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TMI Blog2018 (12) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 - - - Dated:- 14-12-2018 - Shri S. S. Godara, J.M. And Dr. A. L. Saini, A.M.) For The Appellant/ Department : Shri Radhey Shyam, CIT, ld.Sr.DR For The Respondent/Assessee : Shri A.K. Tulsyan,FCA, ld.AR ORDER Per Dr . A . L . Saini, A . M . : The captioned three appeals filed by the Revenue, pertaining to assessment years 200910, 201112 and 201011, are directed against the separate orders passed by the Commissioner of Incometax (Appeals)21, Kolkata, which in turn arise out of orders passed by the Assessing Officer under section 153A/143(3) of the Income Tax Act, 1961 (in short, the Act ), dated 31032016. 2. Since, the issues involved in all the appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in IT(SS) No. 18/Kol/2017, for assessment Year 201112, have been taken into consideration for deciding the above appeals en masse . 3. Grievances raised by the Revenue ( in lead case) in IT(SS) No. 18/Kol/2017, for the A. Y. 201112, are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the AO and filed details in support of the return of income, which were examined by the assessing officer. The assessing officer noted that the assessee company had raised fresh share capital amounting to ₹ 1, 30, 00, 000/. On perusal of the details of share application money received as furnished by the assessee, it was found that, a total twenty four investor companies have invested in the share capital of the assessee company including four companies having its registered address outside Kolkata. The details of the said four Companies are given as under for ready reference: SI . No . Name and Address of the Investor Company PAN Amount of share application money received (in Rs . ) 1 Ispat Sheets Ltd. House, no. 36, S. C. Road, Bylane3, Athgaon Pukuripar, Guwahati781001 AAACI4429E 30, 00, 000/ 2 N. E. Electronics Ltd. House no. 36, S. C. Road Bylane3, Athgaon Pukuripar, Guwahati781001 AAACN6695B 55, 00, 000/ 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned four parties (3 Guwahati based and 1 Mumbai based party). In response, the assessee submitted that the addition in the case of search assessment has to be made only on the basis of incriminating material. The Department cannot do a fresh assessment that had already been completed under the Act, without having any incriminating material on record. The issues forming part of the items of the regular assessment, was beyond the scope of the search assessment u/s 153A/153C; of the Act and the AO had no jurisdiction to make additions otherwise than on the basis of the incriminating material found in the course of search. Besides, the assessee had filed the return of allotment to Registrar of companies. The Copy of form No. 2 filed with ROC has already been submitted before assessing officer. All the shareholders are body corporate. They are assessed to income tax for past several years. All the share application money had been received through banking channels. The assessee also submitted before the AO that the basic ingredients i. e. identity of the shareholders, genuineness of the transactions and creditworthiness of the shareholders have been proved, therefore, no adverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of search assessments has to be made only on the basis of incriminating material. The Ld. AO cannot start doing a fresh assessment that had already been completed either u/s 143(3) or u/s 143(1) under the Act without having any incriminating material on record. In proceedings u/s 153A/153C to reopen the completed assessment is restricted only to the extent of incriminating documents, if any, only. The ld CIT(A) also noted that issues forming part of the items of the regular assessment, is beyond the scope of the search assessment u/s. 153A/153C of the Act and the AO has no jurisdiction to make additions otherwise than on the basis of the incriminating material found in the course of search. Therefore, ld CIT(A) deleted the addition of ₹ 1, 30, 00, 000/made by assessing officer. 12. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. 13. The Ld DR for the Revenue submitted before us that Assessing Officer is statutorily required to make assessment/reassessment of total income relating to earlier six years and addition can be made for any escaped income. Scope of assessment/reassessment u/s 153A of the Act, is not to be restricted to assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount payee cheques does not make the transaction sacrosanct. Therefore, ld DR pointed out that in the assessee s case under consideration, the assessee has not established the identity, creditworthiness and genuineness of the share capital/share premium therefore, addition under section 68 of the Act should be sustained. 14. On the other hand, ld Counsel for the Assessee, submitted before the Bench that the addition in the case of search assessment has to be made only on the basis of incriminating material. The assessing officer cannot start a fresh assessment that had already been completed under the Act, without having any incriminating material on record. The issues forming of the items of the regular assessment is beyond the scope of the search assessment u/s 153A/153C of the Act and the AO had no jurisdiction to make additions otherwise than on the basis of the incriminating material found in the course of search. In the assessee s case under consideration, no any incriminating material was unearthed by the search team therefore, no any addition should be made. The assessee had filed the return of allotment to Registrar of companies, Copy of form No. 2 filed with ROC has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments asked to explain their share application money given to the assessee company. 17. We note that search and seizure operation was conducted on the assessee (Mukti Group cases), on 13. 11. 2013 and 09. 01. 2014, therefore, the previous year of search of the assessee is 01. 04. 2013 to 31. 03. 2014, that is, previous year 201314, relevant to the assessment year 201415. Whereas, the Revenue is in appeal before us for the assessment year 200910, 201011 and 201112, and all these assessment years are prior to search and seizure operation, that is, dated 13. 11. 2013, therefore, the addition, if any, can be made based on the incriminating material only. We note that assessments for assessment years 200910, 201011, and 201112 were already completed, hence these three assessment years are unabated and addition can be made only based on incriminating material unearthed during the search and seizure. We note that in the course of search seizure, no incriminating documents were found to establish that the share application money received from the said parties are not genuine. We note that in assessee s case under consideration, the Ld. AO while exercising the powers conferred within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessments cannot be disturbed unless incriminating material have been unearthed during the search, has to be followed and necessarily given effect to. Admittedly, no specific incriminating materials have been mentioned in the assessment orders for AYs 200910, 201011, 201112 which have been admittedly completed before search by original assessments conducted by scrutiny therefore, no addition/disallowance can be made by the AO in 153A proceedings. Therefore, no addition/disallowance can be made without the aid of an incriminating material unearthed for the years referred as a 11 result of search. The Hon ble Delhi High Court in Kabul Chawla (supra) has laid down the law as under: Summary of legal position 37 . On a conspectus of Section 153A(1) of the Act, read with provisions thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i . Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been exercise u/s 153(C) R . W . Section 153(A) . In the case before us, the AO has made a disallowance of the expenditure, which was held disclosed, for one reason or the order, but such disallowances made by the AO were upheld by the L . D . CIT (A) but the Ld . Tribunal deleted these disallowance . We find no infirmity in the aforesaid Act of the Ld . Tribunal . The appeal is therefore, dismissed . 20. Also, Apex court in the case of CIT v. Sinhgad Technical Education Society 397 ITR 344 has held as under: 18) In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years . Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact . We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act . Para 9 of the order of the ITAT reveal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, keeping in view the ratio decided by the Hon ble Delhi High Court in the case of Kabul Chawla, (2016) 380 ITR 573(Del) (supra) and the ratio decided by the Hon 'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (supra), we are thus of the considered opinion that since there is no incriminating material unearthed during search in respect of the concluded assessments, no addition/disallowance could be made by the AO for AYs 200910, 201011, 201112. Therefore, the addition/disallowance made in impugned assessments for the AYs 200910, 201011, and 201112 are ordered to be deleted. 23. We note that in assessment Year 201011, the Revenue raised the additional ground, which reads as follows: 4 . That on the facts and circumstances of the case and in law, the Ld . CIT(A) is justified in deleting addition of Rs . 4, 78, 038/- made Since, the appeal of the Revenue is dismissed by us on legal ground that no any incriminating documents/papers seized during the search operation , and above ground raised by the Revenue in A. Y. 201011 also covered in the legal ground adjudicated by us, therefore the said ground does not require adjudication. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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