2014 (11) TMI 1120 - AT - Income Tax

Assumption of jurisdiction u/s 153C - satisfaction note - Held that - CIT(A) correctly upheld the assumption of jurisdiction following the order of the coordinate bench in the case of Piyush Infrastructure Pvt. Ltd. for A.Y. 2008-09 2012 (10) TMI 1033 - ITAT DELHI wherein it was held that satisfaction was duly recorded u/s 153C of the Act on the basis of the documents seized and noted in the order of assessment.- Decided against assessee. Addition of share capital received by the assessee company - Held that - We find that in the instant case share capital was received from Sh. Arun Bansal and Vijay Gupta of Rs. 50, 000/- each aggregating to Rs. 1 lakh. Pursuant to the search on 21/02/2008 Sh. Arun Bansal categorically asserted that he was merely a name lender and no amount was actually invested by him no confirmation or any other evidence has been placed on record to discharge the burden. The contention that said person was subscriber to the memorandum of Association has been correctly rejected by the AO by observing that said subscription only shows the desire to make investment but does not confirm investment. - Decided against assessee.

Summary

Issues involved:
1. Jurisdiction under section 153C of the Income Tax Act.
2. Addition of share capital received by the assessee company.

Jurisdiction under section 153C of the Income Tax Act:
The appeal revolved around the jurisdiction under section 153C of the Income Tax Act, stemming from a search and seizure operation at the business premises of Piyush Group of Companies. The key contention was the assumption of jurisdiction under section 153C, with the assessee arguing that no documents related to them were found during the operation. The CIT(A) upheld the jurisdiction based on a previous case involving Piyush Infrastructure Pvt. Ltd. for A.Y. 2008-09. The appellate tribunal found no merit in the grounds raised by the assessee, as no new evidence was presented to challenge the jurisdiction upheld by the CIT(A).

Addition of share capital received by the assessee company:
The case also involved the addition of Rs. 1 lakh as share capital received by the assessee company, based on statements and lack of confirmations from the directors. The AO made the addition due to discrepancies in the statements made by one of the directors regarding the investment. The CIT(A) confirmed the addition, and the tribunal concurred with this decision. The tribunal emphasized that the burden of proof was on the assessee to substantiate the investment, which was not done adequately. Citing the judgment in CIT vs. Lovely Exports Pvt. Ltd., the tribunal rejected the arguments presented by the assessee and upheld the addition of share capital as unexplained income. Consequently, the appeals were dismissed, affirming the additions made by the assessing officer.

This judgment analyzed two main issues: the jurisdiction under section 153C of the Income Tax Act and the addition of share capital received by the assessee company. The tribunal upheld the jurisdiction based on previous rulings and lack of new evidence challenging it. Regarding the addition of share capital, the tribunal emphasized the failure of the assessee to provide sufficient proof to discharge the burden of proof, leading to the confirmation of the addition by the CIT(A). The tribunal's decision was influenced by the lack of substantiating material and discrepancies in statements, ultimately resulting in the dismissal of the appeals and affirmation of the additions made by the assessing officer.