(as in Delhi High Court)

In the case of CIT vs. Fair Finvest Ltd., ITA No. 232/2012 decided by the Delhi High Court on 22nd November, 2012 it has been held that where the assessee adduced evidences in support of the share application money the AO is supposed to examine the same and reject these evidences on tenable ground. Further in case he wishes to rely on the report of the investigation authorities, some meaningful enquiry ought to be conducted by him to establish a link between the assessee and the alleged hawala operators.
In the absence of these, the decision of the Supreme Court in the case of CIT vs. Lovely Exports Pvt. Ltd. 216 CTR (SC) 195 will be applicable and the case of the Nova Promoters & Finlease (P) Ltd. will not be applicable despite the fact of the case being identical to the extent that entries have been received from the same companies of Mr. Mahesh Garg as was in the case of Nova Promoters. Accordingly in all those cases where the AO has not conducted an enquiry independently during the assessment proceedings, the judgment of the Supreme Court in Lovely Exports will be applicable and judgment of the Delhi High Court in the case of Nova Promoters & Finlease (P) Ltd. will not be applicable.Read more