2021 (11) TMI 134 - ITAT RAIPUR

Assessment u/s 153A - Addition u/s 68 - Unexplained receipt of share application/share capital - HELD THAT:- Additions/disallowances made by the AO are clearly beyond the scope of authority vested under s.153A of the Act without discharging the burden to show presence of any incriminating material or evidence deduced as a result of search in so far as completed assessments are concerned. Additions made in assessments framed under s.153A of the Act in respect of captioned assessee pertaining to AYs. 2006-07 & 2009-10 are thus required to be struck down on this score itself. However, the assessments/re- assessments pending on the date of search i.e. AY 2010-11 & AY 2011-12 in question which stood abated by operation of law will continue to be governed by ordinary powers of assessment under s.153A of the Act in accordance with law.

Addition u/s 68 - The money has been taken from a group co. of a very sound financial standing, which was also returned without subscription. In contrast, the AO has failed to bring any positive evidence against the assessee for assailing the bonafides of share application money received from a sister concern holding a very high net worth.

A reference was also made to PCIT vs. Himachal Fibers Ltd [2018 (8) TMI 873 - SC ORDER] to submit that where the identity of share applicant was fully revealed and the AO did not conduct any enquiry thereon, he was not justified in resting his conclusions on surmises. It is thus the case of assessee that the Revenue is neither justified on facts nor on the touchstone of law to embark upon the impugned additions under s.68.

After a detailed and objective scrutiny of factual & legal position, the CIT(A) has set aside and reversed the additions carried out without showing any iota of incriminating material to support the allegation of accommodation entries in the abated as well as unabated search assessments. The share application money was found to be returned. The action of CIT(A) is in consonance with the binding precedent of Jurisdictional High Court. Hence, we see no reason to depart from the rationale of the decision of the CIT(A) on reversal of additions under s.68 of the Act pertaining to A.Y. 2006-07; 2009-10; 2010-11 & 2011-12 in question. Decided in favour of assessee.