9911796707
TMI Blog2023 (3) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified not only acquiring the jurisdiction u/s 153C of the Act, but also making the addition, because that it would have been based on incriminating material or information pertaining to the assessee. AO, contains information regarding Emerging Supply Pvt. Ltd. who has received accommodation entry in the form of share premium and subsequent to various transfer entities as per the direction of Shri Ajay Podar was sum aggregating to Rs. 1.15 crores. Nowhere has it been brought on record that this money was transferred in the form of share application money or share premium in the case of the assessee company. All these might be incriminating materials, but those incriminating material should have some reference of the assessee company or something can be inferred in the case of the assessee company, i.e., it pertains to the assessee. In so far as the assessee is concerned, there is no such reference of any such material or neither any information nor it has been discussed in the entire assessment order. It is based on the entire premise that some modus operandi of Podar group for routing through their unaccounted money in the form of share application / share premium in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Act was carried out on various entities of Poddar Institutional group on 09.01.2018. Consequent upon the search, a notice u/s 153C of the Act was issued on 21.09.2019 after recording the satisfaction. In response, assessee has filed the return on 23.09.2019 declaring NIL income. From the perusal of the assessment order, it is seen that the ld. AO has mentioned certain modus operandi followed by Poddar group for channelizing bogus donations and out of bogus cash generated money has been channelised into the books of accounts of different entities of Poddar group in the form of shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly 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 onwards to various trusts and is returned back in the form of cash after deducting their commission. No doubt, these statements were retracted later on, but these statements will form the basis for incriminating material enough to proceed against the assessee in accordance with provisions of Section 153A of the Income Tax Act. Moreover, during the remand proceedings in the cases of connected Trusts, opportunities of cross examination etc. were given to the respective assessees. Opportunities are also given during the appellate proceedings. In these circumstances, I don't ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 assessing officer has to be satisfied that any money bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or any books of account or documents, seized or requisitioned, pertains or pertain to, relates to, a person other than the person referred to in section 153A. 10. It is submitted that during the course of search no money, bullion, jewellery or other valuable article or thing or any books of accounts or documents belonging to the appellant were seized from the premises of Podar Group, and hence the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and thus, the same is liable to be deleted. Ground no. 2:- 19. It is submitted that in order to invoke the provisions of section 153C, the assessing officer has to be satisfied that any money bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or any books of account or documents, seized or requisitioned, pertains or pertain to, relates to, a person other than the person referred to in section 153A. The precondition for initiating the proceedings u/s 153C of the Act is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered 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 the Act and therefore, in case of unabated assessment, the addition can be made only if there is any incriminating document or information pertaining to the assessee which has been found from the possession of the persons searched. In this regard, reliance is placed on the decision of Hon ble Delhi High Court in the case of Kabul Chawla reported in 380 ITR 573 (Del) ; decision of Hon ble Calcutta High Court in the case of Principal CIT vs M/s Salasar Stock Broking Ltd in G.A.No. 1929 of 2016 ITAT No. 264 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 backup of laptop whereas share has been issue issued to share applicant at huge premium of Rs.45/- per share and 440/- per share. 2. The share valuation of Parel Graphics of Rs.52.89 is arrived as per working found in the file named share valuation 1 in the data backup of laptop whereas share has been issued to share applicant at huge premium of Rs.440/- per share. 3. The Share Valuation of Podar Media and Entertainment of Rs.7.55 is arrived as per working found in the file named ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks 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) / (2002)539(Raj) wherein search assessment, entries in regular books can be taxed.Merely because some entries are shown in regular books of account that does not prohibit Assessing Officer to tax that amount in block period, if that amount has not been taxed in regular assessment. 14. From the perusal of the aforesaid analysis done by the Ld. AO and also the documents referred to before us at the time of hearing, we find that, nowhere any of the seized m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, Fort, Mumbai AAACJI4 57F U70100MH198 7PLC045620 05-02-2009 18,00,000/- 6 Kurmi Developers Ltd. Office No.14/15, 1 st Floor, Bhatbazar Nasinatha Street, Masjid Bunder, Mumbai 400 009 AAECK3 351M U70200MH201 0PTC198655 07-01-2010 19,35,000/- 7 Nirvana Clothing Pvt. Ltd. Office No.16, 4 th 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share application money or share premium in the case of the assessee company. All these might be incriminating materials, but those incriminating material should have some reference of the assessee company or something can be inferred in the case of the assessee company, i.e., it pertains to the assessee. The modus operandi unearthed during the course of search in the case of Poddar entities may be relevant for other cases within the group entities wherein there is direct evidence or material which has been discussed in the assessment order as well as in the various statements. But in so far as the assessee is concerned, there is no such reference of any such material or neither any information nor it has been discussed in the entire assessment order. It is based on the entire premise that some modus operandi of Podar group for routing through their unaccounted money in the form of share application / share premium in the group entities was unearthed. Based on that, the Ld. AO has assumed that assessee is also part of the same modus operandi wherein assessee has brought its unaccounted money through the medium of share subscribers. There has to be prima facie material which pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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