TMI Blog2019 (2) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... ry entry. Hence, we are of the view that the AO has rightly rejected the books of account and which CIT(A) also confirmed. In view of the above position, we dismiss this ground of assessee’s appeal. Addition on account of Money Market Oversold Position (MMOP) including addition on account of 11.5% central loan 2011 - Revenue is in appeal against deletion of addition in relation to money market oversold position - Held that:- Despite several reminders and even after taking up the matter with the superior officers no report was submitted by the AO. Further, it is observed that though the CIT(A) has himself verified the various evidences placed on record before him and given a detailed finding in case of each of the security he has directed the AO to re-verify the same and recomputed the oversold position. Ld Counsel stated that the AO has carried out detailed verification by taking almost a year before passing the order u/s 154 of the Act dated 02.05.2018 in respect of the order giving effect dated 28.09.2017. Vide order u/s 154 of the Act the AO has granted relief to the extent of ₹ 856.75 crores in relation to money market oversold position. No contrary fact was brought be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails were provided to the assessee so that the assessee can contradict the same. Before us also the Ld Counsel taken the said contention but the CIT-DR even though relied on the order of the AO and brought voluminous record but could not bring to our knowledge any specific record or evidence which may prove that the assessee has sold such Units 64. In the absence of any evidence, which may prove that the assessee has oversold Units 64, we cannot sustain this addition and we are bound to delete the same. No addition can be made or sustained merely on the basis of the suspicion, howsoever strong it may be. Addition on account of Money market unexplained stock - Held that:- Set aside this issue and restore it to the file of the AO with the direction that the AO shall re-verify the evidences in respect of claim of the assessee for 9% HUDCO Bonds as well as Units 64 whether they belong to the assessee or not in case if he finds these assets do not belong to the assessee, the amount included in the addition of ₹ 66,18,18,047 in respect of these assets would stand deleted out of the said addition. Addition on account of Money Market Trading Profit (i.e. Money Market Differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d just on surmises and conjectures. We, therefore, delete the addition. Thus, this ground of assessee’s appeal is allowed. Addition on account of profit on sale of shares in shortage - Held that:- AO failed to appreciate the fact that the shares were either in physical possession of the assessee or were stolen or seized or were found to be registered in the names of third parties. The presumption that the shares have been sold without any piece of direct or indirect evidence or explanation is bad in law and needs to be reconsidered and accordingly the entire addition deserves to be deleted. There had been search and seizure action against the assessee and assessee group on 28.2.1992, the evidences regarding sales outside the books must have been found if the assessee made any sales. No such evidence being found in respect of unaccounted sales being made as otherwise such evidence would have been produced or brought before us by the revenue. This is the settled law that Suspicion whatever strong it may be, it cannot take the place of actuality. We agree with the submission of the Ld A R that when the purchases have been estimated on average cost, how the sales have been estim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, we sustain the addition of ₹ 1,80,50,965/-. So far the deletion of the addition by the CIT(A) amounting to ₹ 25,48,16,855/- is concerned, we do not find illegality or infirmity in the order of the CIT(A) in deleting the said addition and this amount also in our view cannot be regarded to be the unexplained money. Addition on account of transactions with Mr. Niranjan J. Shah - Held that:- No independent evidence corroborating the statement of Niranjan shah has been brought on record. The report of JPC, in our view cannot be regarded to be the incriminating material to be used against the assessee. In view of this, we are bound to delete the said addition. Addition on account of alleged payment to June Investments Pvt. Ltd. - Held that:- The addition has been made merely on the basis of the document found from the possession of third party, no collaborative evidence is being brought on record by way of statement on behalf of June Investments P Ltd or by way of any evidence being found or seized during the course of search being carried out at the premises of the assessee showing that actually the assessee hold or purchased the shares of M/s Lan Stee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses/ investment/application of such source based on telescoping theory - Held that:- Direct the AO that in case any addition is survived in the preceding paragraphs on account of unexplained receipts or profit on trading in shares and also on account of unexplained investments or expenditures, to allow set off and telescoped of these additions and such unexplained investments or unexplained expenditures should be deemed to have been made or incurred out of such receipts or profit on trading in shares etc. The AO will compute the income after giving effect to this order after considering these directions and after confronting the assessee. Levy of interest u/s 234A, 234B and 234C - Held that:- Levy of interest is mandatory. We, therefore, dismiss ground no 31 regarding levy of interest, but direct the AO in respect of ground no.32 and 33 that the interest levied under section 234A,234B and 234C be recomputed after excluding the income which is subject to TDS. So far as the issue relating to the levy of interest u/s 234B till the date of original assessment or upto the date of the assessment subsequently made after it being set aside by the appellate authorities is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). In ITA No. 5702 6028/Mum/2017 2. First we shall deal with the appeals of Late Harshad S. Mehta through Legal Heir Smt. Jyoti H.S. Mehta for AY 1992-93 in ITA No.5702/Mum/2017 of assessee appeal and ITA No.6028/Mum/2017 of Revenue appeal. 3. Before dealing with these appeals, we want to narrate the brief background of the case. Brief history of all these appeals facts, events, chronology of dates and events circumstances are identical. Hence we need not to repeat the same in each appeal but in this one only. Hence, these para 3 to 5 are dedicated to history and background of this group of cases. The assessee, late Shri Harshad S. Mehta belonged to Harshad S. Mehta Group of Cases engaged in the business of brokerage as a member of Bombay Stock Exchange (BSE), a notified person under the special court (Trial of Offences Relating to Transactions in Securities) Act, 1992. There was a search and seizure operation u/s 132 of the Act conducted on the assessee group of cases on 28.02.1992. During the course of search, various incriminating material was found and seized including share certificates and document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleged HUF 76,60 16. Money Market Trading Profit -14,77,09,288 Total assessed income 20,14,04,65,298 4. Against the assessment framed by the AO dated 27.03.1995, the assessee filed an appeal with the CIT(A), who vide order dated 28.02.2003 confirmed the assessment. The assessee preferred an appeal before ITAT and ITAT set aside the assessment back to the file of the CIT(A) vide order dated 31.03.2006 directing the CIT(A) to admit and consider the books of account of the assessee, which was refused by the CIT(A) as additional evidence. In the second round of litigation, the CIT(A) passed the appellate order on 24.03.2010, wherein certain relief has been granted in respect of certain additions made by the AO but at the same time, the CIT(A) accepted the request of enhancements of the AO during the course of appellate proceedings and enhanced the income of the assessee at ₹ 2,346.82 crores. The assessee preferred appeal again and ITAT again set aside the matter to the file of the AO vide order dated 29.10.2014. The AO subsequently, passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 6120/Mum/2017, 5702,6028/Mum/2017, 4204, 4310/Mum/2017, 1222/Mum/2017 both parties informed. 01.02.2018 Hearing is adjourned to 12.02.2018 as part heard along with ITA Nos. 3386/Mum/2017, 6120/Mum/2017, 5702,6028/Mum/2017, 4204, 4310/Mum/2017, 1222/Mum/2017 both parties informed. 12.02.2018 Ld. Counsel for assessee and department called to the chamber and informed senior member is on leave therefore the case may be adjourned to suitable date convenient to both the parties. Counsel presents stated that the 26.02.2018 is convenient to both the parties. Case is adjourned to 26.02.2018 at 2.30 PM. Both parties informed. 26.02.2018 The Revenue has filed petition seeking time for two months vide letter dated 12-02-2018 vide DCIT-CC-4(1)/Report/2017-18 in these cases. The letter states as under: - '2. During the course of hearing before your Hon ble Bench in the cases of Harsand Mehta Group, direction was given to submit a report on the acceptance or rejection of books with specific instances within two weeks. 3. It is mandatory for every Income Tax Department building to have Aayakar Seva kendra being on the Hon ble PM initiatives, the Air India Building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders the assessee filed appeals before CIT(A) and in the first appeal, the addition on account of declaration made by late Shri Harshad S. Mehta was directed to be deleted, and in other cases the additions and disallowances were altered in orders passed by CIT(A). On further appeal, the ITAT Mumbai directed the AO to decide the matter afresh on the basis of guidelines given by the Tribunal in its order dated 31.03.2006 in ITA No. 7926/Mum/03 and 4995/M/03 in the case of Shri Ashwin S Mehta for AY 1992-93 and similarly in other cases. In pursuance of the above directions of Tribunal, the AO initiated fresh assessment proceedings, but completed the assessment at the same income more or less, as determined earlier. Subsequently the matter were taken up in appeal before the CIT(A), who by different orders directed to delete the additions and also enhanced some income on account of difference in the accounts of the Shri Ashwin S Mehta and others. 4. On further appeal, the Tribunal, vide order dated 10.11.2014 remanded the matter back to the AO for deciding the issue afresh after considering the books of accounts of the assessee. Subsequently, the assessment proceedings were taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, in the designation of Dy. Commissioner of Income Tax, Central Circle 4(1), Range-4, expired today morning at 9.30 AM and he could not present for hearing. But when a query was put to the learned Special Counsel, what is the progress in the case and he was also apprised of the situation that the AO has already asked for adjournment in the matter for two months. The Bench is sorry for the said demise of the father of the AO and for that consideration we can adjourn the mater for atleast 10 days, but he informed that he has no information about the progress of remand report or verification of proceedings in pursuance to the direction of the Tribunal. On the other hand, Shri Vijay Mehta, the learned Sr. Counsel for the assessee informed the Bench that the assessee presented before the AO on 02.02.2018 and requested copies of documents and other materials relied on by the AO during the assessments. The AO stated that he will look into the matter and AR will be informed accordingly. The learned Counsel filed copy of letter dated 08.02.2018 addressed to the AO in compliance to the direction of the Tribunal for hearing in these matters seeking co-operation in respect to relied on mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessments in a month s time. Accordingly, the matter is adjourned to 02.05.2018. 02.05.2018 Today, Revenue has filed a petition for adjournment letter vide No. DCIT-CC-4(1)/Mum/HSM Group/ 2018-19 dated 02.05.2018 stating various reasons. Revenue ask for three-month time to gather the entire seized material/ third party information. This matter came up for hearing first time as on 10.01.2018 and since then Revenue on one pretext or the another is asking for adjournment as is evident from various letters written by Revenue. In such circumstances, we are under constrained to grant the adjournment in such a liberal manner. However, the learned Senior Counsel is present before us for Revenue and we are starting hearing the cases from assessee s side. Let the assessee s Counsel finished the argument and he has today finished the arguments in the case of Ashwin S Mehta in ITA No. 3427/Mum/2017. For other appeals the matters are being adjourned to 14.05.2018. These are very old matters and fixation is done by the order of the Hon ble Vice-President as per the order of Hon ble Supreme Court to decide these matters expeditiously. In such circumstances, we are continuing the hearing but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 254 of the Act is bad in law and ought to be quashed.. 6.1. Before us, the learned Counsel for the assessee reiterated the facts that the ITAT during the second round of appellate proceedings has set aside the matter to the file of the AO vide its order dated 29.10.2014 and pursuant to this order, the AO passed the order giving effect dated 30.01.2015. The AO passed the said order as, order giving effect to ITAT s order . According to the learned Counsel for the assessee as per said order the assessed income was revised and tax demand was calculated and interest under section 234A, 234B and 234C of the Act was charged. The AO has also issued notice under section 156 of the Act determining a refund of ₹ 1,243.93 crores along with Income Tax computation form attached, which states that the assessment order was passed vide impugned order dated 15.03.2014, purportedly to give effect to the Tribunal s order dated 29.10.2014. The learned Counsel for the assessee referred to the order giving effect to ITAT s order of the AO dated 29.10.2014, and the demand notice under section 156 of the Act determining refund are enclosed at pages 381-385 of Assessee s Paper Book(APB) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.10.2014 in ITAT non 3699/Mum/210 has passed the order. In this order, the assessee raised several ground of appeal which revolves around the facts that the books of accounts have been rejected by revenue authorities. 2. Hon ble ITAT in the said order restored / set aside the issue to the file of AO directed to verify / examine each entry in the books of accounts and to decide the issue after examining the books of accounts of the assessee. 3. Revise assessed income accordingly. Compute the tax demand as per income of ₹ 6,84,08,000/- declared by the assessee as against the assessee income of ₹ 2014,04,65,298/- determined by assessment order passed under section 144 dated 27.03.1995. Charge interest under section 234A, 234B and 234C of the Act. Issue revised demand notice under section 156 and challan. 6.3. He further referred to the first order of the AO giving effect to the order in the case of Classic Share Stock Broking Services Ltd. (supra) wherein complete order was passed after allowing opportunity to the assessee and after application of mind. The learned Special Counsel argued that the order enclosed as annexure-1, which has been reproduced in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the opinion that the matter requires re-examination by the A.O. It is also noticed that in the case of Sai Mangal Investrade Ltd. relied upon by the CIT(A) in the order, the coordinate Bench vide order dated 25.11.2009 has accepted that the transactions are genuine and the loss claimed pertains to valuation of stock at cost or net realisable value and accordingly the grounds of the assessee were allowed. In view of this finding of fact in another group concern, we are of the opinion that the A.O. should examine the nature of the transaction undertaken by the assessee without getting affected/persuaded by the observations of the SEBI and JPC, unless they are applicable to the facts in assessee case. It is also brought to our notice that there was special audit co ducted of assessee s transactions and the report was not placed on record. The A.O. is directed to consider the issues afresh in the light of the facts on record and needless to say that the assessee should be given opportunity before deciding the issues. For this purposes the orders of the A.O. and CIT(A) on this issues are set aside and the assessment is restored back to the A.O. to consider it afresh after examining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well-settled that recourse can be taken to the jurisdiction under Article 226 of the Constitution. 6.7. Similarly, we noted that this Tribunal in the case of Heena N Kanakia (Supra) following the decision of Bombay High Court quashed the second order passed by the AO u/s 143(3) r.w.s 254 of the Act dated 18.02.2014 as the AO has already passed the order dated 16.09.2013 giving effect to the Tribunal s order. When we compared the facts involved in the order of the jurisdictional High Court and that of the present case, we noted that the AO passed the first order dated 27.12.2010 giving relief to the assessee as per ITAT order passed u/s 254 of the Act on the issue for which the matter was restored to the AO for fresh examination but subsequently the AO passed another order dated 27.12.2011 purporting to be the order u/s 143(3) rws 254 of the Act withdrawing the relief on the issue which has been set aside and restored to the AO by ITAT for which relief was given vide order dated 27.12.2010 mentioning in that order relief allowed by ITAT . We noted in that case also Tribunal has not set aside the assessment to be made de novo as contented by the Special Senior Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the AO and the impugned order passed by the AO to be a valid order, he also contended that the facts involved in this case are different as to the facts involved in the case of Classic Share Stock Broking Services Ltd(Supra) but we do not agree with his contention. The AO while passing the first order giving effect to the order of this Tribunal dated 20.09.2014 clearly mentioned that ITAT restored/ set aside the issue to the file of the AO to verify/examine each entry in the books of account and to decide the issue afresh after examining the books of account of the assessee and ultimately revised the assessed income accordingly, if there was a mistake in the order of the AO dated 30.01.2015, the only course of action available to the AO was to take an action u/s 154 of the Act but not to initiate the proceedings for passing a second order i.e. the impugned order. The AO having once passed an order giving effect to the order of ITAT, becomes functus officio. The AO does not have any jurisdiction to pass second order giving effect to the order of the Tribunal. We do not find any such provision under the Act and even Sh. Denial could not bring to our knowledge or attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay to both the parties decided to dispose of all the grounds taken by both the parties and vehemently contended and exhaustively argued before us in their respective appeals filed before us in the subsequent paragraphs. 8. The next issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in rejecting the books of account. For this assessee has raised the following ground No. 5:- 5. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in ignoring the specific directions of the Hon'ble ITAT and in rejecting the books of account of the Appellant. The Appellant prays that as held in the ITAT order, the books of account be accepted and the income be assessed as per the books of account. 8.1. Briefly stated facts relating to this issue are that original assessment was completed by the AO under section 144 of the Act vide order dated 28.03.1995 as the assessee could not produce the books of accounts. Against this assessment framed under section 144 of the Act, appeal was preferred before CIT(A), who also confirmed the addition and upheld the action of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Banks, Stock Exchange, various companies and custodian appointed under Special Courts Act. Evidently all this information is not part of the booksof the assessee and this is the reason that huge additions to the tune of ₹ 2300 crores has been made in the hands of the assessee on various accounts. In fact M/s Vyas and Vyas, the auditors appointed by the Hon ble Special Court also did not find such books as complete and reliable and observed that the books of accounts had so many inconsistencies and infirmities and therefore could not be relied upon. So whatever books were produced, do not reflect true and complete picture. None the less there are certain incomes like interest, dividend etc. earned by the assessee for which the books of accounts can be considered, subject to cross verification from custodian records and bank statements. In fact the AO has accepted and adopted figures of such incomes in some case of the group in respect of dividend income, interest income etc. 23. In view of the above facts and observations, I agree with the view taken by my predecessor and the AO time and again with respect to the rejection of books of accounts. Subject to the above, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... temporary records as well as seized material. He explained that bulk of the transactions were undertaken by the assessee thorough brokerage firms on behalf of the family members and corporate entities promoted by them, all of whom have been assessed by the same AO. It was explained that these entities have placed copies of contract note, bills and other materials during the course of assessment/appellate proceedings, all of which, records were available with the AO to undertake verification but the same was not carried out by the AO. The learned Counsel stated that the revenue has collected the substantial materials from third parties but could not point out: (a). not a single defect has been found in the books. (b). not a single enquiry has been made in relation to any of the entry in the books. (c). No cross checking or matching has been done with the material in the possession of the Income Tax Department. 8.4. On the other hand, the learned special Counsel Shri Daniel supported the orders of the lower authorities for rejection of books of account. 8.5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the Tribunal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in his opinion the balances do not tally with the third party balances. The assessee is directed to reconcile each and every such entry as brought to his notice. The AO is further directed to explain specifically which entries according to him appear to be improbable and allow the assessee an opportunity to explain the same. The assessee is directed to co operate with the Revenue in getting his accounts examined and furnish necessary details as and when called for. The assessee is also directed to give a complete reconciliation statement wherever differences in third party accounts are brought to his notice. 18. As we have restored the matter relating to the books of account to the file of the AO, we do not find it necessary to decide other grievances of the assessee as they are all inter related with the books of accounts. The AO is directed to decide the issue afresh after examining the books of accounts of the assessee. 8.6. From the above, we noted that the assessee could not produce the books of accounts before the AO during the original assessment proceedings and AO completed the assessment under section 144 of the Act. Again and again in various rounds of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above position, we dismiss this ground of assessee s appeal. 9. The next common issue in these cross appeals is against the order of CIT(A) in regards to confirming the action of the AO in making addition of ₹ 1080,58,89,691/- on account of Money Market Oversold Position (MMOP) including addition of ₹ 103,80,05,313/- on account of 11.5% central loan 2011. The Revenue is in appeal against deletion of addition of ₹ 418.32 crores in relation to money market oversold position. For this assessee has raised the following grounds No 6 and 7: - 6. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) I has erred in not allowing entire relief sought by the Appellant in relation to the Money Market oversold position. The Appellant prays that the AO be directed to delete the entire addition on account of Money Market oversold position. 7. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A)I has erred in arbitrarily rejecting the evidences submitted by the Appellant in relation to Money Market oversold position in case of 11.5% Central Loan 2011. The Appellant prays that the AO be directed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to hold securities as their investments for the period covered under the R/F transaction. Since under such R/F transactions, the same securities were intended to be sold back, normally the securities were not delivered in physical form. Instead an instrument was devised called Bankers Receipt (BRs) by all member Banks of Indian Banks Association (IBA). On the Ready Leg, borrowers used to issue BRs acknowledging receipt of funds from the lenders mentioning certain securities therein. On the Forward Leg, the same BRs (duly discharged) were returned by lenders to borrowers on repayment by them. IBA had framed rules regarding such BRs. The contents of a typical BR are as under: RECIVED from Name of the lender the sum of Rs. XXX/- (Rupees XXX only) being the cost of Name of the security of the face value of Rs. XXX/- at rate of each security with interest from date to date. The Name of the security face value of Rs. XXX/- are delivered herewith and Name of the security of the face value of Rs. XXX/- will be delivered when ready in exchange for this receipt duly discharged and in the mean time the same will be held on account of Name of the lender . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 220,21,93,241/- in respect of money market securities (page No 448 of the APB No. 2). According to the AO, in respect of certain securities, sale quantity during the year was in excess of the quantity available with the assessee(i.e. in excess of Opening Stock + Purchases), Hence, for such securities, the AO has computed the oversold position aggregating to ₹ 1681,79,84,180/- in Annexure M-2 (page No. 448 of the APB No. 2).However, taking into account the liabilities of M/s Harshad Mehta towards State Bank of India (SBI) and payments made for such liabilities after the year under consideration, the AO reduced an amount of ₹ 601,20,94489/- and added an amount of ₹ 1080,58,89,691/- (i.e. ₹ 1691.79 crores minus ₹ 601.21 crores) as money market oversold position to the total income of the assessee. 9.4. The AO, during the third round of assessment proceedings, vide her order dated 15.03.2016 considered the income of ₹ 1080.58 crores on account of MMOP. Subsequently, in appeal filed before the CIT(A) on the said matter, the following reliefs and directions have been given to the AO vide his order dated 28.06.2017 - a. In Para No. 24.16 on page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions deliveries were made by the assessee. The AO has arrived at the conclusion that in money market activities there was an oversold position i.e. negative stock of securities and made an addition of ₹ 1080.58 crores. The said contention of the AO that all the securities have been delivered by the assessee is contrary to the findings of various investigating agencies i.e. Janakiraman Committee, Joint Parliamentary Committee and Hon'ble Special Court. In a nut shell, if the AO's version that deliveries were made in all such transactions was to be accepted then there is no alleged scam at all. 9.6. To substantiate the above explanation, the learned Counsel firstly explained that the AO presumed that all the securities in money market position are delivered by incorrectly interpreting the statement of Shri Pankaj Shah. During re-examination and cross-examination undertaken on 14.01.2010 (statements are enclosed at page Nos 531 to 541 of DPB No 3) Shri Pankaj Shah stated that his statement of 1992 was in respect of the practice that was followed by M/s Harshad Mehta in respect of client's stock in custody of M/s Harshad S Mehta which is related to complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the CIT(A) during the third round of litigation. 9.8. Ld. Counsel invited our attention to para No. 7 of the impugned order dated 28.06.2017 wherein the CIT(A) has mentioned as follows: 7. Looking to the importance of matter and complexity of issues involved there in, both the AO and the Addl. CIT Range-4 were requested to attend the hearing vide this office letter dated 021.01.17 Therefore the hearing held on 10 January 2017 was attended by the AO. Prior to that, the AddI. CIT range 4 was also present on 03/01/2017. In the said hearing, the appellant was directed to forward copies of the paper books filed to the AO for his consideration, verification and remand report. It is gathered that the appellant filed copies of the paper books vide letter dated 11 January 2017 Subsequently, the appellant submitted copy of the letter dated 6 February 2017 to the Assessing Officer to follow up on the matter and confirm if any additional clarifications are required. Thereafter a letter dated 02/05/2017 was issued to the AD with a view to clarify the issues relating to addition of ₹ 1080 cr as money market securities oversold position and ₹ 290.05 cr as unexplained stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and argued that the transactions captured in Annexure M-1 and M-2 include decretal transactions i.e. transactions wherein the delivery was not made by the assessee to the banks/institutions after receipt of amounts from them and therefore decrees have been awarded in the favour of the Banks/Financial Institutions in that regard. The CIT(A) in the impugned order has also given his findings in respect of each and every security wherein the assessee has pointed out inconsistencies and errors made by the AO in preparing Annexure M-1 and M-2 (para No. 24.16 on page Nos. 43 to 48 of the impugned order dated 28.06.2017). 9.11. The learned Counsel further explained that the fact has also been verified by the AO at the time of passing an order giving effect dated 02.05.2018. However, even after having passed an order giving effect, AO has filed a letter dated 30.05.2018 before the Bench with regard to limited issue of MMOP specifically in relation to additions with respect to decretal transactions (amounting to ₹ 438,43,55,195/-) and inconsistencies in Annexure M-2 (amounting to ₹ 418,31,76,323/-). In the aforesaid letter the Department's findings stating that no relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Inconsistencies in Annexure M-2 on account of MMOP' on page Nos. 9 to 12 of the letter dated 30.05.2018, the assessee submitted as under: - The Assessing Officer has simply reiterated the submissions made during the second round of litigation before the Id. CIT(A) whose order dated 24.03.2010 has already been set-aside by the Hon'ble Tribunal vide its order dated 29.10.2014. The Assessing Officer has not been able to controvert the any of the specific findings of the Id. CIT(A) in the impugned order dated 28.06 2017 (para No 24.16 on page Nos. 43 to 48) which clearly prove that the MMOP would not sustain if such inconsistencies and errors are rectified. 9.13. In view of the above, it was urged that the additions amounting to ₹ 438,43,55,195/- with respect to transactions forming part of several decrees be deleted and also delete additions amounting to ₹ 418,31,76,323/- due to inconsistencies in Annexure M-1 M-2. 9.14. The learned Counsel, in view of the above, argued that instead of taking note of all the above, the AO has presumed that every transaction undertaken by Harshad Mehta, as found in his deal file seized from his computers were all comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this basis that the Assessing Officer has worked out the peak oversold position by taking all the securities together Once, this principle is accepted, there is no reason as to why the securities worth Ps. 107 crores which were sold by the assessee without stock of securities in books of account should not be considered while working out the peak oversold position (net). 103. There are certain other circumstances, which indicate that there was a practice of sale of securities without existence of physical securities. In fact this was the main thrust of the proceedings before the Special Court in which, the assessee was prosecuted and ultimately even found guilty In fact the banks, which had purchased securities from the assessee had made claim before the Special Court against the assessee on the ground that monies are payable without delivery of securities. The charge against the assessee was that in the garb of sale of securities, he had siphoned funds from various banks and used the same in the stock market. Factum of non -delivery of securities is also confirmed by the outside agencies like Report of Joint Parliamentary Committee, lank, Raman committee, findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed interchangeably by the assessee. Here it is pertinent to note that as per the Annexure M-2 titled by the revenue in page No 26 of Departments paper book (DPB) No 1, the value of closing stock has been considered as ₹ 1069.14 crores. However, the same is incorrect as it is noted that in the Annexure M-2 provided by the revenue, the opening stock of the certain securities has not been considered. In absence of any purchase and sale transactions the opening stock of the relevant security is considered as its closing stock. This is evident from the fact that in the assessment order of the subsequent year i.e. AY 1993-94 dated 29.03.1996, the value of opening stock has been considered at ₹ 1220.21 crores. 9.18. The Ld. Counsel rejected the contention of ld. CIT-DR that the oversold position being the unexplained stock cannot be set off against closing stock being the explained stock and the aforementioned order of Tribunal for AY 1990-91 is on different facts and the said case relief has been obtained on different grounds. The ld. Counsel stated that the contention of the Ld. CIT-DR is erroneous. In fact, in AY 1990-91 the AO himself granted set-off of securities held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment) is not free from errors. In view of the above, Ld Counsel argued that revenue has not controverted any of the arguments made by the assessee nor has they brought anything contrary on record before the Bench. The Department has argued that during the time of the original assessment proceedings in 1995, while the inspection was provided, the data was converted into soft copy with the mutual consent of the assessee for corrections/modifications and after making appropriate corrections/changes as suggested final figures were arrived at which formed the part of the assessment order. In regard to the same, Ld Counsel drew our attention to original assessment order dated 27.3.1995 (page Nos. 9 and 10 of APB No. 1) wherein it is clearly mentioned that the assessee was provided the data in the form of computer print outs after all the information that was collected and fed into the computer and thereafter examined and analysed. But Ld Counsel stated the fact that no consent was obtained from him and assessee has all along been asking for itemized breakup on the basis of which the additions have been made. Accordingly, it was urged that the entire addition on account of money market ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers have nowhere mentioned or indicated anything about the transactions as discussed by CIT(A) vide Para 24.15 to 24.16 to which he has directed the AO to consider in the light of aforesaid Court Orders. Thus, the basic premise of CIT(A) is misplaced and based on wrong appreciation of facts and incorrect interpretation of judgments of Hon'ble Courts while deciding the issue and giving relief to assessee. It was also pointed out by Ld CIT-DR that as mentioned above in earlier arguments, while giving the inspection of documents/papers seized during the search proceedings and information collected from various agencies/parties, the data was converted into soft form during the year 1995 with the mutual consent and this data was made available to the ARs of assessee for corrections/modifications and after making appropriate corrections/modifications as suggested, final figures were arrived which formed the part of assessment order. Now, the assessee is challenging the same data by referring the physical records selectively and randomly which contradicts his own stand. At one hand, the data in soft form was finalized with his consent only and the same data is continuing till date as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders dated 29.09.2007 of Hon'ble Special Court which was subsequently upheld by Hon'ble Supreme Court vide their order dated 03.12.2008. He further stated that in view of these orders, only the difference in sale price and purchase price should be considered for computing the Profit/Loss or Oversold Position meaning thereby that purchases should be allowed to assessee against the Oversold Securities. The CIT(A) has reproduced the findings of his predecessor on the issue before arriving at his conclusion and giving relief of ₹ 438.44 crores to assessee. 9.25. The learned CIT-DR argued that the facts discussed and conclusion drawn by CIT(A) on the aforesaid issue are misplaced and understood wrongly. Firstly, the CIT(A) has stated that the order dated 29.09.2007 of Hon'ble Special Court has been upheld by Hon'ble Supreme Court vide their order dated 03.08.2008,which is patently wrong. Hon'ble Special Court, in their order, without going in to the specific transactions, has decided that the decrees have been awarded to respective banks and have become final, therefore, the decretal amounts aggregating to ₹ 1688 crore should be reduced from the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 88 of 1998 6. MP No. 10 of 2009 Mrs. Jyoti Mehta Vs. State Bank of India Others 11.06.2009 Order dated 03.03.2003 in Suit No. 41 of 1995 Thus, on one hand, assessee himself has challenged the aforesaid decrees in the Court and on the other hand he is taking basis of the same decrees for correlation of transactions which is clearly a contradictory stand, which may be taken into consideration while deciding the issue. 9.26. He, on factual aspects stated that assessee on 01.06.2018 filed Paper Book No. 06 containing the decree order against the Suit No. 28 of 1995 and mentioned that the transactions of the decree/petition are same which have been included in Annexure M-2 for computing the Oversold Position. Replying to the claim of the assessee, attention was drawn of the Bench about the misleading statements made by assessee. It was stated that in the decree order, not a single transaction as claimed by assessee, has been mentioned and the decree has been awarded on the sole ground that money was siphoned off by assessee on account of 9 RBI cheques issued by bank. These 9 cheques were issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Trading Account and accordingly, Profit/Loss, Closing Stock and Oversold Position have been computed. In this regard, the workings of such transactions in respect of 09 securities were also provided which form part of Revenue's Paper Book No.2 (from page no. 347 to page no. 356). It was also mentioned that CIT(A), in his order dated 24.03.2010 vide page no. 91 92 has discussed this issue and gave example of transactions of a security named Treasury Bills, wherein total 35 completed transactions comprising 17 transactions of purchases and 18 transactions of sales have been identified and difference of both the transactions amounting to ₹ 181,33,83,515/- was taken to the Oversold Position. This working of AO is in confirmation with the decision of Hon'ble Supreme Court as per their order dated 08.12.2008 also wherein it was observed that on account of Oversold Securities if the delivery has been given by Harshad S. Mehta and the transaction is completed, only the difference between payable and receivable will be taken and not the gross amount. Thus, while computing the Oversold Position of securities, only the difference between sales and purchases has been taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port of the Committee which contained the transactions of ₹ 1271.20 crores (with NHB), ₹ 174.93 crore (with State Bank of Saurashtra) and ₹ 121.36 crores (with SBI Capital Markets Ltd). The copies of relevant part of report of the Janakiraman Committee have been submitted in the Revenue's Paper Book No. 3 (from page no. 542 to page no.561). It was further explained that though the CIT(A) has reproduced findings of his predecessor selectively and incomplete, but the predecessor CIT (A) vide page no. 59 to 71 of the order dated 24.03.2010 has discussed in detail the issue of delivery of securities. 9.30. He then narrated the issue of giving set off of the stock against the Oversold Position and working the peak balance for making addition as per Annexure M-2 in view of the decision of ITAT for AY 1990-91, it was argued that contrary to the position in AY 1990-91 wherein the AO had set off the unexplained investments comprising purchases against the unexplained investments comprising sales, in the year under consideration the closing stock of ₹ 1069.14 crores have been considered as explained stock since they are backed by purchases on record and being s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fixed) and Call, it was contended by assessee that in the case of ATBF, assets have not been fixed and the Call is not a security to be traded in Money Market, rather, it is a loan and therefore, AO has wrongly computed the Oversold Position under these heads. He argued that in the case of ATBF, as reflected from the Deal File, assets have been fixed subsequently to complete the transactions and Call is a financial asset as per Circular No. FMD.MSRG No. 36/02.08.003/2009-10 dated 01.07.2009 of RBI which could be traded in the Money Market. It was further mentioned that the Revenue's stand has been explained in the chart submitted in the Court vide letter dated 30.05.2018. 9.32. In regards to the claim of assessee on the basis of remarks of AO in AY 1990-91, Ld Counsel in reply stated that the securities are interchangeable in the money market transactions and it was argued that the assessee has relied on a bald statement given by AO during the assessment proceedings of AY 1990-91 regarding interchangeability of securities. Neither the AO nor the assessee could give a single instance to establish that one security has been changed with other security to complete the transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of ₹ 80,64,44,495/- made on account of oversold position in Units-1964 Scheme ought to be deleted as no relevant material is brought by the AO on record. 9.34. Without prejudice to the above, Ld Counsel also stated that the CIT(A) in a detailed chart in Para No. 24.16 on page No. 44 to 48 of the impugned order dated 28.06.2017, has incorrectly set aside the matter for re-verification by the AO. He argued that during the course of the appellate proceedings before the CIT(A) the AO was furnished with the copies of the paper books filed by the assessee and asked to clarify the issue relating to addition of ₹ 1080 crores on account of money market oversold position. However, despite several reminders and even after taking up the matter with the superior officers no report was submitted by the AO (para No. 7 on page No. 10 of the impugned order). Further, it is observed that though the CIT(A) has himself verified the various evidences placed on record before him and given a detailed finding in case of each of the security he has directed the AO to re-verify the same and recomputed the oversold position. Ld Counsel stated that the AO has carried out detailed verificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale transaction of 11.5% Central Loan 2011 on 07.03.1992 as per letter dated 01.02.1993, clearly implying the mistake committed by the AO in computing the oversold position in case of 11.5% Central Loan 2011.Accordingly, it was explained that by appropriately considering the sale transaction at Serial No. 289 of letter dated 01.02.1993 as that of 12% Central Loan 2011 the alleged oversold position of ₹ 103,80,05,313/- be deleted. 9.37. As regards to the oversold position in the security 11.5% Central Loan 2010 is computed at ₹ 537.07 crores as per Annexure M-2 (page No. 445 of APB No. 2). The assessee s liability towards ₹ 441.48 crores were reduced from the oversold position of ₹ 573.07 crores and thereby ₹ 131.59 crores (Rs. 573.07 crores - ₹ 441.48 crores) in relation to 11.5% Central Loan 2010 was added to the total income in the original assessment order (page Nos. 45 to 47 of APB No. 1). Further, during the third round of proceedings, relief of ₹ 101.88 crores was granted by the CIT(A) (page Nos. 63 75 of the impugned order dated 28.06.2017) due to the assessee s liability in Miscellaneous Petition 63 of 1992 in favour of SBI. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Counsel appearing for the Income-tax Department to justify treating the entire sale price of the securities as income, when according to assessment order delivery has actually been made and also according to the assessment order on the date of the sale of these securities. It clearly means that the notified party brought securities for making good the delivery. If that is so, what would have been taxable income would be different between the purchase price and the sale price of the securities. In my opinion, therefore, inclusion of ₹ 1080 crores approximately as income of Harshad Mehta during the statutory period has resulted in miscarriage of justice. 9.39. Subsequently, vide order dated 03.12.2008 (page Nos. 595 to 612 of the APB No. 2) the Hon ble Supreme Court upheld the aforesaid decision of the Special Court. The CIT(A) in para No. 24.24 on page No. 76 of the impugned order dated 28.06.2017 has granted relief on account of purchase cost. Accordingly, assessee urged that the AO be directed to grant deduction in relation to the purchase cost incurred by the assessee. 9.40. On the other hand, the Ld. CIT-DR argued that oversold position worked out by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing relief out of the said addition of ₹ 1080.58 cr:- A. (As per para 24.22 of CIT(A) s order dt 28.6.2017) Addition on account of money market oversold position relief due to decree transactions 438,43,55,195 B. (As per para 24.22 of CIT(A) s order dt 28.6.2017) Addition on account of money market oversold position relief due to inconsistencies in Annexure M-2 418,31,76,323 9.42. Both, assessee as well as revenue, came in appeal against finding given by CIT(A) in respect of the addition amounting to ₹ 1080,58,89,691/-. Since the AO has already allowed relief to the assessee by passing an order dated02.05.2018 for a sum of ₹ 856,75,31,518/-, the dispute in the ground taken by the assessee remains only to ₹ 223,83,58,173/- which is apparent from page 473 of APB No.2.While the Revenue has challenged the action of the CIT(A) directing the AO to re-compute the oversold position of his scripts, wherein assessee failed to explain the details properly. Coming to the ground of the Revenue, we are of the view that the ground taken by the Revenue being ground no 1 does not have any leg to stand. We noted from the order of the CIT(A) that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... range 4 was also present on 03/01/2017. In the said hearing, the appellant was directed to forward copies of the paper books filed to the AO for his consideration, verification and remand report. It is gathered that the appellant filed copies of the paper books vide letter dated 11 January 2017. Subsequently, the appellant submitted copy of the letter dated 6 February 2017 to the Assessing Officer to follow up on the matter and confirm if any additional clarifications are required. Thereafter a letter dated 02/05/2017 was issued to the AO with a view to clarify the issues relating to addition of ₹ 1080 cr as money market securities oversold position and ₹ 290.05 cr as unexplained stock of securities. However no report was submitted by the Assessing Officer, despite reminders on this issue and despite matter was taken up with superior officers. Later the books of accounts submitted by the assessee were forwarded to the AO vide this office letter dated 31/05/2017, in view of Hon ble Supreme Court order dated 12/04/2017. However, the AO has not submitted any report on the grounds of appeal and the submissions made by the Appellant. Accordingly, I proceed to decide thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief to the assessee. This proves that the AO was satisfied with the explanation of the assessee with regard to MMOP and to the extent he found explanation given by the assessee to be proper, he allowed the relief to the assessee. It is the satisfaction of the AO which matters not the satisfaction of the Ld CIT-DR. If the AO is satisfied with the explanation of the assessee and allowed the relief to the assessee while giving effect to the order of the CIT(A). In our view, the ground taken by the revenue does not have any merits. We, therefore, dismiss the ground No 1 taken by the Revenue. 9.45. Now we will take up ground No 6 7 taken by the assessee. We have already held in the preceding paragraph that the issue in the ground No 6 7 taken by the assessee remains only sustenance of the addition of ₹ 223,83,58,173/- which includes the addition of ₹ 103,80,05,313/- for which assessee has taken ground No 7 separately. After passing the order dated 02.05.2018 by the AO in consequence of the order of the CIT(A) dated 28.06.2017, the sum of ₹ 223,83,58,173/- includes the following balance oversold position: i. 11.5% C/L 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13,60,72,871/- out of the sum of ₹ 223,83,58,173/- is concerned, the Ld AR even though vehemently contended but could not convince us by reconciling the figures on the basis of the evidences filed by him. We, therefore, sustain the addition of ₹ 13,60,72,871/-. 9.48. The next sum of ₹ 29,70,53,629/- included in ₹ 223,83,58,173/-relates to the 11.5% Central Loan-2010. We heard the rival submission and carefully considered the same. We noted that the AO in Annexure M-2 page 445 of APB No. 2 computed the oversold position of 11.5% Central Loan-2010 at ₹ 573.07 crores which has been arrived at by including opening negative balance of ₹ 103,39,84,851/- in the negative value of the stock ₹ 595,61,00,000/-. The AO vide his order dated 27.03.1995 has already allowed a relief to the assessee to the extent of ₹ 441.48 crores included in the sum of ₹ 601.21 crores towards the assessee s liability from the oversold position of ₹ 573.07 crores and thereby computed the oversold said security at ₹ 131.59 crores, out of which the AO while giving effect to the order of the CIT (A) dated 28.06.2017 reduced a sum of ₹ 101. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot sustain this addition and we are bound to delete the same. No addition can be made or sustained merely on the basis of the suspicion, howsoever strong it may be. Thus, the addition of ₹ 80,64,44,495/- stands deleted. In the result, Ground No. 6 is partly allowed while Ground No. 7 is allowed. 10. The next common issue in these appeals of assessee and Revenue is as regards to the order of CIT(A) restricting the addition on account of Money market unexplained stock of ₹ 66,18,18,047/-. For this assessee raised the following ground no.8: - 8. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not granting the entire relief in relation to the addition of Money Market unexplained stock. The Appellant prays that the AO be directed to delete the addition on account Money Market unexplained stock. For these, Revenue has raised following ground No. 2: - 2. Whether on the facts and in the circumstances of the case and in law, the CIT(A), while deciding on the addition of ₹ 290,55,41,290/- on account of money market unexplained stock, was justified in directing the AO to grant deduction to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (Rs. 291,05,41,290/- less ₹ 50,00,00,000). The assessee preferred further appeal before the CIT(A), who vide impugned order dated 28.06.2017, directed the AO to re-verify the securities amounting ₹ 174,37,23,243/- included in Annexure M-5 which do not belong to the assessee in light of the order passed by the Hon ble Special Court dated 29.09.2007 and the order by the Hon ble Supreme Court dated 01.11.2002 and accordingly deleted such addition. Similarly, relief was also granted for securities amounting to ₹ 50,00, 00,000/- in light of M.P. No 88 of 1998. Accordingly, the AO vide order giving effect dated 02.05.2018 of CIT(A) s order dated 28.06.2017, verified the relevant documents and granted relief of ₹ 224.37 crores (Rs. 174.37 crores + ₹ 50 crores) to the assessee and confirmed the balance addition of ₹ 66.18 crores (Rs. 290.55 crores ₹ 224.37 crores). Aggrieved assessee came in second appeal before Tribunal. 10.3. Before us, the learned counsel for the assessee Sh. Vijay Mehta argued that the M.A. No. 215 was filed by the assessee as well as other notified entities providing a repayment plan as per page Nos. 984, 985 and 986 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the assessee is not able to rebut whether the computation of the closing stock prepared by the AO in Annexure M-2 is correct. In the absence of such details of transactions, the addition made in respect of the said securities is not sustainable. Ld Counsel also explained that the CIT(A) in para No. 25.7 of the impugned order dated 28.06.2017, has incorrectly set aside the matter for re-verification by the AO. It was stated that during the course of the appellate proceedings before the CIT(A) the AO was furnished with the copies of the paper books filed and asked to clarify the issue relating to addition of ₹ 290.05 crores on account of unexplained stock. However, despite several reminders and even after taking up the matter with the superior officers no report was submitted by the AO (para No. 7 on page No. 10 and para No. 25.7 of page No. 81 of the impugned order). Accordingly, CIT (A) has directed the AO to re-verify the same. Further, it may be noted that on 28.09.2017 the AO passed an order giving effect to CIT(A) s order dated 28.06.2017 without granting any relief stating that the same was subject to verification. However, on 02.05.2018 post undertaking detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.06.2017 directed the AO to re-verify the securities amounting to ₹ 174,37,23,243/- for which the AO gave the relief to the assessee by passing a consequential order. Out of the balance addition, the Ld Counsel vehemently contended that 9%Hudco bonds are not traceable and similarly in respect of units having a value of 68,48,40,060/-, it was contended that the units having a face value of 37crores were claimed by SBI for which attention was drawn to page 1005 to 1062 of APB No 4 which contains the Misc. petition no. 41 of 1995, Hon ble special court passed an order on 03.03.2003 holding that these units belong to SBI and accordingly it was claimed that no addition in respect of unit be made in the hand of the assessee. We perused in this regard Page 1063 to 1066 containing the order of the Special Court in Suit No. 41 of 1995 and find force in the submission of the assessee. We, therefore, set aside this issue and restore it to the file of the AO with the direction that the AO shall re-verify the evidences in respect of claim of the assessee for 9% HUDCO Bonds as well as Units 64 whether they belong to the assessee or not in case if he finds these assets do not belong to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that out of the total receipt of ₹ 39,19,77,531/-on 22.04.1991, the AO has incorrectly considered a receipt of ₹ 39,06,62,462/-in respect of the sale of CC Asset of 39 crores quantity. Based on the deal slip which forms part of the seized data, it can be observed that the abovementioned transaction amounting to ₹ 39,06,62,462/- entered on 20.04.1991 is on principal to principal basis and is also marked as RT (page No. 620 of APB No. 2). Hence, it was argued that the said transaction was not squared-up on the same day as the transaction was executed on two different dates i.e. purchase transaction was undertaken on 20.04.1991 and sale transaction was undertaken on 22.04.1991 (deal file forming part of seized data is enclosed in page No. 620 of the APB No. 2). He explained that the withdrawal of ₹ 39,00,00,000/- on 20.04.1991, in relation to the corresponding purchase transaction is reflected in the UCO Bank account statement for Account No. 001028 (page No. 629 of the APB No. 2). Similarly, the deposit of ₹ 39,19,77,531/- on 22.04.1991, in the same UCO Bank account is inclusive of the sale consideration of ₹ 39,06,62,462/- pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied. The assessee also pointed out the particular discrepancies with regard to CC Asset on the basis of incompatible references and sought to match the receipts in Annexure 'K' with the closing stock as found in Annexure M-2. As may be seen, in the case of Annexure M-2, the securities in question are backed up by delivery, whereas the AO has worked out the difference in respect of transactions where there were no deliveries as only the difference was debited or credited. Further, it was found that the figure of ₹ 38,70,34,463/- taken from Annexure M-2 is not a single transaction but the resultant figure of a series of transactions as mentioned in M-2 with reference to CC Asset. Apart from making this incompatible comparison, the assessee has not brought anything on record in support of his claim. As against this, the AO has made the addition after clearly explaining in detail the type of transaction that is covered, working out the difference and tabulating the difference in Annexure-K. Annexure-K in entirety is a detailed analysis of the difference worked out as it includes all the relevant data i.e. the date, the amount received, the payment details and the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of interest on money market securities in the original assessment order (page Nos. 48 to 49 of APB No. 1) based on stock of securities worked out by him as per Annexure M-1 and M-2 to the original assessment order dated 27.03.1995. The AO has determined the aforesaid addition of ₹ 58.27 crores on the following basis: a) As per the working tabulated in Annexure-I (page No. 631 of APB No. 2) interest of ₹ 55.97 crores is computed on the presumed stock computed basis the seized documents and information gathered from external agencies; and b) Interest amount of ₹ 2.30 crores is computed on the securities disclosed by the Appellant in M.A. No. 215 of 1993 (enclosed on page Nos. 965 to 1003 of APB No. 4). 12.2. The CIT(A) in para 27.9 on page No. 90 of the impugned order dated 28.06.2017 has granted relief amounting to ₹ 10,42,27,500/- on account of following: - a) Relief of ₹ 39,50,000/- on account ofpacket of securities not belonging to the assessee; b) Relief of ₹ 9,31,27,500/- on account of presumed holding of 9% Tax-free securities; and c) Relief of ₹ 71,50,000/- on account of 13% NPC acquired after 31.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market securities. Hence, the contention of the Department that the said decisions are applicable to dividend income only and not interest income is incorrect. In the present case the securities were not registered in the name of the assessee and hence, the presumption that the interest of the said securities was earned by the assessee is not sustainable. 12.4. Further, it was claimed that Interest on securities not received by assessee and deals have been executed through Bankers Receipts (BR) and Subsidiary General Ledgers (SGL). Ld Counsel stated that as per the bank statements for the period ended 31.03.1992, out of the total interest addition of ₹ 58.27 crores, interest aggregating to ₹ 26,41,49,667/- has not been received in any of the bank accounts by the assessee and assessee once follow cash system of accounting, such interest income admittedly not received by the assessee cannot be treated as income. Furthermore, it is also submitted that these securities are issued by large Public Sector Undertakings and Government of India. It is inconceivable to even think that interest on such securities could have been received in cash by the assessee and hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratios of the decisions in the case of assessee as well as other group entities relied upon by assessee, order sheet noting of AY 1993-94, wherein assessee himself has admitted that he was following accrual method of accounting, the decision of ITAT in the case of assessee for AY 1988-89, legal provisions as per section 145 (second proviso) wherein it was mentioned that where no method of accounting is regularly employed by the assessee, any income by way of interest on securities shall be chargeable to tax as the income of previous year in which such income is due to assessee. 12.7. We have heard rival contention and gone through facts and circumstances of the case. We have perused the material submitted and referred before us. The uncontroverted facts relating to this issue are that the AO in his assessment order dated 27.03.95 worked out the interest amount at ₹ 55,97,13,670/- on the basis of presumed stock computed from seized document and information gathered from external agencies. The AO also noted from misc application 215 of 1993 filed by the assessee before special court and claim of receivable interest of ₹ 2.30 crores on the securities claimed belonging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account, are overplayed by the authority. 5.28 The assessee is consistently following the cash system of accounting in respect of interest income. That is, he is recognizing interest income only on actual basis. This consistent position should not be overlooked on the ground that the other relatives of the assessee are recognizing interest income on mercantile basis. Therefore, in the facts and circumstances of the case, we find that the lower authorities were not justified in assuming interest income in the hands of the assessee on mercantile basis. 12.9. On this basis itself, the Ground taken by the assessee could not be fully allowed but since the assessee has not received the interest to the extent of ₹ 26,41,49,667/- in any of the bank account, the interest to that extent cannot be added in the income of the assessee. We, therefore, delete the addition of ₹ 26,41,49,667/-. Thus, this issue of assessee s appeal and that of Revenue s appeal is partly allowed. 13. The next issue in this appeal of assessee is regarding addition of Share Market Trading Profit amounting to ₹ 16,02,65,407/-. For this assessee has raised the following ground No.11: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trading profit is not sustainable in law since the relevant material relied upon by the AO for computing the additions has never been brought on record till date. In this regard, he reiterates his submissions made in respect of Grounds of Appeal Nos. 13 to 16, pertaining to the profit on sale of shares in shortage. Further, in addition to the above, he stated that shares were purchased and sold on behalf of clients or third parties, the information of which was not obtained by the AO. Further, it was argued that the assessee would have sold shares on behalf of third parties which may have been considered as sales of the assessee by the AO. In the absence of such information pertaining to third party purchases/sales and the basis for computing sale of shares, the assessee urged that share market trading profit ought not to be taxed in his hands. 13.3. Furthermore, the learned Counsel stated that all transactions pertaining to purchase and/or sale are through the normal banking channels i.e. in accordance with the Rules and Regulations and Bye laws framed by the stock exchange and further recognized by Securities Contract (Regulation) Act, 1956 and duly recorded in his books of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of Annexure S-1 which is appearing at page 687 of APB No.3 as has been referred to before us. This annexure has been compiled by the AO at the back of the assessee on the basis of the information collected from the stock exchange and various brokers. In the subsequent appellate proceedings also, the addition was sustained. Even, in the third round of appellate proceedings, the CIT(A) vide his order dated 28.06.17 confirmed the addition. We note that the CIT(A) while confirming the addition took the view that the assessee has purchased and sold the securities on his own account and not on behalf of others even though the assessee has provided a chart giving complete particulars of the date of transaction, rate, quantity, nature of transaction and the name of the client, as is apparent from para 28.2 of the order of the CIT(A). We find force in the submission made by the Ld. Counsel that the addition of ₹ 16,02,65,407/- has been made and sustained on the basis of material collected by the AO as is available in Annexure S-1, which we have looked into. We further noted that CIT(A) while confirming the addition relied on the said annexure even though the AO has observed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market speculative profit as assessed in the original assessment order at ₹ 2,85,26,994/-. The assessee preferred further appeal before CIT(A), who vide impugned order dated 28.06.2017, upheld the addition. Aggrieved assessee came in second appeal before Tribunal. 14.2. Before us, Ld. Counsel for the assessee stated that the facts in the given case of the assessee are similar to that of Ground of Appeal No. 5 in case of Shri Ashwin S Mehta for AY 1992-93 (Assessee s appeal No. 3427/Mum/2017). He placed reliance on the submissions made therein. Further, in this case also he stated that the AO till date has not provided the details and basis of preparation of Annexure S-2 wherein the speculative profit has been assessed. The assessee has not been granted any inspection of the material on which basis the speculative profit has been computed nor copy of the same have been provided. He also reiterated his submissions made in relation to the Ground of Appeal Nos. 13 to 16 in the case of the assessee. Further, the Department has not been able to rebut the submissions made before the Bench by the assessee. In view of the above, it was urged that the order of CIT(A) for sustaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as ARs of appellant explaining the Deal File and its working and to substantiate it, a write up was also submitted on that date. All these facts were mentioned to the Hon'ble Bench on the basis of findings given by predecessor Ld. CIT(A) vide his order dated 24.03.2010 from page 4 (para 3.0) to page 17 (para 3.4.3). On the basis of same appellate order and the order sheet notings (as enclosed vide page -378 to 527 of Revenue's Paper-Book-2), it was further brought in the knowledge of Hon'ble Bench that earlier also during the period 18.05.93 to 13.08.93, inspection of seized material was provided to appellant and after that, at the directions of Hon'ble Special Court, one more time during the year 1995, the inspection of seized material as well as information and material gathered from outside agencies such as BSE, RBI, CBI, ED, various companies, brokers, banks etc. with whom transactions were made by appellant, were provided to appellant. It was further apprised that during this period, all the data available in seized material, information received from various agencies/parties was converted into soft form in computers with the consent of appellant and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as discussed in details about the method of processing the data, bunching them in independent categories of transactions and running through software to arrive at the desired results. The demonstration of the process as per this letter was done before Hon'ble Bench also as it was earlier given before the Ld. 01(A) as well as appellant as on 31.07.2009. 1.2 As mentioned above, the information contained in documents seized during the search proceedings and as collected from BSE, RBI and other third parties was converted into soft form with the consent of appellant during the inspection in the year 1995 and stored in magnetic tapes named Tape 'A' and Tape 'B' and subsequently transferred to Compact Disk (CD). This process was brought on record during the second round of appellate proceedings vide letterdated 31.07,2009, as above. However, as desired by Hon'ble Bench, a certificate in this regard that the data stored in Tape Cartridges and uploaded on the computer system during the year 1995 has been transferred to CD in original form , is being submitted separately as per Annexure-A. However, on the query raised in regards to data received from BSE and RBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. DELY_RATE 1517000 9. S_SHORT_TM BOAM 10. S_DATE 20.08.1990 11. S_C_NO 5 12. S_RATE 15.17000 13. S_TRANS RV 14. S_STAT 15. ACT_BR_SGL A 16. BR_SGL_NO. 17. S_BROK 0.00 18. S_PO_AMT 0.00 19. S_PAYM_DT 20. S_ PO_NO 21. S_RF_DATE 22. S_RF_PERCE 0.000 23. S_RF_RAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1992 to 31.03.1992) were created. The structure of journal flies is shown in the following table by taking example of one transaction of security namely 11.50% C/L 2008. TABLE NO. 2 STRUCTURE OF DMONV1JR.DBF S.No First row First entry 1. Vchdat 920307 2. Quantity 250000000.00 3. Debit_amt 255127006.56 4. Credit_amt 5. Sec_short 11.50% C/L 2008 6. Sec_code CO8115 It was further demonstrated that after processing the data as per abovecharts, trading accounts were prepared in respect of each security and Profit/Loss, Closing Stock or Oversold Position was arrived. The following chart shows that how it was worked out. TABLE NO. 3 FORMULA FOR ARRIVING AT OVERSOLD POSITION Opening stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHARES. SHR1.DBF has been prepared by merging SHR (information obtained from various parties), H300-STX [clearing house auction/HSM (broker replies and transactions extracted from seized voucher files)], ASM3001 [Ashwin (broker replies and transactions extracted from seized voucher files)], JHM3001Jyoti (broker replies and transactions extracted from seized voucher files)] and CONTR data files [contracts between the group concerns]. Stock Exchange Transactions data as obtained from Bombay Stock Exchange through various files is stored in the file named STOCK.DBF in CD. TABLE NO. 4:- STRUCTURE OF FIN 1.DBF S.NO HEADER FIRST ENTRY 1. SECNAME A.C.C. 2. CODE 410 3. OPST 65300 4. OPVAL 141701000.00 5. PURCH 208120 6. PURVAL 616290210.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.72 Profit 6323691.97 TABLE No. 7:- TRADIG ACCOUNT of Castrol India Dr. Cr. Opening stock 12392725.00 Sales 52896325.00 Purchases 10388600.00 Closign stock 643687.69 Total 22781325.00 Total 53540012.69 Profit 30758687.69 2.7 It was further apprised to the Hon'ble Bench why the transactions marked as 'I' (True) and 'RT' (Routed Through) only have been taken into consideration while working out the Profit/Loss, Closing Stock and Oversold Position of securities as per Annexure M-2 of the assessment order. It was explained that the entry status 'T' or 'F' reflect if the data of Deal File is run through the software ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive profit has been made by the AO on the basis of Annexure S-2 compiled by him on the basis of the material and information collected from various person at the back of the assessee which we perused. From the said statement, we noted that not only the name of the script but the name of the party are also given. This annexure is available at pg 696-702 of APB No. 3. It is not denied that the assessee was engaged in the business of dealing in shares on behalf of his clients. From this statement, it is not clear which transaction belonged to the assessee or to the client of the assessee. In our view when the Revenue is adding an income and treating it to be the income earned by the assessee specially when the search has taken place at the premises of the assessee and all his books of account and documents were seized, the onus lies on the revenue to prove that the assessee has actually earned this income on his account. It is an undisputed fact that the assessee is a registered member of Bombay Stock Exchange and used to carry transaction in the Stock Exchange not only on his behalf but also on behalf of his clients. Therefore under this fact until and unless specific evidence is br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prays that the AO be directed to recompute the profit on sale of shares in shortage after granting appropriate credit. 15. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not granting credit for additional benami shares disclosed in Miscellaneous Petition No.99 of 1998 before the Hon'ble Special Court. The Appellant prays that the AO be directed to recompute the profit on sale of shares in shortage after granting appropriate credit. 16. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the AO in adopting the closing rate as on 31.03.1992 for the purpose of computing the profit on sale of shortage of shares. The Appellant prays that the AO be directed to recompute the profit on sale of shares in shortage by adopting the monthly average rate or the average rate as on 27.2.1992. The Revenue has also raised the following grounds on this issue:- 4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in giving partial relief to the assessee by directing the AO to re-compute the shortage of shares by giving cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 113 and 115 of the impugned order dated 28.06.2017 in the appeal file). The methodology of computing profit on sale of shares in shortage adopted by AO is as under: - The AO has computed the closing stock of shares of various companies acquired by the assessee on the basis of opening stock, purchases and sale of shares in Annexure S-1 (page Nos. 687 to 695 of APB No. 2). In doing so, he has taken closing stock of shares of last Assessment Year (i.e. AY 1991-92) as opening stock for AY 1992-93. Thereafter, he has gathered the details of purchases and sale of shares affected by the assessee from various sources during the period 01.04.1991 to 31.03.1992 and for the period 01.04.1992 to 08.06.1992. These sources are B.S.E. brokers, clients, financial institutions, companies, banks, receipt and payment details from RBI, information received from other entities from the group of the assessee etc. Based on the purchase and sale data gathered for the period 01.04.1991 to 31.03.1992, the AO computed stock position of the assessee as on 31.03.1992. Subsequently, in Annexure S-3, the AO computed stock as on 08.06.1992 [i.e. the date of notification under the Special Court (Trial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (10,86,200) Add: Trading profit / (Loss) 4,85,241 Closing stock as on 31.03.1992 (Balancing figure - Quantity) 1,33,586 1,27,42,805 Annexure S-3 Stock as on 31.03.1992 (As per Annexure S-1) [31M] A 1,33,586 1,53,601 Add/ Less: Adjustments (i.e. Purchase and sales for the period 01.04.1992 to 08.06.1992) [ADJ] B - 24,050 Position of stock as on 08.06.1992 [POS] C=A-B 1,33,586 1,77,651 Less: Registered shares [REG] D - - Less: Benami shares [BE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being repeatedly asked for by the assessee during various rounds of assessment and appellate proceedings. These documents form basis of various annexure (i.e. Annexure S-1 and S-3) to the assessment order passed by the AO and the additions made by him. In the original assessment order (page Nos. 10 and 50 of APB No. 1), the AO himself has stated that the assessee has requested for inspection of original documents. Subsequently, during the later round of litigations as well, detailed submissions were made from time to time by the assessee in relation to the above. The list of several letters filed since 1994 till date to the Income-tax Department for furnishing and granting inspection and copies of documents collected by the AO and cross examination of the parties from whom the relevant documents were obtained are as under: - Sr. No. Letter date Letter addressed to Particulars 1. 10.12.1994 ACIT C.C. 23 Request made to furnish copies of the accounts and transaction statements furnished by the brokers, individuals or organizations. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. 16.10.1995 ACIT C.C. 23 Grievance made that inspection as decided vide letter dated October 9, 1995 and October 7, 1995 not given. 12. 22.01.1996 ACIT C.C. 23 Grievance made that inspection not given. 13. 01.02.1996 CIT(A) - Central V Grievance made before the Assessing Officer that no opportunity has been provided for cross examination Request made by the Appellant for granting opportunity to inspect documents / data relied upon by the Assessing Officer, to cross-examine each and every party and sources and to furnish copies of the material relied upon by the Assessing Officer. 14. 19.08.2009 CIT(A) - Central V Grievance made before the Assessing Officer that no opportunity has been provided for cross examination of authors of M/s. Vyas and Vyas's report even though requested. 15. 22.08.2009 CIT(A) - Central V G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided during the second round of litigation before CIT(A) in relation to addition on account of MMOP. On the basis of these details, the assessee has been able to substantiate his claims and point out the mistakes/errors made by the AO. However, in absence of such details/itemized break-up in case of addition on account of share market activities, the assessee has not been able to provide his rebuttals. 15.6. Without prejudice to the above, he argued that the basis for computation of profit on sale of shares in shortage is incorrect. This is demonstrated by the discrepancies that exists in the quantity of registered shares mentioned in Annexure S-3 vis- -vis those mentioned in the Custodian s letter dated 29.10.1993 (chart showing the discrepancies is enclosed on page No. 894 of APB No. 3). He submits that considering the quantum of additions made and in compliance with the principles of natural justice, the assessee ought to have been granted a full and proper opportunity to rebut such large additions. The assessee placed reliance on the co-ordinate Bench s decision in the case of Smt. Jyoti H Mehta ITA No.3211/mum/2012 and the decision of Hitesh S. Mehta (in ITA No. 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m third parties, the copies thereof need to be provided to the assessee. If requested for, the assessee must be given an opportunity to cross-examine the concerned parties. (iii) Additions should not be repeated on the basis of the presumptions and inferences. Additions must be made only on the basis of materials and evidences available on record. (iv) Books of account should not be rejected on flimsy grounds and should be acted upon. (v) The AO has to accept the request of the assessee for obtaining materials from the Custodian, Banks and Companies etc. For that matter, wherever necessary, the AO may issue summons u/s. 131 and the inquiries must be made effective and fruitful. This ground of the assessee is allowed for statistical purpose. 15.7. Ld Counsel referred to the hearing of 01.02.2018, wherein bench directed to the AO to provide details, break-up and the evidence along with the basis of preparation of various Annexure including Annexure S-1 and S-3 to the assessment order. Ld Counsel narrated that subsequently, the assessee vide her letter dated 02.02.2018 listed the directions of the Bench to provide details, break-up and evidence along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts and do not have any relevance with any entry in Annexure S1 and S-3. This does not explain the manner of working out purchase / sale of shares. 17 On this page it is mentioned that inspection of data received from the RBI is provided. This information is in respect of the receipts and payments and do not have any relevance with any entry in Annexure S1 and S-3. This does not explain the manner of working out purchase / sale of shares. It is also relevant to note that against several entries notings have been made to the effect that data are not available (Name of the entity is unclear in the chart prepared). 18 19 These pages are pertaining to inspection of share transaction with broker / parties vis- -vis figures appearing in the computer of Assessing Officer. This information does not have any relevance with any entry of Annexure S-1 and S-3 and also do not explain the manner of working out purchase / sale of shares. 20 This page is pertaining to inspection of share transaction with broker / parties vis- -vis figures appearing in the computer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not also pertain to ASM and JHM). 48 49 These pages do not pertain to the assessee. 50 52 These pages are pertaining to inspection of share transaction with broker / parties vis- -vis figures appearing in the computer of Assessing Officer. This information does not have any relevance with any entry in Annexure S-1 and S-3 and also do not explain the manner of working out purchase / sale of shares. No corrections have been carried out in Annexure S-1 and S-3 till today. Further, the assessee also summarized its observations in respect of the various enclosures as per the Remand Report dated 12.03.2018 as under: Sr. No. Enclosure as per the Covering letter Appellant s observation a) Copies of order sheets (1 to 121 pages) Several pages are not readable. Also certain pages are missing. b) Remand Report Enclosure is missing c) Letter of assessee's na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n producing the records on basis of which the additions are made and provide its itemized break-up. However, the assessee has time and again been asked to substantiate its claims/contentions on the basis of the evidences and supporting documents. The assessee has always been expected to have all the records of past 25 years even post the drastic consequences suffered by him and he mentioned the following consequences: - a) The assessee is a notified person on and from 08.06.1992 because of which all his assets are under attachment. The assessee has not had any business nor he had any normalcy. b) All the staff members who were carrying on the business of the assessee and having firsthand knowledge have been dismissed from service by the Hon ble Special Court. c) The Hon ble Supreme Court directed the assessee and his family to vacate all their offices at 48 hours notice without giving any space to the assessee to house and store the records. Due to this the assessee was left with no choice but to abandon some of the records or put them in gunny bags losing complete control over them. 15.10. At this stage, Ld Counsel stated that it would be imperative to examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order. Thereafter, on the requests made by the AO, the matter was adjourned from time to time to enable the Income-tax Department to correlate various details. The matter was adjourned over various days i.e. 24.01.2018, 01.02.2018, 12.02.2018, 26.02.2018, 15.03.2018, 22.03.2018, 27.03.2018, 02.05.2018 and 14.05.2018. On 26.02.2018, the Hon ble Bench observed that the Income-tax Department is not serious in early disposal of these appeals. Whilst, on the said date the Hon ble Bench adjourned the matter to 15.03.2018 and stated it to be strictly the last adjournment but it granted further time to the Income-tax Department. Subsequently, the AO located certain details in relation to TISCO (refer to Department s letter dated 21.03.2018). Though, the AO was asked to file the said details before the Bench, but no such details have been filed till date. 15.12. Further, the AO instead of bringing the evidences on record has vide his letter dated 20.04.2018, asked the assessee to provide details. This shows the Department s approach towards the said appeals. Subsequently, on 22.05.2018, the Income-tax Department requested the Bench to grant permission for use of projector to furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only after passing the original assessment order dated 27.03.1995 and since then no revised Annexure rectifying the mistakes pointed have been provided. Further, in the aforementioned order sheet (on page Nos. 397 and 420), the Department has stated that the mistakes will be rectified. In none of the order sheets, it is mentioned that the mistakes have been rectified. Further, during the hearing on 24.05.2018, the Department also brought 9 -10 gunny bags and claimed that the files contained therein had the original data which was converted into soft copies and after processing the annexure were prepared. However, did the Department demonstrate any such working for any of the script and the so called original data brought by them. No other relevant details have been furnished by the Department before the Bench during the course of the appellate proceedings. 15.14. In terms of the above facts, it was argued that what will be the consequence of not giving details/evidences on record? The ld. Counsel placed reliance on the Order dated 17.11.2017 of Tribunal in the case of M/s. Growmore Leasing Investment Ltd. vs. DCIT in ITA no. 1219/Mum/2017 vide its order dated 27.12.2017, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the difference was treated as unexplained purchase. The purchases were determined at ₹ 8,85,75,861/- and the sales were determined at ₹ 15,55,67,482/-. The profit on sale of shares was determined at ₹ 3,31,20,180/-. The A.O. added this amount. Before the ld. CIT(A), it was contended that the information relied upon by the A.O. were either given to the assessee during the proceedings of A.Y. 1992-93 or during the proceedings for A.Y. 1993-94. It was further contended that the A.O. has computed the holding of shares from the information collected from different sources. It was further submitted that the working of opening stock is borrowed from the working given in A.Y. 1992-93 without any break-up and without any basis. After considering the facts and the submissions, the ld. CIT(A) at para 9.7 of his order observed that the A.O. did not give any breakup and the basis as to how the figures of sales and purchases were derived by him which fact was also admitted by the A.O. in the remand proceedings. At para 9.8, the ld. CIT(A) held I find that during the course of present proceedings also, the things have not improved. The A.O. has still not been able to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the decision of Tribunal K Bench, Mumbai in the case of assessee (ITA No. 5518/Mum/2007for A.Y. 1988-89) wherein the following was held (page No. 872 of APB No. 3):- 5.15 Even though the Revenue has vehemently stated that copies of seized materials were made available to the assessee, no evidence is available on record. In these circumstances, we see no error in setting aside the issue to the file of the Assessing Officer to give similar directions as already given in paragraphs above in respect of ground number 6 and 7. We are of the view that no prejudice would be caused to the Revenue if copies of the seized materials are provided to the assessee even though it might have been provided in the past. Therefore, we direct the Assessing Officer to furnish the copies of the details used by him in making an addition of ₹ 7,67,131/-. 15.18. Even on merits, the learned Counsel for the assessee stated that addition is not sustainable due to various infirmities in the working adopted by the AO for computing profit on sale of shares in shortage. He, stated that in order to compute shortage of shares multiple assumptions were made by the AO as under: - a) All tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of clients. e) Vide two letters dated 29.02.2016 (page Nos. 418 to 419 and 421 of APB No. 1), the assessee furnished contract notes and copies of the accounts etc along with the copies of the vallan / settlement records of B.S.E. to the Assessing Officer. 15.21. In view of the above, he stated that CIT (A) order dated 24.03.2010 (second round of litigation), observed that details of transactions with outside clients that was placed before him by the assessee during the course of the proceedings could not be correlated with the working of the AO. Further, the CIT (A) vide his order dated 28.06.2017 (third round of litigation - page No. 118 of the impugned order), by placing reliance on his predecessor s order dated 29.02.2012 has not granted any relief. In this context, it was submitted that in absence of detailed working/itemized break-up of the amounts mentioned in Annexure S-1/S-3, the assessee could not correlate his submissions with the working of the AO. Hence, relief on account of purchases made on behalf of related parties and /or outside clients has not been granted till date. It was also explained that the transactions were undertaken for the family member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has passed orders which are binding upon the revenue. That whatever justification that existed in the original assessment proceedings for making presumptions, the same are not liable to be made today by taking into account the aforesaid subsequent developments, emergence of facts, and the binding orders passed by Hon ble Special Court. 15.23. Another presumption that all the shares in shortage have been sold by the assessee is without any basis. Ld Counsel in relation to the aforesaid assumption, refers to the following decisions of this Bench with facts similar to the case of the assessee: - (i) Topaz Holding Private Limited vs. DCIT [ITA No. 2828/Mum/2001] (page Nos. 954 to 964 of APB No. 3) (ii) Pallavi Holdings Pvt. Ltd. vs DCIT [ITA No. 1912/Mum/2000] (page Nos. 942 to 953 of APB No. 3) 15.24. In the above cases, it is observed that the AO found purchase entries of certain shares in the books of the assessee, but did not find physical share certificates of the same. Accordingly, the AO alleged that the said shares were sold by the assessee. In view of the searches and inspections made in the business premises of the assessee, the assessee expressed its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee also presumed that the said shares have been sold. However, the AO failed to appreciate the fact that the shares were either in physical possession of the assessee or were stolen or seized or were found to be registered in the names of third parties. The presumption that the shares have been sold without any piece of direct or indirect evidence or explanation is bad in law and needs to be reconsidered and accordingly the entire addition deserves to be deleted. 15.26. The next aspect on issue is that all shares are sold in AY 1992-93 although shortage in shares is computed as on 08.6.1992. Ld Counsel stated that though the shortage in shares was computed as on 08.06.1992, the AO assumed that the shares were sold during the AY 1992-93 and accordingly, the addition was made in AY 1992-93.The AO himself has observed on page No. 4 of original assessment order dated 27.03.1995 that assessee has continued the business post 28.02.1992 (page No. 4 of APB No. 1).Further, CIT (A) in third round litigation has also observed, by placing reliance on the order dated 28.02.2017 in case of Shri Ashwin S Mehta for AY 1992-93,in para 30.2 on page No. 62 of his order (impugned order) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department has contended that following the normal accounting principles, the closing rate as on 31.03.1992 has been considered to compute the sale value. In relation to the same, he argued that under the accounting principles the method of determining value of the closing stock is mentioned. No accounting principles state that the presumed sales are to be valued at the closing rate as on the last date of the financial year. Even referring to the decision of Hon ble Supreme Court in the case of Chainrup Sampatram vs. CIT [1953] 24 ITR 481 (SC), it was contended that the assessee is entitled to value the closing stock either at cost or market value whichever is lower. Valuation of stock cannot be a source of profit. 15.29. Another aspect of this issue is that all shares are sold in cash as the AO has assumed that all the shares are sold in cash. Ld Counsel stated that the assumption that the shares are sold in Cash is incorrect. The AO has assumed that shares worth ₹ 1416 crores (total in case of Shri Ashwin S Mehta, Shri Harshad S Mehta and Smt. Jyoti H Mehta for AY 1992-93) were sold in Cash that too on a single day i.e. 31.03.1992. This assumption has been made, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered subsequent to the order of the AO dated 27.03.1995. The assessee only requested for credit with respect to such additional benami shares and shortage of shares needs to be recomputed accordingly. 15.31. He further stated that CIT(A) (during the second round of litigation) had granted credit for such additional benami shares in the case of Shri. Ashwin Mehta and Smt. Jyoti Mehta for AY 1992-93. The assessee furnished relevant extract of the order of the CIT(A) in the case of Shri Ashwin S Mehta (page No. 922 to 927 of APB No. 2) along with the order giving effect (page No. 928 to 930 of APB No. 2) and relevant extract of the order of the CIT(A) in the case of Smt. Jyoti Mehta (page No. 931 to 934 of APB No. 3) along with the order giving effect (page No. 935 to 937 of APB No. 3). Therefore, it was urged that the additional benami shares belongs to the assessee and his family members and accordingly credit is required to be given. In this regard, the assessee submitted a chart with respect to additional benami shares for which credit ought to be given to the assessee on the same footing as in the case of Shri. Ashwin S Mehta and Smt. Jyoti H Mehta for AY 1992-93 (page No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Mehta 2. Ashwin Mehta 3. Jyoti Mehta 4. Hitesh Mehta 5. Sudhir Mehta 6. Deepika Mehta 7. Rasila Mebta 8. Rina Mehta 9. Pratima Mehta 10 Zest Holdings Pvt. Ltd. 11 Treasure Holdings Pvt. Ltd. 12 Velvet Holdings 13 Topaz Holdings 14 Pallavi Holdings 15 Harsh Estates Pvt. Ltd. 16 Growmore Leasing 17 Growmore Asset Management 18 Growmore Exports 19 Fortune Holdings 20 Eminent Holdings 21 Divine Holdings 22 Cascade Holdings 23 Aatur Holdings 24 Orion Travels Pvt. Ltd. In the light of aforesaid facts, it was argued by Ld CIT-DR that unless the shares found subsequently are correlated with the specific entity/entities by matching the name of the share, date of transaction, distinctive number of share, details of payment, etc., it cannot be held that the said shares belong to assessee only. To establish the ownership of these shares, the assessee is required to match the entries/transactions of each share as it has been done in the case of money market transactions. Contrary to this, only a presumption has been drawn by assessee that all the shares found subsequently belong to the assessee and pertain to the year und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roker to earn brokerage. The assessee has used his own funds in the trading activity. The funds of the clients are very small as compared to his own funds. Moreover, in the absence of saudha book it cannot be said as to which transaction is for his own trading and which is for the clients. c) In working out the shortage all sales details through his bank accounts as available in this office and as provided by the assessee has been considered up to 8.6.92. Moreover, the assessee was requested to give complete details in respect of sales /lending of vast quantity of shares. But no details were furnished by the assessee. d) No specific details have been furnished by the assessee as to how many shares have not been delivered by which broker. No claim has been filed by the assessee against any broker in this regard. e) The contention of the assessee that a vast quantity of shares are stock misplaced etc. Is only an excuse for the following reasons:- i. Till date no FIR has been filed by the assessee nor any such information has been given by the assessee to the custodian in which all the properties of the assessee vests. ii. Value of the shares in shortage is wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit on squaring up of shortage as by 31.3.92 in the share of Apollo Tyres in HSM, ASM and JHM was ₹ 902395633/-,446700880/-,1091693405/- respectively. Similarly the profit has been worked out in other scrips. The total profit in the case of the assessee, thus works out at ₹ 2531678501/- It is added to the total income of the assessee. 15.34. We noted that CIT(A) in the first round of appeal upheld the said addition. When the matter travelled to the tribunal, the tribunal vide its order dated 11th July, 2008 restored the matter to the file of the CIT(A) by holding as under:- 14. We have considered the rival submissions. In our view the facts and circumstances explained above clearly warrant that the matter should be decided by the CIT(A) afresh. In this regard, we have already noticed that late Harshad Mehta expired during the pendency of the proceedings before the CIT(A). There was also considerable delay, for about six years in disposal of the appeal before the CIT(A). There was no representation on behalf of the assessee before the CIT(A). Several developments had taken place in the case of the assessee in the interregnum period which all will have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the original order passed u/s 144 by the assessing officer and referred to before us during the course of hearing that the AO has computed the closing stock of shares of various companies acquired by the assessee on the basis of opening stock, purchases and sale of shares compiled by him on basis of information received from various sources as submitted by ld DR. In doing so, he has taken closing stock of shares of last Assessment Year (i.e. AY 1991-92) as opening stock for AY 1992-93. Thereafter, he has gathered the details of purchases and sale of shares affected by the assessee from various sources such as B.S.E. brokers, clients, financial institutions, companies, banks, receipt and payment details from RBI, information received from other entities from the group of the assessee etc. during the period 01.04.1991 to 31.03.1992 and for the period 01.04.1992 to 08.06.1992 without providing the copies of these information to the assessee for his rebuttal and without affording cross examination of the parties from where these information has been received even though the assessee made several request for the same before the revenue authorities. We have specifically directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed The assessee has insisted on inspection of the original copies of the data/information gathered . We also noted that the assessee has furnished several letters since 10.12.1994 till 22.3.2016 before Assessing officer, CIT(A) and DCIT asking for the inspection and copies of the material as well as cross examination of the parties, the details of which were filed before us as listed hereinabove but not denied by the Ld DR. We do agree that onus is on the revenue to adduce main and supporting evidence on the basis of which the huge additions are made. Until these evidences and details are not provided, the assessee cannot rebut the same. Even a number of discrepancies were demonstrated in the quantity of registered shares mentioned in the Annexure S-3 to the AO when compared with the custodian s letter dt. 29.10.1993. Even a chart showing such discrepancies which we pursued was filed before us, the copy of which was given to revenue which was not contradicted by the ld DR. Under these facts and circumstances, we are of the firm view that natural justice demands that the assessee must be provided with the copies of all the relevant material, information and evidence collecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us. The assessee ultimately summarized its observations in respect of various enclosures of the remand report dt.2.3.2018:- Sr. No. Enclosure as per the Covering letter Appellant s observation a) Copies of order sheets (1 to 121 pages) Several pages are not readable. Also certain pages are missing. b) Remand Report Enclosure is missing c) Letter of assessee's name (1 to 3 pages) Page no. 1 is assessee's letter asking for inspection. Page no. 2 to 5 is the photocopy of the order of the Hon'ble Special Court dated 24.08.1993 in Miscellaneous Application 41 of 1993 in relation to release of money towards advance tax is provided (photocopies are not readable). d) Dot matrix paper table (25 to 29 pages) These pages are not readable e) Mahzernama Page no. 1 specifies the name of the persons w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as utilized to prepare annexure S-1 and S-3 in MS Excel and claimed to have been collected from its original source but did not file copies of evidences supporting these files. In the absence of onus being discharged by the revenue even though we have given sufficient opportunity to the revenue to adduce the relevant material on the basis of the figures of purchases and sales of the shares have been computed and we noted earlier also this issue has been restored by the tribunal three times to the authorities below but instead of bringing any clinching evidence on record, additions are being made as were made in the original assessment passed u/s 144 of the Income Tax act. The original assessment was made in the case of the assessee on 27.3.1995 and the matter is being hanging since then i.e. more than 25 years have passed but the revenue could not discharge its onus. The shortage so computed in our view is just based on estimate and surmises. The onus is on the revenue to prove that the assessee has earned the income. Even we noted that the assessing officer by working out the shortage on 8.6.92, assumed as if the assessee has sold all the shares as on 31.3.1992 i.e. in a single da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on the floor of the exchange were obtained from BSE. The AO has taxed the net profit of ₹ 19,71,050/- arising out of badla transactions. Subsequent to Tribunal s order dated 29.10.2014 (second round of litigation), AO vide her order dated 15.03.2016 considered badla income of ₹ 19,71,050/-. Further, the CIT(A) vide the impugned order upheld the addition. Aggrieved, assessee came in second appeal before Tribunal. 16.2. Before us, Ld Counsel for the assessee stated that the AO has not provided any break-up or basis or information for preparation of Annexure S-5 in which addition on account of share market badla income was made. Accordingly, the assessee reiterated her submissions made before the Bench in relation to Ground of Appeal Nos. 13 to 16 pertaining to Profit on sale of shares in shortage. Therefore, it was prayed for decision of the impugned addition of ₹ 19,71,050/-on account of share market badla income. 16.3. On the other hand, Ld. CIT-DR argued that the addition pertains to Share Market badla income of ₹ 19,71,050/- confirmed by CIT(A) and he has discussed the issue in detail in Para 31.1. He argued that the assessee has not made any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of his clients and third parties to support his contention and has merely relied upon the books of accounts which have already been rejected by the CIT(A) . 17.1. Brief facts relating to this common issue are that based on the information collected from various sources, the AO found shares wherein according to the AO, the sale quantity is in excess of the quantity available with the assessee (i.e. opening stock plus purchases). The AO alleged that there is no purchase of shares against such sales. Thus, according to the AO, it represents sale of unexplained stock of shares and accordingly addition is made to the tune of ₹ 5,56,19,836/-. The same is computed in Annexure S-1 (page Nos. 687 to 695 of APB No. 3) to the assessment order dated 27.03.1995. The CIT(A), during the first round of litigation upheld the addition made by the AO, however, the Tribunal set aside the matter to the file of AO vide its order dated 11.07.2008. Consequently, the CIT(A) in his order dated 24.03.2010 (second round of litigation) computed share market oversold position same as in the original assessment order at ₹ 5,56,19,836/-. The assessee preferred an appeal before the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old shares. 17.3. Before us, the ld. Counsel stated that the Income-tax Department has not provided details, break-up and evidence along with the basis of preparation of Annexure S-1, through which the addition on account of share market oversold position is made. Even after the numerous opportunities provided by the Bench during the proceedings, the Income-tax Department has failed to provide such details. Hence, the Ld Counsel stated that the addition on account of share market oversold position is not sustainable in law since the relevant material relied upon by the AO for computing the additions has never been brought on record till date. He also relied on detailed submissions made in respect of Ground Nos. 13 to 16 pertaining to the profit on sale of shares in shortage. 17.4. Further, the learned Counsel stated that shares were purchased and sold on behalf of clients or third parties, the information of which was not obtained by the AO. Further, the assessee would have sold shares on behalf of third parties which may have been erroneously considered as sales of the assessee by the AO. In the absence of such information pertaining to third party purchases / sales and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have heard rival contentions and gone through facts and circumstances of the case. We have also gone through the Annexure S-1 to the assessment order, the copy of which is available at Paper book 3 pages 695. From this annexure, we noted that the assessing officer has mentioned on the top of it Share market position as on 31.3.92 for HSM . He has made 7 columns giving name of the scripts, difference, opening stock, closing stock, purchase, sales and over sold. The columns relating to opening stock, closing stock, purchase, sale and oversold had been divided into sub-columns consisting of Qty and value . The quantity and value as oversold has been worked out in respect of each scrip by reducing out of sales (opening stock+ purchase)-closing stock and multiplying the quantity so arrived by the value prevailing as on 31.3.1992. In this case also, the Ld. AR categorically stated that the evidences from which this annexure has been prepared not been provided to the assessee even though the assessee has asked for the same from time to time. We have also directed the Ld. DR to provide copy of the evidences and the material on the basis of which the figures in the annexure are taken b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of unexplained deposits in the bank account. Relief to the extent of ₹ 101,46,00,000/- has been granted by CIT(A) vide order dated 23.04.2012, in the second round of litigation. The assessee was in appeal before the Tribunal in relation to the net addition of ₹ 150,34,33,835/-. The Tribunal vide its order dated 29.10.2014 set aside the matter to the file of AO. The AO vide her order dated 15.03.2016 considered the net addition of ₹ 150,34,33,835/- as unexplained money. Relief to the extent of ₹ 25,48,16,855/- has been granted by CIT(A), vide para No. 34.9 on page No. 132 of the impugned order dated 28.06.2017. The assessee is in appeal before the Tribunal in relation to the balance amount of addition of ₹ 124,86,16,980/. 19.2. Before us, the ld. Counsel for the assessee stated the facts that in respect of addition of ₹ 124,86,16,980/-, submissions are given in two parts, A and B . First he explained in respect to addition of ₹ 123,05,66115/-. It was explained that the amount of ₹ 123,05,66,115/- is in respect of the proceeds received on account of sale of money market securities as vide para No. 34.7 on page No. 131 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal file seized by the Income-tax Department. 2 28.03.1992 30,00,00,000 The said amount is received on sale of 2 crores Units 1964 Scheme to SBI Caps under Ready Forward leg. (Relevant deal slip is enclosed in page No. 1076 of APB No. 4). The said security was reversed (i.e. repurchased by the Appellant from SBI Caps) on 30.03.1992 for an amount of ₹ 30,08,22,000 (Relevant deal slip is enclosed in page No. 1076 of APB No. 4). The relevant extract of the Blue Deal Diary for 28.03.1992 (page No. 1078 of APB No. 4) maintained by SBI Caps states that SBI Caps has purchased 2 crores Units 1964 Scheme for a consideration of ₹ 30,00,00,000/- from the Appellant. The relevant page of the Blue Deal Diary is Document No. 2 of the list of documents forming part of the Charge-sheet for Special Case No. 4 of 1993. - Further, the Appellant submits that the deal has been executed in the month of March 1992 and hence does not form part of the deal file seized by the Income-tax Department. 3 28.03.1992 25,07,50,000 The said amount of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de on account amount transferred from one bank account of the assessee to another, deposits received from related entities and refund proceeds on allotment of right shares. These transactions are normal business transactions and routed through regular and disclosed bank accounts of the assessee. Accordingly, it was requested to delete the addition of ₹ 1,80,50,965/-. 19.6. On the other hand, the ld. CIT DR argued on the issue of addition made by AO on account of unexplained money u/s 69A of the Act, of ₹ 150,34,33,835/-. He stated that the CIT(A) has confirmed the addition to the tune of ₹ 124,86,16,880/- on account of first three entries of the table amounting to ₹ 75,08,97,945/- plus fourth entry which amounted to ₹ 47,96,68,171/-, aggregating to Ps. 123,05,66,015/-. The addition of ₹ 1,80,50,865/- has also been confirmed being miscellaneous bank credits for which assessee has failed to produce any evidence or explanation. However, the balance amount of ₹ 25,48,16,855/- was deleted on the basis of details filed by assessee. However, it was argued that as can be seen from the Annexure -U, there are total 98 entries of deposits which hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 124,86,16,880/-, therefore the issues before us relate only to the addition of ₹ 150,34,33,835/- in both the appeals filed by the revenue as well as by the assessee. The ld. DR is not correct requesting us to sustain the addition to the extent of ₹ 251,18,33,835/- made by the assessing officer in the original ex-parte order dt.27.3.1995. The ground taken by the revenue relate only against the sum of ₹ 25,48,16,955/- while the ground taken by the assessee is against the sustenance of the addition of ₹ 124,86,16,880/- by the CIT(A). We noted that the sum of ₹ 124,86,16880/- consists of 5 amounts of ₹ 20,01,47,945/-+30,00,00,000/-+25,07,50,000/-+47,96,68,170/- and ₹ 1,80,50,865/-. The first four items has been captured by the assessing officer from Annexure U as contended by ld. AR but not denied by the ld. DR. In respect of each amount the assessee has given the explanation as under:- 28.03.1992 20,01,47,945 Amount received on sale of 17% NTPC Bonds of FV ₹ 20 crores to SBI Caps under Ready Forward leg(Relevant deal slip is enclosed in page No. 1075 of APB No. 4). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is Document No. 2 of the list of documents forming part of the Charge-sheet for Special Case No. 4 of 1993. - Further, the Appellant submits that the deal has been executed in the month of March 1992 and hence does not form part of the deal file seized by the Income-tax Department. 25.03.1992 47,96,68,170 ANZ Grindlays Bank vide its letter dated 7.12.1992 (page No. 1080 of APB No. 4) addressed to the Income-tax Office has provided details of transactions entered by it with the Appellant. As per the given list ANZ Grindlays Bank has purchased 11.5% Central Loan 2008 with FV of 50 crores from Appellant on 25.03.1992 for an amount of ₹ 47,96,68,170/- (transaction listed on page No. 1082 of APB No. 4). It is to be noted that the list of transaction is provided from ANZ Grindlays Bank s perspective. Accordingly, the transaction marked as 'P' in the letter is a purchase from the Bank's perspective, and the same transaction is a sale transaction from Appellant's perspective (page No. 1082 of APB No. 4). The Appellant also places reliance on the Annexure M-1 wherein the said transaction i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Niranjan Shah in the original assessment order (Page nos. 65 to 76 of APBK No. 1). Thereafter the aforesaid addition was enhanced by ₹ 5.14 crores by the CIT(A) in the second round of appellate proceedings vide his order dated 24.03.2010 by placing reliance on the report of the Joint Parliamentary Committee ( JPC ). Sr. No. Particulars Amount(in Rs.) Amount(in Rs.) 1 Unexplained money in Rupees received from Shri. Niranjan Shah 3,14,35,200 2 Cash received for his proposed company M Securities by Shri Niranjan Shah 2,31,00,000 3 Unexplained money equivalent to USD 468200/- @ ₹ 30/- per USD 1,40,46,000 6,85,81,200 4 Enhancement in terms of JPC report 5,15,18,800 TOTAL 12,00,00,000 The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the order of his predecessor. The enhancement was made by his predecessor on this issue on the basis of JPC report wherein the said amount was mentioned. How, this issue is related to the year under consideration was argued by referring to page no. 142 of CIT(A) order dated 24.03.2010 wherein the transaction has been discussed in detail along with the reasons for addition. This addition has been made on the following basis: - 1. On the basis of documents seized from Niranjan Shah's premises in May 1992. 2. On the basis of statement of Niranjan Shah recorded u/s 131 of IT Act. 3. On the basis of JPC report wherein it was observed that Shri Shah was a Hawala Dealer with narcotics links and he was maintaining foreign currency account of HSM and his family members and had used ₹ 12 crores of HSM from undisclosed sources. 20.5. In view of the fact that there was enough evidence before CIT(A) which was not controverted by the assessee Ld. CIT(A)-DR urged that addition be sustained. 20.6. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the assessing officer in the original assessment order passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of Hon ble Supreme Court in the case of Andaman Timber Industries vs. Commissioner of Central Excise (2015) 281 CTR 0241 (SC). We also found that this tribunal in the case of Straptex (India) (p) Ltd. vs. DCIT (2003) 84 ITD 0320 (Bom. Trib.) as referred to by Ld. DR during the course of hearing from page 1090 to 1098 PB No.4, while referring to the search conducted in May, 1992 at the residence of Shri Niranjan Shah has held that the statements and material given by him could not have been used against the assessee for the following reasons: - a) The assessee was not given an opportunity to cross examine Mr. Niranjan Shah. b) Mr. Niranjan Shah had retracted his statement vide his declaration dt. 23.9.1994 before the Notary Public. 20.8. We also found that no independent evidence corroborating the statement of Niranjan shah has been brought on record. The report of JPC, in our view cannot be regarded to be the incriminating material to be used against the assessee. In view of this, we are bound to delete the said addition. Thus, ground no.21 of assessee s appeal is allowed. 21. The next issue raised by the assessee in his appeal is as regards to the addition on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and is liable to be deleted. 21.3. On the other hand, the ld. CIT DR argued that this addition pertains to payment to June Investments as unexplained investment of ₹ 62,50,000/-. This addition is confirmed by CIT(A). Survey was conducted and during the survey, the evidence regarding this transaction was found. It was mentioned that assessee had not given any reply or had not filed any reply to negate the claim regarding the addition, therefore, addition may be sustained. 21.4. We have heard the rival submissions along with the order of the authorities below and perused the same. We noted that this addition has been made on the basis of the survey being conducted at the premises of one Shri Deep Trivedi (third Party) which shows as per assessing officer that on 31.12.1991, the Harshad Mehta had paid a sum of ₹ 62,50,000/- to M/s June Investments P Ltd against the purchase of shares of M/s Lan Steel. We noted that assessee vide his letter dt. 20.2.1995 requested the assessing officer to provide a clear copy of the seized document as the one provided to him was illegible, but the assessing officer did not provide. The addition has been made merely on the basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before Tribunal. 22.2. Before us, assessee reiterated the submissions made before CIT(A) that no payment has been actually received by the assessee. Since the assessee follows cash system of accounting, interest receivable from related parties cannot be taxed on the basis of mercantile system until the same is actually received. It was argued that M/s Vyas Vyas Chartered Accountants have only made a comment in their Review of Unaudited Accounts in relation to interest receivable from related parties. The review report does not suggest that the assessee has received interest. He also placed reliance on the order of the Tribunal dated 2.01.2008 in ITA No. 5773/M/1998 for A.Y. 1989-90 (page Nos. 1104 to 1114 of APBK No. 4) in assessee s own case wherein Tribunal held that whether the assessee has maintained books of account or not, if the assessee regularly follows cash system of accounting, the said system should be accepted and the interest should be considered only for actual receipts. The relevant paras of the said order is reproduced below: 5.27 . . . Even otherwise, we find that in a case where the books of account are not maintained or rejected by the Assessing Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounting. The issue is discussed at page 138 and 139 at para 37.1 to 37.5 of CIT(A) and the addition has been confirmed by him after relying on the decision of predecessor who has discussed this issue in Para 25.1 from page no. 155 to page no. 158 of his order. In respect of method of accounting that it was on accrual basis, not the cash basis, the issue has already been discussed by CIT(A) vide his order dated 24.03.2010 from Para 10.3 to 10.4.4 (page no. 100 to 107) which was requested to take into consideration while deciding the issue. 22.5. We have heard rival contentions and carefully considered the same along with the order of the tax authorities. We noted that a similar issue regarding the addition on account of interest receivable from the family members has arisen in the case of the assessee in the AY 1989-90 in ITA/637/Mum/2007 wherein vide order dt. 2nd January 2008 this Tribunal duly considered the order of this Tribunal in the case of the assessee for AY 1988-89 on which the ld. DR has vehemently relied and came to the conclusion under para 5.27 that the order of the Tribunal for that AY would not apply in the present case (during AY 89-90). It was, further held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to this issue are that during the course of second round of proceedings the CIT(A) vide order dated 24.03.2010 made an enhancement amounting to ₹ 372,82,14,642/- by invoking the provisions u/s 251(2) of the Act. The addition was made by CIT(A) on account of alleged difference between the balances in the books of accounts of M/s. Ashwin S. Mehta and the books of M/s. Harshad S Mehta amounting to ₹ 107.35 crores and between the balances in the books of account of M/s. Jyoti H. Mehta and the books of M/s. Harshad S. Mehta amounting to ₹ 265.47 crores. The CIT(A), in the third round of appellate proceedings, vide the impugned order dated 28.06.2017 has upheld the findings of his predecessor. Aggrieved, assessee is in second appeal before Tribunal. 23.2. Before us, the ld. Counsel for the assessee argued that the facts in relation to the aforesaid ground of appeal are similar to ground of appeal No. 13 in case of Shri Ashwin S Mehta (Assessee s appeal No. 3427/Mum/2017). In term of this, he stated that the addition on account of difference in the books of account between Shri Ashwin S Mehta and Shri Harshad S Mehta is already explained to the Bench during the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this addition is the books of account. The Income-tax Department cannot be allowed to pick and choose a few aspects from the books of account after rejecting the same in totality.In view of the above, it was requested to delete the addition of ₹ 372,82,14,642/-on account of alleged difference in the books of account. 23.4. On the other hand, Ld. CIT-DR stated that this issue pertains to addition on account of differences in the books of the assessee and in the books of Shri Ashwin Mehta and Smt. Jyoti Mehta amounting to ₹ 372,82,14,642/-. It was mentioned that the Auditors Vyas Vyas, as appointed by Hon'ble Special Court, had pointed out various infirmities in the account of assessee. There were differences in the balances arising on account of complete non-disclosure of the transactions in the assessee's books. The credit balances also do not stand reconciled. Whereas M/s.Ashwin Mehta and M/s.Jyoti Mehta have disclosed transactions of ₹ 107,34,59,584/- and ₹ 265,47,55,058/- respectively with M/s.Harshad Mehta, the latter has not shown these transactions in his books. In view of this, the sum of ₹ 372,82,14,642/- was assessed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in making addition on account of alleged liabilities shown as other income on the basis of the review of unaudited accounts prepared by M/s. Vyas Vyas amounting to ₹ 69,63,00,000. The Appellant prays that the AO be directed to delete the addition of ₹ 69,63,00,000. 24.1. The brief facts relating to this issue are that during the course of the second round of proceedings before CIT(A), attention was invited by the AO to the report on Review of Unaudited Accounts of the Statement of Affairs ( the report ) as on 08.06.1992 of M/s Harshad S. Mehta prepared by M/s Vyas Vyas, wherein it was observed that on the liability side, an amount of ₹ 83,51,53,713/- has been mentioned as other income not shown in the books . The point no.4 in Notes on Consolidated Statement of Affairs in the report states that Other income has been calculated as per findings given by JPC Report . The aforesaid amount had been arrived at on the presumption that if the monies received by M/s Harshad S. Mehta would have been deployed at an average ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al institutions and other related parties. Some of the banks etc. responded in limited words, saying Degrees (Decrees) have been passed some have not responded at all. 6. Under the circumstances whatever material was available with us we prepared our report which was not 100% correct 24.4. Additionally, in the chart prepared by them, they have admitted that their estimates are based on Probable Effect of the Findings of Janakiraman Committee (page No. 1164 of APB No. 5). Further, the effects of the findings of Janakiraman Committee were made without the basis of complete information and details available before them (page Nos. 1162 and 1172 of APB No. 5). For instance, in respect of the addition to the extent of ₹ 34.76 crores (para No. 7.5 of the letter on page No. 1172 of APB No. 5), M/s. Vyas Vyas have specifically stated that as on the date (of the letter) they wait for a response from Canara Bank in relation to enquiry made whether there are any pending Suits/ liability towards the assessee. Even on sample basis, item-wise explanation in respect of an amount of ₹ 67,17,00,000/- out of total addition of ₹ 69,63,00,000/- (page No. 1174 of APB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dt. 30.11.2009 computed the figure of 83.51 crores taking the interest rate at 16% on the funds illegally utilised by the assessee belonging to banks. The relevant para of the report of Vyas Vyas how this income of 83.51 crores were estimated and taken in the statement of affairs as on 8-6-92 are reproduced as under: 7. accordingly while qualifying the report we prepared consolidated statement of affairs as at 8.6.1992 alongwith notes. The notes under the consolidated statement of affairs are self explanatory. 8. as regards other income not shown in books, it is submitted that the same have been calculated on estimate as per our finding from Jankiraman committee report, HSM illegally utilized funds belonging to banks etc. which he was not authorised to use. HSM got the benefit of the use of funds without paying interest. We have calculated interest which was saved by HSM as interest income wherever it was possible. In absence of complete details we could not ascertain the extent of benefit received by HSM in some of the cases reported in the Jankiraman Committee Report. 9. we calculated tentative figure of ₹ 83.51 crore while taking interest rate of 16% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in shares and also on account of unexplained investments or expenditures, to allow set off and telescoped of these additions and such unexplained investments or unexplained expenditures should be deemed to have been made or incurred out of such receipts or profit on trading in shares etc. The AO will compute the income after giving effect to this order after considering these directions and after confronting the assessee. Thus, this ground is allowed accordingly. 28. The next two ground Nos. 29 30 relating to deduction on account of Interest, business expenditure, business loss and depreciation deduction and allowances under chapter VIA of the Act, are not pressed and hence dismissed. 29. The next common issues in these appeals of assessee and revenue are regarding levy of interest u/s 234A, 234B and 234C of the Act. For this, the assessee has raised the following ground nos. 31 to 33: - 31. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) has erred in upholding the action of the AO in levying interest under section 234A,234B, and 234C of the Act. The appellant prays that the AO be directed to delete the interest under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) erred in not appreciating the CBDT s circular no. 334 dt. 3.4.1982 wherein it has been clarified that where assessment made originally by the assessing officer is either varied or set aside by one appellate authority but, on further appeal, the original order of the assessing officer is restored either in part or wholly, the interest payable u/s 220(2) will be computed from the due date reckoned from the original demand notice and with reference to tax finally determined. 29.1. The Ld. Counsel argued that the issue of levy of interest u/s 234A and 234B is covered by the decision of this Tribunal in the case of M/s. Growmore Leasing Investment Ltd. vs. DCIT in ITA no. 1219/Mum/2017 vide its order dated 27.12.2017. He stated that as per the order, the Tribunal has held that the provisions of section 234A, 234B and 234C being mandatory in nature, is chargeable even to a person notified under the TORTS Act. As per the order, it was further held interest u/s 234A, 234B and 234C should be recomputed after considering the amount of tax deductible at source on the income assessed. In view of the above, it is prayed that the AO be directed to re-compute the interest u/s 234A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the original assessment order upto the date of the fresh assessment order (i.e. from 27.03.11995 to 22.03.2016), even when the AO himself h as correctly computed interested upto the date of the original assessment order i.e. 27.03.1995, which is in accordance with the law as settled by the Hon ble Supreme Court in the case of Modi Industries Ltd. vs. CIT (1995) (216 ITR 759) The appellant prays that the direction of the Hon ble CIT(A) is without any jurisdiction and be quashed as it bad in law. 35. on the facts and in the circumstances of the case and in law, the Hon ble CIT(A) has erred in issuing the aforesaid direction on charging interest under section 234B without granting any opportunity to the appellant of showing cause against such direction thereby violating the statutory provisions of the Act and the principles of natural justice. The appellant prays that the direction of the Hon ble CIT(A) be quashed as it is bad in law. 30.1. The ld. Counsel drew our attention to para no. 44.8 on page No. 162 of the impugned order dated 28.06.2017, where the CIT(A) has held as under- . However I may add here that the assessee may still be liable for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (2A) u/s 234B of the Act to cover cases where application has been made to the Settlement Commission. Therefore, it is imperative that interest u/s 234B in other cases like that of the assessee, the period up to which interest u/s 234B can be considered is only up to the date of regular assessment as mentioned above. 30.4. It is therefore submitted that the period of interest cannot run beyond the date of regular assessment. As per section 2(40) of the Act, the word regular assessment means the assessment made under section 143 or 144 of the Act. The regular assessment in the present case would only mean assessment completed on 27.03.1995, since the assessment completed on 22.03.2016 was u/s 254 of the Act and not regular assessment. In support of this contention, following decisions were relied on: Modi Industries Ltd. And others v. CIT and another [216 ITR 759 (SC)] Freight Consultants P. Ltd. v. ITO [110 ITD 377 (Del)] Principal CIT v. Applitech Solution Ltd. [2016] 236 Taxman 602 (Gujarat) 30.5. The Hon ble Supreme Court in the case of Modi Industries (supra) had considered all the relevant judgments and was aware of the opposing points of view in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant to the appellate order under section 250, then the sub-section becomes meaningless. . . 30.6. Thus, the Hon ble Supreme Court has held that while deciding the meaning of the term regular assessment the unmistakable conclusion is that the said term cannot mean and said to include the fresh assessment made pursuant to the directions of the appellate authorities. Under these circumstances, and following the ratio laid down by Hon ble Supreme Court, it is prayed that the interest u/s 234B of the act should be charged only till the passing of the assessment order dated 27.03.1995. The ld. Counsel also relied on another direct decision on section 234B by the Hon ble Gujarat High Court in the case of PCIT vs. Applitech Solution Ltd [2016] 236 Taxman 602 (Gujarat), which has relied on the judgment of Modi Industries Ltd.(supra) and held as follows: 4. It can thus be seen that the interest liability flowing from sub-section (1) of Section 234B has two parameters. One is the principal on which such interest would be computed and the other is the period, during which, such interest liability would arise. Two terminal points of the liability are the 1st of April next follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee shall be liable to pay simple interest @ 2% for every month or part of the month comprised in the period from 1stApril next following such financial year to the date of determination of total income u/s 143(1) or regular assessment under section 143(3) or section 144 of the Act. Regular assessment has been defined u/s 2(40). According to this section, regular assessment means the assessment made u/s 143(3) or section 144 of the Act. In the case of the assessee, we noted that the first assessment was made u/s 144 on 27.3.1995 and therefore that was the regular assessment. The subsequent assessments have been framed in consequence of the order of the Tribunal passed u/s 254 and those cannot be regarded to be the regular assessments. Similar view, we noted has been taken by the Hon ble Supreme Court in the case of Modi Industries Ltd. vs. CIT [1995] 128 CTR 361 (SC). Had there been any intention of the legislator that the interest u/s 234B be charged upto the date of the assessment order passed in consequence of the order of the appellate authorities passed u/s 250/254, this should have been specifically mentioned u/s 234B by inserting sub-section as has been mentioned of sub sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO to charge interest u/s 220(2) under Income Tax Act after 30 days of serving of demand notice from the fresh assessment order. We, therefore, noted that in the case of CIT vs. Chika Overseas Pvt. Ltd [2012] 247 CTR 134 (Bombay), has taken the similar view. The decision Hon ble Delhi High court in the case of Girnar Investment Ltd. vs. CIT [2012] 340 ITR 529 (Delhi) dt. 5.01.2012 as relied by the Ld. DR and not of Bombay High Court. The Jurisdictional High Court decision is binding on us. We noted the CIT(A) while holding that the interest u/s 220(2) is to be levied only from the due date of issuance of fresh notice of demand, considered these binding case laws as well as CBDT circular no 334 (F no 400/3/81-ITCC) dated 3-4-1982 issued by CBDT, which we perused and in our view the case of the assessee falls within paragraph 2 (i) of the said circular. In view of this legal position, we do not find any illegality or infirmity in the order of the CIT(A) directing the AO to charge interest u/s 220(2) from the date of default of the fresh demand notice issued after the fresh assessment made in consequence of the order of the appellate authorities. Thus, the ground no 8 to 12 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in ignoring the specific directions of the Hon'ble ITAT and in rejecting the books of account of the Appellant. The Appellant prays that as held in the ITAT order, the books of accounts be accepted and the income be assessed as per the books of account. 34.1. The facts and circumstances are identical as to what are in the case of Late Harshad S Mehta, decided above. The assessee explained that in the first assessment order passed u/s. 144 of the Act, the books of account could not be produced. The Assessee preferred an appeal before the CIT(A) against the said assessment order. Subsequently, assessee preferred appeal before the Tribunal. The books of account were produced before the Tribunal. The Tribunal set aside the matter to the file of the AO directing him to consider the books of account. The AO, in the second round of litigation, considered the books of account, but rejected them on various grounds. The specific reasoning of the AO is recorded on page No. 77 to 83 of APB No 1. According to the AO, the books were drawn belatedly, not audited by the auditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lack of cooperation from the Appellant's end the AC'S decision that the books of account are not reliable it justified 18 In view of the above facts and observations, I agree with the view take, by my predecessors and the AO time and again with respect to the rejection of books of account Hence, the decision of the AO in rejecting the books of account being unreliable and non - verifiable is upheld 34.3. We find that this issue of rejection of the books of account of the assessee is covered in the case of Late Harshad S Mehta in this order vide Para No. 8.5 and 8.6. Hence, we are of the view that the AO has rightly rejected the books of account on the same reasoning s and which CIT(A) also confirmed. In view of the above position, we dismiss this ground of assessee s appeal. 35. The next common issue in these appeals of assessee and revenue is as regards to the addition on account of profit on sale of shares in shortage of ₹ 183,78,97,341/- and for this assessee has raised the following ground Nos. 4, 5 6:- 4. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AC in maki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexure S-3 (page Nos. 357 to 467 of APB No. 2)] The CIT(A) upheld the said addition made by the AO. Subsequently, Tribunal set aside the matter to the file of AO. The AO once again determined the profit on sale of shares at ₹ 309.47 crores Subsequently, the CIT (A) vide his order dated 29.02.2012 in the second round of litigation granted relief aggregating to ₹ 125.68 crores to the assessee on account of following: a. Shares purchased in the subsequent years included in AV 1992-93 (page Nos. 111 and 112 of APB No. 1): b. Credit for additional benami shares disclosed by the Custodian before Hon ble Special Court (page Nos. 114 to 115 of APB No. 1); and c. Profit on sale of shares in shortage in respect of shares of ACC by adopting correct market rates of ₹ 8,800/- (page Not 119 to 120 of the APB No. 1). 35.2. The AO, subsequently vide order dated 22.03.2016 (third round of litigation) assessed profit on sale of shares in shortage at ₹ 183.78 crores as assessed in the Original assessment order after considering the relief granted by the CIT(A) in the second round of litigation (Rs. 309.47 crores less ₹ 125.68 crores). The assessee prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold by the assessee on 31.03.1992 and accordingly has applied the market rate of these shares as on 31.03.1992 to arrive at sale consideration of such shares. After reducing the cost of acquisition of such shares, the AO has arrived at the profit on sale of shares in shortage at ₹ 309.47 crores and the same has been added as income. In case of excess of the physical stock of shares vis- -vis the stock computed by the AO, no shortage has been computed. Illustration for explaining the position of scrip Reliance Industries Limited is reproduced below: - Illustration for scrip Reliance Industries Limited is reproduced below: Particulars SmtJyoti Mehta Total (ASM +HSM + JHM) Quantity Amount (In ₹) Annexure S-1 Opening stock as on 01.041991 (As per Assessment order of A.Y. 1991-92) 87,796 87,59,407 Add: Purchases from 01.041991 to 31.03.1992 (Custodian informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Profit on sale of shares in shortage (In ₹) [DIFF] I-H 26,73,27,637 35.6. The assessee explained that the addition on account of profit on sale of shares in shortage is not sustainable in law due to the reason that the relevant material relied upon by the AO for computing the additions has never been brought on record till date. Further, various infirmities in the computation of profit on sale of shares in shortage have been found. 35.7. We find that this common issue is fully covered by the decision taken in the case of Late Harshad S Mehta vide this order in paras 15.33 to 15.40 above. Ld. Counsel for the assessee as well Ld. Special Counsel Ld. CIT-DR also not argued because the issue is the same and facts and circumstances are same. The facts and circumstances are exactly identical in the present appeals on this issue, hence, taking a consistent view, we delete the addition confirmed by the CIT(A). The order of CIT(A) is confirmed to the extent it has deleted the addition. The ground of Revenue s appeal is dismissed and that of the assessee s appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of share market oversold position of ₹ 11,89,82,424/- as under: - 19. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) erred in not giving specific directions to the learned AO for determination of definite purchase price to be reduced from the addition on account of share market oversold position. Further, revenue also raised ground No. 3 as under: - 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the AO to grant deduction to the extent of purchase cost in relation to the scrips held to be oversold despite holding that the assessee has not produced any specific evidence that the transactions have been undertaken on behalf of his clients and third parties to support his contention and has merely relied upon the books of accounts which has already been rejected by the CIT(A). 37.1. We find that the said ground as per the Departments Appeal is connected to the ground No. 8 and additional ground no. 19 of the Assessee s Appeal. The above mentioned additional ground of appeals are related to the ground of appeal No. 8 and hence, the facts and circumstances for the said addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, as per the order giving effect dated 12.10.2012 to the CIT(A) the AO reduced a net amount of ₹ 8,27,08,086 (i.e. ₹ 10,60,22,216 less ₹ 2,33,14,130) under the head share market oversold. Hence, it is noted that income under the head of share market oversold position has been wrongly taken at ₹ 8,27,08,086 instead of ₹ 11,89,82,426. The Tribunal again set aside the matter to the file of the AO vide its order dated 21.03.2014 (page No. 152 of APB No. 1). The AO, subsequently, vide her order dated 22.03.2016 (third round of litigation) assessed profit on sale of shares in shortage as assessed in the original assessment order after considering the relief granted by the CIT(A) in the second round of litigation at ₹ 11,89,82,424/- (Rs. 22,50,04,640 less ₹ 10,60,22,216). The assessee preferred further appeal before the CIT(A), who Vide impugned order dated 24.03.2017, granted relief on account of purchase cost without quantifying the purchase cost, but merely has given direction to the AO to recompute the oversold position (page No. 66 to 67 of the impugned order). 37.3. The contention of assessee was that the Income-tax Department has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in this appeal of assessee is regarding addition of Share Market Trading Profit amounting to ₹ 12,34,59,337/-. For this, assessee has raised the following ground No.9: - 9. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in making addition on account of share market trading profit. The Appellant prays that the AO be directed to delete the addition on account of share market trading profit. 38.1. The brief facts are that the assessee is a registered member of B.S.E. and has engaged into transactions involving trading and investment in shares and also undertakes purchase and sale transactions for and on behalf of her clients through her brokerage firm. The AO vide order dated 27.03.1995 has made addition of ₹ 10,01,45,207/- on account of share market trading profit as computed in Annexure S-1 of the original assessment order (Page Nos. 340 to 347 of APB No. 2). The AO has claimed to have collected the information from various sources including brokers, BSE through whom the transactions are claimed to have been undertaken by the assessee. The assessee contented that consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see would have sold shares on behalf of third parties which may have been considered as sales of the assessee by AO. In the absence of such information pertaining to third party purchases/ sales and the basis for computing the sale of shares, the assessee submits that share market trading profit ought not to be taxed in her hands. 38.3. We noted that all her transactions pertaining to purchase and / or sale are through the normal banking channels i.e. in accordance with the Rules and Regulations and Bye laws framed by the stock exchange and further recognized by Securities Contract (Regulation) Act, 1956 and duly recorded in his books of account. All the transactions were reported to stock exchange on a daily basis. We find that even where the data has been provided by the Income-tax Department now lot of discrepancies has been pointed evidencing that the basis of addition is incorrect. Hence the Annexure S-1 through which the said addition of share market trading profit is made cannot be relied upon to uphold the addition completely. 38.4. We further noted that CIT(A) while confirming the addition relied on the said annexure even though the AO has observed in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following ground No. 11: - 11. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the AO in making an addition of ₹ 25,86,22,375 as unexplained money under section 69A of the Act. The Appellant prays that the AO be directed to delete the addition of ₹ 25,86,22,375 as unexplained money. Similarly, the revenue also raised the following ground No. 4:- 4. On the facts and in the circumstances of the case and in law, the CIT(A) erred in deleting the addition made to the extent of ₹ 15,96,33,663/- on account of unexplained money u/s 69A of the I.T. Act. 40.1. Brief facts are that as per the original assessment order dated 27.03.1995, an addition of ₹ 52.33,48,237/- was made u/s. 69A of the Act on account of unexplained deposits in the bank account. Relief to the extent of ₹ 10,50,92.200/- has been granted by CIT(A) vide order dated 29.02 2012, during the second round of litigation. The assessee was in appeal before the Tribunal in relation to the net addition of ₹ 41,82,56,037/-. The Tribunal vide its order dated 21.03.2014 set aside the matter to the file of AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.1992 3,05,00,000 6,01,644 5. Hansdhwani Trading Co. 28.03.1992 3,30,00,000 6,50,959 6. Kunjvan Texfab Ltd. 28.03.1992 3,30,00,000 6,50,959 7. Orator Trading Enterprises Ltd. 28.03.1992 3,55,00,000 7,00,274 8. Avaran Textiles Ltd. 28.03.1992 1,75,00,000 3,45,205 9. Saki Agencies Pvt. Ltd. 30.03.1992 35,00,000 82,849 Total 25,00,00,000 49,45,315 40.3. In relation to the said addition of ₹ 25 crores, reliance is placed on the notices dated 11.03.1996 issued u/s 133(6) of the Act by the AO to the assessee along with enclosures (refer page Nos. 652 to 661 of APB No. 3) which confirm that these transactions took place between the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble CIT(A) erred in disallowing the claim of other expenses of the Appellant as per the books of account. The Appellant prays that the AO be directed to grant deduction in relation of other expenses incurred by the Appellant. 41.1. These two ground Nos. 12 13 relating to deduction on account of Interest, business expenditure, business loss and depreciation deduction and allowances under chapter VIA of the Act, are not pressed and hence dismissed. 42. The next issue raised by the assessee is as regards to the addition of ₹ 2,50,000/- on account of transactions with Mr. Niranjan J. Shah. For this, assessee has raised the following ground No.14: - 14. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) erred in upholding the action of the AC) in making an addition of ₹ 2,50,000 on account of transactions with Shri Niranan J. Shah. The Appellant prays that the AO be directed to delete the addition of o account of transactions with Shri Niranan J. Shah amounting to ₹ 2,50,000. 42.1. Brief facts are that the AO vide his Order dated 27.03.1995 made an addition of ₹ 2,50,000/- on account of unexplained money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it was held that as per the principles of natural justice, the AO has to provide the evidence to the assessee and grant opportunity of cross-examination. Failure to grant opportunity of cross examination to the assessee shall render the assessment void. In view of the above, we are deleting the addition of ₹ 2,50,000/- on account of the alleged transactions with Shri Niranjan Shah. 42.4. Even the similar transaction in the case Late Harshad S Mehta is deleted by us in this order on similar facts vide para 20.6 to 20.8. The facts and circumstances are exactly identical in the present appeal on this issue, hence, taking a consistent view, we delete this addition. This issue of assessee s appeal is allowed. 43. The next issue relating to the enhancement of ₹ 28,14,319/- on account of alleged differences in the books of account. For this, assessee raised the following ground No. 15: - 15. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) erred in upholding the action of alleged differences in the books of the appellant and in the books of the late Shri Harshad S. Mehta and in ignoring the reconciliation of accounts and vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the relevant ledger accounts wherein the corresponding entries are reflected in computing the alleged difference of ₹ 28,14,319/-/. A chart detailing the ledger account balances showing ledger accounts considered by the AO which calculating the difference is filed before Tribunal (page No. 719 of APB No. 3). The same is reproduced below- Ledger accounts balances in the books of Harshad S. Mehta 1) in the books of M/s Harshad S Mehta Sr. NO. Account NO. Name of the Account Receivable/ Receivable /Payable a) 3001 (13035) Jyoti H. Mehta 17,51,96,007 b) 3001 (27292) M/s Jyoti H Mehta C) 2036 Mrs. JHM Loan A/c 35,75,000 d) 2095(272) Jyoti H Mehta 1,40,220 Total 17,86,30,787 Ledger Accounts balances in the books of Jyoti Mehta 2) In the boo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted transaction by transaction reconciliation of the relevant books of account on page Nos. 731 to 735 of APR No. 3. This difference is mainly on account of a timing difference in recording a few entries in the books of Shri Harshad S. Mehta (on account of cash basis of accounting), etc. which is apparent from page 730 of APB No. 2. The difference has been duly reconciled and is self-explanatory. Further, it is submitted that all the above transactions are undertaken through banking channels and there is no involvement of cash. Further, the entire calculation no discrepancies have been pointed out by the Income-tax Department. 43.6. In view of the above explanation and the fact that the issue is covered in the case of Harshad S Mehta in the above para 23.5 of this order. The facts and circumstances are exactly identical in the present appeal on this issue, hence, taking a consistent view, we delete this addition. This issue of assessee s appeal is allowed. 44. The next issue in this appeal of assessee is raised by ground No. 16 regarding Long term capital gain taxed at higher rate as under: - 16. On the facts and in the circumstances of the case and in law, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in directing the AO to compute the interest under section 234Cin case of the assessee as per the returned income as against assessed income, despite the fact that no valid return was filed by the assessee for the year under consideration. 7. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO not to charge interest u/s 220(2) from the date of original assessment, but only from the date of reassessment in case of assessee without appreciating the fact that demand becomes due from the date of original assessment. 8. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not considering the decision of Hon'ble Bombay High Court in case of M/s.Girnar Investment Ltd. WP(C) No.5750/2010 dated 05.01.2012, wherein the Hon'ble Court held that assesse is liable to pay interest u/s 220(2) from the date of original order u/s 143(3) dated 07.10.1997 till the final payment. 9. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not considering provisions of section 240(a) of IT Act wherein demand does not cease to exist when the order is set- aside by an Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed speculative loss of ₹ 15,96,02,370/-. Further, the AO held that since the said loss is speculative in nature, it cannot be adjusted against other profits determined under various heads of income. The CIT(A) in para No. 34.17 on page No. 83 of his impugned order has held that the said loss of ₹ 15,96,02,370/- is on account of purchase and sale of shares undertaken by the assessee is not speculative in nature. Accordingly, CIT(A) has directed the AO to adjust the said loss against the share trading profit and other normal business income. We find that CIT(A) in the para No. 34 to 34 19 on page Nos. 77 to 84 of the impugned order dated 24.03.2017 has dealt with the issue. It is thereby observed that the CIT(A) has passed an elaborate and speaking order on the said ground of appeal The conclusion drawn by the CIT(A) is very sound under the law. Further, the Income-tax Department has not provided relevant details, break-up and the evidence along with the basis of preparation of Annexure S-2 to the assessment order. Department has neither been able to rebut the submissions made before the CIT(A) and basis which relief has been granted in the impugned order. Hence, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book).Surprisingly, the AO thereafter passed the impugned order on 28.03.2016 purportedly to give effect to the Tribunal's order dated 10.11.2014. 50.2. Before us, it was claimed that after passing the first order on 30.01.2015, the AO became functuous officio. Therefore, the order dated 28.03.2016 is null and void, and without jurisdiction. Reliance is placed upon decision of the Bombay High Cowl in the case of Classic Share Stock Broking Services Ltd. v. ACIT [2013] 32 taxmann.com 273 (Bombay). The above referred decision was followed by the CIT (A) in the case of DCIT v Heena N. Kanakia (supra). The said order of the CIT (A) has been upheld by the Tribunal for A.Y 2003-04 in ITA No. 3718/Mum/2015 dated 23.09.2015. In light of the above, it is submitted that the assessment order (dated 22.03.2016) may kindly be declared to be null and void. 50.3. We have already taken a view in the case of Late Harshad S Mehta above in this order vide para no.6.5 to 6.8, wherein the assessment on identical facts has been quashed. Hence, respectfully following the same, we quash this assessment also. 51. The next ground of assessee s appeal is as regards to assessment as bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the CIT (A), and held that the books of account could not be rejected on the grounds stated by him. The Tribunal set aside the matter to the file of the Assessing Officer and directed him to consider each and every entry of the books of account of the assessee. In the third round of litigation before the Assessing Officer, detailed submissions were made from time to time. 52.2. We find that this issue of rejection of the books of account of the assessee is covered in the case of Late Harshad S Mehta, in this order vide Para No. 8.5 and 8.6. Hence, we are of the view that the AO has rightly rejected the books of account on the same reasoning s and which CIT(A) also confirmed. In view of the above position, we dismiss this ground of assessee s appeal. 53. The next issue in this appeal of assessee is as regards to addition of ₹ 56,35,451/- on account of share market speculative profit. For this, assessee has raised following ground No.5:- 5. On the facts and in the circumstances of the ease and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in making all of ₹ 53,35,451/-on account of share market speculative profit. The Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f profit on sale of shares in shortage of ₹ 230.13 Crores and for this assessee has raised the following ground Nos. 6, 7 8:- 6. On the facts and in the circumstances of the case and in lac the Hon'ble CIT(A) has erred in upholding the action of the AO in making addition of profit on account of sale of shares in shortage based on assumptions and surmises. The Appellant prays that the AO be directed to delete the addition of profit on sale of shares in shortage. 7. On the facts and in the circumstances of the ease, the Hon'ble CIT(A) erred in upholding the action of the AO in computing the profit on sale of shares in shortage without granting credit in respect of missing. stolen, lost, misplaced shares, shares seized by CBI and shares purchased on behalf of related and third parties. The Appellant prays that the AO be directed to recompute the profit on sale of shares in shortage after granting appropriate credit. 8. On the facts and ill circumstances of the case, the Hon'ble CIT(A) erred in upholding the action of the AO in adopting the closing rate as on 31.03.1992 for the purpose of computing the profit on sale of shortage of shares. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der after considering the reliefs granted by the CIT(A) in the second round of litigation at ₹ 230.13 crores [Rs.367 crores less ₹ 137 crores]. The assessee preferred further appeal before the CIT(A) who Vide impugned order dated 28.02.2017 granted following reliefs to the assessee: a. Credit of certain unregistered shares disclosed in letter dated 31.01.1995 of Shri Harshad S. Mehta to the Custodian (page Nos. 21 to 54 of impugned order dated 28.02.2017 in the appeal file). b. Credit of shares of Apollo Tyres Limited seized by CBI and lying in the custody of the CBI authorities (page Nos. 55 and 56 of the of impugned order dated 28.02.2017 in the appeal file), and c. Credit on account of mutilated shares of Apollo Tyres Limited (page No. 58 of the of impugned order dated 28.02.2017 in the appeal file). 54.3. The AO computed the quantities of shares of various companies acquired by the assessee on the basis of Opening Stock, purchases and sale of shares in Annexure S-1. In doing so, he has taken closing stock of shares of last Assessment Year (i.e. AY 1991-92) as opening stock for AY 1992-93. Thereafter, he has gathered the details of purchases and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount (in Rs.) Annexure S-1 Opening stock as on 01 .04.1991(As per Assessmentorder of A.Y. 1991-92) 1,40,545 1,68,65,400 Add: Purchases from 01.04.1991 to 31 .03.1992 (Custodian information, Company information, etc.) 24,41,679 36,61,87,938 Less. Sales from 01.04 1991 to 31 .03.1992 (Custodian information, Company information, etc.) 9,04,575 14,04,58,074 Add: Trading profit / (Loss) 62,71,236 Closing stock as on 31.03.1992 (Balancing figure - Quantity) 16,77,649 24,88,66,500 Annexure S-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 above. Ld. Counsel for the assessee as well Ld. Special Counsel Ld. CIT-DR also not argued because the issue is the same and facts and circumstances are same. The facts and circumstances are exactly identical in the present appeals on this issue, hence, taking a consistent view, we delete the addition confirmed by the CIT(A). The order of CIT(A) is confirmed to the extent it has deleted the addition. The issue of revenue s appeal is dismissed and that of the assessee s appeal is allowed. 55. The next issue in this appeal of assessee is as regards to the addition of ₹ 60,99,584/- on account of Badla income. For this, assessee has raised the following Ground No. 9: - 9. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in making an addition of ₹ 60,99,584/- on account of share market badla income. The Appellant prays that the AO be directed to delete the addition of , ₹ 60,99,584/- on account of share market badla income. 55.1. We noted that as per Annexure S-5 to the original assessment order dated 22.03.1995, the AO has made addition of ₹ 60,99,584/- on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the assessee has not produced any specific evidence that the transactions have been undertaken on behalf of his clients and third parties to support his contention and has merely relied upon the books of accounts which has already been rejected by the CIT(A). 56.1. Brief facts are that the AO based on the information collected from various sources, found scrips/shares wherein the sale quantity is in excess of the quantity available with the assessee (i.e. opening stock plus purchases). The AO alleged that there is no purchase of shares against such sales. Thus, according to the AO, it represents sale of unexplained stock of shares and accordingly made addition to the tune of ₹ 49,01,92,114/-. The same is computed in Annexure S-1 to the assessment order dated 22.03.1995. The CIT(A) during the first round of litigation upheld the addition made by the AO, however, the Tribunal set aside the matter to the file of CIT(A) vide its order dated 31 .03.2006. Subsequently, the CIT(A) in his order dated 30.12.2011 (second round of Litigation) granted relief to the assessee amounting to ₹ 13,50,37,760/- in respect to certain scrips in the oversold position. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee by the AO. In the absence of such information pertaining to third party purchases/ sales and the basis for computing the oversold position, the addition made is erroneous. Further, all transactions pertaining to purchase and/or sale are through the normal banking channels i.e. in accordance with the Rules and Regulations and Bye laws framed by the stock exchange and further recognized by Securities Contract (Regulation) Act, 1956 and duly recorded in his books of account. All the transactions were reported to stock exchange on a daily basis. In view of the above, we are of the view that the decision of the CIT(A), for sustaining the addition on account of shares market oversold position is without any valid basis and, hence, cannot be upheld. 56.4. We also find that this common issue is fully covered by the decision taken in the case of Late Harshad S Mehta vide this order only vide para 17.6 above. Ld. Counsel for the assessee as well Ld. Special Counsel Ld. CIT-DR also not argued because the issue is the same and facts and circumstances are same. The facts and circumstances are exactly identical in the present appeals on this issue, hence, taking a consistent v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 58.2. The facts are that the CIT(A) confirmed the addition to the extent of ₹ 23.40 crores for the reason that the assessee failed to furnish any clinching evidence in respect of short term loans taken from Reliance Group companies, etc. The details of loans of ₹ 23.40 crores and interest paid thereon of ₹ 41.42 Iakhs have been given on page Nos. 73 and 74 of the impugned order of the CIT(A). We find that the assessee in relation to the said addition of ₹ 23.40 crores, placed reliance on the notices dated 11.03.1996 issued u/s 133(6) of the Act by the AO to the assessee along with enclosures (refer page Nos. 666 to 674 of paper book). We also find that the loan confirmation for the aforesaid transactions were already on record before the AO as well as the CIT(A) (page Nos. 662 to 665 of paper book). We noted that inspite of relevant evidence being on record, the Income-tax Department did not carry out any verification. Even before us also assessee filed the additional evidence in the form of latest loan confirmations from group entities of Reliance Industries Ltd. in respect of addition amounting to ₹ 23.40 crores, which we accepted (filed on 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loan given and amount received for purchase of shares from clients. 58.5. As regards to the addition of ₹ 18,41,385, the addition is made as per Annexure U-2 (page No. 510 of the paper book). The assessee claimed that the said deposit entries captured by the AO in Annexure U-2 do not pertain to the assessee. None of the said entries are reflected in any of the Bank accounts held by the assessee. 58.6. From the above facts and contents, it is clear that these amounts need verification at the level of the AO in term of the additional evidences filed by assessee. As regards to other additions, we restore to the matter to the file of the AO for verification and accordingly deciding the issue. Accordingly, this issue of assessee s appeal is set aside to the file of AO, who will decide after verification of documents and other additional evidences. 58.7. As regards to the ground of revenue s appeal, we noted that the Department is in appeal in relation to relief of ₹ 13,50,000/- granted by the CIT(A) vide the impugned order dated 2803.2016. In relation to the said relief, we noted that the credit entry of ₹ 13,50,000/- shown by the AO as deposit in Bank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considering all the relevant ledger accounts in computing the alleged difference of ₹ 164,60,46,992/-. b. The books of account of Shri Ashwin S Mehta (personal account) and M/s. Ashwin S Mehta (proprietorship concern) needs to be considered on a consolidated basis. c. Reconciliation of Ledger account balances between Ashwin S. Mehta and Harshad S. Mehta is submitted before the Assessing Officer as well as the Ld. CIT(A) - Each and every entry is explained by providing one to one correlation d. Addition made by relying on the Ld. CIT(A) order dated 24.03.2010 in thecase of Shri Harshad S. Mehta for AY 1992-93 although the same is set asideby the Hon'ble Tribunal (order dated 10.11.2014). 59.3. The assessee contended in respect to the addition that the revenue has omitted many evidences like not considering all the relevant ledger accounts in computing the alleged difference of ₹ 164,60,46,992/-. It was explained that the whole issue and its resolution lies in the calculation of the year end closing balances of various ledger accounts in the books of Shri Ashwin S. Mehta and Shri Harshad S. Mehta. Whilst some account balances were considered by AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt accounts were considered by the CIT(A) there would be a book difference of only ₹ 3,86,66,780/-. This difference is mainly on account of a timing difference in recording a few entries in the books of Shri Harshad S. Mehta (on account of cash basis of accounting) etc. A chart reconciling the said difference of ₹ 3,86,66,780/- is furnished on page Nos. 793 to 797 of paper book, thereby explaining the entire alleged difference in the books of account. It was further claimed that all the above transactions are undertaken through banking channels and there is no involvement of cash. 59.5. The books of account for personal account and proprietorship concern needs to be considered on a consolidated basis. We further noted that in the case of the assessee, the books of account for personal account (Shri. Ashwin S. Mehta) and proprietorship concern (M/s. Ashwin S. Mehta) are maintained separately. The separate books of account are maintained for administrative convenience. However, for income tax purposes, the income earned by Shri Ashwin S. Mehta, on personal account and by the proprietorship concern, would be taxed on a consolidated basis. Accordingly, the consolidated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove details were already submitted to the AO and CIT (A) during the third round of litigation but no discrepancies were found in the said reconciliation. Even during the course of hearing on 01.02.2018, we, once again directed the AO to verify Ledger Accounts in the books of Shri Ashwin S. Mehta and Shri Harshad S. Mehta (page Nos. 695 to 754 of paper book) during the course of the proceedings itself. Admittedly, no discrepancies have been found by the AO till date. 59.9. In view of the above explanation and the fact that the issue is covered in the case of Harshad S Mehta in the above para 23.5 of this order, we delete this addition. 60. The next issue in this appeal of assessee is regarding set-off of addition made on account of sources of income against the expenses, investment, application of such source based on telescoping theory and for this, assessee has raised the following ground no. 14:- 14. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in rejecting the plea of the Appellant with respect to set oft of addition made on account of sources of income against the expenses/investment application of such source based o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012, wherein the Hon ble Court held that assessee is liable to pay interest under section 220(2) from the date of original order under section 143(3) dated 07.10.1997 till the final payment. 8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not considering provisions of section 240(a) of IT Act wherein demand does not cease to exist when the order is set aside by an Appellate Authority until a consequential assessment is made by the Assessing Officer. 9. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the CBDT s Circular No. 334 dated 03.04.1982 wherein it was very clearly held that assessment made originally by the Assessing officer is either varied or even set aside by one Appellate Authority but on further appeal, the original order of the Assessing Officer is restored either in part or wholly, the interest payable under section 220(2) will be computed regarding the due date reckoned from the original demand notice and with reference to the tax finally determined. 61.1. We have already adjudicated the issues of charging interest u/s 234A, 234B, 234C 220(2) of the Act vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this order vide Para No. 8.5 8.6. Similarly, in assessee s own case in AY 1992-93 vide Para 52.1 and 52.2 we have also been taken same view in identical facts. Hence, we are of the view that the AO has rightly rejected the books of account on the same reasoning s and which CIT(A) also confirmed. In view of the above position, we dismiss this ground of assessee s appeal. 65. The next issue in this appeal of assessee is regarding addition of Share Market Trading Profit amounting to ₹ 11,13,28,475/-. For this, assessee has raised the following ground No.4:- 4. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in not allowing entire relief sought by the Appellant in relation to Share Market trading profit. The Appellant prays that the AO be directed to delete the entire addition on account of Share Market trading profit. 65.1. We also find that this issue is fully covered by the decision taken in the case of Late Harshad S Mehta of this order vide para 13.5. The ld. Counsel for the assessee as well Ld. Special Counsel Ld. CIT-DR also not argued because the issue is the same and facts and circumstances are same. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , hence, taking a consistent view, we delete the addition confirmed by the CIT(A). The issue of the assessee s appeal is allowed. 68. The next issue in this appeal of assessee is regarding deduction on account of interest expenditure other expenditure and for this, assessee has raised the following ground no. 7 8:- 7. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) erred in upholding the action of the AO in not allowing deduction of ₹ 19,54,00,000 on account of interest expenditure incurred by the Appellant. The Appellant prays that the AO be directed to allow a deduction of ₹ 19,54,00,000 on account of interest expenditure incurred by the Appellant. 8. On the facts and in the circumstances of the case and in law, the Hon'ble CIT(A) has erred in upholding the action of the AO in not allowing deduction on account of various expenses incurred by the Appellant. The Appellant prays that the AO be directed to allow deduction of various expenses incurred by the Appellant. 68.1. These two ground Nos. 7 8 relating to deduction on account of Interest, business expenditure, business loss and depreciation de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order i.e. 27.03.1995, which is in accordance with the law, as settled by the Hon ble Supreme Court in case of Modi Industries Ltd. vs. CIT [1995] (216 FIR 759). The Appellant prays that the direction of the Hon ble CIT(A) is without any jurisdiction and be quashed as it is bad in law. 13. On the facts and in the circumstances of the case and in law, the Hon ble CIT(A) has erred in issuing the aforesaid direction on charging interest under section 234B without granting any opportunity to the Appellant of showing cause against such direction thereby violating the statutory provisions of the Act and the principles of natural justice. The Appellant prays that the direction of the Hon'ble CIT(A) be quashed as it is bad in law. 70.1. We have already adjudicated the issues of charging interest u/s 234A, 234B, 234C 220(2) of the Act vide this order in the case of Late Harshad S Mehta vide paras nos. 29 to 30.10 and in the case of Jyoti Mehta vide Para No. 46.1 and in assessee s own case for AY 1992-93 vide para No. 61.1 above. Here, also we direct the AO to follow the order in the case of Harshad S Mehta above and charge interest accordingly. These ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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