TMI Blog2022 (9) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... y the revenue and it appears that the revenue has not challenged the findings of the ld. CIT(A) on the very legal ground decided by ld. CIT(A) against the revenue. Thus, it is clear that this legal aspect of the decision is not challenged by the revenue before us. Thus, it is undisputed that when there is no incriminating material no addition could be made in the order passed u/s. 153A of the r.w.s. 143(3) of the Act. Thus no addition can be made in the proceedings under section 153A in respect of the assessments which were completed prior to the date of search except based on some incriminating material unearthed during the search which was not already available to the AO. CIT(A) has after considering the detailed arguments of both the parties clearly taken a view that there is no incrementing material, no addition can be made for the assessment years which are already completed after making the proper enquiries by the AO, and those assessment cannot be allowed to again reframed merely based on the search and that too without any fresh evidence or any fresh material unearthed during search no fresh addition can be made on the issue which are already settled. Even, the ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to be made on account of the long term capital gain reflected in the return of income filed by the assessee. Therefore, the jurisdictional requirement of Section 153 A of the Act was not satisfied. - Decided against revenue. Protective addition based on Pen drive found in search - As submitted that it is respective parties who were demanding, further interest @ 2.4% in addition to what has been recorded in the books. The additional interest which the assessee or its group concern never paid and there is no evidence of any such further sums paid and found as paid in the course of search - HELD THAT:- Similar issue we have decided [ 2022 (9) TMI 1334 - ITAT JAIPUR] where in the arguments, facts are similar in group search case and the bench noticed that interest which is actually paid is duly recorded in the books of accounts and there is no other material which is found even the person under whom possession the PAN Drive is found his statement is not recorded. This action itself shows that department find this evidence as dump documents and is not evidence relied upon. The statement of the person from whom the evidence his found is also not checked on its correctness and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all these appeals and cross objections grounds are similar, facts are similar and arguments were similar and were heard together we consider the facts and ground taken in ITA No. 165/JP/2020 for A. Y. 2011-12 CO No. 16/JP/2020 and considering the said case as lead case. 4. The Department has assailed the appeal in ITA No. 165/JP/2020, before us on the following grounds; 1.Whether on the facts and in the circumstances of the case and in law, the CIT(A)-4, Jaipur, is justified in deleting the addition u/s 68 of Rs. 11,96,03,020/- on account of unexplained credits of LTCG made by the A.O. 2. Whether on the facts and in the circumstances of the case and in law, the CIT(A)-4, Jaipur, is justified in deleting the addition of Rs. 71,76,181/- on account of Commission paid for acquiring on such accommodation entries u/s 69C made by the AO. 5. The assessee has also marched the cross objection which is recorded as CO No. 16/JP/2020. The grounds confronted in this CO are as under; 1. On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in upholding the addition of Rs. 2,86,948/- made by alleging the same as interest payment out of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illing return u/s. 153A, the notices u/s. 143(2) were issued from time to time and the assessee has responded to the notices issued and filed the details required in the assessment proceeding. The assessee was engaged in the business of Share trading and earned income from salary, house property, business or profession, capital gain and other sources during the year under consideration. 7. The main issues involved in this case, as found by the AO in the assessment proceedings is long term capital gain income claimed by the assessee is considered as bogus for an amount of Rs. 11,96,03,020/- and added u/s 68 of the Act. The ld. AO also added an amount of commission paid for acquiring such alleged bogus long term capital gain was also added u/s 69C of the Act for an amount of Rs. 71,76,181/-. The ld. AO made an addition of Rs. 2,86,948/- as an adjustment amount of interest based on the entries recorded in the PEN drive found as undisclosed source income. The. Ld. CIT(A) has allowed the appeal of the assessee in part where in addition of Rs. 11,96,03,220/- and Rs. 71,76,181/- deleted and Rs.2,86,948/- was confirmed. Aggrieved from the said order of the ld. CIT(A) both the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LTD. The assessee was asked to give details regarding when and how the shares of M/s SPLASH MEDIA INFRA LTD. were purchased and evidence in this respect. The Ld. A/R submitted that the assessee has sold 10,70,000 shares of M/s SPLASH MEDIA INFRA LTD., during the year under consideration. Initially, assessee purchased 35000 shares of M/s SPLASH MEDIA INFRA LTD. Further, M/s SPLASH MEDIA INFRA LTD. issued bonus shares at the rate of 3 to 1. Accordingly, the assessee was having 1,05,000 shares 30.12.2009. Thereafter, face value of shares of the scrip were splitted from Rs. 10 to 1, hence the assessee was holding 10,70,000 shares of M/s SPLASH MEDIA INFRA LTD. as on date of sale. 9.3 The details of purchase and sale of this particular scrip i.e. M/s SPLASH MEDIA INFRA LTD. (hereinafter referred as The Scrip) were examined. The assessee bought 35,000 shares of M/s SPLASH MEDIA INFRA LTD. without any market research whatsoever because M/s SPLASH MEDIA INFRA LTD. had no fundamentals. However, later on as per the scheme of stake holders viz. Operators/Syndicate members/Brokers, issuing bonus shares and splitting of the face value of shares, the assessee held the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been engaged in price rigging of various shares. The ld. AO further stated that Shri A.K. Nevatia is a director of M/s Splash Media as well as Comfort group in which M/s First Financials have invested for price rigging of various shares thereafter he relates to the findings of SEBI that the matter. The ld. AO further stated that during the search operations in the case of M/s Anil Agarwal HUF, Mumbai accepted that Shri Jagdish Purohit is the key person and engaged in manipulating the share price of SPLASH MEDIA and convert black money of the person who wants it in form of LTCG and he receives certain percentage of commission in return. The ld. AO extracted the statement of Anil Agarwal in his order. The ld. AO further stated that the statement of Shri RajKumar Kedia was also taken during the search operation u/s 132(4) wherein he accepted that he has arranged investment in the shares of M/s SPLASH MEDIA INFRA and the company is controlled by Shri Anil Agarwal, Mumbai. Thus, he is engaged in providing bogus LTCG entries to various beneficiaries in lieu of commission and for that the ld. AO relied and extracted the statement of Raj Kumar Kedia in his order. The ld. AO further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also added a sum of Rs. 2,86,948/- based on a Pen drive found from one of the employee of the group of Shri Kailash Chand Khandelwal in this pen drive the excel sheets were found wherein in addition to the regular interest paid and additional interest @ 2.4% both computed in the excel sheet and added as unexplained expenditure paid out of undisclosed income. 11. Aggrieved from the above order of the Assessing Officer making the addition the ld. AR of the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) has deleted the addition of long-term capital gain made u/s 68 of the Act and also deleted the disallowance of addition of commission u/s 69C of the Act. Against the said deletion revenue has filed the appeal before us and aggrieved from the order of ld. CIT(A) confirming the disallowance of Rs. 2,86,948/- being unexplained expenditure on account of interest paid by the assessee. 12. Before, we deal matter we perused the relevant findings of the ld. CIT(A) and the same reiterated here in below:- 9. I have perused the written submissions submitted by the Ld. A/R and the order of AO. I have also gone through various judgments cited by the Ld. A/R and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 33,36,321/- declared by the appellant in this connection you are requested to furnish following evidences/copy of impugned seized documents or loose papers, if any (i) Copies of seized or impounded material (document or loose papers), if any, wherein cash payment, if any, made by the appellant for obtaining the long term capital gain is recorded or reflected (ii) Copy of the statement, if any, of any person wherein that person has stated that any accommodation entry in respect of the Long Term Capital Gain declared by the appellant was provided by him or his agent/associate to the appellant. (iii) Copy of Statement, if any, of any person wherein he has stated that the stock broker through whom the shares, on sale of which the appellant has declared LTCG, were sold by the appellant, was involved in providing accommodation entry to the appellant in the form of Long Term Capital Gain. (iv) Copy of order/ enquiry report, if any, of SEBI or any other Government Agency giving the finding that the prices of shares on sale of which the appellant has declared Long Term Capital Gain were rigged or manipulated during the relevant period for the purpose of obtaining bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open concluded assessments of assessment years earlier to year of search was not justified in absence of incriminating material found during search qua each such earlier assessment year-Whether SLP against said decision was to be dismissed-Held, yes (Para 21 in favour of assessee] The issue of additions made by the AO in the assessment u/s 143(3)/153A without any reference to incriminating seized material was considered by the Hon'ble Rajasthan High Court in the case of Jai Steel limited vs. ACIT (88 DTR 1). The Hon'ble Court was of the view in case of completed assessments no addition can be made if no incriminating material is found during the course of search. The relevant observation of the judgment is reproduced below: In the firm opinion of this Court from o plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 137A of the Act, it is apparent that (a) The assessments or reassessments, which stand abated in terms of li proviso to Section 1534 of the Act, the 40 acts under his original jurisdiction, for which assessments have to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the abated assessment or reassessment can be made. The word 'assess in Section 153 A is relatable to abated proceedings (i.e those pending on the date of search) and the word 'reassess to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AD while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYS, 2002-03, 2005-06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural justice and not giving the opportunity of cross examination of the alleged accommodation entry providers, therefore the assessment order ought to held as bad in law and deserves to be annulled. 3. That the order of the Id. CIT (A), confirming the addition made by the AD is arbitrary, whimsical, capricious, perverse, based on no evidence or irrelevant material or irrelevant evidence, and against the law and facts of the case. The addition confirmed by Id. CIT (A) deserves to be deleted. 4. On the facts and in the circumstances of the case and in law the ld. CIT (A) erred in confirming the additions made u/s 68 of the Income Tax Act, 1961 by: a) Solely relying on the statements of some alleged accommodation entry providers recorded by some other authorities in some other cases/actions and the opportunity to cross examination was also not provided to assessee b) Giving a contradictory finding that a doubt is raised on the identity and genuineness of the company whose name is mentioned in the statement of accommodation entry providers as well as reports of DDIT (inv.), Kolkata, c) Holding that the assessee has not adduced any evidence to rebut the adverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arb of unsecured loans and partners' capital. There is no dispute that these transactions of unsecured loans and partners' capital contribution are duly recorded in the books of accounts and disclosed in the return of income which were already completed as the assessments for these four assessment years were not pending on the date of search, therefore, it is manifest from the record that during the course of search and seizure under section 132 of the Act in the case of the assessee no material much less the incriminating material was unearthed or any undisclosed income which was not disclosed in the books of accounts was detected or found. The only incriminating material which was referred by the AO is pages 21 to 26 of Annexure AS-1 in respect of long term capital gain earned by Shri Rajendra Agarwal and his family members. The said long term capital gain was disclosed by Shri Rajendra Agarwal in his statement under section 132(4) and, therefore, it was surrendered and offered to tax by Shri Rajendra Agarwal and his family members in the year of search. The AO himself has not made any addition in the hand of the assessee on account of long term capital gain which was fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gally,this issue is very contentious in view of the divergent views of the various authorities. The appellant has tried to highlight most of them. However, it is equally pertinent to mention here that the Department has not accepted the decisions of Hon'ble Mumbai High Court in the case of M/s All Cargo Global Logistics as well as Continental Warehousing (Nhava Sheva) Ltd, and SLP has been filed before the Hon'ble Supreme Court. The Hon'ble Supreme Court has granted leave vide order dated 12.10.2015 as reported in 64 taxmann.com 34 (5.C). Similarly, in the case of Kabul Chawla SLP has also been filed. 3.2.4 In view of SLPS admitted in case of Kabul Chawla, M/s All Cargo Global Logistics as well as Continental Warehousing (Nhava Sheva) Ltd, (supra), assessee's contention con not be accepted. Moreover, in any case, the additions are to be adjudicated on merits as per relevant ground of appeal, the issue raised in this ground for present remains for academic discussion only. Accordingly, issue raised in ground no. 12 is dismissed. Therefore, neither in the assessment order nor in the order of the Id. CIT (A) there is any mention or finding that the additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of LTCG by the appellant for two A.Yrs as under: A.Yrs Qty Purchase date Purchase cost (Rs.) Sale date Sale (Rs.) LTCG (Rs.) Commission 10-11 15000 27-3-09 1252844 29-3-09 4589165 3336321 2001179 11-12 10.7 lakhs 15-4-09 1574945 11-2-11 121178965 1196030201 7176181 1. That the learned AO pointed out that the appellant has made a confession u/s 132(4) of the Act that such LTCG was bogus and as arranged. Such disclosure was later retracted by the appellant. 2. That the learned AO predominantly relied upon the statements of the following entry operators recorded prior to the date of search on appellant. Entry operator Date of statement Pages of learned AO orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n agreement with the Ld. A/R that it is a settled law that statement alone cannot be treated as incriminating material for the purposes of making addition for assessment completed u/s 153A/143(3). It has been held in many judgments that mere statement u/s 132(4) or u/s 131 is not sufficient to make an addition. A statement made must be relatable to incriminating material found during the course of search or the statement must be made relatable to material by subsequent inquiry/investigations. Hon'ble High Court of Rajasthan in the case of Mantri Share Brokers Pvt. Ltd. (96 taxmann.com 279) have held as under: Section 69B of the Income-tax Act, 1961- undisclosed investments (Burden of proof)- whether where except statement of director of assessee-company offering additional income during survey in his premises, there was no other material either in form of cash, bullion, jewellery or document or in any other form to conclude that statement made was supported by some documentary evidence, said sum could not be added in hands of assessee as undisclosed investments - Held, yes [Paras 10-11] 1In favour of assessee] Para 10 11 of the order is as under: 10. Before proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded.... Though the above principle is laid down in relation to assessment of block period u/s 158 BC of the Act, the same was also applied in respect of assessment u/s 153A by Delhi High Court in case of Best Infrastructure (84 Taxmann.com 287) when it was held thus: 38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court in Harjee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account 69-78 Copies of bank account reflecting purchase and sale 79-87 Copy of dmat statement 88-93 Affidavit of Anil Agarwal, retracting statement given before. 94-99 17.2 Before proceedings further, It would not be out of place to discuss the decision of Hon'ble Supreme Court in the case of Pullangode Rubbers Produces CO Ltd (91 ITR 18) as observed as under: It is no doubt true that entries in the account books of the assessee amount to an admission that the amount in question was laid out or expended for the cultivation, upkeep or maintenance of immature plants from which no agricultural income was derived during the previous year. An admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. The crux of the aforesaid decision is that a declaration or disclosure made by the person is binding unless it is rebutted by the person by furnishing valid evidences. 17.3 In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to any fundamentals of market. If the transactions are duly proved by trading from stock exchange and the documentation is proper, the gains cannot be assessed as unexplained credit or as unexplained money. It was further observed by the Hon'ble ITAT Jaipur Delhi that nowhere it has been found that assessee was in any manner found to be beneficiary of any accommodation entry under any inquiry or investigation. Once all these transactions are duly proved by trading from stock exchange, then to hold the sale of shares as unexplained credit or as unexplained money cannot be upheld. Not providing the cross examinations 19. It was also pointed out that for both the A. Yrs only the copy of statement of entry operator was provided with the SCN by the Ld. AO. The Ld. AO also did not allow cross examination despite specific request by the Ld. A/R vide letter dated 27-11-2017. The Ld. A/R has also taken a specific legal plea that no cross examination of the persons, whose statement was relied upon, was granted despite specific request made to the AO. The aspect of not granting cross examination has specifically been answered by the Hon'ble ITAT Jaipur in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross-examination and made the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000 , order dated 17.2.2005 was passed remitting the case back the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 1. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the Show Cause Notice. 19.2 Therefore, the statement of witness cannot be sole basis of the assessment without given an opportunity of cross examination and consequently it is a serious flaw which renders the order a nullity. The Mumbai Special of the Tribunal in case of GTC Industries vs. ACIT (Supra) had the occasion to consider the addition made by the AO on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually had some kind of a share in such secret money. It is quite a trite law that suspicion howsoever strong may be but cannot be the basis of addition except for some material evidence on record. The theory of 'preponderance of probability' is applied to weigh the evidences of either side and draw a conclusion in favour of a party which has more favourable factors in his side. The conclusions have to be drawn on the basis of certain admitted facts and materials and not on the basis of presumption of facts that might go against assessee. Once nothing has been proved against the assessee with aid of any direct material especially when various rounds of investigation have been carried out, then nothing can be implicated against the assessee. Judgment of jurisdictional High Court and Hon ble ITAT Jaipur 20. From the above it can be noted that the assessee has furnished all the evidences in support of the transaction in the shares of penny stock share on which he earned long term capital gain. The transactions are through banking channel and are supported by the contract note of the broker to whom brokerage is paid. The statement referred in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directorates, mainly Kolkatta. The Ld. AO issued a SCN to the appellant. The Ld. AO did not allow cross examination of the entry operator for the reasons enumerated in his order. 22.1.2 In response to the SCN appellant filed all the documentary evidences in his possession before the Ld. AO which were kept as it is were not rebutted by virtue of any inquiry/ investigation. In remand proceedings the Ld. AO has reiterated the statements, later retracted, given during the course of search and afterwards. Noticeably the Ld. AO did not have SEBI report which specifically indicted either the appellant or the 'penny stock' script. 22.1.3 The Ld. AO proceeded to treat the LTCG as bogus and made an addition. In nutshell the external information retracted statement was formed whole sole basis to treat the LTCG claim as bogus. Thus, the crucial question that it was appellant money (unaccounted cash) which came back to appellant in the form LTCG was not evident from the information so received, nor investigated nor is answered by the whole exercise. 22.1.4 All the decision of Hon'ble High Court of Rajasthan and Hon'ble ITAT Jaipur on LTCG earned on Penny st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. AO is directed to allow the claim of LTCG for both the A.Yrs. Since he LTCG claimed u/s 10(38) of the Act is held genuine the consequent disallowance addition of commission u/s 69C is also directed to be deleted. In short the relief allowed is: A.Yrs LTCG claim Commission 2010-11 Rs 3336321 Rs 200179 2011-12 Rs 119603020 Rs 7176181 13. Before us the ld. AR of the assessee has submitted following written submission in respect of the ground raised by the revenue as well as grounds raised by the assessee:- May it please your honours, Brief facts are that a search action was carried out u/s 132 of the Income Tax Act, 1961 on 22.07.2015 in case of Maverick group to which these all persons assessee belong. In response to notice issued u/s 153A, returns of Income by all the persons declaring same income as declared in the return filed u/s 139(1) of the Act. The assessment was completed u/s 143(3) r.w.s. 153A of the Act wherein various additions were made which include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11,77,629/- 70,658/- Asha Jain 2011-12 159/JPR/2020 1 2 5,77,76,606/- 34,66,596/- SangeetaMantri 2011-12 160/JPR/2020 1 2 5,68,18,858/- 34,09,131/- Mukesh Jain 2010-11 161/JPR/2020 1 2 33,35,476/- 2,00,129/- Mukesh Jain 2011-12 162/JPR/2020 1 2 12,03,91,598/- 72,23,496/- Anshul Jain 2014-15 163/JPR/2020 1 2 1,35,94,856/- 8,15,691/- Ramesh Kumar Mantri 2010-11 164/JPR/2020 1 2 33,36,321/- 2,00,179/- Ramesh Kumar Mantri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mukesh Jain 2010-11 69-99 29 Para 11 to 11.5 pages 30-34 2011-12 118-149 SangeetaMantri 2011-12 98-128 29 Para 11 to 11.5 pages 32-36 Sunita Agrawal 2011-12 66-93 29-30 11 to 11.6 pages 32-36 From the perusal of the grounds of appeal taken by the department, it appears that the department has not challenged the findings of ld. CIT(A) given on the legal issue raised that if no incriminating material was found as a result of search, no addition could be made more particularly when no proceedings were pending as on the date of search. It is thus submitted that on legal aspect department has accepted the order of ld. CIT(A) and accordingly undisputedly when no incriminating material was found suggesting Long Term Capital gain/ Short term capital loss being non genuine, no addition could be made on this account in the orders passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Retraction Affidavit APB CIT(A) para no. and page no. Mukut Behari Agrawal 2015-16 87-109 40-42 para 8.3 page 25 Anshul Jain 2014-15 57-81 25-26 Para 10.2 10.3 page 31 Sunita Agrawal 2014-15 129-152 23-24 Para 10.2 page 29 2015-16 48-71 25-26 Para 17.2 page 42 So far as merits of the case are concerned, it is submitted that the above stated appellants had earned LTCG [claimed as exempt u/s 10(38)]/STCL on the sale of shares, part of which was disallowed on the basis of alleged enquiries/investigation conducted in the case of third parties. Also, it was presumed that all the assessee would have paid commission on such accommodation entries and therefore addition on that account was made u/s 69C of the Act. In this regard, at the outset, it is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. Moreover, apart from the so called information received from Investigation Wing, Kolkatta containing statements of entry operators, there was no material available with the Ld. AO or referred to by him in the assessment order found as a result or gathered during the course of assessment proceedings in support of the impugned additions made by him. As submitted above, in the statements, such entry operators have merely / generally stated the modus operandi of their so called companies through which they have admitted to be engaged in providing accommodation entries in respect of LTCG. At this juncture attention of your honours is invited to the fact that the assessees of Maverick group had neither made transactions of purchases and nor any transaction of sale of the impugned shares through the companies of such entry operators. On the other hand the assessee had made transaction of purchase (in most cases) and also sale of impugned shares on the on-line portal of BSE through his regular broker MSBPL i.e. the broker with whom he had made all his transactions of purchases and sale of scripts and derivatives in past and in future period. Since transactions of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any authority like SEBI etc. However, relying upon the uncorroborated statements of third parties, that too recorded in some other case, by some other authority and behind the back of all theseassessees, Ld. AO incorrectly presumed that long term capital gain and Short term loss earned/incurred was merely an accommodation entry (even though none of them has neither purchased nor sold the shares of these companies through broking firm of such third parties. Apart from the so called information received from Investigation Wing, Kolkatta containing the statements of such third parties, there was no material available with the Ld. AO or referred to by him in the assessment order found as a result or gathered during the course of assessment proceedings in support of the impugned addition made by him. The Ld. AO further relied upon the conclusion drawn by SEBI in respect of these transactions where the SEBI had made enquiries in respect of unexpected fluctuations / gains in the price of shares of few companies. The ld.AO has also referred to the interim order of SEBI. Firstly it submitted that this order is passed in the case of M/s First Financial Services Ltd which has no relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount (Rs.) MukutBehari Agarwal 2010-11 08/JPR/2020 1 to 1.2 30,247/- 2011-12 09/JPR/2020 1 to 1.2 2,42,926/- Sunita Agarwal 2011-12 10/JPR/2020 1 to 1.2 1,20,855/- Asha Jain 2011-12 11/JPR/2020 1 to 1.2 34,060/- SangeetaMantri 2011-12 12/JPR/2020 1 to 1.2 13,940/- Mukesh Jain 2010-11 13/JPR/2020 1 to 1.2 46,751/- 2011-12 14/JPR/2020 1 to 1.2 13,611/- Ramesh Kumar Mantri 2010-11 15/JPR/2020 1 to 1.2 1,58,269/- 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcel Sheet APB Reply APB Ramesh Kumar Mantri 2010-11 72-73 66-71 2011-12 106-107 100-105 MukutBehari Agrawal 2010-11 89-90 83-88 2011-12 202-203 166-171 Asha Jain 2011-12 93 87-92 Mukesh Jain 2010-11 68 62-67 2011-12 117 111-116 SangeetaMantri 2011-12 97 91-96 Sunita Agrawal 2011-12 94-95 - Thereafter, ld.AO changed his stand and took the view to treat the entries as Interest paid instead of earlier allegation as interest received and alleged that the amount appearing under the last column is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the ones appearing under the last column for which it was categorically stated that those entries were not made by assessee or his employee. This is further evident from the fact that assessee has deducted due tax on the amount of interest actually paid by him and the same is appearing as such in the excel sheets. The entries appearing in the adjustment column was the additional interest asked by the lender, which was never paid by the assessee, as is evident from the fact that no TDS was deducted thereon nor any payment was made. Further no incriminating document was found during the course of search corroborating the allegation of ld. AO nor was anything brought on record by making independent enquiry during the post search or assessment proceedings to support the allegation that assessee had paid anything more than what was recorded in the books of the assessee. It is also a matter of fact that during the course of assessment proceedings, assessee had filed copies of confirmation from the concerned parties along with the PAN and complete address, duly confirming the amount borrowed with the amount of Interest paid and Tax deducted by the assessee which stood accepted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon. He has stated that the fact that the SEBI and Investigation Wing of the department has given so much of the material on the issue of bogus long term capital gain including the report of the SIT report he had relied upon. He has heavily relied on the statement recorded u/s. 132(4) of the Act wherein the assessee has accepted the amount as not genuine transactions and therefore, the same may be viewed in accordance with the confession made by the assessee. The statement is recorded before in the presence of the two witness and based on the confession the investigation was stopped and now the assessee cannot say that the statement is not correct. The ld. CIT(A) has not discussed the merits of the case and decided the appeal of the assessee merely on the technical ground. Even the ld. AO while reporting to the ld. CIT(A) in remand has ignored the report of the Investigation Wing available with him but AO may not knowing to mention that in the remand report. In addition, the ld. DR also filed a written submission in respect of the grounds raised by the revenue: A Search and seizure action under section 132 (1) of the Income Tax Act was carried out by the Income Tax Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(Inv) at the time of issuing warrants under section 132(1). The existence of satisfaction recorded by PDIT(Inv) is liable to be challenged before courts. Hence, until such satisfaction for issue of warrants under section 132(1) are held invalid by any court, the satisfaction recorded by PDIT(Inv) continued to hold the fort for purpose of 153A also and it is for this reason there is no further requirement of recording any belief of satisfaction by AO for issue of notice under section 153A. As may be noted from the conditions of recording the satisfaction of PDIT(Inv), one of the conditions is regarding books or other documents which were not produced or would not have been produced on issue of summons. Thereby implying that post search, while the AO is making assessment, it has to examine the correctness of income disclosed not only based on what material has been gathered during search but also based on these books or documents which in the opinion of PDIT(Inv) would not have been produced upon issue of summons, whether or not such books of accounts or documents have been actually found during search. In fact, there are numerous instances when even the books of accounts as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A cannot proceed to examine the books of accounts or documents, entries which were produced before him subsequently, wherein might also represent income wholly or partly, which has not been disclosed for the purposes of the Act. Hence, it may be contrary to the scheme of the provisions of 132(1) r/w 153A, if it were to be held that power of AO is restricted only to make assessment the evidence found during search. The provisions of 153A not only require assessment of undisclosed income but total income also. The expression total income' would include the income emanating from disclosed items, income emanating from partly or wrongly disclosed items as well as income emanating from undisclosed items. U/s153A, no distinction is made for assessment of total income in the cases which were earlier completed u/s 143(1), the cases which were earlier completed u/s 143(3)/147 or the cases where no return was filed prior to search. Thus, in all the three categories, it is as per the scheme of the Act that the total income of the assessee as defined u/s2(45) needs to be assessed for all the 6AYs for which the AO is mandated to issue notice u/s153A. 1.3 Further u/s153A, there is a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terpretation is contrary to the legislative intent. Therefore to articulate the legislative intent clearly, explanation 3 has been inserted in section 147 to provide that assessing officer may examine, assess or reassess any issue relevant to income which comes to his notice subsequently in the course of proceedings under this section, notwithstanding that the reasons for such issue has not been included in the reasons recorded under subsection(2)ofsection148 . Hence, even in absence of any explanation u/s 153A also similar to the explanation 3 u/s 147, the intention of the legislature and the scheme of the Act for making assessment u/s 153A where search u/s 132 is initiated, is same i.e. in order to make assessment of total income, after having assumed the jurisdiction to assess total income, the powers of AO shall not remain restricted to mere those material which were seized during search but shall also include the assessment of income based on any entry already recorded prior to search or any claim/relief allowed prior to search, which has been found to be erroneous during the proceedings u/s 153A. 1.5 There is divergence of judicial opinion on the question of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minating material was found concerning said addition had to be rejected -Held, yes. Sunny Jacob jewellers and wedding center Vs DCIT3 62 ITR 664(Ker) Whether there is no requirement under provisions of Act requiring department to collect information and evidence for each and every year for six previous years in order to initiate proceedings under section 153A Held, yes. CIT Vs Anil Kumar Bhatia 352 ITR 493(Delhi) Whether even if assessment order had already been passed in respect of all or any of those six assessment years, either under section143(1)(a) or section143(3) prior to initiation of search/ requisition, still Assessing Officer is empowered to reopen those proceedings under section 153A without any fetters and reassess total income taking note of undisclosed income, if any, unearthed during search- Held, yes CIT-II Vs continental warehousing corporation 235 Taxman 568(SC) The High Court by impugned order held that no addition can be made in respect of assessments which have become final if no incriminating material is found during search or during 153A proceeding - Whether Special Leave Petition filed against impugned order was to be granted- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii)an entry in books of account; iii) an asset; iv) a statement given on oath; v) absence of any fact claimed earlier but coming to notice during search; vi) absence of books being found during search; or vii) absence of the office /business premises as claimed during returns filed or any other documents, etc. In short, any fact/ evidence which could suggest that the documents/ transactions claimed or submitted in any earlier proceedings were not genuine, being only a device/ make belief based on non-existent facts or suppressed /mis represented facts, would constitute an incriminating material sufficient to make assessment for the purposes of the Act. A mere statement u/s 132(4) is an evidence for making an assessment as also held by apex court in B Kishore Kumar Vs DCIT 234 Taxman 771(SC) as under: High Court by impugned order held that since assessee him self had stated in sworn statement during search and seizure about his undisclosed income, tax was to be levied on basis of admission without scrutinizing documents -Whether Special Leave Petition filed against impugned order was to be dismissed-Held, yes Hence even a statement u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has not beena lready disclosed in the return filed, ifa ny. Hence, the entries in the regular books of accounts would also trigger the assessment u/s 153A /C, if there is some prima-facie evidence that the entry recorded there in is camouflaged, or incorrect, wholly or partially, and such entries have a bearing on determination of total income of such person. The definition under clause(ii)of 271AAB(c) also defines undisclosed income as any income based on entry in books of accounts wholly or partly false and would not have been found to be so, had the search not been conducted . This clearly implies that any entry even recorded in the books, which is found to be wholly or partly false along with having a bearing on determination of income based on evidence gathered during search, would also be in the nature of incriminating material. Further, recently introduced section 270A, which is also applicable to search assessments for AYs other than specified years, mandates to levy penalty even in cases where the expenses had been claimed in the books without any evidence or where the entries recorded in the books were found to be false. This also supports the contention that mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs Aji S Kumar 93 Taxman.com 294(SC), the court in the context of section158BB has upheld the use of information collected in a survey in case of connected person carried along with search in other person for the purpose of making assessment u/s158BB. Provisions of 158BB are Pari Materia to section153A. The Delhi High court in PCIT Vs Kabul Chawla in para37(iv)observed as under: iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this Section only on the basis of seized material. The Delhi High court has thus explained the underlying principle that though the assessment may not be based on seized evidence only but the addition cannot be arbitrary. There can be no dispute on this proposition. It has to be based on evidences found during search, or post search or information available with the AO which can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... za Haji V. State of Kerala and another reported in (2006) 7S CC 416, wherein it has been observed that a decision obtained by playing a fraud on Court is liable to be setaside on the basic principle that the party who secured such a decision by fraud cannot be allowed to enjoy its fruits. The learned senior counsel also relied on the observation of the Hon'ble Supreme Court in State of Andhra Pradesh and another Vs. T.Suryachandra Rao reported in (2005) 6 SCC 149 to the effect that the fraud vitiates every solemn Act and fraud and justice never dwell together. In A.V.Papayya Sastry and Others Vs. Govt.Of Andhra Pradesh and others reported in (2007) 4 Supreme CourtCases 221 also, the Hon'ble Supreme Court has observed that fraud vitiates all judicial acts whether in rem or in personam and that a judgment, decree or order obtained by fraud has to be treated as non-estand nullity, whether by the Court of first instance or by the final Court and that the same can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings. In North Eastern Railway Administration, Gorakhpur Vs. Bhagwan Das (dead) ByLrs reported in (2008) 8 Supreme Court C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principle in the present context also, it can be safely concluded that in the absence of any categorical finding on the genuineness of a claim in an earlier assessment having being accepted on make belief documents/ evidences only, it cannot be said that the A.O. has expressed any opinion on the correctness or otherwise of the items/ entries disclosed in the return of income already filed prior to the search. The judicial view is very clear where in it has been held that the mere submission of some documents proving identity or bank account, affidavits in contrast to the other evidences suggesting the transaction to be suspicious cannot be accepted to have established the genuineness of transaction. Hence, if any earlier finding has been found to be vitiated or incorrect based on material found subsequently, the AO shall have powers to review such findings based on any tangible material coming to his notice, while exercising power of assessment of total income u/s153A. In view of the above, I is clear that if there is some material noticed subsequently whether found during search or otherwise, the findings of earlier assessments can be dislodged, irrespective of whether such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire transaction of shares giving rise to such capital gains. The ratio laid down by the Hon'ble Supreme Court in the case of SumatiDayal vs. CIT, 214 ITR 801 is squarely applicable to the case. Though the assessee has received the amounts by way of account payee cheques, the transactions cannot be treated as genume in the presence of the overwhelming evidences put forward by the Revenue. The fact that in spite of earning such steep profits, the assessee never ventured to involve himself in any other transaction with the broker cannot be a mere coincidence of lack of interest. Reliance is placed on the judgment in the case of Nipun Builders and Developers Pvt. Ltd. (supra), where it was held that it is the duty of the Tribunal to scratch the surface and probe the documentary evidence in depth, in the light of the conduct of assessee and other surrounding circumstances in order to see whether the assessee is liable to the provisions of section 68 or not. In the case of NR Portfolio, it was held that the genuineness and credibility are deeper and obtrusive. Similarly, the bank statements provided by the assessee to prove the genuineness of the transactions cannot be considered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 9511Chdl2016, order dated 18.04.2018. Sanjay Bimalchand Jain vs. ITO 89 taxmann.com 196. Dinesh Kumar Khandelwal, HUF vs. ITO in ITA No. 58 591Nagl2015, order dated 24.08.2016. Ratnakar M Pujari vs. ITO in IT A No. 9951Muml2012, order dated 03.08.2016. Disha N. Lalwani vs. ITO in ITA No. 6398 I Mum I 2012, order dated 22.03.2017. ITO vs. Shamim. M Bharwoni [20 16] 69 taxmann.com 65. Usha Chandresh Shah Vs ITO in ITA No. 6858 I Mum I 2011, order dated 26.09.2014. CIT vs. Smt. Jasvinder Kaur 357 ITR 638. 12. The facts as well as rationale given by the Hon 'ble High Court are squarely applicable to the case before us. Hence, keeping in view the overall facts and circumstances of the case that the profits earned by the assessee are a part of major scheme of the accommodation entries and keeping in view the ratio of the judgments quoted above, we, hereby decline to interfere in the order of the Ld. CIT(A). 8. From the above extract, it would be seen that the Cressanda Solutions Ltd. was in fact identified by the Bombay Stock Exchange as a penny stock being used for obtaining bogus Long Term Capital Gain. No evidence of actual sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stock where accommodation entries were through brokers obtained was Splash Media . These assessees have claimed bogus LTCG in the same script where Kolkata High Court has treated the script as penny stock on the basis of Investigation report. During search assessees has also accepted in their statement recorded u/s.132(4) of Act that they earned bogus LTCG by accommodation entry in script Splash Media . The copy of Kolkata High Court judgment and Investigation report is submitted for kind consideration. 15. Since, ld. DR has cited the recent judgment in the case of Ms. Swati Bajaj case which was in favour of revenue. The ld. AR has filed a note showing as to why the said judgment is not relevant in the present set of cases. The same is reiterated here in below : Distinguishing Note The reliance on the judgment of Hon ble Calcutta High Court in the case of Swati Bajaj is misplaced for the following legal and factual reasons: 1. That in the case of Swati Bajaj, the Hon ble Calcutta High Court in para 47 which starts from page 86 in last line of page 87 has distinguished the decision of Hon ble Supreme Court in the case of Odeon Builders by observing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation wing alongwith certain statements recorded by DBIT Investigation, Calcutta could not be taken into consideration as that material was not disclosed nor an opportunity was accorded for cross-examination of the Assessee. This finding recorded by the Tribunal cannot be said to be perverse or suffering from any patent illegality. Learned counsel for the Revenue could not satisfy us with reference to any judgment on this aspect that even without disclosing any material to the Assessee and without allowing him proper cross-examination, such undisclosed and unverified material could be taken into consideration for the purposes of addition ..Learned counsel for the Revenue relying upon the judgment passed by the Supreme Court in the case of Sumati Dayal Versus Commissioner of Income Tax, Bangalore reported in AIR 1995 SC 2109 would submit that the Tribunal has not examined the case on the touchstone of human probability ..In view of the above consideration, we are of the view that this appeal does not involve any substantial question of law and is, therefore, dismissed 4. Hon ble Rajasthan High Court in the following cases held that proof of trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properly discussed and appreciated by the appellate authority. 6. Hon ble Calcutta High Court has not held that the report of Investigation Wing can be conclusive for making additions in any assessment proceedings. Hon ble Calcutta High Court has simply held that such report of Investigation Wing can be a starting point for probing the matter further. Hon ble Calcutta High Court has not at all held that the evidences submitted by the assessee need to be totally ignored. 7. In respect of right of Cross Examination, Hon ble Calcutta High Court has simply held that if the persons have not deposed specifically against a particular assessee then the said assessee has no vested right of Cross Examination (Para 61 page 100). Reliance is placed on the following decisions of Hon ble Supreme Court wherein it has been observed that prejudice is caused to the assessee when the documents relied upon are not confronted and the assessee is not provided opportunity of Cross Examination: 7.1 Hon ble Supreme Court in the case of PCIT vs Parasben Kasturchand Kochar [2021] 130 taxmann.com 177 (SC) dismissed the SLP filed against the decision of Hon ble Gujarat High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot provided copy of such statements to appellant, thus, denying opportunity of cross examination to appellant, who on other hand, had prima facie discharged initial burden of substantiating purchases through various documentation including purchase bills, transportation bills, confirmed copy of accounts and fact of payment through cheques, VAT Registration of sellers and their Income-tax Return - He held that purchases made by appellant was acceptable and disallowance was to be deleted - Tribunal dismissed revenue's appeal - High Court affirmed judgments of Commissioner (Appeals) and Tribunal being concurrent factual findings - Whether no substantial question of law arose from impugned order of Tribunal - Held, yes [Para 4] [In favour of assessee] 7.3 Sunita Dhadda, order dated 28.03.2018, SPECIAL LEAVE PETITION (403 ITR 183) The ratio laid down by Hon ble Rajasthan High Court and also Hon ble ITAT, Jaipur Bench as below was upheld: Their Lordships ADARSH KUMAR GOEL and ROHINTON FALL NARIMAN Ji.- dismissed the Department's special leave petition against judgment dated July 31, 2017, of the Jaipur Bench of the Rajasthan High Court in D.-B,L_TA. No. 197 of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing entries of bogus LTCG. However, the reliance placed on the report, without further corroboration on the basis of cogent material, does not justify his conclusion that the transaction is bogus, sham and nothing other than a racket of accommodation entries. We do notice that the AO made an attempt to delve into the question of infusion of Respondent's unaccounted money, but he did not dig deeper. Notices issued under sections 133(6)/131 of the Act were issued to M/s Gold Line International Finvest Limited, but nothing emerged from this effort. The payment for the shares in question was made by Sh. Salasar Trading Company. Notice was issued to this entity as well, but when the notices were returned unserved, the AO did not take the matter any further. He thereafter simply proceeded on the basis of the financials of the company to come to the conclusion that the transactions were accommodation entries, and thus, fictitious. The conclusion drawn by the AO, that there was an agreement to convert unaccounted money by taking fictitious LTCG in a pre-planned manner, is therefore entirely unsupported by any material on record. This finding is thus purely an assumption based on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we find that the decision therein was arrived at in light of the peculiar facts and circumstances demonstrated before the ITAT and the Court, such as, inter alia, lack of evidence produced by the Assessee therein to show actual sale of shares in that case. On such basis, the ITAT had returned the finding of fact against the Assessee, holding that the genuineness of share transaction was not established by him. However, this is quite different from the factual matrix at hand. Similarly, the case of Sumati Dayal (supra) too turns on its own specific facts. The above-stated cases, thus, are of no assistance to the case sought to be canvassed by the Revenue. 13. The learned ITAT, being the last fact-finding authority, on the basis of the evidence brought on record, has rightly come to the conclusion that the lower tax authorities are not able to sustain the addition without any cogent material on record. We thus find no perversity in the Impugned Order [Emphasis Supplied] 9. Attention is drawn towards para 65 page 103 of the order of Hon ble Calcutta High Court wherein following observation was made by the Hon ble Calcutta High Court: Nothing prevented the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI has taken action against for such failure. 17. We have considered the rival contentions, perused the material available on record and also gone through the findings of the lower authorities recorded in their respective orders. We have also gone through the various judicial ruling placed before us by both the parties to drive home to their contentions. The ld. AO observed that the assessee has claimed Long Term Capital Gain (LTCG) u/s. 10(38) of the Act. The details of the same is under: Name of scrip Quantity Date of Purchase Cost of purchase Date of sale Sale proceeds Long term capital gain SPLASH MEDIA 10,70,000 15.04.2009 15,75,945/- 11.02.2011 12,11,78,965/- 11,96,03,020/- In support the above long-term capital gain the ld. AR demonstrated that all the proof related to the said income is placed on record and the ld. AO has not commented a single line that these records are not correct and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to assess or reassess the total income of six years immediately preceding to the year of search, however, the assessments which are pending on the date of search gets abated and the assessments which were not pending on the date of search had attained the finality. Therefore, the addition over and above the assessed income cannot be made de hors the incriminating material found at the time of search while completing the assessment under section 153A of the Act. If there is no incriminating material then the original assessment made can be reiterated and no further addition is called for and an addition can only be made on the basis of undisclosed income derived from material/documents seized as a result of search. The completed assessment can be interfered or disturbed by the AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search and requisition of income disclosing undisclosed income not already disclosed or made known in the course of original assessment. Therefore, in the absence of any incriminating material found or seized during the course of search and seizure proceedings, the additions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book. We have persuaded those contentions raised. From the perusal of the chart annexed, it is evident that the assessees have been regularly dealing in shares and hold shares of various companies other than the company alleged as penny stock companies also. 20. The ld. AR of the assessee also argued before us that apart from the so-called information received from Investigation Wing, Kolkatta containing statements of entry operators, there was no material available and placed before the assessee in the assessment proceedings in support of the contentions raised by the AO. The ld. AR of the assessee submitted that there was specific request was made for cross examination of such entry operators, however such request was turned down in summary manner. The ld. AR of the assessee in his written submission dealt with the most of the allegation made by the ld. AO. 21. The revenue is arguing that the ld. CIT(A) has not considered the fact that there was a confession of the assessee u/s. 132(4) in a statement recorded during the course of the search and based on that aspect the ld CIT(A) should have decided the appeal on merits of the case. We have gone through the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antial question of law. In the case of Commissioner of Income Tax Versus Harjeev Aggarwal reported in (2016) 290 CTR (Del) 263 and Kailashben Manharlal Chokshi Versus Commissioner of Income Tax reported in (2010) 328 ITR 411 (Guj) various High Courts have held that addition based solely on statement later on retracted, without anything more, could not be justified in law. Thus, the view taken by the Tribunal cannot be faulted. In view of the above consideration, we are of the view that this appeal does not involve any substantial question of law and is, therefore, dismissed. Considering the above finding of the jurisdictional high court ruling the argument of the ld. AR that the statement recorded u/s. 132(4) cannot be considered as incriminating material and thus, the arguments of the revenue is not maintainable in view of the above decision of the jurisdictional high court. 22. The ld. AR of the assessee submitted that the provisions of section 132 read with section 153A of the Act stipulate two types of situations - one where the assessment of any assessment year falling within six assessment years is pending on the date of initiation of search under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made. separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYS, 2002-03, 2005-06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue against the said decision of Hon'ble Delhi High Court was dismissed by the Hon'ble Supreme Court vide order dated 7th December, 2015. In a subsequent decision, the Hon'ble Delhi High Court in the case of Principal CIT vs. Meeta Gutgutia has again analyzed this issue in para 55 to 71 as under : 55. On the legal aspect of invocation of Section 153A in relation to AYS 2000 01 to 2003-04, the central plank of the Revenue's submission is the decision of this Court in Smt. Dayawanti Gupta (supra). Before beginning to examine the said decision, it is necessary to revisit the legal landscape in light of the elaborate arguments advanced by the Revenue. 56. Section 153A of the Act is titled Assessment in case of search or requisition . It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating materia being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with. 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Asstt. CIT[2013] 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpurv. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating material found during the course of search or requisition of documents, 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in CITV. Continental Warehousing Corpn (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78/232 Taxman 270/374 ITR 645 (Bom.) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) 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: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (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. ii. Assessments and reassessments pending on the date of the search shall abate. The total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYS under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India) (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: '15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every czea where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by the Rajasthan High Court in the case of Jal Steel (India) v. Asst. CIT(supra), the earlier assessment would have to be reiterated, in case where pending assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing its earlier decision in Saumya Construction (P.) Ltd. (supra) and of this Court in Kabul Chawla supra). As far as Karnataka High Court is concerned, it has in IBC Knowledge Park (P.) Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYS in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In Gurinder Singh Bawa(supra), the Bombay High Court held that: 6. . . . . . once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings. 63. Even this Court has in Mahesh Kumar Gupta (supra) and Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission by the Assessee of a failure to record any transaction in the accounts of the Assessee for the AYS in question. On the contrary, the Assessee herein stated that, he is regularly maintaining the books of accounts. The disclosure made in the sum of Rs. 1.10 crores was only for the year of search and not for the earlier years. As already noticed, the books of accounts maintained by the Assessee in the present case have been accepted by the AO. In response to question No. 16 posed to Mr. Pawan Gadia, he stated that there was no possibility of manipulation of the accounts. In Smt. Dayawanti Gupta(supra), by contrast, there was a chart prepared confirming that there had been a year-wise non-recording of transactions. In Smt. Dayawanti Gupta (supra), on the basis of material recovered during search, the additions which were made for all the years whereas additions in the present case were made by the AO only for AY 2004-05 and not any of the other years. Even the additions made for AYS 2004-05 were subsequently deleted by the CIT (A), which order was affirmed by the ITAT. Even the Revenue has challenged only two of such deletions in ITA No. 306/2017. 68. In para 23 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kabul Chawla (supra) as well as the decision of Hon'ble Jurisdictional High Court in the case of M/s. Jai Steel India Ltd. vs. ACIT (supra). Even on the issue of addition made by the AO in the proceedings under section 153A in respect of the assessment year which was already completed on the date of search, the Hon'ble High Court has held that in the absence of any material which was subsequently unearthed during the search and was not already available to the AO, the additions made by the AO on account of security deposits were rightly deleted by the Id. CIT (A). The relevant observations of the Hon'ble High Court in case of Principal CIT vs. Meeta Gutgutia (supra) are in para 53 as under : 53. At this stage, it is also to be noticed that an elaborate argument was made by Mr. Manchanda on the aspect of the security deposits accepted by the Assessee. These were of two kinds one was of refundable security deposits and the other for non-refundable security deposits. As far as the refundable security deposits were concerned, the AO himself in his remand report accepted them as having been disclosed. This has been noticed by the CIT (A) in para 7.2.1 of his order for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note to the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total Income and such orders subsistig at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 27. The Allahabad High Court in Smt. Shaila Agarwal's (supra) has held as under: 19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or re-assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same along with assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding the ld. CIT(A) has specifically raised the issue in remand proceeding based on the submission of the assessee at para 11 of the order of CIT(A) and the ld. CIT(A) extracted the remand report of the AO at para 11.2 where in the AO categorically confirmed that No Such material found or impounded . 27. Whereas the ld. DR in his submission submitted that it is the 'assessment of total income' which is required to be made under section 153A. The total income is defined under section 2(45) would be the total income computed as per section 5 of the act. The word 'assessment' cannot have a different meaning for different purposes under the same act unless restricted by specific provisions. The process of assessment for the purposes of the act is wide enough to include every kind of enquiry/ examination for discovery, quantification and assessment of the income wholly or partly for the purposes of the act. Hence, the process of' assessment of total income' u/s 153A can neither be restrictive nor have a different connotation for assessment under section 153A vis-a-vis143(3) or 147. As per the scheme under the Act, the satisfaction recorded u/s132(1) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n something which might be noticed otherwise. The ld. DR submitted that the department has not accepted the decision of Kabul Chawla and the SLP was dismissed due to low tax effect. The DR also submitted that the dismissal of SLP in case of PCIT Vs. Meeta Gutgulia wherein also the same views were expressed as in Kabul Chawla, would also not lead to conclusion that the question decided by Delhi High Court against the revenue in Meeta Gutgutia is settled law because the SLP has already been admitted by SC for hearing on the same question in several other cases such as Continental Warehousing Best Infrastructure. Thus, the sum and substance of arguments of the ld. DR is that the question whether the AO has powers u/s. 153A to assessee total income as defined u/s. 2(45) dehors the incriminating material also, has not at all becomes final and the same is yet pending final adjudication before the SC in SLPs admitted. In this regard, we are of the view that no final orders have been passed so far by the Hon'ble Supreme Court in the judgments cited by the Id. DR. Therefore, the principle of ratio descendi are not applicable with regard to the aforementioned cases. Therefore, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re already settled. Even, the ld. CIT(A) has based on the arguments of the assessee followed the jurisdictional High Court decision and Tribunals orders and even this coordinate bench decision is also binding on us in the absence of any contrary judgement. 28. Now the question is that whether section 153A of the Income-tax Act, 1961 ( the Act ) mandates the existence of incriminating material in respect of the assessments that have concluded/are not pending on the date of search in order to assess or re-assess them and also whether the addition to income in respect of the said years, if any, will be restricted to the income emanating out of incriminating material/documents unearthed during the course of search as it is held by ld. CIT(A) is correct or not? Whereas revenue before us pleaded the view of the Department that as per section 153A, all the assessments consequent to search u/s 132(1) of the Act, has to be made de novo regardless of any incriminating material found during the course of search and thus, the findings of the ld. CIT(A) is not correct and required to be reversed. In our considered view the said issue is no longer res integra as the same has already been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years in question, no addition could be made in respect of the said assessment years. The ratio decidendi of the Hon'ble Supreme Court's judgement appears at para-18 of their order and the same is reproduced as under :- 18. The Income-tax Appellate Tribunal (ITAT) permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the Income-tax Appellate Tribunal (ITAT) that as per the provisions of section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of section 153C of the Act. Para 9 of the order of the ITAT reveals that the Income-tax Appellate Tribunal (ITAT) had scanned through the satisfaction not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India [2022] 136 taxmann.com 162/286 Taxman 119/[2021] 439 ITR 193 (OrissaHC) vii. Smt. Jami Nirmala v. Pr. CIT [2022] 284 Taxman 141/[2021] 437 ITR 573 (Orissa HC) viii. Pr. CIT v. Delhi International Airport (P.) Ltd. [2022] 140 taxmann.com 440/443 ITR 382 (Karnataka HC) ix. Pr. CIT v. Dipak Jashvantlal Panchal [2017] 88 taxmann.com 611/397 ITR 153 (Gujarat HC) x. Pr. CIT v. Saumya Construction (P.) Ltd. [2017] 81 taxmann.com 292/387 ITR 529 (Gujarat HC) xi. CIT v. IBC Knowledge Park (P.) Ltd. [2016] 69 taxmann.com 108/385 ITR 346 (Karnataka HC) xii. Pr. CIT v. Devangi [2017] 88 taxmann.com 610/394 ITR 184 (Gujarat HC) 31. The only High Courts which gave the contrary judgments were the Hon'ble Allahabad High Court in the case of CIT v. Raj Kumar Arora [2014] 52 taxmann.com 172/367 ITR 517 and the Hon'ble Kerala High Court in the cases of E.N. Gopakumar v. CIT (Central) [2016] 75 taxmann.com 215/[2017] 244 Taxman 21/390 ITR 131/293 CTR 450 and DR. A. V. Sreekumar v. CIT [2018] 90 taxmann.com 355/253 Taxman 428/404 ITR 642. The ratio decidendi in the case of Kabul Chawla (supra) was that the completed assessments can be interfered w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. v. Jagdamba Oil Mills (2002) 1 JT 482 (SC) ix. Aditya Pharmaceuticals (P.) Ltd. v. A.P. State Financial Corpn. [2004] 50 SCL 322/AIR 2003 AP 413 (Andhra Pradesh HC) x. Pernod Ricard India (P.) Ltd. v. State of Goa [W.P.C.A. 3598 of 2021] xi. Gojer Bros. (P.) Ltd v. Ratan Lal Singh 1974 AIR 1380 (SC) 32. In the case of Sinhgad (supra), paras 9 and 10 of the order of the ITAT have been specifically approved by the Hon'ble Supreme Court at para-18 of their judgement and therefore, the said paras need to be examined. For ease of reference, paras 9 and 10 of the ITAT order are reproduced below :- 9. From the above, it is demonstrated by the learned counsel that the items at serial Nos. 1 to 5 above belongs to the asst. yr. 2004-05 or thereafter. Referring to the rest of the items at serial Nos. 6 to 9 above, the counsel mentioned the said documents seized are either recorded in the books of account or involves cheque transactions. Thus, he summed up stating that the documents in question are neither the incriminating ones nor unaccounted transactions of the assessee nor they relate to the impugned four assessment years. In such circumstances, the AO not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only be a 'speaking one' but also be prima facie 'incriminating one' for igniting the proceedings under s. 153C. Unlike other assessment years, there is nothing made out by the AO what is called incriminating for the current assessment year under consideration.When the impugned documents merely contains the notings of entries, which are already found place in the books of account or subjected to scrutiny of the AO in the past in regular assessment under s. 143(3) of the Act, such document cannot be said to be containing the incriminating information. What is the point in disturbing the settled assessment when the Revenue does not have incriminating information for an assessment year and the information what is available is only routine one and when the AO merely makes an addition in the assessment under s. 153C based on change of opinion and when such additions are likely to be deleted in view of the settled nature of the issues ? Income-tax provisions are not merely for the issue of notice under s. 153C but it is essentially for taxing the income of the person. What is the point in issuing notice under s. 153C on flimsy grounds and finally tax nothing ? Such pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not pending on the date of search. It is therefore our considered view that in view of the judgement in the case of Sinhgad (supra) that has upheld the requirement of the existence of incriminating material for assessing/reassessing concluded assessments, the issue is no longer res integra. 35. The fact remains that the Revenue itself is not disputing that in respect of the LTCG no incriminating documents were found in the search proceedings and the finding of the ld. CIT(A) is not challenged before us in any of the grounds raised by the revenue. Our attention has been drawn to the decision of the Supreme Court in CIT v. Singhad Technical Education Society (2017) 397 ITR 344 (SC) where in the context of Section 153C of the Act it was held that the incriminating material which was seized had to pertain to the AY in question. It is further held that documents seized had to establish a corelation documents wise with the assessment years for which the addition was sought to be made. 36. The requirement that the incriminating material to have the corelation to the particular addition sought to be made is a logic that will hold good not only for Section 153 C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded assessments without any incriminating material tantamount to review of the same. It is a settled law that the Assessing Officer cannot review his decision in respect of the concluded assessments on the date of search; this is based on the presumption that the Assessing Officer has already applied his mind and has approved the returns of income filed by the assessee. Besides it will tantamount to relooking the entire return of income for an assessment year once again inspite of there being no incriminating material merely because a search has taken place. Hon'ble Supreme Court, in several decisions including the decision in the case of CIT v. Kelvinator of India Ltd. [2010] 187 Taxman 312/320 ITR 561, while interpreting the term reasons to believe and expressing its views on the power of the Assessing Officer to re-open the assessment under the erstwhile provisions of section 147 r.w.s 148 of the Act as existed prior to 01.04.2021, has given a very clear finding that One must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess, but the reassessment has to be b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) That the sheets contained information about amounts borrowed by various individuals and entities of the Maverick Group along with many other individuals and entities, which were unrelated and unknown to the assessee as also the entire Maverick group; (ii) That excel sheets contained details of loan taken, interest paid, Tax deducted, amount repaid, along with dates thereof which are made through cheques; (iii) That there were repetition of details in the various files found in the pendrive, which were duly demonstrated to ld. AO and also appreciated and accepted by him; (iv) That the details appearing in all the columns other than those appearing under the adjustment column were duly recorded in books of respective individuals and entities, as far as it pertained to the Maverick group and were got verified by ld. AO; (v) That the excel sheet was mailed to Shri Kailash Khandelwal who is in accounts department by the finance broker through whom the amounts were borrowed, asking for further payment of interest @2.4% in addition to the interest already paid and thus this amount is separately mentioned in the last column, but the said payment was never made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n record any evidence / material whatsoever by making independent enquiries to support the allegation that the said amount was paid by assessee over and above the amount of interest paid and recorded in the books of accounts. The additions have been made on presumptions and assumptions for which there is no scope in the scheme of assessment of search case as envisaged in chapter XIV of the Income Tax Act, 1961. In the circumstances, it is humbly prayed that the additions so made merely on suspicion without any corroborative evidence on record deserves to be deleted and the assessee prays accordingly. 40.3 The ld. AR of the assessee relying on the written submission further submitted that the person from whom the pen drive is found is not at all relied upon at the time of search. It is also confirmed by both the parties at bar that the person Shri Kailash Chand Khandelwal under whose possession the pen drive found has not made any statement. The search party has not considered this PEN drive and that is why his statement is also not recorded during the search proceeding or at the time of assessment proceedings. The ld. AR of the assessee submitted that in this PEN drive de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive addition no substantive addition is made. The relevant report of AO vide letter No. ITO/Wd-1(2)/JPR/2022-23/92 dated 02.05.2022, submitted his report and same is extracted here in below : Respected Sir, Sub: Supplying of documents/information in the case of M/s Maverick Group Cases-reg. ***** Kindly refer to your letter No 50 dated 27.04.2922 on the abovementioned subject. In this connection, the requisite information is reads as under: i. No further appeals before Hon'ble ITAT were recommended in all the four assessment years. ii. On perusal of the assessment records, it is noticed that the AO in assessment order has mentioned that a pen drive was found and seized from the possession of Shri Kailash Chand Khandelwal, one of trusted employee of the assessee. The pen drive so seized contained some files in excel software. The excel sheets contains adjustment entries in the last column with remarks of 2.4%. From the details, it was noted that out of the total interest after considering the duplicate/repeated entries noted in adjustment account, total of such entries comes to Rs. 75.27,847/- out of which it was claimed that an amount of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Assessing Officer how the protective addition can survive and therefore, he has submitted that the protective addition made in these cases are required to be deleted. 40.5 Similar issue we have decided in the ITA No. 41/JP/2020 where in the arguments, facts are similar in group search case and the bench noticed that the issues raised by the assessee in this cross objection are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various contentions raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 41/JP/2020 shall apply mutatis mutandis in this case also. The relevant finding in 41/JP/2020 is extracted here in below 15. We have heard the rival contentions, submission made and relied upon relevant judicial decisions by both the party. The bench has noted that when the PEN drive find during the search proceeding no questions are raised to the parties not only that the employee from this PEN drive found, his statement is not recorded. Thus, merely from that PEN when the veracity about that evidence is not recorded no addition either protective or substantive can be made. Not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on the finding that the revenue has not made any substantive addition in the persons in whose name the interest as alleged addition income is not added and the ld. AR of the assessee categorically proved that there is no incriminating other document found recording the payment of the additional interest. Based on these observations we vacate the disallowance made for an amount of Rs. 37,32,344/- made on protective basis. 40.6 Based on the above observations the cross objection No.16/JPR/2020 is allowed. 41. The issues as raised by the Department in its appeal for the assessment year 2011-12 in the case of Ramesh Kumar Mantri are similar to the issues for the assessment years 2010-11 in assessee s own case, in the case of Shri Mukut Bihari Agarwal for A. Y. 2010-11 2011-12, in the case of Smt. Asha Jain, Assessment Year 2011-12, in the case of Shri Mukesh Jain, Assessment Year 2010-11 2011-12 in the case of Smt. Sangeeta Mantri and Assessment Year 2011-12 in the case of Smt. Sunita Agarwal for assessment year 2011-12 also wherein the order of the ld. CIT(A) has been sustained. Therefore, the decision taken by this Bench in the appeal of the Department for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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