TaxTMI 
TaxTMI 
2021 (10) TMI 903
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....0/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in section 153C/153A would only mean income unearthed during search when the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing D....
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....5,362/- u/s.68 and has also added alleged brokerage on such share capital of Rs. 3,01,250/-/- which was taken the brokerage @ 0.5% on alleged bogus share application. One of the main argument before the ld. CIT (A) was that entire addition made by the Assessing Officer is not based on any incriminating material, and therefore, no addition could have been made in the impugned assessment year as the assessment for the Assessment Year 2011-12 had attained finality and it was not an abated assessment in terms of 2nd proviso to Section 153A. Apart from that, it was also submitted that in the case of all the three share applicants, the proceedings u/s.153C was carried out, wherein similar addition has been made in their hands and same issue has been considered in their hands and nothing adverse material or adverse finding relating to assessee company has been found and therefore, in the hands of the assessee company such an addition is unwarranted. 6. Ld. CIT(A) after considering the entire gamut of facts and material on record and the submission made by the Assessing Officer as well as the finding of the Assessing Officer held that addition made in the assessment order are not based ....
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....akash Industries Ltd.. Therefore, the A.O. was of the view that the amount of Rs. 6,56,85,362/- invested in shares of M/s Prakash Industries Ltd. through funds raised from sale of investment, was not genuine and treated the entire amount of Rs. 6,56,85,362/- as unexplained credit in the hands of the assessee. (v) In the assessment proceedings, the A.O. stated that in the statement recorded 132(4) of the Act, on 31.10.2012, of Shri Ved Prakash Agarwal, Chairman of M/s Prakash Industries Limited, he had admitted that unaccounted funds of M/s Prakash Industries Ltd., have been invested in its group companies in the form of share capital / premium, through paper companies in the different financial years, as under:- S. No. Name of the recipient F.Y. Amount (in crore) 1. M/s. Amarjyoti Vanijya Pvt. Ltd. 2007-08 4.98 2. M/s. Sanskriti Tie up Pvt. Ltd. 2010-11 24.68 3. M/s. Sarvottam Commodities Pvt. Ltd. 2010-11 26.00 4. M/s. Rajnil Sales Pvt. Ltd. 2007-08 8.32 5. M/s. Ankit Nivesh Management Pvt. Ltd. 2007-08 9.74 6. M/s. Lokpriya Trading Pvt. Ltd. 2007-08 8025 Total 81....
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....Rotary club of Rendezvous Trust 11 A-25 1 to 180 M/s Hi-tech Mercantile Pvt. Ltd M/s Vanshi Farms Pvt. Ltd Besides the above, in the satisfaction note dated 19.9.2014, the A.O. has mentioned about relevant seized papers inventorised as A- 2, A-3, A-8, A-13, A-14, A-28 and A-22, which contains, the trial balance, resolution, auditor reports, income tax returns, cheque books and certified copy of resolutions pertaining to the assessee. (vii) In the assessment order, the A.O. stated that from material found during search action u/s 132 of the Act, which contain signed blank cheque book of various companies, at corporate office of M/s Prakash Industries Ltd., Srivan, Bijwasan, that the assessee company is completely controlled by Shri Ved Prakash Agarwal, Chairman of M/s Prakash Industries Ltd. (viii) In the assessment proceedings, the Assessing Officer has stated that the share applicant, was not having any worth for investing in share capital of the assessee, therefore, creditworthiness and genuineness of transactions remained unexplained. Therefore, the Assessing Officer was of the view that the amount of Rs. 6,....
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....of the appellant which is from loan taken from M/s ACG Associated Capsules Pvt. Ltd. is accepted as genuine. However, A.O. took adverse view on the basis of post search enquiries in the case of Prakash group, bank enquiries, all the companies show meager profits, all companies are situated at table place not having any infrastructures, appellant failed to produce the person conducting the operations of these companies and also the statements recorded of various persons, relating to share capital. In this regard, the AR has submitted that the A.O. failed to bring on record any evidence, contrary to the transactions of share application money received and sale of investments, which will show that amount credited in the books for making investment in shares of M/s Prakash Industries Ltd, are unexplained. It has also been submitted by the AR that the statement recorded of various persons, were bald / irrelevant and vague in nature as Shri Ved Prakash Agarwal himself stated wrong fact that capital introduced in the assessment proceedings in the FY 2007-08 while no share capital / premium received by M/s Ankit Nivesh & Management Pvt. Ltd. The alleged entry operator himself nowh....
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....Act, no proceedings was pending at the time of initiation of action u/s 132 of the Act. It is further submitted that the appellant was already assessed u/s 143(1) of the Act and therefore, assessment was not abated. Consequent to the search action u/s 132 of the Act, such assessment has to be made on the basis of incriminating material found during the course of search. If no incriminating material has been found and the A.O. had already taken a view on such particulars of income, during regular assessment proceedings, then it is not open to the A.O. to make any addition in the assessment order u/s 153C/153A of the Act, in absence of any incriminating material found in the search action u/s 132 of the Act. (xvii) In the appellate proceedings, AR has further submitted that the signed Blank cheque books of the promoter group companies, including one of the investor company M/s Ankit Nivesh & Management Private Limited, as annexure A-22, were lying for the purpose of payments of statutory dues, fees, taxes, etc. Therefore, it is submitted that these signed blank cheque books, have no bearing / determination on transactions of alleged amount received as share capital / premium....
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....t of:- Unexplained cash credit u/s 68 of the Act on account of share application money/premium Rs. 6,56,85,362/- Unexplained expenditure on account of brokerage @0.5% : Rs. 3,01,250/- Total : Rs. 6,59,86,612/- Therefore, it is submitted by the appellant that in absence of any incriminating document, no addition can be made u/s 153 A of the Act, when the assessment is not abated. (ii) In the appellate proceedings, for the above grounds, besides giving various arguments and submissions, the appellant has also relied upon 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(Del), since no incriminating document was found during search action u/s 132 and also assessment was not abated. (iii) In the appellate proceedings, it is further submitted by the AR that the statements recorded during search action u/s 132 of the Act, cannot be considered as a document found & seized. For this argument, the AR also relied upon the ratio laid down in the decision of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Raj Pal Bhatia [201....
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.... be held to be incriminating material for the purpose of assessment within the scope of Section 153A and Section 153C has held by the Ld. CIT (A) following the decision of Hon'ble Jurisdictional High Court. 8. It has been well settled by the Hon'ble Supreme Court in case of CIT Vs. Sinhgad Technical Education Society (397 ITR 344) (SC) wherein the Hon'ble Apex Court upheld the order of the Tribunal that addition cannot be made for the assessment years for which there are no incriminating documents found during the course of search in the assessments framed u/s 153C. The Hon'ble Court upheld the order of the Tribunal in the following manner:- 16) In these appeals, qua the aforesaid four Assessment Years, the assessment is quashed by the ITAT (which order is upheld by the High Court) on the sole ground that notice under Section 153C of the Act was legally unsustainable. The events recorded above further disclose that the issue pertaining to validity of notice under Section 153C of the Act was raised for the first time before the Tribunal and the Tribunal permitted the assessee to raise this additional ground and while dealing with the same on merits, accepted the contenti....