TMI Blog2020 (9) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ld. CIT(A) on this matter and confirm the finding of Ld. CIT(A) and accordingly hold that the documents ID marked MSL/23 Pages 1 to 3, MSL/8 Page 13, SJ/MHD/MZ Page 2 and MSL/21 Page 32 to 36 also did not constitute incriminating material or evidence qua the assessee. Additions made u/s 68 69C in the hands of the assessee and M/s IQCIPL (since merged into the appellant company) - addition had referred to the statements of so-called entry operators recorded by different officers of Income-tax Department between the years 2013 to 2015 - HELD THAT:- Third party statements referred by the AO to justify additions without being tested by cross examination cannot be the basis for making addition u/s 68 69C both in the case of M/s. IQCIPL and the appellant/assessee and we hold that these statements with the legal infirmities pointed out does not constitute as an incriminating material unearthed in the course of search conducted upon the assessee and in that view of the matter, the aforesaid additions made by the AO were unsustainable in law and on facts. Addition of cash payments made towards professional fees and purchases - HELD THAT:- Seized documents referred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions holding that the theory of extrapolation cannot be applied on mere theoretical or hypothetical basis in absence of any incriminating corroborative evidence or material brought on record by the AO to warrant the same. Unsecured loans and interest paid thereon u/s 68 69C - HELD THAT:- We note that no addition u/s 68 of the Act in respect of the loans brought forward from the earlier years was made in the past assessments. In the circumstances therefore we find that if in the past assessments, the Revenue did not draw adverse inference in respect of the principal loan amounts received from these 27 parties, then there was no apparent reason for the AO to dispute and disbelieve the genuineness of the transaction involving only the interest payment. We also note that in respect of interest paid during the relevant year, the appellant had complied with relevant provisions of Section 194A of the Act [TDS] and necessary evidence in respect thereof was also furnished. In the circumstances we find that in respect of payment of interest to these 27 parties, provisions of Section 69C of the Act had no application. Accordingly the addition made u/s 69C is hereby deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be termed perverse and is a plausible view for the reason that the AO has assumed facts from a perusal of MSL-8 page 15 that the assessee has received sale consideration ₹ 10 lacs from Manoj Rathi in respect of Swarnamani project. We note that the AO has not made any attempt to summon Shri Manoj Rathi and confront him with MSL-8 page 15 and recorded his statement as to whether he has given ₹ 10 lacs to assessee on 21.06.2016 for the servant quarter in the said Swarnamani project. In the absence of any enquiry whatsoever, the hand written parchi/loose sheet cannot be the basis for the assumption of adverse facts against the assessee and, therefore, the Ld. CIT(A) rightly deleted the addition and, therefore, we confirm the action of the Ld. CIT(A). - I.T (SS).A. No.58/Kol/2019, 75/Kol/2019, 59/Kol/2019, 60/Kol/2019, 76/Kol/2019, 61/Kol/2019, 77/Kol/2019, 62/Kol/2019, 78/Kol/2019 (Assessment Year: 2013-18) - - - Dated:- 6-8-2020 - Shri P.M. Jagtap, Hon. V.P And Shri A. T. Varkey, Hon. JM For the Appellant/Assessee: Shri S.K. Tulsiyan, Advocate, Miss BhoomisaVerma And Mrs. Ananya Rath, Advocates, ld. ARs For the Respondent: Shri. Jamir, CIT, ld.DR And Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash credit u/s 68[loan] 39,73,50,000 19,14,00,000 6,22,00,000 2,55,00,000 67,50,000 Unexplained interest expenditure u/s 69C 3,20,13,463 4,85,22,497 2,98,16,765 1,09,91,452 1,33,74,308 Unexplained cash credit u/s 68[loan] [in the hands of IQ C Infrastructure Pvt Ltd (since merged with Mani Square Ltd] 2,15,00,000 - 60,00,000 - - Unexplained interest expenditure u/s 69C [in the hands of IQ C Infrastructure Pvt Ltd (since merged with Mani Square Ltd] 25,76,219 22,68,000 - - - Cash Purchases [Proloy Mandal Satyendra Singh etc.] 15,07,993 14,37,690 15,31,380 14,55,893 - Delayed payment of EPF ESI u/s 36(1)(va) - 5,59,622 6,41,059 25,57,784 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized during the course search and seizure operation (ID Marked RB-12) conducted at the premises of AmbicaDhatu Group on 22.09.2015, it was found that ₹ 4.82 croresapprox was paid to 'Mani Group' in 'Otherwise' (Cash) against sale of flat in Second Floor of the said project and car parks by Sat yam Bubna (HUF). From the said seized documents, it was found that the cash consideration paid by Satyam Bubna (HUF) was: For sale of Flats ₹ 7,000/- per square fee(₹ 15,000 ₹ 8,000) For sale of Car Parking ₹ 6,00,000/- per car park) (₹ 9,00,000 ₹ 3,00,000) The relevant extracts of the said RB-12 is reproduced below: From the above it is seen that the total consideration for sale of Flat in Second floor of Shiromani Project and 4 car parks is ₹ 10,40,25,000/- (total sales consideration for sale of flat and terrace totaling to 6,695 sq. ft. @ ₹ 15, 000/- per sq. ft. plus 4 car parks @₹ 9, 00, 0001 - per car park) Out of the said total sale consideration ₹ 4,81,38, 000/- was paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Less: a)deposit 3,34,750 b) Legal Charges1,68,540 5,03,290 67,34,752 Thus, the above solidifies the fact of payment of cash consideration (referred as 'Otherwise' in the extracts above) to Mani Square Limited for purchase of fiat and car parks in Shiromani Project. Further, it is also noteworthy that the above calculations were though found from the premises of Ambica Dhatu Group, They have been prepared by Mani Square Limited only. The same is evident from the following two observations: The amount of ₹ 4,81,38,000/- have been as 'received till date;. Since M/ s. Satyam Bubna (HUF) is the buyer, had he been preparing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 per car park Agreement Rate of Car Park ₹ 9,00,000 per car park Cash Component for Car Park ₹ 6,00,000 per car park No. of Car Parks Per Flat 4 nos. Cash Component of Car Park for sale of each Flat ₹ 24,00,000/- ( 4 car parks * ₹ 6,00,000 per car park) Computation of ON MONEY (Cash Consideration) for sale of Flats Particulars Details No.of Flats Sold in AY 2013-14 12 Nos. Total Sales Consideration (including consideration for car parks) received as per agreement rate ₹ 52,08,57,725/- Less: Consideration of Car Parks ( as per Agreement Rate) (₹ 1,44,00,000) ( 4 car parks * ₹ 3,00,000 per car park * 12 Nos. Net Consideration ( as per agreement rate) for sale of flats ₹ 50,64,57,725/- (₹ 52,08,57,725 ₹ 1,44,00,000) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/ -. It also specifies substantial amount of ₹ 4,81,38,000/ on receipt in otherwise mode (cash mode). Therefore, the finding of the A.O that the assessee has received an amount of ₹ 4,81,38,000 on sale of flats inShiromani project is correct. It is also seen from the RB-12 Page-2 hat Mani Square Ltd. is also charging interest on the overdue amount. This also shows that these papers relate to sale of flat by Mani Square Ltd to Sat yam Bubna, HUF. I also agree with the observation of the A.O. that in view of the noting like received till date, short fall ,deficit etc. indicates that these papers were prepared by Mani Square Ltd. and sent to Sat yam Bubna, HUF for payments follow up(AO page -6). Regarding the point of the assessee that third party document cannot be used to foist liability on the assessee, it may be pointed out that income tax proceedings are in the nature of civil proceedings and therefore, what is required is preponderance of probability and not proof beyond doubt. The noting details which were seized from search in the case of clearly indicates that the assessee has received cash on sale of flats. Regarding the assessee's statement that Mr. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing project completion method for Shiromani Project. However, the addition made on the basis of exploration amounting to ₹ 47,20,09,864/- cannot be sustained. Therefore, ground no. 3 is partly allowed. 6. The AO in his impugned order further referred to the document printed from the seized hard disk ID marked, SVPL-PD-1-33A, Canal Circular Road-File No.F-Loan.xls-Cash which according to AO showed that the assessee had received loan of ₹ 75.99 crores from more than 50 parties on different dates. The AO also referred to the documents seized and ID marked MSL/8 Pages 23 24 which according to him were acknowledgment slips of cash loans. However, the AO thereafter acknowledged the fact that the notings found in SVPL-PD-1-33A, Canal Circular Road-File No.F-Loan.xls- Cash had already been considered in the preceding search and offered to tax by the assessee before the Income-Tax Settlement Commission,[in short ITSC] Kolkata. The AO further observed that the documents seized and ID marked MSL/8 Pages 23 24 were duly covered under Income Disclosure Scheme, 2016 (in short IDS scheme 2016). The AO accordingly did not draw any adverse inference with reference to these s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 15,07,993/- by way of unaccounted transactions of the assessee. On appeal, the Ld. CIT(A) held the disallowance to be unsustainable on three grounds viz., (a) the addition was made without confronting the assessee which was against the principles of natural justice, (b) since addition/s by way of unaccounted receipt were confirmed then the assessee was entitled to benefit of telescoping these unaccounted expenses and (c) the assessee had duly substantiated that these entries were recorded in the books of accounts and that these expenses were disbursed/paid in cash through assessee s own staff, namely Shri Proloy Mondal and Shri Satyendra Singh and not to these persons. 8. It is further noted that the AO had separately framed the income-tax assessment u/s 153A/143(3) dated 31.12.2018 of M/s IQ City Infrastructure Pvt Ltd. (hereinafter referred to as M/s. IQCIPL ) which, according to AO, stood amalgamated with the appellant/assessee vide order of the Hon ble Calcutta High Court dated 12.12.2016. The Ld. AR however pointed out that M/s IQCIPL stood amalgamated with the appellant/assessee on 06.03.2017. He further submitted that although the Department was inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That, the impugned additions/disallowances made by the Ld. A.O., and sustained by the Ld.CIT(A) are bereft of jurisdiction and bad in law, since no such incriminating material has been found/discovered during the course of the Search and Seizure operations dt.22.06.2016 conducted at the business premises of the Assessee to warrant the reopening of a concluded assessment, and making/sustaining the subsequent impugned additions/disallowances under assessments concluded u/s 153A of the I.T.Act,1961. 3. That, the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition made vis- -vis the sale of flat and car park(s) in the Shiromani Project on the alleged basis of cash consideration having been received by the Assessee against the sale of flat and car park(s) to Satyam Bubna (HUF). 4. That, the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition made vis- -vis the sale of flat and car park(s) in the Shiromani Project, by erroneously placing reliance on the documents seized during the course of the third party search dt. 22.09.2015 conducted at the business premises of the Ambica Datu Group, and the third party st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned addition u/s 68 by erroneously relying on borrowed satisfaction to assume and presume the existence on an alleged modus operandi, the principle of preponderance of probabilities, surrounding circumstances and human conduct to hold that the Assessee has not discharged his burden of proof under law, in spite of that fact that both the lower authorities have not once doubted and/or rebutted the material/evidences brought on record by the assessee, that effectively meet the ingredients of Sec.68 (i.e., identity, geniuses and creditworthiness) and which thereby result in the discharging of the Assessee s burden of proof. 10. That the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition u/s 69C with respect to the disallowance of interest on such unsecured loans in an unwarranted, whimsical and arbitrary manner, purely on the basis of surmises and conjectures. 11. That the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition u/s 69C with respect to the disallowance of interest on such unsecured loans in complete ignorance of the fact that the addition u/s 69C was unwarranted since the payment of interest was out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A of the I.T Act for AY 2013-14 as well as raising three separate demand u/s 156 of the I.T Act, for M/s Mani Square Ltd., for M/s IQ City Infrastructure Pvt. Ltd. in spite of the fact that M/s IQ City Infrastructure Pvt. Ltd. stood merged/amalgamated with M/s Mani Square Ltd. vide Order dt. 06.03.2017 passed by Hon'ble Calcutta High Court (respectively), therefore rendering their existence as nonexistent in Law. 3) That the Ld. A.O has erred in computing a separate total income for the amalgamating/merging entity, i.e., M/s IQ City Infrastructure Pvt. Ltd. and the amalgamated/merged entity (M/s Mani Square Ltd.) in complete ignorance of the fact and law that upon the merger/amalgamation of the Appellant with M/s Mani Square Ltd. vide Order dt. 06.03.2017 of the Hon'ble Calcutta High Court, only one such total income ought to have been computed as per the provisions of the Income Tax Act, 1961 in the name of the merged/amalgamated entity, i.e., M/s Mani Square Ltd. 11. It is noted that the above additional grounds have been raised for the first time before this Tribunal. We note that the issue involved in these additional grounds is purely legal in nature. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We note in light of the facts narrated in the preceding paragraphs, it is noted that on the date of search i.e. 22-06-2016, income tax assessment for AY 2013-14 both in the matters of the appellant as well as M/s IQCIPL was unabated. We note that the provisions of Section 153A of the Act, forms part of Chapter XIV of the Act contain special provisions for completing assessments in case of search conducted u/s 132 of the Act or requisition made u/s 132A of the Act. These provisions can be invoked only in cases where the Income-tax Department has exercised its extra ordinary powers of conducting search and seizure operations after complying with stringent pre-conditions prescribed in Section 132 of the Act. We do not deny the ld. CIT, DR's contention that once a search u/s 132 is conducted against a person, then irrespective whether any incriminating material is found, the AO is required to proceed against such person for completing the assessments u/s 153A of the Act for the specified six assessment years. To this extent, there is no quarrel. However we find that Section 153A itself creates the fine distinction/differentiation amongst specified six assessment years depending w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as under:- 37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the Ld AOs as a fresh exercise. The Ld AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The Ld AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . Although Section 153A does not say that addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT vs Murli Agro Products Ltd reported in (2014) 49 taxmann.com 172 (Bom HC) ; CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd reported in (2015) 374 ITR 645 (Bom HC) and All Cargo Global Logistics Ltd vs DCIT reported in (2012) 137 ITD 287 (Mum ITAT) (SB). We also find that Revenue s SLP against the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla (Supra) was dismissed by the Hon'ble Apex Court which is reported in 380 ITR (St.) 4 (SC). 15. We also find that the Hon'ble Jurisdictional High Court in the case of Principal CIT vs M/s Salasar Stock Broking Ltd in G.A.No. 1929 of 2016 ITAT No. 264 of 2016 dated 24.8.2016 endorsed the aforesaid view of Hon'ble Delhi High Court in Kabul Chawla's case. The Hon ble High Court also placed reliance on their own decision in the case of CIT vs Veerprabhu Marketing Ltd reported in (2016) 73 taxmann.com 149 (Cal HC) and held as follows: Subject matter of challenge is a judgement and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No.1775/Kol/2012 and allowed a cross-objection registered as CO-30/Kol/2013 both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl No. Document Found From Relatable Addition (I) RB/12 Pages 2,3,6 7 Ambica Dhatu Group Unaccounted on-monies on sale of flat to Mr. Bubna ₹ 4,81,38,000/- (II) MSL/23 Pages 1 to 3, MSL/8 Page 13, SJ/MHD/MZ Page 2 and MSL/21 Page 32 to 36 Appellant Extrapolation of unaccounted sales w.r.t other flats and car parks sold in Shiromani Project - ₹ 42,38,71,864/- (III) Third Party Statements recorded in 2013-2015 Obtained from public domain of the Department Additions u/s 68 69C of the Act ₹ 42,93,63,463/- [Appellant] and ₹ 2,40,76,219/- [IQ Infrastructure Pvt Ltd] (IV) MSL/HD/1 Appellant Cash payments in excess of ₹ 20,000 ₹ 15,07,993/- 18. Before we proceed to examine the contents of the seized documents referred to by the AO, it is first relevant to understand as to the meaning of the expression incriminatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the tax authorities in the books regularly maintained or the returns filed with the authorities from time to time is not true etc. The nature of the evidence or information gathered during the search should be of such nature that it should not merely raise doubt or suspicion but should be of such nature which would prima facie show that the real and true nature of transaction between the parties is something different from the one recorded in the books or documents maintained in ordinary course of business. In some instances, the information, document or evidence gathered in the course of search, may raise serious doubts or suspicion in relation to transaction reflected in regular books or documents maintained in the ordinary course of business, then in such event the AO is not permitted to straightaway treat such material as incriminating in nature unless the AO thereafter brings on record further corroborative material or evidence to transform his suspicion to belief and conclude that the transaction reflected in regular books or documents did not represent the true state of affairs and rather that can be the starting point of inquiry to un-earth further material or evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or arrangement had been entered into. He pointed out that there was also no specific noting of any cash payment made to the assessee in these documents. It was thus claimed that the rough notings found on loose papers seized from a third party premises did not in any manner incriminate the assessee let alone suggest that the assessee was in receipt of on-monies (cash). The Ld. AR took us through Pages 6 7 of RB/12 which was the letter of possession issued by the assessee to M/s Satyam Bubna (HUF) informing that vacant possession of the flat purchased by him was being handed over. It was thus claimed by the Ld AR that neither the contents of these papers were incriminating nor it even remotely suggested any receipt of cash/on-monies from third party M/s Satyam Bubna (HUF). Further the Ld. AR also took us through the statement given by Shri Satyam Bubna u/s 132(4) of the Act wherein he had explained the contents of the document ID Marked RB/12 found from his premises in the course of search. The Ld. AR pointed out that Mr. Bubna himself had stated that this bunch of documents comprised of loose papers which had rough calculations having no bearing on the actual transaction with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r resorted to against the assessee. Thus according to Ld AR, the AO was legally unjustified in making addition in proceedings u/s 153A of the Act on the basis of the third party seized documents since it did not constitute incriminating material found/unearthed in the course of search at the premises of the assessee. Per contra, the Ld. CIT, DR Shri Jamir ably supported by Ld. Addl. CIT, DR Smt. Ranu Biswas vehemently supported the order of the lower authorities and submitted that the AO has reproduced in the assessment order itself all the materials on the basis of which only addition has been made and accordingly he wants us to uphold the action of the AO. 20. Having heard both the parties at length and after giving our thoughtful consideration to the submissions of rival parties and after careful examination of the material on record, it is noted that the Pages 2 3 of the document ID Marked RB/12 are un-earthed from third party premises and nine (9) months before search took place in assessee s premises. And these are loose sheets of paper which neither contained the name of the assessee nor any mention of its project. Further the document also does not suggest that this do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en registered as per the valuation made by the Registrar of Assurance on 27/6/2014 by paying stamp duty.[Emphasis given by us] 21. On perusal of the above statement recorded, it is noted that Shri Satyam Bubna, from whose premise these documents were found on 22-09-2015, had on oath stated u/s 132(4) of the Act that these documents were merely rough calculations prepared by him and did not form part of actual transaction. He also stated that all the payments were made to the assessee through account payee cheques and no cash transactions were made by him. The aforesaid statement given by Shri Satyam Bubna u/s 132(4) of the Act has evidentiary value and strengthens the assessee s case that the Pages 2 3 of the document ID Marked RB/12 relied upon by the AO to justify the impugned addition were merely rough notings which was just an estimate and it cannot be a cogent basis to draw adverse inference against the appellant. We further note that the assessee had raised an RTI query dated 02.03.2020 with the information officer of the Income Tax Department wherein the following questions were raised in relation to the income-tax assessment of M/s Satyam Bubna HUF (third party): ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of search conducted on a different person i.e. Ambica Dhatu Group and not the assessee; and therefore this document did not constitute incriminating material found in the course of search at the premises of the assessee, based on which any addition could be validly made in assessment u/s 153A of the Act. In this regard, we may gainfully refer to the Hon ble Delhi High Court in the case of Pr. CIT vs Subhash Khattar in ITA No. 60 of 2017 dated 25.07.2017 wherein the Hon ble Court, on similar facts, held that, no addition is permissible in an unabated assessment u/s 153A of the Act on the basis of evidence gathered in the course of search conducted against other third parties. The relevant facts involved in this judgment and the findings of the Hon ble High Court are as follows: 3. The facts leading to the filing of the present appeal are that a search took place on 17th August, 2011 in the corporate office of AEZ Group at 301-303, Bakshi House, Nehru Place, New Delhi during which a hard disc was found and seized from which, a print out of a file named D.P. Correction Sheet.xls was taken. This sheet contained details of Sales Status of lndirapuram Habitant Centre and at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017. In the decided cases also an independent search was conducted on 23.12.2014 in the business premises of M/s. Cygnus Equipment Rentals Pvt Ltd and other companies. In the course of search documents having identification marks CG/1 to CG/11 CG/HD/1 were seized and impounded. On the same date, another independent search u/s 132 on the assessee was conducted and in course thereof documents ID marked KKS/1 was found and seized. Consequent to the search, proceedings u/s 153A was initiated against the assessee. In the assessment framed u/s 153A, the AO made addition/s relying on the documents ID marked CG/1 to CG/11 CG/HD/1 found in the course of search upon Cygnus Group. On appeal the Ld. AR of the assessee objected to the validity of the addition/s. The relevant submissions made by the Ld. AR before this Tribunal were as follows: He reiterated the submissions made before the lower authorities with regard to framing of additions in section 153A assessments without any incriminating material found thereon. He further stated that the only seized document found in the assessee s premises was KKS / 1 comprising of 8 pages and the explanation given thereon explaining its conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her person (i.e the person to whom the said documents actually belong to) in terms of section 153C of the Act by recording satisfaction to that effect by way of transfer of those materials to the AO assessing the such other person. This is the mandate provided in section 153C of the Act. In the instant case, if at all, the seized documents referred to in CG/1 to 11 and CG/HD/1 is stated to be belonging to assessee herein, then the only legal recourse available to the department is to proceed on the assessee herein in terms of section 153C of the Act. In this regard, we would like to place reliance on the recent decision of the Hon ble Delhi High Court in the case of CIT vs Pinaki Misra and Sangeeta Misra reported in (2017) 392 ITR 347 (Del) dated 3.3.2017, wherein it was held that, no addition could be made on the basis of evidence gathered from extraneous source and on the basis of statement or document received subsequent to search. Hence we hold that the said materials cannot be used in section 153A of the Act against the assessee. 27. In this regard, we may also refer to the following observations made by the Ranchi Bench of this Tribunal in the case of Rajat Minerals (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejudice, a reference was made to the incriminating documents 'CMB-24' in the remand report is admittedly seized from the possession of other searched person namely 'Core Minerals' at Barbil. Seized documents marked as 'AK-01' was admittedly seized from 'Padam Kumar Jain'. Document marked (CMB-1) was seized from 'Core Minerals'. Documents bearing identification mark 'UKD-1' was also seized from third party which is unknown and no reference to such documents are found in the 'list of inventories' prepared at the time of search. No reference of such documents is also found in the statement recorded under s.132(4) of the Act. It was contended that alleged incriminating nature of information against the assessee as contented in TEP dated 21.11.2016 was obtained post search at a very belated stage after time limit for assessment in relation to AYs. 2009-10, 2010-11, 2011- 12 2012-13 stood expired and thus remained unabated and achieved finality. It was however fairly conceded that assessments for AYs. 2013-14; 2014-15 2015-16 were pending assessment at the time of search and therefore normal assessments under s.153A r.w.s. 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be made on the basis of these papers. 5.6.Seized document MSL/21, Page-32, 33, 34, 35 36- These pages also indicate receipt of cash in some other project of Mani Group. However, this does not relate to Shiromani Project or any other project under Mani Square Ltd. Therefore, these papers will not be of much use in the assessment of Mani Square Ltd. 30. The Ld. AR pointed out that the Revenue has not raised any grievance/grounds against the above findings of the Ld. CIT(A) in its appeal and therefore contended that these findings of fact by the Ld. CIT(A) have attained finality. At the time of hearing before us, neither the Ld. CIT DR was able to controvert this contention of the Ld. AR nor the grounds of appeal preferred by the revenue assails the aforesaid finding of fact by the Ld CIT(A). Therefore we find that the aforesaid factual finding of the Ld. CIT(A) crystallizes and therefore we do not see any reason to interfere with the order of the Ld. CIT(A) on this matter and confirm the finding of Ld. CIT(A) (supra) and accordingly hold that the documents ID marked MSL/23 Pages 1 to 3, MSL/8 Page 13, SJ/MHD/MZ Page 2 and MSL/21 Page 32 to 36 also did not cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee/IQCIPL/Appellant. It has to be kept in mind that wide though his power, the AO must act in consonance with the rules of Natural Justice. One such rule is that he shall not use any material against the assessee without giving him an opportunity to meet it. In short, the AO cannot assess keeping the assessee in dark as to the materials against him. And even after the material/statement is furnished to the assessee, and the assessee contest the veracity of the statement against him, then the AO is bound to give an opportunity to the assessee to test the veracity of the statement on the touch stone of cross examination and thereafter only the AO can rely on the statement or else he cannot be allowed to rely on the statement of the third party against the assessee. (Refer Hon ble Supreme Court decision in Andaman Timber Industries in Civil Appeal No. 4228 of 2006). In the circumstances we find merit in the Ld. AR s claim that the third party statements relied upon by the AO without even recording their statement and allowing the assessee to cross examine, cannot justify the additions u/s 68 69C and the statements cannot be said to be incriminating material or documents f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or making addition u/s l53A of the Act, which is absent in the assessee`s case under consideration. Therefore, according to the well settled principles of law, that is, in absence of any incriminating material, making additions to the assessee's income already assessed u/s 143(3)/153A/ 143(1) of the Act for unabated years, is not only without jurisdiction but also erroneous. Therefore, addition made by AO under section 68 of the Act, to the tune of ₹ 50,00,000/- is not sustainable in law and may be deleted. 8. On the other hand, ld DR for the Revenue, furnished before the Bench, a copy of written submissions and paper book. The written submissions of ld DR is reproduced below: 1.The assessee is a limited company engaged in textile business. It is one of the group companies of Banktesh Group. 2.A search and seizure operation was conducted in the case of Banktesh Group on 29/05/2012 and the assessee company was covered in the search warrant. 3.Thereafter again on 02/03/2016 a search and seizure operation was conducted in the case of Banktesh Group and the assessee company's name was covered in the search warrant. IT SS) A No. 142/Kol/2018 A.Y 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of accommodation entries. (8) The accommodation entry provider (AEP) Mr. Bhagwan Das Agarwal in multiple statement recorded u/s 131, 133(1), 132(4) and 132(3) read with 132(4). On IT SS) A No. 142/Kol/2018 A.Y 2010-11 M/s. Banktesh Synthetics Ltd 10/012014 has replied to question no.8, Please state the name of companies managed / operated by you and also state who are the directors in these companies : Ans: as far as my knowledge is concerned, I am having control of few companies, such as West Well Tie up Pvt. Ltd, Well Plan Tie up Pvt. Ltd, Malinath Tradecon Pvt. Ltd, And also names Shantanu Bose (DIN 01116428), Dinesh Kumar Patwari (DIN 00511386), Loknath Sen (DIN 01363525). 9. We have heard both the parties and perused the material available on record, we note that the original return of income under section 139 (1) of the Act was submitted by the assessee company on 12.10.2010. The said Return of income of the assessee was processed under section 143(1) of the Income Tax Act, 1961, on 14.04.2011. Before us, the assessee is in appeal for assessment year 2010-11, which was completed on 14.04.2011. We note that after completion of original assessment dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018. In the decided case also additions were made by the AO u/s 68 of the Act referring to statements of alleged entry operators in the unabated assessments which were completed u/s 153A of the Act. On appeal this Tribunal held that the third party statements by themselves do not constitute incriminating material found in the course of search upon the assessee and therefore deleted the additions made u/s 68 of the Act by the AO. The relevant findings of the Tribunal are as follows: 8. We have heard the rival submissions. We find it would be necessary to address the preliminary issue of whether the addition could be framed u/s 153A of the Act in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search. At the outset, it is evident from the categorical findings of the ld CITA that there is absolutely no incriminating materials found during the course of search regarding the share capital and share premium received by the assessee company during the year under appeal except the fact that the modus operandi of raising of such capital was discovered in the search action. We find that the ld CITA was only harping on the adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be made merely by placing reliance on the statement recorded during search. 34. Following the judicial view endorsed by the coordinate Benches of this Tribunal, we therefore hold that the third party statements referred by the AO to justify additions of ₹ 41,88,50,000/- [ 39,73,50,000 + 2,15,00,000] ₹ 3,45,89,682/- [3,20,13,463 + 25,76,219] without being tested by cross examination cannot be the basis for making addition u/s 68 69C of the Act both in the case of M/s. IQCIPL and the appellant/assessee and we hold that these statements with the legal infirmities pointed out does not constitute as an incriminating material unearthed in the course of search conducted upon the assessee and in that view of the matter, the aforesaid additions made by the AO were unsustainable in law and on facts. 35. Now coming to the last material i.e. MSL/HD/1 referred to by the AO for justifying the disallowance of ₹ 15,07,993/- in respect of cash payments made to Mr. Proloy Mondal and Mr. Satyendra Singh towards professional fees and purchases respectively. The Ld. AR of the assessee invited our attention to the fact that Mr. Proloy Mondal and Mr. Satyendra Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of all units and car parks sold in the Shiromani Project ? We have already held in Paras 19 to 23 above, the document ID Marked RB/12, relied upon by the lower authorities to justify the addition of ₹ 4,81,38,000/- on account of onmonies received in cash upon sale of flat car park by the assessee to M/s Satyam Bubna HUF, were mere loose sheets of paper which cannot be construed as an incriminating material qua the appellant/assessee relating to Shiromani Project. As noted earlier, the documents seized from third party neither contained the name of the appellant/assessee nor any mention of the appellant s project nor did it suggest that the seized document was prepared at the instance of the appellant/assessee. There is also no mention of any cash payment by M/s Satyam Bubna (HUF) to the appellant/assessee. Moreover the notings in this document based on which the AO inferred payment of onmonies of ₹ 4,81,38,000/- is dated 2010 [year] and therefore we found that no adverse inference could have been legally drawn qua the relevant AY 2013-14 under consideration. It was further noted that Shri Satyam Bubna, from whose premises the documents were seized, had d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which substantiated that the entire sale consideration was received upon sale of flat car park to M/s Satyam Bubna HUF was through proper banking channel. We accordingly do not find merit in the Ld. CIT(A) s action of confirming the addition of ₹ 4,81,38,000/- by way of alleged on-monies/cash received upon sale of flat car park to M/s Satyam Bubna HUF u/s 68 of the Act. The AO is accordingly directed to delete the same. Ground Nos. 2 to 5 of the assessee s appeal therefore stand allowed in its favour and against the Revenue. 38. As a consequence of the above finding, the Revenue s ground No. 1, against the Ld. CIT(A) s action of deleting the addition of ₹ 42,38,71,864/- made by the AO u/s 68 of the Act, by extrapolating unaccounted sales across all units sold by the appellant in Shiromani Project, on the basis of the addition made on account of on-monies alleged to have been received from M/s Satyam Bubna HUF, have no legs to stand and has to necessary fall. Moreover we note that the AO had made independent enquiries from all the flat purchasers in the Shiromani Project and despite such enquiries, the AO did not find any statement/material or transaction which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year of receipt, since books of account were rejected by AO. As against the order of CIT(A), assessee contended that disputed seized document RM/5 was forcibly manufactured by the search party at the time of search and entire alleged on-money receipt of ₹ 9.02 crores mentioned in RM/5 in respect of few flats in these three projects was however offered in entirety by assessee as its income for asst. yr. 2008-09 solely to buy peace and avoid unnecessary dispute. According to assessee, no other evidence, whether documentary or circumstantial, pertaining to receipt of on-money for other flats in these three projects or other projects were found in course of search or survey operation and AO was thus completely unjustified in extrapolating on-money to the balance flats in these three projects merely on the basis of disputed seized loose papers and making an exorbitant addition of ₹ 64.83 crores on the basis of surmises and conjectures. However, assessee contended that CIT(A) was correct to the extent of holding that assessee was regularly following project completion method of accounting and these three projects were incomplete till asst. yr. 2008-09, no receipt, whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no incriminating evidence pertaining thereto was found in course of search more so when the authenticity of the subject seized documents, RM/5 was itself challenged by assessee. Since it was presumed by us that assessee was bound by presumption under s. 292C in respect of seized paper RM/5, additions on account of alleged on-money could at best be limited to the seized materials and since assessee had suo motu offered entire on-money in its return of income, no further addition on this count was warranted. We find that Hon'ble Courts and Tribunals have time and again held that assessments cannot be framed merely on extrapolation theory i.e. discrepancies in respect of items must have existed in other years or other instances or projects unless a definite trend of malpractice is conclusively proved by substantial evidence on record Therefore, we agree with the findings of CIT(A) that assessee was following project completion method of accounting, therefore all the amounts whether allegedly received in cash or by cheque were taxable in the years in which the projects were completed. In regard to extrapolating of noting in RM/5, the same cannot be applied to other projects, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt documents are not forthcoming. However, Hon'ble High Court observed that it does not mean that the AO can arrive at any figure without any basis by adopting any arbitrary method of calculation. 9. We find that even Hon'ble Apex Court in Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 laid down principle regarding estimation that while making assessment under s. 23(3) of the IT Act 1922, the ITO is not fettered by technical rules of evidence and pleadings, and he is entitled to act on material which may not be accepted as evidence in a Court of law, but he is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support assessment under s. 23(3). Hon'ble apex Court on facts of the case held that both ITO and Tribunal in estimating the GP rate on sales of the assessee did not act on any material but acted on pure guess and suspicion and therefore it was a fit case for the exercise of the power of the Supreme Court under Art. 136 of the Constitution of India. 10. In the present case before us, we find that assessee was following project comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remotely possible on money receipt on sale of flats, separate addition over and above which is volunteered not plausible. The Revenue, on the other hand, seeks to contend that quantification of on-money receipt actually works out to ₹ 5,28,13,355/- and therefore addition of ₹ 3,28,13,355/- over and above ₹ 2 Crore declared is fully justified. In the course of search conducted under s.132 of the Act, the partners of the assessee are stated to have voluntarily disclosed an amount of ₹ 25 Crore in aggregate as undisclosed income for and on behalf of the Savaliya Group concerns for F.Y. 2010-11 relevant to AY 2011-12. The disclosure of ₹ 2 Crore out of aggregate disclosure of ₹ 25 Crores pertains to the assessee firm herein. It appears that after the post search inquiry, two of the purchasers of the residential flats in the housing projects of the assessee have confessed to have given ₹ 9Lakhs and ₹ 5.10 Lakhs to assessee in a statement recorded under s.131 of the Act. The AO on the basis of such statements at its command, proceeded to make estimation of probable unaccounted receipt from sale of residential flats in respect of all the fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice has thus vitiated the order of the AO to the core. The legitimate expectation of the assessee to seek cross examination of a person making adverse comments against the assessee to enable it to traverse the assertions cannot be shunned in sub-version of judicial propriety while weighing an issue. The right to fair hearing is a guaranteed right. Every person affected by the statement of third party has indispensible right to know the evidence used against him. The AO as well as the CIT(A) has violated this cardinal principle as squarely underscored in Kishanchand Chellaram vs. CIT 125 ITR 713 (SC) and host of other decisions. Apart from a bald statement of third party loaded against the assessee which was never confronted, the Revenue has not adduced any material which could expose the falsehood in the records of the assessee despite drastic action of search. Therefore, we are unable to subscribe to the view taken by the AO for exercise of the power in a manner most beneficial to the Revenue and consequently most adverse to the assessee in total disregard of fairness in its action. From its submissions before lower authorities, the assessee has clearly demonstrated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT (Appeals) in respect of the scrap sales which has been challenged by the Department, it is seen that the Ld. CIT (Appeals) has accepted the assessee s contention that the impugned addition had been made by the assessing officer on an estimate and that the same was not based on any evidence that was found during the course of search proceedings. While allowing the relief, the Ld. CIT (Appeals) has also accepted the assessee s reliance on the judgment of the Hon ble Delhi High Court in the case of Kulwant Rai reported in 291 ITR 36 (DEL). Although the Ld. CIT DR has contested the deletion of addition by the Ld. CIT (Appeals), she could not point out any legal infirmity or factual infirmity on this adjudication by the Ld. CIT (Appeals). The Department also could not point out any judgment to the contrary and in favour of the Department in this regard. It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment of the Hon ble Delhi High Court in the case of Principal CIT versus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents to prove the identity, genuineness and creditworthiness of the unsecured loans taken. a. The PAN No. Addresses and MCA details of ALL the creditors in question ( for identity) b. The financial statements of all the unsecured loan creditors ( for creditworthiness) c. The Ledger copies in the Assessee s books of accounts evidencing the receipt and the repayment of the loans and interest ( for genuineness) d. Bank statement evidencing that payment has been made via banking channels ( for genuineness) e. Confirmation of Loans from all the parties from whom the said unsecured loans stood taken during the year ( for genuineness) f. TDS certificates showing such TDS deduction on the interest paid against such unsecured loan creditors by the Assessee ( for genuineness) 42. The Ld. AR submitted that (a) the identity of loan creditor stood established by the very fact that the names, addresses of the lenders, PAN numbers, bank details and confirmatory letters were filed before both the lower authorities, (b) creditworthiness stood proved by the financial statements, bank details and payment by account payee cheques and (c) the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in AYs 2005-06 2012-13 were common in the relevant AY 2013-14 and/or subsequent years. The Ld. AR contended that when these common loan creditors had been accepted to be genuine in the earlier years by the ITSC, Kolkata, then it was no longer open for the Revenue to keep on doubting their identity or creditworthiness or genuineness in the subsequent years. Per contra, the Ld. CIT, DR fully supported the order of the lower authorities. 43. Having heard both the parties and after giving thoughtful consideration to the facts of the case and upon examining the material on record, we first deem it fit to set out the details of the loan creditors, whose principal sum and interest was added by the AO u/s 68 69C of the Act. Sl No. Name of Loan Creditor Principal Interest 1 Susri Finance Pvt. Ltd. 1,00,00,000 10,70,137 2 Venkatesh Vyapaar Pvt. Ltd. 25,00,000 73,973 3 Sanwaria Marketing Pvt. Ltd. 1,50,00,000 10,99,726 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dealers Pvt. Ltd. 1,00,00,000 10,06,027 25 Starwise Tie-up Pvt. Ltd. 50,00,000 4,02,740 26 Vidyalaxmi Retails Pvt. Ltd. 50,00,000 1,93,973 27 Sharma Hire Purchase Ltd. 15,00,000 99,616 28 Panchkoti Mercantile Pvt. Ltd. 60,00,000 4,91,178 29 Lavanya Nirman Pvt. Ltd. 1,92,00,000 14,66,170 30 Kasturi Home Pvt. Ltd. 1,16,00,000 7,44,362 31 Himadri Enclave Pvt. Ltd. 15,00,000 23,671 32 Starlite Vyapaar Pvt. Ltd. - 7,58,137 33 Hector Merchants Pvt. Ltd. - 19,20,275 34 Eathlink Estates Pvt. Ltd.** 30,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough bank accounts of the creditors. Further, it is important to note that each of the loan creditors was regularly assessed to income-tax. Further, from a perusal of the financial statements of each loan creditor for the financial year 2012-13 revealed that the transaction with the appellant/assessee was duly reflected therein. Moreover, it is noted that the appellant/assessee had paid interest to each loan creditor after duly deducting tax u/s 194A of the Act and thus the appellant had also complied with provisions of the Act concerning filing of TDS returns. It is also noted that majority of these loans were arranged through finance brokers and the appellant/assessee had also paid brokerage to the tune of ₹ 1.98 crores to these finance brokers for securing the loans and in the assessment order framed against the assessee, the AO did not disallow the payment of brokerage paid for availing the services of those finance brokers for arranging the loans. 45. Moreover, from the assessment order it is discerned that the AO made independent enquiries from some of these loan creditors. From the information set out at Pages 23 to 25 of the assessment order, it is noted that sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alone cannot be the decisive fact to justify the impugned addition in the hands of the appellant, particularly when the appellant had furnished all the relevant documents which it was required to maintain in ordinary course to substantiate its loan transactions with independent third party loan providers. 47. According to Ld. AR s plea section 68 of the Act nowhere prescribes that the identity, creditworthiness and genuineness of the transaction should be proved by an assessee only by producing concerned creditors for personal examination by the AO. It is true that section 68 of the Act does not require so. However, it is insisted when there is reasonable doubt as to the identity, creditworthiness and genuineness of the transactions. Presence of creditor before the AO in such case is a Rule of Prudence to repel the doubts if any in the mind of the AO. However, in this case on hand we note that the appellant/assessee had furnished the requisite documentary evidences; to substantiate the loan creditors identity, creditworthiness and genuineness of the transactions. Having received these documents, the AO was not able to point out as to which other documentary proof was required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own that section 68 of Income-tax Act, should be read along with section 106 of Evidence Act. The relevant observations at page 260 to 262, 264 and 265 of the report are reproduced herein below:- While interpreting the meaning and scope of section 68, one has to bear in mind that normally, interpretation of a statute shall be general, in nature, subject only to such exceptions as may be logically permitted by the statute itself or by some other law connected therewith or relevant thereto. Keeping in view these fundamentals of interpretation of statutes, when we read carefully the provisions of section 68, we notice nothing in section 68 to show that the scope of the inquiry under section 68 by the Revenue Department shall remain confined to the transactions, which have taken place between the assessee and the creditor nor does the wording of section 68 indicate that section 68 does not authorize the Revenue Department to make inquiry into the source(s) of the credit and/or sub-creditor. The language employed by section 68 cannot be read to impose such limitations on the powers of the Assessing Officer. The logical conclusion, therefore, has to be, and we hold that an inquiry u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confined to the transactions, which have taken place between the assessee and the creditor. What follows, as a corollary, is that it is not the burden of the assessee to prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the assessee to prove that the sub- creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been. eventually, received by the assessee. It, therefore, further logically follows that the creditor's creditworthiness has to be Judged vis-a-vis the transactions, which have taken place between the assessee and the creditor, and it is not the business of the assessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and subcreditor and/or creditworthiness of the sub- creditors, for, these aspects may not be within the special knowledge of the assessee. ********** ... If a creditor has, by any undisclosed source, a particular amount of money in the bank, there is no limitation under the law on the part of the assessee to obtain such amount of money or part thereof from the creditor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, that the said amounts had been received by him by way of cheques from the creditors aforementioned. In fact the fact that the assessee had received the said amounts by way of cheques was not in dispute. Once the assessee had established that he had received the said amounts from the creditors aforementioned by way of cheques, the assessee must be taken to have proved that the creditor had the creditworthiness to advance the loans. Thereafter the burden had shifted to the Assessing Officer to prove the contrary. On mere failure on the part of the creditors to show that their sub-creditors had creditworthiness to advance the said loan amounts to the assessee, such failure, as a corollary, could not have been and ought not to have been, under the law, treated as the income from the undisclosed sources of the assessee himself, when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or were owned by, the assessee. Viewed from this angle, we have no hesitation in holding that in the case at hand, the Assessing Officer had failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the persons, of having advanced cash amount as against the supply of bidis. These evidence were duly considered by the Commissioner of Income-tax (Appeals). Therefore, the failure of the person to turn up pursuant to the summons issued to any witness is immaterial when the material documents made available, should have been accepted and indeed in subsequent year the same explanation was accepted by the Income-tax Officer. He further contended that when the Tribunal has relied on the entire judgment of the Commissioner of Incometax (Appeals), therefore, it was not proper to take up some portion of the judgment of the Commissioner of Income-tax (Appeals) and to ignore the other portion of the same. The judicial propriety and fairness demands that the entire judgment both favourable and unfavourable should have been considered. By not doing so the Tribunal committed grave error in law in upsetting the judgment in the order of the Commissioner of Income-tax (Appeals). 9. In this connection he has drawn our attention to a decision of the Supreme Court in the case of UdhavdasKewalram v. CIT [19671 66 ITR 462. In this judgment it is noticed that the Supreme Court as proposition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment at page 465 that if the Tribunal does not discharge the duty in the manner as above then it shall be assumed the judgment of the Tribunal suffers from manifest infirmity. 12. Taking inspiration from the Supreme Court observations we are constrained to hold in this matter that the Tribunal has not adjudicated upon the case of the assessee in the light of the evidence as found by the Commissioner of Income-tax (Appeals). We also found no single word has been spared to up set the fact finding of the Commissioner of Income-tax (Appeals) that there are materials to show the cash credit was received from various persons and supply as against cash credit also made. 13. Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Commissioner of Income-tax (Appeals). The appeal is allowed. 52. The Ld. AR s reliance on the decision of the Hon ble Gujarat High Court in the case of CIT Vs Apex Therm Packaging (P) Ltd reported in 42 taxmann.com 473 is also found to be of much relevance. In this decided case in the course of proceedings u/s 143(3) of the Act, the assessee had furnished complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 33,35,011/-. The details of which are listed at page 2 of Assessing Officer order. CIT(A) while deleting the addition has given a finding that the assessee had filed before Assessing Officer the confirmations with name, address, PAN Number, copy of ledger account, copy of balance sheet and profit and loss account, copy of Income Tax returns and computation of total income in respect of all the parties except two depositors. With respect to the two depositors, the assessee had filed confirmation, address and PAN Numbers and hence the assessee had also discharged the initial onus cast upon the assessee with respect to the two creditors. He has further noted that the loans were received through cheques and the loan account were duly reflected in the balance sheet of lenders. The CIT(A) has further held once the onus was fulfilled by the assessee, it was for the Assessing Officer to examine and bring any material on record which may help in rebutting the onus of assessee. The Assessing Officer has not brought any material on record in its support. The CIT(A) while deleting the addition has also relied on the decision of the Hon'ble Gujarat High Court in the case of Dy. CIT v. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh the order passed by the Assessing Officer, the relevant portion of which we have also extracted in para. 2 above. The Commissioner of Income-tax (Appeals) more or less confirmed the addition on the reasoning given by the Assessing Officer in the assessment order. A perusal of the chart given by us in para. 3 above indicates that out of 21 creditors the Assessing Officer has recorded the statements of only six creditors, viz., creditors at serial Nos. 1, 2, 3, 4, 6, and 7. However, in respect of all the 21 creditors the assessee has furnished their complete addresses along with GIR numbers/permanent account numbers as well as confirmations along with the copies of assessment orders passed in the cases of creditors at serial Nos. 1, 2, 4, 5, 6, 7, 9, 10, 11, 12 and 16. In the remaining cases where the assessment orders passed were not readily available, the assessee has furnished the copies of returns filed by the creditors with the Department along with their statement of income. All the loans were received by the assessee by account payee cheques and the repayments of loans have also been made by account payee cheques along with the interest in relation to those loans. It is ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee. In the case of six creditors who appeared before the Assessing Officer and whose statements were recorded by the Assessing Officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the Assessing Officer was not satisfied with the cash amount deposited by those creditors in their bank accounts, the proper course would have been to make assessments in the cases of those creditors by treating the cash deposits in their bank accounts as unexplained investments of those creditors under section 69. 8. Further, we may point out that section 68 under which the addition has been made by the Assessing Officer reads as under : 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and their source of advancing loans were other bodies corporate who had also returned miniscule taxable income in their income-tax returns. The AO therefore doubted the creditworthiness of the lenders. The AO accordingly made addition u/s 68 of the Act. On appeal the Hon ble High Court held that the onus of the assessee is 'to the extent of his proving the source through which he has received the cash credit.' The Hon ble High Court held that the AO has ample 'freedom' to make inquiry 'not only into the source of the creditor, but also of its sub-creditors; but the assessee has indeed discharged its onus of proving the creditworthiness and genuineness of the lender by furnishing the documents details which it was required to maintain in the normal course and under law and therefore the addition made u/s 68 of the Act was deleted by the Hon ble High Court. The relevant findings of the Hon ble High Court are as follows: 12. The Court has examined the decision of the Gauhati High Court in Nemi Chand Kothari (supra). Therein the Gauhati High Court referred to Section 68 of the Act and observed that the onus of the Assessee to the extent of his proving the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove the genuineness of the transactions between his creditor and sub-creditors nor is it the burden of the Assessee to prove that the sub-creditor had the creditworthiness to advance the cash credit to the creditor from whom the cash credit has been, eventually, received by the Assessee. It, therefore, further logically follows that the creditor's creditworthiness has to be judged visa- vis the transactions, which have taken place between the Assessee and the creditor, and it is not the business of the Assessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and sub-creditor and/or creditworthiness of the sub-creditors, for, these aspects may not be within the special knowledge of the Assessee. (Emphasis Supplied) 13. The above observations, far from supporting the case of the Revenue, does the opposite. In the subsequent decision of this Court in Mod. Creations (P.) Ltd. v. ITO [2013] 354 ITR 282/[2011] 202 Taxman 10 (Mag.)/13 taxmann.com. 114 (Delhi), the position was clarified by the Court and it was held: It will have to be kept in mind that Section 68 of the I.T. Act only sets up a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucted by the A.O. In any event what both the A.O. and the ITAT lost track of was that it was dealing with the assessment of the company, i.e., the recipient of the loan and not that of its directors and shareholders or that of the sub-creditors. If it had any doubts with regard to their credit worthiness, the revenue could always bring it to tax in the hands of the creditors and/or sub-creditors. [See CIT v. Divine Leasing Finance Ltd. (2008) 299 ITR 268 (Delhi) and CIT v. Lovely Exports (P.) Ltd. (2008) 216 CTR 195 (SC)]. 15. In view of the legal position explained in the above decisions, the Court holds that as far as the present case is concerned, the Assessee has indeed discharged its onus of proving the creditworthiness and genuineness of the lender (TIL). There was no requirement in law for the Assessee to prove the genuineness and creditworthiness of the sub-creditor, which is in this case was TCL. 56. In the light of the aforesaid decisions of the Hon ble Apex Court and jurisdictional and other High Courts, let us now examine the facts of the present case. From the analysis of the loan creditors we note that during the FY 2012-13, the appellant had received lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore spare black money, whereas in case o the applicant company there was shortage of funds. He further stated that it may have been possible that loans might have been provided by third parties in name of the lending parties in connivance with Mr. Kejriwal. Neither the applicant company was aware of any such thing nor was it aware of the details of lending parties since the loans were received through the brokers. Moreover, most of the loans were repaid back when in case of jamakharchi transaction, such entries of loans are carried from year to year. Moreover, the applicant company was searched and not an iota of evidence was found relating to the applicant having indulged in any jamaKharchi transaction. Further, the department did not afford the applicant company any opportunity to cross examine Mr. Kejriwal though the hearings of scrutiny assessments were held on 11 different dates. Being a tainted person Mr.Kejriwal s unilateral statement should not be relied upon without putting the same to the test of further scrutiny. (iii) During the course of hearing, it was submitted by the AR that if these are the only jama kharchi transactions, the normal tendency of any person is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct the AO to delete the disallowance u/s 69C of the Act amounting to ₹ 71,60,833/- being interest paid by the appellant on these loans. 59. During the relevant year the appellant received loan of ₹ 30,00,000/- from M/s Earthlink Estates Pvt Ltd. [Serial No.34 of the Table]. Although the loan actually received was only ₹ 30,00,000/-, in the order passed u/s 153A/143(3), the AO erroneously treated the loan amount to be ₹ 3,00,00,000/- and thereby artificially enhanced the addition u/s 68 of the Act. We note that in respect of the loan received from M/s Earthlink Estates Pvt Ltd, the appellant had furnished before the AO, the name, PAN, address, financial statements, bank details, loan confirmations and MCA data to substantiate genuineness of the loan transaction. On receipt of the relevant documents, the AO did not thereafter conduct any further verification of the documents or independent enquiry from the loan creditor. We also find that no notice u/s 131 or 133(6) of the Act was issued to M/s Earthlink Estates Pvt Ltd though the address of the creditor was made known. We also note that unlike other cases, where the AO had relied on third party stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red pursuant to the search conducted u/s 132 of the Act. 61. After careful analysis of the documents placed before us and after examining the statements of the so-called entry operators, which the AO have selectively extracted in the assessment order, we find on careful examination of these statements that neither in the sworn statements the so-called entry operators had admitted of providing accommodation entries to the appellant/assessee nor they had admitted of receiving any cash from the appellant/assessee in lieu of cheques. In fact we note that although the AO had extracted at length the statements of the entry operators, none of the specific instances, the AO was able to show any credible link between the person whose statement was relied upon and the company from whom the loans were received by the appellant/assessee. The Ld. AR has pointed out to us that the so-called entry operators were not even shareholders or directors of the loan creditor companies. We also note that although the AO had heavily relied upon the statements of the sundry creditors/entry operators, the AO had neither personally or independently examined even a single entry operator in the capacity as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh in his answer to Q No. 5, he had identified the names of fifteen (15) companies which he allegedly controlled but we find that none of the companies named by him, contain name of any of the companies from whom the assessee had received loans. The AO also did not bring on record any material which could have shown that the bank accounts of the loan creditors through which the loan amounts were disbursed were operated by Shri Anirban Dutta. We also note that even though in his statement, Shri Anirban Dutta had admitted of being engaged in providing accommodation entries yet nowhere in his statement he had identified either Shri Sanjay Jhunjhunwala or Mani Square Limited as beneficiary of accommodation entries provided by him. We also note that while recording statement u/s 131 of the Act, Shri Anirban Dutta was asked to identify the parties to whom he had provided accommodation entries in form of share capital/loans. From his answers extracted at Page 58 59 of the assessment order, we note that though he identified the groups/parties to whom he provided accommodation entries but none of the parties or groups identified inter alia included the name of Shri Sanjay Jhunjhunwala or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO had selectively extracted the contents of his statement which was recorded in some other proceedings unconnected with the appellant s search. From the contents extracted at Pages 64 to 68 of the assessment order, we note that nowhere in his statement Shri Anuj Bhukediwala had admitted that M/s Sharma Hire Purchase Limited was controlled by him. We further note that in his answer to Q No. 15 though he identified the group to whom he provided accommodation entries but the parties identified by him was neither Shri Sanjay Jhunjhunwala or Mani Square Limited. We find that the selective extracts of the statement did not contain any material whatsoever on the basis of which any prudent person instructed in law would have reached the conclusion that the loans received by the appellant from M/s Sharma Hire Purchase Limited had any connection with Shri Anuj Bhukediwala. Moreover, when the AO himself never examined the socalled entry operator or opportunity of cross examination of Shri Anuj Bhukediwala was given to the assessee, the AO erred in relying on the statement. So, we find that the addition made by the AO by relying on such statement was erroneous and, therefore, the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. So, the statement of Shri Aggarwal cannot be relied upon to draw any adverse inference. So, we find that M/s. Romanchak Merchandise Pvt. Ltd had no connection with Shri B D Agarwalwa. We also note that before the AO used statement of Shri B D Agarwal as evidence, he himself never issued notice u/s 131 or 133(6) of the Act to Shri B D Agarwal to ascertain whether he has any connection with M/s. Romanchak Merchandise Pvt. Ltd. and with the appellant/assessee and about the facts of the case, particularly when no information appearing from his statement connected the loan transactions between M/s Romanchak Merchandise Pvt Ltd and the appellant/assessee. Moreover, Shri B D Agarwal s statement was never tested on the touch stone of cross examination. Therefore, the addition made by AO on the basis of Shri B. D. Agarwal was erroneous, so it is untenable. (D) The assessee received loans aggregating to ₹ 4,67,00,000/- from M/s Lavanya Nirman Pvt. Ltd., M/s Kasturi Home Pvt. Ltd., M/s Himadri Enclave Pvt. Ltd., M/sTista Nirman Pvt. Ltd. and M/s Orbital Contractors Financiers Pvt Ltd. According to AO all the loan creditors were allegedly controlled by Shri Pankaj Agarwal whose s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have any connection with Shri Pankaj Agarwal. Moreover, when the AO himself never examined the so-called entry operator, nor gave any opportunity to assessee to cross examine Shri Pankaj Agarwal the statement cannot be relied upon against the assessee or the loan creditors and by doing so, the AO erred in his action of making addition. On the facts discussed in the foregoing we therefore find that the addition made by the AO was both factually as well as legally unsustainable. (E) The assessee received loan of ₹ 1,00,00,000/- from M/s Susri Finance Pvt Ltd, which according to AO was allegedly controlled by Shri P K Jain whose statement was recorded u/s 131 of the Act on 24-02-2014 at 88 Regent Park, Tollygunge, Kolkata 700 040. It is noted that even this statement was not recorded in pursuance of any proceedings against the assessee/appellant in connection with search u/s 132 of the Act conducted upon the appellant on 22-06-2016. It is noted from the contents of the statement selectively extracted at Pages 147 to 148 of the assessment order that he had admitted that previously he was involved in providing accommodation entries but now he was rendering accounting services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts which could have unraveled any wrong doing connecting the assessee. However, the statement on its own did not contain any material whatsoever on the basis of which any prudent person instructed in law would have reached the conclusion that the loans received by the appellant/assessee from M/s Vicky Fincon Pvt Ltd was not genuine. Moreover the AO himself never examined the so-called entry operator, nor gave an opportunity to cross examine Shri Ramesh Poddar. We therefore find that the addition made by the AO by relying on such statement was untenable on facts and in law. (G) The assessee received loan of ₹ 25,00,000/- from M/s Nagancheji Credit Pvt Ltd. According to AO this body corporate was controlled by Shri R K Ajitsaria whose statement was recorded u/s 131 of the Act on 21-05-2014 at AA/2/2, Rajarhat Road, Miranda Appt, Baguihati, Kolkata 700 059. This fact shows that the statement of Shri R K Ajitsaria was not recorded in pursuance of any proceedings conducted against the appellant/assessee in connection with search u/s 132 conducted upon the appellant on 22- 06-2016. Instead the statement of Shri R K Ajitsaria was recorded in some other proceedings unconnecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are satisfied that in none of the statements any of them had admitted of having any transactions or providing accommodation entries to the appellant nor the AO has brought on record any material to link these entry operators with the bodies corporate from whom the loans were received by the appellant. We therefore, for the facts and reasons, elaborately set out, in sub-paras (A) to (G) above, hold that the AO was unjustified in making additions u/s 68 69C of the Act based on the unsubstantiated and irrelevant statements of so-called entry operators. 63. Apart from relying on the statements of the entry operators, the AO also discredited the abilities of the loan creditors to advance loans to the appellant on the ground the financial positions revealed by the audited accounts of the respective loan creditors did not prove their capacity and ability to advance such loans. We however find that before rejecting the financial ability of the loan creditors, the AO did not carry out the objective analysis of the financial strength and net worth of the loan creditors from their audited accounts. This fact can be analyzed from the following facts, which the Ld. CIT(A) cited in his i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, therefore, cannot be accepted. (B) Similarly we find that the lower authorities was not justified in making the addition in respect of loan obtained from M/s Majestic Commercial Pvt Ltd on the ground that the financial position of the loan creditor as revealed by the Profit Loss Account and Balance Sheet did not establish the creditworthiness of loan creditor. The financials of M/s Majestic Commercial Pvt Ltd is seen set out in Pages 38 39 of the assessment order. After analyzing the financials of the loan creditor, we note that the conclusion drawn by the AO that this loan creditor had negligible business activity and nil business profits was per se wrong and incorrect. We note from the financial statements of M/s Majestic Commercial Pvt Ltd for the year ended 31st March 2013, the capital reserves as on 31.03.2013 were ₹ 38.11 crores. The total loans advances granted by the company were ₹ 37.87 crores. Out of such loan portfolio, the loan given to the appellant was only ₹ 2,50,00,000/- which in percentage terms amounted only to 6.60%. During the FY 2012-13, the creditor had earned interest income of ₹ 1,62,75,613/- from its loan portfolio whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not supported by the data available from the audited accounts of these loan creditors. In our considered view, to decide the financial capacity and capability to advance loan, it was necessary for the AO to take into consideration the overall financial capacity and ability rather than only going by the profitability of the loan creditor. 65. From the above discussion it is evident that before rejecting the appellant s explanation with regard to financial capacity and ability of the loan creditors, the AO did not objectively take into consideration financial net worth of the creditors having regard to facts and figures available in the audited accounts. On examination of the financial statements of the loan creditors, we find that each loan creditor possessed sufficient investible funds out of which the creditors had advanced the loans to the assessee. We also find that in each case, the loan creditor had reported substantial interest income. Further, compared with the gross interest accounted in the books of the creditor, the amount of interest paid by the appellant was relatively lower. We also note that the interest paid by the appellant was accounted in the books of the loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs JCIT reported in 270 ITR 487, the question before the Hon ble Calcutta High Court was whether, in absence of any independent verification, the share application monies received in cash from several individuals, who were not income-tax assessees, but claimed to be farmers, was rightly assessed by the AO u/s 68 of the Act. We note that the facts as well as the question involved in this judgment are of no relevance in the appellant s case. The Ld. CIT(A) s reliance on this judgment is therefore, incorrect. (D) We have also gone through the decisions of the Hon ble Delhi High Court in the case of Nova Promoters and Finlease Pvt Ltd reported in 342 ITR 169, Sophia Finance Ltd reported in 205 ITR 98, CIT Vs MAF Academy Pvt Ltd reported in 361 ITR 258, CIT Vs NR. Portfolio Pvt Ltd reported in 214 Taxman 408 and Navodaya Castle Pvt Ltd reported in 367 ITR 306. In our opinion the ratio laid down in these decisions cannot be applied to the appellant s case because the sums in question are not share application monies. In the cases decided by the Hon ble High Court, the private limited companies had received share application monies on private placement. By its very nature, the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Moreover, as noted by us in the earlier paras, in their statements none of the persons had admitted of having any transactions with the appellant or Mr. Jhunjhunwala. In the aforesaid factual background if the AO intended to use these statements to draw adverse inference against the appellant, he himself ought to have examined these entry providers to ascertain the correct facts and in case if it is revealed by these entry operators as to any role of the appellant/assessee or connection with the loan creditors as suspected by the AO, then he should have collected material and in all fairness thereafter give a copy of the admission against the assessee or material discovered in the process and allowed the assessee an opportunity to cross examine the makers of the statement or the gave an opportunity to assessee to meet/rebut the material against it and after hearing the explanation or defence of the appellant/assessee, should have drawn his conclusion or else, the action of AO will be held to be bad in the eyes of law for violation of principle of Natural Justice. Without doing what we suggested supra, we find that the AO has accepted the statements recorded by some other office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord the true and correct facts because while discharging the duties as an Assessing Officer, he was expected to function both as an investigator and adjudicator. In his role as an investigator, he was duty bound to investigate fully and bring out all the facts on record and while discharging the duty as an adjudicator he was required to comply with the principles of natural justice as discussed supra. We however note that before passing the assessment order, the AO failed to perform his twin duties, that of the investigator and adjudicator resulting in the additions being vitiated in the process. 69. We may in this regard, gainfully refer to the decision of Hon ble Apex Court in the case of CIT Vs Odeon Builders Pvt Ltd reported in 418 ITR 315 involving similar facts as involved in the present case. In this decided case, the Revenue had disallowed the purchases made by the assessee holding it to be bogus based on the statements given by a third party. On appeal, the Ld. CIT(A) noted that on one hand the assessee had discharged its initial burden of substantiating the purchases by producing all relevant documentary evidences which it was ordinarily required to maintain in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by the Hon ble Apex Court in the case of Andaman Timber Industries Ltd vs Commissioner of Central Excise in Civil Appeal No. 4228 of 2006 reported in (2015) 62 Taxman 3 (SC),which reads as under: According to us, not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. 71. It is by now a settled proposition of law that where in the revenue proceedings any inference is drawn against the assessee on the basis of statements of any third person then such inference is legally unsustainable if opportunity of cross examining the Departmental Witness/third party is not granted to the affected person. In this regard, we may make useful reference to the decision of the Hon ble Bombay High Court in the case of CIT Vs Reliance Industries Ltd (102 taxmann.com 372). In this case the assessee had claimed deduction for consultancy charges paid to one S, a Consultant. On the basis of statement record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng heard learned counsel for the parties and having perused documents on record, we notice that the entire issue is based on the appreciation of materials on record. CIT (Appeals) and the Tribunal concurrently held that there was sufficient evidence justifying the payment to Shri S.K.Gupta, a Consultant and that the Assessing Officer other than relying upon the retracted statements of Shri Gupta recorded in search, had no independent material to make the additions. No question of law arises. 72. Similar view was expressed by the Hon ble Gujarat High Court in the case of CIT Vs Kanti Bhai Ravidas Patel (42 taxmann.com 128), wherein it was observed as follows: 5. We have heard rival contentions and gone through the material on record. Ld. A.O. has used third party statement of Vikas A. Shah in framing the assessment. The statement of Shri Vikas A. Shah recorded under Section 131(1A) not under Section 132 of the IT Act on 14/03/2005 and 19/04/2005. The ld. A.O. had used this statement without allowing cross examination of Vikas A. Shah which is against the principle of natural justice. This land had registered document and the value has been accepted as to correct by regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals) dt. 05.03.2008, with modification that on the statement of Kripa Shanker Sharma, the income of ₹ 5 Lacs was assessed in the hands of assessee and it was observed by the Tribunal that the statement of Kripa Shanker Sharma was never confronted and no documentary evidence was supplied to the assessee, in absence whereof the income in the hands of the assessee on the basis of statement of Kripa Shanker Sharma deserves deletion. 3. The assessee as alleged carried out construction activities and disclosed income from subcontract and investment in building construction. After the search U/s 132 of the Act,1961 was carried out on 12.04.2005 in the case of another assessee M/s. B.C. Purohit Company at Jaipur Kolkata, evidence was gathered and from the investigation it revealed that in the garb of tax consultation the owners and employees of this group were running the racket of providing accommodation entries of gifts, loans, share application money, share investment and long term capital gains in shares. It will be relevant to record that the present assessee might have been in consultation with M/s. B.C. Purohit Company and a member of the group and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity of existence of the investor is not disputed and accordingly upheld the view of Commissioner (Appeals), at the same time further observed that merely on the basis of oral statement of Kripa Shanker Sharma recorded before the search authorities that the assessee provided accommodation entries was not sufficient for the income to be assessed for a sum of ₹ 5 Lacs in the hands of the assessee and while allowing the cross objection filed by the assessee dismissed the appeal preferred by the revenue under order impugned. 4. We have heard the parties at length and of the view that what has been observed by the Commissioner (Appeals) the Tribunal appears to be based on factual matrix and there appears no substantial question of law arises which may require interference by this Court to be examined in the instant appeal. 5. Consequently, the instant appeals are wholly devoid of merit and accordingly stand dismissed. 74. In view of the above judicial precedents (supra), we note that in the facts of the present case, save and except extracting the statements of so-called entry operators, the AO did not bring on record any credible evidence/material which could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO of the loan creditor as to the genuineness of the transaction as to whether the loan creditor s AO has accepted the loan transactions as genuine or not. Without doing this exercise the AO of the loan taker (debtor) cannot brand the loan creditor as unworthy of credence. Here, in this case on hand, the AO has not done this exercise and these loan creditors all are income tax assessees and all their detail were furnished before the AO and they have all shown the interest income as their income and while paying interest, the assessee had deducted tax at source also. In this regard, we may make useful reference to the judgment in the case of CIT Vs Dataware Pvt Ltd [ GA No.2856 of 2011] wherein the following observations were made by the jurisdictional Hon ble Calcutta High Court; In our opinion, in such circumstances, the Assessing officer of the assessee cannot take the burden of assessing the profit and loss account of the creditor when admittedly the creditor himself is an income tax assessee. After getting the PAN number and getting the information that the creditor is assessed under the Act, the Assessing officer should enquire from the Assessing Officer of the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant/assessee. Moreover we note that the persons to whom the payments were made in cash were staff of the appellant/assessee through whom the payments were made for meeting expenses of the appellant. The Ld. CIT, DR was unable to controvert this factual finding of the Ld. CIT(A). We note that since the payments were made to staff members which facts were duly recorded in the regular books of accounts, the additions of ₹ 15,07,993/- on the ground of being unaccounted payments was rightly deleted by the Ld. CIT(A). Ground No. 2 of the Revenue is therefore dismissed. 79. Now we proceed to decide the Issue (E) raised by the assessee. From the facts on record it is noted that M/s IQCIPL stood amalgamated with the appellant vide order of the Hon ble Calcutta High Court dated 06.03.2017. It is noted that this fact was brought to the notice of the AO by letters dated 23.02.2018, 18.05.2018 and 04.10.2018 (paper book pages 47, 48, 51 52). The Ld. AR claimed that, despite giving due intimation regarding the amalgamation to the AO, the notice u/s 143(2) dated 05.10.2018 was issued by the AO in the name of the non-existent entity (M/s. IQCIPL) which according to the Ld. AR was an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the aforesaid facts that the demerged company (M/s. MSPL) and the transferor company (M/s. IQCIPL) has been merged with the transferee company (M/s. MSPL)w.e.f. 01.04.2015 (appointed date) vide order of Hon ble Calcutta High Court dated 06.03.2017. It is noted that M/s. MSPL had informed the AO about the amalgamation of M/s. IQCIPL with it vide letter dated 23.02.2018 which is available at page 47 of paper book. The intimation regarding the amalgamation of M/s IQCIPL with M/s MSPL was also given in their subsequent letters dated 18.05.2018 and 04.10.12018. Despite being informed about the amalgamation, it is noted from Page 152 of the paper book, that the AO issued notice u/s 143(2) for AY 2013-14 on 05.10.2018 in the name of M/s. IQCIPL which was admittedly non-existent on that date. The AO thereafter proceeded to frame the assessment in the name of M/s. IQCIPL which was a non-existing company after amalgamating with M/s. MSPL by the order of the Hon ble Calcutta High court dated 06.03.2017 w.e.f. 01.04.2015. 82. It is by now well settled in law that any notice or order issued in the name of nonexistent entity which has since stood merged/ amalgamated / dissolved is ab in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer of one or more undertakings to an existing company. Strictly amalgamation does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See Halsbury sLaws of England, Fourth Edn.., Vol. 7, paragraph 1539. Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity. 7. In view of the above discussion, we agree with the Tribunal s view that the amalgamating company ceased to exist in the eye of Iaw, therefore, the appellant was not liable to pay tax on the amount of ₹ 58,735. The appeal is accordingly allowed and we set aside the order of the High court and answer the question in favour of the assessee against the revenue. There will be no order as to costs. 83. Now we deal with the Ld. CIT, DR s contention that, since the cause title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cets of the present case: (i) Firstly, the income which is sought to be subjected to the charge of tax for AY 2012-13 is the income of the erstwhile entity (SPIL) prior to amalgamation. This is on account of a transfer pricing addition of ₹ 78.97 crores; (ii) Secondly, under the approved scheme of amalgamation, the transferee has assumed the liabilities of the transferor company, including tax liabilities; (iii) Thirdly, the consequence of the scheme of amalgamation approved under Section 394 of the Companies Act 1956 is that the amalgamating company ceased to exist. In Saraswati Industrial Syndicate Ltd., (supra) the principle has been formulated by this Court in the following observations: 5. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganisation of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or 'amalgamation' has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch company is merely a procedural defect which can be cured. The High Court held that upon a notice under Section 143 (2) being addressed, the amalgamated company had brought the fact of the amalgamation to the notice of the assessing officer. Despite this, the assessing officer did not substitute the name of the amalgamated company and proceeded to make an assessment in the name of a non-existent company which renders it void. This, in the view of the High Court, was not merely a procedural defect. Moreover, the participation by the amalgamated company would have no effect since there could be no estoppel against law : 11. After the sanction of the scheme on 11th April, 2004, the Spice ceases to exit w.e.f. 1st July, 2003. Even if Spice had filed the returns, it became incumbent upon the Income tax authorities to substitute the successor in place of the said 'dead person'. When notice under Section 143 (2) was sent, the appellant/amalgamated company appeared and brought this fact to the knowledge of the AO. He, however, did not substitute the name of the appellant on record. Instead, the Assessing Officer made the assessment in the name of M/s Spice which was non e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of a non-existent company due to the amalgamation order, would render the assessment a nullity. 23. In Micra India, (supra) the original assessee Micra India Pvt. Ltd had amalgamated with Dynamic Buildmart (P) Ltd. Notice was issued to the original assessee by the Revenue after the fact of amalgamation had been communicated to it. The Court noted that though the assessee had participated in the assessment, the original assessee was no longer in existence and the assessment officer did not the take the remedial measure of transposing the transferee as the company which had to be assessed. Instead, the original assessee was described as one in existence and the order mentioned the transferee's name below that of the original assessee. The Division Bench adverted to the judgment in Dimension Apparels (supra) wherein the High Court had discussed the ruling in Spice Entertainment (supra). It was held that this was a case where the assessment was contrary to law, having been completed against a non-existent company. .... 33. In the present case, despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act respectively in the assessments framed u/s 153A/143(3) of the Act in the names of the appellant/assessee and M/s. IQCIPL. After considering the rival submissions, it is observed that, except variation in figures, the reasoning adopted both by the AO Ld. CIT(A) to justify these additions is verbatim same as in AY 2013-14. 89. Following our reasons and conclusions recorded in Paras 43 to 77,(supra) while deciding Ground Nos. 6 to 11 of assessee s appeal in A.Y. 2013-14, we hold that the additions of ₹ 19,14,00,000/- and ₹ 5,07,90,497/- of the Act are also untenable on facts and in law. We therefore allow the Ground Nos. 2 to 7 raised by the assessee and direct the AO to delete the impugned additions made u/s 68 69C of the Act for AY 2014-15. 90. Additional Grounds raised in this appeal are against the legality of the assessment order on the ground that the notice issued u/s 143(2) of the Act was issued to M/s. IQCIPL, a non-existent entity consequent to its amalgamation with the appellant/assessee pursuant to the order of the Hon ble Calcutta High Court dated 06-03-2017. After considering the rival submissions, it is observed that these additional grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks 22nd May-14 99,358 22nd May-14 Bank KBPL 32,43,038 33,42,396 Ubi ca prebpl 22nd May-14 Bank KCPL 32,10,576 65,52,972 Ubi ca prebpl 22nd May-14 Bank KDPL 32,43,038 97,96,010 Ubi ca prebpl 22nd May-14 Bank KHPL 32,10,575 1,30,06,585 Ubi ca prebpl 22nd May-14 Flat Booking Mani Square Ltd 32,43,038 97,63,547 A/c Swarnamani 22nd May-14 Flat Booking Mani Square Ltd 32,10,576 65,52,971 A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Initially Mani Group demanded ₹ 2000/- per sq. fl. in cash for each of these two flats I purchased, but because of my old business relation I requested Mani Group to reduce this rate and finally rate was fixed to₹ 1400/- per sq. ft. that i needed to pay in cash for these two flats my group companies purchased from Mani Group of Companies. I have paid the amounts in cash aggregating to approx.₹ 1.29 crore on 22.05.2014 to Shri. Sanjay Jhunjhunwala of Mani Group, Kolkata. Q.17 Kindly explain whether the transactions referred in the question No.16 of are parts of the regular books of accounts Ans: Sir, these transactions are not part of my regular books of accounts 94. In view of the above, the AO concluded that the assessee had received ₹ 1,29,07,228/- cash on sale of flat Nos. 23EA and 24EA to M/s Kalamunj Builder Pvt Ltd, M/s Kalamunj Developers Pvt Ltd, Kalamunj Height Pvt Ltd and M/s Kalamunj Construction Pvt Ltd. Having regard to the declared sale consideration of Flat Nos. 23EA and 24EA, the AO observed that this cash/on-monies roughly translated to ₹ 1400/- per sq ft. The AO thereafter required the assessee to furnish complete d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96. The above data was gathered from a cash book impounded from the business premises of M/s Overtone Dealcom Pvt Ltd and the edifice of the impugned addition is the above statement of Shri S S Patodia. From the orders of the lower authorities, it is noted that the contents of above extracted statement of Shi S S Patodia has been taken to be gospel of truth for justifying the impugned addition. This action of the lower authorities has been challenged by the appellant/assessee as untenable both factually as well as legally. It is true that Section 132(4A) read with Section 292C of the Act, raises a presumption that that the contents of books of account and other documents seized during the course of search is true. But it should be kept in mind that this presumption is only qua the person who is searched and/or from whose possession the books of account and documents are found and none else. Moreover this presumption is rebuttable. In the given facts of the case, since the documents in question was not found or impounded from the appellant s premises but in the course of survey (not search) conducted against a third party, the presumption set out in Section 292C of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.05.2014 31,78,470 31,58,626 22.05.2014 19,844 32,10,576 32,106 30.05.2014 31,78,470 31,58,626 22.05.2014 19,844 32,43,038 32,430 30.05.2014 32,10,608 31,87,646 22.05.2014 22,962 32,43,038 32,430 30.05.2014 32,10,608 31,87,646 22.05.2014 22,962 1,29,07,228 1,29,072 1,27,78,156 1,26,92,544 85,612 98. It is noted that each figure of Gross Amount Paid in Column (1) fully tallies with each of the figures mentioned in the alleged cash book found in SSP/HD/MZ/2. The period of payment reconciles as well. It is noted that these payments were received on 30- 05-2014 which is much prior to the date of search, i.e. 22-06-2016 and the receipts ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of my statement recorded on 05.08.2016 u/s 131 of the Income Tax Act in reply to query no.16 that these payments were made by cash but sir out of the aforesaid amount of ₹ 1,29,07,2281- the sum of ₹ 1,26,92,5441- were made by banking channel to Mani Group of Companies vide RTGS drawn on Union Bank of India, Dharamtalla Branch from our various group companies. Details of payment made by the various group companies is enclosed herewith. The balance amount was either outstanding or adjusted with TDS. Sir, I confirm that I have made payment of ₹ 1,26,92,544/- by banking channel and not by cash. And out of balance amount of ₹ 2, 14, 6841- (1,29,07,228 - 1,26,92,544 = 2,14,684) the sum of ₹ 1,29,072/-was the TDS amount and ₹ 85, 612/- was the outstanding balance. Sir, we request your honour to verify the same from our bank statement. 100. In the above letter dated 20-12-2018, Shri S S Patodia has thus affirmed that the sum of ₹ 1,29,07,228/- was paid via banking channel after deducting tax at source, which finding of fact we have already recorded supra at para 98, which now stands further corroborated. The statement of Shri S. S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r harassment from the Revenue. Tribunal noted that apart from the statement of the seller, neither the AO conducted any independent inquiry nor did he discharge the burden of proving that the actual consideration received by the assessee was to the tune of ₹ 34.85 lacs, over and above ₹ 4.10 lakhs as shown in the sale registration documents. On Revenue s appeal, the Hon ble High Court upheld the findings of the Tribunal. The Hon ble High Court held that the addition made by the AO by merely relying on the statement given by the seller was untenable in law and thereby upheld the order of this Tribunal and the Ld. CIT(A). The relevant findings of the Hon ble High Court are as follows: 5. We heard counsel. The seller had initially given conflicting statement about the sale consideration he received. When confronted by the Revenue on 11-12-1998, the seller admitted that he had deposited ₹ 4.10 lakhs received through draft in the bank and the rest amount was held by him in cash. The Revenue authorities could well have seized the cash invoking section 132 of the Act, but for obvious reasons this was not done. Had the cash been seized from the seller, the matter woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in this regard. 6. We also found that the Assessing Officer did not conduct any independent enquiry relating to the value of the property purchased. He merely relied on the statement given by the seller. If he would have taken independent enquiry by referring the matter with the Valuation Officer, the controversy could have been avoided. Failing to refer the matter was a fatal one. 7. In view of the foregoing conclusions, we find no error in the order of the Income-tax Appellate Tribunal and requires no interference. Hence no substantial questions of law arises for consideration of this Court. Accordingly, the above tax case is dismissed. 102. It is material to mention here that the Revenue went in further appeal before the Hon ble Supreme Court. The Hon ble Apex Court in its judgment reported in 294 ITR 49 did not find any infirmity in the order of the Hon ble High Court. 103. We may also make useful reference in this regard to the decision of the Chennai Bench of this Tribunal in the case of M.M. Financers (P) Ltd Vs Dy CIT reported in 17 SOT 5. In the decided case search actions were conducted at business premises of assessee and also at premises of a kn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have drawn adverse inference on the basis of suspicion, conjectures or surmises. It held that the Assessing Officer is required to act fairly and judicially as a reasonable person and not arbitrarily or capriciously. An assessment which is made on inadequate material cannot stand on its own leg. The Tribunal observed that the AO did not bring any corroborative evidence or material in support of the original statement of KM to prove as to why the original statement alone should prevail. The addition made by the AO was thus deleted in full. 104. In view of the corroborative facts and evidences brought on record by the appellant which showed that the payment of ₹ 1,29,07,228/- was actually received in cheque (para 98 para 100 refers)and the ratio laid down in the judicial precedents (supra), we do not find merit in the Ld. CIT(A) s action of confirming the addition of ₹ 1,29,07,228/- by way of alleged on-monies received upon sale of Flat Nos. 23EA and 24EA u/s 68 of the Act. The AO is accordingly directed to delete the same. Ground Nos. 2 to 5 of the assessee s appeal succeeds and therefore stands allowed in favour of the assessee and against the Revenue. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the additions of ₹ 6,82,00,000/- ₹ 2,98,16,275/-u/s 68 69C of the Act respectively are also untenable on facts and in law. We therefore allow the Ground Nos. 6 to 10 raised by the assessee and direct the AO to delete the impugned additions made u/s 68 69C of the Act. 108. Additional Grounds raised by assessee in this appeal are against the legality of the assessment order on the ground that the notice issued u/s 143(2) of the Act was issued to M/s IQCIPL, a non-existent entity consequent to its amalgamation with the appellant pursuant to the order of the Hon ble Calcutta High Court dated 06-03-2017. After considering the rival submissions, it is observed that these additional grounds are identical to the additional grounds raised in AY 2013-14. Following our conclusions drawn in AY 2013-14 at Paras 78 to 84, we hold that the assessment order framed is without jurisdiction since AO issued mandatory notice u/s 143(2) of the Act in the name of M/s IQCIPL is non-est and therefore null in the eyes of law and, therefore, all the additions made against M/s. IQCIPL which were been confirmed by the Ld CIT(A) stand deleted. The legal issue raised by assessee as add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer on account of Employees 'Contribution to ESI and PF by invoking the provision of Section 36(1 )(va) read with Section 2(24 )(x) of the Act was correct or not. It appears that the Tribunal below, in View of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306, held that the deletion was Justified. Being dissatisfied, the Revenue has come up with the present appeal. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1 st April, 1988. Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he award however was never implemented and the construction remained suspended and no payment was ever made by Shri Hari Sharma. In the course of search conducted on 22-06-2016, the Department seized a document on which identification mark Page 52 of MSL/21 was put. The document is reproduced at Page 100 of the assessment order which contains the calculation of interest receivable from Shri Hari Sharma which was worked out by the CFO of the appellant. The AO further referred to another calculation sheet which was impounded with ID mark Page 112 of MSL/27. Relying on these loose papers, the AO concluded that the appellant was entitled to received interest from Abasan Realty (controlled by Hari Sharma) which was not accounted in the books of the assessee. According to AO the right to receive interest had accrued during the relevant year and therefore added interest of ₹ 1,93,75,000/- computed for the period 01.11.2014 to 31.03.2015 to the total income of the appellant on the ground that the appellant regularly followed mercantile system of accounting. 115. On appeal, the Ld. CIT(A) sought a remand report from the AO on this issue wherein the AO stated that the impugned inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharma or M/s Abasan Realty LLP had acceded to the award and/or accepted the award or claim of the appellant. It was brought to our notice that the AO did not make any enquiries from either Shri Hari Sharma or M/s Abasan Realty LLP to ascertain the correctness of these loose papers impounded in the course of search. Instead we find that the AO simply added the interest calculated in these loose papers on the unsubstantiated fact that the appellant/assessee had acquired the legal right to receive interest. In our considered view, such presumption drawn by the AO was clearly not borne out from the facts on record. 118. From the facts on record, it is abundantly clear that M/s Abasan Realty LLP did not perform its obligation agreed in the sub-lease agreement for which dispute was referred for arbitration/reconciliation to fellow builders. It is noted that even after the award of the fellow builders, M/s Abasan Realty LLP did not act on the same. Neither did it pay the interest which it was/is required to pay within 31-10-2015 nor did it ensure that the bottlenecks in construction are removed and the work resumed. Instead, the construction got suspended and no payment was ever made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been earned by an assessee from his transactions with the third party. In the circumstances, whether or not income has been earned by an assessee in the real sense must be judged with reference to the totality of the facts and surrounding circumstances of each case. 120. As noted in the earlier paragraphs, the overall conduct of M/s Abasan Realty LLP and the fact that it has till date not made any payment whatsoever supports the appellant s contention that the interest calculated by the CFO of the appellant on loose papers did not represent real income of the appellant and hence the same was rightly not recognized as income in the books by the appellant. 121. Useful reference in this regard may be made to the decision of the jurisdictional Hon ble Calcutta High Court in the case of Sri Kewal Chand Bagri Vs CIT reported in 183 ITR 207. In the decided case, the assessee had advanced interest bearing loan to its father. Due to setback in father s business, the loan itself had become doubtful. In the circumstances the assessee did not recognize notional interest income on such doubtful loan. The AO however rejected the assessee s claim and added interest income since the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be considered by taking the probability or improbability of realization in a realistic manner. If the matter is considered in this light, it is not possible to hold that there was real accrual of income to the assesseecompany in respect of the enhanced charges for supply of electricity which were added by the Income-tax Officer while passing the assessment orders in respect of the assessment years under consideration. The Appellate Assistance Commissioner was right in deleting the said addition made by the Income-tax Officer and the Tribunal had rightly held that the claim at the increased rates as made by the assessee-company on the basis of which necessary entries were made represented only hypothetical income and the impugned amounts as brought to tax by the Income-tax Officer did not represent the income which had really accrued to the assessee-company during the relevant previous years. The High Court, in our opinion, was in error in upsetting the said views of the Tribunal. [Emphasis supplied] (p. 757) 5. The relevant observations of this court in Goyal M.G. Gases (P.) Ltd.'s case (supra) are as under : Applying the law laid down by the Supreme Court, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overy but on the actual prospect of such recovery as so observed and recognized in the above referred cases of Hon'ble Supreme Court, which have been followed by the jurisdictional High Court of Delhi in the case of CIT v. Goyal M.G. Gas (supra ). 8. No substantial question of law arises for consideration. The appeal is accordingly dismissed. 123. In view of the judicial precedents (supra) and the facts as discussed earlier, we are of the considered view that the Ld. CIT(A) had rightly deleted the addition of ₹ 1,93,75,000/- made by the AO on account of interest allegedly receivable from Shri Hari Sharma. It is noted that neither there was any enforceable award nor any claim was raised by the appellant. There is also no material on record which shows that Shri Hari Sharma acknowledged his liability for payment of interest. It is further taken note that Shri Hari Sharma has not paid any interest to the appellant. On these facts and circumstances, we hold that no real income accrued to the appellant and hence no addition on account of interest receivable was warranted in the given facts of the case. Accordingly, this ground of the Revenue stands dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Ld. CIT(A) in deleting the addition made by the AO on account of interest of ₹ 5,69,06,250/- receivable from Shri Hari Sharma [M/s Abasan Reality]. After considering the rival submissions, it is observed that the issue involved in this ground is similar to the Ground No. 3 of Revenue s appeal in A.Y. 2015-16. Following our conclusion drawn in Paras 114 to 123 of A.Y. 2015-16, we dismiss these grounds of the Revenue. IT (SS) No. 62/Kol/2019 (Assessee s Appeal - A.Y 2017-18) 131. Ground No. 1,7,8,9 and 10 are general in nature and therefore does not call for any specific adjudication. 132. Ground Nos. 2 to 6 of the appeal relates to the additions of ₹ 67,50,000/-and ₹ 1,33,74,309/- made u/s 68 69C of the Act. After considering the rival submissions, it is observed that, except variation in figures, the reasoning adopted both by the AO Ld. CIT(A) to justify these additions is verbatim same as in AY 2013-14. 133. Following our conclusions recorded in Paras 43 to 77, while deciding Ground Nos. 6 to 11 of assessee s appeal in A.Y. 2013-14, we hold that the additions of ₹ 67,50,000/- ₹ 1,33,74,309/- u/s 68 69C of the Act are also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its regular books of account, ₹ 10 lacs appearing in the said page was added to the income of the assessee as undisclosed income. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who deleted the addition by noting that this loose paper does not reveal that the assessee has received ₹ 10 lacs nor any date of receipt can be seen from it. Therefore, he deleted the addition. Aggrieved, the revenue is before us. 139. Having heard both the parties and after perusal of page no. 122 of the assessment order, wherein the (MSL-8 page 15) has been scanned and reproduced, we note that it is a hand written parchi written under the heading Swarnamani . The scribbling on the loose sheet of paper states the name of Manoj Rathi, amount ₹ 10 lacs on account of servant quarter is seen which was marked on the top as 15. On a perusal of the same, AO was of the opinion that one servant quarter was sold to one Manoj Rathi who was a customer in the Swarnamani project for ₹ 10 lacs and the same transaction has not been recorded in the regular books of account, so the AO added it. So, we note that the AO has made the addition based on this fact that from a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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