9911796707
TMI Blog2023 (3) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... nstant case. 3. Before us, the ld. AR raised the legal issue under Rule 27 of the Income Tax Appellate Tribunal (ITAT) Rules, 1963, contending that, before the ld. CIT(A), the assessee had raised legal arguments that the addition made by the ld. AO is not based on any incriminating material or evidence found during the course of search relating to the addition made by the ld. AO and is beyond the scope of section 153C of the Act. Since this issue has been decided against the assessee by the ld. CIT(A) vide para 7 of his order, the assessee is entitled to raise this issue before this tribunal in Rule 27 of the ITAT Rules. This contention of the ld. AR is accepted and accordingly Rule 27 Petition of the assessee is hereby accepted and taken up for adjudication. 4. The facts in brief qua the legal issue are that assessee is a private limited company engaged in the business of rendering maintenance services. The assessee had filed the return of income u/s 139(1) of the Act for the A.Y. 2012-13 on 25.09.2012 declaring NIL income. The assessment was completed u/s 143(3) of the Act on 27.03.2015 determining total income at Rs 2,24,81,707/-. A search and seizure action u/s 132(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations of the AO contained in the assessment order and the other materials on record on this issue. During the course of search & seizure action, in the present case and other group entities, it was found that donations to the tune of Rs. 96.90 crores was given by M/s. Podar Group of Trust including the assessee trust to various entities namely Delhi Vocational School Society, Gyan Shakti Education Welfare Trust, Nav Chetna Educational Trust, Prabodh Foundation etc. These entities after retaining their commission returned the cash to the assessee group. These facts were clearly stated by Shri Kirtikumar Darshibhai Suba in his statement on oath u/s 131, during the course of survey proceedings u/s 133A carried out simultaneously with the search action. Shri Kirtikumar Darshibhai clearly mentioned that cash was received back by the trustees, Shri N.K. Sodhani, Shri Navin Nishar CA etc. In fact Shri N.K. Sodhani in his statement also very clearly accepted that donations given to the tune of Rs. 96.90 Crores were bogus in nature and were channeled back in Podar Group of entities in the form of cash. These donations have been given by Podar Education and Sports Trust from A.Y. 2011-12 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of search. 9. On the other hand, the Ld. AR submitted that nowhere during the course of search, any books of account belonging or pertaining to the assessee was found or seized from any of the premises of Poddar group nor there is any such material relating to the assessee has been referred in the assessment order which can be related to the assessee company. In fact, there is no mention about the assessee company at all even by the Ld. AO in his assessment order. Thus, without any incriminating material, the addition could not have been made in the assessment which has been already abated at the time of search/recording of satisfaction u/s 153C of the Act. 10. We have heard the rival submissions and also perused the relevant findings given in the impugned order and the material referred to before us qua the legal issue raised by the Ld. AR before us. We find that this matter was even raised before the Ld. CIT (A), wherein the detailed submissions were made by the assessee. The following submissions have been made before the Ld. CIT(A) on this issue, which are as under:- Ground No. 1 9. It is submitted that in order to invoke the provisions of section 153C, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al so as to establish that the appellant has indulged in receipt of bogus share premium. In fact, the name of the appellant is nowhere mentioned so as to draw any adverse inferences against him. That being so, the Ld.AO is not enabled to invoke the provisions of section 153C of the Act against the appellant. 15. Further, it is submitted that the search took place on 09.01.2018 and as on the date of search the assessment for the assessment year under consideration had attained finality; no assessment or reassessment was pending that could be abated as per the second proviso to sub-section (1) of section 153A. 16. It is therefore stated that in respect of such completed assessment, and when no assessment/reassessment was pending as on the date of search, no addition/ disallowance could be made in the absence of any incriminating material found during the course of search. 17. The AO has failed to bring on record any incriminating material in respect of the additions made by the AO and thus, the said additions are liable to be deleted. 18. In view of the above, it is submitted that the notice issued u/s 153C is illegal, bad in law and otherwise void for want of jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled on 25.09.2012 and at the time of issuance of notice u/s 153C of the Act, i.e., on 21.09.2019, the assessment for A.Y. 2012-13 had attained finality which has to be reckoned as 'unabated assessment' in terms second proviso to section 153A of the Act. It is well settled proposition that assessments which had attained finality and are not abated, then additions can be made only when there is any incriminating documents or seized material found during the course of search. In the case of 'other person' covered u/s 153C of the Act, it is sine qua non that, firstly, any money, bullion, jewellery or other valuable article or things seized or requisition belongs to; or secondly, any books of account or documents, seized or requisition pertains to or any other information contained therein, relates to a person other than the person who was searched. It has only when such document pertains to or information contained therein relates to the assessee, then only the Ld. AO can acquire jurisdiction to frame the assessment u/s 153A r.w.s. 153C of the Act. Thus, even in the case of 'other person' covered u/s 153C of the Act, the process of assessment has to be done in terms of section 153A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i at Flat No. 1303, Wing-C, Skyline CHS, Shanti Park, Near St. Xavier School, Mira Road, Thane - 401 107, data back-up of laptop were taken from the home of Sh. Jayesh Zanani, In his statement, Sh. Jayesh Zanani has admitted that he used to make the notings of the accommodation entries taken in the Podar Group companies. The same is explained in the data back-up of computer wherein few retrieved deleted files named "REP" date (different file having different dates) marked as MR-11. On perusal of these retrieved deleted file named "REP", it is seen that unaccounted money was being generated in the case of Podar Group. The same was being routed through shell companies and finally received in various concerns of Podar Group in different forms such as share capital, share premium, sale proceeds of penny script investments etc. 22. Further, on perusal of data back-up of laptop, file related to share valuation of Podar group companies being assessed u/s 153C of the Act has been found namely "share valuation 1". It is further observed that: - 1. The share valuation of Goodways Realtors of Rs.52.83 is arrived as per working found in the file named "share valuation 1" in the data back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person] (and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub- section (1) of section 153A] :]" 23.2 The assessee contention that proceedings u/s 153C is bad in law is also found to be not acceptable. The proceedings u/s 153C is valid. Incriminating materials found from searched premises have a bearing on the determination of the total income of assessee. Further, reasons have also been recorded as required under the Income Tax Act, 1961. In this respect, reliance has been placed on following case laws :- a. Ajay Kumar Sharma (2002) 124 taxman 814 (Raj) / (2003) 259 ITR 240 (Raj) / ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C198655 07-01-2010 19,35,000/- 7 Nirvana Clothing Pvt. Ltd. Office No.16, 4th Floor, Bhatbazar Nasinatha Street Masjid Bunder, Mumbai - 400 009 AADCN6 287G U17120MH201 0PTC198511 27-05-2011 19,35,000/- 8 Rishi Automation Pvt. Ltd 9, Janta CHS, Jesal Park, Bhayender (E) Thane- 401 AAACR8 467K U99999MH199 4PTC083972 22-12-1994 19,35,000/- 105 9 Shorey Infraprojects Pvt. Ltd. 103/B, 104, Sagar Shopping Centre 76, J.P. Road, Andheri(W) Mumbai - 68 AAOCS3 992G U45202MH201 0PTC199969 11-02-2010 10,12,500/- 10 Shree Pawan Exim Pvt. Ltd. 67, Prakash Chambers, 2nd Floor, 77, Nagindas Master Road, Fort, Master Road, Fort Mumbai-400 023 AACCS7 675L U51900MH199 6PTC098954 18-04-1996 19,35,000/- 11 Statford Textile Specialties Ltd. 104, Auto Commerce House, Kennedy Bridge, Nana Chowk, Opera House, Mumbai-400 007 AANCS6 616A U17120MH199 3PLC072836 13-07-1993 19,35,000/- 12 Thadeshowar Finin Service Pvt. Ltd G-3, Vijay Apt, Gurunanak Nagar, Navghar, Vasai, Thanem 412 202 AACCT7 897B U93000MH200 7PTC170488 01-05-2007 9,45,000/- 13 Zem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO may have discussed the issue on merits but has failed to take any such documents or information that during the course of search anything pertains to the assessee was found or the addition which has been made by him flows from such incriminating material or documents or information. He has made reference to various statements recorded during the course of search but nowhere there is any reference of the assessee company which is evident from the perusal of the entire assessment order running into 72 pages. 16. Thus, we hold that in absence of any information pertaining to the assessee or any documents found during the course of search of Podar entities, no addition can be made in the case of assessee company specially when the A.Y. 2012-13 had attained finality and was not abated either at the time of search or either at the time of recording of satisfaction. Thus, on this ground, the addition made by the Ld. AO is quashed on the legal issue raised by the assessee. 17. In so far as revenue appeal, we are not deciding this issue on merits at all nor going through the findings given in the impugned orders, as we have quashed the addition on legal issue, being beyond the scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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