ACIT, New Delhi v. M/s. Vidhya Shankar Investment Pvt. Ltd., New Delhi

ITA 6569/DEL/2013 | 2007-2008
Pronouncement Date: 28-09-2016 | Result: Dismissed

Appeal Details

RSA Number 656920114 RSA 2013
Assessee PAN AAACV4336K
Bench Delhi
Appeal Number ITA 6569/DEL/2013
Duration Of Justice 2 year(s) 9 month(s) 18 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Vidhya Shankar Investment Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 28-09-2016
Date Of Final Hearing 29-08-2016
Next Hearing Date 29-08-2016
Assessment Year 2007-2008
Appeal Filed On 10-12-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI KULDIP SINGH JUDICIAL MEMBER ITA NO.6569/DEL./2013 (ASSESSMENT YEAR : 2007-08) ITA NO.6570/DEL./2013 (ASSESSMENT YEAR : 2008-09) ITA NO.6571/DEL./2013 (ASSESSMENT YEAR : 2009-10) ACIT CENTRAL CIRCLE 9 VS. M/S. VIDHYA SHANKAR INV ESTMENT PVT. LTD. NEW DELHI. 402 AMBER TOWER NANIWALA BAGH AZADPUR DELHI 110 033. (PAN : AAACV4336K) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGGARWAL ADVOCATE AND SHRI SHAILESH GUPTA CA REVENUE BY : MS. PORAMITA TRIPATHY CIT DR DATE OF HEARING : 07.09.2016 DATE OF ORDER : 28.09.2016 O R D E R PER KULDIP SINGH JUDICIAL MEMBER : SINCE IDENTICAL QUESTION OF FACT AND LAW HAVE BEEN RAISED IN THE AFORESAID APPEALS THE SAME ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUSSIO N. ITA NOS.6569 TO 6571/DEL./2013 2 2. THE APPELLANT ASSISTANT COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE 9 NEW DELHI (HEREINAFTER REFERRED T O AS THE REVENUE) BY FILING THE PRESENT APPEALS SOUGHT TO S ET ASIDE THE IMPUGNED ORDERS DATED 30.09.2013 PASSED BY THE COMM ISSIONER OF INCOME-TAX (APPEALS)-XXXII NEW DELHI QUA THE ASSES SMENT YEARS 2007-08 2008-09 AND 2009-10 ON THE GROUNDS INTER A LIA THAT :- AY 2007-08 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN L AW AND ON FACTS IN DELETING THE ADDITION OF RS.4 78 21 800/- MADE BY THE AO BY TREATING THE BOGUS SHARE APPLICAT ION MONEY AND SHARE PREMIUM AS UNEXPLAINED CASH CREDIT. 2. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT T ENABLE IN LAW AND ON FACTS. (B) THE APPELLANTS CRAVES LEAVE TO ADD ALTER OR AM END ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. AY 2008-09 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN L AW AND ON FACTS IN DELETING THE ADDITION OF RS.7 75 00 000/- MADE BY THE AO BY TREATING THE BOGUS SHARE APPLICAT ION MONEY AND SHARE PREMIUM AS UNEXPLAINED CASH CREDIT. 2. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT T ENABLE IN LAW AND ON FACTS. (B) THE APPELLANTS CRAVES LEAVE TO ADD ALTER OR AM END ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. AY 2009-10 1. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN L AW AND ON FACTS IN DELETING THE ADDITION OF RS.9 73 37 500/- MADE BY THE AO BY TREATING THE BOGUS SHARE APPLICAT ION MONEY AND SHARE PREMIUM AS UNEXPLAINED CASH CREDIT. ITA NOS.6569 TO 6571/DEL./2013 3 2. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT T ENABLE IN LAW AND ON FACTS. (B) THE APPELLANTS CRAVES LEAVE TO ADD ALTER OR AM END ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND IN THESE APPEALS ARE : DURING T HE SEARCH AND SEIZURE OPERATION UNDER SECTION 132/133A OF THE INC OME-TAX ACT 1961 (FOR SHORT THE ACT) CONDUCTED ON 14.09.2010 AT THE BUSINESS AND RESIDENTIAL PREMISES OF M/S. JAGAT AGTO COMMODI TIES PVT. LTD. 802 AMBA DEEP BUILDING K.G. MARG NEW DELHI NUME ROUS DOCUMENTS WERE RECOVERED CONTAINING BALANCE SHEET AND TRIAL BALANCE OF M/S. VIDHYA SHANKAR INVESTMENTS PVT. LTD . (ASSESSEE) FOR THE PERIOD 01.04.2010 TO 04.09.2010 BELONGING T O THE ASSESSEE COMPANY. AFTER RECORDING SATISFACTION NOTE U/S 153 C NOTICES WERE ISSUED FOR THE ASSESSMENT YEARS 2005-06 TO 2010-11 ON 13.02.2013 TO WHICH ASSESSEE RAISED OBJECTIONS VIDE LETTER DATED 21.02.2013 INTER ALIA THAT DOCUMENTS DO NOT BELONG TO THE ASSESSEE COMPANY. ASSESSEE OPTED TO TREAT THE RETURN FILED U/S 139(1) AS REPLY TO THE NOTICE ISSUED U/S 153C. THEN THE ASS ESSEE WAS SERVED WITH NOTICE U/S 143 (2) AND 142 (1) AND IN RESPONSE THERETO SHRI RAVINDER GOEL CA/AR PUT IN APPEARANCE FILED NECES SARY DETAILS AND EXPLANATION. ITA NOS.6569 TO 6571/DEL./2013 4 3. FROM THE DOCUMENTS SEIZED DURING SEARCH AND SEIZ URE OPERATION FORM M/S. JAGAT GROUP AND S.K. JAIN GROUP IT WAS NOTICED THAT SHRI S.K. JAIN GROUP WAS INDULGED INTO PROVIDING ENTRIES UNDER THE GARB OF SHARE CAPITAL ETC. THROUG H ITS SHAM COMPANIES AND M/S. JAGAT GROUP WAS FOUND TO REROUTI NG ITS UNRECORDED AND UNACCOUNTED INCOME BY WAY OF TAKING ENTRIES OF LOAN AND SHARE CAPITAL FROM SUCH SHAM COMPANIES. R EVENUE ALSO NOTICED THAT SHRI SATISH PAWA AND SHRI SANT LAL AGR AWAL HEAD OF M/S. JAGAT GROUP HAVE ACQUIRED/PURCHASED VARIOUS SU CH COMPANIES HAVING HUGE NET WORTH BY PURCHASING THEIR SHARES AT VERY LOW PRICES IN THE NAME OF THEIR FAMILY MEMBERS OR THEIR EMPLOY EES AND THE ASSESSEE COMPANY IS ALSO ONE OF SUCH COMPANY. 4. DURING THE YEAR UNDER ASSESSMENT I.E. 2007-08 T HE ASSESSEE COMPANY HAD RECEIVED SHARE CAPITAL OF RS.47 90 000/ - AND SHARE PREMIUM OF RS.4 30 31 800/- FROM 32 INVESTORS; FOR AY 2008-09 THE ASSESSEE COMPANY HAD RECEIVED SHARE CAPITAL OF RS.77 50 000/- AND SHARE PREMIUM OF RS.6 97 50 000/- FROM 29 INVES TORS; FOR AY 2009-10 THE ASSESSEE COMPANY HAD RECEIVED SHARE CA PITAL OF RS.97 40 000/- AND SHARE PREMIUM OF RS.8 75 97 500/ - FROM 26 INVESTORS; ASSESSEE COMPANY FILED NECESSARY DOCUMEN TS WHICH THE AO HAS NOT FOUND TO BE GENUINE; AO ALSO CAME TO THE CONCLUSION THAT THESE DOCUMENTS DO NOT PROVE THE CAPACITY OF T HE INVESTORS TO ITA NOS.6569 TO 6571/DEL./2013 5 PROVIDE SHARE CAPITAL/SHARE PREMIUM ALLEGEDLY INVES TED BY THEM AND COMPANIES ARE APPEARING NOT INTO ANY BUSINESS A ND HAVING INCOME TO MAKE SUCH AN INVESTMENT. 5. AO ALSO NOTICED THAT ALL THE PURCHASES OF THE SH ARES OF M/S. JAGAT GROUP ARE CONNECTED AND CONTROLLED BY OWNER O F M/S. JAGAT GROUP SHRI SATISH KUMAR PAWA AND SHRI SANT LAL AGR AWAL AND IT HAS COME ON RECORD THAT SHARES OF ASSESSEE COMPANY WERE SOLD BY M/S. JAGAT GROUP AT THE PRICE OF RS.3.5 PER SHARE A GAINST THE FACE VALUE OF RS.10 AND BOOK VALUE OF RS.90.25 PER SHARE WHICH SHOWS THAT THE ASSESSEE COMPANY IS A MAIN COMPANY TO INTR ODUCE UNDISCLOSED INCOME OF M/S. JAGAT GROUP UNDER THE GA RB OF SHARE CAPITAL AND SHARE PREMIUM ROUTED THROUGH VARIOUS CO MPANIES MENTIONED IN THE DETAILED ASSESSMENT ORDER. AO ALS O NOTICED THAT SALE OF SHARE @ RS.3.50 PER SHARE AS AGAINST THE BO OK VALUE OF THE SHARE OF THE ASSESSEE COMPANY AT RS.90.25 PER SHARE MAKES THE ENTIRE TRANSACTION DOUBTFUL. THEREFORE HOW M/S. J AGAT GROUP PURCHASED ENTIRE COMPANY FOR A CONSIDERATION OF RS. 87 44 750/- WHEN IN THE MONTH OF TRANSFER SHARE CAPITAL AND RE SERVE AND SURPLUS OF THE ASSESSEE COMPANY WERE RS.22 54 99 727/-. AO ALSO NOTICED THAT SO CALLED INVOICES HAVE MERELY SOLD THEIR INVE STMENT AT THROW AWAY PRICES INSPITE OF THE FACT THAT THERE WAS NO B USINESS EXIGENCY OR MARKET FACTORS TO SELL THEIR INVESTMENT AT THROW AWAY PRICES. AO ITA NOS.6569 TO 6571/DEL./2013 6 TREATED THE SAME AS ACCOMMODATION ENTRIES AND THERE BY TREATED THE SAME AS UNEXPLAINED CASH U/S 68 OF THE ACT BY MAKIN G AN ADDITION TO THE TUNE OF RS.4 78 21 800/- (RS.47 90 000/- + R S.4 30 31 800/-) QUA AY 2007-08; RS.7 75 00 000/- (RS.77 50 000/- + RS.6 97 50 000/-) QUA AY 2008-09; AND RS.9 73 37 50 0/- (RS.97 40 000/- + RS.8 75 97 500/-) QUA AY 2009-10. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING THE APPEALS WHO HAS ALLOWED ALL THE APPEALS QUA AYS 2007- 08 2008-09 AND 2009-10 VIDE IMPUGNED ORDERS. FEELI NG AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE LD. DR FOR THE REVENUE CHALLENGING THE IMPUG NED ORDERS CONTENDED INTER ALIA THAT THE LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON FACTS THAT THE AO HAS NO JURISDICTION U/S 153C O F THE ACT; THAT THE AO ISSUED NOTICE U/S 153C AFTER RECORDING THE S ATISFACTION NOTE ON THE BASIS OF INCRIMINATING MATERIAL AGAINST THE ASSESSEE COMPANY SEIZED DURING SEARCH AND SEIZURE OPERATION ON M/S. JAGAT GROUP OF COMPANIES AND RELIED UPON THE ORDERS PASSED BY THE AO. ITA NOS.6569 TO 6571/DEL./2013 7 9. HOWEVER ON THE OTHER HAND LD. AR FOR THE ASSES SEE TO REPEL THE CONTENTIONS RAISED BY THE LD. DR CONTENDED INTE R ALIA THAT THE AO HAS NO JURISDICTION IN THIS CASE TO MAKE AN ASSE SSMENT U/S 153C AS THE DOCUMENTS SEIZED PERTAINS TO THE PERIOD 01.0 4.2010 TO 04.09.2010 AND NOT QUA THE ASSESSMENT YEARS UNDER C ONSIDERATION; THAT THE INCOME-TAX RETURN OF ALL THE ENTITIES/INVO ICES TREATED AS IN- GENUINE INVOICES BY THE AO HAVE BEEN CONFIRMED BY T HE AO; THAT ONLY LIST OF SHAREHOLDERS WERE SEIZED WHICH DOES NO T FIND MENTION IN THE SATISFACTION NOTE. 10. UNDISPUTED FACTS NECESSARY TO ADJUDICATE UPON T HE CONTROVERSY AT HAND ARE INTER ALIA THAT SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMI SES OF M/S. JAGAT GROUP ON 14.09.2010 AND NUMEROUS DOCUMENTS WE RE SEIZED; THAT BALANCE SHEET AND TRAIL BALANCE OF M/S. VIDHYA SHANKAR INVESTMENTS PT. LTD. THE ASSESSEE COMPANY PERTAIN ING TO THE PERIOD 01.04.2010 TO 04.09.2010 WERE SEIZED; THAT T HE ASSESSEE HAD FILED RETURN U/S 139 (1) DECLARING INCOME AT RS.17 466/- ON 04.09.2007 QUA AY 2007-08; AT RS.14 410/- ON 23.03. 2009 QUA AY 2008-09; AND AT RS.16 120/- ON 10.10.2009 QUA AY 20 09-10. 11. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FAC TS AND CIRCUMSTANCES OF THE CASE THE FIRST QUESTION ARISE S FOR DETERMINATION IN THIS CASE IS :- ITA NOS.6569 TO 6571/DEL./2013 8 AS TO WHETHER AO WHO HAS RECORDED THE SATISFACTION THAT THE DOCUMENTS RELATE TO THE ASSESSEE COMPANY THAT IS OTHER THAN THE SEARCHED PERSON HAD THE JURISDIC TION TO PASS THE ASSESSMENT ORDER IN QUESTION? 12. IDENTICAL ISSUE HAS COME UP BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN CASE ENTITLED AS SSP AVIATION LTD. VS. DCIT (2012) 346 ITR 177 (DELHI) . THE RATIO OF THE JUDGMENT IN SSP AVIATION LTD. (SUPRA) IS THAT THE AO WHO HAS RECORDED SATISFACTIO N QUA THE DOCUMENTS SEIZED DURING SEARCH AND SEIZURE OPERATION PERTAINING TO SOME THIRD PARTY I.E. OTHER THAN THE SEARCHED PERSON HAS NO POWER EXCEPT TO FORWARD THE DOCUMENTS TO THE AO HAVING JURISDICTION OVER THE SAID THIRD PERSON. THE RATIO OF THE JUDGMENT IN SSP AVIATION LTD. (SUPRA) IS APPLICABLE TO THE FACTS AND CIRCUMSTANCE OF THE CASE WHEREIN THE AO WHO HAS PAS SED THE IMPUGNED ASSESSMENT ORDER SET ASIDE BY THE LD. CIT (A) AFTER RECORDING HIS SATISFACTION U/S 153C HAS NO JURISDI CTION WHATSOEVER. HE WAS MERELY EMPOWERED TO FORWARD THE SEIZED DOCUM ENT PERTAINING TO THE ASSESSEE TO THE CONCERNED AO HAVI NG THE JURISDICTION OVER THE ASSESSEE COMPANY. 13. FOR READY PERUSAL OPERATIVE PART OF THE JUDGME NT IN SSP AVIATION LTD. (SUPRA) IS REPRODUCED AS UNDER :- SECTION 153C OF THE INCOME-TAX ACT 1961 MERELY ENABLES THE REVENUE AUTHORITIES TO INVESTIGATE INTO THE CONTENTS OF THE DOCUMENT SEIZED WHICH BELONGS TO A ITA NOS.6569 TO 6571/DEL./2013 9 PERSON OTHER THAN THE PERSON SEARCHED SO THAT IT CA N BE ASCERTAINED WHETHER THE TRANSACTION OR THE INCOME EMBEDDED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIATE PERSON. IT IS AIMED AT ENSU RING THAT INCOME DOES NOT ESCAPE ASSESSMENT IN THE HANDS OF A NY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHE D UNDER SECTION 132 OF THE ACT. IT IS ONLY A FIRST ST EP TO THE ENQUIRY WHICH IS TO FOLLOW. THE ASSESSING OFFICER WHO HAS REACHED THE SATISFACTION THAT THE DOCUMENT RELA TES TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHIN G EXCEPT TO FORWARD THE DOCUMENT TO THE ASSESSING OFF ICER HAVING JURISDICTION OVER THE OTHER PERSON AND THERE AFTER IT IS FOR THE ASSESSING OFFICER HAVING JURISDICTION OV ER THE OTHER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED BY SECTION 153A IN AN ATTEMPT TO ENSURE THAT THE INCOM E REFLECTED BY THE DOCUMENT HAS BEEN ACCOUNTED FOR BY SUCH OTHER PERSON. IT WILL BE SEEN THAT WHEREAS SEC TION 158BD REFERS TO THE SATISFACTION OF THE ASSESSING O FFICER THAT ANY 'UNDISCLOSED INCOME' BELONGS TO ANY PERSON OTHER THAN THE SEARCHED PERSON SECTION 153C(1) IN CONTRAST REFERS MERELY TO THE SATISFACTION OF THE A SSESSING OFFICER THAT THE VALUABLE ARTICLE OR BOOKS OF ACCOU NT OR DOCUMENT 'BELONGS' TO A PERSON OTHER THAN THE SEARC HED PERSON. THE LATTER PROVISION DOES NOT REFER TO ANY UNDISCLOSED INCOME AT ALL. THE MACHINERY PROVIDED I N SECTION 153C READ WITH SECTION 153A MERELY FACILITA TES AN ENQUIRY REGARDING THE EXISTENCE OR OTHERWISE OF UNDISCLOSED INCOME IN THE HANDS OF THE PERSON OTHER THAN THE SEARCHED PERSON. THE STARTING POINT OF THE ENQU IRY IS THE SEIZURE OF THE VALUABLE ARTICLE OR BOOKS OF ACC OUNT OR DOCUMENT WHICH ACCORDING TO THE SATISFACTION REACH ED BY THE ASSESSING OFFICER BELONGS TO A PERSON OTHER TH AN THE SEARCHED PERSON. AT THE TIME WHEN THE ASSESSING OFF ICER HAVING JURISDICTION OVER THE SEARCHED PERSON REACHE S THE SATISFACTION THAT THE DOCUMENT BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON IT IS NOT NECESSARY FOR H IM TO ALSO REACH A FIRM CONCLUSION/OPINION THAT THE DOCUM ENT SHOWS UNDISCLOSED INCOME BELONGING TO SUCH OTHER PERSON. THIS IS A MATTER FOR ENQUIRY WHICH IS TO B E CONDUCTED IN THE MANNER PRESCRIBED BY SECTION 153C. THE FACT THAT THE PROCEDURE ENVISAGED BY SECTION 153C I S SOMEWHAT CUMBERSOME AND THAT THE PERSON OTHER THAN THE ITA NOS.6569 TO 6571/DEL./2013 10 SEARCHED PERSON IS PUT TO SOME INCONVENIENCE CANNOT BE AN ARGUMENT TO HOLD THAT THE ENTIRE PROCEEDINGS ARE BAD IN LAW. THERE CAN BE SOME INCONVENIENCES IN A CASE WHE RE THE INCOME HAD ALREADY BEEN DISCLOSED BY THE OTHER PERSON WHO HAS NOT BEEN SEARCHED. HOWEVER THERE IS NO CAUSE FOR ANY APPREHENSION THAT THE INCOME-TAX AUTHORITIES WILL EXPLOIT THE SITUATION TO HARASS AS SESSEE WHERE THERE IS EVIDENCE ADDUCED BY THEM TO AND ESTA BLISH THAT THE INCOME REFLECTED BY THE VALUABLE ARTICLE O R BOOKS OF ACCOUNT OR DOCUMENT SEIZED DURING THE SEARCH HAS ALREADY BEEN DISCLOSED BY THEM. EVEN IF THEY TEND T O ACT UNREASONABLY OR UNDER MISPLACED ENTHUSIASM THERE A RE ADEQUATE SAFEGUARDS WHICH CAN BE AVAILED OF BY THOS E PERSONS. 14. NOT ONLY THIS THE REVENUE VIDE ITS CIRCULAR NO .24/2015 DATED 31.12.2015 FURTHER CLARIFIED THE POSITION AS TO MAN DATORILY RECORDING OF SATISFACTION FOR THE PURPOSE OF SECTIO N 158BD/153C AS UNDER :- CIRCULAR NO.24/2015 [F.NO.279/MISC./140/2015/ ITJ] DATED 31-12-2015 THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURP OSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HON'BLE SUPREME COURT IN THE CASE OF M/S CALCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVI L APPEAL NO. 3958 OF 2014 DATED 12-3-2014 [2014] 43 TAXMANN.COM 446 (SC) (AVAILABLE IN NJRS AT 2014-LL- 0312-51) HAS LAID DOWN THAT FOR THE PURPOSE OF SECT ION 158BD OF THE ACT RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREP ARED BY THE AO BEFORE HE TRANSMITS THE RECORD TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S 158 BD. THE HON'BLE COURT HELD THAT 'THE SATISFACTION NOTE COULD BE PREPARED AT ANY OF THE FOLLOWING STAGES: ITA NOS.6569 TO 6571/DEL./2013 11 (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDER SECTION L58BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS ARE COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERSON.' 3. SEVERAL HIGH COURTS HAVE HELD THAT THE PROVISION S OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILA R/PARI- MATERIA TO THE PROVISIONS OF SECTION 158BD OF THE A CT AND THEREFORE THE ABOVE GUIDELINES OF THE HON'BLE SC APPLY TO PROCEEDINGS U/S 153C OF THE IT ACT FOR TH E PURPOSES OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. THIS VIEW HAS BEEN ACCEPTED BY CBD T. 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS REFERRED TO IN PARA 2 ABOVE WITH REGARD TO RECORDI NG OF SATISFACTION NOTE MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIANCE. IT IS FURTHER CLARIFIED THAT EVE N IF THE AO OF THE SEARCHED PERSON AND THE 'OTHER PERSON' IS ONE AND THE SAME THEN ALSO HE IS REQUIRED TO RECORD HI S SATISFACTION AS HAS BEEN HELD BY THE COURTS. 5. IN VIEW OF THE ABOVE FILING OF APPEALS ON THE ISSUE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DE CIDED IN THE LIGHT OF THE ABOVE JUDGMENT. ACCORDINGLY THE B OARD HEREBY DIRECTS THAT PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE UNDER SECTION 158BDI 153C SHOULD BE WITHDRAWN/NOT PRESSED IF IT DOES NOT MEET THE GUIDELINES LAID DOWN BY THE APEX COURT. 15. BARE PERUSAL OF THE CIRCULAR (SUPRA) GOES TO PR OVE THAT IN THE CASES AT HAND SATISFACTION U/S 153C HAS BEEN RECOR DED DURING THE SEARCH AND SEIZURE OPERATION BY THE AO HAVING NO JU RISDICTION OVER THE ASSESSEE COMPANY WHEREAS IT WAS REQUIRED TO BE RECORDED BY ITA NOS.6569 TO 6571/DEL./2013 12 THE AO HAVING THE JURISDICTION WHICH IS MISSING IN THIS CASE AS SUCH THE ASSESSMENT U/S 143 (3) READ WITH SECTION 1 53C IS NOT SUSTAINABLE AS HAS BEEN RIGHTLY HELD BY THE LD. CIT (A). MOREOVER NO DOCUMENT BELONGING TO THE ASSESSEE COMPANY WAS F OUND FROM THE PREMISES OF M/S. JAGAT GROUP. 16. WHEN UNDISPUTEDLY SATISFACTION NOTE PERTAINING TO THE DOCUMENTS AVAILABLE AT PAGES 85 TO 87 OF A-2 FOUND AND SEIZED FROM THE RESIDENTIAL PREMISES OF SHRI SATISH KUMAR PAWA HAS NOT BEEN RECORDED THE ASSESSMENT ORDER IS NOT SUSTAINA BLE. MOREOVER THE AO HAS NOT ENQUIRED INTO THE AFORESAID DOCUMENT S BY PUTTING ENQUIRIES TO THE ASSESSEE. 17. AO ALSO PROCEEDED ON THE PREMISE THAT IT IS BEY OND COMPREHENSION TO BELIEVE THAT A SHARE HAVING FACE V ALUE OF RS.10 HAS BEEN SOLD FOR RS.3.50 PER SHARE BUT HAS NOT PRE FERRED TO BRING ON RECORD ANY MATERIAL THAT THE AFORESAID INVOICES ARE CONCERNED/ CONNECTED WITH THE ASSESSEE COMPANY. MOREOVER ITS ACCOUNTS ARE NOT IN DISPUTE BECAUSE FROM THE RETURN FILED BY TH E ASSESSEE ON 23.03.2009 QUA AY 2008-09 AND RETURN FILED BY ASSES SEE ON 04.09.2007 QUA 2007-08 TREATED U/S 153C IT IS CLE AR THAT SHARE CAPITAL AMOUNTING TO RS.77 50 000/- AND SHARE PREMI UM OF RS.6 97 50 000/- FOR AY 2007-08 SHARE CAPITAL AMOU NTING TO RS.47 90 000/- AND SHARE PREMIUM OF RS.4 30 31 800/ - FOR AY ITA NOS.6569 TO 6571/DEL./2013 13 2008-09 AND RS.97 40 000/- AND SHARE PREMIUM OF RS.8 75 97 500/- FOR AY 2009-10 TALLIED WITH DOCUME NTS-II HAVING BEEN DECLARED BY THE ASSESSEE EVEN PRIOR TO THE SEA RCH AND SEIZURE OPERATION. 18. EVEN OTHERWISE AO HAS NOT CONDUCTED INVESTIGAT ION/INQUIRY REGARDING THE TRANSACTIONS IN QUESTION ON THE BASIS OF WHICH ADDITION HAS BEEN MADE NOR THE DOCUMENTS RELIED UPO N HAVE EVER BEEN PUT TO THE ASSESSEE NOR THE SAME HAVE EVEN FIG URED IN THE SATISFACTION NOTE. 19. NOW THE NEXT QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE CIT (A) HAS ERRED IN FACTS AND L AW IN DELETING THE ADDITION OF RS.4 78 21 800/- QUA AY 20 07-08 RS.7 75 00 000/- QUA AY 2008-09 AND RS.9 73 37 500/ - QUA AY 2009-10 BY TREATING THE BOGUS SHARE APPLICA TION MONEY / SHARE PREMIUM AS UNEXPLAINED CASH CREDIT? 20. UNDISPUTEDLY THE ASSESSEE COMPANY HAS SUPPLIED CONFIRMATION LETTER FROM THE SHARE APPLICANTS; COPI ES OF BANK ACCOUNTS OF A DAY OR WEEK OF THE SHARE APPLICANTS; COPY OF ACKNOWLEDGEMENT OF ITRS AND COPY OF BALANCE SHEETS ETC. FOR SCRUTINY BY THE AO WHICH THE AO HAS DECLARED INGEN UINE ON THE BASIS OF CONJECTURES AND SURMISES INTER ALIA THAT T HESE DOCUMENTS DO NOT PROVE THE CAPACITY OF THESE PERSONS TO GIVE THE SHARE CAPITAL/ SHARE PREMIUM FOR INVESTMENT; THAT THESE COMPANIES APPEAR TO BE ITA NOS.6569 TO 6571/DEL./2013 14 NOT DOING ANY BUSINESS AND DRAWING SUCH INCOME TO J USTIFY THEIR INVESTMENT; AND THAT MOST OF THE INVESTORS SOLD THE IR SHARES TO THE PERSON CONNECTED OR CONTROLLED BY SHRI SANT LAL AGR AWAL AND SHRI SATISH KUMAR PAWA AT THE PRICE OF 1/4 TH OF THE FACE VALUE OF THE SHARE. 21. WHEN UNDISPUTEDLY AO HAS PERUSED THE RELEVANT D ETAILS PERTAINING TO THE SHARE CAPITAL / SHARE PREMIUM QUA THE YEAR UNDER ASSESSMENTS AS FURNISHED BY THE ASSESSEE COMPANY AN D HAS NOT MINCED A WORD TO QUESTION THE VALIDITY OF THOSE DOC UMENTS NOR THE AO HAS GIVEN ANY FINDINGS REGARDING THE SUMMONS ISS UED U/S 131 OF THE ACT FOR PERSONAL DEPOSITION AND FURNISHING O F DETAILS BY THE INVESTORS IN THE ASSESSEE COMPANY. EVEN NO STATEME NT OF THESE INVESTORS WAS RECORDED BY THE AO. 22. SO WHEN ALL THE SHAREHOLDERS APPEAR BEFORE THE AO AND FILED CONFIRMATIONS BANK STATEMENTS COPY OF ITRS FOR TH E AY 2007-08 TO 2011-12 COPY OF PAN NAME OF DIRECTORS COPY OF AUDITED ACCOUNTS ETC. TO ESTABLISH THE INVESTMENT MADE BY THEM IN THE ASSESSEES COMPANY THEIR IDENTITY CANNOT BE QUESTI ONED ON THE BASIS OF CONJECTURES AND SURMISES. IN THE ABSENCE OF ANY ADVERSE MATERIAL ON RECORD THAT CASH RECEIPT/DEPOSITS WERE NOTICED IN THE BANK ACCOUNTS OF THESE COMPANIES IN QUESTION THE C APACITY OF THESE INVESTORS CANNOT BE QUESTIONED. MOREOVER THE ASSE SSEE COMPANY ITA NOS.6569 TO 6571/DEL./2013 15 HAS RECEIVED THE SUBSCRIPTION OF THESE SHAREHOLDERS THROUGH BANKING TRANSACTIONS. 23. SO THE ASSESSEE COMPANY HAS DULY DISCHARGED IT S ONUS TO PROVE THE IDENTITY CREDITWORTHINESS AND GENUINENES S OF THE SHARE APPLICANTS WHO HAVE SUBSCRIBED TO THE SHARES DURING THE YEARS UNDER ASSESSMENT U/S 68 OF THE ACT THE ASSESSEE C OMPANY CANNOT BE FAULTED MERELY ON THE BASIS OF CONJECTURES AND S URMISES PARTICULARLY IN THE ABSENCE OF ANY COGENT MATERIAL. 24. MOREOVER DOCUMENTS I.E. BALANCE SHEETS AND TRI AL BALANCE SEIZED FROM THE PREMISES OF M/S. JAGAT GROUP PERTAI NS TO THE PERIOD 01.04.2010 TO 04.09.2010 HENCE NOT RELEVANT FOR TH E YEARS UNDER ASSESSMENT. TO APPLY THE PROVISIONS CONTAINED U/S 153C THE SEIZED MATERIAL IS REQUIRED TO BE OF RELEVANT ASSES SMENT YEAR. 25. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE WE FI ND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED B Y THE LD. CIT (A). CONSEQUENTLY THE APPEALS UNDER CONSIDERATION ARE H EREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS DAY 28 TH OF SEPTEMBER 2016. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 28 TH DAY OF SEPTEMBER 2016 TS ITA NOS.6569 TO 6571/DEL./2013 16 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXXII NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR ITAT NEW DELHI.