ACIT, CENTRAL CIRCLE-1, RAJKOT, RAJKOT V. AHIR SALT AND ALLIED PRODUCTS PVT LTD, GANDHIDHAM

ITA 299/RJT/2022

AI Insights

The case revolves around a series of appeals concerning the income tax assessments of M/s Ahir Salt and Allied Products Ltd. for various assessment years, following a search and seizure operation. The primary legal issues included the validity of assessments made under section 153A of the Income Tax Act, the treatment of unaccounted income and losses, and the applicability of amendments made by the Finance Act, 2017. The Tribunal examined the procedural and substantive aspects of the assessments, including the use of digital data and parallel books of accounts found during the search. The Tribunal's decision involved a detailed analysis of the legal provisions, the facts of the case, and the evidence presented, leading to varied outcomes for different assessment years.

• Counselvise Citation: [2024] 139 COUNSELVISE.COM (IT) 9374 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2022

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA Nos.292/RJT/2022 (Ǔनधा[रणवष[ /Assessment Years: (2021-22) M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 बनाम Vs. Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA8202E (अपीलाथȸ /Assessee) (Ĥ×यथȸ/Respondent) आयकरअपीलसं./ITA Nos.296-299/RJT/2022 (Ǔनधा[रणवष[/Assessment Years: (2011-12 to 2014-15) Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 बनाम Vs. M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA8202E (अपीलाथȸ /Assessee) (Ĥ×यथȸ /Respondent) आयकरअपीलसं./ITA Nos.302/RJT/2022 (Ǔनधा[रणवष[/Assessment Years: (2015-16) Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 बनाम Vs. M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA 8202 E (अपीलाथȸ /Assessee) (Ĥ×यथȸ /Respondent) आयकरअपीलसं./ITA Nos.303-306/RJT/2022 (Ǔनधा[रणवष[/Assessment Years: (2018-19 to 2021-22) Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 बनाम Vs. M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 Page | 2 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA 8202 E (अपीलाथȸ /Assessee) (Ĥ×यथȸ /Respondent) आयकर(खोज-और-जÞती) अपीलसं./IT(SS)A Nos.01-05/RJT/2022 (Ǔनधा[रणवष[/Assessment Years: (2011-12 to 2015-16) M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 बनाम Vs. Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA 8202 E (अपीलाथȸ /Assessee) (Ĥ×यथȸ /Respondent) आयकर(खोज-और-जÞती) अपीलसं./IT(SS)A Nos.08-10/RJT/2022 (Ǔनधा[रणवष[/Assessment Years: (2018-19 to 2020-21) M/s Ahir Salt and Allied Products Ltd., BBZ-S-60, Zanda Chowk, Gandhidham-370 201 बनाम Vs. Deputy Commissioner of Income Tax,Central Circle-1, “Amruta Estate”, 2nd Floor, M.G. Road,Rajkot-360001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABCA 8202 E (अपीलाथȸ /Assessee) (Ĥ×यथȸ /Respondent) Ǔनधा[ǐरतीकȧओरसे /Assessee by :Shri S.N.Soparkar, Ld. Senior Advocate राजèवकȧओरसे /Revenue by :ShriShramdeep Sinha, CIT-DR सुनवाईकȧतारȣख/ Date of Hearing : 09/09/2024 घोषणाकȧतारȣख/Date of Pronouncement : 29/11/2024 आदेश/Order PER BENCH: This is bunch of 18 appeals, consisting nine appeal filed by the revenue and nine appeal filed by the single assessee, pertaining to assessment years(AYs) 2011-12to 2015-16 and AYs 2018-19 to 2021-22 (assessment year-wise), all appeals are directed against the separate orders Page | 3 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 passed by the Learned Commissioner of Income-Tax (Appeals)-11, Ahmedabad[for short ‘Ld. CIT(A)]’,all dated 30.09.2022, which in turn arise, out of separate assessment orders passed by the Assessing Officer under section 153A/143(3)of the Income Tax Act, 1961 (in short ‘the Act’). 2. Since, the issues involved in all the appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in ITA No. 302/Rjt/2022 for the assessment year (AY) 2015-16, have been taken into consideration for deciding the above appeals en masse. 3. The assessment years involved in these appeals are for the period, A.Ys. 2011-12 to 2020-21, where the assessing officer had passed the assessment order under section 153A of the Income Tax Act. In addition to that the assessing officer had passed order u/s143(3) of the Act for search year i.e. A.Y.2021-22, on 31.03.2022. Thus, assessing officer, had passed 11 assessment orders for A.Y.2011-12 to A.Y.2021-22 in the case of assessee- company. Appeals of the assessee, pertaining to assessment years 2016-17 and 2017-18, have been adjudicated by the Tribunal, vide Tribunal order, in IT(SS)A No. 06 and 07/Rjt/2022, order dated 12.06.2024.Therefore, now, appeals of the Assessee and Revenue, pertaining to following assessment years, are to be adjudicated: Sr. No. Assessment year 1. 2011-12 2. 2012-13 3. 2013-14 4. 2014-15 5. 2015-16 6. 2018-19 Page | 4 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 7. 2019-20 8. 2020-21 9. 2021-22 In the above nine assessment years, the assessee, as well as revenue both are in appeal before us. That is, the Assessee has filed nine appeals and Revenue has also filed nine appeals. 4. First, we shall take Revenue`s appeals in ITA No. 302 to 306/Rjt/2022 Assessment year 2015-16 & 2018-19 to AY 2021-22 and Assessee`s appeals in IT(SS) No. 5,8 to 10/Rjt/2022, for Assessment year 2015- 16,and 2018-19 to A.Y. 2020-21 respectively, and ITA No. 292/Rjt/2022 for Assessment year 2021-22. The concise and summarized grounds of these five appeals of revenue and five appeals assessee, in these assessment years, are reproduced below: “Department's Ground No.1 - On the facts and in the circumstances of the case of and in law, Id. CIT(A) erred in ignoring that there were parallel books of accounts maintained by the assessee in tally software, which was found and impounded during the course of Search, on which the AO has relied upon. Department's Ground No.2 - On the facts and in the circumstances of the case of and in law, Id. CIT(A) erred in ignoring the fact that the seized data are quite disproportionate and not in synchronies manner and it was reported selectively in regular books of account. Department's Ground No.3 - On the facts and in the circumstances of the case of and in law, Id. CIT(A) fails to appreciate the facts of the case that the seized data reveals that no accounting principles nor Income-tax Provisions were followed in maintaining data. Department's Ground No.4 - On the facts and in the circumstances of the case and in law Id CIT(A) failed to appreciate the facts of the case, that one of the key person of the group concern-Shri Mihir Kangad in his statement recorded u/s 132(4), has agreed unaccounted transactions in the tally files, though complex but made on the instruction of members of the Neelkanth Group and correlation between the transaction recorded in tally file with independently verifiable third -party evidences proves that the entries recorded in the evidences seized are correct and independently verifiable. Department's Ground No.6 - On the facts and in the circumstances of the case and in law, Id. CIT(A) failed to appreciate the facts of the case, AO has duly investigated and applied his mind on the report of the DDIT, Investigation Wing and after satisfying Page | 5 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 himself made the assessment on the basis of cogent material and relevant evidence on record. AND Appellant's Ground No.2 - The learned Commissioner of Income-tax (Appeals)-11, Ahmedabad [CIT(A)] erred on facts as also in law in rejecting appellants plea that no addition could have been made in the order passed u/s. 153A of the Act, in absence of there being incriminating material found from the appellant. The order passed making addition without there being any incriminating materials may kindly be deleted. Appellant’s Grounds No. 3 – the leaned CIT(A) erred on facts as also in law in not appreciating the fact that seized data / documents were found from the premises of third party, therefore, addition on the basis of the said documents cannot be made in the hands of the appellant u/s 153A of the Act. The AO may kindly be directed to deleted the addition on this ground. Department’s Ground No. 5 – on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in deleting the addition of income determined on account of proportion @ 3% of unaccounted sales of (i) Rs. 4,86,35,382/- for AY 2015-16 (ii) Rs. 8,14,69,971/- for AY 2018-19 (iii) Rs. 8,43,66,335/- for AY. 2019-20 (iv) Rs. 9,61,89,039/- out of total addition of Rs. 9,96,11,034/- for AY 2020-21 and (v) Rs. 7,17,19,678/- out of total addition of Rs. 8,06,63,232/- for AY 2021-22. AND Appellant's Ground No.4 - The Id. CIT(A) erred on facts as also in law in not deleting on merit, the addition of (i) Rs.4,86,35,3827- for AY.2015-16 (ii) Rs.8,14,69,971/- for AY.2018-19 (iii) Rs.8,43,66,335/- for AY.2019-20 and retaining addition (iv) Rs.9,61,89,039/- out of total addition of Rs.9,96,11,0347- for AY 2020-21 and (v) Rs.7,17,19,678/- out of total addition of Rs.8,06,63,232/- for AY 2021-22 made on the basis of dumb data/documents stated to have been recovered from the premises of third party. The Action of Id. CIT(A) in not deciding the ground of appeal on merit is unjustified. The AO may kindly be directed to delete the addition. Department's Ground No.7 - On the facts and in the circumstances of the case and in law, Id. CIT(A) ought to have upheld the order of the AO. Department's Ground No.8 - It is therefore, prayed that the order of Id. CIT(A) be set aside and that of the AO be restored to the above extent. These above grounds nos.7 and 8 of the Department are general in nature. Appellant's Additional grounds of appeals for AY 2015-16, are as under: 1. Alternatively and without prejudice to grounds of appeals mentioned in Form 36, Ld. CIT(A) erred in law and on facts of case in not allowing carry forward of business loss,as per seized data and further in not allowing set- off the same in subsequent years against the addition confirmed and enhanced by him. The AO may kindly be directed to allow carry forward of loss and set off the same in subsequent years. Page | 6 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 2. Alternatively, and without prejudice to grounds of appeals mentioned in Form 36, Ld. CIT(A) erred in law and on facts of case in treating the business profit as per seized data as unaccounted income and not giving credit of book profit declared in audited financial statements. The AO may kindly be directed to allow credit of book profit against the business profit as determined by Ld. CIT(A).\" 5. The relevant material facts, as culled out from the material on record, are as follows. The assessee, before us, is a private limited company, carrying out business of Manufacturing and Trading of Salt, Logistics and Transportation and Liquid Cargo Storage Terminal. During the year under consideration, the assessee filed its return of income u/s 139 of the Act, on 27-09-2015, declaring income of Rs.1,16,57,370/-.On 10/11/2020, A search and seizure operation was conducted at the following premises of the assessee: -BBZ-S60, Zanda Chowk, Gandhidham, Kutch -Revenue survey no. 573, Terminal Office, Kandla Port, Kandla, Gandhidham The premises of major stake holders of the assessee-company were also covered during the search and seizure operation. The major stakeholders include, Kangad Family and Ahir Family. Further, the premises of Cashier (Shri Vijay Nagda) and Accountant (Shri Naran Maheswari) of the promoter family were also covered. Further, as the seized documents pertaining to the assessee-company were recovered during the same search operation and the assessee-company was also covered under the search operation, the assessment proceedings for year under consideration was initiated in the case of the assessee-company. 6. In response to the notice u/s 153A of the Act, the assessee has filed a return of income on 15-11-2021, with the same total income, as was reported in the original return of income filed u/s 139 of the Act. Thereafter, notice u/s 143(2) of the Act was issued. Relevant information has been called for Page | 7 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 u/s 142(1) of the Act and the response to the same filed by the assessee has been perused by the assessing officer. During the course of search, the premise of Shree Naran Babubhai Maheshwari was covered and a pen drive was recovered. The pen drive contained digital data in the form of parallel books of account of various group concerns of the Neelkanth group which was seized at following path in the pen drive- “Neelkanth Coal Mfg. Pvt Ltd \\ GSS-F.Y. 2017-18 WIP \\ GSS-F.Y. 2016-17 Final\\DATA\\11617” When this tally folder was accessed, it is found to contain a company named “FOR CA STUDENT FROM 1-4-2010-31-3-2017”.Since, the Neelkanth Group is a stake holder in the assessee-company, the unaccounted profit earned through the assessee-company was also entered in this tally file named “FOR CA STUDENT FROM 1-4-2010 to 31-3-2017”. Further, from another location of the same pen drive, data regarding unaccounted transactions of the assessee-company in particular has also been found. The path is- \"KPPL Data Neelkanth Coal Mfg. Pvt Ltd \\ GSS-F.Y. 2017-18 WIP 30.06.2015\\00001\" This \"00001\" is a tally file named \"ASM\". This tally file contains transactions from 31-03-2007 to 11-07-2015. Thus, the file covers transactions of FY 2007-08 to 2014-15.On perusal of this journal entry, it can be seen that the assessee has earned unaccounted profit of Rs.4,03,94,715.50/- during FY 2010-11.On perusal of this journal entry, it can be seen that the assessee has earned unaccounted profit of Rs.10,05,31,257.32/- during FY 2011-12.On perusal of this journal entry, it can be seen that the assessee has earned unaccounted profit of Rs.15,70,52,643.35/- during FY 2012-13.On perusal of this journal entry, it can be seen that the assessee has earned unaccounted profit of Page | 8 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Rs.18,02,65,611.81/-during FY 2013-14.On perusal of this journal entry, it can be seen that the assessee has incurred a loss of Rs.37,06,400.83/- on 01-04-2014 and of Rs.9,24,03,137.83/- on 31-03-2015, aggregate of Rs.9,61,09,538.66/- during FY 2014-15.On comparative analysis of both these files i.e. \"FOR CA STUDENT FROM 1-4-2010-31-3-2017\" which is prepared for all the group concerns of the Neelkanth Group and \"A SM\" which is prepared exclusively for the assessee-company, it is noted that the entries in both the files corresponds to each other which can be understood from the following illustrative example. From the above comparison it can be seen that for FY 2012-13 the assessee- company has earned unaccounted profit of Rs.15,70,52,643/-. The share of Neelkanth group in this profit is 71%. Accordingly, Rs.11,15,07,377/- i.e. (71% of 157052643/-) is reflected in the books unaccounted books prepared for the Neelkanth Group.The file \"ASM\" covers complete data for FYs 2007-08 to 2014-15 and the file \"For CA students\" covers the relevant profit / loss entries from the assessee company for FYs 2012-13 to 2016-17. Reading both the files together, the unaccounted profit / loss of the assessee- company for FYs 2010-11 to 2016- 17 can be worked out. Thus, the unaccounted profit earned, the assessee- company from FY 2010-11 to FY 2016-17 is Rs. 63,42,04,227/-. For the remaining period from FY 2017-18 to FY 2020-21, no such complete data was recovered during the search. However, the loose cash flow sheets recovered from the premise of Shri Vijay Nagda utilized to ascertain the unaccounted income of the Neelkanth Group by entering all the transactions seized in the loose sheets chronologically in the tally accounting software. From that data the quantum of unaccounted transactions happened between the Neelkanth group and the assessee-company is culled out. Year-wise summary is mentioned by the assessing officer in the assessment order. Therefore, the total quantum of the unaccounted transactions / income of the Page | 9 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 assessee company from FY 2010-11 to FY 2020-21 is Rs.64,56,44,844/- [Rs.63,42,04,227 + Rs. 1,14,40,670]. 7. As far as the genuineness of this tally data is concerned, it was noticed by the assessing officer that the persons, companies, firms and parties recorded in the tally file do exist and have business or personal relations with Neelkanth group and, therefore, has live nexus with Neelkanth group. Names of such persons exist in phone books of Neelkanth group persons. The vehicle numbers mentioned in the narrations are owned by related to assessee group, the events such as marriages and birthdays exist on recorded dates, the transactions are also identified to have actually taken place when compared with independently verifiable third-party evidences such as Revenue Records, RTO Records, Bank Statements, Insurance Company Records, Counterparties' Bills etc. The transactions are duly supported by corresponding vouchers. Also, evidences of signed approval of such transactions by Neelkanth group persons are found. The correlation between the transactions recorded in tally file with independently verifiable third- party evidences proves that the entries recorded in the seized tally data are true, correct and independently verifiable.Without prejudice to the above factual confirmations regarding the authenticity of the seized tally data, the statement of Shri Mihir Kangad is also relevant to understand the reliability of the data. The transactions in \"for CA Students from 01.04.2010 31.03.2017\" were confronted to Sh. Mihir Kangad (key person of the Neelkanth Group). Sh. Mihir Kangad admitted that the transactions in the tally files are genuine and have been made on instruction of members of the Neelkanth Group. The statement of Shri Mihir TejabhaiKangad were reproduced by the assessing officer in the assessment order. The assessing officer also examine the various files seized during the search and seizure action, and assessing officer also analyzed the vouchers, Udar vouchers, Page | 10 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 general vouchers, credit vouchers in the assessment order. The assessing officer also examine the ledger account of interest and profit and loss account, of various years. The assessing officer issued notice to the assessee, to explain various vouchers, ledger account and profit and loss account and entries there in the profit or account and other seized material. 8. In response, the assessee submitted written submission before the assessing officer, which is reproduced by the assessing officer in para number 13 of the assessment order. The sum and substance, of the written submission of the assessee, was that there was no incrementing material, all transactions were recorded by the assessee in its books of accounts and statement of third-party should not be relied, without being provided an opportunity of cross examination to the assessee and documents found in the search proceedings were dump documents hence should not be relied on. 9. However, the assessing officer, rejected the contention of the assessee and observed that total quantum of the unaccounted transactions/income of the assessee company from Financial Year(FY) 2010-11 to FY 2021-21 is Rs. 64,56,44,844/- [Rs. 63,42,04,227 + Rs. 1,14,40,617]. Considering that this quantum includes negative figures for some financial years, which if included, as it is can subsume the entire profit already reported by the assessee company in its ITR for that year and, further, considering that the figures from FY 2017-18 onwards are not in continuous from but based on the loose sheets recovered from the premise of Shri VjayNagda, which does not cover all the transaction that may have happened form FY 2017-18 to FY 2020-21, it would be fair and in the interest of revenue, if this figure of Rs. 64,56,44,897/- is divided among all the FYs from 2010-11 to 2021-21 in the proportion of the turnover reported by the assessee-company in its regular books of accounts, and following additions were made by the assessing officer, in the following five assessment years: Page | 11 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 2014-15 2015-16 48,02,03,039 8% 4,86,35,382/- 2017-18 2018-19 80,43,96,428 13% 8,14,69,971/- 2018-19 2019-20 83,29,93,778 13% 8,43,66,335/- 2019-20 2020-21 98,35,12,814 15% 9,96,11,034/- 2020-21 2021-22 79,64,31,070 12% 8,06,63,232/- 10. Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has partly confirmed the addition made by assessing officer (AO), observing as follows: 5.1 The facts in brief are that the assessee is a private limited company engaged in the business of manufacturing and trading of salt, income from operation of liquid cargo storage tanks, income from logistics and transportation and rental income from letting out of warehouses. Search was carried out at the business premises of the assessee on 10.11.2020. Proceedings u/s.153A were initiated and notices for A.Ys. 2015-16 to 2020-21 was issued on 06.10.2021. Besides, the AO had issued notices u/s.153A on 30.03.2022 for A.Ys.2011-12 to A.Y.2014-15. On perusal of the assessment order, it reveals that search was also carried out at the premises of two other persons viz., Shri Naran B Maheshwari and Vijay Nagda. From the residence of Shri Naran B Maheshwari, one pen drive was seized containing Tally Data file titled as “FOR CA STUDENT FROM 1-4-2010 - 31-3-2017” and another tally data file named as \"A S M\". These files contained data of total profits for different yeas and bifurcation of the same to interested parties. Apart from that, from the residence of Shri Vijay Nagda, some vouchers of receipts and payments were seized. Based on such vouchers and loose papers, the AO in the assessment order had made additions, for which the assessee is in appeal. “6.2.2 Moreover, during the course of search, statement of Shri Mihir Kangad (key person of the group) was recorded. In his statement, he had admitted that the transactions in the tally files, though complex but made on the instructions of members of the Neelkanth group. The relevant part of his statement is forming part of the assessment order. The same is again reproduced hereunder. … 6.2.3 From the above, it is clear that Shri Mihir Kangad had admitted the fact that the contents of the pen drive found and seized from the possession of Shri Naran B Maheshwari are actual transactions that actually took place and these were recorded at the directions of family members of the Neelkanth Group. Further, in this regard, it is necessary to reproduce the para no. 11 of the assessment order passed by the AO, which is as under.- Page | 12 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 \"11. So far as the genuineness of this tally data is concerned, it is seen that the persons, companies, firms and parties recorded in the tally file do exist and have business or personal relations with Neelkanth group and, therefore, has live nexus with Neelkanth group. Names of such persons exist in phone books of Neelkanth group persons. Names of such persons exist in phone books of Neelkanth group persons. The vehicle numbers mentioned in the narrations are owned by/related to assessee group, the events such as marriages and birthdays exist on recorded dates, the transactions are also identified to have actually taken place when compared with independently verifiable third-party evidences such as Revenue Records, RTO Records, Bank Statements, Insurance Company Records, Counterparties Bills etc. The transactions are duly supported by corresponding vouchers. Also, evidences of signed approval of such transactions by Neelkanth group persons are found. The correlation between the transactions recorded in tally file with independently verifiable third-partly evidences proves that the entries recorded in the seized tally data are true, correct and independently verifiable.\" In view of the above, the plea of the assessee that the contents found from the pen drive during the course of search at Naran B Maheshwari are third party entries, is not acceptable and hence rejected. 6.3The third plea of the assessee is that the materials were found from the possession of third parties and hence, proceedings u/s.153C is the right recourse and not proceedings u/s.153A. 6.3.1This argument has been carefully perused. On perusal of the records, it is seen that this argument was raised by the assessee before the AO and the AO has dealt on this issue in the assessment order. The plea of the assessee is that since nothing incriminating was found from the possession of the assessee during search carried out at its premises, therefore the completed assessment cannot be disturbed. The assessee has also stated, since the so-called material was found from the possession of third party, therefore proceedings were supposed to be initiated u/s.153C. However, the statement of Mihir Kangad reproduced in the assessment order is of utmost importance. In the statement he has categorically admitted that, the entries were made at the direction of the family members of the Neelkanth Group. This implies that Shri Naran B Maheshwariand, Shri Vijay Nagda are connected with the assessee. The AO has given the clear finding in the assessment order that Shri Mihir T. Kangad (key person of the group) had admitted in his statement recorded u/s. 132(4) of the Act dated 23.12.2020 that Shri Naran B. Maheshwari & Shri VijavNaqda was the accountant & cashier of the group respectively and were looking after the financial affairs of the assessee also. Secondly, since search has been carried out at the premises of the assessee and its employees or connected persons, group concerns at the same time, then the AO is right in law in treating this as part of the material of the assessee and thus finalizing the assessment u/s 153A of the I.T. Act. It is observed that search was carried out at various premises Page | 13 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 simultaneously and based upon evidences found from parties connected with assessee, addition was made. Thus, AO was justified in making addition while passing the assessment order u/s 153A of the Act. Hence, the plea of the assessee is rejected. 6.4 The Fourth plea of the assessee is that addition is made by AO which is not based upon any incriminating material hence reliance is placed on decision of Hon'ble Supreme Court in the case of PCIT Vs Saumya Construction Pvt. Limited and other decisions. However, this contention of assessee cannot be accepted for the reason that during the course of search two types of digital evidences were found which prove that assessee has earned undisclosed profit on year to year basis. The assessee has merely argued that their directors have never admitted that such seized paper belongs to assessee company but merely based upon non admission of directors, it cannot be held that digital data found during the course of search is not incriminating in nature. While passing the assessment order, AO has that digital data found during the course of search belong/pertains to assessee and entries of Profit/loss represent undisclosed income earned by assessee company. In this regard, it is important to refer the observation of the AO made in the para 11 of the assessment order (reproduced above in para 6.2.3 of this order). Further, it is also observed that the assessee is unable to contravene such finding of AO in entire appellate proceedings. The AO has made additions based upon incriminating found during the course of search hence such plea of assessee is rejected. CIT(A), Ahmedabad-11/11467/2014-15 for A.Y. 2015-16:- 1. In grounds of appeal mentioned hereunder are without prejudice to one another. 2. In law and in the facts and circumstances of the Assessee's case, the assessment proceeding initiated u/s. 153A of the Act is bad in law and void ab initio and therefore, the order passed on the basis of such invalid initiation may kindly be quashed. 3. In law and in the facts and circumstances of the Assessee's case, order passed u/s. 153 of the Act determining the total income at Rs.6,02,92,752/- as against the originally assessed income of Rs. 1,16,57,370/- is bad in law and deserves to be quashed. 4. In law and in the facts and circumstances of the Assessee's case, the Assessing Officer erred in making addition of Rs. 4,86,35,382/- on the alleged ground data and loose papers stated to have been recovered from the premises of third parties. The addition made by the AO without affording proper opportunity of being heard and allowing an opportunity of cross-examination is totally unjustified and deserves to be deleted and may kindly be deleted. 5. On the facts and in the circumstances of the case, the Assessing Officer erred in initiating penalty proceedings u/s. 271(1)(c) of the Act. Page | 14 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 6. On the facts and in the circumstances of the case, the Assessing Officer erred in charging of interest u/s. 234A, 234B, 234C and 234D of the Act. 7. The assessee craves to leave to add, alter, amend and/or withdraw any ground of appeal either before or the time of hearing of the appeal. Decision 37.The ground of appeal no. 1 is general in nature and Assessee has not filed any specific submission during the course of appellate hearing hence these grounds are not adjudicated and are dismissed. 38.The ground of appeal no. 2 relates to assessment proceedings initiated U/S.153A of the Act is bad in law and void ab initio. It is observed that relevant pleas taken by the assessee in this ground is already dealt with while adjudicating relevant ground of appeal in A.Y.2011-12 at para no. 6 and considering the detailed findings made therein, this ground of appeal is dismissed. 39.The grounds of appeal no. 3 & 4 are interlinked hence dealt together, is against the action of the AO in making addition of Rs.4,86,35,382/-. 39.1 The Assessee has contended that the materials do not belong to the assessee, as the same has been recovered from unconnected persons namely Shri Naran B. Maheshwari and Shri Vijay Nagda. The assessee stressed that during the search carried out at its business premises, no such incriminating documents or any other incriminating data has been recovered supporting the disputed digital data recovered from the above- named persons. The assessee further contended that name as per disputed digital data seized is \"ASM\", which cannot be correlated with the assessee company. The assessee also submitted the duly sworn affidavit of Shri Naran Maheshwari stating that he himself is not aware of such digital data and as such author or origin of such disputed data remained unidentified. In nutshell, the assessee contended that in absence of any corroborative evidence or any nexus or live link in support of the digital data seized from the possession of Shri Naran Maheshwari, no addition could have been made in its case. The assessee relied upon various judicial pronouncements on applicability of section 292C of the Act in support of its contention that addition in the hands of assessee could not be sustained on the basis of data or documents found from third party and in absence of any other corroborative materials. 39.2The above stated submission of the assessee is not convincing in view of the fact that though Shri Naran Maheshwari and Shri Vijay Nagda may not be employees of the assessee but both of them are working under other business concerns of Neelkanth Group and the assessee company is part of the Neelkanth Group. It is important to mention here that the AO has given the clear finding in the assessment order that Shri Mihir T. Kangad (key person of the group) had admitted in his statement recorded u/s.132(4) of the Act dated 23.12.2020 that Shri Naran B. Maheshwari & Shri Vijay Nagda was the accountant & cashier of the group respectively and were looking after the financial affairs of the assessee also. Therefore, it cannot be said that the impugned data has been seized from third party and there is no linkage of the assessee company with such data. Further, assessee's plea that originator or author of data is not known has no relevance as the key personnel of the Neelkanth Group Shri Mihir Kangad in his statement recorded on 24/12/2020 admitted that entries in the digital data is made by group accountant and cashier on the basis of directions issued by various family members and Page | 15 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 management persons. In this regard, it is important to refer the observation of the AO made in the para 11 of the assessment order (reproduced above in para 6.2.3 of this order).So far as title of the digital data \"A S M\" is concerned, it appears that the same is abbreviation of \"Ahir Salt Mix\" and they are matching with accounting entry in tally file \"For CA Student\" in the account named as \"ASA Mix\". It is also seen that year-end journal entries of profit have been passed in tally file \"A S M\" with profit. Therefore, there is purpose behind maintaining such tally files and thus, assessee's plea that the data is not related to them is rejected. 39.3The assessee also objected the evidentiary value of the digital data seized by taking support of the provisions of Section 65B(4) of the Act. However, it seems that the key personnel of group Shri Mihir Tejabhai Kangad in his statement recorded on 24/12/2020 has admitted the content of digital data seized. Therefore, there is no dispute regarding the genuineness of data recovered from the pen drive of Shri Naran B Maheshwari. Therefore, this plea of the assessee cannot be accepted. 39.4The assessee also contended that profit entry and year-end entries of profit is by way of Journal and there is no evidence of actual earning of income. The assessee also stated that there is no backend working related to how such profit has been derived. The AO did not bring into any evidence as to what sales or purchase has been made, amount of such sales/purchase, quantity of sales / purchase, nature of activities and thus, in absence of such primary information, no credence should be given to the figure of profit represented by single journal entry. The assessee submitted that if the impugned figure of profit is treated as unaccounted profit over and above the profit declared in audited books of account, then all the financial ratios i.e., GP, NP, Production / yield shall give absurd and impractical result. The assessee stated that there is no possibility of earning such huge profit in the existing investment in business and on this ground, the assessee stated that the digital data seized is not correct, complete and authentic. 39.5It is observed that seized material found during the course of search which is clearly established to be pertaining to the assessee, entries therein cannot be ignored. When the seized material found during the course of search and referred in Assessment Order itself depicts the profit of the company on year-to-year basis, such profit is required to be taxed. Now what the AO has in his possession is the digital data where earning of Profit and its journal is unambiguously written and, therefore, AO has taxed the same as income. On perusal of the assessment order, it is seen that at the end of each year, amount of profit or loss has been transferred to different accounts. The statement of Mihir Kangad, key person of the group is also in tandem with the findings of the AO in the assessment order to the effect that, the entries made therein were at the direction of the members of the group. Hence, it cannot be said that entire data is vague or not related to the assessee company and thus, one should arrive at the logical conclusion on the basis of information / data as well as broken period documents seized as above. The Hon'ble Delhi High Court in the case of Mahavar Woolen Mills V/s CIT 111 Taxman 568 has held as under: \"Section 260A of the Income-tax Act, 1961 - Appeal to High Court -Assessment year 1996-97 - Tribunal had come to factual conclusion that documents seized during search contained certain materials which were sufficient to come to conclusion about cash payments having been made in addition to those made by cheques and drafts and held that said payments would be liable to be assessed under section 69 - Page | 16 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 On appeal under section 260A, according to assessee, question whether seized papers could be construed as 'books of account' or 'document' for purpose of section 158B(b) which defines 'undisclosed income', was required to be adjudicated - Whether issue raised by assessee in appeal could be said to involve any question of law, or a substantial question of law - Held, no - Whether it is possible to turn a mere question of fact into a question of law by seeking whether as a matter of law authority came to a correct conclusion upon a matter of fact - Held, no.\" Further, reliance is placed on ratio of decision of Hon'ble Ahmedabad ITAT in the case of Shailash S Patel 97 taxman.com 570 wherein it is held as under: \"I. Section 68. read with section 148, of the Income-tax Act, 1961 - Cash credits (Immovable property) - Assessment year 2012-13 - In course of search conducted upon premises of one 'SBA' group, a Banakhat (agreement to sale) was found and seized which revealed that assessee agreed to purchase a land and also paid consideration for same - But this transaction was not incorporated by assessee in its return of income -Further, assessee also failed to explain source of amount of consideration paid to purchase said land - Accordingly, Assessing Officer reopened assessment and further passed reassessment order making additions in respect of amount of sale consideration under section 68 - Assessee contended that he entered into a Banakhat as a middleman and land was first acquired for sale consideration and thereafter arranged to be sold directly from owner to actual buyer to gain differential proceeds/commission - It was noted that assessee was in audacious denial even on face of tangible documentary evidence towards payment of sale consideration in cash as mentioned in Banakhat -Assessee had also not declared any commission income flowing from such banakhat, if any, as propounded - Banakhat executed was not shown to be eventually cancelled - Whether, on facts, impugned additions made under section 68 was justified - Held, yes [Paras 13.1 and 15] [In favour of revenue]\" On this basis addition made by AO for AY 2015-16 onwards is discussed in subsequent para. 39.6On perusal of Assessment Order it is observed that AO has aggregated profit as shown in seized material and distributed such profit from A.Y.2011-12 to 2021-22 based upon turnover shown in audited annual accounts. This method of Assessing Officer is incorrect as he has distributed the profits of seized material in the year in which no incriminating material is found. When the seized material relied upon by AO itself depicts profit earned by assessee Company on year-to-year basis, addition is required to be made based upon noting mentioned in the seized material. Considering such fact, method adopted by AO is not accepted and while arriving at the quantum of undisclosed income to be taxed in the hands of assessee, profit/loss as shown in seized tally data is considered. Page | 17 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 39.7During the course of appellate proceedings, assessee has argued that when the nomenclature of the seized material itself contain the word \"Mix\", which itself supports the contention of Assessee that profit/loss shown in seized material is inclusive of profit/loss shown in books of account. The assessee has contended that, AO has focused only on the Figure of the profit derived by passing the journal entries in the digital data. There is no backward working of sales or other items and the AO has not considered the book results and the transactions as per the books. The assessee submitted the details of year-wise turnover, Gross profit and net profit etc. The assessee has contended that while computing undisclosed income, income shown in regular books of account need to be reduced and only net addition can be made in the year in which there is profit. 39.8On careful consideration of entire facts, it is observed that tally data found during the course of search contain the word \"ASM\" which was considered as Ahir Salt Mix by AO. However, word \"Mix\" has never been interpreted by AO as data containing entries in regular books of account and unaccounted activity. The assessee has right from beginning has contended that digital data found during the course of search does not pertain it. Once the stand of assessee is that digital data found during the course does not contain entries pertaining to its business, assessee's stand that profit/loss shown in seized tally data contain profit/loss of its regular business activity. The assessee cannot interpret the contents of the seized material as per its own whims. When AO has established the fact that contents of the seized material pertains to assessee with relevant vouchers found during the course of search and same is corroborated with the statement Mr. Mihir Kangad (key person of assessee group), assessee has first time taken such plea that profit/loss shown in seized material contains profit/loss shown in regular books of account at appeal stage and same cannot be accepted. The contention of assessee even cannot be accepted mainly on following grounds. (i) The assessee has claimed that seized data found during the course of search is vague and incomplete. However, the seized data found during the course of search clearly reflects entries of distribution of profit amongst various partners/stake holders. If such data would not have been complete, no person would pass entries of distribution of profit to partners account and balance of profit/loss would have been carried forward on year to year basis. (ii)During the course of assessment proceedings or appellate proceedings, assessee has not brought single evidence to prove that any of the entries containing in digital data are already recorded in regular books of accounts. On the contrary, the AO has established that unaccounted cash payment vouchers found during the course of search are duly entered in such seized data. In this regard, it is important to reproduce the finding of the AO in para no. 12 of the assessment order, which is as under:- \"The file contains records of 18427 transactions. The persons, companies, firms and parties recorded in this file do exist and have business or personal relations with Neelkanth group and therefore, live nexus with Neelkanth group, names of such persons exist in phonebooks of Neelkanth group persons, the mentioned vehicle numbers are owned by/related to assesses group, the events such as marriages and birthdays exist on recorded dates, the transaction are a/so identified to have actually taken place when compared with independently verifiable third-party evidences such Page | 18 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 as Revenue Records, RTO records, Bank Statements, Insurance Company Records, Counterparties' Bills etc. The transactions are dully supported by corresponding vouchers. The correlation between the transactions recorded in tally file with independently verifiable third-party evidences proves that the entries recorded in the evidence seized are, true, correct and independently verifiable.” (ii)It is observed that on one side assessee is claiming that profit/loss shown in seized data includes profit/loss shown in regular books of account. However, assessee itself at para 2(v) has stated that total assets as per seized data (As on 31.03.2011) is Rs.1,10,77,321 whereas actual assets as per audited annual accounts is Rs.13,18,65,361/-. If the seized data would have includes entries of both regular books of account and unaccounted transactions, assets appearing in the seized data would have been higher than Rs.13,18,65,361/-. It is also observed that fixed assets as appearing in seized data as on 31/03/2011 is Rs.92,81,855.50/-whereas net block of assets as appearing in audited annual accounts is Rs.12,30,94,536.40/- which means that assets appearing in regular books of account are not appearing in seized tally balance sheet and fixed assets as appearing in seized balance sheet only reflects unaccounted payment made towards acquisition of such assets. The contention of assessee is that profit for the year ending on 31/03/2011 as appearing in seized document is Rs 4,03,94,715.50/- is inclusive of profit of Rs.73,71,180.42/- shown in regular books of accounts but other entries of balance sheet does not reflect entries of regular books of account is evasive and without any evidence. For example, it is pertinent to refer to following tabular chart reflecting fixed assets as appearing in balance sheet of regular books of account on year to year basis and fixed assets as appearing in seized documents which will prove that contention of assessee that seized data includes entries of regular books of account is incorrect. Assessment year Fixed assets as per seized balance sheet Fixed assets as per Audited annual accounts 2011-12 92,81,856/- 12,30,94,537/- 2012-13 98,91,238/- 14,67,45,214/- 2013-14 93,35,463 16,36,06,239/- 2014-15 96,04,193 18,09,81,072/- (iv) The assessee has contended that if unaccounted profit is added to book profit shown in regular books of account, keeping turnover of books as correct turnover, net profit ratio would increase substantially which would not match industry norms. It was stated that if turnover is worked out based upon profit shown in seized tally data(considering average GP of 10%), the reworked turnover would show imaginary value as it does not correspond to assessee company's capacity to produce such salt. However, this contention of assessee cannot be accepted as assessee has never matched any of the accounting entries with data in seized tally. When assessee is carrying out unaccounted activity, it is possibility that assessee would have carrying out production activity at other premises or earned out of Page | 19 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 trading or by outsourcing etc. The assessee has argued only on presumption which does not survive as seized data contain entries of profit/loss earned in each year and its distribution amongst the partners. Considering these facts, the plea of the assessee regarding giving credit of the accounted income against the unaccounted income taken by the AO as per seized documents, is hereby rejected. 39.9It is also observed that seized data for A.Y.2015-16 reflects loss of Rs.9,61,09,539/-, Rs.5,37,440/- in A.Y.2018-19 and Rs.3,87,492/- in A.Y.2019-20. When seized documents itself reflects loss, no undisclosed income can be taxed in the hands of the assessee in such years. Even such loss cannot be set off against in subsequent years as the assessee has not disclosed such loss in the regular return of income. 39.10. In nutshell, the addition to the above extent is directed to be sustained and the additions made by distributing the above profits as per seized materials over all the years in the ratio of turnover of audited accounts is directed to be deleted. Based upon such observation, unaccounted profit in the case of assessee is determined as under:- Considering above facts, there would be enhancement of income in A.Y. 2016- 17and A.Y.2017-18 as mentioned in chart herein above. The AO is directed to tax undisclosed income as per tabular chart herein above on year to year basis and in remaining years, relief would be provided accordingly. 39.11 In view of the above discussion and factual matrix of the case, the AO is directed to delete the addition made for A.Y.2015-16. Thus, the ground of appeal no. 3 & 4 are allowed.” A.Y. Addition made in the assessment order Addition confirmed Relief granted 2015-16 4,86,35,382 -- 4,86,35,382 2016-17 4,87,17,205 12,69,69,992 (-) 7,82,52,787 2017-18 7,00,80,129 12,50,99,546 (-) 5,50,19,417 2018-19 8,14,69,971 -- 8,14,69,971 2019-20 8,43,66,335 -- 8,43,66,335 2020-21 9,96,11,034 34,21,995 9,61,89,039 2021-22 8,06,63,232 89,43,554 7,17,19,678 Page | 20 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 11. Aggrieved by the above findings of the learned CIT(A), the assessee, as well as, revenue, are in appeal before us. 12. Shri S.N.Soparkar, ( Senior Advocate), Learned Counsel for the assessee, argued before the Bench that no addition should be made without any incrementing material. Third-party evidence should not be relied, moreover opportunity of cross examination was not provided to the assessee and documents found in search were dump documents, hence addition made by the assessing officer should be deleted. 13. On the other hand, learned DR for the revenue, relied on the findings of the assessing officer. Learned DR for the revenue, also relied on the findings of the order of the Tribunal, in the assessee`s own case in IT(SS)A No. 6 and 7/RJT/2022, vide order dated 12.06.2024, and also stated that additions made by the assessing officer may be confirmed. 14. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We find merit in the submissions of ld DR for the revenue and noted that various issues raised by the assessee and revenue, were adjudicated by the Tribunal, in assessee`s own case inT(SS)A No. 6 and 7/RJT/2022, vide order dated 12.06.2024, the findings of the Tribunal, are reproduced below: “52. We completely agree with the Ld.CIT(A) that the data was very revealing/speaking, apparently genuine and duly corroborated, and the addition in the impugned year was not based on any extrapolation of data. 53. Addressing first the contention of the Ld.Counsel with regard to the data being a mere entry uncorroborated with any other material IT(SS)A No.6 & 7/RJT/2022 evidence, it is pertinent to first take note of the fact which has not been disputed before us, that the data in the pendrive pertained to the assessee. The Ld.CIT(A) has rightly noted that the linkage of the pendrive and other material, found with the accountant and cashier of the group with the assessee, was established since the assessee was part/ connected to the group and these persons looked after financial affairs of the assessee. Also we have rejected assessees contention of having no Page | 21 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 connection with the adverse material since it was found at third party premises while dealing with ground no 2 & 3 of the assessee above at para-25 to 31 of our order. 54. Further the AO has recorded detailed and pertinent facts establishing the genuineness of the data at para 11 of his order, where he found the persons, companies, firms and parties recorded in the tally file contained in the pendrive to exist, have business and personal relations with the Neelkanth group and the transactions recorded being independently verifiable with third party evidence. It is pertinent to reproduce his findings, which importantly have remained uncontroverted. \"11. As far as the genuineness of this tally data is concerned, it is seen that the persons, companies, firms and parties recorded in the tally file do exist and have business or personal relations with Neelkanth group and, therefore, has live nexus with Neelkanth group. Names of such persons exist in phone books of Neelkanth group persons. The vehicle numbers mentioned in the narrations are owned by / related to assessee group, the events such as marriages and birthdays exist on recorded dates, the transactions are also identified to have actually taken place when compared with independently verifiable third-party evidences such as Revenue Records, RTO Records, Bank Statements, Insurance Company Records, Counterparties' Bills etc. The transactions are duly supported by corresponding vouchers. Also, evidences of signed approval of such transactions by Neelkanth ,group persons are found. The correlation between the transactions recorded in tally file with independently verifiable third-party evidences proves that the entries recorded in the seized tally data are true, correct and independently verifiable. 11.1 Without prejudice to the above factual confirmations regarding the authenticity of the seized tally data, the statement of Shri Mihir Kangad is also relevant to understand the reliability of the data. The transactions in \"for IT(SS)A No.6 & 7/RJT/2022 CA Students from 01.04.2010 - 31.03.2017\" were confronted to Sh. Mihir Kangad (key person of the Neelkanth Group). Sh. Mihir Kangad admitted that the transactions in the tally files are genuine and have been made on instruction of members of the Neelkanth Group. The relevant excerpts from the statements of Shri Mihir Kangad are as under ….. 55. The AO also found all data in the tally folder of the pendrive to be generated from vouchers and bills, scanned copies of which were found in a separate file in the pendrive and even physical copies were found at the premises of the cashier of the group when searched. In all 18,427 transactions were so found recorded. These facts have also remained uncontroverted. The inference therefore from the same derived by the Revenue authorities that the transactions recorded were genuine transactions is we hold correct. 56. It is this data, which is found to be genuine and relating to actual transactions, which reveals clearly share of undisclosed profits of the Neelkanth group from the assessee in the folder \"FOR CA STUDENTS\". And this entry is corroborated with ledger account revealing profits earned by the assessee and their allocation to different stakeholders contained in a tally file ASM. This is further IT(SS)A No.6 & 7/RJT/2022 corroborated with balance sheets found of the assessee for different years disclosing the said profits clearly. 57. For clarity, reference is made to data relating to F.Y 2012-13 found in the pendrive. The tally file FOR CA STUDENTS reveals share of Neelkanth group in undisclosed profits earned by assessee disclosed in the ledger PROFIT/ LOSS FROM AHIR SALT FOR F.Y 2012-13 to be Rs.11,15,07,378/- (para 6.2 A O's order). File \"ASM\" discloses the same amount of profit of Rs.11,15,07,378/- allocated to Neelkanth group for the year @ 71/% out of the total undisclosed profits of the assessee for the year of Rs.15,70,52,643/-(para 7.1 A O's order). Page | 22 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 The balance sheet of the assessee named ASM found during search, disclosing unaccounted assets and liabilities for the year ending 31-03-2013 also reveals same profit of Rs.15,70,52,643/- distributed/transferred during the year by the assessee 58. Thus the digital record is not just a mere uncorroborated entry, as contended by the Ld.Counsel for the assessee, but a speaking data revealing clearly profits earned by the assessee, duly corroborated with corresponding entry in the books of a stakeholder and also in the balance sheet of the assessee relating to the undisclosed business all found during search. It is, we hold, not a case of one instance of entry found but an entire trail of recording of the same entry in other records also pertaining both to the assessee and other parties. 59. We are in complete agreement, therefore, with the Ld.CIT(A) that the data cannot be said to be vague, and dismissed as such as not sufficient for drawing any inference there from. On the contrary a logical conclusion has to be derived there from. 60. As per section 292C of the Act, books of accounts, documents, assets etc. found during search u/s 132 of the Act, are presumed to belong to the assessee and their contents presumed to be true. Section 292C is reproduced hereunder: Presumption as to assets, books of account, etc. 292C. (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed-- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. (2) Where any books of account, other documents or assets have been delivered to the requisitioning officer in accordance with the provisions of section 132A, then, the provisions of sub-section (1) shall apply as if such books of account, other documents or assets which had been taken into custody from the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A, had been found in the possession or control of that person in the course of a search under section 132. 61. It is for the assessee to rebut the presumption with cogent evidence. Meaning thereby that the onus is on the assessee to show that the books/documents do not belong to it nor are their contents true. In the present case the presumption is that the digital record found during search belongs to the assessee and its contents revealing undisclosed profits earned by the assessee are true. The Ld.Counsel for the assessee pleading that the speaking digital data found during search needed to be corroborated with material evidence for concluding that they revealed undisclosed income earned by the assessee, is clearly contrary to law. The onus is on the assessee to explain the contents of the data found in its possession. It cannot be and is also not the case of the assessee that the data is a dumb IT(SS)A No.6 & 7/RJT/2022 document. In the absence of any explanation given by the assessee regarding the nature of the contents of the data, there is no question of shifting the onus on the Revenue to unearth further material evidence by way of any undisclosed assets etc. in which the profits were allegedly invested, to substantiate its case. Page | 23 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 62. The contention of the Ld.Counsel for the assessee therefore that data found was a mere entry that too uncorroborated, is found by us to be incorrect, and his contention therefore for deleting the addition made of undisclosed profits in the hands of the assessees basis this data, needs to be rejected. 63. The next contention of the Ld.Counsel for the assessee that since specific entry of profit relating to the impugned years was not found in the digital data, addition on the basis of extrapolation of data found of another related entity could not be done, also merits no consideration. 64. There is no doubt that the data reveals profits earned by the assessee for various years, though not the impugned year. The data also reveals its distribution between all stakeholders in a fixed ratio/percentage for all years including the impugned year. Therefore the data when read in entirety reveals profits earned by the assessee distributed to its various stakeholders in a fixed ratio. This is corroborated with corresponding entry of profit received by one of the stakeholders in its books maintained in the digital record. This record is found for several years. Therefore the fact of assessee earning profits year to year and distributing it to its stakeholders is clearly revealed from the records/ data found. For the impugned year therefore when the data revealed clearly the share of the stakeholder alone, accounted for in its alleged books, it leads to the logical IT(SS)A No.6 & 7/RJT/2022conclusion, that the said profits have arisen from profits earned by the assessee. The record of the stakeholder, Neelkanth enterprises, clearly revealing recording of profits received from the assessee equivalent to its share of 71%, there was no anomaly in the Revenue authorities holding assessee to have made profits in the impugned year calculated on the basis of that apportioned /distributed to its stakeholder. It is not case of extrapolation of data of the stakeholder to arrive at the profits earned by the assessee , but on the contrary a case of deriving factum of profit earned by the assessee clearly revealed from the data of the stake holder. Therefore the contention of the Ld.Counsel for the assesse of the addition made of undisclosed profits being based on extrapolation of data is found to be incorrect and his plea for deleting the addition therefore rejected. 65. The next contention of the ld.counsel for the assessee before us was that without prejudice to his arguments made on the merits of the addition made, the assessee be allowed set off of losses. He pointed out that that in the data extracted from the pen-drive the assessee was noted to have earned loss in Asst. Year 2015-16 of Rs.9,61,09,539/- which has been held by the Ld.CIT(A) to be the assessed income / loss of the assessee for the said year. 66. His contention was that the set off of these losses be allowed to the assessee in the impugned immediately successive years , A.Y 2016-17 and A.Y 2017-18. 67. He contended that the Ld.CIT(A) had denied the set off of loss of A.Y 2015-16 amounting to Rs. 9,61,09,539/- since they were not returned, against which the assessee was aggrieved. 68. The ld.counsel for the assessee contended that it is settled law that the issue of claim of set off of brought forward loss is to be examined in the year in which the set off is so claimed. This regard, IT(SS)A No.6 & 7/RJT/2022 we refer to the decision of Hon'ble Apex Court in the case of CIT Vs. Manmohan Das (Deceased), (1966) 59 ITR 699(SC). He also referred to the decision of the ITAT, Mumbai Bench 'G' in the case of Gajendra Kumar T. Agarwal Vs. ITO, (2011) 11 taxmann.com 231 (Mum). Reliance was also made to the decision of the ITAT, Delhi Bench in the case of Anant Raj Ltd. Vs. ACIT, ITA No.5169/Del/2017 and others order dated 11.5.2020. The ld.counsel for the assessee further stated that the benefit of set off of losses had been denied by the ld.CIT(A) for the reason that the assessee had not disclosed such loss in the return of income. He contended that the Hon'ble Gujarat High Court in the case of Kirit Dahyabhai Patel Vs. ACIT, (2017) 80 taxmann.com 162 (Guj) has held that in view of the specific provision of section 153A of the Act return filed in response to the notice undersection 153A of the Act, is to Page | 24 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 be considered as return of income filed under section 139 of the Act. The ld.counsel for the assessee has also relied on the decision of the ITAT, Delhi Bench in the case of HBN Dairies & Allied Ltd. Vs. ACIT, (2018) 96 taxmann.com 353 (Del- Trib)(TM) for the proposition that the assessee's claim of brought forward losses in search assessment was to be allowed. Copies of all the orders were placed before us. 69. We have heard both the parties. The assessee's contention is that the assessed loss of immediately preceding year i.e. Asst.Year 2015-16 amounting to Rs.9,61,09,539/- be set off against the profits assessed for the impugned year amounting to Rs.12,69,69,992/- for Asst.Year 20016-17 and Rs.12,50,99,546/- for Asst.Year 2017-18. We are not agreeable with the same. It is an undisputed fact that the loss of the immediately preceding assessment year and the profits of the impugned assessment year were not returned to tax in the returns filed in IT(SS)A No.6 & 7/RJT/2022 response to the notice under section 153A of the Act. These losses/profits are assessed income of the assessee on the basis of incriminating material found during the search. The provision of law with regard to carry forward and set off of loss as contained in section1 39(3) of the Act is that only loss which are returned within the time allowed as per section 139(1) of the Act are allowed to be carried forward and set off against the income of the succeeding years. There is no dispute with respect to the above provision of law. As far as reliance of the assessee to decisions laying down the proposition that the return filed in response to the notice under section 153A of the Act are to be treated as that filed under section 139(1) of the Act (Kirit Dahyabhai Patel(supra),there is no denial or dispute with regard to the same also. But the said decision is of no help to the assessee, because the assessee has not claimed the loss in the return filed in response to the notice under section 153A of the Act, as noted above before us. Thus since the loss of the preceding year has not been returned to tax in the return filed in response to notice u/s 153A of the Act, the law does not allow benefit of set off of such losses against incomes of succeeding years. Such a proposition as canvassed by the Ld.Counsel for the assessee would result in honest assessees being placed in a disadvantageous position as compared to those who otherwise do not disclose correct incomes but it is discovered during search proceedings. As per the provisions of law it is only losses disclosed in returns filed within prescribed time which are allowed the benefit of being carried forward and set off against incomes of succeeding years. An honest assessee who otherwise discloses losses but not within IT(SS)A No.6 & 7/RJT/2022 prescribed time is therefore denied the benefit of carry forward and set off of the losses. If the proposition canvassed by the Ld.Counsel for the assessee is accepted then losses discovered during search, not otherwise disclosed in returns filed are to be allowed benefit of carry forward and set off. In short an unscrupulous assesses whose undisclosed economic activities are discovered during search will be in a beneficial position with regards to set off and carry forward of losses as opposed to an honest assessee . This surely cannot be the intention of law. The decision of the ITAT Delhi Bench in the case of HBN Dairies (supra) does not help the case of the assessee since in the said case losses claimed to be set off against profits were disclosed in the return filed u/s 153A 0f the Act. As for the other decisions relied upon by the ld.counsel for the assessee, they only lay down the proposition that the claim of set off of losses is to be examined in the year in which the set off is claimed. How these decisions are of any assistance to the assessee's claim in the impugned year, we fail to understand, considering the fact that even as per the provision of law, the assessee is not eligible to claim the set off of losses since the losses were not returned in the return of income filed in response to the notice under section 153A of the Act. We, therefore, are in complete agreement with the ld.CIT(A) that the assessee is not entitled to any set off of loss brought Page | 25 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 forward from the preceding years and these contentions of the ld.counsel for the assessee is accordingly dismissed. 70. The last contention of the ld.counsel for the assessee before us was that the profits disclosed by the assessee in its return should be reduced from the alleged profits disclosed in the ledger found in the IT(SS)A No.6 & 7/RJT/2022 PDF for determining the undisclosed profits of the assessee for the impugned years. His contention was that there is no basis with the department to hold that the entire profits, as disclosed in the ledger was undisclosed. Therefore, the benefit of profits already disclosed by the assessee should be given to it. 71. Ld.DR on the other hand relied on the findings of the Ld.CIT(A) rejecting this contention of the assessee at para 39.8 (ii) and (iii)and(iv) as under:… 72. We have considered the argument of the Ld.Counsel for the assessee that profits already disclosed by the assessee be reduced from the profits assessed on the basis of alleged incriminating material found during search, and noting the findings of the Ld.CIT(A) IT(SS)A No.6 & 7/RJT/2022 while rejecting this plea of the assessee, which findings have remained uncontroverted before us, we find no merit in the plea of the assessee. The Ld.CIT(A) has noted pertinent facts while rejecting this contention. He has noted that the assessee has not produced single evidence to show that the data found during search included transactions accounted for by the assessee in its Books of accounts. On the contrary the Ld.CIT(A) found that the data was found by the AO to be a recording of only unaccounted transactions of the assessee reflected in vouchers and other documents found both physically with the assessee and scanned copies found in the digital data. 73. The Ld.CIT(A) also found that seized data revealing assets of the assessee were also found in the form of Balance sheets of the assessee pertaining to different years which reflected clearly the unaccounted profits earned by the assessee. He noted that the assets reflected therein were far less than that as per Books of accounts of the assessee. The above facts have remained uncontroverted before us. 74. In view of the same, we completely agree with the Ld.CIT(A) that the incriminating material reflected only the unaccounted profits of the assessee. There is no question therefore of reducing the unaccounted profits added to the income of the assessee with the profits disclosed and returned to tax by the assessee. This contention/ground raised by the assessee is also dismissed. 75. Ground No.4 & 5 and the additional grounds raised by the assessee are dismissed. 76. In effect, both the appeals are dismissed. As a consequence, the stay petitions filed by the assessee do not survive, and the same are also dismissed.” 15. We agree with the above findings of the Tribunal, in assessee`s own case-supra, (except the findings in relation to carry forward and set off of losses,). Therefore, various grounds raised by the revenue, in these five Page | 26 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 years, are allowed to the extent indicated in assessee`s own case in IT(SS)A No. 6 and 7/RJT/2022, vide order dated 12.06.2024, whereas, appeals of the assessee for these five years are dismissed. 16. Now we shall adjudicate assessee`s Additional grounds of appeals for AY 2015-16, which are reproduced below for ready reference: Appellant's Additional grounds of appeals for AY 2015-16, are as under: 1. Alternatively and without prejudice to grounds of appeals mentioned in Form 36, Ld. CIT(A) erred in law and on facts of case in not allowing carry forward of business loss,as per seized data and further in not allowing set- off the same in subsequent years against the addition confirmed and enhanced by him. The AO may kindly be directed to allow carry forward of loss and set off the same in subsequent years. 2. Alternatively, and without prejudice to grounds of appeals mentioned in Form 36, Ld. CIT(A) erred in law and on facts of case in treating the business profit as per seized data as unaccounted income and not giving credit of book profit declared in audited financial statements. The AO may kindly be directed to allow credit of book profit against the business profit as determined by Ld. CIT(A).\" 17. The above additional grounds raised by the assessee are covered, in favour of assessee, by the miscellaneous application, vide MA No. 22 & 23- Rjt-2024 (Ahir Salt & Allied Products Pvt. Ltd), wherein, the Tribunal has rectified the order in IT(SS)A No.6 and 7/RJT/2022, so far, the issue of carry forward and set off of losses are concerned, observing as follows: “13.We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. For the sake of clarity and also being pertinent, we reproduce the relevant para No.69 of the order of the Tribunal in IT(SS)A Nos.6 & 7/RJT/2022, order dated 12.06.2024, which is the disputed issue in these two miscellaneous applications. The para No.69 of the order of the Tribunal, reads as follows: “69. We have heard both the parties. The assessee’s contention is that the assessed loss of immediately preceding year i.e. Asst.Year 2015-16 amounting to Rs.9,61,09,539/- be set off against the profits assessed for the impugned year amounting to Rs.12,69,69,992/- for Asst.Year 2016-17 and Rs.12,50,99,546/- for Asst.Year 2017-18. We are not agreeable with the same. Page | 27 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 It is an undisputed fact that the loss of the immediately preceding assessment year and the profits of the impugned assessment year were not returned to tax in the returns filed in response to the notice under section 153A of the Act. These losses/profits are assessed income of the assessee on the basis of incriminating material found during the search. The provision of law with regard to carry forward and set off of loss as contained in section 139(3) of the Act is that only loss which are returned within the time allowed as per section 139(1) of the Act are allowed to be carried forward and set off against the income of the succeeding years. There is no dispute with respect to the above provision of law. As far as reliance of the assessee to decisions laying down the proposition that the return filed in response to the notice under section 153A of the Act are to be treated as that filed under section 139(1) of the Act (Kirit Dahyabhai Patel(supra), there is no denial or dispute with regard to the same also. But the said decision is of no help to the assessee, because the assessee has not claimed the loss in the return filed in response to the notice under section 153A of the Act, as noted above before us. Thus, since the loss of the preceding year has not been returned to tax in the return filed in response to notice u/s 153A of the Act, the law does not allow benefit of set off of such losses against incomes of succeeding years. Such a proposition as canvassed by the Ld.Counsel for the assessee would result in honest assessees being placed in a disadvantageous position as compared to those who otherwise do not disclose correct incomes but it is discovered during search proceedings. As per the provisions of law it is only losses disclosed in returns filed within prescribed time which are allowed the benefit of being carried forward and set off against incomes of succeeding years. An honest assessee who otherwise discloses losses but not within prescribed time is therefore denied the benefit of carry forward and set off of the losses. If the proposition canvassed by the Ld.Counsel for the assessee is accepted then losses discovered during search, not otherwise disclosed in returns filed are to be allowed benefit of carry forward and set off. In short, an unscrupulous assesses whose undisclosed economic activities are discovered during search will be in a beneficial position with regards to set off and carry forward of losses as opposed to an honest assessee . This surely cannot be the intention of law. The decision of the ITAT Delhi Bench in the case of HBN Dairies (supra) does not help the case of the assessee since in the said case losses claimed to be set off against profits were disclosed in the return filed u/s 153A of the Act. As for the other decisions relied upon by the ld.counsel for the assessee, they only lay down the proposition that the claim of set off of losses is to be examined in the year in which the set off is claimed. How these decisions are of any assistance to the assessee’s claim in the impugned year, we fail to understand, considering the fact that even as per the provision of law, the assessee is not eligible to claim the set off of losses since the losses were not returned in the return of income filed in response to the notice under section 153A of the Act. We, therefore, are in complete agreement with the ld.CIT(A) that the assessee is not entitled to any set off of loss brought forward from the preceding years and these contentions of the ld.counsel for the assessee is accordingly dismissed.” 14. We note that assessee’s contention before the Tribunal was that the assessed undisclosed loss of immediately preceding year, that is, assessment year 2015-16, amounting to Rs.9,61,09,539/- should be set- off against the undisclosed income for the impugned year amounting to Rs.12,69,69,992/-, for assessment year 2016-17 and Rs.12,50,99,546/- for assessment year 2017- 18. The Tribunal has denied the benefit of set- off of losses on the plea that only loss which are returned within the time allowed as per section 139(1) of the Act are allowed to be carried Page | 28 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 forward and set off against the income of the succeeding years. Besides, the assessee has not claimed the loss in the return filed in response to the notice under section 153A of the Act. 15. We find that a search and seizure operation was conducted under section 132(1) of the Act, on 10.11.2020. In this said search operation, the Revenue authorities, found certain documents and evidences, which the Revenue authorities considered them, as incrementing material. As per assessing officer, based on these incrementing material, there was undisclosed income in the hands of the assessee, as well as, there was undisclosed losses, as per these incrementing material. The assessing officer, during the assessment proceedings, under section 153A read with section 143(3) of the Act, considered only undisclosed income of the assessee, as per the incrementing material seized, however, did not consider undisclosed losses, as per the incrementing material seized. That is, assessing officer did not give the benefit of set- off of undisclosed losses, against the undisclosed income, fond during the search and seizure action. In para No.69 of the order of the Tribunal in IT(SS)A Nos.6 & 7/RJT/2022, order dated 12.06.2024 (supra), the Tribunal has also denied the benefit of set- off of losses, stating that assessee has not claimed the losses in the return of income filed under section 153A of the Act, as noted above. 16.We find that undisclosed income and undisclosed losses, both were not shown by the assessee, in the return of income, filed by the assessee, in response to notice under section 153A of the Act, therefore, either the assessing officer should ignore both the items or should consider both the items, to compute the tax liability of the assessee, as per seized material. The “Income” as well as “losses”, both were undisclosed, as seized material, however, the assessing officer has taken into account to tax the undisclosed income and ignored the undisclosed losses, which is not acceptable. It is a common knowledge that seized material must be read as a whole, that is, every part of the seized material must be constructed within the four corners of the Act. When the undisclosed income has been taken from seized material, then why not the undisclosed losses should not be taken from the seized material. Apple to Apple comparison is needed, which is required, as per the principle of equity and justice. No any seized material should be interpreted in isolation, if the assessing officer, takes the undisclosed income from seized material, then he has to take into account the undisclosed losses from the same seized material, and benefit of set- off of losses, should be given to the assessee, on account of undisclosed losses, which the assessing officer has failed to do so. 17. We are of the view that every part of the seized material, must be analyzed, within the four corners of the Act, when the undisclosed income is considered by the assessing officer, based on the seized material, then assessing officer ought to have considered, the undisclosed losses, based on the same seized material.In fact, even if an assessee inadvertently failed to claim any legitimate claim, the revenue has to correct it and due tax has to be collected. In this regard Hon'ble Gujarat High Court in the case of S.R. Koshti vs. CIT 276 ITR 165 (Guj) has held that \"the authorities under Income Tax Act, 1961 are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee under a mistake, misconception or not being properly instructed is over assessed, the authorities under the Act are required to assist him and assure that only legitimate taxes due are collected\" 18. In fact, in a situation like that of the assessee, number of appellate authorities have opined that the revenue is expected to collect the legitimate revenue and had placed on record the CBDT's Circular No. 114 XL-35 of 1955, dated 11-4-1955, which read as under: Administrative instructions for guidance of Income-tax Officers on matters pertaining to assessment 1. The Board has issued instructions from time to time in regard to the attitude which the Officers of the Department should adopt in dealing with assessee in matters affecting their interests and convenience. It appears that these instructions are not being uniformly followed, Page | 29 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 2. Complaints are still being received that while Income-tax Officers are prompt in making assessments likely to result into demands and in effecting their recovery, they are lethargic and indifferent in granting refunds and giving reliefs due to assessee under the Act. Dilatoriness or indifference in dealing with refund claims (either under section 48 or due to appellate, revisional, etc., orders) must be completely avoided so that the public may feel that the Government are actually prompt and careful in the matter of collecting taxes and granting refunds and giving reliefs. (3) Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the department for it would inspire confidence in him that he may be sure of getting a square deal from the department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should—(a) Draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) Freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs. 4. Public Relation Officers have been appointed at important centers, but by the very nature of their duties, their field of activity is bound to be limited. 19. The Hon'ble Justice Khanna in the case of Simon Carves (105 ITR 12) (SC) has held that tax authorities would not be acting properly and judiciously, if they exercise their power in the manner most beneficial to the revenue and consequently most adverse to the assessee….” The various courts have held that if excess tax has been paid by the assessee, in advance, the Assessing Officer is bound to refund it under the general law and independently of Chapter XIX or any other provisions of the Act.[ OCM v/s CIT (138 ITR 689)]. A combined reading of the above decisions of the Hon'ble Courts leads to a conclusion that, if an assessee is entitled to the benefit or relief, then, he / she cannot be denied for the reasons that he /she failed to claim it. The Hon'ble High Court of Madras in the case of Abhinitha Foundation Pvt. Ltd. (99 CCH 37) (Mad) (HC) has held that failure to advert to claim in original return or revised return could not denude, appellate authorities of their power to consider the claim. The appellant authority including Commissioner of Income Tax (Appeals) is empowered to entertain any claim which, was not made by the appellant, in his /her/its return of income. 20. As we have noted that any document has to be taken as a whole and the Assessing Officer should not pick and choose those parts of the impounded/seized material which suits him and totally rejected those parts of the same document which are in support of the assessee. Therefore, either the Assessing Officer should not rely on such impounded/seized material, at all, or if he uses these documents as evidences against the assessee, then he should read it as a whole and also accept those parts of the documents which support the assessee. One Cannot be permitted to blow hot and cold in the same steam. ‘Head I win’ and ‘tail you lose’, approach is alien to the principles of justice. There cannot be approval and rejection in the same steam. To attempt to take advantage of one part and to reject the rest, is against the fine norms of jurisprudence. If the assessing officer places reliance on the part of seized material and ignores another part of seized material, then there would be certain breach in regard to this tenet of law. Considering these facts, we are of the view that there is a mistake apparent from record in non- consideration of these facts, and non-consideration of a decision of the Supreme Court, which can be said to be a \"mistake apparent from the record\". Therefore, we direct the assessing officer to allow undisclosed loss of immediately preceding year, that is, assessment year 2015-16, amounting to Rs.9,61,09,539/-, to be set- off against the undisclosed income for the impugned Page | 30 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 year amounting to Rs.12,69,69,992/-, for assessment year 2016-17 and Rs.12,50,99,546/- for assessment year 2017-18. 21. In the result, miscellaneous application No.22/RJT/2024, is allowed. 22. Since we have allowed the miscellaneous application No.22/RJT/2024, and facts and contents of miscellaneous application No.23/RJT/2024, are similar and identical as those of iscellaneous application No.22/RJT/2024.Accordingly, our observations made in miscellaneous application No.22/RJT/2024, shall apply mutatis mutandis to the aforesaid other miscellaneous application No.23/RJT/2024. For the parity of reasons, we allow the abovementioned miscellaneous application, in terms of directions noted in miscellaneous application No.22/RJT/2024. 23. In the result, miscellaneous application No.23/RJT/2024, is allowed. 24. In the combined result, both miscellaneous applications filed by the assessee are allowed.” 18. In view of the above, additional grounds raised by the assessee, are allowed. 19.Now, we shall adjudicate the appeals of Assessee and Revenue pertaining to assessment year 2011-12. 20.Grounds of appeal raised by the Revenue in the appeal, for assessment year 2011-12, in ITA No. 296/Rjt/2022, are as follows: 1. On the facts and in the circumstances of the case and in law, Ld. CIT(A), fails to appreciate the facts that Finance Act 2017 amended section 153A of the Act enabling the AO to issue notices for 'relevant assessment years' i.e. four more years over and above the six years already covered earlier in the Pre-amended section. That selection of four more years was further subject to fulfillment of three conditions (a), (b) & (c) as stipulated in newly inserted fourth proviso to section 153A and all the three conditions stipulated in fourth proviso have been fulfilled. 2. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in ignoring that there were parallel books of accounts maintained by the assessee in tally software, which was found and impounded during the course of Search, on which the AO has relied upon. 3. On the facts and in the circumstances of the case and in law, Ld. CIT(A) fails to appreciate the facts of the case, that one of the key person of the group concern Shri Mihir Kangad in his statement recorded u/s 132(4) and has agreed unaccounted transaction have become happened and admitted that the transactions in the tally files, though complex but made on the instructions of members of the Neelkanth group and correlation between the transaction recorded in tally file with independently verifiable third-party evidences proves Page | 31 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 that the entries recorded in the evidence seized are, true, correct and independently verifiable. 4. On the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in ignoring that Prior to amendment vide Finance Act, 2017, section 153A(1)(b) stipulated assessments for 6 (six) AYs immediately preceding the search AY. The assessment for the search AY was not covered in this period of six years as the search AY is taken up for scrutiny directly by issuing notice u/s 143(2) of the Act. Hence, effectively 7 (seven) years were being pursued for assessment prior to Finance Act, 2017. 5. On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in deleting the addition of income determined on account of Proportion @ 3% of unaccounted sales of Rs. 1,79,90,435/-. 6. On the facts and in the circumstances of the case and in law, AO has duly investigated and applied his mind on the report of the DDIT, Investigation wing and after satisfying himself made the assessment on the basis of cogent material and relevant evidence on record. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 21. Grounds of appeal raised by the assessee, for assessment year 2011-12,in IT(SS) No. 01/Rjt/2022, are as follows: The grounds of appeal mentioned hereunder are without prejudice to one another. 1.The learned Commissioner of Income-tax (Appeals)-11, Ahmedabad [CIT(A)] erred on facts as also in law in rejecting assessee plea that no addition could have been made in the order passed u/s 153A of the Act, in absence of there bring incriminating material found form the assessee. The order passed making addition without there being any incriminating materials may kindly be deleted. 2.The learned CIT(A) erred on facts as also in law in not appreciating that fact that the seized data / documents were found from the premises of third party, therefore cannot be made in the hands of the assessee u/s 153A of the Act. The AO may kindly be directed to deleted the addition on this ground. 22.Learned Counsel for the assessee, argued that as per explanation 1 to proviso to section 153A of the Income Tax Act, the assessment year (AY)2011-12, is outside the block period of 10 assessment years, therefore, the assessing officer ought not to have made assessment on the assessee for Page | 32 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 the assessment year 2011–12. The Learned Counsel stated that Ld. CIT(A) has rightly quashed the assessment framed on the assessee, for assessment year 2011–12, as it is outside, the block period of 10 years,as per explanation 1 to proviso to section 153A of the Income Tax Act 1961, therefore, order of the ld. CIT(A) may be upheld. 23. On the other hand, learned CIT DR for the revenue, submitted that assessment year 2011–12, is a part of 10 years block-period, as per the provisions of section 153A of the Act, hence, it should not be excluded and the income which has escaped assessment for the assessment year 2011–12 should be taxed in the hands of the assessee. 24. We have heard the rival parties and have gone through the material placed on record. We noticed that a search action was carried out on 10.11.2020, on the assessee-company, which is relevant to A.Y.2021-22. As per explanation 1 to proviso to section 153A, the expression 'relevant assessment year' shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which the search is conducted or requisition is made. Thus, the period of ten years shall be from the end of the assessment year relevant to the previous year in which the search is conducted or requisition is made. In other words, period of ten years has to be computed from end of relevant assessment year, i.e., from 31st March 2022. Hence, in the instant case, 1stassessment year was, A.Y.2021-22 and 10th assessment-year is A.Y.2012- 13. Therefore, Ld. CIT(A), has rightly observed that no proceedings can be initiated u/s.153A or 153C beyond assessment year (A.Y.)2012-13 in the assessee`s case under consideration. The Ld CIT(A) also relied upon the decision of the Hon'ble Madras High Court in the case of A R Safiullah Page | 33 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 vs. ACIT in WP No. 4327 of 2021 and WMP No. 3513, 3515 & 3516 of 2021, wherein, the Hon'ble High Court has held as follows: “9. Explanation-I is clear as to the manner of computation of the ten assessment years. It clearly and firmly fixes the starting point. It is the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. There cannot be any doubt that since search was made in this case on 10.04.2018, the assessment year is 2019-20. The end of the assessment year 2019- 20 is 31.03.2020.The computation of ten years has to run backwards from the said date i.e., 31.03.2020. The first year will of course be the search assessment year itself. In that event, the ten assessment years will be as follows: 1st year 2019-20 2nd year 2018-19 3rd year 2017-18 4th year 2016-17 5th year 2015-16 6th year 2014-15 7th year 2013-14 8th year 2012-13 9th year 2011-12 10th year 2010-11 The case on hand pertains to A. Y. 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department. 10.In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153 A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the Page | 34 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed.” 25. Considering the decision of Hon'ble High court referred (supra), it is observed that in the case of the assessee, a search action was carried out on 10.11.2020 and therefore, according to Explanation 1 of proviso to section 153A of the Act, the assessment year is 2021-22. The end of the assessment 2021-22 is 31.03.2022.The computation of ten years has to run backwards from the said date i.e. 31.03.2022. The first year will of course be the search assessment year itself i.e. A.Y.2021-22. In that event, the ten assessment years will be as under: 1st year 2021-22 2nd year 2020-21 3rd year 2019-20 4th year 2018-19 5th year 2017-18 6th year 2016-17 7th year 2015-16 8th year 2014-15 9th year 2013-14 10th year 2012-13 Page | 35 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Therefore, Ld CIT(A)observed that entire issue raised by assessee regarding issuance of notice u/s 153A for A.Y. 2011-12 is valid or not is covered by decision of Hon'ble Madras High Court in the case of A R Safiullah referred (supra). The Hon'ble High court has interpreted Explanation 1 of proviso to section 153A of the Act and observed that while computing ten years for the purpose of notice u/s 153A, search year would also be considered as one of the years and previous nine years can be covered which means that the explanation clearly shows that, the period of 10 years includes the search relevant assessment year. The ld. CIT(A) also relied on the decision of ITAT Chennai Bench in the cases of ACIT, Central Circle-1 (3) Chennai Vs. Shri V. Durai& other in ITA Nos. 56/Chny/2022 to No.58/Chny/2022, wherein it was held that while computing ten assessment years, the starting point has to be the end of the search assessment year. In view of the above factual discussion and legal matrix of the case and respectfully following the decision of the Hon'ble Madras High Court and the decision of the Hon'ble ITAT, Chennai, it is held that AO was not empowered to issue notice u/s 153A for A.Y. 2011-12 as it was time barred assessment on the date of search. Considering such facts, assessment order passed by AO for A.Y. 2011-12 was quashed by ld CIT(A) and consequent addition made in assessment order would not survive. We find that above conclusions arrived at by the CIT(A) are correct and admit no interference by us. We, approve and confirm the order of the CIT(A). 26. In the result, appeal filed by the revenue in ITA No.296/RJT/2022 for assessment year 2011–12, is dismissed and assessee`s appeal in IT(SS)A No.01/RJT/2022for assessment year 2011–12, is also dismissed. 27. Now, we shall take, Revenue`s appeals ITA No. 297 to 299/Rjt/2022, for Assessment year 2012-13 to 2014-15 and corresponding cross appeals filed Page | 36 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 by the assessee in IT(SS) No. 2 to 4/Rjt/2022,for Assessment year 2012-13 to 2014-15. The summarized and concise grounds raised by the revenue in appeals in ITA No. 297 to 299/Rjt/2022, and assessee`s appeals in IT(SS) No. 2 to 4/Rjt/2022, are reproduce below: “Department's Ground No.1 - On the facts and in the circumstances of the case and in law, Id. CIT(A) erred in ignoring that prior to amendment, vide Finance Act,2017, section 153A(1)(b) stipulated assessments for 6 (six) AYs immediately preceding the search AY. The assessment for the search AY was not covered in this period in six years as the search AY is taken up for scrutiny directly by issuing notice u/s. 143(2) of the Act, Hence, effectively 7 (seven) were being pursued for assessment prior to Finance Act,2017. Department's Ground No.2 - On the facts and in the circumstances of the case of and in law, Id. CIT(A) fails to appreciate the facts that, Finance Act,2017 amended section 153A of the Act enabling the AO to issue notices for \"relevant assessment years\" i.e. four more years over and above the six years already covered earlier in the pre-amended section. This section of four more years was further subject to fulfillment of three conditions (a), (b), & (c) as stipulated in newly interested fourth proviso to section 153C and all the three conditions stipulated in fourth proviso have been fulfilled. Department's Ground No.3 - On the facts and in the circumstances of the case and in law, Id. CIT(A) erred in ignoring that there were parallel books of accounts maintained by the assessee in tally software, which was found and impounded during the course of Search, on which the AO has relied upon. Department's Ground No.4 - On the facts and in the circumstances of the case and in law, Id. CIT(A) failed to appreciate the facts of the case, that one of the key person of the group concern Shri Mihir Kangad in his statement recorded u/s 132(4) and has agreed unaccounted transactions in the tally files, though complex but made on the instruction of members of the Neelkanth Group and correlation between the transaction recorded in tally file with independently verifiable third -party evidences proves that the entries recorded in the evidences seized are correct and independently verifiable. Department's Ground No.6 - On the facts and in the circumstances of the case and in law, Id. CIT(A) failed to appreciate the facts of the case, AO has duly investigated and applied his mind on the report of the DDIT, Investigation Wing and after satisfying himself made the assessment on the basis of cogent material and relevant evidence on record. AND Appellant's Ground No. 2 - The learned Commissioner of Income-tax (Appeals)-l1, Ahmedabad [CIT(A)] erred on facts as also in law in rejecting appellants plea that no addition could have been made in the order passed u/s 153A of the Act, in absence of there being incriminating material found from the appellant. The order passed making addition without there being any incriminating materials may kindly be deleted. Page | 37 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Appellant's Ground No.3 - The learned CIT(A)erred on facts as also in law in not appreciating the fact that the seized data / documents were found from the premises of third party, therefore addition on the basis of the said document cannot be made in the hands of the appellant u/s 153A of the Act. The AO may kindly be directed to delete the addition on this ground. Department's Ground No.5 - On the facts and in the circumstances of the case of and in law, Id. CIT(A) erred in deleting the addition of income determined on account of proportion @ 3% of unaccounted sales of (i) Rs.2,88,97,919/- for AY.2012-13 (ii) Rs.3,72,39,587/- for AY.2013-14 (iii) Rs.4,79,73,616/-for AY.2014-15 AND Appellant's Ground No.4- The Id. CIT(A) erred on facts as also in law in not deleting on merit, the addition of (i) Rs.2,88,97,919/- for AY.2012-13 (ii) Rs.3,72,39,587/- for AY.2013-14 (iii) Rs.4,79,73,616/- for AY.2014-15 made on the basis of dumb data/documents stated to have been recovered from the premises of third party. The Action of Id. CIT(A) in not deciding the ground of appeal on merit is unjustified. The AO may kindly be directed to delete the addition. Appellant's Ground No.7 - On the facts and in the circumstances of the case of the case and in law, Id. CIT(A) ought to have upheld the order of the AO. Appellant's Ground No.8 - It is therefore, prayed that the order of Id. CIT(A) be set aside and that of the AO be restored to the above extent. These ground nos. 7 and 8 above are general in nature. 28. Learned Counsel for the assessee, at the outset submitted that in these, Revenue`s appeals in ITA No. 297 to 299/Rjt/2022, for Assessment year 2012-13 to 2014-15 and corresponding cross appeals filed by the assessee in IT(SS) No. 2 to 4/Rjt/2022,for Assessment year 2012-13 to 2014-15, the additions were deleted by the ld. CIT(A) based on the fact that value of the assets seized in these assessment years, were below Rs.50 lakhs, therefore, assessing officer, does not have power to make the assessment, under section 153A of the Act. The ld Counsel pointed out that the asset found and its accretion from year to year is less than Rs.50 lacs and also aggregate value of such accretion is less than Rs.50 lacs. Therefore, since the asset found and its accretion over each year is less than Rs.50 lacs and also aggregate value of such accretion is less than Rs.50 lacs, the proceedings initiated by the AO on the basis of Explanation to proviso to section 153A fails to satisfy the provisions of law. The ld Counsel, therefore, relied on the findings of the Page | 38 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 learned CIT(A) and stated that order passed by the ld. CIT(A) may be upheld. 29. On the other hand, ld. DR for the revenue, relied on the findings of the assessment order, passed by the assessing officer. 30. We have considered the rival submissions and perused the relevant finding given in the impugned order of ld CIT(A), we find merit in the submissions of ld Counsel for the assessee, and noticed that value of immovable and movable assets, in the assessment years 2012–13, 2013–14 and 2014–15 or below Rs. 50 Lakhs. In this regards the findings of the ld. CIT(A) are reproduced below: “6.5The Fifth plea of the assessee is that in order to initiate proceedings u/s.153A for a period beyond six years, there should be undisclosed income and it should be represented in the assets based on tangible materials in excess of Rs.50 lacs. On this basis, assessee has claimed that in the instant case, since no tangible asset has been found, the proceedings for the Assessment Years 2011-12 to 2014-15 initiated u/s.153A of the Act is bad in law. 6.5.1On perusal of the assessment order, it is seen that this issue was raised by the assessee in the assessment stage and the AO had rebutted the same passing the assessment order. The relevant para is reproduced as under: A.S.M. Balance Sheet 1 – Apr – 2011 to 31- March - 2012 A. S. M. A. S. M. Liabilities As at 31. Mar. 2011 Assets As at 31. Mar. 2011 Loans (Liabilities) Capital account 7816565.08 Current Liabilities 16579384.85 Fixed assets 9891238.30 Current assets 1128418.53 Profit & Loss A/c Opening Balance Current Period 100531257.92 Less transferred 100531257.32 Total 17707803.38 Total 1707803.38 6.5.2 The Assessee has contended that in order to invoke the extended period of limitation under Section 153A of the Act, the AO should satisfy himself about the undisclosed income represented in form of an asset and Explanation 2 to section 153A defines assets as immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. Itis observed that loose paper referred by AO for the purpose of invocation of Section 153A of the Act for AY 2011-12 to 2014-15, is balance sheet titled as \"ASM\", which was recovered from the digital data. Such balance sheet contains figures under the grouping of \"Fixed Assets\", \"Current Assets \"and \"Capital\" and it is not known as to what items are included in such grouping. For invocation of extended period under 153A of the Act, undisclosed asset should be in the nature of immovable property, shares & securities, loans & advances or Page | 39 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 deposit in bank account. Therefore, without having any evidence regarding assessee's investment in any of such specified assets, the special provision invoked by the AO is not justified. It is also observed that the assessee also pleaded that the so-called assets should have been acquired in the assessment year under consideration. However, from the impugned balance sheet extracted from the digital data, it cannot be ascertained that the asset is acquired in the year under consideration or the same has been brought forward as opening balance from the preceding year. The assessee also took the plea that such asset should be real and in existence. Nowhere during the course of search such asset has been identified and no question has been cast upon the assessee. This clearly proves that no such asset has been found. 6.5.3 While passing the Assessment Order for AY 2011-12, the AO has referred to following seized material. A.S.M. Balance Sheet 1 – Apr – 2010 to 31- March - 2011 A. S. M. A. S. M. Liabilities As at 31. Mar. 2011 Assets As at 31. Mar. 2011 Capital Account 9497936.97 Fixed Assets 9281855.50 Loans (Liability) Current Assets 1795486.32 Current Liabilities 1579384.85 Profit & Loss A/c Opening Balance Current Period 40394715.50 Less transferred 40394715.50 Total 11077321.82 Total 11077321.82 6.5.4 In this regard, it is important to mention here that the impugned seized tally file contain noting from F.Y.2007-08 onwards. Therefore, balance under the head of Assets appearing the balance sheet for F.Y.2010-11 (i.e. A.Y.2011-12) cannot be treated as investment made in the year under consideration. For better clarity, it is necessary to reproduce the seized balance sheet for the F.Y.2009-10 (i.e. A.Y.2010-11), which is as under:- A. S, M. Balance sheet 1 – Apr – 2009 to 31 – Mar - 2010 Liabilities As at 31. Mar. 2010 Assets As at 31. Mar. 2011 Capital Account 1,33,88,520.97 Fixed assets 90,77,438.90 Loans ( Liability) Current Assets 58,90,486.32 Current Liabilities 15,79,384.85 Profit & Loss A/c Opening Balance Page | 40 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Current Period 7,21,57,686.00 Less transferred 7,21,57,686.00 Total 1,49,67,905.82 Total 1,49,67,905.82 On perusal of the above, it is found that the total value of Asset for A.Y.2011-12 is Rs. 1,10,77,322/- and total value of Assets for A.Y.2010-11 is Rs. 1,49,67,906/-. Thus, there is overall reduction of assets in seized tally balance sheet. It is observed that when value of assets for AY 2011-12 is compared with value of assets for AY 2010-11, there is decrease in the value of assets to the extent of Rs.38,90,584/- (1,49,67,906/- less Rs.1,10,77,322/-). Hence, it is clear that no tangible asset exceeding Rs.50 lacs was found in A.Y.2011-12. 6.5.5 Similarly, it is necessary to reproduce the seized balance sheet as mentioned by the AO in the assessment order for A.Y.2012-13, which is as under: A.S.M. Balance Sheet 1 – Apr – 2011 to 31- March - 2012 A. S. M. A. S. M. Liabilities As at 31. Mar. 2011 Assets As at 31. Mar. 2011 Loans (Liabilities) Capital account 7816565.08 Current Liabilities 16579384.85 Fixed assets 9891238.30 Current assets 1128418.53 Profit & Loss A/c Opening Balance Current Period 100531257.92 Less transferred 100531257.32 Total 17707803.38 Total 1707803.38 On perusal of the above, it is found that the total value of Asset for A.Y.2012-13 is Rs.98,91,238/- and total value of Assets for A.Y.2011-12 is Rs. 1,10,77,322/-. It is clearly seen that there is clear reference of asset, which has actually reduced from the previous year, and therefore, there is no accretion of asset during the year under consideration i.e. A.Y.2012-13. Therefore, if we take the difference between value of Fixed Assets & Current Assets as appearing in the balance sheet of A.Y.2012-13 amounting to Rs.98,91,238/- and balance sheet for A.Y.2011-12 amounting to Rs.1,10,77,322/-, then there is decrease in the value of assets to the extent of Rs.11,86, 084/- .Hence, it is clear that no asset exceeding Rs.50 lacs was found in A.Y.2012-13. 6.5.6Similarly, it is also necessary to reproduce seized balance sheet as mentioned by the AO in the assessment order for A.Y.2013-14, which is as under. A.S.M. Balance Sheet 1 – Apr – 2012 to 31- March - 2013 A. S. M. A. S. M. Liabilities As at 31. Mar. 2013 Assets As at 31. Mar. 2011 Capital Account 8449158.12 Fixed Assets 9335465.30 Loans (Liabilities) Profit & Loss A/c 4172691.59 Current Liabilities 1579384.85 Opening Balance Current assets 3479611.92 Current Period 152679951.7 6 Less transferred 157052643.3 5 Total 13508154.89 Total 13508154.89 Page | 41 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 On perusal of the above, it is found that the total value of Asset for A.Y.2013-14 is Rs.93,35,463/- and total value of Assets for A.Y.2012-13 is Rs.98,91,238/-. Therefore, if we take the difference between value of Fixed Assets & Current Assets as appearing in the balance sheet of A.Y.2013-14 amounting to Rs.93,35,463/- and balance sheet for A.Y.2012-13 amounting to Rs.98,91,238/-, then there is decrease in the value of assets to the extent of Rs.5,55,775/-. Hence, it is clear that no asset exceeding Rs.50 lacs was found in A.Y.2013-14. 6.5.7Further, it is also necessary to reproduce the seized balance sheet as mentioned by the AO in the assessment order for A.Y.2014-15, which is as under. A.S.M. Balance Sheet 1 – Apr – 2013 to 31- March - 2014 A. S. M. A. S. M. Liabilities As at 31. Mar. 2014 Assets As at 31. Mar. 2014 Capital Account 8123540.95 Fixed Assets 9604193.30 Loans (Liabilities) Profit & Loss A/c 10310772.76 Current Liabilities 1579384.85 Opening Balance 4172691.59 Current assets 10212040.2 6 Current Period - 174127530.6 4 Less transferred 180265611.8 1 Total 19914966.0 6 Total 1991466.06 On perusal of the above, it is found that the total value of Asset for A.Y.2014-15 is Rs.96,04,193/- and total value of Assets for A.Y.2013-14 is Rs.93,35,463/-. Therefore, if we take the difference between value of Fixed Assets & Current Assets as appearing in the balance sheet of A.Y.2014-15 amounting to Rs.96,04,193/- and balance sheet for A.Y.2013-14 amounting to Rs.93,35,463/-, then there is an increase in the value of assets to the extent of Rs.2,68,730/-.Hence, it is clear that no asset exceeding Rs.50 lacs was found in A.Y.2014-15. 6.5.8Summary of incremental value in Assets as per seized data is as under: 31.03.2010 31.03.2011 31.03.2012 31.03.201 3 31.03.2014 Fixed Assets 90,77,440 92,81,856 98,91,238 93,35,463 96,04,193 Increment al - 2,04,416 6,09,383 5,55,775 2,68,730 Current Assets 58,90,466 17,95,466 - - - Page | 42 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Increment al - (- )40,95,000 (-)1 7,95,466 - - Total Assets 1,49,67,906 1,10,77,322 98,91,238 93,35,463 96,04,193 Total Increment al (- )38,90,584 (-)11,86,084 (- )5,55,775 2,68,730 6.5.9In view of the above, it is observed that the asset found and its accretion from year to year is less than Rs.50 lacs and also aggregate value of such accretion is less than Rs.50 lacs. Therefore, since the asset found and its accretion over each year is less than Rs.50 lacs and also aggregate value of such accretion is less than Rs.50 lacs, the proceedings initiated by the AO on the basis of Explanation to proviso to section 153A fails to satisfy the provisions of law. 6.5.10It is observed that Fourth Proviso to Section 153A(1) r.w Explanation - 1 issued by Finance Act, 2017, with effect from 1st April, 2017 which states that when search under Section 132 is initiated on or after 1st April, 2017, notice for assessment or reassessment for assessment years covered by Explanation (in present case AY 2011-12 to 2014-15) would only be issued when AO is in possession of books of account or other documents or evidence which reveal that income represented in form of asset which has escaped assessment amounts to or is likely to amount Rs. 50 lacs or more in relevant Assessment Year or in aggregate relevant Assessment Years. The expression 'asset' has been defined in Explanation-2 as including immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. 6.5.11 It is further observed that in the Finance Bill 2017, there is a discussion under the heading ‘Rationalization of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C’. It is clarified there under that in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A relating to search assessments should be amended to provide that notice under the said section can be issued for an assessment year or years beyond sixth assessment year already provided upto the tenth assessment year if the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in one year or in aggregate in the relevant four assessment years (falling beyond sixth assessment year); such income escaping assessment is represented in the form of assets; and the income escaping assessment or part thereof relates to such year or years. 6.5.12 The Central Board of Direct Taxes in circular no. 2/2018 dated 15.02.2018 has clarified about the aforesaid amendment stating that notice under section 153A can be issued for an assessment year or years beyond the sixth assessment year upto the tenth assessment year where tangible evidence are found during search or seizure operation and the same is represented in the form of undisclosed investment in any asset. 6.5.13 In light of the above discussion, it is observed that in present case, during the course of search tally data was found based upon which AO has made impugned additions in all the Assessment Years. Such seized balance sheet is already reproduced in Assessment Order. On perusal of such seized balance sheet, which is also discussed in preceding para, it is found that Page | 43 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 there is no accretion of assets appearing in balance sheet from AY 2011-12 to 2014-15 which is in excess of Rs.50 lacs. Even aggregate accretion in these four years is not in excess of Rs.50 lacs as provided in Fourth Proviso to Section 153A(1) of the Act. While dealing with this contention, AO has only considered assets as appearing in balance sheet at year end i.e. as on 31st March, 2011 or 31st March, 2012 and onwards. The provision clearly requires AO to establish escapement of income in relevant Assessment Year which is represented by asset and such escaped assessment is for Rs.50 lacs or more in relevant Assessment Year or aggregate relevant Assessment Years. In the present case of Assessee, when assets appearing in seized material as appearing in balance sheet as relied upon by AO is considered from AY 2010-11 to 2014-15, there is no increase in assets in excess of Rs.50 lacs in a single year or in aggregate four years which means that escapement of income representing such assets is not Rs.50 lacs or more as mentioned in Fourth Proviso. On perusal of Assessment Order, it is apparent that even during the course of search, no physical assets were found which were acquired by Assessee in relevant four years which have value of Rs.50 lacs or more. Considering such facts, notice under Section 153A issued by AO for four Assessment Years being AY 2011-12 to 2014-15 is beyond the scope of Section itself and void ab initio hence consequent Assessment Order passed by AO deserves to be quashed. 31. We have gone through the above findings of learned CIT(A), and noticed that learn CIT has analyzed the balance sheet and the seized material in the assessment years, 2012–13 to assessment years 2014–15, and passed the speaking order. We have also examined independently, the balance sheet and the seized material in the assessment years, 2012–13 to assessment years 2014–15, and noticed that during the course of search, during the assessment years, 2012–13 to assessment years 2014–15, no physical assets were found which were acquired by Assessee in relevant three years which have value of Rs.50 lacs or more. Considering such facts, notice under Section 153A issued by assessing officer for three Assessment Years being AY 2012-13 to 2014-15 is beyond the scope of Section itself and void ab initio, hence consequent Assessment Order passed by assessing officer were quashed by ld CIT(A). We do not find any infirmity in the above order passed by the ld.CIT(A). That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. His order on these addition is, therefore, upheld and the grounds of appeal of the Revenue are dismissed. Since the assessee has also raised various grounds on merits, which need to be dismissed, as there is no point to adjudicate the issue on merit, as the notice under Section 153A issued by assessing officer for three Assessment Page | 44 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 Years being AY 2012-13 to 2014-15, is beyond the scope of Section itself and void ab initio, hence no adjudication on merit required, as the assessment order, itself is quashed, therefore, assessee under consideration got full relief. Therefore, we dismiss the various grounds raised by the assessee, merit. 32. In the result, grounds raised by the revenue in appeals in ITA No. 297 to 299/Rjt/2022, are dismissed and grounds of assessee`s appeals in IT(SS) No. 2 to 4/Rjt/2022, are also dismissed. 33. In the combined result: (i).Revenue`s appeals in ITA No. 302 to 306/Rjt/2022 Assessment year 2015-16 & 2018-19 to AY 2021-22 and Assessee`s appeals in IT(SS) No. 5, 8 to 10/Rjt/2022, for Assessment year 2015-16, and 2018-19 to A.Y. 2020- 21 respectively, and assessee`s appeal in ITA No. 292/Rjt/2022 for Assessment year 2021-22, in these five years, appeals of Revenue are allowed to the extent indicated in assessee`s own case -decision in IT(SS)A No. 6 and 7/RJT/2022, vide order dated 12.06.2024, whereas, appeals of the assessee for these five years are dismissed. (ii).Assessee`s Additional grounds of appeals for AY 2015-16, in a relation to carry forward of losses and set off of losses, are allowed. (iii)Notice issued u/s 153A for A.Y. 2011-12 was time barred, therefore, assessment order passed by AO for A.Y. 2011-12 was quashed by ld CIT(A) and consequent addition made in assessment order would not survive, we confirmed the findings of ld CIT(A), hence, appeal filed by the revenue raising grounds on merit, in ITA No.296/RJT/2022 for assessment year 2011–12, is dismissed and assessee`s appeal raising grounds on merit, in IT(SS)A No.01/RJT/2022for assessment year 2011–12, is also dismissed. Page | 45 ITA Nos.292, 296-299, 302-306/Rjt/2022& IT(SS)A Nos. 01-05 & 08-10/RJT/2022 (iv). Revenue`s appeals ITA No. 297 to 299/Rjt/2022, for Assessment year 2012-13 to 2014-15, are dismissed and corresponding cross appeals filed by the assessee in IT(SS) No. 2 to 4/Rjt/2022,for Assessment year 2012-13 to 2014-15, are also dismissed. (Reason:-no physical assets were found which were acquired by Assessee in relevant three years which have value of Rs.50 lacs or more. Assessee got full relief, hence, grounds raised by the assessee, on merit, become academic and infructuous). A copy of the instant common order be placed in the respective case file(s) Order is pronounced on 29/11/2024 by placing the result on the Notice Board. Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) ÆयाियकसदÖय/ Judicial Member लेखा सदÖय/ Accountant Member TRUE COPY राजकोट /Rajkot Ǒदनांक/ Date: 29/11/2024 DKP Outsourcing Sr.P.S आदेश कì ÿितिलिप अúेिषत/ Copy of the order forwarded to :  अपीलाथê/ The Assessee  ÿÂयथê/ The Respondent  आयकर आयुĉ/ CIT  आयकर आयुĉ (अपील)/ The CIT(A)  िवभागीयÿितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडªफाईल/ Guard File By order/आदेश से, सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट "