DCIT CENTRAL CIRCLE - 1, INDORE, INDORE V. SHRI SURYANSH PORWAL, INDORE

ITSSA 60/IND/2023

AI Insights

The case involves multiple appeals by the revenue against the orders of the CIT(A) which had deleted additions made by the AO on various grounds including unexplained cash deposits and unexplained cash credits over several assessment years from 2017-18 to 2021-22. The primary legal contention revolved around whether the CIT(A) was justified in deleting these additions based on the absence of incriminating material and the merits of the explanations provided by the assessee regarding the sources of the deposits and credits. The ITAT found merit in some of the revenue's arguments, particularly concerning the procedural aspects of how the additions were initially assessed and the need for a more thorough examination of the documents and explanations provided by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713075 (ITAT-INDORE)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Assessment Year: 2019-2020
• Other Referred Cases: PCIT Vs. Abhishar Buildwell Pvt. Ltd., B Kishore Kumar vs. 234 Taxman 771(SC), Best Infrastructure (India) P Ltd [2017] 84 taxmann.com 287 (Delhi)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEERESPONDENTTOOKLEADTOMAKE; FORREVENUESTRONGLYOPPOSEDTHEORDEROFCIT A; FORREVENUERELIEDUPONTHEORDEROFAO; FORREVENUEHASNOTSHOWNANYTHING; FORREVENUERELIEDUPONTHEORDEROFAO.HE; SHRIRAM KUMAR YADAV
• Assessee Lawyers: PRINTED FROM COUNSELVISE.COM; SHRIASHISH GOYAL; WAYOFCOMMISSIONFROMACTIVITYOFSTAMPSVENDING; WAY; MERELY
• Keywords: Set aside; Additional evidence; Corroborative evidences; Unexplained cash credit; Search and seizure; Assessment record
• Section: 132; 153A; 139

Judgement Text

"Page 1 of 82 आयकरअपीलीयअिधकरण,इंदौरɊायपीठ,इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER IT(SS)A Nos.58 to 62/Ind/2023 (AY:2017-18 to 2021-22) DCIT, Central, Circle -1 Indore बनाम/ Vs. Suryansh Porwal, 275, Jawahar Marg, Indore (Assessee/Appellant) (Revenue/Respondent) PAN:BLBPP4191E Revenue by Shri Ram Kumar Yadav, Shri Anoop Singh, CIT-DRs Assessee by Shri Ashish Goyal, Advocate Shri N.D. Patwa, Advocate CA Ms. Shelly Maheshwari, ARs Date of final Hearing 17.06.2025 Date of Pronouncement 30.07.2025 आदेश/ O R D E R Per Bench: The captioned five (5) appeals are filed by revenue against a consolidated order of first-appeal dated 11.08.2023 passed by learned Commissioner of Income-tax (Appeals)-3, Bhopal [“CIT(A)”], which in turn arises out of a consolidated assessment-order dated 08.09.2022 passed by ACIT (Central)- 1, Indore [“AO”] u/s 153A/143(3) of the Income-tax Act, 1961 [“the Act”] for five Assessment-Years [“AY”] 2017-18 to 2021-22. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 2 of 82 2. The background facts leading to present appeals are such that the assessee is an individual deriving income from business and profession, interest and other sources. A search u/s 132 was conducted upon “JRG Group” including assessee on 12.01.2021. Pursuant to search proceeding, the assessments of assessee were framed for six preceding AYs 2015-16 to 2020-21 u/s 153A/143(3) and for current AY 2021-22 u/s 143(3). Presently, in these five appeals, we are concerned with AYs 2017-18 to 2021-22 for which the AO made assessments after making certain additions as under: Nature of addition AY 2017-18 2018-19 2019-20 2020-21 2021-22 1 Unexplained deposits in Bank A/cs 1,03,97,125 1,25,66,600 80,03,915 25,86,500 99,85,900 2 Unexplained cash credits -- 16,50,000 2,79,00,000 76,00,000 -- 3 Interest on unexplained credits -- 23,500 4,82,000 5,69,000 4,01,597 2.1 Aggrieved, the assessee carried matters in first-appeals before CIT(A) and succeeded. Now, the revenue has come in next appeals assailing the orders of first-appeals passed by CIT(A). 3. The assessee also filed three (3) Cross-Objections No. 20/Ind/2024 to 22/Ind/2024 for AYs 2017-18, 2020-21 and 2021-22 but subsequently requested to withdraw those Cross-Objections. Therefore, we have already dismissed those Cross-Objections vide a separate order dated 30.04.2025. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 3 of 82 4. Since these five appeals emanate from common orders of lower- authorities and the issues raised are also common, they were heard together at the request of parties and are being disposed of by this consolidated order for the sake of convenience, brevity and clarity. 5. The grounds raised in this appeals are as under: ITA No. 58/Ind/2023 – A.Y. 2017-18: “1. Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,03,97,125/- made on account of unexplained cash deposit u/s 69A? 2. [2A] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,03,97,125/- made on account of unexplained cash deposit by holding that no incriminating material found? 3. [2B] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,03,97,125/- made on account of unexplained cash deposit by holding that no incriminating material found, ignoring that a) As per ITR filed by the assessee (refer Annex-1 & 2), the assessee has disclosed only one account maintained in Axis Bank, while the addition has been made on the basis of cash deposits in the two other accounts maintained in Axis Bank and State Bank of India, which were not disclosed in the ITR and were found / disclosed during the course of search and seizure operation during the assessee's statement recorded u/s 132(4) (refer Annex-3), which constituted incriminating material? 4. [2B] b) Apex court in B Kishore Kumar 234 Taxman 771(SC) and Delhi High Court in Best Infrastructure (India) P Ltd [2017] 84 taxmann.com 287 (Delhi) have held that even a statement given during search u/s 132(4) can be incriminating? c) Though the assessee maintained various bank accounts, only one bank account was disclosed by the assessee in his ITR and it is due to search & seizure operation other bank accounts were disclosed by the assessee in his statement recorded u/s 132(4) (refer Annex-3), thereby Ld. CIT(A) erred in holding that no incriminating material was found? d) The assessee disclosed only one bank account in his ITR and he disclosed his further set of bank accounts, due to search & seizure operation, in his statement recorded u/s 132(4) (refer Annex-3), accordingly Ld. CIT(A) erred in holding that all bank accounts were submitted by the assessee during assessment proceedings? Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 4 of 82 5. [3A] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962? 6. [3B] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962, ignoring that: a) During assessment proceedings, the assessee was asked to submit the copies of personal balance sheet, profit and loss account, capital account, cash book etc., however, the assessee has not submitted these documents/details and instead, the assessee himself admitted and submitted during the assessment proceedings that he has not maintained statement of affairs for any year? b) Assessee has not submitted the 'Stamp Account' during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in accepting the total value of e-stamp purchased of Rs. 6,56,25,000/- on the basis of such 'Stamp Account'? 7. [3B] c) Assessee has not submitted the Receipt & Payment account, cash flow statement and stamp account during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in relying upon these in violation of Rule 46A? d) The new fact of rate commission @ 1.5% on purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? e) Adequate opportunity has been provided to the assessee during the assessment proceedings and, accordingly, the fresh / additional evidence submitted during appellate proceedings may be an afterthought? 8. [4] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the total value of e-stamp purchased of Rs. 6,56,25,000/- on the basis of 'Stamp Account', without appreciating that: a) Such amount and account was not submitted during the course of assessment proceedings and Id. CIT(A) erred in admitting it in violation of Rule 46A regarding admission of additional evidence? b) As per ITR filed by the assessee, the assessee has shown gross receipts of Rs. 9,84,375/-? 5. Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the gross commission @ 1.5% of the value of e-stamp while the assessee has not submitted any details of the amount of Rs. 6,56,25,000/- during the course of assessment proceedings? 9. [6] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, cash flow statement and stamp account without calling remand report as the same was not submitted during the course of assessment proceedings in violation of provisions of Rule 46A regarding admission of additional evidence? 10. [7] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in accepting the new facts of commission @ 1.5% of purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 5 of 82 11. [8] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, ignoring the vital evidence that as per return filed by the assessee cash in hand shown Rs. 80,950/- and the assessee has shown cash in hand Rs. 2,34,470/- in Receipt & Payment account?” ITA No. 59/Ind/2023 – A.Y. 2018-19: “1. Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,25,66,600/- made on account of unexplained cash deposit u/s 69A? 2. [2A] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,25,66,600/- made on account of unexplained cash deposit by holding that no incriminating material found? [2B] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,25,66,600/- made on account of unexplained cash deposit by holding that no incriminating material found, ignoring that: 3. a) As per ITR filed by the assessee (refer Annex-1 & 2), the assessee has disclosed only one account maintained in Axis Bank, while the addition has been made on the basis of cash deposits in the three other accounts maintained in Axis Bank, State Bank of India and ICM, which were not disclosed in the ITR and were found / disclosed during the course of search and seizure operation during the assessee's statement recorded u/s 132(4) (refer Annex-3), which constituted incriminating material? b) The documents related to 'Radhey Krishna Vihar Colony' (which was not disclosed by the assessee in his ITR) were found and seized (refer Annex-4) and on the basis of which the assessee has stated in statement recorded u/s 132(4) (refer Annex- 3) that 20% of investment in the project was made by him and remaining 80% investment was from loan? c) the unsecured loans were not disclosed in the ITR filed by the assessee and have been found as the result of search and seizure action? 4. [2B] d) Apex court in B Kishore Kumar 234 Taxman 771(SC) and Delhi High Court in Best Infrastructure (India) P Ltd [2017] 84 taxmann.com 287 (Delhi) have held that even a statement given during search u/s 132(4) can be incriminating? e) Though the assessee maintained various bank accounts, only one bank account was disclosed by the assessee in his ITR and it is due to search & seizure operation other bank accounts were disclosed by the assessee in his statement recorded u/s 132(4) (refer Annex-3), thereby Ld. CIT(A) erred in holding that no incriminating material was found? f) The assessee disclosed only one bank account in his ITR and he disclosed his further set of bank accounts, due to search & seizure operation, in his statement recorded u/s 132(4) (refer Annex-3), accordingly Ld. CIT(A) erred in holding that all bank accounts were submitted by the assessee during assessment proceedings? Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 6 of 82 5. [3A] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962? [3B] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962, ignoring that: a) During assessment proceedings, the assessee was asked to submit the copies of personal balance sheet, profit and loss account, capital account, cash book etc., however, the assessee has not submitted these documents/details and instead, the assessee himself admitted and submitted during the assessment proceedings that he has not maintained statement of affairs for any year? 6. [3B] b) Assessee has not submitted the 'Stamp Account' during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in accepting the total value of e-stamp purchased of Rs. 6,63,73,333/- on the basis of such 'Stamp Account'? c) Assessee has not submitted the Receipt & Payment account, cash flow statement and stamp account during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in relying upon these in violation of Rule 46A? d) The new fact of rate commission @1.5% on purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? e) Adequate opportunity has been provided to the assessee during the assessment proceedings and, accordingly, the fresh/additional evidence submitted during appellate proceedings may be an afterthought? 7. [4] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the total value of e-stamp purchased of Rs. 6,63,73,333/- on the basis of 'Stamp Account', without appreciating that: a) Such amount and account was not submitted during the course of assessment proceedings and Id. CIT(A) erred in admitting it in violation of Rule 46A regarding admission of additional evidence? b) As per ITR filed by the assessee the assessee has shown gross receipts of Rs. 9,95,600/-? 8. [5] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the gross commission @ 1.5% of the value of e-stamp while the assessee has not submitted any details of the amount of Rs. 6,63,73,333/- during the course of assessment proceedings? [6] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, cash flow statement and stamp account without calling remand report, as the same was not submitted during the course of assessment proceedings, in violation of provisions of Rule 46A regarding admission of additional evidence? 9. [7] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in accepting the new facts of commission @ 1.5% of purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? [8] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, ignoring the vital evidence that as per return filed by the assessee cash in hand shown Rs. 50,150/- and the Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 7 of 82 assessee has shown cash in hand Rs. 2,27,330/- in Receipt & Payment account, and erred in ignoring that such contradiction may be a firm indication that the assessee is filing fresh evidences as an afterthought? 10. [9] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in holding that no addition was made on the basis of incriminating material, without appreciating that: a) addition of Rs. 1,25,66,600/-made on account of unexplained cash deposit only due to bank accounts uncovered during the search & seizure operation (refer Annex-1 & 2)? b) an amount of Rs. 16,50,000/- was added (and confirmed by Ld. CIT(A)) to the total income on account of unsecured loan which was taken by the assessee in the project 'Radhey Krishna Vihar Colony', which got discovered due to search & seizure proceedings (refer Annex-3 & 4)? 11. [10] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in deleting the addition of Rs. 23,500/- made by the AO on account of interest paid by the assessee regarding unsecured loans? ITA No. 60/Ind/2023 – A.Y. 2019-20: “1. [1] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 80,03,915/- made on account of unexplained cash deposit u/s 69A? [2A] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 80,03,915/- made on account of unexplained cash deposit by holding that no incriminating material found? [2B] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 80,03,915/- made on account of unexplained cash deposit by holding that no incriminating material found, ignoring that: 2. [2B] a) As per ITR filed by the assessee (refer Annex-1 & 2), the assessee has disclosed only one account maintained in Axis Bank, while the addition has been made on the basis of cash deposits in the two other accounts maintained in State Bank of India and Bank of Baroda, which were not disclosed in the ITR and were found /disclosed during the course of search and seizure operation during the assessee's statement recorded u/s 132(4) (refer Annex-3), which constituted incriminating material? b) The documents related to 'Radhey Krishna Vihar Colony' (which was not disclosed by the assessee in his ITR) were found and seized (refer Annex-4) and on the basis of which the assessee has stated in statement recorded u/s 132(4) (refer Annex- 3) that 20% of investment in the project was made by him and remaining 80% investment was from loan? c) the unsecured loanswere not disclosed in the ITR filled by the assensee and have been found as the result off search and seizure action? 3. [2B] d) Apex court in B Kishore Kumar 234 Taxman 771(SC) and Delhi High Court in Best Infrastructure (India) P Lad [2017] 84 naman.com 287 (Delhi) have held that even a statement given during search u/s 132(4) can be incriminating? e) Though the assessee maintained various bank accounts, only Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 8 of 82 one bank account was disclosed by the assessee in his ITR and it is due to search & seizure operation other bank accounts were disclosed by the assessee in his statement recorded u/s 132(4) (refer Annex-3), thereby Ld. CIT(A) erred in holding that no incriminating material was found? f) The assessee disclosed only one bank account in his ITR and be disclosed his further set of bank accounts, due to search & seizure operation, in his statement recorded u/s 132(4) (refer Annex-3), accordingly Ld. CIT(A) erred in holding that all bank accounts were submitted by the assessee during assessment proceedings? 4. [3A] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962? [3B] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962, ignoring that: a) During assessment proceedings, the assessee was asked to submit the copies of personal balance sheet, profit and loss account, capital account, cash book etc., however, the assessee has not submitted these documents/details and instead, the assessee himself admitted and submitted during the assessment proceedings that he has not maintained statement of affairs for any year? 5. [3B] b) Assessee has not submitted the 'Stamp Account' during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in accepting the total value of e-stamp purchased of Rs. 8,65,33,333/- on the basis of such 'Stamp Account'? c) Assessee has not submitted the Receipt & Payment account, cash flow statement and stamp account during the course ofassessment proceedings and, therefore, the Ld. CIT(A) has erred in relying upon these in violation of Rule 46A? d) The new fact of rate commission @1.5% on purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? e) Adequate opportunity has been provided to the assessee during the assessment proceedings and, accordingly, the fresh/additional evidence submitted during appellate proceedings may be an afterthought? 6. [4] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the total value of e-stamp purchased of Rs. 8,65,33,333/- on the basis of 'Stamp Account', without appreciating that: a) Such amount and account was not submitted during the course of assessment proceedings and Id. CIT(A) erred in admitting it in violation of Rule 46A regarding admission of additional evidence? b) As per ITR filed by the assessee the assessee has shown gross receipts of Rs. 12,98,000/-? 7. [5] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the gross commission @ 1.5% of the value of e-stamp while the assessee has not submitted any details of the amount of Rs. 8,65,33,333/- during the course of assessment proceedings? [6] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, cash flow statement and stamp account without calling remand report, as the same was not submitted Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 9 of 82 during the course of assessment proceedings, in violation of provisions of Rule 46A of the Income Tax Rules? [7] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in accepting the new facts of commission @ 1.5% of purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? 8. [8] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, ignoring the vital evidence that as per return filed by the assessee cash in hand shown Rs. 63,200/- and theassessee has shown cash in hand Rs. 3,02,465/-in Receipt & Payment account, and erred in ignoringthat such contradiction may be a firm indication that the assessee is filing fresh evidences as an afterthought? [9] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in holding that no addition was made on the basis of incriminating material, without appreciating that: a) addition of Rs. 80,03,915/- made on account of unexplained cash deposit only due to bank accounts uncovered during the search & seizure operation (refer Annex-1 & 2)? 9. [9] b) an amount of Rs. 2,79,00,000/- was added (and partly confirmed by Ld. CIT(A)) to the total income on account of unsecured loan which was taken by the assessee in the project 'Radhey Krishna Vihar Colony', which got discovered due to search & seizure proceedings (refer Annex-3 & 4)? 10. [10] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition made on account of unsecured loans of Rs. 11,00,000/- while the assessee was failed to furnish during the assessment proceedings the ITR of lender and bank statement reflecting the said loans transactions? [11] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the ITR and bank statement of the lender in violation of provisions of Rule 46A of the Income Tax Rules? 11. [12] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in deleting the addition of Rs. 4,82,000/- made. by the AO on account of interest paid by the assessee regarding unsecured loans?” ITA No. 61/Ind/2023 – A.Y. 2020-21: “1. [1] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,41,24,359/- made on account of unexplained cash deposit u/s 69A? [2A] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,41,24,359/- made on account of unexplained cash deposit by holding that no incriminating material found? [2B] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 1,41,24,359/- made on account of unexplained cash deposit by holding that no incriminating material found, ignoring that: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 10 of 82 2. [2B] a) As per ITR filed by the assessee (refer Annex-1 & 2), the assessee has disclosed only one account maintained in Axis Bank, while the addition has been made on the basis of cash deposits in three other accounts maintained in Axis Bank, State Bank of India and Canara Bank, which were not disclosed in the ITR and were found /disclosed during the course of search and seizure operation during the assessee's statement recorded u/s 132(4) (refer Annex-3), which constituted incriminating material? b) The documents related to 'Radhey Krishna Vihar Colony' (which was not disclosed by the assessee in his ITR) were found and seized (refer Annex-4) and on the basis of which the assessee has stated in statement recorded u/s 132(4) (refer Annex- 3) that 20% of investment in the project was made by him and remaining 80% investment was from loan? c) the unsecured loans were not disclosed in the ITR filled by the assessee and have been found as the result of search and seizure action? 3. [2B] d) Apex court in B Kishore Kumar 234 Taxman 771(SC) and Delhi High Court in Best Infrastructure (India) P Ltd [2017] 84 taxmann.com 287 (Delhi) have held that even a statement given during search u/s 132(4) can be incriminating? e) Though the assessee maintained various bank accounts, only one bank account was disclosed by the assessee in his ITR and it is due to search & seizure operation other bank accounts were disclosed by the assessee in his statement recorded u/s 132(4) (refer Annex-3), thereby Ld. CTT(A) erred in holding that no incriminating material was found? f) The assessee disclosed only one bank account in his ITR and be disclosed his further set of bank accounts, due to search & seizure operation, in his statement recorded u/s 132(4) (refer Annex-3), accordingly Ld. CIT(A) erred in holding that all bank accounts were submitted by the assessee during assessment proceedings? 4. [3A] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962? [3B] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962, ignoring that: a) During assessment proceedings, the assessee was asked to submit the copies of personal balance sheet, profit and loss account, capital account, cash book etc., however, the assessee has not submitted these documents/details and instead, the assessee himself admitted and submitted during the assessment proceedings that he has not maintained statement of affairs for any year? 5. [3B] b) Assessee has not submitted the 'Stamp Account' during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in accepting the total value of e-stamp purchased of Rs. 8,60,53,333/- on the basis of such 'Stamp Account'? c) Assessee has not submitted the receipt & payment account, cash flow statement and stamp account during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in relying upon these in violation of Rule 46A? d) The new fact of rate commission @1.5% on purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? e) Adequate opportunity has Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 11 of 82 been provided to the assessee during the assessment proceedings and, accordingly, the fresh / additional evidence submitted during appellate proceedings may be an afterthought? 6. [4] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the total value of e-stamp purchased of Rs. 8,60,53,333/- on the basis of 'Stamp Account', without appreciating that: a) Such amount and account was not submitted during the course of assessment proceedings and Id. CIT(A) erred in admitting it in violation of Rule 46A regarding admission of additional evidence? b) As per ITR filed by the assessee the assessee has shown gross receipts of Rs. 12,90,800/-? [5] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the gross commission @ 1.5% of the value of e-stamp while the assessee has not submitted any details of the amount of Rs. 8,60,53,333/- during the course of assessment proceedings? 7. [6] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, cash flow statement and stamp account without calling remand report, as the same was not submitted during the course of assessment proceedings, in violation of provisions of Rule 46A of the Income Tax Rules? [7] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in accepting the new facts of commission @ 1.5% of purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? 8. Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, ignoring the vital evidence that as per return filed by the assessee cash in hand shown Rs. 63,200/- and the assessee has shown cash in hand Rs. 1,46,622/- in Receipt & Payment account, and erred in ignoring that such contradiction may be a firm indication that the assessee is filing fresh evidences as an afterthought? [9] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in holding that no addition was made on the basis of incriminating material, without appreciating that: a) addition of Rs. 1,41,24,359/-made on account of unexplained cash deposit only due to bank accounts uncovered during the search & seizure operation (refer Annex-1 & 2)? 9. [9] b) an amount of Rs. 76,00,000/- was added to the total income on account of unsecured loan which was taken by the assessee in the project 'Radhey Krishna Vihar Colony', which got discovered due to search & seizure proceedings (refer Annex-3 & 4)? 10. [10] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition made on account of unsecured loans of Rs. 76,00,000/- while the assessee was failed to furnish during the assessment proceedings the ITR of lender and bank statement reflecting the said loans transactions? [11] Whether on the facts and on the circumstance of the case and in law, Ld. CIT(A) was justified in accepting the ITR and bank statement of the lender in violation of provisions of Rule 46A of the Income Tax Rules? Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 12 of 82 11. [12] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in deleting the addition of Rs. 5,69,000/- made by the AO on account of interest paid by the assessee regarding unsecured loans?” ITA No. 62/Ind/2023 – A.Y. 2021-22: “1. [1] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 99,85,900/- made on account of unexplained cash deposit u/s 69A? [2A] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 99,85,900/- made on account of unexplained cash deposit by holding that no incriminating material found? [2B] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in deleting the addition of Rs. 99,85,900/- made on account of unexplained cash deposit by holding that no incriminating material found, ignoring that: 2. [2B] a) As per ITR filed by the assessee (refer Annex-1 & 2), the assessee has disclosed only two accounts maintained in Canara Bank, while the addition has been made on the basis of cash deposits in the four other account maintained in State Bank of India Bank of Baroda, Kotak Mahindra Bank and ICM, which were not disclosed in the ITR and were found / disclosed during the course of search and seizure operation during the assessee's statement recorded u/s 132(4) (refer Annex-3), which constituted incriminating material? b) The documents related to 'Radhey Krishna Vihar Colony' (which was not disclosed by the assessee in his ITR) were found and seized (refer Annex-4) and on the basis of which the assessee has stated in statement recorded u/s 132(4) (refer Annex-3) that 20% of investment in the project was made by him and remaining 80% investment was from loan? 3. [2B] c) the unsecured loans were not disclosed in the ITR filed by the assessee and have been found as the result of search and seizure action? d) Apex court in B Kishore Kumar 234 Taxman 771(SC) and Delhi High Court in Best Infrastructure (India) P Ltd [2017] 84 taxmann.com 287 (Delhi) have held that even a statement given during search u/s 132(4) can be incriminating? e) Though the assessee maintained various bank accounts, only one bank account was disclosed by the assessee in his ITR and it is due to search & seizure operation other bank accounts were disclosed by the assessee in his statement recorded u/s 132(4) (refer Annex-3), thereby Ld. CIT(A) erred in holding that no incriminating material was found? 4. [2B] f) The assessee disclosed only one bank account in his ITR and he disclosed his further set of bank accounts, due to search & seizure operation, in his statement recorded u/s 132(4) (refer Annex-3), accordingly Ld. CIT(A) erred in holding that all bank accounts were submitted by the assessee during assessment proceedings? 5. [3A] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 13 of 82 Income Tax Rules, 1962? [3B] Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence filed by assessee during the course of appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962, ignoring that: a) During assessment proceedings, the assessee was asked to submit the copies of personal balance sheet, profit and loss account, capital account, cash book etc., however, the assessee has not submitted these documents/details and instead, the assessee himself admitted and submitted during the assessment proceedings that he has not maintained statement of affairs for any year? 6. [3B] b) Assessee has not submitted the 'Stamp Account' during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in accepting the total value of e-stamp purchased of Rs. 6,88,33,333/- on the basis of such 'Stamp Account'? c) Assessee has not submitted the Receipt & Payment account, cash flow statement and stamp account during the course of assessment proceedings and, therefore, the Ld. CIT(A) has erred in relying upon these in violation of Rule 46A? d) The new fact of rate commission @1.5% on purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? e) Adequate opportunity has been provided to the assessee during the assessment proceedings and, accordingly, the fresh / additional evidence submitted during appellate proceedings may be an afterthought? 7. [4] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the total value of e-stamp purchased of Rs. 6,88,33,333/- on the basis of 'Stamp Account', without appreciating that: a) Such amount and account was not submitted during the course of assessment proceedings and Id. CIT(A) erred in admitting it in violation of Rule 46A regarding admission of additional evidence? b) As per ITR filed by the assessee the assessee has shown gross receipts of Rs. 10,32,500/-? [5] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting the gross commission @ 1.5% of the value of e-stamp while the assessee has not submitted any details of the amount of Rs. 6,88,33,333/- during the course of assessment proceedings? 8. [6] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, cash flow statement and stamp account without calling remand report, as the same was not submitted during the course of assessment proceedings, in violation of provisions of Rule 46A of the Income Tax Rules? [7] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in accepting the new facts of commission @ 1.5% of purchase/sale of stamp while during assessment proceedings the assessee has completely failed to submit these details? 9. [8] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in accepting Receipt & Payment account, ignoring the vital evidence that as per return filed by the assessee cash in hand shown Rs. 48,790/- and the assessee has shown cash in hand Rs. 1,12,926/- in Receipt & Payment account, and erred in ignoring that such contradiction may be a firm indication that the assessee is filing fresh evidences as an afterthought? Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 14 of 82 [9] Whether on the facts and on the circumstances of the case and in law, Ld. CTT(A) was justified in law in holding that no addition was made on the basis of incriminating material, without appreciating that addition of Rs. 99,85,900/- made on account of unexplained cash deposit only due to bank accounts uncovered during the search & seizure operation (refer Annex-1 & 2)? 10. [10] Whether on the facts and on the circumstances of the case and in law, Ld. CIT(A) was justified in law in deleting the addition of Rs. 4,01,597/- made by the AO on account of interest paid by the assessee regarding unsecured loans? 6. For convenience, we would marshal the issues involved in these grounds and adjudicate the related grounds together. Issue of Unexplained Deposit in Bank A/cs – (Ground 1 to 11 of AY 2017-18; Ground 1 to 10 of AY 2018-19; Ground 1 to 8 of AY 2019-20; Ground 1 to 8 of AY 2020-21; Ground 1 to 9 of AY 2021-22): 7. In these grounds, the revenue claims that the CIT(A) was not justified in deleting the additions made by AO u/s 69A on account of unexplained cash deposits in Bank A/c. 8. The AO has dealt this issue in Para 10 of assessment-order. During assessment proceedings, the AO obtained bank statements from assessee and asked assessee to explain the sources of cash deposits made therein. The assessee filed reply submitting that the deposits were made out of earlier cash withdrawals, past savings and the amounts received by assessee from sale of stamps as stamp vendor. The assessee also submitted that the income from activity of stamp vending had already been offered to taxation u/s 44AD/44ADA. The AO, however, rejected assessee’s submission by stating that (i) the assessee has not filed any corroborative evidences in support of cash received from sale of stamps and (ii) the re- Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 15 of 82 deposit of earlier cash withdrawn in bank a/c is also a cooked story. The AO also noted that the assessee submitted reply on last date and filed his own notarized affidavit without supporting documents. The AO considered assessee’s affidavit as self-serving document. Finally, the AO tabulated the amounts of cash deposited in bank a/c; allowed credit of receipts from profession u/s 44AD/44ADA; and treated excess amounts as unexplained moneys u/s 69A. The working made by AO in assessment-order is re- produced below: Accordingly, the AO made additions of Rs. 1,03,97,125/-, 1,25,66,600/-, 80,03,915/-, 25,86,500/- and 99,85,900/- in AYs 2017-18 to 2021-22 with which are concerned in these appeals. 9. During first-appeal, the CIT(A), firstly vide Para 3.2.2 & 3.2.3 of impugned order, deleted the additions for three AYs 2017-18 to 2019-20 on Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 16 of 82 the footing of ‘absence of incriminating material’ following the landmark decision of Hon’ble Supreme Court in PCIT Vs. Abhishar Buildwell Pvt. Ltd. Civil Appeal No. 6580 of 2021 dated 24.04.2023. The order passed by Ld. CIT(A) is extracted below for an immediate reference: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 17 of 82 Hence, all the years under consideration i.e. AYs 2015-16 to 2019-20 are unabated/completed assessment years for the reasons mentioned above. The appellant has submitted that no incriminating material was found in relation to additions made by the Ld. AO in A.Ys. 2015-16 to 2019-20. Since, the A.Ys. 2015-16 to 2019-20 fall under the category of unabated/completed year, the addition could only be made on the basis of incriminating material found during the course of search. I find that search and seizure operation were carried out on 13.01.2021 at bank locker No 1795 at Indore Cloth Market Co- operative Bank Ltd., Itwara Bazar, Indore held in the name of the appellant & his sister Smt Sunayani Porwal. From the said bank locker, only gold and silver jewellery was found and no document was found and seized which is evident from the copy of panchnama on record. Statement of appellant was also recorded on 13.01.2021 regarding jewellery found from bank locker (545.10 gms gold and 574 gm silver only). Search and seizure operation were, also Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 18 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 19 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 20 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 21 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 22 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 23 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 24 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 25 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 26 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 27 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 28 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 29 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 30 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 31 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 32 of 82 10. Thereafter, vide Paras 3.3.2 to 3.3.7 of impugned order, the CIT(A) has also deleted the impugned additions on merit in all five AYs 2017-18 to 2021-22 accepting the sources of deposits explained by assessee. The order passed by Ld. CIT(A) is extracted below for an immediate reference: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 33 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 34 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 35 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 36 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 37 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 38 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 39 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 40 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 41 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 42 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 43 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 44 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 45 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 46 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 47 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 48 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 49 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 50 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 51 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 52 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 53 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 54 of 82 11. Before us, the Ld. AR for assessee/respondent took lead to make submissions. He firstly contended that the CIT(A) is very correct in deleting additions for first three AYs 2017-18 to 2019-20 on the basis of premises of ‘absence of incriminating material’ following the decision of Hon’ble Supreme Court in Abhishar Buildwell (supra). He supported the order of CIT(A) on this count with following submissions: (i) That, during the course of search no incriminating material was found qua the deposits in bank a/cs. The bank a/cs of assessee were Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 55 of 82 maintained in normal course and there was no incriminating material to show any unaccounted transactions in those a/cs. (ii) That, the impugned deposits were made in accounts with SBI, Axis Bank, ICM/ICICI Bank, Bank of Baroda, Canara Bank and Kotak Mahindra Bank and all these accounts were informed by assessee to search-authorities in reply to Q.No. 4 of statements recorded during search (Paper-Book Page 69) and these bank a/cs were not doubted during search. (iii) Further, in reply to Q.No. 19 of statements recorded during search, the assessee instantly replied to authorities that his clients were often giving cash for purchase of stamps which was deposited in assessee’ bank a/cs for payment of Govt. Duty (Paper-Book Page 78). The Q.No. 19 raised by authorities and reply given by assessee are re-produced below an immediate reference: \"Ĥæन19 कृपयायहबताएͩकआपकेकाय[ मɅ ͩकतनालेन-देननगदȣ मɅ ͩकयाजाताहै। उƣर19 – महोदय, Stamp Đयकरनेकेͧलएकईबारclient cash देदेताहैिजसेहम अपनेBank मɅ जमाकराकर Gov. Duty pay करतेहɇ इसकेअलावाहमारेɮवारा नगदȣ मɅ कोईलेन-देननहȣंहोता।\" (iv) That, there was no iota of incriminating material found during search qua the bank a/cs or the transactions in bank a/cs. It was only during assessment-proceeding that the AO asked assessee to produce bank statements and to explain the sources of deposits. Thus, the entire exercise of verification of bank a/cs was initiated by AO during Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 56 of 82 assessment proceeding. This fact is acknowledged by AO himself in Para 10.1 of assessment-order where the AO has noted thus: “During the assessment-proceedings, the assessee was requested to produce bank account statements and asked to establish the genuineness and source of the cash deposits therein with supporting evidences.” (v) That the three AYs 2017-19 to 2019-20 were unabated/completed assessment years as concluded by Ld. CIT(A) in Para 3.2.2 of impugned order. The revenue does not have dispute against conclusion taken by Ld. CIT(A). Therefore, the decision of Abhishar Buildwell (supra) was applicable and rightly applied by CIT(A). 12. Thereafter, Ld. AR proceeded to contend that the CIT(A) is also correct in deleting additions for all five AYs 2017-18 to 2021-22 on merit. Ld. AR made following submissions in this regard: (i) He submitted that the deposits in bank a/cs were made from two sources, namely (a) amounts received from customers towards sale of stamps and (b) deposits out of earlier cash withdrawals and past savings and the assessee has consistently explained these sources to AO as well as CIT(A) and adhering to his submission before ITAT also. (ii) In so far as the first source i.e. receipts from sale of stamps is concerned, Ld. AR submitted that the assessee is a law graduate by profession and registered as notary public and having licence of stamp vendor from 29.07.2015, Copies of licences granted/renewed from Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 57 of 82 time to time are placed in Paper-Book at Pages 119-122. The assessee offered income from activity of stamp vendor under presumptive provisions of section 44AD/44ADA and therefore having immunity from maintaining regular books of accounts. Ld. AR made following detailed submission in his Written-Synopsis qua this stamp vending business carried by assessee: “1. Modus-operandi:- It is relevant to mention that w.e.f. 29.07.2015, the Registration Department, Government of M.P. has made e-registry and issuance of e-stamps for immovable properties mandatory. The licensed stamp vendors (named as service providers by GoMP) have their individual account with 'Government treasury’. The stamp vendors, in many cases, collect the stamp duty and registration fees from respective customers and pay the same to 'Government treasury’ online from its bank accounts. The stamp vendor receives commission/discount charges @ 1.50% of the value of e-stamp issued by the 'Government treasury’. To substantiate the rate of commission @ 1.50% of the value of e-stamp, copies of some pages of his e-stamp account are placed at ΡΒ 201-205. However, the stamp vendor does not get any amount on 'registration fees'. In the trade of 'stamp vendor', the assessee collects the amount of 'stamp duty and registration fees' from the clients in advance before the date of execution of e-registry. 2. The gross commission/discount earned from the 'stamp vendor’ activities vis-à-vis the stamp purchased and the cash deposits is as under: - Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 58 of 82 3. It is noteworthy here that if we peruse the bank statements of the appellant, for the relevant years, it becomes apparent that after each major cash deposit, amount is transferred to the Government treasury for purchase of e-stamps. Thus, the nexus of cash collection from clients and cash deposits is established beyond doubt. Consequently, the source of cash deposits into bank accounts stand explained. Some instances are narrated hereunder: a. On 19.05.2017, cash deposit of Rs. 2,50,000 was made in Axis Bank account (PB-148). The above sum was paid to Govt treasury on same day for purchase of stamps. b. On 23.05.2017, cash deposit of Rs. 2,10,000 was made in Axis Bank account (PB-148). Rs. 1,90,000 was paid to Govt treasury on same day for purchase of stamps. c. On 29.05.2017, cash deposit of Rs. 40,000 was made in Axis Bank account (PB-149). Rs. 1,40,000 was paid to Govt treasury on same day for purchase of stamps. d. On 20.06.2017, cash deposit of Rs. 1,54,000 was made in Axis Bank account (PB-150). Rs. 1,60,000 was paid to Govt treasury on 21.06.2017 for purchase of stamps. e. On 28.06.2017, cash deposit of Rs. 3,20,000 was made in Axis Bank account (PB-151). The above sum was paid to Govt treasury on same day for purchase of stamps. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 59 of 82 f. On 17.10.2017, cash deposit of Rs. 2,56,000 was made in Axis Bank account (PB-159). Rs. 2,85,000 was paid to Government treasury on same day for purchase of stamps.” Ld. AR, in the open court, corroborated above facts with the supporting documents held in Paper-Book. Ld. AR also re-iterated the reply given by assessee to Q.No. 19 in the statements recorded during search (already re-produced above) wherein the assessee clearly stated to authorities that the amounts received from clients towards sale of stamps was deposited in bank a/c. With these submissions, Ld. AR very strongly contended that the assessee’s activity of stamp vending is proved by the qualification and licences held by assessee. Further, the factum of utilisation of assessee’s bank a/cs for such stamps vending activity wherein the cash received from clients have been deposited and ultimately transferred to Govt. A/c are clearly manifest from entries in bank a/cs. Moreover, the rate of “Commission” to “Gross-value of Stamps sold” was approx. 1.50% and there is no commission element in “registration fee”; these data can be easily discerned from “Ledger A/cs of Stamps and Registration Fee” issued by Stamps Department to assessee, copies at Pages No. 201 to 205 of Paper-Book. To illustrate, Ld. AR drew our attention to certain transactions noted in the Ledger A/cs as under: Date Transaction amount Transaction purpose Commission % 30.10.2019 6,34,295 Non-judicial stamps 9,514 1.50% Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 60 of 82 31.10.2019 2,91,561 Non-judicial stamps 4,373 1.50% 30.10.2019 2,92,751 Registration fee 0 0 31.10.2019 80,564 Registration fee 0 0 04.12.2019 4,15,686 Non-judicial stamps 6,235 1.50% Having explained thus, Ld. AR again draw our attention to the Table of working of unexplained money made by AO which is re-produced in earlier para but we re-extract here for an immediate reference: Ld. AR pointed out that although the AO had been judicious enough in giving credit for “Receipts from profession u/s 44ADA” in Column 3 of Table but there are serious flaws in AO’s working. Firstly, the Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 61 of 82 figures of cash deposits taken in Column 2 are not correct figures. Ld. AR has filed following chart in Written-Synopsis: “Chart-C” AY Cash Deposited [Per AO] Cash deposits [Actual] 2017-18 1,13,81,500 1,30,82,430 2018-19 1,35,62,200 1,11,62,100 2019-20 93,01,915 93,68,423 2020-21 38,77,300 1,27,01,823 2021-22 1,10,18,400 1,10,88,900 Secondly, in Column 3, the AO has given credit of the receipts derived by assessee by way of ‘commission’ from activity of stamps vending whereas the AO ought to have given credit of amounts received by assessee from clients towards sale/purchase of stamps because those amounts received from clients were deposited in assessee’s bank a/cs. Ld. AR submitted that he has make a proper working in following chart, this chart is already re-produced in Written-Submission of Ld. AR but we extract again for an immediate reference: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 62 of 82 Thus, Ld. AR ultimately contended that the AO needs to take correct amounts deposited in bank a/c and also give credit of correct figures of cash received by assessee from clients. Ld. AR further submitted that the assessee also carried a business of development and sale of plots in proprietorship concern named as “Radhey Krishna Vihar” and the books of account of this business were regularly maintained as required under law and the audit of this business was also got done in AY 2021-22. (iii) He drew our attention to the “Receipts and Payment A/cs” and “Cash Flow Statements” placed at S.No. 9 (Pages 127 to 133) of Paper-Book. He submitted that these statements have been drawn from assessee’s financial transactions and contain complete details of the receipts Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 63 of 82 from clients towards stamps selling activity, the amounts withdrawn from banks, other incomes, past savings available to assessee by way of cash in hand, the deposits made in bank a/cs, etc. He submitted that the AO has not taken cognizance of these documents in assessment-order although they were very much filed to AO. To support his contention, Ld. AR referred following para of assessee’s letter filed to CIT(A) during first-appeal at Page 316 of Paper-Book: \"Cash flow statements/receipts & payments account: The appellant has not maintained books of accounts relating to AY 2015-16 to AY 2020-21 as he was not obliged to do so in view of provisions contained in section 44AA of the Act. However, during the assessment proceedings, in compliance to notice u/s 142(1), he has furnished 'receipts & payments account' & 'cash flow statement' for the above said years based on his bank statements and other details/ROI. Here, it is submitted that since the above 'receipts & payments account' & 'cash flow statement' were not in existence at the material time of search operation, these were not found/seized during the course of search. Further, each entry of the above said 'receipts & payments account' & 'cash flow statement was duly explained to the AO and every income contained therein has been duly offered in return of income. Further, no bank account of the appellant was found undisclosed by the AO. Furthermore, entries pertaining to 'income' in all bank accounts for the relevant assessment years were offered in the ROI.” 13. With these submissions, Ld. AR contended that the CIT(A) has passed a vehement order after considering all facts. He prayed that the order of CIT(A) must be upheld and revenue’s grounds must be rejected. 14. Per contra, Ld. DR for revenue strongly opposed the order of CIT(A) and defended the assessment-order passed by AO with following contentions: (i) In so far as the benefit of Abhishar Buildwell (supra) given by CIT(A) for three AYs 2017-18 to 2019-20, Ld. DR submitted that all bank Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 64 of 82 a/cs were not shown in original returns. He referred Annexure-1 and Annexure-2 to the Grounds of Appeal/Authorisation Order u/s 253(2) issued by PCIT(Central) which are basically scanned portions of the income-tax returns field by assessee. Ld. DR demonstrated that the assessee has shown only one A/c No. 915020015661873 of Axis Bank in the original return filed u/s 139 as well as return filed u/s 153A; other bank accounts were not declared in those returns. Ld. DR contended that the assessee declared his all bank a/cs to authorities during search proceeding in reply to Q.No. 4 of the statements. Thus, those accounts have come to the knowledge of department only during search. He submitted that the bank a/cs coming to the knowledge of department for the first-time during search action, is certainly a situation of ‘incriminating material’. He submitted that during assessment-proceedings, the AO queried assessee to explain those bank a/cs discovered during search, therefore it is a case of verification of ‘incriminating material’ rather than a case of absence of ‘incriminating material’ as being claimed by assessee. He submitted that in principle he is not against the decision in Abhishar Buildwell (supra) but the CIT(A) has simply made a list of various loose-papers found during search and from there, made a conclusion that no ‘incriminating material’ was found qua bank a/cs but while doing so, the CIT(A) has overlooked the fact that the bank a/cs were discovered during search and the assessee did not file details of bank a/cs in the Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 65 of 82 returns filed to department. He submitted that the CIT(A)’s order is, therefore, not a valid order. (ii) Thereafter, on the issue of deletion of additions by CIT(A) on merit, Ld. DR contended very forcefully that the “Receipts and Payments A/cs” and “Cash flow Statements” were not filed to AO. According to Ld. DR, the CIT(A) has just adopted the submission made by assessee to him that the said documents were filed to AO. He submitted that the CIT(A) has not sought a remand report from AO qua such a heighted submission of assessee and given relief to assessee by merely recording assessee’s submission. He submitted that the AO has not received any opportunity to examine the documents relied by assessee. He made a strong prayer that this issue must be remanded to AO. 15. We have considered rival contentions of both sides and carefully perused the orders of lower-authorities as also the documents held in Paper- Book. The dispute here relates to the additions made by AO in all five assessment-years on account of unexplained cash deposits made in various bank a/cs. The CIT(A) has, however, deleted additions in first three AYs 2017-18 to 2019-20 on the basis of absence of incriminating material following the decision of Abhishar Buildwell (supra) and also deleted the additions in all five AYs 2017-18 to 2021-22 on merit. 16. We would first deal the issue of incriminating material for first three AYs 2017-18 to 2019-20. On a careful consideration, we find a strong merit Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 66 of 82 in the submissions of Ld. DR/revenue that the assessee had not disclosed all bank a/cs in the original returns filed to department u/s 139 (and even in the returns filed u/s 153A after search). We find that those bank a/cs have surfaced to the knowledge of department only during search proceedings when the authorities interrogated assessee. We further find that there is no definition of ‘incriminating material’ in Income-tax Act, 1961 although the concept of ‘incriminating material’ is relevant in assessments framed u/s 153A for unabated/completed years. In our considered view, the bank a/cs coming to the knowledge of department for the first-time during search proceeding, is certainly a situation of ‘incriminating material’ having been found during search. It is true that during assessment-proceedings, the AO queried assessee to explain those bank a/cs but this exercise done by AO was a step to scrutinise what was discovered during search. Therefore, it is wrong to say that there is no incriminating material found during search. In the facts of case, we are of the considered view that there existed incriminating material by way of discovering all bank a/cs of assessee during search and hence the present case cannot have benefit of Abhishar Buildwell (supra). Therefore, the conclusion made by CIT(A) qua this part is set aside. 17. Now, we turn to the merit of additions deleted by CIT(A). We find that the assessee/Ld. AR is claiming that the ‘Receipts & Payment’ and ‘Cash Flow Statements’ filed at S.No. 9 (Pages 127-133) of Paper-Book were filed to AO during assessment-proceedings but the AO did not consider same in Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 67 of 82 framing assessment. It is further submitted that this aspect of non- consideration of documents by AO was informed to CIT(A) during first- appellate proceedings and the CIT(A) has therefore considered those documents in impugned order and deleted addition. Contrary to this, Ld. DR referred various grounds raised by revenue/appellant (for example – Ground No. 5 to 11 in AY 2017-18) and made a strong submission that the impugned documents were not filed by assessee to AO and they are additional evidences. According to Ld. DR, the CIT(A) has merely recorded the submission of assessee in impugned order and deleted addition which is wrong. Since this issue is factual and generated a serious debate by learned Representatives, we directed the Ld. DR to file a report of AO as to whether or not the documents at S.No. 9 in Paper-Book were really filed? In reply, Ld. DR filed AO’s report as under and provided a copy of same to Ld. AR: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 68 of 82 Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 69 of 82 18. Ld. AR for assessee thereafter filed following counter to the AO’s report: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 70 of 82 19. Thereafter, Ld. DR produced the file of assessment record in open court. The Ld. AR examined this file in open court and tried to substantiate the submissions made by him in counter. Ld. AR, after examination of file, reported that the impugned documents filed by assessee are not available in assessment record. When the Bench questioned Ld. AR to show assessee’s letter or any evidence through which those documents were filed to AO, Ld. AR showed inability to show any such letter or evidence citing that it is an old case and there had been multiple changes in counsel at different stages, therefore the relevant letters are not traceable. Ld. AR, however, emphasised his submissions filed in counter that this being a search case, the AO was required to maintain a manual/proper order-sheet of the proceedings which could reveal the proceedings that took place at assessment stage but the AO has not done so. Ld. AR expressed his dissatisfaction to the order-sheets maintained by AO. Ultimately, Ld. AR only relied upon the submission made by assessee to CIT(A) that those documents were filed to AO (Page 316 of Paper-Book) but the AO has not taken the same into account. Ld. DR, Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 71 of 82 however, continued to insist that the impugned documents were not filed before AO and the assessee is having no evidence to support his claim in this regard. Be that as it may, from the submissions of both sides, the ultimate position emerging is such that neither the impugned documents are available in the file of assessment-record nor the assessee/Ld. AR is able to show any evidence of filing the same to AO. When it is so, we are not in a position to make a definite conclusion that the impugned documents considered by CIT(A) i.e. the “Receipts & Payments A/cs” and “Cash Flow Statements” were really filed to AO or not. However, the fact remains from assessment-order that the AO has not examined those documents during assessment proceeding and it is only the CIT(A) who has given benefit of same. The CIT(A) has noted at more than one places the claim of assessee that the impugned documents were filed to the AO and the AO has not considered those documents. But interestingly the CIT(A) has not taken any pain to verify this fact from AO. Ideally in such a situation, the CIT(A) could have invited the response of AO but that was not done. Hence, in the situation, it would be fair to give an opportunity to the AO to verify those documents. This would not prejudice anybody’s right instead it would help in a proper adjudication. Needless also to mention that the AO has made two crucial mistakes in the working of unexplained moneys (i) by considering wrong figures of cash deposits in bank a/cs and (ii) by giving credit of ‘commission’ receipts instead of ‘amounts received by assessee from clients for payment of stamp duty’ which were deposited in bank a/cs. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 72 of 82 Therefore, taking into consideration the entire conspectus of case, we feel it most appropriate to remand this issue to the file of AO. We may mention here that the AO will confine his exercise to verify (i) the working given by Ld. AR in “Chart-D” extracted in earlier Para 12(ii) of this order and (ii) the Receipts & Payments A/c-cum-Cash Flow Statements accepted by CIT(A). We expect that while carrying out this exercise the AO shall give necessary opportunities to assessee and deal assessee’s case judiciously and in accordance with law without being influenced by previous orders in any manner. The assessee is also directed to utilise those opportunities without seeking unnecessary adjournments. 20. In view of above discussions, the issue and related grounds raised by revenue are allowed for statistical purpose. Issue of Unexplained Cash Credits – (Ground 9 to 10 of AY 2019-20 & 2020-21): 21. In these grounds, the revenue claims that the CIT(A) was not justified in deleting/partly deleting the additions made by AO on account of unexplained cash credits. 22. Since these grounds relates to AY 2019-20 & 2020-21 only, we would extract and discuss the facts for those assessment-years only. The Brief facts are such that the AO made a total addition of Rs. 2,79,00,000/- and Rs. 76,00,000/- in AY 2019-20 and 2020-21 respectively on account of loans/amounts received by assessee from different persons. During first- appeal, vide Para No. 3.2.2, the CIT(A) firstly deleted the addition in AY Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 73 of 82 2019-20 on the ground of ‘absence of incriminating material’ following the decision in Abhishar Buildwell (supra). Thereafter, vide Para No. 3.6.2 to 3.6.4, the CIT(A) deleted part addition of Rs. 11,00,000/- in AY 2019-20 and vide Para No. 3.4.2 to 3.4.4 deleted full addition of Rs. 76,00,000/- in AY 2020-21 on merit also. Now, the revenue is against the relief given by CIT(A). 22.1 AY 2019-20 - Relief of Rs. 11,00,000/- given by CIT(A): (i) Ld. AR drew us to Para 8.7(f) of assessment-order to show that the impugned addition is in respect of a loan taken by assessee from Shri Radheshyam Joshi on 09.01.2018. He submitted that the AO has made addition on the footing that the assessee did not file Income-tax Return and Bank statement of the lender. But the CIT(A) has given relief on both counts, technical as well as merit. So far technical side is concerned, Ld. AR submitted that the CIT(A) has rightly concluded that there was no incriminating material whatsoever found during search qua this loan and accordingly the benefit of Abhishar Buildwell (supra) given by CIT(A) is in order. On merit part, Ld. AR submitted that the CIT(A) has considered the documentary evidences of lender being PAN data, Bank statement and ITR of lender and after due consideration, deleted the addition. These documents are available in Paper-Book at Pages 257-260 (A/c Confirmations of lender for financial years 2017-18 to 2020-21), Page 261 (Income-tax Return of lender for AY 2018-19), Page 263 (Bank statement of lender). Ld. AR corroborated the observations made by CIT(A) with these Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 74 of 82 documents. Thus, Ld. AR submitted that there is no error or infirmity in the order passed by CIT(A), the same must be upheld. (ii) Per contra, Ld. DR for revenue relied upon the order of AO. (iii) We have considered the rival submissions of both sides and perused the documents held on record including the orders of lower- authorities. The dispute here is with regard to the addition of Rs. 11,00,000/- made by AO in respect of a loan taken by assessee from Shri Radheyshyam Joshi but deleted by CIT(A) in first-appeal. It is notable that the CIT(A) has deleted addition on two counts. The first basis of deletion adopted by CIT(A) is such that the AY 2019-20 in which the AO made this addition was an unabated/completed assessment-year and during search, no incriminating material was found by authorities qua this loan taken by assessee. Therefore, according to Abhishar Buildwell (supra), the addition made by AO is legally not sustainable. We have already re-produced that part of CIT(A)’s order in earlier para No. 9 and do not wish to repeat the same. Secondly, the CIT(A) has considered the vital evidences such as PAN data, Income-tax Return and Bank Statement of the lender and thereafter came to a reasoned conclusion that all three ingredients of section 68, being identity and creditworthiness of the lender and genuineness of loan transaction are satisfied. We re-produce below the order passed by CIT(A) in this regard: Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 75 of 82 “(iv) Shri Radheshyam Joshi: Rs. 11,00,000/-; AY 2018-19: The appellant during the AY 2018-19 received sum of Rs. 11,00,000/- on 09.01.2018 from Shri Radheshyam Joshi who is having PAN-ABPPJ7607L and resides at Chhoti Bazar, Loharda, Dewas-455463. Therefore, the identity of the lender is proved beyond doubt. Further, the unsecured loan was given from his Union Bank of India account. On perusal of bank account statement, I found that the lender had maintained huge average balance in his bank account from a long period of time and out of accumulated funds the said unsecured loan was paid to appellant. Hence, the genuineness of the transaction is satisfactorily proven by the appellant. Furthermore, in order to prove creditworthiness of the lender, the appellant in support has filed copy of ITR for AY 2018-19, on perusal of the same, I find that the lender has shown gross income of Rs. 7,03,090/-. Further, the lender had charged interest @ 9.9% and appellant during AY 2018-19 paid interest of Rs. 23,500/- and paid interest of Rs. 99,000/- each in AYs 2019-20 to 2021-22. Since, the lender has offered significant income and already had sufficient balance in his bank account, therefore, the creditworthiness of the lender is proved. Therefore, the Ld. AO was not justified in making addition on account of unexplained cash credit u/s 68 of the Act and addition made on this account amounting to b is deleted.” (iv) During hearing, Ld. DR for revenue has not shown anything incriminating having been found by authorities during search proceeding qua this loan and therefore not able to controvert the benefit of Abhishar Buildwell (supra) given by CIT(A). Further, the order of CIT(A) deleting addition on merit is also well reasoned taking into account the evidences of lender. Therefore, we do not find any error, adversity or perversity in the order passed by CIT(A) by which the addition made by AO is deleted. At this stage, we would also like to narrate an important observation made by us during deliberations. Admittedly, the assessee had taken impugned loan on 09.01.2018 falling within previous year 2017-18 relevant to AY 2018-19. The AO has also mentioned in the very first sentence of Para 8.7(f) of assessment-order that the assessee has received loan in AY 2018-19. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 76 of 82 But, ultimately, in next Para 8.8, the AO made addition in AY 2019-20. Although nobody has looked at this infirmity in AO’s order, we noticed the same and brought to the notice of learned Representatives of both sides whereupon learned Representatives agreed that the addition made by AO in AY 2019-20 is wrong and not sustainable when the loan was taken in AY 2018-19. Thus, considering the entire conspectus of issue, we are inclined to approve the order passed by CIT(A) deleting the addition made by AO. 22.2 AY 2020-21 - Relief of Rs. 76,00,000/- given by CIT(A): (i) Ld. AR drew us to Para 8.7(e) of assessment-order to show that the impugned addition is in respect of a sum of Rs. 76,00,000/- received by assessee from Shri Vinay Sharma. The assessee stated that the said amount of Rs. 76,00,000/- was received as advance against sale of land at Banjari, Maheshwar for Rs. 1 crore. The assessee also filed sale-agreement to AO. However, the AO rejected assessee’s submission by pointing out that (i) the advance of Rs. 76,00,000/- constituted 76% which is impractical, (ii) that despite lapse of about 2.5 years, no sale deed had been executed between assessee and purchaser, (iii) that in point no. 9 of the sale-agreement filed by assessee, it is mentioned that if the purchase failed to pay balance consideration, the advance would be confiscated but the stipulated time is not mentioned, (iv) that in point no. 10 of agreement, it is mentioned that in case of cancellation of agreement, the purchaser Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 77 of 82 would take the land on lease but no lease agreement had been entered into. The AO further observed that the assessee had failed to furnish the ITR and Bank statement of purchaser. Ld. AR, however, drew us to certain documents available in Paper-Book. He referred Page No. 264-270 where sale-agreement is placed which contains PAN: BAVPS9982D of buyer, complete address of buyer, complete details of property agreed to be sold, the details of advance of Rs. 76,00,000/- received through banking channel (Rs. 48,00,000 through RTGS on 11.02.2020 + Rs. 20,00,000 through RTGS on 06.02.2020 + Rs. 8,00,000 through banker cheque on 12.02.2020). He also drew us to Pages 271 of Paper-Book where A/c Confirmation of Shri Vinay Sharma is filed. He also referred Page No. 273 of Paper-Book where copy of ITR filed by Shri Vinay Sharma for AY 2020-21 is filed. Ld. AR submitted that the sale-agreement is on stamp paper and entire advance had been received through banking channel but, however, the AO has rejected assessee’s submission on mere presumption and suspicion. He submitted that the CIT(A) has vehemently considered all these documents and discussed at length the facts of deal entered by assessee with the buyer and thereafter deleted addition. Therefore, the order passed by CIT(A) is a proper order and deserves to be upheld. (ii) Per contra, Ld. DR for revenue relied upon the order of AO. He submitted that neither the registry of sale had been executed till now Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 78 of 82 nor the amount has been fully refunded to purchaser. Therefore, the claim of assessee is not credible. (iii) We have considered rival submissions of both sides and perused the documents held on record including the orders of lower-authorities. The dispute here is with regard to the addition of Rs. 76,00,000/- made by AO in respect of amount received by assessee from Shri Vinay Kumar Sharma but deleted by CIT(A) in first-appeal. The assessee claims to have received the said amount against sale of land. In support, the assessee has filed a copy of sale-agreement to the AO and the same is also placed in Paper-Book which is executed on stamp paper and duly witnessed. It is also noteworthy that the entire advance of Rs. 76,00,000/- was received through banking channel and there is no cash element. The PAN of buyer is mentioned in the sale-agreement itself and the assessee has also filed copy of ITR of buyer as well as A/c Confirmation of buyer. The CIT(A) has considered not only these documents in his order but also recorded vehemently the facts relating to the deal of sale of land done by assessee. We re- produce below the order passed by CIT(A) in this regard: “3.4.2 I have considered the facts of the case, plea raised by the appellant and inter alia fining of the Ld AO. The appellant through his written Submission has contended that an agreement to sell was entered into with Shri Vinay Sharma on 30.03.2020 for sale of land admeasuring 1.620 hectare located at Village Banjari, Maheshwar, Khargone. Against agreed sale consideration sum of Rs. 76,00,000/- was paid as advance through banking channels. However, the prospective buyer decided not to proceed further with the said agreement to sell and aborted the purchase of the said parcel of land. The buyer also approached appellant for cancellation of agreement and refund Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 79 of 82 of advance amount. Since, the appellant was not having enough funds, therefore, the agreement for cancellation could not be executed. However, the appellant has refunded sum of Rs. 61,00,000/- till 30.07.2022 and the balance amount of Rs. 15,00,000/- is still outstanding. It was further agreed that the cancellation agreement would be executed on refund of balance advance amount. The appellant in contrary to allegation of the Ld AO, that providing 76% of advance of sale consideration is very impractical and the sale deed was not executed even after the lapse of 2.5 years, stated that the purchaser was eager to purchase the land due to its vicinity with proposed Narmada Expressway and therefore, the 76% of the sale consideration was given as advance amount. However, due to change in route of the proposed Narmada Expressway the purchaser decided not to proceed further with the impugned agreement and requested for refund of entire advanced amount. Further, the appellant has stated that the observation of the Ld AO that the clause 9 & 10 of the agreement to sell have not been adhered to, are only relatable to arbitration/court proceedings, however, both the parties in the interest of business/goodwill have mutually decided not to enforce the terms and conditions enshrined under the said clause. Furthermore, the appellant has objected to the findings of the Ld. AO, that the appellant failed to furnish bank account statement and ITR of the said purchaser and stated that all the desired details including bank account statement and ITR were submitted during assessment proceedings. 3.4.3 After considering the findings of the Ld AO and rival contentions of the appellant, I am of the considered opinion that the terms and conditions of any agreement are framed on mutual consent of both the involved parties and the enforcement of the ibid conditions also depends upon the mutual consent of parties involved. However, if any dispute arises thereon qua enforcement of any clause of the agreement then in those cases the aggrieved party may approach court for enforcement or part performance of the impunged agreement. In the instant case, the impunged agreement was entered into on 30.03.2020 and advance amount of Rs. 76,00,000/- was paid by Shri Vinay Sharma for purchase of land located at Banjari, Maheshwar, which amounts to 76% of sale consideration which as per Ld AO is impractical. It is apt here to mention that the determination and payment of advance amount depends on two factors (i) mutual agreement of both parties and (ii) eagerness to buy land by the buyer. The buyer, in the instant case, wanted to purchase the parcel of land keeping in view the proposed Narmada Expressway which was proposed to be passing in close vicinity of the land of the appellant and therefore, paid 76% of sale consideration as advance amount. Therefore, the second condition gets triggered. However, the agreement did not materialized due to modifications in route of the proposed Narmada Expressway and therefore, the buyer dropped the plan for purchase of, ibid, land and approached appellant for cancellation of agreement dated 30.03.2020 and refund the advanced amount. The appellant in the business interest/goodwill agreed for refund of advanced amount paid refund of Rs. 61,00,000/- in parts on various dates and a balance amount of Rs. 15,00,000/- is still payable to the proposed buyer. Being mutually agreed for refund of advance amount, the buyer did not proceed for arbitration or court proceedings even after lapse of 2.5 years as held by the Ld AO. Therefore, the allegation of the Ld AO that Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 80 of 82 76% of sale consideration was paid as advance amount is impractical cannot be treated as ground for making impunged addition. The Ld AO has also alleged that the clause 9 & 10 of the agreement have not been fulfilled which perse relates to payment of balance amount towards sale consideration and executing sale deed. Here, it becomes important to mention that the Ld AO himself has acknowledged this issue and found that in both the clauses the time limit for enforcing both or either of the clause is not specifically mentioned. Hence, in general terms the agreement is still enforceable in law and therefore, the Ld AO was not justified in stated that the said clause have not been executed. 3.4.4 Lastly, the Ld AO has held that the appellant has not discharged genuineness of the transaction and has also not established creditworthiness of the buyer with supportive bank account statements and return of income. However, the desired details viz bank account statement and ITR of the buyer for AYs 2019-20 & 2020-21 were filed by the appellant before the Id AO and the same were not considered. On perusal of evidences on record, I find that no cash was deposited prior to transfer of advance amount. Further, most importantly, the buyer Shri Vinay Sharma was holding top post at Axis Bank before taking Voluntary retirement. After opting for VRS he now has been carrying modern agricultural farming at large scale and for AY 2019-20 has filed return of income declaring gross total income of Rs. 82,940/- and had offered agricultural income of Rs. 1,56,51,496/-. Likewise in AY 2020-21 has filed return of income declaring gross total income of Rs. 2,62,860/- and had offered net agricultural income of Rs. 1,13,60,108/-. Therefore, the genuineness of the transaction and creditworthiness of the buyer gets established beyond any doubt. Thus, the ingredients of section 68 have been fully discharged by the appellant. Resultantly, the addition made by the Ld. AO amounting to Rs. 76,00,000/- is hereby deleted. Accordingly, appeal on this ground is allowed.” The above order passed by CIT(A) deleting the addition is well reasoned and the Ld. DR is not able to show any error or perversity therein except raising certain suspicions. Therefore, in the situation, we do not have any valid reason to interfere with the order of CIT(A), the same is hereby approved. 23. In view of above discussions, the issue and related grounds raised by revenue are dismissed. Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 81 of 82 Issue of Unexplained Interest on loans – (Ground 11 of AY 2018-19, 2019-20 & 2020-21; Ground 10 of AY 2021- 22): 24. In these grounds, the revenue claims that the CIT(A) was not justified in deleting the additions made by AO on account of interest on unexplained credits. 25. Ld. AR has submitted the details of additions made by AO as under: AY Interest relatable to Radheshyam Joshi Interest relatable to Shri Sanidhya Jain Total addition made by AO 2018-19 23,500 -- 23,500 2019-20 99,000 3,83,000 4,82,000 2020-21 99,000 4,70,000 5,69,000 2021-22 99,000 3,02,597 4,01,597 26. So far as the additions of interest relatable to Shri Radheshyam Joshi are concerned, the CIT(A) has already deleted principal addition of Rs. 11,00,000/- made by AO on technical basis as well as merit and we have already upheld CIT(A)’s order in earlier part of this order. Therefore, when the principal addition has been deleted, the addition on account of interest relatable thereto, which is consequential in nature, cannot be sustained. Accordingly, the order passed by CIT(A) deleting the interest relatable to Radheshyam Joshi is proper and hereby upheld. 27. So far as the additions of interest relatable to Shri Sanidhya Jain is concerned, the CIT(A) has deleted the principal additions of Sanidhya Jain Printed from counselvise.com Suryansh Porwal IT(SS)A Nos.58 to 62/Ind/2023 AY: 2017-18 to 2021-22 Page 82 of 82 on incriminating ground (but confirmed on merit). However, the revenue is not contesting the CIT(A)’s action of deleting the principal addition on incriminating ground. When it is so, the addition on account of interest relatable thereto, which is consequential in nature, cannot be sustained. Accordingly, the order passed by CIT(A) deleting the interest relatable to Shri Sanidhya Jain is proper and hereby upheld. 28. In view of above discussions, the issue and related grounds raised by revenue are dismissed. 29. Resultantly, the appeals of revenue are partly allowed for statistical purposes. Order pronounced in open court on 30/07/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 30/07/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore Printed from counselvise.com "