COMMISSIONER OF INCOME TAX Vs. STELLAR INVESTMENT LIMITED

JUDGEMENT

(1.) THE petitioner seeks reference of the following question :

(2.) IN the present case, the subscribed capital of the assessee had been increased. The ITO assessed the company and accepted the increase in the subscribed capital. The CIT came to the conclusion that the Assessing Officer did not carry out a detailed investigation inasmuch as there had been a device of converting black money into white by issuing shares with the help of formation of an investment company. The CIT further held that the Assessing Officer did not make enquiries with regard to the genuineness of the subscribers of the share capital. He thereupon set aside the order of assessment.

(3.) IT is evident that even if it be assumed that the subscribers to the increased share capital were not genuine, nevertheless, under no circumstances, can the amount of share capital be regarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose names share had been issued and the money may have been provided by some other persons. If the assessment of the persons, who are alleged to have really advanced the money is sought to be reopened, that would have made some sense but we fail to understand as to how this amount of increased share capital can be assessed in the hands of the company itself.