TaxTMI 
TaxTMI 
2018 (7) TMI 1088
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....olidated order. 2. The grounds of appeal of the assessee are as under: "1. The order passed by the lower authorities are arbitrary, erroneous, without proper reasonings, invalid and bad in law, to the extent to which they are prejudicial to the interests of the appellant. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding the validity of the proceeding initiated u/s 158BD of the Income Tax Act, 1961, in case of the appellant company, in spite of the fact that during the course of the Search proceedings at the premises of the UIC Group, no incriminating materials against the appellant company had been found. 3. (a) On the facts and in the circumstances of the case, the learned CIT(A) erred in upholding the addition of the sum of Rs. 1,21,65,000/- u/s 68 of the Act, by considering the receipt of the said amount as unexplained in spite of there being ample evidences about the genuineness of the said receipt of money by the appellant. 3. (b) On the facts and in the circumstances of the case, the learned CIT(A) erred in not taking into consideration the fact that the appellant had not been provided with oppo....
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....rolled by Shri Sandip Kumar Singhi which have also received money from the bank accounts of the aforesaid four persons. The names of these companies are indicated below .......................................................... Eldot Commotrade (P) Ltd. P14 CIT Road Kolkata 700012 Enquiry has further revealed that the aforesaid four persons deposited substantial cash in their four bank accounts and that these four persons are not traceable. Summons u/s 131 of the I.T. Act, 1961 could not be served in their given addresses. It establishes that fictitious bank accounts were opened in the name of those four persons. It was further observed that bank accounts were introduced by Shri Sandip Kumar Singhi. Since the cash from these four accounts had travelled to the above named companies of Shri Rajesh Kumar Jajodia and Shri Sandip Kumar Singhi, I have strong reasons to believe that the above named companies controlled by Shri Rajesh Kumar Jajodia and Shri Sandip Kumar singhi have role in channeling their own money through these bank accounts. Under the circumstances proceedings u/s 158BD of the I.T. Act, 1961 are required to be initiated in the hands of the above named ....
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....er depositing cash one/two day(s) prior to the date of transfer. The AO made certain enquiries through the inspectors and came to know that these four persons were introduced to the bank to open the account by Mr. Sandip Kumr Singhi who is one of the Directors of the assessee company. The AO asked the assessee to prove the source of cash deposits and creditworthiness of the four persons who have transferred the money to assessee's bank account. According to the AO, the assessee initially failed to produce the aforesaid four persons who had transferred the money to assessee's bank account. Thereafter the director of assessee produced these four persons and, thereafter, after taking deposition from the director of the assessee company, Mr. Sandip Kr. Singhi, the AO concluded that "the amount of Rs. 1,21,65,000/- which has been transferred from the bank accounts of the aforesaid four persons to the assessee for shares sold by it to the four persons is not the assesssee's actual income because the ultimate beneficiary finally the UIC Group". Therefore, the AO noted that the entire purpose of shares sale and purchase by the three layers of share transactions undertaken by the company co....
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....f through the maize of cash deposits and share transactions, where there was no actual share transactions but only accommodating book entries of the respective intermediary companies. Therefore, the AO taxed the Rs. 1,21,65,000/- on a protective basis in the hands of the assessee and on substantive basis in the hands of the UIC Group. On appeal, the Ld. CIT(A) was pleased to dismiss the appeal of the assessee and to change assessment from protective to substantive assessment in the hands of the assessee company. 10. The main grievance of the assessee company is that sec. 158BD proceeding could not have been initiated against the assessee company because the shares seized from the premises of UIC Group did not belong to it, when the search was conducted on 07.05.2002. According to the assessee, the scrip's in question had already been sold during years 1999, 2000 and 2001, so on the date of search the scrip's found and seized does not belong to it. According to the assessee company, when the search happened on 07.05.2000, it had already sold the shares which it had purchased during October and November, 1999 and February, 2000 to the aforesaid four persons for a consideration of ....
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....son, two conditions are required to be fulfilled: i. For assessing the undisclosed income of any other person i.e., other than the person with respect to whom search was made under section 132, the Assessing Officer must be satisfied that the undisclosed income belongs to such person i.e., the person other than the searched person. Thus the Assessing Officer cannot proceed against such other person, without having the required satisfaction. The requirement of satisfaction is, therefore, a prerequisite condition for initiating assessment proceedings against any other person, under section l58BD. The word 'satisfaction' appearing in section l58BD clearly denotes that it should be based upon the material found during the course of search and such satisfaction should be brought on record. ii. The Assessing Officer must hand over the seized books of accounts and other documents and assets on the basis of which satisfaction has been recorded, to the Assessing Officer having jurisdiction over such person other than the searched person. 13. The above view has been taken by the Hon'ble Supreme Court in the case of Manish Maheshwari vs ACIT [289 ITR 034].Now the ....