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TMI Blog2024 (9) TMI 1513X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company is before us as a cross-objector for the aforementioned years. The captioned cross-appeals (mentioned at Sl. No.9 & 10) filed by the assessee company and the revenue are directed against the consolidated order passed by the Commissioner of Income-Tax (Appeals)-3, Bhopal, dated 16.08.2021, which in turn arises from the order passed by the A.O under Sec.143(3) of the Income-tax Act, 1961 (in short 'the Act'), dated 30.12.2019 for the A.Y. 2018-19. As the issues involved in the present appeals are inextricably interlinked or in fact interwoven, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. We shall first take up the appeal filed by the revenue in IT(SS)A No.06/RPR/2021 and the corresponding cross-objection filed by the assessee in CO No.12/RPR/2022 for A.Y. 2010-11 as the lead matter for adjudication. IT(SS)A No. 06/RPR/2021 CO. No. 12/RPR/2022 A.Y. 2010-11 3. The revenue has assailed the impugned order passed by the CIT(Appeals)-3, Bhopal on the following grounds of appeal: "1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 5,75,00,000/- made by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Jt.CIT is in mechanical & routine manner without application of mind by the Jt.CIT in a hasty manner, merely a formality, an empty ritual in absence of a valid approval as mandated by law u/s. 153D as per sec. 153B(1)(a); assessment made u/s. 153A rws. 143(3) would be invalid, bad in law & non-est and is liable to be quashed." 5. The captioned cross-objections filed by the assessee respondent involves a delay of 9 days. Shri Sunil Kumar Agrawal, Ld. Authorized Representative (for short 'AR') for the assessee company elaborated on the reasons leading to the delay in filing the cross-objections. It was submitted by him that the same had occasioned for the reason that though the orders/documents were dispatched by the assessee company on 27.09.2022 through courier but the same were received in his office only as on 06.10.2022. Carrying his contention further, the Ld. AR submitted that as the delay had occasioned not for any lapse on the part of the assessee company which had forwarded the orders/documents to it's counsel within the stipulated time period but because of delayed delivery of the same by the courier, therefore, the same in all fairness be condoned. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at as per instructions he seeks liberty to withdraw the ground of cross objection No.1. The Ld. DR did not raise any objection to the seeking of withdrawal of the ground of cross objection No.1. Considering the concession of the Ld. AR the Ground of cross objection No.1 is dismissed as withdrawn. FACTS: 10. Succinctly stated, the assessee company which is engaged in the business of manufacturing of sponge iron and MS Ingots/Billets had filed its original return of income for A.Y. 2010-11 on 01.10.2009, declaring an income of Rs. 15,17,820/-. The assessee company was, thereafter, subjected to search proceedings u/s. 132 of the Act on 24.10.2017. The assessee company in compliance to the notice issued by the A.O u/s. 153A of the Act had, inter alia, filed its return of income for A.Y. 2010-11 on 25.12.2019, declaring its income as was originally returned at Rs. 15,17,820/-. 11. Assessment was, thereafter, framed by the A.O vide a consolidated order passed u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019 for the subject year, i.e. A.Y. 2010-11 and the succeeding years, i.e. upto A.Y. 2018-19. The A.O qua the subject year, i.e. A.Y. 2010-11, held the share application money of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No 1 for AY 2012-13, 2013-14 & 2015-16:- Through these grounds of appeal, the appellant has challenged legality of assessment order passed by the AO. I have perused the submissions of the learned AR, the various decision cited, and the assessment order. Once the search has taken place and notices u/s. 153A has been issued the jurisdiction is conferred on the assessing officer to pass assessment order `to 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. The assessing officer has specifically mentioned in para 3 of the assessment order that various books of accounts, documents, loose papers were seized. The appellant assessee has filled the returns of income in response to notice u/s. 153A issued for A.Y 2009-10 to 2017-18 and the assessee filed returns of income for A.Y 2012-13 to 2017-18 on 26.10.2019 and AYs 2009-10 to 2011-12 on 25.12.2019. Shri. Amit Maloo C.A and authorized representative attended the assessment proceedings before the A.0 from time to time and filled written submissions with supporting documents which were placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any that the A.O had grossly erred in law and facts of the case in treating the share application money of Rs. 5.75 crore which it had received during the subject year as unexplained cash credit u/s. 68 of the Act. 15. To sum up, the CIT(Appeals) had dealt with the multi-facet contentions of the assessee company, as under: * The CIT(Appeals) had found favour with the contentions that were advanced by the assessee company qua the merits of the addition of Rs. 5.75 crore that was made by the A.O, wherein the latter had held the share application money that was received by the assessee company from two share applicant companies during the subject year as unexplained cash credit u/s. 68 of the Act. Accordingly, the CIT(A) had vacated the addition of Rs. 5.75 crore (supra) that was made by the A.O u/.s. 68 of the Act. * The CIT(Appeals) did not find favour with the claim of the assessee company that in absence of any incriminating document for the subject year found in the course of search proceedings conducted on 24.10.2017, no addition could have been made in its unabated assessment for the year under consideration, i.e. A.Y. 2010-11, and had rejected the same. The CIT(Appeals) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject year found during the course of search proceedings conducted on the assessee company on 24.10.2017, no addition could have been made by the A.O as regards the unabated assessment for the year under consideration ; and (ii) that in absence of any valid approval u/s. 153D of the Act by the Jt. CIT, the assessment order passed by the A.O u/s. 143(3) r.w.s.153A of the Act, dated 30.12.2019 was liable to be quashed for want of valid assumption of jurisdiction. 18. As the assessee company has assailed the validity of the jurisdiction assumed by the A.O for framing the assessment vide his order passed u/s. 153A r.w.s. 143(3) of the Act, dated 30.12.2019 in absence of a valid approval u/s. 153D of the Act of the Jt. CIT, Raipur-Central, Raipur; and also, the sustainability of the additions made by the A.O in absence of any incriminating material found in the course of the search proceedings qua the subject year, wherein, the assessment proceedings were unabated on the date of search, i.e., 24.10.2017, therefore, we shall first deal with the same. (A). Re: Addition made by the A.O in absence of any incriminating material found during the search proceedings in the unabated assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically drawn our attention to the relevant extract of the "balance sheet" of the assessee company for the year under consideration, which revealed the share capital as of 31.03.2010 at Rs. 1,90,70,000/-. Elaborating further, the Ld. AR submitted that the infusion of fresh capital during the year was Rs. 91,60,000/-, i.e. Rs. 1,90,70,000/- (as of 30.03.2010) [minus] Rs. 99,10,000/- (as of 31.03.2009). The Ld. AR submitted that the amount of Rs. 10,53,40,000/- mentioned in the aforesaid chart was the amount of share premium that was received by the assessee company during the subject year. It was submitted by him that the fresh receipt of share premium of Rs. 10,53,40,000/- during the subject year was disclosed by the assessee company in its financial statements as "Securities Premium Account" under the parent head "Reserves and surplus", Page 19 of APB. The Ld. AR to support his contentions had drawn our attention to Page 16 &19 of APB, i.e. the relevant extracts of the "balance sheet" of the assessee company for the year under consideration, i.e. A.Y. 2010-11, which revealed that the assessee company had received "Security premium" of Rs. 10,53,40,000/- during the subject year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject investor companies, viz. (i) M/s. Prithvi Dealcom Pvt. Ltd. : Rs. 3.45 crore; and (ii) M/s Shri Shyam Ply Traders Pvt. Ltd. : 2.30 crore were recorded in its books of account which, thereafter, were audited and formed part of its financial statements that were enclosed along with its original return of income filed on 01.10.2009, therefore, it was difficult to fathom as to how the same could be brought within the meaning of "incriminating material" found in the course of search proceedings conducted on 24.10.2017. The Ld. AR to fortify his contention that the respective amounts received by the assessee company during the subject year, i.e. A.Y. 2010-11 were recorded in the books of account, submitted that the said details were filed by the assessee company in its reply filed on 24.12.2019 with the A.O pursuant to the queries that were raised by him vide his notice u/s. 142(1), dated 03.09.2019. The Ld. AR had drawn our attention to Page 254-261 of APB, wherein in reply to Question No.26 (Page 260 of APB), the respective details as regards the investments made by the subject share applicant companies, viz. (i) M/s. Prithvi Dealcom Pvt. Ltd.: Rs. 3.45 crore; and (ii) M/s. Shri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(Appeals) had rightly rejected the assessee's claim that no addition as regards its unabated assessment for the subject year was called for. The Ld. CIT, DR in support of his contention regarding the aforementioned issue had relied upon the consolidated report filed by the ACIT, Bilaspur, dated 08.09.2023, which reads as under: (B). Re: In absence of a valid approval u/s. 153D r.w.s. 153B(1)(a) of the Act, the assessment order passed by the A.O u/s. 143(3) r.w.s. 153A of the Act dated 30.12.2019 was invalid and bad in law: 28. Apropos the ground of cross objection No.3 (revised), we find that the assessee company has assailed the order of the CIT(Appeals) to the extent he had rejected its claim that in absence of a valid approval as mandated u/s. 153D r.w.s. 153B(1)(a) of the Act, the assessment order passed by the A.O u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019 was invalid and bad in law and was liable to be struck down/quashed on the said count itself. 29. S/shri Vijay Mehta and Sunil Kumar Agrawal, the Ld. ARs for the assessee company had at the threshold drawn our attention to the "draft assessment order" that was forwarded by the DCIT, Central Circle-2, Raipur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble High Court of Allahabad in the case of Pr. CIT Vs. Sapna Gupta (2023) 147 taxmann.com 288 and Pr. CIT Vs. Siddharth Gupta (2023) 450 ITR 534 (All. HC), and that of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Shiv Kumar Nayyar (2024) 163 taxmann.com 9 (Del.HC). Also, the Ld. AR in support of his contention that in case approval was granted in a mechanical manner without application of mind by the Addl./Jt. CIT, then the same vitiated the assessment order, had relied upon the judgment of the Hon'ble High Court of Orissa in the case of ACIT Vs. Serajuddin & Co. (2023) 454 ITR 312(Orissa). The Ld. AR further submitted that a mechanical approval without application of mind by the Addl./Jt. CIT would be invalid in the eyes of law. The Ld. AR in support of his contention had relied on the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT-(Central)-2 Vs. Anuj Bansal (2024) 165 taxmann.com 2 (Del.). The Ld. AR further submitted that the "Special Leave Petition" (SLP) filed by the revenue in the aforementioned case had been dismissed by the Hon'ble Apex Court vide its order passed in the case of Pr. CIT Vs. Anuj Bansal (2024) 165 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to the assessee company and directed it to submit its reply regarding the comments of the Registered/department Valuer, viz. M/s.Frontline Consultants Pvt. Ltd. by 28.12.2019 (upto 02.00 pm). Also, a "Show Cause Notice" ("SCN"), dated 27.12.2019 was issued by the A.O to the assessee company therein calling upon it to put forth an explanation that as to why an addition of Rs. 1,61,42,749/- towards difference in value of stock may not be made in its case u/s. 69 of the Act by 28.12.2019 (upto 2.00 pm). The Ld. AR submitted that the assessee company in response to the letter dated 27.12.2019 (supra) of the A.O had submitted its reply on the same date, i.e. on 27.12.2019. Referring to the aforesaid facts, the Ld. AR submitted that now when the A.O had forwarded the impugned "draft assessment order" for approval to the Jt. CIT, Range-Central, Raipur on 26.12.2019, therefore, it is incomprehensible that as to how he had thereafter continued with the assessment proceedings. The Ld. AR submitted that it is not the case of the department that another "draft assessment order" incorporating the facts, viz. (i) receipt of report of the departmental valuer on 27.12.2019 ; (ii) letter dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the final assessment order, dated 30.12.2019. The Ld. AR had placed on record his written submissions dated 05.06.2024, wherein he had pointed out the detailed instances of difference between the consolidated "draft assessment order" that was forwarded by the A.O to the Jt. CIT, Range-Central, Raipur under his covering letter dated 26.12.2019 and the consolidated final assessment order passed by him u/s. 143(3) r.w.s. 153A/143(3) of the Act, dated 30.12.2019. 34. The Ld. AR submitted that as there were glaring differences between the "draft assessment order" (copy of which was provided by the Ld.CIT-DR in the course of hearing of the appeal) and the final assessment order passed by the A.O u/s. 143(3) of the Act, dated 30.12.2019, therefore, it could safely be concluded that the consolidated final assessment order passed by the A.O, i.e. DCIT, Central Circle-2, Raipur for A.Y. 2009-10 to 2018-19 was the not the one that was approved by the Jt. CIT, Range- Central, Raipur vide his letter dated 30.12.2019. The Ld. AR submitted that as the final assessment order, dated 30.12.2019 was not the same that was approved by the Jt. CIT, Range-Central, Raipur vice his letter dated 30.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 024. The Ld. DR had further relied on the consolidated report of the A.O dated 08.09.2023 on the aforesaid issue, wherein he had rebutted the assessee's claim that the A.O in absence of a valid approval having been granted by the Jt. CIT, Range-Central, Raipur had wrongly assumed jurisdiction and framed the impugned assessment vide his order passed u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019, which reads as under: (C) RE: On merits: 36. The Ld. DR has assailed the order of the CIT(Appeals) on the ground that the latter had grossly erred in law and facts of the case in deleting the addition of Rs. 5.75 crore made by the A.O u/s. 68 of the Act regarding bogus share capital/premium received by the assessee company from Kolkata based paper/shell companies. Elaborating on his contention, the Ld. DR submitted that as the assessee company during the subject year had allegedly received share application money/share capital/share premium of Rs. 5.75 crore from two investor companies, viz. (i) M/s. Prithivi Dealcom Pvt. Ltd. : Rs. 3.45 crore; and (ii) Shri Shyam Ply Traders Pvt. Ltd. : Rs. 2.30 crore, which were proved to be paper/shell companies not actively engaged in any bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share capital/share premium from them was not discharged. The Ld. DR submitted that a careful perusal of the bank accounts of the investor companies revealed that immediately before the subject investments with the assessee company an equivalent amount was transfered in their bank accounts. It was submitted by him that in case where an excess amount had come in the bank accounts of the investor companies, then the amount in excess of the investment with the assessee company was routed/diverted to other beneficiaries, i.e. the group entities of the assessee company. The Ld. DR submitted that the investor companies were worthless companies which were not involved in any business activities. Also, the Ld. DR to fortify his claim that the investor companies were paper/shell companies had drawn support from the fact that though they were holding substantial stakes in the assessee company but were neither involved in its management nor were in receipt of any revenue by way of dividend. It was submitted by him that merely for the reason that the investments made by the investor companies were channelized through banking channel was not sufficient to substantiate the authenticity of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in the case of Pr. CIT, Central-3 Vs. Abhisar Buildwell (P) Ltd, (2023) 454 ITR 212 (SC), the issue that in respect of an unabated assessment, no addition can be made by the A.O in absence of incriminating material found for the subject year during the course of search & seizure proceedings u/s. 132 of the Act or requisition u/s. 132A of the Act is no more res-integra. For the sake of clarity, the observations of the Hon'ble Apex Court on the aforesaid issue are culled out as under: "5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the subsection pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of 'undisclosed income' for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) 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: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/148 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and 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 duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income declared in the returns; and iv) 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. Meaning thereby, in respect of completed/unabated assessments, 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, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Civil Appeal Nos.7738-7739/2021, 7736-7737/2021, 7732-7735/2021 and 7740-7743/2021 15. Insofar as the aforesaid Civil Appeals preferred by the assessee - M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned, these appeals have been preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oils down to two fundamental aspects, viz. (A) that as to whether or not assessment proceedings in the case of the assessee company for A.Y. 2010-11 were unabated as on the date on which search & seizure proceedings u/s. 132 of the Act were conducted on it, i.e. on 24.10.2017; and (B) that as to whether or not any incriminating material pertaining to the subject year, i.e. A.Y. 2010-11 was found in the course of the search & seizure proceedings conducted on the assessee company. (A). Re: As to whether assessment proceedings in the case of the assessee company were unabated as on the date on which search & seizure proceedings u/s. 132 of the Act were conducted on the assessee company i.e. on 24.10.2017 43. Admittedly, it is an undisputed fact that assessment proceedings in the case of the assessee company for the subject year, i.e. A.Y. 2010-11 on the date of search i.e. on 24.10.2017 were unabated. On this aspect, neither anything to the contrary is discernible from the record nor any contention disputing the said factual position had been raised before us by the Ld. CIT-DR or stated in the report filed by the A.O. (B). Re: As to whether any incriminating material pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order. On the contrary, the A.O while framing the assessment had observed that additions/disallowances can validly be made while framing the assessment u/s. 153A of the Act irrespective of the fact that no incriminating material for the subject year was found in the course of the search proceedings. Although the contention of the Ld. DR as had been canvassed before us, i.e. incriminating material was found in the course of the search & seizure proceedings conducted u/s. 132 of the Act on the assessee company does not emanate from the assessment order, but in all fairness, and for the sake of completeness, we shall hereinafter deal with the same. 47. Apropos the issue in hand, i.e. as to whether or not any incriminating material was found in the course of search & seizure proceedings conducted on the assessee company on 24.10.2017, we find that the CIT(Appeals) had observed that the A.O had mentioned at Para 3 of the assessment order that various books of accounts, documents, loose papers were seized during the course of search and seizure proceedings conducted on the assessee company. The CIT(Appeals), further observed that the assessee company in compliance to notice u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts, documents, loose papers were seized. The appellant assessee has filled the returns of income in response to notice u/s. 153A issued for A.Y 2009-10 to 2017-18 and the assessee filed returns of income for A.Y 2012-13 to 2017-18 on 26.10.2019 and AYs 2009-10 to 2011-12 on 25.12.2019. Shri. Amit Maloo C.A and authorized representative attended the assessment proceedings before the A.0 from time to time and filled written submissions with supporting documents which were placed on record by the A.O. Regular books of accounts were also produced and checked with seized material by the A.O. Inspection and copies of all seized documents was provided by the A.O. 4.1.1 Once the assessee has participated in assessment proceedings before the A.O the appellant assessee cannot claim that issue of notice u/s. 153A for A.Ys 2010-11 to 2015-16 is not in order. Once the assessee has been put to notice and has filed returns in response to the notices and has attended the assessment proceedings, it cannot be said that issue of notice u/s 153A is not in order. It is seen that the issue of notice u/s 153A by the A.O for A.Ys. 2010-11 to 2015-16 is in order. A perusal of the assessment order s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a single iota of doubt and evidence was found regarding the appellant's engagement in procuring bogus accommodation entry. Nonetheless, no incriminating material relevant to the additions made has been referred by the AO which pertains to the alleged bogus share application money availed by the appellant from its five group companies which have been simultaneously assessed with same AO. It is seen that during the course of impugned assessment proceedings, the AO called for information from the assessee and the assessee in reply has filed all the desired information as sought by the AO. However, the AO took an adverse view solely on the basis of statements recorded of the third party and on the basis of findings and observations of Investigation Wing. It is important to note that assessee and the investor companies were covered under the search & survey operation carried out at residential and business premises of various concerns of the group from where nothing incriminating was found during the course of said search relating to the additions made by the AO. The AO ought to have connected the alleged bogus share application money with independent cogent evidence that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and 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." Based on the aforesaid observations of the Hon'ble Apex Court, we find that in a case of an unabated/completed assessment for the subject year, it is only where any incriminating material pertaining to the said year is found or unearthed during the course of the search proceedings that the A.O can validly assume jurisdiction for making additions while framing assessment for the said year u/s. 153A of the Act. 50. We shall now deal with the contention of the Ld. DR that "incriminating material" was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document, viz. Page 44 of LPS-1, we concur with the Ld. AR that the amounts therein mentioned are the details of infusion of fresh share capital and share premium with the assessee company during the subject year, which were recorded in its audited financial statements filed alongwith its original return of income for the year under consideration. Our aforesaid view can safely be gathered from a conjoint perusal of "Schedule A" forming part of the "balance sheet" of the assessee company as of 31.03.2010, Page 16 of APB and the contents of the aforesaid seized document, viz. Page 44-LPS-1. The "balance sheet" of the assessee company for the year under consideration reveals the share capital at Rs. 1,90,70,000/- (as on 31.03.2010) and at Rs. 99,10,000 (as on 31.03.2009) as under: "(i) Shareholders fund Year Ended Year Ended 31-03-2010 31-03-2009 (a) Share Capital A 1,90,70,000 99,10,000" It transpires on a careful scrutinizing of the aforesaid "balance sheet", that infusion of fresh share capital during the subject year was Rs. 91,60,000, i.e. Rs. 1,90,70,000/- (as on 31.03.2010) (minus) Rs. 99,10,000/- (as on 31.03.2009). We, thus, find substance in the Ld. AR's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Delhi in the case of Pr. CIT Vs. Param Dairy Ltd. (2021) 439 ITR 89 (Del.). In the case before the Hon'ble High Court, search and seizure operations u/s. 132 of the Act were carried out on the assessee group on 28.02.2024. Although, the assessee company in its return of income had claimed cash payments of about Rs. 17 crores to dairy owners from whom it had purchased milk, but in the course of search proceedings, it was found that the said payments were not made to the dairy owners but to middlemen. As the cash payments made by the assessee company to middlemen were not permitted, thus, the A.O made addition of the said amount to the income of the assessee company. 55. On appeal, the Tribunal observed that since the entries of cash payments were made in the books of account of the assessee company, which had been subjected to audit and formed part of the return of income filed by the assessee company, therefore, it could not be brought within the meaning of incriminating evidence found during the course of search proceedings. On further appeal, the Hon'ble High Court approved the view taken by the Tribunal. The Hon'ble High Court, inter alia, observed that the regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The details of shell/paper companies and year wise investment are as under: As observed by us hereinabove, it is the Ld. ARs' claim that now when the share application money received by the assessee company from the aforementioned investor companies were recorded in its books of account, it was, thus, incomprehensible as to how the same could be brought within the meaning of "incriminating material" as had been canvassed by the department's counsel. In fact, we find on a perusal of the record that the assessee company vide its submissions, dated 31.08.2020 filed with the CIT(Appeals), Page 200 of CIT(A)'s order, had stated that shares were issued to the aforesaid share applicants against the share application money of Rs. 5.75 crore (supra) that was received from them, as under: 59. We are of a firm conviction that now when the share application money of Rs. 5.75 crore (supra) received by the assessee company from the aforementioned share applicants, viz. (i) M/s. Prithvi Dealcom Pvt. Ltd. : Rs. 3.45 crore; and (ii) M/s. Shri Shyam Ply Traders Pvt. Ltd. : Rs. 2.30 crore is found recorded in its audited books of accounts, and had formed part of its financial statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vested jurisdiction with the A.O to make additions towards bogus share application money/share capital/share premium while framing the assessment of the assessee company for the subject year, i.e. A.Y. 2010-11. 62. We are unable to persuade ourselves to subscribe to the aforesaid claim of the department. As the statements of the directors of the investor companies were recorded by the DDIT(Inv.), Unit-IV, Kolkata much prior to the search & seizure proceedings conducted on the assessee company on 24.10.2017, therefore, the same cannot be brought within the meaning of incriminating material found or unearthed during the course of search & seizure proceedings conducted on the assessee company. 63. At this stage, we may observe that various courts have held that though a statement certainly has an evidentiary value and relevance as contemplated under the "Explanation" to Section 132(4) of the Act, but the same on such standalone basis without reference to any other material found during the search and seizure operations would not bring it within the meaning of "incriminating material" found or unearthed in the course of search proceedings. The Hon'ble High Court of Delhi in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment of the Hon'ble High Court of Delhi in the case of PCIT Vs. Anand Kumar Jain HUF (2021) 432 ITR 384 (Del). The Hon'ble High Court had observed that the existence of incriminating material found during the course of search is a sine-qua-non for making an addition pursuant to search and seizure operation. It was observed by the Hon'ble High Court that though the statement has evidentiary value and relevance as contemplated under the "Explanation" to Section 132(4) of the Act but the same on a standalone basis without reference of any material recovered during the course of search and seizure operation cannot empower the A.O to frame the assessment. In the case before the Hon'ble High Court statement of an accommodation entry provider that was recorded u/s. 132(4) of the Act had formed the foundation of the assessment made by the A.O u/s. 153A of the Act. The Hon'ble High Court while rejecting the claim of the revenue, observed that the statement of the accommodation entry provider recorded u/s. 132(4) of the Act, wherein he had admitted of having provided accommodation entry to the assessee and his family members through their chartered accountant, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany, was confronted with the impounded material that was seized from the premises of the chartered accountant of the assessee company, viz. Shri Amin Khatri, wherein the names of few investor/subscriber companies were mentioned. The Ld. AR submitted that Shri Sanjay Agrawal (supra) in his statement recorded u/s. 132(4) of the Act, dated 24.10.2017 had come up with an evasive reply. Elaborating on his contention, the Ld. DR submitted that Shri Sanjay Agrawal (supra) on being queried about the investments made by the aforementioned investor companies had stated that he had no knowledge about the same. Also, the Ld. DR submitted that Shri Sanjay Agrawal (supra) in his reply to Question No.7 of his statement recorded u/s. 131(1A) of the Act, dated 29.01.2018, had admitted that the share capital/premium was received by the assessee company from the Kolkata based investors through banking channels. Carrying his contention further, the Ld. DR had tried to impress upon us that as the evasive approach adopted by Shri Sanjay Agrawal (supra) regarding the investments made by the aforementioned share applicant companies was in itself incriminating in nature, thus, the same vested jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material" found in the course of search & seizure proceedings conducted on the assessee company on 24.10.2017. Also, we are unable to comprehend that as to how any adverse inferences could be drawn from the statements of Shri Sanjay Agrawal (supra) to the extent he had stated that investment towards share application money/share capital/share premium was received from the Kolkata based investors companies through banking channel. We, thus, in terms of our aforesaid deliberations are unable to concur with the claim of the department that the evasive replies of Shri Sanjay Agrawal (supra) brought the same within the meaning of "incriminating material" found in the course of search & seizure proceedings conducted on 24.10.2017. (D) Re: Insignificant financials of the investor companies: 70. The Ld. DR by drawing support from the report of the A.O dated 08.09.2023, stated that the assessee company had failed to discharge the onus that was cast upon it as regards proving the identity and creditworthiness of the investor companies, as well as the genuineness of the transactions of receipt of share application money/share capital/share premium from them. Elaborating further, the Ld. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l/share premium, there could be no justification for summarily drawing of any adverse inferences based on the aforesaid statements which were never confronted to the assessee company. Also, we cannot remain oblivion of the fact that as the pre-amended provisions of Section 68 of the Act were applicable for the subject year, i.e. A.Y. 2009-10, therefore, in the backdrop of the observations of the Hon'ble Apex Court in the case of CIT vs. Lovely Exports Pvt. Ltd. (2008) 216 CTR 195 (SC), now when the identity of the share subscriber/investor companies which had admitted their respective investments towards share application money/share capital/share premium with the assessee company was established, then, the proper recourse available to the A.O was to proceed against the said investor companies and not make any addition in the hands of the assessee company. For the sake of clarity, the observations of the Hon'ble Apex Court which had dismissed the "Special Leave Petition" (SLP) filed by the revenue are culled out as under: "Can the amount of share money be regarded as undisclosed income under section 68 of the Income-tax Act, 1961? We find no merit in this special leave pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal Commissioner of Income Tax, Central-3 Vs. Abhisar Buildwell (P) Ltd. (supra), the remedy is still available to the revenue to initiate reassessment proceedings u/ss.147/148 of the Act, subject to fulfillment of the conditions mentioned in the said statutory provisions. Accordingly, the A.O in the present case is directed to consider initiation of reassessment proceedings u/ss. 147/148 of the Act in the backdrop of Section 150 of the Act as per the extant law. 77. We shall now deal with the assessee's claim that in absence of a valid approval of the Jt. CIT, Range-Central, Raipur u/s. 153D r.w.s. 153B(1)(a) of the Act the assessment order passed by the A.O u/s. 147 r.w.s. 153A of the Act, dated 30.12.2019 was invalid and bad in law. 78. Before proceeding any further, we deem it fit to cull out the provisions of Section 153D of the Act as had been made available on the statute vide the Finance Act, 2007 w.e.f. 01.06.2007, as under: "153D. No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of subsection (1) of section 153A or the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sa in the case of ACIT Vs. Serajuddin & Co. (2023) 454 ITR 312 (Orissa), wherein it was held that non-compliance with the requirements of Section 153D or granting approval without proper examination can lead to the invalidation of the assessment order. It was, thus, observed that a mere mechanical approval without proper examination and understanding of the draft assessment order or case records of the case vitiated the assessment order. Based on the aforesaid settled position of law, we are of a firm conviction that an approval u/s. 153D of the Act granted after due application of mind and verifying the draft assessment order in the backdrop of the seized material is mandatory for framing of a valid assessment u/s. 153A of the Act. 80. We shall now in the backdrop of the aforesaid settled position of law, deliberate upon the contentions advanced by the Ld. AR, based on which, he has assailed the validity of the assessment order that is stated to have been passed by the A.O u/s. 143(3) r.w.s. 153A of the Act dated 30.12.2019 in absence of a valid approval u/s. 153D of the Act of the Jt. CIT, Range- Central, Raipur. 81. Admittedly, it is a matter of fact borne from record that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the "draft assessment order" vide his letter dated 26.12.2019, had thereafter continued with the assessment proceedings. Although, the Jt. CIT, Range-Central, Raipur had vide his common letter dated 30.12.2019, inter alia, granted approval u/s. 153D of the Act in the case of the assessee company for the subject year, i.e. A.Y. 2010-11, but there is nothing on record which would reveal that the proceedings that were carried out by the A.O subsequent to forwarding of the "draft assessment order" vide his letter dated 26.12.2019 to the Jt. CIT, Range-Central, Raipur were brought to the latter's notice. As is discernible from the record, we find that the assessment proceedings continued by the A.O after forwarding the "draft assessment order" to the Jt. CIT, Range-Central, Raipur for approval u/s. 153D of the Act vide his letter dated 26.12.2019 (received by the office of Jt. CIT on same date) were never brought to the latter's notice. For the sake of clarity, the proceedings continued by the A.O after forwarding of the "draft assessment order" to the Jt. CIT, Range- Central, Raipur on 26.12.2019 are chronologically culled out as under: * Receipt by the A.O of the letter/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27.12.2019 of the registered /department's valuer, viz. M/s. Frontline Consultants Pvt. Ltd. by 27.12.2019 (upto 05.00 pm); (iii) the "Show Cause Notice" (SCN) dated 27.12.2019 issued by the Dy.CIT, Central Circle-2, Raipur calling upon the assessee company to furnish its reply that as to why the difference of stock amounting to Rs. 1,61,42,749/- may not be added to its income u/s. 69 of the Act by 28.12.2019 (upto 2.00 pm); and (iv) the reply dated 27.12.2019 of the assessee company filed with the A.O wherein it had pointed out the discrepancies in the letter/comments dated 27.12.2019 of the registered/department's valuer, viz. M/s. Frontline Consultants Pvt. Ltd. 85. We further find that as brought to our notice by Shri Vijay Mehta, the Ld. AR and, rightly so, the final assessment order passed by the A.O u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019 is substantially different from the "draft assessment order" that was forwarded by the A.O vide his letter dated 26.12.2019 to the Jt. CIT, Range-Central, Raipur for approval u/s. 153D of the Act and was approved by the latter on 30.12.2019. As observed by us hereinabove, a conjoint reading of the "draft assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;rate' & 'value' of 'Dolomite': 8 Dolomite 939.66 750 704745 939.66 750 704745 0 While, in the "final assessment order for the same Dolomite row no.8' is as under: 8 Dolomite 939.66 12000 11275860 0 0 0 11275860 (e) in the 'draft assessment order', total of table of 'Excess Items', 'total difference value' mentioned at Rs. 3,42,90,294; while, as per "final assessment order', 'total difference value' mentioned at Rs. 5,32,56,634; (iii) at Page 54 of the 'draft Assessment order' i.e., undated Para 5.1 - table of 'Short Items' following differences are there from the 'final assessment order'. (a) in 'Short item' table in 'draft assessment order' there is no row for 'Charcoal'; while in the 'final assessment order', 'Charcoal' row has been added. (b) In 'Iron Ore Fines' row, there is complete differences in figures of the item, as 'rate' taken in draft assessment order is Rs. 775, while in the 'final assessment order', 'rate' taken at Rs. 2,000; similar is for 'difference of value' taken at Rs. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1419 of 2012 dated 15.01.2013.(copy enclosed). 6. We further rely upon the order of the Pune Bench of Hon'ble Tribunal in the case of BVG India Ltd v. DCIT (2023) (Pune-Trib) dated 19-10-2023, IT(SS)A No.10 to 16/Pun/2023 & ITA No.516/Pun/2023, AY14-15 to 19-20 (Para 21 & Para 42 to 46)wherein, the above referred decision of the Hon'ble Bombay High Court has been followed (although some other decision of the Bom HC has been reproduced by oversight).(copy enclosed). 7. We request Your Honors to hold that the assessment order passed by the A.O. is bad in law." The Ld. CIT-DR on being confronted with the aforesaid difference/variance in the "draft assessment order" and the final assessment order, dated 30.12.2019 failed to come forth with any reply. 86. Based on the aforesaid facts, we find that the A.O in the present case before us, had after forwarding the "draft assessment order" for approval u/s. 153D of the Act to the Jt. CIT on 26.12.2019 not only continued with the assessment proceedings, but had also after receiving the approval of the Jt. CIT, Range-Central, Raipur vide his letter, dated 30.12.2019, tinkered with the said "draft assessment order" which, thus, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid facts, we are of a firm conviction that as the Jt. CIT, Range-Central, Raipur had no occasion to consider the changes/modifications/alteration carried out by the Dy.CIT(Central Circle)-2, Raipur to the "draft assessment order" that was approved by him on 30.12.2019; nor was informed of the assessment proceedings that were continued by the A.O after forwarding of the "draft assessment order" on 26.12.2019, therefore, we concur with the Ld. AR that the final assessment order was passed by the A.O without obtaining the approval of the Jt. CIT, Range-Central, Raipur as required per the mandate of Section 153D of the Act. Our aforesaid view is supported by the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Akil Gulamali Somji, ITA No. 1416 to 1419 dated 15.01.2013 and the order of ITAT, Pune in the case of BBG India Ltd. Vs. DCIT, ITA No.11 to 16/PUN/2023, dated 19.10.2023. Accordingly, in absence of a valid approval having been granted by the Jt. CIT, Range-Central, Raipur, based on which, the common final assessment order had been passed by the A.O u/s. 143(3) r.w.s. 153A/143(3) of the Act, dated 30.12.2019, we are of the view that the same canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case of the assessee company before us, there is no approval u/s. 153D of the Act by the Jt. CIT, Range- Central, Raipur qua the final assessment order that had been passed by the A.O u/s. 143(3) r.w.s. 153A/143(3) of the Act, dated 30.12.2019, therefore, the same renders the facts involved in the case before us as distinguishable as against those involved in the case of Hitesh Golchha Vs. ACIT (supra). Thus, the Ground of cross objection No.3 (revised) raised by the assessee company is allowed in terms of our aforesaid observations. 92. As we have quashed the assessment framed/vacated the additions made by the A.O u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019 for want of valid assumption of jurisdiction on two grounds, viz. (i) the making of additions in the case of unabated assessment for the subject year despite the fact that no incriminating material was found during the course of search & seizure proceedings conducted on the assessee company on 24.10.2017; and (ii) the framing of the assessment of the assessee company in absence of any valid approval of the Jt. CIT u/s. 153D of the Act therefore, we refrain from dealing with the contentions advanced by the Ld. author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Ply Traders Pvt. Ltd. Unnati Commodeal Pvt. Ltd. Chitrakoot Infonet Pvt. Ltd. Eternity Commercial Pvt. Ltd. Total Sl. No. F.Y Amount Amount Amount Amount Amount 1 2009-10 40500000 23000000 - - - 63500000 2 2010-11 38500000 13700000 12000000 - - 64200000 3 2011-12 22300000 54200000 9000000 - - 85500000 4 2012-13 1275000 - 69350000 15300000 13000000 98925000 5 2013-14 - - - - 6500000 6500000 Grand Total 102575000 909000000 90350000 15300000 19500000 318625000 96. Apropos the seized document, viz. Page 44 of LPS-1, we concur with the Ld. AR that the amounts therein mentioned are the details of infusion of fresh share capital and share premium with the assessee company during the subject year which were recorded in its audited financial statements filed alongwith its original return of income for the subject year. Our aforesaid view can safely be gathered from a conjoint perusal of "Schedule A" forming part of the "balance sheet" of the assessee company as on 31.03.2011, Page 16 & 19 of APB and the contents of the aforesaid seized document, viz. Page 44-LPS-1. The "balance sheet" of the assessee company for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the same cannot be brought within the meaning of "incriminating material" found during the course of search proceedings. Our aforesaid view that a transaction recorded in the books of account of an assessee, which had been subjected to audit and was disclosed in its financial statements enclosed along with the original return of income, cannot be brought within the meaning of "incriminating material" found in the course of search proceedings is supported by the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Param Dairy Ltd. (2021) 439 ITR 89 (Del.). In the case before the Hon'ble High Court, search and seizure operations u/s. 132 of the Act were carried out on the assessee group on 28.02.2024. Although, the assessee company in its return of income had claimed cash payments of about Rs. 17 crores to dairy owners from whom it had purchased milk, but in the course of search proceedings, it was found that the said payments were not made to the dairy owners but to middlemen. As the cash payments made by the assessee company to middlemen were not permitted, thus, the A.O made addition of the said amount to the income of the assessee company. 99. On appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search assessment, it is found that during the block period from A.Y 2009-10 to 2018-19, M/s NR Ispat & Power Pvt. Ltd has introduced its unaccounted money into the books in the form of share application money from various Kolkata Based shell companies. The rotation of money through various bank accounts and companies was carried by entry operator. An entry operation is the person who is in the business of giving accommodation entries in lieu of cash/cheque of equal amount after charging certain percentage of commission in cash. The details of shell/paper companies and year wise investment are as under: As observed by us hereinabove, it is the Ld. ARs' claim that now when the share application money received by the assessee company from the aforementioned investor companies was recorded in its books of account, it was, thus, incomprehensible as to how the same could be brought within the meaning of "incriminating material" as had been canvassed by the department's counsel. The Ld. AR submitted that the amount of Rs. 6.42 crore, i.e. aggregate amount mentioned in the seized document, viz. Page 20 of LPS-1, was the amount of share application money received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration had received its unaccounted money of Rs. 6.42 crores in the garb of share application money from 3 paper/shell companies but there can be no gainsaying that no incriminating material was found or unearthed during the course of search proceedings which would support the same. In fact, it is not even the case of the department that any incriminating material evidencing receipt of accommodation entries by the assessee company in the garb of share application money/share capital/share premium from the aforementioned investor/subscriber companies was found in the course of the search & seizure proceedings conducted on 24.10.2017. 105. As the aforesaid issue had been deliberated at length by us in the preceding year, i.e. A.Y. 2010-11 in CO No.12/RPR/2022, wherein after dealing with the multi-facet observations of the lower authorities on the issue as to whether or not any "incriminating material" was found in the course of the search & seizure proceedings conducted on the assessee company on 24.10.2017, we had answered the same in negative and decided the issue in favour of the assessee company, therefore, our adjudication, on the said issue shall mutatis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted on 24.10.2017, viz. (i) Page 44 of LPS 1; and (ii) Page 20 of LPS-1. For the sake of clarity, the scanned copies of the aforesaid seized documents are culled out as under: Page 44-LPS-1 M/s. N.R ISPAT & POWER PVT. LTD DETAILS OF INFUSION OF CAPITAL Year Paid-up capital Share premium Total 2007-08 300000 0 300000 2008-09 9610000 22690000 32300000 2009-10 9160000 105340000 114500000 2010-11 0 0 0 2011-12 12648000 145152000 157800000 2012-13 6578940 62770958 69349898 2013-14 3192470 32882441 36074911 2014-15 2384800 26232800 28617600 2015-16 154150 1695650 1849800 Total 44028360 396763849 440792209 Page 20-LPS-1 Prithvi Deal Com Pvt. Ltd. Shri Shyam Ply Traders Pvt. Ltd. Unnati Commodeal Pvt. Ltd. Chitrakoot Infonet Pvt. Ltd. Eternity Commercial Pvt. Ltd. Total Sl. No. F.Y Amount Amount Amount Amount Amount 1 2009-10 40500000 23000000 - - - 63500000 2 2010-11 38500000 13700000 12000000 - - 64200000 3 2011-12 22300000 54200000 9000000 - - 85500000 4 2012-13 1275000 - 69350000 15300000 13000000 98925000 5 2013-14 - - - - 6500000 6500000 Grand Total 102575000 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 128,030,000 128,030,000 Add: Amount received during the year 145152000 - Amount at the end of the year 273182000 128030000 In the backdrop of the aforesaid facts, we find that as mentioned in the aforesaid seized document, i.e. Page No. 44 of LPS-1, the assessee company during the subject year had received an amount of Rs. 14,51,52,000/- as "Share premium", a fact which was disclosed in its audited "balance sheet" that was filed along with its original return of income for the said year, which as observed by us hereinabove was scrutinized by the A.O while framing the assessment vide his order passed u/s. 143(3) of the Act, dated 26.03.2015. 112. Based on our aforesaid observations, we are of the view that as the contents of the seized document, viz. Page No.44 of LPS-1 makes a mention that an amount of share capital (Rs. 1,26,48,000/-) and share premium (Rs. 14,51,52,000/-) was received by the assessee company during the subject year, i.e. A.Y. 2012-13, a fact which was disclosed in its audited "balance sheet" for the said year, therefore, the same cannot be brought within the meaning of "incriminating material" found during the course of search proceedings. Our aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. AR submitted that the same refers to the share application money that was received by the assessee company during the subject year from the investor companies, viz. (i) M/s. Prithvi Dealcom Pvt. Ltd. : Rs. 2.23 crore; (ii) M/s. Shri Shayam Ply Traders Pvt. Ltd. : Rs. 5.42 crore; and (iii) M/s. Unnati Commodeal Pvt. Ltd. : Rs. 90 lacs, which were recorded in its books of accounts. As the amount of "share application money" received during the subject year by the assessee company from one of the investor company, viz. M/s. Prithvi Dealcom Pvt. Ltd. as per the seized document, viz. Page-20-LPS-1 was Rs. 2.23 crore, while for that as per the "books of accounts" was Rs. 2.59 core, i.e. as adopted by the A.O, wherein the latter had held the same as the unaccounted money of the assessee company, the Ld. AR was queried about the same. In reply, the Ld. AR submitted that the assessee company had during the year under consideration received Rs. 2.59 crore (supra) from the aforementioned investor company. The Ld. AR had drawn our attention to the bifurcated details of amounts received by the assessee company from the aforementioned investor company a/w. the latter's source, Page 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been canvassed by the department's counsel. The Ld. AR submitted that as observed by the A.O, the assessee company as per its books of account had received an aggregate amount of share application money of Rs. 8.91 crore (supra) during the year under consideration, i.e. A.Y. 2012-13, against which shares were allotted to the aforesaid share applicants during the subject year itself, and complete details as regards the same were filed by the assessee company vide its reply filed with the A.O on 10.12.2019, i.e. during the course of the impugned assessment proceedings, Page 433-443 of APB. The Ld. AR in order to fortify his contention had drawn our attention to Page 440 of APB. In fact, we find on a perusal of the record that the assessee company vide its submissions filed with the CIT(Appeals), Page 236-237 of CIT(A)'s order, had stated that shares were allotted to the aforesaid share applicants against the share application money of Rs. 8.91 crore (supra) that was received from them, as under: 117. We are of a firm conviction that now when the share application money of Rs. 8.91 crore (supra) received by the assessee company from the aforementioned share applicants, viz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after dealing with the multi-facet observations of the lower authorities on the issue as to whether or not any "incriminating material" was found in the course of the search & seizure proceedings conducted on the assessee company on 24.10.2017, had answered the same in negative and decided the issue in favour of the assessee company, therefore, our adjudication, on the said issue shall mutatis-mutandis apply for disposing the captioned cross-objection, viz. CO No.14/RPR/2022 for A.Y. 2012-13 of the assessee company. The Ground of cross objection No.2 is allowed in terms of our aforesaid observations. 120. Apropos the issue that in absence of any valid approval of the Jt. CIT u/s. 153D of the Act, the assessment order passed by the A.O u/s. 143(3) r.w.s. 153A of the Act, dated 30.12.2019 was invalid and bad in law, we are of the view that as the said issue had been deliberated at length by us in the preceding year, i.e. A.Y. 2010-11, while disposing off the cross objection, i.e. CO No.12/RPR/2022, therefore, our adjudication rendered on the said issue in the aforementioned cross-objection shall mutatis-mutandis apply for disposing the captioned cross-objection, viz. CO No.14/RPR/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Unnati Commodeal Pvt. Ltd. Chitrakoot Infonet Pvt. Ltd. Eternity Commercial Pvt. Ltd. Total Sl. No. F.Y Amount Amount Amount Amount Amount 1 2009-10 40500000 23000000 - - - 63500000 2 2010-11 38500000 13700000 12000000 - - 64200000 3 2011-12 22300000 54200000 9000000 - - 85500000 4 2012-13 1275000 - 69350000 15300000 13000000 98925000 5 2013-14 - - - - 6500000 6500000 Grand Total 102575000 909000000 90350000 15300000 19500000 318625000 124. We may herein observe that the case of the assessee company was originally assessed by the A.O vide his order u/s. 143(3) of the Act dated 16.02.2016, Page 19-22 of APB. We concur with the Ld. AR that the amounts mentioned in the seized document, viz. Page 44 of LPS-1, are the details of infusion of fresh "share capital" and "share premium" with the assessee company during the subject year which were recorded in its audited financial statements filed alongwith its original return of income for the said year, and had been scrutinized by the A.O while framing the original assessment in its case vide order passed u/s. 143(3) of the Act, dated 16.02.2016. Our aforesaid view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized document, viz. Page No.44 of LPS-1 makes a mention that an amount of share capital (Rs. 65,78,940/-) and share premium (Rs. 6,27,70,958/-) was received by the assessee company during the subject year, a fact which was duly disclosed in its audited "balance sheet" for the said year, therefore, the same cannot be brought within the meaning of "incriminating material" found during the course of search proceedings. Our aforesaid view that a transaction recorded in the books of account of an assessee, which had been subjected to audit and was disclosed in its financial statements enclosed along with the original return of income cannot be brought within the meaning of "incriminating material" found in the course of search proceedings is supported by the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Param Dairy Ltd. (2021) 439 ITR 89 (Del.). In the case before the Hon'ble High Court, search and seizure operations u/s. 132 of the Act were carried out on the assessee group on 28.02.2024. Although, the assessee company in its return of income had claimed cash payments of about Rs. 17 crores to dairy owners from whom it had purchased milk, but in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PB. 130. Before proceeding any further, it would be pertinent to point out that the A.O while framing the assessment had, inter alia, observed that the share application money received by the assessee company for the subject year, i.e. A.Y. 2013-14 was recorded in its books of account. In fact, the A.O had observed that the assessee company in the garb of share application money stated to have been received from various Kolkata based paper/shell companies introduced its unaccounted income in its books of account. For the sake of clarity, the observations of the A.O are culled out as under: "4.1 During the course of search assessment, it is found that during the block period from A.Y 2009-10 to 2018-19, M/s NR Ispat & Power Pvt. Ltd has introduced its unaccounted money into the books in the form of share application money from various Kolkata Based shell companies. The rotation of money through various bank accounts and companies was carried by entry operator. An entry operation is the person who is in the business of giving accommodation entries in lieu of cash/cheque of equal amount after charging certain percentage of commission in cash. The details of shell/paper companies an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany to the aforesaid respective share applicants in lieu of the share application money received from them, viz. (i) M/s. Prithvi Dealcom Pvt. Ltd. : 11,283 shares allotted (for Rs. 12,74,979/-); (ii) M/s. Eternity Commercial Pvt. Ltd.: 115044 shares allotted (for Rs. 1,29,99,972/-); (iii) M/s. Chirakoot Infonet Pvt. Ltd. : 135398 shares allotted (Rs.1,52,99,974/-); and (iv) M/s. Unnati Commodeal Pvt. Ltd. : 657894 shares allotted for Rs. 6,93,49,900/- i.e. much prior to the search and seizure proceedings conducted on 24.10.2017, therein further supports the assessee's claim that the contents of the seized document, viz. Page 20-LPS-1 cannot be brought with the meaning of "incriminating material" found during the course of search and seizure proceedings conducted on the assessee company on 24.10.2017. 132. Although it is the claim of the department that the assessee company during the year under consideration had received its unaccounted money of Rs. 9,89,25,000/- in the garb of share application money from 4 paper/shell companies but there can be no gainsaying that no incriminating material was found or unearthed during the course of search proceedings which would support t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Range-Central, Raipur u/s. 153D of the Act remains the same as was there before us in the preceding year, i.e. A.Y. 2010-11, in CO No.12/RPR/2022, therefore, the order therein passed shall mutatis mutandis apply for disposing the captioned appeal filed by the assessee company viz. ITA No. 04/RPR/2021 for A.Y. 2018-19. 137. As we have in terms of our aforesaid observations quashed the assessment framed by A.O u/s. 143(3) of the Act, dated 30.12.2019 for want of valid assumption of jurisdiction, thus, while for the appeal filed by the assessee company in ITA No.04/RPR/2021 for A.Y. 2018-19 is allowed, the appeal filed by the revenue in ITA No.10/RPR/2021 for A.Y. 2018-19 having been rendered as academic in nature is dismissed as infructuous in terms of our aforesaid observations. 138. As we have in terms of our aforesaid observations quashed the assessment framed by the A.O for A.Y. 2018-19 vide his order passed u/s. 143(3) of the Act for want of valid assumption of jurisdiction, therefore, we refrain from adverting to the appeal filed by the revenue and the contentions raised by the Ld. AR on other issues which, thus, are left open. 139. In the result, while for the appeal filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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