TaxTMI 
TaxTMI 
2020 (12) TMI 717
X X X X Extracts X X X X
X X X X Extracts X X X X
....19 in ITA.No.6182/Del./2018, 6171/Del./2018, 6173/Del./2018, 6174/Del./2018, 6187/Del./2018, 6175/Del./2018, 6178/Del./2018, 6179/Del./2018, 6930/Del./2018, 5854/Del./2018, 6181/Del./2018, 6183/Del./2018, 6185/Del./2018, 6186/Del./2018 (Assessment Year 2011-2012, 2010-2011) The ACIT, Central New Delhi. Versus M/s. Madhusudan Packaging LLP [Erstwhile M/s. Madhusudan Packaging (P) Ltd.,], Ms. Rajgopal Agarwal, M/s. Murli Infratech LLP [Erstwhile M/s. Murli Infratech Pvt. Ltd.,], M/s. RGS Printers LLP [Erstwhile M/s. RGS Printers Pvt. Ltd.,], M/s. MRS Projects LLP [Erstwhile M/s. MRS Projects (P) Ltd.,], M/s. Murli Agritech LLP [Erstwhile M/s. Murli Agritech Pvt. Ltd.,], Ms. Kavita Agarwal, M/s. KMS Associates LLP, [Erstwhile M/s. KMS Associates (P) Ltd.,], Shri Gopal Agarwal (Vice-Versa) And The ACIT, Central New Delhi Versus Ms. Suman Agarwal, Ms. Sabhyata Agarwal, Ms. Mamta Agarwal, Shiv Kumar Agarwal ORDER PER BENCH : We have heard the Learned Representative of both the parties through video conferencing and perused the material available on record. 2. Learned Representatives of both the parties have mainly argued in the case of M/s. Madhusudan Packaging LLP in ITA.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....escript companies based in Kolkata and Delhi and the said shares were subsequently repurchased by family members of Directors/Promoters or group companies from those Kolkata based non-descript companies at very nominal rate. In this regard, A.O. referred a document found during the course of search from Jalalabad Road, Shahjahanpur which has been reproduced by him in the assessment order and the said seized documents mentions about the details of companies/entities who have transferred their shares to other companies/entities of the group. The A.O. further observed that the shares originally purchased by the Kolkata based non-descriptive company at higher premium ranging from Rs. 50/- to Rs. 200/- per share were subsequently sold to the group companies/entities at much less price than the value of money paid by them at the time of issue of shares. The difference between the value of shares repurchased by group entities and as originally allotted to Kolkata based companies, has been treated by A.O. as income of the assessee for the year under consideration. The details of such purchase/sale of shares and conclusion drawn by A.O. have been mentioned in the assessment order. The A.O. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s also covered u/s 132(1) of the I.T. Act. Accordingly, the notices u/s 153A of the Act were issued by AO and, in reply, appellant filed returns of income. It is also clear from the assessment order that the addition has been made on account of unexplained investment u/s 69B of I. T. Act. The basis of addition has been made the documents seized during the search proceedings, which have been reproduced in the assessment order and treated by AO as incriminating material. However, the perusal of the said documents reveal that it is nothing but the list of transfer of shares for the period from 01.04.2010 to 31.03.2011 in respect of different companies of the group wherein, in four columns, the date of transfer of shares, name of transferor company, number of shares and in the last column, the name of transferee company has been mentioned. There is nothing incriminating in these details which could indicate that there was any evasion of tax on the part of any of these companies/entities. These details are merely plain details which do not lead to any adverse findings in the case of appellant. The' basis of addition made by AO is also not the details mentioned in these papers rather....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) of the Act was undertaken by the Department in the case of appellant as on 08.07.2015 and on that date, assessment of A.Y. 2011-12 was completed assessment as the time period to issue notices u/s 143(2) for aforesaid year had already expired. Further, as mentioned above, no incriminating material was found in the case of the appellant during the search proceedings for making assessment in this year. Therefore, on both the counts no addition could have been made by AO by disturbing the income disclosed in the return filed by appellant. In such situation, the addition made by AO, as mentioned above, for A.Y. 2011- 12, is not sustainable and deserves to be deleted. I, therefore, delete the addition made by him and allow the grounds taken by the appellant. 7. All other grounds taken by appellant on merit remain academic only, therefore, need do not adjudication. 8. In the result, appeal is allowed." 7. The Ld. D.R. relied upon the Order of the A.O. and submitted that the word 'incriminating material' is not mentioned in Section 153A of the I.T. Act, in which, assessment have been framed. He has submitted that list of transfer of shares found during the course of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n. Since no list was seized from the premises of assessee, therefore, it could not be considered as any evidence against the assessee muchless no incriminating material found during the course of search. He has submitted that in the Group Cases of ACIT vs., Madho Gopal Agarwal and ACIT vs., M/s. Kapis Impex LLP, the Departmental Appeals have been dismissed by the Tribunal vide Orders Dated 13.01.2020 and 30.06.2020. The Orders of the Tribunal are reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH "E" NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & AMIT SHUKLA, JUDICIAL MEMBER I.T.A. No.6184/DEL/2018 Assessment Year 2010-11 ACIT, Central Circle-19, New Delhi. v. Madho Gopal Agarwal, 58, Madhuban, Preet Vihar, New Delhi. TAN/PAN: ACXPA 3780E (Appellant) (Respondent) Appellant by: Ms. Pramila M. Biswas, CIT-D.R Respondent by: S/Shri Gautam Jain & Piyush K. Kamal, Adv. Date of hearing: 02/01/2020 Date of pronouncement: 13/01/2020 O R D E R PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the Revenue against the impugned order d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2009 Canton Iron & Steel Pvt. Ltd. 1,00,000 50,00,000 98,000 06.10.2009 16.03.2009 Blue Print Securities 1,00,000 50,00,000 98,000 08.10.2009 16.03.2009 Bahar Paper Pvt. Ltd. 1,00,000 50,00,000 1,02,000 06.10.2009 30.04.2008 Cosmos Real Estates Pvt. 1,00,000 50,00,000 398000 4,00,000 2,00,00,000 3. After detailed discussion, he held that the assessee has acquired shares from Kolkata based company who has acquired shares from KR Pulp & Paper Pvt. Ltd. and its group companies at a very high premium of value at Rs. 50/- and this entire arrangement was made to transfer/raised capital from M/s. KR Pulp & Paper Pvt. Ltd., group company of KR Pulp & Papers adopting route of share premium from Kolkata based companies and accordingly amount of Rs. 1,96,02,000/- was made. The relevant observation and the finding of the Assessing Officer read as under: "As it is clear from the above chart that 400000 shares were acquired by the companies like M/s Bahar Paper Pvt. Ltd....
X X X X Extracts X X X X
X X X X Extracts X X X X
....completed, no addition can be made in view of the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Kabul Chawla (supra) and PCIT vs. Meeta Gutgutia, (2017) 325 ITR 526. The relevant conclusion of the Ld. CIT (A) reads as under : "6.2 Now the facts of the appellant are to be examined in the light of this legal position. It is clear from the assessment order as well as submissions of the appellant that search and seizure action u/s.132(1) of the Act was undertaken by the Department in the case of appellant as on 08.07.2015 and on that date, assessment of A.Y. 2010-11 was completed assessment as the time period to issue notices u/s.143(2) for aforesaid year had already expired. Further, as mentioned above, no incriminating material was found in the case of the appellant during the search proceedings for making assessment, in this year. Therefore on both the counts, no addition could have been made by AO by disturbing the income disclosed in the return filed by appellant. In such situation, the addition made by AO, as mentioned above, for A.Y. 2010-11, is not sustainable and deserves to be deleted. I, therefore, delete the addition made by him and allow the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sment for the Assessment Year 2010-11 had attained finality and was not a pending assessment. Once in terms of 2nd proviso to Section 153A, if assessment has attained finality and is unabated, then any addition over and above the earlier assessed income can be made only on the basis of incriminating material found during the course of search. Here, in this case, admittedly no such incriminating material has been found qua the assessment year in question, therefore, the finding of the ld. CIT (A) is affirmed as the same is conformity with theprinciple laid down by the Hon'ble Jurisdictional High Court in the case of Kabul Chawla (supra) and Meeta Gutgutia (supra). 8. In the result, the appeal of the Revenue is dismissed". "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "D" : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA.No.6180/Del./2018 Assessment Year 2011-2012 The ACIT, Central Circle-19, Room No.104, ARA Centre, E-2, Jhandewalan Extn., New Delhi. vs. M/s. Kapis Impex LLP (Erstwhile M/s. Kapis Impex (P) Ltd.,), 301, Roots Tower, Community Centre, District Centre, Laxmi Nagar, Delhi - 110 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The assessee company is one of the company of M/s. K.R. Pulp and papers Ltd., which is managed and controlled by Shri Madho Gopal Agarwal and Shri Raj Gopal Agarwal and Shri Sri Gopal Agarwal. Statement of Shri Gopal Agarwal was recorded on 08.07.2015. During post-search enquiry, statement of Shri Madho Gopal Agarwal was also recorded. During the year assessee acquired many shares. The A.O. issued show cause notice as to why the addition of Rs. 1,57,09,500/- should be made on account of unexplained investment under section 69B of the I.T. Act, 1961. The assessee explained before the A.O. that notice is vague, non-specific and in violation of principles of natural justice and relied upon Judgments of Hon'ble Delhi High Court in the cases of Kabul Chawla 380 ITR 573 (Del.) and in the case of Pr. Commissioner of Income Tax vs., Meeta Gutgutia 395 ITR 526 (Del.). The A.O. stated that these decisions cannot be accepted because the Departmental SLP is pending before the Hon'ble Supreme Court. The A.O. considering the material on record did not accept the explanation of assessee and made addition of Rs. 1,52,09,500/- on account of unexplained investment under section 69B of the I.T. Act, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) for deleting the addition. The Hon'ble Delhi High Court in the case of Kabul Chawla (supra) held as under : "Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment" 7.1. The Hon'ble Delhi High Court in the case of Meeta Gutgutia (supra) has held as under : "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Counsel for the Assessee submitted that in case Departmental Appeal is dismissed, the cross objection and appeal of the Assessee would become infructuous. 8.3. In the case of assessee Shri Gopal Agarwal in ITA.No.5854/Del./2018 though the assessee has raised one more ground challenging the addition of Rs. 65 lakhs, but, no arguments have been made during the course of hearing of the appeal and even there is no reference to the same in the consolidated written synopsis filed for all the Assessees. 9. We have considered the rival submissions and perused the material on record. The Hon'ble Jurisdictional Delhi High Court in the case of CIT vs., Kabul Chawla (supra) held as under : "Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment" 9.1. The Hon'ble Jurisdictional Delhi High Court in the case of Pr. CIT vs., Meeta Gutgutia (supra) h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... list could not be considered as incriminating material in nature. The seized paper merely reflect the date, name of transferor and transferee and number of shares. The document does not speak of any unexplained investment made by any of the assessees. No material was found during the course of search so as to indicate any unaccounted investment made by assessee. In Group Cases of Madho Gopal Agarwal and M/s. Kapis Implex LLP (supra), the Tribunal has considered the identical seized paper and held that "since it is not incriminating material in nature, therefore, no addition could be made against the assessee and Departmental Appeals have been dismissed." Same grounds of appeal have been raised in the present Departmental Appeal as have been considered in the above cases. No evidence of any unaccounted investment have been found during the course of search. The A.O. made addition merely on presumption. Thus, it is clear that when no assessment was pending in the case of assessee for the assessment year under appeal on the date of search and no incriminating material was found during the course of search so as to make the impugned addition, therefore, the issue is covered in favour ....