HC: Upholds deletion of unexplained income u/s 68 absent intensive investigation by AO

Delhi HC dismisses Revenue’s appeal for AY 2001-02, upholds deletion of sums brought to tax by the AO u/s 68; Notes that the assessee had furnished large amounts of materials (including PAN and ITR) before the AO to evidence the genuineness of identity/ transactions and creditworthiness of the share applicants/creditors, further notes that the AO had conducted the “perfunctory” inquiry by deputing an inspector to the premises; Thus accepts assessee’s plea that absence of these parties, after 7/8 years, ipso facto couldn’t have led the AO to conclude that the parties were fictitious or non-existent; Opines that the AO should have carried out a more intensive investigation into the records to actually discern the volume of trade/commerce of the parties and their inability, if any, to invest the amounts; Separately on noting that the approval granted by the CIT(A) was done “in a ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer” holds that the CIT did not in fact record satisfaction u/s 151 for reopening assessment u/s 147/148