CHANDRIKA MANSUKHLAL DODHIA,BHIWANDI V. DCIT-CC-3, THANE, THANE

ITSSA 199/MUM/2025

AI Insights

The case involves Chandrika Mansukhlal Dodhia, the appellant, who contested the addition of Rs. 1,00,00,000 to her income as unexplained cash credits from unsecured loans received from M/s Vinam Finance Pvt. Ltd. The addition was initially made by the Assessing Officer under section 143(3) read with section 153A of the Income Tax Act, following a search and seizure operation. The appellant argued that the loans were genuine and had been repaid before the date of the search, and that all necessary documentary evidence was provided to prove the identity and creditworthiness of the lender. The Commissioner of Income Tax (Appeals) upheld the addition, leading to the appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 112145 (ITAT-MUMBAI)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Other Referred Cases: PCIT vs. Abhisar Buildwell Pvt. Ltd., Kabul Chawla case
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R.A. DHYANI
• Assessee Lawyers: SIMRAN DHAWAN
• Keywords: Set aside; Unexplained cash credit; Retraction; Principle of natural justice; Search and seizure; Accommodation entries; Block assessment
• Section: 143(3); 143(2); 271(1)(c); 132; 153A; 68; 234B; 158B(b)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAHUL CHAUDHARY (JUDICIAL MEMBER) IT(SS)A 199/MUM/2025 Assessment Year: 2016-17 Chandrika Mansukhlal Dodhia, House No. 104, Dodhia House, New Mavji Compound Narpoli, Maharashtra-421302. Vs. DCIT-CC-3, Room No. 12, A Wing, 6th floor, Ashar IT Park, Thane West, Thane-400604. PAN NO. AAPPD 8904 K Appellant Respondent Assessee by : Ms. Simran Dhawan Revenue by : Mr. R.A. Dhyani, CIT-DR Date of Hearing : 01/04/2025 Date of pronouncement : 15/04/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 27.12.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – Pune [in short ‘the Ld. CIT(A)’] for assessment year 2016-17, raising following 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 1,00,00,000/- u/s 68 r.w.s. 115BBE of the Act made by the Ld. Assessing Officer in the assessment order passed u/s 143(3) r.w.s 153A of the Income Tax Act dated 28.09.2021 on account of unsecured loans received by the appellant of from M/s Vinam Finance Pvt. Ltd which were treated as unexplained cash credits though the appellant had duly discharged it 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 in upholding the addition of Rs 1,00,00,000/ that the 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. in upholding the addition of Rs 1,00,00,000/ unsecured loans without there being any evidence of cash paid at the time of receipt of alleged non without there being any evidence of cash received at the time of repayment of alleged non Vinam Finance Pvt. Ltd. 4. On the facts and in the circumstances of the ap and in law, the Ld. in upholding the addition of Rs. 1,00,00,000/ above-mentioned companies as paper /shell/non even though the company was MCA Active both at the time 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 1,00,00,000/ that the assessment for AY 2016 assessment or reassessment was pending as on the date of search that could be abated particularly in view of the fact no incriminating material was found during the course of search & 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 Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 115BBE of the Act made by the Ld. Assessing Officer in the order passed u/s 143(3) r.w.s 153A of the Income Tax Act dated 28.09.2021 on account of unsecured loans received by the appellant of from M/s Vinam Finance 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 1,00,00,000/- 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 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 1,00,00,000/- on account of unsecured loans without there being any evidence of cash paid of receipt of alleged non-genuine unsecured loans and without there being any evidence of cash received at the time of repayment of alleged non-genuine unsecured loans from / to M/s Vinam Finance 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. 1,00,00,000/- by holding the mentioned companies as paper /shell/non-genuine entity even though the company was MCA Active both at the time taking of such loans/and at the time of repayment of the loans. 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 1,00,00,000/- despite the fac that the assessment for AY 2016-17 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 incriminating material was found during the course of search & e 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 Chandrika Mansukhlal Dodhia 2 IT(SS)A 199/MUM/2025 115BBE of the Act made by the Ld. Assessing Officer in the order passed u/s 143(3) r.w.s 153A of the Income Tax Act dated 28.09.2021 on account of unsecured loans received by the appellant of from M/s Vinam Finance Pvt. Ltd which were treated as unexplained cash credits though the s onus under section 68, by submitting all the relevant documentary evidences to prove identity and creditworthiness of the lender company and 2. On the facts and in the circumstances of the appellant's case Ld Commissioner of Income Tax (Appeals) erred 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 the facts and in the circumstances of the appellant's case Commissioner of Income Tax (Appeals) erred on account of unsecured loans without there being any evidence of cash paid genuine unsecured loans and without there being any evidence of cash received at the time of genuine unsecured loans from / to M/s pellant's case Commissioner of Income Tax (Appeals) erred by holding the 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. On the facts and in the circumstances of the appellant's case and in law, the Ld Commissioner of Income Tax (Appeals) erred despite the fact 17 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 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 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 upholding the addition of Rs 1,00,00,000/ that the Assessing Officer relied on the retracted statements of Shri Bhavik Jhakaria, Shri Minesh Dodhia, Shri Pradeep Dodhia and Shri Bhadresh Dwodhia. 8. On the facts and in the circumstances of the appellant's case and in law, the Ld. 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 (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. 9. On the facts and in the circumstances of the appellant's case and in law, the Ld. in upholding the unaccounted assets in the form of cash, jewellery or stock were found. 10. On the facts and in the circumstances of the appellant's case and in law, the Ld. in upholding the levy of interest u/s Tax Act, 1961. 11. On the facts and in the circumstances of the appellant's case and in law, the Ld. in upholding the initiation of penalty u/s 271(1)(c) of the Tax Act, 1961. 12. The appellant craves leave to add to, alter, amend, modify and /or delete all or any of the foregoing grounds Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 received from other sources and without making any enquiries on 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 upholding the addition of Rs 1,00,00,000/- despite t that the Assessing Officer relied on the retracted statements of Shri Bhavik Jhakaria, Shri Minesh Dodhia, Shri Pradeep Dodhia and Shri Bhadresh Dwodhia. 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 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 supplying the appellant with materials collected at its supplying copies of all relevant statements of third parties, supplying copies of reports of Investigation and affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the ellant, despite specific request made by the appellant in response to show cause notice filed by the Appellant. 9. 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 1,00,00,000/- even though no unaccounted assets in the form of cash, jewellery or stock were 10. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred g the levy of interest u/s 234B & 234C of the Income Tax Act, 1961. 11. 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 initiation of penalty u/s 271(1)(c) of the Tax Act, 1961. 12. The appellant craves leave to add to, alter, amend, modify and /or delete all or any of the foregoing grounds of appeal. Chandrika Mansukhlal Dodhia 3 IT(SS)A 199/MUM/2025 received from other sources and without making any enquiries on 7. On the facts and in the circumstances of the appellant's case and in law, the Ld Commissioner of Income Tax (Appeals) erred despite the fact that the Assessing Officer relied on the retracted statements of Shri Bhavik Jhakaria, Shri Minesh Dodhia, Shri Pradeep Dodhia 8. On the facts and in the circumstances of the appellant's case ner 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 supplying the appellant with materials collected at its back, supplying copies of all relevant statements of third parties, affording opportunity to cross examine the third parties whose statement was relied upon to draw inference against the ellant, despite specific request made by the appellant in 9. On the facts and in the circumstances of the appellant's case Commissioner of Income Tax (Appeals) erred even though no unaccounted assets in the form of cash, jewellery or stock were 10. On the facts and in the circumstances of the appellant's case Commissioner of Income Tax (Appeals) erred 234B & 234C of the Income 11. On the facts and in the circumstances of the appellant's case Commissioner of Income Tax (Appeals) erred in upholding the initiation of penalty u/s 271(1)(c) of the Income 12. The appellant craves leave to add to, alter, amend, modify appeal. 2. Briefly stated facts of the case are that assessee is an individual and filed her return of income for th under consideration on 15.10.2016 declaring total income at Rs.10,22,160/-. Subsequently, a search and seizure operation u/s 132 of the Income-tax Act, 1961 (in short ‘the Act’) was carried out on the premises of the Dodhia group of cases premises of the assessee on 27.11.2019. Consequently, notice u/s 153A of the Act was issued for the year under consideration asking the assessee to file return of income. In response, the assessee filed return of income on 28.01.2021 declari Rs.10,22,160/-, i.e. the income return of the income. Subsequently, statutory notices under the Act were issued and the assessee was asked to justify why the unsecured loan of Rs.1 crores received from Ltd. be treated as unexplained cash credit in terms of section 68 of the Act. In view of no response on the part of the assessee, the Assessing Officer treated the unsecured loan of Rs. 1 crores received from Vinam Finance Pvt. Ltd. as u terms of section 68 of the Act vide his order u/s 153A of the Act dated 25.09.2021. 3. On further appeal, the assessee challenged the proceedings for the year under consideration on the ground that no incriminating material was found or seized from the premises of the assessee qua Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 Briefly stated facts of the case are that assessee is an individual and filed her return of income for the assessment year under consideration on 15.10.2016 declaring total income at . Subsequently, a search and seizure operation u/s tax Act, 1961 (in short ‘the Act’) was carried out on the premises of the Dodhia group of cases premises of the assessee on 27.11.2019. Consequently, notice u/s 153A of the Act was issued for the year under consideration asking the assessee to file return of income. In response, the assessee filed return of income on 28.01.2021 declaring total income , i.e. the income which was declared in the original return of the income. Subsequently, statutory notices under the Act were issued and the assessee was asked to justify why the unsecured loan of Rs.1 crores received from Vinam Finance Pvt. Ltd. be treated as unexplained cash credit in terms of section 68 of the Act. In view of no response on the part of the assessee, the Assessing Officer treated the unsecured loan of Rs. 1 crores received from Vinam Finance Pvt. Ltd. as unexplained cash credit in terms of section 68 of the Act vide his order u/s 153A of the Act On further appeal, the assessee challenged the proceedings for the year under consideration on the ground that no incriminating ound or seized from the premises of the assessee qua Chandrika Mansukhlal Dodhia 4 IT(SS)A 199/MUM/2025 Briefly stated facts of the case are that assessee is an e assessment year under consideration on 15.10.2016 declaring total income at . Subsequently, a search and seizure operation u/s tax Act, 1961 (in short ‘the Act’) was carried out on the premises of the Dodhia group of cases including the premises of the assessee on 27.11.2019. Consequently, notice u/s 153A of the Act was issued for the year under consideration asking the assessee to file return of income. In response, the assessee filed ng total income at which was declared in the original return of the income. Subsequently, statutory notices under the Act were issued and the assessee was asked to justify why the Vinam Finance Pvt. Ltd. be treated as unexplained cash credit in terms of section 68 of the Act. In view of no response on the part of the assessee, the Assessing Officer treated the unsecured loan of Rs. 1 crores nexplained cash credit in terms of section 68 of the Act vide his order u/s 153A of the Act On further appeal, the assessee challenged the proceedings for the year under consideration on the ground that no incriminating ound or seized from the premises of the assessee qua the year under consideration. The said legal ground has been adjudicated by the Ld. CIT(A) observing as under: 8. For the year under consideration, the appellant had raised a technical ground (ground no. been made by the AO in the absence of any incriminating material found during the search appellant has submitted that in the assessment order, the AO has not referred to any incriminating appellant has received any accommodation entry during the year under consideration. The appellant has further argued that it is a well-settled legal position that while completing the assessment u/s. 153A of the Act, the AO ca incriminating material was found during the search. Since the present case falls in the category of unabated assessment, the AO could not have made any addition while completing the assessment u/s. 153A of the Act. In this conn appellant has relied on the decision of Hon'ble Supreme Court in the case of PCIT vs. Abhisar Buildwe 399 (SC). Findings 9. I have considered the facts of the case and the submissions made by the appellant. It is seen t operation, the residence of one of the directors of M/s. Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s. 132 of the Act and the statement of another director Shri Bhavik Jakharia was recorded and it was found that t were dummy directors. Although, the statement of Shri Minesh Dhodia as well as Shri Bhavik Jhkharia has not been reproduced in the assessment order but it is seen that many other entities of Dodhia group had received accommodation entries from Vinam Finance and the AO has reproduced these statements in relevant assessment orders. One of such assessment orders was issued in the case of M/s Dodhia Chemtax Private Limited (AY 2016-17) wherein the AO has extensively discussed the findings of search w.r.t. accommodation entries received from M/s Vinam Finance Pvt Limited. 10. The statement of Shri Minesh Dhodia and Shri Bhavik Jhkharia clearly suggest that they were dummy directors and did not have any knowledge about the company. Furthermore, the said company was earlier managed by Shri Sushil Goel, a known accommodation entry operator and the shares of M/s. Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 the year under consideration. The said legal ground has been adjudicated by the Ld. CIT(A) observing as under: 8. For the year under consideration, the appellant had raised a technical ground (ground no. 1 and 3) that no addition could have been made by the AO in the absence of any incriminating material found during the search operation. In this regard, the appellant has submitted that in the assessment order, the AO has not referred to any incriminating material suggesting that the appellant has received any accommodation entry during the year consideration. The appellant has further argued that it is a settled legal position that while completing the assessment u/s. 153A of the Act, the AO cannot make any addition if no incriminating material was found during the search. Since the present case falls in the category of unabated assessment, the AO could not have made any addition while completing the assessment u/s. 153A of the Act. In this conn appellant has relied on the decision of Hon'ble Supreme Court in se of PCIT vs. Abhisar Buildwe (P) Ltd. 149 taxmann.com 9. I have considered the facts of the case and the submissions made by the appellant. It is seen that during the search operation, the residence of one of the directors of M/s. Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s. 132 of the Act and the statement of another director Shri Bhavik Jakharia was recorded and it was found that these persons were dummy directors. Although, the statement of Shri Minesh Dhodia as well as Shri Bhavik Jhkharia has not been reproduced in the assessment order but it is seen that many other entities of Dodhia group had received accommodation entries from Vinam Finance and the AO has reproduced these statements in relevant assessment orders. One of such assessment orders was issued in the case of M/s Dodhia Chemtax Private Limited (AY 17) wherein the AO has extensively discussed the findings arch w.r.t. accommodation entries received from M/s Vinam Finance Pvt Limited. 10. The statement of Shri Minesh Dhodia and Shri Bhavik Jhkharia clearly suggest that they were dummy directors and did not have any knowledge about the company. Furthermore, e said company was earlier managed by Shri Sushil Goel, a known accommodation entry operator and the shares of M/s. Chandrika Mansukhlal Dodhia 5 IT(SS)A 199/MUM/2025 the year under consideration. The said legal ground has been 8. For the year under consideration, the appellant had raised a 1 and 3) that no addition could have been made by the AO in the absence of any incriminating operation. In this regard, the appellant has submitted that in the assessment order, the AO material suggesting that the appellant has received any accommodation entry during the year consideration. The appellant has further argued that it is a settled legal position that while completing the assessment nnot make any addition if no incriminating material was found during the search. Since the present case falls in the category of unabated assessment, the AO could not have made any addition while completing the assessment u/s. 153A of the Act. In this connection, the appellant has relied on the decision of Hon'ble Supreme Court in (P) Ltd. 149 taxmann.com 9. I have considered the facts of the case and the submissions hat during the search operation, the residence of one of the directors of M/s. Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s. 132 of the Act and the statement of another director Shri Bhavik hese persons were dummy directors. Although, the statement of Shri Minesh Dhodia as well as Shri Bhavik Jhkharia has not been reproduced in the assessment order but it is seen that many other entities of Dodhia group had received accommodation entries from M/s Vinam Finance and the AO has reproduced these statements in relevant assessment orders. One of such assessment orders was issued in the case of M/s Dodhia Chemtax Private Limited (AY 17) wherein the AO has extensively discussed the findings arch w.r.t. accommodation entries received from M/s Vinam 10. The statement of Shri Minesh Dhodia and Shri Bhavik Jhkharia clearly suggest that they were dummy directors and did not have any knowledge about the company. Furthermore, e said company was earlier managed by Shri Sushil Goel, a known accommodation entry operator and the shares of M/s. Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The statement of Shri Bhadresh Dhodia was also recorded 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 re Bhadresh Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. 11. The above discussion clearly suggests that incriminating material regarding the accommodation entries was found during the search and therefore the contention of the appellant that no incriminating material was found during the search is incorrect. Accordingly, the ground no. 1 and 3 raised by the appellant are 4. Further, the Ld. CIT(A) also rejected the contention of the assessee on the merit. The Ld. CIT(A) also rejected the contention of non-providing of the cross providing accommodation entry to the assessee. The Ld. CIT( rejected the contention of retraction of statement Jhkharia, Shri Minesh Dhodia and Shri Bhadresh Dhodia. The Ld. CIT(A) recorded that one of the director of M/s Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s 132 and his statement was recorded director Bhavik Jhkharia was also referred and it was found that those persons were dummy directors. The Ld. CIT(A) noted that the said company was also managed by Shri Sushil Goel a k accommodation entry operator and the shares of M/s Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The Ld. CIT(A) further referred to Bhadresh Dhodia, which Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The statement of Shri Bhadresh Dhodia was also recorded u/s. 132(4) of the Act wherein 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. The above discussion clearly suggests that incriminating material regarding the accommodation entries was found during the search and therefore the contention of the appellant that no incriminating material was found during the search is incorrect. Accordingly, the ground no. 1 and 3 raised by the are DISMISSED.” Further, the Ld. CIT(A) also rejected the contention of the assessee on the merit. The Ld. CIT(A) also rejected the contention of providing of the cross-examination of the person who stated of providing accommodation entry to the assessee. The Ld. CIT( rejected the contention of retraction of statement nesh Dhodia and Shri Bhadresh Dhodia. The Ld. CIT(A) recorded that one of the director of M/s Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s 132 and his statement was recorded. Further statement of another director Bhavik Jhkharia was also referred and it was found that dummy directors. The Ld. CIT(A) noted that the said company was also managed by Shri Sushil Goel a k accommodation entry operator and the shares of M/s Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The Ld. CIT(A) further referred to statement of , which was also recorded u/s 132(4) of the Act Chandrika Mansukhlal Dodhia 6 IT(SS)A 199/MUM/2025 Vinam Finance were acquired by Dodhia Group from the accommodation entry operators. The statement of Shri Bhadresh u/s. 132(4) of the Act wherein 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. ply to question no. 72, Shri Bhadresh Dodhia accepted that amount of Rs.43 crores The above discussion clearly suggests that incriminating material regarding the accommodation entries was found during the search and therefore the contention of the appellant that no incriminating material was found during the search is incorrect. Accordingly, the ground no. 1 and 3 raised by the Further, the Ld. CIT(A) also rejected the contention of the assessee on the merit. The Ld. CIT(A) also rejected the contention of examination of the person who stated of providing accommodation entry to the assessee. The Ld. CIT(A) also rejected the contention of retraction of statement by Shri Bhavik nesh Dhodia and Shri Bhadresh Dhodia. The Ld. CIT(A) recorded that one of the director of M/s Vinam Finance Pvt. Ltd. namely Shri Minesh Dhodia was covered u/s 132 of the Act urther statement of another director Bhavik Jhkharia was also referred and it was found that dummy directors. The Ld. CIT(A) noted that the said company was also managed by Shri Sushil Goel a known accommodation entry operator and the shares of M/s Vinam Finance were acquired by Dodhia Group from the accommodation statement of Shri was also recorded u/s 132(4) of the Act wherein in reply to question No. 70, he accepted that Dodhia group was having availability of cash routed to the books of accounts of various entities, through M/s Vinam Finance Pvt. Ltd. In reply to question No. 72, Shri Bha Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. 5. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 56 and also decisions relied upon. 5.1 Before us, the Ld. counsel for the assessee first of all referred to the ground No. 5 of the appeal and submitted that no incriminating material was found from the premises of the assessee qua the assessment year under consideration. The Ld. counsel submitted that the Assessing Officer and the Ld. CIT(A) has sustained the addition of the unsecured loan merely on the basis of statement of three person Bhadresh Dodhia and Shri also have not been recorded from the premises of the assessee and therefore, neither any incriminating material found from the premises of the assessee nor any statement of the Act has been recorded in relation to allegation of the accommodation entry of loan received from the Vinam Finance Pvt. Ltd. The Ld. counsel therefore accordingly relied on the decision of the Hon’ble Supreme Court in the case of PCIT v. Abhisar Builwell Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 wherein in reply to question No. 70, he accepted that Dodhia group availability of cash from various sources which was books of accounts of various entities, through M/s Vinam Finance Pvt. Ltd. In reply to question No. 72, Shri Bha Dodhia accepted that amount of Rs.43 crores approximately was routed through the said company. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 56 and also a compilation of the legal decisions relied upon. Before us, the Ld. counsel for the assessee first of all referred to the ground No. 5 of the appeal and submitted that no incriminating material was found from the premises of the assessee qua the assessment year under consideration. The Ld. counsel tted that the Assessing Officer and the Ld. CIT(A) has sustained the addition of the unsecured loan merely on the basis of statement of three persons namely Shri Minesh Dhodia, Shri Bhadresh Dodhia and Shri Bhavik Jhakharia. These statements been recorded from the premises of the assessee and therefore, neither any incriminating material found from the premises of the assessee nor any statement of assessee has been recorded in relation to allegation of the ntry of loan received from the Vinam Finance Pvt. Ltd. The Ld. counsel therefore accordingly relied on the decision of the Hon’ble Supreme Court in the case of PCIT v. Abhisar Builwell Chandrika Mansukhlal Dodhia 7 IT(SS)A 199/MUM/2025 wherein in reply to question No. 70, he accepted that Dodhia group from various sources which was 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 Before us, the Ld. counsel for the assessee filed a Paper Book compilation of the legal Before us, the Ld. counsel for the assessee first of all referred to the ground No. 5 of the appeal and submitted that no incriminating material was found from the premises of the assessee qua the assessment year under consideration. The Ld. counsel tted that the Assessing Officer and the Ld. CIT(A) has sustained the addition of the unsecured loan merely on the basis of namely Shri Minesh Dhodia, Shri . These statements been recorded from the premises of the assessee and therefore, neither any incriminating material found from the of assessee u/s 132(4) has been recorded in relation to allegation of the ntry of loan received from the Vinam Finance Pvt. Ltd. The Ld. counsel therefore accordingly relied on the decision of the Hon’ble Supreme Court in the case of PCIT v. Abhisar Builwell Pvt. Ltd. 149 taxmann.com 399 (SC) and submitted that no addition can be made qua the year under consideration in respect of unexplained cash credit in absence of any incriminating material found. 6. We have heard rival submissions of the parties and perused the relevant materials on record the case of Kabul Chawla case of unabated assessments, no additions could have been made without the aid of the incriminating material. In the case of the assessee search was conducted on 27.11.2019. T of income in the case 15.10.2016 and therefore, notice u/s 1 of the case could have such notice was issued therefore, limitation for issue 143(2) of the Act had search, hence there was no pendency of the scrutiny assessment the date of search. Therefore, the assessment year is in the category of the unabated assessment. The rati (supra) has been upheld in the case of Abhisar Buildwell Pvt. Ltd. (supra) therefore, in the unabated assessment year only addition could be made on the basis of incriminating material found from the premises of the assessee. addition of Rs. 1 crores has been made in respect of unsecured loan of Rs. 1 crores received from M/s Vinam Finance Pvt. Ltd. The lower Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 Pvt. Ltd. 149 taxmann.com 399 (SC) and submitted that no e made qua the year under consideration in respect of unexplained cash credit in absence of any incriminating material We have heard rival submissions of the parties and perused the relevant materials on record. The Hon’ble Delhi High Court in he case of Kabul Chawla [2016] 380 ITR 573 (Delhi) case of unabated assessments, no additions could have been made without the aid of the incriminating material. In the case of the ch was conducted on 27.11.2019. The original retu of income in the case for year under consideration was 15.10.2016 and therefore, notice u/s 143(2) of the Act of the case could have been issued up to 30.09.2017 and since no such notice was issued therefore, limitation for issue Act had already expired before the date of search, hence there was no pendency of the scrutiny assessment herefore, the assessment year is in the category of the unabated assessment. The ratio in the case of Kabul Chawla upheld in the case of Abhisar Buildwell Pvt. Ltd. (supra) therefore, in the unabated assessment year only addition could be made on the basis of incriminating material found from the premises of the assessee. In the case of the assessee, the addition of Rs. 1 crores has been made in respect of unsecured loan of Rs. 1 crores received from M/s Vinam Finance Pvt. Ltd. The lower Chandrika Mansukhlal Dodhia 8 IT(SS)A 199/MUM/2025 Pvt. Ltd. 149 taxmann.com 399 (SC) and submitted that no e made qua the year under consideration in respect of unexplained cash credit in absence of any incriminating material We have heard rival submissions of the parties and perused . The Hon’ble Delhi High Court in [2016] 380 ITR 573 (Delhi) held that in case of unabated assessments, no additions could have been made without the aid of the incriminating material. In the case of the he original return for year under consideration was filed on ) of the Act for selection issued up to 30.09.2017 and since no such notice was issued therefore, limitation for issue of notice u/s already expired before the date of execution of search, hence there was no pendency of the scrutiny assessment on herefore, the assessment year is in the category o in the case of Kabul Chawla upheld in the case of Abhisar Buildwell Pvt. Ltd. (supra) therefore, in the unabated assessment year only addition could be made on the basis of incriminating material found from In the case of the assessee, the addition of Rs. 1 crores has been made in respect of unsecured loan of Rs. 1 crores received from M/s Vinam Finance Pvt. Ltd. The lower authorities in the impugned order have only mentioned the fact of statements of Shri Mi Bhadresh Dhodia. The Ld. CIT(A) has specifically mentioned to the statement u/s 132(4) of the Act Shri Bhadresh Dhodhia justifying the addition the unsecured loan in the case of the assessee. 6.1 The Ld. Departme before us, submitted that the statement recorded u/s 132(4) of the Act referred by the Ld. CIT(A) are in the nature of the incriminating material and therefore, the addition in the hands of the assessee should have been sustained. However, it is evident that there is no reference of any incriminating material or documents either from the premises of the assessee or from any other premises covered under the search in relation to addition of the unsecured loan except the statement of three persons which have been referred by the Ld. CIT(A) but the Hon’ble Delhi High Court in the case of v. Harjeev Agarwal in ITA No. recorded u/s 134(4) could not material unless corroborated by any incriminating evidence found The relevant finding of the Hon’ble High Court (supra) id reproduced as under: 20. In our view, a plain reading of 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 Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 authorities in the impugned order have only mentioned the fact of statements of Shri Minesh Dodhia, Shri Bhavik Jhkharia and Shri Bhadresh Dhodia. The Ld. CIT(A) has specifically mentioned to the statement u/s 132(4) of the Act Shri Bhadresh Dhodhia justifying the addition the unsecured loan in the case of the assessee. The Ld. Departmental Representative (DR) on the other hand before us, submitted that the statement recorded u/s 132(4) of the Act referred by the Ld. CIT(A) are in the nature of the incriminating material and therefore, the addition in the hands of the assessee e been sustained. However, it is evident that there is no reference of any incriminating material or documents either from the premises of the assessee or from any other premises covered under the search in relation to addition of the unsecured loan the statement of three persons which have been referred by the Ld. CIT(A) but the Hon’ble Delhi High Court in the case of Agarwal in ITA No. 8/20004 have held that statement u/s 134(4) could not be considered as unless corroborated by any incriminating evidence found The relevant finding of the Hon’ble High Court (supra) id reproduced as under: 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 seizure operations. However, the statements recorded Chandrika Mansukhlal Dodhia 9 IT(SS)A 199/MUM/2025 authorities in the impugned order have only mentioned the fact of nesh Dodhia, Shri Bhavik Jhkharia and Shri Bhadresh Dhodia. The Ld. CIT(A) has specifically mentioned to the statement u/s 132(4) of the Act Shri Bhadresh Dhodhia justifying the addition the unsecured loan in the case of the assessee. ntal Representative (DR) on the other hand before us, submitted that the statement recorded u/s 132(4) of the Act referred by the Ld. CIT(A) are in the nature of the incriminating material and therefore, the addition in the hands of the assessee e been sustained. However, it is evident that there is no reference of any incriminating material or documents either from the premises of the assessee or from any other premises covered under the search in relation to addition of the unsecured loan the statement of three persons which have been referred by the Ld. CIT(A) but the Hon’ble Delhi High Court in the case of PCIT have held that statement ed as incriminating unless corroborated by any incriminating evidence found. The relevant finding of the Hon’ble High Court (supra) id 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 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 mandated by virtue of the explanation to However, such statements on a standalone basis without reference to any other material discovered during search and seizure 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 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) 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 re 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 undertaken. the provisions of Section 132(4) of Section 158BB(1) clear that a statement recorded under used in evidence for making a block assessment only if the said statement is made in 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 u income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under 132(4) of the Act may also be used for making the assess to the extent it is relatable to the unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 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 mandated by virtue of the explanation to Section 132(4) However, such statements on a standalone basis without reference to any other material discovered during search and seizure 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 t 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 Section 132 (4), which was inserted by the Direct 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 ks 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 undertaken. Section 132(4) of the Act are read in the context 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 u income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under of the Act may also be used for making the assess 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 Chandrika Mansukhlal Dodhia 10 IT(SS)A 199/MUM/2025 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 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. 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 , which was inserted by the Direct 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 sult 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 ks 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 undertaken. Now, if of the Act are read in the context of the Act, it is at once of the Act can be used in evidence for making a block assessment only if the said 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 of the Act may also be used for making the assessment, but only 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 asse recorded. 6.2 In view of above discussion, we set aside the finding of the Ld. CIT(A) on the issue in dispute and hold that no addition in respect of unsecured loan of Rs. 1 crores could be made in the hands of the assessee without aid of premises of the assessee assessee is accordingly allowed. 6.3 Since we have already upheld that no addition in respect of unsecured loan of Rs.1 lakh the assessee, therefore, the other grounds raised by the assessee challenging the merit of the addition are rendered merely academic and therefore, we are not required to adjudicate upon at this stage. 7. In the result, the Order pronounced in the open Court on Sd/ (RAHUL CHAUDHARY JUDICIAL MEMBER Mumbai; Dated: 15/04/2025 Rahul Sharma, Sr. P.S. Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 search in order to for an assessment to be based on the statement In view of above discussion, we set aside the finding of the Ld. CIT(A) on the issue in dispute and hold that no addition in respect of unsecured loan of Rs. 1 crores could be made in the hands of the see without aid of any incriminating material premises of the assessee. The ground No. 5 of the appeal of the assessee is accordingly allowed. Since we have already upheld that no addition in respect of unsecured loan of Rs.1 lakh could have been made in the hands of the assessee, therefore, the other grounds raised by the assessee challenging the merit of the addition are rendered merely academic and therefore, we are not required to adjudicate upon at this stage. In the result, the appeal of the assessee is allowed. nounced in the open Court on 15/04/2025. Sd/- (RAHUL CHAUDHARY) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Chandrika Mansukhlal Dodhia 11 IT(SS)A 199/MUM/2025 ssment to be based on the statement In view of above discussion, we set aside the finding of the Ld. CIT(A) on the issue in dispute and hold that no addition in respect of unsecured loan of Rs. 1 crores could be made in the hands of the found from the . The ground No. 5 of the appeal of the Since we have already upheld that no addition in respect of been made in the hands of the assessee, therefore, the other grounds raised by the assessee challenging the merit of the addition are rendered merely academic and therefore, we are not required to adjudicate upon at this stage. appeal of the assessee is allowed. /04/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Chandrika Mansukhlal Dodhia IT(SS)A 199/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Chandrika Mansukhlal Dodhia 12 IT(SS)A 199/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai "