DY. COMMISSIONER OF INCOME TAX CENTRAL-1(4), KOLKATA, AAYAKAR BHAWAN , POORVA V. ONTRUST SUPPLIERS PVT LTD, KOLKATA

ITSSA 111/KOL/2023

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) which had deleted the additions made under section 68 of the Income Tax Act, 1961, concerning the assessee, Ontrust Suppliers Pvt. Ltd., for the Assessment Years 2015-16 and 2019-20. The additions were initially made by the Assessing Officer based on a ledger account of M/s. Tower Distributors Pvt. Ltd. found during a search operation. The Tribunal examined whether the document constituted incriminating material and whether the additions were justified. The Tribunal concluded that the document was not incriminating and that the assessee had sufficiently proved the identity, creditworthiness, and genuineness of the transactions with M/s. Tower Distributors Pvt. Ltd.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 41664 (ITAT-KOLKATA)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Other Referred Cases: PCIT v. Abhisar Buildwell P. Ltd., All Cargo Global Logistics Ltd. Vs. DCIT, CIT vs. Kabul Chawla, CIT vs. Veerprabhu Marketing Ltd., Principal Commissioner Of Income Tax vs M/s. Salasar Stock Broking Ltd., PCIT, Central-I, Kolkata Vs. Rashmi Infrastructure Ltd., Dharmvir Merchandise (P) Ltd. Vs. ITO, Satyam Smertex (P.) Ltd vs DCIT, CIT vs. Orissa Corporation Pvt. Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHENDU DATTA
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Set aside; Retrospective amendment; Reassessment proceedings; Question of law; Unexplained cash credit; Unexplained investment; Fair market value; Income from undisclosed sources; Document seized; Documents seized; Onus to prove; Gift; Search and seizure; Accommodation entries; Block assessment; Source of fund; Bogus Share capital
• Section: 143(3); 153; 132; 153A; 68; 131; 133(6); 113; 153C; 73; 264; 260A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES “A”, KOLKATA BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / IT(SS)A Nos.110 and 111/KOL/2023 Assessment Year : 2015-16 and 2019-20 DCIT, Central Circle-1(4), Kolkata V/s Ontrust Suppliers Pvt. Ltd., 20A, British India Street, Esplanate, Kolkata – 700 069 West Bengal PAN : AABCO4138P Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned two appeals pertaining to Assessment Years 2015-16 and 2019-20 at the instance of Revenue are directed against the separate orders both dated 22.03.2023 passed by CIT(A), Kolkata-20 u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which in turn are arising out of respective Assessment orders dated 25.03.2022 passed u/s.153C of the Act. 2. Since the issue raised by Revenue for the years under appeal is common, we proceed to dispose of these appeals by way of this consolidated order for the sake of convenience. Assessee by : Shri Miraj D. Shah, AR Revenue by : Shri Subhendu Datta, CIT-DR Date of hearing : 20.11.2024 Date of pronouncement : 18.02.2025 2 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 3. At the outset, we find that the appeals are time barred by 67 days before the Tribunal. The Revenue has filed the condonation petition enumerating the reasons which led to delay in presenting the appeal. We are satisfied with the reasons so stated and therefore condone the said delay of 67 days and proceed for adjudication of appeal. 4. The Grounds of appeal raised by the Revenue for A.Y. 2015-16 and 2019-20 read as under : Grounds of appeal for A.Y. 2015-16 : “1. Whether on the facts and circumstances of the case and on materials available, Ld. CIT(A) was erroneous in not appreciating the addition made u/s.68 of the IT Act Rs.320,00,000/- as the identity of the creditors creditworthiness and genuineness of the transaction was not proved. 2. whether on the facts and circumstances of the case and on documents the Ld. CIT(A) has erred in not accepting the Tally data documents relating to transactions with M/s. Tower Distributors Pvt. Ltd., and ledger copy found in assessee office as being incriminating documents.” Grounds of appeal for A.Y. 2019-20 : “1. Whether on the facts and circumstances of the case and on materials available, Ld. CIT(A) was erroneous in not appreciating the addition made u/s.68 of the IT Act Rs.1,83,00,000/- as the identity of the creditors creditworthiness and genuineness of the transaction was not proved. 2. whether on the facts and circumstances of the case and on documents the Ld. CIT(A) has erred in not accepting the Tally data documents relating to transactions with M/s. Tower Distributors Pvt. Ltd., and ledger copy found in assessee office as being incriminating documents.” 5. We take the lead appeal of the Revenue for the A.Y. 2015-16 first. Facts in brief are that a search was conducted u/s.132(1) of the Act on 07.12.2020 at Jalan 3 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Group of Companies. During the course of search, a ledger account of M/s. Tower Distributors Pvt. Ltd. (in short ‘TDPL’) appearing in the books of account of assessee for the period 01.04.2011 to 01.12.2020 was found. Since this document did not pertain to the assessee who was searched u/s.132 of the Act, ld. Assessing Officer of the searched person recorded proper satisfaction and the same was handed over to the ld. Assessing Officer of the assessee in question, i.e. Ontrust Suppliers Pvt. Ltd. and further the ld. Assessing Officer other than the searched person, i.e. the assessee recorded the satisfaction and initiated the proceedings by issuance of notice u/s.153C of the Act. In the said document, i.e., the ledger account, there were some transactions of the amount received by the assessee from TDPL at Rs.3.20 crore for A.Y. 2015-16 and Rs.1.83 crore for A.Y. 2019-10. Valid notices u/s.143(2)/142(1) of the Act were issued and served upon the assessee. During the course of assessment proceedings, it was stated by the assessee that alleged sum was received from TDPL on account of advance for sale of land. An Inspector was deputed to verify the physical address of M/s. Tower Distributors Pvt. Ltd., however, the party is not found at its registered address. Ld. AO therefore opined that the said party was only a paper/jama-kharchi concern. On confrontation, Shri Ajay Mohan Jalan in his statement u/s.132(4) of the Act explained that the money was received from M/s. Tower Distributors Pvt. Ltd. on account of advance for ‘sale of land’. Ld. AO has further mentioned that one entry operator Mr. Dinesh Kumar Dhandhania had accepted in his statement recorded previously that Mr. 4 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Rampal Agarwal was appointed as dummy director of M/s. Tower Distributors Pvt. Ltd. and that Mr. Dinesh Kumar Dhandhania had floated a number of companies to provide accommodation entries. Ld. AO has further mentioned that the funds received from M/s. Tower Distributors Pvt. Ltd. were invested in purchasing different plots of land on different dates. In the course of 153C proceedings, ld. AO has examined the identity and creditworthiness of TDPL and genuineness of the transactions. Ld. AO has mentioned that mere filing of bank statements by itself may not be sufficient to prove the creditworthiness without any explanation for the deposits in the accounts and their source. Since the Directors of the lender company were not traceable at their registered address and the assessee company also did not produce the directors, ld. AO was unable examine the genuineness of the business activities of the lenders and to ascertain whether they were financially sound to lend substantial amounts. In response to notice u/s.133(6) of the Act served on M/s. Tower Distributors Pvt. Ltd., the said company furnished their reply along with copy of audited accounts, Balance-sheet and other documents. After examining those documents, ld. AO has mentioned that the aforesaid concern have raised huge capital which was invested in other non-current assets in the form of investment in equity shares, unsecured loans etc. It was further observed that aforesaid company didn’t have any fixed assets and salary paid to employees was only Rs.20,000/- for F.Y. 2014-15. Eventually, the AO relying on certain decisions made addition of Rs.3.20 crore and at Rs.1.83 crore u/s.68 of the Act for A.Y. 2015-16 and A.Y. 5 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 2019-20 respectively holding that cash creditor was not carrying out any business activity and the existence of the company was only on paper, which had no creditworthiness to carry out of such valued transactions. 6. Aggrieved assessee preferred appeals before the ld.CIT(A) against the impugned additions for A.Y. 2015-16 and A.Y.2019-20 by making the following submissions : “It is owner of various land parcels in Howrah. Assessee company is a part of Jalan Group which is engaged in real estate project, land development and industrial plotting for past few decades. Assessee company had entered into an agreement with M/s. Tower Distributors Pvt. Ltd. to sell 830 decimals of land located in Mouza-Hijlok and Tenpur Abasan, Howrah. This agreement was signed on 03.03.2015. Total consideration for the sale of land was Rs.910.8 lakhs. Copies of agreement signed on 03.03.2015, 01.02.2019, 01.02.2020 and 01.02.2021 have been submitted along with the reply. Appellant has also submitted details of date- wise money receipt from M/s. Tower Distributors Pvt. Ltd., along with the utilization of this money. Initial funds received from March, 2015 to 5th February, 2019 have been utilized for loan re- payments. Further, funds received from 16th February, 2019 to 24th July, 2019 has been utilized as mutation charges, conversion charges and compensation for land development. Appellant further submits that M/s. Tower Distributors Pvt. Ltd. was incorporated on 28.03.1995 and it is assessed to tax. The said company has a net worth of Rs.22,71,40,672/- as on 31.03.2015 and net worth of Rs.23,06,42,012/- as on 31.03.2020. The said company had last raised share capital in the financial year 2004-05. Since then, it has not raised any fresh capital. 6.1 Assessee further submitted that in response to notice u/s.133(6), M/s. Tower Distributors Pvt. Ltd. had responded and also submitted the following documents, however, the AO brushed aside all the submissions and made addition u/s.68 of the Act : 1. Certificate of Incorporation 2. Memorandum and Article of Association 3. Audited Accounts for year ended 31.03.2015, 31.03.2019 and 31.03.2020 6 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 4. Income tax return for year ended 31.03.2015, 31.03.2019 and 31.03.2020 5. Bank statement reflecting the transactions 6. Source of funds of creditor 7. Confirmation of Accounts for the transactions 8. Agreement for sale 9. Reply to notice u/s.133(6) of the Income-tax Act, 1961 10. Reply of assessee in respect of show cause notice dated 15.03.2022 issued by the AO to the assessee 6.2 With regard to non-availability of M/s. Tower Distributors Pvt. Ltd. at their registered address, assessee company submitted that office premises of the said party has been geotagged with the Registrar of the company and the notice u/s.133(6) was also served on the same address and it was also complied with. Regarding Mr. Rampal Agarwal, being a dummy director in M/s. Tower Distributors Pvt. Ltd., assessee submitted that Mr. Rampal Agarwal had ceased to be a director of M/s. Tower Distributors Pvt. Ltd. on 30.08.2014 whereas assessee received the first installment of funds from the said party on 03.03.2015 when Mr. Rampal Agarwal had no connection with the said company. It was submitted that there is no statement of Mr. Rampal Agarwal and hence no adverse inference can be drawn against the assessee. It is further submitted that the assessee had requested for the statement and opportunity to cross-examine but it was not provided. Regarding the statement of Mr. Dinesh Kumar Dhandhania, it is submitted that he was never a director of M/s. Tower Distributors Pvt. Ltd. Further, the statement of Mr. Dinesh Kumar Dhandhania was not provided to the assessee. Assessee’s request for cross-examination was also denied. Regarding AO’s observation that funds received from M/s. Tower Distributors Pvt. Ltd. was invested in purchase of properties, 7 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. assessee has submitted that it had purchased the land much before 2015 i.e. before the funds started coming to assessee from the said company. Majority of the properties were acquired prior to the receipt of the security deposit. Security deposits were utilized for re-payment of advances and other operational expenses but not for purchase of land. Appellant further submits that it had entered into an agreement with M/s. Tower Distributors Pvt. Ltd. to sell certain land to the said parties and against the agreement assessee had received the security deposit as part consideration. Assessee had provided explanation duly backed with documents and AO could not bring anything on record to dispute this. The said party has been regularly filing return of income and it had sufficient financial strength to pass on the funds to the assessee company. Appellant further submits that M/s. Tower Distributors Pvt. Ltd. has not raised any share capital from 01.04.2014 to 31.03.2020. Therefore, owned funds have been utilized by the company for payment of the consideration. 6.3 Assessee further submitted that the transaction of money received from M/s. Tower Distributors Pvt. Ltd. was duly recorded in the books of accounts of the assessee. No incriminating material found in the course of search which could indicate that the said transaction was a dubious transaction. No loose documents, digital evidences or statement of the assessee, of any third party were found. Even the alleged creditor had not stated this transaction to be a dubious transaction. Thus, in absence of incriminating material, AO didn’t have the jurisdiction to issue a notice u/s.153C of the Act. Appellant further points out that 8 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. material referred to in the satisfaction note is the ledger maintained in the accounting software of the assessee company which is part of its regular audited accounts and hence the same cannot be held to be incriminating material. In support of its contention that notice issued u/s.153C of the I.T. Act was bad in law, the assessee relied on the various judgments which are reproduced on para 4.2(c) of the impugned order Various other legal contentions were raised before the ld.CIT(A) the details of which are incorporated in para no.4.2(d) to 4.2(g) of the order. 7. Ld.CIT(A) after considering the elaborate submissions made by the assessee company, firstly dealt with the legal issue of initiation of proceedings u/s.153C in para 4.3(a) and 4.3(b) and held that proceedings initiated u/s.153C of the Act are not based on any incriminating evidences found during search on some other assessee. 8. As far as merits of the case are concerned, ld.CIT(A) held that the amount was received from TDPL towards advance for sale of land and that M/s. TDPL had not raised any fresh share capital during the period 01.04.2014 and onwards and the funds available in the form of share capital and free reserves which were invested in some other assets have been liquidated and the fund received therefrom have been utilized for giving the alleged sum to the assessee company in the regular course of its business and therefore even on merits of the case also additions made by the Assessing Officer u/s.68 of the Act was held to be uncalled for. 9 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 9. Now the Revenue is in appeal before the Tribunal for both the assessment years by raising the common grounds which are extracted above. 10. Ld. Departmental Representative vehemently argued supporting the detailed finding of the Assessing Officer stating that M/s. TDPL is not having any regular business activity and the assessee company has diverted its unaccounted income with the help of an accommodation entry routed from TDPL to its books of account and there is no creditworthiness of TDPL. Therefore, the impugned additions made by the Assessing Officer deserves to be confirmed. 11. On the other hand, ld. Counsel for the assessee apart from referring to the detailed submissions filed before the ld.CIT(A) appearing at 4.2(a) to 4.2(g) of the impugned order and also heavily relied on the finding of the ld.CIT(A). He further submitted that even the recent judgment of the Hon’ble Apex Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC) also applies on the case of the assessee. During the course of search, no incriminating material was seized, the document which is found is merely a ledger account which contains the transactions entered into between the assessee and TDPL through banking channel and the same are duly reflected in the books of account and therefore since the document found and seized during the course of search is not incriminating material in nature. The additions for the completed/unabated assessment years 2015-16 and 2019-20 are uncalled for as regular returns were filed by the assessee for both the years 10 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. and they are not selected for scrutiny by issuance of notices u/s.143(2) of the Act. Even on merits, ld. Counsel for the assessee firstly referred to various documents placed in the paper book, index indicating the documents is reproduced below : 11 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 12 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 12. We have heard the rival contentions and perused the record placed before us. The common grievance of the Revenue for the A.Y. 2015-16 and A.Y. 2019-20 is against the finding of ld.CIT(A) deleting the additions made by the AO u/s.68 of the Act at Rs.3.20 crore and Rs.1.83 crore for the A.Yrs. 2015-16 and 2019-20 respectively received by the assessee. We observe that AO made the impugned additions based on his observation that the assessee failed to prove the identity and creditworthiness of the cash creditor namely M/s. Tower Distributors Pvt. Ltd. and genuineness of the transactions with the assessee. We also observe that on one hand when the AO deputed Inspector to verify the physical address of M/s. TDPL, the party was not fund at the registered address but subsequently when ld. AO called for the information u/s.133(6) of the Act, a detailed reply was filed by M/s. TDPL along with its audited balance sheet, profit and loss account, ITR, bank statements etc. It is also noticed that M/s. TDPL is a Private Limited Company registered with the Registrar of Companies and company’s registered address is duly verified by the registering authority, i.e. ROC and the cash creditor company has been filing its regular annual returns along with audited financial statements on the website of Ministry of Corporate Affairs. The basis of the impugned addition is basically a ledger account of M/s. TDPL appearing in the books of assessee which was found during the course of search at Jalan Group of companies conducted on 07.12.2020. Though this document has been reproduced by the ld.CIT(A) on pages 12 to 14 of the impugned order but still for the sake of 13 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. convenience, the same is extracted below for proper examination of facts: 14 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 15 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 13. Now in the above referred document, which is basically a consolidated ledger account for the period 01.04.2011 to 01.12.2020 showing transactions entered into between the assessee and M/s. TDPL and amounts received by the assessee are through banking channel. This document after proper recording of the satisfaction has been used by the AO for carrying out the proceedings u/s.153C of the Act. Ld. AO after considering the submissions of assessee made the addition u/s.68 of the Act which has been subsequently 16 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. challenged by the assessee before ld.CIT(A). The ld.CIT(A) has deleted the impugned additions based on two observations. Firstly, that the impugned document found during the course of search is not a incriminating material and therefore no addition was called for in the hands of assessee and secondly that M/s. TDPL was having sufficient creditworthiness in the form of share capital and accumulated free reserves prior to the date of receiving the alleged sum which has been utilized for the purpose of giving advance to the assessee against sale of land. We observe that the ld.CIT(A) deleted the impugned addition observing as follows : “4.3(a) I have carefully considered the facts of the case and submission of the appellant. Appellant has strongly objected to initiation of proceedings u/s.153C of the I.T. Act and has also submitted reply on merits. Before going into the merits of assessee’s submission, let us first have a look at the technical / legal issue raised by the appellant. Appellant has submitted that proceedings u/s.153C cannot be initiated without incriminating documents found during search. Appellant has cited a number of judicial decisions in this regard. Appellant submits that no incriminating documents were found during search. In the satisfaction recorded for initiation of proceedings u/s.153C, AO has referred to the extracts of ledger accounts in the books of the assessee company. These documents were found at the premises of one of the assessee’s of Jalan Group on which search and survey action were mounted on 07.12.2020 as per the provisions of section 132(1) of the I.T. Act. Satisfaction recorded by the AO for initiating proceedings u/s.153C is as under: “A search and seizure operation along with survey operation was conducted in Jalan Group of cases 07.12.2020 and on subsequent dates. During the course of search operation, several incriminating documents were seized. From the seized material it was seen that the assessee concern has entered into transactions with shell/ jamakharchi concerns and brought back its unaccounted income. 2. During the course of search operation at the office premises of Jalan group, it was seen that some transaction of the group company M/s Ontrust Suppliers Pvt Ltd was seen with Tower Distributors Pvt Ltd. The documents relating to transactions with 17 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. M/s Ontrust Suppliers Pvt Ltd were seized during the course of search operation, details of which is as under:” Xxxxxxxxxxxxxxxxxxxx Xxxxxxxxxxxxxxxxxxxx 4.3(b) Perusal of the satisfaction recorded by the AO clearly reveals that the AO has relied on the extracts of the ledger accounts of the assessee company which were seized from the premises of one of the assessees belonging to Jalan Group. AO has treated the ledger accounts in the name of M/s. Tower Distributors Pvt. Ltd. as incriminating document even though the entries therein are part of the books of accounts of the assessee company. The books of accounts are audited and return of income is filed on the basis of these audited books of accounts. Thus, the entries contained in the regular books of account cannot be considered as incriminating, unless some additional information/evidences have been gathered during search. But there is nothing on record to suggest that any such information or evidences were gathered during the course of search which may indicate the entries made in the books of accounts of the assessee company to be incriminating in nature. Mumbai ITAT (Spl. Bench) in the case of All Cargo Global Logistics Ltd. Vs. DCIT (2012) 23 taxmann.com 103 (Mumbai) (SB) has categorically held that the assessment u/s.153A has to be strictly restricted only to the incriminating material found during search. This view was confirmed by the Hon'ble Bombay High Court in the case of CIT Vs. Continental Warehousing Corporation, 374 ITR, 675. In the said judgement, the words ‘incriminating material’ were defined as follows: (a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - 1. books of account, other documents, found in the course of search but not produced in the course of original assessment, and 2. undisclosed income or property discovered in the course of search\". It is apparent from the discussion above that the satisfaction recorded for initiating proceedings u/s.153C is not based on any incriminating material. Rather, AO has referred to the entries contained in the regular and disclosed books of accounts of the assessee company while recording his satisfaction. Just because 18 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. the ledger account in the name of M/s. Tower Distributors Pvt. Ltd. in the books of the assessee company was found at the premises of some other person, these documents don’t become incriminating. AO has not pointed out even a single entry in these seized documents which are not recorded in the regular books of account. Hence, the ledger account in the name of M/s. Tower Distributors Pvt. Ltd., found and seized during search at the premises of some other person cannot be termed as ‘incriminating documents/evidences’. Under the facts and circumstances, as discussed above, it is apparent that the initiation of proceedings u/s.153C are not based on any incriminating evidences found during search on some other assessee.” “4.3(c) Now, let us see the views expressed by the Hon'ble Jurisdictional High Court of Calcutta and other Courts/Tribunals on issue relating to additions made in search assessments without any incriminating material found during search. (a) In the case of CIT, Kolkata – III Vs. Veerprabhu Marketing Ltd.(2016) 73 taxmann.com 149 (Cal), Hon'ble High Court has held as under: “6. Mr. Nizamuddin, learned advocate, appearing for the revenue-appellant submitted that it is true that section 153C read with section 153A proceeds on the basis of search under section 132 or requisition under section 132A. There is no reference to any survey under section 133A. He, therefore, did not dispute the submission made by Mr.Jain that power under section 153C read with section 153A could only have been exercised in the case of a search and requisition. He, however, added that there was, in fact, a search as also a requisition. He submitted that there has been survey in addition thereto. Therefore, it cannot be said that exercise of power was bad. Admittedly, there was search as also requisition. 7. With respect to the second submission advanced by Mr. Jain, we called upon Mr. Nizamuddin in vain to show us the incriminating material, if any, found either during the search or during the requisition or even during the survey which is or may be relatable to the assessee. Mr.Nizamuddin as unable to show that any such incriminating material was unearthed at any of the three stages pertaining to the assessee. 8. We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre- requisite before power could have been exercised under section 153C read with section 153A. 9. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such 19 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances. 10. We find no infirmity in the aforesaid act of the learned Tribunal. The appeal is, therefore, dismissed.” (b) In the case of Principal Commissioner Of Income Tax vs M/s. Salasar Stock Broking Ltd. order dated 24 August, 2016 G.A. No. 1929 of 2016 I.T.A.T. No. 264 of 2016 (Cal) the Hon'ble High Court has held as under: “Subject matter of challenge is a judgement and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No.1775/Kol/2012 and allowed a cross-objection registered as CO- 30/Kol/2013 both pertaining to the assessment year 2005-06. The learned Tribunal was of the opinion that the Assessing Officer had no jurisdiction under Section 153A of the Income Tax Act to reopen the concluded cases when the search and seizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Court in the case of CIT[A] vs. Kabul Chawla in ITA No.707/2014 dated 28th August, 2014. The aggrieved Revenue has come up in appeal. Mr. Bagaria, learned Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 661/2008 [CIT vs. Veerprabhu Marketing Ltd.] wherein the following views were expressed – \"We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre- requisite before power could have been exercised under section153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances.\" In that view of the matter, we are unable to admit the appeal. The appeal is, therefore, dismissed.” (c) In the case of PCIT, Central-I, Kolkata Vs. Rashmi Infrastructure Ltd. in ITAT No.99 of 2019, G.A. No.1211 of 2019 dated 24.02.2020, the Hon'ble High Court of Calcutta has held as under: 20 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. “This is an appeal under Section 260A of the Income Tax Act, 1961 against the order of the tribunal dated 5th December, 2018. We have much appreciated the conviction with which learned counsel for the revenue has tried to impress us that we should admit this appeal. The question is whether the assessee had unexplained cash credit in their books which could be charged to income tax in the previous year in question ? We find on scrutiny of paragraphs 10 and 10.2 of the order of the tribunal that questions of fact and evidence were discussed and adjudicated upon by it. We set out paragraphs 10 and 10.2 of the impugned order of the tribunal is as follows : \"10. Coming to the alleged cash trail, none of the material gathered by the Assessing Officer by way of bank account copies of various companies supposed to be part of the chain of companies was not confronted to the assessee. The alleged statements that were recorded from directors of these companies which formed this alleged chain were also not brought on record. Only a general statement has been made. There is no evidence whatsoever that cash has been routed from the assessee company to any of these chain of companies. There is no evidence that any cash was deposited by the assessee company. Moreover, there is no material whatsoever brought on record to demonstrate that the alleged cash deposit made in the bank account of a third party was from the assessee company. No opportunity to cross- examine any these parties was provided to the assessee. The bank statements based on which the cash trail was prepared are part of the disclosed documents and cannot be held as incriminating material. 10.2. Thus, none of these material gathered by the Assessing Officer can be catergoized as incriminating material found during the course of search or found during the course of any other operation under the Act. Thus, we hold that the additions in question are not based on any incriminating material. The ld. CIT(A) on page 38 of his order held as follows: \" I have considered the findings of the AO in the assessment order, different case laws was brought on record and appeal orders passed by my predecessors on this legal issue. I find from the assessment order that during the search & seizure operations conducted u/s 132 of the IT Act, 1961, incriminating documents/papers were not seized. At least addition made by AO in the assessment order passed u/s 153A/143(3) are not based of any incriminating documents/papers seized during the search operation. It would also not to be out of context to mention 21 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. here that in this case, on the date of search, no assessment for this year was pending. Therefore, keeping in view the ratio decided by the jurisdictional bench of Kolkata tribunal in case referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd(Supra) in the light of CBDT's decision of not filing SLP in this case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on the similar issue in the case of Pr CIT vs Kurele Paper Mills Pvt. Ltd: SLP (C) No. 34554 of 2015 dt. 07.12.2015, I am of this view that in order to maintain judicial continuity on this issue and respectfully following the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (Supra), assessee's appeal on ground no 1 is allowed and as such I am not inclined to adjudicate appeal on ground no. 2 on merit.” The tribunal is the final fact finding authority. A plausible adjudication on facts has been made. We cannot reopen the facts any more in this jurisdiction. No questions of law far less any substantial question of law is involved. For those reasons, the appeal (ITAT No.99 of 2019) and the connected application (GA No.1211 of 2019) are dismissed.” (d) In the case of CIT (Central) – III Vs. CIT vs. Kabul Chawla (2015), 61 taxmann.com 412 (Delhi)……. In the case of CIT vs. Kabul Chawla (2016), 380 ITR 573(Delhi) the Hon’ble Delhi High Court has held that once a search takes place, notice u/s. 153A (1) has to be mandatorily issued. Assessment and re-assessment pending on the date of search shall abate. But, an assessment under the section 153A has to be made only on the basis of seized materials. In absence of any incriminating materials, the completed assessment can be only reiterated and assessment can be made only in respect of abated assessment or reassessment. Completed assessment can be only interfered with by the AO while making the assessment u/s.153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in course of search which were not produced or not already disclosed or made known in the course of original assessment. While delivering the judgment; the Hon'ble Delhi High Court followed the judgment of the Bombay High Court in CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 374 ITR 645. These two judgments have been followed by various High Courts and Tribunals on this issue. The position as on today is that in respect of completed assessment any addition can be made under proceedings u/s.153A only if any incriminating documents are found. As 22 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. mentioned above, no incriminating documents have been found during search against the assessee. In the current case, additions (disallowances) have been made on the basis of information available in the Audit Report/Return of Income. Hence respectfully following the judgments / decisions of various High Courts and the Tribunals, including those of the jurisdictional High Court and ITAT, the disallowances made are not sustainable. The legal position was thereafter summarized by the Delhi High Court in Kabul Chawla's case (supra), as under : \"37. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned of decisions, the legal position that emerges is as under :— i. Once a search takes place under section 132 of the Act, notice under section 153A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the assessment year in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. iii. The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years \"in which both the disclosed and the undisclosed income would be brought to tax\". iv. Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment have to be made under this section only on the basis of seized material.\" v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in section 153A is relatable to abated proceedings (i.e. those pending 23 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each assessment year on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer. vii. Completed assessments can be interfered with by the Assessing Officer while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.\" 4.3(d) As can be seen from the above, the Hon'ble Calcutta High Court and Kolkata ITAT have, time and again, reiterated their view that the additions in the case of search assessments can be made on the basis of incriminating material only. Similarly, the Hon'ble High Courts of Delhi, Bombay, Rajasthan, Orissa, Karnataka, Madhya Pradesh and several other High Courts as well have expressed the similar views. Initially, the SLPs filed by the Department in the Supreme Court against the orders of the High Courts on this issue were dismissed by the Hon'ble Supreme Court. Thus, the SLP filed against the orders of the Hon'ble Delhi High Court in the cases of CIT (Central) – III Vs. CIT vs. Kabul Chawla (2015), 61 taxmann.com 412 (Delhi), PCIT Vs. Kurele Paper Mills Pvt. Ltd. (2016) 380 ITR 571 (Delhi) and PCIT Vs. Meeta Gutgutia (2017) 82 taxmann.com 287 (Delhi) were dismissed by the Hon'ble Supreme Court. However, recently the Hon'ble Supreme Court has admitted the SLPs filed by the Department on the same issue. Some of such reported cases are as under: 1. PCIT Vs. Anand Kumar Jain (2021) 133 taxmann.com 289 (SC) (Against the Order of Hon'ble Delhi High Court). 2. PCIT Vs. Gaurav Arora (2021) 133 taxmann.com 293 (SC)) (Against the Order of Hon'ble Delhi High Court) 3. PCIT Vs. Param Dairy Ltd. (2021) 133 taxmann.com 148 (SC) ) (Against the Order of Hon'ble Delhi High Court) 4. PCIT, Central-4 Vs. Dhananjay International Ltd. (2020) 114 taxmann.com 351 (SC) ) (Against the Order of Hon'ble Bombay High Court) However, the Hon'ble Supreme Court has not stayed any of the orders of Hon'ble High Courts even if SLPs of Department have 24 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. been admitted. Further, in the case of Veerprabhu Marketing Ltd. (Supra) Department decided not to file SLP against the order of the Hon'ble Calcutta High Court and this was communicated by letter No.ADG(L&R)-II/EZ/PCIT(C)/Kol/1184/2016/770,dated 07/ 08.02.2017. In view of the above discussion, the situation remains that additions in search assessments without incriminating evidences found during search would not be sustainable.” 14. Now from going through the finding of the ld.CIT(A) and also the decisions relied on by the assessee as well as the ld.CIT(A), firstly we have to notice whether the document found during the course of search at Jalan Group of companies is incriminating material in nature or not. Perusal of the document indicates about the transactions through banking channel entered into between the assessee and M/s. TDPL. Now it is an admitted fact that both the assessee as well as M/s. TDPL are Private Limited companies and registered with the Ministry of Corporate Affairs and filing regular income-tax returns along with getting the books of account audited and such reports have been furnished before the income-tax authorities as well as Registrar of Companies from year to year basis. Transactions appearing in the document are 01.04.2011 to 31.03.2020 and the years in dispute are A.Y. 2015-16 and A.Y. 2019-20. There is no such fact appearing in the alleged seized document which give an iota of evidence that there is any unaccounted income appearing in such document which the assessee has not disclosed in its regular return of income. Nor there is any mention of any such fact in some other handwriting or some figure is manually noted which could show that the assessee has given the cash to M/s. TDPL and then has received the cheque against cash as an 25 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. accommodation entry. In complete absence of any such fact which could prove that any unaccounted income of the assessee is appearing in this document, we are of the considered view that this document cannot be termed as incriminating material and it is merely a ledger account which is part of regular books of account and the transactions appearing therein have duly been accounted for in the books of account and the balance at the close of the year are appearing in the audited balance sheet. Now since we have found that the document is not an incriminating material, then the question comes whether the AO can make the addition for the completed/unabated assessment years, without making any reference to any incriminating material seized during the course of search. We observe that ld.CIT(A) has referred to the judgments of Hon’ble Calcutta High Court in the case of CIT, Kolkata – III Vs. Veerprabhu Marketing Ltd.(2016) 73 taxmann.com 149 (Cal), Principal Commissioner Of Income Tax vs M/s. Salasar Stock Broking Ltd. order dated 24 August, 2016 G.A. No. 1929 of 2016 I.T.A.T. No. 264 of 2016 (Cal), PCIT, Central-I, Kolkata Vs. Rashmi Infrastructure Ltd. in ITAT No.99 of 2019, G.A. No.1211 of 2019 dated 24.02.2020 and the judgment of Hon’ble Delhi High Court in the case of CIT (Central) – III Vs. CIT vs. Kabul Chawla (2015), 61 taxmann.com 412 (Delhi). We further notice that Hon’ble Apex High Court in the case of PCIT v. Abhisar Buildwell P. Ltd. (2023)454 ITR 212(SC) has affirmed the view of Hon’ble Delhi High Court of CIT vs. Kabul Chawla (supra) and even though the question was relating to the assessment proceedings u/s.153A r.w.s.143(3) of the Act but the same will apply with equal 26 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. force to the proceedings in question which has been carried out u/s.153C r.w.s.143(3) of the Act. Ratio laid down by Hon'ble Apex court reads as under:- “5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under section 132 or requisition under section 132A or not, i.e., whether any 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 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under section 132 or requisition under section 132A, the assessment has to be done under section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the 'total income' taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. CIT v. Mehndipur Balaji 2022 SCC Online All 444/[2023] 147 taxmann.com 201/ [2022] 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: 27 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. i. Once a search takes place under section 132 of the Act, notice under section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six AYs \"in which both the disclosed and the undisclosed income would be brought to tax\". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment \"can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.\" v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High 28 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: \"15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the' assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under subsection (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment 29 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. made under section 153A of, the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading \"Assessment in case of search or requisition\". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the, section can be regarded as a key to the interpretation of the operative portion of, the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning From the heading of section 153, the intention of the Legislature is clear, viz, to provide for assessment in case of search and requisition. When, the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment, should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act.\" 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under section 153A of the Act, 1961. 30 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under section 158BA of the Act, 1961. The erstwhile scheme of block assessment under section 158BA envisaged assessment of 'undisclosed income' for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the 'undisclosed income' and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the 'undisclosed income' was chargeable to tax at a special rate of 60% under section 113 whereas income other than 'undisclosed income' was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under section 153A are triggered by conducting of a valid search under section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: \"153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132-A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the 31 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, section 153-B and section 153- C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.\" 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. As per sub-section (2) of Section 32 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. 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 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. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated 33 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (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 of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. 34 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 15. Examining facts of the instant case in the light of the judgment of Hon'ble Apex Court in the case of Abhisar Buildwell P. Ltd. (supra), we find that ld. AO has made the addition for the completed and unabated assessment years impugned before us without placing any nexus with any incriminating material found during the course of search u/s 132 of the Act. Respectfully following the above judgment, we fail to find any infirmity in the finding of ld.CIT(A) holding that the impugned addition is uncalled for as it is not based on any incriminating material found during the course of search. 16. Even on merits of the case, we notice that M/s. TDPL have been investing into plots of land on different dates and the assessee also held certain assets and the alleged sum was received against advance for sale of land. Purpose of receiving alleged sum is stated by assessee in its submission filed before ld.CIT(A) and the same reads as under : “It is owner of various land parcels in Howrah. Assessee company is a part of Jalan Group which is engaged in real estate project, land development and industrial plotting for past few decades. Assessee company had entered into an agreement with M/s. Tower Distributors Pvt. Ltd. to sell 830 decimals of land located in Mouza-Hijlok and Tenpur Abasan, Howrah. This agreement was signed on 03.03.2015. Total consideration for the sale of land was Rs.910.8 lakhs. Copies of agreement signed on 03.03.2015, 01.02.2019, 01.02.2020 and 01.02.2021 have been submitted along with the reply. Appellant has also submitted details of date- wise money receipt from M/s. Tower Distributors Pvt. Ltd., along with the utilization of this money. Initial funds received from March, 2015 to 5th February, 2019 have been utilized for loan re- payments. Further, funds received from 16th February, 2019 to 24th July, 2019 has been utilized as mutation charges, conversion charges and compensation for land development. Appellant further submits that M/s. Tower Distributors Pvt. Ltd. was incorporated on 28.03.1995 and it is assessed to tax. The said company has a net worth of Rs.22,71,40,672/- as on 31.03.2015 and net worth of Rs.23,06,42,012/- as on 35 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 31.03.2020. The said company had last raised share capital in the financial year 2004-05. Since then, it has not raised any fresh capital. From going through the above details which have been reiterated by the assessee before both the lower authorities and not controverted by the Revenue authorities, we notice that the alleged sum received by the assessee from M/s. TDPL was in the regular course of business of purchase, sale and development of land. Assessee in order to prove the nature and source of alleged sum has to prove the Identity and creditworthiness of M/s. TDPL and genuineness of the transactions. 17. So far as the genuineness of the transactions are concerned, it is not dispute that it has been carried out for purchase of land between M/s. TDPL and the assessee. The main reason for the impugned addition alleged by ld. AO is lack of creditworthiness of M/s. TDPL. Identity of the alleged cash creditor cannot be disputed because it is a registered Private Limited Company regularly assessed to income-tax. Now coming to the part of creditworthiness, it is to be seen that whether M/s. TDPL was having sufficient funds prior to giving the alleged sum to the assessee. Ld. AO has alleged M/s. TDPL as a Shell/paper company but the same needs to be examined in the light of the financial statements of M/s. TDPL which have been filed by the ld. Counsel for the assessee in the paper book. The alleged sums have been received by M/s. TDPL during F.Y. 2014-15 and F.Y. 2018-19. Going through the balance sheet appearing at page 313 of the paper book, we notice that as on 01.04.2014 the opening balance of share capital is 36 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Rs.50.00 lakh and the accumulated Reserves and Surplus amount to Rs.22.21 crore approximately. During the F.Y. 2014-15, M/s. TDPL has neither received any share capital nor any fresh unsecured loan. So whatever assets which were held by M/s. TDPL as on 01.04.2014 were already disclosed in the preceding financial year and only the assets which were owned by M/s. TDPL as on 31.03.2014 are the nexus for the alleged sum. Thus it is an admitted fact M/s. TDPL has not received any fresh unsecured loan or fresh share capital which is normally the case of Shell/paper companies receiving unsecured loans/share application money/huge share premium. In the present case, M/s. TDPL has received no such amount. The assets as on 31.03.2014 which amount to Rs.22.76 crore included non- current investments and other current assets. We observe that during F.Y. 2014-15 certain investments in equity shares of M/s. TDPL were liquidated and the investments came down from Rs.22.74 crore to Rs.8.45 crore and other non-current assets which were merely Rs.19,470/- as on 31.03.2014 increased to Rs.14.29 crore and this increase in non-current assets included the amount given to the assessee, i.e. Rs.3.20 crore. We have further gone through the balance sheet of M/s. TDPL for subsequent years and observe that even till F.Y. 2018-19 M/s. TDPL has not received any further sum towards share capital/share premium/unsecured loan and only the investments have been liquidated and the funds have been utilized for giving advance to the assessee company. Thus, we find that M/s. TDPL was having sufficient creditworthiness as on 01.04.2014 in the form of accumulated Reserves and 37 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Surplus and Share Capital which has been utilized for giving the alleged sum to the assessee company in the regular course of its business during A.Y.2015-16 to A.Y. 2019-20. 18. We find that similar issued of section 68 of the Act came up before the Coordinate Bench in the case of M/s. Wisley Real Estate Pvt. Ltd. Vs. ITO in ITA No.55/Kol/2024 dated 06.06.2024 wherein this Tribunal on due consideration of facts and settled judicial precedents held as under : “7. We have heard the rival contentions, perused the material placed before us and also carefully gone through the decisions referred to by the ld. Counsel for the assessee. The only issue for consideration is that whether ld. CIT(Appeals) erred in confirming the addition made by ld. Assessing Officer u/s 68 of the Act at Rs.1,76,57,500/-. We observe that the assessee Company received the alleged sum against issue of 7,07,400 no. of equity shares at Rs.10/- each and charged share premium of Rs.15/- per share from the following companies:- Name of Shareholders No. of share Share capital Security Premium Total (Rs) Infinity Township(P) Ltd 360000 36,00,000/- 54,00,000/- 90,00,000/- Narantak Dealcomm Ltd 260600 26,06,000/- 39,09,000/- 65,15,000/- Shubham Buildwell (P) Ltd 86800 8,68,000/- 13,02,000/- 21,70,000/- Grand Total 70,74,000/- 1,06,11,000/- 1,76,85,000/- 8. We further notice that the impugned addition has been made under section 68 of the Act. As per this section, if any sum is found credited in the books of an assessee maintained in previous year either the assessee is unable to offer any explanation about the nature and source of such sum or if the explanation offered by him is not found to be satisfactory in the opinion of the ld. Assessing Officer, then, such sum so credited can be charged to income tax as the income of the assessee. We on examining the facts of the instant case notice that the alleged sum received from three share applicants was found to be credited. Further the assessee had furnished complete details to explain the nature and source of the alleged sum and the same has been examined by us sake of convenience, the details filed by the assessee in the Paper Book Index I, II & III are referred below: 38 sum received from three share applicants was found to be credited. Further the assessee had furnished complete details to explain the nature and source of the alleged sum and the same has been examined by us by perusing the paper books. For the sake of convenience, the details filed by the assessee in the Paper Book Index I, II & III are referred below: IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. sum received from three share applicants was found to be credited. Further the assessee had furnished complete details to explain the nature and source of the alleged sum and the same by perusing the paper books. For the sake of convenience, the details filed by the assessee in the Paper Book Index I, II & III are referred below:- 9. financial statements of the share applicant companies have been furnished along with the income tax returns alongwith details of source of funds with the share applicant companies prior to making th companies are active companies and are part of the group concern, which are mainly categorized into three, namely Shyam Group, Century Group and Infinity Group. Copy of MCA Master Data has been furnishe regularly assessed to income tax and that M/s. Narantak Dealcomm Limited has been assessed under section 153A from A.Ys. 2013 24.06.2021. Another share applicant, Private Limited has also been assessed from A.Y. 2013 2018-19 under section 153A of the Act vide order dated 04.06.2021. The third share applicant, namely M/s. Infinity Townships Private Limited has subsequently merged with I Infotech Parks Limited and has also been assessed under section 143(3) of the Act for A.Y. 2012 is also an undisputed fact that all the three share applicants have replied to notice issued u/s 133(6) of the Act an have appeared in person with two of the other share applicants before the ld. Assessing Officer for recording the statement. All these details sufficiently indicate that alleged sum has been received from group concern and no exorbitant sha been charged, which normally is one of the reasons for doubting the genuineness of the transactions. We note that the assessee company holds fixed assets from past many years. As on 31.03.2011, capital work which has further risen to Rs.3,87,24,604/ that the purpose of taking the share application money was for real estate business. We also notice that the book value of the 39 From the above details, we notice that all the audited financial statements of the share applicant companies have been furnished along with the income tax returns alongwith details of source of funds with the share applicant companies prior to making the alleged investment. We have also found that all the companies are active companies and are part of the group concern, which are mainly categorized into three, namely Shyam Group, Century Group and Infinity Group. Copy of MCA Master Data has been furnished. We also note that all the companies are regularly assessed to income tax and that M/s. Narantak Dealcomm Limited has been assessed under section 153A from A.Ys. 2013-14 to A.Y. 2018-19 vide order dated 23.06.2021 and 24.06.2021. Another share applicant, Private Limited has also been assessed from A.Y. 2013 19 under section 153A of the Act vide order dated 04.06.2021. The third share applicant, namely M/s. Infinity Townships Private Limited has subsequently merged with I Infotech Parks Limited and has also been assessed under section 143(3) of the Act for A.Y. 2012-13 vide order dated 31.03.2015. It is also an undisputed fact that all the three share applicants have replied to notice issued u/s 133(6) of the Act an have appeared in person with two of the other share applicants before the ld. Assessing Officer for recording the statement. All these details sufficiently indicate that alleged sum has been received from group concern and no exorbitant sha been charged, which normally is one of the reasons for doubting the genuineness of the transactions. We note that the assessee company holds fixed assets from past many years. As on 31.03.2011, capital work-in-progress was Rs.2,49,08,562/ which has further risen to Rs.3,87,24,604/ that the purpose of taking the share application money was for real estate business. We also notice that the book value of the IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. From the above details, we notice that all the audited financial statements of the share applicant companies have been furnished along with the income tax returns alongwith details of source of funds with the share applicant companies prior to e alleged investment. We have also found that all the companies are active companies and are part of the group concern, which are mainly categorized into three, namely Shyam Group, Century Group and Infinity Group. Copy of MCA Master d. We also note that all the companies are regularly assessed to income tax and that M/s. Narantak Dealcomm Limited has been assessed under section 153A from 19 vide order dated 23.06.2021 and 24.06.2021. Another share applicant, namely Subham Buildwell Private Limited has also been assessed from A.Y. 2013-14 to 19 under section 153A of the Act vide order dated 04.06.2021. The third share applicant, namely M/s. Infinity Townships Private Limited has subsequently merged with Infinity Infotech Parks Limited and has also been assessed under section 13 vide order dated 31.03.2015. It is also an undisputed fact that all the three share applicants have replied to notice issued u/s 133(6) of the Act and the Directors have appeared in person with two of the other share applicants before the ld. Assessing Officer for recording the statement. All these details sufficiently indicate that alleged sum has been received from group concern and no exorbitant share premium has been charged, which normally is one of the reasons for doubting the genuineness of the transactions. We note that the assessee- company holds fixed assets from past many years. As on progress was Rs.2,49,08,562/-, which has further risen to Rs.3,87,24,604/-. This fact indicates that the purpose of taking the share application money was for real estate business. We also notice that the book value of the 40 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. equity share as on 31.03.2011 was around Rs.15/- and the same has been computed by dividing the share capital reserve as on 31.03.2011 by the number of shares issued upto 31.03.2011. Considering the book value, we note that the assessee had not charged heavy share premium and one has to also consider that fair market value of the land/project is normally much higher than the cost appearing in the books as per historical cost method. 10. All the above details and facts discussed above remain uncontroverted by the lower authorities and by the ld. D.R. No discrepancy has been noticed in these details nor any error has been pointed out. The ld. CIT(Appeals) was required to examine the issue under section 68 of the Act, but called for copy of the land deed, which was acquired in the preceding year, but ld. CIT(Appeals) has not made any adverse comments on the financial information of the alleged share application, the fund having been received from group concern. It thus shows that the assessee had successfully explained the nature and source of the alleged sum and has proved the identity and creditworthiness of the share applicants and genuineness of the transactions. Our view is supported by the decision of this Tribunal in the case of ITO -vs.- Indus Reality Pvt. Limited in ITA No. 666/KOL/2023 dated 08.11.2023, wherein Tribunal’s finding that the share application money was received from group entities of the sister concern having sufficient creditworthiness and dismissed the Revenue’s appeal and confirmed the action of the ld. CIT(Appeals) deleting addition under section 68 of the Act. The relevant finding of this Tribunal reads as under:- “6. With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of the record would indicate that four Group Companies, who have sufficient net worth has made the investment with the assessee. The following table will depict the position of all funds possessed by the subscribers, vis-a-vis investment made with the assessee:- Sl. No. Particulars Amount (Rs.) Amount Invested (Rs.) 1 Citizen Securities Pvt. Ltd. 3,91,29,175 25,00,000 2 De-Con Projects Pvt. Ltd. 6,89,96,701 50,00,000 3 Software Conglomerate Pvt. Ltd. 9,15,11,941 50,00,000 4 Quickpay Suppliers Pvt. Ltd. 2,77,71,945 1,75,00.000 7. During the course of hearing, it was pointed out that all these four companies are Group Company of the assessee. They filed positive return income every year 41 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. though small in number. For instance first group Concern is Citizen Securities Pvt. Ltd., who has net worth of Rs.3.91 crores and this Concern invested only Rs.25 lakhs, i.e. less than 10% of its own net worth. The Directors of this Company appeared before the ld. Assessing Officer and deposed that the Company has made investment with the assessee-company and also paid share premium. Similarly the second company is De-Con Projects Pvt. Limited. It invested Rs.50 lakhs out of its net worth of Rs.6.89 crores. This company has filed a return declaring profit of Rs.3,92,065/-. The next one is Software Conglomerate Pvt. Limited. It has also a net worth of Rs.2.63 crores and made investment of Rs.50 lakhs and the last one is Quickpay Suppliers Pvt. Limited, who has net worth of Rs.2.77 crores and made investment of Rs.1.75 crores. According to the assessee, this company had earned a profit of Rs.3.99 crores during the instant year and had enough funds to make such heavy investment. The assessee has filed all these documents. The only area of difference between the assessee and the ld. Assessing Officer is as to why the subscriber will invest in a Company, who is making losses. To this, ld. CIT(Appeals) has also held that it is for the businessman to decide how it wants to use its funds. The subscribers have not borrowed the money for making investment with the assessee-company. The group concern might have decided to start some activity on substantial basis in the assessee-company, therefore, it could be a support from the group concern. The ld. 1st Appellate Authority has also examined whether, this excess premium paid by the subscribers is to be construed as a gift to the assessee within the meaning of section 56(2)(vib) of the Income Tax Act but held that this provision is applicable from A.Y. 2013-14 and not in A.Y. 2012-13. 8. On due consideration of the order of ld. CIT(Appeals), we are of the view that it does not call for any interference at our end. Accordingly, the appeal of the Revenue is dismissed on merit”. 11. We further place reliance on the decision of this Tribunal in the case of Dharmvir Merchandise (P) Ltd. -vs.- ITO (supra), wherein addition under section 68 was deleted by observing that the assessee has proved the genuineness of the transaction and creditworthiness of share applicants by observing as follows:- “9. We have heard rival contentions and perused the records placed before us. Addition u/s 68 of the Act for unexplained share capital and share premium of Rs. 1.40 Cr is in challenge before us. We notice that the assessee company issued fresh share capital during the year of face value of Rs. 10/- and premium of Rs. 240/- per share and received 1.40 Cr from following three companies: 42 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. Sr. No. Name of the share applicant Amount received 1. Everlike Projects Pvt Ltd 50,00,000/- 2. Mahashakti Vintrade Pvt Ltd 50,00,000/- 3. Satyam Plywood Merchandise Pvt Ltd 40,00,000/- TOTAL 1,40,00,000 10. After the case being selected for scrutiny, ld. AO asked the assessee to explain the source of above referred sum of share capital and share application money. In response, the assessee submitted the following documents: i. Party Wise details of share capital raised during the year, ii. Form 2, Form 5 filed with ROC, iii. Memorandum and Article of Association, iv. Bank Statement for the year, v. Share Application Form, vi. Form 18 in support of registered office address of the company, vii. Audited accounts for the year, viii. Relevant Bank Statement for the year, ix. Form 18 in support of registered office address of these companies. 11. Thereafter, summons were issued to the Directors of the share subscriber companies as well as the Directors of the assessee company which were duly served upon the respective persons and the details as called for were filed which included the following: i. Photo Identity and Address Proof, ii. Narration of all debit and credit entries in relevant Bank statements, iii. Copies of all relevant ROC returns, iv. Sources of funds and utilisation of funds, v. Evidence of creditworthiness along with Income Tax Returns filed and vi. Copies of Audited Accounts and Tax Audit Report for the relevant AY. 12. We further, notice that ld. AO has not pointed out any defect and not questioned the correctness of any of the documents filed by the assessee company, share subscriber companies as well as the Directors. The only ground for making the addition is that the Directors of the assessee company as well as the investor companies have not appeared personally before ld. AO in compliance to the summons issued u/s 131 of the Act 43 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. and applying the decision of this Tribunal in the case of Bisakha Sales Pvt. Ltd. (supra). 13. So far as reliance placed by ld. AO on the decision of this Tribunal in the case of Bisakha Sales Pvt. Ltd. (supra) is concerned, we fail to find any merit as the facts of Bisakha Sales Pvt. Ltd. (supra) are distinguishable from the facts of the present case. Firstly for the reason that the case of Bisakha Sales Pvt. Ltd. (supra) was in connection of the revisionary order passed by ld. CIT(A) u/s 263 of the Act where it was alleged that ld. AO has not made proper enquiries with regard to the transaction of share application money received by the company, which however, is not the fact of the instant case where the issue relates to assessment proceedings carried out u/s 143(3) of the Act and complete and detailed enquiry has been conducted by ld. AO. In the assessment order, ld. AO has not brought any adverse material which could have remotely suggested that the unaccounted income of the assessee was brought in disguise of the share capital. Therefore, the decision of Bisakha Sales Pvt. Ltd. (supra) is not applicable on the present case. 14. So far as merits of the case are concerned, we find that the assessee has successfully discharged its onus by filing complete details of the share subscriber companies including their bank statement, audited financial statements, Form no. 18 in support of registered office address, source and utilization of funds, copies of ITRs, copies of all relevant company returns. Even the photo identity, address proof of the Directors of the assessee company and the subscriber companies have been filed directly by these Directors to ld. AO. On the basis of these facts undoubtedly the assessee has successfully discharged the onus which lay upon it by producing all the evidences for proving the identity and creditworthiness of the investors and the genuineness of the transaction. Merely non-appearance of the Directors cannot be a basis for treating the share application money as unexplained or non-genuine. We find support from the judgment of Hon'ble Gujarat High Court in the case of Rohini Builders (supra) relying on the judgment of Hon'ble Apex Court in the case of Orissa Corporation Pvt. Ltd. (supra) (relevant extract: “Merely because summons issued to some of the creditors could not be served or they failed to attend before the Assessing Officer, cannot be a ground to treat the loans taken by the assessee from those creditors as non-genuine in view of the principles laid down by the Supreme Court in the case of Orissa Corporation (1986) 159 ITR 78. In 44 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. the said decision the Supreme Court has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non- compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw and adverse inference against the assessee. in the case of six creditors who appeared before the Assessing Officer and whose statements were recorded by the Assessing Officer, they have admitted having advanced loans to the assessee by account payee cheques and in case the Assessing Officer was not satisfied with the cash amount deposited by those creditors in their bank accounts, the proper course would have been to make assessments in the cases of those creditors by treating the cash deposits in their bank accounts as unexplained investments of those creditors under section 69.” 15. Our view is supported by Tradelink Carrying (P.) Ltd. (supra) wherein the Hon’ble jurisdictional ITAT held that: “34. In this case on hand, the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, thereafter the onus shifted to AO to disprove the documents furnished by assessee cannot be brushed aside by the AO to draw adverse view cannot be countenanced. In the absence of any investigation, much less gathering of evidence by the, Assessing Officer, we hold that an addition cannot be sustained merely based on inferences drawn by circumstance. Applying the propositions laid down in these case laws to the facts of this case, we are inclined to allow the appeal of the assessee. 35. To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share 45 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. applicants. The PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO is based on conjectures and surmises cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 of the Act. Therefore we delete the addition of Rs 5,60,000/- and consequently the appeal of assessee is allowed. 36. In the result, the appeal of the assessee is allowed.” 16. Similar view also taken in the case of Satyam Smertex (P.) Ltd vs DCIT reported in [2020] 117 taxmann.com (Kolkata - Trib.) pronounced on 29-05-2020 where the Hon’ble jurisdictional ITAT held that: “30. To sum up section 68 of the Act provides that if any sum found credited in the year in respect of which the assessee fails to explain the nature and source, it shall be assessed as its undisclosed income. In the facts of the present case, both the nature & source of the share application received was fully explained by the assessee. The assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. the PAN details, bank account statements, audited financial statements and Income Tax acknowledgments were placed on AO's record, including that of the directors and share holders of share subscribing entities. Accordingly all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. Without doing so, the addition made by the AO and confirmed by Ld. CIT(A) are based on conjectures and surmises, so their impugned action cannot be justified. In the facts and circumstances of the case as discussed above, no addition was warranted under Section 68 of the Act. Therefore, we do allow the appeal of assessee and direct deletion of addition of Rs 16 cr under section 68 of the Act.” 46 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 17. From the above decision, we note that it has been held again and again by the jurisdictional ITAT, Kolkata that in a case, where the assessee had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants, the onus shifts on ld. AO to disprove the documents furnished by assessee so as to draw adverse view and in the absence of any investigation, much less gathering of evidence by ld. AO, additions cannot be sustained merely based on inferences drawn by circumstance or made on surmises and conjectures. 18. Therefore, after going through the various details and documents placed before us, we find that assessee has successfully discharged primary onus casted upon it to explain the source of alleged share capital and share premium. Ld. AO did not find any fault or any shortcoming in the compliances made by the appellant company. It is also an evident fact that the only basis for making the alleged addition by ld. AO was non- appearance of the Directors of the share allotted company but as claimed by ld. Counsel for the assessee, the time allowed for compliance was too short and the assessee filed all the confirmations in respect of such share subscribers which were not doubted by ld. AO. Facts are brought to our notice out of the eight shareholders five have been assessed for the same assessment year u/s 143(3) of the Act and complete details of their financials and bank transactions have been examined by ld. AO in the scrutiny proceedings. This is also an admitted fact that each of the shareholders were duly served notice u/s 133(6) of the Act which is sufficient to prove the identity of such shareholders. As far as the genuineness of the transaction is concerned, the same have taken place through banking channel which is traceable from the origin to the destination of such payments and further confirmed from the documents furnished before us. All these transactions are duly recorded in the respective balance sheets of the shareholder companies. Creditworthiness of the transaction is also proved from the fact that all the shareholder companies were having more than sufficient share capital and reserve and surplus fund for giving share application money. Even otherwise ld. AO has not made the addition for charging of higher share premium and has made the addition of unexplained cash credit but still charging of share premium is a commercial decision and the same can be challenged only with sufficient documentary evidence. It thus brings to a conclusion that since the assessee filed complete details of identity and creditworthiness of the share subscribers and genuineness of the transaction before ld. AO, the onus shifted to ld. AO to disprove the 47 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. material placed before him and without doing so the additions made by ld. AO are based on conjectures and surmises and the impugned additions cannot be justified and therefore, the impugned action of ld. AO cannot be held to be justified. 19. Our view is further supported by following judicial pronouncements: “i) CIT vs. Gagandeep Infrastructure (P) Ltd. 80 taxmann.com 272 (Bombay) wherein it was held by High Court that the proviso to section 68 of the Act has been introduced by the Finance Act 2012 with effect from 1st April, 2013. Thus it would be effective only from the Assessment Year 2013-14 onwards and not for the subject Assessment Year. In fact, before the Tribunal, it was not even the case of the Revenue that Section 68 of the Act as in force during the subject years has to be read/understood as though the proviso added subsequently effective only from 1st April, 2013 was its normal meaning. The Parliament did not introduce to proviso to Section 68 of the Act with retrospective effect nor does the proviso so introduced states that it was introduced \"for removal of doubts\" or that it is \"declaratory\". Therefore it is not open to give it retrospective effect, by proceeding on the basis that the addition of the proviso to Section 68 of the Act is immaterial and does not change the interpretation of Section 68 of the Act both before and after the adding of the proviso. ii) PCIT vs. Chain House International (P) Ltd. 98 taxmann.com 47 wherein Madhya Pradesh High Court held that “The question raised by the revenue in regard to issuing the share at a premium is purely a question of fact. It is a prerogative of the Board of Directors of a company to decide the premium amount and it is the wisdom of shareholder whether they want to subscribe to shares at such a premium or not and moreover the section 68 does not envisages any law on share premium it only requirement is to identity of the investors, the genuineness of the transaction and the creditworthiness of the share applicants which same has been discharged by the respondent authority and the same has been accepted by the appellate authorities thus, the same cannot be reconsidered in these appeals as it is a pure question of fact.” SLP preferred by revenue was dismissed by Hon’ble Supreme Court and the same is reported in 103 taxmann.com 435(SC). iii) CIT vs. Kamdhenu Steel & Alloys Limited [ITA No.972 of 2009] dated 23.12.2011 wherein the Delhi High Court in a batch of 11 appeals was required to adjudicate on 48 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. the very issue of addition made by the A.O u/s 68 in respect of share application monies received by the assessees as alleged unexplained cash credit. In all these cases, the Department had alleged that the share application monies were received from persons who were ‘entry operators’ and the monies received by way of share application was nothing but was routing of unaccounted money of assessee in the form of subscription to share capital. However, in the assessments made the A.Os had not brought on record any material or evidence to substantiate such finding. Accordingly, on appeal the appellate authorities had deleted the additions made u/s 68 of the Act. iv) CIT vs. Orissa Corpn (P) Ltd. 159 ITR 78 where the Court held that “In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessees. Their index number was in the file of the Revenue. The Revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advance the alleged loans. There was no effort made to pursue the so called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises.” 20. We, therefore, respectfully following the judgments referred herein above by the Hon’ble Courts and also considering the facts and circumstances of the case, are of the considered view that since the assessee has placed sufficient documents and materials on record to prove the identity and creditworthiness of the shareholders and the genuineness of the transaction of receiving share capital and share premium, invoking the provisions of Section 68 of the Act was not justified in the instant case. We, therefore, reverse the finding of the CIT(A) and delete the addition of Rs. Rs.1.40 Cr made u/s 68 of the Act and allow all the grounds raised by the assessee. 21. In the result, the appeal filed by the assessee is allowed”. 49 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. 12. In the light of the ratio laid down by this Tribunal as well as reliance having been placed on various judgments of Hon’ble Courts in the said decisions and on due consideration of the facts that the alleged sum has been received from group/sister concerns only for the purpose of real estate project for which land was acquired in the preceding years and capital work-in-progress was going on and that the assessee having successfully proved the nature and source of the alleged sum by proving genuineness and creditworthiness of the share applicants and genuineness of the transactions. All the share applicants have duly replied to the notices issued under section 133(6) and majority of them have appeared before the ld. Assessing Officer for recording the statement under section 131 and that all the share applicants are regularly assessed to tax and have also faced scrutiny proceedings and as per MCA Matter Data as on date, all alleged share applicants are active companies and that the shares have been issued at fair market value of the equity shares and that no excess share premium has been charged and in totality these facts are sufficient for us to hold that ld. CIT(Appeals) erred in confirming the action of the ld. Assessing Officer making the addition under section 68 of the Act. We thus reverse the finding of ld. CIT(Appeals) and delete the addition of Rs.1,76,87,500/- made under section 68 of the Act and allow Ground No. 1 raised by the assessee.” 19. On examination of the facts of the case and in the light of decisions referred (supra), we find that assessee has firstly filed all necessary evidences to explain the Identity, Creditworthiness of cash creditor namely M/s. TDPL and genuineness of transactions and also it has been an admitted fact that from the year in which the assessee received the alleged sum for the first time from the alleged cash creditor till A.Y. 2019-20 no fresh share capital/share premium/unsecured loan has been received by the alleged cash creditor from any other party and the source of the sum received by the assessee was from available funds with the alleged cash creditor. Therefore even on merits also, no addition u/s.68 of the Act was called for. To conclude, since the assessee has explained the nature and source of the alleged sum by way of proving the creditworthiness of the cash creditor and the genuineness of the transactions to our 50 IT(SS)A Nos.110 and 111/Kol/2023 Ontrust Suppliers Pvt. Ltd. satisfaction and Revenue having failed to find any discrepancy in those details filed by the assessee, we find that the assessee and controvert the facts narrated hereinabove, we find that the assessee has successfully discharged its primary onus casted upon it under the provisions of section 68 of the Act. We are therefore not inclined to interfere in the reasoned finding by the ld.CIT(A) given on merits of the case. Thus all the grounds of appeal raised by the Revenue for both the years under appeal are dismissed. 20. In the result, both the appeals of Revenue are dismissed. Order pronounced on this 18th day of February, 2025. Sd/- Sd/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT MEMBER पुणे/Pune; \u0001दनांक / Dated : 18th February, 2025 Satish आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant. 2. \b\tयथ\u0007 / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, “(A)” ब\u0010च, Kolkata/ DR, ITAT, “(A)” Bench, Kolkata. 5. गाड\u0014 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar, ITAT, Kolkata "