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TMI Blog2017 (4) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... Objections filed by the assessee are belated by 3 days. The assessee filed the application dated 11.07.2016 for condonation of delay stating therein that the notice was served upon the assessee on 12.12.2014 and as such Cross Objections were to be filed by 11.01.2015 whereas the Cross Objection had been filed on 14.01.2015 leading to a delay of 3 days which was inadvertent and bonafide. It was further submitted that the memorandum of appeals by the department were made available to the assessee on 13.01.2015 and then the Cross Objection was filed by the assessee. A request has been made to condone the delay. The reliance was placed on the following case laws: N. Balakrishan Vs M. Krishanmurthy (1998) 7 SCC 123 Collector, Land Acquisition Vs Mst. Katiji Ors. 167 ITR 471 (SC) 2. The ld. DR submitted that the delay may not be condoned. 3. After considering the submissions of both the parties, we are of the view that the delay of 3 days may be condoned. In the present case, the assessee filed the Cross Objections on 14.01.2015 after receiving the memo of appeal of departmental appeal on 13.01.2015. Accordingly, the Cross Objections are admitted. 4. First we will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment proceedings, noticed that the assessee had received a share capital of ₹ 1,96,85,400/- from the following persons: Name of the person/entity PAN Amount Anuradha Aggarwal AHOPA9255C 2,75,000/- Lajja Devi ABDPA2161L 23,85,000/- Laxman Dass Aggarwal ACTPA9345H 17,25,000/- Sanjay Bansal AMBPB6182B 57,25,000/- Sanjay Bansal HUF AAHHS1508L 18,00,000/- Abhinav Goel AHMPG7396N 70,000/- Alankar Agencies Pvt. Ltd. AAACA2040F 34,00,000/- Benco Finance Investment Pvt. Ltd. AABCB9349R 8,00,000/- Bhagyaluxmi Fuits Pvt. Ltd. AACCB6957E 3,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 of the Act was carried out in the assessee s case hence the assessment framed u/s 153A of the Act was bad in law. 10. The ld. CIT(A) after considering the submissions of the assessee observed that the AO was asked to make available the documents to show that the proceedings u/s 153A of the Act had been correctly initiated. In response the AO furnished the copy of panchnama evidencing the search had taken place in the case of the assessee and same was made available to the assessee. Accordingly, the legal issue was decided against the assessee. As regards to the other issues raised on merit, the ld. CIT(A) observed that the assessment folder as well as the AO s observations at page nos. 2 3 revealed that the assessee had submitted all the necessary documents to prove the identity of the person (PAN and address), creditworthiness of the entity (copies of bank statements and ITRs) and the genuineness of the transaction (confirmations from the concerned parties). He, therefore, held that the AO contradicted himself at para 4 of page no. 3 of the assessment order. The ld. CIT(A) deleted the addition of ₹ 1,96,85,400/- by observing in paras 4.2.6 to 4.2.18 which read as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and also due to failure of AO in confronting such report, if any, to the appellant, it would not be possible to take any adverse view on the issue based on mere remark of the AO without any supporting evidences. 4.2.9 The appellant had led all the necessary evidences in support of the amount received towards share application. The AO has not taken any further action on the said submissions. Even though the AO mentions that he conducted enquiries through the Inspector, the same is not supported by-any material on record. The inspector's enquiry also does not establish anything contrary to the evidences led by the appellant. If the AO had any doubt about the genuineness of the transactions, he could have resorted to obtaining conformations u/s 133(6) or through issue of summons u/s 131. Without carrying out any meaningful and independent enquiries, the AO has made observations in the assessment order which are not as per the facts emerging from the assessment folders. 4.2.10 In fourth paragraph on page 3 of the assessment order, it is stated that no details of distinctive numbers of shares issued to each company/entity are filed. The details regarding meetings of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been mentioned in the assessment order that give any indication that the transaction involving share application amount were not genuine. He has initiated proceedings u/s 153A because of search having been conducted in the appellant's case. However there appears to be no adverse finding of the search in the appellant's case. The shares have not been issued at a premium. In the transaction involving entry providers, the practice as found in many cases has been that shares have been issued at a huge premium and bought back by the promoters at the face value. In the present case the shares have been issued at par and no premium has been charged. 4.2.15 The only questionnaire issued by the AO is the one dated 18/07/2011. The facts narrated in the previous paragraphs show that the appellant led the necessary evidences as called for by the AO in his questionnaire. The appellant has also filed copies of ITR, bank statements and confirmation of accounts, all of which contained proper name, PAN and address of the parties. The AO has merely taken these documents on record and not acted upon them in any other manner. Even though there is a mention of conducting enquiries th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO other than the ones raised in the questionnaire dated 18/07/2011. The assessment order also does not give any reference of the dates or the order sheet notings through which the AO required the appellant to produce the parties or to lead any further evidences. Paragraphs 2 to 14 on pages 3 to 7 of the assessment order are mere reproductions of some standard paragraphs which are found in almost all the assessment orders passed by this AO. As such there is nothing wrong in using standard formats if the facts of the case are similar. However the arguments and the contents of the paragraphs are not applicable to the facts in the present case. In view of this many of the AO's remark are found to be baseless remarks. 4.2.18 In the above background there is no merit in holding the amount of ₹ 1,96,85,400/- being amount of share application money received by the appellant as unexplained cash credit u/s 68 of the IT Act. Therefore the same is deleted. The ground is allowed. 11. As regards to the addition of ₹ 35,70,740/- made by the AO on protective basis. The ld. CIT(A) deleted the addition by observing in paras 4.3.1 to 4.3.3 of the impugned order as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of the said assessment order was furnished which is placed on record). The ld. Counsel for the assessee referred to para 3 of the said assessment order dated 28.08.2008 wherein the AO mentioned that: after having discussion with assessee s AR and necessary verification of details filed the total income declared by the assessee company at Rs. Nil is accepted. 13. It was submitted that the AO while framing the assessment u/s 143(3) of the Act made the necessary verifications relating to the share capital which was disclosed in the books of accounts. It was further submitted that during the course of search proceedings no incriminating material suggesting undisclosed income was found, therefore, the addition made while framing the assessment u/s 153A of the Act was not valid. As regards to the assessment year 2008-09, the ld. Counsel for the assessee submitted that the return of income was filed on 30.09.2008 which was processed u/s 143(1) of the Act and the time limit for issuing the notice u/s 143(2) of the Act was upto 30.09.2009. Thereafter, it was to be presumed that the returned income was accepted by the department. It was pointed out that the search took place on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the total income of the six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years in which both the disclosed and the undisclosed income would be brought to tax. (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material (v) In the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word assess in section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word reass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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