The Tax Publishers2018 TaxPub(DT) 0632 (Del-Trib) : (2018) 062 ITR (Trib) 0184

 

Asstt. CIT v. Spectrum Coal & Power Ltd.

 

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153AAddition under section 68--No incriminating material seized--Where assessment under section 143(3) was already completed before date of search and no addition had been made under section 68 by AO as such, without any incriminating material, addition under section 68 could not be made for share capital as undisclosed income under section 153A after search action.-- Search, seizure and survey operations under section 132/133A were conducted in the case of the assessee along with other cases of Aryan Sainik Group at various residential and business premises. The AO during assessment noted that during the financial year under appeal the assessee-company had received share capital and share premium from M/s. STL Ltd., Mauritius. Letter of enquiry was sent by AO to the assessee. The assessee filed detailed reply which was reproduced in the assessment order. The documents which were details of share application money with confirmation from the investor, their income tax return, PAN, bank statement, Foreign Inward Remittance Certificate, FC-GPR Form, Source of the Investment, Balance Sheet and Profit & Loss Account of the Investor, copy of Board resolutions and copy of ROC records, etc. The AO relying upon certain decisions, made addition of share capital under section 68 considering it to be unexplained cash credit. CIT(A), however, deleted addition holding that it is a case of the assessee that the assessment order under section 153A is not based on any incriminating material or evidence and additions have been made merely on the basis of entries recorded in the books of account.Held: It stood proved on record that on the date of search original assessment under section 143(3) had already have been made and subsequently on 12-4-2012, no incriminating material was found during the course of search against the assessee so as to prove that assessee has received any bogus share capital/share premium and to make addition under section 68. During the course of hearing also nothing was produced before Tribunal to prove, if any, incriminating material was found during the course of search against the assessee so as to make the above addition. No assessment was pending on the date of search against the assessee. The information supplied by Mauritius revenue authorities provides required details. The investments are through banking channel and nothing more which could be treated any incriminating material in nature. The AO in the original assessment proceedings accepted the claim of genuine share capital/premium in order under section 143(3). Considering the above discussion, invocation of section 153A by the AO for assessment year under appeal was without any legal basis as there were no incriminating material found in search for assessment year under appeal. The issue is therefore, covered in favour of the assessee.

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