TMI Blog2018 (10) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... law. Once legal ground is restored to the file of A.O. for adjudication as per Law, therefore, this issue on merit shall also be restored to the file of A.O. for deciding the same afresh after taking decision on the legal issue. - ITA.No.787/Del./2014 - - - Dated:- 8-10-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Shri Rohit Garg, And Shri Siddharth Joshi For The Revenue : Shri S.S. Rana, CIT-D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-XI, New Delhi, Dated 29.11.2013, for the A.Y. 2008-2009. 2. We have heard the Learned Representatives of both the parties and perused the material available on record. 3. The facts of the case are that assessee-company filed return of income declaring an income of ₹ 19,92,354/- on 29.09.2008. The same was processed under section 143(1). Case was selected for scrutiny. The assessee during the relevant year derived income from Investments. During the year under consideration, the assessee has increased its share capital from ₹ 3,02,09,000/- to ₹ 13,02,09,000/-. Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The A.O. after examining the issue concluded that the share capital, share premium received by the assessee are nothing but sham transaction to give legal colour to the unaccounted money of the assessee-company. Therefore, entire amount of ₹ 100 crores was added to the income of assessee under section 68 of the I.T. Act, 1961. 4. The A.O. noted that during the year assessee- company has earned dividend income of ₹ 590/-. The A.O. asked the assessee-company as to why the expenses be not disallowed under section 14A read with Rule 8D of the I.T. Rules. The A.O. after considering the explanation of assessee-company, disallowed ₹ 22,74,040/- under section 14A read with Rule 8D of the I.T. Rules, 1962. 5. The assessee-company challenged both the additions before the Ld. CIT(A). The written submissions of the assessee-company is reproduced in the appellate order in which the assessee-company briefly explained that assessee - company filed documentary evidences of each of the shareholder and despite finding no defect of these evidences, the A.O. made addition for accommodation entries under section 68 of the I.T. Act. The documents filed before A.O. were copies o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Y. 2008-2009, bank statement, confirmation of the account and their assessment orders under section 143(3) of the I.T. Act. 7. The assessee-company in the rejoinder reiterated the submissions already made above and submitted that initial burden upon assessee-company to prove genuine credits have been discharged. 8. Ld. CIT(A) considering the material on record noted that the shareholders have shown nominal profit which indicates the non-genuine activity of these companies. The Directors of the Companies are frequently changed. The persons who appeared before A.O. are the new Directors and some of them were not having any share in any of the companies. The Inspector reported that these companies are not operating from the place and are managed by Shri S.K. Jain, Director of the assessee-company. The bank accounts have been opened by the investment companies without introduction and no details have been submitted for charging of the premium. Though the assessee-company done the documentation by filing the documentary evidences, but failed to prove genuineness of the companies on the transactions. The Ld. CIT(A) relied upon the decision of the Hon ble Delhi High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the total income of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the total income_ of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 21. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition shall abate . Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that where assessment or reassessment proceedings are pending completion when the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee_s total income and such orders are subsisting at the time when the search or the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned loan given to Mohini Sharma, the Tribunal has stated that it has analyzed the subject document carefully, recovered from search suggesting that the document was recovered during the search from the assessee. The Tribunal has even proceeded to delete the addition of ₹ 1,50,000/- as well as the notional interest on merits, holding that the document was unsigned, that Mohini Sharma was not examined by the income tax authorities and there was no corroboration of the unsigned document. If it is not in dispute that the document was found in the course of the search of the assessee, then Section 153A is triggered. Once the Section is triggered, it appears mandatory for the Assessing Officer to issue notices under Section 153A calling upon the assessee to file returns for the six assessment years prior to the year in which the search took place. There are contradictions in the order of the Tribunal. We are unable to appreciate how the Tribunal can say in Para 9.6 that no material was found during the search and at the same time in Paragraph 10 deal with the merits of the additions based on the document recovered during the search which allegedly contain the loan transaction wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Gurjargravures (P.) Ltd., (1978) 111 ITR 1 (SC). 13. We have considered the rival submissions and perused the material available on record. In this case, the A.O. passed the impugned assessment order under section 143(3) of the I.T. Act, 1961, for the A.Y. 2008-2009 on dated 31.12.2010 and made the above two additions which were under challenge before the Tribunal. The A.O. passed another assessment order in the case of same assessee-company for the A.Y. 2008-2009 under appeal under section 153C/153A of the I.T. Act dated 28.03.2013, copy of the same is filed on record. In this order, A.O. has mentioned that search and seizure operation was carried-out at various premises of Shri S.K. Jain group of cases and associated persons on 14.09.2010. During the course of search and seizure operation at various premises of Shri S.K. Jain group of cases, many books of account and documents belonging to the assessee company were found and seized and A.O. was satisfied to proceed under section 153C of the I.T. Act against the assessee-company. The A.O. accordingly issued notice under section 153C/153A of the I.T. Act on 26.02.2013 and directed the assessee-company to file return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended raising only a legal argument without reference to any disputed questions of fact: Since there were no additional evidence required for the decision on the new ground raised by the assessee and such question arose from the facts which were already on the record of the assessment proceedings and since a decision upon the new ground raised by the assessee would only help in determining the assessee's correct tax liability, the matter could be remanded to the Tribunal for adjudicating upon the additional ground on its merits. [Matter remanded) . 15. The Hon ble Delhi High Court in the case of Pr. CIT vs. Neelkant Concast (P.) Ltd., (2016) 387 ITR 568 (Del.) considering the decision of Hon ble Supreme Court in the case of National Thermal Power Co. Ltd., vs. CIT (supra) held as under : The powers of the Tribunal are wide enough to consider a point which may not have been urged before the Commissioner (Appeals) as long as the question requires to be examined in the interest of justice. Held accordingly, that the Tribunal had not exceeded its jurisdiction in examining the question whether the Assessing Officer was justified in extending the time for the aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 133(6) was not confronted to the assessee-company. The report of the Inspector was also not confronted to the assessee-company. The bank details called for under section 133(6) were also not confronted to the assessee-company. Report of the Inspector is with reference to five investment companies only. All transactions are carried-out through banking channel. The investors are assessed to tax. There is no evidence on record that the amount in question came from the coffers of the assessee-company. No cash was found deposited in the bank account of the investors. Director of the assessee-company in reference to question 12 explained justification and reasons for taking premium on allotment of shares. Directors were examined at the remand proceedings. But copies of their statements have not been provided to assessee-company. Remand report is not reliable. A.O. should not see profit of the investor company, but should see net worth of the investor company. No link of the assessee- company with investor company has been established. All the information has been provided to the Stock Exchange in which no objections have been raised. He has relied upon several decisions in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings supporting the claim of assessee-company have not been provided to the assessee- company. They have also produced documentary evidences before A.O. in support of the explanation which have not been discussed in detail in the impugned order. Whatever material is collected in the remand proceedings have not been provided to the assessee-company or confronted for proper explanation. Therefore, such documents shall have to be provided to the assessee-company. It is well settled law that the authorities below should not see profit of the investors, but shall have to see their worth in making investments. All these facts would show that authorities below have failed to record any specific finding of fact against the assessee-company based on the evidence and material available on record. Therefore, in such circumstances, when entire evidence on record have not been discussed by the authorities below, it would require reconsideration at the level of the A.O. More particularly, when we have admitted the additional ground which is legal in nature, therefore, the entire matter shall have to be dealt with by the authorities below in accordance with law based on the evidence on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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