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TMI Blog2023 (9) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... spose of them by this common order. 2. Ground of appeal taken by the Revenue in each appeal reads as under:- IT(SS)A No. 34/KOL/2023 "Whether on the facts and circumstances of the case, ld. CIT(A) is justified without going into merits of the case and deleting the addition u/s 68 of the Income Tax Act, 1961, of Rs. 5,20,60,073/- ignoring the facts that AO has made the additions based on the facts as all the limbs u/s 68 of the Income Tax Act, 1961, are not satisfied in this case" IT(SS)A No. 35/KOL/2023 "Whether on the facts and circumstances of the case, ld. CIT(A) is justified without going into merits of the case and deleting the addition u/s 68 of the Income Tax Act, 1961, of Rs. 1,58,00,000/- ignoring the facts that AO has made the additions based on the facts as all the limbs u/s 68 of the Income Tax Act, 1961, are not satisfied in this case" IT(SS)A No. 36/KOL/2023 "Whether on the facts and circumstances of the case, ld. CIT(A) is justified without going into merits of the case and deleting the addition u/s 68 of the Income Tax Act, 1961, of Rs. 1,89,00,000/- ignoring the facts that AO has made the additions based on the facts as all the limbs u/s 68 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021. Similar notices were issued in all the cases and all the assessees have filed their returns of income, which are equivalent to the amount disclosed in the return filed under section 139(1) of the Income Tax Act. In other words, these amounts are equivalent to the one disclosed in the regular return of income filed by the assessee. The details are being tabulated by the ld. Counsel for the assessee in his submissions filed before us, which read as under:- "The assessees filed their return of income in compliance of notice issued u/s 153A of the Income Tax Act, 1961 declaring same total income as declared in the return filed u/s 139(1) of the Act. The incomes disclosed by the assessees are as under:- Sr. No. Respondent-Assessee A.Y. Total income filed in ITR 1. Narsingh Ispat Limited 2012-13 1,74,09,340/- 2. Narsingh Ispat Limited 2013-14 2,12,96,960/- 3. Narsingh Ispat Limited 2014-15 1,44,94,040/- 4. Narsingh Ispat Limited 2018-19 6,47,55,183/- 5. Narsingh Ispat Udyog Pvt. Limited 2013-14 6,130 6. Narsingh Ispat Udyog Pvt. Limited 2014-15 13,50,540/- 7. Bakshiram Uderam Holding Pvt. Limited 2018-19 3,28,260/- 5. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 153A of the Income Tax Act. Accordingly he deleted the additions. 8. The ld. CIT(DR) while impugning the order of the ld. CIT(Appeals) relied upon the orders of the ld. Assessing Officer. He submitted that the ld. Assessing Officer must have considered the material available before him in the form of appraisal report or other circumstances. He made reference to the statement of Shri Mukesh Banka, though recorded in some other investigation, but he admitted before the Investigating Agency that he was engaged in providing accommodation entries and the companies, from whom the assessee had availed the benefit of share application money, were shell companies. Therefore, the ld. Assessing Officer has considered sufficient material before disbelieving the genuineness of the share capital raised by these assessees. He relied upon the assessment orders in all these years. 9. On the other hand, ld. Counsel for the assessees has filed written submissions running into 27 pages. He took us through section 153A and thereafter explained the scope of this section and made reference to paragraph no. 10.2 of his submissions. While dealing with the position of law as canvassed by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: PROVIDED ALSO THAT no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. EXPLANATION 1.-For the purposes of this sub-section, the expression "relevant assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose books of account, other documents or any asset are requisitioned under section 132A after May 31, 2003. The second proviso attached with this section further contemplates that the assessments/reassessments, relating to any assessment year falling within the period of six assessment years, which are pending on the date of initiation of the search under section 132 or requisitioned under section 132A shall stand abate. It was further submitted that the second proviso also provides that if on the date of initiation of search or requisition under section 132 or under section 132A of the Act, any assessment/reassessment proceedings relating any assessment year falling within the period of six assessment years is pending, then the pending proceeding shall stand abated and fresh assessment of the same can be done under section 153A of the Act. It is also emphasized that if no proceeding was pending on the date of the search, then, the proceeding for that year stand concluded and such search shall have no impact on the concluded proceeding. Thus this proviso was enacted specifically to avoid two parallel proceeding of assessment of a particular year of the same person, i.e. one regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Kabul Chawla, 380 ITR 573 (Del.). Hon'ble Delhi High Court after detailed analysis has summarized the following legal position: On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i)Once a search takes place under Section 132 of the Act, notice under Section 153 A(l) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such A.Y.s will have to be computed by the AOs as afresh exercise. (iii) The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which 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 disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the words 'the incriminating material found during the course of search' which are not there in section 153A? (c) Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 15. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 16. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon'ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfillment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. If the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfillment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No Costs". 19. In the light of above, let us consider the facts of the present appeals. The ld. Counsel for the assessee has tabulated the date of filing of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived the share application money in the accounting period relevant to the assessment year but those were to be construed as accepted by the ld. Assessing Officer by not scrutinizing the return under section 143(2). The acceptance of the share application money in a constructive manner by the Revenue cannot be revisited under section 153A by again analysing that very material as if ld. Assessing Officer is passing a regular assessment. Whatever evidence the Assessing Officer has referred, it was available much prior to the date of the search. The last statement referred by him is of Mukesh Banka, which was also recorded on 30.05.2018 much prior to the search, but after that statement, no action was taken by the Revenue. Therefore, under the first limb of argument and on the strength of the Hon'ble Supreme Court's decision in the case of PCIT -vs.- Abhisar Buildwell Pvt. Limited, these appeals deserve to be dismissed. 22. However, during the course of hearing, ld. Counsel for the assessees emphasized on the second limb of argument, which flows from the second compartment of section 153A. At the cost of repetition, we would like to take note of section 153A from 4th proviso again, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year". 23. In his second fold of submission, the ld. Counsel for the assessee submitted that by Finance Act, 2017, the legislature has extended the scope of section 153A. He submitted that earlier ld. Assessing Officer was empowered to make assessment or reassessment of six assessment years prior to the year of search as provided under section 153A(1) of the Act. With the help of 4th proviso of section 153A, power of making assessment or reassessment under section 153A has been extended upto earlier ten years prior to the year of search in certain specific circumstances. It was submitted by him that the proceedings for extended period can be initiated under section 153A of the Act if ld. Assessing Officer has, in his possession, books of account or other documents or evidence, which showed that the income represented in the form of asset, which has escaped assessment amounts to or is likely to the amount of Rs. 50 lakhs or more in the relevant assessment years. The power of ld. Assessing Officer to make assessment or reassessment for additional three years is conditional and it is available on fulfilment of two conditions, namely - (a) The undisclosed income is repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the relevant assessment years and the definition of relevant assessment year has been provided in Explanation (1) of 4th proviso to section 153A. The relevant assessment year shall mean an assessment year proceeding the assessment year relevant to the previous year in which search is conducted or requisition is made, which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Thus the scope of this section has been extended upto ten years. The earlier assessment under section 153A could be made of search year plus six earlier years. Now it can be made search year plus nine earlier years meaning thereby the number of years would be ten. Therefore, basically this relevant assessment year is to be construed three years. It is pertinent to observe that search was conducted on 29th January, 2021.Thus under the 1st compartment, the assessment years would fall from A.Y. 2015-16 and upto the search year onwards. The relevant years are the years i.e. 2012-13, 2013-14 and 2014-15. In these years notice under section 153A could only be issued if condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action under section 153A could have not been initiated. 28. In the present sets of appeal, the question is whether share application money received by the assessee in the accounting year relevant to these A.Ys and shown in the books of account could be termed as undisclosed asset unearthed during the course of search. Though from the assessment order, it is not discernable what has weighed with the ld. Assessing Officer to harbour the believe for issuing the notice under section 153A, but if we make a speculation, then that is to be construed that ld. Assessing Officer has termed share application money received by the assessee duly disclosed in the regular books of account and could be scrutinised in regular assessment as undisclosed income. This is an incorrect appreciation of jurisdictional fact and on the basis of this plea, action against the assessee cannot be justified. Therefore, we are of the view that the notice under section 153A for the extended year ought to have not been issued. These appeals of the Revenue for A.Y. 2012-13 to 2014-15 in the cases of all these assessees deserve to be dismissed for this additional fold of reasoning advanced by the ld. Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to tax any further by applying the rates of the IT Act. Hence, the entire addition made in the hands of Narsingh Ispat Ltd for AY 2012-13, being double additions is liable to be deleted. 4.2 Narsingh Ispat Ltd and Narsingh Ispat Udyog Pvt Ltd (AY 2013-14 and 2014-15) There are common shareholders in both these companies for these assessment years. The synopsis of the share application money received in these years is tabulated below: No Share Applicants Assessment Years Share Application Money received by assessee group during the year Source of share application money already taxed by the respective AO Source found genuine by the respective AO. 1 Honesty Dealers Pvt Ltd. 2013-14 1,28,05,000 14,84,00,000 2 Seaview Agencies Pvt Ltd 2013-14 and 2014-15 1,02,65,000 5,85,00,000 3 Delta Dealers Pvt Ltd 2013-14 4,68,00,000 15,51,00,000 4 Innova Tie-up Private Limited 2013-14 67,55,000 13,31,00,000 5 VedantVincom Pvt Ltd 2013-14 and 2014-15 5,94,50,000 6,28,00,000 6 Everlite suppliers Pvt Ltd 2013-14 1,27,71,000 11,39,00,000 7 Reliable Commodeal Pvt Ltd 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y comments on the position of additions made in A.Y. 2012-13. The only finding in this year is that assessment order passed under section 153A is without jurisdiction. 31. As far as other years are concerned, i.e. A.Y. 201314 and 2014-15 in the appeals of all respondents, it is observed that ld. Counsel for the assessee has raised two-fold submissions. In his first fold of contention, he pointed out about the evidence used against the assessee. In the earlier part of this order, we have observed that this aspect will be referred in the later part of the order. The ld. Counsel for the assessee in his submissions from paragraph no. 8 onwards has tabulated the details showing the pleas raised before the ld. Assessing Officer. We deem it appropriate to take note of these submissions:- 8. In reply, the assessee submitted that as follows: Narsingh Ispat Limited AY-2012-13 SHARE APPLICANT AMOUNT IN (Rs.) SUBMISSION BEFORE AO Honesty Dealers Pvt Ltd. 10,52,00,000 Same addition already made in the assessment order passed u/s 143(3) of the Act dated 04-032015 in the case of the assessee for AY 2012-13. Adding the same again in 153A proceedings will tantamount to double addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 80-92 of the paper book. Innova Tie-up Private Limited 27,70,000 Share capital of Rs. 13,31,00,000/- was raised by Innova Tie-up Pvt Ltd during FY 2008-09. The said sum of Rs. 13.31 cr. had already been added in the assessment order of Innova Tie-up Pvt Ltd for AY 2009-10 dated 11- 03-2015 u/s 68 of the Act. This share application money received by the party was re-invested in shares of the assessee company in the relevant year. Since the source of share capital raised by the assessee during the year has already been taxed, adding the same again will tantamount to double addition. Refer page 307-314 of the paper book. Bakshiram Uderam Holding Pvt Ltd 95,00,000 This party is a group concern of the assessee. The networth of this party as on 31-03-2013 was Rs. 12.17 crores which justifies the creditworthiness of the party to invest in the assessee company. Entire share application money was received through normal banking channels. This party is a regular income tax assessee. The share transactions are recorded in the books of both the parties. Hence, the identity, creditworthiness of this party and genuineness of the transactions is proven. Refer page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an of Rs. 5.85 cr. to Shri Anil Goyal in FY 2012-13 (AY 201314). The said loan of Rs. 5.85 cr. has been added in the assessment order of Anil Goyal in AY 2013-14 dated 29-12-2017, refer page 151-164. Out of the said loan of Rs. 5.85 cr., a sum of Rs. 1.43 cr. was refunded back to Seaview Agencies in the same year, being FY 2012-13. This repayment of loan was reinvested in the assessee company to the tune of Rs. 30,00,000/-. Since the source of Rs. 30,00,000/- had already been taxed, adding the same again will tantamount to double addition. VedantVincom Pvt Ltd 4,04,50,000 VedantVincom Pvt Ltd gave a loan of Rs. 6.28 cr. to Shri Anil Goyal in FY 2012-13 (AY 2013-14). The said loan of Rs. 6.28 cr. has been added in the assessment order of Anil Goyal in AY 201314 dated 29-12-2017, refer page 151- 164. A part of the said loan was refunded back to the party in the same year, being FY 2012-13. This repayment of loan was reinvested in the assessee company to the tune of Rs. 1,90,00,000/-. Since the source of Rs. 1,90,00,000/- had already been taxed, adding the same again will tantamount to double addition. 9,71,30,000 Narsingh IspatUdvog Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me tax assessee. The share transactions are recorded in the books of both the parties. Hence, the identity, creditworthiness of this party and genuineness of the transactions is proven. Refer page 63-76 of the paper book. Everlite suppliers Pvt. Ltd. 47,00,000 Share Capital of Rs. 11,39,00,000/- was raised by this party in FY 2008-09. During reassessment proceedings of this party for AY 2009-10, the share capital raised by this party was duly examined by its learned AO and the same was accepted by him as genuine. Accordingly, no addition was made in the assessment order passed u/s 147/143(3) of the Act dated 17- 02-2011, refer page 151-152 of the paper book. This share capital received by the party was re-invested in share capital of the assessee company in the relevant year. Thus, the source of share capital raised by the assessee during the year is an explained credit and no addition is warranted w.r.t the share capital raised by the assessee from this party as the source is explained. 1,58,00,000 Narsingh Ispat Udyog Private Limited AY-2014-15 SHARE APPLICANT AMOUNT IN (Rs.) SUBMISSION BEFORE AO Reliable Commodeal Pvt. Ltd. 1,80,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee from these companies in the relevant year, refer audited accounts for FY 2017-18 placed at page 16-33 of the paper book. The increase in share capital recorded in the audited accounts of FY 2018-19 was on account of the effect of amalgamation. The share capital was raised by these transferor companies much before the relevant AY 2018-19. Certificate from a practicing CA confirming that no fresh share capital was raised by the assessee from these companies is enclosed at page 15 of the paper book. Similarly, in the case of Narsingh Ispat Ltd. AY 2018-19, IT(SS)A No.40/Kol/2023, it was submitted that no new fresh capital was raised during the relevant year to warrant any addition u/s 68 of the Act. The following two companies were merged with the assessee company pursuant to the Scheme of amalgamation sanctioned by the order dated 07-02-2019 of the Hon'ble National Company Law Tribunal, Kolkata Bench w.e.f. 01-04-2017. 1. Reliable Commodeal Pvt Ltd 2. Seaview Agencies Pvt Ltd The amalgamation order was received by the assessee in the month of February 2019. By that time the accounts of FY 2017-18 were already audited, therefore, the effect of the merger was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that all these companies have meagre or nil profit accumulation over the years and they do not have any physical existence too. (f) Moreover, any concern makes a decision on investment on the basis of various parameters under consideration such as financial health of the company, P/E ratio, debt to equity ratio, dividend payment and most important is efficiency/stability of the management of the company. However, from the list of concerns in which the investment was made and their financial analysis, it can be easily understood that the concerns are not having good score on any parameters so that to attract huge amount of investment. It is hard to digest as to what prompted the assessee company to invest such huge amount without verifying financial credentials, existence, business operations and management of the companies in whose share investment is made. Therefore, it can be concluded that the investment was bogus in nature. (h) The assessee was duly given the opportunity for cross examination on 23.2.2022 and 28.12.2022. But neither the assessee nor Mukesh Banka nor Pankaj Agarwal was appeared on those days. In the light above discussion vis-a-vis the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ium is considered as extra amount charged by the company for issue of that capital. In the case of private limited company, normally shares are subscribed by family members or persons known/close to the promoters. Public limited company, on the other hand, generally raised by public issue inviting general public at large for subscription of these shares. Yet, it is also possible that in the case of public limited company, the share capital is issued in close-circuit. When companies incorporated under the Companies Act raise their capital through shares, various persons would apply for shares and then give share application money. This amount received from such share holder would naturally be credited in the books of accounts of the assessee. Once the alleged share capital is credited to the accounts of the assessee, then role of section 68 would come. It is pertinent to take note of this section. It reads as under: "Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the officer, satisfactory the sum so cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank statement, financial position of the recipient and beneficiary assessee and surrounding circumstances. 36. Let us take into consideration observations made by the Hon'ble Delhi High Court in the case of Softline Creations P.Ltd. (supra) while taking note of judgment of Hon'ble Delhi High court in the case of CIT Vs. Fair Finvest Ltd., 357 ITR 146 (Delhi). Hon'ble Delhi High Court made following observations: "..... This court has considered the concurrent order of the Commissioner of Income-tax (Appeals) as well as the Income tax Appellate Tribunal. Both these authorities primarily went by the fact that the assessee had provided sufficient indication by way of permanent account numbers, to highlight the identity of the share applicants, as well as produced the affidavits of the directors. Furthermore, the bank details of the share applicants too had been provided. In the circumstances, it was held that the assessee had established the identity of the share applicants, the genuineness of transactions and their creditworthiness; The Assessing Officer chose to proceed no further but merely added the amounts because of the absence of the directors to physically p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant where the court has observed that it is the revenue which has all the power and wherewithal to trace any person. Further in the case of CIT vs. Victor Electrodes Ltd. 329 ITR 271 it has been held that there is no legal obligation on the assessee to produce some Director or other representative of the Director or other representative of the applicant ITA No.3619/Ahd/2015 companies before the A.O. Therefore failure on part of the assessee to produce the Directors of the share applicant companies could not by itself have justified the additions made by the AO particularly when the seven share applicant companies through their present Directors have now again filed fresh affidavits confirming the application and allotment of shares with respect to the total amount of Rs. 45 Lacs. It is observed that no attempt was made by the AO to summon the Directors of the share applicant companies. Moreover, it is settled law that the assessee need not prove the "source of source". Accordingly it was incumbent upon the department to have enforced attendance of Shri Mahesh Garg or the erstwhile Directors of the share applicant companies and confronted them with the evidences & affidavits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of section 153A and this action of the ld. CIT(Appeals) deserves to be upheld with the help of Hon'ble Supreme Court decision in the case of Abhisar Buildwell Pvt. Limited. We have discussed this aspect while dealing with the proposition of the ld. Counsel for the assessee in IT(SS)A Nos. 35 to 39 of 2023. Our order is applicable on these appeals also. 40. Apart from the preliminary issue, ld. Counsel for the assessee filed written submissions on merit also. His submissions read as under:- 4.3 BakshiramUderam Holdings (P) Ltd and Narsingh Ispat Udyog Pvt Ltd (AY 2018-19) No fresh capital was raised during the relevant year to warrant any addition u/s 68 of the Act. The following six (6) companies were merged with M/s BakshiramUderam Holdings Private Limited pursuant to the Scheme of amalgamation sanctioned by the order dated 09.05.2019 of the Hon'ble National Company Law Tribunal, Kolkata Bench w.e.f. 01-04-2017. i. M/s Everlite Suppliers Private Limited; ii. M/s Keynote Suppliers Private Limited; iii. M/s VedantVincom Private Limited; iv. M/s Annex Distributors Private Limited; v. M/s LakshyaTradecom Private Limited; vi. M/s Bumpur Infrastructure Privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018 Kol. and copy of this order is placed on pages no. 31 to 41 of the paper book. On the strength of this order, he submitted that it is a judicial order determining the status of these companies, which can affect the taxability therefore the assessee should be permitted to raise all these pleas. 43. With the assistance of ld. Representatives, we have gone through the record carefully. The stand of the assessee is that six companies mentioned in the written submissions extracted supra merged with Bakshiram Uderam Holdings Pvt. Limited w.e.f. 1st April, 2017. Whatever share application money they have raised could not be tinkered with by the ld. Assessing Officer. Once in an amalgamation petition, all these facts have been recognized and their status has been merged in Bakshiram Uderam Holdings Pvt. Limited. In other words, in the hands of the successor, this aspect cannot be enquired into after the amalgamation. For this purpose, ld. Counsel for the assessee relied upon the decision of the Hon'ble Supreme Court in the case of Dalmia Power Limited (112 taxmann.com 252). Similar is the position with regard to Narsingh Ispat Udyog Pvt. Limited. Two companies have merged and the Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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