Before: Sh. Amit Shukla, Judicial Member Dr. B. R. R. Kumar, Accountant Member
(Through Video Conferencing)
ITA No. 929/DEL/2021: Assessment Year: 2014-15
Appellant: Nimbus Projects Ltd., 1001-1006, Narain Manzil, 23, Barakhamba Road, New Delhi -110001
Respondent: DCIT, Central Circle-2, Noida
PAN No.: AAACN0116H
Assessee by: Sh. Rajiv Khandelwal, CA
Revenue by: Ms. Deepshikha Sharma, CIT DR
Date of Hearing: 11.11.2021
Date of Pronouncement: 12.01.2022
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of the ld. CIT(A), Kanpur-4 dated 19.07.2021. Since the issues involved in all these appeals are identical, they were heard together and being adjudicated by a common order.
In ITA No. 929/Del/2021, the following grounds have been raised by the assessee:
A search & seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on 26.08.2015 at the premises of the assessee comprising IITL Nimbus Group of cases. The assessee was engaged in real estate business in and around NCR.
Consequent to the search operation, notices u/s 153A have been issued to the assessee. In response, the assessee filed its return showing income of Rs.1,13,46,070/- for A.Y. 2014-15. The assessments have been completed u/s 153A making adjustments to the income of the assessee.
The legal grounds pertain to the validity of the notice u/s 153A of the Act. The ld. A.R. of the appellant submitted that the order u/s 153A of the Act is invalid in absence of incriminating material found as a result of the search for these relevant assessment years in appeals. The appellant also placed reliance on several case laws.
However, the undersigned would like to differ with the submission of the appellant. Section 153A of the Act clearly provides the power to AO to assess/reassess the cases of person searched u/s 132(1) of the Act for immediately six preceding years. The section does not provide the existence of incriminating material as an essential requirement. The action u/s 132/132A of the Act would automatically trigger the provisions of section 153A for computation of total income of the appellant.
For the A.Y. 2014-15, the assessee company issued 8% non-convertible, non-participating compulsory redeemable preference shares to companies including Giri Financial Services Pvt. Ltd. and Pabla Leasing & Finance Pvt. Ltd. The AO held that these companies are paper entities providing accommodation entries.
The AO summarized his conclusions that the assessee failed to produce the directors/representatives of the investor companies for examination on oath and did not provide sufficient evidence to prove the identity, creditworthiness, and genuineness of the transactions. The AO made an addition of Rs.21,00,00,000/- u/s 68 of the Act.
The ld. CIT(A) upheld the addition made by the AO, noting that the creditor entities do not exist at the given addresses, are identified as paper companies, and do not have sufficient credit capacity. The AO also found that the lender companies had very low income and engaged in back-to-back transactions of equivalent amounts, raising doubts about the genuineness of the credits.
During the proceedings before us, the ld. AR submitted that the assessee provided extensive evidence to establish the identity, genuineness, and creditworthiness of the transactions, including PAN and address of the parties, bank statements, balance sheets, and confirmations from the investor companies.
Having examined the facts and evidence on record, we find that the addition made by the revenue authorities is not justified. The assessee has sufficiently proved the identity and creditworthiness of the investor companies and the genuineness of the transactions. Hence, we direct the deletion of the addition of Rs.21,00,00,000/- made by the AO.
In the result, the appeal of the assessee in ITA No. 929/Del/2021 for A.Y. 2014-15 is allowed.
Nimbus Projects Ltd., New Delhi vs. DCIT, CC-2, Noida (Assessment Year 2014-15)
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