9911796707
TMI Blog2017 (12) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... count of shares allotted to M/s Jeevandhara Waters Pvt. Ltd. It is, therefore, clear that no fresh incriminating material was found during the course of search which took place on 19.01.2009. Thus we delete the addition made by the AO in the absence of incriminating material found during the course of search held on 19.01.2009, by passing the assessment u/s 153A r.w.s. 143(3) of the Act on 29.12.2010, which was confirmed by the ld. CIT(A) vide impugned order. - Decided in favour of assessee. - ITA No. 3049/Del/2013 And ITA No. 3050/Del/2013 - - - Dated:- 22-8-2017 - Sh. N. K. Saini, AM And Sh. Kuldip Singh, JM For The Assessee : Sh. Sanjay Garg, CA For The Revenue : Sh. Navin Chand, CIT DR ORDER Per N. K. Saini, AM: These two appeals by the assessee are directed against the separate orders each dated 08.02.2013 of ld. CIT(A)-33, New Delhi. 2. Since the issues involved are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. At the first instance, we will deal with the appeal in ITA No. 3049/Del/2013 for the assessment year 2005-06. Following ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in not adjudicating the Ground No. 2.2 of the appeal being 'BECAUSE, the issuance of notice dated 30.11.2009 under section 153A violated the provisions of natural justice and good conscience, in as much as the appellant was required to file the return, without even making him available copies of the seized material, statement on oath etc. and proceedings that had originated from such a notice were wholly illegal and void ab-initio. 2.3 BECAUSE the Ld. CIT(A)-XXXIII, New Delhi erred in law in dismissing the appeal and holding that Validity of search' can only be questioned before Hon'ble High Court or Hon'ble Supreme Court under Writ Jurisdiction and that other proceeding such as drawing a separate Punchnama, separate search warrant etc. do not vitiate the validity of search and that in any case the validity of search and its procedures cannot be a matter of adjudication under section 250 of I.T. Act and that there was a valid search, issuance of notice u/s 153A is valid.' 3.1 BECAUSE the Ld. CIT(A)-XXXIII, New Delhi, erred in law in not adjudicating the Ground No. 3.1 of the appeal being 'BECAUSE the learned Assessing Officer has erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Wellfit Traders Private Limited ₹ 20,00,000/- M/s. Amichem Petro Product Pvt. Ltd. ₹ 10,00,000/- M/s. Madan Real Estate Pvt. Ltd. ₹ 10,00,000/- M/s. Shree Leasing Finance Limited ₹ 20,00,000/- M/s. Gauraj International Pvt. Ltd. ₹ 20,00,000/- TOTAL Rs. 95,00,000/- as unexplained under section 68 of the Act.' 5.2 BECAUSE the Ld. CIT(A)-XXXIII, New Delhi erred in law in dismissing the Ground No. 5.2 of the appeal that 'BECAUSE in the facts that all summons issued u/s 131 have been duly served upon the share applicants companies but have been remained uncomplied with by these Companies may for various reasons is prerogative and command of Assessing Officer and not adverse material against the appellant.' 5.3 BECAUSE the Ld. CIT(A)-XXXIII, New Delhi erred in law in dismissing the Ground No. 5.3 of the appeal that 'BECAUSE in the absence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 153A r.w.s. 143(3) of the Act was completed at an income of ₹ 5,83,177/- vide order dated 28.12.2007. Thereafter, a search and seizure operation was again carried out at the premises of the assessee on 19.01.2009 and notice u/s 153A of the Act was issued on 30.11.2009. In response to the said notice, the assessee filed the return of income on 15.02.2010 declaring a loss of ₹ 14,28,183/-. During the course of assessment proceedings, the AO noticed that in the balance sheet, been shown as the issued share capital of the assessee company had increased from ₹ 1,02,000/- to ₹ 1,06,02,000/-. The AO asked the assessee to furnish the complete details of subscribed and paid up share capital of ₹ 1,06,02,000/-. The assessee submitted the details of paid up share capital as under: S. No. Name of shareholders Amount Documentary evidence in order to substantiate the identity, creditworthiness and genuineness of the transactions. 1. M/s. Surbhi Resources Private Limited ₹ 15,00,000 Copy of Acknowledgement of Er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd furnished a letter dated 25.12.2010. The AO did not find merit in the submission of the assessee and observed that the letter dated 25.12.2010 was nothing but the repetition of facts given in the earlier letter dated 06.12.2010. He also observed that the assessee had shown its inability to produce the parties on the pretext that those companies were not the assessee s sister concerns and were also not under its influence of control. The AO made the addition of ₹ 1,05,00,000/- u/s 68 of the Act and also added ₹ 10,00,000/- in respect of share capital on account of M/s Jeevandhara Waters Pvt. Ltd. The reliance was placed on the decision of the ITAT Delhi Benches in the case of M/s Amtrac Automobiles India Pvt. Ltd. Vs ACIT, Circle-1(1), New Delhi in ITA No. 2920/Del/2009. 7. Being aggrieved the assessee carried the matter to the ld. CIT(A) and furnished the written submission which is summarized by the ld. CIT(A) in para 5.2 of the impugned order, as under: (i) During the year under appeal appellant filed its return of income in response to notice u/s 153A of the Income Tax Act, 1961 on 15-02-2010 declaring a loss of ₹ 14,28,183/-. Against this Return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05-06, Share Application Form, Copy of Bank Statement of IDBI Bank, Director's Report, Auditors Report, Balance Sheet, Profit Loss Account with Annexures F. Y. 2004-05. From this Company we have received Share Application Money of ₹ 20,00,000/- vide Cheque No. 041211 dated 21.6.2004 drawn on IDBI Bank, Park Street, Calcutta. This has been duly disclosed in the Schedule - 3 of Investment to the Balance Sheet. There are investments of the Company to the tune of ₹ 3,22,50,000/- which includes share application money paid to us. The Company is of substantial worth. We further enclosed therewith the Extract from the record of MCA of Government of India Portal to evidence the change of address. * AMICHEM PETRO PRODUCTS PRIVATE LIMITED REGD. OFFICE-4, BALLAV DAS ST 4TH FLOOR JORASANKO, KOLKATA, WEST BANGAL - 700007 INDIA The name of the Company is changed from CORONET INDUSTRIES LIMITED (PAN - AABCC2872L) to present name upon amalgamation of this Company into AMICHEM PETRO PRODUCTS PRIVATE LIMITED after Order of Calcutta High Court passed in Company Petition No. 316 of 2005 dated 13.9.2005 which is enclosed herewith. We enclosed ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication Money of ₹ 10,00,000/-vide Cheque No. 038546 dated 20.7.2004 drawn on ABN Amro Bank Br. Road, Kolkata. This has been duly disclosed in the Schedule - C of Investment to the Balance Sheet. There are investments of the Company to the tune of ₹ 5,18,44,000/- which includes share application money paid to us. The Company is of substantial worth. We further enclosed therewith the Extract from the record of MCA of Government of India Portal to evidence the change of name from Jeevandhara Waters Private Limited to Narayani Polytube Private Limited. * SHREE LEASING FINANCE LIMITED OLD Address - 61, Zone-B, Mancheshwar, Bhuwaneshwar - 751010 NEW Address - Meria Bazar, Old Usha Company Godown Campus, Cuttack, Orissa - 753001 INDIA CIN-002880 PAN-AAGCS7858D Presently assessed under - Area Code WBG, Jurisdiction ITO-WD-2/Berhampur, Building - Beherampur, Orissa. We enclosed therewith copy of Acknowledgement of IT Return for A. Y. 2005-06, Copy of Bank Statement, Director's Report, Auditors Report, Balance Sheet, Profit Loss Account with Annexures F. Y. 2004-05. From this Company we have received Share Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are same whether it is under Section 143(3), 147 or 153A of IT. Act, He argued that u/s 147 there are Judicial pronouncement that Section 147 does not confer power of review to the assessing officer. ( v) Ld. AR argued that assessment under Section 153A has to be restricted to the evidence found as a result of search u/s 132. He relied upon the decision of Hon'ble H.C. of Allahabad in the case CIT(c) Vs. Kanpur Vs. Suit Shaila Aggarwal (2011) 16 Taxmann .com 232 (All.), Meghmani Organics Ltd. Vs. DCIT, Ahmedabad (2010) 6 ITR (Trib) 360 (Ahm.), LMJ International Ltd. (2008) 119 TTJ 214 (Calcutta). 8. The ld. CIT(A) after considering the submissions of the assessee observed that the jurisdiction of the Assessing Officer u/s 153A of the Act is to assess total income for the year and not restricted to seized material. The reliance was placed on the judgment of the Hon ble Delhi High Court in the case of Anil Kumar Bhatia in ITA Nos. 1626, 1632, 1998, 2006, 2019 2010 of 2010 order dated 07.08.2012. The ld. CIT(A) further observed that as a result of search and seizure, documents were seized and the addition had been made on unaccounted stock for other assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, I confirm the addition made by A.O. u/s 68 dismiss the ground of appeal. 9. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the issue relating to receipt of share application money was duly examined while passing the order dated 28.12.2007 u/s 153A r.w.s. 143(3) of the Act and thereafter search and seizure operation u/s 132 of the Act was again carried out on the assessee on 19.01.2009 but no incriminating material was found during the course of search, so as to impinge upon the receipt of share capital, still the AO based upon the notice sent in other cases to the share applicants which had remained uncomplied asked the assessee to produce the Directors of the share applicants. It was stated that although assessment order was made u/s 153A of the Act, however, no reference was made to any incriminating material found during the course of search. As such, the addition made by the AO and sustained by the ld. CIT(A) was not justified. The reliance was placed on the following case laws: CIT Vs Lancy Constructions (2016) 237 Taxman 728 (Kar.) CIT Vs Kab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO to the extent of the initiation of action under provisions of Income Tax Act becomes necessary, would be incriminating material. It was also stated that it is altogether different thing that finally, it may or may not culminate into pecuniary liability imposed upon the assessee. Such piece of information could be in the form of statement recorded or inventory made or noticing of circumstances or in any other form. It was further stated that a single piece of information may not be incriminating individually but when put in juxtaposition of other informations or circumstances, it very well becomes incriminating and that in the present piece of information (material) put in juxtaposition of the fact that none of the so-called share holder companies complied with the summons u/s 131 of the Act and the assessee refused to produce them, in spite of being closely held company, certainly became incriminating material and it certainly had genesis in the search. It was further submitted that the decision in the case of CIT Vs Kabul Chawla relied by the ld. Counsel for the assessee does not overrule the ratio laid down in the case of Anil Kumar Bhatia 24 Taxman 98 (as clarified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished the same. On perusal of the details furnished in respect of paid-up share capital, it has been noticed that during the year under consideration the assessee company has allotted 100,000 shares of ₹ 10/- each to Jeewandhara Waters (P) Ltd. 1.2 On perusal of the audited accounts of Jeewandhara Waters (P) Ltd. for the A.Y. 2005-06, it has been noticed that the said company has shown Investments as on 31.3.2005 at ₹ 51,844,000/-. On perusal of the Schedule of Investments, it has been noticed that the name of the assessee company did not appear in that schedule. Besides this, there is no head in the balance sheet wherein the said allotment of shares of assessee company could be shown. The other major head (in excess of ₹ 1,000,000/-) in the balance sheet of Jeewandhara Waters (P) Ltd. is Loans Advances. The schedule of Loan Advances also did not contain the name of the assessee company. Thus, the amount of ₹ 1,000,000/-, which the assessee has shown to have received from Jeewandhara Waters (P) Ltd. on account of share capital is not reflected in the balance sheet of Jeewandhara Waters (P) Ltd. as on 31.3.2005. Under these circumstances the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal Income including addition u/s 68 of I.T. Act for share capital or share application money etc. even though no addition was made in original assessment proceedings. 14. From the aforesaid notings also, it is clear that no incriminating material was found during the course of search for the assessment years 2005-06 and 2006-07 which are under consideration. The ld. CIT(A) stated in the impugned order that the addition had been made on account of unaccounted stock for the assessment years 2007-08 and 2008-09. Therefore, it is an admitted fact that there was no incriminating material as regards to unaccounted stock, if any, for the years under consideration. In the present case, the contention of the assessee for the additions on account of unaccounted stock for the assessment years 2007-08 and 2008-09, was that the addition for the assessment year 2007-08 has been deleted by the ld. CIT(A) while the issue was pending for the assessment year 2008-09 relating to the stock before the Sales Tax Authorities. The said contention was not rebutted by bringing any cogent material on record. From the aforesaid discussion, it is clear that although no incriminating material was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer, (vii) Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. It has further been held as under: On the date of the search the assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 16. Similarly, in the case of Pr. CIT Vs Meeta Gutgutia Prop. M/s Ferns and Petals (2017) 395 ITR 526 (Del.), the Hon ble Jurisdictional High Court by distinguishing the decision in the case of Smt. Dayawanti Gupta Vs CIT reported at (2016) 390 ITR 496 which was relied by the department and also by considering the decisions in the cases of CIT Vs An ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
