TMI Blog2021 (1) TMI 1275X X X X Extracts X X X X X X X X Extracts X X X X ..... eddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) 20, (hereinafter the ld. CIT(A) ), passed u/s. 250 of the Income Tax Act, 1961 (the Act ), dt. 11/09/2019, for the Assessment Year 2012-13. 2. The assessee is a Non-Banking Financial Company under the name of M/s. Vikram Financial Services Ltd. and derived income from business during the impugned Assessment Year. It filed its original return of income for the Assessment Year 2012-13 on 27/09/2017, declaring total income of Rs.30,44,646/-. A search and seizure operation u/s 132 of the Act was conducted at the residence and business premises of the assessee group. Another survey operation u/s 133A of the Act was conducted on the issue of pre-arranged bogus Long Term Capital Gain and Short Term Capital Loss on 15/09/2015 at the office premises of Vikram Group. Subsequently, notice u/s 153A of the Act, was issued on 15/12/2014 and served upon the assessee on 19/12/2014 asking for correct return of its total income in respect of which it is assessable for the Assessment Year 2012-13. In response to the notice u/s 153A of the Act, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT vs. Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kol-Trib.) 4.1. On a query from the Bench, the ld. D/R could not point out any incriminating material found during the course of search, based on which, the additions in question were made. Nevertheless he relied on the order of the ld. CIT(A) and argued that there is no requirement of incriminating material found the course of search for making an addition in an assessment u/s 153A/143(3) of the Act. He relied on a finding of the Hon ble Kerala High Court for this proposition and argued that the order of the ld. CIT(A) be upheld. We will deal with this judgment later in our order. 5. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 6. The Hon ble Jurisdictional High Court in the case of Pr. CIT vs. Rashmi Infrastructure Pvt. Ltd. in ITAT 99 of 2019, G.A. No. 1211 of 2019 (Calcutta HC), judgment dt. 24/02/2020 has held as under:- The question is whether the assessee had unexplained cash credit in their books which could be charged to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in case referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd(Supra) in the light of CBDT's decision of not filing SLP in this case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on the similar issue in the case of Pr CIT vs Kurele Paper Mills Pvt. Ltd: SLP (C) No. 34554 of 2015 dt. 07.12.2015, I am of this view that in order to maintain judicial continuity on this issue and respectfully following the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (Supra), assessee's appeal on ground no 1 is allowed and as such I am not inclined to adjudicate appeal on ground no. 2 on merit. The tribunal is the final fact finding authority. A plausible adjudication on facts has been made. We cannot reopen the facts any more in this jurisdiction. No questions of law far less any substantial question of law is involved. 7. The Hon ble Calcutta High Court in the case of CIT vs. Veerprabhu Marketing Ltd. reported in [2016] 73 taxmann.com 149 (Calcutta), held as follows:- 5. He relied upon the following views expressed in paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. 9. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances. 10. We find no infirmity in the aforesaid act of the learned Tribunal. The appeal is, therefore, dismissed. 8. The Hon ble Calcutta High Court in the case of Principal Commissioner of Income Tax vs. M/s. Salasar Stock Broking Ltd. in G.A. No. 1929 of 2016, ITAT No. 264 of 2016, judgment dt. 24th August, 2016, under identical circumstances, followed the judgment in the case of CIT vs. Veerprabhu Marketing Ltd. (supra) and dismissed the appeal of the revenue. 9. This Bench of the Tribunal in the case of ACIT vs. Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kolkata-Trib.), h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 661/2008 [CIT vs. Veerprabhu Marketing Ltd.] wherein the following views were expressed - 'We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre- requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances.' In that view of the matter, we are unable to admit the appeal. The appeal is, therefore, dismissed.' 14. In his written and oral submissions, the ld. CIT, DR relied on several judgments of the Hon'ble High Courts justifying addition made in the order u/s 153A for the AY 2011-12 which on the date of search did not abate. After careful perusal of each judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order, AO was able to point out that any particular incriminating document or evidence found in the course of search on the basis of which the addition on account of unexplained investment could justifiably be made. We therefore find that the on the facts and the issue involved in the present appeal, the judgment of the Hon'ble Kerala High Court was not applicable. (B) In the case of Smt. Dayawanti Gupta v. CIT [2016] 75 taxmann.com 308/[2017] 245 Taxman 293/390 ITR 496 (Delhi), the additions were made on the basis of the admission made by the assessee's son u/s 132(4) with reference to incriminating material found in the course of search. Assessee's case before the Hon'ble Delhi High Court was that the statement admitting additional income was not given by her. She had categorically mentioned that she did not have her own source of income and that she was a proprietor of a concern only on paper. On these facts the Hon'ble High Court held that it was not in dispute that in course of search, incriminating material in relation to out of books turnover was found and with reference thereto the statement of the assessee's son was recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the block period. Although the Hon'ble Apex Court upheld the addition made, it also held that, 'It is a cardinal principle of law that in order to add any income in the block assessment, evidence of such must be found in the course of the search under Section 132 of the IT Act or in any proceedings simultaneously conducted in the premises of the assessee, relatives and/or persons who are connected with the assessee and are having transaction/dealings with such assessee.' Applying this principle, the Court held that since in the simultaneous proceedings conducted against connected parties, with whom the assessee had transactions, evidence was found regarding undeclared payments, the assessment of undisclosed income was justified. We however note that no proceedings were simultaneously conducted against the so-called entry operator Shri Anand Sharma nor any documentary evidence supporting assessee's transactions with any of the entry operators was found from the assessee's premises during the course of search. We therefore find that the facts of the present case were materially different from the facts before the Hon'ble Apex Court in the case of S. Ajit Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the Revenue never afforded the opportunity of his cross examination to the assessee. It was further observed that Mr. T had also subsequently retracted his statement. For the reasons aforesaid, the Hon'ble High Court held that the statement of Mr. T could not be considered to be incriminating evidence justifying the inference against the assessee in relation to unabated assessment. Applying the ratio laid down in said judgment to the facts of the present case, we find that the assessee's case is on a much better footing. In the first instance we note that no simultaneous search or survey proceedings were carried out against Mr. Anand Sharma when the second search was conducted against the assessee in March 2016. We further find that nowhere in the statements of so-called entry operators they had admitted of providing accommodation entries to the assessee during the relevant year. In fact we find that prior to the completion of assessment u/s 153A on 31-12-2017, the AO himself never personally examined any of the so-called entry operators nor was opportunity of cross examination afforded to the assessee though the addition was justified solely with reference to their so-c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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