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TMI Blog2016 (6) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT (A) erred in fact and in law confirming the addition of ₹ 78,60,000/-, which is not only bad in law but also against the facts and circumstances of the case. 2. In this ground of appeal there are two additions are involved. The 1st addition confirmed by the Ld. CIT appeal is with respect to ₹ 28,60,000/- on account of unexplained receipts towards the booking of space out of the total addition of ₹ 4702000/- made by the assessing officer. The second addition was with respect to ₹ 50 Lacs received from M/s stalwart Realtors private limited against advance booking for sale of flats, which was added by the Ld. assessing officer under section 68 of the income tax act. 3. On 04/04/2016 the assessee has moved a prayer for admission of additional ground of appeal:- That in law the Ld. AO erred in framing the assessment u/s 143 (3) relying on documents seized in a search on a 3rd party without satisfaction under section 153C and without issue of notice under section 153A . 4. It was submitted that a dumb document was seized from the premises of a third party, the Ld. assessing officer has completed the assessment proceedings under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial implication of the seized document stating that these pages are not pertaining to the assessee company and do not have any business relationship with the person searched from whom paper is impounded. It was further stated that that the premises wherefrom the document seized also does not belong to it. Learned AO rejected the contention of the assessee. According to him, seized document is a chart showing names of 66 parties and against their name area booked in square feet, rate per square feet and total advance payment is mentioned. Next columns shows amount in cheque, cash, cheques issued and balance amount. On analysis of that chart, total amount was of ₹ 47,02,000/- /-which was not shown as receipt, ld. AO added it as unexplained cash credit. Further, for the year, assessee has shown ₹ 14000000/- as a creditor from M/s stalwarts private limited and out of this an amount of ₹ 5000000/- is received during the year and ₹ 9000000/- was outstanding balance for the last year. According to the Ld. assessing officer is stalwarts Realtors private Ltd is not doing any real business and this company is form for creating artificial capital and then providing acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirmation, he stated that the Ld. AO correctly rejected them without carrying out the requisite verification, as those were identical even in their punctuations. Therefore, according to him it was obvious that all the parties including the appellant company are closely connected to one another and in the circumstances when there are clear nexus of the transaction the confirmation obtained by the assessee would be meaningless and futile. He therefore held that non-issue of summons or notices to examine the parties was justified. Regarding the addition of ₹ 50 Lacs the addition was confirmed as there were no trading activities in the lender company but only an accumulated profit of ₹ 3.59 crores reflected in the balance sheet as on 31st march 2008. Therefore the credit entry of ₹ 50 Lacs appearing in the books of the appellant company in the name of stalwarts Realtors private limited was also held as unexplained credit under section 68 by the CIT (A). Against this order of the assessee is in appeal before us. 9. On the issue of additional ground of appeal rose before the Arsenal and authorized representative submitted that this issue is similar to the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpowered to assess six assessment years immediately preceding the assessment year relevant to the previous years in which search takes place. In this case, Search was conducted on 20-10- 2008, previous year is F Y 2008-09 and AY 2009-10, and therefore impugned assessment year is outside the purview of section 153A of the Act. In view of this the additional ground raised by the Appellant with respect to applicability of section 153C and all other consequent issues are rejected and assessment u/s 143(3) in the present case is upheld. Therefore, additional ground of appeal of the appellant is dismissed. 11. Therefore following our own decision in ITA No. 2463 Del-2013 dated 13/06/2016 we dismiss the additional ground of appeal of the assessee. 12. Ld. authorized representative submitted before us that this issue is similar to the issue stated in the case of other companies in ITA No. 2463/DEL/2013 . Further issue of addition under section 68 in case of stalwarts Realtors private limited is similar to what was argued in case of ITA No. 2464/DEL/2013. He further submitted that that the arguments of the assessee are same. Ld. departmental representative also agreed to the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issued to the one of the three companies. Similarly, in case of three more companies such counterfoils of chequebooks were seized. Based on these evidences the addition is made by the Ld. AO and confirmed by the CIT (A). The seized documents vis a vis the reasons for addition are examined as under :- i. Above documents are not seized from the premises of the assessee but at the premises of third party who is neither the director nor the shareholder of the company. However neither the ld. AO as well as The Ld. CIT (A) has led any evidence that though the paper shows the names of the appellant along with two other companies but these papers are found from the third party i.e. Shri B K Dhingra and how is he associated with the appellant. Ld. CIT (A) has stated that Shri B K Dhingra is a close associate of Shri I M Thapar . Merely an assertion that somebody is close to one of the director cannot become the close associate of the appellant company itself. Ld. AO has not led any evidence that Shri Dhingra looks after the affairs of the company in any manner. the evidence of actual transaction of those parties and it is unaccounted income of these companies.. ii. On 20.8.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties that they have neither booked any premises with the appellant company and therefore have not paid any sum. v. It is the allegation of the revenue that these companies are the bogus companies floated by one Shri B K Dhingra and they are used for capital formation activities. This fact merely remains a conjecture and surmises in absence of any evidences led by revenue against that person i.e. Shri B K Dhingra and his connection with the appellant company. Merely making an assertion that Shri B K Dhingra is entry operator or the companies are formed for capital formation remains unsubstantiated allegation unless there are any evidences such as assessment orders etc of entry operator or the assessment orders of those companies operated by him. vi. Further assuming that those companies are the bogus companies, and then on looking at the chart we found that there are columns of cash . If these amounts are the bogus amount introduced by the appellant company then we failed to understand that how the cash is also be received from those companies, whereas in general only commission is required to be paid to the entry provider and no cash is receivable from them. vii. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Stalwart Realtors Private Limited, we have already decided the issue of addition u/s 68 of the same lender for same year on identical facts and circumstances in ITA No. 2464/DEL/2016 dated 13 June 2 016 wherein we have deleted the addition under section 68 on account of money received from M/s Stalwart Realtors Private Limited as under:- 7. We have carefully considered the rival contentions. We have also perused the relevant paper book filed by the Ld. AR of the appellant, which is part of the record before the lower authorities. During the course of assessment proceedings assessee received a Cheque of ₹ 46 lakhs by cheque No. 795738 of Corp bank, which was cleared in the bank account of stalwarts realtors private limited on 13/12/2008 and for the satisfaction of the assessing officer, assessee submitted confirmation showing address, as well as the permanent account number of the lender. It also submitted a copy of the income tax return filed by Stalwarts Realtors private limited for assessment year 2008 09, along with copy of the bank account of stalwarts realtors private limited with Corp bank from 1st December 2008 to 31st December 2008. As per the bank account open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain play pay slips were impounded and these pay in slip shows that the amount received from various bogus companies floated by Shri B K Dhingra into M/s Starwood realtors private limited as proceeds from sale and such sales were not the actual sales. 8. We failed to understand that when ld. AO has so much of the information why the assessee was not confronted by this evidence by providing the copies of such statements, copies of inquiry report and giving assessee an opportunity to rebut theses evidences. Ld AO has not done this basic exercise. Further, when the sales are stated to be bogus , the cases of the Stalwarts Realtors has not been reopened / reexamined under any of the section of the Income tax Act. Further, though the sales of the lender were found to be bogus, however, the profit derived from such bogus sales has been taxed by the revenue authorities. Therefore, the ld. AO has made this addition without adducing any evidence on which he strongly relies. The Ld. assessing officer, Ld. CIT (A) and Ld. departmental representative before us did not controverted that profits of Stalwarts Realtors from the bogus sales have been assessed and despite having evidences ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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