DCIT, New Delhi V. M/s. Aggarwal Entertainment Pvt. Ltd., New Delhi

ITA 2290/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91082 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SYAD NASIN ALLI
• Assessee Lawyers: A K JAIN
• Keywords: Unexplained cash credit; Search and seizure; Additional evidence; Onus to prove; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 133(6); 131; 68; 132; 15

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 2290/DEL/2013 (ASSESSMENT YEAR: 2006 - 07) DCIT CENTRAL CIRCLE - 1, ROOM NO.322, IIRD FLOOR, ARA CENTER, JHANDEWALAN EXTN, NEW DELHI VS AGGARWAL ENTERTAINMENT PVT. LTD., B - 4, VIKAS APARTMENT, 34/1, EAST PUNJABI BAGH, NEW DELHI 26 PAN:AADCA8481H APPELLANT RESPONDENT C.O. NO.140/DEL/2013 ITA NO. 2290/DEL/2013 (ASSESSMENT YEAR: 2006 - 07) AGGARWAL ENTERTAINMENT PVT. LTD., B - 4, VIKAS APARTMENT, 34/1, EAST PUNJABI BAGH, NEW DELHI 26 PAN:AADCA8481H VS DCIT CENTRAL CIRCLE - 1, ROOM NO.322, IIRD FLOOR, ARA CENTER, JHANDEWALAN EXTN, NEW DELHI APPELLANT RESPONDENT APPELLANT BY : SH. SYAD NASIN ALLI CIT DR RESPONDENT BY : SH. A .K. JAIN, CA DATE OF HEARING 05.05.2015 DATE OF PRONOUNCEMENT 29 .05.2015 ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 2 O R D E R PER BENCH: THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 28.2.2013 PASSED BY THE LD. CIT(A) - III, NEW DELHI PERTAINING TO THE ASSESSMENT YEAR 2006 - 07. 2. THE GROUNDS RAISED IN REVENUES APPEAL IN ITA NO. 2290/DEL/2013 (A.Y. 2006 - 07) : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2,20,00,000/ - MADE BY THE AO U/S. 68 OF THE I NCOME T AX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT ) SI NCE THE CREDITWORTHINESS AND GENUINENESS OF THE ENTITLES FROM WHOM SHARE APPLICATION RECEIVED BY THE ASSESSEE REMAINED UNVERIFIABLE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED, IN VIOLATION OF RULE 46A OF THE INCOME TAX RU LES, 1962 BY NOT FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUILD WELL PVT. LTD. 204 TAXMAN 106, WHEREIN IT WAS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT TO GIVE TWO STAGE OPPORTUNITY UNDER RULE 46A I.E. FIRST BEFORE ADM ISSION OF ADDITIONAL EVIDENCE AND SECOND AFTER ADMISSION OF ADDITIONAL EVIDENCES. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFO RE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 3 3. THE GROUNDS RAISED IN ASSESSEES CROSS OBJECTION NO. 140/DEL/2013 (A.Y. 2006 - 07) ARE AS UNDER: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE PROCEEDINGS INITIATED UNDER SECTION 153A OF THE I.T. ACT, WHICH IS BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING FOUND DURING THE COURSE OF SEARCH. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE VALIDATE OF IMPUGNED ASSESSMENT ORDER DATED 28.2.2013 U/S. 1 5 3A OF I.T. ACT AS FRAMED BY THE AO IN RESPECT OF CLOSED ASSESSMENT FOR WHICH NO INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. 3. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FA CTS IN CONFIRMING THE ACTION AND PROCEDURE FOLLOWED BY THE AO DURING THE PROCEEDING U/S. 153 A OF THE I.T. ACT, WHICH IS INVALID IN EYES OF LAW BEING BASED ON INCORRECT POSTULATE THAT SEARCH ASSESSMENT U/S. 153A IS DENOVO IN NATURE WHEREAS THE SAME IS TO BE BASED AND CONFINED TO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH OPERATIONS. 4 . THE FACTS IN BRIEF ARE THAT THE ORIGINAL RETURN IN THIS CASE WAS FILED ON 15.11.2006 DECLARING NET TAXABLE INCOME RS. 2,24,430/ - . THE RETURN WAS PROCESSED U/S. 14 3(1) OF THE ACT. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AGAINST THE UNITY GROUP OF COMPANIES (UNITY GROUP) AND INDIVIDUALS ON 20.8.2009, AND THE ASSESSEE COMPANY WAS ALSO COVERED IN THE SAID SEARCH U/S. 132 OF THE ACT. AFTER THE SEARCH, PROCEEDINGS U/S. 153A OF THE ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 4 ACT WERE INITIATED AND NOTICE U/S. 153A OF THE ACT DATED 25.5.2010 WAS ISSUED TO THE ASSESSEE REQUIRING IT TO FILE THE RETURN OF INCOME. IN RESPONSE THERETO, THE ASSES SEE FILED RETURN OF INCOME ON 11 .6.2 010 DECLARING A NET TAXABLE INCOME OF RS. 2,24,430/ - . IN THIS CASE REGULAR PROCEEDINGS WERE INITIATED AND NOTICE U/S. 143(2) AND 142(1) OF THE ACT, A LONG WITH THE QUESTIONNAIRE WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. 4.1 THE AFORESAID UNITY GROU P IS ENGAGED IN THE REAL ESTATE PROJECTS. THE GROUP IS INVOLVED MAINLY IN BUSINESS OF PROMOTION AND DEVELOPMENT OF DDA APPROVED COMMERCIAL COMPLEXES. DURING THE YEAR, UNDER CONSIDERATION THE COMPANY WAS EXECUTING ONE COMMERCIAL PROJECT FUNCTION MALL WHI CH IS SITUATED AT PRASHANT VIHAR, ROHINI, NEW DELHI. AO HAS NOTICED THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE CAPITAL / SHARE APPLICATION MONEY FROM DIFFERENT ENTITIES. HE OBSERVED THAT SOME OF THE APPLICANTS ARE INDIVIDUALS AS WELL AS GROUP COMP ANIES RELATED TO THE UNITY GROUP ITSELF AND ARE ASSESSED IN THE SAME CIRCLE. T HE AO HIMSELF ACKNOWLEDGES IN PARA 5 OF THE ASSESSMENT ORDER THAT THE SOURCES OF FUND OF THESE PERSONS / COMPANIES HAVE BEEN VERIFIED IN THEIR RESPECTIVE CASES. AND THEN HE P ROCEEDS TO VERIFY THE FRESH SHARE CAPITAL / SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AND FOR THAT SUMMONS WERE ISSUED U/S. 131(1) OF THE ACT, A ND INFORMATION WAS CALLED U/S. 133(6) OF THE ACT. IN THE ASSESSMENT ORDER THE AO OBSERVE S THAT THE R EQUIREMENT OF SECTION 68 OF THE ACT IS THAT THE ONUS TO PROVE THE CREDIT ENTRY IN THE BOOKS OF ACCOUNTS IS PRIMARILY ON THE ASSESSEE AND NOT ON THE DEPARTMENT. ACCORDING TO HIM , T HE ASSESSEE HAS NOT FULLY DISCHARGED ITS ONUS TO PROVE THE CREDITWORTHINESS OF THE CREDITORS COMPANIES. HE FURTHER OBSERVED THAT MERELY ESTABLISHING THE IDENTITY OF THE CREDITOR IS NOT ENOUGH. IN THIS REGARD, HE PLACED RELIANCE O N VARIOUS JUDICIAL PRONOU NCEMENTS AND HELD THAT THE AMOUNT INTRODUCED BY THE ASSESSEE IS UNDER THE GARB OF SHARE APPLICATION MONEY/ SHARE CAPITAL/ SHARE PREMIUM AND THEREFORE TREATED IT AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES WITHIN THE MEANING OF SECTION 68 OF THE AC T AND THE ADDITIONS OF RS. 2,20,00,000/ - WAS ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 5 MADE WHILE COMPLETING THE ASSESSMENT U/S. 153A/145(3) OF THE ACT VIDE HIS ORDER DATED 29.12.2011. 5 . AGAINST THE AFORESAID ORDER OF THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VID E HIS IMPUGNED ORDER DATED 2 8 . 2 . 201 4 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 2,20,00,000/ - MADE BY THE AO U/S. 68 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), NOW THE REVENUE IS IN APPEAL AND THE AS SESSEE HAS PREFERRED A CROSS - OBJECTION BEFORE THE TRIBUNAL. FIRST OF ALL WE WILL DEAL WITH THE REVENUES APPEAL 7. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8. ON THE CONTRARY, LD. AR OF THE ASSESSEE HAS RELIED UPON THE ORDER OF THE LD. CIT(A) AND DEFENDED THAT THE SAME AND DOES NOT WANT US TO INTERFERE IN THE IMPUGNED ORDER. 9 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AVAILABLE ON RECORD. WITH R EGARD TO GROUND NO. 1 RELATING TO ADDITION OF RS. 2,20,00,000/ - MADE BY THE AO U/S 68 OF THE ACT , RAISED IN REVENUES APPEAL IS CONCERNED, WE FIND THAT IN THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD RECEIVED SHARE APPL ICATION/SHARE CAPITAL FROM 20 E NTITIES. AFTER THE SEARCH PROCEEDING ON THE ASSESSEE'S GROUP WAS OVER, DURING THE 153A PROCEEDINGS , WE FIND THAT THE AO SUMMONED THOSE INVESTORS WHO HAD SUBSCRIBED TO SHARE CAPITAL OF THE ASSESSEE COMPANY INVOKING HIS POWERS UNDER SE CTION 133(6 ) /131 TO 12 INVESTORS . OUT OF WHICH , THE 9 ENTITIES RESPONDED AND AO WAS SATISFIED WITH THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS WITH THE ASSESSEE BY THEM AND THERE IS NO DISPUTE WITH REGARD TO THOSE 9 COMPANIES . HOWEVER, IN RESPECT OF 3 E NTITIES NAMELY M/S CAPLIN COMMERCIAL PVT. LTD, M/S RAF STEEL PVT LTD AND ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 6 M/S UNIVERSAL ELECTRIQUE PVT. LTD. WHO HAD GIVEN RS. 2,00,00,000, RS.10,00,000 AND RS. 10,00,000 RESPECTIVELY NO ENQUIRIES COULD BE DONE. ACCORDING TO THE AO IN THE CASE OF THESE THR EE ENTITIES THE REQUISITE NOTICE ISSUED TO THEM WERE RECEIVED BACK WITH THE REMARK 'MOVED/LEFT. THEREAFTER, THE AO MADE THE ADDITION OF RS. 2.20 CRORES . DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) IT WAS STATED BY THE ASSESSEE THAT M/S CAPLIN C OMMERCIAL PVT. LTD HAD FILED ITS REPLY ALONGWITH SUPPORTING DOCUMENT TO THE AO DURING THE 153A PROCEEDING IN ALL THE UNITY GROUP COMPANIES INCLUDING THAT OF THE ASSESSEE CASE, BUT THE SAME WERE NOT CONSIDERED BY THE AO. THE LEARNED CIT(A) AFTER GOING THROUGH THE DOCUMENTS FILED BY THE ASSESSEE BEFORE THE AO AND REMAND REPORT OF AO IN ASSESSEES SISTER CONCERNS WAS PLEASED TO DELETE THE ADDITIONS. 9. 1 WE HAVE GONE THROUGH THE PAPER BOOK FILED BY THE ASSESSEE AND W E TAKE NOTE THAT THE AO MADE THE ADDITION OF RS. 220 LACS U/S. 68 OF THE ACT TOWARDS THE SHARE SUBSCRIPTION MONEY RECEIVED FROM THREE ENTITIES I.E. (I) M/S CAPLIN COMMERCIAL PVT. LTD. (II) M/S RAF STEEL PVT. LTD. AND (III) M/S UNIVERSAL ELECTIQUE PVT. LTD. FOR THE FOLLOWING REASONS: - A) NOTICE U/S. 131/133(6) ISSUED TO AFORESAID THREE ENTITIES, WERE NOT COMPLIED WITH. B) THE AO ASKED THE ASSESSEE TO PRODUCE THE DIRECTOR OF AFORESAID ENTITIES, WHICH ASSESSEE FAIL ED TO PRODUCE. C) COPY OF BANK STATEMENT AND AUDITED BALANCE SHEET WERE NOT FILED D) THE AO WAS NOT SATISFIED WITH THE IDENTITY AND CREDITWORTHINESS OF THE THREE ENTITIES IN QUESTION BASED UPON ITR OF THE AFORESAID ENTITIES FILLED BY THE ASSESSEE . 9. 2 LET US NO W EXAMINE ON MERITS WHETHER THE AOS REASONS FOR MAKING THE ADDITION U/S 68 OF THE ACT CAN BE JUSTIFIED. THE AO ALLEGED THAT COPY OF AUDITED BALANCE SHEET OF THE AFORESAID ENTITIES WERE NOT FILED BY THE A SSESSEE . WE FIND THAT T HE ABOVE ALLEGATION OF THE AO IS AGAINST THE MATERIAL ON RECORD. IN FACT THE A SSESSEE HAD FURNISHED THE COPY OF THE AUDITED BAL ANCE SHEET AND PROFIT & LOSS ACCOUNT AND OTHER DOCUMENTS OF MLS RAF STEEL PVT LTD AND UNIVERSAL ELECTRIQUE ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 7 MOTORS PVT LTD VIDE LETTER DT 12.12.2011 {REFER P.B. PAGE NO 36 TO 38}WHERE AS IN RESPECT OF MLS CAPLIN COMMERCIAL PVT LTD, THE A SSESSEE HAS FURNISHED NOT ONLY COPY OF THE AUDITED BALANCE SHEET BUT ALSO ITS BANK STATEMENT AND OTHER DOCUMENTS VIDE LETTERS DATED 30.11.2011 AND 29.12.2011 {REFER P.B. PAGE NO 89 TO 108 } THEREFORE THE ALLEGATION OF THE AO IS PATENTLY WRONG AND AGAINST THE MATERIAL ON RECORD. IN FACT WE FIND THAT M/ S CAPLIN COMMERCIAL PVT LTD. HAS ALSO FURNISHED THE DETAILS DIRECTLY TO AO ON 29.11.2011 (PB PAGE 81) AND THE RECEIPT OF THE SAME ACKN OWLEDGED BY THE AO ON 14.12.20 11 (PARA 3 OF AO, AND AT PAGE 28 OF CIT(A)) ALONG WITH A COPY OF THE SAME TO THE A SSESSEE. 9. 3 WE TAKE NOTE THAT DURING THE COURSE OF THE RE ASSESSMENT, PROCEEDINGS U/S. 153A, THE ASSESSEE FILED THE FOLLOWING DOCUMENTS VIDE ITS LETTERS DATED 29.12.2011 (PAGE 89 & 90 OF PB) TO PROVE THE IDENTITY AND CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION IN RESPECT OF M/S CAPLIN COMMERCIAL PVT. LTD. : - M / S CAPLIN COMMERCIAL PVT LTD. (PB PAGE N O. 92 TO 12 8) > - SHARE APPLICATION FORMS (PB - PAGE 92 - 94) > - COPY OF CONFIRMATIONS {3 NOS} (PB - PAGE 96 - 98) > - COPY OF ITR FOR THE A.Y . 2004 - 05 (PB PAGE 103) > - COPY OF LETTER DATED 29.12.2011 IN WHICH ASSESSEE INFORMED THE AO THAT NAME AND ADDRESS OF MLS CAPLIN COMMERCIAL PVT LTD HAS CHANGED ALONGWITH FOLLOWING DOCUMENT (PB PAGE 91 ) COPY OF LETTER DATED 26.12.2011 SENT BY MLS CAPLIN COMMERCIAL PVT LTD TO THE APPELLANT COPY OF LETTER DATED 29.11.2011 SENT BY MLS C APLIN COMMERCIAL PVT LTD TO THE AO IN RESPONSE TO NOTICE U/S 133(6 ) :, (PB PAGE 81) COPY OF AUDITED ANNUAL ACCOUNT FOR THE YEAR ENDING 31.3.2006 (PB - PAGE 109 - 128) COPY OF AUDITED ANNUAL ACCOUNT/OR THE YEAR ENDING 31.3.2007 (PB - PAGE 109 - 128) COPY OF LEDGER A/ C OF APPELLANT IN THE AUDITED B OOKS OF ACCOUNT MAINTAINED BY M/ S CAPLIN COMMERCIAL PVT LTD. (PB PAGE 108) COPY OF BANK STATEMENT OF SHARE SUBSCRIBER REFLECTING THE MODE OF PAYMENT OF SHARE SUBSCRIPTION MONEY. (PB - PAGE 181) ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 8 COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN FOR THE A. Y 2006 - 07. (PB PAGE 104) COPY OF ACKNOWLEDGEMENT; OF INCOME TAX RETURN FOR THE A. Y 2007 - 08. (PB PAGE 105) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN FOR THE A. Y 2010 - 11. (PB - PAGE 106) DETAIL OF SOURCE OF INVESTM ENT MODE BY THE M/S CAPLIN COMMERCIAL PVT . LTD. IN THE SHARE CAPITAL OF APPELLANT. (PB PAGE 102) DETAIL OF DIRECTOR OF M/S CAPLIN COMMERCIAL PVT LTD. COPY OF AFFIDAVIT FILED BY THE M/S CAPLIN COMMERCIAL PVT LTD. BEFORE ASSTT COMMISSION OF INCOME TAX . (PB PAGE 107 - 108) 9.4 THE FOLLOWING DOCUMENTS WERE FILED IN RESPECT TO M/ S RAF STEEL PVT LTD (PB PAGE 129 TO 138) ~ SHARE APPLICATION FORMS ~ COPY OF CONFIRMATION ~ COPY OF ITR FOR THE A. Y 2005 - 06 AND AY 06 - 07 ~ COPY OF AUDITED BALANCE SHEET AN D P&L A/C FOR THE A. Y. 2006 - 07. ~ COPY OF PHOTOCOPY OF CHEQUE RECEIVED BY THE A SSESSEE IN RESPECT OF SHARE APP LI C A TION MONEY. 9.5 THE FOLLOWING DOCUMENTS WERE FILED BEFORE THE A.O. IN RESPECT TO M/S UNIVERSAL ELECTRIQUE PVT LTD (PB PAGE 139 TO 147) ~ SHARE APPLICATION FORMS ~ CO N FIR MA TION OF A/C WITH CERTIFICATE OF INVESTMENT. ~. C O PY OF ITR FOR THE A. Y 2005 - 06 ~ COPY OF AUDITED BALANCE SHEET AND P&L AL C FOR THE A. Y. 2006 - 07. 9. 6 THEREAFTER, WE FIND THAT THE ASSESSEE HAS BROUGHT TO THE KNOWLEDGE OF THE A O, THE CHANGE IN ADDRESS OF M/S CAPLIN COMMERCIAL (PB PAGE 89 - 90) AND BEFORE THE LEARNED CIT(A) CHANGED ADDRESS OF THE OTHER TWO LEGAL ENTITIES FROM THE REGISTRAR OF COMPANIES (ROC) AS GIVEN UNDER: - ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 9 OLD ADDRESS TO WHICH AO SENT NOTICE U/S. 131/133(6) PRESENT ADDRESS OF THE ASSESSEE FURNISHED TO AO FROM ROC DOCUMENTS TO PROVE IDENTITY. M/S CAPLIN COMMERCIAL PVT. LTD, 863, MARSHAL HOUSE, 33/1 NS ROAD, KOLKATA - 700001 M/S SAMVIJAY POWER AND ALLIED INDUSTRIES LTD., 3A, HARE STREET, ASHO KA HOUSE, 5 TH FLOOR, ROOM NO. 505, KOLKATA 700001. CERTIFICATE OF INCORPORATION ISSUED BY THE NCT OF DELHI & HARYANA. COMPANY MASTER DATA OBTAINED FROM THE OFFICIAL WEBSITE OF MINISTRY OF CORPORATE AFFAIRS. CERTIFICATE OF CHANGE IN THE NAME ISSUED BY ROC COPY OF LETTER DATED 26.12.2011 OF CAPLIN COMMERCIAL PVT. LTD. ADDRESS TO THE APPELLANT. 9. 7 IT WAS BROUGHT TO THE KNOWLEDGE OF THE AO BY M/S CAPLINE COMMERCIAL BY LETTER DATED 26.12.2011 THE CHANGE IN ADDRESS (PB PAGE 91). FURTHER, A PURPOSE OF THE AFORESAID DOCUMENT WILL REVEAL THAT FROM THE AFORESAID DOCUMENTS, IT IS EVIDENT THAT M/S CAPLIN COMMERCIAL PVT. LTD. WAS INCORPORATED WITH REGISTRAR OF COMPANIES, KOLKATA ON 22.2.1995 HAVING COMPANY IDENTIFICATION NUMBER (CIN) U4012WB1995PLC068579. NAME OF THE COMPANY HAS CHANGED FROM M/S CAPLIN COMMERCIAL PVT. LTD. TO M/S SAMVIJAY POWER AND ALLIED INDUSTRIES LTD. WITH SAME CIN I.E. U4012WB1995PLC068579, PRESENT ADDRESS OF THE COMPANY IS 3A, HARE STREET, ASHOKA HOUSE, 5 TH FLOOR, ROOM NO. 5 05, KOL KATA 700001 (PB PAGE NOS. 91, 265, 266, 267, 268 AND 269 ) ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 10 9. 8 WE TAKE NOTE THAT S INCE THE NAME AND ADDRESS OF THE CAPLIN COMMERCIAL PVT. LTD. HAD UNDERGONE A CHANGE, DUE TO THIS REASON NOTICE U/S 133(6) TO M/ S CAPLIN COMMERCIAL PVT LTD. COULD NOT HAVE BEEN SERVED UP ON IT. HOWEVER, ON BEING POINTED OUT TO THE ASSESSE ABOUT NON - SERVICE OF NOTICE TO CAPLIN COMMERCIAL PVT LTD. VIDE LETTER DT. 30.11.2011 OF THE AO (REFER PB PAGE NO 78 - 80 ), T HE A SSESSEE CONTACTED M/S CAPLIN COMMERCIAL PVT. LTD. COMMUNICATED TO IT THE FACT ABOUT THE SAID NON - SERVICE OF NOTICE AS WELL AS INFORMATION/DETAILS ASKED BY THE A.O. WITH RESPECT TO INVESTMENT MADE BY THEM IN THE SHA R E CAPITAL OF THE A SSESSEE . WE TAKE NOTE THAT M/S CAP LIN COMMER CIAL PVT LTD. HA D FURNISHED THE DESIRED DETAILS DIRECTLY TO THE A O AND FILED ITS REPLY ON 12 . 12 .2011 {P.B. PAGE NO. - 8 1} ALONGWITH A COPY OF THE SAME TO THE A SSESSEE . THE ASSESSEE ALS O F URNISHED THE COPY OF REPLY OF M/S CAPLIN COMMERCIAL PVT LTD. TO THE A O . {REFER P.B.PAGE 89 - 9 0). 9. 9 WHEN THE TWO OTHER ENTITIES I.E. M/S RAAF STEEL AND M/S UNIVERSAL ELECTRIQUE MOTORS D ID NOT RESPOND TO HIS SUMMONS AND WHEN THE NOTICES RETURNED BACK TO HIM, HE COULD HAVE COLLECTED THE ADDRESS FROM ROC, WHICH HE DID NOT DO. NOT ONLY THAT, THE A SSESSEE POINTED OUT TO THE AO, THAT THESE COMPANIES HAD PROVED ITS IDENTITY, CREDITWORTHINESS AND GENUINENESS IN PROCEEDINGS BEFORE HIM/ DEPARTMENT IN EARLIER ASSESSMENT YEARS IN THE CASE OF ASSESSEE/ SISTER CONCERNS IN SCRUTINY ASSESSMENTS U/S. 143(3) OF THE ACT. IN ORDER TO PROVE THE IDENTITY OF THESE COMPANIES THE ASSESSEE HAD FILED THE FOLLOWING DOCUMENTS ALSO : (A) REGISTRATION WITH REGISTRAR OF COMPANIES, NCT OF DELHI AND HARYANA, NEW DELHI. (B) PAN NUMBER (C) AUDITED ANNUAL ACCOUNTS. (D) COPY OF ITR (E) CONFIRMATION LETTER 9. 9 IN ORDER TO PROVE THE CREDITWORTHINESS OF THESE COMPANIES THE ASSESSEE HAD FILED THE FOLLOWING DOCUMENTS O F M/S CAPLIN COMMERCIAL PVT. LTD. ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 11 T HE AUDITED BALANCE SHEET FOR THE FINANCIAL YEAR ENDING ON 31.3.20 06. A PERUSAL OF THE AUDITED BALANCE SHEET OF M/S CAPLIN COMMERCIAL PVT LTD INDICATED THAT THE SAID COMPANY HAS SHAREHO LDER FUNDS OF MORE THAN RS. 156 CR, WHICH IS SUFFICIENT TO PAY RS. 2 CR TO SUBSCRIBE THE SHARES OF THE ASSESSEE COMPANY. WE TAKE NOTE THA T IN THE AUDITED BALANCE SHEET OF M/S CAPIIN COMMERCIAL PVT LTD. INVESTMENT IN THE SHARES OF A SSESSEE COMPANY AS WELL AS IN OTHER GROUP COMPANIES OF THE A SSESSEE HAS BEEN DESCRIBED AND ELABORATED. ON PERUSAL OF THE S CHEDULE A OF THE AFORESAID AUDITED BALANCE SHEET, IT IS SEEN THAT M/S CAPLIN COMMERCIAL PVT LTD. HAS MADE THE INVESTMENT OF RS. 200 LAC IN THE SHARE CAPITAL OF APPELLANT COMPANY. RELEVANT EXTRACTS OF THE AFORESAID SCHEDULE 'A' OF THE AFORESAID AUDITED BALANCE SHE ET ARE REPRODUCED HEREUNDER: - 'CAPLIN COMMERCIAL PVT LTD. - DET A IL OF INVESTMENT FOR THE YEAR ENDED 31.03.2006 SCHEDULE - A EQUITY SHARES(AT COST) AS AT 31.03.2006 QTY. VALUE QTY. AS AT 31.03.2005 VALUE AGGARWAL ENTERTAINMENT PVT. LTD. (PENDING ALLOTMENT) RS. 2,00,00,000/ - NIL M/ S RAF STEEL PVT LTD TO ESTABLISH CREDIT WORTHINESS OF SHARE HOLDER, THE ASSESSEE COMPANY HAS FILED THE BALANCE SHEET AS ON 31/3/2006, OF THE SAID COMPANIES. T HE AUDITED BALANCE SHEET OF THE COMPANIES FOR THE YEAR ENDING ON 31ST MARCH 2006 REVEALS THAT THE SAID COMPANY HAS SHAREHOLDER FUNDS OF MORE THAN RS. 169 LAKHS, WHICH IS SUFFICIENT TO PAY RS. 10 LAKHS TO SUBSCRIBE THE SHARES OF THE ASSESSEE COMPANY. ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 12 M/ S UNIVERSAL ELECTRIQUE MOTORS PVT LTD TO ESTABLISH CREDI T WORTHINESS OF SHARE HOLDER, THE ASSESSEE COMPANY HAS FILED THE AUDITED BALANCE SHEET AS ON 31/3/2006 OF THE SAID COMPANY. T HE AUD ITED BALANCE S H EET OF THE COMPANIES FOR THE YEAR ENDING ON 31 ST MARCH 2006 INDICATE S THAT THE SAID COMPANY HAS SHAREHOLDER FUNDS OF MORE THAN RS. 151 LAKHS, WHICH IS SUFFICIENT TO PAY RS. 10 LAKHS TO SUBSCRIBE THE SHARES OF THE ASSESSEE COMPANY. T HE OPINION OF THE AO THAT THE SHARE SUBSCRIBER HAVE NO CREDITWORTHINESS OR SUFFICIENT MONEY TO SUBSCRIBE IN THE SHARE CAPITAL OF THE ASSESSEE ON THE BASIS OF INCOME DECLA RED BY THEM IN THEIR ITR IS NOT CORRECT . CREDITWORTHINESS OF A PERSON CAN BE VIEWED/ADJUDGED FROM THE 'NET OWNED FUND OF A PERSON RAT H ER THAN TAXABLE INCOME EARNED BY THE PERSON IN A PARTICULAR YEAR. IN THE CASE OF A CORPORATE ENTITY CREDITWORTHINESS OF A COMPANY C A N BE ADJUDGED FROM ITS SHARE CAPITAL AND RESERVE AND SURPLUS , THEREFORE THE OPINION OF THE AO ABOUT THE CREDITWORTHINESS OF THE SHARE SUBSCRIBER WERE WRONG, WHICH IS EVIDENT FROM THE AUDITED BALANCE SHEET OF M/S RAF STEEL PVT LTD INDICATED THAT THE SAID COMPANY HAS SHAREHOLDER FUND OF MORE THAN RS. 169 LAC, WHICH IS SUFFICIENT TO PAY RS. 10 LAC TO SUBSCRIBE THE SHARE CAPITAL O F THE ASSESSEE COMPANY. THE AUDITED BALANCE SHEET OF MLS CAPLIN COMMERCI A L PVT LTD INDICATED THAT THE SAID COMPANY HAS SHAREHOLDER FUND OF MORE THAN RS. 15 6 CRORES WHICH IS MORE THAN SUFFICIENT TO PAY RS. 200 LAC TO SUBSCRIBE IN THE SHARES OF THE ASSESSEE COMPANY . SIMILARLY A CLOSE LOOK AT THE AUDITED BALANCE SHEET OF M/S UNIVERSAL ELECTRIQUE PVT LTD (PRESENTLY KNOWN AS CUBIC BUILDC O N PVT LTD.) INDICATED THAT THE SAID COMPANY HAS SHAREHOL D ER FUNDS OF MORE THAN RS. 150 LAC, WHICH IS SUFFICIENT TO PAY RS. I 0 LAC TO SUBSCRIBE IN THE SHARE CAPITAL OF THE ASSESSEE COMPANY. THE AUTHENTICITY OF THE ACCOUNT OF A COMPANY A S MAINT A INED IN ACCORDANCE WITH P A RT 11 AND III OF SCHEDULE VI OF THE COMPANIES ACT 1956, SCRUTINIZED AND CERTIFIED BY THE STATUTORY AUDITORS, APPROVED BY THE COMPANY IN ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 13 ITS ANNUAL GENERAL MEETING AND FILED BEFORE THE REGISTRAR OF THE COMPANIES WHO HAS A STATUTORY OBLIGATION TO EXAMINE 'AND SATISFY HIMSELF THAT THE ACCOUNT OF THE COMPANIES ARE MAINTAINED IN ACC O RDANCE WITH THE REQUIREMENTS OF C OMPANIES ACT 1956, CANNOT BE LIGHTLY DISCARDED BY AO AS OBSERVED BY THE HONBLE SUPREME COURT OF INDIA IN APOLLO TYRES LTD VS CLT (S C ) 174 I TR 521. 9. 9 IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTIONS . WE TAKE NOTE THAT T HE TRANSACTION ENTERED BY THE ASSESSEE WITH SAID ENTITIES WERE THROUGH PROPER BANKING CHANNEL. THE ASSESSEE COMPANY HAS FILED THE FOLLOWING DOCUMENT TO PRO VE THE GENUINENESS OF THE TRANSACTION A. SHARE APPLICATION FORMS. B. CONFIRMATION FROM THE SHARE SUBSCRIBER ENTITIES. 9.10 ON THE STRENGTH OF THE AFORESAID EVIDENCES / DOCUMENTS FILED BEFORE THE AO, THE ASSESSEE CONTENDED THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS WERE PROVED AND THAT THE ASSESSEE HAS DISCHARGED ITS ONUS U/S 68 OF ACT AND PLEA DED BEFORE THE LD. CIT(A) THAT THE ADDITION MADE BY DISCARDING THE AFORESAID EVIDENCE NEED TO BE DELETED, WHICH THE LD. CIT(A) FOUND JUSTIFIED AND ORDERED DELETION OF THE SAME, WHICH DECISION IS ASSAILED BEFORE US BY THE REVENUE. 9. 1 1 IN THE LIGHT OF THE AFORESAID EVIDENCES ON RECORD LET US EXAMINE THE FINDING OF THE LD. CIT(A). 9. 1 2 WE FIND THAT THE LD. CIT(A) IN ORDER TO VERIFY CREDITWORTHINESS AND IDENTITY OF M/S CAPLIN COMMERCIAL PVT. LTD. HAS TOOK THE ASSISTANCE OF THE REMAND REPORT WHICH WAS CALLED BY HIM IN THE EARLIER APPELLATE PROCEEDINGS IN THE CASE OF ASSESSEES GROUP / SISTER COMPANY NAMELY M/S BASANT PROJECTS ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 14 LTD. FOR ASSESSMENT YEAR 2006 - 07 IN WHICH THE SAID M/S CAPLIN COMMERCIAL P. LTD. HAD GIVEN RS. 1.50 CRORE TO IT I.E. M/S B ASANT PROJECT. T HE LD. CIT(A) HAS TAKEN NOTE ABOUT THE FACT THAT IN THAT CASE THE AO IN HIS REMAND REPORT D T. 14.12.2012 OF M/S BASANT PROJECT, HAS CLEARLY ADMITTED THE IDENTITY , CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WITH M/S CAPLIN COMMERCI AL P LTD. WITH THE SAID COMPANY ( I.E. M/S BASANT PROJECT, SISTER CONCERN OF THE ASSESSEE). THE LD. CIT(A) HAS REPRODUCED THE SAID REMAND REPORT OF THE AO WHICH IS REPRODUCED AGAIN FOR THE SAKE OF CONVENIENCE THAT THE REQUISITE DOCUMENTS HAS BEEN FIL ED BY THE CAPLIN COMMERCIAL PVT. LTD. & FROM THE EXAMINATION OF THE DOCUMENT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTION WITH CAPLIN COMMERCIAL P. LTD. STANDS ESTABLISHED' . IN THE LIGHT OF THE SAID FACT, L D. CIT(A) VIDE APPELLATE ORDER DATED 29.1.2013 OF BASANT PROJECTS LTD. (ASSESSEES GROUP COMPANY) FOR ASSTT. YEAR 2006 - 07, HAS HELD THAT THE TRANSACTION OF SHARE APPLICATION MONEY RECEIVED FROM M/S CAPLIN COMMERCIAL P LTD. IS GENUINE AND THEIR IDENTITY AND CREDITWORTHINESS STOOD ESTABLISHED IN BOTH CASES. 9. 1 3 LD. CIT(A) HAS OBSERVED THAT IN THE YEAR UNDER CONSIDERATION I.E. AY 2006 - 07 THE ASSESSEE HAS RECEIVED RS. 2,00,00,000 AS SHARE APPLICATION MONEY AND THE SAME HAS BEEN DULY REFLECTED AS 'INVES TMENT' IN THE BALANCE SHEET OF M/S CAPLIN COMMERCIAL P. LTD. THE LD. CIT(A) TOOK NOTE OF THE FACT THAT IF IN THE YEAR UNDER CONSIDERATION THE NET WORTH OF M/S CAPLIN COMMERCIAL P. LTD. IS MORE THAN RS. 15 6 CRORE (WHICH IS MISTAKENLY TYPED IN LD. CIT(A)S ORDER AS RS. 15.5 CRORES) , THEREFORE RELYING ON HIS OWN ORDER DATED 29.01.2013 FOR ASSESSMENT YEAR 2006 - 07 IN ASSESSEE'S GROUP COMPANY NAMELY M/S BASANT PROJECT LTD., WE FIND THAT LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED RS. 2 CRORES. ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 15 9. 1 4 COMING TO TH E OTHER 2 ENTITIES NAMELY M/S RAF STEEL PVT LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD, THE LD. CIT(A) TAKE NOTE THAT THE AO IN HIS ASSESSMEN T ORDER HAS OBSERVED THAT NO ENQUIRIES COULD BE DONE BECAUSE NOTICE S SENT TO THEM WERE NOT COMPLIED WITH. HOWEVER, THE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE AO ACKNOWLEDGES IN PARA 5.4(I) OF THE ASSESSMENT ORDER THAT CONFIRMATIONS IN RESPECT OF M/S RAF STEEL PVT. LTD. AND ITR OF A.Y. 2005 - 06 COPY WAS RECEIVED BY HIM , AND IN PARA 5.4 (III) ALSO THE AO HAS STATED THAT M/S UNIVERSAL ELECTRIQUE MOTORS PVT. LTD. HAS ALSO FILED CONFIRMATIONS AND FILED ITR FOR AY 2005 - 06 BEFORE HIM. IT WAS NOTICED BY THE LD. CIT(A) THAT DURING THE SEARCH PROCEEDINGS NO INCRIMINATING DOCUME NTS/EVIDENCES HAVE BEEN UNEARTHED WHICH INDICATED OR POINTED TO THE EFFECT THAT THE SHAREHOLDERS NAMELY THESE TWO COMPANIES M/S RAF STEEL PVT LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD ARE DUMMY ENTITIES OR ENGAGED IN ACCOMMODATION ENTRY BUSINESS OR T HEIR CREDITWORTHINESS IS DOUBTFUL OR TRANSACTION WITH THEM IS NOT A GENUINE. 9. 1 5 THE LD. CIT(A) HAS ALSO TAKEN NOTE THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 147/143(3) OF M/S NORTH DELHI PROJECTS PVT LTD (A SISTER CONCERN OF ASSESSEE) FOR THE ASSESSMENT YEAR 2004 - 05, ALL THE SHAREHOLDERS INCLUDING M/S RAF STEEL PVT LTD AND UNIVERSAL ELECTRIQUE MOTORS PVT LTD. HAVE FILED ITS REPLIES TO NOTICE UNDER SECTION 133(6) AND VARIOUS DOCUMENTS WERE ALSO FILED BEFORE THE A O , TO PROVE ITS CREDITW ORTHINESS AND IDENTITY AND GENUINENESS OF THE TRANSACTIONS AND THAT WERE DULY ACCEPTED BY THE DEPARTMENT. SIMILARLY IN THE ASSESSEE'S OWN ASSESSMENT PROCEEDING S FOR THE ASSESSMENT YEAR 2005 - 06 ALL THE CORPORATE SHAREHOLDERS INCLUDING M/S RAF STEEL PVT LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD. HAVE FILED THE REQUISITE DETAILS BEFORE THE A O IN RESPONSE TO NOTICES UNDER SECTION 133(6) IN ORDER TO PROVE THEIR CREDITWORTHINESS AND IDENTITY AND GENUINENESS OF THE TRANSACTIONS, AND THE SAM E WERE DULY ACCEPTED BY THE DEPARTMENT. THEREFORE, THE LD. CIT(A) RIGHTLY OPINED THAT JUST BECAUSE IN THE PROCEEDINGS UNDER ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 16 SECTION 153A, NOTICE ISSUED BY THE DEPARTMENT UNDER SECTION 131 COULD NOT BE COMPLIED WITH BY THESE TWO COMPANIES , THE A O COULD C ONCLUDE THAT MONEY RECEIVED FROM M/S RAF STEEL PVT. LTD. AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT. LTD. ARE UNEXPLAINED CREDIT. T HE LD. CIT(A) TOOK NOTE OF THE FACT THAT THE AO HAD ENOUGH POWER BESTOWED ON HIM BY THE ACT TO ENSURE THE ATTENDANCE OF THESE COMPANIES DIRECTORS AND LD. CIT(A) FOUND THAT NOTHING HAS BEEN DONE ON THIS ACCOUNT BY THE AO. 9. 1 6 THE LD. CIT(A) HAS RIGHTLY OBSERVED THA T THE AO ERRED IN MAKING THE ADDITION WITHOUT TAKING INTO CONSIDERATION THE EVIDENCES FILED IN THE EARLIER ORIGI NAL PROCEEDING UNDER SECTION 147/143(3) OF M/S NORTH DELHI PROJECTS PVT LTD FOR THE ASSESSMENT YEAR 2004 - 05 AND ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06 WHICH WERE ALREADY AVAILABLE WITH THE DEPARTMENT ; AND IN THE ABSENCE OF THE FACT THAT NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND DURING SEARCH TO SUGGEST THAT TRANSACTION WITH M/S RAF STEEL PVT . LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT . LTD ARE BOGUS OR OF A DOUBTFUL NATURE , THE ADDITION WAS HELD TO BE BAD BY THE LD. CIT(A) . T HE LD. CIT(A) HAS ALSO TAKEN NOTE OF THE FACT THAT THE AO HAD THE PAN NUMBER OF M/S RAF STEEL PVT. LTD. AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD. AVAILABLE WITH HIM AND IF THE NOTICE WAS NOT COMPLIED WITH, FOR WANT OF CHANGE D ADDRESS, HE COULD HAVE VERY WELL SENT THE NOTICE S AT THE NEW ADDRESSES COLLECTED FROM THE BANKS WHERE THE ASSESSEE HAS ACCOUNTS OR IN THE ALTERNATE COULD HAVE FOUND THEIR EXISTENCE FROM MINISTRY OF CORPORATE AFFAIR'S WEBSITE. 9. 1 7 LD. CIT(A) FURTHER O BSERV ES THAT THE A O IN HIS REASSESSMENT ORDER U/S. 153A HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE CONFIRMATION FILED BY THE INVESTOR COMPANY WAS NOT GENUINE. LD. CIT(A), RIGHTLY NOTES THAT JUST BECAUSE THE NOTICE SENT UNDER SECTION 131, WAS U NCOMPLIED WITH, CANNOT BE THE ONLY GROUND FOR DRAWING ADVERSE INFERENCE WITHOUT APPRECIATING THE OTHER DOCUMENTS VIZ. ITR, BALANCE SHEET ETC. WHICH WERE BEFORE HIM. THE LD. ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 17 CIT(A) HAS FURTHER TAKEN NOTE OF AN IMPORTANT FACT, THAT IS THE SHARES UNDER QUEST ION HAS BEEN SOLD BY THESE COMPANIES IN THE YEAR 2008, AND THESE COMPANIES NO LONGER HOLDS ANY SHARE OF THE ASSESSEE COMPANY. SO THE LD. CIT(A) IS CORRECT IN OBSERVING THAT IT IS DIFFICULT TO KEEP A TRAC K OF ALL THE SHAREHOLDERS TO WHOM ALL THE SHARES HAVE BEEN ISSUED WHICH THEY HAVE IN TURN SOLD LATER . S O IN SUCH A SCENARIO , TO KNOW THE ADDRESSES OF ALL THE SHARE HOLDERS AND THEIR LAST ADDRESS IN C A SE OF CHANGES TO IT IS VERY DIFFICULT. LD. CIT(A) HAS RIGHTLY NOTED THAT IF DUE TO PASSAGE OF LONG TIME , THE ASSESSEE COMPANY WAS NOT HAVING A TRACK OF THOSE SHARE SUBSCRIBERS/ PERSONS, OR IF DUE TO LONG PASSAGE OF TIME THE ADDRESSES OF SHARE APPLICANTS HAVE CHANGED, IT CANNOT BE A GROUND FOR DRAWING ADVERSE INFERENCE AGAINST THE ASSESSEE, AS HA VING BEEN D RAWN BY A. O . IN THIS CASE TO MAKE THE ADDITION U/S. 68 OF THE ACT. 9.1 8 LD. CIT(A) HAS RELIED ON THE LEGAL MAXIM LEX NON COJIT AD IMPOSSIBILIA - WHICH MEANS THE LAW DOES NOT COMPEL A MAN TO DO THAT WHICH HE CANNOT POSSIBLY PERFORM . IN THIS REGARD, HE HAS MADE REFERENCE AND RELIED ON THE JUDGMENT BY HONBLE SUPREME COURT IN COCHIN STATE POWER & LIGHT CORPORATION LTD. V. STATE OF KERALA [AIR 1965 SC 1688, 1691]; VINOD KRISHNA KAUL V. UNION OF INDIA [JT 1995(9) SC 205, 208]; ATTIQ - UR - REHMAN V. MUNICIP AL CORPORATION OF DELHI [JT 1996 (2) SC 670, 678]; MANOHAR JOSHI V. NITIN BHAURAO PATIL [(1996) 1 SCC 169, 179]; LIFE INSURANCE CORPORATION OF INDIA V. CIT[(1996) 219 ITR 410, 418 (SC)]. 9. 19 LD. CIT(A) TOOK NOTE OF THE FACT THAT THE ASSESSING OFFICER WAS AWARE OF THE PARTICULARS OF BANK ACCOUNTS OF SHAREHOLDERS FROM WHICH THESE COMPANIES MADE THE INVESTMENT AND THE ASSESSING OFFICER COULD HAVE VERIFIED THE SAME BY MAKING INQUIRIES FROM BANK IF HE WANTED TO, BUT HE HAS CHOSEN NOT TO DO. SO IT WAS NOT JUSTI FIED TO MAKE THE ADDITION. THE LD. CIT(A) HAS TAKEN NOTE THAT NO INCRIMINATING DOCUMENT/EVIDENCE IS AVAILABLE OR NEW FACTS HAVE EMERGED DURING ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 18 THE SEARCH PROCEEDINGS WHICH SUGGESTS THAT THE CREDITWORTHINESS OR GENUINENESS OF TR ANSACTIONS, WITH THE SAID ENT ITIES ARE DOUBTFUL. 9. 20 T HE LD. CIT(A) HAS RELIED ON THE JUDGMENT OF THE JURISDICTION AL DELHI HIGH COURT IN THE CASE OF CIT VS. DW A RKA DHISH FINANCIAL SERVICES PVT. LTD. IN ITA NO. 911/2010 VIDE ITS ORDER DATED 2/8/2010 IN WHICH IT WAS HELD AS UNDER: - . WHERE THE ASSESSEE HAS FURNISHED VARIOUS DOCUMENTARY EVIDENCES THE ASSESSING OFFICER CANNOT MAKE THE ADDITIONS MERELY ON THE GROUND THAT AS PER THE INSPECTOR REPORT NOBODY EXISTED AT THE GIVEN ADDRESS.. (QUOTE) 'THOUGH IN SECTION 68 PROCEEDINGS, THE INITIAL BURDEN OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE IDENTITY OF THE CREDITORS / SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER PAN SHOWS THE GENUINENESS OF TRANSACTION BY SHOWING MONEY IN HIS BOO KS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE, THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS / SHARE APPLICANTS COULD NOT BE FOUND AT THE ADDRESS GIVEN, IT WOULD NOT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68.ONE MUST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOVER, IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE 'SOURCE OF SOURCE' (UN QUOTE) 9. 2 1 LD. CI T (A) HAS TAKEN NOTE OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF CIT VS. LOVELY EXPORT 299 ITR 268 (S C ) WHICH HAS CONFIRMED THE ORDER OF THE DELHI HIGH COURT. IT HAS BEEN HELD BY THE HON'BLE COURT THAT ONCE THE IDENTI T Y OF THE SHARE HOLDERS HAVE BEEN ESTABLISH ED, EVEN IF THERE IS A CASE OF BOGUS SHARE CAPITAL, IT CANNOT BE ADDED IN THE HANDS OF THE COMPANY UNLESS ANY ADVERSE EVIDENCE IS NOT ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS PROVIDED ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 19 EVIDENCE IN THE FORM OF PAN, ROC DETAILS, COPY OF IT RETURN FILE D AND COPY OF CONFIRMATION AND AFFIDAVIT TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. 9. 2 2 LD. CIT(A) HAS NOTED THAT THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE INFORMATION FILED BY THE ASSESSEE IS NOT GENUINE. FURTHER HE HAS RIGHT LY NOTED THAT AO HAS NOT BROUGHT ANY MATERIAL ADVERSE ON RECORD TO ESTABLISH THAT THE MONEY RECEIVED FROM M/S RAF STEEL PVT LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD REPRESENTS ASSESSEE'S OWN UNDISCLOSED INCOME. 9. 2 3 THUS, IN VIEW OF THE FACTUAL POS ITION AS WELL AS THE JUDICIAL PRONOUNCEMENT ON THE SUBJECT, DISCUSSED ABOVE, LD. CIT(A) HAS RIGHTLY HELD THAT THE ASSESSEE HAS DISCHARGED THE INITIAL ONUS OF ESTABLISHING THE BONA - FIDES OF THE TRANSACTIONS AND THE A O WAS NOT JUSTIFIED IN IGNORING VARIOUS EVIDENCES PRODUCED BY THE ASSESSEE AND WHICH WERE AVAILABLE BEFORE HIM ON RECORD OF THE DEPARTMENT ITSELF IN REASSESSMENT PROCEEDINGS OF NORTH DELHI PROJECTS PVT LTD FOR THE A.Y 2004 - 05 AND IN ASSESSEES OWN CASE FOR AY 2005 - 06 AS STA T ED BEFORE IN PARA 9. 16 AND WHEN NO INCRIMINATING DOCUMENTS/ EVIDENCE IS FOUND DURING THE SEARCH TO SUGGEST THAT THE M/S RAF STEEL PVT LTD AND M/S UNIVERSAL ELECTRIQUE MOTORS PVT LTD ARE SHAM ENTITIES AND WHEN ITS RESPECTIVE BALANCE SHEET SPEAKS OTHERWISE. 9. 2 4 FURTHER IT IS OBSERVED BY THE LD. CIT(A) THAT THE AO HAS ACCEPTED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TH E SE COMPANIES IN FOLLOWING ASSESSMENTS: - A) M/S UNIVERSAL ELECTRIQUE MOTORS P. LTD CREDITWORTHINESS/GENUINENESS OF INVESTMENT OF RS. 10,00,000 MADE B Y UNIVERSAL ELECTRIQUE MOTORS P. LTD IN ANOTHER ASSESSEE'S GROUP COMPANY I.E. UNITY PROJECT P. LTD. IN ASSESSMENT YEAR 2005 - 06 AND RS. 3,00,000 IN AGGARWAL PLAZA PVT LTD. IN ASSESSMENT YEAR 2006 - 07 AND RS. 16,00,000 IN AGGARWAL ENTERTAINMENTS P. LTD. IN AS SESSMENT YEAR 2005 - 06 EVEN IN THEIR ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3). ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 20 B) M/S RAF STEEL PVT LTD CREDITWORTHINESS/GENUINENESS OF INVESTMENT OF RS. 5,00,000 MADE BY RAF STEEL PVT LTD IN ANOTHER ASSESSEE'S GROUP COMPANY I.E. UNITY PROJECT P. LTD. IN ASSESSMENT YEAR 2005 - 06 AND RS. 5,00,000 IN AGGARWAI PLAZA PVT LTD. IN ASSESSMENT YEAR 2006 - 07, RS. 15,00,000 IN AGGARWAL ENTERTAINMENTS P. LTD. IN ASSESSMENT YEAR 2005 - 06 AND RS. 20,00,000 IN BASANT PROJECTS PVT LTD IN ASSESSMENT YEAR 2004 - 05 , ALL IN THEIR ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3). 9.2 5 IN THE AFORESAID FACTS AND CIRCUMSTANCES, THE LD. CIT(A) RIGHTLY HELD THAT THE A O WAS NOT JUSTIFIED IN TREATING THE AMOUNT OF SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE COMP ANY AS ITS UNDISCLOSED INCOME BECAUSE THERE WAS NO MATERIAL IN THE HANDS OF THE AO WHICH WAS COLLECTED DURING THE SEARCH/ ENQUIRY CONDUCTED BY HIM. THEREFORE, LD. CIT(A), HAS RIGHTLY DELETED THE ADDITION OF RS 2,20,00,000 MADE UNDER SECTION 68 OF THE ACT . 9.2 6 WE TAKE NOTE THAT I N THE CASE OF CIT VS. GANGESHWARI METAL P.LTD. IN ITA NO. 597 / 2012 JUDGEMENT DATED 21.1.2013, THE HON'BLE HIGH COURT AFTER CONSIDERING THE DECISIONS IN THE CASE OF NOVA PROMOTERS AND FINLEASE PVT. LTD. 342 ITR 169 AND JUDGEMENT IN THE CASE OF CIT VS. LOVELY EXPORTS (SUPRA) HELD AS FOLLOWS: - AS CAN BE SEEN FROM THE ABOVE EXTRACT, TWO TYPES OF CASES HAVE BEEN INDICATED. ONE IN WHICH THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHICH IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER 'SITS BACK WITH FOLDED HANDS' TILL THE ASSESSE E EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN HIS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRESUMPTIONS. THE PRESENT CASE FALLS IN THE LATTER CATEGORY. HERE THE ASSESSING OFFICER AFTER NOTING THE FACTS, MERELY REJECTED THE SAME. THIS WOULD BE APPARENT FROM THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO THE FOLLOWING EFFECT: - ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 21 ''INVESTIGATION MADE BY THE INVESTIGATION WING OF THE DEPARTMENT CLEARLY SHOWED THAT THIS WAS NOTHING BUT A SHAM TRANSACTION OF ACCOMMODAT ION ENTRY. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE SAID AMOUNT OF RS.1,11,50,000/ - MAY NOT BE ADDED TO ITS INCOME. IN RESPONSE, THE ASSESSEE HAS SUBMITTED THAT THERE IS NO SUCH CREDIT IN THE BOOKS OF THE ASSESSEE. RATHER, THE ASSESSEE COMPANY HAS R ECEIVED THE SHARE APPLICATION MONEY FOR ALLOTMENT OF ITS SHARE. IT WAS STATED THAT THE ACTUAL AMOUNT RECEIVED WAS RS.55,50,000/ - AND NOT RS.1,11,50,000/ - AS MENTIONED IN THE NOTICE. THE ASSESSEE HAS FURNISHED DETAILS OF SUCH RECEIPTS AND THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE AMOUNT IS FOUND CORRECT. AS SUCH THE UNEXPLAINED AMOUNT IS TO BE TAKEN AT RS.55,50,000/ - . THE ASSESSEE HAS FURTHER TRIES TO EXPLAIN THE SOURCE OF THIS AMOUNT OF RS.55,50,000/ - BY FURNISHING COPIES OF S HARE APPLICATION MONEY, BALANCE SHEET ETC. OF THE PARTIES MENTIONED ABOVE AND ASSERTED THAT THE QUESTION OF ADDITION IN THE INCOME OF THE ASSESSEE DOES NOT ARISE. THIS EXPLANATION OF THE ASSESSEE HAS BEEN DULY CONSIDERED AND FOUND NOT ACCEPTABLE. THIS ENTRY REMAINS UNEXPLAINED IN THE HANDS OF THE ASSESSEE AS HAS BEEN ARRIVED BY THE INVESTIGATION WING OF THE DEPARTMENT. AS SUCH ENTRIES OF RS.5 5, 50 , 000/ - RECEIVED BY THE ASSESSEE ARE TREATED AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE AND ADDED TO ITS INCOME. SINCE I A M SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME/ PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE BEING INITIATED SEPARATELY. THE FACTS OF NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) FALL IN THE FORMER CATEGORY AND THAT IS WHY THIS COURT DECIDED IN FAVOUR OF THE REVENUE IN THAT CASE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE AND FALL IN THE SECOND CATEGORY AND ARE MORE IN LINE WITH FACTS OF LOVELY EXPORTS (P) LTD. (SUPRA). THERE WAS A CLEAR LACK OF I NQUIRY ON THE PART OF THE ASSESSING OFFICER ONCE THE ASSESSEE HAD FURNISHED ALL THE MATERIAL WHICH WE HAVE ALREADY REFERRED TO ABOVE. IN SUCH AN EVENTUALITY NO ADDITION CAN BE MADE UNDER SECTION 68 OF THE INCOME TAX ACT 1961. CONSEQUENTLY, THE QUESTION I S ANSWERED IN THE NEGATIVE. THE DECISION OF THE TRIBUNAL IS CORRECT IN LAW 9.2 7 THE CASE ON HAND CLEARLY FALLS IN THE CATEGORY WHERE THERE IS LACK OF ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 22 ENQUIRY ON THE PART OF THE A. O. AS IN THE CASE OF GANJESHWARI METALS (SUPRA). IN THE CASE OF FINLEASE PVT LTD. 342 ITR 169 (SUPRA) IN ITA 232/2012 JUDGMENT DT. 22.11.2012 AT PARA 6 TO 8/ IT WAS HELD AS FOLLOWS. '6. THIS COURT HAS CONSIDERED THE SUBMISSIONS OF THE PARTIES. IN THIS CASE THE DISCUSSION BY THE COMMISSIONER OF INCOME TAX (APPEALS) WOULD REVEAL THAT THE ASSESSEE HAS FILED DOCUMENTS INCLUDING CERTIFIED COPIES ISSUED BY THE ROC IN RELATION TO THE SHARE APPLICATION AFFIDAVITS OF THE DIRECTORS, FORM 2 FILED WITH THE ROC BY SUCH APPLICANTS CONFIRMATIONS BY THE APPLICANT FOR COMPANY'S SHARES, CERTIFICATES BY AUDITORS ETC. UNFORTUNATELY, THE ASSESSING OFFICER CHOSE TO BASE HIMSELF MERELY ON THE GENERAL INFERENCE TO BE DRAWN FROM THE READING OF THE INVESTIGATION REPORT AND THE STATEMENT OF MR. MAHES H GARG. TO ELEVATE THE INFEREN CE WHICH CAN BE DRAWN ON THE BASIS OF READING OF SUCH MATERIAL INTO JUDICIAL CONCLUSIONS WOULD BE IMPROPER, MORE SO WHEN THE ASSESSEE PRODUCED MATERIAL. THE LEAST THAT THE ASSESSING OFFICER OUGHT TO HAVE DONE WAS TO ENQUIRE INTO THE MATTER BY, IF NECESSARY , INVOKING HIS POWERS UNDER SECTION 131 SUMMONING THE SHARE APPLICANTS OR DIRECTORS. NO EFFORT WAS MADE IN THAT REGARD. IN THE ABSENCE OF ANY SUCH FINDING THAT THE MATERIAL DISCLOSED WAS UNTRUSTWORTHY OR LACKED CREDIBILITY THE ASSESSING OFFICER MERELY CONC LUDED ON THE BASIS OF ENQUIRY REPORT, WHICH COLLECTED CERTAIN FACTS AND THE STATEMENTS OF MR.MAHESH GARG THAT THE INCOME SOUGHT TO BE ADDED FELL WITHIN THE DESCRIPTION OFS.68 OF THE INCOME TAX ACT 1961. HAVING REGARD TO THE ENTIRETY OF FACTS AND CIRCUMST ANCES, THE COURT IS SATISFIED THAT THE FINDING OF THE TRIBUNAL IN THIS CASE ACCORDS WITH THE RATIO OF THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS (SUPRA). THE DECISION IN THIS CASE IS BASED ON THE PECULIAR FACTS WHICH ATTRACT THE RATIO OF LOVELY EXPORTS (SUPRA). WHERE THE ASSESSEE ADDUCES EVIDENCE IN SUPPORT OF THE SHARE APPLICATION MONIES, IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE IT AND REJECT IT ON T ENABLE GROUNDS. IN CASE HE WISHES TO RELY ON THE REPORT OF THE INVESTIGATION AUTHORITIES, SOME MEANINGFUL ENQUIRY OUGHT TO BE CONDUCTED BY HIM TO ESTABLISH A LINK BETWEEN THE ASSESSEE AND THE ALLEGED HAWALA OPERATORS, SUCH A LINK WAS SHOWN TO BE PRESENT IN THE CASE OF NOVA PROMOTERS & FINLEASE (P) LTD. (SUPRA) RELIED UPON BY THE REVENUE. WE ARE THEREFORE NOT TO BE UNDERSTOOD TO CONVEY THAT IN ALL CASES OF ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 23 SHARE CAPITAL ADDED UNDER SECTION 68, THE RATIO OF LOVELY EXPORTS (SUPRA) IS ATTRACTED, IRRESPECTIVE O F THE FACTS, EVIDENCE AND MATERIAL. ' 9.2 8 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE AO, HENCE, WE UPHOLD THE SAME AND REJECT THE GROUND NO. 1 ACCORDINGLY. 10. WITH REGARD T O GROUND NO. 2 RELATING TO VIOLATION OF RULE 46A OF THE I NCOME TAX RULES, 1962 (HEREINAFTER THE RULES) IS CONCERNED, WE FIND THAT THE LD. CIT(A) HAS CLEARLY MENTIONED IN PARA NO. 9.1.1 AT PAGE NO. 30 OF THE IMPUGNED ORDER DATED 28.2.2013 THAT IN ORDER TO VERIFY THE CONTENTION OF THE ASSESSEE AS TO THE FACT THAT THESE 3 ENTITIES HAVE PROVED THEIR IDENTITY, CREDITWORTHINESS AND GENUINENESS BEFORE THE DEPARTMENT SEVERAL TIMES BEFORE THE SAID APPELLATE PROCEEDING BEFORE HIM , THE LD. CIT(A) LOOKED INTO THE REMAND REPORT OF THE AO WHICH WAS CALLED BY HIS OFFICE DURING THE APPELLATE PROCEEDINGS IN THE CASE OF THE ASSESSEES GROUP/ SISTER COMPANY NAMELY BASANT PROJECTS LTD., FOR THE ASSTT. YEAR 2006 - 07 WHICH WAS ON RECORD OF THE DEPARTMENT IN PUBLIC DOMAIN , IN WHICH M/S CAPLIN COMMERCIAL P LTD. HAS GIVEN RS. 1.50 CRORE TO M/S BASANT PROJECT . IN THAT REMAND REPORT DATED 14.12 . 2012 FILED BY THE AO DURING THE APPELLATE PROCEEDINGS OF BASANT PROJECTS LTD. (A.Y. 2006 - 07) , THE AO HAS ADMITTED THE ID ENTITY AND CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WITH M/S CAPLIN COMMERCIAL P LTD. AND ALSO ADMITTED THAT THE REQUISITE DOCUMENTS HAS BEEN FILED BY THE M/S CAPLIN COMMERCIAL PVT. LTD. AND FROM THE EXAMINATION OF THE DOCUMENT THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF TRANSACTION WITH M/S CAPLIN COMMERCIAL P LTD. STANDS ESTABLISHED. IN VIEW OF THE ABOVE, FACTS WE FIND THAT NO NEW EVIDENCE WAS ADDUCED BEFORE THE LD. CIT(A). HE ONLY TOOK NOTE OF THE ALREADY E XISTING DOCUMENTS IN THE PUBLIC DOMAIN. I.E. THE REMAND REPORT OF THE AO IN A SISTER CONCERNS CASE OF ASSESSEE WHEREIN, THE AO CANDIDLY ACCEPTS THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE HOLDERS COM P ANY (M/S CAPLIN FOR ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 24 AY 2006 - 07 I.E. IN THE SAME ASSESSMENT YEAR UNDER CONSIDERATION). THEREFORE, QUESTION OF ADMISSION OF ADDITIONAL EVIDENCE DOES NOT ARISE. THE LD. CIT(A) WHILE DISCHARGING HIS APPELLATE JURISDICTION CAN TAKE JUDICIAL NOTICE OF THESE DOCUMENTS AND FOUND THE CONTENTION OF THE ASSESSEE WAS RIGHT AND SO TH ERE IS NOTHING ILLEGAL OR PERVERSE IN IT AND SO THERE IS NO VIOLATION OF RULE 46A. MOREOVER, THE LEARNED DR COULD NOT POINT OUT ANY ADDITIONAL EVIDENCE WHICH HAS BEEN ADDUCED BEFORE THE LD. CIT(A) FOR THE FIRST TIME TO INVOKE RULE 46A. HENCE, THE CONTEN TION RAISED BY THE DEPARTMENT REGARDING VIOLATION OF RULE 46A, HAS NO MERITS , THEREFORE, WE REJECT THE GROUND NO. 2 RAISED IN THE APPEAL. 11. I N THE RESULT THE REVENUES APPEAL IS DISMISSED. CROSS OB J E CTION NO. 140/DEL/2013 (AY 2006 - 07) 12. WE FIND THAT SIMILAR CROSS OBJECTION WAS RAISED BY THE ASSESEE IN CO NO. 245/DEL/2014 (IN ITA NO. 2288/DEL/2013) (A.Y. 2007 - 08) IN THE CASE OF AGGARWAL PLAZA PVT. LTD. VS. DCIT WHEREIN SIMILAR ISSUES HAVE BEEN RAISED. WE HAVE ALREADY DEALT WITH THE SAME AT LENG TH AND WE HAVE FOLLOWED IN THAT CASE THE COORDINATE BENCH DECISION OF EVEN DATE IN THE CASE OF THAT ASSESSEES OWN CASE FOR A.Y. 2008 - 09, WHEREIN ON IDENTICAL GROUNDS EMANATING FROM THE SAME SEARCH WHICH RESULTED IN PROCEEDINGS U/S SECTION 153 A WHEREIN, T HE BENCH HAS HELD AS UNDER: - '14. SINCE THE SPECIAL BENCH HAS DECIDED THIS ISSUE IN THIS MANNER, IT IS NOT POSSIBLE FOR US TO DEVIATE FROM THE SAME. THERE HAS TO BE SOME CONSISTENCY IN THE VIEW TAKEN BY THE TRIBUNAL. ONCE A SPECIAL BENCH HAS DECIDED A PAR TICULAR ISSUE IN A PARTICULAR MANNER, THEN, THAT BECOMES BINDING ON ALL THE DIVISION BENCHES ACROSS THE COUNTRY UNLESS THERE IS A CONTRARY JUDGMENT OF THE HON'BLE SUPREME COURT OR THAT OF SOME HIGH COURT. AS THE LD. DR FAILED TO POINT OUT ANY SPECIFIC AND DIRECT JUDGMENT RENDERED BY THE HON'BLE HIGH COURT ON THE ISSUE WHICH IS OBTAINING IN THE PRESENT APPEAL, WE ARE DISINCLINED TO DEVIATE FROM THE SPECIAL BENCH ORDER IN THE CASE OF ALL CARGO (SUPRA). WE, THEREFORE, HOLD IN PRINCIPLE THAT NO ADDITION CAN BE MADE FOR ANY ASSESSMENT YEAR U/S I53A, THE ASSESSMENT FOR WHICH IS NOT PENDING ON THE DATE OF SEARCH, UNLESS ANY INCRIMINATING MATERIAL IS FOUND IN THE COURSE OF SEARCH.' ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 25 13. CONSISTENT WITH A VIEW TAKEN THEREIN AND TAKING NOTE THAT HONBLE BOMBAY HIGH C OURT HAS UPHELD THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN AL CARGO, WE ARE INCLINED TO UPHOLD THE CONTENTION OF THE ASSESSEE THAT NO ADDITION CAN BE MADE FOR THIS ASSESSMENT YEAR U/S 153A SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE COURSE OF SEARCH AND ADMITTEDLY ORIGINAL ASSESSMENT HAS NOT ABATED AS ON DATE OF SEARCH. THOUGH, IN THE INSTANT CASE ORIGINAL ASSESSMENT WAS U/S 143(1), WE FIND THAT THERE WAS NO MATERIAL LEAVE ALONE INCRIMINATING MATERIAL TO JUSTIFY ADDITION. SO IN THE ABS ENCE OF INCRIMINATING MATERIALS, THE AO CANNOT MAKE ADDITIONS UNLESS THE ASSESSMENT PROCEEDINGS HAVE ABATED AS PER SECTION 153A OF THE ACT. IN THE PRESENT CASE, THE ORIGINAL ASSESSMENT HAS NOT ABATED AND THERE WAS NO SHRED OF EVIDENCE IN THE HANDS OF THE AO TO JUSTIFY ADDITION MADE WHICH NECESSARILY HAD TO BE DELETED AND THE LD. CIT(A) HAS RIGHTLY DELETED THE SAME ON MERIT AND WE HAVE UPHELD THE SAME. SO RESPECTFULLY FOLLOWING THE ORDER OF THE SPECIAL BENCH IN ALL CARGO (SUPRA) WHICH HAS BEEN AFFIRMED BY THE HO NBLE BOMBAY HIGH COURT, WE ARE INCLINED TO FOLLOW TH E VIEW OF THE COORDINATE BENCH AS STATED ABOVE. 1 4 . IN THE RESULT, THE REVENUES APPEAL STANDS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 /05/2015. SD/ - SD/ - [N.K. SAINI] [ A.T. VARKEY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 29 /5/2015 AK KEOT / RK COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITA TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 2290/DEL/2013 & CO NO. 140DEL/2013 26 DATE OF DICTATION . DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS.. DATE ON WHICH FAIR ORDER SENT TO MEMBER FOR SIGNATURE DATE ON WHICH THE FAIR ORDER COMES BACK AFTER PRONOUNCEMENT TO THE SR. PS/PS. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE D ATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DESPATCH OF THE ORDER ..