TMI Blog2018 (8) TMI 1796X X X X Extracts X X X X X X X X Extracts X X X X ..... as listed out in the revision order u/s 263 - CIT had specifically directed the AO to make enquiries directly from the shareholders and not through the assessee. Non-appearance of the assessee before the ld AO and non-production of the shareholders of the assessee company before the AO, intentionally or unintentionally does not make any relevance here. CIT had directed the AO to investigate into multiple layers of the investment in shares made by respective shareholders and identify the ultimate person holding controlling interest including the change in shareholding, directorship etc and then take the entire matter to its logical conclusion to bring out the facts on record. From the perusal of the assessment order, we find that this ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amed u/s 143(3) / 147 of the act on 12.5.2010 determining total income of ₹ 35,777/- as against the returned income of Rs Nil. This re-assessment was subjected to revision proceedings u/s 263 of the Act by the ld CIT on the ground that the ld AO had not properly enquired and verified the genuineness and source of share capital and share premium as well as the identity and creditworthiness of the shareholders who had applied for shares of the company. Hence the ld CIT passed the revision order u/s 263 of the Act on 12.3.2013 by setting aside the order passed by the ld AO u/s 147/143(3) of the Act dated 12.5.2010 with certain specific guidelines regarding investigation to be carried out while assessing the assessee de novo. The ld AO ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the rival submissions. According to the ld AR, the shareholders of the assessee had duly responded to notices issued u/s 133(6) of the Act directly to the ld AO by giving proper replies with regard to details called for by the ld AO in the first round. Therefore, according to assessee, the identity of shareholders stands proved. We find that the ld CIT in her section 263 order dated 12.3.2013 had directed the ld AO to make independent enquiries with the shareholders of the assessee company in the manner known to law and not through the assessee. This is very clear from the directions of the ld CIT. In response to this, the ld DR vehemently opposed this plea of the assessee and contended that the assessee company was very well aware of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. We also note in the said backdrop, the ld CIT has given certain guidelines which were given in order to facilitate deep investigation into the case. The ld AO cannot remain quiet after issuing summons u/s 131 to the share subscriber companies. The same when went unanswered, the ld AO should have resorted to other actions available as per law, which was not done in the instant case. Without resorting to such further verification / investigation / action as per law, the ld AO ought not to have drawn any adverse inference against the assessee company. 5. At the cost of repetition, we would like to state that the ld CIT had specifically given the manner in which investigation and further enquiries are to be carried out by the ld AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns about the genuineness of the transactions and creditworthiness of the shareholders by making necessary specific enquiries as listed out in the revision order u/s 263 of the Act. The ld CIT had specifically directed the ld AO to make enquiries directly from the shareholders and not through the assessee. Hence non-appearance of the assessee before the ld AO and nonproduction of the shareholders of the assessee company before the ld AO, intentionally or unintentionally does not make any relevance here. The ld CIT had directed the ld AO to investigate into multiple layers of the investment in shares made by respective shareholders and identify the ultimate person holding controlling interest including the change in shareholding, directorship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a 'further enquiry' in exercise of the power under Section 250(4). His approach not having been adopted, the impugned order of ITAT, and consequently that of CIT(Appeals), cannot be approved or upheld. 5.1. In view of the aforesaid findings in the facts and circumstances of the case and respectfully following the decision of Hon ble Delhi High Court supra, we deem it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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