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TMI Blog2016 (11) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... vestors cannot be questioned. Moreover, the assessee company has received the subscription of these shareholders through banking transactions. As assessee company has duly discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants who have subscribed to the shares during the years under assessment, u/s 68 of the Act, the assessee company cannot be faulted merely on the basis of conjectures and surmises particularly in the absence of any cogent material.Moreover, documents i.e. balance sheets and trial balance seized from the premises of M/s. Jagat Group pertains to the period 01.04.2010 to 04.09.2010, hence not relevant for the years under assessment. To apply the provisions contained u/s 153C, the seized material is required to be of relevant assessment year. - Decided in favour of assessee. - ITA No.6569/Del./2013, ITA No.6570/Del./2013, ITA No.6571/Del./2013 - - - Dated:- 28-9-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT and SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri Salil Aggarwal, Advocate and Shri Shailesh Gupta, CA For The Revenue : Ms. Poramita Tripathy, CIT DR ORDER PER KULDIP SINGH, JUDICIAL M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rous documents were recovered containing balance sheet and trial balance of M/s. Vidhya Shankar Investments Pvt. Ltd. (assessee) for the period 01.04.2010 to 04.09.2010 belonging to the assessee company. After recording satisfaction note u/s 153C, notices were issued for the Assessment Years 2005-06 to 2010-11 on 13.02.2013 to which assessee raised objections vide letter dated 21.02.2013 inter alia that documents do not belong to the assessee company. Assessee opted to treat the return filed u/s 139(1) as reply to the notice issued u/s 153C. Then, the assessee was served with notice u/s 143 (2) and 142 (1) and in response thereto, Shri Ravinder Goel, CA/AR put in appearance, filed necessary details and explanation. 3. From the documents seized during search and seizure operation form M/s. Jagat Group and S.K. Jain Group, it was noticed that Shri S.K. Jain Group was indulged into providing entries under the garb of share capital etc. through its sham companies and M/s. Jagat Group was found to rerouting its unrecorded and unaccounted income by way of taking entries of loan and share capital from such sham companies. Revenue also noticed that Shri Satish Pawa and Shri Sant Lal Agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same as unexplained cash u/s 68 of the Act by making an addition to the tune of ₹ 4,78,21,800/- (Rs.47,90,000/- + ₹ 4,30,31,800/-) qua AY 2007-08; ₹ 7,75,00,000/- (Rs.77,50,000/- + ₹ 6,97,50,000/-) qua AY 2008-09; and ₹ 9,73,37,500/- (Rs.97,40,000/- + ₹ 8,75,97,500/-) qua AY 2009-10. 6. Assessee carried the matter before the ld. CIT (A) by way of filing the appeals who has allowed all the appeals qua AYs 2007- 08, 2008-09 and 2009-10 vide impugned orders. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals. 7. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 8. The ld. DR for the revenue challenging the impugned orders contended inter alia that the ld. CIT (A) has erred in law as well as on facts that the AO has no jurisdiction u/s 153C of the Act; that the AO issued notice u/s 153C after recording the satisfaction note on the basis of incriminating material against the assessee company seized during search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction whatsoever. He was merely empowered to forward the seized document pertaining to the assessee to the concerned AO having the jurisdiction over the assessee company. 13. For ready perusal, operative part of the judgment in SSP Aviation Ltd. (supra) is reproduced as under :- Section 153C of the Income-tax Act, 1961, merely enables the Revenue authorities to investigate into the contents of the document seized, which belongs to a person other than the person searched so that it can be ascertained whether the transaction or the income embedded in the document has been accounted for in the case of the appropriate person. It is aimed at ensuring that income does not escape assessment in the hands of any other person merely because he has not been searched under section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has reached the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document to the Assessing Officer having jurisdiction over the other person and thereafter it is for the Assessing Officer having jurisdiction over the other person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he position as to mandatorily recording of satisfaction for the purpose of section 158BD/153C as under :- CIRCULAR NO.24/2015 [F.NO.279/MISC./140/2015/ ITJ], DATED 31-12-2015 The issue of recording of satisfaction for the purposes of section 158BD/153C has been subject matter of litigation. 2. The Hon'ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No. 3958 of 2014 dated 12-3-2014 [2014] 43 taxmann.com 446 (SC) (available in NJRS at 2014-LL- 0312-51) has laid down that for the purpose of section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person U/S 158BD. The Hon'ble Court held that the satisfaction note could be prepared at any of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or (b) in the course of the assessment proceedings under section l58BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts are not in dispute, because from the return filed by the assessee on 23.03.2009 qua AY 2008-09 and return filed by assessee on 04.09.2007 qua 2007-08, treated u/s 153C, it is clear that share capital amounting to ₹ 77,50,000/- and share premium of ₹ 6,97,50,000/- for AY 2007-08, share capital amounting to ₹ 47,90,000/- and share premium of ₹ 4,30,31,800/- for AY 2008-09 and ₹ 97,40,000/- and share premium of ₹ 8,75,97,500/- for AY 2009-10 tallied with Documents-II having been declared by the assessee even prior to the search and seizure operation. 18. Even otherwise, AO has not conducted investigation/inquiry regarding the transactions in question on the basis of which addition has been made nor the documents relied upon have ever been put to the assessee nor the same have even figured in the satisfaction note. 19. Now, the next question arises for determination in this case is:- as to whether the CIT (A) has erred in facts and law in deleting the addition of ₹ 4,78,21,800/- qua AY 2007-08, ₹ 7,75,00,000/- qua AY 2008-09 and ₹ 9,73,37,500/- qua AY 2009-10, by treating the bogus share application money / share ..... X X X X Extracts X X X X X X X X Extracts X X X X
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