AI OCR 
TaxTMI 
TaxTMI 
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2026 (4) TMI 964
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....ity of the impugned notice u/s 148 and the consequent order u's 143(3)/ 147 without appreciating the facts that the notice u/s 148 was issued under Clause (ii) to Explanation-2 to sec. 148 and the alleged documents impounded/found during survey u/s 133A documents did not indicate any alleged fund trail or cash deposit relating to share capital or sale of investment and as such the impugned notice and the consequent order is bad in law and in view of the facts and in the circumstances it may be held accordingly. 3. Without prejudice to Grounds No. 1 & 2 above, Ld. CIT(A) erred in not appreciating the facts that notice u/s 148 should have been under Clause (iv) to Explanation -2 to sec. 148 and as such the assumption of jurisdiction by AO (vide issue of notice u/s 148 under Clause (ii) to Expl. -2) is incorrect and the entire proceedings and the consequent order is bad in law and it may held accordingly. 4. For that in view of the facts and in the circumstances, Ld. CIT(A) erred in affirming the addition made by AO of Rs. 47,12,62,150/- u's 68 and Rs. 11,78,155/- towards alleged unexplained expenditure u/s 69C and in view of the facts and in the circumstance....
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....statement been obtained from Mr. Abhishek Munka and even from Mr. Mukesh Pansari nowhere mentions the appellant in any manner and in view of the facts and in the circumstances it may be held accordingly. 10. Without prejudice to Grounds No. 4 to 9 above, the alleged receipt of cash in such document, AKM 42 from "Vinay/Vinay Agarwal" is unsubstantiated and in any case even any cash has been received from such person then the addition should have been made in the hands of such person only and not in the hands of the appellant company and in view of the facts and in the circumstances it may be held accordingly. 11. Without prejudice to Grounds No. 4 to 10. Ld. CIT(A) erred in not appreciating the facts that AO has not brought any evidence on record for the alleged cash has been utilized by Mr. Abhishek Munka or Mr. Mukesh Pansari to finance the entire transaction and AO has nowhere shown alleged cash has been deposited in any of the alleged bank account under operation on said alleged accommodation entry provider and as such the entie allegation is bad in law and is may be held accordingly. 12. Without prejudice to Grounds No. 4 to 11 above, AO had merely re....
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.... on 22.06.2023. Thereafter, the statutory notices along with questionnaire were issued and duly served upon the assessee. The assessee submitted before the ld. AO the details as called for along with evidences from time to time. The ld. AO noted that the assessee has raised funds from selling of investments during the year under consideration to the tune of Rs.47,12,62,150/-. The notices u/s 133(6) of the Act were also issued to the purchasing parties, which were duly replied along with evidences by the said parties. Thereafter, the ld. AO referred to the search/ survey operation in Jain group, and the premises of Shri Mukesh Pansari, who were covered under search. The statements were recorded u/s 131 of the Act on 09.03.2022 of the shri Mukesh Pansariand in the said statement he admitted to have engaged in providing of accommodation entries in the form of sale of shares including the present assessee M/s Pearl Tracom Pvt. Ltd. Thereafter, the ld. AO accepted that the assessee received the consideration from sale of shares from three parties namely; Astha Merchants Pvt. Ltd. Rs.14,96,62,150/-, Monark Vinimay Pvt. Ltd. of Rs.14,10,00,000/-, Pixel Traders Pvt. ltd. Rs.18,07,00,000/-,....
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.... the Act and find that under the new scheme of search, the AO has to issue notice u/s 148 of the Act for the number of assessment years as provided in the Act. In other words, there need not be any incriminating materials and whether there is any materials warranting additions that has to be examined by the AO during proceedings u/s 147 of the Act. Therefore, we do not find any merit in the contentions of the assessee that the provisions of Section 148 of the Act for search conducted on or after 1.4.2021 cannot be considered in total oblivion of the fact that no incriminating material was found from the assessee during the course of search u/s. 132 of the Act.We also find no force in the contentions of the assessee that the impugned assessment was unabated and hence no addition can be made. We note that the plea of the assessee does not have force or merit as in this case as the requirement of any incriminating material is not there for re-opening the assessment issuing notice u/s 148 of the Act. In our opinion, the assessment can be reopened because the provisions of Section 148 of the Act are analogous to Section 153A of the Act as applicable in the case of search pertaining to s....
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....may Pvt. Ltd. and Pixel Traders Pvt. ltd. were in the struck off status and all these three companies have common address. Therefore, the identity of these companies was in doubt. The ld. CIT (A) noted that the PAN, ROC, registration, audited accounts are not sacrosanct to prove the identity of the creditor entities. Thereafter, the ld. CIT (A) by doubting the creditworthiness of these companies noted that none of the companies have reported any revenue from operations and therefore, they are incapable of paying the sale consideration. The ld. CIT (A) noted from the bank statements that there was fixed pattern observed in deposit, withdrawals. The ld. CIT (A) further noted the fact that these companies were not genuine was strengthened from the documents found from the premises of Abishek Kumar Monka marked as AKM 42, which showed the receipt of cash against cheque amounts issued by the three companies for purchases of investments. The ld. CIT (A) also noted that besides the statement recorded of Shri Mukesh Pansari u/s 132(4) of the Act on 09.03.2022, also proved the fund trail. Further admission by Shri Abhishek Kumar Monka in the statement recorded on 24.09.2021, that he was pro....
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.... as and when these are sold by the assessee. We note that the assessment has been made by the ld. AO by relying heavily on the statements of Shri Abhishek Munka and Shri Mukesh Kumar Pansari. We note that in the statement as recorded of Shri Munkain search proceeding, there is no mention of assessee's name or its directors name and no such query was ever put to Mr. Munka regarding the appellant transactions. 4.3.1. We also note that the assessee has made similar transactions in the earlier assessment years. i.e. A.Y. 2013-14 to 2015-16 & A.Y. 2017-18 qua sale and purchase of shares which were never doubted and accepted by the Department through in the summary assessments and the same are extracted below for ready reference: Opening Transactions Closing Financial Year Balance Debit Credit Balance 2017-18 716,290,850 7,486,700 245,028,700 478,748,850 2016-17 740,883,850 - 24,593,000 716,290,850 2015-16 810,409,850 69,574,000 - 740,883,850 2014-15 735,961,250 11,775,000 76,426,400 810,409,850 2013-14 766,350,000 103,666,375 134,055,125 735,961,250 2012-13 785,140,000 ....
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....onded to notices u/s 133(6) of the Act issued by the ld. AO which were also placed on record. vi. from all the above it is clear that the assertion by revenue regarding such alleged involvement of Abhishek Munka Mukesh Pansari and reliance particularly on AKM-42 is misplaced, misleading and self-servient. Revenue failed to conduct the necessary enquiries in respect of such AKM-42 at any stage earlier and indeed no reference of such document (ie. AKM-42) is found in such statement of that alone persons. Without such enquiry and corroborating evidences, such AKM-42 has no evidentiary value and hence the same deserves to be rejected. Moreover, no evidence of any cash exchange has been placed by revenue on record. Further the buyer companies were very much alive as seen from master data of ROC and they have also responded with regard to notice u/s 133(6). Therefore, AO's addition and action of CTT(A) are devoid of any truth. 4.3.3. We also note that no cross examination was provided to the assessee despite the specific request to provide cross examination of Shri Abhishek Kumar Munka and Shri Mukesh Pansari, we note that the ld. AO relied on the third party statement,wi....
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....ted that the assessee has filed before the ld. AO as well as before the ld. CIT (A) all the evidences qua the purchases and sale of shares. The assessee has filed all the evidences qua the purchasers such as ITRs, names, addresses, audited balance sheets, bank statements, confirmations, etc. proving the identity, creditworthiness of the purchasers and genuineness of the transactions. We note that even the purchasing companies have filed their evidences as called for by the ld. AO comprising all the evidences as stated above. The ld. CIT (A) has recorded a finding of fact that apart from the assessee, purchasing companies had also filed all the evidences before the ld. AO however the ld. AO had not brought on record any independent and substantive evidences pointing out any defect or deficiency in the said evidences. The ld. CIT (A) finally noted that the assessee has proved the identity and creditworthiness of the parties and also the genuineness of the transactions by filing all these documents and thus, discharged its initial burden. Besides, we note that nothing incriminating was found and seized during the course of search. 8. We observe that the ld. CIT (A) also noted....
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....r AY 2011-12 was framed u/s 143(3) of the Act vide order dated 17.03.2014 a copy of which is placed at page no. 276 and 277 of PB Vol.-1 and the neither the share capital/share premium nor the investments out of that source were doubted by the AO. 9.2. We also note that similar issue was involved in the case of M/S Swarna Kalash Commercial Pvt Ltd. Vs ACIT, Central Circle -2(2), Kolkata, a group concern of the Rashmi Group of Companies, which was also subjected to search u/s 132(1) of the Act in the same search proceedings. We note that the coordinate bench has decided the issue in favour of the assessee in ITA No. I.T.(S.S.)A.No.53/Kol/2022 A.Y.2019-20 vide order dated 01.09.2023 involving the same issue of addition of sale of shares/investments by the AO on the ground that identity and credentials of the purchasers of shares/investments were suspicious. The operative part of the order is extracted as under: "6. We have considered the rival contentions and gone through the record. First we deal with the issue relating to the undated detailed order passed by the Assessing Officer even after the prescribed date of limitation for passing the assessment order for the....
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....at the cost of acquisition by the assessee. Hence, there is no profit/loss on such sale of investment. We also look at the movement of investment held by the assessee, which is tabulated below: FY AY Opening Purchase Sales Amount Closing Balance by A.O. 2014-15 2015-16 63,42,00,000 63,42,00000 2015-16 2016-17 63,42,00,000 42,44,960 18,344,960 62,01,00,000 1,83,44,960 2016-17 2017-18 62,01,00,000 56,27,44,459 468,499,459 71,43,45,000 46,84,99,459 2017-18 2018-19 71.43.45,000 1,55,17,29,538 2,062,064,910 20,40,09,628 2,06,20,64,910 2018-19 2019-20 20,40,09,628 66, 47, 64, 007 170,560,000 69,82,13,635 17,05,60,000 Total 2,71,94,69,239 11.3. We also refer to the details of opening stock, purchases, sales and closing stock during the year, placed on record by the assessee: SI No Name of the Script Opening Balance Purchases Sales Closing Balance Amount Amount Amount Amount I Bellona Supply Pvt. Ld. 1,24,57,344 0 1,24,57,344 0 2 ....
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....Ltd 547-597 Rs. 5,50,000 9 Outright Commodities Pvt Ltd 599-846 Rs. 2,44,90,700 10 Over Arching Impex Pvt Ltd 847-1053 Rs. 81,00,000 11 RadhacharanTradevin Pvt Ltd 1055-1158 Rs. 10,00,000 12 S P Udyog Pvt Ltd 1159-1161 Rs. 25,00,000 13 SamundarTradelink Pvt Ltd 1162-1164 Rs. 34,00,000 14 Shatabdi Entertainment Pvt Ltd 1165-1193 Rs. 14,00,000 15 Spur Trading Pvt Ltd 1195-1204 Rs. 7,50,000 16 SwarnmahalVyapaar Pvt Ltd 1205-1252 Rs. 15,00,000 17 Swetang Retails Pvt Ltd 1253-1356 Rs. 50,00,000 18 Viewpoint Advisory Pvt Ltd 1357-1490 Rs. 85,00,000 19 Yuthika Merchandise Pvt Ltd 1492-1603 Rs. 25,00,000 Total (A) 9,31,50,000 20 Bengal Trade Agency 1604-1613 Rs. 1,64,00,000 21 Bhagwati Trading 1614-1616 Rs. 57,90,000 22 Om Sai Enterprise 1617-1619 Rs. 24,90,000 23 Simplex Xallolloy 1620-1622 Rs. 78,05,000 24 Others-Non- Corporate Rs. 4,17,35,000 Total Rs. 7,42,20,000 12. Further, according to the....
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....any admission was made by the assessee during search operation. In the case of "Commissioner of Income Tax vs. Sunil Agarwal" (2015) 64 taxman.com 107 (Delhi-HC), the assessee therein, during the course of search, made a categorical admission under section 132(4) that the cash amount seized belonged to him and it represented undisclosed income not recorded in the books of accounts. The assessee did not immediately retract from the above admission but only during the assessment proceedings at a belated stage. In his retraction, the assessee stated that the surrender was made under a mistaken belief and without looking into books of account and without understanding law and that he had been compelled and perturbed by events of search and that the pressure of search was built so much that he had to make the surrender without having actual possession of the assets or unexplained investments or expenses incurred and that there was no such income as undisclosed. The Hon'ble Delhi High Court, after considering the fact and circumstances of the case, while dismissing the appeal of the revenue, observed that though the fact that the assessee may have retracted his statement belatedly, yet, ....
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....rch proceedings, record relating thereto being in exclusive custody of the searching officers, it is their wish and will which prevails during the fateful period. That it is almost impossible for the assessee to adduce demonstrative evidence of exerting such pressure. The co-ordinate bench of the Tribunal (supra) while holding so, apart from relying upon various decisions of the higher courts has also relied upon the decision of the Tribunal in the case of "Dy CIT vs. Pramukh Builders" (2008) 112 ITD 179 (Ahd.) wherein it has been held that even in the absence of proof of coercion or pressure, the statement by itself cannot be taken as conclusive. Therefore, merely in the absence of proof of pressure, threat, coercion or inducement the statement cannot be held as conclusive and additions cannot be made by solely relying on a statement or a letter. 12.3. The case of the assessee, before us, is on better footing as in this case, there is no delay in retraction of the statement which was done on the very next day by filing affidavits before the Metropolitan Magistrate 12.4. Even the CBDT Letter No.286/2/2003-IT(Inv) dated Oct 3, 2003 in this respect read as under: ....
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....e of its business, more importantly, purchases having made in the current year also. Further, as rightly pointed out by the learned Counsel, both opening balance of investment in shares and the purchases made during the year have not been disputed or doubted by the authorities below so as to bring the entire sale consideration to tax. 14. At this stage, the ld. DR has submitted that the assessee has claimed that it has undertaken this sale transaction by selling the shares at the cost at which it had acquired them in AY 2006-07. At the same time, assessee submits that it has undertaken this transaction in the ordinary course of its business. The ld. DR has submitted that the conduct of business is always with a profit motive, more particularly when the assessee had held these shares for past several years and had also made purchases during the year, deploying its funds. There ought to be certain element of profit embedded in the sale transaction executed which must be brought to tax. 15. Considering the above submission of the ld. DR and taking a holistic view of the facts and circumstances of the case, we find it proper to consider net profit element @ 5% of the ....
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....essing Officer has in no uncertain terms accepted the receipt of the impugned sum on account of sale proceeds of investment. The Assessing Officer verified the investment sold which are shown in the balance-sheet for the financial year 2010-11 in Schedule-4 of the balance-sheet and after considering these facts it was stated that the assessee had sold shares held by way of the investment during the year to M/s. Shivshakti Communications and Investment Pvt. Ltd. and Carnation Tradelink Pvt. Ltd. and it is not a receipt of unsecured loan. This fact, apart from other factual details, were considered by the CIT(A) and by an elaborate order dated 10.5.2023 the appeal filed by the assessee was allowed. The tribunal on its part re-examined the factual position and took note of the findings rendered by the CIT(A) and concurred with the same. We also find that the tribunal has also examined thefactual position and took note of the remand report as called for by the CIT(A) which confirmed the alleged sum is on account of sale of investment and not otherwise. Thus, we find no question of law much less substantial question of law arises for consideration in this appeal. Accordingly, t....