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TMI Blog2019 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of search. We, therefore, delete the said additions made in both the years under consideration and allow these appeals of the assessee. - I.T.(SS)A. Nos. 97 & 98/Kol/2018 - - - Dated:- 29-11-2019 - Shri P.M. Jagtap, VP (KZ) And Shri A.T. Varkey, JM For the Assessee : Shri Somnath Ghosh For the Revenue : Shri A.K. Nayak ORDER PER P.M. JAGTAP, VICE-PRESIDENT (KZ) These two appeals filed by the assessee are directed against two separate orders passed by the Ld. CIT(Appeals) 21, Kolkata both dated 27th July, 2018 for A.Y. 2010-11 2011-12 and since some of the issues raised therein are common, the same have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. The assessee in the present case is a company which filed its return of income for the year under consideration originally on 01,10.2010 u/s 139 of the Act declaring a total income of ₹ 39,42,030/-. It belongs to Bhalotia Group. The said group is engaged in the business of manufacturing of sponge iron, infrastructure, jewellery and manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eneration activity and that too at a premium of ₹ 90/- per share. iv) The share subscribers have also failed to reply why they had invested in the equities of the assessee company at a high premium of ₹ 90 /- per share. v. No prudent person would put his money at stake in the equities of a closely held company which had little business activity and from which he would get no return. vi) In such cases, the agreement about real transactions takes place in secret and direct evidence about such direct transaction / agreement would not be available to the department in normal circumstances. vii) The result of these transactions are designed in a way that unaccounted money or cash was brought in the books of the assessee company either in the form of equities or unsecured loan through multiple layers. viii) Every single credit entry in tire bank accounts of the share subscribers is followed by a corresponding debit entry of equivalent amount on the very same day. The assessee has contended that this issue is irrelevant. But this issue is very much relevant. This issue coupled with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO found that the assessee company during the year under consideration had claimed dividend income of ₹ 17,90,211/- as exempt from tax, but disallowance u/s 14A on account of expenses incurred in relation to the said exempt income was offered by the assessee company only to the extent of ₹ 1,41,111/-. He worked out such expenses by applying Rule 8D at ₹ 2,15,941/- and made a further disallowance of ₹ 74,830/-. Accordingly, the total income of the assessee for the year under consideration was worked out by the AO at ₹ 3,55,16,860/- as against the total income of ₹ 39,42,031/- as offered by the assessee in the return of income originally filed u/s 139 on 01.10.2010. 5. The assessment for A.Y. 2011-12 was also completed by the AO u/s 153A / 143(3) of the Act vide an order dated 31.12.2017, pursuant to the search operation, wherein the addition of ₹ 2,12,571/- was made by the AO on account of disallowance u/s 14A by applying Rule 8D. 6. Against the orders passed by the AO u/s 153A / 143(3) for both the years under consideration, appeals were preferred by the assessee before the Ld. CIT(A) and since the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication money as unexplained cash credit u/s 68 was made by the AO on the basis of the said bank account found during the course of search, the same is within the scope of assessment made u/s 153A. He contended that the assessee could not establish the identity and capacity of the concerned share applicants and also failed to establish the genuineness of the relevant transactions inspite of sufficient opportunity afforded by the Assessing Officer in this regard. He contended that the primary onus that lay on the assessee, thus was not discharged and the addition made by the Assessing Officer by treating the share application money as unexplained cash credit u/s 68 was rightly confirmed by the Ld. CIT(A). He also relied on the decision of Hon ble Kerela High Court in the case of E.N. Gopakumar vs CIT 390 ITR 131 as well as in the case of St. Francis Clay Decor Tiles 385 ITR 624 to contend that the addition to the total income of the assessee can be made in the assessments u/s 153A even without their being any incriminating material found during the course of search. 9. In the rejoinder, the learned counsel for the assessee submitted that the bank account found durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment u/s 153A of the Act completed in pursuance of search conducted u/s 132 can be made even without any incriminating material found during the course of search. A perusal of the judgment delivered by the Hon ble Kerala High Court in the said case however shows that the limited issue was decided by their lordships to the effect that once search is initiated u/s 132 of the Act, the Assessing Officer is empowered to issue notice to such person requiring him to furnish the returns of income in respect of each assessment year, following within six assessment years as referred to in clause (b) and then the assessee has to furnish all the details with respect to each assessment year even if no documents are unearthed or any statement made by the assessee during the course of search u/s 132. Another decision of Hon ble Kerala High Court in the case of E.N. Gopakumar vs CIT relied upon by the ld. DR no doubt is in favour of the revenue on this issue wherein it was held that the assessment proceeding generated by the issuance of a notice u/s 153A can be concluded against the interest of the assessee including making additions even without any incriminating material being avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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