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2023 (9) TMI 881 - AT - Income TaxAssessment u/s 153A - Addition u/s 68 - share application money as unexplained one - Whether the share capital and share premium money received by the assessee during the year is required to be treated as their unexplained credit and deserves to be added under section 68? - HELD THAT:- Inspite of search the Department was unable to lay its hands on any incriminating material. AO though tried to pass the assessment order as a regular assessment order but what he has referred is the statement of Shri Mukesh Banka only. Thereafter his observations are peripheral in nature demonstrating the credential of the share applicant companies. The two statements recorded much prior to the search by Investigating Agencies of the Income Tax Department in some other proceedings cannot be used against the assessee without giving them opportunity to cross examination. We can make reference to the decision of the Hon’ble Supreme Court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT] as observed the statements, which are being used as a foundation for making any addition could not be used unless the assessee is being provided opportunity to cross examine. In these cases, the ld. Assessing Officer even not recorded the statements himself, these were recorded by some Investigating Agencies in some other proceedings in the past. This can be, at the most, information for initiating the assessment machinery in motion, but they cannot be considered conclusive in a search assessment proceeding under section 153A. Therefore, the additions in the assessments under section 153A are not sustainable. Assessment against non existent company [company merged] - assessment in the hands of the successor - Two companies have merged and the National Company Law Tribunal has amalgamated all these companies w.e.f. 01.04.2017. The assessee has demonstrated that in this year neither Bakshiram Uderam Holdings Pvt. Limited has raised any share capital money nor Narsingh Ispat Udyog Pvt. Limited. Whatever action has done in the past by their share applicants cannot be investigated in the hands of the assessee after amalgamation. Therefore, we are of the view that in view of the National Company Law Tribunal’s decision on the amalgamation petition, no inquiry could be made in the hands of both these assessees qua the antecedents of merged companies. On the second-fold also, additions are not sustainable.
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