TMI Blog2023 (2) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings before us had neither placed on record any such material/evidence which would disprove or dislodge the aforesaid observation of the CIT(Appeals), nor has brought to our notice any perversity in the view so arrived at by him. We, thus, finding no justifiable reason to dislodge the well-reasoned observations of the CIT(Appeals), approve the same. Thus, the Grounds of appeal No.(s) 1, 2 and 8 raised by the revenue being devoid and bereft of any merit are dismissed. Addition u/s.41(1)(a) - CIT-A deleted addition - HELD THAT:- We are unable to persuade ourselves to concur with the view taken by the A.O that the aforesaid liability in question was to be held as having ceased u/s.41(1)(a) of the Act. As the assessee had discharged the majority of its outstanding liability towards the aforesaid contractor, viz. M/s. Pragmatic Builders Pvt. Ltd. during F.Y.2012-13 to F.Y.2015-16 and an amount only was outstanding as payable in the running account of the aforesaid party on 18.05.2016, therefore, in our considered view the CIT(Appeals) had rightly observed that there was no justification for the A.O to have dubbed the liability in question as a ceased liability u/s.41(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Addition u/s 68 - assessee company had claimed to have received cash from 5 different parties as advance towards sale of shops - claim of the assessee that as the aforesaid sale agreement was cancelled, therefore, the cash advance was returned back to the aforementioned parties - aforesaid claim of the assessee did not find favor with the A.O for the reason that both the agreements i.e sale agreement and the cancellation agreement were executed on plain paper - CIT-A deleted addition - HELD THAT:- As observed by the CIT(Appeals), and, rightly so, now when the assessee while discharging the initial onus that was cast upon it as regards proving the nature and source of the cash deposits in its books of accounts, had in support of his claim filed with the A.O copies of agreements, viz. sale agreement/cancellation agreement, therefore, there was no justification for the A.O in rejecting the same without placing on record any material disproving the authenticity of the aforesaid claim. Our aforesaid view is supported by the judgment of the Hon ble High Court of Chhattisgarh in the case of Pawan Kumar Agrawal, [ 2017 (4) TMI 1602 - CHHATTISGARH HIGH COURT] In fact, we are in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S/Shri Sumit Nema, Sr. Advocate a/b. Amit M. Jain, Gagan Tiwari, Advocates Shri Bikram Jain, CA. For the Revenue : Shri Debashish Lahiri, CIT-DR ORDER PER RAVISH SOOD, JM: The captioned appeals filed by the revenue are directed against the respective orders passed by the CIT(Appeals)-3, Bhopal, dated 31.01.2022 28.01.2022, which in turn arises from the consolidated order passed by the A.O under Section 153A r.w.s 143(3) of the Income-tax Act, 1961 (in short the Act ), dated 26.12.2018 for assessment years 2012-13 to 2015-16 AND under Section 143(3), dated 31.03.2015 and 28.03.2016 for assessment year(s) 2012-13 and 2013-14, respectively (which are subsumed in the aforesaid subsequent orders passed u/s 153A r.w.s 143(3) of the Act, dated 26.12.2018). As the issues involved in the captioned appeals are inextricably interlinked or in fact interwoven, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. We shall first take up the appeal filed by the revenue in IT(SS)A No.02/RPR/2022 for assessment year 2012-13, wherein the revenue has assailed the impugned order on the following grounds of appeal: 1 Whether o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law, the Ld. CIT(A) is justified in ignoring the dictum of law pronounced in case of Bannalal Jat Construction (P) Ltd vs ACIT 106 Taxmann 128(SC)/2019 264 Taxmann 5(SC) and in ignoring that the statement recorded u/s.131 of the act has evidentiary value and the burden lays on the person who made the statement, to provide a reasoned explanation for retracting from the statement, specifically, when he himself declared in his own handwriting that the statement is made in sound state of mind and without coercion. Therefore, Ld. CIT(A) is not justified in ignoring this fact and in relying solely on assessee's retraction. 8. Whether on the facts and in law, the Ld. CIT(A) justified in holding that the AO has no locus standi to assume that the share application money infused in the appellant company is not genuine and it is not justified to held the investor companies as dummy entities and the investments made by these companies are non-genuine even the directors of the share applicant companies have accepted in his statements that they have provided accommodation entries to the company in lieu of commission. 9. Whether on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share application money. 5. On a perusal of the record, it was observed by the A.O that laundering of unaccounted income in the garb of share application money through Kolkata based shell companies was the main issue that had formed the very basis for search and seizure action conducted on Lal Ganga group. It was observed by the A.O that the assessee company, viz. M/s Lal Ganga Builder Pvt. Ltd. had introduced in its books of accounts its unaccounted income aggregating to Rs.25.37 crore by giving the same a color as that of share capital and share premium received from various Kolkata based companies, as under: F.Y. No of shares allotted Face value (Rs.) Premium (Rs.) Total Amount (Rs. 2011-12 2,64,750 10 390 10,59,00,000 2012-13 13,12,500 10 6 2,10,00,000 2013-14 1,26,80,000 10 0 12,68,00,000 25,37,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. 54, Munshi Saddaruddin Lane, 2 nd floor, Kolkata 8000 15. Niram Vintrade Pvt. Ltd. 54, Munshi Saddaruddin Lane, 2 nd floor, Kolkata 12500 16. Origin Vinimay Pvt. Ltd. 11, Bysack Street, Kolkata-07 1500 17. Parrot Dealers Pvt. Ltd. 54, Munshi Saddaruddin Lane, 2 nd floor, Kolkata 1250 18. Plazma Tradecom Pvt. Ltd. 11, Bysack Street, Kolkata-07 6250 19. Queen Agency Pvt. Ltd. 54, Munshi Saddaruddin Lane, 2 nd floor, Kolkata 10000 20. Ratnagiri Vanijya Pvt. Ltd. 4, Gensh Chandra Avenue, Kolkata 5000 21. Risewell Vintrade Pvt. Ltd. 91, Amalangshu Sen Road, 2nd Floor,Kolkata 2500 22. Roseberry Vintrade Pvt. Ltd. 54, Munshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Extent Vinimay Pvt. Ltd. 63, Radha Bazar Street, Kolkata-01 12680000 126800000 On an analysis of the returns of income of some of the aforementioned paper companies which had claimed to have invested towards share capital/premium with the assessee company, it was observed by the A.O that the said investors clearly lacked creditworthiness which would justify the investments that were claimed by them to have been made with the assessee company, as under: S.No. Name of bogus shareholders PAN Income shown during F.Yr. 2009-10 (Rs.) Income shown during F.Yr. 2010-11 (Rs.) Income shown during F.Yr. 2011-12 (Rs.) Income shown during F.Yr. 2012-13 (Rs.) Income shown during F.Yr. 2013-14 Income shown during F.Yr. 2014-15 Income shown during F.Yr. 2015-16 1. Exten Vinimay Pvt. Ltd. AACCE4578J 13828 8568 12385 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y back to its pocket. 6. Adverting to the genuineness of the investor companies, it was observed by the A.O that the majority of such Kolkata based companies were not found at the addresses which were given in their returns filed with the Registrar of Companies (RoC). Elaborating further, it was observed by the A.O that on the basis of discreet enquiries that were carried out by the Inspectors of Income Tax, Kolkata at the behest of the DDIT (Inv.), Kolkata, it stood revealed, viz. (i) that the addresses of the investor companies as were provided by the assessee were either incorrect or were those of some chartered accountants or some other companies; and (ii) there was neither any sign board or post box etc. of the companies nor was anyone aware about them at their respective addresses. In sum and substance, it was reported by the Inspectors of Income Tax that the investor companies were not found existing at their respective addresses. Considering the aforesaid facts, it was observed by the A.O that the investor companies were bogus/sham companies which were merely existing on paper and engaged in the business of providing accommodation entries. In order to verify the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions under consideration. In compliance all the aforementioned investor companies furnished their replies with the A.O. Further, the A.O issued summons u/s.131 of the Act to the assessee company directing it to produce documentary evidences in support of its claim of having received genuine share capital/premium from the aforementioned investor companies, viz. (i) name, address and PAN of the investors ; (ii) amounts received from the investor companies; (iii) details of the bank accounts a/w. addresses of the respective branches in which amounts were credited; and (iv) extract of ledger account a/w. share capital/premium received for the period F.Y.2010-11 to F.Y 2016-17. Also, the A.O called for similar details as regards the loans/advances which the assessee company had claimed to have received during the aforesaid period. As the assessee failed to effectively comply to the summons issued u/s.131 of the Act dated 29.10.2018, therefore, the A.O proceeded with the enquiries and downloaded the annual reports of the investor companies. On a perusal of the details gathered by the A.O from the downloaded extracts of the annual reports of the investor companies, it was observed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of the search proceedings, therefore, as per the clear mandate of law no addition could be made in its hands. However, the aforesaid claim of the assessee did not find favour with the A.O. The A.O drawing support from the judgment of the Hon ble High Court of Delhi in the case of Filatex India Pvt. Ltd. Vs. CIT-(IV), 2014 (8) TMI 387 and that of the Hon ble High Court of Allahabad in the case of CIT Vs. Sri Raj Kumar Arora (2014) 367 ITR 517 (Allahabad) was of the view that the additions in the course of proceedings u/s.153A of the Act could not be restricted or limited to the incriminating seized material even though an assessment had earlier been framed u/s.143(3) of the Act. In sum and substance, the A.O was of the view that even in a case of an unabated assessment addition could be made despite absence of any incriminating material found and seized during the course of search proceedings. Apart from that, the A.O was of the view that the statement of Shri Ashok Jain, director of the assessee company recorded u/s.132(4) of the Act in itself was to be construed as an evidence which would justify the additions made while framing of the assessment u/s.153A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure, it was observed by the A.O that the said statement was recorded in presence of two independent witnesses and there was nothing on record which would support the correctness of the aforesaid allegation as was levelled by the assessee. On the contrary, it was observed by the A.O that the statement of Shri Ashok Jain (supra) recorded u/s.132(4) r.w.s. 110 of the Evidence Act, 1872 carried substantial evidentiary value. 10. Controverting the claim of the assessee that it had by placing on record supporting evidence, viz. copies of returns of income, PAN nos., audited financial statements, bank statements, memorandum of association, articles of association and confirmations of the investor companies had duly discharged the onus that was cast upon it u/s.68 of the Act as regards proving the authenticity of its claim of having received genuine share capital/ premium from the said companies, the A.O was of the view that the assessee had adopted a colourable device to camouflage the real transactions. Adverting to the provisions of Section 68 of the Act, it was observed by the A.O that the amendment that was therein made available by way of insertion of a proviso vide the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed while giving effect to the order passed by the Pr. Commissioner of Income Tax u/s. 263 of the Act had carried out detailed enquiry about the authenticity of the share capital/premium of Rs.17.69 crore (supra) that was raised by the aforementioned investor company, viz. M/s. Extent Vinimay Pvt. Ltd., and had after collecting the requisite information from its share subscribers and summoning the director(s) u/s.131 of the Act, had vide his order dated 20.12.2016 held the aforesaid transactions to be genuine. On the basis of the aforesaid facts, it was claim of the assessee that now when the respective investments towards share capital/premium and loans received by the assessee company from M/s. Extent Vinimay Pvt. Ltd. were sourced from the realisation of its investments, which in turn were funded out of its duly explained share capital of Rs.17.69 crore (supra), therefore, the identity, creditworthiness and genuineness of the transaction of having received the aforementioned sums from the said investor was proved beyond doubt. However, the aforesaid claim of the assessee did not find favour with the A.O, who was of the view that though the assessment in the case of the investor c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me information was provided in the replies filed by the investor companies. Considering the aforesaid replies filed by the investor companies, it was observed by the A.O that the same were well scripted with an active involvement of the assessee company. It was observed by the A.O that invariably the investor companies before making their respective investments were in receipt of equivalent amounts in their bank accounts. Also, it was observed by the A.O that in a case where the amount in excess of the corresponding investment was received by the investor company in its bank account, then, the remaining amount would be routed to some other beneficiary company. It was observed by the A.O that after the aforesaid well scripted investment transaction no balance would be left in the bank account of the investor company. Further, it was observed by the A.O that the nature of transactions in the bank account did not reveal that any business was being carried out by the investor company. On a whole, it was observed by the A.O that the bank accounts of the investor companies revealed the characteristics of a paper/shell company. It was further observed by the A.O that neither of the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section Return income Addition Para Discussed Assessed income Round off 2011-12 153A/143(3) 46,38,460/- NA NA 46,38,460/- 46,38,460/- 2012-13 153A/143(3) 86,23,200/- 10,59,00,000/- +30,000/- +1,64,71,430/- 5 to 9 13,10,24,630/- 13,10,24,630/- 2013-14 153A/143(3) 32,46,730/- 2,10,00,000/- +49,00,000/- +10,68,271/- +76,280/- +46,340/- 5 to 9 3,03,37,621/- 3,03,37,620/- 2014-15 153A/143(3) 45,71,220/- 12,68,00,000/- 5 to 9 13,13,71,220/ 13,13,71,220/- 2015-16 153A/143(3) 79,46,000/- 2,03,00,000/- 10 2,82,46,000/- 2,82,46,000/- 14. Aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved by the CIT(Appeals) that he had in reply to Question No.43 of his statement recorded u/s.132(4) of the Act on specifically being queried about the aforesaid seized loose paper (Page 78 - LPS-8), had stated that the same was a ledger account of share capital for the year under consideration and other details of share capital that were received over the period, i.e., F.Y.2012-13 to F.Y.2015-16. Considering the fact that the transactions mentioned in the aforesaid ledger account were duly recorded in the books of account of the assessee company, the CIT(Appeals) was of the view that the same being a part of the books of account of the assessee could not be held to be an incriminating document. The CIT(Appeals) on the basis of his aforesaid observations was of the view that the statement of Shri Ashok Jain (supra) recorded u/s.132(4) of the Act could not be treated as having been recorded on the basis of any incriminating document seized in the course of search and seizure proceedings. The CIT(Appeals) observed that not only the A.O had not drawn any support from the aforementioned seized document i.e. Page 78 - LPS-8, but even otherwise the statement of the aforementioned pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained at length the modus-operandi that was adopted by them. On a perusal of the records, it was observed by the CIT(Appeals) that the assessee had requested the A.O to provide him a copy of the statements of both the aforesaid individuals a/w. an opportunity to cross-examine them. It was observed by the CIT(Appeals) that the A.O neither provided the copies of the statements of the aforementioned persons to the assessee, nor afforded any opportunity to cross-examine them in the course of the assessment proceedings. On the basis of his aforesaid observations, the CIT(Appeals) was of the view that as the A.O had recorded the statements of the aforesaid persons at the back of the assessee, and also divested it of the very right to cross-examine them, thus, he could not have pressed into service the said statements for concluding that the assessee company in the guise of share application money was in fact in receipt of accommodation entries from paper/shell companies. 17. Also, it was observed by the CIT(Appeals) that the statements of the aforementioned persons were recorded prior to the search and seizure proceedings. The CIT(Appeals) considering the aforesaid facts, was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the hands of the assessee company (which included the sum of Rs.2.10 crore for A.Y.2013-14 and Rs.12.68 for A.Y.2014-15), but thereafter he had on the basis of an affidavit , dated 24.09.2016 retracted from his statement that was recorded u/s.132(4) of the Act on 20/22.09.2016. Considering the aforesaid facts, the CIT(Appeals) was of the view that it could safely be concluded that the addition made by the A.O was not based on any incriminating material found during the course of search proceedings but was made only on the basis of the retracted statement of Shri Ashok Jain (supra) and the statements of third parties. Also, it was observed by the CIT(Appeals) that even in the course of the post search enquiry or during the assessment proceedings no irregularity was brought on record by the A.O, and the sole basis for making the impugned addition was the statement of Shri Ashok Jain (supra) recorded u/s.132(4) of the Act. Relying on the judgment of the Hon ble Supreme Court in the case of Vinod Solanki Vs. Union of India Anr., 2008 (16) SCC 537 dated 18.12.2008 and the CBDT Instruction No. F-No.286/2/2003-IT (Inv.II) dated 10.03.2002, it was observed by the CIT(Appeals) that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inferences in the hands of the assessee company on the basis of statements of third parties that were recorded prior to search proceedings and the statement of Shri Ashok Jain (supra) recorded u/s.132(4) of the Act a/w. the observations/findings of the Investigating Wing, was of the view that the A.O had failed in his duty in not supporting his adverse inferences by placing on record any cogent evidence which would have irrefutably evidenced that the investments made in the assessee company were in fact accommodation entries which had been camouflaged as receipt of share capital/premium from the investor companies. The CIT(Appeals) was of the view that now when the assessee had on the basis of supporting documentary evidence discharged the onus that was cast upon it as regards proving the identity and creditworthiness of the share applicants, and also the genuineness of the transactions of having received share capital/premium from the investor companies, therefore, the impugned additions could not have been made by the A.O on the basis of suspicion, guess work and conjectures. Accordingly, the CIT(Appeals) held a conviction that as the A.O had no locus-standi to assume that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily drawn by the A.O without dislodging the duly substantiated claim of the assessee company could not be sustained. The CIT(Appeals) in order to support his aforesaid conviction had relied on a catena of judicial pronouncements. The CIT(Appeals) referring to the exercise of de-layering of funds as was taken recourse to by the A.O in the course of the assessment proceedings observed, that the requisite details as were called for by the A.O from the banks of the investor companies i.e. source of deposits in the latters bank accounts did not reveal any cash deposits which would have otherwise suggested routing of the assessee s unaccounted money in the guise of share capital/premium back to its coffers. 21. As regards the commissions which were issued by the A.O to the DDIT (Inv.), Kolkata for carrying out verification of the investor companies, it was observed by the CIT(Appeals) that though the Inspector of Income Tax so deputed had on the basis of his field enquiry submitted that only 8 investor companies out of 32 investor companies were traceable, but thereafter the notice(s) u/s.133(6) dated 01.10.2018 that were issued by the A.O to the said investor companies for verifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while framing the original assessment made an addition of the entire amount of Rs.1,64,71,430/- [Rs. 1,54,71,430/- (+) Rs. 10, 00,000/-] u/s.41(1)(a) of the Act, but at the time of repeating the said addition while framing the assessment vide his order passed u/s 153A r.w.s 143(3) of the Act, dated 26.12.2018, he had failed to appreciate that as the assessee company had discharged its outstanding liability to the extent of Rs.1,62,17,000/- (out of Rs. 1,64,71,430/-) over the period 07.09.2012 to 18.05.2016, therefore, there was no justification in sustaining the said addition u/s.41(1)(a) of the Act. Also, the CIT(Appeals) while concluding as hereinabove had taken cognizance of the confirmation that was filed by the contractor, viz. M/s Pragmatic Builders Pvt. Ltd., wherein the latter had duly acknowledged of having received the aforesaid payments from the assessee company. The CIT(Appeals) considering the aforesaid facts was of the view that there was no justification for the A.O in making any addition u/s.41(1)(a) of the Act, and thus, vacated the same. 23. Accordingly, the CIT(Appeals) on the basis of his exhaustive deliberations on the various facets of the case, viz. (i) v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for the year under consideration i.e. A.Y.2012-13, [Page 91 of APB, Volume-I], we find that the details mentioned in the respective columns of the aforesaid seized document, viz Page-78 LPS-8 i.e. share capital (opening balance), the addition of share capital, details of surplus reserves (opening balance), profit, securities premium reserves and total addition during the year matches to the last of the paisa with that recorded in its balance sheet for the year under consideration. In sum and substance, as stated by Shri Ashok Jain (supra) and, rightly so, the seized document i.e. Page -78 - LPS-8 is a consolidated extract of the figures appearing in the balance sheets of the assessee company for the year under consideration and those of the succeeding years. We, thus, on the basis of the aforesaid factual matrix concur with the observation of the CIT(Appeals), who had rightly observed that the aforesaid seized document, viz. Page-78 - LPS-8 being a part of the books of account of the assessee company, thus, could by no means be held to be an incriminating document. 28. We shall now in the backdrop of our aforesaid observations that no incriminating document relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153A is pending on the date of initiation of the search under section 132, the same shall abate. As such, it is only the pending proceeding that would abate, and not where there are orders of assessment or reassessment which are in force on the date of initiation of the search proceedings. To sum up, in a case where no assessment or reassessment is pending on the date of search and seizure proceedings conducted u/s.132 of the Act, then in absence of any incriminating document found and seized during the course of said proceedings relating to the year under consideration, no addition can be made in the hands of the assessee. To sum up, the A.O in the case of an unabated assessment would in absence of incriminating document be only entitled to repeat the original assessment framed in the case of the assessee. Our aforesaid view as regards the scope and gamut of 2nd proviso to Section 153A of the Act is supported by various judicial pronouncements that hold the ground as on date, as under: (A) CIT Vs. Continental Ware Housing Corporation (Nhava Sheva) Ltd. (2015) 374 ITR 645 (Bom.) :- 30. In the aforesaid case, it was observed by the Hon ble High Court of Bombay that wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In CIT v. Gurinder Singh Bawa (supra), the Bombay High Court held that: 6...once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings. Even this Court has in CIT v Mahesh Kumar Gupta (supra) and The Pr.Commissioner of Income Tax-9 v. Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd. (supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) CIT Vs. IBC Knowledge Park Pvt. Ltd. (2016) 385 ITR 346 (Karn.) (iv) Pr. CIT Vs. Salasar Stock Broking Ltd. (2016) TIOL-2099 HC KOL-IT (v) CIT Vs. Gurinder Singh Bawa (2016) 386 ITR 483 (Bom.) (vi) Pr. CIT Vs. Ram Avtar Verma (2017) 395 ITR 252 (Delhi). (vii). CIT Vs. Lancy Constructions (2016) 383 ITR 168 (Karnataka) (viii). Pr. CIT Vs. Kurale Paper Mills Pvt. Ltd. (2016) 380 ITR 571 (Del) 34. Apropos the three judicial pronouncements which had been pressed into service by the A.O/D.R, viz. (i). Filatex India Pvt. Ltd. Vs. CIT-(iv), 2014 (8) TMI 387; (ii) CIT Vs. Sri Raj Kumar Arora (2014) 367 ITR 517 (Allahabad); and (iii). E.N Gopakumar Vs. CIT (2016) 75 taxmann.com 215 (Kerala) for holding a view to the contrary, i.e., as per Section 153A of the Act the additions need not be restricted or limited to the incriminating material found and seized during the course of search proceedings, and the A.O is vested with the power to compute total income for six assessment years immediately preceding assessment year relevant to the previous year in which search was conducted or requisition was made, we are afraid that the same does not find favour wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, thus, are of the considered view that now when under the aforesaid circumstances as two views as regards the interpretation of a statutory provision had surfaced, then the view adopting a construction in favour of the assessee will have to be adopted. Our aforesaid view is supported by the judgment of the Hon ble High Court of Bombay in the case of Addl. Commissioner of Sales tax Vs. M/s Ankit International, Sales tax appeal no. 9 of 2011, dated 15.09.2011, wherein relying upon the judgment of the Hon ble Supreme Court in the case of CIT Vs. Vegetable Product Ltd. (1973) 88 ITR 192 (SC) and in the case of Mauri Yeast India Pvt. Ltd. Vs. State of U.P (2008) 14 VST 259 (SC) : (2008) 5 SCC 680, it was held that if two views in regard to the interpretation of a statutory provision are possible, then the court will be justified in adopting the construction which favours the assessee. Also, a similar view had been taken by the Hon ble Apex Court in Bihar State Electricity Board And Another Vs. M/s Usha Martin Industries (1997) 5 SCC 289. We, thus, in light of the aforesaid position of law adopt the construction as regards the issue in hand in favour of the assessee company. The Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in its appeal has assailed the validity of the other observations of the CIT(Appeals) on the basis of which he had, inter alia, allowed the appeal of the assessee company on merits, therefore, we shall for the sake of completeness deal with the said respective issues which emanate from the respective grounds raised before us. 41. We shall now deal with the claim of the department that the CIT(Appeals) had erred in not appreciating the statements of third parties i.e directors of the investor companies, wherein, they had in their respective state`ments admitted of having provided accommodation entries to the assessee company. It is the claim of the department that the CIT(Appeals) had lost sight of the evidentiary value of the statements of the aforesaid third parties, which clearly proves that the assessee s unaccounted money had been routed back to its coffers in the form of share capital/premium received from paper/shell investor companies. 42. On a perusal of the orders of the lower authorities it transpires that the assessee company during the year under consideration was in receipt of share capital/premium of Rs.10.59 crore from 32 investor companies. On the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erences by the A.O. On the basis of his aforesaid deliberations, the CIT(Appeals) was of the view that the impugned additions to the extent the same were made on the basis of statements of unrelated third parties, which were neither made available to the assessee nor their cross-examination facilitated by the A.O, could have validly formed a basis for drawing of adverse inferences and making of consequential additions in the hands of the assessee company. 44. We have given a thoughtful consideration to the aforesaid observations of the CIT(Appeals), and are principally in agreement with him that de hors corroborative evidence no adverse inferences can justifiably be drawn against an assessee on the basis of standalone statement of a third party. Our aforesaid view is fortified by the judgment of the Hon ble Supreme Court in the case of Kishan Chand Chellaram Vs. CIT, (1980) 125 ITR 713 (SC). Also, we are in agreement with the CIT(Appeals) that as held by the Hon ble Supreme Court in the case of M/s. Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkata-II (supra), the A.O remains under a statutory obligation to make available a copy of a third party statement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a seized document, viz. Page 78 - LPS-8, which as observed by the CIT(Appeals), and, rightly so, is an extract of the ledger account of share capital account appearing in the books of account of the assessee company. As the contents of the aforesaid seized document, viz. Page-78 - LPS-8 was duly accounted for by the assessee company in its books of account, therefore, as held by the CIT(Appeals), and, rightly so, the same was not an incriminating material found and seized in the course of the search proceedings. Considering the fact that no incriminating material was found and seized during the course of search proceedings, the CIT(Appeals) was of the view that there was no justification for the A.O in drawing adverse inferences and making additions in the hands of the assesee company on the basis of statement of Shri Ashok Jain (supra), which too had thereafter been retracted by him. The CIT(Appeals) after relying on a host of judicial pronouncements, Page 73 to 84 of his order, had observed, that as per the settled position of law the A.O ought to have made additions on the basis of incriminating material and could not have based the same on a standalone statement of Shri Ashok J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servations. 49. We shall now deal with the grievance of the revenue that the CIT(Appeals) had erred in deleting the addition of share capital/premium of Rs.10.59 crore made by the A.O u/s.68 of the Act, without considering the fact that the assessee company had failed to prove the identity and creditworthiness of the share subscribers as well as the genuineness of the transactions as regards receipt of the aforesaid amount. 50. We have heard the ld. Authorized Representative of both the parties on the aforesaid issue under consideration and considered the orders of the lower authorities in context of the same. As is discernible from the records, the assessee company, both in the course of assessment proceedings as well as before the CIT(Appeals), had in order to drive home its claim of having received genuine share capital/premium from the respective investors, therein placed on record the copies of bank account statements, audited balance sheets, profit loss accounts, memorandum of association, articles of association, certificate of incorporation and confirmations of the respective investor companies. Ostensibly, the A.O after referring to the complete details of the 32 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the CIT(Appeals), we find that he had on the basis of his exhaustive deliberations as regards each of the 32 investor companies, which in turn was based on the supporting documentary evidences that were placed on record by the assessee company, viz. copies of bank account statements, audited balance sheets, profit loss accounts, memorandum of association, articles of association, certificates of incorporation and confirmations of the respective investor companies, had concluded that the said investor companies were existing entities having substantial funds to make investments in equity shares of the assessee company. Also, it was observed by the CIT(Appeals) that no cogent evidence had been brought on record by the A.O which would negate the aforesaid claim of the assessee. Accordingly, the CIT(Appeals) on the basis of his exhaustive deliberations, had observed, that the assessee company had duly established the identity and creditworthiness of the 32 share subscriber companies, and also the genuineness of the transactions of receipt of share capital/premium from them. For the sake of clarity the exhaustive observations of the CIT(Appeals) as regards each of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or has sufficient funds to make investment in equity shares of appellant company. M/s Maa Chinmastika Dealers Pvt Ltd (PAN-AAHCM8350R) [in short MCDPL] :- Regarding the identity of the company, the appellant submitted that originally, the MCDPL was incorporated as a Private limited, company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal, on 27.03.2012 vide registration No. U51909WB2012PTC177870. The MCDPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the MCDPL is situated at C/s Manik Dutta, PC Road, Swiss park. Kolkata, West Bengal-700033. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with MCDPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of MCDPL. On perusal of bank account statement of the investor company no cash was found deposited before and after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,18,62,798/- and reserves surplus of Rs. 35,07,40,038/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Anchal Credit Capital Pvt Ltd [in short ACCPL]:- Regarding the identity of the company, the appellant submitted that originally, the ACCPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal, on 12.08.1994 vide registration No.21-64486 of 1994. The ACCPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the ACCPL is situated at P-41, prince Street, 4th Floor, Kolkata- 700072. The said investor company is registered with RBI as a Nonbanking Financial Company. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with ACCPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. After receipt of funds the appellant company has issued 'E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acom Pvt Ltd (PAN-AAECB7047F) [in short BTPL]:- Regarding the identity of the company, the appellant submitted that originally, the BTPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal on 28.09.2011 vide registration No. U74999WB2011PTC168239. The BTPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the BTPL is situated at 54, Munshi Saddaruddin, 2nd floor, Kolkata, West Bengal-700007. The BTPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with BTPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of BTPL. On perusal of bank account statement of the investor company no cash was found deposited befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 33,86,000/- and reserves surplus of Rs. 16,10,38,269/-. Similarly as on 31.03.2012, the share capital was at Rs. 33,86,000/- and reserve and surplus of Rs. 16,08,64,085/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Chakra Deal Trade Pvt Ltd (PAN-AAECC0034B) [in short CDTPL]:- Regarding the identity of the company, the appellant submitted that originally, the CDTPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal on 17.05.2010 vide registration No. U51909WB201OPTC148090. The CDTPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the CDTPL is situated at 124, Aurobinda Sarani, Kolkata, West Bengal-700006. The CDTPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with CDTPL had t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company has issued 'Equity Share Certificate' with reg. Folio No 124 and certificate No 133 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of CVPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that CVPL as on 31.03.2011 has share capital of Rs. 21,99,170/- and reserves surplus of Rs. 10,28,68,174/-. Similarly, a son 31.03.2012 has share capital of Rs. 21,99,170/- and reserves surplus of Rs. 10,29,23,048/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Dhan Mudra Suppliers Pvt Ltd (PAN-AADCD9842P) [in short DMSPL] :- Regarding the identity of the company, the appellant submitted that originally, the DMSPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal on 29.09.2011 vide registration No. U74999WB2011PTC168247. The DMSPL was incorporated with the objects contained in its Memorandum of Associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of FVPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 126 and certificate No 135 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of FVPL along with Auditors' Report, in respect of the financial year ended 31St March 2011. On perusal of the same it was found that FVPL as on 31.03.2011 has share capital of Rs.23,62,000/- and reserves surplus of Rs. 11,08,43,055/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Manali Tradecom Pvt Ltd (PAN-AAGCM9089E) [in short MTPL]:- Regarding the identity of the company, the appellant submitted that originally, the MTPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unctionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with MVPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of MVPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 128 and certificate No 137 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of MVPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that MVPL as on 31.03.2012 has share capital of Rs. 7,12,500/- and reserves surplus of Rs. 4,22,76,486/-. Thus, the investor has sufficient funds to make investment in equity shares of appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Association, under which it has got incorporated. The registered office of the NVPL was situated at 54, Munshi Saddaruddin lane, 2 Floor, Kolkata-700007. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with NVPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of NVPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued Equity Share Certificate with reg. Folio No 130 and certificate No 139 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of NVPL along with Auditors Report, in respect of the financial year ended 31 March 2012. On perusal of the same it was found that NVPL as on 31.03.2012 has share capital of Rs. 6,79,750/- and reserves surplus of Rs. 3,57,62,351/-. Thus, the investor has sufficient funds to make invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. U51909WB2011PTC169711. The PDPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the PDPL is situated at 54, Munshi Saddaruddin lane, 2 Floor, Kolkata- 700007. The PDPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with PDPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of PDPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of fund the appellant company has issued Equity Share Certificate with reg. Folio No 132 and certificate No 141 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of PDPL along with Auditors Report, in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally, the QAPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal, on 22.11.2011 vide registration No.U51909WB2011PTC169710. The QAPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the QAPL is situated at 54, Munshi Saddaruddin lane, 2nd Floor, Kolkata-700007. The QAPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with QAPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of QAPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued Equity Share Certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s._Risewell Vintrade Pvt Ltd (PAN-AAFCR0237A) [in short RWVPL]:- Regarding the identity of the company, the appellant submitted that originally, the RWVPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal. The RWVPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the RWVPL is situated at 91, 2 Floor, Amalangsu Sen Road, Kolkata-700048. The RWVPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with RWVPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of RWVPL. On perusal of bank account sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with Auditors Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that RDPL as on 31.03.2012 has share capital of Rs. 6,55,500/- and reserves surplus of Rs. 3,09,27,741/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Salasar Tracom Ltd (PAN-AAOCS9706J) [in short STPL]:- Regarding the identity of the company, the appellant submitted that originally, the STPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal on 10.11.2020 Vide Registration No U51909WB2010PTC 154568. The STPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the STPL is situated at 11, Bysack Street, Kolkata- 700007. The STPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve credit worthiness of the investor, the appellant has filed copies of audited financial statements of SVPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that SVPL as on 31.03.2011 has share capital of Rs. 14,54,000/- and reserves surplus of Rs. 6,63,51,188/-. Likewise as on 31.03.2012 has share capital of Rs. 14,54,000/- and reserves surplus of Rs. 6,63,58,503/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Spring Sales Pvt Ltd (PAN-AAOCS5474M) [in short SSPL]:- Regarding the identity of the company, the appellant submitted that originally, the SSPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, West Bengal on 12.07.2010 Vide Registration No U51909WB2010PTC151193. The SSPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the SSPL is situated at 11, Bysack Street, Kolkata- 700007. The SSPL is an active and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport has filed copy of bank account statement of SAPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 141 and certificate No 150 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of SAPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that SAPL as on 31.03.2011 has share capital of Rs. 2,22,80,538/- and reserves surplus of Rs. 43,39,30,349/-. Likewise as on 31.03.2012 has share capital of Rs. 2,22,80,538/- and reserves surplus of Rs. 43,39,35,954/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Sunaina Tei-up Pvt Ltd (PAN-AAQCS4058K) [in short STPL]:- Regarding the identity of the company, the appellant submitted that originally, the STPL was incorporated as a Private limited company, duly registered under the erstwhile Companies Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with SSPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of SSPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 143 and certificate No 152 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of SSPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that SSPL as on 31.03.2012 has share capital of Rs. 31,30,010/- and reserves surplus of Rs. 14,84,73,620/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. M/s Yash Commosales Pvt Ltd (PAN-AAACY4188L) [in short YCPL]:- Regarding the identity of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with ZDPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of ZDPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 145 and certificate No 154 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of ZDPL along with Auditors' Report, in respect of the financial year ended 31st March 2012. On perusal of the same it was found that ZDPL as on 31.03.2011 has share capital of Rs. 23,07,000/- and reserves surplus of Rs. 10,81,46,314/-. Likewise as on 31.03.2012 has share capital of Rs. 23,07,000/- and reserves s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PDPL was incorporated with the objects contained in its Memorandum of Association, under which it has got incorporated. The registered office of the PDPL is situated at 9/12, Lal Bazar Street, mercantile Building, Block B, Room No 10, Kolkata-700001. The PDPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with PDPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of PDPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. After receipt of funds the appellant company has issued 'Equity Share Certificate' with reg. Folio No 147 and certificate No 156 on 10.04.2012. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of PDPL along with Auditors' Report, in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed copy of confirmation of the aforesaid contractor, viz. M/s. Pragmatic Builders Pvt. Ltd., but the A.O without making any enquiry had vide his order u/s 143(3), dated 31.03.2015 held the aforesaid amount as a liability which had ceased within the meaning of Section 41(1)(a) of the Act. Aggrieved, the assessee assailed the aforesaid addition made by the A.O u/s 41(1)(a) before the CIT(Appeals). 55. That pursuant to the search proceedings conducted u/s 132 of the Act on 19.09.2016, the A.O while framing the assessment vide his order passed u/s.153A r.w.s. 143(3) dated 26.12.2018 repeated the aforesaid addition of Rs.1,64,71,430/- (supra) and, inter alia, assessed the income of the assessee company at Rs.13,10,24,630/-. 56. Consolidating the appeals filed by the assessee against the original assessment u/s 143(3), dated 31.03.2015 and u/s. 153A r.w.s 143(3), dated 26.12.2018, the CIT(Appeals) was of the view that the A.O while framing the assessment vide his order passed u/s.153A r.w.s. 143(3) of the Act instead of verifying as to whether or not the liability in question was outstanding on the date of his order, had however, summarily repeated the said addition. On a perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 and an amount of Rs.2,54,430/- only was outstanding as payable in the running account of the aforesaid party on 18.05.2016, therefore, in our considered view the CIT(Appeals) had rightly observed that there was no justification for the A.O to have dubbed the liability in question as a ceased liability u/s.41(1) of the Act. Accordingly, finding no infirmity in the view taken by the CIT(Appeals), we uphold his order to the extent he had vacated the addition of Rs.1,64,71,430/-. Thus, the Grounds of appeal No.(s) 9 and 10 raised by the revenue are dismissed in terms of our aforesaid observations. 58. In the result, appeal of the revenue in IT(SS)A No.2/RPR/2022 for A.Y. 2012-13 is dismissed in terms of our aforesaid observations. 59. Now we shall deal with the appeal of the revenue for A.Y.2013-14 in IT(SS)A No.3/RPR/2022, wherein the revenue has assailed the impugned order on the following grounds of appeal before us: 1 Whether on the facts and in law, the Ld. CIT(A) is justified in deleting the addition of Rs.2,10,00,000/- made by the AO on account of unexplained cash credit u/s.68 of the Income-tax Act, 1961? 2. Whether on the facts and in law, the Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt recorded u/s.131 of the act has evidentiary value and the burden lays on the person who made the statement, to provide a reasoned explanation for retracting from the statement, specifically, when he himself declared in his own handwriting that the statement is made in sound state of mind and without coercion. Therefore, Ld. CIT(A) is not justified in ignoring this fact and in relying solely on assessee's retraction. 8. Whether on the facts and in law, the Ld. CIT(A) justified in holding that the AO has no locus standi to assume that the share application money infused in the appellant company is not genuine and it is not justified to held the investor companies as dummy entities and the investments made by these companies are non-genuine even the directors of the share applicant companies have accepted in his statements that they have provided accommodation entries to the company in lieu of commission. 9. Whether on the facts and in law, the Ld. CIT(A) is right in deleting the addition of Rs.49,00,000/- made by the AO on account of unexplained cash credit u/s.68 of the Income-tax Act, 1961 ignoring the fact that the agreements were on a plain paper and no docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on 20.08.2017, declaring an income of Rs.32,46,730/-. Assessment was, thereafter, framed by the A.O vide his order passed u/ss. 153A/143(3) dated 26.12.2018, determining the income of the assessee company at Rs.3,03,37,621/- i.e. after reconsidering the additions which were earlier made by his predecessor vide original assessment framed u/s.143(3) dated 28.03.2016. 63. Consolidating the appeals filed by the assessee against the original assessment u/s 143(3), dated 28.03.2016 and u/s 153A r.w.s 143(3), dated 26.12.2018, the CIT(Appeals) vacated the aforesaid additions/disallowances made by the A.O. 64. The revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 65. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 66. At the very outset of the hearing of the appeal, the ld. Authorized Representative of both the parties were in consensus that majority of the issues involved in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same to the said extent. Thus, the Grounds of appeal No.(s) 3 4 raised by the revenue are dismissed in terms of our aforesaid observations. 69. Considering the facts involved in the present case before us in the backdrop of the contentions of the ld. Authorized Representatives of both the parties, as the Grounds of appeal No.(s) 5 to 7 on the basis of which the order of the CIT(Appeals) has been assailed before us remains the same as were there in the appeal of the revenue for the immediately preceding year i.e A.Y 2012-13 in IT(SS)A No.2/RPR/2022 for A.Y.2012-13, therefore, the order therein passed shall mutatis mutandis apply for the purpose of disposing of the said issues to the extent the same had been raised by the revenue in the present appeal for A.Y 2013-14 in IT(SS)A No.3/RPR/2022 before us. Thus, the Grounds of appeal No.(s) 5 to 7 raised by the revenue are dismissed in terms of our aforesaid observations. 70. We shall now deal with the grievance of the revenue that the CIT (Appeals) had erred in law and facts of the case in vacating the addition of Rs.2.10 crore made by the A.O u/s.68 of the Act. 71. As is discernible from the assessment order the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re made by him while framing the original assessment u/s.143(3) dated 28.03.2016. BEFORE CIT(APPEALS) : (A) M/s. Manali Tradecom Pvt. Ltd. : Rs. 20 lac 75. The CIT(Appeals) on an appeal filed by the assessee company deliberated at length on the documentary evidences that were filed to substantiate the identity and creditworthiness of the aforementioned share applicant i.e. M/s. Manali Tradecom Pvt. Ltd., as well as the genuineness of the transaction of receipt of share capital/premium from the said share applicant company. Considering the certificate of incorporation granted by the Registrar of companies (ROC), West Bengal on 14.12.2010 bearing registration no. U51909WB2010PTC155767, memorandum of association, articles of association, copies of bank statement, audited financial statements of the aforesaid investor company, the CIT(Appeals) was of the view that there was no justification for the A.O in holding the investment made by the said investor company which had sufficient funds available at its disposal to make the investment in question, as an unexplained cash credit u/s.68 of the Act. Apropos the identity of the aforesaid investor company, it is was observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd data of the Ministry of Corporate Affairs (MCA), Government of India. Regarding the genuineness of the transaction, the appellant submitted that all the transactions by the appellant with MTPL had taken place through account payee cheques/ banking channels only and none of the tr ions had taken place in the form of cash. Appellant in support has filed copy of bank account statement of MTPL. On perusal of bank account statement of the investor company no cash was found deposited before and after transferring of funds to the appellant company. In order to prove credit worthiness of the investor, the appellant has filed copies of audited financial statements of MTPL along with Auditors' Report, in respect of the financial year ended 31st March 2013. On perusal of the same it was found that MTPL as on 31.03.2012 has share capital of Rs. 26,38,000/- and reserves surplus of Rs.12,40,15,575/-. Likewise, as on 31-03-2013, MTPL has share capital of Rs. 26,38,000/- and reserves surplus of Rs.12,40,15,575/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. The said investor company has received an advance of Rs.20,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held the amount of Rs.20 lac that was received by the assessee company as share capital/premium from the aforesaid investor as an unexplained cash credit u/s.68 of the Act. (B). M/s. Extent Vinimay Pvt. Ltd. : Rs.1.90 crore 77. On a perusal of the orders of the lower authorities, we find that the aforementioned investor company was duly registered with the Registrar of Companies, West Bengal (ROC) on 12.07.2010 vide registration No. U51101WB2010PTC15102. It initially had its registered office at 63, Radha Bazar Street, Kolkata, West Bengal - 700 001, which thereafter w.e.f. 15.05.2018 was shifted to a new address i.e 201, 2nd floor, Lal Ganga Shopping Mall, G.E Road, Raipur-492 001. It was observed by the CIT(Appeals) that the aforementioned company was an active and functional company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. Also, it was observed by the CIT(Appeals) that the aforesaid investor company, viz. M/s Extent Vinimay Pvt. Ltd. was assessed by the ITO, Ward-12(2), Kolkata vide his order passed u/s 263 r.w.s 143(3), dated 20.12.2016. 78. The assessee company in order to substantiate the identity and creditworth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y 2011-12. It was further observed by the CIT(Appeals) that the A.O pursuant to the aforesaid directions had vide his order passed u/s.143(3) r.w.s. 263, dated 20.12.2016 verified the share capital/premium of Rs. 17.69 crore (approx.) that was raised by the aforesaid investor company, viz. M/s Extent Vinimay Pvt. Ltd. and had found the same in order. On the basis of the aforesaid facts, the CIT(Appeals) found substance in the claim of the assessee company that now when the share capital/premium received by the investor, viz. M/s Extent Vinimay Pvt. Ltd. in A.Y 2010-11 was after necessary vetting and verifications in its case by the ITO-Ward 12(2), Kolkata vide his order passed u/ss. 143(3)/263, dated 20.12.2016 found to be in order, then, the investment of Rs. 1.90 crore (supra) made by the said investor company by realizing its investments, which, in turn were sourced from the aforesaid duly explained share capital/premium of Rs. 17.69 crore (supra) could not be held as an unexplained cash credit in the hands of the assessee company. Considering the duly explained source of investment made by the aforesaid investor company, viz. M/s Extent Vinimay Pvt. Ltd., the CIT(Appeals) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share capital of Rs. 36,39,000/- and reserves surplus of Rs.17,34,26,476/-. Likewise, as on 31-03-2013, EVPL has share capital of Rs. 36,39,000/- and reserves surplus of Rs.17,34,35,034/-. Thus, the investor has sufficient funds to make investment in equity shares of appellant company. Most importantly, the case of EVPL was re-opened u/s 263 of the share capital and share premium received during A.Y.2011-12. The ld AO i.e. ITO Ward-12(2), Kolkata after verification of facts and submissions filed by ld AR of the investor company treated the share capital/premium as genuine by passing order u/s 263 r.w.s 143(3) dated 20.12.2016. The said order has been passed after the search and seizure proceedings in the case of appellant. Once, the source of investment has been treated as genuine, the AO has no locus to treat the same as bogus and nongenuine and that to in absence of any positive documents in support of his allegation. 80. We have given a thoughtful consideration to the view taken by the CIT(Appeals) as regards the investment of Rs. 1.90 crore (supra) made by the aforementioned investor company, viz. M/s. Extent Vinimay Pvt. Ltd. with the assessee company. As observed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, we concur with the view taken by the CIT(Appeals) that now when the assessee company had duly discharged the onus that was cast upon it as regards proving the authenticity of the transaction of having received genuine share capital/premium from the aforementioned investor company, viz. M/s. Extent Vinimay Pvt. Ltd, therefore, the A.O could not have remained oblivion of the said material evidence and drawn adverse inferences without placing on record any material/evidence which would have disproved the authenticity of the aforesaid claim of the assessee company. Our aforesaid view that no addition could be made merely on the basis of suspicion, guess work and surmises is supported by the judgment of the Hon ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd Vs Commissioner of Income Tax, (1954) 22 CCH 139 (ISCC) and that of the Hon ble High Court of Calcutta in the case of Northern Bengal Jute Trading Co. Ltd. Vs. Commissioner of Income-Tax, (1968) 70 ITR 407 (Cal). Also, the aforesaid view is supported by the order of ITAT, Mumbai in the case of Riddhi Siddhi Developers Pvt. Ltd. Vs. Deputy Commissioner of Income Tax (2021) 63 CCH 86 (Mum.) 81. Apart from that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.39 lacs (+) Rs.17.34 crore], having found the same to be in order, was accepted by him. 82. On the basis of the aforesaid facts, we are of the considered view that now when the source out of which the aforementioned investor company,viz. M/s. Extent Vinimay Pvt. Ltd had made the investment with the assessee company towards share capital/premium in itself stands accepted by the department, therefore, as observed by the CIT(Appeals), and, rightly so, there was no locus standi with the A.O of the present assessee company to have held the investment made by the aforementioned company as an unexplained cash credit u/s. 68 of the Act in the hands of the assessee company. 83. In order to verify the aforesaid factual position and to dispel all doubts, the Ld. AR for the assessee in the course of hearing of the appeal was directed to place on record a fund flow chart which would reveal that the investment of Rs. 1.90 crore (supra) made by M/s. Extent Vinimay Pvt. Ltd towards share capital/premium with the assessee company during the year under consideration was sourced out of its duly disclosed funds of Rs.17.69 crore (supra). In compliance, the assessee had filed be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Refer Page No. 10 and 13 15 and 18 19 22 On a careful perusal of the aforesaid fund flow chart filed before us, it transpires that it is the claim of the assessee company that the aggregate of the investments of the investor company, viz. M/s Extent Vinimay Pvt. Ltd. by way of share capital/premium, loans/advances in various companies a/w cash/bank balance on 31.03.2011 was Rs. 17.71 crore [investment in shares: Rs.16.41 crore (+) loans/advances: Rs.1.28 crore (+) cash/bank balance: Rs .04 crore]. The assessee company on the basis of its consolidated fund flow chart, had tried to project, that the investments made with it by the aforesaid investor company i.e towards share capital/premium and loans/advances for the year under consideration i.e. A.Y.2013-14 and the succeeding two years, were out of rotation of the latter s investments/funds of Rs.17.71 crore (supra), the source of which was looked into and accepted by the ITO, Ward 12(2), Kolkata, vide his order passed in the case of the said investor company, viz. M/s. Extent Vinimay Pvt. Ltd u/s.143(3) r.w.s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order passed u/s.143(3) r.w.s. 263 of the Act, dated 20.12.2016 to have been made from duly disclosed/explained sources, therefore, the benefit as regards availability of the aforesaid duly disclosed/verified funds can be allowed only to the said extent. We, thus, are of the considered view, that in terms of our aforesaid observations, the claim of the assessee company that the investor, viz. M/s Extent Vinimay Pvt. Ltd. had during the year under consideration i.e A.Y 2013-14 made investment towards share capital/premium with it out of its duly disclosed funds can only be accepted to the extent of Rs.1.84 crore [Rs. 17.71 crore (minus) Rs. 15.87 crore]. Accordingly, the claim of the assessee that the investment made by the aforesaid investor company, viz. M/s. Extent Vinimay Pvt. Ltd towards share capital/premium of Rs.1.90 crore with it was out of rotation/realization of its duly disclosed investments of A.Y 2011-12 can only be accepted to the extent of Rs.1.84 crore (supra.). 87. Alternatively, we are of the considered view, that as observed by the CIT(Appeals), and, rightly so, as the assessee by placing on record supporting documentary evidences, viz. copies of audited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Dilip Kothari 19.04.2012 30.03.2013 950000 3. Virendera Kumar Chourdia 05.04.2012 10.12.2012 950000 4. Dharam Chourdia 18.06.2012 10.12.2012 900000 5. Pramila Jain 26.04.2012 10.12.2012 950000 Total 4900000 It was the claim of the assessee that as the aforesaid sale agreement was cancelled, therefore, the cash advance was returned back to the aforementioned parties. However, the aforesaid claim of the assessee did not find favor with the A.O. The A.O doubted the authenticity of the aforesaid claim of the assessee, for the reason that both the agreements i.e sale agreement and the cancellation agreement were executed on plain paper. Apart from that, it was observed by the A.O that no documentary evidence was filed by the assessee to substantiate its aforesaid claim. On the basis of his aforesaid o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial proving to the contrary, therefore, the CIT(Appeals), in our considered view, had rightly vacated the aforesaid impugned addition that was made by the A.O vide his original assessment passed u/s.143(3) dated 28.03.2016. As observed by the CIT(Appeals), and, rightly so, now when the assessee while discharging the initial onus that was cast upon it as regards proving the nature and source of the cash deposits in its books of accounts, had in support of his claim filed with the A.O copies of agreements, viz. sale agreement/cancellation agreement, therefore, there was no justification for the A.O in rejecting the same without placing on record any material disproving the authenticity of the aforesaid claim. Our aforesaid view is supported by the judgment of the Hon ble High Court of Chhattisgarh in the case of Pawan Kumar Agrawal, Tax Case No.24 of 2011 dated 04.04.2017. In fact, we are in agreement with the CIT(Appeals) that the A.O had even failed to do the bare minimum that was required on his part, i.e, making verifications or calling for the necessary details from the aforesaid five parties with whom the assessee had claimed to have carried out the transaction in question. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10,68,271/- out of labour expenses and Rs.76,280/- out of telephone expenses, travelling expenses and conveyance expenses. 95. We have given a thoughtful consideration to the aforesaid issue, and find no reason to dislodge the well-reasoned observations of the CIT(Appeals). Admittedly, as the A.O while working out the disallowance had proceeded with in a whimsical manner and neither pointed out the very basis for working out the disallowance, nor referred to any such expenditure which was not supported by vouchers/bills, therefore, as observed by the CIT(Appeals), and, rightly so, no part of assessee s claim for deduction of such expenditure could have been disallowed in absence of any specific defect having been pointed out by the A.O. We, thus, in terms of our aforesaid observations uphold the order of the CIT(Appeals) to the extent that he had vacated the respective ad-hoc disallowances that were made by the A.O while framing of the original assessment u/s.143(3) dated 28.03.2016, which, thereafter was repeated by him while framing the assessment vide his order passed u/s 153A r.w.s 143(3) of the Act, dated 26.12.2018. Thus, the Ground of appeal No.10 raised by the revenue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identiary value of statement recorded u/s.132(4) of the Act and while retracting from the statement given earlier, the assessee could not produce any corroborative evidence in support of his retraction. Further, in his concluding para of the statement, the assessee agreed and gave his consent that the statement given by him are correct and put his signature. 7. In reference to the above mentioned Point 6, Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in ignoring the dictum of law pronounced in case of Bannalal Jat Construction (P) Ltd vs ACIT 106 Taxmann 128(SC)/2019 264 Taxmann 5(SC) and in ignoring that the statement recorded u/s.131 of the act has evidentiary value and the burden lays on the person who made the statement, to provide a reasoned explanation for retracting from the statement, specifically, when he himself declared in his own handwriting that the statement is made in sound state of mind and without coercion. Therefore, Ld. CIT(A) is not justified in ignoring this fact and in relying solely on assessee's retraction. 8. Whether on the facts and in law, the Ld. CIT(A) justified in holding that the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank account of M/s. Extent Vinimay Pvt. Ltd, revealed that no cash was deposited either before or after transfer of the funds in question to the assessee company. In fact, it was observed by him that in lieu of funds invested by the aforesaid investor company the assessee company had issued equity shares to M/s. Extent Vinimay Pvt. Ltd with registered Folio No.148 and Certificate No.157 on 15.04.2013. Considering the supporting documentary evidence which were filed by the assessee company, viz. copies of audited financial statements, copies of bank accounts, PAN, copies of return of income etc., the CIT(Appeals) was of the view that the financial statements of the aforesaid investor company, viz. M/s. Extent Vinimay Pvt. Ltd, revealed beyond doubt that it had sufficient funds to make investment in the equity shares of the assessee company. Apart from that, it was observed by the CIT(Appeals) that now when the share capital/premium that was received by M/s. Extent Vinimay Pvt. Ltd had been held by the A.O while framing assessment in its case vide order passed u/s. 263 r.w.s 143(3), dated 20.12.2016 for A.Y.2011-12 as genuine, therefore, the A.O had no locus standi to treat the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framing of assessment u/s 143(3) r.w.s 263, dated 20.12.2016 in the case of the aforesaid investor company, the A.O in the case of the present assessee company had no locus standi to have held the investment made by the said investor to the said extent as bogus/sham. 103. We shall now on the basis of the details as had been filed by the assessee before us, deal with the issue as to what extent the investment made by M/s. Extent Vinimay Pvt. Ltd. (supra) with the assessee company during the year under consideration i.e. A.Y.2014-15 are found to be related/sourced from the duly disclosed share capital/premium/loans as had been accepted in the hands of the said investor by the A.O i.e ITO Ward 12(2), Kolkata while framing of assessment in its case u/s.263 r.w.s. 143(3) dated 20.12.2016. Before proceeding any further, we may herein for the sake of convenience cull out the chart which had been filed by the assessee before us in its attempt to demonstrate that the investment of Rs.12.68 crore (supra) made by M/s. Extent Vinimay Pvt. Ltd, was sourced out of realization/rotation of its investments/loans of A.Y.2011-12, as under: Details of share investment as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assailed the order of the CIT(Appeals) on the ground that he had erred in vacating the addition made by the A.O u/s. 153A r.w.s. 143(3) dated 26.12.2018, for the reason that in absence of any incriminating material having been found and seized in the course of the search proceedings, no addition could have been made in respect of the unabated assessment of the assessee company for the year under consideration i.e.A.Y.2014-15, we shall now deal with the same. 105. On a careful perusal of the record it transpires that the assessee company had filed its original return of income u/s.139(1) of the Act on 19.01.2016, declaring an income of Rs.45,71,220/-. Search and seizure operations u/s.132 of the Act were conducted on the assessee company on 19.09.2016. As on the date of the aforesaid search proceedings i.e. on 19.09.2016 as neither any assessment or reassessment proceedings were pending in the case of the assessee company, and also the time limit for issuance of notice u/s. 143(2) of the Act for the year under consideration i.e. A.Y.2014-15 had expired way back on 30.09.2015, therefore, as observed by the CIT(Appeals), and, rightly so, it was a case of an unabated assessment. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the additions were made in non-abated assessment year i.e. A.Y.2015-16 and in absence of any incriminating material and is not justified as per provision of section 153A of the Act? 4. Whether on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in ignoring decision of Hon'ble High Court of Kerala in the case of E.N gopakumar Vs CIT [2016 75 taxmann.com 215 (Kerala)], where in it is held that assessment proceedings generated by issuance of a notice under section 153A(1)(a) of IT Act can be concluded against interest of assessee including making addition even without any incriminating material being available against assessee in search u/s.132 on basis of which, notice was issued to the assessee u/s.153A(1)(a) of the Act 5. Whether on the facts and in law, the Ld. CIT(A) is justified in ignoring the fact that third parties are directors of the investor companies who have already accepted in his statement they provided the accommodation entries to the company in lieu of commission and in completely ignoring the evidentiary value of these statements? 6. Whether on the facts and in law, the Ld. CIT(A) is right that AO ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the garb of the said loan transaction, therefore, he held the same as the unexplained money of the assessee company u/s.69A of the Act. 111. On appeal, the CIT(Appeals) after deliberating at length on the multifacet contentions that were advanced by the assessee company to impress upon him that it had raised genuine loan from the aforementioned lender, viz. M/s. Extent Vinimay Pvt. Ltd, therein, vacated the impugned addition. 112. We have given a thoughtful consideration and find that the issue of investments made by the aforementioned concern, viz. M/s. Extent Vinimay Pvt. Ltd is perpetuating in the case of the assessee company over the years i.e A.Y. 2013-14 to A.Y. 2015-16. As observed by us hereinabove, the CIT(Appeals) on the basis of his exhaustive deliberations as regards the identity and creditworthiness of the aforesaid investor company, and also the genuineness of the transactions under consideration, had vacated the respective additions that were made by the A.O w.r.t share capital/premium received by the assessee company from the said investor, viz. M/s Extent Vinimay Pvt. Ltd. On a perusal of the order of the CIT(Appeals) for the year under consideration, i.e A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the realization of the investments which had been held by the revenue as genuine in the case of the said investor company in A.Y 2011- 12, the A.O in the case of the present assessee company would have no locus standi to hold the investment to the said extent as bogus/sham. 115. We shall now on the basis of the details as had been filed by the assessee before us, deal with the issue as to what extent the loan advanced by M/s. Extent Vinimay Pvt. Ltd. during the year under consideration i.e. A.Y.2015-16 could be held to have been sourced from the share capital/premium/loans, as had been proved to be genuine in the hands of the said lender by it s A.O i.e ITO Ward 12(2), Kolkata while framing of the assessment in its case u/s. 143(3) r.w.s 263 of the Act, dated 20.12.2016. Before proceeding any further, we may for the sake of convenience cull out the chart which had been filed by the assessee before us in its attempt to demonstrate that the loan of Rs.2.03 crore (supra) advanced by M/s. Extent Vinimay Pvt. Ltd. was sourced out of realization of its investments/loans for A.Y.2011-12, as under: Details of share investment as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Grounds of appeal No.(s) 1, 2 8 raised by the revenue are dismissed in terms of our aforesaid observations. 116. Now we shall deal with the grievance of the revenue that the CIT(Appeals) had erred in law and facts of the case in vacating the addition made by the A.O u/s.69A of the Act, for the reason that in absence of any incriminating material relating to the year under consideration, i.e, A.Y 2015-6 having been found and seized during the course of search proceedings conducted on the assessee, no addition could have been made in respect of unabated assessment for the said year. 117. On a perusal of the order of the CIT(Appeals), it transpires that he had held that as the assessment in the case of the assessee company for the year under consideration i.e A.Y.2015-16 was unabated on the date of search that was conducted on 19.09.2016, therefore, in absence of any incriminating material having been found and seized during the course of search proceedings, no addition could have been made while framing of the assessment u/s 153A r.w.s 143(3), dated 26.12.2018. Admittedly, as observed by us hereinabove while disposing off the appeal in IT(SS)A No.2/RPR/2022 for A.Y.2012-13, P ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
