was conducted - Held that:- It is relevant to mention that we have disposed of more than 500 cases involving same issue through certain orders with the main order having been passed in a group of cases led by Subhlakshmi Vanijya Pvt. Ltd. vs. CIT [2015 (8) TMI 174 - ITAT KOLKATA ] to hold that the contention of the ld. AR that since the .....

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act that no enquiry was conducted or no proper enquiry was conducted in the required circumstances, is sufficient in itself to invoke the provisions of section 263. - Decided against assessee. - I.T.A No. 461/Kol/2014 - Dated:- 2-6-2017 - Sri N.V.Vasudevan, JM And Shri Waseem Ahmed, AM For The Appellant : Shri J.N.Gupta, FCA For The Respondent : Shri Niraj Kumar, CIT(DR) ORDER Per N.V.Vasudevan, JM This is an appeal by the Assessee against the order dated 21.01.2014 of CIT, (Kol-I), Kolkata pass .....

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ating the following: i) AO erred by not examining all the Subscribers of Share Capital and AO erred by examining Subscribers of Share Capital only on test check basis. (ii) AO was required to serve notice through postal 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 ina .....

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/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 ₹ 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 for by the assessee in its profit and loss account. A notice u/.s 148 of the Act was issued. The .....

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e year, the authorized capital as well as the paid-up share capital of the assesee-company increased from 25,00,000/- and ₹ 25,00,000/- respectively to 41,00,000/- and 40,02,000/- respectively. The assessee-company also received Share Premium amounting to ₹ 7,44,80,000/- during the year. The source of the receipt of share capital and share premium as to the identity, Creditworthines and genuineness of the transaction has been verified by issuing letter for verification U/s 133(6) of .....

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eet It is noticed that Sri J.N. Gupta, FCA appeared as the A/R of the assessee company before the Assessing Officer. It is further gathered from the assessment record that the reply in response to notice u/s 133(6) of the I.T. Act, 1961 was received in the office of the A.O. from which it cannot be ascertained as to who appeared in response to the notice issued u/s 133(6) of the I.T. Act, 1961 & as how the replies were received, as this is no where mentioned in the order sheet. It is also ga .....

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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 h .....

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cause notice u/s 263 of the Act dated 20.12.2013 was issued on the above lines. The assessee filed reply to the said show cause notice dated 03.01.2014. None attended on behalf of the assessee on 15.01.2014 on which date the hearing were fixed before CIT. The CIT deputed an Inspector of Income Tax attached to the concerned ward to seek certain information. The Inspector so deputed found that the address of the assessee as given in the return of income was the office of Chartered Accountant firm .....

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re value and the premium thereon is as follows: Value per share is :Rs. 10/- Premium per share : ₹ 490/- 9. It is surprising that a company which has been freshly started having no ck record of any worth-while business nor any reputation in terms of reliable management has attracted the subscribers to pay premium @ ₹ 490/- per share. This fact itself should have raised the curiosity of the A.O. to prompt him into action by conducting thorough enquiry into at least 2 to 3 layers to re .....

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to the interests of Revenue. 6. The CIT thereafter set aside the order of the AO and directed the AO to make proper enquiries. The following were the relevant observations of the CIT :- 18. In this case the A.O. has completed the assessment u/s 143(3) read with 148 without even initiating / conducting complete enquiry into the subscription of the share capital and the large amount of premium during the year and the A.O. has also not conducted any enquiries into the various layers through which t .....

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he 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 ₹ 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 .....

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s who are shown as directors of the assessee company and examine them on oath to verify their credential as directors. The A.O. should pass speaking order after providing reasonable opportunity to the assessee and verifying the source of share capital including the share premium of all the subscribers and rotation of money through various hands so as to ascertain the true nature of transaction which will bring to the fore, the reality of the transactions. 7. Aggrieved by the order of CIT directi .....

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by this Tribunal and the order in the lead case in such grounds of appeal was rendered in the case of Subhlakshmi Vanijya Pvt. Ltd., vs. CIT (ITA No. 1104/Kol/2014 A.Y. 2009-10) order dated 30.07.2015. He therefore submitted that the contentions raised in the grounds of appeal by the assessee have been dealt with by the Tribunal in the aforesaid orders and therefore the decision rendered in the said order should be followed by the Tribunal. 9. We have considered the rival submissions. Though in .....

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s involving same issue through certain orders 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 .....

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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 a thorough enquiry, notwithstanding the jurisdiction of the AO in making enquiries on the issues or matters as he considers fit in terms of section 142(1) and 143(2) of the Act, which is relevant only up to the completion of assessment ; iii) Inadequate inquiry .....

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ision is sought to be done on the premise that the AO did not make enquiry thereby rendering the assessment order erroneous and prejudicial to the interest of the revenue on that score itself. C. In the given facts and circumstances of all such cases, the notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give .....

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