HEMENDRA RAMJI VIRA ,MUMBAI V. DCIT CC 4(1), MUMBAI

ITA 6405/MUM/2024

AI Insights

The case involves multiple appeals by Hemendra Ramji Vira against the orders of the Commissioner of Income Tax (Appeals), Mumbai, concerning the assessment years 2011-12 and 2013-14 to 2018-19. The primary legal contention revolved around the validity of the reassessment proceedings initiated under section 148 of the Income Tax Act by an officer who had ceased to have jurisdiction over the assessee's case following a transfer order under section 127(2) of the Act. The tribunal examined the procedural and substantive validity of the reassessment and the consequent additions made to the assessee's income. The tribunal's decision was influenced by the lack of any incriminating material found during the search operations and the procedural lapses in the reassessment process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669172 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Other Referred Cases: DCIT vs Kalinga Institute of Industrial Technology, Himalaya Drug Company v DCIT, Bhagyaarna Gems & Jewellery (P.) Ltd vs ACIT, Capstone Securities Analysis (P) Ltd vs DCIT, Fiat India Automobiles Ltd vs Vijender Singh, Peter Vaz vs CIT, Ramesh D. Patel vs CIT, Nopany& Sons vs PCIT, Rajeshkumar Ramesh chandra Shah vs DCIT, PCIT vs Abhisar Buildwell (P) Ltd, PCIT vs Jay Ambey Aromatics, PCIT vs Oxygen Business Park (P)Ltd, Saksham Commodities Ltd vs ITO, PCIT vs Meera Gupta, PCIT vs Kaushik Devjibhai Patel, PCIT vs Pavitra Realcom Pvt Ltd, PCIT vs Jay Ace Technologies Ltd, PCIT vs Sinhgad Technical Education Society, PCIT vs Vikram Sujitkumar Bhatia
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RITESH MISRA
• Assessee Lawyers: VINOD KUMAR BINDAL
• Keywords: Opportunity of being heard; Invalid notice; Reassessment proceedings; Unexplained investment; Document seized; Documents seized; Bonafide belief; Retraction; Reopening of assessment; Capital Gains; Search and seizure; Accommodation entries; Block assessment; Source of fund; Assessment record; Notional interest; Competent authority; Charitable institution; Procedural lapse; Bogus
• Section: 147; 148; 143(3); 142(1); 132; 153A; 68; 131; 69; 69C; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.6405/Mum/2024 (Assessment Year :2011-12) ITA No.2467/Mum/2025 to 2472/Mum/2025 (Assessment Year :2013-14 to 2018-19) Hemendra Ramji Vira 1201, Kailash Palace Uppashraya Lane Ghatkopar East Mumbai-400 077 Vs. DCIT CC 4(1) Mumbai – 400 051 PAN/GIR No.AABPV6781A (Appellant) .. (Respondent) Assessee by Shri Vinod Kumar Bindal a/w Shri Satish Gupta Revenue by Shri Ritesh Misra, CIT DR Date of Hearing 12/06/2025 Date of Pronouncement 26/06/2025 आदेश / O R D E R PER BENCH: The aforesaid appeals have been filed by the assessee, against separate impugned orders of the learned Commissioner of Income Tax (Appeals), Mumbai (ld CIT(A) for short), pertaining to assessment years (AYs) 2011-12, 2013-14 to 2018-19. Since, the issues involved are common for all the assessment years; a common appellate order has been passed for all the assessment ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 2 years. There was search and seizure action u/s 132 of the Act on the premises of the assessee on 07/10/2017 as per the panchnama in the name of the assessee ‗Mr. Hemendra Ramji Vira placed‘ on record in the Paper Book. The additions made in all the years which are under challenge in these 7 appeals are as under: 2. In AY 2011-12 assessment order passed u/s 147/143(3) of the Act on 30/12/2018 by the DCIT Central Circle 4(1) Mumbai which are similar to the additions made for the three AYs 2016- 17 to 2018-19 passed u/s 153A of the Act vide orders dated 31/12/2019: Reasons of additions Amount (Rs) Cash loan to Nilesh Bharani u/s 69 Notional interest earned u/s 56 Rs 25,00,000/- Rs 66,00,000/- 3. In AYs 2013-14 to 2015-16 assessment orders passed u/s 153A/143(3) of the Act on 31/12/2019 by the DCIT Central Circle 4(1) Mumbai:- AY Reasons of additions Amount (Rs.) 2013-14 Bogus LTCG u/s 68 – scrip Confidence Finance & Trading Ltd Notional Commission u/s 69C 5,11,42,500/- 15,34,275/- 2014-15 Bogus LTCG u/s 68 – scrip 1,25,22,500/- ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 3 Confidence Finance & Trading Ltd Notional Commission u/s 69C 3,75,675/- 2015-16 Bogus LTCG u/s 68 – scrip Greencrest Financial Services Ltd Notional Commission u/s 69C 3,30,86,741/- 9,92,602/- AYs 2016-17 to 2018-19 AY Reasons of Addition Amount (Rs.) 2016-17 Cash loan to Nilesh Bharani u/s 69 Notional interest earned u/s 56 2,05,00,000/- 12,05,425/- 2017-18 Cash loan to Nilesh Bharani u/s 69 Notional interest earned u/s 56 27,29,00,000/- 2,69,33,710/- 2018-19 Notional interest earned u/s 56 3,52,08,000/- ITA No. 6405/Mum/2024 for the AY 2011-12 4. The assessee has raised multiple grounds in the memorandum of appeal. However, the core issue arising for consideration, going to the root of the assessment proceedings for this assessment year, is regarding the validity of reopening of assessment u/s 147 of the Act on the basis of a notice issued u/s 148 of the Act on 29/03/2018 after taking approval from the PCIT, 27 Mumbai, when the ld.AO had already ceased to have jurisdiction over the case; in view of an assessment jurisdiction transfer order passed u/s 127(2) of the Act on 17/01/2018 w.e.f. the date of the said order only i.e. 17/01/2018. The assessee has ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 4 contended that thus, the consequent assessment order passed based on the said notice u/s 148 of the Act issued on 29/03/2018 by the ld.AO who was lacking competent jurisdiction for reopening the assessment for this assessment year is unsustainable, bad in law and void ab initio and which must be quashed at the threshold cancelling the entire income- tax demand so raised. 5. As per admission by the assessee that he did not object to the notice issued u/s 148 of the Act by the ACIT Circle 27(1) Mumbai on 29/03/2018, who was under the territorial jurisdictional PCIT 27 Mumbai then, though the assessment jurisdiction on the assessee had already been transferred by the PCIT 27 Mumbai from the ACIT Circle 27(1) Mumbai, subordinate to him, to the DCIT Central Circle 4(1), Central Range 4 in the charge of the PCIT Central 2 Mumbai vide an assessment jurisdiction transfer order passed u/s 127(2) of the Act on 17/01/2018 with effect from the said very date placed at paper book page no. 8 vol. 1. In regard thereto, the assessee categorically submitted that he was never served with a copy of the assessment jurisdiction transfer order passed on 17/01/2018 u/s 127(2) of the Act in his case by the PCIT-27, Mumbai after the income-tax search u/s 132(1) in his premises on 07/10/2017. Thus, being unaware of the said fact, the notice u/s 148 of the Act issued by the ACIT, Circle- 27(1), Mumbai on 29/03/2018 (post the date of the transfer order u/s 127(2) on 17/01/2018) was complied with by the assessee by filing the return of income on 04/04/2018 through ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 5 the online portal of the income-tax department as is mentioned in para 2 of the assessment order in this appeal. Thereafter, the first notice u/s 143(2) of the Act for completing the reassessment for this assessment year was issued by the AO, Circle 4(1), Mumbai on 20/08/2018 and the first notice u/s 142(1) was also issued by the DCIT Central Circle 4(1) Mumbai as is mentioned in para 2 of the relevant assessment order. The said notice was also responded by the assessee on 06/09/2018 to the DCIT Central Circle 4(1) Mumbai. 6. Mr Vinod Bindal, the ld. Counsel of the assessee, submitted that though these facts are very much mentioned in the assessment order but herein the ld. AO deliberately avoided to mention at all the vital facts that the assessment jurisdiction over the case of the assessee was transferred to the ld. AO, Central Circle-4(1), Mumbai vide an assessment jurisdiction transfer order u/s 127(2) dated 17/01/2018 by the PCIT 27 Mumbai from the ACIT Circle 27(1) Mumbai and the notice u/s 148 on 29/03/20218 initiating these proceedings was issued by the ACIT Circle 27(1) Mumbai after the said transfer order became effective, since the ld. AO was well aware that the said notice issued on 29/01/2018 was void ab initio but the assessee was not at all aware of the said fact. The ld. DCIT Central Circle 4(1) Mumbai never issued any notice u/s 148 of the Act for the above assessment year. Thus, the reassessment proceedings are the result of the only notice u/s 148 dated 29/03/2018 ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 6 7. The ld. counsel also submitted that the assessee was under a bonafide belief, in absence of service of the said order u/s 127(2) on him that the assessment jurisdiction over the assessee must have been transferred after issuing the notice u/s 148 as the assessee could not have any reason at all to presume that the said notice was illegally issued without jurisdiction of the case with the said AO Circle 27(1) Mumbai. The assessee was further informed by his then counsel that after an income-tax search on assessees, all their cases are transferred to the Central Circles for assessments of incomes and therefore, the requisite compliances were made before the AO Central Circle under the bonafide belief that the revenue officer must have acted as per law, at least on the jurisdictional issues of issuing notice u/s 148 of the Act, having the authority of assessment of income of the assessee. 8.The ld. Counsel further submitted that however, after receipt of the assessment order dated 30/12/2018 by the assessee on 31/12/2018, the assessee contacted another chartered accountant/ counsel for filing the appeal before the CIT(A), and the counsel, who was also representing the other 4 assessees mentioned in the very said assessment transfer jurisdiction order dated 17/01/2018, informed the assessee that the assessment jurisdiction over him had already been transferred on 17/01/2018 by the PCIT 27, Mumbai to the DCIT Central Circle 4(1) Mumbai before issuing the impugned notice 29/03/2018 by the ACIT Circle 27(1) Mumbai and the said Chartered ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 7 Accountants firm had a copy of the said assessment jurisdiction transfer order dated 17/01/2018 having been procured by them from the department in the case of one of those 4 assessees. Therefore, before the ld.CIT (A), the assessee took these grounds of appeal categorically as grounds of appeal no. 1 and 2 reproduced in para no. 3, page no. 3 of the CIT(A) order dated 13/11/2024. Thus, the ld. Counsel also stated that though not material as per law because what is illegal at the threshold, cannot at all be validated by compliance thereto whether deliberately or in ignorance of the facts / law, yet there was a bonafide reason for the assessee due to which the assessee could not object about the jurisdictional illegality of the notice issued u/s 148 of the Act before the AO. 9. The assessee categorically submitted that it is not a case where he has objected the jurisdiction of the ld.AO u/s 120 r.w.s. 124 of the Act but it is a case where the notice issued u/s 148 of the Act was issued by an ld.AO who did not have any assessment jurisdiction over the assessee as the same had already been transferred specifically in terms of the instruction no. 299/14/2013-DIR(Inv. III)- 605 dated 11/02/2013 issued by the Board that all search assessment must be assessed by the Central Circle charges. Therefore, the territorial jurisdiction specified u/s 120 of the Act with the ACIT Circle 27(1) Mumbai stood superseded by the specific directions as above and therefore, the consequent assessment jurisdiction transfer order u/s 127(2) of the Act was passed on 17/01/2018 before issuing ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 8 the notice issued u/s 148 of the Act on 29/03/2018 by the erstwhile AO who had already been divested with assessment jurisdiction on the assessee. 10. The ld. Counsel referred to the section 127 which is reproduced below: Power to transfer cases 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (a) where the Principal Directors General or] Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in agreement, then the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner from whose jurisdiction the case is to be transferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, pass the order; (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 9 (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or As- sessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation.- In section 120 and this section, the word “case”, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 11. The ld. Counsel stated that the above Explanation clearly shows that after transfer of the assessment jurisdiction u/s 127 of the Act from one AO to the another AO, all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction Commissioner as the Board may, by notification in the Official Gazette, authorise in this behalf. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 10 in respect of any year stands transferred to the new AO from the earlier AO. Thus, the Explanation has set at rest all such apprehensions in an unambiguously and clearly worded law. THUS, AS PER THE LAW AS ABOVE, THE ERSTWHILE AO (ACIT CIRCLE 27(1)) COULD IN NO MANNER AT ALL TAKE ANY PROCEEDINGS IN THE CASE OF THE ASSESSEE FOR ANY ASSESSMENT YEAR POST 17/01/2018 WHEN THE ASSESSMENT JURISDICTION OVER THE ASSESSEE WAS TRANSFERRED FROM THE ACIT CIRCLE 27(1) MUMBAI BY THE JURISDICTIONAL PCIT 27 MUMBAI TO THE DCIT CENTRAL CIRCLE 4(1) MUMBAI. 12. Thus, as per the ld. Counsel there could be no controversy at all to appreciate the jurisdiction of a particular ld.AO who could issue the said notice on 29/03/2018 and which was only and only the DCIT Central Circle 4(1) Mumbai and in no manner the ACIT Circle 27(1) Mumbai. 13. The Ld. Counsel also submitted that the revenue may rely on the judgment of DCIT vs Kalinga Institute of Industrial Technology(2023) 151 taxmann.com 434 (SC) dated 01/05/2023, and he submitted on the same that there, the dispute was not about the legality of the notice u/s 148 per se being the root cause to assume jurisdiction to reopen the completed assessment as in the case of the assessee but was whether the assessee being a charitable institution and a registered incorporated company was to be assessed to income ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 11 by an AO who held charge on corporate assessees or by the AO (Exemption) holding charge on charitable institutions who are assessed u/s 11 to 13. In the said case the Hon’ble Orrisa High Court (2023) 151 taxmann.com 433 (Orissa) dated 06/03/2019 held that since the jurisdiction was with the AO (Exemption) on the basis of an affidavit filed by the revenue only, the notice issued u/s 143(2) of the Act by the ld.AO Corporate Circle was without jurisdiction but also granted permission to the Revenue to issue appropriate notice to the petitioner in accordance with the law as at the relevant time of passing the order by the High Court on 06/03/2019 for the AY 2014-15, assessment completed on 30/12/2016, the Revenue had time to take action of assessment. It is important to appreciate that by virtue of the incorporated structure and nature of activities of the said assessee, both the respective ld.AOs could assess the assessee and the assessee had no reason to object during the assessment proceedings as such. It is important to appreciate that in Kalinga (supra), no order at all was passed u/s 127 of the Act by the Competent Authority and there was no discussion, rather could not at all be on the same. 14. He further submitted that, thus, it is clear that the applicability of the section 124 including making objections therein within one month thereof is only in respect of the jurisdiction specified u/s 120 of the Act and not in respect any assessment jurisdiction over an assessee after his assessment jurisdiction was transferred by an order passed u/s 127 of the ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 12 Act. There is no provision u/s 127 of the Act to file an objection where the jurisdiction has already been transferred. However, there is a provision of hearing when the assessment jurisdiction is being transferred out of city to some other city, and then a hearing must be granted by the PCIT before passing the assessment jurisdiction transfer order u/s 127(2) of the Act. In case, the same was not granted by the PCIT, then the only remedy with the assessee is to challenge the same in a Writ Petition before the jurisdictional High Court. The ld. Counsel Submitted that here, the assessee has not at all been objecting the assessment jurisdiction with any particular AO either in Mumbai or in Navi Mumbai but to the legality of the impugned notice issued u/s 148 of the Act on 29/03/2018 by an AO who did not at all have any authority as per the legal mandate by the Explanation u/s 127 as the assessment jurisdiction on the assessee had already been validly and lawfully transferred to the Central Circle in terms of the CBDT instructions and no objection at all has been raised by the assessee to the same before any appellate authority. 15.In support of the contention of assessee of an illegal and void ab initio notice issued u/s 148 of the Act by an AO Circle 27(1) Mumbai on 29/03/2018 who did not at all have any jurisdiction over the assessee as on the said date having been divested off by an order dated 17/01/2018 by the PCIT 27 Mumbai, the assessee has relied on the following judgments besides many others as are mentioned in the order of the CIT(A) with a prayer ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 13 to quash the assessment order as illegal based on a void ab initio notice issued u/s 148 of the Act by an AO who was not vested with the jurisdiction over the assessee as on the date of issue of the notice on 29/03/2018: (i) Himalaya Drug Company v DCIT [2024] 169 taxmann.com 243 (Kar.) and SLP of the revenue (2024) 169 taxmann.com 244 (SC)dismissed dated 12/11/2024 a, date subsequent to the date (01/05/2023) of Kalinga (supra)judgment where the High Court held: “Thus, the undisputed facts are that the assessee's case was transferred from ACIT, Circle - 6(1), Bengaluru to DCIT, Central Circle, Bengaluru on 20.07.2009, as per the order passed under Section 127(2) dated 20.07.2009; notices under Section 153C for the assessment years under consideration were issued by the DCIT, Central Circle, Bengaluru on 11.05.2009 (earlier than the date of transfer order); and actual date of transfer of files from ACIT is 19.08.2009. Thus, it is ex-facie apparent that the notices u/s 153C were issued prior to transfer of case and jurisdiction conferred on the DCIT.” 16. Thus, it is well settled by now by the Hon‘ble Apex Court that any order passed without jurisdiction is invalid. (ii) Bhagyaarna Gems & Jewellery (P.) Ltd[2025] 171 taxmann.com 689 (Raipur -Trib.) [DoD: 31-01-2025]and same is the legal ratio in Mir Zardari Qureshi [2023] 151 taxmann.com 408 (Raipur - Trib.)where the order of the Hon‘ble Apex Court in Kalinga (supra) was also considered and held as below: ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 14 38. On a careful perusal of Section 124 of the Act, it transpires that the same deals with the issue of \"territorial jurisdiction\" of an Assessing Officer. Ostensibly, sub-section (1) of Section 124 contemplates vesting with the A.O jurisdiction over a specified area by virtue of any direction or order issued under sub-section (1) and sub-section (2) of Section 120 of the Act. On the other hand, sub-section (2) of Section 124 contemplates the manner in which any controversy as regards the territorial jurisdiction of an A.O is to be resolved. Apropos, sub-section (3) of Section 124 of the Act, the same places an embargo upon an assessee to call in question the jurisdiction of the A.O where he had initially not raised such objection within a period of one month from the date on which he was served with a notice under sub-section (1) of Section 142 or sub-section (2) of Section 143 or Section 148 or sub-section (1) of Section 153A or sub-section (2) of Section 153C. In sum and substance, the obligation cast upon an assessee to call in question the jurisdiction of the A.O as per the mandate of subsection (3) of Section 124 is confined to a case where the assessee objects to the assumption of jurisdiction by the A.O, and not otherwise. 39. At this stage, we may herein refer to certain judicial pronouncements that had in the past held the field on the aforesaid issue. The Hon'ble High Court of Bombay in the case of Peter Vaz (supra) and that of the Hon'ble High Court of Gujarat in the case of Commissioner of Income-tax v. Ramesh D. Patel [2014] 42 taxmann.com 540/225 Taxman 411/362 ITR 492 (Gujarat), had held, that as Section 124 of the Act pertains to territorial jurisdiction vested with an AO under sub-section (1) or sub-section (2) of Section 120, therefore, the provisions of sub-section (3) of Section 124 which places an embargo on an assessee to raise an objection as regards the validity of the jurisdiction of an A.O would get triggered only in a case where the dispute of the assessee is with respect to the territorial jurisdiction and would have no relevance in so far his inherent jurisdiction for framing the assessment is concerned. Also, a similar view had been taken by the Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income-tax v. Nopany& Sons [2022] 136 taxmann.com 414/286 Taxman 388 (Calcutta). In the case before the Hon'ble High Court the case ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 15 of the assessee was transferred from ITO, Ward-3 to ITO, Ward-4 and the impugned order was passed by the ITO, Ward-4 without issuing notice u/s 143(2), i.e. only in pursuance to the notice that was issued by the ITO, Ward-3, who had no jurisdiction over the assessee at the relevant time. The Hon'ble High Court considering the fact that as the assessment was framed on the basis of the notice issued under Sec. 143(2) by the assessing officer who had no jurisdiction to issue the same at the relevant point of time quashed the assessment……Apropos the judgment of the Hon'ble Apex Court relied upon by the A.O in the case of Deputy Commissioner of Income-tax (Exemption) v. Kalinga Institute of Industrial Technology [2023] 151 taxmann.com 434/293 Taxman 493/454 ITR 582 (SC), it would be relevant to cull out the facts as were involved in the aforesaid case. (i) the assessee had in the aforesaid case challenged the notice issued u/s.143(2) of the Act by the ACIT, Corporate Circle-1(2), Bhuwaneshwar, as being without jurisdiction; (ii) the jurisdiction over the case of the assessee that was vested with ACIT, Corporate Circle-1(2), Bhuwaneshwar was after filing of the return of income changed and got vested with the Jt. CIT (OSD) (Exemption), Bhuwaneshwar; (iii) it was the assessee's case that as the jurisdiction to issue notice u/s. 143(2) of the Act in its case was with Jt.CIT(OSD)(Exemption), Bhuwaneshwar, therefore, the impugned notice issued u/s. 143(2) of the Act by the ACIT, Corporate Circle-1(2), Bhuwaneshwar was without jurisdiction and, thus, was liable to be quashed; (iv) the Hon'ble High Court of Orissa considering the fact that the jurisdiction to issue notice u/s. 143(2) of the Act in the case of the assessee remained with the Jt. CIT (OSD) (Exemption), Bhuwaneshwar, therefore, held the impugned notice issued u/s. 143(2) of the Act by the ACIT, Corporate Circle-1(2), Bhuwaneshwar as having been issued without jurisdiction and thus, quashed the same. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 16 45. On Special Leave Petition (SLP) filed by the revenue, the Hon'ble Apex Court, inter alia, observed that as the records revealed that the assessee had participated in the assessment proceedings pursuant to notice issued u/s. 142(1) of the Act, and thus, had not questioned the jurisdiction of the A.O, therefore, there was no justification for the High Court to have set-aside the notice issued u/s.143(2) of the Act by the ACIT, Corporate Circle-1(2), Bhuwaneshwar. Elaborating on the scope of Section 124(3)(a) of the Act, the Hon'ble Apex Court observed that the same precluded the assessee from questioning the jurisdiction of the A.O if he does not do so within 30 days of receipt of notice u/s. 142(1) of the Act. 46. Before proceeding any further, it would be relevant to point out that a plain reading of sub-section (3) of Section 120 of the Act reveals that the \"jurisdiction\" vested with the A.O is classified into four categories, viz. (i) territorial area; (ii) persons or classes of persons; (iii) income or classes of income; or (iv) cases or classes of cases. As in the present case before us, the assessee company has not assailed the vesting of jurisdiction with the ITO-4(1), Raipur on either of the aforesaid four categories, but has rather assailed the failure of the authorities to strictly comply with the mandate of law for transferring of its case i.e. from ITO-4(1), Kolkata to ITO-1(1), Raipur, therefore, the same in our view cannot be brought within the meaning of questioning of the jurisdiction assumed by the A.O on the aforesaid basis, viz. (i) territorial area; (ii) persons or classes of persons; (iii) income or classes of income; or (iv) cases or classes of cases. As the CIT-2, Kolkata had failed to pass an order transferring the case of the assessee company from ITO-4(1), Kolkata to ITO-1(1), Raipur as was statutorily required per the mandate of Section 127 of the Act, therefore, it is the validity of the impugned assessment order passed by the A.O i.e. ITO-4(1), Raipur u/s. 143(3) of the Act, dated 31.03.2015 in absence of an order of transfer passed u/s. 127 of the Act which has been challenged by the assessee company. 47. At this stage, we may herein reiterate that the Hon'ble Supreme Court in the case of Noorul Islam Educational Trust ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 17 (supra), emphasizing on the statutory requirement of passing of an order u/s127(2)(a) of the Act where the assessee's case was transferred from one A.O to another, and the said AO's were not subordinate to the same Commissioner, had observed, that as required per the mandate of law, an agreement between the Director General, Chief Commissioner or Commissioner as the case may be, of the two jurisdictions is necessary. 48. We, thus, in terms of our aforesaid observations are of a firm conviction that as the assessee company had not called in question the jurisdiction assumed by the A.O, based on, viz. (i) territorial area; (ii) persons or classes of persons; (iii) income or classes of income; or (iv) cases or classes of cases, but had rather assailed the validity of the assessment order passed by the ITO-4(1), Raipur in absence of an order of transfer that was statutorily required to have been passed by the CIT-2, Kolkata u/s. 127 of the Act, therefore, it would not be circumscribed by the restriction contemplated under sub-section (3) of Section 124 of the Act. Accordingly, we are of a firm conviction that the judgment of the Hon'ble Supreme Court in the case of Kalinga Institute of Industrial Technology (supra) is distinguishable qua the issue involved in the present case of the assessee company before us. (iii) Bansilal B. Raisoni& Sons vs ACIT [2019] 101 taxmann.com 20 (Bom) “Section 124, read with section 153A, of the Income-tax Act, 1961 - Assessing Officer - Jurisdiction of (Objection to) - Whether time limit for raising objection to jurisdiction of Assessing Officer prescribed under sub-section (3) of section 124 has a relation to Assessing Officer's territorial jurisdiction - Held, yes - Whether, therefore, where assessee contended that since no search was carried out at its premises, notice issued by Assessing Officer under section 153A was without authority of law, in such a case, time limit prescribed under sub-section (3) of section 124 for raising said objection would not apply - Held, yes” ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 18 (iv) Capstone Securities Analysis (P) Ltd vs DCIT (2017) 167 ITD 1 (Pune-Trib) Once transfer of case of assessee was ordered under section 127, Assessing Officer who was vested with jurisdiction by virtue of direction or order issued under sub-section (1) or (2) of section 120 and section 124, stood divested of same and, in such a case, notice issued under section 143(2) by said Assessing Officer after date of transfer, was to be regarded as invalid notice and, consequently, assessment framed under section 143(3) pursuant to notice so issued would be void ab initio. (v) Fiat India Automobiles Ltd vs Vijender Singh 211 Taxman 570 (Bom)(HC) 17. In response to the same, the Ld. CIT DR primarily relied on the orders of the authorities below without controverting the submissions of the assessee but strongly pleaded that the ld.CIT(A) has given a finding in para 7.9 of his appellate order challenged in this appealthat when the PCIT 27 Mumbai himself approved the issuance of notice u/s 148 of the Act on 29/03/2018, he had consciously bestowed the jurisdiction on the ACIT Circle 27(1) Mumbai for the purpose of issuance of the notice u/s 148 of the Act on 29/03/2018 and therefore, the said notice was issued validly and as per law by the ACIT Circle 27(1) Mumbai having jurisdiction over the assessee as on the said date and the consequent assessment order passed is a legally valid assessment order. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 19 18. We have heard both the parties and perused the records as well as the judicial pronouncements relied by both the parties. The case of the assessee before is that the assessment jurisdiction over the assessee had specifically been vested with the DCIT CC 4(1), Mumbai w.e.f. 17/01/2018 based on an assessment jurisdiction transfer order passed by the PCIT 27 Mumbai by transferring the same from the ACIT Circle 27(1) Mumbai after the income-tax search having been conducted on the assessee on 07/10/2017, any other assessing authority having jurisdiction whether territory based, activities based or structured based as specified u/s 120(3) including the erstwhile ld.AO ACIT Circle 27(1) Mumbai was completely barred to undertake any proceedings on the assessee as has been explicitly mentioned in the Explanation u/s 127 of the Act. In the Central Circle charges, the cases are transferred irrespective of any other base as above but only when there has been an income-tax search and in that case the jurisdiction criteria are altogether different as has been specified by the Board u/s 120(3) of the Act. We hold that after the transfer of the case u/s 127(2) to the DCIT Central Circle 4(1) Mumbai, the PCIT-27Mumbai on 17/01/2018 also had no legal powers to grant any sanction u/s 151 or to transfer/ deemed transfer the case at all back to his charge. In fact, after transferring the case on 17/01/2018, the PCIT 27 Mumbai also ceased to possess any jurisdiction over the assessee in any manner to pass any order or to give any sanction, which had in fact been with the PCIT Central 2 ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 20 Mumbai as on the said date. The PCIT 27 Mumbai could only have any such jurisdiction if and if only the PCIT Central 2 Mumbai under whom the DCIT Circle 4(1) Mumbai had passed an order u/s 127(2) of the Act transferring back the assessment jurisdiction over the assessee to the ACIT 27(1) Mumbai before 29/03/2018, but admittedly which was not done as no evidence for the same has been placed or pleaded by the ld.CIT DR. It is also a settled law that at the same time, there could be no two assessing officers over an assessee to pass income-tax assessment orders, much less for the same assessment year. Further, on perusal of the reasons recorded and proposal sent to the PCIT 27 Mumbai by the ACIT Circle 27(1) Mumbai, placed at PB page no. 41-42, it is clear that he did not mention therein at all the vital fact that the assessment jurisdiction over the assessee had already been transferred from his charge to the DCIT Central Circle 4(1) Mumbai by the PCIT 27 Mumbai vide an order dated 17/01/2018, rather in para 4 therein, the AO has mentioned that after receipt of the information received from the Investigation Wing, the return of income of the assessee for the AY 2011-12 has been analysed, particularly when he could not possess the said return of income with him as on the said date due to it having been transferred earlier by an order u/s 127(2) on 17/01/2018. 19. We also take note that the reasons recorded by ACIT, Circle 27(1), Mumbai and the proposal sent to PCIT–27, Mumbai do not disclose the material fact of jurisdictional transfer. It is apparent ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 21 that the reasons were recorded mechanically, without access to the assessment records — which had already been transferred. Thus, the PCIT–27, while granting sanction under section 151, was misled into believing that the case still lay within his jurisdiction. 20. We reiterate that upon issuance of the transfer order under section 127(2), the PCIT–27 was denuded of all authority in respect of the assessee, including the power to accord sanction under section 151. The records, authority, and jurisdiction all stood vested in the PCIT–Central-2 and the DCIT, Central Circle 4(1), Mumbai. 21. In light of the factual matrix and legal authorities placed before us, the conclusion is inescapable: the notice issued under section 148 of the Act on 29.03.2018 by the ACIT, Circle 27(1), Mumbai, was vitiated by a jurisdictional infirmity so fundamental that it strikes at the very root of the reassessment proceedings. Once the competent authority namely, the PCIT– 27, Mumbai had transferred jurisdiction over the assessee to the DCIT, Central Circle 4(1), Mumbai by a valid and subsisting order under section 127(2) dated 17.01.2018, the erstwhile Assessing Officer stood wholly divested of the statutory authority to initiate any proceedings thereafter. The act of issuance of notice under section 148 by an officer bereft of such authority is not merely a procedural irregularity, it is a jurisdictional nullity. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 22 As the saying in jurisprudence goes, a foundation laid in sand cannot support the edifice of justice. 22. Jurisdiction under the Income-tax Act is not a matter of administrative convenience or post-facto regularisation; it is a condition precedent, a sine qua non for the lawful exercise of power. When the jurisdiction shifts by operation of a statutory transfer under section 127, all proceedings past, pending, and prospective, shift with it, as made abundantly clear in the Explanation to that section. The officer who has lost jurisdiction becomes a persona non grata to that file; any action initiated by such an officer thereafter is bereft of legal sanctity. Consequently, as the very substratum of the reassessment, the notice under section 148, is void ab initio, the consequential reassessment order dated 30.12.2018 passed by DCIT, Central Circle 4(1), Mumbai must fall with it. A superstructure built upon a non-existent foundation is destined to collapse. 23. In view of our findings that the reassessment proceedings are fundamentally tainted by want of jurisdiction, we see no necessity to venture into the merits of the additions or other grounds raised by the assessee. It is well settled that once the jurisdictional edifice is held to be invalid, the ensuing adjudication becomes academic — a legal exercise in futility. Accordingly, we refrain from adjudicating the other grounds which now stand rendered infructuous. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 23 24. In the result, the appeal of the assessee is allowed. ITA no. 2467 to 2472/Mum/2025 (Assessment years: 2013- 14 to 2018-19) 25. The grounds of appeal taken by the assessee in brief are as below:  Firstly, addition made in absence of any incriminating material found during the course of search in the premises of the assessee on 07/10/2017 where the material relied was found in income-tax searches with no common search / joint warrant in searches.  Secondly, no mandatory DIN on the body of the assessment orders.  Thirdly, incompetent and mechanical approval u/s 153D of the Act by the Addl CIT. 26. Brief facts are that during the course of the income-tax search on the assessee on 07/10/2017, as is submitted by the ld. Counsel of the assessee and are apparent on record that statements of the assessee Mr. Hemendra Ramji Vira were recorded u/s 132(4) of the Act on 09/10/2017. It is also an admitted fact, that no material or information qua the additions made in all the assessment orders in appeal were found during the course of said search as the ld.AO has also not mentioned any such material having being detected during the said search action on 07/10/2017 in the premises of the assessee as these assessment orders were passed u/s 153A of the Act based only ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 24 on the income-tax search conducted on the assessee on 07/10/2017. Whatever material has been referred to in the assessment order, during the course of search on 07/10/2017, was available with the authorised officer at the relevant time having being procured from extraneous sources in the income- tax searches elsewhere at different times and in none of those search warrants, the name of the assessee was appearing as per panchnamas or information of those searches placed on record. Thus, those searches were independent income-tax searches. The ld.AO‘s main reliance is based on the statements ofthe assessee recorded u/s 132(4) at the time of search which were later on retracted by the assessee on 09/12/2017 by filing an affidavit with the Investigation Unit Mumbai as his statements recorded during the search on him were not based on any incriminating material found in his premises but were based on the statements of third parties recorded elsewhere. Admittedly, the affidavit filed by the assessee on 09/12/2017 was not at all cross examined by the revenue. Thus, the correctness of its contents cannot be doubted at this stage now and the same stands accepted in view of the judgment of the Apex Court in Mehta Parikh & Co. vs CIT (1956) 30 ITR 181 (SC) (LB). 27. Appeals for the AYs 2013-14 to 2015-16 having common set of facts; First of all, the appeals of the above three assessment years have been decided as those have separate facts of additions for exempt LTCG on shares u/s 10(38) and notional commissions paid thereon u/s 69C. The Ld. Counsel submitted that in the ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 25 statements recorded u/s 132(4) of the Act on09/10/2017, the assessee was shown the statements recorded u/s 132(4) elsewhere about the money lent in cash to Nilesh Bharani / Evergreen Enterprises outside the regular books of account but there was no question at all in any manner on the claim of Long- term capital gains as exempt u/s 10(38) of the Act for the period relevant to the AYs 2013-14 to 2015-16 and which are the only additions made in these three assessment years and no addition has been made for any cash loans given.The additions made in the three reaming AYs 2016-17 to 2018-19 are only in respect of the alleged cash loans given to Evergreen Enterprises / Nilesh Bharani and there is no addition for the LTCG, however, for the reasons best known to the ld.AO, a detailed discussion on the cash loan transactions has been made in the assessment order for the AY 2013-14 to 2015-16.The ld. Counsel stated that this clearly demonstrates that the ld.AO was not at all applying his mind but was passing the assessment orders mechanically. The Ld. Counsel of the assessee further submitted as was pleaded before the lower authorities also forming part of the paper book submitted that all these questions and answers relevant to the additions made in the hands of the assessee in the respective AYs clearly demonstrate and confirm the contention of the assessee that no such evidence much less incriminating the assessee in any manner was found during the course of search in the premises of the assessee searched u/s 132 of the Act and therefore, by following the judgment of the Apex Court in PCIT vs Abhisar Buildwell (P) Ltd [2023] 149 taxmann.com 399 (SC), no ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 26 addition at all could be made in any assessment order passed u/s 153A of the Act. 28. However, the ld. Counsel pointed out that the ld.AO has relied on some statement of the assessee recorded on 11- 12/01/2019 recorded u/s 131 of the Act in a survey conducted u/s 133A on 10-12/01/2019 in the premises of Nisarg Nirman Group, a partnership firm where the assessee is a partner and not u/s 132(4) of the Act as there was no search at all then as is clear from the affidavit filed by the assessee placed in the PB page no. 22-26. The ld. Counsel stated that the AO has mentioned in para 7.5 of the assessment order that the assessee made a ―non-satisfactory and evasive reply at the time of search‖. However, the statements of the assessee recorded u/s 132(4) of the Act, placed in the paper book, do not at all show any such question seeking any response much less anything to support the allegation of the ld.AO in the assessment order. 29. The ld. counsel also pointed out that the ld.AO has deliberately mentioned the facts incorrectly in para 7.5 of the assessment order, alleging that some statement u/s 132(4) of the Act of the assessee during the course of search action was recorded and then he copied some extract of the same on page no. 74 of the assessment order for the AY 2013-14. The ld.AO has deliberately avoided to copy the full statement which would have high-lighted the facts that the said statement was not at all recorded u/s 132(4) of the Act nor during the course of search on ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 27 07/10/2017 based on which these assessment orders were passed. Such action of the Assessing Authority is malicious, contemptuous and need to be reversed in toto. He also stated that, had it been a case of search u/s 132 of the Act, then the earlier assessments based on the search conducted on 07/10/2017 had to be abated as were pending as on the date of these assessment order i.e. 31/12/2019 in appeal here. Since, nothing is apparent in support of the contention of the ld.AO, the said averment of the ld.AO must be disregarded. The ld. counsel also pointed out that in any case, statements recorded after the impugned search, which is basis of proceedings u/s 153A, cannot be considered as incriminating material seized during the search as held in PCIT vs Jaypee Financial Services Ltd [2021] 127 taxmann.com 490 (Delhi), Shankarlal Bhagwati Prasad Jalan [2017] 84 taxmann.com 275 (Bombay), CIT v P.K. Ganeshwar [2009] 308 ITR 124 (Mad.), ACIT vs Ambika International, New Delhi on 13 September, 2023- ITA No. 5071/DEL/2017, BS Associates vs DCIT 2019-TIOL-2578- ITAT-INDORE. 30. The ld. Counsel also stated that in the entire assessment order, the AO has not mentioned statement of any person except some exit provider who was providing the exit accommodation of the LTCGs in the scrip and who also never named the assessee as a beneficiary but which the AO presumed without any documentary support displayed in the assessment order. In fact, in para 6.1.1 of the assessment order, the AO has mentioned ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 28 that during the year under consideration, the assessee has claimed LTCG on sale of shares of Confidence Finance & Trading Ltd (for the AYs 2013-14 and 2014-15)and claimed the same exempt. Identical findings have been given by the ld.AO in the AY 2015-16 where the scrip was different as Greencrest Financial Services Ltd. Then in para 6.1.2 he has said, under the head ―Facts Relating to Share transactions‖ the huge LTCG exemption claimed of the assessee made u/s10(38) of the Act was found suspicious and thus, detailed investigation of this issue was undertaken. Various tools / data bases available were examined including ITD data, BSE data, money control website, court rulings, internet as well as investigation wing report and findings of the SEBI in ascertaining the correctness of the LTCG claim. 31. Then in para 6.1.3, the AO goes to rely on some information received from the Investigation Wing about the claim of the assessee to have booked LTCG in Confidence Finance & Trading Ltd. This clearly indicates that the alleged addition is not at all based on any information found during the course of search in the premises of the assessee, otherwise, it would have been worded differently as not ‗information received during the course of assessment proceedings‘ but as ‗during the course of search in the case of the assessee‘. Thus, undisputedly the same is based on some other material not found during the course of search in the premises of the assessee but in some survey later on somewhere else and is clearly beyond the scope of an assessment order passed u/s 153A of the for a completed assessment earlier. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 29 For this proposition, the assessee relied on the decision in ACIT vs Arun Aggarwal in ITA 253 and 254/LKW/2020 date of decision 20/10/2021. 32. The ld. Counsel also pointed out that on a plain reading of the assessment order, it is clear that the AO did not have any information except some half-baked report received from the Investigation Unit with no head and tail except a long-drawn story as copied in the assessment orders. None of the persons therein, has named the assessee, as nothing such is mentioned. No addition can be made on the basis of any such information in an assessment order passed u/s 153A of the Act. 33. The assessee also submitted complete details of the said share transactions vide letter dated 20/12/2019 to the ld.AO as has been mentioned by the CIT(A) also in para 7.9 of his appellate order, i.e. copy of the allotment letter, copy of application form seeking preferential allotment, copy of demat cum transaction statement for the relevant period, demat statements, contract notes, broker statements, bank statement, receipt from the broker, shares sold on the recognised stock exchange, no nexus between the brokers or anybody else with the assessee as well as no incriminating material found during the search in his premises to support the allegation of bogus LTCG besides the fact on record that the entire LTCG was very much declared earlier in the returns of income every year by the assessee. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 30 34. Thus, it is clear that the said additions were made just for the sake of making additions with no evidence at all with the ld.AO and the ld. CIT(A) also summarily dismissed the appeals of the assessee without considering the facts on record and the settled law now. The ld. Counsel prayed that relying on the judicial pronouncements on the similar facts in the appeals of many other assessees, the additions must be deleted. 35. The ld. CIT (DR) in reply, relied on the orders of the lower authorities and vehemently stressed that since the assessee was confronted with the said information, though admittedly not found during the course of search in the premises of the assessee but was sourced by the authorised officer from somewhere else, the said statements recorded u/s 132(4) of the Act become part of the incriminating evidence so as to justify the addition based on the directions of the Hon‘ble Apex Court in Abhisar Buildwell (supra). However, the learned CIT DR could not controvert the facts placed by the ld counsel of the assessee as above but his only strenuous arguments were that since in the statements recorded u/s 132(4) of the Act, the said information was confronted to the assessee, the same amounts to detection of incriminating material during the course of search. 36. In rejoinder, Mr Bindal the ld. counsel of the assessee stated that on this issue, the judicial pronouncements on ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 31 existence of the law are clear which stipulate that to make any addition u/s 153A of the Act for an already completed assessment, any material relied should have been found during the course of search in the premises of the assessee only and nowhere else. He categorically stated that if anything was found during the course of search in the premises of some other assessee where the name of the assessee did not figure at all in their search warrants, then the course of reassessment available with the Revenue Authorities have been specifically designed in the statute u/s 153C of the Act which is also para-materia and non obstante section as is the section 153A of the Act. These two sections were applicable at the relevant time only in respect of income-tax searches conducted upto 31/03/2021 either in the premises of the assessee or in the premises of someone else allegedly detecting incriminating material in respect of an assessee not searched. 37. The Ld. Counsel also submitted that if the revenue authorities really wanted to take cognizance of the said material in any manner in the hands of the assessee in completed assessments, then the course of the said reassessment lied elsewhere and not u/s 153A of the Act which in terms of the mandate of the Hon‘ble Apex Court in Abhisar Buildwell (supra) is unambiguously defined as below in para 14 (iv): “14.(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 ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 32 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.” 38. Mr Bindal the ld. counsel also referred to the decision of the coordinate Bench in the case of Nilesh Bharani vs DCIT in appeal no. ITA/612/Mum/2020 dated 28/02/2023 where the Bench held as below: 91. We have already observed in our earlier paragraphs that the entire procedure to make an assessment or reassessment of income of the alleged escaped income either u/s 148 or section 153C of the Act practically is the same except the jurisdiction and root cause which are different. The legislature has specifically carved out scope of assessment / reassessment of income of a person not searched of such alleged escaped income based on some incriminating information found during a search on some other person searched by taking recourse to the section 153C of the Act. The AO has not been empowered to extend the scope of an assessment/ reassessment u/s 153A read with the section 153C ofthe Actbeyond the alleged incriminating material found during thecourse of search in the case of some other person, because assessment / reassessment in such case is specifically restricted to the income based on the said incriminating information only. Whereas, in the proceedings initiated u/s148 of the Act, the AO may extend the scope of the assessment / reassessment on other amounts also if any information about those is on his record over and above the alleged escaped income as per the reasons recorded. The purpose of restriction of assessment for amount of income by taking recourse to the provisions u/s 153C of the Act to alleged incriminating material and not on suspicion has been upheld by the Hon’ble Supreme Court in the case of Sinhgad Technical Education Society (supra). 92. Accordingly, we hold that any incriminating information of any undisclosed income of the personnot searched which was found during the course of a search having taken place up to 31/03/2021 on someother assessee, can only be taken into consideration for an assessment / reassessment in the hands of ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 33 the said person not searched through the domain of thesection 153C of the Act. Thus, any assessment /reassessment proceedings-initiated u/s 148 of the Actin respect of the said incriminating information foundduring the course of a search up to 31/03/2021 onsome other assessee is illegal and is ab initio as thesame can be considered only by taking recourse to the provisions of the section 153C r.w.s. 153A of the Act. Thus, the assessment of the said amount of LTCG, which was claimed to be exempt u/s 10(38) of the Act by the assessee, made u/s 147 of the Act is beyond the scope of section 147, albeit it can be roped in only u/s 153C. 93. If on overall appreciation of the scheme of assessment / reassessment of income after the income-tax searches on the assessee searched and also for the persons not searched based on detection of some incriminating information during the said searches conducted upto 31/03/2021, the following legal course of action is open for the AOs, which can be summed up, in the following manner: (i) It is mandatory for the AO of the person searched to make an assessment / reassessment of income of the said assessee u/s 153A of the Act for the 6 assessment years prior to the date of search and also for the extended 4 relevant assessment years, subject to fulfillment of the prescribed conditions for the same, on the basis of an income-tax search conducted on him. (ii) However, in the assessment / reassessment orders passed within the scope of section 153A of the Act, the AO cannot consider any undisclosed income detected by way of an incriminating information pertaining / relating to the said assessee, during an income-tax search conducted in the premises of some other assessee(s),even conducted at the same time or income connected matter. In such a case where AO gets any information or material about any assessee from the search of some other person, he can, make assessment of the undisclosed income/ amount emanating from such information or material for the assessment / re assessment vide separate assessment/ reassessment orders to be passed u/s 153A by taking recourse to the provisions of the section 153C of the Act. Because the cause of action for the said incriminating information for different amounts had originated in ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 34 different search(es) in the different premises of other assessees and for the same, the mandatory route legislated u/s 153C of the Act must be followed. (iii) Further, an assessee can also be assessed multiple times u/s 153C r.w.s 153A of the Act, despite having already been assessed u/s 153A of Act on the basis of an income-tax search in his premises, where the incriminating information has been received u/s 153C of the Act by the AOs of the searched person as well as of the person not searched, which information originates in different searches at different times on different persons as well. 34. Besides the above, necessary reliance was placed on the following legal judicial pronouncements in favour of the assessee: i. PCIT vs Jay Ace Technologies Ltd. (2023) taxmann.com 45 (SC) (DOD-28.07.2023) ii. Atul Bharanivs DCIT– ITA No. 2021/M/2023 DOD 20.11.2023 iii. Poonam Promoters and Developers Pvt Ltd vs ACIT – ITAT Delhi ITA No. 4785/Del/2015- (DOD- 23.01.2024) iv. Mr. Ritesh Rai vs DCIT – ITAT Chennai – ITA No. 811 & 812/Chny/2022 – (DOD- 19.07.2023) v. PCIT vs Meera Gupta – ITAT Delhi – ITA No. 403/2023 (DOD- 27.07.2023) vi. PCIT vs Kaushik Devjibhai Patel – (2023) 152 taxmann.com 462 (Gujarat) (DOD-04.05.2023) vii. PCIT vs Jay Ambey Aromatics – (2023) 156 taxmann.com 691 (SC) (DOD- 24/11/2023) ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 35 viii. PCIT vs Oxygen Business Park (P)Ltd(2023)157taxmann.com 175(Delhi) (DoD- 08/12/2023) ix. Saksham Commodities Ltd vs ITO (2024) 161 taxmann.com 485(Delhi)confirmed by the Apex Court in SLP no. 51947/2024 vide order dated 16/12/2024. x. PCIT vs Pavitra Realcom Pvt Ltd (2024) 120 CCH 0035 (Delhi HC) xi. Hon‘ble ITAT Mumbai ―D‖ Bench in the case of Rajeshkumar Ramesh chandra Shah vs DCIT in ITA No. 5568 to 5573/Mum/2024 for AYs 2013-14 to 2018-19 DoD-31.01.2025, decision arising from the same search and on the identical facts (as in the case of assessee)has directed the AO to delete the additions in all the years under dispute (para 12 to 14, page no. 8 to 10) 39. We find that in respect of the addition made for the AYs 2013-14 to 2015-16 by rejecting the LTCG, claimed exempt u/s 10(38) of the Act by the assessee in his returns of income though in the assessment order by the same charge ld.AO, and on the identical set of facts as was in the case of Atul Shamji Bharani vs DCIT, the Coordinate Bench of the ITAT, Mumbai in appeal no. 2022/Mum/2023 vide order dated 09/08/2024for the AY 2013- 14 has held as below: “39. We have considered the submissions of both sides and perused the material available on record. In the present case, undisputedly the addition is made under section 68and ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 36 section69Cof the Act on account of alleged accommodation entries of bogus long-term capital gain. From the perusal of the assessment order, it is discernible that the said addition is not based on any material or document found during the course of search/survey action under section 132/133Aof the Act conducted at the residential premises of the assessee. It is further evident that the AO has placed reliance uponthe findings of the Investigation Wing, Kolkata, wherein the scrip M/s Shree Nath Commercial & Finance Ltd. was included in the list of 84 companies whose share prices were manipulated by a syndicate of entry operators. The AO from pages 4-12 of the assessment order discussed the findings of the Investigation Wing, Kolkata, wherein the modus operandi of providing bogus accommodation entry, players on the scheme, role of the operator, role of the promoters of the penny stock companies, role of shareholders and exit providers has been discussed. fluctuation, the history of the company, and the financials of the scrip M/s D.B. (International) Stock Brokers Ltd. From pages 18-27, the AO has analysed the statements of theentry providers in the scrip of M/s D.B. (International) Stock Brokers Ltd. It is pertinent to note that these statements were recorded under section 132(4)of the Act on 13/06/2014 during the course of the search action at their premises. Thus, it is worth noting that none of the statements were pursuant to search/survey action under section 132/133Aof the Act conducted at the residential premises of the assessee on 06/10/2017 and are much prior to the search in the case of the assessee. From the perusal of the statements, it is further pertinent to note that though the entry operator has agreed that they have arranged investments in the shares in M/s D.B. (International) Stock Brokers Ltd. on behalf of some of the beneficiaries, however there is no allegation against the assessee. Similarly, from pages 27-36, the AO analysed the financials and price fluctuation in the scrip M/s Shree Nath Commercial & Finance Ltd. Identical to M/s D.B. (International) Stock Brokers Ltd., the statement of entry operators relied upon by the AO, who admitted to have provided accommodation entry in M/s Shree Nath Commercial & Finance Ltd., were recorded in the year 2015, i.e. much prior to the search/survey conducted at the residential premises of the assessee. Therefore, from afore- noted factual position, it is evident that the entire addition is based on the information received during the search carried out in case of some ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 37 other persons. Further, from para-7.10 of the assessment order, it is also evident that the statement of the assessee was also recorded under section 132(4)of the Act pursuant to the information received during the search carried out in case of some other persons. In view of the aforesaid peculiar factual matrix of the present case, it is the plea of the assessee that the assessment should have been done under section 153Cof the Act instead of the assessment order being passed under section 153Aof the Act. 40. We find that a similar controversy came up for consideration before the coordinate bench of the Tribunal in Anoop KumarGupta v/s ACIT, in ITA no. 454/Del./2020, for the assessmentyear 2015-16, wherein despite the large no. of incriminating documents being found and impounded during the search, no addition was made by the AO in the assessment proceedings, as the AO was convinced with the explanation given by the taxpayer for those documents. However, in another search based on any independent warrant of authorisation, certain incriminating documents were found. Accordingly, the issue arose that whether the taxpayer needs to be questioned based on those incriminating documents only by taking recourse to section 153Cof the Act and not under section 153Aof the Act irrespective of the fact whether the assessment is abated or not. The coordinate bench of the Tribunal while deciding this issue in favour of the assessee, vide order dated 05/10/2023, held that any addition on the basis of some incriminating material found elsewhere could not be assessed in the assessment order passed under section 153Aof the Act, but it could be considered only in a separate assessment order by taking recourse to the mandatory and special non obstante provisions of section153Cof the Act and then to pass a separate assessment order under section 153Ar/w section 153Cof the Act. The relevant findings of the coordinate bench, in the aforesaid decision, are reproduced as follows:- \"23. It is pertinent to note that though the ld. AO had stated that large number of incriminating documents were found and impounded during the search, we find that ultimately no addition was made based on the same by the ld. AO in the assessment proceedings, as the ld. AO was convinced with the explanations given by the assessee for those documents. The fact of assessee ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 38 claiming exemption u/s 10(38) of the Act for sale of shares of MARL was duly disclosed in the return of income filed on 29.11.2015 prior to the search itself. No document whatsoever was found and seized from the premises of the assessee during his search representing any incriminating document qua the issue of claim of exemption u/s 10(38) of the Act. The only document whichfall within the ambit of incriminating nature is the forged signature of Shri Koteshwar Rao in the documents pertaining to allotment of preferential shares submitted to Ministry of Corporate Affairs (MCA), which was also not seized from the premises of the assessee. The investigation wing of Income Tax Department had gathered those informations from MCA and had confronted Shri Koteshwar Rao during the course of search. Shri Koteshwar Rao denied having affixed his signature thereon as he had resigned from the post of Director of MARL in the year 2012. However, from the statements recorded by the investigation wing of income tax department from various persons involved , it is evident that the signature of Shri Koteshwar Rao was indeed forged in the documents pertaining to allotment of preference shares to various persons including the assessee and his family members. At this juncture, it would be relevant to note that both Shri Koteshwar Rao as well as the assessee in their individual sworn statements had categorically denied having known each other. Hence it becomes evident that assessee was never involved in any of the forgery acts that had been carried out in the allotment of preference shares of MARL. But we find that the assessee was confronted by the revenue with those very same forged signed documents in order to draw adverse inference on the claim of exemption u/s10(38) of the Act on the assessee. Hence the said forged signed documents become incriminating documents found during the course of search of third parties (which include MARL and Shri Koteshwar Rao). Accordingly, if at all the assessee need to be questioned based on those incriminating documents, as per the scheme of provisions of Chapter XIV (sections 153A to 153C) of the Act , it could be done only by taking recourse to section 153C of the Act and not u/s153A of the Act irrespective of the fact whether the assessment is abated or not. This is so because , the provisions of Sections 153A and 153C of the Act are special provisions starting with non-obstante clause thereon whichhad been introduced in the statute only for the limited purpose of ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 39 framing assessments pursuant to search actions carried out and information / materials surfaced therein. 24. We find that the assessment for this assessment year was not completed as the time limit to issue any notice u/s143(2) of the Act was still available to the ld. AO and undoubtedly, as per the law as existed then, no addition in an assessment order passed u/s 153A of the Act in the case of the assessee was possible on the basis of some alleged incriminating information/ material seized / statements from/ of the alleged entry providers as no incriminating material in any manner at all depicting bogus LTCG was found during the course of search in the premises of the assessee or on the strength of any search warrant in the name of the assessee in any premises anywhere. Thus, the only course available to the revenue was to initiate proceedings u/s 153C of the Act as has been held by the Hon'ble Supreme Court in Vikram Sujitkumar Bhatia vs ITO reported in 149 taxmann.com 123 (SC). We find that the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt Ltd reported in 149 taxmann.com 399 (SC) had not overruled / could not at all overrule the special provisions u/s 153C of the Act mandated by the legislature for the purpose. The directions therein by the Hon'ble Apex Court to consider material available with the ld. AO in pending assessments which was gathered by the ld. AO in normal course and not flowing from any search action for which the mandatory recourse is the route provided in section 153C of the Act only and there could be several assessments of the same assessee in addition to the single assessment u/s 153A of the Act for the relevant period on search on him. This is so because the cause of action u/s153C of the Act can arise upto 10 years when some incriminating information pertaining to the assessee is detected in searches elsewhere at different times which were not accessible to the revenue earlier. The assessment procedures under the two specific situations have, therefore,been categorically mandated by the legislature without any fetters and need to be followed by all the courts including the Hon'ble Supreme Court being a jurisdictional issue as has been held by the Hon'ble Supreme Court in S S Con Build Pvt Ltd reported in 293 Taxman 491 (SC) dated 4.5.2023 by following the earlier Apex Court judgment in Kanwar SinghSaini vs High Court of Delhi reported in (2012) 4 SCC 307. We find that undisputedly section 153C of the Act starts with a non obstante ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 40 clause and both the AOs involved were bound to act as per this provision as term deployed therein is \"shall\". Accordingly, as per the law, no addition in an assessment order passed u/s 153A of the Act without following the mandatory route of section 153C of the Act in the case of the assessee was possible on the basis of some alleged material seized / statements from / of the alleged entry providers as no incriminating material in any manner at all depicting bogus LTCG was found during the course of search in the premises of the assessee or on the strength of any search warrant in the name of the assessee in any premises anywhere. Thus, the only course available for the revenue was to initiate proceedings u/s 153C of the Act on the assessee whereby the AO of the entry provider was statutorily required, (and not the officers of the investigation unit of the department under any circumstance on the basis of the seized material) if he was satisfied that the seized material/information from the searched entry provider had some bearing etc. on the determination of the assessable income of the assessee by sending the same to the AO of the assessee and then the AO of the assessee should have proceeded to assess the same by a separate assessment order u/s 153A read with the section 153C of the Act. Undisputedly, section 153C of the Act is a non obstante section and a complete code by itself and both the AOs involved were bound to act as per this provision as term deployed therein is \"shall\". No option was available with the AOs to act otherwise overruling the law at their whims. Therefore, if the material found and seized from an entry provider 'pertains or pertain to, or any information contained therein, relates to the assessee, then the ld. AO of the said entry provider must have initiated the assessment process u/s 153C of the Act. It is in his exclusive domain to be satisfied whether 'pertains or pertain to, or any information contained therein, relates to' or not and the statute in an unambiguous language has not bestowed this power on any other authority, which admittedly here has been completely misunderstood to be with the Investigation Unit of the income-tax department by the ld. AO while completing the assessment. 25. For the sake of convenience, the provisions of section153C of the Act as it stood at the relevant point of time are reproduced hereunder:- ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 41 \"Assessment of income of any other person u/s 153C of the Act 153C. (1)Notwithstanding anything contained in section139, section 147, section 148, section 149, section151 and section 153, where the Assessing Officer is satisfied that,-- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books ofaccount or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso tosub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 42 (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section132A and in respect of such assessment year-- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section153A.\" (emphasis supplied by us) 26. It would not be out of place to refer to the Notes on Clauses of the Finance Bill 2015 when the legislature thought it fit to amend the provisions of section 153C of the Act w.e.f. 01.06.2015. \"Clause 36 of the Bill seeks to amend section 153C of the Income- tax Act relating to assessment of income of any other person. The existing provisions contained in section 153C provide that in the course of an assessment proceeding, in the case of a person in whose case search action under section 132 or action under section 132A have been conducted, and whether the Assessing Officer is satisfied that the assets or books of account or documents seized belong to another person, then, the assets or books of account or documents seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person, if he is satisfied that the books of accounts or documents or assets seized have a bearing on determination on the total income of such other person. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 43 It is proposed to amend sub-section (1) of the said section so as to provide that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned, shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if that Assessing Officer is satisfied that the books of account or documents or assets, seized or requisitioned, have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A. This amendment will take effect from 1st June, 2015.\" 27. On perusal of the above provision read with relevant Notes on Clause to the Finance Bill 2015, it is clear that any information or entry found in any document seized pertaining/ relating to a person other than the person searched from the searched premises as was referred u/s 153A of the Act was to be handed over by the investigation wing to the AO of such other person (searched) and then that AO of the searched person shall handover the same to the AO of the person not searched who thereafter was to proceed against such other non-person by issuing a notice u/s 153C of theAct and then to assess / re- assess income of such other not searched person. 28. Further on perusal of the proviso to section 153C of the Act , it is very clear that the first proviso as it existed then, the deemed date of search for initiation of proceeding u/s153C of the Act in the case of a non-searched person (assessee here) was the date of receiving the documents by the AO of the assessee. It is pertinent to note that the panchanama was finally closed in the hands of the assessee on 31.3.2016 at 8.40 P.M. The case of the assessee got centralised only on 5.9.2016, which means the AO could have ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 44 received any information relating to bogus LTCG based on entry operators statements only on or after 5.9.2016 and certainly not before that date. This is so because absolutely no documents of incriminating nature was found and seized in the premises of the assessee during the course of search on 30.3.2016 which got concluded on 31.3.2016 at 8.40 P.M. Hence even if 5.9.2016 is construed as the date of receipt of information by the AO of the assessee, then that would become the date of search on the assessee in order to proceed on the assessee in terms of section 153C of the Act. This view of ours is fortified by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs RRJ SecuritiesLtd reported in 380 ITR 612 (Del) followed in Pr. CIT vs RajBuildworth (P) Ltd reported in 113 taxmann.com 600 (Delhi) and the SLP of the revenue dismissed by the Hon'ble Apex Court which is reported in 113 taxmann.com 601 (SC). Consequently, the period relevant to the Asst Year 2015-16 herein, when the impugned incriminating material was found in a search of a third person, got shifted from the scope of an assessment u/s 153A of the Act to the provisions of the sections 153C of the Act being one of the six assessment year preceding the date of search in the case of the other person. 29. Thus, it could be safely concluded that in addition to the assessment order passed u/s 153A of the Act on the basis of an income-tax search conducted on the assessee, the impugned amount assessed in this assessment order as undisclosed / unexplained income, allegedly based on some incriminating material found elsewhere, with respect to the long term capital gain already declared in the return of income filed on 29/11/2015 could not be assessed in the said assessment order passed u/s 153A of the Act but it could be considered for the purpose only and only in a separate assessment order by taking recourse to the mandatory and special non obstante provisions of the section153C of the Act and then to pass a separate assessment order u/s 153A r.w.s. 153C of the Act. Had recourse to section 153C of the Act been adopted by the revenue, then it would be in accordance with the decision of the Hon'ble Supreme Court in the case of ITO vs Vikram SujitkumarBhatia (supra). Hence the consideration of denial of exemption u/s 10(38) of the Act for the long term capital gain on sale of shares of MARL could not be done ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 45 by the revenue legally in the proceedings u/s 153A of the Act on the assessee.” 41. Therefore, respectfully following the aforesaid decision of the coordinate bench of the Tribunal, we are of the considered view that any addition under section68 and section 69C of the Act in the facts of the present case cannot be done by taking recourse to the provisions of section153A of the Act. Accordingly, the additional grounds and ground no. 1 raised by the assessee are allowed.” 40. The Co-ordinate Bench of the ITAT in the case of wife of the assessee, Mrs Majula H Vira, in ITA 2923/Mum/2023 vide decision dated 09/12/2024 has held that the LTCG earned by the assessee in the scrip of Greencrest Financial Services Ltd for the AY 2015-16 as is the case of the assessee also are genuine and additions made were deleted. Similar, finding has also been arrived at in the same scrip in the case of Sheela Ashok Bafina in ITA no. 02/Mum/2023 dated of decision 08/04/2024. 41. In respectful consonance with the findings and directions rendered by the coordinate Bench of the Tribunal, findings that squarely apply to the facts of the present case, the additions of ₹5,11,42,500/- for Assessment Year 2013–14, ₹1,25,22,500/- for Assessment Year 2014–15, and ₹3,30,86,741/- for Assessment Year 2015–16, made in respect of Long-Term Capital Gains already declared and duly claimed as exempt under section 10(38) of the Income Tax Act in the original returns of income, cannot be sustained. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 46 42. These additions, embedded within the assessment orders framed under section 153A of the Act, pertain to assessment years which stood concluded and untainted by the presence of any incriminating or seized material. To permit such additions would be to extend the scope of section 153A beyond its statutorily intended frontier, one which is firmly anchored in the existence of material unearthed during the search. Accordingly, these additions are liable to be, and are hereby, deleted. AY 2016-17 to AY 2018-19 43. Further, similarly for the AY 2016-17 to 2018-19,the additions were made by the AO by working out the unexplained cash loan given by the assessee to one Mr Nilesh Bharani relying on some information found in a different search and premises of Mr Nilesh Bharani where the name of the assessee was not there in any panchnama by stating that since Mr Nilesh Bharani had admitted in his statement recorded u/s 132(4), receipt of such cash loan from the assessee outside the declared sources in the return of income of the assessee is to be assessed u/s 153A. The said fact was though initially partly admitted by the assessee without actually quantifying the same, yet lateron also retracted by him through an affidavit filed on 09/12/2019 and Mr Nilesh Bharani later also retracted his statement recorded u/s 132(4) vide his letter addressed to the Investigation Unit on 14/10/2017. The charts of the additions made are given below: ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 47 Para 5.33 for alleged cash loan given in the assessment orders 5.33. In the light of the above discussion, the cash loans given by the assessee to Shri Nilesh Bharani are assessed as undisclosed investment in loans amounting to Rs. 29,34,00,000/- for AY 2012- 13 to 2018-19, u/s 69 of the IT Act as detailed below. Assessment year Opening Balance Cash loan given during the year Cash loan receive d back during the year Balance outstanding cash loan Amt in Rs Amt in Rs Amt in Rs Amt in Rs 2012-13 0000 0000 0000 0000 2013-14 0000 0000 0000 0000 2014-15 0000 0000 0000 0000 2015-16 0000 0000 0000 0000 2016-17 000 2,05,00,000 2,05,00,000 2017-18 2,05,00,000 27,29,00,000 29,34,00,000 2018-19 29,34,00,000 0000 29,34,00,000 Total 29,34,00,000 Para 5.34 for estimated interest earned on the above loans 5.34. Further the interest earned / receivable on cash loan lent by you amounting to Rs. 6,33,67,134/- for AY2012-13 to 2018-19, is to added to the total income of the assessee AY wise as detailed below: ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 48 Assessment year Interest of Current Year Loans Interest of earlier year loans Total Interest for the Year Amt in Rs. Amt in Rs. Amt in Rs. A B C 2012-13 0000 0000 0000 2013-14 0000 0000 0000 2014-15 0000 0000 0000 2015-16 0000 0000 0000 2016-17 12,05,425 0000 12,05,425 2017-18 2,44,93,710 24,60,000 2,69,53,710 2018-19 0000 3,52,08,00 0 3,52,08,000 Total 3,94,000 21,34,582 25,28,582 44. Thus, the additions were made by the ld.AO in the above three AYs only though he has mentioned 7 AYs in the table, which also shows a mechanical approach with no application of mind at all and also estimated the interest income having been earned thereon in cash outside the declared sources of income as per his return of income by the assessee on the said amounts allegedly lent by the assessee to Mr Nilesh Bharani, though there was no such evidence at all in the alleged material relied upon as per the above chart. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 49 45. For such additions in respect of the cash loans lent, the learned counsel of the assessee also placed reliance on the decision dated 31/01/2025 of the coordinate bench ofthe ITAT Mumbai in the case of Rajeshkumar Rameshchandra Shah in appeal nos. ITA 5568 to 5573/Mum/2024, followed in Rupal K Mehta in ITA no. 6191-6196/Mum/2024dated 27/02/2025 for six assessment years where orders were passed u/s 153A besides otherswhere the facts of the alleged cash loans given to Nilesh Bharani were identical based on an income-tax search on Mr Nilesh Bharani as in this case, except to the extent that there the assessee denied any knowledge of any such transactions rather knowledge of Evergreen Enterprises as well but here the assessee on confrontation admitted in his statement u/s 132(4) to have arranged some cash loan transactions through Evergreen Enterprises and estimated the same around Rs 10 crores. The ld. Counsel also submitted that the assessee never admitted to have given any cash loan but only said he arranged loans for various entities of Sunshine group through Evergreen Enterprises. 46. In respect of these additions, the learned counsel of the assessee again submitted that the search in the premises of the assessee continued for 4 days from 07/10/2017 till 10/10/2017, including the residential and business premises of the assessee when no such records or books of account were found and thus, no material in any manner was also found from the assessee having been made any investment or having earned any interest income. He also said that these questions were ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 50 raised on the assessee on 10/10/2017 when the alleged material/ information had already been found in an independent income- tax search conducted in the premises of Mr Nilesh Bharani since the afternoon of 06/10/2017. The ld. counsel also said that no other material has been referred to in the assessment orders which could suggest any such undisclosed income. He also stated that physical presence of many Revenue Officers as per the Panchnamas for the 4 days (from 07/10/2017 to 10/10/2017) in the premises of the assessee without having found any material needing examination and confrontation with the assessee itself during the said search, demonstrate the clear mental pressure and harassment exerted on the assessee to pressurize him to sign on the dotted lines as recorded by the Revenue Officers on the 4th day of the search in his residence. Admittedly, the statement was also retracted by the assessee at the earliest thereafter on 09/12/2017 by filing an affidavit, not controverted hither to by the revenue through his cross examination proves that the said statement was not at all voluntary and where words were allegedly put in the mouth of the assessee then. 47. The contention of assessee also finds support from the legal pronouncements in CIT vs Lavanya Land (P) Ltd [2017] 83 taxmann.com 161 (Bombay), Aurum Platz (P) Ltd vs DCIT [2023] 152 taxmann.com 85 (Mumbai), CIT vs. Harjeev Aggarwal (2016)70 taxmann.com 95 (Delhi) and PCIT vs Agson Global (P) Ltd [2022] 134 taxmann.com 256 (Delhi) holding that a ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 51 statement recorded u/s 132(4) of the Act per se not at all evidence, unless it is supported with any material gathered during the course of said search. 48. The ld.CIT DR in his reply relied on the orders of the authorities below and vehemently supported the addition based on the papers admittedly found elsewhere. 49. Upon a comprehensive consideration of the rival submissions and a meticulous perusal of the material on record, as well as the decisions rendered by the coordinate benches, we find ourselves in respectful agreement with the contention advanced by the learned counsel. The additions sought to be made solely on the basis of an uncorroborated statement of the assessee cannot, in law, be sustained—at least within the contours of assessment under section 153A of the Act. A solitary statement, unbacked by any cogent or credible material unearthed during the search, cannot, by any judicial reckoning, be construed as incriminating material. The absence of corroborative evidence renders such a statement insufficient to invoke or justify additions under the said provision. 50. It is now a well-settled proposition in jurisprudence, crystallised through the consistent pronouncements of various Hon‘ble High Courts, that an addition cannot rest merely on the foundation of a statement or admission made by the assessee, when such a declaration is unaccompanied by any incriminating ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 52 material discovered during the course of the search. In this regard, instructive guidance may be drawn from the decision of the Hon‘ble Delhi High Court in the case of PCIT vs. Pavitra Realcon Pvt. Ltd. and Others in ITA No. 579/2018, where the principle was emphatically reiterated. “20. However, it is an undisputed fact that the statement recorded under Section 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements. 21. In the case of KailashbenManharlal Chokshi v. CIT', the Gujarat High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph no. 26 of the said decision has been reproduced hereinbelow: - 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority, We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission, We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence, there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 53 that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has com mitted an error in ignoring the retraction made by the assessee. [Emphasis supplied] 22. Further, the position with respect to whether a statement recorded under Section 132(4) of the Act could be a standalone basis for making assessment was clarified by this Court in the case of CIT v. Harjeev Aggarwal, wherein, it was held that merely because an admission has been made by the assessee during the search operation, the same could not be used to make additions in the absence of any evidence to corroborate the same. The relevant paragraph of the said decision is extracted herein below: \"20. In our view, a plain reading of section 158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words \"evidence found as a result of search\" would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the Explanation to section 132(4) of the Act. However, such statements on a stand alone basis without reference to any other material discovered during search and seizure operations would not empower the Assessing Officer to make a block assessment merely because any admission was made by the assessee during search operation, [Emphasis supplied] 23. In our opinion, the Act does not contemplate computing of undisclosed income solely on the basis of statements made during a search. However, these statements do constitute information, and if they relate to the evidence or material found during the search, they can be used in proceedings under the Act, as specified under Section 132(4) of the Act. Nonetheless, such statements alone, without any other material discovered during ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 54 the search which would corroborate said statements, do not grant the AO the authority to make an assessment. 24. Coming to the findings of the ITAT with respect to incriminating material in the case of M/s Pavitra Realcon Pvt. Ltd and M/s Delicate Real Estate Pvt. Ltd, it is seen that the ITAT has explicitly held in paragraph no. 18 that no addition has been made on the basis of any incriminating material found during the course of search. Further, the ITAT relied on the decision of the Supreme Court in the case of CIT v. Sinhgad Technical Education Society and held as follows: - \"18. Further, while writing the order, it has come to our notice that the Hon'ble Apex Court in the case of Sinhgad Technical Education Society has held that section 153C can be invoked only when incriminating materials assessment year-wise are recorded in satisfaction note which is missing here. Therefore, the proceedings drawn u/s 143(3) as against 153C are invalid for want of any incriminating material found for the 19. In view of the above, the additional grounds raised by the assessee in the case of M/s Pavitra Realcon Pvt. Ltd. And Mis Delicate Real Estate Pvt. Ltd. are accepted. Since the assessee succeeds on this legal ground, we refrain ourselves from adjudicating the issue on merit as far as these two cases are concerned.\" 25. Also, the Supreme Court in the case of CIT v. Abhisar Buildwell (P) Ltd., has clarified that in case no incriminating material is found during the search conducted under Section 132 of the Act, the AO will have no jurisdiction to make an assessment. The relevant paragraph is reproduced herein below: - \"36.4. 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 132-A of the 1961 Act. However, the completed/unabated assessments can be re-opened by the ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 55 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.\" [Emphasis supplied]” 9. In Shantilal Savla - ITA No. 357 to 363/Mum/2025 DoD 22/05/2025 13. We have heard the rival submissions and perused the material available on record. The issue pertaining to the existence of incriminating material for the assumption of jurisdiction by the Ld. AO under section 153A of the Act has been duly challenged by the assessee before the Ld. CIT(A) and the Hon’ble ITAT. The incriminating material relied upon by the revenue was found at the premises of Mr. Nilesh Bharani and M/s Evergreen Enterprises, and the statements of the partners therein were recorded as evidence of undisclosed income. It is an undisputed fact that Mr. Nilesh Bharani is engaged in the business of finance, particularly in cash lending and borrowing, and has earned income in cash. However, based on the statement of the assessee, it is evident that the assessee merely advanced a loan of Rs. 35 lakhs to Mr. Nilesh Bharani through banking channels. The assessee was also subjected to a search under section 132 of the Act on 18/12/2017, but no incriminating documents or material were found at the premises of the assessee. The entire addition in the present case is based solely on presumptions and pertains to third parties involved in the same search proceedings. Factually, the same issue has already been adjudicated in favour of the assessee. We respectfully rely on the decisions of the Coordinate Bench of the ITAT-Mumbai in the cases of Rajeshkumar Rameshchandra Shah vs. DCIT (supra) and Rupal Kashyap Mehta (supra), and observe that the Hon’ble Supreme Court's ruling in Abhisar Buildwell (P.) Ltd. is squarely applicable to the facts of the present case. 14. Accordingly, as there is no incriminating material found in the possession of the assessee during the search, the additions made for AYs. 2012–13 to 2016–17 are beyond the jurisdiction of the Ld. AO under section 153A of the Act. Consequently, Ground Nos. 1 to 3 raised by the assessee are allowed. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 56 10. RajeshkumarRameshchandra Shah - ITA No. 5568 to 5573/M/2024 12. As could be seen from the above extract, in the cross examination taken on oath, on a specific question asked by the assessee, Shri Nilesh Shamji Bharani denied of having entered into any cash loan transaction with the assessee. Thus, the facts on record reveal that except the so called incriminating material seized from the premises of Shri Nilesh Shamji Bharani and some statements recorded u/s. 132(4) of the Act from individuals related to M/s. Evergreen Enterprises, the A.O. had no other corroborative evidence available with him to establish that the assessee had actually advanced any cash loan to Shri Nilesh Shamji Bharani. Moreover, the assessee from the very beginning had emphatically denied of having any cash loan transaction with Shri Nilesh Shamji Bharani. Even, a couple of days after recording of statements u/s. 132(4) of the Act, the concerned persons including Shri Nilesh Shamji Bharani had retracted their statements. In fact, Shri Nilesh Shamji Bharani had filed an Affidavit before the A.O. in course of assessment proceedings completely denying the fact of cash loan transaction and had explained that the entries appearing in the seized document, in reality, represents the cash given to him by his father. 13. When the assessee as well as Shri Nilesh Shamji Bharani and other individuals have denied of alleged cash transaction in subsequent events, the duty of the A.O. was to gather more corroborative evidence to establish on record that the entries appearing in the seized material actually represent cash loan transaction of the assessee. However, except the seized material and the statements recorded u/s. 132(4) of the Act from some third-party individuals, the A.O. has absolutely no other evidence on record to corroborate the alleged cash loan transaction of the assessee. Pertinently, though, during the time search and seizure operation was carried out in case of M/s. Evergreen Enterprises and Shri Nilesh Shamji Bharani, a search and seizure operation was also carried out in case of the assessee, however, not a single piece of incriminating material was recovered from the assessee indicating involvement of assessee in the alleged cash loan transaction or any other illegal activity. In fact, it is relevant ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 57 to observe, in the statement recorded u/s. 132(4) of the Act, Shri Jagdish T Ramani, who allegedly was assisting Shri Nilesh Shamji Bharani in his work, had stated that Shri Nilesh Shamji Bharani had instructed him to follow up with the lender, i.e., the assessee, to determine the modality of payment. He had stated that he instructed one of the office boys to collect money from the lender and after the money is collected, it is given to the borrower on execution of a promissory note. He had further stated that after the money is delivered to the borrower and promissory note is obtained, he had instructed the office boy to deliver the promissory note to the lender. It is quite surprising that considering the magnitude of the alleged cash loan transaction appearing in the seized document, not a single piece of incriminating material relating a cash loan transaction was recovered from the assessee during the search and seizure operation conducted on assessee. If the version of Mr. Jagdish T Ramani that the promissory note given by the borrower is delivered to the lender is to be taken on face value, then at least if not all few such promissory notes would have been recovered in course of search and seizure operation carried out in case of the assessee. It is quite improbable that such huge amount of cash loan transaction would not leave any trace of incriminating material /evidence with the assessee. Thus, on cumulative analysis of facts and materials available on record, we are of the opinion that is no conclusive evidence was available with the A.O. to establish on record that the entries appearing in the seized material actually represent cash loan transaction of the assessee. 14. In view of the aforesaid, we have no hesitation in holding that the additions made on account of unexplained investment on account of alleged cash loan transaction and addition made on account of notional interest thereon being not based on cogent evidence, are unsustainable. Accordingly, we direct the A.O. to delete the additions in all the years under dispute. 51. Similarly, the Hon‘ble Delhi High Court in the case of PCIT vs. Anand Kumar Jain (HUF) in ITA No.23/2021 and other appeals vide judgment and order dated 12/02/2021 had held that statement u/s.132(4) does not construe incriminating ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 58 material for carrying out the assessment u/s.153A of the Act and statement cannot justify the additions made by the ld. AO. Similarly, other judgments which have been referred and relied upon by the ld. Counsel and which are not repeated but underlying principle is that for making the addition within the scope and ambit of Section 153A for unabated assessment years, statement alone cannot be treated as an incriminating material to make an addition. Albeit in case of assessment u/s153A (searched person) wherein the addition for unabated assessment has to be confined on the basis of incriminating material found during the course of search. 52. The counsel of the assessee also relied on the decisions of the Mumbai Benches of the ITAT on the same set of facts in Bipin Savla – ITA No. 6493 to 6499/Mum/2024, Bharat Girdharlal Rughani – ITA No. 1511 to 1517/M/2023 and Parag Motilal Savla – ITA No. 4220/M/2023 praying for deletion of the additions made including in the assessment years which were pending during the six years period before the date of search. 53. It is undisputed fact that no material much less incriminating material was found during the course of search from the premises of the assessee in support of the additions, made for the quantum amounts of the alleged cash loans given and the estimated interest thereon in all the AYs as per chart herein above is deleted. We direct accordingly to delete the additions as above. ITA No.6405/Mum/2024 and others Hemendra Ramji Vira 59 54. Since, all the above six appeals have been decided on the above grounds by deleting the additions, other grounds taken by the assessee have become academic and not adjudicated for any of the above assessment years. Thus, all the six appeals as above filed by the assessee have been allowed. 55. In the result, appeals of the assessee are allowed. Order pronounced on 26th June, 2025. Sd/- (GIRISH AGRAWAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 26/06/2025 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "