· The case of assessee was reopened by the AO on the ground that information was received from Investigation Wing claiming the assessee to be a beneficiary of accommodation entries. The AO, therefore, made the addition of share application money received by the assessee alleging the same to be bogus transactions.
· The CIT(A), after verifying the evidences filed by the assessee, called for a remand report from the AO. However, the AO ignored the evidences filed by the assessee and merely relied upon the report of Investigation Wing.
· However, the CIT(A) deleted the addition made by the AO by holding that the assessee had discharged the onus cast upon him, and the AO had not pointed any discrepancy in the evidences filed by the assessee.
· The ITAT further confirmed the action of the CIT(A), therefore, the Department filed an appeal before the High Court.
· The Court observed that the assessee had provided several documents that could have showed whether the transactions were genuine or not, such as their particulars, PAN details, confirmations, assessment particulars, mode of payment, bank statements, cheque numbers in question, copies of minutes of board meeting authorizing the application, copies of Balance Sheets and Profit and Loss accounts as well as the ROC particulars.
· The Court further observed that the AO failed to conduct any scrutiny of documents and relied merely upon the report of Investigation Wing. Therefore, the Court concluded by stating that the AO has completely disregarded his duties in the remand proceedings, and thus, the appeal filed by the Revenue was dismissed.
For further reading, refer the attachment.
Further Reading