Pride Purple Builders Private Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 284/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0052 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-06-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 29-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Unexplained cash credit; Unexplained expenditure; Depreciation; Income from undisclosed sources; Search and seizure; Document seized; Principle of natural justice; Accommodation entries; Retraction; Documents seized
• Section: 69C; 143(3); 153A; 68; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS. 283 & 284/PUN/2016 / ASSESSMENT YEARS : 2010-11 & 2011-12 PRIDE PURPLE BUILDERS PRIVATE LIMITED. 504, CORPORATE PLAZA, SENAPATI BAPAT ROAD, PUNE-411 016. PAN : AADCP4286H ....... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUHAS BORA REVENUE BY : DR. VIVEK AGGARWAL / DATE OF HEARING : 24.07.2018 / DATE OF PRONOUNCEMENT : 17.09.2018 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 2 APPEALS FILED BY THE ASSESSEE UNDER CONSIDE RATION INVOLVING A.YRS. 2010-11 & 2011-12. THEY ARE FILED AGAINST THE CON SOLIDATED ORDER OF CIT(A)-13, PUNE, DATED 15-12-2015. WE SHALL FIRST TAKE UP THE APPEAL OF THE ASSESSEE FOR THE A.Y. 2010-11. ITA NO.283/PUN/2016 A.Y. 2010-11 2. GROUNDS RAISED BY THE ASSESSEE ARE EXTRACTED AS FOLLOWS : 2 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 1 . T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS )-13 PUNE IS OPPOSED TO LAW AND THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LD.CIT(A) ERRED BOTH IN LAW AS WELL AS IN FA CTS BY CONFIRMING THE ADDITION OF RS. 2,35,00,000/- UNDER SECTION 68 MADE BY THE LD. ASSESSING OFFICER BY TREATING THE SHARE APPLICATION MONEY RECEIVED BY TH E APPELLANT AS NON GENUINE. 3. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN CONFIRMING THE ADDITION OF RS.2,35,00,000/- UNDER SECTION 68 AS NO CREDIT O F THE SAID AMOUNT WAS MADE/FOUND IN THE DULY AUDITED BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY. 4. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN FAILING TO APPRECIATE THAT BY NON GRANTING OF CROSS EXAMINATION OF THE PERSONS WHO DEPOSED ADVERSELY AGAINST THE APPELLANT CAUSED VIOLATION OF RUDIMENTA RY PRINCIPLES OF NATURAL JUSTICE AUDIT/ALTREM/PARTEM. 5. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN FAILING TO APPRECIATE THAT THE DEPONENT OF STATEMENTS ADVERSE TO THE APPELLANT HAD FILED A SWORN IN STATEMENT THAT THE INCOME TAX AUTHORITIES HAD PUT W ORDS IN HIS MOUTH AND MADE HIM TO DEPOSE IN AN ADVERSE MANNER AGAINST THE APPE LLANT UNDER DURESS. 6. THE LD.CIT(A) FAILED TO APPRECIATE IN HIS FINDIN GS THAT THE ADDITION MADE BY THE LD. ASSESSING OFFICER WAS BASED MERELY ON CONJE CTURES AND SURMISES AND NOT ON ANY OBJECTIVE BASIS. 7. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN INTERPRETING AND APPLYING THE RATIO OF THE DECISION OF HONOURABLE SU PREME COURT IN THE CASE OF CIT V DIVINE LEASING & FINANCE LIMITED (SLP NO CC 375/2008 ARISING OUT OF ITA NO. 53/2005 OF DELHI HIGH COURT). 8. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN NOT APPRECIATING THAT THE APPELLANT COMPANY HAD FULLY SATISFIED THE CRITE RIA SET OUT BY THE HONOURABLE APEX COURT IN THE AFORE SAID CASE. 9. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW TO OBSERVE THAT THE FINDINGS OF THE DEPARTMENT IN RESPECT TO SHARE APPL ICATIONS WERE NOT CONCLUSIVELY CONFRONTED WITH THE APPELLANT AS IT WA S DENIED THE OPPORTUNITY TO CROSS EXAMINE THE DEPONENT ON WHOSE STATEMENT THE E NTIRE ADDITION WAS BASED ON. 10. THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW AND FAILED TO APPRECIATE THAT FOR ALLOTMENT OF SHARES THE APPELLANT WAS PRIM ARILY CONCERNED WITH THE GENUINENESS OF THE APPLICANT COMPANIES, THEIR REGIS TRATION WITH THE REGISTRAR OF COMPANIES, PERMANENT ACCOUNT NUMBERS ETC, WHICH HAD BEEN PROPERLY TAKEN CARE OF BY THE APPELLANT. 11. (A) THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL A S IN LAW AND FAILED TO APPRECIATE THAT ALL THE MONETARY TRANSACTIONS WERE DONE THROUGH BANKING CHANNELS AND NO INFIRMATORY FINDINGS COULD BE RECOR DED BY THE ASSESSING OFFICER. (B) THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW TO AGREE WITH AOS FINDINGS THAT THE APPELLANT HAD EXCHANGED CASH AGAI NST SHARE PREMIUM RECEIVED FROM THE SHARE APPLICANTS IN CHEQUE THOUGH THE SHARES WERE IN FACT BOUGHT BACK AT A HIGHER PRICE LATER. 12.THE LD.CIT(A) WAS APPARENTLY WAS IN A STATE OF C ONFUSION AS HE OBSERVED IN PARA 2.3.2 THAT OF OPPORTUNITY TO CROSS EXAMINE THE WITNESS WHO HAS GIVEN THE STATEMENT CAUSING PREJUDICE TO THE APPELLANT IS AN INTEGRAL PART OF THE NATURAL JUSTICE; WHILE AGAIN IN PARA 2.4.5 MADE A CONTRADIC TORY OBSERVATION 'NOT 3 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., GRANTING CROSS EXAMINATION IS NOT FATAL TO THE ADDI TION' MISPLACING RELIANCE UPON THE DECISION IN THE CASE OF CIT V C P ADAM (1976) 1 05 ITR 465 (KER) THE FACTS OF WHICH ARE CLEARLY DISTINGUISHABLE FROM THE APPELLAN T CASE. 13. (A) THE LD. CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW WAS WRONG IN CONCLUDING THAT THE APPELLANT WAS NOT INTEREST TO A SK FOR CROSS EXAMINATION BEFORE THE LD.CIT(A). THE ISSUE WAS VIGOROUSLY PUR SUED BEFORE HIM AND IT WAS INCUMBENT UPON HIM TO GRANT SUCH OPPORTUNITY TO THE APPELLANT BEFORE DRAWING THE CONCLUSION BASED ON CONJECTURES. (B) THE LD.CIT(A) ERRED BOTH IN FACTS AS WELL AS IN LAW IN NOT APPRECIATING THAT QUITE A LOT OF SHARES ALLOTTED TO THE APPELLANT COM PANIES WERE BOUGHT BACK BY THE DIRECTORS OF THE ASSESSEES COMPANY AT A PRICE H IGHER THAN THAT AT WHICH THEY WERE SOLD. 14. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO OF RS.1,76,250/- U/SEC. 69C AS UNEXPLAINED EXPENDITURE ON THE ESTIMATION THAT APPELLANT COMPANY HAS PAID COMMISSION TO THE ENTRY PROVIDER. THE LD.CIT(A) FURTHER ERRED IN REJECTING THE CONTENTION OF THE AP PELLANT THAT THE ADDITION IS MADE ONLY ON THE BASIS OF THE STATEMENT OF THE THIR D PARTY, WITHOUT GIVING AN OPPORTUNITY TO CROSS EXAMINE HIM. 15. THE APPELLANT MAY KINDLY BE PERMITTED TO ADD TO OR ALTER ANY OF GROUNDS OF APPEAL, IF DEEMED NECESSARY. 3. HOWEVER, DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, AS SESSEE FILED THE FOLLOWING ADDITIONAL GROUND, WHICH IS LEGAL IN NATURE, AND REQUES TED FOR ADMITTING THE SAME. THE SAID ADDITIONAL GROUND IS EXTRACTED AS UNDE R : 1. THE ASSESSEE SUBMITS THAT THE NOTICE ISSUED U/S .153C FOR THIS YEAR IS BAD IN LAW SINCE NO INCRIMINATING EVIDENCE WAS FOUN D PERTAINING TO THE ASSESSEE FOR THIS YEAR AND ACCORDINGLY, THE ASST. C OMPLETED IS ALSO NULL AND VOID. THE ADDITION ON ACCOUNT OF NON-GENUINE SHARE APPLICATION M ONEY U/S.68 OF THE ACT, ANOTHER ADDITION ON ACCOUNT OF UNEXPLAINED EXPE NDITURE U/S.69C OF THE ACT ARE THE ISSUES ON MERITS. FURTHER, THE LEGAL ISSU E RELATES TO THE VALIDITY OF THE NOTICE ISSUED U/S.153C OF THE ACT IN THE ABS ENCE OF ANY INCRIMINATING DOCUMENTS, IS THE OTHER ISSUE RAISED IN THE AD DITIONAL GROUND FOR BOTH THE A.YRS. 2010-11 AND 2011-12. WE SHALL TAKE UP THE LEGAL ISSUE FIRST FOR ADJUDICATION. WE SHALL PROCEED TO NARRATE THE FAC TS OF THE CASE AND THE SEIZURE DETAILS OF THE DOCUMENTS. 4 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 4. FACTS : BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUDE THAT TH E ASSESSEE BELONGS TO PRIDE GROUP ALONG WITH PRIDE PURPLE B UILDERS PVT. LTD., AND PRIDE HOUSING CONSTRUCTION PVT. LTD. ASSESSEE IS ENG AGED IN THE BUSINESS OF CONSTRUCTION & REAL ESTATE. THERE WAS SEARC H AND SEIZURE ACTION U/S.132 OF THE ACT ON THE PRIDE GROUP OF CASES ON 07-09 -2011. NO CASH SEIZURE AND OTHER VALUABLES WAS MENTIONED IN THE ORDER O F THE AO. THE SEARCH ACTION RESULTED IN SEIZURE OF VARIOUS DOCUMENTS PE RTAINING TO/BELONGING TO THE ASSESSEE. DETAILS OF THE DOCUMENTS S HALL BE DISCUSSED IN THE LATER PARAGRAPHS OF THIS ORDER. THERE WAS NO DISCLOS URE OF UNACCOUNTED INCOME IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT Y EARS UNDER CONSIDERATION. CONSEQUENT TO THE SEARCH ACTION, AO ISSU ED NOTICE DATED 15- 03-2013 U/S.153C OF THE ACT. IN RESPONSE, ASSESSEE FURN ISHED THE RETURN OF INCOME ON 16-04-2013 DECLARING NIL INCOME WHICH IS SAME AS THAT OF THE ORIGINALLY RETURN OF INCOME FURNISHED ON 28.09.2010. 5. DURING THE SAID SEARCH ACTION, THERE WAS AN ISSUE RELAT ING TO RAISING OF SHARE APPLICATION MONEY (SAM) FROM VARIOUS INVESTOR COMPAN IES. THE STATEMENTS WERE RECORDED FROM MR. JAGDISH PUROHIT, ENTRY OPERATOR, MR. PRADEEP GUPTA, FACILITATOR, AUDITORS OF THE VARIOUS INVESTOR COMPANIES AND MR. ARVIND JAIN, CMD OF THE PRIDE GROUP IN AN ATTEMPT TO TAX THE ENTIRE SH ARE APPLICATION MONEY RAISED IN THIS YEAR IN THE HANDS OF THE A SSESSEE U/S.69C OF THE ACT. THE STATEMENTS ARE PLACED AT PAGES 516 TO 5 33 OF THE PAPER BOOK. HOWEVER, MR. JAGDISH PUROHIT RETRACTED THE SAID STATEMENT ON 31.10.2011 ISSUED U/S.131 OF THE ACT. RETRACTION STATEMENT IS PLACED AT PAGES 532-533 OF THE PAPER BOOK. IT IS THE CASE OF THE REVENUE THAT MR. JAGDISH PUROHIT PROVIDED ACCOMMODATION ENTRIES FOR INTRODUCING SHARE APPLI CATION MONEY IN THE BOOKS OF THE ASSESSEE USING VARIOUS INVESTOR COMPAN IES INCORPORATED/ AUDITED BY MR. PRADEEP GUPTA AT THE REQUEST OF MR. ARVIN D JAIN, CMD OF THE 5 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., PRIDE GROUP OF CASES. AT THE END OF THE ASSESSMENT PRO CEEDINGS U/S.153C R.W.S. 143(3) OF THE ACT, AO MADE ADDITION OF RS.2,35,00,000/- FOR THE A.Y. 2010-11 AND RS.15,80,00,000/- WAS ADDED FOR THE A.Y. 2011- 12. IN ADDITION, AO ALSO MADE ADDITION ON ACCOUNT OF COMMISSION PAID TO MR . JAGDISH PUROHIT FOR PROVIDING THE SERVICES OF GIVING THE SAID ACCOMMODATION ENTRIES. WHILE DOING SO, AO ANALYSED THE INVESTOR COMPANIES AND THEIR P ROFIT MAKING ABILITIES, THEIR BUSINESS OPERATIONS, THEIR COMMON ADDRESSES, COMMON DIRECTORS, THEIR CREDIT WORTHINESS ETC. ASSESSEE REQUES TED FOR THE CROSS EXAMINATION OF MR. JAGDISH PUROHIT, RETRACTION OF HIS STATEME NT AS PER THE PROVISIONS OF SECTION 68 OF THE ACT AND VARIOUS LIMBS OF IT, I.E. IDENTITY AND CREDIT WORTHINESS OF THE INVESTOR COMPANIES ETC., BEFORE CO NCLUDING AGAINST THE ASSESSEE. RELEVANT CONCLUSION OF THE AO IS EXTRACTED HERE AS U NDER: 5] IN ORDER TO PROVE THE FACT BEYOND DOUBT THAT TH E ASSESSEE GROUP HAS RECEIVED SHARE SUBSCRIPTION IN A NATURAL COURSE OF BUSINESS THE ASSESSEE HAS TO PRIMA FACIE PROVE I) THE IDENTITY OF THE SUBSCRIBER II) THE GENUINENESS OF THE TRANSACTION VIZ. WHETHER IT HAS BEEN TRANSMITTED THROUGH INDISPUTABLE CHANNELS III) THE CREDIT WORTHINESS OR FINANCIAL STRENGTH OF THE SUBSCRIBER IV) THE ONUS WOULD NOT STAND DISCHARGED IF THE SUBS CRIBER DENIES OR REPUDIATES (DISAGREES) THE TRANSACTION SET BY THE ASSESSEE. IN THE PRESENT CASE THE ASSESSEE GROUP HAS FAILED TO PROVE THESE FACTS DESPITE OF THE FACT THAT SPECIFIC COMMUNICATION VID E SHOW CAUSE LETTER DATED 27.12.2012 WAS MADE WITH THE ASSESSEE GROUP WHEREBY IT WAS COMMUNICATED THAT ALL MATERIAL FACTS ARE GOING AGAINST THE ASSES SEE. HOWEVER, THE ASSESSEE DID NOT DISCHARGE THE LIABILITY OF DISPROVING THE F ACTS COMMUNICATED TO HIM. DURING ASSESSMENT PROCEEDINGS AGAIN OPPORTUNITY WAS GIVEN TO SUBSTANTIATE ITS STAND IN THIS REGARD. HOWEVER, MAINLY RELIED ON THE FACT THAT SHARE HAS BEEN ALLOTTED TO PARTIES AND MODES OF TRANSACTIONS ARE T HROUGH CHEQUE ONLY. HOWEVER, CREDITWORTHINESS AND GENUINENESS OF SUCH TRANSACTIO NS WERE NOT ESTABLISHED. ACCORDINGLY, SHARE APPLICATION RECEIVED IN THE HAND OF ASSESSEE IS TREATED AS UNEXPLAINED CASH CREDIT AND ADDED BACK IN THE INCOM E OF ASSESSEE. THE QUANTUM OF DISALLOWANCE IS BASED ON QUANTUM OF SHAR E APPLICATION MONEY RECEIVED DURING THE YEAR AS PER ANNEXURE-1. ACCORDI NGLY, RS.2,35,00,000/- IS ADDED BACK IN THE INCOME OF ASSESSEE. 6 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 6. FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE NEVE R RAISED ANY ISSUE RELATING TO THE VALIDITY OF THE NOTICE ISSUED U/S.153C OF TH E ACT. BEFORE THE FIRST APPELLATE AUTHORITY ALSO, THERE IS NO ISSUE RELATING TO THE VALIDITY OF THE SAID NOTICE. HOWEVER, THE CIT(A) CONFIRMED THE SAID ADDITION ON MERITS. AGGRIEVED WITH THE SAME, THE ASSESSEE FILED THE PRESENT A PPEAL BEFORE THE TRIBUNAL WITH THE GROUNDS/ADDITIONAL GROUND EXTRACTED ABOVE. BEFORE THE TRIBUNAL 7. ON THE PRELIMINARY ISSUE OF THE ADMISSION OF THE SAID A DDITIONAL GROUND EXTRACTED IN PARA NO.3 OF THIS ORDER, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME IS UNDISPUTEDLY LEGAL IN NATURE A ND THEREFORE, THE SAME SHOULD BE ADMITTED BEFORE GOING INTO THE MERITS OF T HE ADDITION. AO WAS MERELY ON THE ISSUE OF THE APPLICABILITY OF THE PROVISIONS OF SECTION 68 OF THE ACT AND WAS ON THE MERITS OF THE ADDITION OF SAM. HOWEVE R, THERE ARE ADEQUATE DETAILS ON THE SEIZURE OF DOCUMENTS BELONGING OR PERTAINING TO THE INFUSION OF SAM INTO THE ASSESSEE COMPANY THROUGH THE INV ESTOR COMPANY RELEVANT TO THE ASSESSMENT YEAR PRIOR TO THE SEARCH A CTION FOR THE ASSESSMENT YEAR 2010-11. THERE ARE NO DOCUMENTS SEIZED RELEVANT TO THE A.Y. 2010-11. IN THE PROCESS, LD. AR FURNISHED THE DETAILS OF THE SEIZED MATERIALS PERTAINING TO THE ASSESSEE ON ONE SIDE AND THE INVESTOR COMPANIES , WHO INTRODUCED THE SAM ON THE OTHER. 8. LD. DR FOR THE REVENUE OPPOSED THE ADMISSION OF THE A DDITIONAL GROUND DUTIFULLY. 9. ADMISSION OF ADDITIONAL GROUND: AFTER HEARING BOTH THE SIDES ON THE ADMISSION OF THIS ADDITIONAL GROUND, WE ARE OF THE OPINION THA T THE ADDITIONAL GROUND, BEING LEGAL IN NATURE, NEEDS TO BE ADMITTED IN THE INTEREST OF 7 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., ADMINISTRATION OF JUSTICE. WE FIND NO FRESH FACTS ARE REQUIRE D TO BE INVESTIGATED. ALL THE MATERIAL NECESSARY FOR ADJUDICATION A RE ALREADY AVAILABLE ON RECORD. THEREFORE, THE ADDITIONAL GROUND IS ADMITTED FOR ADJUDICATION IN THE FOLLOWING PARAGRAPHS IN VIEW OF THE VARIOUS BINDING PRECE DENTS ON THIS ISSUE. WE KEEP OUT RELIANCE ON THE JUDGMENT IN THE CAS E OF NTPC LTD. 229 ITR 383 AND OTHERS. 10. ANALYSIS OF THE SEIZED DOCUMENTS ON SAM: REGARDING THE ADJUDICATION OF THE LEGAL ISSUE RAISED IN THE ADDITIONAL GROUND, LD. COUNS EL FOR THE ASSESSEE DREW OUR ATTENTION TO THE OUTCOME OF THE SEARCH ACTION AND ANALYSED THE DOCUMENTS SEIZED BY THE DEPARTMENT PERT AINING TO/BELONGING TO THE ASSESSEE UNDER CONSIDERATION. IN THIS REGARD, LD. CO UNSEL TOOK US THROUGH EACH DOCUMENT SEIZED BY THE DEPARTMENT RELATI NG TO SAM AND SUBMITTED THAT THE GENERIC DETAILS OF THE SAME DOCUMENTS PERTAINING TO THE INVESTOR COMPANIES, WHO INVESTED SHARE APPLICATION MONEY IN THE ASSESSEE COMPANY. THESE DOCUMENTS INCLUDE MEMORANDUM OF ASSOCIAT ION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOAR D RESOLUTION, PAN CARD, INCOME-TAX RETURNS, ACKNOWLEDGEMENTS, BANK ST ATEMENTS, FINANCIAL STATEMENTS, ANNUAL ACCOUNTS, ANNUAL REPORTS ETC . IN THIS REGARD, LD. AR BROUGHT OUR ATTENTION TO THE SEIZED PAPERS AND SUBMITTED THAT ALL THE ABOVE REFERRED DOCUMENTS ARE BASICALLY ACCOUNTED ONES OR RECORDED ONES IN THE GOVT. RECORDS AND DOES NOT INVOLVE ANY INCRIMINATION OF ANY KIND. ELABORATING THE SAME, LD. COUNSEL SUBMITTED THAT THE SAID DOCUMENTS ARE IN THE KNOWLEDGE OF THE GOVERNMENT, I.E. INCOME-TAX DEPARTME NT, MINISTRY OF CORPORATE AFFAIRS, REGISTRAR OF COMPANIES ETC. AND THEREFOR E, THE DOCUMENTS SEIZED BY THE DEPARTMENT INVOLVING THE ASSESSEE CONSTITU TE INCRIMINATING DOCUMENTS. LD. AR ALSO SUBMITTED THAT THE SAID DOCUMENT S ARE NEVER DECLARED ILLEGAL OR INVALID UNDER ANY LAW. THEREFORE, THE ISS UE OF NOTICE 8 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., U/S.153C OF THE ACT TO THE ASSESSEE BASED ON SUCH NON -INCRIMINATING DOCUMENTS IS INVALID AND UNSUSTAINABLE IN LAW. 11. FURTHER, LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN SUBM ISSIONS EXPLAINING THE DETAILS OF THE SHARES TO THE EIGHT COMPANIE S IN RESPECT OF WHICH THE ADDITION WAS MADE BY THE ASSESSING OFFICER IN A.Y.2010-1 1 AND THE SAME IS EXTRACTED AS UNDER: SR. NO. NAME OF THE COMPANY SHARE CAPITAL PREMIUM TOTAL AMOUNT (RS.) 1 ALBRIGHT ELECTRICALS PVT. LTD. 250,000 2,250,000 2,500,000 2 BLAZAR VENTURE PRIVATE LIMITED 350,000 2,150,000 3,500,000 3 CASPER ENTERPRISES PRIVATE LIMITED 250,000 2,250,000 2,500,000 4 DUKE BUSINESS PRIVATE LIMITED. 250,000 2,250,000 2,500,000 5 NAKSHATRA BUSINESS PRIVATE LIMITED. 250,000 2,250,000 2,500,000 6 NEHA CASSETTES PVT.LTD. 500,000 4,500,000 5,000,000 7 NEXTGEN INFOTEL PRIVATE LIMITED. 250,000 2,250,000 2,500,000 8 SANJIVINI ENVIRO PROTECTION LIMITED. 250,000 2,250,000 2,500,000 2,350,000 21,150,000 23,500,000 12. ANOTHER SET OF 15 COMPANIES FOR THE A.Y. 2011-12 FROM WHOM THE SHARE APPLICATION MONEY IS RECEIVED ARE LISTED BELOW: SR. NO. NAME OF THE COMPANY SHARE CAPITAL PREMIUM TOTAL AMOUNT (RS.) 1 ALLBRIGHT ELECTRICALS PVT. LTD. 2,000,000 18,000,000 20,000,000 2 AMBER TRADECOM PRIVATE LIMITED 500,000 4,500,000 5,000,000 3 CONCORD VINCOM PRIVATE LIMITED 500,000 4,500,000 5,000,000 4 ETERNITY MULTI TRADE PRIVATE LIMITED. 1,000,000 9,000,000 10,000,000 9 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 13. SCOPE OF SECTION 153C OF THE ACT : LD. COUNSEL TOOK US TO THE DIFFERENT PARAGRAPHS OF THE WRITTEN SUBMISSIONS AND SUBMITT ED THAT IN VIEW OF THE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. SINH GAD TECHNICAL EDUCATION SOCIETY IN CIVIL APPEAL NO.11080/2017 AND OTHERS , DATED 29-08- 2017, THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CA SE OF BHARATI VIDYAPEETH MEDICAL FOUNDATION VS. ACIT AND VICE VERSA IN ITA NOS.917 TO 922/PN/2010 AND OTHERS, DATED 28-04-2011 AND ALSO BHA RATI VIDYAPEETH MEDICAL FOUNDATION VS. ACIT AND VICE VERSA IN ITA NOS.959/ PN/2010 AND OTHERS, DATED 28-04-2011 APART FROM OTHERS. THE NOTICE ISSUED BY THE AO U/S.153C IN THE ABSENCE OF ANY DOCUMENTS WITH ANY INCRIMIN ATION IS INVALID 5 FAIRMONT VENTURE PRIVATE LIMITED 1,500,000 13,500,000 15,000,000 6 GRAFTON MERCHANT PVT. LTD. 3,000,000 27,000,000 30,000,000 7 KAPINDRA MULTI TRADE PRIVATE LIMITED. 1,000,000 9,000,000 10,000,000 8 KUMAON ENGINEERING COMPANY PRIVATE LIMITED 500,000 4,500,000 5,000,000 9 MATRIX SYSTEL PRIVATE LIMITED 2,750,000 24,750,000 27,500,000 10 MICROCHIP INFOTEL PRIVATE LIMITED 500,000 4,500,000 5,000,000 11 NATRAJ VINIMAY PRIVATE LIMITED 400,000 3,600,000 4,000,000 12 NEHA CASSETTES PVT. LTD. 500,000 4,500,000 5,000,000 13 NEXTGEN INFOTEL PRIVATE LIMITED 500,000 4,500,000 5,000,000 14 OCTOPUS INFOTEL PRIVATE LIMITED 400,000 3,600,000 4,000,000 15 ROYALBLUE REALTORS PRIVATE LIMITED 750,000 6,750,000 7,500,000 15,800,000 142,200,000 158,000,000 10 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., AND UNSUSTAINABLE IN LAW. LD. COUNSEL FOR THE ASSESSEE AL SO DISCUSSED THE GENERAL NATURE OF THE SEIZED DOCUMENTS BASING ON WHICH N O VALID NOTICE CAN BE ISSUED U/S.153C OF THE ACT. HE ALSO SUBMITTED THAT IT IS NOT THE CASE OF THE REVENUE THAT CONSIDERING THE ACCOMMODATION ENTRY A LLEGATION, THE CASH IS PLOUGHED BACK TO THE ASSESSEE AND THERE IS EVIDENCE GA THERED DURING SEARCH ACTION AGAINST THE ASSESSEE IN SUPPORT OF THE SAME. HE ALSO ANALYSED THE RETRACTED STATEMENT OF MR. JAGDISH PUROHIT AND STATEMENT OF MR. PRADEEP GUPTA ARE UNSUSTAINABLE RELYING ON VARIOUS DECISIONS, SUCH AS IN THE CASE OF BEST INFRASTRUCTURE INDIA PVT. LTD. 47 CCH 159 (DEL.), CIT VS. HARJEE V AGARWAL AND LATE RAJ PAL BHYATIA 237 CTR 1 (DEL.) 14. FURTHER, IN THE WRITTEN SUBMISSIONS, LD. COUNSEL RELIED ON VARIOUS JUDGMENTS OF HIGH COURTS/DECISIONS OF TRIBUNAL. REFERRING T O THE ORDER OF TRIBUNAL IN THE CASE OF NOVA IRON AND STEEL LTD. VS. DCIT IN ITA NO.2159/DEL/14, LD. COUNSEL SUBMITTED THAT, WITH SIMILAR/COMPA RABLE FACTS, THE NOTICE ISSUED U/S.153C OF THE ACT WAS HELD AS INVALID B Y THE TRIBUNAL. LD. COUNSEL READ OUT RELEVANT FACTS AND SUBMITTED THAT IN THAT CASE ALSO, THE FACT OF INTRODUCING EQUITY INVOLVING INVESTOR-COMPANIES, THE ALLEGATION OF SEIZURE OF NON-INCRIMINATING DOCUMENTS ETC., ARE THE COMMON FACTS. FURTHER, REFERRING TO THE SAID DECISION OF THE TRIBUNAL, LD. COUNSE L SUBMITTED THAT THIS IS A CASE WHERE THERE IS ALLEGATION OF ACCOMMODATION E NTRIES AND THE STATEMENTS WERE RECORDED FROM THE ACCOMMODATION ENTRY PROVID ERS, AS IN CASE OF THE PRESENT ASSESSEE. THERE IS ALSO AN ALLEGATION OF SHELL COMPANIES AS THEY WERE HAVING COMMON ADDRESSES AND DIRECTORS ETC. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF NOVA IRON AND STEEL LTD. VS. DCIT (SUPRA) DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. FURTHER, ON SIMILAR PROPOSITIONS, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING CASE LAW S : 11 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., I. PR. CIT VS. SUNNY INFRA PROJECTS LTD. 2017-TIOL-810-DEL-HC II. RAVNET SOLUTIONS PVT. LTD. 93 TAXMANN.COM 59 III. DCIT VS. SAGAR NAHTA 82 TAXMANN.COM 344 (KOL.) IV. BHARATI VIDYAPEETH ITA NOS. 917 TO 922/PN/2010, DT. 28 -04- 2011 V. PR.CIT VS. INDEX SECURITIES PVT. LTD. 86 TAXMANN.COM 84 (DEL.) VI. PR.CIT VS. SMT. SUNITA BAI 78 TAXMANN.COM 274 (KAR.) VII. DCIT VS. ROYAL CARTOONS PVT. LTD. ITA NO. 472/COCH/2013 (TM) 15. FURTHER ALSO, REFERRING TO THE LD. DRS ARGUMENT, LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. VS. DCIT 364 ITR 188 (DEL.) AND THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. PHADNIS CLINIC PVT. LTD. 59 TAXMANN.C OM 101 (PUNE TRIB.) BELONGING TO THE PERIOD PRIOR TO THE SAID SUPREME COURT JUDGME NT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA). OTHERW ISE, THE FACTS IN THOSE CASES ARE ALSO DISTINGUISHABLE AND NOT COMPARABLE T O THE FACTS OF THE PRESENT CASE. REFERRING TO THE DECISION OF TRIBUNAL IN THE CASE OF PHADNIS CLINIC PVT. LTD. (SUPRA), LD. COUNSEL SUBMITTED THAT THIS IS A C ASE WHERE COMPANY CLAIMED DEPRECIATION ON AN ASSET WHICH WAS ORIGIN ALLY BELONGED TO THE DIRECTORS WHO TOOK THE LOAN FROM THE BANKS FOR BUYIN G THE PREMISES ON WHICH DEPRECIATION CLAIMED BY THE COMPANY. SEARCH ACTION IN THIS CASE RESULTED IN SEIZURE OF VARIOUS PAPERS SHOWING THE OWNERSH IP OF THE ASSET BY THE DIRECTOR AND CLAIM AS MADE BY THE COMPANY WHERE T HE OWNER IS A DIRECTOR. FURTHER, LD. COUNSEL SUBMITTED THAT THE INVESTO R COMPANIES ARE NOT THE SHELL COMPANIES AS THEY ARE VERY MUCH ACTIVE ON THE WEBSITE OF REGISTRAR OF COMPANIES AND MINISTRY OF CORPORATE AFFAIRS, GOVT. OF INDIA. IT IS ALSO THE FACT THAT THE AO DID NOT DISTURB THE RETURNS FILED BY THE SAID INVESTOR COMPANIES AND THE SAME IS EVIDENT FROM THE FACT THAT NO PROTECTIVE ADDITIONS ARE MADE IN THE HANDS OF THOSE COMPANIES. REFERRING TO A NOTHER DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ESHAN MINERALS P VT.LTD. VS. DCIT AND VICE VERSA IN ITA NO. 834/PN/2014 AND ITA NO.1242/P UN/2014, DATED 12 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 18-10-2017, LD. COUNSEL SUBMITTED THAT THIS IS RELIED UPON BY THE LD. DR WHERE THE BASIC DOCUMENTS INCLUDES PRE-SIGNED APPLICATION FORMS AND BLANK SALE BILLS, PRE-SIGNED BANK RECEIPTS AND BLANK TRANSFER FORMS , DECLARATION ETC., WHICH NO WHERE COMPARABLE TO THE ENTIRE BUNCH OF DOCUME NTS WHICH ARE VERY MUCH ACCOUNTED AND DISCLOSED TO THE GOVERNMENT AUTHOR ITIES AS PER THE PROVISIONS OF RELEVANT ACTS. EVENTUALLY, IT IS THE CASE OF L D. COUNSEL FOR THE ASSESSEE THAT AO NEVER RELIED ON ANY SEIZED PAPERS WHIC H IS UNACCOUNTED AND THEREFORE, THERE IS NO INCRIMINATING MATERIAL AND NOTICE U/S.1 53C OF THE ACT IS INVALID AND UNSUSTAINABLE. 16. REFERRING TO THE SEIZED MATERIAL RELEVANT TO THE A.Y. 20 10-11, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE DID NOT SEIZE ANY PAPER WHATSOEVER PERTAINING TO/BELONGING TO THE ASSESSEE. IT IS THE CASE OF LD. COUNSEL THAT CONSIDERING THE FACT THAT NO SEIZURE OF ANY DOCUMENTS, LEAVE ALONE THE INCRIMINATING DOCUMENTS, THE NOTICE ISSUED U/S.153 C OF THE ACT FOR THE A.Y. 2010-11 IS REQUIRED TO BE HELD AS INVALID AND UNSUSTAINABLE IN LAW. 17. BEFORE US, AT THE OUTSET, LD. DR FOR THE REVENUE SUBM ITTED THAT THE REVENUE FURNISHED THE WRITTEN SUBMISSIONS IN THE CASE OF P RIME CENTRE AND DEVELOPERS PVT. LTD. VS. DCIT IN ITA NOS. 285 TO 287/PUN/ 2016 AND THE SAME APPLY TO THESE APPEALS ALSO SINCE THE FACTS AND ISSUES ARE SAME . 17.1 PER CONTRA, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE AO AND THE CIT(A). FURTHER, LD. DR FOR THE REVENUE BROUG HT OUR ATTENTION TO THE CLEAN LANGUAGE OF THE PROVISIONS OF SECTION 153C AND S UBMITTED THAT THERE IS NO REQUIREMENT OF ANY INCRIMINATING DOCUMENTS FOR ISSUE O F NOTICE U/S.153C OF THE ACT. MERE SEIZURE OF DOCUMENTS PERTAINING TO/BELONGING TO THE ASSESSEE IS THE ADEQUATE REQUIREMENT AS PER THE S AID PROVISIONS. LD. DR SUBMITTED THAT MERE INITIATION OF SEARCH ACTION ON THE PRID E GROUP AS A BASIS 13 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., OF ALLEGATION THAT THE GROUP IS ENGAGED IN INTRODUCING THE SUBSTANTIAL QUANTUM OF UNACCOUNTED INCOME IN THE GARB OF SHARE APPLIC ATION MONEY. FURTHER, RELYING ON THE STATEMENTS OF MR. JAGDISH PUROHIT AND MR. PRADEEP GUPTA, LD. DR SUBMITTED THAT THE SAID STATEMENT REVEALS THE MODUS OPERANDI OF SYSTEMATIC INTRODUCTION OF THEIR ACCOUNTED MONEY OF THE ASSESSEE THROUGH THE SHELL COMPANIES AND THE SAME SHOULD CONSTITUTE COLOUR ABLE DEVICE. THE REQUIREMENT OF LIFTING OF THE CORPORATE WHEEL ON THE TRANS ACTION WAS ALSO MENTIONED IN THE ARGUMENTS. NARRATING THE COMMONALITY OF ADDRESS/D IRECTORS OF THE INVESTOR COMPANIES, LD. DR SUBMITTED THAT THESE C OMPANIES CONSTITUTE SHELL COMPANIES AS THEY SUFFER FROM THE SAID UNUSUAL FEATURE S. REGARDING THE RETRACTION STATEMENTS, LD. DR SUBMITTED THAT THE RETRACTION IS NOT ACCEPTED BY THE AO AND THEREFORE THE ORIGINAL STATEMENTS ARE DEPEND ABLE. RELYING ON THE ORIGINAL STATEMENTS, LD. DR SUBMITTED THAT THE ACCOMMODAT ION ENTRIES ARE GIVEN AT THE REQUEST OF MR. ARVIND JAIN, CMD OF THE PRIDE GR OUP BY RAISING THE CASH PAYMENT AND BY GIVING COMMISSION TO THE ENTRY PROVIDERS. LD. DR ALSO CITED THAT THE ADMITTANCE OF MR. PRADEEP GUPTA REGA RDING THE FORMATION OF VARIOUS COMPANIES AT THE INSTRUCTION OF MR. JAGDISH PURO HIT. LD. DR SUBMITS THAT THESE INVESTOR COMPANIES ARE OWNED BY THE EMPLOYEES OF MR. JAGDISH PUROHIT, HAS ONLY MEAGER INCOME. FURTHER, HE SUBM ITTED THAT THE SAID INVESTOR COMPANIES HARDLY HAS ANY BUSINESS OPERATIO NS AS WELL AS INCOME WHICH IS CAPABLE OF GENERATING FUNDS FOR SUBSCRIBING T OWARDS THE SHARE APPLICATION MONEY WITH PREMIUM. IN SIMILAR FASHION, THE SHARE APPLICATION MONEY WAS REPORTED IN THE A.Y. 2011-12 TOO. R EGARDING THE SEIZURE OF ANY DOCUMENT LEAVE ALONE INCRIMINATING DOCUMENTS FOR THE A.Y. 2010-11, LD. DR HAS NOTHING TO SAY EXCEPT RELYING ON TH E PLAIN LANGUAGE OF THE PROVISIONS OF SECTION 153C OF THE ACT. FURTHER, LD. DR RELIED ON THE FOLLOWING DECISIONS AND PRAYED THAT THE NOTICE ISSUED U/S.15 3C OF THE ACT IN BOTH THE ASSESSMENT YEARS, I.E. 2010-11 AND 2011-12 SHOULD BE SUS TAINED : 14 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 1. SSP AVIATION LTD. VS. DCIT 346 ITR 177 (DEL.) 2. ITO VS. PHADNIS CLINIC 59 TAXMANN.COM. 101 (PUNE TR IBUNAL) 3. SAVESH KUMAR AGARWAL 353 ITR 26 (ALL.) 4. BHARAT GINNING & PRESSING FACTORY VS. ITO 32 TAXMAN N.COM 322 (AHMEDABAD TRIBUNAL) DECISION OF TRIBUNAL LEGAL ISSUE ON VALIDITY OF N OTICE 18. WE HEARD BOTH THE PARTIES ON THE ISSUE OF ADDITIONAL G ROUND RELATING TO VALIDITY OF NOTICE ISSUED U/S.153C OF THE ACT AND PERUSED T HE ORDERS OF THE REVENUE AS WELL AS THE PAPER BOOK FILED BEFORE US. A. THE CASE OF THE ASSESSEE ON THIS ISSUE INCLUDE THAT T HE NOTICE UNDER THE SAID SECTION FOR THE A.Y. 2010-11 IS REQUIRED TO BE QUASHED FOR THE REAS ON THAT NO DOCUMENT WHATSOEVER WAS SEIZED IN THE SEARCH ACTIO N CONDUCTED U/S.132 OF THE ACT PERTAINING TO/BELONGING TO THE ASSESSEE. THER E IS NO DISPUTE ON THIS FACT. WITH REFERENCE TO THE VALIDITY OF THE NOTICE FOR THE A.Y. 201 1-12, THE ASSESSEE CONTENDS THAT THE SAID NOTICE IS INVALID AND UNS USTAINABLE AS THE DOCUMENTS SEIZED FOR THIS YEAR INCLUDES ACCOUNTED OR REP ORTED DOCUMENTS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE OR IN THE RECORDS OF VARIOUS GOVT. DEPARTMENTS, I.E. INCOME TAX DEPARTMENT, MINISTRY OF CORPOR ATE AFFAIRS, REGISTRAR OF COMPANIES ETC. RELYING ON THE APEX COURT JU DGMENT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA) AND MANY OTH ERS THE NOTICE ISSUED U/S.153C OF THE ACT IS UNSUSTAINABLE WHEN THE DOCU MENTS SEIZED ARE ONLY NON-INCRIMINATING ONES. B. ON THE OTHER HAND, IN CONNECTION WITH APPEAL FOR A.Y. 2 011-12, THE CASE OF THE REVENUE IS THAT THE VERY SEIZURE OF SOME D OCUMENTS PERTAINING TO/BELONGING TO THE ASSESSEE IS SUFFICIENT FOR INVOKING THE PROVISIONS O F SECTION 153C OF THE ACT AND THEREFORE, THE NOTICE ISSUED FOR BOTH THE ASSESSMENT 15 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., YEARS IS VALID. FURTHER, WITH REFERENCE TO APPEAL FOR A.Y. 2010-11, WHERE NO DOCUMENTS ARE SEIZED, LD. DR RELY HEAVILY ON THE ORDERS OF THE AO/CI T(A). 19. ELABORATING THE ABOVE AND POINTING TO THE VARIOUS ARG UMENTS RAISED BY BOTH THE PARTIES, WE FIND IT RELEVANT TO ANALYSE THE DOCU MENTS-CENTRIC ARGUMENTS THOROUGHLY IN THE FOLLOWING PARAGRAPHS. RELEVA NT DETAILS ARE ALREADY BRIEFED IN THE PRECEDING PARAGRAPHS THAT SEARCH ACTION TOOK PLACE ON 07-09-2011. THE DOCUMENTS SEIZED BY THE REVENUE DURIN G SEARCH AND SEIZURE ACTION IN THE PRIDE GROUP PERTAINING TO/BELONGING T O THE ASSESSEE ARE GIVEN BELOW : A. A.Y. 2010-11 DETAILS OF THE SEIZED PAPERS WHICH RELATES TO SHARE APPLICATION MONEY RECEIVED IN A.Y.2010-11 FROM THE FOLLOWING COMPANIES ARE TAB ULATED AS UNDER : SR. NO. NAME OF COMPANY DESCRIPTION OF SEIZED PAPERS 1 NEHA CASSETTES PVT.LTD. MEMORANDUM OF ASSOCIATION , ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, ANNUAL REPORT FOR F.Y. 2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 2 ALLBRIGHT ELECTRICALS PVT.LTD. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN. A.Y.2009-10 3 NAKSHATRA BUSINESS PRIVATE LIMITED NO DOCUMENTS FOUND 4 CASPER ENTERPRISES PRIVATE LIMITED COPY OF LETTER AND CERTIFICATE ISSUED BY CASPER ENTERPRISES PRIVATE LIMITED FOR APPLICATION OF SHARES ALONG WITH BOARD RESOLUTION AND SHARE APPLICATION 5 BLAZER VENTURES PRIVATE LIMITED NO DOCUMENTS FOUND 6 DUKE BUSINESS PRIVATE LIMITED COPY OF LETTER AND CERTIFICATE ISSUED BY DUKE BUSINESS PRIVATE LIMITED FOR APPLICATION OF SHARE ALONG WITH BOARD RESOLUTION AND SHARE APPLICATION 7 NEXTGEN INFOTEL PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN. A.Y.2009-10 16 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 8 SANJIVANI ENVIRO PROTECTION LIMITED. COPY OF LETTER AND CERTIFICATE ISSUED BY SANJIVANI ENVIRO PROTECTION LIMITED FOR APPLICATION OF SHARE ALONG WITH BOARD RESOLUTION AND SHARE APPLICATION B. A.Y. 2011-12: DETAILS OF THE SEIZED PAPERS WHICH RELATES TO SHARE APPLICATION MONEY RECEIVED IN A.Y.2011-12 BY THE FOLLOWING COMPANIES ARE TABUL ATED INVESTOR-WISE. SR.NO. NAME OF THE COMPANY DETAILS OF SEIZED DOCUMENTS 1 ALLBRIGHT ELECTRICALS PVT. LTD. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN. A.Y.2009-10 2 AMBER TRADECOM PVT. LTD. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010- 11, PAN CARD COPY, 3 CONCORD VINCOM PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010- 11, PAN CARD COPY, 4 ETERNITY MULTI TRADE PRIVATE LIMITED. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN.2009-10, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY, COPY OF BANK STATEMENT 5 FAIRMONT VENTURE PRIVATE LIMITED. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN.2009-10, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 6 GRAFTON MERCHANT PRIVATE LIMITED. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION, BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN.2009-10, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 7 KAPINDRA MULTI TRADE PRIVATE LIMITED. NO DOCUMENTS FOUND 8 KUMAON ENGINEERING COMPANY PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y. 2010-11, PAN CARD COPY, COPY OF BANK STATEMENT 9 MATRIX SYSTEL PRIVATE LIMITED. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL 17 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., REPORT FOR F.Y.2008-09, ANNUAL REPORT FOR F.Y. 2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 10 MICROCHIP INFOTEL PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY. 11 NATRAJ VINIMAY PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT F.Y.2008-09, ANNUAL REPORT FOR F.Y.2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 12 NEHA CASSETTES PVT.LTD. MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, ANNUAL REPORT FOR F.Y. 2009-10, INCOME TAX ACKN. A.Y.2010-11, PAN CARD COPY 13 NEXTGEN INFOTEL PRIVATE LIMITED MEMORANDUM OF ASSOCIATION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, SHARE APPLICATION AND BOARD RESOLUTION, ANNUAL REPORT FOR F.Y.2008-09, INCOME TAX ACKN. A.Y. 2009-10. 14 OCTOPUS INFOTEL PRIVATE LIMITED NO DOCUMENTS FOUND 15 ROYALBLUE REALTORS PRIVATE LIMITED. NO DOCUMENTS FOUND 20. FROM THE ABOVE, IT IS EVIDENT THAT THERE WAS NO DOC UMENT WHATSOEVER SEIZED BY THE DEPARTMENT PERTAINING TO/BELONGING TO THE ASSESSEE FOR THE A.Y. 2010-11. FURTHER, THE ABOVE TABLE FOR THE A.Y. 2011-12, VIDE COL.3, DEMONSTRATE THAT THE DOCUMENTS SEIZED INCLUDE MEMORANDUM OF ASSOCIAT ION, ARTICLES OF ASSOCIATION, INCORPORATION CERTIFICATE, BOARD RESOLUTION, PAN COPY, ACKNOWLEDGEMENTS, FINANCIAL STATEMENTS, ANNUAL REPORT ETC. OUT OF THE ABOVE, IT IS CLEAR THAT THE COPIES OF MEMORANDUM OF ASSOCIA TION, ARTICLES OF ASSOCIATION AND INCORPORATION CERTIFICATE ARE THE REGULAR CORRESPONDENCE WITH THE GOVT. AUTHORITIES. THE INCOME-TAX RETURNS, PAN CARD DETAILS ARE IN THE KNOWLEDGE OF INCOME-TAX DEPARTMENT. THE BOARD RESOLUT IONS, INCORPORATION CERTIFICATES ARE THE CORRESPONDENCE WITH THE COMPANY ITS ELF. THE BANK 18 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., STATEMENTS AND THE FINAL STATEMENTS ARE UNDISPUTEDLY AC COUNTED ONES AND THEY ARE NOT UNACCOUNTED DOCUMENTS. THEREFORE, IT IS TH E ARGUMENT OF LD. COUNSEL ON THE FACT THAT ACCOUNTED DOCUMENTS ARE SEIZE D AND THE SAME CANNOT CONSTITUTE INCRIMINATING DOCUMENTS. CONSIDERING TH E APEX COURT JUDGMENT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIET Y (SUPRA) AND OTHER JUDGMENTS (SUPRA), WE ARE OF THE OPINION THAT THE ARGUMENTS OF LD. COUNSEL FOR THE ASSESSEE ON THIS LINE HAS TO BE ALLOWED A ND THE ARGUMENTS OF LD. DR FOR THE REVENUE ARE REQUIRED TO BE DISMISSED. 21. THE UNDERLINED PHILOSOPHY IN NOT VALIDATING THE ISSUE OF SUCH NOTICE U/S.153C OF THE ACT FOR THE YEARS, WHEN THE INCRIMINATING MATERIAL OR IN THE PRESENCE OF MERELY NON-INCRIMINATING MATERIAL ARE SEIZED IN THE CASE OF CONCLUDED ASSESSMENTS, IT IS A SETTLED LEGAL PROPOSITION THA T SUCH NON-ABATED ASSESSMENTS NEED NOT BE DISTURBED UNLESS THERE EXISTS ANY INCRIMINATING MATERIAL WHICH SHOULD BE THE BASIS FOR MAKING SUSTAINABLE AD DITIONS. RIGOURS FOR THE ASSESSEE IN ATTENDING TO THE ASSESSMENT PROCEEDINGS ARE GENERALLY NUMEROUS AND ASSESSEE HAS ALREADY UNDERGONE THE SAME DURING THE REGULAR ASSESSMENT PROCEEDINGS. REOPENING THE SAME U/S .153C OF THE ACT MERELY BASED ON CERTAIN NON INCRIMINATING MATERIAL IS AN UN NECESSARY BURDEN OR HARDSHIP FOR THE ASSESSEE. IT IS IN THIS CONTEXT THE APEX COURT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA) APART FROM MA NY OTHER DECISIONS, DID NOT APPROVE THE ISSUE OF SUCH NOTICES U/S.15 3C OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. IN FACT, IF THERE ARE CERTAIN ISSUES WHICH ARE REQUIRED TO BE NECESSARILY CONSIDERED FOR RE-A SSESSMENT, THERE ARE OTHER PROVISIONS IN THE STATUTE SUCH AS SECTION 148 OF T HE ACT OR SECTION 263 OF THE ACT FOR BRINGING THE CONCEALED INCOME TO TAX SUBJ ECT TO THE CONDITIONS SPECIFIED IN THE SAID SECTIONS. THE PROVISIONS OF SECTION 15 3C ARE HIGHLY SPECIALIZED ONES AND THE SAME ARE TO BE CAUTIOUSLY INVOK ED BY THE 19 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., DEPARTMENT. IT IS A SETTLED LEGAL PROPOSITION THAT THE EXIS TENCE OF ASSESSMENT YEAR SPECIFIC INCRIMINATING MATERIAL IS THE REQUIREMENT FOR REOPENING THE CONCLUDED ASSESSMENT U/S.153C OF THE ACT. 22. INVESTOR COMPANIES AND THEIR BOGUS NATURE: WE HAVE EXAMINED THE REVENUES ALLEGATION ABOUT THE BOGUS NATURE OF THE INVES TOR COMPANIES ENLISTED ABOVE. THE CASE OF THE REVENUE IS THAT THESE C OMPANIES CONSTITUTE BOGUS COMPANIES FLOATED BY MR.JAGDISH PUROHIT AND MR. PR ADEEP GUPTA AT THE INSTANCE OF MR. ARVIND JAIN, CMD OF THE COMPANY AND WO RKED AS CONDUIT FOR PLOUGHING IN ACCOUNTED CASH OF THE ASSESSEE IN THE FOR M OF SHARE APPLICATION MONEY. THE CIRCUMSTANTIAL EVIDENCES, I.E. COMMON NESS OF THE ADDRESSES AND DIRECTORS, AUDITORS ETC. ARE RELIED. FURTHE R, STATEMENTS OF MR. JAGDISH PUROHIT AND MR. PRADEEP GUPTA WERE ALSO RELIED ON BY THE LD. DR FOR THE REVENUE. 23. IN THIS REGARD, THE CASE OF THE ASSESSEE IS THAT THE STATEMENTS OF MR. JAGDISH PUROHIT AND MR. PRADEEP GUPTA RELIED UPON BY THE REVENUE STANDS RETRACTED AND THE RETRACTION IS NOT PROVED TO BE INCOR RECT ALTHOUGH THE SAME WAS REJECTED BY THE AO IN THE ASSESSMENT PROCEEDINGS. THE RETRACTION WAS GIVEN IN A REASONABLE TIME SOON AFTER THE SEARCH IS COMP LETED. FURTHER, THE FACT THAT THE INVESTOR COMPANIES ARE VERY MUCH ACTIVE A ND NOT STRUCK OF IN THE RECORDS OF REGISTRAR OF COMPANIES/MINISTRY OF CORPORATE AFFAIR S WAS ALSO CITED AS A REFERENCE TO STATE THAT THE COMPANIES CANNOT BE CONSIDERED AS BOGUS OR SHELL COMPANIES. THE INACTION OF THE AO IN DISTURBING THE CLAIM S IN THE ASSESSMENTS OF INVESTOR COMPANIES WAS ALSO HEAVILY RELIED UPON. 24. ON CONSIDERING THE ABOVE DIVERGENT STANDS OF BOTH TH E REPRESENTATIVES AND ON PERUSAL OF THE DOCUMENTS PLACED BEFORE US IN THIS REGARD, WE FIND THE FACTS RELEVANT TO NON-STRIKING OF THE INVESTOR COMPANIES I N THE RECORDS OF REGISTRAR OF COMPANIES/MINISTRY OF CORPORATE AFFAIRS IS UNDIS PUTED. WE ALSO 20 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., FIND THE DOCUMENTS AND THE FINANCIAL STATEMENTS ETC., ARE VERY MUCH ACCOUNTED IN THE RECORDS OF BOTH INCOME-TAX DEPARTME NT AS WELL AS THE REGISTRAR OF COMPANIES/MINISTRY OF CORPORATE AFFAIRS. AOS OF THE RESPECTIVE COMPANIES HAVE NOT TAKEN ADVERSE DECISION AGAINST THE SAID COMPANIES SO FAR AS THE SUBSCRIPTION OF THE SHARE APPLICATION MONEY BY THE M ARE CONCERNED. IT IS ALSO UNDISPUTED FACT THAT SEARCH ACTION WHICH IS AN ULTIM ATE EVENT TO HAPPEN TO ANY PERSON, WHICH INVADES INTO THE PRIVACY OF THE PERSON, DID NOT YIELD ANY EVIDENCE TO SUGGEST THAT THE CASH WAS SUPPLIED TO MR. ARVIND JAIN, CMD OF THE PRIDE GROUP OR HIS COMPANIES TO MR. JAGDISH PUR OHIT OR MR. PRADEEP GUPTA FOR SUBSCRIBING TOWARDS THE SHARE APPLICAT ION MONEY INTO THE ASSESSEE COMPANY. NOT EVEN CIRCUMSTANTIAL AND INDIRECT E VIDENCES WERE FOUND DURING THE SEARCH ACTION IN RESPECT OF THE ALLEGATION OF THE REVENUE. CONSIDERING THESE UNDISPUTED FACTS, WE ARE OF THE OPINION T HAT THE EVIDENCES, I.E. SEIZED DOCUMENTS GATHERED BY THE REVENUE IN THE SEA RCH ACTION SHOULD CONSTITUTE NON-INCRIMINATING DOCUMENTS. FURTHER, NO PROTE CTIVE ADDITIONS WERE MADE BY THE AOS IN THE HANDS OF THE INVESTOR COMP ANIES, I.E. SHELL COMPANIES. IN THE ABSENCE OF ANY ADVERSE INFERENCES ON THOSE COM PANIES, THE INVESTOR COMPANIES ARE REQUIRED TO BE CONSIDERED AS VALID AND LEGAL. 25. REGARDING THE REVENUE RELYING HEAVILY ON THE STATEM ENTS OF MR. JAGDISH PUROHIT AND MR. PRADEEP GUPTA, IT IS UNDISPUTED FACT THAT THE STATEMENTS WERE RETRACTED AND THE RETRACTION DOCUMENTS ARE PLACE D IN THE PAPER BOOK. THE AO MERELY REJECTED THE SAID RETRACTION ON THE GRO UND OF NO FORCE ON THE DEPOSERS WHO GAVE THE STATEMENTS U/S.131 OF THE ACT. IN THIS REGARD, THE ARGUMENTS OF THE ASSESSEE IS THAT ON SIMILAR OR COMPARA BLE FACTS, THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF NOVA IRON AND STEEL LTD. (SUPRA) HE LD THAT THE STATEMENTS OF MR. JAGDISH PUROHIT AND MR. PRADEEP GU PTA AND THE ALLEGATIONS OF THE REVENUE CANNOT CONTRIBUTE TO THE INCRIM INATION OF THE 21 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., DOCUMENTS WHICH ARE OTHERWISE ACCOUNTED IN THE BOOKS O F ACCOUNT OF THE ASSESSEE. NARRATING THE FACTS OF THE CASE, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT SIMILAR DOCUMENTS WERE SEIZED IN THE SAID CASE ALSO AND STATEMENT OF ENTRY OPERATIONS AND THE ACCOUNTANTS WER E RELIED UPON BY THE AO FOR ISSUE OF NOTICE U/S.153C OF THE ACT. FURTHER, WE HA VE COMPARED THE FACTS OF THE PRESENT CASE WITH THAT OF THE NOVA IRON A ND STEEL LTD. VS. DCIT (SUPRA) AND FIND THEY ARE BROADLY COMPARABLE. THE INVESTO R COMPANIES WHO INTRODUCED THE CAPITAL TO NOVA IRON AND STEEL LTD. WHICH WERE STRUCK DOWN IN THE RECORDS OF REGISTRAR OF COMPANIES. THE DELHI BENCH OF T HE TRIBUNAL HELD THAT THE TAINTEDNESS OF SUCH INVESTOR COMPANIES DOES NO T CONTRIBUTE ANY INCRIMINATION TO THE NON-INCRIMINATION MATERIAL SEIZED BY THE DEPARTMENT INVOLVING THE SAID ASSESSEE. THERE ARE NUMBER OF DECISIONS FOR THE PROPOSITION THAT NOTICE ISSUED U/S.153C OF THE ACT BASED ON NON- INCRIMINATING MATERIAL SUCH AS UNACCOUNTED BALANCE SHEET, A NNUAL REPORTS, MEMORANDUM OF ASSOCIATION ETC. ARE NOT VALID AND UNSUSTAINABLE IN LAW. FOR THE SAKE OF COMPLETENESS, THE COMPARISON OF FACTS BE TWEEN THE CASE OF THE ASSESSEE, NOVA IRON AND STEEL LTD. ARE TABULATED HERE AS UN DER : SR. NO. ASSESSEES CASE NOVAS CASE 1 ASSESSEE IS PART OF PRIDE GROUP AND THERE WAS A SEARCH ON PRIDE GROUP. IN COURSE OF SEARCH, THE BALANCE SHEETS, MEMORANDUM OF ASSOCIATION, INCOME TAX RETURNS OF THE COMPANIES WHICH HAD INVESTED SHARE CAPITAL WAS FOUND AND ACCORDINGLY, NOTICE U/S.153C WAS ISSUED. THE ASSESSEE WAS PART OF TODAY GROUP OF CASES AND THERE WAS A SEARCH ON THE SAID GROUP. IN THE COURSE OF SEARCH, DEPT. SEIZED BOOKS OF ACCOUNTS OF THE ASSESSEE AND ACCORDINGLY, NOTICE U/S.153C WAS ISSUED TO THE ASSESSEE. 2 THE NOTICE U/S.153C HAS BEEN CHALLENGED ON THE GROUND THAT NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH. THE NOTICE U/S.153C WAS IN THAT CASE CHALLENGED ON THE GROUND THAT NO INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH. 3 THE DEPT. HAS ALLEGED THAT THE ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY FROM SHRI JAGDISH PUROHIT THE DEPT. FOUND THAT TODAY GROUP HAD RECEIVED ACCOMMODATION ENTRIES FROM SHRI V.K. JAIN AND SHRI S.K. JAIN WHO ARE THE ALLEGED ENTRY OPERATORS 22 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 4 THE SHARE APPLICATION MONEY RECEIVED IS FROM COMPANIES WHICH ARE NOT STRUCK OFF FROM THE ROC RECORDS THE AO HAS NOTED THAT MOST OF THE COMPANIES HAVE BEEN INCORPORATED BEFORE THE AMOUNT IS RECEIVED FROM THE ENTRY OPERATOR. MANY COMPANIES ARE CONSIDERED AS SHELL COMPANIES AND HAS BEEN STRUCK OFF FROM THE ROC RECORD. 5 IN THE ASSESSEES CASE, THE AMOUNT RECEIVED ON ACCOUNT OF SHARE CAPITAL HAS BEEN DULY ACCOUNTED IN THE BOOKS. FURTHER, THE BALANCE SHEETS, INCOME TAX RETURNS, SHARE APPLICATION FORMS OF THE INVESTOR COMPANIES ARE ALL ACCOUNTED AND THEREFORE, CANNOT BE CONSIDERED AS AN INCRIMINATING EVIDENCE FOR ISSUE OF NOTICE U/S.153C. IN PARA 12.8 OF THE ORDER, HONBLE ITAT HAS MENTIONED THAT THE LOANS AND ADVANCES RECEIVED ARE DISCLOSED IN THE BOOKS AND THEREFORE, THE SAME COULD NOT BE TREATED AS AN INCRIMINATING MATERIAL FOR ISSUE OF NOTICE U/S.153C. 6 IN THE ASSESSEES CASE ALSO, THERE IS NO MATERIAL FOUND DURING SEARCH THAT CASH WAS GIVEN TO THE ALLEGED ENTRY OPERATORS. ON PARA 49 OF THE ORDER, HONBLE ITAT HAS HELD THAT NO MATERIAL WAS FOUND THAT THE AMOUNT RECEIVED WAS BOGUS BY GIVING CASH AND TAKING CHEQUE. ON CONSIDERING THE ABOVE ARGUMENTS, WE ARE OF THE OPINION THAT THE FACTS OF ABOVE CASES ARE COMPARABLE TO THE FACTS OF THE PRESENT CASE UNDER CONSIDERATION. 26. LEGAL PROPOSITIONS ON THE ADDITIONAL GROUND : THE VALIDITY OF THE ISSUANCE OF NOTICE U/S.153C OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL WHICH IS THE SUBJECT MATTER OF ADJUDICATION BEFORE US, HAS BEEN DEALT WITH BY VARIOUS JUDICIAL FORA. 27. THE LANGUAGE OF THE ACT MERELY PROVIDES FOR ISSUANCE OF SAID NOTICE WHEN THE AO IS SATISFIED THAT ; (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED , PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELAT ES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A ............... 23 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., THIS IS THE POSITION AFTER THE AMENDMENT BY THE FINANCE A CT, 2005. HOWEVER, THE SAID PROVISIONS ARE EXPLAINED VARIOUS DECISIONS INCLUDING THAT OF APEX COURT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 AND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SINH GAD TECHNICAL EDUCATION SOCIETY VS. ACIT 50 SOT 89 WHICH IS RELEVANT FOR THE FOLLOWING PROPOSITION : CONCLUSION : WHERE NO ASSESSMENT YEAR SPECIFIC INCRIMINATING MAT ERIAL OR DOCUMENT IS FOUND, ASSESSMENTS OF SUCH ASSESSMENT YEARS CANNOT BE DIST URBED BY INVOKING THE PROVISIONS OF S.153C; IN THE ABSENCE OF ANY REFEREN CE TO ANY ASSESSMENT YEAR SPECIFIC INCRIMINATING INFORMATION OR DOCUMENT RELAT ABLE TO THE ASSESSEE FOR THE ASSESSMENT YEARS IN QUESTION IN THE REASONS RECORDE D BY THE AO, IMPUGNED ASSESSMENT UNDER S.153C IS BAD IN LAW. 28. THE SAID PROPOSITION WAS SUBSEQUENTLY APPROVED BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. SINHGAD TEC HNICAL EDUCATION SOCIETY IN CIVIL APPEAL NO.11080/2017 AND OTHERS DATED 29- 08-2017 VIDE PARA NO.11 OF THE JUDGMENT. FOR THE SAKE OF COMPLETENES S, THE SAID OBSERVATIONS OF THE APEX COURT ARE REPRODUCED HERE AS UNDER : 18) THE ITAT PERMITTED THIS ADDITIONAL GROUND BY G IVING A REASON THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FAC TS ALREADY ON THE RECORD AND, THEREFORE, COULD BE RAISED. IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PER THE PROVISIONS OF SECTION 153C OF THE ACT, INCRIMIN ATING MATERIAL WHICH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS IN QU ESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCUMENTS WHICH WERE SEIZE D DID NOT ESTABLISH ANY CO- RELATION, DOCUMENT-WISE, WITH THESE FOUR ASSESSMENT YEARS. SINCE THIS REQUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENT IAL FOR ASSESSMENT UNDER THAT PROVISION, IT BECOMES A JURISDICTIONAL FACT. W E FIND THIS REASONING TO BE LOGICAL AND VALID, HAVING REGARD TO THE PROVISIONS OF SECTION 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT THE IT AT HAD SCANNED THROUGH THE SATISFACTION NOTE AND THE MATERIAL WHICH WAS DISCLO SED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT Y EAR 2004-05 OR THEREAFTER. AFTER TAKING NOTE OF THE MATERIAL IN PARA 9 OF THE ORDER, THE POSITION THAT EMERGES THEREFROM IS DISCUSSED IN PAR A 10. IT WAS SPECIFICALLY RECORDED THAT THE COUNSEL FOR THE DEPARTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS IMPRIMATUR TO THE AFORESAID APPROACH OF THE TRIBUNAL. THAT APART, LEARNED SENIO R COUNSEL APPEARING FOR THE RESPONDENT, ARGUED THAT NOTICE IN RESPECT OF ASSESS MENT YEARS 2000-01 AND 2001-02 WAS EVEN TIME BARRED. 24 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 19) WE, THUS, FIND THAT THE ITAT RIGHTLY PERMITTED THIS ADDITIONAL GROUND TO BE RAISED AND CORRECTLY DEALT WITH THE SAME GROUND ON MERITS AS WELL. ORDER OF THE HIGH COURT AFFIRMING THIS VIEW OF THE TRIBUNAL IS, THEREFORE, WITHOUT ANY BLEMISH. 29. FURTHER, ANOTHER DECISION OF THIS TRIBUNAL IN THE CASE OF BHARATI VIDYAPEETH MEDICAL FOUNDATION IN ITA NO. 959/PN/2010 AND OTHERS, DATED 28-04-2011 IS RELEVANT FOR THE SIMILAR LEGAL PROPOSITION. FOR THE SAKE OF COMPLETENESS, THE OPERATIONAL PARA ON THIS LEGAL ISSUE IS RE PRODUCED HEREIN BELOW : 24. APPEALS BY THE ASSESSEE - AY 2004-05: IN CONNECTION WITH THE AYS AT SL NO (II) ABOVE IE AYS 2004-05, ADMITTEDLY, THERE IS SOME SEIZURE OF THE DOCUMENTS AS EVIDENT FROM THE SATISFACTION NOTE. WE ARE CONVINCED THAT THE SAID LEDGER IS AN ACCOUNTED ONE. FURTHER, THE REASO NING GIVEN BY US IN THE ORDER IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY (SUPRA) APPLY TO THE ISSUE IN THESE APPEALS MUTATIS MUTANDIS. IN OTHER WORDS, TH E VIEWS APPROVED BY THIS BENCH IN THE CASE OF SINHGAD TECHNICAL EDUCATION SO CIETY (SUPRA) AND KUMAR COMPANY (SUPRA) ARE AFFIRMED BY THE SAID JUDGMENT O F THE GUJARAT HIGH COURT IN THE CASE OF VIJAYBHAI N CHANDANI 231CTR 474 (GUJ ) AND MERE APPEARANCE OF NAMES DOES NOT MEAN ANYTHING AS SECTION 153C OF THE ACT IS INTENDED FOR TAXING THE UNDISCLOSED INCOME OF THE THIRD PART Y BASED ON THE MATERIAL/OTHERS SEIZED DURING THE SEARCH ACTION. AS SUCH, ONLY THE UNACCOUNTED AND INCRIMINATING MATERIAL OR OTHERS LISTED IN THE SAID SECTION ARE ONLY SEIZED DURING THE SEARCH AND THE ACCOUNTED DOCUMENTS SHOUL D NOT BE SEIZED. SEIZURE OF THE DOCUMENTS IS AIMED AT THE UNEARTHING OF THE UNACCOUNTED INCOME OF THE ASSESSEE ASSESSABLE U/S 153A OR THE OTHER THIRD PAR TIES SUBJECTED ASSESSMENT U/S 153C OF THE ACT. WHEN THE DOCUMENTS DO NOT INDI CATE ANY UNDISCLOSED INCOME, THE LEDGER IN THE INSTANT CASE, WHAT IS THE RELEVANCE OF SUCH DOCUMENT? SUCH LEDGER CONSTITUTES MERELY AN ACCOUNTED ONE WIT H NO FINANCIAL IMPLICATIONS. THUS, THE DOCUMENTS, THE LEDGER IN THE INSTANT CASE RELEVANT FOR THE AY 2004-05, WITH NO FINANCIAL IMPLICATIONS CAN NEITHER BE CONSIDERED INCRIMINATING NOR BE CONSIDERED CAPABLE OF SPRINGIN G SATISFACTION TO ANY AO THAT THERE IS SCOPE OF UNDISCLOSED INCOME IN RESPECT OF THE THIRD PARTY ASSESSABLE U/S 153C OF THE ACT. ACCORDINGLY, THE LEGAL GROUNDS RAISED IN ALL THESE APPEALS OF THE ASSESSEE RELATING TO THE V ALIDITY OF THE NOTICE U/S 153C OF THE ACT ARE ALLOWED IN FAVOUR OF THE ASSESSEE IN RESPECT OF ALL THE AYS UNDER CONSIDERATION. FURTHER, WE ARE OF THE CONSIDE RED OPINION THAT THE ADJUDICATION OF THE OTHER GROUNDS RELATING TO THE O THER LEGAL AND MERIT ORIENTED ISSUES IS MERELY AN ACADEMIC EXERCISE. THEREFORE, T HE RELEVANT GROUNDS IN ALL THE FOUR APPEALS ARE DISMISSED AS ACADEMIC. 30. OTHER RELEVANT DECISIONS AS FURNISHED BY THE ASSESSEE IN CONNECTION WITH THE LEGAL ISSUE ARE EXTRACTED AS FOLLOWS : A. NOVA IRON AND STEEL LTD. V. DCIT [ITA NO.2159/DE L/14] IN THIS CASE, THERE WAS SEARCH ON THE PREMISES OF M /S. TODAY HOMES AND INFRASTRUCTURE PVT. LTD. AND ITS GROUP CONCERNS. TH E ASSESSEE COMPANY WAS PART 25 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., OF TODAY GROUP OF CASES. IN THE COURSE OF SEARCH, B OOKS OF ACCOUNTS AND DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE FO UND AND SEIZED AND HENCE, THE LEARNED A.O. ISSUED NOTICE U/S.153C TO T HE ASSESSEE COMPANY. THE LEARNED A.O. NOTED THAT THE SAID GROUP WAS GENERATI NG UNACCOUNTED INCOME AND THE FIRMS WERE INFUSED IN VARIOUS COMPANIES IN THE FORM OF SHARE CAPITAL I SHARE PREMIUM THROUGH VARIOUS PAPER COMPANIES. THE A.O. N OTED THAT THE ASSESSEE COMPANY HAD RECEIVED AN AMOUNT OF RS.3.18 CRS. ROUT ED THROUGH VARIOUS COMPANIES AND THE SAME WAS TAXED U/S.68. IT WAS FUR THER NOTED BY THE A.O. THAT ALMOST ALL COMPANIES THROUGH WHOM THE FUNDS WE RE RECEIVED HAD BEEN STUCK OFF AS PER THE ROC RECORD AND THEY WERE DEFAU LTERS IN FILING ANNUAL RETURNS WITH ROC. THESE COMPANIES HAD COMMON ADDRES SES AND THE DEPT. HAD ALSO CONDUCTED SURVEY ON THE OTHER COMPANIES. DURIN G THE SURVEY, IT WAS FOUND THAT NO BUSINESS WAS CARRIED OUT BY THE LENDER COMP ANIES. THE A.O. ALSO REFERRED TO THE STATEMENT OF A FEW PERSONS WHO HAD A DMITTED THAT THEY WERE DUMMY DIRECTORS. THE A.O. ALSO REFERRED TO THE SEIZE PAPER FOUND WHI CH CONTAINED THE INFORMATION RELATING TO DIRECTOR NUMBER, DIGITAL SIGNATURE AND PASSWORD. THE A.O. ALLEGED THAT THE FUNDS WERE ROUTED BY PROVIDING ACCOMMODATI ON ENTRIES AND THEREFORE, HE MADE AN ADDITION U/S. 68. THE ASSESSEE CONTENDED THAT THE NOTICE ISSUED U/S.153C WAS BAD IN LAW AND SECONDLY, EVEN ON MERIT S, NO ADDITION WAS WARRANTED. HON'BLE ITAT HAS CONSIDERED THE RELEVANT FACTS OF THE CASE. FIRSTLY, IT ADMITTED THE ADDITIONAL GROUND RAISED BEFORE IT REG ARDING VALIDITY OF NOTICE U/S.153C ON THE BASIS OF THE DECISION OF HON'BLE SU PREME COURT IN THE CASE OF SINHAGAD TECHNICAL EDUCATION SOCIETY [397 ITR 344]. THEREAFTER, HON'BLE ITAT HAS FURTHER HELD IN PARA 12.8 OF THE ORDER THAT THE DEPT. HAS RECOVER DOCUMENTS FROM THIRD PARTIES. IT HAS FURTHER NOTED THAT THE L OANS AND ADVANCES RECEIVED BY THE ASSESSEE ARE MENTIONED AND DISCLOSED TO THE REV ENUE PRIOR TO SEARCH. THEREFORE, THESE BOOKS OF ACCOUNTS CANNOT BE SAID T O BE INCRIMINATING EVIDENCE. IT IS ALSO NOTED THAT NO EVIDENCE WAS FOUND IN THE COURSE OF SEARCH THAT THE MONEY BELONGED TO THE ASSESSEE. NO EVIDENCE WAS FOU ND THAT CASH WAS GIVEN BY THE ASSESSEE TO TAKE ANY LOAN. ACCORDINGLY, IT H AS BEEN HELD THAT IN THE ABSENCE OF ANY MATERIAL TO PROVE THAT THE LOAN RECE IVED WAS BOGUS, THE REQUIREMENT FOR ISSUE OF NOTICE U/S.153C WAS NOT SATISFIED AND ACCORDINGLY, IN PARA 12.9, HON'BLE ITAT HAS HELD THAT THE NOTICE IS SUED U/S. 153C WAS BAD IN LAW. B. PR. CIT V. SUNNY INFRA PROJECTS LTD. [2017-TIOL- 810-DEL H.C.] IN THIS CASE, SEARCH ACTION WAS CONDUCTED IN THE CA SE OF MINDA GROUP AND ONE SHRI SANTOSH KUMAR JAIN WHO WAS CONSIDERED TO BE AN ENTRY OPERATOR . IN HIS STATEMENT, SHRI JAIN ADMITTED THAT HE WAS PROVIDING ACCOMMODATION ENTRIES. THE A.O. NOTED THAT THE ASSESSEE HAD RECEIVED SHARE CAPITAL FROM BAHUGULI PROPERTIES LTD . , CONCERNED CONTROLLED BY SHRI JAIN. THE A.O. ISSUE NOTICE U/S. 153C TO THE ASSESSEE COMPANY ON THE BASIS OF THE DO CUMENTS SEIZED DURING THE COURSE OF SEARCH ON MINDA GROUP. HON'BLE H.C. HELD THAT THE DOCUMENTS ON THE BASIS OF WHICH NOTICE U/S. 153C WAS ISSUED WERE BASICALLY COPIES OF BALANCE SHEET ABSTRACTS, AUDITOR'S ACCOUN T , COMPANIES GENERAL PROFILE, INCOME TAX RETURN, TRIAL BALANCES. AFTER CONSIDERIN G THE DOCUMENTS FOUND, HON'BLE H . C. HAS HELD THAT THE NOTICE ISSUED U/S 153C WAS INV ALID IN LAW BECAUSE THE DOCUMENTS SEIZED DID NOT INDICATE ANY I NCOME WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN THE ORIGINAL RETURN. C. RAVNET SOLUTIONS PVT. LTD. [93 TAXMANN.COM 59] IN THIS CASE, SEARCH WAS CONDUCTED ON ASSEM GUPTA GROUP OF CASES WHO WAS ALLEGEDLY ENGAGED IN PROVIDING ACCOMMODATION ENTRIES T O S EVERAL BENEFICIARIES. SUBSEQUENTLY, SEARCH WAS ALSO CONDUCTED ON THE ASSESSEE. THE ASSESSEE CO MPANY HAVE RECEIVED SHARE PREMIUM AND THE SAME WAS TAXED U/S.68 BY THE LEARNED A.O. BEFORE HON'BLE ITAT, THE ASSESSEE STATED THAT THE ADDITION WAS NOT WARRANTED IN THE ABSENCE OF ANY INCRIMINATING EVIDENCE FOUND AS A RE SULT OF SEARCH. ON PERUSAL 26 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., OF THE FACTS, IT WAS HELD THAT NO INCRIMINATING EVID ENCE WAS FOUND IN THE COURSE OF SEARCH AND THE ADDITION WAS DELETED. D. DCIT V. SAGAR NAHTA [82 TAXMANN.COM 344 (KOL)] THE ASSESSEE WAS A PRACTICING C.A. FOLLOWING THE SEARCH AND SEIZURE AC TION IN BHUSHAN GROUP OF COMPANY , SEARCH WAS CONDUCTED ON THE ASSESSEE WHEREIN CERTAI N DOCUMENTS BELONGING TO 31 COMPANIES WERE FOUND. THE A.O. ALLE GED THAT THE ASSESSEE HAS PROVIDED ACCOMMODATION ENTRIES AND THEREBY EARN COM MISSION. HON'BLE ITAT HELD THAT NO EVIDENCE WAS BROUGHT ON RECORD TO PROV E THAT THE ASSESSEE HAD EARN COMMISSION. FURTHER, NO MATERIAL WAS BROUGHT O N RECORD TO ESTABLISH THE MONEY TRADE AND ACCORDINGLY , THE ADDITION WAS DELETED. E. BHARATI VIDYAPEETH [ITA NO. 917 - 922/PN/10] IN THIS CASE, THERE WAS SEARCH ON SHRI R. D. SHINDE AND ON THE BASIS OF THE MATERIAL SEIZED FROM HIM, NOTICE U/S 153C WAS ISSUE D TO BHARATI VIDYAPEETH. IN THAT CASE, THE ALLEGATION OF THE DEPT. WAS THAT THE ASSESSEE WAS CHARGING CAPITATION FEE AND THE DEPT. THE DEPT. WAS ALSO REC ORDED THE STATEMENT OF SHRI SHINDE WHEREIN HE HAD CONFIRMED THE SAID FACT. THE ASSESSEE CONTENDED THAT THE DOCUMENTS SEIZED DID NOT INDICATE ANY INCRIMINA TING EVIDENCE. FURTHER , THE INWARD REGISTER FOR APPLICATIONS RECEIVED UNDER MAN AGEMENT QUOTA WAS FOUND. IT WAS STATED THAT NEAR REGISTER WITHOUT ANY DETAIL S REGARDING CASH RECEIVED CANNOT BE SAID TO BE INCRIMINATING AND ACCORDINGLY, HON'BLE ITAT HELD THAT THE NOTICE ISSUED U/S 153C WAS BAD IN LAW. SIMILAR IS T HE RATIO LAID DOWN IN THE CASE OF BHARATI VIDYAPEETH MEDICAL FOUNDATION [ITA NO. 959-967/PN/10]. F. PR. CIT V. INDEX SECURITIES PVT. LTD. [86 TAXMA NN.COM 84 (DEL)] IN THIS CASE, A SEARCH AND SEIZURE ACTION WAS CONDUCTED ON JAGAT GROUP AND ITS DIRECTORS. IN THE COURSE OF SEARCH, TRIAL BALANCE A ND BALANCE SHEET OF THE ASSESSEE WAS FOUND AND ON THAT BASIS, NOTICE U/S.15 3C WAS ISSUED TO THE ASSESSEE COMPANY. THEREAFTER, THE LEARNED A.O. COMP LETED THE ASST. BY MAKING AN ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY R ECEIVED BY THE ASSESSEE. THE VALIDITY OF NOTICE ISSUED U/S.153C WAS CHALL E NGED BY THE ASSESSEE. IN THAT CONTEXT, HON'BLE COURT HELD IN PARA 31 OF THE ORDER THAT AS PER THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SINHAGAD TECHN ICAL EDUCATION SOCIETY , FOR ISSUE OF NOTICE U/S.153C, THE DOCUMENTS SEIZED MUST BE INCRIMINATING AND MUST RELATE TO EACH OF THE ASST. YEARS WHICH ARE SOUGHT TO BE REOPENED. ACCORDINGLY, THE NOTICE ISSUED U/S.153C WAS HELD TO BE INVALID I N LAW. G . PR. CIT V. SMT SUNITA BAI [78 TAXMANN.COM 274 (KAR) ] IN THIS CASE, THE ISSUE RAISED BEFORE HON'BLE H . C . WAS WHETHER NOTICE U/S.153C COULD BE ISSUED WHEN THERE WAS NO INCRIMINATING DOCUMENT OR EVIDENC E DISCOVER DURING THE COURSE OF SEARCH. ON THIS ISSUE, HON'BLE COURT HAS HELD THAT IN THE ABSENCE OF ANY INCRIMINATING EVIDENCE, NO NOTICE U/S.153C CAN BE ISSUED. H. DCIT V. ROYAL CARTONS PVT. LTD. [ITA NO.472/COC H/2013 (TM)] IN THIS CASE, IT HAS BEEN HELD BY HON'BLE THIRD MEM BER THAT IN THE ABSENCE OF INCRIMINATING MATERIAL, NOTICE U/S.153C CANNOT BE IS SUED BY THE A.O. IT IS ALSO HELD THAT THE DOCUMENT FOUND SHOULD INDICATE THAT F OR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD NOT OFFERED THE INC OME TO TAX. FROM THE ABOVE, IT IS EVIDENT THAT THE EXPRESSION DOCUM ENTS REFERS TO IN THE SUB-SECTION (1) OF SECTION 153C OF THE ACT, NEEDS TO BE U NDERSTOOD IN THE CONTEXT OF INCRIMINATING DOCUMENTS. 27 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., 31. FURTHER, WE HAVE ALSO EXAMINED THE DECISIONS RELIED UPON BY THE L D. DR FOR THE REVENUE. THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF GANPATI FINCAP SERVICES PVT. LTD. VS. CIT 82 TAXMANN.COM 408 (DELHI) IS FOUND DELIVERED IN THE CONTEXT OF THE EXPRESSION DOCUMEN TS BELONGING TO ASSESSEE BUT ALSO IN THE CONTEXT OF NON-INCRIMINATING DO CUMENTS. AFTER ANALYZING THE DOCUMENTS SEIZED, THE DETAILS OF WHICH ARE A NALYSED IN THE SATISFACTION NOTE (PARA 6 OF THE JUDGMENT), THE HONBLE HIGH COURT HELD THAT THE DOCUMENTS SO DISCUSSED IN THE SAID SATISFACTION NOTE CANNOT BE CONSIDERED NON-INCRIMINATING AND THE DOCUMENTS SO DISCUSS ED IN THE NOTE NOT ONLY INCLUDES ACCOUNTED PROFIT AND LOSS ACCOUNT, BALAN CE SHEET ETC. BUT ALSO AN UNSIGNED INDEMNITY BOND, UNSIGNED MEMORANDUM OF UN DERSTANDING BETWEEN THE OUTGOING DIRECTORS OF THE COMPANY AND THE BUYERS OF THE COMPANY. CONSIDERING THE UNSIGNED PAPERS, THE HONBLE HIG H COURT HAS COME TO THE CONCLUSION THAT THE SAID DOCUMENTS CAN B E CONSIDERED AS INCRIMINATING DOCUMENTS. AFTER ANALYZING THE SAME, WE FIND T HE DECISION CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE WHER E ALL THE DOCUMENTS SEIZED ARE THE ONES WHICH ARE ALREADY EITHER REPORTED T O THE GOVT. AUTHORITIES ARE PERTAINING TO THE ASSESSEE COMPANY WHICH ARE DULY RECORDED IN THE BOOKS OF ACCOUNT OR OTHERS. THERE ARE NO UNSIGNED MEMORAND UM OF UNDERSTANDINGS OR INDEMNITY BONDS AS IN THE CASE OF GANPATI FINCAP SERV ICES PVT. LTD. (SUPRA). 32. FURTHER, WE HAVE ALSO ANALYSED ANOTHER JUDGMENT OF HONBLE APEX COURT RELIED BY THE LD. DR FOR THE REVENUE IN THE CASE O F CIT VS. RRJ SECURITIES LTD. 79 TAXMANN.COM 115 (SC). THE ISSUE IN THIS C ASE RELATES TO THE VALIDITY OF NOTICE ISSUED U/S.153C OF THE ACT WHEN THE SEIZURE INCLUDES HARD DISK WORKING PAPERS BELONGING TO RRJ SECURITIES LTD., T HE HONBLE HIGH COURT OF DELHI HELD THAT SUCH HARD DISK DID NOT CONTAIN AN Y INCRIMINATING 28 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., MATERIAL. THEREFORE, THE NOTICE ISSUED U/S.153C OF THE ACT IS NOT VALIDLY ISSUED ON THE BASIS OF SAID HARD DISK. OF COURSE, THE SLP WAS ADMITTED B Y THE SUPREME COURT AGAINST THE SAID ORDER OF DELHI HIGH COURT. CONSIDERING THE ABOVE LEGAL PROPOSITION ON THE ISSUE OF VALID ITY OF NOTICE U/S.153C OF THE ACT AS WELL AS THE NATURE OF NON-INCRIMINATING MATERIAL SEIZED IN THE CASE ON HAND FOR A.Y. 2011-12, WE ARE OF THE OPINION THAT NOTICE ISSUED U/S.153C OF THE ACT IS NOT VALID. THE DOCUMENTS SEIZED P ERTAINING TO/BELONGING TO THE ASSESSEE IS ONLY NON-INCRIMINATING DOC UMENTS. REGARDING THE VALIDITY OF SIMILAR NOTICE FOR A.Y. 2010-11, WE FIN D NO DOCUMENT WHATSOEVER WAS SEIZED. THEREFORE, THE FATE OF SUCH NOTIC E IS PLACED AT MUCH WORSE POSITION. THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SAME IS THE FINDING GIVEN BY US IN THE CASE OF PRIME CENTRE AND DEVELOPERS PRIVATE LTD. VS. DCIT VIDE ITA NOS. 285 TO 287 /PUN/2016, DECIDED ON 14-08-2018. SPECIFIC TO THE FACTS RELATING TO T HIS CASE ARE INCORPORATED IN THIS ORDER AS AND WHEN THEY ARE REQUIRED. 33. GROUNDS ON MERITS IN BOTH ASSESSMENT YEARS : REGARDING THE ISSUES RAISED BY THE ASSESSEE ON MERITS, WE FIND THE ADJUDICATION OF THE SAME BECOMES AN ACADEMIC EXERCISE. THEREFORE, THE REGULAR GRO UNDS RAISED BY THE ASSESSEE ARE DISMISSED AS ACADEMIC. 34. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.284/PUN/2016 A.Y. 2011-12 35. THE FACTS, GROUNDS/ADDITIONAL GROUND/ISSUES, DECISION OF AO/CIT(A) AND THE ARGUMENTS OF THE REPRESENTATIVES ARE SAME AS THAT OF APPEAL ITA 29 ITA NOS. 283 & 284/PUN/2016 PRIDE PURPLE BUILDERS PVT. LTD., NO.283/PUN/2016 FOR A.Y. 2010-11. THEREFORE, THE FINDING GIV EN ON THE ADDITIONAL GROUND IN A.Y. 2010-11 APPLY TO THIS ASSESSMENT YEAR TOO. ACCORDINGLY, THE ADDITIONAL GROUND IS ALLOWED AND THE REGULA R GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 36. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 37. TO SUM UP, BOTH THE APPEALS FILED BY THE ASSESSEE ARE PARTLY A LLOWED. ORDER PRONOUNCED ON 17 TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( /VIKAS AWASTHY) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 17 TH SEPTEMBER, 2018. SATISH # # # # / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-13, PUNE. 4. THE PR. CIT (CENTRAL), PUNE. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE.