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TMI Blog2024 (8) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-18 dated 31.12.2018. Since the issues in these appeals are common, these are clubbed together, heard together and disposed of by this common order for the sake of convenience. 3. The assessee filed common additional ground in ITA Nos. 984, 986/Bang/2023 for assessment years 2013-14 & 2015-16 under Rule 11 of the I.T. Act along with petition as follows: "Ground No. 9A: Without prejudice to the above, there was no transaction with the said contractors during the Previous Year 201213 and hence no addition was called for in this AY and thus the addition made by the AO is liable to be deleted." Similar additional ground in assessment year 2015-16. 3.1 With regard to above additional ground, the contention of the assessee counsel is that in this two assessment years 2013-14 & 2015-16, there was no transaction with the said contractors which is considered as a bogus and there cannot e any disallowance since the main issue has been remitted back to the file of ld. AO to consider the books of accounts of the assessee. This ground is also should go back to the ld. AO if there is no transaction with the said contractors as narrated in the assessment order in AY 2013-14 & 2015-16 and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 8-10 4 Annexure-A/3: Letter dated 17.12.2018 11-11 5 Revised Computation of Income 12-19 6 Copy of bills and vouchers for expenditure under the head 'Promotion-Sales schemes and discounts expenses'. 20-312 7 Copy of bills and vouchers for expenditure under the head 'Carriage outward expenses'. 313-1383 (iv) ITA Nos - 985/BANG/2023 A.Y 2014-15 Application under Rule 29 of Income Tax Appellate Tribunal Rules, 1962 INDEX Sl.No Particulars Page No. 1 Application u/r 29 of ITAT Rules, 1962 1-6 2 Annexure-A/1: Letter dated. 24.07.2017 7-7 3 Annexure-A/2: Letter dated 25.10.2018 8-10 4 Annexure-A/3: Letter dated 17.12.2018 11-11 5 Revised Computation of Income 12-18 6 Copy of bills and vouchers for expenditure under the head 'Promotion-Sales schemes and discounts expenses'. 19-876 7 Copy of bills and vouchers for expenditure under the head 'Carriage outward expenses'. 877-1825 (v) ITA Nos - 986/BANG/2023 A.Y 2015-16 Application under Rule 29 of Income Tax Appellate Tribunal Rules, 1962 INDEX Sl. No Particulars Page No. 1 Application u/r 29 of ITAT Rules, 1962 1-6 2 Annexure-A/1: Letter dated. 24.07.2017 7-7 3 Annexure-A/2: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same under two heads, namely, (1) Promotion - Sales schemes and discounts expenses and (2) Carriage outward expenses. In the said statement recorded u/s 131(1A) of the Act in the office of the investigation wing of the I T Department, the CMD of the Company had categorically stated that the company has maintained all the bills and vouchers related to Promotion - Sales expenditure as well as Carriage outward expenditure. However he was made to state that to the extent of the amount mentioned therein, the company was then unable to produce the bills / vouchers and hence the same may be disallowed. The said declaration was obtained in in lieu of the declaration obtained from the management on 4th and 7th November 2016. The final declaration so obtained from the MD is as under: 7.3 He submitted that the CMD had agreed to make the above mentioned surrender on the basis of the clear understanding and assurance given to him that Company would be given the opportunity to produce the bills/ vouchers before the AO at the time of the assessment and that if he gets satisfied with the same, no disallowance would be confirmed. Accordingly, when the ITRs were filed, the company duly mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouchers in respect of the additional income offered in the ITRs under 'protest' and to exclude the same from total income. Thus, the appellant was not allowed opportunity to substantiate the expenses genuinely incurred for the purpose of business and duly supported by the underlying documents like bills and vouchers. It is submitted that this is a case which is covered by the situations visualized under Rule 29 of the ITAT Rules, 1963. The authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence on the subject disallowances included under protest in the ITR. This is also a case where this Hon'ble Tribunal would require the additional evidence to enable it to pass order. This is also a case where the additional evidences are required to do substantial justice to the case as the 'cause of justice' has taken a big hit in the whole process culminating into the impugned order. 7.6 He submitted that pertinently, the income that can be assessed to tax under section 153A of the Act is only that income which is based on the incriminating material found during the search u/s 132 of the Act as held by the Apex Court in CIT v. Abhisar Buildwel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of the year and stored in godowns. Bills and vouchers etc of a particular head of expenditure cannot be separately taken out without breaking the bound books with a risk of the left margins getting torn. Hence the Appellant has, on sample basis, broken open few volumes of such book for each year for the period as above and producing the same for admission as additional evidence with a prayer to allow production of balance documents of the year on being convinced of the bona fide submission of the Appellant in the interest of justice. 7.10 He submitted that the non-submission of the present additional evidences before the AO or CIT(A) were not willful nor intentional. In this regard the appellant respectfully relies upon the ratio of the decision of the Hon'ble High Court of Delhi in the case CIT v. Text Hundred India Pvt. Ltd., (2013) 351 ITR 57 wherein at Para-13 of the Judgment, it was held that Rule 29 enables the Tribunal to admit any additional evidence which would be necessary to do substantial justice in the matter. Their Lordships further observed that the various procedures, including that relating to filing of additional evidence, is a handmade of justice and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on 24.10.2018 (filed on 25.10.2018) written one more letter showing the details of expenditure which is kept on record. The assessee filed one more letter before DCIT Central Circle-1(1), Bangalore on 17.12.2018 filed on (18.12.2018), stating that in the final declaration Shri Paul P. John agreed for certain disallowances under the head trade discounts, repair & maintenance and carriage outwards as they were unable to produce the bills during the time of search and requested extra time which were not provided. Now they are in a position to provide the same and requested the department to check the same and give them necessary credit/refund of taxes paid. On failure to get any relief from ld. AO on this count, the assessee also taken up this issue before ld. CIT(A) in all assessment years. However, the ld. CIT(A) not considered this issue by observing that there was an admission from the employees of the assessee company as well as Paul P. John, MD of the assessee company and stated that business income was not properly accounted by the assessee. Even during the assessment proceedings, the assessee did not file any documents in support of claim of assessee. If the claim of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CMD of the Assessee Company. Notice u/s. 153A was issued on 29.06.2017 for the AYs 2011-12 to 2016-17. In response to the notice u/s. 153A, the assessee filed the return of come for the relevant AYs, the details of which are as under: 10.2 The details of undisclosed income as per the return of income filed by the assessee in response to notice u/s 153A, för the AYs 2011-12 to 2016-17 are as under: 10.3 Pursuant to the issue of notice u/s 153A, the Income assessed in the orders passed by the AO u/s 153A r.w.s. 143(3) r.w.s. 153D, dated 31.12.2018 for the AYs 2011-12 to 2016-17 and u/s 143(3) r.w.s.153D 2017-18 dated 31.12.2018, are as under: 10.4 The additions made by the AO in the assessment order for the relevant AYs on various issues on which the Assessee has filed appeals, are as under: Against this assessee is in appeal before us. 10.5 The assessee has filed a ground-wise chart in these assessment years and the ld. A.R. has limited his arguments to the grounds mentioned in the chart only. 11. First common ground for our consideration in ITA Nos. 982 & 983/Bang/2023 is that the assessment framed in these assessment years is bad in law as these assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will be case where return has not attained finality. Consequently, AO would have authority/jurisdiction to assess the entire income, similar to jurisdiction in regular assessment u/s 143(3). 4. Return of income filed by the assessee. Intimation passed or not u/s 143(1) and time limit for issue of notice u/s 143(2) has expired. Return of income of the assessee shall be treated as having being accepted and attained finality. AO loses jurisdiction to verify the return of income Since, no assessment would be pending there would be no abatement of any proceedings. Accordingly, the scope of assessment u/s 153A would be restricted to incriminating material found during the course of search. 5. Notice u/s 143(2) issued and assessment pending u/s 143(3) Pending regular assessment proceedings would abate and would converge/merge in proceedings u/s 153A. Accordingly the scope of assessment under section 153A would cover the pending return filed as well and would not be restricted to incriminating material found during the course of search. 6. Assessment u/s 143(3) completed. Since regular assessment proceedings have been completed & are not pending, there would be no abatement of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come as admitted during the search. From above it is clear case of concealment of income by the assessee and hence penalty proceedings u/s 271(1)(c) of the Act is initiated separately. 14.2 Regarding bogus carriage outward expenses the ld. D.R. submitted that during the course of the search, it was noticed that JDPL was inflating the carriage outwards to certain extent as the same modus followed under the head of sales promotion expenses. During the course of the search the same has been confronted to Sri Krishnan, Director of JDPL on 3.11.2016 and she drew our attention to the relevant portion of the statement which is reproduced below: 14.3 The same facts were confronted to the Chairman of M/s. JDPL, Sri Paul P. John on 27.2.2017 and on 6.3.2017 and he admitted that M/s. JDPL had not maintained the proper bills and vouchers for carriage outwards. Statement was recorded from Sri Paul P John on 6.3.2017 and she drew our attention to the relevant portion of statement which is reproduced below: 14.4 She submitted that the assessee company has offered a sum of Rs. 1,39,45,150/- in its return of income as admitted during the search. From above it is clear case of concealment of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, CFO of M/S. JDPL Sri. Krishnan, Director of JDPL has been admitted that, income earned from return trip transport income was not properly accounted in the books of accounts. She drew our attention to the relevant portion of Sri Krishnan's statement which is reproduced below: 14.10 She submitted that the director of the company Sri. Paul P John did not accept that income earned out of return trips of trucks was not accounted. However, the facts are different from the statement recorded from Sri. Mohan Duraiswamy, Sri. Mathew, Sri. Srinivasan, Sri. N Krishnan of M/S. JDPL. Considering the above facts, it is understood that Rs. 8 lakhs per month was being earned from these unaccounted transport services. 14.11 She submitted that it could be seen from the profit and loss account enclosed to the return of income filed by the assessee that the assessee was offering certain incomes under the head other income. The assessee was given a show cause letter on 11.12.2018 to bring to tax a sum of Rs. 96,00,000/- and was asked to furnish the breakup of the other income. The assessee produced the breakup of the other income along with ledger copy. It could be seen from the documents prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h action. In our opinion, this ground cannot be entertained at this stage in view of the insertion of explanation to section 132(1) with retrospective effect from 1.4.1962 by Finance Act, 2017. The said explanation prefers the appellate authorities to go into the reasons recorded by the concerned Income Tax authority for directing the search against the assessee. This view is fortified by Hon'ble Karnataka High Court in the case of Pratibha Jewellery House Vs. CIT 88 taxmann.com 94 (Karn.), wherein held as follows: "That even the law has been amended by insertion of the aforesaid Explanation by Parliament in Section 132 of the Act by the Finance Act, 2017 with retrospective effect from 1.4.1962. That Explanation also prohibits the Appellate Authorities to go into the reasons recorded by the concerned Income Tax Authority for directing Search against the assessee or tax payer. (iii) That this Amendment came after both, ITAT passed the order in the present case on 21.11.2014 as also the learned CIT(A) passed the impugned order on 11.2.2015. Nonetheless, retrospective effect of the said Amendment, will have its effect on the present case as well so long that the said Amendment hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from transport business, (ii) Undisclosed income from bogus contractors, (iii) Inflated bogus purchase and inflated transport expenses (c) The additional ground is that there is no transaction with the said contractors during the assessment year 2013-14 and 2015-16 and hence no addition called for in these assessment years. 18.1 The ld. A.R. submitted that there was no incriminating material found during the course of search action. The ld. AO exclusively relied on the statement recorded u/s 132(4)/131 of the Act from the employees as well as from the MD of the assessee company, as such, the assessee retracted the same before the ld. AO and also offered the additional income not produced which shall be deleted. Further, it was submitted that even otherwise, assessee could produce all the necessary bills, vouchers and receipts in support of the various claims of expenditure made in the books of accounts of the assessee. For this purpose, he relied on various judgements as follows: A. Claim to be entertained even if not made in ITR and income to be assessed and tax to be collected as per Art 265 of Constitution: For this proposition, he relied on the following judgeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tifies the claim and does not stand in the way of the evidences found and the assessment made in this regard. 19.2 Further, she relied on the following case laws: (i) Judgement of Hon'ble Supreme Court of India in the case of Video Master Vs. JCIT reported in (2015) 378 ITR 374 (SC), wherein held as under: "A search and seizure operation was carried on at premises of the assessee' firm and others where in partner of the assessee disclosed certain undisclosed income. Accordingly, an addition was made to the income of the assessee. The Tribunal held that statement made by partner could be used as evidence and accordingly upheld the assessment order. The High Court dismissed appeal of the assessee. Held that it is not possible to say that this is a case of no evidence at all inasmuch as evidence in the form of the statement made by the assessee himself and other corroborative material are there on record." (ii) Judgement of Hon'ble High Court of Kerala in the case of CIT, Kozhikode Vs. O. Abdul Razak reported in (2013) 350 ITR 71 (Kerala) where held as follows: "As self-serving retraction, without anything more cannot dispel statement made under oath under section 132(4)". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e permitted to take advantage of his own illegal acts, that it was his duty to place all facts truthfully before the assessing authority, that if he fails to do his duty She cannot be allowed to say that assessing authority failed to establish suppression of income, that the facts are within his personal knowledge and therefore it was the burden of the assessee to prove that there was no suppression. Thirdly, the Tribunal has stated that there was no corroborative material to substantiate the contents of the loose papers found during the search. We are not impressed by this reason at all. The papers are not denied or disputed by the assessee. The CIT (Appeals) has found that the partners of the assessee firm had admitted to the practice of suppressing the profits. The papers themselves show two different rates, one higher and the other lower and on comparison with the sale bills it has been found that the sale bills show the lower rate and these findings have not been denied by the assessee. The Tribunal, therefore, erred in looking for some other corroboration to substantiate the contents of the loose papers, overlooking that the loose papers needed no further corroboration and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions and perused the materials available on record. The lower authorities made the addition by observing as under: As seen from the above, during the course of search action, statement was recorded from Shri Paul P. John on 27.2.2017 and 6.3.2017and he has admitted that assessee has not maintained proper bills and vouchers for the promotion of sales schemes and discount expenses and on 6.3.17 as answer to question No. 40, he submitted that total expenditure incurred from assessment years 2010-11 to 2016-17 is as follows: 20.1 Out of this, he agreed that the following expenditure for these assessment years to be disallowed: 20.2 Further, vide statement recorded from Shri Krishna, Contractor of the assessee company on 3.11.2016 admitted in question No. 6 that assessee is engaged in inflating carriage outward expenditure under head sales promotion expenses in these assessment years. This has been confirmed by Paul P. John in his statement recorded on 27.2.2017 and 6.3.2017 as answer to question No. 41 20.3 Further, there was seized material marked as A/JDPL/12 which was put to the assessee cashier Shri Mathews who has stated as follows: 20.4 This fact has been confro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly as if such return were a return required to be furnished under section 139. (b) Assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years; Provided further that assessment or reassessment, if any relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) of section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of issue raised before us and assessee prayed before us that the assessment in the case of assessee to be completed on the basis of audited books of accounts and not on the basis of admission or offer made in the course of search action vide statement recorded u/s 132(4)/131 of the Act. 20.11 In our opinion, these additions cannot be based alone on statement recorded u/s 132(4) of the Act, it should be corroborated by seized material/incriminating material suggesting impugned additions. Now we will consider various decisions for the above proposition. 20.12 In the case of CIT Vs. Dr. N. Thippa Setty (322 ITR 525) (Karn.), the jurisdictional High Court has held as under: "Held, dismissing the appeals, that it was clear that the statements made by the assessee under section 132(4) of the Act were retracted not once but twice and that the Department had accepted the retraction. No cogent and valid reasons had been assigned by the Assessing Officer for reopening the assessment. There were no good or sufficient reasons for reopening of the assessment under section 148 of the Act against the assessee." 20.13 Further, the ld. AO cannot solely rely on the statement recorded u/s 132(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt recorded at such odd hours cannot be considered to be a voluntary state ment, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence, there is no reason not to disbelieve the retrac tion made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has com mitted an error in ignoring the retraction made by the assessee. [Emphasis supplied] 22. Further, the position with respect to whether a statement recorded under Section 132(4) of the Act could be a standalone basis for making assessment was clarified by this Court in the case of CIT v. Harjeev Aggarwal2, wherein, it was held that merely because an admission has been made by the assessee during the search operation, the same could not be used to make additions in the absence of any evidence to corroborate the same. The relevant paragraph of the said decision is extracted herein below: - "20. In our view, a plain reading of section 158BB(1) of the Act does not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the case of M/s Pavitra Realcon Pvt. Ltd. And M/s Delicate Real Estate Pvt. Ltd. are accepted. Since the assessee succeeds on this legal ground, we refrain ourselves from adjudicating the issue on merit as far as these two cases are concerned." 25. Also, the Supreme Court in the case of CIT v. Abhisar Buildwell (P) Ltd., has clarified that in case no incriminating material is found during the search conducted under Section 132 of the Act, the AO will have no jurisdiction to make an assessment. The relevant paragraph is reproduced herein below: - "36.4. In case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132-A of the 1961 Act. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provision while speaking of AYs' falling within the block of six AYs' or for that matter all years forming part of the block of ten AYs', appears to have been put in place to cover all possible contingencies. The aforesaid provisions clearly appear to have been incorporated and made applicable both with respect to Section 153A as well as Section 153C ex abundanti cautela. Which however takes us back to what had been observed earlier, namely, the existence of the power being merely enabling as opposed to a statutory compulsion or an inevitable consequence which was advocated ***** 56. We also bear in mind the pertinent observations made in RRJ Securities when the Court held that merely because an article or thing may have been recovered in the course of a search would not mean that concluded assessments have to "necessarily" be reopened under Section 153C and that those assessments are not liable to be revised unless the material obtained have a bearing on the determination of the total income. This aspect was again emphasised in para 38 of RRJ Securities with the Court laying stress on the existence of material that may be reflective of undisclosed income being o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment block being enlarged to ten AYs' consequent to the addition of the stipulation of "relevant assessment year" and which was defined to mean those years which would fall beyond the six year block period but not later than ten AYs'. The block period for search assessment thus came to be enlarged to stretch up to ten AYs'. The 2017 Amending Act also put in place certain prerequisite conditions which would have to inevitably be shown to be satisfied before the search assessment could stretch to the "relevant assessment year". The preconditions include the prescription of income having escaped assessment and represented in the form of an asset amounting to or "likely to amount to" INR 50 lakhs or more in the "relevant assessment year" or in aggregate in the "relevant assessment years". C. Section 153C, on the other hand, pertains to the nonsearched entity and in respect of whom any material, books of accounts or documents may have been seized and were found to belong to or pertain to a person other than the searched person. As in the case of Section 153A, Section 153C was also to apply to all searches that may have been undertaken between the period 01 June 2003 to 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 153A. F. While the identification and computation of the six AYs' hinges upon the phrase "immediately preceding the assessment year relevant to the previous year" of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it "from the end of the assessment year". This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology "immediately preceding" when it be in relation to the six year period and employing the expression "from the end of the assessment year" while speaking of the ten year block." [Emphasis supplied] 29. It is thus seen that in order to determine block of six AYs, one must first identify the FY in which the search occurred, leading to the identification of the AY relevant to the previous year of the search. The block of six AYs will then be those immediately preceding the AY relevant to the search year. For a search assessment under Section 153C of the Act, the only difference is that the previous year of the search is replaced by the date or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the adjudicating authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the adjudicating authority he has specifically mentioned that such an opportunity was sought by the assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the adjudicating authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross- examination of the said dealers could not have brought out any material which would not be in possession of the appellant themselves to explain as to why their exfactory prices remain static. It was not for the Tribunal to have guesswork as to for what purposes the appellant wanted to crossexamine those dealers and what extraction the appellant wanted from them." [Emphasis supplied] 32. Additionally, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y arise merely by mistake, defect or omission in notice. The said Section reads as under: - 292-B. Return of income, etc., not to be invalid on certain grounds.-No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. 34. Reliance can also be placed upon the decision in the case of CIT v. Micron Steels P. Ltd.11, whereby, it was held that the jurisdictional defects cannot be cured under Section 292B of the Act and they render the entire proceedings null and void. 35. In the present case, it is seen that the Revenue has failed to allude to any steps which were taken to determine that the seized material belonged to the respondent-assessee group. Notably, the satisfaction note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also observed that department has not been able to make out a clear case of taxing such income in the hands of the applicant firm on the basis of these documents. The petitioner, Common Cause, impugned the orders before the Hon'ble Supreme Court. Dismissed the petition Supreme Court clarified that the evidence that had surfaced was not credible and cogent. The Attorney General contended that documents which have been filed by the Birla as well as Sahara Group are not in the form of Account books maintained in the regular course of business. They are random sheets and loose papers and their correctness and authenticity even for the purpose of income mentioned therein have been found to be unreliable having no evidentiary value, by the concerned authorities of Income Tax. Analysing the veracity of the evidences procured from the companies, the Supreme Court, relied upon the ratio laid in V.C. Shukla case and observed that the entries in loose sheets of papers are not in the form of "Books of Accounts" and has held that such entries in loose papers/sheets are irrelevant and not admissible u/s 34 of Indian Evidence Act, and that only where the entries are in the Books of Accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the investment made by Shri Anil Kumar in his own business out of the loans stated to have given by the assessee. In the above facts and circumstances there is no reason to disbelieve the statement given by the assessee that the payments were given for meeting petty cash or miscellaneous expenses. The Ld.CIT(A) following the decisions of Hon'ble Jurisdictional High Court as well as this Tribunal held that on the basis of notings and loose sheets found from third parties and the statement of third parties, the additions cannot be made without having corroborative / independent evidences. For the sake of clarity and convenience, we extract relevant part of the order of Ld.CIT(A) in para No. 6.2 of page No. 13 which reads as under: "6.2. I have considered the assessment order and submissions of the appellant. It is seen that the addition made by the AO is solely based on the social media (whatsapp) messages exchanged between the appellant and Mr. Anil Kumar, an employee of M/s Navaratna Estates. A statement u/s.132 recorded from Mr. L, Anil Kumar during the course of Search during which Mr. L. Anil Kumar was questioned and he explained the nature and 'details of messages ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Accordingly, we do not see any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. The appeal of the revenue on this ground is dismissed." 20.16 In the light of the above decisions, statements recorded u/s 132(4) of the I.T. Act, 1961 solely cannot constitute as incriminating material so as to make these additions. 20.17 The Hon'ble Supreme Court in Andaman Timber Industries v. Commissioner of Central Excise, 281 CTR 241 (SC) held as follows:- "Not allowing the assessee to cross-examine the witness 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. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross-examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot covered by the explanation of the assessee. This was pure surmise and had no basis in the evidence, which was on the record of the proceedings. Facts proved or admitted may provide to support further conclusions to be deduced from them, which conclusions may themselves be conclusions of fact and such inferences from facts proved or admitted could be matters of law. The court would be entitled to intervene if it appears that the fact finding authority has acted without any evidence or upon a view of the facts, which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question. The High Court treated this finding of the Tribunal as a mere finding of fact and recognised this position in effect but went wrong in applying the true principles of interference with such findings of fact to the present case. Really speaking the Tribunal had not indicated upon what material it held that Rs. 30,000 should be treated as secret profit or profits from undisclosed sources and the order passed by it was bad. The assessee had furnished a reasonable explanation f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissible evidence and could not form the basis of any inference against the adverse parties. We have also examined the records and we find that this Shri Sukla was examined by a number of officers. The Assistant Director of Investigation examined him on August 4, 1987, and in reply to question No. 2 in that deposition he confirmed that he was a dealer in lubricating oil since 1977. In reply to question No. 3, he confirmed having been assessed to income-tax. Again, in reply to question No. 4, he explained that he used to purchase lubricating oil from different garages as well as through various brokers. Such lubricating oil was processed by him in his factory for sale. All payments were received by him through account payee cheques. In reply to question No. 5, he stated that he had seven full-time employees whose names are mentioned by him. He also claimed to have maintained books of account like sales books, purchase books, cash books and sale bills. In reply to question No. 18, he, on his own, stated that his big customers were the Reliance Oil Mills and Eastern Commercial Enterprises, the assessee, in the present reference. As for his cash withdrawals, he explained that his bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to rebut the case against him. As a result we decline to answer the question." 20.21 As held by the Hon'ble Calcutta High Court in the above judgment, in the present case, evidence collected by the department from employees cannot be considered as a reliable unless it is substantiated. 20.22 Reliance on this incomplete statement cannot be appreciated as held by the Hon'ble Supreme Court in the case of Kishinchand Chellaram v. CIT, 125 ITR 713 (SC) as follows:- "Held, reversing the decision of the High Court, (i) on the facts, that the two letters dated February 18, 1955 , and March 9, 1957 did not constitute any material evidence which the Tribunal could take into account for the purpose of arriving at the finding that the sum of Rs.1,07,350 was remitted by the assessee from Madras, and if these two letters were eliminated, there was no material evidence at all which could support its finding. The statements of managers in those two letters were based on hearsay, as in the absence of evidence, it could not be taken that he must have been in charge of the Madras office on October 16, 1946, so as to have personal knowledge. The department ought to have called upon the manager to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction, if, the assessee company was otherwise entitled to in law, given the fact that the relevant material was already available on record. 11. Mr. Ravikumar, in support of the appeal, contended to the contrary and in this behalf, placed great emphasis on the judgment of the Supreme Court in GOETZE's case. A perusal of the said judgment would show that the issue which arose for consideration before the Supreme Court, was, as to whether a claim for deduction could be made by way of a letter before the Assessing Officer, if, it did not form part of the original return. The Supreme Court ruled and, while doing so, to our minds, carefully noted that, though the Assessing Officer did not have the power to entertain the claim for deduction made after the return was filed, otherwise than by filing a revised return, it did not exclude the power of the Tribunal to consider the claim in exercise of its appellate power under Section 254 of the Act. This aspect of the matter is quite clearly brought to light in the operative paragraph of the judgment, i.e., paragraph 4. 11. 1. For the sake of convenience, the said observations are extracted hereafter: ''4. The decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the matter threadbare, made the following observations: ''Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have aright to file an appeal/cross objections before the Tribunal. We fail t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oticed its own judgment in the case of Jute Corporation of India Ltd. v. CIT (1991) 181 ITR 688. This view has been adopted by two Division Benches of this Court in the matter of Ramco Cements Ltd. vs. DCIT (2015) 55 taxmann.com 79 (Madras) and, in the judgment rendered in: T.C. (A) No. 878 of 2014 dated 18.11.2014, titled CIT vs. Malind Laboratories P. Ltd. As a matter of fact, the Delhi High Court has also, in two separate judgments, come to the same conclusion. These judgments are rendered in: CIT vs. Sam Global Securities Ltd., (2013) 38 taxmann.com 129 (Delhi) and CIT vs. Jai Parabolic Springs Ltd., (2008) 306 ITR 42 (Delhi). 12.4. Furthermore, a Division Bench of the Bombay High Court has also taken the same view in the judgment rendered in CIT vs. Pruthvi Brokers & Shareholders P. Ltd., (2012) 349 ITR 336 (Bom.). The issue, with which, the Bombay High Court was grappling, was, that a claim for deduction under Section 43B of the Act had not been made qua the relevant assessment year in the original return, but was made via a letter. The Division Bench of the Bombay High Court held even while assuming and, in that sense, accepting the argument of the Revenue, that though, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act, 1922 which is almost identical to Section 251(1)(a). The court held as under: (ITR p. 229) If an appeal lies, Section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under Section 31(3)(a) in disposing of such an appeal the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income Tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is co-terminus with that of the Income-tax Officer. He can do what the Income tax Officer can do and also direct him to do what he has failed to do.(emphasis supplied) The above observations are squarely applicable to the interpretation of Section 251(1)(a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is coterminus with that of the Income Tax Officer, if that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Of course, while permitting the assessee to raise an additional ground, the Appellate Assistant Commissioner should exercise his discretion in accordance with law and reason. He must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The satisfaction of the Appellate Assistant Commissioner depends upon the facts and circumstances of each case and no rigid principles or any hard and fast rule can be laid down for this purpose. [emphasis supplied] 17. The underlined observations in the above passage do not curtail the ambit of the jurisdiction of the appellate authorities stipulated earlier. They do not restrict the new/additional grounds that may be taken by the assessee before the appellate authorities to those that were not available when the return was filed or even when the assessment order was made. The sentence read as a whole entitles an assessee to raise new grounds/make additional claims :- if the ground so raised could not have been raised at that particular stage when the return was filed or when the assessment order was made.... or if the ground became available on account of change of circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable income. 14. In so far as the judgment of the Supreme Court in the matter of Stepwell is concerned, according to us, it has no applicability to the issue raised in the instant appeal. In that case, the Tribunal appears to have allowed the claim of the assessee for deduction under Section 35 B of the Act without examining the facts of the case. The assessee, evidently, had neither made a claim before the ITO nor the AAC nor, had he, furnished particulars of the expenditure incurred by it. It is in this context that the Supreme Court observed that the onus of proving facts and obtaining the benefit of a deduction lay on the assessee. It was further observed that since the assessee failed to prove its claim before the ITO or the AAC, the Tribunal could not have allowed the claim on assumption of facts. 15. As indicated above, the ratio on the said judgment is entirely different and therefore, has no applicability to the facts of the instant case. 16. Similarly, the judgment of the Allahabad High Court in the matter of G.S. Rice Mills is distinguishable, inasmuch as the assessee had neither made a claim before the ITO nor was any material placed on record in support of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of DCIT Vs. CMS Securities Ltd. (2016) (47 ITR 378), the Tribunal held as under: "3. We have gone through the orders of the lower authorities as well as order of the Tribunal for A.Y 2008-09. The solitary issue involved in the Revenue's appeal is that in the return of income the assessee had made claim on account of bad debts written off for Rs. 96,35,224/-. During the course of assessment it was found by the assessee that the assessee had by mistake claimed lesser amount on account of bad debts, and therefore, it made further claim on account of bad debts written off of Rs. 40,81,493/- u/s. 36(1)(vii) of the Act. The additional claim made by the assessee was rejected by the AO in view of the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. v. CIT, 284 ITR 323. Being aggrieved, the assessee filed an appeal before the Tribunal, wherein the claim of the assessee on account of bad debts made during the course of the assessment proceedings was allowed on the ground that the aforesaid judgment of the Hon'ble Supreme Court was not applicable on the appellate authority. The CIT(A) also relied 3 M/s. CMS Securitas Ltd. upon the circular issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td reported in 115 TTJ (Del) TM 752, wherein the Tribunal has held as under: "I have carefully considered the questions, the orders of the IT authorities and the rival contentions. The precise difference between the two learned Members is regarding the question whether the CIT(A) ought to have first decided the question of entertainability of the assessee's higher claim of depreciation by a letter and not by a revised return, before deciding the merits of the claim. In Goetze (India) Ltd. v. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC), the Supreme Court held that the assessee can make a claim for deduction, which has not been claimed in the return, only by filing a revised return within the time allowed. In the same decision, it was made clear that the power of the Tribunal to admit an additional ground under s. 254 is not affected by its decision. It was however clarified that the case was concerned with only the power of the assessing authority and not the appellate authority. Under s. 250(5), the CIT(A) has the power to allow the appellant to go into any ground of appeal not specified in the grounds of appeal if he satisfied that the omission of the ground from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on the order of ld. CIT(A). He further submitted that the assessee actually written of amount of Rs. 1,87,70,011/- as bad debts and the provisions made in the earlier year of the aggregate amount of Rs. 82,91,575/- had been disallowed in the earlier year. 6. The above facts have not been disputed by ld. DR that the assessee has actually written off in the assessment year under consideration as bad debts of Rs. 1,87,70,011/-. The Honble Apex Court in the case of T.R.F. Ltd. V/s CIT (2010) 323 ITR 397 (SC) has held that "w.e.f. 1-4-1989, it is enough if bad debt is written off as irrecoverable in accounts of assessee to satisfy the condition of Section 36(1)(vii) of the Income-tax Act, 1961". In view of the above amendment w.e.f. 1-41989 the assessee is entitled to claim deduction as it would satisfy the purpose of the Act. In view of above, in the facts of case, we uphold the order of ld. CIT(A) and reject ground of appeal taken by the department. Hence, appeal of the department is dismissed." 6. We have gone through the aforesaid judgment of the Tribunal and other judgments relied upon by the Tribunal in its order. The claim on account of bad debts written off is now set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had included that dividend income in its return for the year in question, but there was no estoppel in the Income-tax Act and the assessee having itself challenged the validity of taxing the dividend during the year of assessment in question, it must be taken that it had resiled from the position which it had wrongly taken while filing the return. Quite apart from it, it was incumbent on the income-tax department to find out whether a particular income was assessable in the particular year or not. Merely because the assessee wrongly included the income in its return for a particular year, it could not confer jurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year. Therefore the income from dividend was not assessable during the assessment year 1958-59, but it was assessable in the assessment year 1953-54. It could not, therefore, be taxed in the assessment year 1958-59." 8. Further reliance is placed by us on another judgment of Hon‟ble Gujarat High Court, in the case of, S.R. Koshti 276 ITR 165 (Guj) in which relief was granted to assessee with following observations: "The authorities under the Act are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing heard, pass such orders thereon as it thinks fit. 14. Reference may be made to National Thermal Power Co. Ltd. vs. CIT (1999) 157 CTR (SC) 249 (1998) 229 ITR 383 (SC), where the Supreme Court observed that: "The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. We do not see any reason to restrict the power of the Tribunal under s. 254 only to decide the grounds which arise from the order of the CIT(A). Both the assessee as well as the Department have a right to file an appeal/cross-objection before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier." 15. Reference may also be made to Gedore Tools (P) Ltd. vs. CIT (2000) 161 CTR (Del) 472 : (1999) 238 ITR 268 (Del), wherein the apex Court decision in National Thermal Power Co. Ltd. (supra) has been followed. 16. In the case of Jute Corporation of India Ltd. vs. CIT (1990) 88 CTR (SC) 66 : (1991) 187 ITR 688 (SC) while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. Therefore, there is no infirmity in the order of the Tribunal." 12. Further, similar view has been addressed by the Tribunal also in A.Y 2008-09 by relying upon another judgment of coordinate Bench in the case of JCIT v. Hero Honda Finlease Ltd., 115 TTJ 752 (Delhi) (TM). Thus, respectfully following these judgments, and in the given facts of the case, we find that the ld. CIT(A) has rightly allowed the claim made by the assessee during the course of assessment proceedings and that the order passed by him is within the provisions of law, and nothing wrong therein could be pointed out by the ld. DR, and therefore, we uphold the same. 13. As a result, the appeal of the revenue is dismissed." 20.25 In the case of Srikanth G. Shah v. ITO (ITAT Mum) (2008) (300 ITR 324) (AT) it was held as under: "18. We have given a careful consideration to the rival submissions made before us. We have also carefully gone through the relevant facts and the judicial pronouncements cited before us. In our view, the grounds raised by the assessee in appellate proceedings to the effect that the interest income disclosed by him in the returns of income filed in response to notices issued Under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision in the case of Tanubai D. Desai (supra) is fully applicable to the facts of the assessee's case. In that case, the assessee had even appropriated the interest income for his own benefit. Nevertheless, the High court held that the income cannot be brought to the tax in the hands of the solicitor. Any other action can be taken against the assessee for unauthorisedly converting the clients money for his own benefit but such income cannot be brought to the charge of tax. The case of the assessee is on a better footing. The assessee has maintained separate account and has also apportioned the interest income to the respective accounts of the clients. It is notable that even the learned CIT(A) held on merits that the interest income was not taxable legally in the hands of the assessee. At para 4.2 of his order, the learned CIT(A) held as under: From the facts of the case, the Rules of Hon'ble Bombay High Court and the judgments relied upon by the appellant, it is clear that interest accrued on bank account referred above, would not belong to the appellant as long as the appellant apportioned the interest accrued to the respective clients' account. 20. Thus, while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 147 of the Act, he cannot make such disallowances in respect of matters which have reached finality in the original assessment and which arc not in the nature of any escapement of income within the meaning of Section 147. The learned Counsel for assessee pointed out that the original assessment was made Under Section 143(1) and thereafter no notice Under Section 143(2) was issued. Notices for the relevant assessment years were issued Under Section 148 for the limited purpose of bringing to the charge of tax the interest income. However, during the course of re assessment proceedings, the assessing officer made enquiries regarding various expenses and thereafter he made disallowances. It is argued that this is not permissible under law. The learned Counsel strongly relied on the decision of Hon'ble Punjab & Haryana High Court in the case of Vipan Khanna v. CIT 255 ITR 220 (P&H). The relevant part of the ratio of this case is reproduced from the head notes as under: According to the law laid down by the Hon'ble Supreme Court in CIT v. Sun Engineering works p. ltd 198 ITR 297, when proceedings Under Section 147 of the Act are initiated, the proceedings are open only qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a return under Section 139 or in response to a notice issued under Sub-section (1) of Section 112 or Section 118 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1. Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2. For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely: (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understood the income or has claimed excessive loss, deduction, allowance or relief in the return; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are validly initiated the jurisdiction of the ITO is not restricted to the portion of the income that escapes assessment. Section 34 in terms says that once the ITO decides to re-open the assessment he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice Under Section 22(2) and may proceed to assess or re assess such income, profits or gains. Therefore, once assessment is reopened by issuing a notice under Subsection (2) of Section 22, the previous under assessment is set aside and the whole assessment proceedings start afresh. Once valid proceedings are started Under Section 34(1)(b) the ITO not only had the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year. 28. The Hon'ble Supreme Court was concerned with the interpretation of Section 34 of the Indian Income tax Act, 1922, which is now replaced by Section 147 of the Income Tax Act, 1961. It was observed by the Hon'ble Supreme Court that once valid proceedings arc started Under Section 34(1)(b), the ITO not only had jurisdiction but it was his du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d starts the assessment proceedings be novo giving the right to an assessee to reagitate matters, which he had lost during the original assessment proceedings, which had acquired finality, is not only erroneous but also against the phraseology of Section 147 of the Act and the object of reassessment proceedings. Such an interpretation would be reading that judgment totally out of context in which the question arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete "law" declared by this court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions, which were before this court. A decision of this court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the court must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the section is confined only to such income which has escaped assessment. It does not extend to reconsidering generally the concluded earlier assessment. Claims which have been disallowed in the original assessment proceedings cannot be permitted to be reagitated on the assessment being reopened for bringing to tax certain income, which had escaped assessment because the controversy on reassessment is confined to matters, which are relevant only in respect of the income, which had not been brought to tax during the course of original assessment. A matter not agitated in the concluded original assessment proceedings also cannot be permitted to be agitated in the reassessment proceedings unless relatable to the item sought to be taxed as "escaped income". Indeed, in the reassessment proceedings for bringing to lax items, which had escaped assessment, it would be opened to an assessee to put forward claims for deduction of any expenditure in respect of that income or the non-taxability of the items at all. Keeping in view the object and purpose of the proceedings under Section 117 of the Act, which are for the benefit of the Revenue and not an assessee, an assessee cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any satisfactory explanation. In these circumstances, the assessing officer estimated the expenditure for personal use at around 20%. In these facts, it would be too far fetched to hold that the assessing officer made any roving, fishing or general enquiries so as to make the assessment denovo The assessing officer only observed that personal use cannot be ruled out and therefore he asked the assessee to furnish the details In our view, under Section 147 and in the light of the legal position as discussed above, the assessing officer is within his jurisdiction to disallow part of the expenses which are not wholly and exclusively incurred for the purpose of the assessee s profession 31. Coming to the merits of the disallowances, no material was produced before us to controvert the finding of the learned CIT(A) or to show that no part of the expenditure is in the nature of personal expenditure of the assessee The learned CIT(A) has sustained disallowance merely at 10% of the telephone expenses, motor car and depreciation on motor car In the facts of the case, this cannot be said to be un reasonable or excessive The disallowance of printing and stationery expenses have been deleted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being proper/y instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that on/y legitimate taxes due are collected. This Court, in an unreported decision in case of Vinay Chandu/a/ Satia v. N.O. Parekh, CIT [Spl. Civil Application No. 622 of 1981 dated 20-8-1981], has laid down the approach that the authorities must adopt in such matters in the fo//owing terms: 'The Supreme Court has observed in numerous decisions, including Ramlal v. Rewa Coa/fie/ds Ltd. AIR 1962 SC 361, State of West Benga/ v. Administrator, Howrah Municipality AIR 1972 SC 749 and Babutmal Raichand Oswal v. Laxmibai R. Tarte AIR 1975 SC 1297, that the State authorities should not raise technical pleas if the citizens have a lawful right and the lawful right is being denied to them merely on technical grounds. The State authorities cannot adopt the attitude which private litigants might adopt. " 9. From the above, it is revealed that the income of the assessee should not be over assessed even if there is a mistake m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled any revised return within such time, however, on receipt of an intimation under Section 143(3) of the IT Act, dated 04.05.2014, the petitioner had realized the mistake and filed a rectification return on 09.01.2016. It is true that rectification return was filed nearly after two years from the date of receipt of Section 143(1) intimation. The said rectification return was rejected by the Assessing Officer by proceedings dated 24.10.2017 on the reason that the same was not filed within the time and thus, it is not valid and cannot be sustained. Thereafter, the Assessee filed an application under Section 264 of the IT Act on 25.01.2018, admittedly, within one year from the date of the order rejecting the rectification return. The respondent before whom, the said revision was filed, passed the impugned order, wherein at Paragraph Nos. 9, 10, & 11 he observed as follows: "9. The Assessee in its P&L account had claimed expenditure under the grouping "Compensation to Employees" inclusive of labour charges of Rs. 56,12,426/- wages of Rs. 75,14,652/- and salary and bonus of Rs. 56,55,166/-. However, as against the total of Rs. 1,87,82,244/- the Assessee had entered an amount of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not being an order prejudicial to the assessee, as he thinks fit. b. The [Principal Commissioner or Commissioner] shall not of his own motion revise any order under this section if the order has been made more than one year previously. c. In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier: Provided that the [Principal Commissioner or Commissioner] may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period. d. The [Principal Commissioner or Commissioner] shall not revise any order under this section in the following cases - (a) where an appeal against the order lies to the Deputy Commissioner (Appeals) or to the 4[Principal Commissioner or Commissioner] (Appeals) or to the Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired, or, in the case of an appeal to the 4[Principal Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope under Section 264 of the IT Act, have been considered by the Courts. In a decision rendered by the High Court of Kerala, reported in [2016] 75 taxmann.com 298 (Ker), Transformers & Electricals Kerala Ltd., Vs. Deputy CIT., observed at Paragraph No. 8 as follows: In fact the judgment in Goetze (India) Ltd. (supra) was with reference to the power of the Tribunal under Section 254 of the IT Act which can have no basis for the power to be exercised by the Commissioner under Section 264 of the IT Act. Very wide powers have been conferred on the Commissioner under Section 264 of the IT Act to conduct an enquiry to be made and to pass such orders, as he thinks fit. In the impugned order, the Commissioner proceeds on the basis that the petitioner had not filed a revised return for the year 2008-09. It is pointed out by the petitioner that the time for filing a revised return had already expired and once the said period has expired, revised return cannot be filed. The question is whether, in the absence of filing a revised return, a claim for deduction for the aforesaid amount is permissible for the assessment year 2008-09. As held by a Division Bench in Parekh Brothers (supra), there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m that expressed by the Central Board of Direct Taxes in the Circular extracted above. The order under section 144A dated 31.12.2007 is thus part of the record and ought to have been take into consideration in deciding the petition under section 264 of the Act. The relief provided in terms of section 139(5) is specific to the correction of a wrong statement or an omission in the original return by way of a revised return. The power under section 264 of the Act extends to passing any order as the Principal Commissioner or Commissioner may think fit after making an inquiry and subject to the provisions of the Act, either suo-moto or on an application by the assessee. Though the remedies over lap, power under section 264 is significantly wider and the wisdom of choosing one over the other would really depend on the facts and legal position of each case. 16. In [2018] 402 ITR 271 (Mad), M/s.Bali Trading Pvt. Ltd., Vs. Principal CIT., the learned Single Judge of this Court observed that power under Section 264 of the IT Act, is a wider power and intended to prevent miscarriage of justice. It is also observed therein that the powers under Section 264 of the IT Act, is to enable the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.264, which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessee detracts mistakes because of which he was over-assessed after the assessment was completed. Once it is found that there was a mistake in making an assessment, the Commissioner had power to correct it under s. 264(1). When the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the adjudicatory authority on mere technicalities. It is settled proposition of law that no tax can be levied or recovered without authority of law. Article 265 of the Constitution of India and section 114 of the State Constitution imposes an embargo on imposition and collection of tax if the same is without authority of law. When the commissioner was called upon to examine the revision application under section 264 of the Act, all the relevant material was already available on the record of the assessing officer. The commissioner instead of merely examining whether the intimation was correct based on the material then available should have examined the material in the light of the Circular No. 14(XL-35) : MANU/DTCR/0004/1955 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eating the very purpose and object of granting such ample and wider power to the Commissioner under Section 264 of the IT Act. An apparent injustice or miscarriage of justice need to be set right, notwithstanding the technical objections, if any. While the substantial justice is the King, technicalities are only his soldiers. Certainly, the King can do no wrong and thus, let the soldiers do not stand in his way. 20. At this juncture, it is very relevant and useful to quote the observation of the Apex Court reported in [2013] 4 SCC 97, Laxmibai (Dead) through LRs and another Vs. Bhagwantbuva (Dead) through LRs and others, that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. The Apex Court has also gone to the extent of saying that the Courts may in the larger interests of administration of justice may excuse or overlook a mere irregularity or a trivial breach of law for doing real and substantial justice to the parties. The relevant observation made at Paragraph 49, is extracted hereunder: "When substantial justice and technical considerations are pitted against each other, the cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evied or collected except by authority of law. Therefore, both the levy and collection must be done with the authority of law, and if any levy and collection, later are found to be wrong and without authority of law, certainly, such levy and collection cannot withstand the scrutiny of the above constitutional provision and thus, such levy and collection would amount in violation of Article 265 of the Constitution of India. 24. Therefore, it is apparent on the facts and circumstances of the present case, that a mere typographical error committed by the Assessee cannot cost them payment of excess tax as collected by the Revenue. Certainly, the denial for repayment of such excess collection would amount to great injustice to the Assessee. 25. Even though the Statute prescribes a time limit for getting the relief before the Assessing Officer by way of filing a revised return, in my considered view, there is no embargo on the Commissioner to exercise his power and grant the relief under Section 264 of the IT Act. In other words, for granting the relief to an Assessee, which the Commissioner finds that the Assessee is entitled to otherwise, no time restriction is provided under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit. 20.31 Thus, assessee submitted that even the admitted income admitted by the assessee in the return of income should be confined to the seized material found during the course of search action. If any additional income is offered by the assessee without incriminating material same to be inquired and the computation of income filed and disclosed in the return of income filed in response to notice u/s 153A of the Act to be corrected. He also drew our attention to the additional evidence filed before us to substantiate that there were all evidences in support of claiming of expenditure which could be examined at the end of ld. AO, if necessary. We accede to the request of the assessee counsel in the interest of justice that this is the assessment consequent to search action and the income returned u/s 153A of the Act consequent to search and addition made by ld. AO shall be based on the incriminating material found during the course of search as held by Hon'ble Supreme Court in the case of PCIT Vs. Abhisara Buildwell Pvt. Ltd. in ITA No. 454 ITR 212 wherein it was held that no addition can be made in respect of assessment framed u/s 153A of the Act without any seized material su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o carry on the requisite enquiry on this issue in accordance with law after giving opportunity of hearing to the assessee. Similarly, the additional ground raised by the assessee in ITA No. 984 & 986/Bang/2023 in assessment years 2013-14 & 2015-16 also remitted to the file of ld. AO to decide the issue afresh on the basis of seized/incriminating material found, if any during the course of search action conducted on 3.11.2016. All these grounds of appeals in ground Nos. 5 to 8, 10 & 11 in all these appeals in ITA Nos. 982 to 987/Bang/2024 and also additional ground No. 9A in ITA Nos. 984 & 986/Bang/2023 are remitted to the file of ld. AO to decide the same in the light of our above observations. 21. Next ground No. 9 in this appeal is with regard to approval given u/s 153D of the Act is mechanical. For this purpose, he relied on the judgement in the case of PCIT Vs. Sapna Gupta (2022) SCC Online (Allahabad) 1294 of Hon'ble Allahabad High Court and in the case of CIT Vs. Anju Bansal (2022) SCC Online (Delhi) 4159 of Delhi Bench of Tribunal. However, the assessee was not able to demonstrate how there was no subjective satisfaction recorded for granting approval u/s 153D of the Act by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to the grounds mentioned in this chart only. 26.2 The assessee filed additional evidences in this case in ITA Nos. 838 to 843/Bang/2024. ITA Nos - 838/BANG/2023 M/s. Paul Resorts and Hotels Pvt Ltd. vs DCIT,CC(1)(1), Bengaluru A.Y 2011-12 Application under Rule 29 of Income Tax Appellate Tribunal Rules, 1962 INDEX Sl. No Particulars Page No. 1 Application u/r 29 of ITAT Rules, 1962 1-6 2 Annexure-A/1: Letter dated. 30.10.2018 7-15 3 Annexure-A/2: Letter in dated 30.10.2018 in reply to notice u/s 142(1) of the Act. 16-18 4 Annexure-A/3: Letter dated 17.12.2018 19-20 5 Revised Computation of Income 21-29 6 Copy of bills and vouchers for expenditure under the head 'Travelling Expenditure'. 30-295 7 Copy of bills and vouchers for expenditure under the head 'Repairs and maintenance'. 296-430 8 Copy of bills and vouchers for expenditure under the head 'Commission Expenses'. 431-467 ITA Nos - 839/BANG/2023 M/s. Paul Resorts and Hotels Pvt Ltd. vs DCIT,CC(1)(1), Bengaluru A.Y 2012-13 Application under Rule 29 of Income Tax Appellate Tribunal Rules, 1962 INDEX Sl. No Particulars Page No. 1 Application u/r 29 of ITAT Rules, 1962 1-6 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. 30.10.2018 7-15 3 Annexure-A/2: Letter in dated 30.10.2018 in reply to notice u/s 142(1) of the Act. 16-18 4 Annexure-A/3: Letter dated 17.12.2018 19-20 5 Revised Computation of Income 21-26 6 Copy of bills and vouchers for expenditure under the head 'Travelling Expenditure'. 27-82 7 Copy of bills and vouchers for expenditure under the head 'Repairs and maintenance'. 83-237 8 Copy of bills and vouchers for expenditure under the head 'Commission Expenses'. 238-470 ITA Nos - 843/BANG/2023 M/s. Paul Resorts and Hotels Pvt Ltd. vs DCIT,CC(1)(1), Bengaluru A.Y 2016-17 Application under Rule 29 of Income Tax Appellate Tribunal Rules, 1962 INDEX Sl. No Particulars Page No. 1 Applicattion u/r 29 of ITAT Rules, 1962 1-6 2 Annexure-A/1: Letter dated. 30.10.2018 7-15 3 Annexure-A/2: Letter in dated 30.10.2018 in reply to notice u/s 142(1) of the Act. 16-18 4 Annexure-A/3: Letter dated 17.12.2018 19-20 5 Revised Computation of Income 21-27 6 Copy of bills and vouchers for expenditure under the head 'Travelling Expenditure'. 28-104 7 Copy of bills and vouchers for expenditure under the head 'Repairs and maintenance'. 105-207 8 Copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 in the case of the Group entities. 27.3 He submitted that the Director had agreed to make the above mentioned surrender on the basis of the clear understanding and assurance given to him that Company would be given the opportunity to produce the bills/ vouchers before the AO at the time of the assessment and that if he gets satisfied with the same, no disallowance would be confirmed. Accordingly, when the ITRs were filed the additional income was included in the ITR and taxes were paid the it was conveyed in the covering letter for AY 2011-12 that the same was done under protest. A letter dated 30.10.2018 accompanied the Physical ITR filed u/s 153C of the Act for AY 2011-12. The same was reiterated in the Reply to notice u/s 142(1) of the Act vide letter dated 30.10.2018 for all the AYs involved. Thereafter during the assessment proceedings, it followed it up with a request - both oral as well as written to consider the books of accounts, bills and vouchers etc maintained in respect of all the three subject heads of expenditure and to exclude the additional income included in the ITRs. Kind reference is invited to the letter dated 17.12.2018 wherein after giving background o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covered by the situations visualized under Rule 29 of the ITAT Rules, 1963. The authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence on the subject disallowances included under protest in the ITR. This is also a case where this Hon'ble Tribunal would require the additional evidence to enable it to pass order. This is also a case where the additional evidences are required to do substantial justice to the case as the 'cause of justice' has taken a big hit in the whole process culminating into the impugned order. 27.7 Pertinently, the income that can be assessed to tax under section 153C of the Act is only that income which is based on the incriminating material found during the search u/s 132 of the Act as held by the Apex Court in CIT v. Abhisar Buildwell (P) Ltd., 2023 SCC OnLine SC 481. However, the income that has been assessed by the AO is not based on incriminating material but is based merely on the declaration obtained under pressure without the corresponding incriminating material. As stated earlier, the declaration by way agreeing to disallowance of the expenditure was made with an understanding and assurance that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis producing few vouchers with supporting bills etc for admission as additional evidence with a prayer to allow production of balance documents of the year on being convinced of the bona fide submission of the Assessee in the interest of justice. 27.12 He submitted that the non-submission of the present additional evidences before the AO or CIT(A) were not willful nor intentional. In this regard the assessee respectfully relies upon the ratio of the decision of the Hon'ble High Court of Delhi in the case CIT v. Text Hundred India Pvt. Ltd., (2013) 351 ITR 57 wherein at Para-13 of the Judgment, it was held that Rule 29 enables the Tribunal to admit any additional evidence which would be necessary to do substantial justice in the matter. Their Lordships further observed that the various procedures, including that relating to filing of additional evidence, is a handmade of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of the parties to lead evidence. 27.13 Without prejudice to the above, the Assessee submitted that ITAT is the last fact finding authority under the Act and hence empowered to look into th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he bills, vouchers and receipts. Now the contention of the ld. A.R. is that all the expenditure were properly supported by the bills, vouchers and receipts and there cannot be any bogus expenditure in nature and admission of assessee in statement recorded u/s 132(4) of the Act or u/s 1321 of the Act cannot be basis for addition in the assessment year framed u/s 153C r.w.s. 153A & 143(3) of the Act. In our opinion, we find force in the argument of ld. A.R. These are the searched assessments framed u/s 153A/153C of the Act and which was based on the seized material in case of concluded assessments. Being so, in our opinion, it is appropriate to admit these additional evidences as discussed in the case of M/s. John Distilleries Pvt. Ltd. for the assessment years 2011-12 to 2016-17 in ITA Nos. 982 to 987/Bang/2023. Ordered accordingly. 30. The assessee has raised very lengthy grounds, however at the time of hearing, filed a concise ground in the form of chart making the same as many as 12 grounds. Accordingly, we confined to our adjudication to the grounds mentioned in the chart only. 31. First ground in these appeals is general in nature, which do not require any adjudication. 32. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt years 2011-12 to 2015-16 without any seized material. 35. The ld. D.R. submitted that during the course of search, some vouchers/bills relating to the various expenses were found, specifically travelling and repairing & maintenance expenses. When these were cross checked with the assessee's books of accounts, discrepancies were found and on being confronted with the same with Shri Shelly Thayil, C.O.O. of the assessee company has admitted that company is making some bogus expenses and the same has been utilized for making inadmissible business payments. Thus, she submitted that this is the reason for initiating the proceedings u/s 153C of the Act. She further submitted produced a copy of satisfaction note recorded u/s 153C of the Act in this case, where it has mentioned the document at sl.no.5 clearly show that the assessee M/s. Paul Hotels and Resorts Pvt. Ltd. has bogus commission payments to travel agents, inflated repairs and maintenance expenses, inadmissible business expenses for AY 2011-12 to 2017-18. Hence, notice u/s 153C of the Act was issued. Further, she submitted that the following seized material relating to the present assessee found during the course of search a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 19. We, thus, find 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... howed that there were transactions of sale of development rights and from which profits were generated and taxable for the assessment year 2007-08. Thus, the receipt of Rs. 44 crores as deposit in the previous year relevant to the assessment year 2008-09 and later on became subject matter of the writ petition before the Delhi High Court. That was challenging the validity of notice under section 153C read with section 153A. In dealing with such situation and the peculiar facts that the Delhi High Court upheld the satisfaction and the Delhi High Court found that the machinery provided under section 153C read with section 153A equally facilitates inquiry regarding existence of undisclosed income in the hands of a person other than searched person. The provisions have been referred to in details in dealing with a challenge to the legality and validity of the seizure and action founded thereon. We do not find anything in this judgment which would enable us to hold that the tribunal's understanding of the said legal provision suffers from any error apparent on the face of the record. The Delhi High Court judgment, therefore, will not carry the case of the revenue any further." We, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the search action in the case of M/s. John Distilleries Pvt. Ltd. conducted on 3.11.2016 as held by Hon'ble Supreme Court in the case of Singhad Technical Education Society cited (supra) and in the case of Abhisara Buildwell Pvt. Ltd. reported in 454 ITR 212 wherein held that only when during the course of search undisclosed income was found on unearthing incriminating material during the search, the ld. AO assumed jurisdiction to assess or reassess the total income even in case of completed or unabated assessments. In other words there should be seized material relating to each assessment year found during the course of search to reopen completed assessment, if there is no valid seized material the concluded assessment cannot be reopened. With this observation, we remit this ground relating to framing assessment of unabated assessments consequent to search action to the file of ld. AO for reconsideration. 36.3 In respect of assessment year 2011-12 & 2012-13, ld. A.R. submitted that notice u/s 153A of the Act was issued on 7.9.2018. The order was passed u/s 153C of the Act on 28.12.2018 as the time limit to issue notice for those assessment years has been already lapsed, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent assessee was concerned. In any case, the instant issue was raised for the first time before the Tribunal and, thus, it had not been examined by the lower authorities, therefore, the matter was to be restored to his file for considering the date when the relevant documents were handed over by the Assessing Officer of the person searched to the Assessing Officer of the present assessee and decide this issue accordingly, in the light of our above observations. 37. Next ground in ITA Nos. 838 & 839/Bang/2023 relating to assessment years 2011-12 & 2012-13 is that the assessments are time barred. Since this ground is akin to the earlier ground with regard to framing assessment in case of unabated assessment, this issue is also remitted to the file of ld. AO as discussed in immediate earlier para herein above. 38. Next common ground in all these appeals is with regard to carrying of search action u/s 132 of the Act without according proper satisfaction. 38.1 This common ground in all these appeals of this assessee is dismissed on similar lines as discussed in similar ground in earlier part of this order in the case of M/s. John Distilleries Pvt. Ltd. by placing reliance on the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgements:- 1) CIT vs. Abhisar Buildwell (P) Ltd. (2024) 2 Supreme Court cses 433, 149 taxmann.com 399 (SC), Civil appeal No. 6580 of 2021 C. Tribunal has discretion to admit additional evidence in the interest of justice: For this proposition, he relied on the following judgements:- 1) Goetze (India) Ltd. vs. Commissioner of Income-tax (2006) 284 ITR 323 2) Goetz India CIT vs. Text Hundred India Pvt. Ltd. (2013) 351 ITR 57 3) Fibres & Fabrics International (P) Ltd. vs. ACIT, Circle-11(3), Bangalore (2013) 33 taxmann.com 90 (Bangalore Trib) 4) HL Malhotra & Co. (P) Ltd. vs. DCIT, Circle12(1), New Delhi(2021) 125 taxmann.com 70 (Delhi) D. Extrapolation not permitted in S&S assessment: He relied on the following judgements: 1) CIT v. B. Nagendra Baliga, (2014) 363 ITR 410 2) A. Shivashankar v. DCIT ITA Nos. 617 to 620/Chny/2017 Dated 31.05.2022 (ITAT, Chennai) 3) Sri Devraj Urs Education Trust for Backward Classes v. ACIT, Bangalore ITA No. 500 to 506/Bang/2020 (TAT, Bangalore) 41.5 Further, he submitted that the assessee has filed various letters before ld. AO seeking opportunity to produce evidence in support of the claim of expenditure, which are not consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is reproduced below: 42.2 She submitted that it is evident from the above paragraphs of the order of the AO, that the assessee admitted: a) to claiming bogus expenses in books of accounts, which were accommodation entries b) that the bills and vouchers for such expenses claimed, were not available and could not be produced. 42.3 She submitted that on account of the evidence unearthed during the search and based on admissions of key employees and the CMD, the Assessee filed return of income in response to notice u/s 153C, declaring the undisclosed income in relation to repairs and maintenance, following the admission made in the statements recorded under oath during the search proceedings. Para 7 of the order for the AYs (2013-14 to 2016-17) pertains to "Undisclosed income under the head Bogus commission expenses". During the course of search, various documents were found and seized and impounded, which shows the assessee has paid major commission expenses. The same was confronted with Sri Siva, Accounts Manager and Sri Fazal Sheikh, CFO. Both have admitted in statement recorded u/s 132(4) that they have not maintained any details of the commission paid. She drew our att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the admission of undisclosed income was correct as it was based on incriminating materials and evidence detected during the search proceedings. Even at the stage of filing of return in response to notice u/s 153C, the Assessee consciously chose to file the return, adhering to the admissions of undisclosed income made in the statements recorded under oath. This again proves the fact that the admission of undisclosed income was based on incriminating material which was declared only due to the search proceedings. 42.11 Further she submitted that even during the assessment proceedings Assessee did not file any documents in support of travel expenses, repairs and maintenance and commission paid before the AO. A revised computation contradicting the disclosure made in the return u/s 153C was not filed and neither did the Assessee file a revised return u/s 153C. Thus in the time period from 3.11.2016, when the search was carried out till 31.12.2018, i.e date of passing of order u/s 143(3) rws 153C, Assessee never contested the admission of undisclosed income. However only during the appellate proceedings, it has raised the ground that the undisclosed income pertaining to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de the same only on the basis of seized/incriminating material found during the course of search action and not on stand-alone basis of statement recorded u/s 132(4)/131(1A) of the Act. Accordingly, in this case of assessee also the impugned issues in all these appeals is remitted to the file of ld. AO on similar direction to decide the same after considering the additional evidence filed by the assessee before us. Hence, the ld. AO has to relook into the additional income offered in the return filed in response to notice u/s 153C of the Act as well as addition made by him in the course of framing assessment u/s 153C of the Act as discussed in ITA Nos. 982 to 987/Bang/2024 in the case of M/s. John Distilleries Pvt. Ltd. Accordingly, these impugned issues remitted to the file of ld. AO for reconsideration in the light of above observation. 44. Next ground No. 9 is with regard to approval granted u/s 153D of the Act as mechanical and without application of mind. The assessee has not placed any material to show that approval u/s 153D of the Act was granted in a mechanical manner. Hence, this ground is dismissed. 45. Ground No. 11 is with regard to charging of interest u/s 234A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries Pvt. Ltd., in earlier part of this order, we remit this impugned issue in all these appeals on similar lines to the file of ld. AO to confine the addition only to the extent of incriminating material/seized material found during the course of search and not to make any addition, if there is no seized material solely relying on the statement recorded u/s 132(4)/131(1A) of the Act. 51. Next common ground in these appeals is ground No. 3 which is with regard to assessment which is already concluded and no assessment could be made without any seized material. The ld. A.R. submitted that in assessment years 2014-15 & 2015-16, the assessee has filed return u/s 139(1) of the Act on 26.11.2014 and 30.9.2015 for the assessment years 2014-15 & 2015-16. The assessment has been already concluded u/s 143(3) on 24.10.2016 and 20.11.2017. As such, these assessments are not pending as on date of search on 3.11.2016. In our opinion, only for the assessment year 2014-15, the assessment was completed before date of search that was 24.10.2016. Being so, in case of assessments is concluded and being unabated assessment which assessment cannot be made u/s 143(3) r.w.s. 153C of the Act without any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently during the search. 52.4. After hearing both the parties, we direct the ld. AO to give appropriate deduction towards the income already declared in the survey conducted on 23.9.2016 in accordance with law. Ordered accordingly. 53. Appeals filed by the assessee in ITA Nos. 845 to 847/Bang/2023 are partly allowed for statistical purposes. ITA No. 844/Bang/2023 (AY 2017-18) (M/s. Paul Plathotathil John, Coorg) (Assessee's appeals) 54. The assessee in this appeal is aggrieved against the addition of Rs. 4,10,889/- made towards undisclosed income on account of unaccounted cash transaction. 55. Facts of the case are that during the course of search and seizure action carried out in the entities of the assessee, incriminating documents revealing unaccounted cash transactions were found. These facts have been discussed in para 6.1 to 6.3 of the Assessment order passed. The assessee was confronted with the information's received and his statement on oath was recorded on 06.03.2017. The assessee after going through the documents admitted the cash transactions and declared additional income of Rs. 4,10,14,889/- in the above referred statement recorded. The relevant para of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d just an after-thought. The fact remains that the declaration were made on account of unaccounted cash transaction, which is clearly discussed in the assessment order passed. As such, he observed that the claims made by the assessee vide Ground No. 3 to 5 are found to be devoid of any' corroborative evidences and contradictory to the statement given on oath by the assessee himself. The additions made by the A.O towards undisclosed income admitted amounting to Rs. 51,43,887/- are found to be reasoned. Further, the other additions being contested are on account of income declared and admitted by the assessee himself in the return of income filed. These issues raised clearly reveal the contradictory stands being taken by the assessee to suppress the correct income. As such, the ld. CIT(A) concluded that no interference is called for on the above additions made and dismissed the grounds raised by the assessee. Against this assessee is in appeal before us. 56. We have heard the rival submission and perused the materials available on record. As discussed in earlier para in the case of M/s. John Distilleries Pvt. Ltd. in ITA Nos. 982 to 987/Bang/2023, the issue in dispute in this gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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