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TMI Blog2022 (9) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... 20 (Arising out of ITA No. 162/JP/2020), ITA No. 160/JP/2020, C.O. No. 12/JP/2020 (Arising out of ITA No. 160/JP/2020), ITA No. 156/JP/2020, C.O. No. 10/JP/2020 (Arising out of ITA No. 156/JP/2020) Dr. S. Seethalakshmi, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Manish Agarwal (C.A.) For the Revenue : Shri P.R. Meena (Pr.CIT) ORDER PER BENCH: All these appeals have been filed by the department in the case of respective assessee against the respective orders of the learned Commissioner of Income Tax (Appeals)-4, Jaipur [hereinafter referred to as ld.CIT(A)']. Since the issues involved are common, all these revenue appeals were heard together and are being disposed off by this consolidated order. Against the department appeal there are cross objections filed by the respective assessee. 2. At the outset, the ld. AR has submitted that the matter pertaining to Shri Ramesh Kumar Mantri in ITA no. 165/JPR/2020 & Co. No. 16/JPR/2020 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical. The ld. DR did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the excess amount as alleged by Ld.AO and further confirmed by Ld.CIT(A). Appellant prays that such observation being incorrectly made deserves to ignored and excluded and the consequent addition so confirmed by Ld. CIT(A) by relying such observation, deserves to be deleted. 2. That the appellant craves the right to add, delete, amend or abandon any of the grounds of this cross objections at the time or before the actual hearing of the case." 6. The brief facts of the case as culled out from the records is that a search and seizure actions u/s. 132 of the Act and/or survey action u/s. 133A of the Act was carried out by the Income Tax Department on the members of the Marverick Group, Jaipur on 22.07.2015 of which the assessee is one of the members. During the course of the above referred actions, cash Jewellery, valuables, stock-in-trade, documents, books of account and / or loose papers found and or seized from the premises of the Maverick Group Jaipur of which one such member happens to be the assessee. In this case original return of income was filed on 10.09.2011 for the A.Y. 2011-12 declaring total income at Rs. 42,01,900/-. On account of search jurisdiction over the cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 133A of the I.T. Act. It has been manifestly accepted by them that such penny stock companies are the conduit for converting untaxed money brought on record by paying no taxes in the garb of exempted income. It is further detected that M/s Splash Media & Infra Ltd. (Scrip Code-512048) is a penny stock listed company. It has very small capital base but its market capitalization is multifold to its capital base. Further, information in respect of trading in penny stock i.e. M/s Splash Media & Infra Ltd. is also available at ITD Data/AIR. 9.1. As per the details furnished by the assessee, it is noticed that the assessee claimed exemption u/s 10 (38) of the Income Tax Act, 1961 as tabulated here in below:- 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/- 9.2 On examination of the share sale transactions made by the assessee during the Year, it was found that the entire sale proceeds that have been claimed as exempt income were received from sale of one scrip namely M/s SPLASH MEDIA & INFRA LTD. The assessee was as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Money Control. The ld. AO has also extracted the key financial ratios of the said company and were part of the order. The AO observed that the company's share prices were on the higher side and in bell shape and then he has commented that the company has no major turnover and assets. Based on these analysis ld. AO observed that the company was merely a paper company based on the said findings the ld. AO concluded that the reasons of astronomical price rise. The learned AO has also recorded the movement of share price from 01.01.2009 to 01.08.2017 based on the aforesaid tabulated information ld. AO reveals that the steep decline of share price without any big loss to the company or any corporate disallowance of sale etc. also suggests that price movements were manipulated. Based on the price pattern has also drawn chart. Based on the said observations he alleged that the scrip has been made specifically for the purpose of providing bogus long term capital gain to beneficiaries. 10. The ld. AO further stated that the SEBI passed an interim order in the case of First Financials Services Ltd. wherein it has been concluded that various entities have been engaged in price rigging of v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India on black money given a report about the misuse of long term capital gain for money laundering was extracted in the order. Based on all these finding a show cause notice was issued to the assessee extracting all these averments made by the AO and relying on the statement on oath given by the assessee u/s 132(4) of the Act wherein the assessee has declared additional income of Rs. 11,96,03,020/- which was not declared in the return of income denying the benefit of section 10(38) and asking the assessee to show cause as to why the same should not be added u/s 68 of the Act to the total income of the assessee and also to show cause as to why the amount of Rs. 71,76,181/- be added u/s 69C of the Act being unexplained expenditure incurred by way of commission paid to arrange bogus entry of long term capital gains. In response to the above show cause notice, the assessee submitted a detailed reply which is also part of the order of the assessment. The ld. AO stated that the reply of the assessee and based on his finding given in his order and relying on the various judicious decisions added both sums as income of the assessee. The ld. AO has also added a sum of Rs. 2,86,948/- b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the end of the F.Yr. in which return is filed. 10.2 It is clear from the table above that assessment for the A.Yrs. 2012-13 & 2013-14 stood completed on the date of search and there was no time left to issue the notice u/s 143(2). In case of completed assessments the law permits to make additions only on the basis of incriminating seized material found & seized during the course of search. Remand proceedings 11. Before a discussion is made it may be pointed out that this office wrote letters for A Yr 2010-11 & 2011-12 dated 27-07-2018 to the Ld. AO asking specifically that whether any incriminating material was found during the course of search or not. The letter for the A Yr 2010-11 reads as under: Please refer to the above. It is seen that the AD while completing the assessment u/s 143(31/153A has made the addition in respect of the Long Term Capital Gain (LTCG) of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above context it is submitted that the all the above statement have been made as part of assessment order by the Assessing Officer. 11.3 Perusal of the remand report shows that no incriminating material was found during the course of search. 12. Recently Hon'ble Supreme Court vide order dated 02-07-2018 in Meeta Gutgutia Vs. Pr CIT (96 Taxmann.com 468) have held that Invocation of section 153A to re-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. The head note of the judgment is as under:- Section 153A of the Income-tax Act, 1961 Search and seizure (General principles) Assessment years 2001-02 to 2003-04 and 2004-05 High Court in impugned order held that invocation of section 153A to re-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYS "in which both the disclosed and the undisclosed income would be brought to tax. iv. Although Section 153 A does not say that additions should be strictly mode on the basis of evidence found in the course of the search, or other post-search 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 mode without any relevance or nexus with the seized material. Obviously assessment has to be made under this Section only on the basis of seized material" v. In absence of any incriminating material, the completed assessment can 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. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessment for the year under consideration was not abated as on the date of search and CIT (A) erred in holding that the contention of the assessee cannot be accepted in view of SLPS admitted in various cases. The id CTF (A) further erred in holding that the additions are to be adjudicated on ments as per relevant ground of appeal hence the issue remains for academic discussion only 2. On the facts and in the circumstances of the case and in law the id. CIT(A) erred in not declaring the assessment order as bad in low and void ab initio. The findings of id CIT (A) in this regard are perverse and erroneous it is contended that the id AG passed the assessment order against the doctrine of "audi alterm partem", violating the principle of natural 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 ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee on 2nd July, 2015. Therefore, even the sole basis of assessments framed under section 153A of the Act is the information received from Investigation Wing Kolkataand statement of one Shri Anand Sharma, who is stated to be an entry operator and managed various concerns/companies including M/s Royal Crystal Dealers, one of the loan creditors of the assessee. Except the said statement and report of the Investigation Wing Kolkata, the AO has neither referred to or was having in possession of any material to indicate that the unsecured loans shown in the books of accounts as well as partners capital received by the assessee are nothing but assessee's own unaccounted and undisclosed income routed back in the garb 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied by me). (The decisive words used in the provisions are to assessee or reassess the total income). The A.O. is thus duty bound to determine the 'total income of the assessee for such six assessment years and it is obvious that 'total income' refers to the sum total of income in respect of which a person is assessable. The total income therefore will cover not only the income emanating from declared sources or any material placed before the Assessing Officer but from all sources including the undisclosed ones, or based on the unplaced material before the AO. 3.2.3 The concept of 'assess or reassess and shall abate' as contemplated u/s 153A is under hot judicial debate. I find that legally,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 grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be considered as incriminating seized material found during the course of search. 13.3 I may add that the statement of appellant recorded u/s 132(4) of the Act or statement of 3rd party recorded u/s 131 of the Act or u/s 132(4) of the Act is NOT considered as incriminating material. A detailed discussion in this regard is in the following paras. 13.4 On the facts and in the circumstances of the case and considering the above, I am of the view that the legal ground taken by the appellant is tenable and is allowed for the A.Yrs. 2010-11 & 2011-12. Adjudication on merits 14. Perusal of the orders by the Ld. AO shows that the Ld. AO has relied on following evidences to disallow the claim 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating 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 proceeding with the matter, it will not be out of place to mention that except the statement in the letter, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inating 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 Harjeev Aggarwal (supra). 16. Coming to the statements of various entry operators in the order. I have perused the statements from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme 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 case the main person of the group admitted certain income u/s 132(4) of the Act which was later retracted and reasons for such retraction is filed in the form of documentary evidences, as discussed above. Thus the appellant retracted the statement u/s 132(4) of the Act showing the admission by him was incorrect by filing all the possible documentary evidences. 18. I have carefully considered the relevant facts, arguments advanced and case law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roved 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 of Shri Pramod Jain. The relevant extract on the issue is as under: "As regard the non grant of opportunity to cross examine, the Hon'ble Supreme Court in case of Andaman Timber Industries vs. CCE (supra) while dealing with the issue has held in para 5 to 8 as under:- "5. We have heard Mr.KavinGulati, learned senior counsel appearing for the assessee, and Mr. K. Radhakrishnana, learned senor counsel who appeared for the revenue. 6.According to us, not allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 basis of suspicion and surmises and observed in para 46 as under:- '46.In situations like this case, one may fall into realm of 'preponderance of probability' where there are many probable factors, some in favour of the assessee and some may go against the assessee. But the probable factors have to be weighed on material facts so collected. Here in this case the material facts strongly indicate a probability that the wholesale buyers had collected the premium money for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 has no relevance as there is no name of the assessee. Therefore in the absence of any adverse material to prove the documentary evidences furnished by the appellant otherwise, the income earned by the assessee on sale of these shares can't be treated as bogus. Various Courts in situation like this, including Hon'ble High Court of Rajasthan have ruled in favour of assessee. Some of the lead judgments directly on the issue of penny stock and consequent capital gain thereafter are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 stock are in favour of assessee's. To put it other way round, not a single decision is against assessee's. Thus these decisions have binding precedence. The decisions are: 1. POT Vs. Pramod lain & Ors (appeal no. 209/2018 dated 24-07-2018(Rajasthan High Court) 2. CIT Vs. Pooja Agarwal ( appeal no. 385/2011 dated 11-09-2017 ( Raj High Court ) 3. CIT Vs. Sumitra Devi 102 DTR 342 ( Raj High Court ) 4. JVS Food Private Limited Vs. DOT 2018(11)TMI 1088 5. Kapil Mittal Vs. ITO 20171(11) TMI 988 6. Om Prakash Modi Vs. DCIT ITA no. 402 & 403 /JP/2017 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the addition of treating the long term capital gains/ short term capital gains / loss from certain equities by holding the same as bogus.Appeals were field before ld. CIT(A) against such additions, which were decided substantial relief was allowed by ld. CIT(A) in all the cases and the capital gains / loss declared was held as genuine. Against the said orders of ld. CIT(A), all these appeals are filed by the department challenging the deletion of addition made and the assessee preferred cross objections wherein the additions confirmed are challenged by the assessee. With the above background, submission on the department appeals is as under: Long Term Capital Gain/Short term capital loss alleged as bogus and from Penny Stock companies and Commission paid thereon: In the grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . After appreciating such facts, ld.CIT(A) accepted the contention of the assessee and held that no addition could be made as no incriminating material was found with respect to the Long Term capital gain/ Short Term capital loss by alleging the same as non genuine.Details of such appeals, detailed submission furnished in this regard before ld.CIT(A) and relevant page numbers where remand report is reproduced and observations of the ld. CIT(A) in this regard are tabulated hereunder for sake of convenience: Name of Assessee Assessment Year CIT(A) WS APB CIT(A) page where Remand report is reproduced CIT(A) decision para and page no. Ramesh Kumar Mantri 2010-11 74-104 27 Para 12 to 13.4 pages 27-33 2011-12 108-139 MukutBehari Agrawal 2010-11 91-119 26 10 to 10.5 pages 28-32 2011-12 172-201 Asha Jain 2011-12 94-124 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 departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of search when the same are not corroborated with any incriminating material/documents suggesting Long Term Capital gain/ Short term capital loss being non genuine. Details of such appeals, detailed submission furnished in this regard before ld.CIT(A), relevant page numbers where Retraction affidavits are available and observations of the ld. CIT(A) in this regard are tabulated hereunder for sake of convenience: Name of Assessee Assessment Year CIT(A) WS APB 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of some other scripts and not the scripts involved in the case of the 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 derivati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm MSBPL is never found involved in any such type of activity 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,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 16/JPR/2020 1 to 1.2 2,86,948/- In grounds of Cross Objections pertaining to this issue, assessee has challenged the action of ld. CIT(A) in upholding the addition made by ld.AO by alleging the same as interest payment out of undisclosed sources of income, on the basis of excel sheets in a pen drive which was found and seized from the possession of Shri Kailash Chand Khandelwal, one of the employee of Maverick Group. Brief facts of the case are that during the search operation carried out in the case of Maverick group, to which the abovementioned assessees belong, a pen drive was found and seized from possession of Shri Kailash Chand Khandelwal, one of the employees of Maverick Share Broker P. Ltd. (but not employee of assessee companies) containing some files ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts 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 pen-drive, 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 KailashKhandelwal 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 by assessee or other group members of the group. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiries 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." 14. Au contraire, the ld. DR submitted that the observations of the CIT(A) in the impugned order that there was no incriminating material "in respect of the LTCG" but a statement of the assessee recorded during the proceeding u/s. 132(4) is piece of evidence recorded at the time of search although the same has been retracted will not make the fact corrected that there was no incriminating material, therefore, the addition was justified and supported the order of the ld. AO on this issue and as regards the addition challenged by the assessee in his cross objection he has reiterated the findings of the ld. CIT(A). As regards the contention of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es seized during the search. Without verifying the facts, Ld. CIT appeal has deleted additions on legal ground based on various judgements. It is to be noted here that during the search, assesses have accepted that they have taken accommodation entries by way of bogus entries share transactions through penny stocks and claiming long term capital gain through various brokers on payment of commission. In some cases assessee routed unsecured loan in it's books through jamakharchi companies who's creditworthiness, identity and transactions are not genuine. The assessing officer has discussed the issues in great length in the assessment order. I hereby rely on the reasons mentioned an assessment order for such additions. Further, I would like to submit following as under: 1.1 The language of section 153A makes it very clear that there is no explicit or intended requirement of seizure of any incriminating material during the search under section 132(1) before issuing the notice under section 153A. The jurisdiction of section 153A is automatic from the moment a search is initiated. There is no requirement of examination of seized material or recording any satisfaction with res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the AO is mandated to examine whether such income / entry was disclosed fully or partly and/ or represents its real nature and source for the purposes of the Act. This inter alia would mean that even the entries disclosed in accounts which might represent income fully or partly would in itself be an incriminating material for which a search was initiated. When the non-production of books or other documents can give rise to a belief for initiating search u/s 132(1), then it may be counterproductive to conclude that the power of AO is restricted to assessment based only on incriminating material found in search, irrespective of any other item of income which might have remained fully or partly undisclosed for the purposes of the Act, based upon the entries already appearing in such books, if any. 1.2 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the items of total income which could be assessed u/s153A in abated proceedings cannot be different for the cases which could not be abated such as: i)where no proceedings were pending; or ii)where earlier assessments were completed u/s 143(3)/147; or iii) where earlier assessments were not made at all. The only caveat could be that before making any addition to the total income, the AO must bring on the record how such items are falling in to the category of total income for the purposes of the Act. Thus, if it were to be held that no addition can be made without any incriminating material in respect of the years covered by section 153A, then it would lead to an absurd consequence whereby the powers granted to issue notices u/s 153A would be rendered otiose in cases which got abated for any particular AY. In the absence of any seized material, AO may not be able to proceed to make any assessment of any other item of total income implying that the process of making assessment of total income as envisaged in section153A fails in abated cases. However, a statute can never be interpreted in a manner to make it redundant. 1.4 Section 153A does not say that additions should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of incriminating material for invoking provisions of 153A. (b) The Delhi High Court in Kabul Chawla 380 ITR 573(Del) held that assessment u/s 153A on an issue could not have been made unless backed by some incriminating material found during the search. The department has not accepted the decision in case of Kabul Chawla and the SLP was filed was subsequently withdrawn due to low tax effect. (c) However, the same Delhi High Court in case of Dayawanti Gupta Vs CIT 390 ITR 496(Del) in para16 has observed that: "Section 153A, which provides for an assessment in case of search, and was introduced by the Finance Act, 2003 with effect from 1-6-2003, does not provide that a search assessment has to be made strictly on the basis of evidence found as a result of search or other documents and such other materials or information as are available with the Assessing Officer and relatable to the evidence found. The earlier section 158BB which is not applicable in case of a search conducted after 31-5-2003, provided that the computation of the undisclosed income can only be on the basis of the evidence found as a result of search or other documents and materials or information as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l qua each of preceding assessment years and, consequently, assumption of jurisdiction under section 153A and consequent additions made by Assessing Officer on said basis were not justified-Whether SLP against said impugned order was to be allowed- Held, yes. The dismissal of SLP by supreme court in case of PCIT vs Meeta Gutgutia 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 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(supra). Further, Supreme Court in Sinhgad Tech Edu Society 397 ITR 344(SC) held that no notice u/s 153C could be invoked unless there was incriminating material is also of no consequence as the provisions of section 153C has been amended w.e.f 1/4/2005 and that the decision of Sinhgad Tech Edu society was for period prior to1/4/2005. 1.6 The sum and substance of all the decisions above could only indicate that the question of whether the AO has powers u/s 153A to assess total income as defined u/s2(45) dehor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly or indirectly ,proves that the earlier evidence submitted was only a make belief and such new material has a bearing on the assessment of total income of any assessee, even if such income was earlier admitted as correct in absence of any such adverse facts available at the time of earlier assessment. The requirement of incriminating material is not specifically mentioned in the Act. However, w.e.f. 1/4/2005 the provisions of section 153C have been amended so as to allow the invocation of proceedings u/s153C if any document, an entry or an asset is found in relation or pertaining to a person other than the searched person, which has a bearing on the assessment of total income as per the provisions of the I T Act. Hence the word "incriminating", as used by the courts in context of section 153C, needs to be applied in the context of section 153A also which has to be seen as something which can have a bearing on the assessment of correct total income u/s2(45) as per provisions of the Act. 2.3 The expression 'have a bearing on determination' as used u/s 153C also has a wide connotation which implies that the nexus of the seized documents/ assets to income should only be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 270A and 271AAB as explained above while considering as to what material would constitute incriminating for the purposes of assessment of total income under section153A /C. 2.4 The provisions of section 153A/153C are not the normal assessment provisions like 143(3); rather they are curative provisions to plug the mischief of evasion of taxable income based on evidences found in pursuance to search. Hence, if on account of search, the facts and circumstances suggest that any entry already appearing in books or accepted in earlier assessments based on documents submitted at that point of time, are camouflaged or manipulated or reflected to be in the nature or from a source which is different from the real nature or source as appearing from the evidences found during a subsequent search, then such material/ facts coming to fore now will definitely constitute an incriminating material. In consequence of the same the earlier recorded entries /earlier admitted documents and evidence shall have no force as genuine evidence. If it were held not to be so, then the purpose of 153A would be defeated as it would fail to prevent the mischief, which it sought to prevent just because the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions: (i) Whether the change of opinion based on material is permissible while making assessment? (ii) What are the conditions and to what extent the AO can dislodge the claims already accepted/ claimed / allowed, etc in earlier proceedings? (iii) Whether u/s 153A, the AO can disturb the findings arrived on an issue, whether explicitly or otherwise, in earlier assessments concluded u/s 147/143(3) when it is found that the AO has been misled by placing evidences due to suppression or misrepresentation of facts, which were subsequently found to be doubtful based on evidences gathered? 3.1 There is a distinction between a mere change of opinion and a change of opinion based on fresh facts. The later would imply that the earlier conclusions of the AO were misled by placing evidence on suppression or misrepresentation of material facts. An order passed by the AO relying upon such make belief documents, suppressed or misrepresented facts, which were later found to be not true, shall become void or voidable, as the case may be. Under such circumstances, the acceptance of any claim, relief etc in any earlier order shall also have no binding force in any subsequent proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitions of law abundantly make clear that the AO also being a quasi-judicial authority, while functioning under the Act, shall also be bound by similar principles of jurisprudence. Hence, for the purposes of assessment of total income u/s 153A also, any findings given in respect of any claim /relief in earlier proceedings shall stand vacated by operation of legal principles (as held byth eApex court above), where it is found that in earlier proceedings the AO has been misled by suppression or misrepresentation of material factsor by producing only make belief documents, which were not found to be genuine subsequently based on emergence of new facts during enquiries. Hence the view that the AO cannot rescind from accepting the documents admitted earlier is not a gospel truth which can be applied in each and every circumstance. 3.2 Further the Apex court in ITO Vs. Techspan India (P.) Ltd. 92 taxmann.com 361(SC) observed as under: Whether before interfering with proposed re-opening of assessment on ground that same is based only on a change of opinion, Court ought to verify whether assessment earlier made has either expressly or by necessary implication expressed an opinion no ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in March 2016, it was Rs. 0.01/- as in March 2015 and -0.48/- as in March 2014. Similarly, the other financials parameters of the said company cannot justify the price in excess of Rs. 500/- at which the Appellant claims to have sold the said shares to obtain the Long Terms Capital Gains. It is not explained as to why anyone would purchase the said shares at such high price. The Tribunal goes on to observe in the impugned order as follows: "10. With such financials and affairs of business, the purchase of share of face value Rs. 10/- at the rate of Rs.491/- by any person and the assessee's contention that such transaction is genuine and credible and arguing to accept such contention would only make the decision of the judicial authorities a fallacy. 11. The evidences put forth by the Revenue regarding the entry operation fairly leads to a conclusion that the assessee is one of the beneficiaries of the accommodation entry receipts in the form of long-term capital gains. The assessee has failed to prove that the share transactions are genuine and could not furnish evidences regarding the sale of shares except the copies of the contract notes, cheques received against the ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of purchase and sale of shares, it can be a good reason to treat the transactions as bogus. The differences of the case of Udit kalra attempted by the Ld. AR does not add any credence to justify the transactions. The Investigation Wing has also conducted enquiries which proved that the assessee is also one of the beneficiaries of the transactions entered by the Companies through multiple layering of transactions and entries provided. Even the BSE listed this company as being used for generating bogus LTCG. On the facts of the case and judicial pronouncements will give rise to only conclusion that the entire activities of the assesseeis a colourable device to obtain bogus capital gains. The Hon'ble High Court of Delhi in the case of Udit Kalra, ITA No. 220/2009 held that the company had meager resources and astronomical growth of the value of the company's shares only excited the suspicion of the Revenue and hence, treated the receipts of the sale of shares to be bogus. Hon'ble High Court has also dealt with the arguments of the assessee that he was denied the right of cross examination of the individuals whose statements led to the enquiry. The ld. AR argument that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee in the above case was dismissed by the Hon'ble Apex Court vide its order dated 22.11.2019 SLP (C) No. 26864/2019. 5. Evidentiary value of admission of statement recorded u/s. 132(4): The Hon'ble Rajasthan High Court in the case of CIT vs Ravi Mathur held that the statement recorded u/s. 132(4) of the Act have great evidentiary value and it can not be discarded in a summary and cryptic manner, by simply observing that the assessee retracted from his statement. In the case of Bannalal Jat Construction (P.) Ltd vs ACIT (2019) 106 Taxmann.com 128 (SC) where high court upheld addition made by authorities below relying uppn statement made in course of search proceedings by director of assessee company, since assessee failed to discharge its burdon that admission made by director in his statement was wrong and said statement was recorded under duress and coercion, SLP filed against of High Court was to be dismissed. In the present group cases admission made by assessee's under 132(4) of the Act are squarely covered with the judgement. 6. In the appellant cases the penny stock script for accommodation entry traded was "SPLASH MEDIA" MIDLAND POLYMERS LIMITED, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party information to the assessee who has prima-facie discharged the initial burden of substantiating the purchases through various documents is a serious error and entire addition was deleted. As in the present case, no such report was supplied, therefore, the judgment of Hon'ble Calcutta High Court in the case of Swati Bajaj is not applicable to the case of assessee. 2. The assessee is based in Rajasthan. All the Courts/Tribunals within the jurisdiction of Hon'ble Rajasthan High Court are bound by the decision of Hon'ble Rajasthan High Court. 3. Hon'ble Rajasthan High Court in the case of PCIT vs Sanjay Chhabra D.B. ITA No. 22/2021 noted that prejudice is caused to the assessee when material used against him is not provided and opportunity of cross examination is not provided: It was submitted before the Hon'ble Court that the Tribunal erred in holding that the information and statements recorded by Investigation Wing could not be taken into consideration while making assessment as such material was not disclosed nor an opportunity was accorded for cross-examination of the assessee. It was submitted before the Hon'ble Court that Tribunal did not examine the case on touchsto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 taxmann.com 37 (Rajasthan) Hon'ble Rajasthan High Court has held that in the said there were several suspicious circumstances as indicated by AO, however, the findings of AO were more on presumption rather than on cogent proof. Further, AO failed to show that documents placed on record by the assessee were false, fabricated or fictitious. 4.4 CIT vs Pushpa Malpani [2012] 20 taxmann.com 597 (Rajasthan) "...3. Upon hearing learned counsel for Revenue and perusing impugned order, we find that whether or not sale of shares and receipt of consideration thereof on appreciated value is essentially a question of fact. CIT(A) and Tribunal have both given reasons in support of their findings and have found that at the time of transactions, the broker in question was not banned by SEBI at the time of transaction and that assessee had produced copies of purchase bills, contract number share certificate, application for transfer of share certificate to demat account along with copies of holding statement in demat account, balance sheet as on 31st March, 2003, sale bill, bank account, demat account and official report and quotations of Calcutta Stock Exchange Association Ltd. on 23rd Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the shares also remained in the account of the appellant after earning of the long term capital gain. 10. Learned A.R. contention is that no statement of the Investigation Wing was given to the assessee which has any reference against the assessee. 11. In support of its contention, learned A.R. also cited an order of Coordinate Bench in ITA No. 62/Ahd/2018 in the matter of Mohan Polyfab (P.) Ltd. v. ITO wherein ITAT has held that A.O. should have granted an opportunity to cross examine the person on whose statement notice was issued to the assessee for bogus long term capital gain. But in this case, neither statement was supplying to the assessee nor cross examination was allowed by the learned A.O. Therefore, in our considered opinion, assessee has discharged his onus and no addition can be sustained in the hands of the assessee." 7.2 CIT vs Odeon Builders (P.) Ltd [2019] 110 taxmann.com 64 (SC) Hon'ble Supreme Court held that if the addition was based on third party information gathered by Investigation wing then addition cannot be made unless such information is provided to the assessee and opportunity of cross examination is provided moreso when assessee placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06) "...not allowing the assessee to cross-examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected" 8. It is submitted that the court cannot turn blind eye to the evidences unless proved wrong and decide on the basis of assumptions and presumptions. Reliance is placed on the decision of Hon'ble Supreme Court in case of PCIT vs Krishna Devi [2022] 138 taxmann.com 150 (SC) wherein SLP filed against the decision of Hon'ble Delhi High Court in the case of PCIT vs Krishna Devi [2021] 126 taxmann.com 80 (Delhi) was dismissed. Hon'ble Delhi High Court categorically noted that the Court has to decide the issue on the basis of evidence and proof and not suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the assessee. If the revenue has failed to bring evidence on record that money changed hands and there was agreement to convert una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained. 12. Mr. Hossain's submissions relating to the startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent. With regard to the claim that observations made by the CIT(A) were in conflict with the Impugned Order, we may only note that the said observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect evidences and jumping to circumstantial evidences is not justified even in reference to the decision of Hon'ble Calcutta High Court. 16. The ld. AR of the assessee in addition to the written submission submitted that the revenue has not challenged the findings of the ld. CIT(A) on technical ground and now therefore, they cannot challenge that finding of the ld. CIT(A) at this forum. The ld. CIT(A) in the proceeding before him given a fair chance to revenue substantiate their case. The remand report specifically called for before deciding the appeal on technical ground asking the AO confirm whether any incriminating material found or not? Even he has not mentioned the fact that the report of the Investigation Wing of Kolkatta is available before him or not. The ld. AO vide letter dated 10.08.2018 confirmed the fact that there is no incriminating material and the ld. CIT(A) has after recording the detailed findings and following binding decisions allowed the appeal of the assessee on the issue of LTCG claimed by the assessee as exempt. The ld. AR of the assessee submitted that based on the retraction affidavit the confession u/s. 132(4) cannot be binding since the same was und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the appeal of the assessee. Thus, the revenue cannot take a plea that they have not received fair change to represent their verdict before CIT(A). The ld. AO in the remand report categorically confirmed that in this case there is no incriminating material found in the course of search [ order of CIT(A) page 27 para 11.2 ]. Based on this non disputed fact the ld. AR of the assessee contended that since there is no incriminating material found during the course of search and seizure action, the ld. AO is not empowered to make any addition in the total income of the assessee. It is a settled position of law that there cannot be a review under the garb of reassessment proceeding under section 153A of the Act. Therefore, the proposed reassessment proceedings are absolutely in abuse of process of law, illegal and bad in law. The provisions of section 153A cannot be applied in respect of assessment which has already been completed unless some incriminating material/information comes into the possession/knowledge of the AO during the course of search proceedings. Since the assessment for the assessment year 201112 was not pending as on the date of search and there is no incriminating mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee 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 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 all the share transactions were absolutely genuine and assessee has filed following documents to support their contentions: * Shares were purchased online through recognized stock exchange in all the cases; * Payment of purchases consideration towards shares purchased was made through banking channel; * Shares were got dematerialized soon after they got purchased; * Shares were sold online through recognized stock exchange; * Sale consideration was received through banking channels. 19. The ld. AR of the assessee demonstrated before us that the assessee engaged in share trading on regular basis and the transactions in respect of which exemption u/s 10(38) is denied/Short term capital loss is added back were not the solitary transactions in shares. At this junct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an High Court in the case of PCIT Vs. Shri Sanjay Chhabra in Income Tax Appeal No. 22/2021 held that the addition based solely on statement later retracted, without anything more, could not be justified in law and thus had not admitted the appeal of the revenue on this aspect and the revenue not produce any contrary binding decision so as to substantiate their plea. The relevant finding of the Jurisdictional Rajasthan High Court is as under: The argument advanced on the basis of the principle propounded by the Supreme Court in the case of Sumati Dayal (supra), does not apply to the facts of the present case at all. The Tribunal's findings are based on material placed on record. The aspect of human probability, in the present case, only goes against the Revenue because in the present case, a raid was conducted and in that process, statement is said to have been recorded under Section 132(4) of the I.T. Act, which was, later on, retracted by the Assessee. In a situation like this, where the office premises are sealed for many days and during that period, a statement is said to have been recorded under Section 132 (4) of the I.T. Act, the Tribunal's view that only the basis of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income for such AYS will have to be computed by the AOS as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. I other words there will be only one assessment order in respect of each of the six AYS "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A 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 Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Appellate Tribunal (ITAT) in 3761/Del/2011 pertaining to the Assessment Year 2002-03. The question was whether the learned CIT (Appeals) had erred in law and on the facts in deleting the addition of Rs. 89 lacs made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 ('ACT) on bogus share capital. But, the issae was whether there was any Incriminating material whatsoever found during the search to justify initiation of proceedings under Section 153A of the Act. 2. The Court finds that the order of the CIT(Appeals) reveals that there is a factual finding that "no incriminating evidence related to share capital issued was found during the course of search as is manifest from the order of the AO." Consequently, it was held that the AO was not justified in invoking Section 68 of the Act for the purposes of making additions on account of share capital. 3. As far as the above facts are concerned, there is nothing shown to the court to persuade and hold that the above factual determination is perverse. Consequently, after considering all the facts and circumstances of the case, the Court is of the opinion that no substantial question of law arises i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section that additions should be strictly made on the basis of evidence found in the course of the search or other post-search material or Information available with the Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A 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." 58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. (supra) as well as the above two decisions and observed as under: "31. What distinguishes the decisions both in CITV. Chetan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two. decisions that they do not hold that additions can be validly made to income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "assess" and "reassess", which have been found at more than one place in Section 153A of the Act as under: "26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place 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 or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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." 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla (supra) beginning with the Gujarat High Court in Saumya Construction (P.) Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading "Assessment in case of search or requisition". It is "well settled as held by the Supreme Court in a catena of decisions that the heading or the Section Can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court In the case of CITV. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year.' 62. Subsequently, in Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchase, manufacturing and sales in our regular books of accounts but it is also fact that some time due to some factors like inability of accountant, our busy schedule and some family problems, various purchases and sales of Supari, Gutka and other items dealt by our firms is not entered and shown in the regular books of accounts maintained by our firms." 65. Therefore, there was a clear admission by the Assessees in Smt. Dayawanti Gupta (supra) there that they were not maintaining regular books of accounts and the transactions were not recorded therein. 66. Further, in answer to Question No. 11, the Assessee in Smt. Dayawanti Gupta (supra) was confronted with certain documents seized during the search. The answer was categorical and reads thus: "Ans:- I hereby admit that these papers also contend details of various transactions include purchase/sales/manufacturing trading of Gutkha, Supari made in cash outside Books of accounts and these are actually unaccounted transactions made by our two firms namely M/s. Asom Trading and M/s. Balaji Perfumes." 67. By contrast, there is no such statement in the present case which can be said to constitute an admission by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee." 69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Smt. Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYS 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYS." 24. The Hon'ble Delhi High Court has concurred with the view as taken in case of Kabul Chawla (supra) as well as the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in case of Principal CIT vs. Meeta Gutgutia was dismissed vide order dated 2nd July, 2018. There are series of decisions on this issue including the decision of Hon'ble Jurisdictional High Court in case of M/s. Jal Steel India vs. ACIT (supra) wherein the Hon'ble High Court has held in para 23 to 30 as under : "23. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under: "19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub-Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition "shall abate". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of hose six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken. 25. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating. material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. 26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e counsel for the appellant if taken to its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded up to the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). 30. Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made." 26. As it is evidently clear that not only in the assessment order there is no mention, reference or finding that the additions have been made by the AO on the basis of any incriminating material found during the course of search and seizure in the case of the assessee but in the remand proceeding the ld. CIT(A) has specifically raised the issue in remand proceeding based on the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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/s 2(45) needs to be assessed for all the 6 AYs for which the AO is mandated to issue notice u/s153A. However, to support of the said view the ld. AO did not bring any binding decision of the view that he advanced before us. The ld. DR has also relied upon the judgments which cited in his written submissions are also considered by us but at the same time are not applicable to the facts and circumstances of the present case. The ld. DR has cited the recent judgment in the favour of revenue in the case of Swati Bajaj wherein the Calcutta High Court has confirmed the addition of LTCG. Against this we have considered the detailed note of the ld. AR of the assessee who has distinguished the fact of that case also. The ld. DR has admitted that there are divergence of judicial opinion on the question of whether assessment u/s. 153A can be restricted to only the incriminating material seized during the search or whether the AO can also take a view based on something which might be noticed otherwise. The ld. DR submitted that the department has not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that in this case there is no incriminating material found. The ld. DR appearing on the behalf of the revenue has merely relied on the investigation done by the Investigation Wing in the case of various searched conducted by the department and the statement of the various persons recorded at the time. The ld. AO heavily relied upon on the statement of Shri Anil Agarwal who he has retracted from his statement and even the statement recorded in this case of the assessee was also retracted. In all these processes we have not seen any reasons as to why and how the order of the ld. CIT(A) is not correct. As the ld. 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. CIT(A) has based on the arguments of the assessee followed the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the respondent that notice in respect of the Assessment Years 2000-01 and 2001-02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter into this controversy." As regards the second question, the Hon'ble Supreme Court held, inter alia, that the existence of incriminating material for interfering with completed assessments on the date of search was a jurisdictional fact failing which, no assessment was possible for those years u/s 153C of the Act. It was further affirmed that the incriminating material had to pertain to the four assessment years in question i.e. A.Ys 2000-01 to 2003-04 and since the finding of the facts at para-9 of the order of ITAT revealed that the material as per the satisfaction note belonged to A.Y. 2004-05 or thereafter which were not the four assessment years in question, no addition could be made in respect of the said assessment years. The ratio decidendi of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 153A of the Act. For ease of reference, the relevant provisions of sections 153C and 153A are reproduced as under:- Assessment of income of any other person. "153C (1)Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion,jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A :]......" Assessment in case of search or requisition. "153A. Notwithstanding anything contained in section 139, section 147, section 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 ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating material. Section 153A of the Act was the subject matter of interpretation by the Hon'ble Delhi High Court in the case of Kabul Chawla (supra) and several other High Courts across the country which uniformly held that the existence of incriminating material, in respect of the assessment years whose assessments stood concluded on the date of search, is a mandatory requirement to assess or reassess those years. Some of the other judgments are cited as under : i. Pr. CIT v. Vikas Telecom Ltd. [2022] 135 taxmann.com 362/286 Taxman 238 (Delhi HC) ii. Pr. CIT v. Allied Perfumers (P.) Ltd. [2021] 124 taxmann.com 358/279 Taxman 185/431 ITR 237 (Delhi HC) iii. CIT v. RRJ Securities Ltd. [2015] 62 taxmann.com 391/[2016] 380 ITR 612 (Delhi HC) iv. Pr. CIT v. v. Meeta Gutgutia [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526 (Delhi HC) v. CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78/232 Taxman 270/374 ITR 645 (Bombay HC) vi. Smt. Smrutisudha Nayak v. Union 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cifically talks of section 153A. It may further be seen that the Hon'ble Supreme Court at para-18 of their order, relied upon and affirmed the paras 9 and 10 of the order of the Hon'ble ITAT. It is trite law that when the Hon'ble Supreme Court decides an issue, the orders of the authorities below merge with the order of the Supreme Court as has been held in the following judgments : i. V.M Salgaocar & Bros (P) Ltd v. CIT (2000) 110 Taxman 67/243 ITR 383 (SC) ii. Smt. Tej Kumari v. CIT (2001) 114 Taxman 404/247 ITR 210 (Patna) (FB) iii. A.V. Papayya Sastry v. Government Of A.P. (2007) 4 SCC 211 iv. CIT v. Tejaji Farasram [1953] 23 ITR 412/AIR 1954 Bom 93(Bombay HC) v. CIT v. Amritlal Bhogila & Co [1958] 34 ITR 130/1958 AIR 868, 713(SC) vi. Shankar Ramchandra Abhyankar v. Krishnaji Dattatreya Bapat AIR 1970 SC 1 (SC) vii. Kunhayammed v. State Of Kerala [2000] 113 Taxman 470/245 ITR 360/(2000) 6 SC 659 (SC) viii. Haryana Financial Corporation & ... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should only be reopened under the provisions of the first proviso to s. 153A of the Act and not otherwise. 10. In this regard, we have perused various legal propositions. First, we have perused the decision of this Tribunal in the case of Kumar & Co. case (supra) and para 26 of Kumar & Co's. case (supra) for the asst. yr. 2000-01 and the same reads as follows : "25. Thus, we find that the seized documents belong to the assessee by way of limited ownership and they are not dumb documents as advocated by the learned counsel for the reason mentioned above. However, they are not found to be incriminating documents for the asst. yr. 2000-01. The document may not be a dumb document and therefore a speaking one, but they must be the document with prima facie incriminating information too. Such incriminating nature of the seized document is an essential factor for switching on the proceeding under s. 153C. In other words, the document seized must not 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that are pending on the date of search and those assessment years where specific incriminating documents/transactions or asset seized exist, can be re-opened under the first proviso to section 153A of the Act and not otherwise. Being consistent with the finding of clearly holding that for the purpose of making the assessment of concluded assessments u/s 153C of the Act, the requirement of the existence of incriminating material is a sine qua non. 34. The Hon'ble Supreme Court while deciding the issue arising in section 153C of the Act have applied their mind by referring to and approving the specific portion dealing with section 153A of the Act by the Hon'ble ITAT and have explicitly held that the assessment or reassessment which has to be made in accordance with the provisions u/s 153A of the Act once the satisfaction note is drawn u/s 153C, has to be based on the incriminating material relating to each of the assessment year which 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 conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only when the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year. Hence, the Legislature in their wisdom has now agreed with the various earlier decisions starting with Kabul Chawla (supra) and have introduced new provisions to actually mean that for assessing or re-assessing any year beyond 3 years, consequent to search on or after 1st April, 2021, the requirement of incriminating material is mandatory. Hence, in view of the said amendment applicable to search on or after 1st April, 2021, this support the view that the intention of the Legislature even in the past was that concluded assessments should not be disturbed unless incriminating material was found in respect of the same. Disturbing concluded 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued to the assessee asking so as to why the same amount should not be added to total income as interest paid from undisclosed sources. The assessee replied that the amount represents the additional interest asked by the finance broker which was not paid by the assessee. Finding not favour with the reply of the assessee the ld. AO added the said sum as interest paid from undisclosed sources. The assessee has disputed the said addition before the ld. CIT(A) and submitted the fact that the additional interest which is in dispute were not paid and whatever interest paid is duly accounted in the books. But ld. CIT(A) confirmed the addition and aggrieved assessee has challenged the said addition before us. 40.2 On this issue the explanation rendered by the assessee before the lower authority is briefly narrated here in below: The explanation given in this regard before the ld.AO is summarized as under: (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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 ld.AO without raising any doubts. Thus the assessee has duly discharged the burden of explaining the entries in the pen-drive found in possession of an employee of the assessee, so far as it pertained to the assessee. Ld. AO, except the so called entries, has failed to bring on 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties whether any finding of any person recorded and/or the statement of the person under whose possession this PEN drive found is recorded or not? In response it has been confirmed that there is no finding about the veracity of this PEN drive in the orders of the lower authorities. Therefore, working recorded in this PEN drive is merely an information recorded by that person and whatever financial transaction related to that information is recorded in the books and are already explained before the lower authorities and there is not dispute on this aspect. The revenue has made this addition in the hands of the assessee as protective addition only based on working made in this PEN drive. Therefore, the bench has directed revenue to call the factual information from the AO during the hearing of these appeals. The ld. AO categorically confirmed that the against that protective 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the premises of one of the employee, Sh. Kailash Chand Khandelwal does not relates to the appellant in particular or the persons of the assessee group. However, the Ld. CIT(A) rejected the contention of the assessee and stated that the pen drive found from the premises of Sh. Kailash Chand Khandelwal belongs to the assessee group and some of the appellant specifically mentioned in column No. 2 of spread sheet. The seized material is lying with the office of ACIT, Central Circle-4, Jaipur. If any further clarification is needed on this issue, the same may be obtained from that office. Case records for A.Ys. 2010-11, 2011-12, 201-13 and 2013-14 (One volume each) are enclosed herewith." 40.4 Based on the stated facts, the ld. AR of the assessee vehemently argued when in the report substantive addition is not made based on the findings of 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se parties are not questioned on that 2.4% found recorded in the Excel-Sheet and same were also not taxed on substantive basis. There cannot be any protective addition without making the substantive addition and Revenue did not controvert the argument of the AR of the assessee and has also not supported by any judicial decision so as to confirm the order of the lower authorities. Thus, the 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 veracity. Therefore, based 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 disal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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