TaxTMI 
TaxTMI 
2015 (10) TMI 179
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....tly contended that the tax effect in each of the appeal is less than Rs. 4 lakhs, therefore, no appeals should have been filed by the revenue in view of Instruction No.3/2011 as well as Instruction No.5/2014 dated 10.7.2014. 4. Ld D.R. on the other hand, contended that since all these appeals filed by the revenue although relate to one issue but has been disposed of by a composite order, therefore, these appeals should not be dismissed separately in limine determining the tax effect in respect of each assessment year for the grounds of appeal taken by the revenue. 5. In the rejoinder Ld A.R. drawn our attention towards Board Instruction No.5/2014 dated 10.7.2014 and contended that even if the total tax effect in all these appeals by the revenue are taken into account, the tax effect will be less than s.4 lakhs. He also contended that instruction will apply to all the pending assessment years and for this proposition, reliance was placed on the decision of Hon'ble Gujarat High Court in the case of Sureshchandra Durgaprasad Khatod (HUF (2012) 253 CTR 492 (Guj) as well as the decision of Hon'ble Delhi High Court in the case of CIT Vs M/s. P. S. Jain & Co. in ITA No.179/1991 date....
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.... include any interest thereon, except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In cases where returned loss is reduced or assessed as income, the tax effect would include notional tax on disputed additions. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against. 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal, can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In other words, henceforth, appeals can be filed only with reference to the tax effect in the relevant assessment year. However, in case of a composite order of any High C....
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....cial folders in the office of CsIT must be maintained in a systemic manner for easy retrieval. 8. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified in para 3 above or there is no tax effect. (a) Where the Constitutional validity of the provisions of an Act or Rule are under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department. 9. The proposal for filing Special Leave Petition under Article 136 of the Constitution before the Supreme Court should, in all cases, be sent to the Directorate of Income-tax (Legal & Research), New Delhi and the decision to file Special Leave Petition shall be in consultation with the Ministry of Law and Justice. 10. The monetary limits specified in para 3 above shall not apply to writ matters and direct tax matters other than Income tax. Filing of appeals in other Direct tax matters shall continue to be governed by the relevant provisions of statute & rules. Further filin....
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....2007, The Commissioner of Income Tax v. Smt. Vijaya V. Kavekar decided on 29.7.2011. The Division Bench, after considering earlier Instructions and various decisions of the Courts on Instructions, relying on the decision in Commissioner of Income Tax vs. Madhukar K. Inamdar (HUF) reported in (2010) 229 CTR (Bom) 77, has held in paragraphs 9, 10, 11, 14 and 17 as under: "9. As stated earlier, the Income Tax Act was amended and Section 268A has been introduced on the Statute book with retrospective effect. Section 268A carves out an exception for filing of appeals and References under Section 260 A of the Act. The legislature has prescribed that the CBDT is empowered to issue circulars and instructions from time to time, with regard to filing of appeals depending on the tax effect involved. Thereafter, in 2008, CBDT Instruction No. 5 of 2008 dated 15th May, 2008 was issued. This Court in the case of "Commissioner of Income Tax V/s Madhukar K. Inamdar (HUF) reported in "(2010) 229 CTR (Bom) 77, interpreted the aforesaid Circular. The Circular was issued in supersession of all earlier instructions issued by the Board. The monetary limit was increased and appeals were ....
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....effect is less than Rs. 4 Lakhs. In our view, there is no logic behind this belief entertained by the Revenue." The Court has further held that the prevailing instructions fixing the monetary limit for the tax effect would hold good even for pending cases. Accordingly, the Court dismissed all the appeals having a tax effect of less than Rs. 4 Lacs. 10. The new CBDT instructions have been issued on 9th February, 2011, being Instruction no. 3 of 2011. The monetary limit has been raised again and clause 3 of the instructions provides that appeals shall not be filed in cases where the tax effect does not exceed the monetary limits prescribed, henceforth. The monetary limits prescribed for filing an appeal under Section 260A before the High Court has been raised to Rs. 10 Lacs. This instruction is identical to the CBDT Instruction no. 5 of 2008. Clause 10 of this circular indicates that monetary limits would not apply to writ matters and direct tax matters other than income tax. It further provides that where the tax effect is not quantifiable, the Department should take a decision to file appeals on merits of each case. Clause 11, again provides that the instruction would apply t....
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....y limit prescribed." 7. We find from the above case law of Hon'ble Gujarat High Court in the case of CIT v. Sureshchandra Durgaprasad Khatod (HUF) (supra) that in the similar situation and exactly identical instructions were applied to the appeals filed retrospectively. Hon'ble Gujarat High Court has discussed that almost all High Courts are of the unanimous view, considering the main objective of such instructions that to reduce the pending litigation, where the tax effect is considerable low or small, the appeal is not maintainable. 8. On query from the Bench, the Ld. DR could not point out any of the exceptions as provided in the Circular as under: (a) that this is a loss case having tax effect more than the prescribed limit, which should be taken into account, (b) that this is a composite order for many assessment years where tax effect will be more than the prescribed limit as per para 5 of above instructions, (c) that this is a case, where, in the case of revenue, where constitutional validity of the provision of the Act or I.T. Rules 1962 are under challenge, (d) that Board's order, Notification, Instruction or Circular has been held to be illegal or ultra ....
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....thout prejudice, the levy of interest u/s 234A, 234B and 234C is unjustified, unwarranted and excessive." 15. In Ground No.4 for assessment year 2004-05, Rs. 10,00,000/-, in A.Y. 2005-06 - Rs. 50,00,000/-, in A.Y. 2006-07- s.80,00,000/- be read in place of Rs. 20,00,000/-" 16. The brief facts of the case are that the assessee is a private limited company incorporated on 11.12.2002. Regular books of account, as required under the different statute, are maintained, audited and annual returns, as required under the Companies Act, were regularly filed alongwith audited balance sheet, profit and loss account and audit report for all these assessment years under section 139(1) of the Act as detailed below: Asst. year Date of filing of return Taxable income 2003-04 24.10.2003 Rs. 1,84,785 2004-05 27.10.2004 Rs. 1,65,407 2005-06 2.9.2005 (-) Rs. 4,60,449 2006-07 31.7.2006 (-) Rs. 15,66,696 17. During each of the assessment years, assessee has received following share capital by way of share application money: Asst. year Amount 2003-04 Rs. 23,99,000 2004-05 Rs. 35,00,000 2005-06 Rs. 55,00,000 2006-07 ....
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....the assessment years in pursuance to action u/s.132(1) taken in the premises of Dr. Yogiraj Sharma, Shri Ashok Nanda & others on 7.9.2007. The AO has discussed the loose papers/documents belonging to the assessee found during the search action from the premises at pages 1-2 of the assessment order. On the basis of these documents, jurisdiction to issue notice u/s.153C has been assumed in the case of the assessee and notice under section 153C has been issued to the assessee on 10.4.2008 for each of the assessment years. The documents seized would indicate that no document is in the nature of incriminating material to show that there is undisclosed income assessable at the hands of the assessee. The documents seized are recorded documents verifiable with reference to returns submitted by the assessee in the course of regular assessment proceedings. In the absence of documents being of incriminating nature, no valid assumption of jurisdiction under section 153C of the Income tax Act, 1961 can be assumed by the Assessing Officer. In this regard, reliance was placed on the following decisions: "1) ITAT order in ITA No.4514 & 45l5/Del/2012 in the case of Therapeutic India (P) Ltd. vid....
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....ring the year ending 31/03/2006. The aforesaid transaction is available in regular books of account and was not in the nature of any incriminating material to assess the same as undisclosed income in the hands of assessee. The documents found are not related to assessment years 2003-04, 2004-05 and 2005-06. Thus, there was no scope of issue of notice U/s 153C of Income Tax Act 1961 in respect of assessment years 2003-04 to 2005-06. The assessment so framed deserves to be cancelled. For this proposition of law, reliance was on the following decisions: "1. Bharati Vidapeeth , (ITA No.917 to 922/PN/2010) 2. Sinhgad Technical Education Society (ITA No.114 to 117/PN/2010) 23. On the other hand, ld Departmental Representative, relied on order of ld CIT(A) and vehemently contended that as per provisions of section 153C(1) of the Act that if the documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person in whose case search has been conducted, and that Assessing Offi....
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....ovable properties. LPS-1/5 p. 34 containing purchase of immovable properties. 26. Therefore, after being satisfied and recording the satisfaction, the AO in the case of Dr. Yogiraj Shama, referred to these documents to the Assessing Officer of the assessee and notice u/s.153C r.w. s 153A was issued to the assessee on 10.4.2008. We have gone through the provisions of section 153A. The provisions of section 153A, 153B & 153C were inserted by the Finance Act, 2003 w.r.e.f 1.6.2003. Originally section 153A of the Act did not have any sub-section. However, sub-section (2) to Section 153A was inserted by the Finance Act, 2008 w.e.f from 1.6.2003. Section 153A provides for an assessment in case of a person in whose case search is initiated u/s.132 of the Act or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003. Section 153B provides for time limit for completion of assessment under section 153A and Section 153C of the Act . Section 153C provides for assessment of income of person or other than person in respect of whom warrant or authorisation is issued u/s.132 of the Act. 27. Sec....
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.... the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." Xx xx xx xx "153C.Assessment of income of any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 13....
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.... A.R. even though he has vehemently contended that these documents are not incriminating documents, that these documents or papers does not belong to the assessee. Ld A.R. contended that the transaction relating to cheques as has been found and seized are already recorded in the books of account of the assessee company. Similarly, the transaction under the agreement for vehicle finance etc., are duly recorded in the regular books of account, but it cannot be said that these transaction did not belong to the assessee. 29. It is apparent from the language of section that the section does not require that the documents belonging to the assessee must be incriminating documents. Section 153C gives the jurisdiction to the Assessing Officer once the documents belonging to the assessee are found in the case of the assessee in whose case the search had taken place. 30. We have gone through the various decisions, as has been relied upon by ld A.R. In this regard, we noted that in the case of ACIT vs. Therapeutic India (P) Ltd., (ITA No.4514 & 4515/Del/2012), Delhi ‗H' Bench vide its order dated 31.5.2013 has, inter alia, held as under: "Thus there is nothing incriminating in t....
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....f the Act. In this case, the Tribunal has noted that no books of account belonging to the assesee were found and seized in the premises of the other persons. What was found was in the hard disk was only a confirmation of account that an attached annexures. These documents were held by the Tribunal not to be books of account or documents belonging to the assessee. In view of this fact, the Tribunal has taken the view that the AO should have dropped the proceedings initiated under section 153C of the Act. The Tribunal did not took the view that the proceedings initiated u/s.153C was without jurisdiction. Thus, this decision will not also assist the assessee. 33. We have gone through the decision of ITAT Delhi ‗B' Bench in the case of M/s. DSL Properties (P Ltd vs DCIT (supra), wherein, the Tribunal at para 17 held as under: "At the time of hearing before us, the learned counsel for the assesee has vehemently contended that the photocopy of the audited profit & loss account and balance sheet was belonging to the shareholder/director from whom the same was found and not to the assessee. We agree with this contention of the learned counsel. When a company supplies photocopy ....
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....ch relating to any assessment years, the assessments for such years cannot be distributed; items of regular assessment cannot be added back in the proceedings under section 153C when no incriminating documents were found in respect of the disallowed amounts in the search proceedings". We noted that on the issue whether any addition can be made in the assessment made u/s.153A, when no incriminating documents is found during the course of search, a Special Bench was constituted in the case of All Cargo Global Logistics Ltd vs. DCIT, (2012) 137 ITD 287 (SB)(Mum) on the following question: "Whether, on the facts and in law, the scope of assessment u/s 153A encompasses additions, not based on any incriminating material found during the course of search? Before the Special Bench, Ld Sr. Counsel relied on the decision of LMG International Ltd (supra) as is apparent from para 16 of that order. We noted that in the said judgment in para 52 of its order, the Tribunal has held that section 153A comes into operation if a search or requisition is initiated after 31.5.2003. On the satisfaction of this condition, the AO is under obligation to issue notice to the persons requiring him to ....
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....ound. The decision of Special Bench is binding on us. 38. We noted that the issue is covered by the decision of Hon'ble Delhi High Court in the case of SSP Aviation ltd vs DCIT (2012) 252 CTR (Del) 291. Para 15 of this judgment reads that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. The last line states that there is no requirement in section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must be shown to show to conclusively reflect or disclose any undisclosed income. The facts of this case are that there had been a survey in P group of companies. In the course of search, certain documents were found showing that the assessee acquired certain development rights from P group of companies. A satisfaction was recorded by the Assessing Officer in the case of the assessee u/s 153C. Thereafter, the proceedings were initiated against the assessee u/s 153A and the assessee was....
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.... have carefully considered the submission of the appellant and findings of AO in assessment order. (i) The findings of the AO are based on various incriminating documents found and seized in course of search action in the residential premises of the Dr. Yogiraj Sharma, Shri Sunil Agrawal, Shri Rajesh Jain and survey conducted in the premises of other related persons, statement recorded during search and survey action and post search enquiries conducted by the Investigation Wing. The findings of the AO are specific, sufficient to prove the existence of accommodation of entry providers namely Shri Sunil and Jain and Shri Rajesh Jain and accommodation entries provided by them for appellant M/s. Gajanan Developers and Distributors Pvt. Ltd. in exchange of commission they charged from the company for providing such services. The incriminating paper in LPS-5 is evidence of accommodation entries given through the bank account of Spectrum Chemicals Pvt. Ltd. and Optimate Textile Limited also working out of commission on the basis of amount, month and dates. M/s. Dazzal Confindive Limited is controlled by Shri Sunil Agrawal. The huge cash deposits found in the bank account of the company....
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.... or minor profit, it received share application money from the companies listed above. The share application money had finally been adjusted in both the companies i.e. in Shree Vighnesh Warehouse as well against share allotted at premium of Rs. 90 per share against face value of Rs. 10 per share. Till date, no dividend has been given to the shareholders. This fact leads to a question why any prudent share holder who is unrelated to the company and its Director which is not doing any substantial business activity and that's too at a huge premium. No books of account, bank details, nature of business activities of the above companies and even their confirmation were produced for verification before the AO. It was noticed from the return of income of M/s. Jubilant that it had filed returns of negligible income compared to huge asset holdings (i.e., investments) which shows that the main business of the company was earning from investment but the company was not even earning income at the rate of bank interest of 5% on its investments. No genuine business concern would operate in such a manner over several years. A perusal of the balance sheet of appellant M/s. Gajanan Distributors ....
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....ts, the grievance of the appellant company cannot rightly be mapped or plotted within the terrain of principles of natural justice. The appellant company cannot plead back of adequate time in discharging the onus. (iv) The Ld. AR heavily relied on ratio of the case in CIT Vs. Lovely Export Pvt. Ltd. reported in 319 ITR (ST) 5 (SC). The reliance is also misplaced specially due to mis-understanding and mis-appreciation of the back grounds of the facts of the case in Lovely Export pvt. Ltd. The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that where the complete particulars of the share applicants such as their names and addresses, income-tax file numbers, their creditworthiness, share application forms and share holders register, share transfer register, etc., are furnished to the AO and the AO has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no addition can be made in the hands of the company under section 68 and the remedy open to the Revenue is to go after the share applicants in accordance....
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....pital or in the hands of the Dr. Yogiraj Sharma. The investments in share application money through accommodation entries are obviously not out of the undisclosed source of M/s. Gajanan Distributors & Developers Pvt. Ltd. or Shree Vighnesh Warehouse and Distributors Pvt. Ltd. for the reason already discussed above. It is the name of Shri Gaurav Sharma which is appearing in the statement of entry providers. They have admitted to have received cash from Shri Gaurav Sharma. But, as discussed above, Shri Gaurav Sharma has no such business activities known to the Department. He has no activities to earn unaccounted monies and it is for this reason the AO has ruled out any suspicion which would have warranted protective assessments of the alleged bogus share capital in his hands. On the other hand, it is seen that Dr. Yogiraj Sharma has unaccounted income which can be traced back to early years preceding the Asstt. Yr. 2007-08 and 2008-09. There are ample evidence of close connection of Dr. Yogiraj Sharma with the suppliers namely Shri Ashok Nanda and Shri Yogesh Patariya. There are various business concerns of Shri Ashok Nanda including Netam Industries and Shri Umesh Kajve whose name i....
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....pplier of Health Department. Shri Mahesh Sharma and Smt. Malti Sharma, other shareholders in the alleged company are close relatives of the Dr. Yogiraj Sharma. Incriminating documents and passbooks of the aforesaid employees of Shri Yogesh Patariya including passbooks and other documents of Shri Mahesh Sharma and Smt. Shashi Sharma were found in possession of the Dr. Yogiraj Sharma in his residence at A-70, Shakti Nagar, Bhopal. Thus, Shri Ashok Nanda, Shri Sunil Kumar Deshmukh, Shri Mahendra Suryavanshi, Shri Manish, Shri Mahesh Sharma, Smt. Shashi Sharma are the share holders other than the alleged paper companies wherein Smt. Shashi Sharma and Shri Gaurav Sharma are the directors with certain share holdings. (vi) The subscribing companies are found to be fictitious or non-existent, therefore, one fact is oozing out that M/s. Gajanan Distributors and Developers Pvt. Ltd. and M/s. Shree Vighnesh Warehouse and Distributors Pvt. Ltd., have to discharge the onus to establish the credits of amounts received from the alleged subscribing companies in their books of account to obviate the mischief of section 68 of Income Tax Act. The law is well settled that onus to prove the source o....
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.... 795 is distinguishable. In view of the overall facts and in given circumstances of the case as discussed above, I find that the assessment of share capital received from the fictitious subscribing companies through accommodation entries ought to be assessed substantively in the hands of M/s. Gajanan Distributors & Developers Pvt. Ltd. and Shree Vighnesh Warehouse and Distributors Pvt. Ltd. Accordingly, the AO is directed to assess the same in the hands of the companies as income of the year. The substantive assessment of the sum in the hands of Dr. Yogiraj Sharma is vacated." 42. Ld A.R. before us contended that the assessee has received share application during the year but all the share application money was not treated by the AO to be of undisclosed nature and taxed substantively in the hands of Dr. Yogiraj Sharma. It is only the share application money received from the following persons/concerns which were taken to be of undisclosed nature as detailed below: A.Y. 2003-04: Name of the shareholder Address Date of allotment No. of shares Face value Share application Total amount Jubilant Multitrade (P) Ltd. SAFEX Ghat Kopar Andheri Link Road A....
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....olders. The A.O. has referred to details obtained from the Registrar of Companies in respect to certain corporate share-holders. All the share capital contributions are through proper banking channel and all corporate share-holders are assessed to tax. Most of the share-holders had also contributed for share capital in the case of Flexi Tuff International Ltd. one of the assessee at Indore. The A.O. has also referred in the case of the assessee in the assessment order for the assessment year 2005-06, the assessment order made in the case of Flexi Tuff International Ltd.,. For this our attention is drawn towards page 12 of the assessment order for the assessment year 2005-06. It was pointed out that the AO has observed that the companies subscribing to share capital in the case of Assessee Company are same as that in the case of M/s. Flexi Tuff International Ltd., wherein, such share-holders have been held to be bogus. The A.O. has observed that the assessment order in the case of said company has been passed on 31/03/2006. The assessment order in the case of Assessee Company has been passed by the A.O. on 31/12/2009. It was submitted that the assessment made in the case of M/s. Fle....
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....ling of the return for the assessment years 2003-04 to 2007-08 and reflected same in the assessment order of the assessee indicating the income and investment. Conclusion of the AO is mere inference and there are no legal documents for record to show that JMPL has not made capital contribution with the assessee company or Dr. Yogiraj Sharma has any nexus or connection to these companies. The conclusion of the AO is on merely suspicion, conjecture and surmises. Similarly, in respect of capital contribution made by DMPL, the facts and observations of the AO are similar. It is no where connected with Dr. Yogiraj Sharma. They are independent and having independent identity. JMPL has made capital contribution of Rs. 10,00,000/- each in assessment year 2003-04 and 2004-05. Similarly, DMPL has made capital contribution in the assessee company for a sum of Rs. 10,00,000/- for assessment year 2003-04. Our attention was drawn towards assessment order as well as the order of ld CIT(A) and specifically pointed out that none of the persons relating to various companies who have contributed the share capital denied that they have not given cheques for capital contribution to the assessee company....
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....r concluding that it is incriminating paper which is evidence of accommodation entries given through bank accounts of the corporate shareholders. The said LPS -4 has been a scanned copy and referred to the assessment order for assessment year 2006-07 at pages 14 & 15. From this paper, it is evident that the entries stated therein dated 24.7.2007 and 1.9.2007 and these have been seized from the residence of Shri Sunil Agarwal during the course of search on 7.9.2007. These loose papers does not relate to period to which assessee company has received share capital contribution from the various shareholders. By referring to page 15 of the assessment order, it was contended that the AO himself observed that pages 2,3 & 6 of LPS-4 show the details of balance of the amount present in the different bank accounts on 24.7.2007 and 1.9.2007. The list indicate that Sunil Agarwal was monitoring the balance of amount in various accounts which he was using for providing share capital/capital gain accommodation entries. The lose papers cannot be regarded to be incriminating documents found during the course of search. Our attention was drawn towards page 27 of ld CIT(A) order sub-para 2 in which i....
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....has examined bank account of all the corporate shareholders, ROC details, Directors and office of such companies. In view there of ample legal evidence is on record to demonstrate as to identity of shareholders. Attention was invited to proviso to sec. 68 introduced w.e.f. assessment year 2013-14 to discharge the onus to explain share capital. The provisions of sec. 68 clearly Demonstrates that prior to assessment year 2013-14 the assessee if not establishing the identity of shareholders, no addition in respect to share capital can be made at the hands of company receiving share application money. 45. It was submitted that it is settled proposition of law that assessee cannot be asked to explain source of sources. The evidence on record clearly demonstrates that the money has flown from the accounts of corporate shareholders to assessee. The deposit in bank account of corporate shareholder is the responsibility of shareholder to explain the same to revenue authorities. Assessee cannot be saddled with liability on A.O. doubting the deposit of corporate shareholders. There is no adverse evidence except for the statement of few persons which were not cross examined by assessee and ....
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.... value Share premium Share application Total amount Optimate Textile Industries Ltd. 2, Devkaran Mention IInd Floor, 63 Prince Street, Mumbai 31-03-2005 66,000 10 26,40,000 6,60,000 33,00,000 Rapid Commercial & Finlease (P) Ltd. 20, Dawa Zazar 4th Floor, 1314 RNT Marg, Indore 31-03-2005 34,000 10 13,60,000 3,40,000 17,00,000 A.Y. 2006-07: Name of the shareholder Address Date of allotment No. of shares Face value Share capital Share premium Total amount Optimate Textile Industries Ltd. 2, Devkaran Mention, IInd Floor, 63 Prince Street, Mumbai 31-02-2006 25,000 10/90 25,00,000 22,50,000 25,00,000 Spectrum Chemicals (P) Ltd. 2 Devkaran Mention IInd Floor, 63 Prince Street, Mumbai 21-02-2006 25,000 10/90 2,50,000 22,50,000 25,00,000 Optimate Textile Industries Ltd. 2, Devkaran Mention IInd Floor, 63 Prince Street, Mumbai 21-02-2006 20,000 10/90 2,00,000 18,00,000 20,00,000 Rapid Commercial & Finlease (P) Ltd. 20, Dawa Zazar 4th Floor, 1314 RNT Marg, Indore 31-03-2006 10,000 10 1,00,000 9,00,000 10,00,000 ....
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....ing the balance in these various accounts. The details of these pages does not relate to the assessee relating to impugned assessment year. In our opinion, the impugned quantum addition made in each of the assessment years are merely based on the entries in the books of account of the assessee and are not based on unaccounted books of account of the assessee or books not produced before the AO earlier or the incriminating material gathered by the Investigation Wing of the revenue. 51. The only question before us arises whether in respect of completed assessments, any addition can be made when there is no incriminating material being found in these assessment years. In our opinion, the issue is duly covered by the decision of the Special Bench in the case of All Cargo Global Logistics Ltd(supra), 137 ITD (SB) 26 in which the question No.1 before the Special Bench was answered as under: "a) In assessments that are abated , the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of t he six assessment years separately. b) In other cases, in addition to the income that has already been assessed, th....
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....15;unearthed during the search', he can make the addition. In other words, the determination of ‗total income' in respect of the assessment years for which the assessments are already completed on the date of search, shall not be influenced by the items of income other than those based on the material unearthed during the course of search. However, the scope of such determination of total income is different in respect of the years for which the assessments are pending vis-vis the years for which assessments are non-pending. The total income shall be determined in respect of assessment year for which original assessments have already been completed on the date of search by restricting additions only to those which flow from incriminating material found during the course of search. If no incriminating material is found in respect of such completed assessment, then the total income in the proceedings u/s 153A shall be computed by considering the originally determined income, If some incriminating material is found in respect of such assessment years for which the assessment is not pending, then the ‗total income' would be determined by considering the originally determine....
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....d cheque to the assessee towards the capital contribution but the persons have stated that they received cash from Shri Gaurav Sharma and in lieu of the cash received, they have contributed in the capital of these companies. The statement so recorded was not placed by the AO before the assessee for his rebuttal. There is no opportunity for cross examination was given by the assessee. This fact is apparently clear not only from the assessment order but also from the remand report sent by the Assessing Officer, in which, the AO has requested the CIT(A) to give an opportunity to the assessee. The relevant paragraph of the remand report are reproduced as under: "As regards the claim of the assessee regarding inadequate opportunity provided during the course of assessment proceedings and also the denial of opportunity to cross examine the persons whose statement were recorded and used against the assessee, it is requested that since the Hon'ble CIT(A) has the powers coterminous with the AO., it is requested that he may kindly grant such opportunity during the appellate proceedings or if deemed fit, direct the undersigned to provide such opportunity to the assessee." 57. This is se....
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....who has contributed towards the share capital of the assessee are duly registered under the Companies Act with the Registrar of Companies. It is not a case where the companies are not in existence. The companies are having their respective PAN Nos., filing their income tax returns, holding bank account, issuing cheques in favour of the assessee as contribution towards share capital. The identity of the companies who have contributed towards share capital are duly proved. The transaction that they have contributed towards share capital is also proved as they have issued cheques by submitting the share application to the company and the company has allowed the shares in the name of those companies. This fact has not been denied. Merely because these companies are not able to prove the source from where they have invested and deposited the amount in their bank accounts, the assessee cannot be made liable, as in our opinion, the assessee is not required to prove the source of source. The proviso in section 68 has been inserted w.e.f.1.4.2013 and therefore, the onus to prove the nature and source of such sum so credited shall be on the assessee only from assessment year 2013-14 not prio....