TMI Blog2019 (1) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Commissioner of Income-tax(Appeals)-23, New Delhi {for short ld. CIT(A)}, revenue preferred the appeal whereas assessee preferred the Cross Objection challenging the assessment order. 2. Briefly stated facts relevant for the disposal of this appeal are that during search and seizure operation that were conducted on 04.08.2011 in the case of M/s SMC Power Generation Ltd, some incriminating papers were found which indicatedpurchase/sales of milk and milk products outside the books of account. Based on these documents, a director of the assessee company admitted undisclosed income of ₹ 93 lacs in his individual capacity. However, these transactions do not relate to the assessee company. In the present case, the earlier assessment for AY 2007-08 had been completed u/s 143(3) of the Income Tax Act, 1961 (for short hereinafter referred to as the Act ) wherein the source of share capital was examined by the revenue on the basis of evidence filed by the assessee and no adverse view had been taken. However, in the present proceedings u/s 153A of the Act, consequent to the search, for the reasons recorded in the assessment order, the revenue has treated the share pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew and that the assessee had discharged its primary onus of establishing the transaction not only once but twice and the conclusions reached by the learned AO in the present assessment to hold that the share premium unexplained does not have any basis. He, therefore, deleted the addition of share capital/premium. Specific finding of the learned CIT(A) is that while in para 4 of the assessment order, the addition proposed was only ₹ 29,70,00,000/-being the share premium received, the addition finally made was ₹ 30,00,00,000/- being the entire share capital which appears to be a mistake and the entry of ₹ 30 crores in the computation part has to be ignored. 6. In so far as the computation of eligible deduction u/s 80IA is concerned, learned CIT(A) held that each expense cannot be allocated to the unit enjoying concessional taxation; this is not mandated by law nor factually liable; that a director is director for the whole of the company and not only for its unit; that it is not necessary that services of the directors are essential to run the business of the eligible unit; that in multi unit companies a unit is managed by the local manager; and in any case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to dismiss the appeal of the revenue and to uphold the findings of the learned CIT(A). 11. We have gone through the record. There is no dispute that in the search that took place on 4.8.2011 in the case of M/s SMC Power Generation Corporation Ltd. belonging to the assessee group no incriminatory material qua the assessee qua the assessment order was found. Further, it is also an admitted fact that in the assessment proceedings u/s 143(3) vide paragraph 5, learned AO considered the aspect relating to the share capital and did not draw any adverse inference. For the Asstt. Year 2006-07 on similar facts, a coordinate bench of this Tribunal considered the plea of the assessee vide Cross Objection No.457/Del/2015 in the light of the decision of the Hon ble Apex court in the case of Kabul Chawla (supra) and recorded a finding that in the absence of any incriminatory material that was found during the search qua the assessee qua the assessment order does not open for the revenue to reopen the concluded assessments. With the said observations in ITA No.4798/Del/2015, a coordinate bench of this tribunal allowed the Cross Objection of the assessee and dismissed the appeal of the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank accounts and issued cheques against such cash deposits. Sh. Goyal further clarifies that cases, wherein the cheques issued were not preceded by cash deposits, were genuine business transactions. The same stand has been repeated in his answer to Q.9 by Sh. Goyal. In his reply to Q.10, Sh. Goyal states that he had submitted detailed list of accommodation entries relating to cash of ₹ 40 crore deposited in various bank accounts. In the entire statement of Sh. Goyal. nowhere name of the appellant company or the SMC / Moolchand / Madhusudan group or any related entity has been mentioned. It is seen from the record that the share capital / premium in the appellant company was subscribed by _M/s GeefceeFinance Ltd. (GFC) through its bank account with Kotak Mahindra Bank; Arya Samaj Road, Karol Bagh bearing no.6l732000004160; and not through its account with FIDFC Bank, Ofd. Rajinder Nagar as mentioned in the said statement of Sh. Goyal. It is further seen that there is no cash deposit preceding the cheques issued by GFC to the appellant from its said account with Kotak Mahindra Bank. There are indeed transfer deposits from M/s Tejasvi, M/s Kartik and M/s Venus, possibly other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,442.98 6,069.33 9,397.93 2006 9,422.49 14,035.30 8,799.01 13,786.91 2007 13,827.77 20,498.1 1 12,316.10 20,286.99 2008 20,325.27 21,206.77 7,697.39 9,647.31 2009 9,720.55 17,530.94 8,047.17 17,464.81 2010 17,473.45 21,108.64 15,651.99 20,509.09 201 1 20,621.61 20,664.80 15,135.86 15,454.92 2012 15,534.67 19,612.18 15,358.02 19,426.71 2013 19,513.45 21,483.74 17,448.71 21,170.68 2014 21,222.19 28,822.37 19,963.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding share premium, raised. We have also seen that the periods in which the capital was raised were when the Indian economy and its stock markets were doing well. Therefore, even if the appellant group and its companies stood to benefit, by way of buy-back at par of its shares issued at premium, it cannot be concluded, in the absence of any evidence, that the capital so raised was unexplained. Having searched the appellant and not found evidence to support its claims, the addition made by the revenue is founded on mere suspicion and lacks any credible basis. I hold accordingly. 3.7 It is relevant to note that the appellant group, including the appellant company, was earlier subjected to search and seizure on 06.03.2006 and assessment was completed in the case of this appellant vide order dated u/s 143(3) wherein the returned income of ₹ 4,05,332/- was accepted. During that search undisclosed income of ₹ 8,00,00,000/- was admitted in various hands (individuals, HUFs directors / 'shareholders of group companies). No undisclosed income was declared or assessed in respect of the appellant company, including any share capital. Accordingly, I also hold that as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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