M/s. Sangyon Automotive Pvt. Ltd., New Delhi V. ACIT, Meerut

ITA 2993/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0029 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: G C SRIVASTAVA; SUVINAY K DASH S
• Keywords: Search and seizure; Opportunity of being heard; Question of law; Accommodation entries; Assessment record; Capital receipt; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 68; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO.2991 TO 2993/DEL/2015 ASSESSMENT YEARS: 2005-06, 2006-07 & 2008-09 M/S SANGYON AUTOMOTIVE PVT. LTD., 14D, 14 TH FLOOR, HANSALAYA, 15, BARAKHAMBA ROAD, NEW DELHI. PAN: AAGCS5366L VS. ACIT, CENTRAL CIRCLE, BHAINSALI ROAD, MEERUT. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.C. SRIVASTAVA & SHRI SUVINAY K. DASH, ADVOCATES REVENUE BY : SHRI S.S. RANA, CIT, DR DATE OF HEARING : 13.09.2018 DATE OF PRONOUNCEMENT : 10.12.2018 ORDER PER R.K. PANDA, AM: THE ABOVE BATCH OF APPEALS FILED BY THE ASSESSEE AR E DIRECTED AGAINST THE SEPARATE ORDERS DATED 10 TH MARCH, 2015 OF THE CIT(A), MEERUT, RELATING TO ASS ESSMENT YEARS 2005-06, 2006-07 AND 2008-09, RESPECTIVELY. SINCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN ALL THESE APPEALS, THEREFO RE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NOS.2991 TO 2993/DEL/2015 2 ITA NO.2991/DEL/2015 (A.Y. 2005-06) 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT THE AS SESSEE IS A COMPANY AND DERIVES INCOME FROM SALE OF SHARES AND INTEREST ON LOAN. I T FILED ITS RETURN OF INCOME ON 27 TH OCTOBER, 2005 DECLARING TOTAL INCOME OF RS.8,850/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 28 TH MARCH, 2007 ACCEPTING THE RETURNED INCOME. SUBSEQ UENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AS PER CBDT CENTRAL ACTION PLAN FOR FINANCIAL YEAR 2006-07 COMPULSORY SCRUTINY FOR CORP ORATE ASSESSEES. IN RESPONSE TO NOTICE U/S 143(2) AND 142(1) OF THE ACT, THE ASSESS EE APPEARED BEFORE THE ASSESSING OFFICER AND FILED THE REQUISITE DETAILS. BASED ON THE DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) ON 6 TH DECEMBER, 2007 DETERMINING THE TOTAL INCOME AT RS.10,850/-. 3. SUBSEQUENTLY, A SEARCH OPERATION U/S 132 OF THE IT ACT WAS CARRIED OUT IN THE SUBHARTI GROUP OF CASES ON 12.11.2010. BEING A PAR T OF THE SEARCH, A SEARCH WAS CARRIED OUT AT THE BANK ACCOUNTS OF THE ASSESSEE SI TUATED AT ORIENTAL BANK OF COMMERCE, SUBHARTI DENTAL COLLEGE BRANCH, SUBHARTIP URAM, MEERUT, ORIENTAL BANK OF COMMERCE, MALIYANA BRANCH, MEERUT AND ORIENTAL BANK OF COMMERCE, SADAR BAZAR, MEERUT CANTT. ON 04.12.2010. DURING THE SEARCH, FOL LOWING FDRS AND CASH HAVE BEEN FOUND AND SEIZED:- FDR RS.3,34,50,000/- (OBC, SUBHARTI DENTAL COLLEG E BRANCH, SUBHARTIPURAM, MEERUT) CASH RS.55,890/- (OBC MALIYANA BRANCH, MEERUT) FDR RS.18,82,83,070/- (OBC, SADAR BAZAR, MEERUT C ANTT.) ITA NOS.2991 TO 2993/DEL/2015 3 4. IN RESPONSE TO NOTICE U/S 153A OF THE IT ACT, TH E ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.8,846/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED FROM TH E BALANCE SHEET OF THE ASSESSEE COMPANY THAT IT HAD ISSUED EQUITY SHARES OF RS.5,40 ,600/- ON A PREMIUM OF RS.2,64,89,400/- DURING THE YEAR UNDER CONSIDERATI ON. HE, THEREFORE, ASKED THE ASSESSEE COMPANY, VIDE QUESTIONNAIRE DATED 18 TH OCTOBER, 2012 TO FURNISH DETAILS AS TO HOW THE PREMIUM WAS WORKED OUT BY THE ISSUE MANAGER S, AUDITORS, ETC., AND THE COPIES OF THE WORKING AND MATERIAL RELIED ON. IN ABSENCE OF ANY COMPLIANCE TO THE STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER FROM TIME T O TIME TO PROVE THE IDENTITY, CREDIT WORTHINESS AND CAPACITY OF THE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SEC TION 68 OF THE ACT AND RELYING ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTORS & FINLEASE (P) LTD. (2012) 18 TAXMANN.COM 217 (DEL) , MADE AN ADDITION OF RS.2,70,30,000/- TO THE TOTAL INCOME OF THE ASSESSE E. 5. SIMILAR ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER AT RS.22,04,20,000/- FOR ASSESSMENT YEAR 2006-07. 6. SO FAR AS THE ASSESSMENT YEAR 2008-09 IS CONCERN ED, THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVE D THAT THE ASSESSEE HAS SHOWN TO HAVE RECEIVED INTEREST FREE UNSECURED LOAN OF RS.6 CRORE. SINCE THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTION, THE ASSESSING OFFICER, RELYING ON THE DECISION OF THE HON'BLE SUPREME ITA NOS.2991 TO 2993/DEL/2015 4 COURT IN THE CASE OF CIT VS. DURGA PRASAD MORE, 82 ITR 540 (SC) AND THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTORS & FINLEASE (P) LTD. (2012) 18 TAXMANN.COM 217 (DEL) ADDED AN AMOUNT OF RS6 CRORE U/S 68 OF THE IT ACT. 7. BEFORE THE CIT(A), THE ASSESSEE MADE ELABORATE S UBMISSIONS. IT WAS SUBMITTED THAT THE ISSUE OF INCREASE IN SHARE CAPITAL WERE EX AMINED IN THE ORIGINAL ASSESSMENT FOR ASSESSMENT YEAR 2005-06 AND 2006-07 AND NO ADVERSE FINDING WAS GIVEN BY THE ASSESSING OFFICER IN THE ORDER PASSED U/S 143(3). IT WAS SUBMITTED THAT ON THE DATE OF SEARCH, ASSESSMENT FOR ANY OF THE ASSESSMENT YEAR W AS NOT PENDING AND NO INCRIMINATING DOCUMENT RELATING TO THE ISSUE OF INC REASE OF SHARE PREMIUM OR UNSECURED LOAN WAS FOUND OR SEIZED DURING THE SEARC H. THE ASSESSEE SUBMITTED THAT THE DETAILS WHICH WERE CALLED FOR BY THE ASSESSING OFFI CER WERE ALSO SUBMITTED BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT P ROCEEDINGS FOR A.YS 2005-06 AND 2006-07. REFERRING TO THE DECISION OF THE MUMBAI B ENCH OF THE TRIBUNAL IN THE CASE OF AL CARGO GLOBAL LOGISTICS LTD. VS. DCIT , IT WAS SUBMITTED THAT NO ADDITION CAN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT MEERUT VS. NAV BHARAT DUPLEX LTD. (2013) 35 TAXMANN. 289 WAS ALSO BROUGHT TO THE NOTICE OF THE CIT(A). ITA NOS.2991 TO 2993/DEL/2015 5 8. HOWEVER, THE LD.CIT(A) WAS ALSO NOT SATISFIED WI TH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE AS SESSING OFFICER BY OBSERVING AS UNDER:- 4.4 I HAVE GONE THROUGH THE RIVAL SUBMISSION AS ABOVE. THE ENTIRE ARGUMENT OF THE AR IS PRIMARILY BASED ON THE FACT THAT FIRSTLY, ORIGINAL ASSESSMENT WAS ALREADY ABATED AND SECONDLY, THAT IN THE SEARCH, NO INCRIMI NATING MATERIAL WAS FOUND. HOWEVER, THE AO HAS MENTIONED IN THE VERY FIRST PAR AGRAPH OF THE ASSESSMENT ORDER THAT FDRS WORTH RS.22,17,33,070/- (3,34,50,00 0 + 18,82,83,070) WERE FOUND AND SEIZED DURING THE SEARCH. IT IS FURTHER S EEN FROM RECORD THAT THE COMPANY HAD SHOWN THE FOLLOWING RETURNED INCOME FOR THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK PERIOD: ASSESSMENT YEAR RETURNED INCOME 2005-06 RS.8,846/- 2006-07 RS. (-) 18,070/- 2007-08 RS. NIL 2008-09 RS.(-) 8,669/- 2009-10 RS. 8,403/- 2010-11 RS. 7,358/- FROM THE ABOVE DATA, .IT IS OBVIOUS THAT THE ASSESS EE HAS HARDLY ANY BUSINESS. IN THIS SITUATION, SEIZURE OF RS 22,17,33,070/- FROM T HE BANK ACCOUNT OF THE ASSESSEE CONSTITUTES SUFFICIENT INCRIMINATING MATERIAL UPON WHICH THE ENTIRE AFFAIRS OF THE ASSESSEE CAN BE EXAMINED. THIS IS PRECISELY WHAT TH E AO HAS ATTEMPTED TO DO IN THE ASSESSMENT ORDER MADE SUBSEQUENT TO THE SEARCH. 4.5 THE AR HAS RELIED HEAVILY ON THE JUDGMENT GIVEN BY THE ITAT MUMBAI, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS D CIT CENTRAL CIRCLE 44 (2012) 137 ITD 0026. HOWEVER, THE FACTS OF THE NARRATED CA SE ARE DIFFERENT FROM THE CASE OF THE APPELLANT BECAUSE IN THAT CASE, NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. ON THE OTHER HAND, IN THIS CA SE, FDRS AMOUNTING TO RS. 22,17,33,070/- WAS SEIZED FROM THE BANK ACCOUNT OF THE ASSESSEE. NEEDLESS TO SAY, THIS FACT WAS NOT AVAILABLE AT THE TIME OF THE ORIGINAL ASSESSMENT. THUS, THE FACT THAT THE ORIGINAL ASSESSMENT HAS ABATED WILL N OT MAKE ANY DIFFERENCE BECAUSE INCRIMINATING MATERIAL WAS INDEED FOUND IN THE FORM OF FDRS IN THIS CASE. IN THE JUDGMENT GIVEN BY THE ITAT MUMBAI, THE HONBLE ITAT HAD REMARKED THAT ASSESSMENT U/S 153A CAN BE MADE ON THE BASIS OF UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 4.6 FROM THE FACTS OF THE CASE, IT IS SEEN THAT THE TER M DEPOSIT OF RS.18,82,83,070/- SEIZED FROM A/C NO.001730310459 34 IN ORIENTAL BANK OF COMMERCE, MEERUT CANTT. BRANCH, MEERUT HAS BEEN PLE DGED AS THIRD PARTY GUARANTEE TO A LOAN SANCTIONED TO SUBHARTI KKB CHAR ITABLE TRUST BY THE BANK. ITA NOS.2991 TO 2993/DEL/2015 6 THUS, BOTH THE GENERATION AS WELL THE APPLICATION O F SHARE CAPITAL AND SHARE APPLICATION MONEY IS PRIMA FACIE DUBIOUS AND THE A. O. HAD RIGHTLY EXAMINED THE SAME IN THE ASSESSMENT ORDER U/S 153A/143(3). 4.7 FROM A CAREFUL STUDY OF THE WRITTEN SUBMISSION MAD E BY THE AR, IT IS SEEN THAT THE APPELLANT HAD NOT BEEN ABLE TO ANSWER THE QUERIES RAISED BY THE AO IN THE ASSESSMENT ORDER. THE BASIC QUESTION WHICH I S TO BE ANSWERED HERE IS - WHY WOULD ANY PRUDENT BUSINESS ESTABLISHMENT INVEST IN THE APPELLANT COMPANY BY PAYING HEAVY PREMIUM? IT IS SEEN FROM RECORD THAT T HE ASSESSEE COMPANY HAS ISSUED EQUITY SHARES OF RS. 5,40,600/- ON A PREMIUM OF RS. 2,64,89,400/- DURING THE YEAR UNDER CONSIDERATION. AS MENTIONED ABOVE, T HE APPELLANT COMPANY DID NOT HAVE ANY NET WORTH. IN THIS SITUATION IT SEEMS HIGH LY UNLIKELY THAT THE SHARES OF COMPANY WOULD COMMAND A PREMIUM OF RS. 490/- PER EQ UITY SHARE. MOREOVER, THE COMPANIES WHO HAVE INVESTED IN THE SHARES OF TH E APPELLANT COMPANY HAVE NOT EARNED ANY INCOME ON THEIR INVESTMENT. THE ENTI RE SETUP SMACKS OF ACCOMMODATION ENTRIES WHICH HAVE BEEN EXPOSED BY TH E SEARCH OPERATION CONDUCTED BY THE INCOME TAX DEPARTMENT. I, THEREFOR E AGREE WITH THE CONCLUSION REACHED BY THE AO THAT THERE IS NO SATISFACTORY EXP LANATION OF MONEY RECEIVED BY THE APPELLANT COMPANY ON ACCOUNT OF SHARE APPLICATI ON AND THE SAME HAS BEEN RIGHTLY ADDED BY THE AO. 4.8 THE AR HAS ALSO QUOTED THE JUDGMENT OF HONBLE ALL AHABAD HIGH COURT IN THE CASE OF CIT MEERUT VS NAV BHARAT DUPLEX LTD. AS PER THE AR, IT HAS BEEN HELD IN THIS JUDGMENT THAT ONLY IDENTITY OF THE SHA REHOLDER IS REQUIRED TO BE ESTABLISHED. THE AR HAS FURTHER STATED THAT THE IDE NTITY WAS ESTABLISHED DURING THE COURSE OF ORIGINAL ASSESSMENT. HOWEVER, AS MENTIONE D ABOVE, NEW AND INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH AND DURING THE ASSESSMENT MADE SUBSEQUENT TO SEARCH EVEN THE IDENT ITY OF THE SHARE APPLICANTS WERE NOT ESTABLISHED. 4.9 CONSIDERING THE TOTALITY OF FACTS AND ON THE BASIS OF DISCUSSIONS MADE ABOVE, I HAVE COME TO A CONCLUSION THAT ADDITION OF RS. 2, 70,30,000/- WAS RIGHTY MADE BY THE AO. GROUND OF APPEAL NO.L IS DISMISSED AND A DDITION OF RS. 2,70,30,000/- IS CONFIRMED. 9. THE CIT(A), IN IDENTICAL MANNER, HAS UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER FOR OTHER TWO YEARS ALSO AS UNDER:- ASSESSMENT YEAR : 2006-07 4.4 I HAVE GONE THROUGH THE RIVAL SUBMISSION AS ABOVE. THE ENTIRE ARGUMENT OF THE AR IS PRIMARILY BASED ON THE FACT THAT FIRSTLY, ORIGINAL ASSESSMENT WAS ALREADY ITA NOS.2991 TO 2993/DEL/2015 7 ABATED AND SECONDLY, THAT IN THE SEARCH, NO INCRIMI NATING MATERIAL WAS FOUND. HOWEVER, THE AO HAS MENTIONED IN THE VERY FIRST PAR AGRAPH OF THE ASSESSMENT ORDER THAT FDRS WORTH RS.22,17,33,070/- (3,34,50,00 0 + 18,82,83,070) WERE FOUND AND SEIZED DURING THE SEARCH. IT IS FURTHER S EEN FROM RECORD THAT THE COMPANY HAD SHOWN THE FOLLOWING RETURNED INCOME FOR THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK PERIOD: ASSESSMENT YEAR RETURNED INCOME 2005-07 RS.8,846/- 2006-08 RS. (-) 18,070/- 2007-09 RS. NIL 2008-10 RS.(-) 8,669/- 2009-11 RS. 8,403/- 2010-11 RS. 7,358/- FROM THE ABOVE DATA, .IT IS OBVIOUS THAT THE ASSESS EE HAS HARDLY ANY BUSINESS. IN THIS SITUATION, SEIZURE OF RS 22,17,33,070/- FROM T HE BANK ACCOUNT OF THE ASSESSEE CONSTITUTES SUFFICIENT INCRIMINATING MATERIAL UPON WHICH THE ENTIRE AFFAIRS OF THE ASSESSEE CAN BE EXAMINED. THIS IS PRECISELY WHAT TH E AO HAS ATTEMPTED TO DO IN THE ASSESSMENT ORDER MADE SUBSEQUENT TO THE SEARCH. 4.5. THE AR HAS RELIED HEAVILY ON THE JUDGMENT GIVEN BY THE ITAT MUMBAI, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS D CIT CENTRAL CIRCLE 44 (2012) 137 ITD 0026. HOWEVER, THE FACTS OF THE NARRATED CA SE ARE DIFFERENT FROM THE CASE OF THE APPELLANT BECAUSE IN THAT CASE, NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. ON THE OTHER HAND, IN THIS CA SE, FDRS AMOUNTING TO RS. 22,17,33,070/- WAS SEIZED FROM THE BANK ACCOUNT OF THE ASSESSEE. NEEDLESS TO SAY, THIS FACT WAS NOT AVAILABLE AT THE TIME OF THE ORIGINAL ASSESSMENT. THUS, THE FACT THAT THE ORIGINAL ASSESSMENT HAS ABATED WILL N OT MAKE ANY DIFFERENCE BECAUSE INCRIMINATING MATERIAL WAS INDEED FOUND IN THE FORM OF FDRS IN THIS CASE. IN THE JUDGMENT GIVEN BY THE ITAT MUMBAI, THE HONBLE ITAT HAD REMARKED THAT ASSESSMENT U/S 153A CAN BE MADE ON THE BASIS OF UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 4.6 FROM THE FACTS OF THE CASE, IT IS SEEN THAT THE TERM DEPOSIT OF RS.18,82,83,070/- SEIZED FROM A/C NO.001730310459 34 IN ORIENTAL BANK OF COMMERCE, MEERUT CANTT. BRANCH, MEERUT HAS BEEN PLE DGED AS THIRD PARTY GUARANTEE TO A LOAN SANCTIONED TO SUBHARTI KKB CHAR ITABLE TRUST BY THE BANK. THUS, BOTH THE GENERATION AS WELL THE APPLICATION O F SHARE CAPITAL AND SHARE APPLICATION MONEY IS PRIMA FACIE DUBIOUS AND THE A. O. HAD RIGHTLY EXAMINED THE SAME IN THE ASSESSMENT ORDER U/S 153A/143(3). 4.7 FROM A CAREFUL STUDY OF THE WRITTEN SUBMISSION MADE BY THE AR, IT IS SEEN THAT THE APPELLANT HAD NOT BEEN ABLE TO ANSWER THE QUERIES RAISED BY THE AO IN THE ASSESSMENT ORDER. THE BASIC QUESTION WHICH I S TO BE ANSWERED HERE IS - WHY WOULD ANY PRUDENT BUSINESS ESTABLISHMENT INVEST IN THE APPELLANT COMPANY BY ITA NOS.2991 TO 2993/DEL/2015 8 PAYING HEAVY PREMIUM? IT IS SEEN FROM RECORD THAT T HE ASSESSEE COMPANY HAS ISSUED EQUITY SHARES OF RS.44,08,400/- ON A PREMIUM OF RS. 21,60,11600/- DURING THE YEAR UNDER CONSIDERATION. AS MENTIONED ABOVE, T HE APPELLANT COMPANY DID NOT HAVE ANY NET WORTH. IN THIS SITUATION IT SEEMS HIGH LY UNLIKELY THAT THE SHARES OF COMPANY WOULD COMMAND A PREMIUM OF RS. 490/- PER EQ UITY SHARE. MOREOVER, THE COMPANIES WHO HAVE INVESTED IN THE SHARES OF TH E APPELLANT COMPANY HAVE NOT EARNED ANY INCOME ON THEIR INVESTMENT. THE ENTI RE SETUP SMACKS OF ACCOMMODATION ENTRIES WHICH HAVE BEEN EXPOSED BY TH E SEARCH OPERATION CONDUCTED BY THE INCOME TAX DEPARTMENT. I, THEREFOR E AGREE WITH THE CONCLUSION REACHED BY THE AO THAT THERE IS NO SATISFACTORY EXP LANATION OF MONEY RECEIVED BY THE APPELLANT COMPANY ON ACCOUNT OF SHARE APPLICATI ON AND THE SAME HAS BEEN RIGHTLY ADDED BY THE AO. 4.8. THE AR HAS ALSO QUOTED THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT MEERUT VS NAV BHARAT DUPLEX LTD. AS PER THE AR, IT HAS BEEN HELD IN THIS JUDGMENT THAT ONLY IDENTITY OF THE SHA REHOLDER IS REQUIRED TO BE ESTABLISHED. THE AR HAS FURTHER STATED THAT THE IDE NTITY WAS ESTABLISHED DURING THE COURSE OF ORIGINAL ASSESSMENT. HOWEVER, AS MENTIONE D ABOVE, NEW AND INCRIMINATING EVIDENCE WAS FOUND DURING THE COURSE OF SEARCH AND DURING THE ASSESSMENT MADE SUBSEQUENT TO SEARCH EVEN THE IDENT ITY OF THE SHARE APPLICANTS WERE NOT ESTABLISHED. 4.9 CONSIDERING THE TOTALITY OF FACTS AND ON THE BA SIS OF DISCUSSIONS MADE ABOVE, I HAVE COME TO A CONCLUSION THAT ADDITION OF RS. 22 ,04,20,000/- WAS RIGHTY MADE BY THE AO. GROUND OF APPEAL NO.L IS DISMISSED AND A DDITION OF RS. 22,04,20,000/- IS CONFIRMED. ASSESSMENT YEAR : 2008-09 4.4 I HAVE GONE THROUGH THE RIVAL SUBMISSION AS ABOVE. THE ENTIRE ARGUMENT OF THE AR IS PRIMARILY BASED ON THE FACT THAT FIRSTLY, ORIGINAL ASSESSMENT WAS ALREADY ABATED AND SECONDLY, THAT IN THE SEARCH, NO INCRIMI NATING MATERIAL WAS FOUND. HOWEVER, THE AO HAS MENTIONED IN THE VERY FIRST PAR AGRAPH OF THE ASSESSMENT ORDER THAT FDRS WORTH RS.22,17,33,070/- (3,34,50,00 0 + 18,82,83,070) WERE FOUND AND SEIZED DURING THE SEARCH. IT IS FURTHER S EEN FROM RECORD THAT THE COMPANY HAD SHOWN THE FOLLOWING RETURNED INCOME FOR THE ASSESSMENT YEARS FALLING WITHIN THE BLOCK PERIOD: ASSESSMENT YEAR RETURNED INCOME 2005-08 RS.8,846/- 2006-09 RS. (-) 18,070/- 2007-10 RS. NIL 2008-11 RS.(-) 8,669/- 2009-12 RS. 8,403/- 2010-11 RS. 7,358/- ITA NOS.2991 TO 2993/DEL/2015 9 FROM THE ABOVE DATA, .IT IS OBVIOUS THAT THE ASSESS EE HAS HARDLY ANY BUSINESS. IN THIS SITUATION, SEIZURE OF RS 22,17,33,070/- FROM T HE BANK ACCOUNT OF THE ASSESSEE CONSTITUTES SUFFICIENT INCRIMINATING MATERIAL UPON WHICH THE ENTIRE AFFAIRS OF THE ASSESSEE CAN BE EXAMINED. THIS IS PRECISELY WHAT TH E AO HAS ATTEMPTED TO DO IN THE ASSESSMENT ORDER MADE SUBSEQUENT TO THE SEARCH. 4.5. THE AR HAS RELIED HEAVILY ON THE JUDGMENT GIVEN BY THE ITAT MUMBAI, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS D CIT CENTRAL CIRCLE 44 (2012) 137 ITD 0026. HOWEVER, THE FACTS OF THE NARRATED CA SE ARE DIFFERENT FROM THE CASE OF THE APPELLANT BECAUSE IN THAT CASE, NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. ON THE OTHER HAND, IN THIS CA SE, FDRS AMOUNTING TO RS. 22,17,33,070/- WAS SEIZED FROM THE BANK ACCOUNT OF THE ASSESSEE. NEEDLESS TO SAY, THIS FACT WAS NOT AVAILABLE AT THE TIME OF THE ORIGINAL ASSESSMENT. THUS, THE FACT THAT THE ORIGINAL ASSESSMENT HAS ABATED WILL N OT MAKE ANY DIFFERENCE BECAUSE INCRIMINATING MATERIAL WAS INDEED FOUND IN THE FORM OF FDRS IN THIS CASE. IN THE JUDGMENT GIVEN BY THE ITAT MUMBAI, THE HONBLE ITAT HAD REMARKED THAT ASSESSMENT U/S 153A CAN BE MADE ON THE BASIS OF UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 4.6. FROM A CAREFUL STUDY OF THE WRITTEN SUBMISSION MADE BY THE AR, IT IS SEEN THAT THE APPELLANT HAD NOT BEEN ABLE TO ANSWER THE QUERIES RAISED BY THE AO IN THE ASSESSMENT ORDER. THE BASIC QUESTION WHICH I S TO BE ANSWERED HERE IS - WHY WOULD ANY PRUDENT BUSINESS ESTABLISHMENT INVEST IN THE APPELLANT COMPANY WHEN HE IS NOT GETTING ANY BENEFIT IN RETURN? IF ANY AMO UNT IS CREDITED IN THE BOOKS OF THE ASSESSEE, THEN THE PRIMARY ONUS TO ESTABLISH TH E GENUINENESS OF TRANSACTIONS LEADING TO SUCH CREDIT IS ON THE ASSESSEE ITSELF. S IMILARLY, THE IDENTITY AND CREDITWORTHINESS OF THE LENDERS IS ALSO TO BE ESTAB LISHED BY THE ASSESSEE ITSELF. ONCE THE DETAILS OF IDENTITY, CREDITWORTHINESS AND GENUINENESS ARE SUBMITTED, THE ONUS SHIFTS TO THE AO. IN THIS CASE, IT IS CLEAR TH AT THE PRIMARY ONUS ITSELF HAS NOT BEEN DISCHARGED BY THE ASSESSEE. THIS IS REQUIRED T O BE DONE EVEN WHEN THE LOAN TRANSACTIONS HAVE BEEN MADE THROUGH CHEQUES. IN THE CASE OF CIT V PRECISION FINANCE PVT LTD 208 ITR 465 (CAL), IT HAS BEEN HELD THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON- GENUINE TRANSACTION GENUINE. IT IS ALSO A FACT THAT THE COP Y OF BANK ACCOUNT THROUGH WHICH THE LOAN WAS ADVANCED WAS NOT MADE AVAILABLE DURING THE ASSESSMENT PROCEEDINGS. CONSIDERING THE TOTALITY OF FACTS, THE GENUINENESS OF TRANSACTIONS AND THE IDENTITY AND CREDITWORTHINESS OF LENDERS INDEED APPEARS DOUBTFUL. THE AR HAS STATED THAT THE PARTY FROM WHOM LOANS WERE TAKEN WE RE ALSO SUBJECTED TO SEARCH AND FOR THIS REASON THE CONFIRMATION COULD NOT BE F ILED DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, NO ATTEMPTS WERE MADE DURING THE APPEAL PROCEEDINGS ALSO TO SUBMIT ANY DETAILS TO ESTABLISH THE GENUINE NESS OF TRANSACTION AND IDENTITY AND CREDITWORTHINESS OF LENDERS. FROM THIS, AN IMPR ESSION IS GATHERED THAT THE APPELLANT HAS NOTHING TO SAY ON THIS MATTER. MOREOV ER, THE LENDERS WHO HAVE ADVANCED LOAN TO THE APPELLANT COMPANY HAVE NOT EAR NED ANY INCOME ON THEIR INVESTMENT. THE ENTIRE SETUP SMACKS OF ACCOMMODATIO N ENTRIES WHICH HAVE BEEN ITA NOS.2991 TO 2993/DEL/2015 10 EXPOSED BY THE SEARCH OPERATION CONDUCTED BY THE IN COME TAX DEPARTMENT. I, THEREFORE AGREE WITH THE CONCLUSION REACHED BY THE AO THAT THERE IS NO SATISFACTORY EXPLANATION OF MONEY RECEIVED BY THE A PPELLANT COMPANY THROUGH UNSECURED LOAN AND THE SAME HAS BEEN RIGHTLY ADDED BY THE AO 4.7. CONSIDERING THE TOTALITY OF FACTS AND ON THE B ASIS OF DISCUSSIONS MADE ABOVE, I HAVE COME TO A CONCLUSION THAT ADDITION OF RS. 6, 00,00,000/- WAS RIGHTY MADE BY THE AO. GROUND OF APPEAL NO.L IS DISMISSED AND A DDITION OF RS. 6,00,00,000/- IS CONFIRMED. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS FOR A.Y. 2005-06.:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS. 2,70,30,000/-, MADE BY THE A.O., WH ICH WAS RECEIVED BY THE APPELLANT COMPANY AS SHARE CAPITAL AND SHARE PREMIU M, BEING CAPITAL RECEIPT, IN THE HAND OF THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ACTION OF THE A.O. WITHOUT JURISDICTION, OF VISITIN G THE ISSUE OF SHARE CAPITAL. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS.2,70,30,000/-, MADE BY THE A.O., IN AN ASSESSMENT MADE UNDER SECTION 153A OF THE I.T. ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH UN DER SECTION 132 OF THE I.T. ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, RA ISE OR DELETE ANY OR ALL GROUNDS OF APPEAL. 11. SIMILAR GROUNDS HAVE BEEN RAISED BY THE ASSESSEE FO R A.YS 2006-07 AND 2008-09 WHICH READ AS UNDER:- ITA NO.2992/DEL/2015 (A.Y. 2006-07) 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS. 22,04,00,000/-, MADE BY THE A.O., W HICH WAS RECEIVED BY THE APPELLANT COMPANY AS SHARE CAPITAL AND SHARE PREMIU M, BEING CAPITAL RECEIPT, IN ITA NOS.2991 TO 2993/DEL/2015 11 THE HAND OF THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ACTION OF THE A.O. WITHOUT JURISDICTION, OF VISITIN G THE ISSUE OF SHARE CAPITAL WHICH WAS EXAMINED AND FINALIZED IN THE ORIGINAL ASSESSME NT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS.22,04,00,000/-, MADE BY THE A.O., IN AN ASSESSMENT MADE UNDER SECTION 153A OF THE I.T. ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH UN DER SECTION 132 OF THE I.T. ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, RA ISE OR DELETE ANY OR ALL GROUNDS OF APPEAL. ITA NO.2993/DEL/2015 (A.Y. 2008-09) 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS. 6,00,00,000/-, MADE BY THE A.O., WH ICH WAS RECEIVED BY THE APPELLANT COMPANY AS SHARE CAPITAL AND SHARE PREMIU M, BEING CAPITAL RECEIPT, IN THE HAND OF THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ACTION OF THE A.O. WITHOUT JURISDICTION, OF VISITIN G THE ISSUE OF RAISING OF LOAN BY THE APPELLANT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS), MEERUT, ERRED IN LAW AS WELL AS ON FACT IN CONFIRMING THE ADDITION OF RS.6,00,00,000/-, MADE BY THE A.O., IN AN ASSESSMENT MADE UNDER SECTION 153A OF THE I.T. ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH UN DER SECTION 132 OF THE I.T. ACT, 1961. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, RA ISE OR DELETE ANY OR ALL GROUNDS OF APPEAL. 12. THE LD. COUNSEL FOR THE ASSESSEE, REFERRING TO THE COPY OF THE PANCHNAAMA DATED 4 TH DECEMBER, 2010, COPY OF WHICH IS PLACED AT PAGES 1 TO 13 OF THE PAPER BOOK, SUBMITTED THAT ONLY THE BANK ACCOUNT OF THE ASSESSE E WAS SEARCHED AND NO SEARCH AT THE ITA NOS.2991 TO 2993/DEL/2015 12 BUSINESS PREMISES OF THE ASSESSEE HAS TAKEN PLACE. REFERRING TO THE ASSESSMENT ORDER PASSED U/S 153A/143(3) OF THE IT ACT, HE SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY U/S 68 OF THE IT ACT AMOUNTING TO RS.2,70,30,000/- FOR A.Y. 2005-06 AND RS.22,04,20,0 00/- FOR A.Y. 2006-07. SIMILARLY, HE ADDED RS.6,00,00,000/- ON ACCOUNT OF UNSECURED LOAN FOR A.Y. 2008-09. HOWEVER, NO ADDITION WAS MADE ON ACCOUNT OF SUCH BA NK DEPOSIT. HE SUBMITTED THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 147/143(3 ) AND NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR A.Y. 2005 -06 AND 2006-07. SIMILARLY, FOR A.Y. 2008-09 ALTHOUGH THE ASSESSMENT WAS COMPLETED U/S 143(1) HOWEVER, THE PERIOD FOR ISSUE OF NOTICE U/S 143(2) HAD EXPIRED. REFERR ING TO THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, REPORTED IN 380 ITR 573 (DEL) , HE SUBMITTED THAT THE HON'BLE HIGH COURT IN THE SAI D DECISION HAS HELD THAT JURISDICTION U/S 153A CANNOT BE ASSUMED IN CASE OF A COMPLETED A SSESSMENT ON THE DATE OF SEARCH WHEN NO INCRIMINATING MATERIALS WERE FOUND DURING T HE COURSE OF SEARCH. RELYING ON VARIOUS OTHER DECISIONS INCLUDING THE DECISION OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF DCIT VS. MEETA GUTGUTIA REPORTED IN 395 ITR 526, HE SUBMITTED THAT HON'BLE HIGH COURT IN THE SAID DECISION HAS HELD THAT INVOC ATION OF SECTION 153A TO REOPEN CONCLUDED ASSESSMENTS OF ASSESSMENT YEARS EARLIER T O YEAR OF SEARCH WAS NOT JUSTIFIED IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING S EARCH QUA EACH ASSESSMENT YEAR. HE SUBMITTED THAT THE ABOVE DECISION OF HON'BLE DEL HI HIGH COURT WAS CHALLENGED BY THE REVENUE AND THE SLP FILED BY THE REVENUE HAS BE EN DISMISSED BY THE HON'BLE ITA NOS.2991 TO 2993/DEL/2015 13 SUPREME COURT AS REPORTED IN 96 TAXMANN.COM 468. H E ALSO RELIED ON THE FOLLOWING DECISIONS:- I) CIT VS SINHGAD TECHNICAL EDUCATION SOCIETY, 397 ITR 344 (SC); II) INTAS PHARMACEUTICALS LTD. VS. DCIT IT (SS) A NO. 807TO 809/AHD/2010 AND BATCH OF OTHER APPEALS, ORDER DATED 14.08.2015. III) ACIT VS. GOLDMOHUR DESIGN & APPAREL PARK LTD., 96 T AXMANN.COM 375; IV) CIT VS. SMT. SHAILA AGARWAL, 346 ITR 130 (ALLAHABAD ). 13. HE ACCORDINGLY SUBMITTED THAT IN ABSENCE OF ANY INC RIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE U/S 153A/143(3) IN CASE OF A COMPLETED ASSESSMENT. 14. SO FAR AS THE MERIT OF THE CASE IS CONCERNED, HE SU BMITTED THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 147/143(3 ) ON 6 TH DECEMBER, 2007 FOR A.Y. 2005-06 AND ON 8 TH DECEMBER, 2007 FOR A.Y. 2006-07. THE DETAILS WHICH THE ASSESSING OFFICER HAD CALLED FOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A/143(3) OF THE IT ACT WERE ALREADY ON THE RECOR D AS THEY WERE FILED BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT P ROCEEDINGS WHERE THE CASES WERE SELECTED FOR COMPULSORY SCRUTINY AS PER CBDT CENTRA L ACTION PLAN. THE SAME WERE CONSIDERED BY THE THEN ASSESSING OFFICER AND WERE A CCEPTED BY HIM. NOW, THERE IS NO NEW MATERIAL FACT AVAILABLE WITH THE ASSESSING OFFI CER EVEN AFTER THE SEARCH AND SEIZURE ACTION U/S 132 OF THE IT ACT WHICH COULD BE A CAUSE FOR MAKING A FRESH ASSESSMENT AND MAKING AN ADDITION ON ACCOUNT OF SHA RE APPLICATION MONEY. THE ITA NOS.2991 TO 2993/DEL/2015 14 ASSESSING OFFICER HAS NOT MADE ANY FURTHER INQUIRY AFTER THE SEARCH SO AS TO FIND OUT THAT WHATEVER DETAILS FURNISHED DURING THE COURSE O F ORIGINAL ASSESSMENT PROCEEDINGS/REASSESSMENT PROCEEDINGS WERE INCORRECT OR FALSE. SINCE THE ASSESSEE HAS ESTABLISHED THE IDENTITY AND CREDIT WORTHINESS OF T HE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER, AFTER CONSIDERING THE SUBMISSION S MADE BY THE ASSESSEE HAS ACCEPTED SUCH SHARE APPLICATION AND SHARE PREMIUM A S EXPLAINED, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL IN THE POSSESSION OF THE A SSESSING OFFICER, HE CANNOT TAKE A DIFFERENT VIEW AND PUT THE ASSESSEE TO A FURTHER TE ST OF PRODUCING THE SHARE APPLICANTS AFTER A GAP OF SO MANY YEARS. HE SUBMITTED THAT AL THOUGH THESE DETAILS WERE AVAILABLE IN THE ASSESSMENT RECORDS OF THE ASSESSEE, THE ASSE SSING OFFICER IN THE ORDER PASSED BY HIM HAS NOT AT ALL CONSIDERED THE SAME. EVEN THOUG H THIS FACT WAS BROUGHT TO THE NOTICE OF THE CIT(A), HE HAS ALSO NOT CONSIDERED TH E ARGUMENT OF THE ASSESSEE THAT ALL DETAILS WERE AVAILABLE IN THE ASSESSMENT RECORDS SI NCE THESE DETAILS WERE FILED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. HE ACCORDINGLY SUBMITTED THAT WHEN THE FIXED DEPOSITS SEIZED DURING THE COURSE OF SEAR CH FORMED PART OF THE REGULAR BOOKS OF ACCOUNT AND, THEREFORE, COULD NOT BE CONSTRUED A S INCRIMINATING MATERIAL AND SINCE NO OTHER INCRIMINATING MATERIAL WAS FOUND DURING TH E COURSE OF SEARCH, THEREFORE, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE I N THE ABSENCE OF ANY ADVERSE MATERIAL FOUND DURING THE SEARCH OR POST SEARCH ENQ UIRIES AND ESPECIALLY WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3)/147 AC CEPTING THE SHARE CAPITAL AND ITA NOS.2991 TO 2993/DEL/2015 15 SHARE PREMIUM. THEREFORE, BOTH LEGALLY AND FACTUAL LY NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. 15. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON TH E ORDERS OF THE ASSESSING OFFICER AND CIT(A). HE SUBMITTED THAT THE ASSESSEE DURING THE ASSESSMENT YEAR 2005- 06 HAS ISSUED EQUITY SHARES OF RS.5,40,600/-- ON PR EMIUM OF RS.2,64,89,400/- AND SIMILARLY FOR A.Y. 2006-07 IT HAS ISSUED SHARE CAPI TAL OF RS.44,08,400/- ON A PREMIUM OF RS.21,60,11,600/-. THE ASSESSEE HAS OBTAINED UN SECURED LOAN OF RS.6 CRORE DURING A.Y.2008-09. DESPITE BEING GIVEN ADEQUATE OPPORTUNI TY, THE ASSESSEE FAILED TO FURNISH JUSTIFICATION FOR SUCH HUGE PREMIUM. FURTHER, THE ASSESSEE HAS FAILED TO FURNISH DOCUMENTARY EVIDENCE IN SUPPORT OF IDENTITY AND CRE DIT WORTHINESS OF THE SHARE APPLICANTS AND THE LOAN CREDITORS AND THE GENUINENE SS OF THE TRANSACTION. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN SUSTAINING TH E ADDITION MADE BY THE ASSESSING OFFICER FOR THE ABOVE THREE YEARS. SO FAR AS THE A RGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN ABSENCE OF ANY INCRIMINATING MATER IAL FOUND DURING THE COURSE OF SEARCH, NO ADDITION CAN BE MADE U/S 153A/143(3) IN CASE OF A COMPLETED ASSESSMENT IS CONCERNED, THE LD. AR, REFERRING TO THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ KUMARARORA REPORTED IN 367 ITR 517, SUBMITTED THAT THE HON'BLE ALLAHABAD HIGH COURT IN THE SAID DECISION H AS HELD THAT THE ASSESSING OFFICER HAS POWER TO REASSESS RETURNS OF ASSESSEE NOT ONLY FOR UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH OPERATION, BUT ALSO WIT H REGARD TO MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE ALLAHABAD ITA NOS.2991 TO 2993/DEL/2015 16 HIGH COURT IN THE CASE OF CIT VS. KESARWANI ZARDA BHANDAR SAHSON ALLAHABAD IN ITA NO.270 OF 2014 . 16. SO FAR AS THE DECISION OF THE HON'BLE DELHI HIGH CO URT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) RELIED BY THE LD. COUNSEL IS CONCERNED, HE SUBMITTED THAT THE HON'BLE KERALA HIGH COURT HAS HELD THAT ASSESSMENT PROCEEDINGS GENERATED BY ISSUANCE OF A NOTICE U/S 153A(1)(A) CAN BE CONCLUDE D AGAINST INTEREST OF THE ASSESSEE INCLUDING MAKING ADDITIONS EVEN WITHOUT ANY INCRIMI NATING MATERIAL BEING AVAILABLE AGAINST THE ASSESSEE IN SEARCH U/S 132 ON THE BASIS OF WHICH NOTICE WAS ISSUED U/S 153A. THE LD. DR SUBMITTED THAT THE HON'BLE KERALA HIGH COURT, WHILE DECIDING THE ISSUE AGAINST THE ASSESSEE HAS CONSIDERED THE FOLLO WING DECISIONS:- I) CIT VS. KABUL CHAWLA (2016) 380 ITR 573; II) CIT VS. CONTINENTAL WAREHOUSING CORPN. (NHAVA SHEVA ) LTD. (2015) 374 ITR 645 III) PRINCIPAL CIT VS. KURELE PAPER MILLS (P) LTD. (2016 ) 380 ITR 571 (DEL) IV) CIT VS. LANCY CONSTRUCTIONS (2016) 383 ITR 168; V) CIT VS. ST. FRANCIES CLAY DCOR TILES (2016) 240 TA XMAN 168; & VI) CIT V. PROMY KURIAKOSE (2016) 386 ITR 597 (KER.) 16.1 HE ALSO RELIED ON THE FOLLOWING DECISIONS:- I) CIT VS MAF ACADEMY (P) LTD., 361 ITR 258; II) CIT VS. NAVODAYA CASTLE PVT. LTD. (2014) 367 ITR 30 6 (DEL); III) KONARK STRUCTURAL ENGINEERING (P) LTD. VS. DCIT (20 18) 90 TAXMANN.COM 56 (BOM); IV) DRB EXPORTS (P) LTD. VS. CIT (2018) 93 TAXMANN.COM 490 (CAL); ITA NOS.2991 TO 2993/DEL/2015 17 V) PREM CASTINGS (P) LTD. VS. CIT (2017) 88 TAXMANN.CO M 189 (ALL); VI) CIT VS. NIPUN BUILDERS & DEVELOPERS (P) LTD. 30 TAX MANN.COM 292; VII) CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD. 18 TAXMA NN.COM 217; VIII) CIT VS. ULTRA MODERN EXPORTS (P) LTD. 40 TAXMANN.CO M 458; IX) CIT VS. FROSTAIR (P) LTD. 26 TAXMANN.COM 11; X) CIT VS. N.R. PORTFOLIO PVT. LTD. (2014) 42 TAXMANN. COM 339; XI) CIT VS. EMPIRE BUILTECH (P) LTD. 366 ITR 110; & XII) CIT VS. FOCUS EXPORTS (P) LTD. 51 TAXMANN.COM 46. 17. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER S UBMITTED THAT THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA (SUPRA) IS OF NO HELP TO THE REVENUE FOR THE REASON THAT THE HIGH CO URT HAS ONLY HELD THAT THE ASSESSMENT CAN BE FRAMED U/S 153A EVEN IF NO INCRIM INATING MATERIAL WAS FOUND BASED ON THE MATERIAL EXISTING AT THE TIME OF ORIGINAL AS SESSMENT. THE ASSESSMENT CAN BE OF THE UNDISCLOSED INCOME FOUND DURING THE SEARCH AND OF INCOME BASED ON THE MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT. HE S UBMITTED THAT IT WOULD BE A COMPLETE MISREADING OF THE JUDGMENT OF THE HON'BLE ALLAHABAD HIGH COURT TO SUGGEST THAT IF AN ISSUE HAS BEEN EXAMINED AT THE TIME OF ORIGINAL ASS ESSMENT, IT CAN BE REVISITED OR REVIEWED MERELY BECAUSE SEARCH WAS TAKEN PLACE PART ICULARLY WHEN NO MATERIAL OF ANY KIND IS FOUND TO INDICATE THAT THE INCOME DETERMINE D AT THE TIME OF ORIGINAL ASSESSMENT NEEDS TO BE INTERFERED WITH. THIS IS NEITHER THE I MPORT OF THE DECISION OF THE HON'BLE HIGH COURT NOR BY ANY STRETCH OF IMAGINATION CAN SU CH AN INTERPRETATION BE DRAWN FROM THE RATIO OF THE SAID DECISION. HE SUBMITTED THAT THE ARGUMENT OF THE LD. DR THAT ITA NOS.2991 TO 2993/DEL/2015 18 WHETHER THERE BE ANY MATERIAL OR NOT, THE SEARCH BY ITSELF GIVES THE POWER TO THE ASSESSING OFFICER TO REVIEW HIS OWN ORDER IS MISLEA DING. HE SUBMITTED THAT IN THE CASE OF RAJ KUMAR ARORA (SUPRA), THERE WAS NO SCRUTINY A SSESSMENT AND THE MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT WAS NO T EXAMINED NOR ANY VIEW FOR OR AGAINST THE ASSESSEE WAS TAKEN BY THE ASSESSING OFF ICER WHILE MAKING THE ORIGINAL ASSESSMENT. FURTHER, THE REVENUE CANNOT RELY ON TH E SAME SET OF MATERIAL FOR ARRIVING AT TWO CONTRARY FINDINGS AT TWO DIFFERENT POINTS OF TIME WHILE THE LEVEL OF AUTHORITY TAKING THE DECISIONS IS SAME. REFERRING TO THE DEC ISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF INTAS PHARMACEUTICALS LTD. VS. DCIT IN IT (SS)A NO. 807/AHD/ 2010 , HE SUBMITTED THAT THE TRIBUNAL HAS CONSIDERED THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA (SUPRA) AND HELD THAT THE SAID DECISION DEALS WITH THE SCOPE OF SECTION 153A AND N OT THAT OF ASSUMPTION OF JURISDICTION WHICH STANDS ON A DIFFERENT FOOTING. HE REITERATED THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF MEETA GUTGUTIA (SUPRA) HA S HELD THAT REOPENING OF COMPLETED ASSESSMENT WAS NOT JUSTIFIED IN THE ABSENCE OF INCR IMINATING MATERIAL AND THE SLP FILED BY THE REVENUE HAS BEEN DISMISSED BY THE HON'BLE SU PREME COURT ON THE QUESTION OF LAW RAISED BY THE REVENUE. HE SUBMITTED THAT ALTHOU GH THE DISMISSAL OF SLP MAY NOT AMOUNT TO LAYING DOWN OF A LAW, BUT, THE FACT REMAI NS THAT THE HON'BLE SUPREME COURT DID NOT FIND ANY INFIRMITY IN THE VIEW TAKEN BY THE DELHI HIGH COURT THAT IN THE ABSENCE OF INCRIMINATING MATERIAL THE CONCLUDED ASS ESSMENT CANNOT BE REOPENED U/S 153A. ITA NOS.2991 TO 2993/DEL/2015 19 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDE RED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ORIGINAL ASSESSMENT IN THE I NSTANT CASE WAS COMPLETED U/S 143(3) OF THE IT ACT ON 6 TH DECEMBER, 2007 FOR A.Y.2005-06 DETERMINING THE TOT AL INCOME AT RS.10,850/-. SIMILARLY, FOR A.Y. 2006-07 THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 08.12.2007 DETERMINING THE TOTAL INCOME A T RS.10,850/-. A SEARCH U/S 132 OF THE IT ACT WAS CONDUCTED IN THE CASE OF BANK ACC OUNTS OF THE ASSESSEE ON 12.11.2010 DURING WHICH THE FOLLOWING FDRS AND CASH HAVE BEEN FOUND AND SEIZED:- FDR RS.3,34,50,000/- (OBC, SUBHARTI DENTAL COLLEG E BRANCH, SUBHARTIPURAM, MEERUT) CASH RS.55,890/- (OBC MALIYANA BRANCH, MEERUT) FDR RS.18,82,83,070/- (OBC, SADAR BAZAR, MEERUT C ANTT.) 19. SINCE THE ASSESSEE DID NOT FILE THE REQUISITE DETAI LS AS CALLED FOR BY THE ASSESSING OFFICER TO SUBSTANTIATE THE IDENTITY AND CREDIT WOR THINESS OF THE SHARE APPLICANTS AND GENUINENESS OF THE TRANSACTIONS, THE ASSESSING OFFI CER MADE ADDITION OF RS.2,70,30,000/- BEING THE SHARE CAPITAL OF RS.5,40 ,600/- AND SHARE PREMIUM OF RS.2,64,89,400/- RECEIVED BY THE ASSESSEE DURING TH E IMPUGNED ASSESSMENT YEAR. SIMILAR ADDITION OF RS.22,04,20,000/- HAS BEEN MADE IN A.Y. 2006-07. ALTHOUGH IT WAS SUBMITTED BEFORE THE CIT(A) THAT NO INCRIMINATI NG MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THE ASSESSING OFFICER IN THE A SSESSMENTS COMPLETED U/S 143(3) HAS ACCEPTED SUCH SHARE CAPITAL AND SHARE PREMIUM A ND NO CONTRARY MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OR AFTER POST SEARCH IN QUIRY, HOWEVER, WE FIND THE LD.CIT(A) SUSTAINED THE ADDITION MADE BY THE ASSESS ING OFFICER, THE REASONS FOR WHICH ITA NOS.2991 TO 2993/DEL/2015 20 HAVE ALREADY BEEN REPRODUCED IN THE PRECEDING PARAG RAPHS. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, NO ADDITION U/S 153A/143(3) C AN BE MADE IN THE CASE OF A COMPLETED ASSESSMENT. ALTHOUGH HE RELIED ON VARIOU S DECISIONS OF THE HON'BLE DELHI HIGH COURT AND THAT OF THE COORDINATE BENCHES OF TH E TRIBUNAL, HOWEVER, WE FIND THE ISSUE STANDS DECIDED AGAINST THE ASSESSEE BY THE DE CISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR ARORA (SUPRA ) WHEREIN IT HAS BEEN HELD THAT THE ASSESSING OFFICER HAS POWER TO REASSESS RETURNS OF THE ASSESSEE NOT ONLY FOR UNDISCLOSED INCOME FOUND DURING THE SEARCH OPERATIO N, BUT ALSO WITH REGARD TO MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT. SIMI LAR VIEW HAS BEEN TAKEN BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. KESARWANI ZARDA BHANDAR SAHSON, ALLAHABAD (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE ASSESSING OFFICER HAS POWER TO REASSESS RETURNS OF THE ASSESSEE NOT ONLY FOR UNDISCLOSED INCOME FOUND DURING SEARCH OPERATION, BUT ALSO WITH REGARD TO MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT. IN VIEW OF THE BINDING DECISIONS OF THE JURISDICTIONAL HIGH COURT, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THE INITIATION OF PROCEEDING U/S 153A ARE NOT VALID. THEREFORE, THE LEGAL GROUND RAISED BY THE ASSESSEE STANDS DISMISSED. 20. NOW, COMING TO THE MERIT OF THE CASE, IT IS AN ADMI TTED FACT THAT IN THE ORDER PASSED U/S 143(3) ON 06.12.2007 AND 08.12.2007 FOR A.Y. 2005-06 AND 2006-07 ITA NOS.2991 TO 2993/DEL/2015 21 RESPECTIVELY THE ASSESSING OFFICER HAD EXAMINED THE ISSUE OF SHARE PREMIUM AND SHARE APPLICATION MONEY. THE CASES FOR BOTH THE YEARS WE RE SELECTED FOR COMPULSORY SCRUTINY AS PER CBDT CENTRAL ACTION PLAN. ON THE BA SIS OF VARIOUS DETAILS FILED BY THE ASSESSEE AS REQUIRED BY THE ASSESSING OFFICER, THE ISSUE OF SHARE PREMIUM AND SHARE CAPITAL WAS ACCEPTED WITHOUT MAKING ANY ADDITION. 21. WE FIND DURING THE COURSE OF SEARCH, NO INCRIMINATI NG DOCUMENTS WERE FOUND SO AS TO PROVE THAT THE DOCUMENTS FILED DURING THE COU RSE OF ORIGINAL ASSESSMENT PROCEEDINGS ARE FALSE OR UNTRUE. A PERUSAL OF THE PANCHNAMA APPEARING ON PAGES 3-5 OF THE PAPER BOOK PAGES 1 TO 13 SHOWS THAT NO SEARC H WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE AND THE WARRANT WAS ISSUED ONLY IN THE NAME OF THE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH ORIENTAL BA NK OF COMMERCE FROM WHERE THE FIXED DEPOSITS WERE SEIZED. THESE FIXED DEPOSITS F ORMING PART OF THE REGULAR BOOKS OF ACCOUNT, IN OUR OPINION, CANNOT BE HELD AS INCRIMIN ATING MATERIAL. THE ORIGINAL ASSESSMENT RECORDS WERE VERY MUCH AVAILABLE WITH TH E ASSESSING OFFICER. ALTHOUGH THE ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OF FICER, HOWEVER, IT WAS THE DUTY OF THE ASSESSING OFFICER TO GO THROUGH THE PAST RECORD S OF THE ASSESSEE BEFORE MAKING ANY ADDITION IN THE EX PARTE ORDER THAT TOO PASSED U/S 153A/143(3). ALTHOUGH THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THE ISSUE OF SHARE CAPITAL AND PREMIUM WAS EXAMINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROC EEDINGS U/S 147/143(3), HOWEVER, WE FIND THE LD.CIT(A) FOR REASONS BEST KNOWN TO HIM , CLOSED HIS EYES AND SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUN D THAT THE ASSESSEE DID NOT APPEAR ITA NOS.2991 TO 2993/DEL/2015 22 BEFORE THE ASSESSING OFFICER. UNDER THESE CIRCUMST ANCES, WE FIND MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT T HE REVENUE CANNOT RELY ON THE SAME SET OF MATERIAL FOR ARRIVING AT TWO CONTRARY FINDIN GS AT TWO DIFFERENT POINTS OF TIME WHILE THE LEVEL OF AUTHORITY TAKING THE DECISION RE MAINS THE SAME. IN OUR OPINION, WHEN THE ASSESSEE DURING THE COURSE OF ORIGINAL ASS ESSMENT PROCEEDINGS HAD FILED THE REQUISITE DETAILS SUCH AS THE COPIES OF SHARE APPLI CATIONS, BANK STATEMENTS INCLUDING DETAILS OF ALLOTMENT, PREMIUM CHARGE, ETC., AND NOT HING ADVERSE WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS AND CONSIDERING THE FA CT THAT NOTHING ADVERSE DURING POST SEARCH INQUIRIES WAS FOUND TO NEGATE THE DOCUMENTS FILED AT THE TIME OF THE REASSESSMENT PROCEEDINGS, THE PRESENT ASSESSING OFF ICER, ON THE SAME SET OF MATERIAL CANNOT TAKE A DIFFERENT VIEW THAN THE VIEW ALREADY TAKEN BY HIS PREDECESSOR AT THE TIME OF ORIGINAL ASSESSMENT MERELY BECAUSE A SEARCH HAS TAKEN PLACE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT T HE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A) FOR A.Y. 2005-0 6 AND 2006-07 ARE NOT JUSTIFIED. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO D ELETE THE ADDITION MADE BY HIM U/S 68 OF THE IT ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERIT ARE ACCORDINGLY, ALLOWED FOR A.Y. 2005-06 AND 2006-07. 22. HOWEVER, THE FACTS FOR A.Y. 2008-09 ARE DIFFERENT. HERE THE ASSESSING OFFICER HAS NOT PASSED ANY ORDER U/S 143(3) AND THE ORDER W AS PASSED U/S 143(1). THEREFORE, THERE WAS NO OCCASION ON THE PART OF THE A.O. TO AP PLY HIS MIND TOWARDS THE ISSUE OF UNSECURED LOAN OF RS.6.00 CRORES. THEREFORE, OUR D ECISION FOR A.Y. 2005-06 AND 2006- ITA NOS.2991 TO 2993/DEL/2015 23 07 OF THIS ORDER CANNOT BE APPLICABLE FOR THE A.Y. 2008-09. SINCE THE ASSESSEE HAD NOT FURNISHED THE REQUISITE DETAILS BEFORE THE LOWER AU THORITIES, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERE ST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE A.O. WITH A DI RECTION TO GIVE ONE FINAL OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE UNSECURED LOAN OF RS.6.00 CRORES TO HIS SATISFACTION IN TERMS OF SECTION 68 OF THE IT ACT BY PROVIDING THE IDENTITY AND CAPACITY OF THE LOAN CREDITORS AND GENUINENESS OF THE TRANSACTION. THE A.O. SHALL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 23. IN THE RESULT, ITA NOS.2991 & 2992/DEL/2015 ARE PAR TLY ALLOWED AND ITA NO.2993/DEL/2015 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 0.12.2018. SD/- SD/- (SUCHITRA KAMBLE) (R.K. PAND A) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 10 TH DECEMBER, 2018 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI