AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 409
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....filed Cross Objections against the appeals filed by the Revenue. Since identical grounds have been taken by the Revenue as well as the assessee in the appeals and Cross Objections, respectively, therefore, these were heard together and are being disposed of by this common order for the sake of convenience. 2. First we take up ITA No.175/Del/2017 as the lead case. Facts of the case, in brief, are that the assessee is a company and derives income from financing activities. The original return of income was filed on 25th September, 2013 declaring total income of Rs. 2,70,43,362/-. A search and seizure action u/s 132 of the IT Act, 1961 was initiated in the case of the assessee on 18th June, 2013 at Shanti Niketan Building, 8, Camac Street, Kolkata. Subsequently, the assessment jurisdiction over the assessee was transferred from Central Circle-29, New Delhi to the PCIT (Central)-3, New Delhi vide order u/s 127(1) dated 8th May, 2015 with immediate effect. In response to notice u/s 153A of the Act issued on 22nd April, 2015, the assessee filed the return on 12th May, 2015 declaring total income of Rs. 2,70,43,362/-. Subsequently, the Assessing Officer issued statutory notices u/s 143(2....
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....certificate of each of the share holders; ii) Copy of letter by assessee company to the share holders intimating the allotment of shares; iii) Copy of share application form of the share holders; iv) Copy of minutes of the Board of Directors of the shareholders for investment in assessee company; v) Copy of confirmation of investment by way of share capital and loan separately alongwith source of such investment of each of the shareholders; vi) Copy of ledger account of share capital and loans of each of the shareholders in the books of assessee company; vii) Copy of bank statement of the shareholder; viii) Copy of the acknowledgement of return of income along with audited balance sheet for assessment years 2009-10 of the share holder; ix) Copy of income tax jurisdiction alongwith PAN of the shareholders; x) Copy of company master data of each of the shareholders; xi) Copy of list of signatory of the shareholders; xii) Copy of intimation u/s 143(1) of each of the shareholders. xiii) Copy of certification of incorporation alongwith memorandum of association and article of association of the each of the shareholders; xiv) Copy of board resolution of assessee....
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....ed herewith (Pages 262-265 of this reply) 2.4 Having regard to the above, it ought to be held that the shareholders companies are not paper companies having no business of their own except providing accommodation entries. There is no material to support the aforesaid and therefore the submission is that allegation in the notices is legally and factually misconceived". 7. However, the Assessing Officer was not satisfied with the explanation given by the assessee. From the various details furnished by the assessee in the case of the aforementioned six companies, the Assessing Officer observed that the investors/shareholders which are private limited companies are not actively engaged in any business. From the documents furnished by the above mentioned investors u/s 133(6) of the IT Act, he noted that these companies have share capital and share premium running in crores of rupees whereas they have declared meager income. Further, some of the directors of these companies are the employees of KLJ Group of companies. He noted that during the search action u/s 132 of the IT Act conducted on 18th June, 2013, the statements of various directors were recorded wherein the directors have ....
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....e. The Assessing Officer similarly recorded the statements of Shri Sanjay Kumar Singhi, Sandeep Kumar Singhi and Shri Jivendra Mishra who had given similar replies as by Shri Rajesh Kumar Surana. Rejecting the various explanations given by the assessee and observing that the assessee failed to substantiate the credit worthiness and genuineness of the six companies who have made investment in the shares of the assessee company, the Assessing Officer, invoking the provisions of section 68 of the IT Act, made addition of Rs. 20.85 crores to the total income of the assessee. The Assessing Officer further made addition of Rs. 10,42,500/- u/s 69C of the IT Act being the commission expenses incurred for obtaining accommodation entries which is 0.5% of the accommodation entry of Rs. 20.85 crores. Thus, the Assessing Officer accordingly determined the total income of the assessee at Rs. 23,65,85,862/- as against the returned income of Rs. 2,70,43,362/-. 9. Before the CIT(A), it was argued that during the course of search action u/s 132 of the IT Act, no incriminating document/material was found at the time of search or subsequently. At the time of initiation of search action u/s 132 of the....
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....additions have been made u/s 153A, without seizing any incriminating document/material during the search and seizure action u/s 132 on 18.6.2013: (a) Unexplained cash credit on account of share application/premium u/s 68 of the Act :Rs. 20,85,00,000/- (b) Unexplained expenses u/s 69C of the Act :Rs. 10,42,500/- Therefore, it is submitted by the appellant that in absence of any incriminating document/material, no addition can be made u/s 153 A of the Act, when the assessment is not abated at the time of initiation of the search action u/s 132 of the Act. Therefore, in these facts and circumstances, I agree with the arguments of the appellant. (ii) As, I have already held (supra), while deciding in ground no. 2, that no addition can be made in the assessment order u/s 153A of the Act, since no incriminating document/material was found during search action u/s 132 and also assessment was not abated, in view of the ratio laid down in the decision of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Kabul Chawla 2015, 61 Taxmann.com 412(Delhi). In view of the above, it is not required now to adjudicate the above ground no. 3, 4 and 5 and hence these are....
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....ted 8th March, 2019, he submitted that the Tribunal, following the decision of the Hon'ble Supreme Court in the case of Pr. CIT, Central-1 vs. NRA Iron & Steel reported in 103 taxman.com 48, has allowed the appeal filed by the Revenue and upheld the addition made by the Assessing Officer u/s 68 of the Act on account of share capital and share premium. Referring to the decision of the Hon'ble Delhi High Court in the case of PCIT vs. NDR Promoters, 102 taxman.com 182, he submitted that the Hon'ble Delhi High Court has upheld the addition made by the Assessing Officer u/s 68 of the IT Act in respect of the amount received as share capital from several companies on the ground that all these companies were maintained by one person who was engaged in providing accommodation entries through paper companies and all such companies were located at the same address. So far as the decision relied on by the ld.CIT(A) in the case of Kabul Chawla (supra) is concerned, the ld. DR submitted that the decision of the Hon'ble Delhi High Court has not been accepted by the Department and SLP against the same has been filed in the Hon'ble Supreme Court which is pending. Further, the ....
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....gly submitted that the appeal filed by the Revenue be dismissed. 14. We have considered the rival arguments made by both the sides and perused the orders of the authorities below. We find the assessee in the instant case filed the original return of income on 25th September, 2009 for the impugned assessment year. The return was duly accepted and intimation u/s 143(1) of the Act was issued. No assessment or reassessment was completed u/s 143(3) or 148 of the IT Act and no notice u/s 143(2) of the Act was issued thereafter or any other proceedings have been commenced to disturb the said return of income. Therefore, it has attained finality prior to the date of search on 18th June, 2013. It is an admitted fact that in the search action u/s 132 of the Act, no incriminating document/material was found and seized at the time of search and also subsequently. Since at the time of initiation of search action u/s 132 of the Act the assessment or reassessment was not abated and the additions made in the assessment order passed u/s 153A of the Act dated 29th March, 2016 are not based on any incriminating document/material seized, therefore, in view of the decision of the Hon'ble Delhi Hi....