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TMI Blog2021 (12) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... rage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in section 153C/153A would only mean income unearthed during search when the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Company Vs. DCIT dated 09.08.2014 has held that total income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer also noted that during the relevant year assessee has received amount from following corporate share applicant also:- S.No. Name and address Amount of share application 1. Sarvottam Commodities Pvt. Ltd. 28,16,000 2. Amarjyoti Vanijya Pvt. Ltd. 37,25,000 5. Thereafter, the Assessing Officer after detailed discussion has made the addition of Rs. 21,65,41,000/- u/s.68 and has also added alleged brokerage on such share capital of Rs. 10,82,700/- was taken the brokerage @ 0.5% on alleged bogus share application. One of the main argument before the ld. CIT (A) was that entire addition made by the Assessing Officer is not based on any incriminating material, and therefore, no addition could have been made in the impugned assessment year as the assessment for the Assessment Year 2011-12 had attained finality and it was not an abated assessment in terms of 2nd proviso to Section 153A. Apart from that, it also submitted that in the case by all the three share applicants, the proceedings u/s.153C was carried out wherein similar addition have been made in their hands or same issue has been considered and nothing adverse material or adverse finding relating to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unted funds of M/s Prakash Industries Ltd., have been invested in its group companies in the form of share capital / premium, through paper companies in the different financial years, as under:- S. No. Name of the recipient F.Y. Amount (in crore) 1. M/s. Amarjyoti Vanijya Pvt. Ltd. 2007-08 4.98 2. M/s. Sanskriti Tie up Pvt. Ltd. 2010-11 24.68 3. M/s. Sarvottam Commodities Pvt. Ltd. 2010-11 26.00 4. M/s. Rajnil Sales Pvt. Ltd. 2007-08 8.32 5. M/s. Ankit Nivesh Management Pvt. Ltd. 2007-08 9.74 6. M/s. Lokpriya Trading Pvt. Ltd. 2007-08 8025 Total 81.97 (v) In the assessment order, the A.O. mentioned that in Q. No. 36, asked in respect o blank cheque books of certain companies impounded from the premises of M/s Prakasl Industries Ltd. during the search action, Shri Ved Prakash Agarwal, chairman of M/s Prakash Industries Limited, at the time of recording of his statement on 31.10.2012 and concluded that these companies were managed and controlled by Shri Ved Prakash Agarwal, the chairman of M/s Prakash Industries Ltd. On perusal of the table in para 7 of the assessment order, the description of seized paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ved Prakash Agarwal, Chairman of M/s Prakash Industries Ltd. (vii) In the assessment order, the A.O. stated that the assessee has failed to prove the credits in its books of accounts in the shape of share capital/premium/share application money. Therefore, the A.O. was of the view that the amount of Rs. 21,00,00,000/- and Rs. 65,41,000/- is treated as unexplained and made addition of Rs. 21.65 lacs in the hands of the assessee. (viii) In the appellate proceedings, appellant has submitted that it has received Rs. 21,00,00,000/- from share applicants towards share capital / share premium which inter- alia includes Rs. 10,80,00,000/- from M/s Sanskriti Tie - Up Pvt. Ltd. and Rs. 10,20,00,000/-, from M/s Sarvottam Commodities Pvt. Ltd. The appellant company also received share application money of Rs. 28,16,000/- and Rs. 37,25,000/- from M/s Sarvottam Commodities Pvt. Ltd. and M/s Amarjoti Vanijya Pvt. Ltd. respectively which were refunded during the immediate next F.Y. 2011-12. The appellant further submitted that these investor companies, have made investment in appellant out of sale proceeds of shares held as investments / stock and furnished all the details relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also been submitted by the AR that the statement recorded of various persons, were bald / irrelevant and vague in nature as Shri Ved Prakash Agarwal himself had not taken the name of appellant company in which accommodation of entries received. Moreover, statements of Shri Ved Prakash Agarwal, chairman of M/s Prakash Industries Ltd. and Shri Shiv Shankar Banka, alleged entry operator have retracted their statement by filing letter before the ADIT(Inv.) on 02.11.2012 and 5.11.2012, therefore, these statement have loses its evidentiary value. (xi) In the appellate proceedings, the AR has submitted that it is corroborated from the documents seized from the premises of the appellant that they are not incriminating in nature, as alleged by the A.O. in the assessment order. It is further submitted by the appellant that it is proved from the material found during search at corporate office of M/s Prakash Industries Limited, Srivan, Bijwasan, New Delhi, that the investor companies, are completely controlled by Shri Ved Prakash Agarwal, Chairman of M/s Prakash Industries Ltd., without considering the fact that data including cheque books, secretarial and other records etc. seized du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / determination on transactions of alleged amount received as share capital / premium in the appellant company. It is further submitted by the AR that Statement of Shri Ved Prakash Agarwal, Chairman of the appellant company, cannot be considered "document seized", as contemplated u/s 132 of the Act. In view of the above submission, it is also submitted by the appellant that decision of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Kabul Chawla [2015] 61 Taxmann.com 412(Del), is squarely applicable to the facts of the appellant. From the above, following facts emerged: * The assessment proceedings was not pending at the time of initiation of action u/s 132 of the Act, 30.10.2012, * Reference made by the A.O. in the assessment order, is in respect of Annexure A- 1, A-3, A-5, A-7, A-12, A- 21, A-28 and BS-117 and LPS-2/8, which contains the trial balance, resolution, auditor reports, income tax retruns, ROC, TDS returns, cheque books and certified copy of resolutions pertaining to the assessee and * No incriminating documents were found during the course of search action u/s 132 of the Act, carried out at the premises of the appellant. Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi in the case of CIT Vs. Raj Pal Bhatia [2011], 333 ITR 315 (Delhi). As, I have already held (supra), while deciding in ground No.3, that in absence of any incriminating documents found during search action u/s 132 and also assessment was not abated at the time of initiation of action n/s 132 of the Act, on 30.10.2012, no addition can be made, in the assessment order passed u/s 153A of the Act. The facts of appellant are, squarely covered by the ratios laid down in the above 2 decisions of Hon'ble Jurisdictional High Court of Delhi. In view of these facts and circumstances, my considered opinion, now it is not required to adjudicate the grounds No. 5 & 6 and therefore, same are considered, as deemed to have been allowed." 7. After hearing both the parties and on perusal of the relevant finding given in the impugned orders as well as the material placed on record, we find that, first of all, nowhere in the assessment order the Assessing Officer has given any finding that impugned addition is based on any incriminating document found during the course of search. Whatever document which has been mentioned in the seized document, are ROC, TDS returns banks cheque books for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, accepted the contention of the assessee. 17) First objection of the learned Solicitor General was that it was improper on the part of the ITAT to allow this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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