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TMI Blog2025 (5) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 132 of the Act was carried out on 28/03/2015 in the case of M.M. Aggarwal Group of cases. The case of the assessee was also covered in the search. Consequent to the search a notice u/s 153A was issued to the assessee on 2/11/2016 and in response to the said notice the assessee filed return on 7/11/2016 declaring loss of Rs. 49,187/-. The Assessing Officer in the course of assessment proceedings noticed that assessee received share capital during the assessment year under consideration i.e. 2014-15 from two companies namely Enrich Agro Food Products Pvt. Ltd. and Indo Gulf Infrastructure and Investment and four other individuals which are tabulated at page 5 of the assessment order. The AO required assessee to produce the shareholders an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting entities and the Assessing Officer has merely accepted the appraisal report of the Investigation Wing without meeting the touchstone test of sec. 68 of the Act. Therefore, the Ld. CIT(A) was of the view that the addition cannot be sustained u/s 68 of the Act. The Ld. CIT(A) while coming to such opinion observed as under: - "5.1 I have considered the submissions of the Ld. AR, assessment order and case laws cited in this regard. The AO invoked the process u/s 153A after search on appellant group on 28.03.2015 and on receipt of appraisal report from the DI (Investigation) with the allegation that the appellant company has received unexplained credit in its book u/s 68 of the IT Act. All the grounds of appeal are dealt with together bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entities, financials and creditworthiness of the investor companies and genuineness of transaction and source and availability of fund by investors, I am of the considered view that the AO has merely accepted the appraisal report of the Investigation Wing without meeting the touchstone tests of section 68 like - credit worthiness, identities and genuineness of transaction. Further A.O has made such addition stating that the income declared by the investors is lesser than the investment made by them which in my opinion has no criteria it is only source and availability of funds which remain the factor to observe. Accordingly the addition made by the A.O. u/s 68 of the Act is deleted. 5.5 Ld AR also placed reliance on the judgments in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 153A of the Act. In Principal Commissioner of Income Tax Central-2, New Delhi v. Meeta Gutgutia (supra) this Court had the occasion to extensively discuss the decision in Smt. Dayawanti Gupta v. CIT (supra) to point out why the said decision was distinguishable in its application to the facts of the former case. However, since the same arguments have been advanced by the Revenue in the present case, the sold decision in Smt. Dayawanti Gupta vs. CIT (supra) is being again discussed herein. 32. In Smt. Day aw anti Gupta v. CIT (supra) the Assessees were dealing in the business of pan masala, gutkha, etc. Firstly, the Assessees therein were, by their own admission not maintaining regular books of accounts. Secondly, they also admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra). The Court in Commissioner of Income Tax (Central-Ill) v. Kabul Chawla (supra) had also in Commissioner of Income Tax (Central-Ill) v. Kabul Chawla (supra). Continental Warehousing Corporation (Nhava Sheva) Ltd. discussed and concurred with the decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACCT (2013) 36 taxman 523 (Raj) which had held that the assessment in respect of each of the six assessment years, preceding the year of search is a separate and distinct assessment. "It was further held in the said decision that" If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h and other evidences placed on record by the assessee are contrary to the allegation made by Shri Tarun Goyal in his statement. - Conclusion - 44. Accordingly the question framed by the Court in ATA Nos. 11, 12 and 21 of 2017 by the order dated 21st March, 2017 is answered in the negative i.e. in favour of the Assessee and. against the Revenue by holding that the additions made under Section 68 of the Act on account of the statements made by the Assessee's Directors in the course of search under Section 132 of the Act were rightly deleted by the ITAT." 5.7 Respectfully following the above judgment, which is on identical factual matrix, it can be reasonably inferred that since no material linking the share application money was foun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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