TMI Blog2016 (11) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] for the assessment years 2006-07 2007-08 arising out of the assessment order passed under section 143(3) read with section 153A of the Act. The only grievance of the Revenue in both these appeals is that Ld. CIT(A) erred in deleting the addition made under section 68 of the Act. 2. At the outset, the Ld. Counsel for the assessee submits that assessee has filed a petition under rule 27 of the Income Tax Appellate Tribunal Rules for admission of the respondent s grounds which was decided against it in the appeal before the Ld. CIT(A). The Ld. Counsel submits that in this petition the assessee is challenging the legality of assessment passed under section 143(3) read with section 153A for the reason that these two assessments were not abated as no incriminating material found in the course of search action under section 132 based on which the additions were made. The Ld. Counsel submits that the Ld. CIT(A) rejected the grounds of legality of assessment holding that there is material found in the course of search or 153A proceedings which is factually not correct. 3. The Ld. D.R. submits that the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of the search. 1. All Cargo Global Logistics [374 ITR 645 (Bom)] 2. CIT v. Gurinder Singh Bawa [386 ITR 483 (Bom)] 3. CIT v. Kabul Chawla [380 ITR 573 (Del)] 4. Narpat Mehta v. ACIT CC 4(1), Mumbai in ITA Nos.2151 and 2153/Mum/2015 for A.Ys. 2005-06 and 2008-09 dated 30.09.2016 The Revenue could not bring on record any incriminating material suggesting for above addition. Therefore respectfully following the jurisdictional High Court decision in the case of All Cargo Global Logistics [374 ITR 645] and CIT vs. Gurinder Singh Bawa [386 ITR 483], we hold that the assessments made under section 153A for the assessment years 2006-07 and 2007-08 are bad in law as there is no incriminating material found in the course of search suggesting for making additions under section 68 of the Act in these two assessment years. 5. Revenue s appeals for A.Y. 2006-07 2007-08 are dismissed. ITA No.1294/M/2015 for A.Y. 2008-09 6. In this appeal of the Revenue, the first issue is that the Ld. CIT(A) erred in deleting the addition of ₹ 22,25,265/- under section 68 of the Act. 7. The Ld. Counsel for the assessee at the outset submits that there is no incrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same group of the assessee and addition was made based on the very same material found in the course of search. 12. The Ld. D.R. fairly submits that the issue in the appeal is decided by the Tribunal in the above two cases. However, he strongly supported the orders of the Assessing Officer. 13. Heard both sides and perused the orders of the authorities below. In the case of Jyoti Bright Bar Pvt. Ltd. in ITA Nos.2832 2833/M/2014 dated 08.06.16 an identical issue has been decided in favour of the assessee wherein addition was deleted observing as under: 17. Now, coming to the merit of the order passed by CIT(A), we found that a search and seizure action u/s.132(1) of the Act was conducted in the case of ARSS group on 06.10.2010 by the DDIT(investigation), Unit-II(1), Bhubaneswar.' The assessee was also covered under the search action u/s.132 of the Act. During the course of assessment u/s.153A r.w.s.143(3), the AO found that the assessee had purchased 4,00,000 shares of the ARSS Infrastructure Projects Ltd. @ ₹ 40/- per share before its Initial Public Offer and was allotted bonus shares in the ratio of 2:1 i.e. 8,00,000 shares. It was further found that during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banyan Berry Vs. CIT 222 ITR 831 (Guj) iv) Mathuram Agarwal Vs. State of Madhyapradesh 8 SCC 667 We also found that the documents filed by the assessee along with case laws were forwarded by CIT(A) for remand report to the AO vide letter dated 16-12-2013 and vide letter dated 31-12-2013, the AO sent his remand report. Copy of which was given by CIT(A) to the assessee and after calling for assessee s reply on the remand report, the CIT(A) deleted the addition after observing that the AO has adopted sale consideration @Rs.125 per share on the basis of certain instances of share transactions cited by him as against actual consideration received by the assessee. After relying on the decision of Hon ble Supreme Court in the case of K.P.Varghese (supra), Godavari Corporation Ltd., 200 ITR 567, Shivakami Co. Pvt. Ltd. 159 ITR 71, the CIT(A) reached to the conclusion that even if there were some other instances of sale of shares at a higher price that cannot lead to a conclusion that the assessee has sold its shares at higher price until otherwise the AO is able to prove that the consideration received by the assessee is more than what is shown in the return of income. Since the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation. Detailed findings recorded by CIT(A) are as per materials on record, therefore, do not warrant any interference on our part. 14. Similarly, in the case of Deven J Mehta the co-ordinate Bench in ITA No.6058 of 2014 it was held as under: 6. We have carefully considered the rival contentions and perused the relevant material available placed before us including the impugned orders of authorities below and case law relied upon by the assessee. A search was conducted on 6.10.2010 in the case of M/s ARSS Infrastructures Project Ltd and group concerns. During the course of search action, at the premises of Shri Jitendra Mehta, father of the assessee, certain incriminating material in the form of various loose papers were found and seized, which pertained to the assessee and accordingly, the notice was issued to the assessee u/s 153C of the Act. During the course of assessment proceedings, the AO noticed that Mr.Suresh Gaggar , the related entities, Mr.Jitendra Mehta and the assessee Shri Deven Mehta were engaged in the business of buying, transferring and manipulating the shares of M/s ARSS Infrastructures Project Ltd before its listing on 3.3.2010. The AO observed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher price that cannot lead to a conclusion that the appellant had also sold its shares at higher price until otherwise the A. 0 is able to prove that the consideration received by the appellant is more than what is shown in the return of income. Since the 40 failed to establish that the appellant had received the sale consideration more than what is shown, the addition of ₹ 1,20,00,000/- 7. We find that an identical issue has been decided in favour of the assessee by the co-ordinate bench of the Tribunal in the case of M/s Jyoti Bright Bar Pvt Ltd(supra). The operative part of the said decision is reproduced below: 18. We had also carefully gone through the seized documents to which our attention was invited by Id. DR and found that seized papers are draft MOU and agreement in the name of Devan Mehta, which shows that he was indulged in the business of providing services for listing of shares on various stock exchanges, which is not an illegal, no cogent material was there to indicate that Devan Mehta was engaged in manipulating IPOs. We also found that during the course of search statement of Mr. Devan Mehta was recorded, wherein he has clearly stated that assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. ITA No.809/M/2015 for A.Y. 2011-12 17. The only issue in the appeal of the Revenue is that Ld. CIT(A) erred in deleting the addition made under section 68 of the Act on account of loans claimed to have been accepted from Neelam Shah and Bhuta Investment Pvt. Ltd. 18. The brief facts are that the Assessing Officer while completing the assessment required the assessee to furnish the list of creditors, confirmation letters, names, addresses, telephone numbers, PAN numbers etc. in respect of unsecured amounts shown in the name of Neelam Shah and Bhuta Investment Pvt. Ltd. However, it appears that the assessee furnished only partial information and not the complete details. Thus the Assessing Officer observing that the assessee has not furnished complete details in respect of unsecured loans made addition of ₹ 3,04,00,000/- from these two parties treating them as unexplained credits under section 68 of the Act. 19. On appeal, the Ld. CIT(A) deleted the addition against which the Revenue is in appeal before us. 20. The Ld. D.R. vehemently supported the orders of the Assessing Officer. The Ld. Counsel for the assessee placed reliance on the orders of the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese memorandum, agreement and letters clearly proves that Mr Jitendra Mehta, proprietor of M/s S J Impex and Mr Devan Mehta were involved in managing and manipulating the IPO of Private Limited or Limited Companies and Mr. Suresh Gaggar Group was also part of the scheme. The modus operandi adopted by these companies as discussed in the foregoing paragraphs and it is crystal clear that they were managing the private placement of the shares of these companies by throwing their weight to influence before the placement of IPO. They were acquiring the shares of unlisted companies without completing any formalities, which are normally required in transaction of shares and further they were selling them to the interested parties and directly getting them registered or transferred in their names. 6.5 It is pertinent to mention that the assessee was issued show cause about the seized material, and was specifically asked about the transactions undertaken by him / it, as per the Memorandum of Understanding, documents of which were found relating to M/s J Kumar Infrastructure Ltd and M/s Satara Properties Ltd. In reply to the show cause, Shri Diven Mehta has stated that The transaction di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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