TMI Blog2023 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the income of the assessee under Section 68. The concurrent findings of fact recorded by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal in the 3(three) appeals of the revenue and the cross- objections of the assessee [ 2021 (12) TMI 1459 - ITAT GAUHATI] cannot be termed to be perverse, illegal or unjustified in any manner. Hence, we are of the unhesitant opinion that the appeals herein, do not involve any substantial question of law warranting admission. - HON BLE THE CHIEF JUSTICE SANDEEP MEHTA And HON BLE MRS. JUSTICE SUSMITA PHUKAN KHAUND For the Appellants : Mr. S.C. Keyal, Senior Standing Counsel, CBDT, IT (NER). For the Respondents : Dr. A. Saraf, Senior Advocate, assisted by Mr. P.K. Bora, Advocate. JUDGMENT [Sandeep Mehta, C.J.] Heard Mr. S.C. Keyal, learned senior standing counsel, CBDT, IT (NER) representing the appellants and Dr. A. Saraf, learned senior counsel, assisted by Mr. P.K. Bora, learned counsel for the respondent(s). 2. These 3(three) income tax appeals have been preferred by the revenue under Section 260A of the Income Tax Act, 1961 for challenging the judgment/order dated 10.12.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case seized documents GCL-HD-1 are incriminating materials relevant for making assessment under Section 153A and 153C of the Income Tax Act? 2. Whether, on the facts and circumstances of the case, Hon ble ITAT, Gauhati Bench, Guwahati was justified in holding that the assessee had discharged its burden of substantiation of the identity, creditworthiness and genuineness of the transactions involving receipt of share application monies? 3. Whether, in the facts and circumstances of the case, Hon ble ITAT, Gauhati Bench, Guwahati was justified in deleting the addition under Section 68 of share application money of Rs.11,85,00,000/- received from Prefer Infrastructures Private Limited, Capital Steel Trading Private Limited and Consistent Constructions Private Limited? ITA No.9/2022 1. Whether, on the facts and circumstances of the case, Hon ble ITAT, Gauhati Bench, Guwahati was justified in holding that the seized document GCL-HD-1 referred by the Assessing Officer for justifying the additions made under Section 68 of the Act did not constitute incriminating material ? Proposed substantial question of law as per the Interlocutory Application filed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat whether the seized document i.e. the Hard Drive GCL HD 1, relied upon by the Assessing Officer for justifying the reassessment under Section 153A and the additions made under Section 68 of the Act constituted incriminating material or not, is purely a question of fact. As per Dr. Saraf, the appeals do not involve any question of law much less a substantial question of law and hence, the same do not merit admission. In support of his contentions, Dr. Saraf placed reliance on the following judgments : (i) Principal Commissioner of Income Tax -Vs- Abhisar Buildwell Private Limited, reported in 2023 SCC OnLine SC 481 and (ii) Karnataka Board of Wakf -Vs- Anjuman- E Ismail Madris-Un-Niswan, reported in (1999) 6 SCC 343. 6. The proceedings of these appeals would reveal that for a significant period of time, the matters had been deferred awaiting outcome of the controversy pertaining to block assessment under Section 153A of the Income Tax Act pending before the Hon ble Supreme Court. Now, Hon ble the Supreme Court has decided the issue in the case of Abhisar Buildwell Private Limited (supra), wherein it has been held as below:- 22. For the reasons stated hereinabove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals and the cross- objections, the learned Income Tax Appellate Tribunal framed pertinent questions for adjudicating the appeals. The Question No.(A), formulated by the ITAT, reads as below:- (A) Whether the AO had validly assumed jurisdiction to issue notice u/s 153A of the Act upon the assessee for AY 2011-12 in terms of fourth proviso to Section 153A of the Act read with Explanation 2 of the Act? After discussing the material available on record, considering the submissions advanced on behalf of the revenue and the assessee, the learned Income Tax Appellate Tribunal recorded the following findings on the above question:- 8.22. From our discussion (supra) it is clear that, only if any of specified asset/s as defined in Explanation (2) is unearthed during the course of search and the acquisition of such an asset being unexplained or undisclosed, which is valued Rs. 50 Lakhs or more, that the AO can be said to be in possession of the jurisdictional fact to initiate proceedings u/s 153A for 7th-10th AY (AY 2011-12, in the instant case). Now, to understand the alternate ground of argument of Shri Dudhwewala, let us for the sake of argument, assume that the AO had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In such a scenario, the AO has no other option but to drop the assessment proceedings. He may however proceed again, if there is any new/fresh jurisdictional fact before him, of course, subject to limitation. For this conclusion of ours, we rely on the ratio laid down in the judgments of CIT Vs Jet Airways (supra) Ranbaxy Laboratories Ltd. vs. CIT (supra). Though these judgments were rendered in the context of reopening u/s. 147 of the Act, however the ratio decidendi will apply in the present case, because, like Section 147/148 of the Act, the AO gets the authority to assess/reassess the income of a searched person or other person u/s 153A/153C for the extended assessment years (7th to 10th AYs) only if he has in his possession the jurisdictional fact, as discussed. If the AO is found to have assumed jurisdiction erroneously on mistaken belief about the existence of jurisdictional fact or ultimately drops it (after making enquiries in the course of assessment) while framing the reassessment order; then the AO cannot legally proceed further with the assessment/reassessment and/or make any other items of additions/disallowances, because the jurisdictional fact on the strength of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahati, the settled law is clear that, in the case of unabated assessments of an assessee, no addition is permissible in the order u/s 153A unless it is based on any tangible cogent incriminating material found during the course of search. 9.8 To this extent, even the Ld. DR, in the course of hearing, did not dispute this legal position. According to him however, the addition/s made by the AO in the AYs 2011-12 to 2015-16 was based on seized incriminating document, GCL-HD-1,which was the groupwise share holding pattern of the assessee found from the computerized books of account and hence, he submitted that the above discussed judicial principle was not applicable in the given facts of the present case. According to him, this piece of evidence extracted from the books of accounts was incriminating enough to justify the additions made u/s 68 of the Act. He contended that the Ld. CIT(A) had erred in holding that GCL-HD-1 was not incriminating in nature and therefore urged that the additions made by the AO be restored. Per contra, the Ld. AR supported the order of the Ld. CIT(A). 9.9 Heard both the parties. In light of the above settled position of law, which has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t than what was recorded in the regular books and therefore the entries in the books did not represent true and correct state of affairs i.e. the assessee has undisclosed income/expense outside the books or that the assessee is conducting income earning activity outside the books of accounts or all the revenue earning activities are not disclosed to the tax authorities in the books regularly maintained or the returns filed with the authorities from time to time is not true etc. The nature of the evidence or information gathered during the search should be of such nature that it should not merely raise doubt or suspicion but should be of such nature which would prima facie show that the real and true nature of transaction between the parties is something different from the one recorded in the books or documents maintained in ordinary course of business. In some instances, the information, document or evidence gathered in the course of search, may raise serious doubts or suspicion in relation to transaction reflected in regular books or documents maintained in the ordinary course of business, then also in such an event the AO is not permitted to straightaway treat such material as &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal pertaining to the reopening of the assessment for the accounting years 2011-12 to 2015-16:- 9.15 Having examined the contents of GCL-HD-1, we find ourselves in agreement with the above findings of the Ld. CIT(A) that this document was a share- holding pattern document prepared by way of secretarial compliance report, which as the assessee has shown, was filed along with the company s annual return in Form MGT-7 on 28-11-2017 with the Registrar of Companies and was therefore available in the public domain (much prior to the date of search). It is found to contain the details of the name of shareholders, their amount and percentage of shareholdings. In our considered view, this document was a regular business document having no incriminating content whatsoever. Nothing whatsoever has been brought on record by the Revenue to correlate or link as to how the contents of this statement led to unearthing of unexplained cash credit by the AO and therefore the aforesaid factual finding of the Ld. CIT(A) remains uncontroverted. Hence, we do not see any reason to interfere with the order of the Ld. CIT(A) on this aspect and hold that the seized document GCL- HD-1 did not constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... current findings of fact that the same does not constitute incriminating material so as to justify the re- opening of the assessment by virtue of Sections 153A of the Income Tax Act for the unabated/completed assessments. 12. In wake of the discussion made hereinabove and keeping in view the law as laid down by Hon ble the Supreme Court in the case of Abhisar Buildwell Private Limited (supra), followed by this Court in a recent judgment dated 14.08.2023 passed in ITA No.5/2022 (The Commissioner of Income Tax Anr. -Vs- Fortune Vanijya Private Limited), we have no hesitation in holding that the Hard Drive GCL HD 1 collected by the jurisdictional authority during the search carried out in the premises of the assessee in the year 2017 does not constitute incriminating material so as to justify reopening of assessment of unabated/completed assessments under Sections 153A of the Income Tax Act and addition to the income of the assessee under Section 68 of the Income Tax Act. The concurrent findings of fact recorded by the Commissioner of Income Tax (Appeals) vide judgment dated 18.03.2020 and the Income Tax Appellate Tribunal in the 3(three) appeals of the revenue and the cross- obj ..... 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