TMI Blog2015 (1) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... hare capital is low. Following our order on revenue appeal, we are of the view that earlier confirmations, transactions being through banking channels, Company share record, ROC record etc. cumulatively demonstrate that the assessee had discharged its initial onus in terms of decision of Hon'ble Rajasthan High Court in Barkha Synthetics [2005 (8) TMI 67 - RAJASTHAN High Court ], Delhi High Court in the case of CIT vs. Dwarkadhish Investment (P) Ltd. (2010 (8) TMI 23 - DELHI HIGH COURT). Thus no addition can be made in respect of these three applicants also. - Decided in favor of assessee. - ITA No. 422/JP/2012, C.O. No.68/JP/2012 - - - Dated:- 19-12-2014 - Shri R. P. Tolani And Shri T. R. Meena,JJ. For the Petitioner : Dr Rakesh Gupta For the Respondent : Shri A.K.Khandelwal ORDER Per R. P. Tolani, JM This is an appeal filed by the Revenue and cross objection filed by the assesse, against the order of the ld. CIT(A), Central Jaipur dated 28-02- 2012 for the assessment year 2003-04. 2.1 The Revenue has raised following grounds in its appeal. 1. Whether on the facts and circumstances of the case, the ld. CIT(A), Central, Jaipur has erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, should have been made in the hands of the aforesaid share appellant companies. 4.1 At the time of hearing, the ld. Counsel for the assessee filed an application to support the order of the ld. CIT(A) under Rule 27 of the Income-tax Appellate Tribunal Rules, 1963 by way of following ground. That in any case and in any view of the matter and having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have deleted the addition of ₹ 1,15,00,000/-- on account of share capital and ₹ 14,01,765/- on account of unexplained cash credit inter alia on the ground that no incriminating material has been found as a result of search for making the impugned additions and therefore ld. CIT(A) ought to have deleted the same on this ground itself. 4.2 The ld. DR is heard on the issue of Rule 27 of the Income-tax Appellate Tribunal Rules, 1963. 4.3 We have heard the rival contentions and perused the materials available on record. The issue raised by the assessee in support of ld. CIT(A) s order u/s 27 of the ITAT Rules, the same is admitted inasmuch as the issue is purely legal in nature and was raised by the assessee by way of Ground No. 2 and 3 in fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e foregoing, the addition of the share capital of various share applicant companies is hereby deleted except in the case of M/s. A.K. Fabrics (P) Ltd., M/s. B.P. Buildtech (P) Ltd. and M/s. B.P. Infotech (P) Ltd. who did not even have the PAN at the relevant point of time, is deleted. A.R. argued that in the case of aforesaid three companies, the PAN details were furnished that in respect of M/s. A.K. Fabrics (P) Ltd , PAN was not available while even submitting additional evidence before the undersigned. Moreover in the remaining two cases, the submission of the PAN at the time of appellate proceedings before me which was conducted in financial year 2011-12 only infers that the PAN have been allotted to these companies quite later on and accordingly these three companies did not have adequate creditworthiness in the relevant period of financial year 2002-03. The inference of non-adequate creditworthiness is further fortified from the fact that the paid up share capital of M/s. A.K. Fabrics (P) Ltd. is only ₹ 30,000/- and M/s. B.P. Buildtech (P) Ltd. and M/s. B.P. Infotech (P) Ltd. is only ₹ 1.00 lakhs each. In view of thee facts and circumstances, it is held that not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee contends that the assessee's business premises was searched along with Kam Dhenu Group of cases on 17-09-2008. During the course of search neither any incriminating material was found nor any surrender of undisclosed income was made. Regular assessment having become final by the date of search i.e. 17-09-2008 was not abated. It has been held by various judicial pronouncements that no addition can be made in the search assessment u/s 153A which is unabeted unless the addition is supported by some incriminating materials found during the course of search. Reliance in this behalf is placed as under:- (i) CIT vs. Murli Agro Products Ltd. in ITA No. 36 of 2009 , Date of order 29-10-2010. (Bombay High Court) (ii) CIT vs. Jayaben Ratilal Sorathia 914 of 2012, Date of order 02-07-2013 (Gujarat High Court) (iii) Jai steel India vs ACIT, 259 CTR 281 (Rajasthan High court) In all these cases, it has been squarely held that in case of assessment remaining unabated becomes final and no addition can be made in search assessment unless some incriminating material in that behalf was found and is relied on by AO. Reliance is placed on plethora of other cases whose c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislation as it will render the entire proceedings u/s 153A of the I.T. Act redundant for such years. Hon'ble Delhi High Court in Para 21 of the Shri Anil Bhatia judgment has observed that:- 'but in cases where the assessment or reassessment proceedings hove already even completed and assessment orders hove been passed determining the assessee's total income and such orders ore subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this later situation, the Assessing officer will reopen the assessments or reassessment already made (without having the need to follow the strict provisions or complying with the strict conditions of sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed u/s 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income .. ..Under section 153A, there is no room for multiple assessment orders in respect of any of the si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the transactions. Consequently AO has rightly made the additions in question. AO s order is relied on. 5.10 Ld. Counsel for the assessee Shri Rakesh Gupta contends that it has not been disputed that no incriminating material whatsoever was found during the course of search suggesting in any manner that share application moneys were doubtful. It has also not been disputed that confirmations in respect of share application money as originally received by the assessee were produced before the ld. AO. Ignoring the copious evidence filed by the assesse, ld. AO after a gap of 07 years wanted the assesse to file new confirmations and copies of the bank accounts from the share applicants. Looking at the long gap of 7 years it was humanly not possible for assesse to comply. In these circumstances ld. AO was required to consider the evidence available on record. It is very unjustified that ld. AO ignored the entire evidence only because assesse could not with the direction which was beyond its control after a gap of seven years. Thus the additions made were untenable in as much as the other material in the form of contemporaneous confirmations, I.T. record of share applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to asking the assesse to surmount an impossibility which is not perceived by the law. In consideration of sufficient material available on record, supporting case laws, facts and circumstances ld. CIT(A) was right in deleting the addition. 6.1 Apropos the amount retained by the ld. CIT(A), raised in CO, in cases of following companies. (i) M/s. A.K. Fabrics (P) Ltd., (ii) M/s. B.P. Buildtech (P) Ltd. (iii) and M/s. B.P. Infotech (P) Ltd. 6.2 Ld. Counsel contends that it has been held by ld. CIT(A) that assesse failed to discharge its initial onus u/s 68 as the PAN nos. have been allotted to these companies subsequently and their paid up share capital was low. It is pleaded that ld. CIT(A) s observations are self-contradictory and support assessee s contentions. The fact that these companies were given PAN / GIR nos. subsequently rather proves their existence at later period which was the objection of AO. Besides in assesses confirmation relevant details are mentioned. Once they are found to be in existence; share applications are confirmed and the moneys are received through banking channels, assessee s initial burden in terms of sec 68 stands discharged. Consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the facts of Dwarkadhish judgment. Rebuttal of ld. AO in terms of Section 68 has to be effective and meaningful and not to call on the assesse to comply with difficult and nearly impossible compliance. Thus looking to the entirety of the facts and circumstances, we are of the view that the assessee has discharged its initial onus in terms of Section 68 of the Act which has not been effectively rebutted by ld. AO in meaningful terms. Respectfully following the jurisdictional High court judgment in the case of Barkha Synthetics, Hon ble Delhi High Court judgment in the cases of Dwarkadheesh Investments and SMC Share brokers we hold that the assesse discharged its onus as cast by sec 68 qua these share applications. Therefore, the additions were rightly deleted by the ld. CIT(A). 8.1 Apropos addition retained by the ld. CIT(A) in respect of M/s. A.K. Fabrics (P) Ltd., M/s. B.P. Buildtech (P) Ltd. and M/s. B.P. Infotech (P) Ltd. The same evidence has been filed by the assesse. Ld. CIT(A) has drawn an adverse inference from the fact that in his view these applicant companies were given PAN subsequently and their paid up share capital is low. Following our order on revenue appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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