9911796707
TMI Blog2021 (7) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... The following grounds of appeal raised by the revenue:- " 1. On the facts and in the circumstances of the case, the CIT (A) has erred in deleting addition of Rs. 5,00,00,000/- made u/s 68 of the IT Act on account of unexplained share capital and premium; 2. On the facts and in the circumstances of the case and in law, the CIT (A) has erred in holding that on the prevailing facts of the case the onus on the part of the assessee u/s 68 of the stands discharged. 3. The order of the CIT (A) is erroneous and is not tenable on facts and in law." 3. Brief facts of the case shows that search u/s 132 of the Act took place in case of M/s. Akruti Hotels Pvt Ltd on 22.11.2011. During the course of search, certain documents were seized. The satisfaction in the case of searched person was recorded stating that seized documents belong to the assessee company. Consequently, The Ld Assistant Commissioner of Income Tax, Central Circle-23, New Delhi, [Ld AO of the assessee] recorded a satisfaction for initiating action u/s 153C of the Act and consequently a notice was issued on 20.09.2013 for AY 2009-10. The appellant had filed its original return of income u/s 139 (1) of the income tax act on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above company and bank statement for verification. Therefore, the assessee has failed to discharge its onus. Thereafter, he discussed modus operandi of accommodation entry from the Kolkata companies and proceeded to make an addition of Rs. 5 crores u/s 68 of the Act. On 30.03.2014 assessment order u/s 153C read with section 153A of the Act was passed making the above addition of Rs. 5 crores and determining the total income of Rs. 5,00,00,740/-. 6. The assessee preferred an appeal before the ld CIT(A) raising the first jurisdictional issue that the order u/s 153A of the Act is invalid as satisfaction note u/s 153C is not recorded in file of the person searched but in the file of assessee. This argument was rejected. The second argument was that in case of concluded assessment no addition could be made in the hands of the assessee unless incriminating material was found during the course of search. The assessee referred to various seized documents. It was stated that those documents relates to the shareholder of the assessee company and even otherwise they are not incriminating in nature. The ld CIT(A) noted that seized documents relates to share holders of the appellant compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in nature and therefore, no addition can be made in the hands of the assessee. He submitted that the impugned assessment year 2009-10 is already concluded at the time of search on 22.11.2011 and further at the time of recording of the satisfaction by the ld AO of the assessee. Thus, he stated that the addition made in the hands of the assessee is not based any incriminating material found during the course of search. He submitted the timelines as a. For AY Date of filing of return is 1.10.2009, b. date by which notices u/s 143(2) could have been issued is 30/09/2010 and c. Date of search is 22/11/2011. Thus, on the date of search, this assessment for AY 2009-10 in case of the assessee was a concluded assessment and is tinkered only if there is an incriminating material found during the course of search. He further referred to the decision of the Hon'ble Delhi High Court in CIT Vs. Anil Kumar Bhatia 2011 Taxman 453, the decision of the Hon'ble Supreme Court in CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC). He further relied upon the decision of the coordinate bench in ITA No. 288 and 287/Del/2015 for Assessment Year 2010-11 in the group company case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that these documents of share certificate etc were not found from the premises of the assessee. He further submitted that share certificate and share transfer form were found vide Page No. 49, 51 and 52 of Annexure A-11. As such, the share certificate, and share transfer form pertained to those shareholders. He further stated that the share certificate and names of the shareholders are part of the annual return as well as share capital issued by the assessee. They cannot be stated to be an incriminating document. He further relied upon the decision of the Hon'ble Delhi High Court in 86 Taxmann 84 in Pr. CIT Vs. Index Securities Pvt. Ltd wherein, even the trial balance and balance sheet of the assessee could also not to be said to be incriminating. Therefore, he held that mere availability of the share certificate of the shareholders of the assessee from the premises of the third party could not be held to be pertaining to assessee and much less incriminating in nature. 13. On the merits of the case, he relied on the order of the ld CIT (A) holding that assessee has discharged its onus and therefore, the addition has rightly been deleted by him. 14. We have carefully co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te in the name of Response Overseas Pvt. Ltd. Share No. 70001-85000, Certificate No. 00000009 51 ^ Share Transfer Form - 70001 - 85000, Certificate No. 0000009 49^ Share Certificate in the name of Raj Nand Hela, Share No: 05001 -09900, Certificate No: 00000015 51 1/ Share Transfer Form - 05001 - 09900, Certificate No: 00000015 16. It is established principle that in case of search the provision of section 153C of the Act could have been invoked prior to 01.06.2015 when AO is satisfied that money, bullion, jewellery or other valuable article or thing, seized or requisitioned pertains to a person other than the person searched, then such documents or asset shall be handed over to the AO having jurisdiction over such person, then such AO shall proceed, if he is satisfied that such documents or assets have bearing on the determination of total income of such other person, shall assess him in accordance with provision of section 153A of the Act. Therefore, the first threshold to be crossed by the ld AO by holding that the share certificates along with share Transfer forms pertain to the assessee. The second threshold that needs to be crossed at the time of making any adjustment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her materials such as blank receipts of consideration received of those shares as well as sale note issued by the shareholders are found togetherwith. Therefore, in this case we do not agree with the contentions of the revenue that share certificates in the name of Response Overseas Private Limited and Raj Nand Hela along with the transfer forms pertains to the assessee company. 18. Now we come to the decision of the Hon'ble Delhi High Court in case of Anil Kumar Bhatia (supra). On careful consideration of para 23 it was categorically held by the Hon'ble High Court that "23. We are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We, therefore, express no opinion as to whether Section 153A can be invoked even in such a situation. That question is therefore left open." 19. Thus, the honourable high court was not concerned with the case where no incriminating material was found during search and therefore, it did not express any opinion as either section 153A can be invoked in such situation. Therefore, this decision does not referred to the situation where no incriminating documents are found during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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