TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 270
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of Rs. 14,57,50,000/- made on account of bogus share capital, without properly appreciating the facts and circumstances of the case, 4. That the ld. CIT(A) erred in law and on facts in deleting the addition of Rs. 8,74,500/- made on account of unaccounted commission paid, without properly appreciating the facts and circumstances of the case. 3. (a) The order of the Ld CITA(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter on amend any/all of grounds of appeal before or during the course of the hearing of the appeal." 2. Briefly stated facts are that, in this case, search and seizure action u/s 132 of the Act was carried out on 20.01.2014 in the case of M/s apsa Logistics Pvt. Ltd., M/s Mapsa Infra Pvt. Ltd. and in case of Late Shri Pyare Lal Gupta, Mrs. Veena Gupta at D-28, Model Town-2, Delhi. During the course of search operation at the above said premises, certain documents/hard disk were found and seized. 2.1 Despite the fact that in the case of the assessee, no search was conducted u/s 132 of the Act, a notice u/s 153A of the Act dated 28.08.2015 was served on the assessee. The aforesaid notice issued u/s 153A of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee. Hence, no addition could have been made by the AO on the basis of such documents in the assessment, as has been held by the judgment of jurisdictional Delhi High Court in the case of CIT vs. Kabul Chawla reported in 234 Taxman 300. 2.3 Also, the assessee challenged the addition of Rs. 15,57,84,160 on merits on account of Bogus share capital and Unaccounted commission made by the AO on the following grounds: i. All the shareholders had duly confirmed the factum of the investment made in the assessee company as such addition made of the share capital received by the appellant from corporate entities. ii. All the shareholders were corporate entities, duly assessed to tax and, had subscribed to share-capital by account payee cheques and supported by necessary evidence including their permanent account numbers, confirmations, addresses, etc. iii. All shareholders were not only identifiable companies but also had requisite credit worthiness. Notices sent by the AO to all these shareholders u/s 133(6) of the Act were duly served, which proved the existence of these shareholders. iv. The AO did not discharge onus cast upon him under law by bringing any evidence or material to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s 153C of the Act. The relevant extracts from the order dated 10.03.2017 of the Ld. CIT(A) are reproduced below: "4.3 I have carefully considered the fact of the case, finding of the assessing officer and the submission of the Ld. AR. In this case no action under section 132 of the Act was carried out, hence proceeding under section 153A was rightly dropped by the AO. However, from the perusal of the satisfaction note it is apparent that there is no description or reference of any incriminating documents related to the assessee found or seized during the course of the search from the premises of the group concerns. Further even after making the specific query the AO has failed to identify any incriminating document related or belonging to the assessee which was forwarded by the AO of the searched person. Further from the perusal of documents above it is apparent that all the transactions as specified above have duly been recorded in the books of accounts of the appellant company. Moreover perusal of the order of assessment would show that no adverse inference has been drawn on the basis of any of the seized documents. The only addition made by the AO is on account of alleged un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n on the legal issue in favour of the assessee, the other grounds on merit of the addition demand no specific adjudication. Thus, the legal ground raised by the assessee is allowed and rest of the grounds are dismissed as academic. In result the appeal is allowed for statistical purpose. 6. Before us, the Ld. DR relied upon the order of the AO and submitted that view of the CIT(A) have not been accepted by the Department. 7. On the other hand, Ld. Counsel for assessee, Shri CS Aggarwal, Senior Advocate reiterated the submissions made before the authorities below. Additionally he also relied on the judgment of the jurisdictional High Court in the case of Principal Commissioner of Income Tax, (Central) - 2 vs. Index Securities Pvt. Ltd. reported in [2017] 86 taxmann.com 84. In the aforesaid case, the Hon'ble High Court relying on the judgment of the Apex Court in the case of CIT v. Sinhgad Technical Education Society reported in [2017] 397 ITR 344 has held that to justify the assumption of jurisdiction under Section 153C of the Act the documents seized must be incriminating and must relate to each of the AYs whose assessments are sought to be reopened. The relevant para of the afo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eedings before the Ld. CIT(A). During the hearing on 22.11.2021, the Ld DR sought to place reliance on the following 2 documents enclosed in the Revenue's paper book: i. Statement of Sh. Arun Kumar Khemka u/s 132(4) dated 20.01.2014 (pg 23-28) Reference was made by Ld. DR to the following questions on pages 25 & 26 of the Revenue's paper book: "Q.10. How are you linked to Sharp Group of companies as well as Mapsa Group of companies? A.10. I am not aware of any Sharp Group of companies. However, Mapsa Group of companies controlled by Shri Mahesh Gupta is my client. I have provided bogus unsecured loan and bogus share capital/ premium entry through paper companies controlled by me to Mapsa Group in lieu of a certain percentage of commission. In case of bogus unsecured loan commission income is derived out of the TDS deducted as well as the interest earned on the TDS. The client used to give me cash in lieu f which I would provide bogus unsecured loan vide cheques issued through bank accounts of paper companies controlled by me. In the case of bogus share capital& share premium entry the client would give me cash in return of which I would give them cheques. Q.11. You are....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submissions that no incriminating material whatsoever was found against the assessee during the course of search of third person, following points are worth noting: a) Under the statutory provision contained u/s 153C of the Act, satisfaction has to be recorded vis a vis any money, bullion, jewellery or other valuable article or thing; or any books of account or documents, seized or requisitioned. b) Statements of Sh. Arun Kumar Khemka or Sh. Mahesh Gupta relied upon by the Ld. DR refer to investment in "Mapsa Group of companies" rather than the assessee company. There is nothing either under the Companies Act or under any other law which recognizes "Mapsa Group of companies" or establishes any relationship of the assessee company therewith. c) Sh. Arun Kumar Khemka has later retracted his aforesaid statement dated 20.01.2014 and cannot be relied upon. d) No investment was ever made by Mr S.K. Jain or Mr Arun Kumar Khemka in the form of share capital/ premium of the assessee company. The only sum of money received by the assessee company from Mr Arun Kumar Khemka/ any of his companies was in the form of unsecured loan, which was duly returned by the assessee company through ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh Court in the case of Kabul Chawla and Index Securities Pvt. Ltd(supra) and Apex Court in the case of CIT v. Sinhgad Technical Education Society (supra), we are inclined to agree with the view of the Ld. CIT(A)that since the assessment based on the original return of income filed under sec. 139 of the Act was not pending as on the date of search as such, the additions made by the Assessing Officer in the absence of any incriminating material found during the course of search belonging to the assessee for the assessment year under consideration is legally unsustainable. 15. No infirmity has been pointed out in the order of Ld. CIT(A) nor any incriminating material has been placed on record by the Ld DR, except the statements of Sh. Arun Kumar Khemka and Mr Mahesh Gupta. As stated above, these statements were already on record before the AO and no adverse inference can be drawn from these statements for various reasons already mentioned in para 12 of this order. The Revenue has not been able to rebut the findings recorded by the ld CIT(A). Hence, we uphold the order of the Ld. CIT(A) on various legal issues raised by the assessee. The Revenue has not even challenged the finding of....