Order of Tribunal ignoring and nor dealing with factual findings recorded by A.O. is perverse

There are two types of cases. One in which the assessing officer carries out the exercise which is required in law and the other in which the assessing officer ‘sits back with folded hands’ till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The High Court held that case to be falling in the second category. In the present case the asessing officer has not sat back with folded hands but has conducted the enquiry. He has requisitioned and examined the bank accounts and found discrepancy in the bank statement filed by the Assessee at the time of the orignal assessment and the ones requisitioned. The said judgment is clearly not applicable in the facts of the present case.

 We are of the considered opinion that the Assessee has not been able to discharge the initial onus and has not been able to establish the identity, creditworthiness of the share applicants and the genuineness of the transaction. The surrounding circumstances and inquiries made by the Assessing Officer were significant but the said finding though not disturbed have been ignored. Further the Tribunal has failed to take holistic view and has relied upon neutral and general evidence in respect of share capital money received without noticing other evidence, which are :

a) The Respondent  Assessee is a private limited company.

b) The subscribers were unknown persons, not related or friends.

c) The subscribers bank account statements furnished were forged and fabricated.

d) There were corresponding cash deposits in the bank accounts before issue of share application cheques.

e) The subscriber companies it has been shown were carrying on effective and day to day

business or were angle investors.

f) The subscribers did not bother and ensure protection of their investment.

In view of the above, we are of the view that the Assessee has not discharged the onus satisfactorily and the additions made by the Assessing Officer was justified and sustainable and the order of the Tribunal ignoring and nor dealing with the factual findings recorded by the assessing officer is perverse.

CIT vs. N. Tarika Properties Investment Pvt. Ltd., ITA No. 2080/2010, Date of Order : 28.11.2013, Delhi High Court