Since there was no response to the summons which were served and some of them had been returned unserved, the Assessing Officer sent an Inspector of Income Tax to the addresses to which summons were issued. The Inspector reported that no such person or company was available or existing at the addresses to which summons were issued. On the basis of the report of the Inspector, the Assessing Officer issued notice to the assessee on 23rd October, 2007 to produce the persons and companies from whom it had received share applications monies. This also was not complied with by the assessee. On 5th December, 2007 the assessee filed a letter with the Assessing Officer along with the affidavits of Rajan Jassal and Mukesh Gupta in which both of them had stated that the transactions with the assessee were genuine and the earlier statements recorded from them by the investigation wing were given under pressure. On the aforesaid facts, the Assessing Officer came to the conclusion that the independent enquiries carried out by him disclosed that the assessee was unable to prove the genuineness of the transactions with the companies and that it also proved that the assessee company had introduced its own monies through non-existing companies using the banking channel in the shape of share application monies. He accordingly invoked Section 68 of the Act and added the amount of Rs.1,18,50,000/- to the income of the assessee. As regards the merits, the CIT(Appeals), taking note of the statement of the assessee that the affidavits from Rajan Jassal and Mukesh Gupta, who were Directors in the three companies as well as the affidavits of Raj Kumar, Harish Kumar and Pramod Kumar who were the directors in other companies which provided the share capital, were not considered by the Assessing Officer, directed the Assessing Officer to examine the contents of the affidavits and verify the veracity and genuineness thereof. The Assessing Officer was also directed to examine the genuineness of the transactions. The summons issued to the principal officers of the companies who contributed the share application monies to the assessee were not complied with and the independent enquiry made by the Inspector also resulted in the finding that no such companies existed at the addresses furnished by the assessee.