Case Overview:
Case Number: ITA 3744/DEL/2019
Appellant: Agson Global Pvt. Ltd, Delhi
Respondent: ACIT CC-28, New Delhi
Assessment Year: 2015-16
Case Filed On: April 29, 2019
Order Type: Final Tribunal Order
Date of Order: October 31, 2019
Pronounced On: October 31, 2019
Case Summary:
This case involves cross appeals filed by Agson Global Pvt. Ltd and the Assistant Commissioner of Income Tax (ACIT), Central Circle-28, New Delhi, pertaining to multiple assessment years (AY 2012-13 to AY 2017-18). The primary issues revolve around the addition of share capital and premium received by the appellant and the alleged bogus purchases made during the relevant assessment years.
Background:
Agson Global Pvt. Ltd (the appellant) originally filed its return of income under section 139(1) of the Income Tax Act, 1961, declaring an income of INR 60,285,750 for AY 2012-13. The assessment under section 143(3) was made on March 24, 2015, assessing the income at INR 245,285,750 after making an addition of INR 185,000,000 on account of unexplained share capital and premium.
On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition on March 31, 2016. The assessment for AY 2012-13 was thus concluded.
Assessment Years Overview:
For AY 2013-14 and AY 2014-15, the assessments under section 143(3) were completed on March 31, 2016, and December 28, 2016, respectively, accepting the returned incomes. For AY 2015-16, the appellant filed its return of income on March 30, 2017, declaring an income of INR 158,775,950, pending on the date of search on March 21, 2017. Similar scenarios applied to AY 2016-17 and AY 2017-18.
Search and Seizure Operation:
A search and seizure operation was conducted on March 21, 2017. For AY 2012-13, a notice under section 153A was issued on August 6, 2018. The appellant filed a return of income on August 28, 2018, similar to the original filing. The Assessing Officer (AO) found that the company issued share capital at different premiums from various entities on different dates. The AO noted these companies had minimal operations but robust balance sheets and had paid significant premiums without rational justification.
Findings and Additions:
The AO made substantial additions based on the findings during the search:
The total assessed income for AY 2012-13 was INR 1,610,849,810 against the returned income of INR 60,285,750.
Appeal and Tribunal’s Analysis:
Agson Global Pvt. Ltd appealed against the AO’s order before the CIT(A), which resulted in several confirmations and partial reliefs:
The appellant and the revenue both appealed to the Income Tax Appellate Tribunal (ITAT). The ITAT reviewed the extensive arguments and evidence presented by both parties.
Conclusion:
The ITAT emphasized the importance of incriminating material found during the search to justify additions in concluded assessments (AY 2012-13 to AY 2014-15). For abated assessments (AY 2015-16 to AY 2017-18), the ITAT held that the AO’s reliance on the director’s retracted statement and the photocopies of documents was insufficient to substantiate the additions. The Tribunal highlighted the necessity for concrete evidence to support such significant additions.
The Tribunal ultimately directed the AO to reassess the additions, considering the lack of original incriminating documents and the appellant’s detailed submissions.
Final Judgment:
The Tribunal’s final order, pronounced on October 31, 2019, provided partial relief to Agson Global Pvt. Ltd, directing the AO to re-evaluate the additions with a focus on concrete evidence and proper substantiation. The case underscores the critical role of original, incriminating material in search and seizure cases under the Income Tax Act.
ITA 3744/DEL/2019: Agson Global Pvt. Ltd, Delhi vs. ACIT CC-28, New Delhi
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