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TMI Blog2018 (5) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... , CIT DR Assessee by : Shri Salil Aggarwal, Adv.Shri Shaailesh Gupta, Adv ORDER Per Sudhanshu Srivastava, J. M. This appeal has been preferred by the revenue and arises out of order dated 12.05.2014 passed by the Ld. Commissioner of Income Tax (Appeals)-XXV { CIT (A) }, New Delhi wherein the Ld. CIT (A) has deleted the additions made by the Dy. Commissioner of Income Tax ( AO ), Central Circle-21, New Delhi in the order of assessment dated 28.03.2013 passed u/s 143(3)/147 of the Income Tax Act, 1961 (hereinafter called the Act ). 2. The brief facts of the case are that the original return in this case was filed on 17.10.2005 declaring income of ₹ 96,81,030/-. The said return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter called 'the Act') and subsequently, the case was reopened u/s 148 by issuance of notice u/s 148 on 30.3.2012. In compliance to the notice u/s 148, a copy of return already filed on 17.10.2005 was filed with a request that the same may be treated as return filed in compliance to notice u/s 148. Prior to the issuance of notice u/s 148, a search and seizure operation was carried out on 10.01.2012 in the Minda Group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issued letters u/s 133(6) of the Act to M/s Chandni Commercial Pvt. Ltd. and M/s Gyan Commercial Pvt. Ltd. (both at Kolkata) to verify the alleged transactions which remained undelivered. The Assessing Officer proceeded to treat the amount of ₹ 25 crore as unaccounted income of the assessee and completed the assessment at ₹ 25,96,81,030/-. 2.2 Aggrieved, the assessee approached the First Appellate Authority challenging the addition on merits as well as challenging the validity of initiation of reassessment proceedings u/s 148 of the Act. The Ld. Commissioner of Income Tax (Appeals) did not accept the assessee s averments on the challenge to the reassessment proceedings on the legal ground. However, the Ld. Commissioner of Income Tax (Appeals) deleted the addition on merits by holding that the Assessing Officer did not bring any cogent material on record to substantiate that the assessee had made cash payment of ₹ 25 crore in lieu of obtaining the cheques/share application money. 2.3 Now aggrieved, the department has approached the Income Tax Appellate Tribunal (ITAT) and has challenged the action of the Ld. Commissioner of Income Tax (Appeals) by raising t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R also relied on the following judgments: (i) PCIT vs. M/s Tupperware India Pvt. Ltd., reported in 284 CTR 68 (Del) (ii) Ferrous Infrastructure (P.) Ltd. vs. DCIT, reported in 120 DTR 281(Del) (iii) Deepak Extrusions Pvt. Ltd. vs. DCIT, reported in 80 taxmann.com 77 (Karn.) (iv) M/s Jayanthi Nataraj vs. ACIT, reported in 161 DTR 281 (Mad.) (v) Copy of the order of ITAT Delhi in the case of Asha Jain vs. ACIT in ITA No. 3519/Del/2014. (vi) Copy of the order of ITAT Delhi in the case of Sh. Shyamlal Mukherjee vs. ITO in ITA No. 4140/Del/2016. (vii) Copy of the order of ITAT Delhi in the case of Shiva Rubber vs. ITO in ITA No. 2212/Del/2015. (viii) Copy of the order of ITAT Delhi in the case of ITO vs. M. L. Creations in ITA No. 4009/del/2016 (ix) Copy of the order of ITAT Delhi in the case of Sh. Khusro Irshad vs. ITO in ITA No. 2115/Del/2016. 4. The Ld. CIT (DR) opposed the aforesaid contentions and submitted that the assessee had in fact raised no such objections about the initiation of proceedings u/s 148 of the Act before the AO and, therefore, the aforesaid judgments were inapplicable and that the contentions of the assessee do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestment and M/s Pioneer Finvest Ltd. was merely a paper company. The Ld. AR submitted that no evidence was brought on record to substantiate the allegation against the assessee. He further contended that the allegation of the AO in the order of assessment that the assessee had failed to furnish any response to show cause notice was factually incorrect. The Ld. AR referred to page 38 of the paper book which was assessee s response to the AO s notice dated 21.03.2013. The Ld. AR submitted that in the reply it was stated that the allegation was a general allegation that the shares of M/s Pioneer Finvest Ltd. had been taken over by the entities and persons belonging to Nirmal Minda whereas the assessee has not made any such investment. The Ld. AR submitted that it was submitted by the assessee before the AO that the assessee Shri Nirmal Minda had not made any investment in M/s Pioneer Finvest Ltd. which was duly supported by the balance sheet as well as bank statement. It was further submitted by the learned counsel that in the aforesaid response it was submitted that the assessee was neither a director nor a shareholder in the company M/s Pioneer Finvest Ltd. 8.1 It was contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p companies of Minda Group namely Minda Industries Ltd, Minda Investment and Minda Project in the form of share application money and share premium. iii. The Minda Group of companies had given cash to the different paper companies and taken cheque from them. iv. The assessee being the controlling person of Minda Group had given ₹ 25 Crores in cash to M/s Pioneer Finvest Ltd and then received the above amount in the guise of the share application money and share premium in his group companies. v. M/s Pioneer Finvest Ltd was formed by one Shri Pawan Ruia who was an entry operator and in the year 2004 the investigation wing of the Department in Kolkata had carried out search operation in the case of Shri Pawan Ruia which established that Shri Pawan Ruia was an entry operator. vi. The investigation wing had observed that the shares of M/s Pioneer Finvest Ltd have been taken over by the entities and persons belonging to the assessee and in the post search enquiries conducted by the investigation wing, the AR of the Minda Group had admitted that M/s Pioneer Finvest Ltd had been acquired by the Minda Group at the cost of ₹ 10 per share whereas the Net Asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multaneously. The said grounds dwell on the addition of ₹ 25,00,00,000 (Twenty Five Crores) made to the declared income of the assessee as Unexplained Investment. As opposed to the grounds as above the ld A.O. s version in the above respect was that:- i) It was found that one of the major companies i.e. M/s Pioneer Finest Ltd. Had made investment in Minda Group of companies by way of share application money. ii) The group companies of Minda Group namely Minda Industries Ltd., Minda Investment and Minda Project received money in the form of share application money and share premium from M/s Pioneer Finest Ltd., the entry operator and paper company. iii) The Minda group companies gave cash to the different paper companies an took cheque from them. iv) During the period relevant to A.Y. 2005-2006 Minda Group of Companies took ₹ 2.5 crore share application money and ₹ 22.5 crores as share premium money from M/s Pioneer Finest Ltd. v) The appellant being the controlling person of Minda Group gave ₹ 25 Crores in cash to the above paper company and then received the above amount back in the guise of share application and share premium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the Act on 28.03.2013. Upon a perusal of the appraisal report by the undersigned also it was not clear as to what the basis was for the above allegations. The ld. A.O. also stated that except for innocuous contents given in the appraisal report there was no material/evidence on record to support that M/s Pioneer Finest Ltd., had made investment in Minda Group of companies by way of share application money; that the group companies of Minda Group namely Minda Industries Ltd., Minda Investment and Minda Project received money in the form of shre application money and share premium from M/s Pioneer Finest Ltd., an entry operator and paper company; that the Minda group companies gave cash to the different paper companies and took cheque from them during the period relevant to A.Y. 2005-2006; that Minda Group of Companies took ₹ 2.5 crore share application money and ₹ 22.5 crores as share premium money from M/s Pioneer Finest Ltd., the appellant being the controlling person of Minda Group gave ₹ 25 crores in cash to the above paper company and then received the above amount back in the guise of share application and share premium money in his group companies; that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh book and bank s statement were furnished to support the allegation of cash payment of ₹ 25 crores being made by M/s Nirmal Kumar Minda in lieu of obtaining cheques from M/s Pioneer Finest Ltd during FY 2004-2005. 9.2 It is seen from the aforesaid that the Ld. CIT (A) has held that in the absence of any concrete, cogent and sound evidence/material in the shape of cash book and bank statement to support the allegation of cash payment of ₹ 25 crores being made by the assessee for obtaining cheques from M/s Pioneer Finvest Ltd. during the year 2004-05, the addition is unsustainable. The Ld. CIT (A) held that the AO did not bring any cogent material/evidence on record to substantiate the allegation that the assessee had made cash payment of ₹ 25 crores in lieu of obtaining the cheques. He has further held that the AO had failed to bring any cogent material on record to prove that the assessee had acquired any share/s of M/s Pioneer Finvest Ltd. which could give him controlling rights in that company. He has also held that the AO had failed to establish that M/s Pioneer Finvest Ltd. had raised the share capital/share premium of ₹ 2.50 crores and ₹ 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eer Finvest Ltd. and same was also replied to by the aforesaid company on 23.03.2013 by providing the necessary details, which confirm the aforesaid submission of the assessee. It is seen that in the reply filed by the aforesaid, M/s Pioneer Finvest Ltd had also provided the shareholding pattern of the aforesaid company, which establishes that the assessee had not purchased the shares of the aforesaid company. It is settled law that the AO is not only an adjudicator but is also an investigator and, therefore, before recording any adverse finding, it was the duty of the AO to support the allegation/s based on some material, which is completely absent in the instant case. Even, in this appeal filed by the revenue, no material has been brought before us to rebut the factual finding of the Ld. CIT (A). It is settled law that if the finding of the fact recorded by the lower authorities is incorrect, then it is the duty of the appellant to assail such finding by bringing material and in absence of any material, the finding of the lower authorities cannot be disturbed. In the case of CIT vs. Surendra Buildtech Pvt Ltd (ITA No. 141/2012), the Hon ble Jurisdictional High Court has held as u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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