TaxTMI 
TaxTMI 
2018 (10) TMI 732
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceived Rs. 100 crores as share capital and share premium during year under consideration. The assessee has submitted list of shareholders as on 17-03-2008 which runs into 23 pages and the shareholder are 555 are in number. However as on 31-03-2008 the shareholders are eight investment and finance companies only i.e. all the shares from the shareholders as on 17-03-2008 has been transferred to the eight listed companies mentioned at page-2 of the assessment order which are (1) M/s. Hillridge Investment Ltd., (2) Karishma Industries Ltd., (3) Nisha Holding Ltd., (3) Parisudh Finance Co. Pvt. Ltd., (5) Pellcon Finance & Leasing Ltd., (6) Pitambara Securities Pvt. Ltd., (7) S.R. Cables Pvt. Ltd., and (8) Vogue Leasing & Finance Pvt. Ltd., The addresses of these parties, PAN, number of share and percentage are mentioned. The assessee submitted confirmation, copy of bank account, copy of ITR, copy of audited balance sheet, statement of account for F.Y 2007- 08 and copies of earlier assessment orders in respect of all these eight parties. Information under section 133(6) was called for from the Bank, which revealed that almost all the accounts were opened in the month of February and Marc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of account for each year in question, copies of the schedules of investment of these companies to show that these companies have made investment in share capital of the assessee company, copies of the earlier assessment orders in their cases, copies of the bank accounts, copies of the bank statements of all the shareholders of relevant period reflecting the transaction with the assessee-company, copies of the confirmations of statement of accounts of all the shareholders and copies of master data of these eight companies obtained from the website of Registrar of Companies. The assessee- company, therefore, proved the identity of the shareholders, their creditworthiness and genuineness of the transaction. The assessee-company also filed parawise replies to the report of the Inspector above and the functioning of the shareholders. It was explained that assessee-company has no concern with the opening of the bank account by the shareholders. They are existing companies and assessed to tax. The report of the Inspector was not confronted to the assessee-company. The report of the Inspector did not dispute that these companies were functioning at the address given by the assessee- comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ition under section 14A of the I.T. Act, the Ld. CIT(A) also noted that assessee-company has earned dividend income of Rs. 590/- only. The action of the A.O. in making disallowance was upheld in principle, but, it was found reasonable if 1/3rd of the expenditure claimed by the assessee-company is attributable towards earning of the exempt dividend income. The Ld. CIT(A) accordingly upheld the disallowance of a sum of Rs. 5,27,32,100/- and deleted the rest of the addition. The appeal of the assessee-company has been partly allowed. 10. The assessee on Ground Nos. 1 to 8 challenged the addition of Rs. 100 crores under section 68 of the I.T. Act as well as disallowance under section 14A read with Rule 8D of the I.T. Rules, 1962. The assessee-company also filed an application for admission of the following additional ground of appeal : "On the facts and in the circumstances of the case and also in law, the assessment order passed in the appellant's case under section 153C/153A dated 28.03.2013 need be given precedence over the impugned order of assessment dated 31.12.2010 in view of the decision of the Hon'ble jurisdictional Delhi High Court in the case of CIT vs. Anil Kumar Bhatia ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The timelimit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 22. N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made. 23. In the light of our discussion, we find it difficult to uphold the view of the Tribunal expressed in Para 9.6 of its order that since the returns of income filed by the assessee for all the six years under consideration before the search took place were processed under Section 143(1)(a) of the Act, the provisions of Section 153A cannot be invoked. The Assessing Officer has the power under....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The result is that the first substantial question of law is answered in the negative, in favour of the Revenue and against the assessee." 11.1. Learned Counsel for the Assessee submitted that additional ground being legal in nature may be admitted for adjudication in view of decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Limited vs. CIT (1998) 229 ITR 383 (SC) in which it was held that "the Tribunal is not confined only to issues arising out of the appeal before the Ld. CIT(A) but has discretion to allow a new ground to be raised if a pure question of Law arise, for which are on record of the authorities below, the question should be allowed to be raised if it is necessary to assess the correct tax liability." He has submitted that assessee-company could not raise this additional ground before Ld. CIT(A) because the assessment order under section 153A/153C dated 28.03.2013 was passed after filing of the first appeal before Ld. CIT(A). 12. The Ld. D.R. on the other hand, strongly objected to the admission of the additional ground of appeal on the ground that such additional ground has been raised for the first time. There is no mention of any se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tice under section 153C/153A of the I.T. Act, 1961. The A.O. after discussion, assessed the income at returned income of Rs. 19,92,354/-. It is, therefore, clear from these two assessment orders that search was conducted in Shri S.K. Jain group of cases and associated persons. Shri S.K. Jain is Director of the assessee company. During the course of search incriminating material pertaining to assessee-company were found and seized. Therefore, A.O. initiated proceedings under section 153C of the I.T. Act, 1961 against the assessee-company and ultimately, completed the assessment. Learned Counsel for the Assessee relied upon decision of Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar Bhatia (supra) in which it was held that "there can be only one assessment order in respect of each of the six assessment years in which both the disclosed and undisclosed income would be brought to tax." The Hon'ble Delhi High court also further observed that "in case, assessments are completed under sections 143(1) or 143(3) and noted that if such an Order is already in existence, having obviously been passed prior to initiation of search/requisition, A.O. is empowered to reopen those proceed....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... prima facie supported by the Judgment of Honb'le Delhi High Court in the case of CIT vs. Anil Kumar Bhatia (supra), therefore, we are of the view that such additional ground should be admitted for the purpose of hearing. There is no bar in admitting such additional ground of appeal even if it was not taken before the authorities below. The delay in filing the additional ground is of no consequence because when appeal is filed within the period of limitation, the additional ground could be raised at any time during the pendency of the appeal before the Tribunal. The decisions relied upon by the Ld. D.R. would not support the case of the Revenue. Considering the totality of the facts and circumstances of the case and above discussion, we admit the additional ground of appeal for the purpose of deciding the matter in issue. Since this issue goes to the root of the matter and authorities below has no occasion to examine the correctness of the additional ground raised by the assessee-company for the first time before the Tribunal, therefore, we are of the view that the additional ground should be set aside to the file of A.O. for deciding the same in accordance with law. We, accordingl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve also declared nominal income. Seven investors opened bank account with the same bank. Bank opening forms are not properly filled-in. Inspector report was against the assessee-company because they were not found functioning from their address. The investors/Directors were new only and appointed after assessment order. Most of them having no investment in their company. The onus is upon assessee-company which have not been discharged. No justification have been given for issuing shares at premium. The Ld. D.R. also relied upon several decisions in support of the findings of the authorities below in his written submissions. 19. We have considered rival submissions. Though we have noted above that once legal ground is restored to the file of A.O. for adjudication as per Law, therefore, this issue on merit shall also be restored to the file of A.O. for deciding the same afresh after taking decision on the legal issue. However, we may note certain more facts which also justify for remanding of the matter on merits to the file of A.O. The statement of Shri S.K. Jain, Director of the assessee-company was recorded at assessment stage under section 131 of the I.T. Act in which in answer ....