AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 108
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....cal issues are involved in all the above captioned appeals of the Revenue as well as the Cross Objections of the assessee, therefore, for the sake of convenience, they are clubbed, heard together and being disposed of by this composite order. 2. As stated above, the issues are common in all the appeals of the Revenue and its Cross Objections of the assessee, we shall take up the appeal of the Revenue in ITA No.490/NAG/2014 for the assessment year 2007-08 and its Cross Objection of the assessee in C.O. No.14/NAG/2015 as the lead case for deciding the disputed issues. ITA No.490/NAG/2014 - A.Y. 2007-08 - By Revenue C.O. No.14/NAG/2015 - A.Y. 2007-08 - By Assessee 3. Brief Facts : Referring to the facts of the case, ld. Counsel for the assessee mentioned that the assessee is engaged in the business of trading of coal and steel etc. The assessee filed the return of income declaring total income of Rs. 27,33,610/- for the year under consideration. A search and seizure action took place at the business premises of Gupta International Industries Ltd. at Nagpur on 29.07.2009. There was also a search and seizure action at the premises of Mr. Durga Prasad Sarda at Nagpur. Mr. Sar....
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....90,00,000/- as undisclosed income, holding that the Share Premium and Share Application money is explained, as the explanation with evidence is duly mentioned in the Assessment Order and the action of the Ld. CIT(A) in rejecting such explanation is unjustified? 3. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in deleting Rs. 90,00,000/- towards unexplained Share application money, without appreciating the fact that the A.O. had elaborately discussed and clearly brought out the nexus between paper companies floated by Shri D.P. Sarda and amounts received by the Gupta Groups, through money laundering, which had been invested in the assessee company, in the form of Share Capital/Share application money? 4. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in deleting the addition towards unexplained share application money, even though the assessee failed to prove the genuineness of the transactions and the credit-worthiness of the investors, during the assessment proceedings? 5. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in d....
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.... the Assessing Officer erred in law and on facts in charging interest u/s.234A and 234B of the Income Tax Act and the learned CIT(A) erred in confirming the action of AO. On the facts and circumstances of the case the interest charged is improper. (7) That for any other cross-objection with kind permission of Hon'ble Members at the time of hearing of cross objection." Before the Tribunal 6. Before us, at the outset, ld. Counsel for the assessee submitted that ground no.1 of the Revenue's appeals is covered by the order of the Tribunal in assessee's own case vide ITA No.392/NAG/2017 for the assessment year 2011-12 dated 24.04.2019. He mentioned that the same decision will apply to the present appeal of the Revenue. Accordingly, the said ground no.1 is required to be dismissed. 7. On hearing both the sides, we are of the opinion that the Assessing Officer should examine the applicability of the said order of the Tribunal in assessee's own case (supra) and then decide the issue after hearing the assessee. We order accordingly. 8. Regarding grounds no.2 to 4 of the Revenue's appeals, ld. DR for the Revenue submitted that this issue needs to be re-adjudicated in the....
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.... R. Subramaniyam Rs. 30,00,000/- Virgo Textiles Pvt. Ltd. Rs. 1,17,50,000/- Ravi Steel Rs. 51,50,000/- Rs. 3,78,25,000/- The genuineness, creditworthiness and identity of the sources of this investment was not proved by the assessee. The assessment order discusses at paras 7.6 to 7.16 the seized documents relying on which these entities are treated as bogus paper companies of the D P Sarda group which the assessee used for routing assessee's unaccounted cash 491/Nag/2014 2009-10 Unsecured Loans Rs. 10,54,24,250/- LTCG on transfer of GIL shares Rs. 4,92,65,265/- Declaration of Rs. 10,00,000/- The assessee's balance sheet reveals unsecured loans of Rs. 10,54,24,250/- From Lambkaran Commercial Pvt. Ltd. Rs. 2,18,02,000/- M. B. Mines Pvt. Ltd. Rs. 3,62,85,500/- Vignesh Mines Pvt. Ltd. Rs. 4,73,18,750/- Which are added to total income as undisclosed income. As discussed in para 7.2 of the assessment order these bogus companies of D P ....
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....s paper company appears in several seized documents as mentioned in paras 7.4, 7.5, 7.6, 7.11 and 7.14 of the assessment order including the seized document at page 42, Item no. 1, Annexure A-2. ( Cheque lena Nagad Dena). These incriminating documents are seized in course of the search action in the assesee's premises. The assessment order clearly mentions this fact at 7.4 of the assessment order. The assessing officer has reproduced the scanned copies of the seized incriminating documents at pages 10 to 15 of the assessment order based on which the conclusion is drawn that the share application money and share premium is unexplained. Ld. CIT (A) has held that "Since no evidence was found as a result of Search adverse to what has been submitted, I have no hesitation in holding that no addition can be made treating share application money and premium as non genuine." (page 20 of the CIT (A) order). Ld. CIT (A)'s decision is contrary to the facts mentioned in the assessment order. The entries in the incriminating documents seized during the search and copied in the assessment order are not discussed by Ld. CIT (A)." 13. Referring to the above appeal of the Revenue....
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....the CIT(A), we find that the said observation of the CIT(A) is very general in nature and not specific on the documents cited by the Assessing Officer in the assessment order. In our considered opinion where there is an existence of contract agreement between the assessee and Mr. Sarda, who is an "accommodation entry provider" and there is a direct nexus between the assessee and Mr. Sarda and also the assessee and Aim Merchants Pvt. Ltd., considering the same, we are of the opinion that the objection raised by the ld. AR for the assessee is not sustainable in law. 16. The legal proposition which comes out from various judicial pronouncements and the decisions of the Higher Forum, it is crystal clear that in case of section 153A of the Act whenever action is taken u/s 132 of the Act, the Assessing Officer is under statutory obligation to issue notice for earlier six years entirely even when there is no incriminating material. Therefore, in case of section 153A of the Act, the legal scenario is that the reopening can be done by the Assessing Officer and the warrant is issued even without having any incriminating material. The Hon'ble Rajasthan High Court in the case of Jai Steel I....
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.... deeper investigation were found to be bogus entities used for accommodation entries. The assessment order in para 7 and its sub-paras clearly spells out the modus operendi used for routing of cash through these bogus entities showing the trail of funds through bank accounts opened specifically for this purpose. One such company mentioned in this seized document is the said Aim Merchants Pvt. Ltd. The details of share premium and application money were called from Gupta group. Most of amount has come through IDBI bank account, Civil Lines, Nagpur in the month of March 2006. From this account, it is seen that an amount of Rs. 1 crore is deposited by way of transfer from IDBI Bank, Brabourne Branch, Mumbai. This amount was given to Aim Merchants Pvt. Ltd. on 06/03/2006. That further an amount of Rs. 4.5 crore as mentioned in the seized document appears in the bank account in the IDBI bank of Aim Merchants Pvt. Ltd. All the deposits in bank account are through transfer entries. On examination of the bank account it is seen that the address of Aim Merchants Pvt. Ltd. is at Kolkata. However, one of the directors is Krishna Bedi whose address is at Nagpur and he is involved in givi....