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Income Tax Appellate Tribunal, DELHI ‘G’ BENCH,
Before: SHRI N.K. BILLAIYA, & SHRI AMIT SHUKLA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-
The above two captioned separate appeals by the Revenue and cross objections by different assessees are preferred against the separate orders of the Commissioner of Income Tax [Appeals] – 27, New Delhi dated 12.07.2018 pertaining to Assessment Year 2010-11. Since the appeals and cross objections were heard together and the underlying facts in issues are identical, all these are being disposed off by this common order for the sake of convenience and brevity.
The representatives of both the sides agreed that the underlying facts in issues in the captioned appeals and cross objections were identical. Therefore, on such concession, we heard both the representatives on the facts of CO No. 213/DEL/2018.
Briefly stated, the facts of the case are that search & seizure and survey operations u/s 132/133A of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] were conducted on 08.07.2015 and subsequent date in the case of the captioned assessees.
During the course of search and seizure operations, various incriminating documents were found and seized which alleged that M/s K.R. Pulp and Papers Ltd and its group companies received bogus share capital and share premium from non-descript companies based in Kolkata and Delhi. It was alleged that the shares were originally issued at very high premium rates which were repurchased by family member of director/promoter and/or group company from the non descript share holder at very nominal rate.
During the course of search and seizure operations, statement of one Shri Gopal Agarwal was recorded on 08.07.2017 and 09.07.2017 wherein he was confronted with the facts about the share capital /high share premium received from Kolkata based company, in response to which, he failed to provide any justification for high share premium received non-descript company.
During post search enquiry, statement of one Shri Madho Gopal Agarwal was recorded. Following is the list of persons from whom share application and share premium were received:
Name of the Share No. of Share Share Address & Occupation Holder Share Sl. Premium No. capital 1 12,500 12,5000 2,375,000 VIKRAM FINANCIAL STEPHEN HOUSE, 1ST FLOOR, SERVICES LTD ROOM NO.03,4, B.B.D BAG EAST, KOLKATA-700001 2 12,500 12,5000 2,375,000 VIKRAM FINANCIAL SERVICES LTD STEPHEN HOUSE, 1ST FLOOR, ROOM NO.03,4, B.B.D BAG EAST, KOLKATA-700001 3 VIKRAM FINANCIAL 5,000 5,0000 950,000 SERVICES LTD STEPHEN HOUSE, 1ST FLOOR, ROOM NO.03,4, B.B.D BAG EAST, KOLKATA-700001 4 12,500 12,5000 2,375,000 VIKRAM FINANCIAL SERVICES LTD STEPHEN HOUSE, 1ST FLOOR, ROOM NO.03,4, B.B.D BAG EAST, KOLKATA-700001 5 7,500 7,5000 1,425,000 VIKRAM FINANCIAL SERVICES LTD STEPHEN HOUSE, 1ST FLOOR, ROOM NO.03,4, B.B.D BAG EAST, KOLKATA-700001 6 10,000 10,0000 1,900,000 BADAL 18 A, RAMKANTA BOSE COMMOTRADE STREET, KOLKATA, WEST PRIVATE LIMITED BANGAL-700003 7 85 N.S.ROAD, KOLKATA -01 15,000 15,0000 2,850,000 CONTSHIP COMMODITIES PVT. LTD. 85 N.S.ROAD, KOLKATA -01 12,500 12,5000 2,375,000 GILTEDGE VINCOM 8 PRIVATE LIMITED 9 12,500 12,5000 2,375,000 DAISY ABHRA PRIVATE 18 A, RAMKANTA BOSE LIMITED STREET, KOLKATA, WEST BANGAL-700003 85 N.S.ROAD, KOLKATA -01 15,000 15,0000 2,850,000 PUNYA LEATHER PVT 10 LTD 15,000 15,0000 2,850,000 11 18 A, RAMKANTA BOSE VANRAJ MERCHANTS STREET, KOLKATA, WEST PRIVATE LIMITED BANGAL-700003 85 N.S.ROAD, KOLKATA -01 12,500 12,5000 2,375,000 TRAMMEL TRADING 12 PVT LTD 13 10,000 10,0000 1,900,000 18 A, RAMKANTA BOSE MAPLE MERCANTILE STREET, KOLKATA, WEST PRIVATE LIMITED BANGAL-700003 10,000 10,0000 14 85 N.S.ROAD, KOLKATA -01 1,900,000 DIAMENTION MERCANTIL E PRIVATE LIMITED 15 12,500 12,5000 2,375,000 CRITCARE MARKETING 18 A, RAMKANTA BOSE PRIVATE LIMITED STREET, KOLKATA, WEST BANGAL-700003 85 N.S.ROAD, KOLKATA -01 12,500 12,5000 2,375,000 PUNYA LEATHER PVT 16 LTD
17 85 N.S.ROAD, KOLKATA -01 12,500 12,5000 2,375,000 TRAMMEL TRADING PVT LTD 18 85 N.S.ROAD, KOLKATA -01 12,500 12,5000 2,375,000 CONTSHIP COMMODITIES PVT. 19 LTD. 18 A, RAMKANTA BOSE STREET, 12,500 12,5000 2,375,000 MAPLE MERCANTILE KOLKATA, WEST BANGAL-700003 PRIVATE LIMITED 20 10-A, HOSPITAL STREET, 40,000 40,0000 7,600,000 KONARK KOLKATA-72 COMMERCE INDUSTRIES 21 10-A, HOSPITAL STREET, 25,000 25,0000 4,750,000 JAY AAR COMMERCIAL KOLKATA-72 PRIVATE LIMITED 22 3, DISMBER JAIN TEMPLE 20,000 20,0000 3,800,000 LECTODRYER ROAD,2ND FLOOR, KOLKATA-7 MARKETING PRIVATE LIMITED 23 9/12 LAL BAZAR ST. 20,000 20,0000 3,800,000 CAPLIN DELCOMM MERCANTILE BUILDING, BLOCK- PRIVATE LIMITED C, KOLKATA- 700001 24 9/12 LAL BAZAR ST. 20,000 20,0000 3,800,000 PABLA LEASING 85 MERCANTILE BUILDING, BLOCK- FINANCE PRIVATE C, KOLKATA- 700001 25 LIMITED 3, DISMBER JAIN TEMPLE 25,000 25,0000 4,750,000 BALASARLA HOLDING ROAD,2ND FLOOR, KOLKATA-7 PRIVATE LIMITED 26 HMP HOUSE,4, FAIRLIE PLACE, 12,500 12,5000 2,375,000 MILLENNIUM 6TH FLOOR, ROOM NO.607, INNOVATIONS KOLKATA, WEST BENGAL-700001 27 PRTVATELIMITED WANDLALYUS HOUSE, 25 10,000 10,0000 1,900,000 TIEUP TRADING PVT. SWALLOW LANE 4TH FLOOR, LTD. HARE ST KOLKATA WEST 28 HMP HOUSE,4, FAIRLIE PLACE, 25,000 25,0000 4,750,000 DOLPHIN 6TH FLOOR, ROOM NO.607, MERCHANDISE KOLKATA, WEST BENGAL-700001 PRIVAE LIMITED 29 25,000 25,0000 4,750,000 9, LAL BAZAR STREET NO. PICASONA RAIL 10, 1ST FLOOR, KOLKATA, ENGINE ERS 85 PROJECTS (P) LTD WEST BENGAL -700001 447500 44,75,000 8,50,25,000 Total
After considering the afore-mentioned list, the Assessing Officer referred to the action taken in the course of assessment proceedings of Assessment Year 2009-10 wherein the statement of one Shri Jivendra Mishra was recorded by the Investigation Wing, Kolkata wherein Shri Jivendra Mishra admitted that these companies were shell/paper companies formed and used by him for the purpose of giving entry to different beneficiaries for commission.
Drawing support from the statement of Shri Gopal Agarwal, Shri Madho Agarwal and Shri Jivendra Mishra, the Assessing Officer concluded by holding that the assessee being the beneficiary and recipient of fund in the garb of share capital and share premium, an amount of Rs. 8.95 crores is treated as unexplained cash credit, met out of undisclosed source and to be taxed as unexplained credit u/s 68 of the Act and, accordingly, made addition of Rs. 8.95 crores.
The assessee carried the matter before the ld. CIT(A) and vehemently contended that as the search was conducted on 08.07.2015, the Assessment Year under consideration, can be framed u/s 153A of the Act only when some incriminating material is found for the year under consideration.
After considering the facts on record and after considering the seized material, the ld. CIT(A) was convinced that the assessment order framed u/s 153A of the Act is devoid of any incriminating evidence found and drawing support from the decision of the Hon'ble Jurisdictional High Court of Delhi in the case of Kabul Chawla 380 ITR 573, the ld. CIT(A) directed the Assessing Officer to delete the impugned addition.
Before us, the ld. DR vehemently stated that the entries in the books of account are also incriminating material if unsubstantiated during search proceedings. It is the say of the ld. DR that the list of transfer of shares, which could not be explained properly, is incriminating material for the year under consideration. Therefore, the decision relied upon by the ld. CIT(A) is factually different from the facts of the case in hand.
We have given thoughtful consideration to the contention of the ld. DR. There may be some force in the contention of the ld. DR. But the same is not acceptable on the facts of case in hand. List of transfer of shares, which according to the ld. DR. is an incriminating material and which is exhibited at page 9 of the paper book title of which reads as “List of Transfer of Shares since 10.04.2010 till 31.03.2011”. This nomenclature itself shows that the so-called incriminating material relates to F.Y. 2010-11 relevant to Assessment Year 2011-12 whereas the appeal before us is for Assessment Year 2010-11. Therefore, we do not find any merit in the submissions of the ld. DR.
Coming to the facts of the case, we find that there is no reference of any incriminating evidence found at the time of search which makes the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla [supra] and Meeta Gutgutia 395 ITR 526 squarely apply.
We have also the benefit of the decision of this Tribunal in the case of Madho Gopal Agarwal dated 13.01.2020 wherein this Tribunal has deleted similar addition on the basis of same seized document alleged as incriminating. Since the addition made by the Assessing Officer is not based on any incriminating material found as a result of search on the assessee, respectfully following the findings of the Hon'ble Jurisdictional High Court of Delhi in the case of Kabul Chawla and Meeta Gutgutia [supra], we do not find any error or infirmity in the findings of the ld. CIT(A).
Cross objections filed by the assessee have not been pressed. The same are dismissed as not pressed.
As mentioned elsewhere, the underlying facts in issue in are identical. Therefore, the same is also dismissed.
Cross Objection in CO No. 213/DEL/2018 was not pressed and the same are dismissed as not pressed.
In the result appeals of the revenue in & 6177/DEL/2018 as well as the Cross objections of the assessee in CO Nos.
213 & 214/DEL/2018 are dismissed.
The order is pronounced in the open court on 11.01.2022 in the presence of both the representatives.