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TMI Blog2019 (1) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently, the Assessing Officer completed the assessment u/s 147/143(3) on 31st December, 2009 determining the total income at Rs. 73,510/- wherein he made certain additions by disallowing STT debited to P&L Account, income-tax debited, disallowance u/s 14A and preliminary expenses. 3. Subsequently, a search operation u/s 132 of the IT Act, 1961 was carried out in the Subharti group of cases on 12.11.2010. Being a part of the search, a search was carried out at the bank accounts of the assessee situated at Oriental Bank of Commerce, Subharti Dental College Branch, Subhartipuram, Meerut during which cash of Rs. 5,48,50,000/- was found and seized. In response to notice u/s 153A, the assessee filed the return declaring loss of Rs. 21,619/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee company has issued equity shares of Rs. 87,12,500/- on a premium of Rs. 16,55,37,500/- during the year under consideration. He asked the assessee company, vide questionnaire dated 18th October, 2012 to furnish details as to how the premium was worked out by the issue managers, auditors, etc., and the copies of the working and material relied on. In abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -10 Rs. (-) 65,054/- 2010-11 Rs. (-) 146/- From the above data, .it is obvious that the assessee has hardly any business. In this situation, seizure of Rs. 5,48,50,000/- from the bank account of the assessee constitutes sufficient incriminating material upon which the entire affairs of the assessee can be examined. This is precisely what the AO has attempted to do in the assessment order made subsequent to the search. 4.5 The AR has relied heavily on the judgment given by the ITAT Mumbai, in the case of All Cargo Global Logistics Ltd. Vs DCIT Central Circle 44 (2012) 137 ITD 0026. However, the facts of the narrated case are different from the case of the appellant because in that case, no incriminating material was found during the course of search. On the other hand, in this case, cash amounting to Rs. 5,48,50,000/- was seized from the bank account of the assessee. Needless to say, this fact was not available at the time of the original assessment. Thus, the fact that the original assessment has abated will not make any difference because incriminating material was indeed found in the form of FDRs in this case. In the judgment given by the ITAT Mumbai, the Hon'ble ITAT ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the addition of Rs. 17,42,00,000/-, made by the A.O., which was received by the appellant company as Share Capital and Share Premium, being Capital receipt, in the hand of the appellant. 2. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), Meerut, erred in law as well as on fact in confirming the action of the A.O. without jurisdiction, of visiting the issue of share capital, which was examined and finalized in the assessment under section 148 of the IT Act 1961. 3. On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals), Meerut, erred in law as well as on fact in confirming the addition of Rs. 17,42,00,000/-, made by the A.O., in an assessment made under section 153A of the I.T. Act, in the absence of any incriminating material, which was found and seized during the course of search under section 132 of the I.T. Act, 1961. 4. The appellant craves leave to add, alter, amend, raise or delete any or all grounds of appeal." 7. The ld. counsel for the assessee, referring to the copy of the 'Panchnaama' dated 4th December, 2010, copy of which is placed at pages 3-5 of the paper book, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IT Act were already on the record as they were filed by the assessee during the course of original assessment proceedings. The same were considered by the then Assessing Officer and were accepted by him. Now, there is no new material fact available with the Assessing Officer even after the search and seizure action u/s 132 of the IT Act which could be a cause of making a fresh assessment and making an addition on account of share application money. The Assessing Officer has not made any further inquiry after the search so as to find out that whatever details furnished during the course of original assessment proceedings/reassessment proceedings were incorrect or false. Since the assessee has established the identity and credit worthiness of the share applicants and the genuineness of the transaction and the Assessing Officer, after considering the submissions made by the assessee has accepted such share application and share premium as explained, therefore, in absence of any contrary material in the possession of the Assessing Officer, he cannot take a different view and put the assessee to a further test of producing the share applicants after a gap of so many years. He submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT vs. Kesarwani Zarda Bhandar Sahson Allahabad In ITA No.270 of 2014. 11. So far as the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) relied by the ld. counsel is concerned, he submitted that the Hon'ble Kerala High Court has held that assessment proceedings generated by issuance of a notice u/s 153A(1)(a) can be concluded against interest of the assessee including making additions even without any incriminating material being available against the assessee in search u/s 132 on the basis of which notice was issued u/s 153A. The ld. DR submitted that the Hon'ble Kerala High Court, while deciding the issue against the assessee has considered the following decisions:- i) CIT vs. Kabul chawla (2016) 380 ITR 573; ii) CIT vs. Continental Warehousing Corpn. (Nhava Sheva) Ltd. (2015) 374 ITR 645 iii) Principal CIT vs. Kurele Paper Mills (P) Ltd. (2016) 380 ITR 571 (Del) iv) CIT vs. Lancy Constructions (2016) 383 ITR 168; v) CIT vs. ST. Francies Clay Décor Tiles (2016) 240 Taxman 168; & vi) CIT v. Promy Kuriakose (2016) 386 ITR 597 (Ker.) 11.1 He also relied on the following decisions:- i) CIT vs MAF A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me set of material for arriving at two contrary findings at two different points of time while the level of authority taking the decisions is same. Referring to the decision of the Ahmedabad Bench of the Tribunal in the case of INTAS Pharmaceuticals Ltd. vs. DCIT in IT (SS)A No.807/Ahd/ 2010, he submitted that the Tribunal has considered the decision of the Hon'ble Allahabad High Court in the case of Raj Kumar Arora (supra) and held that the said decision deals with the scope of section 153A and not that of assumption of jurisdiction which stands on a different footing. He reiterated that the Hon'ble Delhi High Court in the case of Meeta Gutgutia (supra) has held that reopening of completed assessment was not justified in the absence of incriminating material and the SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court on the question of law raised by the Revenue. He submitted that although the dismissal of SLP may not amount to laying down of a law, but, the fact remains that the Hon'ble Supreme Court did not find any infirmity in the view taken by the Delhi High Court that in the absence of incriminating material the concluded assessment cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only for undisclosed income found during search operation, but also with regard to material available at the time of original assessment. In view of the binding decisions of the jurisdictional High Court, we are unable to accept the contention of the ld. counsel for the assessee that in the absence of any incriminating material found during the course of search, the initiation of proceeding u/s 153A are not valid. Therefore, the legal ground raised by the assessee stands dismissed. 14. Now, coming to the merit of the case, it is an admitted fact that in the order passed u/s 147/143(3) on 31st December, 2009, the Assessing Officer had examined the issue of share premium and share application money. On the basis of various details filed by the assessee as required by the Assessing Officer, no addition was made and the issue of share premium was accepted without making any addition. We find, the Assessing Officer at para 3 of the assessment order passed u/s 147/143(3) has mentioned as under:- "During the relevant previous year the assessee earned income from interest on loans and advances granted by it as an NBFC and profit on sale of mutual funds. Apart from that during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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