AAA Paper Marketing Ltd., V. Astt. Commissioner of Income Tax, Kanpur

ITA 165/LKW/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3984 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S MINHAS
• Keywords: Search and seizure
• Section: 142(1); 153A; 68; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER J AND SHRI MAHAVIR PRASAD JUDICIAL MEMBER ITA NOS.165 & 166/LKW/2016 ASSESSMENT YEARS 2006-07 & 2010-11 ACIT, CENTRAL CIRCLE-1, 10/503 ALLEN GANJ, KANPUR (UP) 208 001 VS. AAA PAPER MARKETING LTD. 26/6 EAST PATEL NAGAR, NEW DELHI PAN AACCS 4575 K (RESPONDENT) (APPELLANT) SHRI PRAKASH CHAND YADAV, ADVOCATE APPELLANT BY SHRI J.S. MINHAS , DR RESPONDENT BY 26 /0 7 /2016 DATE OF HEARING 20/09/2016 DATE OF PRONOUNCEMENT O R D E R PER MAHAVIR PRASAD, JM. 1. THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE LD. CIT(A)-IV, KANPUR DATED 28.03.2016 FOR THE ASSESSME NT YEARS 2006-07 & 2010- 11. SINCE BOTH THE APPEALS RELATE TO THE SAME ASSES SEE AND IN BOTH THE APPEALS COMMON ISSUE IS INVOLVED EXCEPT THE CHANGE IN FIGUR E. THEREFORE, WE DECIDE TO DISPOSE OF BOTH THESE APPEALS BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BOTH THE PARTIES AGREED THAT WHATEVER VIEWS THIS TRIBUNAL MAY TAKE IN ITA NO. 165/LKW/2016, THE SAME VIEW MAY BE TAKEN IN ITA NO.166/LKW/2016 OF THE ASSESSMENT YEAR 2006-07. 3. THE GROUNDS TAKEN BY THE ASSESSEE IN ITA NO.165/ LKW/2016 OF THE ASSESSMENT YEAR 2006-07 IS REPRODUCED AS UNDER:- 2 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, T HE ORDER PASSED BY THE LD. CIT (APPEAL) IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. THE ACTION OF CIT(A) AFFIRMING THE ASSESSMENT U NDER SECTION 153A IS WRONG IN AS MUCH AS THE SAME IS NOT IN CONS ONANCE WITH THE SETTLED POSITION OF LAW VIS-A-VIS SEARCH CASES. 3. THAT THE LD CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ASSESSMENT IGNORING THE SETTLED POSITION OF LAW THA T PROVISIONS OF SECTION 153A IN A CASE WHERE PROCEEDINGS ARE NOT PE NDING COULD BE APPLIED IN ABSENCE OF ANY INCRIMINATING MATERIAL . 4. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN CONFIRMING THE ADDITIONS TO THE EXTENT OF RS.25,00,000/- MADE BY THE AO WITHOUT APPRECIATING THE DOCUMENTARY EVIDENCES ON R ECORD. 5. THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN LA W IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS DULY ES TABLISHED THE THREE PILLARS OF SECTION 68 OF THE INCOME TAX ACT V IS-A-VIS IDENTITY OF ALL THE SHARE APPLICANTS, GENUINENESS OF THE TRA NSACTIONS AND CREDITWORTHINESS OF THE SHARE-APPLICANTS. 6. THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN L AW BY NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS DULY CO MPLIED WITH ALL THE DETAILS AS REQUIRED AND THAT THE ASSESSEE HAS D ISCHARGED HIS ONUS BY DULY EXPLAINING THE SHARE APPLICATION MONEY . 7. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC TS IN SUSTAINING THE ADDITION OF RS. 25,00,000/- ON ACCOUNT OF UNEXP LAINED CREDIT IN THE ACCOUNT. 8. THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN L AW BY SUSTAINING THE ADDITION EVEN THOUGH NO MATERIAL WAS BOUGHT ON THE SURFACE BY THE LD. AO OR CIT(A) TO FORTIFY THE IMPUGNED ADD ITION. 9. THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, AND BAD IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPLES OF C ONTEMPORARY JURISPRUDENCE. 10. THAT THE APPELLANT CRAVES LEAVE TO ADD/ALTER ANY/ ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPE AL. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A LIMITED COMPANY HAVING BUSINESS OF TRADING OF WASTE PAPER. THE NET PROFIT OF THE BUSINESS FOR THE YEAR UNDER CONSIDERATION WAS 9,14,559.13. A SEARCH U/S 132 OF THE ACT WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE COMPANY O N 22.09.2011. SUBSEQUENTLY NOTICES U/S 143(2) & 142(1) R.W.S. 153 A OF THE ACT WAS ISSUED. 3 DURING THE ASSESSMENT PROCEEDINGS, ASSESSING OFFICE R NOTICED THAT DURING THE YEAR CONSIDERATION THE ASSESSEE COMPANY HAD RECEIVE D SHARE APPLICATION MONEY OF RS.88,00,000/-. ACCORDINGLY, ASSESSEE WAS CALLED UPON TO EXPLAIN THE SAID SHARE APPLICATION MONEY. 5. IT WAS NOTED THAT DURING THE COURSE OF SEARCH & SEIZURE OPERATION, CERTAIN DOCUMENTS WERE SEIZED BY THE SEARCH PARTY A-24 AT T HE OFFICE OF KANATAL RESORTS & SPA PVT. LTD. 26/06, EAST PATEL NAGAR, NEW DELHI. IT WAS ALSO NOTED THAT ON ANALYSIS OF THESE DOCUMENTS IT WAS FOUND THAT THE A SSESSEE HAD RAISED SHARE CAPITAL/SHARE APPLICATION MONEY DURING THE RELEVANT ACCOUNTING PERIOD. THIS APPLICATION MONEY WAS FOUND TO BE INTRODUCED THROUG H VARIOUS COMPANIES. THE ASSESSING OFFICER ADDED RS.88,00,000/- U/S 68 OF TH E ACT TO THE TOTAL INCOME OF THE ASSESSEE. 6. AGGRIEVED ASSESSEE HAS PREFERRED AN APPEAL BEFOR E THE CIT(A). 7. THE RELEVANT OBSERVATION OF THE CIT(A) IS REPROD UCED AS UNDER: IT MAY BE SEEN FROM THE REPORT OF THE A.O. THAT NO STATEMENT OF BANK ACCOUNT HAS BEEN FURNISHED IN RESPECT OF M/S. SATWA NT SINGH SODHI CONSTRUCTION (P) LTD,, NEW DELHI WHICH PREVENTED TH E A.O, FROM COMMENTING ON GENUINENESS OF TRANSACTION, CREDIT WO RTHINESS OF THE SHARE APPLICANT. IN THIS CONTEXT, THE CASES RELIED UPON (SUPRA) ARE DISTINGUISHABLE ON FACTS IN AS MUCH AS DETAILS OF B ANK STATEMENT OF SHARE APPLICANTS WERE NOT FURNISHED BEFORE THE A.O. 5.6 IN RESPECT OF REMAINING APPLICANTS, IT MAY BE S EEN THAT IN THE LIGHT OF SUBMISSION OF APPELLANT AND VARIOUS CASE LAWS RE LIED UPON BY HIM (MENTIONED SUPRA) THE ONUS CAST UPON HIM IS SUFFICI ENTLY DISCHARGED. MOREOVER, THE REPLIES FURNISHED BY THE SHARE APPLIC ANTS DURING ASSESSMENT PROCEEDINGS WERE NOT CONSIDERED AT ALL B Y THE A.O. AT THE TIME OF MAKING ASSESSMENT, ONLY ADDITION IN RESPECT OF M/S. SATWANT SINGH SODHI CONSTRUCTION (P) LTD., NEW DELHI AMOUNT ING TO RS.25,00,000/- IS HEREBY CONFIRMED AND REMAINING AD DITION OF RS.63,00,000/- IS DELETED. 8. SINCE NO INCRIMINATING DOCUMENTS WERE SEIZED OR RECOVERED FROM THE PREMISES OF THE APPELLANT IN RESPECT OF ABOVE SAID ADDITIONS AND ASSESSMENT 4 PROCEEDINGS WERE NOT PENDING WITH THE ASSESSING OFF ICER AND IT IS SUPPORTED BY THE FACTS ITSELF THAT ASSESSEE COMPANY FILED ITS RE TURN OF INCOME ON 25.11.2006 FOR THE ASSESSMENT YEARS 2006-07 AND FOR ASSESSMENT YEARS 2010-11 RETURN OF INCOME WAS FILED ON 25.09.2010 AND PROCEEDED ON 23. 02.2011, WHEREAS SEARCH AND SEIZURE OPERATION TOOK PLACE U/S 132 OF THE ACT ON 25.09.2011 AND IT IS PERTINENT MENTION HERE THAT NO ASSESSMENT FOR BOTH THE YEARS WERE PENDING. THEREFORE, IN VIEW OF THE JUDGMENT OF THE HONBLE D ELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN 380 ITR 573 (DELH I) WE NOTED THAT THESE MATTERS RELATED TO ASSESSMENT YEARS 2006-07 AND 201 0-11. ON THE DATE OF THE SEARCH THE ASSESSMENTS ALREADY STOOD COMPLETED. SIN CE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITION CAN BE MADE TO THE INCOME ALREADY ASSESSED. THEREFORE, BOTH APPEALS OF THE AS SESSEE ARE DECIDED IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. SD/- SD/- [P.K. BANSAL] [MAHAVIR PRASAD] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 20.09.2016 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR