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TMI Blog2021 (1) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 27-1-2021 - SHRI R. K. PANDA , ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER Department by : Smt. Sushma Singh, CIT (DR) Assessee by : Shri Ved Jain Advocate Shri Ashish Goel, CA ORDER PER R. K. PANDA, AM This appeal filed by the Revenue is directed against the order dated 29.11.2016 of the Ld. CIT(A) 23 New Delhi relating to assessment year 2011-12. The assessee has filed the Cross Objection against the appeal filed by the Revenue. For the sake of convenience these were heard together and are being disposed of by this common order. 2. Facts of the case, in brief, are that the assessee is group concern of Mauria group of companies. It derives income from manufacturing of Sweets and Restaurant activities. It filed its return of income on 27th September 2011 declaring NIL income. A search and seizure operation u/s 132 of the IT Act 1961 was conducted in the case of M/s. Mauria Udyog Ltd. and its group concern and residential/factory premises of partners, directors and proprietors of the group on 7th August, 2013. The AO issued notice u/s 153A of the Act on 5th February, 2015 which was duly served on the assessee. In response t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following grounds :- 1. The order of Ld. CIT(A) is not correct in law and on facts 2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of ₹ 2,50,00,000/- made by AO on account of unexplained share application money. 3. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal. 7. The assessee has raised the following grounds in the cross objections:- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT (A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition despite the fact that the proceedings initiated under Section 153A are bad in law in the absence of any incriminating material belonging to the assessee being found during the search. 3. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the addition despite the fact that addition made by AO are legally unsustainable in the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report. However the AO failed to comment on the facts available in the affidavit. 10. So far as amount received from Shri Ajay Chaman Lal Kanwal is concerned he submitted that Shri Ajay Chaman Lal Kanwal vide his letter dated 8th March 2016 had submitted various details in response to notice u/s 133(6) such as details of investment made by him in the assessee company, copy of his income tax return, copy of his bank statement reflecting the payment made to the assessee company to the tune of ₹ 1 crore, copy of share certificate, copy of notice of assessment of the Inland Revenue Authority of Singapore with the assessable income of Singapore Dollar 136289. He accordingly submitted that once the assessee has discharged the onus cast on it by proving the identity and creditworthiness of the share applicant and the genuineness of the transaction, no addition u/s 68 could have been made. Relying on various decisions, he submitted that addition can not be made merely on surmises ,suspicion and conjectures. He accordingly submitted that the Ld. CIT(A) has rightly deleted the addition. 11. Ld. DR on the other hand strongly opposed the grounds raised by the assessee in the cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity Company Ltd. vs CIT 199 ITR 351. Further the decision of the Tribunal in the case of Neetee Clothing Pvt. Ltd. (supra) has been overruled by Hon ble Delhi High Court in the case of Fast Booking India Pvt. Ltd. in ITA No. 334 to 338, 339, 342/2015 order dated 2nd September, 2015. Referring to various other decisions filed in his synopsis, Ld. Counsel for the assesee submitted that after considering the decision of Delhi Bench of the Tribunal in the case of Neetee Clothing Pvt. Ltd. (supra) the coordinate bench of the Tribunal has held that the whole purpose of preferring the appeal and the objections and raising new ground for the first time before the appellate authority is to correctly assess the tax liability of the assesse. He accordingly submitted that in view of the principle laid down by the Jurisdictional High Court the legal issue raised in the cross objection has to be admitted and adjudicated on merit. 14. We have heard the rival arguments made by both sides, perused the orders of the AO and Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. Before adjudicating the issue on merit as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. MKR Construction Pvt. Ltd. reported in 2017 12 TMI 565. In view of the above decisions cited supra the decision relied by the Ld. DR are distinguishable and are not applicable to the facts of the present case. We, therefore, reject the arguments advanced by the Ld. DR regarding maintainability of the grounds in the cross objection and proceed to adjudicate the same. 15. A bare perusal of the assessment order shows that the addition is not based on any incriminating material found as a result of search but is based on the verification of the balance sheet of the assessee. The Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has held that in absence of any incriminating material found as a result of search, no addition can be made in a completed assessment. The Hon ble Delhi High Court following the above decisions has taken a similar view in the case of PCIT vs. Best Infrastructure (India) Ltd. PCIT vs Baba Global Ltd. (supra) and PCIT vs. Dharampal Premchand Ltd. (supra).Since the addition in the instant case is not based on any incriminating material found as a result of search in case of the assessee and it is a completed assessment, therefore, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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