TaxTMI 
TaxTMI 
2024 (10) TMI 923
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....2013-14 -do- -do- 3. ITA No.3331/Del/2023 -do- 2014-15 -do- -do- 4. ITA No.3332/Del/2023 -do- 2015-16 -do- -do- 5. ITA No.3333/Del/2023 -do- 2016-17 -do- -do- 6. ITA No.3334/Del/2023 -do- 2017-18 -do- -do- 7. ITA No.3335/Del/2023 -do- 2018-19 -do- -do- 8. ITA No.3358/Del/2023 Nakshatra Business Pvt. Ltd. 2018-19 CIT(A)-29, New Delhi order dated 26.09.2023 u/s 250 of the Act Assessment order dated 31.12.2019 under section 143(3) of the Income Tax Act, 1961. 9. ITA No.3359/Del/2023 -do- 2017-18 -do- -do- 10. ITA No.3360/Del/2023 -do- 2016-17 -do- -do- 11. ITA No.3361/Del/2023 -do- 2015-16 -do- -do- ITA No.3310/Del/2023 for A.Y. 2012-13 Olive Overseas Pvt. Ltd. vs. DCIT ITA No.3330/Del/2023 for A.Y. 2013-14 ITA No.3331/Del/2023 for A.Y. 2014-15 ITA No.3332/Del/2023 for A.Y. 2015-16 2. The captioned appeals relates to assessment years 2012-13, 2013-14 & 2014-15 and 2015-16 where the original assessment stood completed or concluded at the time of search and assessment for these years thus stood....
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....dation entries in the form of share application money / investments / loans and advances / purchases / sales. However, there is nothing on record to suggest that any evidence was found in the course of search to the effect that assessee company was engaged in providing accommodation entries as alleged. The impugned additions are merely based on statement of third party Shri Praveen Kumar Jain who was also searched in Oct, 2013. 7.1. In elaboration, the learned Counsel submitted that a search action under section 132 of the Act was initially conducted at the residence of Shri Praveen Kumar Jain, the director of the assessee company on 01.10.2013. In the course of that search, a statement of Shri Praveen Kumar Jain was recorded under section 132(4) of the Act. In such statement, Shri Praveen Kumar Jain made averments towards a modus operandi for providing accommodation entries through the companies where he is a director and charges a one time commission ranging between 1.25% to 2% on total transaction value of the accommodation entries. Shri Praveen Kumar Jain provided a list of 13 companies where he is a director. The assessee company herein namely; 'Olive Overseas Pvt. Ltd.' wa....
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....as conducted in the case of the assessee company this time on 02.06.2017. The learned Counsel contended that from the copy of Panchnama prepared during the search, it can be seen that no incriminating material in the form of books of accounts or documents were seized in the case of the assessee. What was seized was only a hard disk containing data in HP Laptop of one Shri Manish Jain, the erstwhile accountant of the assessee company. The statement on oath of Shri Manish Jain was recorded during the course of search, wherein the questions put in statement of Shri Praveen Kumar Jain recorded in the earlier search on him on 01.10.2013 was broadly reiterated to him by the Authorized Officer which was endorsed by the deponent Shri Manish Jain. In this regard, the learned Counsel referred to para 5.3 of the assessment order showing statement of Shri Manish Jain (the accountant of Shri Praveen Kumar Jain) under section 132(4) of the Act. The AO in para 5.3 referred to the relevant extract of the statement recorded under section 132(4) of the Act of Shri Manish Jain which is the sole basis for alleging engagement of assessee in providing accommodation entries. The learned Counsel adverted ....
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....t and vindicate the averment made by the deponent of the statement. For this proposition, the learned Counsel relied upon the judgment rendered by the Hon'ble Delhi High Court in the case of PCIT (Central) vs. Anand Kumar Jain (HUF) and others in ITA No.23/2021 judgment dated 12.02.2021 and PCIT vs. Pavitra Realcon Pvt. Ltd. ITA No. 579/2018 judgment dated 29.05.2024. The learned Counsel pointed out that these judgments delivered by the Jurisdictional High Court has clearly held that existence of incriminating material found during the course of search is a sine qua non for making addition pursuant to search and seizure operation. The additions which is based on statement of the person found in search on standalone basis, without reference to any other material discovered during the search operation, cannot be regarded as incriminating material and thus do not empower the AO to make additions under section 153A of the Act. The learned Counsel thus submitted that the action of the AO and that of CIT(A) is outside the sanction of law and hence cannot be allowed to hold the field. 7.7 On similar lines, the learned Counsel pointed out that notwithstanding the fact that captioned app....
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....o made on a substantive basis in the case of Shri Praveen Kumar Jain in the A.Y. 2008-09 to 2014-15. The Tribunal affirmed the substantive additions made in the case of Shri Praveen Kumar Jain and set aside the protective assessment in the case of the assessee in the proceedings initiated under section 153C of the Act. 9.3 As pointed out on behalf of the assessee, we observe that admittedly, no demonstrable incriminating material has been found in the course of search in the case of the assessee carried out in June, 2017. The statement of Shri Praveen Kumar Jain given in the previous search in the search case of Shri Praveen Kumar Jain on 01.10.2013 was confronted to the accountant of the assessee in the present search and certain confessions were obtained. The statement of Shri Praveen Kumar Jain was thus adopted for the purposes of additions under section 153A of the Act proceedings in the case of the assessee. The same statement was the basis for assessment under section 153C of the Act previously carried out in the case of the assessee. The issue already stood resolved in favour of the assessee by the ITAT in the earlier proceedings under section 153C of the Act. 9.4 In v....
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.... resorting to estimated additions cannot be applied for period subsequent to the date of search. A person can give statement and divulge information only for the past transactions already carried out and the statement of a person cannot be extrapolated to the subsequent years. Besides, in the wake of the judgment rendered by the Hon'ble Delhi High Court in the case of Pavitra Realcon Pvt. Ltd. and Anand Kumar Jain (HUF)(supra) noted earlier, a bare statement of a person in the course of search without corroboration cannot be regarded as incriminating material per se. When the impugned additions are viewed without the help of the statement, there appears to be no material to justify the rejection of books and estimation of income. The action of the AO is not supported by the independent enquiry in the course of assessment either. Thus, action of the AO giving rise to additions/disallowances is wholly outside the sanction of law. 14. In the result, appeals of the assessee for A.Y. 2016-17; A.Y. 2017-18 and A.Y. 2018-19 deserves to be allowed. ITA No.3358/Del/2023 for A.Y. 2018-19 Nakshatra Business Pvt. Ltd. vs. DCIT ITA No.3359/Del/2023 for A.Y. 2017-18 ITA No.3360/De....