2021 (3) TMI 820

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....he assessee on 31.07.2008. In response to notice u/s 153A of the IT Act, 1961 dated 4th February, 2010, the assessee, vide letter dated 15th September, 2010, requested the AO to supply copy of seized material relating to the assessee company. Subsequently, the assessee filed the return in response to notice u/s 153A declaring nil income on 11th October, 2010. It was also submitted that the income declared in the return filed u/s 153A is the same as was filed in the return u/s 139(1) of the Act. 3. During the course of assessment proceedings, the AO asked the assessee to furnish the complete details of fresh share application money received during the year to the tune of Rs. 2,84,50,000/-. He requested the assessee to prove the genuineness of these transactions within the meaning of section 68 of the IT Act, 1961 by filing confirmations, copies of IT returns, PAN, bank account, etc. Although the assessee filed certain details, however, according to the AO, the assessee failed to prove the genuineness of the transactions u/s 68 of the Act. From the details furnished by the assessee, the AO noted that the assessee has received share application money to the tune of Rs. 2,84,5....

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....rned CIT (Appeals), erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, modification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal." ITA No.1338/Del/2014 (A.Y. 2003-04) "1. That the impugned order is bad in law, in nature as assessment has not been framed on the seized pursuant to an action taken under section 132 of the Act but the reassessment and change of opinion has been made as such the order passed is illegal and therefore is liable to be quashed. 2. The learned CIT (Appeals), erred in law and facts by confirmed the additionof Rs. 50,00,000/- as unexplained cash credit u/s 68 of IT Act, 1961. 3. The learned CIT (Appeals), erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, modification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal." 7. The assessee has also raised the following identical additional ground for both the years:- "1. Without prejudice to the other grounds of appeal, the ld.CIT(A) has erred on facts and in....

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.... while confirming the additions. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla, 61 taxmann.com 412 for the proposition that additions in the unabated assessments can be made only on the basis of incriminating documents found or seized during the course of search, he submitted that the addition so made by the AO and sustained by the CIT(A) in absence of any incriminating material found as a result of search deserves to be deleted. He further submitted that although in the instant case the assessments were not completed u/s 143(3), but, were completed u/s 143(1), however, such processing u/s 143(1) is considered equivalent to 143(3) assessment for the purpose of determining whether the assessment is abated or unabated. For the above proposition, he relied on the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Marichika Properties (P) Ltd., vide ITA 633/2016 & CM No.30477/2016 and ITA 634/2016 & CM No.30478/2016, order dated 19th October, 2016. 12. The ld. Counsel for the assessee submitted that the AO, in para 5 of the order has primarily made addition u/s 68 of the Act after referring to the enquiries conducted by t....

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....ot substantiate with evidence to his satisfaction regarding the identity and credit worthiness of the investor companies who have invested in the share capital of the assessee and the genuineness of the transaction. We find, the ld.CIT(A) upheld the action of the AO. It is the submission of the ld. Counsel for the assessee that since the addition made by the AO and sustained by the CIT(A) for both the years are not based on any incriminating material found during the course of search, and is based on post-search enquiries, therefore, such addition deserves to be deleted. 15. We find some force in the above argument of the ld. Counsel for the assessee. A perusal of the assessment order as well as the order of the CIT(A) for both the years clearly shows that the addition is not based on any incriminating material found as a result of search, but, the same is based on post search enquiries made by the AO. Further, it is also pertinent to mention that the AO while making the addition has relied on the enquiries conducted for examining investments made in the case of M/s Vikas Telecom Ltd and in M/s DD Resorts Pvt. Ltd. since the companies who have made investment in the assessee ....