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TMI Blog2024 (12) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... ience. 3. With the consent of the both the parties, the appeal of the assessee for AY 2014-15 is taken up first. ABA Builders Ltd in ITA No. 1351/Del/2021 for AY 2014-15 4. The appeal in ITA No.1351/Del/2021 for AY 2014-15, arises out of the order of the Commissioner of Income Tax (Appeals)-4, Kanpur [hereinafter referred to as "ld. CIT(A)", in short] in Appeal No. CIT(A)- IV/KNP/10781/2018-19 dated 15.07.2021 against the order of assessment passed u/s 153A/ 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 31.12.2018 by the Assessing Officer, DCIT, Central Circle-I, Noida (hereinafter referred to as "ld. AO"). 4.1 At the outset, we find that the assessee had filed a petition under Rule 27 of the Income Tax Appellate Tribunal (ITAT) Rules, 1963 raising the following grounds:- "1. The CIT(A) erred in upholding the action of the Assessing Officer in framing the assessment order for the year under consideration under section 153A of the Act, being a non-abated assessment, in the absence of any incriminating material found during the course of search action. 2. The CIT(A) erred in upholding the validity of the order of the Assessing Officer notwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment/ completed assessment. 4.3 Notice u/s 153A of the Act was issued to the assessee company for AY 2014-15 on 20.08.2018. The assessee filed its return of income on 17.09.2018 declaring total income of Rs. 4,09,71,342/- in response to notice issued u/s 153A of the Act. 4.4 The ABA Group is engaged in the field of real estate and is involved in construction of residential group housing/ commercial spaces in Noida and Greater Noida. This group is headed by Shri Pushpahas Agarwal and other persons controlling the affairs of the group are Shri Amit Modi, Shri Ram Avatar Ramsisiaria and Shri Jaikishore Totlani. The project of the group are Orange County, Indirapuram, Ghaziabad (delivered) ; Olive County, Vasundhara, Ghaziabad (delivered); Cherry County (possession started) ; Cleo County, Sector-121, Noida (possession started in 2017) and upcoming project Blue Casa, Noida. 4.5 In the search assessment proceedings for AY 2014-15, the following additions were made by the ld AO:- a. unsecured loan received by the assessee form two parties treating as accommodation entries u/s 68 of the Act Rs. 2,30,00,000/- b. Estimated commission expenditure on the aforesaid accommodation entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on 05.10.2018. In response to the same, the assessee filed its return on 26.10.2018 declaring loss of Rs. 15,61,754/-. We find that the assessee had originally filed its return of income for AY 2013- 14 on 25.09.2013 and due date of issuance of notice u/s 143(2) of the Act had expired on 30.09.2014. Admittedly no notice u/s 143(2) of the Act was issued to the assessee on the original return of income filed. Hence, AY 2013-14 falls under the category of unabated/ completed assessment as on the date of search i.e. 09.11.2016. The ld AO in the search assessment had made the following additions:- a. Addition towards receipt of share capital and share premium audited u/s 68 of the Act Rs. 90 lakhs b. issued commission expenditure on the aforesaid sum Rs. 45,000/- c. addition on account of bogus purchase Rs. 5,99,24,469/- 5.3 We have gone through the assessment order and we find that there is absolutely no whisper about the existence/ usage of any incriminating material or search material qua the aforesaid three additions. Hence, it could be safely concluded that there is absolutely no search material at all in respect of the aforesaid additions. The ld CIT(A) conceded the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny search material found during the course of search which is evident from the perusal of the assessment order as no seized material has been referred to by the ld AO for making the said addition. Hence, the decision rendered by us herein above for AY 2013-14 in CO 01/Del/2022 (supra) shall apply mutatis mutandis for this assessment year also. Accordingly, ground No. 3 raised by the assessee is allowed by quashing search assessment. In view of this, the other grounds raised by the assessee need not be adjudicated and they are left open. 6.2 In the result, the appeal of the assessee in ITA No. 1165/Del/2021 for AY 2014-15 is allowed. County Infrastructure Pvt. Ltd in ITA No. 1166/Del/2021 for AY 2015-16 (Assessee's appeal) 7. The appeal in ITA No.1166/Del/2021 for AY 2015-16, arises out of the order of the Commissioner of Income Tax (Appeals)-4, Kanpur [hereinafter referred to as "ld. CIT(A)", in short] in Appeal No. CIT(A)- IV/KNP/10743/2018-19 dated 15.07.2021 against the order of assessment passed u/s 153A/143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 31.12.2018 by the Assessing Officer, DCIT, Central Circle-I, Noida (hereinafter referred to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- Total Rs. 1,14,72,216/- 8.6 The ld AO based on discreet investigation made on this suppliers observed as under :- Name of the concern Address Findings of the investigation M/s. Bahubali Iron & Steel Co. Shop No. 113, Loha Mandi, Ghaziabad Its small Shop found to be closed. Further, enquiries have been made from local people and found that before 4-5 years there was small shop in the premises but it was categorically denied by person of nearby shops that iron bar trading was ever made from this shop. Therefore, it is clear that the premises were used by the group to take accommodation entry of bogus purchases iron bar. M/s. V. N. enterprises 39/C, Jain nagar, meerut No such Concern in the name of V.N. Enterprises could be located there. From the Local enquiry, no trace of V.N. Enterprises could be found at the given address. Hari Om Steel 1021, Behind Ind. Area, Bijoli, Jhansi No such concern in the name of Hari Om Steel could be located there. From the local enquiry, no trace of Hari Om Steel Could be found at the given address. 8.7 The ld AO observed that in response to the various documents called for by him from the assessee, only ledger account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the ld AO or by the ld CIT(A). Payments for this purchase have already been made by the assessee out of the monies available in the disclosed bank account. Hence, the source of incurrence of such expenditure together with the payments made thereon are duly explained from the books of account of the assessee itself. It is not the case of the revenue that the purchase made from aforesaid 3 parties were made out of books and for which assessee is not able to explain the source of making payment. Hence, the provisions of section 69C of the Act per se cannot be applied to the facts of the instant case. In our considered opinion, when the provisions of section 69C of the Act are sought to be invoked, the revenue does not doubt the genuineness of incurrence of such expenditure. Only the source of such expenditure is being doubted by the revenue. Here the source is drawn from the regular books of accounts of the assessee which were not rejected by the lower authorities. Hence on this ground itself, the addition deserves to be deleted. Reliance in this regard has been rightly placed by the ld AR before us on the decision of the Hon'ble Bombay High Court in the case of PCIT Vs. Sanjay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions and creditworthiness of the investors under Section 68 of the Act. It is in this context that the Hon'ble Supreme Court concluded that the Lower Appellate Authorities had ignored the detailed findings of the Assessing Officer from the field enquiry and investigations carried out by him and the assessee had not discharged his legal obligation to prove the receipt of the Share Capital/Premium to the satisfaction of the Assessing Officer. The ratio laid down in Principal Commissioner of Income-Tax (Central)-1 ..V/s.. NRA Iron and Steel (P.) Ltd., (supra), was in the facts of that case and would have no application to the present case. 17. The Bombay High Court in case of The Commissioner of Income Tax-1, Mumbai ..V/s.. M/s. Nikunj Eximp Enterprises Pvt. Ltd., (supra), has in a similar case, where the assessee produced his books of accounts, copies of invoices for purchases, and copies of bank statements indicating that purchases were made, has held as under: "We have considered the submission on behalf of the revenue. However, from the order of the Tribunal dated 30.04.2010, we find that the Tribunal has deleted the additions on account of bogus purchases not only on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious documentary evidences from the paper book need not be gone into as it would be academic in nature. Accordingly, ground Nos. 2, 4 and 5 raised by the assessee are allowed. 8.11 In the result, the appeal of the assessee in ITA No. 1167/Del/2021 is partly allowed. County Infrastructure Pvt. Ltd in ITA No. 1168/Del/2021 for AY 2017-18 (Assessee's appeal) 9. The appeal in ITA No.1168/Del/2021 for AY 2017-18, arises out of the order of the Commissioner of Income Tax (Appeals)-4, Kanpur [hereinafter referred to as "ld. CIT(A)", in short] in Appeal No. CIT(A)- IV/KNP/10840/2018-19 dated 15.07.2021 against the order of assessment passed u/s 153A/143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 31.12.2018 by the Assessing Officer, DCIT, Central Circle-I, Noida (hereinafter referred to as "ld. AO"). 9.1 Grounds raised by the assessee for AY 2017-18 are exactly identical to the original grounds raised by the assessee for AY 2016-17 and hence, decision rendered for AY 2016-17 (supra) shall apply mutatis mutandis for this assessment year also except with variance in figures. In AY 2017-18, no additional ground was raised by the assessee. Hence, decision f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee for this year. 11.2 In the result, the appeal of the assessee for AY 1172/Del/2021 is partly allowed. IV County Infrastructure Pvt. Ltd in ITA No. 1357/Del/2021 for AY 2017-18 (Revenue's Appeal) 12. The appeal in ITA No.1357/Del/2021 for AY 2017-18, arises out of the order of the Commissioner of Income Tax (Appeals)-4, Kanpur [hereinafter referred to as "ld. CIT(A)", in short] in Appeal No. CIT(A)- IV/KNP/10842/2018-19 dated 15.07.2021 against the order of assessment passed u/s 153A/143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") dated 31.12.2018 by the Assessing Officer, DCIT, Central Circle-I, Noida (hereinafter referred to as "ld. AO"). 12.1 The only issue to be decided in this appeal of the revenue is as to whether the ld CIT(A) was justified in deleting the addition of Rs. 1,80,00,000/- in the facts and circumstances of the instant case. 12.2 We have heard the rival submissions and perused the material available on record. Shri Amit Modi, the key person of the assessee group gave a statement u/s 132(4) of the Act at the time of search and offered certain amount to tax. This statement was later retracted by him vide retraction l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company to the assessee at the time of search. Accordingly, total disclosure of Rs. 32 crores which included Rs. 4.5 crores belonging to the assessee company herein was made in the hands of the company respectively. Further, statement of Shri Sandeep Pandit was also not recorded by the search team even though he was available at the time of search. It was submitted that the retraction made by the assessee and other 8 assessees was based on conclusive evidence and actual figure of undisclosed figure was mentioned in the seized documents itself. It was submitted that the disclosure made by the assessee was an estimated figure which is also mentioned in the seized documents and the actual amount of undisclosed income also were mentioned in the very same seized documents with specific reference to estimated income, which stood ultimately offered to tax by the assessee and remaining persons in their respective returns. To the extent of actual amount of undisclosed income, cash was subsequently deposited by the assessee and other parties, post search, in their bank accounts pursuant to the announcement of demonetization by the Govt. of India. Ultimately a sum of Rs. 11.55 crores was de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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