2023 (2) TMI 119 - AT - Income Tax

Assessment u/s 153A - Addition u/s 68 - incriminating Material found during the search or not? - HELD THAT:- A careful reading of the statement shows that there is nothing incriminating found or said by Shri Maninder Singh Sahni nor any adverse inference has been drawn by him in his statement. As mentioned elsewhere, the assessee had filed its return of income on 30.09.2013 accompanied by statement of account, which means that transaction of share application money of Rs. 2 crores and loan of Rs. 10 lakhs from TMR Projects Pvt Ltd must have been reflected in the return of income so filed.

Therefore, it cannot be said that only after search and seizure operation filed, the Revenue came to know about share application money received by the assessee as there is no such mention in the body of the assessment order or in the body of the order of the first appellate authority.

We have the benefit of the assessment order of TMR Projects Pvt Ltd for Assessment Year 2013-14. The said assessment order is framed u/s 143(3) of the Act after thorough scrutiny and in the said assessment order, the same statement of Shri Maninder Singh Sahni has been extracted which has been made the basis for making additions. In the entire assessment order framed after thorough scrutiny, there is no whisper about the transaction between TMR Projects Pvt Ltd and the assessee relating to the share application money and the loan.

Assessment of TMR Projects Pvt Ltd was completed by making addition of Rs. 15.07 lakhs being 1% of the commission earned on providing accommodation entries relating to sales. That addition was also deleted by this Tribunal [2021 (9) TMI 1471 - ITAT DELHI] wherein the Tribunal observed that addition is dehors of any incriminating material and the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] squarely apply.

Since Rs. 2.10 crores has come from TMR Projects Pvt Ltd and since no addition has been made in the hands of the “giver” for want of incriminating material, the same transaction cannot be accepted as based upon any incriminating material in the hands of the “taker”, i.e the assessee.

Facts on record show that TMR Projects Pvt Ltd has received money from Tyagi Portfolio (P) Ltd and Mokul Overseas (P) Ltd and the loan received from Tyagi Portfolio (P) Ltd has been refunded by TMR Projects Pvt Ltd subsequently during the F.Y. itself. Therefore, on merits also, additions do not survive - no hesitation in quashing the assessment order and directing the Assessing Officer to delete the impugned additions. Decided in favour of assessee.