The Tax Publishers022 TaxPub(DT) 0783 (Del-Trib) ACIT v. Murli Projects (P) Ltd. In Favour of Assessee, Del-Trib, ITA Nos. 6176 & 6177/Del/2018 & C.O. Nos. 213 & 214/Del/2018, 11-Jan-2022

INCOME TAX ACT, 1961

Section 153A

Where addition made by AO under section 68 on account of unexplained cash credit, was not based on any incriminating material found as a result of search on assessee; CIT(A) was justified in deleting such addition.

Search and seizure - Assessment under section 153A - Addition on account of unexplained cash credit - Addition not based on any incriminating material found as a result of search on assessee

During course of search and seizure operation, various documents were found and seized, which alleged that a company 'K' and its group companies received bogus share capital and share premium from non-descript companies. It was alleged that 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 shareholder at very nominal rate. Statements of some persons were recorded, wherein they admitted that those companies were shell/paper companies formed and used for the purpose of giving entry to different beneficiaries for commission. AO, drawing support from such statements, concluded that the assessee was beneficiary and recipient of funds in the garb of share capital and share premium and accordingly, he treated the same as unexplained cash credit under section 68. On appeal, CIT (A) deleted the addition holding that the assessment order framed under section 153A was devoid of any incriminating evidence found. Held: List of transfer of shares that according to Revenue, was an incriminating material, was titled as “List of Transfer of Shares since 10-4-2010 till 31-3-2011”. That nomenclature itself showed that the so-called incriminating material was related to assessment year 2011-12, whereas the assessment year under consideration was 2010-11. There was no reference of any incriminating evidence found at the time of search. Since addition made by AO under section 68 on account of unexplained cash credit, was not based on any incriminating material found as a result of search on assessee; CIT(A) was justified in deleting such addition.

Followed:Pr. CIT v. Meeta Gutgutia, Prop. M/s. Ferns 'N' Petals (2017) 395 ITR 526 (Del) : 2017 TaxPub(DT) 1767 (Del-HC), CIT (Central) v. Kabul Chawla (2015) 380 ITR 573 (Del) : 2015 TaxPub(DT) 3486 (Del-HC)

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com