SHRI KAMAL KUMAR NACHANI, Indore V. THE DCIT 2(1), Indore

CO 39/IND/2016

AI Insights

The case involves multiple appeals and cross-objections related to the assessments made under section 153A read with section 143(3) of the Income Tax Act, 1961, following a search operation at the premises of Shri Kamal Kumar Nachani, a member of the 'M.P. Bullion' group. The primary legal contention revolved around whether the additions made to the assessee's income were based on incriminating material found during the search. The CIT(A) had earlier ruled that the additions were not based on such material, leading to the Revenue's appeal. The Tribunal examined the validity of the CIT(A)'s decisions across different assessment years, considering the legal precedents and the specifics of the search operation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132006 (ITAT-INDORE)
• Duration Of Justice: 6 year(s) 3 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-11-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 12-10-2016
• Other Referred Cases: Anant Steel Ltd. Vs. ACIT, Kalani Bros. and others, CIT Vs. Kabul Chawla
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Loose papers; Additional evidence; Capital Gains
• Section: 68; 63; 132; 143(3); 142(1); 153A; 143(2); 153C

Judgement Text

X + IN THE INCOME TAX APPELLATE TRIBUNAL “INDORE BENCH”, INDORE ] ] BEFORE SMT. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER IT(SS)A.NO.53 &142 /Ind/2016 WITH CO NO.22 & 39 /Ind/2016 Asst.Years: 2007-08& 2008-09 AND IT(SS)A.No.144&145/Ind/2016 Asstt.Year : 2010-11&2011-12 DCIT, Ward-2(1) Indore. Vs. Shri Kamal Kumar Nachani 614, Usha Nagar Extension. Narendra Tiwari Marg Indore. PAN : AEHPN 5554 P अपीलाथ / (Appellant) यथ /(Respondent) Assessee by : Shri S. S. Deshpande, CA Revenue by : Shri P.K. Mishra, CIT-DR स ु नवाई क तार ख/Date of Hearing :24-29/11/2022 घोषणा क तार ख /Date of Pronouncement:31/01/2023 आदेश/ O R D E R PER BENCH: These are Revenue’s appeals and assessee’s cross-objection against respective orders of the ld.Commissioner of Income-tax (Appeals)-1, Indore. The details of orders of the ld.CIT(A) which are under challenge by the Revenue before us are as under: Sr.No. Asstt.Year CIT(A)’s order dated 1 2007-08 29-1-2016 against order under section 153A read with section 143(3) of the Act. 2 2008-09 18-3-2016 against order under section 153A r.w.s. 143(3) of the Act DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 2 3-4 The assessee has filed cross objections in above appeals of the Revenue. 5 2010-11 18-3-2016 against order under section 153A r.w.s. 143(3) of the Act 6 2011-12 18-3-2016 against order under section 153A r.w.s. 143(3) of the Act 2. All these appeals have arisen consequent upon search action under section 132 of the Income Tax Act, 1961 carried out at the residential premises of assessee and simultaneous survey actions at various business premises of other group concerns. The assessee belonged to the “M.P. Bullion” group of cases. Since facts and issues are inter-related, we proceed to dispose of all these appeals by way of this consolidated order for the sake of convenience. Firstly, we take up the appeal of the Revenue for Asstt.Year 2007-08 for adjudication. 3. IT(SS)A.No.53/Ind/2016 (Asst.Year 2007-08) 4. In this appeal, the Revenue has taken following grounds: (1) Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law by deleting the additions holding that these additions have not been made on the basis of incriminating materials or documents found during Search action. (2) Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in interpreting section 153A of the I. T. Act. (3) Whether on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law in not appreciating the Circular No. 7 of 2003 dated: 05.09.2003 issued by the CBDT. (4) Whether on the facts and in the circumstances of the case, the Ld. CIT (A) erred in law by not appreciating the fact that there is no precondition for initiation as well as assessment/reassessment u/s 153A of the Act, the documents pertaining to each of the assessment year falling under provisions of section 153A/153C should be found. DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 3 5. Though the Revenue has taken four grounds, but sole issue involved in this appeal is against order of the ld.CIT(A) in invalidating assessment framed under section 143(3) read with section 153A of the Income Tax Act, 1961. 6. Brief facts of the case is this that, in a search action under section 132A of the Act, certain loose papers/documents were seized from the premises. Thereafter, notice under section 153A was issued and the return of income in response thereto was filed. Further, in response to the notices under section 143(2) and 142(1) of the Act details and replies were filed from time to time. After considering the same, the ld.AO framed assessment under section 143(3) read with section 153A of the Act. This order of the AO was challenged by the assessee before the ld.CT(A) by stating that the additions/disallowances made by the AO in the assessment order, were not as a consequence of the incriminating material found during the search. Further, most of the additions were of regular nature, and all the details thereof were available in the record of the Department during the assessment framed under section 143(3) of the Act; that the assessment for Asstt.Year 2007-08 was completed under section 143(3) on 18.3.2009 and time limit for issuance of notice under section143(2)/142(1) had already expired; that in the absence of any incriminating material found during the course of the search, no addition can be made; that all the details were already filed alongwith returns; that the assessment was not abated, and therefore, without finding any incriminating material, no addition could be made. The assessee further contended that scope of assessment under section 153A would be restricted to incriminating material found during the course of search; that since regular assessment proceedings have been completed and were not pending DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 4 there would be no abatement of proceedings, and hence, the additions/disallowance in consequence thereof would be bad in law. The assessee further contended that relevant details and disclosure were properly recorded in the books of accounts prior to the date of search, and hence the AO was not justified in making additions to the income of the assessee in the completed/concluded assessment. The Return for AY 2007-08 was originally filed on 2.11.2007 and the order under section 143(3) was passed on 18.3.2009, which was prior to the date search, and therefore, the assessment stood concluded as on 18.3.2009, and therefore, no addition could be made in an assessment framed under section 143(3) r.w.s. 153A of the Act without there being any incriminating material. The assessee relied on the decision of the ITAT, Indore Bench in the case of Anant Steel Ltd. Vs. ACIT, ITA No.133/Ind/2013 order dated 30.11.2015 and Kalani Bros. and others in IT(SS)A.No.71/Ind/2014 for the proposition that in the absence of any incriminating material found and seized during the course of search, the AO was not justified in making addition in non-abated assessment order while passing the order under section 143(3) read with section 153A of the Act. The assessee contended that the details and information furnished by the assessee in 153A proceedings were already dealt in the regular assessment and therefore, the AO could not proceed to make the impugned assessment without there being any incriminating material. The assessee also relied on the judgment of Hon’ble Delhi High Court in the case of Kabul Chawla for the proposition of law that completed assessments can be interfered with by AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 5 or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. The assessee has also relied on large number case laws, which have been mentioned by the ld.CIT(A) in his impugned at page no.20 and 21 to support its case that since on the date of search, the regular assessment stood completed, and no incriminating material was unearthed there could not be any addition/ disallowance made to the income which was already assessed. The ld.CIT(A) after considering the order of the AO and submissions of the assessee and in the light various judgment cited by the assessee, including the decision of ITAT, Indore Bench in the case of M/s.Anant Steel P. Ltd. (supra) and Hon’ble Delhi High Court in the case of CIT Vs.Kabul Chawla (supra) held that when no incriminating material found during the search related to the issues, no addition can be made in a concluded or unabated assessment. Accordingly, the ld.CIT(A) allowed the legal contention of the assessee the impugned assessment order under section 143(3) r.w.s. 153A was bad in law, and hence invalid. 7. On being aggrieved by order of the ld.CIT(A),the Revenue is now in appeal before the Tribunal. 8. Before us, the ld.DR while supporting order of the AO prayed for setting aside the order of the ld.CIT(A) as the contentions of the assessee were baseless. The ld.counsel for the assessee, on the other hand supported order of the ld.CIT(A) and submitted that the ld.CIT(A) has thoroughly examined the issue in the light of various judgments, and therefore, the impugned order requires to be upheld. DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 6 9. We have heard contention of both the parties; gone through the orders of authorities below and various case laws cited and considered by the ld.CIT(A) during the appellate proceedings. It is not in dispute that the impugned assessment year was unabated as the assessment was completed prior to the impugned search action. This factual finding of the ld.CIT(A) has not been either disputed or contested by the Revenue even before us also. In a completed assessment, law on this issue is very clear that in order to make an addition under section 153A of the Act there must be incriminating material available to the AO during the course of search. In other words, unless there is an incriminating, the concluded/unabated assessment cannot be disturbed. The ld.CIT(A) examined and anlysised in the light of the order of the Act and submissions of the assessee made before both the authorities below, and held that the impugned assessment year is a completed assessment year, and no incriminating material was found during the course, which were relatable to the issues already considered in the completed assessment order. In support of his holding so, he relied on the decision of ITAT, Indore Bench in the case of M/s. Anant Steel Pvt.Ltd. in IT(SS)A.No.31,28, 29 & 30/Ind/2010 order dated 18.11.2015. Further, in the case of CIT Vs. Kabul Chawla (supra), Hon’ble Delhi High Court held that a completed assessment can be interfered with by the AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search, which were not produced or not already disclosed or made known in the course of original assessment. Therefore, we are of the view that the ld.CIT(A) has correctly analysed the issue from legal angle and held the assessment framed under section 153A read with section 143(3) to DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 7 be bad in law and consequential additions also not sustainable in the light of the judgments cited on the issue, and therefore our interference does not call for on this issue. The grounds of appeal of the Revenue are rejected. 10. In the result, the appeal of the Revenue for Asstt.Year 2007-08 is dismissed. 11. IT(SS)A.No.142/Ind/2016 (Asstt.Year 2008-09): 12. The grounds in this appeal are as under: “(1) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law by deleting the additions holding that these additions have not been made on the basis of incriminating materials or documents found during Search action u/s 132 of the I. T. Act. (2) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) erred in interpreting section 153A of the I. T. Act. (3) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) erred in law by allowing the appeal of the assessee in not appreciating the Circular No. 7 of 2003 dated: 05.09.2003 issued by the CBDT, New Delhi. (4) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) erred in law by not appreciating the fact that there is no precondition for initiation as well as assessment/reassessment u/s 153A of the Act, that documents pertaining to each of the assessment year falling under provisions of section 153A/153C should be found. (5) Whether in the facts and in the circumstances of the case the Ld. CIT (A) erred in law by deleting the addition amounting to Rs. 25,00,000/- which was made on protective basis in hands of the assessee without appreciating the entire facts and issues involved in the case. 13. As it can be seen from the above the ground no.1 to 4 are similar to the grounds raised in the Asstt.Year 2007-08. However, in this assessment year i.e. AY 2008-09, the ld.CIT(A) found that incriminating documents/material or evidences seized during the search action, as contained in a pendrive attached with Annexure- BS-1 were the basis for initiation of assessment under section 153A DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 8 and therefore, it could not be said that the assessment framed under section 153A was without sanction of law. He accordingly upheld assessment under section 153A by the AO. This being so, we do not find that the Revenue has any grievance against the order of the ld.CIT(A) by raising these grounds. Therefore, in the absence of any grievance, these grounds of the Revenue are rejected. 14. So far as protective addition of Rs.25,00,000/- is concerned, the same was made by the AO on the basis of data available in pen drive seized from premises of the M/s.C-21 Malls P.Ltd. This details contained unaccounted and accounted data of the company, in which some of the entry pertained to Asstt.Year 2008-09 being cash amount credited in name of the assessee to the tune of Rs.25,00,000/-. The assessee submitted that the impugned entries were not pertained to him, but to his father, Shri Keshav Kumar Nachani. Shri Keshav Kumar Nachani in his statement dated 27.11.2012 has also admitted that all the cash entries found in the subject pendrive with the name ‘Kamal’ apart from other names also belonged to him, and for which he also surrendered Rs.15crores as his undisclosed income towards the discrepancies found during the course of search including pen-drive and offered the same to the tax. The ld.AO disbelieved the statement of Keshav Kumar Nachani, and accordingly, the amount found credited in the name of Kamal Nachani of Rs.25.00 lakhs for the Asstt.Year 2008-09 was added on protective basis to his income. This addition was challenged before ld.CIT(A). The ld.CIT(A) after considering finding of the AO and the reply of the assessee, deleted the impugned addition on the ground that since Shri Keshav Kumar Nachani has owned up all the cash entries contained in the pen-drive, and thereafter he surrendered an amount of Rs.15 crores, and therefore there could not be any DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 9 addition in the hands of Kamal Nachani, but, he held, the same should be considered on merit in the hands of Shri Keshav Kumar Nachani. This deletion is now challenged before us. 15. After hearing both the sides, and after going through orders of the Revenue authorities, we find that similar issue has been dealt by us elaborately while deciding appeal of the Revenue in the case of Shri Keshav Kumar Nachani for A.Y.2008-09 (in ground no.10 & 11) wherein we have rejected the grounds of the Revenue. Since the issue on hand is parimateria to the issue raised by the Revenue in the case of Keshav Kumar Nachani (supra), we uphold the finding of the ld.CIT(A) on this issue, more so, when the ld.DR could not point out any distinctive feature of the present two cases. This ground of appeal of the Revenue is rejected. 16. In the result, the appeal of the Revenue is dismissed. 17. IT(SS)A.No.144/Ind/2016 (Asstt.Year 2010-11) 18. The Grounds raised this appeal are as under: “(1) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) erred in law deleting the additions made on protective basis in the hands of the assessee without appreciating the entire events and circumstances involved in this case. (2) Whether in the facts and in the circumstances of the case the Ld. CIT (A) erred in law by deleting the addition made by the AO on protective basis in hands of the assessee before deciding the issues related with addition made on substantive basis.” 19. By way of the above grounds, the Revenue challenges the action of the ld.CIT(A) in deleting protective additions of Rs.1,71,75,000/- and Rs.6,00,00,000/- DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 10 20. Briefly stated facts are that the during the course of search at the premises of M/s.C21 Malls P.Ltd. in which father of the assessee Shri Keshav Kumar Nachani was director of the company, a pen drive inventorised as Sr.No.1 of Annexure-BS1 was seized, which contained tally accounts with the name “Bhopal Hosangabad” and “bm” were found. This pen drive also contained certain DBF files, and out of which 21b/RJSNRS.DBF was some of the important files. These files were day books which contained unaccounted and accounted data of the said company viz. M/s.C21 Malls P.Ltd. Shri Keshav Kumar Nachani had confirmed that the data contained in ‘21b’ were of the said company; that there were certain credit entries found in the name of the assessee i.e. Kamal Nachani as appeared in “Bhopal Hosangabad” and ‘bm’ accounts. These entries were noticed by the AO in his impugned order at page no.3 to 5. The assessee was show-caused as to why the amounts mentioned against name of the assessee in the above accounts should not be treated as his undisclosed income. The assessee was also required to furnish the relevant ledger accounts of “Bhopal Hosangabad” project and M/s.Globus Mega Project P.Ltd. It was explained by the assessee that whatever credit/debit entries mentioned against his name were simply journal entries and no receipts/payments of actual funds were taken place, and they were simply book entries. The assessee, however, stated that the funds found credited in his accounts were all belonged to his father, Shri Keshav Kumar Nachani, and since he has owned up all the impugned transactions with regard to credit entries, the explanation thereof could only be given by the said Keshav Nachani. The assessee had also disowned whatever entries mentioned against his name in ‘bm’ accounts, as the same were owned by the said Keshav Nachani, and surrendered DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 11 a sum of Rs.15 crores as undisclosed income. However, the ld.AO did not buy this explanation of the assessee, and he maintained to hold that accounting entries mentioned in the name of the assessee were actual receipts/ payments transactions and demonstrated clear movement of funds from one hand to other. He accordingly worked out unrecorded cash debited in the cash book in the name of the assessee on the basis of entries found in ‘bm’ account of Globus Mega Projects P.Ltd. of Rs.1,71,75,000/- which he added to the income of the assessee on protective basis. Similarly, he made another addition of Rs.6,00,00,000/- on protective basis for the cash amount found credited in the name of the assessee as per entries found in ‘21b/RSJNRS.DBF’ ledger containing unrecorded cash receipts. Against both these protective additions, the assessee went in appeal before the ld.CIT(A) who deleted both the additions by the following observations: “5. Ground No.l: By this ground the appellant has challenged the validity of the assessment made u/s 153A of The Act by contending that no incriminating material / details of undisclosed income were found and hence the assessment was bad in law. Detailed submissions of the appellant on the issue are reproduced at Para No. 3 above. 5.2 Thethrust of the appellant's contention is that for theyear (2009-lOJthe return of income was originally filed and No notice u/s.143(2) of The Act was issued for the year till the time prescribed for issue of notice in a case where the return was subject matter of scrutiny. In view of the above the assessment stood concluded. The additions made in the order u/s 153A read with section 143(3) dated 28.03.2013 are not based on any incriminating material /documents/evidences found as a result of action u/s 132. The additions which have been made are on the basis of accounts and details already reflected in the original return of income filed and no incriminating material was found related to the above transactions warranting addition to the total income u/s 153A of the Income Tax Act. The transactions were properly recorded in the accounts/re turn maintained/filed prior to the date of search. Appellant placed reliance on various judicial pronouncements in support of the above legal contention including the decision of the jurisdictional ITAT in the case of Anant Steels Ltd. vs. ACIT (ITA No.l33/Ind./2013 dated 18/11/2015) and in the case of Kalani Bros. & Ors. ITA (SS) No. 71/Ind./2014 dated 06/11/2015 and the decision of the special bench of the ITAT, Mumbai in the case of All Cargo Global Logistics Ltd. vs. DCIT (20 ITJ 45) (Trib. Mumbai)(SB). DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 12 5.3 The submissions of the appellant were forwarded to the AO for submission of remand report. The AO in the remand report submitted vide letter F.No. ACIT2(l)/Ind./Remand report/14-15 dated 15.1.2015 has stated as under: "All the grounds of the assessee for the A.Y. 2006-07 as mentioned above are baseless due to the following reasons. First ground is baseless because as per provisions of section 153A assessing officer is required to "assess or reassess, the total income of six assessment years immediately preceding the assessment relevant to the previous year in which such search is conducted". The section does not talk about incnm.ina.ting material being the basis of such assessment or reassessment. Assessing officer was in full compliance of the provisions of Income Tax Act in reassessing the income of assessee in all years where he has already been assessed under section 143(3). Therefore such baseless arguments should not be entertained and should be rejected. 6. For all other grounds Assessee has not filed any additional evidences under rule 46A of the Income Tax rule. Th submission has already been filed before the assessingofficer during the original assessment proceedings, which is also accepted by the assessee in the table enclosed with written submission as received from office of the Commissioner of Income Tax (Appeal)-1, Indore. The assessment order has been passed by the Assessing Officer who had duly considered all the material placed on record and discussed in detail all the issues related to findings and additions in the assessment order. In view of such detailed discussions, I agree with the views of the Assessing Officer and rely upon the Original assessment order passed u/s 153A r.w.s. 143(3) of the IT Act for the A.Y. 2006-07 on all grounds. Assessee does not deserve any relief on any of the ground." A copy of the report was also forwarded to the appellant and the appellant in his submissions has not offered any specific comments on the report of the AO. 5.4. The material placed on record has been considered. In the case of Kalani Bros, the jurisdictional ITAT has observed as under:- "We have heard both the sides. We have also gone through the case laws relied upon by both the sides. We have also considered various relevant facts of the case. It is a settled legal position that once a search and seizure action has taken place u/s 132 of the Act or a requisition has been made u/s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/s 153A of the Act. Once notices are issued u/s 153A of, the Act then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the Assessing Officer. It is also held by various Courts that once notice u/s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessee's. Thus assessments for these assessment years DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 13 were completed on the date of search. The assessments were completed u/s 143(3) of the Act read with section 153A/153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act. There is no seized material belonging to the assessee which was found and seized in relation to additions made. In a recent decision, Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has held that completed assessments can be interfered with by the Assessing Officer while making assessment u/s 153A of the Act, only on the basis of some incriminating material unearthed during the course of search or requisition of documents (&• undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act. Hon'ble Delhi High ' Court in the case of CIT vs. Kabul Chawla (supra) has considered various High Court decisions relied upon by the learned DR. The Hon'ble Delhi High Court has considered the cases of Canara Housing Development Co. vs. DCIT; Madugula vs. DCIT; CIT vs. Chetandas Laxmandas and CIT vs. Anil Kumar Bhatia (supra). The only decision of the Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora; 367ITR 517 relied on by the learned DR was not considered by Hon'ble Delhi High Court while deciding the issue in the case of Kabul Chawla. The Hon'ble Allahabad High Court has reversed the order of the Tribunal and remanded the issue to the Tribunal to consider the appeal of the department on merits. It is a settled legal position that when two views are possible on a particulars issue then the. view favourable to the assessee should be followed as held by the Hon'ble Apex Court in the case of CIT vs. Vegetable Products; 88 ITR 192. Respectively following the decision of the Hon'ble Apex Court, we dismiss the ground of appeals of the Revenue. Departmental appeals are disposed accordingly." 5.5 The decision in the case of Kalani Bros, has again been followed by the Hon'ble ITAT Indore Bench, Indore in the case of M/s Anant Steel Pvt. Ltd., Indore in IT(SS)A No. 31, 28, 29&30/Ind/2010 vide order dated 18.11.2015. The Hon'ble ITAT Indore Bench, Indore while arriving at the above decision has taken note of all the recent decisions on the issue of validity of assessment proceedings u/s 153A of the Income Tax Act, 1961 wherein assessments were made without reference to any incriminating documents/material/evidences found during the course of search and held that it is a settled legal position that when two views are possible on a particular issue then the view favourable to the assessee should be followed as held by the Hon'ble Apex Court in the case of CIT vs. Vegetable Products, 88 ITR 192. 5.7. On perusal of the assessment order it is seen that the only additions made by the AO are of Rs.1,71,75,000/- and Rs.6,00,00,000/- being cash transactions in the name of the appellant recorded in the seized pen drive in bm ledger and 21b ledger respectively. From the above it is seen that as regards the two additions it cannot be said that it is made without anyreference to any evidences/ documents/ material found as a result of search action. From the above it is seen that incriminating documents / material / evidences were found as a result of action u/s 132 and based on these evidences contained in the seized Pen Drive which is at serial no.l of Annexure BS-lof Panchnama dated 26.11.2010 assessment u/s 153A has been finalized in the case for the year under consideration. It is further to be noticed that the search in the case of the appellant was carried out on 25/11/2010. The assessment in the case was not finalized and was pending as the notice u/s 143(2) of The Act could still be issued in the case. The assessment thus abated and according to the judicial pronouncements relied on by the DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 14 appellant the AO was not precluded from assessing the entire income similar to jurisdiction in regular assessment under section 143(3). The decision of the the jurisdictional ITAT in the case of Anant Steels Ltd. vs. ACIT (ITA No.l33/Ind./2013 dated 18/11/2015) and in the case of Kalani Bros. 85 Ors. ITA (SS) No. 71/Ind./2014 dated 06/11/2015 and the decision of the special bench of the ITAT, Mumbai in the case of All Cargo Global Logistics Ltd. vs. DCIT (20 ITJ 45) (Trib. Mumbai) (SB) which have been relied upon by the AO endorse the above view 5.8. It therefore cannot be held that the assessment u/s 153A was without the sanction of law and the action of the AO was bad in law. Assessment u/s 153A has therefore to be upheld. This ground of the appellant is therefore dismissed. 6. Ground No. 2.a.l, a.2 & a.3: By these grounds the appellant has disputed the addition of Rs.1,71,75,000/- and Rs.6,00,00,000/- made on protective basis in the hands of the appellant. The detailed facts as per the assessment order are reproduced at para No. 2 above and the detailed submissions of the appellant on the merits of the issue are reproduced at No. 3 above. 6.1 Briefly stated the facts are that as per the seized Pen Drive BS-1/1 which was seized from the premises of C-21 Malls Pvt. Ltd. it was found that it contained accounted and unaccounted transactions of C-21 Malls Pvt. Ltd. (21b ledger) and accounted and unaccounted transactions of Globus Mega Project Ltd. (bm ledger) and some of the unaccounted cash transactions were in the name of the appellant. These transactions have been enumerated in the assessment order. The appellant stated that the transactions did not pertain to him but to his father Shri Keshav Nachani. This fact was also accepted by Shri Keshav Nachani in his statement recorded on 27/11/2012 wherein it was categorically stated that the entries found in the Pen Drive with the name Kamal belong to him. AO in the assessment order observed that it has been established in the assessment order u/s 153A r.w.s. 143(3) for A.Y. 2008-09 to 2012-12 in the case of M/s C-21 Mall Pvt. Ltd. that the "21b" is the books of accounts of M/s C-21 Malls Pvt. Ltd. and the cash entries found in "21b" account contains unrecorded cash receipts including that of assessee. Similarly in respect of the bm ledger it was observed by the AO that It has been established in the assessment order 153A r.w.s. 143(3) for A.Y. 2010-11 & 2012-12 of M/s Globus Mega Project Pvt. Ltd that the "bm" is the books of accounts of M/s Globus Mega Project Pvt. Ltd and the cash book found in "bm" account contains unrecorded cash receipts (debit entries in cash book) and the corresponding unrecorded expenses (credit entries of cash book). The addition made includes the unaccounted cash of the assessee. The AO thus relying on the findings given in the order in the case of C-21 Malls Pvt. Ltd. and Globus Mega Project Ltd. concluded that the cash receipts which were being explained by way of peak drawn by shri Keshav Nachani was not acceptable and treated the amount of cash recorded in the name of the appellant as not satisfactorily explained and considering that the transactions were owned by the father of the appellant, Shri Keshav Nachani, added the amount for the year under consideration as income of the appellant on protective basis the substantive addition being made in the hands of Shri Keshav Nachani. 6.2 During the course of appellate proceedings the appellant has reiterated what was submitted during the course of assessment proceedings that the transactions do not belong to him or pertain to him and these were of his father and his father had owned up the said transactions. It was also pointed out that at the very outset it was denied that the transactions belonged to the appellant and that as beneficial owner of the said transactions was Shri Keshav Nachani it was for him to explain these. It was also argued that there was no material to link these transactions to the appellant and in view of the fact that Shri Keshav Nachani had already accepted that these transactions belonged to him there was no basis for considering DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 15 these in the hands of the appellant. The appellant also filed an affidavit of Shri Keshav Nachani in which it has been stated that the transactions in the Pen Drive pertain to him and that explanation in respect of these will be provided by him and the transactions have nothing to do with the appellant. An affidavit has also been filed by the appellant affirming the same. Appellant has also relied on various judicial pronouncements in support of the contention that when transactions are owned by a person who is a beneficiary of such transactions they are liable to be assessed in the hands of the said person including the decision of the jurisdictional High Court in the case of Smt. Dayabai Vs CIT 154 ITR 248(MP)(1985) . From the above it is thus evident that there is no dispute about the ownership of the transactions. Shri Keshav Nachani has accepted that the transactions belong to him and that explanation in respect of these transactions will be given by him and he has also provided his explanation. Such explanation also does not implicate the appellant in any way. There is no other material on record to hold that the amounts noted in the Pen Drive belong to the appellant. In view of the above the additions made to the income of the appellant on protective basis are to be considered on merits in the hands of Shri Keshav Nachani who has contended that the entries belong to him and will be explained by him. Taking into consideration the entire conspectus of facts and the legal position the addition of Rs.1,71,75,000/- and Rs.6,00,000/-made protectively in the hands of the appellant are directed to be deleted. These grounds of the appellant are therefore allowed. 21. On being aggrieved by deletion of the impugned additions, the Revenue is now before the Tribunal. 22. Both the parties advanced their arguments on the similar lines as were made before lower authorities. While the ld.DR supported order of the AO, the ld.counsel for the assessee supported the order of the ld.CIT(A). 23. After having heard both the parties; perused orders of both the authorities below. We find the basis of addition was the data found in a pen drive viz. BS-1/1 which was seized during the course of search. In ‘21b’ ledger contained accounted and unaccounted cash transactions some of which were pertained to the assessee. However, the assessee denied the same as that of him, and he stated that all the transactions mentioned in the ledger accounts were owned up by Shri Keshav Nachani in his statement recorded on 27.11.2012. He also surrendered a sum of Rs.15 crores as his undisclosed income. All these explanations did not satisfy the AO. The ld.CIT(A) in his impugned order observed that there was no DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 16 material in the pen-drive to link the assessee as the owner or beneficiary of the transactions. Therefore, this being factual position, the ld.CIT(A) held the impugned additions made to the income of the assessee on protective basis has to be considered on merit, in the hands of Shri Keshav Nachani, who admitted that the entries were belonged to him, and an amount of Rs.15 crores has been surrendered to tax as his undisclosed income. Accordingly, the ld.CIT(A) deleted both the additions. Before us, the ld.DR has not controverted to this factual finding and logical conclusion of the ld.CIT(A). Rather on perusal of the findings of the ld.CIT(A), which we have reproduced herein above, we find that he has examined the issue in right perspective, both legal and factual angles, and has come to a just conclusion to delete the impugned additions, which we are of the view, does not call for our interference. Order of the ld.CIT(A) is accordingly upheld, and grounds of the appeal of the Revenue are rejected. 24. In the result, the appeal of the Revenue for Asstt.Year 2010-11 is dismissed. 25. IT(SS)A.No.145/Ind/2016 (Asstt.Year 2011-12) 26. Grounds raised by the Revenue in this appeal are as under: “(1) Whether in the facts and in the circumstances of the case, the Ld. CIT (A) erred in law deleting the additions made on protective basis in the hands of the assessee without appreciating the entire events and circumstances involved in this case. (2) Whether in the facts and in the circumstances of the case the Ld. CIT (A) erred in law by deleting the addition made by the AO on protective basis in hands of the assessee before deciding the issues related with addition made on substantive basis. DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 17 27. On perusal of the above grounds, it indicates that though the Revenue has not specifically mentioned the amounts of disputed additions deleted by the ld.CIT(A) in the grounds of appeal, but on perusal of orders of the Revenue authorities, it revealed that the Revenue has aggrieved by action of the ld.CIT(A) in deleting additions of Rs.2,95,00,000/- each, on account of unaccounted cash credits found recorded in the computerized data in the folders named “BM” and “21b/RSJNRS.DBF” contained in the “Rahul pen- drive”. Third disputed addition was on account of loss sustained in the share trading business. These additions were made by the AO on protective basis, because the assessee has not satisfactorily explained the AO about these unaccounted cash credit entries. Accordingly, we dispose of both these grounds as under. 28. At the outset, we observe that the facts and circumstances stated in the appeal of the Revenue for Asst.Year 2010-11 are similar to the present assessment year under reference, i.e. 153A assessment was a consequence to the same material seized during the impugned search action, which fact was not disputed by either of the parties. 29. Briefly stated facts are that the basis of additions was data contained in the pen-drive BS-1/1 seized from the assessee’s premises. It contained accounted and unaccounted transactions of C21 Malls P.Ltd. and Globus Mega Projects Ltd. AO noticed that some of the unaccounted cash transactions were in the name of the assessee, details of which were recorded by the AO in his impugned order. On being asked by the AO, the assessee disowned the impugned transactions by stating that the same did not pertained to him, but all these transactions were belonged to Shri Keshav Kumar DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 18 Nachani, which fact was accepted by the said Keshavkumar Nachani in his statement recorded on 27.11.2012. He categorically admitted that the alleged cash entries standing in the name of ‘Kamal’ were in fact belonged to him. However, the ld.AO observed that the impugned transactions found in ‘21b’ and ‘Bhopal Hoshangabad’ accounts were established to be actual receipts/payment transactions and clearly indicated movement/transfer of funds from one hand to another. The attempts of Shri Keshav Kumar Nachani to offer peak credit, computed without any basis, was to protect others persons from the tax net. Since the explanation of the assessee was not satisfactory, and Shri Keshav Nandani has owned up all the cash entries, unaccounted and accounted, protective additions have been made in the hands of the assessee, while substantive addition has been made in the hands of Keshav Kumar Nachani. The assessee challenged this protective addition before the ld.CIT(A). 30. Before the ld.CIT(A), reiterated his submissions made before the AO and submitted that since Shri Keshav Kumar Nachani had owned up all the accounted and un-account cash entries, and he has surrendered an amount of Rs.15.00 crores there was no question of making protective addition in the hands of the assessee, because the same has to be determined in the hands of Keshav Kumar Nachani, who is admitted to be beneficiary of all the transactions. 31. The ld.CIT(A) considering order of the AO and submissions of the assessee found merit in the contentions of the assessee, especially to the fact that Shri Keshav Kumar Nachani had not implicated the assessee in any way but he himself owned up all the DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 19 impugned transactions as that of him, for which he surrendered an amount of Rs.15 crores in all and offered to tax. He further noted that there was no material with the AO to establish the amount noted in the pen-drive belonged to the assessee. Therefore, finding merit in the contentions of the assessee, for the reasons aforesaid, the ld.CIT(A) directed to delete both the additions of Rs.2,95,00,000/-each protectively in the hands of the assessee, and thus allowed the claim of the assessee. 32. As far as deletion of addition of Rs.6,01,804/- on account of loss on share trading is concerned, the ld.CIT(A) on the basis of details submitted by the assessee, satisfied with this claim of the assessee, and found the impugned disallowance without any justification or basis. Accordingly, the ld.CIT(A) directed to delete the disallowance. 33. On being aggrieved by action of the ld.CIT(A) in deleting above three additions, the Revenue has filed the present appeal. 34. Arguments advanced before us by both the parties are almost similar to the arguments made before the lower authorities, and supported respective orders of the Revenue authorities. 35. We have heard rival submissions and gone through the impugned orders of both the authorities below. First, we find that the present appeal is also off-shoot of similar facts & circumstances, and same set of materials seized during the search action conducted at various premises of group cases, which were considered by the ld.CIT(A) and by us while deciding the appeals of the Revenue for the earlier assessment years. It is an undisputed fact that the basis of the impugned addition was the data contained in the pen-drive DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 20 seized during the search. Though the AO pointed out that some of the entries found in the accounts were of the assessee, were negated by the assessee himself by stating that he was not aware of such entries and not belonged to him. In fact Shri Keshav Kumar Nachani has come forward and stated that all the impugned transactions are belonged to him, for which he has surrendered Rs.15 crores as his undisclosed income, and the same was offered to tax. Such explanation did not implicate any way to the assessee. Further, there is no material found or with the AO for directly implicating the assessee for unaccounted and accounted cash entries in the alleged accounts. Therefore, in the absence of any distinct difference between the earlier years’ decision and the facts and circumstances in the present year under consideration being pointed out by the Revenue before us, we are unable to take a divergent view from the order of the ld.CIT(A) in this year as well. The ld.CIT(A) observed that there was no question of ownership of the impugned transaction as that of Shri Keshav Kumar Nachani, and therefore, when transactions were owned up by a person, who was beneficiary of such transactions, he was liable to be assessed. This observation of the ld.CIT(A) has not been rebutted by the Revenue before us with some incriminating material evidence. Therefore, we do not find any illegality in the action of the ld.CIT(A) in directing deletion of the impugned additions. Thus, we confirm his order on this issue, and reject grounds of appeal of the Revenue. 36. In the result, the appeal of the Revenue is dismissed. 37. Now we take assessee’s cross objections bearing nos.22 and 39/Ind/2016 together for adjudication as under: DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 21 38. The grounds raised in CO No.22/Ind/2016 (Asst.Year 2007-08) read as under: “1. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has rightly deleted the additions made in the order so passed u/s 143(3) read with section 153-A, wherein additions have been made on surmises, conjunctures, whims and hypothetical grounds, whereas nothing has been found which can be said that incriminating in nature and/or forming part of undisclosed transactions. 2. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has rightly deleted the additions made in the order so passed u/s 143(3) read with section 153-A, whereas the regular assessment u/s 143(3) has already been completed for the assessment year in question before the date of search, wherein no such addition/disallowances have been made, which were now been made in the assessment year in question. 3. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has erred in not adjudicating the issue on merit related to claim 01 exemption u/s. 10(38) of Rs.1,43,77,903/- on sale of listed equity shares in recognized stock exchange, which has been treated as unexplained cash credits u/s 68 by the learned Assessing Officer in assessment order so passed. 4. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has erred in not adjudicating the issue on merit relating claim of exemption u/s 10(34) on dividend of Rs.96,465/- received on listed equity shares, the sales of which has been treated as unexplained cash credits u/s 68 by the learned Assessing Officer. 5. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has erred in not adjudicating the issue on merit relating to addition made on account of alleged unexplained investment in the share capital of private limited companies at Rs.1,50,000/-, wherein the investments were made out of properly disclosed sources.” 39. The grounds raised in CO No.39/Ind/2016 (Asst.Year 2008-09) read as under: “1. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has rightly deleted additions made in the order so passed u/s 143(2) read with section 153A wherein additions have been made on surmises, conjunctures, whims and hypothetical grounds, whereas nothing has been found which can be said that incriminating in nature and/or forming part of undisclosed transactions. DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 22 2. On the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals)-I, Indore has erred in not adjudicating the issue on merit related to claim of exemption u/s 10(38) of Rs.2,37,06,383/- on sale of listed equity shares in recognized stock exchange, which has been treated as unexplained cash credits u/s 63 by the learned Assessing Officer in assessment order so passed. 3. The respondent craves leave to make an addition, alteration, deletion and/or amendment in the grounds of cross objection arising out of this order.” 40. So far as ground nos.1 & 2 in CO no.22/Ind/2016 and ground no.1 in CO No.39/Ind/2016 are concerned, these grounds are merely in support of orders passed by the ld.CIT(A) on the issue for the Asstt.Years 2007-08 and 2008-09. Therefore, they being academic in nature, and for want of any grievance from the end of the assessee on this count, the above grounds are dismissed accordingly. 41. As regards remaining grounds raised in the CO for the Asst.Year 2007-08 are concerned, the grievance of the assessee is that the issues regarding impugned additions raised therein were not decided on merit. In this regard, we have gone through the order of the ld.CIT(A) passed for the impugned assessment year. We find that this aspect has been discussed and considered by the ld.CIT(A) in his impugned order vide para 5.3 to 6.1 at page no.41 to 43. For better clarity, we would produce the above relevant paragraph as under: “5.3 The material placed on record has been considered. In the case of Kalani Bros, the jurisdictional ITAT has observed as under:- "We have heard both the sides. We have also gone through the case laws relied upon by both the sides. We have also considered various relevant facts of the case. It is a settled legal position that once a search and seizure action has taken place u/s 132 of the Act or a requisition has been made u/s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/s 153A of DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 23 the Act. Once notices are issued u/s 153A of, the Act then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the Assessing Officer. It is also held by various Courts that once notice u/s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessees. Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/s 143(3) of the Act read with section 153A/ 153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act. There is no seized material belonging to the assessee which was found and seized in relation to additions made. In a recent decision, Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has held that completed assessments can be interfered with by the Assessing Officer while making assessment u/s 153A of the Act, only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act. Hon'ble Delhi High ' Court in the case of CIT vs. Kabul Chawla (supra) has considered various High Court decisions relied upon by the learned DR. The Hon'ble Delhi High Court has considered the cases of Canara Housing Development Co. vs. DCIT; Madugula vs. DCIT; CIT vs. Chetandas Laxmandas and CIT vs. Anil Kumar Bhatia (supra). The only decision of the Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora; 367 ITR 517 relied on by the learned DR was not considered by Hon'ble Delhi High Court while deciding the issue in the case of Kabul Chawla. The Hon'ble Allahabad High Court has reversed the order of the Tribunal and remanded the issue to the Tribunal to consider the appeal of the department on merits. It is a settled legal position that when two views are possible on a particulars issue then the view favourable to the assessee should be followed as held by the Hon'ble Apex Court in the case of CIT vs. Vegetable Products; 88 ITR 192. Respectively following the decision of the Hon'ble Apex Court, we dismiss the ground of appeals of the Revenue. Departmental appeals are disposed accordingly." DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 24 The decision in the case of Kalani Bros, has again been followed by the Hon'ble ITAT Indore Bench, Indore in the case of M/s Anant Steel Pvt. Ltd., Indore in IT(SS)A No. 31, 28, 29&30/Ind/2010 vide order dated 18.11.2015. The Hon'ble ITAT Indore Bench, Indore while arriving at the above decision has taken note of all the recent decisions on the issue of validity of assessment proceedings u/s 153A of the Income Tax Act, 1961 wherein assessments were made without reference to any incriminating documents/material/evidences found during the course of search and held that it is a settled legal position that when two views are possible on a particular issue then the view favourable to the assessee should be followed as held by the Honlole Apex Court in the case of CIT vs. Vegetable Products, 88 ITR 192. On perusal of the assessment order in the case it is seen that the additions made by the AO by rejecting the claim of exemption of LTCG of Rs.30159130/- u/s 10(38) and treating it as unexplained cash credit u/s 68 and the addition of Rs.150000/- as unexplained investment in shares of Gnext Capital Market Pvt. Ltd., Noble Real Estate Pvt. Ltd. and Miraccle Reality Pvt. Ltd. and addition of Rs. 96465/- being dividend on share again treated as unexplained credit in the absence of verifiable detail have been made without any reference to any evidences/documents/material found as a result of search action. The appellant has also stated that no incriminating material was found during the course of search to justify any enquiry on the above issues. In view of the fact that no incriminating documents/material/evidences were found related to the issues considered in the assessment order during the search and keeping in view the decisions of the Jurisdictional ITAT cited above the validity of the assessment u/s 153A of the Income Tax Act, 1961 cannot be upheld. This ground of the appellant is therefore allowed. 6. Ground No. 3: By this ground the appellant has disputed the additions of Rs. 30159130/- Rs. 150000/- and Rs. 96465 on merits. The detailed facts as per the assessment order are reproduced at Para No. 2 above and the detailed submissions of the appellant on the merits of the issue are reproduced at Para No. 3.3 to 3.5 above. 6.1 The above grounds of the appellant are rendered academic in view of the fact that the ground No. 1 of the appellant challenging validity of the order u/s 153A has been allowed in appeal. These grounds are therefore dismissed for statistical purposes.” 42. On going through the above finding of the ld.CIT(A), we are of the view that there cannot be any more grievance to the assessee, since the assessment order passed under section 143(3) read with section 153A held to be invalid in view of the fact that no incriminating documents or evidences were found related to the DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 25 issues considered in the assessment order during the search. He, thereafter held that since assessee’s challenge to the validity of order under section 153A has been allowed, adjudication of disputed additions was mere an academic exercise, and should be disposed of accordingly. This stand of the ld.CIT(A) has not been contested by the ld.counsel for the assessee before us. In this view of the matter, we do not any fruitfulness in adjudicating the issue of disputed addition separately, when the main grievance of the assessee has already addressed and adjudicated upon by the ld.CIT(A) in favour of the assessee. Thus, we reject all the impugned grounds raised in the CO on the validity of addition made by the AO. 43. Now coming to the last ground of CO of the assessee for the Asst.Year 2008-09, the grievance of the assessee is that the ld.CIT(A) has not adjudicated the issue on merit related to claim of exemption under section 10(38) of the Act of Rs.2,37,06,383/- on the sale of shares. 44. Having heard both the parties, we have gone through the orders of both the parties. We find that before the ld.CIT(A) the grievance of the assessee was that the assessment framed under section 143(3) r.w.s. 153A was bad in law, and consequently the addition made of Rs.2,37,06,383/- being the amount of long-term capital gain earned on sales of shares, without bringing any incriminating material, and therefore, the impugned addition liable to be deleted. While going through the order of the ld.CIT(A) we find that the CIT(A) has upheld the issue of validity of the assessment framed under section 153A by holding that the assessment was based on the material found in the seized pen drive attached with Annexure BS-1. Therefore, the action of the AO for 153A DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 26 assessment was in accordance with law. The observation of the ld.CIT(A) is at para-5.8 of the impugned order, which is as under: “5.8 From the above it is seen that incriminating documents / material / evidences were found as a result of action u/s 132 and based on these evidences contained in the seized Pen Drive which is at serial no.l of Annexure BS-l of Panchnama dated 26.11.2010 assessment u/s 153A has been finalized in the case for the year under consideration. It therefore cannot be held that the assessment u/s 153A was without the sanction of law and the action of the AO was bad in law. Assessment u/s 153A has therefore to be upheld.” 45. We also find from the impugned order that the ld.CIT(A) also dealt with the issue of addition on account of long term capital gain under section 10(38) of the Act of Rs.2,37,06,383/- on sale of sales at para 5.7 & 5.9 of the impugned order. They read as under: “5.7. On perusal of the assessment order it is seen that two additions have been made by the AO, Rs.2,37,06,383/- the first being addition of Long Term Capital Gains on sale of shares of Link House Industries Ltd. held to be unexplained cash credit u/s 68 of The Act and Rs.25,00,000/-the second being cash transactions in the name of the appellant recorded in the seized pen drive. From the above it is seen that as regards the second addition i.e. of Rs.25,00,000/- it cannot be said that it is made without any reference to any evidences/documents/material found as a result of search action. However as regards the addition of Rs.2,37,06,383/- it is seen that there is no reference to any evidences/documents/material found as a result of search action. The appellant has also stated that no incriminating material was found during the course of search to justify any enquiry on the above issues. ... ... ... ... 5.9 However in view of the fact that no incriminating documents / material / evidences were found, related to the issue of LTCG considered in the assessment order, during the search and keeping in view the decisions of the Jurisdictional ITAT cited above the addition of Rs.2,37,06,383/- is beyond the purview of section 153A as held by the Jurisdictional ITAT in the orders referred to above. This ground of the appellant is therefore partly allowed” 46. From the reading of the above order of the ld.CIT(A), it would reveal that the CIT(A), though upheld the validity of assessment framed under section 153A r.w.s. 143(3), but the addition was DCIT Vs. Shri Kamal Kumar Nachani, Indore (4 appeals & 2 COs.) 27 deleted on merit by holding that no incriminating documents/material or evidences were found, directly relatable to the issue of LTCG. Therefore, having deleted the impugned addition, the assessee should not have stated to be aggrieved. In fact, there is no grievance lies for the assessee in the present case. To this proposition, the ld.counsel for the assessee was unable to convince us about the relevancy of adjudicating this ground raised in the CO. Since the ground raised in the CO has no merit, the same is dismissed. 47. In the result, both the Cross objections of the assessee are dismissed. 48. In the combined result, appeals of the Revenue, as well as cross-objections of the assessee are dismissed. Order pronounced in the Court on ___31 st ____January, 2023 at Ahmedabad. Sd/- Sd/- (BHAGIRATH MAL BIYANI) ACCOUNTANT MEMBER (MADHUMITA ROY) JUDICIAL MEMBER Ahmedabad, Dated 31/01/2023 True Copy आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ! / The Appellant 2. "यथ! / The Respondent. 3. संबं&धत आयकर आय ु (त / Concerned CIT 4. आयकर आय ु (त)अपील (/ The CIT(A)- 5. वभागीय त न&ध ,आयकर अपील य अ&धकरण,राजोकट/DR,ITAT, Ahmedabad, 6. गाड1 फाईल /Guard file. आदेशान ु सार/ BY ORDER, सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ&धकरण, ITAT, Indore