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TMI Blog2016 (5) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudication. As the principles of natural justice demand that opportunity is to be given to both the parties, we, therefore, deem it appropriate to set aside these issues raised vide additional grounds to the file of the ld. CIT(A) to be adjudicated expeditiously in accordance with law after providing due and reasonable opportunity of being heard to both the parties. The assessee is also directed to co-operate and not to seek any unwarranted or undue adjournment. X X X X Extracts X X X X X X X X Extracts X X X X ..... criminating material and documents belonging to the appellant company were seized from the searched parties/premises on 31.07.2008, which is the prerequisite for assuming jurisdiction u/s 153C of the Act. Thus, the notice issued without fulfilling the conditions laid down by the law is invalid and the assessment order should be annulled." 8. In the aforesaid applications, the assessee contended that the additional grounds are purely legal grounds arising out of the core issue as per the assessment order, not involving any fresh investigation into facts, so these deserve to be admitted. The reliance was placed on the following case laws: * ACIT Vs Bhagwati Printers (P) Ltd. (2006) 102 TTJ 480 (Del) * National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 (SC) * DCIT Vs Turquoise Investment & Finance Ltd. (2006) 154 Taxman 80 (MP) * Kanoi Industries (P.) Ltd. Vs DCIT (2006) 100 ITD 462 (Kol.) * West Bengal State Electricity Board Vs DCIT (2005) 278 ITR 218 (Cal) * Uma Polymers (P) Ltd. Vs DCIT (2006) 101 TTJ (JD) ™ 124 * Datamatics Ltd. Vs ACIT (2007) 111 TTJ 55 (Mum-Trib) * Abhishek Industries Ltd. Vs CIT (2007) 290 ITR 655 (P&H) * Dedore Tools P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow a view to take of the powers of the Tribunal." It has further been held that: "Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." 12. The facts related to the issue raised by the assessee vide additional grounds, in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out in the case of Rajdarbar Group of cases on 31.07.2008 and certain documents belonging to the assessee were also seized. The AO thereafter issued a notice u/s 153C of the Act on 18.12.2009, in response the assessee furnished the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee group was in the practice of introducing unaccounted money in the garb of share capital. The AO mentioned the details of income as per copies of acknowledgment of ITR returns of the aforesaid share holders, as under: Sl. No. Name of the Party A.Y. Income (Rs.) 1. M/s Reenu Fincap P. Ltd 2003-04 21,914/- 2. M/s Satellite Marcon P. Ltd. 2003-04 25,074/- 3. M/s GFC Finance Ltd. 2003-04 2,689/- 4. M/s Diplomat International P. Ltd. 2003-04 (-) 106454/- 5. M/s Enjoy Commercial P. Ltd. 2003-04 (-) 35966/- 6. M/s Mahanivesh India P. Ltd. 2003-04 (-) 3340/- 15. On the basis of the aforesaid detail, the AO held that all the above companies did not have any creditworthiness of giving such huge amounts to the assessee company, thus, the creditworthiness of those persons was not established and that the genuineness of the transactions with abovementioned persons within the meaning of Section 68 of the Act had not been proved. He, therefore, treated the amount of ₹ 1,08,00,000/- received from those companies as unexplained cash credits and made the addition in the hands of the assessee. 16. Being aggrieved the assessee carried the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir individual assessments in accordance with law, but it could not be regarded as undisclosed income of the assessee in any manner. The reliance was placed on the following case laws: * CIT Vs Lovely Exports Pvt. Ltd. (2008) 216 CTR (SC) 195 * CIT Vs Divine Leasing & Finance Lid. (2008) TIOL 118 (SC) IT * CIT Vs Steller Investment Ltd. (2001) 251 ITR 263 (SC) * CIT Vs Sophia Finance Ltd. (1994) 205 ITR 98 (Del)(FB) * CIT Vs Glocom Impex (P) Ltd. (2006) 157 Taxman 303 (Del) * CIT Vs. Dolphin Canpack Ltd. (2006) 283 ITR 190 (Del - Trib) * DCIT Vs Esteem Towers (P) Ltd. (2006) 99 TTJ (Del) 472 * Uma Polymers (P) Ltd. Vs DCIT (2006) 100 1TD 1 (Jodh.) (TM) * Asstt. CIT Vs Anima Investments Ltd. (2000) 73 ITD 125 (Del) * United Cores (P) Ltd. Vs ACIT (1998) 62 TTJ (Delhi) 83 * Dy. CIT Vs Sahara India Financial Corporation Ltd. (2003) 81 TTJ (Lucknow) 389 * Swagat Synthetics (P) Ltd. Vs ITO (2002) 77 TTJ (Jodh.) 987 * Shiv Snakti Engg. Co. (P) Ltd. Vs DCIT (1999) 106 Taxman 224 (Delhi) * CIT Vs. Makhni & Tyagi Pvt. Ltd. (2004) 187 CTR (Del.) 550 * Mod Creations (P) Ltd. Vs. ITO [2011] 13 taxmann.com 114 (Delhi) * CIT Vs Orissa Corporation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the AO to prove otherwise, however, no adverse material/information had been brought on record by the AO. The reliance was placed on the judgment of the Hon'ble Delhi High Court in the case of CIT Vs Value Capital Services (P) Ltd. (2008) 307 ITR 334. 20. The ld. CIT(A) after considering the submissions of the assessee deleted the addition of ₹ 85,00,000/- and confirmed the addition of ₹ 23,00,000/- by observing in para 6 of the impugned order as under: "ii) The appellant has filed information as mentioned herein to support its claim of the share capital investment as required u/s 68 of the Act. The amounts were received by the appellant undisputedly through the account payee cheques. It is also not the case of the assessing officer that the search in the year 2008 after the above investment in share capital at the premises of the appellant yielded any evidence to show that the appellant gave any cash or allowed any other benefit to the said investors or anybody else against the said investments. Nothing is apparent from assessment order that any adverse material exists in the assessment folder for the relevant period. It is not the case where any person claimed bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly large and much more than the investments made by them in the appellant company. There is no findings on record from the assessing officer that these investors are not regular in filing their income tax returns despite that the income tax assessment particulars of these investors were on his record. Therefore, their existence are established. Besides, they had enough resources to make the impugned investments in the relevant period. The genuineness of the transaction has also not been found contrary to the audited books of account by the assessing officer. iv) In absence of any material contrary to the information on record, the action of the assessing officer based on surmises and conjecture while making addition u/s 68 of the Act in respect of share capital received cannot be sustained. Thus the addition of ₹ 85,00,000/- is deleted and for the balance amount of ₹ 23,00,000/- is confirmed." 21. Now the department is in appeal against the relief allowed to the assessee and against the sustenance of addition assessee is in appeal. At the first instance, the ld. Counsel for the assessee argued on the legal issues raised vide the additional grounds and submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, submitted that the ld. CIT(A) was not justified in deleting the addition made by the AO. 24. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the additional ground raised by the assessee first time before the ITAT is a legal ground but the same was not raised before the ld. CIT(A), so he has no occasion to deal with this ground. It is also an admitted fact that the judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs Kabul Chawla (supra) relied by the ld. Counsel for the assessee was also not available to the ld. CIT(A) while deciding the appeal of the assessee. In the present case, the ld. CIT(A) observed that nothing was apparent from the assessment order that any adverse material existed in the assessment folder for the relevant period, on the other hand, claim of the ld. DR is that the additions were made by the AO on the basis of the documents found during the search. Thus, there is contradiction in the facts. On merit also the ld. CIT(A) without bringing on record the figures & statistics came to the conclusion that the companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the relevant period due to irrelevant reasons. Thus the addition must be deleted. 4. The CIT(A) erred in law and on facts to confirm that the additions in the impugned assessment order passed u/s 153A are perverse and illegal because a. The additions were not based on any books of account or other material not produced in the course of search for an undisclosed income property discovered therein b. As the assessment proceedings were not abated but were already completed. Thus all the additions so made in the assessment order should be deleted following the Special Bench decision dated 06/07/12 in the case of All Cargo Global Logistics Ltd. in appeals no. ITA/5018-5022/M/10. 5. The appellant craves the leave to add, substitute, modify, delete or amend al or any ground of appeal either before or at the time of hearing." 27. For another assessment years under considerations, similar grounds are raised, the only difference is in the figure mentioned in ground no. 3. The assessee has also raised additional grounds in respect of the aforesaid appeals vide application dated 29.09.2015. The additional ground raised reads as under: "The Assessing Officer erred in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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