ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, TRICHY, INCOME TAX OFFICE, TRICHY V. LIFE LINE AUTO FINANCE, KARUR

ITA 1630/CHNY/2025

AI Insights

The case involves an appeal by the Revenue against the order of the Ld.CIT(A) which deleted the protective addition of Rs.10,00,00,000 made by the AO in the hands of M/s. Life Line Auto Finance, a partnership firm, for the Assessment Year 2013-14. The addition was based on a loose sheet found during a search operation and a statement recorded from Shri K.S. Ravindran, a partner in the firm. The Tribunal found that the loose sheet was a third-party document and not in the handwriting of the partners of the assessee firm, and thus could not be relied upon to establish the addition. Furthermore, the Tribunal noted the absence of any corroborative evidence linking the assessee to the entries in the loose sheet or the statement of Shri K.S. Ravindran.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831787 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 03-06-2025
• Other Referred Cases: Chuharmal Vs CIT, CIT Vs Sant Lal, ACIT Vs Satyapal Wassan, MM Financiers (P) Ltd Vs. DCIT, Regency Mahavir Properties Vs ACIT, DCIT Vs. Vipin Aggarwal, S.P Goyal Vs DCIT, T.S Venkatesan Vs ACIT, Monga Metals (P) Ltd Vs ACTT, Dhakeshwari Cotton Mills Ltd. Vs. CIT, Pullangode Rubber Produce Co Ltd v State of Kerala, Ashok Commercial enterprises Vs. ACIT, Goldstone Cements Ltd. Vs. DCIT, ACIT Vs. Fortune Vanijya Private Limited
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. VENKATA RAMAN
• Assessee Lawyers: SHIVA SRINIVAS; C.I.T
• Keywords: Condonation of delay; Set aside; Corroborative evidences; Income from undisclosed sources; Documents seized; Bogus loan; Borrowed satisfaction; Bogus
• Section: 132; 153A; 139; 2; 260A

Judgement Text

" आयकर अपील य अ धकरण, ‘बी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI \u0015ी जॉज\u0018 जॉज\u0018 क े, उपा\u001aय\u001b एवं \u0015ी एस.आर.रघुनाथा, लेखा सद%य क े सम\u001b BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:1630/Chny/2025 'नधा\u0018रण वष\u0018 / Assessment Year: 2013-14 ACIT, Central Circle-2, Trichy. vs. Life Line Auto Finance, 306-B1, First Floor, Bharathi Nagar, Mahatma Gandhi Road, Karur – 639 002. (अपीलाथ)/Appellant) [PAN:AAEFL-7071-N] (*+यथ)/Respondent) अपीलाथ) क, ओर से/Appellant by : Shri. R. Venkata Raman, C.A. *+यथ) क, ओर से/Respondent by : Shri. Shiva Srinivas, C.I.T. सुनवाई क, तार ख/Date of Hearing : 11.11.2025 घोषणा क, तार ख/Date of Pronouncement : 20.01.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM: The present appeal of the Revenue is directed against the order dated 21.03.2015 passed by the Learned Commissioner of Income Tax (Appeals)-19, Chennai [hereinafter referred to as “the Ld.CIT(A)”], arising out of the assessment order dated 31.03.2022 passed by the Deputy Commissioner of Income Tax, Central Circle-2, Trichy [hereinafter referred to as “the AO”] u/s.143(3) r.w.s 153C of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], for the Assessment Year 2013–14. Printed from counselvise.com :-2-: ITA. No:1630/Chny/2025 2. We find that the appeal is filed with a delay of 3 days. The AO filed affidavit for condonation of delay stating the reasons for belated filing of the appeal. On hearing both the parties and on examination of the said affidavit, we find the reasons stated by the Revenue are bonafide and no latches can be attributed to them. Hence, the delay of 3 days in filing the appeal is condoned and the case is adjudicated on merits. 3. The Revenue has raised the following grounds of appeal: - 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred in deleting the addition of Rs.10 Crores made on account unexplained Money u/s.69A of the Act by observing that loose sheets found during the course of search showing the unaccounted cash deposits made by the partners in the firm as a defective document by not taking cognizance of Sec.292C(1) which reads, ‘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 – (ii) that the contents of such books of account and other documents are true. 3. The Ld.CIT(A) erred in giving relief to the assessee by observing that material found in a third party premise was not in the handwriting of the assessee thereby ignoring section 101 of the Evidence Act 1872, which reads “Whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exists”. 4. The Ld.CIT(A) failed to observe that the receipts and payments have been recorded on day-to-day basis in the seized material meticulously, the day-wise/page-wise total was also found therein & the incriminating material seized satisfies the meaning of “book of account’ as per the provisions of Sec.34 of the Evidence Act, 1872. The Hon’ble Supreme Court in the case of Chuharmal Vs CIT (1988) 38 Taxman 190 (Supreme Court) has held that, whenever a need arises, the tax authorities can invoke the provisions of the Evidence Act. 5. The observation of the Ld.CIT(A) that the material having been found from the premises of a third party and not having entries in the handwriting of the assessee could not be used to draw adverse inference in the case of the assessee is erroneous as Section 132(4A) r.w.s 292C of IT Act provides for a presumption that the contents of documents found during the course of search are true and though such presumption is rebuttable, the onus is on the assessee to furnish evidence or explanations to rebut the same. Printed from counselvise.com :-3-: ITA. No:1630/Chny/2025 6. Ld.CIT(A) erred in holding that AO lacked jurisdiction u/s 153A/153C as the undisclosed investments in the form of deposits in the firm by its partners were only for the purpose of making bogus loans and advances by the firm & the loose sheets and admission based on that clearly proved that there was investment of Rs.10 crores (which is more than 50 lakhs as stipulated as a pre condition). 7. For these grounds and any other ground including amendment of grounds that may be raised during the course of appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. 4. The brief facts of the case, as borne out from the record, are that the assessee is a partnership firm. The present appeal emanates from the search action conducted u/s.132 of the Act in the case of M/s.Vasuki Enterprises on 26.03.2021. During the course of the said search at the business premises, certain incriminating documents, loose sheets and other materials were found and seized. 5. It was noticed by the search team that the seized incriminating documents/loose sheets indicated that investments in the form of fixed deposits had been made by Shri S. Maragathamani, who is stated to be a partner of M/s.Life Line Auto Finance, which fact was also confirmed by Shri K.S.Ravindran during the course of post-search proceedings. It was further observed that investments in the nature of fixed deposits were advanced by six partners of the firm, out of which five partners were stated to have contributed an amount of Rs.2.00 crores each in their names. It was also recorded that the said investments were utilised for advancing cash loans to various parties. 6. Since the assessee firm was found to be interlinked with multiple searched entities covered u/s.153A of the Act, the AO initiated proceedings u/s.153C of the Act by issuing notice dated 25.02.2022 for A.Y.2013-14. In response thereto, the assessee filed its return of income admitting total income of Rs. 58,780/- on 29.03.2022. The AO noted that the return of income was filed on the last date of limitation relevant for completion of assessment. Printed from counselvise.com :-4-: ITA. No:1630/Chny/2025 7. During the course of assessment proceedings, the AO observed that loose sheet No.49 seized during search, coupled with the deposition statement of Shri K.S.Ravindran, revealed that family members of five main partners had made investments aggregating to Rs.10.00 crores (Rs.2.00 crores each) in the assessee firm during FY 2012-13, relevant to AY 2013-14, which was thereafter used for advancing loans. 8. In order to bring the said amounts to tax, the AO confronted the assessee with the proposal to make protective addition in respect of the said investments. In reply, the assessee submitted that no addition was warranted in the hands of the firm since the respective partners and their family members, who were stated to be partners, had accepted the investment of Rs. 2 crores each in their individual hands. 9. The AO, however, observed from the list/details of partners furnished during post-search proceedings that Shri K.P.Mariappan, Shri S.Maragathamani, Smt.R.M.Vaishnava Priya and Shri R.S.Manian had contended that the investments were jointly made by family members of the respective partners and that the amounts had been split across different assessment years in the hands of various family members. 10. The AO, in the interest of safeguarding the Revenue, proposed to assess the capital contribution protectively in the hands of M/s. Life Line Auto Finance, on the ground that while the partners claimed that the investment of Rs. 2 crores each was made collectively by family members, the records indicated that all such family members were not partners in the assessee firm. The assessee also claimed that most of the investments pertained to periods prior to AY 2015- 16 and were therefore outside the scope of assessment. The AO held that such contentions were not supported by the seized material and were also contrary to the deposition statement of Shri K.S.Ravindran. Printed from counselvise.com :-5-: ITA. No:1630/Chny/2025 11. Further, the AO recorded that the status and tax jurisdiction of certain persons claimed to have made investments was not ascertainable on record. In view of the above facts and circumstances, the AO proceeded to make a protective addition of Rs.10,00,00,000/- in the hands of the assessee firm as unexplained money u/s.69A of the Act for the A.Y. 2013-14. 12. Accordingly, after making the aforesaid protective addition, the AO completed the assessment by passing an order u/s.143(3) r.w.s 153C of the Act, dated 31.03.2022. 13. Aggrieved, assessee carried the matter in appeal before the Ld.CIT(A), who vide the impugned order dated 21.03.2025 deleted the protective addition of Rs.10,00,00,000/- made by the AO u/s.69A of the Act observing as under: - “6.5.3 As evident in the assessment order, the AO relied on a loose sheet found at the premises of M/s.Vaasuki Enterprises and the sworn statement of Mr.K.S.Ravindran, recorded on 23.06.2021, to make an addition of Rs. 10 crores to the appellant’s income for AY 2013-14. The AO concluded that Rs.10 crores were placed as fixed deposits (FDs) with the appellant during FY 2012-13, based on the information found in the seized material and the statement provided by Mr. Ravindran. 6.5.4 The contention of the appellant is that the loose sheet, seized from M/s. Vaasuki Enterprises (run by Mr.K.S.Ravindran’s family), merely reflects the balance of fixed deposits outstanding with the appellant as of 22.02.2021 and this document does not provide any information regarding key aspects such as whether M/s.Lifeline Auto Finance had accepted or placed deposits, who the depositors were, or the timeline of the deposits and withdrawals. The seized material can, at best, be viewed as reflecting investments made by Mr.Ravindran’s family under the presumption in Section 292C of the Income Tax Act. The appellant further asserted that the seized material does not contain information about the investments made by other partners in the appellant’s group of finance firms. 6.5.5 In addition, the appellant submits that Mr. K.S. Ravindran, being an investing partner and not a managing partner, could not have full knowledge of the specific investments made by all family members in the appellant's finance firms. Therefore, reliance on his statement without corroborative evidence is legally inappropriate. Shri. K.S. Ravindran named only a few family members in his statement, and the appellant highlights that this cherry picking cannot justify an addition of Rs. 10 crores in the absence of concrete and conclusive evidence. Printed from counselvise.com :-6-: ITA. No:1630/Chny/2025 6.5.6 The AR relied upon the case of Abhisar Buildwell P Ltd. [2023 (4) TMI 1056], which emphasizes that a statement made by an individual, without corroboration, cannot form the sole basis for an addition to income. The AR also pointed out that Shri. K.S. Ravindran deposed that the Rs. 10 crore investment was made in FY 2012-13, whereas the actual business operations commenced only in the FY 2014 15. The AR strongly contended that such a delay in commencing business is not in line with prudent business practices and asserted that the investments were made over several years and not as a single lump sum in one FY 2012-13. Therefore, the AO’s conclusion that all five partners invested Rs. 2 crores each as fixed deposits during FY 2012-13 is unfounded and not supported by the seized material 6.5.7 On an analysis of the above submission and the seized material relied upon by the AO, it can be seen that nowhere in the seized material there contained any narration about the receipt of Rs. 10 Crore by the entity M/s. Life Line Auto Finance from its partners. It may be appreciated that the said loose sheet relied upon by the AO was neither seized from the premises of the appellant nor was the same found to be in the handwriting of the five partners of the appellant firm. Such material seized in the case of a third party which is not in the hand writing of any of the five partners of the appellant firm does not constitute adequate evidence to draw any adverse inference against the Appellant, in the absence of any other corroborative evidence. This proposition has been laid down by the Hon'ble Delhi High Court in the case of CIT Vs Sant Lal [2020] 118 taxmann com 432 (Del) , wherein it was held therein that where a diary was seized in search of the premises of a third party allegedly containing entries of hundi transactions on behalf of various parties including the assessee, no addition could be made based on the said entries since the diary was neither found from premises of assessee nor was it in handwriting of assessee and revenue failed to produce any other cogent material to link the assessee to the diary. The ratio of the said decision is squarely applicable to the case of the appellant as the AO has not referred to any cogent evidence applicable to the case of the appellant. As the AO has not referred to any cogent material to corroborate that the entries made in the loose sheet seized from a third party which are purportedly the transactions made by the Appellant. There is absolutely no mention in the seized material regarding the nature of the said transactions of cash payments, the purpose of such payments and the precise identity of such transaction. 6.5.8 A narration made in a loose sheet by a third person with scant details cannot be used to fasten tax liability upon the person whose name does not appear at all. In the absence of any corroborative evidence to attribute the entries to such a person. Such seized material is liable to be treated as a defective document, which does not have any evidentiary value in respect of the entries found therein, unless corroborative evidence is available which can provide necessary reliable basis for deciphering the nature and character of the said entries. 6.5.9 At this juncture, it would be relevant to refer to the decision of Hon'ble ITAT, Jabalpur in the case of ACIT Vs Satyapal Wassan [TS- Printed from counselvise.com :-7-: ITA. No:1630/Chny/2025 5104-ITAT 2007(Jabalpur)-O] (2008) 5 DTR 0202, wherein the Hon'ble ITAT stressed the importance of gathering corroborative evidence in support of the contents of a document, particularly when the document is bereft of necessary details and is not complete in all respects, by stating as under: \"For the sake of argument if we accept the submission of the learned Departmental Representative that the learned CIT(A) erred in accepting fresh evidence then what is left after ignoring those affidavits is the bare document No. 7 with the bare details as referred to above. The moot question now arises is whether any addition can be made on the basis of that document. We have already pointed out above that this document is bereft of necessary details about year of transaction, ownership of transaction, nature of transaction, necessary code for deciphering the figures. It may be possible that a document may not be complete in all respects as the businessmen or tax evaders may choose to record minimum details on a document and keep the rest in their memory. It is the duty of the AO to carry out necessary investigations by correlating the impugned document with other documents seized, with regular books of account, with record kept by outside agencies, such as banks or financial institutions or debtors/creditors and finally, by recording the statements of concerned parties so as to fill up the gaps in confirming the inference arising from the documents for a proper charge of tax. Such correlation is necessary unless the document is capable of speaking giving full details so as to enable any intelligent person to find out the nature of transaction, the year of transaction, the ownership of the transaction and quantum thereof. Even in that situation, it is necessary to give opportunity to the assessee to offer his explanation and investigation be carried out to strengthen the direct inference arising from this document.” 6.5.10 The proposition that addition cannot be made merely on the basis of entries in loose sheets found in the premises of a third party without bringing on record independent evidence to corroborate such entries has been reiterated in several decisions. Some of the decisions to this effect are MM Financiers (P) Ltd Vs. DCIT (2007) 107 TTJ (Chennai) 200, Regency Mahavir Properties Vs ACIT [2018] 169 ITD 35 (ITAT-Mumbai), ACIT Vs. Katrina Rosemary Turcotte [2017] 190 TTJ 681 (ITAT-Mumbai), DCIT Vs. Vipin Aggarwal [2017] 83 taxmann.com 6 (ITAT Chandigarh), S.P Goyal Vs DCIT [2002] 82 ITD 85 (TM) IΠΑΤ, T.S Venkatesan Vs ACIT [2000] 74 ITD 298 (Cal) and Monga Metals (P) Ltd Vs ACTT [2000] 67 TTJ 247 (All). 6.5.11 In particular, it is of critical importance that the evidence to corroborate the narrations indicating payments in the seized material found with a third party is available with specific reference to the fact regarding actual transfer of money from the said third party to the recipient named in the said entries in the seized material. The Hon'ble Printed from counselvise.com :-8-: ITA. No:1630/Chny/2025 ITAT, Mumbai held in the case of Riveria Properties Private Limited Vs ITO in ITA No.250/MUM/2013 that the AO is required to bring further evidence on record to show that the money was actually exchanged between the parties in a case where there is no other evidence on record to prove that on-money was paid except the loose sheet found in the premise of a third party and admission made by the third party. The relevant part of the said decision is reproduced as under: \"In the present case on hand, except loose sheet found in the premises of third party and admission made by the third party in their assessment proceedings, there is no other evidence on record to prove that on money is paid. The assessing officer, without brought on record any evidence to prove that on money is exchanged between the parties, merely harping upon the loose sheet and the third party admission, which cannot be considered as conclusive evidence against the assessee to bring on money to tax as undisclosed income. The AO is required to bring further evidence on record to show that actual on money is exchanged between the parties, but literally failed to do so. The A.O. did not conduct any independent enquiry relating to the value of the property instead, merely relied upon the statement given by the purchasers of the property, which is not correct. Further, there is no proof of origin and destination of on money. The A.O failed to prove the source of the purchasers as to how the money was arranged and also failed to prove the deployment of unaccounted money by the seller by any form of evidence. Under these circumstances, based on paper jottings as conclusive evidence on money cannot be brought to tax as income from undisclosed sources.\" 6.5.12 Further as per the decisions of the Hon'ble Apex Court in the case of Dhakeshwari Cotton Mills Lids. CIT (1954) 26 ITR 775 (SC) corroborative evidence is essential to support the evidence found in third party premise. In order to properly appreciate the issue, it is useful to refer to the following extract from the decision of Hon'ble Apex Court in the case of Dakeswari Cotton Mills Ltd Vs. CIT (1954) 26 ITR 775 (SC): \"As regards the second contention, we are in entire agreement with the learned Solicitor-General when he says that the Income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence, a court of law, but there the agreement ends; because it is equally clear that in making the assessment under sub-section (3) of Section 23 of the Act, the Income Tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must be something more than bare suspicion to support the assessment under section 23(3). The rule of law on this subject has, in our opinion, been fairly and rightly stated by Printed from counselvise.com :-9-: ITA. No:1630/Chny/2025 the Lahore High Court in the case of Seth Gurmukh Singh (supra)\". 6.5.13 As evident from the decisions cited above, though it is true that the provisions of Evidence Act do not apply with the same rigor to the Income Tax proceedings, but the AO is not entitled to make a pure guess and make an assessment without reference to any evidence/material. It follows there from that addition cannot be made unless there is corroborative evidence to validate the entries found in the material seized from a third party. 6.5.14 As discussed supra, the seized material relied upon by the AO, more particularly the loose sheet which was found and seized at third party premise when the same was not in the handwriting of the Appellant as well as the receivers of the alleged deposits, obviously such loose sheets can only be in the nature of a defective document. The AO cannot arrive at any conclusion based solely on the said material that the Appellant has actually made deposits to the tune of Rs. 2 Crores. There is no corroborative evidence to prove that the payments noted in the seized material have actually materialised between the appellant and M/s. Life Line Auto Finance. 6.5.15 As already discussed in detail in the preceding paragraphs, the seized materials are in the nature of a defective document(s) which does not contain complete and unambiguous information to arrive at any conclusion that the appellant firm had received a deposit of Rs. 10 Crores in the FY 2012-13 relevant to AY 2013-14 from its partners. There is no corroborative evidence to prove that the deposits noted in the seized material have actually materialised from the partners of the appellant firm. Further, it is also significant to bring on record that neither the Authorized Officer nor the AO had any occasion to cross verify the facts narrated in the seized material by way of recording statement from the partners of the Appellant Firm. Thus, it can be very-well stated that the AO had completed the assessment in a mechanical manner without correct appreciation of facts. 6.5.16 The jurisdictional tribunal in the following cases has held that without there being any corroborative evidence addition cannot be made in the hands of the appellant based upon the defective documents and unsupported sworn statements viz.. i) DCIT Central Circle-2(4) Chennai vs. O Pannerselvam in ITA No. 581 & 582/Chny/2023 dated 05.04.2024 ii) DCIT Central Circle-2(2) Chennai vs Karuppagounder Palaniswami in ITA No. 125, 126, 127 and 213, 214, 215 / Chny/2023 dated 03.04.2024 iii) DCIT Central Circle-2(4) Chennai vs Vaithialingam in ITA No. 604,605,606/chny/2023 dated03.04.2024 Printed from counselvise.com :-10-: ITA. No:1630/Chny/2025 iv) DCIT Central Circle-2(4) Chennai vs Vivek Papisetty in IT A No. 211, 212 and 405/Chny/2023 dated 02.04.2024 v) DCIT Central Circle-2(4) Chennai vs P Ram Mohan Rao in IT A No. 223,224,225/Chny dated 02.04.2024 6.5.17 Further the AO has relied upon the statement recorded from Shri. K.S. Ravindran wherein he has categorically stated that three partners along with one partner’s family and his family together made a deposit a sum for Rs. 2 Crores each. The relevant extract is appended here as under. 6.5.18 The undersigned upon examination of the above deposition is of the view that Shri. K.S. Ravindran has never deposed that five partners of the appellant firm has invested a sum of Rs. 10 Crores. He has only stated that three partners along with three partner’s family and his family members together made a deposit a sum for Rs. 2 Crores each. The AR, in this regard has made a detailed submission upon this issue. The relevant extract of the same is reproduced here as under. . . . . . 6.5.19 The undersigned has carefully examined the issue under consideration. The narration contained in the loose sheet do not reveal any indication to arrive at a conclusion that the appellant firm has received a deposit of Rs. 10 Crores. Further there exists no evidence to arrive at a conclusion that the appellant firm has received deposit to the tune of Rs.10 Crores in the FY 2012-13 relevant to A Y 2013-14, even though Shri. K.S. Ravindran had stated in his sworn statement that his’s family had invested Rs.2 crores in the FY 2012-13 relevant to A Y 2013- 14. When the statement of the third person is relied upon, there must a cogent and corroborative evidence to substantiate the fact that the appellant firm has actually received a deposit of Rs. 10 Crores during the Printed from counselvise.com :-11-: ITA. No:1630/Chny/2025 FY 2012-13 relevant to AY 2013-14. The AR stated that the amount of Rs. 2 Crores was offered as additional income by the family members, who are partners in the respective 55 firms of the M/s. Life Line Auto Finance group, during the relevant assessment years. This income was accepted by the AO during the assessment proceedings. Therefore, it cannot be added again in the hands of the appellant, as doing so would result in the taxation of the same income twice, which is contrary to the basic principles of taxation. 6.5.20 As evident in the assessment order passed, it can be seen that the AO has relied upon the statement of Shri. K.S. Ravindran and arrived at a erroneous conclusion that the appellant firm has actually received a deposit of Rs. 10 Crores during the FY 2012-13 relevant to AY 2013-14. In this regard the Hon’ble Chennai Tribunal in the case of ACIT v. Saveeta Institute of Medical and Technical Sciences [2012] 25 taxmann.com 138 (Chennai -Trib) has held that addition made on the basis of the sworn statement recorded u/s 132(4) of the Act cannot be sustainable and further held that the admission made u/s 132(4) by the Special Officer of the College could not even be treated as a valid piece of evidence. 6.5.21 Further the Apex Court in the case of Pullangode Rubber Produce Co Ltd v State of Kerala [1973] ITR 18 (SC) has held that an admission is an extremely important piece of evidence but it cannot be said that it is conclusive. Further the appellant has rightly relied upon the following decisions in this regard viz.. . . . 6.5.22 In view of the judicial decision(s) and the detailed discussion made supra the undersigned is of the view that the AO has erroneously presumed that the appellant firm has received a deposit of Rs.10 Crores during the FY 2012-13 relevant to the AY 2013-14. Therefore, it can be concluded that the appellant firm has not received any deposit amounting to Rs.10 Crores during the year under consideration and the addition was made purely on the basis of a defective document(s) and unsupported statement recorded from Shri. K.S. Ravindran. In this back drop the addition made in the case of the appellant for the AY 2013-14 is legally not sustainable. The undersigned is of the view that, no addition can be made in the hands of the appellant firm on the basis of such un- corroborative evidences and unsubstantiated statements recorded. Accordingly, the grounds raised by the appellant upon this issue are hereby treated as allowed. . . . . 6.6.3 The undersigned has carefully examined the submission made upon this issue. The appellant firm claims that the initiation of proceedings u/s 153C of the Act for AY 2013-14 is invalid. The search was conducted in 25.03.2021, and the period under consideration (AY 2013-14) which is beyond the six-year limit specified u/s.153C r.w.s 153A of the Act. The Appellant further contends that there is no underlying Printed from counselvise.com :-12-: ITA. No:1630/Chny/2025 asset as per Explanation 2 to section 153A of the Act, and based on this, the initiation of proceedings for AY 2013-14 is claimed to be bad in law. 6.6.4 A search u/s 132 of the Act was carried out in the case of the appellant on 25.03.2021. When the period of six years is calculated, obviously the A.Y. 2013-14 falls beyond six years. However, on the part of the AO., no satisfaction is necessary to initiate proceedings u/s.153A of the Act up to the period of six years. The AO upon arriving a satisfaction that there should exists an underlying asset as per Explanation 2 to section 153A of the Act, to initiate proceedings u/s.153C r.w.s 153A of the Act beyond a period of six years and up to the period of ten years. 6.6.5 In order to understand and appreciate the import of the appellant's contentions, it is necessary to advert to the provisions of Section 153A(1) of the Act, which are reproduced below:- [Assessment in case of search or requisition. 153 A. ((1)) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the Assessing Officer shall (a) issue notice to such person requiring him to furnish within such period, as may be relevant in the notice, the return of income in respect of each assessment year falling within six assessment years (and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years] Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years): Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years (and for the relevant assessment year or years) referred to in this (sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: Printed from counselvise.com :-13-: ITA. No:1630/Chny/2025 [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made (and for the relevant assessment year or years]) [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years, and c) the search under section 132 is initiated or requisition under section 132A is made on ar after the 1st day of April, 2017. Explanation 1.-For the purposes of this sub-section, 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 search is conducted or requisition is made Explanation 2.-For the purposes of the fourth proviso, \"asset\" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.) [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation- For the removal of doubts, it is hereby declared that- Printed from counselvise.com :-14-: ITA. No:1630/Chny/2025 (i) save as otherwise provided in this section, section 1538 and section 1530, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 6.6.6 It is clear from the above provision that, the jurisdiction to issue notice u/s 153C r.w.s 153A of the Act is automatically vested in the AO for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted, as no further conditions other than conducting of search u/s 132 of the Act in the case of the an assessee are prescribed for the issue of notice u/s 153C r.w.s 153A of the Act. On the other hand, the jurisdiction to issue notice u/s 153C of the Act for the 'relevant assessment or years', being the assessment years which fall beyond six assessment years but not later than ten assessment years from the end of the assessment years relevant to the previous year in which search is conducted, is vested with the AO only on fulfilment of certain conditions laid down in the fourth proviso to section 153A(1) of the Act, which was inserted in the Act with effect from 01.04.2017 by the Finance Act 2017. This becomes very clear when the language employed in the fourth proviso is taken into consideration. The said proviso starts with the phrase that \"no notice for assessment or reassessment shall be issued by the assessing officer for the relevant assessment years or year unless\" followed the enumeration of the specific conditions which need to fulfilled. 6.6.7 Unless the conditions laid down in clauses (a), (b) and (c) specified in the said proviso are fulfilled, the AO does not get the jurisdiction to issue notice u/s 153C r.w.s 153A of the Act for the \"relevant assessment years or years\". Since the said conditions represent the conditions precedent for assuming the jurisdiction to issue notice u/s 153C r.w.s 153A of the Act, it is necessary for the assessing officer to demonstrate that he was satisfied regarding the fulfilment of the said conditions before he can proceed with issue of notices u/s 153C r.w.s 153A of the Act. Though, the fourth proviso does not explicitly state that the assessing officer should be satisfied regarding the fulfilment of the conditions specified therein, such requirement of satisfaction of the AO is implicit by necessary implication, having regard to restriction imposed on the powers of the assessing officer to issue notice unless the conditions specified therein are satisfied. Moreover, since the satisfaction of the said conditions is a jurisdictional requirement, the same is required to be reduced in writing by the AO in order to unambiguously demonstrate that he has assumed jurisdiction correctly as per the provisions of the Act and facts of the case. 6.6.8 In this regard, it is to be observed that the satisfaction should be recorded in writing by the assessing officer with reference to books of accounts, other documents or evidences found and seized during the course of search. Notice u/s 153C r.w.s 153A of the Act for the relevant assessment year or years should be issued on concurrent fulfilment of Printed from counselvise.com :-15-: ITA. No:1630/Chny/2025 certain conditions spelt out in Fourth Proviso to Section 153A (1) of the Act. The conditions are (a) that income has escaped assessment (b) the fact of income escaping assessment is evident from the books of accounts, other documents or evidences found in the course of search which are in the possession of the officer (c) that the escaped income pertains to the relevant assessment year or years (d) that the income escaping assessment is represented by undisclosed specified asset (e) that the undisclosed specified asset was acquired with the income of the relevant assessment year or years (1) that the quantum of income escaping assessment is Rs.50 Lakhs or more in the aggregate for the relevant assessment years. 6.6.9 The AO is debarred from issuing a notice under the Fourth Proviso unless these conditions are proved to exist. Such a satisfaction cannot be a borrowed satisfaction, but should be that of the AO himself. He can take the aid of reports and other official correspondence in arriving at the conclusion that all the conditions spelt out in the fourth proviso are fulfilled in the case of the assessee. Such conclusion must be that of the assessing officer alone who is issuing the notice. Such conclusion must be reduced in writing to dispel any doubt about the existence of satisfaction of the assessing officer and should not remain within the personal knowledge of the assessing officer issuing the notice so that it is identifiable and known to all that the conditions precedent to issuing of notice u/s 153C r.w.s 153A(1) of the Act read with the Fourth Proviso existed prior to the issue of notice and that the assessing officer issuing the notice was seized of their existence. 6.6.10 The AO should satisfy himself that he is empowered under the provisions of Section 153A of the Act read with Fourth Proviso to issue a notice u/s 153A of the Act to assess or reassess the income for 'relevant assessment year or years' and for this purpose he must record in writing as to why and how in his opinion and belief the conditions enumerated in the Fourth Proviso are in existence and are satisfied. Reasons for harbouring such satisfaction must be reflected from the record of reasons made by the AO. Recording of satisfaction makes the process of issuing the notice transparent and is a vital safeguard against arbitrary issue of notice. Let us assume for a moment a scenario where the AO has issued a notice u/s 153A of the Act read with Fourth Proviso because he has in his possession books of account or other documents or evidence which reveal that the income of the searched person has escaped assessment but there are no undisclosed specified assets which confirm to condition that the income escaping assessment is represented by an undisclosed specified asset. In such a situation, the AO has no jurisdiction to issue a notice u/s 153C r.w.s 153A of the Act and a notice, if at all issued, would be void ab initio for patent lack of jurisdiction. 6.6.11 At this juncture, it is appropriate to rely upon the decision of the Hon’ble High Court of Bombay in the case of Ashok Commercial enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) wherein the Hon’ble high Court held that “A plain reading of section 153A(1)(b) shows that Commissioner having jurisdiction under the said section is empowered to assess or reassess the total income of six years Printed from counselvise.com :-16-: ITA. No:1630/Chny/2025 immediately preceding the assessment year relevant to the previous year in which the search was conducted and for the relevant assessment year or years. Explanation 1 below section 153A of the Act defines the expression relevant assessment. In order to make an assessment for assessment year 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 was conducted, the 4th proviso to section 153(A)(1) sets out certain further conditions which are required to be fulfilled before a notice can be issued for the relevant assessment years. Clause (a) of the4th proviso requires that the Assessing Officer must have in his possession books, documents or evidence which reveal that income represented in the form of an asset which has escaped assessment amounts to or is likely to amount to rupees fifty lakhs or more. Explanation 2 to section 153A(1) sets out an expanded definition of the word \"asset\" for the purposes of the 4th proviso. 6.6.12 Further, the jurisdictional tribunal in the case of M/s. KAG India Private Limited Vs. DCIT Central circle-2(1), Chennai in ITA No. ITA No.669/Chny/2023 dated 10.07.2024 by relying upon the decision of the decision of Hon’ble Guwahati High Court in the case of Goldstone Cements Ltd. (ITA No.10 of 2022 & Ors. Dated 29-09-2023) held that “it is quite clear the impugned AY fall beyond 6 years from relevant assessment year (AY 2021-22) from the end of the previous year (2020- 21) in which the search was conducted on the assessee (26-02-2021). In such a situation, the Ld. AO would be subjected to further conditions as stipulated in fourth proviso to Sec.153A(1). These conditions are (a) that certain income has escaped assessment; (b) the fact of income escaping assessment is evident from the books of accounts, other documents or evidences found in the course of search which are in the possession of the assessing officer; (c) that the escaped income pertains to the relevant assessment year or years; (d) that the income escaping assessment is represented by undisclosed specified asset; (e) that the undisclosed specified asset was acquired with the income of the relevant assessment year or years; (f) that the quantum of income escaping assessment is Rs.50 Lacs or more in the aggregate for the relevant assessment years. One of the prime condition is that income should be represented in the form of asset which has escaped assessment. As per Explanation 2, asset includes immovable property being land and building or both, share and securities, loans and advances, deposits in bank accounts. 6.6.13 In addition, the Hon’ble ITAT Guwahati Bench in the case of ACIT, Circle-2, Guwahati Vs, Fortune Vanijya Private Limited in ITA No. 21/Gau/2021 dated 10.12.2021 has observed upon the recording of satisfaction note as under. “We find that even the contents of the satisfaction note (supra) recorded by the AO prior to issuance of the notice u/s 153C dated 05-12-2019, does not reveal/point out the 'undisclosed/unaccounted asset' which escaped assessment in the relevant AY. It is to be kept in mind that the satisfaction note is to be examined on a standalone basis. Nothing can now be added to the satisfaction note, nor anything be deleted from the satisfaction note. It is for the AO to disclose and open his mind through Printed from counselvise.com :-17-: ITA. No:1630/Chny/2025 the satisfaction note as to which seized material revealed existence of undisclosed/unaccounted asset valued Rs.50 lacs or more, so as to establish the existence of jurisdictional fact for assuming valid jurisdiction in terms of the fourth proviso to Section 153A read with Section 153C of the Act for reopening the assessment for 7th-10th AY. The satisfaction note cannot now be supplemented but it is to be examined only as they were recorded by the AO prior to the issue of the notice.” and held that “It is imperative that before issuance of notice u/s 153C [for the extended period], the AO sets out his objective satisfaction from the seized material, the details of the specified/undisclosed assets in his possession qua the assessee for AY 2011-12 valued Rs. 50 lakhs or more. If this essential requirement of law is not satisfied, the AO does not get the authority of law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY. For this, we rely upon the dictum of the Privy Council in Nazir Ahmed Vs. King Emperor AIR 1936 PC 253(which has since been accepted and later followed by Hon'ble Supreme Court), that when a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. As discussed at Para 13 (supra), the language of the fourth proviso to section 153A of the Act show that issuance of notice can be resorted to by the AO only after he is in possession of the jurisdictional fact, which is found to be absent in the present case. Therefore, according to us, the AO only after having in his possession the jurisdictional fact could have assumed jurisdiction and issued notice u/s. 153C of the Act or else he could not have issued notice, as done in this case. For the reasons elaborately discussed by us in the foregoing, we thus hold that the notice u/s. 153C dated 05-12-2019 was issued by the AO for AY 2011-12 without authority of law and without satisfying the essential jurisdictional fact, and hence the issuance of notice u/s. 153C of the Act is held to be bad in law. 6.6.14 Therefore, unless the AO has material in possession to prove that the assessee has ‘assets’, which is not disclosed in the books, the income cannot be said to have escaped assessment for the purpose of section 153A. Here, the statute specifically mentioned “ Asset “ shall include a) Immovable Property being land and building or both b) Shares & Securities c) Loans and Advances d) Deposits in Bank accounts Hence, the re-opening beyond a period of six years can be made only if, where AO possess books of accounts, documents or evidence which reveals that ‘assets’ are found to be undisclosed or unaccounted as specified supra, in the regular books of account maintained by the assessee, resulting in escapement of income. Printed from counselvise.com :-18-: ITA. No:1630/Chny/2025 6.6.15 The facts of the case are squarely covered by the decision rendered by the Hon’ble Guwahati Bench of ITAT in the case of Goldstone Cements Ltd, Meghalaya in IT Nos. 126 to 131/Gau/2020 dated 10.12.2021 wherein it was held that the undisclosed asset exceeding a value of Rs.50 Lakhs unearthed at the time of search should be clearly identifiable. The Hon'ble Bench has observed in para 8.22 of its order that : \"8.22. From our discussion (supra) it is clear that, only if any of specified 'asset/s' as defined in Explanation (2) is unearthed during the course of search and the acquisition of such an asset' being unexplained or undisclosed, which is valued Rs.50 Lakhs or more, that the AO can be said to be in possession of the jurisdictional fact to initiate proceedings u/s.153A for 7th 10th AY (AY 2011-12, in the instant case).” 6.6.16 The above finding of the Hon’ble Tribunal was ratified by the Hon’ble Guwahati High Court in ITA/7/2022 on 29 September, 2023 on further appeal by the Revenue u/s 260A of the Act in the case of CIT V. Goldstone Cements Ltd wherein it has been held that “It was emphasized that an expenditure, irrespective of its character, does not fall within the definition of ‘asset’ defined in Explanation 2 to S.153A and therefore the Jurisdiction assumed by the AO is unsustainable” . 6.6.17 A jurisdictional fact is one on existence or non-existence of which depends assumption or refusal to assume jurisdiction by a court, tribunal or an authority. In 'Black's Legal Dictionary, it is explained as a fact which must exist before a court can properly assume jurisdiction of a particular case. Mistake of fact in relation to jurisdiction is an error of jurisdictional fact. No statutory authority or tribunal can assume jurisdiction in respect of subject matter which the statute does not confer on it and if by deciding erroneously the fact on which jurisdiction depends the court or tribunal exercises the jurisdiction, then the order is vitiated. 6.6.18 In 'Halsbury's Laws of England' it has been stated that where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the Tribunal has to make up its mind whether to Act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive. 6.6.19 In the case of Arun Kumar & Ors. vs. Union of India & Ors. (2006) 205 CTR (SC) 193: (2006) 286 ITR 89 (SC) it has been held:- \"A \"jurisdictional fact\" is a fact which must exist before a Court, Tribunal or an assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority. It is the fact upon which an administrative agency's power to act depends If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a Court or authority wrongly assumes the existence of such fact, the order can be questioned by a Printed from counselvise.com :-19-: ITA. No:1630/Chny/2025 writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not posses 6.6.20 The existence of a 'jurisdictional fact' is the sine qua non for the exercise of power. In its absence, the power cannot be exercised lawfully. When the jurisdictional fact is established, the AO is empowered to proceed with the case and make decisions in accordance with the provisions of law. In this context, the fulfilment of the preconditions set forth u/s 153C r.w.s 153A of the Act is considered a 'jurisdictional fact.' The AO is required to carefully examine and ascertain whether these specific conditions are satisfied before proceeding. Only after deciding on this issue, and recording a clear finding regarding the presence or absence of these conditions, can the AO issue a notice u/s 153C for the relevant assessment year. Only upon satisfying this crucial prerequisite can the AO lawfully proceed to assess the income of the assessee for the relevant year, as the presence of the jurisdictional fact is indispensable for validly initiating the assessment process u/s 153A of the Act 6.6.21 Such conclusion of satisfaction must manifest itself in writing. The AO issuing the notice must be able to justify that his action is valid because all conditions mentioned in the Fourth Proviso are fulfilled. This is all the more so because issuing of a notice for the 'relevant assessment year or years' is not a ritualistic formality; rather it sets in motion the process which can culminate into imposition of a civil liability and may even invite criminal prosecution for tax evasion on the assessee. It is the vested right of an assessee to examine whether the conditions precedent to issue of notice are satisfied or not so that he may, in a situation where according to his knowledge and belief the condition precedent to issue of notice are not satisfied, challenge the notice issued before appropriate judicial forum as regards its legal validity. This is possible only if the satisfaction is properly recorded by the assessing officer before a notice is issued under Section 153A of the Act read with Fourth Proviso and provided to the assessee to enable him to rebut the satisfaction of the assessing officer. The only way that the assessee can know that a valid notice was issued, is when the satisfaction that all conditions are fulfilled is recorded by the assessing officer before the notice is issued and a copy of the same is provided to the assessee on being demanded. 6.6.22 In view of the above discussions the undersigned is of the considered view that the AO must record his satisfaction before issuing the notice under Section 153A of the Act read with Fourth Proviso, and give a finding that the conditions prescribed in the Fourth Proviso were present, enabling him to issue the notice for the 'relevant assessment year or years'. Issue of such a notice without recording satisfaction would be arbitrary and capricious. The satisfaction recorded by the assessing officer should be given to the assessee, if demanded, allowing the assessee to raise objections, if any, and such objections should be dealt with by the AO by way of a speaking order. If such satisfaction is not recorded before issuing the notice, then the notice issued u/s 153A of the Printed from counselvise.com :-20-: ITA. No:1630/Chny/2025 Act will be void ab initio and all actions following the void notice will be a nullity.” 14. Aggrieved of the above order of the Ld.CIT(A), the Revenue is in appeal before this Tribunal. 15. The Ld.DR appearing for the Revenue vehemently relied upon the assessment order and prayed that the order passed by the Ld.CIT(A) be set aside. 16. Per contra, the Ld.AR appearing for the assessee placed reliance on the order passed by the Ld.CIT(A) and submitted that the Ld.CIT(A) has duly considered and correctly appreciated the facts and circumstances of the case and, therefore, rightly deleted the addition made by the AO. The Ld.AR, accordingly, prayed that the impugned order of the Ld. CIT(A) be upheld and the appeal filed by the Revenue be dismissed. 17. We have considered the rival submissions and perused the material available on record. The AO made an addition of Rs.10,00,00,000/- for A.Y. 2013-14 by relying primarily upon (i) a loose sheet seized from the premises of M/s. Vaasuki Enterprises and (ii) the sworn statement of Shri K.S. Ravindran recorded on 23.06.2021. The Ld.CIT(A), on detailed appreciation of the seized material and legal position, deleted the addition holding that the impugned loose sheet is a third-party document, bereft of essential particulars, and no independent corroborative evidence was brought on record by the AO to establish the alleged receipt of Rs.10.00 crores by the assessee firm during F.Y. 2012-13 relevant to A.Y. 2013-14. 18. On careful examination, we find no infirmity in the conclusions drawn by the Ld. CIT(A). The impugned loose sheet was admittedly seized from a third- party premises, neither found from the possession of the assessee nor shown to be in the handwriting of the partners of the assessee-firm. Further, the document, by itself, does not contain narration of the nature, year, flow, purpose, Printed from counselvise.com :-21-: ITA. No:1630/Chny/2025 or identity of the alleged transactions so as to fasten liability upon the assessee. Therefore, in the absence of clinching evidence linking the assessee with the entries, such loose sheet cannot be treated as reliable incriminating material against the assessee. 19. We note that the Ld.CIT(A) has correctly applied the ratio laid down by the Hon’ble Delhi High Court in CIT v. Sant Lal (2020) 118 taxmann.com 432 (Del), wherein it was held that no addition could be sustained on the basis of diary/entries seized from a third party when not in the handwriting of assessee and when Revenue failed to bring cogent material to link the assessee with such entries. Likewise, the Ld.CIT(A) has rightly placed reliance on Tribunal decisions holding that loose sheets/unsigned jottings without necessary details are “defective documents” and cannot constitute sufficient evidence unless supported by corroboration. 20. As regards the statement of Shri K.S. Ravindran, we find that the same also cannot, in the facts of the present case, be the sole basis for sustaining the addition. The Ld.CIT(A) has recorded a finding that Shri K.S. Ravindran, being an investing partner and not a managing partner, cannot be presumed to have full and precise knowledge regarding investments made by all the partners and family members across the group entities. Further, even on plain reading of the deposition, Shri Ravindran does not categorically admit that five partners of the assessee firm invested Rs.10.00 crores in the assessee firm in F.Y. 2012-13. The inference drawn by the AO that all five partners invested Rs.2.00 crores each during F.Y.2012-13 is therefore clearly not borne out by the seized material or by the statement as recorded. 21. It is well-settled that although income-tax proceedings are not governed by strict rules of evidence, the assessment cannot be framed on mere suspicion, conjectures and surmises without material or corroboration. The Hon’ble Supreme Court in Dhakeshwari Cotton Mills Ltd. v. CIT (1954) 26 ITR 775 (SC) has held that there must be something more than bare suspicion to Printed from counselvise.com :-22-: ITA. No:1630/Chny/2025 support an assessment and a “pure guess” is impermissible. The Ld. CIT(A) has also correctly considered the principle that an admission, though a relevant piece of evidence, is not conclusive and can be explained, as held by the Hon’ble Supreme Court in Pullangode Rubber Produce Co. Ltd. (1973) 91 ITR 18 (SC). 22. Further, we also take note of the finding of the Ld. CIT(A) that the Revenue has not brought any corroborative evidence to establish actual movement of funds, such as bank trail, confirmation, statements of other partners, books of the assessee showing receipt of deposits, or any independent enquiry. Importantly, neither the Authorized Officer nor the AO recorded statement of the partners of the assessee firm so as to verify the alleged deposits. Such omission goes to the root of the matter and renders the addition unsustainable. 23. The Ld.CIT(A) has also recorded that a part of the alleged amount i.e. Rs.2.00 crores was stated to have already been offered/assessed in the hands of persons concerned, and therefore taxing the same again in the assessee’s hands would result in double taxation of the same income, which is impermissible. The Revenue has not brought any material before us to dislodge this factual finding. 24. In view of the above, we concur with the detailed reasoning of the Ld.CIT(A) that the addition of Rs.10.00 crores was made solely on the basis of a defective third-party document and an unsupported statement, without any corroborative evidence of actual receipt of money by the assessee during the relevant year. Therefore, the deletion of addition by the Ld.CIT(A) calls for no interference. Accordingly, the grounds raised by the Revenue on this issue are dismissed. 25. The Revenue has also challenged the finding of the Ld.CIT(A) regarding invalid assumption of jurisdiction for A.Y. 2013-14, being beyond six assessment Printed from counselvise.com :-23-: ITA. No:1630/Chny/2025 years from the year of search. We have examined the facts and the statutory scheme. Search u/s.132 of the Act was conducted on 25.03.2021. The assessment year under appeal i.e. A.Y. 2013-14 falls beyond six years and thus could be covered only if the conditions prescribed under the fourth proviso to section 153A(1) (read with relevant provisions) are satisfied, namely that the AO must be in possession of books of account or other documents/evidence revealing that income represented in the form of an asset, which has escaped assessment, is Rs.50 lakhs or more, and such income pertains to the relevant assessment year(s). 26. The Ld.CIT(A) has undertaken elaborate analysis and held that for invoking jurisdiction beyond six years, it is necessary that the AO records satisfaction in writing demonstrating fulfillment of the jurisdictional conditions, including identification of the undisclosed “asset” as defined in Explanation 2 to section 153A(1). We find ourselves in agreement with the Ld.CIT(A). The satisfaction contemplated is not a mere formality but a jurisdictional fact, and absence thereof vitiates the proceedings. 27. We note that the Ld.CIT(A) has rightly relied upon judicial precedents including Ashok Commercial Enterprises v. ACIT (2023) 154 taxmann.com 144 (Bom) and Tribunal decisions including Fortune Vanijya Pvt. Ltd. (ITAT Gauhati) and KAG India Pvt. Ltd. (ITAT Chennai), which emphasize that the satisfaction note must clearly reveal (i) existence of undisclosed asset, (ii) nexus with escaped income of relevant AY, and (iii) satisfaction recorded as a standalone document, which cannot be supplemented later. We find that the Revenue has not demonstrated before us that the jurisdictional requirements mandated in the fourth proviso were fulfilled by the AO through a proper satisfaction note identifying the specified undisclosed asset for A.Y. 2013-14. 28. In absence of the jurisdictional fact, the AO could not have lawfully assumed jurisdiction for issuing notice and framing assessment for A.Y. 2013- 14 beyond the six-year period. Therefore, the Ld.CIT(A) was justified in holding Printed from counselvise.com :-24-: ITA. No:1630/Chny/2025 that such initiation/assumption of jurisdiction was bad in law, void ab initio, and all consequential proceedings are invalid. We uphold the said finding. Hence, the grounds of the Revenue on jurisdiction are dismissed. 29. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the court on 20th January, 2026 at Chennai. Sd/- Sd/- (जॉज\u0018 जॉज\u0018 क े) (GEORGE GEORGE K) उपा\u001aय\u001b /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद%य/ACCOUNTANT MEMBER चे\u000eनई/Chennai, 0दनांक/Dated, the 20th January, 2026 SP आदेश क, *'त2ल3प अ4े3षत/Copy to: 1. अपीलाथ)/Appellant 2. *+यथ)/Respondent 3.आयकर आयु5त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 3वभागीय *'त'न ध/DR 5. गाड\u0018 फाईल/GF Printed from counselvise.com "