TaxTMI 
TaxTMI 
2021 (10) TMI 903
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.... 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 Development Company Vs. DCIT dated 09.08.2014 has held that total income includes inco....
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....en 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 on any incriminating document and relying upon the decision of Hon'ble Delhi High Court in the case of CIT vs....
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....gh 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 81.97 (vi) In the assessment order, the A.O. mentioned that in Q. No. 36, asked in respect o blank cheque books of certain companies impounded from the premises of M/s Prakasl Industries Ltd. during t....
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....heque 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. 6,56,86,612/- is treated as unexplained cash credits u/s 68 of the Act and made addition of Rs. 6,56,86,612/-in the hands of the assessee. (ix) In the appellate proceedings, the AR submitted that the appellant has received share application money of Rs. 6,02,25,000/- from M/s Vanshi Farms Pvt. Ltd. and Rs. 25,000/- from M/s Lokpriya Trading Pvt. Ltd. during the F.Y. 2010-11. The appellant also online traded into securities of M/....
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....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 nowhere admits that he has provided accommodation entries to the appellant during any financial years under consideration. Moreover, statements of Shri Ved Prakash Agarwal, chairman of M/s Prakash Industries Ltd. and Shri Shiv Shankar Banka, alleged entry operator have retracted their statement by filing letter before the ADIT(Inv.) on 02.11.2012 and 5.11.2012, therefore, these statement have loses its evidentiary value. (xiv) In the appellate proceedings, the AR has submitted that it is corrobora....
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....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 in the appellant company. It is further submitted by the AR that Statement of Shri Ved Prakash Agarwal, Chairman of the appellant company, cannot be considered "document seized", as contemplated u/s 132 of the Act. In view of the above submission, it is also submitted by the appellant that decision of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Kabul Chawla [2015] 61 Taxmann.com 412(Del), is squarely applicable to the facts of the appellant. From the above, following facts emerged: * The assessm....
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....urt 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 [2011], 333 ITR 315 (Delhi). As, I have already held (supra), while deciding in ground No. 4, that in absence of any incriminating documents found during search action u/s 132 and also assessment was not abated at the time of initiation of action u/s 132 of the Act, on 30.10.2012, no addition can be made, in the assessment order passed u/s 153A of the Act. The facts of the appellant are squarely covered by the ratios laid down in the above 2 decisions of the Hon'ble Jurisdictional High Court of Delhi. In view of these facts and circumstances, in my considered opinion, now it is not required to adjudicate the grounds No.6 and 7 and therefor....
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....6) 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 contention of the assessee. 17) First objection of the learned Solicitor General was that it was improper on the part of the ITAT to allow this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was n....