TMI Blog2019 (1) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... of proceeding u/s 153A are not valid. Therefore, the legal ground raised by the assessee stands dismissed. Coming to the merit of the case, it is an admitted fact that in the order passed u/s 147/143(3) on 31st December, 2009, the Assessing Officer had examined the issue of share premium and share application money. On the basis of various details filed by the assessee as required by the Assessing Officer, no addition was made and the issue of share premium was accepted without making any addition. When the assessee during the course of reassessment proceedings had filed the requisite details such as the copies of share applications, bank statements including details of allotment, premium charge, etc., and nothing adverse was found during the course of search proceedings and considering the fact that nothing adverse during post search inquiries was found to negate the documents already filed at the time of the reassessment proceedings, the present Assessing Officer, on the same set of material cannot take a different view than the view already taken by his predecessor at the time of original assessment merely because a search has taken place. Addition made by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the working and material relied on. In absence of any compliance to the statutory notices issued by the Assessing Officer from time to time to prove the identity, credit worthiness and capacity of the share applicants and genuineness of the transactions, the Assessing Officer invoked the provisions of section 68 of the Act and relying on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Nova Promotors Finlease (P) Ltd. (2012) 18 taxmann.com 217 (Del) , made an addition of ₹ 17,42,50,000/- to the total income of the assessee. 4. Before the CIT(A), the assessee made elaborate submissions. It was submitted that the issues for increase in share capital were examined in the original assessment for assessment year 2008-09 and no adverse finding was given by the Assessing Officer in the order passed u/s 143(3). It was submitted that on the date of search, assessment for assessment year 2008-09 was not pending and no incriminating document relating to the issue of increase of share premium was found or seized during the search. The assessee submitted that the details which were called for by the Assessing Officer were also submitted by the assessee dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to ₹ 5,48,50,000/- was seized from the bank account of the assessee. Needless to say, this fact was not available at the time of the original assessment. Thus, the fact that the original assessment has abated will not make any difference because incriminating material was indeed found in the form of FDRs in this case. In the judgment given by the ITAT Mumbai, the Hon ble ITAT had remarked that assessment u/s 153A can be made on the basis of undisclosed income or property discovered in the course of search. 4.6 From a careful study of the written submission made by the AR, it is seen that the appellant had not been able to answer the queries raised by the AO in the assessment order. The basic question which is to be answered here is - why would any prudent business establishment invest in the appellant company by paying heavy premium? It is seen from record that the assessee company has issued equity shares of ₹ 87,12,500/- on a premium of ₹ 16,55,37,500/- during the year under consideration. As mentioned above, the appellant company did not have any net worth. In this situation it seems highly unlikely that the shares of company would command a premium of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de under section 153A of the I.T. Act, in the absence of any incriminating material, which was found and seized during the course of search under section 132 of the I.T. Act, 1961. 4. The appellant craves leave to add, alter, amend, raise or delete any or all grounds of appeal. 7. The ld. counsel for the assessee, referring to the copy of the Panchnaama dated 4th December, 2010, copy of which is placed at pages 3-5 of the paper book, submitted that only the bank account of the assessee was searched and no search at the business premises of the assessee has taken place. Referring to the assessment order passed u/s 153A/143(3) of the IT Act, he submitted that the Assessing Officer made an addition on account of share application money u/s 68 of the IT Act amounting to ₹ 17,42,50,000/- and no addition was made on account of such bank deposit. He submitted that the original assessment was completed u/s 147/143(3) and no incriminating material was found during the course of search. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla, reported in 380 ITR 573 (Del) , he submitted that the Hon'ble High Court in the said deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit worthiness of the share applicants and the genuineness of the transaction and the Assessing Officer, after considering the submissions made by the assessee has accepted such share application and share premium as explained, therefore, in absence of any contrary material in the possession of the Assessing Officer, he cannot take a different view and put the assessee to a further test of producing the share applicants after a gap of so many years. He submitted that although these details were available in the assessment records of the assessee, the Assessing Officer in the order passed by him has not at all considered the same. Even though this was brought to the notice of the CIT(A), he has also not considered the argument of the assessee that all details were available in the assessment records since these details were filed during the course of original assessment proceedings. He accordingly submitted that when the fixed deposits seized during the course of search formed part of the regular books of account and, therefore, could not be construed as incriminating material and since no other incriminating material was found during the course of search, therefore, no addition ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following decisions:- i) CIT vs. Kabul chawla (2016) 380 ITR 573; ii) CIT vs. Continental Warehousing Corpn. (Nhava Sheva) Ltd. (2015) 374 ITR 645 iii) Principal CIT vs. Kurele Paper Mills (P) Ltd. (2016) 380 ITR 571 (Del) iv) CIT vs. Lancy Constructions (2016) 383 ITR 168; v) CIT vs. ST. Francies Clay D cor Tiles (2016) 240 Taxman 168; vi) CIT v. Promy Kuriakose (2016) 386 ITR 597 (Ker.) 11.1 He also relied on the following decisions:- i) CIT vs MAF Academy (P) Ltd., 361 ITR 258; ii) CIT vs. Navodaya Castle Pvt. Ltd. (2014) 367 ITR 306 (Del); iii) Konark Structural Engineering (P) Ltd. vs. DCIT (2018) 90 taxmann.com 56 (Bom); iv) DRB Exports (P) Ltd. vs. CIT (2018) 93 taxmann.com 490 (Cal); v) Prem Castings (P) Ltd. vs. CIT (2017) 88 taxmann.com 189 (All); vi) CIT vs. Nipun Builders Developers (P) Ltd. 30 taxmann.com 292; vii) CIT vs. Nova Promoters Finlease (P) Ltd. 18 taxmann.com 217; viii) CIT vs. Ultra Modern Exports (P) Ltd. 40 taxmann.com 458; ix) CIT vs. Frostair (P) Ltd. 26 taxmann.com 11; x) CIT vs. N.R. Portfolio Pvt. Ltd. (2014) 42 taxmann.com 339; xi) CIT vs. Empire Builtech (P) Ltd. 366 ITR 110; xii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed assessment was not justified in the absence of incriminating material and the SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court on the question of law raised by the Revenue. He submitted that although the dismissal of SLP may not amount to laying down of a law, but, the fact remains that the Hon'ble Supreme Court did not find any infirmity in the view taken by the Delhi High Court that in the absence of incriminating material the concluded assessment cannot be reopened u/s 153A. 13. We have considered the rival arguments made by both the sides and perused the material available on record. We find the original assessment in the instant case was completed u/s 147/143(3) of the IT Act on 31st December, 2009 determining the total income at ₹ 73,510/-. A search u/s 132 of the IT Act was conducted in the case of bank account of the assessee on 12.11.2010. We find during the said search, an amount of ₹ 5,48,50,000/- was found in the bank account of the assessee which was seized. Since the assessee did not file the requisite details as called for by the Assessing Officer to substantiate the identity and credit worthiness of the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are premium and share application money. On the basis of various details filed by the assessee as required by the Assessing Officer, no addition was made and the issue of share premium was accepted without making any addition. We find, the Assessing Officer at para 3 of the assessment order passed u/s 147/143(3) has mentioned as under:- During the relevant previous year the assessee earned income from interest on loans and advances granted by it as an NBFC and profit on sale of mutual funds. Apart from that during the previous year the assessee s authorized share capital increased by ₹ 88 lakhs and issued share capital liability increased by ₹ 17.42 Crores (including premium). 15. During the course of search, no incriminating documents were found so as to prove that the documents filed during the course of original assessment proceedings are false or untrue. A perusal of the Panchnama appearing on pages 3-5 of the paper book shows that no search was conducted at the business premises of the assessee and the warrant was issued only in the name of Bank account of the assessee maintained with Oriental Bank of Commerce from where the fixed deposits were se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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