Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 0183 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-03-2019
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 BENCHE S A, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1192/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2010-11 D.C.I.T., CENTRAL CIRCLE, KOTA. CUKE VS. M/S HADOTI PUNJI VIKAS LTD., C-BLOCK, 6/7, MULTIMETALS CAMPUS, LARGE SCALE INDUSTRIAL AREA, KOTA, RAJASTHAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACH 4047 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT IZR;K{KSI.K @ C.O. NO. 44/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 1192/JP/2018) FU/KZKJ.K O' KZ @ ASSESSMENT YEAR: 2010-11 M/S HADOTI PUNJI VIKAS LTD. 6/7, HEAVY INDUSTRIAL AREA, C-BLOCK, MULTIMETALS LIMITED CAMPUS, KANSUA ROAD, LARGE SCALE INDUSTRIAL AREA, KOTA. CUKE VS. D.C.I.T., CENTRAL CIRCLE, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAACH 4047 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT-DR) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) & SHRI GULSHAN AGARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 07/03/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 29/03/2019 VKNS'K@ ORDER PER: VIJAP PAL RAO, J.M. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, UDAI PUR DATED 16/07/2018 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 2 FOR THE A.Y. 2010-11. THE REVENUE IN ITS APPEAL HAS TAKEN FOLLOWING GROUNDS: 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 . 15,32,00,000/- & RS. 3,40,00,000/- MADE BY THE AO U/S 68 OF THE IT A CT ON ACCOUNT OF UNEXPLAINED UNSECURED LOANS & UNEXPLAINED SHARE APP LICATION MONEY ALLEGEDLY OBTAINED BY THE ASSESSEE FROM M/S P RITHVI VINIMAY PVT. LTD. AND M/S BIRLA ARTS PVT. LTD., M/S MACRO S OFT TECHNOLOGY PVT. LTD., M/S TEAC CONSULTANTS PVT. LTD., M/S SANG AM DISTRIBUTORS PVT. LTD., RESPECTIVELY. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE C1T(A) WAS JUSTIFIED IN DELETING THE ADDITION OF SH ARE APPLICATION MONEY BY OBSERVING THAT THE ALLEGED INVESTOR COMPAN IES M/S PRITHVI VINIMAY PVT. LTD. AND M/S BIRLA ARTS PVT. L TD., M/S MACRO SOFT TECHNOLOGY PVT. LTD., M/S TEAC CONSULTANTS PVT . LTD., M/S SANGAM DISTRIBUTORS PVT. LTD.,, ARE NOT SHELL COMPA NIES WITHOUT CONSIDERING THE FINANCIAL STATEMENTS OF THESE COMPA NIES. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE C1T(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S PRITHVI VINIMAY PVT. LT D. AND M/'S BIRLA ARTS PVT. LTD., M/S MACRO SOFT TECHNOLOGY PVT. LTD. , M/S TEAC CONSULTANTS PVT. LTD., M/S SANGAM DISTRIBUTORS PVT. LTD., MERELY FOR THE REASON THAT EVIDENCES IN THE FONN OF STATEMENT 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 C1T(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S PRITHVI VINIMAY PVT. LT D. AND M/S BIRLA ARTS PVT. LTD., M/S MACRO SOFT TECHNOLOGY' PVT. LTD ., M/S TEAC CONSULTANTS PVT. LTD., M/S SANGAM DISTRIBUTORS 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 PROD UCING AND ALSO IGNORING THE FACT THAT THE ASSESSEE NEITHER EXPRESS ED ITS INABILITY IN PRODUCING THE LENDERS NOR PRODUCED THEM EITHER. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 3 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE C1T(A) WAS JUSTIFIED IN DELETING THE ADDITION OF UN SECURED LOANS ALLEGEDLY OBTAINED FROM M/S PRITHVI VINIMAY PVT. LT D. AND M/S BIRLA ARTS P\4. LTD., M/S MACRO SOFT TECHNOLOGY PVT. LTD. , M/S SANGAM DISTRIBUTORS PVT. LTD., M/S TEAC CONSULTANTS PVT. L TD., MERELY BY OBSERVING THAT THE ASSESSEE HAS COOPERATED IN ASSES SMENT BY SHOWING HIS WILLINGNESS TO PRODUCE THE DIRECTORS OF LENDER COMPANIES AND SOME DIRECTORS/OFFICERS WERE ALSO PRO DUCED BEFORE THE AO DESPITE THE FACT THAT EVEN THE DIRECTORS WHI CH WERE PRODUCED BEFORE THE AO FAILED TO SUBSTANTIATE THE G ENUINENESS OF THE 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 FAY OBSERVING THAT THE APPELLANT CANNOT BE FASTENED UPO N THE BURDEN TO PRODUCE THE LENDERS BEFORE THE AO AND IN NOT CON SIDERING THE DECISION OF THE HONBLE SUPREME COURT IN NAVODAYA C ASTLES (P) LTD VS CIT(2015) 56 TAXMANN.COM 18(8C) WHEN THERE WERE GENUINE CONCERNS OF THE GENUINENESS OF THE TRANSACTIONS. 7. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 52,43,029/- MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTIO N 14A OF THE IT ACT. 8. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE IN LAW, THE C1T(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE O F RS. 7,50,385/- MADE BY THE AO ON ACCOUNT OF RETENTION CHARGES. 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. 2. GROUNDS NO. 1 TO 6 OF THE REVENUES APPEAL ARE R EGARDING THE ADDITION MADE BY THE A.O. U/S 68 OF THE ACT ON ACCO UNT OF UNEXPLAINED LOANS AS WELL AS UNEXPLAINED SHARE APPLICATION MONEY RECEIVED FROM FIVE COMPANIES WHICH WAS DELETED BY THE LD. CIT(A) ON THE G ROUND THAT THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 4 A.O. WAS NOT HAVING ANY MATERIAL IN HIS POSSESSION T O SUBSTANTIATE THE ADDITION AS THE A.O. WAS NOT HAVING EVEN THE STATEM ENT OF THE ALLEGED ENTRY OPERATOR WHEREAS THE ASSESSEE HAS PRODUCED ALL THE DOCUMENTARY EVIDENCES IN SUPPORT OF THE CLAIM. THE ASSESSEE IS A GROUP CONCERN OF KOTA DALL MILL (KDM) GROUP AND SUBJECTED TO THE SEA RCH AND SEIZURE ACTION U/S 132 OF THE ACT CARRIED OUT ON 02/07/2015. THE A. O. INITIATED THE PROCEEDINGS U/S 153A OF THE ACT IN PURSUANT TO THE SEARCH FOR THE A.Y. 2010-11 TO 2013-14 AND 2015-16 AND MADE VARIOUS ADD ITIONS U/S 68 OF THE ACT ON ACCOUNT OF SHARE APPLICATION MONEY, SPEC IAL DEPOSITS AGAINST THE ISSUE OF PREFERENTIAL EQUITY SHARES TREATING TH E SAME AS ACCOMMODATION ENTRIES AVAILED BY THE ASSESSEE FROM THE ENTRY PROVIDERS. THE ASSESSEE CHALLENGED THE ORDERS PASSED BY THE A.O . BEFORE THE LD. CIT(A) AND CONTENDED THAT THE A.O. HAS MADE THE ADDI TION MERELY ON THE BASIS OF THE STATEMENTS RECORDED BY THE INVESTIGATI ON WING, KOLKATA AND WITHOUT ANY INCRIMINATING MATERIAL FOUND OR SEIZED D URING THE SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE. THE ASSE SSEE ALSO RAISED OBJECTION AGAINST THE ADDITIONS MADE BY THE A.O. ON THE GROUND THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY OF CROSS EXAMI NATION OF THE WITNESSES WHOSE STATEMENT WAS RELIED UPON BY THE A.O. WHILE PASSING THE ASSESSMENTS. THE LD. CIT(A) DID NOT ACCEPT THESE OBJ ECTIONS RAISED BY THE ASSESSEE, HOWEVER, ON MERITS OF THE ADDITION, THE LD . CIT(A) HAS DELETED ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 5 THE MAJOR PART OF THE ADDITION FOR WHICH THE A.O. WAS NOT HAVING ANY MATERIAL IN HIS POSSESSION BUT CONFIRMED THE ADDITI ON IN RESPECT OF WHICH THE STATEMENT OF THE ALLEGED ENTRY PROVIDER WAS WITH THE A.O.. THUS, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE AGGRIEVED BY THE IMPUGNED ORDER OF THE LD. CIT(A) AND FILED APPEAL AS WELL AS THE CRO SS OBJECTION FOR THE RESPECTIVE ASSESSMENT YEAR. 3. THE A.O. HAS OBSERVED THAT THE ASSESSEE RECEIVED SHARE CAPITAL AND UNSECURED LOAN FROM VARIOUS COMPANIES. THE A.O. ISSU ED SHOW CAUSE NOTICE TO THE ASSESSEE AS TO WHY UNSECURED LOAN AND SHARE CAPITAL RECEIVED FROM FIVE COMPANIES SHOULD NOT BE TREATED AS UNEXPLAINED U/S 68 OF THE ACT. AFTER CONSIDERING THE EXPLANATION OF TH E ASSESSEE, THE A.O. HELD THAT THE SHARE CAPITAL AND UNSECURED LOAN RECE IVED FROM FIVE COMPANIES AMOUNTING TO RS. 18.72 CRORES IS UNEXPLAI NED CASH CREDIT AND ACCORDINGLY MADE AN ADDITION OF THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. WHILE MAKING THE ADDITION, THE A.O. H AS RELIED UPON THE REPORT OF THE INVESTIGATION WING, KOLKATA WHEREIN IT WAS REPORTED THAT THESE FIVE COMPANIES ARE MANAGED AND CONTROLLED BY THE ENTRY OPERATORS AND THEREFORE, THESE ARE ACCOMMODATIONS ENTRIES PRO VIDED BY THESE ENTRY OPERATORS. ON APPEAL, THE LD. CIT(A) HAS DELETED THE ADDITION IN RESPECT OF ALL THE TRANSACTIONS OF UNSECURED LOAN AND SHARE CA PITAL ON THE GROUND THAT THE A.O. WAS NOT HAVING ANY DOCUMENTARY EVIDENC E TO EVEN THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 6 STATEMENT OF THE PERSONS WHO HAVE ALLEGEDLY PROVIDED ACCOMMODATION ENTRIES TO THE ASSESSEE THROUGH THESE COMPANIES. 4. BEFORE US THE LD. CIT-DR HAS SUBMITTED THAT THIS COMPANY WAS FOUND TO BE A SHELL COMPANY AS PER THE INVESTIGATIO N CARRIED OUT BY THE DDIT(INV.), KOLKATA AS WELL AS THE ENQUIRY WAS ALSO CO NDUCTED BY THE A.O. THROUGH THE INVESTIGATION WING, KOLKATA. FURTHER TH E ASSESSEE WAS ASKED BY THE A.O. TO PRODUCE PRINCIPAL OFFICER/DIRECTORS OF THE COMPANY FOR EXAMINATION BUT THE ASSESSEE FAILED TO DISCHARGE IT S ONUS. THE ASSESSEE HAS INTRODUCED HIS UNACCOUNTED INCOME IN THE BOOKS OF ACCOUNT IN THE GARB OF SHARE APPLICATION MONEY AS THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION. IT IS EVIDENT F ROM THE EVIDENCES COLLECTED BY THE DEPARTMENT DURING THE INVESTIGATIO N, ENQUIRY, SEARCH AND SURVEY ACTION AND THE A.O. RECEIVED INFORMATION FRO M THE INVESTIGATION WING, KOLKATA REGARDING INVOLVEMENT OF KOTA DALL MI LL INCLUDING THE ASSESSEE IN OBTAINING ENTRIES OF BOGUS SHARE APPLIC ATION MONEY. SUCH INFORMATION WAS RECEIVED PRIOR TO THE INITIATION OF THE PROCEEDINGS U/S 153A OF THE ACT AND ALSO DURING THE PENDENCY OF THE PROCEEDINGS OF ASSESSMENT. THE ASSESSING OFFICER ALSO CONDUCTED FU RTHER ENQUIRY DURING THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT ABOU T THE GENUINENESS OF THE TRANSACTION OF UNSECURED LOANS. THE ASSESSEE WAS DULY CONFRONTED WITH THE RESULTS ON ALL THESE FACTS AND INFORMATION SHARED BY THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 7 INVESTIGATION WING, KOLKATA. IN THESE CIRCUMSTANCES , IT CANNOT BE A CASE OF ADDITION MADE WITHOUT ANY INCRIMINATING MATERIAL, BUT THE A.O. WAS HAVING SUFFICIENT MATERIAL DISCLOSING THE UNDISCLOS ED INCOME IN THE SHAPE OF UNEXPLAINED CASH CREDIT INTRODUCED BY THE ASSESS EE IN THE GARB OF SHARE CAPITAL. ONCE THE A.O. HAS BROUGHT ON RECORD THE RE PORT OF THE INVESTIGATION WING, KOLKATA TO PROVE THAT THE SAID COMPANY IS A SHELL COMPANY AND ENGAGED IN PROVIDING BOGUS ACCOMMODATIO N ENTRIES THEN THE ASSESSEE WAS DUTY BOUND TO DISCHARGE ITS ONUS OF PROVING THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE HAS FA ILED TO PRODUCE THE PRINCIPAL OFFICER OR THE DIRECTOR OF THE LOAN CREDI TOR BEFORE THE A.O. FOR EXAMINATION DESPITE VARIOUS OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER. HE HAS RELIED UPON THE DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. NAVODAYA CASTLES PVT. LTD. 226 TAXMAN 190 AND THE SLP FILED BY THE ASSESSEE WAS DISMISSED BY THE HON'BLE SUPREME CO URT REPORTED IN 230 TAXMAN 268 (S.C.) 5. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT PRIOR TO THE SEARCH U/S 132 OF THE ACT, THE ASSESSM ENT OF THE ASSESSEE WAS COMPLETED U/S 143(3) OF THE ACT WHEREIN THE SHAR E APPLICATION MONEY RECEIVED BY THE ASSESSEE FROM THIS COMPANY WAS TREAT ED AS GENUINE BY THE A.O.. EVEN THE SAID TRANSACTION WAS ALSO EXAMINE D BY THE A.O. IN THE ASSESSMENT OF THE SHARE APPLICANT U/S 143(3) OF THE ACT, THEREFORE, PRIOR ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 8 TO THE SEARCH, THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT AND THERE WAS NO DEFECT FOUND BY THE A.O. IN THE CLAIM OF THE ASSESSEE AS THE GENUINENESS OF THE TRANSACTION OF SHARE APPLICATION MONEY RECEIVED FROM THIS COMPANY. FURTHER NOTHING HAS EITHER BEEN FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WHICH CAN SUPPORT THE CASE OF THE A.O. IN TREATING THE SAID SHARE APP LICATION MONEY AS BOGUS TRANSACTION AND CONSEQUENTLY UNEXPLAINED CASH CREDI T U/S 68 OF THE ACT. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT EVEN OT HERWISE THE ASSESSEE HAS PRODUCED ALL RELEVANT DOCUMENTARY EVID ENCE IN SUPPORT OF ITS CLAIM AND TO ESTABLISH THE IDENTITY, CREDITWORTHINES S OF THE SHARE APPLICANT AND GENUINENESS OF THE TRANSACTION. HE HAS REFERRED TO THE RELEVANT DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE WHICH ARE PLACED AT PAGE NOS. 415 TO 605 OF THE PAPER BOOK AND SUBMITTED THA T THE ASSESSEE PRODUCED INCOME TAX RETURN OF THE SHARE APPLICANT, BOOKS OF ACCOUNT/FINANCIAL STATEMENTS FOR THE A.Y. UNDER CON SIDERATION, BANK STATEMENT SHOWING THE PAYMENTS MADE BY THE SHARE APP LICANT, LEDGER STATEMENT, SHARE ALLOTMENT ADVICE, AFFIDAVIT OF THE DIRECTOR OF THE SHARE APPLICANT COMPANY, FINANCIAL STATEMENT OF THE SHARE APPLICANT FOR SIX YEARS FROM F.Y. 2009-10 TO 2015-16 TO SHOW THE CREDITWORTH INESS OF THE SHARE APPLICANT AND AVAILABILITY OF THE FUNDS. HE HAS REF ERRED TO THE DETAILS AND SUBMITTED THAT THE SAID COMPANY WAS HAVING SUFFICIEN T FUND AS ITS IS ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 9 MANIFEST FROM THE FINANCIAL STATEMENT AND PARTICULA RLY THE SHARE CAPITAL AND RESERVES OF THE SAID COMPANY AS ON 31/3/2012 WAS RS. 97,21,54,685/- WHEREAS THE SAID COMPANY HAS PAID TH E SHARE APPLICATION MONEY TO THE ASSESSEE OF RS. 19.75 CRORES ONLY. THE DEPARTMENT HAS ACCEPTED THE TRANSACTION WHILE PASSING THE ASSESSMEN T ORDERS U/S 143(3) OF THE ACT IN THE SHARE APPLICANT. HE HAS REFERRED THE ASSESSMENT ORDERS FOR THE A.Y. 1998-99 TO 2001-02, 2008-09 AND 2014-1 5 WHICH WERE UNDERGONE SCRUTINY ASSESSMENT AND THE A.O. HAS ACCE PTED THE TRANSACTION OF INVESTMENT MADE BY THE SAID COMPANY IN THE SHARE S OF THE ASSESSEE. EVEN AS PER THE ROC RECORD, THE STATUS OF THE SAID COMPANY IS SHOWN AS ACTIVE AND NOT AS A SHELL COMPANY. HENCE, THE LD AR HAS SUBMITTED THAT ONCE THE ASSESSEE HAS PRODUCED ALL THE RELEVANT DOC UMENTS TO ESTABLISH THE IDENTITY, CREDITWORTHINESS OF THE SHARE APPLICA NT AND GENUINENESS OF THE TRANSACTION, WHICH WERE NOT DISTURBED BY THE DEP ARTMENT IN THE ASSESSMENT IN THE CASE OF THE SHARE APPLICANT THEN THE SAID TRANSACTION CANNOT BE TREATED AS THE BOGUS IN THE HAND OF THE A SSESSEE. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). THE LD AR HAS ALSO RELIED UPON THE SERIES OF DECISIONS ON THIS POINT AND SUBMITTED THA T ONCE THE ASSESSEE HAS DISCHARGED ITS ONUS BY PRODUCING THE DOCUMENTARY EV IDENCE THEN IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT BY THE ASS ESSING OFFICER, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT SUSTA INABLE. HE HAS ALSO ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 10 REFERRED TO THE REPORT OF THE KOLKATA INVESTIGATION WING AND SUBMITTED THAT EVEN THE NOTICE ISSUED U/S 133(6) OF THE ACT WA S DULY RESPONDED BY THE SAID COMPANY AND HENCE NO ADVERSE REPORT HAS BE EN GIVEN BY THE DDIT (INV), KOLKATA. THE ONLY OBJECTION IS NON-PRODUC TION OF THE DIRECTOR OF THE SAID COMPANY, HOWEVER, THE ASSESSEE HAS DULY PRODUCED THE AFFIDAVIT OF THE DIRECTOR OF THE SHARE APPLICANT. A S REGARDS THE UNSECURED LOAN TAKEN FROM THREE COMPANIES NAMELY BIRLA ART PV T. LTD., PRITHVI VINIMAY PVT. LTD. AND MACRO SOFT PVT. LTD. THE LD. A R HAS SUBMITTED THAT DURING THE YEAR ITSELF, THE ASSESSEE HAS REPAID THE ENTIRE LOAN AMOUNT AND NOTHING WAS OUTSTANDING AS ON 31/3/2010, THEREFORE, ONCE THE ASSESSEE HAS REPAID THE LOAN AMOUNT DURING THE YEAR UNDER CO NSIDERATION THEN THE ADDITION MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT IS NOT SUSTAINABLE AS THE SAID CREDIT WAS NOT MORE OUTSTAND ING IN THE BOOKS OF THE ASSESSEE. HE HAS REFERRED TO THE DETAILS OF THE LOAN AND THE REPAYMENT OF THE SAME DURING THE YEAR UNDER CONSIDE RATION. THE LD AR HAS POINTED OUT THAT THE LAST TRANSACTION OF REPAYM ENT WAS MADE ON 13/10/2009 AND THEREAFTER NOTHING WAS PENDING OUR O UTSTANDING IN RESPECT OF THESE LOAN AMOUNTS TAKEN FROM THESE THRE E COMPANIES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE A.O. HAS MADE THE ADDITION U/S 68 OF THE ACT IN ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 11 RESPECT OF UNSECURED LOAN AND SHARE CAPITAL RECEIVE D BY THE ASSESSEE, THE DETAILS OF WHICH ARE AS UNDER: ASSESSMENT YEAR NATURE OF ADDITION DESCRIPTION OF ADDITION ADDITION MADE AMOUNT TOTAL ADDITIONS FOR THE ASSESSMENT YEAR 2010 - 11 UNSECURED LOANS M/S BIRLA ARTS PVT. LTD. 7,76,00,000 UNSECURED LOANS M/S PRITHVI VINIMAY PVT. LTD 7,47,50,000 UNSECURED LOANS M/S MACROSOFT TECHNOLOGY PVT. LTD 8,50,000 SHARE CAPITAL M/S SANGAM DISTRIBUTORS PVT. LTD 3,10,00,000 SHARE CAPITAL M/S TEAC CONSULTANTS PVT. LTD 30,00,000 OTHERS DISALLOWANCE U/S 14A OF I.T. ACT. 52,43,029 OTHERS ADDITION ON ACCOUNT OF DISALLOWANCE OF RETENTION CHARGES 7,50,385 19,31,93,414 THE FIRST THREE TRANSACTIONS ARE IN RESPECT OF UNSEC URED LOANS TAKEN BY THE ASSESSEE FROM THREE COMPANIES. THERE IS NO DISPUTE T HAT ALL THESE LOAN AMOUNTS WERE REPAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION AND THE REPAYMENT OF LOAN WAS PAID ON 13/10/2009, T HEREFORE, AS ON THE CLOSING OF PREVIOUS YEAR I.E. 31/3/2010 NOTHING WAS OUTSTANDING IN RESPECT OF UNSECURED LOANS. ONCE THE RECEIPT AS WELL AS REPA YMENT OF THE LOAN IN QUESTION ARE THROUGH BANKING CHANNEL THEN EVEN IF T HE A.O. HAS DOUBTED THE TRANSACTION OF RECEIPT OF LOAN AS AN ACCOMMODAT ION ENTRY IF THE ASSESSEE HAS REPAID THE SAME DURING THE YEAR UNDER CONSIDERATION THEN IT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 12 HAS NEUTRALIZED THE EFFECT OF ACCOMMODATION ENTRY. EVEN OTHERWISE WE NOTE THAT THE A.O. HAS MADE THE ADDITION BASED ON T HE REPORT OF THE DDIT (INV.), KOLKATA AND WAS NOT HAVING ANY OTHER DOCUME NTARY EVIDENCE IN HIS POSSESSION TO SUPPORT THE DECISION OF TREATING THE TRANSACTION OF UNSECURED LOAN AS BOGUS TRANSACTION BEING ACCOMMODA TION ENTRIES. THE SAID REPORT OF THE DDIT(INV.), KOLKATA WAS ALSO NOT B ASED ON ANY DOCUMENTARY EVIDENCE BUT THE NARRATION OF THE STATE MENTS OF THE ALLEGED ENTRY OPERATORS, HOWEVER, THE A.O. WAS NOT HAVING EV EN THE STATEMENT OF THE ALLEGED ENTRY OPERATORS. ON THE CONTRARY, THE A SSESSEE PRODUCED ALL THE SUPPORTING DOCUMENTARY EVIDENCE WHICH INCLUDES THE ITR OF THE LOAN CREDITORS AND SHAREHOLDERS, THEIR FINANCIAL STATEME NTS INCLUDING THE BALANCE SHEET, BANK STATEMENT SHOWING THE ENTRY OF P AYMENT TO THE ASSESSEE AS WELL AS THE REPAYMENT MADE BY THE ASSESS EE OF THE LOAN AMOUNT IN CASE OF SHARE APPLICATION, THE ASSESSEE A LSO PRODUCED COPY OF THE LEDGER SHOWING THE TRANSACTION WITH SHARE APPLICA NT, SHARE ALLOTMENT ADVICE, AFFIDAVIT OF THE DIRECTORS OF THE COMPANIES WHO HAD PAID SHARE CAPITAL, FINANCIAL STATEMENT OF LAST 5-6 YEARS SHOWI NG THE SOURCE OF FUNDS WITH THE SHARE APPLICANTS AS WELL AS LOAN CREDITORS, COPY OF EARLIER ORDERS PASSED BY THE A.O. IN THE CASES OF SHARE APPLICANTS AND LOAN CREDITORS WHEREIN THE TRANSACTIONS OF GIVING LOAN AS WELL AS IN VESTMENT MADE IN THE SHARES OF THE ASSESSEE COMPANY WERE NOT DISTURBED BY THE A.O.. THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 13 ASSESSEE ALSO PRODUCED COPY OF ROC MASTER DATA WHER EIN ALL THESE COMPANIES STATUS WAS SHOWN AS ACTIVE OR AMALGAMATED IN SOME OF THE CASES. THERE IS NO DISPUTE THAT ALL THESE COMPANIES ARE REGISTERED NBFCS AND THE SUMMONS ISSUED BY THE DDIT(INV), KOLKATA WER E DULY RESPONDED BY THESE COMPANIES, THEREFORE, EVEN OTHERWISE THE EX ISTENCE OF THESE COMPANIES ARE NOT IN DISPUTE. THE WHOLE CASE OF THE A.O. IS BASED THAT THESE ARE SHELL COMPANIES, HOWEVER WHEN THESE COMPAN IES ARE REGISTERED NBFCS AND SUBJECTED TO SCRUTINY ASSESSMENT FOR ALL THE RELEVANT YEARS AND FURTHER THE ROC IS SHOWING THE STATUS OF THESE COMPA NIES AS ACTIVE THEN IN ABSENCE OF ANY MATERIAL TO SHOW THAT THESE COMPAN IES ARE SHELL COMPANIES. THE DECISION OF THE A.O. IS NOT BASED ON ANY COGENT MATERIAL OR EVIDENCE BUT MERELY BASED ON THE REPORT OF THE D DIT(INV.), KOLKATA WHEREIN IT IS ALLEGED THAT AS PER THE STATEMENTS OF THE ENTRY OPERATORS WHO ARE MANAGING AND CONTROLLING THESE COMPANIES THE N INDULGED IN PROVIDING ACCOMMODATIONS ENTRIES IN THE SHAPE OF SH ARE APPLICATION AS WELL AS LOAN ETC. WE NOTE THAT IN RESPECT OF THESE F IVE COMPANIES, THE ASSESSEE HAS PRODUCED FOLLOWING DOCUMENTS, WHICH ARE AS UNDER: M/S TEAC CONSULTANTS PVT. LTD (AY 2010-11). S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2010-11/VOL- II 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 477-478 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 14 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 479-484 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 485 4 COPY OF SHARE APPLICATION FORM OF EQUITY SHARE 486-487 5 COPY OF LEDGER SHOWING THE TRANSACTION WITH SHARE APPLICANT 488-489 6 SHARE ALLOTMENT ADVICE 490 7 COPY OF AFFIDAVIT OF MR JITENDRA SHARMA DIRECTOR OF COMPANY. 491-494 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. 495-501 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. 502-521 10 COPY OF ROC MASTER DATA. 522-523 11 COPY OF PAN CARD. 524 12 CERTIFICATE OF INCORPORATION. 525 13 COPY OF CERTIFICATE OF NBFC REGISTRATION. 526 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. 527-530 15 COPY OF REPLY IN RESPONSE TO SUMMON ISSUED TO THE COMPANY. 531-533 16 COPY OF LETTER FOR CONFIRMATION OF SOURCE OF FUNDS USED FOR APPLYING THE SHARES ALONG WITH SUPPORTING DOCUMENTS 534-537 M/S SANGAM DISTRIBUTORS PVT. LTD (AY 2010-11). S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2010-11/VOL- II 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 538-539 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 15 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 540-541 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 542-543 4 COPY OF SHARE APPLICATION FORM OF EQUITY SHARE 544-546 5 COPY OF AFFIDAVIT OF MRS NEELAM GAUTAM DIRECTOR OF COMPANY. 547-550 6 COPY OF ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES IN THIS COMPANY 551-577 7 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, AND 31.03.2013. 578-581 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, AY 2007-08 AND 2013-14. 582-593 9 COPY OF ROC MASTER DATA. 594-595 10 COPY OF PAN CARD. 596 11 CERTIFICATE OF INCORPORATION. 597 M/S BIRLA ARTS PVT LTD (AY 2010-11). S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2010-11/VOL- III 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 598-599 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 600-606 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 607-613 4 COPY OF ACCOUNT CONFIRMATION FROM BOOKS OF UNSECURED LOAN CREDITOR 614-615 5 COPY OF LEDGER SHOWING THE TRANSACTION WITH UNSECURED LOAN CREDITOR 616-617 6 COPY OF AFFIDAVIT OF MRS NEELAM GAUTAM DIRECTOR OF COMPANY. 618-621 7 COPY OF CALCUTTA HIGH COURT ORDER REGARDING THE AMALGAMATION OF ANOTHER COMPANIES WITH ASSESSEE COMPANY 622-648 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 16 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. 649-655 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, AY 2012-13, AY 2013-14 AND 2014-15. 656-676 10 COPY OF ROC MASTER DATA. 677-678 11 COPY OF PAN CARD. 679 12 CERTIFICATE OF INCORPORATION. 680 13 COPY OF CERTIFICATE OF NBFC REGISTRATION. 681 M/S MACROSOFT TECHNOLOGY PRIVATE LIMITED (AY 2010- 11). S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2010-11/VOL- III 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 682-683 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 684-688 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 689-692 4 COPY OF ACCOUNT CONFIRMATION FROM BOOKS OF UNSECURED LOAN CREDITOR 693 5 COPY OF LEDGER SHOWING THE TRANSACTION WITH UNSECURED LOAN CREDITOR 694 6 COPY OF AFFIDAVIT OF MRS DEEPA KRIPLANI DIRECTOR OF COMPANY. 695-698 7 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. 699-705 8 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2009-10, AY 2011-12, 2012-13 AND 2014-15. 706-725 9 COPY OF ROC MASTER DATA. 726-727 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 17 10 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGISTRAR OF COMPANY REGARDING MODIFICATION OF CHARGES 728 11 COPY OF PAN CARD. 729 12 CERTIFICATE OF INCORPORATION. 730 13 COPY OF SUMMON NO. 2116 DATED 31.10.2017 ISSUED BY DCIT (CC), KOTA U/S 131(1) OF THE INCOME TAX ACT 1961. 731 14 COPY OF REPLY IN RESPONSE TO SUMMON NO. 2116 DATED 31.10.2017 ISSUED BY DCIT (CC), KOTA U/S 131(1) OF THE INCOME TAX ACT 1961. 732-733 15 COPY OF NOTICE NO. 1612 DATED 21.09.2017 ISSUED BY DCIT (CC), KOTA U/S 133(6) OF THE INCOME TAX ACT 1961. 734 16 COPY OF REPLY IN RESPONSE TO NOTICE NO. 1612 DATED 21.09.2017 ISSUED BY DCIT (CC), KOTA U/S 133(6) OF THE INCOME TAX ACT 1961 ALONG WITH DISPATCH PROOF. 735-736 M/S PRITHVI VINIMAY PRIVATE LIMITED (AY 2010-11) S. NO. PARTICULARS OF DOCUMENTS S. NO. OF PB WHERE DOCUMENTS ANNEXED AY 2010-11/VOL- III 1 COPY OF ACK. OF ITR OF AY 2010-11 ALONG WITH COMPUTATION SHEET 737-738 2 COPY OF BALANCE SHEET OF AY 2010-11 ALONG WITH ENCLOSURES 739-744 3 COPY OF RELEVANT PAGE OF BANK STATEMENT SHOWING THE ENTRY OF PAYMENT MADE TO ASSESSEE. 745-768 4 COPY OF ACCOUNT CONFIRMATION FROM BOOKS OF UNSECURED LOAN CREDITOR 769-770 5 COPY OF LEDGER SHOWING THE TRANSACTION WITH UNSECURED LOAN CREDITOR 771-772 6 COPY OF AFFIDAVIT OF MR. RAVI MUNDRA DIRECTOR OF COMPANY. 773-776 7 COPY OF ORDER PASSED BY CALCUTTA HIGH COURT REGARDING AMALGAMATION OF OTHER COMPANIES IN THIS COMPANY 777-802 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 18 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31.03.2011, 31.03.2012, AND 31.03.2013. 803-806 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOVE NAMED COMPANY FOR AY 2006-07, AND 2014-15. 807-815 10 COPY OF ROC MASTER DATA. 816-817 11 COPY OF CERTIFICATE DATED 08.02.2013 ISSUED BY REGISTRAR OF COMPANY REGARDING MODIFICATION OF CHARGES 818 12 COPY OF PAN CARD. 819 13 CERTIFICATE OF INCORPORATION. 820 14 COPY OF SUMMON NO. 1440 DATED 13.10.2017 AND REMINDER SUMMON NO.1578 DATED 31.10.2017 ISSUED BY DEPUTY DIRECTOR INVESTIGATION, UNIT 1(3) KOLKATA U/S 131 OF THE INCOME TAX ACT 1961. 821-824 15 COPY OF REPLY IN RESPONSE TO SUMMON NO. 1440 DATED 13.10.2017 AND REMINDER SUMMON NO.1578 DATED 31.10.2017 ISSUED BY DEPUTY DIRECTOR INVESTIGATION, UNIT 1(3) KOLKATA U/S 131 OF THE INCOME TAX ACT 1961. 825-827 WE FURTHER NOTE THAT ALL THESE COMPANIES WERE ALSO A SSESSED BY THE A.O. U/S 143(3) OF THE ACT AND THE ASSESSEE PRODUCED THE ASSESSMENT ORDERS PASSED FOR THE A.Y. 2005-06 TO 2014-15. ONCE THE ID ENTITY AND CREDITWORTHINESS OF THESE COMPANIES ARE PROVED WITH T HE SUPPORTING EVIDENCE THEN IN ABSENCE OF ANY CONTRARY MATERIAL T O DISPROVE THE EVIDENCE PRODUCED BY THE ASSESSEE, THE ADDITION MAD E BY THE A.O. IS NOT SUSTAINABLE. IT IS ALSO NOT IN DISPUTE THAT ALL THE TRANSACTIONS ARE CARRIED OUT THROUGH BANKING CHANNEL AND THE A.O. HAS NOT BR OUGHT ANY MATERIAL OR FACT ON RECORD TO SHOW THAT PRIOR TO THE TRANSACT ION OF LOAN AND SHARE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 19 CAPITAL, ANY CASH DEPOSIT IS MADE IN THE BANK ACCOU NT OF THE SHARE APPLICANT AND LOAN CREDITOR COMPANY. EVEN THE ASSES SEE HAS PRODUCED THE DETAILS OF THE AVAILABILITY OF THE FUNDS WITH ALL TH ESE COMPANIES AND THOSE FINANCIAL STATEMENTS SHOWING THE FUNDS WITH THESE COM PANIES WERE ACCEPTED BY THE A.O. WHILE PASSING THE ASSESSMENT OR DER U/S 143(3) OF THE ACT. AT THE OUTSET, WE NOTE THAT IN THE CASE OF GROUP CONCERN M/S KOTA DALL MILL VS DCIT IN ITA NOS. 997 TO 1002/JP/2018, 1119/JP/2018, 1057 TO 1062/JP/2018 AND 1210/JP/2018, THE TRIBUNAL WHILE DEC IDING THE IDENTICAL ISSUES VIDE ORDER DATED 31/12/2018 HAS CONSIDERED T HE TRANSACTIONS OF UNSECURED LOAN TAKEN FROM THESE COMPANIES NAMELY BI RLA ART PVT. LTD., M/S. TEAC CONSULTANT PVT. LTD AND M/S. SANGAM DISTRI BUTORS PVT. LTD. IN PARA 15 AS UNDER: 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE THE ADDITION ON ACCOUNT OF UNSECURED LOANS TAKEN FROM ALL THE PARTIES WHEREAS THE LD. CIT (A) HAS DELETED THE ADDITION IN RESPECT OF THE LOANS TAKEN FROM M/S. BIRLA ARTS PVT. LTD., M/S. TEAC CONSULTANT PVT. LTD AND M/S. S ANGAM DISTRIBUTORS PVT. LTD. AND CONFIRMED THE ADDITION MADE ON ACCOUN T OF LOAN TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD. THE ISSUE OF ADDITION MADE IN RESPECT OF THE UNSECURED LOANS TAKEN FROM M/S. JALS AGAR COMMERCE PVT. LTD. WAS CONSIDERED AND DECIDED BY US IN THE ASSESS EES APPEAL. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LD. CIT (A ) AS THE UNSECURED LOANS TAKEN FROM THESE THREE COMPANIES WERE DELETED ON THE GROUND THAT THE AO WAS NOT HAVING ANY MATERIAL TO SUBSTANT IATE THAT THESE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 20 COMPANIES ARE CONTROLLED BY SO CALLED ENTRY OPERATO RS. 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 CON SULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED ADVERSE FINDINGS ALONGWITH ELOQUENT EVIDENCES IN TH E FORM OF STATEMENT ON OATH OF RELEVANT ENTRY OPERATORS ARE N OT VISIBLE IN THE REPORTS DATED 28.11.2017 AND 06.12.2017 FROM INVEST IGATION 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 THE ACT WAS I SSUED TO THIS COMPANY, EITHER BY THE AO OR BY THE CONCERNED AO OR BY THE DDIT (INV.) KOLKATA. THIS SHOWS THAT NO INDEPENDENT ENQUIRY WAS DONE BY THE AO TO ESTABLISH THAT THE SAID COMPANIES WERE SHELL COMPANIES, BLIND RELIANCE HAS BEEN PLACED BY THE AO ON THE INVESTIGATION REPORT OF THE DDIT, KOLKATA. ALSO, ON BARE PERUSAL OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE NAME O F 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. 6.3 AS FAR AS THE REMAINING LENDER COMPANIES NAMELY , M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DISTRIBU TORS PVT. LTD. ARE CONCERNED, IT IS EVIDENT FROM THE DOCUMENTS PLA CED 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 NOT ICES 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 PROVIDING UNSECURED LOAN TO THE APPELLANT AND SOURCE OF PROVIDING THE S AID LOAN. ALSO, IT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 21 IS EVIDENT FROM THE ASSESSMENT ORDER THAT NO STATEM ENT/EVIDENCE HAS BEEN RELIED UPON OR PROVIDED BY THE AO FOR SUBS TANTIATING THAT THESE COMPANIES ARE CONTROLLED BY THE SO-CALLED ENT RY 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 ACCOUNT S AS WELL AS BANK STATEMENT REFLECTING THE TRANSACTIONS WITH OTHER SU BSTANTIATING DOCUMENTS ALONG WITH ASSESSMENT ORDERS IN CASE OF L ENDER COMPANIES, WHICH ARE AVAILABLE AT PAGE NO.443 TO 64 4 OF PB. FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD, IDENT ITY, 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 HEL D ' IF THE LOANS ARE GIVEN BY AN ACCOUNT PAYING CHEQUE, IT AMOUNTS T O IDENTIFICATION OF THE PARTIES AND DISCHARGE OF BURDEN BY THE BORRO WER .' 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 FIN DING OF ANY INVESTIGATION CONDUCTED BY THE DEPARTMENT IN RELATI ON TO THESE COMPANIES. THEREFORE, IN THE ABSENCE OF ANY INDEPEN DENT INQUIRY AND ANY ADVERSE FINDINGS TO REBUT THE EVIDENCES FIL ED BY THE APPELLANT, I FIND THAT THE ADDITION IN RESPECT OF U NSECURED LOANS FROM 03 COMPANIES NAMELY, M/S BIRLA ARTS PRIVATE LI MITED, M/S TEAC CONSULTANTS PRIVATE LIMITED AND M/S SANGAM DIS TRIBUTORS PRIVATE LIMITED TOTALING TO RS. 12,36,40,000/- IS U NJUSTIFIED; FIRSTLY, ON 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 PROVING TH E IDENTITY, ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 22 CREDITWORTHINESS OF CREDITOR AND GENUINENESS OF THE TRANSACTION. IN PARTICULAR, NONE OF THE MATERIAL OR STATEMENTS HAVE BEEN PROVIDED IN THE ASSESSMENT ORDER WHEREIN NAMES OF THE SAID C OMPANIES ARE MENTIONED. NOTABLY, THE TRANSACTIONS WITH THE SAID FOUR COMPANIES ARE DULY VERIFIABLE FROM CONFIRMATION OF ACCOUNTS P LACED 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 531 & 571 TO 587 PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT HAS DULY PROVED THE IDENTITY, C REDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. 6.5 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EV IDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSACTIONS HAVE BEEN DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MAKING OF LOANS, THERE IS BALANCE AVAILABLE IN THE ACCOUNTS OF THE BORROWE RS, WHICH PROVES THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSAC TIONS. THERE IS NO CASE OF ANY CASH DEPOSITION IN THE ACCOUNT OF AN Y OF THE CREDITORS AT THE TIME OF ISSUING CHEQUES/RTGS IN FA VOUR OF THE ASSESSEE. THEREFORE, IN VIEW OF THE SETTLED JUDICIA L PRECEDENT IN CASE OF CIT V. VARINDER 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. CIT V. BAHRI BROS. (P) LTD. [1985] 154 I TR 244 (PAT) AND OTHERS AS REFERRED BY THE APPELLANT, I AM OF TH E CONSIDERED VIEW THAT APPELLANT DULY DISCHARGED ITS BURDEN CAST ED 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 M/S BIRLA ARTS PRIVATE LI MITED, HOWEVER AS FAR AS THE COMPANIES M/S TEAC CONSULTANTS PRIVAT E LIMITED AND M/S SANGAM DISTRIBUTORS PRIVATE LIMITED ARE CONCERN ED, THESE HAVE DULY REPLIED TO THE NOTICES ISSUED BY DCIT/DDI T(INV.), KOLKATA IN RESPECT OF COMMISSION, THESE FACTS REMAI N UNCONTROVERTED BY THE AO. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 23 6.6 THE AO DURING ASSESSMENT PROCEEDINGS TOOK NEGAT IVE INFERENCE FROM THE STATEMENT OF SHRI RAJENDRA AGARWAL RECORDE D DURING SEARCH U/S 132(4) WHEREIN HE MADE DISCLOSURE IN RES PECT OF LONG TERM CAPITAL GAIN IN HIS INDIVIDUAL HANDS. I HAVE G ONE THROUGH THE STATEMENT OF SHRI RAJENDRA AGARWAL AND HIS DISCLOSU RE MADE IN HIS STATEMENT, NOTABLY, THE DISCLOSURE MADE WAS IN HIS PERSONAL CAPACITY ONLY AND WITH RESPECT TO LTCG ONLY AND NOT IN RESPECT OF ANY OTHER TRANSACTIONS BE IT BE RECEIPT OF UNSECURE D LOANS. FURTHER, RAJENDRA AGARWAL IS NOT A PARTNER IN THE APPELLANT FIRM. THEREFORE, I FIND THAT IN THE ABSENCE OF ANY NEXUS OF THE STATEMENT OF SHRI RAJENDRA AGARWAL WITH THE APPELLANT 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 BROUGHT ON REC ORD BY THE APPELLANT. THE AO HAS OBSERVED THAT ON THE DATE OF DEBIT IN THE ACCOUNT STATEMENT OF CREDITOR, THERE IS CORRESPONDI NG CREDIT ENTRY OF EQUAL AMOUNT, HOWEVER, THIS OBSERVATION OF THE AO I S ITSELF NOT SUFFICIENT TO PROVE BEYOND DOUBT THAT APPELLANT ROU TED ITS UNACCOUNTED INCOME BY THESE COMPANIES RATHER IT PRO VES THE SOURCE IN THE HANDS OF THE APPELLANT. IT IS USUAL BUSINESS PRACTICE, WHILE MAKING LOANS TO PARTY, FUNDS ARE REQUIRED TO BE ARR ANGED BY THE LENDER, THEREFORE REFLECTION OF SUCH ENTRIES IN BAN K STATEMENT 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 AMOUNT IS TH E INCOME OF THE ASSESSEE(BORROWER) FROM SOME UNDISCLOSED SOURCES WH ILE IN THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 24 PRESENT CASE, NO EVIDENCES OF ANY GENERATION OF UND ISCLOSED INCOME OR THEIR UTILIZATION IN THE FORM OF UNSECURE D 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 MISCONSTRUE D, 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 MENTIONED IN PARA 16 AS REPR ODUCED IN PARA NO. 4.2 ABOVE. 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 APPELLAN T AND ONCE THIS BURDEN IS DISCHARGED U/S 68 OF THE ACT, NO ADDITION 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 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 MARK HOSPI TALS (P.) LTD. [2015] 373 ITR 115 (MADRAS)(MAG.), COMMISSIONE R OF INCOME-TAX, AJMER V. JAI KUMAR BAKLIWAL [2014] 366 ITR 217 (RAJASTHAN), CIT V/S. CREATIVE WORLD TELEFILMS LTD (2011) 333 ITR 100 (BOM), COMMISSIONER OF INCOME-TAX-I V. PATE L RAMNIKLALHIRJI [2014] 222 TAXMAN 15 (GUJARAT)(MAG.) , PRINCIPAL ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 25 COMMISSIONER OF INCOME-TAX-4 V. G & G PHARMA INDIA LTD. [2016] 384 ITR 147 (DELHI) REFERRED ABOVE WHICH HAVE BEEN ALSO BEEN FOLLOWED RECENTLY BY HONBLE DELHI TRIBUNAL IN CASE OF ITO VS. SOFTLINE CREATIONS (P) LTD. IN ITA NO. 744/DEL/2012 VIDE ITS ORDER DATED 10.02.2016. FURTHER, HONBLE APEX COURT AS WE LL AS HIGH COURT HAS HELD THAT ONCE THE IDENTITY OF CREDITOR I S ESTABLISHED, THE DEPARTMENT IS FREE TO REOPEN THE ASSESSMENT OF CRED ITOR AND NO ADDITION CAN BE MADE IN THE HAND OF BORROWER AS RIG HTLY HELD IN CASE OF CIT V/S LOVELY EXPORTS PVT. LTD. [2008] 216 CTR 195 (SC), COMMISSIONER OF INCOME-TAX V. ROCK FORT METAL & MINERALS LTD. [2011] 198 TAXMAN 497 (DELHI), DIVINE LEASING & FINANCE LIMITED [2008] 299 ITR 268 (DELHI) CIT V. ORISSA CO RPORATION (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 JUDG MENT CIT V/S VICTOR ELECTRODES LTD. [2010] 329 ITR 271, THE APPE LLANT CANNOT BE FASTENED UPON THE BURDEN TO PRODUCE THE LENDERS BEFORE THE ASSESSING AUTHORITIES THOUGH IN THE INSTANCE CASE, APPELLANT HAS 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 ADDITION F OR ALLEGED NON- APPEARANCE BY THE CONCERNED PERSON BEFORE THE AUTHO RITIES THOUGH THEY COMPLIED WITH THE NOTICES/SUMMON ISSUED TO THE M. 6.12 IN THE PRESENT CASE IN HAND, I FIND THAT AO AS KED ASSESSEE TO PRODUCE LENDER COMPANIES WITHOUT VERIFYING THE FACT S OF LENDING MONEY FROM RESPECTIVE JURISDICTION ASSESSING OFFICE R AND WITHOUT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 26 VERIFYING THEIR RETURNS OF INCOME AND BALANCE SHEET WHEREIN THESE TRANSACTIONS ARE REPORTED, ACCORDINGLY THE AO HAS N OT FOLLOWED THE PRINCIPLES LAID DOWN UNDER SECTION 68 OF THE ACT. T HE HONBLE GUJRAT HIGH COURT IN THE CASE OF COMMISSIONER OF IN COME-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 WHO ARE A LL INCOME TAX ASSESSEES WHOSE PAN HAVE BEEN DISCLOSED, THE INITIA L BURDEN UNDER SECTION 68 WAS DISCHARGED. IT FURTHER APPEARS THAT THE ASSESSEE HAD ALSO PRODUCED CONFIRMATION LETTERS GIV EN 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 ASSESSING OFFICE R OF THOSE LENDERS, WHETHER IN THEIR RESPECTIVE RETURNS THEY H AD SHOWN EXISTENCE OF SUCH AMOUNT OF MONEY AND HAD FURTHER S HOWN THAT THOSE AMOUNT OF MONEY HAD BEEN LENT TO THE ASSESSEE . IF BEFORE VERIFYING OF SUCH FACT FROM THE ASSESSING OFFICER O F THE LENDERS OF THE ASSESSEE, THE ASSESSING OFFICER DECIDES TO EXAM INE THE LENDERS AND ASKS THE ASSESSEE TO FURTHER PROVE THE GENUINEN ESS AND CREDITWORTHINESS OF THE TRANSACTION, THE ASSESSING OFFICER DOES NOT FOLLOW THE PRINCIPLE LAID DOWN UNDER SECTION 68. [P ARA 16] IN THE INSTANCE CASE BEFORE ME, THE AO HAS NOT FOLL OWED 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). 6.13 IT IS NOTED THAT NO CLINCHING EVIDENCES HAS BE EN BROUGHT ON RECORD THAT ANY UNACCOUNTED INCOME WAS ROUTED THROUGH UNSE CURED LOANS BY THE APPELLANT FIRM AS NO EVIDENCES AS TO RECEIPT /PAYMENT OF CASH FOR RECEIPT OF UNSECURED LOANS WERE FOUND DURI NG SEARCH IN CASE OF THE APPELLANT. MERE SUSPICION HOWSOEVER STR ONG CANNOT TAKE PLACE OF EVIDENCE. THUS, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH TO REBUT THE EVIDENCES FILED BY THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 27 APPELLANT, THE IMPUGNED ADDITION MADE IN RESPECT OF UNSECURED LOAN U/S 68 OF THE ACT IS LEGALLY UNTENABLE AND UNJ USTIFIED. 6.14 IN VIEW OF THE ABOVE DISCUSSION OF RELEVANT F ACTS AND FOLLOWING THE SEVERAL RATIOS ON THE SUBJECT FROM HONBLE APEX COU RT, HIGH COURTS INCLUDING JURISDICTIONAL HIGH COURTS, TRIBUN ALS INCLUDING JURISDICTIONAL TRIBUNALS, THE IMPUGNED ADDITION IN RESPECT OF UNSECURED LOANS FROM 03 COMPANIES NAMELY, M/S BIRLA ARTS PRIVATE LIMITED, M/S TEAC CONSULTANTS PRIVATE LIMITED AND M /S SANGAM DISTRIBUTORS PRIVATE LIMITED TOTALING TO RS.12,36,4 0,000/- 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 WAS INVOLVED IN PROVIDING ACCOMMODATION ENT RY AND CONTROLLED BY THE ENTRY OPERATOR WHEREAS IN RESPECT OF THESE THREE COMPANIES THE AO WAS NOT HAVING ANY DOCUMENT OR EVEN THE STATEMENT OF ANY PERSON WHO ARE ENTRY OPERATORS AND CONTROLLING THESE COMPANIES SO AS TO ESTABLISH THAT THE TRANSACTIONS ARE IN THE NATURE OF BOGUS ACCOMMODATI ON ENTRIES. WE HAVE ALREADY CONSIDERED THE ISSUE ON MERITS IN R ESPECT OF THE ADDITION MADE ON ACCOUNT OF UNSECURED LOANS TAKEN F ROM M/S. JALSAGAR COMMERCE PVT. LTD. WHEREAS THE LOANS TAKEN FROM THESE COMPANIES ARE EVEN AS PER THE REVENUE ON BETTER FOO TINGS OF GENUINENESS THAN M/S. JALSAGAR COMMERCE PVT. LTD. THERE IS NO DISPUTE THAT THE AO WAS NOT HAVING ANY EVIDENCE OR EVEN ANY STATEMENT TO IMPUGN THE TRANSACTIONS AS BOGUS ACCOM MODATION ENTRIES. FURTHER, THE ASSESSEE HAS PRODUCED ALL TH E RELEVANT SUPPORTING DOCUMENTARY EVIDENCE AS WE HAVE REPRODUC ED IN THE FOREGOING PARAS AS REFERRED BY THE LD. A/R OF THE A SSESSEE AND ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 28 THESE CREDITOR COMPANIES WERE SUBJECT TO REGULAR AS SESSMENTS AND SCRUTINY ASSESSMENTS UNDER SECTION 143(3) WERE COMPLETED BY THE DEPARTMENT AS PER THE DETAILS REPRODUCED. TH EREFORE, ONCE THESE CREDITOR COMPANIES ARE REGULARLY ASSESSED TO TAX AND DULY EXAMINED BY THE DEPARTMENT AT THE SCRUTINY ASSESSME NTS, THEN THE TRANSACTIONS OF LOANS CANNOT BE HELD AS BOGUS W HEN THE SAME WERE ACCEPTED IN THE HANDS OF THE CREDITORS. WE FU RTHER NOTE THAT THESE COMPANIES WERE HAVING SUFFICIENT FUNDS IN THE SHAPE OF SHARE CAPITAL, RESERVES AND SURPLUS. THE DETAILS O F 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 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 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 29 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 GRAN TING 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 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. 7. THE REMAINING TWO COMPANIES NAMELY, M/S PRITHVI VI NIMAY PVT. LTD. AND M/S MACRO SOFT TECHNOLOGY PVT. LTD. WERE ALSO CON SIDERED AND DECIDED BY THE TRIBUNAL IN THE CASE OF M/S KOTA DALL MILL (SUPRA) IN PARA 19 AS UNDER: 19. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THE AO HAS MADE TH E ADDITION OF ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 30 THE AMOUNT OF PARTNERS CAPITAL FROM THESE FOUR COR PORATE ENTITIES ON IDENTICAL REASONING AS THE ADDITION WAS MADE ON ACCOUNT OF UNSECURED LOANS. DURING THE YEAR UNDER CONSIDERATIO N, THE ASSESSEE FIRM RECEIVED RS. 42,47,25,000/- ON ACCOUN T OF PARTNERS CAPITAL FROM THE CORPORATE PARTNERS AS UNDER :- S. NO. NAME OF THE PARTNER ADDITION OF CAPITAL DURING AY UNDER APPEAL 1 M/S BANSIDHAR ADVISORY PRIVATE LIMITED RS. 13,22,20,000/- 2 M/S VASUNDHARA ADVISORY PRIVATE LIMITED RS. 8,96,45,000/- 3 M/S PRITHVI VINIMAY PRIVATE LIMITED RS. 13,93,45,000/- 4 M/S MACRO SOFT TECHNOLOGY PRIVATE LIMITED RS. 6,35,15,000/- TOTAL RS. 42,47,25,000/- WE FIND THAT THE ASSESSEE PRODUCED ALL THE RELEVAN T DOCUMENTARY EVIDENCE IN SUPPORT OF THE TRANSACTIONS BEFORE THE AO. THE SUMMARY OF THESE DOCUMENTS ARE AS UNDER :- S.NO PARTICULARS PAPER BOOK PAGE NO. M/S VASUNDHARA ADVISORY PVT. LTD. 1 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 843-845 2 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 846-847 3 COPY OF BALANCE SHEET OF AY 2010-11 848-855 4 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 856-859 5 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 860-872 6 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S VASUNDHARA ADVISORY PVT LTD, 873-875 7 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 876-900 8 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 901-904 9 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2014-15. 905-908 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 31 10 COPY OF ROC MASTER DATA. 909 11 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 910 12 COPY OF PAN CARD. 911 13 COPY OF SUMMON NO. 1439 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1579 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATION ), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 912-915 14 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPATCHED PR OOF 916-918 M/S. PRITHIVI VINIMAY PVT. LTD. 15 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 919-921 16 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 922-923 17 COPY OF BALANCE SHEET OF AY 2010-11 924-942 18 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 943-946 19 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE 947-958 20 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S PRITHVI VINIMAY PVT LTD, 959-962 21 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 963-987 22 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 988-991 23 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2006-07 AND 2014-15. 992-1000 24 COPY OF ROC MASTER DATA. 1001-1002 25 COPY OF CERTIFICATE DATED 08.02.2013 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1003 26 COPY OF PAN CARD. 1004 27 COPY OF SUMMON NO. 1440 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1578 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATIO N), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 1005-1008 28 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPLACED PRO OF 1009-1011 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 29 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 1012-1013 30 COPY OF ACK. OF ITR OF AY 2010 AND COMPUTATION OF T OTAL INCOME. 1014-1015 31 COPY OF BALANCE SHEET OF AY 2010-11 1016-1024 32 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 1025-1027 33 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 1028-1033 34 COPY OF AFFIDAVIT OF DEEPA KRIPLANI DIRECTOR OF COM PANY. 1034-1037 35 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. 1038-1044 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 32 36 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2009-10, 2011-12, AY 2012-13 AND 2014-15. 1045-1064 37 COPY OF ROC MASTER DATA. 1065-1066 38 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1067 39 COPY OF PAN CARD. 1068 40 COPY OF NOTICE NO. 1604 DATED 21.09.2017 ISSUED BY DCIT, CC, KOTA U/S 131 OF INCOME TAX ACT, 1961. 1069 41 COPY OF REPLY OF NOTICE SUBMITTED BY THE COMPANY 1070 42 COPY OF SUMMON NO. 2115 DATED 31.10.2017 ISSUED BY DCIT, CC, KOTA U/S 131 OF INCOME TAX ACT, 1961. 1071 43 COPY OF REPLY OF NOTICE SUBMITTED BY THE COMPANY ON 13.11.2017 AND 23.11.2017. 1072-1074 M/S BANSHIDHAR ADVISORY PVT. LTD 44 COPY OF LEDGER A/C OF PARTNER FROM BOOKS OF ACCOUNT S OF ASSESSEE. 1075-1077 45 COPY OF ACK. OF ITR OF AY 2010-11 AND COMPUTATION O F TOTAL INCOME. 1078-1079 46 COPY OF BALANCE SHEET OF AY 2010-11 1080-1089 47 CONFIRMATION OF A/C OF THE ASSESSEE FROM BOOKS OF A CCOUNTS OF PARTNER. 1090-1093 48 COPIES OF RELEVANT BANK A/C OF PARTNER SHOWING THE ENTRIES OF PAYMENT MADE TO ASSESSEE AGAINST CAPITAL INTRODUCE. 1094-1100 49 COPY OF AFFIDAVIT EXECUTED BY MR. RAVI MUNDRA DIREC TOR OF DOSHI MANAGEMENT PVT. LTD ON BEHALF OF AMALGAMATED COMPAN Y M/S BANSHIDHAR ADVISORY PVT LTD, 1101-1103 50 COPY OF ORDER OF CALCUTTA HIGH COURT REGARDING AMAL GAMATION OF COMPANY IN DOSHI MANAGEMENT PVT. LTD 1104-1128 51 COPY OF BALANCE SHEET OF COMPANY OF 31.03.2010, 31. 03.2011, 31.03.2012 AND 31.03.2013. 1129-1132 52 COPY OF ASSESSMENT ORDER PASSED IN THE CASE OF ABOV E NAMED COMPANY FOR AY 2014-15. 1133-1137 53 COPY OF ROC MASTER DATA. 1138-1139 54 COPY OF CERTIFICATE DATED 06.11.2011 ISSUED BY REGI STRAR OF COMPANIES REGARDING MODIFICATION OF CHARGES/MORTGAGE. 1140 55 COPY OF PAN CARD. 1141 56 COPY OF SUMMON NO. 1438 DATED 13.10.2017 AND REMIND ER NOTICE NO. 1580 DATED 31.10.2017 ISSUED BY DDIT (INVESTIGATIO N), UNIT-1(3), KOLKATA U/S 131 OF INCOME TAX ACT, 1961. 1142-1145 57 COPY OF REPLY SUBMITTED BY THE COMPANY IN RESPONSE TO SUMMON/NOTICE ISSUED TO IT ALONG WITH DISPATCHED PR OOF 1146-1148 THUS IT IS APPARENT THAT IN SUPPORT OF THE CLAIM OF IDENTITY OF THE CORPORATE PARTNERS, THEIR CAPACITY AND GENUINENESS OF THE TRA NSACTIONS, RELEVANT DOCUMENTARY EVIDENCES WERE ALREADY FILED BEFORE THE AO. THE ASSESSEE HAS ALSO PRODUCED THE ASSESSMENT ORDERS PASSED UNDER SE CTION 143(3) FOR VARIOUS ASSESSMENT YEARS IN CASE OF THESE FOUR CORP ORATE PARTNERS WHO HAVE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 33 INTRODUCED THE PARTNERS CAPITAL IN THE ASSESSEE FI RM. THE DETAILS OF THE ASSESSMENT ORDERS PASSED UNDER SECTION 143(3) ARE A S UNDER :- ASSESSMENT U/S 143(3) NAME OF COMPANY ASSESSMENT YEAR PAPER BOOK PAGE NO. M/S VASUNDHARA ADVISORY PVT. LTD. 2014-15 905 M/S PRITHIVI VINIMAY PVT. LTD. 2006-07 992 M/S PRITHIVI VINIMAY PVT. LTD. 2014-15 998 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2009-10 1048-10 50 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2011-12 1052-10 53 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2012-13 1059-10 60 M/S MACRO SOFT TECHNOLOGY PVT. LTD. 2014-15 1061-10 62 M/S BANSHIDHAR ADVISORY PVT. LTD 2014-15 1133-1134 ALL THESE FOUR COMPANIES STATUS HAS BEEN SHOWN IN T HE MASTER DATA OF ROC AS ACTIVE AND THREE OF WHICH, NAMELY, M/S. BANSHI DHAR ADVISORY PVT. LTD., M/S.PRITHVI VINIMAY PVT. LTD. AND M/S. VASUNDHARA A DVISORY PVT. LTD. STATUS WAS SHOWN AS AMALGAMATED. THEREFORE, THESE COMPA NIES HAVE ALREADY UNDER GONE PROCESS OF AMALGAMATION THROUGH THE APPR OVAL OF THE HONBLE HIGH COURT. HENCE, THERE CANNOT BE ANY DISPUTE ABO UT THE IDENTITY AND THE AFFAIRS OF THESE COMPANIES AS GENUINE. THE ASSESSE E ALSO PRODUCED THE RECORDS ABOUT THE AVAILABILITY OF THE FUNDS WITH TH ESE FOUR COMPANIES WHICH WERE SUFFICIENT TO INTRODUCE THE PARTNERS CAPITAL. THE DETAILS OF THE SOURCE OF FUNDS OF THESE FOUR COMPANIES AS SUBMITTED BY TH E ASSESSEE ARE AS UNDER:- M/S VASUNDHRA ADVISORY PVT. LTD. ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2006-07 2005-06 5,76,00,000 2010-11 2009-10 6,61,50,000 2011-12 2010-11 5,43,50,000 2014-15 2013-14 10,82,35,000 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 34 M/S PRITHVI VINIMAY PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2005-06 2004-05 1,51,00,000 2006-07 2005-06 4,68,20,000 2007-08 2006-07 2,72,20,000 2010-11 2009-10 7,84,00,000 2011-12 2010-11 1,96,00,000 2014-15 2013-14 12,87,50,000 M/S MACRO SOFT TECHNOLOGY PVT.LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2002-03 2001-02 9,98,000 2004-05 2003-04 9,75,00,000 M/S BANSIDHAR ADVISORY PVT. LTD ASSESSMENT YEAR FINANCIAL YEAR SHARE CAPITAL RAISED 2006-07 2005-06 5,76,00,000 2010-11 2009-10 10,64,00,000 2011-12 2010-11 1,61,00,000 2014-15 2013-14 15,00,00,000 THE ASSESSEE HAS ALSO SUBMITTED THE RECORDS REGARDI NG THE CORPORATE GUARANTEE OF RS. 73.60 CRORES GIVEN BY THE SBBJ IN FAVOUR OF M/S. BANSIDHAR ADVISORY PVT. LTD. AND, THEREFORE, IT WAS BROUGHT ON RECORD THE FACT THAT THE BANK HAS ISSUED THE CORPORATE GUARANT EE ONLY AFTER VERIFICATION OF THE FINANCIAL CONDITION OF THE SAID COMPANY. WE FIND THAT THE BANK GUARANTEE TO THE COMPANY OF RS. 73.60 CRORES I SSUED BY THE BANK IS ALWAYS SECURED BY THE LIQUID-ABLE ASSETS OF THE COM PANY WHICH SHOWS THAT THE COMPANY WAS HAVING UNDERLINED ASSETS TO SECURE THE SAID BANK GUARANTEE AND CONSEQUENTLY THE CREDITWORTHINESS OF THE SAID COMPANY WAS DULY EXAMINED BY THE BANK. THE LD. CIT (A) HAS CON SIDERED ALL THESE FACTS WHILE DECIDING THIS ISSUE IN PARA 7.3 TO 7.3.9 AS U NDER :- 7.3 IT MAY BE MENTIONED THAT SAME PROCEDURE OF REM AND REPORT HAVE BEEN DONE AS DISCUSSED IN PARA 4.3 ABOVE AND T HE SAME IS NOT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 35 REPEATED HERE. SIMILARLY, AS DISCUSSED IN PARA 4.4. 3 THIS MATTER TOO WAS REFERRED BY THE AO FOR VERIFICATION BY ISSUING COMMISSION U/S 131(1)(D) TO THE DEPUTY DIRECTOR OF INCOME TAX (INV ), UNIT-1(3), KOLKATA VIDE SAME LETTERS AND SAME REPORTS AS DISC USSED IN PARA 4.4.4 WERE RECEIVED FROM THE DEPUTY DIRECTOR OF INC OME TAX (INV), UNIT-1(3), KOLKATA. AS OBSERVED IN PARA 4.4.5 & 4.4.6, THE TWO REPORTS DATED 28.11.2017 AND 06.12.2017 FROM THE DE PUTY DIRECTOR OF INCOME TAX (INV), UNIT-1(3), KOLKATA ARE CAPABLE TO FINDOUT WHERE THE APPELLANT HAS EMPLOYED FOUL MEANS AND WHE RE THE TRANSACTION ARE OF RUTINE BUSINESS REQUIREMENTS. FR OM THE CAREFUL PERUSAL OF THESE THE TWO REPORTS DATED 28.11.2017 A ND 06.12.2017 FROM THE DEPUTY DIRECTOR OF INCOME TAX (INV), UNIT- 1(3), KOLKATA. I DONT FIND ADVERSE FINDINGS ALONGWITH ELOQUENT EV IDENCES IN THE FORM OF STATEMENT ON OATH OF RELEVANT ENTRY OPERATO RS IN RESPECT OF CAPITAL CONTRIBUTIONS BY FOUR COMPANIES, NAMELY, M/ S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AND M/ S MACRO SOFT TECHNOLOGY PRIVATE LIMITED. THE SAME IS EVIDENT FRO M THE RESPECTIVE DETAILS FOR ABOVE LENDERS IN THE ABOVE R EPORTS DATED 28.11.2017 AND 06.12.2017 AS UNDER:- WITH REFERENCE TO YOUR ABOVE QUOTED LETTER, THIS O FFICE HAS ISSUED SUMMON NOTICES U/S 131 OF THE INCOME TAX ACT , 1961 DATED 13.10.2017 TO THE FOLLOWING SIXTEEN (16) COMP ANIES BASED IN KOLKATA AS MENTIONED IN YOUR ABOVE QUOTED LETTER REQUESTING TO FURNISH THE REQUISITE DETAILS RELATED TO SHARE APPLICATION MONEY/SHARE PREMIUM/SPECIAL DEPOSITS/UNSECURED LOAN/CAPITAL INTRODUCED BY PARTN ERS OR ANY TRANSACTIONS MADE WITH GROUP CONCERNS OF THE KD M GROUP FOR THE PERIOD FROM F.Y. 2009-10 TO 2015-16 W ITHIN ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 36 05 (FIVE) DAYS OF RECEIPT OF SUMMON NOTICES. AS REG ARDS 5 (FIVE) ASSESSES, SUMMONS NOTICES U/S 131 OF THE INC OME TAX ACT, 1961 HAS NOT BEEN ISSUED SINCE IT IS OBSERVED THAT THE PRESENT ADDRESS OF FIVE (5) COMPANIES IS LOCATED EI THER IN RAJASTHAN OR PATIALA. ............. IN RESPONSE TO SAID BOTH NOTICES DATE D 13.10.2017 & 31.10.2017, NONE OF THE DIRECTORS APPEARED PERSONAL LY BUT THE FOLLOWING COMPANIES HAVE SUBMITTED THEIR REPLY CONTAINING VARIOUS DETAILS BY POST ON DIFFERENT DAT ES, THE DETAILS OF WHICH IS MENTIONED UNDER AND THE SAME IS BEING FORWARDED HEREWITH IN ORIGINAL FOR YOUR FURTHER NEC ESSARY ACTION AT YOUR END: S. NO. NAME OF CONCERNS PARTICULARS OF SUBMISSION DATE OF SUBMISSION RECEIVED BY POST 12. BANSHIDHAR ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) TRANSACTIONS DETAILS WITH KDM GROUP CONCERN, COPY OF LEDGER, COPY OF CERTIFICATE OF INCORPORATION & PAN CARD, COPY OF ASSESSMENT ORDER U/S 143(3) FOR A.Y. 14-15, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12-13, SOURCE OF FUND, BANK STATEMENT SHOWING THE TRANSACTIONS WITH KDM GROUP CONCERNS, NATURE OF BUSINESS & COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION. 07.11.2017 13. VASUNDHARA ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) NATURE OF BUSINESS, COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION, TRANSACTIONS RELATED TO INVESTMENT IN EQUITY SHARES AND CAPITAL 07.11.2017 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 37 CONTRIBUTION WITH KDM GROUP CONCERN, BANK STATEMENT DEPICTING THE TRANSACTIONS WITH KDM GROUP CONCERNS, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12-13, SOURCE OF FUND, COPY OF CERTIFICATE OF INCORPORATION & PAN CARD, COPY OF LEDGER & COPY OF ASSESSMENT ORDER U/S 143(3) FOR THE A.Y. 14-15. 14. PRITHVI VINIMAY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) TRANSACTIONS DETAILS, COPY OF LEDGER ALONG WITH SUPPORTING DOCUMENTS INCL. SHARE APPLICATIONS, SHARE ALLOTMENT, ACCOUNT CONFIRMATION FROM KOTA DALL MILL, FORM- 2, AUDITED ACCOUNTS FOR F.Y. 09-10 TO 12- 13, COPY OF ASSESSMENT ORDER U/S 143(3) FOR A.Y. 14-15, COPY OF CERTIFICATE OF INCORPORATION AND PAN CARD, DETAILS REGARDING SOURCE OF FUND, BANK STATEMENT DEPICTING THE TRANSACTIONS DETAILS & COPY OF HONBLE HIGH COURT ORDER IN RESPECT OF AMALGAMATION. 07.11.2017 NO SUMMONS WERE ISSUED FOR M/S MACRO SOFT TECHNOLOG Y PVT. LTD BY DDIT (INV.) UNIT 1(3) KOLKATA .......THIS OFFICE HAS ALSO VERIFIED THE COMPANIES AS PER DATABASE OF PAPER/SHELL COMPANIES/ENTITIES PREPARED BY DIRECTORATE OF INVESTIGATION WING, KOLKATA ON THE B ASIS OF STATEMENTS OF VARIOUS ENTRY OPERATORS AT DIFFERENT OCCASIONS BEFORE THE INCOME TAX DEPARTMENT. ON VERIFICATION, THE FOLLOWING FACTS HAS BEEN EMERGED OUT FROM THE DATAB ASE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 38 WHICH REVEALS THAT SOME COMPANIES ARE LISTED IN THE DATABASE OF PAPER/SHELL COMPANIES CONTROLLED & MANAGED BY EN TRY OPERATORS AND THE SAME IS BEING PRODUCED AS UNDER I N THE TABULAR FORM: SL. NO. NAME OF CONCERNS PAN ADDRESS GIVEN IN COMMISSION NOTICE ISSUED ENTRY OPERATOR DUMMY DIRECTOR 12 BANSIDHAR ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) AACCB7815M 11A ESPLANADE EAST 3 RD FLOOR, KOLKATA 700069 NOTICE ISSUED U/S 131 AT GIVEN ADDRESS THIS COMPANY IS AMALGAMATED WITH M/S DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA SHASHI KUMARI RAMANI- THE NAME OF THESE DUMMY DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WOR KS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. 13 VASUNDHARA ADVISORY PVT LTD (AMALGAMATED WITH DOSHI MANAGEMENT PVT LTD) AACCV1837B 11A ESPLANADE EAST 3 RD FLOOR, KOLKATA 700069 NOTICE ISSUED U/S 131 AT GIVEN ADDRESS THIS COMPANY IS AMALGAMATE WITH M/S DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA PUNAM RAMANI THE NAME OF THESE DUMMY DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WOR KS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. 14 PRITHVI VINIMAY PVT LTD (AMALGAMATED AADCP4531D 11A ESPLANADE EAST 3 RD FLOOR, KOLKATA 700069 NOTICE ISSUED U/S 131 AT THIS COMPANY IS AMALGAMATED DEEPAK TIBREWAL THE NAME OF ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 39 WITH DOSHI MANAGEMENT PVT LTD) GIVEN ADDRESS WITH M/S DOSHI MANAGEMENT PVT LTD WHICH HAS BEEN IDENTIFIED AS PAPER/SHELL COMPANY CONTROLLED & MANAGED BY ENTRY OPERATOR ANAND SHARMA THESE DUMMY DIRECTORS ARE LISTED IN DATABASE, WHO WORKED/WOR KS UNDER DIFFERENT ENTRY OPERATORS FOR DIFFERENT PERIOD, THE DETAILS OF WHICH HAS BEEN GIVEN BELOW IN TABULAR FORM. IT MAY BE MENTIONED HERE THAT AMALGAMATION TOOK PLA CE IN JULY 2014 WHERE AS STATEMENT OF SHRI ANAND SH ARMA ARE PRIOR TO MARCH 2014. FURTHER, THE VERIFICATION AND INVESTIGATION OF PAS T AND PRESENT DIRECTORS OF FOLLOWING COMPANIES HAS BEEN C ARRIED OUT WITH THE HELP OF DATABASE OF ENTRY OPERATORS PR EPARED BY DIRECTORATE OF INVESTIGATION WING, KOLKATA WHICH REVEAL THAT THE DIRECTORS OF THESE COMPANIES HAVE BEEN LIS TED UNDER THE NAME OF VARIOUS ENTRY OPERATORS WHO ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES BY APPO INTING VARIOUS DUMMY DIRECTORS BY KNOWN ENTRY OPERATORS WHOSE NAMES HAS BEEN MENTIONED IN THE UNDER MENTIONED TAB LE. S. NO. NAME OF COMPANY NAME OF DIRECTOR(S) PERIOD NAME OF ENTRY OPERATOR 1. VASUNDHARA ADVISORY PVT LTD PUNAM RAMANI 28.02.2011- TILL DATE NAWAL KISHORE JALAN 2. PRITHVI VINIMAY PVT LTD DEEPAK TIBREWAL 28.03.2014- TILL DATE PANKAJ AGARWAL 3. BANSIDHAR ADVISORY PVT LTD SHASHI KUMARI RAMANI 09.01.2009- 16.03.2012 ANKIT BAGRI ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 40 IT MAY BE MENTIONED HERE THAT THREE COMPANIES NAMEL Y; M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITE D WERE AMALGAMATED WITH M/S DOSHI MANAGEMENT PVT LTD IN JU LY 2014 IN ACCORDANCE WITH PERMISSION FROM KOLKATA HIGH COURT, WHEREAS THE STATEMENTS ENTRY OPERATOR ANAND SHARMA ARE DATED 02 .07.2013 AND 06.02.2017 I.E. PRIOR TO MARCH 2014 BY WHICH M/S DO SHI MANAGEMENT PVT. LTD. MIGHT HAVE BEEN IDENTIFIED AS PAPER/SHELL COMPANY. NEITHER STATEMENT OF SHRI ANAND SHARMA NOT ANY LIST OR ANNEXURE OF SAID STATEMENTS INDENTIFYING M/S DOSHI MANAGEMENT PVT. LTD. IS AVAILABLE ON RECORD, THOUGH IT IS INCL UDED IN THE REPORT OF DDIT (INV.), UNIT 1(3), KOLKATTA. THEREFORE, THE LA BEL OF PAPER/SHELL COMPANY CANNOT BE APPLIED TO M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M /S PRITHVI VINIMAY PRIVATE LIMITED AS AT THE RELEVANT TIME THE Y WERE NOT PART OF M/S DOSHI MANAGEMENT PVT. LTD. MOREOVER, IN DATA BASE OF DIRECTORSHIPS FOR THESE COMPANIES; M/S BANSIDHAR AD VISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M /S PRITHVI VINIMAY PRIVATE LIMITED AS REPRODUCE ABOVE ALSO CLE ARLY SHOW NO DIRECT CONTROL OR INFLUENCE OF THE ALLEGED ENTRY O PERATOR ANAND SHARMA. SIMILARLY, THE STATEMENT OF ANKIT BAGRI IS NOT IMPLICATING M/S BANSIDHAR ADVISORY PVT. LTD. IN ANY MANNER AS S HELL COMPANY. THERE ARE NO STATEMENTS FROM NAWAL KISHORE JALAN AN D PANKAJ AGARWAL ON RECORD IMPLICATING M/S VASUNDHARA ADVISO RY PRIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AS SHE LL COMPANIES. 7.3.1 IN VIEW OF ABOVE GROUND REALITY I AM TREATING M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED NOT AS SHELL COMPANY AS TREATED BY THE AO AS NOWHERE ADVERSE FACTS, DETA ILS AND ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 41 CORROBORATORY EVIDENCES IN THE FORM OF STATEMENTS O F THE ALLEGED ENTRY OPERATOR ANAND SHARMA OR ANKIT BAGRI IMPLICAT ING THEM ARE FOUND IN THE REPORTS DATED 28.11.2017 AND 06.12.201 7 FROM INVESTIGATION DIRECTORATE, KOLKATA. I HAVE ALSO CON SIDERED THE ASSESSMENT ORDER, THE REMAND REPORT ALONG WITH ITS ALL ENCLOSURES, THE RELEVANT STATEMENTS REPRODUCED IN THE ASSESSMEN T ORDER BY THE AO, THE SUBMISSIONS MADE BY THE APPELLANT ALONG WIT H PAPER BOOK FOR THE YEAR UNDER CONSIDERATION AND ALL RELEVANT M ATERIAL PLACED ON RECORD AND COULD NOT FIND A SINGLE PIECE OF EVIDENC E TO SAY THAT ANY ONE OF ABOVE COULD BE SHELL COMPANY. 7.3.2 IT IS SEEN THAT DURING THIS YEAR, THE AO HAS MADE ADDITIONS IN THE HANDS OF ASSESSEE ON ACCOUNT OF PARTNERS CAPIT AL FROM FOUR COMPANIES, NAMELY, M/S BANSIDHAR ADVISORY PRIVATE L IMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VI NIMAY PRIVATE LIMITED AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMIT ED. THE AO ALLEGED THAT DESPITE PROVIDING HUGE CAPITAL CONTRIB UTION, NONE OF THE NEWLY INTRODUCED PARTNER IS INTERESTED IN THE BUSIN ESS ACTIVITIES OF THE ASSESSEE FIRM AS THERE IS NO WORKING PARTNER ON THEIR BEHALF AND NONE OF THEM HAVE NOMINATED ANY DIRECTOR OR OTHER O FFICER OF THE COMPANY TO ACT AS WORKING PARTNER IN THE ASSESSEE F IRM. 7.3.3 HOWEVER, THE A/R OF THE APPELLANT WHILE REPRE SENTING THE CASE HAS ARGUED THE MATTER IN DETAIL AND HAS FILED DETAILED SUBMISSIONS AS REPRODUCED ABOVE IN RESPONSE TO THE FINDINGS AND ALLEGATIONS OF THE AO. A SUMMARIZED FORM OF THE SUB MISSIONS AND ARGUMENTS PUT FORTH BY THE A/R IS GIVEN HEREUNDER: A) THE APPELLANT HAS DULY DISCHARGED THE INITIAL ONUS CAST UPON IT U/S 68 OF THE ACT BY FURNISHING THE NAME, ADDRESS, PAN, COPY OF ITR, COPY OF BANK STATEMENT AND CONFIRMATION FROM THE PARTNER S, BALANCE SHEET ETC. THROUGH THE SAID DOCUMENTS, IDENTITY, CREDITWORTHIN ESS OF THE CORPORATE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 42 PARTNERS ALONG WITH THE GENUINENESS OF THE TRANSACT IONS CARRIED OUT WITH THEM WAS DULY ESTABLISHED. B) THE AO HAS NOT OBSERVED ANYTHING IN THE ASSESSMENT ORDER REGARDING ANY DEFECT OR FLAW IN THE DOCUMENTS SUBMI TTED. C) THE CAPITAL CONTRIBUTIONS OF THE COMPANIES THAT HAV E BEEN TREATED AS UNEXPLAINED BY THE AO WERE INTRODUCED IN AY 2012-13 . IN THE ASSESSMENT PROCEEDINGS OF AY 2012-13 WHICH WAS COMPLETED U/S 1 43(3) OF THE ACT, SUCH CAPITAL CONTRIBUTIONS WERE TREATED AS GENUINE. THUS, ONCE IN THE COMPLETED ASSESSMENT PROCEEDINGS THE CAPITAL CONTRI BUTION OF THOSE COMPANIES HAS BEEN CONSIDERED AS GENUINE THAN THERE IS NO REASON TO TREAT THE CAPITAL RECEIVED FROM SUCH COMPANIES DURING THE YEAR AS NON GENUINE WITHOUT HAVING ANY MATERIAL AND ONLY ON PRESUMPTION , ASSUMPTION AND SURMISES. D) SUBMISSION MADE IN GROUND NO. 2 IN RESPECT OF UNSEC URED LOANS MAY ALSO BE TREATED AS A SUBMISSIONS FOR THE PURPOS E OF THIS GROUND OF APPEAL. E) ALL THE PARTNERS MUST BE WORKING PARTNERS IS NOT MA NDATORY UNDER ANY OF THE LAWS IN FORCE. F) ALL THE TRANSACTIONS WERE DONE THROUGH PROPER BANKI NG CHANNELS. G) THE NOTICES ISSUED TO THE FOUR COMPANIES U/S 131/13 3(6) OF THE ACT WERE DULY COMPLIED WITH ALONG WITH THE COPY OF THE RELEVANT DOCUMENTS. H) AFFIDAVITS OF THE DIRECTORS OF ALL COMPANIES WERE S UBMITTED WHEREIN THE DIRECTORS CONFIRMED THEIR INVESTMENT AS PARTNER S CAPITAL IN THE APPELLANT FIRM. I) NO RELIANCE CAN BE PLACED ON REJECTED BOOKS OF ACCO UNT FOR WORKING OUT PEAK CREDIT FOR THE PURPOSE OF MAKING ADDITIONS IN THE HANDS OF THE APPELLANT. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 43 J) THE REPORTS/INSPECTION REPORT AND STATEMENTS RELIED UPON BY THE AO WERE NOT PROVIDED TO THE APPELLANT DURING ASSESSMEN T PROCEEDINGS AND DIRECTLY REPRODUCED IN THE ASSESSMENT ORDER. 7.3.4 IN MY CONSIDERED VIEW, AS FAR AS THE PARTNER S CAPITAL FROM THE COMPANIES NAMELY, M/S BANSIDHAR ADVISORY PRIVATE LI MITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VI NIMAY PRIVATE LIMITED AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMIT ED IS CONCERNED, IT IS EVIDENT FROM THE DOCUMENTS PLACED ON RECORD THAT NOTICE WAS ISSUED BY DDIT, KOLKATA U/S 131/133(6) T O THESE COMPANIES WHICH WAS DULY COMPLIED WITH AND RELEVANT DOCUMENTS WERE FILED. THERE IS NO FACT ON RECORD THAT THE NOT ICES 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 INVESTMEN T IN THE APPELLANT FIRM IN THE FORM OF PARTNERS CAPITAL. 7.3.5 THE ONLY ALLEGATION OF THE AO IS THAT THE DIR ECTORS OF THESE COMPANIES HAVE NOT BEEN NOMINATED AS WORKING PARTNE RS. IN MY VIEW, SUCH ALLEGATION IS WITHOUT ANY SUBSTANCE AS T HERE IS NO LEGAL OBLIGATION ON A PARTNERSHIP FIRM TO APPOINT ALL THE PARTNERS AS WORKING PARTNERS. THERE ARE VARIOUS PARTNERS IN FIR MS WHICH ONLY DO INVESTMENT IN THE FIRM AND DO NOT PARTICIPATE IN TH E REGULAR BUSINESS ACTIVITIES OF THE FIRM. SUCH PARTNERS ARE CALLED SL EEPING PARTNERS AND THE SAID PARTNERS DO EXIST IN THE NORMAL BUSINESS P ARLANCE. 7.3.6 THE APPELLANT IN DISCHARGE OF ITS ONUS U/S 68 OF THE ACT HAS FILED CONFIRMATION OF ACCOUNTS AS WELL AS BANK STAT EMENT REFLECTING THE TRANSACTIONS WITH OTHER SUBSTANTIATING DOCUMENT S AS WELL AS THE RELEVANT ASSESSMENT ORDERS, WHICH ARE AVAILABLE AT PAGE NO. 645 TO 867 OF PB . FROM THESE DOCUMENTARY EVIDENCES PLACED ON RECORD , ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 44 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 DIS CHARGE 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 OTHER WISE, THERE IS NO ADVERSE FINDING OF ANY INVESTIGATION CONDUCTED BY T HE DEPARTMENT IN RELATION TO THE SAID COMPANIES. THEREFORE, IN THE A BSENCE OF ANY INDEPENDENT INQUIRY AND ANY ADVERSE FINDINGS TO REB UT THE EVIDENCES FILED BY THE APPELLANT, I FIND THAT THE ADDITION IN RESPECT OF THE PARTNERS CAPITAL FROM THE AFORESAID 04 COMPANIES T OTALING TO RS. 42,47,25,000/- IS UNJUSTIFIED; FIRSTLY, ON THE GROU ND THAT NO INQUIRIES WERE MADE TO REBUT THE EVIDENCES FILED BY THE APPEL LANT AND SECONDLY, ON THE GROUND THAT APPELLANT DULY DISCHAR GED ITS BURDEN CASTED UPON U/S 68 OF THE ACT TO EXPLAIN NATURE AND SOURCE OF THE TRANSACTIONS BY PROVING THE IDENTITY, CREDITWORTHIN ESS OF THE CORPORATE PARTNERS AND GENUINENESS OF THE TRANSACTI ON. NOTABLY, THE TRANSACTIONS WITH THE SAID FOUR COMPANIES ARE DULY VERIFIABLE FROM CONFIRMATION OF ACCOUNTS FILED AT PAGE 650 TO 653, 708 TO711, 763 TO 766 & 830 TO 832 OF PB WITH SUPPORTING BANK STATEMENTS PLACED AT PAGE 654 TO 660, 712 TO716, 767 TO 778 & 833 TO 838 OF PB AND HAVE BEEN CARRIED OUT THROUGH BANKING CHANNELS ONLY AND THUS, APPELLANT HAS DULY PROVED THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE TRANSACTIONS. 7.3.7 FURTHERMORE, FROM THE PERUSAL OF DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT, IT IS SEEN THAT TRANSAC TIONS HAVE BEEN ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 45 DONE THROUGH BANKING CHANNELS AND ON THE DATE OF MA KING OF LOANS, THERE IS BALANCE AVAILABLE IN THE ACCOUNTS OF THE B ORROWERS, WHICH PROVES THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. THERE IS NO CASE OF ANY CASH DEPOSITION IN THE ACCO UNT OF ANY OF THE INVESTOR COMPANIES AT THE TIME OF ISSUING CHEQUES/R TGS IN FAVOUR OF THE ASSESSEE. THEREFORE, IN VIEW OF THE SETTLED JUDICIAL PRECEDENTS AS ALREADY RELIED UPON AND MENTIONED IN GROUND NO. 2 ABOVE, I AM OF THE CONSIDERED VIEW THAT APPELLANT DULY DISCHARG ED ITS BURDEN CASTED UPON IT U/S 68 OF THE ACT. IT IS FURTHER SEE N THAT M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY PRIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITE D AND M/S MACRO SOFT TECHNOLOGY PRIVATE LIMITED HAVE DULY REP LIED TO THE NOTICES ISSUED BY DCIT/DDIT(INV.), KOLKATA IN RESPE CT OF COMMISSION, THESE FACTS REMAIN UNCONTROVERTED BY TH E AO. 7.3.8 FURTHER, IT IS EVIDENT FROM THE ASSESSMENT OR DER THAT OTHER FINDINGS AND ALLEGATIONS OF THE AO WITH RESPECT TO THE PARTNERS CAPITAL ARE SIMILAR TO THE FINDINGS MADE BY THE AO WITH RESPECT TO THE UNSECURED LOANS OF THE APPELLANT. AS THE SAID S IMILAR FINDINGS AND ALLEGATIONS HAVE ALREADY BEEN DEALT WITH IN GRO UND NO. 2 ABOVE, THESE ARE NOT AGAIN DEALT WITH FOR THE SAKE OF BREVITY. HOWEVER, MY VIEW REGARDING THE FINDINGS AND ALLEGAT IONS AS ALREADY DISCUSSED IN GROUND NO. 2 ABOVE, SHALL MUTATIS MUTA NDIS APPLY TO THE FINDINGS AND ALLEGATIONS OF THE AO WITH RESPECT TO PARTNERS CAPITAL MADE IN THIS GROUND OF APPEAL. 7.3.9 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 A DDITION OF RS. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 46 42,47,25,000/- ON ACCOUNT OF PARTNERS CAPITAL FROM M/S BANSIDHAR ADVISORY PRIVATE LIMITED, M/S VASUNDHARA ADVISORY P RIVATE LIMITED, M/S PRITHVI VINIMAY PRIVATE LIMITED AND M/ S MACRO SOFT TECHNOLOGY PRIVATE LIMITED IS NOT SUSTAINABLE AND H ENCE THE SAME STANDS DELETED. THUS THE FINDING OF THE LD. CIT (A) ARE BASED ON TH E FACTS AS WELL AS THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE W HEREAS THE AO HAS NOT BROUGHT ON RECORD ANY CONTRARY EVIDENCE EXC EPT THE ALLEGATION MADE IN THE REPORT OF THE INVESTIGATION WING KOLKAT A. THEREFORE, THE DOCUMENTARY EVIDENCES BROUGHT BY THE ASSESSEE CANNO T BE NEGATED MERELY ON THE BASIS OR ALLEGATION MADE IN THE REPOR T WHICH IS NOTHING BUT NARRATION OF THE STATEMENTS RECORDED OF CERTAIN PERSONS. THE REPORT OF THE DDIT INVESTIGATION CANNOT SUBSTITUTE THE DOCUMENTARY EVIDENCE. ACCORDINGLY, IN VIEW OF THE FACTS AND CI RCUMSTANCES, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF TH E LD. CIT (A) QUA THIS ISSUE. THE FINDING OF THE LD. CIT(A) FOR THE YEAR UNDER CONS IDERATION IS BASED ON THE IDENTICAL GROUNDS AS IN THE CASE OF M/S KOTA DA LL MILL WHILE DELETING THE ADDITION MADE BY THE A.O. IN RESPECT OF ALL THE SE FIVE COMPANIES. THUS HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE IN RE SPECT OF THE CLAIM, THE ADDITION MADE BY THE A.O. BASED ON MERELY ALLEG ATIONS IN THE REPORT OF DDIT (INV.), KOLKATA WITHOUT ANY SUPPORTING COGENT MATERIAL OR DOCUMENTARY EVIDENCE IS NOT SUSTAINABLE. THEREFORE, IN VIEW OF THE EARLIER ORDER AS WELL AS EVIDENCE PRODUCED BY THE ASSESSEE, WE DO NOT FIND ANY ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 47 ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) I N DELETING THE ADDITION. HENCE, WE UPHOLD THE SAME. 8. GROUND NO. 7 OF THE REVENUES APPEAL IS REGARDIN G THE DISALLOWANCE U/S 14A OF THE ACT. THE A.O. HAS OBSERVED THAT THE ASSESSEE HAS INCURRED INTEREST EXPENDITURE OF RS. 51,20,219/- AND WAS CONS IDERED TO BE AN EXPENDITURE DIRECTLY INCURRED IN RESPECT OF INVESTM ENT IN SHARES AND INCOME FROM SUCH INVESTMENT DOES NOT FORM PART OF T HE TOTAL INCOME. ACCORDINGLY, THE A.O. MADE DISALLOWANCE OF INTEREST EXPENDITURE OF RS. 51,20,219/- AND FURTHER A DISALLOWANCE ON ACCOUNT OF IN DIRECT EXPENDITURE UNDER RULE 8D(2)(II) OF THE INCOME TAX R ULES, 1962 WAS ALSO MADE 1% OF THE AVERAGE INVESTMENT. ON APPEAL, THE L D. CIT(A) HAS DELETED THE ADDITION ON THE GROUND THAT THE A.O. HA S EVEN NOT RECORDED ANY SATISFACTION THAT THE ALLEGED EXPENDITURE HAS A NY DIRECT NEXUS WITH THE INVESTMENT WHEN THE ASSESSEE WAS HAVING SUFFICIE NT INTEREST FREE FUNDS. 9. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE IS IN THE BUSINESS OF FINANCE AND THEREFORE, THE INTEREST EXP ENDITURE IS ESSENTIALLY CONNECTED WITH THE BUSINESS OF THE ASSESSEE IF EXCE PT THE BORROWED FUND IS DIRECTLY USED BY THE ASSESSEE FOR THE PURPOSE OF INVESTMENT IN SHARES. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 48 WE FURTHER NOTE THAT THERE IS NO FRESH INVESTMENT M ADE BY THE ASSESSEE DURING THE YEAR BUT ALL THESE INVESTMENTS WERE OLD I NVESTMENTS, THEREFORE, IN ABSENCE OF ANY FINDING THAT THE ASSESSEE HAS USE D THE BORROWED FUND AT THE TIME OF MAKING THE INVESTMENT, THE DISALLOWAN CE ON THE GROUND OF INTEREST EXPENDITURE IS NOT WARRANTED. AS REGARDS TH E INDIRECT EXPENDITURE, THE LD. CIT(A) HAS NOTED THAT THE A.O. HAS APPLIED A MENDED PROVISIONS OF RULE 8D(2)(II) OF THE RULES, HOWEVER, THAT THE AMEND MENT IS W.E.F. 02/6/2016 AND NOT APPLICABLE FOR THE YEAR UNDER CON SIDERATION EVEN OTHERWISE WHEN THESE INVESTMENTS ARE OLD INVESTMENTS AND THE A.O. HAS NOT IDENTIFIED WHICH OF THE INDIRECT EXPENDITURE FO R ANY DIRECT OR PROXY NEXUS FOR EARNING THE EXEMPT INCOME. THE DISALLOWANC E BY INVOKING THE PROVISIONS OF RULE 8D OF THE RULES IS NOT AUTOMATIC , THERE MAY BE CASE WHEN THE ASSESSEE DOES NOT CLAIM ANY EXPENDITURE OR THE EXPENDITURE CLAIMED BY THE ASSESSEE IS LESS THAN THE AMOUNT OF DISALLOWANCE COMPUTED UNDER RULE 8D OF THE RULES THEN THE DISALL OWANCE IF ANY CANNOT BE MORE THAN THE ACTUAL CLAIM OF EXPENDITURE. THE LD . CIT(A) HAS CONSIDERED THIS ISSUE IN PARA 9.3 AND 9.3.1 AS UNDE R: '9.3 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. 9.3.1 IN MY CONSIDERED VIEW, THE AO HAS LEGALLY ERR ED IN DIRECTLY APPLYING THE PROVISION OF SECTION 14A OF THE ACT, W ITHOUT RECORDING ANY SATISFACTION AS TO THE CORRECTNESS OF THE CLAIM MAD E BY THE APPELLANT. IN THE ASSESSMENT ORDER, THERE IS NO SATISFACTION RECO RDED BY THE AO AS ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 49 REQUIRED BY SECTION 14A(1) OF THE ACT BEFORE PROCEE DING FURTHER TO MAKE ANY DISALLOWANCE U/S 14A OF THE ACT. FURTHER, IT IS SEEN THAT AO HAS MECHANICALLY APPLIED THE RULE 8D AS AMENDED W.E.F. 02.06.2016, WHICH WAS NOT EVEN APPLICABLE TO RELEVANT ASSESSMENT YEAR . IN MY CONSIDERED VIEW, THE LAW CANNOT BE APPLIED MECHANICALLY AND TH AT TOO RETROSPECTIVELY. IT IS SEEN THAT AO HAS NOT ESTABLI SHED ANY NEXUS OF INVESTMENT WITH BORROWED FUNDS, RATHER AVAILABILITY OF SUFFICIENT INTEREST FREE FUNDS 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 ASSESSME NT ORDER THAT ANY EXEMPT INCOME WAS EARNED DURING THE RELEVANT ASSESS MENT YEAR. THEREFORE, IN THE RELEVANT CASES ALSO WHEREIN SECTI ON 14A OF THE ACT IS APPLICABLE, ONLY THE RELEVANT PORTION OF EXPENDITUR E IS REQUIRED TO BE DISALLOWED AND NOT THE COMPLETE EXPENSES, WHICH IN THE INSTANCE CASE, THE AO HAS DONE WITHOUT MAKING ANY CASE FOR DISALLO WANCE U/S 14A OF THE ACT. THEREFORE, IN VIEW OF THE NON-FULFILMENT O F SUCH STATUTORY REQUIREMENT AS LAID DOWN IN VARIOUS JUDICIAL PRECED ENTS AND CIRCULARS AS RELIED UPON BY THE A/R IN HIS SUBMISSION, IN MY CON SIDERED VIEW, THE DISALLOWANCE U/S 14A OF THE ACT OF RS. 52,43,029/- IS UNWARRANTED. ACCORDINGLY, THE SAME IS DELETED. IN VIEW OF THE AB OVE, ADDITION OF RS. 52,43,029/- IS DELETED AND THESE GROUNDS OF APPEALS ARE ALLOWED.' THE REVENUE HAS NOT BROUGHT ANY FACT OR MATERIAL TO CONTROVERT THE FINDING OF THE LD. CIT(A) OR TO POINT OUT THAT THE FINDING OF THE LD. CIT(A) IS PERVERSE. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR I LLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. HEN CE, WE UPHOLD THE SAME. 10. GROUND NO. 8 OF THE REVENUES APPEAL IS REGARD ING THE ADDITION ON ACCOUNT OF RETENTION CHARGES. THE ASSESSEE HAS CLAIM ED RETENTION CHARGES OF RS. 7,50,385/-.THE A.O. WITHOUT DISCUSSING ANY RE ASON FOR MAKING THE ADDITION OR DISALLOWANCE HAS ADDED THE SAID AMOUNT T O THE TOTAL INCOME OF ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 50 THE ASSESSEE. THE ASSESSEE CHALLENGED THE ADDITION M ADE BY THE A.O. BEFORE THE LD. CIT(A) AND SUBMITTED THAT THIS AMOUN T WAS PAID AS FEE TO THE RIICO FOR NOT SUPPORTING THE COMMERCIAL ACTIVIT Y AT THE INDUSTRIAL SITE ALLOTTED BY THE RIICO TO THE ASSESSEE. THUS, IT WAS CONTENDED THAT THIS IS A BUSINESS EXPENDITURE INCURRED BY THE ASSESSEE. TH E LD. CIT(A) HAS ALLOWED THE CLAIM OF ASSESSEE AND DELETED THE ADDITI ON MADE BY THE A.O. 11. WE HAVE HEARD THE LD. CIT-DR AS WELL AS THE LD. AR OF THE ASSESSEE, WE FIND THAT THIS AMOUNT WAS PAID BY THE ASSESSEE BEI NG THE FEE FOR NOT COMMENCING THE COMMERCIAL ACTIVITY AT THE INDUSTRIA L SITE ALLOTTED BY THE RIICO, THEREFORE, TO BE RETAINED THE RIGHT OVER THE COMMERCIAL SITE. THE ASSESSEE TO PAY THE FEE AS PER THE RULES OF THE ALL OTMENT. THUS, THE EXPENDITURE WAS INCURRED BY THE ASSESSEE TO RETAIN I TS RIGHT OVER THE SITE ALLOTTED BY THE RIICO AND TO PROTECT THE INTEREST O F THE ASSESSEE. ONCE THE CHARGES ARE PAID FOR EXTENDING THE TIME PERIOD TO START THE COMMERCIAL ACTIVITY AT THE SITE ALLOTTED BY THE RII CO THEN THE SAME IS AN ALLOWABLE BUSINESS EXPENDITURE U/S 37(1) OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF TH E LD. CIT(A) QUA THIS ISSUE. 12. IN THE CROSS OBJECTION FOR THE A.Y. 2010-11, TH E ASSESSEE HAS RAISED FOLLOWING GROUNDS: 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 T HE INCOME TAX ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 51 ACT, 1961 IS BAD IN LAW, VOID-AB-INITIO, AND DESERV ES TO BE ANNULLED 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 I N VIEW OF SLPS ADMITTED IN VARIOUS CASES. THE LD. CIT(A) FURTHER E RRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE REMAINS FOR ACADEM IC 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 AB INITIO. IT IS CONTENDED THAT THE A.O. P ASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF AUDI ALTE RM PARTEM, VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACC OMMODATION ENTRY PROVIDERS, THEREFORE, THE ASSESSMENT ORDER OU GHT TO HOLD AS BAD IN LAW AND DESERVES TO BE ANNULLED. THE FINDING S OF THE LD. CIT(A) IN THIS REGARD 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. 13. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED ISSUE REGARDING THE ADDITION MADE BY THE A.O. WITHOUT ANY INCRIMINATING MATERIAL AS WELL AS THE ORDER OF THE A.O. IS NOT SUSTAINABLE WHEN THE A SSESSEE WAS NOT GIVEN THE OPPORTUNITY OF CROSS EXAMINATION. WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL AS THE LD CIT-DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THIS ISSUE IS COMMON AS RAISED IN ALL THE GROUP CONCERNS OF KOTA DALL MILL WHICH ARE SUBJECTED TO TH E SEARCH AND SEIZURE ACTION ON 02/7/2015. WE HAVE CONSIDERED THESE TWO IS SUES IN THE CASE OF M/S MULTIMETALS LIMITED VS. DCIT IN ITA NOS. 1024 TO 1026, 1100 TO 1104 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 52 & 1230/JP/2018 AND C.O. 38 & 39/JP/2018 VIDE ORDER DATED 29/01/2019 IN PARA 9 AND 14 AS UNDER: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY THE ASSESSMENT FOR THE A.Y. 2010-11 TO 2012- 13 WERE NOT PENDING ON THE DATE OF SEARCH ON 02/7/2 015 AS THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WERE ALSO COMPLETED PRIOR TO THE DATE OF SEARCH. THUS, THE ASSESSMENT FOR THE SE THREE ASSESSMENT YEARS WERE NOT GOT ABATED BY VIRTUE OF S EARCH U/S 132 OF THE ACT ON 02/7/2015 AND THEREFORE THE ASSESSING OF FICER WOULD ASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153A OF THE ACT IN RESPECT OF THESE THREE A SSESSMENT YEARS HAVING REGARD TO THE FACT THAT WHETHER ANY INCRIMIN ATING MATERIAL WAS FOUND OR CAME TO THE KNOWLEDGE OF THE ASSESSING OFF ICER DURING THE SEARCH AND SEIZURE PROCEEDINGS. SINCE THESE ASSESSM ENT YEARS WERE NOT PENDING AS ON THE DATE OF SEARCH, THEREFORE, TH E PROCEEDINGS U/S 153A OF THE ACT IN RESPECT OF THESE THREE ASSESSMEN T YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASE OF THE REMAINING ASSESSMENT YEARS IN TH E A.Y. 2014-15 AND 2015-16 WHICH WERE GOT ABATED BY VIRTUE OF SEAR CH AND SEIZURE ACTION U/S 132 OF THE ACT ON 02/7/2015. AT THE OUTS ET WE NOTE THAT THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER U/S 153A OF THE ACT IN THE CASE OF THE ASSESSEE BEFORE US IS SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM THE KOLKATA INVESTIGATION WING WHICH CONTAINS THE STATEMENT OF ONE SHRI ANAND SHARMA IN RESPECT OF SOME ASSESSMENTS AND THE STATEMENT OF SHRI ANKIT BAGRI I N RESPECT OF SOME OTHER ASSESSMENTS. THUS, UNDISPUTEDLY THE ASSESSING OFFICER HAS MADE THE ADDITION WHILE COMPLETING THE ASSESSMENT U /S 153A OF THE ACT FOR ALL THE ASSESSMENT YEARS ON THE BASIS OF TH E INFORMATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AND N OT ON THE BASIS OF ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 53 ANY MATERIAL OR INFORMATION GATHERED DURING THE COU RSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE. WE FIND THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER AS WELL AS THE ORDERS PASSED BY THE LD. CIT(A) IN THE CASE OF THE ASSESSE E ARE IDENTICAL AND BASED ON SIMILAR FACTS AND CIRCUMSTANCES AS IN THE CASE OF M/S KOLA DALL MILL PURSUANT TO THE SAME SEARCH AND SEIZURE A CTION CARRIED OUT ON 02/7/2015. THIS TRIBUNAL IN THE CASE OF KOTA DAL L MILL VS DCIT VIDE ORDER DATED 31/12/2018 IN ITA NOS. 997 TO 1002/JP/2 018, 1119/JP/2018, 1057 TO 1062/JP/2018 AND 1210/JP/2018 HAS CONSIDERED AND DECIDED THIS ISSUE IN PARA 6 AS UNDE R: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSMENTS F OR 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 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 ASSESSED ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 54 CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATE RIAL. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WITH 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 SEARCH UNDE R SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A OF THE ACT . THEREFORE, THE ASSESSMENT UNDER SECTION 153A IN RESPECT OF THOSE A SSESSMENT YEARS WHICH STAND ABATED DUE TO THE REASON OF PENDING ON THE DATE OF INITIATION OF SEARCH OR REQUISITION SHALL BE THE OR IGINAL/FIRST ASSESSMENT. IN THE SECOND CATEGORY WHERE THE ASSESS MENT OR REASSESSMENT HAS ALREADY BEEN COMPLETED ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITION AS THE CASE MAY BE, THE ASSESSMENT UNDER SECTION 153A WOULD BE IN THE NATURE OF REASSE SSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA WHILE ANALYZING THE PROVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED 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 PE RSON SEARCHED 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 SUC H AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRES H 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 'T OTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX Y EARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE B ROUGHT TO TAX'. IV . ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 55 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 EV IDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY I NCRIMINATING 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 COMPLETED 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 INCRIMINATI NG MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION 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 REASSESSMENT CAN BE MA DE. THE HONBLE HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 153A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS A ND THE WORD REASSESS RELATED TO COMPLETED ASSESSMENT PROCEEDI NGS. THEREFORE, THE COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENT OR UNDISCLOSED INCOME OR PR OPERTY ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 56 DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. THE HONBLE DELHI HIGH COURT HAS REITER ATED ITS VIEW IN CASE OF PRINCIPAL 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 MATER IAL WHATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDI NGS 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 R ELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT TH E 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 OPINION THAT NO SU BSTANTIAL QUESTION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQU IRES EXAMINATION. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COU RT VIDE ORDER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HON BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. M EETA GUTGUTIA HAS AGAIN 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 REVENUE'S S UBMISSION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA ( SUPRA ). BEFORE BEGINNING TO EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVISIT 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 T OGETHER. SECTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENABLES THE REVENUE TO RE-OPEN AT LEAST ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 57 SIX YEARS OF ASSESSMENTS EARLIER TO THE YEAR OF SEA RCH. IT IS NOT TO BE EXERCISED LIGHTLY. IT IS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMEN TS FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECTION 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 INCRIMIN ATING 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 INVOKED E VEN 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 OBS ERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THIS SEC TION 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 EVIDE NCE 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 THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLE TED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERI AL 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 DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATIO N OF PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 58 ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE C IT (A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, WAS 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 PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS 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 REQUISITION U NDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVI SO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JUR ISDICTION, 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: '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 ASSESSM ENT 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 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 59 WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND RE ASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD N OT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPOR T THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COUR SE 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 UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETU RNS 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 REAS SESS 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 BOTH TH E 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 O THER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA T ED 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.' ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 60 V. IN ABSE NCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED AS SESSMENT 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 SEARCH) 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 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 INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF 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 CARRIE D OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETERMINING 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 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 61 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 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. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 62 ** ** ** 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 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 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 PURSU ANT 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. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 63 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 Q UESTION 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 FACTORS 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 ACCOU NTS 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 FAI LURE TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUES TION. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTA INING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES W AS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY 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 GADI A, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HAD BEEN A YEAR- WISE NON-RECORDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH, THE ADDI TIONS WHICH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WER E MADE BY THE AO ONLY FOR ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 64 AY 2004-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A), W HICH 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 FOUND 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 INDU LGING IN CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METIC ULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT O F GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION B ETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNO T BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THESE FINDINGS DO NOT CALL FOR INTER FERENCE. THE SECOND QUESTION OF LAW IS ANSWERED 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 ACCEPTE D TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSEN T IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED O N SURMISES AND ESTIMATES WITHOUT THERE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE 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 SUBSEQU ENT 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 OF SEC TION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BA SIS 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 THE DECISIO N OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI S TEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF ADDITION MADE B Y THE AO IN THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 65 PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THE AS SESSMENT 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 DURING THE SEARCH AND WAS NO T ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO O N ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. C IT (A). THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN CASE OF P RINCIPAL 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 DEPO SITS ACCEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFU NDABLE SECURITY DEPOSITS AND THE OTHER FOR NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REFUNDABLE SECURITY DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMA ND 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 SEC URITY DEPOSIT, THE CIT (A) ACCEPTED THE AO'S FINDINGS 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 CORRECT. 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 ASSESSEE AS ALLEGED BY THE REVENUE. THIS WOULD HAVE BEEN EVIDENT HAD THE RETURN BEEN PICKED UP FOR SCRU TINY UNDER SECTION 143(3) OF THE ACT. THIS, THEREFORE, WAS NOT MATERIAL WHICH WA S SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE T O THE AO. CONSEQUENTLY, THE ADDITIONS SOUGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED 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 RE SPECT OF THE ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EXCEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. IT IS P ERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION O F HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGU TIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT IN ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 66 CASE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) WHERE IN 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 PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH OR REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE O F THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSES S OR REASSESS THE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCO ME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESU LTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSES S OR REASSESS THE 'TOTAL INCOME' OF THE SIX ASSESSMENT YEARS IN Q UESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE C AN BE ONLY ONE 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 UN DER SECTION 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 INC OME, TAKING NOTE TO THE UNDISCLOSED INCOME, IF ANY, UNEARTHED D URING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASS ESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICT ION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN RE MOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF SECTION 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS A LSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 15 1 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSESSING O FFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 14 8 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. TH E TIME-LIMIT PRESCRIBED FOR COMPLETION OF AN ASSESSMENT OR REASS ESSMENT 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 ENTRU STED WITH THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 67 DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSE SSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESS MENTS 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, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSE SSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESS EE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUS LY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETE RMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE TH IS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE S EARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL 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 PRO CEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DE CLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH OR REQUISITION. THE POSITION THUS EMERGING IS THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE M AKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE THE ASSESSMENT OR REASSESSMENT PR OCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS H AVE 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 PROC EEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OF FICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITH OUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYI NG 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 SECTION 153A WOULD BE SIMILAR TO THE O RDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMI NED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAP ED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 68 INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PEN DING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSE SSMENT ORDERS WHEN THE SEARCH WAS INITIATED OR THE REQUISITION WA S 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 ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCOME DETERMINED I N 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 AND C ONSEQUENTIAL 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 ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR RE QUISITION. THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTER PRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISION S OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOM E), 147 (INCOME ESCAPING ASSESSMENT) AND 263 (REVISION OF ORDERS) O F 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 ASSESSM ENT 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 W ORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND RE ASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD N OT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPOR T THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH OR REQUISITION OF DOCUMENTS. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 69 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 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 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) 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 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. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 70 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. FURTHE R, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATERIAL WAS EITHE R FOUND OR SEIZED TO DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUNT OF UN SECURED LOANS OR PARTNERS CAPITAL RECEIVED BY THE ASSESSEE FIRM. TH E AO HAS PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CRE DIT SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATIO N WING KOLKATA. IT IS PERTINENT TO NOTE THAT THE SAID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 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 STATEM ENT OF ONE SHRI ANAND SHARMA, WHO IS STATED TO BE AN ENTRY OPERATOR AND MANAGED VARIOUS CONCERNS/COMPANIES INCLUDING M/S.ROYAL CRYS TAL DEALERS, ONE OF THE LOAN CREDITORS OF THE ASSESSEE. EXCEPT THE S AID STATEMENT AND REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HA S NEITHER REFERRED TO OR WAS HAVING IN POSSESSION OF ANY MATERIAL TO I NDICATE THAT THE UNSECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS W ELL AS PARTNERS CAPITAL RECEIVED BY THE ASSESSEE ARE NOTHING BUT AS SESSEES OWN UNACCOUNTED AND UNDISCLOSED INCOME ROUTED BACK IN T HE GARB OF UNSECURED LOANS AND PARTNERS CAPITAL. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPIT AL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSE D IN THE RETURN OF INCOME WHICH WERE ALREADY COMPLETED AS THE ASSESSME NTS FOR THESE FOUR ASSESSMENT YEARS WERE NOT PENDING ON THE DATE OF SEARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD THAT DURI NG THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 71 ASSESSEE NO MATERIAL MUCH LESS THE INCRIMINATING MA TERIAL WAS UNEARTHED OR ANY UNDISCLOSED INCOME WHICH WAS NOT D ISCLOSED IN THE BOOKS OF ACCOUNTS WAS DETECTED OR FOUND. THE ONLY I NCRIMINATING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 T O 26 OF ANNEXURE 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 STATEMENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED AND OFFER ED TO TAX BY SHRI RAJENDRA AGARWAL 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 CAPITAL GAIN WHICH WAS FOUND D URING THE COURSE OF SEARCH AND SEIZURE. THUS, EXCEPT THE MATERIAL DISC LOSING THE LONG TERM CAPITAL GAIN IN THE HAND OF SHRI RAJENDRA AGARWAL, NO OTHER INCRIMINATING MATERIAL EITHER FOUND OR REFERRED 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 ASSESSMEN T ORDER IN PARA 12 PAGES 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 AND CA SE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TOTALLY OFF THE MAR K. AGAINST THE SELF- SPEAKING FACTS OF THE VERY NATURE OF THE ACTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUGE PARTNERS CAPITAL IN THE M OST UNINTERESTED MANNER AND PROVIDING HUGE UNSECURED LOANS WITHOUT A NY COLLATERAL OR OTHER SECURITY, THE EMPHASIS OF THE ASSESSEE FIRM I N ITS SUBMISSIONS HAS BEEN ON SEEKING PROTECTION UNDER VARIOUS JUDICIAL D ECISIONS EVEN WITHOUT HAVING ANY FACT COHERENCE. THE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGHT OF THE FOLL OWING 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 FINDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVESTIGATION DIRECTORA TE KOLKATA ARE NOT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 72 BASED ON ANY PRESUMPTION, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER I T BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD THAT IT IS THE INCO ME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW T HAT THE INCOME IS FROM ANY PARTICULAR SOURCE AS ENUMERATED THE HONBL E SUPREME COURT IN THE CASE OF ROSHAN DI HATTI V. CIT (1977) 107 ITR 938 (SC) AND KALE KHAN MOHAMMAD HANIF 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 MOHAMM AD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW I S WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SU M OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE, I S ON HIM. WHERE THE NATURE AND SOURCE THEREOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHE R BURDEN IS ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. IT MAY ALSO BE POINTED OUT T HAT THE BURDEN OF PROOF IS FLUID FOR THE PURPOSES OF SECTIO N 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATIN G TO IDENTITY, GENUINENESS OF TRANSACTION AND CREDITWORT HINESS THEN AO MUST DO SOME INQUIRY TO CALL FOR MORE DETAI LS TO INVOKE SECTION 68. B. 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 INVESTIGATION DIRECTORAT E KOLKATA AND IT HAS BEEN ESTABLISHED THAT THESE INVESTOR OR LENDER COMPANIES ARE CONTROLLED BY THE ENTRY OPERATORS. THE STATEMENTS OF VARIOUS ENTRY OPERATORS ARE SUFFICIENT EVIDENCES TO SHOW THAT THE UNSECURED LOAN AND PARTNERS CAPITAL ARE ASSESSEES OWN UNDISCLOSE D INCOME BROUGHT INTO THE BOOKS OF THE ASSESSEE UNDER THE GARB OF UN SECURED 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 132 OF THE I .T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING SEARCH PROCEE DINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 OF PARTY B-1, WHEREIN THE DETAILS OF YEAR-WISE LTCG EARNED BY SHRI RAJENDRA AGRAWAL AND HIS FAMILY MEMBERS, IS MAINTAINED, WHICH DURING SEARCH ACTION HAS BEEN ACCEPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STATEMENTS. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 73 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 PROVIDE S FOR CHARGING TO INCOME TAX ON ANY SUM CREDITED IN THE BOOKS OF THE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR IF THE ASSESSEE OFFERS NO EXP LANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D IS NOT, IN THE OPINION 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 FAILS TO PROVE SATISFACTORILY THE SOURCE AND THE NATURE OF CERTAIN AMOUNT OF CRED IT DURING THE ACCOUNTING YEAR, THE INCOME-TAX OFFICER 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 IDENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AN D CREDITWORTHINESS OF THE LENDER. HENCE, THE UNSECURED LOANS AND PARTNER S CAPITAL SHOWN TO HAVE BEEN RECEIVED FROM VARIOUS KOLKATA BASED COMPA NIES AND OTHER COMPANIES REMAINED UNEXPLAINED. IN THE CIRCUMSTANCE S, I AM LEFT WITH NO OPTION THAN TO TAX THE ENTIRE UNEXPLAINED CREDIT S BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIVED FROM THE PERSO NS MENTIONED IN PARA 5 ABOVE AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX ACT, CHARGEABLE TO TAX AS INCOME OF THE ASSESSEE FIRM FO R 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/ - 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 INTERE ST 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 O F TAX, IF PAYABLE, IS ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 74 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 SHR I ANAND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL P ROPOSITION ON THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY ON THE GROUND THAT THE SLPS FILED BY THE REV ENUE IN THE CASES OF KABUL CHAWLA (SUPRA) AND M/S. ALL CARGO GLOBAL LOGI STICS (SUPRA) ETC. HAVE BEEN ADMITTED FOR DECISION BY THE HONBLE SUPR EME COURT. THE RELEVANT PART OF THE FINDING OF 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 REQUIR ING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED, T HE AO HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YE ARS.(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 SUCH SIX ASSESSM ENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCOME' REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME THER EFORE WILL COVER NOT ONLY THE INCOME EMANATING FROM DECLARED SOURCES OR ANY MATERIAL PLACED BEFORE THE ASSESSING OFFICER BUT FROM ALL SOURCES I NCLUDING 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 DIVER GENT VIEWS OF THE VARIOUS AUTHORITIES. THE APPELLANT HAS TRIED TO HIG HLIGHT MOST OF THEM. HOWEVER, IT IS EQUALLY PERTINENT TO MENTION HERE TH AT THE DEPARTMENT HAS NOT ACCEPTED THE DECISIONS OF HON'BLE MUMBAI HIGH C OURT IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENT AL WAREHOUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FILED BEFORE T HE HON'BLE SUPREME COURT. THE HON'BLE SUPREME COURT HAS GRANTED LEAVE VIDE ORDER DATED ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 75 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 WAREH OUSING (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 F OR PRESENT REMAINS FOR ACADEMIC 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 THE AD DITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INV ESTIGATION WING KOLKATA AND STATEMENT OF ONE SHRI ANAND SHARMA RECO RDED BY THE INVESTIGATION WING DURING THE SURVEY UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATION/REPORT OF THE IN VESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE S AME 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 U NDER SECTION 153A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT W AS NOT PENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS A RE IN THE NATURE OF REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MA TERIAL DISCLOSING UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED BY THE A SSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS NOT CLAIMED ANY IN CRIMINATING 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 THE SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HON BLE SUPREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING T HE ASSESSMENT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 76 ORDERS UNDER SECTION 153A FOR THE ASSESSMENT YEARS 2010-11 TO 13- 14 ARE NOT SUSTAINABLE AND ACCORDINGLY THE SAME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. THE FOUNDATION OF THE ASSESSMENT ORDER IS THE INFOR MATION RECEIVED FROM THE INVESTIGATION WING, KOLKATA AND STATEMENT OF SHRI ANAND SHARMA AND SHRI ANKIT BAGRI IN RESPECT OF THE DIFFE RENT TRANSACTIONS OF UNSECURED LOAN/SPECIAL DEPOSITS FOR ISSUING SPEC IAL PREFERENTIAL EQUITY SHARES. THE LD. CIT(A) THOUGH HAS NOT DISPUT ED THE LEGAL PROPOSITION ON THIS ISSUE, HOWEVER, THE GROUND RAIS ED BY THE ASSESSEE WAS DISMISSED MERELY ON THE REASON THAT TH E SLP FILED BY THE REVENUE IN THE CASE OF CIT VS. KABUL CHAWLA (SU PRA) AND M/S ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) HAVE BEEN ADMIT TED FOR DECISION BY THE HON'BLE SUPREME COURT. THE RELEVANT FINDINGS OF LD. CIT(A) IN THE CASE OF KOTA DALL MILL HAS BEEN REPRODUCED BY T HE TRIBUNAL IN THE ORDER CITED (SUPRA) AND WE FIND THAT AN IDENTICAL F INDING HAS BEEN GIVEN BY THE LD. CIT(A) IN THE CASE OF ASSESSEE. TH EREFORE, NEITHER IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS REF ERRED OR RELIED UPON ANY INCRIMINATING MATERIAL FOUND DURING THE CO URSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF ASSESSEE NOR THE LD. CIT(A) HAS DISPUTED THIS FACT THAT THE ASSESSING OFFICER WAS N OT HAVING ANY INCRIMINATING MATERIAL IN HIS POSSESSION FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE WHICH HAS DISCLOSED ANY UNACCOUNTED OR UNDISCLOSED INCOME OF THE ASSESSEE. THE INFORMATION RECEIVED FROM THE INVESTI GATION WING, KOLKATA AS WELL AS THE STATEMENT OF SHRI ANAND SHAR MA AND SHRI ANKIT BAGRI CANNOT BE REGARDED AS INCRIMINATING MAT ERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE U/S 132 OF THE ACT IN THE CASE OF THE ASSESSEE. HENCE, IN VIEW OF THE DECISIO NS/BINDING PRECEDENTS AS RELIED UPON BY THE LD AR AND ALSO CON SIDERED BY THIS ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 77 TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA), WE HAVE NO REASON TO TAKE A DIFFERENT VIEW ON THIS ISSUE. ACCORDINGLY, B Y FOLLOWING THE EARLIER DECISION OF THIS TRIBUNAL IN THE CASE OF GR OUP CONCERN M/S KOTA DALL MILL WE HOLD THAT THE ADDITION MADE BY TH E ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDERS FOR THE A.Y. 2010-11 TO 2012-13 U/S 153A OF THE ACT ARE NOT SUSTAINABLE AND LIABLE TO BE DELETED. HENCE, THIS GROUND OF THE ASSESSEES APPEA L IS ALLOWED. X X X X X X X X X X 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE AS SESSEE DEMANDED THE CROSS EXAMINATION OF THE WITNESSES, THEREFORE, STATEMENTS HAVE BEEN RELIED UPON BY THE ASSESSING OFFICER WHILE FRA MING THE ASSESSMENTS UNDER CONSIDERATION. THE LD. CIT(A) THO UGH WHILE CALLING THE REMAND REPORT OF THE ASSESSING OFFICER DIRECTED TO ALLOW THE CROSS EXAMINATION TO THE ASSESSEE, HOWEVER, WHEN THE ASSE SSING OFFICER HAS EXPRESSED HIS INABILITY TO PRODUCE THE WITNESSE S FOR CROSS EXAMINATION, THE LD. CIT(A) HAS FINALLY REJECTED TH E OBJECTION RAISED BY THE ASSESSING OFFICER. AN IDENTICAL ISSUE HAS BE EN CONSIDERED BY US IN THE CASE OF KOTA DALL MILL (SUPRA) VIDE ORDER DATED 31/12/2018 IN PARA 11.1 AS UNDER: 11.1. EVEN OTHERWISE, THE ASSESSMENT ORDER IS SOLE LY 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 AND THE AO WAS HAVING IN POSSESSION THE STATEMENT OF ONLY SHRI ANA ND SHARMA. THEREFORE, ALL THESE PROCEEDINGS CONDUCTED BY THE I NVESTIGATION WING KOLKATA WERE AT THE BACK OF THE ASSESSEE AND HENCE THE STATEMENT WHICH IS THE FOUNDATION OF THE REPORT OF THE INVESTIGATIO N WING KOLKATA AS WELL AS THE ASSESSMENT ORDER CANNOT BE ACCEPTED IN THE A BSENCE OF GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. W E FIND THAT THE ASSESSEE HAS INSISTED FOR CROSS EXAMINATION DURING THE ASSESSMENT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 78 PROCEEDINGS AND FURTHER DURING THE APPELLATE PROCEE DINGS. THE LD.CIT(A) EVEN CALLED FOR A REMAND REPORT AND DIRECTED THE AO TO ALLOW CROSS EXAMINATION TO THE ASSESSEE. HOWEVER, THE AO HAS EX PRESSED HIS INABILITY TO ALLOW THE ASSESSEE FOR CROSS EXAMINATI ON OF THE WITNESSES DUE TO THE REASON THAT THE WITNESSES BELONG TO KOLK ATA AND IT IS NOT POSSIBLE FOR AO TO MAKE SUCH ARRANGEMENT. THE LD. C IT(A) HAS FINALLY DENIED THE CROSS EXAMINATION TO THE ASSESSEE BY GIV ING HIS FINDING IN PARA 5.11 AT PAGE 188 ALREADY REPRODUCED IN THE EAR LIER PART OF THIS ORDER AND, THEREFORE, THE ONLY REASON FOR DENIAL OF CROSS EXAMINATION BY THE LD.CIT(A) IS THAT THE STATEMENTS ARE SO VOCAL AND U NDENIABLE THAT CROSS EXAMINATION OF SUCH ACCOMMODATION ENTRY PROVIDED BY THOUSANDS OF BENEFICIARIES ACROSS INDIA IS NEITHER PRACTICABLE N OR VIABLE AND THEREFORE UNCALLED FOR. WE FIND THAT THE ASSESSEE HAS DEMAND ED THE CROSS EXAMINATION ONLY IN RESPECT OF THE ALLEGED TRANSACT IONS OF LOANS AND NOT FOR THE ENTIRE BUSINESS OF THE ENTRY PROVIDERS PROV IDING 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 COND UCTED AT THE BACK OF THE ASSESSEE, THEREFORE, THE SAID STATEMENT OF SHRI ANAND SHARMA CANNOT BE THE SOLE BASIS OF ASSESSMENT WITHOUT GIVI NG AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. THE HONBLE SUPR EME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE (SUPRA) W HILE DEALING WITH THE ISSUE OF VIOLATION OF PRINCIPLES OF NATURAL JUS TICE FOR NOT PROVIDING THE OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES W HOSE 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 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 TW O WITNESSES. EVEN ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 79 WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE S TATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NO T GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID P LEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTE NABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DE ALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSS ESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS W ORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOS E DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED 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 OPPORTUNITY OF CROSS- EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERM INE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS W ERE, IN FACT, SOLD TO THE SAID DEALERS WITNESSES AT THE PRICE WHICH IS ME NTIONED IN THE PRICE LIST ITSELF COULD BE THE SUBJECT-MATTER OF CROSS-EXAMINA TION. THEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT-MATTER OF THE CROSS-EXAMINATION AND MAKE TH E REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN E ARLIER OCCASION WHEN THE MATTER CAME UP BEFORE THIS COURT IN CCE V. ANDAMAN TIMBER INDUSTRIES LTD., ORDER DATED 17.3.2005 WAS PASSED R EMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE A PPEAL ON MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSI ONS. 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 I TS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ON LY BASIS OF ISSUING 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 G IVEN BY THE AO AS WELL AS LD. CIT (A), THEN THE ORDERS PASSED BASED O N SUCH STATEMENT ARE NOT SUSTAINABLE IN LAW. THE HONBLE DELHI HIGH COUR T IN CASE OF CIT VS. ASHWANI GUPTA, 322 ITR 396 (DELHI) WHILE DEALING WI TH THE ISSUE OF NOT ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 80 PROVIDING THE OPPORTUNITY TO CROSS EXAMINE THE WITN ESSES 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-T AX ACT, 1961 HAD BEEN FILED BY THE REVENUE BEFORE THE SAID TRIBUNAL. IN THAT ALSO, IN PARAGRAPH ( G ) OF THE MISCELLANEOUS APPLICATION, THE REVENUE HAD SUBMITTED AS UNDER: '( G )BECAUSE, ALTHOUGH FINDINGS OF THE TRIBUNAL ARE FACTUALLY CORRECT BUT THE DECISION OF THE TRIBUNAL IS NOT ACC EPTABLE BECAUSE VIOLATION OF THE CANONS OF NATURAL JUSTICE IN ITSEL F IS NOT FATAL ENOUGH SO AS TO JEOPARDIZE THE ENTIRE PROCEEDINGS. IN THE INTEREST OF JUSTICE, THE TRIBUNAL COULD HAVE SET ASIDE THE A SSESSMENT ORDER WITH THE LIMITED PURPOSE OF OFFERING ASSESSEE AN OP PORTUNITY TO CROSS-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 JUSTICE. HOWEVER, THE REVENUE'S PLEA WAS THAT THE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE WAS NOT FATAL SO AS TO JEOPARDIZE THE ENTIRE PROCEEDING S. THE SAID MISCELLANEOUS APPLICATION WAS ALSO REJECTED BY THE TRIBUNAL BY ITS ORDER DATED 28-11-2008. 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 T HE CASE. ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INAS MUCH AS SEIZED MATERIAL IS NOT PROVIDED TO AN ASSESSEE NOR IS CROSS-EXAMINA TION OF THE PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER RELIES UPON, GRANTED, THEN, SUCH DEFICIENCIES WOULD AMOUNT TO A DENIAL OF OPPORTUNIT Y AND, CONSEQUENTLY, WOULD BE FATAL TO THE PROCEEDINGS. FOLLOWING APPROA CH 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 CONSIDERATION. 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 PER SON ON WHOSE STATEMENT THE AO RELIED UPON, GRANTED, THEN, SUCH D EFICIENCIES WOULD AMOUNT TO DENIAL OF OPPORTUNITY AND CONSEQUENTLY WO ULD BE FATAL TO THE PROCEEDINGS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. MEHTA ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 81 VS. ACIT, 387 ITR 561 (BOMBAY) HAS ALSO CONSIDERED THE ISSUE OF NOT PROVIDING 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 SUB MISSIONS MR. TRALSHAWALA HAD PRESSED INTO SERVICE INTER ALIA THE DECISION OF THE CALCUTTA HIGH COURT IN MATHER & PLATT (INDIA) LTD. ( SUPRA ) AND SUBMITTED THAT MERELY BECAUSE A PERSON IS NOT FOUND AT AN ADD RESS AFTER SEVERAL YEARS IT CANNOT BE HELD THAT HE IS NON EXISTENT AND THAT THE ASSESSEE HAD DISCHARGED HIS PRIMARY ONUS BY IDENTIFYING THE SOUR CE OF THE AMOUNT PAID. THE COURT OBSERVED THAT ONCE THE PRIMARY ONUS IS DI SCHARGED, THE ONUS SHIFTED TO THE REVENUE TO VERIFY 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 PLACED UPO N THE RACK AND CALLED UPON TO EXPLAIN NOT ONLY MERELY, THE ORIGIN AND SOU RCE 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 U PON WHOM THE INITIAL BURDEN LIES, PRODUCES BANK CERTIFICATE TO ESTABLISH THAT THE TRANSACTION WAS CARRIED OUT THROUGH ACCOUNT PAYEE CHEQUES THUS DISC LOSING THE IDENTITY OF THE CREDITORS AS ALSO THE SOURCE OF INCOME, THE BUR DEN SHIFTS ON TO THE DEPARTMENT AND THE DEPARTMENT CANNOT ADD THE CASH C REDITS TO HIS INCOME 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 CR EDIT, THE ASSESSEE MUST SATISFY THREE CONDITIONS I.E. IDENTITY OF THE CREDI TOR, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. I N THE INSTANT CASE BY VIRTUE OF THE FACT THAT THE TRANSACTION WAS COMPLET ED BY CHEQUE PAYMENTS, THE APPELLANT HAS CONTENDED THAT IT HAD SATISFIED A LL THE THREE TESTS. 13. IN KISHANCHAND CHELLARAM ( SUPRA ) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECOR DED THE STATEMENT OF THE MANAGER OF THE BANK AND IT WAS DIFFICULT TO APP RECIATE AS TO WHY IT WAS NOT DONE AND WHY THE MATTER WAS NOT PROBED FURT HER 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 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 ASSES SING OFFICER RELIED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIA L OF OPPORTUNITY AND THEREFORE VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER NEITHER SINCE THE ASSESSING OFFICER HAD FAILED TO PROVIDE COPIES OF S EIZED MATERIAL TO THE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-E XAMINE THE PARTY CONCERNED. THE DIVISION BENCH HELD THAT ONCE THERE IS VIOLATION OF THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 82 PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MA TERIAL WAS NOT PROVIDED TO THE ASSESSEE NOR WAS GIVEN 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 OPPOR TUNITY TO THE ASSESSEE TO CROSS EXAMINE THE WITNESSES AND THE TRIBUNAL MER ELY OBSERVED THAT THE CROSS EXAMINATION OF THE DEALERS IN THAT CASE, COUL D NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT OTHERWISE BE IN POSSES SION OF THE APPELLANT-ASSESSEE. THE SUPREME COURT SET ASIDE THE IMPUGNED ORDER AND OBSERVED THAT IT WAS NOT FOR THE ADJUDICATING AUTHO RITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS EX AMINATION AND MAKE THE REMARKS SUCH AS WAS DONE IN THAT CASE. 16. IN THE INSTANT CASE ALTHOUGH THE APPELLANT ASSESSE E HAS CALLED UPON US TO DRAW AN INFERENCE THAT THE BURDEN SHIFTED TO THE REVENUE 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 GIVEN OUR THOUGHT TO VARIOUS ISSUES RAISED AND THE DECISIONS CITED BY MR.TRALSHAWALLA AND FINDING THAT ON A VERY FUNDAMEN TAL ASPECT, THE REVENUE WAS NOT JUSTIFIED IN MAKING ADDITION AT THE TIME OF REASSESSMENT WITHOUT HAVING FIRST GIVEN THE ASSESSEE AN OPPORTUN ITY TO CROSS EXAMINE THE DEPONENT ON THE STATEMENTS RELIED UPON BY THE A CIT. QUITE APART FROM DENIAL OF AN OPPORTUNITY OF CROSS EXAMINATION, THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BASIS OF WHICH THE DEPA RTMENT SOUGHT TO CONCLUDE THAT THE LOAN WAS A BOGUS 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, T HE DENIAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT AND THEREFORE RENDERS THE ORDER S PASSED BY THE CIT (A) AND THE TRIBUNAL VULNERABLE. IN OUR VIEW THE AS SESSEE WAS BOUND TO BE PROVIDED WITH THE MATERIAL USED AGAINST HIM APAR T FROM BEING PERMITTING HIM TO CROSS EXAMINE THE DEPONENTS. DESP ITE THE REQUEST DATED 15TH FEBRUARY, 1996 SEEKING AN OPPORTUNITY TO CROSS EXAMINE THE DEPONENT AND FURNISH THE ASSESSEE WITH COPIES OF ST ATEMENT AND DISCLOSE MATERIAL, THESE WERE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE ARE INCLINED TO ALLOW THE APPEAL 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, THEREFOR E, RENDERS THE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 83 ASSESSMENT ORDER PASSED BY THE AO NOT SUSTAINABLE. THE LD. A/R HAS SUBMITTED THAT COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DCIT VS. SHRI PRATEEK KOTHARI VIDE ORDER DATED 16 TH DECEMBER, 2012 IN ITA NO. 159/JP/2016 HAS CONSIDERED THIS ISSUE IN PARA 2.8 T O 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 IMPUG NED ASSESSMENT YEAR AND NOT ACCEPTING THE SAID LOAN TRA NSACTION AS A GENUINE TRANSACTION BY THE ASSESSING OFFICER AND THE RESULTANT ADDITION MADE UNDER SECTION 68 OF THE ACT. UNDISPUT EDLY, THE PRIMARY ONUS TO ESTABLISH GENUINENESS OF THE LOAN T RANSACTION IS ON THE ASSESSEE. IN THE INSTANT CASE, THE ASSESS EE HAS PROVIDED THE NECESSARY EXPLANATION, FURNISHED DOCUM ENTARY EVIDENCE IN TERMS OF TAX FILINGS, AFFIDAVITS AND CO NFIRMATION OF THE DIRECTORS, BANK STATEMENTS OF THE LENDER, BALAN CE SHEET OF THE LENDER 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 RESPECT OF SUCH EXPLANATION, DOCUMENTARY EVIDENCE AS WELL AS INDEPENDENT CONFIRMATION. APPARENTLY, TH E REASON FOR NOT ACCEPTING THE SAME IS THAT THE ASSESSING OF FICER WAS IN RECEIPT OF CERTAIN INFORMATION FROM THE INVESTIGATI ON WING OF THE TAX DEPARTMENT AS PER WHICH THE TRANSACTION UND ER CONSIDERATION IS A BOGUS LOAN TRANSACTION. THE SAID INFORMATION RECEIVED FROM THE INVESTIGATION WING TH US OVERWEIGHED THE MIND OF THE ASSESSING OFFICER. THE ASSESSING OFFICER STATED THAT THE PRIMARY ONUS IS ON THE ASSE SSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION CLAIME D BY IT AND IF THE INVESTIGATION DONE BY THE DEPARTMENT LEADS TO D OUBT REGARDING THE GENUINENESS OF THE TRANSACTIONS, IT I S INCUMBENT ON THE ASSESSEE TO PRODUCE THE PARTIES ALONGWITH NE CESSARY DOCUMENTS TO ESTABLISH THE GENUINENESS OF THE TRANS ACTION. IN RESPONSE, THE ASSESSEE SUBMITTED THAT SHRI BHANWARL AL JAIN IS NOT KNOWN TO HIM AND REGARDING VARIOUS INCRIMINATIN G DOCUMENTARY EVIDENCES SEIZED DURING THE COURSE OF S EARCH AND STATEMENTS RECORDED OF SHRI BHANWARLAL JAIN AND OTH ER PERSONS, HE SPECIFICALLY REQUESTED THE AO TO PROVID E COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENT OF ALL V ARIOUS PERSONS RECORDED IN THIS REGARD AND PROVIDE AN OPPO RTUNITY TO THE ASSESSEE TO CROSS EXAMINE SUCH PERSONS. HOWEVER , THE AO DIDNT PROVIDE TO THE ASSESSEE COPIES OF SUCH INCRI MINATING DOCUMENTS AND STATEMENTS OF VARIOUS PERSONS RECORDE D AND ALLOW THE CROSS-EXAMINATION OF ANY OF THESE PERSONS . WHILE ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 84 DOING SO, THE AO STATED THAT IN HIS STATEMENTS, BH ANWARLAL JAIN HAD DESCRIBED THAT THEY ARE INDULGED IN PROVID ING ACCOMMODATION ENTRIES OF BOGUS UNSECURED LOANS AND ADVANCES THROUGH VARIOUS BENAMI CONCERNS (70) OPERA TED AND MANAGED BY THEM. THIS ADMISSION AUTOMATICALLY MAKES ALL THE TRANSACTIONS DONE BY THEM AS MERE PAPER TRANSACTION S 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 LIST OF BENEFICIARIES TO WHOM THE SAID GROUP HAS PROVIDED. THIS ADMISSION IS SUFFICIENT TO REJEC T THE CONTENTIONS OF THE ASSESSEE. FURTHER, REGARDING CR OSS EXAMINATION, THE AO STATED THAT THE RIGHT OF CROSS EXAMINATION IS NOT AN ABSOLUTE RIGHT AND IT DEPENDS UPON THE CI RCUMSTANCES OF EACH CASE AND ALSO ON THE STATUTE CONCERNED. IN THE PRESENT CASE, NO SUCH CIRCUMSTANCES ARE WARRANTED AS IN THE LIST OF BENEFICIARIES TO WHOM ACCOMMODATION ENTRIES WERE PR OVIDED BY THE SAID GROUP CATEGORICALLY CONTAINS THE NAME A ND ADDRESS OF THE ASSESSEE. FURTHER THE GROUP HAS CATEGORICALL Y ADMITTED TO PROVIDING OF ACCOMMODATION ENTRIES OF UNSECURED LOANS THROUGH VARIOUS BENAMI CONCERNS. THE AO FURTHER RE LIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F C. 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 DISCLOSE 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 INFO RMATION INDEPENDENTLY RECEIVED FROM THE INVESTIGATION 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 EXAMINE SUCH INFORMATION AND EXPLAIN ITS POSITION ESPECIALLY WHE N THE ASSESSEE HAS REQUESTED THE SAME TO THE ASSESSING OF FICER. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 85 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-SECTION (3) OF SECTION 23, THE INCOME-TAX OFFICER, THOUGH NOT BOUN D TO RELY ON EVIDENCE PRODUCED BY THE ASSESSEE AS HE CONSIDERS T O BE FALSE, YET IF HE PROPOSES TO MAKE AN ESTIMATE IN DISREGARD OF THAT EVIDENCE, HE SHOULD IN FAIRNESS DISCLOSE TO THE ASS ESSEE THE MATERIAL ON WHICH HE IS GOING TO FIND THAT ESTIMATE ; AND THAT IN CASE HE PROPOSES TO USE AGAINST THE ASSESSEE THE RE SULT OF ANY PRIVATE INQUIRIES MADE BY HIM, HE MUST COMMUNICATE TO THE ASSESSEE THE SUBSTANCE OF THE INFORMATION SO PROPOS ED TO BE UTILIZED TO SUCH AN EXTENT AS TO PUT THE ASSESSEE I N POSSESSION OF FULL PARTICULARS OF THE CASE HE IS EXPECTED TO MEET AND THAT HE SHOULD FURTHER GIVE HIM AMPLE OPPORTUNITY TO MEET I T. IT WAS HELD IN THAT CASE THAT IN THIS CASE WE ARE OF THE OPINION THAT THE TRIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OF JUSTICE IN REACHING ITS CONCLUSIONS. FIRSTLY, IT DID NOT DISCL OSE TO THE ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT B Y THE DEPARTMENTAL REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNITY TO THE COMPANY TO REBUT THE MATERIAL FU RNISHED TO IT BY HIM, AND LASTLY, IT DECLINED TO TAKE ALL THE MAT ERIAL THAT THE ASSESSEE WANTED TO PRODUCE IN SUPPORT OF ITS CASE. THE RESULT IS THAT THE ASSESSEE 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 N OT BOUND BY ANY TECHNICAL RULES OF THE LAW OF EVIDENCE. IT I S OPEN TO HIM TO COLLECT MATERIAL TO FACILITATE ASSESSMENT EV EN BY PRIVATE ENQUIRY. BUT, IF HE DESIRES TO USE THE MATE RIAL SO COLLECTED, THE ASSESSEE MUST BE INFORMED ABOUT THE MATERIAL AND GIVEN ADEQUATE OPPORTUNITY TO EXPLAIN IT. THE S TATEMENTS MADE BY PRAVEEN JAIN AND GROUP WERE MATERIAL ON WHI CH THE IT AUTHORITIES COULD ACT PROVIDED THE MATERIAL WAS DISCLOSED AND THE ASSESSEE HAD AN OPPORTUNITY TO RENDER 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) 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 ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 86 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 MANAGE R OF THE BANK COULD IN THE CIRCUMSTANCES BE SOUGHT OR AVAILE D OF BY THE ASSESSEE. IT IS TRUE THAT THE PROCEEDINGS UNDER THE INCOME- TAX LAW ARE NOT GOVERNED BY THE STRICT RULES OF EVI DENCE 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 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 ASSESSE E, IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED BY THE A O RELYING SOLELY ON THE INFORMATION RECEIVED FROM THE INVESTI GATION WING, STATEMENT RECORDED U/S 132(4) OF SHRI BHANWARLAL JA IN AND OTHERS, AND VARIOUS INCRIMINATING DOCUMENTARY EVIDE NCE FOUND FROM THE SEARCH AND SEIZURE CARRIED OUT BY INVESTIG ATION WING, MUMBAI ON THE SHRI BHANWARLAL JAIN GROUP ON 03.10.2 013. IT REMAINS UNDISPUTED THAT THE ASSESSEE WAS NEVER PROV IDED COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMEN TS OF SHRI BHANWARLAL JAIN AND VARIOUS PERSONS AND AN OPPORTUN ITY TO ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 87 CROSS EXAMINE SUCH PERSONS THOUGH HE SPECIFICALLY A SKED FOR 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 CE RTAINLY IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY REND ERS THE ASSESSMENT ORDER BASED ON SUCH STATEMENT AS NOT SUSTAINABLE IN LAW. HENCE IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE TH E ASSESSEE HAS REPEATEDLY REQUESTED AND DEMANDED THE CROSS EXAMINA TION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO IN THE ASSESSMENT ORDER AND FURTHER THE REPORT OF THE DDIT INVESTIGATION KOLKATA IS ALSO BASED ON THE STATEMENT OF SUCH PERS ON THEN THE DENIAL OF CROSS EXAMINATION BY THE AO AS WELL AS LD. CIT (A) DESPITE THE FACT THAT THE ASSESSEE WAS READY TO BEAR THE COST OF THE CROS S EXAMINATION OF THE WITNESSES IS A GROSS VIOLATION OF PRINCIPLES OF NAT URAL 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 LIA BLE TO BE DELETED. ACCORDINGLY THE ADDITION MADE BY THE AO IS ALSO DEL ETED ON MERITS APART FROM THE LEGAL ISSUE DECIDED IN FAVOUR OF THE ASSES SEE. THE FACTS AND CIRCUMSTANCES IN BOTH THE CASES ARE I DENTICAL AND THEREFORE, FOLLOWING THE EARLIER ORDER OF THIS TRIB UNAL IN CASE OF KOTA DALL MILL, WE HOLD THAT THE ADDITION MADE BY THE ASSESSI NG OFFICER ON THE BASIS OF THE INFORMATION/REPORT OF THE DDIT (INVEST IGATION), KOLKATA AS WELL AS THE STATEMENTS OF SHRI ANAND SHARMA AND SHR I ANKIT BAGRI WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION IS NOT SUSTAINABLE AS ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 88 THE ADDITION IS SOLELY BASED ON THE STATEMENT AND I NFORMATION WHICH IS NOTHING BUT SUMMARY OF STATEMENTS RECORDED BY THE D DIT(INV), KOLKATA. HENCE, THE ADDITION MADE BY THE ASSESSING OFFICER I S DELETED. GROUND NO. 2 OF THE APPEAL IS DECIDED IN FAVOUR OF THE ASS ESSEE. WE FIND THAT THE A.O. HAS NOT REFERRED ANY INCRIMIN ATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE PROCEEDINGS BUT WHAT IS RELIED UPON BY THE A.O. IS THE REPORT OF THE INVESTIGATION WING, KOLKA TA, WHICH WAS PREEXISTING THE SEARCH AND SEIZURE ACTION IN THE CA SE OF THE ASSESSEE. ACCORDINGLY IN VIEW OF THE EARLIER ORDERS OF THIS TR IBUNAL, THE ADDITION MADE BY THE A.O. ARE OTHERWISE NOT SUSTAINABLE IN LA W. 11. AS REGARDS THE ORDER PASSED BY THE A.O. WITHOUT GIVING THE OPPORTUNITY OF CROSS EXAMINATION, WE FIND THAT THE F ACTS ON THIS ISSUE ARE IDENTICAL AS IN THE CASE OF OTHER GROUP CONCERNS OF KOTA DALL MILL. IN THE CASE OF M/S MULTIMETALS LIMITED VS DCIT (SUPRA), TH E TRIBUNAL HAS AGAIN CONSIDERED THIS ISSUE AND FOLLOWED THE DECISION OF T HE TRIBUNAL IN THE CASE OF KOTA DALL MILL (SUPRA). THE RELEVANT FINDINGS OF THE TRIBUNAL ARE REPRODUCED IN THE FOREGOING PARAS OF THIS ORDER. HE NCE, FOLLOWING THE EARLIER ORDERS OF THIS TRIBUNAL, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 14. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ITA NO. 1192/JP/2018 & CO 44/JP/2018 DCIT VS. M/S HADOTI PUNJI VIKAS LTD. 89 ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MARCH, 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 TH MARCH, 2019. *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE D.C.I.T., CENTRAL CIRCLE, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- M/S HADOTI PUNJI VIKAS LTD., 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. 1192/JP/2018 & CO 44/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. 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