DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(3), BENGLAURU V. SHRI KEMPAREDDY GOVINDRAJU, DOMLUR, BENGALURU

ITA 1291/BANG/2024

AI Insights

The case involves multiple appeals by both the assessee, Shri Kempareddy Govindraj, and the Revenue against the orders passed by the Commissioner of Income Tax (Appeals) - 15, Bangalore, concerning the assessment years 2013-14 to 2016-17. The primary issues revolved around the legality and validity of the search conducted under section 132 of the Income Tax Act, the jurisdiction of the assessing officer to make additions under section 153A, and the validity of the additions made on account of unexplained investments in jewellery and other assets. The Tribunal's decision was influenced by various judicial precedents that underscored the necessity of corroborative evidence in making such additions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37642 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: PCIT vs Abhisar Buildwell (P) Ltd, CBI vs V.C.Shukla, Common Cause vs UOI, Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) vs ACIT, Trishul Buildtech Infrastructure (P) Ltd vs JCIT, Nishant Constructions vs ACIT, Hiren Vasantlal Shah vs ACIT, Ramachandra Setty and Sons vs ACIT, Khosla Ice and General Mills vs CIT, S.M.Agarwal vs CIT, Tarun Kumar Goyal vs ACIT, V.Selvaraj vs DCIT, M/s. Fussy Financial Services Pvt Ltd vs ITO, Suresh K Jajoo vs ACIT, Nagarjuna Construction Co. Ltd vs DCIT, Shri Neeraj Goyal vs ACIT, Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AN AFFIDAVIT
• Assessee Lawyers: V.CHANDRASEKHAR
• Keywords: Set aside; Opportunity of being heard; Revised return; Reassessment proceedings; Corroborative evidences; Unexplained expenditure; Unexplained investment; Salary income; Document seized; Documents seized; Retraction; Principle of natural justice; Search and seizure; Valuation report; Block assessment; Rectification of order; Loose papers; Deemed to accrue or arise in india; Reason to believe
• Section: 147; 143(3); 143(2); 119; 250; 154; 64; 48; 153; 132; 153A; 139(1); 131; 43; 22; 133(6); 12A; 113; 69C; 13; 69A; 139; 153C; 234B; 73; 72; 207; 20; 101

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI SOUNDARAJAN K, JUDICIAL MEMBER Assessee by : Shri. V. Chandrasekhar, AR. Revenue by : Shri. Sridhar E, CIT(DR)(ITAT), Bangalore. Date of hearing : 25.11.2024 Date of Pronouncement : 31.01.2025 O R D E R Per Laxmi Prasad Sahu, Accountant Member The assessee has filed appeal for Assessment Years 2013-14 to 2016-17 against the separate Orders passed by the learned CIT(A)-15, Bangalore, Order dated 15.04.2024 and the Revenue has filed appeals against the Order passed by the learned CIT(A)-15, Bangalore, for the Assessment Years 2014-15 to 2016-17. The grounds raised by both the parties are as under: 2. Grounds of appeal by the assessee: ITA Nos. and Assessment Year Appellant Respondent 1021 to 1024/Bang/2024 2013-14 to 2016-17 Shri. Kempareddy Govindraj, No.206, 2nd main, 2nd Stage Domlur, Bengaluru-560071., Bangalore - 560071. PAN : ABLPG 9967 C ACIT, Central Circle - 2(3), Bangalore. 1290 to 1292/Bang/2024 2014-15 to 20161-7 DCIT, Central Circle - 2(3), Bangalore. Shri. Kempareddy Govindraj, Bangalore - 560071. PAN : ABLPG 9967 C ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 2 of 155 For Assessment Year 2013-14 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short ‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case. 2. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon’ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for initiating the search u/s 131(1) shall not be disclosed to any person or any authority or the Appellate ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 3 of 155 Tribunal and therefore, the validity of the search cannot be adjudicated by him, without appreciating that there are various other grounds agitated by the appellant on basis of which the validity of search ought to be adjudicated. 3. Grounds regarding: Whether the order passed u/s 153A is without jurisdiction, is vitiated and is liable to be quashed and set aside. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction especially, the mandatory requirements to assume jurisdiction under section 153A of the Act did not exist and have not been complied with and consequently, the assessment requires to be cancelled on the facts and circumstances of the case. ii. The order of assessment passed by the learned assessing officer under section 143(3) r.w.s 153A of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume jurisdiction did not exist or having not been complied with and consequently, the assessment is vitiated and requires to be cancelled on the facts and circumstances of the case. iii. The learned CIT(A) ought to have appreciated that the notice issued under section 153A of the Act is bad in law and more so as it contains material irregularity on the facts and circumstances of the case. iv. The learned CIT(A) failed to appreciate that in the absence of recording of satisfaction for issue of notice under section 153A of the Act, the entire proceedings are bad in law and hence the assessment requires to be cancelled on the facts and circumstance of the case. v. The learned CIT(A) has proceeded on the premise that in every case of search u/s 132, there has to be automatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 4 of 155 4. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 5. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. i. The learned assessing officer is not justified in passing the assessment orders u/s 143(3) r.w.s 153A of the Act in the absence of valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. ii. The copies of the approvals, if any, obtained from the Joint Commissioner u/s 153D of the Act have not been provided to the appellant in the course of appellate or remand proceedings on the facts and circumstances. iii. The learned lower authorities may be put to strict proof of obtaining valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. 6. Grounds regarding: Whether the assessment order passed in gross violation of principles of natural justice is bad in law and liable to be annulled. i. The learned CIT(A) failed to appreciate that the appellant was not been provided adequate opportunity of defending his case and ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 5 of 155 consequently the assessment order suffers from the violation principles of natural justice. ii. The learned CIT(A) is not justified in making the additions without even affording the appellant opportunity of being heard in respect of the additions made in the assessment on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that mere issuance of a number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless, the appellant is made known as to what is the real case that he is called upon to defend. 7. Ground regarding: Whether the addition made of Rs. 1,29,95,000/- as unexplained investment in jewellery is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition of Rs.1,29,95,000/- as unexplained investment in jewellery by the appellant (Rs. 34,50,000/-) and the appellant’s spouse (Rs.95,45,000/-) u/s 69A of the Act on the facts and circumstances of the case. ii. The learned CIT(A) erred in confirming the perverse conclusion of the assessing officer that the difference in the jewellery value as per the returns filed before the Lok Ayukta for the FY 2012- 13 and the affidavit filed before the Returning Officer dated 01.06.2012 as income accruing to the appellant and the appellant’s spouse during the period 01.06.2012 to 31.03.2013 on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that the Lok Ayukta returns filed earlier included the ancestral jewellery of the appellant’s undivided family which was in the custody of the appellant and was declared in the said return out of abundant caution on the facts and circumstances of the case. iv. The learned CIT(A) is not justified in disregarding the revised returns filed before the Lok Ayukta which properly depicts the jewellery actually owned by the appellant on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 6 of 155 v. The learned CIT(A) failed appreciate that the proper explanation was tendered by the appellant for the apparent differences including the reconciliation of the quantum of jewellery as actually found in the course of search and consequently no additions are warranted on the facts and circumstances of the case. vi. Without prejudice, the learned CIT(A) ought to have appreciated that the very provisions of section 69A of the Act are not applicable on the facts and circumstances of the case. 8. Ground regarding: Whether the addition made of Rs.95,45,000/- as unexplained investment in jewellery of appellant’s spouse on protective basis is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition of the jewellery said to be belonging to the appellant’s spouse as unexplained investment in the hands of the appellant even on protective basis on the facts and circumstances of the case. ii. The learned CIT(A) is not justified in confirming the said addition on protective basis merely on the ground that no addition was made in the hands of the appellant’s spouse on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in confirming the addition on protective basis when in the first instance no assessment on substantive basis has been concluded on the facts and circumstances of the case. iv. Without prejudice, the learned CIT(A) ought to have appreciated that the addition on protective basis could not have been made in an assessment made u/s 153A of the Act on the facts and circumstances of the case. 9. Ground regarding: Whether the manner of quantifying the above addition is in accordance with law? i. Without prejudice, the learned CIT(A) erred in confirming the quantification of the value of the jewellery in making the above addition on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 7 of 155 ii. Without prejudice, the learned CIT(A) failed to appreciate that the quantification of the value of the differential jewellery is very high and needs to be substantially reduced on the facts and circumstances of the case. 10. The learned assessing officer is not justified in levying interest u/s 234A, u/s 234B and u/s 234C of the Act on the facts and circumstances of the case and further the quantum, period and rate are not discernible from the assessment order and the learned CIT(A) is not justified in holding that the same is consequential and not adjudicating the same specifically on the facts and circumstances of the case. 11. The appellant craves for leave of this Hon’ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 12. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. For Assessment Year 2014-15 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short ‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case. 2. The appellant denies himself liable to be assessed to total income of Rs.3,29,83,76,880/- as against the returned income of Rs. 8,76,880/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 8 of 155 ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon’ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for initiating the search u/s 131(1) shall not be disclosed to any person or any authority or the Appellate Tribunal and therefore, the validity of the search cannot be adjudicated by him, without appreciating that there are various other grounds agitated by the appellant on basis of which the validity of search ought to be adjudicated. 4. Grounds regarding: Whether the order passed u/s 153A is without jurisdiction, is vitiated and is liable to be quashed and set aside. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction especially, the mandatory requirements to assume jurisdiction under section 153A of the Act did not exist and have not been complied with and consequently, the assessment requires to be cancelled on the facts and circumstances of the case. ii. The order of assessment passed by the learned assessing officer under section 143(3) r.w.s 153A of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 9 of 155 jurisdiction did not exist or having not been complied with and consequently, the assessment is vitiated and requires to be cancelled on the facts and circumstances of the case. iii. The learned CIT(A) ought to have appreciated that the notice issued under section 153A of the Act is bad in law and more so as it contains material irregularity on the facts and circumstances of the case. iv. The learned CIT(A) failed to appreciate that in the absence of recording of satisfaction for issue of notice under section 153A of the Act, the entire proceedings are bad in law and hence the assessment requires to be cancelled on the facts and circumstance of the case. v. The learned CIT(A) has proceeded on the premise that in every case of search u/s 132, there has to be automatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 5. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 6. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 10 of 155 i. The learned assessing officer is not justified in passing the assessment orders u/s 143(3) r.w.s 153A of the Act in the absence of valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. ii. The copies of the approvals, if any, obtained from the Joint Commissioner u/s 153D of the Act have not been provided to the appellant in the course of appellate or remand proceedings on the facts and circumstances. iii. The learned lower authorities may be put to strict proof of obtaining valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. 7. Grounds regarding: Whether the assessment order passed in gross violation of principles of natural justice is bad in law and liable to be annulled. i. The learned CIT(A) failed to appreciate that the appellant was not been provided adequate opportunity of defending his case and consequently the assessment order suffers from the violation principles of natural justice. ii. The learned CIT(A) is not justified in making the additions without even affording the appellant opportunity of being heard in respect of the additions made in the assessment on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that mere issuance of a number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless, the appellant is made known as to what is the real case that he is called upon to defend. 8. Grounds regarding: Whether any addition can be made on the basis of a planted diary: Whether any addition can be made on the basis of a material which the appellant has contended has come under mysterious circumstance and thus can such material be the basis for assessment u/s 153A on the facts and circumstance of the case? i. The learned CIT(A) failed to appreciate that there are several evidence which fortify that the diary was planted and consequently any assessment made on such planted diary is not sustainable on the facts and circumstance of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 11 of 155 ii. The learned CIT(A) failed to appreciate that there are several interpolations in the planted diary and consequently the assessment passed on such basis is bad in law. iii. The learned CIT(A) failed to appreciate that in the Panchanama the number of pages is stated to be 5 while three new pages has surfaced leading to irrefutable conclusion that there are even interpolations in the planted diary on the facts and circumstance of the case. iv. The learned CIT(A) failed to appreciate that the search official has placed identification marks and it is clear that some writing are there beneath the said identification mark and thus it is clear that there is interpolation even on this count in the planted diary on the facts and circumstance of the case. v. The learned CIT(A) failed to appreciate that the certified scanned copy of the pages which are part of the sworn statement did not contain page no 1A 3A and 4A and thus the numbering is a clear case of interpolation in the planted diary which consequently demonstrates the mind of the revenue and on this count also the assessment needs to be annulled on the facts and circumstance of the case. vi. The learned CIT(A) failed to appreciate that even in the statement recorded on 06.05.2016 (which questioning by itself is after certain interpolations) there was no question asked on an amount of 65 crores clearly fortifying that the same has been interpolated after the statement recorded on 6/5/2016 on the facts and circumstance of the case. vii. The learned CIT(A) erred in law in not appreciating that there has been a systematic attempt to foist huge tax liability on the appellant on the facts and circumstance of the case. viii. The learned CIT(A) failed to appreciate that the diary has been planted and has surfaced under mysterious circumstances and consequently hold that no addition can be made on the basis of such planted diary. ix. The learned CIT(A) failed to appreciate that the contents of the diary are not in the handwriting of the appellant or any of ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 12 of 155 his family members or his staff and hence there cannot be any presumption in law that addition has to be made on such basis of such planted diary on the facts and circumstance of the case. x. The learned CIT(A) erred in law and facts by not bringing record several evidence in favour of the appellant and this deliberate failure of the assessing officer to bring on record the results of the investigation made based on the planted diary and which appear to be in favour of the appellant establishes clear case of bias and on this count alone the assessment order requires to be annulled. xi. The learned CIT(A) ought to have held that there are interpolations in the diary on account of the contents found after the signature of the officer placing identifying marks at the time of search. xii. The learned CIT(A) ought to have held that there are material changes in the number of pages between the date of search as per Panchanama, and the statements recorded and further between the date of statements and the assessment order and hence the addition is one which is clearly on interpolations which requires to be cancelled on the facts and circumstance of the case. 9. Grounds regarding: Whether addition made on the basis of alleged / disputed dairy is sustainable without there being a fair enquiry or investigation into the same? i. The learned CIT(A) failed to appreciate that the appellant has brought out a host of anomalies in the alleged / disputed diary which are prima facie visible. Further, the appellant has also demonstrated as to how the entries in the alleged diary evolved over a period even when in the custody of the income-tax department in the course of investigation proceedings and therefore, a fair investigation into the origin, veracity and reliability of the same ought to have been undertaken on the facts and circumstances of the case. ii. The learned CIT(A) failed to appreciate that the failure by the department to hold an enquiry into the authenticity of the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 13 of 155 planted diary leads to an inference that the revenue is not interested in the Truth of the matter and consequently no addition ought to have been made on the facts and circumstance of the case. iii. The learned CIT(A) failed to appreciate that the inaction of the income-tax department in conducting a fair enquiry into the authenticity of the seized diary is fatal to the assessment proceedings on the facts and circumstance of the case. iv. The learned CIT(A) ought to have appreciated that the prevention by the department to hold an enquiry into the various allegations of the appellant should lead to an adverse inference against the revenue on the facts and circumstance of the case. v. The learned CIT(A) erred in not appreciating that the failure of the department to either submit the planted diary to forensic test or investigation as complained by the appellant or on its own is fatal to the assessment proceedings on the facts and circumstance of the case. vi. Without prejudice the authorities below ought to have atleast conducted an inquiry themselves on the assertions made by the appellant and failure to do so is fatal to the additions made and the addition requires to be deleted on this count also on the facts and circumstance of the case. vii. The authorities below failed to appreciate that not causing an investigation is to effectively displace the material evidence that will come out of the enquiry which the revenue apprehends will be against it on the facts and circumstance of the case. 10. Whether the assessment order is vitiated on the grounds of doctrine of bias and failure on part of the quasi-judicial authority. i. The learned CIT(A) erred in law in not taking cognizance of all the material gathered leading to clear fortification that the doctrine of bias has set in and consequently the order of assessment is bad and unsustainable in law on the facts and circumstance of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 14 of 155 ii. The CIT(A) erred in not appreciating that the learned AO failed in his duty being a quasi-judicial authority to take into consideration all evidence that are in the possession of the department and such failure is fatal to the assessment and consequently the order of assessment requires to be cancelled /annulled on the facts and circumstance of the case. iii. The learned CIT(A) erred in not appreciating that the AO failed to bring on record all the evidence collected by the department which are favorable to the appellant and consequently the order of assessment suffers from the principle of doctrine of bias and thus the order has to be cancelled on the facts and circumstance of the case. 11. Ground regarding: Whether the addition made on the basis of the so- called seized material / disputed diary is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition to the extent of Rs.262,25,00,000/- out of the original addition in the assessment order of Rs.329,75,00,000/- as undisclosed income of the appellant merely on the basis of loose notings or scribblings in the so-called seized incriminating material being the disputed diary on the facts and circumstances of the case. ii. The learned CIT(A) erred in not considering that the above addition of undisclosed income is based on material which is unconnected with the appellant and the origin of it is itself doubted and questioned by the appellant on the facts and circumstances of the case. iii. The learned CIT(A) further failed to take note that the additions made in the present case are not on the basis of books of account but on some random scribblings in loose papers and the alleged diary entries which can only be treated as “dumb documents” on the facts and circumstances of the case. iv. The authorities below ought to have realised that \"dumb document\" cannot be not admissible evidence in law, being documents, which are neither understandable nor intelligible, nor self-evident in themselves and therefore cannot advance ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 15 of 155 the case of the department and cannot be relied upon to sustain the additions on the facts and circumstances of the case. Strong reliance in this regard is placed on the judgement of the Hon’ble Apex Court in CBI vs V.C.Shukla (1998) 3 SCC 410. v. The learned CIT(A) failed to also appreciate that it is well settled law that unless the author of the document is examined who alone can explain the entries and the transactions therein, no reliance can be placed on such document, more so when the document is dumb document and is incapable of speaking for itself. Consequently, the author of the document in question itself not being known and no attempt having been made to even trace the author, the department cannot be permitted to rely on the entries therein. vi. The learned CIT(A) further failed to appreciate that if at all any additions are made on any incriminating material, it can only be with corroborative material and not otherwise. There being no corroborative material whatsoever on record, the additions are not sustainable on the facts and circumstances of the case. vii. The CIT(A) failed to take note that the reasoning of the AO that the material in A/KG/9 which is in the handwriting of the appellant is corroborates the alleged diary entries in A/KG/3 is fallacious in as much as the material in A/KG/9 itself is a dumb document and is unintelligible and therefore, it cannot be anyone’s case that one dumb document can be said to be corroborating another dumb document. viii. The learned CIT(A) failed to take note that any kind of corroboration or correlation between the above two material is purely a case of unnatural force-fitting of some imaginary figures supposedly arrived at by the learned AO to the supposed admission of undisclosed income by the appellant in statement recorded u/s 132(4) with generous use of imagination even when they do not even have any semblance of relationship to each other on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 16 of 155 ix. The learned CIT(A) failed to appreciate that addition made are unrealistic and further they do not constitute either real income or deemed income under any of the provisions of the Act on the facts and circumstances of the case. x. The learned CIT(A) also failed to appreciate that there is nothing in the said disputed diaries which has any nexus with the nature of income generating activities of appellant so as to treat any supposed receipts or payments therein as belonging or pertaining to the appellant. Consequently, the same are not and also cannot be construed as income of the appellant on the facts and circumstances of the case. xi. The learned CIT(A) failed to take note of the well-settled legal position that a non-speaking document without any corroborative material, that is to say some other material or evidence on record in conjunction with which it may be treated as speaking, has to be disregarded in framing of the assessment orders. xii. The learned CIT(A) erred in not taking note that the onus was on the department and the AO to demonstrate that the entries in the disputed diary or seized material have resulted in materialised transactions giving rise to income of the assessee on the facts and circumstances of the case. xiii. The learned CIT(A) is not justified in confirming the addition when the inference of income on the basis of the disputed diary in itself is glaringly a figment of imagination and not forthcoming even in the said notings or something that may be inferred objectively and without aid of any imagination on the facts and circumstances of the case. xiv. The CIT(A) failed to appreciate that none of the hypotheses of the learned AO is grounded in reality or any material on record. Thus, entire addition is only based on surmise and conjecture and at the most suspicion. xv. The CIT(A) ought to have appreciated that it is well settled position of law that no amount of suspicion can take the place of evidence. The very fact that the learned AO had to strain himself so much to force-fit the numbers itself reveals that the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 17 of 155 same is not self-evident in themselves so as to treat them as income of the appellant. xvi. The CIT(A) failed to notice that the mere mention of the word ‘received’ in the disputed diary cannot lead to any reasonable inference that the ‘appellant’ received such amounts as ‘income’ on the facts and circumstances of the case. xvii. The learned CIT(A) ought to have appreciated that the approach of the AO in making a sweeping statement that it is for the appellant to show that it is not his income is not supported by law and on the contrary it is for the AO to establish through investigation and corroboration that such income was ‘received’ and ‘received by the appellant’ and such receipt by the appellant is in the nature of ‘income of the appellant’ on the facts and circumstances of the case. xviii. The CIT(A) grossly erred in not considering that the corroborative evidence ought to have been in the form of recording the statements from the so-called parties with whom the alleged transactions are supposed to have been carried out more so when it is the claim of the department that it has deciphered the names of the parties in these alleged entries. xix. The CIT(A) failed to also consider that certain parties were summoned and statements were recorded from them by the department and it appears that none of them have vouched or confirmed any of the transactions therein and accordingly, the logical result would be to conclude that the alleged diary entries are not corroborated on the facts and circumstances of the case. xx. The CIT(A) ought to have appreciated that the incomes said to be attributable to the contents of the material in question apart from not being real income of the appellant do not even constitute deemed income of the appellant under any of the deeming provisions contained in section 68, 69, 69A, 69B, 69C or 69D of the Act. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 18 of 155 xxi. The CIT(A) also grossly erred in not taking note of the fact that if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. The very fact that there is nothing such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any assets in the hands of the appellant on the facts and circumstances of the case. 12. Grounds regarding: Whether the Presumption u/s 292C of the Act is applicable in respect of the addition made. i. The authorities below erred in misconstruing the statutory presumption u/s 292C of the Act in making the addition in as much as though there is presumption as to belonging and correctness there is no presumption that the content therein indicates the income of the assessee. ii. The learned CIT(A) erred in law in effectively upholding use of the declaration u/s 132(4) of the Act said to be made by the appellant even though the said statement finds no mention in the panchanama drawn up in the course of search proceedings on the facts and circumstances of the case. iii. Without prejudice, the learned CIT(A) also erred in law in effectively upholding the use of the declaration u/s 132(4) of the Act as corroborative evidence more so when the said declaration is validly retracted in the affidavit sworn to before a magistrate on the facts and circumstances of the case. 13. Grounds regarding: Without prejudice, whether the manner of quantifying the above addition is in accordance with law? i. The learned CIT(A) is erred in confirming the additions on the basis of the disputed diary as income of the appellant despite the fact that the disputed diary in itself is only a dumb document. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 19 of 155 ii. The learned CIT(A) also failed to appreciate that unless the nature of the receipts and payments are established and any nexus with the nature of income generating activities of appellant are demonstrated, mere random figures appearing in the disputed diary cannot be employed in quantification of any supposed income of the appellant. iii. The learned CIT(A) failed to take note that the alleged incomes added in the hands of the appellant do not, in fact, emanate from the said disputed diary, and the entire addition is contrary to material on record and consequently additions are entirely perverse on the facts and circumstances of the case. 14. The learned assessing officer is not justified in levying interest u/s 234A, u/s 234B and u/s 234C of the Act on the facts and circumstances of the case and further the quantum, period and rate are not discernible from the assessment order and the learned CIT(A) is not justified in holding that the same is consequential and not adjudicating the same specifically on the facts and circumstances of the case. 15. The appellant craves for leave of this Hon’ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 16. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. For Assessment Year 2015-16 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short ‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case. 2. The appellant denies himself liable to be assessed to total income of Rs.3,29,83,76,880/- as against the returned income of Rs. 8,76,880/- on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 20 of 155 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143(3) r.w.s 153A of the Act by the impugned assessment order upheld by the learned CIT(A) on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-initio on the parity of the ratio of the decision of the Hon’ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for initiating the search u/s 131(1) shall not be disclosed to any person or any authority or the Appellate Tribunal and therefore, the validity of the search cannot be adjudicated by him, without appreciating that there are various other grounds agitated by the appellant on basis of which the validity of search ought to be adjudicated. 4. Grounds regarding: Whether the order passed u/s 153A is without jurisdiction, is vitiated and is liable to be quashed and set aside. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 21 of 155 i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction especially, the mandatory requirements to assume jurisdiction under section 153A of the Act did not exist and have not been complied with and consequently, the assessment requires to be cancelled on the facts and circumstances of the case. ii. The order of assessment passed by the learned assessing officer under section 143(3) r.w.s 153A of the Act is bad in law since the mandatory conditions as envisaged in the Act to assume jurisdiction did not exist or having not been complied with and consequently, the assessment is vitiated and requires to be cancelled on the facts and circumstances of the case. iii. The learned CIT(A) ought to have appreciated that the notice issued under section 153A of the Act is bad in law and more so as it contains material irregularity on the facts and circumstances of the case. iv. The learned CIT(A) failed to appreciate that in the absence of recording of satisfaction for issue of notice under section 153A of the Act, the entire proceedings are bad in law and hence the assessment requires to be cancelled on the facts and circumstance of the case. v. The learned CIT(A) has proceeded on the premise that in every case of search u/s 132, there has to be automatic invocation of provisions of section 153A which is contrary to well settled principle of law that, it is only on the basis of incriminating material unearthed in the course of search that provisions of section 153A of the Act can be invoked. 5. Grounds regarding: Whether the CIT(A) officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 22 of 155 assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 6. Grounds regarding: Whether the assessment order is valid in law in the absence of valid approval u/s 153D. i. The learned assessing officer is not justified in passing the assessment orders u/s 143(3) r.w.s 153A of the Act in the absence of valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. ii. The copies of the approvals, if any, obtained from the Joint Commissioner u/s 153D of the Act have not been provided to the appellant in the course of appellate or remand proceedings on the facts and circumstances. iii. The learned lower authorities may be put to strict proof of obtaining valid and lawful approval of the Joint Commissioner u/s 153D of the Act on the facts and circumstances of the case. 7. Grounds regarding: Whether the assessment order passed in gross violation of principles of natural justice is bad in law and liable to be annulled. i. The learned CIT(A) failed to appreciate that the appellant was not been provided adequate opportunity of defending his case and consequently the assessment order suffers from the violation principles of natural justice. ii. The learned CIT(A) is not justified in making the additions without even affording the appellant opportunity of being heard in respect of the additions made in the assessment on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that mere issuance of a number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless, the appellant is made known as to what is the real case that he is called upon to defend. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 23 of 155 8. The appellant craves for leave of this Hon’ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 9. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. For Assessment Year 2016-17 1. The impugned order of the Commissioner of Income Tax (Appeals) - 15, Bangalore, [for short ‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961, in so far the same is against the appellant, is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant’s case. 2. The appellant denies himself liable to be assessed to total income of Rs.419,03,12,500/- as against the returned income of Rs. 20,86,630/- on the facts and circumstances of the case. 3. Ground Regarding whether the search conducted on the appellant u/s 132 is legal and valid: The appellant denies himself liable to be assessed under section 143 [3] r.w.s. 153A of the Act under the assessement order on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] and [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [224 ITR 19 (SC)] and consequent assessment under section 153A is null and void-ab-inito on the parity of the ratio of the decision of the Hon’ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The authorities below have not discharged the burden of proving that there is a valid search under section 132 [1] [a], [b] and [c] of the Act, and consequently the assumption of jurisdiction to make an assessment under section 153A of the Act is untenable in law. iv. The learned CIT(A) ought to have appreciated that the very search proceeding is tainted by several irregularities and therefore invalid in the eye of law and consequently the assessment order passed ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 24 of 155 thereunder is liable to be annulled on the facts and circumstances of the case. v. The learned CIT(A) is not justified in holding that the Explanation to section 132(1) declares that the reason to believe which forms the basis for initiating the search u/s 131(1) shall not be disclosed to any person or any authority or the Appellate Tribunal and therefore, the validity of the search cannot be adjudicated by him, without appreciating that there are various other grounds agitated by the appellant on basis of which the validity of search ought to be adjudicated. 4. Grounds Regarding whether the assessing officer has assumed valid jurisdiction in the absence of issue of notice u/s 129 of the Act. i. The order of assessment is bad in law and void-ab-initio for want of requisite jurisdiction on the facts and circumstances of the case. ii. The learned CIT(A) was precluded from making the assessment in as much as the mandatory notice u/s 129 of the Act was not served on the appellant and consequently there is no valid assumption of jurisdiction on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in shifting the onus to the assessee to raise objections to jurisdiction even in cases where no notice u/s 129 of the Act is issued and effectively holding that there is no requirement of issuance of notice u/s 129 of the Act on the facts and circumstances of the case. 5. Grounds Regarding whether the assessment order passed in gross violation of principles of natural justice is bad in law and liable to be annulled. i. The learned CIT(A) failed to appreciate that the appellant has not been provided with the copy of the planted diary and consequently the assessment order suffers from the violation principles of natural justice. ii. The learned CIT(A) is not justified in making the additions without even affording the appellant opportunity of being heard in respect of the additions made in the assessment on the facts and circumstances of the case. iii. The learned CIT(A) failed to appreciate that mere issuance of a number of notices calling for information alone cannot be the yardstick of affording opportunities of being heard unless, the appellant is made known as to what is the real case that he is called upon to defend. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 25 of 155 6. Grounds Regarding whether any addition can be made on the basis of a planted diary: Whether any addition can be made on the basis of a material which the appellant has contended has come under mysterious circumstance and thus can such material be the basis for assessment u/s 153A on the facts and circumstance of the case? i. The learned CIT(A) failed to appreciate that there are several evidence which fortify that the diary was planted and consequently any assessment made on such planted diary is not sustainable on the facts and circumstance of the case. ii. The learned CIT(A) failed to appreciate that there are several interpolations in the planted diary and consequently the assessment passed on such basis is bad in law. iii. The learned CIT(A) failed to appreciate that in the Panchanama the number of pages is stated to be 5 while three new pages has surfaced leading to irrefutable conclusion that there are even interpolations in the planted diary on the facts and circumstance of the case. iv. The learned CIT(A) failed to appreciate that the search official has placed identification marks and it is clear that some writing are there beneath the said identification mark and thus it is clear that there is interpolation even on this count in the planted diary on the facts and circumstance of the case. v. The learned CIT(A) failed to appreciate that the certified scanned copy of the pages which are part of the sworn statement did not contain page no 1A 3A and 4A and thus the numbering is a clear case of interpolation in the planted diary which consequently demonstrates the mind of the revenue and on this count also the assessment needs to be annulled on the facts and circumstance of the case. vi. The learned CIT(A) failed to appreciate that even in the statement recorded on 06.05.2016 (which questioning by itself is after certain interpolations) there was no question asked on an amount of 65 crores clearly fortifying that the same has been interpolated after the statement recorded on 6/5/2016 on the facts and circumstance of the case. vii. The learned CIT(A) erred in law in not appreciating that there has been a systematic attempt to foist huge tax liability on the appellant on the facts and circumstance of the case. viii. The learned CIT(A) failed to appreciate that the diary has been planted and has surfaced under mysterious circumstance and consequently hold that no addition can be made on the basis of such planted diary. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 26 of 155 ix. The learned CIT(A) failed to appreciate that the contents of the diary are not in the handwriting of the appellant or any of his family members or his staff and hence there cannot be any presumption in law that addition has to be made on such basis of such planted diary on the facts and circumstance of the case. x. The learned CIT(A) erred in law and facts by not bringing record several evidence in favour of the appellant and this deliberate failure of the assessing officer to bring on record the results of the investigation made based on the planted diary and which appear to be in favour of the appellant establishes clear case of bias and on this count alone the assessment order requires to be annulled. xi. The learned CIT(A) ought to have held that there are interpolations in the diary on account of the contents found after the signature of the officer placing identifying marks at the time of search. xii. The learned CIT(A) ought to have held that there are material changes in the number of pages between the date of search as per Panchanama, and the statements recorded and further between the date of statements and the assessment order and hence the addition is one which is clearly on interpolations which requires to be cancelled on the facts and circumstance of the case. 7. Grounds regarding: Whether addition made on the basis of alleged / disputed dairy is sustainable without there being a fair enquiry or investigation into the same? viii. The learned CIT(A) failed to appreciate that the appellant has brought out a host of anomalies in the alleged / disputed diary which are prima facie visible. Further, the appellant has also demonstrated as to how the entries in the alleged diary evolved over a period even when in the custody of the income-tax department in the course of investigation proceedings and therefore, a fair investigation into the origin, veracity and reliability of the same ought to have been undertaken on the facts and circumstances of the case. ix. The learned CIT(A) failed to appreciate that the failure by the department to hold an enquiry into the authenticity of the planted diary leads to an inference that the revenue is not interested in the Truth of the matter and consequently no addition ought to have been made on the facts and circumstance of the case. x. The learned CIT(A) failed to appreciate that the inaction of the income-tax department in conducting a fair enquiry into the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 27 of 155 authenticity of the seized diary is fatal to the assessment proceedings on the facts and circumstance of the case. xi. The learned CIT(A) ought to have appreciated that the prevention by the department to hold an enquiry into the various allegations of the appellant should lead to an adverse inference against the revenue on the facts and circumstance of the case. xii. The learned CIT(A) erred in not appreciating that the failure of the department to either submit the planted diary to forensic test or investigation as complained by the appellant or on its own is fatal to the assessment proceedings on the facts and circumstance of the case. xiii. Without prejudice the authorities below ought to have atleast conducted an inquiry themselves on the assertions made by the appellant and failure to do so is fatal to the additions made and the addition requires to be deleted on this count also on the facts and circumstance of the case. xiv. The authorities below failed to appreciate that not causing an investigation is to effectively displace the material evidence that will come out of the enquiry which the revenue apprehends will be against it on the facts and circumstance of the case. 8. Whether the assessment order is vitiated on the grounds of doctrine of bias and failure on part of the quasi-judicial authority. i. The learned CIT(A) erred in law in not taking cognizance of all the material gathered leading to clear fortification that the doctrine of bias has set in and consequently the order of assessment is bad and unsustainable in law on the facts and circumstance of the case. ii. The CIT(A) erred in not appreciating that the learned AO failed in his duty being a quasi-judicial authority to take into consideration all evidence that are in the possession of the department and such failure is fatal to the assessment and consequently the order of assessment requires to be cancelled /annulled on the facts and circumstance of the case. iii. The learned CIT(A) erred in not appreciating that the AO failed to bring on record all the evidence collected by the department which are favorable to the appellant and consequently the order of assessment suffers from the principle of doctrine of bias and thus the order has to be cancelled on the facts and circumstance of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 28 of 155 9. Ground Regarding whether the addition made on the basis of the so-called seized material is in accordance with law? i. The learned CIT(A) is not justified in confirming the addition to the extent of Rs.135,50,00,000/- out of the original addition in the assessment order of Rs.408,50,00,000/- as undisclosed income of the appellant merely on the basis of loose notings or scribblings in the so-called seized incriminating material being the disputed diary on the facts and circumstances of the case. ii. The learned CIT(A) erred in not considering that the above addition of undisclosed income is based on material which is unconnected with the appellant and the origin of it is itself doubted and questioned by the appellant on the facts and circumstances of the case. iii. The learned CIT(A) further failed to take note that the additions made in the present case are not on the basis of books of account but on some random scribblings in loose papers and the alleged diary entries which can only be treated as “dumb documents” on the facts and circumstances of the case. iv. The authorities below ought to have realised that \"dumb document\" cannot be not admissible evidence in law, being documents, which are neither understandable nor intelligible, nor self-evident in themselves and therefore cannot advance the case of the department and cannot be relied upon to sustain the additions on the facts and circumstances of the case. Strong reliance in this regard is placed on the judgement of the Hon’ble Apex Court in CBI vs V.C.Shukla (1998) 3 SCC 410. v. The learned CIT(A) failed to also appreciate that it is well settled law that unless the author of the document is examined who alone can explain the entries and the transactions therein, no reliance can be placed on such document, more so when the document is dumb document and is incapable of speaking for itself. Consequently, the author of the document in question itself not being known and no attempt having been made to even trace the author, the department cannot be permitted to rely on the entries therein. vi. The learned CIT(A) further failed to appreciate that if at all any additions are made on any incriminating material, it can only be with corroborative material and not otherwise. There being no ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 29 of 155 corroborative material whatsoever on record, the additions are not sustainable on the facts and circumstances of the case. vii. The CIT(A) failed to take note that the reasoning of the AO that the material in A/KG/9 which is in the handwriting of the appellant is corroborates the alleged diary entries in A/KG/3 is fallacious in as much as the material in A/KG/9 itself is a dumb document and is unintelligible and therefore, it cannot be anyone’s case that one dumb document can be said to be corroborating another dumb document. viii. The learned CIT(A) failed to appreciate that addition made are unrealistic and further they do not constitute either real income or deemed income under any of the provisions of the Act on the facts and circumstances of the case. ix. The learned CIT(A) failed to take note that any kind of corroboration or correlation between the above two material is purely a case of unnatural force-fitting of some imaginary figures supposedly arrived at by the learned AO to the supposed admission of undisclosed income by the appellant in statement recorded u/s 132(4) with generous use of imagination even when they do not even have any semblance of relationship to each other on the facts and circumstances of the case. x. The learned CIT(A) also failed to appreciate that there is nothing in the said disputed diaries which has any nexus with the nature of income generating activities of appellant so as to treat any supposed receipts or payments therein as belonging or pertaining to the appellant. Consequently, the same are not and also cannot be construed as income of the appellant on the facts and circumstances of the case. xi. The learned CIT(A) failed to take note of the well-settled legal position that a non-speaking document without any corroborative material, that is to say some other material or evidence on record in conjunction with which it may be treated as speaking, has to be disregarded in framing of the assessment orders. xii. The learned CIT(A) erred in not taking note that the onus was on the department and the AO to demonstrate that the entries in the disputed diary or seized material have resulted in materialised transactions giving rise to income of the assessee on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 30 of 155 xiii. The learned CIT(A) is not justified in confirming the addition when the inference of income on the basis of the disputed diary in itself is glaringly a figment of imagination and not forthcoming even in the said notings or something that may be inferred objectively and without aid of any imagination on the facts and circumstances of the case. xiv. The CIT(A) failed to appreciate that none of the hypotheses of the learned AO is grounded in reality or any material on record. Thus, entire addition is only based on surmise and conjecture and at the most suspicion. xv. The CIT(A) ought to have appreciated that it is well settled position of law that no amount of suspicion can take the place of evidence. The very fact that the learned AO had to strain himself so much to force-fit the numbers itself reveals that the same is not self-evident in themselves so as to treat them as income of the appellant. xvi. The CIT(A) failed to notice that the mere mention of the word ‘received’ in the disputed diary cannot lead to any reasonable inference that the ‘appellant’ received such amounts as ‘income’ on the facts and circumstances of the case. xvii. The learned CIT(A) ought to have appreciated that the approach of the AO in making a sweeping statement that it is for the appellant to show that it is not his income is not supported by law and on the contrary it is for the AO to establish through investigation and corroboration that such income was ‘received’ and ‘received by the appellant’ and such receipt by the appellant is in the nature of ‘income of the appellant’ on the facts and circumstances of the case. xviii. The CIT(A) grossly erred in not considering that the corroborative evidence ought to have been in the form of recording the statements from the so-called parties with whom the alleged transactions are supposed to have been carried out more so when it is the claim of the department that it has deciphered the names of the parties in these alleged entries. xix. The CIT(A) failed to also consider that certain parties were summoned and statements were recorded from them by the department and it appears that none of them have vouched or confirmed any of the transactions therein and accordingly, the logical result would be to conclude that the alleged diary entries are not corroborated on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 31 of 155 xx. The CIT(A) ought to have appreciated that the incomes said to be attributable to the contents of the material in question apart from not being real income of the appellant do not even constitute deemed income of the appellant under any of the deeming provisions contained in section 68, 69, 69A, 69B, 69C or 69D of the Act. xxi. The CIT(A) also grossly erred in not taking note of the fact that if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. xxii. The very fact that there is nothing such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any assets in the hands of the appellant on the facts and circumstances of the case. xxiii. The CIT(A) erred in placing reliance on the decision of this Hon’ble Tribunal in ITA Nos.1362, 1363 and 1367/Bang/2013 in the case of M/s. Trishul Buildtech Infrasq (P) Ltd v. JCIT in as much as the factual matrix in that case is entirely different from the one in the present case of the appellant. That was a case where the entries in the seized diaries were clearly admitted by the assessee and further in respect of some of the entries therein, declared undisclosed income for various assessment years and therefore, it was held that he cannot disown the entries in the diary. 10. Grounds Regarding whether the Presumption u/s 292C of the Act is applicable in respect of the addition made. i. The learned CIT(A) erred in misconstruing the statutory presumption u/s 292C of the Act in making the addition in as much as though there is presumption as to belonging and correctness there is no presumption that the content therein indicates the income of the assessee. ii. The learned CIT(A) erred in law in attempting to use the declaration u/s 132(4) of the Act said to be made by the appellant even though the said statement finds no mention in the panchanama drawn up in the course of search proceedings on the facts and circumstances of the case. iii. Without prejudice, the learned CIT(A) also erred in law in attempting to use the declaration u/s 132(4) of the Act as corroborative evidence in as much as the said declaration is also validly retracted in the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 32 of 155 affidavit sworn to before a magistrate on the facts and circumstances of the case. 11. Grounds Regarding without prejudice, whether the manner of quantifying the above addition is in accordance with law? iv. The learned CIT(A) is erred in confirming the additions on the basis of the disputed diary as income of the appellant despite the fact that the disputed diary in itself is only a dumb document. v. The learned CIT(A) also failed to appreciate that unless the nature of the receipts and payments are established and any nexus with the nature of income generating activities of appellant are demonstrated, mere random figures appearing in the disputed diary cannot be employed in quantification of any supposed income of the appellant. vi. The learned CIT(A) failed to take note that the alleged incomes added in the hands of the appellant do not, in fact, emanate from the said disputed diary, and the entire addition is contrary to material on record and consequently additions are entirely perverse on the facts and circumstances of the case. 12. Ground Regarding whether the addition made of Rs. 1,08,49,584/- as unexplained investment in jewellery is in accordance with law? i. The learned assessing officer is not justified in making the addition of Rs.1,08,49,584/- as unexplained investment in jewellery by the appellant (Rs. 21,54,175/-) and the appellant’s spouse (Rs.86,95,409/-) u/s 69A of the Act on the facts and circumstances of the case. ii. The learned CIT(A) is not justified in taking note that the original addition in respect of this issue as per the assessment order was Rs.10,32,25,872/- which has been rectified subsequently u/s 154 of the Act by the rectification order dated 20.02.2018 and thus finally the addition is only to the extent of Rs.1,08,49,584/-. iii. The learned CIT(A) erred in confirming the perverse conclusion of the AO that the difference in the jewellery value as per the returns filed before the Lok Ayukta for the FY 2015-16 and the actual quantum of jewellery found in the course of search is unexplained investment on the facts and circumstances of the case. iv. The learned assessing officer is not justified in disregarding the revised returns filed before the Lok Ayukta which properly depicts the jewellery actually owned by the appellant on the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 33 of 155 v. The learned assessing officer failed appreciate that the proper explanation was tendered by the appellant for the apparent differences including the reconciliation of the quantum of jewellery as actually found in the course of search on the facts and circumstances of the case. vi. Without prejudice, the learned assessing officer ought to have appreciated that the very provisions of section 69A of the Act is not applicable on the facts and circumstances of the case. 13. Ground regarding: Whether the addition made of Rs. 86,95,409/- as unexplained investment in jewellery of appellant’s spouse on protective basis is in accordance with law. i. The learned CIT(A) is not justified in confirming the addition of the jewellery said to be belonging to the appellant’s spouse as unexplained investment in the hands of the appellant on the facts and circumstances of the case. ii. The learned CIT(A) is not justified in confirming the said addition on protective basis merely on the ground that no addition was made in the hands of the appellant’s spouse on the facts and circumstances of the case. iii. The learned CIT(A) is not justified in confirming the addition on protective basis when in the first instance no assessment on substantive basis has been concluded on the facts and circumstances of the case. iv. Without prejudice, the learned CIT(A) ought to have appreciated that the addition on protective basis could not have been made in an assessment made u/s 153A of the Act on the facts and circumstances of the case. 14. Ground regarding: Whether the manner of quantifying the above addition is in accordance with law? i. Without prejudice, the learned assessing officer grossly erred in quantifying the value of the jewellery in making the above addition on the facts and circumstances of the case. ii. The CIT(A) failed to appreciate that the department can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act. iii. The CIT(A) also consequently failed to appreciate that any valuation adopted for the purposes of assessment has to be solely based on such a report. Consequently, additions which are made not based on a valid report are liable to be deleted on the facts and circumstances of ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 34 of 155 the case. Reliance in this regard is placed on binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018 dated 19.08.2021. iv. Without prejudice, the learned assessing officer failed to appreciate that the quantification of the value of the differential jewellery is very high and needs to be substantially reduced on the facts and circumstances of the case. 15. The learned assessing officer is not justified in levying interest u/s 234A, u/s 234B and u/s 234C of the Act on the facts and circumstances of the case and further the quantum, period and rate are not discernible from the assessment order and the learned CIT(A) is not justified in holding that the same is consequential and not adjudicating the same specifically on the facts and circumstances of the case 16. The appellant craves for leave of this Hon’ble Tribunal, to add, alter, delete, amend or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing. 17. For these and other grounds that may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 3. Grounds of appeal by the Revenue : For Assessment Year 2014-15 (I) Based on the facts and circumstances of the case, whether the Id. CIT(A) was correct in allowing telescoping of amount of Rs. 64.5 Crores as payments without proper justification. (II) Whether on the facts and circumstances of the case, the Id. CIT(A) was right in allowing telescoping of payment made during the year amounting to Rs. 64.5 Crores without any satisfactory explanation from the assessee to prove the legitimacy of these claimed payments. (III) Any other grounds which may be urged at the time of hearing. For Assessment Year 2015-16 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 35 of 155 (I) Based on the facts and circumstances of the case, whether the ld. CIT(A) was correct in deleting the protective assessment of Rs. 329,75,00,000/- made in AY 2015-16 without considering the fact that the receipts are related to Lok Sabha Elections 2014 and the period of which extended to FY 2014-15 relevant to AY 2015-16. (II) Any other grounds which may be urged at the time of hearing. For Assessment Year 2016-17 (I) Based on the facts and circumstances of the case, whether the ld. CIT(A) was correct in allowing the amount of Rs. 273 crores as payments without proper justification. (II) Whether on the facts and circumstances of the case, the ld. CIT(A) was right in allowing receipts made during the year amounting to Rs. 273 crores without any concrete evidence from the assessee to prove the creditworthiness and genuineness of these receipts. (III) Whether on the facts and circumstances of the case, the ld. CIT(A) was correct in deleting the protective assessment considering it as confirmed on the substantive addition made for the AY 2013-14. (IV) Whether on the facts and circumstances of the case, the Id. CIT(A) erred in directing the Assessing Officer to delete the protective assessment of Rs. 8,29,48,070/- made in the hands of the assessee's wife for AY 2016-17 while the assessee's gold jewellery was assessed substantively, whereas his wife's was only assessed protectively. (V) Whether on the facts and circumstances of the case, the ld. CIT(A) erred in directing the deletion of the protective assessment of Rs. 4,00,602/- made on silver jewellery belonging to the assessee's wife for the AY 2016-17 when the same was not made substantively for the AY 20 13-14. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 36 of 155 (VI) Whether on the facts and circumstances of the case, the id. CIT(A) was correct in deleting the protective assessment without appreciating the fact that the assessee failed to provide any documentary evidence to establish whether the jewellery found and seized during the search proceedings was the same jewellery which was purchased during FY 2012-13 or purchased during FY 2015-16. (VII) Any other grounds which may be urged at the time of hearing. 4. All these seven appeals were heard together, therefore, we are passing a common order. The grounds raised by the assessee as well as Revenue are based on the documents found and seized during the course of search under section 132 of the Act and substantive/protective additions made on the basis of materials found and seized are marked as A/KG/3, A/KG/9 and A/KG/10 for all the years and difference in the reconciliation of jewellery related documents and affidavit are filed with the Returning Officer/Lokayukta. For the sake of convenience, we are deciding first the assessee's appeals filed for the Assessment Year 2013-14 and Assessment Years 2014 -15 to 2016-17 respectively. 5. Assessment Year 2013-14 Brief facts of the case are that the assessee is a Member of Legislative Council and Parliamentary Secretary to the Chief Minister of Karnataka, besides being office bearer of sports federations. He filed his return of income on 25.03.2014 declaring total income of Rs.6,03,150/- being Income from Salary, Income from House property ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 37 of 155 and Income from Other Sources. He also admitted agricultural income of Rs.91,000/-. The return of income was processed under section 143(1) of the Act returning a Nil demand. 6. A search under section 132 of the Act was conducted on 15.03.2016 at Room No. 306 Hotel CIDADE-DE- GOA and at his residence at Door No.206, 2nd Main, Domlur, 2nd Stage, Bengaluru, on 15.03.2016 to 17.03.2016 upto 3.15a.m. and last Panchanama was drawn on 14.05.2016 and search was concluded. The relevant documents are placed at page No. 17 & 18 of the Paper Book. Consequent to the search, the case was centralized vide notification passed by learned Pr.CIT, Bengaluru – 1, Bengaluru, in F.No.Pr.CIT/BLR-1/90/Centralization/2016-17 dated 01.08.2016. A notice dated 21.11.2016 under section 153A of the Act was issued and served on the assessee. In response, assessee filed return of income on 24.12.2016 admitting the same income as stated in the original return filed under section 139 of the Act. Thereafter, other statutory notices were issued to the assessee. During the course of search proceedings, several incriminating documents were found and seized. Out of these seized materials marked as A/KG/3, A/KG/9 and A/KG/10 were considered significant for completing the assessment for the Assessment Years 2013-14 to 2016-17. On verification of seized material marked as A/KG/10 at Pages 12 to 21, a copy of the affidavit ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 38 of 155 furnished along with nomination papers before the Returning Officer dated 01.06.2012 was verified, which is as under;- 7. On the basis of above, the AO treated the ownership of jewellery on the said date and observed that as per the affidavit filed, the assessee did not own any jewellery on 01.06.2012. The AO obtained information under section 133(6) of the Act from the Lokayukta about the assets and liabilities. From the information submitted by the Lokayukta, it was noticed that from period 01.04.2012 to 31.03.2013, the ownership of jewellery is placed at 1500 gms. approx. and inference was drawn that these jewelleries were acquired during the period 01.06.2012 to 31.03.2013 relevant to the Assessment Year 2013-14. Accordingly, the average rate as prescribed by the CBDT was adopted and average cost works at Rs. 2882.5 per gram factoring the reduction of 19.91% prescribed by the Board and the cost of jewellery was calculated at Rs.2,308.59 per gram and accordingly, the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 39 of 155 value of jewellery was calculated at Rs.34,50,000/- and brought to tax under section 69A of the Act. 8. Further, the AO noted from the statements filed before the Lokayukta that his spouse’s jewellery was placed at 350 gms but it was mentioned at 4500 gms with the Lokayukta. Considering the jewellery of 4150 gms (4500 gms – 350 gms) the AO observed that these jewelleries were acquired from 01.06.2012 to 31.03.2013 and calculated the value as per the above standard rate of Rs.95,45,000/- belonging to the spouse and was protectively added under section 69A of the Act in the hands of the assessee. Accordingly he completed the assessment under section 143(3) r.w.s. 153A of the Act on 29.12.2017 with the approval of JCIT, Central Range - 2, Bengaluru, in F.No. 51(3)/CIT/CR-2/2017-18 dated 29.12.2017 as per section 153D of the Act. 9. Aggrieved from the above Order, assessee filed appeal before the ld. CIT(A) raising the legal issue as well as on merits of the case. The assessee also filed written submissions on 28.01.2022 in detail which has been incorporated by the CIT(A) in his Order at Para No.6 from page No. 6 to 48. After going through the written submissions and documents available, the CIT(A) dismissed all legal issues and confirmed the additions. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 40 of 155 10. Aggrieved from the above Order, assessee filed appeal before the Tribunal raising similar legal grounds raised before the ld. CIT(A) as well as on merits of the case. The learned AR of the assessee, has filed a written synopsis on the arguments advanced by him during the course of hearing which is as under: 1. The assessee was searched u/s 132 of the IT Act on 15/03/2016 and in the search an affidavit, filed by the assessee before the Returning Election Officer, was found and seized as A/KG/10 in page no. 12 to 21. The affidavit dated 01/06/2012 averred that the Assessee did not own any jewelry and that his wife owned 350 gms of jewelry as on 01/06/2012. 2. During the assessment proceedings, the AO, as evidenced by the assessment order, called for information u/s 133(6) from the office of the Lokayuktha, being the statement of assets filed by the assessee with them. As per the said statement filed with the Lokayuktha, it was seen that the assessee had declared that he owned jewelry of 1500 gms and that his wife owned jewelry of 4500 gms as on 31/03/2013. 3. As a natural corollary, on comparison of these two statements, the AO inferred that the assessee and his wife had acquired jewelry of 1500 gms and 4150 gms respectively between 01/06/2012 and 31/03/2013 and brought the same to tax u/s 69A for the assessment year 2013-14. 4. The addition by way of unexplained jewelry u/s 69A said to be belonging to the assessee of Rs.34,50,000/-, was made substantively in his hands and the addition by way of unexplained jewelry u/s 69A said to be belonging to his wife of Rs.95,45,000/-, was made protectively in his hands. 5. Aggrieved by these additions, which were subsequently confirmed by the LD. CIT(A), the assessee is in appeal before the ITAT. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 41 of 155 6. The Legal Grounds, which are directly applicable to the facts of this case and raised by the Assessee, are as under: A. The addition made is based on material which is not found and seized in the search u/s 132 and hence is bad in law for the reason that an addition can be made in an assessment proceeding u/s 153A of the Act, of an assessment year which does not abate, only and only if there is incriminating seized material found in the search. (a) It is an undisputed fact that the search being conducted on 15/03/2016, the assessment proceedings for the A.Y. 2013-14, does not abate in as much as it is a concluded assessment. (b) It is a settled law that if the AO wants to disturb the assessment for the A.Y. 2013-14, he can do so only if there is incriminating seized material indicating undisclosed income. The material that is found in the search and relied upon by the AO is the affidavit dated 01/06/2012, filed with the returning officer, declaring jewelry of Nil gms and 350 gms in the hands of himself and his wife. This document by itself is not incriminating in nature. (c) The Learned DR has urged that this document filed before the Returning Officer is an incriminating seized material found in the search. This contention is incorrect in law in as much as even though the said document is seized, it does not by itself reveal any incriminating information to the effect that the assessee has undisclosed income by way of jewelry. (d) Had the document, filed before the Lokayuktha, which is a declaration of jewelry held by the assessee as on 31/03/2013, also been found and seized in a search, then the same would constitute document found and seized in the search and a comparison of both these documents could lead an inference of unexplained jewelry. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 42 of 155 (e) In support of the submission that the second document namely, the Lokayuktha return filed for 31/03/2013 was not even available in the course of the search proceedings, it is amply clear by going through the statements recorded in the course of search that nowhere in these statements, the investigating authorities had posed any query putting forth the said Lokayuktha return before the appellant. The query was asked for the very first time by the AO in the statement obtained u/s 131 on 08/12/2017 which is just before the passing of the assessment order on 29/12/2017. (f) The document which was called for u/s 133(6) from the Lokayuktha which showed that the assessee had declared 1500 gms and 4500 gms of jewelry in hands of himself and his wife respectively, is not a document which is found and seized in the search. This document constitutes other information in the possession of the AO, which is not material found and seized in a search. This document does not empower the AO to assume jurisdiction u/s 153A to assess the income for the A.Y. 2013-14. The AO would have been well within his rights to assume jurisdiction u/s 147 of the Act to reopen the assessment for the A.Y. 2013-14, if he relied upon the statements obtained from the Lokayuktha during assessment proceedings, but not found in the search u/s 132. (g) The assessee relies upon the binding decision of the Hon’ble Supreme Court in the case of PCIT vs Abhisar Buildwell (P) Ltd 149 taxmann.com 399 (SC), wherein the Hon’ble Supreme Court have clearly laid down the law in the case of assessments u/s 153A for those assessment years which do not abate. The Hon’ble Supreme Court at para 11 held as follows: “However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 43 of 155 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. The Hon’ble Supreme Court, in summarizing its decision in clause (iv) of Para 14 of this order has clearly held as follows: “in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the search under section 132 or requisition u/s 132A of the Act, 1961. However, the completed/unabated assessments can be reopened by the AO in exercise of powers u/s 147/148 of the Act, subject to fulfillment of conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.” (h) It is clear from the above judgment that when applied to the facts of this assessee’s case, material found in the search ie. declaration before the Returning Officer as on 01/06/2012 is not incriminating in nature. The AO cannot reopen proceedings for the A.Y. 2013-14 u/s 153A by means of the declaration dated 01/06/2012. (i) The declaration of assets filed before the Lokayuktha as on 31/03/2014, was not found in the search and hence constitutes other information in the possession of the AO. The AO would have been well within his rights to reopen the assessment of A.Y. 2013-14 by resorting to Section 147/148, based on information obtained from Lokayuktha during the assessment proceedings, subject to fulfillment of the conditions prescribed in sections 147/148 of the Act. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 44 of 155 B. The protective assessment in the hands of the appellant cannot also be sustained when there is no substantive assessment in the first place. There is also no reason forthcoming in the assessment order as to why a protective assessment is sought to be made in the hands of the appellant. In support of the above proposition, the appellant relies on the following judicial precedents: (a) The decision of the coordinate bench of the ITAT Delhi in ITO v. M/s. Fussy Financial Services Pvt Ltd ITA No.4227/DEL/2014 dated 05.06.2017 [page nos. 329 to 337 of Case Laws Compilation], where it was held : “…………In this case we find that AO has not made any substantive assessment. There may be substantive assessment without any protective assessment, but there cannot be any protective assessment without there being a substantive assessment.” (b) The decision of the coordinate bench of the ITAT Mumbai in Suresh K Jajoo v. ACIT [2010] 39 SOT 514 (MUM.) [page nos. 338 to 363 of Case Laws Compliation] where it was held: “….Secondly, there is no substantive assessment already made treating the capital gain as short-term capital gain. Therefore, there can be no protective assessment.” [Para 28] In view of the above judicial precedents, the protective addition of Rs.95,45,000/- made in the hands of the assessee, in the absence of a substantive addition in the hands of his wife, is also bad in law and needs to be deleted. C. The Third issue is that the AO made additions to income u/s 69A of the Act of unexplained jewelry and the same is entirely in contravention of the provisions of 69A, considering the facts and circumstances of the case. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 45 of 155 (a) It is submitted that the provisions of section 69A of the Act would apply only where the jewellery are found and that such jewellery are owned by the assessee in any financial year. Then, failing any proper explanation as to the source of acquisition of the same, there would be a presumption that the same may be treated as income of the assessee. (b) In the instant case of the appellant, it is not that any jewellery was found in the case of the assessee in financial year 2012-13 (relevant to AY 2013-14). The search took place on 15.03.2016 and certain jewellery was found at the time of search and which is also properly explained and reconciled. Therefore, it is most respectfully submitted that the provisions of section 69A of the Act does not apply to the present case for the A.Y. 2013-14 and therefore the addition is to be deleted for advancement of substantial cause of justice. D. The Fourth issue is that the AO was wrong in adopting the CBDT Values in making additions to income by way of unexplained jewelry u/s 69A of the Act. The Appellant places reliance on the binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018, by order dated 19th August 2021, wherein the Hon’ble High Court held that the Assessing Officer can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act and any valuation adopted for the purposes of assessment has to be solely based on such a report and additions which are made not based on a valid report is liable to be deleted. In the case of this appellant the addition made by the AO is not based on a valuation report furnished by a Valuation Officer appointed u/s 12A of the Wealth Tax Act and hence the entire addition needs to be deleted. In conclusion the Appellant submits that his appeal be allowed for the advancement of the substantial cause of justice. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 46 of 155 11. The learned AR had also argued orally the contents of the written synopsis, during the course of hearing. 12. The learned DR has relied on the Order of the AO and to the extent of the Order of CIT(A) where the CIT(A) has confirmed the addition made by the AO. He has submitted a common written synopsis for all the four Assessment Years for the Assessment Years 2013-14 to 2016-17 which are as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 47 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 48 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 49 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 50 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 51 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 52 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 53 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 54 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 55 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 56 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 57 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 58 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 59 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 60 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 61 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 62 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 63 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 64 of 155 13. The learned DR also referred to the statements recorded under section 131(1A) of the Act on 06.05.2016 where he strongly supported to the question No.30. The learned DR also relied on question and answer No.62 recorded on 18.04.2016 under section 131(1A) of the Act which is as under: Q.62 I am showing you the document seized at your residence during the course of search proceedings u/s. 132 of the I.T.Act, 1961 which is marked as A/KG/9 dated 15.3.2016 at Page No.3. Please explain the same. Ans. Yes, I have gone through the same. The names found on Page No.3 are the congress party leaders. 14. The learned DR submitted that the inference drawn by the DDIT (Inv. Wing), in question No.30 is entirely on the basis of answer given by the assessee in answer No.62 which is placed at Paper Book Page No. 43. Therefore, the observations noted by the DDIT (Inv. Wing) are correct. As per question No.29 document No.A/KG/3 which was found and seized is as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 65 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 66 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 67 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 68 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 69 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 70 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 71 of 155 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 72 of 155 15. On the other hand, the learned DR relied on the Order of the lower authorities and submitted that the documents found during the course of search and seizure in the premises of the assessee which was ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 73 of 155 marked as A/KG/10 is corroborated with the information received under section 133(6) from the Lokayukta by the AO and he observed that there is difference in the jewellery declared. Therefore, the information received from the Lokayukta is part and parcel of the incriminating documents found during the course of search. The assessee has not explained the apparent discrepancies in his own statements on affidavit before the statutory authorities at two different points of time. Therefore, the AO has rightly made addition under section 69A of the Act. He further submitted that assessee is a Member of Legislative Counsel. The declaration given to Lokayukta cannot be denied as the assessee holds a very responsible post as a public representative. Therefore, he requested that the Order of the lower authorities should be confirmed. 16. Considering the rival submissions, we noted that during the course of search and seizure under section 132 of the Act, document market as A/KG/10 was found which is affidavit furnished to the Returning Officer in which there is no jewellery mentioned in the name of assessee and in the name of wife only 350gms were declared. However, the AO received information under section 133(6) of the Act with the Lokayukta and noted that there is ownership of jewellery of 1500 gms in the assessee’s name and 4500 gms in the name of his spouse. Accordingly, the AO, on the basis of seized material and information received, made addition under section 69A of the Act. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 74 of 155 However, the assessee has strongly contested that addition cannot be made under section 69A of the Act since no physical gold jewellery belonging to the assessee as well as his spouse was found. For the sake of convenience, we are reproducing section 69A of the Act which is as under: “69A. Unexplained investments. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income57, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the 58[Assessing] Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income57 of the assessee for such financial year.]” 17. On going through the common Paper Book filed by the assessee for the Assessment Years 2013-14 to 2016-17, assessee has filed reconciliation statement and affidavit regarding the difference in the jewellery reported with the Lokayukt. Assessee has also written letter to the DCIT (Inv.), Circle – 2(3), 3rd Floor, CR Building, Bengaluru, in ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 75 of 155 which he has stated that his mother passed away in the year 1986 and thereafter, the assessee got 1/5th share as per their family arrangements among two brothers and two sisters and has submitted that while filing annual statement of assets, the jewellery belonged to his mother and family was included. In the month of January, 2016, his brothers and sisters mutually agreed and received jewellery of 1228.84 gms. Further, on going through the statement recorded under section 131 of the Act dated 18.12.2017 as per question-and-answer Nos.41 and 42, it was stated that reconciliation statement shall be filed and later the assessee has filed reconciliation statement. During the course of search and seizure action under section 132 of the Act, we noted that there was no jewellery seized. Only the AO has made addition on the basis of an affidavit found during the search filed with the Returning Officer marked as A/KG/10 and information received under section 133(6) of the Act from Lokayukta which cannot be treated as incriminating material found during the course of search. The law is now settled by the Supreme Court that for making addition under section 153A of the Act for the unabated / completed assessment, the addition can be made only on the basis of seized material unearthed during the course of search proceedings. The information received from Lokayukta was not found during the course of search. 18. During the course of search, the learned Counsel strongly contested that the AO has no jurisdiction to issue notice under section ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 76 of 155 153A of the Act since no incriminating documents were found for the impugned Assessment Year 2013-14. The documents found and marked as A/KG/10 is only an affidavit filed before the Returning Officer and the very basis for making addition by the AO is information received from Lokayukta under section 133(6) of the Act by the AO. During the course of search, there was no pending assessment proceedings for the Assessment Year 2013-14 as on the date of search and the time limit for issuance of notice under section 143(2) of the Act had also expired. Therefore, this year is to be considered as unabated assessment. The affidavit found does not contain any gold jewellery in the name of assessee. The Hon’ble Apex Court in the case of PCIT Vs. Abhisar Buildwell (P) Ltd., reported in 149 taxmann.com 399 (SC) held that income of any Assessment Year which does not abate on the date of search under section 132 of the Act cannot be disturbed in the absence of incriminating material pertaining to such Assessment Year being found and seized in search under section 132 of the Act and this view is dealt by the Hon’ble Apex Court in clause IV of para 14 of its Order which is as under: “ (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 77 of 155 of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.” 19. The question now that arises for consideration is whether the copy of the affidavit dated 01.06.2012 filed by the assessee before the Returning Officer for the purpose of contesting in election which was found and seized during the search under section 132 of the Act can be treated as incriminating document found and seized during the search. The affidavit admittedly showed that as on 01.06.2012, the assessee did not own any jewellery and that his wife owned about 350 grms of jewellery. The information contained in the document by itself cannot be considered as incriminating. It will assume the character of being incriminating in nature only when it is compared to any other material found and seized during the search and which prima facie disproved the content of this affidavit filed before the Returning Officer. The AO has compared the contents of these affidavits failed before the Returning Officer with a declaration of assets as on 31.03.2013 as declared by the assessee before the Lokayukta in which the assessee has declared that he owns 1500 gms of jewellery and his wife owns 4500 gms of jewellery as on 31.03.2013. This declaration of assets made before the Lokayukta was obtained by the AO from the Office of the Lokayukta under section 133(6) of the Act during the assessment proceedings subsequently and the same was not found and seized in the search proceedings under section 132 of the Act. This declaration of assets as on 31.03.2013 filed before the Lokayukta not being found ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 78 of 155 during the search partakes the nature of other information in the possession of the AO. 20. In view of the decision of Hon’ble Apex court in the case of PCIT Vs. Abhisar Buildwell (P) Ltd., (supra) it can be safely concluded that the addition made by the AO are based on the document which was not found during the search under section 132 of the Act and which is in the nature of other information as per the decision of the AO. The AO could have used this information to reopen the assessment under section 147 of the Act subject to the fulfilment of the preconditions therein. But he does not have jurisdiction to make these additions in the assessment proceedings under section 153A of the Act. We find that the CIT(A) was not correct in dismissing this ground that addition cannot be made in the absence of incriminating material in Assessment Year which does not abate. The learned CIT(A) has not duly considered the decisions of the jurisdictional High Court in the case of IBC Knowledge Park reported in 385 ITR 346, in the case of Lancy Constructions in ITA No.528/2014, Order dated 15.12.2015 and in the decision of the Hon’ble Delhi High Court in the case of Kabul Chawla reported in 380 ITR 573 which decisions were relied upon by the assessee in the first appellate proceedings before him. During the course of hearing, the learned Counsel has also relied on the other judgments which supports the case of the assessee. Accordingly, we concur with the arguments advanced by the learned Counsel for the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 79 of 155 assessee. In view of the above findings, the entire addition, both protective and substantive, made on account of jewellery said to be belonging to the assessee and his wife is hereby deleted and the impugned Assessment Order is set aside. 21. The learned Counsel for the assessee did not argue on legal issues taken from ground No. 2 to 6, therefore, these are kept open. 22. In the result, appeal filed by the assessee is allowed as per above terms. 23. ITA Nos.1022 to 1024/Bang/2024 (assessee’s appeals) ITA Nos.1290 to 1292/Bang/2024 (Revenue’s appeals) These three appeals in ITA Nos.1022 to 1024/Bang/2024 has been filed against the order passed by the learned CIT(A) confirming the addition made in the Assessment Order passed under section 153A r.w.s. 143(3) of the Act and the Revenue has filed appeal in ITA Nos.1290 to 1292/Bang/2024 on the relief given by the learned CIT(A) on the above Order passed under section 153A r.w.s. 143(3) of the Act. 24. Briefly stated, the facts of the case are that the assessee filled return of income under section 139(1) for the following three Assessment Years as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 80 of 155 Sl. No. Assessment Years Date of filing of return under section 139(1) of the Act Income declared (in Rs.) 1. 2014-15 06.02.2015 8,00,900/- 2. 2015-16 11.02.2016 10,30,780/- 3. 2016-17 04.08.2016 20,96,630/- 25. There was search conducted in the case of the assessee from 15.03.2016 to 17.03.2016 at his residence and on 15.03.2016 at Room No. 306, Hotel CIDADE-DE- GOA. During the course of search several incriminating documents were found and seized and marked as A/KG/31, A/KG/9 and A/KG/10. During the course of assessment proceedings, the assessment for all the years were based on the above three documents found and seized. During the course of search proceedings, a diary was found where various figures and some narrations were noted. 26. The issue involved in these appeals are very same and the addition made by the AO is only based on the material marked as A/KG/3 AND A/KG/9 found during the course of search. The assessee had filed return of income under section 139(1) of the Act for the Assessment Years 2014-15, 2015-16 and 2016-17 as noted above. In pursuance of notice issued consequent to the search conducted, the notice under section 153A of the Act dated 21.11.2016 was issued to the assessee against which the assessee filed return of income in ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 81 of 155 pursuance to the notice under section 153A of the Act on 24.12.2016 as under:- Sl. No. Assessment Years Date of filing of return under section 153A of the Act Income declared (in Rs.) 1. 2014-15 24.12.2016 8,76,880 2. 2015-16 24.12.2016 20,39,960 3. 2016-17 04.08.2016 [under section 139(1) of the Act] 20,86,630 27. The AO issued other statutory notices. During the course of assessment proceedings, various documents and statements recorded during the search and post search proceedings were relied on by the AO on the basis of diary found marked as A/KG/3 and A/KG/9 where some entries were made which was relied on by the AO and completed the assessment. 28. The summary of addition made by AO are as under:- Particulars AY 2016-17 AY 2015-16 AY 2014-15 Returned income 20,86,630 20,39,960 8,76,880 Additions: Undisclosed income (on the basis of alleged diary entries) 408,50,00,000 329,75,00,000 (protective addition) 329,75,00,000 (substantive addition) Undisclosed assets (jewellery) 1,08,49,584 - - ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 82 of 155 Assessed Income 409,79,36,210 329,95,39,960 329,83,76,880 29. During the course of search proceedings, loose sheets, Diary and documents were found and marked as A/KG/3 and A/KG/9 were seized. The AO observed that Page 9 of the seized document A/KG/9 is admittedly in the assessee’s handwriting and assessee was examined on both these seized documents on different occasions. The AO has scanned the documents in the Assessment Order. The AO analysed the statement recorded under section 131 and 131(1A) of the Act. The assessee continuously denied the figures noted in the diary and loose sheets and the answers were given in the same fashion on the statements recorded on oath on different dates. The AO observed from the contents of the diary as under: Received Steel Bridge 65 cr MBP 15 cr HCM 13 cr KJG 30 cr DKS 12 cr 135 cr ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 83 of 155 30. The above total was not drawn in the material found. On aggregating the sum, the same totals to Rs.135 Crores. Thus, the AO observed that:- (a) the two seized materials are interconnected (b) transactions are financial in nature (c) the amounts are in crores and further made comparison of page 9 of A/KG/9 with page 3 and 3A of A/KG/3 and drew a table as under: A/KG/3 A/KG/3 A/KG/9 A/KG/9 Steel Bridge 65 65.5 MBP 15 37 HCM 13 10 KJG 30 10 MBP DKS 12 12.5 135 135 31. The AO also comes to a conclusion that on comparison of the figures placed at the first and the last are tallied except for a difference of 0.50 in cash. Thus, it became clear that A/KG/9 had an estimate of receipt of 135 against which a working had been made with the actual 135 received is recorded in A/KG/3. Thus, the evidence found and ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 84 of 155 seized from the residence of the assessee which is marked as A/KG/3 was assumed as credibly significant for making addition. The transactions for previous year are also recorded which is evident from the word “L. S. Election-2014”; BBMP Election”; and “ZP – TP Election”. The AO then establishes connection as well as the existence of financial transaction encircled figure to 2.50 in A/KG/9 assumes significance. The 0.50 is marked commission along with shortage which means 2 out of 2.5 is marked for commission. Further, according to AO on comparing the receipts and payments recorded, it becomes clear that from this financial transaction, the assessee earned commission. Further, on analysis, it was observed that is as appearing as commission is to be paid as commission to another person which was necessarily considered as expenditure of the assessee. Accordingly, the following table was drawn by the AO as the commission received and paid / payable on the financial transactions. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 85 of 155 32. Rs.15 Crore was admitted in the statement recorded under section 132(4) of the Act on 17.03.2016 which is clear from question and answer 104. The AO, as per para 9.6 of the Assessment Order, has drawn inference that Rs.15,16,39,600/- is undoubtedly taxable in the hands of the assessee. The seized documents were put forth before assessee on various occasions but he denied every time stating that the contents of the seized materials does not belong to him. The AO further noted that it is an unequivocal fact that the said material was found and seized in the residential premises of the assessee as evidenced by the seized material and the panchanama which are duly attested by independent witnesses besides the authorised officer and the assessee's wife Smt. Hamsaraj can be seen from the scanned copy placed hereinabove at para 7.1 and onwards of the Assessment Order. It cannot be the case that mere denial of knowledge of the contents of the evidence would suffice especially in the light of the fact that some of the entries match with the entries contained in the other material marked as A/KG/9 as brought out hereinabove. This being the case, the onus lies with the assessee to establish as to whom it belongs to if not to him and how is it that these entries match with the entries made by him in A/KG/9. The consistent mode of denial is merely an act of non- co-operation which can only lead to adverse inference being drawn. 33. The AO after examining the entire documents marked as A/KG/3 and A/KG/9 where receipts and payments are listed, the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 86 of 155 receipts have not been evidently explained relating to any source nor it has been incontrovertibly being established as belonging to another person making the applicability of provisions of section 132(4A) and section 292C of the Act inevitable and it was put to the assessee on 30.01.2017. Question No.34 was relied on by the AO on 25.05.2016. Further a proposal placed before the assessee in the light of provisions of section 292C is also placed hereunder: 34. Further the AO referred to section 292C of the Act and observed that section 292C of the Act is fully applicable in the case of the assessee due to the fact that the seized material is established beyond ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 87 of 155 doubt to belong to the assessee despite his insistence of denial. The corroborative facts also establish the genuineness of the contents of the seized material making it irrefutable evidence. The AO relied on the following judgments : 1. Hiren Vasantlal Shah v ACIT (2012)19 taxmann.com 241 (Guj)2. 2. Alliance Hotels v ACIT -12(1) 64 SOT 163 (ITAT Mumbai Bench 'A') 3. Hassan Au Rhan reported in 157 lTD 529, ( ITAT Mumbai) 35. Relying on the above judgements, the AO noted that it therefore becomes a settled principle even judicially that the onus of establishing that the contents of a seized document do not have a bearing on one's income rests solely on the assessee which remains undercharged till date. 36. The AO again noted that the assessee has adopted denial as the only mode of rebuttal without furnishing any reasons assigned as to the nature of receipt or payment, the persons involved, the transactions that the document reveals despite establishing that these amounts have been transacted which is also recorded in his own handwriting in another material seized which has been admitted. Thus the judicial precedents render the amounts recorded in the seized material A/KG/3 taxable in the hands of the assessee. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 88 of 155 37. Assessee filed petition before the Finance Minister and even lodged a police compliant. No authorized representative has filed any power of attorney even though notice under section 143(2) of the Act and other notices were issued. The assessee appeared and he contested the admission of Rs.15 Crores on the ground that (a) no undisclosed assets / investments have been found (b) the statement given was under coercion and it was filed on 22.08.2017 in writing. 38. The various statements recorded on these materials from 15.03.2016 are listed hereunder: 39. Thus, after giving various opportunities listed above, the assessee failed to utilize and was also put on notice of the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 89 of 155 consequences of presumption under both sections 132(4A) and 292C of the Act, which has not been considered by the assessee. 40. For the Assessment Year 2014-15 from the seized material, the AO concluded the addition of Rs.329.75 Crores as under: L.S election 2014 219 47 23 16.75 24 329.75 41. Thus, a sum of Rs. 329.75,00,000/- was brought to tax as undisclosed income of the assessee for Assessment Year 2014-15 on the lines of the judicial precedents as noted above. The amount of commission of Rs. 8,24,37,500/- worked out at para No.9.3 of the assessment order forming part of the receipts was not separately taxed and was telescoped. 42. For the detailed analysis made in the Assessment Year 2014-15, the sum of Rs. 329,75,00,000/- was assessed protectively for the Assessment Year 2014-15 including the telescoping of the commission quantified at Rs. 8,24,37,500/- as the period of Lok Sabha Election involves more than a month of Financial Year 2014-15. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 90 of 155 43. For the Assessment Year 2016-17 from the seized material, the AO concluded the addition of Rs.273 Crores as under: 44. Further expenses during the relevant period were also examined which is as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 91 of 155 45. From the above table, the AO drew inference that the total expense calculated as above of Rs.408.50 Crores are after giving credit of Rs.273 Crores from the above tables. The receipts have been extracted. The total unexplained expenditure was arrived at Rs.135.50 Crores and held to be unexplained expenditure. Considering the matching concept and explanation offered by the assessee, the entire ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 92 of 155 sum of Rs. 408.50 was treated as income and applied section 69C of the Act and provisions of Section 115BBE of the Act was applied. 46. Further, during the course of search under section 132 of the Act, the gold jewellery and silver were found and inventorized. In the course of proceedings, the assessee’s wife filed letter dated 27.09.2017 accompanied by affidavit of the assessee, Shri. Ashwin Raj, Smt. Hamsaraj and Smt. Chitra, sister-in-law of assessee. As per these affidavits, the jewellery found during the course of search belonging to each of the persons is tabulated as follows: 47. The AO observed from the statement before the Lokayukta that the position as on 31.03.2016 was as under: 48. From the affidavit filed and other documents available, the AO calculated the value in the hands of the assessee and treated as unexplained investments under section 69A of the Act as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 93 of 155 49. Considering the entire facts and documents available with the AO, assessment was completed. The assessee filed rectification petition under section 154 of the Act for the Assessment Year 2016-17 for the addition made towards jewellery under section 69A of the Act which was partially accepted and restricted to the addition as undisclosed assets to Rs.1,08,49,584/-. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 94 of 155 50. Aggrieved from the above Order, assessee filed appeal before the CIT(A) and the CIT(A) gave partial relief. 51. Against the Order of the CIT(A), assessee and Revenue are both in appeal before the Tribunal as per their grounds noted above. 52. The learned AR of the assessee has filed written synopsis of arguments which are as under:- \"1. In the course of the assessment proceedings, the AO took note of certain seized materials identified as A/KG/3 and A/KG/9 and termed them to be incriminating in nature. The document identified as A/KG/9 (extracted at pg. 2 of assessment order for AY 2014-15) appears to be loose notings and scribblings which admittedly is in the handwriting of the appellant. The document identified as A/KG/3 (extracted at pg. 8 onwards of assessment order for AY 2014-15) appears to be a diary which does not belong to him and it is an admitted by the Revenue that the entries therein are not written by the appellant. 1. The AO has made an addition of Rs.329,75,00,000/- based on the entries found in this diary, substantively in the A.Y. 2014-15 and protectively in the A.Y. 2015-16, based on the very same entries as the AO is not sure about the Assessment Year, to which these entries relate to. 2. Apart from the above addition of Rs.329,75,000/- the AO has made an addition of Rs.408,50,00,000/- in the A.Y 2016-17. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 95 of 155 3. The AO has also made an addition of Rs.1,08,49,584/- by way of unexplained jewellery, u/s 69A of the Act for the A.Y. 2016-17. 4. The submissions of the Appellant on the issue of additions made on the basis of entries in a Diary found during the search are as under: (a) The AO has made additions to income based on the entries found in the Diary marked as A/KG/3, purely based on his assumptions, presumptions, conjectures, imagination, suspicion and surmise which is not backed by any cogent material or evidence on record. (b) The additions made in the present case are not on the basis of books of account but on some scribblings in loose papers and the alleged diary entries which are be necessarily treated as dumb documents. It is a settled position in law that additions can be made on the basis of scribblings and notings only and only if such scribblings and notings are supported and evidenced by some corroborative material and not otherwise. It is also a settled position in law that \"dumb documents\" by themselves are not considered as evidence under law. (c) The appellant places reliance on the following judicial precedents in respect of the above proposition of law: (i) CBI vs V.C.Shukla (1998) 3 SCC 410, [1998] 1998 taxmann.com 2155 (SC) [page nos. 29-50 of Case Laws Compilation] Para 37 in Page 43 of the Compilation: “In Beni v. Bisan Dayal, AIR 1925 Nagpur 445 it was observed that entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 96 of 155 independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha, AIR 1953 Pepsu 113 the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to have been proved said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business are relevant whenever they refer to a matter in which the Court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts. Para 38 in Page 44 of the compilation The evidentiary value of entries relevant under Section 34 was also considered in Hiralal Mahabir Pershad, (supra) I. D. Dua, J. (as he then was) speaking for the Court observed that such entries though relevant were only corroborative evidence and it is to be shown further by some independent evidence that the entries represent honest and real transactions and that monies were paid in accordance with those entries.” In Para 39, in Page 44 of the compilation, the Hon’ble Supreme Court observes as under: “A conspectus of the above decisions make it evident that even correct and authentic entries in books of accounts, cannot without independent evidence of their trustworthiness, fix a liability upon a person.” When applied to the fact of the case of the present appellant it is clear that the Diary, even if considered as being part of books of account maintained by the appellant, the entries therein cannot be ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 97 of 155 relied upon to fasten a liability, in the absence of independent corroborative evidence which will validate these entries. This decision is squarely applicable to the facts of the appellant’s case. (ii) Common Cause v. UOI [2017] 394 ITR 220 (SC) [page nos. 51-59 of Case Laws Compilation] Para 20 in Page 57 of the compilation “It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under Section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value.” This decision is also squarely applicable to the facts of the appellant’s case. (iii) DCIT v. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka) [page nos. 60-90 of Case Laws Compilation] Para 48 in Page 88 of the compilation “In the given facts and circumstances of the matter, it is relevant to refer to the case of Nishant Construction (P.) Ltd. v. ACIT [IT Appeal No. 1502 (Ahd.) of 2015, dated 14-2-2017], wherein it is held that, in the absence of any corroborative evidence, loose sheet can at the most be termed as \"dumb document\" which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition. Reliance can also be placed on the judgment of the Panaji Bench of ITAT in the case of Abhay Kumar Bharamgouda Patil v. Assessmentt. CIT [2018] 96 taxmann.com 377, wherein the judgment of the Apex Court was relied upon.” ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 98 of 155 In the above cited case the Jurisdictional Karnataka High Court after relying upon the decisions of the hon’ble Apex Court in the VC Shukla Case and the Common Cause case, held that the Revenue cannot even assume jurisdiction and issue a notice to assess a person u/s 153C on the basis of entries in a diary, as diary entries are not considered as themselves, which are not supported by any not corroborative evidence. If one were to apply the ratio of this decision to the facts of the Appellant’s case, the AO does not even have jurisdiction to issue a notice u/s 153A in respected of assessment year which does not abate , merely relying upon entries in a diary found during search and which are not corroborated by any independent evidence which validate these entries. When such is the position in law, the AO has no jurisdiction to even issue a notice u/s 153A under these facts and circumstance, let alone make an addition to income based on such diary entries which have no corroborative evidence. This decision is also squarely applicable to the facts of the appellant’s case. (iv) Sri Tarun Kumar Goyal v. ACIT ITA No.456/Hyd/20 dt. 20.04.2021:[page nos. 91-127 of Case Laws Compilation] Para 13 in Page 125 of the compilation “Lastly comes the crucial issue as to whether the impugned seized material / ‘Excel’ sheet (not mentioning the assessees’ names) forms a dumb document or not. We make it clear that the department has failed to corroborate the impugned seized document indicating assessee’s alleged on money payment over and above the sale price itself. All it has done is to rely on their father’s name only. It is nowhere clear as to whether it is an alleged document forming part of the books of account maintained in the regular course of business either by the vendor or vendee side. All it contains therefore is rough notings and jottings only. This tribunal co-ordinate bench’s ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 99 of 155 decision Nishan Constructions Vs. ACIT ITA No.1502/Ahd/2015; after considering the hon'ble apex court’s landmark decision in Common Cause, Vs. Union of India (2017) 77 taxmann.com 245 (SC) and CBI Vs. V.C.Shukla (1998) 3 SCC 410 (SC) holds that such loose sheets deserves to be treated as a dumb documents only since not revealing full details about the dates containing lack of further particulars and therefore, ought not to be made basis of an addition. Similar other judicial precedents ACIT Vs. Layer Exports PLtd., (2017) [184 TTJ 469] (Mumbai) and ITO Vs. Kranti Impex Pvt Ltd., ITA No.1229/Mum/2013, dt.28-02-2018 (dealing with a seized document seized not either bearing the taxpayer’s name or signature). Shri Neeraj Goyal Vs. ACIT, ITA No.5951/Del/2017, dt.21-03-2018, (Del) (2012) 23 taxmann.com 269] Nagarjuna Construction Co. Ltd., Vs. DCIT, CIT Vs. S.M.Agarwal, [293 ITR 43], CIT Vs. Shri Girish Chaudhary (2008) 296 ITR 619 (Del) also echo the very principle. We accordingly hold that the impugned addition of on-money payment made in both these assessees’ hands on the basis of a mere dumb document and not corroborated by any other evidence is not sustainable. We thus direct to delete the impugned identical addition forming subject matter of adjudication in both these cases.” (v) ITO v. Ramachandra Setty and Sons [2024] 163 taxmann.com 666 (Bangalore - Trib.) [page nos. 128-198 of Case Laws Compilation] Para 13.13 in Page 165 of the compilation (last four lines from the bottom of the para) “These are dumb sheets which have no relevance and its authenticity to rely upon on its face value. Such loose sheets and scribblings cannot be the primary evidence to base the assessment upon. These sheets also cannot be relied upon to hold that the assessee has earned any undisclosed income by way of unaccounted sales or unaccounted investments in the form of unaccounted purchases.” Para 13.14 in Page 165 of the compilation ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 100 of 155 “Further, in reading the above, it cannot be inferred that the unaccounted transactions have taken place in the hands of assessee and it's not in good faith to presume it to be the unaccounted transaction. From this sheet of seized material, it can also be seen there are various figures mentioning that it is estimate and in such scenario it would not be prudent to assume as per the whims and fancy of the AO that the said figures mentioned therein is the undisclosed transactions of the assessee to make an addition basing the decision on such loose sheets trough it is a dumb document and not to be considered while making such assessment in search cases as they are not preliminary evidence to prove that any unaccounted transactions has been carried on by the assessee.” Para 13.18 in Page 166 of the compilation “In the case of CIT v. M/S Khosla Ice and General Mills 2013 (1) TMI 451 - Punjab andHaryana High Court, the Hon'ble Court held that assessee rightly contended that the impugned document was a non-speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totalling various figures jotted down on such document.” Para 13.45 in Page 175 of the compilation “Thus, it is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 101 of 155 of notings on the loose sheet papers which are in the nature of \"dumb documents\" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondent- assessee and its group companies, no material whatsoever was seized and found indicating payment of on-money consideration at the time of purchase of the lands.” Para 13.46 in Page 176 of the compilation “We find that the conclusions reached by the Assessing Officer are merely based on presumptions and assumptions without bringing corroborative material on record. It is settled position of law that no addition in the assessment can be made merely based on assumptions, suspicion, guess work and conjuncture or on irrelevant inadmissible material.” In the above decision rendered by a coordinate bench of this Tribunal, it is seen that the Tribunal observes that entries relied upon to make addition to income are supported by any corroborative evidence, there are no statements recorded from those who have alleged to have paid monies to the assessee, to confirm the veracity of the entries. The Tribunal also holds that there is a duty cast upon the AO to establish with necessary corroborative evidence that the entries relied upon to make additions to income are unaccounted transactions actually carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. It is seen from the facts of this appellant’s case, the AO has not established the veracity of the diary entries with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have paid monies to the appellant, confirming the said payments and also purpose of these payments. In these circumstances, the additions made by relying on diary entries need to be deleted. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 102 of 155 (vi) Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) v. ACIT inITA Nos.500 to 506/Bang/2020 dt. 16.08.2021: Para 240 of the decision “In our opinion, the unsubstantiated and uncorroborated seized material alone cannot be considered as conclusive evidence to frame these assessments. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted capitation fees. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination of persons concerned, the entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search cannot be sustained. The evidence on record is not sufficient to uphold the stand of revenue that assessee is collecting huge unaccounted capitation fees in the guise of carrying on educational activities. Para 245 of the decision “In the present case, we have already held that there are various loose sheets, scribblings, jottings and Excel sheets taken from the computer having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 103 of 155 suggest any undisclosed assets of assessee found during the course of search. More so, it does not show any recovery of the undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. In such circumstances, we are of the opinion that the decisions relied on by the ld. DR cannot be applied to the facts of the assessee's case.” Para 247 of the decision “Being so, in our opinion the seized material relied by the assessing officer for sustaining addition is not speaking one in itself and also not speaking in conjunction with some other evidence with authorities found during the course of search or post search investigation. Thus, the well settled legal position is that a non- speaking document without any corroborative material, evidence on record and finding that such documenthas not materialised into transactions giving rise to income of the assessee which had not been disclosed in the regular books of accounts of the assessee has to be disregarded for the purpose of assessment to be framed pursuant to search and seizure action.” In this above decision also which is rendered by a coordinate bench of this Tribunal, it is seen that the Tribunal observes that entries relied upon to make addition to income are supported by any corroborative evidence, there are no statements recorded from those who have alleged to have paid monies to the assessee, to confirm the veracity of the entries. The tribunal observes that suspicion, however strong, cannot be the basis of making additions, in the absence of independent proof. The Tribunal also holds that there is a duty cast upon the AO to establish with necessary corroborative evidence that the entries relied upon to make additions to income are unaccounted transactions actually carried out by the assessee. In the absence of these necessary ingredients, the additions were deleted. It is seen from the facts of this appellant’s case, the AO has not established the veracity of the diary entries with necessary corroborative evidence. He has also not recorded statements from the persons who are alleged to have paid monies to the appellant, confirming the said payments and also purpose of these payments. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 104 of 155 In these circumstances, the additions made by relying on diary entries need to be deleted. (d) In the opinion of the AO, the material in A/KG/9 which is in the handwriting of the appellant is effectively the corroborating material for the alleged diary entries in A/KG/3. It is respectfully submitted that such a view and argument is plainly fallacious. The material in A/KG/9 itself is a dumb document and is unintelligible. It is neither speaking for itself nor is it selfevident as to the contents of the same. Therefore, it cannot be anyone’s case that one dumb document can be said to be corroborating another dumb document. The AO is clearly wrong in relying upon the material A/KG/9 to prove the veracity of the material A/KG/3, being the diary containing entries, which are the entries relied upon to make the addition. It is important to take note of the fact that the AO has only added the numbers written in the material A/KG/3, as undisclosed income of the appellant. (e) The AO has invoked the statutory presumption available in section 292C of the Act in holding that the contents of the material in question belongs to the appellant and that the transactions inferred therefrom are undisclosed income of the appellant. In this regard, it is most respectfully submitted that the reliance placed by the AO on this statutory presumption is totally ill-founded. (f) There can be no presumption drawn that the entries in the seized materials represents income or expenditure of the assessee. The provisions of section 292C of the Act relied upon by the AO merely enables the AO to consider the notings as true and correct and it does not enable the AO to make further presumptions that the notings represents any income of the assessee. The Appellant relies upon the following decisions to buttress his argument that the provisions of section 292C do not come into play under the facts and circumstances of the appellant’s case. (i) PCIT v. Ajanta Footcare (India) (P) Ltd [2017] 84 taxmann.com 109 (Cal): ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 105 of 155 In Para 9 at Page 206 of the case law compilation: “The interpretation given by the Hon'ble Supreme Court in the case of P. R. Metrani (supra) so far as theconstruction of the expression \"may be presumed\" is concerned does not support Ms. Das De's submission.Ms. Das De seeks to counter this submission referring to provisions of 292C of the Act. Her stand is that theStatutory Appellate Authorities ought to have concluded that unexplained expenditure reflected in theaforesaid document constituted undisclosed income of the assessee and such conclusion was inevitable. We,however, find applying the ratio of the judgment of the Supreme Court in the case of P. R. Metrani (supra),that the legislature in employing the expression may be presumed left it to the discretion of the statutorybodies to decide as to whether the fact sought to be established by the Revenue is to be presumed or not in the manner the Revenue wants to. It is not legislative mandate to impute duty on the authority to presume certain fact which may be the case where the law requires that an authority shall presume certain facts. So far as the subject-document is concerned, both the Statutory Appellate Authorities found insufficient evidence to link the document with the assessee in the first place. Thus, primary fact was not established from which presumption could be drawn. In Para 10 at Page 206 of the compilation “In the subject proceeding, two Statutory Appellate Authorities have exercised their discretion against theRevenue and in favour of the assessee. The reason for exercising such discretion is that no stock discrepancycould be demonstrated and there was no corroboration of the figures forming the basis of addition to theincome of the assessee as was directed by the Assessing Officer. No question about the said document wasput to the Director of the assessee in course of search. This factor was also taken into consideration by theaforesaid Appellate bodies. The two Statutory Appellate Authorities doubted the inherent probative value orquality of the above-referred document upon applying their mind on it. In substance, the said authoritiesfound no reason to draw presumption against the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 106 of 155 assessee on the basis of scribbled figures appearing on thedocument in question. This is how two fact finding bodies chose to deal with that document. In our view, even without proper explanation from the assessee, when the mandate of law is that authorities may presume certain facts under Section 292C of the Act to come to a conclusion in favour of Revenue, the nature of information contained in or revealed by such document would have to be examined to link such document to undisclosed income of the assessee. Both the Commissioner and the Tribunal found no linking factor. Boththese authorities rejected the reasoning of the Assessing Officer on this basis of which the latter came to hisfinding that the figures appearing on the said document could be computed to arrive at undisclosed income ofthe assessee. The findings of the Statutory Appellate Authorities cannot be held to be perverse or based on noevidence in this case. The Statutory Appellate Authorities had examined the said document and found that thesame could not be connected with assessee's transactions for the relevant assessment year.” In the case of this appellant it is clear that even though the Revenue is of the opinion that the appellant has not given a satisfactory explanation of the contents of the Diary found in residence, that by itself does not warrant an addition. An addition can be made only if these contents in the Diary which was found are actually connected to the appellant’s transactions for the respective assessment years. (ii) CIT v. S.M.Agarwal [2007] 162 Taxman 3 (Del)[page nos. 207 to 210 of Case Laws Compilation]: In Para 12 at page 210 of the compilation “It is well-settled that the only person competent to give evidence on the truthfulness of the contents of thedocument is the writer thereof. So, unless and until the contents of the document are proved against a person, thepossession of the document or hand writing of that person, on such document by itself cannot prove the contentsof the document. These are the findings of fact recorded by both the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 107 of 155 authorities,i.e.,Commissioner of Income-tax(Appeals) and the Tribunal.” It is also an undisputed fact in the case of the Appellant that the author of the entries in the Diary (A/KG/3) is unknown and that the appellant is not its author. The Appellant has also denied any knowledge of the same or its contents. Under these circumstances the AO was entirely wrong in treating the figures in the Diary to be representing the undisclosed income of the Appellant. Furthermore, if these amounts were really the income of the appellant, there must have been assets to represent these corresponding incomes which ought to have been unearthed in the course of search proceedings. The very fact that there is no such unearthed assets only points to the truth that there are no such incomes in the first place. Thus, there is no corroboration of any undisclosed income even by way of any unexplained asset in the hands of the appellant. (g) The Revenue has also relied on the decision of this Hon’ble Tribunal in Trishul Buildtech Infrastructure (P) Ltd v. JCIT in ITA Nos. 1362, 1363 and 1367/Bang/2013 dated 20.02.2015, which is also cited by the LD. CIT(A) in his appellate order to support the additions made based on entries in the diary (A/KG/3). This reliance of the Revenue is entirely misplaced. It is respectfully submitted that the additions on the basis of diary entries were confirmed in the said case for the reason as stated in para 30 therein as follows: “As we have already seen, in a statement KP. Shetty recorded in the post search proceedings, K.P. Shetty clearly admitted that the entries in the seized diaries were made on his instructions. It is for him to explain the entries in the seized diaries. In fact, in respect of some of the entries in the seized diaries, the assessee declared undisclosed income for various assessment years. In these ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 108 of 155 circumstances, the assessee cannot disown the entries in the diary….” The appellant submits that such is not the facts in the present case. The disputed diary does not belong to the appellant. Nor has he at any time owned up the diary or stated that the entries were made on his instructions. Nor is it a case where any of the undisclosed income admitted in post search returns filed are on the basis of the entries in the disputed diary. In view of these, the above case has no relevance whatsoever to the case of the appellant. It is further submitted that the above order dated 20.02.2015 relied upon by the CIT(Appeals) and reiterated by the learned DR during the hearing before the ITAT, was set aside by the Hon’ble Karnataka High Court in ITA Nos. 371/2015 c/w ITA Nos.372 and 373/2015 vide common order dated 12.09.2022 and remanded back to the file of this Hon’ble Tribunal for fresh consideration of all the issues. Subsequently, this Hon’ble Tribunal has allowed the appeals of the assessee on a legal issue. Copy of the fresh order passed on 26.10.2023 is enclosed herewith separately. Thus, it is submitted that the above order cannot even be relied upon by the Revenue to support the addition made by the AO. (h) In conclusion it can be safely decided, without any fear of contradiction, that in view of the uncontroverted facts ie. the AO has not established the veracity of the entries in the diary (A/KG/3) relied upon to make additions of Rs.329,75,00,000/-to income of the Assessment Years 204- 15 of (Substantively), and 2015-16 (Protectively) and an addition of Rs. 408,50,00,000/- for the A.Y. 2016-17 (Substantively), in the absence any tangible corroborative evidence, whatsoever and further without any ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 109 of 155 confirmations from any of the parties to the alleged transactions, these additions deserve to be deleted. 5. The AO has made addition of Rs.1,08,49,584/- as unexplained investment in jewelleryfor AY 2016-17. This comprises of the difference in gold jewellery value said to belong to the appellant of Rs.19,69,225/- and another sum of Rs.82,94,807/- said to belong to the spouse of the appellant which is added protectively. Further, the addition on account of silver jewellery said to belong to the appellant is of Rs.1,84,950/- and of the spouse of the appellant of Rs.4,00,602/-. (These figures as rectified by the rectification order u/s 154 of the Act dated 20.02.2018.). The details are as under: Gold Particulars Found in course of search Statement of assets filed before Lok Ayukta (gms) Difference (gms) CBDT rate per gm (after adjustments) Difference in Rs. Appellant 632.50 1,500 867.50 22,70 19,69,225 Spouse of appellant 845.90 4,500 3,654.10 22,70 82,94,807 Silver Particulars Found in course of search Statement of assets filed before Lok Ayukta (kgs) Differ- ence (gms) CBDT rate per gm (after adjustments) Difference in Rs. Appellant - 5.00 5.00 36,990 1,84,950 Spouse of appellant 2.50 13.33 10.83 36,990 4,00,602 1,08,49,584 ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 110 of 155 (a) It is important to notice the fact that the Jewellery found in the search is much less than the jewellery shown in the statement filed before Lokayuktha. In other words no unexplained jewellery was physically found in the search u/s 132. The statement filed before the Lokayuktha was obtained during the course of assessment proceedings by invoking the powers u/s 133(6) of the Act. (b) The AO has not made any addition on the ground that addition found is in excess of what is declared. The AO has accepted that Jewellery found stands explained by the income declared by the appellant over the years and no addition is made on this count . (c) The addition made is on account of the fact that the AO took a view that the jewellery declared in the statement filed before the Lokayuktha being more than what was found in the search, the excess of the jewellery as per statement before Lokayuktha over and above what was found represents unexplained jewellery and he proceeded to add the value of such excess jewellery to the income of the Appellant. (d) It is important to take note of the fact that addition on account of unexplained jewellery is made u/s 69A of the Act and the same is entirely in contravention of the provisions of 69A, considering the facts and circumstances of the case. (e) It is submitted that the provisions of section 69A of the Act would apply only where the jewellery are found and that such jewellery are owned by the assessee in any financial year. Then, failing any proper explanation as to the source of acquisition of the same, there would be a ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 111 of 155 presumption that the same may be treated as income of the assessee. (f) In the instant case of the appellant, it is not that any jewellery which was found during Search u/s 132 stands unexplained. The search took place on 15.03.2016 and every bit of jewellery which was found at the time of search stands explained and no addition is made on this count. (g) The addition which is restricted to the value of excess jewellery as per statement before Lokayuktha cannot be added u/s 69A. The Appellant cannot be held to be owning and possessing jewellery which does not exist at all. It is most respectfully submitted that the provisions of section 69A of the Act does not apply to the present case for the A.Y. 2016-17 and therefore the addition is to be deleted for advancement of substantial cause of justice. (h) The appellant further submits that the return filed before the Lokayuktha as at 31.03.2013 consists of the appellant’s and the spouse of the appellant jewellery. It also consists of the ancestral jewellery of the appellant’s undivided family which came into the custody of the appellant on his mother’s death. Out of abundant caution, the appellant was advised to declare this also in the return filed before the Lokayuktha. However, mere declaration that the appellant ‘has’ the jewellery in the Lokayuktha return cannot in any manner be construed as ‘owned’ by or ‘belonging’ to the appellant. (i) However, in the declarations made in the Lokayuktha returns, there appears to have been genuine error in as much as the partition of the undivided family had occurred in the interim and the appellant had retained ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 112 of 155 only his 1/5 share of the ancestral property and handed over the rest to other members. (j) The appellant also realized the apparent difference in the income-tax records and the Lokayuktha return and in good faith and as a law-abiding citizen filed revised return before the Lokayuktha to put the records straight. Copy of the revised returns filed before the Lokayuktha are placed in the Common Paper Book at page nos. 151 to 162. The assessing officer has disregarded this completely and brushed aside the revised return as after- thought. The appellant has only done which is in compliance of law and without finding any defect or error in the revised return filed before the Lokayuktha, the assessing officer could not have rejected the same more so when the revised return has been duly accepted by the Lokayuktha office. (k) The assessing officer has presumed that the difference in the quantum of jewellery stated as above as the unexplained investments made by the appellant and his spouse for the AY 2016-17, i.e., between the date of conclusion of search on 17.03.2016 and 31.03.2016, which is only a period of about two weeks. The appellant submits that the above addition is totally unwarranted for several reasons. There is no additional jewellery which is found in the course of search to state that there is any unexplained investment in jewellery in the first place. In fact, it is perplexing as to how any shortfall in the jewelry found can be said to be unexplained investment u/s 69A of the Act. 6. The next issue which is challenged by the Appellant is that the protective assessment of Rs. 86,95,409/-made in the hands of the appellant cannot also be sustained when there is no substantive ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 113 of 155 assessment in the first place. There is also no reason forthcoming in the assessment order as to why a protective assessment is sought to be made in the hands of the appellant. It is admitted fact that a substantive assessment is not made in the hands of the appellant’s wife. In support of the above proposition, the appellant relies on the following judicial precedents: (c) The decision of the coordinate bench of the ITAT Delhi in ITO v. M/s. Fussy Financial Services Pvt Ltd ITA No.4227/DEL/2014 dated 05.06.2017 [page nos. 329 to 337 of Case Laws Compilation], where it was held : Para 7.1 in Page 337 of the compilation ( last 5 lines of the para) “…………In this case we find that AO has not made any substantive assessment. There may be substantive assessment without any protective assessment, but there cannot be any protective assessment without there being a substantive assessment.” (d) The decision of the coordinate bench of the ITAT Mumbai in Suresh K Jajoo v. ACIT [2010] 39 SOT 514 (MUM.) [page nos. 338 to 363 of Case Laws Compliation] where it was held: Para 28 in page 350 of the compilation ( 6thand 7th line from the top of the Para) “….Secondly, there is no substantive assessment already made treating the capital gain as short-term capital gain. Therefore, there can be no protective assessment.” In view of the above judicial precedents, the entire protective addition of Rs.86,95,409/- made in the hands of the assessee, in the absence of a ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 114 of 155 substantive addition in the hands of his wife, is also bad in law and needs to be deleted. In any case the addition made u/s 69A have no legs to stand and the protective addition made, in the absence of a substantive addition in the hands of his wife, are both bad in law and the entire addition u/s 69A, both protective and substantive, in the hands of the appellant needs to be deleted for the advancement of substantial cause of justice. The next issue is that the AO was wrong in adopting the CBDT Values in making additions to income by way of unexplained jewelry u/s 69A of the Act. The assessee places reliance on the binding decision of the Jurisdictional Karnataka High Court in the case of V.Selvaraj vs DCIT in ITA No. 92/2018, by order dated 19th August 2021, wherein the Hon’ble High Court held that the Assessing Officer can only act upon a valuation report furnished by a Valuation Officer appointed under Section 12A of the Wealth Tax Act and any valuation adopted for the purposes of assessment has to be solely based on such a report and additions which are made not based on a valid report is liable to be deleted. In the case of this appellant the addition made by the AO is not based on a valuation report furnished by a Valuation Officer appointed u/s 12A of the Wealth Tax Act and hence the entire addition needs to be deleted. One other issue is the fact that the declaration obtained from the appellant which the learned assessing officer states to be the corroborative evidence is also not a piece of evidence also in the eye of law. The same was obtained on 17.03.2016 at about 3.15 a.m. towards the conclusion of the search which commenced on 15.03.2016 and was obtained under force and coercion and in view of which the said statement has been validly retracted by the appellant by an affidavit sworn to before the XLIV Addl. Chief Metropolitan Magistrate, Bengaluru on 02.01.2017. Copy of the letter dated 18.08.2017 filed by ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 115 of 155 the appellant before the AO enclosing the retraction affidavit dated 02.01.2017 is placed in the Common Paper Book at page nos. 90 to 97. In view of the declaration being retracted well in time before the assessment proceedings were completed, the declaration u/s 132(4) by the appellant has no evidentiary value. Further the AR submitted that once a search commences, a statement recorded u/s 131(1A), after commencement of search, by the authorized officer or by the assessing officer will not be valid in law. Submissions in relation to revenue appeals in respect of partial relief allowed by the CIT(Appeals) on additions arising out of disputed diary: A. Without prejudice, the net resulting surplus of the receipts and payments alone could have been brought to tax and not the entire receipts as done by the AO. If the material in question is to be relied on, it has to be relied on in entirety and not selectively. Thus, the outflows have also to be considered and cannot be disregarded and therefore only the resulting balance could have been brought to tax. This is what the learned CIT(Appeals) has done in the appellate order. B. Without prejudice, the appellant submits that there is no basis to treat the receipts as income in a year and the payments in subsequent years again as undisclosed income of the appellant. It naturally follows that if these are supposed to be interconnected transactions as stated by the learned AO, then the payments in subsequent years are naturally out of the receipts in preceding year. Therefore, to tax the receipt and the payment is to tax the same item twice and is not tenable. The benefit of telescoping the income of subsequent year ought to have been extended to the appellant. This is what the learned CIT(Appeals) has done in the appellate order. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 116 of 155 In conclusion the Appellant submits that his appeal be allowed for the advancement of the substantial cause of justice.\" 53. The ld. DR relied on the order of the AO and CIT(A) for confirming the addition made by AO. The learned DR has filed common written synopsis for his arguments from Assessment Years 2013-14 to 2016-17 which has been reproduced hereinabove at para No. 11 and the same is considered for the arguments of the learned DR for the Assessment Years 2014-15 to 2016-17. Hence, it does not require reproduction here. In addition to the above written synopsis, the learned DR had also submitted that the AO was correct in presuming & expanding the abbreviations found in the seized material A/KG/3 & A/KG/9 to represent the names of persons as brought out in the assessment order as all of them were from the same political party which is correlated with Answer to Question no.62 which is placed at page No.43 of the PB. 54. Considering the rival submissions there are two issues for which the assesse and revenue both have filed appeal. We have to decide whether the AO has made correct additions or not on account of entries in seized material A/KG/3 and A/KG/9 found during the course of search for the A.Y’s 2014-15, 2015-16 and 2016-17 and addition on account of unexplained investment in jewelry u/s 69A of the Act, for the AY 2016-17. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 117 of 155 55. Additions on account of entries in seized material A/KG/3 for the Assessment Years 2014-15, 2015-16 and 2016-17 : During the course of search & seizure operation at the residence of the aseessee various documents were found and inventorized on 17.03.2016 and search was concluded. The last Panchanama drawn was on 14.05.2016. While completing the assessment for the impugned Assessment Years, the AO took note of certain seized materials identified as A/KG/3 and A/KG/9 and termed them to be incriminating in nature. The document identified as A/KG/9 (extracted at pg. 2 of assessment order for Assessment Year2014-15) appears to be loose notings and scribblings which admittedly is in the handwriting of the assessee. The document identified as A/KG/3 (extracted at pg. 8 onwards of assessment order for Assessment Year 2014-15) appears to be a diary which admittedly is not in the hand writing of the assessee. The AO has made an addition of Rs.329,75,00,000/-, substantively for the Assessment Year 2014-15, based on the entries found in the diary, seized during search and marked as A/KG/3 (extracted at pg. 8 onwards of assessment order for AY 2014-15). He has added the same amount of Rs.329,75,00,000/-, protectively for the Assessment Year 2015-16, based on the very same entries, as the AO is not sure about the Assessment Year to which these entries relate to. Apart from the above addition of Rs.329,75,00,000/- the AO has made an addition of ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 118 of 155 Rs.408,50,00,000/- in the Assessment Year 2016-17 based on entries found in the same diary. 56. The learned CIT(A) has confirmed the addition in principle but has given telescoping to the extent of Rs. 64,50,00,000/- on account of entries which are said to represent out flows out of Rs.329,75,00,000/- brought to tax by the AO and after this set off of Rs.265,25,00,000/- the learned CIT(A) has held that the net sum of Rs.262,25,00,000/- is to be brought to tax, thus giving a relief of Rs. 64,50,00,000/-, has confirmed the substantive addition of Rs.262,25,00,000/- for the Assessment Year 2014-15, holding that entries made in A/KG/9 supports the explanation given by the AO for the entries in A/KG/3 and is also the evidence for the transactions which are denoted by the entries made in A/KG/3. The learned CIT(A), in view of his confirming the substantive addition in Assessment Year 2014-15, deleted the protective addition in the Assessment Year 2015-16. 57. As regards the Assessment Year 2016-17, the learned CIT(A) has given telescoping to the extent of Rs. 135,50,00,000/- on account of entries which are presumed to be receipts and thus set off against the total payment of Rs. 408,50,00,000/- brought to tax by the AO and after this set off of Rs.135,50,00,000/- the learned CIT(A) has held that the net sum of Rs.273,00,00,000/- is to be brought to tax, thus giving a relief of Rs. 135,50,00,000/-. The assessee has challenged ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 119 of 155 these additions on the ground that the diary entries are dumb documents, which are not corroborated by any evidence and the Revenue has challenged the partial relief given by the learned CIT(A) on account of telescoping of outflows against the inflows. 58. The main issue that comes for consideration is whether the seized material A/KG/3 is a dumb document, as claimed by the assessee, or not. A prima facie look at the entries in the diary relied upon by the AO to make the additions, makes it apparent that these are not written over a period of time, spanning from 01/04/2013 to 31/03/2016, as and when the transaction took place, which it is supposed to relate to. The entries are continuous, with no gap between the years, despite the passage of time, from one financial year to another. In fact, this is the reason that the AO has not been able to say with certainty as to when these transactions took place. Further, all these entries seem to be written in the same handwriting and thus by the same person and the remand report was also called for by the learned CIT(A). This leads to a belief that the entries which span over a period of three years are written at the same time at one go. It is clear that the entries are not made as and when a transaction happened. Be it as it may, apart from the fact that the entries are obviously not contemporaneous with the time in which the transactions are alleged to have taken place, the AO has not brought out any corroborative evidence which prove these entries to be true and the transactions which the AO believes to have taken place. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 120 of 155 59. The AO has relied upon a seized material A/KG/9, which contain entries made by the assessee in his own hand writing, to explain the entries in the seized material A/KG/3. It is an admitted fact, by both the assesse and the Revenue, that the entries in material A/KG/9 are in the handwriting of the assessee and the entries in the seized material A/KG/3 are not in the handwriting of the assessee and the author of the same is unknown. The assessee on his part has always denied any knowledge about the ownership of the Diary A/KG/3 or the contents thereof, right through the search proceeding and also during the assessment proceeding. The same question and answer are reproduced in the DR’s submissions noted above. 60. The Assessee has also denied the allegation that the entries in the seized material A/KG/9 represent undisclosed income and expenditure of the assessee. The explanation given by him has not been accepted by the AO. The AO, however, has not made any addition based on the entries in seized material A/KG/9. He has only relied upon this seized material to make additions based on entries found in the Diary A/KG/3. 61. The Law is now settled that entries in loose sheets or diaries cannot be relied upon to make additions in the absence of corroborative evidence. From the above discussion, we find that presumption under section 132(4A) is rebuttable presumption. Statement under section ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 121 of 155 132(4) is no doubt an important evidence while making presumption under section 132(4A). Addition under section 69 of the Act can be made if the explanation offered by the assessee is not found satisfactory. In a search case where some material or loose paper is found, the Department is to follow certain procedure viz., the assessee is to be confronted on the material found at the time of search. Examination of all concerned parties should also take place. For this purpose, the Income-tax Act provides power to Revenue authorities under section 132(4) and under section 131 of the Income-tax Act that income cannot be treated as undisclosed income merely because some loose paper is found during the course of search. The reasons are that noting, jotting and some rough calculation, not necessarily related to the actual income. It is not necessary that every document or such papers are exclusively in possession of the assessee represent income. For ascertaining undisclosed income, the Revenue authorities have to follow certain procedure for examination of material found at the time of search. The undisclosed income to be assessed as such only after necessary examination of material found at the time of search. In the case under consideration, the assessee has been confronted in respect of loose paper found at the time of search by taking statement under section 132(4) of the Act, wherein the assessee has categorically denied the ownership at each and every stage of statements recorded. This fact is clear from the statement recorded under sections 132(4) & 131 of the Act. Such action of Revenue authorities is not appreciable as same is not in accordance ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 122 of 155 with law. In the light of above discussion, we are of the considered view that additions under consideration are not in accordance with law. Some important judicial pronouncements on this proposition are examined below. 62. During the course of hearing the learned AR has relied on the judgment of the Hon’ble Supreme Court in the case of CBI Vs. V. C. Shukla (1998) 3 SCC 410 cited supra, after analysing several decisions rendered by itself and different High Courts came to the conclusion in Para 39 of its order, as under: “A conspectus of the above decisions make it evident that even correct and authentic entries in books of accounts, cannot without independent evidence of their trustworthiness, fix a liability upon a person.” 63. The Hon’ble Supreme Court in the case of Common Cause Vs. UOI [2017] 394 ITR 220 (SC), in Para 20 of this judgement, reiterating its decision in the case of V.C. Shukla (supra), ruled as under: “It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under Section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value.” ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 123 of 155 64. The Jurisdictional Karnataka High Court in a recent judgement in the case of DCIT Vs. Sunil Kumar Sharma [2024] 159 taxmann.com 179 (Karnataka), held as under:- \"21. Both the Appellant-Revenue and Respondent-Assessee entered appearance and submitted their arguments extensively. On hearing the learned counsel for both the parties, this Court finds it relevant to examine the following questions that arises for consideration in these writ appeals, which are as under: (1) Whether 'Loose Sheets' and 'Diary' have any evidentiary value? (2) Whether Centralization is in violation of Section 127 of the Income-tax Act, 1961, is valid? (3) Whether the Notice under section 153C of the Income-tax Act, 1961 is valid herein? As regards Question No. 1: Upon reading the material provided and the order of the learned Single Judge delivered on 12-8-2022, it is evident that the income that has escaped assessment and notices under section 153C of the Income-tax Act, 1961, were solely issued based on loose sheets and documents which are termed as 'diaries' found during the search. The applicability of section 69A of the Act arises only when the principles laid down under section 68 of the Act are satisfied. section 68 states that there must be books of accounts or any books with credit entry. The said Act reads thus: \"Section 68: Where any sum is found credited in the books of an assessee maintained for any previous years and the assessee offers no explanations about nature and source thereof or the explanation offered by him is not, in the opinion of the assessing officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year.\" The language of the Law is vague and subjective, thus making us rely on an Apex court decision in the case of V.C. Shukla (supra), wherein the relevant portion reads thus: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 124 of 155 \"Collection of sheet fastened or bound together so as to form material whole. Loose sheets or scraps of paper cannot be termed as books.\" In this regard, it is relevant to extract Section 69A of the Act, which reads thus: \"69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.\" The lack of corroborative evidence to show how the loose sheets found at the house of Sri K Rajandran are connected to the Respondents herein, or their occupation, is evident from the panchanama provided by the Assessing Officer. 22. The entire allegation is made out on the basis of loose sheets of documents, which does not come under the ambit and scope of 'books of entry' or as 'evidence' under the Indian Evidence Act. 23. In view of the aforementioned aspects, we have carefully examined the law declared by the Hon'ble Apex Court with regard to acceptance of diaries/loose sheets by the respondent-Revenue. In the case of V.C. Shukla (supra), at paragraphs 16 to 18 of the judgment, it is observed thus: \"16. To appreciate the contentions raised before us by the learned counsel for the parties it will be necessary at this stage to refer to the material provisions of the Act. Section 3 declares that a fact a relevant to another when it is connected with the other in any of the ways referred to in the provisions of the Act relating to the relevancy of facts; and those provisions are to be found in Section 6 to 55 appearing in Chapter II. Section 5, with which Chapter II opens, expressly provides that evidence may be given in any suit or proceeding of the existence or non-existence of every fact in issue and the facts declared relevant in the aforesaid section, and of no others. Section 34 of the Act reads as under:- \"34. Entries in books of account when relevant - Entries in book of account, regularly kept in the course of business, are relevant whenever they refer to a ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 125 of 155 matter into which the court has to inquire but such statements shall not alone be sufficient evidence to charge any person with liability.\" 17. From a plain reading of the Section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence, still, the statement made therein shall not along be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 18. \"Book\" ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as 'book' for they can be easily detached and replaced. In dealing with the work 'book' appearing in Section 34 in Mukundram vs. Dayaram [AIR 1914 Nagpur 44], a decision on which both sides have placed reliance, the Court observed:- \" In its ordinary sense it signifies a collection of sheets of paper bound together in a manner which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book…I think the term \"book\" in S. 34 aforesaid may properly' be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of S. 34, and I have no hesitation in holding that unbound sheets of paper in whatever quantity, though filled up with one ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 126 of 155 continuous account, are not a book of account within the purview of S.34.\" 24. The aforesaid approach is in accordance with good reasoning and we are in full agreement with it. Applying the above tests, it must be held that the two spiral note books (MR 68/91 and 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are \"books\" within the meaning of Section 34, but not the loose sheets of papers contained in the two files (MR 72/91 and MR 73/91).\" 25. The Hon'ble Supreme Court in the case of Common Cause (supra) at paragraphs 278 to 282 of the judgment, has observed thus: \"278. With respect to the kind of materials which have been placed on record, this Court in V.C. Shukla case has dealt with the matter though at the stage of discharge when investigation had been completed by same is relevant for the purpose of decision of this case also. This court has considered the entries in Jain Hawala Diaries, note books and file containing loose sheets of papers not in the form of \"books of accounts\" and has held that such entries in loose papers/sheets are irrelevant and not admissible under section 34 of the Evidence Act, and that only where the entries are made in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. 279. It has further been laid down in V.C. Shukla case as to value of entries in the books of account, that such statements shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. It has been held that even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. 280. This court has further laid down in V.C. Shukla that meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted herein below: (SCC pp.423-27, paras 14 and 20) \"14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under section 34 with the following words: \"70. ….an account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debts and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arised to do for his future purpose. Admittedly the said diaries were not being maintained on day-to day basis ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 127 of 155 in he course of business. There is no mention of the dates on which the alleged payment were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. they have been shown in abreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to.\" 20. Mr. Sibal, the learned counsel for the Jains, did not dispute that the spiral note books and the small pads are 'books' within the meaning of Section 34. He, however, strongly disputed the admissibility of those books in evidence under the aforesaid section on the ground that they were neither books of account nor they were regularly kept in the course of business. he submitted that at best it could be said that those books were memoranda kept by a person for his own benefit. According to Mr. Sibal, in business parlance 'account' means a formal statement of money transactions between parties arising out of contractual or fiduciary relationship. Since the books in question did not reflect any such relationship and, on the contrary, only contained entries of monies received from one set of persons and payment thereof to another set of persons it could not be said, by any stretch of imagination that they were books of account, argued Mr. Sibal. He next contended that even if it was assumed for argument's sake that the above books were books of account relating to a business still they would not be admissible under section 34 as they were not regularly kept. It was urged by him that the words 'regularly kept' mean that the entries in the books were contemporaneously made at the time the transactions took place but a cursory glance of the books would show that the entries were made therein long after the purported transactions took place. In support of his contentions he also relied upon the dictionary meanings of the words 'account' and 'regularly kept'. 281. With respect to evidentiary value of regular account book, this Court has laid down in V.C. Shukla, thus: (SCC p.433, para 37) \"37. In Beni v. Bisan Dayal [AIR 1925 Nagpur 445] it was observed tat entries in book s of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate an din absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another. In Hira Lal v. Ram Rakha [ A. I. R. 1953 Pepsu 113] the High Court, while negativing a contention that it having been proved that the books of account were regularly kept in the ordinary course of business and that, therefore, all entries therein should be considered to be relevant and to ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 128 of 155 have been prove, said that the rule as laid down in Section 34 of the Act that entries in the books of account regularly kept in the course of business re relevant whenever they refer to a matter in which the court has to enquire was subject to the salient proviso that such entries shall not alone be sufficient evidence to charge any person with liability. It is not, therefore, enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that the were in accordance with facts. 282. It is apparent from the aforesaid discussion that loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court.\" 26. It is established in law by the Hon'ble Apex Court that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. Following the law declared by the Hon'ble Apex Court, we are of the view that the action taken by the respondent/Revenue against the Assessee based on the material contained in the diaries/loose sheets, are contrary to the law declared by the Hon'ble Apex Court. In that view of the matter, impugned notices issued under section 153C of the Act, based on the loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal.\" 65. In the above cited case, the Jurisdictional Karnataka High Court, after relying upon the decisions of the hon’ble Apex Court in the VC Shukla Case and the Common Cause case, held in para No. 48 that in the absence of any corroborative evidence, loose sheet can at the most be termed as \"dumb document\" which did not contain full details about the dates, and its contents were not corroborated by any material and could not be relied upon and made the basis of addition and further ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 129 of 155 held that the Revenue cannot even assume jurisdiction and issue a notice to assess a person under section 153C of the Act on the basis of entries in a diary, as diary entries are not considered as themselves, which are not supported by any corroborative evidence. 66. If one were to apply the ratio of this decision to the facts of the assessee’s case, the AO does not even have jurisdiction to issue a notice under section 153A of the Act for Assessment Year 2014-15, which does not abate as on the date of search, by merely relying upon entries in a diary found during search and which are not corroborated by any independent evidence which validates these entries. The AO has relied only on the Question & Answer No. 104 from the statements recorded under section 132(4) of the Act regarding offering the income under the different heads viz., rental income, loans and advances received, capital gain and real estate commission income. The AO has made addition towards difference of commission received and commission payable without any independent evidence and arbitrary distributed over the two years and included in the gross receipts/payment. The Jurisdictional High Court held that diary entries which are not supported by cogent corroborative evidence are not incriminating and need to be ignored. When such is the ratio of this decision, the AO has no jurisdiction to even issue a notice under section 153A of the Act. Under these facts and circumstance, the AO ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 130 of 155 cannot make any addition to income based on such diary entries which have no corroborative evidence. 66.1. It is also very important to take note of the fact that the SLP filed by the Revenue challenging this decision rendered by the Karnataka High Court has been dismissed by the Supreme Court reported in [2024] 165 taxmann.com 846 (SC). In other words, this decision has attained finality and is presently binding on all appellate authorities who come under the jurisdiction of the Karnataka High Court. 67. A Coordinate Bangalore Bench of the ITAT in the case of ITO Vs. Ramachandra Settyand Sons [2024] 163 taxmann.com 666 (Bangalore - Trib.), after relying on various judgments, held that Dumb sheets which have no relevance are not authentic to rely upon on its face value. Such loose sheets and scribblings cannot be the primary evidence to base the assessment upon. These sheets also cannot be relied upon to hold that the assessee has earned any undisclosed income. The Bench relied upon a decision in the case of CIT Vs. M/S Khosla Ice and General Mills 2013 (1) TMI 451 - Punjab and Haryana High Court, where the Hon'ble High Court held that “assessee rightly contended that the impugned document was a non-speaking document in as much as it does not contain any intelligible narration in support of the inference drawn by the Assessing Officer that it reflected unaccounted transactions carried out by the assessee outside the ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 131 of 155 regular books of account. When a dumb document, is to be made the basis to fasten tax liability on the assessee, the burden is on the AO to establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totalling various figures jotted down on such document.” 68. The Bench concluded in para No. 13.45 and 13.46 as under:-: 13.45.“Thus, it is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of \"dumb documents\" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. In the present case, it is undisputed position that as a result of search and seizure action in the case of respondent- assessee and its group companies, no material whatsoever was seized and found ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 132 of 155 indicating payment of on-money consideration at the time of purchase of the lands.” 13.46. “We find that the conclusions reached by the Assessing Officer are merely based on presumptions and assumptions without bringing corroborative material on record. It is settled position of law that no addition in the assessment can be made merely based on assumptions, suspicion, guess work and conjuncture or on irrelevant inadmissible material.” 69. Another Coordinate Bench of the Bangalore ITAT in the case of Sri Devaraj Urs Educational Trust for Backward Classes (Regd.) Vs. ACIT in ITA Nos.500 to 506/Bang/2020, Order dated 16.08.2021, held as under: Para 240 “In our opinion, the unsubstantiated and uncorroborated seized material alone cannot be considered as conclusive evidence to frame these assessments. The revenue authorities cannot draw inference on the basis of suspicion, conjectures and surmises. Suspicion, however strong, cannot take place the material in place of evidence of the AO. The AO should act in a judicial manner, proceed in a judicial spirit and come to the judicial conclusions. The AO is required to act fairly as a reasonable person, not arbitrarily and capriciously. The AO without examining the students / parents who have paid the capitation fees cannot come to the conclusion that the assessee has received unaccounted capitation fees. The basis for donation is notebook / loose sheet. This notebook or loose sheets found during the course of search is only circumstantial evidence and not full proof evidence to sustain the addition. No ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 133 of 155 addition can be made in the absence of any corroborative material. If it is circumstantial evidence in the form of loose sheets and notebook, it is not sufficient to come to the conclusion that there is conclusive evidence to hold that assessee has collected unaccounted capitation fees. The notes in the diary/loose sheets are required to be supported by corroborative material. Since there was no examination or cross-examination of persons concerned, the entire addition in the hands of the assessee on the basis of uncorroborated writings in the loose papers found during the course of search cannot be sustained. The evidence on record is not sufficient to uphold the stand of revenue that assessee is collecting huge unaccounted capitation fees in the guise of carrying on educational activities. Para 245 – “In the present case, we have already held that there are various loose sheets, scribblings, jottings and Excel sheets taken from the computer having no signature or authorization from the assessee's side. These are unsubstantiated documents and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, it does not show any recovery of the undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable assets. In such circumstances, we are of the opinion that the decisions relied on by the ld. DR cannot be applied to the facts of the assessee's case.” Para 247 “Being so, in our opinion the seized material relied by the assessing officer for sustaining addition is not speaking one in itself and also not speaking in conjunction with some other evidence with authorities found during the course of search or post search investigation. Thus, the well settled legal position is that a non-speaking document without any corroborative material, evidence on record and finding that such document has not materialised into transactions giving rise to income of ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 134 of 155 the assessee which had not been disclosed in the regular books of accounts of the assessee has to be disregarded for the purpose of assessment to be framed pursuant to search and seizure action.” 70. The AO has also relied upon the provisions of section 292C of the Act to hold that the contents of the material in question belongs to the assessee and that the transactions inferred from the same reveal undisclosed income of the assessee. 71. The AO and learned CIT(A) relied upon these seized papers by relying upon section 292C of the Income Tax Act. Section 292C of the Act provides presumption as to assets/books of account against the person who was found in possession or control of any books of account or other documents during the course of search to be belonging to such person and the contents of documents to be correct and true. It is admitted fact that during the course of search from 15.03.2016 to 17.03.2016 loose papers and diary were found and seized from the residence of the assessee and all seized materials were inventorized on 17.03.2016. Such a list cannot be relied upon as evidence against the assessee with the help of section 292C of the Act in the absence of supporting evidence. Further, the presumption under section 292C of the Act is rebuttable presumption and the assessee has explained before the authorities below that the diary does not belong to the assessee. The AO has scanned the diary marked as A/KG/3. All the relevant ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 135 of 155 papers in this regard were available before both the authorities below. When such facts were pleaded before the AO and the learnd CIT(A), even at that stage, the Revenue Department should have investigated as to whose names were appearing in the seized papers to verify if they paid any money to the assessee or received any monies from the assessee. In the absence of any proper investigation into the matter, we are of the view that the provisions of section 292C of the Act should not have been applied against the assessee. The purpose and object of the income tax laws is to bring to tax real income and not any hypothetical or fictional income. The provisions of the Act contain several instances of deeming fiction namely under sections 68,69,69A,69B,69C and 69D. In all these cases, the deeming fiction created by the statute is to bring to tax only real income such as unexplained entries in books of account, unexplained investments, unexplained money, unexplained expenditure etc., for these are but representations of the underlying income which the assessee can be reasonably presumed to have earned. Any income which can be fictionally deemed to have been earned need to be traced to any of these specific provisions in the Act. 72. The existence of any unexplained money, Investment or expenditure etc., would indicate the existence of the underlying income which is statutorily recognized. It is only these legal presumptions or deeming provisions that are available in the law for the Revenue to ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 136 of 155 press in to service, if at all. In other words, to bring to tax any undisclosed income, the Revenue has to either demonstrate the actual earning of the income as a fact i.e., not merely on presumptions, conjecture and surmise or the statutory presumptions as stated above have to be invoked. AO is not correct in taking this view as no presumption can be drawn in the absence of corroborative evidence. The provisions of section 292C of the Act relied upon by the AO merely enables the AO to consider the notings as true and correct and it does not enable the AO to make further presumptions that the notings represents any income of the assessee. The decisions, relied upon by the assessee, that entries in the seized materials cannot be presumed to represent undisclosed income as per the provisions of section 292C the Act are relevant and applicable to this case, in the light of which we disagree with the view taken by the AO. 73. In the case of Pr.CIT v. Ajanta Footcare (India) (P) Ltd. [2017] 84 taxmann.com 109 (Cal), in which the Hon’ble Calcutta High Court, relying upon the decision of the Supreme Court in the case of P. R. Metrani, held as under:- “10……….In our view, even without proper explanation from the assessee, when the mandate of law is that authorities may presume certain facts under Section 292C of the Act to come to a conclusion in favour of Revenue, the nature of information contained in or revealed by such document would have to be examined to link such document to undisclosed income of the assessee……..” ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 137 of 155 74. CIT Vs. S.M.Agarwal [2007] 162 Taxman 3 (Del) in which the Hon’ble Delhi High Court held that “12. It is well-settled that the only person competent to give evidence on the truthfulness of the contents of the document is the writer thereof. So, unless and until the contents of the document are proved against a person, the possession of the document or hand writing of that person, on such document by itself cannot prove the contents of the document. These are the findings of fact recorded by both the authorities, i.e., Commissioner of Income-tax(Appeals) and the Tribunal.” 75. In the case of Smt. Harmohindar Kar Vs. DCIT CC-2 Jalandhar reported in (2021) 124 taxmann.com 60 (Amritsar- Trib) after relying upon the Judgments of the Hon’ble Apex Court, High Court and Coordinate Bench of ITAT held as under:- \"4. Having heard the parties at length and perused the material available on record. As per Revenue case, during the search, a diary was found and seized as Annexure A-9 from the residence of the assessee and page 13 of the diary has noting which shows the actual sale consideration received qua property sold by the husband of the assessee was Rs. 1,15,00,000/- as against the amount of Rs. 29,50,000/- which had been shown as total consideration during the course of assessment proceedings. 5. The addition in this case is based upon diary noting and therefore issue involved relates to the value of such noting in diary/document. The apex court dealt with such kind of document as involved in this case in the case of CBI v. V.C. Shukla 1998 taxmann.com 2155 known as Jain Hawala Case and laid down the ratio. Let us to reproduce the same. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 138 of 155 'That entries in the Jain Hawala Diaries, note books and file containing loose sheets paper not in the form of \"Books of Accounts\" and has held that such entries in loose papers/sheets are not relevant and not admissible u/s 34 of the Evidence Act, and that only where the entries in the books of accounts regularly kept, depending on the nature of occupation, that those are admissible. Further as to value of the entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible and that they are only corroborative evidence. It has been held even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. Further the Apex Court laid down that \"Meaning of account book would be spiral note book/pad but not loose sheets. The following extract being relevant is quoted herein below.\" \"14. In setting aside the order of the trial court, the High Court accepted the contention of the respondents that the documents were not admissible in evidence under section 34 with the following words: \"An account presupposes the existence of two persons such as a seller and a purchaser, creditor and debtor. Admittedly, the alleged diaries in the present case are not records of the entries arising out of a contract. They do not contain the debits and credits. They can at the most be described as a memorandum kept by a person for his own benefit which will enable him to look into the same whenever the need arises to do so for his future purpose. Admittedly the said diaries were not being maintained on day-today basis in the course of business. There is no mention of the dates on which the alleged payments were made. In fact the entries there in are on monthly basis. Even the names of the persons whom the alleged payments were made do not find a mention in full. They have been shown in abbreviated form. Only certain 'letters' have been written against their names which are within the knowledge of only the scribe of the said diaries as to what they stand for and whom they refer to.\" ** ** ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 139 of 155 17. From a plain reading of the Section it is manifest that to make there under it must be shown that it has been made in a book, that book is a book of account and that book of account has been regularly kept in the course of business. From the above Section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second part speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which are concerned, fulfill the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 18. \"Book\" ordinarily means a collection of sheets of paper or other material, blank, written, or printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as \"book\" for they can be easily detached and replaced in dealing with the word \"book\" appearing in Section 34 in Mukundram v. Dayaram a decision on which both sides have placed reliance, the Court observed:— \"In its ordinary sense it signifies collection of sheets of paper bound together in a manner; which cannot be disturbed or altered except by tearing apart. The binding is of a kind which is not intended to the moveable in the sense of being undone and put together again. A collection of papers in a portfolio, or clip, or strung together on a piece of twine which is intended to be untied at will, would not, in ordinary English, be called a book.... I think the term 'book' in Section 34 aforesaid may properly be taken to signify, ordinarily, a collection of sheets of paper bound together with the intention that such binding shall be permanent and the papers used collectively in one volume. It is easier however to say what is not a book for the purposes of Section 34, and I have no hesitation in holding that unbound sheets of paper, in whatever quantity, though filled up with one continuous account, are not a book of account within the purview of Section 34.\" ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 140 of 155 We must observe that the aforesaid approach is in accord with good reasoning and we are in full agreement with it. Applying the above tests it must be held that the two spiral note books (MR 68/91 and MR 71/91) and the two spiral pads (MR 69/91 and MR 70/91) are \"books\" within the meaning of section 34, but not the loose sheets of papers contained in the two files (Mrs 72/91 and 73/91).' 6. Further in the case of the Common Cause (A Registered Society) v. Union of India [2017] 77 taxmann.com 245/245 Taxman 214/394 ITR 220, the Apex Court dealt with the loose sheets and was pleased to held that,— 'It is apparent from the aforesaid discussion that loose sheets of paper are wholly irrelevant as evidence being not admissible U/s 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. Further the Apex Court in para No. 22 was pleased to held that: \"In case of Sahara, in addition we have the adjudication by the Income-tax Settlement Commission. The order has been placed on record along with I.A. No. 4. The Settlement Commission has observed that the scrutiny of entries on loose papers, computer prints, hard disk, pen drives etc. have revealed that the transactions noted on documents were not genuine and have no evidentiary value and that details in these loose papers, computer print outs, hard disk and pen drive etc. do not comply with the requirement of the Indian Evidence Act and are not admissible evidence. It further observed that the department has no evidence to prove that entries in these loose papers and electronic data were kept regularly during the course of business of the concerned business house and the fact that these entries were fabricated, non- genuine was proved. It held as well that the PCIT/DR have not been able to show and substantiate, the nature and source of receipts as well as nature and reason of payments and have failed to prove evidentiary value of loose papers and electronic documents within the legal parameters. The Commission has also observed that Department has not been able to make out a clear case of taxing such income in the hands of the applicant firm on the basis of these documents. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 141 of 155 It is apparent that the Commission has recorded a finding that transactions noted in the documents were not genuine and thus has not attached any evidentiary value to the pen drive, hard disk, computer loose papers, computer printouts. Since it is not disputed that for entries relied on in these loose papers and electronic data were not regularly kept during course of business, such entries were discussed in the order dated 11-11-2016 passed in Sahara's case by the Settlement Commission and the documents have not been relied upon by the Commission against assessee, and thus such documents have no evidentiary value against third parties. On the basis of the materials which have been placed on record, we are of the considered opinion that no case is made out to direct investigation against any of the persons named in the Birla's documents or in the documents A-8,A-9 and A-10 etc. of Sahara.\"' 7. Coordinate Bench of ITAT at Delhi in the case of Pramod Pandey v. Asstt. CIT [IT Appeal No. 4295 (Delhi) of 2012, dated 6-12-2013], while dealing with the identical issue as involved in this case, has held as under: \"15. Now we adjudicate upon the merits of the case. In this case addition of Rs. 35 lacs has been made on the basis of seized material found in the shape of diary which contains the following entries:— B-1/A-13/53 dated 16-07-2005 \"Arrange cash for S.C. Jain/farmhouse\" B-1/A-13/54 dated 18-07-2005 \"Agreement with S. G. Jain on Chhatarpur area\" B-l/A-13/71 dated 16-08-2005 \"Deliver cash to Jain/Bhatti (20L)\" B-l/A-13/75 dated 20-08-2005 \"Give 15 L & all cleared for Bhatti + 5L Cheque\" 16. We note that the said seized material in the shape of diary did not belong to the assessee. It belonged to the assessee's brother. He has not at all been confronted with the contents of the said diary. Assessee cannot be called upon to explain the contents of diary which belonged to the assessee's brother and was found from the brother. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 142 of 155 17. We also note that there is no mention of the assessee's name in the particulars of diary as contained hereinabove. Though there is mention of the farm house belonging to the assessee, there is no mention of the total price paid etc. From the jottings as above, Assessing Officer has inferred that assessee has paid Rs. 35 lacs over and above the disclosed consideration to the seller. Now we find that the seller has denied having taken any money over and above the disclosed sale consideration. It is also not the case that seized material were in the hand writing of the assessee or the seller or were seized from the premises of the seller. Even the total price paid for the property is not mentioned in the seized material. The jottings in the diary by no stretch of imagination can be treated as conclusive proof of on money transactions by the assessee. It is not the case that the-circle rate or the value as per stamp registration authorities of the impugned property is more than what has been disclosed. There is no case that any part of the jottings in the diary has been corroborated from any other findings. Hence, in the background, we find that presumption u/s. 132(4A)/292C of the Act cannot be taken against the assessee. Thus, from the facts and circumstances of the case, we find that addition of on money transaction in this case is not sustainable. 18. In this regard we place reliance of the Hon'ble Apex Court decision in the case of K.P. Vargheser v. ITO [1981] 131 ITR 587, wherein it has been held that the burden of proving is that of Revenue when there is allegation of understatement on concealment in the consideration shown. Here we find that revenue has failed to discharge the burden cast on it. 19. We also place reliance from the Hon'ble Apex Court decision in the case of CIT v. Kalyansundaram [2007] 294 ITR 49 (SC) in which allegations of on money transaction on the basis of non-convincing loose sheets found during the course of search and conflicting statement of the seller, was deleted by the Tribunal and the same was affirmed by the Hon'ble High Court and Hon'ble Apex Court.\" 8. Delhi High Court in the case of CIT v. Parveen Juneja [IT Appeal No. 57 of 2017, dated 14-7-2017], while dealing with the similar facts and circumstances as involved in this case, has held as under: ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 143 of 155 \"3. A search took place in the premises of the Respondent/Assessee pursuant to which certain documents were seized. The document on the basis of which the above addition was made was a piece of paper (identified as Annexure-2. This was a hand written paper purportedly containing details of house construction expenses of Rs. 49 lakhs out of which Rs. 29. 70 lakhs has already been paid. 4. The explanation offered by the Assessee was that the said paper was not related to him the assessee.1 He was working as a professional director in Shamken Multifab Ltd. and used to handle various projects of the said company. The CIT (A) rejected the above explanation. Since the said document had been seized from the residence of Assessee, the CIT (A) drew a presumption under section 292C of the Act was that it belonged to him. Further, the CIT(A) proceeded to hold that Rs. 49 lakhs constituted the unexplained income of the Assessee since the Assessee had not submitted any evidence like a confirmation letter or any other document to show that expenditure related to any project of the aforementioned company. 5. The ITAT in the impugned order noted that the said document \"does not indicate if it pertains to the assessee nor the address and location of the property is mentioned therein nor such property has been located by the AO during the assessment proceedings. The AO has also not brought on record any forensic evidence to prove the handwriting of the loose paper relied upon by him to make the addition, which is exclusively made on the basis of suspicion and guesswork. Even no corroborative material has brought on record by the AO to substantiate the addition nor the CIT(A) has called for any remand report seeking corroborative evidence, if any.\" 9. Now coming to the instant case, as it appears from the orders passed by the authorities below, a diary was found and seized as Annexure A- 9 from the residence of the assessee and page 13 of the diary has noting which shows various amounts in total Rs. 1,15,00,000/- which was considered by the assessing officer as the actual sale consideration received qua property sold by the assessee's husband, whereas in the registered sale deed, total consideration had been shown to the tune of Rs. 29,50,000/- . On show caused, it was explained and replied by the assessee that the diary does not belong to ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 144 of 155 the assessee and noting therein are also not in the handwriting of the assessee. However, the said reply and explanation was not found acceptable by the Assessing Officer on the reasons that in the assessee's own case for AY 2008-09, it was submitted by the assessee that the diary was maintained by her husband Sh. Mohinder Singh, being head of the family who was controlling all the financial matter of the family. Further it was observed by the AO that assessee's husband was the owner of the ½ share of the property under consideration and therefore the contention of the assessee that she has nothing to do with the contents of the diary, was unacceptable. The Assessing Officer while making the addition also relied upon section 292C of the Act on the reasons that in terms of section 292C of the Income-tax Act, 1961 the documents found in the possession of persons during the course of search are to be taken as belonging to them and contents of such documents are true. 10. On appeal the Ld. CIT(A) upheld the said addition on the same footings as held by the Assessing Officer. 11. The Tribunal in the case of Pramod Pandey (supra) has clearly held that jottings in the diary by no stretch of imagination can be treated as conclusive proof of on money transaction by the assessee. Further, there is no case that any part of the jottings in the diary has been corroborated from any other findings. Further, it is also not the case that the circle rate or the value as per stamp registration authorities of the impugned property is more than what has been disclosed. Hence in the background, the presumption u/s 132(4A)/292C of the Act cannot be taken against the assessee. Consequently the addition of own money transaction in this case is not sustainable. While coming to the instant case, there is nothing on record to suggest that the assessee has under estimated the value of the property and violated the circle rate as prescribed by the Government and acted against the Indian Stamp Act, 1899. The Assessing officer allegedly corroborated the entries on page no. 10 and 13 of the diary by reproducing the copies in the assessment order and by observing\" that the heading on the top of the page no. 13 'DIV- 3' indicate that these payments pertain to sale of the property near Chowki Divison-3. Further total amount of Rs. 1,15,00,000/-has been received on sale consideration of this plot which is also proved when these entries are ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 145 of 155 seen along with entries on page no. 10 of the same diary. The AO futher mentioned that this page shows amount of cash actually with Sh. Ruby (i.e. Sh. Balwinder Singh Kohli, the son of the assessee) and the figure of Rs. 28,50,000/- pertains to another unaccounted sale consideration of shop in MBD Mall. The co-relation of the other entries on these pages and the dates mentioned against the two entries as 25th and 26th February at place Goraya for receipt of cash from the purchaser. On the basis of the documents, a total cash of Rs. 1,15,00,000/- was received as sale consideration of this property near Divison-3, Chowki while the registry shows the sale consideration of Rs. 29,50,000/-\". In our considered view, the AO has drawn the presumptions and assumptions only on the basis of noting of diary without being calling and confirming from the purchasers or making independent exercise to unearth the truth. Even there is no circumstance and material on record to suggest as authenticated or substantive and corroborative material against the assessee on the basis of which the addition can be made. Even the diary admittedly does not belong to the assessee and noting of the same are also not in the handwriting of the assessee. Further, no description either address or location of the property has been mentioned in the diary and therefore on the basis of peculiar facts and circumstances, we are of considered view that no presumption u/s. 292C of the Act can be made against the assessee. 12. The Apex Court in the cases of V.C. Shukla (supra) and Common Cause (A registered Society) (supra) analyzed the position of law with regard to the loose sheets/diary in which some noting has been made by the person other than the persons searched and clearly held that the said document do not have any value in the eyes of law. Further entries in the Diaries, note books and file containing loose sheets paper not in the form of \"Books of Accounts\" and has held that such entries in loose papers/sheets are not relevant and not admissible u/s 34 of the Evidence Act. Further as to value of the entries in the books of account, that such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible and that they are only corroborative evidence. Even then independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 146 of 155 13. On the basis of the aforesaid judgments, we are of the view, diary seized during the survey/search operation, without corroboration, have no authenticity and therefore, cannot be relied upon. Even entry recorded in the diary qua amount of sale was not confirmed from the buyers of the property and without confirmation, question of any assumption or belief that the entry belongs to the assessee did not arise and hence entry found in diary without any corroborative evidence, cannot be made basis of addition. The authorities below in the instant case, made the addition only on the basis of surmises, suspicion and guess work. Hence, respectively following the judgments referred above we are unable to sustain the addition made by the Assessing Officer and affirmed by the Ld. CIT(A). Consequently we are inclined to delete the same, resultantly the appeal of the assessee is liable to be allowed.\" 76. If one were to examine the facts of the case on hand keeping the ratio of the above cited decisions, it is not in dispute that the entries in Diary (A/KG/3) is not in the handwriting of the assessee and further the author of the same is unknown. The assessee has also denied any knowledge of its ownership and its contents. Under these circumstances the AO cannot rely upon the provisions of Section 292C of the Act to come to a conclusion that the figures in the Diary represent the undisclosed income of the assessee, without any corroborative evidence to support. In the case of this assessee it is clear that even though the Revenue is of the opinion that the assessee has not given a satisfactory explanation of the contents of the Diary found in residence but that by itself does not allow the AO to make addition. An addition can be made only if these contents in the Diary ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 147 of 155 which was found are actually connected to the assessee’s transactions for the respective Assessment Years. 77. The Revenue has also relied on the decision of this Hon’ble Tribunal in the case of Trishul Buildtech Infrastructure (P) Ltd Vs. JCIT in ITA Nos. 1362, 1363 and 1367/Bang/2013 dated 20.02.2015, which is also cited by the learned CIT(A) in his appellate order to support the additions made based on entries in the diary (A/KG/3). It is on record that the decision of the Tribunal was set aside by the Hon'ble High Court of Karnataka and matter was set aside to the Tribunal to decide the appeal de novo and the appeal of the assessee was allowed on a legal ground by an Order dated 26.10.2023 78. After careful consideration of the all the above referred decisions and the relevant facts therein, there is no doubt that the decisions relied upon by the assessee are squarely applicable to the facts and circumstances of the assessee’s case. We find that the Hon’ble Punjab and Haryana High Court in the case of CIT Vs. M/s. Khosla Ice and General Mills 2013 (1) TMI 451, has captured the essence of this proposition and explained the same in a lucid manner, which we reproduce here below : “that when a dumb document, is to be made the basis for an addition to fasten tax liability on the assessee, the burden is on the AO to ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 148 of 155 establish with corroborative evidence that the nature of entries contained therein reflect income and also that such income was in the control of the assessee. Thus, AO has to establish, with necessary corroborative evidence, that various entries contained in the seized document reflect unaccounted transactions effected by the assessee. Considering the entirety of circumstances, in the absence of any material to support the nature and ownership of the entries found in the seized document, no addition is permissible in the hands of the assessee as undisclosed income by merely arithmetically totalling various figures jotted down on such document.” 79. Further, we also find that the entries relied upon to make the additions are unsubstantiated and there is nothing to suggest any undisclosed assets of assessee found during the course of search. More so, it does not show any recovery of the undisclosed assets in the form of landed property, building, investments, money, bullion, jewellery or any kind of movable or immovable asset. The only asset which has suffered tax by way of undisclosed investment is jewellery belonging to the assessee and his wife. The total addition made on this issue is Rs.1,08,49,594/- and the same is dealt with separately in the later portion of this Order. This addition is not based on any excess jewellery actually found with the assessee at the time of search. In fact, no portion of the addition made is attributable to jewellery actually found in search. 80. Further, the AO has not recorded any statement from any person who in the opinion of the AO is a party to the transactions which are ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 149 of 155 supposed to represent the entries in the seized materials A/KG/3 and A/KG/9 to prove the truthfulness of the entries. The explanations and the narrative given by the AO to explain the transactions which are indicated by the entries in both the seized materials A/KG/3 and A/KG/9, are his own and do not emanate from any seized material or any statement/s recorded from any person/s who are supposed to be a party to the transaction/s. The narrative given by the AO, however interesting, cannot be the basis of addition, as the same are arising only out of the wild and speculative imagination of the AO. The AO relies upon one dumb document A/KG/9 to prove the other dumb document A/KG/3. The learned CIT(A) is also grossly wrong in accepting the same and confirming the addition. 81. In view of the foregoing facts and circumstances of the case and the law applicable to the same, we delete the substantive addition of Rs.329,75,00,000/- made for the Assessment Year 204-15; the protective addition of Rs.329,75,00,000/- made for the Assessment Years 2015-16 and the substantive addition of Rs. 408,50,00,000/- for the Assessment Year 2016-17, by the AO, which are all based on entries found in the seized material A/KG/3. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 150 of 155 82. Additions on account of unexplained Investment in Jewellery under section 69A of the Act, for the Assessment Year 2016-17: The AO has made a substantive addition of Rs.21,54,175/- and a protective addition of Rs. 86,95,409/- as unexplained investment in jewellery for Assessment Year 2016-17. The substantive addition of Rs.21,54,175/- represents addition on account of unexplained jewelry of the assesse and the protective addition of Rs.86,95,409/- represents addition on account of unexplained jewelry of the wife of the assessee. The learned CIT(A) confirmed the protective addition in the hands of the assessee as substantive as no substantive addition was made in the hands of the spouse of the assessee. The learned CIT(A), however, held that since the same was added substantively for the Assessment Year 2013-14 and confirmed by the learned CIT(A) in the appeal for the said Assessment Year 2013-14, he deleted the addition for the Assessment Year 2016-17. Both the assessee as well as the Revenue are in appeal on this issue. The substantive as well as the protective addition made by the AO represents the excess of jewellery as declared by the assessee in his statement of assets filed before the Lokayuktha, over and above the actual jewellery found at the time of search. 83. It is not in dispute that the quantum of actual jewellery found at the time of search is much lesser than the quantum of jewellery ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 151 of 155 declared in the statement filed before the Lokayuktha and the addition is made on the excess jewellery as declared before the Lokayuktha. It is also not in dispute that the quantum of jewellery declared before the Lokayuktha as on 31/03/2016, is the same as declared before them as on 31/03/2014 and 31/03/2015. In other words, as per the statement filed before Lokayuktha, there is no addition to jewellery in the Assessment Years 2014-15, 2015-16 and 2016-17. Further it is also not in dispute that no unexplained jewellery was physically found in the search under section 132 of the Act. The AO has not made any addition on the ground that jewellery physically found is in excess of what is declared. The AO has accepted that Jewellery physically found stands explained and no addition is made on this count. 84. The addition made is on account of the fact that the AO took a view that the jewellery declared in the statement filed before the Lokayuktha being more than what was found in the search, the excess of the jewellery as per statement before Lokayuktha over and above what was found in the search represents unexplained jewellery and he proceeded to add the value of such excess jewellery to the income of the assessee under section 69A of the Act. It is also not in dispute that the assessee has filed a revised statement of assets before the Lokayuktha as on 31/03/2016, on the ground that the original statement filed is erroneous and the same has been accepted by them. The AO ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 152 of 155 has, however, not considered the revised statement on the ground that it is an afterthought. 85. The assessee has challenged the addition contending that the addition on account of unexplained jewellery is made under section 69A of the Act in contravention of the provisions of 69A of the Act, considering the facts and circumstances of the case. 86. Considering the facts of the case, the learned AR submitted that the provisions of section 69A of the Act would apply only where an assessee is found to be the owner of jewellery which is not recorded in the books of accounts, if any, maintained by him and the assessee offers no satisfactory explanation about the nature and source of acquisition of the same. If one were to take a view that the quantum of jewelry as declared statement filed before the Lokayuktha reflects the correct state of affairs of the assessee and his wife, then one cannot ignore the fact the same quantum has been declared in the statements filed before the Lokayuktha for the earlier years also. An addition can be made to the income of the of the assessee for the Assessment Year 2016-17 only in respect of the jewellery found to be acquired in the Assessment Year 2016-17, for which the assessee is unable to offer a satisfactory explanation about the nature and source of acquisition. In the present case, if one were to go by the statement filed before Lokayuktha and relied upon by the AO, the neither the assessee nor his ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 153 of 155 wife have acquired any jewellery during the Financial Year ended 31/03/2016, relevant to the Assessment Year 2016-17 and hence no addition is warranted under section 69A of the Act. 87. Further, if one were to take a view that the Jewellery physically found at the time of search represents the true and correct state of affairs, then no addition is called for as the same has been accepted by the AO and he has not made any addition which is attributable to jewellery physically found at the time of search as he has not given any finding that any portion of the jewellery actually found stands unexplained. 88. Considering the above facts and circumstances of the case, the substantive addition of Rs.21,54,175/- as well as the protective addition of Rs. 86,95,409/-, treated as substantive by the learned CIT(A), in the absence of a substantive addition made in the hands of the assessee’s spouse, as unexplained investment in jewellery under section 69A of the Act for Assessment Year 2016-17 are hereby deleted. As regards the observation of the learned CIT(A) that additions on account of jewellery have been confirmed by him for the Assessment Year 2013-14, we have deleted the same for want of requisite jurisdiction to assess the same in the Assessment Year 2013-14 under section 153A of the Act, in our Order in ITA No.1021/Bang/2014, of even date. ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 154 of 155 89. In view of the fact that both the additions on account of entries in seized material A/KG/3, A/KG/9 and undisclosed jewellery being deleted, we have decided the issue only on the arguments advanced by both the parties. The other grounds raised by the assessee are academic in nature and are kept open. 90. Since, we have deleted the additions made by the AO in entirely; therefore, it is not required to adjudicate separately the Revenue’s appeal. In the result the appeals of the assessee in ITA No’s 1022 to 1024/ Bang/ 2024, for the Assessment Years 2014-15, 2015-16 and 2016-17 are allowed and the appeals of the Revenue in ITA Nos.1290 to 1292/ Bang/2024 are dismissed. 91. To sum up, the appeal filed by the assessee for the Assessment Years 2013-14 to 2016-17 in ITA Nos.1201 to 1204/Bang/2024 are allowed and appeal filed by the Revenue in ITA Nos.1290 to 1292/Bang/2024 are dismissed. A common Order passed shall be kept in the respective case files. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (SOUNDARARAJAN K.) (LAXMI PRASAD SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Bangalore, Dated : 31.01.2025. /NS/* ITA Nos.1021 to 1024/Bang/2024 ITA Nos.1290 to 1292/Bang/2024 Page 155 of 155 Copy to: 1. Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "