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TMI Blog2021 (12) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notice under s.148 of the Income-Tax Act, 1961 and framing the reassessment in the case of the appellant company without considering the material fact that the issuance of the notice under s.148 of the Act by the AO, itself, was bad-in-law and void ab initio. 2b). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notice under s.148 of the Income-Tax Act, 1961 and framing the reassessment in the case of the appellant company without considering the material fact that having withdrawn the notice issued earlier under s.153C of the Act to the appellant, for the same assessment year, there was absolutely no justification for the AO to restart the assessment proceedings, earlier dropped, under the garb of the provisions of s.147 of the Act. 2c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO in issuing notice under s.148 of the Income-Tax Act, 1961 and framing the reassessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant company during the year under consideration. 4c). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 10,63,37,500/- made by the AO in the appellant's income, without considering and appreciating the material fact that during the previous year under consideration, the appellant had neither made/ incurred any unexplained investment/ expenditure nor it had made any unaccounted receipts chargeable to tax. 5a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 1,50,00,000/- made by the AO in the appellant's income, on account of alleged unexplained cash credit under s.68 of the Act in respect of certain unsecured loans appearing in the audited balance sheet of the appellant company for the relevant previous year, without considering and appreciating the material fact that such issue was not the subject matter of notice under s.148 of the Act and further, during the course of the assessment proceedings, there was no material before the AO from which he could have presumed that such cash credit represents the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Assessing Officer by himself had not formed any belief as regard to escapement of any income chargeable to tax in the hands of the appellant and instead, merely on the finding of some other Assessing Officer in some other case, had assumed the jurisdiction for issuance of notice under s.148 of the Act. 2d). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not considering the material fact that in the case of some other assessee namely Shri Mohanlal Chugh, which has been made the very basis for issuance of notice under s.148 of the Act to the appellant, the findings were not to the effect of payment or any unexplained investment by the appellant but, on the contrary, the findings were relating to the alleged receipt of money by the above named Shri Mohanlal Chugh on behalf of the appellant company thereby making the very foundation of belief, and, consequently, the notice issued under s.148, as bad-in-law and void ab initio. 3a). That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs. 10,63,37,500/- made by the AO in the appellant's income, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Annexure A/3, containing the payment details, aggregating to a sum of Rs. 18,42,50,000/- made to Shri Mohanlal Chugh, one of the then directors of the appellant company, were found mentioned which were correlated with notings in one Diary inventoized as BS-8, which was also seized from the premises of the PDPL. Thereafter, the then Ld. Assistant Commissioner of Income-Tax - 3(1), Indore issued notices u/s. 153C of the Act for A.Y. 2008-09 and A.Y. 2009-10, both dated 14.11.2011. In response to notices issued u/s. 153C, the appellant company, vide its two letters both dated 19.12.2011 intimated the AO that it had already furnished its returns of income u/s. 139 of the Act and further, made a request that the returns so furnished u/s. 139 be treated as the returns furnished in compliance to notices u/s. 153C. Thereafter, by way of two separate letters, both dated 19.12.2011, the Ld. ACIT-3(1) withdrew the earlier notices issued u/s. 153C of the Act for both the A.Y. 2008-09 & A.Y. 2009-10. Subsequently, the Ld. ACIT-5(1) issued a notice u/s. 148 of the Act to the appellant for A.Y. 2008-09 on 19.03.2015 and the ld. ACIT-3(1) issued a notice u/s. 148 of the Act to the appellant for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d certain additional evidences in form of a separate paper book running from page nos. 104 to 428 with a prayer of admission of such additional evidences under Rule 29 and Rule 18(4) of the Income-Tax (Appellate Tribunal) Rules, 1963. A copy of the paper book containing the additional evidences was also provided by the appellant to the Revenue. The bench had asked the CIT(DR) to furnish his comments/objections, if any, upon the admissibility of the additional evidences. In response, the office of the CIT(DR) filed a copy of the comments of the concerning assessing officer i.e. ITO- 5(1), Indore dated 10.02.2021 along with its covering letter dated 23.02.2021 which are perused and placed on record. 9. Upon going through the comments of the concerning ITO, we find that the Revenue has conceded that the additional evidences so furnished by the appellant are already available on the record and many of these additional evidences were already considered by the AO while passing the assessment orders. Thus, we find no serious objection of the Revenue against furnishing of the additional evidences by the appellant and accordingly, the same are admitted. 10. We will first take ground no. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were overruled by the AO by passing two separate orders i.e. on 23-12-2015 for A.Y. 2008-09 & on 29.12.2015 for A.Y. 2009-10. 13 Before the ld. CIT(A) also, the appellant company challenged the reopening of assessment u/s.148 by the AO, but the CIT(A) did not find any merit in the contention of the appellant. The Ld. CIT(A) has given a finding that the AO had categorically established that in the appellant's case, after recording the reasons and after taking due approval from his Range Head, the notices u/s. 148 were issued. The reasons were recorded to the effect that the income of the appellant had got escaped assessment in the form of receipt made by one of its directors, of a sum of Rs. 10,63,37,500/-, on behalf of the appellant company, which were not so recorded in the books of account of the appellant. The CIT(A) also found from the assessment records that the copies of the reasons so recorded were also provided to the appellant company on 04.12.2004 and according to the chronology of the events so recorded by the AO, clearly indicates that the appellant's objections were replied by the AO vide letters dated 15.01.2016. The ld. CIT(A) also found that the appellant was furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi) (HC) iv) CIT vs. Insecticides (India) Ltd. (2013) 357 ITR 300 (Del.)(HC) v) CIT v/s Meenakshi Oversea's Pvt Ltd (2017) 395 ITR 677(Del) (HC) vi) CIT vs. Fair Invest Ltd. (2013) 357 ITR 146 (Del.)(HC) vii) Sarthak Securities Co. (P.) Ltd. vs. ITO (2010) 329 ITR 110 viii) PCIT v. Manzil Dineshkumar Shah[2018] 95 Taxmann.com 46 (Guj) HC) ix) Amar Jewellers Ltd. v. Dy. CIT (2018) 254 Taxman 384 (Guj. )(HC) x) Deepraj Hospital (P) Ltd. v. ITO, 41/AGRA/2017, AY: 2010-11 Dtd:01/06/2018 (Agra)(Trib) xi) ITO v. Reliance Corporation (2017) 55 ITR 69 (SN) (Mum.) (Trib.) 3.00 ENTIRE REASONS FOR RE-OPENING ARE BASED ON ADDITIONS MADE BY SOME OTHER AO IN SOME OTHER ASSESSEE That, from the statement of reasons recorded by the learned AO [kindly refer PB Page No. 18 & 19 for A.Y. 2008-09], it would be observed by Your Honours that the entire premises of the learned AO for issuance of the notice under s.148 was hovering around the additions made by some other AO in the case of some other assessee on protective basis. It is submitted that nowhere from the statement of reasons, it is discernible that the learned AO, at his own end, made any effort to verify the veracity of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of his own but had merely relied on borrowed satisfaction. Therefore when none of the said material was independently examined by the AO so as to put such material to the assessee under section 142(3) or for that to even to sustain the addition under section 143(3) of the Act then how the same could have been utilized for reopening the assessment under section 148 of the Act in the assessee's case. It is submitted that what could not have been done directly was not permissible to be done obliquely, meaning thereby, whatever is prohibited by law to be done could not have been legally effected by an indirect and circuitous contrivance. Reliance is placed on the following judicial pronouncements: i)CIT Vs. Kalvinator of India Ltd. (2002) 256 ITR 1 (Del)(FB) ii)Windson Electronics (P) Ltd.& Anr.Vs.UOI&Ors (2004) 269 ITR 481 (Cal) iii)Smt. Durgabati & Smt.Narmadabala Gupta Vs. CIT,(1956)30ITR 101(Pat); iv)Raja Yadvendra Datt Dube Vs. State of Uttar Pradesh(1964)54ITR506 (All) v) Babul Lath Vs. ACIT (2002) 83 ITD 691 (Mum) 6.00 REASONS RECORDED BY THE LEARNED AO WERE NOT REASONABLE AND THE SAME WERE VAGUE IN NATURE Without prejudice to the above, it is further submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the appellant company for the relevant assessment years is that a search and seizure operation under s.132 of the Act was carried out on a group of assessees namely 'Satellite Group' on 19-11-2009 and during the course of search in premises of M/s. Phoenix Devcons Pvt. Ltd., some loose papers inventorized as LPS A/3 were seized. On a perusal of the page No. 25, 20 & 21 of LPS A/3, the payment details made to Shri Mohanlal Chugh, one of the then directors of the appellant company, were found mentioned which were correlated with notings in the Diary BS-8 also seized from the premises of above named company. Further, as per the reasons, on a perusal of the details mentioned on page nos. 182, 184 & 186 of LPS A/3, some payments were made to Shri Mohanlal Chugh, Indore. 1.01 NOTICES U/s. 153C ISSUED TO THE APPELLANT On an earlier occasion, immediately after the aforesaid search, Notices under s.153C of the Act for the relevant assessment years were issued to the assessee company by the ld. ACIT-3(1), Indore on 14-11-2011 [kindly refer Paper Book (PB) Page No. 10 for A.Y. 2008-09]. In response to such Notices u/s. 153C, the appellant vide its letters dated 19-12-2011, int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s.153C have been initiated and subsequently dropped, then, the notice under s.148 so issued was unjustifiable and the assessment order is not liable to be sustainable in the eyes of law. A copy of the judgment is being enclosed herewith for kind perusal and record of Your Honour, as Exhibit P-1. 3.03 Hon'ble ITAT Delhi Bench "A" in the case of Shri Adarsh Aggarwal Delhi Vs. ITO, Ward-61, Delhi in ITA No. 777/Delhi/19 for the A.Y. 2010-11 vide order dt. 14/01/2020 by following the decisions of Hon'ble ITAT Bench Visakhapatnam in the case of G. Koteswar Rao and the Hon'ble ITAT Amritsar Bench in the case of ITO Vs. Arun Kumar Kapoor (2011)140 TTJ 249 (Asr) held in para 8.2 as under: "8.2. Since Shri Naresh Sabharwal has retracted from the fact of taking any loan from assessee and genuineness of the agreement is itself in doubt which was found during the course of search and is not corroborated by any evidence or material on record, therefore, such photo copy of the agreement cannot be relied upon by the A.O. for the purpose of initiating the re-assessment proceedings in the case of the assessee. It is an admitted fact that in the present case the agreement in question was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that the provisions of section 153C are exactly similar to the provisions of section 158BD in block assessment proceedings. Thus, considering the entire facts and the circumstances of the case, the Commissioner (Appeals) was fully justified in quashing the reassessment order." 8.3. The other decisions relied upon by the Learned Counsel for the Assessee are on the same proposition. Considering the facts of the case in the light of above decisions, it is clear that loan agreement was found during the course of search in the case of Shri Naresh Sabharwal which is handed-over to the A.O. of the assessee and addition is made only on that basis. Therefore, there was no justification for the A.O. to have been initiated proceedings under section 147/148 of the I.T. Act. The correct course of action would have been to proceed against the assessee under section 153C of the I.T. Act. Therefore, initiation of re-assessment proceedings under section 147/148 of the I.T. Act is wholly invalid, void and bad in Law. Since the correct procedure have not been adopted by the A.O. and there is no justification to initiate the re-assessment proceedings against the assessee, we set aside the Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings, earlier dropped, under the garb of the provisions of s.147 of the Act and therefore, the assessment proceedings as well as the assessment order passed in pursuance thereof deserves to be knocked down on this legal count alone." 15. The gist of the appellant's submission for ground nos. 2(a) and 2(c) is that the appellant had furnished its original return of income for both the assessment years under s. 139 of the Act and the returns so furnished were duly processed u/s. 143(1)(a) of the Act without any adjustment in the returned income of the appellant and therefore, without having any material to form a reason to believe that certain income for the relevant assessment years got escaped to assessment, no notice u/s. 148 could have been issued. It has further been contended by the AR of the appellant that in the instant cases, the AOs issued the notices u/s. 148 on the basis of borrowed satisfaction inasmuch the very basis for issuance of the notices were findings given by some other assessing officer while framing the assessment in the case of some other assessee i.e. Shri Mohanlal Chugh for A.Y. 2009- 10. The AR further contended that the reasons recorded by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived certain payments on behalf of the appellant company against the sale of land of 'Phoenix Green Project'. Based upon such seized documents, we find that the assessing officer i.e. ACIT-3(1), Indore framing the assessment u/s. 153A of the Act in the case of Shri Nilesh Ajmera, one of the group assesses of Satellite Group, on 30.12.2011, for A.Y. 2008-09, had reached to a conclusion that Shri Nilesh Ajmera, who happened to be one of the directors of some other company namely M/s. Phoenix Leisure and Lifestyle Pvt. Ltd. (in short 'PLLPL'), had made certain payments aggregating to a sum of Rs. 21,26,75,000/- to Shri Mohanlal Chugh on behalf of M/s. Shivalika Realities Pvt. Ltd., the appellant company here. The AO of Shri Nilesh Ajmera reached to the conclusion that the payment for the aforesaid sum of Rs. 21,26,75,000/- was made by Shri Nilesh Ajmera, in his individual capacity, in two assessment years viz. A.Y. 2008-09 and A.Y. 2009-10 and accordingly, an addition of Rs. 10,63,37,500/- was made by him in each of these two assessment years. We find that the assessing officer i.e. the ACIT -3(1), Indore, framing the assessment u/s. 153A r.w.s. 143(3) of the Act in the case of Shri N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years and the same are hereby Dismissed. 19. Now, coming to the ground no. 2(b) raised by the appellant. We find that undisputedly, during the course of the search u/s. 132 in the case of the Satellite Group, certain documents were seized but, there is no finding by any of the authorities that the documents so seized were not belonging to the person who were so searched or from whose possession these were found. In particular, there is no finding that the documents so seized were belonging to the appellant company. We are conscious that in the pre-amended provisions of s. 153C of the Act, the provisions of s. 153C could have been invoked only if certain documents belonging to a person other than the person searched are found and seized u/s. 132 from the premises of the searched person. So, at the relevant time, the belongingness of the document seized to a third person was a sine- qua-non for invoking the provisions of s. 153C of the Act against such person. We find that the amendment in section 153C of the Act dispensing with the requirement of belongingness to any books of accounts or documents with the third person has come into force only by the Finance Act, 2015 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in a project referred with different names such as 'Pheonix Green', 'Phenox Grande', 'Zenith Tower' etc. and from the various loose papers found during the search it was seen that Shri Nilesh Ajmera, during the financial year relevant to A.Y.2009-10, had paid an aggregate amount of Rs. 10,63,37,500/- to Shri Mohanlal Chugh for acquiring land at Pipliyakumar. Accordingly, as per the AO of the appellant company, the then AO of Shri Mohanlal Chugh, passing order u/s. 143(3) of the Act for A.Y. 2009-10, made an addition of Rs. 10,63,37,500/- in the hands of Shri Mohanlal Chugh on protective basis and had also proposed the additions in the hands of the appellant company on substantive basis. The gist of the appellant company's submission before the AO was that no-where in the subject documents, the assessee's name is appearing and the opinion formed by the AO has no relevance with the assessee's case. The AO, in his assessment order, rebutted the contentions of the appellant by giving a finding that the structure of the appellant company during the period relevant to A.Y. 2008-09 and A.Y. 2009-10 was that the directors of the appellant company were at the helm of affairs of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the abstract of the Assessment Order passed in the case of Shri Mohanlal Chugh, one of the directors of the appellant company, it has been averted that Shri Mohanlal Chugh has received certain payments on behalf of the appellant company which was not so recorded in the books of account of the appellant company. 3.00 It is submitted that the subject incriminating loose papers, as referred to by the ld. AO in his body of assessment order and which became the very basis for issuance of notice under s.148 of the Act to the appellant, were found during the course of the search and seizure operations under s.132 of the Act carried out in the case of Satellite/ Phoenix Group on 19-11-2009. By making a reference of such loose papers, the concerning Assessing Officer passing the assessment order under s.153A on 30-12-2011 for A.Y. 2008-09 and A.Y. 2009-10 in the case of Shri Nilesh Ajmera, one of the assessees of the Satellite/ Phoenix Group, had made additions amounting to Rs. 10,63,37,500/- each in two assessment years viz. A.Y. 2008-09 and A.Y. 2009-10 by holding that Shri Nilesh Ajmera, a director of M/s. Phoenix Leisure & Lifestyle Pvt. Ltd., had paid the total sum aggregating to Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isure & Lifestyle Pvt. Ltd.. Against such Assessment orders, both the above named assessees preferred appeals before the ld. CIT(A) and then, being unsuccessful, before this Hon'ble Bench of the Tribunal. 2.00 ORDER OF HON'BLE ITAT, INDORE BENCH IN THE CASE OF SHRI NILESH AJMERA AND FINDINGS OF THE HON'BLE BENCH Your Honours, this Hon'ble Bench in its common Order, for A.Y. 2007-08 to A.Y. 2010-11, in Appeal Nos. IT(SS)A Nos. 182 to 184/Ind/2013 dated 11-05- 2016, passed in the case of Shri Nilesh Kumar Ajmera, has at length, dwelt upon the issue. A copy of relevant abstract of the Order so passed by this Hon'ble Bench in the case of Shri Nilesh Ajmera, who was alleged to have made certain unaccounted payments to the appellant through its director Shri Mohanlal Chugh, is placed at Page No. 391 to 409 of the Additional Paper Book. 2.01 Your Honours, this Hon'ble Bench, while adjudicating the Ground Nos. 2(a) & 2(b) of Shri Nilesh Ajmera for A.Y. 2008-09 against the addition of Rs. 10,63,37,500/-, has given a detailed finding at internal Page Nos. 29 to 44 of the Order [kindly refer PB Page No. 394 to 409]. 2.02 Your Honours, this Hon'ble Bench, while passing the Order in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilesh Ajmera through his company, with the appellant company, came to an end, Shri Nilesh Ajmera handed over the entire project on as-is-where-is basis and the appellant company was given the responsibility of repaying the on-money collected by Shri Nilesh Ajmera from various customers for making bookings of the flats in the project. It is submitted that it is not the case of the AO that the appellant company had made any sales of any flats in the proposed project during the relevant previous year and therefore, by no stretch of imagination, any alleged on-money can be subjected to tax in the hands of the appellant company for the year under consideration." 25. The gist of the appellant's submission is that the AO had recorded the reasons on the premises that Shri Mohanlal Chugh, on behalf of the appellant company, had received certain payments against the land of Phoenix Green Project, situated at Pipliyakumar, which was reflected in the various documents, seized and inventorized during the course of the search and seizure operations carried out in a group of assesses namely Satellite Group on 19.11.2009. In the reasons recorded, it has further been contended that during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5,50,00,000/- was paid in cash. The appellant has also submitted that first of all, the findings given by this Bench in the case of Shri Nilesh Ajmera are not binding upon it but, even if for the sake of arguments, such findings are accepted by the it, then, the quantum of estimated receipt of on-money in the hands of the appellant company could not have been to the extent of Rs. 21,26,75,000/- but it would get restricted to sum of Rs. 5,50,00,000/- only. The appellant has also contended that since the loose papers and other papers were found and seized from the premises of some other persons, the same cannot be taken as an evidence against the appellant company u/s. 292C of the Act. Finally, the appellant company submitted that even if it is assumed that it had received any sum of Rs. 5,50,00,000/- in cash from Shri Nilesh Ajmera, out of such receipts of Rs. 5,50,00,000/-, receipts of on-money aggregating to Rs. 4,87,58,350/-, made by Shri Nilesh Ajmera on behalf of the appellant company has already been subjected to tax in the case of yet another company i.e. PLLPL as per the findings given by this Bench in the case of Shri Nilesh Ajmera (supra). It has further been contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be directed to be made in the hands of Shri Mohanlal Chugh who had received the payments from Shri Nilesh Ajmera. According to the ld. CIT(DR), the Income-Tax Appellate Tribunal has got wide powers u/s. 254 of the Act and it would be within its statutory powers to give any such direction. 28. We have heard rival contentions and perused the records placed before us, duly considered the orders of both the lower authorities and paper books filed by the appellant. We have also gone through the copies of the statements of reasons recorded by the AO before issuance of the notices u/s. 148 to the appellant. We find that in the instant cases, two different AOs have issued two separate notices u/s. 148 of the Act to the appellant for two different assessment years under appeal. However, from a perusal of the copies of the statements of reasons recorded as placed in the paper book for A.Y. 2008-09 at page no. 18&19 and for A.Y. 2009-10 at page no. 25 & 26, we find that the contents as well as the language recorded by both the AOs are exactly the same. We also find that for both the assessment years, the concerning AOs have reproduced some abstract of an assessment order passed u/s. 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merits, the assessee's objection is that its name does not figure in the documents referred to in the reasons recorded. This is an argument for the sake of argument only. The structure of the company during the period relevant to the A.Y. 2008-09 and 2009-10 was such that (Name of directors) were at the helm of affairs of the company, who have acted for and on behalf of the assessee company. In the proposed purchase of land and payment of cash in part consideration thereof. So far as the argument that the assessee did not purchase any land during these two periods is concerned: it is an immaterial factor. The crucial issue was whether the land was purchased or not during the period and ultimately who utilized this land. From the face of record it is evident that ultimately the land under reference has gone to the coffers of the assessee which was apparently purchased by Chughs and Ajmeras for and on behalf of the assessee. As regard the plea raised by the assessee relating to the seeking of approval from Town and Country Planning Department: it is again an argument without merits. Application for approval by Town and Country Planning can be made when raw land is in the possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) 60 DTR 77 (Delhi), the Hon'ble High Court of Calcutta in the case of Hotel Regal International & Anr. Vs. ITO (2010) 320 ITR 573 (Cal.), the Hon'ble High Court of Patna in the case of Dy. CIT vs. Takshila Education Society (2016) 284 CTR 306 (Pat.), the Hon'ble Gujarat High Court in the case of CIT-II vs. Mohmed Juned Dadani (2013) 355 ITR 172 (GujHC), the Hon'ble Madras High Court in the case of Tractors and Farm Equipment Ltd. vs. ACIT 2018 (12) TMI 1217 (MadHC) and the Hon'ble Bombay High Court in the case of Pr. CIT vs. M/s. Lark Chemicals P. Ltd. 2018 (2) TMI 1780 (BomHC). Thus, on this legal plea, the addition of Rs. 10,63,37,500/- made by the AO in the income of the appellant for both the assessment years under appeal viz. A.Y. 2008-09 and A.Y. 2009-10 are not legally sustainable. However, in the present case we find that through the ground no. 2(d) for both the assessment years, the appellant has challenged the validity of the notices u/s. 148 of the Act and according to us, in this case although the assessment orders were not passed in accordance with the law, but, the notices were rightly issued on a correct premise and basis taken by the AOs. Further, while adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and only after establishing such investment, based upon the explanation regarding the sources of such investments, any addition can be made. Thus, finding of some investments in the year of assessment is a sine-qua-non for invoking the provisions of s. 69 or 69B of the Act. However, in this case, although the assessing officer has made the addition on the basis that the appellant had parted with certain sum for purchase of some land at Pipliyakumar, but, such purchases or investments have not been established by him and no material to this effect has been brought by him on records. On the contrary, from the Audited Financial Statements of the appellant company for A.Y. 2008-09 and A.Y. 2009-10, as filed in the respective paper books by the appellant, we find that in the balance sheets for both the years investments in land have been shown as opening balances at Rs. 55,06,895/- and in none of the years, any purchases of any land or any advances against purchase of any land has been shown. Even from a table giving the details of land holding by the appellant company, given in the assessment orders itself, we find that even according to the AO, most of the lands were purchased by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be said to have made unexplained investment to the extent of Rs. 73,41,650/- only [i.e. Rs. 11,00,000/- + Rs. 62,41,650/-] equally in two assessment years and to this extent only, addition is sustained. The remaining addition so made by the AO and confirmed by the CIT(A) is deleted." 34. We thus find that in the case of Shri Nilesh Ajmera, the finding of this Bench was to the effect that the appellant had received a sum of Rs. 5,50,00,000/- in cash from Shri Nilesh Ajmera and the finding was not to the effect of making of any payment by the appellant company to Shri Nilesh Ajmera or his company, as wrongly inferred and interpreted by the AO in the present appeals. Even otherwise, without going into the quantum of the unaccounted receipts in the hands of the appellant company from the order of this Bench passed in the case of Shri Nilesh Ajmera, it can safely be concluded that the total quantum of the payments by Shri Nilesh Ajmera to the appellant or to Shri Mohanlal Chugh was not to the extent of Rs. 21,26,75,000/- but, the same was restricted to a sum of Rs. 5,50,00,000/- only and again out of Rs. 5,50,00,000/-, a sum of Rs. 4,87,58,350/- was held to be in the form of on- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 251 of the Act. 36. We also do not find any merit in the contention of the ld. CIT(DR) that in the present case, if the addition could not be sustained in the hands of the appellant company, then, this Bench should make a direction for making the corresponding addition in the hands of Shri Mohanlal Chugh who made the actual receipts of the funds. In our view, first of all, there is no maxim known to the law that for the mistakes committed by the AO of an assessee, the untaxed amount should be added in the hands of other assessee. Even otherwise, we find that the subject land in respect of which the payments were made by Shri Nilesh Ajmera are in the ownership of the appellant company and Shri Mohanlal Chugh was only one of the functionaries of the appellant company and therefore, any receipts by Shri Mohanlal Chugh from Shri Nilesh Ajmera has to be regarded only as the receipts of the appellant company and not that of Shri Mohanlal Chugh in his individual capacity. 37. In view of the findings given above, the additions of Rs. 10,63,37,500/- made by the AO on the ground of unaccounted payment, for both the assessment years viz. A.Y. 2008-09 and A.Y. 2009-10 are hereby deleted. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the AO from which he could have presumed that such cash credit represents the escaped income of the appellant. It shall be appreciated that the action of the AO in making an addition in the appellant's income on an issue which was not the subject matter for issuance of Notice under s. 148, is patently illegal, unwarranted and deserves to be knocked down on this legal count alone. 2.00 DETAILS OF UNSECURED LOANS Without prejudice to the above, on merits, it is submitted that during the previous year relevant to A.Y. 2008-09, the appellant company has received fresh unsecured loans aggregating to a sum of Rs. 1,50,00,000/- from two persons namely Shri Nilesh Ajmera at Rs. 1,00,00,000/- and M/s. Phoenix Devcons Pvt. Ltd. at Rs. 50,00,000/-. The complete details as regard to the unsecured loans are given through a separate statement placed at Page No. 421 of our Additional Paper Book. 2.01 DOCUMENTARY EVIDENCES IN SUPPORT OF THE UNSECURED LOANS In order to establish the identity and creditworthiness of the loan creditors and as also, the genuineness of the loan transactions, the appellant company has furnished copies of confirmation letters duly signed by the loan creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,50,00,000/- has been given by Shri Nilesh Ajmera/ his company in the form of the subject unsecured loans only. In view of the above facts and circumstances of the case, it is submitted that the addition of Rs. 1,50,00,000/- so made by the AO under s.68 of the Act deserves to be deleted in its entirety." 43. The crux of the appellant's submission it that the issue of unsecured loans, on which the subject addition of Rs. 1,50,00,000/- has been made by the AO was not a subject matter at the time of re-opening the case of appellant. The appellant has agitated that at the time of reopening its case, the AO did not have any material from which he could have presumed that the credits in the form of unsecured loans represents the escaped income of the appellant. The appellant has further contended that without making addition on the sole issue, on which the case of the appellant was reopened, the AO was not justified in making the addition on an altogether different ground. Further, on merits of the case, the appellant has contended that it had now, furnished all the necessary details such as complete name, address and PAN of the creditors and as also, certain documentary evidences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason for reopening the case of the appellant was that Shri Mohanlal Chugh, on behalf of the appellant company had received a sum of Rs. 10,63,37,500/- from Shri Nilesh Ajmera for sale of land at Pipliyakumar. We find that nowhere in the statements of reasons recorded, the AO has pointed out that how the subject unsecured loan of Rs. 1,50,00,000/- has escaped assessment. Furthermore, we find that the addition made by the AO in the case of the appellant company for A.Y. 2008-09 is on an altogether different issue than the issue for which the reasons were recorded by the AO before issuing notice u/s. 148 of the Act. We further find that in the instant case, the notice u/s. 148 was issued on the basis of escapement of income in the hands of the appellant which was emanating in the form of making of unaccounted receipts in respect of some land at Pipliyakumar, but, eventually, we found that no addition has been made on such ground but, the addition has been made on an altogether different ground of making of the unexplained investment in purchase of the land. Although, the settled position of the law is that an assessee officer is eligible to make the addition on the issues in additio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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