DELHI HIGH COURT - COMMISSIONER OF INCOME TAX VS ANSHIKA CONSULTANTS PVT. LTD.
ITA 467/2014
16 APRIL, 2015

Core Facts of the Case :……. During the relevant Assessment Year (AY) 2006-07, the assessee had issued shares at a premium ranging from 24000-39000 to applicants which were companies. In the course of assessment proceedings, the AO had sought, details in particular of such share applicants. The assessee had provided the various details of such share applicants i.e. (Star Pleat Vincon Pvt. Ltd., Shree Mahavir Management Services Pvt. Ltd,. Bhuwania Brothers Pvt. Ltd. and Manush Marketing Pvt. Ltd.), such as the bank account statements, the Memorandum and Articles of Association, income tax return, balance sheet, PAN details etc.
The AO considered the submissions and the materials on record. He also took note of the fact that the notices sent under Section 133(6) to the share applicants were returned un-served. After his analysis of the material placed on the record, the AO added back the sum of 12,78,60,000/-. ………

Summarised Judgment : ….. While arriving at the conclusion that he did, the AO did not consider it worth while to make any further enquiry but based his order on the high nature of the premium and certain features which appeared to be suspect, to determine that the amount had been routed from the assessee's account to the share applicants' account. As held concurrently by the CIT (Appeals) and the ITAT, these conclusions were clearly baseless and false. This Court is constrained to observe that the AO utterly failed to comply with his duty considers all the materials on record, ignoring specifically the most crucial documents. We place these observations on the record and direct a copy of the judgment to be furnished to the concerned income tax authorities for appropriate action towards reflecting these observations suitably in service record of the concerned AO to avoid such instances in the future………..For the above reasons, this Court is of the opinion that the concurrent findings of fact, as to the true identity of the share applicants, their creditworthiness and genuineness of the transaction, are based on sound reasoning and do not call for interference. No substantial question of law arises. The appeals are dismissed.

Analysis : In the case of JSM also order of the Ld. A.O. is based on suspicion rather than facts and documents. All the desired information and documents were furnished.