Income Tax Appellate Tribunal - Delhi
Acit, New Delhi vs M/S. Sindhu Holdings Ltd., New Delhi on 5 January, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES "B": DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA.Nos.449, 450 & 451/Del./2016
Assessment Years 2007-08, 2009-2010, 2010-2011
The ACIT, Central Circle-17, M/s. Garuda Imaging &
Room No.101, Hall No.1, vs. Diagnostics Pvt. Ltd., 129,
1st Floor, ARA Centre, E-2, Transport Centre, Punjabi
Jhandewalan Extension Bagh, New Delhi - 110035
New Delhi. PAN AAACG4168N
(Appellant) (Respondent)
C.O.No.163, 164 & 165/Del./2016
Arising out of
ITA.Nos.449, 450/Del./2016
Assessment Years 2007-2008, 2009-2010 & 2010-2011
M/s. Garuda Imaging & The ACIT, Central Circle-17,
Diagnostics Pvt. Ltd., 129, Room No.103, Hall No.1, 1st
Transport Centre, Punjabi vs., Floor, ARA Centre, E-2,
Bagh, New Delhi - 110035 Jhandewalan Extension,
PAN AAACG4168N New Delhi.
(Cross Objector) (Respondent)
ITA.Nos.446 & 447/Del./2016
Assessment Years 2008-2009 & 2010-2011
The ACIT, Central Circle-17, M/s. Sindhu Holdings Ltd.,
Room No.101, Hall No.1, vs. 17, Vasant Enclave, Rao Tula
1st Floor, ARA Centre, E-2, Rao Ram Marg, New Delhi
Jhandewalan Extension PIN - 110 057.
New Delhi. PAN AAACS2545P
(Appellant) (Respondent)
2
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016
ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016
M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and
M/s. Sindhu Holdings Ltd., New Delhi.
C.O.Nos.121 & 122/Del./2016
Arising out of
ITA.Nos.449 & 447/Del./2016
Assessment Years 2008-2009 & 2010-2011
M/s. Sindhu Holdings Ltd., The ACIT, Central Circle-17,
17, Vasant Enclave, Rao Tula Room No.103, Hall No.1, 1st
Rao Ram Marg, New Delhi vs., Floor, ARA Centre, E-2,
PIN - 110 057. Jhandewalan Extension,
PAN AAACS2545P New Delhi.
(Cross Objector) (Respondent)
For Revenue : Ms. Rachna Singh, CIT-D.R.
Shri Sajjan Kumar Tulsiyan,
For Cross-Objector : Advocate
Ms. Nisha Rachh, C.A.,
Shri Karan Kumar, C.A.
Date of Hearing : 07.12.2017
Date of Pronouncement : 05.01.2018
ORDER
PER BHAVNESH SAINI, J.M.
This order shall dispose of all the above departmental appeals and cross objections filed in the case of two different assessees of the same group. Since issues are identical and are related to group concerns, therefore, all appeals are decided together. 3
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
2. We have heard the Learned Representatives of both the parties and perused the material on record. The Departmental Appeals as well as Cross Objections by Assessee are decided as under.
ITA.No.449/Del./2016 & CO.No.163/Del./2016 - (A.Y. 2007-2008) :
3. The Departmental Appeal as well as Cross Objection by assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2007-2008.
4. Briefly, the facts of the case are that search, seizure and survey operation under section 132/133A of the I.T. Act were conducted on 12th April, 2012 in the case of the assessee along with other cases of Aryan Sanik group at various residential and business premises. In pursuance to notice under section 153A of the Act issued on 23rd October, 2003, assessee filed return of income. The A.O. after giving opportunity of being heard to the assessee, completed the assessment under section 143(3) r.w.s.153A of the I.T. Act on 30th March, 2015. The A.O. made addition of Rs.3.35 crores of unexplained share application money under section 68 of the I.T. 4 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
Act, which was challenged before Ld. CIT(A). The A.O. noted that assessee has received amount of Rs.3.35 crores as share application money in assessment year under appeal from 07 parties namely (1) M/s. Reward Vinimay Pvt. Ltd., (2) M/s. Suvidha Stock Broking Services Pvt. Ltd., (3) M/s.Elgin Sales Promotion Pvt. Ltd., (4) M/s. Oleander Manufacturers & Credit Pvt. Ltd., (5) M/s. Echolac Vinimay Pvt. Ltd., (6) M/s. Simpro Vanijya Pvt. Ltd., and (7) M/s. Galore Suppliers Pvt. Ltd., The A.O. noted that assessee has filed name of the parties, addresses of the parties, PAN of the parties, bank statement of the parties (except of party No.2), confirmation of all parties, ITR of all parties, but copy of audited accounts of the parties are not filed. The A.O. accordingly, treated the same as unexplained under section 68 of the I.T. Act, 1961 and made the addition accordingly.
5. The assessee submitted before Ld. CIT(A) that assessee has received share application money from the above parties which was supported by all the above documentary evidences and source of the same is explained. The assessee cannot be asked to prove 5 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
source of the source. Since the assessee furnished complete details of all the share applicant companies, therefore, initial burden upon assessee has been discharged to prove the conditions of Section 68 of the I.T. Act. The assessee also explained that in some of the cases, there was change in the name and summon under section 131 have been received by them and duly complied. The assessee relied upon several decisions in support of the contention that assessee proved genuine share application money.
6. The Ld. CIT(A) noted that A.O. has made addition due to reason of non-submission of bank statement of M/s. Suvidha Stock Broking Services Pvt. Ltd., and in other cases since no audited accounts are filed, therefore, addition was made. Ld. CIT(A) on the basis of the material on record found that assessee has proved the identity, creditworthiness and genuineness of the share applicants, by submitting the above documentary evidence. The investors are corporate entities and their accounts are in public domain on the portal of Registrar of Companies, Ministry of Corporate Affairs. The Ld. CIT(A), therefore, found that non-submission of the audited 6 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
accounts of Investor companies, is not sufficient to make the addition under section 68 of the I.T. Act. Further, the assessee cannot be asked to prove source of the source. Ld. CIT(A) also found that in the case of 02 parties, amounts have been returned in subsequent year. The Ld. CIT(A) accordingly, deleted the addition. The Department in appeal challenged the order of Ld. CIT(A) in deleting addition of Rs.3.35 Crores under section 68 of the I.T. Act.
7. The Ld. D.R. relied upon the order of the A.O. and relied upon the following decisions :
(i) CIT vs. Nipun Builders & Developers (P.) Ltd., (2013) 30 taxman.com 292.
(ii) CIT vs. Nova Promoters Finlease (P.) Ltd., (2012) 18 taxman.com 217.
(iii) CIT vs. N.R. Portfolio Pvt. Ltd., (2013) 29 taxman.com 291.
(iv) CIT vs. Focus Exports (P.) Ltd., (2014) 51 taxman.com 46
8. On the other hand, Learned Counsel for the Assessee, reiterated the submissions made before the authorities below and submitted that entry in the books of account cannot be treated be recovered during the search. In this case, nothing was found against 7 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
the assessee during the course of search. The A.O. did not make any enquiry on the documents filed by assessee. The A.O. without conducting any enquiry, made the addition. Therefore, Ld. CIT(A), correctly deleted the addition. He has also submitted that CIT(A) has examined the balance-sheet of the investor company also. There were no adverse material found during the course of search to prove that share application money was bogus. He has relied upon the decision of the Hon'ble Supreme Court in the case of CIT vs. Orissa Corporation P. Ltd., 159 ITR 78 and other decisions in the written submissions.
9. We have considered the rival submissions and perused the material on record. During the course of search nothing was found against the assessee as regards the share application money received by assessee from various investor companies. The A.O. from the books of account of the assessee found that assessee-company has received fresh share application money of the impugned amount from the above parties. The A.O. asked the assessee to prove the genuineness of the transaction in the matter with supporting 8 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
documents. The assessee filed names of the investors, addresses of the investors, PAN of the investors, bank statements of the investors except in one case, confirmation of the investors along with acknowledgment of filing of I.T. Return. The investors are therefore, assessed with the Income Tax Department. The A.O. did not make any further enquiry in the matter and just disbelieved the explanation of assessee because the balance sheet of the investors have not been filed. The A.O. noted that there were high value transactions conducted by the Investor Companies. It may be noted here that A.O. did not dispute the identity of the investor companies and merely on account of low income declared by the investor company, was of the view that their creditworthiness is not explained. The A.O. on the one hand has mentioned in the assessment order that bank account of the investor company reveal that there are high value transactions carried out through the bank. Therefore, creditworthiness of the investor company should not have been doubted. The A.O. did not found if any cash have been deposited in the accounts of the investor before making investment in assessee company. The assessee produced sufficient evidence before A.O. to 9 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
discharge the initial onus upon it to prove the identity, creditworthiness and genuineness of the transaction in the matter. Further, the A.O. did not make any investigation on the documentary evidences furnished by the assessee. The A.O. did not ask for the production of the investor company for their examination. The assessee also explained before Ld. CIT(A) that in some cases there is change in their name and address which have been appreciated by the Ld. CIT(A). No enquiry have been made directly or indirectly by the A.O. on the documentary evidences filed by assessee at assessment stage. Since no adverse material was found during the course of search to prove that share application money received by assessee was bogus or was an arranged affair of the assessee, the A.O. was not justified in making the addition under section 68 of the I.T. Act against the assessee. We may refer to following decisions in support of our findings.
9.1. Decision of the Hon'ble Supreme Court CIT vs Lovely Exports P.Ltd. [2008] 216 CTR 0195 in which it was held as under : 10
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
"If the share application money is received by the assessee company from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen their individual assessments in accordance with law, but it cannot be regarded as undisclosed income of assessee company."
9.2. Decision of Delhi High Court in the case of CIT vs Kamdhenu Steel & Alloys Ltd. & Ors. 361 ITR 0220 (Delhi) in which it was held as under :
"Once adequate evidence/material is given, which would prima facie discharge the burden of the assessee in proving the identity of shareholders, genuineness of the transaction and creditworthiness of the shareholders, thereafter in case such evidence is to be discarded or it is proved that it has "created"
evidence, the Revenue is supposed to make thorough probe before it could nail the assessee and fasten the assessee with such a liability under s.68; AO failed to carry his suspicion to 11 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
logical conclusion by further investigation and therefore addition under s.68 was not sustainable."
9.3. Judgment of Hon'ble Delhi High Court in the case of CIT vs Vrindavan Farms P.Ltd. etc. in ITA No.71/2015 dated 12.08.2015 (Delhi) in which it was held as under :
"The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their return of income. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the documents submitted by the assessee, the departmental appeal was dismissed by the Hon'ble High Court." 9.4. Decision of Hon'ble Delhi High Court in the case of CIT vs. Laxman Industrial Resources Pvt. Ltd., ITA.No.169 of 2017 dated 14th March, 2017, in which it was held as under :
"The CIT(A) took note of the material filed by the assessee and provided opportunity to the AO in Remand proceedings. The AO merely objected to the material furnished but did not undertake any verification. The CIT(A) deleted the addition by relying upon the decision of the Hon'ble Apex Court in the case of Lovely Exports Pvt.Ltd. (supra) and judgement of Delhi High Court in the 12 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
case of CIT vs Divine Leasing & Finance Ltd. [2008] 299 ITR 268. The ITAT confirmed the opinion of the Ld.CIT(A). Hon'ble High Court in view of the above findings noted that the assessee had provided several documents that could have showed light into whether truly the transactions were genuine. The assessee provided details of share applicants i.e. copy of the PAN, Assessment particulars, mode of amount invested through banking channel, copy of resolution and copies of the balance sheet. The AO failed to conduct any scrutiny of the document, the departmental appeal was accordingly dismissed. 9.5. Decision of Hon'ble Supreme Court in the case of Earthmetal Electrical Pvt. Ltd., vs. CIT dated 30th July, 2010 in SLP.No.21073 of 1999, in which it was held as under :
"We have examined the position, we find that the shareholders are genuine parties. They are not bogus and fictitious therefore, the impugned order is set aside."13
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
9.6. Decision of Hon'ble Delhi High Court in the case of CIT vs. Divine Leasing & Finance Ltd., 299 ITR 268, in which it was held as under :
"No adverse inference should be drawn if shareholders failed to respond to the notice by A.O. "
9.7. Decision of Hon'ble Madhya Pradesh High Court in the case of CIT vs. Peoples General Hospital Ltd., (2013) 356 ITR 65, in which it was held as under :
"Dismissing the appeals, that if the assessee had received subscriptions to the public or rights issue through banking channels and furnished complete details of the shareholders, no addition could be made under section 68 of the Income-tax Act, 1961, in the absence of any positive material or evidence to indicate that the shareholders were benamidars or fictitious persons or that any part of the share capital represented the company's own income from undisclosed sources. It was nobody's case that the non-resident Indian company was a bogus or non-existent company or that the amount subscribed by 14 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
the company by way of share subscription was in fact the money of the assessee. The assessee had established the identity of the investor who had provided the share subscription and that the transaction was genuine. Though the assessee's contention was that the creditworthiness of the creditor was also established, in this case, the establishment of the identity of the investor alone was to be seen. Thus, the addition was rightly deleted. CIT v. LOVELY EXPORTS P. LTD. [2009] 319ITR (St.) 5 (SC) applied."
9.8. Decision of Hon'ble Delhi High Court in the case of CIT vs.
(i) Dwarakadhish Investment P. Ltd., (ITA.No. 911 of 2010) and (ii) Dwarkadhish Capital P. Ltd., (ITA.No.913 of 2010) (2011) 330 ITR 298 (Del.) (HC), in which it was held as under :
"In any matter, the onus of proof is not a static one. Though in section 68 of the Income Tax Act, 1961, the initial burden of proof lies on the assesses yet once he proves the identity of the creditors/share applicants by either furnishing their PAN number or income-tax assessment number and shows the genuineness of transaction by showing money in his books either by account 15 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke section
68. One must not lose sight of the fact that it is the Revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the "source of source". The assessee-company was engaged in the business of financing and trading of shares. For the assessment year 2001-02 on scrutiny of accounts, the Assessing Officer found an addition of Rs.71,75,000 in the share capital of the assessee. The Assessing Officer sought an explanation of the assessee about this addition in the share capital. The assessee offered a detailed explanation. However, according to the Assessing Officer, the assessee failed to explain the addition of share application money from five of its subscribers. Accordingly, the Assessing Officer made an addition of Rs.35,50,000/- with the aid of section 68 of the Act, 1961 on account of unexplained cash credits appearing in the books of the assessee. However, in appeal, the 16 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
Commissioner of Income-tax (Appeals) deleted the addition on the ground that the assessee had proved the existence of the shareholders and the genuineness of the transaction. The Income-tax Appellate Tribunal confirmed the order of the Commissioner of Income-tax (Appeals) as it was also of the opinion that the assessee had been able to prove the identity of the share applicants and the share application money had been received by way of account payee cheques. On appeal to the High Court: Held, dismissing the appeals, that the deletion of addition was justified."
9.9. Decision of Hon'ble Delhi High Court in the case of CIT vs. Winstral Petrochemicals P. Ltd., 330 ITR 603, in which it was held as under :
"Dismissing the appeal, that it had not been disputed that the share application money was received by the assessee-company by way of account payee cheques, through normal banking channels. Admittedly, copies of application for allotment of shares were also provided to the Assessing Officer. Since the 17 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
applicant companies were duly incorporated, were issued PAN cards and had bank accounts from which money was transferred to the assessee by way of account payee cheques, they could not be said to be non-existent, even if they, after submitting the share applications had changed their addresses or had stopped functioning. Therefore, the Commissioner (Appeals) and the Tribunal were justified in holding that the genuineness of the transactions had been duly established by the assessee."
9.10. Decision of Hon'ble Delhi High Court in the case of CIT vs. Value Capital Services Pvt. Ltd., (2008) 307 ITR 334 (Del.) (HC), in which it was held as under :
"Dismissing the appeal, that the additional burden was on the Department to show that even if the share applicants did not have the means to make the investment, the investment made by them actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. No substantial question of law arose."18
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
10. Considering the facts of the case in the light of material on record, it is clear that assessee produced sufficient documentary evidences before A.O. to prove the ingredients of Section 68 of the I.T. Act. The A.O. however, did not make any further enquiry on the documents filed by the assessee. The A.O. thus, failed to conduct any enquiry and scrutiny of the documents at assessment stage and merely suspected the transaction between investor companies and assessee because the investors company were from Kolkata. The A.O. thus, did not perform his duties at the assessment stage so as to make addition against the assessee. The A.O. did not bring any evidence on record that the investments made by the investor companies were actually emanated from the coffers of the assessee company so as to enable it to be treated as undisclosed income of the assessee. The A.O. cannot ask the assessee to prove source of the source. Therefore, the facts and circumstances clearly proved that assessee discharged initial onus to prove identity of the investor companies, their creditworthiness and genuineness of the transaction in the matter. The Ld. CIT(A) on proper appreciation of evidence before him, correctly deleted the addition. No interference is 19 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
called for in the matter. The Ld. CIT(A) correctly deleted the addition of Rs.3.35 crores under section 68 of the I.T. Act. The decisions relied upon by the Ld. D.R. would not support the case of the Revenue in view of the fact that no enquiry have been taken by A.O. in this case to dispute the documentary evidences filed by the assessee. The departmental appeal has no merit and is accordingly dismissed.
11. The assessee in the cross-objections has raised several grounds. Ground Nos. 2, 3 and 4 are raised in support of the order of the Ld. CIT(A) in deleting the addition of Rs.3.35 crores under section 68 of the I.T. Act. Since we have dismissed the Departmental Appeal on this issue, therefore, no further findings are required on the Ground Nos. 2, 3 and 4 of the cross objections.
12. On Ground No.1 of the cross-objection, the assessee submitted that the assessment order passed by the A.O. and subsequently the departmental appeal are bad in law and void abinitio as the same have been framed by the Revenue Department on a merged entity, which is no longer in existence. 20
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
13. Learned Counsel for the Assessee submitted that the assessee company M/s. Garuda Imaging and Diagnostics Pvt. Ltd., M/s. Sindhu Holdings Ltd., and other companies have merged with M/s. Bhandari Consultancy and Finance Ltd., vide judgment dated 19th January, 2011 passed by the Hon'ble Delhi High Court in a Scheme of Amalgamation pursuant to Section 391 and 394 and other relevant provisions of the Companies Act. Copy of the judgment dated 19th January, 2011 is filed at page-75 of the paper book. He has referred to PB-116 of the paper book which is judgment of the Hon'ble Delhi High Court dated 19th January, 2011 in which the assessee company merged with M/s. Bhandari Consultancy and Finance Ltd., from the appointed date i.e., 1st April, 2009. He has submitted that A.O. passed the assessment order on 30th March, 2015 on a non- existing assessee company. He has also submitted that on the date of search on 12th April, 2012, on the date of issue of notice under section 153A of the I.T. Act on 23rd October, 2013, and also on the date of issue of notice under section 142(1) and 143(2) of the I.T. Act, and resultant assessment order passed under section 153A/143(3) on 30th March, 2015 on a non-existing entity, is void abinitio and bad 21 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
in law. The A.O. passed the assessment order in the name of non- existing company (assessee). He has therefore, submitted that notices issued and assessment framed on a non-existing entity were illegal, null and void. In support of his contention, he has relied upon the several decisions of the Tribunal and others.
14. On the other hand, Ld. D.R. relied upon the order of the A.O.
15. We have considered the rival contentions. The assessee has filed judgment of the Hon'ble Delhi High Court dated 19th January, 2011, according to which, assessee-company has merged with M/s. Bhandari Consultancy and Finance Ltd., in the Scheme of Amalgamation pursuant to Sections 391 and 394 of the Companies Act vide Company Petition 283/10 and Company Application No.74 of 2010. The appointed date is 1st April, 2009. The search is however, conducted on 12th April, 2012 and on the date of search i.e., on 12th April, 2012, the assessee-company did not exist because it has already merged with M/s. Bhandari Consultancy and Finance Ltd. Notice under section 153A was issued on 23rd October, 2013 and on 22 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
that date also the assessee company did not exist as it has already merged with the above company. The A.O. passed the assessment order under section 153A/143(3) on 30th March, 2015 in the name of assessee-company which would not be in existence as per Law. The above judgment of the Hon'ble Delhi High Court clearly support the contention of the Learned Counsel for the Assessee that assessee ceased to exist on the appointed date i.e., 01.04.2009. The department came to know later on about merger of the assessee- company with transferee company which would not make any difference. Even on the date of search and issue of notice under section 153A against the assessee, the assessee-company did not exist. Therefore, issue of notice under section 153A itself was void abinitio and bad in law. The Hon'ble Delhi High Court in the case of BDR Builders & Developers Pvt. Ltd., 397 ITR 529 held that when assessee company ceases to exist from appointed date, was not liable for assessment under section 153A of the I.T. Act. The assessment under section 153A is void abinitio. The Hon'ble Delhi High Court similarly in the case of Maruti Suzuki Ltd., 397 ITR 681 held that assessment order in the name of amalgamating company is not a 23 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
procedural irregularity. Assessment order in the name of non- existing amalgamating company untenable. Considering the facts and circumstances of the case and in the light of judgment of the Hon'ble Delhi High Court dated 19th January, 2011, we are of the view that assessment framed against the assessee under section 143(3)/153A is bad in law and void abinitio. Resultantly, we set aside the orders of the authorities below and quash the assessment order. In the result, ground No.1 of cross objection of assessee is allowed.
16. On ground No.5 of the cross objection, assessee submitted that since no incriminating material was discovered during the course of search under section 132 and original assessment had been completed, in terms of the ratio of the decision of Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla 380 ITR 573, no addition was warranted in assessment under section 143(3) r.w.s. 153A of the I.T. Act.
17. After considering the rival contentions, we are of the view that the issue is covered in favour of the assessee by the judgment of 24 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) in which it was held as under :
"Completed assessments can be interfered with by Assessing Officer while making assessment under section 153A only on basis of some incriminating material unearthed during course of search which was not produced or not already disclosed or made known in course of original assessment."
17.1. Similar view was taken by the Hon'ble Delhi High Court in the case of Pr. CIT vs. Meeta Gut Gutia 395 ITR 526 in which it was held as under :
"69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission.25
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts.
71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs.
Conclusion
72. To conclude :
(i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153 A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04."
17.2. It is not in dispute that on the date of search, assessment for assessment year under appeal under section 143(3) dated 26 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
30.10.2009 already stood completed. It is also not in dispute that no incriminating material was unearthed during the search, no addition could be made to the income already assessed. The A.O. made addition under section 68 of the Act on the basis of the entries recorded in the books of account of the assessee. Therefore, issue is covered in favour of the assessee by the above judgments of the Hon'ble Delhi High Court. The A.O. thus, cannot make any addition including under section 68 of the I.T. Act against the assessee. On this ground also, we set aside the orders of the authorities below and delete the entire addition. In the result, ground No.5 of the cross objection is allowed.
17.3. No other point have been argued or pressed by the parties.
18. In the result, Departmental Appeal is dismissed and Cross Objection of the assessee is allowed.
ITA.No.450/Del./2016 & CO.No.164/Del./2016 (A.Y. 2009-2010) :
19. The Departmental Appeal as well as Cross Objections by assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2009-2010. 27
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
20. In the Departmental Appeal, on Ground Nos. 1, 2 and 4, the Revenue challenged the deletion of addition of Rs.4.50 crores on account of unexplained share application money under section 68 of the I.T. Act, 1961. This issue is same as has been decided above in A.Y. 2007-2008. Therefore, following the order for A.Y. 2007-2008 (supra), we dismiss ground Nos. 1, 2 and 4 of the Revenue.
21. On Ground No.3, the Revenue challenged the reduction of addition of Rs.7,85,336 on account of disallowance under section 14A read with Rule 8D of the I.T. Act to Rs.86,792.
22. Briefly, the facts of the case are that during the year assessee had earned dividend income only on some investments. Assessee had invested in shares by unlisted companies and the capital gain, irrespective of the nature of gains, is taxable under I.T. Act. Further, it is also worthwhile to mention that investments were made in group companies for the dual purposes i.e., control over management of companies and business growth. Earning dividend was never the objectives of the investment group companies. For calculating the average investments, for the purpose of Rule 8D, total 28 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
investments has been considered instead of investments attributable to exempt income. It was submitted that as per clause (iii) of Rule 8D, only investments which are attributable to exempted income must be considered for calculating average investments. During the course of assessment proceedings, assessee had claimed that assessee had not incurred any expenditure for earning any exempt income (although assessee had not earned any exempt income). The assessee challenged the action of the A.O. in exercising the powers for making assessment as denovo assessment rather than making assessment on the basis of incriminating documents found. The year under appeal is not due for regular assessment on the date of search and even no incriminating documents calling for disallowance under section 14A were unearthed during the search. The A.O. had not recorded any satisfaction and mechanically applied Section 14A read with Rule 8D. The assessee had offered disallowance under section 14A amounting to Rs.96,743, Rs.Nil and Rs.Nil in respect of A.Ys. 2008-09 to 2010-2011 respectively.
29
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
23. The A.O. did not deal with explanation of assessee that no expenditure for earning exempt income was incurred. He has stated that assessee had made certain investments in equity shares, income on which i.e., dividend is exempt from tax. He took average of opening and closing amount of investment and calculated the disallowance @ ½ % in accordance with Rule 8D. The assessee did not give details of expenses attributable for earning dividend income and did not quantify disallowance under section 14A. The A.O. admitted that disallowance of Rs.96,743 had been made in the ITR filed under section 14A, however, no working have been given. 23.1. The assessee challenged the findings of the A.O. before Ld. CIT(A). The assessee explained that no expenditure was incurred in respect of exempt income earned, if any. The A.O. did not record his satisfaction regarding computation submitted by the assessee as contemplated under section 14A(2) of the I.T. Act. No incriminating material was found with regard to this issue. The assessee relied upon several decisions in support of the contention that addition is wholly unjustified. The assessee further prayed that in case the 30 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
addition has to be made, then the calculation should be restricted to the amount of investment made in the listed company which was exempt. The assessee filed working according to which, disallowance under section 14A read with Rule 8D works out to Rs.78,393. 23.2. The Ld. CIT(A) accepted the contention of assessee and noted that it is well settled that A.O. should first consider the amount of expenditure claimed to have been incurred while earning exempt income. In case, he has not satisfied, then, he should reject assessee's contention and take recourse to Rule 8D. Further, section 14A comes into play where exempt income has been earned during the relevant period. The Ld. CIT(A) found that assessee has not incurred any expenditure for earning exempt income. The assessee has agreed before Ld. CIT(A) that in view of its having earned some exempt income, amount on such investment, from which exempt income was earned, should be included for the purpose of computing disallowance under section 14A read with Rule 8D. In the case of investment in Private Limited or Unlisted Companies, the dividend may be exempt but LTCG and STCG arising on sale of such 31 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
investments is exempt. The Ld. CIT(A), accordingly, deleted the addition and restricted the addition to Rs.86,792.
24. After considering the rival contentions, we do not find any merit in this ground of appeal of the Revenue. The working given by the assessee has not been disputed and further no satisfaction as required under section 14A have been recorded by the A.O. that assessee did incur any expenditure to earn exempt income. The Hon'ble Punjab & Haryana High Court in the case of Metalman Auto Ltd., 336 ITR 434 held that no expenses incurred for earning exempt income Section 14A do not apply. The Hon'ble Delhi High Court in the case of I.P. Support Services India P. Ltd., 378 ITR 240 held that no disallowance under section 14A be made in the absence of satisfaction. In the case of Abhishek Industries Ltd., 380 ITR 652, the Hon'ble Punjab & Haryana High Court held that onus is on the A.O. to record satisfaction that interest bearing funds used for investment to earn tax free income. In the present case, the A.O. did not deal with contention of assessee in assessment order and did not record any satisfaction that assessee did not incur any expenditure to earn exempt income. The Ld. CIT(A), therefore, correctly allowed 32 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
part relief of assessee on this ground. Ground No.3 fails and is dismissed.
25. On Ground Nos.2, 3 and 5 of the cross objection, assessee merely raised the same point in support of the order of the Ld. CIT(A) in deleting the addition of Rs.4.50 crores under section 68 of the I.T. Act and deleting the addition under section 14A read with Rule 8D of I.T. Rules.
26. Since, we have dismissed departmental appeal on these grounds, therefore, these grounds require no further finding.
27. On Ground Nos.1 and 4 of the cross objection, assessee challenged the orders of the authorities below to be bad in law and void abinitio as the same have been framed by the Revenue Department on merged entity and that since no incriminating material was discovered in the course of search under section 132 of the I.T. Act and original assessment had been completed, therefore, no addition can be made in assessment order under section 143A in view of decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra).
33
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
28. These grounds are same as have been decided in favour of the assessee in A.Y. 2007-2008 above. Following the reasons for decision, we set aside the orders of the authorities below and quash the assessment order under section 153A of the I.T. Act and delete all the additions. Ground Nos. 1 and 4 of the cross objection of the assessee are allowed.
29. In the result, ITA.No.450/Del./2016 of the Department is dismissed and C.O.No.164/Del./2016 of the Assessee is allowed. ITA.No.451/Del./2016 & CO.No.165/Del./2016 - A.Y. 2010-2011 :
30. The Departmental Appeal as well as Cross Objections by assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2010-2011.
31. In Departmental Appeal, the Revenue challenged the deletion of addition of Rs.10.74 crores on account of unexplained share application money under section 68 of the I.T. Act and restricting the addition under section 14A of the I.T. Act from Rs.3,82,763 to Rs.1,27,895.
34
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
32. The Assessee in the Cross Objection has supported the order of the Ld. CIT(A) in deleting additions under section 68 and 14A of the I.T. Act on ground Nos. 2, 3 and 5 of the cross objection. The C.O. is, therefore, filed in support of the order of the Ld. CIT(A) in deleting both the additions. Therefore, no further finding is required on dismissing the departmental appeal.
33. On ground Nos. 1 and 4 of the cross objection, the assessee challenged the orders of the authorities below to be void abinitio and bad in law as assessment have been framed on merged entity and that since no incriminating material was recovered during the course of search, therefore, no addition under section 153A can be made in view of judgment of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra).
34. All these issues in departmental appeal and cross objection are same as have been decided in A.Ys. 2007-2008 and 2009-2010 above. Following the reasons for decision for the same, we dismiss the departmental and allow the cross objection. 35
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
35. In the result, ITA.No.451/Del./2016 of the Department dismissed and C.O.No.165/Del./2016 of the Assessee allowed. ITA.No.446/Del./2016 & C.O.No.121/Del./2010 - A.Y. 2008-2009 -
M/s. Sindhu Holdings Ltd.,
35. The Departmental Appeal as well as Cross Objections by assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2008-2009.
36. In Departmental Appeal on ground No.1, the Revenue challenged the deletion of addition of Rs.2,17,000 under section 14A read with Rule 8D of the I.T. Act. On Ground Nos. 2 and 3, the Revenue challenged the deletion of addition of Rs.65 lakhs on account of unexplained share application money under section 68 of the I.T. Act, 1961.
37. In the Cross Objection, on ground Nos. 2 and 3, assessee supported the orders of the Ld. CIT(A) in deleting the above additions. On ground Nos. 1 and 5 of the cross objection, the assessee challenged the orders of the authorities below to be bad in law and void abinitio, as assessment have been framed on merged entity and 36 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
that no addition can be made under section 153A of the Act, in the absence of recovery of any incriminating material as per decision of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra).
38. All these issues are similar as have been decided in the case of M/s. Garuda Imaging and Diagnostic Pvt. Ltd., New Delhi (supra) in A.Ys. 2007-08, 2009-10 and 2010-2011. Following the reasons for decision of the same, we set aside the orders of the authorities below and quash the assessments. The department appeal fails on these ground. However, the cross objection of assessee are allowed.
39. In Departmental Appeal on ground No.4, Revenue challenged the deletion of addition of Rs.2.70 crores on account of deemed dividend under section 2(22)(e) of the I.T. Act and on ground No.4 of the cross objection, assessee supported the order of the Ld. CIT(A) in deleting the addition.
40. The assessee challenged the order of the A.O. in making addition of Rs.2.70 crores. It was submitted before Ld. CIT(A) that in original assessment proceedings under section 143(3), similar 37 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
addition was made but relief has been granted by Ld. CIT(A) by deleting the addition. It was, therefore, submitted that since similar addition was made in original assessment which have been deleted by Ld. CIT(A), therefore, no further addition be made. Ld. CIT(A) found the contention of assessee to be correct that similar addition made in original assessment has been deleted by Ld. CIT(A). therefore, the addition was deleted because no new facts have been brought on record.
41. After considering the rival contentions, we are of the view that no interference is called for in the matter. The A.O. in the assessment order itself has recorded that in the original assessment completed under section 143(3), addition of Rs.2.70 crore under section 2(22)(e) have been made but assessee did not provide any information, therefore, same addition was repeated in assessment year under appeal. Since, this similar addition has been deleted by the Ld. CIT(A) against the original assessment order, therefore, there were no justification to make addition in proceeding under section 153A of the I.T. Act against the assessee. The departmental appeal 38 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
has no merit and the same is dismissed. In the result, cross objection of assessee has become infructuous.
42. In the result, ITA.No.448/Del./2016 of the Department dismissed and C.O.No.121/Del./2016 of the Assessee allowed. ITA.No.447/Del./2016 & C.O.No.122/Del./2016 - A.Y. 2010-2011 :
43. The Departmental Appeal as well as Cross Objections by assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 09.11.2015, for the A.Y. 2010-2011.
44. In the Departmental Appeal the Revenue challenged the deletion of addition of Rs.5,96,250 on account of disallowance under section 14A read with Rule 8D of the I.T. Act and in deleting addition of Rs.10 crores on account of unexplained share application money under section 68 of the I.T. Act.
45. The assessee in the cross objection has raised ground Nos. 3 and 4 in support of the order of the Ld. CIT(A) in deleting the above additions. On ground Nos. 1 and 5 of the cross objection, the assessee challenged the orders of the authorities below to be bad in 39 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
law and void abinitio as assessment have been framed by Revenue Department on merged entity and in making addition under section 153A without recovering any incriminating material as per decision of the Hon'ble Delhi High Court in the case of Kabul Chawla (supra).
46. This issue is same as have been considered in the case of assessee for A.Y. 2008-2009 (supra). Following the reasons for decision for the same, we set aside the orders of the authorities below and quash the assessment order and delete all the additions.
47. On ground No.2 of the cross objection of the assessee, the assessee challenged addition of Rs.98,38,651 on the basis of fictitious profit/loss accruing out of client code modification facility.
48. It is argued on behalf of the assessee that no opportunity were given to the assessee and no independent finding have been given by the Ld. CIT(A) for confirming the addition.
49. The Ld. D.R. submitted that no details are filed by the assessee before the authorities below.
40
ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
50. These facts may require reconsideration at the level of the Ld. CIT(A) because no speaking order has been passed by him on merits. However, in view of the fact that we have allowed cross objection of assessee on ground Nos. 1 and 5 of the cross objection and quash the assessment order because assessment have been framed on merged entity and no incriminating material was found during the course of search to make addition despite original assessments had already been completed, therefore, this addition, would also stands deleted. Therefore, there is no need to decide these grounds separately. In view of the findings given on legal issue of merger and non-recovery of any incriminating material against the revenue, we set aside the orders of the authorities below on this ground and delete the addition. No independent findings are required.
51. In the result, ITA.No.447/Del./2016 of the Department dismissed and C.O.No.122/Del./2016 of Assessee allowed.
52. To sum-up, all Departmental Appeals ITA.No.449, 450, 451/Del./2016, ITA.Nos.446 and 447/Del./2016 are dismissed and 41 ITA.Nos.449, 450, 451/Del./2016 & C.Os.163, 164 & 165/Del./2016 ITA.Nos.446 & 447/Del./2016 & C.Os. 121 & 122/Del./2016 M/s. Garuda Imaging & Diagnostics Pvt. Ltd., and M/s. Sindhu Holdings Ltd., New Delhi.
all Cross Objections of Assessees C.O.Nos.163, 164 & 164/Del./2016 and C.O.Nos.121 and 122/Del./2016 are allowed.
Order pronounced in the open Court.
Sd/- Sd/-
(PRASHANT MAHARISHI) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 05th January, 2018
VBP/-
Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT "B" Bench
6. Guard File
//By Order//
ASST. REGISTRAR : ITAT :
DELHI BENCHES : DELHI.