LUXORA INFRASTRUCTURE P. LTD., MUMBAI V. DCIT CENTRAL CIRCLE-2(1), MUMBAI

ITA 1608/MUM/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7312 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 22-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIRAMA KARTHIKEYAN
• Keywords: Unexplained cash credit; Depreciation; Rectification of order; Search and seizure; Double taxation relief; Document seized; Additional evidence; Revised return; Reason to believe; Documents seized; Set aside
• Section: 68; 148; 132; 154; 69C; 143(3); 153A; 234B; 250; 13; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” Bench, Mumbai Before Shri Shamim Yahya, Accountant Member I.T.A. No. 1608/Mum/2020 (Assessment Year 2011-12) Luxora Infrastructure Pvt.Ltd. 1207, 12 th Floor ‘A’ Wing,O2 commercial Building, 23-24, Minerva Industrial Estte, Off.LBS Road, Mulund(W) Mumbai-400 080 PAN : AABCL2854K Vs. DCIT,CC-2(1) Prathishta Bhawan 8 th Floor, Mumbai-400 020 (Appellant) (Respondent) Assessee by Shri K.P.Dewani Department by Shri Abhirama Karthikeyan Date of Hearing 16.12.2021 Date of Pronouncement 09.03.2022 O R D E R Per Shri Shamim Yahya (AM) :- This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-48 passed as rectification order u/s. 154 of the Act, dated 13.12.2019 and pertains to assessment year 2011-12. 2. Grounds of appeal read as under:- 1. The order passed u/s 154 by Hon'ble CIT(A) is illegal, invalid and bad in law. 2. There is no mistake apparent from the record in the appellate order dated 31/10/2019 which requires rectification u/s 154 of IT. Act 1961 by Hon'ble CIT(A) - 48. Mumbai. Thus order passed is bad in law. 3. The Hon'ble CIT(A) erred in holding that no incriminating material is required for making addition in the completed assessment before the date of search. 4. The Hon'ble CIT(A) erred in upholding the addition of Rs.22,69,397/- made by A.O. u/s 68 of IT. Act 1961 on account of share capital in order u/s 154 of IT. Act ITA No.1608/M/2020 2 1961 which was deleted by herself by following the decision of Hon'ble ITAT in case of associate company. 5. The addition made by A.O. u/s 68 in assessment framed u/s 143(3) r.w.s. 153A in absence of any incriminating material found during the course of search deleted in appeal and now restored by Hon'ble CIT(A) in order u/s 154 is unjustified, unwarranted and bad in law. 6. The learned CIT(A) erred in not considering the additional evidences placed in appellate proceedings while upholding the addition in order u/s 154. 7. The Hon'ble CIT(A) ought to have held that assessee has discharged its onus to explain share capital on the basis of legal evidence on record and thus addition confirmed by Hon'ble C1T(A) in order u/s 154 of IT. Act 1961 is unjustified and unsustainable. 8. The order passed by A.O. u/s 143(3) r.w.s. 153A of IT. Act 1961 is illegal, invalid and bad in law. 9. The learned A.O. erred in not setting off the addition made in the assessment framed at Rs.22,69,397/- with the net loss assessed in assessment framed at Rs.54,36,891/-. 10. The Hon'ble CIT(A) erred in upholding the action of A.O. in not setting off of income with loss determined in assessment framed without assigning any reasons. 11. The assessee denies liability to pay interest under section 234A, 234B and 234C of IT. Act 1961. Without prejudice, levy of interest under section 234A, 234B and 234C of IT. Act 1961 is unjustified, unwarranted and excessive. 12. Any other ground shall be prayed at the time of hearing. 3. At the outset, it is noted that the delay 74 days in filing the appeal. Ld. Counsel of the assessee submitted that the delay was owing to the Corona Virus pandemic. Hence he prayed that the delay be condoned. Upon hearing both the parties, I condone the delay in filing the appeal. 4. The challenge in this case is rectification order passed by the ld.CIT(A) u/s.154 of the I.T.Act. It is considered gainful to refer to the order of ld.CIT(A), wherein he has held as under:- 1. " In the above appeal order No. CIT(A)-48/I.T.-180/DCCC-2(1)/2017-18 dated 31.10.2019 for A.Y. 2011-12, following appellate decision was given: “ 5. APPELLA TE DECISION:- I have perused the assessment order, details file and the written submissions of the assessee. The appeal is disposed of as below:- ITA No.1608/M/2020 3 5.1. Ground No. 2:- This legal ground can be taken up first as it relates to jurisdiction of AO regarding of addition of Rs. 22,69,397/-. The AO added Rs. 22,69,391'/- as unexplained cash credit u/s. 68 since the assessee could not substantiate the creditworthiness and genuineness of the share transaction with M/s. Aanya Properties Ltd. In this regard, assessee, in the statement of facts, has stated that the assessment u/s. 143(3) of the year under consideration was already passed prior to search and the AO did not make any addition u/s. 68. Therefore, the AO cannot revisit the order again without any incriminating material AO has not brought out anything in the assessment order to establish, that certain new facts or new insights/revelations or any incriminating document or any admission in statements recorded in search proceedings were discovered or unearthed, due to which issued closed in earlier 143(3) order is being reassessed/revisited in the 153A assessment Also, vide letter dated 25.07.2019, assessee stated that in its group case M/s. Luxora Realtors Ltd. for A.Y. 2012-13, the addition on the same issue was deleted by the CIT(A)-24 and further appeal by the department was dismissed by the ITAT vide its order dated 19.06,2019. In view of this, the ground no. 2 of assesssee's appeal is allowed. 5.2. Grounds No, 1,3 to 6:-Since Ground No. 2 is allowed above, other grounds become academic in nature and do not need adjudication as they all individually relate to issue of addition of Rs. 22,69,397/- u/s. 68. 5.3. Ground No. 7:- This ground is general in nature and infructutous. 6. In the result, the appeal of the assessee is allowed for statistical purposes." 2 APPELLATE DECISION GIVEN IN THE ABSENCE OF CRUCIAL FACTS:- The perusal of the appeal order passed on 31.10.2019 clearly showed that the crucial relevant facts relating to information received by AO in the form of New Information regarding non-verifiable nature of ultimate beneficiaries of two Mauritius based companies on the basis of enquiry through FTTR Division of CBDT, was not considered, which was basis of addition of Rs. 22,69,397/- u/s. 68 in the impugned order passed u/s. 143(3) r.w.s. 153A. Therefore, in the total absence of consideration of the New Information received through FTTR, the appellate decision taken vide order dated 31.10.2019 had mistake apparent from record as the apparent facts of the case were not discussed. As soon as the apparent mistake was noticed, a notice was issued to assessee filing its objections, if any. The copy of the letter dated 25.11.2019 is reproduced below for ready reference:- " Sub: Rectification of the Appeal Order dated 31.10.2019 in ITA No. CIT(A)-48/I.T.-180/DCCC-2(1)/2017-18-regarding A.Y. 2011-12 against 143(3) /153A order dated 29.12.2017. With reference to the above appeal order, crucial and relevant facts related to information collected from Mauritius through FT & TR Division of CBDT was inadvertently missed out, while deciding the appeal. Since such information in the possession of AO was central to the assessment order, it is proposed to rectify the appeal order dated 31.10.2019, in the light of this information. ITA No.1608/M/2020 4 You are requested to file your objections, if any, by30.11.2019. Oneline correspondence at email ID MUMBAI.CIT.APL48@IN COMETAX.GOV.IN will be considered as good enough." 3. The submission of assessee, in response to the rectification notice, was filed, vide letter dated 30.11.2019 (received in the office on 02.12.2019). The same is reproduced below for ready reference:- We are In receipt of letter from your office wherein you Honour have mentioned that in Appeal order Passed by your Honour for the AY 2011-12 dated 31/10/2019, while deciding the Appeal ,relevant facts related to information collected from Mauritius through FT & TR Division of CBDT was inadvertently missed out . Since such information in the possession of AO was central to the assessment order , it is proposed to rectify the appeal order dated 31.10.2019. In the light of this information , your Honour, requested us to file our objections if any. In this regard, the Appellant most respectfully submit before your honour as under: 1. There is no mistake in the Appeal order passed by your, honour which require rectification . 2. The main Grounds of Appeal is regarding the introduction of fresh capital by a shareholder for which the addition was made. The said addition was made on the basis of addition made in the case of group company of the Appellant M/S Luxora Realtors Pvt. Ltd (LRPL) on account of share capital. 3. In the case of LRPL , the said issue was also covered in Assessment year 2O12- 13 wherein the similar addition was made. LRPL also preferred an appeal against this assessment order with Hon'ble C.I.T. (Appeal)-24, Mumbai. The said appeal was decided by Hon'ble CIT (Appeal)-24 in favour of the LRPL vide order dated 29/07/2016. A copy of the order is forming part of the paper book dated 12/11/2O18 as "Annexure 193-208 ". The department had gone in second appeal with Hon'ble I.T.A.T, Mumbai. The said appeal has been decided by Hon'ble I.T.A.T. Mumbai against the department. In other words, the department's appeal has been dismissed and therefore the order of CIT (Appeal}-24 in the case of LRPL has been confirmed. A copy of the order of Hon'ble IT.A.T. dated 19/O6/2019 in the case of LRPL for AY 2012-13 have been submitted to your Honour vide Appellant's submission dated 25/07/2019 as "Annexure 1" ). 4. Further , in the case of the said group company i.e. Luxora Realtors Pvt. Ltd (LRPL) , for the AY 2O13-14 vide order dated 09/03/2017, the than assessing officer (A.C.I.T.-15(2)-l, Mumbai) made addition of issued and paid up Share Capital (Including Share Premium) received from Aanya Properties (1) Ltd (a Mauritius based Company) holding the same as unexplained cash credit u/s.68 . While passing the order , the Assessing officer tried to find technical fault, (although they were not there) in the proceedings with Reserve Bank of India, F.I.P.B. etc. The Ld. D.C.I.T. also misinterpreted the partial information received from the office of Principal ITA No.1608/M/2020 5 C.I.T.-15 which were in turn received from Mauritius Revenue Authority through FT & TR division. 5. Subsequently due to search action the case of the said group company was also transferred to the Ld. D.C.I.T. 6. The Ld . D.C.I.T. mechanically followed and proceeded on the same line which were followed by the earlier Assessing officers of LRPL & Passed order for AY 2013-14 &. AY 2014-15 and made similar addition U/S 68. LRPL preferred appeal against said order before your Honour which is pending . 7. Since both the cases i.e. the Appellant's case and the case of LRPL were with the Ld. D.C.I. T. , Although no incrementing documents were found during the course of search in the case of Appellant, the Ld. D.C.I.T, mechanically followed and proceeded on the same line and made similar addition U/S 68. 8. As regards to information collected from Mauritius through FT & TR Division of CBDT , the Appellant would like to draw your Honour's kind attention to the fact that the said information received was pertaining to M/s. Aanya Properties (l) Ltd who was the share holder of the LRPL.However, in the case of Appellant, the share application money was received from M/s. Aanya Properties (2) Ltd and M/s. Access Investment India which wee the separate legal entities based at Mauritius. The appellant was not received any share application money from M/s. Aanya Properties (1) Ltd.. The Ld. DCIT have not called for/received any such information from Mauritius through FT & TR Division of CBDT in the case of M/s. Aanya Properties (2) Ltd. and M/s. Access Investment India. 9. In Para 6.3 of the order U/s 113(3) r.w.s.153A passed by the Ld. D.C.I. T, the Ld. D.C.I.T. mentioned about information received from Mauritius through FT & TR Division off CBDT about M/S Aanya Properties (1) Ltd and not about M/S Aanya Properties (2) Ltd and M/s. Access Investment India. It clearly indicate that the Ld. D.C.I.T , not sought / received any Information about M/s. Aanya Properties (2) Ltd and M/s. Access Investment India. 10.The Appellant submitted all necessary documents to Ld. D.C.I.T prove the identity , capacity and genuineness of the such Investments made by M/s.Aanya Properties (2) Ltd and M/s. Access Investment India , the copy of which also submitted before your Honour vide Appellant's written submission dated 12/11/2018. 11. Without prejudice, your Honour's kind attention is drawn on para 6.3 of the Assessment order passed by Ld. D.C.I-T. for the year under appeal, wherein , the Ld. D.C.I.T. has categorically stared that the information received from revenue authority of Mauritius through Foreign Tax ITA No.1608/M/2020 6 and Tax Research Division Ministry of Finance Government of India were partial in nature. Moreover, the information received stated that M/s. Aanya Properties (X) Ltd. had not booked any profit from FY 2006-07 (year of incorporation) till FY 2012-13 almost all its investment made through capital money raised from Its share holders i.e. M/s. Aanya Holdings Ltd- it was seen through the financial statements of Aanya properties (i) Ltd that the company did not have any self generating source of income- These information were not complete therefore the predecessor Assessing Officer of LRPL sent another letter dated 17/10/2016 to Mauritius Authority through FT and TR Division. The reply in this regard had riot been received till the date of passing the date of Assessment Order under this Appeal. 12 In this connection the Appellant most humbly submits before your Honour that the Mauritius Report might be the opinion the Ld. D.C.I.T. partial in nature but the findings of the report nowhere give any negative clue On the contrary the findings of the Mauritius Report were very categorically stated that the funds were provided by Investors I.e. Aanya Properties (I) Ltd. through capital money raised from sole share holder M/s. Aanya Holding Ltd, and not out of self generating source of Income. In this connection the Appellant draws your Kind attention to the fact that the prime question under consideration was to satisfy the genuine source and not to ascertain whether the funds were received out of capital investment or out of profit booked. The report clearly states that the money received was out of capital investment and In the humble view of the Appellant it is not necessary that the funds received are genuine if received only out of the profit booked and not out of the capital investment. 13. The Ld.DCIT should have appreciated the facts and the variety of evidence substantiating the identity capacity and genuineness of shareholders were furnished and the report received from Mauritius Revenue Authority was quite positive. 14. To sum up, the Appelant strongly object the proposed rectification of Appeal order passed by your Honour on following gorunds. a) The assessment u/s. 143(3) for the year under appeal was already passed prior to search and no incrementing documents were found during the course of search. b. The appellant submitted all necessary documents before Ld. D.C.I.T. to prove the identity , capacity and genuineness of the such investments made by M/s Aanya Properties (2) Ltd and IV7/S Access Investment India. c. The information received from Mauritius through FT & TR Division of CBDT (s related to M/s. Aanya Properties (1) Ltd from which Appellant has not received any share application money , d. The Ld. D.C.I.T. not sought / received any information about M/s. Aanya Properties (2) Ltd and IVI/S Access Investment India from whom the Appellant received share application money . The information received from Mauritius through FT & TR Division of ITA No.1608/M/2020 7 CBDT related to M/s. Aanya Properties (I.) Ltd does not contain any thing adverse in nature. We hope Your Honour will find the above In order and shall thank to kindly consider the above submissions in relation to your decision to proposed rectification of the Appellate order . 4. OBJECTION OF THE ASSESSEE DISMISSED:- After considering the submissions of assessee and the relevant facts of the case, the objections of assessee are dismissed as below:- 4.1 AO has, in the assessment order, in para 6 onwards, has discussed the relevant facts obtained / gathered in case of Luxora Realtors Pvt. ltd. and the same are reproduced elaborately in para 6.3 of the assessment order. There is elaborate mention of reference to FTTR Division of CBDT and the information gathered regarding Aanya Properties and Aanya Holdings Ltd. The information gathered regarding Ultimate Beneficial Owners (UBO) has also been discussed by AO in the assessment order elaborately. All these facts are crucial to decide the legality of order passed u/s. 143(3)/153A in case of assessee, wherein, prior to search conducted on 19.03.2015, assessment u/s. 143(3) was completed accepting the revised returned loss of Rs. 54,36,891/-. Since these crucial facts were not considered while passing the appeal order on 31.10.2019, wherein, ground No. 2 of assessee's appeal was allowed in view of incomplete facts of the case, nay, without consideration of relevant facts of the case, it is clearly a case of mistake apparent from record. Since the mistake is relating to the apparent facts of the case, which has automatically resulted in a particular decision, while disposing of ground No.2 of assessee's appeal, the mistake needs to be rectified and such power of rectification is derived from section 154 (1) (a) r.w.s. 251(1)(c) and also its Explanation. 4.2 In view of above discussion of facts and law, the objections of assessee are dismissed and appeal order dated 31.10.2019 is rectified as below: - 4.3 Ground Number 2 and 3:- These grounds can be taken up together as they challenge the technical aspect relating to jurisdiction of assessing officer in making addition under section 68 regarding share capital(including share premium) as unexplained. The main argument of assessee is that assessment under Section143(3) had already been done in this case and since no incriminating material was found in the search, assessing officer cannot make any addition relating to share premium without any incriminating material. 4.3.1 I have considered the overall facts of the case and have also deeply analysed and read the relevant provisions and sections relating to the issue. After considering the overall scheme of taxation and after arriving at the harmonious construction of the relevant provisions of the Act visa-vis the other sections, the grounds of assessee are dismissed in view of following:- ITA No.1608/M/2020 8 1. Harmonious Construction is the Fundamental Principle of Jurisprudence:- It is one of the basic fundamentals of the jurisprudence that the statute has to be read and interpreted in such a way that there is harmonious construction within a particular section and also of that section vis-a-vis the other sections and the overall scheme of statute. 2. Original Assessment U/s. 143(3) and the New Information with the Assessing Officer Regarding non-verifiable Nature of Ultimate beneficiaries of Two Mauritius Based Companies: Inquiry through FTTR Division of CBDT:- The fact of assessee's case is that 143(3) assessment was done in this case on 26.03.2014. Thereafter, 153A proceedings were initiated in October, 2016 subsequent to certain seizure action under section 132 on 19.03.2015. Therefore, since original assessment order merges with 153A proceedings, assessing officer would have following jurisdictional powers:- 1) Assessment of income on the basis of incriminating documents found in the search and seizure action. 2) To adjudicate any additional issue, for which the specific information has been received by the AO subsequent to original assessment under Section143(3). With reference to point no. 1 above, it is absolutely clear that if any incriminating document is found in the search and seizure proceedings, the assessing officer has full powers to make addition on the basis of such incriminating documents. Therefore, there is no further deliberation on point number 1 here. With reference to the point number 2 above, it is very clear that there may be a situation, where subsequent to the original assessment under Section143(3), assessing officer may receive or obtain some additional information, which is not emanating from the search and seizure proceedings. Definitely there are unlimited sources, from which, the information relating to correct assessment of income of an assessee is available to assessing officer. Receipt of such information is not necessarily limited to search and seizure operation under section 132 alone. 3. The Moot Question:- The moot question is that in a case, where assessment under Section143(3) has been completed and once search & seizure proceedings are initiated and notice under section 153A is issued; Can or should assessing officer ignore any other information which comes to his notice relating to assessment of income while finalizing assessment under section 153A. The answer to this question is clearly No. Assessing officer is very much empowered and it is within his jurisdiction to use such information, while completing assessment under section 153A. This is the only conclusion which comes from the harmonious construction of the statute as a whole. Any different view, which does not empower assessing officer to use such information and ignore it, would be absurd and contrary to the overall scheme of Income Tax Act, which strives to assess the correct income of the assessee for a particular assessment year. 4. Can Notice u/s. 148 Issued Relating to Original assessment u/s.143(3), Once Notice u/s. 153 is Issued:- ITA No.1608/M/2020 9 In the specific facts of the present case, the issue to be deliberated is whether and assessing officer can issue notice under section 148 on the basis of any information which comes to his notice from sources different from search and seizure and he has reasons to believe that some income has escaped assessment, when the notice under section 153A has already been issued ? In this regard, the literal interpretation of section 153A would be that assessing officer has power to assess or reassess the total income in respect of each of the six assessment years for which notice under section 153A has been issued. The literal interpretation of section 153 A is relevant for discussion here as in section 153A, there is no mention of incriminating material or seized documents etc. In fact provisions of subsection 2 to section 153A, very categorically mention about revival of the original assessment order, in the event of assessment under section 153 A is annuled. Thus only logical inference to be drawn is that in 153A proceedings, original assessment u/s. 143(3) are embedded and enjoined with assessment based on seized documents etc. Original assessment order u/s. 143(3) is only t , merged - it is alive and vibrant and does not lose its existence. 5. Abatement of Proceedings as per 2nd Proviso is Purely for the Procedural Convenience to Frame Single Assessment Order:- In the light of above overall discussion and eventuality of a situation, where, certain information comes to the notice of assessing officer regarding escapement of income in a broad perspective, a harmonious interpretation of 2nd proviso of section 153A would be that once the search takes place under section 132, the pending assessments have been abated only for the limited purpose of convenience of framing a single order and for no other purpose. The word abate used in the statute is for a very limited / procedural purpose in the overall scheme of things and such interpretation alone gives a harmonious construction not only to the section 153A and its subsection and its various provisos but also to this section vis-a-vis the overall scheme of assessment and powers of assuming jurisdiction for assessment by assessing officer as per the other sections. Any other interpretation would lead to disharmony and absurd conclusions contrary to the spirit of taxing the correct income for a particular assessment year. 4.3.2 Therefore, in the light of above position of law, assessing officer had all the power to make addition under section 68 for the non-verifiable credits in the names of Ananya Properties (2) Ltd. and Access Investment India as neither the creditworthiness of the ultimate beneficiaries of these two investors nor the genuineness of the transactions could be effectively proved as per the information received from Mauritius Tax Authorities under the relevant provisions of "Exchange of Information Agreement in India Mauritius DTAA. The information was in the possession of assessing officer from the file of the group entity M/s. Luxora Realtors Pvt. Ltd. and the information was gathered through FTTR division of CBDT. This is not a case , where, AO has revisited an assessment without any new facts in his possession. ITA No.1608/M/2020 10 4.3.3 In view of this discussion above, ground numbers 2 and 3 of assessee's appeal are dismissed and assessing officer's jurisdiction, to make assessment on the basis of information available with him regarding bogus and unexplained nature of share capital introduced by assesses in the names of two Mauritius based companies, was very much lawful. 5.4. Ground number 1, 4, 5 and 6:- In the appeal order dated 31.10.2019, ground No. 1 & 3 to 6 were not adjudicated because they had become academic in view of allowing ground No.2 in the absence of crucial facts. However, in view of the rectification made related to ground No. 2 above, the appellate decision relating to ground No. 1 and 3 to 6 given in order dated 31.10.2019, becomes apparently incorrect. Therefore, these grounds are discussed and disposed of as 5.4.1 Ground Number 1;- This ground is general in nature and will stand disposed off when the subsequent grounds are taken up. Hence this ground is not being taken up now. 5.4.2 Ground numbers :- First of all, we can take ground number 6, wherein, assessee has challenged that the amendment to section 68, introducing proviso to section 68, treating share capital money as unexplained cash credit, if assessee failed to prove the identity creditworthiness and genuineness of source of funds of the shareholders, is applicable from assessment year 2013-14 onwards and, therefore, same is not applicable for the impugned assessment year 2009-10. This ground of assessee's appeal is dismissed as assessing officer has nowhere invoked the amended provisions of section 68, wherein, the proviso introduced vide Finance Act, 2012 with effect from 01-04-2013. 5.4.3 Rigor of original section 68: Nature & Source: No Satisfactory Explanation in the Opinion of AO:- It would be relevant to hold here that the rigor of original section 68 itself casts the onus on assessee that the credits including the share capital which is a settled position of law as per the various Apex courts orders) must be satisfactorily explained by establishing the identity and creditworthiness of creditor and the genuineness of the entire transaction. Therefore, irrespective of the amendment introduced by Finance Act 2012, the original law itself was rigorous enough with regard to proving the genuineness of the transaction and the identity and the creditworthiness of the creditors. Therefore, when the assessing officer has reason to believe that the sources of assessee's capital introduced in the form of share capital are not satisfactorily proven by the assessee, the addition under section 68 can be lawfully made. In this case, the AO was not satisfied with the creditworthiness of Mauritius Companies itself and in this regard AO had asked assessee to prove sources of their funds. Thus the requirement of verification of creditworthiness and genuineness of ultimate beneficiaries was in entrusted upon assessee by AO. As has already been brought out above in this order, assessing officer has nowhere invoked the proviso introduced by Finance Act, 2012 and, therefore, this ground of appeal of assessee is without any basis and is therefore rejected. ITA No.1608/M/2020 11 5.4.4 Ground number 4 and 5 can be discussed together:- Assessing officer has given elaborate reasons that the share capital introduced in the names of Ananya Properties (2) Ltd. and Access Investment India is not genuine and the creditworthiness of these two parties is not proven by assessee on the basis of non-verifiability of creditworthiness of the ultimate beneficiaries of these two companies based in Mauritius. Ground number 4 and 5 of assessee are also rejected in view of the following details, which have been brought out by assessing officer (on the basis of information collected through FTTR division of CBDT in the case of another group company of the assessee where the same two parties were allotted shares on the huge premium) and also on the basis of rejection of the additional evidences filed in the appeal proceedings as discussed above in para 5 to 5.1.6. 1. Assessing officer has exposed the bogus nature of these two investors, which are based in Mauritius and has explained elaborately as to how the flow of funds to these companies clearly shows that the creditworthiness and the genuineness of the investments by these two companies is not proven at all. 2. The information gathered of these two investors through Foreign Tax and Tax Research Division of CBDT, in the case of a group company of assessee has been elaborately brought out in the assessment order. The investments in assessee company is not through self-generated funds but exclusively through investments received in the name of ultimate beneficiaries. 2. In view of such financial status, which makes their creditworthiness extremely doubtful, it is very logical for AO to further verify as to what were sources of funds with these two companies as they had no business of their own. To verify this linkage of the sources of funds of these companies, the original section 68 provides sufficient enabling powers to the assessing officer to verify the creditworthiness of these two parties up to the sources of funds from Ultimate Beneficiaries. In this context, to verify the flow of money from the ultimate beneficiaries to these two companies is well within the powers of assessing officer as per the original section 68. In the absence of any substantive documents and evidences submitted by assessee before the assessing officer or in appeal proceedings to substantiate the creditworthiness of these two companies or to prove beyond doubt the genuineness of the transactions of share allotment and the premium paid by these two companies, addition under section 68 is very much valid. 4. Creditworthiness of Ultimate Beneficiaries Not Proved: Additional Documents do not substantiate creditworthiness of Ultimate Beneficiaries:- Further, the details filed by assessee in the appeal proceedings regarding financial status of the ultimate beneficiaries, as has already been up held in para- 5.1.5, above in this order, assessee has again failed to substantiate the creditworthiness of these ITA No.1608/M/2020 12 ultimate beneficiaries or to prove the genuineness of the flow of funds and the sources. Again at the risk of repetition a reference is made here to para- 5 to 5.1.6 above in this order wherein the emptiness of the various documents filed as additional evidence has been exposed. It will not be an exaggeration to state that not a single paper filed as additional evidence substantiates the creditworthiness of these ultimate beneficiaries or substantiates the actual flow of fund from these persons to the two companies. There is not a single document for even one entity which could explain and substantiate the actual worth of these ultimate beneficiaries and could demonstrate the flow of funds from these persons to the two companies which were ultimately allotted shares on the huge premium. 5. The conclusion drawn therefore, is that these two parties were not credit worthy to have invested the huge amount in assessee company and the transactions between these two companies and assessee company was not genuine. Thus it can be very fairly concluded that the onus on assessee under section 68 remains unexplained and undischarged. 6. Merely to file confirmation & copies of return of income of two companies of Mauritius does not amount to discharging the onus of establishing genuineness and creditworthiness. If the AO / CIT(A) (having coterminous power with AO) are not satisfied with financials of the creditor (investor here) to have satisfactorily explain such huge investments, it is lawful for such authorities to further probe the sources upto ultimate beneficiaries to verify the nature and source of such investments satisfactorily. 5.4.5 Assessee's Reliance on ITAT order dated 19.06.2019 for A.Y. 2012-13 is Misplaced:- Assessee has relied upon ITAT's decision in case of Luxora Realtors Pvt. ltd. for A.Y. 2012-13 in ITA No. 6202/Mum/2016, wherein, addition u/s. 68 for Share Capital introduced in the names of Mauritius based companies was deleted. Since the AO made the addition in the impugned assessment order on the basis of facts and findings contained in the assessment order of Luxora Realtors, the assessee has relied upon ITAT's decision deleting such addition in case of Luxora Realtors. However, the perusal of Hon'ble ITAT's order shows that such reliance is misplaced and does not support assessee in view of following:- ITAT has deleted the addition stating that AO has incorrectly mentioned stakes of foreign Investor Aanya Properties (I) Ltd. at 99% in assessee company, ITAT has also found mistake that Aanya Holding Ltd. was holding 100% shares of Aanya Properties (I) Ltd. ITAT found some other mistakes also in AO's order. ITAT also held that merely because of non-appearance of key management personnel of Aanya Properties (I) ltd., no adverse inference could be drawn against the receipt of preference share capital by doubting the veracity of the same. ITAT has not discussed the issue of identity, creditworthiness and genuineness of ^ company namely Aanya Properties (2) Ltd.. The entire discussion of ITAT order is regarding company named Aanya Properties (1) Ltd.. ITAT has not discussed real issue and argument of AO that creditworthiness of Investor company has not been ITA No.1608/M/2020 13 proven as creditworthiness of ultimate beneficiaries is not proved. The findings of AO that the creditworthiness of Ultimate Beneficiaries was not proven, is not discussed in ITAT order relied upon by assessee. In view of above, assessee's reliance on ITAT's order is without any weight for deciding issue at hand in this appeal. 5.4.6 The Genuineness of credit in Books of Accounts to be proven on facts of each case, this is the crux of principle laid down in Lovely Exports by Delhi High Court in ITA No 953/2006. Also, in that case in internal para 13, Hon'ble High Court has reflected upon pernicious practice of conversions of unaccounted money through masquerade or channels of investment in share capital. The court has distinguished the nature of public limited company where money is raised through Public Issue and the legal regime for Private Placement of capitals by other companies. Since assessee has raised this money through his personal links and not through public issue, the findings of Hon'ble Courts in cases like Lovely Exports are not fully applicable to the issue at hand. The specific comments of Hon'ble Courts, regarding onus on Revenue for getting field enquiry done once the PAN Nos. were provided by assessee, are regarding situations, where public has invested in a company and not in a case, where company has got the investment through its private sources, in Sophia Finance (Internal Para 15) Hon'ble court has fully upheld the right of AO to make any inquiry as to the true nature and source of even share application money. Reliance is also placed on Hon'ble SC decision in Sumati Dayal Vs CIT supple. (2) SCC 453. In view of these overall facts of the case and the failure of assessee to substantiate the creditworthiness of the parties who have invested in the assessee company and the genuineness of the entire transactions, the addition made by assessing officer under section 68 of Rs. 22,69,397/- is upheld and the ground number 4 and 5 of assessee's appeal is also dismissed.” 5. Against the above order, assessee has filed appeal before the ITAT. 6. I have heard both the parties and perused records. Ld. Counsel of the assessee submitted that earlier ld.CIT(A) has passed the order, wherein he has quashed the AO’s order on jurisdictional ground. Now, ld. Counsel submitted that ld.CIT(A) has passed order u/s 154 of the Act, which mandates only rectification of mistake apparent from record. In this order, ld.CIT(A) has held that his earlier order passed quashing the jurisdiction was wrong. Further, he has gone on the decide on the other issues on merits which in the earlier order, he has held to be academic as he has ITA No.1608/M/2020 14 dismissed the validity of assumption of jurisdiction by the AO. Ld. Counsel of the assessee submitted that the ld.CIT(A) has passed the original order, after due consideration of the written submissions placed before him, which ran into 40 pages. A copy of the same in paper book has been also produced before ITAT. He submitted that a catena of case laws from Hon’ble jurisdictional High Court and Hon’ble Supreme Court were referred therein. After consideration the same, ld.CIT(A) has categorically held that legal grounds relating to invalidity of jurisdiction of the AO is allowed in favour of the assessee. Now, ld.CIT(A) has clearly reviewed his earlier order and the same by no stretch of imagination can be said to be rectification of mistake. He further submitted that dehors incriminating material in case of unabated assessment, no addition can be done under the assessment framed u/s. 153A is well settled by Hon’ble Jurisdictional High Court as well as Hon’ble Supreme Court. Hence, even a review of the order of the ld.CIT(A) is not legally correct in this case not to speak of rectification of mistake apparent from the record. Ld. Counsel of the assessee made various submissions as to merits of the case that the issue is squarely covered in favour of the assessee. The submissions of ld.counsel of the assessee are summarized as under:- “Ground No.1 to 8 Addition u/s 68 at Rs.22,69,400/- on account of Share Capital. A.O. Para 6 Page 2 to 8 CIT(A) Para4&5 Page 5 to 13 I. On Merits no addition u/s 68 can be made. A) A.O. at para 6.3 has discussed the reason for addition which is primarily because of addition made in the case of associate company M/s. Luxora Realtors Pvt. Ltd. (LRPL). In fact detailed extract of order of LRPL is reproduced in assessment order to make addition. B) A.O. at para 6.5 has noted that relief granted in the case of associate concern LRPL by CIT(A) is under challenge before ITAT by revenue and issue is not closed. With these observation and without finding any specific fault in the legal evidence placed on record. A.O. has drawn adverse inference in respect to share capital contribution by relying on assessment order of group concern M/s. Luxora Realtors Pvt. Ltd. A.O. has concluded that share capital contribution received by assessee is liable to be taxed u/s 68 of I.T. Act 1961 on inference without bringing any shred of evidence on record and fault in the evidence placed on record. ITA No.1608/M/2020 15 C) The legal evidences placed in respect to contribution of share holder is as under. Documents in case of Aanya Properties (2) Ltd. i) Certificate of incorporation of Aanya Properties (2) Ltd. (P-53) [Vol.-l] ii) Copy of the constitution of Ananya Properties (2) Ltd. iii) Copy of bank statement of assessee reflecting receipt of funds towards share allotted. (P- 51) [Vol.-l] iv) Copy of Foreign Inward Remittance Certificates issued by bank indicating remittance is received towards share capital. (P-52) [Vol.-l] v) Copy of bank statements of Aanya Properties (2) Ltd. reflecting remittance of funds towards share capital. (P-50) [Voi.-l] vi) Copy of financial statements of Aanya Properties (2) Ltd. reflecting such investments made in assesse (P-54 - 83) [Vol.-l] (74) vii) Shareholding Pattern of Aanya Properties (2) Ltd. indicate that entire shareholding of Aanya Properties (2) Ltd. is with another Mauritius based company namely Aanya Holding Ltd. (AHL). (P-114) [Vol.-l] List of name and address of shareholders of Aanya Holding Ltd. who are the ultimate beneficiaries submitted. (P-115-117) [Vol.-l] viii) Form No. 2 for issue of share capital. (P-118-122) (Vol.-l] (122) D) The share capital contribution is in compliance with directives of Reserve Bank of India. Receipt of share capital contribution from non-resident share holder has been accepted on receipt of foreign remittance without inviting any adverse observation by Financial Institutions. On above factual position no addition in respect to share capital contribution can be made by holding the same as unexplained cash credit. E) The assesses has placed legal evidence on record in the course of regular assessment as well as in the fresh assessment proceedings u/s 153A of I.T. Act 1961 and fully discharged its onus to explain cash credit as envisaged u/s 68 of I.T. Act 1961. The assessee has discharged its onus to explain the contribution of share capital by placing legal evidence on record and established identity, creditworthiness and genuineness of share capital contribution received. Addition made by A.O. and upheld by CIT(A) is unjustified and unsustainable. (P- 44- 48)[Vol.-l] (P-123-128)[Vol.-l) F) The decision of Hon'ble CIT(A) 24 has been upheld by Hon'ble ITAT Mumbai Bench C vide judgment dated 19/06/2019 in ITA No.6202/Mum/2016. The issue in dispute is covered in favour of assessee by decision of coordinate bench in the case of associate company of assessee company. Addition made by A.O. and upheld by CIT(A) is thus unjustified and unsustainable. (P-1 to15)[VoI.-ll] (5,6, 13,14) G) In the case of assessee share capital contribution received from share holder M/s. Aanya Properties (2) Ltd. is originated from M/s. Aanya Holding Ltd. In the ITA No.1608/M/2020 16 case of M/s. Luxora Realtors Pvt. Ltd. share holder contribution by M/s. Aanya Properties (1) Ltd had also originated from M/s. Aanya Holding Ltd. Other legal evidence placed on record are also similar to that considered in Asstt. Year 2012-13 in case of M/s. Luxora Realtors Pvt. Ltd. an associate company. H) Proviso to section 68 of IT. Act 1961 is applicable only in respect to share holder being resident of India. Share capital contribution received by assessee company is from non-resident share holder and proviso to section 68 of IT. Act 1961 is inapplicable. I) In respect to share capital contribution from non-resident share holders no addition can be made if the identity of share holder is established. In the case of assessee sufficient legal evidences are placed on record to substantiate identity, creditworthiness and genuineness of share capital contribution by non-resident. J) Reliance on: i) ITAT order in ITA No.6202/Mum/2016 in the case of M/s. Luxora Realtors Pvt. Ltd. vide order dated 19/06/2019.' ii) (2013)356ITR0065(MP) CIT vs. Peoples General Hospital Ltd. iii) Supreme Court order in SLP (Civil) CC 5997/2014 in the case of M/s. Peoples General Hospital Pvt. Ltd. vide order dated.17/04/2014. iv) (2017) 394 ITR 0680 (Bom) CIT vs. Gagandeep Infrastructure Pvt. Ltd. v) (2018) 400 ITR 0439 (Bom) PCIT vs. Paradise Inland Shipping Pvt. Ltd. vi) Supreme Court order in SLP (Civil) No (s). 12644/2018 in the case of M/s. Paradise Inland Shipping Pvt. Ltd. vide order dated.23/04/2018. K) Observation of CIT(A) at para 2 that new information was with A.O. as to ultimate beneficiary of two Mauritius based companies inquiry through FTTR Div. of CBDT. It is submitted that it was not in the case of assessee any inquiry or information was obtained but was in relation to another group company M/s. Luxora Realtors Pvt Ltd. Addition made u/s 68 of IT. Act 1961 in the case of said company has been deleted by CIT(A) in appellate proceedings and said appellate order has been upheld by Hon'ble ITAT Mumbai Bench in the case of associate company. Observation of A.O. and CIT(A) are thus unjustified. L) The addition made on the basis of subsequent information without same having been found in the course of search is contrary to settled position of law by the Hon'ble Jurisdictional High Court. Reliance on: i) Hon'ble Bombay High Court order in ITA No. 1251 of 2016 in the case of M/s. Caprihans India Ltd. vide order dated 04/01/2019. M) CIT(A) has not disputed the identity of the share holder and has also not found any fault in the legal documents being bank statement of share holder and Foreign Inward Remittance Certificate issued by bank. Conclusion of CIT(A) is contrary to the settled position of law in regard to onus to explain the share capital received by assessee company from non-resident. ITA No.1608/M/2020 17 N) The assessee has not received any share application money from M/s. Aanya Properties (2) Ltd. During the year under consideration. Thus addition made by A.O. and confirmed by CIT(A) by invoking provisions of section 68 of IT. Act 1961 is bad in law. Reliance on: i) ITAT order Mumbai Bench, Mumbai in the case of Jagdish construction Ltd. Vide order dated 25/10/2018. II. No incriminating material. O) In the case of assessee regular assessment has been framed u/s 143(3) of IT. Act 1961 on 26/03/2014 accepting loss at Rs.54,36,891/- as shown in return of income. (P-41 to 43) [Vol.-] P) Details of share application money received during the previous year along with certificates of Foreign Inward Remittance and other relevant details submitted before A.O. in regular assessment proceedings. (P-44 to 48) [Vol.-l] Q) A.O, in regular assessment proceedings enquired share capital contribution and assessee submitted reply to explain share capital contribution. A.O. on verification accepted submission of assessee that share capital contribution stands explained. No addition has been made in regular assessment framed in respect to share capital contribution. R) In the case of assessee share capital contribution received has been verified and accepted to be genuine in regular assessment framed u/s 143(3) of IT. Act 1961. It is completed assessment as on date of search and is not abated proceeding. S) In the course of search no incriminating material or evidence was found to discredit the share capital contribution received from non-resident share holders. Observation of A.O. at para 6 it is evident that A.O. on perusal of Balance Sheet has commenced verification and which culminated in making addition u/s 68 of I.T. Act 1961. T) The A.O. in the assessment order has not referred to any incriminating material found during the course of search to make addition u/s 68 of I.T. Act 1961. Hon'ble CIT(A) vide order dated 31/10/2019 rightly deleted addition of assessee. U) The Hon'ble CIT(A) in order u/s 154 dated 13/12/2019 at para 5 page 8 has equated the assessment framed to that of abated assessment to uphold and to reject ground of appeal of the assessee at ground No.2 & 3 challenging addition in absence of any incriminating material to be not in accordance with law. V) It is settled position of law that completed assessment cannot be disturbed in absence of any incriminating material found during the course of search. Addition made by A.O. and upheld by CIT(A) in order u/s 154 not based on any incriminating material found in the course of search is without jurisdiction and is unjustified and unsustainable. W) Reliance on: i) (2015)374 ITR 0645 (Bom.) CIT vs. Continental Warehousing Corporation ii)Hon'ble Bombay High Court order in ITA No. 1251 of 2016 in the case of M/s. Caprihans India Ltd. vide order dated 04/01/2019. iii) (2016) 380 VTR 0573 (Delhi) CIT vs. Kabul Chawla ITA No.1608/M/2020 18 iv) ITAT order in IT(SS) ANo.272/Ahd/2016 & 273/ Ahd/2016 in the case of M/s. Creative Trendz Pvt. Ltd. vide order dated 13/11/2020. v) (2016387ITR0529(Guj.) Pr. CIT vs. Saumya Construction P. Ltd. vi) ITAT order in ITA No.3429/Mum/2019 in the case of Shri Vijayrattan Balkrishan Mittal vide order dated 01/10/2019. vii) ITAT order in ITA No.08/Ahd/2Q17 in the case of The M/s. Samor Properties Pvt. Ltd. vide order dated 08/05/2019. III. No mistake apparent from record. X) A.O. has concluded that share capital contribution received from non-resident share holders M/s. Aanya Properties (2) Ltd. at Rs.22,69,397/- is liable to be assessed u/s 68 of l.T. Act 1961. Y) CIT(A) in her order dated 31/10/2019 at para 5 considered the submission of assessee of more than 800 pages and concluded that in the case of assessee regular assessment is completed u/s 143(3) on 26/03/2014 before the date of search u/s 132(1) of l.T. Act 1961 on 19/03/2015 in which no addition is made u/s 68 of l.T. Act 1961. No incriminating material is found in the search and thus no addition u/s 68 of IT, Act 1961 can be made and thus addition made at Rs22,69,400/- was deleted by Hon'ble CIT(A). Z) Hon"ble CIT(A) in her order relied upon order of CIT(A) and ITAT in group case M/s Luxora Realtors Ltd. for Asstt. Year 2012-13 to consider that no addition can be made at the hands of assessee u/s 68 of IT. Act 1961 at Rs.22,69,400/~. Z-1) CIT(A) on 13/12/2019 passed order u/s 154 wherein grounds of appeal of assessee are dismissed and addition made by A.O. u/s 68 is upheld. Z-2) No mistake apparent from record in the order passed u/s 250 of IT. Act 1961 on 31/10/2019 for which order can be passed u/s 154 of IT. Act 1961. Order u/s 154 of IT. Act 1961 passed by CIT(A) on 13/12/2019 bad in law and deserves to be cancelled. Reliance on: i) 82 ITR 50(SC) T.S. Balram, ITO vs. Volkart Brothers & Ors. Z-3) Order passed by CIT(A) on 13/12/2019 is review of earlier order passed on 31/10/2019 which is impressible. No statutory provision available under provisions of IT. Act 1961 to review appellate order passed. Order passed by CIT(A) thus bad in law and deserves to be cancelled. Z-4) CIT(A) in letter dated 25/11/2019 has observed that information collected from Mauritius through FT & TR division of CBDT was inadvertently missed out and therefore it is proposed to rectify the appeal. The above information was not collected in the case of assessee and is not related to share capital contribution of assessee. In any case there is nothing adverse in the said information which requires consideration (Refer page 4 of assessment order). CIT(A) has not recorded single finding on the basis of such report which requires adverse consideration. Thus entire premise of initiating proceedings u/s 154 are based on no adverse evidence. No mistake apparent of record which requires consideration. Order passed u/s 154 of IT. Act 1961 liable to quashed. ITA No.1608/M/2020 19 Ground No.9 & 10: No set off allowed in respect to loss assessed with Addition made u/s 68 of IT. Act 1961. A.O. Para- 7 & 8 Page- 8 CIT(A) Para-5.5 Page-14 A)Issue covered in favour of assessee by decision of Hon'ble ITAT, Mumbai Bench in the case of assessee in ITA Nos.1293, 1294, 1295 & 1296/Mum/2019 vide order dated 21/04/2020. B)The A.O. has assessed loss at Rs.54.36 lacs for the assessment year under consideration. The loss available wrth assessee for set-off is Rs.54.36 lacs against income assessed if any. C)A.O. followed decision of Hon'ble Gujarat High Court in the case of Fakir Mohmed Haji Hasan reported at 247 ITR 290 (Guj.) for denial of set off of loss against income assessed. D)Decision of Hon'ble Gujarat High Court in the case of Fakir Mohmed Haji Hasan explained/distinguished in subsequent IT . : 5 of same court in the case of Radhe Developers India Ltd. reported at 329 ITR 0001 and Shilpa Dyeing & Printing Mill (P) Ltd. reported at 291 Taxman 279 (Guj.). Noting adverse can be drawn from the decision of Hon'ble Gujarat High Court in the case of Fakir Mohmed Haji Hasan. E) Recent Circular of Board No.11/2019 dated 19/06/2019 permits set-off of loss/depreciation against income assessed u/s 68 to 69C to assessment years prior to Asstt. Year 2017-18. F) Reliance on: i) 219 taxman 279 (Gujarat) CIT-II vs. Shilpa Dyeing & Printing Mills (P) Ltd. ii) (2007) 291 ITR 0258 (Madras) CIT vs. Chensing Ventures iii) ITAT order in ITA No.1972/Ahd/2012 in the case of M/s. K.R. Automobiles vide order dated 03/02/2014. iv) ITAT order in ITA No.1841/Del/2016 in the case of M/s. Godwin Resort & Hotel Pvt. Ltd. vide order dated 14/10/2019. The ratio laid down by aforesaid decisions squarely applies to the facts in the case of assesses. In view of above assesses is eligible for set-off of loss at Rs.5.98 crores against income assessed. G) Once the addition made by A.O. stands deleted in Ground No.1 to 8 there would be no need to adjudicate Ground No.9 & 10 being of academic nature.” 7. Per contra ld. DR relied upon the order of the ld.CIT(A). 8. I have carefully considered the submissions and perused the records. I find that a review of his own order under the garb of rectification of mistake u/s. 154 done by ITA No.1608/M/2020 20 the ld.CIT(A) is complete travesty of appellate proceeding. By no stretch of imagination it can be said that ld.CIT(A) is rectifying a mistake apparent from the record. In the earlier order, ld.CIT(A) has quashed the assessment framed u/s. 153A on a finding that it was a non abated assessment and the addition was dehors any incriminating material found in search. In the present so called rectification order, the ld.CIT(A) has got new found knowledge that there may be a case where subsequent to the search AO may receive or obtain some addition information, which is not emanating from the search and seizure proceeding. Hence, he opined that AO can assume valid jurisdiction. This view of ld.CIT(A) is completely alien to the jurisprudence from Hon’ble Bombay High court and Hon’ble Supreme Court in this regard. I may refer to settled position on assumption of jurisdiction without incriminating material found and seized in case of non-abated assessment as under:- The decision from honourable jurisdictional High Court in Continental Warehousing (supra) is clear and unambiguous. It was clearly held in that case that assessments which are not pending and which have attained finality, addition under section 153(A) cannot be done without reference to incriminating seized material. I may gainfully refer to the relevant order of the honourable High Court as under: "On a plain reading of section 153A, it becomes clear that on initiation of the proceedings under section 153A, it is only the assessment/reassessment proceedings that are pending on the date of conducting search under section 132 or making requisition under I section 132/4 stand abated and not the assessments/reassessments already finalised for those assessment years covered under section 153A. By a Circular No. 8 of 2003, dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending ITA No.1608/M/2020 21 against finalised assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under section 153A, the assessments/reassessments finalised for the assessment years covered under section 153A stand abated cannot be accepted. Similarly on annulment of assessment made under section 153A(1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1)." "Once it is held that the assessment has attained finality, then the Assessing Officer while passing the independent assessment order under section 153A read with section 143(3) could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under section 153A establish that the reliefs granted under the finalised assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. If there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings, the Assessing Officer while passing order under section 153A read with section 143(3) cannot disturb the assessment order." A reading of the above makes it clear that it was expounded that in case of assessments which have attained finality no addition under section 153(A) can be done without seized incrementing material. It may not be out of place here to mention that it is specifically provided in section 153A "that assessment or reassessment if any relating to any relevant assessment year or years referred to in this subsection pending on the date of initiation of search under section 132 or making of requisition under section 132 a as the case may be shall abate." This makes it further abundantly clear that only those assessments which are pending abate. Hence sanguine provisions of the act read with honourable jurisdictional High Court decision as above make it abundantly clear that the assessments which do not abate the assessment and addition under section 153 A without reference to incriminating seized material is not sustainable. ITA No.1608/M/2020 22 The jurisprudence regarding jurisdictional defect in assessment under section 153A /153C without reference to incriminating seized material has also been expounded by honourable Supreme Court in the case of Commissioner of Income Tax vs. Singhad technical education Society in civil appeal No. 11080 of 2017 and others. In this regard the honourable Supreme Court in paragraph 18 of the said order observed that :- In this behalf it was noted by the ITAT that as per provisions of section 153C of the act, incriminating material which was seized had to pertains to assessment years in question and it is an undisputed fact that the documents which were seized did not establish any correlation, document-wise, with these for assessment years since this requirement under section 153C of the act is essential for assessment under the provision it becomes a jurisdictional defect. We find this reasoning to be logical and valid having regard to the provisions of section 153C of the Act." 9. From the above, it is abundantly clear that dehors incriminating material found during the search, no addition is sustainable u/s. 153A of the I.T. Act in case of unabated assessment. It is undisputed that the assessment for present assessment year is non-abated. The earlier assessment order was already duly framed and subsequently pursuant to search fresh notice u/s. 153A was issued. The AO in the assessment order has clearly noted that during the course of search proceedings, it was found that assessee was generating cash by bogus invoices. There is not a whisper about anything found relating to share application money. The issue of share application money was taken up by the AO by mentioning that on perusal of the balance sheet of the assessee, he has found the same. AO further refers that an information was obtained from FT&TR division, Mauritius Revenue authority vide letter dated 14.03.2016. When this is juxtaposed with the date of earlier assessment order i.e. 26.3.2014 and the date of search i.e. 19.3.2015, it is abundantly clear that ITA No.1608/M/2020 23 this is a non-abated asessment and the so called material arose much after search. Hence, there is not an iota of doubt that the material being referred by the AO for making the addition was not found and seized during search. Hence, the jurisdiction of the AO in making the assessment is not legally valid. Hence, the order passed by the ld.CIT(A) as review also is totally unsustainable on merits. 10. Apart from the above, we may gainfully referred to the provision of section 154 of the I.T.Act. Rectification of mistake. 154. (1) With a view to rectifying any mistake apparent from the record an income- tax authority referred to in section 116 may,— (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 200A; (d) amend any intimation under sub-section (1) of section 206CB. (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned— (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee or by the deductor or by the collector, and where the authority concerned is the Commissioner (Appeals), by the Assessing Officer also. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor or the collector, shall not be made under this section unless the authority concerned has given notice to the assessee or the deductor or the collector of its intention so to do and has allowed the assessee or the deductor or the collector a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. (5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor or the collector, the Assessing Officer shall make any refund which may be due to such assessee or the deductor or the collector. ITA No.1608/M/2020 24 (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee or the deductor or the collector, the Assessing Officer shall serve on the assessee or the deductor or the collector, as the case may be a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section 155 or sub-section (4) of section 186 no amendment under this section shall be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. (8) Without prejudice to the provisions of sub-section (7), where an application for amendment under this section is made by the assessee or by the deductor or by the collector on or after the 1st day of June, 2001 to an income-tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,— (a) making the amendment; or (b) refusing to allow the claim. 11. The said provision provides for rectification of mistake apparent from the record. Hon’ble Supreme Court in the case of T.S. Balram, ITO vs. Volkart Brothers & Ors 82 ITR 50(SC) has held that mistakes apparent on record must be obvious and patent mistake. It should not require a long drawn process of reasoning where there may be conceivably be two opinions. The aforesaid exp osition applies on all fours in the present case. Hence, I have no hesitation in holding that this rectification order u/s. 154 passed by ld.CIT(A) is not at all sustainable. Hence, I set aside the same. 12. In the result, the appeal of the assessee is allowed. Pronounced in the open court on 09.03.2022 Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai; Dated : 09.03.2022 Thirumalesh, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) ITA No.1608/M/2020 25 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// ( (( (Assistant Registrar) ITAT, Mumbai