Appeals allowed due to lack of incriminating evidence. Assessments set aside.

The tribunal allowed the appeals for both assessment years, holding that the additions made by the AO were not justified in the absence of incriminating material and corroborative evidence. The orders of the lower authorities were reversed, and the assessments were set aside.

---

---

Issues Involved:
1. Validity of the assessment orders under Section 153A read with Section 153C of the Income Tax Act, 1961.
2. Reliance on the statement of a third party (Shri Mul Chand Malu) for making additions.
3. Whether the assessee discharged the onus under Section 68 of the Income Tax Act.
4. Absence of incriminating documents found during the search.
5. Denial of cross-examination of persons whose statements were relied upon by the AO.

Issue-wise Detailed Analysis:

1. Validity of the Assessment Orders under Section 153A read with Section 153C:
The appeals pertain to the assessment years 2012-13 and 2013-14. The assessee challenged the orders passed by the CIT(A) upholding the assessments made by the AO under Section 153A read with Section 153C. The tribunal noted that the original returns were filed and processed under Section 143(1), and no assessments were pending as of the search date. The tribunal emphasized that in the absence of any incriminating material found during the search, the assessments could not be reopened under Section 153A read with Section 153C, citing the Supreme Court’s mandate in the case of Shinghad Technical Education Society and the Delhi High Court's decision in CIT vs. Kabul Chawla.

2. Reliance on the Statement of Shri Mul Chand Malu for Making Additions:
The AO made additions based on the statement of Shri Mul Chand Malu, who had allegedly provided accommodation entries to the assessee. The tribunal observed that the statement of a third party alone, without any corroborative material, cannot justify the additions. The tribunal relied on the Delhi High Court’s decision in Anand Kumar Jain, which held that a statement under Section 132(4) alone could not justify additions without corroborative evidence.

3. Whether the Assessee Discharged the Onus under Section 68:
The assessee provided share application forms, confirmations, bank statements, income tax returns, and audited financial statements to substantiate the share capital and premium received. However, the AO held that the investor company was not found at the given address and did not produce the directors. The tribunal noted that the assessee had discharged its onus under Section 68 by providing the necessary documents and that the AO's reliance solely on the statement of Shri Mul Chand Malu was insufficient for making additions.

4. Absence of Incriminating Documents Found During the Search:
The tribunal highlighted that no incriminating documents were found during the search that could substantiate the additions made by the AO. The tribunal reiterated that in the case of concluded assessments, no additions could be made in the absence of incriminating material, as held in the cases of Shinghad Technical Education Society and Kabul Chawla.

5. Denial of Cross-Examination:
The assessee had requested the cross-examination of persons whose statements were relied upon by the AO, but this was denied. The tribunal observed that the denial of cross-examination violated the principles of natural justice. The tribunal noted that Shri Mul Chand Malu had passed away, and therefore, cross-examination could not be provided. In such cases, the statement could not be used for making additions, as held in the case of Kuber Khadayan.

Conclusion:
The tribunal allowed the appeals of the assessee for both assessment years, holding that the additions made by the AO were not justified in the absence of incriminating material and corroborative evidence. The orders of the lower authorities were reversed, and the assessments were set aside.

---