M/S. ANAMIKA STEEL TRADERS (P) LTD.,KOLKATA vs. ITO, WARD - 3(2), KOLKATA, KOLKATA

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ITA 1275/KOL/2017Status: DisposedITAT Kolkata19 September 2018AY 2012-132 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's contention and decided to remand the matter back to the AO. The AO was directed to conduct detailed inquiries regarding the genuineness and source of share capital, examine bank accounts for the money trail, and investigate changes in directorship and realization from asset liquidation.

What were the facts?

The assessee appealed against an order passed by the CIT(A) for AY 2012-13. The CIT had directed the AO to conduct inquiries with the directors of a share-subscribing company. The assessee contended that no such inquiry was conducted by the AO.

What were the issues?

Whether the AO conducted sufficient inquiries as directed by the CIT under Section 263, and the necessity of further independent inquiries into share capital and directorship.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA BENCH “A”, KOLKATA

Before: SH. P.M.JAGTAP & SH. S.S.VISWANETHRA RAVI

Hearing: 06.09.2018Pronounced: 19.09.2018

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER

1.

This appeal by the assessee against the order dated 28.02.2017 passed by CIT(A)-9, Kolkata for AY 2012-13.

2.

After hearing both the parties, we find that Ld.CIT u/s 263 proceedings directed the AO to conduct inquiries with the Directors of the share subscribing company. The contention of the Ld.AR was that no such inquiry was conducted by the AO and urged to remand the matter to the AO. Therefore, taking into consideration the facts and circumstances of the case and the issue involved therein, we remand the matter back to the file of AO to conduct inquiries as set out hereunder:-

i) Examine the genuineness and source of share capital, not on a test check basis, but in respect of each and every shareholder by conducting independent enquiry not through the assessee. The bank account of the entire period should Year: 2012-13] be examined in the course of verification to find out the money trail of the share capital. ii) Further the A.O. should examine the directions as well as examine the circumstances which necessitated the change in directorship if applicable. He should examine them on oath to verify their credentials as director and reach a logical conclusion regarding the controlling interest. iii) The A.O. is directed examine the source of realization from the liquidation of assets shown in the balance sheet after the change of Directors, if any.”

3.

In view of the above, the grounds raised by the assessee are allowed for statistical purposes.

4.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 19.09.2018.

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