Income Tax Appellate Tribunal - Delhi
M/S. Amigo Infrastructure (P) Ltd., New ... vs Acit, New Delhi on 12 October, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A", NEW DELHI
BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No.6215/Del/2013
Assessment Year : 2006-07
Babushka Promoters (P) Ltd., ACIT, Central Circle- 15,
906, P.P. Towers, Plot No.C-1, 2 & 3, New Delhi.
Netaji Subhash Place, Pitampura, Vs.
Delhi.
PAN : AACCB6243K
(Appellant) (Respondent)
ITA No.6217/Del/2013
Assessment Year : 2006-07
Amigo Infrastructure (P) Ltd., ACIT, Central Circle- 15,
906, P.P. Towers, Plot No.C-1, 2 & 3, New Delhi.
Netaji Subhash Place, Pitampura, Vs.
New Delhi.
PAN : AAFCA7350R
(Appellant) (Respondent)
Assessee by : Shri V. K. Bindal, CA
Smt. Sweety Kotharia, CA
Department by : Smt. Aparna Karan, CIT(DR)
Date of hearing : 31-08-2017
Date of pronouncement : 12-10-2017
ORDER
PER R. K. PANDA, AM :
ITA No.6215/Del/2013 filed by the assessee is directed against the order
dated 16.09.2013 of CIT(A)-XXXI, New Delhi relating to assessment year 2006-07. ITA No.6217/Del/2013 filed by the assessee is directed against the 2 ITA Nos.6215 & 6217/Del/2013 order dated 17.09.2013 of CIT(A)-XXXI, New Delhi relating to assessment year 2006-07. Since the grounds raised by the above assessees are identical, therefore, these were heard together and are being disposed of by this common order for the sake of convenience.
2. First, we take up the ITA No.6215/Del/2013 in the case of Babushka Promoters (P) Ltd. as the lead case.
3. Facts of the case, in brief, are that the assessee is a company engaged in the business of commission agent. A search and seizure operation u/s 132(1) of the I.T. Act was conducted by the Investigation Wing of the Department on 24.09.2009 in the case of M/s Mamram Group of cases. The group is engaged in the business of manufacturing and sale of Tin Plates, running of Banquet Hall and construction & sale of commercial complex/ building. Notice u/s 153C was issued on 04.11.2011 after going through the seized material of M/s Mamram Group of cases wherein the documents relevant to this company were also found. The said notice was issued after recording the satisfaction note which has been reproduced by the Assessing Officer in the body of the assessment order and which reads as under :-
"M/s Babushka Promoters Pvt. Ltd. for the Asstt. Year 2005-06 TO 2010-2011, (PAN:
AACCB6243K).
On the basis of information gathered from various sources that Mamram Group was evading Income Tax from their business activities consisting of manufacturing and sale of tin plates, running of banquet hall business and also building and development of commercial complex/malls, search operation u/s 132 of the Income Tax Act, 1961 was carried out on 24.09.2009. The group is run by Shri Ram Kishan Gupta and his 3 ITA Nos.6215 & 6217/Del/2013 son Shri Sanjay Gupta and their family members. During the search operation various residential and business premises of the group were covered. During the search operation in the M/s Mamram Group of cases on 24.09.2009 certain document were retrieved which confirmed the fact that the above persons was having interest in the business concern/companies of M/s Mamram Group of cases. The company M/s Babushka Promoters Pvt. Ltd. was neither covered u/s 133A nor u/s 132(1) of the Act but the assessee group had surrendered as sum of Rs.2 crore in the hands of this company out of total surrender of Rs.19 crores. While going through the seized record the following documents relating to M/s Babushka Promoters Pvt. Ltd. have been found.
1. Annexure 'A'-2/Party-Z-1, pg.no.3, details of sundry creditors in the books of M/s Babushka Promoters Pvt. Ltd. as on 21.09.2009.
2. Annexure 'A'-2/Party-Z-1, pg.no.5 details of sundry creditors in the books of M/s Babushka Promoters Pvt. Ltd. for the A.Y. 2008-09.
3. Annexure 'A'-2/Party-Z-1, pg.no.21, details of unsecured loans in the books of M/s Babushka Promoters Pvt. Ltd. as on 24.09.2009. During the year the company has received unsecured loans of Rs.2,09,11,500/- which includes a loan of Rs.1,02,00,000/- from M/s Ess Ess Buildcon Pvt. Ltd.
The genuineness and the creditworthiness of the persons who have advanced these loan is required to be verified.
4. Annexure 'A'-2/Party-X-2, pg.no.5, M/s Babushka Promoters Pvt. Ltd.- amount received and paid in the month August, 2009 against East Plaza, cash withdrawals etc. 07.09.09 L R Builders Payment 10,00,000 09.09.09 Munish Bansal Received 5,00,000 11.09.09 L R Builders Payment 5,00,000 16.09.09 Mamram Dev. Pvt. Ltd. Received 75,000 Whether the above transactions have been duly accounted for in the books of accounts is required to be verified.
5. Annexure 'A'-16/Party-X-2, pg.no.1, application form for security of commercial space no.G-1, G-2 and G-3 dated 22.09.09 in the name of Sh. Deepak Kansal in Mamram East Plaza with Babushka Promoters Pvt. Ltd. Total amount of security for Commercial Space is Rs.60,00,000/- out of which Rs.25,00,000/- has already been deposited on 22.07.09. Whether the above transaction have been duly accounted for in the books of accounts is required to be verified.
6. Annexure 'A'-17/Party-X-2, pg.no.1 to 8 Lay Out Plans of Plot No.1 & 2, LSC Centre at Kondil Gharoli, Sector-G of M/s Babushka Promoters Pvt. Ltd.
7. Annexure 'A'-17/Party-X-2, pg.no.9-10, copy of application for loan made to The Vaish Co-operative New Bank Ltd. for a loan of Rs4.35 crores against purchase of plot No.C-1&2, Sector G, Kondli Gharoli, Mayur Vihar-III, New Delhi 96 in the name of M/s Babushka Promoters Pvt. Ltd.
8. Annexure 'A'-17/Party-X-2, pg.no.11, DDA Bid from dated 12.01.06 for LSC No.2 Sector G Kondli Gharoli, Mayur Vihar - III, New Delhi in the name of earnest money is Rs.66,50,000/-.
9. Annexure 'A'-17/Party-X-2, pg.no.12, DDA Bid from dated 12.01.06 for LSC No.1, Sector G Kondli Gharoli, Mayur Vihar-III, New Delhi in the 4 ITA Nos.6215 & 6217/Del/2013 name of M/s Babushka Promoters Pvt.Ltd. Bid amount is Rs.2,72,00,000/- and earnest money is Rs.68,00,000/-.
10. Annexure 'A'-17/Party-X-2, pg.no.39 to 42, Form 8 filled M/s Babushka Promoters (P) Ltd. under the companies Act, towards the creating of charge dt. 27.02.2006.
11. Annexure 'A'-17/Party-X-2, pg.no.87 to 88, redemption deed dt. 15.06.2009 made between M/s Babushka Promoters (P) Ltd. and the bank.
12. Annexure 'A'-19/Party-X-2, pg.no.10, application form for security of commercial space unit No.G-15, dt.05.03.2006 in the name of Sunil Kumar in Mamram East Plaza with M/s Babushka Promoters (P) Ltd. Total amount of security for commercial space is Rs.32,11,000/- out of which Rs.3,21,100/- has already been deposited on 05.03.2006 and 08.03.2006. As per hand written noting made by Sunil Kumar he has sold this unit to his friends Vijay Dutt Sharma, Yogender Sharma and Ved Prakash Sharma.
13. Annexure 'A'-20/Party-X-2, pg.no.1, application form for security of commercial of space unit no.G-2 dt. 08.04.04 in the name of Om Kumar in Mamram East Plaza with Babushaka Promoters (P) Ltd. total amount of security for commercial space is Rs.46,51,000/- out of which Rs.3,50,100/- has already been deposited on 12.04.06. The AO is requested to go through the books of accounts and verify whether these entries are recorded in the regular books of accounts.
14. Application form for security of commercial space unit no.304 dt.05.03.06 in the name of Ajendra Misra in Mamram East Plaza with Babushaka Promoters (P) Ltd. Total amount of security for commercial space is Rs.15,51,000/- out of which Rs.1,55,100/- has already been deposited on 05.03.06. The AO is requested to go through in the regular books of accounts and verify whether these entries are recorded in the regular books of accounts and verify whether these entries are recorded in the regular books of accounts.
15. Application form for security of commercial space unit no.304 dt. 30.10.06 in the name of Suman Yadav in Mamram Premium Tower with Babushaka Promoters (P) Ltd. Total amount of security for commercial space is Rs.25,31,000/- out of which Rs.2,53,100/- has already been deposited on 30.10.06. The AO is requested to go through the books of accounts and verify whether these entries are recorded in the regular books of accounts. The above entries are required to be verified from the regular books of accounts of the M/s Babushaka Promoters (P) Ltd.
The group case of M/s. Mamram is already covered within the ambit of the provision of section 153A of the Income Tax Act, 1961. In order to logically conclude the proceedings u/s 153A of the I.T. Act, 1961 in the M/s. Mamram Group of cases, it is necessary to initiate the proceedings as envisaged in section 153C of the I.T. Act, 1961 in this case. The case has already been got centralized u/s 127 of the I.T. Act, 1961 vide CIT, Delhi-I, New Delhi's order F.No.CIT-I/ITO (Hq-1) Centralization/2011-12/1861 dated 19.10.2011. I am satisfied in the interest of revenue, proceedings u/s 153C of the I.T. Act, 1961 are required to be initiated in this case.
-(Sd/-_ 5 ITA Nos.6215 & 6217/Del/2013 (J.K. Chandnani) Asstt. Commissioner of Income Tax, Central Circle- 15, New Delhi."
4. In response to the said notice, the assessee filed a copy of the return declaring an income of Rs.2,540/- for the assessment year 2006-07 along with a letter dated 11.11.2011 stating that the return filed originally u/s 139 of the I.T. Act may be treated as return filed in response to notice u/s 153C of the I.T. Act.
5. The Assessing Officer issued notice u/s 142(1) along with detailed questionnaire asking the assessee to furnish certain information and explanation to which the assessee filed the relevant requisite details from time to time. During the course of assessment proceedings, the Assessing Officer observed that the assessee has shown receipt of share application money from different companies other than the promoter directors of the company, the details of which are as under :-
S.No. Name Address Amount Date of
Allotment
1 U.G.S. Finance Pvt. Ltd. A-170, Ground Floor, 8,00,000 16/11/2005
Shakarpur, Delhi-92
2 Vouge Leasing and Finance P-41, Shanti Bhawan, 1st 8,00,000 16/11/2005
Pvt. Ltd. Floor, Near Akhara,
M.G. Road, Ghitorni,
New Delhi - 30
3 SPG Finvest Pvt. Ltd. 406, Ansal Bhawan, K.G. 15,00,000 16/11/2005
Marg, New Delhi-110001
4 Pelicon Leasing & Finance 104-A, Single Storey, 8,00,000 16/11/2005
Ltd. Ramesh Nagar, New
Delhi- 110015
5 Hamara Samay TV News D-60, 2nd Floor, Main 15,00,000 16/11/2005
Network Pvt. Ltd. Vikas Marg, New Delhi-
110092
6 Finage Leasing & Finance 106, Palco House, T-10, 10,00,000 05/01/2006
India Ltd. Main Patel Road, Patel
6
ITA Nos.6215 & 6217/Del/2013
Nagar, New Delhi-08
7 Nisha Holdings Ltd. P-41, Shanti Bhawan, 1st 15,00,000 05/01/2006
Floor, Near Akhara,
M.G. Road, Ghitorini,
New Delhi- 30
6. To facilitate independent verification of the receipt of share application money summons u/s 131 were issued on 08/11/2001. These persons were required to furnish the following information in response to the summons issued by the Assessing Officer :-
Copy of application made by you for purchase of shares of M/s Babushaka Promoters (P) Ltd. during the period 01.04.2005 to 31.03.2006 relevant to A.Y. 2006-2007.
Source of investment in purchasing the above shares alongwith the documentary proof.
Copy of bank accounts two months preceding the date of allotment of the above shares.
Copy of Profit & Loss Account alongwith balance sheet for the above period. Present status of the shares of M/s. Babushaka Promoters (P) Ltd. purchased by you. If these shares have been sold as whom these shares were sold and at what rate. Copy of Profit & Loss Account & balance sheet of the period in which these shares were sold was also requisitioned.
Copy of bank accounts for the period in which the above shares were sold.
7. The Assessing Officer observed that summons issued to (i) U.G.S. Finance Pvt. Ltd., (ii) Vouge Leasing and Finance Pvt. Ltd., (iii) SPG Finvest Pvt. Ltd. and (iv) Hamara Samay TV News Network Pvt. Ltd. were returned back un-served by the Postal Authorities with the remark "Left without address". There was no compliance in respect of the summons issued to the remaining three parties. The Assessing Officer, therefore, asked the assessee to produce the various Authorized Signatory/ Director of the above companies. It 7 ITA Nos.6215 & 6217/Del/2013 was also intimated by the Assessing Officer that in absence of non-production of the persons adverse conclusion may be drawn against the assessee.
8. The Assessing Officer observed that the share application money was allegedly received in the month of August/September, 2005/ January, 2006, shares of the face value of Rs.10/- each were allotted at the rate of premium of Rs.190/- in the month of November, 2005/ January, 2006 and after around 12 to 14 months (i.e. in the next financial year) these share were sold in the month of January, 2007 to the promoter Director of the company. In the process of allotment of share and sale of shares these share applicant companies which are (P) Ltd. Companies incurred loss at Rs.190 per share.
9. Relying on various decisions, the Assessing Officer held the transactions involving the share application with a huge premium from non-descript companies to be ultimately transferred to the Directors/promoters of the company at face value, as accommodation entries and added a sum of Rs.79 lakhs to the total income as unexplained cash credit u/s 68 of the Act. He also made addition at Rs.39,500/- to the total income of the assessee as commission paid for arranging the accommodation entries.
10. In appeal, the ld. CIT(A) upheld the action of the Assessing Officer.
11. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following modified grounds of appeal :- 8
ITA Nos.6215 & 6217/Del/2013 "1. The CIT(A) erred in law and on facts in confirming the validity of notice issued u/s 153C-
a. While ignoring that no incriminating documents belonging to the appellant were found at the time of search undertaken on its directors and others or in any other premises;
b. Without appreciating that documents, which do not contain any material revealing undisclosed income therein, cannot be used so as to initiate action u/s 153C;
c. While ignoring that no valuable belonging to the appellant was seized during the course of search and the term 'belonging to' does not mean 'relating to' or 'pertaining to' and it implies something more than a casual association for the legit application of s. 153C;
d. While ignoring that it was clearly discernable from the satisfaction note that it had been reached by some other authority and simply repeated by the AO; e. While no enquiry was made by the AO before arriving at the said satisfaction; and f. the pre-requirements set out in section 153C were not met in as much as-
(i) that the satisfaction note was recorded by the AO ill capacity as the AO of the appellant-company;
(ii) that the satisfaction note was not recorded by the AO in capacity as the AO of the searched person(s); and
(iii) that no reference of recording satisfaction/ placing the satisfaction note in the files of the searched person(s) was found in their respective order sheets before initiating action u/s 153C against the appellant-company. Thus, the notice so issued without fulfilling the pre-requisite conditions of s. 153C is invalid and the assessment so made must be annulled being void ab-initio."
12. Ld. counsel for the assessee submitted that the assessee company received share capital of Rs.79,00,000/- from 7 parties during the year under consideration which has been added by the Assessing Officer u/s 68. The Assessing Officer had also made addition of Rs.39,500/- on account of commission paid to the entry operators. He submitted that the assessment of the assessee company has been framed u/s 153C after recording a satisfaction note that some seized material pertaining to the assessee was found during the course of search undertaken at Mamraj Group. Referring to page 1 of Volume 1 of the Paper Book, he submitted that the original return of income for the impugned 9 ITA Nos.6215 & 6217/Del/2013 assessment year was filed on 22.06.2006. Notice u/s 143(2) could have been issued upto 6 months from the end of the financial year in which the return is furnished i.e. upto 30.09.2007. In the instant case, he submitted that the search action was undertaken on 24.09.2009 and satisfaction in the case of the assessee was recorded on 04.11.2011. Thus, the assessment was completed assessment on the date of recording satisfaction. Referring to the satisfaction note reproduced by the Assessing Officer in the body of assessment order, he submitted that only Item No.8, 9, 10, 12 and 14 pertained to the assessment year 2006-07 and the other seized documents pertained to other years. He submitted that the addition made by the Assessing Officer has been based on post-search enquiry and not on the basis of any seized material.
13. Referring to second last para on page 7 of the assessment order, he submitted that it clearly states that the information was gathered through post- search enquiries and during the course of assessment proceedings. Similarly, para 5 at page 8 of the assessment order also mentioned about the post-search investigation. Referring to para 3 page 9 of the assessment order, he submitted that the statement of Mr. Mahesh Garg was recorded on 09.11.2011 which is after the date of search. A specific query was raised to him regarding the companies to whom accommodation entries were given by him. Referring to page 9 of the assessment order (para 3), he submitted that the Assessing Officer has referred to Annexure A-5 and Annexure A-1 seized from Party Y-2. He 10 ITA Nos.6215 & 6217/Del/2013 submitted that the Annexure-5 pertains to Ishu Finance and Annexure-1 pertains to Mamraj Ltd. and do not pertain to the assessee. Thus, the documents shown to Mr. Mahesh Garg and referred to by the Assessing Officer in the assessment order did not pertain to the assessee at all and thus no cognizance of his statement can be taken in the case of the assessee. Referring to the decision of the Hon'ble Delhi High Court in the case of Pr.CIT vs. Dharampal Premchand Ltd. reported in 2014-TIOL-1649-HC-DEL-IT, he submitted that the Hon'ble High Court in the said decision has held that if the seized material does not constitute incriminating material then the essential jurisdictional fact for justifying the assumption of jurisdiction u/s 153A of the I.T. Act did not exist.
14. So far as the surrender made by Mr. R.K. Gupta in his statement recorded during the course of search wherein he had submitted that the surrender was made vide Question no.30 is concerned, he submitted that a perusal of the statement shows that the surrender was made only for the financial year 2009-10 i.e. assessment year 2010-11 and not for the year under consideration. Therefore, no adverse cognizance of the said surrender can be taken in the hands of the assessee in the year under consideration. Referring to page 45 - 52 of the case law compilation, ld. counsel for the assessee drew the attention of the Bench to the order of the Tribunal in assessee's own case for assessment year 2010-11 wherein the Tribunal vide order dated 20.09.2016 has held that since the surrender was not made on specific items, in the absence of any 11 ITA Nos.6215 & 6217/Del/2013 relevant material to establish undisclosed income for the assessment year 2010- 11, addition cannot be made.
15. Referring to the decision of the Hon'ble Delhi High Court in case of CIT vs. Harjeev Aggarwal reported in 2016-TIOL-472-HC-DEL-IT, he submitted that the Hon'ble High Court in the said decision has held that the statement recorded u/s 132(4) may be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/ material unearthed or found during the search. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in 2015-TIOL-2006-HC-DEL-IT and the decision in the case of Pr. CIT vs. Lata Jain reported in 2016-TIOL-866- HC-DEL-IT, he submitted that the Hon'ble High Court in the above decisions has held that no addition can be made u/s 153A/ 153C in respect of completed assessments which has become final if no incriminating seized material is found during the course of search.
16. Referring to the decision of the Hon'ble Delhi High Court in the case of CIT vs. Kurele Paper Mills (P) Ltd. reported in 380 ITR 571, he submitted that the Hon'ble High Court in the said decision has held that in the absence of any incriminating evidence found during the course of search relating to share capital issue then the Assessing Officer was not justified in invoking the provisions of section 68 for the purposes of making addition on account of share 12 ITA Nos.6215 & 6217/Del/2013 capital. He submitted that A Special Leave Petition filed by the Department was dismissed by the Hon'ble Supreme Court vide order dated 07.12.2015.
17. Referring to the recent decision of the Hon'ble Delhi High Court in the case of CIT vs. Sinhgad Technical Education Society reported in 2017-TIOL- 309-SC-IT, he submitted that the Hon'ble Supreme Court in the said decision has held that as per the provisions of section 153C incriminating materials which were seized must be related to the assessment year in question and since it is mandatory for assessment, it becomes a jurisdictional fact and the Tribunal rightly permitted the said additional ground. He accordingly submitted that in absence of any incriminating material found during the course of search relating to this assessment year the addition cannot be made by the Assessing Officer in the order passed u/s 153C/143(3) on the basis of post-search enquiry.
18. Ld. DR on the other hand heavily relied on the order of the CIT(A).
19. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and Paper Book filed on behalf of the assessee. The addition of Rs.79,00,000/- on account of unexplained cash credit and Rs.39,500/- on account of commission paid to accommodation entries providers made by the Assessing Officer in the order passed u/s 153C/143(3) in absence of any incriminating material is the issue raised by the assessee in the grounds of appeal. A perusal of the assessment order shows that the addition of the above two amounts have been made by the 13 ITA Nos.6215 & 6217/Del/2013 Assessing Officer on the basis of post-search enquiries. The satisfaction note prepared by the Assessing Officer before issuing of notice u/s 153C has already been reproduced in the preceding paragraphs. A perusal of the same shows that no incriminating material, whatsoever, was found during the course of search relating to the companies from whom the assessee received share application money. Ld. DR also could not controvert the submission of the ld. counsel for the assessee that no incriminating material was found during the course of search pertaining to the year under consideration and, therefore, no addition can be made in the year under consideration.
20. A perusal of the entire record shows that the additions were made on the basis of post-search enquiries and not on the basis of any seized material. The Hon'ble Delhi High Court in the case of Dharampal Premchand Ltd. (supra) has held that when the seized material did not constitute any incriminating material, then the essential jurisdictional fact for justifying the assumption of jurisdiction u/s 153A did not exist. In that case the following question of law was framed for the consideration of the Hon'ble High Court :-
"Whether the ITAT fell into error in holding that the additions made in the course of proceedings under Section 153A/143(3) of the Income Tax Act, 1961 were not warranted having regard to the judgment of this Court in CIT v. Kabul Chawla 380 ITR 573?"
21. After considering the rival arguments of both the sides, the Hon'ble High Court dismissed the appeal filed by the Revenue by observing as under :- 14
ITA Nos.6215 & 6217/Del/2013 "12. Indeed, the Court finds that de hors the question whether the material seized, which admittedly pertains to FY 2010-11, can constitute sufficient material to reopen the assessments for the other AYs in question, it is seen that, even for FY 2010-11, the ITAT, after undertaking a detailed analysis, found that what was seized was not incriminating material. The categorical factual findings by the ITAT, which have not been shown by the Revenue to be perverse, are inter alia that the material seized does not show inflation of the profit of the eligible undertakings; or that the eligible undertakings are not carrying out manufacturing activities or that the material transferred to the eligible undertakings is less than the market value and that "none of the material relates to the purchases from sister concerns." All of this is de hors the fact that the material pertains only to FY 2010-11.
13. If, even for FY 2010-11, what was seized did not constitute incriminating material, then the essential jurisdictional fact for justifying the assumption of jurisdiction under Section 153A of the Act did not exist. Learned counsel for the Assessee is therefore right in submitting that, in view of the above factual findings of the ITAT, the further question as to whether the said material was sufficient to reopen the assessments for the other AYs, with which these appeals are concerned, does not really arise.
14. Nevertheless, the Court is of the view that the decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra), which has been reiterated in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns "N"
Petals (supra), is still good law as far as this Court is concerned. As explained in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns 'n' Petals (supra), the decision of this Court in Smt. Dayawanti Gupta v. CIT (supra) is not contrary to the ratio of the decision of this Court in Commissioner of Income Tax v. Kabul Chawla (supra). This Court has, in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns 'n' Petals (supra), explained the factual background and circumstances under which the decision in Smt. Dayawanti Gupta v. CIT (supra) was rendered and how in the peculiar facts of that case that it was held that the material seized for one particular AY could lead to an inference regarding the modus operandi of the Assessee for the other AYs. Further, as pointed out in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns 'n' Petals (supra), the facts in Smt. Dayawanti Gupta v. CIT (supra) were that the Assessees themselves made statements under Section 133A admitting to not maintaining proper books of accounts and admitting that the documents seized during the course of search could pertain even to the other AYs. These distinguishing features do not exist in the present case and were not also present in Principal Commissioner of Income Tax v. Meeta Gutgutia Prop. M/s Ferns 'n' Petals (supra). In the present case too there was no incriminating material seized qua each of the AYs the assessments for which were sought to be reopened. Consequently, the Court perceives no conflict in these decisions that warrants reference of the issue to a larger Bench.
15. For the above reasons, the question framed is answered in the negative i.e. against the Revenue and in favour of the Assessee.
16. The appeals are accordingly dismissed.
15
ITA Nos.6215 & 6217/Del/2013
22. The Hon'ble Delhi High Court in a series of decisions recently has held that additions cannot be made in the order passed u/s 153C/143(3) in absence of any incriminating material found during the course of search pertaining to the year under consideration. Since the additions in the instant case has been made on the basis of post-search enquiries and not on the basis of any seized material, therefore, the additions of Rs.79,00,000/- and Rs.39,500/- respectively made by the Assessing Officer and sustained by the CIT(A), in our opinion, is not justified. Accordingly, the order of the CIT(A) is set-aside and the grounds raised by the assessee are allowed.
23. Now, we take up the ITA No.6217/Del/2013 for the assessment year 2006-07 in the case of Amigo Infrastructure (P) Ltd.
24. The modified grounds of appeal raised by the assessee are as under :-
"1. The CIT(A) erred in law and on facts in confirming the validity of notice issued u/s 153C-
a. While ignoring that no incriminating documents belonging to the appellant were found at the time of search undertaken on its directors and others or in any other premises;
b. Without appreciating that documents, which do not contain any material revealing undisclosed income therein, cannot be used so as to initiate action u/s 153C;
c. While ignoring that no valuable belonging to the appellant was seized during the course of search and the term 'belonging to' does not mean 'relating to' or 'pertaining to' and it implies something more than a casual association for the legit application of s. 153C;
d. While ignoring that it was clearly discernable from the satisfaction note that it had been reached by some other authority and simply repeated by the AO; e. While no enquiry was made by the AO before arriving at the said satisfaction; and f. the pre-requirements set out in section 153C were not met in as much as-
(i) that the satisfaction note was recorded by the AO in capacity as the AO of the appellant-company;16
ITA Nos.6215 & 6217/Del/2013
(ii) that the satisfaction note was not recorded by the AO in capacity as the AO of the searched person(s); and
(iii) that no reference of recording satisfaction/ placing the satisfaction note in the files of the searched person(s) was found in their respective order sheets before initiating action u/s 153C against the appellant-company. Thus, the notice so issued without fulfilling the pre-requisite conditions of s. 153C is invalid and the assessment so made must be annulled being void ab-initio."
25. After hearing both the sides, we find the modified grounds of appeal raised by the assessee are identical to the modified grounds in ITA No.6215/Del/2017. We have already decided the issue and the grounds raised by the assessee have been allowed. Following similar reasoning, the grounds raised by the assessee are allowed.
26. In the result, both the appeals filed by the respective assessees are allowed.
Order pronounced in the open court on this 12th day of October, 2017.
Sd/- Sd/-
(SUDHANSHU SRIVASTAVA) (R. K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 12-10-2017.
Sujeet
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
By Order
//True Copy//
Assistant Registrar
ITAT, New Delhi