Appeal details
Counselvise Citation
[2017] 122 COUNSELVISE.COM (IT) 2911 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 14 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
06-01-2017
Appeal Filed By
Assessee
Bench Allotted
B
Next Hearing Date
26-10-2016
Assessment Year
2007-2008
Appeal Filed On
22-06-2015
Judgement Text
1 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATAB BENCH, KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, HONBLE JUDICIAL MEMBER AND DR.A.L. SAINI, HONBLE ACCOUNTANT MEMBER IT(SS)A NO.47/KOL/2015 (AY : 2009-2010) M/S ADHUNIK GASES LTD., 1, CROOKED LANE, KOLKATA-700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AACCA 1027 E IT(SS)A NO.49/KOL/2015 (AY : 2006-2007) M/S SWAGAT TREXIM PVT. LTD. 13A DECRES LANE, 5 TH FLOOR, ROOM NO.501, KOLKATA- 700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAECS 1238 F IT(SS)A NO.50/KOL/2015 (AY : 2007-2008) M/S SWAGAT TREXIM PVT. LTD. 13A DECRES LANE, 5 TH FLOOR, ROOM NO.501, KOLKATA- 700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAECS 1238 F IT(SS)A NO.51/KOL/2015 (AY : 2008-2009) M/S SWAGAT TREXIM PVT. LTD. 13A DECRES LANE, 5 TH FLOOR, ROOM NO.503, KOLKATA- 700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAECS 1238 F IT(SS)A NO.52/KOL/2015 (AY : 2007-2008) M/S SHREE VINAY FINVEST PVT LIMITED, 13A DECRES LANE, 5 TH FLOOR, ROOM NO.503, KOLKATA-700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAECS 8183 P IT(SS)A NO.54/KOL/2015 (AY : 2005-2006) M/S MSP METALLICS LTD. 1, CROOKED LANE, KOLKATA-700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AACCA 1027 E IT(SS)A NO.55/KOL/2015 (AY : 2007-2008) M/S MSP ROLLING MILLS PT LTD 1/1A, BIPLABI ANUKUL CHANDRA, STREET, 4H, ELECTRONIC CENTRE, KOL-72 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AACCM 0782 E 2 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 IT(SS)A NO.94/KOL/2015 (AY : 2007-2008) M/S LARIGO INVESTMENT P. LTD 1, CROOKED LANE, KOLKATA-700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAACL 4391 C IT(SS)A NO.95/KOL/2015 (AY : 2007-2008) M/S LARIGO INVESTMENT P. LTD 1, CROOKED LANE, KOLKATA-700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AAACL 4319 C IT(SS)A NO.96/KOL/2015 (AY : 2007-2008) M/S RAVI BUSINESS SERVICES PRIVATE LIMITED 13A DECRES LANE, 5 TH FLOOR, ROOM NO.503, KOLKATA- 700069 VS. DCIT, CC-XXX, AAYAKAR BHAWAN PURVA, 110 SHANTI PALLY, KOLKATA-107 PAN : AACCR 5158 B (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI ASHOK KUMAR TULSYAN, FCA AND AMIT KUMAR, ACA DEPARTMENT BY : SHRI NIRAJ KUMAR CIT (DR) DATE OF HEARING : 08/12/2016. DATE OF PRONOUNCEMENT :06/01/2017 O R D E R PER DR. ARJUN LAL SAINI, A. M. THESE CAPTIONED TEN APPEALS FILED BY THE ASSESSEE , PERTAINING TO ASSESSMENT YEARS (AYS) 2009-10,2006-0 7,2007-08,2008- 09,2007-08,2005-06,2007-08,2007-08,2010-11 AND 2007 -08 RESPECTIVELY, ARE DIRECTED AGAINST THE ORDERS PASSE D BY THE COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA (C IT(A) FOR SHORT), WHICH IN TURN ARISE OUT OF ORDERS PASSED BY ASSESSI NG OFFICER (AO)U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), DATED 30.03.2013/31.03.2013. 3 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 2. THESE TEN APPEALS FILED BY THE ASSESSEE RELATE T O SAME GROUP COMPANIES-ASSESSEES, DIFFERENT ASSESSMENT YEARS, CO MMON ISSUES INVOLVED, THEREFORE, THESE HAVE BEEN CLUBBED AND HE ARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. THE ASSESSEES APPEAL IN IT(SS)A NO. 49/KO L/2015 IS TAKEN AS THE LEAD CASE. 3. THE BRIEF FACTS QUA THE ASSESSEE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE I.T. ACT,1 961, ON THE ASSESSEE ALONG WITH THE SISTER CONCERN AND OR OTHERS AT VARI OUS PREMISES/OFFICES OF THE GROUP ON 06.10.2010 AND SUBSEQUENT DATES. IN SOME CASES SURVEY OPERATIONS U/S 133A WAS ALSO CONDUCTED ON TH E SAME DATE AND / OR SUBSEQUENT DATES. LATER ON THE CASE OF THE ASSES SEE ALONG WITH OTHER ASSESSEES OF THE GROUP WERE CENTRALIZED IN THIS CHA RGE WITH ADMINISTRATIVE JURISDICTION OF RANGE V ( CENTRAL) OF CIT ( CENTRAL)-III, KOLKATA. NOTICES U/S 153A OF THE ACT WERE ISSUED ON THE ASSESSEE GROUP COMPANIES. IN RESPONSE TO SUCH NOTICES, THE ASSESSE E GROUP COMPANIES/SISTER CONCERNS FILED ITS RETURN OF INCOM E U/S 153A OF THE INCOME TAX ACT. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS UNABL E TO PRODUCE THE ENTRY OPERATOR TO PROVE IDENTITY, GENUINENESS AND C REDIT WORTHINESS OF THE TRANSACTIONS AND FURTHER CONSIDERING THE FACT T HAT THE ENTRY OPERATOR HIMSELF FILED A LETTER OF HIS AFFIRMATION OF PROVID ING ENTRIES TO THE ASSESSEE COMPANY THROUGH HIS COMPANIES MADE FOR THI S PURPOSE, THE ENTIRE SHARE CAPITAL AND SHARE APPLICATION MONEY RE CEIVED FROM ENTRY OPERATOR`S COMPANY TO THE ASSESSEE COMPANY IS ADDED BACK TO THE TOTAL INCOME OF ASSESSEE COMPANY. THIS WAY, THE ASSESSING OFFICER MADE ADDITION UNDER SECTION 68 CASH CREDIT ON ACCOUNT OF SHARE CAPITAL/SHARE APPLICATION MONEY RECEIVED BY SISTER CONCERNS/GROUP COMPANIES. 4. AGGRIEVED FROM THE ORDER OF THE ASSESSING OFFICE R, THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT (A), WHO HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER, OBSERVING THE FOLLOWINGS: 4 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 5. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT AND PERUSED THE ASSESSMENT ORDER. ON CAREFUL CONSIDERATION OF T HE FACTS, I AM NOT INCLINED TO AGREE WITH THE SUBMISSION OF THE AP PELLANT THAT THERE WERE NO NEW FACTS OR MATERIAL OR EVIDENCE IN CONSEQ UENCE TO THE SEARCH BY VIRTUE OF WHICH THE AO COULD HAVE MADE AN ADDITION OF A REGULAR ITEM DECLARED IN THE ORIGINAL RETURN OF INC OME. ON PERUSAL OF THE ASSESSMENT ORDER IT IS OBSERVED THAT ON THE DAT E WHEN SEARCH OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN THE C ASE OF APPELLANT COMPANY ON 06.10.2010, A SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTED IN THE BUSINESS PREMISES OF SHRI NARE SH CHHAPARIA AT 3/A/7, 3RD FLOOR, LAL BAZAR, KOLKATA. IT WAS GATHER ED IN THE COURSE OF SURVEY OPERATION THAT THE SAID NARESH CHHAPARIA WAS CONTROLLING SEVERAL COMPANIES, THOUGH HE MAY NOT BE THE DIRECTO R IN ALL THOSE COMPANIES BUT ALL THE TRANSACTIONS IN THOSE COMPANI ES WERE CARRIED OUT ON HIS DIRECTION ONLY. IT WAS FOUND THAT THROUG H ALL THESE COMPANIES SHRI CHHAPARIA WAS PROVIDING ACCOMMODATIO N ENTRIES IN THE FORM OF SHARE APPLICATION MONEY TO THE MSP GROU P OF COMPANIES. THIS FACT WAS ADMITTED BY HIM IN THE STA TEMENT RECORDED IN THE COURSE OF SURVEY OPERATION AT HIS PREMISES. IN THE YEAR UNDER CONSIDERATION THE APPELLANT COMPANY HAD ALSO ACCEPT ED SHARE APPLICATION MONEY FROM THE COMPANIES CONTROLLED BY SHRI NARESH CHHAPARIA. THUS, I AM OF THE OPINION THAT IT WILL N OT BE CORRECT TO SAY THAT THERE WAS NO A NEW FACT OR MATERIAL OR EVIDENC E IN CONSEQUENCE TO SEARCH BY WHICH THE AO COULD MADE ADDITION OF RE GULAR ITEM DECLARED IN THE ORIGINAL RETURN; IN THE PROCEEDING U/S 153A OF THE ACT. I AM OF THE OPINION THAT THE DECISION OF THE J URISDICTIONAL ITAT IN THE CASE OF LMJ INTERNATIONAL LTD. IS NOT APPLICABL E IN THE CASE OF APPELLANT COMPANY ON THE FACTS OF THE CASE. IN VIEW OF ABOVE, THE GROUND NO. 1 IS DISMISSED. 6. IN GROUND NO. 2 THE ASSESSEE HAS CONTESTED THE A CTION OF THE AO MAKING ADDITION OF RS.10,00,000/- ON ACCOUNT OF SHA RE CAPITAL RECEIVED ON THE BASIS OF STATEMENT OF SHRI NARESH C HHAPARIA. AS MENTIONED ABOVE, THE SEARCH OPERATION U/S 132 OF TH E ACT WAS CONDUCTED IN THE CASE OF ASSESSEE COMPANY ON 06.10. 2010. ON THE SAME DATE, A SURVEY OPERATION U/S 133A OF THE ACT W AS CONDUCTED AT THE BUSINESS PREMISES OF SHRI NARESH CHHAPARIA AT 3 /A/7, 3RD FLOOR, LAL BAZAR, KOLKATA. IT WAS GATHERED THAT SHRI NARES H CHHAPARIA IS ONE OF THE ENTRY OPERATORS ACTIVE IN THE MARKET AND HE WAS ENGAGED IN THE ACTIVITY OF PROVIDING ENTRIES TO THE BENEFIC IARIES THROUGH THE CONCERNS CONTROLLED AND MANAGED BY HIM. THE ENTRIES WERE PROVIDED TO THE BENEFICIARIES IN THE FORM OF SHARE CAPITAL E TC. DURING THE COURSE OF SURVEY THE STATEMENT OF SHRI NARESH CHHAP ARIA WAS RECORDED IN WHICH HE GAVE NAME OF 22 COMPANIES CONT ROLLED BY HIM AND ALL OF THEM WERE OPERATING FROM THE PREMISE SUR VEYED U/S 133A OF THE ACT. IT WAS STATED BY SHRI CHHAPARIA THAT TH ROUGH THESE COMPANIES HE HAD BEEN PROVIDING ACCOMMODATION ENTRI ES TO MSP STEEL GROUP OF COMPANIES. HE GAVE NAME OF 17 COMPAN IES OF MSP GROUP TO WHOM HE HAD PROVIDED THE ACCOMMODATION ENT RIES. THE NAME OF THE ASSESSEE COMPANY ALSO APPEARED IN THE S AID LIST OF COMPANIES. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS IT WAS 5 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 OBSERVED BY THE AO THAT IN THE YEAR UNDER CONSIDERA TION THE ASSESSEE COMPANY HAD RECEIVED SHARE CAPITAL OF RS.I 0,00,000/- FROM M/S SHIVARPAN MERCANTILE PVT. LTD. THE SAID COMPANY WAS CONTROLLED BY SHRI NARESH CHHAPARIA AS PER THE LIST OF COMPANI ES GIVEN BY HIM IN THE STATEMENT. FROM THE ASSESSMENT ORDER IT APPE ARS THAT THE ASSESSEE COMPANY ASKED THE AO TO ALLOW AN OPPORTUNI TY OF CROSS- EXAMINATION OF SHRI NARESH CHHAPARIA. THEREFORE, TH E AO ISSUED SUMMON U/S 131 OF THE ACT IN THE NAME OF SHRI CHHAP ARIA FOR RECORDING STATEMENT AND SIMULTANEOUSLY THE LETTER W AS ALSO ISSUED TO THE ASSESSEE COMPANY. HOWEVER, ON THE GIVEN DATE AN D TIME SHRI NARESH CHHAPARIA DID NOT APPEAR BEFORE THE AO. UNDE R THE CIRCUMSTANCES, THE AO ASKED THE ASSESSEE TO PRODUCE SHRI NARESH CHHAPARIA AND TO PROVE THE IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF THOSE TRANSACTIONS. HOWEVER, THE ASS ESSEE ALSO DID NOT PRODUCE SHRI CHHAPARIA BEFORE THE AO. AS PER TH E AO, MEANWHILE, SHRI NARESH CHHAPARIA FILED A LETTER THR OUGH HIS AUTHORIZED REPRESENTATIVE STATING THAT HE COULD NOT APPEAR IN THE OFFICE OF THE AO DUE TO BAD HEALTH AND CONFIRMED HI S EARLIER STATEMENT GIVEN BEFORE THE INVESTIGATION WING. IN V IEW OF ABOVE, THE AO RELIED ON THE DECISION OF DELHI HIGH COURT I N THE CASE OF CIT VS. NOVA PROMOTERS & FINLEASE PVT. LTD., DECISION O F PUNJAB & HARYANA HIGH COURT IN THE CASE OF SUCH CHAIN PVT. L TD., THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF CIT VS. RUBY TRADERS & EXPORTERS LTD., 263 ITR 300 AND THE DECISION OF ITA T, DELHI IN THE CASE OF BEAUTEX (INDIA) PVT. LTD. AND IT WAS HELD B Y HIM THAT ASSESSEE WAS UNABLE TO PRODUCE THE ENTRY OPERATOR T O PROVE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE T RANSACTIONS. FURTHER, IN VIEW OF THE FACT THAT ENTRY OPERATOR HI MSELF FILED A LETTER OF HIS AFFIRMATION OF PROVIDING ACCOMMODATION ENTRI ES TO THE ASSESSEE COMPANY THROUGH HIS COMPANIES MADE FOR THI S PURPOSE, THE AO ADDED THE SUM AGGREGATING TO RS.10,00,000/- TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT ON ACCOUNT OF SHA RE CAPITAL. 7.IT IS OBSERVED THAT THE SIMILAR ISSUE AS INVOLVED IN THE CASE OF AAPPELLANT COMPANY WAS INVOLVED IN ITS CASE FOR THE A.Y. 2007-08 AND 2008-09 WHEREIN BASED ON THE STATEMENT OF SHRI NARESH KUMAR CHHAPARIA DATED 07.10.2010, THE AO HAD MADE ADDITIO N OF RS.25 LAKHS AND RS.5O LAKHS RESPECTIVELY ON ACCOUNT OF SH ARE CAPITAL/SHARE APPLICATION MONEY. IN THE INSTANT APPEAL, THE APPEL LANT HAS FILED SAME SUBMISSION AS FILED IN ITS CASE FOR THE A.Y. 2 007-08 AND 2008- 09. THERE IS CHANGE IN SUBMISSION ONLY TO THE EXTEN T THAT THERE IS DIFFERENCE IN THE AMOUNT OF ADDITION ON ACCOUNT OF SHARE CAPITAL AND THE CHANGE IN THE NAMES OF SUBSCRIBING COMPANIES. O THERWISE, THE FACTS OF THE TWO CASES ARE EXACTLY SIMILAR. THE APP EALS IN THE APPELLANT'S CASE I.E. M/S SWAGAT TREXIM PVT. LTD. F OR THE A. Y. 2007- 08 AND 2008-09 HAVE BEEN DECIDED BY THE UNDERSIGNED VIDE APPEAL NO. 461/CC-3(2)/CIT(A)-21/2014-15 DATED 28.01.2015 AND APPEAL NO. 460/CC-3(2)/CIT(A)-21/2014-15 DATED 28.01.2015. IN THE SAID APPEALS; ON THE ISSUE INVOLVED, I HAVE UPHELD THE A DDITION MADE BY THE AO ON ACCOUNT OF SHARE CAPITAL U/S 68 OF THE AC T. HENCE, FOLLOWING MY ORDERS IN THE CASE OF APPELLANT COMPAN Y FOR THE A.Y. 2007-08 AND 2008-09, FOR THE YEAR UNDER CONSIDERATI ON THE ADDITION 6 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 OF RS.10,00,000/- MADE BY THE AO U/S 68 OF THE ACT IS CONFIRMED. THE GROUND NO. 2 IS DISMISSED. 5.NOT BEING SATISFIED WITH THE ORDER OF LD.CIT(A),T HE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1) THAT THE LD.CIT(A) ERRED IN HOLDING THAT UNDER THE PROVISIONS OF SEC. 153A OF THE INCOME TAX ACT, 1961, THE AO IS EM POWERED TO REASSESS THE INCOME FOR THE COMPLETED ASSESSMENT EVEN IN THE CASES WHERE NOTHING INCRIMINATING WAS FOUND IN THE COURSE OF SEARCH. SEC.153A NEITHER EMPOWERS THE AO TO RE-A SSESS INCOME OF THE COMPLETED ASSESSMENT WITHOUT ANY SEIZ ED MATERIAL OR ASSET TO THAT EFFECT NOR DOES IT ALLOW THE AO TO REVIEW THE ASSESSMENT ALREADY COMPLETED. AS SUCH, T HE ADDITIONS MADE IN THE ORDER U/S153A AND CONFIRMED B Y THE LD.CIT(A) IS BAD IN LAW AND NEED TO BE DELETED. 2) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,00,000/-, BEING THE SHARE APPLICATION MONEY R ECEIVED BY THE ASSESSEE UNDER SEC.68 OF THE INCOME TAX ACT, 19 61, BASED ON THE STATEMENT OF MR.NARESH CHHAPARIA. THE ADDITI ON NEEDS TO BE DELETED. 6. THE FIRST GROUND RELATES TO ASSESSMENT U/S.153A MADE BY THE ASSESSING OFFICER. THE ASSESSEE HAS CHALLENGED THE ASSESSMENT U/S 153A STATING THAT IT WAS DONE BY ASS ESSING OFFICER WITHOUT ANY INCRIMINATING DOCUMENTS. 6.1. LD. AR FOR THE ASSESSEE HAS VEHEMENTLY SUBMITT ED THAT DURING THE SEARCH AND SEIZURE OPERATION, THE SEARCH PARTY DID NOT FIND ANY NEW DOCUMENTS OR MATERIAL I.E. NOR ANY INCRIMINATING DO CUMENT WAS FOUND NOR SEIZED FROM THE ASSESSEES PREMISES. DURING THE COURSE OF SURVEY, THE SURVEY TEAM DID NOT FIND ANY INCRIMINATING DOCU MENT EXCEPT STATEMENT RECORDED BY THEM OF SHRI NARESH KUMAR CHH APARIA. LD. AR POINTED OUT THAT NEITHER THE SEARCH PARTY NOR THE S URVEY PARTY OF THE INCOME TAX DEPARTMENT FOUND OUT ANY NEW OR INCRIMIN ATING MATERIAL EXCEPT TO STATEMENT RECORDED BY THEM IN THE ASSESSE ES CASE UNDER CONSIDERATION. THE SEARCH WAS CONDUCTED ON 6.10.201 0 AND ASSESSMENTS U/S.143(3) OF VARIOUS GROUP CONCERNS/SI STER CONCERNS WERE 7 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 COMPLETED BEFORE 6.10.2010. THE PERIOD WITHIN WHICH NOTICE U/S.143(2) COULD BE ISSUED BY THE DEPARTMENT ALSO EXPIRED. THE ASSESSMENT PROCEEDINGS OF VARIOUS GROUP COMPANIES AND SISTER C ONCERNS OF THE ASSESSEE WERE COMPLETED BEFORE THE DATE OF SEARCH. DURING THE COURSE OF SURVEY A STATEMENT WAS RECORDED BY THE SURVEY TE AM WHICH PERTAINS TO SHRI NARESH KUMAR CHHAPARIA. DURING THE COURSE O F APPELLATE PROCEEDINGS, BEFORE THE LD. CIT(A), LD. AR FOR THE ASSESSEE REQUESTED LD. CIT(A) TO CROSS-EXAMINE THE STATEMENT OF SHRI NARES H KUMAR CHHAPARIA. MR.NARESH KUMAR CHHAPARIA SUBSEQUENTLY R ETRACTED BY AN AFFIDAVIT STATING THAT STATEMENT RECORDED BY THE S URVEY TEAM IS WRONG AND SHOULD NOT BE RELIED UPON BECAUSE THE STATEMENT HAD BEEN TAKEN BY THE SURVEY TEAM WITH THREAT AND COERCION. IN THE AFFIDAVIT DATED 11.10.2010, SHRI NARESH KUMAR CHHAPARIA HAS STATED AS FOLLOWS :- 6. THAT THE SURVEY OPERATION WAS STARTED AROUND 2. P.M ON 7.10.2010 AND CONTINUED UP TO 2.30 A.M OF 08.10.201 0. 7. THAT THE SURVEY TEAM WAS CONTINUOUSLY HARASSING TO CONVERT THE SURVEY INTO SEARCH AND ALSO TO COVER MY RESIDEN CE IN SEARCH. THEY ALSO THREATENED TO DISTURB MY BUSINESS AND ALL MY CLIENTS. DUE TO THIS TREMENDOUS MENTAL PRESSURE BY THE INCOME TAX OFFICERS DURING THE SURVEY OPERATION WHICH CONT INUED FROM AFTERNOON OF 07.10.2010 TO AFTER MIDNIGHT OF 07.10. 2010. I WAS COMPLETELY EXHAUSTED, TENSED AND HAD LOST MY MENTAL BALANCE UNDER THE CONTINUOUS PRESSURE FROM THE INCOME TAX AUTHORITIES. 8. THAT IN THE COURSE OF THE SURVEY, THE AUTHORISED OFFICER AND OTHER SURVEY TEAMS THREATENED ME THAT IF I DID NOT SIGN ON OATH THE RECORDED STATEMENT PREPARED BY THE SURVEY TEAM THEN SURVEY WILL BE CONVERTED TO SEARCH AND I WOULD FACE CONTINUOUS HARASSMENT FROM THE INCOME TAX AUTHORITIES AND THE SAME WOULD BE EXTENDED TO MY RELATIVES, ASSOCIATES AND P ERSONS HAVING ANY TYPE OF BUSINESS TRANSACTIONS WITH MY CO MPANY OR WITH ME. 9. THAT, THE SURVEY TEAM CONTINUOUSLY MENTALLY TORT URED AND THREATENED ME AND NOT ALLOWED ME TO CONSULT WITH MY CHARTERED ACCOUNTANT, FAMILY MEMBERS OR FRIENDS. 10. THAT, UNDER SUCH EXHAUSTION, TENSION, DEPRESSIO N & PSYCHOLOGICAL FEAR, I SIGNED THE STATEMENT RECORDED BY THE AUTHORISED OFFICER WHERE IT HAS BEEN MENTIONED THAT MY GROUP COMPANIES HAVE PROVIDED ACCOMMODATION ENTRIES AGAIN ST WHICH I EARNED A COMMISSION, WHICH IS COMPLETELY WRONG. 8 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 11. THAT, THE SAID STATEMENT WAS DICTATED BY THE AU THORISED OFFICER AND I WAS FORCED TO SIGN ON THE DOTTED LINE. NEITHE R THE COMPANIES MENTIONED ABOVE HAVE GIVEN ANY ACCOMMODAT ION ENTRIES NOR I HAVE RECEIVED ANY COMMISSION. THEREFORE, LD. AR FOR THE ASSESSEE HAS SUBMITTED TH AT MR.NARESH KUMAR CHHAPARIA HAD RETRACTED AND, THEREFORE, HIS STATEME NT SHOULD NOT BE RELIED UPON. IT IS A SETTLED POSITION OF LAW THAT A STATEMENT OF DOUBLE SPEAKING PERSON CANNOT BE RELIED UPON. LD. AR FOR T HE ASSESSEE HAS SUBMITTED THAT AT THE TIME OF ORIGINAL ASSESSMENT U /S.143(3)/143(1) THE ASSESSEE HAD SUBMITTED BEFORE THE AO THE EVIDENCE A ND DOCUMENTS SUCH AS COPY OF AUDITED ACCOUNTS, INCOME TAX RETURN , BANK STATEMENT, MEMORANDUM OF ASSOCIATION, ARTICLE OF ASSOCIATION, INVESTMENT SCHEDULE, PAYMENT DETAILS, SOURCE OF FUND, INCOME O F BUSINESS ETC. NEITHER THE SEARCH TEAM NOR THE SURVEY TEAM FOUND O UT ANY INCRIMINATING DOCUMENT EXCEPT A STATEMENT OF MR.NAR ESH KUMAR CHHAPARIA WHO HAS LATER ON RETRACTED BY AN AFFIDAVI T. THEREFORE, WITHOUT ANY INCRIMINATING DOCUMENT, THE ASSESSMENT U/S.153A CANNOT BE MADE. LD. AR FOR THE ASSESSEE HAS ALSO RELIED ON THE FOLL OWING JUDGMENTS :- I) M/S MSP STEEL & POWER LTD. IT(SS)A NO.156-158/KO L/2014, ORDER DATED 02.12.2016) : 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND IT WOULD BE NECESSARY TO ADDRESS THE PRELIMINARY ISSUE OF WHETH ER THE ADDITION COULD BE FRAMED U/S 153A OF THE ACT IN RESPECT OF A CONCLUDED PROCEEDING WITHOUT THE EXISTENCE OF ANY INCRIMINATI NG MATERIALS FOUND IN THE COURSE OF SEARCH. THE SCHEME OF THE AC T PROVIDES FOR ABATEMENT OF PENDING PROCEEDINGS AS ON THE DATE OF SEARCH. IT IS NOT IN DISPUTE THAT THE ASSESSMENTS FOR THE ASST YE ARS 2007-08 & 2008-09 WERE ORIGINALLY COMPLETED U/S 143(1) OF THE ACT AND TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAD EXPIRED ON THE DATE OF SEARCH AND HENCE IT FALLS UNDER CONCLUD ED PROCEEDING, AS ON THE DATE OF SEARCH. WE HOLD THAT THE LEGISLAT URE DOES NOT DIFFERENTIATE WHETHER THE ASSESSMENTS ORIGINALLY WE RE FRAMED U/S 143(1) OR 143(3) OR 147 OF THE ACT. HENCE UNLESS TH ERE IS ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH RELATABLE TO THOSE CONCLUDED YEARS, THE STATUTE DOES NOT CONF ER ANY POWER ON THE LD AO TO DISTURB THE FINDINGS GIVEN THEREON AND INCOME DETERMINED THEREON, AS FINALITY HAD ALREADY BEEN RE ACHED THEREON, AND THOSE PROCEEDINGS WERE NOT PENDING ON THE DATE OF SEARCH TO GET THEMSELVES ABATED. WE FIND THAT THE CO-ORDINATE BENCH OF THIS 9 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 TRIBUNAL IN THE CASE OF RAHEE TRACK TECHNOLOGIES PV T LTD VS DCIT IN IT(SS)A NOS. 08 TO 13/KOL/2015 DATED 7.10.2016 HAD ELABORATELY DEALT WITH THIS ISSUE BY DULY CONSIDERING THE DECIS IONS OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SALASAR ST OCK BROKING LTD , AMONG OTHER DECISIONS HAD HELD AS BELOW:- 2.11. WE FIND THAT THE PROVISIONS OF SECTION 132 O F THE ACT RELIED UPON BY THE LD DR WOULD BE RELEVANT ONLY FOR THE PURPOSE OF CONDUCTING THE SEARCH ACTION AND INITIAT ING PROCEEDINGS U/S 153A OF THE ACT. ONCE THE PROCEEDIN GS U/S 153A OF THE ACT ARE INITIATED, WHICH ARE SPECIAL PR OCEEDINGS, THE LEGISLATURE IN ITS WISDOM BIFURCATES DIFFERENTI AL TREATMENTS FOR ABATED ASSESSMENTS AND UNABATED ASSESSMENTS. AT THE COST OF REPETITION, WE STATE TH AT IN RESPECT OF ABATED ASSESSMENTS (I.E PENDING PROCEEDI NGS ON THE DATE OF SEARCH) , FRESH ASSESSMENTS ARE TO BE F RAMED BY THE LD AO U/S 153A OF THE ACT WHICH WOULD HAVE A BE ARING ON THE DETERMINATION OF TOTAL INCOME BY CONSIDERING AL L THE ASPECTS, WHEREIN THE EXISTENCE OF INCRIMINATING MAT ERIALS DOES NOT HAVE ANY RELEVANCE. HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS, THE LEGISLATURE HAD CONFERRED POWERS ON THE LD AO TO JUST FOLLOW THE ASSESSMENTS ALREADY CONCLUDED UNLESS THERE IS AN INCRIMINATING MATERIAL FOUND IN THE SEARCH TO DISTURB THE SAID CONCLUDED ASSESSMENT . IN OUR CONSIDERED OPINION, THIS WOULD BE THE CORRECT UNDER STANDING OF THE PROVISIONS OF SECTION 153A OF THE ACT , AS O THERWISE, THE NECESSITY OF BIFURCATION OF ABATED AND UNABATED ASSESSMENTS IN SECTION 153A OF THE ACT WOULD BECOME REDUNDANT AND WOULD LOSE ITS RELEVANCE. HENCE THE ARGUMENTS ADVANCED BY THE LD DR IN THIS REGARD DESE RVES TO BE DISMISSED. RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE H OLD THAT THE ADDITIONS MADE IN THE ASSESSMENTS FRAMED U/S 153A O F THE ACT FOR THE ASST YEARS 2007-08 AND 2008-09 IN THE ABSENCE O F INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEAR CH RELATABLE TO THOSE ASSESSMENT YEARS, DESERVE TO BE DELETED. ACCO RDINGLY, THE GROUND NO. 1 FOR ASST YEARS 2007-08 AND 2008-09 RAI SED BY THE ASSESSEE ARE ALLOWED. II) SALASAR STOCK BROKING LTD., G.A.NO.1929 OF 2016 & ITA NO.264 OF 2016, DATED. 24.08.2016 : WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY TH E KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQ UISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A. IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS MA DE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREAD Y DISCLOSED, FOR 10 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WER E NOT CONTEMPLATED BY THE PROVISIONS CONTAINED UNDER SECT ION 153C READ WITH SECTION 153A.THE DISALLOWANCES MADE BY THE ASS ESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES. III) VEERPRABHU MARKETING LTD., [2016] 73 TAXMANN.C OM 149 (CALCUTTA) : 7. WITH RESPECT TO THE SECOND SUBMISSION ADVANCED BY MR. JAIN, WE CALLED UPON MR.NIZAMUDDIN IN VAIN TO SHOW US THE IN CRIMINATING MATERIAL, IF ANY, FOUND EITHER DURING THE SEARCH OR DURING THE REQUISITION OR EVEN DURING THE SURVEY WHICH IS OR M AY BE RELATABLE TO THE ASSESSEE. MR.NIZAMUDDIN AS UNABLE TO SHOW TH AT ANY SUCH INCRIMINATING MATERIAL WAS UNEARTHED AT ANY OF THE THREE STAGES PERTAINING TO THE ASSESSEE. 8. WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY TH E KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTIO N 153C READ WITH SECTION 153A. 9. IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS M ADE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREAD Y DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WER E NOT CONTEMPLATED BY THE PROVISIONS CONTAINED UNDER SECT ION 153C READ WITH SECTION 153A. THE DISALLOWANCES MADE BY THE AS SESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES. IV) M/S HOWRAH GASES LIMITED, IT(SS)A NO.26&27/KOL/ 2015, ORDER DATED 18.11.2016 : 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT THE IMPUGNED DISALLOWANCE OF RS.41,14,917/- UN DER SECTION 40(A)(IA) WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN O RDER DATED 31.12.2007, WHICH HAD ALREADY BECOME FINAL BEFORE T HE SEARCH AND SEIZURE ACTION TOOK PLACE IN THE CASE OF THE ASSESS EE ON 06.10.2010. THE SAID ASSESSMENT THUS DID NOT ABATE AS A RESULT OF SEARCH CONDUCTED IN THE CASE OF THE ASSESSEE NOT GO ING BY THE LIMITED SCOPE OF PROCEEDINGS UNDER SECTION 153A WHI CH IS ONLY TO REASSESS THE INCOME OF THE ASSESSEE FOR THE YEAR UN DER CONSIDERATION ON THE BASIS OF INCRIMINATING MATERIA L FOUND DURING THE COURSE OF THE SEARCH, IT WAS NOT PERMISSIBLE TO THE ASSESSEE TO RAISE THE ISSUE RELATING TO THE DISALLOWANCE UNDER SECTION 40(A)(IA) MADE IN THE ASSESSMENT ORIGINALLY COMPLETED UNDER S ECTION 143(3), WHICH HAD ALREADY BECOME FINAL. WE, THEREFORE, FIN D NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) UPHOLDIN G THE ACTION OF THE ASSESSING OFFICER IN NOT ALLOWING ANY RELIEF TO THE ASSESSEE ON THE ISSUE OF DISALLOWANCE UNDER SECTION 40(A)(IA) M ADE IN THE 11 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3 ), WHICH HAD BECOME FINAL AND UPHOLDING THE SAME ON THIS ISSUE, WE DISMISS THIS APPEAL FILED BY THE ASSESSEE FOR A.Y.2005-06. V) BUDHIYA MARKETING PVT. LTD., (2015) 154 ITD 0650 KOLKATA : 22. IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA ), NO DOUBT THE ADDITION IN THE CASE OF THE ASSESSEE CAN BE MADE BY THE ASSESSING O FFICER ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH UNDER SECTION 153A AS IN THE CASE OF THE ASS ESSEE THE ASSESSMENT WAS NOT ABATED FOR THE IMPUGNED ASSESSME NT YEARS IN RESPECT OF WHICH PROCEEDINGS WERE TAKEN UNDER SECTI ON 153A. 25. WE NOTED THAT IN THE CASE OF THE ASSESSEE, THE ADDITION HAS BEEN MADE IN EACH OF THE ASSESSMENT YEARS ON ACCOUN T OF THE SHARE CAPITAL AND THE SHARE PREMIUM AS WELL AS THE DISALLOWANCE OF THE EXPENSES. DURING THE COURSE OF THE SEARCH TAKEN PLACE IN THE CASE OF THE ASSESSEE, WE NOTED THAT NO INCRIMINATIN G MATERIAL WAS FOUND IN RESPECT OF THE ADDITIONS MADE BY THE ASSES SING OFFICER IN EACH OF THE ASSESSMENT YEARS. THE ONLY MATERIAL WHI CH WAS FOUND WAS THE BANK ACCOUNT WHICH THE ASSESSEE WAS HAVING WITH THE BANKER. THE SAID BANK ACCOUNT WAS DULY DISCLOSED IN THE INCOME- TAX RETURN FILED BY THE ASSESSEE. THE SAID BANK ACC OUNT CAN ALSO NOT BE REGARDED TO BE THE INCRIMINATING MATERIAL. E VEN THE ASSESSING OFFICER HAS ALSO NOT MADE ANY ADDITION ON THE BASIS OF SAID BANK ACCOUNT IN EACH OF THE ASSESSMENT YEARS. THE BANKER HAS MADE THE PAY ORDER IN RESPECT OF THE BALANCE OF THE BANK ACCOUNT IN FAVOUR OF THE REVENUE AS PER THE ORDER O F ADIT AND ONLY THAT PAY ORDER WAS SEIZED. IT IS NOT THE CASE THAT THE BANK ACCOUNT WAS NOT DISCLOSED. EXCEPT THE BANK ACCOUNT, NO OTHE R ASSETS, DOCUMENTS OR MATERIAL WERE BROUGHT TO OUR KNOWLEDGE BY THE LD. D.R., WHICH HAS BEEN FOUND OR SEIZED BY THE DEPARTM ENT, SO THAT IT COULD BE REGARDED TO BE THE INCRIMINATING MATERIAL IN RESPECT OF THE SHARE CAPITAL AND THE SHARE PREMIUM AS WELL AS THE DISALLOWANCE OF THE EXPENSES IN RESPECT OF WHICH THE ADDITION HAS B EEN MADE IN THE ASSESSMENT COMPLETED UNDER SECTION 153A. SINCE THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF THE S EARCH AND BROUGHT TO OUR KNOWLEDGE BY THE LD. D.R. IN RESPECT OF THE SHARE CAPITAL AND SHARE PREMIUM, THEREFORE, WE ARE OF THE VIEW THAT NO ADDITION ON THIS ACCOUNT CAN BE MADE IN THE CASE OF THE ASSESSEE IN EACH OF THE ASSESSMENT YEARS. VI) SHANTI KUMAR SURANA, (2015) CCH 0241 KOL TRIB : IN VIEW OF THE FACTS IN ENTIRETY AND THE LEGAL PRIN CIPLES ENUNCIATED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINE NTAL WAREHOUSING CORPORATION (NHAVASHEVA) LTD., SUPRA, O F HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF SHAILA AGARWAL, SUPRA AND MUMBAI SPECIAL BENCH DECISION IN THE CASE OF ALL CA RGO GLOBAL LOGISTICS, SUPRA, WE ARE OF THE VIEW THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE P RESENT CASE FOR 12 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 THESE ASSESSMENT YEARS, EXCEPT THE STATEMENT OF ONE SHRI SAMBHU KR MORE, AS ADMITTED BY THE AO IN HIS REMAND REPORT DATED 23.09.2011 AND DESPITE NUMBER OF OPPORTUNITIES REVE NUE COULD NOT PRODUCE ANY INCRIMINATING MATERIAL BEFORE THE BENCH AND THE ASSESSMENTS ARE ALREADY COMPLETED FOR THESE ASSESSM ENT YEARS ORIGINALLY, THE ASSESSMENTS FRAMED U/S. 153A OF THE ACT IS INVALID AND HENCE, QUASHED. (PARA 15) 8. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS SU BMITTED THAT SECTION 132 & SECTION 153A OF THE INCOME TAX ACT DO NOT TALK ABOUT INCRIMINATING DOCUMENTS/MATERIAL. LD. DR POINTED OU T THAT WITH THE HELP OF STATEMENT OF MR.NARESH KUMAR CHHAPARIA, IT IS QU ITE CLEAR AND THERE IS A DIRECT NEXUS BETWEEN HIS STATEMENT AND THE COM PANIES WHO GAVE ACCOMMODATION ENTRIES. MR.NARESH KUMAR CHHAPARIA HA S ADMITTED IN HIS STATEMENT THAT HE IS AN ENTRY OPERATOR. LD.DR A LSO POINTED OUT THAT MR. NARESH KUMAR CHHAPARIA DID NOT ATTEND THE PROCE EDINGS U/S.131 OF THE ACT. MR. NARESH KUMAR CHHAPARIA IS ENGAGED IN R AISING BOGUS FUNDS AND HE IS DIRECTOR IN SEVERAL COMPANIES WHICH IS SH ELL COMPANIES(JAMAKHARCHI COMPANIES). MR. NARESH KUMAR CHHAPARIA AFTER HIS STATEMENT RECORDED BY THE SURVEY TEAM DID NOT REPORT TO THE INCOME TAX AUTHORITIES THAT STATEMENT WAS TAKEN BY FORCE OR BY COERCION. LD. DR ALSO POINTED OUT THAT THE STATEMEN T OF MR.NARESH KUMAR CHHAPARIA IS ITSELF A NEW INCRIMINATING DOCUM ENT AND THERE IS ENTIRE NEXUS WHICH HAS ESTABLISHED BY HIS STATEMENT . LD. DR ALSO POINTED OUT THAT RETRACTION BY MR. NARESH KUMAR CHH APARIA IS AFTERTHOUGHT PROCESS AND SHOULD NOT BE RELIED ON HI S AFFIDAVIT. LD.DR HAS ALSO RELIED ON THE FOLLOWING JUDGMENTS :- I) ST. FRANCIS CLAY DECOR TILES, [2016] 70 TAXMANN. COM 234 (KERALA) II) ANIL KUMAR BHATIA, [2012] 24 TAXMANN.COM 98(DEL HI) III) FILATEX INDIA LTD., (2014) 49 TAXMANN.COM 465 (DELHI) IV) DR.P.SASIKUMAR, (2016) 73 TAXMANN.COM 173 (KERA LA) V) GARIBDASCHANDRIKA PRASAD, (1997) 95 TAXMAN 431 ( MP) THE SUM AND SUBSTANCE OF THE ABOVE MENTIONED JUDGM ENTS ARE THAT RETRACTION BY MR.NARESH KUMAR CHHAPARIA IS AFTERTHO UGHT PROCESS AND SHOULD NOT BE RELIED ON HIS AFFIDAVIT. THE ASSESSIN G OFFICER MAY ASSESS 13 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 THE INCOME OF CONCLUDED ASSESSMENTS UNDER SECTION 1 43(3) AND UNDER SECTION 143 (1)/147. 9. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CA NVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE JUDGMENTS OF JURISDICTIONAL ITAT AND HONBLE HIGH COURTS. LD. AR HAS POINTED OU T THAT NO INCRIMINATING DOCUMENTS WAS FOUND EITHER DURING SUR VEY OR DURING SEARCH PROCEDURE. THE STATEMENT OF SHRI NARESH KUMA R CHHAPARIA SHOULD NOT BE RELIED ON, BECAUSE HE IS A DOUBLE SPE AKING PERSON. THE ASSESSMENT PROCEEDINGS WERE COMPLETED BEFORE THE DA TE OF SEARCH. BESIDES, THE TIME LIMIT TO ISSUE NOTICE U/S.143(2) WAS ALSO EXPIRED. IN ORDER TO INITIATE ASSESSMENT PROCEEDINGS U/S.153A, THERE SHOULD BE A NEW OR INCRIMINATING DOCUMENT. THE ASSESSMENT WHIC H IS ALREADY COMPLETED U/S.143(3)/143(1)SHOULD NOT BE REOPENED. THEREFORE, CONSIDERING THE SCHEME OF SECTION 132 AND SECTION 1 53A, WE ARE OF THE VIEW THAT THERE SHOULD BE SOME NEW DOCUMENT/INCRIMI NATING DOCUMENT TO INVOKE THE PROVISIONS OF SECTION 153A. LD. DR FO R THE REVENUE HAD POINTED OUT THAT THERE IS A DIRECT NEXUS AMONG THE COMPANIES, WHICH HAS BEEN ESTABLISHED BY THE STATEMENT OF MR.NARESH KUMAR CHHAPARIA, WHICH CANNOT BE RELIED ON, AS HE WAS A DOUBLE SPEAK ING PERSON. THEREFORE, CONSIDERING THE FACTUAL POSITION AND THE JUDGMENTS CITED BY LD. AR, WE ARE OF THE VIEW THAT THE ADDITIONS MADE BY THE AO U/S.153A AND CONFIRMED BY THE LD. CIT(A) NEEDS TO BE DELETED . THEREFORE, WE DELETE THE ADDITION. 10.IN THE RESULT, APPEAL FILED BY THE ASSESSEE ON G ROUND NO.1[IT(SS)A NO.47,49,50,51,52,54,55,94,95,96/KOL/2015] IS ALLOW ED. 11. NEXT GROUND RELATES TO ADDITION U/S.68 (CASH CREDIT) ON ACCOUNT OF SHARE APPLICATION MONEY/SHARE CAPITAL. 12. LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT IN O RDER TO MAKE THE ADDITION U/S.68, THE AO HAD RELIED MAINLY ON THE ST ATEMENT OF SHRI 14 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 NARESH KUMAR CHHAPARIA. THE LD. CIT(A) ALSO RELIED ON THE STATEMENT SHRI NARESH KUMAR CHHAPARIA. THE LD. CIT(A) DID NOT TAKE INTO COGNIZANCE OF THE DENIAL AFFIDAVIT OF SHRI NARESH K UMAR CHHAPARIA, AS HE HAD SUBSEQUENTLY RETRACTED BY THE AFFIDAVIT, THE REFORE, HE IS A DOUBLE SPEAKING PERSON AND HIS STATEMENT SHOULD NOT BE REL IED ON. BESIDES, NO COGNISANCE WAS TAKEN BY THE AO OR LD. CIT(A) OF THE NOTICE ISSUED BY THE AO U/S.133(B) AND REPLY RECEIVED FROM SHARE APP LICANTS IN RESPONSE TO NOTICE U/S.133(6) ALONG WITH SUPPORTING DOCUMENT S. NO ANY CORROBORATE MATERIAL IN SUPPORT OF STATEMENT OF SHR I NARESH KUMAR CHHAPARIA WAS BROUGHT BY THE AO. EVEN LD. CIT(A) CO ULD NOT BRING ANY CORROBORATIVE MATERIAL IN SUPPORT OF THE STATEMENT OF SHRI NARESH KUMAR CHHAPARIA, WHO HAD SUBSEQUENTLY DENIED. HENCE, THE STATEMENT GIVEN BY SHRI NARESH KUMAR CHHAPARIA CANNOT BE RELIED AT ALL. ALL THE SHARE APPLICANTS HAVE SUBMITTED THE ADEQUATE EVIDENCE WIT H SUPPORTING DOCUMENTS. NO ADDITION CAN BE MADE WITHOUT ANY INCR IMINATING DOCUMENTS. IN ADDITION TO THIS, THE ASSESSEE UNDER CONSIDERATION HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTIONS. THEREFORE, LD. AR SUBMITTED THAT STAT EMENT OF SHRI NARESH KUMAR CHHAPARIA SHOULD NOT BE RELIED ON BECAUSE HE WAS A DOUBLE SPEAKING PERSON BECAUSE LATER ON HE RETRACTED. THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTIONS DURING THE PROCEEDINGS. THEREFORE, ADD ITION MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) MAY BE DELETED. LD. AR HAS ALSO RELIED ON THE FOLLOWING JUDGMENTS :- I) ZIMKELE COMMODEAL PVT. LTD., ITA NO.959/KOL/2011 , DATED 24.08.2016 : 7.7. WE FIND THAT THE ISSUE IS ALSO COVERED BY ANOT HER JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VSMITUL KRIS HNA KAPOOR IN ITA NO. 333 OF 2009 DATED 9.6.2016) WHEREIN THE QUE STION RAISED AND THE DECISION RENDERED THEREON ARE REPRODUCED BE LOW:- 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LEARNED TRIBUNAL IS JUSTIFIED IN LAW IN CONFIRM ING THE ORDER OF C.I.T.(APPEALS) IN DELETING THE ADDITION O F RS.33,90,000/- AND RS.72,57,686/- MADE UNDER SECTIO N 68 OF THE INCOME TAX ACT, 1961?' 15 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 ADDITION OF A SUM OF RS.33.90 LAKHS WAS MADE ON THE BASIS THAT THE ASSESSEE HAD ALLEGEDLY TAKEN LOAN FROM THE CORPUS FUND, WHICH THE ASSESSEE HAS DENIED. THE ASSESSING OFFICER PROCEEDED TO ADD THIS SUM OF RS.33.90 UNDER SECTION 68. C.I.T.(A) HAS CLEARLY HELD THAT THERE IS NO KNO WLEDGE AS TO WHAT THE CORPUS FUND IS. THE C.I.T. ALSO OPINED THAT THERE WAS NO MATERIAL ON THE BASIS OF WHICH THE AFORESAID ADDITION COULD BE MADE AND ON THAT BASIS THE C.I.T. DELETED THE ADDITION. THE LEARNED TRIBUNAL CONCURRED WITH SUCH FINDING OF THE C.I.T.(A). AS REGARDS OTHER SUM OF RS.72,57,686/- IS CONCERNED , THE ADDITION WAS FOUND ALTOGETHER UNMERITORIOUS BECAUSE 'ALL THESE AMOUNTS ARE PAID BY CHEQUE OUT OF ACCOUNTED F UND IN THE REGULAR BOOKS OF ACCOUNTS. A COPY OF THE CONFIR MATION ALONG WITH THE BANK STATEMENT IN RESPECT OF THE ASS ESSEE'S ACCOUNTS WITH BHARAT OVERSEAS BANK IS FILED, DULY C ONFIRMED BY SHRI A E MEDHORA ON BEHALF OF M/S. NOVROJEE & CO . A COPY OF THE BANK ACCOUNT DISCLOSED AND THE REGULAR BOOKS OF ACCOUNTS WERE FILED BEFORE THE LD.CIT(A) WHICH WERE ALSO MADE AVAILABLE BEFORE THE AO. BASED ON THESE SUBMIS SIONS, THE LD.CIT(A) HAS DELETED THE SAME.' THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE SOR RY TO SAY, DEPICT CLEAR ABUSE OF POWER OF THE ASSESSING O FFICER. WE WERE INCLINED TO IMPOSE EXEMPLARY COSTS UPON THE REVENUE BUT REFRAINED FROM DOING SO BECAUSE NOTICE OF THIS APPEAL HAS NOT BEEN GIVEN TO THE RESPONDENT. NO ONE HAS APPEARED. THE QUESTION FORMULATED IN THIS CASE IS A NSWERED IN THE AFFIRMATIVE AND AGAINST THE REVENUE. THE APPEAL IS, THEREFORE, DISMISSED.' 7.8. WE ALSO FIND THAT THE ISSUE UNDER APPEAL IS AL SO COVERED BY THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS DIVINE LEASING & FINANCE LTD REPORTED IN (2008) 299 ITR 268 AND ALSO VARIOUS OTHER DECISIONS RELIED UPON BY THE LD AR WHICH ARE NOT CONSIDERED HERE FOR THE SAKE OF BREVITY. 7.9 IN VIEW OF THE AFORESAID FINDINGS AND RESPECTFU LLY FOLLOWING THE DECISIONS OF HON'BLE APEX COURT SUPRA ;HON'BLE JURI SDICTIONAL HIGH COURT (SUPRA) AND CO-ORDINATE BENCH DECISIONS OF VA RIOUS TRIBUNALS, WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CI T(A) AND ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. II) GLOBAL MERCANTILES PVT. LTD., ITA NO.1669/KOL/2 009, (2016) 46 CCH 0041 KOL TRIB : 16 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 4.2. ON FIRST APPEAL, THE LEARNED CIT(A) OBSERVED T HAT THE ENTIRE SHARE APPLICATION MONIES OF RS. 57,00,000/- WERE RE CEIVED DURING THE PREVIOUS YEAR 2004-05 RELEVANT TO ASST YEAR 200 5-06 FROM 20 PERSONS AND THE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER APPEAL. HE OBSERVED THAT THE ASSESSEE HAD FUR NISHED DETAILS OF THE SHARE APPLICANTS GIVING THE DATE WISE RECEIP TS, MODE OF PAYMENT, AMOUNT, NAME, ADDRESS, INCOME TAX RETURNS, PA NO. OF SHARE APPLICANTS ALONG WITH THEIR BALANCE SHEET. TH E LEARNED CITA ALSO OBSERVED THAT THE ASSESSEE IN ITS REPLY TO SHO W CAUSE NOTICE BEFORE THE LEARNED AO HAD REQUESTED HIM TO USE HIS POWER AND AUTHORITY FOR THE PHYSICAL APPEARANCE OF THE SHAREH OLDERS WHICH WAS NOT EXERCISED BY THE LEARNED AO. INSTEAD THE LE ARNED AO CONTINUED TO INSIST ON THE ASSESSEE TO PRODUCE THE SHAREHOLDERS BEFORE HIM. HE ULTIMATELY CONCLUDED THAT THE ASSESS EE HAD DULY DISCHARGED ITS ONUS OF PROVIDING COMPLETE DETAILS O F THE SHAREHOLDERS AND IN ANY CASE, NO ADDITION COULD BE MADE U/S 68 OF THE ACT IN THE ASST YEAR UNDER APPEAL AS NO SHARE A PPLICATION MONIES WERE RECEIVED DURING THE ASST YEAR UNDER APP EAL. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US BY FI LING THE FOLLOWING GROUND:- 'THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE U/S 68 IN RESPECT OF THE ALLOTMENT OF SHARES TO 20 NUMBERS OF INDIVIDUAL INVESTORS FOR AN AMOUNT OF RS. 57 LAKHS, WHERE GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINES S OF THE INVESTORS WERE NOT ESTABLISHED.' 4.3. THE LEARNED DR PRAYED FOR ADMISSION OF THE ADD ITIONAL GROUND RAISED BEFORE US AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED AO. IN RESPONSE TO THIS, THE LEARNED AR FAI RLY CONCEDED TO ADMISSION OF THIS ADDITIONAL GROUND AND VEHEMENTLY SUPPORTED THE ORDER OF THE LEARNED CIT(A). 4.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD INCLUDING THE DETAILE D PAPER BOOK FILED BY THE ASSESSEE. WE FIND THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE SEPARATELY BEFORE US VIDE ITS COVERING LETTER DATED 9.12.2011 IS ADMITTED AS IT APPEARS TO BE A GENUINE AND BONAFIDE ERROR OF OMISSION ON THE PART OF THE REVENUE FROM N OT RAISING THIS GROUND IN THE ORIGINAL GROUNDS OF APPEAL FILED ALON G WITH THE MEMORANDUM OF APPEAL. MOREOVER, IT DOES NOT REQUIRE ANY FRESH EXAMINATION OF FACTS. HENCE THE SAME IS ADMITTED HE REIN FOR THE SAKE OF ADJUDICATION. 4.4.1. WE FIND FROM THE DETAILS AVAILABLE ON RECORD THAT THE SHARE APPLICATION MONIES FROM 20 INDIVIDUALS IN THE SUM O F RS. 57,00,000/- HAS BEEN RECEIVED BY THE ASSESSEE DURIN G THE FINANCIAL YEAR 2004-05 RELEVANT TO ASST YEAR 2005-06 AND ONLY THE SHARES WERE ALLOTTED TO THEM DURING THE ASST YEAR UNDER AP PEAL. ADMITTEDLY NO MONIES WERE RECEIVED DURING THE ASST YEAR UNDER 17 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 APPEAL AND HENCE THERE IS NO SCOPE FOR INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT . HENCE WE HOLD THAT THE O RDER PASSED BY THE LEARNED CITA IN THIS REGARD DOES NOT REQUIRE AN Y INTERFERENCE. ACCORDINGLY THE GROUND NO. 3 RAISED BY THE REVENUE IS DISMISSED. III) SRI RAKESH BHARTIA, ITA NO.428/KOL/2012, ORDER DATED 29.02.2016: 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE DETAILED PAPER BO OK CONTAINING THE STATEMENT OF COMPUTATION OF TOTAL INCOME FOR TH E AY 2008-09 & SALARY CERTIFICATE TO THIS EFFECT IN PAGE 1-5 OF TH E ASSESSEE'S PAPER BOOK, ASSESSEE'S PERSONAL BALANCE SHEET AS AT 31.03 .2008, CAPITAL A/C & INCOME & EXPENDITURE A/C IN PAGE 6-8 OF THE P APER BOOK, COPIES OF LOAN CONFIRMATION ISSUED BY M/S. BRIGHT I MPEX & AGENCIES PVT. LTD FOR THE FYS. 2007-08, '08-09 & '0 9-10 IN PAGES 13-15 OF THE PAPER BOOK, COPY OF AUDITED ANNUAL FIN ANCIAL ACCOUNTS OF M/S. BRIGHT IMPEX & AGENCIES PVT. LTD FOR THE FY 2007-08 IN PAGES 16- 28 OF THE PAPER BOOK, COPY OF BANK STATEM ENT IN RESPECT OF CURRENT A/C NO.95111010006717 OF M/S. BRIGHT IMP EX & AGENCIES PVT. LTD IN PAGES 29-32 OF THE ASSESSEE'S PAPER BOOK, PAN DETAILS OF M/S. BRIGHT IMPEX & AGENCIES PVT. LT D IN PAGE 33 OF THE ASSESSEE'S PAPER BOOK AND COPY OF LD. AO'S REMA ND REPORT IN PAGES 35-36 OF THE ASSESSEE'S PAPER BOOK. ON PERUSA L OF THE AFORESAID PAPERS, WE FIND THAT THE LENDING COMPANY, M/S. BRIGHT IMPEX & AGENCIES PVT. LTD HAS GOT PAID UP CAPITAL O F RS.3,25,85,000/- AS ON 31-03-2008 AND RESERVES & SU RPLUS OF RS.26,87,67,396/- AS ON 31-03-2008. WE ALSO FIND TH AT THE SAID LENDING COMPANY, M/S. BRIGHT IMPEX & AGENCIES PVT. LTD IS A REGISTERED NON BANKING FINANCIAL COMPANY (NBFC) ENG AGED IN THE BUSINESS OF GRANTING OF LOANS AND ADVANCES AND HAD INDEED DERIVED INTEREST INCOME OF RS.1,70,95,047/- FROM MONEY LEND ING BUSINESS DURING THE FINANCIAL YEAR 2007-08. WE ALSO FIND FRO M THE BANK STATEMENT OF LENDING COMPANY I.E M/S. BRIGHT IMPEX & AGENCIES PVT. LTD, THAT THERE ARE SEVERAL HIGH VALUE TRANSAC TIONS WITH DIFFERENT PERSONS THROUGH OUT THE YEAR. IT IS NOT T HE CASE OF THE LD.AO THAT THE CASH WAS DEPOSITED IN THE BANK ACCOU NT OF THE LOAN CREDITOR IMMEDIATELY BEFORE ISSUING THE CHEQUES TO THE ASSESSEE. WE ALSO FIND THAT THE ENTIRE LOAN OF RS. 2.5 CRORES HAVE BEEN PAID BY THE LOAN CREDITOR BY 3 ACCOUNT PAYEE CHEQUES DRA WN ON SYNDICATE BANK, ESPLANADE BRANCH, KOLKATA. THESE FA CTS HAVE BEEN CLEARED THROUGH BANKING CHANNELS. WE ALSO FIND THAT THE ENTIRE LOAN HAS BEEN REPAID BY THE ASSESSEE IN MAY- JUNE 2009 B Y ACCOUNT PAYEE CHEQUES, WHICH WAS ALSO CONFIRMED BY THE LOAN CREDITOR. WE FIND THAT THE ASSESSMENT HAS BEEN COMPLETED IN THIS CASE ON 27- 12-2010, WHICH IS AFTER 18 MONTHS FROM THE DATE OF REPAYMENT OF THE LOAN BY THE ASSESSEE. ALL THESE FACTS PROVE THE GENUINENESS OF THE TRANSACTION BEYOND DOUBT. WE FURTHER FIND THAT THE ASSESSEE HAS DULY FILED CONFIRMATION LETTERS FROM THE LOAN C REDITOR BY DULY DISCLOSING ITS INCOME TAX PARTICULARS. WE FIND THAT THE LOAN TRANSACTION OF RS. 2.5 CRORES HAVE BEEN DULY REFLEC TED IN THE 18 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 BALANCE SHEET OF THE LOAN CREDITOR, WHICH WERE ALSO PLACED BEFORE THE LD.AO. HOWEVER, THE LD.AO BASED ON CERTAIN FACT UAL ERRORS COMMITTED BY HIM WITH REGARD TO THE STATUS AND CRED ITWORTHINESS OF THE LOAN CREDITOR THAT IT IS ASSESSEE'S OWN MONE Y, WHICH HAS BEEN LAUNDERED AND FOUND IT IS WAY BACK TO HIS OWN COFFERS IN THE GARB OF LOAN FROM M/S. BRIGHT IMPEX & AGENCIES PVT. LTD . FROM THE FACTS AND MATERIAL AVAILABLE ON RECORD, WE FIND THA T THE ASSESSEE HAS DULY PROVED HIS COMPLETE ONUS WITH REGARD TO TH E IDENTITY OF THE CREDITOR, GENUINENESS OF THE TRANSACTION AND CR EDITWORTHINESS OF THE CREDITOR AND HAD SATISFIED ALL THE THREE ING REDIENTS OF SECTION 68 OF THE ACT. WE FIND THAT THE LD.AO HAD NOT CHOSE N TO ISSUE SUMMON/NOTICE U/S. 133(6)/131 OF THE ACT TO VERIFY THE LOAN CREDITOR AND ITS VERACITY TOGETHER WITH THE CREDITW ORTHINESS OF THE LOAN CREDITOR. WE FIND THAT THE WILD ALLEGATION IS MADE BY THE LD.AO THAT THE ASSESSEE HAS LAUNDERED HIS UNACCOUNTED MON EY/INCOME AND THE SAME IS BROUGHT BACK IN THE FORM OF LOAN. W E FIND FROM THE ENTRIES OF THE BANK STATEMENT OF THE LOAN CREDITOR THAT NO CASH WAS DEPOSITED IN THE ACCOUNT OF THE LOAN CREDITOR IMMED IATELY BEFORE ISSUING THE CHEQUES TO THE ASSESSEE. ON THE CONTRAR Y, THERE WERE OTHER HIGH VALUE TRANSACTIONS REFLECTED IN THE BANK STATEMENT OF THE LOAN CREDITOR. HENCE, THE BASIC ALLEGATION THAT THE ASSESSEE HAS LAUNDERED HIS UNACCOUNTED INCOME IS NOT PRIMA FACIE PROVED BY THE LD. AO EVEN DURING THE REMAND PROCEEDINGS WHEN THE LD.AO GOT THE SECOND OPPORTUNITY TO MAKE NECESSARY VERIFICATION B Y USING HIS STATUTORY POWERS VESTED ON HIM AND PROVIDED TO HIM IN THE STATUTE. WE FIND THAT THE FACTS OF THE CASE CLEARLY PROVED T HAT THE ASSESSEE HAD COMPLETELY DISCHARGED HIS ONUS BY FILING ALL TH E DOCUMENTARY EVIDENCES IN SUPPORT OF THE LOAN TRANSACTION FROM M /S. BRIGHT IMPEX& AGENCIES PVT. LTD IN TERMS OF SECTION 68 OF THE ACT. HENCE, IT IS FULLY COVERED BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ORISSA CORPORATION REPORTED IN 159 ITR 78(SC). THE FACTS BEFORE THE HON'BLE SC AND THE FACTS OF TH E CASE BEFORE US ARE EXACTLY SIMILAR. HENCE, THE ADDITION MADE ON TH IS COUNT U/S. 68 OF THE ACT BASED ON MERE SURMISES AND SUSPICION IS HEREBY DELETED. THIS GROUND OF REVENUE'S APPEAL IS ALSO DISMISSED. IV) HARSHWARDHAN GEMS PVT. LTD., ITA NO.1070/KOL/20 10, ORDER DATED 03.02.2016: 6. IN THE INSTANT CASE ALSO FACTS AND CIRCUMSTANCES ARE IDENTICAL AS THE ASSESSED HAS PRIMA FACIE PROVED THE IDENTITY OF THE SHARE SUBSCRIBER, THE GENUINENESS OF THE TRANSACTION, NAM ELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDIS PUTABLE CHANNELS, THE CREDITWORTHINESS OR FINANCIAL STRENGT H OF THE SHARE SUBSCRIBER. THE RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE SHARE SUBSCRIBER ARE FURNISHED TO THE AO ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHARED APPLICATION FORMS , SHARE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTAB LE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE. THE REVENUE WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY BECA USE THE SHARE APPLICANT FAILED TO RESPOND TO NOTICES. AS HELD BY HON'BLE DELHI 19 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 HIGH COURT AO IS DUTY-BOUND TO INVESTIGATE THE CRED ITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRAN SACTION. FURTHER, THE AO THE ASSESSED HAS DISCHARGED ITS ONU S OF PROVING THE IDENTITY OF THE SHARE APPLICANTS. IN THE GIVEN FACTS THE AO HAD NOT BROUGHT ANY MATERIAL OR EVIDENCE WHICH WOULD IN DICATE THAT THE SHARE APPLICANTS WERE (A) BENAMIDARS OR (B) FICTITI OUS PERSONS OR (C) THAT ANY PART OF THE SHARE CAPITAL REPRESENTED THE COMPANY'S OWN INCOME FROM UNDISCLOSED SOURCES. IN VIEW OF THE FACTS AND PRECEDENT BEFORE US, WE HARSHWARDHAN GEMS PVT. LTD. , AY 2005- 06 ARE OF THE VIEW THAT CIT(A) HAS RIGHTLY DELETED THE ADDITION AND WE CONFIRM THE ORDER OF CIT(A) ON THIS ISSUE. V) PRABHUDHAN INFRASTRUCTURE PVT. LTD., ITA NO.1908 /KOL/2012, DATED 20.01.2016: 7. AS FAR AS RECEIPT OF SHARE APPLICATION MONEY FRO M KALISARAN PROPERTIES (P)LTD IS CONCERNED THE FACTS ARE ALMOST IDENTICAL. KALISARAN PROPERTIES (P)LTD HELD ITA NO.1908/KOL/20 12 - PRABHUDHAN INFRASTRUCTURE PVT.LTD., ,A.Y.2005-06 IN VESTMENTS WORTH RS.10,00,000/- IN PRABHUDHAN SECURITIES (P)LT D AS ON 31.03.2004. THESE INVESTMENTS WERE LIQUIDATED AND U TILISED IN MAKING INVESTMENTS IN SHARE APPLICATION MONEY WITH THE ASSESSEE. THE LETTER OF KALISARAN PROPERTIES (P)LTD IN THIS R EGARD IS AT PAGE 1 OF THE PAPER BOOK. PAGES 3 AND 4 IS THE BANK STATEM ENT OF KALISARAN PROPERTIES (P)LTD WITH FEDERAL BANK. THE ENTRIES IN THE BANK ACCOUNT CLEARLY DEMONSTRATES THE FACTUM OF REA LISATION OF INVESTMENT IN PRABHUDAN SECURITIES PVT. LTD BY KALI SARAN PROPERTIES (P)LTD AND SUCH PROCEEDS BEING UTILISED TO MAKE INVESTMENTS IN SHARE APPLICATION MONEY OF THE ASSES SEE COMPANY. THE REASONS ASSIGNED BY THE AND CIT(A) FOR MAKING A DDITION U/S 68 OF THE ACT ARE IDENTICAL AS WERE GIVEN WHILE TREATI NG THE INVESTMENTS BY JAI KALI PROPERTIES (P)LTD AS UNEXPL AINED. IT IS CLEAR FROM THE EVIDENCE ON RECORD THAT THE ASSESSEE HAS E STABLISHED THE IDENTITY AND CREDITWORTHINESS AND GENUINENESS OF TH E TRANSACTIONS OF THE RECEIPT OF SHARE APPLICATION MONEY FROM M/S. KALISARAN PROPERTIES (P) LTD. WE, THEREFORE, HOLD THAT THE AD DITION MADE BY THE AO AND SUSTAINED BY CIT(A)SHOULD BE DELETED. VI) KUNJ ALLOYS PVT. LTD., ITA NO.239/CTK/2007, ORD ER DTD. 27.11.2015 : 9. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ALTHOUGH THE LD. D.R. HAS RELIED ON THE ORDER OF THE ASSESSING OFFIC ER IN SUPPORT OF THE REVENUE'S CASE ON THIS ISSUE, THE LD. COUNSEL F OR THE ASSESSEE HAS POINTED OUT THAT THE TOTAL AMOUNT OF RS.19.26 C RORES WAS RAISED TOWARDS SHARES BY THE ASSESSEE- COMPANY AS W ELL AS OTHER GROUP COMPANIES INCLUDING THE AMOUNT IN QUESTION DU RING THE ASSESSMENT YEARS 2001-02 TO 2007-08. HE HAS SUBMITT ED THAT PURSUANT TO THE SEARCH CONDUCTED IN THE CASE OF ALL THESE GROUP COMPANIES INCLUDING THE ASSESSEE-COMPANY, THE ENTIR E AMOUNT OF 20 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 SHARE CAPITAL RAISED WAS VERIFIED BY THE ASSESSING OFFICER AND THE SAME WAS ACCEPTED AND NO ADDITION UNDER SECTION 68W AS MADE BY HIM AFTER HAVING FOUND THAT THE IDENTITY AND CAPACI TY OF THE CONCERNED CREDITORS AS WELL AS GENUINENESS OF THE R ELEVANT TRANSACTIONS WAS DULY ESTABLISHED BY GROUP COMPANIE S INCLUDING THE ASSESSEE-COMPANY. HE HAS ALSO FILED SUMMARY OF THE RELEVANT EXTRACT OF THE NOTINGS MADE BY THE ASSESSING OFFICE R IN THIS REGARD, WHICH SHOWS THAT FRESH NOTICES ISSUED BY THE ASSESS ING OFFICER UNDER SECTION 133(6) OF THE ACT WERE DULY SERVED ON ALL THE SHARES SUBSCRIBERS AND THE SAME WERE ALSO DULY COMPLIED WI TH BY THEM BY FILING THE RELEVANT DETAILS AND DOCUMENTS. IN THE L IGHT OF THE SAID DETAILS AND DOCUMENTS FILED BY THE CONCERNED SHARE SUBSCRIBERS, IT WAS HELD BY THE ASSESSING OFFICER THAT THEIR IDENTI TY AND CAPACITY AS WELL AS THE GENUINENESS OF THE RELEVANT TRANSACT IONS WERE DULY ESTABLISHED AND NO ADDITION UNDER SECTION 68 WAS CA LLED FOR. KEEPING IN VIEW THESE SUBMISSIONS MADE BY THE LD. C OUNSEL FOR THE ASSESSEE, WHICH HAVE NOT BEEN DISPUTED OR CONTROVER TED BY THE LD. D.R., WE FIND NO JUSTIFIABLE REASON TO INTERFERE WI TH THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) DELETING THE ADDITION OF RS.1,35,00,000/- MADE BY THE ASSESSING OFFICER UNDE R SECTION 68 AND UPHOLDING THE SAME ON THIS ISSUE, WE DISMISS THE APPEAL OF THE REVENUE. VII) ROSEBERRY MERCANTILE (P) LTD., GA NO.3296 OF 2 010 ITAT NO.241 OF 2010, ORDER DATED 10.01.2011: ON APPEAL THE LEARNED CIT (A) BY FOLLOWING THE DECI SION OF THE SUPREME COURT IN THE CASE OF C.I.T. VS. M/S. LOVELY EXPORTS PVT. LTD., REPORTED IN (2008) 216 CTR 195 ALLOWED THE AP PEAL BY HOLDING THAT SHARE CAPITAL/PREMIUM OF RS.24,00,000/ - RECEIVED FROM THE INVESTORS WAS NOT LIABLE TO BE TREATED UND ER SECTION 68 AS UNEXPLAINED CREDITS AND IT SHOULD NOT BE TAXED IN T HE HANDS OF THE APPELLANT COMPANY. AS INDICATED EARLIER, THE TRIBUNAL BELOW DISMISSED THE APPEAL FILED BY THE REVENUE. AFTER HEARING THE LEARNED COUNSEL FOR THE APPELLANT AND AFTER GOING THROUGH THE DECISION OF THE SUPREME COURT IN THE CA SE OF C.I.T. VS. M/S. LOVELY EXPORTS PVT. LTD. [SUPRA], WE ARE AT ON E WITH THE TRIBUNAL BELOW THAT THE POINT INVOLVED IN THIS APPE AL IS COVERED BY THE SAID SUPREME COURT DECISION IN FAVOUR OF THE AS SESSEE AND THUS, NO SUBSTANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. THE APPEAL IS DEVOID OF ANY SUBSTANCE AND IS DISMISSED. IN VIEW OF THE DISMISSAL OF THE APPEAL, THE CONNECT ED STAY APPLICATION IS ALSO DISMISSED. 13. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE 21 IT(SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015 A.Y.S 09-10,06-07,07-08,08-09,07-08,05-06,07-08,07- 08,10-11,&07-08 SUBMISSIONS OF THE ASSESSEE, AS THE PROPOSITIONS CA NVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE JUDGMENTS OF THE ITAT AND HONBLE HIGH COURTS. THE LD. AR POINTED OUT THAT ST ATEMENT OF SHRI NARESH KUMAR CHHAPARIA SHOULD NOT BE RELIED ON BECA USE HE WAS A DOUBLE SPEAKING PERSON AND LATER ON HE REITERATED T HE STATEMENT BY FILING THE AFFIDAVIT. THE SHARE APPLICANTS HAVE SUB MITTED THE REQUIRED DOCUMENT AND EVIDENCES. THE ADDITION MADE BY THE AO U/S.68 IS WITHOUT ANY BASIS AND WITHOUT ANY INCRIMINATING MAT ERIAL. THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTIONS. THEREFORE, CONSIDERING THE FACTUAL PO SITION AND THE CASE LAW CITED BY LD. AR, WE ARE OF THE VIEW THAT THE AD DITION MADE BY THE AO U/S.68 AND CONFIRMED BY THE LD. CIT(A) NEEDS TO BE DELETED. ACCORDINGLY, WE DELETE THE ADDITION. 13.IN THE RESULT, APPEALS FILED BY THE ASSESSEE [IT (SS)A NO. 47,49,50,51,52,54,55,94,95,96/KOL/2015.] ON THIS GR OUND ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 06/0 1/2017. SD/- (S.S.VISWANETHRA RAVI) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; DATED 06/01/2017 /PRAKASH MISHRA , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) !'#$ , / ITAT, 1. / THE APPELLANT- 2. / THE RESPONDENT.- 3. ! ' #$ ( ) / THE CIT(A), KOLKATA. 4. ! ' #$ / CIT 5. %&'($)* , !+)*!, , / DR, ITAT, KOLKATA 6. (-./0 / GUARD FILE. %$$ //TRUE COPY//
