TMI Blog2019 (8) TMI 1879X X X X Extracts X X X X X X X X Extracts X X X X ..... k decision in CIT vs. Vegetable Products [ 1973 (1) TMI 1 - SUPREME COURT ] to decide this legal issue in assessee s favour. We reiterate that the search herein had not yielded any incriminating material against the assessee. Decided in favour of assessee. - Shri S.S. Godara, Judicial Member and Dr. A.L. Saini, Accountant Member For the Assessee : Shri Ramesh Goenka, Sr. Advocate Shri Amit Goenka, Advocate. For the Respondent : Shri M. Haokip, JCIT-DR. ORDER PER BENCH:- These two Revenue s appeals for assessment year(s) 2006-07 2007- 08 arise against the Commissioner of Income Tax (Appeals)-2 Guwahati s separate orders all dated 23.02.2017 passed in case No. Guwa-140, 141/2013-14, involving proceedings u/s 143(3) r.w.s 153C of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case file(s) perused. 2. Both the learned representatives are fair enough during the course of hearing that all issues raised in the instant appeal(s) are identical in nature except amount variance. We have heard the instant lis together. The same is disposed of by our detailed adjudication. 3. The Revenue s identical first and second substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 281 (Rajasthan) (v) A.C.I.T. V/s. Pratibha Industries Ltd. (2013) 141 I.T.D. 151 (Mumbai) (vi) A.C.I.T. V/s. Kamal Kumar S. Agarwal (2010) 133 TTJ 818 (Nagpur) (vii) C.I.T. V/s. Kabul Chawla (2016) 380 I.T.R. 573 (Del.) (viii) Jaipuria Infrastructure Developers (P) Ltd. V/s. A.C.I.T. I.T.A. Nos. 5522 5523/Del/2015 decided by Hon'ble ITAT, Delhi Bench B , Delhi on 27-06- 2016 (ix) Principal C.I.T. V/s. Kurele Paper Mills (P) Ltd. (2016) 380 I.T.R. 571 (Delhi) (SLP filed by the Department against this judgment dismissed (2016) 380 I.T.R. St.64) It is further submitted by the appellant that no incriminating document/material relating to the share capital/share premium was found and/or seized in the case of the appellant. The Assessing Officer has neither referred to nor relied upon any such document while making the assessment. 4.4 As far as merits of the case is concerned, the appellant has submitted the following documents with a prayer under Rule 46A of the Income Tax Rules 1962 for admission of these documents as additional evidences: (i) Chart showing name and address of the shareholders/applicants, No. of shares applied for/allotted face value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at (2016) 380 I.T.R. (St.) 64. 5.8 In the case of Jaipuria Infrastructure Developers (P) Ltd. V/s. ACIT (I.T.A. Nos. 5522 5523/Del/2015) which was decided by Hon'ble ITAT, Bench B Delhi on 27-06-2016, Hon'ble Tribunal has held as follows:- 21. However, in the backdrop of aforesaid undisputed facts discussed in the preceding paras and law laid down by Hon'ble jurisdictional High Court in the case cited as Kabul Chawla (supra), we are of the considered view that completed assessment interfered with by the AO u/s. 153A and confirmed by the Id. CIT (A) are not sustainable in the eyes of law for the following reasons:- (i) that in the instant case, undisputedly the AO has not made assessment on the basis of incriminating material unearthed during search and seizure operation conducted u/s. 132 rather proceeded u/s 153A of the Act on the basis of some pre-search enquiries to make an addition as has specifically been recorded in para 6 of the assessment order that, Pre search enquiries revealed that MIS Jaipuria Infrastructure Developers Pvt. Ltd., the flagship company involved in the real estate business of the S.K. Jaipuria group is indulged in inflating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee are hereby, allowed. 4.9 An analysis of the above case laws relied upon by the appellant clearly show that the completed assessments i.e. the non-abated assessments can be tinkered with only on the basis of any incriminating material found during the course of search and not otherwise. In view of what has been discussed above, I am of the considered view that the additions of Rs.6,69,71,870/-, Rs.11,95,78,050/- and Rs.7,24,50,080/- made on account of share capital, share premium and share application respectively are not sustainable in the eyes of law. Hence, these are deleted. 5. Even on the merits also, I find that the addition made by the Assessing Officer is not sustainable. 5.1 I find that the appellant had submitted the details of share capital and share premium in course of the assessment proceedings vide its letter dated 18.02.2015. This fact has been noted by the Assessing Officer in para 11(a) of his order. The appellant could not submit the documents in support of share capital/premium as these were not readily traceable at the time of assessment proceedings. The appellant has further contended that it was not given proper and meaningful opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT. V/s. Soft-line Creations Pvt. Ltd. (2016) 387 ITR 636 (Delhi) (ii) C.I.T. V/s. Kamdhenu Steel Alloys Ltd. (2014) 361 ITR 220 (Delhi) (iii) C.I.T. V/s. Lovely Exports Pvt. Ltd. (2009) 319 ITR (St.) 5 (S.C.) (iv) C.I.T. V/s. Sameer Bio-Tech Pvt. Ltd. (2010) 325 ITR 294 (Delhi) (v) C.I.T. V/s. Five Vision Promoters Pvt. Ltd. (2016) 380 ITR 289 (Delhi) (vi) C.I.T. V/s. Dwarkadhish Investment Pvt. Ltd. (2011) 330 ITR 298 (Delhi) (vii) C.I.T. V/s. Divine Leasing Finance Ltd. (2008) 299 ITR 268 (Delhi) In view of the above also, the addition made in respect of share capital and share premium cannot be sustained. This ground of appeal is, therefore, allowed. 3. Learned departmental representative vehemently contends during the course of hearing that the CIT(A) has erred in law and on facts in holding that sec. 153A proceedings arise only if any incriminating material has been found or seized during the course of search in case of various judicial precedents. He quotes E.N. Gopakumar vs. CIT (2016) 75 taxmann.com 215 (Ker) and CIT vs. Kesarwani Zarda Bhander ITA No.270 of 2014 (Allahabad) that such an assessment bar to assessee as the searched assessee s to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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