Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (12) TMI 1081 - DELHI HIGH COURT

2015 (12) TMI 1081 - DELHI HIGH COURT - TMI - Assessment u/s 153C - assumption of jurisdiction by the AO under Section 153C - Held that:- Admittedly, the Assessee was not one of the entities that was subjected to search and seizure operation under Section 132 of the Act. The assessments were also framed under Section 153C of the Act; although the assessments order reflect that the assessments were framed under Section 143(3)/153A(b) of the Act, the orders passed by the CIT(A) indicates the same .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

stated in therein we find no infirmity with the view of the ITAT that the proceedings under Section 153C of the Act were without jurisdiction. In the circumstances, it is not necessary to consider the other issues sought to be raised by the Revenue. - Decided against revenue - ITA 719/2015, ITA 728 to 734 /2015, ITA 751/2015, ITA 791, 792, 794, 795/2015 - Dated:- 18-12-2015 - S. Muralidhar And Vibhu Bakhru, JJ. For the Appellant : Ms Suruchi Aggarwal, Senior Standing counsel with Ms Lakshmi Gur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, and 2009-10. The aforesaid 12 appeals included 6 appeals preferred by the Assessee and 6 appeals preferred by the Revenue. The said appeals, respectively, impugned six separate orders passed by the Commissioner of Income Tax (Appeals) [CIT(A)] - all dated 22nd February, 2012 - disposing of the respective appeals preferred by the Assessee against the assessment orders dated 31st December, 2010 passed in respect of the aforementioned AYs. 2. The Revenue has projected the following questions of l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

even when it was established that the assessee is an entry operator? (iii) Whether in the facts and circumstances of the case, ITAT could have deleted additions under section 68 of the Act on the ground that they are not based on any material found as a result of the search on the assessee company? (iv) Whether in the facts and circumstances of the case, ITAT could have held that there was no valid search since the impugned additions have been made under section 153C/143(3) of the Act without re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Act, which commenced on 14th October, 2008 in respect of SVP Group of companies . 5. According to the Revenue, the core of SVP Group of companies consisted of four companies, namely, SVP Builders India Ltd., SVP Developers (India) Pvt. Ltd., SVP Liquors India Limited and Five Vision Promoters Pvt. Ltd, which were engaged in the business of construction of residential, commercial and business complexes as well as in sale and purchase of lands. It was found that the aforesaid four companies ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sted by the SVP Group of companies to purchase lands for new projects as well as for booking bogus expenses, as site development charges, for inflating the cost of construction. In addition to the four companies forming the core of the SVP Group, warrants for search and seizure operations were also issued in respect of twenty other companies. 6. The AO categorized the 106 companies, which had invested in the share capital of the aforesaid four companies of the SVP Group during the AYs 2003-04 to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

panies that were not subjected to search but was assessed under Section 153C of the Act. 7. The assessment order records that a notice under Section 153C of the Act was issued by the Assistant Commissioner of Income Tax, Meerut ( ACIT, Meerut ) on 15th September, 2010 for the AYs 2003-04, 2004-05, 2005-06, 2006-07 & 2007-08. On the same date, a notice under Section 142(1) of the Act was issued for AY 2009-10. In response to the notice under Section 153C and 142(1) of the Act, the Assessee fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the notices were responded to. On 31st December, 2010, the AO passed assessment orders in respect of each of the AYs in question assessing the amounts credited in the books of the Assessee as income under Section 68 of the Act. The AO observed in the assessment orders that the details with regard to sources of investment in unquoted shares alongwith the name and addresses of the investors were called for but the same were not complied with. The AO further recorded that even in instances wher .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n any genuine business activity but was involved only in money laundering. 9. The Assessee, being aggrieved by the assessment orders, preferred appeals before the CIT(A), inter alia, challenging the assumption of jurisdiction under Section 153C of the Act. The Assessee contended that the assessing officer of the searched person had not recorded his satisfaction that any money, bullion, jewellery or other valuable article or thing or books of accounts or documents seized or requisitioned belonged .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

note recorded by the AO, which reads as under:- A search operation u/s 132(1) of the Income Tax Act, 1961 was conducted in the case of SVP Group of cases and concerned person at various officers and residences by issuing warrants of authorization u/s 132(1) of the Income Tax Act, 1961 on 14.10.2008 and various documents books of account, other valuable articles and other things were found and seized from various premises. On verification of various documents and books of account found and seized .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2-2007 regarding investment of ₹ 10,00,000/- in purchase of shares of M/S SVP Builders India Ltd, 4-share applications, acknowledgement receipt of return for assessment year 2006-07 along with P & L A/c & balance sheet, certificate incorporation of the company, one page of associated of articles, copy of statement by M.G. Investment of having advanced a loan of ₹ 10,00,000/- to M/S Gulbarga Associates (P) Ltd Annexure A-15- page no. 240 to 248- copies of share certificates he .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of share certificates of M/S SVP Builders India Ltd Registered folio no. 028 total 15 share certificates in the name of M/S ITA 719/2015 & other connected matters Page 10 of 14 Flucky Leasing &Finance (P) Ltd Each share certificate is of 10000 shares. Annexure A-60- page no. 240 to 254- copies of share certificates register folio no. 0071, certificate no. 870 to 884 in the name of M/s Flucky Leasing &Finance (P) Ltd, B-4-71-A, Lawrence Road, New Delhi of M/S SVP, Builders India Ltd .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ution dated 30-03-2005 in favour of Mr. Ghansyam Dass, director, affidavit of Mr. Ghansyam Dass dated 05-02-2007 regarding investment of ₹ 1600000/- (in cash) in purchase of shares of M/s SVP Builders India Ltd., 5-share applications, acknowledgement receipt of return for assessment year 2006-07 along with P & L A/c & balance sheet, certificate incorporation of the company, one page of memorandum of association. Therefore, in view of the provision of section 153C(1) read with secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

though some of the documents emanated from the Assessee, the same were forwarded to SVP Builders India Ltd. in connection with the investment made by the Assessee in the share capital of that company. Therefore, the said documents no longer belonged to the Assessee. Insofar as share certificates are concerned, it was contended that the some of the documents alleged to be share certificates were not share certificates but counter foils of the shares certificates issued by SVP Builders India Ltd. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and the Assessee was not engaged in any actual business activity. The shares sold and purchased by the Assessee were not saleable in the open market and were not tradable commodities. It is further observed that the profit or loss shown from the activity of sale and purchase of shares by private limited companies was a fake attempt to give semblance of genuineness of a functional company . The CIT(A) further held that the Assessee was carrying on business only on paper and its sole purpose was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

id conclusion, directed deletion of the addition made by the AO with a direction to add the same in the hands of the beneficiaries. In addition to the above, the CIT(A) gave further directions, inter alia, for proceeding under Section 277A read with Section 278B of the Act and on account of helping the SVP Group of companies to evade tax by acting as a name lender and creating evidences on paper to give a genuine colour to illegal transactions. 13. The Assessee as well as the Revenue preferred a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, the assumption of jurisdiction under Section 153C of the Act was unsustainable. The ITAT also held that a satisfaction note had not been recorded by the assessing officer of the searched person and, therefore, initiation of proceedings under Section 153C of the Act was invalid. Insofar as the addition under Section 68 of the Act is concerned, the ITAT held that the sources of money received by the Assessee were duly explained, and therefore, deleted the addition made under Section 68 of the Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version