Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 0866 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-03-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2010-2011
Appeal Filed On
12-10-2018
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO , JM VK;DJ VIHY LA-@ ITA NO. 1053/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 M/S AGRASEN AGRO INDUSTRIES PVT. LTD., PLOT NO. 6 AND 7, C-BLOCK, MULTIMETALS LTD. CAMPUS, KANSUA ROAD, LARGE SCALE INDUSTRIAL AREA, KOTA. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, ROOM NO. 212, 2 ND FLOOR, C.R. BUILDING, RAWAT BHATA ROAD, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCA 0206 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1188/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOTA. CUKE VS. M/S AGRASEN AGRO INDUSTRIES PVT. LTD., C-BLOCK, 6/7, MULTIMETALS CAMPUS, LARGE SCALE INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCA 0206 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 1205/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOTA. CUKE VS. M/S AGRASEN AGRO INDUSTRIES PVT. LTD., C-BLOCK, 6/7, MULTIMETALS CAMPUS, LARGE SCALE INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACCA 0206 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 2 IZR;K{KSI.K @ C.O. NO. 48/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1205/JP/2018) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR 2011-12 M/S AGRASEN AGRO INDUSTRIES PVT. LTD., PLOT NO. 6 AND 7, C-BLOCK, MULTIMETALS LTD. CAMPUS, KANSUA ROAD, LARGE SCALE INDUSTRIAL AREA, KOTA. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, ROOM NO. 212, 2 ND FLOOR, C.R. BUILDING, RAWAT BHATA ROAD, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 6604 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) & SHRI GULSHAN AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22/01/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/03/2019 VKNS'K@ ORDER PER: R.C. SHARMA,A.M. THESE ARE CROSS APPEALS BY THE ASSESSEE AND THE RE VENUE FOR THE A.Y. 2010-11, ONE REVENUES APPEAL FOR THE A.Y. 201 1-12 AND ONE CROSS OBJECTION BY THE ASSESSEE FOR THE A.Y. 2011-12 RESP ECTIVELY AGAINST THE ORDER PASSED BY THE LD. CIT(A) IN THE MATTER OF ORDE R PASSED U/S 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE GROUNDS TAKEN IN THE CROSS APPEALS BY THE ASSESS EE AND THE REVENUE ARE AS UNDER: GROUNDS OF ASSESSEES APPEAL FOR THE A.Y. 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153 A READ WITH SECTION 143(3) OF THE IN COME TAX ACT 1961 ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 3 IS BAD IN LAW, VOID AB-INITIO, AND DESERVES TO BE A NNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT (A) ERRED IN HOLDING THAT TH E CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VIEW OF SLPS ADMITTE D IN VARIOUS CASES. THE ID. CIT (A) FURTHER ERRED IN HOLDING THA T THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS FOR ACADEMIC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AB INITIO. THE FINDINGS OF ID CIT(A) IN THIS REGARD ARE PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE ID. AO PASSED T HE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPP ORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROV IDERS, THEREFORE THE ASSESSMENT ORDER OUGHT TO HELD AS BAD IN LAW AN D DESERVES TO BE ANNULLED. 3. THAT THE ORDER OF THE ID CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERVERSE, B ASED ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDENCE, AND AGAINST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRMED BY ID. CI T (A) DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT (A) ERRED IN CONFIRMING THE ADDITIONS MADE U/S 68 O F THE INCOME TAX ACT, 1961 BY: - (A) SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGE D ACCOMMODATION ENTRY PROVIDERS RECORDED BY SOME OTHE R AUTHORITIES IN SOME OTHER CASES/ACTIONS AND THE OPP ORTUNITY TO CROSS EXAMINATION WAS ALSO NOT PROVIDED TO ASSESSEE . (B) GIVING A CONTRADICTORY FINDING THAT A DOUBT IS RAISED ON THE IDENTITY AND GENUINENESS OF THE COMPANY WHOSE NAME IS MENTIONED IN THE STATEMENT OF ACCOMMODATION ENTRY P ROVIDERS AS WELL AS REPORTS OF DDIT (INV.)-KOLKATTA. (C) HOLDING THAT THE ASSESSEE HAS NOT ADDUCED ANY E VIDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE A SSESSMENT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 4 ORDER THOUGH DETAILED PAPER BOOK FOR RELEVANT AY AN D COMMON PAPER BOOKS HAVE BEEN SUBMITTED, AND (D) HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FO UND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDER. F URTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATTA. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 67,8 5,000/- ON ACCOUNT OF UNSECURED LOAN RECEIVED BY THE ASSESSEE FROM FOL LOWING PARTY AND ERRONEOUSLY HELD THAT THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE UNDER MENTIONED COMPANY IS DOUBTFUL: - NAME OF THE COMPANY FROM WHOM LOAN RECEIVED ADDITION DURING THE YEAR AMOUNT MAXIMUM BALANCE DURING THE YEAR IN ACCOUNT AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED JALSAGAR COMMERCE PVT. LTD 67,85,000 62,85,000 SHRI ANAND SHARMA THE CIT(A) FURTHER ERRED IN CONFIRMING THE ADDITIO N OF RS. 67,85,000/- AS AGAINST ACTUAL ADDITION OF RS. 62,85,000/- MADE BY THE LD. A.O. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE ID. CIT(A) ERRED IN REJECTING THE THEORY OF PEAK CREDIT AND ERRED IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLING AND ROTATION OF FUNDS. 7. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, T O DELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE H EARING OF APPEAL. GROUNDS OF REVENUES APPEAL FOR THE A.Y. 2010-11 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 1,45,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPL AINED SHARE APPLICATION MONEY ALLEGEDLY OBTAINED BY THE ASSESSE E FROM M/S TEAC CONSULTANTS PVT. LTD. AND M/S SANGAM DISTRIBUTORS P VT. LTD., M/S TECH CONSULTANTS PVT. LTD. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 5 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF SH ARE APPLICATION MONEY BY OBSERVING THAT THE ALLEGED INVESTOR COMPAN IES M/S TEAC CONSULTANTS PVT. LTD. AND M/S SANGAM DISTRIBUTORS P VT. LTD., M/S TECH CONSULTANTS PVT. LTD. ARE NOT SHELL COMPANIES WITHO UT CONSIDERING THE FINANCIAL STATEMENTS OF THESE COMPANIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S TEAC CONSULTANTS PVT. L TD. AND M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TECH CONSULTANTS PVT. LTD. MERELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEM ENT ON OATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAILABLE ON RECO RD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S TEAC CONSULTANTS PVT. L TD. AND M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TECH CONSULTANTS PVT. LTD. DESPITE THE FACT THAT THE DIRECTORS OR PRINCIPAL OFFICERS O F THESE COMPANIES WERE NEVER PRODUCED BEFORE THE AO FOR EXAMINATION D ESPITE NUMBER OF OPPORTUNITIES PROVIDED BY THE AO FOR PRODUCING A ND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESSED ITS IN ABILITY IN PRODUCING THE LENDERS NOR PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S TEAC CONSULTANTS PVT. L TD. AND M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TECH CONSULTANTS PVT. LTD. MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATED IN AS SESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICERS WERE ALSO PRODUCED BEFO RE THE AO DESPITE THE FACT THAT EVEN THE DIRECTORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF TH E ALLEGED TRANSACTIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA CASTLES (P ) LTD VS CIT(2015) ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 6 56 TAXMANN.COM 18(SC) WHEN THERE WERE GENUINE CONCE RNS OF THE GENUINENESS OF THE TRANSACTIONS. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 53,523/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 14A OF THE IT ACT. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. GROUNDS OF REVENUES APPEAL FOR THE A.Y. 2011-12 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 1,20,00,000/- MADE BY THE AO U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPL AINED SHARE APPLICATION MONEY ALLEGEDLY OBTAINED BY THE ASSESSE E FROM M/S ISIS MERCANTILE PVT. LTD. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF SH ARE APPLICATION MONEY BY OBSERVING THAT THE ALLEGED INVESTOR COMPAN Y M/S ISIS MERCANTILE PVT. LTD. IS NOT SHELL COMPANY WITHOUT C ONSIDERING THE FINANCIAL STATEMENTS OF THE COMPANY. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S ISIS MERCANTILE PVT. LT D. MERELY FOR THE REASON THAT EVIDENCES IN THE FORM OF STATEMENT ON O ATH OF THE RELEVANT ENTRY OPERATORS WERE NOT AVAILABLE ON RECORD. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S ISIS MERCANTILE PVT. LT D. DESPITE THE FACT THAT THE DIRECTOR OR PRINCIPAL OFFICER OF THE COMPA NY WAS NEVER PRODUCED BEFORE THE AO FOR EXAMINATION DESPITE NUMB ER OF OPPORTUNITIES PROVIDED BY THE AO FOR PRODUCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESSED ITS INABIL ITY IN PRODUCING THE LENDERS NOR PRODUCED THEM EITHER. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 7 ALLEGEDLY OBTAINED FROM M/S ISIS MERCANTILE PVT. LT D. MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATED IN ASSES SMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTOR OF LENDER C OMPANY AND SOME DIRECTORS/OFFICERS WERE ALSO PRODUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECTORS WHICH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE GENUINENESS OF THE ALLEGED TRANSAC TIONS. 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS BY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CONSID ERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA CASTLES (P ) LTD VS CIT(2015) 56 TAXMANN.COM 18(SC) WHEN THERE WERE GENUINE CONCE RNS OF THE GENUINENESS OF THE TRANSACTIONS. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 1,98,478/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTIO N 14A OF THE IT ACT. THE APPELLANT CRAVE, LEAVE OR RESERVING THE RIGHT TO AMEND MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. GROUNDS OF ASSESSEES C.O. FOR THE A.Y. 2011-12 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF THE INC OME TAX ACT, 1961 IS BAD IN LAW, VOID-AB-INITIO, AND DESERVES TO BE A NNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT(A) ERRED IN HOLDING THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN VIEW OF SLPS ADMITT ED IN VARIOUS CASES. THE LD. CIT(A) FURTHER ERRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS FOR ACADEMIC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN NOT DECLARING THE ASSESSMENT ORDER AS BAD IN LAW AND VOID AN INITIO. IT IS CONTENDED THAT THE A.O. PASSE D THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTERM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPP ORTUNITY OF CROSS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 8 EXAMINATION OF THE ALLEGED ACCOMMODATION ENTRY PROV IDERS, THEREFORE, THE ASSESSMENT ORDER OUGHT TO HOLD AS BAD IN LAW AN D DESERVES TO BE ANNULLED. THE FINDINGS OF THE LD. CIT(A) IN THIS RE GARD ARE PERVERSE AND ERRONEOUS. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF APPEAL. 2. COMMON GROUNDS HAVE BEEN TAKEN IN BOTH THE APPEA LS THEREFORE ALL THE APPEALS AS WELL AS THE CROSS OBJECTION ARE B EING HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, A COMPOSITE ORDER IS BEING PASSED. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSIN ESS OF LEASING OF PROPERTY AND PLANT AND MACHINERY. THERE WAS A SEARCH AT VARIOUS PREMISES OF M/S KOTA DALL MILL GROUP, KOTA ON 02/7/ 2015. THE ASSESSEE COMPANY WAS CARRYING OUT THE LEASING BUSINESS. IT HA D LEASED OUT ITS PROPERTY AND PLANT & MACHINERY TO M/S KOTA DALI MIL L. THE COMPANY WAS ALSO ENGAGED IN THE BUSINESS OF TRADING DURING THE YEAR UNDER CONSIDERATION. THE RETURN OF INCOME WAS E-FILED ON 3 1.08.2010 U/S 139(1) OF THE ACT FOR THE A.Y. 2010-11 DECLARING TO TAL INCOME AT RS. 39,010/-. FURTHER, NOTICE U/S 153A OF THE IT ACT, 1 961 WAS ISSUED ON 05.07.2016, WHICH WAS SERVED UPON THE ASSESSEE THRO UGH INCOME TAX INSPECTOR. THE RETURN OF INCOME WAS E-FILED ON 13.07. 2016 U/S 153A OF I. T. ACT, 1961 FOR THE A.Y. 2010-11 DECLARING TOTAL INCOME AT RS. 39,010/-. THEREAFTER, NOTICE U/S 142(1)/143(2) OF T HE IT ACT, 1961 WAS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 9 ISSUED ON 26.09.2016 ALONGWITH QUESTIONNAIRE/ ANNEXU RE-A, THROUGH INCOME TAX INSPECTOR REQUIRING CERTAIN DETAILS/INFOR MATION, WHICH WAS SERVED UPON THE ASSESSEE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE ADDITION U/S 68 OF THE ACT. THE ASSESSI NG OFFICER HAS RELIED UPON SOME OF THE DOCUMENTS/INFORMATION/DETAILS/THIR D PARTY INFORMATION/STATEMENT RECORDED BY THE INVESTIGATION WING. HOWEVER, THE SAID INFORMATION/DOCUMENTS/STATEMENTS RECORDED WERE NOT CONFRONTED WITH THE ASSESSEE AND OPPORTUNITY OF CROS S-EXAMINATION OF WITNESSES WAS NOT GIVEN DESPITE OF REPEATED REQUESTS OF THE ASSESSEE. THE ASSESSING OFFICER HELD THAT THE DIRECTORS/PRINC IPAL OFFICERS WERE NOT PRODUCED FOR PERSONAL VERIFICATION AND OBSERVED THA T THE STATEMENT OF FOUR PERSONS ACCEPTING THE ACCOMMODATION ENTRY WAS T HERE. THE ASSESSING OFFICER ALSO RELIED ON THE SURRENDER MADE BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS ON ACCOUNT OF LONG TE RM CAPITAL GAINS. BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER FILED DOCUMENTS VIZ CONFIRMATION, ACKNOWLEDGEMENT OF RETURN, BALANCE SHE ET, BANK STATEMENT, AFFIDAVIT, MASTER DATA OF ROC, ASSESSMEN T ORDER OF CASH CREDITORS U/S 143(3) FILED. WHERE EVER SUMMONS ISSU ED BY DDIT, KOLKATA, WAS COMPLIED BY SUBMITTING THE REQUIRED INF ORMATION. WITH REGARD TO STATEMENT OF FOUR PERSONS SO RECORDED, IT WAS SUBMITTED THAT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 10 THESE WERE RECORDED IN THE BACK OF THE ASSESSEE AND NO OPPORTUNITY OF CROSS EXAMINATION WAS GIVEN IN SPITE OF REQUESTS VID E LETTER DATED 11/12/2017 PLACED ON RECORD. WITH REGARD OF SURREND ER OF LONG TERM CAPITAL GAIN BY SHRI RAJENDRA AGARWAL, IT WAS CONTEND ED BY THE ASSESSEE THAT IT HAS NO BEARING WITH THE ASSESSMENT OF THIS C OMPANY AS THE COMPANY IS SEPARATE ASSESSEE. HOWEVER, THE ASSESSING OFFICER REJECTED THE ASSESSEES SUBMISSION AND MADE FOLLOWING ADDITIO NS: ASSESSMENT YEAR NATURE OF ADDITION DESCRIPTION OF ADDITION ADDITION MADE AMOUNT TOTAL ADDITIONS FOR THE ASSESSMENT YEAR 2010 - 11 SHARE CAPITAL & PREMIUM M/S SANGAM DISTRIBUTORS PVT. LTD. 1,30,00,000 SHARE CAPITAL & PREMIUM M/S TEAC CONSULTANTS PRIVATE LIMITED. 15,00,000 UNS ECURED LOAN M/S JALSAGAR COMMERCE PVT. LTD. 62,85,000 OTHERS DISALLOWANCE U/S 14A 53,523 2,08,38,523 2011 - 12 SHARE CAPITAL & PREMIUM M/S ISIS MERCANTILES PVT. LTD. 1,20,00,000 OTHERS DISALLOWANCE U/S 14A 1,98,478 1,21,98,478 5. ASSESSEE APPROACHED BEFORE THE LD. CIT(A) AGAINS T THE ORDER OF THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2010-11. 6. THE LD. CIT(A) VIDE LETTER DATED 21-03-2018 CALLED REMAND REPORT FROM THE AO AND DIRECTED THE LD AO TO PROVIDE THE C OPY OF VARIOUS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 11 DOCUMENTS RELIED BY HIM AND TO PROVIDE THE OPPORTUN ITY OF CROSS- EXAMINATION OF WITNESS. THE AO VIDE LETTER DATED 12-0 4-2018 PROVIDED COPY OF VARIOUS INQUIRY REPORTS AND ASKED THE ASSES SEE TO INTIMATE THE NAME OF PERSONS REQUIRED FOR CROSS EXAMINATION. THE ASSESSEE VIDE LETTER DATED 20/04/2018 FILED ON 24/04/2018 INTIMAT ED THE NAME OF PERSONS REQUIRED FOR CROSS-EXAMINATION. THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS ALWAYS AVAILABLE FOR CROSS-EXAM INATION SUBJECT TO PRIOR INFORMATION OF ONE WEEK. THE ASSESSEE VIDE LETT ER DATED 04/05/2018 (FILED ON 07/05/2018 SUBMITTED THE INFOR MATION DESIRED BY THE AO IN REMAND PROCEEDINGS. 7. THE AO VIDE LETTER DATED 07/05/ASKED THE ASSESSEE TO FILE POWER OF ATTORNEY OF PERSONS WHO WILL MAKE CROSS EXAMINATIO N OF WITNESS AND GIVE ASSURANCE TO BEAR ALL THE EXPENSES OF CROSS EX AMINATION INCLUDING COST OF TRAVELLING ETC. THE ASSESSEE VIDE LETTER DAT ED 18/05/2018 INTIMATED THE LD AO THAT THE ASSESSEE IS READY TO B EAR THE COST OF CROSS- EXAMINATION AND IT WOULD LIKE TO CROSS-EXAMINE THE WI TNESSES AT KOTA. THE AO SUBMITTED THE REMAND REPORT TO LD. CIT(A) VIDE LETTER DATED 21/05/2018, COPY OF WHICH WAS FORWARDED TO ASSESSEE BY LD CIT(A) VIDE LETTER DATED 28/05/2018 FOR A.Y 2010-11 AND 2011-12 . HOWEVER, AT THIS STAGE ALSO, OPPORTUNITY OF CROSS-EXAMINATION OF WITN ESS WAS NOT GIVEN TO THE ASSESSEE. THE A.O. ASKED THE LD CIT(A) TO ISSUE DETAILED GUIDELINES ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 12 AND PROCEDURE TO BE FOLLOWED BY HIM FOR CONDUCT OF C ROSS-EXAMINATION. THE ASSESSEE FILED REJOINDER ON THE REMAND REPORT OF THE AO. 8. THE LD CIT(A) PARTLY ALLOWED THE APPEAL BY DELETI NG/SUSTAINING THE ADDITIONS AS UNDER:- ASSESSME NT YEAR NATURE OF ADDITION DESCRIPTION OF ADDITION ADDITION MADE BY AO AMOUNT ADDITION DELETED BY CIT(A) ADDITION SUSTAINED BY CIT(A) 2010 - 11 UNSECURED LOAN M/S JALSAG AR COMMERCE PVT. LTD 62,85,000 67,85,000 SHARE CAPITAL & PREMIUM M/S SANGAM DISTRIBUTORS PVT. LTD 1,30,00,000 1,30,00,000 SHARE CAPITAL & PREMIUM M/S TEAC CONSULTANTS PRIVATE LIMITED 15,00,000 15,00,000 OTHERS DISALLOWANCE U/S 14A 55,523 55,52 3 2011 - 12 SHARE CAPITAL & PREMIUM M/S ISIS MERCANTILES PVT. LTD 1,20,00,000 1,20,00,000 OTHERS DISALLOWANCE U/S 14A 1,98,478 1,98,478 AGGRIEVED BY THE ORDER OF LD CIT(A), BOTH ASSESSEE A ND DEPARTMENT IS IN APPEAL BEFORE US. 9. RIVAL CONTENTIONS HAVE BEEN HEARD THE RECORD PER USED. AT THE OUTSET, THE LD AR OF THE ASSESSEE PLACED ON RECORD THE ORDER OF THIS TRIBUNAL IN THE CASE OF KOTA DALL MILL FOR THE A.Y. 2010-11 AND M/S BARAN ROLLER FLOUR MILLS PVT. LTD. FOR THE A.Y. 2010-11 A ND CONTENDED THAT THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 13 ASSESSEE HAS TAKEN THE SIMILAR GROUND IN THE GROUP MAIN LEAD CASE M/S KOTA DALL MILL (IN ITA 997/JPR/2018, FOR A.Y 2010- 11 ). HON'BLE ITAT HAS FOLLOWED THIS DECISION IN ASSESSEE'S ANOTHER GRO UP CASE M/S BARAN ROLLER FLOUR MILLS PVT. LTD. (IN CO 45/JPR/2018 A.Y 2010-11). THE FACTS AND CIRCUMSTANCES OF THIS CASE ARE SAME TO M/S KOTA DALL MILL/ M/S BARAN ROLLER FLOUR MILLS PVT. LTD. 10. IT WAS ALSO ARGUED BY THE LD AR THAT THE COMPLET ED ASSESSMENT CANNOT BE REVIEWED WITHOUT HAVING INCRIMINATING MATE RIAL. IT WAS ALSO CONTENDED THAT THE PROVISIONS OF SECTION 153A OF TH E ACT CANNOT BE APPLIED IN RESPECT OF ASSESSMENT YEAR IN RESPECT OF WHICH ASSESSMENT HAS ALREADY BEEN COMPLETED UNLESS SOME INCRIMINATIN G MATERIAL/INFORMATION COMES IN THE POSSESSION/KNOWLED GE OF THE ASSESSING OFFICER DURING THE COURSE OF SEARCH PROCE EDINGS. THE ASSESSMENT FOR AY 2010-11 AND AY 2011-12 WERE NOT PE NDING AS ON THE DATE OF SEARCH, AS SHOWN BY FOLLOWING TABLE. ASSESSMENT YEAR DATE OF FILING OF RETURN U/S 139(1) TIME LIMIT PRESCRIBED FOR ISSUE OF NOTICE U/S 142(1)/143(2) OF I TAX ACT 2010-11 31-08-2010 30-09-2011 2011-12 15-09-2011 30-09-2012 IN SUPPORT OF THE SUBMISSIONS MADE HEREIN, THE ASSE SSEE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRECEDENTS: (I) HON'BLE DELHI HIGH COURT IN PCIT VS KURELE PAPE R MILLS PVT LTD [2016] 380 ITR 571 (DELHI) HAS HELD THAT WHERE NO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 14 INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISS UED WAS FOUND DURING THE COURSE OF SEARCH, ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING SECTION 68 FOR THE PURPOSE OF MAKING AD DITIONS ON ACCOUNT OF SHARE CAPITAL. (COPY AT CASE LAW PB 2-3 FILED IN CASE OF M/S KOTA DALL MILL) THE REVENUE FILED SLP BEFORE HON'BLE SUPREME COURT AGAINST THE ABOVE ORDER, WHICH HAS BEEN DISMISSED VIDE SLP NO 21186/2015 DATED 07/12/2015 (COPY AT CASE LAW PB 2- 3) THEREFORE, HONBLE SUPREME COURT HAS APPROVED THE F INDINGS MADE BY HON'BLE DELHI HIGH COURT. (II) HONBLE DELHI HIGH COURT IN PRINCIPAL COMMISSI ONER OF INCOME TAX CENTRAL-2, NEW DELHI V. MEETA GUTGUTIA [2017] 3 95 ITR 526. IN THIS CASE HONBLE DELHI HIGH COURT THE ENTIRE GAMUT OF THE CASE LAW HAD BEEN ANALYSED AND THE LEGAL POSITI ON WAS REITERATED THAT UNLESS THERE IS INCRIMINATING MATER IAL QUA EACH OF THE AYS IN WHICH ADDITIONS ARE SOUGHT TO BE MADE, P URSUANT TO SEARCH AND SEIZURE OPERATION, THE ASSUMPTION OF JUR ISDICTION UNDER SECTION 153A OF THE ACT WOULD BE VITIATED IN LAW. (COPY AT CASE LAW PB 4-26 IN CASE OF M/S KOTA DALL MILL) THE REVENUE FILED SLP BEFORE HON'BLE SUPREME COURT AGAINST THE ABOVE ORDER, WHICH HAS BEEN DISMISSED VIDE SLP NO 1812/2018 DATED 02/07/2018 (COPY AT CASE LAW PB 27- 28 IN CASE OF M/S KOTA DALL MILL) THEREFORE, HONBLE SUPREME COURT HAS APPROVED THE FINDINGS MADE BY HON'BLE DELHI HIG H COURT. (III) HONBLE DELHI HIGH COURT IN THE CASE OF PR. C IT CENTRAL-2 V/S RAM NARAIN JINDAL IN ITA 1020,1021,1023/2017 VIDE O RDER DATED 21/11/2017 (COPY AT CASE LAW PB 29-30 IN CASE OF M/S KOTA DALL MILL) RELYING THE DECISION OF KABUL CHAWL A HAS HELD THAT:- 'IN THESE APPEALS, THE ADDITION MADE UNDER SECTION 153A WERE SET ASIDE BY THE TRIBUNAL, ON APPLICATION OF T HE DECISION IN COMMISSIONER OF INCOME TAX VS. KABUL CHAWLA, 380 ITR 573 (DEL.). IT WAS HELD THAT IN THE ABSENCE OF ANY INCRIMINATI NG MATERIAL CONCERNING SUCH ADDITIONS FOUND DURING THE SEARCH PROCEEDINGS, THE MATTER, WHICH WAS EXAMINED EARLIER IN THE ASSESSMENT PROCEEDINGS, COULD NOT BE REOPENED.' THE REVENUE FILED SLP BEFORE HON'BLE SUPREME COURT AGAINST THE ABOVE ORDER, WHICH HAS BEEN DISMISSED VIDE SLP NO 23833/2018 DATED 03/08/2018 (COPY AT CASE LAW PB 31 -32 IN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 15 CASE OF M/S KOTA DALL MILL) THEREFORE, HONBLE SUPREME COURT HAS APPROVED THE FINDINGS MADE BY HON'BLE DELHI HIG H COURT. (IV) HONBLE DELHI HIGH COURT HAS DECIDED THE LEGAL POSITION IN THE CASE OF CIT VS KABUL CHAWLA 380 ITR 573 (DEL) (COPY AT CASE LAW PB 114-125 IN CASE OF M/S KOTA DALL MILL) AFTER ANALYZING THE CASE LAWS EARLIER DECIDED BY VARIOUS COURTS AND HELD THAT SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALR EADY ASSESSED. V) HON'BLE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA ) VS ASTT COMMISSIONER OF INCOME TAX (2013) 259 CTR (RAJ) 281 . (COPY AT CASE LAW PB 33-43 IN CASE OF M/S KOTA DALL MILL) HONBLE JURISDICTIONAL HIGH COURT HAS ANALYZED THE PROVISIONS OF SECTION 153A IN DETAIL AND HELD THAT IN CASE NOT HING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQU ISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSES SMENTS DOES NOT ARISE, WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE ABATED ASSESSMENT UNDER SECOND P ROVISO WHICH IS REQUIRED TO BE ASSESSED. (VI) HONBLE MUMBAI HIGH COURT IN THE CASE OF COMMISSION ER OF INCOME TAX & ORS. VS DEEPAK KUMAR AGARWAL & ORS. (2 017) 100 CCH 0011 (COPY AT CASE LAW PB 129-135 IN CASE O F M/S KOTA DALL MILL) (VII) HONBLE GUJARAT HIGH COURT IN PRINCIPAL COMM ISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION PVT. LTD. (2016) 387 ITR 529 (GUJ); (COPY AT CASE LAW PB 181-193 IN CASE OF M/S KOTA DALL MILL) (VIII) HONBLE KARNATAKA HIGH COURT IN CIT V. IBC K NOWLEDGE PARK PVT. LTD. (2016) 385 ITR 346 (KAR) (COPY AT CASE LA W PB 160- 180) (IX) KOLKATA HIGH COURT IN PR. CIT-2 V. SALASAR STO CK BROKING LTD. 2016-TIOL-2099-HC-KOL-IT (COPY AT CASE LAW PB 213-2 14 IN CASE OF M/S KOTA DALL MILL) (X) HONBLE BOMBAY HIGH COURT IN CIT V. GURINDER SI NGH BAWA (2016) 386 ITR 483 (BOM). (COPY AT CASE LAW PB 207- 209 IN CASE OF M/S KOTA DALL MILL) (XI) HONBLE DELHI HIGH COURT IN THE CASE OF PR. CI T CENTRAL-3 V/S DHARAMPAL PREMCHAND LTD IN ITA 512,513,514/2016 VID E ORDER ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 16 DATED 21/08/2017. (COPY AT CASE LAW PB 194-198 IN C ASE OF M/S KOTA DALL MILL) (XII) HONBLE DELHI HIGH COURT IN THE CASE OF PR. C IT -2 V/S M/S GLOBAL REALTY CREATIONS LTD, M/S GLOBAL HERITAGE VE NTURE LTD IN ITA 1097-1098/2017,1099/2017 &1100 /2017 VIDE OR DER DATED 04/12/2017 (COPY AT CASE LAW PB 199-201 IN CA SE OF M/S KOTA DALL MILL) (XIII) HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT -6 V/S NEW HORIZON BUILDWELL P. LTD. IN ITA 1107/2017 & 1112/2 017 VIDE ORDER DATED 05/12/2017 (COPY AT CASE LAW PB 202-203 IN CASE OF M/S KOTA DALL MILL) (XIV) HONBLE DELHI HIGH COURT IN THE CASE OF PR. C IT -1 V/S RAKESH KUMAR GARG & KUSUM LATA GARG IN ITA 984/2017, 114/2 018, 94/2018 & 1029/2017 VIDE ORDER DATED 12/03/2018. (C OPY AT CASE LAW PB 204-206 IN CASE OF M/S KOTA DALL MILL) (XV) PRINCIPAL COMMISSIONER OF INCOME-TAX-18 V. MS. LATA JAIN [2016] 384 ITR 543 (DELHI) (COPY AT CASE LAW PB 158 -159 IN CASE OF M/S KOTA DALL MILL) (XVI) HONBLE ITAT JAIPUR HAS DECIDED SEVERAL CASES FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAI STEELS. HOWEVER, SOME OF THE CASES ARE CITED HERE FOR READY REFERENCE:- A) ITAT JAIPUR IN THE CASE OF M/S RAJASTHAN FORT & PALACE PVT. LTD. VS. THE DCIT, CENTRAL CIRCLE-3, JAIPUR. I TA NO 597 TO 599 /JP/2017 ORDER DATED 24/01/2018 (COPY AT CASE LAW PB 80-94 IN CASE OF M/S KOTA DALL MILL) B) 2017 (9) TMI 459 - ITAT JAIPUR DR. VIKRAM GOYAL VERSUS THE DCIT, CENTRAL CIRCLE-1, JAIPUR ITA NO 174/JP/2017 ORDER DATED 24/08/2017 (COPY AT CASE LA W PB 95-104 IN CASE OF M/S KOTA DALL MILL) (C) 2017 (9) TMI 638 - ITAT JAIPUR M/S. SHYAM SAROV ER BUILDCON PVT. LTD. & M/S. SHIVSAGAR BUILDCON PVT. LTD. VERSUS THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, JAIPUR ITA NO 710/JP/2016 ORDER D ATED 27/07/2017 (COPY AT CASE LAW PB 105-113 IN CASE OF M/S KOTA DALL MILL) ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 17 (D) THE HONBLE ITAT, JAIPUR BENCH, JAIPUR IN THE C ASE OF M/S JADAU JEWELLERS & MANUFACTURERS PVT. LTD IN ITA NO. 686/JP/2014 DATED 14.12.2015 COPY AT CASE LAW PB 44-54 IN CASE OF M/S KOTA DALL MILL) THUS, THE LAW AS ENVISAGED BY THE JURISDICTIONAL HI GH COURT AND VARIOUS OTHER HIGH COURT, FOLLOWED BY HONBLE ITAT IS THAT, IF NO INCRIMINATING MATERIAL HAS BEEN FOUND, THEN NO ADDITION CAN BE MA DE IN THE ASSESSMENT COMPLETED UNDER SECTION 153A WHICH HAS N OT BEEN ABATED. IN SUPPORT OF THE CONTENTION THAT THE STATEMENT CAN NOT BE TAKEN AS INCRIMINATING MATERIAL, RELIANCE WAS PLACED ON THE F OLLOWING JUDICIAL PRECEDENTS: (I) HONBLE DELHI COURT IN COMMISSIONER OF INCOME TAX V. HARJEEV AGGARWAL (2016) 290 CTR 263 HELD THAT STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT OF THE AC T DO NOT BY THEMSELVES CONSTITUTE INCRIMINATING MATERIAL. (COPY AT CASE LAW PB 496-508 IN CASE OF M/S KOTA DA LL MILL) (II) HONBLE DELHI HIGH COURT [2017] 397 ITR 82 IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI VERSUS BEST INFRASTRUCTURE (INDIA) PVT. LTD WHEREIN IN PAR A 38 OF THE ORDER HAS HELD THAT STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT OF THE ACT DO NOT BY THEMSELVES CONS TITUTE INCRIMINATING MATERIAL AS HAS BEEN EXPLAINED BY THI S COURT IN COMMISSIONER OF INCOME TAX V. HARJEEV AGGARWAL (SUP RA). (COPY AT CASE LAW PB 509-523 IN CASE OF M/S KOTA DA LL MILL) THUS THE AS A RESULT OF SEARCH THE DEPARTMENT DID N OT FIND ANY POSITIVE MATERIAL AGAINST THE ASSESSEE TO SHOW THAT THE UNSE CURED LOAN AND SHARE CAPITAL AND SHARE PREMIUM CAPITAL RECEIVED FROM VAR IOUS COMPANIES ARE NOT GENUINE. IN VIEW OF ABOVE SUBMISSION THIS IS TO SUBMIT THAT ORDER PASSED U/S 153A R.W.S. 143(3) OF INCOME TAX ACT, 1961 IS BAD IN LAW, VOID-AB INITIO AND DESERVE TO BE ANNULLED AND THE FINDINGS MADE BY LD CIT(A) DESERVE S TO BE SET ASIDE. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 18 11. IN SUPPORT OF THE PROPOSITION THAT THE ASSESSME NT ORDER PASSED WITHOUT GIVING OPPORTUNITY OF CROSS EXAMINATION AMOU NTS TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, THEREFORE, THE ASSES SMENT ORDER OUGHT TO HAVE BEEN HELD AS BAD IN LAW AND DESERVES TO BE ANNU LLED. RELIANCE WAS PLACED ON THE DECISION IN THE CASE OF M/S BARAN ROL LER FLOUR MILLS PVT. LTD. FOR THE A.Y. 2010-11 AND 2011-12. IT WAS ARGUED BY THE LD AR THAT THE ASSESSEE HAS TAKEN THE SIMILAR GROUND IN THE GR OUP'S MAIN LEAD CASE M/S KOTA DALL MILL (IN ITA 997/JPR/2018, ITA 998/ JPR/2018, ITA 999/JPR/2018, ITA 1000/JPR/2018, ITA 1119/JPR/2018, ITA 1001/JPR/2018 AND ITA 1002/JPR/2018 FOR A.Y 2010-11 TO A.Y 2016- 17). HON'BLE ITAT HAS FOLLOWED ITS FINDINGS ON THIS I SSUE IN ASSESSEE'S ANOTHER GROUP CASE M/S BARAN ROLLER FLOUR MILLS PVT . LTD (IN CO 45/JPR/2018 & CO 46/JPR/2018). THE FACTS AND CIRCUM STANCES OF THIS CASE ARE SAME TO M/S KOTA DALL MILL. THE ASSESSEE R ELIES UPON FINDINGS OF HON'BLE TRIBUNAL IN THE CASE OF M/S KOTA DALL MIL L WHICH IS AT PG 76-87 OF THE ORDER OF HON'BLE ITAT. 12. FROM THE RECORD WE ALSO FOUND THAT THE ASSESSEE MADE REPEATED REQUESTS FOR CROSS EXAMINATION OF WITNESSES. THE LD A O DID NOT PROVIDE THE OPPORTUNITY OF CROSS EXAMINATION OF WITNESSES. TH E ASSESSEE RAISED THIS ISSUE BEFORE LD CIT(A). LD CIT(A) CALLED REMAND REPORT FROM AO AND DIRECTED TO PROVIDE THE ASSESSEE OPPORTUNITY OF CRO SS EXAMINATION. LD ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 19 AO DURING THE REMAND PROCEEDING ASKED THE ASSESSEE THE NAME OF PERSONS TO WHOM THE ASSESSEE WANTS TO CROSS EXAMINE AND TO GIVE ASSURANCE TO BEAR THE EXPENSES OF WITNESSES. THE ASSE SSEE PROVIDED THE NAME OF PERSONS TO WHOM IT WANTS TO CROSS EXAMINE AND GAVE ASSURANCE TO BEAR ALL THE COST RELATING TO CROSS EXAMINATION OF WITNESS. HOWEVER THE LD AO DID NOT PROVIDE THE OPPORTUNITY OF THE CR OSS EXAMINATION AND LD CIT (A) ALSO HELD THAT THERE WAS NO NEED TO GIVE T HE OPPORTUNITY OF CROSS EXAMINATION. THUS, THE LOWER AUTHORITIES VIOLA TED THE PRINCIPLE OF NATURAL JUSTICE, WHICH TENDERS THE ASSESSMENT VOID A B-INITIO. 13. IN SUPPORT OF THE ABOVE PROPOSITION, RELIANCE WA S PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF AN DAMAN TIMBER INDUSTRIES V/S COMMISSIONER OF CENTRAL EXCISE, KOLK ATA-II 2016 (15) SCC 785 (SC) (COPY AT CASE LAW PB 808-811 FILED IN CASE OF M/S KOTA DALL MILL), WHEREIN HON'BLE SUPREME COURT HAS HELD THAT:- ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNT ED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDIC ATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOUL D BE PERTINENT TO NOTE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 20 THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATI NG AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY THE ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUT HORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF TH IS PLEA IS TOTALLY UNTENABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROS S-EXAMINATION OF THE SAID DEALERS COULD NOT HAVE BROUGHT OUT ANY MATERIA L WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT THEMSELVES TO EXP LAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS- EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPEL LANT WANTED FROM THEM . II) COMMISSIONER OF INCOME TAX V. ASHWANI GUPTA, 20 10 322 ITR 396 (DEL); THE DELHI HIGH COURT HELD THAT ONCE THERE IS A VIO LATION OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS WHEN ITS SEIZED MATERIAL WAS NOT PROVIDED TO AN ASSESSEE NOR WAS HE PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER REL IED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIAL OF OPPO RTUNITY AND THEREFORE VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER SINCE THE ASSESSING OFFICER HAD FAILED TO PROVIDE COPIES OF SEIZED MATE RIAL TO THE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE TH E PARTY CONCERNED. THE DIVISION BENCH HELD THAT ONCE THERE IS VIOLATIO N OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MATERIAL WAS NOT PROVIDED TO THE ASSESSEE NOR WAS GIVEN OPPORTUNITY OF CROSS EXAMINI NG THE PERSON WHOSE STATEMENT WAS BEING USED AGAINST THE ASSESSEE THE ORDER COULD NOT BE SUSTAINED. III) H.R. MEHTA V. ASSISTANT COMMISSIONER OF INCOME TAX 387 ITR 561(BOMBAY) ; ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 21 IN OUR VIEW IN THE LIGHT OF THE FACT THAT THE MONIE S WERE ADVANCED APPARENTLY ACCOUNT PAYEE CHEQUE AND WAS REPAID VIDE ACCOUNT PAYEE CHEQUE THE LEAST THAT THE REVENUE SHOULD HAVE DONE WAS TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO MEET THE CASE AGAINS T HIM BY PROVIDING THE MATERIAL SOUGHT TO BE USED AGAINST ASSESSEE IN ARRIVING BEFORE PASSING THE ORDER OF REASSESSMENT. THIS NOT HAVING BEEN DONE, THE DENIAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATT ER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT AND THEREFORE R ENDERS THE ORDERS PASSED BY THE CIT (A) AND THE TRIBUNAL VULNERABLE. IN OUR VIEW THE ASSESSEE WAS BOUND TO BE PROVIDED WITH THE MATERIAL USED AGAINST HIM APART FROM BEING PERMITTING HIM TO CROSS EXAMINE TH E DEPONENTS. DESPITE THE REQUEST DATED 15TH FEBRUARY, 1996 SEEKI NG AN OPPORTUNITY TO CROSS EXAMINE THE DEPONENT AND FURNISH THE ASSES SEE WITH COPIES OF STATEMENT AND DISCLOSE MATERIAL, THESE WERE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE ARE INCLINED TO ALLOW THE APPEAL O N THIS VERY ISSUE . IV) DECISION OF HONBLE ITAT JAIPUR BENCH IN THE CASE OF SHRI PRATEEK KOTHARI IN APPEAL NO. 159/JP/16 ORDER DATED 16/12/1 6 (COPY AT CASE LAW PB 827-848 FILED IN CASE OF M/S KOTA DALL MILL) IS APPLICABLE FOR THIS CASE. IN THE CASE OF SHRI PRATE EK KOTHARI THE ASSESSEE HAD REQUESTED FOR CROSS EXAMINATION OF SHR I SANBTOSH CHOUBEY SHRI AJIT SHARMA, SHRI RAJESH KUMAR SINGH AND OTHER PERSONS WHICH WAS DENIED BY THE LD. CIT(A). THE ITAT COORDINATE B ENCH IN THE CASE OF PRATEEK KOTHARI (SUPRA) HAS GIVEN VERDICT THAT W ITHOUT PROVIDING OPPORTUNITY OF CROSS-EXAMINATION OF THE MATERIALS G ATHERED AND STATEMENT RECORDED BEHIND THE ASSESSEE CANNOT BE US ED. IN THIS CASE HONBLE ITAT HAS HELD THAT:- 2.8 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE TRANSACTION UNDER QUESTION RELATES TO UNSECURED LOANS TAKEN BY THE ASSESSEE AMOUNTING TO RS 1 CRORES FROM M/S MEHUL GEMS PVT LTD DURING THE IMPUGNED ASSESSMENT YEAR AN D NOT ACCEPTING THE SAID LOAN TRANSACTION AS A GENUIN E TRANSACTION BY THE ASSESSING OFFICER AND THE RESULT ANT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 22 ADDITION MADE UNDER SECTION 68 OF THE ACT. UNDISPUT EDLY, THE PRIMARY ONUS TO ESTABLISH GENUINENESS OF THE LO AN TRANSACTION IS ON THE ASSESSEE. IN THE INSTANT CASE , THE ASSESSEE HAS PROVIDED THE NECESSARY EXPLANATION, FURNISHED DOCUMENTARY EVIDENCE IN TERMS OF TAX FILI NGS, AFFIDAVITS AND CONFIRMATION OF THE DIRECTORS, BANK STATEMENTS OF THE LENDER, BALANCE SHEET OF THE LEND ER COMPANY, AND AN INDEPENDENT CONFIRMATION HAS ALSO BEEN OBTAINED BY THE ASSESSING OFFICER TO SATISFY T HE CARDINAL TEST OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN TRANSACTION. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN ANY FINDING IN RESP ECT OF SUCH EXPLANATION, DOCUMENTARY EVIDENCE AS WELL AS INDEPENDENT CONFIRMATION. APPARENTLY, THE REASON FO R NOT ACCEPTING THE SAME IS THAT THE ASSESSING OFFICE R WAS IN RECEIPT OF CERTAIN INFORMATION FROM THE INVESTIG ATION WING OF THE TAX DEPARTMENT AS PER WHICH THE TRANSAC TION UNDER CONSIDERATION IS A BOGUS LOAN TRANSACTION. TH E SAID INFORMATION RECEIVED FROM THE INVESTIGATION WI NG THUS OVERWEIGHED THE MIND OF THE ASSESSING OFFICER. THE ASSESSING OFFICER STATED THAT THE PRIMARY ONUS IS O N THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE TRANSA CTION CLAIMED BY IT AND IF THE INVESTIGATION DONE BY THE DEPARTMENT LEADS TO DOUBT REGARDING THE GENUINENESS OF THE TRANSACTIONS, IT IS INCUMBENT ON THE ASSESSEE T O PRODUCE THE PARTIES ALONGWITH NECESSARY DOCUMENTS T O ESTABLISH THE GENUINENESS OF THE TRANSACTION. IN RE SPONSE, THE ASSESSEE SUBMITTED THAT SHRI BHANWARLAL JAIN IS NOT KNOWN TO HIM AND REGARDING VARIOUS INCRIMINATING DOCUMENTARY EVIDENCES SEIZED DURING THE COURSE OF SEARCH AND STATEMENTS RECORDED OF SHRI BHANWARLAL J AIN AND OTHER PERSONS, HE SPECIFICALLY REQUESTED THE AO TO PROVIDE COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENT OF ALL VARIOUS PERSONS RECORDED IN THIS R EGARD AND PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE SUCH PERSONS. HOWEVER, THE AO DIDNT PROVID E TO THE ASSESSEE COPIES OF SUCH INCRIMINATING DOCUME NTS AND STATEMENTS OF VARIOUS PERSONS RECORDED AND ALLO W THE CROSS-EXAMINATION OF ANY OF THESE PERSONS. WHIL E DOING SO, THE AO STATED THAT IN HIS STATEMENTS, BHANWARLAL JAIN HAD DESCRIBED THAT THEY ARE INDULGE D IN PROVIDING ACCOMMODATION ENTRIES OF BOGUS UNSECURED LOANS AND ADVANCES THROUGH VARIOUS BENAMI CONCERNS (70) OPERATED AND MANAGED BY THEM. THIS ADMISSION AUTOMATICALLY MAKES ALL THE TRANSACTIONS DONE BY TH EM AS MERE PAPER TRANSACTIONS AND IN THESE CIRCUMSTANC ES, FURTHER AS PER THE INFORMATION NAME AND ADDRESS OF ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 23 ASSESSEE AND THE BENAMI CONCERN THROUGH WHICH ACCOMMODATION ENTRY OF UNSECURED LOANS WAS PROVIDED IS APPEARING IN THE LIST OF BENEFICIARIES TO WHOM T HE SAID GROUP HAS PROVIDED. THIS ADMISSION IS SUFFICIENT TO REJECT THE CONTENTIONS OF THE ASSESSEE. FURTHER, REGARDING CROSS EXAMINATION, THE AO STATED THAT TH E RIGHT OF CROSS EXAMINATION IS NOT AN ABSOLUTE RIGHT AND IT DEPENDS UPON THE CIRCUMSTANCES OF EACH CASE AND ALS O ON THE STATUTE CONCERNED. IN THE PRESENT CASE, NO S UCH CIRCUMSTANCES ARE WARRANTED AS IN THE LIST OF BENEFICIARIES TO WHOM ACCOMMODATION ENTRIES WERE PROVIDED BY THE SAID GROUP CATEGORICALLY CONTAINS T HE NAME AND ADDRESS OF THE ASSESSEE. FURTHER THE GROUP HAS CATEGORICALLY ADMITTED TO PROVIDING OF ACCOMMODATIO N ENTRIES OF UNSECURED LOANS THROUGH VARIOUS BENAMI CONCERNS. THE AO FURTHER RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206(SC) AND HONBLE RAJASTHAN HIGH COURT IN CASE OF RAMESHWARLAL MALI VS. CIT 256 ITR 536(RAJ.) AMONG OTHERS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE THAT IF THE ENTRIES AND M ATERIAL ARE GATHERED BEHIND THE BACK OF THE ASSESSEE AND IF THE AO PROPOSES TO ACT ON SUCH MATERIAL AS HE MIGHT HAV E GATHERED AS A RESULT OF HIS PRIVATE ENQUIRIES, HE M UST DISCLOSE ALL SUCH MATERIAL TO THE ASSESSEE AND ALSO ALLOW THE CROSS EXAMINATION AND IF THIS IS NOT DONE, THE PRINCIPLES OF NATURAL JUSTICE STAND VIOLATED. 2.9 IN LIGHT OF ABOVE DISCUSSIONS, IN OUR VIEW, TH E CRUX OF THE ISSUE AT HAND IS THAT WHETHER THE PRINCIPLE OF NATU RAL JUSTICE STAND VIOLATED IN THE INSTANT CASE. IN OTHE R WORDS, WHERE THE AO DOESNT WANT TO ACCEPT THE EXPLANATION OF THE ASSESSEE AND THE DOCUMENTATION FURNISHED REGARD ING THE GENUINENESS OF THE LOAN TRANSACTION AND INSTEAD WANTS TO RELY UPON THE INFORMATION INDEPENDENTLY RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTM ENT IN RESPECT OF INVESTIGATION CARRIED OUT AT A THIRD PARTY, CAN THE SAID INFORMATION BE USED AGAINST THE ASSESS EE WITHOUT SHARING SUCH INFORMATION WITH THE ASSESSEE AND ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO EXAMINE SUCH INFORMATION AND EXPLAIN ITS POSITION ESPECIALLY WHE N THE ASSESSEE HAS REQUESTED THE SAME TO THE ASSESSING OF FICER. 2.10 IN THIS REGARD, THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 7 75 (SC) (COPY AT CASE LAW PB 812-818 FILED IN CASE OF M/S KOTA DALL MILL) HAS HELD THAT THE RULE OF LAW ON ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 24 THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STATED BY THE LAHORE HIGH COURT IN THE CASE OF SETH GURMUKH SINQH WHERE IT WAS STATED THAT WHILE PROCEEDING UNDER SUB - SECTION (3) OF SECTION 23, THE INCOME-TAX OFFICER, THOUGH NOT BOUND TO RELY ON EVIDENCE PRODUCED BY THE ASSES SEE AS HE CONSIDERS TO BE FALSE, YET IF HE PROPOSES TO MAKE AN ESTIMATE IN DISREGARD OF THAT EVIDENCE, HE SHOULD I N FAIRNESS DISCLOSE TO THE ASSESSEE THE MATERIAL ON W HICH HE IS GOING TO FIND THAT ESTIMATE; AND THAT IN CASE HE PROPOSES TO USE AGAINST THE ASSESSEE THE RESULT OF ANY PRIVATE INQUIRIES MADE BY HIM, HE MUST COMMUNICATE TO THE ASSESSEE THE SUBSTANCE OF THE INFORMATION SO PROPOSED TO BE UTILIZED TO SUCH AN EXTENT AS TO PUT THE ASSESSEE IN POSSESSION OF FULL PARTICULARS OF THE C ASE HE IS EXPECTED TO MEET AND THAT HE SHOULD FURTHER GIVE HIM AMPLE OPPORTUNITY TO MEET IT. IT WAS HELD IN THAT CASE THAT IN THIS CASE WE ARE OF THE OPINION THAT THE T RIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OF JUSTICE IN RE ACHING ITS CONCLUSIONS. FIRSTLY, IT DID NOT DISCLOSE TO TH E ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT BY THE DEPARTMENTAL REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBUT THE MATERIAL FURNISHED TO IT BY HIM, AND LASTLY, IT DECLINED TO TAKE ALL THE MATERIAL THAT THE ASSESSEE WANTED TO PRODUCE IN SUPPORT OF ITS CASE. THE RESULT IS THAT THE ASSESSE E HAD NOT HAD A FAIR HEARING. THE HONBLE SUPREME COURT IN CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206 (SC) HAS HELD THAT THE ITO IS NOT BOUND BY ANY TECHNICAL RULES OF THE LAW OF EVID ENCE. IT IS OPEN TO HIM TO COLLECT MATERIAL TO FACILITATE ASSESSMENT EVEN BY PRIVATE ENQUIRY. BUT, IF HE DESI RES TO USE THE MATERIAL SO COLLECTED, THE ASSESSEE MUST BE INFORMED ABOUT THE MATERIAL AND GIVEN ADEQUATE OPPORTUNITY TO EXPLAIN IT. THE STATEMENTS MADE BY PRAVEEN JAIN AND GROUP WERE MATERIAL ON WHICH THE I T AUTHORITIES COULD ACT PROVIDED THE MATERIAL WAS DISCLOSED AND THE ASSESSEE HAD AN OPPORTUNITY TO RE NDER THEIR EXPLANATION IN THAT REGARD. THE HONBLE SUPREME COURT IN CASE OF KISHINCHAND CHELLARAM V. CIT (1980) 125 ITR 713 (SC) (COPY AT CASE LAW PB 585-591 FILED IN CASE OF M/S KOTA DALL MILL) HAS HELD THAT WHETHER THERE WAS ANY MATERIAL EVIDENCE TO JUSTIFY THE FINDINGS OF THE TRIBUNAL TH AT THE AMOUNT OF RS. 1,07,350 SAID TO HAVE BEEN REMITTED B Y TILOKCHAND FROM MADRAS REPRESENTED THE UNDISCLOSED ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 25 INCOME OF THE ASSESSEE. THE ONLY EVIDENCE ON WHICH THE TRIBUNAL COULD RELY FOR THE PURPOSE OF ARRIVING AT THIS FINDING WAS THE LETTER, DATED 18-2-1955 SAID TO HAV E BEEN ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO. NO W IT IS DIFFICULT TO SEE HOW THIS LETTER COULD AT ALL BE RELIED UPON BY THE TRIBUNAL AS A MATERIAL PIECE OF EVIDENC E SUPPORTIVE OF ITS FINDING. IN THE FIRST PLACE, THIS LETTER WAS NOT DISCLOSED TO THE ASSESSEE BY THE ITO AND EVEN T HOUGH THE AAC REPRODUCED AN EXTRACT FROM IT IN HIS ORDER, HE DID NOT CARE TO PRODUCE IT BEFORE THE ASSESSEE OR G IVE A COPY OF IT TO THE ASSESSEE. THE SAME POSITION OBTAI NED ALSO BEFORE THE TRIBUNAL AND THE HIGH COURT AND IT WAS ONLY WHEN A SUPPLEMENTAL STATEMENT OF THE CASE WAS CALLED FOR BY THIS COURT BY ITS ORDER, DATED 16-8-1 979 THAT, ACCORDING TO THE ITO, THIS LETTER WAS TRACED BY HIM AND EVEN THEN IT WAS NOT SHOWN BY HIM TO THE ASSESS EE BUT IT WAS FORWARDED TO THE TRIBUNAL AND IT WAS FOR THE FIRST TIME AT THE HEARING BEFORE THE TRIBUNAL IN RE GARD TO THE PREPARATION OF THE SUPPLEMENTAL STATEMENT OF TH E CASE THAT THIS LETTER WAS SHOWN TO THE ASSESSEE. IT WILL, THEREFORE, BE SEEN THAT, EVEN IF WE ASSUME THAT THI S LETTER WAS IN FACT ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO, NO RELIANCE COULD BE PLACED UPON IT, SINCE IT WAS NOT SHOWN TO THE ASSESSEE UNTIL AT THE STAGE OF PREPARATION OF THE SUPPLEMENTAL STATEMENT OF THE CA SE AND NO OPPORTUNITY TO CROSS EXAMINE THE MANAGER OF THE BANK COULD IN THE CIRCUMSTANCES BE SOUGHT OR AVAILE D OF BY THE ASSESSEE. IT IS TRUE THAT THE PROCEEDINGS UN DER THE INCOME-TAX LAW ARE NOT GOVERNED BY THE STRICT RULES OF EVIDENCE AND, THEREFORE, IT MIGHT BE SAID THAT EVEN WITHOUT CALLING THE MANAGER OF THE BANK IN EVIDENCE TO PROVE THIS LETTER, IT COULD BE TAKEN INTO ACCOUNT A S EVIDENCE. BUT BEFORE THE INCOME-TAX AUTHORITIES COU LD RELY UPON IT, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONTROVERT THE STATEMENTS CONTAINED IN IT BY ASKING FOR AN OPPORTU NITY TO CROSS EXAMINE THE MANAGER OF THE BANK WITH REFER ENCE TO THE STATEMENTS MADE BY HIM. 2.11 IN LIGHT OF ABOVE PROPOSITION IN LAW AND ESPE CIALLY TAKING INTO CONSIDERATION THE DECISION OF THE HONB LE SUPREME COURT IN CASE OF C. VASANTLAL & CO. (SUPRA) RELIED UPON BY THE REVENUE AND WHICH ACTUALLY SUPPO RTS THE CASE OF THE ASSESSEE, IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED BY THE AO RELYING SOLELY O N THE INFORMATION RECEIVED FROM THE INVESTIGATION WIN G, STATEMENT RECORDED U/S 132(4) OF SHRI BHANWARLAL JA IN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 26 AND OTHERS, AND VARIOUS INCRIMINATING DOCUMENTARY EVIDENCE FOUND FROM THE SEARCH AND SEIZURE CARRIED OUT BY INVESTIGATION WING, MUMBAI ON THE SHRI BHANWARLA L JAIN GROUP ON 03.10.2013. IT REMAINS UNDISPUTED THA T THE ASSESSEE WAS NEVER PROVIDED COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENTS OF SHRI BHANWARLAL JAIN AND VARIOUS PERSONS AND AN OPPORTUNITY TO CROSS EXAMINE SUCH PERSONS THOUGH HE SPECIFICALLY ASKED FOR SUCH DOCUMENTS AND CROSS EXAMINATION. ON THE OTHER HAND, THE BURDEN WAS SOUG HT TO BE SHIFTED ON THE ITA NO. 159/JP/16 THE ACIT, CENTRAL -2, JAIPUR VS. M/S PRATEEK KOTHARI, JAIPUR 21 ASSESSEE BY THE A.O. IT IS CLEAR CASE WHERE THE PRI NCIPLE OF NATURAL JUSTICE STAND VIOLATED AND THE ADDITIONS MADE UNDER SECTION 68 THEREFORE ARE UNSUSTAINABLE IN THE EYE OF LAW AND WE HEREBY DELETE THE SAME. THE ORDER OF THE LD CIT(A) IS ACCORDINGLY CONFIRMED AND THE GROUND O F THE REVENUE IS DISMISSED. 14. IT WAS ALSO ARGUED BY THE LD AR THAT THE ASSESSM ENT ORDER HAS BEEN PASSED ON THE BASIS OF UNACCEPTABLE, UNREASONA BLE, INCORRECT AND MISCONCEIVED INTERPRETATION OF THE VARIOUS JUDICIAL PRONOUNCEMENTS OF HONBLE APEX COURT AND HONBLE HIGH COURTS AS RELIE D UPON BY THE LD. AO, WHICH IS EXPLAINED AS UNDER: (I) DHAKESWARI COTTON MILLS LTD V. COMMISSIONER OF INCO ME TAX, WEST BENGAL (1954) 26 ITR 775 (SC): LD. AO HAS PROCEEDED WITH TO PASS THE ASSESSMENT OR DER IN VIOLATION OF THE PRINCIPLES AND RATIO LAID DOWN BY THE HONBLE A PEX COURT IN THE AFORESAID JUDGMENT. WHILE PLACING RELIANCE UPON THE JUDGMENT OF HONBLE APEX COURT IN CASE DHAKESWARI (SUPRA) , LD. AO DECLINED ACCESS TO THE DOCUMENTS, RELIED UPON BY HIM AND DID NOT AFFORD OPPORTUNITY FOR CROS S-EXAMINATION OF WITNESSES, STATEMENTS OF WHICH WERE RECORDED BEHIND THE BACK OF APPELLANT ON THE PRETEXT THAT INCOME TAX OFFICER IS NOT FETTERED BY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 27 TECHNICAL RULES OF EVIDENCE AND PLEADINGS AND HE IS ENTITLED TO ACT ON MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDENCE IN A COURT OF LAW. HOWEVER, LD. AO FAILED TO APPRECIATE THAT HONBLE A PEX COURT IN THE CASE OF DAKESHARI (SUPRA) HAS HELD THAT IN MAKING THE AS SESSMENT THE INCOME TAX OFFICER IS NOT ENTITLED TO MAKE A PURE GUESS AN D MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL A ND ALSO THAT MATERIAL RELIED UPON BY THE INCOME TAX OFFICER SHOULD BE DIS CLOSED TO THE ASSESSEE, WHICH IN THE CASE OF APPELLANT, LD. AO FA ILED TO DO. THE RELEVANT PARA OF THE ABOVE JUDGMENT IS REPRODUCED B ELOW: IN THIS CASE WE ARE OF THE OPINION THAT THE TRIBUNA L VIOLATED CERTAIN FUNDAMENTAL RULES OF JUSTICE IN REACHING IT S CONCLUSIONS. FIRSTLY, IT DID NOT DISCLOSE TO THE ASSESSEE WHAT I NFORMATION HAD BEEN SUPPLIED TO IT BY THE DEPARTMENTAL REPRESENTAT IVE. NEXT, IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBU T THE MATERIAL FURNISHED TO IT BY HIM, AND LASTLY, IT DEC LINED TO TAKE ALL THE MATERIAL THAT THE ASSESSEE WANTED TO PRODUCED I N SUPPORT OF HIS CASE. THE RESULT IS THAT THE ASSESSEE HAD NOT H AD A FAIR HEARING . IN THE RESULT WE ALLOW THIS APPEAL, SET ASIDE THE O RDER OF THE TRIBUNAL AND REMAND THE CASE TO IT WITH DIRECTIONS THAT IN ARRIVING AT ITS ESTIMATE OF GROSS PROFITS AND SALES IT SHOULD GIVE FULL OPPORTUNITY TO THE ASSESSEE TO PLACE ANY RELEV ANT MATERIAL ON THE POINT THAT IT HAS BEFORE THE TRIBUNAL, WHETH ER IT IS FOUND IN THE BOOKS OF ACCOUNT OR ELSEWHERE AND IT SHOULD ALSO DISCLOSE TO THE ASSESSEE THE MATERIAL ON WHICH THE TRIBUNAL IS GOING TO FOUND ITS ESTIMATE AND THEN AFFORD HIM FULL OPPORTU NITY TO MEET THE SUBSTANCE OF ANY PRIVATE ENQUIRIES MADE BY THE INCOME TAX OFFICER IF IT IS INTENDED TO MAKE THE ESTIMATE ON T HE FOOT OF THOSE ENQUIRIES . ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 28 IN VIEW OF THE ABOVE, IT IS EVIDENT RELIANCE PLACED BY THE LD. AO ON THE JUDGMENT OF HONBLE APEX COURT IN CASE OF DHAKESWAR I (SUPRA) IS MISCONCEIVED. (II) ROSHAN DI HATTI V. CIT (1977) 107 ITR 938 (SC) AND KALE KHAN MOHAMMED HANIF V. CIT [1963] 50 ITR 1 (SC) : THE RELIANCE HAS BEEN PLACED BY THE LD. AO ON THE A FORESAID JUDGMENTS OF HONBLE APEX COURT TO SUBSTANTIATE THAT PRIMA FA CIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND I N THE BOOKS OF ACCOUNT OF THE ASSESSEE AND WHERE THE NATURE AND SOURCE THE REOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN IS ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. IN THIS CONTEXT, IT IS SUBMITTED THAT IN THE PRESE NT CASE OF THE APPELLANT, APPELLANT HAS ALREADY DISCHARGED ITS PRI MA FACIE ONUS TO PROVE THE CASH CREDIT BY FURNISHING RELEVANT DOCUMENTS SU BSTANTIATED IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE LD. AO COULD NOT POINTED OUT ANY DEFECTS IN THE DOCUMENTS OR MAT ERIAL SO FURNISHED BY THE APPELLANT. HOWEVER, LD. AO FAILED TO APPLY RATI O LAID DOWN BY HONBLE APEX COURT THAT BURDEN OF PROOF IS FLUID FO R THE PURPOSES OF SECTION-68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUM ENTS RELATING TO IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORT HINESS THEN AO MUST DO SOME INQUIRY TO CALL FOR MORE DETAILS TO INVOKE SECTION 68. HOWEVER, IN THE INSTANT CASE OF APPELLANT, THE BURDEN OF PRO OF FOR IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS DULY DISCHARGED BY THE APPELLANT BY SUBMITTING ALL THE RELEVANT REC ORDS AND AFFIDAVIT OF RESPECTIVE LENDERS. THE RESPECTIVE LENDERS HAVE ALS O FILED RELEVANT DOCUMENTS WITH LD. AO AND RESPECTIVE AUTHORITIES, I N REPLY TO NOTICE UNDER SECTION-131 AND 133(6) OF THE ACT. IT IS ALSO PERTINENT TO MENTION THAT NO AUTHORITIES RAISED ANY DOUBT REGARDING THE TRUTHFULNESS OF THE DOCUMENT, FURNISHED BY THE APPELLANT OR RESPECTIVE LENDERS. THUS, THE RELIANCE PLACED BY THE LD. AO IS NOT ONLY MISCONCEI VED BUT ALSO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 29 MISINTERPRETATION OF THE LAW LAID DOWN BY HONBLE A PEX COURT. FURTHERMORE, THE LD. AO DID NOT APPRECIATE THE RATI O DECIDED BY THE HONBLE APEX COURT IN ROSHAN DI HATTI CASE (IBID), WHICH IS REPRODUCED BELOW: THE TRIBUNAL ACTED WITHOUT ANY MATERIAL OR, IN ANY EVENT, THE FINDING OF FACT REACHED BY THE TRIBUNAL WAS UNREASO NABLE OR SUCH THAT NO PERSON ACTING JUDICIALLY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW WOULD COME TO SUCH A FINDING. W E ACCORDINGLY ALLOW THE APPEAL, SET ASIDE THE ORDER O F THE HIGH COURT AND ANSWER THE QUESTION REFERRED BY THE TRIBU NAL IN NEGATIVE. THE COMMISSIONER WILL PAY THE COSTS OF TH E APPEAL TO THE ASSESSEE . THE CASE OF APPELLANT IS SQUARELY COVERED UNDER THE AFORESAID FINDING OF HONBLE APEX COURT AS THE FINDING OF THE LD. AO IS UNREASONABLE AND ANY PERSON ACTING JUDICIOUSLY AND PROPERLY INSTRUCTED A S TO THE RELEVANT LAW WOULD NOT HAVE COME TO SUCH A FINDING. THE NON-APPR ECIATING OF FACTS PROPERLY AND NON-APPRECIATION OF RECORD BY LD. AO A ND AS ALSO NOT ADOPTING JUDICIOUS APPROACH HAS RESULTED IN UNREASO NABLE AND ARBITRARY ASSESSMENT ORDER. THE JUDGMENT OF KALE KHAN MOHAMMED HANIF (IBID) IS DISTINCT FROM THE CASE OF APPELLANT AND HAS NO APPLICABILITY TO THE A PPELLANT. THE OBSERVATIONS OF HONBLE APEX COURT ARE REPRODUCED B ELOW: IT WAS OPEN TO THE ASSESSEE TO RAISE THE QUESTION T HAT THE FINDING THAT THOSE AMOUNTS WERE INCOME RECEIVED FRO M UNDISCLOSED SOURCES WAS NOT BASED ON ANY EVIDENCE O R WAS, FOR OTHER REASONS, PERVERSE . AND ALSO THE ASSESSEE ACCEPTED THE DECISION OF THE TRIBUNAL AND DID NOT MOVE THE HIGH COURT TO DIRECT A REFERENCE IN REGARD TO THOSE QUESTIONS UND ER SECTION 66(2). THOSE QUESTIONS, THEREFORE, CANNOT BE RAISED IN THIS COURT. WE HAVE DEED WITH THE REFERENCE MADE ON THE BASIS THAT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 30 THE FINDING THAT THE AMOUNTS OF THE CREDIT ENTRIES WERE INCOME RECEIVED FROM UNDISCLOSED SOURCES WAS DISPUTED ONLY ON THE GROUND THAT THE INCOME FROM THE BUSINESS HAD BEEN C OMPUTED ON THE BASIS OF AN ESTIMATE. IN THE CIRCUMSTANCES OF T HE CASE WE COULD NOT HAVE DONE ANYTHING ELSE . IT IS TO THE NOTED THAT THE DOCUMENTARY PROOF SUBST ANTIATING THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF THE TRANSACTIO N, FURNISHED BY THE APPELLANT, REMAINED UNDISPUTED BY THE LD. AO. THUS, PLACING RELIANCE TO THE SAID JUDGMENT WITH THAT OF THE CASE OF APPELLAN T IS A MISCONCEIVED INTERPRETATION OF THE LD. AO. (III) COMMISSIONER OF INCOME-TAX V. DURGA PRASAD MORE [1971] 82 ITR 540 (SC) AND SUMATI DAYAL V. COMMISSIONER OF INCOME -TAX [1995] 80 TAXMANN 89/214 ITR 801 (SC) : LD. AO, WHILE PLACING RELIANCE UPON THE AFORESAID J UDGMENTS HAS HELD THAT THE THEORY OF PREPONDERANCE OF HUMAN PROBABILI TY AS PRONOUNCED BY THE HONBLE APEX COURT IN THE CASE OF CIT V. DURGA PRASAD MORE (1971) 82 ITR 540 AND SUMITI DAYAL V. CIT (1995) 80 TAXMAN N 89/214 ITR 801 (SC) IS OF UTMOST IMPORTANCE. IN THE CASES WHERE IT HAS BEEN ESTABLISHED THAT THE SOURCE COMPANY IS A NEAR PAPER COMPANY S OLELY ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES, THE PR ESUMPTION ON THE BASIS OF HUMAN PROBABILITY IS IMPORTANT. LD. AO HAS PLACED RELIANCE UPON THE OBSERVATION OF HONBLE SUPREME COURT IN CIT V. DURGA PRASAD MORE (1971) 82 ITR 540 THAT IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL AND A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITI ES WERE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PROD UCED BEFORE THEM. HOWEVER, IT IS HUMBLY SUBMITTED THAT WHILE INTERPRE TING THE AFORESAID JUDGMENT, THE LD. AO FAILED TO CONSIDER THE FINDING OF HONBLE APEX ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 31 COURT THAT IT IS TRUE THAT AN APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE REASONS TO BELIEVE THAT THE AP PARENT IS NOT THE REAL . IN THE CASE OF THE APPELLANT, ALL THE DOCUMENTARY EVIDENCES WERE PRODUCED BEFORE LD. AO BOTH BY THE APPELLANT AND BY THE RESPECTIVE LENDERS AS WELL AND THE DOCUMENTS PRODUCED ARE THE PUBLIC DOCUMENTS WHICH ARE AVAILABLE ON PUBLIC DOMAIN ITSELF. THESE DOCUMENTS INCLUDE DOCUMENTS FILED WITH ROC, BANK STATEMENTS, ASSESSME NT CARRIED OUT BY THE INCOME TAX DEPARTMENT AND SO ON. THE LD. AO DID NOT POINT OUT ANY DEFECTS IN SUCH DOCUMENTS. IT IS FURTHER MOST IMPORTANTLY RELEVANT TO MENTION HERE THAT THE INCOME TAX DEPARTMENT CARRIED OUT INTENSIVE SEARCH OVER THE APPELLANT GROUP AND AS A RESULT OF SEARCH NO EVIDENCE WAS FOUND TO PROVE THAT THE ASSESSEE WAS HAVING SOM E UNDISCLOSED INCOME WHICH WAS ROUTED IN BOOKS OF ACCOUNTS IN THE SHAPE OF UNSECURED LOANS . THUS, THE LD. AO MUST HAVE CONSIDERED APPARENT AS REAL AS LD. AO FAILED TO ESTABLISH AND ALSO TO SHOW ANY REASON TO BELIEVE THAT THE APPARENT IS NOT THE REAL. UNLESS AND UNTIL THERE WAS ANY REASON TO DISBELIEVE THE TRUTHFULNESS OF DOCUMENTARY EVIDENCE S, THERE WAS NO CASE AND BASIS WITH THE LD. AO TO TREAT THE APPARENT AS NOT REAL ONLY ON THE BASIS OF GUESS, ASSUMPTIONS, PRESUMPTIONS AND SURMI SES, WHICH IS NOT PERMISSIBLE UNDER THE LAW. FURTHERMORE, IT WAS THE ONUS OF THE LD. AO TO PROVE THAT APPARENT WAS NOT THE REAL, FOR WHICH HE WAS AT LIBERTY TO CALL UPON ANY FURTHER CLARIFICATION AND SUBSEQUENT DOCUM ENTS. SINCE, IT IS NOT PROVED THAT THE DOCUMENTS FURNISHED WERE NOT THE TR UE, NO ASSUMPTION AND PRESUMPTION CAN BE DRAWN THAT THE APPARENT WAS NOT THE REAL. THE TEST OF HUMAN PROBABILITY IS ALSO NOT APPLICABLE IN THE CAS E OF APPELLANT AS REALITY OF THE TRANSACTIONS CARRIED OUT BY THE APPELLANT IN THE COURSE OF NORMAL BUSINESS ACTIVITIES HAVE BEEN DULY PROVED BEYOND DO UBT WITH THE DOCUMENTARY EVIDENCES AND CONFIRMED BY THE RESPECTI VE LENDERS/PARTIES ALSO AND EVEN ACCEPTABLE BEFORE THE JUDICIAL AUTHO RITIES. IT SHOWS MISCONCEIVED INTERPRETATION BY THE LD. AO WITHOUT H AVING ANY NEXUS WITH THE FACTS OF THE CASE OF THE APPELLANT. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 32 (IV) COMMISSIONER OF INCOME TAX V. INDEPENDENT MEDIA (P) LTD 210 TAXMANN 14 (DELHI) (2012) THOUGH THE LD. AO HAS PLACED RELIANCE UPON THE AFOR ESAID JUDGMENT TO SUBSTANTIATE HIS ACTION FOR MAKING ADDITION UNDER S ECTION-68 OF THE ACT BUT THE ACT OF LD. AO IS DEROGATORY TO THE AFORESAI D JUDGMENT OF HONBLE HIGH COURT OF DELHI. LD. AO DID NOT PROVIDE OPPORTU NITY TO THE CROSS- EXAMINATION OF SO-CALLED WITNESSES, RELIED UPON BY LD. AO, WHICH MUST HAVE BEEN ALLOWED AS HELD BY THE HONBLE HIGH COURT OF DELHI IN THE ABOVE JUDGMENT. THE RELEVANT PARAS ARE REPRODUCED B ELOW: THE TRIBUNAL, HOWEVER, MAY BE JUSTIFIED IN DIRECTIN G THE ASSESSING OFFICER TO AFFORD AN OPPORTUNITY TO THE A SSESSEE OF CROSS-EXAMINATION THE PERSONS WHO HAD ALLEGEDLY GIV EN STATEMENTS BEFORE THE INVESTIGATION WING IMPLICATIN G THE ASSESSEE IN THE MODUS OPERANDI ADOPTED BY THEM, NAM ELY, GIVING OF ACCOMMODATION ENTRIES FOR COMMISSION . THE ASSESSEE APPEARS TO HAVE SOUGHT CROSS-EXAMINATI ON OF THOSE PERSONS BUT THAT OPPORTUNITY WAS NOT GIVEN BY THE ASSESSING OFFICER AS FOUND BY THE TRIBUNAL, A POSIT ION NOT DISPUTED BEFORE US ON BEHALF OF THE REVENUE . WE MAY ONLY STATE THAT THE ASSESSING OFFICER SHALL ACT IN ACCORDANCE WITH LAW . SINCE, THE ACT OF THE LD. AO IS NOT IN ACCORDANCE W ITH THE LAW, THE LD. AO FAILED TO APPRECIATE THE RATIO LAID DOWN BY HON BLE COURT WHILE CARRYING OUT ASSESSMENT PROCEEDINGS IN THE INSTANT CASE OF APPELLANT. IT IS HUMBLY SUBMITTED THAT RATIO OF THE AFORESAID JUDGME NT RATHER SUPPORTS THE CONTENTION OF THE APPELLANT AND PROVES ITS CASE AND NOT THE CASE MADE OUT BY THE LD. AO. (V) A. GOVINDARAJULU MUDALIAR VS. CIT [1958] 34 ITR 807 (SC) : THE FACTS AND CIRCUMSTANCES OF CASE OF APPELLANT HA S NO RELEVANCY, EVEN REMOTELY, WITH THE JUDGMENT OF HONBLE APEX COURT, AS RELIED UPON BY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 33 THE LD. AO. IN THAT CASE THE APPELLANT DID NOT PROV E HIS VERSION THAT THE GIFT WAS ALLEGED TO HAVE BEEN MADE BY THE APPELLANT TO HIS AUNT AND BY HER TO HIM. MORE SO, THE CONCLUSION TO WHICH THE AP PELLATE TRIBUNAL CAME AMPLY WARRANTED BY THE FACTS OF THE CASE. FURTHERMO RE, IN THAT CASE IT WAS HELD THAT BUT SEEING THAT IN THIS CASE THE APPELLANT HAD MOVE D THE HIGH COURT AND A DECISION HAS BEEN PRONOUNCED ADVERSE TO HIM AND THIS HAS BECOME FINAL OBVIOUSLY IT WOULD NOT BE OPEN TO HIM TO QUESTION THE CORRECTNESS OF THE DECISION OF THE TRIBUNAL ON GROU NDS WHICH MIGHT HAVE TAKEN IN AN APPEAL AGAINST THE JUDGMENT OF THE HIGH COURT . THUS, THE FACTS AND LAW OF THE AFORESAID CASE HAS NO RELEVANC Y TO THAT OF THE CASE OF THE APPELLANT. (VI) G.R. SIRI RAM V. CIT (1975) 98 ITR 337 (P&H): THE CASE IS ALSO NOT RELEVANT TO THE CASE OF APPELL ANT INASMUCH AS IN THIS CASE THE APPELLANT HAD AGREED BEFORE THE ITO THAT T HERE WAS NO EVIDENCE AVAILABLE WITH THE LADIES IN SUPPORT OF THE CASH CR EDITS MENTIONED ABOVE. THE CASE OF APPELLANT IS NOT RELEVANT TO THE FACTS, MENTIONED ABOVE. IN THE INSTANT CASE OF APPELLANT-COMPANY FURNISHED ALL THE DOCUMENTS SHOWING SOURCE OF THE RECEIPT OF THE FUNDS AND ALSO SUBMITT ED DOCUMENTARY EVIDENCES TO SUPPORT ITS VERSION, WHICH REMAINED UN -REBUTTED IN THE HAND OF LD. AO. CONSIDERING THE FACTS REGARDING DISCHARG E OF ONUS BY THE APPELLANT, THE AFORESAID JUDGMENT, RELIED UPON BY T HE LD. AO HAS NO RELEVANCY. (VII) CIT V. KISHORI LAL & SANTOSHI LAL (1995) 216 ITR 9 (RAJ.) : THOUGH, THE LD. AO HAS PLACED RELIANCE UPON THE AFO RESAID JUDGMENT BUT ACT OF THE LD. AO IS CONTRARY TO THE RATIO LAID DOW N BY THE HONBLE HIGH COURT OF RAJASTHAN IN THE AFORESAID JUDGMENT. THE R ELEVANT PARA FROM THE AFORESAID JUDGMENT IS REPRODUCED BELOW: IN THE ASSESSMENT PROCEEDINGS, THE INCOME TAX OFFIC ER IS SUPPOSED TO FOLLOW THE PRINCIPLE OF NATURAL JUSTICE AND WHEN A NOTICE IS GIVEN TO THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 34 ASSESSEE TO EXPLAIN SUCH AN ENTRY, THE EXPLANATION WHICH HAS BEEN GIVEN HAS TO BE TAKEN INTO CONSIDERATION . IN THE INSTANT CASE OF APPELLANT, LD. AO HAS ACTED IN UTTER DISREGARD TO THE PRINCIPLE OF NATURAL JUSTICE AND NEITHER CONSIDERED DOCUMENTARY EVIDENCES NOR CONSIDERED THE EXPLANATION OF THE APPELLANT. FU RTHERMORE, LD. AO WITHOUT APPRECIATING WHAT HAS BEEN HELD IN THE AFOR ESAID JUDGMENT OF HONBLE COURT HAS ACTED IN DEROGATORILY TO THE AFOR ESAID PRONOUNCEMENT ITSELF. IT HAS CLEARLY BEEN HELD BY THE HONBLE COURT THAT IF THE EXPLANATION IS NOT SUPPORTED BY ANY DOCUMENTARY OR OTHER EVIDENCE, THEN THE DEEMING FICTION CREDITED BY SECTION-68 CAN BE INVOKED . IN THE INSTANT CASE OF THE APPELLANT AMPLE DOCUMENT ARY EVIDENCES WERE SUBMITTED BY THE APPELLANT AS WELL AS BY THE LENDER COMPANIES. MORE SO, THE LENDER COMPANIES EXECUTED AFFIDAVITS DULY SUPPO RTED BY THE RELEVANT RECORDS AND THE SAME WERE SUBMITTED TO THE LD. AO A LONG WITH THE EXPLANATION. FURTHERMORE, THE RESPECTIVE LENDERS DU LY COMPLIED WITH THE NOTICES UNDER SECTION-131 AND/OR SECTION-133 OF THE ACT. THUS, CONSIDERING THE RATIO LAID DOWN BY THE HONBLE COUR T THE INVOKING OF SECTION-68 BY THE LD. AO IS UNLAWFUL. (VIII) P.V. RAGHAVA REDDY V. CIT (1956) 29 ITR 942 AND M. M. A.K. MOHINDEEN THAMBAY & CO. V. CIT (1959) 36 ITR 481 : THE AFORESAID CASES, RELIED UPON BY THE LD. AO HAVE NO RELEVANCY TO THE CASE OF APPELLANT. IN THIS CASE THE HONBLE COURT H ELD THAT THE QUESTION OF BURDEN OF PROOF CANNOT BE MADE TO DEPEND EXCLUSIVEL Y UPON THE FACT OF A CREDIT ENTRY IN THE NAME OF THE ASSESSEE OR IN THE NAME OF A THIRD PARTY. IN EITHER CASE, THE BURDEN LIES UPON THE ASSESSEE TO E XPLAIN THE CREDIT ENTRY, THOUGH THE ONUS MIGHT SHIFT TO THE ITO UNDER CERTAI N CIRCUMSTANCES. IN THE INSTANT CASE OF THE APPELLANT, THE APPELLANT DI SCHARGED ITS ONUS AND BURDEN OF PROOF, IN RESPECT OF UNSECURED LOAN OBTAI NED BY IT BY SUBMITTING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 35 DOCUMENTARY EVIDENCES OF THE RESPECTIVE LENDERS BEF ORE THE LD. AO FOR SUBSTANTIATING IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTIONS. THE DOCUMENTARY EVIDENCES PRODUCED BY THE APPELLANT REMAINED UN-REBUTTED, THEREFORE, ONUS REMAINED SHIF TED TO THE LD. AO, WHICH WAS NOT DISCHARGED BY LD. AO. THERE IS CLEAR DISTINCTION BETWEEN TWO TYPES OF MATTERS (1) WHERE THE EXPLANATION AND EVIDENCES ARE PRODUCED BY AN ASSESSSEE AND (2) WHERE NO EXPLANATI ON AND EVIDENCES ARE PRODUCED BY THE ASSESSEE. SINCE, THE APPELLANT CASE FALLS UNDER (1) ABOVE, THE CASE RELIED UPON BY THE LD. AO IS DISTINCT AND NOT APPLICABLE TO THE CASE OF THE APPELLANT. MORE SO, THE LD. AO HAS NOT MADE OUT A CASE THAT THE AMOUNT STANDING IN THEIR NAME OR IN CREDIT DID NOT BELONG TO LENDER BUT BELONG TO THE ASSESSEE, WHICH WAS PRIMA FACIE CASE MADE OUT DEPARTMENT IN BOTH THE JUDGMENTS RELIED UPON BY THE LD. AO. (IX) SHANKER INDUSTRIES V. ADDL CIT (1978) 114 ITR 689 ( CAL.) : WHILE PLACING RELIANCE UPON THE AFORESAID JUDGMENT, LD. AO HAS TRIED TO SUBSTANTIATE ITS ACTION UNDER SECTION-68 OF THE ACT . HOWEVER, LD. AO FAILED TO DISCHARGE ITS ONUS, AS LAID DOWN BY THE H ONBLE COURT IN THIS JUDGMENT. THE RELEVANT PARA FROM THE AFORESAID JUDG MENT IS REPRODUCED BELOW: WE WOULD LIKE TO OBSERVE THAT THE LAW ON THIS POINT IS NOW WELL SETTLED. IT IS NECESSARY FOR THE ASSESSEE TO PROVE PRIMA FACIE THE TRANSACTION WHICH RESULTS IN A CASH CREDIT IN HIS BOOKS OF ACCOUNT. S UCH PROOF INCLUDES PROOF OF THE IDENTITY OF HIS CREDITOR, THE CAPACITY OF SU CH CREDITOR TO ADVANCE THE MONEY AND, LASTLY, THE GENUINENESS OF THE TRANSACTI ON. THESE THINGS MUST BE PROVED PRIMA FACIE BY THE ASSESSEE AND ONLY AFTE R THE ASSESSEE HAS ADDUCED EVIDENCE TO ESTABLISH PRIMA FACIE THE AFORE SAID, THE ONUS SHIFTS ON THE DEPARTMENT . 15. IN VIEW OF ABOVE, IT WAS CONTENDED THAT THE CASE S CITED BY AO ARE ENTIRELY DISTINGUISHED FROM THOSE THE APPELLANTS CA SE OR AO FAILED TO APPLY THE RATIO LAID DOWN BY THE HONBLE COURTS IN T HOSE CITED CASES, AS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 36 SUCH NO RELIANCE SHOULD BE PLACED ON THE CASES, HAV ING NO RELEVANCY WITH THE APPELLANT CASE. HOWEVER, MOST OF THE CASES, CITED BY THE AO ARE SUPPORTING THE CONTENTION OF THE APPELLANT, AS SUBMITTED ABOVE. IN VIEW OF THE ABOVE, IMPUGNED ASSESSMENT ORDERS FOR AY 2010-11 AND AY 2011-12 DESERVE TO BE QUASHED AS THE SAME IS BAD IN LAW, PERVERSE AND WITHOUT JURISDICTION AND PASSED IN VIOLATION OF PRIN CIPLES OF NATURAL JUSTICE. 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFUL LY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE ALSO PERUSED THE ORDER PASSED BY THE COORDINATE BENCH IN GROUP CASE, AS CITED ABO VE. WE HAD ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CI TED BY THE LD. AR AND LD. DR DURING THE COURSE OF HEARING BEFORE US IN TH E CONTEXT OF FACTUAL MATRIX OF THE CASE. IN THE INSTANT CASE, WE FIND THA T THE TIME LIMIT PRESCRIBED FOR ISSUE OF NOTICE U/S 142(1)/143(2) OF I.TAX ACT FOR AY 2010-11 & AY 2011-12 HAS EXPIRED BEFORE THE SEARCH. THEREFORE, THE ASSESSMENT FOR AY 2010-11 & A.Y 2011-12 WAS DEEMED C OMPLETED. AFTER THE ASSESSMENT COMPLETED FOR THE ABOVE YEARS, THE DEPARTMENT CARRIED OUT SEARCH & SEIZURE OPERATIONS ON 02.07.20 15. THE INCOME TAX DEPARTMENT CARRIED OUT INTENSIVE SEARCH AND SEIZURE OPERATIONS OVER THE ASSESSEE AND DURING THE COURSE OF SEARCH NO MATERIA L FOUND FROM THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 37 POSSESSION OF THE ASSESSEE WHICH SHOWS THAT THE UNSEC URED LOAN AND SHARE CAPITAL & PREMIUM RECEIVED BY THE ASSESSEE DU RING THE YEAR FROM VARIOUS COMPANIES ARE NOT GENUINE/BOGUS. WE FOUND T HAT THE SIMILAR ISSUES HAVE BEEN DEALT BY THE TRIBUNAL IN THE GROUP CONCERN OF THE ASSESSEE NAMELY M/S KOTA DALL MILL AND M/S BARAN RO LLER FLOUR MILLS AS QUOTED ABOVE. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN GROUP CASE OF THE ASSESSEE WE NOT FIND ANY MERIT IN THE ADDITION SO MADE BY THE ASSESSING OFFICER, IN SO FA R AS ASSESSMENTS WERE NOT ABATED AND NO INCRIMINATING MATERIAL WAS FOU ND DURING THE COURSE OF SEARCH. WITH REGARD TO GROUND NO. 2 RAISE D BY THE ASSESSEE AGAINST THE ADDITION MADE WITHOUT PROVIDING OPPORTUN ITY OF CROSS EXAMINATION, THE SAME IS COVERED BY THE ORDER OF TH E TRIBUNAL IN THE GROUP CONCERN OF M/S KOTA DALL MILL PAGE NO. 76 TO 87 AND THE BARAN ROLLER FLOUR MILLS PAGE 57 TO 91. 17. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS DELETE D THE ADDITION MADE WITH RESPECT TO THE LOAN TAKEN FROM M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S I SIS MERCANTILES PVT. LTD. AT THE OUTSET, IT WAS SUBMITTED BY THE LD AR TH AT THE ISSUE WITH RESPECT TO THE LOAN TAKEN FROM THE ABOVE THREE CONC ERNS ARE SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH DEC ISION IN THE CASE OF M/S KOTA DALL MILL VS DCIT ORDER DATED 31/12/2018. I N RESPECT OF THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 38 LOAN OF RS. 1.30 CRORES IN RESPECT OF SHARE CAPITAL AND PREMIUM TAKEN FROM M/S SANGAM DISTRIBUTORS PVT. LTD., THE TRIBUNAL HAS DECIDED IN THE ISSUE IN THE CASE OF M/S KOTA DALL MILL VS. DCIT (SU PRA) FOR THE A.Y. 2010-11 AND IN THE CASE OF DCIT VS. M/S BARAN ROLLER FLOUR MILLS P. LTD. ORDER DATED 11/01/2019 IN ITA NO. 1206 & 2017/JP/20 18 AND CO NOS. 45 & 46/JP/2018. THE PRCISED OBSERVATION OF THE TRI BUNAL IN THE CASE OF KOTA DALL MILLS VS. DCIT (SUPRA) ARE FROM PAGE NO. 9 2 TO 102 AS REPRODUCED UNDER: 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE THE ADDITION O N ACCOUNT OF UNSECURED LOANS TAKEN FROM ALL THE PARTIES WHEREAS THE LD. CIT (A) HAS DELETED THE ADDITION IN RESPECT OF THE LOAN S TAKEN FROM M/S. BIRLA ARTS PVT. LTD., M/S. TEAC CONSULTANT PVT . LTD AND M/S. SANGAM DISTRIBUTORS PVT. LTD. AND CONFIRMED THE ADD ITION MADE ON ACCOUNT OF LOAN TAKEN FROM M/S. JALSAGAR COMMERC E PVT. LTD. THE ISSUE OF ADDITION MADE IN RESPECT OF THE UNSECU RED LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD. WAS CON SIDERED AND DECIDED BY US IN THE ASSESSEES APPEAL. THE RE VENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A) AS THE UN SECURED LOANS TAKEN FROM THESE THREE COMPANIES WERE DELETED ON TH E GROUND THAT THE AO WAS NOT HAVING ANY MATERIAL TO SUBSTANT IATE THAT THESE COMPANIES ARE CONTROLLED BY SO CALLED ENTRY O PERATORS. THE RELEVANT FINDING OF THE LD. CIT (A) IN PARA 6.1 TO 6.14 ARE AS UNDER : 6.1 AS DISCUSSED IN PARA 4.4.8 ABOVE, IN RESPECT OF THESE THREE LENDERS NAMELY M/S BIRLA ARTS PRIVATE LIMITED, M/S TEAC ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 39 CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBU TORS PRIVATE LIMITED ADVERSE FINDINGS ALONGWITH ELOQUENT EVIDENC ES IN THE FORM OF STATEMENT ON OATH OF RELEVANT ENTRY OPERATO RS ARE NOT VISIBLE IN THE REPORTS DATED 28.11.2017 AND 06.12.2 017 FROM INVESTIGATION DIRECTORATE, KOLKATA AND THEREFORE IT COULD NOT BE TREATED AS SHELL COMPANY. 6.2 NOW, COMING TO THE LOAN FROM M/S BIRLA ARTS PRI VATE LIMITED NO NOTICE UNDER SECTION 131 OR 133(6) OF TH E ACT WAS ISSUED TO THIS COMPANY, EITHER BY THE AO OR BY THE CONCERNED AO OR BY THE DDIT (INV.) KOLKATA. THIS SHOWS THAT NO I NDEPENDENT ENQUIRY WAS DONE BY THE AO TO ESTABLISH THAT THE SA ID COMPANIES WERE SHELL COMPANIES, BLIND RELIANCE HAS BEEN PLACE D BY THE AO ON THE INVESTIGATION REPORT OF THE DDIT, KOLKATA. A LSO, ON BARE PERUSAL OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NAME OF THE SAID COMPANIES DOES NOT APPEAR IN THE STATEMENT OF ANY OF THE ENTRY OPERATORS AS REPRODUCED BY THE AO IN THE ASSE SSMENT ORDER. 6.3 AS FAR AS THE REMAINING LENDER COMPANIES NAMELY , M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DIS TRIBUTORS PVT. LTD. ARE CONCERNED, IT IS EVIDENT FROM THE DOC UMENTS PLACED ON RECORD THAT NOTICE WAS ISSUED BY DDIT, KOLKATA U /S 131 TO THESE COMPANIES WHICH WAS DULY COMPLIED WITH AND RE LEVANT DOCUMENTS WERE FILED. THERE IS NO FACT ON RECORD TH AT THE NOTICES REMAINED UNSERVED OR THESE COMPANIES WERE NOT FOUND EXISTENT ON THE GIVEN ADDRESSES. FURTHERMORE, AFFIDAVIT OF THE DIRECTORS WERE ALSO SUBMITTED WHEREIN THE DIRECTORS CONFIRMED PROV IDING UNSECURED LOAN TO THE APPELLANT AND SOURCE OF PROVI DING THE SAID LOAN. ALSO, IT IS EVIDENT FROM THE ASSESSMENT ORDE R THAT NO STATEMENT/EVIDENCE HAS BEEN RELIED UPON OR PROVIDED BY THE AO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 40 FOR SUBSTANTIATING THAT THESE COMPANIES ARE CONTROL LED BY THE SO- CALLED ENTRY OPERATORS. 6.4 FOR THESE THREE CREDITORS NAMELY, M/S BIRLA AR TS PRIVATE LIMITED, M/S TEAC CONSULTANTS PRIVATE LIMITED AND M /S SANGAM DISTRIBUTORS PRIVATE LIMITED, THE APPELLANT IN DISC HARGE OF ITS ONUS U/S 68 OF THE ACT HAS FILED CONFIRMATION OF AC COUNTS AS WELL AS BANK STATEMENT REFLECTING THE TRANSACTIONS WITH OTHER SUBSTANTIATING DOCUMENTS ALONG WITH ASSESSMENT ORDE RS IN CASE OF LENDER COMPANIES, WHICH ARE AVAILABLE AT PAGE NO.44 3 TO 644 OF PB. FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS IS ESTABLISHED. THERE IS NO GAIN SAYING THAT THE ONUS SQUARELY LIES ON THE APPELLANT TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINE NESS OF THE CASH CREDITS. IN THE CASE OF ADDL. CIT V. BAHRI BROS. (P ) LTD. [1985] 154 ITR 244 (PAT), THE HON'BLE PATNA HIGH COURT HAS HELD ' IF THE LOANS ARE GIVEN BY AN ACCOUNT PAYING CHEQUE, IT AMO UNTS TO IDENTIFICATION OF THE PARTIES AND DISCHARGE OF BURD EN BY THE BORROWER .' IN VIEW OF THE ABOVE, IT IS CLEAR THAT APPELLANT DISCHARGED ITS BURDEN U/S 68 OF THE ACT. EVEN OTHER WISE, THERE IS NO ADVERSE FINDING OF ANY INVESTIGATION CONDUCTED B Y THE DEPARTMENT IN RELATION TO THESE COMPANIES. THEREFOR E, IN THE ABSENCE OF ANY INDEPENDENT INQUIRY AND ANY ADVERSE FINDINGS TO REBUT THE EVIDENCES FILED BY THE APPELLANT, I FIND THAT THE ADDITION IN RESPECT OF UNSECURED LOANS FROM 03 COMPANIES NAM ELY, M/S BIRLA ARTS PRIVATE LIMITED, M/S TEAC CONSULTANTS PR IVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED TOTALIN G TO RS. 12,36,40,000/- IS UNJUSTIFIED; FIRSTLY, ON THE GROU ND THAT NO INQUIRIES WERE MADE TO REBUT THE EVIDENCES FILED BY THE APPELLANT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 41 AND SECONDLY, ON THE GROUND THAT APPELLANT DULY DIS CHARGED ITS BURDEN CASTED UPON U/S 68 OF THE ACT TO EXPLAIN NAT URE AND SOURCE OF THE TRANSACTIONS BY PROVING THE IDENTITY, CREDIT WORTHINESS OF CREDITOR AND GENUINENESS OF THE TRANSACTION. IN PAR TICULAR, NONE OF THE MATERIAL OR STATEMENTS HAVE BEEN PROVIDED IN TH E ASSESSMENT ORDER WHEREIN NAMES OF THE SAID COMPANIES ARE MENTI ONED. NOTABLY, THE TRANSACTIONS WITH THE SAID FOUR COMPAN IES ARE DULY VERIFIABLE FROM CONFIRMATION OF ACCOUNTS PLACED AT PAGE NO. 453 TO 455, 532 TO 534 & 588 TO 589 OF PB WITH SUPPORTING BANK STATEMENTS PLACED AT PAGE NO. 444 TO 452, 521 TO 53 1 & 571 TO 587 PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT HAS DULY PROVED THE IDENTITY, CREDI TWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. 6.5 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EV IDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSAC TIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MA KING OF LOANS, THERE IS BALANCE AVAILABLE IN THE ACCOUNTS O F THE BORROWERS, WHICH PROVES THE CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTIONS. THERE IS NO CASE OF ANY CASH DEPOSIT ION IN THE ACCOUNT OF ANY OF THE CREDITORS AT THE TIME OF ISSU ING CHEQUES/RTGS IN FAVOUR OF THE ASSESSEE. THEREFORE, IN VIEW OF THE SETTLED JUDICIAL PRECEDENT IN CASE OF CIT V. VA RINDER RAWLLEY [2014] 366 ITR 232 (PUNJAB & HARYANA), CIT V. VIJAY KUMAR JAIN [2014] 221 TAXMAN 180, CIT V. VICTOR ELECTRODES LTD. [2010] 329 ITR 271, ADDL. CI T V. BAHRI BROS. (P) LTD. [1985] 154 ITR 244 (PAT) AND OTHERS AS REFERRED BY THE APPELLANT, I AM OF THE CONSIDERED VIEW THAT APP ELLANT DULY DISCHARGED ITS BURDEN CASTED UPON IT U/S 68 OF THE ACT. IT IS FURTHER SEEN THAT NO NOTICE U/S 131 OR 133(6) OF THE IT ACT WERE ISSUED TO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 42 M/S BIRLA ARTS PRIVATE LIMITED, HOWEVER AS FAR AS T HE COMPANIES M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED ARE CONCERNED, THESE H AVE DULY REPLIED TO THE NOTICES ISSUED BY DCIT/DDIT(INV.), K OLKATA IN RESPECT OF COMMISSION, THESE FACTS REMAIN UNCONTROV ERTED BY THE AO. 6.6 THE AO DURING ASSESSMENT PROCEEDINGS TOOK NEGAT IVE INFERENCE FROM THE STATEMENT OF SHRI RAJENDRA AGARW AL RECORDED DURING SEARCH U/S 132(4) WHEREIN HE MADE DISCLOSURE IN RESPECT OF LONG TERM CAPITAL GAIN IN HIS INDIVIDUAL HANDS. I H AVE GONE THROUGH THE STATEMENT OF SHRI RAJENDRA AGARWAL AND HIS DISCLOSURE MADE IN HIS STATEMENT, NOTABLY, THE DISCLOSURE MADE WAS IN HIS PERSONAL CAPACITY ONLY AND WITH RESPECT TO LTCG ONL Y AND NOT IN RESPECT OF ANY OTHER TRANSACTIONS BE IT BE RECEIPT OF UNSECURED LOANS. FURTHER, RAJENDRA AGARWAL IS NOT A PARTNER I N THE APPELLANT FIRM. THEREFORE, I FIND THAT IN THE ABSENCE OF ANY NEXUS OF THE STATEMENT OF SHRI RAJENDRA AGARWAL WITH THE APPELLA NT FIRM OR ITS TOTAL INCOME, THIS BASIS OF ADDITION ADOPTED BY THE AO IS FARFETCHED & CANNOT BE CONCURRED. 6.7 IT IS FURTHER SEEN THAT AO HAS NOT BROUGHT ANY SPECIFIC DEFECT / DISCREPANCIES IN THE DIRECT EVIDENCE BROUG HT ON RECORD BY THE APPELLANT. THE AO HAS OBSERVED THAT ON THE DATE OF DEBIT IN THE ACCOUNT STATEMENT OF CREDITOR, THERE IS CORRESP ONDING CREDIT ENTRY OF EQUAL AMOUNT, HOWEVER, THIS OBSERVATION OF THE AO IS ITSELF NOT SUFFICIENT TO PROVE BEYOND DOUBT THAT AP PELLANT ROUTED ITS UNACCOUNTED INCOME BY THESE COMPANIES RATHER IT PROVES THE SOURCE IN THE HANDS OF THE APPELLANT. IT IS USUAL B USINESS PRACTICE, WHILE MAKING LOANS TO PARTY, FUNDS ARE REQUIRED TO BE ARRANGED BY THE LENDER, THEREFORE REFLECTION OF SUCH ENTRIES IN BANK STATEMENT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 43 DOESNT LEAD TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT. NEEDLESS TO SAY THAT APPELLANT IS NOT REQUIRED TO P ROVE SOURCE OF THE SOURCE U/S 68 OF THE ACT IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS. 6.8 IN MY CONSIDERED VIEW, MERE NOT BELIEVING AN EX PLANATION CANNOT LEAD TO A CONCLUSION THAT THE BORROWED AMOUN T IS THE INCOME OF THE ASSESSEE (BORROWER) FROM SOME UNDISCL OSED SOURCES WHILE IN THE PRESENT CASE, NO EVIDENCES OF ANY GENE RATION OF UNDISCLOSED INCOME OR THEIR UTILIZATION IN THE FORM OF UNSECURED LOANS HAS BEEN FOUND AND BROUGHT ON RECORD. 6.9 SIMILARLY, I FIND THAT VARIOUS OBSERVATIONS OF THE AO ON BALANCE SHEET / ITR OF THE LENDER COMPANIES ARE MIS CONSTRUED, MISCONCEIVED AND ARE FACTUALLY INCORRECT. I FURTHER FIND THAT THE VARIOUS OTHER ALLEGATIONS/OBSERVATIONS OF THE AO AR E MISCONCEIVED AND PREMATURE ONLY AND IN VIEW THE APPELLANTS SUBM ISSION MADE IN PARA 10 AS REPRODUCED IN PARA NO. 4.2 OF THIS OR DER, THE SAME DOES NOT LEAD ANY WHERE TO DRAW ANY ADVERSE INFEREN CE AGAINST THE APPELLANT. FURTHER, THE VARIOUS CASE LAWS RELIED UP ON BY THE AO ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT C ASE AS CATEGORICALLY COUNTERED BY THE APPELLANT IN HIS WRI TTEN SUBMISSIONS AS MENTIONED IN PARA 16 AS REPRODUCED I N PARA NO. 4.2ABOVE. 6.10 IT IS SETTLED JUDICIAL PRECEDENTS THAT UNDER T HE INCOME TAX LAW PRIMARY BURDEN U/S 68 OF THE ACT IS ON THE APPE LLANT AND ONCE THIS BURDEN IS DISCHARGED U/S 68 OF THE ACT, NO ADD ITION U/S 68 OF THE ACT IS JUSTIFIABLE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE JUDGMENTS IN CASE OF SHREE BARKHA SYNTHETICS LTD. V /S ASSISTANT COMMISSIONER OF INCOME-TAX (2006) 155 TAXMAN 289 (R AJ.), COMMISSIONER OF INCOME-TAX, JAIPUR -II V. MORANI ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 44 AUTOMOTIVES (P.) LTD. [2014] 264 CTR 86 (RAJASTHAN- HC), CIT V. ORISSA CORPN. (P.) LTD. [1986) 159 ITR 78/25 TAXMAN 80F (SC), COMMISSIONER OF INCOME-TAX V/S MAR K HOSPITALS (P.) LTD. [2015] 373 ITR 115 (MADRAS)(MAG .), COMMISSIONER OF INCOME-TAX, AJMER V. JAI KUMAR BAKL IWAL [2014] 366 ITR 217 (RAJASTHAN), CIT V/S. CREATIVE WORLD TELEFILMS LTD (2011) 333 ITR 100 (BOM), COMMISSIONE R OF INCOME-TAX-I V. PATEL RAMNIKLAL HIRJI [2014] 222 TA XMAN 15 (GUJARAT)(MAG.), PRINCIPAL COMMISSIONER OF INCOME-T AX-4 V. G & G PHARMA INDIA LTD. [2016] 384 ITR 147 (DELHI) RE FERRED ABOVE WHICH HAVE BEEN ALSO BEEN FOLLOWED RECENTLY B Y HONBLE DELHI TRIBUNAL IN CASE OF ITO VS. SOFTLINE CREATION S (P) LTD. IN ITA NO. 744/DEL/2012 VIDE ITS ORDER DATED 10.02.201 6. FURTHER, HONBLE APEX COURT AS WELL AS HIGH COURT HAS HELD T HAT ONCE THE IDENTITY OF CREDITOR IS ESTABLISHED, THE DEPARTMENT IS FREE TO REOPEN THE ASSESSMENT OF CREDITOR AND NO ADDITION CAN BE M ADE IN THE HAND OF BORROWER AS RIGHTLY HELD IN CASE OF CIT V/S LOVELY EXPORTS PVT. LTD. [2008] 216 CTR 195 (SC), COMMISSI ONER OF INCOME-TAX V. ROCK FORT METAL & MINERALS LTD. [2011 ] 198 TAXMAN 497 (DELHI), DIVINE LEASING & FINANCE LIMITE D [2008] 299 ITR 268 (DELHI) CIT V. ORISSA CORPORATIO N (P.) LTD. [1986) 159 ITR 78/25 TAXMAN 80F (SC) AND OTHERS ON THIS QUESTION OF LAW. 6.11 FURTHER, POWER TO CALL FOR INFORMATION/PRODUCT ION OF EVIDENCES OR ENFORCING ATTENDANCE UNDER THE LAW IS GIVEN TO THE INCOME TAX AUTHORITIES ONLY AND THEREFORE, IN VIEW OF THE JUDGMENT CIT V/S VICTOR ELECTRODES LTD. [2010] 329 ITR 271, THE APPELLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE L ENDERS BEFORE THE ASSESSING AUTHORITIES THOUGH IN THE INSTANCE CA SE, APPELLANT HAS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 45 COOPERATED IN ASSESSMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTOR S/OFFICER WERE ALSO PRODUCED BEFORE THE AO. THUS, IN VIEW OF THE J UDICIAL PRECEDENTS REFERRED ABOVE, UNDER THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE IT IS UNTENABLE TO MAKE ANY ADDITI ON FOR ALLEGED NON-APPEARANCE BY THE CONCERNED PERSON BEFORE THE A UTHORITIES THOUGH THEY COMPLIED WITH THE NOTICES/SUMMON ISSUED TO THEM. 6.12 IN THE PRESENT CASE IN HAND, I FIND THAT AO AS KED ASSESSEE TO PRODUCE LENDER COMPANIES WITHOUT VERIFYING THE F ACTS OF LENDING MONEY FROM RESPECTIVE JURISDICTION ASSESSIN G OFFICER AND WITHOUT VERIFYING THEIR RETURNS OF INCOME AND BALAN CE SHEET WHEREIN THESE TRANSACTIONS ARE REPORTED, ACCORDINGL Y THE AO HAS NOT FOLLOWED THE PRINCIPLES LAID DOWN UNDER SECTION 68 OF THE ACT. THE HONBLE GUJRAT HIGH COURT IN THE CASE OF COMMIS SIONER OF INCOME-TAX V. RANCHHOD JIVABHAI NAKHAVA [2012] 21 TAXMANN.COM 159 (GUJ.) HAS HELD THAT:- ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE LENDERS WH O ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLO SED, THE INITIAL BURDEN UNDER SECTION 68 WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE LENDERS. [PARA 15] ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSE SSING OFFICER OF THOSE LENDERS, WHETHER IN THEIR RESPECTI VE RETURNS THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AN D HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD BEEN L ENT TO THE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER OF THE LENDERS OF THE ASSESSEE, T HE ASSESSING OFFICER DECIDES TO EXAMINE THE LENDERS AN D ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESSING OFFICER ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 46 DOES NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTI ON 68. [PARA 16] IN THE INSTANCE CASE BEFORE ME , THE AO HAS NOT FOL LOWED THE DUE PROCEDURE OF LAW U/S 68 OF THE ACT. THEREFORE, REQU IRING THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LENDER COM PANY WAS NOT LEGALLY TENABLE IN VIEW OF THE JUDGMENT OF GUJRAT H IGH COURT (SUPRA). 6.13 IT IS NOTED THAT NO CLINCHING EVIDENCES HAS BE EN BROUGHT ON RECORD THAT ANY UNACCOUNTED INCOME WAS ROUTED THROU GH UNSECURED LOANS BY THE APPELLANT FIRM AS NO EVIDENC ES AS TO RECEIPT/PAYMENT OF CASH FOR RECEIPT OF UNSECURED LO ANS WERE FOUND DURING SEARCH IN CASE OF THE APPELLANT. MERE SUSPIC ION HOWSOEVER STRONG CANNOT TAKE PLACE OF EVIDENCE. THUS, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH TO REBUT THE EVIDENCES FILED BY THE APPELLANT, THE IMPUGNED ADDITION MADE IN RESPECT OF UNSECURED LOAN U/S 68 OF THE ACT IS LEGALLY UNTENAB LE AND UNJUSTIFIED. 6.14 IN VIEW OF THE ABOVE DISCUSSION OF RELEVANT F ACTS AND FOLLOWING THE SEVERAL RATIOS ON THE SUBJECT FROM HO NBLE APEX COURT, HIGH COURTS INCLUDING JURISDICTIONAL HIGH CO URTS, TRIBUNALS INCLUDING JURISDICTIONAL TRIBUNALS, THE IMPUGNED ADDITION IN RESPECT OF UNSECURED LOANS FROM 03 COMP ANIES NAMELY, M/S BIRLA ARTS PRIVATE LIMITED, M/S TEAC CONSULTANT S PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED TOTALING TO RS.12,36,40,000/- IS NOT SUSTAINABLE AND HENCE THE SAME STANDS DELETED. THUS THE LD. CIT (A) WAS OF THE VIEW THAT SO FAR AS THE LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD., THE AO WAS H AVING THE STATEMENT OF SHRI ANAND SHARMA TO THE EFFECT THAT T HE SAID COMPANY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 47 WAS INVOLVED IN PROVIDING ACCOMMODATION ENTRY AND C ONTROLLED BY THE ENTRY OPERATOR WHEREAS IN RESPECT OF THESE THRE E COMPANIES THE AO WAS NOT HAVING ANY DOCUMENT OR EVEN THE STATEMEN T OF ANY PERSON WHO ARE ENTRY OPERATORS AND CONTROLLING THES E COMPANIES SO AS TO ESTABLISH THAT THE TRANSACTIONS ARE IN THE NA TURE OF BOGUS ACCOMMODATION ENTRIES. WE HAVE ALREADY CONSIDERED THE ISSUE ON MERITS IN RESPECT OF THE ADDITION MADE ON ACCOUNT O F UNSECURED LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD. W HEREAS THE LOANS TAKEN FROM THESE COMPANIES ARE EVEN AS PER TH E REVENUE ON BETTER FOOTINGS OF GENUINENESS THAN M/S. JALSAGAR C OMMERCE PVT. LTD. THERE IS NO DISPUTE THAT THE AO WAS NOT HAVIN G ANY EVIDENCE OR EVEN ANY STATEMENT TO IMPUGN THE TRANSACTIONS AS BOGUS ACCOMMODATION ENTRIES. FURTHER, THE ASSESSEE HAS P RODUCED ALL THE RELEVANT SUPPORTING DOCUMENTARY EVIDENCE AS WE HAVE REPRODUCED IN THE FOREGOING PARAS AS REFERRED BY THE LD. A/R O F THE ASSESSEE AND THESE CREDITOR COMPANIES WERE SUBJECT TO REGULAR AS SESSMENTS AND SCRUTINY ASSESSMENTS UNDER SECTION 143(3) WERE COMP LETED BY THE DEPARTMENT AS PER THE DETAILS REPRODUCED. THEREFORE , ONCE THESE CREDITOR COMPANIES ARE REGULARLY ASSESSED TO TAX AN D DULY EXAMINED BY THE DEPARTMENT AT THE SCRUTINY ASSESSMENTS, THEN THE TRANSACTIONS OF LOANS CANNOT BE HELD AS BOGUS WHEN THE SAME WERE ACCEPTED IN THE HANDS OF THE CREDITORS. WE FURTHER NOTE THAT THESE COMPANIES WERE HAVING SUFFICIENT FUNDS IN THE SHAPE OF SHARE CAPITAL, RESERVES AND SURPLUS. THE DETAILS OF THE SHARE CAPITALS OF THESE COMPANIES ARE AS UNDER :- M/S BIRLA ARTS PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 1998-1999 1997-1998 12,90,000 1999-2000 1998-1999 16,82,000 2003-2004 2002-2003 50,00,000 2004-2005 2003-2004 2,74,40,000 ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 48 2005-2006 2004-2005 3,69,50,000 2007-2008 2006-2007 3,26,00,000 2010-2011 2009-2010 250,00,000 2011-2012 2010-2011 20,00,000 2014-2015 2013-2014 67,57,37,000 M/S TEAC CONSULTANTS PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 1996-1997 1995-1996 26,00,000 2001-2002 2000-2001 73,98,000 2003-2004 2002-2003 1,00,00,000 2005-2006 2004-2005 4,85,50,000 2007-2008 2005-2006 3,35,00,000 2010-2011 2009-2010 2,76,00,000 2011-2012 2010-2011 94,00,000 M/S SANGAM DISTRIBUTORS PVT. LTD . ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2005-2006 2004-2005 2,47,50,000 2006-2007 2005-2006 10,50,00,000 2007-2008 2006-2007 7,93,50,000 2011-2012 2010-2011 2,50,00,000 2013-2014 2012-2013 13,00,00,000 THESE DETAILS CLEARLY SHOW THAT AT THE TIME OF GRA NTING OF LOANS TO THE ASSESSEE THESE COMPANIES WERE HAVING SUFFICIENT FUN DS. FURTHER, WE HAVE ALREADY RECORDED THE DETAILS OF REPAYMENT MADE BY THE ASSESSEE OF THESE LOANS AND ONCE REGULAR REPAYMENT WAS THERE EVEN PRIOR TO THE DATE OF SEARCH, THEN THE TRANSACTIONS CANNOT BE DOUBTED AS NOTHING CAN BE ACHIEVED BY TAKING THE LOAN AND THEN REPAYING THE SAME THROUGH BANKING CHANNEL EVEN IF THERE IS CORRE SPONDING CHANNELIZATION OF CASH. AS WE HAVE DISCUSSED EARLI ER THAT THE AO HAS NOT POINTED OUT ANY DISCREPANCY IN THE FINANCIAL ST ATEMENTS OR IN THE BANK ACCOUNT STATEMENTS OF THE LOAN CREDITORS TO SH OW THAT THERE WAS DEPOSIT OR INTRODUCTION OF THE CASH PRIOR TO GIVING THE LOAN TO THE ASSESSEE, ACCORDINGLY, IN VIEW OF THE FACTS AND CI RCUMSTANCES OF THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 49 CASE AS WELL AS OUR FINDING ON THE ISSUE OF ADDITIO N IN CASE OF M/S. JALSAGAR COMMERCE PVT. LTD., WE DO NOT FIND ANY ERR OR OR ILLEGALITY IN THE ORDER OF LD. CIT (A) QUA THIS ISSUE. 18. SIMILARLY IN THE CASE OF DCIT VS. BARAN FLOUR M ILLS PVT. LTD., THE TRIBUNAL HAS DEALT THE ISSUE FOR THE A.Y. 2010-11 AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. FOR THE ASSESSMENT YEAR 2010-1 1, THE ASSESSEE RECEIVED SHARE CAPITAL WITH PREMIUM FROM T WO COMPANIES DETAILS OF WHICH ARE AS UNDER :- (1) M/S. SANGAM DISTRIBUTORS PVT. LTD. RS. 90,00,0 00/- (2) M/S. TEAC CONSULTANTS PVT. LTD. RS. 15,00,000 /- THERE IS NO DISPUTE THAT DURING THE COURSE OF SEAR CH AND SEIZURE NO INCRIMINATING MATERIAL WAS EITHER FOUND OR SEIZE D DISCLOSING ANY UNDISCLOSED INCOME OR INDICATING ANY BOGUS TRANSACT ION OF RECEIPT OF SHARE CAPITAL AND PREMIUM BY THE ASSESSEE FROM T HESE TWO COMPANIES. FURTHER, THE AO HAS ALSO NOT REFERRED O R RELIED UPON ANY SEIZED DOCUMENT WHILE MAKING THE ADDITION OF TH E AMOUNT OF RS. 1,05,00,000/- ON ACCOUNT OF SHARE CAPITAL AND P REMIUM RECEIVED FROM THESE TWO COMPANIES UNDER SECTION 68 OF THE IT ACT. THE SOLE BASIS OF THE ADDITION MADE BY THE AO IS TH E INFORMATION RECEIVED FROM THE INVESTIGATION WING KOLKATA WHICH IS ALSO IN TURN IS NOTHING BUT THE NARRATION OF THE STATEMENTS OF V ARIOUS PERSONS ALLEGEDLY OPERATORS OF BOGUS ENTRY PROVIDER. THE A O HAS REFERRED TO THE STATEMENT OF SHRI ANAND SHARMA AND OTHER THR EE PERSONS AS MENTIONED IN THE REPORT OF THE INVESTIGATION WING F OR TREATING THE SHARE CAPITAL AND PREMIUM RECEIVED FROM THESE TWO C OMPANIES AS UNDISCLOSED CASH CREDIT BEING THE ASSESSEES OWN UN ACCOUNTED AND UNDISCLOSED INCOME ROUTED IN THE SHAPE OF SHARE CAP ITAL AND ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 50 PREMIUM. IT IS ALSO NOT DISPUTED THAT THE AO WAS N OT EVEN HAVING THE ALLEGED STATEMENT OF SHRI AMIT KEDIA AND SHRI A LOK HARLALKA BUT ONLY A REFERENCE WAS MADE IN THE REPORT OF THE INVESTIGATION WING. THEREFORE, EXCEPT THE REPORT OF THE INVESTIGA TION WING KOLKATA, THE AO WAS NOT HAVING ANY OTHER MATERIAL I N HIS POSSESSION TO SUPPORT HIS DECISION OF TREATING THE SHARE CAPITAL AND PREMIUM RECEIVED FROM THESE TWO COMPANIES AS BOGUS TRANSACTION AND ADDITION UNDER SECTION 68 OF THE ACT. ON THE CONTRARY, THE ASSESSEE HAS PRODUCED THE FOLLOWING DOCUMENTARY EVI DENCE IN SUPPORT OF THE CLAIM :- M/S TEAC CONSULTANTS PVT. LTD S. NO. PARTICULARS PAPER BOOK PAGE NO. 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 426 - 427 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 428 - 433 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 434 4 CONFIRMATION OF ACCOUNT SHOWING THE TRANSACTION WITH ASSESSEE COMPANY ALONG WITH LEDGERS FROM THE BOOKS OF SHARE APPLICANTS 435 - 436 5 COPY OF SHARE ALLOTMENT ADVICE 437 6 COPY OF SHARE APPLICATION FORM OF EQUITY SHARE 438 7 COPY OF AFFIDAVIT OF MR JITENDRA SHARMA DIRECTOR OF COMPANY. 439 - 442 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, 31.03.2013, 31.03.2014, 31.03.2015 AND 31.03.2016. 443 - 449 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2005-06, AY 2006- 07, AY 2012-13 AND 2014-15. 450 - 469 10 COPY OF ROC MASTER DATA. 470 - 471 11 COPY OF PAN CARD. 472 12 CERTIFICATE OF INCORPORATION. 473 ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 51 13 COPY OF CERTIFICATE OF NBFC REGISTRATION. 474 14 COPY OF SUMMON NO. 1433 DATED 13.10.2017 AND REMINDER SUMMON NO.-1592 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 TO M/S TEAC CONSULTANTS PRIVATE LIMITED. 475 - 478 15 COPY OF REPLY IN RESPONSE TO SUMMON ISSUED TO TH E COMPANY. 479 - 481 16 COPY OF LETTER FOR CONFIRMATION OF SOURCE OF FUN DS USED FOR APPLYING THE SHARES ALONG WITH SUPPORTING DOCUMENTS 482 - 485 M/S SANGAM DISTRIBUTORS PVT. LTD. S. NO. PARTICULARS PAPER BOOK PAGE NO. 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 486 - 487 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 488 - 489 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 490 4 CONFIRMATION OF ACCOUNT SHOWING THE TRANSACTION WITH ASSESSEE COMPANY. 491 5 COPY OF SHARE APPLICATION FORM OF EQUITY SHARE 492 - 493 6 COPY OF AFFIDAVIT OF MRS NEELAM GAUTAM DIRECTOR O F M/S BIRLA ARTS PVT LTD. ON BEHALF OF AMALGAMATED COMPANY M/S SANGAM DISTRIBUTORS PVT LTD. 494 - 497 7 COPY OF ORDER DATED 19.07.2014 PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES IN THIS COMPANY 498 - 524 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, AND 31.03.2013. 525 - 528 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, AY 2007- 08 AND 2013-14. 529 - 540 10 COPY OF ROC MASTER DATA. 541 - 542 11 COPY OF PAN CARD. 543 12 CERTIFICATE OF INCORPORATION. 544 ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 52 THUS IT IS MANIFEST FROM THE DETAILS OF THE DOCUMEN TARY EVIDENCE PRODUCED BY THE ASSESSEE THAT THE ASSESSEE ESTABLIS HED ITS CLAIM OF GENUINENESS OF THE TRANSACTION AS WELL AS CREDIT WORTHINESS OF THESE SHARE APPLICANTS BY SHOWING THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS AND FINANCIAL STATEMENTS OF THE SHARE APPL ICANTS, THE AVAILABILITY OF THE FUNDS TO ESTABLISH THE CAPACITY OF THE SHARE APPLICANTS TO SUBSCRIBE TO THE SHARE CAPITAL OF THE ASSESSEE WITH PREMIUM. FURTHER, THE INCOME TAX RETURNS OF THE SH ARE APPLICANTS WERE ALSO FILED WHICH SHOW THAT ALL THE TRANSACTION S WERE DISCLOSED IN THE RETURN OF INCOME. APART FROM THE CAPACITY O F THE SHARE APPLICANTS, THE ASSESSEE HAS ALSO PRODUCED THE BANK STATEMENTS OF THE SHARE APPLICANTS TO SHOW THAT THE PAYMENT OF TH E MONEY WAS MADE THROUGH BANKING CHANNEL AND THE AO HAS NOT POI NTED OUT ANY DISCREPANCY EITHER IN THE BANK ACCOUNT STATEMEN TS OF THE SHARE APPLICANTS OR IN THE FINANCIAL STATEMENTS TO SHOW THAT THERE WAS ANY CORRESPONDING DEPOSITS OF MONEY PRIOR TO T HE PAYMENT TO THE ASSESSEE WHICH COULD INDICATE A SLIGHTEST SCOPE OF ASSESSEES OWN MONEY ROUTED THROUGH SHARE APPLICANTS. THEREFO RE, IN THE ABSENCE OF ANY SUCH FINDING OR ANY SUCH DISCREPANCY IN THE BANK ACCOUNT STATEMENTS AND FINANCIAL STATEMENTS, THE AO HAS NOT PRODUCED ANY MATERIAL OR RECORD TO CONTRADICT THE D OCUMENTARY EVIDENCE FILED BY THE ASSESSEE IN SUPPORT OF THE CL AIM. FURTHER, THERE IS A DECISION OF HONBLE CALCUTTA HIGH COURT IN CASE OF M/S. SANGAM DISTRIBUTORS PVT. LTD. APPROVING THE AMALGAM ATION OF THE COMPANY. THE ASSESSEE ALSO PRODUCED THE CONFIRMATI ON AND AFFIDAVITS OF THE DIRECTORS OF THE SHARE APPLICANT COMPANIES APART FROM THE FINANCIAL STATEMENTS TO SHOW THE SUFFICIEN CY OF FUND WITH THE SHARE APPLICANTS AND REGULAR BUSINESS ACTIVITIE S AND FLOW OF FUNDS. FURTHER, THE ASSESSEE ALSO PRODUCED THE ROC MASTER DATA OF SHARE APPLICANTS TO SHOW THAT THE STATUS OF THES E COMPANIES AS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 53 PER ROC RECORD IS ACTIVE/AMALGAMATED . THE SHARE APPLICANT COMPANIES ARE ALSO REGULARLY ASSESSED TO TAX AND SU BJECT TO SCRUTINY ASSESSMENT. THE ASSESSEE PRODUCED THE ASS ESSMENT ORDERS PASSED UNDER SECTION 143(3) IN RESPECT OF TH E SHARE APPLICANT COMPANIES, DETAILS OF WHICH ARE AS UNDER :- ASSESSMENT U/S 143(3) : NAME OF COMPANY ASSESSMENT YEAR INCOME ASSESSED ASSESSMENT ORDER U/S 143(3) AT PB PG M/S TEAC CONSULTANTS PVT. LTD 2005-06 13,980 451-453 M/S TEAC CONSULTANTS PVT. LTD 2006-07 45,395 454-455 M/S TEAC CONSULTANTS PVT. LTD 2012-13 49,91,290 459-462 M/S TEAC CONSULTANTS PVT. LTD 2014-15 10,14,150 466/ M/S SANGAM DISTRIBUTORS PVT.LTD 2006-07 NIL 530-531 M/S SANGAM DISTRIBUTORS PVT.LTD 2007-08 9,600 534-535 M/S SANGAM DISTRIBUTORS PVT.LTD 2013-14 6,79,400 538 M/S ISIS MERCANTILE PVT. LTD. 2006-07 6,936/- 500-501 M/S ISIS MERCANTILE PVT. LTD 2013-14 21,81,459/- 502-505 M/S ISIS MERCANTILE PVT. LTD 2014-15 NIL (AMALGAMATED WITH M/S MAGNATE CAPITAL MARKET PVT. LTD.) 509-510 THUS IT IS CLEAR THAT BOTH THE SHARE APPLICANT COMP ANIES ARE REGULARLY ASSESSED AND ASSESSMENT ORDERS UNDER SECT ION 143(3) WERE PASSED WHEREIN THE TRANSACTIONS OF INVESTMENT MADE IN THE SHARES OF THE ASSESSEE WERE NOT DISTURBED BY THE AO . HENCE ALL THESE DOCUMENTARY EVIDENCES AS WELL AS THE ADMITTED FACTS CLEARLY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 54 ESTABLISHED THAT THE ASSESSEE HAS DISCHARGED ITS ON US OF PROVING THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPL ICANTS AS WELL AS GENUINENESS OF THE TRANSACTIONS. THE AO HAS NOT BRO UGHT ON RECORD ANY EVIDENCE TO CONTRADICT THE DOCUMENTARY E VIDENCE FILED BY THE ASSESSEE. THE LD. CIT (APPEALS) HAS DELETE D THE ADDITION IN PARA 5 TO 5.13 AS UNDER :- 5. ON BEING PERUSAL OF REPORTS DATED 28.11.2017 AND 06.12.2017 RECEIVED FROM INVESTIGATION DIRECTORATE, KOLKATA IT REVEALS NO ADVERSE FACTS, DETAILS AND EVIDENCES ARE NOT FOUND IN THE REPORTS IN RESPECT OF SHARE APPLICATION MONEY AND S HARE PREMIUM RECEIVED FROM M/S SANGAM DISTRIBUTORS PVT. LTD. AND M/S TEAC CONSULTANTS PVT. LTD. AS MENTIONED IN PARA 4.4.7 AB OVE MY FINDINGS ARE AS FOLLOWS:- 5.1 AS DISCUSSED IN PARA 4.4.7 ABOVE, IN RESPECT OF THE INVESTORS NAMELY M/S SANGAM DISTRIBUTORS PVT. LTD. AND M/S TE AC CONSULTANTS PRIVATE LIMITED ADVERSE FINDINGS ALONG WITH ELOQUENT EVIDENCES IN THE FORM OF STATEMENT ON OATH OF RELEV ANT ENTRY OPERATORS ARE NOT VISIBLE IN THE REPORTS DATED 28.1 1.2017 AND 06.12.2017 FROM INVESTIGATION DIRECTORATE, KOLKATA AND THEREFORE IT COULD NOT BE TREATED AS SHELL COMPANY. 5.2 AS FAR AS THE LENDER COMPANIES NAMELY, M/S SANG AM DISTRIBUTORS PVT. LTD AND M/S TEAC CONSULTANTS PRIV ATE LIMITED IS CONCERNED, IT IS EVIDENT FROM THE DOCUMENTS PLACED ON RECORD THAT NOTICE WAS ISSUED BY DDIT, KOLKATA U/S 131 TO THESE COMPANIES WHICH WAS DULY COMPLIED WITH AND RELEVANT DOCUMENTS WERE FILED. THERE IS NO FACT ON RECORD THAT THE NOTICES REMAINE D UNSERVED OR THESE COMPANIES WERE NOT FOUND EXISTENT ON THE GIVE N ADDRESSES. FURTHERMORE, AFFIDAVIT OF THE DIRECTORS WERE ALSO S UBMITTED ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 55 WHEREIN THE DIRECTORS CONFIRMED INVESTMENT IN SHARE S OF THE APPELLANT AND SOURCE OF PROVIDING THE SAID. ALSO, I T IS EVIDENT FROM THE ASSESSMENT ORDER THAT NO STATEMENT/EVIDENC E HAS BEEN RELIED UPON OR PROVIDED BY THE AO FOR SUBSTANTIATIN G THAT THESE COMPANIES ARE CONTROLLED BY THE SO-CALLED ENTRY OPE RATORS. 5.3 FOR THIS INVESTOR NAMELY, M/S SANGAM DISTRIBUT ORS PVT. LTD. AND M/S TEAC CONSULTANTS PRIVATE LIMITED, THE APPELLANT IN DISCHARGE OF ITS ONUS U/S 68 OF THE ACT HAS FILED C ONFIRMATION OF ACCOUNTS AS WELL AS BANK STATEMENT REFLECTING THE T RANSACTIONS WITH OTHER SUBSTANTIATING DOCUMENTS ALONG WITH ASSESSMEN T ORDERS IN CASE OF INVESTOR COMPANIES, WHICH ARE AVAILABLE AT PAGE NO. 292 TO 389 OF PB. FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD, IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANS ACTIONS IS ESTABLISHED. THERE IS NO GAIN SAYING THAT THE ONUS SQUARELY LIES ON THE APPELLANT TO PROVE THE IDENTITY, CREDITWORTHINE SS AND GENUINENESS OF THE CASH CREDITS. IN THE CASE OF ADD L. CIT V. BAHRI BROS. (P) LTD. [1985] 154 ITR 244 (PAT), THE HON'BL E PATNA HIGH COURT HAS HELD ' IF THE LOANS ARE GIVEN BY AN ACCOUNT PAYING CHEQUE, IT AMOUNTS TO IDENTIFICATION OF THE PARTIES AND DISCHARGE OF BURDEN BY THE BORROWER .' IN VIEW OF THE ABOVE, IT IS CLEAR THAT APPELLANT DISCHARGED ITS BURDEN U/S 68 OF THE ACT. EVEN OTHERWISE, THERE IS NO ADVERSE FINDING OF ANY INVESTIGATION CO NDUCTED BY THE DEPARTMENT IN RELATION TO THESE COMPANIES. THEREFOR E, IN THE ABSENCE OF ANY INDEPENDENT INQUIRY AND ANY ADVERSE FINDINGS TO REBUT THE EVIDENCES FILED BY THE APPELLANT, I FIND THAT THE ADDITION IN RESPECT OF SHARE APPLICATION AND SHARE PREMIUM F ROM M/S SANGAM DISTRIBUTORS PVT. LTD. AND M/S TEAC CONSULTA NTS PRIVATE LIMITED AMOUNTING TO RS. 1,05,00,000/- IS UNJUSTIFI ED; FIRSTLY, ON ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 56 THE GROUND THAT NO INQUIRIES WERE MADE TO REBUT THE EVIDENCES FILED BY THE APPELLANT AND SECONDLY, ON THE GROUND THAT APPELLANT DULY DISCHARGED ITS BURDEN CASTED UPON U/S 68 OF TH E ACT TO EXPLAIN NATURE AND SOURCE OF THE TRANSACTIONS BY PR OVING THE IDENTITY, CREDITWORTHINESS OF CREDITOR AND GENUINEN ESS OF THE TRANSACTION. IN PARTICULAR, NONE OF THE MATERIAL OR STATEMENTS HAVE BEEN PROVIDED IN THE ASSESSMENT ORDER WHEREIN NAMES OF THE SAID COMPANIES ARE MENTIONED. NOTABLY, THE TRANSACTIONS WITH THE COMPANY ARE DULY VERIFIABLE FROM CONFIRMATION OF AC COUNTS PLACED AT PAGE NO. 296 AND 351 OF PB WITH SUPPORTING BANK STATEMENTS PLACED AT PAGE NO. 295 AND 352 OF PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT H AS DULY PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTIONS. 5.4 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EV IDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSAC TIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MA KING OF LOANS, THERE IS BALANCE AVAILABLE IN THE ACCOUNTS O F THE BORROWERS, WHICH PROVES THE CREDITWORTHINESS AND GENUINENESS O F THE TRANSACTIONS. THERE IS NO CASE OF ANY CASH DEPOSIT ION IN THE ACCOUNT OF ANY OF THE INVESTOR AT THE TIME OF ISSUI NG CHEQUES/RTGS IN FAVOUR OF THE ASSESSEE. THEREFORE, IN VIEW OF THE SETTLED JUDICIAL PRECEDENT IN CASE OF CIT V. VA RINDER RAWLLEY [2014] 366 ITR 232 (PUNJAB & HARYANA), CIT V. VIJAY KUMAR JAIN [2014] 221 TAXMAN 180, CIT V. VICTOR ELECTRODES LTD. [2010] 329 ITR 271, ADDL. CI T V. BAHRI BROS. (P) LTD. [1985] 154 ITR 244 (PAT) AND OTHERS AS REFERRED BY THE APPELLANT, I AM OF THE CONSIDERED VIEW THAT APP ELLANT DULY DISCHARGED ITS BURDEN CASTED UPON IT U/S 68 OF THE ACT. IT IS FURTHER ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 57 SEEN THAT M/S SANGAM DISTRIBUTORS PVT. LTD AND M/S TEAC CONSULTANTS PRIVATE LIMITED DULY REPLIED TO THE NOT ICES ISSUED BY DCIT/DDIT(INV.), KOLKATA IN RESPECT OF COMMISSION, THESE FACTS REMAIN UNCONTROVERTED BY THE AO. 5.5 THE AO DURING ASSESSMENT PROCEEDINGS TOOK NEGAT IVE INFERENCE FROM THE STATEMENT OF SHRI RAJENDRA AGARW AL RECORDED DURING SEARCH U/S 132(4) WHEREIN HE MADE DISCLOSURE IN RESPECT OF LONG TERM CAPITAL GAIN IN HIS INDIVIDUAL HANDS. I H AVE GONE THROUGH THE STATEMENT OF SHRI RAJENDRA AGARWAL AND HIS DISCLOSURE MADE IN HIS STATEMENT, NOTABLY, THE DISCLOSURE MADE WAS IN HIS PERSONAL CAPACITY ONLY AND WITH RESPECT TO LTCG ONL Y AND NOT IN RESPECT OF ANY OTHER TRANSACTIONS BE IT BE RECEIPT OF UNSECURED LOANS. FURTHER, RAJENDRA AGARWAL AND APPELLANT ARE SEPARATE LEGAL ENTITY. THEREFORE, I FIND THAT IN THE ABSENCE OF AN Y NEXUS OF THE STATEMENT OF SHRI RAJENDRA AGARWAL WITH THE APPELLA NT OR ITS TOTAL INCOME, THIS BASIS OF ADDITION ADOPTED BY THE AO IS FARFETCHED & CANNOT BE CONCURRED. 5.6 IT IS FURTHER SEEN THAT AO HAS NOT BROUGHT ANY SPECIFIC DEFECT / DISCREPANCIES IN THE DIRECT EVIDENCE BROUG HT ON RECORD BY THE APPELLANT. THE AO HAS OBSERVED THAT ON THE DATE OF DEBIT IN THE ACCOUNT STATEMENT OF INVESTOR, THERE IS CORRESP ONDING CREDIT ENTRY OF EQUAL AMOUNT, HOWEVER, THIS OBSERVATION OF THE AO IS ITSELF NOT SUFFICIENT TO PROVE BEYOND DOUBT THAT AP PELLANT ROUTED ITS UNACCOUNTED INCOME BY THESE COMPANIES RATHER IT PROVES THE SOURCE IN THE HANDS OF THE APPELLANT. IT IS USUAL B USINESS PRACTICE, WHILE MAKING INVESTMENT, FUNDS ARE REQUIRED TO BE A RRANGED BY THE INVESTOR, THEREFORE REFLECTION OF SUCH ENTRIES IN B ANK STATEMENT DOESNT LEAD TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 58 NEEDLESS TO SAY THAT APPELLANT IS NOT REQUIRED TO P ROVE SOURCE OF THE SOURCE U/S 68 OF THE ACT IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS. 5.7 IN MY CONSIDERED VIEW, MERE NOT BELIEVING AN EX PLANATION CANNOT LEAD TO A CONCLUSION THAT THE INVESTED AMOUN T IS THE INCOME OF THE ASSESSEE FROM SOME UNDISCLOSED SOURCES WHILE IN THE PRESENT CASE, NO EVIDENCES OF ANY GENERATION OF UND ISCLOSED INCOME OR THEIR UTILIZATION IN THE FORM OF SHARE AP PLICATION AND SHARE PREMIUM HAS BEEN FOUND AND BROUGHT ON RECORD. 5.8 SIMILARLY, I FIND THAT VARIOUS OBSERVATIONS OF THE AO ON BALANCE SHEET / ITR OF THE LENDER COMPANIES ARE MIS CONSTRUED, MISCONCEIVED AND ARE FACTUALLY INCORRECT. I FURTHER FIND THAT THE VARIOUS OTHER ALLEGATIONS / OBSERVATIONS OF THE AO ARE MISCONCEIVED AND PREMATURE ONLY AND IN VIEW THE APP ELLANTS SUBMISSION MADE IN PARA 10 AS REPRODUCED IN PARA NO . 4.2 OF THIS ORDER, THE SAME DOES NOT LEAD ANY WHERE TO DRAW ANY ADVERSE INFERENCE AGAINST THE APPELLANT. FURTHER, THE VARIO US CASE LAWS RELIED UPON BY THE AO ARE DISTINGUISHABLE FROM THE FACTS OF THE PRESENT CASE AS CATEGORICALLY COUNTERED BY THE APPE LLANT IN HIS WRITTEN SUBMISSIONS AS REPRODUCED IN PARA NO. 4.2 A BOVE. 5.9 IT IS SETTLED JUDICIAL PRECEDENTS THAT UNDER TH E INCOME TAX LAW PRIMARY BURDEN U/S 68 OF THE ACT IS ON THE APPE LLANT AND ONCE THIS BURDEN IS DISCHARGED U/S 68 OF THE ACT, NO ADD ITION U/S 68 OF THE ACT IS JUSTIFIABLE IN THE HANDS OF THE ASSESSEE IN VIEW OF THE JUDGMENTS IN CASE OF SHREE BARKHA SYNTHETICS LTD. V /S ASSISTANT COMMISSIONER OF INCOME-TAX (2006) 155 TAXMAN 289 (R AJ.), COMMISSIONER OF INCOME-TAX, JAIPUR -II V. MORANI ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 59 AUTOMOTIVES (P.) LTD. [2014] 264 CTR 86 (RAJASTHAN- HC), CIT V. ORISSA CORPN. (P.) LTD. [1986) 159 ITR 78/25 TAXMAN 80F (SC), COMMISSIONER OF INCOME-TAX V/S MAR K HOSPITALS (P.) LTD. [2015] 373 ITR 115 (MADRAS)(MAG .), COMMISSIONER OF INCOME-TAX, AJMER V. JAI KUMAR BAKL IWAL [2014] 366 ITR 217 (RAJASTHAN), CIT V/S. CREATIVE WORLD TELEFILMS LTD (2011) 333 ITR 100 (BOM), COMMISSIONE R OF INCOME-TAX-I V. PATEL RAMNIKLAL HIRJI [2014] 222 TA XMAN 15 (GUJARAT)(MAG.), PRINCIPAL COMMISSIONER OF INCOME-T AX-4 V. G & G PHARMA INDIA LTD. [2016] 384 ITR 147 (DELHI) RE FERRED ABOVE WHICH HAVE BEEN ALSO BEEN FOLLOWED RECENTLY B Y HONBLE DELHI TRIBUNAL IN CASE OF ITO VS. SOFTLINE CREATION S (P) LTD. IN ITA NO. 744/DEL/2012 VIDE ITS ORDER DATED 10.02.201 6. FURTHER, HONBLE APEX COURT AS WELL AS HIGH COURT HAS HELD T HAT ONCE THE IDENTITY OF CREDITOR IS ESTABLISHED, THE DEPARTMENT IS FREE TO REOPEN THE ASSESSMENT OF CREDITOR AND NO ADDITION CAN BE M ADE IN THE HAND OF BORROWER AS RIGHTLY HELD IN CASE OF CIT V/S LOVELY EXPORTS PVT. LTD. [2008] 216 CTR 195 (SC), COMMISSI ONER OF INCOME-TAX V. ROCK FORT METAL & MINERALS LTD. [2011 ] 198 TAXMAN 497 (DELHI), DIVINE LEASING & FINANCE LIMITE D [2008] 299 ITR 268 (DELHI) CIT V. ORISSA CORPORATIO N (P.) LTD. [1986) 159 ITR 78/25 TAXMAN 80F (SC) AND OTHERS ON THIS QUESTION OF LAW. 5.10 FURTHER, POWER TO CALL FOR INFORMATION/PRODUCT ION OF EVIDENCES OR ENFORCING ATTENDANCE UNDER THE LAW IS GIVEN TO THE INCOME TAX AUTHORITIES ONLY AND THEREFORE, IN VIEW OF THE JUDGMENT CIT V/S VICTOR ELECTRODES LTD. [2010] 329 ITR 271, THE APPELLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE I NVESTORS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 60 BEFORE THE ASSESSING AUTHORITIES THOUGH IN THE INST ANCE CASE, APPELLANT HAS COOPERATED IN ASSESSMENT BY SHOWING H IS WILLINGNESS TO PRODUCE THE DIRECTORS OF INVESTOR CO MPANIES AND SOME DIRECTORS/OFFICER WERE ALSO PRODUCED BEFORE TH E AO. THUS, IN VIEW OF THE JUDICIAL PRECEDENTS REFERRED ABOVE, UND ER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE IT IS UNTENABLE T O MAKE ANY ADDITION FOR ALLEGED NON-APPEARANCE BY THE CONCERNE D PERSON BEFORE THE AUTHORITIES THOUGH THEY COMPLIED WITH TH E NOTICES/SUMMON ISSUED TO THEM. 5.11 IN THE PRESENT CASE IN HAND, I FIND THAT AO AS KED ASSESSEE TO PRODUCE INVESTOR COMPANIES WITHOUT VERIFYING THE FACTS OF INVESTING MONEY FROM RESPECTIVE JURISDICTION ASSESS ING OFFICER AND WITHOUT VERIFYING THEIR RETURNS OF INCOME AND BALAN CE SHEET WHEREIN THESE TRANSACTIONS ARE REPORTED, ACCORDINGL Y THE AO HAS NOT FOLLOWED THE PRINCIPLES LAID DOWN UNDER SECTION 68 OF THE ACT. THE HONBLE GUJRAT HIGH COURT IN THE CASE OF COMMIS SIONER OF INCOME-TAX V. RANCHHOD JIVABHAI NAKHAVA [2012] 21 TAXMANN.COM 159 (GUJ.) HAS HELD THAT:- ONCE THE ASSESSEE HAS ESTABLISHED THAT HE HAS TAKEN MONEY BY WAY OF ACCOUNT PAYEE CHEQUES FROM THE LENDERS WH O ARE ALL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLO SED, THE INITIAL BURDEN UNDER SECTION 68 WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIVEN BY THOSE LENDERS. [PARA 15] ONCE THE ASSESSING OFFICER GETS HOLD OF THE PAN OF THE LENDERS, IT WAS HIS DUTY TO ASCERTAIN FROM THE ASSE SSING OFFICER OF THOSE LENDERS, WHETHER IN THEIR RESPECTI VE RETURNS THEY HAD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AN D HAD FURTHER SHOWN THAT THOSE AMOUNT OF MONEY HAD BEEN L ENT TO THE ASSESSEE. IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER OF THE LENDERS OF THE ASSESSEE, T HE ASSESSING OFFICER DECIDES TO EXAMINE THE LENDERS AN D ASKS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 61 THE ASSESSEE TO FURTHER PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESSING OFFICER DOES NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTI ON 68. [PARA 16] IN THE INSTANCE CASE BEFORE ME , THE AO HAS NOT FOL LOWED THE DUE PROCEDURE OF LAW U/S 68 OF THE ACT. THEREFORE, REQU IRING THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LENDER COM PANY WAS NOT LEGALLY TENABLE IN VIEW OF THE JUDGMENT OF GUJARAT HIGH COURT (SUPRA). 5.12 IT IS NOTED THAT NO CLINCHING EVIDENCES HAS BE EN BROUGHT ON RECORD THAT ANY UNACCOUNTED INCOME WAS ROUTED THROU GH SHARE APPLICATION AND SHARE PREMIUM BY THE APPELLANT AS N O EVIDENCES AS TO RECEIPT/PAYMENT OF CASH FOR RECEIPT OF SHARE APPLICATION AND SHARE PREMIUM WERE FOUND DURING SEARCH IN CASE OF T HE APPELLANT. MERE SUSPICION HOWSOEVER STRONG CANNOT TAKE PLACE O F EVIDENCE. THUS, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH TO REBUT THE EVIDENCES FILED BY THE APPELLAN T, THE IMPUGNED ADDITION MADE IN RESPECT OF SHARE APPLICATION & SHA RE PREMIUM U/S 68 OF THE ACT IS LEGALLY UNTENABLE AND UNJUSTIF IED. 5.13 IN VIEW OF THE ABOVE DISCUSSION OF RELEVANT F ACTS AND FOLLOWING THE SEVERAL RATIOS ON THE SUBJECT FROM HO NBLE APEX COURT, HIGH COURTS INCLUDING JURISDICTIONAL HIGH CO URTS, TRIBUNALS INCLUDING JURISDICTIONAL TRIBUNALS, THE I MPUGNED ADDITION IN RESPECT OF SHARE APPLICATION AND SHARE PREMIUM RECEIVED FROM M/S SANGAM DISTRIBUTORS PVT. LTD. AND M/S TEAC CONSULTANTS PRIVATE LIMITED TOTALLING TO RS. 1,05,0 0,000/- IS NOT SUSTAINABLE AND HENCE THE SAME STANDS DELETED. IN V IEW OF ABOVE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 62 THE GROUND NO. 2, 13 TO 18 AND 20 OF APPEAL IS ALLO WED TO THE EXTENT MENTIONED ABOVE. ACCORDINGLY, IN VIEW OF THE ABOVE DISCUSSION AS WEL L AS FACTS AND CIRCUMSTANCES OF THE CASE THE AO HAS MADE THE ADDIT ION BASED ON THE REPORT OF THE INVESTIGATION WING KOLKATA WHEREA S THE ASSESSEE HAS PRODUCED ALL THE RELEVANT DOCUMENTARY EVIDENCE TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTIONS. HENCE IN THE ABSENCE OF ANY DISCREPANCY OR OTHERWIS E ANY MATERIAL OR RECORD TO SHOW THAT THE ASSESSEES OWN UNACCOUNTED/UNDISCLOSED INCOME HAS ROUTED THROUGH T HE SHARE APPLICANTS, THE ADDITION MADE BY THE AO IS NOT JUST IFIED. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (APPEALS) IN DELETING THE ADDI TION. 19. SIMILARLY IN RESPECT OF LOAN TAKEN FROM M/S TEAC CONSULTANTS PVT. LTD. OF RS. 15.00 LACS ON ACCOUNT OF SHARE CAPITAL AND PREMIUM, THIS ISSUE IS ALSO COVERED BY THE DECISION OF THE COORDI NATE BENCH IN THE CASE OF KOTA DALL MILL VS. DCIT (SUPRA) ORDER DATED 31/12 /2018 FOR THE A.Y. 2010-11 TO 2012-13 AT PAGE 92 TO 102 AND IN THE CAS E OF DCIT VS. M/S BARAN ROLLER FLOUR MILLS PVT. LTD. (SUPRA) AT PAGE 11 TO 23, WHICH HAS ALREADY BEEN REPRODUCED AND DISCUSSED IN EARLIER PA RAGRAPHS OF THIS ORDER. 20. IN RESPECT OF SHARE APPLICATION FROM M/S ISIS M ERCANTILE PVT. LTD. AMOUNTING TO RS. 1.20 CRORES, WE FOUND THAT EXACTLY SIMILAR ISSUE HAS BEEN DEALT IN THE DECISION OF GROUP CONCERN IN THE CASE OF DCIT VS. M/S ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 63 BARAN ROLLER FLOUR MILLS PVT. LTD. (SUPRA) FOR THE A.Y. 2011-12. THE PRCISED OBSERVATION OF THE TRIBUNAL IN THE CASE OF M/S BARAN ROLLER FLOUR MILLS PVT. LTD. (SUPRA) ARE FROM PAGE NO. 24 AND 25 AS REPRODUCED UNDER: 7. FOR THE ASSESSMENT YEAR 2011-12, THE ADDITION W AS MADE IN RESPECT OF THE SHARE CAPITAL AND PREMIUM OF RS. 90, 00,000/- RECEIVED FROM M/S. ISIS MERCANTILE PVT. LTD. THE O THER FACTS REGARDING THIS ISSUE REMAIN IDENTICAL AS FOR THE AS SESSMENT YEAR 2010-11. THE AO HAS MADE THE ADDITION BASED ON THE REPORT OF THE INVESTIGATION WING KOLKATA. HOWEVER, EXCEPT THE SAID INFORMATION RECEIVED FROM THE INVESTIGATION WING, T HE AO WAS NOT HAVING ANY OTHER EVIDENCE OR MATERIAL TO SHOW T HAT THE TRANSACTION IS A BOGUS ENTRY PROVIDED BY THE SHARE APPLICANT. THE ASSESSEE PRODUCED THE FOLLOWING DOCUMENTARY EVI DENCE IN SUPPORT OF THE CLAIM :- M/S ISIS MERCANTILE PVT. LTD. S. NO. PARTICULARS PB PAGE NO./ AY 2011-12 1 COPY OF ACK. OF ITR OF AY 2011-12 ALONG WITH COMPUTATION SHEET. 430-432 2 COPY OF BALANCE SHEET OF AY 2011-12 ALONG WITH ENCLOSURES. 433-450 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 451-454 4 CONFIRMATION OF ACCOUNT SHOWING THE TRANSACTION WITH ASSESSEE COMPANY, ALONG WITH LEDGER ACCOUNT FROM THE BOOKS OF SHARE APPLICANTS 455-456 5 COPY OF SHARE ALLOTMENT ADVICE 457 6 COPY OF SHARE APPLICATION FORM OF EQUITY SHARE ALONG WITH FORM 2 458-468 ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 64 7 COPY OF AFFIDAVIT OF MRS BABITA KRIPLANI DIRECTOR OF COMPANY. 469-472 8 COPY OF ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES IN THIS COMPANY 473-495 9 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, AND 31.03.2013. 496-499 10 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, AY 2013-14 AND 2014-15. 500-513 11 COPY OF ROC MASTER DATA. 514-515 12 COPY OF PAN CARD. 516 13 CERTIFICATE OF INCORPORATION. 517 14 COPY OF SUMMON NO. 1444 DATED 13.10.2017 AND REMINDER SUMMON NO. 1584 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961 TO M/S ISIS MERCANTILES PVT. LTD. 518-521 15 COPY OF REPLY IN RESPONSE TO SUCH SUMMON ALONG WITH DISPATCH PROOF. 522-524 FURTHER, THE ASSESSEE ALSO PRODUCED THE MASTER DATA OF ROC SHOWING THE STATUS OF THE SAID COMPANY AS AMALGAMATED . THE AMALGAMATION WAS DULY APPROVED BY THE HONBLE H IGH COURT. THE FINANCIAL STATUS AND CAPACITY TO INVEST IN THE SHARES OF THE ASSESSEE WAS ALSO PROVED BY SHOWING THE SHARE CAPIT AL OF THE SAID COMPANY RAISED IN THE FINANCIAL YEAR 2005-06 O F RS. 15.42 CRORES, IN THE FINANCIAL YEAR 2010-11 OF RS. 2.5 CR ORES AND IN THE FINANCIAL YEAR 2012-13 OF RS. 12.9 CRORES. THE ASS ESSMENT ORDERS FOR ALL THESE YEARS EXCEPT ASSESSMENT YEAR 2 011-12 WERE ALSO PASSED UNDER SECTION 143(3) OF THE IT ACT AND, THEREFORE, THE AVAILABILITY OF THE FUNDS AS WELL AS THE INVEST MENT MADE BY THE SAID COMPANY IN THE SHARES OF THE ASSESSEE WERE NOT DISTURBED BY THE DEPARTMENT WHILE COMPLETING THE SC RUTINY ASSESSMENT. HENCE IN VIEW OF OUR FINDING ON THIS I SSUE FOR THE ASSESSMENT YEAR 2010-11 AND AN IDENTICAL FINDING OF THE LD. CIT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 65 (APPEALS) FOR THE ASSESSMENT YEAR UNDER CONSIDERATI ON, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED OR DER OF THE LD. CIT (A) FOR THE ASSESSMENT YEAR 2011-12. 21. GROUNDS TAKEN BY THE ASSESSEE IN ITS APPEAL FOR THE A.Y. 2010-11 AND 2011-12 PERTAINING TO NO ADDITION IN CASE OF NO T ABATED ASSESSMENT, WHEN NO INCRIMINATING MATERIAL IS FOUND, IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S KOTA DALL MILLS VS. DCIT (SUPRA) FOR THE A.Y. 2010-11 TO 2013-14 AT PAGE 12 TO 36 ARE REPROD UCED AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT PENDING ON THE DATE OF SEARCH ON 2 ND JULY, 2015. EVEN IN SOME OF THE ASSESSMENT YEARS ORDERS UNDER SECTION 143(3) WERE P ASSED AND IN OTHER CASES THE ASSESSMENT WAS COMPLETED UNDER S ECTION 143(1) OF THE ACT. THUS THE ASSESSMENTS FOR THE AS SESSMENT YEARS 2010-11 TO 13-14 WERE NOT GOT ABATED BY VIRTU E OF SEARCH UNDER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISI ONS OF SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS I.E. 2010-11 TO 13-14. THE PROCEEDINGS UNDER SECTION 153A IN RESPE CT OF THESE FOUR ASSESSMENT YEARS WOULD BE IN THE NATURE OF REA SSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASSESSMENT YEARS I.E. 2014-15 AND 15- 16 THOSE WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACT ION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW THAT THE ASSESSMENT OR REASSESSM ENT UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEARS WHI CH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE B EEN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 66 PASSED DETERMINING THE ASSESSEES TOTAL INCOME, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED CAN BE MA DE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. IN THE ABSENC E OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WIT H SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE THE ASSESSMENT OF ANY ASSESSMENT YEAR FALLING WITHIN SI X ASSESSMENT YEARS IS PENDING ON THE DATE OF INITIATION OF SEARC H UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A OF THE ACT. THEREFORE, THE ASSESSMENT UNDER SECTION 153A IN RES PECT OF THOSE ASSESSMENT YEARS WHICH STAND ABATED DUE TO TH E REASON OF PENDING ON THE DATE OF INITIATION OF SEARCH OR REQU ISITION SHALL BE THE ORIGINAL/FIRST ASSESSMENT. IN THE SECOND CATEG ORY WHERE THE ASSESSMENT OR REASSESSMENT HAS ALREADY BEEN COMPLET ED ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITI ON AS THE CASE MAY BE, THE ASSESSMENT UNDER SECTION 153A WOULD BE IN THE NATURE OF REASSESSMENT. THE HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. KABUL CHAWLA WHILE ANALYZING THE PR OVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS O BSERVED IN PARA 37 AND 38 AS UNDER :- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I . ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEAR CHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II . ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WIL L HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III . THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCO ME' OF THE AFOREMENTIONED SIX YEARS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 67 IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX Y EARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EAC H OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV . ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FO UND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE A RBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY INCRIMINAT ING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMP LETED ASSESSMENT PROCEEDINGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECORD OF THE AO. VII . COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERI AL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISI TION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STO OD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS THE HONBLE HIGH COURT HAS HELD THAT IN THE AB SENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE HONBLE HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 153A AS ASSESS WHICH IS RELATABLE TO ABAT ED PROCEEDINGS AND THE WORD REASSESS RELATED TO COMPLETED ASSESS MENT PROCEEDINGS. THEREFORE, THE COMPLETED ASSESSMENTS C AN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSME NT UNDER ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 68 SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATIN G MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENT OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCL OSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THE HO NBLE DELHI HIGH COURT HAS REITERATED ITS VIEW IN CASE OF PRINC IPAL CIT VS. KURELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UNDER :- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER D ATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUES TION WAS WHETHER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON T HE FACTS IN DELETING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING O FFICER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHA RE CAPITAL. BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING M ATERIAL WHATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PR OCEEDINGS UNDER SECTION 153A OF THE ACT. 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENC E RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARC H AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THA T THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS N OTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL D ETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE F ACTS AND CIRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPIN ION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQUIRES EXAMINATION. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPRE ME COURT VIDE ORDER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HONBLE DELHI HIGH COURT IN THE CASE OF PRINCIP AL CIT VS. MEETA GUTGUTIA HAS AGAIN ANALYZED THIS ISSUE IN PAR A 55 TO 71 AS UNDER :- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLANK OF THE REVENU E'S SUBMISSION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA ( SUPRA ). BEFORE BEGINNING TO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 69 EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVIS IT THE LEGAL LANDSCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SEARCH AND SEIZURE'. BOTH THESE PROVISIONS, THEREFORE, HAVE TO BE READ TOGETHER. SECTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENAB LES THE REVENUE TO RE- OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER TO T HE YEAR OF SEARCH. IT IS NOT TO BE EXERCISED LIGHTLY. IT IS ONLY IF DURING THE COUR SE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECT ION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSE SSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA ( SUPRA ) AND CHETAN DAS LACHMAN DAS ( SUPRA ). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSE D THREADBARE IN THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS ANIL KUMAR BHATIA ( SUPRA ) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INC RIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF TH E ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKE D EVEN UNDER SUCH SITUATION'. THAT QUESTION WAS, THEREFORE, LEFT OPEN . AS FAR AS CHETAN DAS LACHMAN DAS ( SUPRA ) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS O BSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THI S SECTION THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMA TION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE E VIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SE CTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA ( SUPRA ), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. ( SUPRA ) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED A S UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS ( SUPRA ), AND FILATEX INDIA LTD. V. CIT-IV ( SUPRA ) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THERE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FR OM A CAREFUL READING OF THE SAID TWO DECISIONS THAT THEY DO NOT HOLD THA T ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER O F COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMIN ATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 70 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 ( PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. ), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING THE SEARCH UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT (A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, W AS NOT INTERFERED WITH.' 59. IN KABUL CHAWLA ( SUPRA ), THE COURT REFERRED TO THE DECISION OF THE RAJAST HAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA ( SUPRA ) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT ( SUPRA ) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PROD UCED IN THE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT WAS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HA S BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE T AKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDE R SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISI TION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTI ON 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJE CTED BY THE COURT ON THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHE ME OF THE SAID PROVISION' WHICH WAS IN THE CONTEXT OF SEARCH AND/O R REQUISITION. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSE SS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SEC TION 153A OF THE ACT AS UNDER: ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 71 '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSE SSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS '-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABAT ED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PRO CEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALS O NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED A SSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA ( SUPRA ), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA ( SUPRA ) AS UNDER: '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PE RSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. TH E AO HAS THE POWER TO ASSESS AND REASSESS THE 'T OTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SE PARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS TH ERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH B OTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE E VIDENCE FOUND, IT DOES ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 72 NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I .E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINAT ING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) BEGINNING WITH THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSM ENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETE RMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED IN COME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WA S NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT H IGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA ( SUPRA ), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) ( SUPRA ) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COUR T ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONC E A SEARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFIC ER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HI M TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSMENT UNDER SECTI ON 153A OF THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 1 32 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 73 INCOME WHICH IS FOUND DURING THE COURSE OF OR PURSU ANT TO THE SEARCH OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS T HE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROV ISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASS ESSMENT YEARS. THE SECOND PROVISO MAKES THE INTENTION OF THE LEGISLATU RE CLEAR AS THE SAME PROVIDES THAT ASSESSMENT OR REASSESSMENT, IF ANY, R ELATING TO THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PEN DING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITI ON UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB-SECTION (2) OF SE CTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEEDING OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR REASSESSMENT RELA TING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOUL D STAND REVIVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEAR S PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AND THE TOTAL INCOME OF T HE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILA RLY, SUB-SECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSM ENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REA SSESSMENT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR AN Y OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SU PREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE RE GARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLE AR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE HEAD ING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PRO VIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF TH E PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR RE QUISITION, IN OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUN D DURING THE SEARCH OR REQUISITION VIZ., INCRIMINATING MATERIAL WHICH REVE ALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION ( 1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR REQUI SITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON T O FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATER IAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIMINATING MAT ERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TOTAL INC OME OF THE ASSESSEE WHICH ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 74 WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF AN Y, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNE ARTHED DURING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMEN T UNDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOP E AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESS ING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDE R SECTION 153A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING TH AT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS F OUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN R ESPECT OF AN THE SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RE SPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSM ENT. UNDER SECTION 153A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION T O THE SEARCH OR REQUISITION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING TH E SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATIN G MATERIAL IS FOUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AN D THE EARLIER ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS C OURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT I N THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVE D IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN T HE CASE OF CIT V. JAYABEN RATILAL SORATHIA ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACT IONS IN THE PARTICULAR ASSESSMENT YEAR.' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA ( SUPRA ), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLL OWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ) AND OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. ( SUPRA ) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) AND HELD THAT THERE HAD TO BE INCRIMINATING MATER IAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE P URSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. ( SUPRA ), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). IN GURINDER SINGH BAWA ( SUPRA ), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO T AX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT A PPLY IF INCRIMINATING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 75 MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR D URING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/O R NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA ( SUPRA ) AND RAM AVTAR VERMA ( SUPRA ) FOLLOWED THE DECISION IN KABUL CHAWLA ( SUPRA ). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. ( SUPRA ) WHICH WAS REFERRED TO IN KABUL CHAWLA ( SUPRA ) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DIS MISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARI NG FOR THE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT C ASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN T HE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTK HA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SE ARCH AND SURVEY PROCEEDINGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN T HE FIRST PLACE, IT WAS STATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSAC TIONS MADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACT ORS LIKE INABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBL EMS, VARIOUS PURCHASES AND SALES OF SUPARI, GUTKA AND OTHER ITEM S DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF AC COUNTS MAINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA ( SUPRA ) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA ( SUPRA ) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURI NG THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND T HESE ARE ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAME LY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILURE TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS RE GULARLY MAINTAINING THE BOOKS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 76 OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS AL READY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF TH E ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMI NG THAT THERE HAD BEEN A YEAR-WISE NON-RECORDING OF TR ANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH , THE ADDITIONS WHICH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NO T ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQ UENTLY DELETED BY THE CIT (A), WHICH ORDER WAS AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS IN ITA NO. 30 6/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE M ATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. T HESE ADDITIONS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSI NG AUTHORITIES IN SUCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATUR E OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCE ALING INCOME OR INDULGING IN CLANDESTINE OPERATIONS CAN HARDLY BE E XPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PRO BABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSI BILITY) THE ELEMENT OF GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH TH E STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TILLS CASE, THE D IFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THES E FINDINGS DO NOT CALL FOR INTERFERENCE. THE SECOND QUESTION OF LAW IS ANS WERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE O PERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTOR S ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THERE BEING ANY INCRIMINATING MAT ERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSIO N. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA ( SUPRA ), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL PO SITION IN KABUL CHAWLA ( SUPRA ) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION O F SECTION 153A BY THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 77 REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. THE HONBLE DELHI HIGH COURT HAS CONCURRED WITH THE VIEW AS TAKEN IN CASE OF KABUL CHAWLA (SUPRA) AS WELL AS TH E DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/ S. JAI STEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF A DDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEAR WHICH WAS ALREADY COMPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURIN G THE SEARCH AND WAS NOT ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. CIT (A). THE RELEVANT OBSERVATI ONS OF THE HONBLE HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEE TA GUTGUTIA (SUPRA) ARE IN PARA 53 AS UNDER :- 53. AT THIS STAGE, IT IS ALSO TO BE NOTICED THAT AN EL ABORATE ARGUMENT WAS MADE BY MR. MANCHANDA ON THE ASPECT OF THE SECURITY DEPOSITS ACCEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFUNDABLE SECURITY DEPOSITS AND THE OTHER FOR NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REFUNDABLE SECURITY DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMAND REPORT ACCEPTED THEM AS HAVING BEEN DISCLOSED. THIS HAS BEEN NOTICED BY THE CIT (A) IN PARA 7.2.1 OF HIS ORDER FOR AY 2004-05. AS REGARDS NON-REFUNDABLE SECURITY DEPOSIT, THE CIT (A) ACCEPTED THE AO'S FIN DINGS THAT TREATING THE SUM AS 'GOODWILL WRITTEN OFF ON DEFERRED BASIS' WAS NOT CORRECT, HENCE THE ADDITION OF RS. 5,09,343 WAS HELD TO BE JUSTIFIED AND CORREC T. IT WAS DULY ACCOUNTED FOR UNDER 'LIABILITIES' AND TRANSFERRED TO INCOME IN A PHASED MANNER. THIS WAS NOT DONE BY MANIPULATING THE ACCOUNT BOOKS OF THE ASSES SEE AS ALLEGED BY THE REVENUE. THIS WOULD HAVE BEEN EVIDENT HAD THE RETUR N BEEN PICKED UP FOR SCRUTINY UNDER SECTION 143(3) OF THE ACT. THIS, THE REFORE, WAS NOT MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 78 AVAILABLE TO THE AO. CONSEQUENTLY, THE ADDITIONS SO UGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETE D BY THE CIT (A). THUS THE ESSENTIAL COROLLARY OF THESE DECISIONS IS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTION 153A I N RESPECT OF THE ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE D ATE OF SEARCH EXCEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE T O THE AO. IT IS PERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF PRI NCIPAL CIT VS. MEETA GUTGUTIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDI NG THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF M/S . JAI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD IN PARA 23 TO 30 AS UNDER :- 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA ( SUPRA ) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NO TICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEA R FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH OR REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOW ERED TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE AFORESAID YEA RS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESS MENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UND ISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 15 3A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE P OWER TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE SIX AS SESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEA NS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND T HE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UN DER SECTION ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 79 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE TO THE UNDISCLOSED INCOME, IF A NY, UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO AS SUME JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTION S 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE W ITH WHICH SUB-SECTION (1) OF SECTION 153A OPENS. THE TIME-LIM IT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, A S PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY T HE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTIO N TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTIC E TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCL UDED IN A CASE COVERED BY SECTION 153A. THE TIME-LIMIT PRESCR IBED FOR COMPLETION OF AN ASSESSMENT OR REASSESSMENT BY SECT ION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTI ON 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSE SSING OFFICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHO SE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESSMEN TS WITHOUT ANY FETTERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB- SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABAT E'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THER E IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAU SE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE U NDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SA ME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ON LY ONE DETERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROV IDED IN THE SECOND PROVISO OF SUB-SECTION (1) OF SECTION 153A T HAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE A SSESSEE WHICH ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEE DINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETER MINING THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 80 TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BO TH THE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED B Y THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHE D DURING THE SEARCH OR REQUISITION. THE POSITION THUS EMERGING I S THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WI LL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTA L INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE THE ASSESSMENT OR REASS ESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSM ENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL I NCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY AB ATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATIO N, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR RE ASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTI ON 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESS MENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABA TEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO P ROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED A SSESSMENTS HAVE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF A NY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSES SMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCOME DETERM INED IN THE ORIGINAL ASSESSMENT AND ASSESSED AS THE TOTAL INCOME. THE OB SERVATIONS MADE IN THE JUDGMENT CONTRASTING THE PROVISIONS OF DETERMIN ATION OF UNDISCLOSED INCOME UNDER CHAPTER XIVB WITH DETERMINATION OF TOT AL INCOME UNDER SECTIONS 153A TO 153C OF THE ACT HAVE TO BE READ IN THE CONTEXT OF SECOND PROVISO ONLY, WHICH DEALS WITH THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE FURTHER OB SERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDINGS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE OF THE FACT WHETHER ANY I NCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, THE NOTICE AN D CONSEQUENTIAL ASSESSMENT UNDER SECTION 153A HAVE TO BE UNDERTAKEN . 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS TH E INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153 A OF THE ACT IS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 81 ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROV ISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH A ND/OR REQUISITION. THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTER PRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND P ROVISIONS OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RE TURN OF INCOME), 147 (INCOME ESCAPING ASSESSMENT) AND 263 (REVISION OF O RDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSE SSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS ' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN AB ATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PRO CEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALS O NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED A SSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S ( SUPRA ) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE AN Y SUCH INTERPRETATION, THAT WHEREVER THE APPEAL AGAINST SU CH ASSESSMENT OR REASSESSMENT IS PENDING, THE SAME ALONG WITH ASS ESSMENT OR REASSESSMENT PROCEEDINGS IS LIABLE TO BE ABATED. TH E PRINCIPLES OF INTERPRETATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE SECOND PROVISO TO SECTION 153A IN A M ANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS AR E COMPLETE, AND THE MATTER IS PENDING IN APPEAL IN TH E TRIBUNAL, THE ENTIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWA Y ALL THE CONSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASSESSMENT PRO CEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 27 1(1)(C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FO R NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR ASSESSMENT OR REASSESSMEN T RESULTING INTO THE DEMAND OR PROCEEDINGS OF PENALTY. ' (EMPHASIS SUPPLIED) ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 82 THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSIO N, WHICH WE HAVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PR OVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED.' 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARISING OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A) , ITAT AND THE HIGH COURT, ON A NOTICE ISSUED UNDER SECTION 153A O F THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS BEEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCL USION HAS TO BE REPELLED AND/OR AVOIDED AS HELD BY THE HON'BLE SUPR EME COURT IN THE CASE OF K.P. VARGHESE ( SUPRA ). 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN C LAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STAND S COMPLETED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUANCE OF SEARCH OR REQUISITION IS REQUIRED TO BE MADE. IN THE CASE IN HAND, THE TRANSACTIONS OF UNSECURED LOANS AS WELL AS INTRODUCTION OF CAPITAL BY THE PARTNERS WERE DUL Y RECORDED IN THE BOOKS OF ACCOUNT AND AVAILABLE WITH THE AO. FU RTHER, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT O N 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATERIAL W AS EITHER FOUND OR SEIZED TO DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUNT OF UNSECURED LOANS OR PARTNERS CAPITAL RECEIVED BY TH E ASSESSEE FIRM. THE AO HAS PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CREDIT SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA. IT IS P ERTINENT TO NOTE THAT THE SAID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IN CA SE OF THE ASSESSEE ON 2 ND JULY, 2015. THEREFORE, EVEN THE SOLE BASIS OF ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT IS THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKAT A AND ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 83 STATEMENT OF ONE SHRI ANAND SHARMA, WHO IS STATED T O BE AN ENTRY OPERATOR AND MANAGED VARIOUS CONCERNS/COMPANI ES INCLUDING M/S. ROYAL CRYSTAL DEALERS, ONE OF THE LO AN CREDITORS OF THE ASSESSEE. EXCEPT THE SAID STATEMENT AND REPORT O F THE INVESTIGATION WING KOLKATA, THE AO HAS NEITHER REFE RRED TO OR WAS HAVING IN POSSESSION OF ANY MATERIAL TO INDICATE TH AT THE UNSECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS W ELL AS PARTNERS CAPITAL RECEIVED BY THE ASSESSEE ARE NOTH ING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLOSED INCOME R OUTED BACK IN THE GARB OF UNSECURED LOANS AND PARTNERS CAPITA L. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPITAL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSED IN THE RETURN OF INCOME WHICH WERE AL READY COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSM ENT YEARS WERE NOT PENDING ON THE DATE OF SEARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD THAT DURING THE COURSE OF SEARCH AN D SEIZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ASS ESSEE NO MATERIAL MUCH LESS THE INCRIMINATING MATERIAL WAS U NEARTHED OR ANY UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED IN T HE BOOKS OF ACCOUNTS WAS DETECTED OR FOUND. THE ONLY INCRIMINAT ING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 TO 26 OF A NNEXURE AS-1 IN RESPECT OF LONG TERM CAPITAL GAIN EARNED BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WAS DISCLOSED BY SHRI RAJENDRA AGARWAL IN HIS STATE MENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED A ND OFFERED TO TAX BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS IN THE YEAR OF SEARCH. THE AO HIMSELF HAS NOT MADE ANY ADDITIO N IN THE HAND OF THE ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAI N WHICH WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE. THU S, EXCEPT THE MATERIAL DISCLOSING THE LONG TERM CAPITAL GAIN IN T HE HAND OF SHRI ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 84 RAJENDRA AGARWAL, NO OTHER INCRIMINATING MATERIAL E ITHER FOUND OR REFERRED OR IS THE BASIS OF THE ADDITION MADE BY TH E AO WHILE FRAMING THE ASSESSMENT UNDER SECTION 153A OF THE AC T FOR THE ASSESSMENT YEARS 2010-11 TO 13-14. IT IS APPROPRIA TE TO REFER RELEVANT PART OF THE ASSESSMENT ORDER IN PARA 12 PA GES 48 TO 50, PARA 19 PAGE 83 AND PARA 22 PAGE 86 AS UNDER :- 12. SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE FI RM HAVE BEEN DULY CONSIDERED. HOWEVER, EVEN THE VERY ELABOR ATE AND CASE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TO TALLY OFF THE MARK. AGAINST THE SELF-SPEAKING FACTS OF THE VERY NATURE OF THE ACTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUG E PARTNERS CAPITAL IN THE MOST UNINTERESTED MANNER AND PROVIDI NG HUGE UNSECURED LOANS WITHOUT ANY COLLATERAL OR OTHER SEC URITY, THE EMPHASIS OF THE ASSESSEE FIRM IN ITS SUBMISSIONS HA S BEEN ON SEEKING PROTECTION UNDER VARIOUS JUDICIAL DECISIONS EVEN WITHOUT HAVING ANY FACT COHERENCE. THE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGH T OF THE FOLLOWING FACTS AND CIRCUMSTANCES; A. THE DEPARTMENT HAS VERY SOUND BASIS TO TREAT, THE R ECEIPTS OF UNSECURED LOAN AND PARTNERS CAPITAL FROM THE ABOVE MENTIONED COMPANIES AS BOGUS AND IN GENUINE. THE FI NDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVE STIGATION DIRECTORATE KOLKATA ARE NOT BASED ON ANY PRESUMPTIO N, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATU RE AND SOURCE OF A RECEIPT, WHETHER IT BE OF MONEY OR OTHE R PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD THAT IT IS THE INCOME OF TH E ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW T HAT THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 85 INCOME IS FROM ANY PARTICULAR SOURCE AS ENUMERATED THE HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATT I V. CIT (1977) 107 ITR 938 (SC) AND KALE KHAN MOHAMMAD HANI F V. CIT (1963) 50 ITR 1 (SC). PRIMA FACIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN LAND MARK CASES LIKE KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE, IS ON HIM. WHERE THE NATURE AND SOURCE THEREOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS OPEN TO THE REVE NUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND N O FURTHER BURDEN IS ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. IT MAY ALSO BE POINTED OUT THAT THE BURDEN OF PROOF IS FLUID FO R THE PURPOSES OF SECTION 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATING TO IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORTHINESS THEN AO MUST DO SOME INQUIRY TO CALL FOR MORE DETAILS TO INVOKE SECTION 68. B. THE ASSESSEE FIRM HAS FILED CONFIRMATION LETTERS AN D THIS OFFICE HAS CARRIED OUT FURTHER ENQUIRY TO EXAMINE THE REAL ITY OF THE TRANSACTIONS. AN ENQUIRY WAS SENT TO THE INVESTIGA TION DIRECTORATE KOLKATA AND IT HAS BEEN ESTABLISHED THA T THESE INVESTOR OR LENDER COMPANIES ARE CONTROLLED BY THE ENTRY OPERATORS. THE STATEMENTS OF VARIOUS ENTRY OPERATO RS ARE SUFFICIENT EVIDE4NCES TO SHOW THAT THE UNSECURED LO AN AND PARTNERS CAPITAL ARE ASSESSEES OWN UNDISCLOSED IN COME BROUGHT INTO THE BOOKS OF THE ASSESSEE UNDER THE GA RB OF UNSECURED LOAN AND PARTNERS CAPITAL. C. THE DEPARTMENT HAS CARRIED OUT SEARCH OVER THE ASSE SSEE GROUP AND DURING THE COURSE OF SEARCH ACTION U/S 13 2 OF THE I.T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 86 SEARCH PROCEEDINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 OF PARTY B-1, WHEREIN THE DETAILS OF YEAR-WISE LTCG EA RNED BY SHRI RAJENDRA AGRAWAL AND HIS FAMILY MEMBERS, IS MAINTAINED, WHICH DURING SEARCH ACTION HAS BEEN ACC EPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STATEMENTS. 19. IN VIEW OF ABOVE FACTS OF THE CASE AND IN THE LIGHT OF ABOVE JUDICIAL DECISION, IT IS ESTABLISHED THAT GEN UINENESS OF THE TRANSACTION HAS NOT BEEN PROVED. SECTION 68 OF THE I.T. ACT PROVIDES FOR CHARGING TO INCOME TAX ON ANY SUM CRED ITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS Y EAR IF THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED IS NOT, IN THE O PINION OF THE ASSESSING OFFICER, SATISFACTORY. IT PLACES NO DUTY UPON THE ASSESSING OFFICER TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. WHERE AN ASSESSEE FA ILS TO PROVE SATISFACTORILY THE SOURCE AND THE NATURE OF CERTAIN AMOUNT OF CREDIT DURING THE ACCOUNTING YEAR, THE INCOME-TAX O FFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THUS, THE ASSESSEE IS UNABLE TO DISCHARGE ITS BURDEN OF PROOF BY FAILING TO ESTABLISH LENDERS ID ENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDER. HENCE, THE UNSECURED LOANS AND PARTNERS CAPITAL SH OWN TO HAVE BEEN RECEIVED FROM VARIOUS KOLKATA BASED COMPANIES AND OTHER COMPANIES REMAINED UNEXPLAINED. IN THE CIRCUMSTANC ES, I AM LEFT WITH NO OPTION THAN TO TAX THE ENTIRE UNEXPLAI NED CREDITS BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIV ED FROM THE PERSONS MENTIONED IN PARA 5 ABOVE AS UNEXPLAINED CA SH CREDITS ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 87 U/S 68 OF THE INCOME TAX ACT, CHARGEABLE TO TAX AS INCOME OF THE ASSESSEE FIRM FOR THE RESPECTIVE ASSESSMENT YEA RS. 22. AFTER EXAMINATION OF THE INFORMATION AND DETA ILS PLACED ON RECORD AND DISCUSSION WITH THE ASSESSEE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- RETURNED INCOME AS PER ITR U/S 153A OF THE ACT. RS. 2,82,83,460/ - ADDITIONS | UNEXPLAINED CASH CREDITS U/S | 68 OF THE ACT IN THE FORM OF |UNSECURED LOAN AND PARTNERS | CAPITAL RS. 67,20,14,999/ - ASSESSED INCOME RS. 70,02,98,459/ - R/O RS. 70,02,98,459/ - THE TOTAL INCOME OF THE ASSESSEE IN THE STATUS OF F IRM FOR ASSESSMENT YEAR 2010-11 RELEVANT TO PREVIOUS YEAR 2 009-10 IS ASSESSED AT RS. 70,02,98,459/- U/S 153A READ WITH S ECTION 143(3) OF I.T. ACT, 1961. THE FORM ITNS-150 SHOWING CALCULATION OF TAX AND INTEREST CHARGEABLE, IF ANY, IS ATTACHED HEREWITH AND FORMS A PART OF THIS ORDER. A NOTICE OF DEMAND U/S 156 OF THE ACT AND CHALLAN FOR PAYMENT OF TAX, IF PAYABLE, IS HEREBY ISSUED. PENALTY NOTICE U/S 274 RWS 271(1)(C) IS ISSUED SEPA RATELY. THE ENTIRE FINDING OF THE AO IS BASED ON THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING KOLKATA AND STATEMENT O F SHRI ANAND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITION ON THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY ON THE GROUND THAT THE SLPS FILED BY THE REVENUE IN THE CASES OF KABUL CHAWLA (SUPRA) AND M/ S. ALL CARGO GLOBAL LOGISTICS (SUPRA) ETC. HAVE BEEN ADMITTED FO R DECISION BY THE HONBLE SUPREME COURT. THE RELEVANT PART OF TH E FINDING OF ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 88 THE LD. CIT (A) IN PARA 3.2.2 AND 3.2.4 AT PAGES 35 AND 36 ARE AS UNDER :- 3.2.2 AS PER THE PROVISIONS OF THIS SECTION WHERE A SEARCH IS INITIATED U/S 132 OF THE ACT, THE A.O SHALL ISSUE A NOTICE REQUIRING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED , THE AO HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YEARS. (EMPHASIS SUPPLIED BY ME). (THE DECISIVE WORDS USED IN THE PROVISIONS ARE TO ' ASSESSEE OR REASSESS THE TOTAL INCOME' ). THE A.O. IS THUS DUTY BOUND TO DETERMINE THE 'TOTAL INCOME' OF THE ASSESSEE FOR SU CH SIX ASSESSMENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCO ME' REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME THEREFORE WILL COVER NOT ONLY THE INCOME EMANATING FROM DECLARED SOURCES OR ANY MATERIAL PLA CED BEFORE THE ASSESSING OFFICER BUT FROM ALL SOURCES INCLUDIN G THE UNDISCLOSED ONES, OR BASED ON THE UNPLACED MATERIAL BEFORE THE AO. 3.2.3 THE CONCEPT OF ASSESS OR REASSESS AND SHALL ABATE AS CONTEMPLATED U/S 153A IS UNDER HOT JUDICIAL DEBATE. I FIND THAT LEGALLY, THIS ISSUE IS VERY CONTENTIOUS IN VIEW OF THE DIVERGENT VIEWS OF THE VARIOUS AUTHORITIES. THE APPELLANT HAS TRIED TO HIGHLIGHT MOST OF THEM. HOWEVER, IT IS EQUALLY PERT INENT TO MENTION HERE THAT THE DEPARTMENT HAS NOT ACCEPTED T HE DECISIONS OF HON'BLE MUMBAI HIGH COURT IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FILED BEFORE THE HON' BLE SUPREME ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 89 COURT. THE HON'BLE SUPREME COURT HAS GRANTED LEAVE VIDE ORDER DATED 12.10.2015 AS REPORTED IN 64 TAXMANN.COM 34 (S.C.). SIMILARLY, IN THE CASE OF KABUL CHAWLA SLP HAS ALSO BEEN FILED . 3.2.4 IN VIEW OF SLPS ADMITTED IN CASE OF KABUL CHAWLA, M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL W AREHOUSING (NHAVA SHEVA) LTD., (SUPRA), ASSESSEES CONTENTION CANNOT BE ACCEPTED. MOREOVER, IN ANY CASE, THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APP EAL, THE ISSUE RAISED IN THIS GROUND FOR PRESENT REMAINS FOR ACADE MIC DISCUSSION ONLY. ACCORDINGLY, ISSUE RAISED IN GROUND NO. 12 IS DISMISSED. THEREFORE, NEITHER IN THE ASSESSMENT ORDER NOR IN T HE ORDER OF THE LD. CIT (A) THERE IS ANY MENTION OR FINDING THAT TH E ADDITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATI NG MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE IN TH E CASE OF THE ASSESSEE. THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHR I ANAND SHARMA RECORDED BY THE INVESTIGATION WING DURING TH E SURVEY UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF T HE INFORMATION/REPORT OF THE INVESTIGATION WING KOLKAT A IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANNOT BE REGARDED AS INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKING THE ADDITION UNDER SECTI ON 153A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT WAS NOT P ENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS ARE IN THE N ATURE OF REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATER IAL DISCLOSING UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED BY THE A SSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS NOT CLAIMED A NY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 90 INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AN D CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS O N THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WAS ALSO DISMISS ED BY THE HONBLE SUPREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSMENT ORDERS UNDER SECTION 153A FO R THE ASSESSMENT YEARS 2010-11 TO 13-14 ARE NOT SUSTAINAB LE AND ACCORDINGLY THE SAME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. 22. SIMILARLY IN THE CASE OF DCIT VS. BARAN ROLLER F LOUR MILLS PVT. LTD. (SUPRA) FOR THE A.Y. 2010-11, THE RELEVANT OBSERVAT ION OF THE TRIBUNAL WITH THE ISSUE ARE CONTAINED AT PAGE NOS. 33 TO 54 A S UNDER: 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. IN PURSUANT TO THE SAME SEARCH AND SEIZURE ACTION UNDER SECTION 132 CARRIED ON 2 ND JULY, 2015, AN IDENTICAL ISSUE WAS CONSIDERED AND DECIDED BY US IN THE CASE OF GROUP CONCERN, NAMELY, M/S. KOTA DALL MILL IN ITA NOS. 99 7 TO 1002/JP/2018 AND 1119/JP/2018 AND OTHERS VIDE ORDER DATED 31 ST DECEMBER, 2018 AS UNDER :- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASS ESSMENTS FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT PENDING ON THE DATE OF SEARCH ON 2 ND JULY, 2015. EVEN IN SOME OF THE ASSESSMENT YEARS ORDERS UNDER SECTION 143(3) WERE PASSED AND IN OTHE R CASES THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF TH E ACT. THUS THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2010-11 TO 13- 14 WERE NOT GOT ABATED BY VIRTUE OF SEARCH UNDER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 91 PROVISIONS OF SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS I.E. 2010-11 TO 13-14. THE PROCEEDINGS UNDER SECTI ON 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS WOULD BE IN THE NATU RE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASSESSMENT YEARS I.E. 2014-15 AND 15-16 THOSE WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACT ION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW TH AT THE ASSESSMENT OR REASSESSMENT UNDER SECTION 153A I N RESPECT OF THE ASSESSMENT YEARS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESS ED CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. IN TH E ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WIT H SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE T HE ASSESSMENT OF ANY ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT Y EARS IS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A OF THE ACT. THEREFO RE, THE ASSESSMENT UNDER SECTION 153A IN RESPECT OF THOSE ASSESSMENT Y EARS WHICH STAND ABATED DUE TO THE REASON OF PENDING ON THE DATE OF INITIATION OF SEARCH OR REQUISITION SHALL BE THE ORIGINAL/FIRST ASSESSME NT. IN THE SECOND CATEGORY WHERE THE ASSESSMENT OR REASSESSMENT HAS A LREADY BEEN COMPLETED ON THE DATE OF INITIATION OF SEARCH OR MA KING OF REQUISITION AS THE CASE MAY BE, THE ASSESSMENT UNDER SECTION 15 3A WOULD BE IN THE NATURE OF REASSESSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA WHILE ANALYZING THE PROVISI ONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED IN PA RA 37 AND 38 AS UNDER :- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I . ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MAN DATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HI M TO FILE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 92 RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVI OUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II . ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III . THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO A SSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTION ED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS TH ERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH B OTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV . ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOS E PENDING ON THE DATE OF SEARC H) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEED INGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE S EPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII . COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPL ETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS THE HONBLE HIGH COURT HAS HELD THAT IN THE AB SENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATE D AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE HONBL E HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 153A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS AND THE WORD REASSESS RELATED TO COMPLETED ASSESSMENT PROCEEDINGS. THEREFORE, THE COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 93 THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 15 3A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE CO URSE OF SEARCH OR REQUISITION OF DOCUMENT OR UNDISCLOSED INCOME OR PR OPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALR EADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THE HO NBLE DELHI HIGH COURT HAS REITERATED ITS VIEW IN CASE OF PRINCIPAL CIT VS. KU RELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UNDER :- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER D ATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761 /DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUESTION WAS WHETH ER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE FACTS IN DELE TING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAPITAL. BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WHATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT. 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENCE REL ATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFES T FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING AD DITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS N OTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL DETERMI NATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE FACTS AND C IRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTIO N OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQUIRES EXAMINATI ON. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COURT VI DE ORDER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HON BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA HAS AG AIN ANALYZED THIS ISSUE IN PARA 55 TO 71 AS UNDER :- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLANK OF THE REVENU E'S SUBMISSION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA ( SUPRA ). BEFORE BEGINNING TO EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVIS IT THE LEGAL LANDSCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SEARCH AND SEIZURE'. BOTH THESE PROVISIONS, THEREFORE, HAVE TO BE READ TOGETHER. SECTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENAB LES THE REVENUE TO RE- ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 94 OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER TO T HE YEAR OF SEARCH. IT IS NOT TO BE EXERCISED LIGHTLY. IT IS ONLY IF DURING THE COUR SE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECT ION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA ( SUPRA ) AND CHETAN DAS LACHMAN DAS ( SUPRA ). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSE D THREADBARE IN THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS ANIL KUMAR BHATIA ( SUPRA ) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUE STION WAS, THEREFORE, LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS ( SUPRA ) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THI S SECTION THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF E VIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE R ELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT T HE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA ( SUPRA ), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. ( SUPRA ) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED A S UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS ( SUPRA ), AND FILATEX INDIA LTD. V. CIT-IV ( SUPRA ) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BO TH THE SAID CASES THERE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHER EAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLA IN FROM A CAREFUL READING OF THE SAID TWO . DECISIONS THAT THEY DO NO T HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT M ATTER OF COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF N O INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH . 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 ( PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. ), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING THE SEARCH UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MA KE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT (A), AFFIRMED BY THE ITAT, DELETING THE ADD ITION, WAS NOT INTERFERED WITH.' ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 95 59. IN KABUL CHAWLA ( SUPRA ), THE COURT REFERRED TO THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA ( SUPRA ) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT ( SUPRA ) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PROD UCED IN THE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COU RSE OF SEARCH. IT WAS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PR OPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOUL D ALSO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDER SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STA ND ABATED IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIG INAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJE CTED BY THE COURT ON THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE S CHEME OF THE SAID PROVISION' WHICH WAS IN THE CONTEXT OF SEARCH AND/O R REQUISITION. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSE SS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SEC TION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PR OVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECT ION. THE WORDS 'ASSESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONC LUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETE D ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 96 ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS TH EY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUP PORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MAT ERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA ( SUPRA ), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SE CTION 153A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZ ED IN KABUL CHAWLA ( SUPRA ) AS UNDER: '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SE ARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. TH E AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS TH ERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH B OTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILAB LE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. THE WORD 'ASSESS' IN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 97 SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I .E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESS MENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BA SIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTIO N 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MAT ERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) BEGINNING WITH THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSM ENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETE RMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN R ESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT HIGH CO URT REFERRED TO THE DECISION IN KABUL CHAWLA ( SUPRA ), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) ( SUPRA ) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A S EARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HI M TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MA DE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSMENT UNDER SECTION 153A O F THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF THE SECTION IS TO BRING TO TAX T HE UNDISCLOSED INCOME WHICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARC H OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT W HEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASS ESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESS MENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVIS O MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASS ESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 1 32 OR REQUISITION UNDER ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 98 SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB- SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEEDING OR ANY O RDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR REASSESSMEN T RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND P ROVISO WOULD STAND REVIVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PRO CEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEAR S PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AND THE TOTAL INCOME OF T HE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY , SUB-SECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSME NT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SU PREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE RE GARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLE AR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE HEAD ING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PRO VIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF TH E PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR RE QUISITION, IN OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUND DU RING THE SEARCH OR REQUISITION VIZ., INCRIMINATING MATERIAL WHICH REVE ALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION ( 1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR REQUI SITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNIS H RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIMINATING MATERIAL IS F OUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF AN Y, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DU RING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT U NDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AN D AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153 A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN TH E SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF T HE SIX ASSESSMENT YEARS IS A ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 99 SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153 A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISI TION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION . IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND , NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESS MENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIE R ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT IS IN COM PLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED C OUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEA RS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSE SSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSME NT YEAR.' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA ( SUPRA ), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ) AND OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. ( SUPRA ) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO B E MADE PURSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. ( SUPRA ), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). IN GURINDER SINGH BAWA ( SUPRA ), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO T AX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT A PPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR D URING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/O R NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA ( SUPRA ) AND RAM AVTAR VERMA ( SUPRA ) FOLLOWED THE DECISION IN KABUL CHAWLA ( SUPRA ). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. ( SUPRA ) WHICH WAS REFERRED TO IN KABUL CHAWLA ( SUPRA ) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DIS MISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARING FOR T HE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT CASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PROCEED INGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS S TATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT , THE ANSWER WAS: ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 100 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSACTIONS M ADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACC OUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE INABILITY OF ACC OUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SAL ES OF SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND S HOWN IN THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA ( SUPRA ) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA ( SUPRA ) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURI NG THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND THESE AR E ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAMELY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILUR E TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. O N THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTAINING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINE D BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO Q UESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILIT Y OF MANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMI NG THAT THERE HAD BEEN A YEAR-WISE NON-RECORDING OF TR ANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH , THE ADDITIONS WHICH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN TH E PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NOT ANY OF THE OTHER YEA RS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A ), WHICH ORDER WAS AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS IN ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FO UND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIO NS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSING AUTHORITIES IN S UCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCEALING INCOME OR INDULGING I N CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE S OME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TI LLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 101 OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THESE FINDIN GS DO NOT CALL FOR INTERFERENCE. THE SECOND QUESTION OF LAW IS ANSWERE D AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METI CULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THE RE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRA NCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA ( SUPRA ), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA ( SUPRA ) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT D ECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS T HERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. THE HONBLE DELHI HIGH COURT HAS CONCURRED WITH THE VIEW AS TAKEN IN CASE OF KABUL CHAWLA (SUPRA) AS WELL AS THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI STEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF ADDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEAR WHICH WAS ALREADY CO MPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH AND WAS NOT ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO O N ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. CIT (A). THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA (SUPRA) ARE IN PARA 53 AS UNDER :- 53. AT THIS STAGE, IT IS ALSO TO BE NOTICED THAT AN EL ABORATE ARGUMENT WAS MADE BY MR. MANCHANDA ON THE ASPECT OF THE SECURITY DEPOSITS ACCEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFUNDABLE SECURITY DEPOSITS AND THE OTHER FOR NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REFUNDABLE SECURITY DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMAND REPORT ACCEPTED THEM AS HAVING BEEN DISCLOSED. THIS HAS BEEN NOTICED BY THE CIT (A) IN PARA 7.2.1 OF HIS ORDER FOR AY 2004-05. AS REGARDS NON-REFUNDABLE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 102 SECURITY DEPOSIT, THE CIT (A) ACCEPTED THE AO'S FIN DINGS THAT TREATING THE SUM AS 'GOODWILL WRITTEN OFF ON DEFERRED BASIS' WAS NOT CORRECT, HENCE THE ADDITION OF RS. 5,09,343 WAS HELD TO BE JUSTIFIED AND CORREC T. IT WAS DULY ACCOUNTED FOR UNDER 'LIABILITIES' AND TRANSFERRED TO INCOME IN A PHASED MANNER. THIS WAS NOT DONE BY MANIPULATING THE ACCOUNT BOOKS OF THE ASSES SEE AS ALLEGED BY THE REVENUE. THIS WOULD HAVE BEEN EVIDENT HAD THE RETUR N BEEN PICKED UP FOR SCRUTINY UNDER SECTION 143(3) OF THE ACT. THIS, THE REFORE, WAS NOT MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. CONSEQUENTLY, THE ADDITIONS SO UGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETE D BY THE CIT (A). THUS THE ESSENTIAL COROLLARY OF THESE DECISIONS IS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THE ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EXCEPT B ASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. IT IS PERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DEC ISION OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD IN PARA 23 TO 30 AS UNDER :- 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA ( SUPRA ) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NO TICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISI TION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE 'TOT AL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FR OM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROP ED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCE EDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE P OWER TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE SIX ASSESSMENT Y EARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE C AN BE ONLY ONE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 103 ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSE SSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SEC TION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALRE ADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATIO N OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TA KING NOTE TO THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFF ICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSE SSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF SECTION 153A OPENS. T HE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE IS SUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY T HE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE O BTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERE D BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMPLETION OF A N ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN E NTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSE SSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESSMEN TS WITHOUT ANY FETTERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB-SECTION (1) OF SE CTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABATE'. THE REASON IS NOT F AR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSM ENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CO NSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'T OTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SA ME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN OR DER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE T OTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB-SECTION (1) OF SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSES SMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEE DINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PAS S ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL I NCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLAR ED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UN DISCLOSED INCOME, IF ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 104 ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. TH E POSITION THUS EMERGING IS THAT THE SEARCH IS INITIATED OR REQUISI TION IS MADE, THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETER MINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INC OME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE THE ASSESSMENT OR RE ASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSM ENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUI SITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDING S ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL R EOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE N EED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT COND ITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTI ON 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSE SSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SI MPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PEN DING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMEN T ORDERS WHEN THE SEARCH WAS INITIATED OR THE REQUISITION WAS MAD E.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED ASSESSMENTS HA VE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT AND AS SESSED AS THE TOTAL INCOME. THE OBSERVATIONS MADE IN THE JUDGMENT CONTR ASTING THE PROVISIONS OF DETERMINATION OF UNDISCLOSED INCOME UNDER CHAPTER X IVB WITH DETERMINATION OF TOTAL INCOME UNDER SECTIONS 153A TO 153C OF THE ACT HAVE TO BE READ IN THE CONTEXT OF SECOND PROVISO ONLY, WHICH DEALS WITH TH E PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE FURTHER OB SERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDINGS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE OF THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, THE NOTICE AND CONSEQUENTIAL ASSE SSMENT UNDER SECTION 153A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIM INATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED A BOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. THE PROVISION S OF SECTIONS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR T HE AO AND/OR ASSESSEE BEYOND PROVISIONS OF SECTIONS 139 (RETURN OF INCOME ), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING ASSESSMENT) AND 26 3 (REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT Y EARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 105 WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' H AS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FO R COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION A ND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S ( SUPRA ) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE ANY SUCH INTERP RETATION, THAT WHEREVER THE APPEAL AGAINST SUCH ASSESSMENT OR REAS SESSMENT IS PENDING, THE SAME ALONG WITH ASSESSMENT OR REASSESS MENT PROCEEDINGS IS LIABLE TO BE ABATED. THE PRINCIPLES OF INTERPRET ATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE S ECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE, AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE ENTIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWAY ALL THE CO NSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTI NG BOGUS GIFTS IN THE REGULAR ASSESSMENT PROCEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 271(1)(C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UN DER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMIN ATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR AS SESSMENT OR REASSESSMENT RESULTING INTO THE DEMAND OR PROCEEDIN GS OF PENALTY. ' (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSION, WHICH WE HAVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PR OVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED.' 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARIS ING OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A), ITAT AND THE HIGH COURT, ON A NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS BEEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED AND/OR AVOIDED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE ( SUPRA ). ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 106 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN C LAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STANDS COMPLET ED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUAN CE OF SEARCH OR REQUISITION IS REQUIRED TO BE MADE. IN THE CASE IN HAND, THE TRANSACTIONS OF UNSECURED LOANS AS WELL AS INTRODUCTION OF CAPITAL BY THE PARTNERS WERE DULY R ECORDED IN THE BOOKS OF ACCOUNT AND AVAILABLE WITH THE AO. FURTHER, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATERIAL WAS EITHER FOUND OR SEIZED T O DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUNT OF UNSECURED LOANS OR PARTNERS C APITAL RECEIVED BY THE ASSESSEE FIRM. THE AO HAS PROPOSED TO MAKE THE ADD ITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CREDIT SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA. IT IS PERTINENT TO NOTE THAT THE SA ID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SEC TION 132 OF THE ACT IN CASE OF THE ASSESSEE ON 2 ND JULY, 2015. THEREFORE, EVEN THE SOLE BASIS OF ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT IS THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA AND STATEMENT OF ON E SHRI ANAND SHARMA, WHO IS STATED TO BE AN ENTRY OPERATOR AND MANAGED V ARIOUS CONCERNS/COMPANIES INCLUDING M/S.ROYAL CRYSTAL DEAL ERS, ONE OF THE LOAN CREDITORS OF THE ASSESSEE. EXCEPT THE SAID STATEMEN T AND REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HAS NEITHER REFE RRED TO OR WAS HAVING IN POSSESSION OF ANY MATERIAL TO INDICATE THAT THE UNS ECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS WELL AS PARTNERS CAPITAL RECE IVED BY THE ASSESSEE ARE NOTHING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLO SED INCOME ROUTED BACK IN THE GARB OF UNSECURED LOANS AND PARTNERS CAPITA L. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPITAL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSE D IN THE RETURN OF INCOME WHICH WERE ALREADY COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSMENT YEARS WERE NOT PENDING ON THE DATE OF SEARCH, THERE FORE, IT IS MANIFEST FROM THE RECORD THAT DURING THE COURSE OF SEARCH AND SEI ZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ASSESSEE NO MATERIAL MUC H LESS THE INCRIMINATING MATERIAL WAS UNEARTHED OR ANY UNDISCLOSED INCOME WH ICH WAS NOT DISCLOSED IN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 107 THE BOOKS OF ACCOUNTS WAS DETECTED OR FOUND. THE ON LY INCRIMINATING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 TO 26 OF A NNEXURE AS-1 IN RESPECT OF LONG TERM CAPITAL GAIN EARNED BY SHRI RAJENDRA A GARWAL AND HIS FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WAS DISCL OSED BY SHRI RAJENDRA AGARWAL IN HIS STATEMENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED AND OFFERED TO TAX BY SHRI RAJENDRA AGA RWAL AND HIS FAMILY MEMBERS IN THE YEAR OF SEARCH. THE AO HIMSELF HAS NOT MADE ANY ADDITION IN THE HAND OF THE ASSESSEE ON ACCOUNT OF LONG TERM CA PITAL GAIN WHICH WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE. THU S, EXCEPT THE MATERIAL DISCLOSING THE LONG TERM CAPITAL GAIN IN THE HAND O F SHRI RAJENDRA AGARWAL, NO OTHER INCRIMINATING MATERIAL EITHER FOUND OR REFERR ED OR IS THE BASIS OF THE ADDITION MADE BY THE AO WHILE FRAMING THE ASSESSMEN T UNDER SECTION 153A OF THE ACT FOR THE ASSESSMENT YEARS 2010-11 TO 13-14. IT IS APPROPRIATE TO REFER RELEVANT PART OF THE ASSESSMENT ORDER IN PARA 12 PA GES 48 TO 50, PARA 19 PAGE 83 AND PARA 22 PAGE 86 AS UNDER :- 12. SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE FI RM HAVE BEEN DULY CONSIDERED. HOWEVER, EVEN THE VERY ELABORATE A ND CASE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TOTALLY OFF THE MARK. AGAINST THE SELF-SPEAKING FACTS OF THE VERY NATURE OF THE A CTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUGE PARTNERS CAPITAL I N THE MOST UNINTERESTED MANNER AND PROVIDING HUGE UNSECURED LO ANS WITHOUT ANY COLLATERAL OR OTHER SECURITY, THE EMPHASIS OF THE A SSESSEE FIRM IN ITS SUBMISSIONS HAS BEEN ON SEEKING PROTECTION UNDER VA RIOUS JUDICIAL DECISIONS EVEN WITHOUT HAVING ANY FACT COHERENCE. T HE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGHT OF THE FOLLOWING FACTS AND CIRCUMSTANCES; D. THE DEPARTMENT HAS VERY SOUND BASIS TO TREAT, THE R ECEIPTS OF UNSECURED LOAN AND PARTNERS CAPITAL FROM THE ABOVE MENTIONED COMPANIES AS BOGUS AND IN GENUINE. THE FINDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVESTIGATION DIRECTORA TE KOLKATA ARE NOT BASED ON ANY PRESUMPTION, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER I T BE OF MONEY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 108 OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAIN ED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD THAT I T IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVE NUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE AS EN UMERATED THE HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATT I V. CIT (1977) 107 ITR 938 (SC) AND KALE KHAN MOHAMMAD HANI F V. CIT (1963) 50 ITR 1 (SC). PRIMA FACIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN LAND MARK CASES LIKE KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING TH E SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVE D BY AN ASSESSEE, IS ON HIM. WHERE THE NATURE AND SOU RCE THEREOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS O PEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE AS SESSEE AND NO FURTHER BURDEN IS ON THE REVENUE TO SHOW THA T THE INCOME IS FROM ANY PARTICULAR SOURCE. IT MAY AL SO BE POINTED OUT THAT THE BURDEN OF PROOF IS FLUID FOR T HE PURPOSES OF SECTION 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATING TO IDENTITY, GENUINENESS O F TRANSACTION AND CREDITWORTHINESS THEN AO MUST DO SO ME INQUIRY TO CALL FOR MORE DETAILS TO INVOKE SECTION 68. E. THE ASSESSEE FIRM HAS FILED CONFIRMATION LETTERS AN D THIS OFFICE HAS CARRIED OUT FURTHER ENQUIRY TO EXAMINE THE REALITY OF THE TRANSACTIONS. AN ENQUIRY WAS SENT TO THE INVESTIGA TION DIRECTORATE KOLKATA AND IT HAS BEEN ESTABLISHED THAT THESE INVE STOR OR LENDER COMPANIES ARE CONTROLLED BY THE ENTRY OPERATORS. T HE STATEMENTS OF VARIOUS ENTRY OPERATORS ARE SUFFICIENT EVIDE4NCE S TO SHOW THAT THE UNSECURED LOAN AND PARTNERS CAPITAL ARE ASSESS EES OWN UNDISCLOSED INCOME BROUGHT INTO THE BOOKS OF THE AS SESSEE UNDER THE GARB OF UNSECURED LOAN AND PARTNERS CAPITAL. F. THE DEPARTMENT HAS CARRIED OUT SEARCH OVER THE ASSE SSEE GROUP AND DURING THE COURSE OF SEARCH ACTION U/S 132 OF T HE I.T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING SEA RCH PROCEEDINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 O F PARTY B-1, WHEREIN THE DETAILS OF YEAR-WISE LTCG EARNED BY SHR I RAJENDRA ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 109 AGRAWAL AND HIS FAMILY MEMBERS, IS MAINTAINED, WHIC H DURING SEARCH ACTION HAS BEEN ACCEPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STATEMENTS. 19. IN VIEW OF ABOVE FACTS OF THE CASE AND IN THE LIGHT OF ABOVE JUDICIAL DECISION, IT IS ESTABLISHED THAT GENUINENE SS OF THE TRANSACTION HAS NOT BEEN PROVED. SECTION 68 OF THE I.T. ACT PRO VIDES FOR CHARGING TO INCOME TAX ON ANY SUM CREDITED IN THE BOOKS OF T HE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR IF THE ASSESSEE OF FERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTO RY. IT PLACES NO DUTY UPON THE ASSESSING OFFICER TO POINT TO THE SOURCE F ROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. WHERE AN ASSES SEE FAILS TO PROVE SATISFACTORILY THE SOURCE AND THE NATURE OF C ERTAIN AMOUNT OF CREDIT DURING THE ACCOUNTING YEAR, THE INCOME-TAX O FFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPT ARE OF AN ASSES SABLE NATURE. THUS, THE ASSESSEE IS UNABLE TO DISCHARGE ITS BURDEN OF P ROOF BY FAILING TO ESTABLISH LENDERS IDENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDER. HENCE, THE UNSECUR ED LOANS AND PARTNERS CAPITAL SHOWN TO HAVE BEEN RECEIVED FROM VARIOUS KOLKATA BASED COMPANIES AND OTHER COMPANIES REMAINED UNEXPL AINED. IN THE CIRCUMSTANCES, I AM LEFT WITH NO OPTION THAN TO TAX THE ENTIRE UNEXPLAINED CREDITS BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIVED FROM THE PERSONS MENTIONED IN PARA 5 ABOVE AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX ACT, CHARGEAB LE TO TAX AS INCOME OF THE ASSESSEE FIRM FOR THE RESPECTIVE ASSESSMENT YEARS. 22. AFTER EXAMINATION OF THE INFORMATION AND DETA ILS PLACED ON RECORD AND DISCUSSION WITH THE ASSESSEE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- RETURNED INCOME AS PER ITR U/S 153A OF THE ACT. RS. 2,82,83,460/ - ADDITIONS | UNEXPLAINED CASH CREDITS U/S | 68 OF THE ACT IN THE FORM OF | UNSECURED LOAN AND PARTNERS | CAPITAL RS. 67,20,14,999/ - ASSESSED INCOME RS. 70,02,98,459/ - R/O RS. 70,02,98,459/ - ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 110 THE TOTAL INCOME OF THE ASSESSEE IN THE STATUS OF F IRM FOR ASSESSMENT YEAR 2010-11 RELEVANT TO PREVIOUS YEAR 2009-10 IS A SSESSED AT RS. 70,02,98,459/- U/S 153A READ WITH SECTION 143(3) OF I.T. ACT, 1961. THE FORM ITNS-150 SHOWING CALCULATION OF TAX AND IN TEREST CHARGEABLE, IF ANY, IS ATTACHED HEREWITH AND FORMS A PART OF TH IS ORDER. A NOTICE OF DEMAND U/S 156 OF THE ACT AND CHALLAN FOR PAYMENT O F TAX, IF PAYABLE, IS HEREBY ISSUED. PENALTY NOTICE U/S 274 RWS 271(1) (C) IS ISSUED SEPARATELY. THE ENTIRE FINDING OF THE AO IS BASED ON THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING KOLKATA AND STATEMENT OF SHRI AN AND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITION O N THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY O N THE GROUND THAT THE SLPS FILED BY THE REVENUE IN THE CASES OF KABUL CHA WLA (SUPRA) AND M/S. ALL CARGO GLOBAL LOGISTICS (SUPRA) ETC. HAVE BEEN ADMIT TED FOR DECISION BY THE HONBLE SUPREME COURT. THE RELEVANT PART OF THE FI NDING OF THE LD. CIT (A) IN PARA 3.2.2 AND 3.2.4 AT PAGES 35 AND 36 ARE AS UNDE R :- 3.2.2 AS PER THE PROVISIONS OF THIS SECTION WHERE A SEARCH IS INITIATED U/S 132 OF THE ACT, THE A.O SHALL ISSUE A NOTICE REQUIRING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASS ESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSE SSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED, THE AO HAS TO ASSESS OR REASSESS THE TOTAL INCOME O F SUCH SIX ASSESSMENT YEARS. (EMPHASIS SUPPLIED BY ME). (THE DECISIVE WORDS USED IN THE PROVISIONS ARE TO 'ASSESSEE OR REASSESS THE TOTAL I NCOME' ). THE A.O. IS THUS DUTY BOUND TO DETERMINE THE 'TOTAL INCOME' OF THE A SSESSEE FOR SUCH SIX ASSESSMENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCO ME' REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME THEREFORE WILL COVER NOT ONLY THE INCOME EMANATING FROM DECLA RED SOURCES OR ANY MATERIAL PLACED BEFORE THE ASSESSING OFFICER BUT FR OM ALL SOURCES INCLUDING THE UNDISCLOSED ONES, OR BASED ON THE UNPLACED MATE RIAL BEFORE THE AO. 3.2.3 THE CONCEPT OF ASSESS OR REASSESS AND SHALL ABATE AS CONTEMPLATED U/S 153A IS UNDER HOT JUDICIAL DEBATE. I FIND THAT LEGALLY, THIS ISSUE IS VERY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 111 CONTENTIOUS IN VIEW OF THE DIVERGENT VIEWS OF THE V ARIOUS AUTHORITIES. THE APPELLANT HAS TRIED TO HIGHLIGHT MOST OF THEM. HOWE VER, IT IS EQUALLY PERTINENT TO MENTION HERE THAT THE DEPARTMENT HAS N OT ACCEPTED THE DECISIONS OF HON'BLE MUMBAI HIGH COURT IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREH OUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FILED BEFORE T HE HON'BLE SUPREME COURT. THE HON'BLE SUPREME COURT HAS GRANTE D LEAVE VIDE ORDER DATED 12.10.2015 AS REPORTED IN 64 TAXMANN.COM 34 (S.C.). SIMILARLY, IN THE CASE OF KABUL CHAWLA SLP HAS ALSO BEEN FILED. 3.2.4 IN VIEW OF SLPS ADMITTED IN CASE OF KABUL CHAWLA, M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., (SUPRA), ASSESSEES CONTENTION CANNOT BE ACCEPTED. MOREOVER, IN ANY CASE, THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PE R RELEVANT GROUND OF APPEAL, THE ISSUE RAISED IN THIS GROUND FOR PRESENT REMAINS FOR ACADEMIC DISCUSSION ONLY. ACCORDINGLY, ISSUE RA ISED IN GROUND NO. 12 IS DISMISSED. THEREFORE, NEITHER IN THE ASSESSMENT ORDER NOR IN T HE ORDER OF THE LD. CIT (A) THERE IS ANY MENTION OR FINDING THAT THE ADDITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DU RING THE COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HA S SOLELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA AND STATEM ENT OF ONE SHRI ANAND SHARMA RECORDED BY THE INVESTIGATION WING DURING TH E SURVEY UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATIO N/REPORT OF THE INVESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANNOT BE REGARDED AS INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKING THE ADDITION UNDER SECTION 1 53A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT WAS NOT PENDING ON THE D ATE OF SEARCH AND THE PROCEEDINGS ARE IN THE NATURE OF REASSESSMENT IS ES SENTIALLY THE INCRIMINATING MATERIAL DISCLOSING UNDISCLOSED INCOME WHICH WAS NO T DISCLOSED BY THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 112 ASSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS N OT CLAIMED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTAN CES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS ON THIS ISSUE IN WHICH TH E SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HONBLE SUPREME COURT, TH E ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSMENT ORDERS UNDER SECTIO N 153A FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 ARE NOT SUSTAINAB LE AND ACCORDINGLY THE SAME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGL Y. SINCE THE FACTS INVOLVED AS WELL AS THE CONTENTIONS OF BOTH THE PARTIES FOR BOTH THE ASSESSMENT YEARS ARE SAME, THE REFORE, OUR FINDING IN THE CASE OF KOTA DALL MILL ON THIS ISSUE IS APPLICABLE IN THIS CASE ALSO. ACCORDINGLY, THE ADDITION MADE BY THE AO WITHOUT ANY MATERIAL MUCH LESS THE INCRIMINATING MATERIAL I S NOT SUSTAINABLE IN LAW. FURTHER, THE REPORT OF THE INV ESTIGATION WING KOLKATA IS ALSO NOT A MATERIAL OR DOCUMENT EITHER F OUND OR DETECTED DURING THE SEARCH AND SEIZURE ACTION IN CA SE OF THE ASSESSEE BUT IT PERTAINS TO THE INVESTIGATION CARRI ED OUT BY THE INVESTIGATION WING KOLKATA IN A SEPARATE MATTER. TH EREFORE, THE SAID REPORT WILL NOT PARTAKE THE CHARACTER OF INCRI MINATING MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEI ZURE ACTION IN THE CASE OF THE ASSESSEE. HENCE THE ADDITIONS MADE BY THE AO WHILE FRAMING THE ASSESSMENT UNDER SECTION 153A OF THE ACT ARE DELETED FOR WANT OF INCRIMINATING MATERIAL. 23. WITH RESPECT TO ISSUE TAKEN FOR NOT PROVIDING O PPORTUNITY TO CROSS EXAMINATION, THEREFORE, NO ADDITION IS SUSTAINABLE. THE ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S K OTA DALL MILL VS. DCIT (SUPRA) FOR THE A.Y. 2010-11 AND 2015-17, WHICH HAS ALREADY BEEN DISCUSSED IN EARLIER PARAGRAPHS OF THIS ORDER. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 113 25. SIMILARLY IN THE CASE OF DCIT VS. M/S BARAN ROLL ER FLOUR MILLS P. LTD. (SUPRA), THE TRIBUNAL HAS DEALT THE IDENTICAL ISSUE FROM PAGES 57 TO 91 AS UNDER: 17. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. AN IDENTICAL ISSUE HAS BEEN CO NSIDERED AND DECIDED BY US IN THE CASE OF GROUP CONCERN, NAMELY, M/S. KOTA DALL MILL IN ITA NOS. 997 TO 1002/JP/2018 AND 1119/ JP/2018 AND OTHERS VIDE ORDER DATED 31 ST DECEMBER, 2018 IN PARA 11 AND 11.1 AS UNDER :- 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. FOR THE ASSESSMENT YE AR 2010-11, THE ASSESSEE HAS CHALLENGED THE ADDITION SUSTAINED BY L D. CIT (A) IN RESPECT OF UNSECURED LOAN FROM M/S. JALSAGAR COMMER CE PVT. LTD. THE OTHER ADDITIONS MADE BY THE AO ON ACCOUNT OF UNSECU RED LOANS AS WELL AS PARTNERS CAPITAL FOR THE ASSESSMENT YEAR 2010-1 1 WERE DELETED BY THE LD. CIT (A) ON THE GROUND THAT THE AO WAS NOT H AVING IN HIS POSSESSION EVEN THE STATEMENT OF THE CONCERNED PERS ONS IN SUPPORT OF HIS FINDING THAT THE ALLEGED LOAN AND PARTNERS CAP ITAL IS NOTHING BUT BOGUS ACCOMMODATION ENTRIES. THEREFORE, THE REVENU E HAS CHALLENGED THAT PART OF THE ORDER IN THE CROSS APPEAL. THE LD . A/R OF THE ASSESSEE HAS POINTED OUT THAT FOR THE ASSESSMENT YEAR 2010-1 1 THERE WAS NO LOAN FROM THE COMPANY CONTROLLED BY SHRI ANAND SHAR MA, M/S. ROYAL CRYSTAL DEALERS PVT. LTD. BUT THE ASSESSEE TOOK THE LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. WHICH IS NOT THE COMPAN Y OWNED OR CONTROLLED BY SHRI ANAND SHARMA. THE LD. CIT (A) H AS SUSTAINED THE ADDITION IN RESPECT OF LOAN FROM M/S. JALSAGAR COMM ERCE PVT. LTD. IN PARA 5.1 TO 5.12 AS UNDER :- 5.1 IN THIS RESPECT, I FIND THAT SHRI ANAND SHARMA WHOSE STATEMENT IS REPRODUCED AT PAGE 56 OF THE ASSESSMEN T ORDER HAS CLEARLY ACCEPTED THAT M/S JALSAGAR COMMERCE PVT. LT D. IS BENEFICIARY COMPANY LIKE KOTA DAL MILL AND BOTH OF THESE WERE P ROVIDED BOGUS LOANS/ADVANCES BY ROYAL CRYSTAL DEALER PVT. LTD WHI CH IS A PAPER COMPANY CONTROLLED BY HIM. HE FURTHER STATED THAT T HE BENEFICIARY ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 114 PARTY SUCH I.E, M/S JALSAGAR COMMERCE PVT. LTD. GAV E HIM CASH IN LIEU OF WHICH CHEQUES WAS GIVEN BY HIM FOR SOME COMMISSI ON INCOME. HE ALSO ADMITTED THAT SOME PAPER COMPANIES HAVE SOLD T O BENEFICIARY PARTIES. THOUGH, IN THE INITIAL REPORT DATED 28.11. 2017, M/S JALSAGAR COMMERCE PVT. LTD. WAS TREATED A PARTY IN RAJASTHAN , IN LATER REPORT DATED 06.12.2017 THE ENTRY OPERATOR SHRI ANAND SHAR MA WAS LINKED WITH M/S JALSAGAR COMMERCE PVT. LTD. AS PER THE DA TA BASE PREPARED BY DIRECTORATE OF INVESTIGATION KOLKATA THE RELEV ANT PART OF THE SAID STATEMENT AS REPRODUCED ON PAGE NO.57 OF THE ASSESS MENT ORDER IS AS UNDER: - 5.2 HOWEVER, IT IS THE SUBMISSION OF THE APPELLANT THAT NO NOTICE UNDER SECTION 131 OR 133(6) OF THE ACT WAS ISSUED TO THIS COMPANY, EITHER BY THE LD. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 115 AO OR BY THE CONCERNED AO OR BY THE DDIT (INV.) KOL KATA. ALSO, ON BARE PERUSAL OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NAME OF THE SAID COMPANIES DOES NOT APPEAR IN THE STATEMENT OF ANY O F THE ENTRY OPERATORS AS REPRODUCED BY THE AO IN THE ASSESSMENT ORDER. HOWEV ER, THE RELEVANT DOCUMENTS INCLUDING THE LEDGER A/C SHOWING THE TRAN SACTIONS WITH APPELLANT COMPANY, SOURCE SHEET OF FUNDS OF TRANSACTIONS MADE WITH THE APPELLANT, COPY OF BANK STATEMENT SHOWING THE TRANSACTIONS, ET C. STAND SUBMITTED FOR CONFIRMATION OF THE TRANSACTION OF LOAN WITH THE AP PELLANT. 5.3 IN MY CONSIDERED VIEW, AS THE NAME OF M/S JALSA GAR COMMERCE PVT. LTD. IS CLEARLY MENTIONED AS BENEFICIARY COMPANY IN THE STATEMENT OF SHRI ANAND SHARMA, AND SHRI ANAND SHARMA IS MENTIONED T HAT SOME OF SUCH PAPER COMPANY ARE SOLD TO BENEFICIARY PARTY, IN VIEW OF F ACT THAT NAME OF M/S JALSAGAR COMMERCE PVT. LTD. IS MENTIONED IN THE REP ORTS AS DISCUSSED IN PARA 4.4.7 ABOVE, A GENUINE DOUBT IS RAISED ON THE IDENT ITY AND GENUINENESS OF COMPANY. FURTHER, THE ADVERSE FACTS POINTED OUT IN THE REPORTS AS DISCUSSED IN PARA 4.4.7 ABOVE FOR ESTABLISHED BACKGROUND OF ALL THESE SHARE HOLDERS / DEPOSITORS BEING THE PUPPET IN THE HAND OF ONE OR O THER ACCOMMODATION ENTRY PROVIDERS, LAYERING THE TRANSACTION BY CHEQUE DEPOS IT ON THE SAME DAY OR PRECEDING DAY OF SHARE APPLICATION / DEPOSITS, THE ASSERTIONS OF THE AO FOR NO- CREDITWORTHINESS OR IN-ADEQUATE CREDITWORTHINESS OF THE SO-CALLED SHAREHOLDERS / DEPOSITORS HOLDS FIELDS. DURING THE APPELLATE PRO CEEDING BEFORE ME, THOUGH PAPER BOOKS FOR RELEVANT AY AND COMMON PAPER BOOKS HAVE BEEN SUBMITTED, THE SAME DOES NOT ADDUCE ANY EVIDENCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE ASSESSMENT ORDER AS MENTIONED BY ME IN PARA 4.1 ABOVE AND CATEGORICALLY MENTIONED IN THE REPORTS AS DISCUSSED IN PARA 4.4.7 ABOVE. UNDER THESE ADVERSE BACKGROUND OF APPELLANT EMPLOYING MODUS- OPERENDI OF RESORTING ACCOMMODATION ENTRY PROVIDER TO BUILD-UP SHARE CAPITAL / UNSECURED LOANS BY FOUL MEANS, WHAT THE AO IS VEHEMENTLY MAKING TH E CASE FOR IS THE LAW ON THE ISSUE-SECTION 68 OF INCOME-TA X ACT HAS TO BE APPLIED BY EVOLVING PERCEPTIONS FOR THE LAW ON THE ISSUE AND N OT ON THE BASIS OF ROUTINE PERCEPTIONS ON THE LAW ON THE ISSUE THAT IS LOSING THEIR RELEVANCE. 5.4 WITH ALL DUE RESPECT TO AUTHORITIES CITED BY TH E APPELLANT FOR CANVASSING HIS STAND POINT, I AM NOT ABLE TO PERSUA DE MY CONSCIENCE TO AGREE WITH APPELLANTS ARGUMENTS. IN MY CONSIDERED OPINION , UNDER THE ADVERSE BACKGROUND OF APPELLANT EMPLOYING MODUS-OPERENDI OF RESORTING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 116 ACCOMMODATION ENTRY PROVIDER TO BUILD-UP UNSECURED LOANS AS ESTABLISHED IN THE ASSESSMENT ORDER AS BRIEFLY HIGHLIGHTED IN PARA 4.1 ABOVE, AND ARMED WITH SEVERAL AUTHORITIES ON THE ISSUE CITED BY THE AO, I FULLY AGREE WITH THE VIEW TAKEN BY AO. HOWEVER, TO FORTIFY THE FINDING OF THE AO AND TO HIGHLIGHT THE GUIDING PRINCIPLE ON ADJUDICATING NON-GENUINE UNSEC URED LOANS RAISED THROUGH ACCOMMODATION ENTRY PROVIERS, I PLACE FURTHER RELIA NCE ON FEW MORE CASE LAWS WITH UNDERLINING THE SIMILARITY OF ADVERSE FACTS PR EVAILING IN THE PRESENT CASE AS FOLLOWS:- 5.5 IN CASE OF SUMAN GUPTA V/S. INCOME TAX OFFICER ITAT, AGRA BENCH (2012) 138 ITD 0153 HELD AS UNDER:- THE AO DISCUSSED EACH AND EVERY CREDITOR IN THE ASS ESSMENT ORDER AND THE CRUX OF THE FINDINGS OF THE AO HAD BEEN THAT THERE WERE VERY SMALL BANK BALANCES IN THE BANK ACCOUNTS OF THE CREDITORS AND THEY WERE HAVING MEAGER INCOME AND AS SUCH, THEY WERE NOT MEN OF MEANS TO A DVANCE ANY LOAN TO THE ASSESSEE. IT IS WELL SETTLED LAW THAT BURDEN IS UPON THE ASS ESSEE TO PROVE INGREDIENTS OF SECTION 68 OF THE ACT BY PROVING IDE NTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS, HOWEVER, FAILED TO PROVE THE CREDITWORTHINESS OF THE CREDITO RS WHO WERE HAVING ONLY MEAGER INCOME. NO DETAILS OF THEIR SAVINGS HAVE BEE N FILED. THE ASSESSEE HAS NEVER SHOWN HIS WILLINGNESS TO PRODUCE THE REMAININ G CREDITORS FOR EXAMINATION BEFORE THE AO. THEREFORE, THE GENUINENE SS OF THE TRANSACTION COULD NOT HAVE BEEN EXAMINED BY THE AO. THE SMALLNE SS OF THE BANK BALANCE IN THE BANK ACCOUNTS OF THE CREDITORS PRIOR TO ISSU E OF CHEQUES WOULD CLEARLY REVEAL THAT THEY WERE NOT HAVING ANY SOURCE AND IT WAS THE MONEY OF THE ASSESSEE WHICH WAS ROUTED THROUGH THE BANK ACCOUNTS OF THE CREDITORS FOR THE PURPOSE OF GIVING CREDITS TO THE ASSESSEE. THESE WE RE, THEREFORE, ACCOMMODATION ENTRIES ONLY AND AS SUCH, COULD NOT B E CONSIDERED AS GENUINE TRANSACTIONS. MERELY BECAUSE THE LOANS HAVE BEEN RE CEIVED THROUGH BANKING CHANNEL, IS NOT SACROSANCT TO MAKE A NON-GENUINE TR ANSACTION AS GENUINE TRANSACTION. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LI GHT OF ABOVE DISCUSSION AND DECISION, THERE IS NO JUSTIFICATION TO INTERFERE WI TH THE ORDER OF THE LD. CIT(A). THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINE SS OF ALL THE CREDITORS AND NO SOURCE OF THEIR INCOME HAS BEEN FILED. AT THE BEST THE ASSESSEE IS ABLE TO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 117 PROVE IDENTITY OF THE CREDITORS, BUT THE ASSESSEE F AILED TO PROVE THE GENUINE CREDIT IN THE MATTER. ALL THE CREDITORS HAVE BEEN R IGHTLY FOUND TO BE MEN OF MEAGER MEANS AND NO SOURCE OF INCOME HAVE BEEN FILE D TO PROVE THAT THEY WERE HAVING SUFFICIENT FUNDS OR SAVINGS IN ORDER TO GIVE LOANS TO THE ASSESSEE. ON VERIFICATION OF THE BANK ACCOUNT OF THE DEPOSITO RS, IT WAS SPECIFICALLY FOUND THAT THERE WERE NO SUFFICIENT FUNDS AVAILABLE IN TH EIR BANK ACCOUNT AND THEY WERE HAVING ONLY SMALL BANK BALANCE, WHICH WAS EVEN NOT SUFFICIENT TO MEET OUT THEIR HOUSEHOLD EXPENSES OR DAY-TO-DAY REQUIREM ENTS. THEREFORE, IT IS UNBELIEVABLE TO ACCEPT THE CONTENTION OF THE ASSESS EE THAT SAID PERSONS WERE HAVING CREDITWORTHINESS TO ADVANCE ANY LOAN TO THE ASSESSEE. CIT(A) WAS JUSTIFIED IN CONFIRMING THE ADDITION U/S. 68 OF THE IT ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADDUCED ANY SUFFICIENT EVIDENC E BEFORE THE AUTHORITIES BELOW TO PROVE THE CREDITWORTHINESS OF THE CREDITOR S AND GENUINENESS OF THE TRANSACTIONS IN THE MATTER. THEREFORE, THE ASSESSEE HAS NOT SATISFIED THE ESSENTIAL INGREDIENTS OF SECTION 68 OF THE IT ACT. CONCLUSION: MERELY BECAUSE THE LOANS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL, IS NOT SACROSANCT TO MAKE A NON-GENUINE TRANSACTION AS GEN UINE TRANSACTION. THE ABOVE DECISION IS CONFIRMED BY HONBLE ALLAHABA D HIGH COURT VIDE THEIR JUDGMENT IN ITA NO.680/12 VIDE JUDGMENT DATED 07.08 .2012 AND SLP OF ASSESSEE WAS DISMISSED BEFORE THE HONBLE APEX COUR T AS REPORTED IN 2013- LL-0122-69 5.6 HONBLE HIGH COURT OF DELHI IN CASE OF COMMISSI ONER OF INCOME TAX V/S. NAVODAYA CASTLES PVT. LTD. REPORTED AT (2014) 367 ITR 0306 INVOLVING EXACTLY SIMILAR FACTS OBSERVED IN PARA 2, 3 THEN PA RA 2 AS UNDER:- 2. THE APPEAL ARISES OUT OF THE IMPUGNED ORDER DATE D 31 ST OCTOBER, 2011, PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, UPHOLD ING THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) DELETING A DDITION OF RS.54,00,000/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 (ACT, FOR SHORT), BY THE ASSESSING OFFICER ON ACCOUNT OF SHAR E APPLICATION. 3. THE ASSESSEE, A COMPANY, HAD FILED THEIR RETURN OF INCOME FOR THE ASSESSMENT YEAR 2002-03 DECLARING LOSS OF RS.1,58,0 35/- ON 20 TH OCTOBER, 2002, WHICH WAS PROCESSED UNDER SECTION 143(1) OF T HE ACT. SUBSEQUENTLY, ON ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 118 THE BASIS OF A REPORT SUBMITTED BY THE INVESTIGATIO N WING THAT THE ASSESSEE WAS A RECIPIENT OF ACCOMMODATION ENTRIES IN FORM OF SHA RE APPLICATION MONEY/SHARE CAPITAL/SHARE PREMIUM, NOTICE UNDER SEC TION 147 READ WITH SECTION 148 OF THE ACT WAS ISSUED AND SERVED ON 25 TH MARCH, 2009 .. 7. SUMMONS UNDER SECTION 131 OF THE ACT WERE SENT T O THE ALLEGED SHAREHOLDERS AND THEY WERE ASKED TO FURNISH DETAILS ON 10 TH DECEMBER, 2009. DIRECTORS/PRINCIPAL OFFICERS WERE REQUIRED TO PERSO NALLY COME AND DEPOSE. THE SUMMONSES, AS PER THE ASSESSMENT ORDER, WERE RE CEIVED BACK UNSERVED. AT THE SAME TIME, THE ASSESSEE FILED DETAILS AND CONFI RMATIONS OF THE ALLEGED SHARE CAPITAL. EARLIER ON 8 TH DECEMBER, 2009, A DETAILED SHOW CAUSE NOTICE WAS ISSUED, FIXING THE HEARING ON 14 TH DECEMBER, 2009. THE ASSESSEE WAS ASKED TO PRODUCE THE SHAREHOLDERS ALONG WITH THEIR BOOKS OF ACCOUNTS TO SUBSTANTIATE ITS CLAIM OF GENUINENESS OF THE CASH C REDITS. IN FACT ON 10 TH DECEMBER, 2009, AUTHORIZED REPRESENTATIVE HAD APPEA RED AND HE WAS APPRISED THAT THE SUMMONS ISSUED TO THE SHAREHOLDER S UNDER SECTION 131 HAD BEEN RECEIVED BACK UNSERVED IN FIVE CASES AND HE WA S REQUESTED TO PROVIDE THE PRESENT POSTAL ADDRESS OF THE PARTIES. IN THE MEANW HILE, THE ASSESSING OFFICER MANAGED TO GET HOLD OF THE BANK STATEMENTS OF THE S HAREHOLDERS, WHO HAD ALLEGEDLY MADE DEPOSITS BY WAY OF CHEQUES AND PAY O RDERS. THE ASSESSMENT ORDER SPECIFICALLY RECORDS THAT HUGE CASH DEPOSITS IN LACS WERE BEING REGULARLY DEPOSITED IN THE SAID ACCOUNTS AND THEN PAY ORDERS/ CHEQUES WERE ISSUED TO THE RESPONDENT ASSESSEE. 8. ON 14 TH DECEMBER, 2009, AUTHORIZED REPRESENTATIVE APPEARED AND STATED THAT THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS O R PRINCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPANIES PLEADING THAT THEY WERE N OT SHAREHOLDERS NOW AND SEVEN YEARS HAD PASSED SINCE THE TRANSACTIONS TOOK PLACE. THE ASSESSMENT ORDER RECORDS AND MENTIONS ABOUT THE TRANSACTIONS R ECORDED IN THE BANK ACCOUNTS OF THE SHAREHOLDER/ENTRY OPERATOR COMPANIE S TO SHOW AND ESTABLISH THAT THERE WAS IMMEDIATE DEPOSIT OF CASH AND THEN I SSUE OF CHEQUES. IT WAS FURTHER MENTIONED THAT THESE COMPANIES WERE UNDER C ONTROL OF ONE MAHESH GARG AND HIS GROUP, WHO WERE OPERATING VARIOUS ACCO UNTS. THE ASSESSING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 119 OFFICER MADE ADDITION OF RS.54,00,000/- UNDER SECTI ON 68 OF THE ACT AND RS.1,08,000/- AS COMMISSION PAID FOR PROCURING THE SAID SHARES BEING 2% OF RS.54,00,000/-. ................................................... ................................................... .............. .. 11. WE HAVE HEARD THE SENIOR STANDING COUNSEL FOR T HE REVENUE, WHO HAS RELIED UPON DECISIONS OF THE DELHI HIGH COURT IN CO MMISSIONER OF INCOME TAX VS. NOVA PROMOTERS AND FINLEASE (P) LTD. [2012] 342 ITR 169 (DELHI), COMMISSIONER OF INCOME TAX VS. N.R. PORTFOLIO PVT. LTD., 206 (2014) DLT 97 (DB) (DEL) AND COMMISSIONER OF INCOME TAX-II VS. MA F ACADEMY P. LTD., 206 (2014) DLT 277 (DB) (DEL). THE AFORESAID DECISI ONS MENTIONED ABOVE REFER TO THE EARLIER DECISIONS OF DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX VS. SOPHIA FINANCE LTD., [1994] 205 ITR 98 (FB) (DELHI), CIT VS. DIVINE LEASING AND FINANCE LIMITED [2008] 299 ITR 268 (DEL HI) AND OBSERVATIONS OF THE SUPREME COURT IN CIT VS. LOVELY EXPORTS P. LTD. [2008] 319 ITR (ST.) 5 (SC). 12. THE MAIN SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT ONCE THE ASSESSEE HAD BEEN ABLE TO SHOW THAT THE SHARE H OLDER COMPANIES WERE DULY INCORPORATED BY THE REGISTRAR OF COMPANIES, THEIR I DENTITY STOOD ESTABLISHED, GENUINENESS OF THE TRANSACTIONS STOOD ESTABLISHED A S PAYMENTS WERE MADE THROUGH ACCOUNTS PAYEE CHEQUES/BANK ACCOUNT; AND ME RE DEPOSIT OF CASH IN THE BANK ACCOUNTS PRIOR TO ISSUE OF CHEQUE/PAY ORDE RS ETC. WOULD ONLY RAISE SUSPICION AND, IT WAS FOR THE ASSESSING OFFICER TO CONDUCT FURTHER INVESTIGATION, BUT IT DID NOT FOLLOW THAT THE MONEY BELONGED TO THE ASSESSEE AND WAS THEIR UNACCOUNTED MONEY, WHICH HAD BEEN CHANNEL IZED. 13. AS WE PERCEIVE, THERE ARE TWO SETS OF JUDGMENTS AND CASES, BUT THESE JUDGMENTS AND CASES PROCEED ON THEIR OWN FACTS. IN ONE SET OF CASES, THE ASSESSEE PRODUCED NECESSARY DOCUMENTS/EVIDENCE TO S HOW AND ESTABLISH IDENTITY OF THE SHAREHOLDERS, BANK ACCOUNT FROM WHI CH PAYMENT WAS MADE, THE FACT THAT PAYMENTS WERE RECEIVED THOROUGH BANKING C HANNELS, FILED NECESSARY AFFIDAVITS OF THE SHAREHOLDERS OR CONFIRMATIONS OF THE DIRECTORS OF THE SHAREHOLDER COMPANIES, BUT THEREAFTER NO FURTHER IN QUIRIES WERE CONDUCTED. THE SECOND SET OF CASES ARE THOSE WHERE THERE WAS E VIDENCE AND MATERIAL TO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 120 SHOW THAT THE SHAREHOLDER COMPANY WAS ONLY A PAPER COMPANY HAVING NO SOURCE OF INCOME, BUT HAD MADE SUBSTANTIAL AND HUGE INVESTMENTS IN THE FORM OF SHARE APPLICATION MONEY. THE ASSESSING OFFICER H AS REFERRED TO THE BANK STATEMENT, FINANCIAL POSITION OF THE RECIPIENT AND BENEFICIARY ASSESSEE AND SURROUNDING CIRCUMSTANCES. THE PRIMARY REQUIREMENTS , WHICH SHOULD BE SATISFIED IN SUCH CASES IS, IDENTIFICATION OF THE C REDITORS/SHAREHOLDER, CREDITWORTHINESS OF CREDITORS/SHAREHOLDER AND GENUI NENESS OF THE TRANSACTION. THESE THREE REQUIREMENTS HAVE TO BE TESTED NOT SUPE RFICIALLY BUT IN DEPTH HAVING REGARD TO THE HUMAN PROBABILITIES AND NORMAL COURSE OF HUMAN CONDUCT. 14. CERTIFICATE OF INCORPORATION, PAN NUMBER ETC. A RE RELEVANT FOR PURCHASE OF IDENTIFICATION, BUT HAVE THEIR LIMITATION WHEN THER E IS EVIDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER WAS A PAPER COMPANY AND NO T A GENUINE INVESTOR. IT IS IN THIS CONTEXT, THE SUPREME COURT IN CIT VS. DU RGA PRASAD MORE [1971] 82 ITR 540 (SC) HAD OBSERVED:- NOW WE SHALL PROCEED TO EXAMINE THE VALIDITY OF TH OSE GROUNDS THAT APPEALED TO THE LEARNED JUDGES. IT IS TRUE THAT THE APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE RE ASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL. IN A CASE OF THE PRES ENT KIND A PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS, OTHERWISE IT WILL BE VERY EASY TO MAKE SELF-SERVING STATEMENTS IN DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND R ELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVAD E TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVAD E TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT R EQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BE FORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMST ANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS . 15. SUMMARIZING THE LEGAL POSITION IN NOVA PROMOTER S AND FINLEASE (P) LTD.(SUPRA), AND HIGHLIGHTING THE LEGAL EFFECT OF S ECTION 68 OF THE ACT, THE DIVISION BENCH HAS HELD AS UNDER:- ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 121 32. THE TRIBUNAL ALSO ERRED IN LAW IN HOLDING ASSE SSING OFFICER OUGHT TO HAVE PROVED THAT THE MONIES EMANATED FROM THE CO FFERS OF THE ASSESSEE-COMPANY AND CAME BACK AS SHARE CAPITAL. SE CTION 68 PERMITS THE ASSESSING OFFICER TO ADD THE CREDIT APPEARING I N THE BOOKS OF ACCOUNT OF THE ASSESSEE IF THE LATTER OFFERS NO EXP LANATION REGARDING THE NATURE AND SOURCE OF THE CREDIT OR THE EXPLANAT ION OFFERED IS NOT SATISFACTORY. IT PLACES NO DUTY UPON HIM TO POINT T O THE SOURCE FROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. IN A. GOVINDARAJULU MUDALIAR V CIT, (1958) 34 ITR 807, THIS ARGUMENT AD VANCED BY THE ASSESSEE WAS REJECTED BY THE SUPREME COURT. VENKATARAMA IYER, J., SPEAKING FOR THE COURT OBSERVED AS UNDER (@ PAGE 81 0):- NOW THE CONTENTION OF THE APPELLANT IS THAT ASSUMI NG THAT HE HAD FAILED TO ESTABLISH THE CASE PUT FORWARD BY HIM, IT DOES NOT FOLLOW AS A MATTER OF LAW THAT THE AMOUNTS IN QUESTION WERE INC OME RECEIVED OR ACCRUED DURING THE PREVIOUS YEAR, THAT IT WAS THE D UTY OF THE DEPARTMENT TO ADDUCE EVIDENCE TO SHOW FROM WHAT SOU RCE THE INCOME WAS DERIVED AND WHY IT SHOULD BE TREATED AS CONCEAL ED INCOME. IN THE ABSENCE OF SUCH EVIDENCE, IT IS ARGUED, THE FINDING IS ERRONEOUS. WE ARE UNABLE TO AGREE. WHETHER A RECEIPT IS TO BE TRE ATED AS INCOME OR NOT, MUST DEPEND VERY LARGELY ON THE FACTS AND CIRC UMSTANCES OF EACH CASE. IN THE PRESENT CASE THE RECEIPTS ARE SHOWN IN THE ACCOUNT BOOKS OF A FIRM OF WHICH THE APPELLANT AND GOVINDASWAMY M UDALIAR WERE PARTNERS. WHEN HE WAS CALLED UPON TO GIVE EXPLANATI ON HE PUT FORWARD TWO EXPLANATIONS, ONE BEING A GIFT OF RS. 80,000 AN D THE OTHER BEING RECEIPT OF RS. 42,000 FROM BUSINESS OF WHICH HE CLA IMED TO BE THE REAL OWNER. WHEN BOTH THESE EXPLANATIONS WERE REJECTED, AS THEY HAVE BEEN IT WAS CLEARLY UPON TO THE INCOME-TAX OFFICER TO HO LD THAT THE INCOME MUST BE CONCEALED INCOME. THERE IS AMPLE AUTHORITY FOR THE POSITION THAT WHERE AN ASSESSEE FAILS TO PROVE SATISFACTORIL Y THE SOURCE AND NATURE OF CERTAIN AMOUNT OF CASH RECEIVED DURING TH E ACCOUNTING YEAR, THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFE RENCE THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THE CONCLUSION TO WHICH THE APPELLATE TRIBUNAL CAME APPEARS TO US TO BE AMPLY W ARRANTED BY THE FACTS OF THE CASE. THERE IS NO GROUND FOR INTERFERI NG WITH THAT FINDING, ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 1 22 AND THESE APPEALS ARE ACCORDINGLY DISMISSED WITH CO STS.(EMPHASIS SUPPLIED) SECTION 68 RECOGNIZES THE AFORESAID LEGAL POSITION. THE VIEW TAKEN BY THE TRIBUNAL ON THE DUTY CAST ON THE ASSESSING OFFI CER BY SECTION 68 IS CONTRARY TO THE LAW LAID DOWN BY THE SUPREME COURT IN THE JUDGMENT CITED ABOVE. EVEN IF ONE WERE TO HOLD, ALBEIT ERRON EOUSLY AND WITHOUT BEING AWARE OF THE LEGAL POSITION ADUMBRATED ABOVE, THAT THE ASSESSING OFFICER IS BOUND TO SHOW THAT THE SOURCE OF THE UNACCOUNTED MONIES WAS THE COFFERS OF THE ASSESSEE, WE ARE INCL INED TO THINK THAT IN THE FACTS OF THE PRESENT CASE SUCH PROOF HAS BEEN B ROUGHT OUT BY THE ASSESSING OFFICER. THE STATEMENTS OF MUKESH GUPTA AND RAJANJASSAL, THE ENTRY PROVIDERS, EXPLAINING THEIR MODUS OPERAND I TO HELP ASSESSEES HAVING UNACCOUNTED MONIES CONVERT THE SA ME INTO ACCOUNTED MONIES AFFORDS SUFFICIENT MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICER CAN BE SAID TO HAVE DISCHARGED TH E DUTY. THE STATEMENTS REFER TO THE PRACTICE OF TAKING CASH AND ISSUING CHEQUES IN THE GUISE OF SUBSCRIPTION TO SHARE CAPITAL, FOR A C ONSIDERATION IN THE FORM OF COMMISSION. AS ALREADY POINTED OUT, NAMES O F SEVERAL COMPANIES WHICH FIGURED IN THE STATEMENTS GIVEN BY THE ABOVE PERSONS TO THE INVESTIGATION WING ALSO FIGURED AS SHARE-APP LICANTS SUBSCRIBING TO THE SHARES OF THE ASSESSEE-COMPANY. THESE CONSTI TUTE MATERIALS UPON WHICH ONE COULD REASONABLY COME TO THE CONCLUS ION THAT THE MONIES EMANATED FROM THE COFFERS OF THE ASSESSEE-CO MPANY. THE TRIBUNAL, APART FROM ADOPTING AN ERRONEOUS LEGAL AP PROACH, ALSO FAILED TO KEEP IN VIEW THE MATERIAL THAT WAS RELIED UPON BY THE ASSESSING OFFICER. THE CIT (APPEALS) ALSO FELL INTO THE SAME ERROR. IF SUCH MATERIAL HAD BEEN KEPT IN VIEW, THE TRIBUNAL C OULD NOT HAVE FAILED TO DRAW THE APPROPRIATE INFERENCE. 16. IN THE SAID CASE, THE DIVISION BENCH HAD ALSO E XAMINED THE DECISION OF THE SUPREME COURT IN LOVELY EXPORTS P. LTD. (SUPRA) AND OTHER CASES IN WHICH THE ASSESSEE HAD SUCCEEDED. IT WAS NOTICED THAT IN THE CASE OF LOVELY EXPORTS P. LTD. AFFIDAVITS/CONFIRMATIONS OF SHAREHOLDERS WERE FILED AND INCOME TAX RECORD NUMBERS OF THE SHAREHOLDERS WERE MADE AVAILABLE, BU T THE ASSESSING OFFICER, WHO HAD SUFFICIENT TIME, FAILED TO CARRY OUT INQUIR Y AND EXAMINATION. REFERENCE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 123 WAS MADE TO THE OBSERVATIONS IN DIVINE LEASING (SUP RA) TO THE EFFECT THAT THERE CANNOT BE TWO OPINIONS ON THE ASPECT THAT THE PERNI CIOUS PRACTICE OF CONVERSION OF UNACCOUNTED MONEY THROUGH THE MASQUER ADE OR CHANNEL OF INVESTMENT AS SHARE CAPITAL MUST BE FIRMLY EXCORIAT ED BY THE REVENUE, BUT WHEN THERE IS PREPONDERANCE OF EVIDENCE TO SHOW ABS ENCE OF CULPABILITY, THE ASSESSEE SHOULD NOT BE HARASSED BY THE REVENUE. A D ELICATE BALANCE MUST BE MAINTAINED BETWEEN THE TWO INTERESTS. IN DIVINE LEA SING (SUPRA), THE FOLLOWING PROPOSITION WAS ELUCIDATED:- IN THIS ANALYSIS, A DISTILLATION OF THE PRECEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE IT ACT. THE ASSESSED HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDITOR/SUBSCRIBER; (2) THE GENUINENESS OF THE TRA NSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDIT WORTHINESS OR FINANCIAL ST RENGTH OF THE CREDITOR/SUBSCRIBER. (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED T O THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS REGISTER, SHA RE APPLICATION FORMS, SHARE TRANSFER REGISTER ETC. IT WOULD CONSTI TUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSED. (5 ) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERE NCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS TO RESPON D TO ITS NOTICES; (6) THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR /SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSE D NOR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT , WITHOUT MORE, AGAINST THE ASSESSED. (7) THE ASSESSING OFFICER IS DUTY-BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE CREDITOR/SU BSCRIBER THE GENUINENESS OF THE TRANSACTION AND THE VERACITY OF THE REPUDIATION. 17. NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA) AF TER REFERRING TO THE DISMISSAL OF SLP AGAINST DIVINE LEASING CASE (SUPRA ) OBSERVED AS UNDER:- SO UNDERSTOOD, IT WILL BE SEEN THAT WHERE THE COMPLETE PARTICULARS OF THE SHARE APPLICANTS SUCH AS THEIR N AMES AND ADDRESSES, INCOME TAX FILE NUMBERS, THEIR CREDITWORTHINESS, SH ARE APPLICATION FORMS AND SHARE HOLDERS REGISTER, SHARE TRANSFER R EGISTER ETC. ARE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 124 FURNISHED TO THE ASSESSING OFFICER AND THE ASSESSIN G OFFICER HAS NOT CONDUCTED ANY ENQUIRY INTO THE SAME OR HAS NO MATER IAL IN HIS POSSESSION TO SHOW THAT THOSE PARTICULARS ARE FALSE AND CANNOT BE ACTED UPON, THEN NO ADDITION CAN BE MADE IN THE HAN DS OF THE COMPANY UNDER SEC.68 AND THE REMEDY OPEN TO THE REV ENUE IS TO GO AFTER THE SHARE APPLICANTS IN ACCORDANCE WITH LAW. WE ARE AFRAID THAT WE CANNOT APPLY THE RATIO TO A CASE, SUCH AS THE PR ESENT ONE, WHERE THE ASSESSING OFFICER IS IN POSSESSION OF MATERIAL THAT DISCREDITS AND IMPEACHES THE PARTICULARS FURNISHED BY THE ASSESSEE AND ALSO ESTABLISHES THE LINK BETWEEN SELF-CONFESSED ACCOMM ODATION ENTRY PROVIDERS, WHOSE BUSINESS IT IS TO HELP ASSESSEES BRING INTO THEIR BOOKS OF ACCOUNT THEIR UNACCOUNTED MONIES THROUGH T HE MEDIUM OF SHARE SUBSCRIPTION, AND THE ASSESSEE. THE RATIO IS INAPPLICABLE TO A CASE, AGAIN SUCH AS THE PRESENT ONE, WHERE THE INVO LVEMENT OF THE ASSESSEE IN SUCH MODUS OPERANDI IS CLEARLY INDICATE D BY VALID MATERIAL MADE AVAILABLE TO THE ASSESSING OFFICER AS A RESULT OF INVESTIGATIONS CARRIED OUT BY THE REVENUE AUTHORITIES INTO THE ACT IVITIES OF SUCH ENTRY PROVIDERS. THE EXISTENCE WITH THE ASSESSING OFFICER OF MATERIAL SHOWING THAT THE SHARE SUBSCRIPTIONS WERE COLLECTED AS PART OF A PRE-MEDITATED PLAN A SMOKESCREEN CONCEIVED AND EXECUTED WITH THE CONNIVANCE OR INVOLVEMENT OF THE ASSESSEE EXCLUDES THE APPLICABILITY OF THE RATIO. IN OUR UNDERSTANDING, THE RATIO IS ATTRACTED TO A CASE WHERE IT IS A SIMPLE QUESTION OF WHETHER THE ASSESSEE HAS DISCHARGED THE BURDEN PLACED UPON HIM UNDER SEC.68 TO PROVE AND ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANT AND THE GENUINENESS OF THE TRANSACTION. IN SUCH A CASE, THE ASSESSING OFFICER CANNOT SIT BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE ORMATERIAL IN HIS POSSESSION AND THEN COME FORWARD TO MERELY REJECT THE SAME, WITHOUT CARRYING OUT ANY VE RIFICATION OR ENQUIRY INTO THE MATERIAL PLACED BEFORE HIM. THE CA SE BEFORE US DOES NOT FALL UNDER THIS CATEGORY AND IT WOULD BE A TRAV ESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. 18. LOVELY EXPORTS PVT. LTD.(SUPRA) WAS ALSO CONSID ERED AND DISTINGUISHED IN N.R. PORTFOLIO PVT. LTD. (SUPRA) AND IT WAS HELD TH AT THE ENTIRE EVIDENCE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 125 AVAILABLE ON RECORD HAS TO BE CONSIDERED, AFTER REL YING UPON CIT VS. NIPUN BUILDERS AND DEVELOPERS, [2013] 350 ITR 407 (DELHI) , WHEREIN IT HAS BEEN HELD THAT A REASONABLE APPROACH HAS TO BE ADOPTED A ND WHETHER INITIAL ONUS STANDS DISCHARGED WOULD DEPEND UPON FACTS AND CIRCU MSTANCES OF EACH CASE. IN CASE OF PRIVATE LIMITED COMPANIES, GENERALLY PER SONS KNOWN TO DIRECTORS OR SHAREHOLDERS, DIRECTLY OR INDIRECTLY, BUY OR SUBSCR IBE TO SHARES. UPON RECEIPT OF MONEY, THE SHARE SUBSCRIBERS DO NOT LOSE TOUCH A ND BECOME INCOMMUNICADO. CALL MONEY, DIVIDENDS, WARRANTS, ETC . HAVE TO BE SENT AND THE RELATIONSHIP REMAINS A CONTINUING ONE. THEREFORE, A N ASSESSEE CANNOT SIMPLY FURNISH SOME DETAILS AND REMAIN QUIET WHEN SUMMONS ISSUED TO SHAREHOLDERS REMAIN UN-SERVED AND UNCOMPLIED. AS A GENERAL PROPO SITION, IT WOULD BE IMPROPER TO UNIVERSALLY HOLD THAT THE ASSESSEE CANN OT PLEAD THAT THEY HAD RECEIVED MONEY, BUT COULD DO NOTHING MORE AND IT WA S FOR THE ASSESSING OFFICER TO ENFORCE SHAREHOLDERS ATTENDANCE IN SPIT E OF THE FACT THAT THE SHAREHOLDERS WERE MISSING AND NOT AVAILABLE. THEIR RELUCTANCE AND HIDING MAY REFLECT ON THE GENUINENESS OF THE TRANSACTION A ND CREDITWORTHINESS OF THE CREDITOR. IT WOULD BE ALSO INCORRECT TO UNIVERSALLY STATE THAT AN INSPECTOR MUST BE SENT TO VERIFY THE SHAREHOLDERS/SUBSCRIBERS AT T HE AVAILABLE ADDRESSES, THOUGH THIS MIGHT BE REQUIRED IN SOME CASES. SIMILA RLY, IT WOULD BE INCORRECT TO STATE THAT THE ASSESSING OFFICER SHOULD ASCERTAI N AND GET ADDRESSES FROM THE REGISTRAR OF COMPANIES WEBSITE OR SEARCH FOR THE A DDRESSES OF SHAREHOLDERS THEMSELVES. CREDITWORTHINESS IS NOT PROVED BY SHOWI NG ISSUE AND RECEIPT OF A CHEQUE OR BY FURNISHING A COPY OF STATEMENT OF BANK ACCOUNT, WHEN CIRCUMSTANCES REQUIRES THAT THERE SHOULD BE SOME MO RE EVIDENCE OF POSITIVE NATURE TO SHOW THAT THE SUBSCRIBERS HAD MADE GENUIN E INVESTMENT OR HAD, ACTED AS ANGEL INVESTORS AFTER DUE DILIGENCE OR FOR PERSONAL REASONS. THE FINAL CONCLUSION MUST BE PRAGMATIC AND PRACTICAL, WHICH T AKES INTO ACCOUNT HOLISTIC VIEW OF THE ENTIRE EVIDENCE INCLUDING THE DIFFICULT IES, WHICH THE ASSESSEE MAY FACE TO UNIMPEACHABLY ESTABLISH CREDITWORTHINESS OF THE SHAREHOLDERS. 19. IN N.R. PORTFOLIO PVT. LTD. (SUPRA), IT HAS BEE N HELD AS UNDER:- 18. IN THE REMAND REPORT, THE ASSESSING OFFICER RE FERRED TO THE PROVISIONS OF SECTION 68 OF THE ACT AND THEIR APPLI CABILITY. THE WORD IDENTITY AS DEFINED, IT WAS OBSERVED MEANT THE CO NDITION OR FACT OF A ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 126 PERSON OR THING BEING THAT SPECIFIED UNIQUE PERSON OR THING. THE IDENTIFICATION OF THE PERSON WOULD INCLUDE THE PLAC E OF WORK, THE STAFF, THE FACT THAT IT WAS ACTUALLY CARRYING ON BUSINESS AND RECOGNITION OF THE SAID COMPANY IN THE EYES OF PUBLIC. MERELY PROD UCING PAN NUMBER OR ASSESSMENT PARTICULARS DID NOT ESTABLISH THE IDENTITY OF THE PERSON. THE ACTUAL AND TRUE IDENTITY OF THE PERSON OR A CO MPANY WAS THE BUSINESS UNDERTAKEN BY THEM. THIS ACCORDING TO US IS THE CORRECT AND TRUE LEGAL POSITION, AS IDENTITY, CREDITWORTHIN ESS AND GENUINENESS HAVE TO BE ESTABLISHED. PAN NUMBERS ARE ALLOTTED ON THE BASIS OF APPLICATIONS WITHOUT ACTUAL DE FACTO VERIFICATION O F THE IDENTITY OR ASCERTAINING ACTIVE NATURE OF BUSINESS ACTIVITY. PA N IS A NUMBER WHICH IS ALLOTTED AND HELPS THE REVENUE KEEP TRACK OF THE TRANSACTIONS. PAN NUMBER IS RELEVANT BUT CANNOT BE BLINDLY AND WI THOUT CONSIDERING SURROUNDING CIRCUMSTANCES TREATED AS SU FFICIENT TO DISCHARGE THE ONUS, EVEN WHEN PAYMENT IS THROUGH BA NK ACCOUNT. 19. ON THE QUESTION OF CREDIT WORTHINESS AND GENUIN ENESS, IT WAS HIGHLIGHTED THAT THE MONEY NO DOUBT WAS RECEIVED TH ROUGH BANKING CHANNELS, BUT DID NOT REFLECT ACTUAL GENUINE BUSINE SS ACTIVITY. THE SHARE SUBSCRIBERS DID NOT HAVE THEIR OWN PROFIT MAK ING APPARATUS AND WERE NOT INVOLVED IN BUSINESS ACTIVITY. THEY MERELY ROTATED MONEY, WHICH WAS COMING THROUGH THE BANK ACCOUNTS, WHICH M EANS DEPOSITS BY WAY OF CASH AND ISSUE OF CHEQUES. THE BANK ACCOU NTS, THEREFORE, DID NOT REFLECT THEIR CREDITWORTHINESS OR EVEN GENU INENESS OF THE TRANSACTION. THE BENEFICIARIES, INCLUDING THE RESPO NDENT-ASSESSEE, DID NOT GIVE ANY SHARE-DIVIDEND OR INTEREST TO THE SAID ENTRY OPERATORS/SUBSCRIBERS. THE PROFIT MOTIVE NORMAL IN CASE OF INVESTMENT WAS ENTIRELY ABSENT. IN THE PRESENT CASE, NO PROFIT OR DIVIDEND WAS DECLARED ON THE SHARES. ANY PERSON, WHO WOULD INVES T MONEY OR GIVE LOAN, WOULD CERTAINLY SEEK RETURN OR INCOME AS CONS IDERATION. THESE FACTS ARE NOT ADVERTED TO AND AS NOTICED BELOW ARE TRUE AND CORRECT. THEY ARE UNDOUBTEDLY RELEVANT AND MATERIAL FACTS FO R ASCERTAINING CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION S. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 127 30. WHAT WE PERCEIVE AND REGARD AS CORRECT POSITION OF LAW IS THAT THE COURT OR TRIBUNAL SHOULD BE CONVINCED ABOUT THE IDE NTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE ONUS TO PROVE THE THREE FACTUM IS ON THE ASSESSEE AS THE FA CTS ARE WITHIN THE ASSESSEES KNOWLEDGE. MERE PRODUCTION OF INCORPORAT ION DETAILS, PAN NOS. OR THE FACT THAT THIRD PERSONS OR COMPANY HAD FILED INCOME TAX DETAILS IN CASE OF A PRIVATE LIMITED COMPANY MAY NO T BE SUFFICIENT WHEN SURROUNDING AND ATTENDING FACTS PREDICATE A CO VER UP. THESE FACTS INDICATE AND REFLECT PROPER PAPER WORK OR DOC UMENTATION BUT GENUINENESS, CREDITWORTHINESS, IDENTITY ARE DEEPER AND OBTRUSIVE. COMPANIES NO DOUBT ARE ARTIFICIAL OR JURISTIC PERSO NS BUT THEY ARE SOULLESS AND ARE DEPENDENT UPON THE INDIVIDUALS BEH IND THEM WHO RUN AND MANAGE THE SAID COMPANIES. IT IS THE PERSONS BE HIND THE COMPANY WHO TAKE THE DECISIONS, CONTROLS AND MANAGE THEM. 20. NOW, WHEN WE GO TO THE ORDER OF THE TRIBUNAL IN THE PRESENT CASE, WE NOTICE THAT THE TRIBUNAL HAS MERELY REPRODUCED T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND UPHELD THE DELETION OF THE ADDITION. IN FACT, THEY SUBSTANTIALLY RELIED UPON A ND QUOTED THE DECISION OF ITS COORDINATE BENCH IN THE CASE OF MAF ACADEMY P. LTD., A DECISION WHICH HAS BEEN OVERTURNED BY THE DELHI H IGH COURT VIDE ITS JUDGMENT IN C.I.T VS. MAF ACADEMY P. LTD [ (2014) 2 06 DLT 277). IN THE IMPUGNED ORDER IT IS ACCEPTED THAT THE ASSESSEE WAS UNABLE TO PRODUCE DIRECTORS AND PRINCIPAL OFFICERS OF THE SIX SHAREHOLDER COMPANIES AND ALSO THE FACT THAT AS PER THE INFORMA TION AND DETAILS COLLECTED BY THE ASSESSING OFFICER FROM THE CONCERN ED BANK, THE ASSESSING OFFICER HAS OBSERVED THAT THERE WERE GENU INE CONCERNS ABOUT IDENTITY, CREDITWORTHINESS OF SHAREHOLDERS AS WELL AS GENUINENESS OF THE TRANSACTIONS. 21. IN VIEW OF THE AFORESAID DISCUSSION, WE FEEL TH AT THE MATTER REQUIRES AN ORDER OF REMIT TO THE TRIBUNAL FOR FRESH ADJUDICATI ON KEEPING IN VIEW THE AFORESAID CASE LAW. THE QUESTION OF LAW IS, THEREFO RE, ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE RESPONDENT-ASSESSEE, BU T WITH AN ORDER OF REMIT TO THE TRIBUNAL TO DECIDE THE WHOLE ISSUE AFRESH. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 128 AS REPORTED AT 2015-TIOL-314-SC-IT, IN THE ABOVE CA SE, THE HONBLE SUPREME COURT OBSERVED TO EFFECT THAT MERELY BECAU SE THE ASSESSEE HAS BEEN ABLE TO SHOW THAT THE SHAREHOLDER COMPANIES WERE DU LY INCORPORATED AND THEIR IDENTITY & GENUINENESS STANDS ESTABLISHED, THERE WE RE DEPOSITS OF CASH IN THE BANK ACCOUNTS PRIOR TO ISSUE OF CHEQUE OR PAY ORDER S, THE SAME WOULD RAISE SUSPICION AND ADDITION CAN BE MADE ON SUCH ACCOUNT 5.7 IT MAY BE MENTIONED THAT AS REPORTED AT 2016-TI OL-207-SC-IT, THE HONBLE SUPREME COURT DISMISSED SLP BY RICK LUNSFOR D TRADE & INVESTMENT LTD IN CASE OF RICK LUNSFORD TRADE & INVESTMENT LTD VS CIT UPHOLDING THAT IT IS OPEN TO THE REVENUE DEPARTMENT TO MAKE ADDITI ON ON ACCOUNT OF ALLEGED SHARE CAPITAL U/S 68, WHERE THE ASSESSEE COMPANY HA S FAILED TO SHOW GENUINENESS OF ITS SHAREHOLDERS. 5.8 HONBLE DELHI HIGH COURT IN CASE OF COMMISSIONE R OF INCOME TAX-II V/S MAF ACADEMY PVT. LTD. INVOLVING EXACTLY SIMILAR FACTS IN ITA 341/2012 DATED 28 TH NOVEMBER, 2013 OBSERVED IN PARA 33 TO 36 AS UNDER: 33. THE ASSESSEE COMPANY IS A PRIVATE LIMITED COMPA NY AND HAD NOT COME OUT WITH ANY PUBLIC ISSUE NOR MADE ANY ADVERTI SEMENT FOR ISSUANCE OF SHARE CAPITAL. HOWEVER, IN ONE YEAR THE RE IS INFUSION OF SHARE CAPITAL INCLUDING PREMIUM OF RS.4,35,00,000/- , OUT OF WHICH ONLY RS.92,00,000/- WAS INFUSED FROM THE DIRECTORS/ FAMILY MEMBERS OF THE DIRECTORS. THE REMAINING SHARE CAPITAL HAD BEEN INFUSED FROM PARTIES WHICH WERE COMPLETELY UNRELATED EITHER TO T HE ASSESSEE OR TO ANY OF ITS DIRECTORS. IN A PRIVATE LIMITED COMPANY, NORMALLY THE INVESTMENT OF SHARES IS FROM PARTIES OR PERSONS WHO ARE FRIENDS OR RELATIVES OF PROMOTERS/DIRECTORS. 34. IT IS NOTICED THAT THE SHARES HAD FACE VALUE OF RS.100 /- AND WERE ALLOTTED AT A PREMIUM OF RS.100 /- TO RS.200/- AND WERE THEN SUBSEQUENTLY PURCHASED BY THE PROMOTERS/DIRECTORS, WHO HAD ORIGINALLY TRANSFERRED THESE SHARES AT RS.35 /- PER SHARE. 35. IT IS REALLY SURPRISING THAT A PERSON WHO HAD P URCHASED SHARES AT A PREMIUM OF RS.100 /- TO RS.200/- PER SHARE I.E. AT A PRICE OF RS.200 /- TO RS.300/- PER SHARE, SOLD THE SHARES AT RS.35 /- PER SHARE I.E AT A SUBSTANTIAL LOSS. ANOTHER SURPRISING FACTOR IS THAT THE ENTIRE INVESTMENT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 129 HAPPENED DURING A SHORT SPAN OF TIME AND RE-TRANSFE R OF THE SHARES TO THE FOUR PROMOTERS/DIRECTORS OF THE COMPANY AT RS.3 5 /- PER SHARE BY DIFFERENT PARTIES ALSO HAPPENED DURING A SHORT SPAN OF FEW DAYS. THE MODUS OPERANDI AND THE MANNER IN WHICH CASH IS DEPO SITED IN A BANK AND THEN UTILIZED BY WAY OF AN ACCOUNT PAYEE CHEQUE FOR PURCHASE OF SHARES FOR A PREMIUM OF RS.100 /- TO RS.200/- PER S HARE AND THEN THE SALE OF SHARES AT A LOSS CLEARLY ESTABLISHES THAT T HE SAID TRANSACTION WAS A CAMOUFLAGE TRANSACTION. THE ASSESSEE HAS CLEA RLY ATTEMPTED TO CAMOUFLAGE THE ACCOMMODATION ENTRIES AND TRIED TO G IVE IT A COLOUR OF PURCHASE OF SHARE CAPITAL AND THEN SALE OF THE SAME AT A LOSS. THUS THE ASSESSEE'S CAPITAL INCREASED OR WAS ENHANCED BY A S UBSTANTIAL FIGURE THROUGH THESE DUBIOUS TRANSACTIONS. THIS SHOULD BE AND HAS TO BE CHECKED. 36. OUT OF RS.4.35 CRORES RECEIVED AS SHARE CAPITAL INCLUDING PREMIUM, ONLY RS.92 LACS HAS BEEN RECEIVED FROM THE DIRECTORS OR THEIR FAMILY MEMBERS AND THE REMAINING AMOUNT HAS B EEN RECEIVED FROM PARTIES TOTALLY UNRELATED TO THE ASSESSEE. NOT ICES TO SOME OF THE INVESTORS COULD NOT BE SERVED AND EVEN THE INSPECTO R WHO WAS DEPUTED TO SERVE THE SUMMONS STATED THAT NONE OF THE ADDRES SES COULD BE FOUND. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE REFU SED TO PRODUCE THE PARTIES WHO HAD INVESTED IN THE SHARE C APITAL ON THE GROUND THAT THEY WERE NOT IN A POSITION TO PRODUCE THEM. THE FACT THAT THE ASSESSEE FAILED TO PRODUCE THE PERSONS WHO HAD INVESTED TOWARDS SHARE CAPITAL SHOWS THAT THESE WERE PEOPLE WHO WERE COMPLETELY UNRELATED TO THE ASSESSEE AND AS SUCH, ALL THE ENTR IES WERE MERELY ACCOMMODATION ENTRIES. OTHERWISE, IN A PRIVATE LIMITED COMPANY, IT WOULD NOT HAVE BEEN DIFFICULT ON THE PART OF THE AS SESSEE TO PRODUCE PERSONS WHO WERE INVESTING SUBSTANTIAL AMOUNT OF MO NEY IN THE COMPANY TOWARDS SHARE CAPITAL. 37. THE ASSESSING OFFICER IN HIS ORDER HAS AS A SAM PLE REFERRED TO THE ENTRIES IN THE ACCOUNT OF SOME OF THE SHARE HOLDERS NOTICING THAT THERE ARE CASH DEPOSITS OF THE EXACT AMOUNT FOR WHICH CHE QUE IS SUBSEQUENTLY ISSUED TO THE ASSESSEE. PERUSAL OF THE BANK STATEMENTS CLEARLY ESTABLISHES THAT THESE PARTIES WERE DEPOSIT ING CASH AND IMMEDIATELY EITHER ON THE SAME DAY OR IN THE NEAR F UTURE WITHDRAWING ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 130 THE SAME THROUGH A CHEQUE WHICH WAS ISSUED IN FAVOU R OF THE ASSESSEE. THEN HONBLE DELHI HIGH COURT HELD IN PARA 53 TO 5 4 AS UNDER:- 53. IN CONTRAST TO THE ABOVE JUDGMENTS, IN THE PRES ENT CASE, THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IN THE FA CTUAL MATRIX, WE HAVE HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO DI SCHARGE THE INITIAL ONUS AND HAS NOT BEEN ABLE TO ESTABLISH THE IDENTIT Y, CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE GENUINENESS OF THE TRANSACTION. THOUGH, IN OUR CONSIDERED OPINION, NONE OF THE ABOV E JUDGMENTS, REFERRED TO BY THE ASSESSEE RESPONDENT, ARE APPLICA BLE IN THE FACTS OF THE PRESENT CASE AND IN VIEW OF THE FINDINGS RECORD ED BY US HEREINABOVE. 54. IN VIEW OF THE ABOVE, WE ARE OF THE VIEW THAT T HE ASSESSEE HAS NOT DISCHARGED THE ONUS SATISFACTORILY AND THE ADDITION S MADE BY THE ASSESSING OFFICER WERE JUSTIFIED AND SUSTAINABLE . 5.9 HONBLE INCOME TAX APPELLATE TRIBUNAL DELHI BEN CH: 'B IN CASE OF M/S. AMTRAC AUTOMOTIVE INDIA PVT. LTD. VERSUS ACIT, CIRCLE 1(1), INVOLVING EXACTLY SIMILAR FACTS IN THEIR APPELLATE ORDER ITA NO.2920/DEL/09 FOR A.Y. 2005-06 DATED 31.12.2009 OBSERVED IN PARA 3 & THEN PARA 2 AS UNDER:- 3. THE ASSESSEE COMPANY IS ENGAGED IN SHARE TRADING IN THE YEAR UNDER CONSIDERATION. IN THE COURSE OF SCRUTINY, THE ASSESSING OFFICER NOTED THAT THE APPELLANT HAS INTRODUCED FRESH SHARE CAPITAL TO THE TUNE OF RS. 15,00,000/- AT A SHARE PREMIUM OF RS. 1,35,0 0,000/-......... 2.1 THE AO ASKED THE APPELLANT TO FURNISH DETAIL S OF SUCH SHARE HOLDERS MENTIONING THEIR IDENTITY, GENUINENESS OF TRANSACTI ON AND CREDIT-WORTHINESS. APPELLANT PRODUCED CONFIRMATION OF DEPOSIT FROM DIR ECTORS OF THE RESPECTIVE COMPANY, COPIES OF INCOME TAX RETURN FILED AND COPI ES OF BANK STATEMENT REFLECTING THE ABOVE TRANSACTIONS. IN ORDER TO VERI FY THE ENTIRE TRANSACTIONS IN THE ASSTT. YEAR 2005-06 LIGHT OF GENUINENESS AND CR EDITWORTHINESS, HE ISSUED ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 131 SUMMONS U/S 131 OF THE ACT TO ALL THE ABOVE 15 PERS ONS. THEY WERE ASKED TO PRODUCE THE COPIES OF RETURN FOR AY. 2005-06 AND TH EIR LEDGER ACCOUNTS FROM WHICH THE SOURCE OF ABOVE SHARE APPLICATION MONEY C OULD HAVE BEEN VERIFIED. ALL THE ABOVE SUMMONS WERE RETURNED UNSERVED WITH T HE COMMENTS FROM THE POSTAL AUTHORITIES AS 'NO SUCH PERSON IN THE ABOVE ADDRESS'. THE AO ACCORDINGLY BROUGHT THIS FACT TO THE NOTICE OF THE COUNSEL OF THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 18.12.2007 AND HE WAS GIVEN AN OPPORTUNITY TO PRODUCE THE FUNCTIONAL DIRECTORS OF THE ABOVE COMPA NIES FOR VERIFICATION. AS MENTIONED IN THE ASSESSMENT ORDER, AFTER CERTAIN AD JOURNMENTS, A LETTER WAS FINALLY FILED FROM THE APPELLANT MENTIONING THAT IT IS NO IN TOUCH OF THE ABOVE SHARE HOLDERS AND THEIR PRESENT WHEREABOUTS ARE NOT KNOWN TO IT. THE APPELLANT, HOWEVER, RELYING UPON THE DECISION OF HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SOPHIA FINANCE LTD. IN WHICH THE POWERS OF THE ASSESSING OFFICER WAS NOT PRECLUDED FROM MAKING ENQUIRIES IN SHARE APPLICATION MONEY, SUBMITTED THAT NO ADDITION CAN BE MADE. 2.1.1 THE AO HOWEVER WAS NOT CONVINCED WITH THE SUB MISSION OF THE APPELLANT. HE OBSERVED THAT THAT IT WAS ONLY IN THE COURSE OF ENQUIRY THAT HE TRIED TO EXAMINE THE ABOVE SHARE APPLICANTS. SINCE THE SUMMONS ISSUED TO SUCH PERSONS REMAINED UNSERVED, IT BECAME THE DUTY OF TH E APPELLANT EITHER TO PRODUCE THEM FOR VERIFICATION OR TO STATE THEIR COR RECT ADDRESSES. IT APPEARS TO BE HIGHLY IMPROPER THAT IN A PRIVATE LTD. COMPANY, THE ASSESSEE IS NOT IN A POSITION TO STATE THE EXACT WHEREABOUTS OR FAIL TO PRODUCE THE PERSONS WHO COLLECTIVELY HOLD MORE THAN 25% OF ITS TOTAL SHARE HOLDING. HE ALSO OBSERVED THAT MERE FILING OF ASSTT. YEAR 2005-06 CONFIRMATIO N LETTERS DO NOT ABSOLVE THE APPELLANT FROM ITS ONUS TO PROVE THE CREDIT ENTRIES REFLECTED IN ITS BOOKS OF ACCOUNTS AS HAS BEEN HELD BY HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. UNITED COMMERCIAL & INDUSTRIAL CO. (P) LTD .[1991] 187 ITR 596. HE FURTHER OBSERVED THAT THE FACTS THAT THE AMOUNT WER E PAID BY ACCOUNT PAYEE CHEQUES DO NOT MAKE IT SATISFACTORY AS HELD IN CIT VS. PRECISION FINANCE PVT. LTD. 208 ITR 465 (CAL.). EVEN INCOME -TAX FILE PART ICULARS, WHERE THE SHARE HOLDER IS ASSESSED TO TAX IS NOT SUFFICIENT AS FOUND IN CIT VS. KORLAY TRADING CO. LTD . 232 ITR 820 (CAL.) 2.1.2 THE AO ALSO REFERRED THE ENQUIRY INITIATED BY INVESTIGATION WING OF THE DEPARTMENT IN AUGUST 2003 WHICH CULMINATED INTO DET ECTION OF MANY ENTRY OPERATORS WHO ARE OPERATING NUMBER OF ACCOUNTS IN T HE SAME BANK/BRANCH OR ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 132 IN DIFFERENT BRANCHES, IN THE NAMES OF COMPANIES, F IRMS, PROPRIETARY CONCERNS AND INDIVIDUALS. FOR THE OPERATIONS OF THESE BANK ACCOUNTS, FILING INCOME TAX RETURNS ETC. PERSONS ARE HIRED. LIKE ANY OTHER BUSI NESS IT DOES REQUIRES MANPOWER ACCORDING TO THE SCALE OF OPERATION. EXCEP T FOR TWO OR THREE PERSONS WHO ARE REQUIRED REGULARLY TO VISIT BANKS A ND DO OTHER SPADE WORK LIKE COLLECTION OF CASH ETC., MOST OF THE OTHER PER SONS INVOLVED ARE ON PART TIME BASIS. THE PART TIME EMPLOYEES ARE CALLED AS AND WH EN REQUIRED TO SIGN DOCUMENTS, CHEQUE BOOKS ETC. SOME OF THE ENTRY OPER ATORS HAVE ALSO ROPED IN THEIR OWN RELATIVES FOR OPERATION OF ENTRY ACCOUNTS AND FILING THE INCOME TAX RETURNS. INTERESTINGLY MOST OF THESE CONCERNS / IND IVIDUALS HAVE OBTAINED PAN FROM THE DEPARTMENT AND ARE FILING RETURNS AS WELL. WHAT IS SHOWN IN THE RETURNS IS NOT THE ACTUAL STATE OF AFFAIRS. FOR EXA MPLE WITH ONE PAN SEVERAL BANK ACCOUNTS ARE SIMULTANEOUSLY ASSTT. YEAR 2005-0 6 OPERATED AND ONLY ONE ACCOUNT MIGHT BE SHOWN FOR THE PURPOSE OF AUDIT AND FILING INCOME TAX RETURNS. THE ENTRY OPERATORS PROVIDE ENTRY IN THE GARB OF SH ARE APPLICATION MONEY , GIFTS, LOANS ETC. THROUGH THESE ACCOUNTS, IN LIEU O F CASH, TO ANY PERSON WHO IS HAVING UNACCOUNTED MONEY. 2.1.2.1 THE AO OBSERVED THAT SOME OF THE COMPANIES SHOW ABOVE BY THE APPELLANT AS ITS SHARE HOLDERS WERE FOUND TO HAVE S TATED BEFORE INVESTIGATION WING THAT THEY WERE MERE NAME LENDER FOR ADVANCING MONEY. TO QUOTE SOME OF THEM, SHRI RAJESH BANSAL, DIRECTOR OF M/S. RUBICON ASSOCIATES PVT. LTD., SHRI MAHESH GARG, DIRECTOR OF M/S. S.J. HOSIERY PVT. LTD . ETC. HAVE CATEGORICALLY STATED BEFORE THE INVESTIGATION WING, IN THEIR STAT EMENT TAKEN ON OATH, THAT THEY USED TO TAKE THE AMOUNT IN CASH AND GIVE ENTRIES TO DIFFERENT CONCERNS AS GIFT, LOAN OR SHARE APPLICATION MONEY. ACCORDING TO AO, T O ENQUIRE INTO THIS ASPECT ALSO, THE APPELLANT WAS ASKED TO PRODUCE THE FUNCTI ONAL DIRECTORS OF SUCH SHARE HOLDERS. 2.1.3. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, TH E ASSESSING OFFICER CONCLUDED THAT THE CREDIT IN THE NAME OF THESE SHAR EHOLDERS ARE NOT GENUINE AND REPRESENTS UNEXPLAINED CASH CREDITS. ACCORDINGL Y HE MADE ADDITION OF RS. 1.50 LAKHS TO THE RETURNED INCOME. THEN HONBLE INCOME TAX APPELLATE TRIBUNAL DELHI BE NCH: 'B HELD IN PARA 6 AS UNDER: ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 133 6. AS REGARDS GROUND NO. 2, WE FIND THAT THE ASSESS EE HAS STATED TO HAVE RECEIVED FRESH SHARE CAPITAL TO THE TUNE OF RS. 15 LACS AND SHARE PREMIUM OF RS.1,00,35,000/- I.E. A SHARE OF FACE VALUE OF RS. 10/- EACH ISSUED AT A PREMIUM OF RS. 90/- TOTALING TO RS. 100/-. WHEN THE AO ASKED THE APPELLANT TO FURNISH THE DETAILS THE ASSESSEE PRODUCED SHARE APP LICATION FORMS AND OTHER DETAILS LIKE BANK STATEMENT, COPY OF ACKNOWLEDGMENT OF RETURN ETC. HOWEVER WHEN THE AO CONDUCTED INQUIRY AT THE STATED ADDRESS , SUMMONS WERE RECEIVED BACK UNSERVED WITH THE POSTAL REMARK 'NO SUCH PERSO N IN THE ABOVE ADDRESS'. THIS FACT WAS ASSTT. YEAR 2005-06 BROUGHT TO THE NO TICE OF ASSESSEE ALSO. THEREAFTER THE ASSESSEE EXCEPT PRODUCING THE PAPERS COULD NOT PROVE EXISTENCE OR AVAILABILITY OF THE RESPECTIVE SHARE APPLICANTS. WHEN THE IDENTITY OF THE PERSON IS REQUIRED TO BE PROVED SO AS TO EXAMINE WH ETHER IN FACT THEY HAVE APPLIED FOR ALLOTMENT OF SHARES, THE EXISTENCE ITSE LF IS NOT PROVED. THE EXISTENCE OF A PERSON IS NOT MERELY ON PAPER. PARTI CULARLY WHEN THE AO REQUIRED THE ASSESSEE TO PRODUCE THE SHARE APPLICAN TS AND PARTICULARLY WHEN AT THE STATED ADDRESS THE SHARE APPLICANTS DO NOT F OUND TO BE EXISTING, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED BY ASSESSEE IS PROVED TO BE TOWARDS SHARE CAPITAL. THE TRANSACTION CANNOT BE PROVED MER ELY ON PAPER. NEITHER BEFORE AO NOR BEFORE LD. CIT (A) THE ASSESS EE COULD MAKE THE SHARE APPLICANTS AVAILABLE. THEREFORE WHEN THE IDENTITY OF THE PERSON ITSELF I S NOT PROVED, THE AMOUNT RECEIVED BY ASSESSEE CANNOT BE C ONSIDERED TO BE GENUINELY RECEIVED. 6.1. IT IS ALSO TO BE NOTED THAT THE ASSESSEE COMPA NY IS STATED TO HAVE ISSUED SHARES AT PREMIUM 9 TIMES ITS FACE VALUE. THE ASSES SEE IS A PRIVATE LIMITED COMPANY. IT HAS NOT ISSUED PROSPECTUS FOR ISSUE OF SHARES NOR UNDER THE COMPANIES ACT 1956, IT CAN INVITE THE PUBLIC TO APPLY FOR AND AL LOT THE SHARES. THE COMPANY IS PROHIBITED FROM MAKING ANY I NVITATION FOR ALLOTMENT OF SHARES. HOW THE PREMIUM WAS FIXED IS NOT FORTH COMI NG. LOOKING TO THE BALANCE SHEET OR PAST HISTORY OF ASSESSEE, THE ASSE SSEE COMPANY HAS NEVER DECLARED DIVIDEND IN THE PAST. THE COMPANY HAS NO B USINESS PLANS WHICH CAN RAISE ITS PROFITABILITY IN THE NEAR FUTURE. THE INC OME DECLARED BY THE ASSESSEE IS ONLY BY WAY OF SHORT TERM CAPITAL GAIN AND THE A SSESSEE DO NOT SEEM TO HAVE CARRIED ON ANY BUSINESS. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 134 ASSTT. YEAR 2005-06 IN SUCH CIRCUMSTANCES THE SHARE PREMIUM IS NOT FOUND TO BE JUSTIFIED BY ANY OF THE ACT ON THE PART OF ASSES SEE. THESE FACTS ARE REVEALING MORE THAN THE APPARENT SHOWN ON THE PAPER. ALL THES E FACTS PUT TOGETHER REVEAL THAT NEITHER THE IDENTITY OF THE SHARE APPLICANTS A RE PROVED NOR JUSTIFICATION FOR SHARE PREMIUM HAS BEEN PROVED. IN SUCH CIRCUMSTANCE S THE COURT CANNOT PUT BLINKER ON THE EYE AND LOOK ONLY AT THE PAPERS PRES ENTED BEFORE IT. THERE IS SOMETHING MORE THAN THAT MEETS THE EYE. AS RIGHTLY CONTENDED BY LD. DR IN SUCH SITUATION THE OBSERVATION OF HON'BLE SUPREME C OURT IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 AND IN THE CASE OF SUMATI DAYAL VS. CIT 214 ITR 801 ARE APT FOR APPLICATION. WE THEREFORE D O NOT FIND ANY REASON TO HOLD THAT THE SHARE CAPITAL RECEIPTS BY ASSESSEE WE RE FROM PERSONS WHOSE IDENTITY IS ESTABLISHED AND THE AMOUNT IS GENUINELY RECEIVED TOWARDS SHARE CAPITAL. 5.10 IN A RECENT DECISION IN CASE OF PRINCIPAL COMM ISSIONER OF INCOME VS BIKRAM SINGH IN ITA 55/2017, THE HONBLE HIGH COURT OF DE LHI HELD ON 25 AUGUST, 2017 AS UNDER:- 25. THE LAW APPLICABLE TO TRANSACTIONS OF THIS NATU RE IS WELL SETTLED BY THIS COURT IN DIVINE LEASING (SUPRA). BOTH PARTIES HAVE REFERRED TO AND RELIED UPON THIS JUDGMENT. THIS COURT, AFTER ANALYZING THE ENTIRE LAW ON THE SUBJECT IN THE CONTEXT OF SECTION 68 OF THE ACT, HELD AS UNDER: '...16. IN THIS ANALYSIS, A DISTILLATION OF THE PRE CEDENTS YIELDS THE FOLLOWING PROPOSITIONS OF LAW IN THE CONTEXT OF SECTION 68 OF THE IT ACT. THE ASSESSEE HAS TO PRIMA FACIE PROVE (1) THE IDENTITY OF THE CREDIT OR/SUBSCRIBER; (2) THE GENUINENESS OF THE TRANSACTION, NAMELY, WHETHER IT HAS BEEN TRANSMITTED THROUGH BANKING OR OTHER INDISPUTABLE CHANNELS; (3) THE CREDITWORTHINESS OR FINANCIAL STRENGTH OF THE CREDITOR/SUBSCRIBER. (4) IF RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONG WITH COPIES OF THE SHAREHOLDERS RE GISTER, SHARED APPLICATION FORMS, SHARE TRANSFER REGISTER ETC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE A SSESSEE. (5) THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADV ERSE INFERENCE ONLY BECAUSE THE CREDITOR/SUBSCRIBER FAILS OR NEGLECTS T O RESPOND TO ITS NOTICES; (6) ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 135 THE ONUS WOULD NOT STAND DISCHARGED IF THE CREDITOR /SUBSCRIBER DENIES OR REPUDIATES THE TRANSACTION SET UP BY THE ASSESSEE N OR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT, WITHOUT MORE, AGAINST THE ASSESEE. (7) THE ASSESSING OFFICER IS DUTY-BOUND TO INVESTIG ATE THE CREDITWORTHINESS OF THE CREDITOR /SUBSCRIBER THE GENUINENESS OF THE TRA NSACTION AND THE VERACITY OF THE REPUDIATION....' 26. IN DIVINE LEASING (SUPRA), ON THE QUESTION OF B URDEN OF PROOF, THE COURT RELIED UPON CIT V. MUSADDILAL RAM BHAROSE , (1987) 165 ITR 14, TO HOLD THAT THE INITIAL BURDEN IS UPON THE ASSESSEE TO SHOW THE ABSENCE OF FRAUD AND THIS IS NOT DISCHARGED BY THE ASSESSEE TENDERING AN INCREDI BLE AND FANTASTIC EXPLANATION. THE COURT ALSO HELD THAT EVERY EXPLANA TION GIVEN BY THE ASSESSEE NEED NOT BE ACCEPTED. 27. IN KAMDHENU (SUPRA), THIS COURT CATEGORICALLY H ELD THAT THE INITIAL BURDEN LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY OF T HE SHAREHOLDERS, THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHI NESS OF THE SHAREHOLDERS. IT IS ONLY AFTER THE INITIAL BURDEN IS DISCHARGED THAT THE ONUS SHIFTS TO THE REVENUE. THIS COURT IN KAMDHENU (SUPRA) REFERRED TO CIT V. SOPHIA FINANCE , 205 ITR 98 WHICH HAD HELD TO THE SAME EFFECT. THE D IVINE LEASING (SUPRA) AND SOPHIA FINANCE (SUPRA) JUDGMENTS WERE REITERATED BY THIS COURT IN DWARKADHISH (SUPRA). THUS, THE LAW IN RELATION TO SECTION 68 IS WELL SETTLED. ................................................... ................................................... ........................ . 43. THE TRANSACTIONS IN THE PRESENT APPEAL ARE YET ANOTHER EXAMPLE OF THE CONSTANT USE OF THE DECEPTION OF LOAN ENTRIES TO BR ING UNACCOUNTED MONEY INTO BANKING CHANNELS. THIS DEVICE OF LOAN ENTRIES CONTI NUES TO PLAGUE THE LEGITIMATE ECONOMY OF OUR COUNTRY. AS SEEN FROM THE FACTS NARRATED ABOVE, THE TRANSACTIONS HEREIN CLEARLY DO NOT INSPIRE CONF IDENCE AS BEING GENUINE AND ARE SHROUDED IN MYSTERY, AS TO WHY THE SO-CALLED CR EDITORS WOULD LEND SUCH HUGE UNSECURED, INTEREST FREE LOANS - THAT TOO WITH OUT ANY AGREEMENT. IN THE ABSENCE OF THE SAME, THE CREDITORS FAIL THE TEST OF CREDITWORTHINESS AND THE TRANSACTIONS FAIL THE TEST OF GENUINENESS. 5.11 IN MY CONSIDERED VIEW, THE TECHNICAL OBJECTION S RAISED BY THE APPELLANT IN RESPECT OF LOAN FROM M/S JALSAGAR COMMERCE PVT. LTD . ARE OF NO AVAIL TO THE APPELLANT DUE TO FOLLOWING UNDISPUTED FACTS:- ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 136 I. IT IS UNDISPUTED FACT THAT THE INCOME TAX DEPART MENT HAS MADE TREMENDOUS INVESTIGATIONS IN SUCH SHELL COMPANIES O F KOLKATA, MUMBAI AND DELHI PROVIDING ACCOMMODATION ENTRY AND STATEMENTS MADE BY SEVERAL ACCOMMODATION ENTRY PROVIDERS HAVE BECOME VIRTUALLY IN PUBLIC DOMAIN. IT IS NO ARGUMENT THAT THE AO DID NOT PROVIDE SUCH STATEM ENT BEFORE THE ASSESSEMENT OR IN ANY OF THE NOTICES. THESE FACTS W ERE WELL KNOWN TO THE APPELLANT GROUP AND IGNORANCE IS MERE PRETENCE. II. MOREOVER, SUCH STATEMENTS ARE SO VOCAL AND UNDE NIABLE THAT AS MENTIONED IN SOME OF THE CASE LAWS ABOVE, CROSS-EXA MINATION OF SUCH ACCOMMODATION ENTRY PROVIDES BY THOUSANDS OF BENEFI CIARIES ACROSS INDIA IS NEITHER PRACTICABLE NOR VIABLE AND THEREFORE UNCALL ED FOR. III. IT IS UNDISPUTED FACT THAT IN THE STATEMENT DA TED 06.02.2014 SHRI ANAND SHARMA HAD ADMITTED TO BE ONE OF SUCH ACCOMMO DATION ENTRY PROVIDERS. THE SUM AND SUBSTANCE OF THE SAID STATEM ENT IS THAT THE CONCERN M/S JALSAGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTI VITIES OF PROVIDING ACCOMMODATION ENTRIES AND THE APPELLANT HAPPENED TO BE ONE OF SUCH BENEFICIARY OF SUCH CONCERN. IT IS ALSO ADMITTED FA CT THAT SHRI ANAND SHARMA HAD BEEN RUNNING THE AFFAIR OF THE SAID COMPANY. V. THE STATEMENT OF SHRI ANAND SHARMA IN WHICH NAM E OF M/S JALSAGAR COMMERCE PVT. LTD. CANNOT BE COMPLETELY IGNORED SO LELY ON THE LEGAL GROUNDS RAISED BY THE APPELLANT. 5.12 IN VIEW OF ABOVE DISCUSSION, IT IS CLEAR THAT THE INCRIMINATING MATERIAL HAD BEEN FOUND DURING THE COURSE OF SEARCH OF ACCOMMODA TION ENTRY PROVIDER. FURTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DDIT (INV.) KOLKATA, DURING THE ASSESSMENT PROCEEDINGS AND ALL SUCH MATERIAL HAVE BEEN SHARED WITH THE APPELLANT AT LEAST DURING THE REMAND REPOR T PROCEEDING. IN VIEW OF NATION-WIDE KNOWN SCAM BY THE ACCOMMODATION ENTRY PROVIDERS OF KOLKATA AND ELSEWHERE BURST BY THE INCOME TAX DEPARTMENT, THERE WAS NO NEED TO PRO VIDE OPPORTUNITY FOR CROSS- EXAMINATION OF SAME ACCOMMODATION ENTRY PROVIDERS. ANY WAY IN THE REJOINDER SUBMISSION TO REMAND REPORT THE APPELLANT IS ABSOLU TELY SILIENT ON CROSS-EXAMINATION AND BY SUCH CONDUCT HE HAS FORGONE HIS RIGHT TO CRO SS-EXAMINE. THEREFORE, THE PRINCIPLES OF NATURAL JUSTICE HAVE BEEN FOLLOWED. A S DISCUSSED IN PRECEDING PARAS, UNDER THE FACTS AND CIRCUMSTANCE OF THE CASE, IT CO ULD NOT BE SAID THAT AO DID NOT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 137 FOLLOWED THE BINDING DECISION OF THE HONBLE SUPREM E COURT AND THE HONBLE JURISDICTION COURT. THEREFORE, IN VIEW OF ABOVE FAC TS DISCUSSED IN PARA 4.1 & 4.4.7, 5.1 TO 5.3 AND LEGAL POSITION APPRISED IN PARA 5.5 TO 5 .11 ABOVE, IT IS HELD THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS AMOUNT ING TO RS. 12,36,49,999/- FROM M/S JALSAGAR COMMERCE PVT. LTD. SUSTAINABLE AND TH E SAME IS CONFIRMED. THUS THE ADDITION WAS CONFIRMED BASED ON THE REPORT OF THE DDIT (INV.) KOLKATA. WE FIND THAT THE REPORT OF THE DDIT (INV. ) KOLKATA IS ALSO BASED ON THE STATEMENTS OF VARIOUS PERSONS RECORDED DURING T HEIR INVESTIGATION AND THE STATEMENT OF SHRI ANAND SHARMA WAS ALSO SENT ALONG WITH THE REPORT OF THE AO. THE LD. CIT (A) HAS CONFIRMED THE ADDITION BEC AUSE OF THE REASON THAT THE STATEMENT OF SHRI ANAND SHARMA WAS VERY MUCH IN THE POSSESSION OF THE AO WHO HAS ADMITTED IN HIS STATEMENT THAT M/S. JALS AGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODAT ION ENTRY. HOWEVER, WE FIND THAT M/S. JALSAGAR COMMERCE PVT. LTD IS NOT MA NAGED OR CONTROLLED BY SHRI ANAND SHARMA, RATHER THE COMPANY M/S. ROYAL CR YSTAL DEALERS PVT. LTD. WAS STATED TO HAVE BEEN OWNED BY SHRI ANAND SHARMA AND IN HIS STATEMENT DATED 6 TH FEBRUARY, 2014 SHRI ANAND SHARMA HAS STATED TO HAV E BEEN PROVIDING ENTRIES FROM M/S. ROYAL CRYSTAL DEALERS P VT. LTD. TO M/S. JALSAGAR COMMERCE PVT. LTD. THEREFORE, THERE IS NO ALLEGATI ON OR ANY ADMISSION IN THE STATEMENT OF SHRI ANAND SHARMA THAT HE HAS PROVIDED BOGUS LOAN ENTRY TO THE ASSESSEE OR ANY GROUP CONCERNS OF THE ASSESSEE. SI NCE THE NAME OF M/S. JALSAGAR COMMERCE WAS CREPTED IN HIS STATEMENT, THE AO HAS PRESUMED THAT THE LOAN PROVIDED BY M/S. JALSAGAR COMMERCE PVT. LT D IS NOTHING BUT THE BOGUS ACCOMMODATION ENTRY PROVIDED BY SHRI ANAND SH ARMA THROUGH M/S. ROYAL CRYSTAL DEALERS PVT. LTD. THE AO HAS TRIED T O ESTABLISH THE NEXUS OF THE LOAN RECEIVED BY THE ASSESSEE THROUGH THE STATEMENT OF SHRI ANAND SHARMA WHERE HE HAS PURPORTED TO HAVE PROVIDED THE ALLEGED ENTRY. SINCE THERE IS NO DIRECT ALLEGATION OR ADMISSION OF PROVIDING LOAN BY SHRI ANAND SHARMA TO THE ASSESSEE THROUGH M/S.ROYAL CRYSTAL DEALERS PVT. LTD ., THEN EVEN IF THERE IS A POSSIBILITY OF BOGUS ACCOMMODATION ENTRY ROUTED THR OUGH ANOTHER INTERMEDIARY COMPANY M/S.JALSAGAR COMMERCE PVT. LTD ., IT REQUIRES A DEFINITE LINK OF THE TRANSACTIONS FROM M/S.ROYAL CRYSTAL DEA LERS PVT. LTD. TO M/S.JALSAGAR COMMERCE PVT. LTD. AND THEN THE LOAN T O THE ASSESSEE. ONCE THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 138 CHAIN OF TRANSACTIONS AND FLOW OF MONEY FROM ONE EN TITY TO ANOTHER ENTITY AND FINALLY TO THE ASSESSEE HAS NOT BEEN ESTABLISHED, T HEN THE ADDITION MADE MERELY ON SUSPICION, HOW SO STRONG IT MAY BE, IS NO T SUSTAINABLE. ON THE CONTRARY, WHEN THE ASSESSEE PRODUCED ALL THE RELEVA NT RECORD WHICH CONTAINS THEIR FINANCIAL STATEMENTS, BANK ACCOUNTS STATEMENT OF LOAN CREDITOR, RETURN OF INCOME, ASSESSMENT ORDERS FRAMED UNDER SECTION 143( 3), CONFIRMATION OF THE LOAN CREDITOR, THEN A PROPER EXAMINATION COULD HAVE VERY WELL ESTABLISHED THE LINK, IF ANY, IN PROVIDING THE ACCOMMODATION ENTRY FROM ONE ENTITY TO ANOTHER AND FINALLY TO THE ASSESSEE. HOWEVER, NO SUCH LINK WAS FOUND IN THE DOCUMENTS AND FINANCIAL STATEMENTS OF THESE COMPANI ES, RATHER IN THE BANK ACCOUNT STATEMENT OF LOAN CREDITOR M/S. JALSAGAR CO MMERCE PVT. LTD. THERE WAS NO SUSPICIOUS TRANSACTION OF RECEIVING ANY ENTR Y OR ANY DEPOSIT OF AN EQUAL AMOUNT PRIOR TO GIVING THE LOAN TO THE ASSESS EE. THE ASSESSEE HAS PAID INTEREST TO THE CREDITOR, WHICH WAS DULY ACCEPTED B Y THE AO AS BUSINESS EXPENDITURE. UNDISPUTEDLY, THE ASSESSEE HAS PRODUC ED THE INCOME-TAX RECORD OF THE LOAN CREDITOR, BANK STATEMENT, FINANCIAL STA TEMENTS INCLUDING BALANCE SHEET, COPY OF ROC MASTER DATA SHOWING THE STATUS O F LOAN CREDITOR COMPANY AS ACTIVE, CONFIRMATION OF LOAN GIVEN TO THE ASSE SSEE. FURTHER, THE AO ISSUED SUMMONS AND ALSO GOT THE SUMMONS SERVED THRO UGH DDIT KOLKATA UNDER SECTION 131 OF THE IT ACT WHICH WERE DULY RES PONDED BY THE LOAN CREDITOR. EXCEPT THE STATEMENT OF SHRI ANAND SHARMA AND THE REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL TO CONTROVERT OR DISPROVE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE LOAN CR EDITOR WAS ASSESSED TO TAX AND THE AO COMPLETED THE ASSESSMENT UNDER SECTION 1 43 (3) FOR VARIOUS ASSESSMENT YEARS WHICH ARE RELEVANT FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION. THE AO IN CASE OF LOAN CREDITOR HA S NOT DISTURBED THE TRANSACTIONS OF LOAN GIVEN BY THIS COMPANY TO THE A SSESSEE. FROM THE FINANCIAL STATEMENTS OF THE LOAN CREDITOR IT IS APP ARENT THAT THE LOAN CREDITOR WAS HAVING SUFFICIENT FUNDS TO ADVANCE THE LOAN AMO UNT TO THE ASSESSEE AND ONCE THE SAID FINANCIAL STATEMENTS WERE NOT DISTURB ED, THEN THE CREDITWORTHINESS OF THE LOAN CREDITOR CANNOT BE DOU BTED WHEN IT WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE IT ACT. WE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 139 FURTHER NOTE THAT THE AO INSISTED THE ASSESSEE TO P RODUCE THE DIRECTORS OF THE LOAN PROVIDER COMPANY. THE ASSESSEE PRODUCED THE A FFIDAVIT, AND THE NOTICES ISSUED BY THE AO UNDER SECTION 131 AND 133(6) OF TH E ACT WERE DULY COMPLIED WITH BY THE CREDITOR. THE STATEMENT OF THE DIRECTOR OF M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS ALSO RECORDED BY THE AO WHERE IN THE DIRECTOR HAS CONFIRMED THE TRANSACTION OF LOAN. THERE ARE VARIOU S REPORTS OF THE DDIT KOLKATA WHICH ARE PLACED AT PAGES 406 TO 422 OF THE PAPER BOOK. WE FIND THAT ALL THESE REPORTS ARE BASED ON THE STATEMENTS RECOR DED DURING THE INVESTIGATION BUT NO DOCUMENTARY EVIDENCE WAS EITHE R GATHERED OR HAS BEEN REFERRED IN THESE REPORTS. THEREFORE, EVEN IF THES E REPORTS ARE TO BE TAKEN INTO CONSIDERATION, THESE ARE NOTHING BUT NARRATION OF T HE STATEMENTS OF VARIOUS PERSONS TAKEN DURING THE INVESTIGATION. IT IS WELL SETTLED PRINCIPLE AS WELL AS THE DIRECTIONS OF THE CBDT ISSUED UNDER THE CIRCULA RS THAT DURING THE COURSE OF INVESTIGATION, THE DEPARTMENT SHOULD CONCENTRATE AN D FOCUS ON COLLECTING DOCUMENTARY EVIDENCE DISCLOSING UNDISCLOSED INCOME INSTEAD OF OBTAINING THE STATEMENT AND THEN SUPPORT OF THEIR CLAIM MERELY ON THE BASIS OF THE STATEMENT. THEREFORE, THE STATEMENTS RECORDED BY T HE DDIT KOLKATA ARE ALSO NOT BASED ON ANY DOCUMENTARY EVIDENCE SO AS TO HAVE AN EVIDENTIARY VALUE FOR SUSTAINING THE ADDITIONS MADE BY THE AO. THE EN TIRE REPORT OF THE INVESTIGATION WING IS BASED ON STATEMENTS RECORDED DURING SURVEY AND SEARCH. ONCE THE ASSESSEE HAS PRODUCED THE DOCUMENTARY EVID ENCE AND PARTICULARLY THE FINANCIAL STATEMENTS OF THE LOAN CREDITORS, THE IR BANK ACCOUNT STATEMENT, THEN IN THE ABSENCE OF ANY DISCREPANCY OR FAULT IN THESE FINANCIAL STATEMENTS OR IN THE BANK ACCOUNT STATEMENT TO REFLECT THAT TH E TRANSACTIONS IN QUESTION ARE NOTHING BUT BOGUS ACCOMMODATION ENTRIES, THE AD DITION MADE BY THE AO IS NOT SUSTAINABLE AS IT IS MERELY ON THE BASIS OF SUR MISES AND CONJECTURES AND NOT ON ANY TANGIBLE MATERIAL DISCLOSING THE NON-GEN UINENESS OF THE TRANSACTIONS. THE AO HAS NOT DISPUTED THE TRANSACT IONS ROUTED THROUGH BANKING CHANNEL HAVING SUFFICIENT FUNDS WHICH IS AL SO SUPPORTED BY THE FINANCIAL STATEMENTS AND FURTHER THE ASSESSMENTS OF THE LOAN CREDITOR WERE COMPLETED UNDER SECTION 143(3). THE DETAILS OF LOA NS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD., INTERESTS CREDITED/PAI D AND REPAYMENT OF LOAN AMOUNT AS WELL AS CLOSING BALANCE ARE AS UNDER :- ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 140 NAME OF COMPANY AY OPENING BALANCE LOAN TAKEN DURING THE YEAR INTEREST CREDITED IN LOAN A/C DURING THE YEAR INTEREST CREDITED IN INTEREST PAID /PAYABLE A/C LOAN REPAYMENT/ TDS/TRANSFER IN PARTNER CAPITAL DURING THE YEAR CLOSING BALANCE JALSAGAR COMMERCE PRIVATE LTD 10-11 41,298 34,70,40,000 13,96,176 12,56,558 34,21 ,15,916 51,05,000 JALSAGAR COMMERCE PRIVATE LTD 11-12 51,05,000 77,18,70,000 16,71,599 15,04,439 77 ,18,37,160 53,05,000 JALSAGAR COMMERCE PRIVATE LTD 12-13 53,05,000 78,95,00,000 1,07,08,434 96,37,591 31,72,80,655 47,85,95,188 JALSAGAR COMMERCE PRIVATE LTD 13-14 47,85,95,1 88 2,76,31,50,00 0 0 0 2,97,53,40,000 26,64,05,188 JALSAGAR COMMERCE PRIVATE LTD 14-15 26,64,05,1 88 97,34,50,000 0 0 1,24,03,55,188 (5,00,000) JALSAGAR COMMERCE PRIVATE LTD 15-16 0 1,34,89,00,00 0 49,00,600 44,10,540 1,34,93,90,060 0 JALSAGAR COMMERCE PRIVATE LTD 16-17 0 87,11,00,000 1,67,23,178 1,50,50,860 87,27, 72,318 0 ALL THESE DETAILS WERE BEFORE THE AO AS ALL THESE A SSESSMENT YEARS WERE PASSED BY THE AO PURSUANT TO THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE IT ACT. THUS IT IS CLEAR THAT FOR THE ASSES SMENT YEAR 2015-16 THERE WAS NIL BALANCE ON ACCOUNT OF LOAN TAKEN FROM M/S. JALS AGAR COMMERCE PVT. LTD. AND THE ENTIRE LOAN WAS ALREADY REPAID BY THE ASSES SEE. WE FURTHER NOTE THAT IT IS NOT THE CASE OF REPAYMENT OF LOAN AFTER THE S EARCH ACTION ON 2 ND JULY, 2015 BUT THERE IS A REGULAR REPAYMENT OF LOAN FOR E ACH YEAR AS IT IS EVIDENT FROM THE DETAILS REPRODUCED ABOVE. THEREFORE, THE TRANSACTIONS OF TAKING LOAN AND REPAYMENT CANNOT BE TREATED AS BOGUS ONCE THE A SSESSEE HAS BEEN REGULARLY REPAYING THE LOAN AMOUNT AND SMALL BALANC E WAS THERE AT THE END OF THE YEAR. ONCE THERE WAS NO BALANCE AT THE END OF THE YEAR ON THE LOAN ACCOUNT, THEN THE ADDITION CANNOT BE MADE BY TREATI NG THE LOAN TAKEN AND REPAID AS BOGUS TRANSACTION. APART FROM THESE FAC TS, THE ASSESSEE HAS ALSO MADE THE PAYMENT OF INTEREST WHICH WAS ALSO SUBJECT ED TO TDS. THIS SHOWS THE GENUINENESS OF THE TRANSACTIONS AND ALL THESE T RANSACTIONS HAVE TAKEN PLACE PRIOR TO THE DATE OF SEARCH AND DULY RECORDED IN THE BOOKS OF ACCOUNTS AND ALSO SUBJECTED TO ASSESSMENT UNDER SECTION 143( 3) FOR SOME OF THE ASSESSMENT YEARS. THEREFORE, EVEN AS PER THE EVIDEN CE PRODUCED BY THE ASSESSEE, THE ALLEGED SUSPICION OF THE AO WAS GOT D ISPELLED AND IN THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 141 ABSENCE OF ANY CONTRARY EVIDENCE EXCEPT THE STATEME NT WHICH IS NOT EVEN A CONCLUSIVE PROOF OF TRANSACTION OF BOGUS ENTRY TO T HE ASSESSEE, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. 11.1. EVEN OTHERWISE, THE ASSESSMENT ORDER IS SOLEL Y BASED ON THE REPORT OF THE INVESTIGATION WING KOLKATA WHICH IN TURN IS NOT HING BUT THE NARRATION OF THE STATEMENTS RECORDED DURING THE INVESTIGATION AN D THE AO WAS HAVING IN POSSESSION THE STATEMENT OF ONLY SHRI ANAND SHARMA. THEREFORE, ALL THESE PROCEEDINGS CONDUCTED BY THE INVESTIGATION WING KOL KATA WERE AT THE BACK OF THE ASSESSEE AND HENCE THE STATEMENT WHICH IS THE F OUNDATION OF THE REPORT OF THE INVESTIGATION WING KOLKATA AS WELL AS THE ASSES SMENT ORDER CANNOT BE ACCEPTED IN THE ABSENCE OF GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS INSISTED F OR CROSS EXAMINATION DURING THE ASSESSMENT PROCEEDINGS AND FURTHER DURING THE A PPELLATE PROCEEDINGS. THE LD.CIT(A) EVEN CALLED FOR A REMAND REPORT AND D IRECTED THE AO TO ALLOW CROSS EXAMINATION TO THE ASSESSEE. HOWEVER, THE AO HAS EXPRESSED HIS INABILITY TO ALLOW THE ASSESSEE CROSS EXAMINATION O F THE WITNESSES DUE TO THE REASON THAT THE WITNESSES BELONG TO KOLKATA AND IT IS NOT POSSIBLE FOR AO TO MAKE SUCH ARRANGEMENT. THE LD. CIT(A) HAS FINALLY D ENIED THE CROSS EXAMINATION TO THE ASSESSEE BY GIVING HIS FINDING I N PARA 5.11 AT PAGE 188 ALREADY REPRODUCED IN THE EARLIER PART OF THIS ORDE R AND, THEREFORE, THE ONLY REASON FOR DENIAL OF CROSS EXAMINATION BY THE LD.CI T(A) IS THAT THE STATEMENTS ARE SO VOCAL AND UNDENIABLE THAT CROSS EXAMINATION OF SUCH ACCOMMODATION ENTRY PROVIDED BY THOUSANDS OF BENEFICIARIES ACROSS INDIA IS NEITHER PRACTICABLE NOR VIABLE AND THEREFORE UNCALLED FOR. WE FIND THA T THE ASSESSEE HAS DEMANDED THE CROSS EXAMINATION ONLY IN RESPECT OF T HE ALLEGED TRANSACTIONS OF LOANS AND NOT FOR THE ENTIRE BUSINESS OF THE ENTRY PROVIDERS PROVIDING THE BOGUS ENTRIES. UNDISPUTEDLY, THE STATEMENT OF SHRI ANAND SHARMA WAS RECORDED BY THE INVESTIGATION WING KOLKATA AT THE B ACK OF THE ASSESSEE, EVEN THE PROCEEDINGS BY THE INVESTIGATION WERE CONDUCTED AT THE BACK OF THE ASSESSEE, THEREFORE, THE SAID STATEMENT OF SHRI ANA ND SHARMA CANNOT BE THE SOLE BASIS OF ASSESSMENT WITHOUT GIVING AN OPPORTUN ITY OF CROSS EXAMINATION TO THE ASSESSEE. THE HONBLE SUPREME COURT IN THE CA SE OF ANDAMAN TIMBER INDUSTRIES VS. CCE (SUPRA) WHILE DEALING WITH THE I SSUE OF VIOLATION OF ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 142 PRINCIPLES OF NATURAL JUSTICE FOR NOT PROVIDING THE OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED ON BY THE AO HAS HELD IN PARA 6 TO 9 AS UNDER :- 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS F LAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTE D. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON T HE STATEMENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOUL D BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHO RITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAV E BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT T HEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS N OT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WAN TED FROM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNIT Y OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIE D UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OFLEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID DEALERS.WITNESSES AT THE PRICE WHICH IS MENTIONED IN THE PRICE LIST ITSELF C OULD BE THE SUBJECT-MATTER OF CROSS-EXAMINATION. THEREFORE, IT WAS NOT FOR THE AD JUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT-MATTER O F THE CROSS-EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALS O POINT OUT THAT ON AN EARLIER OCCASION WHEN THE MATTER CAME UP BEFORE THI S COURT IN CCE V. ANDAMAN TIMBER INDUSTRIES LTD., ORDER DATED 17.3.20 05 WAWS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DI RECTIONS TO DECIDE THE APPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING O R REJECTING THE SUBMISSIONS. 8. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MA TERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUI NG THE SHOW-CAUSE NOTICE. 9. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. NO COSTS. ONCE THE ASSESSEE HAS DISPUTED THE CORRECTNESS OF T HE STATEMENT AND WANTED TO CROSS EXAMINE THE WITNESS WHICH WAS NOT GIVEN BY THE AO AS WELL AS LD. CIT (A), THEN THE ORDERS PASSED BASED ON SUCH STATEMENT ARE NOT SUSTAINABLE IN ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 143 LAW. THE HONBLE DELHI HIGH COURT IN CASE OF CIT V S. ASHWANI GUPTA, 322 ITR 396 (DELHI) WHILE DEALING WITH THE ISSUE OF NOT PRO VIDING THE OPPORTUNITY TO CROSS EXAMINE THE WITNESSES HAS HELD IN PARA 5 TO 7 AS UNDER :- 5. SECONDLY, IN FACT, A RECTIFICATION APPLICATION BEI NG MA 264/DELHI/2008 UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961 HA D BEEN FILED BY THE REVENUE BEFORE THE SAID TRIBUNAL. IN THAT ALSO, IN PARAGRAPH ( G ) OF THE MISCELLANEOUS APPLICATION, THE REVENUE HAD SUBMITTE D AS UNDER: '( G )BECAUSE, ALTHOUGH FINDINGS OF THE TRIBUNAL ARE FACTUALLY COR RECT BUT THE DECISION OF THE TRIBUNAL IS NOT ACCEPTABLE BECAUSE VIOLATION OF THE CANONS OF NATURAL JUSTICE IN ITSELF IS NOT FATA L ENOUGH SO AS TO JEOPARDIZE THE ENTIRE PROCEEDINGS. IN THE INTEREST OF JUSTICE, THE TRIBUNAL COULD HAVE SET ASIDE THE ASSESSMENT ORDER WITH THE LIMITED PURPOSE OF OFFERING ASSESSEE AN OPPORTUNITY TO CROS S-EXAMINE SHRI MANOJ AGGARWAL BEFORE COMPLETING THE PROCEEDINGS.' [EMPHASIS SUPPLIED] 6. A READING OF THE SAID PARAGRAPH ( G ) MAKES IT CLEAR THAT THE REVENUE HAD ACCEPTED THE FINDINGS OF THE TRIBUNAL ON FACTS AS A LSO THE POSITION THAT THERE HAD BEEN A VIOLATION OF PRINCIPLES OF NATURAL JUSTI CE. HOWEVER, THE REVENUE'S PLEA WAS THAT THE VIOLATION OF PRINCIPLES OF NATURA L JUSTICE WAS NOT FATAL SO AS TO JEOPARDIZE THE ENTIRE PROCEEDINGS. THE SAID MISCELL ANEOUS APPLICATION WAS ALSO REJECTED BY THE TRIBUNAL BY ITS ORDER DATED 28-11-2 008. 7. IN VIEW OF THE FOREGOING CIRCUMSTANCES, WE FEEL TH AT NO INTERFERENCE WITH THE IMPUGNED ORDER IS CALLED FOR. THE TRIBUNAL HAS CORRECTLY UNDERSTOOD THE LAW AND APPLIED IT TO THE FACTS OF THE CASE. ONCE T HERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MA TERIAL IS NOT PROVIDED TO AN ASSESSEE NOR IS CROSS-EXAMINATION OF THE PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER RELIES UPON, GRANTED, THEN, SUCH DEFICIENCIES WOULD AMOUNT TO A DENIAL OF OPPORTUNITY AND, CONSEQUENTLY, WOULD BE FATAL TO THE PROCEEDINGS. FOLLOWING APPROACH ADOPTED BY US IN SMC SHARE BROKERS LTD.'S CASE ( SUPRA ), WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDER ATION. THUS THE HONBLE HIGH COURT HAS HELD THAT ONCE THER E IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MA TERIAL IS NOT PROVIDED TO THE ASSESSEE NOR IS CROSS EXAMINATION OF THE PERSON ON WHOSE STATEMENT THE AO RELIED UPON, GRANTED, THEN, SUCH DEFICIENCIES WOULD AMOUNT TO DENIAL OF OPPORTUNITY AND CONSEQUENTLY WOULD BE FATAL TO THE PROCEEDINGS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA VS. ACI T, 387 ITR 561 (BOMBAY) HAS ALSO CONSIDERED THE ISSUE OF NOT PROVI DING OPPORTUNITY OF CROSS EXAMINATION IN PARA 11 TO 17 AS UNDER :- 11. WE HAVE THEREFORE PROCEEDED TO HEAR AND DECIDE THE MATTER UNASSISTED BY THE REVENUE. IN THE COURSE OF HIS SUBMISSIONS MR. T RALSHAWALA HAD PRESSED INTO SERVICE INTER ALIA THE DECISION OF THE CALCUTT A HIGH COURT IN MATHER & ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 144 PLATT (INDIA) LTD. ( SUPRA ) AND SUBMITTED THAT MERELY BECAUSE A PERSON IS NOT FOUND AT AN ADDRESS AFTER SEVERAL YEARS IT CANNOT B E HELD THAT HE IS NON EXISTENT AND THAT THE ASSESSEE HAD DISCHARGED HIS PRIMARY ON US BY IDENTIFYING THE SOURCE OF THE AMOUNT PAID. THE COURT OBSERVED THAT ONCE THE PRIMARY ONUS IS DISCHARGED, THE ONUS SHIFTED TO THE REVENUE TO VERI FY GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE NO SUCH EFFORT WAS MADE BY THE REVENUE. WE FIND THAT IN S. HASTIMAL ( SUPRA ) THE MADRAS HIGH COURT OBSERVED THAT AFTER A LAPSE OF SEVERAL YEARS THE ASSESSEE SHOULD NOT BE P LACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT ONLY MERELY, THE ORIGIN AND SOURCE OF HIS CAPITAL CONTRIBUTION BUT THE ORIGIN OF ORIGIN AND THE SOURC E OF SOURCE AS WELL. IN YET ANOTHER CASE OF BAHRI BROTHERS (P) LTD. ( SUPRA ) THE DIVISION BENCH OF PATNA HIGH COURT OBSERVED THAT WHERE THE ASSESSEE UPON WH OM THE INITIAL BURDEN LIES, PRODUCES BANK CERTIFICATE TO ESTABLISH THAT T HE TRANSACTION WAS CARRIED OUT THROUGH ACCOUNT PAYEE CHEQUES THUS DISCLOSING THE I DENTITY OF THE CREDITORS AS ALSO THE SOURCE OF INCOME, THE BURDEN SHIFTS ON TO THE DEPARTMENT AND THE DEPARTMENT CANNOT ADD THE CASH CREDITS TO HIS INCOM E FROM UNDISCLOSED SOURCE. 12. THE HON'BLE SUPREME COURT IN NEMI CHAND KOTHARI ( SUPRA ) OBSERVED THAT IN ORDER TO ESTABLISH THE RECEIPT OF A CASH CREDIT, THE ASSESSEE MUST SATISFY THREE CONDITIONS I.E. IDENTITY OF THE CREDITOR, GENUINENE SS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. IN THE INSTANT CA SE BY VIRTUE OF THE FACT THAT THE TRANSACTION WAS COMPLETED BY CHEQUE PAYMENTS, T HE APPELLANT HAS CONTENDED THAT IT HAD SATISFIED ALL THE THREE TESTS . 13. IN KISHANCHAND CHELLARAM ( SUPRA ) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECORDED THE S TATEMENT OF THE MANAGER OF THE BANK AND IT WAS DIFFICULT TO APPRECIATE AS TO W HY IT WAS NOT DONE AND WHY THE MATTER WAS NOT PROBED FURTHER BY THE REVENUE. 14. THE DELHI HIGH COURT IN ASHWANI GUPTA ( SUPRA )HELD THAT ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INAS MUCH AS WHEN ITS SEIZED MATERIAL WAS NOT PROVIDED TO AN ASSESSEE NOR WAS HE PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEMENT THE ASSESSING O FFICER RELIED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIAL OF OPPO RTUNITY AND THEREFORE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER SINCE THE AS SESSING OFFICER HAD FAILED TO PROVIDE COPIES OF SEIZED MATERIAL TO THE ASSESSE E NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE THE PARTY CONCERNED. THE DIVISION BENCH HELD THAT ONCE THERE IS VIOLATION OF THE PRINCIPLES OF NATURA L JUSTICE INASMUCH AS SEIZED MATERIAL WAS NOT PROVIDED TO THE ASSESSEE NOR WAS G IVEN OPPORTUNITY OF CROSS EXAMINING THE PERSON WHOSE STATEMENT WAS BEING USED AGAINST THE ASSESSEE THE ORDER COULD NOT BE SUSTAINED. 15. IN ANDAMAN TIMBER INDUSTRIES ( SUPRA ) THE SUPREME COURT FOUND THAT THE ADJUDICATING AUTHORITY HAD NOT GRANTED AN OPPORTUNI TY TO THE ASSESSEE TO CROSS EXAMINE THE WITNESSES AND THE TRIBUNAL MERELY OBSER VED THAT THE CROSS EXAMINATION OF THE DEALERS IN THAT CASE, COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT OTHERWISE BE IN POSSESSION OF THE APPELLANT- ASSESSEE. THE SUPREME COURT SET ASIDE THE IMPUGNED ORDER AND OBSERVED THAT IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUP POSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS EXAMINATION AND MAK E THE REMARKS SUCH AS WAS DONE IN THAT CASE. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 145 16. IN THE INSTANT CASE ALTHOUGH THE APPELLANT ASSESSE E HAS CALLED UPON US TO DRAW AN INFERENCE THAT THE BURDEN SHIFTED TO THE RE VENUE IN THE PRESENT CASE ONCE IT WAS ESTABLISHED THAT THE PAYMENTS WERE MADE AND REPAID BY CHEQUE WE NEED NOT HASTEN AND ADOPT THAT VIEW AFTER HAVING GI VEN OUR THOUGHT TO VARIOUS ISSUES RAISED AND THE DECISIONS CITED BY MR.TRALSHA WALLA AND FINDING THAT ON A VERY FUNDAMENTAL ASPECT, THE REVENUE WAS NOT JUSTIF IED IN MAKING ADDITION AT THE TIME OF REASSESSMENT WITHOUT HAVING FIRST GIVEN THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE THE DEPONENT ON THE ST ATEMENTS RELIED UPON BY THE ACIT. QUITE APART FROM DENIAL OF AN OPPORTUNITY OF CROSS EXAMINATION, THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BA SIS OF WHICH THE DEPARTMENT SOUGHT TO CONCLUDE THAT THE LOAN WAS A B OGUS TRANSACTION. 17. IN OUR VIEW IN THE LIGHT OF THE FACT THAT THE MONI ES WERE ADVANCED APPARENTLY BY THE ACCOUNT PAYEE CHEQUE AND WAS REPA ID VIDE ACCOUNT PAYEE CHEQUE THE LEAST THAT THE REVENUE SHOULD HAVE DONE WAS TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO MEET THE CASE AGAINS T HIM BY PROVIDING THE MATERIAL SOUGHT TO BE USED AGAINST ASSESSEE IN ARRI VING BEFORE PASSING THE ORDER OF REASSESSMENT. THIS NOT HAVING BEEN DONE, THE DEN IAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT AND THEREFORE RENDERS THE ORDERS PASSE D BY THE CIT (A) AND THE TRIBUNAL VULNERABLE. IN OUR VIEW THE ASSESSEE WAS B OUND TO BE PROVIDED WITH THE MATERIAL USED AGAINST HIM APART FROM BEING PERM ITTING HIM TO CROSS EXAMINE THE DEPONENTS. DESPITE THE REQUEST DATED 15 TH FEBRUARY, 1996 SEEKING AN OPPORTUNITY TO CROSS EXAMINE THE DEPONENT AND FU RNISH THE ASSESSEE WITH COPIES OF STATEMENT AND DISCLOSE MATERIAL, THESE WE RE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE ARE INCLINED TO ALLOW THE APP EAL ON THIS VERY ISSUE. THUS THE DENIAL OF OPPORTUNITY TO CROSS EXAMINE WAS CONSIDERED BY THE HONBLE HIGH COURT WHICH GOES TO THE ROOT OF THE MA TTER AND STRIKES AT THE VERY FOUNDATION OF THE ASSESSMENT AND, THEREFORE, R ENDERS THE ASSESSMENT ORDER PASSED BY THE AO NOT SUSTAINABLE. THE LD. A/ R HAS SUBMITTED THAT COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DC IT VS. SHRI PRATEEK KOTHARI VIDE ORDER DATED 16 TH DECEMBER, 2012 IN ITA NO. 159/JP/2016 HAS CONSIDER ED THIS ISSUE IN PARA 2.8 TO 2.11 AS UNDER :- 2.8 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE TRANSACTION UNDER QUESTION RELATES TO UNSECURED LOANS TAKEN BY THE ASSESSEE AMOUNTING TO RS 1 CRORES FROM M/S MEHUL GEMS PVT LTD DURING THE IMPUN GED ASSESSMENT YEAR AND NOT ACCEPTING THE SAID LOAN TRA NSACTION AS A GENUINE TRANSACTION BY THE ASSESSING OFFICER A ND THE RESULTANT ADDITION MADE UNDER SECTION 68 OF THE ACT . UNDISPUTEDLY, THE PRIMARY ONUS TO ESTABLISH GENUINE NESS OF THE LOAN TRANSACTION IS ON THE ASSESSEE. IN THE INS TANT CASE, THE ASSESSEE HAS PROVIDED THE NECESSARY EXPLANATION, FU RNISHED DOCUMENTARY EVIDENCE IN TERMS OF TAX FILINGS, AFFID AVITS AND CONFIRMATION OF THE DIRECTORS, BANK STATEMENTS OF T HE LENDER, ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 146 BALANCE SHEET OF THE LENDER COMPANY, AND AN INDEPEN DENT CONFIRMATION HAS ALSO BEEN OBTAINED BY THE ASSESSIN G OFFICER TO SATISFY THE CARDINAL TEST OF IDENTITY, CREDITWOR THINESS AND GENUINENESS OF THE LOAN TRANSACTION. HOWEVER, THE A SSESSING OFFICER HAS NOT GIVEN ANY FINDING IN RESPECT OF SUC H EXPLANATION, DOCUMENTARY EVIDENCE AS WELL AS INDEPE NDENT CONFIRMATION. APPARENTLY, THE REASON FOR NOT ACCEPT ING THE SAME IS THAT THE ASSESSING OFFICER WAS IN RECEIPT O F CERTAIN INFORMATION FROM THE INVESTIGATION WING OF THE TAX DEPARTMENT AS PER WHICH THE TRANSACTION UNDER CONSIDERATION IS A BOGUS LOAN TRANSACTION. THE SAID INFORMATION RECEIVED FRO M THE INVESTIGATION WING THUS OVERWEIGHED THE MIND OF THE ASSESSING OFFICER. THE ASSESSING OFFICER STATED THA T THE PRIMARY ONUS IS ON THE ASSESSEE TO ESTABLISH THE GE NUINENESS OF THE TRANSACTION CLAIMED BY IT AND IF THE INVESTI GATION DONE BY THE DEPARTMENT LEADS TO DOUBT REGARDING THE GENU INENESS OF THE TRANSACTIONS, IT IS INCUMBENT ON THE ASSESSE E TO PRODUCE THE PARTIES ALONGWITH NECESSARY DOCUMENTS TO ESTABL ISH THE GENUINENESS OF THE TRANSACTION. IN RESPONSE, THE AS SESSEE SUBMITTED THAT SHRI BHANWARLAL JAIN IS NOT KNOWN TO HIM AND REGARDING VARIOUS INCRIMINATING DOCUMENTARY EVIDENC ES SEIZED DURING THE COURSE OF SEARCH AND STATEMENTS R ECORDED OF SHRI BHANWARLAL JAIN AND OTHER PERSONS, HE SPECIFIC ALLY REQUESTED THE AO TO PROVIDE COPIES OF SUCH INCRIMIN ATING DOCUMENTS AND STATEMENT OF ALL VARIOUS PERSONS RECO RDED IN THIS REGARD AND PROVIDE AN OPPORTUNITY TO THE ASSES SEE TO CROSS EXAMINE SUCH PERSONS. HOWEVER, THE AO DIDNT PROVIDE TO THE ASSESSEE COPIES OF SUCH INCRIMINATING DOCUME NTS AND STATEMENTS OF VARIOUS PERSONS RECORDED AND ALLOW TH E CROSS- EXAMINATION OF ANY OF THESE PERSONS. WHILE DOING SO , THE AO STATED THAT IN HIS STATEMENTS, BHANWARLAL JAIN HAD DESCRIBED THAT THEY ARE INDULGED IN PROVIDING ACCOMMODATION E NTRIES OF BOGUS UNSECURED LOANS AND ADVANCES THROUGH VARIOUS BENAMI CONCERNS (70) OPERATED AND MANAGED BY THEM. THIS AD MISSION AUTOMATICALLY MAKES ALL THE TRANSACTIONS DONE BY TH EM AS MERE PAPER TRANSACTIONS AND IN THESE CIRCUMSTANCES, FURTHER AS PER THE INFORMATION NAME AND ADDRESS OF ASSESSEE AND THE BENAMI CONCERN THROUGH WHICH ACCOMMODATION ENTRY OF UNSECURED LOANS WAS PROVIDED IS APPEARING IN THE LI ST OF BENEFICIARIES TO WHOM THE SAID GROUP HAS PROVIDED. THIS ADMISSION IS SUFFICIENT TO REJECT THE CONTENTIONS O F THE ASSESSEE. FURTHER, REGARDING CROSS EXAMINATION, TH E AO STATED THAT THE RIGHT OF CROSS EXAMINATION IS NOT AN ABSOLUTE RIGHT AND IT DEPENDS UPON THE CIRCUMSTANCES OF EACH CASE AND ALSO ON THE STATUTE CONCERNED. IN THE PRESENT CASE, NO SUCH CIRCUMSTANCES ARE WARRANTED AS IN THE LIST OF BENEF ICIARIES TO WHOM ACCOMMODATION ENTRIES WERE PROVIDED BY THE SAI D GROUP CATEGORICALLY CONTAINS THE NAME AND ADDRESS O F THE ASSESSEE. FURTHER THE GROUP HAS CATEGORICALLY ADMIT TED TO PROVIDING OF ACCOMMODATION ENTRIES OF UNSECURED LOA NS THROUGH VARIOUS BENAMI CONCERNS. THE AO FURTHER RE LIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE C ASE OF C. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 147 VASANTLAL & CO. VS. CIT 45 ITR 206(SC) AND HONBLE RAJASTHAN HIGH COURT IN CASE OF RAMESHWARLAL MALI V S. CIT 256 ITR 536(RAJ.) AMONG OTHERS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE THAT IF THE ENTRIES AND M ATERIAL ARE GATHERED BEHIND THE BACK OF THE ASSESSEE AND IF THE AO PROPOSES TO ACT ON SUCH MATERIAL AS HE MIGHT HAVE G ATHERED AS A RESULT OF HIS PRIVATE ENQUIRIES, HE MUST DISCL OSE ALL SUCH MATERIAL TO THE ASSESSEE AND ALSO ALLOW THE CROSS E XAMINATION AND IF THIS IS NOT DONE, THE PRINCIPLES OF NATURAL JUSTICE STAND VIOLATED. 2.9 IN LIGHT OF ABOVE DISCUSSIONS, IN OUR VIEW, TH E CRUX OF THE ISSUE AT HAND IS THAT WHETHER THE PRINCIPLE OF NATURAL JU STICE STAND VIOLATED IN THE INSTANT CASE. IN OTHER WORDS, WHERE THE AO DOESNT WANT TO ACCEPT THE EXPLANATION OF THE ASSES SEE AND THE DOCUMENTATION FURNISHED REGARDING THE GENUINENESS O F THE LOAN TRANSACTION AND INSTEAD WANTS TO RELY UPON THE INFORMATION INDEPENDENTLY RECEIVED FROM THE INVESTI GATION WING OF THE DEPARTMENT IN RESPECT OF INVESTIGATION CARRIED OUT AT A THIRD PARTY, CAN THE SAID INFORMATION BE USED AGAINST THE ASSESSEE WITHOUT SHARING SUCH INFORMATION WITH THE ASSESSEE AND ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO EXAM INE SUCH INFORMATION AND EXPLAIN ITS POSITION ESPECIALLY WHE N THE ASSESSEE HAS REQUESTED THE SAME TO THE ASSESSING OF FICER. 2.10 IN THIS REGARD, THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 7 75 (SC) (COPY AT CASE LAW PB 812-818) HAS HELD THAT THE RULE OF LAW ON THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STA TED BY THE LAHORE HIGH COURT IN THE CASE OF SETH GURMUKH SINQH WHERE IT WAS STATED THAT WHILE PROCEEDING UNDER SUB-SECTI ON (3) OF SECTION 23, THE INCOME-TAX OFFICER, THOUGH NOT BOUN D TO RELY ON EVIDENCE PRODUCED BY THE ASSESSEE AS HE CONSIDER S TO BE FALSE, YET IF HE PROPOSES TO MAKE AN ESTIMATE IN DI SREGARD OF THAT EVIDENCE, HE SHOULD IN FAIRNESS DISCLOSE TO TH E ASSESSEE THE MATERIAL ON WHICH HE IS GOING TO FIND THAT ESTI MATE; AND THAT IN CASE HE PROPOSES TO USE AGAINST THE ASSESSE E THE RESULT OF ANY PRIVATE INQUIRIES MADE BY HIM, HE MUST COMMU NICATE TO THE ASSESSEE THE SUBSTANCE OF THE INFORMATION SO PR OPOSED TO BE UTILIZED TO SUCH AN EXTENT AS TO PUT THE ASSESSE E IN POSSESSION OF FULL PARTICULARS OF THE CASE HE IS EX PECTED TO MEET AND THAT HE SHOULD FURTHER GIVE HIM AMPLE OPPO RTUNITY TO MEET IT. IT WAS HELD IN THAT CASE THAT IN THIS CA SE WE ARE OF THE OPINION THAT THE TRIBUNAL VIOLATED CERTAIN FUND AMENTAL RULES OF JUSTICE IN REACHING ITS CONCLUSIONS. FIRST LY, IT DID NOT DISCLOSE TO THE ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT BY THE DEPARTMENTAL REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBUT THE MATERIA L FURNISHED TO IT BY HIM, AND LASTLY, IT DECLINED TO TAKE ALL THE MATERIAL THAT THE ASSESSEE WANTED TO PRODUCE IN SUP PORT OF ITS CASE. THE RESULT IS THAT THE ASSESSEE HAD NOT HAD A FAIR HEARING. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 148 THE HONBLE SUPREME COURT IN CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206 (SC) HAS HELD THAT THE ITO IS NOT B OUND BY ANY TECHNICAL RULES OF THE LAW OF EVIDENCE. IT IS O PEN TO HIM TO COLLECT MATERIAL TO FACILITATE ASSESSMENT EVEN BY P RIVATE ENQUIRY. BUT, IF HE DESIRES TO USE THE MATERIAL SO COLLECTED, THE ASSESSEE MUST BE INFORMED ABOUT THE MATERIAL AND GI VEN ADEQUATE OPPORTUNITY TO EXPLAIN IT. THE STATEMENTS MADE BY PRAVEEN JAIN AND GROUP WERE MATERIAL ON WHICH THE I T AUTHORITIES COULD ACT PROVIDED THE MATERIAL WAS DIS CLOSED AND THE ASSESSEE HAD AN OPPORTUNITY TO RENDER THEIR EXP LANATION IN THAT REGARD. THE HONBLE SUPREME COURT IN CASE OF KISHINCHAND CHELLARAM V. CIT (1980) 125 ITR 713 (SC) (COPY AT CASE LAW PB 585-591) HAS HELD THAT WHETHER THERE WAS ANY MATERIAL EVIDENCE TO JUSTIFY THE FINDINGS OF THE TR IBUNAL THAT THE AMOUNT OF RS. 1,07,350 SAID TO HAVE BEEN REMITT ED BY TILOKCHAND FROM MADRAS REPRESENTED THE UNDISCLOSED INCOME OF THE ASSESSEE. THE ONLY EVIDENCE ON WHICH THE TRI BUNAL COULD RELY FOR THE PURPOSE OF ARRIVING AT THIS FIND ING WAS THE LETTER, DATED 18-2-1955 SAID TO HAVE BEEN ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO. NOW IT IS DIFFICULT TO SEE HOW THIS LETTER COULD AT ALL BE RELIED UPON BY THE TRIB UNAL AS A MATERIAL PIECE OF EVIDENCE SUPPORTIVE OF ITS FINDIN G. IN THE FIRST PLACE, THIS LETTER WAS NOT DISCLOSED TO THE A SSESSEE BY THE ITO AND EVEN THOUGH THE AAC REPRODUCED AN EXTRACT F ROM IT IN HIS ORDER, HE DID NOT CARE TO PRODUCE IT BEFORE THE ASSESSEE OR GIVE A COPY OF IT TO THE ASSESSEE. THE SAME POSI TION OBTAINED ALSO BEFORE THE TRIBUNAL AND THE HIGH COUR T AND IT WAS ONLY WHEN A SUPPLEMENTAL STATEMENT OF THE CASE WAS CALLED FOR BY THIS COURT BY ITS ORDER, DATED 16-8-1 979 THAT, ACCORDING TO THE ITO, THIS LETTER WAS TRACED BY HIM AND EVEN THEN IT WAS NOT SHOWN BY HIM TO THE ASSESSEE BUT IT WAS FORWARDED TO THE TRIBUNAL AND IT WAS FOR THE FIRST TIME AT THE HEARING BEFORE THE TRIBUNAL IN REGARD TO THE PREPAR ATION OF THE SUPPLEMENTAL STATEMENT OF THE CASE THAT THIS LE TTER WAS SHOWN TO THE ASSESSEE. IT WILL, THEREFORE, BE SEEN THAT, EVEN IF WE ASSUME THAT THIS LETTER WAS IN FACT ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO, NO RELIANCE COULD B E PLACED UPON IT, SINCE IT WAS NOT SHOWN TO THE ASSESSEE UNT IL AT THE STAGE OF PREPARATION OF THE SUPPLEMENTAL STATEMENT OF THE CASE AND NO OPPORTUNITY TO CROSS EXAMINE THE MANAGER OF THE BANK COULD IN THE CIRCUMSTANCES BE SOUGHT OR AVAILED OF BY THE ASSESSEE. IT IS TRUE THAT THE PROCEEDINGS UNDER THE INCOME-TAX LAW ARE NOT GOVERNED BY THE STRICT RULES OF EVIDENC E AND, THEREFORE, IT MIGHT BE SAID THAT EVEN WITHOUT CALLI NG THE MANAGER OF THE BANK IN EVIDENCE TO PROVE THIS LETTE R, IT COULD BE TAKEN INTO ACCOUNT AS EVIDENCE. BUT BEFORE THE I NCOME-TAX AUTHORITIES COULD RELY UPON IT, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONT ROVERT THE STATEMENTS CONTAINED IN IT BY ASKING FOR AN OPPORTU NITY TO ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 149 CROSS EXAMINE THE MANAGER OF THE BANK WITH REFERENC E TO THE STATEMENTS MADE BY HIM. 2.11 IN LIGHT OF ABOVE PROPOSITION IN LAW AND ESPE CIALLY TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE SUPREME C OURT IN CASE OF C. VASANTLAL & CO. (SUPRA) RELIED UPON BY T HE REVENUE AND WHICH ACTUALLY SUPPORTS THE CASE OF THE ASSESSEE, IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED B Y THE AO RELYING SOLELY ON THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, STATEMENT RECORDED U/S 132(4) O F SHRI BHANWARLAL JAIN AND OTHERS, AND VARIOUS INCRIMINATI NG DOCUMENTARY EVIDENCE FOUND FROM THE SEARCH AND SEIZ URE CARRIED OUT BY INVESTIGATION WING, MUMBAI ON THE SH RI BHANWARLAL JAIN GROUP ON 03.10.2013. IT REMAINS UND ISPUTED THAT THE ASSESSEE WAS NEVER PROVIDED COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENTS OF SHRI BHAN WARLAL JAIN AND VARIOUS PERSONS AND AN OPPORTUNITY TO CROS S EXAMINE SUCH PERSONS THOUGH HE SPECIFICALLY ASKED F OR SUCH DOCUMENTS AND CROSS EXAMINATION. ON THE OTHER HAND, THE BURDEN WAS SOUGHT TO BE SHIFTED ON THE ITA NO. 159/ JP/16 THE ACIT, CENTRAL -2, JAIPUR VS. M/S PRATEEK KOTHARI, J AIPUR 21 ASSESSEE BY THE A.O. IT IS CLEAR CASE WHERE THE PRI NCIPLE OF NATURAL JUSTICE STAND VIOLATED AND THE ADDITIONS MA DE UNDER SECTION 68 THEREFORE ARE UNSUSTAINABLE IN THE EYE O F LAW AND WE HEREBY DELETE THE SAME. THE ORDER OF THE LD CIT( A) IS ACCORDINGLY CONFIRMED AND THE GROUND OF THE REVENUE IS DISMISSED. THUS WHEN THE ASSESSEE HAS SPECIFICALLY ASKED FOR C ROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO, THEN THE DENIAL OF THE OPPORTUNITY TO CROSS EXAMINE WOULD CERTAINLY IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY RENDERS THE ASSESS MENT ORDER BASED ON SUCH STATEMENT AS NOT SUSTAINABLE IN LAW. HENCE IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE THE ASSESSEE HAS RE PEATEDLY REQUESTED AND DEMANDED THE CROSS EXAMINATION OF THE WITNESSES WHO SE STATEMENTS WERE RELIED UPON BY THE AO IN THE ASSESSMENT ORDER AND F URTHER THE REPORT OF THE DDIT INVESTIGATION KOLKATA IS ALSO BASED ON THE STA TEMENT OF SUCH PERSON THEN THE DENIAL OF CROSS EXAMINATION BY THE AO AS W ELL AS LD. CIT (A) DESPITE THE FACT THAT THE ASSESSEE WAS READY TO BEAR THE CO ST OF THE CROSS EXAMINATION OF THE WITNESSES IS A GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THUS THE ADDITIONS MADE BY THE AO ON THE BASIS OF SUCH STATE MENT WITHOUT ANY TANGIBLE MATERIAL IS NOT SUSTAINABLE IN LAW AND LIABLE TO BE DELETED. ACCORDINGLY THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 150 ADDITION MADE BY THE AO IS ALSO DELETED ON MERITS A PART FROM THE LEGAL ISSUE DECIDED IN FAVOUR OF THE ASSESSEE. BOTH THE PARTIES HAVE FAIRLY ADMITTED THAT THE FACT AS WELL AS THE ISSUE IS IDENTICAL IN BOTH THE CASES. THEREFORE, IN VIEW OF OUR FINDING ON THIS ISSUE IN THE CASE OF KOTA DALL MILL (SUPRA), WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 26. SIMILARLY GROUNDS NO. 3 TO 5 OF THE APPEAL WITH REGARD TO UNSECURED LOAN TAKEN FROM JALSAGAR COMMERCE PVT. LT D. AMOUNTING TO RS. 67,85,000/- IS COVERED BY THE ORDER OF THE TRIBU NAL IN THE CASE OF M/S KOTA DALL MILL VS. DCIT (SUPRA) FOR THE A.Y. 201 0-11 TO 2013-14, WHICH HAS ALREADY BEEN DISCUSSED IN DETAIL IN EARLIE R PARAGRAPHS OF THIS ORDER AND DECIDED IN FAVOUR OF THE ASSESSEE AND AGA INST THE REVENUE. 27. GROUND NO. 6 OF THE ASSESSEES APPEAL FOR THE A .Y. 2010-11 IS WITH REGARD TO PEAK CREDIT. THE ISSUE IS COVERED BY THE D ECISION OF THE COORDINATE BENCH IN THE CASE OF M/S KOTA DALL MILL VS. DCIT(SUPRA) FOR THE A.Y. 2010-11 TO 2015-16 AT PAGE 87 OF THE ORDER . 28. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CA REFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUN D THAT ALL THE ISSUES INVOLVED IN THE APPEALS HAVE BEEN DEALT BY THE TRIBU NAL IN THE GROUP CASES THREADBARE AND AFTER MEETING ALL THE OBJECTIO NS OF THE A.O., LD. CIT(A) AND THE DEPARTMENT, THE TRIBUNAL HAVE CONFIRME D THE ORDER OF THE LD. CIT(A) WITH RESPECT OF THE SHARE APPLICATION MONEY ACCEPTED AT ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 151 PREMIUM FROM FOLLOWING THREE CONCERNS NAMELY M/S SA NGAM DISTRIBUTORS PVT. LTD., M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S ISIS MERCANTILES PVT. LTD. SIMILARLY WE FOUND THAT THE UNSECURED LOA N TAKEN FROM M/S JALSAGAR COMMERCE PVT. LTD. HAVE ALSO BEEN DEALT BY THE TRIBUNAL AFTER DFEALING THREADBARE IN THE CASE OF M/S KOTA DALL MI LL VS. DCIT (SUPRA) PAGES 71 TO 76 FOR THE ASSESSMENT YEARS 2010-11 TO 2015-16. AS THE FACTS AND CIRCUMSTANCES DURING BOTH THE ASSESSMENT YEARS ARE SAME AS HAVE ELABORATELY DISCUSSED BY THE TRIBUNAL IN THE AB OVE YEARS, RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY M ERIT IN THE ADDITION SO MADE WITH RESPECT TO UNSECURED LOAN TAKEN FROM M/ S JALSAGAR COMMERCE PVT. LTD. AND SHARE APPLICATION MONEY WITH PREMIUM FROM M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TEAC CONSULT ANTS PRIVATE LIMITED AND M/S ISIS MERCANTILES PVT. LTD. 29. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E ASSESSING OFFICER ALSO MADE DISALLOWANCE U/S 14A OF THE ACT AM OUNTING TO RS. 53,523/- FOR THE A.Y. 2010-11 AND RS.1,98,478/- FOR THE A.Y. 2011-12. BY THE IMPUGNED ORDER, THE LD CIT(A) DELETED THE ADD ITION AFTER OBSERVING AS UNDER: 12.3.1 IN MY CONSIDERED VIEW, THE AO HAS LEGALLY E RRED IN DIRECTLY APPLYING THE PROVISION OF SECTION 14A OF THE ACT, WITHOUT RE CORDING ANY SATISFACTION AS TO THE CORRECTNESS OF THE CLAIM MAD E BY THE APPELLANT. IN THE ASSESSMENT ORDER, THERE IS NO SAT ISFACTION RECORDED BY THE AO AS REQUIRED BY SECTION 14A (1) OF THE ACT BEFORE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 152 PROCEEDING FURTHER TO MAKE ANY DISALLOWANCE U/S 14A OF THE ACT. FURTHER, IT IS SEEN THAT AO HAS MECHANICALLY APPLIE D THE RULE 8D AS AMENDED W.E.F. 02.06.2016, WHICH WAS NOT EVEN APPLI CABLE TO RELEVANT ASSESSMENT YEAR. IN MY CONSIDERED VIEW, TH E LAW CANNOT BE APPLIED MECHANICALLY AND THAT TOO RETROSPECTIVELY. IT IS SEEN THAT AO HAS NOT ESTABLISHED ANY NEXUS OF INVESTMENT WITH BO RROWED FUNDS, RATHER AVAILABILITY OF SUFFICIENT INTEREST FREE FUN DS JUSTIFIES THE CASE OF THE APPELLANT THAT DISALLOWANCE U/S 14A OF THE ACT IS UNWARRANTED. FURTHER, IT IS SEEN THAT AO HAS NEITHER POINTED OUT NOR GIVEN ANY SPECIFIC FINDINGS IN THE ASSESSMENT ORDER THAT ANY EXEMPT INCOME WAS EARNED DURING THE RELEVANT ASSESSMENT YEAR. THE REFORE, IN THE RELEVANT CASES ALSO WHEREIN SECTION 14A OF THE ACT IS APPLICABLE, ONLY THE RELEVANT PORTION OF EXPENDITURE IS REQUIRED TO BE DISALLOWED AND NOT THE COMPLETE EXPENSES, WHICH IN THE INSTANCE CA SE, THE AO HAS DONE WITHOUT MAKING ANY CASE FOR DISALLOWANCE U/S 1 4A OF THE ACT. THEREFORE, IN VIEW OF THE NON-FULFILLMENT OF SUCH S TATUTORY REQUIREMENT AS LAID DOWN IN VARIOUS JUDICIAL PRECED ENTS AND CIRCULARS AS RELIED UPON BY THE A/R IN HIS SUBMISSI ON, IN MY CONSIDERED VIEW, THE DISALLOWANCE U/S 14A OF THE AC T OF RS. 53,523/- IS UNWARRANTED. ACCORDINGLY, THE SAME IS DELETED. I N VIEW OF THE ABOVE, ADDITION OF RS. 53,523/- IS DELETED AND THE SE GROUNDS OF APPEALS ARE ALLOWED.' 30. SIMILARLY FOR THE A.Y. 2011-12, THE ADDITION MA DE U/S 14A WAS DELETED BY THE LD. CIT(A) AFTER OBSERVING AS UNDER: 8.3.1 IN MY CONSIDERED VIEW, THE AO HAS LEGALLY ER RED IN DIRECTLY APPLYING THE PROVISION OF SECTION 14A OF THE ACT, WITHOUT RE CORDING ANY SATISFACTION AS TO THE CORRECTNESS OF THE CLAIM MAD E BY THE APPELLANT. IN THE ASSESSMENT ORDER, THERE IS NO SAT ISFACTION RECORDED BY THE AO AS REQUIRED BY SECTION 14A(1) OF THE ACT BEFORE PROCEEDING FURTHER TO MAKE ANY DISALLOWANCE U/S 14A OF THE ACT . FURTHER, IT IS SEEN THAT AO HAS MECHANICALLY APPLIED THE RULE 8D A S AMENDED W.E.F. 02.06.2016, WHICH WAS NOT EVEN APPLICABLE TO RELEVANT ASSESSMENT YEAR. IN MY CONSIDERED VIEW, THE LAW CAN NOT BE APPLIED MECHANICALLY AND THAT TOO RETROSPECTIVELY. IT IS SE EN THAT AO HAS NOT ESTABLISHED ANY NEXUS OF INVESTMENT WITH BORROWED F UNDS, RATHER AVAILABILITY OF SUFFICIENT INTEREST FREE FUNDS JUST IFIES THE CASE OF THE ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 153 APPELLANT THAT DISALLOWANCE U/S 14A OF THE ACT IS U NWARRANTED. FURTHER, IT IS SEEN THAT AO HAS NEITHER POINTED OUT NOR GIVEN ANY SPECIFIC FINDINGS IN THE ASSESSMENT ORDER THAT ANY EXEMPT INCOME WAS EARNED DURING THE RELEVANT ASSESSMENT YEAR. THE REFORE, IN VIEW OF THE NON-FULFILLMENT OF SUCH STATUTORY REQUIREMEN T AS LAID DOWN IN VARIOUS JUDICIAL PRECEDENTS AND CIRCULARS AS RELIED UPON BY THE A/R IN HIS SUBMISSION, IN MY CONSIDERED VIEW, THE DISALLOW ANCE U S 14A OF THE ACT OF RS. 1,98,478/- IS UNWARRANTED. ACCORDING LY, THE SAME IS DELETED AND THE GROUND NO. 3 TO 10 OF THE APPEAL AR E ALLOWED. 31. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORIT IES BELOW AND FOUND THAT THE DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER U/S 14A OF THE ACT WITHOUT RECORDING ANY SATISFACTION AS TO THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE. THE LD. CIT(A) HAS DELET ED THE ADDITION BY OBSERVING THAT THE ASSESSING OFFICER HAS MECHANICAL LY APPLIED THE RULE 8D AS AMENDED W.E.F. 02/6/2016, WHICH WAS NOT EVEN AP PLICABLE TO THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION. FURT HER FINDING OF FACT WAS RECORDED BY THE LD. CIT(A) TO THE EFFECT THAT THE ASSESSING OFFICER HAS NOT ESTABLISHED ANY NEXUS OF INVESTMENT WITH THE BORROWED FUNDS, RATHER AVAILABILITY OF SUFFICIENT INTEREST FREE FUN DS JUSTIFIES THE CASE OF THE ASSESSEE THAT THE DISALLOWANCE U/S 14A IS UNWARRANTED . DETAILED FINDINGS WERE RECORDED BY THE LD. CIT(A) ARE AS PER M ATERIAL ON RECORD WHICH DO NOT REQUIRE ANY INTERFERENCE ON OUR PART. A CCORDINGLY, GROUNDS TAKEN BY THE REVENUE IN BOTH THE YEARS WITH REGARD T O THE DISALLOWANCE U/S 14A OF THE ACT ARE DISMISSED. ITA 1053, 1188 & 1205/JP/2018 & CO 48/JP/2018_ M/S AGRASEN AGRO INDUSTRIES P LTD. VS DCIT 154 32. THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BE COME INFRUCTUOUS, THEREFORE, DISMISSED. 33. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH MARCH, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S AGRASEN AGRO INDUSTRIES PVT. LTD. , KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1053, 1188 & 1205/JP/2018 & C.O. 48/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR
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