ACIT, CENTRAL CIRCLE- 13, New Delhi V. JPM Tools Ltd., NEW DELHI

ITA 7280/DEL/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5719 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Keywords: Document seized; Share purchase agreement; Question of law; Accommodation entries; Documents seized
• Section: 131; 68; 132; 154; 143(3); 153A; 260A; 133(6); 143(1); 43; 72; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’ : NEW DELHI) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER and SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA No.6627/Del./2017 (ASSESSMENT YEAR : 2008-09) ITA No.6622/Del./2017 (ASSESSMENT YEAR : 2009-10) ITA No.6623/Del./2017 (ASSESSMENT YEAR : 2010-11) ITA No.6624/Del./2017 (ASSESSMENT YEAR : 2011-12) ITA No.6625/Del./2017 (ASSESSMENT YEAR : 2012-13) ACIT, Central Circle 13, vs. M/s. Jay Auto Components Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AABCJ6597P) ITA No.6626/Del./2017 (ASSESSMENT YEAR : 2008-09) ITA No.6639/Del./2017 (ASSESSMENT YEAR : 2009-10) ITA No.6628/Del./2017 (ASSESSMENT YEAR : 2010-11) ITA No.6629/Del./2017 (ASSESSMENT YEAR : 2011-12) ITA No.6630/Del./2017 (ASSESSMENT YEAR : 2012-13) ITA No.6627/Del./2017 and 15 other appeals 2 ACIT, Central Circle 13, vs. M/s. Jay Iron & Steels Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AABCJ3067E) ITA No.7280/Del./2017 (ASSESSMENT YEAR : 2010-11) ITA No.7281/Del./2017 (ASSESSMENT YEAR : 2011-12) ACIT, Central Circle 13, vs. M/s. JPM Tools Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AAACJ3128K) ITA No.6638/Del./2017 (ASSESSMENT YEAR : 2010-11) ACIT, Central Circle 13, vs. M/s. Jay Ace Technologies Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AACCJ2030N) ITA No.6640/Del./2017 (ASSESSMENT YEAR : 2011-12) ACIT, Central Circle 13, vs. M/s. Jay Fe Cylinders Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AACCJ0668A) ITA No.7278/Del./2017 (ASSESSMENT YEAR : 2012-13) ACIT, Central Circle 13, vs. M/s. JLF Casting Limited, New Delhi. (formerly known as JPM Renewable Energy Ltd.), GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AACCJ4227B) ITA No.6627/Del./2017 and 15 other appeals 3 ITA No.6635/Del./2017 (ASSESSMENT YEAR : 2012-13) ACIT, Central Circle 13, vs. M/s. Jay Nikki Industries Ltd., New Delhi. GI – 48, G.T. Karnal Road Indl.Area, Delhi. (PAN : AACCJ0667R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Salil Aggarwal, Senior Advocate Shri Shailesh Gupta, Advocate REVENUE BY : Shri Sanjay Singh, CIT DR Date of Hearing : 09.12.2021 Date of Order : 23.12.2021 O R D E R PER BENCH: The aforesaid sixteen appeals filed by Revenue pertains to seven assessee’s namely; i) M/s Jay Auto Components Ltd, ii) M/s Jay Iron & Steel Ltd., iii) M/s JPM Tools Ltd., iv) M/s Jay Fe Cylinders Ltd., v) M/s Jay Ace Technologies Ltd., vi) M/s JJF Casting Ltd. and vii) M/s Jay Nikki Industries Ltd. In all the aforesaid cases, the order of CIT (A) though separate and independent but is identical and is of even date 19.09.2017, passed by CIT (Appeals)-XXVI. 1. The brief facts of the case are that, search and seizure operation under section 132(1) of the Income Tax Act was carried out on Minda group of cases group of cases ITA No.6627/Del./2017 and 15 other appeals 4 on 20.09.2013. The assessee’s being part of Minda Group was also subjected to search. As such, notices u/s 153A dated 08.06.2015 of the Income Tax Act were issued to the assessee’s, after which assessments were made by learned assessing officer vide order dated 30.03.2016. Here too also it is important to note that even though the assessing officer has passed separate and independent orders for all the aforesaid assessee’s, but, his observations/ enquiries, findings and additions are identical in all the aforesaid cases. 2. That during the course of hearing both Assessee and Revenue agreed on the fact that, all the sixteen captioned appeals involve consideration of common issues. It was further, agreed by both the parties that M/s Jay Auto Components Ltd. (AY 2008-09 bearing ITA No. 6627/Del/2017) may be taken as lead matter, since the findings of both AO and CIT (A) are similar in all the appeals, therefore, any finding arrived therein will apply in all appeals. 3. We have also gone through the materials available on record and have also perused the brief files of all sixteen appeals and find that the issues involved in all the appeals are common and identical and in view of the aforesaid submissions of the learned counsel of the assessee, Sh. Salil Aggarwal, Senior Advocate and learned CIT DR Sh. Sanjay Kumar on behalf of Revenue, we for the sake of convenience and with consent of both the parties proceed to dispose of ITA No.6627/Del./2017 and 15 other appeals 5 all the sixteen appeals by a consolidated order but for the sake of reference, we refer to the facts of A.Y. 2008-09 in the case of M/s Jay Auto Components Ltd. in ITA No. 6627/Del/2017 and take the same as lead matter, wherein, the addition has been deleted by learned CIT (A) on merits, but, sustained on legal issue, that is, the additions so made are beyond the scope of assessment so framed under section 153A of the I.T. Act, 1961. 4. The Revenue has raised following grounds of appeal in the case of M/s Jay Auto Components Ltd for AY 2008-09:- 1. “The Ld. CIT (A) has erred on facts and in law in deleting the addition made u/s 68 of the I.T Act, 1961 on account of receipt of share capital and share premium aggregating to Rs. 2, 53, 50, 000/- by the assessee company. 2. The Ld. CIT (A) has erred on facts and in law in observing that the statement recorded u/s 131 of the I.T. Act, 1961 has no evidentiary value despite the fact that specific details and corroborative banking transactions were identified by the entry operator. 3. The Ld. CIT (A) has erred on facts and in law in observing that requisite details and evidences were filed by the assessee to prove the genuineness of the claim despite the fact that the assessee company failed to produce the directors of the investing companies specifically asked for. ITA No.6627/Del./2017 and 15 other appeals 6 4. The learned CIT (A) has erred on facts and in law in not even considering the statements of directors of the investing companies admitting that the investing companies in which they are directors, are actually paper companies meant for providing accommodation entries. 5. The appellant craves the leave to add, amend any/ all the grounds of appeal before or during the course of hearing of the appeal.” 5. That further, the assessee company has also filed applications under Rule 27 of ITAT Rules in as many as twelve appeals. The break – up of said appeals along with ground taken in Rule 27 application is extracted below: Assessee’s Appeals involving legal issues under section 153A of the Act, as the assessments were final on date of search and additions are not based on incriminating material i) M/s Jay Iron & Steel Ltd. AY 2008-09: ITA No. 6626/Del/2017 AY 2009-10: ITA No. 6639/Del/2017 AY 2010-11: ITA No. 6628/Del/2017 AY 2011-12: ITA No. 6629/Del/2017 ii) M/s JPM Tools Ltd. AY 2010-11: ITA No. 7280/Del/2017 AY 2011-12: ITA No. 7281/Del/2017 iii) M/s Jay Auto Components Ltd. AY 2008-09: ITA No. 6627/Del/2017 AY 2009-10: ITA No. 6622/Del/2017 AY 2010-11: ITA No. 6623/Del/2017 AY 2011-12: ITA No. 6624/Del/2017 iv) M/s Jay FE Cylinder Ltd. AY 2011-12: ITA No. 6640/Del/2017 v) M/s Jay Ace Technologies Ltd. AY 2010-11: ITA No. 6638/Del/2017 ITA No.6627/Del./2017 and 15 other appeals 7 Ground so raised by assessee in all the aforesaid 12 appeals by filing an application under Rule 27 of the ITAT Rules is as under: “That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in overlooking the basic fact that no incriminating material was found during the course of search and the assessment as contemplated under section 153A is not a de novo assessment and as such, the additions so made by assessing officer are beyond the scope of assessment under section 153A of the Act and are liable to be deleted in totality”. 6. Since the aforesaid application filed under Rule 27 of ITAT Rules by the assessee involves purely a legal issue which goes to the root of the matter which has also been discussed and dismissed by learned CIT (A), hence, both the parties i.e. learned CIT DR and Learned Counsel for the assessee fairly agreed that the said legal issue may be taken up first and thereafter, the appeals on issues pertaining to merits may be taken up. As such, in view of the aforesaid, we are taking up the application under Rule 27, as filed by the assessee – respondents. 7. During the course of hearing Ld. Counsel for the Assessee – Respondent, Sh. Salil Aggarwal, Senior Advocate ITA No.6627/Del./2017 and 15 other appeals 8 vehemently argued on the grounds of appeal so taken in the application so filed under Rule 27 of the ITAT Rules. In support of the aforesaid ground and in addition to the oral arguments, the learned counsel for the assessee – appellant furnished brief written synopsis, which is being extracted here below for the sake of brevity and completeness of records: “Synopsis in Brief with regards to the legal issue i.e. additions so made in assessments framed under section 153A of the Act are beyond the scope of assessment, as the assessments were final on date of search and additions are not based on incriminating material 1. t the outset, it is most humbly submitted that the assessee – appellant has filed Rule 27 application on 24.07.2021 vide email with regards to 12 appeals, which involves consideration of legal issue and it is further submitted and prayed that “M/s Jay Iron & Steel Ltd.” may be taken as lead matter. As it contains all appeals which falls under Category 1 and 2. For instance, if appeal for AY 2008-09 is argued on legal and merits both, it will take care of 16 appeals falling in Category 1 and Category 2. That, if appeal for AY 2014-15 is argued, then the same will cover 5 appeals falling in Category 3. Thus, all in all, 21 appeals will be covered if M/s Jay Iron & Steel Ltd. is taken as the lead matter. As such, the chronological sequence of events with regards to the matter of M/s Jay Iron & Steel Ltd. for AY 2008-09, is as below: Sr. No. Particulars Date i) Date of search u/s 132 of the Act 20.09.2013 ITA No.6627/Del./2017 and 15 other appeals 9 ii) Date of notice u/s 153A 08.06.2015 iii) Date of filing of original return of income at NIL (the said return of income was final on the date of search) 27.09.2008 iv) Date of filing of Return of Income under section 153A of the Act at NIL 03.07.2015 iv) Assessment u/s 153A Date of order 30.03.2016 Income assessed Rs.4,93,00,000/- v) Order of CIT(A) Date of order 26.08.2017 Findings Partly Allowed 2. It is most humbly submitted that, it is a settled position of law that the assessments under section 153A of the Act can only be made on the basis of incriminating materials unearthed/ gathered or found during the course of search with regards to the respective assessment year. That further, it is also a settled proposition that in the assessments under section 153A of the Act, additions cannot be made on post search enquiries by investigating team or by enquiries made by learned AO during the course of assessment. In order to support the aforesaid propositions, reliance is placed on following case laws: a) Judgment of the High Court of Delhi in the case of CIT vs. Kabul Chawla reported in 380 ITR 573. b) Judgment of High Court of Delhi in the case of PCIT vs Jaypee Financial Services Ltd. reported in 280 Taxman 147. c) Judgment of the High Court of Delhi in the case of PCIT Meeta Gutgutia reported in 395 ITR 526. d) Judgment of the Supreme Court of India in the case of CIT vs Singhad Technical Education Society reported in 397 ITR 344. ITA No.6627/Del./2017 and 15 other appeals 10 e) Order of ITAT Delhi in the case of ACIT vs Moon Beverages Ltd. in ITA No. 115 to 118/Del/2018. f) Order of ITAT Delhi in the case of DCIT vs Sundaram IT Parks Pvt. Ltd. in ITA No. 5166/Del/2018. g) Order of ITAT Delhi in the case of ACIT vs M/s Five Vision Planners Pvt. Ltd. in ITA No. 4460/Del/2014. h) Judgment of High Court of Delhi in the case of PCIT vs M/s Dreamcity Buildwell Pvt. Ltd. in ITA No. 1152/2017. i) Order of ITAT Delhi M/s TDI Infrastructure Ltd. vs DCIT in ITA No. 5580, 4409, 4410 and 5072/Del/2012. j) Order of ITAT Delhi ACIT vs Realtech Construction Pvt. Ltd. (ITAT Delhi) in ITA No. 6569/Del/2016. 3. In view of the aforesaid judgments, and also settled position of law, it would be necessary to examine as to whether any incriminating material was found during the course of search with regards to the share capital/ share application money. In this regards, a bare perusal of assessment order would reveal that following documents have been referred by learned AO in the assessment order, which have been found as a result of search: a) Share Certificates were found during the course of search, with regards to allotment of shares by Minda group of companies to various companies (kindly see page 18 of assessment order). These share certificates pertained to 8 companies, namely, M/s JA Builders Ltd, M/s JPM Automobiles Ltd, M/s IBER Medior Ltd, M/s JPM Tsukada Pvt Ltd, M/s Brilliant Jewels Pvt. Ltd, M/s JPM Tools Ltd, M/s JPM Farms Pvt. Ltd, M/s Jay Nikki Industries Ltd (kindly see page 60 to 61 of CIT (A) order). b) Party O – 2, Annexure A – 1 page 50 found and seized from the premises of M/s Jay Ushin Ltd. (kindly see pages 14 to 16 of AO’s order and pages 61 to 62 of CIT (A)’s order). ITA No.6627/Del./2017 and 15 other appeals 11 c) Party O – 2, Annexure A – 4 page 106 which is a copy of email (kindly see page 16 to 17 of AO’s order and page 62 of CIT (A)’s order). 4. With regards to the share certificates of 8 companies seized during the course of search, it is submitted that even the learned AO has not made any adverse observations with regards to the said documents, as the same cannot be said to be incriminating in nature, since the share certificates merely records the details of shares issued and allotted which are duly recorded in the books of accounts prior to the date of search. These share certificates were only the statutory records kept with the companies, to be filed before ROC and the same was kept by the Secretarial department of the companies for necessary legal compliances. Thus, here it is submitted that seizure of share certificates does not come within the definition of “incriminating material”, as the transactions so referred in the said share certificates are duly recorded and forms part of the books of accounts of the respective companies. This fact is also admitted by learned CIT (A) at pages 60 and 61 of the order (even though CIT (A) dismissed the assessee’s appeal on legal issue, however, recorded a positive finding in favor of assessee with regards to share certificates to be not incriminating in nature). That further, reliance is placed on the order of Hon’ble ITAT Delhi in the case of M/s ACIT vs Moon Beverages Ltd. in ITA Nos. 115 to 118/Del/2018, wherein, share certificates have been held to be not incriminating in nature as the details mentioned therein, are duly recorded in the books of accounts and for a document to be incriminating, it should depict some undisclosed income unearthed as a result of search. ITA No.6627/Del./2017 and 15 other appeals 12 5. With regards, to document seized from M/s Jay Ushin Ltd. marked as Party O – 2, Annexure A – 1, Page 50, it is most humbly submitted that a perusal of the said document, which has been extracted by learned AO at pages 14 to 16 of his order, would show that only transaction related to JPM group is with regards to receipt of unsecured loan of Rs. 95 lacs by M/s Jay Ace Technologies Ltd. from M/s Suhana Marketing Pvt. Ltd. and there is no other name which pertains to any of the companies of JPM Group. It is further, submitted that while framing the assessment of M/s Jay Ace Technologies Ltd. for AY 2013-14 (to which the document relates), no addition has been made by learned AO in the assessment under section 153A read with section 143(3) of the Act. Thus, here it is submitted that once the said document has been accepted to be recorded in books of accounts and no addition has been made with regards to the same, in the hands of M/s Jay Ace Technologies Ltd., the same document “cannot be treated as incriminating”, and that is why, even though the learned AO has referred the said document in the order of assessment, however, no adverse inference has been drawn with regards to the said document in the entire assessment order. Even the learned CIT (A) has recorded a positive finding in favor assessee (kindly see pages 61 to 62 of CIT (A) order). 6. With regards to copy of email seized and marked as Party O – 2, Annexure A – 4, Page 106, it is submitted that the same is only a simple email regarding discussion for future plan of restructuring and does not contain any financial transaction or have a bearing on the income of the assessee group. The said email has no where made any reference to any accommodation entry nor to any transaction with regards to the same. That is why, even though, the learned AO has referred the said document at pages 16 and 17 of his order, however, no adverse ITA No.6627/Del./2017 and 15 other appeals 13 inference has been drawn with regards to the said document while making the additions with regards to share capital. Even the learned CIT (A) at page 62 of his order, has recorded that the said email has no financial implication and as such, it is submitted that the said document cannot be termed as “incriminating in nature”. 7. In view of the aforesaid submissions and judgments sited above, it is most humbly submitted that none of the documents so found and referred in the order of assessment are incriminating in nature, as additions so made by learned AO are not based on these documents. The learned AO has merely referred the said documents in the order of assessment, however, makes no adverse inference while making the additions with regards to the issue of share capital. That further and even though the learned CIT (A) has decided the legal issue against the assessee (kindly see pages 59 and 60 of the order), however, while examining the aforesaid documents independently, the learned CIT (A) has recorded, that the said documents are duly disclosed in the books of accounts and have no financial bearing and as such, cannot be termed as incriminating in nature. Reliance is placed on the findings of learned CIT (A) at pages 60 to 62 of his order. 8. The aforesaid arguments take care of appeals in Category 1 i.e. 12 appeals with regards to the legal issue.” 8. The learned Senior Counsel of the assessee argued that search proceedings were initiated on 20.09.2013 on Minda Group of cases and notice under section 153A of the Act was issued on 08.06.2015. As such, the assessment proceedings were final in respect ITA No.6627/Del./2017 and 15 other appeals 14 of the return of incomes filed for AY 2008-09 to 2011- 12 as no assessment was pending with regards to the said assessments on the date of search. He further, argued that additions in assessments under section 153A proceedings can only be made if the documents seized/ found are incriminating in nature i.e. documents seized during the course of search depict undisclosed income, whereas, in the case of assessee, only three set of documents have been seized during the course of search proceedings (as are referred in the assessment order), and beyond these three seized documents, no other document seized as a result of search has been referred or relied by the learned assessing officer in the order of assessment. The nature of these documents so seized and its implication/ bearing on taxable total income of the assessee – respondent has been explained by the learned Counsel of assessee, which are summarized as under: • With regards to the share certificates of 8 companies seized during the course of search, it was submitted that even the learned AO has not made any adverse observations with regards to the said documents, as the same cannot be said to be incriminating in nature, since the share certificates merely records the details of shares issued and allotted which are duly recorded in the books of accounts prior to the date of search. These share ITA No.6627/Del./2017 and 15 other appeals 15 certificates were only the statutory records kept with the companies, to be filed before ROC and the same was kept by the Secretarial department of the companies for necessary legal compliances. Thus, here it is submitted that seizure of share certificates does not come within the definition of “incriminating material”, as the transactions so referred in the said share certificates are duly recorded and forms part of the books of accounts of the respective companies. This fact is also admitted by learned CIT (A) at pages 60 and 61 of the order (even though CIT (A) dismissed the assessee’s appeal on legal issue, however, recorded a positive finding in favour of assessee with regards to share certificates to be not incriminating in nature). That further, reliance is placed on the order of Hon’ble ITAT Delhi in the case of M/s ACIT vs Moon Beverages Ltd. in ITA Nos. 115 to 118/Del/2018, wherein, share certificates have been held to be not incriminating in nature as the details mentioned therein, are duly recorded in the books of accounts and for a document to be incriminating, it should depict some undisclosed income unearthed as a result of search. • With regards, to document seized from M/s Jay Ushin Ltd. marked as Party O – 2, Annexure A – 1, Page 50, it was most humbly submitted that a perusal of the said document, which has been extracted by learned AO at pages 14 to 16 of his order, would show that only ITA No.6627/Del./2017 and 15 other appeals 16 transaction related to JPM group is with regards to receipt of unsecured loan of Rs. 95 lacs by M/s Jay Ace Technologies Ltd. from M/s Suhana Marketing Pvt. Ltd., with regards to unsecured loan and there is no other name which pertains to any of the companies of JPM Group. It is further, submitted that while framing the assessment of M/s Jay Ace Technologies Ltd. for AY 2013-14 (to which the document relates), no addition has been made by learned AO in the assessment under section 153A read with section 143(3) of the Act. That further, the said document nowhere refers or depicts that the share capital so raised by the Minda group is not genuine or bogus. Thus, here it is submitted that once the said document has been accepted to be recorded in books of accounts and no addition has been made with regards to the same, in the hands of M/s Jay Ace Technologies Ltd., the same document “cannot be treated as incriminating”, and that is why, even though the learned AO has referred the said document in the order of assessment, however, no adverse inference has been drawn with regards to the said document in the entire assessment order. Even the learned CIT (A) has recorded a positive finding in favor assessee (kindly see pages 61 to 62 of CIT (A) order). • With regards to copy of email seized and marked as Party O – 2, Annexure A – 4, Page 106, it is submitted that the same is only a simple email regarding ITA No.6627/Del./2017 and 15 other appeals 17 discussion for future plan of restructuring and does not contain any financial transaction or have a bearing on the income of the assessee group. The said email has no where made any reference to any accommodation entry nor to any transaction with regards to the same. That is why, even though, the learned AO has referred the said document at pages 16 and 17 of his order, however, no adverse inference has been drawn with regards to the said document while making the additions with regards to share capital. Even the learned CIT (A) at page 62 of his order, has recorded that the said email has no financial implication and as such, it is submitted that the said document cannot be termed as “incriminating in nature”. 9. In support of the aforesaid arguments, the learned counsel placed reliance on following judgments: a) Judgment of the High Court of Delhi in the case of CIT vs. Kabul Chawla reported in 380 ITR 573. b) Judgment of High Court of Delhi in the case of PCIT vs Jaypee Financial Services Ltd. reported in 280 Taxman 147. c) Judgment of the High Court of Delhi in the case of PCIT Meeta Gutgutia reported in 395 ITR 526. d) Judgment of the Supreme Court of India in the case of CIT vs Singhad Technical Education Society reported in 397 ITR 344. e) Order of ITAT Delhi in the case of ACIT vs Moon Beverages Ltd. in ITA No. 115 to 118/Del/2018. f) Order of ITAT Delhi in the case of DCIT vs Sundaram IT Parks Pvt. Ltd. in ITA No. 5166/Del/2018. ITA No.6627/Del./2017 and 15 other appeals 18 g) Order of ITAT Delhi in the case of ACIT vs M/s Five Vision Planners Pvt. Ltd. in ITA No. 4460/Del/2014. h) Judgment of High Court of Delhi in the case of PCIT vs M/s Dreamcity Buildwell Pvt. Ltd. in ITA No. 1152/2017. i) Order of ITAT Delhi M/s TDI Infrastructure Ltd. vs DCIT in ITA No. 5580, 4409, 4410 and 5072/Del/2012. j) Order of ITAT Delhi ACIT vs Realtech Construction Pvt. Ltd. (ITAT Delhi) in ITA No. 6569/Del/2016. 10. The learned senior counsel for the assessee further, submitted that that the said aforesaid legal argument was specifically taken before learned CIT (A), wherein, judgment of Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla reported in 380 ITR 573, were cited before learned CIT (A), which even finds mention at pages 8 of learned CIT (A) order. However, the learned CIT (A) vide order dated 25.08.2017 dismissed the said ground so raised by the assessee company at pages 57 to 58 of CIT (A) order, wherein, while dismissing the said appeal, the learned CIT (A) has recorded a finding that “The overall schema that emerges there from indicates that there was prima facie material available in this regard to enable the AO to initiate proceedings u/s 153A”. It was further submitted that the said finding so recorded by learned CIT (A), is against the settled proposition of law so laid down by Hon’ble High Court of Delhi, as was also cited before learned CIT (A). As it has been held in by various judicial authorities that “the scope of assessment and addition in 153A ITA No.6627/Del./2017 and 15 other appeals 19 proceedings is restricted to the incriminating material i.e. material depicting undisclosed income unearthed during the course of search”, as such, the finding of learned CIT (A) that there appears to be a prima facie material cannot be termed as “incriminating”, as the said material did not depict any undisclosed income of the assessee, is not as per the various judicial pronouncements. 11. That Ld. CIT DR Sh. Sanjay Kumar, placed heavy reliance on the order of AO and CIT (A) and argued that the documents so seized more specifically the share certificates had a bearing on total income of the assessee and thus, the same can be termed as incriminating. The learned CIT DR further argued that on the basis of the documents seized, inference has been drawn by learned AO and that is how additions have been made in the order of assessment. He argued that the post search investigations and statement of Sh. Rajesh Agrawal recorded by investigation wing post search, clearly depicted that the assessee’s were involved in taking accommodation entries and as such, post search investigations clearly is linked with the seized document would depict that the assessee’s have taken accommodation entries to route their undisclosed income in the books of account. 12. That the learned counsel of the assessee in rejoinder submitted that the arguments so made by learned CIT DR are contradictory to the law laid down by Hon’ble jurisdictional high court in the case of CIT vs Kabul Chawla ITA No.6627/Del./2017 and 15 other appeals 20 reported in 380 ITR 573 and further, the learned CIT DR has not been able to place reliance on any document/ material on record which can be termed as “incriminating” in nature, which was unearthed during the course of search. That further, out of copies of share certificates of 8 companies seized during the course of search, no addition or adverse inference was drawn in the case of 6 companies and as far as two assessee’s M/s JPM Tools Ltd. and M/s Jay Nikki Industries Ltd. is concerned, the copies of share certificates are also not incriminating, as the said document only shows the details of shares issued by those companies which are duly recorded in the books of accounts and as such, the same cannot be termed as “incriminating material”. The learned counsel for assessee placed reliance on the order of Hon’ble ITAT Delhi in the case of M/s ACIT vs. Moon Beverages Ltd. in ITA Nos. 115 to 118/Del/2018, wherein, share certificates have been held to be not incriminating in nature as the details mentioned therein, are duly recorded in the books of accounts and for a document to be incriminating, it should depict some undisclosed income unearthed as a result of search. That further, he argued that the post search investigation or statements recorded post search cannot be equated with the incriminating material found during the course of search, and on the said proposition the learned counsel of assessee relied on the judgment of Hon’ble High Court of Delhi PCIT vs. Jaypee Financial Servies Ltd. reported in 280 ITA No.6627/Del./2017 and 15 other appeals 21 Taxman 147. 13. We have heard the rival submissions and also perused the relevant findings given in the impugned orders as well as material placed on record. The core legal issue which has been argued before us is with regards to twelve appeals pertaining to AY 2008-09 to 2011-12 is; • Whether the additions so made in aforesaid twelve appeals are based on incriminating documents, which can lead to an inference that any undisclosed income has escaped assessment or there is any element of undisclosed income so as to be roped in assessment under section 153A for the assessment years which are unabated i.e. final. 14. The admitted facts, which has been agreed by both the parties, is that only three set of documents were seized during the course of search from the assessee’s, as have also been referred in the order of assessment at pages 14 to 17 of assessment order. For the sake of brevity, the said documents are being discussed as under: i) Document seized from M/s Jay Ushin Ltd. marked as Party O – 2, Annexure A – 1, Page 50, a perusal of the said document, which has been extracted by learned AO at pages 14 to 16 of his order, would show that only transaction related to JPM group is with ITA No.6627/Del./2017 and 15 other appeals 22 regards to receipt of unsecured loan of Rs. 95 lacs by M/s Jay Ace Technologies Ltd. from M/s Suhana Marketing Pvt. Ltd. and there is no other name which pertains to any of the companies of JPM Group. We have also, noticed that the said document nowhere mentions about the share capital, rather the said document is with regards to unsecured loan and also while framing the assessment of M/s Jay Ace Technologies Ltd. for AY 2013-14 (to which the document relates), no addition has been made by learned AO in the assessment under section 153A read with section 143(3) of the Act. Thus, here it is observed that once the said document has been accepted to be recorded in books of accounts and no addition has been made with regards to the same, in the hands of M/s Jay Ace Technologies Ltd., the same document “cannot be treated as incriminating” for other companies of the same group, and that is why, we have also noticed that even though the learned AO has referred the said document in the order of assessment, however, no adverse inference has been drawn even by the learned AO with regards to the said document in the entire assessment order. Similar findings have also been recorded by the learned CIT (A) at pages 60 of his order. ii) Copy of email seized and marked as Party O – 2, Annexure A – 4, Page 106, we have gone through the ITA No.6627/Del./2017 and 15 other appeals 23 said document, which is extracted by AO at page 17 of his order, it is apparent that the same is only a simple email regarding discussion for future plan of restructuring and does not contain any financial transaction or have a bearing on the income of the assessee group. The said email has no where made any reference to any accommodation entry nor to any transaction with regards to the share capital. That is why, even though, the learned AO has referred the said document at page 16 and 17 of his order, however, no adverse inference has been drawn with regards to the said document while making the additions with regards to share capital. Even the learned CIT (A) at page 60 and 61 of his order, has recorded that the said email has no financial implication and as such, not incriminating. iii) Share Certificates found during the course of search, with regards to allotment of shares by Minda group of companies to various companies, noted by AO at page 18 of his order. We have gone through the orders so passed by AO, CIT (A) and also the remand report so furnished by AO during the course of appellant proceedings and notice that these share certificates pertained to 8 companies, namely, M/s JA Builders Ltd, M/s JPM Automobiles Ltd, M/s IBER Medior Ltd, M/s JPM Tsukada Pvt Ltd, M/s Brilliant Jewels Pvt. Ltd, M/s JPM Tools Ltd, M/s JPM Farms ITA No.6627/Del./2017 and 15 other appeals 24 Pvt. Ltd, M/s Jay Nikki Industries Ltd. as recorded by CIT (A) at pages 59 and 60 of his order. In our opinion share certificates merely record the number of shares issued along with the price of shares, which are duly disclosed in the books of accounts so compiled by the assessee, as such, even if the share certificates have been found and seized the same cannot be taken to be “incriminating” in nature, as they merely record the details of transactions, which are duly disclosed and recorded in the books of accounts. The learned CIT DR though argued that original share certificates were seized during the course of search, however, the assessee’s case all throughout has been that photocopies of share certificates were seized. In any case, even in the remand report which has been extracted by CIT (A) at page 42 of his order, the AO has not been able to place material on record to rebut the contention of assessee that the share certificates were photocopies and not original. Even the Ld. CIT DR during the course of hearing has not been able to place on record any material to establish the factual position as to whether the share certificates seized were original or photocopies. However, on going through the orders of assessment, we have noticed that no addition has been made with regards to the share certificates seized of six companies seized by the Revenue and additions have only been made with regards to two companies i.e. M/s JPM Tools Ltd. and M/s Jay Nikki Industries ITA No.6627/Del./2017 and 15 other appeals 25 Ltd., wherein, also the learned AO in the order of assessment has not made the share certificates as a basis to make addition under section 68, rather, he has placed reliance on the post investigation report and statement of a third party Sh. Rajesh Agarwal. Thus, whether the share certificates were original or photocopies, the same will make no difference, as the same has not been made as basis by the AO in the impugned order of assessment. Similar view has also been taken by a coordinate bench of ITAT Delhi in the case of ACIT vs Moon Beverages Ltd. (ITAT Delhi) in ITA No. 115 to 118/Del/2018, wherein, following findings have been recorded, on which we draw our support: “46.1 Before deciding the issue on merit, we would first like to decide the legal ground raised by the assessee challenging the validity of the assumption of jurisdiction u/s 153A in absence of any incriminating material found during the course of search when the assessment was not pending. As mentioned earlier, the original return was filed on 30th September, 2009 declaring income at Rs.10,27,91,857/-. The assessment was completed u/s 143(3) determining the total income at Rs.10,27,91,857/-. This assessment was rectified u/s 154 of the IT Act determining the income at Rs.7,50,21,860/-. Thus, the assessment was completed and was not pending ITA No.6627/Del./2017 and 15 other appeals 26 on the date of search. A perusal of the assessment order shows that the addition is not based on any incriminating material, but, based on post-search enquiries or statements recorded u/s 132(4) of the Act. The share certificates and counterfoils thereof found during the search, in our opinion, cannot be construed as incriminating in nature 15. It is an admitted fact, as also admitted by both the parties that the aforesaid documents so referred in the order of assessment are the only documents which form the basis and edifice for acquiring jurisdiction under section 153A of the Act and there are no other documents which were found and seized. The arguments of learned CIT DR that the additions are based on post search investigations and statements recorded of Sh. Rajesh Agarwal which has live link with the documents seized during the course of search, seems to be contrary to the judicial discipline as have been laid down by jurisdictional high court. As, it would be worthwhile to note that it is now a well settled proposition of law that documents seized as a result of search must be incriminating and must relate to relevant assessment year whose assessments are sought to be reopened u/s.153A of the Act and the assessing officer cannot refer to any post search investigation or any other outside material to tinker with the assessments which are already final. This principle has been settled by the Hon’ble jurisdictional high court in ITA No.6627/Del./2017 and 15 other appeals 27 the case of CIT vs Kabul Chawla (supra) and various other judgments of jurisdictional high court along with order of this Tribunal. At this juncture, we would like to refer to decisions cited by the assessee’s counsel with reference to the judgment paper book on the aforesaid proposition as under: i) CIT vs Kabul Chawla (Delhi HC) reported in 380 ITR 573. 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found ITA No.6627/Del./2017 and 15 other appeals 28 in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. ii) PCIT vs Param Dairy Ltd. (Delhi HC) in ITA No. 37/2021. 5. We have considered the aforesaid contentions and are of the view that no substantial question of law arises, as the matter is squarely covered by Kabul Chawla supra, which has been correctly applied to the facts of the case by the ITAT. The ITAT, in the impugned ITA No.6627/Del./2017 and 15 other appeals 29 order has held that in the audited report filed by the assessee along with the report, cash book, ledger, bank book etc. were mentioned; that the respondent assessee was maintaining books on TALLY Accounting Software which was seized during the search and was being treated as incriminating material; however, regular books of account of the assessee, by no stretch of imagination, could be treated as incriminating material to form basis of framing assessment under Section 153A read with Section 143(3) of the Act. It was further held that assessment for the Assessment Years 2008- 2009 and 2009-2010 were completed under Section 143(3) vide orders dated 28th July, 2010 and 31st May, 2011 respectively and audited books of account were thoroughly examined and details of purchase of milk must have been scrutinized as it was part of audited financial statement of accounts; as per Kabul Chawla supra, completed assessments can be interfered only on the basis of some incriminating material unearth during the search. iii) PCIT vs Jaypee Financial Services Limited (Delhi HC) reported in 280 Taxman 147. Section 153A of the Income-tax Act, 1961 - Search and seizure - Assessment in case of - Assessment year 2008-09 - Assessee company was engaged in trading of equity shares, securities and commodities through ITA No.6627/Del./2017 and 15 other appeals 30 recognized exchange - It filed its return of income which was accepted and an assessment order was passed - Subsequently, a search operation under section 132 was conducted upon assessee - Thereafter, a notice under section 153A was issued against assessee - During course of post search proceedings, Assessing Officer found certain evidence showing client code modification done by assessee which were not for genuine reasons - Accordingly, Assessing Officer made addition on account of client code modification to income of assesssee - He also made an addition on account of income of assessee from selling equity shares of a company held by assessee to director of assessee at much below prevailing market price - Commissioner (Appeals) and Tribunal both held that said additions were not based on any incriminating material found during search and assessment was not pending on date of search, thus, impugned additions were unjustified and same were to be deleted- It was noted that revenue had failed to disclose any incriminating material against assessee found during search - Whether, therefore, impugned order passed by Commissioner (Appeals) and Tribunal was justified and same was to be upheld - Held, yes [Para 5] ITA No.6627/Del./2017 and 15 other appeals 31 iv) CIT vs SKS Ispat & Power Ltd. (Bombay HC) reported in 398 ITR 584. 2. Mr. Singh, the learned counsel for the appellant contends that the Tri bunal was not justified in deleting the addition made on account of unaccounted sundry creditors (purchases) and unexplained share of the money thereby limiting the scope of assessment under section153A of the Act on the basis of incriminating material discovered in the search only and thus denying the Revenue to assess the undisclosed income on the basis of other evidence or postsearch inquiries or investigations made during subsequent assessment proceedings. According to the learned counsel, the judgments relied on by the Tribunal while limiting the scope of inquiry under section153A of the Act to the extent of discovery of incriminating material during search only is improper. The said judgments were in respect of assessments which had taken place under section 143(3) of the Act. In the present case, the assessment has taken place under section 143(1) of the Act. The distinguishing feature in sections 143(1) and 143(3) has not been considered by the Tribunal in an assessment under section 143(3) of the Act a long drawn inquiry is contemplated. It would also amount to examination of evidence. However, inquiry under section 143(1) of the ITA No.6627/Del./2017 and 15 other appeals 32 Act is limited on the basis of return filed. In view of that the judgments relied on would not be applicable. 5. We have considered the arguments canvassed by the learned counsel for the respective parties. On perusal of section153A of the Act, it is manifest that it does not make any distinction between assessment conducted under section 143(1) and 143(3). This court had occasion to consider the scope of section153A of the Act in the case of Gurinder Singh Bawa and in the case of Continental Warehousing Corpn. (Nhava Sheva) Ltd. (referred to supra). It has been observed that section153A cannot be a tool to have a second inning of assessment either to the Revenue or the assessee. Even in the case of Gurinder Singh Bawa (referred to supra) the assessment was under section 143(1) of the Act and the court held that the scope of assessment after search under section153A would be limited to the incriminating evidence found during the search and no further. In the said judgment, the judgment of this court in Continental Warehousing Corpn. (Nhava Sheva) Ltd. (referred to supra) has been followed. 6. Considering the authoritative pronouncements of this court in the above referred cases one of which is also with regard to assessment under section 143(1), the issue is no longer res integra and stands concluded in the above referred judgments. In the case of ACIT vs Moon Beverages Ltd. (ITAT Delhi) in ITA No. 115 ITA No.6627/Del./2017 and 15 other appeals 33 to 118/Del/2018, this coordinate bench observed and held as under:- “46.1 Before deciding the issue on merit, we would first like to decide the legal ground raised by the assessee challenging the validity of the assumption of jurisdiction u/s 153A in absence of any incriminating material found during the course of search when the assessment was not pending. As mentioned earlier, the original return was filed on 30th September, 2009 declaring income at Rs.10,27,91,857/-. The assessment was completed u/s 143(3) determining the total income at Rs.10,27,91,857/-. This assessment was rectified u/s 154 of the IT Act determining the income at Rs.7,50,21,860/-. Thus, the assessment was completed and was not pending on the date of search. A perusal of the assessment order shows that the addition is not based on any incriminating material, but, based on post-search enquiries or statements recorded u/s 132(4) of the Act. The share certificates and counterfoils thereof found during the search, in our opinion, cannot be construed as incriminating in nature. Even the document appearing at page 59 of Annexure A-10 found and seized from the corporate office of M/s Hindustan Aqua Limited at 1010, Vijaya Building, Barakhamba Road, New Delhi, showing the ITA No.6627/Del./2017 and 15 other appeals 34 details of advance for purchase of shares or refund of share application money in our opinion cannot be construed as incriminating since the entries are duly recorded in the books of account. The AO nowhere has disputed or challenged the above submission of the assessee before him as appears at page 43 of the assessment order. Therefore, once the entries are recorded in the books of account, the same in our opinion cannot be construed as incriminating in nature. So far as statements u/s 132(4) is concerned, the same are also not incriminating in nature as held in various decisions. Under these circumstances, we are of the considered opinion that when the addition is not based on any incriminating material found as a result of search, no addition can be made u/s 153A/143(3) of the Act.” 16. Thus, in view of our aforesaid discussion and also in view of aforesaid judgments, we hold that the concluded assessments cannot be interfered with unless there is incriminating material discovered from the seized documents as a result of search and further, no additions can be made where the assessments are framed u/s.153A for unabated year i.e. where no assessment is pending. The seized documents must at least clearly point out that there is some undisclosed income, which here in this case is completely absent, as is discussed above, and thus, are not ITA No.6627/Del./2017 and 15 other appeals 35 in the nature of incriminating material so as to warrant any addition. 17. In so far as the submissions made by ld. CIT-DR, regarding seized documents having bearing on total income becoming incriminating documents automatically, we are not impressed with the arguments of Ld CIT DR, as the same goes contrary to the judgments of jurisdictional high court as cited above. And further, with reference to the order of assessment or even going by the order of learned CIT (A), the learned CIT DR was not able to point out any single document which was not disclosed by assessee prior to search proceedings and neither the judgments so relied by counsel of assessee were rebutted or contradicted by learned CIT DR. 18. In view of our observations and findings given hereinabove, we have no hesitation to hold that firstly, none of the documents mentioned in the order of assessment more specifically the copy of flowchart, email and share certificates are incriminating in nature out of which any adverse inference can be drawn as to any undisclosed income, relating to assessee-company have been unearthed during the course of search and; since, the impugned assessment year from 2008-09 to 2011-12 were not pending, as the assessment stood completed prior to the date of search, therefore, we hold that without any incriminating material, concluded assessments cannot be ITA No.6627/Del./2017 and 15 other appeals 36 tinkered with and no addition can be made without there being any incriminating material for the impugned assessment year. 19. Accordingly, we hold that the additions made by the Assessing Officer are beyond the scope of Section 153A of the Income Tax Act, 1961. 20. In view of the above discussion, we allow the application under Rule 27 so filed by the assessee – respondent in ITA No. 6627/Del/2017 and hold that since no incriminating material was found as a result of the search conducted on the assessee, therefore, the notice issued for initiation of proceedings u/s 153A of the Act and the assessment framed subsequently by bringing to tax such additions which were beyond the scope of assessments so framed under section 153A of the Act. Hence, we hold that the impugned assessments so framed are without jurisdiction and are quashed. We hold and direct accordingly. 21. Identical applications under Rule 27 have been filed by assessee in following 12 appeals: i) M/s Jay Iron & Steel Ltd. AY 2008-09: ITA No. 6626/Del/2017 AY 2009-10: ITA No. 6639/Del/2017 AY 2010-11: ITA No. 6628/Del/2017 AY 2011-12: ITA No. 6629/Del/2017 ii) M/s JPM Tools Ltd. AY 2010-11: ITA No. 7280/Del/2017 AY 2011-12: ITA No. 7281/Del/2017 iii) M/s Jay Auto Components Ltd. AY 2008-09: ITA No. 6627/Del/2017 AY 2009-10: ITA No. 6622/Del/2017 ITA No.6627/Del./2017 and 15 other appeals 37 AY 2010-11: ITA No. 6623/Del/2017 AY 2011-12: ITA No. 6624/Del/2017 iv) M/s Jay FE Cylinder Ltd. AY 2011-12: ITA No. 6640/Del/2017 v) M/s Jay Ace Technologies Ltd. AY 2010-11: ITA No. 6638/Del/2017 22. Since the facts, enquiries made by lower authorities and findings so recorded by lower authorities are identical in all the aforesaid cases and additions in the aforesaid appeals also are not based on any incriminating material found during the course of search and we have already held that the addition made by the AO being not based on any incriminating material, the addition cannot be sustained in the orders passed u/s 153A/143(3) of the Act. Therefore, the applications filed under Rule 27 of the ITAT Rule in all the remaining 11 appeals are allowed. 23. In the result, all the applications so filed under Rule 27 so filed by the assessee’s are allowed and all the appeals filed by the Revenue are dismissed and as a consequence the notice issued for initiation of proceedings u/s 153A of the Act and the assessment framed subsequently are held to be without jurisdiction and thus, quashed. MERITS OF THE ADDITIONS 24. Now coming to the merits of the case, the learned CIT DR at the outset submitted that all the aforesaid sixteen appeals (twelve appeals on which legal issue is also involved and four ITA No.6627/Del./2017 and 15 other appeals 38 independent appeals) again involve common issue and even the findings so recorded by learned CIT (A) and learned AO are identical in all the cases and with the consent of both the parties and also after perusing the brief files of all the assessments, we are also of the considered opinion that if any one appeal is taken up and decided it will have same bearing on the fate of other appeals, as all the appeals have identical facts and findings. It was further, agreed by both the parties that M/s Jay Auto Components Ltd. (AY 2008-09 ITA No. 6627/Del/2017) may be taken as lead matter, since the findings of both learned AO and CIT (A) are similar in all the appeals and thus, if one appeal is heard on merits, it will take care of all other appeals as well. 25. That the Ld. CIT DR Sh. Sanjay Kumar, placed heavy reliance on the order of AO and argued that the addition has been made in the instant case under section 68 on account of alleged accommodation entry taken by the assessee company in the form of share capital of a sum of Rs. 2,53,50,000/-. The Ld. CIT DR further argued that the said addition is based on the discreet and detailed enquiries being conducted by the Investigation wing post search, wherein, it was found that the subscribers to share capital are non – existent, whereas, various subscribers were found to be functioning at the common addresses, which too were mere dummy addresses, as no one was functioning from the ITA No.6627/Del./2017 and 15 other appeals 39 said addresses. 26. The Ld. CIT DR further argued that the statement of Sh. Rajesh Agarwal was recorded by investigation wing during the post search proceedings, who has admitted to be engaged in providing accommodation entries and have also admitted to have given accommodation entries to the assessee group, as such, the same is an important piece of evidence gathered by department against the assessee and denial of cross – examination by AO during the assessment proceedings or even in the remand proceedings is not fatal, as modus operandi of cash been deposited in companies managed by Sh. Rajesh Agarwal and cheques being issued to assessee company has been established by AO in the order of assessment. 27. The Ld. CIT DR further argued that the learned AO during the course of assessment proceedings issued notices under section 133(6) of the Act to the subscriber companies, which was received back unserved, however, replies were received from the said companies. It was further submitted by the learned CIT DR that the assessee failed to produce the directors of the subscriber companies, which was specifically asked for by the AO during the course of assessment proceedings. 28. LD. CIT DR pointed out that, the assessee companies did not command such huge premium and even the subscriber companies have meager income, which shows ITA No.6627/Del./2017 and 15 other appeals 40 that they do not have their own funds to invest in the share capital of the assessee group. The learned CIT DR further placed reliance on the judgments of Hon’ble High Court of Delhi in the case of PCIT vs NDR Promoters Ltd. reported in 410 ITR 379, CIT vs Nova Promoters & Finlease Pvt. Ltd. reported in 342 ITR 169 and Hon’ble Supreme Court in the case of PCIT vs NRA Iron & Steel (P) Ltd. reported in 412 ITR 161. 29. The Ld. Counsel for the Assessee – Appellant, Sh. Salil Aggarwal, Senior Advocate vehemently opposed the grounds of appeal so raised by the Revenue. In addition to the oral arguments, the learned counsel for the assessee – appellant furnished brief written synopsis, which is being extracted here below for the sake of brevity and completeness of records: “Synopsis in Brief with regards to merits of additions made in captioned assessee’s in Category 1 and 2 cases 9. It is again been submitted that the appeal with regards to M/s Jay Iron & Steel Ltd. pertaining to AY 2008-09, for which legal submissions have been made earlier, could also be taken as lead matter with regards to the addition on merits, as if the said appeal is argued, it will cover all 16 appeals coming on Category 1 and 2, since investigations and findings so done by learned AO and CIT (A) are identical with respect to these 16 appeals. ITA No.6627/Del./2017 and 15 other appeals 41 10. To sum up, the findings of learned AO may be summed up in following bullet points: a) Relied on investigation wing report and also held that companies of JPM group have no great business prospects and as such, cannot command huge premium. The AO further held that the subscribing companies have meagre income as per their income tax returns and were thus, not in a position to invest in share capital of assessee JPM group (kindly see pages 2 to 14 of AO’s Order). b) Notices were issued to investor companies under section 133(6) of the Act, however, the replies so submitted by them are not satisfactory and assessee company has failed to produce directors of investor companies for deposition (kindly see pages 24 to 30 and 40 to 41 of AO’s order) c) Survey operation was conducted by Investigation wing of Sh. Rajesh Aggarwal (alleged accommodation entry provider), who has admitted to have arranged entries of share capital of Rs. 76.88 crores for JPM group (kindly see pages 30 to 37 of AO’s order). d) In view of the above, concluding findings of learned AO are at pages 52 to 61 of the order of assessment. 11. The aforesaid findings so recorded by learned AO, were rebutted by assessee before the learned CIT (A) and considered by learned CIT (A). The said submissions so filed before learned CIT (A) and findings so recorded by ITA No.6627/Del./2017 and 15 other appeals 42 learned CIT (A), on which completed reliance is placed by the assessee group, can be summarized as below: a) JPM group is a leading manufacturer in the country with regards to automotive components and its esteemed customers includes esteemed companies like Maruti Suzuki, Honda, Hyundai etc. That the entire JPM group commanded a turnover of over Rs. 2500 crores in financial year 2014-15 and further, even one of the companies in the group namely, M/s Jay Ushin Ltd. is a listed company with BSE for which the price of shares in open market are being traded at more then Rs. 200. As such, the allegation of learned AO that the group does not command a premium of Rs. 90 is factually incorrect and fallacious (kindly see pages 12 to 16 of CIT (A)’s order). Finding of learned CIT (A) is at page 66 of the order, wherein, he has recorded that with regards to valuation of share premium, the provisions of section 56(2)(vii) have been brought in statute from AY 2013-14, thus, the same is not applicable for assessments till AY 2012-13 and further, there is no evidence been put forward by learned AO to prove that the share premium was received in consideration of any collateral payment and as such, there is no material with the learned AO to have concluded that the transaction with regards to share capital is not genuine (kindly see page 66 of CIT (A)’s order). b) Notices under section 133(6) were complied by all the subscribers which contains all the necessary details, as ITA No.6627/Del./2017 and 15 other appeals 43 were called for by the AO, however, learned AO merely on subjective opinion without conducting any further enquiry/ investigation held that the documents so furnished are not satisfactory. It is also submitted that no notice under section 131 of the Act was issued by learned AO even though, a specific request in this regard was made by assessee before the learned AO (kindly see pages 44 and 45 of AO’s order and pages 18 of CIT (A)’s order) In this regard, it is submitted that the documents so submitted before learned AO have been tabulated at pages 16 and 17 of CIT (A)’s order, which will show that all the documents so called for by the learned AO, were supplied during the course of assessment proceedings. However, learned AO without conducting any further enquiries, rejected the aforesaid documents, and that too without rebutting the aforesaid documents merely on the basis that the income returned by the subscriber companies is very nominal. It is further submitted that the learned AO merely relied on the findings recorded in investigation wing report, and held that the subscribers are not existing at the given addresses, ignoring the fact that the assessee furnished fresh addresses to the learned, as most of the companies had been amalgamated with other companies, even after the aforesaid reply the learned AO failed to issue any summon under section 131 of the Act (kindly see pages 19 to 24 of CIT (A)’s order). ITA No.6627/Del./2017 and 15 other appeals 44 Finding of CIT (A) is at page 62 to 63 of the order, wherein, it has been held by learned CIT (A) that all the said documents so submitted by subscriber companies and submitted by assessee were before the learned AO and if the balance sheets of the subscriber companies, would have been minutely examined by learned AO, it would have made it clear that the said companies have high net worth to invest in shares of the assessee companies and as such, income returned cannot be the only criteria for the purposes of section 68 of the Act, more so, when the transactions are through account payee cheques and there is no evidence gathered by the learned AO with regards to any collateral payment exchanging hands for issuance of share capital. Reliance is placed on the judgment of Hon’ble High Court of Delhi in the case of CIT vs Good View Trading (P) Ltd. reported in 77 taxmann.com 204 (kindly see pages 62 to 63 and 65 to 69 of CIT (A)’s order). c) The statement of Sh. Rajesh Aggarwal, alleged accommodation entry operator, was provided to the assessee at the fag end of the assessment proceedings, wherein, immediately assessee demanded for his cross examination, which was denied by learned AO (kindly see pages 50 to 52 of AO’s order and 25 to 28 of CIT (A)’s order). That further, the statement so provided of Sh. Rajesh Aggarwal, would show that his statement is inconsistent and as such, cannot be relied upon (kindly see page 24 of CIT (A)’s order). ITA No.6627/Del./2017 and 15 other appeals 45 Finding of learned CIT (A) is at pages 63 to 65 of his order, wherein, it has been held that the learned AO has not provided opportunity to cross – examine of Sh. Rajesh Aggarwal to the assessee which statement is also inconsistent at various stages, whereas, the learned AO has heavily relied on his statement, which is against the principles of “audi alteram partem”, and as such, his statement cannot be relied for making any addition in the hands of assessee company. In doing so, the learned CIT (A) relied on various case laws, including the latest case of Hon’ble Apex Court in the case of M/s Andaman Timber Industrial vs Commissioner of Central Excise (kindly see pages 63 to 65 of CIT (A)’s order). d) The concluding findings so recorded by learned CIT (A) are at pages 66 to 69 of his order, on which heavy reliance is placed by the assessee company. 12. Apart from the above, reliance is placed on the following judgments with regards to exclusion of statement and not to be made a basis for addition of Sh. Rajesh Aggarwal: a) [2015] 127 DTR 241 (SC) Andaman Timber Industries vs. CCE b) 258 ITR 317 (Del) United Electricals vs. CIT c) [1980] 125 ITR 713 (SC) KishinchandChellaram vs. CIT d) IT (SS) A. No. 12/D/07 Shri RadheyShyam Bansal vs. ACIT e) IT(SS) No. 233 and 234/D/2006 dated 19.09.2008 Shri Manit Gulati and Sandeep Gulati ITA No.6627/Del./2017 and 15 other appeals 46 f) 109 TTJ 700 (Del) SMC Share Brokers Ltd. vs DCIT affirmed in 288 ITR 345 (Del) CIT vs. SMC Share Broker Ltd. g) [2007] 293 ITR 43 (Del) CIT vs. S.M. Aggarwal h) 322 ITR 396 (Del) CIT vs Ashwani Gupta i) 295 ITR 105 (Del) CIT vs. Dharam Pal Prem chand Ltd. j) 306 ITR 27 (Del) CIT vs. Rajesh Kumar k) 303 ITR 95 (Del) CIT vs. Pradeep Kumar Gupta l) 315 ITR 265 (Del) CIT vs. M/s Jindal Vegetables Products Limited 13. It is further submitted that the entire assessment order is merely copy and paste of observations of the Investigation wing in the appraisal report. Thus, reliance is placed on the following judgments on the proposition that, when no appropriate investigation has been carried out by the learned A O and as such the burden which lay upon the learned A.O. has not been discharged, as such, the addition so made is unsustainable and deserves to be deleted. a) PCIT vs Krishna Devi (Delhi HC) reported in 279 Taxman 148. b) 149 TTJ 165 ITAT (TM) Vishnu Jaiswal vs CIT c) [2013] 357 ITR 146 (Del) CIT vs. Fair Finvest Ltd. d) [2014] 361 ITR 10 (Del) CIT vs. Gangeshwari Metal (P) Ltd. e) ITA No. 871/D/2010 A.Y. 2003-04 dated 25.05.2012 ITO vs. M/s Excellance Town Planner (P) Ltd. ITA No.6627/Del./2017 and 15 other appeals 47 f) ITA No. 1125/D/2012 A.Y. 2002-03 dated 01.06.2012 ITO vs. M/s Hi Tech Accurate Communication (P) Ltd. g) ITA No. 1177/D/2012 A.Y. 2001-02 dated 05.10.2012 ITO vs. India Texfab Marketing Ltd. h) ITA No. 4498/D2010 A.Y. 2003-04 dated 30.12.2010 Intimate Jewels (P) Ltd. i) ITA No. 1078/Del/2013 Mithila Credit Services Ltd. vs. ITO j) ITA No. 212/2012 (Del) dated 11.04.2012 CIT vs. Goel Sons Golden Estate (P) Ltd. k) ITA No. 50/Del/2011 ACIT vs. Panchanan International Pvt. Ltd. l) ITA No. 535/Del/2009 dated 31.03.2015 Asst. CIT vs. Lakshmi Float Glass Ltd. m) ITA No. 71, 72 & 84 of 2015 (Del) dated 12.08.2015 CIT vs. Vrindavan Farms Pvt. Ltd. 14. In light of the aforesaid, it is thus, prayed that all 16 appeals so filed by department on merits since involves consideration of identical issues and in view of our aforesaid submissions the appeals so filed by Revenue be dismissed.” 30. The Ld. Counsel for the assessee further argued that about the seizure of the copies of the blank signed share certificates relating to share capital and premium received by the assessee constituting an incriminating material found during the course of search, he submitted that ITA No.6627/Del./2017 and 15 other appeals 48 originals were never found at the premises of the assessee during the course of search. He submitted that such originals are always with the shareholder and not with the assessee company. He further submitted that photocopy of a document cannot be an evidence. He submitted that even the photocopies with respect to all the shareholders except some parties, were not found from the premises of the assessee. He submitted that during the section 153A proceedings, assessee has submitted the complete documentary evidences with respect to the permanent account number, bank statements, audited accounts, income tax return, memorandum of articles and articles of Association, confirming the transaction as well as the resolutions, which proves the identity, creditworthiness and genuineness of the share applicants. He submitted that all the shareholders complied with the notices issued by the assessing officer u/s 133 (6) of the act. He therefore, submitted that all the queries raised by the assessing officer were directly replied by the shareholders. Thus, according to him, the initial onus is discharged by the assessee. He submitted that the learned assessing officer has not made any concrete enquiry with any of the shareholders, as no summon under section 131 of the Act was ever issued by the AO. He submitted that when the AO does not carry out any enquiry with respect to those shareholders and merely places reliance on investigation report, it does not reject the evidence submitted by the assessee, he does not have a ITA No.6627/Del./2017 and 15 other appeals 49 right to make any addition u/s 68 of the Income Tax Act, as assessee has discharged initial onus cast upon him. 31. The learned Counsel of assessee further submitted that the JPM group is a leading manufacturer in the country with regards to automotive components and its esteemed customers includes esteemed companies like Maruti Suzuki, Honda, Hyundai etc. That the entire JPM group commanded a turnover of over Rs. 2500 crores in financial year 2014-15 and further, even one of the companies in the group namely, M/s Jay Ushin Ltd. is a listed company with BSE for which the price of shares in open market are being traded at more than Rs. 200. As such, the allegation of learned AO and CIT DR that the group does not command a premium of Rs. 90 is factually incorrect and fallacious. 32. The learned Counsel of assessee at the time of hearing was directed to file net worth of these companies placed before the authorities below, which he pleaded at the time of hearing that even all the subscribing companies had sufficient net worth to make investment in the assessee group, which is evident from the audited financial statements submitted by the said companies before the learned AO, however, the learned AO failed to appreciate the said evidence nor contradicted the same. The copy of the statements was filed after the conclusion of hearing as directed by us to verify the same. For the sake of ITA No.6627/Del./2017 and 15 other appeals 50 convenience the net worth of subscribers and the investments made by them in M/s Jay Auto Components Ltd., is being tabulated below as submitted before us (similar is the position in all the 16 assessee’s): Subscribing Company Net Worth as per Balance Sheet (in Rs) Investment made in share capital (in Rs) M/s Festino Agencies Pvt. Ltd. 2, 83, 00, 000/- 15, 00 , 000/- M/s Eversite Commodities Pvt. Ltd. 2, 65, 84, 000/- 15, 00, 000/- M/s Gajanand Agrotech Ltd. 7, 81, 98, 000/- 15, 00, 000/- M/s Gajeshwar Sales Pvt. Ltd. 3, 88, 61, 942/- 5, 00, 000/- M/s Matribhumi Commodities Pvt. Ltd. 4, 15, 90, 000/- 5, 00, 000/- M/s Monalisa Commercial Pvt. Ltd. 3, 74, 35, 000/- 16, 00, 000/- ITA No.6627/Del./2017 and 15 other appeals 51 Lambodar Commercial Pvt. Ltd. 2, 96, 25, 000/- 8, 00, 000/- Bhavtarani Sales Pvt. Ltd. 3, 76, 50, 000/- 18, 00, 000/- M/s Mukul Mills Pvt. Ltd. 2, 22, 33, 000/- 18, 00, 000/- M/s Mayur Vanijya Pvt. Ltd. 3, 32, 99, 907/- 5, 00, 000/- M/s Octal Commodities Pvt. Ltd. 3, 03, 42, 000/- 15, 00, 000/- M/s Vandana Designs Pvt. Ltd. 1, 65, 05, 000/- 8, 00, 000/- M/s Exotica Commodities Pvt. Ltd. 1, 81, 73, 303/- 7, 00, 000/- M/s Kushal Infotech Pvt. Ltd. 4, 47, 41, 466/- 17, 00, 000/- M/s Mupnar Trexim 2, 62, 78, 000/- 33, 50, 000/- ITA No.6627/Del./2017 and 15 other appeals 52 Pvt. Ltd. M/s Ranisati Apartments Pvt. Ltd. 1, 58, 89, 000/- 14, 00, 000/- M/s Festino Agro Pvt. Ltd. 3, 89, 58, 000/- 24, 00, 000/- M/s Frost Traders Pvt. Ltd. 2, 30, 68, 113/- 18, 00, 000/- M/s Trimline Vyapaar Pvt. Ltd. 2, 91, 44, 889/- 4, 00, 000/- 33. The learned counsel of the assessee further relied on the findings of CIT (A), at page 62 to 63 of the order, wherein, it has been held by learned CIT (A) that all the said documents so submitted by subscriber companies and submitted by assessee were before the learned AO and if the balance sheets of the subscriber companies, would have been minutely examined by learned AO, it would have made it clear that the said companies have high net worth to invest in shares of the assessee companies and as such, income returned cannot be the only criteria for the purposes of section 68 of the Act, more so, when the transactions are through account payee cheques and there is no evidence gathered by the learned AO with regards to any collateral payment exchanging hands for issuance of share capital. ITA No.6627/Del./2017 and 15 other appeals 53 Reliance was placed on the judgment of Hon’ble High Court of Delhi in the case of CIT vs Good View Trading (P) Ltd. reported in 77 taxmann.com 204. 34. The learned counsel for the assessee further stated that the statement of Sh. Rajesh Aggarwal, alleged accommodation entry operator, was provided to the assessee at the fag end of the assessment proceedings, wherein, immediately assessee demanded for his cross examination, which was denied by learned AO in the assessment proceedings and even at the remand proceedings and also by the learned CIT (A) (at pages 50 to 52 of AO’s order and 25 to 28 of CIT (A)’s order). That further, the statement so provided of Sh. Rajesh Aggarwal, would show that his statement is inconsistent and as such, cannot be relied upon (at page 24 of CIT (A)’s order). The learned counsel for assessee further relied on the finding of learned CIT (A) (at pages 63 to 65 of his order), wherein, it has been held by CIT (A) that the learned AO has not provided opportunity to cross – examine of Sh. Rajesh Aggarwal to the assessee which statement is also inconsistent at various stages, whereas, the learned AO has heavily relied on his statement, which is against the principles of “audi alteram partem”, and as such, his statement cannot be relied for making any addition in the hands of assessee company. In doing so, the learned CIT (A) relied on various case laws, including the latest case of Hon’ble Apex Court in the case of M/s Andaman Timber ITA No.6627/Del./2017 and 15 other appeals 54 Industrial vs Commissioner of Central Excise reported in 127 DTR 241. Reliance is placed on the said case law by the learned counsel of the assessee, as well. 35. In response, the learned CIT DR relied on his submissions made earlier and heavily relied on the order so passed by the learned AO. DECISION 36. We have carefully considered the rival contentions as well as perused the orders of both learned assessing officer and learned CIT – A. For all these years, there is only one of addition made by the learned assessing officer i.e. in respect to the issue of share capital along with premium under section 68 of the Income Tax Act, 1961. 37. At the outset, we have noticed that one of the main allegation of the Assessing Officer is that the notices sent u/s 133 (6) were not received by the respective parties but still replies were received from all the subscriber companies. In fact, all the notices were ultimately duly complied by the parties who have sent all the requisite details as required by the Assessing Officer in his notices u/s.133(6). In fact, we have gone through the assessment order, and notice that all the subscribing companies were amalgamated with three companies and the said three companies have duly complied with all the notices so issued by AO under section 133(6) of the Act by filing necessary details. The said fact has also duly been noted by AO in his order of assessment ITA No.6627/Del./2017 and 15 other appeals 55 at page 42 and 43 of the order. 38. Thus, the reason assigned by the Assessing Officer does not have much credence to dislodge the evidences filed by these parties to corroborate the assessee’s explanation and the documents submitted by the assessee to prove the nature and source of credit. Regarding various observations and allegations of the Assessing Officer, the ld. counsel has given a very detailed rebuttal based on documents on record as incorporated above in the foregoing paragraphs. From bare perusal of the explanation duly supported by the documents, we find that whatever so called inquiry which was conducted by learned AO has not lead to any iota of adverse material so as to hold that the transactions are not genuine. Further, we find that nowhere Assessing Officer has made any effort or conducted any investigation to rebut the documentary evidences so filed by the assessee in order to support the genuineness of share capital received from subscribers and even in response to the replies received from subscriber companies to the notices u/s.133 (6) and what extra he wanted to examine, has not been mentioned. 39. Another allegation by the Assessing Officer was that these companies have received funds from other companies before issuance of cheques through the assessee company and also tried to analyze fund trail to assume that assessee company had ploughed back its own money in the books of account in the garb of share application money. The said ITA No.6627/Del./2017 and 15 other appeals 56 allegation itself is based on erroneous assumption of facts which has been demonstrated by the ld. counsel, as we have noticed that in the entire assessment order the learned AO has only at one place tried to analyze the fund trail, which is at pages 14 to 16 of the AO’s order, which too was with regards to unsecured loan taken by M/s Jay Ace Technologies Pvt. Ltd. for which no addition was made by AO on account of share capital. Nowhere in the so called alleged cash trail there is an element of cash or anything has been brought on record that any of the trails, assessee’s undisclosed cash or income has been routed. Thus, the said finding of learned AO is bereft of merit and even the reliance so placed by learned CIT DR on the same is without appreciation of material available on record. 40. In so far as the source of the fund and the creditworthiness of the parties, it is seen from the financial statements so produced by learned counsel of the assessee, that these parties had sufficient own funds to invest in the form of net – worth and the finding of the learned AO that the subscribing companies have nominal income is in complete ignorance of the fact that income is not the sole criterion to make investment, even the net worth or past savings can be used to make investments, which have not been appreciated by learned AO. As stated above the learned counsel of the assessee was required to furnish the details of fund position in the respective balance sheets of the subscribing companies and to see the net worth of ITA No.6627/Del./2017 and 15 other appeals 57 subscribers and the investments made by them in M/s Jay Auto Components Ltd. The details are being tabulated below (similar is the position in all the 16 assessee’s): Subscribing Company Net Worth as per Balance Sheet (in Rs) Investment made in share capital (in Rs) M/s Festino Agencies Pvt. Ltd. 2, 83, 00, 000/- 15, 00 , 000/- M/s Eversite Commodities Pvt. Ltd. 2, 65, 84, 000/- 15, 00, 000/- M/s Gajanand Agrotech Ltd. 7, 81, 98, 000/- 15, 00, 000/- M/s Gajeshwar Sales Pvt. Ltd. 3, 88, 61, 942/- 5, 00, 000/- M/s Matribhumi Commodities Pvt. Ltd. 4, 15, 90, 000/- 5, 00, 000/- M/s Monalisa 3, 74, 35, 000/- 16, 00, 000/- ITA No.6627/Del./2017 and 15 other appeals 58 Commercial Pvt. Ltd. Lambodar Commercial Pvt. Ltd. 2, 96, 25, 000/- 8, 00, 000/- Bhavtarani Sales Pvt. Ltd. 3, 76, 50, 000/- 18, 00, 000/- M/s Mukul Mills Pvt. Ltd. 2, 22, 33, 000/- 18, 00, 000/- M/s Mayur Vanijya Pvt. Ltd. 3, 32, 99, 907/- 5, 00, 000/- M/s Octal Commodities Pvt. Ltd. 3, 03, 42, 000/- 15, 00, 000/- M/s Vandana Designs Pvt. Ltd. 1, 65, 05, 000/- 8, 00, 000/- M/s Exotica Commodities Pvt. Ltd. 1, 81, 73, 303/- 7, 00, 000/- M/s Kushal Infotech Pvt. Ltd. 4, 47, 41, 466/- 17, 00, 000/- ITA No.6627/Del./2017 and 15 other appeals 59 M/s Mupnar Trexim Pvt. Ltd. 2, 62, 78, 000/- 33, 50, 000/- M/s Ranisati Apartments Pvt. Ltd. 1, 58, 89, 000/- 14, 00, 000/- M/s Festino Agro Pvt. Ltd. 3, 89, 58, 000/- 24, 00, 000/- M/s Frost Traders Pvt. Ltd. 2, 30, 68, 113/- 18, 00, 000/- M/s Trimline Vyapaar Pvt. Ltd. 2, 91, 44, 889/- 4, 00, 000/- 41. From the above, it is apparently clear that the subscribing companies had sufficient net worth to make investments in the assessee group companies and as such, we have no hesitation in holding that income is not the sole criterion, whereas, a holistic view needs to be taken, as to investee companies can also make investments out of its past savings or its net worth and the said fact has not been appreciated/ rebutted by AO in the impugned assessment orders. We have even gone through the remand report which was filed by AO before the CIT (A), therein; also the AO has not been able to rebut the fact that the subscribing ITA No.6627/Del./2017 and 15 other appeals 60 companies had sufficient funds available in their books of account, which is evident from the net worth as emanating from the financial statements of the subscribing companies. Even the ld CIT DR has failed to rebut the finding so recorded by CIT (A) at page 61 of his order, wherein, he has recorded that the subscribing companies had sufficient net worth available in the balance sheet to make investments in the assessee companies and income is not the sole criterion to make investments. While recording the aforesaid finding, we would like to rely on the judgment of Hon’ble High Court of Delhi in the case of PCIT vs Good View Trading Pvt. Ltd. reported in 77 taxmann.com 204, wherein, it has been held as below: “8. It is quite evident from the CIT (A)'s reasoning in paragraph 4.3, that the materials clearly pointed to the share applicants' possessing substantial means to invest in the assessee's company. The AO seized certain material to say that minimal or insubstantial amounts was paid as tax by such share applicants and did not carry out a deeper analysis or rather chose to ignore it. In these circumstances, the inferences drawn by the CIT (A) are not only factual but facially accurate. 9. Having regard to these circumstances, the Court discerns no question of law, least a substantial question, having regard to the fact that the judgment in Lovely Exports (supra)was cited and applied. ITA No.6627/Del./2017 and 15 other appeals 61 10. For these reasons, there is no merit in the appeal; the same is accordingly dismissed.” 42. Further, the learned AO and Ld. CIT DR have also drawn heavy support from the investigation report of the Kolkata Investigation Wing and the statement of Sh. Rajesh Agrawal. On going through the assessment order and the remand report, we find that the statement of Sh. Rajesh Agrawal was provided to the assessee at the fag end of assessment, i.e., on 11.03.2016 and immediately thereafter the assessee vide reply dated 21.03.2016 had sought for the cross examination of Sh. Rajesh Agarwal, which could not be provided to the assessee. The said issue of cross examination was also raised before ld CIT (A) vide written submission which was accepted by ld CIT (A), wherein, the matter was remanded to the file of AO, even then the learned AO failed to provide cross – examination of Sh. Rajesh Agarwal to the assessee company. Thus, after going through the record, we have no hesitation in holding that it was incumbent upon the learned AO to have provided opportunity to cross examine the person or atleast issued commission to Revenue Authorities at Kolkata to summon and specifically inquire about alleged entry operator, because heavy reliance has been placed on the statement. It is an elementary principle of law that, if any adverse inference is drawn against the assessee based on statement of a third party and no opportunity is provided to cross examine, then such a statement loses its credibility as ITA No.6627/Del./2017 and 15 other appeals 62 primary evidence. Thus, in absence of cross – examination of Sh. Rajesh Agarwal, the said statement needs to be excluded and cannot be relied upon as a piece of evidence to make any addition. On this point, reliance is placed on the judgment of Hon'ble Apex Court in the case of M/s Andaman Timber Industries vs. CCE (SC) reported in 127 DTR 241 has held as follows: "According to us, not allowing the assessee to cross- examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross- examination of the said dealers could not have brought ITA No.6627/Del./2017 and 15 other appeals 63 out any material which would not be in possession of the appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the appellant wanted to cross-examine those dealers and what As mentioned above, the appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17.03.2005 was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the ITA No.6627/Del./2017 and 15 other appeals 64 Show Cause Notice We, thus, set aside the impugned order as passed by the Tribunal and allow this appeal." 43. We have further, noticed that the AO in the order of assessment has relied on report and observations of the Investigation wing, which otherwise does not implicate any of the assessees, whereas, no concrete enquiry or investigation had been carried out by the assessing officer in the order of assessment to dislodge the explanation or rebut the documentary evidence placed and recorded by AO at page 14 of the order and at page 61 of CIT (A) order. Thus, when no appropriate investigation has been carried out by the learned AO and as such the burden which lay upon the learned A.O. has not been discharged, the addition so made is unsustainable and deserves to be deleted. 44. In view of the aforesaid facts and materials available on record, we have also noticed that that the Revenue has failed to controvert the findings so recorded by learned CIT (A) which is based on documentary evidences as have been discussed above, wherein, substantial relief on merits was provided to assessee by CIT (A). Thus, documentary evidences on record have not been rebutted by the A.O. through any evidence or material on record. No independent enquiry has been made against these documentary evidences except issuing notices under section 133(6), which were also replied by the subscribing companies. ITA No.6627/Del./2017 and 15 other appeals 65 Therefore, such documentary evidences clearly support the explanation of assessee that investments made in the assessee companies are genuine. 45. That at this juncture, we seek to place reliance on the judgment of Hon’ble jurisdictional Delhi high court in the case of CIT vs M/s Surendra Buildtech Pvt. Ltd. in ITA No. 141/2012 on the proposition that: “Revenue has failed to rebut the findings so recorded by learned CIT (A) by bringing any contrary material on record, as such, the finding so recorded by lower authority based on documentary evidences need be upheld”: “8. Revenue, when they preferred the appeal before the tribunal, did not file requisite papers and documents to support their contention that the finding recorded by the CIT(Appeals) was factually incorrect. In case, Revenue wanted to contend and show that payment was made by the respondent assessee to brokers etc., then evidence/material should have been filed. This was not done. 9. The tribunal, examined the factual matrix and has upheld the findings recorded by the CIT( Appeals). 10. We do not think that the aforesaid findings are perverse or require any interference in exercise of our jurisdiction under Section 260A of the Act. The factual finding as recorded by the first appellate authority and the tribunal is that the payments were made by the purchasers who had booked plots/flats. While making payment, discounted price was paid by the buyers. In these circumstances, we do not think that Section ITA No.6627/Del./2017 and 15 other appeals 66 194H of the Act can be invoked. Therefore, no substantial question of law arises on the first aspect.” 46. We have also noticed that the assessee apart from submitting the various documents related to receipt of share capital and share premium as listed hereinabove, also furnished the workings for share valuations using discounted cash flow method and furnished explanation for issuing shares at a premium taking into account the future growth in the business of the assessee and also considering the future prospects of the assessee business coupled with the fact entire group had a turnover of over Rs. 2500 crores in financial year 2014-15. It was submitted that assessee is a leading business in automotives having various high end customers and commands significant Goodwill, excellent past performance and high investors’ confidence resulting into bright future prospects for the assessee in the long run. It was submitted that these aspects were duly appreciated by the shareholders and accordingly the shareholders had agreed to invest in the assessee company at a premium. 47. Before concluding, we would like to discuss the judgments so relied by learned CIT DR. He has placed reliance on the judgments of Hon’ble High Court of Delhi in the case of PCIT vs NDR Promoters Ltd. reported in 410 ITR 379, CIT vs Nova Promoters & Finlease Pvt. Ltd. reported in 342 ITR 169 and Hon’ble Supreme Court in the case of PCIT vs NRA Iron & Steel (P) Ltd. reported in 412 ITR 161. We ITA No.6627/Del./2017 and 15 other appeals 67 have gone through all the aforesaid cases and rather have found that the said judgments support the case of assessee companies, as the main proposition which has been laid down in all the aforesaid judgments is that “Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries once documents are submitted by the assessee or the subscriber companies”, whereas, we have noticed in the instant set of appeals that the AO has besides issuing notices under section 133(6) of the Act, has done no enquiry or investigation whatsoever and has merely relied on the investigation report so provided by the investigation wing, thus, the judgments so relied by the learned CIT DR are clearly distinguishable on facts and in our view rather support the case of the assessee. 48. In the result, all the sixteen appeals filed by the Revenue are dismissed on merits as well, in addition to the twelve appeals being decided above, wherein, we have held that the additions so made are beyond the scope of assessments so made under section 153A of the Act and are beyond jurisdiction. Order pronounced in open court on this 23 rd day of December, 2021. Sd/- sd/- (ANIL CHATURVEDI) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated the 23 rd day of December, 2021 TS ITA No.6627/Del./2017 and 15 other appeals 68 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A) 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.