TaxTMI 
TaxTMI 
2017 (7) TMI 38
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....Rs. 5,00,00,000/- u/s 68 on account of unexplained investment in share capital of various companies. Without appreciating the fact that the assessment order framed after due verification. 2. Whether on facts and in the circumstances of the case and in law. The Ld. CIT(A) is justified in allowing the addition made of Rs. 2,00,00,000/- u/s 68 on account of unexplained investment in share capital of various companies, without appreciating the fact that the assessment order framed after due verification. 2. The assessee in its C.O. No. 255/M/2014 in ITA No. 6101/M/2012 raised the following grounds of objection/ appeal: 1. Whether on facts & circumstances of the case the Ld. CIT has erred in concluding that the action of the Learned Assessing Officer in invoking the provisions of Section 153C is justified. The appellant prays that the condition of Section 153C is not satisfied and the Learned Assessing Officer has wrongly invoked the provisions of Section 153C. 3. Brief facts of the case are that a search and seizure action u/s 132 of the Act was conducted on 04.03.2010 at the business premises of Jogia Properties Ltd., at 208, Ashirwad Building, Ahmedabad Street, Carnac Bun....
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....1 on 15.04.2010.The AO served the notice u/s 142(1) dated 05.05.2011 and asked to give the details of share application money and utilization thereon in respect of share application money of Rs. 2.00 Crore received from M/s Delton Exim Pvt Ltd. The assessee filed its reply dated 01.11.2011 and contended that all share holding of company who have made investment in assessee-company are independent existing corporate bodies, they are maintaining their regular books of account, having their own bank account, filed separate return of income, all details were supplied, the assessee further contended that identity of share holder is established, therefore, confirmation is filled with supported document. The assessee further vide its letter dated 30.11.2011 submitted another reply for AY 2009-10 and 2010-11 which is reproduced as under: 1. The correct status of our company is public limited company and the name of company is Martand Properties Ltd. The registered office of the said company till the date of search action on Jogia Properties Ltd. was 20, Bhatia Niwas, 233/235, Samuel Street, masjid Bunder, Mumbai 400003. Please refer to original return of income filed for A.Y. 2009-10 in....
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....o the extent of Rs. 5 crore pertaining to AY 2009-10. 4. However subsequently I gathered the information, the papers, the documents, the confirmation, bank statement, balance sheet and other records of all the 5 companies. Based on the information and documents I had observed that all the 5 companies are genuine and they have invested in the share capital of the company. No confessional statement is given by any of 5 shareholding company before the investigating wing Mumbai or anywhere else. The transaction of share investment by all 5 companies can be explained. Therefore while filing the return of income for A Y 2009-10 in response to the notice under section 153C, the company did not include the income of Rs. 5 crore. The noninclusion of income obtained on 15 April 2010 may be treated as a retraction of income. Please refer to letter dated 18 July 2011 submitted in your office on 22 July 2011 wherein also the fact of retraction has been mentioned. The real income as per the provision of income tax act 1961 is only chargeable to tax. No evidence or documents was found to prove that the head paid case of received share application. Mr Jose Matthew is not director or employee of....
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....at we have issued the shares to all the five shareholding companies. The details of distinctive number of shares, share certificate numbers and number of shares issued have been submitted to you. We had intimated the Registrar of Companies of issue of shares by filing the requisite forms. We had filed the annual return in which year after year their names are reflected as shareholders. All these events happened much prior to 4/3/2010 when the search action is taken against M/s. Jogia Properties Ltd. 12. We further state that your have in para 7 of the proceeding sheet dt. 11.11.2011 have referred to the sum of Rs. 1,50,00,000/- received by us as share application money from M/s Sidh Housing Delopment Co. Ltd. and Rs. 1,00,00,000/- from M/s. Oshin Investment in A. Y. 2010-11, aggregating to Rs. 2,50,00,000/-. In this regard we have to state that we have already filed details of share application money received issue of shares against share application, cheque No., name of the Bank, Branch and confirmation. These are the same parties from whom in A. Y.2009-10 also the amount is received towards share application. We have established before you the identity and credit worthiness of....
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....tion u/s 132 conducted on 04.03.2010. We have noticed that the C.O. of the assessee is barred by 390 days of limitation period. The ld. AR of the assessee during the course of hearing was asked to explain the cause of delay. The ld. AR of the assessee argued that assessee has raised legal ground of objection in its C.O. which goes to the root of the case. The ld. AR of assessee further invited our attention to the order of Co-ordinate Bench of this Tribunal in group cases in ITA No. 6104, 6105/Mum/12 and C.O. No. 259 & 260/Mum/2012, wherein the similar delay in filing the Cross Objection on identical grounds was condoned by the Tribunal. On the other hand, ld. DR for the Revenue not disputed the contention of ld. AR of assessee and submitted that the delay was condoned by the Co-ordinate Bench. 7. We have considered the rival contention of the parties and gone through the order of Co-ordinate Bench in assessee's group case wherein the Tribunal in para 35 of its order condoned the delay in filing the Cross objections holding that assessee has raised purely a legal issue, which goes to the root of the issue and was allowed. We respectfully following the decision of Co-ordinate Ben....
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....uesting for inspection of the assessment records. The said assessment records were with the Hon'ble Commr. of Income Tax, DR, Smt. Neena Pandey, f-Bench, Mumbai ITAT. The Inspector Ms. Ambika Shashidharan, attached to f-Bench, Mumbai ITAT, gave the inspection of the records on 20/08/2015 at 3 pm. Shri Dilip V. Lakhani, Chartered Accountant, the authorised representative and Shri Viresh Sohoni, the representative of the appellant, took the inspection of the assessment records and the findings of the said inspection are as under. 1. There is no proof or evidence on record to the effect that the Assessing Officer gave the copies of the statement recorded of Mr. Mukesh Chokshi on 25/11/2009 and 11/12/2009. 2. No proceeding sheet / order sheet was available for inspection, 3. No recording of any satisfaction for initiating proceedings u/s 153C against 7 companies. Place: Mumbai Dilip V. Lakhani Viresh Sohoni Dated: 20/08/2015 Authorised Representative Representative of Appellant 36. It is clear from the above inspection report that no satisfaction has been recorded by the AO of the searched person i.e., M/s. Jogia Properties Ltd., for initiating proceedings u/s.....
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....ng notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the requirement is not satisfied, recourse cannot be had to the provisions of section 153C. Held, allowing the petition, that admittedly, the three loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the Revenue that the three documents were in the handwriting of the petitioner. In the circumstances, when the condition precedent for issuance of notice was not fulfilled action taken under section 153C of the Act stood vitiated. 39. Learned AR also invited our attention to page 3 of the paper book filed in cross objection proceedings. Page 3 is the copy of the satisfaction recorded u/s 153C in the hands of Karburi Properties Ltd. The reference to years are 2004-05 to 2009-10. The Ld. Assessing Officer has relied upon page 1 of Annexure - A 1 of the seized panchnama dated 04.03.2010. The said page 1 is on page 4 of the paper book. The said page contains the details of 24 entit....
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....sing Officer of a person against whom search action is taken, records a satisfaction that any money, bullion, jewellery or other valuable article or thing, or books of account or documents seized, belong to a person, other than a person referred to in Section 153A, then the such books of account or documents or assets seized shall be handed over to the Ld. Assessing Officer having jurisdiction over such other person. The recording of the satisfaction is a must and even if the Ld. Assessing Officer for the person searched and the 'other person' is the same, still the satisfaction has to be recorded by the Ld. Assessing Officer of the search person referred to in Section 153A. 41. of the proposition that for initiating proceedings u/s.153C, satisfaction should be recorded in the file of searched person, reliance can be placed on the following judicial pronouncements. a. Vijaybhai N. Chandrani Vs. Asst. Commr. Of Income Tax Reported in 333 ITR 436 (Guj. HC) b. Pepsico India Holdings (P.) Ltd. Vs. Asst. Commr. Of Income Tax ITA No.6104/12 & 11 other appeals CO No.259/12 & 11 other cross objections Reported in 228 Taxmann 116 (Delhi HC) c. Beejay Securities & Finance....