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TMI Blog2020 (12) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... l./2018, 6173/Del./2018, 6174/Del./2018, 6187/Del./2018, 6175/Del./2018, 6178/Del./2018, 6179/Del./2018, 6930/Del./2018, 5854/Del./2018, 6181/Del./2018, 6183/Del./2018, 6185/Del./2018, 6186/Del./2018 (Assessment Year 2011-2012, 2010-2011) The ACIT, Central New Delhi. Versus M/s. Madhusudan Packaging LLP [Erstwhile M/s. Madhusudan Packaging (P) Ltd.,], Ms. Rajgopal Agarwal, M/s. Murli Infratech LLP [Erstwhile M/s. Murli Infratech Pvt. Ltd.,], M/s. RGS Printers LLP [Erstwhile M/s. RGS Printers Pvt. Ltd.,], M/s. MRS Projects LLP [Erstwhile M/s. MRS Projects (P) Ltd.,], M/s. Murli Agritech LLP [Erstwhile M/s. Murli Agritech Pvt. Ltd.,], Ms. Kavita Agarwal, M/s. KMS Associates LLP, [Erstwhile M/s. KMS Associates (P) Ltd.,], Shri Gopal Agarwal (Vice-Versa) And The ACIT, Central New Delhi Versus Ms. Suman Agarwal, Ms. Sabhyata Agarwal, Ms. Mamta Agarwal, Shiv Kumar Agarwal ORDER PER BENCH : We have heard the Learned Representative of both the parties through video conferencing and perused the material available on record. 2. Learned Representatives of both the parties have mainly argued in the case of M/s. Madhusudan Packaging LLP in ITA.No.6182/Del./2018 for the A.Y. 2011-2012 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently repurchased by family members of Directors/Promoters or group companies from those Kolkata based non-descript companies at very nominal rate. In this regard, A.O. referred a document found during the course of search from Jalalabad Road, Shahjahanpur which has been reproduced by him in the assessment order and the said seized documents mentions about the details of companies/entities who have transferred their shares to other companies/entities of the group. The A.O. further observed that the shares originally purchased by the Kolkata based non-descriptive company at higher premium ranging from Rs. 50/- to Rs. 200/- per share were subsequently sold to the group companies/entities at much less price than the value of money paid by them at the time of issue of shares. The difference between the value of shares repurchased by group entities and as originally allotted to Kolkata based companies, has been treated by A.O. as income of the assessee for the year under consideration. The details of such purchase/sale of shares and conclusion drawn by A.O. have been mentioned in the assessment order. The A.O. has taken the amount paid by the assessee at Rs. 1,15,500/- and has taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act were issued by AO and, in reply, appellant filed returns of income. It is also clear from the assessment order that the addition has been made on account of unexplained investment u/s 69B of I. T. Act. The basis of addition has been made the documents seized during the search proceedings, which have been reproduced in the assessment order and treated by AO as incriminating material. However, the perusal of the said documents reveal that it is nothing but the list of transfer of shares for the period from 01.04.2010 to 31.03.2011 in respect of different companies of the group wherein, in four columns, the date of transfer of shares, name of transferor company, number of shares and in the last column, the name of transferee company has been mentioned. There is nothing incriminating in these details which could indicate that there was any evasion of tax on the part of any of these companies/entities. These details are merely plain details which do not lead to any adverse findings in the case of appellant. The' basis of addition made by AO is also not the details mentioned in these papers rather post-search enquiries made by him during the regular course of hearings as in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that date, assessment of A.Y. 2011-12 was completed assessment as the time period to issue notices u/s 143(2) for aforesaid year had already expired. Further, as mentioned above, no incriminating material was found in the case of the appellant during the search proceedings for making assessment in this year. Therefore, on both the counts no addition could have been made by AO by disturbing the income disclosed in the return filed by appellant. In such situation, the addition made by AO, as mentioned above, for A.Y. 2011- 12, is not sustainable and deserves to be deleted. I, therefore, delete the addition made by him and allow the grounds taken by the appellant. 7. All other grounds taken by appellant on merit remain academic only, therefore, need do not adjudication. 8. In the result, appeal is allowed." 7. The Ld. D.R. relied upon the Order of the A.O. and submitted that the word 'incriminating material' is not mentioned in Section 153A of the I.T. Act, in which, assessment have been framed. He has submitted that list of transfer of shares found during the course of search has not been disputed by the authorities below, therefore, it is incriminating material in nature. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce against the assessee muchless no incriminating material found during the course of search. He has submitted that in the Group Cases of ACIT vs., Madho Gopal Agarwal and ACIT vs., M/s. Kapis Impex LLP, the Departmental Appeals have been dismissed by the Tribunal vide Orders Dated 13.01.2020 and 30.06.2020. The Orders of the Tribunal are reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "E" NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & AMIT SHUKLA, JUDICIAL MEMBER I.T.A. No.6184/DEL/2018 Assessment Year 2010-11 ACIT, Central Circle-19, New Delhi. v. Madho Gopal Agarwal, 58, Madhuban, Preet Vihar, New Delhi. TAN/PAN: ACXPA 3780E (Appellant) (Respondent) Appellant by: Ms. Pramila M. Biswas, CIT-D.R Respondent by: S/Shri Gautam Jain & Piyush K. Kamal, Adv. Date of hearing: 02/01/2020 Date of pronouncement: 13/01/2020 O R D E R PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the Revenue against the impugned order dated 17.07.2018 passed by Commissioner of Income Tax (Appeals)-XXVII, New Delhi for the quantum of assessment passed u/s.153 r.w.s. 143(3) for the Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.03.2009 Bahar Paper Pvt. Ltd. 1,00,000 50,00,000 1,02,000 06.10.2009 30.04.2008 Cosmos Real Estates Pvt. 1,00,000 50,00,000 398000 4,00,000 2,00,00,000 3. After detailed discussion, he held that the assessee has acquired shares from Kolkata based company who has acquired shares from KR Pulp & Paper Pvt. Ltd. and its group companies at a very high premium of value at Rs. 50/- and this entire arrangement was made to transfer/raised capital from M/s. KR Pulp & Paper Pvt. Ltd., group company of KR Pulp & Papers adopting route of share premium from Kolkata based companies and accordingly amount of Rs. 1,96,02,000/- was made. The relevant observation and the finding of the Assessing Officer read as under: "As it is clear from the above chart that 400000 shares were acquired by the companies like M/s Bahar Paper Pvt. Ltd., Blue Print Securities Pvt. Ltd. etc. of Rs. 2,00,00,000/- from M/s KR Pulp & Papers Ltd, group company of KR Pulp & Papers. These shares were acquired by Mr. Madho Gopal Agarwal, from mostly Kolkata based company, these Kolkata based company acquired share of from M/s KR Pulp & Papers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the light of this legal position. It is clear from the assessment order as well as submissions of the appellant that search and seizure action u/s.132(1) of the Act was undertaken by the Department in the case of appellant as on 08.07.2015 and on that date, assessment of A.Y. 2010-11 was completed assessment as the time period to issue notices u/s.143(2) for aforesaid year had already expired. Further, as mentioned above, no incriminating material was found in the case of the appellant during the search proceedings for making assessment, in this year. Therefore on both the counts, no addition could have been made by AO by disturbing the income disclosed in the return filed by appellant. In such situation, the addition made by AO, as mentioned above, for A.Y. 2010-11, is not sustainable and deserves to be deleted. I, therefore, delete the addition made by him and allow the grounds taken by the appellant." 5. Before us, the ld. CIT-DR submitted that the Assessing Officer in the impugned assessment order has incorporated the seized documents which pertain to transfer of shares only, and therefore, addition made by the Assessing Officer with regard to the share premium is wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of search. Here, in this case, admittedly no such incriminating material has been found qua the assessment year in question, therefore, the finding of the ld. CIT (A) is affirmed as the same is conformity with theprinciple laid down by the Hon'ble Jurisdictional High Court in the case of Kabul Chawla (supra) and Meeta Gutgutia (supra). 8. In the result, the appeal of the Revenue is dismissed". "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "D" : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA.No.6180/Del./2018 Assessment Year 2011-2012 The ACIT, Central Circle-19, Room No.104, ARA Centre, E-2, Jhandewalan Extn., New Delhi. vs. M/s. Kapis Impex LLP (Erstwhile M/s. Kapis Impex (P) Ltd.,), 301, Roots Tower, Community Centre, District Centre, Laxmi Nagar, Delhi - 110 092. PAN AARFK7460P (Appellant) (Respondent) Cross Objection No.10/Del./2019 Arising out of ITA.No.6180/Del./2018 - Assessment Year 2011-2012 M/s. Kapis Impex LLP (Erstwhile M/s. Kapis Impex (P) Ltd.,), 301, Roots Tower, Community Centre, District Centre, Laxmi Nagar, Delhi - 110 092. PAN AARFK7460P vs. The ACIT, Central Circl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice as to why the addition of Rs. 1,57,09,500/- should be made on account of unexplained investment under section 69B of the I.T. Act, 1961. The assessee explained before the A.O. that notice is vague, non-specific and in violation of principles of natural justice and relied upon Judgments of Hon'ble Delhi High Court in the cases of Kabul Chawla 380 ITR 573 (Del.) and in the case of Pr. Commissioner of Income Tax vs., Meeta Gutgutia 395 ITR 526 (Del.). The A.O. stated that these decisions cannot be accepted because the Departmental SLP is pending before the Hon'ble Supreme Court. The A.O. considering the material on record did not accept the explanation of assessee and made addition of Rs. 1,52,09,500/- on account of unexplained investment under section 69B of the I.T. Act, 1961. 2.1. The assessee challenged the addition before the Ld. CIT(A). The assessee has raised various submissions and also submitted that case is covered in favour of the assessee by the Judgments of Hon'ble Delhi High Court in the cases of Kabul Chawla and in the case of Meeta Gutgutia (supra). The Ld. CIT(A) accepted the contention of assessee and noted that no incriminating material were found in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or made known in the course of original assessment" 7.1. The Hon'ble Delhi High Court in the case of Meeta Gutgutia (supra) has held as under : "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the rival submissions and perused the material on record. The Hon'ble Jurisdictional Delhi High Court in the case of CIT vs., Kabul Chawla (supra) held as under : "Completed assessments can be interfered with by the A.O. 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" 9.1. The Hon'ble Jurisdictional Delhi High Court in the case of Pr. CIT vs., Meeta Gutgutia (supra) held as under : "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, no addition could be made against the assessee and Departmental Appeals have been dismissed." Same grounds of appeal have been raised in the present Departmental Appeal as have been considered in the above cases. No evidence of any unaccounted investment have been found during the course of search. The A.O. made addition merely on presumption. Thus, it is clear that when no assessment was pending in the case of assessee for the assessment year under appeal on the date of search and no incriminating material was found during the course of search so as to make the impugned addition, therefore, the issue is covered in favour of the assessee by the Judgments of Hon'ble Delhi High Court in the case of Kabul Chawla (supra) and Meeta Gutgutia (supra) as well as covered by the Orders of the Delhi Tribunal in the group cases of Madho Gopal Agarwal (supra) and M/s. Kapis Impex LLP (supra). We, therefore, do not find any justification to interfere with the Orders of the Ld. CIT(A). We confirm his Order and dismiss the Departmental Appeal. 10. Since the issue raised in the cross objection has not been decided by the Ld. CIT(A) and we have dismissed the Departmental Appeal, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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