(TAX APPEAL NO. 39 OF 2009)

An addition was made to income of assessee-company mainly for reason that, though, amount pertained to share applications but identity of applicants remained unverified and assessee could not give reply in that regard.

The Commissioner of Income-tax (Appeals) quashed the additions made by Assessing Officer (AO) as a detailed explanation was given by the assessee on where from the amount was received. The Tribunal also upheld the order of CIT(A).

The High Court held that there was no reason to entertain the Appeal mainly for the reason that the addition made by the AO should not have been made by him because amount received towards the share applications was by way of cheque. All the details regarding applicants were furnished by the assessee and Department could have issued notices to such applicants.

It appeared that similar type of cases were coming to this court often and most of the time same type of error was committed by the AOS, either deliberately or due to "induced ignorance". This was not for the first time such type of matter had been taken up by this Court.

It was now high time for the Commissioner, Income-tax to have orientation courses or induction courses conducted for the AOs to make them understand that whenever assessee received any amount by cheque, there was a need for the AO to give notice.

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