TMI Blog2022 (9) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... the allegation of the Assessing Officer that no notices under Section 133(6) of the Act were received by the investors, is irrelevant as the said parties had filed detailed replies in response to the Section 133(6) notices along with the requisite details as required by the Assessing Officer. Upon perusal of the Table reproduced hereinabove, which shows the networth of the investor companies and the investment made in the share capital, this Court is in agreement with the contention of learned senior counsel for the Respondents-Assessees that the investor companies had sufficient networth to make investment in the Assessee s group of companies. Non examination of witness - As in the present cases, as Assessee were denied the opportunity to cross-examine Mr.Rajesh Agarwal, despite a specific request, this Court is in agreement with the ITAT that his statement needs to be excluded and cannot be relied upon as a piece of evidence to make any addition. In fact the Supreme Court in the case of M/s Andaman Timber Industries [ 2015 (10) TMI 442 - SUPREME COURT] held that not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciate that the additions were based on a statement made by one Sh. Rajesh Agarwal which has live link with the documents seized during the course of search. 4. He also contends that as the notices issued under Section 133(6) of the Income Tax Act, 1961 ( the Act ) to the investor companies were returned back unserved, they were not genuine business entities and they did not have sufficient networth to make investment. 5. Per contra, learned senior counsel for the Respondents/Assessees, who appears on advance notice, states that only photocopies of the share certificates were found during search and not the original share certificates, as alleged by learned counsel for the Appellant. In support of his contention, he relies upon the following portion of the impugned order passed by the ITAT:- iii) Share Certificates found during the course of search, with regards to allotment of shares by Minda group of companies to various companies, noted by AO at page 18 of his order. We have gone through the orders so passed by AO, CIT (A) and also the remand report so furnished by AO during the course of appellant proceedings and notice that these share certificates pertained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merit, we would first like to decide the legal ground raised by the assessee challenging the validity of the assumption of jurisdiction u/s 153A in absence of any incriminating material found during the course of search when the assessment was not pending. As mentioned earlier, the original return was filed on 30th September, 2009 declaring income at Rs.10,27,91,857/-. The assessment was completed u/s 143(3) determining the total income at Rs.10,27,91,857/-. This assessment was rectified u/s 154 of the IT Act determining the income at Rs.7,50,21,860/-. Thus, the assessment was completed and was not pending on the date of search. A perusal of the assessment order shows that the addition is not based on any incriminating material, but, based on post-search enquiries or statements recorded u/s 132(4) of the Act. The share certificates and counterfoils thereof found during the search, in our opinion, cannot be construed as incriminating in nature. 6. He further states that the statement of Mr.Rajesh Agarwal cannot be relied upon by the Appellant inasmuch as the Assessees were not given an opportunity to cross-examine Mr.Rajesh Agarwal despite a request being made by the Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apartments Pvt. Ltd. 1,58,89,000/- 14,00,000/- M/s Festino Agro Pvt. Ltd. 3,89,58,000/- 24,00,000/- 8. It is settled law that where the assessment of the Respondnets/Assessees has attained finality prior to the date of search and no incriminating documents/materials have been found and seized at the time of search, no additions can be made under Section 153A of the Act, as in that eventuality, the cases of the Respondnets-Assessees would be of non-abated assessment. (See: CIT vs Kabul Chawla 380 ITR 573 (Del), Principal Commissioner of Income Tax vs. Bhadani Financiers Pvt. Ltd., 2021 SCC OnLine Del 4430 and PCIT vs. Meeta Gutgutia, (2017) 82 taxmann.com 287 Del) 9. This Court finds that though the appeal in APAR Industries Ltd. is pending adjudication before the Apex Court, yet there is no stay order in favour of the revenue. Consequently, in view of the judgments of the Supreme Court in Kunhayammed and Others Vs. State of Kerala and Another, (2000) 6 SCC 359 and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Association CSI Cinod Secretariat, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the presence of Mr. Tarun Goyal, whom the Assessees clearly stated that they did not know, could not have been shifted to the Assessees. The onus was on the Revenue to ensure his presence. Apart from the fact that Mr. Tarun Goyal has retracted his statement, the fact that he was not produced for cross- examination is sufficient to discard his statement. 38. under Fifthly, statements recorded Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjeev Aggarwal (supra). Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. Dayawanti Gupta (supra) where the admission by the Assessees themselves on critical aspects, of failure to maintain accounts and admission that the seized documents reflected transactions of unaccounted sales and purchases, is nonexistent in the present case. In the said case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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