2014 (1) TMI 839

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.... under Section 153C has been raised in these three appeals. It has been stated that issuance of notice under Section 153C was bad in law as there was no material found relating or belonging to assessee, on which basis any addition can be made. Thereafter the assessee is challenging in confirming the assessment completed under Section 144 by which estimated additions on account of commission receipt and certain disallowance of expenses on the basis of which original return was filed. For assessment year 2005- 06, the estimated income on account of commission is made at Rs.1,88,580/-. For assessment year 2006-07, the addition was made of Rs.3,47,000/- and for assessment year 2007-08, the addition was made of Rs.1,30,650/-. The additions on ac....

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.... paid to the conduit, which is generally paid in cash. In para 12, the AO observed that the assessee has made fresh investment of Rs.57,50,000/- in the shares of various companies and in turn the assessee may have paid commission to the various parties who have invested in its shares. Such commission would not exceed 2% of the receipts channelized to purchase/invest in the shares of various companies. Therefore, during the year under consideration, the assessee has invested an amount of Rs.57,50,000/- and received Rs.49,46,000/- as share capital including share premium. On the basis of the same, the assessee must have received commission of Rs.2,87,500/- (5% of Rs.57,50,00/-) and must have paid commission of Rs.98,920/-(2% of Rs.49,46,000/-....

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....ption basis, neither there was any material nor any information that the assessee is indulged in incurring bogus expenses. Merely on rejection of books of accounts, no addition can be made, if there is no basis or material. It is a case of assessment completed under Section 153C as search was conducted in the case of Bhatia group of companies from where certain documents were received and it is a matter of fact that no addition was made on the basis of those materials as no incriminating material was found, neither those materials belong to the year under consideration as the material received belonging to the assessment year 2004-05. Therefore, without going into the details further, I hold that both the additions made by the AO was withou....