Stercon Energy Pvt. Ltd. Vs ACIT (ITAT Delhi)
153C Assessment Quashed for Lack of Incriminating Material & Vague Satisfaction Note – Additions on Alleged Accommodation Entries Also Deleted
A search was conducted in the case of Himanshu Verma Group, an alleged entry operator. Based only on his statement that he controlled several shell companies including the Assessee, proceedings u/s 153C were initiated & commission income was added @4% on total bank credits (₹25,91,654) & further @1% on capital (₹13,29,719) alleging sale of company for cash.
Key Defence of Assessee:
- No incriminating material was seized from the Assessee.
- Bank statements used were already disclosed.
- Statement of Himanshu Verma itself says commission was earned by him personally, not the Assessee.
- Transfer of company shares is a shareholder-to-shareholder transaction, company cannot be taxed on such capital transfer.
- In earlier AYs 2012-13 to 2015-16, in 153C proceedings no addition was made in Assessee’s hands (treated as income of Himanshu Verma).
- Satisfaction note was vague, common for all years, & did not identify year-wise incriminating material, relying only on a general statement.
ITAT’s Findings:
1% Addition on Share Transfer Commission Deleted: Company cannot be taxed on commission earned by shareholders for transfer of their shares.
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