9911796707
TMI Blog2014 (1) TMI 1942X X X X Extracts X X X X X X X X Extracts X X X X ..... abated as on the date of search, as in the instant case, the AO has to reassess the total income of the assessee and the assessment already completed can be tinkered with or distrusted where some incriminating material is found and seized during the course of search indicating undisclosed income of the assessee. AO would assume the jurisdiction to reassess the total income taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the return. In case no incriminating material is unearthed during the search, the AO cannot reassess taking into consideration the other material in respect of completed assessments/unabated assessments. In the instant case, there is nothing on record and/or brought to our notice during the course of hearing that the Competent authority was seized of the aforesaid statement of Shri S. K Khemka at the time of recording of the satisfaction whereby the authorization has been issued and the search warrant was issued whereby the search has been initiated in case of the assessee. Therefore, the statement of Shri S.K Khemka is availability of other material/docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to appreciate that during the course of search of the assessee, no incriminating evidence in respect of dealing on such shares have been found and the recent judgment of Hon'ble Apex Court in the case of 'PCIT-III Vs. Abhisar Buildwell Pvt. Ltd.' in Civil Appeal No. 6580/2022 delivered on 24.04.2023 have not been considered properly by the Ld. CIT(A) and, as such, since no incriminating evidence was found during the course of search of the assessee and hence the addition of Rs. 87,04,733/-was not called for. 3. That the Ld. CIT(A) has confirmed the order of Assessing Officer by relying upon the statement of one Sh. Sunil Kumar Kayan and Sh. S.K. Khemka, which was recorded by the Investigation Wing, Kolkata on 13.03.2015 and not during the course of search of the assessee and, thus, the same could not be said to be the 'incriminating evidence' as found during search. 4. That the finding of the Ld. CIT(A) about the meaning of 'incriminating material' by relying upon certain article is without any basis and substance and it has been held in various judgments of Hon'ble High Courts/ Tribunals that the mere statement cannot be held to be incriminating mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 10(38) amounting to Rs. 87,04,733/-. The return of income was thereafter processed under section 143(1) and thereafter, no notice under section 143(2) was issued within the statutory time period. 4.1 Subsequently, search and seizure operation under section 132(1) were carried out at the residential and business premises of M/s Jain Amar Clothing Pvt. Ltd. Group of cases on 26/02/2016 and the assessee premises were also searched on the said date. Thereafter, the case of the assessee was centralized and notice under section 153(A) dt. 28/09/2016 was issued to the assessee. In response to the notice, the assessee filed his return of income on 28/01/2017 declaring total income of Rs. 6,77,053/- as originally declared under section 139(1) of the Act. 4.2 During the course of assessment proceedings, the AO stated that the assessee has claimed exemption of LTCG of Rs. 87,04,733/- during the A.Y. 201213 in respect of sale of shares of M/s Access Global Limited and in order to verify the genuineness of the assessee s claim of exemption, he has examined the seized records, appraisal report of the documents as furnished by the DDIT, conducted independent field enquiries and investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee stating that from the aforesaid discussion, it is clear that M/s Mapple Goods Pvt. Ltd. and M/s Access Global Ltd. are penny stocks and identity and credentials of both are suspicious in nature and why the LTCG claimed of Rs. 87,04,733/- should not be treated as bogus and added under Section 68 of the Act. 4.7 In response to show cause notice, the assessee submitted as under: That he has purchased 1700 equity shares of M/s Maple Goods (P) Ltd. in F.Y. 2010-11 through share broker S.K. Khemka. That M/s Maple Goods (P) Ltd. was later on amalgamated with M/s Access Global Ltd. in November 2011 and as per the amalgamation scheme approved by the Hon ble Calcutta High Court, against 1 share of M/s Maple Goods (P) Ltd., 47 equity shares of M/s Access Global Ltd. were allotted. That the shares of M/s Access Global ltd. were received in D-MAT account of the assessee. That the shares of M/s Access Global Ltd. were sold during the F.Y. 2012-13 through broker Shri Sunil Kumar Kayan. That the statement of Shri Suresh Kumar Khemka, Shri Sunil Kumar Kayan, Shri Ashish Kumar Aggarwal, Shri Naval Jalan, Shri Ashok Kumar Kayan, Shri Harshvardhan Kayan relates to F.Y. 2014-15 whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of trading of shares in M/s Maple Goods (P) Ltd. and M/s Access Global Ltd. amounting to Rs. 87,04,733/- was treated as bogus and added to the total income of the assessee treating the same as unexplained cash credit under Section 68 of the Act. 5. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A). 5.1 During the course of appellate proceedings, it was submitted that the assessee has made investment in shares of M/s Maple Goods (P) Ltd. in A.Y. 2011-12 and the shares were purchased through Shri S.K. Khemka and the copy of the account with Shri S.K. Khemka was placed on record. It was submitted that payment against the purchase of shares was made to Shri S.K Khemka through saving bank account maintained with HDFC Bank and copy of the bank statement was also placed on record. 5.2 It was further submitted that after gap of a year, there was amalgamation of M/s Maple Goods (P) Ltd. with M/s Access Global Limited which was approved by the Hon ble Calcutta High Court and in terms of the record date of 30/11/2011, the share holder of M/s Maple Goods (P) Ltd. were given 47 shares of M/s Access Global Limited against 1 share of M/s Maple Goods (P) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 to 182 of Annexure A represent the transactions which were duly recorded in the records / books of the assessee. All these transactions are routed through banking channels. All these transactions are reflected in the computation chart and the return of income which has been duly filed in accordance with law. It was submitted that the said broker was an authorized broker of Calcutta Stock Exchange and duly registered with SEBI and all these facts are on record. The AO has not denied these facts. It was submitted that all the transactions have been transacted through Calcutta Stock Exchange for the sale of shares. Hence the contention of the AO is purely an allegation on assumption basis which is not permitted in the eyes of law. It was further submitted that the copies of share certificates which have been seized from the locker are issued by M/s Maple Goods (P) Ltd. against the purchases made through banking channels and through the broker. Even on the backside of these certificates, it can be seen that these shares have been transferred in the name of the assessee and relates to the assessee. It was submitted that the AO has not uttered a single word regarding purchases of share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of shares is genuine. b) There was complete amalgamation of the Maple Goods Pvt. Ltd. made through Calcutta High Court and the AO has not uttered a single word on this issue. c) The shares of Access Global Limited were allotted to the assessee as per the Calcutta High Court orders. The shares were received by the assessee in Demat Account. This fact has been admitted by the AO. d) The shares were sold through the broker by the assessee through Calcutta Stock Exchange. This fact has been admitted by the AO. e) The payments against the sale of shares were received from the broker and this fact has not been contradicted by the AO. f) The complete details of saving bank account number xxxxxxx along bank statement with HDFC Bank for purchase of shares has been verified by the AO. Similarly, the complete details of payments received in this saving account against the sale of shares have not been doubted and were also verified during the proceedings. g) There is no contradiction made by the AO on the all the above issues in point no (a) to (f) in the assessment order, hence additions have been made u/s 68 arbitrarily. These are actual long term capital gains earned by the assessee. h) Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was in possession of the shares which has later on been utilized for bogus LTCG claim on sale of share under section 10(38) of the Act. It was stated that the share of M/s Maple Goods (P) Ltd. were purchased through broker Shri S.K. Khemka is clear from the seized record. It was stated that given the nature of the whole scheme being managed, these documents are of incriminating nature as these were issued by broker to make the scheme appearing to be falling within the four corners of law and these documents are incriminating in nature as they have direct bearing on the assessment of correct income of the assessee. Moreover as per the case of Sumati Dayal Vs. CIT 214 ITR 801(SC) even the circumstantial evidence based on pre-ponderance of probability constitute incriminating material enough to make an assessment of income. 6.2 It was further stated by the AO in his remand report that the statement of Shri Suresh Khemka through which the assessee purchased the shares was recorded on oath on 13/03/2015 by the Investigation wing, Kolkata and in his statement, he has admitted that he has issued kachha panna (purchase contract notes) of M/s Maple Goods (P) Ltd. which later on got am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssumption that there is an incriminating material deducted as a result of search on the applicant is entirely misconceived, misplaced and wholly untenable. 7.2 It was submitted that the assessment for A.Y 2011-12 stood completed wherein no adverse inference has been drawn in this respect and therefore no material much less any incriminating material has been found to allege that any consideration has been passed on or received outside books of accounts. It was accordingly submitted that being a case of unabated assessment in absence of any incriminating material found as a result of search in the case of the assessee the whole of the proceedings under section 153A r.w.s 143(3) is bad in law. 7.3 It was submitted that it is a trite law that incriminating material must be detected as a result of search on the applicant and such incriminating material should be qua the addition proposed to be made against the applicant and in the present case there is no such incriminating material unearthed during the search and therefore the contention of the AO that the share certificate are of the incriminating material as found during the course of search is devoid of any valid consideration. 7.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the decision of Hon ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. in Civil Appeal No. 6580 of 2021 dt. 24/04/2023, it was stated by the Ld. CIT(A) that in case any incriminating material is found during the course of search, the AO can assess the total income of the assessee on the basis of incriminating material as well as any other material in knowledge or possession of the AO including the total income declared in the returns. Hence the contention of the assessee that no incriminating material was found on the basis of which the said assessment has been framed was held without basis and rejected. Further, on merits as well, various contentions raised by the assessee were rejected and the findings and order of the AO was confirmed. 9. Against the said findings and the directions of the Ld. CIT(A), the assessee is in appeal before us. 10. During the course of hearing, the Ld. AR referred to the grounds of appeal taken by the assessee namely Ground No. 2, 3 and 4 and it was stated that the Ld. CIT(A) has failed to appreciate that it is a case of unabated assessment, and during the course of search on the assessee, no incriminating material/evidence has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the year 2015 and the statements were any way recorded at the back of the assessee and no opportunity to cross examine was ever given to the assessee. 10.4 It was further submitted that the statement recorded during the course of search has no evidentiary value and cannot be said to be incriminating evidence by itself as found during the course of search as held in various decisions and in this regard, reliance was placed on the decisions of Hon ble Delhi High Court in case of Pr. CIT Vs. Best Infrastructure India Pvt. Ltd. 397 ITR 82 (Del), CIT Vs. Harjeev Aggarwal 290 CTR 263 (Del), Jaipur Benches of the Tribunal in case of DCIT Vs. A M Exports 69 ITR (Trib)16 (Jaipur Trib), and Delhi Benches in case of Brahmaputra Finlease P. Ltd. Vs. DCIT 51 CCH 796(Del Trib) and Rathi Steel Ltd. Vs. ACIT 56 CCH 102 (Del Trib). 10.5 Regarding the findings of the Ld. CIT(A), it was submitted that the purchased documents of the share cannot be considered as incriminating documents, rather these documents would support the stand of the assessee that the share purchase are genuine and are backed by proper documents. And the assessee has already taken the effect of the same at the time of sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that the contents of the documents so found and seized from the Locker clearly shows that the assessee has purchased the shares of M/s Maple Goods (P) Ltd. through the broker Shri S.K. Khemka. It was further submitted that Shri Suresh Kumar Khemka in his statement recorded on oath by the investigation wing, Kolkata has admitted that he has issued Katccha Panna (Purchase Contract Note) of M/s Maple Goods (P) Ltd. which later on got amalgamated with M/s Access Global and for which many persons claimed LTCG and list of such persons includes the name of the assessee. It was accordingly submitted that these documents so found and seized are of incriminating nature as these were issued by the broker Shri Suresh Kumar Khemka to make the scheme appearing to be falling within the four corners of law but in reality reflected the device based on misrepresented fact and therefore these documents are clearly incriminating in nature as they have the direct bearing on the assessment of correct income of the assessee. 11.1 It was submitted that the statement of Shri Suresh Kumar where read in the context of the share certificates and the contract notes found from the locker clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the course of search under section 132 or requisition under section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under section 132 or requisition under section 132A, the assessment has to be done under section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the 'total income' taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under section 153A of the Act, 1961, had held that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of, the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading of the, section can be regarded as a key to the interpretation of the operative portion of, the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning From the heading of section 153, the intention of the Legislature is clear, viz, to provide for assessment in case of search and requisition. When, the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assess the 'undisclosed income' and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the 'undisclosed income' was chargeable to tax at a special rate of 60% under section 113 whereas income other than 'undisclosed income' was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under section 153A are triggered by conducting of a valid search under section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation. For the removal of doubts, it is hereby declared that, (i) save as otherwise provided in this section, section 153-B and section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals and review petition preferred by the Revenue are hereby dismissed. No costs. 13. The Hon ble Supreme Court in the aforesaid decision has held that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act and thus, the object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material unearthed during the course of search, the AO would assume the jurisdiction to assess or reassess the total income in case of completed/unabated assessment taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the return. In case, no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments and has upheld the decisions of Hon ble Delhi High Court in case of CIT Vs. Kabul Chawla [2016] 380 ITR 573 and Hon ble Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it observes as above with regard to the ambit and scope of the powers conferred under section 153A of the Act. Since we are not required to trace out the history and we can do nothing better than to reproduce the observations and conclusions as above that we are not repeating the same. Even if the exercise of power under section 153A is permissible still the provision cannot be read in the manner suggested by Mr. Pinto. Not only the finalised assessment cannot be touched by resorting to those provisions, but even while exercising the power can be exercised where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31st March, 2003. There is a mandate to issue notices under section 153(1)(a) and assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, the crucial words search and requisition appear in the substantive provision and the provisos. That would throw light on the issue of applicability of the provision. It being enacted to a search or requisition that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A (i)(b) and the first proviso clearly provide for assessment or reassessment of all six years. It may cause hardship to some assesses where one or more of such assessments has or have been completed before the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and against the very rule in this behalf that it should be supplied for the purpose of achieving legislative intent. The submissions of the Ld. Counsels are manifold, the foremost being that the provision u/s 153A should be read in conjunction with the provision contained in section 132(1), the reason being that the latter deals with search and seizure and the former deals with assessment in case of search etc, thus, the two are inextricably linked with each other. 49. Before proceeding further, we may now examine the provision contained in sub-section (2) of section 153, which has been dealt with by L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a search can be authorised on satisfaction of one of the three conditions enumerated earlier. Therefore, while interpreting the provision contained in section 153A, all these conditions will have to be taken into account. With this, we proceed to literally interpret to provision in 153A as it exists and read it alongside the provision contained in section 132(1). 52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is shall and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is shall and, therefore, the AO has no option but to assess or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In other words pending proceedings will not be proceeded with thereafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. However he took an evasive view submitting that this question need not be decided in his case although the question of jurisdiction u/s 153A was vehemently pressed on account of which ground No. 1 in the appeal for assessment year 2004-05 was admitted as additional ground. He also wanted the additional ground to be retained in case of any future contingency. 16. The matter relating to incriminating material coupled with various other issues again came up for consideration before the Hon ble Bombay High Court recently in case of Ashok Commercial Enterprises vs Assistant Commissioner of Income tax (Writ petition no 2595 and others dated 04/09/2023). Referring to the decision of Hon ble Supreme Court in case of Pr. CIT Vs. Abhisar Buildwell (P) Ltd. (supra), it was held that no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act. Referring to the decision of Hon ble Supreme Court in case of CIT Vs. Sinhgad Technical Education Society 397 ITR 344 (SC), it was held that the incriminating material seized must pertains to assessment year in question and notice issued un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of shares of Hubtown Limited which have been recorded in petitioner s books of accounts and tax paid on the resulting gain. (iii) reference is made to an alleged re-cast of loan from petitioner to Hubtown Limited into an advance against property during year ended 31st March 2019 and the same is not relevant to Assessment Year 2017-2018. (f) Accordingly, it is irrefutable that no incriminating material relating to petitioner has been found during proceedings under Section 132 of the Act in the case of Hubtown Limited; 17. We therefore find that the term incriminating material have to be read and understood in the context of one or more of the conditions stipulated in section 132(1) and on satisfaction of which, a search can be authorised and search warrant can be issued. That is, there is information in possession of the competent authority and basis which he has reasons to believe that (a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced under the erstwhile 1922 Act or under section 142(1) of the present Act, (b) summons or notice has been or might be issued, he will not produce the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the income of the assessee as regular assessment. However, in case of completed assessment and not abated as on the date of search, as in the instant case, the AO has to reassess the total income of the assessee and the assessment already completed can be tinkered with or distrusted where some incriminating material is found and seized during the course of search indicating undisclosed income of the assessee. Therefore, the AO would assume the jurisdiction to reassess the total income taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the return. In case no incriminating material is unearthed during the search, the AO cannot reassess taking into consideration the other material in respect of completed assessments/unabated assessments. 20. In the instant case, search and seizure operations were carried at the business and residential premises of M/s Jain Amar Clothing Pvt. Ltd. Group of cases on 26/02/2016 and the assessee, being part of the said group were also searched on the said date along with other family members. What has been found and seized are certain documents fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by the Assessing officer of family members whose locker has been searched and from where the documents belonging to the assessee has been found and seized. The fact that the assessee s premises were also searched and he was covered as part of the same search operations and action is initiated u/s 153A in his case, the same doesn t take away the statutory requirement of recording of satisfaction note by the Assessing officer of family members whose locker has been searched and from where the documents belonging to the assessee has been found and seized. 22. Moving further, we look at the show cause dated 14/09/2017 issued during the reassessment proceedings in case of the assessee wherein the AO referred to page No. 1 to 34 and 180 to 182 of Annexure-A seized from aforesaid bank locker and stated that the document so seized relates to purchase of shares on different dates by the assessee in terms of share certificate of M/s Maple Goods (P) Ltd. and the copy of the contract cum bill notes issued by the share broker, Shri S.K. Khemka and which has been termed as incriminating in nature. 23. In this regard, it is an admitted and undisputed position that the assessee had purchased t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved by the Hon ble Calcutta High Court, the assessee had received shares of Access Global in lieu of shares held in Maple Goods (P) Ltd. and the shares of Access Global were received and credited in the demat account of the assessee. Therefore, once the scheme of amalgamation has been implemented, Maple Goods (P) Ltd loses its legal existence and identity and merges into Access Global and the fresh shares of Access Global have been issued and credited in the D-mat account of the assessee against the shares held in Maple Goods (P) Ltd. In the impugned assessment year 2012-13, we find that the assessee has sold certain shares of Access Global and disclosed long term capital gains on sale of shares of Access Global as part of the original return of income filed on 29/02/2012 well before the date of search on 26/02/2016. While calculating the long term capital gains, the assessee has disclosed sale consideration on sale of shares of Access Global and has claimed cost of acquisition of original shares of M/s Maple Goods (P) Ltd which matches with particulars as per the share certificates initially purchased and transferred in the name of the assessee and contract notes issued by the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O including the income declared in the return. 27. As we have noted above, the share certificates corroborate and confirm the disclosed transaction of purchase of shares of Maple Good (P) Ltd by the assessee and cannot be termed as incriminating in nature. Therefore, where there is no incriminating material found during the course of search, the statement of Shri S.K Khemka (and what has been stated therein) which is recorded well before the date of search in case of the assessee and in the context of some other proceedings, independent of the impugned search proceedings, is availability of certain other material/documentation with the AO during the course of reassessment proceedings but not material/documentation which is incriminating in nature found during the course of search in case of assessee for the impugned assessment year. 28. As per ld CIT/DR, the statement of Shri S.K Khemka is corroborated by evidence in nature of share certificates and contract notes seized during the course of search and basis the same, it was contended that documents so seized would fall within the definition of incriminating material. In other words, the statement of Shri S.K Khemka has formed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... result, the ground No. 2, 3 4 of the assessee s appeal is allowed. 30. In view of the aforesaid discussions where we have deleted the addition in absence of any incriminating material, other grounds of appeal on merits of the case, lack of opportunity for cross-examination, etc have become academic in nature and we don t deem it necessary to adjudicate the same. These grounds of appeal are thus left open, to be decided at appropriate time should the need for the same arise in future and for the present, dismissed as infructious. ITA No. 353/Chd/2023, ITA No. 351/Chd/2023 ITA No. 354/Chd/2023 31. Both the parties fairly submitted that the facts and circumstances in all these appeals namely Shri Ashish Jain in ITA No. 353/Chd/2023 for A.Y. 2013-14, Shri Akhil Jain in ITA No. 351/Chd/2013 for A.Y. 2013-14 and Shri Bipan Jain in ITA No. 354/Chd/2023 for A.Y. 2013-14 are exactly identical and similar contentions as advanced in case of Ashish Jain in ITA No. 352/Chd/2023 for A.Y 2012-13 be considered. Therefore, considering the submissions made by both the parties, our findings and directions contained in ITA No. 352/Chd/2023 shall apply mutatis mutandis to these appeals. 32. In the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
