TaxTMI 
TaxTMI 
2017 (4) TMI 1008
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.... of Rs. 23265000/- made by the AO u/s 68 of the Act, 1961. 2. On the facts and in the circumstances of the case, the ld CIT(A) has erred in holding that no addition can be made in the search assessment under the provisions of section 153C/ 153A when on incriminating material relating to the issue is found. 3. The order of the ld CIT(A) is erroneous and in not tenable on facts and in law." 3. For AY 2007-08 the following grounds are raised:- "1. On the facts and in the circumstances of the case, the ld CIT(A) has erred in deleting the addition of Rs. 32126000/- made by the AO u/s 68 of the Act, 1961. 2. On the facts and in the circumstances of the case, the ld CIT(A) has erred in holding that no addition can be made in the search assessment under the provisions of section 153C/ 153A when on incriminating material relating to the issue is found. 3. The order of the ld CIT(A) is erroneous and in not tenable on facts and in law." 4. Briefly stated the facts are that assessee is engaged in the business of providing medical transcription services and remote accounting business for its overseas customers. During the A Y 2004-05 the assessee has shown advance against share capi....
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....ll companies of Today group who are/were not doing any business; have no books of account and have just been floated and controlled by Sambhirs for infusion of their unaccounted money is the key/flagship companies of Today group. 4. Existence of paper/shell companies which are controlled by Gambhirs: 4.1 The various paper/shell companies which have been floated by Gambhirs and have been used as a conduit to transfer their unaccounted money into the assessee company are as under: s. No Name Address Date of incorporation Status as per ROC website Directors 1. Affluence Construction Pvt Ltd 373, 2"' Floor, East of Kailash, New Delhi-110065 29.11.2006 Strike off Defaulter in filing form 32 as per ROC site 2. Chintapurni Prop. Build Pvt Ltd BG-6/237D, Paschim Vihar, New Deli-110063 20.05.2006 Strike off JagtarSingh Ashok Chopra 3- Mega Business Centre Pvt Ltd 373, 2nd Floor, East of Kailash, New Delhi-110065 21.06.1995 Strike off SanjayJatwani Ashok Chopra 4, S. M. Infotel Pvt Ltd BG-6/237D, Paschim Vihar, New Deli-110063 30.06.2004 Active in progress (last AGM- no date) Jagtar Srngh SanjayJetwani 5. Mountain Land Developers Pvt Ltd 373, 2nd Floo....
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....ither books of accounts are maintained nor any business activities are carried out by these companies from those premises. It has been stated that all these companies are controlled by Today 6roup of companies having office at Statesman House, Connaught Place, New Delhi. 4.3.1 During the course of surveys, no company was found to be running from the aforesaid premises and no records in terms of books of account/secretarial records of these companies like shareholder register, minutes register, share transfer register, cash book, bank book. Journal book etc were found. Persons present there have deposed on oath that they were directly or indirectly acting at the behest of Today 6roup. The relevant portions of these statements indicating the above are reproduced as understatement of Sh. Jagdish Prasad Vohra aged 58 years 5/o Late Sh. Kanhaiya Lal Vohra R/o 1878, S.fi.M. Nagar, Faridabad recorded on oath/ solemn affirmation on 26/11/2009 at 10.30 AM during the course of survey proceedings at 373. 2nd Floor. Sont Nagar. East of KaMash. New Delhi. Q-1 Please identify yourself? Ans. I am Jagdish Prasad Vohra, aged 58 years son of Late Shri Kanhaiya Lal Vohra R/o 1878, San/ay Gandh....
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....yees of above stated companies and -what business activity is being done by the above companies? Ans. I have joined here about two years back I don 't know since when these rubber stamps are lying here. There is no employee working in this office in respect of above stated companies. No business activity is done by the above companies at this premise. Q.8. Where are the books of accounts of the above stated companies mentioned at serial no. 6 and 7? Ans. I don 't know where the books of accounts of these companies are maintained. Hwever 1 confirm that the books of accounts of there companies are not maintained here. Q-9 Who pay the salary and rent? Whether it is paid in cash or cheque? Ans. Salary and rent is sent bv the office at statesman (Today Homes and Infrastructure Pvt. Ltd.) in cash every month through Sh. Ashok Chopra Q.IO. Do you any banking transactions also on behalf of any of the business concern? Ans. Not at all. O.I I. Who are the directors/persons having substantial interest in these companies? Ans. As stated earlier. I have been kept on salary by M/s Today Homes and Infrastructure Pvt Ltd. and I report to Sh. Ashok ChoDra field in charge a....
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..../s Cosmo Realtech Pvt. Ltd. (3) M/s Khushboo Properties Pvt. Ltd. (4) M/s Gay Developers Pvt. Ltd. (5) M/s Megha Business Centre Pvt. Ltd. (6) M/s Singh Bwldtech Pvt. Ltd. (7) M/s Sangrah Build Tech Pvt. Ltd. (8) M/s Bravo Compect Systems Pvt. Ltd. (9) M/s Adhir Buildwell Pvt. Ltd. (10} M/s Vijay Rath Properties Pvt. Ltd. (I I) M/s Goldy Developers Pvt. Lid. (12) M/s Ambika Buildcon Pvt. Ltd. (13) M/s VKPK Properties Pvt. Ltd. (14) M/s High Time Properties Pvt. Ltd. (I5) M/s Ayush Portfolio Pvt. Lid. 16) M/s Pure Gold Properties Pvt. Ltd. (17) M/s Aerial Estates Pvt. Ltd. Q-$. . Please state since when you are director in M/s Today Hotels Pvt. Ltd, and also provide your job profile in this concern? Ans. 1 am director in the above said company for the last three years. I am working as Field Officer and liaisomng with the Income Tax Office, Registrar of Companies. ODA and other work relating to market/bank assigned by Mr. Vmay Subhiki, Vice President, Today Hotels (P) Ltd. 1 am drawing a salary of Rs. 25, OOO/- per month and no other perks are being provided by the company. Q.6 Please state/ give the details of the Board Meeting held in the past three years of M/....
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....Singh : VKPK Properties Pvt Ltd Q.I 7. You have stated in reply to Q. No. 13 & 15 that office address of the following companies is BG-6/237D. Janata Hats, Paschim Vihar, New Delhi: (I) M/s Cosmo Realtech Pvt Ltd (2) M/s Singh Baildtech Pvt Ltd (3) M/s Adhir Buildweil Pvt Ltd (4) M/s Ambika Buildcon Pvt Ltd (5) M/s VK PK Properties Pvt Ltd Please state, what type of activities are to be held at the above office address? Please also state whether the books ofA/c are kept or maintained at the above address Ans. We are usin% the above office address for onlv name Sake We have avoointed onlv one man namelv Sh Harsh Tahvar to receive daks and correspondence and / paid Rs. 5.000/- to him after setting the same from mv owner Shri Raiender Gambhir other them receiving daks,/notes/ correspondences, no business activities are held at BG-6/237D, Janata Flat, Paschim Vihar. New Delhi. The books ofA/c are onlv kept or maintained at /6th Floor, Statesmen House. Barakhamba Road, New Delhi. Q.I 8. Please give the office address of the following companies, their business activities, their directors and name of the place where the books ofA/cs are kept or maintained: I) M/s Gay Developers P L....
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....er in this premises several documents pertaining to other coys have been found, please consider your thought and give the detail of company's Directly & Indirectly control by Gambhir family? As evident from documents A-1. Following are other group coy (Today Hotels Pvt. Ltd Group and Gambhir family also) as under: 1) Paragon Travels & Tours Pvt Lid 2) Paragon Overseas Pvt Ltd 3) Samanh Crafts Pvt Ltd 4) Horizon Distributors Pvt Ltd 5) Citron Traders Pvt Ltd 6) Savoy consultant Pvt Ltd 7) Epson Systems Pvt Ltd 8) Jasmine Systems Pvt Ltd 9) Novelty Consultants Pvt Ltd 10) Anjali Overseas Pvt Ltd 11) Utility Systems Pvt Lid 12) Lazor Impex Pvt Ltd 13) Puneet Properties Pvt Ltd 14) Blue Chip Portfolios Pvt Ltd 15) Heritage Collections Pvi Ltd 16) Preference Properties Pvt Ltd 17) Herry Poultries Pvt Ltd 18) S.M. Infotel Pvt Lid 19) S. K. S. Properties Pvt Ltd 20) Balance Build Tech Pvt Ltd 21) Believe Build Tech Pvt Ltd 22) Singh Buildtech Pvt Ltd 23) Manu Communications Pvt Ltd 24) Megha Business Centre Pvt Ltd 25) Kalrajan Finvest and Leasing Pvt Ltd 26) Ayush Portfolios Pvt Ltd 27) APJConstruction Pvt Ltd 28) Cherful Deve....
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.... Q. 10 Your reply to above queries suggest that you merely junction as paper/dummy director of M/s Today Homes & Infrastructure Pvt Ltd Q.12 Please state exact nature of working in THJPL? Ans. Ans: I am basically Iiaisoning with Govt. agencies like DDA, MCD, Environmental Ministries to get A'OCsfor the projects in Delhi. 4.4.4 STATEMENT OF SHR1 GVRMEET SINGH (DIRECTOR) RECORDED ON 26.11.2009 AT HIS RESIDENCE 221/255. GALI NO.7. yiSHNU GARDEN, NEW DELHI Q-2. In which company you are presently working and in what capacity? Ans. ! am working in Today 's Homes & Infrastructure Pvt. Ltd. (Group of companies). I am not attended to any particular company of the group but work for the Today's group of companies. I work, to say, as field supervisor. Previously) was attached with MJs Today Homes Pvt. Ltd. in the capacity of commercial officer, looking after outside work. Q.3, Are you Director in any company of Today 's Group Qf companies? Ans. I exactly don 't remember the names of the companies of Today 's group in which I am Director but as far as 1 know, I am Director in some of the companies, since I sign some of the papers of the companies whenever....
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....s you are not disclosing name of the companies in which you claim to be one of the Directors? Ans. I do not remember the name of the companies in which I am one of the Directors. Q.23. Are you aware that you are giving this statement on oath & you will speak truth? I am once again explaining you provisions oflPC t4 /. Tax Acts & making you aware of the fact that any false or untrue statement given by you shall make you liable to prosecution. Under the Indian Penal Code of the I. Tax Act. J961. Ans. Yes, I am aware of this fact Q.24. Do you know about the following companies:-A. M/s Cosmo Realtech Pvt. Ltd. B. M/s Character Construction Pvt. Ltd. C. M/s Creative Pro-build Pvt. Ltd. D. M/s Cheerful Developers Pvt. Ltd. E. M/sN. Y. Dox Services Ltd. If so, then under what capacity, you are signing the papers? Ans. 1 am not aware of the above named companies. ! received the papers at M/s North Gate shopping mall, Gujramvala Town, New Delhi. Get it signed. 1 do not know who sends the paper to me Neither / know the name of persons who brings the paper. Q.25. In Answer to Question No. 24, you had stated that signed the papers at North Gate shopping mall, Gujranwala Town, Delhi....
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....14/01/2010 AT HIS RESIDENCER-8. NEW PRASAD NAGAR, DELHI Q.15 Kindly state where are the books ofA/c ofaUthe^companiesinwhichyou are Director are kept. Ans. Mr. GulshanKurnat Gambhir, Owner of Today Group of companies about this. I do not know about the books of a/c of the companies which I am Director Q.17. Vide question no. 15 of this statement you had answered about the books of A/c of the companies in which you are Director that you are not aware where ihe books of A/c of these companies are being maintained. How is it possible for a person who is company secretaryby profession[to not aware^bounhe booh: of'A/c*of'the companies iriv^hich he ts Director k.mdly^xpiain Ans. Because I am a dummy Director in these companies which are mainly controlled by Mr. Culshan Kumar Gambhir 48. Friends Colony East, New Delhi 4.4.6 STATEMENT OF SHR1 GULSHAN KVMAR GAMBHIR RECOREDED ON 27.11.2009 AT 8(tm) FLOOR, STATESMAN HOUSE. CP, NEW DELHI Q.8 Ans. In which capacity you are involved in M.-x Today Homes & Infrastructure Pvt Ltd and Us group companies? Ans: I am CEO & the M/s Today Homes 4Infrastructure Pvt Ltd and I am not working in any other company. Q.9. Who are the Direc....
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....of accounts taken from the accounting section, the share capital as on 29/0}/2008 at Today Homes infrastructure Pvt Ltd (THIPL)Stand at 23,69.47,000/- and the, share premier A/c as on 2J/01/2Q08 at Rs. 2,12,26,23,QQO/further, share, capital in M/s GPS Properties Pvt Ltd as on 28/03/2005 stands at Rs. 4,9,94,0001- and share premium as on 28/03/2005 stands as 43JO,46,000/-. Please explain source and manner of acquisition of the share capital and share premium A/c is these two companies. Ana. The above said share capital and share premium has come fromJD$erent/ various Pvt investment companies. Q.17 As per your reply to Q No.15 you have stated that the above two companies were in receipt of share capital and share premium from various Pvt investment companies. Please explain whither you have approached these companies for investing in above 2 comparaes as these companies had approached you Ans. Various persons on different occasions approached in on behalf of the above said companies to make the investment in our two companies. Q.I 8. Please specify the above persons and jiroducethe sharere application formjtfthg above companies alongwith counterfoil of share certificate issued ....
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....tc. The scanned copy of page No. 135 of Annexure A-l, Party H-2 is as under: Sl NO. Digital signature Password 1. Mr. Vinay Subhikhi 12345678 2 Anil Narula 1234567 3 Sanjay Jatwani 12345678 4 Baljeet Sineh 12345678 5 Nand Kishore 12345678 6 Ashok Chopra 04082007 7. RK Rattan raj 1234 8. Ashok Arora 12345678 9 Bhim Arora 12345678 10 Anm Nayyar 12345678 II Sawabh Nigam 12345678 12 Jagtar Singh noi known 13 Ajay Sood 12345678 14 Gurraeet Singh 12345678 15 GKGAMBHIR PASSWORD With the help of digital signatures, most of the statutory compliances including filing of income tax returns, filing papers before the ROC, etc. can be made by any person in the name of the person whose digital signatures the other person is aware of. Availability of these documents in the office of M/s Today Homes and Infrastructure Pvt Ltd further strengthens the fact that the directors of the above mentioned companies are merely employees of Today Group or are namesake/dummy directors under the control of Gambhirs. The availability of digital signatures with Sambhirs further clearly indicates that they were the main persons controlling these companies. ....
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....ree parties, there was nevertheless no justification to draw an adverse inference. This approach as accorded approval by the Hon'ble Supreme Court in these words:" 5. Consequently, after discussion of various legal proposition an addition of Rs. 23265000/- was made u/s 68 of the Act. The assessment u/s 143(3)/ 153C/ 153A of the Income Tax Act, 1961 was made on 27.12.2011 at Rs. 26955615/- and for AY 2007-08 the assessment was framed at Rs. 32123000/- on even date. 6. The assessee aggrieved with the order of the AO has preferred appeal before the ld CIT(A), who held that the addition has been made without reference to any material having being found during the course of search and therefore is clearly outside the scope of proceedings u/s 153C of the Act. further, on the merits he held that the appellant furnished details such as sign confirmation, PAN, copies of the audited financial statements and bank statements to substantiate the genuineness of the transaction and creditworthiness and the ld Assessing Officer has not produced any adverse material to repudiate the veracity and genuineness of the transaction. The onus cast upon the assessee stood discharge and hence, the ad....
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....herefore, the onus has not been discharged by the assessee. She vehemently supported the order of the ld Assessing Officer. 10. Despite notice none appeared on behalf of the assessee in response to notice issued on 07.01.2017 fixing date of hearing on 23.02.2017 therefore now the issue is decided on merit. 11. We have carefully considered the rival contentions. The first ground of appeal of the revenue is against deletion of addition of Rs. 3.21 crores u/s 68 with respect to increase in share capital issued to following parties for AY 2007-08. S. No. Name Amount received FY 2006-07 (in Rs.) 1. Affluence Construction Pvt. Ltd 12500000/- 2. Chintapurni Prop Build Pvt. Ltd 15000000 3. Mega Business Centre Pvt. Ltd 400000 4. SM Infotel Pvt. Ltd 4223000 Grand Total 32123000 12. The assessee submitted the address, PAN, copies of returns and financial statements of parties for Assessment Year 2008-09 and 2009-10. From the above it is apparent that for respective assessment years i.e. AY 2007-08 the assessee did not submit any information about the source of the funds available with these companies for depositing with the assessee. The contention of the ....
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....ay that addition should be strictly made on the basis of evidence found in the course of search or other post search material or information available with the AO which can be related to the evidence found, it does not mean that that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of seized material. Further Hon'ble Delhi High Court considering the above case in Dayawanti Vs. CIT (Supra) in para No. 16 has held that section 153A which provides for an assessment in case of search and was introduced by the Finance Act, 2003 w.e.f 01.06.2003 does not provide that the search assessment has to be made strictly on the basis of evidence found as a result of search or other documents and such other materials or information as are available with the AO and relatable to the evidence found. In that particular case the assessment u/s 153A was made. We have also perused the finding given by the ld Cit(A) at page No. 100 to 101 of his order wherein without referring any of the material found during the course of search in para No. 1.6 he has held as under:- "1.6 Appl....
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....e of search in spite of the facts that ld AO has pointed out all these materials such as books of accounts, other documents, statements of various persons, survey report on the investor companies, including the pre search inquires and post search inquires conducted by revenue over and above the modus operandi of the group discussed , which should have been considered in proper perspective. The ld AO has devoted substantial portion of his assessment order on that incriminating material only, which has not been appreciated by the ld CIT (A). In view of this we set aside this ground of appeal also before the ld CIT (A) with a direction to examine the material unearthed during the course of search on the group looking at the pancahnama including the statements of various persons ,survey reports on investing companies and then decide the issue that whether the addition has been made by the ld AO based on the incriminating material found during the course of search or not. In the result ground no 2 of the appeal of the revenue is allowed with above direction. 16. Ground No 3 & 4 are general in nature and therefore same are dismissed. 17. In the result appeal of the revenue for AY 2007-....