2017 (3) TMI 1388

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....ive years?" 2. The facts of the present case are that the premises of one Mr. Alok Aggarwal were searched on 19.04.1996 resulting in a notice under Section 158BC of the Income Tax Act, 1961 (in short the Act) being issued to him. On the basis of materials seized during the course of the search, a notice under Section 158BD of the Act was issued to the assessee calling upon it to file its return, which it did for the concerned block period i.e. AY 1986-87 to 1996-97. The AO added, in respect of AYs 1993-94 to 1996-97, the amounts of Rs. 5 lacs, Rs. 25,000/-, Rs. 17,66,800/- and Rs. 24.35 lacs respectively. As a matter of fact, the assessee had not filed returns for the AY 1993-94 and 1995-96. The rationale for adding these amounts, may be....

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....Even the confirmatory affidavits do not mention the distinctive numbers of the shares held by the so called shareholders. It shows that the shareholders are not even aware about their shares. The availability of these documents with the assessee company clearly shows that the allottees are not real shareholders and merely name lenders and the total on shares is in the hands of the company. The shareholders have just lent their names and provided entries...." 3. The assessee appealed to the ITAT which was of the opinion that since no material relatable to the assessee was discovered or seized in the course of search, the additions made by the AO were unsustainable. 4. The Revenue places reliance upon the findings of the AO especially h....

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.... in a third party premises, but they clearly related to the assessee. In these circumstances, the notice issued under Section 158BD of the Act and the consequential block assessment proceedings were warranted. 7. Although this Court has answered the question framed, at the same time the facts are that such answer does not dispose of the appeal or the matter. For an addition under Section 68 of the Act, it is now well settled [CIT vs Lovely Exports (P) Ltd. (2008) 216 CTR 195 (SC)] that the AO has to be satisfied about the identity of the share application, the genuineness of the transaction, and the credit worthiness of the investor. Whilst the inquiry in this case - i.e. the seizure of materials from the searched party, were entirely ju....