Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding


  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2016 (5) TMI 854

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... d vide additional grounds to the file of the ld. CIT(A) to be adjudicated expeditiously in accordance with law after providing due and reasonable opportunity of being heard to both the parties. The assessee is also directed to co-operate and not to seek any unwarranted or undue adjournment. - ITA Nos. 3053/Del/2012 and 2611/Del/2013, ITA No. 3553/Del/2012, ITA Nos. 2610, 2613 to 2616/Del/2013 - - - Dated:- 13-4-2016 - Sh. N. K. Saini, AM And Sh. Sudhanshu Srivastava, JM For The Assessee : Sh. Vinod Kr. Bindal Sanjeev Bindal, CAs For The Revenue : Sh. R. B. Meena, CIT DR ORDER Per Bench: In the case of M/s Rite Pack Industries Pvt. Ltd., New Delhi, the Cross appeals by the assessee and department for the assessment year 2005-06 are directed against the order dated 30.04.2012, the appeals by the assessee for the assessment year 2006-07 is directed against the order dated 30.03.2013 and for the assessment year 2008-09 against the order dated 13.03.2013 of ld. CIT(A)-XXXI, New Delhi. 2. In the case of M/s Kiwi Foods India Pvt. Ltd., New Delhi, the appeals for the assessment years 2004-05 to 2006-07, 2008-09 2009-10 are directed against the separate o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ing the fact that no assets, incriminating material and documents belonging to the appellant company were seized from the searched parties/premises on 31.07.2008, which is the prerequisite for assuming jurisdiction u/s 153C of the Act. Thus, the notice issued without fulfilling the conditions laid down by the law is invalid and the assessment order should be annulled. 8. In the aforesaid applications, the assessee contended that the additional grounds are purely legal grounds arising out of the core issue as per the assessment order, not involving any fresh investigation into facts, so these deserve to be admitted. The reliance was placed on the following case laws: ACIT Vs Bhagwati Printers (P) Ltd. (2006) 102 TTJ 480 (Del) National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 (SC) DCIT Vs Turquoise Investment Finance Ltd. (2006) 154 Taxman 80 (MP) Kanoi Industries (P.) Ltd. Vs DCIT (2006) 100 ITD 462 (Kol.) West Bengal State Electricity Board Vs DCIT (2005) 278 ITR 218 (Cal) Uma Polymers (P) Ltd. Vs DCIT (2006) 101 TTJ (JD) 124 Datamatics Ltd. Vs ACIT (2007) 111 TTJ 55 (Mum-Trib) Abhishek Industries Ltd. Vs CIT .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ross-objections before the Tribunal. The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner (Appeals) is too narrow a view to take of the powers of the Tribunal. It has further been held that: Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 12. The facts related to the issue raised by the assessee vide additional grounds, in brief are that a search and seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was carried out in the case of Rajdarbar Group of cases on 31.07.2008 and certain documents belonging to the assessee were also seized. The AO thereafter issued a notice .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... vt. Ltd. PMP Farms Pvt. Ltd. 7500 1500000 4. Kiwi Foods Pvt. Ltd. Intelecom Ltd. 10000 1000000 5. Kiwi Foods Pvt. Ltd. Optimates Textiles Ind. Ltd 5000 500000 6. Kiwi Foods Pvt. Ltd. Unique Diagnostics Ltd. 10000 1000000 7. Kiwi Foods Pvt. Ltd. Unique Diagnostics Ltd. 15000 1500000 8. Kiwi Foods Pvt. Ltd. Core Capital Services Ltd. 10000 1000000 9. Kiwi Foods Pvt. Ltd. BSA Fincap Pvt. Ltd. 4545 500000 10 Kiwi Foods Pvt. Ltd. Core Capital Services Ltd. 1 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... . Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted as under: a. It is an undisputed fact that the amounts received from all the above allottees were against the share capital allotted to them. b. In terms of the provisions of the income-tax Act as well as of the Companies Act, 1956, no company is under an obligation, rather cannot ask the shareholder as to wherefrom he got the money to invest nor the shareholder is obliged to give such information to the company. There is no provision under any of the two above Acts to ask for the balance sheets of the shareholders. However, the details regarding those investors as per list attached were very well placed on the record of the assessing officer during the course of the assessment proceedings and if so desired, she could have called for further information from the office of Registrar of Companies or the shareholders directly. Further PANs of such investors were also placed on the record of the assessing officer and all of them were being assessed in New Delhi. The assessing officer could have made direct enquiries from their assessing officers by deputing inspector or by calling for informa .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... P) Ltd. Vs. ITO [2011] 13 taxmann.com 114 (Delhi) CIT Vs Orissa Corporation Ltd (1986) 159 ITR 78 (SC) 18. It was contended that if the assessee had furnished the evidences regarding the share capital allotted to the share applicants and the department alleges otherwise then onus lies on the department to prove the same. The reliance was placed on the following case laws: CIT Vs Bedi Co. Pvt. Ltd. (1998) 230 ITR 580 (SC) CIT Vs Daulat Ram Rawatmull (1972) 87 ITR 349 (SC) Rajabali Nazarali Sons Vs CIT (1987) 163 ITR 7 (Guj.) CIT Vs Sukhdayal Rambilas (1982) 136 ITR 414 (Bom.) Hiraluxmi Pandii Vs ITO 27 ITR 643 (Patna) Juggilal Kamlapat Vs CIT (1969) 73 ITR 29 (SC) Jaisalmer Construction Co. 9 TTJ 452 19. It was contended that the income on account of the buy back of the shares was already surrendered by a director of the company namely M/s Rajender Aggarwal in his hands in the year. It was further submitted that as far as the assessee company was concerned, it received money against the shares allotted by it to the shareholders and whether the same were given by the director or the shareholders was not its concern, r .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rial exists in the assessment folder for the relevant period. It is not the case where any person claimed before the revenue that the impugned share capital is nothing but bogus introduction by way of accommodation entries. In the impugned appeal the issue is squarely covered by the earlier judgments in the case of Lovely Exports Pvt. Ltd., Divine Leasing and Finance Ltd. (supra) etc cited in the above preceding paragraphs as none of the reasons to give ruling in favour of the department by the Court exists here. Further on perusal of the information down loaded from the official website of the Ministry of Corporate Affairs, Government of India, which is in public domain and it has been found that as per chart submitted by the appellant the following two companies have not filed their audited annual accounts for the period after the year 2008/09 with the ROC as per the information available on the portal of the MCA as on 28.12.2011. It is highly intriguing that have - .he companies which have invested heavily in the share of the appellant company can vanish. The list these two companies are as under; SI. No Name of the Company .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ained. Thus the addition of ₹ 85,00,000/- is deleted and for the balance amount of ₹ 23,00,000/- is confirmed. 21. Now the department is in appeal against the relief allowed to the assessee and against the sustenance of addition assessee is in appeal. At the first instance, the ld. Counsel for the assessee argued on the legal issues raised vide the additional grounds and submitted that no incriminating material was found during the course of search and Sh. Rajender Aggarwal, Director of the company admitted that shares allotted to different companies were bought by him and not by the company. He also surrendered the income on account of purchase of shares, therefore, the addition sustained by the ld. CIT(A) was not justified. He also submitted that the assessment framed by the AO u/s 153C r.w.s. 143(3) of the Act deserves to be quashed in view of the judgment of Hon ble Jurisdictional High Court in the case of CIT Vs Kabul Chawla in ITA No. 707/2014 order dated 28.08.2015 (copy of the said order was furnished). He drew our attention towards para 37(vii) of the said judgment wherein it has been held as under: vii. Completed assessments can be interfered wi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... apparent from the assessment order that any adverse material existed in the assessment folder for the relevant period, on the other hand, claim of the ld. DR is that the additions were made by the AO on the basis of the documents found during the search. Thus, there is contradiction in the facts. On merit also the ld. CIT(A) without bringing on record the figures statistics came to the conclusion that the companies had enough resources to make the impugned investment. Therefore, by keeping in view the aforesaid facts, we are of the opinion that the issues under consideration require a fresh adjudication. As the principles of natural justice demand that opportunity is to be given to both the parties, we, therefore, deem it appropriate to set aside these issues raised vide additional grounds to the file of the ld. CIT(A) to be adjudicated expeditiously in accordance with law after providing due and reasonable opportunity of being heard to both the parties. The assessee is also directed to co-operate and not to seek any unwarranted or undue adjournment. In the present case, no other ground was argued by either of the parties before us. Therefore, no finding is given on the merit of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ify, delete or amend al or any ground of appeal either before or at the time of hearing. 27. For another assessment years under considerations, similar grounds are raised, the only difference is in the figure mentioned in ground no. 3. The assessee has also raised additional grounds in respect of the aforesaid appeals vide application dated 29.09.2015. The additional ground raised reads as under: The Assessing Officer erred in law and on facts in making the assessment u/s 143(3) of the Act instead of section 153A since the satisfaction note was prepared by the Assessing Officer on 27.07.10, which became the substituted date of search u/s 153C and AY 2009-10 fell within the six preceding assessment years, i.e., from AY 2005-06 to 2010-11 for the purpose of assessment u/s 153A. Thus, the assessment framed u/s 143(3) is not valid and should be annulled. 28. During the course of hearing the contention of both the parties were similar to the case of M/s Rite Pack Industries Pvt. Ltd., New Delhi which we have already adjudicated in the former part of this order. As regards to the additional ground, the ld. Counsel for the assessee admitted that this legal .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates