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TMI Blog2023 (10) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds of appeals:- "1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The order passed by Pr. Commissioner of Income, Rajkot- 1[hereinafter referred as to the "Pr. CIT"] is bad and illegal and requires to be quashed. 3. Ld. Pr. CIT erred in law and on facts in exercising revisional jurisdiction ignoring the fact that AO made full inquiry and satisfied with the reply/submission of the appellant and accordingly the order passed by Pr.CIT is required to be quashed and may kindly be quashed. 4. The learned Pr. CIT erred on facts as also in law in alleging that the order u/s. 143(3) is erroneous and prejudicial to the interest of revenue as the AO had not made inquiry & verification in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney was routed through two layers. Further, PCIT observed that, out of 21 subscribers to share capital, only four persons submitted their balance-sheets and in the cases of these four persons also, apart from mere filing of balance sheet, no explanation was available on record for the source of investment in the hands of these subscribers. On perusal of such balance-sheets in the cases of these four persons, it was observed that huge amount of unsecured loans was availed by these persons indicating that the money invested by them was not their own but was a loan in their hands. Further, it is also observed that all these share-holders, had invested substantial amount of money by way of unsecured loan or share application money but barring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Assessing Officer without making necessary and adequate enquiries into the source of investment in the shares of the assessee company. 4. Before us, the Counsel for the assessee invited our attention to Page 2 of the assessment order and submitted that the evidence regarding share capital introduced/unsecured loan was accepted by the assessee were scrutinized by the Assessing Officer, and accordingly it cannot be held that the Assessing Officer did not conduct the necessary enquiries during the course of assessment proceedings. Further, the Counsel for the assessee drew our attention to notice under Section 142 (1) of the Act issued by the Assessing Officer dated 18.07.2018, wherein details of new share capital introduced dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstead of jantri value on which stamp duty was collected as sale consideration under Section 50C for computation of capital gains, which was clearly unsustainable. The Ld. DR placed reliance on the case of Umesh Krishnani 35 taxmann.com 598 (Gujarat), wherein the Gujarat High Court held that where substantial amount was deposited in bank accounts of lenders shortly prior to issuance of cheques by them, transaction in question being sham, loan amount was to be added to assessee's taxable income under Section 68. 6. We have heard the rival contentions and perused the material on record. On going to the facts of the instant case, we observe that in the instant case, undeniably the Assessing Officer had made certain enquiries during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Gujarat High Court in the case of Umesh Krishnani (supra) has also given a specific finding that when immediately before the issuance of funds to the assessee company there was immediate credit in the bank accounts of some of the investors, for which there is no plausible explanation, then addition under Section 68 of the Act is liable to be made. Even in the present facts, the principal CIT observed that in some of the cases prior to making the investments in the assessee company, there was immediate credits in the bank accounts of some of the investors, for which no explanation has been provided by the assessee during the course of assessment proceedings. In the case of Malabar Industrial Co. Ltd. 109 Taxman 66 (SC), the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g tax lawfully payable by a person, it should be certainly prejudicial to interest of revenue. In the case of Deepak Kumar Garg 299 ITR 435 (Madhya Pradesh), the High Court held that where from order of Assessing Officer, it was clear that where the Assessing Officer had done only a semblance of enquiry and, that too, in very slipshod manner and Assessing Officer had accepted version of assessee without proper enquiry, as a result of which substantial amount of taxable income was not brought to tax, Commissioner rightly held assessment order as erroneous and prejudicial to interest of revenue. Accordingly, looking into the facts of the instant case, we find an evident lack of proper enquiry by the Assessing Officer during the course of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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