DCIT CC-1(4), KOLKATA, KOLKATA V. NORFIOX VINCOM PVT LTD, KOLKATA

ITSSA 65/KOL/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which deleted an addition made by the Assessing Officer (AO) under section 153A of the Income-tax Act, 1961, concerning bogus share capital amounting to \\u20b92,15,00,000. The search and seizure operation under section 132(1) of the Act was conducted on the assessee, Norfiox Vincom Pvt. Ltd., on 18.09.2012. Following this, the AO made the addition based on post-search investigations and statements suggesting the share capital was from companies controlled by an entry operator. However, the CIT(A) found no incriminating material regarding the share capital during the search, leading to the deletion of the addition. The Tribunal upheld the CIT(A)'s decision, emphasizing that additions in unabated assessment years require incriminating material found during the search.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473866 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Other Referred Cases: PCIT v. Abhisar Buildwell P. Ltd. (2023) 454 ITR 212 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAGHUVEER MADANAPPA
• Assessee Lawyers: MIRAJ D SHAH; FILING
• Keywords: Unexplained cash credit; Bogus
• Section: 153A; 131; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI SONJOY SARMA, JM IT(SS)A No.65/KOL/2024 (Assessment Year:2007-08) DCIT, CC-1(4), Kolkata 110, Shantipally Aaykar Bhavan Poorva, Kolkata-700107, West Bengal Vs. Norfiox Vincom Pvt. Ltd. 14 Netaji Subhash Road, Kolkata-700001 West Bengal (Appellant) (Respondent) PAN No. AAACN8924R Assessee by : Shri Miraj D Shah, AR Revenue by : Shri Raghuveer Madanappa, DR Date of hearing: 30.01.2025 Date of pronouncement : 04.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkaa-21 (hereinafter referred to as the “Ld. CIT(A)”] dated 15.02.2024 for the AY 2007-08. 02. The only issue raised by the Revenue is against the deletion of addition of ₹2,15,00,000/- by the ld. CIT (A) as made by the ld. AO u/s 153A of the Income-tax Act, 1961 (the Act) on account of bogus share capital. 03. The facts in brief are that a search action u/s 132(1) of the Act was conducted on assessee on 18.09.2012. Notice u/s 153A of the Act was issued on 27.11.2013, which was served upon the assessee on 29.11.2023. The notice was complied with by the assessee by filing Page | 2 IT(SS)A No.65/KOL/2024 NorfioxVincom Pvt. Ltd; A.Y. 2007-08 hereturn of income on 28.01.2014, declaring total income of ₹4,64,410/-. Thereafter the ld. AO during the assessment proceedings noted that the assessee has received the share capital from several companies by issuing equity shares. It was further stated that in the post search investigation conducted by unit-II(2), Kolkata, a survey u/s 133A of the Act was conducted at the premises of Faspole Garments Pvt. ltd., Aastha Timber Pvt. Ltd., Good Hope Software Pvt. Ltd. and other companies and during the course of survey, a statement of Mr. Nouratanmall Jain, was recorded who specifically stated that these companies controlled by Mr. Praveen Agarwal, an entry operator. The ld. AO thereafter noted that summons u/s 131 of the Act was served upon Mr. Praveen Agarwal and his statement recorded on 25.09.2012, which was also extracted in the assessment order. Finally, the ld. AO treated the share capital of ₹2,15,00,000/- as bogus and unexplained cash credit and same was added to the total income of the assessee. 04. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by holding that there is no incriminating material found during the course of search qua the said share capital issued by the assessee. The ld. CIT (A) noted that since the instant assessment year was an unabated assessment year and there being no incriminating material found during the course of search and therefore, the ld. AO has no jurisdiction to make the addition. The ld. CIT (A) while allowing the appeal of the assessee followed the decision of Hon'ble Supreme Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC). 05. After hearing the rival contentions and perusing the materials available on record including the appellate order passed by the ld. CIT Page | 3 IT(SS)A No.65/KOL/2024 NorfioxVincom Pvt. Ltd; A.Y. 2007-08 (A) we note that in the instant case the assessment was unabated assessment on the date of search and admittedly there was no incriminating material found during the course of search qua the share capital issued by the assessee. We note that while making the addition , the AO relied on post search inquires only. Therefore, we are fully in agreement with the conclusion drawn by the ld. CIT (A) that the addition in an unabated assessment year can only be made on the basis of seized incriminating material and not otherwise. The case of the assessee is squarely covered by the decision of the Hon'ble Apex court in the case of PCIT v. Abhisar Buildwell P. Ltd. (supra), which has been upheld by the ld. CIT (A) while deleting the addition. Accordingly, we uphold the order of ld. CIT (A) by dismissing the appeal of the Revenue. 06. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 04.03.2025. Sd/- Sd/- (SONJOY SARMA) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 04.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "