TMI Blog2013 (12) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... vision in the Act requiring the assessment made under s. 153A to be after issue of notice under s. 143(2) - The two questionnaires issued to the assessee were sufficient so as to give notice to the assessee, asking him to attend the office of the AO in person or through a representative duly authorized in writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him – Decided against assessee. Share application money – Held that:- The assessee submitted the related documents of the investors to the Assessing Officer to prove the genuineness of the amount received as application money - The Assessing Officer has not raised any doubt for the authenticity of the above details and documents filed by the assessee - The Assessing Officer has also not made any enquiry for issuing notice u/s 133(6) or summons u/s 131 - No incriminating documents were found and seized during the search operation – Following CIT vs. Orissa Corporation [1986 (3) TMI 3 - SUPREME Court] - The evidences submitted by the assessee cannot be thrown out without any enquiry specially when there is no material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 258/Del/2010 are common which read as under :- "1. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the order passed by Ld AO under section 153A/143(3) is bad and liable to be quashed as the same has been passed without serving statutory notice under section 153A of the Act. 2. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the order passed by Ld AO is bad in law and liable to be quashed as the same has been passed without issuing statutory notice under section 143(2) of the Act. 3. On the facts and circumstances of the case, the learned CIT(A) has erred in law in rejecting the contention of the assessee that the addition made by AO is not sustainable as the same has been made without there being any incrimination material found during the course of search. 4. The assessee craves leave to add, amend or alter any of the grounds of cross objection." The grounds in cross objection no.259/Del/2010 are also similar to the grounds except the ground no.1 in cross objection nos.257 258/Del/2010. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the first year of operation and the relevant Assessment Year was 2006-07. The return of income for 2006-07 was filed on 29.11.2006 and the same was processed u/s 143(1) on 29.01.2008. No notice u/s 143(2) was issued. Similarly, the return of income for Assessment Year 2007-08 was filed on 31.10.2007 and the same was processed u/s 143(1) of the Act on 11.02.2009. The return for Assessment Year 2008-09 was filed on 27.09.29008 and meanwhile the search operation was carried out on 15.02.2008. No incriminating document was found and seized with regard to assessee during the search operation. The Assessing Officer issued notice u/s 142(1) and 143(2) on 18.11.2009 and assessee was asked to file the return of income for the Assessment Years 2002-03 to 2007- 08. The assessee filed return on 25.11.2009 in response to that notice. Thereafter the Assessing Officer has not issued any notice u/s 143(2) for any of the assessment year. Thus, no notice was issued to assessee after filing return of income. In view of these facts, the assessment made by the Assessing Officer without issuing notice u/s 143(2) is bad in law. 7. While pleading on behalf of the revenue, ld. DR relied on the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required by the A.O. When the asstt. Proceeding reached at the fag end then they will file the return and plead to issue notice u/s 143(2) of the Act or asstt. Order is to be branded as void ab initio, because of non-compliance of the provision can such type of situation permissible in the law, our reply is simple no. 10. It is true that if an assessee filed a regular return u/s 139 and A.O. wants to scrutinize that return then he has to issue notice u/s 143(2) of the act within the time frame provided in the proviso appended to section 143(2) of the Act. But here the circumstances are all together different. The assessee committed a default itself. It ignored the notice issued by the A.O. u/s 153A. The A.O. has taken up the proceeding well in time by issue of notice u/s 142(1) and 143(2) of I.T. Act. The alleged return filed by the assessee on 7.11.2007 at the most can be taken as a corroborative piece of information for determining the taxable income of the assessee, otherwise available with him and collected during the course of search. In view of the above discussion we are of the opinion that case law referred by the Ld. Counsel for the assessee are quite distinguishab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were asked by the Assessing Officer which also includes detailed note on the nature of business, details of increase in of the share capital and share application money received along with confirmation of ITR, copy of accounts and bank statements, details of bank accounts of the investors, details of work-in-progress, details of FDR with bank statement, details of advance for land, agreement copy and bank statement, details of advance against collaboration agreement and bank statement showing the amount of transaction, details of advance recoverable, details of advance against FSI, copy of agreement and bank account statement, details of advance against bookings, party wise with address, PAN and agreement copy, details of sales party wise and details of share holding pattern. As held by the ITAT in the case of ITO vs. Ashok Chadha in ITA No.1455/Del/2009 others, the issue is covered in favour of the revenue. The ITAT has analysed the provisions of section 143(2) of the Act in detail. The relevant portion of this order is reproduced below :- "5. Having considered the submissions of the parties, we think it fit to dwelve upon the provision contained in section 143(2)(ii), appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral notice would suffice. However, a different view was taken in the case of Nirmal v Secretary of State, in which it was held that the notice should ordinarily specify the points in respect of which the assessee has to produce evidence. The objection in this case was that the notice was general in nature. Obviously, such an objection cannot be taken in this case as the AO specified the points in respect of which evidence was to be produced or was caused to be produced. Therefore, we are of the view that this notice amounts to compliance of the mandatory requirement of the provision contained in section 143(2)(ii). As the notices have been served after the filing the return, making a reference to it in the notices would amount to stating the obvious fact, which is not necessary according to us. 5.2 The ld. DR has raised a fresh plea in defence of the order of the ld. CIT(A) that since the return has not been filed within the prescribed time, it is non-est and, therefore, the assessment is made u/s 144 read with section 153A. The case of the ld. counsel is that no such finding has been given by any of the lower authority and, thus, the argument is a leap in the dark. We reall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for issuance of notice to the person searched under S. 132 or where documents etc are requisitioned under S. 132(A), to furnish a return of income. This clause nowhere prescribes for issuance of notice under S. 143(2). The words 'so far as may be' in c1. (a) of sub S. (1) of S. 153A could not be interpreted that the issue of notice under S. 143(2) was mandatory in case of assessment under S. 153A. The use of the words, 'so far as may be' cannot be stretched to the extent of mandatory issue of notice under S. 143(2). As is noted, a specific notice was required to be issued under c1. (a) of sub-so (1) of S. 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under S. 143(2) could be contemplated for assessment under S. 153A. In addition, the two questionnaires issued to the assessee were sufficient so as to give notice to the assessee, asking him to attend the office of the AO in person or through a representative duly authorized in writing or produce or cause to be produced at the given time any documents, accounts, and any other evidence on which he may rely in support of the return filed by him." Keeping in view the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies found during the search at the assessee premises establish that the share application money received from these companies are not genuine. The assessee has to establish the genuineness of the share capital and share application money. The assessee has furnished the copy of documents filed with the Registrar of Companies, copy of unaudited confirmations and copy of affidavits, however, no original confirmations of share capital and share application from these parties were furnished. The Directors of the companies were not produced. The bank accounts of the companies were not produced. The onus on the revenue can be shifted only when the assessee produces the Directors and bank accounts and original confirmations. Not producing the Directors shows that the identity and creditworthiness of these companies have not been established. The CIT (A) ignored these facts and deleted the addition. 12. In reply to that, the ld. AR submitted that all the share capital has been received from the group companies as evident from page 2 of the assessment order itself. The chart given at page 2 of assessment order gives the names of the company, full address of the company, name of the Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ltd. 205 ITR 98 (Del.) ii. CIT vs. Achal Investment Ltd. 268 ITR 211 (Del.) iii. CIT vs Stellar Investments Ltd 192 ITR 298(Del) iv. CIT vs Stellar Investments Ltd 251 ITR 263 (SC) v. CIT vs Divine Leasing Finance Ltd 299 ITR 268(Del) vi. CIT vs Value Capital Services P Ltd 307 ITR 334 (Del) vii. CIT vs Lovely Exports P Ltd 319 ITR 5 (SC) viii. CIT vs Oasis Hospitalities P Ltd 333 ITR 119 (Del) ix. CIT vs Kamdhenu Steels and Alloy Ltd 248 CTR 33 (Del) x. CIT vs K C Fibres Ltd 332 ITR 481 (Del) xi. CIT vs Winstral Petrochemicals Ltd 330 ITR 603 (Del) xii. CIT vs Dwarkadhish Investment P Ltd 330 ITR 298 (Del) xiii. CIT vs Antartica Investments P Ltd 262 ITR 493 (Del) xiv. CIT vs Makhani Tyagi P Ltd 267 ITR 433 (Del) xv. CIT vs Dolphin Canpack ltd 283 ITR 190 (Del) He further pleaded that Hon'ble Delhi High Court in the case of CIT vs. Nova Promotors and Finlease P. Ltd. reported in 342 ITR 169 (Del.) is not applicable to the facts of the assessee's case. The Hon'ble High Court in its order itself has distinguished the facts in para 39 wherein the Hon'ble High Court has held as under :- "39. The case of O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No.4656/Del/2009 dated 30.04/2013 wherein the deletion of the addition by the CIT (A) was upheld. The ld. AR also submitted that the grounds in appeal in assessee's cross objection no.258/Del/2010 in ITA No.3201/Del/2010 for Assessment Year 2007-08 and the facts in revenue's appeal in ITA No.3201/Del/2010 are exactly the same, therefore, the same pleadings may be taken for the Assessment Year 2007-08 also. 13. The ld. AR also submitted that the grounds in cross objection for Assessment Year 2008-09 in CO No.257/Del/2010 are also the same as of ground nos.2, 3 4 in cross objections for Assessment Years 2006-07 2007-08, therefore, this issue is also decided accordingly. 14. We have heard both the sides on the issue. We have perused the case laws relied upon by both the sides. The assessee has received from its promoters and various group companies of the following amount :- Name Amount Promoters Capital Rakesh Chand Gupta 100000 Shanti Prakash Gupta 100000 Sushma Gupta 100000 Sanwar Mal Agarwal 100000 Sunita Gupta (w/o Rakesh Gupta) 100000 Suni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e share capital receipts from these persons. The assessee gave the names and addresses of these persons and their PAN was also given. The Assessing Officer has not issued any summons u/s 131 of the Act to these companies. The Assessing Officer has also not conducted any enquiry into the particulars/details submitted by the assessee with regard to these shareholders. In our considered view and in view of the decisions of Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation reported in 159 ITR 78, the evidences submitted by the assessee cannot be thrown out without any enquiry specially when there is no material to implicate the assessee in a collusive arrangement. The details submitted also show that these investors companies were sister concerns of the assessee and having the same address and common directors. The Assessing Officer has not pointed out any specific defects in the details submitted by the assessee. Considering all these factual aspect, we hold that CIT (A) was justified in deleting the addition. 15. In ITA No.3202/Del.2010 for Assessment Year 2008-09, the issue raised is against deletion of addition of Rs.22.37 crores of unsecured loans received from Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various dates and filed the details and in none of the hearing, this issue of loan was raised. Shri Shanti Prakash Gupta, who was the Director of the assessee company, has declared the taxable income for the year at Rs.1,77,43,620/-. The computation of the income is placed at page 22 of the paper book. Shri Shanti Prakash Gupta, Director of the company from whom the loan was received was also having exempted income u/s 10 to the tune of Rs.1,94,84,640/-. Similarly, the other Director, Shri Rakesh Chand Gupta also declared income for the year at Rs.1,22,65,220/-. The computation of income is placed at page 31 of the paper book. Since both the persons from whom the loan was received were Directors of the company and they declared substantial taxable income in their return of income and loan has been received from their bank account establishes all the three ingredients as required under section 68 of the Income-tax Act, 1961, i.e. the identity is established beyond any doubt, both the persons were directors of the assessee company, both the directors were declaring taxable income in crores which proves the creditworthiness of these persons and the transactions were through banking ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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