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TMI Blog2022 (3) TMI 762X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years 2010-11 and 2012-13 and not for assessment year 2009-10 or 2011-12. Even the documents pertaining to assessment year 2010-11, we find that it is annual report of M/s. Panchmukhi Management Services Pvt. Ltd. as on 31.03.2012, which was an audit report and the financial statement of the assessee company. This document cannot be treated as incriminating, or can be inferred as indicating any undisclosed income or anything which can be corroborated by any other incriminating material found in the course of search. Thus, audited annual report per se cannot be treated as incriminating material. the original share certificates dated 9.01.2010 which were transferred to the assessee company cannot be treated as incriminating, because, firstly, the Assessing Officer himself has not taken cognizance of this document while making the additions. In any case, the original share certificates in any manner can be reckoned as incriminating without any corroborating document or material found in the course of search that they are not genuine or indicative of undisclosed income. Thus, none of the documents as mentioned can remotely be considered as incriminating so as to warrant any addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and not doing any real business." 3. Succinctly, the Revenue has challenged the following additions in respect of all the four assessment years:- Assessment year Addition. 2009-10 ₹ 5,12,00,000/- on account of un-explained investment in JP Minda group companies. 2010-11 ₹ 3,96,00,000/- on account of un-explained investment in JP Minda group companies. 2011-12 ₹ 4,71,46,602/- on account of un-explained investment in JP Minda group companies.; and ₹ 4,71,46,602/- made u/s. 68, 2012-13 ₹ 5,92,00,000/- on account of un-explained investment in JP Minda group companies. 4. It is important to note here that in so far as the additions made on account of unexplained investment, the Assessing Officer has made protective addition in the case of the assessee company and substantive addition has made in the case of J.P. Minda group of companies. It has been pointed out by the Ld. Senior Counsel for the assessee, Shri Salil Aggarwal that in the Minda group of companies, the Tribunal has deleted the same very additions on merits. 5. However, Assessee has raised legal issues in his petitions made under Rule 27 of ITAT Rules wherein the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the ground of 'wrongful assumption of jurisdiction on the part of learned AO to have framed assessment under section 153C of the Income Tax Act. 4. It is submitted that this submission is being made in view of Rule 27 of the Income Tax Appellate Tribunal Rules and is otherwise well settled proposition of law that the respondent is entitled to raise a regal ground at any stage of the proceedings, even though he may not have filed an appeal against such an order. The Judicial pronouncements are as under: 1. 83 ITR 223 (Bom) (B.R. Bamsi vs. CIT) 2. 129 ITR 475 (Ail) (Moratia & Sons vs. CIT) 3. 220 ITR 398 (Ker) (CIT vs. Cochin Refineries Ltd.) 4. 176 CTR 406 (Gau) (Assam Company (I) Ltd. vs. CIT) 5 102 ITD 189 (Del) (ITO vs. Gurvinder Kaur) 6. 284 ITR (sic) (SC) CIT V. Varas International p. Ltd. 7. 149 taxmann 456 (Guj.) KharidVechan Sangh Ltd. vs. CIT. 8. 397 ITR 282 (All) CIT Vs. Jindal Polyester Ltd. 5. The respondent thus prays that it be permitted to urge the aforesaid grounds as raised and mentioned in para 3 above." 5.1. Similar grounds u/r. 27 of ITAT Rules have been raised in the other years also. 6. The Ld. Sr. Counsel stating the facts sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 20.09.2013 in the case of Minda Group of cases for A.Ys. 2008-09 to 2013-14 under Section 153A/143(3). The material seized from the premises of the assessee has been examined by the undersigned being the jurisdictional Assessing Officer. After examining such seized material I am satisfied that the following seized documents belong to persons other than Minda Group of cases. The details of such papers are as under:- Party No./ Annexure No. / Seized from: Page No. of Annexure Brief description of documents. Person to whom the Documents belongs. F. Y. involved. O-2/A-4, JAY USHIN LTD. GP-14, Sector 18, Gurgaon. 28 to 34 Annual Report of M/s. Panchmukhi Management Services Pvt. Ltd. as on 31.3.2012 M/s. Panchmukhi Management Services Pvt. Ltd. 2011-12 O-2/A-4, JAY USHIN LTD. GP-14, Sector 18, Gurgaon. 35 Details of amount investerd by M/s. Panchmukhi Management Services Pvt. Ltd. as on 1.01.2013. M/s. Panchmukhi Management Services Pvt. Ltd. 2012-13 O-2/A-4, JAY USHIN LTD. GP-14, Sector 18, Gurgaon. 70 - 71 Extract of annual return of M/s. Panchmukhi Management Services Pvt. Ltd. (period not known). M/s. Panchmukhi Management Services Pvt. Ltd. K4/PMEC 3 Rajesh S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rical held that original share certificates cannot be held to be incriminating material for drawing any adverse inference that any undisclosed income relating to assessee company has been un-earned or found and thus, these documents cannot be at all considered to be incriminating. Thus, most of the additions made by the Assessing Officer cannot be sustained. In support of his contention that only the incriminating material can be the basis of making the addition in the cases where assessments have attained finality and are not abated in terms of second proviso to Section 153A of the Act. He relied upon the decision of Hon'ble Supreme Court in the case of CIT Vs. Sinhgad Technical Education Society (supra) and of Hon'ble Delhi High Court in the case of CIT Vs. RRJ Securities (2016) 380 ITR 612 (Del.) and ARN Infrastructure India Limited Vs. ACIT (2017) 394 ITR 569 (Del.) as well as in the case of Pr. CIT Vs. Index Securities Pvt. Ltd. (ITA. No. 566/2017). 9. Ld. Sr. Counsel further pointed out that this issue was categorically raised before the Ld. CIT (Appeals) which is evident from page Nos. 5 to 7 of the appellate order. Accordingly, he submitted that the addition which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Section 153C of the Act. Accordingly, we hold that the assessment made for assessment year 2009-10 is invalid and is hereby quashed. 12. In so far as the ground raised by the assessee under Rule 27, which are arising from the facts and issue as discussed in the impugned order and discussed above that these additions are beyond the scope of assessment under Section 153A and 153C of the Act, we find that, before the Ld. CIT (Appeals), following contention was raised, which has been corroborated in page Nos. 5 to 7 of the appellate order as under:- "Addition made is beyond the scope of assessment u/s. 153C for the year under appeal. From the perusal of satisfaction note recorded on 29/01/2016 (the copy of satisfaction note is enclosed with the submission for A.Y. 2009-10 in the case of appellant company), it may be observed that it is mentioned in the satisfaction note that page No. 28 to 34 of Annexure 0-2/A-11 is the photocopy of Annual Report. The Annual report of the company is the part of return filed with Registrar of Companies and is not the incriminating material. As such the addition made by the Assessing officer in the order passed u/s. 153C of the Income is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2016 384 ITR 543 iv) CIT vs. Continental Warehousing Corporation Ltd. and All Cargo Global Logistic Limited 2015 374 ITR 645 (Bombay High Court) As such it is necessary to examine whether any incriminating material have been found with regard to investment made/credit appearing the bank account of the assessee. In this regard we have gone through the documents found during the course of search as well as assessment record. It is judicially settled position that incriminating material are those material which are related to unaccounted transactions i.e. if the transactions reflected in the said documents does not form part of books of accounts then the said document is called incriminating material. In this regard from the perusal of the assessment order it has been observed that the learned Assessing officer while passing the order discussed the following documents which have been found as a result of search:- i) Shares allotted to different investors were found in the office/factory premises of JP Minda Group during search proceeding. ii) Page No. 50, Annexure A-1, Party 0-2 seized from the premises of Jay Ushin Ltd. iii) Page No. 106, Annexure A-4, Party 0-2 seized du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppression of income, notice u/s. 158BD is held to be not valid. The case law is distinguishable on the facts as the AO has recorded/conveyed the satisfaction as per the assessment record, hence complied with the provisions of law for framing the assessment and passing the order under Section 153C. It has further been brought to my notice by the appellant about the satisfaction note recorded u/s. 153C (combined for A.Y. 2008-09 to A.Y. 2013-14) in which year wise documents which have been relied upon by the Assessing officer for assumption of jurisdiction u/s. 153C of the Income Tax Act are discussed. The satisfaction note mentions about the incriminating material so found to enable the AO to initiate proceedings u/s. 153C. The seized share certificates demonstrate that there indeed was material sufficient to warrant initiation of proceedings u/s. 153C. In this regard Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society settles the issue and holds this to be an essential requirement. The decisions by Hon'ble Delhi High Court in the case of CIT-7 Vs. RRJ Securities (2016) 380 ITR 612 (Del) and ARN Infrastructure India Limited v. ACIT [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any corroborating document or material found in the course of search that they are not genuine or indicative of undisclosed income. Thus, none of the documents as mentioned can remotely be considered as incriminating so as to warrant any addition within the scope of assessment under Section 153A/153C of the Act in these years where assessments were not abated and attained finality. Accordingly, we hold that none of the additions made by the Assessing Officer in assessment year 2010-11 to 2012-13 are sustainable in the absence of any incriminating or material found during the course of search or the reservations and satisfaction note. On these grounds the additions made by the Assessing Officer are deleted. 16. In any case, here in this case, one important fact which is to be noted here that Assessing Officer has made protective addition in the case of the assessee and the substantive additions made in different concerns has already been deleted by the Tribunal on merits in the orders cited supra. Thus, the additions made on protective basis, cannot be sustained otherwise also. 17. In the result, all the appeals filed by the Revenue, are dismissed. Order pronounced in the ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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