TaxTMI 
TaxTMI 
2020 (8) TMI 913
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...., has not reached finality". 2. The only issue raised by the revenue is against the order of the Ld. CIT(A) deleting the addition in the hands of the assessee, which was made on the protective basis by ignoring the fact that the issue of substantial addition in the case of Shri Global Tradefin Ltd., has not reached the finality and is pending in the Bombay High Court. 3. The facts in brief are that the assessee filed return of income u/s 139(1) of the Act on 24.09.2009 declaring income at Rs. Nil. A search action u/s 132(1) of the Act was conducted by the investigation wing on Jogia Group of Companies on 04.03.2010. In response to the notice u/s 153A of the Act, the return of income was filed on 26.02.2011 declaring income of Rs. 14,15,00,000/- and the assessment was framed u/s 143(3) r.w.s 153A of the Act on 26.12.2011 determining the total income at Rs. 14,15,00,000/-. Thereafter, the case of the assessee was re-opened u/s 147 r.w.s 148 of the Act after the AO received information from investigation wing of the department thattheassessee has invested Rs. 43,50,00,000/- with M/s Shree Global Tradefin Ltd., as share application money. The said reopening was consequent to a survey....
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....roup have taken share application money from 53 investor companies. During the year under consideration, the assessee has taken share application money from 25 companies which are included in the list of said 53 investor companies as referred to above. The AO noted that the money had been received by 14 companies including the assessee from 53 investor companies and same amount has been transferred by all 14 companies to one company namely M/S Shree Global Tradefin Ltd. Thus, the amounts have been transferred by 14 companies including assessee to M/S Shree Global Tradefin Ltd., and the flow of fundsare clearly evident and discernible. The finding of the AO on this hasbeen given in para 5.6.3. which is extracted below: "5.6.3 It is also pertinent to mention here the flow of funds as explained in the survey report which is as follows: Money from different proprietorship concerns were transferred to some of the 53 investor companies. These 53 investor companies further invested as share application money into the 14 companies of the Jogiagroup including the assessee who further invested into the Shree Global Trade fin Ltd as share application money. On verification of the bank detai....
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....t the funds were having one to one nexus between the amount received and paid by the assessee. The Ld. CIT(A) also reproduced the detailed chart showing movement of funds on page No. 124 to 176 of the appellate order and on the said basis came to the conclusion in para No. 8.9 on page No. 176 of appellate order that the conduit Jogia Group Entities have no financials to elicit any genuine investments, much less investment at huge premium of crores of rupees. He further held that these entities are merely conduit for transferring money to Shree Global Tradefin Ltd., immediately after receiving the same from 25 investing companies. The CIT (A) has also disposed of the appeal in the case of Shree Global Tradefin Ltd. simultaneously, in whose hand the same amount was added by the Assessing Officer on the ground that the ultimate destination of money has not been established as genuine. The CIT (A) gave a finding that the conclusion of the Assessing Officer to the effect that the source of money has not been established is correct. According to the CIT (A), the amount received from 53 companies were not genuine. However, the CIT (A) was of the view that the said amount is to be taxed i....
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....on page 191 which has been reproduced hereinabove. Further, the grounds of appeal filed by the Department clearly state that the addition was on protective basis and the only reason for challenging to the order of ld. CIT(A) on the deletion of the addition by ld. CIT(A) is that the case of Shree Global Tradefin Ltd. has not reached finality. The ld. AR ,in this regard, submitted that once it is held that the assessee has merely received money from 25 companies and passed on to M/S Shree Global Tradefin Ltd., there is no basis for making any addition in the hands of the assessee. The ld. AR stated that in any case, there cannot be double taxation of the same amount in two places. Thus, even by going on the basis of the reasonings of the Assessing Officer, the order of CIT (A) is bound to be upheld. It is further submitted that protective addition is always made whenever there is a doubt about the correct entity or correct assessment year. In a case where there is a doubt as to whom the income belongs to, then addition is made in the hands of two persons, i.e. on substantive basis in the hands of one person and on protective basis in the hands of the other person. The protective addi....
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....2.2012 on M/s. Lloyd Steel Industries and Shree Global Tradefin. Ltd, a statements of Shri Babulal Agarwal, Shri Om Hari Lalan and Shri Mukesh Choksi were recorded. During the search, statements of Shri Mukesh Choksi and Shri Nilesh C. Shah were recorded. Shri Choksi accepted that he arranged accommodation entries in the form of unsecured loans to various entities. In the statement recorded during the survey, Shri Om Hari Lalan admitted that he was whole and sole controller of 14 companies, which received share application money from other entities. He alos stated that is not in contact with the investor entities and cannot produce the directors of the companies and prove creditworthiness and genuineness of the share application money received. He also accepted that no documents or agreements or any paper work was made with any of the entities for the investments made in the 14 companies. He stated that only cheques were received which were deposited in the bank accounts of the 14 companies. After the survey in Shree Global Trade Fin. Ltd. in 2012, Department conducted search in Shri Pravinkumar Jain, a hawala operator. It was found during this search that several of the 54 entitie....
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....ng of the protective addition because it is not a question of Rs.43.50 crores only, but it is a matter of unaccounted money introduced amounting to Rs.541.95 crores, which cannot be allowed to be brought into books without paying due tax. In the interest of revenue and justice, it is requested that the addition made in this case be confirmed by restoring the order of the AO and by setting aside the order of the CIT(A). 9. We have heard the rival contentions and perused the materials placed before us including the written submissions by both the sidesand impugned order passed by ld CIT(A). The undisputed factsare that the assessee is a group company of Jogia Group and invested a sum of Rs. 43.50 Crores in M/S Shree Global Tradefin Ltd. The assessee received the equivalent sum from 25 companies as share application money and passed on the same to M/S Shree Global Tradefin Ltd. immediately as advance which was later on converted into share capital. The AO as well as CIT(A) recorded a findings that 25 companies who invested in the assessee company are included in the list of said 53 investor companies which have advanced money to 14 companies including the assessee and same amount has....
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.... in whose hands protective addition has been made. The protective addition does not survive if the substantive addition has been confirmed or substantive addition has been deleted on merits. In the present case before us the addition was made on protective basis while on substantive basis it was made in the case of M/S Shree Global TradefinLrd. The said substantive addition was deleted by the coordinate bench vide order dated 15.10.2015 passed in ITA No. 7310 to 7313/Mum/2017 dated 15.10.2018 on merits. In our considered opinion the protective addition has to go as the substantive addition was deleted on merits. We do not find nay force in the arguments/written submissions of the ld. DR that where substantive addition is deleted the protective has to restored to the AO as in the case of M/S Shree Global TradefinLtd , assessment has not attained finality. We are therefore inclined to dismiss the appeal of the revenue by upholding the order of CIT(A). 10. The assessee has also filed cross objection challenging the re-opening and assessment order on various grounds. Since we have dismissed the appeal of the revenue on merits, we are, therefore, not adjudicating the grounds raised by ....
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.... the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily (emphasis supplied by us now) be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. 8. Quite clearly, "ordinarily" the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression "ordinarily" has been used in the said rule itself. This rule was inserted as a result of directions of Hon'ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that "We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf.We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benche....
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....es to operate shall be added and time shall stand extended accordingly", and also observed that "arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020". It has been an unprecedented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus "should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure...". The term 'force majeure' has been defined in Black's Law Dictionary, as 'an event or effect that can be neither anticipated nor controlled' When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an "ordinary" period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of or....