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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 ..... documents which is also evident from the grounds raised by the Revenue wherein it has been stated that SLP has been filed against the decision of Hon ble Delhi High Court in the case of Kabul Chawla ( 2015 (9) TMI 80 - DELHI HIGH COURT] - any statement recorded of a different person in the case of another search cannot be held to be incriminating material for the purpose of assessment within the scope of Section 153A and Section 153C has held by the Ld. CIT (A) following the decision of Hon ble Jurisdictional High Court. Hon ble Supreme Court in case of CIT Vs. Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] wherein the Hon ble Apex Court upheld the order of the Tribunal that addition cannot be made for the assessment years for which there are no incriminating documents found during the course of search in the assessments framed u/s 153C. Seized incriminating material has to pertain to the assessment year in question and have co-relation, document-wise, with the assessment year. This requirement u/s 153C is essential and becomes a jurisdictional fact. It is an essential condition precedent that any money, bullion or jewellery or other valuable ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pretation 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 includes income unearthed during search and any other income. 7. That the grounds of appeal are without prejudice to each other. 8. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal. 2. From the perusal of the impugned order and the grounds raised by the Revenue, it is seen that the main issue involved is whether the additions made in the impugned assessment order are based on any incriminating material found during the course of search or not, and therefore, whether they are covered by the decision of Hon ble Jurisdictional High Court in the case of CIT Vs. Kabul Chawla, reported in 380 ITR 573 (Delhi), and other cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amarjyoti Vanijya Pvt. Ltd. 37,25,000 5. Thereafter, the Assessing Officer after detailed discussion has made the addition of ₹ 21,65,41,000/- u/s.68 and has also added alleged brokerage on such share capital of ₹ 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 assessee company has been found and therefore, in the hands of the assessee company such an addition is unwarranted. 6. Ld. CIT(A) after considering the entire gamut of facts and material on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. A-21 1 to 200 M/s Vanshi Farms Pvt Ltd M/s Amarjyoti Vanijya Pvt. Ltd M/s Deo Steel mines pvt. Ltd 8. A-22 1 to 112 M/s Ankit Nivesh management Pvt. Ltd M/s Spring Mercantile Pvt. Ltd M/s Makrana Tradecom Pvt. Ltd M/s Chaibasa Steel Pvt. Ltd. 9. A-23 1 to 173 M/s Goyal Plastic Pvt. Ltd M/s Prakash capital Services Pvt. Ltd 10 A-24 1 to 183 Sh. Kanha Agarwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bank statement showing the transactions, (c) detail of shares sold to buyer companies along with their PAN, addresses, name of scripts sold, amount and date of sale. (ix) In the appellate proceedings, appellant has further submitted that the A.O. himself concurrently assessed the cases of investor companies viz. M/s Sanskriti Tie Up Pvt. Ltd. and M/s Sarvottam Commodities Pvt. Ltd. u/s 153C of the Act, for the A.Y. 2008-09 to A.Y. 2012-13 and made addition of entire share capital / premium received by these companies in A.Y. 2008-09, in the hands of respective companies, which was ultimate source of investment in share capital of the appellant company during the F.Y. under consideration. Therefore, once the source of investment in share capital of the appellant company, has already been assessed and addition on the source of investment has also been made, making addition of the same again in the hands of the appellant, is bad in law, Moreover, the A.O. has not made any addition in the hands of both the investor companies for the A.Y. under consideration in the assessment order passed u/s 153C of the Act, in respect of amount credited by sale of investment as he himse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and other promoter group companies and lying at the premises of the appellant for the purpose of filing various statutory returns of these companies and signed blank cheque books of its group companies, were lying for paying fees, taxes and statutory dues etc. Therefore, mere availability of certain documents of promoter group companies in the premises of the appellant, does not prove that these documents were used to manipulate accounts of the investor companies. (xii) In the appellate proceedings, the appellant has further submitted that addition made by the A.O., merely on the basis of statement of Shri Ved Prakash Agarwal, Chairman of the appellant company recorded u/s 132(4) during the course of search seizure operation u/s 132 of the Act,cannot be considered as documents seized as contemplated u/s 132 of the Act in any parlance. The AR also relied upon the judgment of Hon ble Jurisdictional High Court of Delhi in the case of Commissioner of Income-tax v. Raj Pal Bhatia [2011] 333 ITR 315. (xiii) In the appellate proceedings, the appellant has further submitted that in the assessment / reassessment under the provisions of section 153C r.w.s 153 A of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act dated 31.3.2015, are not based on any incriminating document. As such, facts of the appellant are squarely covered by the ratio laid down by Hon'ble Jurisdictional High Court of Delhi, in the case of CIT Vs. Kabul Chawla(supra). Similarly, the statement recorded u/s 132(4) of the Act, is not a document, as has been held by the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Raj Pal Bhatia [2011], 333 ITR 315 (Delhi). In view of the above, I agree with the arguments of the appellant and therefore, no addition can be made, in absence of any incriminating document. 6.1. Apart from that, he has again after detailed discussion has reiterated this issue while dealing on merits vide paragraph 7.3. 7.3 I have carefully considered assessment order, written submission, case laws relied upon and oral arguments of Ld.AR. The objections/arguments of the appellant are discussed as under:- (i) In this case, assessment u/s 153A/153C of the Act, was completed vide order dated 31.3.2015, at total income of ₹ 2,08,81,55,215/-, as against returned loss of ₹ 94,68,485/-, after making the following additions on account of: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of search. Whatever document which has been mentioned in the seized document, are ROC, TDS returns banks cheque books for payment of taxes, fees, etc. pertaining to the assessee. Ostensibly, such documents cannot be held to be incriminating and ld. CIT(A) has already noted that none of these documents are the basis or premise of the impugned additions. Another fact noted in the appellate order is that the Assessing Officer himself has concurrently assessed all the investor companies right from the Assessment Years 2009-10 to 2012-13 and similar additions have been made in respect of the same amount in their hands which again does not warrant any addition in the hands of the assessee company. The documents as mentioned in the seized document has already been held to be not incriminating in nature which has been duly explained by the assessee and appreciated by the ld. CIT(A) in the foregoing paragraphs as noted above. Apart from that, even before us there has been no rebuttal that the impugned additions are based on any incriminating seized documents which is also evident from the grounds raised by the Revenue wherein it has been stated that SLP has been filed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 19) We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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