TaxTMI 
TaxTMI 
2023 (12) TMI 1253
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....e been raised by the Revenue in this appeal: "1. That the order of the Ld. CIT (A) is not correct in law and on facts. 2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of unexplained share capital amounting to Rs. 3,20,00,000/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in ignoring the findings of inquiry conducted during search and assessment proceedings, wherein it was established that the investor companies were mere paper companies. 4. On the facts and circumstances of the case, the CIT(A) has erred in holding that the seized document which shows expenses related to share-capital is not relevant for this year." 3. In ITA No. 4280/Del/2017, following grounds have been raised by the Revenue in this appeal: "1. That the order of the Ld. CIT (A) is not correct in law and on facts. 2. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition of unexplained share capital amounting to Rs. 21,10,75,120/-. 3. On the facts and circumstances of the case, the CIT(A) has erred in ignoring the findings of inquiry conducted dur....
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....eafter, the proceedings u/s 153C were initiated by the A.O. Accordingly, the A.O. issued notice u/s 153C on 05.11.2015, which were served on 09.12.2015. Thereafter, the proceedings u/s 153C were dropped by the A.O. Thereafter, the proceedings u/s 153A were once again initiated by the Assessing Officer by issuing notice u/s 153A on 04.01.2016. Addition u/s 68: 7. The Assessing Officer made addition u/s 68 on account of share capital received of Rs. 10 Cr. Before the ld. CIT(A), the assessee submitted that the A.O. had made addition of the entire amounts received from outside parties towards share capital u/s 68, while not entertaining the assessee"s claims that (i) no incriminating document relating to the share capital received by the assessee, was seized during the course of search & seizure operation; (ii) Sh. Anand Sharma of Kolkata was not the director in any of the companies, who had subscribed the share capital of the assessee and (iii) its case is squarely covered by the recent decision of the jurisdictional high court i.e. Hon'ble Delhi High Court in the case of Sh. Kabul Chawla. 8. The ld. CIT(A) has observed as under: 1. That a survey operation u/s 133A ....
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....the appellant for A.Y. 2012-13 are not in accordance with law and thus are liable to be quashed. Even otherwise, the AO made addition of Rs. 10,00,00,000/- u/s 68 on account of share capital, without having any incriminating seized document. Even if the document, which was seized during the search and seizure operation carried out at 108-109 Vardhman City-2 Plaza, Asaf Ali Road, Delhi, where NCML Industries Limited was maintaining its business premises, is taken into consideration, then also addition of Rs. 10,00,00,000/- made by the AO u/s 68 in the hands of appellant cannot be sustained because on top of the said sheet, "From 01/01/2012" is written. The AO himself mentioned that the share capital of Rs. 10,00,00,000/- was received by the appellant in November 2011, means prior to 01.01.2012. The assessment proceedings for A.Y. 2012-13 were not pending on 30.09.2013 and thus were not abated. Respectfully following the order of the Delhi High Court, which is the Jurisdictional High Court, in the case of Kabul Chawla (supra), I do not find any justification to uphold the addition of Rs. 10,00,00,000/-. I have also noticed that under identical circumstances, my predecessor h....
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....ch which were not produced or not already disclosed or made known in the course of original assessment" 15. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Meeta Gutgutia (2017) 395 ITR 526 in paras 69 to 72 has held as under: "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for t....