ACIT, CENTRAL CIRCLE-1, PATNA vs. SONAMOTI AGROTECH PVT LTD, PATNA

Per Rajpal Yadav, Vice-President (KZ):- The Revenue is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-3, Patna dated 02.01.2019 passed for Assessment Year 2012-13.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

(a) In this compartment, assessee raised a preliminary objection before the ld. CIT(Appeals) that no incriminating material was found during the course of search and, therefore, the assessment will not abate and ld. Assessing Officer has no jurisdiction to make additions under section 153A/153C in absence of any incriminating material. According to the assessee, this aspect has been decided against the assessee by the ld. 1st Appellate Authority.

(b) In ‘B’ compartment, the assessee raised four grounds, i.e. Grounds No. 6, 7, 8 & 9, but all these grounds are in support of the finding of ld. CIT(Appeals) on merits.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited his possession, even though it was not unearthed on account of the search. In other words, according to the ld. CIT(Appeals), the ld. Assessing Officer can consider all information, which are not discovered during the search to frame the assessment under section 153A. The ld. 1st Appellate Authority in this connection put reliance upon the decision of the Hon’ble Kerala High Court rendered in the case of Francis Clay Decor Tiles reported in 385 ITR 624 as well as Canara Housing of Hon’ble Karnataka High Court. He also relied upon the judgment of the Hon’ble Kerala High Court in the case of E.N. Gopakumar –vs.- CIT reported in 390 ITR 131.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited application money raised by the assessee was nowhere available in this material found during the course of search. Therefore, the additions under section 153A cannot be made. For buttressing his contention, he relied upon the judgment of ITAT, Patna Bench in the case of GRD Construction Pvt. Limited –vs.- ACIT, copy of this judgment has been placed on the record at pages no. 18 to 32 of the paper book. Similarly he placed reliance upon the judgment of the Hon’ble Delhi High Court in the case of Principal Commissioner of Income Tax-vs.- Mamta Agrawal in ITA 191/2022. He filed copy of this judgment also. Apart from these judgments, which are placed on the record. He made reference to a large number of decisions for buttressing his proposition. The citations of such decision namely,- (i) CIT –vs.- Kabul Chawla reported in 380 ITR 573 (Delhi), (ii) CIT –vs.- Continental Warehousing Corporation Limited reported in 374 ITR 645, have been referred by him in the written submission filed before the Tribunal. On the strength of these decisions, he contended that the addition on this point is also not sustainable.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited no. 4.3.10. Basically the ld. CIT(Appeals) has recorded the finding in A.Ys. 2011-12 and 2008-09, where similar additions were made. The quantum in those years was very less, namely Rs.75,00,000/- as well as Rs.41,00,000/-. It appears that the appeals in those years might have not been filed before the Tribunal on account of tax effect or if filed then must have been dismissed. But the assessment orders are on the same line, therefore, he followed the finding in A.Y. 2011-12 and deleted the addition in this year also. In order to completeness of the facts, we deem it appropriate to take note of this finding of the ld. CIT(Appeals) on merit, which reads as under:- “4.3.10. Now coming to the merits of the case, the undisputed fact is that a search and seizure operations u/s 132(1) of the Income Tax Act, 1961 was conducted on 10.01.2014 in Sona group eases of Patna. The appellant M/s Sona Moti Agrotcch Pvt. Ltd. is related to Sona Group of cases and also subjected to search. Apparently as can be seen from the assessment order the AO has not referred to any material cither found or seized during the course of search based on which addition was made. However, the AO do referred to information received from the investigation wing of Income Tax Department, Kolkata wherein certain companies were identified as paper companies which involved in providing accommodation entries. Accordingly, the AO based on the findings of the Directorate of Income tax (Inv.), Kolkata held that the identity, genuineness and creditworthiness of following companies which subscribed to the shares of the appellant company at a premium were held to be non genuine and accordingly made an addition of Rs.75,00,000/- u/s.68 of the Act.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

Name of the Company Amount 1.Himalayan Investment Rs. 3,00,000/- Consultant Pvt. Limited, Kolkata 2. Atlantic Invest Advisory Rs. 4,00,000/- Pvt. Ltd., Kolkata 3. Welkin Investment Rs. 10,00,000/- Consultant Pvt. Ltd., Kolkata 4. S Albino Investment Rs. 12,00,000/- Consultant Pvt. Ltd., Kolkata 5. Booster Commercial Pvt. Rs.25,00,000/- Ltd., Kolkata 6. Odilon Suppliers Pvt. Rs. 4,00,000/- Ltd., Kolkata 7. Bhagya Vinimay Pvt. Rs. 5,00,000/- Ltd., Kolkata 8. Seltron Finance Ltd., Rs. 12,00,000/- Kolkata

On the other hand, the appellant contended that, during the course of assessment proceeding it had submitted complete details of share application money received along with the name and address of the applicants. Further in order to prove the identity, credit worthiness and genuineness of the transaction in respect to share applicants it had submitted form for application of equity shares, Copy of Board resolution of the respective company, their copy Income tax acknowledgement, Certificate of Incorporation, Copy of bank statement, Copy of balance sheet of the company showing the amount of shares shown in the audited balance sheet etc.. The appellant contended that, these companies arc registered with ROC and all the details regarding investor companies have been provided to the AO i.e. CIN, address, date of incorporation of the company, copy of Form-2 filed with ROC alongwith present correspondence address of the applicant company. The appellant further submitted that amount received by the company was all by account payee cheques and it is not a ease of depositing of cash in the accounts of the share- applicants prior to acknowledgement: of cheques for share application money. The appellant further submitted that the share applicant companies are not the strangers to

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited the appellant as the directors of the applicant companies are relatives of the directors of the appellant. The appellant further argued that the AO has not controverted the material placed on record or the AO could lay his hand on any incriminating material found during the course of search or could independently gather any evidence to corroborate the so called findings of the DIT(Inv.), Kolkata. Accordingly, the appellant relying on various case laws of Hon’ble High courts and Hon’ble Apex court including that of HonTDle Jurisdictional High court (supra) concluded that it has discharged the onus placed on it u/s.68 of the Act by documentary evidence, however, the AO simply disbelieved the same for the reasons best known to him, and therefore the addition made is unjustified and Illegal. I have carefully considered the rival arguments/submissions/findings of the AO and the appellant and I find considerable force in the argument/submission of the appellant. It is a fact that the AO had totally relied on the physical inspection report of the ITI of Directorate of Income tax (Inv.), Kolkata about the nature of buildings and whether the same was operating / functioning from the given location of the share applicants. As I have stated earlier, the AO can assume valid jurisdiction u/s,153A based on the report from the Investigation wing of the department, but at the same time has to be backed by independent enquiry by the AO with positive evidence to corroborate the findings contained in the investigation report. However the AO failed to gather an iota of additional evidence or could controvert the evidence placed by the appellant and instead totally swayed away by the report of the investigation. In this context it is very important to know that upto A.Y.2012- 13, the burden of proof u/s.68 of the Act oscillated between the assessee and the AO depending upon the nature and quality of evidence adduced with regard to any sum credited in the books of accounts of the assessee company (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called. However, from A.Y.2013-14 a proviso to section 68 was inserted by the Finance Act, 2012 w.e.f. 01.04.2013 wherein the onus of proving identity, genuineness and creditworthiness of the creditor to the satisfaction of the AO

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited has entirely shifted to the assessee. In this regard the relevant proviso as inserted is reproduced hereunder. [Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless— (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.] Further, the Hon’ble Bombay High court: in the case of CIT Vs. Gagandeep Infrastructure Pvt. Ltd. [2017] 80 taxmann.com 272 held that insertion of above proviso is prospective in nature and not retrospective. Therefore taking into account assessment years under appeal and all other facts as discussed above, the addition made u/s.68 of Rs.41,00,000/- is directed to be deleted. Accordingly, ground No.l is allowed. 5. Ground No. 2: This ground is directed against the charging of interest u/s.234A, 234B and 234C of the Act. As this ground is consequential in nature, the same do not require separate adjudication.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited 8. In view the detailed findings given for A.Y. 2011-12, the appeal for A.Y. 2012-13 is also allowed”.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not 16

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited already disclosed or made known in the course of original assessment." 10. ITAT, Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153A of the Act has to be specifically made on the basis of seized material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. ITAT Delhi Bench has specifically held that material recovered from the premises of other person cannot be used in the hands of the searched person. For that purpose an assessment under section 153C or 147 is to be made. At this stage, in order to fortify ourselves, we would like to make reference to the following paragraphs of the ITAT Delhi Bench's order. It reads as under:

“15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the 17

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person."

"Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law?"

"6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380 ITR 573.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so-called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not under Section 153A. This goes to the root of the matter."

"[A] Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? [B] Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment 19

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on- money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. 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 the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 16. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon’ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon’ble Delhi Court as completion of assessments and this acceptance of return, according to the Hon’ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited contentions. The addition is not sustainable on this issue also.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited of the shareholders, confirmation of the Directors of the shareholder company but thereafter no further inquiry was made by the ld. Assessing Officer. The second set of case is that where there was evidencing material to show that the shareholder company was only a paper company without doing any serious business having no such income. In the present case, it revealed that ld. Assessing Officer himself has not carried out any exercise. He put into the service the alleged report of Investigation Wing by treating it as gospel truth. 20. On the other hand, in response to the notice of ld. Assessing Officer, the assessee-company stated that the involved companies are registered with the Company Registrar holding valid PAN and the transactions were made through banking channels and further asserted that the companies being income-tax assessee, the ingredients of section 68 has already been fulfilled. In other words, the present assessment order falls in the first category of the cases as propounded by the Hon’ble Delhi High Court. The assessee submitted basic details but ld. Assessing Officer did not inquire anything. The alleged report from the Investigation Wing was collected from the back of the assessee and it has not participated. Therefore, we do not find any reason to interfere in the finding of the ld. 1st Appellate Authority on this fold of dispute.

ITA No. 110/PAT/2019 Assessment Year: 2012-2013 & C.O. No. 04/PAT/2022 (in ITA No. 110/PAT/2019) Assessment Year: 2012-2013 Sonamoti Agrotech Pvt. Limited 21. In the result, the appeal of the Revenue is dismissed and Cross Objection of the assessee is allowed. Order pronounced in the open Court on 23.02.2023.

Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President Kolkata, the 23rd day of February, 2023 Copies to :(1) Assistant Commissioner of Income Tax, Central Circle-1, Patna (2) Sonamoti Agrotech Pvt. Limited, 603. Ashiana Plaza, Budh Marg, Patna, Bihar (3) Commissioner of Income Tax (Appeals)-3, Patna; (4) Commissioner of Income Tax- , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.