A GOVINDARAJ, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, MADURAI, CENTRAL RANGE, MADURAI V. INDIAN OCEAN GARNET SANDS COMPANY PVT LTD, TUTICORIN

ITA 201/CHNY/2024

AI Insights

The case involves a series of appeals by the Revenue against the assessee, M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd., concerning the assessment years 2013-14 to 2017-18. The appeals were based on the additions made by the Assessing Officer (AO) following a search operation under section 132 of the Income Tax Act, 1961, at the premises of the VV Group and the assessee. The AO had made additions on the basis of incriminating materials found during the search at VV Group's premises, which allegedly linked the assessee to unaccounted sales. However, the CIT(A) deleted these additions, stating that no incriminating material was found at the assessee's premises, and the materials from VV Group could not be used to make additions in the assessee's case. The Tribunal upheld the CIT(A)'s decision, agreeing that the additions were not based on any incriminating material found at the assessee's premises.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47046 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Other Referred Cases: PCIT vs Abhisar Buildwell, ACIT v. Saveeta Institute of Medical and Technical Sciences, Shri. Ganesh Trading Company v. CIT, Pullangode Rubber Produce Co Ltd v State of Kerala, Kasmira Singh v. State of Madhya Pradesh
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. CLEMENT RAMESH
• Assessee Lawyers: P. RANGA RAMANUJAM
• Keywords: Set aside; Document seized; Documents seized; Block assessment; Bogus
• Section: 250; 32; 132; 153A; 13; 20

Judgement Text

" आयकरअपीलीयअिधकरण, ’सी’ ा यपीठ,चे\u0011ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0001ीएबीटी. वक , ाियकसद\u0011एवं एवं एवं एवं \u0013ीजगदीश, लेखासद\u001aक ेसम\u0015 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपीलसं./ITA Nos.199 to 203/Chny/2024 िनधा\u0005रणवष\u0005/Assessment Years: 2013-14 to 2017-18 The DCIT, Central Circle-2, Madurai. v. M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd., No.146, Palayamkottai Road, Tuticorin-628 003. [PAN: AAACI 4083 Q] (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) Department by : Mr. R. Clement Ramesh- Kumar, CIT Assessee by : Mr. P. Ranga Ramanujam, CA सुनवाईक\u0017तारीख/Date of Hearing : 21.01.2025 घोषणाक\u0017तारीख /Date of Pronouncement : 09.04.2025 आदेश / O R D E R PER BENCH: These appeals have been preferred by the Revenue against the consolidated order of the Learned Commissioner of Income Tax (Appeals)-19, Chennai (hereinafter in short ‘the Ld.CIT(A)’), dated 29.11.2023 for the Assessment Years (hereinafter in short ‘AY’) 2013-14 to 2017-18 u/s. 250 of the Income Tax Act, 1961 (hereinafter in short ‘the Act’). Since the issues involved in all these appeals are common, they were heard together and are being disposed off by this consolidated order for the sake of convenience and brevity. 2. With the consent of both the parties, the case of the Reven No.199/Chny/2024 for AY 2013 decision shall apply mutatis mutandis facts of the case, as noted, are that, the business of trading of Garnet, Ilmenite, Rutile and Zircon of the Act was carried out in the group concerns of VV Group on 25.10.2018. In the course of the said search, several incriminating materials were seized, which supplied huge quantity of the assessee’s unaccounted sales and therefore, the prem assessee was also subjected to search. The Authorized Officer found a green-colored diary [which was the office of the Head of the inter alia included details of unaccou Group to various business concerns 113, in his view, contained unaccounted business dealings of VV Group with the assessee. Also, another loose as annexure ID marked cash receipts with quantity details were found to be noted, which the GM (Finance & Accounts) of VV Group, in his statement recorded in the course of search, admitted that it contained details o ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::2 :: consent of both the parties, the case of the Reven No.199/Chny/2024 for AY 2013-14 is taken as the lead case mutatis mutandis to other appeals as well. facts of the case, as noted, are that, the assessee is engaged in the Garnet, Ilmenite, Rutile and Zircon. Search u/s 132 of the Act was carried out in the group concerns of VV Group on . In the course of the said search, several incriminating seized, which inter alia suggested that the assessee had supplied huge quantity of Ilmenite to M/s VV Group, which represented unaccounted sales and therefore, the prem assessee was also subjected to search. The Authorized Officer found a [which was marked as ANN/MP/VVTP/B&D/S Head of the Finance &Accounts of M/s VV included details of unaccounted cash payments made by Group to various business concerns; and that the noting’s 113, in his view, contained unaccounted business dealings of VV Group with the assessee. Also, another loose-sheet folder was found and seized exure ID marked ANN/MP/VVPT/LS/S (Sl No. 3), in which certain cash receipts with quantity details were found to be noted, which the GM (Finance & Accounts) of VV Group, in his statement recorded in the course of search, admitted that it contained details of cash payments 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. consent of both the parties, the case of the Revenue in ITA taken as the lead case, which to other appeals as well. The brief is engaged in the . Search u/s 132 of the Act was carried out in the group concerns of VV Group on . In the course of the said search, several incriminating suggested that the assessee had VV Group, which represented unaccounted sales and therefore, the premises of the assessee was also subjected to search. The Authorized Officer found a ANN/MP/VVTP/B&D/S] from Accounts of M/s VV Group, which nted cash payments made by M/s VV at Pages 112 & 113, in his view, contained unaccounted business dealings of VV Group sheet folder was found and seized , in which certain cash receipts with quantity details were found to be noted, which the GM (Finance & Accounts) of VV Group, in his statement recorded in the f cash payments made to one person, Shri K Thambi, who was associated with the assessee. In the post search enquiries, the e premises of VV Group was analyzed in which it was found that several bearer cheques were issued in the Jaypal, who was also associated with the assessee. The AO, after analyzing these material the statement recorded from the key persons of the VV Group arrived at a conclusion that, the VV Group had paid assessee across FYs 2012 2017-18, towards unaccounted sales of incriminating material seized from the premises of VV Group and th sworn statements recorded in the course of search, the AO issued notices u/s 153A of the Act for AYs 2013 additions on account of unaccounted sales made to VV Group were made: AY 2013 2014 2015 2016 2017 ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::3 :: made to one person, Shri K Thambi, who was associated with the assessee. In the post search enquiries, the e-mail back-up taken from the premises of VV Group was analyzed in which it was found that several bearer cheques were issued in the names of many persons, including Mr. Jaypal, who was also associated with the assessee. The AO, after analyzing these materials seized from the premises of the VV Group and the statement recorded from the key persons of the VV Group arrived at a that, the VV Group had paid Rs. 35,95,95,346/ assessee across FYs 2012-13 to 2016-17 relevant to AYs 2013 18, towards unaccounted sales of Ilmenite. On the basis of such incriminating material seized from the premises of VV Group and th sworn statements recorded in the course of search, the AO issued notices u/s 153A of the Act for AYs 2013-14 to 2017-18, in which the following additions on account of unaccounted sales made to VV Group were made: AY Amount added (Rs.) 2013-14 2,24,68,240/- 2014-15 4,67,69,390/- 2015-16 6,35,04,240/- 2016-17 17,51,81,140/- 2017-18 5,16,72,336/- 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. made to one person, Shri K Thambi, who was associated with the up taken from the premises of VV Group was analyzed in which it was found that several names of many persons, including Mr. Jaypal, who was also associated with the assessee. The AO, after seized from the premises of the VV Group and the statement recorded from the key persons of the VV Group arrived at a Rs. 35,95,95,346/- to the 17 relevant to AYs 2013-14 to . On the basis of such incriminating material seized from the premises of VV Group and the sworn statements recorded in the course of search, the AO issued notices 18, in which the following additions on account of unaccounted sales made to VV Group were made: 3. Aggrieved by the above action of the AO, the assessee preferred appeals before the Ld. CIT(A), who vide his consolidated order held that, the incriminating material seized from the premises of the third parties cannot be treated as ‘incriminating material upon the assessee. The Ld. CIT(A) therefore held that, in absence of any incriminating material being found from the premises of the assessee, the additions by way of unaccounted sales made in the unabated assessments of AYs 2013-14 to 2017 party premises, was unsustainable and therefore deleted the same. Aggrieved by this order of the Ld. CIT(A), the Revenue is now in appeal before us. For the sake of convenience, the grounds case for AY 2013-14 is reproduced here “1 The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2 The Ld.CIT(A) erred in deleting the addition of Rs.2,24,68,240/ made towards unaccounted sales quantified on the basis of mail backups seized during the course of search in the case of M/s.V V group. 2.1 The Ld CIT(A) erred in deleting the addition made towards unaccounted Sales made to M/s. V.V.group of companies, though Sri. Ramesh, Managing director of assessee company admitted in his sworn statement that the assessee company made sales to M/s.V V group of companies through Shri.Thangaraj @ Jayapal, employee of assessee company and such sales were partly accounted in the books of ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::4 :: Aggrieved by the above action of the AO, the assessee preferred appeals before the Ld. CIT(A), who vide his consolidated order held that, the incriminating material seized from the premises of the third parties ‘incriminating material found in the course of search’ upon the assessee. The Ld. CIT(A) therefore held that, in absence of any incriminating material being found from the premises of the assessee, the additions by way of unaccounted sales made in the unabated assessments 14 to 2017-18 by relying upon the material seized from third party premises, was unsustainable and therefore deleted the same. Aggrieved by this order of the Ld. CIT(A), the Revenue is now in appeal before us. For the sake of convenience, the grounds raised in the lead 14 is reproduced here-under: 1 The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2 The Ld.CIT(A) erred in deleting the addition of Rs.2,24,68,240/ unaccounted sales quantified on the basis of mail backups seized during the course of search in the case of M/s.V V 2.1 The Ld CIT(A) erred in deleting the addition made towards unaccounted Sales made to M/s. V.V.group of companies, though Sri. sh, Managing director of assessee company admitted in his sworn statement that the assessee company made sales to M/s.V V group of companies through Shri.Thangaraj @ Jayapal, employee of assessee company and such sales were partly accounted in the books of 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. Aggrieved by the above action of the AO, the assessee preferred appeals before the Ld. CIT(A), who vide his consolidated order held that, the incriminating material seized from the premises of the third parties found in the course of search’ upon the assessee. The Ld. CIT(A) therefore held that, in absence of any incriminating material being found from the premises of the assessee, the additions by way of unaccounted sales made in the unabated assessments 18 by relying upon the material seized from third party premises, was unsustainable and therefore deleted the same. Aggrieved by this order of the Ld. CIT(A), the Revenue is now in appeal raised in the lead 1 The order of the learned Commissioner of Income Tax (Appeals) is 2 The Ld.CIT(A) erred in deleting the addition of Rs.2,24,68,240/- unaccounted sales quantified on the basis of mail backups seized during the course of search in the case of M/s.V V 2.1 The Ld CIT(A) erred in deleting the addition made towards unaccounted Sales made to M/s. V.V.group of companies, though Sri. sh, Managing director of assessee company admitted in his sworn statement that the assessee company made sales to M/s.V V group of companies through Shri.Thangaraj @ Jayapal, employee of assessee company and such sales were partly accounted in the books of the assessee and consideration for unaccounted sales was received in the form of cash. 2.2 The Ld.CIT(A) failed to appreciate that the statement of Sri. Ramesh was further strengthened by the sworn statement of Shri.Thangaraj dated 02/02/2019, in which he received uncrossed cheques from M/s.VV group and cash withdrawn were returned to Managing partners of VV group. But Shri. Thangaraj could not provide any evidence to substantiate returning of cash as such. 2.3 The Ld.CIT(A) erred in hol unaccounted cash sales of Ilmenite, Zircon & Rutile was made on the basis of mail backups seized from third party premises and not on the basis of any incriminating materials found in the premises of the assessee company, wit third party premises contain Information relating to the assessee. Since the assessee's premises was also covered during search on the strength of warrant of authorization issued in the name of assessee, the AO considered the addition towards unaccounted sales on the basis of said seized materials in the order u/s.143(3) r.w.s.153A. 2.4 The Ld.CIT(A) erred in failing to appreciate that there is no such restrictive interpretation in the Section 132(4A) and Sec.292 presumption of correctness are applicable only in respect of the books of accounts/documents seized in the premises of searched person and not from third party. 3 For these grounds and any other ground including amendment of grounds that may be proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. 4. Assailing the action of the Ld. CIT(A), the Ld. CIT, DR appearing for the Revenue argued that, the Ld. ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::5 :: assessee and consideration for unaccounted sales was received in the 2.2 The Ld.CIT(A) failed to appreciate that the statement of Sri. Ramesh was further strengthened by the sworn statement of Shri.Thangaraj dated 02/02/2019, in which he stated that he had received uncrossed cheques from M/s.VV group and cash withdrawn were returned to Managing partners of VV group. But Shri. Thangaraj could not provide any evidence to substantiate returning of cash as 2.3 The Ld.CIT(A) erred in holding that the addition towards unaccounted cash sales of Ilmenite, Zircon & Rutile was made on the basis of mail backups seized from third party premises and not on the basis of any incriminating materials found in the premises of the assessee company, without appreciating that materials seized from third party premises contain Information relating to the assessee. Since the assessee's premises was also covered during search on the strength of warrant of authorization issued in the name of assessee, considered the addition towards unaccounted sales on the basis of said seized materials in the order u/s.143(3) r.w.s.153A. 2.4 The Ld.CIT(A) erred in failing to appreciate that there is no such restrictive interpretation in the Section 132(4A) and Sec.292 presumption of correctness are applicable only in respect of the books of accounts/documents seized in the premises of searched person and not from third party. 3 For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored.” Assailing the action of the Ld. CIT(A), the Ld. CIT, DR appearing for the Revenue argued that, the Ld. CIT(A) had narrowly interpreted the 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. assessee and consideration for unaccounted sales was received in the 2.2 The Ld.CIT(A) failed to appreciate that the statement of Sri. Ramesh was further strengthened by the sworn statement of stated that he had received uncrossed cheques from M/s.VV group and cash withdrawn were returned to Managing partners of VV group. But Shri. Thangaraj could not provide any evidence to substantiate returning of cash as ding that the addition towards unaccounted cash sales of Ilmenite, Zircon & Rutile was made on the basis of mail backups seized from third party premises and not on the basis of any incriminating materials found in the premises of the hout appreciating that materials seized from third party premises contain Information relating to the assessee. Since the assessee's premises was also covered during search on the strength of warrant of authorization issued in the name of assessee, considered the addition towards unaccounted sales on the basis 2.4 The Ld.CIT(A) erred in failing to appreciate that there is no such restrictive interpretation in the Section 132(4A) and Sec.292C that the presumption of correctness are applicable only in respect of the books of accounts/documents seized in the premises of searched person and 3 For these grounds and any other ground including amendment of raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and Assailing the action of the Ld. CIT(A), the Ld. CIT, DR appearing for CIT(A) had narrowly interpreted the concept of incriminating material found in the course of search and that, the material, electronic evidence etc., which was seized from the premises of the VV Group, which was searched along with the assessee, indeed constituted incriminating material for the AO to validly frame assessments u/s 153A of the Act in the impugned unabated years. According to the Ld. CIT, DR, it cannot be said that the incriminating material has to be found from the assessee’s premises alone. contended that if any incriminating material is found during further investigation at the premises of third parties connected with the assessee, such material ought to be also treated as incriminating material found in the course of search upon the ass there was no direct evidence linking the email analysis found from the back-up of the electronic evidence with the assessee, but the fact that some of the details of the bearer cheques and email communications were addressed to one Mr. Jaypal, who was associated with the assessee, was reason enough to link the seized material and the contents therein with the assessee. Per contra, the Ld. AR of the assessee supported the findings of the Ld. CIT(A). 5. We have heard the us. The undisputed facts of the case are that, search operation u/s 132 of the Act was conducted both in the case of VV Group and the assessee on ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::6 :: concept of incriminating material found in the course of search and that, the material, electronic evidence etc., which was seized from the premises of the VV Group, which was searched along with the assessee, nstituted incriminating material for the AO to validly frame assessments u/s 153A of the Act in the impugned unabated years. According to the Ld. CIT, DR, it cannot be said that the incriminating material has to be found from the assessee’s premises alone. contended that if any incriminating material is found during further investigation at the premises of third parties connected with the assessee, such material ought to be also treated as incriminating material found in the course of search upon the assessee. He further argued that, though there was no direct evidence linking the email analysis found from the up of the electronic evidence with the assessee, but the fact that some of the details of the bearer cheques and email communications were ressed to one Mr. Jaypal, who was associated with the assessee, was reason enough to link the seized material and the contents therein with the assessee. Per contra, the Ld. AR of the assessee supported the findings of the Ld. CIT(A). We have heard the rival contentions and the material placed before us. The undisputed facts of the case are that, search operation u/s 132 of the Act was conducted both in the case of VV Group and the assessee on 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. concept of incriminating material found in the course of search and that, the material, electronic evidence etc., which was seized from the premises of the VV Group, which was searched along with the assessee, nstituted incriminating material for the AO to validly frame assessments u/s 153A of the Act in the impugned unabated years. According to the Ld. CIT, DR, it cannot be said that the incriminating material has to be found from the assessee’s premises alone. He contended that if any incriminating material is found during further investigation at the premises of third parties connected with the assessee, such material ought to be also treated as incriminating material found in essee. He further argued that, though there was no direct evidence linking the email analysis found from the up of the electronic evidence with the assessee, but the fact that some of the details of the bearer cheques and email communications were ressed to one Mr. Jaypal, who was associated with the assessee, was reason enough to link the seized material and the contents therein with the assessee. Per contra, the Ld. AR of the assessee supported the rival contentions and the material placed before us. The undisputed facts of the case are that, search operation u/s 132 of the Act was conducted both in the case of VV Group and the assessee on 25.10.2018. In the course of search, certain incriminating m pertaining to the assessee were found from the premises of the VV Group. The dispute in the present case revolves around the issue that, as to whether the AO could have legally made addition on the basis of corroborated material found in the cou premises in the assessments framed u/s 153A of the Act for the unabated years. It has now been well settled in law by the Hon’ble Supreme Court in the case of PCIT vsAbhisar Buildwell no addition can be made in unabated assessments in the absence of any incriminating material found in the course of search. The conclusion recorded by the Hon’ble Apex Court at Para 14 of their order is noted to be as follows: “14. In view of the above and for the concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stan (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unear and the other material available with the AO including the income declared in the returns; and ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::7 :: 25.10.2018. In the course of search, certain incriminating m pertaining to the assessee were found from the premises of the VV Group. The dispute in the present case revolves around the issue that, as to whether the AO could have legally made addition on the basis of material found in the course of search from third party premises in the assessments framed u/s 153A of the Act for the unabated years. It has now been well settled in law by the Hon’ble Supreme Court Abhisar Buildwell (P) Ltd. (454 ITR 212) can be made in unabated assessments in the absence of any incriminating material found in the course of search. The conclusion recorded by the Hon’ble Apex Court at Para 14 of their order is noted to 14. In view of the above and for the reasons stated above, it is concluded as under: that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; all pending assessments/reassessments shall stan in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. 25.10.2018. In the course of search, certain incriminating material pertaining to the assessee were found from the premises of the VV Group. The dispute in the present case revolves around the issue that, as to whether the AO could have legally made addition on the basis of un rse of search from third party premises in the assessments framed u/s 153A of the Act for the unabated years. It has now been well settled in law by the Hon’ble Supreme Court (P) Ltd. (454 ITR 212) that, can be made in unabated assessments in the absence of any incriminating material found in the course of search. The conclusion recorded by the Hon’ble Apex Court at Para 14 of their order is noted to reasons stated above, it is that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment all pending assessments/reassessments shall stand abated; in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into thed during the search and the other material available with the AO including the income (iv) 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 132A of the Act, 1961. However, the completed/unabated assessments can be re exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sect 147/148 of the Act and those powers are saved. 6. In the facts of the present case, it is observed that, the additions impugned were not based on incriminating material found from the premises of the assessee, but was made on the basis of the material/electronic evidence seized and the statements recorded in the course of search at a third part, VV Group. We find that the Ld. CIT(A), after analyzing the material, which was seized from the premises of VV Group, found that it was neither corroborative n assessee. The Ld. CIT(A) further observed that, though the assessee was searched at the same time, evidence which would suggest that the assessee was involved in making unaccounted sales of Rs. the basis of his own subjective analysis of the material seized from the premises of VV Group. The Ld. CIT(A) is found to have observed that, since there was no incriminating material found from the premises o ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::8 :: in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the r 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 32 or requisition under section 132A of the Act, 1961. 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 envisaged/mentioned under sect 147/148 of the Act and those powers are saved.” In the facts of the present case, it is observed that, the additions impugned were not based on incriminating material found from the premises of the assessee, but was made on the basis of the l/electronic evidence seized and the statements recorded in the course of search at a third part, VV Group. We find that the Ld. CIT(A), after analyzing the material, which was seized from the premises of VV Group, found that it was neither corroborative nor incriminating qua the assessee. The Ld. CIT(A) further observed that, though the assessee was searched at the same time, the search party couldn’t unearth which would suggest that the assessee was involved in making unaccounted sales of Rs.35.95 crores as was being alleged by the AO on the basis of his own subjective analysis of the material seized from the premises of VV Group. The Ld. CIT(A) is found to have observed that, since there was no incriminating material found from the premises o 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the r 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 32 or requisition under section 132A of the Act, 1961. However, the opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections In the facts of the present case, it is observed that, the additions impugned were not based on incriminating material found from the premises of the assessee, but was made on the basis of the l/electronic evidence seized and the statements recorded in the course of search at a third part, VV Group. We find that the Ld. CIT(A), after analyzing the material, which was seized from the premises of VV or incriminating qua the assessee. The Ld. CIT(A) further observed that, though the assessee was the search party couldn’t unearth any which would suggest that the assessee was involved in making 35.95 crores as was being alleged by the AO on the basis of his own subjective analysis of the material seized from the premises of VV Group. The Ld. CIT(A) is found to have observed that, since there was no incriminating material found from the premises of the assessee, the AO could not have considered the other material seized from the premises of the third party for making addition in the unabated assessments. The relevant findings of the Ld. CIT(A), taken note of by us, is as follows: “7.4.10 In light o assessment order, the appellant raised various issues by way of additional grounds (supra) and the submissions upon it, the undersigned has taken up the same for adjudication upon merits. While going through the facts of the case it is obvious that the incriminating materials were not seized from the business premises of the appellant. The AO has completely relied upon the mail back up taken during the course of search at the business premise of VV Group. Onl the back up and the bank statements, the AO arrived at the conclusion that VV group has booked expenditure by way of bearer cheque issued in the name of many persons including Shri.Jayapal. the AO in the assessment order at page No. 12 & 13 transaction files attached to the mail communications “ files are enclosed (3 XL Files of the bank payment summaries , details regarding payments to shri. Jayapal for the p 2012-13 to 12016 are enclosed (6XL files and a word file name starting as A3] The undersigned during the course of as Appellate proceedings has from the AO extract of file of A2 & A3 as narrated in the assessment order and examined. 7.4.11 The undersigned on examination of the above extract ( A2 file) has observed that the file “A2 XL” contained details such as, Name of account , Cheq undersigned specifically observed that no where in the statement, the name of the appellant company appeared warranting the AO to infer that payments were actually made to the appellant company. The AO in ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::9 :: assessee, the AO could not have considered the other material seized from the premises of the third party for making addition in the unabated assessments. The relevant findings of the Ld. CIT(A), taken note of by us, In light of the various observations made by the AO in the assessment order, the appellant raised various issues by way of additional grounds (supra) and the submissions upon it, the undersigned has taken up the same for adjudication upon merits. While going the facts of the case it is obvious that the incriminating materials were not seized from the business premises of the appellant. The AO has completely relied upon the mail back up taken during the course of search at the business premise of VV Group. Only by analyzing the back up and the bank statements, the AO arrived at the conclusion that VV group has booked expenditure by way of bearer cheque issued in the name of many persons including Shri.Jayapal. the AO in the assessment order at page No. 12 & 13 has observed about the transaction files attached to the mail communications “soft copy of all files are enclosed (3 XL Files-name starting as A2)” . Further, in respect of the bank payment summaries , details regarding payments to shri. Jayapal for the purchase of Illiminte, Zircon, Rutile fort the FYs form 13 to 12016-17 were culled out and tabulated [soft copy of all files are enclosed (6XL files and a word file name starting as A3] The undersigned during the course of as Appellate proceedings has from the AO extract of file of A2 & A3 as narrated in the assessment order and examined. The undersigned on examination of the above extract ( A2 file) has observed that the file “A2 XL” contained details such as, Name of account , Cheque No, date, Name of bank, Name of party. The undersigned specifically observed that no where in the statement, the name of the appellant company appeared warranting the AO to infer that payments were actually made to the appellant company. The AO in 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. assessee, the AO could not have considered the other material seized from the premises of the third party for making addition in the unabated assessments. The relevant findings of the Ld. CIT(A), taken note of by us, f the various observations made by the AO in the assessment order, the appellant raised various issues by way of additional grounds (supra) and the submissions upon it, the undersigned has taken up the same for adjudication upon merits. While going the facts of the case it is obvious that the incriminating materials were not seized from the business premises of the appellant. The AO has completely relied upon the mail back up taken during the y by analyzing the back up and the bank statements, the AO arrived at the conclusion that VV group has booked expenditure by way of bearer cheque issued in the name of many persons including Shri.Jayapal. the AO in the has observed about the soft copy of all . Further, in respect of the bank payment summaries , details regarding payments to shri. urchase of Illiminte, Zircon, Rutile fort the FYs form 17 were culled out and tabulated [soft copy of all files are enclosed (6XL files and a word file name starting as A3] The undersigned during the course of as Appellate proceedings has called for from the AO extract of file of A2 & A3 as narrated in the assessment The undersigned on examination of the above extract ( A2 file) has observed that the file “A2 XL” contained details such as, Name ue No, date, Name of bank, Name of party. The undersigned specifically observed that no where in the statement, the name of the appellant company appeared warranting the AO to infer that payments were actually made to the appellant company. The AO in the assessment order upon the details of A3 XL file has observed the following in para 23 as under “ From the bank payment summaries discussed above , details regarding payments made to Shri. Jaypal for the purchase of Illiminte , Zircon & Rutile for the FYs and tabulated.” 7.4.12 From the observation it can be inferred that such A3 XL file are not the part of the seized material but it is a preparation made post search. While going through such A3 XL file, it can be see one column “Actual purpose of usage”. The undersigned is of the view that no prudent business person can narrate the actual purpose of usage in any narration of transaction. In view of this the undersigned is of the considered opinion tha acceptable. Further, more particularly, when the assessments are sought to be completed u/s 153A of the Act , more reliance should be placed upon the incriminating material seized during the course of search. In the instant case search assessments were completed u/s 153A and the AO hasplaced reliance upon such material that have been created during post search proceedings rather than being seized at the situs. 7.4.13 In a search u/s 132 of the Act a document nature of incriminating material for making assessment u/s 153A, only when it is established that the transaction narrated in the seized material is undisclosed or unexplained and the income earned out of such transaction narrated in th of taxation while it should have been assessed to tax had it been disclosed in the right manner. 7.4.14 It is brought on record at this juncture that the AO has contemplated the addition(s) in the order passed u/s 1 analysing the back up mail and bank statements rather than based upon incriminating materials seized during the course of search. The regular books of accounts ( bankaccounts ) maintained by the third parties at ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::10 :: assessment order upon the details of A3 XL file has observed the following in para 23 as under “ From the bank payment summaries discussed above , details regarding payments made to Shri. Jaypal for the purchase of Illiminte , Zircon & Rutile for the FYs from 2012-13 to 2016-17 were culled out and tabulated.” From the observation it can be inferred that such A3 XL file are not the part of the seized material but it is a preparation made post search. While going through such A3 XL file, it can be seen that there is one column “Actual purpose of usage”. The undersigned is of the view that no prudent business person can narrate the actual purpose of usage in any narration of transaction. In view of this the undersigned is of the considered opinion that reliance of A3XL file by the AO is not acceptable. Further, more particularly, when the assessments are sought to be completed u/s 153A of the Act , more reliance should be placed upon the incriminating material seized during the course of the instant case search assessments were completed u/s 153A and the AO hasplaced reliance upon such material that have been created during post search proceedings rather than being seized at the In a search u/s 132 of the Act a document seized partakes the nature of incriminating material for making assessment u/s 153A, only when it is established that the transaction narrated in the seized material is undisclosed or unexplained and the income earned out of such transaction narrated in the seized material has escaped the scope of taxation while it should have been assessed to tax had it been disclosed in the right manner. It is brought on record at this juncture that the AO has contemplated the addition(s) in the order passed u/s 153A of the Act, by analysing the back up mail and bank statements rather than based upon incriminating materials seized during the course of search. The regular books of accounts ( bankaccounts ) maintained by the third parties at 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. assessment order upon the details of A3 XL file has observed the “ From the bank payment summaries discussed above , details regarding payments made to Shri. Jaypal for the purchase of Illiminte 17 were culled out From the observation it can be inferred that such A3 XL file are not the part of the seized material but it is a preparation made post n that there is one column “Actual purpose of usage”. The undersigned is of the view that no prudent business person can narrate the actual purpose of usage in any narration of transaction. In view of this the undersigned is t reliance of A3XL file by the AO is not acceptable. Further, more particularly, when the assessments are sought to be completed u/s 153A of the Act , more reliance should be placed upon the incriminating material seized during the course of the instant case search assessments were completed u/s 153A and the AO hasplaced reliance upon such material that have been created during post search proceedings rather than being seized at the seized partakes the nature of incriminating material for making assessment u/s 153A, only when it is established that the transaction narrated in the seized material is undisclosed or unexplained and the income earned out of e seized material has escaped the scope of taxation while it should have been assessed to tax had it been It is brought on record at this juncture that the AO has 53A of the Act, by analysing the back up mail and bank statements rather than based upon incriminating materials seized during the course of search. The regular books of accounts ( bankaccounts ) maintained by the third parties at any stretch of imaginatio PCIT VsParam Diary Ltd ITA No. 37 /2021 (Delhi HC)] 7.4.15 The AO in the assessment order passed u/s 153A of the Act has relied upon the details that were created post search and attempted to treat the same u/s 153A of the Act . In addition the so called back up mail relied upon by the AO in the assessment order were not seized at the premises of the appellant company. Obviously, the action of the AO in same as incriminating material and making additions in the hands of the appellant is factually incorrect and legally not tenable. 7.4.16 The appellant during the course of appellate proceedings has brought to the notice of the undersigned abo from Ms. K.Chitra (CA) who is looking after the accounts of M/s. VV Minerals in answer to question No. 117 has deposed as under: Q.117State whether the books of accounts are maintained VV Group concerns like VV Mineral, VV Minerals, VV Mineral 100% EOU, VV Titanium Pigments Pvt. Ltd., VV Cements etc. And also state under which heads of accounts, Bogus entries like Bogus expenses in respect of Contract bills or any other purpose. Particularly, do you know any sub contract suppliers of VV concerns. Ans.117: Accounts of VVM, VW EOU and VVMS was maintained at Head Office. Accounts of Vijay Cements and VVTI was maintained in their factory premises. I don't have any comments about the books of Vijay Cements and VVTI, since the same was handled by the respective finance manager. Wrt VVM, VVEOU and VVMS, payments to Jeyapal booked as Casual Labour Charges was not a genuine transaction. Self c withdrawal of cash was booked under Casual Labour Salary, Environmental expenses, Factory Overheads, Firewood, Coir and Coconut Shell. Certain expenses were actually incurred and some were booked. I don't have details to quantify the same. ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::11 :: any stretch of imagination cannot be treated as “incriminating material”[ PCIT VsParam Diary Ltd ITA No. 37 /2021 (Delhi HC)] The AO in the assessment order passed u/s 153A of the Act has relied upon the details that were created post search and attempted to treat the same as “incriminating material” completed the assessment u/s 153A of the Act . In addition the so called back up mail relied upon by the AO in the assessment order were not seized at the premises of the appellant company. Obviously, the action of the AO in same as incriminating material and making additions in the hands of the appellant is factually incorrect and legally not tenable. The appellant during the course of appellate proceedings has brought to the notice of the undersigned about the statement recorded from Ms. K.Chitra (CA) who is looking after the accounts of M/s. VV Minerals in answer to question No. 117 has deposed as under: Q.117State whether the books of accounts are maintained VV Group concerns like VV Mineral, VV Minerals, VV Mineral 100% EOU, VV Titanium Pigments Pvt. Ltd., VV Cements etc. And also state under which heads of accounts, Bogus entries like Bogus expenses in respect of Contract bills or any other purpose. Particularly, do you know any sub contract suppliers of VV concerns. Ans.117: Accounts of VVM, VW EOU and VVMS was maintained at Head Office. Accounts of Vijay Cements and VVTI was maintained in premises. I don't have any comments about the books of Vijay Cements and VVTI, since the same was handled by the respective finance manager. Wrt VVM, VVEOU and VVMS, payments to Jeyapal booked as Casual Labour Charges was not a genuine transaction. Self cheque drawn for withdrawal of cash was booked under Casual Labour Salary, Environmental expenses, Factory Overheads, Firewood, Coir and Coconut Shell. Certain expenses were actually incurred and some were booked. I don't have details to quantify the same. 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. n cannot be treated as “incriminating material”[ The AO in the assessment order passed u/s 153A of the Act has relied upon the details that were created post search and attempted as “incriminating material” completed the assessment u/s 153A of the Act . In addition the so called back up mail relied upon by the AO in the assessment order were not seized at the premises of the appellant company. Obviously, the action of the AO in treating the same as incriminating material and making additions in the hands of the The appellant during the course of appellate proceedings has ut the statement recorded from Ms. K.Chitra (CA) who is looking after the accounts of M/s. VV Minerals in answer to question No. 117 has deposed as under:- Q.117State whether the books of accounts are maintained VV Group concerns like VV Mineral, VV Minerals, VV Mineral 100% EOU, VV Titanium Pigments Pvt. Ltd., VV Cements etc. And also state under which heads of accounts, Bogus entries like Bogus expenses in respect of Contract bills or any other purpose. Particularly, do you Ans.117: Accounts of VVM, VW EOU and VVMS was maintained at Head Office. Accounts of Vijay Cements and VVTI was maintained in premises. I don't have any comments about the books of Vijay Cements and VVTI, since the same was handled by the Wrt VVM, VVEOU and VVMS, payments to Jeyapal booked as Casual heque drawn for withdrawal of cash was booked under Casual Labour Salary, Environmental expenses, Factory Overheads, Firewood, Coir and Coconut Shell. Certain expenses were actually incurred and some were booked. I don't have details to quantify the same. Certain payments made to group companies for their spare purchase was accounted in the books as Spares and Maintenance. 7.4.17 Further in answer to Q No. 119, averred the following: Q.119 Please go through the annexure that was prepared based on accounts statement of VV Minerals 100% EOU maintained by you at VVM Head Office, Tisayanvillai and explain the same. Ans.119. The expenses booked under the heads Casu Charges, Environmental and Land Reclamation, Lorry Freight, Factory Wages and Firewood expenses will also contain expenses booked by way of cash payments. The source of cash being withdrawals from bank account by issuing self cheques for Rs. 9 la the name of the Staffs. Cash withdrawn and handed over to the management. The management in turn provide the inputs for making accounting entries to the 7.4.18 From the above statement deposed by Ms. Chitra, Chartered Accountant looking after the accounts of VV Minerals, it is confirmed that the VV Group of concerns were in the habit of booking bogus expenses by way of issuing bearer cheques in the many persons including Shri Jaypal of the appellant Company. As rightly claimed by the appellant the AO cannot selectively use a portion of the statement by ignoring the statement recorded form other persons during the course of search to arrive at a meaningful legal conclusion in accordance with the law. 7.4.19 The AO in the assessment orde statement and arrived at a erroneous conclusion that the Appellant company is involved in unaccounted sales. In this regard t Chennai Tribunal in the case of ACIT v. Saveeta Institute of Medical and Technical Sciences [2012] 25 taxmann.com 138 (Chennai held that addition made on the basis of the sworn statement recorded u/s 132(4) of the Act cannot be sustainable and further held that the ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::12 :: payments made to group companies for their spare purchase was accounted in the books as Spares and Maintenance. Further in answer to Q No. 119, Ms. K.Chitra (CA) averred the following:- Q.119 Please go through the annexure-1 of the sworn statement, that was prepared based on accounts statement of VV Minerals 100% EOU maintained by you at VVM Head Office, Tisayanvillai and explain The expenses booked under the heads Casu Charges, Environmental and Land Reclamation, Lorry Freight, Factory Wages and Firewood expenses will also contain expenses booked by way of cash payments. The source of cash being withdrawals from bank account by issuing self cheques for Rs. 9 lacs or Rs. 25 lacs in the name of the Staffs. Cash withdrawn and handed over to the management. The management in turn provide the inputs for making accounting entries to the From the above statement deposed by Ms. Chitra, Chartered ng after the accounts of VV Minerals, it is confirmed that the VV Group of concerns were in the habit of booking bogus expenses by way of issuing bearer cheques in the many persons including Shri Jaypal of the appellant Company. As rightly claimed by appellant the AO cannot selectively use a portion of the statement by ignoring the statement recorded form other persons during the course of search to arrive at a meaningful legal conclusion in accordance The AO in the assessment order has relied upon a part of the statement and arrived at a erroneous conclusion that the Appellant company is involved in unaccounted sales. In this regard t Chennai Tribunal in the case of ACIT v. Saveeta Institute of Medical and nces [2012] 25 taxmann.com 138 (Chennai held that addition made on the basis of the sworn statement recorded u/s 132(4) of the Act cannot be sustainable and further held that the 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. payments made to group companies for their spare purchase was Ms. K.Chitra (CA) has 1 of the sworn statement, that was prepared based on accounts statement of VV Minerals 100% EOU maintained by you at VVM Head Office, Tisayanvillai and explain The expenses booked under the heads Casual Labour Charges, Environmental and Land Reclamation, Lorry Freight, Factory Wages and Firewood expenses will also contain expenses booked by way of cash payments. The source of cash being withdrawals from cs or Rs. 25 lacs in the name of the Staffs. Cash withdrawn and handed over to the management. The management in turn provide the inputs for making From the above statement deposed by Ms. Chitra, Chartered ng after the accounts of VV Minerals, it is confirmed that the VV Group of concerns were in the habit of booking bogus expenses by way of issuing bearer cheques in the many persons including Shri Jaypal of the appellant Company. As rightly claimed by appellant the AO cannot selectively use a portion of the statement by ignoring the statement recorded form other persons during the course of search to arrive at a meaningful legal conclusion in accordance r has relied upon a part of the statement and arrived at a erroneous conclusion that the Appellant company is involved in unaccounted sales. In this regard the Hon’ble Chennai Tribunal in the case of ACIT v. Saveeta Institute of Medical and nces [2012] 25 taxmann.com 138 (Chennai -Trib) has held that addition made on the basis of the sworn statement recorded u/s 132(4) of the Act cannot be sustainable and further held that the admission made u/s 132(4) by the Special Officer of the College co not even be treated as a valid piece of evidence. 7.4.20 In the case of Shri. Ganesh Trading Company v. CIT [2013] 30taxmann.com170/214 Taxmann 262 (Jharkhand), the Court has held that a statement made u/s 132(4) of the Act is a piece of evidence but the same is not conclusive particularly because it is self Accordingly it was concluded that no liability could be fastened solely on the basis of sworn statement. In arriving at this decision, the Court followed the judgement in the case of [2010] 174 Taxmann466( Guj) . Further the Apex Court in the case of Pullangode Rubber Produce Co Ltd v State of Kerala [1973] ITR 18 (SC) has held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive and further observed that it is open to the person who makes the admission to show that it is incorrect. 7.4.21 At the outset it can be stated that where the admission is tied up with incriminating evidence found in the cou principle laid down by the Apex Court will no longer hold good. Obviously, in the absence of evidence an admission can no longer be an evidence to support any addition. 7.4.22 Further, the Apex Court in the case of Kasmira Singh v. Stat of Madhya Pradesh AIR 1952 SC 159, has observed that the correct way to approach a case of confession is to marshal evidence against the accused excluding the confession altogether from consideration. Where the case can be decided independent of confes necessary to take help of confession. 7.4.23 Applying this test in the case of the Appellant, it can be stated that the AO has primarily relied upon the statement recorded based upon mail back extracted during the course of search at premise and utilized the same in making the addition in the hands of the appellant company. Further the AO has selectively used the statements in making addition under the head “unaccounted sales ” . ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::13 :: admission made u/s 132(4) by the Special Officer of the College co not even be treated as a valid piece of evidence. In the case of Shri. Ganesh Trading Company v. CIT [2013] 30taxmann.com170/214 Taxmann 262 (Jharkhand), the Court has held that a statement made u/s 132(4) of the Act is a piece of evidence but he same is not conclusive particularly because it is self-incriminating. Accordingly it was concluded that no liability could be fastened solely on the basis of sworn statement. In arriving at this decision, the Court followed the judgement in the case of KailashbenManharlalChoski v. CIT [2010] 174 Taxmann466( Guj) . Further the Apex Court in the case of Pullangode Rubber Produce Co Ltd v State of Kerala [1973] ITR 18 (SC) has held that an admission is an extremely important piece of evidence t be said that it is conclusive and further observed that it is open to the person who makes the admission to show that it is At the outset it can be stated that where the admission is tied up with incriminating evidence found in the course of search, the principle laid down by the Apex Court will no longer hold good. Obviously, in the absence of evidence an admission can no longer be an evidence to support any addition. Further, the Apex Court in the case of Kasmira Singh v. Stat of Madhya Pradesh AIR 1952 SC 159, has observed that the correct way to approach a case of confession is to marshal evidence against the accused excluding the confession altogether from consideration. Where the case can be decided independent of confession, then, it is not necessary to take help of confession. Applying this test in the case of the Appellant, it can be stated that the AO has primarily relied upon the statement recorded based upon mail back extracted during the course of search at premise and utilized the same in making the addition in the hands of the appellant company. Further the AO has selectively used the statements in making addition under the head “unaccounted sales ” . 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. admission made u/s 132(4) by the Special Officer of the College could In the case of Shri. Ganesh Trading Company v. CIT [2013] 30taxmann.com170/214 Taxmann 262 (Jharkhand), the Court has held that a statement made u/s 132(4) of the Act is a piece of evidence but incriminating. Accordingly it was concluded that no liability could be fastened solely on the basis of sworn statement. In arriving at this decision, the Court KailashbenManharlalChoski v. CIT [2010] 174 Taxmann466( Guj) . Further the Apex Court in the case of Pullangode Rubber Produce Co Ltd v State of Kerala [1973] ITR 18 (SC) has held that an admission is an extremely important piece of evidence t be said that it is conclusive and further observed that it is open to the person who makes the admission to show that it is At the outset it can be stated that where the admission is tied rse of search, the principle laid down by the Apex Court will no longer hold good. Obviously, in the absence of evidence an admission can no longer be an Further, the Apex Court in the case of Kasmira Singh v. State of Madhya Pradesh AIR 1952 SC 159, has observed that the correct way to approach a case of confession is to marshal evidence against the accused excluding the confession altogether from consideration. Where sion, then, it is not Applying this test in the case of the Appellant, it can be stated that the AO has primarily relied upon the statement recorded based upon mail back extracted during the course of search at third party premise and utilized the same in making the addition in the hands of the appellant company. Further the AO has selectively used the statements 7.4.24 It may be appreciated that during th group case of VV Minerals, the appellant was also subjected to search. During the course of search at the appellant premise the search team has not come across any evidence to support the claim that appellant has actually sold Il Crores to VV Mineral group which were not accounted in appellant’s books. Unless and until a cogent and corroborative evidence is established that the appellant company is involved in suppression of sales to the extent of Rs. 35.95 as visualized by the AO, the addition made by the account can only be presumptive and such addition can only fictitious. 7.4.25 In view of the above discussion it is very clear that the AO has made the additions under the head “ mail-back up seized at third party premise, subsequent post search analysis of mail back transactions maintained by the third party, relying upon part of the statement recorded, m corroborative and incriminating material at the premise of the appellant. Accordingly, the addition made by the AO amounti for the AYs 2013 unaccounted sales is not legally sustainable and lacks merit. 7.4.26 In light of the above discussion, the various grounds raised by the appellant upon the issue of unaccounted sales is treated as allowed and the AO is hereby directed to del of Rs.2,24,68,240/ Rs.17,51,81,140/ 14,2014-15,2015 unaccounted sales.” 7. Having perused the above findi material placed before us, corroborative evidence found ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::14 :: It may be appreciated that during the course of search in the group case of VV Minerals, the appellant was also subjected to search. During the course of search at the appellant premise the search team has not come across any evidence to support the claim that appellant has actually sold Ilmenite, Zircon & Rutile to the tune of Rs. 35.95 Crores to VV Mineral group which were not accounted in appellant’s books. Unless and until a cogent and corroborative evidence is established that the appellant company is involved in suppression of to the extent of Rs. 35.95 as visualized by the AO, the addition made by the account can only be presumptive and such addition can In view of the above discussion it is very clear that the AO has made the additions under the head “unaccounted sales” on the basis back up seized at third party premise, subsequent post search analysis of mail back-up, correlating it with statement of banking transactions maintained by the third party, relying upon part of the statement recorded, more particularly in the absence of any corroborative and incriminating material at the premise of the appellant. Accordingly, the addition made by the AO amounting Rs. 35.95 Crores 2013-14, 2014-15, 2015-16, 2016-17, 2017 unaccounted sales is not legally sustainable and lacks merit. In light of the above discussion, the various grounds raised by the appellant upon the issue of unaccounted sales is treated as allowed and the AO is hereby directed to delete the following additions 2,24,68,240/-, Rs.4,67,69,390/-, Rs.6,35,04,240/ Rs.17,51,81,140/-, Rs.5,16,72,336/- for assessment years 2013 15,2015-16,2016-17,2017-18 respectively made as unaccounted sales.” Having perused the above findings of the Ld. CIT(A), in light of the material placed before us, and in the absence of a single iota of cogent or corroborative evidence found from the premises of assessee, impugned 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. e course of search in the group case of VV Minerals, the appellant was also subjected to search. During the course of search at the appellant premise the search team has not come across any evidence to support the claim that appellant menite, Zircon & Rutile to the tune of Rs. 35.95 Crores to VV Mineral group which were not accounted in appellant’s books. Unless and until a cogent and corroborative evidence is established that the appellant company is involved in suppression of to the extent of Rs. 35.95 as visualized by the AO, the addition made by the account can only be presumptive and such addition can In view of the above discussion it is very clear that the AO has unaccounted sales” on the basis back up seized at third party premise, subsequent post search up, correlating it with statement of banking transactions maintained by the third party, relying upon part of the ore particularly in the absence of any corroborative and incriminating material at the premise of the appellant. ng Rs. 35.95 Crores 2017-18 as unaccounted sales is not legally sustainable and lacks merit. In light of the above discussion, the various grounds raised by the appellant upon the issue of unaccounted sales is treated as the following additions , Rs.6,35,04,240/-, for assessment years 2013- 18 respectively made as ngs of the Ld. CIT(A), in light of the a single iota of cogent or ssee, impugned additions in the facts of the instant case has been deleted by Ld CIT(A) So, we do not see any reason to interfere with the same facts and circumstance of this case, order. Hence, the order of the Ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed. 8. Our above decision would apply with equal force to the appeals of the Revenue for the AYs 2014 203/Chny/2024 and therefore these appeals are also dismissed. 9. In the result, all the appeals of the Revenue stands dismissed. Order pronounced on the Sd/- (जगदीश) (JAGADISH) लेखासद\u001a/ACCOUNTANT MEMBER चे\u0003ई/Chennai, \u0005दनांक/Dated: 09th April, 2025 TLN, Sr.PS आदेशक \u000eितिलिपअ\u0014ेिषत/Copy to 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकरआयु /CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय ितिनिध/DR 5. गाड&फाईल/GF ITA Nos.199 to 203 (AYs 20 M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. ::15 :: additions in the facts of the instant case has been deleted by Ld CIT(A) we do not see any reason to interfere with the same facts and circumstance of this case, we do not find any infirmity in his order. Hence, the order of the Ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed. Our above decision would apply with equal force to the appeals of the Revenue for the AYs 2014-15 to 2017-18 in ITA Nos. 200 203/Chny/2024 and therefore these appeals are also dismissed. In the result, all the appeals of the Revenue stands dismissed. Order pronounced on the 09th day of April, 2025, in Chennai. Sd/ /ACCOUNTANT MEMBER (एबी टी. (ABY T. VARKEY \u0001याियकसद\bय/JUDICIAL MEMBER April, 2025. Copy to: , Chennai / Madurai / Salem / Coimbatore. 199 to 203/Chny/2024 2013-14 to 2017-18) M/s. Indian Ocean Garnet Sands Co. Pvt. Ltd. additions in the facts of the instant case has been deleted by Ld CIT(A). we do not see any reason to interfere with the same, since on the do not find any infirmity in his order. Hence, the order of the Ld. CIT(A) is upheld and the grounds raised Our above decision would apply with equal force to the appeals of 18 in ITA Nos. 200- 203/Chny/2024 and therefore these appeals are also dismissed. In the result, all the appeals of the Revenue stands dismissed. , in Chennai. Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER , Chennai / Madurai / Salem / Coimbatore. "