TaxTMI 
TaxTMI 
2013 (12) TMI 131
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....rores made on account of unexplained share capital/share application money. 2. The appellant craves to be allowed to add, delete or amend any other grounds of appeal." The grounds of cross objection nos.257 & 258/Del/2010 are common which read as under :- "1. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the order passed by Ld AO under section 153A/143(3) is bad and liable to be quashed as the same has been passed without serving statutory notice under section 153A of the Act. 2. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the order passed by Ld AO is bad in law and liable to be quashed as the same has been passed without issuing statutory notice under section 143(2) of the Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the addition made by AO is not sustainable as the same has been made without there being any incrimination material found during the course of se....
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....ax Act, 1961. The ld. AR submitted that in the absence of notice u/s 143(2), the assessment proceedings taken by the Assessing Officer are bad in law and liable to be quashed. He submitted that company was incorporated on 15th September, 2005. The financial year 2005-06 was the first year of operation and the relevant Assessment Year was 2006-07. The return of income for 2006-07 was filed on 29.11.2006 and the same was processed u/s 143(1) on 29.01.2008. No notice u/s 143(2) was issued. Similarly, the return of income for Assessment Year 2007-08 was filed on 31.10.2007 and the same was processed u/s 143(1) of the Act on 11.02.2009. The return for Assessment Year 2008-09 was filed on 27.09.29008 and meanwhile the search operation was carried out on 15.02.2008. No incriminating document was found and seized with regard to assessee during the search operation. The Assessing Officer issued notice u/s 142(1) and 143(2) on 18.11.2009 and assessee was asked to file the return of income for the Assessment Years 2002-03 to 2007- 08. The assessee filed return on 25.11.2009 in response to that notice. Thereafter the Assessing Officer has not issued any notice u/s 143(2) for any of the assessm....
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....e assessment under some other provision but not u/s 143(3) read with section 153A of the Act. In our understanding if we accept the logic canvassed by the Ld. Counsel for the assessee then every assessee would first ignore the notice received u/s 153A, they will not file the return as required by the A.O. When the asstt. Proceeding reached at the fag end then they will file the return and plead to issue notice u/s 143(2) of the Act or asstt. Order is to be branded as void ab initio, because of non-compliance of the provision can such type of situation permissible in the law, our reply is simple no. 10. It is true that if an assessee filed a regular return u/s 139 and A.O. wants to scrutinize that return then he has to issue notice u/s 143(2) of the act within the time frame provided in the proviso appended to section 143(2) of the Act. But here the circumstances are all together different. The assessee committed a default itself. It ignored the notice issued by the A.O. u/s 153A. The A.O. has taken up the proceeding well in time by issue of notice u/s 142(1) and 143(2) of I.T. Act. The alleged return filed by the assessee on 7.11.2007 at the most can be taken as a c....
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....adjourned on 26.11.2009. On 26.11.2009, Shri Nikhil Kabra appeared before the Assessing Officer and the case was adjourned to 30.11.2009. On 30.11.2009, a questionnaire was issued for the Assessment Year 2006-07, copy of the handwritten questionnaire is also placed on records wherein 13 details were asked by the Assessing Officer which also includes detailed note on the nature of business, details of increase in of the share capital and share application money received along with confirmation of ITR, copy of accounts and bank statements, details of bank accounts of the investors, details of work-in-progress, details of FDR with bank statement, details of advance for land, agreement copy and bank statement, details of advance against collaboration agreement and bank statement showing the amount of transaction, details of advance recoverable, details of advance against FSI, copy of agreement and bank account statement, details of advance against bookings, party wise with address, PAN and agreement copy, details of sales party wise and details of share holding pattern. As held by the ITAT in the case of ITO vs. Ashok Chadha in ITA No.1455/Del/2009 & others, the issue is covered in fav....
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.... compliance has also been mentioned. Further, it has been mentioned that the compliance to the points raised may be made in person or through authorized representative. Thus, according to us, opportunities as per second and third alternatives have been granted to the assessee. As mentioned earlier, the widely accepted proposition of law is that a general notice would suffice. However, a different view was taken in the case of Nirmal v Secretary of State, in which it was held that the notice should ordinarily specify the points in respect of which the assessee has to produce evidence. The objection in this case was that the notice was general in nature. Obviously, such an objection cannot be taken in this case as the AO specified the points in respect of which evidence was to be produced or was caused to be produced. Therefore, we are of the view that this notice amounts to compliance of the mandatory requirement of the provision contained in section 143(2)(ii). As the notices have been served after the filing the return, making a reference to it in the notices would amount to stating the obvious fact, which is not necessary according to us. 5.2 The ld. DR has raised....
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.... is no specific provision in the Act requiring the assessment made under s. 153A to be after issue of notice under s. 143(2). It is also to be noted that s. 153A provides for the procedure for assessment in case of search or requisition. Sub-so (1) starts with non-obstante clause stating that it was "notwithstanding" anything contained in ss. 147, 148 and 149, etc. Clause (a) thereof provides for issuance of notice to the person searched under S. 132 or where documents etc are requisitioned under S. 132(A), to furnish a return of income. This clause nowhere prescribes for issuance of notice under S. 143(2). The words 'so far as may be' in c1. (a) of sub S. (1) of S. 153A could not be interpreted that the issue of notice under S. 143(2) was mandatory in case of assessment under S. 153A. The use of the words, 'so far as may be' cannot be stretched to the extent of mandatory issue of notice under S. 143(2). As is noted, a specific notice was required to be issued under c1. (a) of sub-so (1) of S. 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under S. 143(2) could be contemplated for assessment under S. 153A. In addition, the t....
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.... M/s. Sanwaria Banquet and M/s. Delhi Ventures Pvt. Ltd. has been shown at nil. The receipts of these companies were also meager. The receipts of M/s. Goodwill Pvt. Ltd. and M/s. United Infracon Pvt. Ltd. was less than Rs.50,000/-. One Shri Rakesh Chand Gupta was the common director in five companies. There is common director in five companies. All these facts coupled with rubber stamps in these companies found during the search at the assessee premises establish that the share application money received from these companies are not genuine. The assessee has to establish the genuineness of the share capital and share application money. The assessee has furnished the copy of documents filed with the Registrar of Companies, copy of unaudited confirmations and copy of affidavits, however, no original confirmations of share capital and share application from these parties were furnished. The Directors of the companies were not produced. The bank accounts of the companies were not produced. The onus on the revenue can be shifted only when the assessee produces the Directors and bank accounts and original confirmations. Not producing the Directors shows that the identity and creditworthi....
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....e assessee has submitted all the relevant documents and evidences. No adverse comments have been made by the Assessing Officer on the documents submitted. Since the Assessing Officer has failed to carry out any investigation, therefore, the CIT (A) was justified in deleting the addition. The ld. AR also submitted that this issue is covered by the following decisions :- i. CIT vs. Sophia Finance Ltd. 205 ITR 98 (Del.) ii. CIT vs. Achal Investment Ltd. 268 ITR 211 (Del.) iii. CIT vs Stellar Investments Ltd 192 ITR 298(Del) iv. CIT vs Stellar Investments Ltd 251 ITR 263 (SC) v. CIT vs Divine Leasing & Finance Ltd 299 ITR 268(Del) vi. CIT vs Value Capital Services P Ltd 307 ITR 334 (Del) vii. CIT vs Lovely Exports P Ltd 319 ITR 5 (SC) viii. CIT vs Oasis Hospitalities P Ltd 333 ITR 119 (Del) ix. CIT vs Kamdhenu Steels and Alloy Ltd 248 CTR 33 (Del) x. CIT vs K C Fibres Ltd 332 ITR 481 (Del) xi. CIT vs Winstral Petrochemicals Ltd 330 ITR 603 (Del) xii. CIT vs Dwarkadhish Investment P Ltd 330 ITR 298 (Del) ....
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....and CIT vs. Expo Global Industrial Ltd. in ITA No.1257/2011 dated 20.07.2012 wherein the Nova Promoters, cited supra, has been distinguished. Relying on the decision of Goel Sons Golden Limited, cited supra, the Delhi Bench of ITAT in the case of ITO vs. India Textab Marketing Ltd. in ITA No.1177/D/2012 dated 05.10.2012 has deleted the addition. Similar view has also been taken by the Delhi Bench of the ITAT in the case of Abhik Jain vs. ITO in ITA No.2029/Del/2011 dated 18.05.2012. A similar view has also come up in the case of ITO vs. Empire Buildtech Pvt. Ltd. in ITA No.4656/Del/2009 dated 30.04/2013 wherein the deletion of the addition by the CIT (A) was upheld. The ld. AR also submitted that the grounds in appeal in assessee's cross objection no.258/Del/2010 in ITA No.3201/Del/2010 for Assessment Year 2007-08 and the facts in revenue's appeal in ITA No.3201/Del/2010 are exactly the same, therefore, the same pleadings may be taken for the Assessment Year 2007-08 also. 13. The ld. AR also submitted that the grounds in cross objection for Assessment Year 2008-09 in CO No.257/Del/2010 are also the same as of ground nos.2, 3 & 4 in cross objections for Assessment Years 2006-07 &....
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....long with Smt. Sunita Gupta. Shri Naresh Chand Gupta and Umesh Chand Gupta were directors in Num Leasing & Finance Pvt. Ltd. It is also a fact that no incriminating documents were found and seized during the search operation. No one has stated anything adverse in the statement recorded during the search operation and after the search operation with regard to these share capital receipts from these persons. The assessee gave the names and addresses of these persons and their PAN was also given. The Assessing Officer has not issued any summons u/s 131 of the Act to these companies. The Assessing Officer has also not conducted any enquiry into the particulars/details submitted by the assessee with regard to these shareholders. In our considered view and in view of the decisions of Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation reported in 159 ITR 78, the evidences submitted by the assessee cannot be thrown out without any enquiry specially when there is no material to implicate the assessee in a collusive arrangement. The details submitted also show that these investors companies were sister concerns of the assessee and having the same address and common directors. Th....
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....knowledgement of the return of income, confirmation and computation of income and PAN of both the directors were also submitted. The Assessing Officer has not made any enquiry and has also not able to point out any defect in the documents submitted by the assessee. The CIT (A) has verified the assessment records and had also taken note of the fact that assessee has appeared on various dates and filed the details and in none of the hearing, this issue of loan was raised. Shri Shanti Prakash Gupta, who was the Director of the assessee company, has declared the taxable income for the year at Rs.1,77,43,620/-. The computation of the income is placed at page 22 of the paper book. Shri Shanti Prakash Gupta, Director of the company from whom the loan was received was also having exempted income u/s 10 to the tune of Rs.1,94,84,640/-. Similarly, the other Director, Shri Rakesh Chand Gupta also declared income for the year at Rs.1,22,65,220/-. The computation of income is placed at page 31 of the paper book. Since both the persons from whom the loan was received were Directors of the company and they declared substantial taxable income in their return of income and loan has been received fr....