BHADRESH MANSUKHLAL DODHIA HUF,BHIWANDI V. DCIT-CC-3, THANE, THANE

ITSSA 117/MUM/2025

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The case involves appeals by Bhadresh Mansukhlal Dodhia HUF against the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961, for the assessment years 2014-15, 2016-17, and 2017-18. The additions were based on unsecured loans received from M/s Jatadhari Commercial Pvt. Ltd., which were treated as unexplained cash credits. The Tribunal examined the legal and factual basis of the additions, including the absence of incriminating material during the search and the failure of the Assessing Officer to provide specific evidence linking the loans to undisclosed income. The Tribunal concluded that the assessee had adequately proved the identity, creditworthiness, and genuineness of the transactions, leading to the allowance of the appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786308 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 08-01-2025
• Other Referred Cases: Abhisar Buildwell (P) Ltd. v. CIT, Harjeev Lal Agarwal v. CIT, CIT v. Best Infrastructure (India) Pvt. Ltd., CIT v. Nova Promoters and Finlease (P.) Ltd., CIT v. N. R. Portfolio Pvt. Ltd., CIT v. Naresh Kumar Agarwal, CIT v. Shri Ramdas Motor Transport, CIT v. Precision Finance Pvt. Ltd., Shankar Industries v. CIT, Dhanlaxmi Steel Re-rolling Mills v. CIT, CIT v. Biju Patnaik, CIT v. Nipun Builders and Developers P. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATYAPRAKASH R.SINGH
• Assessee Lawyers: SIMRAN DHAWAN
• Keywords: Unexplained cash credit; Document seized; Documents seized; Principle of natural justice; Sham transactions; Search and seizure; Accommodation entries; Block assessment; Validity of assessment; Opportunity of cross examination; Bogus
• Section: 143(3); 132; 153A; 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI NARENDER KUMAR CHOUDHRY (JUDICIAL MEMBER) IT(SS)A No. 117 to 119/MUM/2025 Assessment Years: 2014-15, 2016-17 & 2017-18 Bhadresh Mansukhlal Dodhia HUF, H.No. 104 S No. 69/100, New Mavji Compound Narpoli-421302. Vs. DCIT-CC-3, Room No. 12, A Wing, 6th floor, Ashar IT Park, Thane West-400604. PAN NO. AAHHB 9814 N Appellant Respondent Assessee by : Ms. Simran Dhawan Revenue by : Mr. Satyaprakash R. Singh, CIT DR Date of Hearing : 04/09/2025 Date of pronouncement : 30/10/2025 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against a common order dated 29.11.2024 passed by the Ld. Commissioner of Income- tax (Appeals), Pune-11 [in short ‘the Ld .CIT(A)’] for assessment year 2014-15, 2016-17 and 2017-18 respectively. As common issue in dispute is involved in these appeals, therefore, same were heard together and disposed off by way of this consolidated order for the sake of convenience. Printed from counselvise.com Firstly, we take up the appeal of the assessee for assessment year 2014-15. The grounds 1. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/ by the Ld. Assessing Officer in the 143(3) r.w.s 153C of the Income Tax Act dated 12.12.2022 on account of unsecured loans received by the appellant from M/s Jatadhari Commercial Pvt. Ltd, which were treated as unexplained cash credits though the appellant had dul under section 68, by submitting all the relevant documentary evidences to prove identity and creditworthiness of the lender company and genuineness of the transactions. 2. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/ loans taken stood duly repaid in subsequent years much before the date of search which proves fact that loans taken were genuine. 3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/ loans without there being any evidence of cash paid receipt of alleged non being any evidence of cash received at the time of repayment of alleged non-genuine unsecured loans from / to M/s Jatadhari Commercial Pvt. Ltd. 4. On the facts and in the cir and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 50,00,000/ mentioned company as paper /shell/non though the company was MCA Active such loans and at the time of repayment of the loans. 5. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/ assessment for AY 2014 assessment or reassessment was pending as on the date of search that could be abated particularly in view of the fact no Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 Firstly, we take up the appeal of the assessee for assessment year 15. The grounds raised in appeal are reproduced as under: 1. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- u/s 68 of the Act made by the Ld. Assessing Officer in the assessment order passed u/s 143(3) r.w.s 153C of the Income Tax Act dated 12.12.2022 on account of unsecured loans received by the appellant from M/s Jatadhari Commercial Pvt. Ltd, which were treated as unexplained cash credits though the appellant had duly discharged its onus under section 68, by submitting all the relevant documentary evidences to prove identity and creditworthiness of the lender company and genuineness of the transactions. 2. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- ignoring the fact that the loans taken stood duly repaid in subsequent years much before the date of search which proves fact that loans taken were 3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- on account of unsecured loans without there being any evidence of cash paid at the time of receipt of alleged non-genuine unsecured loans and without there being any evidence of cash received at the time of repayment of genuine unsecured loans from / to M/s Jatadhari Commercial Pvt. Ltd. 4. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs. 50,00,000/- by holding the above mentioned company as paper /shell/non-genuine entity even though the company was MCA Active both at the time of taking of such loans and at the time of repayment of the loans. 5. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- despite the fact that the assessment for AY 2014-15 had attained finality and no assessment or reassessment was pending as on the date of search that could be abated particularly in view of the fact no Bhadresh Mansukhlal Dodhia HUF 2 IT(SS)A No. 117 to 119/MUM/2025 Firstly, we take up the appeal of the assessee for assessment year oduced as under: 1. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in u/s 68 of the Act made assessment order passed u/s 143(3) r.w.s 153C of the Income Tax Act dated 12.12.2022 on account of unsecured loans received by the appellant from M/s Jatadhari Commercial Pvt. Ltd, which were treated as unexplained y discharged its onus under section 68, by submitting all the relevant documentary evidences to prove identity and creditworthiness of the lender 2. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in ignoring the fact that the loans taken stood duly repaid in subsequent years much before the date of search which proves fact that loans taken were 3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in on account of unsecured at the time of genuine unsecured loans and without there being any evidence of cash received at the time of repayment of genuine unsecured loans from / to M/s Jatadhari cumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in by holding the above- genuine entity even both at the time of taking of 5. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in despite the fact that the 15 had attained finality and no assessment or reassessment was pending as on the date of search that could be abated particularly in view of the fact no Printed from counselvise.com incriminating material was found during the course of seizure action. 6. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order wherein the Assessing Officer has made addition solely on the basi other sources and without making any enquiries on his own. 7. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order a made even when the Ld. Assessing Officer did not follow the basic principles of natural justice by (i) supplying the appellant with materials collected at its back, (ii) supplying copies of all relevant statements of third parties, (iii) supplying copies of reports of Investigation and (iv) affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the appellant, despite specific request made by the appellant in response to sho 8. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/ unaccounted assets in the form found. 9. The appellant craves leave to add to, alter, amend, modify and/or delete all or any of the foregoing grounds 2. The brief facts, as emanating from the record, are that a search and seizure operation un Act, 1961 (hereinafter referred to as “the Act”) was conducted on 27.11.2019 in the case of the us is a Hindu Undivided Family (HUF) of Shri Bhadresh Dodhia, who is one of the key persons of the said group, but it was not covered under search action. The assessee had originally filed its Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 incriminating material was found during the course of seizure action. 6. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order wherein the Assessing Officer has made addition solely on the basis of information received from other sources and without making any enquiries on his own. 7. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order and deleting the addition made even when the Ld. Assessing Officer did not follow the basic principles of natural justice by (i) supplying the appellant with materials collected at its back, (ii) supplying copies of all relevant statements of third parties, (iii) supplying copies of reports of Investigation and (iv) affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the appellant, despite specific request made by the appellant in response to show cause notice filed by the Appellant. 8. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 50,00,000/- even though no unaccounted assets in the form of cash, jewellery or stock were 9. The appellant craves leave to add to, alter, amend, modify and/or delete all or any of the foregoing grounds of appeal. The brief facts, as emanating from the record, are that a search and seizure operation under section 132 of the Income Act, 1961 (hereinafter referred to as “the Act”) was conducted on 27.11.2019 in the case of the “Dodhia Group”. The assessee before us is a Hindu Undivided Family (HUF) of Shri Bhadresh Dodhia, who is one of the key persons of the said group, but it was not covered under search action. The assessee had originally filed its Bhadresh Mansukhlal Dodhia HUF 3 IT(SS)A No. 117 to 119/MUM/2025 incriminating material was found during the course of search & 6. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in not quashing the assessment order wherein the Assessing Officer s of information received from other sources and without making any enquiries on his own. 7. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in nd deleting the addition made even when the Ld. Assessing Officer did not follow the basic (i) supplying the appellant with materials collected at its back, (ii) supplying copies of all relevant statements of third parties, (iv) affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the appellant, despite specific request made by the appellant in 8. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in even though no of cash, jewellery or stock were 9. The appellant craves leave to add to, alter, amend, modify appeal. The brief facts, as emanating from the record, are that a der section 132 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) was conducted on . The assessee before us is a Hindu Undivided Family (HUF) of Shri Bhadresh Dodhia, who is one of the key persons of the said group, but it was not covered under search action. The assessee had originally filed its Printed from counselvise.com return of income for the assessment year 02.07.2015 declaring a total income of 2.1 During the course of the the Dodhia Group cases, the Assessing Officer (AO) noted that certain documents and materials were found and seized w his opinion, pertained to the assessee. ‘Dhodia’ group of cases and the assessee is same officer. Being satisfied that the conditions stipulated under section 153C of the Act were duly fulfilled, the AO recorded his mandated by law and accordingly issued a notice under section 153C on 08.12.2021, requiring the assessee to furnish its return of income. In response, the assessee filed the return of income on 30.10.2021 declaring the same income of originally declared in the return filed on 02.07.2015. 2.2 Subsequently, the assessment was completed under section 153C read with section 143(3) of the Act on 12.12.2022. In the said assessment, the Assessing Officer made an addition of ₹50,00,000/– treating the unsecured loan received from Jatadhari Commercial Pvt. Ltd. alleging that the said company was engaged in providing accommodation entries. Aggrieved by the said addition, the assessee preferred an Income-tax (Appeals) [CIT(A)], raising both legal and substantive grounds, including the validity of proceedings under section 153C Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 return of income for the assessment year under consideration on 02.07.2015 declaring a total income of ₹5,49,460/–. During the course of the assessment proceedings cases, the Assessing Officer (AO) noted that certain documents and materials were found and seized w his opinion, pertained to the assessee. The Assessing ‘Dhodia’ group of cases and the assessee is same officer. Being that the conditions stipulated under section 153C of the Act were duly fulfilled, the AO recorded his satisfaction note as mandated by law and accordingly issued a notice under section 153C on 08.12.2021, requiring the assessee to furnish its return of income. In response, the assessee filed the return of income on 30.10.2021 declaring the same income of ₹5,49,460/ originally declared in the return filed on 02.07.2015. Subsequently, the assessment was completed under section 153C read with section 143(3) of the Act on 12.12.2022. In the said assessment, the Assessing Officer made an addition of treating the unsecured loan received from Jatadhari Commercial Pvt. Ltd. as a non-genuine transaction, alleging that the said company was engaged in providing accommodation entries. Aggrieved by the said addition, the assessee preferred an appeal before the learned Commissioner of tax (Appeals) [CIT(A)], raising both legal and substantive grounds, including the validity of proceedings under section 153C Bhadresh Mansukhlal Dodhia HUF 4 IT(SS)A No. 117 to 119/MUM/2025 under consideration on proceedings of cases of cases, the Assessing Officer (AO) noted that certain documents and materials were found and seized which, in Assessing officer of other ‘Dhodia’ group of cases and the assessee is same officer. Being that the conditions stipulated under section 153C of the satisfaction note as mandated by law and accordingly issued a notice under section 153C on 08.12.2021, requiring the assessee to furnish its return of income. In response, the assessee filed the return of income on 5,49,460/– as was originally declared in the return filed on 02.07.2015. Subsequently, the assessment was completed under section 153C read with section 143(3) of the Act on 12.12.2022. In the said assessment, the Assessing Officer made an addition of treating the unsecured loan received from M/s genuine transaction, alleging that the said company was engaged in providing accommodation entries. Aggrieved by the said addition, the appeal before the learned Commissioner of tax (Appeals) [CIT(A)], raising both legal and substantive grounds, including the validity of proceedings under section 153C Printed from counselvise.com as well as the addition on merits. The learned CIT(A), however, dismissed the appeal, upholding both the initiation of proceedings and the addition made by the Assessing Officer. 3. The learned Counsel for the assessee filed a paper book containing pages 1 to 79. he assailed the finding of the learned CIT(A) on the legal issue that no incriminating material was found qua the addition made in assessment year in question therefore, in the absence of such material, no addition could have been made in an unabated assessment year. 3.1 We have heard the rival submissions of the parties, perused the material available on record, and considered the legal issue raised. The controversy lies in a narrow compass constitutes the perm assessment framed under section 153A of the Act. The question arises whether such additions can (i) be made only on the strength of incriminating material found during the course of search, or (ii) be made on the basis of any other material already available in the return of income or gathered in post made during assessment proceddings, or (iii) be made on the basis of items in return of income or any post search enquiry or enquiry during assessment proceedings along with addition made on the basis of incriminating material. The Hon’ble Supreme Court has now authoritatively settled this issue in Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 as well as the addition on merits. The learned CIT(A), however, eal, upholding both the initiation of proceedings and the addition made by the Assessing Officer. arned Counsel for the assessee filed a paper book 1 to 79. Adverting to Ground No. 5 of the appeal, assailed the finding of the learned CIT(A) on the legal issue that no incriminating material was found during the course of search addition made in assessment year in question therefore, in the absence of such material, no addition could have been made in an unabated assessment year. We have heard the rival submissions of the parties, perused the material available on record, and considered the legal issue raised. The controversy lies in a narrow compass — constitutes the permissible basis for making additions in an assessment framed under section 153A of the Act. The question arises whether such additions can (i) be made only on the strength of incriminating material found during the course of search, or (ii) sis of any other material already available in the return of income or gathered in post-search enquiries or enquires made during assessment proceddings, or (iii) be made on the basis of items in return of income or any post search enquiry or enquiry assessment proceedings along with addition made on the basis of incriminating material. The Hon’ble Supreme Court has now authoritatively settled this issue in Abhisar Buildwell (P) Ltd. v. Bhadresh Mansukhlal Dodhia HUF 5 IT(SS)A No. 117 to 119/MUM/2025 as well as the addition on merits. The learned CIT(A), however, eal, upholding both the initiation of proceedings arned Counsel for the assessee filed a paper book dverting to Ground No. 5 of the appeal, assailed the finding of the learned CIT(A) on the legal issue that during the course of search addition made in assessment year in question, and therefore, in the absence of such material, no addition could have We have heard the rival submissions of the parties, perused the material available on record, and considered the legal issue — namely, what issible basis for making additions in an assessment framed under section 153A of the Act. The question arises whether such additions can (i) be made only on the strength of incriminating material found during the course of search, or (ii) sis of any other material already available in the search enquiries or enquires made during assessment proceddings, or (iii) be made on the basis of items in return of income or any post search enquiry or enquiry assessment proceedings along with addition made on the basis of incriminating material. The Hon’ble Supreme Court has Abhisar Buildwell (P) Ltd. v. Printed from counselvise.com CIT (2023) … (SC). For ready reference, the relevant operative portion of the judgment is extracted hereinbelow: “14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed durin the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material assessments/unabated assessments completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requi However, the completed/unabated assessments can be re AO in exercise of powers under fulfilment of the conditions as envisaged/mentioned under 147/148 of the Act and those powers are saved. 3.2 Applying the ratio laid down in evident that for making an addition under section 153A or 153C read with 153A of the Act, two foundational conditions must coexist. Firstly, the assessment year in question must be an Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 (2023) … (SC). For ready reference, the relevant operative rtion of the judgment is extracted hereinbelow: 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under of the Act and those powers are saved.” (emphasis supplied externally) Applying the ratio laid down in Abhisar Buildwell (supra) evident that for making an addition under section 153A or 153C read with 153A of the Act, two foundational conditions must coexist. Firstly, the assessment year in question must be an Bhadresh Mansukhlal Dodhia HUF 6 IT(SS)A No. 117 to 119/MUM/2025 (2023) … (SC). For ready reference, the relevant operative 14. In view of the above and for the reasons stated above, it is i) that in case of search under Section 132 or requisition under Section assessment under ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into g the search and the other material available with the AO including the income declared in in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into in respect of completed . Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search of the Act, 1961. However, the completed/unabated assessments can be re-opened by the of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections (emphasis supplied externally) Abhisar Buildwell (supra), it is evident that for making an addition under section 153A or 153C read with 153A of the Act, two foundational conditions must coexist. Firstly, the assessment year in question must be an Printed from counselvise.com unabated assessment year proceedings were not pending as on the date of search. In cases under section 153C, the relevant date for determining pendency is the date on which the Assessing Officer of the searched person hands over the seized material to the Assessing Officer of the “oth person”; however, where the same Assessing Officer exercises jurisdiction over both, the reckoning point would be the date of recording satisfaction under section 153C. In the case satisfaction has been recorded on 18/12/2021, thus any assessment which pending on said date could only be abated. In the present case, there is no dispute between the parties that Assessment Years 2014-15, 2016-17 and 2018 3.3 The second condition requires the existence of material found during the course of search pertaining to the assessee qua the addition made in the year under consideration. Though the expression “incriminating material” is not defined under the Act, its connotation in common parlance and judicial usage well understood — it denotes any material, document, or evidence unearthed during search which prima facie exposes a falsity or incorrectness in the return of income filed by the assessee, thereby forming the basis of an addition under section 153A. Delhi High Court in Harjeev Lal Agarwal v. CIT (Del)] and CIT v. Best Infrastructure (India) Pvt. Ltd. 82 (Del)] has held that a statement recorded under section 132(4) Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 unabated assessment year, i.e., one in which the assessment eedings were not pending as on the date of search. In cases under section 153C, the relevant date for determining pendency is the date on which the Assessing Officer of the searched person hands over the seized material to the Assessing Officer of the “oth person”; however, where the same Assessing Officer exercises jurisdiction over both, the reckoning point would be the date of recording satisfaction under section 153C. In the case satisfaction has been recorded on 18/12/2021, thus any assessment which pending on said date could only be abated. In the present case, there is no dispute between the parties that Assessment Years 17 and 2018-19 are unabated assessment years. The second condition requires the existence of found during the course of search pertaining to the assessee qua the addition made in the year under consideration. Though the expression “incriminating material” is not defined under the Act, its connotation in common parlance and judicial usage it denotes any material, document, or evidence unearthed during search which prima facie exposes a falsity or incorrectness in the return of income filed by the assessee, thereby forming the basis of an addition under section 153A. Harjeev Lal Agarwal v. CIT [(2016) 290 CTR 263 CIT v. Best Infrastructure (India) Pvt. Ltd. 82 (Del)] has held that a statement recorded under section 132(4) Bhadresh Mansukhlal Dodhia HUF 7 IT(SS)A No. 117 to 119/MUM/2025 , i.e., one in which the assessment eedings were not pending as on the date of search. In cases under section 153C, the relevant date for determining pendency is the date on which the Assessing Officer of the searched person hands over the seized material to the Assessing Officer of the “other person”; however, where the same Assessing Officer exercises jurisdiction over both, the reckoning point would be the date of recording satisfaction under section 153C. In the case satisfaction has been recorded on 18/12/2021, thus any assessment which was pending on said date could only be abated. In the present case, there is no dispute between the parties that Assessment Years 19 are unabated assessment years. The second condition requires the existence of incriminating found during the course of search pertaining to the assessee qua the addition made in the year under consideration. Though the expression “incriminating material” is not defined under the Act, its connotation in common parlance and judicial usage is it denotes any material, document, or evidence unearthed during search which prima facie exposes a falsity or incorrectness in the return of income filed by the assessee, thereby forming the basis of an addition under section 153A.The Hon’ble [(2016) 290 CTR 263 [(2017) 397 ITR 82 (Del)] has held that a statement recorded under section 132(4) Printed from counselvise.com by itself cannot be regarded as incriminati observation of the Hon’ble Delhi High Court in (supra) is reproduced below for completeness: “19. In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132 (4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, under the Provisions of Chapter XIV 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words \"evidence found as a re within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material di operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation. 21. A plain reading of Section 132 (4) of the Act indicates that the authorized person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the D 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the pur connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 by itself cannot be regarded as incriminating material. The relevant observation of the Hon’ble Delhi High Court in Harjeev Lal Agarwal is reproduced below for completeness: In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132 (4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, he Provisions of Chapter XIV-B of the Act. 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words \"evidence found as a result of search\" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation. 21. A plain reading of Section 132 (4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, documents, assets, etc. Plainly, the intention of the Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being Bhadresh Mansukhlal Dodhia HUF 8 IT(SS)A No. 117 to 119/MUM/2025 ng material. The relevant Harjeev Lal Agarwal In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132 (4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, 20. In our view, a plain reading of Section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The sult of search\" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any scovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the 21. A plain reading of Section 132 (4) of the Act indicates that officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents, money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), irect Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect poses of any investigation connected with any proceeding under the Act. However, as stated earlier, a statement on oath can only be recorded of a person who is found in possession of books of accounts, Parliament is to permit such examination only where the books of accounts, documents and assets possessed by a person are relevant for the purposes of the investigation being Printed from counselvise.com undertaken. Now, if the provisions of Section 132(4) of the Act are read in the c 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidenc unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded. 22. In CIT v. Shri Ramdas M 177/102 Taxman 300 High Court, reading the provision of Section 132(4) of the Act in the context of discovering undisclosed income, explained that in cases where no unaccounted documents or incriminating material is found, the powers under Section 132(4) of the Act cannot be invoked. The relevant passage from the aforesaid judgment is quoted below: \"A plain reading of sub officer during the course of raid is empowered to examine any person if he is found to be in possession or control of any undisclosed books of account, documents, money or other valuable articles or things, elicit information from such person with regard to such account books or money which are in his possession and can record a statement to that effect. Under this provision, such statements can be used in evidence in any subsequent proceeding initiated against such per son under the Act. Thus, the questi authorised officer arises only when he found such person to be in possession of any undisclosed money or books of account. But, in this case, it is admitted by the Revenue that on the dates of search, the Department was no unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing director and other directors. In such a case, when the Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 158BB(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded. 22. In CIT v. Shri Ramdas Motor Transport [1999] 238 ITR 177/102 Taxman 300, a Division Bench of Andhra Pradesh High Court, reading the provision of Section 132(4) of the Act in the context of discovering undisclosed income, explained that where no unaccounted documents or incriminating material is found, the powers under Section 132(4) of the Act cannot be invoked. The relevant passage from the aforesaid judgment is quoted below:— \"A plain reading of sub-section (4) shows that the authorise officer during the course of raid is empowered to examine any person if he is found to be in possession or control of any undisclosed books of account, documents, money or other valuable articles or things, elicit information from such person to such account books or money which are in his possession and can record a statement to that effect. Under this provision, such statements can be used in evidence in any subsequent proceeding initiated against such per son under the Act. Thus, the question of examining any person by the authorised officer arises only when he found such person to be in possession of any undisclosed money or books of account. But, in this case, it is admitted by the Revenue that on the dates of search, the Department was not able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing rector and other directors. In such a case, when the Bhadresh Mansukhlal Dodhia HUF 9 IT(SS)A No. 117 to 119/MUM/2025 undertaken. Now, if the provisions of Section 132(4) of the Act ontext of Section 158BB(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the e/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an [1999] 238 ITR , a Division Bench of Andhra Pradesh High Court, reading the provision of Section 132(4) of the Act in the context of discovering undisclosed income, explained that where no unaccounted documents or incriminating material is found, the powers under Section 132(4) of the Act cannot be invoked. The relevant passage from the aforesaid section (4) shows that the authorised officer during the course of raid is empowered to examine any person if he is found to be in possession or control of any undisclosed books of account, documents, money or other valuable articles or things, elicit information from such person to such account books or money which are in his possession and can record a statement to that effect. Under this provision, such statements can be used in evidence in any subsequent proceeding initiated against such per son under on of examining any person by the authorised officer arises only when he found such person to be in possession of any undisclosed money or books of account. But, in this case, it is admitted by the Revenue that on the t able to find any unaccounted money, unaccounted bullion nor any other valuable articles or things, nor any unaccounted documents nor any such incriminating material either from the premises of the company or from the residential houses of the managing rector and other directors. In such a case, when the Printed from counselvise.com managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording powers under section 132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under section 132(4) of the Act, does not have any evidentiary value. This in sub-section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The finding of the Tribunal was based on the above well settled principle.\" 23. It is also necessary to mention that the aforesaid interpretation of Section 132(4) of the Act must be read with the explanation to Section 132(4) of the Act which expressly provides that the scope of examination under Section 132(4) of the Act is not limited only to the books of accounts or other assets or material found during the search. However, in the context of Section 158BB(1) of the Act which expressly restricts the computation during search, the statement recorded under Section 132(4) of the Act can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during se for making a block assessment. 24. If the Revenue's contention that the block assessment can be framed only on the basis of a statement recorded under Section 132(4) is accepted, it would result in ignoring an important check on the power of the AO and would expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circums can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing undisclosed income of an assessee. 25. In CIT v. Naresh Kumar Agarwal 171/[2015] 53 taxmann.com 306 Telangana and Andhra Pradesh High Court held that a statement recorded under Section 132(4) of t Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of search and recording any statement from them by invoking the powers under section 132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under section 132(4) of the Act, does not have any evidentiary value. This provision embedded section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The ing of the Tribunal was based on the above well settled 23. It is also necessary to mention that the aforesaid interpretation of Section 132(4) of the Act must be read with the explanation to Section 132(4) of the Act which expressly hat the scope of examination under Section 132(4) of the Act is not limited only to the books of accounts or other assets or material found during the search. However, in the context of Section 158BB(1) of the Act which expressly restricts the computation of undisclosed income to the evidence found during search, the statement recorded under Section 132(4) of the Act can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and cannot be the sole basis for making a block assessment. 24. If the Revenue's contention that the block assessment can be framed only on the basis of a statement recorded under Section 132(4) is accepted, it would result in ignoring an eck on the power of the AO and would expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circumstances which can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing d income of an assessee. 25. In CIT v. Naresh Kumar Agarwal [2014] 369 ITR 171/[2015] 53 taxmann.com 306, a Division Bench of Telangana and Andhra Pradesh High Court held that a statement recorded under Section 132(4) of the Act which is Bhadresh Mansukhlal Dodhia HUF 10 IT(SS)A No. 117 to 119/MUM/2025 managing director or any other persons were found to be not in possession of any incriminating material, the question of examining them by the authorised officer during the course of any statement from them by invoking the powers under section 132(4) of the Act, does not arise. Therefore, the statement of the managing director of the assessee, recorded patently under section 132(4) of the Act, provision embedded section (4) is obviously based on the well established rule of evidence that mere confessional statement without there being any documentary proof shall not be used in evidence against the person who made such statement. The ing of the Tribunal was based on the above well settled 23. It is also necessary to mention that the aforesaid interpretation of Section 132(4) of the Act must be read with the explanation to Section 132(4) of the Act which expressly hat the scope of examination under Section 132(4) of the Act is not limited only to the books of accounts or other assets or material found during the search. However, in the context of Section 158BB(1) of the Act which expressly restricts of undisclosed income to the evidence found during search, the statement recorded under Section 132(4) of the Act can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed arch and cannot be the sole basis 24. If the Revenue's contention that the block assessment can be framed only on the basis of a statement recorded under Section 132(4) is accepted, it would result in ignoring an eck on the power of the AO and would expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes tances which can most charitably be described as oppressive and in most such cases, are subsequently retracted. Therefore, it is necessary to ensure that such statements, which are retracted subsequently, do not form the sole basis for computing [2014] 369 ITR , a Division Bench of Telangana and Andhra Pradesh High Court held that a he Act which is Printed from counselvise.com retracted cannot constitute a basis for an order under Section 158BC of the Act. The relevant extract from the said judgement is quoted below: \"17. The circumstances under which a statement is recorded from an assessee, in the course of difficult to imagine. He is virtually put under pressure and is denied of access to external advice or opportunity to think independently. A battalion of officers, who hardly feel any limits on their power, pounce upon the asses is a hardcore criminal. The nature of steps, taken during the course of search are sometimes frightening. Locks are broken, seats of sofas are mercilessly cut and opened. Every possible item is forcibly dissected. Even the pillows are not their acts are backed by the powers of an investigating officer under section 94 of the Code of Criminal Procedure by operation of sub objective may be genuine, and the exercise may be legal. However, the freedom of a citizen that transcends, even the Constitution cannot be treated as non \"18. It is not without reason that Parliament insisted that the recording of statement must be in relation to the seized and recovered material, which is gold, etc. It is, obviously to know the source thereof, on the spot. Beyond that, it is not a limited licence, to an authority, to script the financial obituary of an assessee.\" \"19. At the cost of repetition, we observe tha made during the course of search remains the same, it can constitute the basis for proceeding further under the Act even if there is no other material. If, on the other hand, the statement is retracted, the Assessing Officer has to estab case. The statement that too, which is retracted from the assessee cannot constitute the basis for an order under section 158BC of the Act.\" 3.4 In light of the above legal pronouncements, it is necessary to examine what has been held by the l CIT(A) has dealt with this issue in paragraph 16 of the impugned order, observing as under: “16. The ground no. 4 raised by the appellant is regarding the validity of assessment in the absence of any incriminating Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 retracted cannot constitute a basis for an order under Section 158BC of the Act. The relevant extract from the said judgement is quoted below:— \"17. The circumstances under which a statement is recorded from an assessee, in the course of search and seizure, are not difficult to imagine. He is virtually put under pressure and is denied of access to external advice or opportunity to think independently. A battalion of officers, who hardly feel any limits on their power, pounce upon the assessee, as though he is a hardcore criminal. The nature of steps, taken during the course of search are sometimes frightening. Locks are broken, seats of sofas are mercilessly cut and opened. Every possible item is forcibly dissected. Even the pillows are not spared and their acts are backed by the powers of an investigating officer under section 94 of the Code of Criminal Procedure by operation of sub-section (13) of section 132 of the Act. The objective may be genuine, and the exercise may be legal. the freedom of a citizen that transcends, even the Constitution cannot be treated as non- existent.\" \"18. It is not without reason that Parliament insisted that the recording of statement must be in relation to the seized and recovered material, which is in the form of documents, cash, gold, etc. It is, obviously to know the source thereof, on the spot. Beyond that, it is not a limited licence, to an authority, to script the financial obituary of an assessee.\" \"19. At the cost of repetition, we observe that if the statement made during the course of search remains the same, it can constitute the basis for proceeding further under the Act even if there is no other material. If, on the other hand, the statement is retracted, the Assessing Officer has to establish his own case. The statement that too, which is retracted from the assessee cannot constitute the basis for an order under section 158BC of the Act.\" In light of the above legal pronouncements, it is necessary to examine what has been held by the learned CIT(A). The learned CIT(A) has dealt with this issue in paragraph 16 of the impugned order, observing as under: 16. The ground no. 4 raised by the appellant is regarding the validity of assessment in the absence of any incriminating Bhadresh Mansukhlal Dodhia HUF 11 IT(SS)A No. 117 to 119/MUM/2025 retracted cannot constitute a basis for an order under Section 158BC of the Act. The relevant extract from the said judgement \"17. The circumstances under which a statement is recorded search and seizure, are not difficult to imagine. He is virtually put under pressure and is denied of access to external advice or opportunity to think independently. A battalion of officers, who hardly feel any see, as though he is a hardcore criminal. The nature of steps, taken during the course of search are sometimes frightening. Locks are broken, seats of sofas are mercilessly cut and opened. Every possible spared and their acts are backed by the powers of an investigating officer under section 94 of the Code of Criminal Procedure by section (13) of section 132 of the Act. The objective may be genuine, and the exercise may be legal. the freedom of a citizen that transcends, even the \"18. It is not without reason that Parliament insisted that the recording of statement must be in relation to the seized and in the form of documents, cash, gold, etc. It is, obviously to know the source thereof, on the spot. Beyond that, it is not a limited licence, to an authority, to t if the statement made during the course of search remains the same, it can constitute the basis for proceeding further under the Act even if there is no other material. If, on the other hand, the statement lish his own case. The statement that too, which is retracted from the assessee cannot constitute the basis for an order under In light of the above legal pronouncements, it is necessary to earned CIT(A). The learned CIT(A) has dealt with this issue in paragraph 16 of the impugned 16. The ground no. 4 raised by the appellant is regarding the validity of assessment in the absence of any incriminating Printed from counselvise.com material. This adjudicating the ground no. 1 wherein it has been held that incriminating material for the year under consideration was found during the search operation and the addition of Rs.50,00,000/ made by the AO is based on material/evidences gathered during the search. Considering the discussion made while adjudicating the ground no. 1, the present ground of the appellant 3.5 Since the learned CIT(A) has referred to the discussion made while adjudicating Ground No. 1, the same is extracted below for ready reference: “7. The ground no. 1 raised by the appellant is regarding the validity of assessment order passed u/s. 143(3) r.w.s. 153C of the Act. In this regard, the appellant has filed a w submission on 18.10.2024. Various contentions raised by the appellant in this regard are summarized as under: i.- As per the provisions of section 153C of the Act, the AO should satisfy himself that money, builion, jewellery, or other valuable artic seized should belong to a person other than the searched person. ii. There should be seizure of some incriminating material which belongs to the person other than the searched person. iii. The AO should draw a satisfaction should be recorded by the AO before the issuance of notice u/s. 153C of the Act. In the present case, the AO has failed to issue any such satisfaction note which is mandatory in nature. iv. In the absence o by section 153C of the Act, the assessment order passed u/s. 143(3) r.w.s. 153C is without jurisdiction and should be quashed. In this regard, the appellant has relied on the Board's Circular No. 24 of 2015 date laws as mentioned in the written submission. Findings 8. I have considered the facts of the case and the submissions made by the appellant. In this connection, since the appellant Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 material. This issue has been discussed in detail while adjudicating the ground no. 1 wherein it has been held that incriminating material for the year under consideration was found during the search operation and the addition of Rs.50,00,000/ made by the AO is based on such incriminating material/evidences gathered during the search. Considering the discussion made while adjudicating the ground no. 1, the present ground of the appellant is DISMISSED.” Since the learned CIT(A) has referred to the discussion made e adjudicating Ground No. 1, the same is extracted below for 7. The ground no. 1 raised by the appellant is regarding the validity of assessment order passed u/s. 143(3) r.w.s. 153C of the Act. In this regard, the appellant has filed a w submission on 18.10.2024. Various contentions raised by the appellant in this regard are summarized as under: As per the provisions of section 153C of the Act, the AO should satisfy himself that money, builion, jewellery, or other valuable article or thing or books of accounts or documents seized should belong to a person other than the searched ii. There should be seizure of some incriminating material which belongs to the person other than the searched person. iii. The AO should draw a satisfaction in this regard and such satisfaction should be recorded by the AO before the issuance of notice u/s. 153C of the Act. In the present case, the AO has failed to issue any such satisfaction note which is mandatory in iv. In the absence of recording of satisfaction note as mandated by section 153C of the Act, the assessment order passed u/s. 143(3) r.w.s. 153C is without jurisdiction and should be quashed. In this regard, the appellant has relied on the Board's Circular No. 24 of 2015 dated 31.12.2015 and various case laws as mentioned in the written submission. 8. I have considered the facts of the case and the submissions made by the appellant. In this connection, since the appellant Bhadresh Mansukhlal Dodhia HUF 12 IT(SS)A No. 117 to 119/MUM/2025 issue has been discussed in detail while adjudicating the ground no. 1 wherein it has been held that incriminating material for the year under consideration was found during the search operation and the addition of Rs.50,00,000/- such incriminating material/evidences gathered during the search. Considering the discussion made while adjudicating the ground no. 1, the present Since the learned CIT(A) has referred to the discussion made e adjudicating Ground No. 1, the same is extracted below for 7. The ground no. 1 raised by the appellant is regarding the validity of assessment order passed u/s. 143(3) r.w.s. 153C of the Act. In this regard, the appellant has filed a written submission on 18.10.2024. Various contentions raised by the As per the provisions of section 153C of the Act, the AO should satisfy himself that money, builion, jewellery, or other le or thing or books of accounts or documents seized should belong to a person other than the searched ii. There should be seizure of some incriminating material which satisfaction in this regard and such satisfaction should be recorded by the AO before the issuance of notice u/s. 153C of the Act. In the present case, the AO has failed to issue any such satisfaction note which is mandatory in f recording of satisfaction note as mandated by section 153C of the Act, the assessment order passed u/s. 143(3) r.w.s. 153C is without jurisdiction and should be quashed. In this regard, the appellant has relied on the Board's d 31.12.2015 and various case 8. I have considered the facts of the case and the submissions made by the appellant. In this connection, since the appellant Printed from counselvise.com raised doubts about the recording of satisfact before issuing notice u/s. 153C of the Act, the AC was requested to forward the copy of satisfaction note recorded by him. The AO vide e copy of the satisfaction note which is scanned Proforma for recording satisfaction under section 153C (To be filled by the Assessing Officer of the person referred to in 1. Name of the group searched 2. Name and PAN of the person referred to in 3. Date ofinitiation of search in the case of the person referred to in Section 153A 4. Name, address and PAN of the person in whose case action under section 153C is proposed 5. Specific details of the on ine basis of which action under i section 153C is propose: (a) Nature of the seized material (money/ bullion/ jewellery / other valuable article or thing/ books of account/ document (b) Description of the seized material Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 raised doubts about the recording of satisfaction note by the AO before issuing notice u/s. 153C of the Act, the AC was requested to forward the copy of satisfaction note recorded by him. The AO vide e-mail dated 22.10.2024 has forwarded a copy of the satisfaction note which is scanned as under: rma for recording satisfaction under section 153C of the income-tax Act, 1961 (To be filled by the Assessing Officer of the person referred to in section 153A) Name of the group searched Dodhia Group Name and PAN of the person referred to in section 153A M/s Dodhia Synthetic: P. Lad (AЛACD9R?)) M/s Dodhin Filaments Pt. LId. JAAACDORDIMI M/s Bodia Chem Tex Pot Lad (AAICS05S0K) M/s A (AA.1FA0696F) M/s Vasupujya Filaments (AACFV5341P] Stars Diwgesh K. Dhaman: (A18P120515I) te ofinitiation of search in the case of the person referred to in Section 153A 27.11.2019 Name, address and PAN of the person in whose case action under section 153C is proposed Bhadresh Mansukhial Dodia (HUF) (AAHH89814N) Specific details of the scized material on ine basis of which action under i section 153C is propose: (a) Nature of the seized material (money/ bullion/ jewellery / other valuable article or thing/ books of account/ document Documents (b) Description of the seized material Party No. 1B premises situated 1001,Filix Tower, Opp. Asian Paints, LBS Marg Sonapur, Bhandup (W), Mumbai of Dodhin Group. Bundle No. 9 58,59to 60 and ol 1o 65 are ledger copy of Vinam Fianance Pvt. Ltd. .Manyuta Bhadresh Mansukhlal Dodhia HUF 13 IT(SS)A No. 117 to 119/MUM/2025 ion note by the AO before issuing notice u/s. 153C of the Act, the AC was requested to forward the copy of satisfaction note recorded by mail dated 22.10.2024 has forwarded a under: rma for recording satisfaction under section 153C (To be filled by the Assessing Officer of the person referred to in Dodhia Group M/s Dodhia Synthetic: P. Lad (AЛACD9R?)) M/s Dodhin Filaments Pt. LId. JAAACDORDIMI M/s Bodia Chem Tex Pot Lad (AAICS05S0K) M/s A-one Sizing Works (AA.1FA0696F) M/s Vasupujya Filaments (AACFV5341P] Stars Diwgesh K. Dhaman: (A18P120515I) 27.11.2019 Bhadresh Mansukhial Dodia (AAHH89814N) Documents Party No. 1B-3, office premises situated 1001,Filix Tower, Opp. Asian Paints, LBS Sonapur, Bhandup (W), Mumbai of Dodhin Group. Bundle No. 9, Page no. 54 to 58,59to 60 and ol 1o 65 are ledger copy of Vinam Fianance Pvt. Ltd. .Manyuta Printed from counselvise.com (c) Address of premise/ place from where such material was scized (d) Date of seizure of (e) Particulars of the Panchanama 6. Relatonship of the person referred in Th Sr. No. 4 with the person referred to in Sr. No.2 7. Satisfaction of the person referred to in section As 153A that the seized material referred to in S. No.5 pertains to the person referred to in Serial No. 4 8. Assessment Years involved SATISFACTION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 IN THE CASE OF BHADRESH MANSUKHLAL DODHIA (HUF) FOR A.Y. 2014 21 A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 27.11.20:9 in the case of Dodhia group and its individual concern. During search case proceeding various incrimination documents were found and serzed Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 Merchants Pvt. Lt Jatadhari Commercial Pvt. Ltd. in the books of the assessee. Party_No. MN premises of shri Divyesh Ramchandin Dhaman Loose paper bundle No. 3, Page no. 35 to 3S, in these pages, various individual and entities have taken unsecured loan and she application money like equity/ preference share from Kolkata based company. (c) Address of premise/ place from where such material was scized 1. Residence premises of Shri Divyesh Ranchandra Dhanani at 203/204, A Wing, 1i No. 1346, Akshay Park, Kumatghar, Bhiwandi 2. Office premises situated at 1001, Filix Tower, Opp. Asia Paints, lIS Marg, Sonapur, Bhandup (W). Mumbai (d) Date of seizure of such material 27.11.2019 (Party MN 29.11.2019 (Party AB (e) Particulars of the Panchanama Vide Panchnama dated 28 11.2019 (Party MN S, Vide Panchnama dated 30 11.2019 (Party AB3 Relatonship of the person referred in Th Sr. No. 4 with the person referred to in Sr. No.2 The assessee is family person of Dochia group family members. Satisfaction of the Assessing Officer of the person referred to in section As 153A that the seized material referred to in S. No.5 pertains to the person referred to in Serial No. 4 As per Assessment Years involved A.Y. 2014 ION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 IN THE CASE OF BHADRESH MANSUKHLAL DODHIA (HUF) FOR A.Y. 2014-15 TO 2020 A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 27.11.20:9 in the case of Dodhia group individual concern. During search case proceeding various incrimination documents were found and serzed Bhadresh Mansukhlal Dodhia HUF 14 IT(SS)A No. 117 to 119/MUM/2025 Merchants Pvt. Ltd. and Jatadhari Commercial Pvt. Ltd. in the books of the assessee. Party_No. MN-5, residence premises of shri Divyesh Ramchandin Dhaman Loose paper bundle No. 3, Page no. 35 to 3S, in these pages, various individual and entities have taken unsecured loan and she application money like equity/ preference share from Kolkata based company. 1. Residence premises of Shri Divyesh Ranchandra Dhanani at 203/204, A Wing, 1i No. 1346, Akshay Park, Kumatghar, Bhiwandi 2. Office premises situated at 1001, Filix Tower, Opp. Asia Paints, lIS Marg, Sonapur, Bhandup (W). Mumbai 27.11.2019 (Party MN-5) 29.11.2019 (Party AB-3) anchnama dated 28 11.2019 (Party MN S, Vide Panchnama dated 30 11.2019 (Party AB3 The assessee is family person of Dochia group family members. annexure A.Y. 2014-15 to A.Y. 2020-21 ION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 IN THE CASE OF BHADRESH 15 TO 2020- A search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 27.11.20:9 in the case of Dodhia group individual concern. During search case proceeding various incrimination documents were found and serzed Printed from counselvise.com During the search proceedings at the residence premises of Shn Divyesh Rameshchandra Wing. KNo. 1346, Akshay Park, Kama office premises situated at 1001, Filix Tower. Opp. Asian Paints, LBS Marg, Sonapur, Bhandup (W) incriminating documents related to Bhadresh Mansukhlal Dodhia (HUF) were found and seized As per Party No. MN Loose paper bundle No. 3, Page no. 35 to 38, on perusal of these pages, it is observed that the various individual and entities have taken unsecured loan and share application money like equity/preference share from Kolkata based company in which the assessee has t Jatadhari Commercial Put. Ltd. of Rs. 50,00,000/ interest @ 7.5% per annum to the said party during the F.Y. 2013-14 i.e. AY. 2014 Investigation wing it is observed that the above said company is a shell company and provides accommodation entry to various entities and individuals. As per party no. AB Loose paper bundle no. 9, Page no. 54 to 58,59 to 60 and 61 to 65, all papers are related to the assessee. ledger copy of Vinam Finance Private Limited from 01/04/2015 to 28/11/2019, Manyata Merchants Private Limited from 01/04/2016 to 31/03/2019 and Jatadhar Commercial Private Limited from 01/04/2013 to 31/03/2019 in the books of the assesse assessee has taken loan from Vinam Finance Private Limited of Rs. 50,00,000/ Limited of Rs. 25,00,000/ Commerci Private Limited of Rs. 50,00,000/ As per information received from Investigation wing, it is observed that Vinam Finance Private Limited, Manyata Merchants Private Limited and Jatadhari Commercial Private Limited are a paper/sheil company and provides accommodation entries to various benefic above said companies, Vinam Finance Put. Lid. has managed and controlled by Dodhia group. In view of the above, I am satisfied that the information contained in th accounts of Dodhia group of compani Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 During the search proceedings at the residence premises of Shn Divyesh Rameshchandra Dhanani, situated at 203/204, 4 Wing. KNo. 1346, Akshay Park, Kamatghar, Bhiwandi, and office premises situated at 1001, Filix Tower. Opp. Asian Paints, LBS Marg, Sonapur, Bhandup (W) Mumbai, various incriminating documents related to Bhadresh Mansukhlal Dodhia (HUF) were found and seized As per Party No. MN-5 er bundle No. 3, Page no. 35 to 38, on perusal of these pages, it is observed that the various individual and entities have taken unsecured loan and share application money like equity/preference share from Kolkata based company in which the assessee has taken unsecured loan from Jatadhari Commercial Put. Ltd. of Rs. 50,00,000/- interest @ 7.5% per annum to the said party during the F.Y. 14 i.e. AY. 2014-15. As per information received from Investigation wing it is observed that the above said company is a shell company and provides accommodation entry to various entities and individuals. As per party no. AB-3 Loose paper bundle no. 9, Page no. 54 to 58,59 to 60 and 61 to 65, all papers are related to the assessee. The said pages are ledger copy of Vinam Finance Private Limited from 01/04/2015 to 28/11/2019, Manyata Merchants Private Limited from 01/04/2016 to 31/03/2019 and Jatadhar Commercial Private Limited from 01/04/2013 to 31/03/2019 in the books of the assessee, in which the assessee has taken loan from Vinam Finance Private Limited of Rs. 50,00,000/- in F.Y. 2015-16 Manyata Merchants Private Limited of Rs. 25,00,000/- In F.Y. 2016-17 and Jatadhari Commerci Private Limited of Rs. 50,00,000/- in F.Y. 2013 per information received from Investigation wing, it is observed that Vinam Finance Private Limited, Manyata Merchants Private Limited and Jatadhari Commercial Private Limited are a paper/sheil company and provides accommodation entries to various beneficiaries. above said companies, Vinam Finance Put. Lid. has managed and controlled by Dodhia group. In view of the above, I am satisfied that the information contained in the aforementioned seized documents/books of accounts of Dodhia group of companies and its Bhadresh Mansukhlal Dodhia HUF 15 IT(SS)A No. 117 to 119/MUM/2025 During the search proceedings at the residence premises of Shn Dhanani, situated at 203/204, 4 tghar, Bhiwandi, and office premises situated at 1001, Filix Tower. Opp. Asian Paints, Mumbai, various incriminating documents related to Bhadresh Mansukhlal er bundle No. 3, Page no. 35 to 38, on perusal of these pages, it is observed that the various individual and entities have taken unsecured loan and share application money like equity/preference share from Kolkata based aken unsecured loan from and paid interest @ 7.5% per annum to the said party during the F.Y. As per information received from Investigation wing it is observed that the above said company is a shell company and provides accommodation entry to various entities and individuals. Loose paper bundle no. 9, Page no. 54 to 58,59 to 60 and 61 to The said pages are ledger copy of Vinam Finance Private Limited from 01/04/2015 to 28/11/2019, Manyata Merchants Private Limited from 01/04/2016 to 31/03/2019 and Jatadhar Commercial Private Limited from 01/04/2013 to in which the assessee has taken loan from Vinam Finance Private Limited of 16 Manyata Merchants Private 17 and Jatadhari in F.Y. 2013-14. per information received from Investigation wing, it is observed that Vinam Finance Private Limited, Manyata Merchants Private Limited and Jatadhari Commercial Private Limited are a paper/sheil company and provides iaries. In the above said companies, Vinam Finance Put. Lid. has managed In view of the above, I am satisfied that the information mentioned seized documents/books of Printed from counselvise.com Individual concern, which is covered u/s 132 of the Income Tax Act, 1961, refers (HUF ic. other than the person refer to in section 1534 of the Act, within the meaning of the provisions of section 153 income Tax Act, 1961 and has a bearing on the determination of the total income of the assessee se Bhadresh Mansukhlal Dodhia (HUF- Thus, it is a fit case for issue of notices u/s 153C of the Income Tax Act, 1961 for AY 2014 u/s 143(2)/142(1) of the Act for A.Y. 2020 Accordingly proceedings u/s 153C of the Act are proposed to initiated in the case Bhadresh Mansukhlal Dodhia (HUP) AAHHB9814N) Thus, the satisfaction u/ recorded by the 9.1 Before dealing with various contentions raised by the appellant, it is important to mention that during the search operation, various documents were found and seized suggesting that the unsecured loans/share application money from various Kolkata based companies. These documents were confronted with Shri Bhadresh Mansukhlal Dodhia (a key person of Dodhia Group, in the statement recorded u/s. 132(4 1001, Filix Towers, Opp. Asian Paints, Sonapur, Bhandup (West). Question no. 47 to question no. 73 of this statement recorded u/s. 132(4) of the Act relate to these unsecured loans/share application money received from various based companies. When confronted, initially Shri Bhadresh Dodhia stated that he has no idea about 22 companies (as mentioned in question no. 48) from whom these unsecured loans/share application money was received in various entities of Dodhia Gro Kolkata based entry operators and dummy directors in shell companies as available at that time were confronted with Shri Bhadresh Mansukhlal Dodhia and he stated that he has no comments to offer in this regard. 9.2 Subsequently, page no. 36 to 38 of bundle no. 3 as found and seized at the residence of Shri Divyesh Dhanani wherein details of return of interest paid on certain loans taken from various companies, were mentioned. These documents were specifically conf in question no. 60 of this statement of Shri Bhadresh Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 concern, which is covered u/s 132 of the Income Tax refers to the assessee, Bhadresh Mansukhial Dodhia (HUF ic. other than the person refer to in section 1534 of the Act, within the meaning of the provisions of section 153 income Tax Act, 1961 and has a bearing on the determination of the total income of the assessee se Bhadresh Mansukhlal -PAN -AAHHB9814NJ. Thus, it is a fit case for issue of notices u/s 153C of the Income Tax Act, 1961 for AY 2014-15 10 AY. 2019-20, as well as notice u/s 143(2)/142(1) of the Act for A.Y. 2020-21 as applicable: Accordingly proceedings u/s 153C of the Act are proposed to initiated in the case Bhadresh Mansukhlal Dodhia (HUP) AAHHB9814N)” Thus, the satisfaction u/s 153C of the Act has been duly recorded by the Assessing Officer. Before dealing with various contentions raised by the appellant, it is important to mention that during the search operation, various documents were found and seized suggesting that the group entities of Dodhia Group had taken unsecured loans/share application money from various Kolkata based companies. These documents were confronted with Shri Bhadresh Mansukhlal Dodhia (a key person of Dodhia Group, in the statement recorded u/s. 132(4) of the Act on 29.11.2019 at 1001, Filix Towers, Opp. Asian Paints, Sonapur, Bhandup (West). Question no. 47 to question no. 73 of this statement recorded u/s. 132(4) of the Act relate to these unsecured loans/share application money received from various based companies. When confronted, initially Shri Bhadresh Dodhia stated that he has no idea about 22 companies (as mentioned in question no. 48) from whom these unsecured loans/share application money was received in various entities of Dodhia Group. Subsequently, the statements of various Kolkata based entry operators and dummy directors in shell companies as available at that time were confronted with Shri Bhadresh Mansukhlal Dodhia and he stated that he has no comments to offer in this regard. Subsequently, page no. 36 to 38 of bundle no. 3 as found and seized at the residence of Shri Divyesh Dhanani wherein details of return of interest paid on certain loans taken from various companies, were These documents were specifically conf in question no. 60 of this statement of Shri Bhadresh Bhadresh Mansukhlal Dodhia HUF 16 IT(SS)A No. 117 to 119/MUM/2025 concern, which is covered u/s 132 of the Income Tax Bhadresh Mansukhial Dodhia (HUF ic. other than the person refer to in section 1534 of the Act, within the meaning of the provisions of section 153C of the income Tax Act, 1961 and has a bearing on the determination of the total income of the assessee se Bhadresh Mansukhlal Thus, it is a fit case for issue of notices u/s 153C of the Income 20, as well as notice 21 as applicable: Accordingly proceedings u/s 153C of the Act are proposed to be initiated in the case Bhadresh Mansukhlal Dodhia (HUP)-(PAN - s 153C of the Act has been duly Before dealing with various contentions raised by the appellant, it is important to mention that during the search operation, various documents were found and seized group entities of Dodhia Group had taken unsecured loans/share application money from various Kolkata based companies. These documents were confronted with Shri Bhadresh Mansukhlal Dodhia (a key person of Dodhia Group, in ) of the Act on 29.11.2019 at 1001, Filix Towers, Opp. Asian Paints, Sonapur, Bhandup (West). Question no. 47 to question no. 73 of this statement recorded u/s. 132(4) of the Act relate to these unsecured loans/share application money received from various Kolkata based companies. When confronted, initially Shri Bhadresh Dodhia stated that he has no idea about 22 companies (as mentioned in question no. 48) from whom these unsecured loans/share application money was received in various entities Subsequently, the statements of various Kolkata based entry operators and dummy directors in shell companies as available at that time were confronted with Shri Bhadresh Mansukhlal Dodhia and he stated that he has no Subsequently, page no. 36 to 38 of bundle no. 3 as found and seized at the residence of Shri Divyesh Dhanani wherein details of return of interest paid on certain loans taken from various companies, were These documents were specifically confronted in question no. 60 of this statement of Shri Bhadresh Printed from counselvise.com Dodhia and in response to same, he stated that he is not able to explain the column 'return' as of now. 9.3 Thereafter, Shri Bhadresh Dodhia was confronted with other statements of accommodation to question no. 70, Shri Bhadresh Dodhia accepted that Dodhia Group was having cash available from various sources which was routed to books of accounts of various entities, through M/s. Vinam Finance Pvt. Ltd. In reply to ques Bhadresh Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. 9.4 It is further seen that the during the investigation, the DDIT (Inv.), Thane got enquiries conducted at Kolkata by iss of the Act to Investigation Wing at Kolkata and on enquiry it was found that many of companies from whom unsecured loans/share application money were taken by various group entities of Dodhia Group, were not existing at the given addresses. 10.1 The appellant has contended that the primary requirement of assuming jurisdiction u/s. 153C of the Act is that there should be seizure of some money, bullion, jewellery, or other valuable article or thing or books of accounts or docume belonging to the person other than the searched person. In this connection, it is seen that as per the amended provisions of section 153C of the Act w.e.f. 01.06.2015, the proceedings u/s. 153C of the Act can also be initiated where the AO is satisfied that any information contained in any books of accounts or documents seized relates to a person other than the searched person. Thus, the contention of the appellant that for invoking the provisions of section 153C, it is mandatory that the seized document or books of account must belong to the third person, is not correct. 10.2 The satisfaction note recorded by the AO as reproduced above clearly suggests that containing information regarding loan of Rs.50,00,000/ from M/s. Jatadhar under consideration were found and seized unsecured loans raised from other shell entities including M/s Vinam Finance Private Limited, in other assessment years were also found and seized. important to note that statement recorded u/s. 132(4) of the Act had admitted that the Dodhia Group routed unaccounted cash amount Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 Dodhia and in response to same, he stated that he is not able to explain the column 'return' as of now. 9.3 Thereafter, Shri Bhadresh Dodhia was confronted with other statements of accommodation entry operators and in reply to question no. 70, Shri Bhadresh Dodhia accepted that Dodhia Group was having cash available from various sources which was routed to books of accounts of various entities, through M/s. Vinam Finance Pvt. Ltd. In reply to question no. 72, Shri Bhadresh Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. 9.4 It is further seen that the during the post search investigation, the DDIT (Inv.), Thane got enquiries conducted at Kolkata by issuing commission u/s. 131(1)(d) of the Act to Investigation Wing at Kolkata and on enquiry it was found that many of companies from whom unsecured loans/share application money were taken by various group entities of Dodhia Group, were not existing iven addresses. 10.1 The appellant has contended that the primary requirement of assuming jurisdiction u/s. 153C of the Act is that there should be seizure of some money, bullion, jewellery, or other valuable article or thing or books of accounts or docume belonging to the person other than the searched person. In this connection, it is seen that as per the amended provisions of section 153C of the Act w.e.f. 01.06.2015, the proceedings u/s. 153C of the Act can also be initiated where the AO is satisfied that any information contained in any books of accounts or documents seized relates to a person other than the searched person. Thus, the contention of the appellant that for invoking the provisions of section 153C, it is mandatory that the seized t or books of account must belong to the third person, 10.2 The satisfaction note recorded by the AO as reproduced above clearly suggests that incriminating document containing information regarding loan of Rs.50,00,000/ from M/s. Jatadhari Commercial Pvt. Ltd. during the year under consideration were found and seized. Further, unsecured loans raised from other shell entities including M/s Vinam Finance Private Limited, in other assessment years were also found and seized. nt to note that Shri Bhadresh Dodhia in his statement recorded u/s. 132(4) of the Act had admitted that the Dodhia Group routed unaccounted cash amount Bhadresh Mansukhlal Dodhia HUF 17 IT(SS)A No. 117 to 119/MUM/2025 Dodhia and in response to same, he stated that he is not 9.3 Thereafter, Shri Bhadresh Dodhia was confronted with entry operators and in reply to question no. 70, Shri Bhadresh Dodhia accepted that Dodhia Group was having cash available from various sources which was routed to books of accounts of various entities, through tion no. 72, Shri Bhadresh Dodhia accepted that amount of Rs.43 crores post search investigation, the DDIT (Inv.), Thane got enquiries uing commission u/s. 131(1)(d) of the Act to Investigation Wing at Kolkata and on enquiry it was found that many of companies from whom unsecured loans/share application money were taken by various group entities of Dodhia Group, were not existing 10.1 The appellant has contended that the primary requirement of assuming jurisdiction u/s. 153C of the Act is that there should be seizure of some money, bullion, jewellery, or other valuable article or thing or books of accounts or documents belonging to the person other than the searched person. In this connection, it is seen that as per the amended provisions of section 153C of the Act w.e.f. 01.06.2015, the proceedings u/s. 153C of the Act can also be initiated where the AO is satisfied that any information contained in any books of accounts or documents seized relates to a person other than the searched person. Thus, the contention of the appellant that for invoking the provisions of section 153C, it is mandatory that the seized t or books of account must belong to the third person, 10.2 The satisfaction note recorded by the AO as reproduced incriminating document containing information regarding loan of Rs.50,00,000/- i Commercial Pvt. Ltd. during the year . Further, the unsecured loans raised from other shell entities including M/s Vinam Finance Private Limited, in other assessment years were also found and seized. It is Shri Bhadresh Dodhia in his statement recorded u/s. 132(4) of the Act had admitted that the Dodhia Group routed unaccounted cash amount Printed from counselvise.com of Rs.43 crores Group through M/s. Vinam Finance Pvt. Ltd. fro the appellant has taken unsecured loans during AY 2016 17. 10.3 Although it is not mentioned in the satisfaction note of the AO, however it is seen that page no. 36 to 38 of bundle no. 3 found and seized at the residence of Shri Divyesh Dhanani cont loans taken from various companies. These documents were specifically confronted in question no. 60 of statement u/s. 132(4) of Shri Bhadresh Dodhia and in response to same, he stated that he is not able to now. It is seen from these documents that the name of company M/s. Jatadhari Commercial Pvt. Ltd. against the name of appellant HUF is appearing at page 37 and 38 indicating that the interest paid through cheque by the appellant was received back after deducting commission 11. The above discussion clearly suggests that during the search operation, various documents containing information relating to appellant were seized. Further, incriminating evidences as mentioned in t during the search. Further, incriminating material in the form of statement u/s. 132(4) of the Act of Shri Bhadresh Dodhia was also collected during the search. These documents and the statement of Shri Bhadresh Dodhia appellant received accommodation entries in the form of bogus unsecured loans. Therefore, it is a case where incriminating material was found and seized during the search. 12. Further, it is a well settled legal position that where seized material prima facie suggests that it consists of some element of undisclosed income, proceedings u/s 153C can be initiated after recording satisfaction note. In this regard, reliance is placed on: i. Hon'ble Gujarat High Court in the case of R Vaswani vs ACIT [2016] 76 taxmann.com 311 (Gujarat) held as under: Where Assessing Officer of search person recorded that document found during search was copy of a ledger of books of account of assessee company which evidenced certain cheq payments as well as cash payments to a company by assessee, there was prima facie material to suggest that satisfaction as Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 crores to various entities/individuals of Dodhia Group through M/s. Vinam Finance Pvt. Ltd. fro the appellant has taken unsecured loans during AY 2016 Although it is not mentioned in the satisfaction note however it is seen that page no. 36 to 38 of bundle no. 3 found and seized at the residence of Shri Divyesh Dhanani contain details of return of interest paid on certain loans taken from various companies. These documents were specifically confronted in question no. 60 of statement u/s. 132(4) of Shri Bhadresh Dodhia and in response to same, he stated that he is not able to explain the column 'return' as of It is seen from these documents that the name of company M/s. Jatadhari Commercial Pvt. Ltd. against the name of appellant HUF is appearing at page 37 and 38 indicating that the interest paid through cheque by the pellant was received back after deducting commission 11. The above discussion clearly suggests that during the search operation, various documents containing information relating to appellant were seized. Further, incriminating evidences as mentioned in the satisfaction note were also found during the search. Further, incriminating material in the form of statement u/s. 132(4) of the Act of Shri Bhadresh Dodhia was also collected during the search. These documents and the statement of Shri Bhadresh Dodhia clearly suggest that the appellant received accommodation entries in the form of bogus unsecured loans. Therefore, it is a case where incriminating material was found and seized during the search. 12. Further, it is a well settled legal position that where seized material prima facie suggests that it consists of some element of undisclosed income, proceedings u/s 153C can be initiated after recording satisfaction note. In this regard, reliance is placed on: i. Hon'ble Gujarat High Court in the case of Rajesh Sunderdas Vaswani vs ACIT [2016] 76 taxmann.com 311 (Gujarat) held as Where Assessing Officer of search person recorded that document found during search was copy of a ledger of books of account of assessee company which evidenced certain cheq payments as well as cash payments to a company by assessee, there was prima facie material to suggest that satisfaction as Bhadresh Mansukhlal Dodhia HUF 18 IT(SS)A No. 117 to 119/MUM/2025 to various entities/individuals of Dodhia Group through M/s. Vinam Finance Pvt. Ltd. from whom the appellant has taken unsecured loans during AY 2016- Although it is not mentioned in the satisfaction note however it is seen that page no. 36 to 38 of bundle no. 3 found and seized at the residence of Shri Divyesh ain details of return of interest paid on certain loans taken from various companies. These documents were specifically confronted in question no. 60 of statement u/s. 132(4) of Shri Bhadresh Dodhia and in response to same, he explain the column 'return' as of It is seen from these documents that the name of company M/s. Jatadhari Commercial Pvt. Ltd. against the name of appellant HUF is appearing at page 37 and 38 indicating that the interest paid through cheque by the pellant was received back after deducting commission. 11. The above discussion clearly suggests that during the search operation, various documents containing information relating to appellant were seized. Further, incriminating he satisfaction note were also found during the search. Further, incriminating material in the form of statement u/s. 132(4) of the Act of Shri Bhadresh Dodhia was also collected during the search. These documents and the clearly suggest that the appellant received accommodation entries in the form of bogus unsecured loans. Therefore, it is a case where incriminating 12. Further, it is a well settled legal position that where the seized material prima facie suggests that it consists of some element of undisclosed income, proceedings u/s 153C can be initiated after recording satisfaction note. In this regard, ajesh Sunderdas Vaswani vs ACIT [2016] 76 taxmann.com 311 (Gujarat) held as Where Assessing Officer of search person recorded that document found during search was copy of a ledger of books of account of assessee company which evidenced certain cheque payments as well as cash payments to a company by assessee, there was prima facie material to suggest that satisfaction as Printed from counselvise.com per section 153C was duly recorded and thus, notice issued to file return to ii. Hon'ble Gujarat High Cour Desai vs The Income Tax Officer [Special Civil application No. 20294 of 2019] (on 5 July, 2021) has held as under: 13. It may be noted that at the time of issuing the notice under section 153C of the Act, the Assessing Offic himself whether the books of accounts or documents or assets seized or requisitioned by the other Assessing Officer in the proceedings under section 153A and handed over to him, had a bearing on the determination of the total income of th whom the notice under section 153C is issued. Such satisfaction would be in the realm of subjective satisfaction of the concerned Assessing Officer. The sufficiency or correctness of the documents or material handed over by the other Assessing Officer to him also could not be gone into by the Courts at this stage. In the case of Raymond Woolen Mills Ltd. Versus ITO reported in (1999) 236 ITR 34 (SC), it has been held that in determining whether the commencement of reassessment proceeding is vali whether there is prima facie some material on the basis of which the department has opened the case, and that the sufficiency or correctness of the material could not be considered at this stage. It is true that the supreme Cou made the said observations while considering the validity of the reasons recorded by the Assessing Officer for reopening of the assessment of the assessee under Section 147, whereas the present case arises out of the proceedings initiated and the satisfaction recorded by the Assessing Officer for initiating the proceedings under section 153C of the said Act. nonetheless such reliance of the decision of Supreme Court by the respondent could not be said to be out of place when the matter was concerning petitioner - assessee. Thus at the time of recording satisfaction for the purposes of section 153C of the Act, the assessing officer should be 'prima facie' satisfied that the documents seized have a bearing on determination of the total income of the person to whom the notice under section 153C is being issued. 13. In the present case, documents containing information that the appellant has received accommodation entries as mentioned in the satisfaction not documents, the statement of Shri Bhadresh Dodhia also Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 per section 153C was duly recorded and thus, notice issued to assessee was justified. ii. Hon'ble Gujarat High Court in the case of Raju Bhupendra Desai vs The Income Tax Officer [Special Civil application No. 20294 of 2019] (on 5 July, 2021) has held as under: 13. It may be noted that at the time of issuing the notice under section 153C of the Act, the Assessing Officer has to satisfy himself whether the books of accounts or documents or assets seized or requisitioned by the other Assessing Officer in the proceedings under section 153A and handed over to him, had a bearing on the determination of the total income of the person to whom the notice under section 153C is issued. Such satisfaction would be in the realm of subjective satisfaction of the concerned Assessing Officer. The sufficiency or correctness of the documents or material handed over by the other Officer to him also could not be gone into by the Courts at this stage. In the case of Raymond Woolen Mills Ltd. Versus ITO reported in (1999) 236 ITR 34 (SC), it has been held that in determining whether the commencement of reassessment proceeding is valid, the Court has only to see whether there is prima facie some material on the basis of which the department has opened the case, and that the sufficiency or correctness of the material could not be considered at this stage. It is true that the supreme Cou made the said observations while considering the validity of the reasons recorded by the Assessing Officer for reopening of the assessment of the assessee under Section 147, whereas the present case arises out of the proceedings initiated and the tisfaction recorded by the Assessing Officer for initiating the proceedings under section 153C of the said Act. nonetheless such reliance of the decision of Supreme Court by the respondent could not be said to be out of place when the matter was concerning about the reopening of the assessment of the assessee. Thus at the time of recording satisfaction for the purposes of section 153C of the Act, the assessing officer should be 'prima facie' satisfied that the documents seized have a bearing on determination of the total income of the person to whom the notice under section 153C is being issued. 13. In the present case, documents containing information that the appellant has received accommodation entries as mentioned in the satisfaction note were found and seized. Besides these documents, the statement of Shri Bhadresh Dodhia also Bhadresh Mansukhlal Dodhia HUF 19 IT(SS)A No. 117 to 119/MUM/2025 per section 153C was duly recorded and thus, notice issued to t in the case of Raju Bhupendra Desai vs The Income Tax Officer [Special Civil application No. 13. It may be noted that at the time of issuing the notice under er has to satisfy himself whether the books of accounts or documents or assets seized or requisitioned by the other Assessing Officer in the proceedings under section 153A and handed over to him, had a e person to whom the notice under section 153C is issued. Such satisfaction would be in the realm of subjective satisfaction of the concerned Assessing Officer. The sufficiency or correctness of the documents or material handed over by the other Officer to him also could not be gone into by the Courts at this stage. In the case of Raymond Woolen Mills Ltd. Versus ITO reported in (1999) 236 ITR 34 (SC), it has been held that in determining whether the commencement of d, the Court has only to see whether there is prima facie some material on the basis of which the department has opened the case, and that the sufficiency or correctness of the material could not be considered at this stage. It is true that the supreme Court has made the said observations while considering the validity of the reasons recorded by the Assessing Officer for reopening of the assessment of the assessee under Section 147, whereas the present case arises out of the proceedings initiated and the tisfaction recorded by the Assessing Officer for initiating the proceedings under section 153C of the said Act. nonetheless such reliance of the decision of Supreme Court by the respondent could not be said to be out of place when the matter about the reopening of the assessment of the Thus at the time of recording satisfaction for the purposes of section 153C of the Act, the assessing officer should be 'prima facie' satisfied that the documents seized have a bearing on the determination of the total income of the person to whom the 13. In the present case, documents containing information that the appellant has received accommodation entries as mentioned e were found and seized. Besides these documents, the statement of Shri Bhadresh Dodhia also Printed from counselvise.com suggests that the appellant had received accommodation entries. The AO has recorded a satisfaction u/s. 153C of the Act as discussed above. It is important to ment Central Circle well as the appellant. Considering the totality of facts and material on record, I am of the invoked the provisions of section 153C of the Act. the ground no. 1 raised by the appellant stand 3.6 It is thus evident from the above that while dealing with the validity of the satisfaction recorded under section 153C, the learned CIT(A) has taken note of the seized material an referred to in the satisfaction note, which, according to him, indicated the receipt of unsecured loans from Commercial Pvt. Ltd. premise that incriminating material existed qua the However, a specific finding on the precise nature or evidentiary nexus of such incriminating material vis addition is not discernible from the order. 3.7 Having regard to the law laid down in (supra) and other judicial precedents, it becomes necessary for us to test, in the facts of the present case, whether any addition could have been validly sustained in the absence of incriminating material relatable to the assessee. To that end, we have examined the findings of the learned CIT(A) on merits to ascertain the factual substratum on which the impugned addition has been affirmed. The relevant observations of the learned CIT(A) on merits are reproduced hereunder for ready reference: Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 suggests that the appellant had received accommodation entries. The AO has recorded a satisfaction u/s. 153C of the Act as discussed above. It is important to mention here that DCIT, Central Circle-3, Thane is the AO for the searched person as well as the appellant. Considering the totality of facts and material on record, I am of the opinion that the AO has rightly invoked the provisions of section 153C of the Act. Accordingly, the ground no. 1 raised by the appellant stand DISMISSED. It is thus evident from the above that while dealing with the validity of the satisfaction recorded under section 153C, the learned CIT(A) has taken note of the seized material and the documents referred to in the satisfaction note, which, according to him, indicated the receipt of unsecured loans from The ld CIT(A) has therefore proceeded on the premise that incriminating material existed qua the However, a specific finding on the precise nature or evidentiary nexus of such incriminating material vis-à-vis the impugned addition is not discernible from the order. Having regard to the law laid down in Abhisar Buildwell d other judicial precedents, it becomes necessary for us to test, in the facts of the present case, whether any addition could have been validly sustained in the absence of incriminating material relatable to the assessee. To that end, we have examined the findings of the learned CIT(A) on merits to ascertain the factual substratum on which the impugned addition has been affirmed. The relevant observations of the learned CIT(A) on merits are reproduced hereunder for ready reference: Bhadresh Mansukhlal Dodhia HUF 20 IT(SS)A No. 117 to 119/MUM/2025 suggests that the appellant had received accommodation entries. The AO has recorded a satisfaction u/s. 153C of the Act ion here that DCIT, 3, Thane is the AO for the searched person as well as the appellant. Considering the totality of facts and the AO has rightly Accordingly, DISMISSED.” It is thus evident from the above that while dealing with the validity of the satisfaction recorded under section 153C, the learned d the documents referred to in the satisfaction note, which, according to him, indicated the receipt of unsecured loans from M/s Jatadhari The ld CIT(A) has therefore proceeded on the premise that incriminating material existed qua the addition made. However, a specific finding on the precise nature or evidentiary vis the impugned Abhisar Buildwell d other judicial precedents, it becomes necessary for us to test, in the facts of the present case, whether any addition could have been validly sustained in the absence of incriminating material relatable to the assessee. To that end, we have examined the findings of the learned CIT(A) on merits to ascertain the factual substratum on which the impugned addition has been affirmed. The relevant observations of the learned CIT(A) on merits are Printed from counselvise.com “17. The ground no. 3 the addition of Rs.50,00,000/ The facts leading to this addition are that during the search operation, it was found that various entities of Dodhia Group had taken accommodatio capital from various shell entities. The Assessee during the year had taken following unsecured loans: Sr. No. 1 18.1 During the assessee to substantiate the genuineness of loan taken during the year, however, the said notice remained uncompiled with. The AO issued a specific show cause notice on 06.09.2022 wherein the documents found du 35 to 38 of bundle no. 3 seized from the residence of Shri Divyesh R. Dhanani (where the details of amount received back by various entities of Dodhia Group which was claimed to have been paid as interest on unsecured loans raised from shell entities were found mentioned) were also confronted. However, this notice remained uncompiled with. Another show cause notice was issued on 02.11.2022 which was also not responded by the appellant. This show cause notice w dated 18.11.2022 and the same was also not responded by the appellant. Final show cause notice in this case was issued on 25.11.2022 wherein enquiries conducted by the De bogus and therefore, the assessee was requested to produce the directors of the company. In response, the assessee on 11.12.2022, filed documents such as confirmation, ITR, financial statement, copy of ledger account, incorporation of lender company. However, no comments regarding the production of the directors of the company were given. Neither any comments were made regarding the findings of the enquiries conducted by th bogus entity. 18.2 It is further seen from the impugned assessment order that M/s. Jatadhari Commercial Pvt. Ltd. was a shell company operated by an entry operator namely Shri Manoj Kumar and as per the statement recorded by Investigation Wing, Kolkata, Shri Manoj Kumar admitted that he is engaged in the activities of providing accommodation entries. It is important to mention that the said statement of Shri Manoj Kumar was confronted with Shri Bhadresh Dodhia in the statement recorded u/s. 132(4) of the Act on 29.11.2019 at his office 1001, Filix Towers, Sonapur, Bhandup Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 17. The ground no. 3 and 5 raised by the appellant are regarding the addition of Rs.50,00,000/- made by the AO u/s. 68 of the Act. The facts leading to this addition are that during the search operation, it was found that various entities of Dodhia Group had taken accommodation entries in the form of unsecured loans/share capital from various shell entities. The Assessee during the year had taken following unsecured loans: Name of the Company Amount of Loan Jatadhari Commercial Pvt. Ltd. 50,00,000/ 18.1 During the assessment proceedings, the AO requested the assessee to substantiate the genuineness of loan taken during the year, however, the said notice remained uncompiled with. The AO issued a specific show cause notice on 06.09.2022 wherein the documents found during the search along with the seized pages no. 35 to 38 of bundle no. 3 seized from the residence of Shri Divyesh R. Dhanani (where the details of amount received back by various entities of Dodhia Group which was claimed to have been paid as unsecured loans raised from shell entities were found mentioned) were also confronted. However, this notice remained uncompiled with. Another show cause notice was issued on 02.11.2022 which was also not responded by the appellant. This show cause notice was followed by another show cause notice dated 18.11.2022 and the same was also not responded by the appellant. Final show cause notice in this case was issued on wherein the appellant was again informed that as per enquiries conducted by the Department, the loan creditor companyis bogus and therefore, the assessee was requested to produce the directors of the company. In response, the assessee on 11.12.2022, filed documents such as confirmation, ITR, financial statement, copy of ledger account, copy of bank statement, copy of certificate of incorporation of lender company. However, no comments regarding the production of the directors of the company were given. Neither any comments were made regarding the findings of the enquiries conducted by the department suggesting that the loan creditor is a 18.2 It is further seen from the impugned assessment order that M/s. Jatadhari Commercial Pvt. Ltd. was a shell company operated by an entry operator namely Shri Manoj Kumar and as per the tatement recorded by Investigation Wing, Kolkata, Shri Manoj Kumar admitted that he is engaged in the activities of providing accommodation entries. It is important to mention that the said statement of Shri Manoj Kumar was confronted with Shri Bhadresh dhia in the statement recorded u/s. 132(4) of the Act on 29.11.2019 at his office 1001, Filix Towers, Sonapur, Bhandup Bhadresh Mansukhlal Dodhia HUF 21 IT(SS)A No. 117 to 119/MUM/2025 and 5 raised by the appellant are regarding made by the AO u/s. 68 of the Act. The facts leading to this addition are that during the search operation, it was found that various entities of Dodhia Group had n entries in the form of unsecured loans/share capital from various shell entities. The Assessee during the year Amount of Loan 50,00,000/- assessment proceedings, the AO requested the assessee to substantiate the genuineness of loan taken during the year, however, the said notice remained uncompiled with. The AO issued a specific show cause notice on 06.09.2022 wherein the ring the search along with the seized pages no. 35 to 38 of bundle no. 3 seized from the residence of Shri Divyesh R. Dhanani (where the details of amount received back by various entities of Dodhia Group which was claimed to have been paid as unsecured loans raised from shell entities were found mentioned) were also confronted. However, this notice remained uncompiled with. Another show cause notice was issued on 02.11.2022 which was also not responded by the appellant. This as followed by another show cause notice dated 18.11.2022 and the same was also not responded by the appellant. Final show cause notice in this case was issued on appellant was again informed that as per partment, the loan creditor companyis bogus and therefore, the assessee was requested to produce the directors of the company. In response, the assessee on 11.12.2022, filed documents such as confirmation, ITR, financial statement, copy copy of bank statement, copy of certificate of incorporation of lender company. However, no comments regarding the production of the directors of the company were given. Neither any comments were made regarding the findings of the enquiries e department suggesting that the loan creditor is a 18.2 It is further seen from the impugned assessment order that M/s. Jatadhari Commercial Pvt. Ltd. was a shell company operated by an entry operator namely Shri Manoj Kumar and as per the tatement recorded by Investigation Wing, Kolkata, Shri Manoj Kumar admitted that he is engaged in the activities of providing accommodation entries. It is important to mention that the said statement of Shri Manoj Kumar was confronted with Shri Bhadresh dhia in the statement recorded u/s. 132(4) of the Act on 29.11.2019 at his office 1001, Filix Towers, Sonapur, Bhandup Printed from counselvise.com West. The corresponding question is question no. 56 and Shri Bhadresh Dodhia simply stated that he has no comments to offer. 18.3 After considering the facts of the case, the AO observed that theunsecured loan of Rs.50,00,000/ loan creditor companywas created only for the purpose of carrying out sham transactions wherein unaccounted money was routed through thes position and the facts of the case held that the assessee has failed to substantiate the genuineness of these loans as well as creditworthiness of loan creditor. Accordingly, addition of Rs.50,00,000/ 19. During the appellate proceedings, the appellant has filed a detailed submission. The said submission is not being reproduced for the sake of brevity. However, the contentions raised by the appellant are summarized as under: i. It had filed all the documents such as confirmation, copy of ITR, copy of bank statement, copy of financial statements, copy of incorporation certificate, etc. for substantiating the genuineness of the loans taken. ii. The appellant has discharged his onus as require Act by filing the necessary documentary evidences iii. The AO has violated the principle of natural justice because the copies of enquiry reports conducted at the back of the appellant were not provided. iv. The opportunity of cross examin entry operators was not provided by the AO. V. The unsecured loan raised during the year has been repaid in subsequent assessment years. vi. No incriminating material suggesting that the loans are taken after giving cash to during the search operation Findings 20. Before dealing with the facts of the present case, it isimportant to first deal with the legal position regarding section 68 of the Act which has emerged. over the years.It is a well set that onus of proving the source of money found to have been received by an assessee, is on him. If the assessee fails to satisfactorily explain these credits, it is open for the revenue to hold Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 West. The corresponding question is question no. 56 and Shri Bhadresh Dodhia simply stated that he has no comments to offer. onsidering the facts of the case, the AO observed that theunsecured loan of Rs.50,00,000/- is not genuine and the said loan creditor companywas created only for the purpose of carrying out sham transactions wherein unaccounted money was routed through these companies. The AO after considering the legal position and the facts of the case held that the assessee has failed to substantiate the genuineness of these loans as well as creditworthiness of loan creditor. Accordingly, addition of Rs.50,00,000/- was made by the AO. 19. During the appellate proceedings, the appellant has filed a detailed submission. The said submission is not being reproduced for the sake of brevity. However, the contentions raised by the appellant are summarized as under: d all the documents such as confirmation, copy of ITR, copy of bank statement, copy of financial statements, copy of incorporation certificate, etc. for substantiating the genuineness of taken. ii. The appellant has discharged his onus as required u/s. 68 of the Act by filing the necessary documentary evidences iii. The AO has violated the principle of natural justice because the copies of enquiry reports conducted at the back of the appellant were not provided. iv. The opportunity of cross examination of so-called accommodation entry operators was not provided by the AO. V. The unsecured loan raised during the year has been repaid in subsequent assessment years. No incriminating material suggesting that the loans are taken after giving cash to these companies, was found during the search operation. 20. Before dealing with the facts of the present case, it isimportant to first deal with the legal position regarding section 68 of the Act which has emerged. over the years.It is a well settled legal position that onus of proving the source of money found to have been received by an assessee, is on him. If the assessee fails to satisfactorily explain these credits, it is open for the revenue to hold Bhadresh Mansukhlal Dodhia HUF 22 IT(SS)A No. 117 to 119/MUM/2025 West. The corresponding question is question no. 56 and Shri Bhadresh Dodhia simply stated that he has no comments to offer. onsidering the facts of the case, the AO observed that is not genuine and the said loan creditor companywas created only for the purpose of carrying out sham transactions wherein unaccounted money was routed e companies. The AO after considering the legal position and the facts of the case held that the assessee has failed to substantiate the genuineness of these loans as well as creditworthiness of loan creditor. Accordingly, addition of 19. During the appellate proceedings, the appellant has filed a detailed submission. The said submission is not being reproduced for the sake of brevity. However, the contentions raised by the d all the documents such as confirmation, copy of ITR, copy of bank statement, copy of financial statements, copy of incorporation certificate, etc. for substantiating the genuineness of d u/s. 68 of the iii. The AO has violated the principle of natural justice because the copies of enquiry reports conducted at the back of the appellant called accommodation V. The unsecured loan raised during the year has been repaid in No incriminating material suggesting that the loans are these companies, was found 20. Before dealing with the facts of the present case, it isimportant to first deal with the legal position regarding section 68 of the Act tled legal position that onus of proving the source of money found to have been received by an assessee, is on him. If the assessee fails to satisfactorily explain these credits, it is open for the revenue to hold Printed from counselvise.com that the sum credited, is income of the as burden lies on the revenue. For this proposition reliance is placed on the decision of Hon. Supreme Court in the case of Roshan Di Hatti vs CIT 107 ITR 938 (SC) and Kale Khan Mohammad Hanif vs CIT 50 ITR 1 (SC). 21. It is also a well his onus u/s 68, the assessee must prove the identity of creditors, capacity of creditors to advance money and genuineness of transaction by filing documents such as confirmation, copies of bank statement, Once the assessee has discharged his primary onus by submitting supporting documents such as confirmation, copies of bank statements of creditors, copies of ITR of creditors and copies oftheir financial statement, then only burden shifts to the department. For this proposition the reliance is placed on following decisions:  Shankar Industries vs CIT 114 ITR  Harichand Virender Paul vs CIT 140 ITR 148 (P&H HC).  CIT vs Biju Patnaik 160 ITR 674 (SC  CIT vs Precision Finance Pvt. Ltd. 208 ITR 465 (Calcutta).  Dhanlaxmi Steel Re  Sanil K. M. P. vs CIT 177 Taxman 481 (Kerela). 22.1 The appellant is heavily relying on the documents such as copy of ITR, financial during the assessment proceedings. In this connection, it may be mentioned that the issue of make of accommodation entries has been discussed by the Hon'ble Delhi High Court in Ltd. [2012] 342 ITR 169 (Delhi), wherein the Hon'ble High Court observed as under: \"The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, that where the complete particulars of the share applicants such as their names and addresses, Income creditworthiness, share application forms and shareholders' register, share transfer register, etc., are furnishe Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 that the sum credited, is income of the assessee and no further burden lies on the revenue. For this proposition reliance is placed on the decision of Hon. Supreme Court in the case of Roshan Di Hatti vs CIT 107 ITR 938 (SC) and Kale Khan Mohammad Hanif vs CIT 50 ITR 1 (SC). 21. It is also a well settled legal position that in order to discharge his onus u/s 68, the assessee must prove the identity of creditors, capacity of creditors to advance money and genuineness of transaction by filing documents such as confirmation, copies of bank statement, copy of financial statements, copy of ITRs, etc. Once the assessee has discharged his primary onus by submitting supporting documents such as confirmation, copies of bank statements of creditors, copies of ITR of creditors and copies oftheir ement, then only burden shifts to the department. For this proposition the reliance is placed on following decisions: Shankar Industries vs CIT 114 ITR 689 (Calcutta). Harichand Virender Paul vs CIT 140 ITR 148 (P&H HC). CIT vs Biju Patnaik 160 ITR 674 (SC). CIT vs Precision Finance Pvt. Ltd. 208 ITR 465 (Calcutta). Dhanlaxmi Steel Re-rolling Mills vs CIT 228 ITR 780 (AP). Sanil K. M. P. vs CIT 177 Taxman 481 (Kerela). 22.1 The appellant is heavily relying on the documents such as copy of ITR, financial statement, bank statement, etc. filed by him during the assessment proceedings. In this connection, it may be mentioned that the issue of make- believe documentation in the case of accommodation entries has been discussed by the Hon'ble Delhi High Court in the case of CIT v. Nova Promoters and Finlease (P.) Ltd. [2012] 342 ITR 169 (Delhi), wherein the Hon'ble High Court observed as under: \"The ratio of a decision is to be understood and appreciated in the background of the facts of that case. So understood, it will be seen that where the complete particulars of the share applicants such as their names and addresses, Income-tax file numbers, their creditworthiness, share application forms and shareholders' register, share transfer register, etc., are furnished to the Assessing Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no Bhadresh Mansukhlal Dodhia HUF 23 IT(SS)A No. 117 to 119/MUM/2025 sessee and no further burden lies on the revenue. For this proposition reliance is placed on the decision of Hon. Supreme Court in the case of Roshan Di Hatti vs CIT 107 ITR 938 (SC) and Kale Khan Mohammad Hanif vs CIT settled legal position that in order to discharge his onus u/s 68, the assessee must prove the identity of creditors, capacity of creditors to advance money and genuineness of transaction by filing documents such as confirmation, copies of copy of financial statements, copy of ITRs, etc. Once the assessee has discharged his primary onus by submitting supporting documents such as confirmation, copies of bank statements of creditors, copies of ITR of creditors and copies oftheir ement, then only burden shifts to the department. For this proposition the reliance is placed on following decisions: (Calcutta). Harichand Virender Paul vs CIT 140 ITR 148 (P&H HC). CIT vs Precision Finance Pvt. Ltd. 208 ITR 465 (Calcutta). rolling Mills vs CIT 228 ITR 780 (AP). 22.1 The appellant is heavily relying on the documents such as statement, bank statement, etc. filed by him during the assessment proceedings. In this connection, it may be believe documentation in the case of accommodation entries has been discussed by the Hon'ble Delhi the case of CIT v. Nova Promoters and Finlease (P.) Ltd. [2012] 342 ITR 169 (Delhi), wherein the Hon'ble High Court \"The ratio of a decision is to be understood and appreciated in the it will be seen that where the complete particulars of the share applicants such as tax file numbers, their creditworthiness, share application forms and shareholders' d to the Assessing Officer and the Assessing Officer has not conducted any enquiry into the same or has no material in his possession to show that those particulars are false and cannot be acted upon, then no Printed from counselvise.com addition can be made in the hands of the compan and the remedy open to the Revenue is to go after the share applicants in accordance with law. We are afraid that we cannot apply the ratio to a case, such as the present one, where the Assessing Officer is in possession of material that impeaches the particulars furnished by the assessee and also establishes the link between self providers', whose business it is to help assessees bring into their books of account their unaccounted monies thro share subscription, and the assessee The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a premeditated plan conceived and executed with the connivance or invo assessee excludes the applicability of the ratic.\" 22.2 Therefore, as held by the Hon'ble High Court, if the AO examines the truth behind such sum credited shown by the assessee and material that discredits and impeaches the particulars furn amount was received as part of a premeditated plan conceived and executed with the connivance or involvement of the assessee, this fastens the liability of such credits in the hands of the assessee. 23. Further, it was held in the case of CIT v. Nipun Builders and Developers P. Ltd. [2013] 350 ITR 407 (Delhi) that the point at which unexplained credit would stand discharged depends upon the facts and circumstances of is private placement of shares: \"the assessee cannot simply furnish details and remain quiet even when summons issued to shareholders under section 131 return unserved and uncomplied. This approach would be u as a general proposition as the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance. Some cases might require or justify visit by the Inspector to the shareholders/subscribers were functioning or available at the addresses, but it would be incorrect to state that the Assessing Officer should get the addresses from the Registrar of Companies' website or search for the addresses of s communicate with them. Similarly, creditworthiness was not proved by mere issue of a cheque or by furnishing a copy of statement of bank account. Circumstances might require that there should be some evidence of positive nature to show that had made a genuine investment, acted as angel investors, after due diligence or for personal reasons. Thus, finding or a conclusion must Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 addition can be made in the hands of the company under section 68 and the remedy open to the Revenue is to go after the share applicants in accordance with law. We are afraid that we cannot apply the ratio to a case, such as the present one, where the Assessing Officer is in possession of material that discredits and impeaches the particulars furnished by the assessee and also establishes the link between self-confessed 'accommodation entry providers', whose business it is to help assessees bring into their books of account their unaccounted monies through the medium of share subscription, and the assessee The existence with the Assessing Officer of material showing that the share subscriptions were collected as part of a premeditated plan-a smoke screen conceived and executed with the connivance or involvement of the assessee excludes the applicability of the ratic.\" 22.2 Therefore, as held by the Hon'ble High Court, if the AO examines the truth behind such sum credited shown by the assessee and material that discredits and impeaches the particulars furnished by the assessee and also shows that the amount was received as part of a premeditated plan conceived and executed with the connivance or involvement of the assessee, this fastens the liability of such credits in the hands of the assessee. , it was held in the case of CIT v. Nipun Builders and Developers P. Ltd. [2013] 350 ITR 407 (Delhi) that the which the initial onus on the assessee to prove the unexplained credit would stand discharged depends upon the facts and circumstances of each case. It was pointed out that where there is private placement of shares: \"the assessee cannot simply furnish details and remain quiet even when summons issued to shareholders under section 131 return unserved and uncomplied. This approach would be u as a general proposition as the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance. Some cases might require or justify visit by the Inspector to ascertain whether the shareholders/subscribers were functioning or available at the addresses, but it would be incorrect to state that the Assessing Officer should get the addresses from the Registrar of Companies' website or search for the addresses of shareholders and communicate with them. Similarly, creditworthiness was not proved by mere issue of a cheque or by furnishing a copy of statement of bank account. Circumstances might require that there should be some evidence of positive nature to show that the said subscribers had made a genuine investment, acted as angel investors, after due diligence or for personal reasons. Thus, finding or a conclusion must Bhadresh Mansukhlal Dodhia HUF 24 IT(SS)A No. 117 to 119/MUM/2025 y under section 68 and the remedy open to the Revenue is to go after the share applicants in accordance with law. We are afraid that we cannot apply the ratio to a case, such as the present one, where the discredits and impeaches the particulars furnished by the assessee and also confessed 'accommodation entry providers', whose business it is to help assessees bring into their ugh the medium of share subscription, and the assessee The existence with the Assessing Officer of material showing that the share subscriptions a smoke screen- lvement of the 22.2 Therefore, as held by the Hon'ble High Court, if the AO examines the truth behind such sum credited shown by the assessee and material that discredits and impeaches the ished by the assessee and also shows that the amount was received as part of a premeditated plan conceived and executed with the connivance or involvement of the assessee, this fastens the liability of such credits in the hands of the assessee. , it was held in the case of CIT v. Nipun Builders and Developers P. Ltd. [2013] 350 ITR 407 (Delhi) that the initial onus on the assessee to prove the unexplained credit would stand discharged depends upon the facts each case. It was pointed out that where there \"the assessee cannot simply furnish details and remain quiet even when summons issued to shareholders under section 131 return unserved and uncomplied. This approach would be unreasonable as a general proposition as the assessee cannot plead that they had received money, but could do nothing more and it was for the Assessing Officer to enforce shareholders attendance. Some cases ascertain whether the shareholders/subscribers were functioning or available at the addresses, but it would be incorrect to state that the Assessing Officer should get the addresses from the Registrar of Companies' hareholders and communicate with them. Similarly, creditworthiness was not proved by mere issue of a cheque or by furnishing a copy of statement of bank account. Circumstances might require that there should be the said subscribers had made a genuine investment, acted as angel investors, after due diligence or for personal reasons. Thus, finding or a conclusion must Printed from counselvise.com be practicable, pragmatic and might in a given case take into account that the assessee might fin establish the creditworthiness of the shareholders.\" 24.1 Similarly, in CIT v. N. R. Portfolio Pvt. Ltd. [2014] 264 CTR 258 (Delhi), the Hon'ble High Court reiterated the need of the assessee to satisfy the Assessing Officer and genuineness\" of the creditors. It was pointed out that mere production of incorporation details, PANS or the fact that third persons or company had filed Income limited company may attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity, are deeper and obtrusive. Companies no doubt are artificial or ju dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take the decisions, controls and 4.1 A plain reading of the above reveals has relied on three broad categories of material forming the foundation of the addition (i) firstly, the seized pages No. 35 to 38 of Bundle No. 3 found at the residence of Shri Divyesh R. Dhanani, wherein details of repayments or amounts received back by various entities of the Dodhia Group, ostensibly towards interest on unsecured loans obtained from shell entities, were recorded; (ii) secondly, the statement of Shri Manoj Kumar recorded by the Investigation wing of Kolkatta, which was confronted to Shri Bhadresh Dodhia his search proceedings on 29/11/2019. Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 be practicable, pragmatic and might in a given case take into account that the assessee might find it difficult to unimpeachably establish the creditworthiness of the shareholders.\" 24.1 Similarly, in CIT v. N. R. Portfolio Pvt. Ltd. [2014] 264 CTR 258 (Delhi), the Hon'ble High Court reiterated the need of the assessee to satisfy the Assessing Officer about the \"identity, creditworthiness and genuineness\" of the creditors. It was pointed out that mere production of incorporation details, PANS or the fact that third persons or company had filed Income-tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity, are deeper and obtrusive. Companies no doubt are artificial or juristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take the decisions, controls and manage them.” A plain reading of the above reveals that the learned CIT(A) has relied on three broad categories of material forming the foundation of the addition — firstly, the seized pages No. 35 to 38 of Bundle No. 3 found at the residence of Shri Divyesh R. Dhanani, wherein details of r amounts received back by various entities of the Dodhia Group, ostensibly towards interest on unsecured loans obtained from shell entities, were recorded; , the statement of Shri Manoj Kumar recorded by the Investigation wing of Income-tax Department, was confronted to Shri Bhadresh Dodhia his search proceedings on 29/11/2019. Bhadresh Mansukhlal Dodhia HUF 25 IT(SS)A No. 117 to 119/MUM/2025 be practicable, pragmatic and might in a given case take into d it difficult to unimpeachably 24.1 Similarly, in CIT v. N. R. Portfolio Pvt. Ltd. [2014] 264 CTR 258 (Delhi), the Hon'ble High Court reiterated the need of the assessee to about the \"identity, creditworthiness and genuineness\" of the creditors. It was pointed out that mere production of incorporation details, PANS or the fact that third tax details in case of a private not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity, are deeper and obtrusive. Companies no ristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take that the learned CIT(A) has relied on three broad categories of material forming the firstly, the seized pages No. 35 to 38 of Bundle No. 3 found at the residence of Shri Divyesh R. Dhanani, wherein details of r amounts received back by various entities of the Dodhia Group, ostensibly towards interest on unsecured loans , the statement of Shri Manoj Kumar which was tax Department, was confronted to Shri Bhadresh Dodhia during Printed from counselvise.com (iii) Thirdly, the addition has been failure of the assessee in discharging the onus u/s 68 of the The inquiries conducted in post search or assessment proceedings revealed M/s Jatadhari as bogus shell entity, so in final show cause notice dated 25/11/2022, the assessee was asked to produce director of said company but assessee did not comply. documents in support of identity, creditworthiness and genuiness of transaction have also been rejected. 4.2 Out of the three sources referred to by the lower authorities, it is manifest that the second and third sources are unquestionably not materials found during the course of the search action statement of Shri Bhadresh M. Dodhia, recorded under section 132(4) of the Act, cannot, in the light of the judgment of the Hon’ble Delhi High Court in Harjeev Lal Agarwal v. CIT as incriminating material. The law is well settled that a statement under section 132(4), in the absence of supporting documentary evidence, does not constitute incriminating material for the purpose of assessment under sections 153A or 153C. 4.3 Thus, the only document that survives for consideration is the set of seized pages numbered 35 to 38 of bundle no. 3, recovered from the residence of Shri Divyesh R. Dhanani. factual observation of records the loan from M/s Jatadhari Commercial Pvt. Ltd. in the regular books of account of the assessee and is part of the Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 addition has been upheld mainly for the reason of failure of the assessee in discharging the onus u/s 68 of the The inquiries conducted in post search or assessment proceedings revealed M/s Jatadhari as bogus shell entity, so in final show cause notice dated 25/11/2022, the assessee was asked to produce director of said company but assessee did not comply. documents in support of identity, creditworthiness and genuiness of transaction have also been rejected. Out of the three sources referred to by the lower authorities, it is manifest that the second and third sources are unquestionably found during the course of the search action statement of Shri Bhadresh M. Dodhia, recorded under section 132(4) of the Act, cannot, in the light of the judgment of the Hon’ble Harjeev Lal Agarwal v. CIT (supra), be regarded riminating material. The law is well settled that a statement under section 132(4), in the absence of supporting documentary evidence, does not constitute incriminating material for the purpose of assessment under sections 153A or 153C. Thus, the only document that survives for consideration is the set of seized pages numbered 35 to 38 of bundle no. 3, recovered from the residence of Shri Divyesh R. Dhanani. On verification of factual observation of records, we find that the entry pertain M/s Jatadhari Commercial Pvt. Ltd. is duly recorded in the regular books of account of the assessee and is part of the Bhadresh Mansukhlal Dodhia HUF 26 IT(SS)A No. 117 to 119/MUM/2025 upheld mainly for the reason of failure of the assessee in discharging the onus u/s 68 of the Act. The inquiries conducted in post search or assessment proceedings revealed M/s Jatadhari as bogus shell entity, so in final show cause notice dated 25/11/2022, the assessee was asked to produce director of said company but assessee did not comply. The documents in support of identity, creditworthiness and genuiness of Out of the three sources referred to by the lower authorities, it is manifest that the second and third sources are unquestionably found during the course of the search action. The statement of Shri Bhadresh M. Dodhia, recorded under section 132(4) of the Act, cannot, in the light of the judgment of the Hon’ble (supra), be regarded riminating material. The law is well settled that a statement under section 132(4), in the absence of supporting documentary evidence, does not constitute incriminating material for the purpose Thus, the only document that survives for consideration is the set of seized pages numbered 35 to 38 of bundle no. 3, recovered On verification of , we find that the entry pertaining to is duly recorded in the regular books of account of the assessee and is part of the Printed from counselvise.com balance sheet forming part of the return of income originally filed. Hence, the mere presence of such an entry in th cannot, in law, be regarded as during the course of search. 4.4 As regards the remark “return” appearing in the document, it is noted that during search proceedings, Shri Bhadresh M. Dodhia did not explain but he was also not specifically questioned about this notation with reference to transaction of loan of Jatadhari Commercial P. Ltd. assessee that During assessment, the assessee explained that this remark might have been made by the accountant or concerned staff to indicate the intention to repay the loan. The Assessing Offi however, construed it to mean that interest was returned in cash to the lender. Significantly, the word “cash” does seized material; it was merely assumed by the AO. 4.5 The burden of proving that any interest was repaid in cash lay squarely upon the Assessing Officer. No enquiry was, however, undertaken with M/s Jatadhari Commercial Pvt. Ltd. inference. In the absence of any corroborative evidence, the said assumption remains speculative. Accordingly, a loan entry alre disclosed in the regular accounts cannot be termed merely because it is found noted in the seized papers. Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 balance sheet forming part of the return of income originally filed. Hence, the mere presence of such an entry in the seized papers cannot, in law, be regarded as incriminating material during the course of search. As regards the remark “return” appearing in the document, it is noted that during search proceedings, Shri Bhadresh M. Dodhia did not explain but he was also not specifically questioned about this notation with reference to transaction of loan of Jatadhari It is submitted by the ld counsel for the During assessment, the assessee explained that this remark might have been made by the accountant or concerned staff to indicate the intention to repay the loan. The Assessing Offi however, construed it to mean that interest was returned in cash to the lender. Significantly, the word “cash” does not seized material; it was merely assumed by the AO. The burden of proving that any interest was repaid in cash lay squarely upon the Assessing Officer. No enquiry was, however, M/s Jatadhari Commercial Pvt. Ltd. inference. In the absence of any corroborative evidence, the said assumption remains speculative. Accordingly, a loan entry alre disclosed in the regular accounts cannot be termed merely because it is found noted in the seized papers. Bhadresh Mansukhlal Dodhia HUF 27 IT(SS)A No. 117 to 119/MUM/2025 balance sheet forming part of the return of income originally filed. e seized papers incriminating material discovered As regards the remark “return” appearing in the document, it is noted that during search proceedings, Shri Bhadresh M. Dodhia did not explain but he was also not specifically questioned about this notation with reference to transaction of loan of Jatadhari It is submitted by the ld counsel for the During assessment, the assessee explained that this remark might have been made by the accountant or concerned staff to indicate the intention to repay the loan. The Assessing Officer, however, construed it to mean that interest was returned in cash to not appear in the The burden of proving that any interest was repaid in cash lay squarely upon the Assessing Officer. No enquiry was, however, M/s Jatadhari Commercial Pvt. Ltd. to verify such inference. In the absence of any corroborative evidence, the said assumption remains speculative. Accordingly, a loan entry already disclosed in the regular accounts cannot be termed incriminating merely because it is found noted in the seized papers. Printed from counselvise.com 4.6 Though it may be possible that in some post investigation or assessment proceedings, the genuineness of the loan may be independently examined, that by itself does not make the entry “incriminating” for the purpose of section 153C proceedings. For determining whether any was found during search the negative. 4.7 In the facts and in the circumstances of case and in law, it is evident that neither the assessment order nor the order of the learned CIT(A) contains any reference to specific incriminating material in relation to the impugned addition. The Hon’ble Supre Court in Abhisar Buildwell Pvt. Ltd. v. CIT held that where the assessment is unabated and no incriminating material is found during search, no addition other basis . 4.8 Respectfully following the law laid down by the Hon’ble Supreme Court, we hold that no addition could have been made in the case of the assessee in the absence of incriminating material. Accordingly, Ground No. 5 of the appeal for A.Y. 2014 allowed. 5. As we have held that no addition could have been made in the case of the assessee, other ground raised on merit are rendered academic only, which we are not adjudicating at this stage. Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 Though it may be possible that in some post investigation or assessment proceedings, the genuineness of the ndependently examined, that by itself does not make the entry “incriminating” for the purpose of section 153C proceedings. For determining whether any incriminating material was found during search qua the addition made, our answer is in In the facts and in the circumstances of case and in law, it is t that neither the assessment order nor the order of the learned CIT(A) contains any reference to specific incriminating material in relation to the impugned addition. The Hon’ble Supre Abhisar Buildwell Pvt. Ltd. v. CIT (supra) has categorically held that where the assessment is unabated and no incriminating material is found during search, no addition can be made on any Respectfully following the law laid down by the Hon’ble Supreme Court, we hold that no addition could have been made in the case of the assessee in the absence of incriminating material. Ground No. 5 of the appeal for A.Y. 2014 As we have held that no addition could have been made in the case of the assessee, other ground raised on merit are rendered academic only, which we are not adjudicating at this stage. Bhadresh Mansukhlal Dodhia HUF 28 IT(SS)A No. 117 to 119/MUM/2025 Though it may be possible that in some post-search investigation or assessment proceedings, the genuineness of the ndependently examined, that by itself does not make the entry “incriminating” for the purpose of section 153C incriminating material our answer is in In the facts and in the circumstances of case and in law, it is t that neither the assessment order nor the order of the learned CIT(A) contains any reference to specific incriminating material in relation to the impugned addition. The Hon’ble Supreme (supra) has categorically held that where the assessment is unabated and no incriminating can be made on any Respectfully following the law laid down by the Hon’ble Supreme Court, we hold that no addition could have been made in the case of the assessee in the absence of incriminating material. Ground No. 5 of the appeal for A.Y. 2014–15 is As we have held that no addition could have been made in the case of the assessee, other ground raised on merit are rendered academic only, which we are not adjudicating at this stage. Printed from counselvise.com 6. In the assessment year 2016 decided the relevant ground as under: “39. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 2 and 4 for AY 2014 are also similar to AY 20 AY 2014-15, the stand Dismissed.” 7. In assessment year 2017 the ground challenging the validity of the addition on the basis of no incriminating material. The relevant finding is reproduced as under: “46. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 2 and 4 for AY 2014 are also similar to AY AY 2014-15, the ground no. 1, 2 and 4 raised by the appellant stand DISMISSED. 8. In view of the above 2014-15, the relevant gro are allowed in favour of the assessee. 9. In the result, all the three appeals of the assessee are allowed. Order pronounced in the Sd/ (NARENDER KUMAR CHOUDHRY JUDICIAL MEMBER Mumbai; Dated: 30/10/2025 Rahul Sharma, Sr. P.S. Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 In the assessment year 2016-17 also the Ld. CIT(A) has the relevant ground as under: 39. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 2 and 4 for AY 2014-15. The facts for the year under consideration are also similar to AY 2014-15. Therefore, following my findings for 15, the ground no. 1, 2 and 4 raised by stand Dismissed.” In assessment year 2017-18 also the Ld. CIT(A) has decided the ground challenging the validity of the addition on the basis of incriminating material. The relevant finding is reproduced as 46. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 2 and 4 for AY 2014-15. The facts for the year under are also similar to AY 2014-15. Therefore, following my findings for 15, the ground no. 1, 2 and 4 raised by the appellant DISMISSED.” In view of the above, following our finding in assessment years the relevant grounds raised in AY 2016-17 and 2017 are allowed in favour of the assessee. In the result, all the three appeals of the assessee are allowed. ced in the open Court on 30/10 Sd/- Sd/ (NARENDER KUMAR CHOUDHRY) (OM PRAKASH KANT MEMBER ACCOUNTANT MEMBER Bhadresh Mansukhlal Dodhia HUF 29 IT(SS)A No. 117 to 119/MUM/2025 17 also the Ld. CIT(A) has 39. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 15. The facts for the year under consideration 15. Therefore, following my findings for the appellant 18 also the Ld. CIT(A) has decided the ground challenging the validity of the addition on the basis of incriminating material. The relevant finding is reproduced as 46. For the year under consideration, the appellant had raised technical grounds no. 1, 2 and 4 which are identical to ground no. 1, 15. The facts for the year under consideration 15. Therefore, following my findings for 15, the ground no. 1, 2 and 4 raised by the appellant ing in assessment years 17 and 2017-18 In the result, all the three appeals of the assessee are allowed. /10/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Bhadresh Mansukhlal Dodhia HUF IT(SS)A No. 117 to 119/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Bhadresh Mansukhlal Dodhia HUF 30 IT(SS)A No. 117 to 119/MUM/2025 BY ORDER, Registrar) ITAT, Mumbai Printed from counselvise.com "