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TMI Blog2024 (12) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A - In view of the judgement rendered in the case of Pr. CIT v. Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] relied on behalf of the assessee, the additions made in unabated assessment are not permissible u/s 153A of the Act. Additions made u/s 153A in the absence of incriminating material - Additions made u/s 153A in the absence of incriminating material is not justified do not appear to be in consonance of law governing the field, since the AYs 2015-16 and subsequent AYs were pending at the time of search and stood abated. In the abated assessments, the power of the AO is not limited to incriminating material found in the course of search alone. The plea of the assessee is thus rejected. We however find merit in the plea of the assessee that in view of the averments made in the remand report obtained by CIT(A) for different assessment years under appeal, the impugned additions retained by the Ld.CIT(A) is not justified. Where the AO has categorically observed that explanation offered in respect of funds received by the assessee on account of sale of investments held by the assessee in preference shares is substantiated by documentary evidences, the Ld.CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respective first appellate orders passed under s. 250 of the Act confirmed the additions/disallowances. 5. Aggrieved, the assessee preferred appeal before Tribunal. 6. When the matter was called for hearing, the Ld. Counsel for the assessee submitted at the outset that the captioned AYs 2012-13, 2013-14 2014-15 are liable to be challenged on three broad issues. Firstly, the additions made by the AO in the assessment framed under s. 153A are unconnected to any incriminating material found in the course of search as is self-evident from panchnama as well as the assessment orders. The assessment under s. 153A has been framed relying on statement of third person, electronic data recovered from third person. Hence, such additions made are unsustainable under s. 153A in law insofar as assessment years 2012-13, 2013-14 2014-15 concerned owing to the fact that the aforesaid assessment years remained unabated at the time of search. The assessment being concluded and not pending at the time of search, the additions to be made under s. 153A is squarely dependent upon the discovery of incriminating documents found in the course of search as held in landmark judgement in the case of Pr. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad challenged the additions made under s. 153A of the Act, both on legal issue as well as on merits. 10. It is the case of the assessee that so-called incriminating material referred to in the assessment order are in the shape of statements recorded of third person i.e. Shri Pawan Agarwal much prior to search and material found in the case of other person. On perusal of the assessment orders and the first appellate order, it is observed that there does not appear to be any reference to any incriminating material found in the course of search of the assessee per se. The alleged incriminating material referred are primarily in the nature of statement of third person prior to search and material found in the course of search of the third person. This being so, the additions made in assessment years 2012-13, 2013-14 2014-15 are outside the ambit of jurisdiction under s. 153A of the Act. In view of the judgement rendered in the case of Pr. CIT v. Abhisar Buildwell (P.) Ltd. (supra) and plethora of judgements relied on behalf of the assessee, the additions made in unabated assessment are not permissible under s. 153A of the Act. 11. We further take note of the judgement of the Hon ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Services Copy of affidavit 241-242 Copy of PAN Card 243 Copy of return of income 244 5. Jhunjhunu Commerce Pvt. Ltd. Copy of return of income 245 Copy of audited financial statements 246-254 Copy of COI, MOA AOA 255-260 Copy of PAN card 262 Copy of confirmation filed by Jhunjhunu Commerce Pvt.Ltd. 262 Copy of bank statement 263 6. Simon Tie Up Pvt. Ltd. Copy of return of income 264 Copy of audited financial statements 265-276 Copy of COI, MOA AOA 277-293 Copy of PAN Card 294 Copy of confirmation filed by Simon Tie Up Pvt.Ltd. 295 Copy of bank statement 296 7. Manikrit Tie Up Pvt. Ltd. Copy of return of income 297 Copy of audited financial statements 298-312 Copy of MOA AOA 313-332 Copy of PAN Card 333 Copy of confirmation filed by Manikrit Tie Up Pvt.Ltd. 334 Copy of bank statements 335-336 Copy of assessment order for AY 2016-17 337-338 8. Darshan Barter Pvt. Ltd. Copy of return of income 339 Copy of audited financial statements 340-348 Copy of MOA AOA 349-364 Copy of PAN Card 365 Copy of confirmation filed by Darshan Barter Pvt.Ltd. 366 Copy of bank statement 367 9. Kashi Prayag Tradelink Pvt. Ltd. Copy of return of income 368 Copy of audited financial statements 369-378 Copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by it except for the recovery of cost of investments, the transactions cannot be regarded as accommodation entries. 5. In order to verify the above documents and submissions made by the assessee, notice under section 133(6) were issued on 27.04.2022. In response to which documents pertaining to the parties from whom funds were received by the assessee were filed. The reply is further supported by the confirmations of the above parties that funds were given to the assessee on behalf of RNB Leasing and Financial Services on account of purchase of shares by them from RNB Leasing and Financial Services out of their disclosed sources of fund. Further, in support of their explanation they have submitted copy of their confirmation, bank statement, financial statements, ITR. The explanation given by assessee is substantiated by the documents submitted. 6. It is noticed that the explanation/submission now being made by the assessee was not made during the course of assessment proceedings. During the assessment proceedings ample opportunities were given to the assessee to discharge its onus to substantiate the genuineness of the transactions. However, no plausible explanation was given in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the additions. The AO in his remand report undertook the requisite verifications and held that explanation of the assessee on the impugned additions towards alleged undisclosed income stands substantiated by documentary evidences. The assessee also contends that in the group cases in the case of Lalita Bajaj (ITA No.2596/Del/2022) Namita Bajaj (ITA No.2598/D/2022) order dated 11.10.2023, the issue has been decided in favour of the assessee on similar facts. 18. The remand report filed by the AO before the Ld.CIT(A) concerning AY 2015- 16 is extracted hereunder for ready-reference:- Kindly refer to the above cited subject wherein the remand report was called in the case of the above mentioned assessee for the AY 2015-16 in relation to the additional evidences filed by the appellant under Rule 46A. 2. The assessment in the case of the assessee was completed on 17.12.2019. Wherein addition of Rs. 17,84,58,500/- was made in the hands of the assessee on account of undisclosed income. 3. The appellant vide its application before the Ld. CIT (A) in the present case has filed following additional evidences: S.No. Particulars Page No. 1). Copy of replies dated 16.12.2019 along with ackno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard 705 Copy of confirmation 706-707 Copy of bank statements 708-717 Copy of assessment order u/s143(3) of M/s Designline Mercantiles LLP for AY 2018-19 718-719 15. For Trendster Mercantile LLP Copy of return of income 720 Copy of audited financial statements 721-722 Copy of LLP deed 723-727 Copy of confirmation 728-729 Copy of bank statements 730-734 Copy of MCA Data 735 Copy of assessment order u/s143(3) of M/s Trendster Mercantile LLP for AY 2018-19 736-737 16. For Kashi Prayag Tradelink Pvt. Ltd. Copy of return of income along with Computation of Income 738 Copy of audited financial statements 739-750 Copy of COI, O 751-769 Copy of PAN card 770 Copy of assessment order for AY 2013-14 771-772 Copy of registration certificate under various indirect tax laws 773-777 Copy of export related documents 778-792 Copy of VAT return 793 Copy of letter from Nagar Palika, Deshnoke 794- Copy of MCA Data 794.1 Copy of confirmation filed by M/s Kashi Prayag Tradelink Pvt Ltd. 795 Copy of bank statement 796 17. For Sanchar International Copy of return of income 797 Copy of balance sheet 798 Copy of joint venture agreement 799-804 Copy of PAN card 805 Copy of bank statements 806 Copy of confirma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business relation with the alleged shell concerns. Further, the assessee has submitted that on perusal of the copy of Form 2 of RNB Synthetics Pvt. Ltd., RNB SEZ Bikaner Pvt. Ltd. and RNB SEZ Coimbatore Pvt. Ltd. i.e. return of allotment filed on 24.06.2010, 01.06.2010 and 01.06.2010 respectively, and list of share transfer submitted with MCA, it can be seen that investments held in shares of RNB Synthetics Pvt. Ltd., RNB SEZ Bikaner Pvt. Ltd. and RNB SEZ Coimbatore Pvt. Ltd. were sold by assessee @500, @400 and @400 per share respectively, which were acquired by it directly from RNB Synthetics Pvt. Ltd., RNB SEZ Bikaner Pvt. Ltd. and RNB SEZ Coimbatore Pvt. Ltd. @500, @400 and @400 per share respectively. Referring to the above mentioned additional evidences the assessee has stated that funds received by it in the year under consideration were only on account of sale of investments at par out of which no gain/profit has arisen to it and since, no surplus money being received by it except for the recovery of cost of investments, the transactions cannot be regarded as accommodation entries. 5. In order to verify the above documents and submissions made by the assessee, notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der s. 133(6) of the Act. The assessee further pointed out that on the basis of documents submitted and verification carried out, the AO in his remand report has categorically stated that the explanation given by the assessee stands substantiated. The assessee also pointed out that amount to the extent of INR 3.76 crores relates to the transactions which are not pertaining to the year under consideration at all. The main plank of the assessee was that the remand report squarely vouches for substantiation of the transactions and therefore in the wake of such findings, the additions made by the AO even on merits do not continue to hold water any more. Similar plea on merits has been taken in respect of other AYs under consideration. The assessee thus contends that the Ld.CIT(A) was not justified in confirming the action of the AO despite categorical remand report obtained in the first appellate proceedings and without assigning any reason to depart from the view expressed in Remand Report. 20. We have carefully considered the rival submissions and perused the respective orders passed by the lower authorities. The first contention raised by the assessee that the additions made under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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