TMI Blog2019 (6) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... s. NRA Iron Steel Pvt Ltd. [ 2019 (3) TMI 323 - SUPREME COURT] had dealt with somewhat similar situation and concluded against the assessee as the creditworthiness of the investors and genuineness of the transactions cannot be proved. Hon ble Apex Court in the case of Kapurchand Shrimal Vrs. CIT [ 1981 (8) TMI 2 - SUPREME COURT] has held that the duty of the Tribunal does not end with making a declaration that the assessments are illegal and it is duty bound to issue further directions. The appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh unless forbidden from doing so by the statute and the statute does not say that such a direction cannot be issued by the appellate authority in a case of this nature. Keeping in view the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of Ld. CIT(A) with a direction to pass afresh order and to give clear cut findings on all the three important ingredients wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived as Share Application Money and Share Premium. 8. We have heard the counsels for both the parties at length and we have also perused the material placed on record, judgment cited by the parties as well as the orders passed by revenue authorities. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). Ld. CIT(A) has dealt with this ground in para no. 2 to 4 of its detailed order. The operative portion of the order of Ld. CIT(A) is contained in para no. 4 of its order and the same is reproduced below:- DECISION ; 4. The submissions made by the appellant are carefully examined with reference to the facts of the case/' material placed on the record and the relevant provisions of law as well as legal precedents. From a plain reading of sec. 68, it can be seen that addition can be made only when the appellant offers no explanation about the nature and source of the credit of any sum in the books or the explanation offered by him is not found satisfactory by the Assessing Officer. Appellant has furnished annexure 'A' of the Paper Book at page no. 15 from which it is seen that all said 10 companies are assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) The parties were not found at the address given. All the notices LI/S 133(6) issued are return by the Postal Authority with remark not known/left Hence no reliance could be placed on the confirmatory letters. B) Neither present address of the parties provided nor any request has been made to issue the notices u/s 133(6) on the present addresses. On the contrary, the documents are gathered by the assessee company and submitted during the proceedings without authentication by them. C) In five cases namely M/s. Olympia sales Pvt Ltd, M/s.Nanetec technologies Pvt Ltd, M/s.Honor Trading Pvt Ltd, M/s. Anushkar Trading Pvt Ltd and M/s Suresh Rathore Consultant Pvt Ltd, no return of income was filed by the aforesaid company, consequently the question of establishment of the genuine of the transaction or the creditworthiness of the creditor did not and could not arise. D) Mere payment by account payee cheque is not sacrosanct nor can it make a non genuine transaction genuine. In the absence of return of income, it was not possible to verify the real nature of transaction even though they are made by cheques. E) Though Copy of balance sheet and profit and loss account of two c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G had admitted that he knew nothing about the business activities of the said companies in which he was director. 12. All the above factual findings have not been rebutted or controverted by Ld. CIT(A) while deciding the appeal in favour of assessee and deleting the additions. Even Ld. CIT(A) had not adjudicated or given any findings with regard to credibility of the investing company and genuineness of transactions. Whereas, Hon ble Apex Court in the case of PCIT Vrs. NRA Iron Steel Pvt Ltd. (2019) 103 taxman.com 48(SC), had dealt with somewhat similar situation and concluded against the assessee as the creditworthiness of the investors and genuineness of the transactions cannot be proved. 13. Ld. CIT(A) had deleted the additions only by holding that identity of all the companies stood established. Whereas all the three important ingredients i.e. identity of the investors, creditworthiness of the investors and genuineness of the transactions should co-exist. Only because the identity of the said companies stood established, cannot be the sole criteria for deleting the additions. The Ld. CIT(A) had not controverted the factual findings recorded by AO by elaborating the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it being obligatory for the right of hearing to be afforded not only to the assessee but also the AO, the first appellate authority is given the liberty to make, or cause to be made, further inquiry , in terms of sub-section (4) which reads as under:- ―The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. 15. Apart from above, we find that Hon ble Apex Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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