DCIT, JAIPUR vs. SIYARAM EXPORTS INDIA PVT. LTD., JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 136/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2009-10 cuke The ACIT, M/s Siyaram Exports India Pvt. Ltd., Vs. Central Circle-3, 18, Siyaram Street, Tonk Road, Jaipur. Durgapura, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAKCS 1420 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rajeev Sogani (CA) & Shri Rohan Sogani (CA) jktLo dh vksj ls@ Revenue by : Shri B.K. Gupta (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 27/05/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/06/2019 vkns'k@ ORDER PER: VIJAY PAL RAO, J.M. This appeal by the Revenue is directed against the order dated 23.12.2016 of CIT(A), Jaipur for the assessment year 2009-10. The Revenue has raised the following ground:- “1. Whether on the facts and in the circumstances of the case the CIT(A) was justified in deleting the addition of Rs. 65,00,000/- made by A.O. on account of unexplained cash credit U/s 68 of the Income Tax Act, 1961. ACIT vs. M/s Siyaram Exports India Pvt. Ltd.

2. Whether on the facts and in the circumstances of the case the CIT(A) was right in allowing the appeal of the assessee holding that in absence of any incriminating material, the completed assessment cannot be interfered with by the AO while making assessment U/s 153A only on the basis of some incriminating material unearthed during the course of search which were not produced or not already disclosed.

3. The appellant crave, leave or reserves the right to amend modify, alter add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

The Revenue has also raised additional ground:-

“Whether on the facts and in the circumstances of the case the CIT(A) was right in allowing the appeal of the assessee holding that in absence of any incriminating material, the completed assessment cannot interfered with by the AO while making assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search which were not produced or not already disclosed.”

seizure action various assets/books of accounts and documents were found, inventorised and seized. In pursuant to the search and seizure action, the AO issue notice U/s 153A of the Act on 28.01.2013 and in response to the said notice the assessee e-filed its return of income on 09.05.2014 declaring total income of Rs. 51,03,870/- as declared in the return of income filed U/s 139(1) of the Act. After issuing notice U/s 143(2) of the Act as well as notices U/s 142(1) of the Act the AO made addition U/s 68 of the Act in respect of share application money received from M/s Ansh Marchandies Pvt. Ltd. of Rs. 65,00,000/- based on the information received from the Investigation Wing, Mumbai that it was accommodation entries provided by Shri Praveen jain group through his concerns. The assessee challenged the action of the AO before the ld. CIT(A) and raised a legal objection that the addition made by the AO on account of share application money treating as unexplained cash credit on the basis of information received of Investigation Wing, Mumbai is not sustainable in law as it is not based on any incriminating material or documents found or seized during the course of search and seizure action in case of the assessee. The ld. CIT(A) deleted the addition made by the AO on this legal issue and ACIT vs. M/s Siyaram Exports India Pvt. Ltd. aggrieved by the impugned order of the ld. CIT(A) the Revenue has filed the present appeal.

material which was received by the Assessing Officer was not found and seized in the search and seizure action in case of the assessee however, the same was deducted in the other search and seizure action and therefore, the case would not fall in the category when the said material was already available with the AO at the time of passing of order U/s 143(3) of the Act. The ld. DR has thus contended that the ld. CIT(A) has followed the decision where the additions were made on the basis of the material which was available with the AO at the time of passing the assessment order U/s 143(3) of the Act. He has relied upon the order of the Assessing officer.

by the AO on account of share application money then even if the proceeding U/s 153A of the Act are mandatory in nature the AO was required to reiterate the order which was passed U/s 143(3) of the Act.

In support of his contention, he has relied upon the following decisions:- • Saumya Construction (P.) Ltd. (2017) 81 taxmann.com 292. • Sunrise Finlease (p.) Ltd. (2018) 89 taxmann.com 1. • Deepak Kumar Agarwal (2017) 86 taxmann.com 3 • Jignesh P. Shah (2018) 99 Taxmann.com 111 • Harjeev Aggarwal (2016) 70 taxmann.com 95 • Best Infrastructure India Pvt. Ltd. to 1701 &

1753/Del/2014.

He has also relied upon the decision dated 16.05.2019 of this tribunal in case of Smt. Aruna Sankhla vs. DCIT in ITA No. 483/JP/2016. Thus, the ld. AR has contended that the ld. CIT(A) has deleted the addition by following various decisions on this point including the decision of Hon’ble jurisdictional High Court in case of Jai Steel India vs. ACIT 259 CTR 281.

binding precedents of Hon’ble High Courts the AO in the proceeding U/s 153A of the Act in respect of the assessment year which is not pending as on the date of search cannot make addition in the absence of any incriminating material found during the course of search and seizure U/s 153A of the Act. Section 153A gives the power to the taxing authority to reopen 6 assessment years relevant to the previous year in which the search took place. Though the assessment or reassessment of these six years is mandatory in nature pursuant to the search and seizure action however, in case of completed assessment as on the date of search no addition in the reassessment proceedings U/s 153A can be made dehors incriminating material found during the search and seizure action. On the contrary where the assessment is pending on the date of search the same shall abate and the proceedings of assessment U/s 153A of the Act would be considered as regular assessment proceeding not reassessment. In the case in hand, the Assessing Officer after initiation of proceeding U/s 153A received the information from Investigation Wing, Mumbai and based on the said information the AO has made the addition of Rs. 65 lacs on account of share application money by treating the same as unexplained of cash credit. The relevant finding of the AO in para 7 and 8 is as under:- ACIT vs. M/s Siyaram Exports India Pvt. Ltd.

“7. It was seen that, during the year under consideration, assessee had received share application money from M/s Ansh Marchandise Pvt. Ltd. (New. Planet Trading Co P. Ltd.) amounting to Rs. 65,00,000/-. Information was received in the case of Shri Praveen Jain Group is a leading entry provider of Mumbai. The group provides accommodation entries of share application money, bogus unsecured loans and advances through various benami concerns operated and managed by Praveen Jain and Others. A search and seizure action was carried out by the Investigation Wing, Mumbai on 01/10/2013. The search revealed various incriminating documentary evidences were seized. In addition, statements of various persons ( who assist Praveen Jain in providing bogus loan and advances through Benami Concern to the beneficiaries) were recorded. All the above clearly establish the modus operandi employed by Praveen Jain. In his operation accommodation entries pertaining to BOGUS SHARE APPLICATION MONEY, BOGUS LOAN & ADVANCES indulged in by the Group. The entire bogus nature of the transactions has also been admitted by the Praveen Jain in his statement recorded u/s 132(4) of the Income Tax Act. As per this information, the name of the assessee is appearing in the list of beneficiaries who have taken the accommodation entry in the form of unsecured loans.

8. In view of the fact, the assessee was requested to show cause as to why an amount of Rs.65,00,000/- should not be added back to your returned income under section 68 of the Income Act, 1961. No reply has been filed by the assessee in this regard.

Therefore, based on the information with the investigation department, statement recorded u/s 132(4) of Shri Praveen Jain and various incriminating documentary evidence found from the search and seizure carried out by investigation wing, Mumbai on the said group on 01.10.2013, and the existence of nexus as briefed above cannot be considered 8 ACIT vs. M/s Siyaram Exports India Pvt. Ltd. as a co-incidence specially when Shri Praveen Jain has categorically admitted that his group was indulged in providing accommodation entries of bogus unsecured loans and advances through BENAMI CONCERNS operated and managed by him and Others. Thus, under such facts and circumstances M/s Ansh Marchandise Pvt. Ltd. (New Planet Trading Co P. Ltd.) is nothing but a Benami Concern of Shri Praveen Jain Group.

From the above case laws and discussion, it is crystal clear that- (a) The primary onus is on the aasessee to establish the genuineness of the transaction. (b) If the investigation done by the department leads to doubt regarding the genuineness of the transactions it is incumbent on the assessee to produce the parties along with necessary documents to establish the genuineness of the transaction. (c) payment by account payee cheque is not sacrosanct. In light of the various judicial pronouncements and the above discussions it is to be seen whether the assessee was able to establish the genuineness of the transactions claimed by it or it has failed in discharging this onus. The information received from investigation wing and statement of Shri Praveen Jain and group clearly explains the modus operandi of this bogus transactions.

treated as unexplained cash credit u/s 68 of the I.T. Act, 1961. I hereby make an addition of Rs.65,00,000/- to the declared income of the assessee u/s 68 of the I.T. Act, 1961. Penalty proceedings u/s 271(1)(c) of the IT Act, 1961 is initiated for concealment of income/for furnishing inaccurate particulars of income.” The question before us is limited about the sustainability of the addition made by the AO based on the material which was received by him subsequent to the search and seizure action in the case of the assessee but gathered during the search and seizure action in case of the Shri Praveen Kumar Jain group. Though technically the AO cannot reassessed the income of the assessee U/s 153A of the Act when the assessment was not pending as on the date of search and there was no incriminating material found or seized during the course of search and seizure in the case of the assessee to support the said addition. However, the question arises whether the AO had any other option and second recourse of proceedings to assess the said income of Rs. 65 lacs treated as accommodation entries received by the assessee on account of share application money. There is no quarrel the AO was bound to proceed U/s 153A of the Act in pursuant to the search and seizure action however, if there is no incriminating material to reassess the income of the assessee then the Assessing Officer legally cannot make the addition based on the information 10 ACIT vs. M/s Siyaram Exports India Pvt. Ltd. and evidence received from the Investigation Wing, Mumbai and consequently ought to have completed the reassessment U/s 153A of the Act without making any addition. But at the same time he could initiate the proceeding U/s 147/148 of the Act to reassess the income of the assessee on the basis of the information and evidence received from the Investigation Wing, Mumbai. Accordingly, in view of the various decisions on this point as relied upon by the ld. AR of the assessee, we do not find any error or illegality in the impugned order of the ld. CIT(A) in deleting the addition made by the AO while passing the order U/s 153A of the Act. It is always open to the AO to initiate the proceeding U/s 147/148 of the Act if the time limit for initiation of the said proceedings was still available as on the date of passing the order U/s 153A of the Act. We find that even on the date of assessment order passed U/s 153A of the Act on 31.03.2015 the time limit for issuing the notice U/s 148 of the Act was still available with the AO. Therefore, even if the AO had no jurisdiction to make the addition U/s 153A however, it was opened to the AO to proceed to initiate the proceeding U/s 148 of the Act. Accordingly, in the facts and circumstances of the case we uphold the order of the ld. CIT(A) in deleting the addition made by the AO due to legal hurdle of ACIT vs. M/s Siyaram Exports India Pvt. Ltd. making such addition without incriminating material but if the material and evidence received by the AO during the course of reassessment proceedings U/s 153A of the Act which was not available with the AO at the time of passing the assessment U/s 143(3) of the Act then, it is open to the AO to initiate the proceeding U/s 147/148 of the Act instead of making the addition in the proceeding U/s 153A of the Act. Since, in the case in hand the time was available with the AO as on the date of assessment order therefore, it is open to the AO to initiate the proceeding U/s 147/148 of the Act.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 17/06/2019.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 17/06/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- ACIT, Central Circle-3, Jaipur. 2. izR;FkhZ@ The Respondent- Sh. M/s Siyaram Exports India Pvt. Ltd., Jaipur. 3. vk;dj vk;qDr@ CIT 12