DCIT, CC-3(3), KOLKATA. , KOLKATA V. LOHARUKA INFRASTRUCTURE PVT. LTD. , KOLKATA

ITSSA 94/KOL/2023

AI Insights

The case involves appeals by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had deleted additions made under section 69 of the Income Tax Act, 1961, as unexplained investments in the hands of Loharuka Infrastructure Pvt. Ltd. The additions were initially made following a search and seizure operation at the premises of the Loharuka Group and associated individuals. The Tribunal examined the submissions, evidence, and the legal provisions applicable, particularly focusing on the lack of direct evidence linking the transactions in question to the assessee company. The Tribunal noted that the diaries containing the transactions were not found at the assessee's premises but at the premises of another group, and the key person of that group had denied any transactions with the Loharuka Group.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779308 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-10-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Appeal Filed On: 14-06-2023
• Other Referred Cases: PCIT (Central) - 3 vs. Anand Kumar Jain (HUF), Principal Commissioner of Income Tax vs. Best Infrastructure (India) Private Ltd., Commissioner of Income Tax v Harjeev Agarwal, CIT vs. Dataware (P) Ltd., P.K. Sethi vs. CIT, Jalan Timbers vs. CIT, CIT v. Victory Spinning Mills Ltd., CIT v. Pranav Foundations Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: WHICH IT CAN BE CLEARLY; WHICH
• Keywords: Condonation of delay; Set aside; Unexplained investment; Income from undisclosed sources; Document seized; Documents seized; Search and seizure; Block assessment; Assessment record; Initiation of penalty proceedings
• Section: 143(3); 142(1); 132; 153A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA Before SHRI DUVVURU RL REDDY, VICE PRESIDENT (KZ) & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T. (S.S.)A. Nos.: 93, 94 & 95/KOL/2023 Assessment Years: 2015-16, 2016-17 & 2017-18 DCIT, CC-3(3), Kolkata Vs. Loharuka Infrastructure Pvt. Ltd. (Appellant) (Respondent) PAN: AABCG6822C Appearances: Department represented by : Sanat Kumar Raha, CIT(DR). Assessee represented by : Sanjay Modi, FCA. Date of concluding the hearing : 24-July-2025 Date of pronouncing the order : 16-October-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: These appeals filed by the Revenue are against the separate order of the Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16, AY 2016-17 & AY 2017-18 dated 31.03.2023, which have been passed against the assessment orders u/s 153A r.w.s. 143(3) of the Act, dated 30.09.2021. 1.2 Since the issues are common, therefore, all these appeals were taken up together, heard together and are being decided vide this common order for the sake of convenience and brevity. We will take up I.T. (S.S.)A. No.: 93/KOL/2023 as the lead case for adjudication. Printed from counselvise.com Page | 2 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 2 of 29 1.1. The Registry has informed that the appeals filed by the Revenue are barred by limitation by 02 days. An application seeking condonation of delay has been filed by the Revenue stating as under: “In the instant case, approval of filing of appeal before the Hon'ble ITAT was received from the office of the Pr. CIT, Central-2, Kolkata on 06.06.2023. The Appeal Order against which the 2 appeal is suggested was received in the Pr. CIT office on 12.04.2023. Accordingly, time limit for filing appeal before the Hon'ble ITAT was expired on 11.06.2023. (11 June, 2023 was Sunday). After receiving the approval, the following documents have been prepared (three copies each) for filing the appeal before the Hon'ble ITAT, Kolkata. 1) Form No. 36 2) Grounds of Appeal before the tribunal 3) Certified Copy of CIT (Appeal) order 4) Certified Copy of Form No. 35 along with Grounds of Appeal & Statements of facts 5) Certified copy of relevant assessment order 6) Certificate of the Commissioner (certified Copy) Therefore, there is a delay of 2 days in filing the instant appeal. Your petitioner states that if the delay of two days is not condoned the revenue shall suffer severe loss. Leave may please be given to file the Appeal by condoning the delay.” 1.2. Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the Revenue had a reasonable and sufficient cause and was prevented from filing the instant appeals within statutory time limit. We, therefore, condone the delay and admit the appeals for adjudication. 2. The Revenue is in appeal before the Tribunal raising the following common grounds of appeal for all the three assessment years: “1. That on the facts and circumstances of the case, the Ld. CIT(A) is not justified in deleting the addition made u/s.69 of the Act ignoring the facts Printed from counselvise.com Page | 3 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 3 of 29 that there was a corroborative evidence gathered during Search & Seizure proceedings. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition after accepting new evidences without invoking Rule 46A of the Income Tax Rules, 1962. 3. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition merely accepting that the same transaction has already been taxed in the hands of other assessee without going into the details. 4. The appellant craves the right to add, alter, amend, or withdraw any ground or grounds of appeal before or at the time of hearing of the case.” 3. Brief facts of the case are that the assessee is a private limited company and the initial assessment for AY 2015-16 was completed on 29.12.2017 at the total loss of ₹44,56,447/-. A search and seizure operation was conducted at the business and residential premises of the members and directors belonging to Loharuka Group on 20.03.2022. Statutory notices were issued and the assessment was completed on ₹2,24,83,840/- by making an addition of ₹2,24,83,840/- u/s 69 of the Act as unexplained investment. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) in which it was alleged that no incriminating document in the case of the assessee were found during the course of the search from the premises of the assessee and no addition was called for. The Ld. CIT(A) examined the submissions, facts of the case, the documents found in the course of the search and concluded as under: “Upon examining carefully the impugned assessment order, I find that the most important fact that emerges starkly from the reading of this order, is that the AO, himself is completely unsure whether the said transaction belongs to the appellant or not and whether the transaction amount is to be added to the income of the appellant or not. The sole reason for making an addition in the hands of the appellant company appears to be that the appellant is the flagship company of the \"Loharuka Group\". The addition is not based on any concrete evidence in possession of the assessing officer Printed from counselvise.com Page | 4 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 4 of 29 that the appellant company was party to the aforesaid transactions. I find that no evidences was found either during the search at the appellant's premises or in any statement recorded u/s. 132(4) or 132(4A) or even 131 of the Act based on the documents found in search at the third party's premises to conclude that the above transactions were related to the appellant company. No evidence admittedly has also been found either during the post search enquiries of the search upon the Disha Group or indeed of the search upon the appellants group. No such evidence in support of the fact that the transactions mentioned in the impugned diaries pertained to the present appellant was also found during the assessment proceedings in the case of Shri D.N. Kotgire or those of the appellant company. The above matter needs a closer examination in the light of certain judicial pronouncements found to be pertinent for the facts at hand. The Hon'ble Delhi High Court in the case of PCIT (Central) - 3 vs. Anand Kumar Jain (HUF) [ITA NO. 5385/2021, 5516/2021, 5522/2021, 5524/2021, 5525/2021, 5526/2021 & 5540/2021] held that \"A statement recorded u/s 132(4) has evidentiary value but cannot justify the additions in the absence of corroborative material. (ii) The statement also cannot, on a standalone basis, constitute 'incriminating material’ so as to empower the AO to frame a block assessment u/s 153A\". Similarly, the Delhi High Court in the case of Principal Commissioner of Income Tax vs. Best Infrastructure (India) Private Ltd. [ITA NO. 11/2017, 12/2017, 20/2017, 14/2017, 15/2017, 16/2017, 17/2017, 18/2017, 19/2017, 21/2017 & 22/2017] held that \"Statements recorded u/s 132 (4) do not by themselves constitute incriminating material.\" Similar decision was delivered, once again, by the Delhi High Court in the case of Commissioner of Income Tax v Harjeev Agarwal (2016) 290 CTR 263 that \"mere statements made during the course of search under section 132(4) of the Act, cannot be considered to be incriminating material\". When applied to the present case, I find that a closer examination is also required of section 132(4A) of the Act. This subsection is reproduced here for clarity: Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and Printed from counselvise.com Page | 5 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 5 of 29 (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested. This section creates a presumption against the person from whose premises or from the control of whose premises some documents, papers, diaries, books of account etc are found. The presumption is such that this material is presumed to belong to the person from whose premises this material is found and creates an onus upon such person to explain, with evidence and reasoning, the contents of this material or to rebut the contents of the material with cogent evidence and reasoning. In the present case the said diaries that served as the source of the impugned additions were found in the possession and control of the Disha Group. Presumption, if any, would then naturally be created against the persons of Disha Group and not against the Loharuka Group, in general, or this appellant in particular. Therefore, if the AO decided to use the said diaries against the appellant, then this material would be construed as evidence being adduced by the AO and therefore the onus would lie upon him to prove that the entries therein pertained to transactions of the appellant. This, it is noticeable, has not been attempted by the AO. In his assessment order, the AO has been repeating that it is the appellant who had to explain the transactions noted in the said diaries and that since the appellant could not explain the source of the moneys mentioned in these diaries, it was being presumed that these transactions represented the income of the appellant from unaccounted sources. I do not find any evidence that the AO has adduced to prove his contention that the said transactions pertained to the appellant. Coming to the statements purported to have been made by the persons of the Disha Group; the appellant has produced copies of the statements made in relation to these diaries. I find force and veracity in the contention of the appellant that nowhere has the name of the appellant been mentioned. The addition, I find has been made in spite of the fact that statements u/s. 132(4), 132(4A) & 131 do not mention that the impugned transactions from the said diaries are related to appellant. Such an addition cannot be sustained in the absence of any form of corroborative material found either during the search on Disha Group or on the Loharuka Group or any of their post search enquiries. An examination of the statements of Shri Purushottam Vishnupant Binorkar, the key employee of the Disha Group, which has been relied upon to make the impugned addition clearly shows that there is no mention of the appellant company by the deponent in his statement. A Printed from counselvise.com Page | 6 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 6 of 29 reading of the statement given by Shri D.N. Kotgire, the key person and virtual owner of the Disha Group makes even more interesting reading. In the said statement, given under oath, u/s 131 of the Act, the deponent is repeatedly asked about the transactions with the Loharuka Group in general and the present appellant in particular. It is noted that the Shri D.N. Kotgire, while repeatedly admitting that he knows the main key persons of the Loharuka Group, Shri Anil and Shri Sunil Loharuka, continues to deny any knowledge of the present appellant company. Some excerpts from the aforestated statement are instructive. Question 11 asks the deponent, as the main person of the Disha Group, to give page-wise explanations of the impugned diaries found on the residential premises of Shri Kulkarni. In reply, Shri D.N. Kotgire has expressed his inability to explain the said transactions. This reply has been repeated by Shri D.N. Kotgire in reply to the next question as well as the one following it. In question 14 page number 50 of diaries number A-73 has been pointed out to the deponent Shri D.N. Kotgire and it is pointed out that the name of Shri Sunil Loharuka a key person of the present Loharuka Group was mentioned upon that page along with the names of other individuals, Shri D.N. Kotgire, while acknowledging that he knew Shri Sunil Loharuka, denied any knowledge of the other two persons mentioned on that paper as well as any knowledge of the transactions mentioned therein. In reply to Question 15, the deponent once more admitted knowing Shri Sunil Loharuka, who was acknowledged by him to be his business partner in some projects, but denied knowledge of the transactions mentioned in the diaries. Shri D.N. Kotgire, in reply to Question 16, once more admitted knowing Shri Sunil Loharuka as well one Shri Rahul Kadam (called a kith of the Loharukas by the AO of the present appellant, but no relationship has been found to be explained in the said statement). He however once more denied knowledge of the transactions in the diaries. In reply to Question number 18, Shri D.N. Kotgire was even more categorical in respect of the business relationship of his group with the entities that comprised the Loharuka Group. Shri D.N. Kotgire has said in his reply: “....we are having some business partnership with Shri Sunil Loharuka and Shri Anil Loharuka. But we do not have any transaction with Loharuka Group Companies.” [emphasis supplied] The above is a categorical statement made by Shri D.N. Kotgire in which he is excluding all the group entities of the Loharuka Group of entities, including the present appellant, from having had any transactions with his group. The only business transactions of the Disha Group have been with Shri Anil and Shri Sunil Loharuka. The above positive assertions in respect of Shri Anil Printed from counselvise.com Page | 7 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 7 of 29 and Sunil Loharuka lend further credence to the denial in respect of the other entities of the Loharuka Group. In reply to question number 20, the statement of Shri D.N. Kotgire becomes even more categorical. In reply to the query raised before him as to whether the entries in the impugned diaries were referring to Shri Sunil and Anil Loharuka of M/S Loharuka Infrastructure or not, the deponent replied that he knew Sunil and Anil Loharuka and that they belonged to the Loharuka Group of Kolkata and also that he had a business connection with them; but in respect of the present appellant he stated, \"I have no idea about the M/S Loharuka Infra Pvt Ltd of Kolkata\" In view of the categorical and repeated denials by the key person of the Disha Group, Shri D.N.Kotgire, that he had any knowledge of the present appellant, accompanied by his positive assertion that while he had a business relationship with Shri Anil and Sunil Loharuka, he had no business relationship with \"any other entity of the Loharuka Group\", it is difficult to give credence to the observation of the AO, that Shri D.N. Kotgire was heading a big group and may not have known the specific name of the present appellant. Even if this last contention of the AO was acknowledged as true, the fact of the positive statement made by Shri D.N.Kotgire that while he had business relations with Anil and Sunil of the Loharuka Group, but not with any other entity of this group would still preclude the existence of any business transactions with the present appellant. This could have led to the possibility, subject to other evidence that would even then have to be adduced by the AO, that the transactions in the impugned diaries were considered in the hands of Shri Anil and/or Shri Sunil Loharuka. However, from the present reliance of the AO upon the statements of Shri D.N.Kotgire or any other, it is difficult to see how the said amounts shown in the impugned transactions could have been considered in the hands of the present appellant. Coming to the next phase of the events that have led to this addition, I find that despite the fact that the said incriminating diaries were found in the search upon the Disha Group, no notice u/s 153C of the Act was issued against the present appellant. It must be kept in mind that the issue of such notice involves the, recording of satisfaction, both, by the AO in the case of Disha Group as well as the AO of the appellant. There is nothing on record to suggest that such a satisfaction was ever attempted or reached or recorded. While this fact is decidedly not definitive, it however is significant and indicative in view of the fact that no corroborative evidence was found post the Disha Search in connection with the impugned transactions and therefore the impugned addition was made solely upon the results of the Disha Search. In this respect I cannot agree with the ground taken by the Printed from counselvise.com Page | 8 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 8 of 29 appellant that an addition could have been attempted only u/s 153C and not u/s 153A of the Act. The issue of notice u/s 153A is automatic upon a search having been conducted upon the assessee. Thereafter, the assessment can be made by relying upon various material obtained from various places and sources. The fact that a notice u/s 153C was not issued, may be considered indicative of the inclination and satisfaction of the AO in the search in which the documents pertaining to someone else are found, however the fact that no such notice was issued cannot place an embargo or estoppel upon the issue of notice u/s153A and consideration of material obtained from any source or in any other way vitiate these latter proceedings. Therefore I cannot agree with the contentions of the appellant in this regard and the same are rejected. In my opinion the fact of non-issue of notice u/s 153C in this case cannot preclude the consideration of material u/s 153A. The ground pertaining to this objection is therefore dismissed. Next, when I examine the search upon Loharuka Group, I find that during the search, despite the fact that the Department had had in its possession, the diaries from the Search upon the Disha Group, no queries have been brought on record by the AO, either during assessment or post search proceedings, that could have been raised during the search upon Loharuka Group during an examination or otherwise of any of the key persons of the Group or from any person who was in the know of things in the case of the appellant or even after the search. The appellant has pointed out that it is strange that no queries were raised in connection with the said diaries. He has stated that this fact indicates that the Department was never sure that the said amounts had to assessed in the hands of the appellant belonging to the Loharuka Group. Explanation to subsection 132(4) is a critical provision in such cases. The said subsection and its explanation are reproduced hereunder for convenience: The authorised officer may, during the course of the search or seizure, examine on oath any person who is fond to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.1 Explanation.- For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income- tax Act, 1922 (11 of 1922), or under this Act.] Printed from counselvise.com Page | 9 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 9 of 29 The Explanation to subsection 132(4) could have been used during the search upon the Loharuka Group, to examine the key persons of the appellant company and the group itself with regard to the said transactions with the Disha Group. There is nothing on record to show that the examination of persons during the search on Loharuka Group yielded anything to corroborate the transactions with Disha Group. The search itself yielded no evidence whatsoever to corroborate or to shed any light upon the transaction noted within the said diaries. Even if the said transactions could have been established to be with the Loharuka Group, of whose member the appellant is, it is no one's case that the name of the appellant was even mentioned at any point of time or that it emerged from either of the two searches, or from any post search enquiries or from any investigation conducted during the assessment of the appellant or any of its group members or of the members of the Disha Group. In fact the assessment order itself shows that the AO was seized of this problem and has tried to deal with it, albeit without making any investigative efforts. The AO has mentioned in his order that the problem before him was to ascertain if the impugned addition could indeed be made in the hands of the appellant or not. Thereafter, he has gone into a discussion of the fact that, of the entire Loharuka Group, the only assessee who had the financial wherewithal to make the said transactions, was the appellant. He has stated that the appellant was the flagship company of the Group and was into real estate projects, therefore it would stand to reason that the appellant had transacted with the Disha Group. These speculations, however, can at best be seen within the realm of conjectures and surmises as the appellant has been insisting they are. Assessments can hardly be made upon such conjectures. I have not come across any evidence from the material on record that the said transactions had any connection whatsoever with the appellant company. In the absence of any evidence or even a statement from anyone, it is unclear how the AO could have presumed - even if the said transactions were, for the sake of argument, granted to be transactions of the appellant's Loharuka Group (which connection had also not been established by the AO), that the said transactions pertained to the present appellant only and to no one else in the group. The AO has not been able to, to my mind, bring on to record any form of connection, however tenuous, of the appellant to the said transactions. Huge additions, running across several years, made in this manner cannot lawfully be lent any legal support during appeal. {emphasis supplied} Without prejudice to the above discussions, even otherwise, it has been shown by the appellant that Shri D.N. Kotgire, that is, the party from whose premises the impugned documents were seized, has clearly owned up these transactions and paid taxes on the same. He has given an Printed from counselvise.com Page | 10 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 10 of 29 affidavit to this effect, dated 09.09.2021 in which, inter alia, it is mentioned. {emphasis supplied} \"....during the search operation some diaries were found and seized containing cash transactions, some names, some expenses and sale receipts in cash from various projects. I hereby confirm that I owned up all transactions and nobody is related to it. The income calculated by me on the basis of diaries for all assessment years from 2014-15 to 2020- 21, belongs to me only and I am ready to pay tax and interest thereon to avoid litigation and to buy mental peace. Hence this Affidavit {emphasis supplied} Copies of the assessment orders u/s Is 143(3) 143(3) read read with section 153A, of Shri Devanand Narayan Kotgire, PAN ABRPK1724B, Address: Disha Square, Sutgiri Chowk, Garkhede, Aurangabad, for AYs 2014-15 to 2020-21, have been filed before me by the appellant and were always part of the Departmental record. I find that in these assessment orders, the AO has recorded that the assessee, Shri Kotgire, when asked about the entries in the said diaries seized from his premises and the residential premises of his employee - accountant of the Disha Group - Shri Ratnakar Kulkarni, had offered, to tax, unaccounted income over and above the income declared by Shri Kotgire in the return filed u/s 153A of the Act. This additional income has been offered on the basis of the entries in the said diaries and after working out the peak value of credit the AO has applied a suitable net profit rate and brought the entire amount to tax. Further, the AO in the case of Shri Kotgire, has also noted that the diaries contained certain entries showing the earning of interest by Shri Kotgire. These amounts were also added to the income of Shri Kotgire. This procedure has been repeated in the case of the assessment of Shri Kotgire, the key person of the Disha Group, for each and every assessment year from 2014-15 to 2020-21. It is apparent therefore, from the above discussions that Shri Devanand Narayan Kotgire, the key person of the Disha Group, has not only submitted an affidavit that all the income form the diaries seized from the search on his group belong only to him, but has also been assessed in respect of all the transactions shown in these diaries. Treating the same transactions, once again, as belonging to the appellant would therefore be tantamount to taxing the same amount twice; once in the hands of the Disha Group, the so-called recipient and then again in the hands of the appellant, the so-called lender. This would be against the established principles of law. In this regard, I am inclined to agree with the proposition of law, as brought out by the Hon'ble Calcutta High Court in the case of CIT vs. Dataware (P) Printed from counselvise.com Page | 11 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 11 of 29 Ltd.: ITAT No.263 of 2011, that once a transaction has been accepted in the hands of one assessee, the same transaction should not once again be assessed in the hands of some other assessee who is party to the same transaction. The appellant has relied upon decisions elaborating upon a similar proposition of law, from various High Courts. For instance, the cases of P.K. Sethi vs. CIT: [2006] 286 ITR 318, Jalan Timbers vs. CIT: 90 Taxman 298, CIT v. Victory Spinning Mills Ltd.: 228 Taxman 69 & CIT v. Pranav Foundations Ltd.: T. C. (A.) NO. 262 OF 2014have been cited by him in this context. In all the above cited cases I find that the proposition of law that the appellant is trying to put forth is that once an amount has been accepted as some person's income, then there can be no scope for assessing the same amount in the hands of some other person by treating this amount as income of this other person. In the present context I would tend to agree that this proposition of law extracted from the above citations would lend support to the appellant's plea that once the said amounts from the same source of seized documents has not only been accepted under affidavit by Shri Devanand Narayan Kotgire, but that the same amounts have also been assessed in the hands of Shri Kotgire, then there is no scope left for assessing the same transactions in the hands of the present appellant, whose name itself not only does not appear in these diaries and documents, but that the involvement of such an assessee has been explicitly denied by the main person of the Disha Group (as already discussed earlier in this order). It is quite apparent that the involvement of the present appellant in the impugned transaction is a matter of only inferential conjecture on the part of the appellant's AO and is not based upon any form of evidence adduced at any stage. In these circumstances it would be unlawful and contrary to facts to make the addition in the hands of the present appellant. In view of the above discussions, I cannot find merit in the addition made by the AO in this regard and the same cannot be confirmed. A word about the ground taken by the appellant in this connection, that he was not afforded an opportunity to cross-examine Shri D.N. Kotgire is in order. I find no substance in this ground since it is a matter of record that he was afforded an opportunity to conduct the cross examination, but he himself did not appear on the date so fixed. This aspect of the grounds of the appellant is thereof dismissed. These grounds of the appellant are, as per the above discussions, therefore partly allowed. GROUNDS 2 In this ground the appellant has agitated that the order passed by the Learned Assessing Officer is contrary to law that completed assessments can be interfered with by the AO while making addition u/s. 153A only on the basis of some incriminating material found during search. Printed from counselvise.com Page | 12 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 12 of 29 In view of the relief afforded to the appellant as per grounds 1,3,4,5 and 6, there is no need to adjudicate upon this ground. GROUND NO 7 In this ground the appellant has agitated initiation of penalty proceedings u/s. 271(1)(c). This ground is premature since a ground, at this forum, can be raised upon the imposition of penalty and not against the initiation of penalty proceedings. This ground thereof stands dismissed. GROUND NO 8 This ground is general in nature and as such not adjudicated upon. The appeal in the result is partly allowed.” 4. The Revenue has challenged the order of the Ld. CIT(A). In Ground no. 1 it is stated that though the Ld. CIT(A) was not justified in deleting the addition made u/s 69 of the Act ignoring the facts that there was corroborative evidence gathered during Search & Seizure proceedings. During the course of appeal before us the Ld. AR as well as the Ld. DR filed clarifications which were sought and the same have been considered. The Ld. AR submitted that at no point of time the assessee was asked to explain the entries in the diaries. The assessee has filed written submission which is reproduced as under: “… 3. That a search and seizure had taken place at the premises of the respondent company on 21.01.2020. No incriminating documents were found or seized from the premises of the respondent during the course of the search. 4. That the diaries bearing identification mark A-12, A26, A28, A33, A36, A37, A38, A39, A40, A41, A42, A43, A44, A46, A47, A48, A51, A52, A53, A56, A57, A59, A64, A65, A66, A69, A73, A77 & A93 based on which addition has been made were seized by the Income Tax Department during a search from the premises of Mr D N Kotgire (more specifically from premises of his employees Shri Ratnakar Kulkarni) and not from the premises of the respondent company . Printed from counselvise.com Page | 13 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 13 of 29 5. Consequent upon the search the files of the Loharuka Group including that of the respondent were centralized with the ACIT, Central Circle - 3(3)/Kolkata. … 8. In the notice u/s. 142(1) dated 05.08.2021 query no 5 related to certain diaries seized by the Income Tax Department during a search from the premises of Mr D N Kotgire (more specifically from premises of his employees Shri Ratnakar Kulkarni) and not from the premises of the respondent company. The diaries mentioned in the notice were A-12, A26, A28, A33, A36, A37, A38, A39, A40, A41, A42, A43, A44, A46, A47, A48, A51, A52, A53, A56, A57, A59, A64, A65, A66, A69, A73, A77 & A93. … 10. That the respondent also drew attention to Sec 132(4) which provides that an authorized officer may, during the course of search, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and that such statement recorded during examination may thereafter be used in evidence in any proceeding. The respondent drew attention to the statement of one Mr Purushottam Vishnupani Binorkar, another employee of Mr DN Kotgire, recorded at the time of search on the Disha Group, on 21.1.2020 and 23.1.2020 (relied upon by the present assessing officer) u/s. 132(4) and pointed out that he was not asked about the entries relating to any entity of the Loharuka Groupand he has not given any evidence that the aforesaid transaction/subject matter of addition has been done by the respondent company. 11. The respondent also pointed out that the learned AO has neither pointed out that any statement that was recorded, of the respondent company or any of its directors, u/s. 132(4) during the course of search on the respondent company with regard to the above documents (subject matter of addition) seized in the search of the Disha Group, and which were now serving as the basis for making huge additions to the respondent's income. 12. The respondent further drew attention to the statement of Mr. D.N. Kotgire recorded on 14.09.2021(during the course of assessment proceedings). It was contended by him that even Mr. D.N. Kotgire has not given any evidence that the aforesaid transactions had been done by the respondent company. It was pointed out that although Mr Kotgire admitted knowing the \"Loharuka Group\", but denied any knowledge about the respondent company. Printed from counselvise.com Page | 14 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 14 of 29 13. The respondent drew attention to Sec 132(4A) and submitted that no corroborative evidence was found during the search upon the Loharuka Group with regard to the above transactions with the Disha Group. 14. Thereafter the assessment was completed by the learned assessing officer by making addition of Rs. 2,24,83,840/- u/s 69 of the Income Tax Act, 1961 as unexplained Investment. 15. The respondent been aggrieved by the order of the Learned assessing officer had filed an appeal before the CIT (Appeals) - 21 on 25.10.2021. 16. The respondent reiterated its stand before the CIT (A). a) Further, attention was also drawn to Sec 132(4A) and it was submitted that no corroborative evidence was found during the search upon the Loharuka Group with regard to the above transactions with the Disha Group. He has pointed out that the inference drawn by the assessing officer that the aforesaid transactions belonged to the respondent company was not based on any evidence at all that could be said to corroborate the diaries found during the search on Disha group. In this regard he drew CIT(A) attention to para 8.14 of the impugned assessment order wherein the learned assessing officer has clearly admitted the fact that it is a fact that no evidence is in the hands of the department by which it can be clearly ascertained that which particular concern of the assessee group was involved in the purported transactions. under the circumstance it is found that the assessee is the flagship company of the \"Loharuka Group\" which has been engaged in real estate business for a considerable period and it is natural that the money which has been established to have been transferred to \"Disha Group\" must have been generated in its hands. Therefore, the same should reasonably and fairly assessed in the hands of the assessee.\" He therefore emphasised that the impugned addition is not based on any evidence and is rather based on surmises, conjectures and presumptions. The respondent attention in this regard to the decision in the case of Commissioner of Income Tax vs. Layer Exports Pvt. Ltd. ITA Nos. 3019,3020,3021, 2985 & 2986/Mum 2011, Ramakant Umashankar Khetan v. ACIT (2000) 66 TTJ 378 (Nag.) and Pankaj Dayabhai Patel (HUF) v. ACIT (1999) 63 TTJ 790 (Ahd.) to lend support to his contention that in such a case as the present one, no addition could lawfully have been made. b) The respondent also pointed out that in the case of the presently impugned transactions, Mr D.N.Kotgire had already owned up the entire transactions of the seized diaries by filing an affidavit before his assessing officer and in such affidavit, he has specifically mentioned that the transactions, names mentioned therein are not related to the parties concerned and he himself has owned up all transaction. He has also offered Printed from counselvise.com Page | 15 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 15 of 29 tax and interest based on the notings in the diaries. The respondent has submitted a copy of the said affidavit and the assessment order of Mr D.N.Kotgire in this regard. It is seen from these that the contents of these diaries have been considered for the purpose of determination of tax by Mr D.N.Kotgire. In light of the above the respondent has challenged the inference drawn by the assessing officer in his case. … 18. The respondent is now in receipt of the Form 36 from the Honourable ITAT along with Grounds of Appeals. Your honour, the appellant has raised the following grounds of appeal a) That on the facts and circumstances of the case, Ld. CIT(A) is not justified in deleting the addition made u/s 69 of the Act, ignoring the facts that there was corroborative evidence gathered during search and seizure proceedings. b) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition after accepting new evidences without invoking Rule 46A of the Income Tax Rules, 1962. c) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition merely accepting that the same transaction has already been taxed in the hands of the other assessee without going into the details. d) The respondent craves the right to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing of the case. A) Your honour, with regard to Ground No. (a) & (c) the respondent would like to justify the deletion of the addition made on three major contentions: a) The assessment for the current assessment year is an unabated assessment and the fact that no incriminating document being found as a result of search at the respondent's premises for the present assessment year no addition could be made. b) It is an established fact diaries bearing identification mark A-12, A26, A28, A33, A36, A37, A38, A39, A40, A41, A42, A43, A44, A46, A47, A48, A51, A52, A53, A56, A57, A59, A64, A65, A66, A69, A73, A77 & A93 based on which addition has been made were seized by the Income Tax Department during a search from the premises of Mr D N Kotgire (more specifically from premises of his employees Shri Ratnakar Kulkarni) and not from the premises of the respondent company. It has always been the respondent's contention that material relied on being not found from the Printed from counselvise.com Page | 16 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 16 of 29 premises of the respondent, said material could not be used under section 153A against the respondent. c) That the entire addition is based on surmises and conjectures rather than any evidence. The AO, himself is completely unsure whether the said transaction belongs to the respondent or not and whether the transaction amount is to be added to the income of the respondent or not (para 8.14 of the assessment order). The sole reason for making an addition in the hands of the respondent company appears to be that the respondent is the flagship company of the \"Loharuka Group\". The addition is not based on any concrete evidence in possession of the assessing officer that the respondent company was party to the aforesaid transactions. No evidence was found either during the search at the respondent's premises or in any statement recorded u/s. 132(4) or 132(4A) or even 131 of the Act based on the documents found in search at the third party's premises to conclude that the above transactions were related to the respondent company. No evidence admittedly has also been found either during the post search enquiries of the search upon the Disha Group or indeed of the search upon the respondents group. No such evidence in support of the fact that the transactions mentioned in the impugned diaries pertained to the present respondent was also found during the assessment proceedings in the case of Shri D.N.Kotgire or those of the respondent company. … the assessment was also completed u/s. 143(3) vide order dated 29.12.2017. Your honours, in these circumstances the power to make addition/disallowance in the assessment order u/s 153A of the Act for the assessment year which had attained finality prior to the date of search are limited on issues having nexus with incriminating material showing undisclosed income found in the course of search. Your honour will appreciate that no incriminating documents relating to respondent were found during the course of search in the case of the \"Loharuka Group\" (as mentioned above also). Further we have also demonstrated that the diaries seized from the premises of \"Mr Kotgire\" does not contain any incriminating noting with respect to the respondent (although it is also being contented that even in case these are incriminating document since they are not found at respondents premises the same are to be considered under 153C proceedings) and moreover the noting in these diaries have been owned up by Mr Kotgire and he has absolved the person named in the diaries by his affidavit dated 29.09.2021. Your honour based on the above facts we, can conclude that no incriminating documents with respect to respondent were found either from Printed from counselvise.com Page | 17 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 17 of 29 its own premises or any other premises. In such circumstances no addition is called for in our opinion in current assessment year as the same is an unabated assessment (not only unabated the assessment in this case has been completed u/s. 143(3) vide order dated 29.12.2017) and any addition in the current assessment year, if any, is to be based on incriminating documents. … Your honours, the most important fact that emerges from the reading of the assessment order, is that the AO, himself is completely unsure whether the said transaction belongs to the respondent or not and whether the transaction amount is to be added to the income of the respondent or not. The sole reason for making an addition in the hands of the respondent company appears to be that the respondent is the flagship company of the \"Loharuka Group\". The addition is not based on any concrete evidence in possession of the assessing officer that the respondent company was party to the aforesaid transactions. No evidence was found either during the search at the respondent's premises or in any statement recorded u/s. 132(4) or 132(4A) or even 131 of the Act based on the documents found in search at the third party's premises to conclude that the above transactions were related to the respondent company. No evidence admittedly has also been found either during the post search enquiries of the search upon the Disha Group or indeed of the search upon the respondents group. No such evidence in support of the fact that the transactions mentioned in the impugned diaries pertained to the present respondent was also found during the assessment proceedings in the case of Shri D. N. Kotgire or those of the respondent company. The above matter needs closer examination in the light of certain judicial pronouncements found to be pertinent for the facts at hand. The Hon'ble Delhi High Court in the case of PCIT (Central) - 3 vs. Anand Kumar Jain (HUF) [ITA NO. 5385/2021. 5516/2021, 5522/2021, 5524/2021, 5525/2021, 5526/2021 & 5540/2021] held that \"A statement recorded u/s 132(4) has evidentiary value but cannot justify the additions in the absence of corroborative material, (ii) The statement also cannot, on a standalone basis, constitute 'incriminating material' so as to empower the AO to frame a block assessment u/s 153A\". … Your honours, this section creates a presumption against the person from whose premises or from the control of whose premises some documents, papers, diaries, books of account etc are found. The presumption is such that this material is presumed to belong to the person from whose premises Printed from counselvise.com Page | 18 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 18 of 29 this material is found and creates an onus upon such person to explain, with evidence and reasoning, the contents of this material or to rebut the contents of the material with cogent evidence and reasoning. In the present case the said diaries that served as the source of the impugned additions were found in the possession and control of the Disha Group. Presumption, if any, would then naturally be created against the persons of Disha Group and not against the Loharuka Group, in general, or this respondent in particular. The learned AO has decided to use the said diaries against the respondent, then this material would be construed as evidence being adduced by the AO and therefore the onus would lie upon the learned AO to prove that the entries therein pertained to transactions of the respondent. It is noticeable that, this has not been attempted by the AO. In his assessment order, the AO has been repeating that it is the respondent who had to explain the transactions noted in the said diaries and that since the respondent could not explain the source of the moneys mentioned in these diaries, it was being presumed that these transactions represented the income of the respondent from unaccounted sources. The learned AO has not adduced any evidence to prove his contention that the said transactions pertained to the respondent. Your honour it is a settled law that the suspicion, however strong it may be, cannot take the place of proof beyond reasonable doubt. Attention is drawn to the decision of Income Tax Appellate Tribunal, Mumbai in the case of Assistant Commissioner of Income Tax Vs. Layer Exports Pvt. Ltd. ITA Nos. 3019, 3020, 3021, 2985 & 2986/Mum 2011 that additions to made on basis of tangible evidence and not solely on basis of estimations and extrapolations theory. … \"...we are having some business partnership with Shri Sunil Loharuka and Shri Anil Loharuka. But we do not have any transaction with Loharuka Group Companies.\" [emphasis supplied] The above is a categorical statement made by Shri D.N. Kotgire in which he is excluding all the group entities of the Loharuka Group of entities, including the present respondent, from having had any transactions with his group. The only business transactions of the Disha Group have been with Shri Anil and Shri Sunil Loharuka. The above positive assertions in respect of Shri Anil and Sunil Loharuka lend further credence to the denial in respect of the other entities of the Loharuka Group. In reply to question number 20, the statement of Shri D.N. Kotgire becomes even more categorical. In reply to the query raised before him as to whether the entries in the impugned diaries were referring to Shri Sunil and Anil Loharuka of M/S Loharuka Infrastructure or not, the deponent replied that he knew Sunil and Anil Loharuka and that they Printed from counselvise.com Page | 19 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 19 of 29 belonged to the Loharuka Group of Kolkata and also that he had a business connection with them; but in respect of the present respondent he stated, \"I have no idea about the M/s. Loharuka Infra Pvt Ltd of Kolkata\" In view of the categorical and repeated denials by the key person of the Disha Group, Shri D.N. Kotgire, that he had any knowledge of the present respondent, accompanied by his positive assertion that while he had a business relationship with Shri Anil and Sunil Loharuka, he had no business relationship with \"any other entity of the Loharuka Group\", it is difficult to give reliance to the observation of the learned AO, that Shri D.N. Kotgire was heading a big group and may not have known the specific name of the present respondent. Even if this last contention of the AO was acknowledged as true, the fact of the positive statement made by Shri D.N. Kotgire that while he had business relations with Anil and Sunil of the Loharuka Group, but not with any other entity of this group would still preclude the existence of any business transactions with the present respondent. This could have led to the possibility, subject to other evidence, that would even then have to be adduced by the AO, that the transactions in the impugned diaries were considered in the hands of Shri Anil and/or Shri Sunil Loharuka. However, from the present facts, reliance placed by the AO upon the statements of Shri D.N. Kotgire or any other personal of Disha Group, it is difficult to see how the said amounts shown in the impugned transactions could have been considered in the hands of the present respondent. Your honour, during the search on Loharuka Group, despite the fact that the Department had in its possession, the diaries found in the Search upon the Disha Group, no findings have been brought on record, either during assessment or post search proceedings that could have been raised during the search upon Loharuka Group during an examination or otherwise of any of the key persons of the Group or from any person who was in the know of things in the case of the respondent or even after the search. It is strange that no queries were raised in connection with the said diaries. This fact indicates that the Department was never sure that the said amounts had to assessed in the hands of the respondent belonging to the Loharuka Group. Explanation to subsection 132(4) is a critical provision in such cases. The said subsection and its explanation are reproduced hereunder for ready reference. Even if the said transactions could have been established to be with the Loharuka Group, of whose member the respondent is, it is no one's case that the name of the respondent was even mentioned at any point of time or that it emerged from either of the two searches, or from any post search enquiries or from any investigation conducted during the assessment of the Printed from counselvise.com Page | 20 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 20 of 29 respondent or any of its group members or of the members of the Disha Group. In fact the assessment order itself shows that the AO was seized of this problem and has tried to deal with it, albeit without making any investigative efforts. The AO has mentioned in his order that the problem before him was to ascertain if the impugned addition could indeed be made in the hands of the respondent or not. Thereafter, he has gone into a discussion of the fact that, of the entire Loharuka Group, the only assessee who had the financial wherewithal to make the said transactions, was the respondent. He has stated that the respondent was the flagship company of the Group and was into real estate projects, therefore it would stand to reason that the respondent had transacted with the Disha Group. These speculations, however, can at best be seen within the realm of conjectures and surmises as the respondent has been insisting. Assessments can hardly be made upon such conjectures. No evidence from the material on record that the said transactions had any connection whatsoever with the respondent company. In the absence of any evidence or even a statement from anyone, it is unclear how the AO could have presumed - even if the said transactions were, for the sake of argument, granted to be transactions of the respondent's Loharuka Group (which connection had also not been established by the AO), that the said transactions pertained to the present respondent only and to no one else in the group. The AO has not been able to bring on to record any form of connection, however tenuous, of the respondent to the said transactions. Huge additions, running over several assessment years, made in this manner cannot lawfully be lent any legal support. … Copies of the assessment orders u/s 143(3) read with section 153A, of Shri Devanand Narayan Kotgire, PAN ABRPK1724B, Address: Disha Square, Sutgiri Chowk, Garkhede, Aurangabad, for Ays 2014-15 to 2020-21, filed by us would reveal that the AO has recorded that the assessee, Shri Kotgire, when asked about the entries in the said diaries seized from his premises and the residential premises of his employee - accountant of the Disha Group - Shri Ratnakar Kulkarni, had offered, to tax, unaccounted income over and above the income declared by Shri Kotgire in the return filed u/s 153A of the Act. This additional income has been offered on the basis of the entries in the said diaries and after working out the peak value of credit the AO has applied a suitable net profit rate and brought the entire amount to tax. Further, the AO in the case of Shri Kotgire, has also noted that the diaries contained certain entries showing the earning of interest by Shri Kotgire. These amounts were also added to the income of Shri Kotgire. Printed from counselvise.com Page | 21 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 21 of 29 This procedure has been repeated in the case of the assessment of Shri Kotgire, the key person of the Disha Group, for each and every assessment year from 2014-15 to 2020-21. It is apparent therefore, from the above discussions that Shri Devanand Narayan Kotgire, the key person of the Disha Group, has not only submitted an affidavit that all the income form the diaries seized from the search on his group belong only to him, but has also been assessed in respect of all the transactions shown in these diaries. … In this regard, we would like to draw your honour attention the proposition of law, as brought out by the Hon'ble Calcutta High Court in the case of CIT vs. Dataware (P) Ltd.: ITAT No.263 of 2011, that once a transaction has been accepted in the hands of one assessee, the same transaction should not once again be assessed in the hands of some other assessee who is party to the same transaction. The respondent would like to rely upon the decision elaborating upon a similar proposition of law, from other High Courts. For example in the cases of P.K. Sethi vs. CIT: [2006] 286 ITR 318, Jalan Timbers vs. CIT: 90 Taxman 298, CIT v. Victory Spinning Mills Ltd.: 228 Taxman 69 & CIT v. Pranav Foundations Ltd.: T. C. (A.) NO. 262 OF 2014.. In all the above cited cases the proposition of law that is put forth is that once an amount has been accepted as some person's income, then there can be no scope for assessing the same amount in the hands of some other person by treating this amount as income of this other person(more so in the present case as the nature of recording in the seized document are purportedly that of Loan transaction) In the present context this proposition of law extracted from the above citations would lend support to the respondent's plea that once the said amounts from the same source of seized documents has not only been accepted under affidavit by Shri Devanand Narayan Kotgire, but that the same amounts have also been assessed in the hands of Shri Kotgire, then there is no scope left for assessing the same transactions in the hands of the present respondent, whose name itself not only does not appear in these diaries and documents, but that the involvement of such has been explicitly denied by the main person of the Disha Group (as already discussed earlier). It is quite apparent that the involvement of the present respondent in the impugned transaction is a matter of only inferential conjecture on the part of the learned AO and is not based upon any form of evidence adduced at any stage. In these circumstances it would be unlawful and contrary to facts to make the addition in the hands of the present respondent. B) Your honour, other than our submission made for the contention ground (1) to (3)above , we would further like to state that as far as the appellants second ground of appeal is concerned, it is submitted that there was no Printed from counselvise.com Page | 22 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 22 of 29 violation of provisions laid down under Rule 46A of the LT. Act, 1961 as no new evidence was submitted during the course of appellate proceedings. The Ld. CIT (A) has also agreed that the copies of assessment order etc. were part of department records and does not constitute new evidence as mentioned in Rule 46.” 5. Our attention was also drawn to the provisions of section 153A of the Act and the assessee has relied upon the following decisions: a) Hon'ble High Court, in the case of CIT vs. Kabul Chawla (2016) 380 ITR 573 (Delhi) b) Principal Commissioner of Income Tax, Central 3 versus AbhiSar Buildwell Pvt. Ltd. (Civil Appeal No. 6580 of 2021) c) Mr Trilok Chand Chaudhary vs. ACIT Central Circle 26, New Delhi (ITA NO. 5870/DEL/2017). d) Krishna Kumar Singhania v. Deputy Commissioner of Income Tax, Company Circle - 3(3) reported in [2017] 88 taxmann.com 259 (Kolkata - Trib.) e) Mani Square Ltd. Vs. Assistant Commissioner of Income Tax, CC-3(2), Kolkata [2020] 118 taxmann.com 452 (Kolkata - Trib.)/[2020] 83 ITR(T) 241 (Kolkata - Trib.)[06-08-2020] 6. The Ld. DR furnished a response from the Ld. AO in respect of the new evidences accepted by the Ld. CIT(A) in violation of Rule 46A of the Income Tax Rules, 1962 which was filed vide letter dated 05.03.2025 and is reproduced as under: “2. In this case the following enumerated point was mentioned in the Grounds of appeal at Sl. No. 2, which is read as under: \"That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition after accepting new evidences without invoking Rule 46A of the income Tax axt,1961.” 3. Vide letter mentioned under reference, a clarification was sought by your honour with respect to above grounds of appeal. It was stated that as per assessment order and CIT(A) order, no new evidences were accepted by CIT(A) which was not submitted by the assessee before AO or were not available with the AO. Printed from counselvise.com Page | 23 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 23 of 29 Further, it was requested to verify the assessment records and point out the new evidences which were accepted by the CIT(A) in violation of Rule 46A. Clarification as sought 4. Accordingly, the assessment record and 250 order for the AY 2015-16 passed by the Ld. CIT(A) are perused and examined. On perusal of point No. viii, page No 45 of the CIT(A) order, it is found that during the course of appellate proceedings before the Ld. CIT(A), the assessee submitted the following enumerated facts of the case, which is read as under:- \"The appellant also pointed out that in this case of presently impugned transactions, Mr. D.N. Kotgire had already owned up the entire transactions of the seized diaries by filing an affidavit before his assessing officer and in such affidavit, he has specifically mentioned that the transactions, names mentioned therein are not related to the parties concerned and he himself has owned up all transaction. He has also offered tax and interest based an the notings in the diaries. The appellant has submitted a copy of the said affidavit and the assessment order of Mr D.N. Kotgire in this regard. It is seen from these that the contents of these diaries have been considered for the purpose of determination of tax by Mr D.N. Kotgire. In light of the above appellant has challenged the inference drawn by the assessing officer in his case.\" 5. However, during the course of assessment proceedings, the above facts of the case was neither submitted by the assessee before the AO nor put forward by the Ld. CIT(A) before the AO for remand proceedings. As such, the Ld. CIT(A) has accepted new evidences without tailing for remand report which is in violation of Rule 46A of the Income Tax Rules, 1962. {emphasis supplied} 6. The above facts of the case is being submitted after taking approval from the Ld. POT, Central-2, Kolkata vide F. No. Pr. CIT(C)/Kol 2/253/ITAT/2024-25/9841 dt. 03.03.2025.” 7. We have considered the submissions made and also gone through the facts of the case. It is a matter of record as is mentioned in the assessment order that in the diaries which were seized from the premises of Shri Kotgire, the owner of the Disha Group certain transactions of cash pertaining to various concerns and individuals of Disha, Rajpal and Loharuka groups for the past 10 years. Shri Kotgire and his employees accepted in their statements u/s 132(4) of the Act Printed from counselvise.com Page | 24 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 24 of 29 that these cash transaction were not recorded in the books of account. However, in the name of the recipient abbreviations like DNK HL LOHARUKA, HL LOHARUKA, DNK HL LOHARUKA GROUP are mentioned and money has also been purportedly given. The Ld. AO distinguished the case of Shri V.C. Shukla and held that if the statement of Mr. Kotgire is interpreted in its totality it becomes clear that he never denied the details of transactions reflected therein as true and assertively confirmed/admitted that all the purported transactions were made with the Loharuka Group of Kolkata though he could not point out the name of the assessee with which each transaction was happened. The Ld. AO presumed that the other part of purported transaction must be an assessee belonging to Loharuka Group of Kolkata managed and controlled by Shri Anil Loharuka and Shri Sunil Loharuka. Further facts as per para 8.10, 8.11, 8.12 till 8.14 in the assessment order are as under: “8.10 The assessee reiterated that the said diaries was not found in the premises of the Loharuka Group but the owner of the diaries, Mr. Kotgire did indicate that this 'Loharuka Group' is the 'Loharuka Group of Kolkata which is his business partner. Therefore the denial of the assessee group is only an afterthought because in some transaction, the name of Anil Loharuka, Sunil Loharuka and Rahul Jain are also mentioned. The assessee contended further that Mr. Kotgire might have so stated to save himself and its companies from allegation of the evasion, But it is not an acceptable contention as I do not find any motive on his part to tell so. The assessee has also cited the applicability of sec. 132(A), 132(5) & sec. 66 of the I.T. Act. But in this facts and circumstances, these sections are not applicable. 8.11 Purported transactions were found in the diaries in possession of Mr. Kotgire who is the business partner of the assessee group. That supported with corroborated evidence in the form of the statement of Mr. Kotgire admitting implicitly the involvement of the assessen group clearly justify the fact of evasion of tax in the hands of the assessee. 8.12 The assessee has further contended that the purported transactions detected in the diaries were not in the possession of the assessee but in the Printed from counselvise.com Page | 25 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 25 of 29 possession of Mr. Kotgire. Therefore onus is on Mr. Kotgire to explain it. It is to be noted here that Mr. Kotgire has taken the reference of 'Loharuka Group of Kolkata' managed and controlled by Anil Loharuka, and Sunil Loharuka who is known to him as 'Loharuka Group' of Kolkata. He also stated that \"Loharuka Group of Kolkata is their business partner in real estate business. Therefore one Mr. Kotgire has referred only the 'Loharuka Group of Kolkata' then it is crystal clear that entries in the name of \"Loharuka Group' are the only persons who were meant in those purported transactions. Therefore the onus now shifts to the key persons of \"Loharuka Group of Kolkata' to explain the nature and source of the fund (i.e. money) which was paid to Disha Group headed by Mr. Kotgire. Mr. Kotgire also accepted that his group has received such amounts on those respective dates from the 'Loharuka Group' and he also added that he knows only 'Loharuka Group of Kolkata'. Therefore it is simple to understand the purported payments were made by 'Loharuka Group of Kolkata only which is headed by Anil Loharuka and Sunil Loharuka. 8.13 But the assessee group has outright denied that the \"Loharuka Group' as found in these diaries are not their group even though they are in regular business in partnership with Disha Group and Mr. Kotgire implicitly confirmed the same in indirect way as analysed above. 8.14 It is a fact that no evidence is in the hands of the department by which it can be clearly Scertained that which particular concern of the assessee group was involved in the purported transactions. But the assessee group has also denied their involvement in the purported transactions. Therefore there is no other way to ascertain the name of the assessee in whose hand the same is to be assessed as income. But the findings brought on record as discussed supra is sufficient to draw the inference that the information of money (or fund) reflected 1.1 purported diaries belong to this assessee group. Under the circumstance it is found that the assessee is the flagship company of the 'Loharuka Group' which has been engaged in real estate business for a considerable period and it is natural that the money which has been established to have transferred to the 'Disha Group must have been generated in its hand. Therefore the same should reasonably and fairly assessed in the hands of this assessee.” 8. Thus, a perusal of the reasons mentioned by the Ld. AO shows that the group had several other companies and not just Loharuka Infrastructure Pvt. Ltd. which is separately assessed to tax. A perusal of the details filed in the paper book shows that some of them were Loharuka Tekriwal Tie Up Pvt Ltd, Loharuka Tekriwal Vanijya Pvt Ltd, Printed from counselvise.com Page | 26 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 26 of 29 Loharuka Tekriwal Vyapaar Pvt Ltd, Loharuka Developers Pvt Ltd, Loharuka Infrastructure Pvt Ltd which are all mentioned at Annexure- 8 of Inventory of Property Deeds found from the residential cum business premises of Sri Anil Kumar Loharuka, Sri Sunil Kumar Loharuka and others as per the Panchnama drawn on 21.01.2020. That being so it was incumbent upon the Ld. AO to identify the recipients of the money which is also not clear as from the statements of Mr. Kotgire or any other persons that they had disclosed the transactions recorded in these diaries as their income although a statement to that effect was made. The Ld. Assessing Officer, in case it wanted to assign all the transactions to only one entity, had the option to lift the corporate veil as held in the case of McDowell & Co. Ltd. v CTO 154 ITR 148 (SC) and assessed at once place but he has not done so and the assessee has been saddled with the liabilities relating to such alleged unexplained transactions which could be relating to other legal entities. A clear mention is made in the diaries, as is reproduced in the assessment order, that the recipients of the amount were DNK HL Loharuka and others and the payments were also to HL Loharuka etc. The total receipts from Loharuka Group to Disha Group of Sri Kotgire were ₹12,84,13,840/- as per para 5 of the assessment order and on year- wise break-up of the total receipts, an amount aggregating to ₹2,24,83,840/- was found to have been handed over to the Disha Group on the days reflected in the said diaries in the FY 2014-15 relevant for AY 2015-16 which has been added u/s 69 of the Act. There is some merit in the argument of the assessee that nowhere the name of the assessee company is mentioned so there was no justification for making the addition in the hand of the company more so when the concerned persons denied having any transaction with the company and had only Printed from counselvise.com Page | 27 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 27 of 29 relationship with Sri Anil Loharuka and Sri Sunil Loharuka. Some other names like Manoj Goradiya, Rahul Jain etc. are also mentioned in the documents therefore, either the addition was to be made in the hand of the individual Sri Anil Loharuka and Sri Sunil Loharuka or the transactions relating to the specific companies of the assessee were to be identified so as to make the addition in the hand of the concerned entity. However, Both Shri Anil Loharuka and Shri Sunil Loharuka are the key persons of the company and the company functions through the key management personnels, hence non-mention of the name of a legal entity cannot fully absolve the company from the purview of the provisions of the Act in respect of the entries found in the seized documents. The Ld. CIT(A) has also accepted that the amount has been disclosed by the persons from whose possession the documents were found and seized. However, what is the amount admitted in their respective returns of income has not been worked out. Once there is incriminating evidence found which has a link with the assessee group, it was incumbent upon the Ld. AO as well as the Ld. CIT(A) to segregate the transactions and make specific additions/confirm the same or allow relief in respect of the same on failure/compliance by the assessee to furnish justified explanation after examining the owner of the diaries as the powers of the Ld. CIT(A) are coterminous with those of AO and he can do what AO has not done and vice versa as per law. Since the same does not appear to have been done and prima facie the evidences appear to indicate receipt of money by the group concerns of the assessee, the order of the Ld. CIT(A) is hereby set aside with the direction that the amount in these seized documents should be worked out and quantified and also ascertained as to which persons of Disha Group or Sri Kotgire and his employees have disclosed these transactions in their individual Printed from counselvise.com Page | 28 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 28 of 29 returns of income by calling for a remand report from the Ld. AO and the explanation of the owners of the diaries should also be considered before arriving at a conclusion either for deleting the addition or confirming the same. In the course of the remand report to be called for from the Ld. Assessing Officer, the assessee shall produce evidences in support of the claim whether any of these transactions has been owned up and disclosed by any other person so as to exclude them in the hands of the assessee and also file evidences that these transactions and the abbreviations used thereon do not pertain to the assessee but to other concerns of the Group in whose hands the additions ought to have been made. Hence, for statistical purposes the appeal of the Revenue is allowed. 9. As regards the assessment years 2016-17 and 2017-18 since the issues are similar, therefore, the findings for AY 2015-16 are mutatis mutandis applicable for other assessment years as well and the appeals for those assessment years are also allowed for statistical purposes. 10. In the result, all the appeals filed by the Revenue in IT(SS)A Nos. 93, 94 & 95/KOL/2023 are allowed for statistical purposes. Order pronounced in the open Court on 16th October, 2025. Sd/- Sd/- [Duvvuru RL Reddy] [Rakesh Mishra] Vice President (KZ) Accountant Member Dated: 16.10.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 29 I.T.(S.S.)A. Nos.: 93, 94 & 95/KOL/2023 AYs: 2015-16, 2016-17 & 2017-18 Loharuka Infrastructure Pvt. Ltd. Page 29 of 29 Copy of the order forwarded to: 1. DCIT, CC-3(3), Kolkata. 2. Loharuka Infrastructure Pvt. Ltd., DC-9/28, Loharuka Niket, Shastri Bagan, Deshbandhunagar, Baguihati, Kolkata, West Bengal, 700059. 3. CIT(A)-21, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "