TMI Blog2017 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... r AY 2009-10. The assessee has raised the following grounds of appeal: 1. Whether on facts and in the circumstances of the case and in law. The Ld. CIT(A) is justified in allowing the addition made of ₹ 5,00,00,000/- u/s 68 on account of unexplained investment in share capital of various companies. Without appreciating the fact that the assessment order framed after due verification. 2. Whether on facts and in the circumstances of the case and in law. The Ld. CIT(A) is justified in allowing the addition made of ₹ 2,00,00,000/- u/s 68 on account of unexplained investment in share capital of various companies, without appreciating the fact that the assessment order framed after due verification. 2. The assessee in its C.O. No. 255/M/2014 in ITA No. 6101/M/2012 raised the following grounds of objection/ appeal: 1. Whether on facts circumstances of the case the Ld. CIT has erred in concluding that the action of the Learned Assessing Officer in invoking the provisions of Section 153C is justified. The appellant prays that the condition of Section 153C is not satisfied and the Learned Assessing Officer has wrongly invoked the provisions of Section 153C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Director of company and Shri Jose Mathew and were also recorded on15.04.2010 wherein Sh. Narayan Hari Halan Director offered income of ₹ 5.00 Crore. On the basis of their statement, the A.O. recorded the reasons and issued notice u/s 153C dated 23.07.2010. In reply to the notice, the assessee filed return of income on 29.09.2010 declaring total income at Rs. Nil. On verification of return of income the AO noticed that the assessee has not disclosed the income of ₹ 5.00 Crore as disclosed in the statement recorded u/s 131 on 15.04.2010.The AO served the notice u/s 142(1) dated 05.05.2011 and asked to give the details of share application money and utilization thereon in respect of share application money of ₹ 2.00 Crore received from M/s Delton Exim Pvt Ltd. The assessee filed its reply dated 01.11.2011 and contended that all share holding of company who have made investment in assessee-company are independent existing corporate bodies, they are maintaining their regular books of account, having their own bank account, filed separate return of income, all details were supplied, the assessee further contended that identity of share holder is established, therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found that share application is received from 5 companies by paying cash s in lieu of cheque received. In this background and based on the information given to me by the officer of income tax Department I had admitted that investment made by 5 companies into share application of our company is not explainable and made the disclosure of income of ₹ 5 crore. I state that disclosed that was made purely on mistaken belief that the transaction of share investments by 5 companies cannot be explained and the taxable income of company will not be to the extent of ₹ 5 crore pertaining to AY 2009-10. 4. However subsequently I gathered the information, the papers, the documents, the confirmation, bank statement, balance sheet and other records of all the 5 companies. Based on the information and documents I had observed that all the 5 companies are genuine and they have invested in the share capital of the company. No confessional statement is given by any of 5 shareholding company before the investigating wing Mumbai or anywhere else. The transaction of share investment by all 5 companies can be explained. Therefore while filing the return of income for A Y 2009-10 in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any other evidence or material. 10. In response to your questionnaire dated 5/5/2011, we have submitted before you the name and address of the shareholding company, the PAN No., the details of share application money received, issue of shares against share application, cheque No., name of the Bank, Branch and confirmation. We established the identity and credit worthiness of the companies who have made investments in the share capital of the company. We have submitted all the details called for in your questionnaire. 11. We have also proved before you that we have issued the shares to all the five shareholding companies. The details of distinctive number of shares, share certificate numbers and number of shares issued have been submitted to you. We had intimated the Registrar of Companies of issue of shares by filing the requisite forms. We had filed the annual return in which year after year their names are reflected as shareholders. All these events happened much prior to 4/3/2010 when the search action is taken against M/s. Jogia Properties Ltd. 12. We further state that your have in para 7 of the proceeding sheet dt. 11.11.2011 have referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was added in the income of assessee under section 68 of the act. On appeal before the ld. CIT(A), the addition was deleted. Aggrieved by the order of ld. CIT(A), this appeal is filed before us. 6. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The Ld. AR of assessee submitted that assessee has filed C.O. in support of his legal contention raised before the ld. CIT(A). It was further argued that similar additions were made in cases of group concerned which was covered by the search and seizure action u/s 132 conducted on 04.03.2010. We have noticed that the C.O. of the assessee is barred by 390 days of limitation period. The ld. AR of the assessee during the course of hearing was asked to explain the cause of delay. The ld. AR of the assessee argued that assessee has raised legal ground of objection in its C.O. which goes to the root of the case. The ld. AR of assessee further invited our attention to the order of Co-ordinate Bench of this Tribunal in group cases in ITA No. 6104, 6105/Mum/12 and C.O. No. 259 260/Mum/2012, wherein the similar delay in fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng order: The assessee has challenged the legality of the assessment framed u/s.153C on the plea that no satisfaction was recorded by AO of the searched person so as to empower the concerned AO of these concerns to make addition u/s.153C. Learned AR placed on record report on inspection taken of the records dated 28/08/2015 which reads as under:- Jogia Properties Ltd. A.Y. 2008-09 alld 2009-10 ITA No.6106/M/2012 and 6107/M/2012 Hearing fixed on 8th September, 2015 Report on the inspection taken of the records The appellant had made an application vide letter dated 05/08/2015 to the Assessing Officer requesting for inspection of the assessment records. The said assessment records were with the Hon'ble Commr. of Income Tax, DR, Smt. Neena Pandey, f-Bench, Mumbai ITAT. The Inspector Ms. Ambika Shashidharan, attached to f-Bench, Mumbai ITAT, gave the inspection of the records on 20/08/2015 at 3 pm. Shri Dilip V. Lakhani, Chartered Accountant, the authorised representative and Shri Viresh Sohoni, the representative of the appellant, took the inspection of the assessment records and the findings of the said inspection are as under. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be' issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under section 158BD if the Assessing Officer was satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he could proceed against such other person under section 158BC. Thus a condition precedent for issuing notice under section 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the requirement is not satisfied, recourse cannot be had to the provisions of section 153C. Held, allowing the petition, that admittedly, the three loose papers recovered during the search proceedings did not belong to the petitioner. It was not the case of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Ld. Assessing Officer having other person. Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Ld. Assessing Officer shall not be required to issue notice for assessing or reassessing the total assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessrnent has abated. In Order to issue a valid notice u/s 153C, the Ld. Assessing Officer of a person against whom search action is taken, records a satisfaction that any money, bullion, jewellery or other valuable article or thing, or books of account or documents seized, belong to a person, other than a person referred to in Section 153A, then the such books of account or documents or assets seized shall be handed over to the Ld. Assessing Officer having jurisdiction over such other person. The recording of the satisfaction is a must and even if the Ld. Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial order passed by AO is not sustainable. 11. In the result, C.O. filed by assessee is allowed. 12. As we have allowed the C.O of the assessee by following the decision of Coordinate Bench, thus, the discussion on the grounds of appeal raised by Revenue become academic. In the result, appeal of the Revenue is dismissed as infructuous. ITA No. 6103/Mum/2012 for AY 2010-11 13. The revenue has raised only one ground of appeal, which is identical to the grounds of appeal in ITA No. 6104 6105/M/2012 ACIT v/s Archieve Realities Developers Ltd., ITA No. 6097 6098/M/2012 M/s Carburi Properties Developers Ltd. v/s ACIT, ITA No. 6099 6100/M/2012 M/s Vedisa Proporties v/s ACIT, ITA No.6109 6110/M/2012 M/s Auster Properties v/s ACIT, ITA No. 6108, 6112 6113/M/2012 M/s Reva Properties v/s ACIT, ITA No.6096/M/2012 M/s Cikura Properties v/s ACIT.. The ld. AR of the assessee argued that the grounds of appeal raised by Revenue are also covered by the decision of Co-ordinate Bench in assessee s group case in the above referred decisions. The ld. DR for the revenue submitted that he has nothing to add in his submission except to rely on the order of Assessing Officer. 14. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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