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Principal Commissioner Of Income Tax, Delhi-2 Vs. Best City Realtors (India) Pvt. Ltd
September, 06th 2017
$~35 to 37 & 39 to 47
*       IN THE HIGH COURT OF DELHI AT NEW DELHI
+                               ITA No. 13/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST INFRASTRUCTURE (INDIA) PVT. LTD.              ...Respondent
                 Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                 Mr. Pranjal Srivastava, Advocates

+                               ITA No. 11/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel
                          versus


BEST INFRASTRUCTURE (INDIA) PVT. LTD               ...Respondent
                 Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                 Mr. Pranjal Srivastava, Advocates

+                               ITA No. 12/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST CITY REALTORS (INDIA) PVT. LTD                ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and

ITA No. 13 of 2017 & connected matters                 Page 1 of 34
                                Mr. Pranjal Srivastava, Advocates

+                               ITA No. 20/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST REALTORS (INDIA) PVT. LTD                 ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                  Mr. Pranjal Srivastava, Advocates

+                               ITA No. 14/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST INFRASTRUCTURE (INDIA) PVT. LTD               ...Respondent
                 Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                 Mr. Pranjal Srivastava, Advocates

+                               ITA No. 15/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST INFRASTRUCTURE (INDIA) PVT. LTD               ...Respondent
                 Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                 Mr. Pranjal Srivastava, Advocates


ITA No. 13 of 2017 & connected matters                              Page 2 of 34
+                               ITA No.16/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST CITY DEVELOPERS INDIA PVT. LTD                 ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                  Mr. Pranjal Srivastava, Advocates

+                               ITA No. 17/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel
:
                          versus
BEST CITY PROJECTS (INDIA) PVT. LTD                  ...Respondent
                   Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                   Mr. Pranjal Srivastava, Advocates

+                               ITA No.18/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST CITY PROJECTS (INDIA) PVT. LTD                  ...Respondent
                   Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                   Mr. Pranjal Srivastava, Advocates

+                               ITA No. 19/2017
ITA No. 13 of 2017 & connected matters                   Page 3 of 34
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus

BEST CITY REALTORS (INDIA) PVT. LTD                 ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                  Mr. Pranjal Srivastava, Advocates

+                               ITA No. 21/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus

BEST CITY DEVELOPERS INDIA PVT. LTD                 ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                  Mr. Pranjal Srivastava, Advocates

+                               ITA No. 22/2017
PRINCIPAL COMMISSIONER OF INCOME
TAX, DELHI-2                                      ...Appellant
                  Through: Mr. Rahul Kaushik, Senior Standing
                  Counsel

                                         versus
BEST REALTORS (INDIA( PVT. LTD                 ...Respondent
                  Through: Mr. Ved Kumar Jain, Ms. Rano Jain and
                  Mr. Pranjal Srivastava, Advocates



ITA No. 13 of 2017 & connected matters                  Page 4 of 34
        CORAM:

        JUSTICE S. MURALIDHAR
        JUSTICE PRATHIBA M. SINGH
                                ORDER
        %                       01.08.2017

Dr. S. Muralidhar, J.:
1. These appeals filed by the Revenue under Section 260A of the Income
Tax Act, 1961 (`Act') are against a common order dated 31st May, 2016
passed by the Income Tax Appellate Tribunal (`ITAT') in the appeals filed
by the Assessee for Assessment Years (`AYs') 2005-06 to 2009-10. The
Assessees belong to the `Best Group'.

Questions of law
2. In three of the appeals filed by the Revenue i.e. ITA Nos. 11, 12 and 21 of
2017 the question of law framed by the Court by the order dated 21 st March,
2017 reads as under:
        "Did the ITAT fall into error in holding that the additions made
        under Section 68 of the Income Tax Act, 1961, on account of
        the statements made by the assessee's Directors in the course of
        search under Section 132 of the Act were not justified?"

3. In the other appeals, ITA Nos. 13 to 20 and 22 of 2017, the question of
law framed by this Court by the order dated 21st March, 2017 reads as under:
        "Whether having regard to the materials seized in the course of
        search under Section 132 and the statements made on behalf of
        the assessee, additions made by the Assessing Officer under
        Section 153A, were not justified as held by the ITAT?"



ITA No. 13 of 2017 & connected matters                             Page 5 of 34
Background facts
4. The facts which lead to the filing of these appeals are that a search took
place in the case of both Mr. Tarun Goyal as well as the Best Group of
Companies on 15th September, 2008. During the search various loose papers
were found. According to the Revenue, the seized documents were with
regard to unaccounted receipts from sale of certain properties and
unrecorded expenditure in the construction business.

5. In support of its assumption of jurisdiction under Section 153 A of the
Act, the Revenue places reliance on the statements of Mr. Tarun Goyal and
Mr. Anu Aggarwal as recorded on the day of search i.e. 15th September 2008
and the statements of Mr. Anu Aggarwal and Mr. Harjeet Singh, Directors
of the Best Group, as recorded on 24th October, 2008. These statements were
made under Section 132 (4) of the Act. The case of the Revenue is that for
the purposes of Section 153A of the Act these statements, by themselves,
constitute incriminating material. The Revenue also places reliance on three
documents i.e. A-1, A-4 and A-11.

Statement of Tarun Goyal
6. The relevant portion of the statement of Mr. Tarun Goyal as recorded on
15th September, 2008 during the survey/search and relied upon by the
Revenue reads as under:
        Q. No.2 Please provide details of your transaction with Best
        Group of Companies, such as M/s Best Infrastructure (I)(P) Ltd,
        M/s Best City Projects (I)(P) Ltd., their directors, Sh. Harjeet
        Singh Arora, Sh. Balvinder Singh, Sh. Anu Aggarwal and other
        group concern?


ITA No. 13 of 2017 & connected matters                             Page 6 of 34
        Ans. Personally, I had made no transactions with Best Group of
        Companies or their directors. However, certain companies for
        which I am the authorized signatory has made transactions with
        the Best Group of Companies, such as M/s Best Infrastructure
        (I) (P) Ltd., M/s Best City Projects (I) (P) Ltd., M/s Best City
        Realtors (I) (P) Ltd. and other group concerns. M/s Best group
        of companies, through their Directors, Sh. Harjeet Singh Arora
        had approached us for providing them entry for share capital.
        They had provided us cash, against which we issued him
        cheques through companies of which I am the authorized
        signatory. These companies have taken a commission of 0.25%
        for providing them cheque against the cash received. We have
        provided them approx. 8 crores of bogus share capital against
        which we have received commission income in these
        companies we are offering this income for taxation, which is
        over and above the normal income earned by me during the
        course of the year. At the rate of 0.25% of the undisclosed
        income earned by us would tantamount to Rs. 2 lakhs.

        Q. No.3 Have you provided entries to the Best Group of
        Companies or to their directors also?

        Ans. The companies for which I am authorized signatory have
        provided entry to the Best Group of Companies only and not to
        their directors.

        Q. No. 4 Please confirm that regarding your answer to Q.No.2
        of this statement you were taken to the office of the Best Group
        of Companies at Plot No. H-8, Best Plaza, Netaji Subash Place,
        Pitampura, New Delhi to confront your statement with them.
        However they refused any such confrontation or cross
        examination.

        Ans. I confirm that I was taken to the office of Best Group of
        Companies for confrontation/cross examination by the directors
        of the company however they refused any such cross
        examination/confrontation regarding transactions mentioned in
        my answer to Q. No. 2 of this statement.

ITA No. 13 of 2017 & connected matters                             Page 7 of 34
        Q. No. 6 Please mention the name of the companies and the
        bank accounts which are used for the purpose of
        accommodation entries as stated by you in the answer to
        question No. 5.

        Ans. Though I do not remember exactly the name of the
        companies and name of the bank accounts which are used for
        accommodation entry purpose however I confirm that the
        accounts of M/s Max-well Securities (P) Ltd. are mostly used
        for accommodation entries. Regarding rest of the companies
        and bank accounts used for the purpose can be stated by me
        after going through the records, which I will submit later on.

        Q. No. 7 Please state for the last six years    what amount of
        accommodation entries have been given by       you through the
        entities controlled by you. Please also give   the name of the
        beneficiary with corresponding amount and       the year of the
        transactions.

        Ans. For the last six years the total amount of accommodation
        entries given by me through the entities controlled by me is
        around 30 to 35 crores of rupees. Some of the beneficiaries
        along with approximate value of accommodation entries are
        given as under;-

        (i) MTech Developers (P) Ltd. (Delhi Ashram)
        (ii) Green City Buildtech (P) Ltd. Noida
        (iii)AMR Infrastructure (P) Ltd. Noida .
        (iv) Natraj Buildwell (P) Ltd. Mahipalpur, Delhi
        (v) Best Group of Companies - Pitampura, New Delhi
        (vi) S.K. Enterprises -Ashok Vihar, New Delhi

        The amount of accommodation transaction are with above
        mentioned six companies are Rs. 5.0 Cr. Rs. 5.0 Cr, Rs. 3.0 Cr,
        Rs. 2.0 Cr., Rs. 8.0 Cr. and Rs. 2.0 Crores respectively. The
        same is also represented in the table at next page. Regarding
        other beneficiaries and amount at accommodation entries can

ITA No. 13 of 2017 & connected matters                            Page 8 of 34
        only be stated after going through the records which I will
        submit later on.


         S.No.       Name of the beneficiary            Amount
          1          M. Tech Developers (P) Ltd.        Rs.5.00 Cr.
                     (Delhi Ashram)
          2          Green City Buildtech (P) Ltd.      Rs.5.00 Cr.
                     Noida (UP)
          3          AMR Infrastructure (P) Ltd.        Rs.3.00 Cr.
                     Noida
          4          Natraj Buildwell (P) Ltd.          Rs.2.00 Cr.
                     Mahipalpur, Delhi.
          5          Best Group of Companies            Rs.8.00 Cr.
                     Pitampura, New Delhi.
          6          S.K. Enterprises-Ashok Vihar,      Rs.2.00 Cr.
                     New Delhi

7. The following statement of Mr. Tarun Goyal was recorded on 15th
September, 2008 under Section 133A:
        Q. No. 13 (Survey u/s 133A dt 15-09-2008) What do you know
        about the following companies:

        (a) M/s Aparna Credit (P) Ltd.
        (b) M/s Bhavani Portfolio (P) Ltd.
        (c) M/s Compari Fiscal Services (P) Ltd.
        (d) M/s Sai Baba Finvest (P) Ltd.
        (e) M/s Tejasvi Investment (P) Ltd.

        And also explain whether you have any interest in the above
        stated companies and connected in any manner what so ever?

        Ans. All the companies mentioned in question had their
        registered office in this premises i.e. 13/34, 4th Floor, WEA,
        Main Arya Samaj Road, Karol Bagh, New Delhi-110005.



ITA No. 13 of 2017 & connected matters                           Page 9 of 34
Statement of Anu Aggarwal
8. As far as Mr. Anu Aggarwal, Director of the Best Group, is concerned,
the questions put to him and the answers given by him on 15th September,
2008 read as under:
        Q.No.11 Please provide the details of share capital of various
        companies of Best group for the last six year.

        Ans. I will be providing these details in due course of time as
        the computer prints is being taken out.

        Q. No. 12 Please provide the details of share premium of
        various companies of M/s Best Group for the last six years.

        Ans. I will be providing these details in due course of time as
        the computer prints is being taken out.

        Q. No. 13 Please provide the details of secured loans raised by
        you for your various projects and also give details of the
        security provided against the secured loan.

        Ans. We have taken a secured loan of Rs. 16 Cr from Bank of
        Baroda, Naharpur, Rohini, New Delhi in our company M/s Best
        City Developers (I) (P) Ltd. against the security of our flat no.
        14 and No. 26 both situated at Sector-20, Dwarka, New Delhi.

        Q. No. 14 Please provide the details of unsecured loans raised
        by you for your various projects by your various companies,
        during last six years.

        Ans. I am not able to give an immediate reply and I could give
        details of the unsecured loan after going through the looks of
        accounts in short time.

        Q. No. 15 I am showing you Annexure A-I of party BO-1 page
        No. I to 71, which gives details of cash received for sale of
        property not reflected in the books of accounts, Annexure A-4,

ITA No. 13 of 2017 & connected matters                              Page 10 of 34
        pages 1 to 31 and Annexure A-11 pages I to 100 which give
        details of expenses made for construction work which are also
        not reflected in the books of accounts. You are requested to
        explain these documents and reconcile them with your regular
        books of accounts.

        Ans: I have gone through these documents in Annexure A-l, A-
        4 and A-11 and I am unable to explain these documents. We
        have received cash as Advance for sale of property in certain
        instances which has not been reflected in our books of accounts.
        Part of the cash received which has not been accounted by us in
        regular books of accounts has been utilized for making
        expenses in our construction business. This reflects our
        unexplained, unaccounted work in progress. This is the
        explanation for the seized documents Annexure A-4 and A-11.
        The unaccounted cash reflects are reflected in the seized
        documents Annexure A-I To account for these seized
        documents and other seized documents which cannot be
        adequately explain by us, we voluntarily offer a sum of Rs. 8
        Crores (Rs. Eight Corers) which is over and above the normal
        income earned by us during the course of the year. This Rs. 8
        Crores (Eight Crores) represents our undisclosed income earned
        during the year on accounts of unexplained cash receipts,
        unexplained work in progress as well as share capital and share
        premium received This discloser of Rs. Eight Corers which is
        over and above the normal income earned by us during the
        course of the year is being made to buy peace of mind, to avoid
        penalty and prosecution proceedings and also to avoid protected
        litigation.

        Q. No. 16 During the course of search at your office premises,
        H-8, 1st floor, Best Plaza, - Netaji Subhash Place, Pitampura,
        New Delhi cash of Rs.59,96,800/- (Rs Fifty nine lakh Ninety
        six thousand Eight hundred only) was found, and inventoried,
        however as per the looks of accounts, the cash in hand is Rs.
        30,01,000/- (Rs. Thirty lakh one thousand only), please explain
        the source of cash.


ITA No. 13 of 2017 & connected matters                             Page 11 of 34
        Ans. I am unable to give the explanation right now.

9. The further statement of Mr. Anu Aggarwal, Director of Best Group, as
recorded on 24th October, 2008 reads as under:
        Q. No. 3 Please provide the details of share premium of various
        companies of the Best Group of companies for the last 6 year.

        Ans. The required information is being produced/submitted
        today itself.

        Q.No.5 During the course of search cash of Rs.59,96,800/- was
        found and as per the books total cash in hand was Rs.
        30,01,000/-. Please explain the difference and give explanation.

        Ans: The cash in question was received from different persons
        on account of advance on account of sale of properties. As I
        have already mentioned in my earlier statement dated 15-09-
        2008 to question No. 15 where I had clearly mentioned that we
        have received cash from different persons in lieu of bookings of
        properties. I may clarify that the amount of Rs. 8 crores
        surrendered at the time of search, includes this unexplained
        cash of Rs. 30 Lacs (Approximately.)




        Q. No. 6 During the course of search on Sh. Tarun Goyal, he
        has stated in his statement that he has provided you
        accommodation entries. Please explain the same.

        Ans. I personally do not know Sh. Tarun Goyal, except that he
        may have invested in our group companies. However we have
        not received any accommodation entries from anybody. I have
        already given my statement on 15-09-2008 in which in my
        answer to question no. 15. I had surrendered a total amount of
        Rs. 8 Cr. on account of unexplained cash received from various
        bookings in my group companies and the unexplained expenses
        towards the work in progress of various projects in those
        companies and other outgoing. These unexplained receipts and
        out goings can be correlated and detailed at the time of

ITA No. 13 of 2017 & connected matters                             Page 12 of 34
        assessment after going through the seized material and other
        available records.

        Q. No. 7 At the time of search on 15-09-2008 to the question
        No. 15, you also confirmed in your answer that this surrender of
        Rs. 8 Cr. includes receipt of share capital and share premium.
        Please explain and clarify the same.

        Ans. As explained in the answer to the question no. 6, the
        utilization of the unexplained receipts and its correlation with
        the outgoings can be ascertained after examining the seized
        material and therefore it is difficult to detail if any amount from
        the surrender was utilize towards the receipt of any share capital
        or not.

        Q. No.8 During the course of statement on oath u/s 131(IA) of
        Sh. Mahesh Garg, who was running two companies namely M/s
        Dreamland Solutions (P) Ltd. and M/s Meghdoot Express (P)
        Ltd. having business address at 104, B.D. Chambers, D.B.
        Gupta Road, New Delhi has stated that he has provided your
        group accommodation entries. Please explain.

        Ans. We don't know Sh. Mahesh Garg personally. However, we
        can't add anything more to our statement given on 15-09-2008
        in regard to the unexplained receipts and unexplained outgoings
        and our further answer to question No. 6 & 7 above.

        Q. No.9 Please give bifurcation of the surrendered amount i.e.
        heads in which you are willing to surrender and the companies
        in which you desire to surrender.

        Ans. It has already been explained in our answer to question no.
        6 that the surrendered amount is towards the group of
        companies from unexplained receipts and outgoing there
        against and we shall be able to provide the precise details at the
        time of assessment after examining the seized material and
        other documents in our possession in detail.


ITA No. 13 of 2017 & connected matters                                Page 13 of 34
Statement of Harjeet Singh
10. The statement of Mr. Harjeet Singh as recorded on 24th October, 2008
reads as under:
        Q. No. 3 During the course of search on 15-09-2008, you were
        not present at your premises. You were requested to come and
        co-operate and you joined your office late night. In your
        absence, Sh. Anu Aggarwal who is also Director in the Best
        Group of Companies gave his statement. In his statement Sh.
        Anu Aggarwal had surrendered an amount of Rs. 8 Crores on
        account of undisclosed income earned during the year on
        account of unexplained cash receipts, unexplained work in
        progress as well as the share capital and share premium
        received. Do you agree with the statement given by Sh. Anu
        Aggarwal?

        Ans. Yes I agree with the statement given by Sh. Anu
        Aggarwal. He is fully authorized to take decision in the best
        interest of the Group. I stand by his statement and promise to
        pay tax liabilities within the time allowed by the Department.

Assessment Order
11. Although separate assessment orders were passed in respect of each
Assessees for the AYs in question, illustratively, the assessment order dated
30th December, 2010 passed by the Assessing Officer (`AO') in the case of
Best Infrastructure (India) Pvt. Ltd. For AY 2005-06 is being discussed
herein.

12. In the above assessment order, the AO set out a tabulated chart on the
basis of the above statements of Mr Tarun Goyal and Mr Anu Aggarwal and
concluded that the share premium and share application money was nothing
but an unexplained credit and accordingly added Rs. 3.60 Crores to the
assessable income of the Assessee under Section 68 of the Act. The reason
ITA No. 13 of 2017 & connected matters                            Page 14 of 34
given by the AO for this addition was that the Assessees had failed to give
any explanation or furnish any documentary evidence to prove the identity
of the investors and their creditworthiness. They were also unable to prove
the genuineness of the above transactions. It was also noted that the
Assessees failed to produce the persons who purportedly advanced the
alleged share application money or their bank accounts.

13. In para 5.3 of the assessment order, the AO noted that "the Assessee has
submitted some evidences in the form of affidavit and certificate of
incorporation regarding Tarun Goyal Group of Companies, which were
examined on test check basis." The AO further noted that the said affidavits
were undated and not countersigned by Notary/Oath Commissioner. These
affidavits were on forms that were purchased before the date of payment by
the so called Directors of Tarun Goyal Group of Companies. The AO also
noted that Mr. Anu Aggarwal in her statement had "categorically denied
knowing these directors of Tarun Goyal Group of Companies" and he went
on to state that he is not aware if these Employees/Directors who have
signed the affidavits have left the companies.

14. The AO proceeded to also add the commission that might have been
paid for the accommodation entries. It was found that since Assessee
company had taken accommodation entries to the tune of Rs. 3.60 crores,
therefore, by applying the rate of commission at the rate of 2.25%, it must
have paid a sum of Rs. 8.10 lakhs out of its undisclosed income.

Order of the CIT (A)
15. The Commissioner of Income Tax (Appeals) [`CIT (A)'] dismissed the
ITA No. 13 of 2017 & connected matters                             Page 15 of 34
appeal in the case of `Best Infrastructure (India) Pvt. Ltd.' for AY 2005-06
by order dated 11th November, 2013. The ground taken by the Assessee that
the addition was made by the AO without any evidence being collected
during the search and seizure operation under Section 132 of the Act, was
negatived. The CIT (A) also noted that when Mr. Anu Aggarwal, Director of
Best Group of Companies, was confronted with those seized documents, he
admitted the undisclosed income of Rs. 8 crores for the entire Group under
Section 132 (4) of the Act, which, included bogus share capital/ share
application money.

16. The CIT (A) noted that during the search proceedings, Mr. Tarun Goyal
had stated under Section 132(4) of the Act that he had received cash from
Best Group and in return he had given them share capital in the form of a
cheque. It was observed by the CIT (A) that the evidence "does not mean
only documentary evidence. Judicially it has been held that statement under
Section 132(4) is an important evidence collected as a result of search and
seizure operation. Therefore, I hold that in the instant case the addition of
share capital is based on evidence gathered during the search."

17. Reference was made by the CIT (A) to the decision of this Court in CIT
v. Anil Kumar Bhatia (2013) 352 ITR 493 (Del) where it was held that the
AO had the jurisdiction under Section 153A of the Act to make assessment
for all the six years and compute the total income of the Assessee, including
the undisclosed income, notwithstanding that the Assessee filed returns
before the date of search which stood processed under Section 143 (1) of the
Act. Therefore, the challenge to the assessment orders on the ground of


ITA No. 13 of 2017 & connected matters                            Page 16 of 34
erroneous assumption of jurisdiction under Section 153A of the Act was
negatived by the CIT (A).

18. As regards the merits of the additions made under Section 68 of the Act,
the CIT (A) again referred to the statements recorded in the course of search
and in particular the statement of Mr. Anu Aggarwal where he accepted
undisclosed income of Rs.8 crores earned during the year on account of
"unexplained cash receipts, unexplained work-in-progress as well as share
capital and share premium received." The CIT (A) noted in the course of the
appellate proceedings that the authorised representative (`AR') of the
Assessee had filed detailed written submissions dated 7th February, 2012 and
his arguments were, thus, summarised as under:
        i) The appellant company has placed on record entire evidence
        and material to discharge the burden which lay upon it u/s 68 of
        I.T. Act. Ne emphasized that following evidences were filed in
        support of genuineness of share capital.

        a) PAN of shareholder.
        b) Name, address and confirmation of shareholder.
        c) Each shareholder is a corporate entity, i.e. identity of
        shareholder is not doubtful.
        d) Payment is through banking channels.

        ii) As a result of search and seizure operation u/s 132 no cash or
        loose papers were even found to allege, assume or conclude
        that, share capital received represented undisclosed income of
        the appellant company.

        iii) In the paper book, the Ld. AR has filed copy of form no. 2
        filed by the appellant company before the registrar of company
        showing allotment of shares.

        iv)   Ld.     AR      has    relied   upon   the   following   judicial
ITA No. 13 of 2017 & connected matters                                    Page 17 of 34
        pronouncement that under these circumstances, section 68
        cannot be invoked.

        a) CIT v. Stellar Investment Ltd. 192 ITR 287.
        b) Sophia Finance Ltd. 205 ITR 98 (FB) (Del).
        c) CIT v. Divine Leasing and Finance Ltd 299 ITR 268(Del.)
        d) CIT v. Lovely Exports (P) Ltd. 319 ITR5 (ST)

19. The Assessee also raised the point that the statement of Mr. Tarun Goyal
had been recorded behind the back of the Assessee and in the absence of
cross-examination such evidence was of no evidentiary value. It was further
specifically pointed out that "statement of Shri Tarun Goyal has not been
provided to the Appellant company." Further, the Director of the Appellant
company denied that Mr. Goyal was brought before them, face to face, for
the purpose of his cross-examination. It was denied that any entry had been
received from Mr. Goyal or Mr. Mahesh Garg and merely because the share
holders had a common addresses, it does not become a ground to hold that
share capital was unexplained under Section 68 of the Act. In support of this
proposition, reliance was placed on the decision of this Court in CIT v.
Victor Electrodes Ltd. (2012) 329 ITR 271 (Del).

20. A request was made by the Assessee during the appellate proceedings
before the CIT (A) for admission of additional evidence in the form of bank
statements of the share holders. This application was forwarded by the CIT
(A) to the AO who by his letter dated 25 th October, 2012 opposed to the
admission of the additional evidence. Even then, the CIT (A) admitted the
additional evidence and directed the AO to conduct an enquiry. In pursuance
to which, the AO by letters dated 10th July and 19th August, 2013, submitted
the remand report. The AO stated that the summons under Section 131 were
ITA No. 13 of 2017 & connected matters                            Page 18 of 34
issued to Mr. Goyal but he did not appear. Then the AO requested Mr.
Harjeet Singh and Mr. Anu Aggarwal to produce Mr. Tarun Goyal to which
they replied that they "do not presently know the whereabouts of Mr. Tarun
Goyal." The AO maintained that during the entire course of the assessment
proceedings, the Directors of the Best Group had never demanded to cross-
examine Mr. Goyal.

21. The CIT (A) had further noted the submission of learned counsel for the
Assessee that Mr. Tarun Goyal had later retracted his statement made under
Section 132 (4) of the Act on 10th October and 4th November, 2008 and
stating that they had been taken under coercion. The CIT (A) relied on the
disclosure of Mr. Anu Aggarwal offering Rs. 8 crores to tax during the
search proceedings. Reference was made to Annexure A-1 and A-11 which
contained details of "unaccounted cash received and expenses" which had
not been entered in the books of accounts. Reference was also made to the
statements of Mr. Harjeet Singh and Mr. Tarun Goyal. The version of the
AO that till 15th October, 2008 Mr. Anu Aggarwal kept quiet and did not ask
for a copy of the statement of Mr. Goyal or seek his cross-examination was
accepted by the CIT (A). Consequently, the additions made by the AO were
sustained.



Appeals before the ITAT
22. As already noted that separate assessment orders and separate
corresponding orders were passed in appeal by the CIT (A) in respect of
each of the Assessees forming part of the Best Group. The further appeals


ITA No. 13 of 2017 & connected matters                          Page 19 of 34
filed by the Assessees before the ITAT against the orders of the CIT (A) for
the AYs 2005-06 to 2009-10 were consolidated, heard together and disposed
of by way of a common impugned order by the ITAT on 31st May, 2016.

23. Two issues were raised by the Assessees, in all these appeals, for the
consideration of the ITAT.

24. In three of these appeals, the first issue was raised before the ITAT
regarding the addition made under Section 68 of the Act, wherein, the ITAT
on merits found the additions made to be unjustified. Against the judgment
concerning these three matters, the Revenue has filed ITA Nos. 11, 12 and
21 of 2017.

25. The other issue that arose before the ITAT was whether the assumption
of jurisdiction under Section 153A of the Act, qua each of the Assessees,
was justified in law. The ITAT held this issue in favour of the Assessee,
therefore, the Revenue has challenged the same by filing the remaining
appeals, i.e., ITA Nos.13 to 20 and 22 of 2017. Here, the ITAT had held that
there was no incriminating material for each of the AYs other than the year
of search, i.e., AY 2008-09 to justify the assumption of jurisdiction under
Section 153A of the Act.

Submissions of counsel for the Revenue
26. Mr. Rahul Kaushik, learned Senior Standing counsel for the Revenue,
has submitted that the statement of Mr. Tarun Goyal remained unrebutted as
the Assessees never sought to cross-examine him. Secondly, the statement
of Mr. Anu Aggarwal surrendering Rs.8 crore in the course of search and

ITA No. 13 of 2017 & connected matters                           Page 20 of 34
also his admission of receiving accommodation entries was itself
incriminating material for the purposes of assumption of jurisdiction under
Section 153A of the Act. In support of his contention, learned counsel for
the Revenue placed considerable reliance on the decision of this Court in
Smt. Dayawanti Gupta v. CIT (2016) 390 ITR 496 (Del) and sought to
distinguish the judgment of this Court in Commissioner of Income Tax
(Central-III) v. Kabul Chawla (2016) 380 ITR 573 (Del). He submitted that
apart from the above, the documents A-1, A-4 and A-11 that were seized
during the search, also constituted incriminating material. According to him,
there was no requirement that incriminating material qua each of the AYs,
for which the addition was made, needed to exist. He relied upon the
observations of this Court in the decision in CIT v. Anil Kumar Bhatia
(supra). He also sought to distinguish the recent decision of this Court in
Principal Commissioner of Income Tax Central-2, New Delhi v. Meeta
Gutgutia 2017 (295) CTR 466 (Del).

27. As regards additions made on merits under Section 68 of the Act, Mr.
Kaushik again took this Court through the materials and submitted that the
deletion made by the ITAT, of the additions which had been made by the
AO which were further confirmed by the CIT (A), was not called for in the
facts and circumstances of the case.

Submissions of counsel for the Assessee
28. Supporting the order under appeal, Mr. Ved Kumar Jain, learned counsel
appearing for the Assessee, submitted that the surrender of Rs. 8 crores
made by Mr. Anu Aggarwal was only vis-a-vis the year of search and not


ITA No. 13 of 2017 & connected matters                            Page 21 of 34
other years. Even for the year of search, the additions under Section 68 of
the Act were found to be unjustified by the ITAT. He pointed out that the
ITAT had examined thoroughly the entire evidence and returned a factual
finding which has not been assailed on the ground of perversity.

29. Mr. Jain submitted that as far as the assumption of jurisdiction was
concerned, the so-called documents seized were only loose sheets. These
were confronted to Mr Anu Aggarwal who categorically stated:
        I am unable to explain these documents. We have received cash
        as advance for sale of property in certain instances which has
        not been reflected in our books of accounts. Part of the cash
        received which has not been accounted by us in regular books
        of accounts has been utilizedfor making expenses in our
        construction business. This reflects our unexplained,
        unaccounted work in progress.

30. Mr. Jain placed reliance on the decision of this Court in Commissioner
of Income Tax v. Harjeev Aggarwal (2016) 290 CTR 263 and submitted
that mere statements made during the course of the search, under Section
132 (4) of the Act, cannot be considered to be incriminating material. He
submitted that the decision in Principal Commissioner of Income Tax
Central-2, New Delhi v. Meeta Gutgutia (supra) has considered the legal
position after analysing the entire case law and, therefore, the decision in
Smt. Dayawanti Gupta v. CIT (supra) would not come to the aid of the
Revenue in the present case. He pointed out that apart from the fact that Mr.
Tarun Goyal had later retracted his statement, it was plain that even a copy
of the statement of Mr. Tarun Goyal was not provided. Further, Mr. Tarun
Goyal could not be produced for cross-examination, therefore, no reliance
could be placed on his statement.
ITA No. 13 of 2017 & connected matters                             Page 22 of 34
Analysis and reasons
31. In Principal Commissioner of Income Tax Central-2, New Delhi v.
Meeta Gutgutia (supra), this Court had considered the entire gamut of case
law on the assumption of jurisdiction under Section 153A of the Act. In
Principal Commissioner of Income Tax Central-2, New Delhi v. Meeta
Gutgutia (supra) this Court had the occasion to extensively discuss the
decision in Smt. Dayawanti Gupta v. CIT (supra) to point out why the said
decision was distinguishable in its application to the facts of the former case.
However, since the same arguments have been advanced by the Revenue in
the present case, the said decision in Smt. Dayawanti Gupta v. CIT (supra)
is being again discussed herein.

32. In Smt. Dayawanti Gupta v. CIT (supra) the Assessees were dealing in
the business of pan masala, gutkha, etc. Firstly, the Assessees therein were,
by their own admission not maintaining regular books of accounts.
Secondly, they also admitted that the papers recovered during the search
contained           "details         of   various    transactions       include
purchase/sales/manufacturing trading of Gutkha, Supari made in cash
outside books of accounts" and they were "actually unaccounted
transactions made" by two of the firms of the Assessees. Thirdly, the Court
found as a matter of fact that the Assessees were "habitually concealing
income" and that they were "indulging in clandestine operations" and that
such persons "can hardly be expected to maintain meticulous books or
records for long." As pointed out by this Court in Principal Commissioner
of Income Tax Central-2, New Delhi v. Meeta Gutgutia (supra) the


ITA No. 13 of 2017 & connected matters                              Page 23 of 34
decision in Smt. Dayawanti Gupta v. CIT (supra), therefore, turned on its
own facts and did not dilute the law explained in Commissioner of Income
Tax (Central-III) v. Kabul Chawla (supra).

33. At this stage, it requires to be noticed that the decision of this Court in
Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra) took
note inter alia of the decision of the Bombay High Court in Commissioner
of Income Tax v. Continental Warehousing Corporation (Nhava Sheva)
Ltd. [2015] 58 taxmann.com 78 (Bom), wherein it was held that if no
incriminating material was found during the course of search, in respect of
each issue, then no addition in respect of any such issue can be made to the
assessment under Sections 153A and 153C of the Act. The decisions of this
Court in CIT v. Anil Kumar Bhatia (supra) and CIT v. Chetan Das
Lachman Das [2012] 254 CTR 392 (Del) were extensively discussed in
Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra). The
Court in Commissioner of Income Tax (Central-III) v. Kabul Chawla
(supra) had also discussed and concurred with the decision of the Rajasthan
High Court in Jai Steel (India), Jodhpur v. ACIT (2013) 36 Taxman 523
(Raj) which had held that the assessment in respect of each of the six
assessment years, preceding the year of search "is a separate and distinct
assessment." It was further held in the said decision that "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."



ITA No. 13 of 2017 & connected matters                              Page 24 of 34
34. In Commissioner of Income Tax (Central-III) v. Kabul Chawla (supra)
the legal position was summarised thus:
        37. On a conspectus of Section 153A (1) of the Act, read with
        the provisos thereto, and in the light of the law explained in the
        aforementioned decisions, the legal position that emerges is as
        under:

        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

ITA No. 13 of 2017 & connected matters                               Page 25 of 34
        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 already disclosed or made known in
        the course of original assessment.

35. As noted in Principal Commissioner of Income Tax Central-2, New
Delhi v. Meeta Gutgutia (supra), several other High Courts have also come
to a similar conclusion either by following Commissioner of Income Tax
(Central-III) v. Kabul Chawla (supra) or otherwise. This includes the
decisions of the Gujarat High Court in Principal Commissioner of Income
Tax v. Saumya Construction Pvt. Ltd. (2016) 387 ITR 529 (Guj); Principal
Commissioner of Income Tax-1 v. Devangi alias Rupa 2017-TIOL-319-
HC-AHM-IT; the Karnataka High Court in CIT v. IBC Knowledge Park
Pvt. Ltd. (2016) 385 ITR 346 (Kar); the Kolkata High Court in Pr. CIT-2 v.
Salasar Stock Broking Ltd. 2016-TIOL-2099-HC-KOL-IT and the Bombay
High Court in CIT v. Gurinder Singh Bawa (2016) 386 ITR 483 (Bom). In
Principal Commissioner of Income Tax Central-2, New Delhi v. Meeta





ITA No. 13 of 2017 & connected matters                               Page 26 of 34
Gutgutia (supra) the entire gamut of the case law had been analysed and the
legal position was reiterated that unless there is incriminating material qua
each of the AYs in which additions are sought to be made, pursuant to
search and seizure operation, the assumption of jurisdiction under Section
153A of the Act would be vitiated in law. This is one more occasion for the
Court to reiterate that legal position.

36. Turning to the facts of the present case, it requires to be noted that the
statements of Mr. Anu Aggarwal, portions of which have been extracted
hereinbefore, make it plain that the surrender of the sum of Rs. 8 crores was
only for the AY in question and not for each of the six AYs preceding the
year of search. Secondly, when Mr. Anu Aggarwal was confronted with A-
1, A-4 and A-11 he explained that these documents did not pertain to any
undisclosed income and had, in fact been accounted for. Even these,
therefore, could not be said to be incriminating material qua each of the
preceding AYs.

37. Fourthly, a copy of the statement of Mr. Tarun Goyal, recorded under
Section 132 (4) of the Act, was not provided to the Assessees. Mr. Tarun
Goyal was also not offered for the cross-examination. The remand report of
the AO before the CIT(A) unmistakably showed that the attempts by the
AO, in ensuring the presence of Mr. Tarun Goyal for cross-examination by
the Assessees, did not succeed. The onus of ensuring the presence of Mr.
Tarun Goyal, whom the Assessees clearly stated that they did not know,
could not have been shifted to the Assessees. The onus was on the Revenue
to ensure his presence. Apart from the fact that Mr. Tarun Goyal has


ITA No. 13 of 2017 & connected matters                             Page 27 of 34
retracted his statement, the fact that he was not produced for cross-
examination is sufficient to discard his statement.

38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act
do not by themselves constitute incriminating material as has been explained
by this Court in Commissioner of Income Tax v. Harjeev Aggarwal
(supra). Lastly, as already pointed out hereinbefore, the facts in the present
case are different from the facts in Smt. Dayawanti Gupta v. CIT (supra)
where the admission by the Assessees themselves on critical aspects, of
failure to maintain accounts and admission that the seized documents
reflected transactions of unaccounted sales and purchases, is non-existent in
the present case. In the said case, there was a factual finding to the effect
that the Assessees were habitual offenders, indulging in clandestine
operations whereas there is nothing in the present case, whatsoever, to
suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh
contained any such admission.

39. For all the aforementioned reasons, the Court is of the view that the
ITAT was fully justified in concluding that the assumption of jurisdiction
under Section 153A of the Act qua the Assessees herein was not justified in
law.

40. Turning to the additions under Section 68 of the Act made on merits for
three of the AYs. A perusal of the common impugned order of the ITAT
reveals that a very detailed discussion has been undertaken after analysing
the seized material. Para 38 of the impugned order is relevant in this context
which reads as under:
ITA No. 13 of 2017 & connected matters                             Page 28 of 34
         "38. Before the learned CIT (A), the assessee has produced the
         copy of bank account of all the share applicant companies. The
         CIT (A) has admitted the same as, additional evidence and has
         called for the remand report from the Assessing Officer. There
         is no cash deposit in the bank account of any of the share
         applicant before the issue of cheque for share application
         money to the group companies of the assessee. On the other
         hand, the credit is by way of transaction. During remand
         proceedings, the Assessing Officer has made necessary
         verification from the bank of the share applicant and no adverse
         finding is recorded by him in the remand report. Therefore, the
         facts on record are contrary to the allegation of the Revenue that
         the assessee gave cash to Shri Tarun Goyal and he, after
         depositing the same in the bank account of various companies,
         issued cheques for share application money. On these facts, the
         decision of Hon'ble Jurisdictional High Court in the case of
         Harjeev Aggarwal (supra) would be squarely applicable.
         Therefore, we hold that the statement of Shri Tarun Goyal
         cannot be used against the assessee because:

                (i) His statement was recorded behind the back of the
                assessee and the assessee was not allowed any
                opportunity to cross-examine him.

                (ii) There is no corroborative evidence in support of the
                statement of Shri Tarun Goyal. On the other hand, the
                material found during the course of search and other
                evidences placed on record by the assessee are contrary
                to the allegation made by Shri Tarun Goyal in his
                statement."

41. The Court has not been persuaded to hold that the above finding of the
ITAT on the legal position regarding the Revenue being disabled from
relying on the statement of Mr. Tarun Goyal suffers from any perversity.
Further the ITAT has in the impugned order in paras 45 and 46 observed as
under:

ITA No. 13 of 2017 & connected matters                                Page 29 of 34
        "45. Now, we come back to the facts of the assessee's case in
        respect of the share application money received. The assessee
        has furnished the affidavit of the director of share applicant
        company, share application form, confirmation from share
        applicant, certificate of incorporation of the shareholder
        company and copy, of income tax return of share applicant
        company. The Assessing Officer has disputed the validity of the
        affidavit on the ground that affidavit is not certified by the
        notary and the stamp paper for purchase of affidavit is dated
        prior to the application made for share application money. On
        verification of the copy of the affidavit which is placed at pages
        48 & 49 of the assessee's paper book, we find that the affidavit
        is not made in the presence of notary public and, therefore, it
        cannot be considered as affidavit in legal sense. Nevertheless, it
        remains a self-declaration by the director of share applicant
        company in which he has confirmed that the company has
        applied to M/s Best City Developers (India) Private Limited for
        15 lakhs equity shares for which payment of Rs.1,50,00,000/-
        has been made by cheque. The detail of cheque number and the
        name of the bank have also been provided. In paragraph 3, the
        permanent account number of the share applicant company has
        also been provided. In paragraph 2, it is mentioned that the
        share applicant company is registered with Registrar of
        Companies and registration number along with date of
        registration is also given. The assessee has furnished share
        application form for which also the address of the share
        applicant company, number of shares applied for, amount paid
        by cheque, details of cheque number as well as permanent
        account number of the company has been given. The
        confirmation has been filed by the share applicant company
        giving all necessary particulars and, for ready reference, we
        reproduce the same herein below:

                        Aries Crafts Private Limited
       13/34, W.F.A., IVth Floor, Main Arya Samaj Road, Karol Bagh,
                             New Delhi-110005
                          To whom it may concern


ITA No. 13 of 2017 & connected matters                               Page 30 of 34
Name of the Company:                     Best City Developers (India) Pvt. Ltd.
Number of shares:                        15000000 Equity Shares of Rs.1 each at a
                                         premium of Rs.9 per share.
Amount invested:                         Rs.150,00,000/-
                                         Rupee One Crore Fifty Lac Only.
Details of Payment as under:
_____________________________________________________________
Chq. No.     Date        Amount (Rs.) Bank           Branch
_____________________________________________________________
474604       15.03.2008 100,00,000    HDFC Bank Ltd. New Delhi

474615          25.03.2008 50,00,000                HDFC Bank Ltd. New Delhi
                      Total 150,00,000

Bank Account No.:               003142340000152
Bank Particulars:               HDFC Bank Limited
                                Ansari Road, Darya Ganj,
                                New Delhi - 110 002

Source of funds:          Out of sale of shares
Occupation:               Business
Income Tax PAN Number: AADCA5439P Ward 1(3), New Delhi.
Share Certificates Received: Yes
We do hereby confirm that the information furnished above is correct.
For Aries Crafts Private Limited
Sd/-
Authorised Signatory


        46. From the above, it is evident that the share applicant
        company has given the confirmation on its letter head which
        gives the complete address of the said company. In the
        confirmation, number of shares applied and the amount invested
        has been given. Details of payments i.e., cheque number, date
        of cheque and name of the bank on whom cheque is drawn is
        given. Address of the bank and bank account number has also
        been given, source of fund is given as well as permanent
        account number of the company is also given."

ITA No. 13 of 2017 & connected matters                                 Page 31 of 34
42. Thereafter the ITAT held in para 48 as under:
        "48. .....In the case under consideration before us, the assessee
        has duly furnished the declaration of the director of the share
        applicant company, share application form, confirmation and
        certificate of incorporation from Registrar of Companies as well
        as income tax return of the share applicant company. The
        Assessing Officer did not make any verification from those
        documents. In this case, he even did not issue any summons to
        the director of the share applicant company neither made any
        cross verification from the income tax record of the share
        applicant company whose permanent account number was
        furnished before him. The Assessing Officer simply rejected the
        evidences furnished by the assessee. Hon'ble Jurisdictional
        High Court in the case of Gangeshwari Metal Pvt. Ltd. (supra)
        has disapproved the action of the Assessing Officer wherein the
        Assessing Officer sits back with folded hands till the assessee
        exhausts all the evidence or material in his possession and then
        comes forward to merely reject the same on the presumptions.
        The facts in the assessee's case are identical to the facts before
        the Hon'ble Jurisdictional High Court in the case of
        Gangeshwari Metal Pvt. Ltd. (supra). In the case under appeal
        before us also, the Assessing Officer simply sits back till the
        assessee submitted all the evidences and thereafter rejected
        those evidences on the basis of presumption and suspicion. He
        did not make any enquiry, he did not issue any summons to the
        share applicant company, he did not try to verify from the
        record of the share applicant company who are all assessed to
        income tax. In view of the above, respectfully following the
        decision of Hon'ble Apex Court in the case of Orissa
        Corporation P. Ltd. (supra) and of Hon'ble Jurisdictional High
        Court in the case of Rakam Money Matters Pvt. Ltd. (supra),
        Victor Electrodes Ltd. (supra), Fair Finvest Ltd. (supra) and
        Gangeshwari Metal Pvt. Ltd. (supra), we hold that the assessee
        has duly discharged the onus which lay upon it to prove the
        credit in the form of share capital. Accordingly, the addition
        made for unexplained share capital is deleted."

ITA No. 13 of 2017 & connected matters                               Page 32 of 34
43. With the Assessees discharging the burden placed on them to explain the
credit appearing in the books of accounts, the Court is satisfied that even on
this aspect the impugned order of the ITAT suffers from no legal infirmity
warranting interference.

Conclusion
44. Accordingly the question framed by the Court in ITA Nos. 11, 12 and 21
of 2017 by the order dated 21st March, 2017 is answered in the negative i.e.
in favour of the Assessee and against the Revenue by holding that the
additions made under Section 68 of the Act on account of the statements
made by the Assessee's Directors in the course of search under Section 132
of the Act were rightly deleted by the ITAT.

45. The question framed in ITA Nos. 13 to 20 and 22 of 2017 by the order
dated 21st March, 2017 is answered in the affirmative i.e. in favour of the
Assessee and against the Revenue by holding that having regard to the
materials seized in the course of search under Section 132 and the
statements made on behalf of the Assessee, the assumption of jurisdiction
under Section 153 A of the Act and the consequent additions made by the
AO were not justified.

46. Consequently, the appeals of the Revenue are dismissed but in the
circumstances, with no orders as to costs.

CM 831/2017 in ITA 11/2017;CM 834/2017 in ITA 12/2017
CM 836/2017 in ITA 13/2017; CM 839/2017 in ITA 14/2017
CM 842/2017 in ITA 15/2017; CM 845/2017 in ITA 16/2017

ITA No. 13 of 2017 & connected matters                             Page 33 of 34
CM 848/2017 in ITA 17/2017; CM 851/2017 in ITA 18/2017
CM 854/2017 in ITA 19/2017; CM 857/2017 in ITA 20/2017
CM 865/2017 in ITA 21/2017; CM 862/2017 in ITA 22/2017

47. For the reasons stated in the applications, the delay in filing the appeals
is condoned. The applications are, accordingly, disposed of.




                                                      S. MURALIDHAR, J.



                                                 PRATHIBA M. SINGH, J.
AUGUST 01, 2017
dn/b'nesh




ITA No. 13 of 2017 & connected matters                              Page 34 of 34

 
 
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