- (1.) The appeal is directed against the judgement and order dated 6th September, 2006 passed by the learned Income Tax Appellate Tribunal, "B" Bench, Kolkata in ITA No.2421/Kol/2005 pertaining to the assessment year 1983-84 by which the learned Tribunal dismissed an appeal preferred by the assessee. The assessee has come up in appeal. The question formulated at the time of admission of the appeal on 6th June, 2007 reads as follows : "(a)Whether and in any event, the Tribunal was justified in law in upholding the addition of share capital to the extent of Rs.8,77,500/- under section 68 of the Income Tax Act, 1961 on the basis of incomplete investigation made by the Assessing Officer and its purported findings in that behalf are arbitrary, unreasonable and perverse ?"
(2.) The facts and circumstances of the case, briefly stated, are as follows :
(3.) The assessment for the relevant year was completed on 31st March, 1986 under section 144, that is to say, best judgement assessment was made at a total income of Rs.27,05,365/-. It appears that the assessee had filed returns in various districts and a point of jurisdiction was raised before the CIT (Appeals) and various orders of assessments were produced. Out of which, one of them transpired to be a forged one. Be that as it may, the CIT (Appeal) by his order dated 22nd December, 1992 restricted addition to a sum of Rs.6,22,500/- being 25% of the paid up share capital of the assessee. The revenue preferred an appeal against that order alleging that the CIT (A) had erred in deleting addition of a sum of Rs.18,67,000/-. The learned Tribunal by its judgement and order dated 28th February, 2000 restored the matter to the file of the assessing officer for the purpose of making reassessment after giving proper opportunity to the assessee to prove its case. The assessee did not produce its books of accounts nor did it produce bank accounts for the relevant period. It also failed to produce shareholders register. Instead a list of shareholders was produced. The assessing officer issued notices to fifty-six shareholders. Forty-eight of them did not turn up. Eight shareholders responded by saying that they had never subscribed to the share capital of the assessee. They added that even the parenthood of some of the shareholders was wrongly described. In one case a brother of one of the applicant was shown as the father of the applicant. The balance i.e. nearly forty-eight notices came back with the endorsement not known . All the drawbacks were brought to the notice of the assessee by the assessing officer. The assessee replied by its letter dated 22.03.2002, contents whereof according to the assessing officer was as follows:- "...that this is not practicable and feasible for the assessee company to search, identify and produce the shareholders because the matter of 15 to 17 years back. He did not challenge facts of the case and draw backs informed to them. He argued that in view of decision of Hon ble Delhi High Court in the case of CIT v. Steller Investment Ltd. 192 ITR 287 (Delhi) which held that, even if it be assumed the subscriber to the increased share capital were not genuine, under no circumstances could the amount at share capital be regarded as undisclosed income of the company. He further submitted that the Hon ble Supreme Court has confirmed the said decision of Delhi High Court. Mr. Bhutra, submitted in view of Hon ble Supreme Court s decision, share capital of Rs.2490,000/- introduced during the previous year relevant to the assessment year 1983-84 could not and should not be added back as income from undisclosed sources under section 68 of the Act." ;