M/s B B Jewellers and Finance Pvt Ltd , Bangalore V. Deputy Commissioner of Income Tax Central Circle-1(4), Bangalore

ITA 1623/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6718 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-09-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 16-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G S PRASHANTH
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained investment; Opportunity of being heard; Principle of natural justice; Reason to believe; Set aside
• Section: 143(3); 153A; 234B; 13; 22; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER ITA NO S . 1619 TO 1623 /BANG/2018 ASSESSMENT YEARS : 2007 08 AND 2010 11 TO 2013-14 M/S. B. B. JEWELLERS AND FINANCE PVT. LTD., NO.815, 8 TH BLOCK, NEAR KORAMANGALA POLICE STATION, KORAMANGALA BANGALORE 560 095. PAN : A ABC B 6643 G VS. DCIT, CENTRAL CIRCLE 1(4), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : S HR I. G. S. PRASHANTH, CA REVENUE BY : SHR I. MUZAFFAR HUSSAIN, CIT ( D R)(ITAT), BENGALURU DATE OF HEARING : 0 7 . 0 9 .20 20 DATE OF PRONOUNCEMENT : 11 . 0 9 .20 20 O R D E R PER BENCH: THESE FIVE APPEALS ARE FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST A COMBINED ORDER OF LEARNED CIT(A) 11 BENGALURU, DATED 21.03.2018 FOR A. Y. 2007 08 AND 2010 11 TO 2013-14. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ITA NOS. 1619 TO 1623/BANG/2018 PAGE 2 OF 26 ITA NO.1619/BANG/2018 1 THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS.1,98,33,130/- AS AGAINST TOTAL INCOME OF RS.38,130/- RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3 A) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.1,97,95,000/- BY TREATING THE SHARE APPLICATION MONEY RECEIVED AS UNEXPLAINED CASH CREDITS UNDER THE FACTS OF THE CASE. B) WITHOUT PREJUDICE THE AUTHORITIES BELOW ERRED IN TREATING THE AMOUNTS REFUNDED TO MR. AMEET SAINI OF RS.2,00,000/- AS UNEXPLAINED CASH CREDITS UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. A) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED THE ONUS CAST ON IT BY THE ACT IN PROVIDING ALL THE DETAILS AS REGARDS TO THE SHARE APPLICANTS AND THUS THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE IMPUGNED AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS IMPROPER AND UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 AS IT STOOD FOR THE IMPUGNED ASSESSMENT YEAR DID NOT REQUIRE THE APPELLANT TO PROVE THE SOURCE OF SOURCE OF THE SHARE APPLICATIONS AND HENCE THE ORDERS PASSED ARE BAD IN LAW AND NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 5. THE AUTHORITIES BELOW FAILED TO TAKE COGNISANCE OF THE VARIOUS DOCUMENTS/ DETAILS/ INFORMATION SUBMITTED BY THE APPELLANT AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND WHICH IS OPPOSED TO THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER PASSED NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 3 OF 26 6. THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CONFIRMATION LETTERS FILED BY THE APPELLANT AS BOGUS IS UNFOUNDED AND ON IMAGINARY BASIS AS THE APPELLANT HAD PROVED THE IDENTITY OF THE PERSONS AND CONSEQUENTLY THE ADDITION MADE ON SUCH INCORRECT BASIS DOES NOT STAND THE TEST OF LAW. 7 THE ADDITION OF RS.1,97,95,000/- IS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE EVIDENCE ON RECORD AND THUS THE ADDITION MADE NEEDS TO BE DELETED IN THE INTEREST OF EQUITY AND JUSTICE. 8. WITHOUT PREJUDICE, THE AMOUNT OF RS.1,97,95,000/- CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. A) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE COPY OF INVESTIGATION REPORTS OF THE KOLKATA AND THE BENGALURU INVESTIGATION UNITS, WHICH WAS USED AGAINST THE APPELLANT AND THEREFORE THE ADDITIONS MADE ON SUCH BASIS CANNOT STAND THE TEST OF LAW AND NEEDS TO BE DELETED ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN NOT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE APPELLANT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. C) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE SWORN STATEMENT RECORDED FROM THE MANAGING DIRECTOR WHICH WAS USED AGAINST THE APPELLANT AND THUS THE ORDERS PASSED ARE VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ORDERS NEED TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 10. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT UNDER THE IMPUGNED ORDER ON THE GROUND THAT: - A) THE SEARCH INITIATED IN THE CASE OF THE APPELLANT IS ILLEGAL AND ULTRA VIRES PROVISIONS OF SECTION 132(1)(A), (B) & (C) OF THE ACT; B) THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PURELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 132(2) IS BAD IN LAW AND CONSEQUENT ASSESSMENT UNDER SECTION 153A IS NULL AND ITA NOS. 1619 TO 1623/BANG/2018 PAGE 4 OF 26 VOID-AB-INITIO ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJITH JAIN, REPORTED IN 260 ITR 80. C) THE LEARNED AUTHORITIES BELOW HAVE NOT DISCHARGED THE BURDEN OF PROVING THAT THERE IS A VALID INITIATION OF SEARCH UNDER SECTION 132(1)(A), (B) & (C) OF THE ACT, ITS EXECUTION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PROCEEDINGS VALID AND TO ASSUME JURISDICTION TO MAKE AN ASSESSMENT UNDER SECTION 153A OF THE ACT. D) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSMENT UNDER SECTION 153A OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJIT JAIN, REPORTED IN 260 ITR 80. E) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE INTENTION OF THE AMENDMENT TO SECTION 132(1) OF THE ACT WAS TO MAINTAIN CONFIDENTIALITY OF THE SOURCE OF INFORMATION AND IDENTITY OF THE INFORMER AND NOT TO IGNORE THE PROCEDURES TO BE FOLLOWED TO CONDUCT A VALID SEARCH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. F) THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT THE EXPLANATION TO SECTION 132(1) OF THE ACT ONLY PROHIBITS THE NON- DISCLOSURE OF REASON TO BELIEVE/ REASON TO SUSPECT BUT IT DOES NOT PRECLUDE THE AUTHORITIES FROM LOOKING INTO OTHER ASPECTS OF VALIDITY OF SEARCH PROCEEDINGS AND THUS THE CIT(A) OUGHT TO HAVE EXAMINED THE VITAL ASPECTS OF SEARCH AND FAILURE TO DO SO RENDERS THE ENTIRE PROCEEDINGS BAD IN LAW. G) THE CIT(A) ERRED IN LAW IN EXAMINING THE EXPLANATION 1 TO SECTION 132(1) OF THE ACT AND THE SAME IS TO BE IGNORED AS THE PAST ACTIONS HAVE NOT BEEN VALIDATED AND CONSEQUENTLY THE LEARNED CIT(A) OUGHT NOT TO HAVE LOOKED INTO THE EXPLANATION (1) TO SECTION 132(1) OF THE ACT TO ADJUDICATE THE VALIDITY OF SEARCH UNDER THE FACTS & CIRCUMSTANCES OF THE CASE. H) THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153A OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN COMPLIED WITH AND ITA NOS. 1619 TO 1623/BANG/2018 PAGE 5 OF 26 CONSEQUENTLY THE ORDER OF ASSESSMENT IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 11. THE COPY OF THE APPROVAL OF THE JOINT COMMISSIONER WAS NOT OBTAINED OR HAVING OBTAINED, THE COPY OF THE SAME IS NOT PROVIDED TO THE APPELLANT WHICH IS IN VIOLATION OF THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER OF ASSESSMENT NEEDS TO BE SET ASIDE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE AUTHORITIES BELOW PASSED THE ORDER WITHOUT CONSIDERING THE CRITICAL AND IMPORTANT SUBMISSIONS MADE BY THE APPELLANT WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 13. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTION 234A (3), 234B AND 234C OF THE ACT AND FURTHER THE COMPUTATION OF INTEREST WAS NOT PROVIDED TO THE APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATION OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 14. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 15. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. ITA NO.1620/BANG/2018 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS.3,54,81,990/- AS AGAINST TOTAL INCOME RS.4,81,990/- RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 6 OF 26 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.3,50,00,000/- BY TREATING THE SHARE APPLICATION MONEY RECEIVED AS UNEXPLAINED CASH CREDITS UNDER THE FACTS OF THE CASE. 4. A) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED THE ONUS CAST ON IT BY THE ACT IN PROVIDING ALL THE DETAILS AS REGARDS TO THE SHARE APPLICANTS AND THUS THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE IMPUGNED AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS IMPROPER AND UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 AS IT STOOD FOR THE IMPUGNED ASSESSMENT YEAR DID NOT REQUIRE THE APPELLANT TO PROVE THE SOURCE OF SOURCE OF THE SHARE APPLICATIONS AND HENCE THE ORDERS PASSED ARE BAD IN LAW AND NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 5. THE AUTHORITIES BELOW FAILED TO TAKE COGNISANCE OF THE VARIOUS DOCUMENTS/ DETAILS' INFORMATION SUBMITTED BY THE APPELLANT AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND WHICH IS OPPOSED TO THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER PASSED NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. 6. THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CONFIRMATION LETTERS FILED BY THE APPELLANT AS BOGUS IS UNFOUNDED AND ON IMAGINARY BASIS AS THE APPELLANT HAD PROVED THE IDENTITY OF THE PERSONS AND CONSEQUENTLY THE ADDITION MADE ON SUCH INCORRECT BASIS DOES NOT STAND THE TEST OF LAW. 7 THE ADDITION OF RS.3,50,00,000/- IS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE EVIDENCE ON RECORD AND THUS THE ADDITION MADE NEEDS TO BE DELETED IN THE INTEREST OF EQUITY AND JUSTICE. 8. WITHOUT PREJUDICE, THE AMOUNT OF RS.3,50,00,000/- CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. A) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE COPY OF INVESTIGATION REPORTS OF THE KOLKATA AND THE BENGALURU INVESTIGATION UNITS, WHICH WAS USED AGAINST THE APPELLANT AND ITA NOS. 1619 TO 1623/BANG/2018 PAGE 7 OF 26 THEREFORE THE ADDITIONS MADE ON SUCH BASIS CANNOT STAND THE TEST OF LAW AND NEEDS TO BE DELETED ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN NOT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE APPELLANT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. C) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE SWORN STATEMENT RECORDED FROM THE MANAGING DIRECTOR WHICH WAS USED AGAINST THE APPELLANT AND THUS THE ORDERS PASSED ARE VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ORDERS NEED TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 10. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT UNDER THE IMPUGNED ORDER ON THE GROUND THAT: - A) THE SEARCH INITIATED IN THE CASE OF THE APPELLANT IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 132(1)(A), (B) & (C) OF THE ACT; B) THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PURELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 132(2) IS BAD IN LAW AND CONSEQUENT ASSESSMENT UNDER SECTION 153A IS NULL AND VOID-AB-INITIO ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJITH JAIN, REPORTED IN 260 ITR 80. C) THE LEARNED AUTHORITIES BELOW HAVE NOT DISCHARGED THE BURDEN OF PROVING THAT THERE IS A VALID INITIATION OF SEARCH UNDER SECTION 132(1)(A), (B) & (C) OF THE ACT, ITS EXECUTION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PROCEEDINGS VALID AND TO ASSUME JURISDICTION TO MAKE AN ASSESSMENT UNDER SECTION 153A OF THE ACT. D) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSMENT UNDER SECTION 153A OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJIT JAIN, REPORTED IN 260 ITR 80. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 8 OF 26 E) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE INTENTION OF THE AMENDMENT TO SECTION 132(1) OF THE ACT WAS TO MAINTAIN CONFIDENTIALITY OF THE SOURCE OF INFORMATION AND IDENTITY OF THE INFORMER AND NOT TO IGNORE THE PROCEDURES TO BE FOLLOWED TO CONDUCT A VALID SEARCH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. F) THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT THE EXPLANATION TO SECTION 132(1) OF THE ACT ONLY PROHIBITS THE NON- DISCLOSURE OF REASON TO BELIEVE/ REASON TO SUSPECT BUT IT DOES NOT PRECLUDE THE AUTHORITIES FROM LOOKING INTO OTHER ASPECTS OF VALIDITY OF SEARCH PROCEEDINGS AND THUS THE CIT(A) OUGHT TO HAVE EXAMINED THE VITAL ASPECTS OF SEARCH AND FAILURE TO DO SO RENDERS THE ENTIRE PROCEEDINGS BAD. G) THE CIT(A) ERRED IN LAW IN EXAMINING THE EXPLANATION 1 TO SECTION 132(1) OF THE ACT AND THE SAME IS TO BE IGNORED AS THE PAST ACTIONS HAVE NOT BEEN VALIDATED AND CONSEQUENTLY THE LEARNED CIT(A) OUGHT NOT TO HAVE LOOKED INTO THE EXPLANATION (1) TO SECTION 132(1) OF THE ACT TO ADJUDICATE THE VALIDITY OF SEARCH UNDER THE FACTS & CIRCUMSTANCES OF THE CASE. H) THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153A OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE ORDER OF ASSESSMENT IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 11. THE COPY OF THE APPROVAL OF THE JOINT COMMISSIONER WAS NOT OBTAINED OR HAVING OBTAINED, THE COPY OF THE SAME IS NOT PROVIDED TO THE APPELLANT WHICH IS IN VIOLATION OF THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER OF ASSESSMENT NEEDS TO BE SET ASIDE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE AUTHORITIES BELOW PASSED THE ORDER WITHOUT CONSIDERING THE CRITICAL AND IMPORTANT SUBMISSIONS MADE BY THE APPELLANT WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 13. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTION 234A(3), 234B(3), 234B AND 234C OF THE ACT AND FURTHER THE COMPUTATION OF INTEREST WAS NOT PROVIDED TO THE APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATION OF INTEREST ITA NOS. 1619 TO 1623/BANG/2018 PAGE 9 OF 26 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 14. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 15. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. ITA NO.1621/BANG/2018 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS.6,41,49,100/- AS AGAINST TOTAL INCOME RS.2,49,100/- RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.6,39,00,000/- BY TREATING THE SHARE APPLICATION MONEY RECEIVED AS UNEXPLAINED CASH CREDITS UNDER THE FACTS OF THE CASE. 4. A) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED THE ONUS CAST ON IT BY THE ACT IN PROVIDING ALL THE DETAILS AS REGARDS TO THE SHARE APPLICANTS AND THUS THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE IMPUGNED AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS IMPROPER AND UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 AS IT STOOD FOR THE IMPUGNED ASSESSMENT YEAR DID NOT REQUIRE THE APPELLANT TO PROVE THE SOURCE OF SOURCE OF THE SHARE APPLICATIONS AND HENCE THE ORDERS PASSED ARE BAD IN LAW AND NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 5. THE AUTHORITIES BELOW FAILED TO TAKE COGNISANCE OF THE VARIOUS DOCUMENTS/ DETAILS/ INFORMATION SUBMITTED BY THE APPELLANT AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT ITA NOS. 1619 TO 1623/BANG/2018 PAGE 10 OF 26 APPLICATION OF MIND WHICH IS OPPOSED TO THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER PASSED NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. 6. THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CONFIRMATION LETTERS FILED BY THE APPELLANT AS BOGUS IS UNFOUNDED AND ON IMAGINARY BASIS AS THE APPELLANT HAD PROVED THE IDENTITY OF THE PERSONS AND CONSEQUENTLY THE ADDITION MADE ON SUCH INCORRECT BASIS DOES NOT STAND THE TEST OF LAW. 7. THE ADDITION OF RS.6,39,00,000/- IS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE EVIDENCE ON RECORD AND THUS THE ADDITION MADE NEEDS TO BE DELETED IN THE INTEREST OF EQUITY AND JUSTICE. 8. WITHOUT PREJUDICE, THE AMOUNT OF RS.6,39,00,000/- CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. A) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE COPY OF INVESTIGATION REPORTS OF THE KOLKATA AND THE BENGALURU INVESTIGATION UNITS, WHICH WAS USED AGAINST THE APPELLANT AND THEREFORE THE ADDITIONS MADE ON SUCH BASIS CANNOT STAND THE TEST OF LAW AND NEEDS TO BE DELETED ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN NOT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE APPELLANT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. C) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE SWORN STATEMENT RECORDED FROM THE MANAGING DIRECTOR WHICH WAS USED AGAINST THE APPELLANT AND THUS THE ORDERS PASSED ARE VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ORDERS NEED TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 10. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT UNDER THE IMPUGNED ORDER ON THE GROUND THAT: - A) THE SEARCH INITIATED IN THE CASE OF THE APPELLANT IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 132(1)(A), (B) & (C) OF THE ACT; ITA NOS. 1619 TO 1623/BANG/2018 PAGE 11 OF 26 B) THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PURELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 132(2) IS BAD IN LAW AND CONSEQUENT ASSESSMENT UNDER SECTION 153A IS NULL AND VOID-AB-INITIO ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJITH JAIN, REPORTED IN 260 ITR 80. C) THE LEARNED AUTHORITIES BELOW HAVE NOT DISCHARGED THE BURDEN OF PROVING THAT THERE IS A VALID INITIATION OF SEARCH UNDER SECTION 132(1)(A), (B) & (C) OF THE ACT, ITS EXECUTION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PROCEEDINGS VALID AND TO ASSUME JURISDICTION TO MAKE AN ASSESSMENT UNDER SECTION 153A OF THE ACT. D) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSMENT UNDER SECTION 153A OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJIT JAIN, REPORTED IN 260 ITR 80. E) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE INTENTION OF THE AMENDMENT TO SECTION 132(1) OF THE ACT WAS TO MAINTAIN CONFIDENTIALITY OF THE SOURCE OF INFORMATION AND IDENTITY OF THE INFORMER AND NOT TO IGNORE THE PROCEDURES TO BE FOLLOWED TO CONDUCT A VALID SEARCH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. F) THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT THE EXPLANATION TO SECTION 132(1) OF THE ACT ONLY PROHIBITS THE NON-DISCLOSURE OF REASON TO BELIEVE/ REASON TO SUSPECT BUT IT DOES NOT PRECLUDE THE AUTHORITIES FROM LOOKING INTO OTHER ASPECTS OF VALIDITY OF SEARCH PROCEEDINGS AND THUS THE CIT(A) OUGHT TO HAVE EXAMINED THE VITAL ASPECTS OF SEARCH AND FAILURE TO DO SO RENDERS THE ENTIRE PROCEEDINGS BAD. G) THE CIT(A) ERRED IN LAW IN EXAMINING THE EXPLANATION 1 TO SECTION 132(1) OF THE ACT AND THE SAME IS TO BE IGNORED AS THE PAST ACTIONS HAVE NOT BEEN VALIDATED AND CONSEQUENTLY THE LEARNED CIT(A) OUGHT NOT TO HAVE LOOKED INTO -THE EXPLANATION ITA NOS. 1619 TO 1623/BANG/2018 PAGE 12 OF 26 (1) TO SECTION 132(1) OF THE ACT TO ADJUDICATE THE VALIDITY OF SEARCH UNDER THE FACTS & CIRCUMSTANCES OF THE CASE. H) THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS*THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153A OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE ORDER OF ASSESSMENT IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 11. THE COPY OF THE APPROVAL OF THE JOINT COMMISSIONER WAS NOT OBTAINED OR HAVING OBTAINED, THE COPY OF THE SAME IS NOT PROVIDED TO THE APPELLANT WHICH IS IN VIOLATION OF THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER OF ASSESSMENT NEEDS TO BE SET ASIDE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE AUTHORITIES BELOW PASSED THE ORDER WITHOUT CONSIDERING THE CRITICAL AND IMPORTANT SUBMISSIONS MADE BY THE APPELLANT WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 13. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTIONS 234A (3) AND 234B OF THE ACT AND FURTHER THE COMPUTATION OF INTEREST WAS NOT PROVIDED TO THE APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATION OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 14. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 15. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. ITA NO.1622/BANG/2018 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 13 OF 26 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS.10,31,55,900/- AS AGAINST TOTAL INCOME RS. 6,55,900/- RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. A) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.10,25,00,000/- BY TREATING SHARE APPLICATION MONEY RECEIVED AS UNEXPLAINED CASH CREDITS UNDER THE FACTS OF THE CASE. B) WITHOUT PREJUDICE THE AUTHORITIES BELOW ERRED IN TREATING THE AMOUNTS REFUNDED OF RS. 6,80,20,000/- AS UNEXPLAINED CASH CREDITS BASED ON THE FACTS OF THE CASE. 4. A) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED THE ONUS CAST ON IT BY THE ACT IN PROVIDING ALL THE DETAILS AS REGARDS TO THE SHARE APPLICANTS AND THUS THE ACTION OF THE AUTHORITIES BELOW IN TREATING THE IMPUGNED AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS IMPROPER AND UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 AS IT STOOD FOR THE IMPUGNED ASSESSMENT YEAR DID NOT REQUIRE THE APPELLANT TO PROVE THE SOURCE OF SOURCE OF THE SHARE APPLICATIONS AND HENCE THE ORDERS PASSED ARE BAD IN LAW AND NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 5. THE AUTHORITIES BELOW FAILED TO TAKE COGNISANCE OF THE VARIOUS DOCUMENTS/ DETAILS/ INFORMATION SUBMITTED BY THE APPELLANT AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND WHICH IS OPPOSED TO THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER PASSED NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. 6. THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CONFIRMATION LETTERS FILED BY THE APPELLANT AS BOGUS IS UNFOUNDED AND ON IMAGINARY BASIS AS THE APPELLANT HAD PROVED THE IDENTITY OF THE PERSONS AND CONSEQUENTLY THE ADDITION MADE ON SUCH INCORRECT BASIS DOES NOT STAND THE TEST OF LAW. 7. THE ADDITION OF RS.10,25,00,000/- IS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE EVIDENCE ON RECORD AND THUS THE ADDITION MADE NEEDS TO BE DELETED IN THE INTEREST OF EQUITY AND JUSTICE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 14 OF 26 8. WITHOUT PREJUDICE, THE AMOUNT OF RS.10,25,00,000/- CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. A) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE COPY OF INVESTIGATION REPORTS OF THE KOLKATA AND THE BENGALURU INVESTIGATION UNITS, WHICH WAS USED AGAINST THE APPELLANT AND THEREFORE THE ADDITIONS MADE ON SUCH BASIS CANNOT STAND THE TEST OF LAW AND NEEDS TO BE DELETED ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN NOT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE APPELLANT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. C) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE SWORN STATEMENT RECORDED FROM THE MANAGING DIRECTOR WHICH WAS USED AGAINST THE APPELLANT AND THUS THE ORDERS PASSED ARE VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ORDERS NEED TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 10. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT UNDER THE IMPUGNED ORDER ON THE GROUND THAT: - A) THE SEARCH INITIATED IN THE CASE OF THE APPELLANT IS ILLEGAL AND ULTRA VIRES THE PROVISIONS OF SECTION 132(1)(A), (B) & (C) OF THE ACT; B) THAT THE SEARCH IS CONDUCTED NOT ON THE BASIS OF ANY PRIOR INFORMATION OR MATERIAL INDUCING ANY BELIEF BUT PURELY ON THE SUSPICION AND THEREFORE, THE ACTION UNDER SECTION 132(2) IS BAD IN LAW AND CONSEQUENT ASSESSMENT UNDER SECTION 153A IS NULL AND VOID-AB-INITIO ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJITH JAIN, REPORTED IN 260 ITR 80. C) THE LEARNED AUTHORITIES BELOW HAVE NOT DISCHARGED THE BURDEN OF PROVING THAT THERE IS A VALID INITIATION OF SEARCH UNDER SECTION 132(1)(A); (B) & (C) OF THE ACT, ITS EXECUTION AND ITS COMPLETION IN ACCORDANCE WITH LAW TO RENDER THE PROCEEDINGS VALID AND TO ITA NOS. 1619 TO 1623/BANG/2018 PAGE 15 OF 26 ASSUME JURISDICTION TO MAKE AN ASSESSMENT UNDER SECTION 153A OF THE ACT. D) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT A VALID SEARCH IS A SINE QUA NON FOR MAKING A VALID ASSESSMENT UNDER SECTION 153A OF THE ACT ON THE PARITY OF THE RATIO OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF UOI VS. AJIT JAIN, REPORTED IN 260 ITR 80. E) THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE INTENTION OF THE AMENDMENT TO SECTION 132(1) OF THE ACT WAS TO MAINTAIN CONFIDENTIALITY OF THE SOURCE OF INFORMATION AND IDENTITY OF THE INFORMER AND NOT TO IGNORE THE PROCEDURES TO BE FOLLOWED TO CONDUCT A VALID SEARCH UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. F) THE LEARNED CIT(A) FURTHER FAILED TO APPRECIATE THE FACT THAT THE EXPLANATION TO SECTION 132(1) OF THE ACT ONLY PROHIBITS THE NON- DISCLOSURE OF REASON TO BELIEVE/ REASON TO SUSPECT BUT IT DOES NOT PRECLUDE THE AUTHORITIES FROM LOOKING INTO OTHER ASPECTS OF VALIDITY OF SEARCH PROCEEDINGS AND THUS THE CIT(A) OUGHT TO HAVE EXAMINED THE VITAL ASPECTS OF SEARCH AND FAILURE TO DO SO RENDERS THE ENTIRE PROCEEDINGS BAD. G) THE CIT(A) ERRED IN LAW IN EXAMINING THE EXPLANATION 1 TO SECTION 132(1) OF THE ACT AND THE SAME IS TO BE IGNORED AS THE PAST ACTIONS HAVE NOT BEEN VALIDATED AND CONSEQUENTLY THE LEARNED CIT(A) OUGHT NOT TO HAVE LOOKED INTO THE EXPLANATION (1) TO SECTION 132(1) OF THE ACT TO ADJUDICATE THE VALIDITY OF SEARCH UNDER THE FACTS & CIRCUMSTANCES OF THE CASE. H) THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153A OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE ORDER OF ASSESSMENT IS BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 11. THE COPY OF THE APPROVAL OF THE JOINT COMMISSIONER WAS NOT OBTAINED OR HAVING OBTAINED, THE COPY OF THE SAME IS NOT PROVIDED TO THE APPELLANT WHICH IS IN VIOLATION OF THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER OF ASSESSMENT NEEDS TO BE SET ASIDE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 16 OF 26 12. THE AUTHORITIES BELOW PASSED THE ORDER WITHOUT CONSIDERING THE CRITICAL AND IMPORTANT SUBMISSIONS MADE BY THE APPELLANT WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 13. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTIONS 234A(3), 234B(3), 234B AND 234C OF THE ACT AND FURTHER THE COMPUTATION OF INTEREST OF WAS NOT PROVIDED TO THE APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATION OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 14. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 15. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. ITA NO.1623/BANG/2018 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSED ON A TOTAL INCOME OF RS.11,82,45,290/- AS AGAINST TOTAL INCOME RS.8,43,030/- RETURNED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. A) THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.10,39,00,000/- BY TREATING THE SHARE APPLICATION MONEY RECEIVED AS UNEXPLAINED CASH CREDIT UNDER THE FACTS OF THE CASE. B) WITHOUT PREJUDICE THE AUTHORITIES BELOW ERRED IN TREATING THE AMOUNTS REFUNDED OF RS.9,00,00,000/- AS UNEXPLAINED CASH CREDITS BASED ON THE FACTS OF THE CASE. 4. A) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE APPELLANT HAD DISCHARGED THE ONUS CAST ON IT BY THE ACT IN PROVIDING ALL THE DETAILS AS REGARDS THE SHARE APPLICANTS AND THUS THE ACTION OF THE ITA NOS. 1619 TO 1623/BANG/2018 PAGE 17 OF 26 AUTHORITIES BELOW IN TREATING THE IMPUGNED AMOUNT AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT IS IMPROPER AND UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 68 AS IT STOOD FOR THE IMPUGNED ASSESSMENT YEAR DID NOT REQUIRE THE APPELLANT TO PROVE THE SOURCE OF SOURCE OF THE SHARE APPLICATIONS AND HENCE THE ORDERS PASSED ARE BAD IN LAW AND NEEDS TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 5) THE AUTHORITIES BELOW FAILED TO TAKE COGNISANCE OF THE VARIOUS DOCUMENTS./ DETAILS INFORMATION SUBMITTED BY THE APPELLANT AND CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND WHICH IS OPPOSED TO THE SETTLED PRINCIPLES OF NATURAL JUSTICE AND THUS THE ORDER PASSED NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. 6) THE ACTION OF THE ASSESSING OFFICER IN TREATING THE CONFIRMATION LETTERS FILED BY THE APPELLANT AS BOGUS IS UNFOUNDED AND ON IMAGINARY BASIS AS THE APPELLANT HAD PROVED THE IDENTITY OF THE PERSONS AND CONSEQUENTLY THE ADDITION MADE ON SUCH INCORRECT BASIS DOES NOT STAND THE TEST OF LAW. 7) THE ADDITION OF RS.10,39,00,000/- IS WITHOUT APPLICATION OF MIND AND CONTRARY TO THE EVIDENCE ON RECORD AND THUS THE ADDITION MADE NEEDS TO BE DELETED IN THE INTEREST OF EQUITY AND JUSTICE. 8) WITHOUT PREJUDICE, THE AMOUNT OF RS.10,39,00,000/- CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 9) A) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE COPY OF INVESTIGATION REPORTS OF THE KOLKATA AND THE BENGALURU INVESTIGATION UNITS, WHICH WAS USED AGAINST THE APPELLANT AND THEREFORE THE ADDITIONS MADE ON SUCH BASIS CANNOT STAND THE TEST OF LAW AND NEEDS TO BE DELETED ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN NOT AFFORDING AN OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE APPELLANT, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NOS. 1619 TO 1623/BANG/2018 PAGE 18 OF 26 C) THE AUTHORITIES BELOW ERRED IN NOT PROVIDING THE SWORN STATEMENT RECORDED FROM THE MANAGING DIRECTOR WHICH WAS USED AGAINST THE APPELLANT AND THUS THE ORDERS PASSED ARE VIOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY THE ORDERS NEED TO BE SET ASIDE IN THE INTEREST OF EQUITY AND JUSTICE. 10) THE LEARNED CIT(A) ERRED IN: A) CONFIRMING THE ADDITIONS OF RS.11,76,380/- BEING 449 GRAMS OF GOLD AS UNEXPLAINED INVESTMENTS UNDER THE FACTS OF THE CASE. B) CONFIRMING THE ADDITIONS OF RS. 66,22,780/- BY TREATING THE PURCHASES OF 2,154.490 GRAMS MADE FROM M/S. SPARKLE JEWELLERY AS BOGUS PURCHASES UNDER THE FACTS OF THE CASE. C) CONFIRMING THE ADDITIONS OF RS. 23,03,100/- BY TREATING THE PERSONAL. SILVER ARTICLES OF THE DIRECTORS OF THE APPELLANT COMPANY AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE APPELLANT UNDER THE FACTS OF THE CASE. D) CONFIRMING THE SAID ADDITIONS WITHOUT GIVING ANY SPECIFIC FINDING WITH RESPECT TO THE SUBMISSIONS MADE BY THE APPELLANT AND THEREFORE THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND NEEDS TO BE SET ASIDE ON THE FACTS OF THE CASE. 11. A) WITHOUT PREJUDICE, THE AMOUNTS ADDED ARE WRONG AND REQUIRES TO BE MADE AS NIL ON THE FACTS OF THE CASE. B) WITHOUT PREJUDICE, THE ADDITIONS MADE ARE HIGHLY EXCESSIVE AND NEEDS TO BE SUBSTANTIALLY REDUCED ON THE FACTS OF THE CASE. 12. A) THE AUTHORITIES BELOW ERRED IN TREATING THE CASH SEIZED OF RS.34,00,000/- AS UNEXPLAINED MONEY ON THE FACTS OF THE CASE. B) THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT THE CASH SEIZED WAS OUT OF THE CASH AVAILABLE AS PER THE BOOKS OF ACCOUNT AND THUS THE ADDITION MADE IS UNWARRANTED UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 13) THE COPY OF THE APPROVAL OF THE JOINT COMMISSIONER WAS NOT OBTAINED OR HAVING OBTAINED, THE COPY OF THE SAME IS NOT PROVIDED TO THE APPELLANT WHICH IS IN VIOLATION OF THE SETTLED PRINCIPLES OF ITA NOS. 1619 TO 1623/BANG/2018 PAGE 19 OF 26 NATURAL JUSTICE AND THUS THE ORDER OF ASSESSMENT NEEDS TO BE SET ASIDE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 14) THE LEARNED CIT(A) PASSED THE ORDER WITHOUT CONSIDERING THE CRITICAL AND IMPORTANT SUBMISSIONS MADE BY THE APPELLANT WHICH IS OPPOSED TO THE PRINCIPLES OF NATURAL JUSTICE. 15) THE ORDER OF THE ASSESSMENT IS BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153A OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN 2. IN COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT IN THE FACTS OF THE PRESENT CASE, THE ENTIRE ISSUE SHOULD BE RESTORED BACK TO THE FILE OF AO FOR A FRESH DECISION. HE SUBMITTED THAT AS PER GROUND NO.5 RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2007-08, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT THE LOWER AUTHORITIES HAD FAILED TO TAKE COGNIZANCE OF THE VARIOUS DOCUMENTS/DETAILS/INFORMATION SUBMITTED BY THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO. HE ALSO SUBMITTED THAT AS PER GROUND NO.9 RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2007-08, THIS IS THE GRIEVANCE OF THE ASSESSEE THAT COPY OF INVESTIGATION REPORTS OF KOLKATA AND BENGALURU INVESTIGATION UNITS WERE NOT PROVIDED TO THE ASSESSEE ALTHOUGH THE SAME WERE USED AGAINST THE ASSESSEE. THIS IS ALSO THE GRIEVANCE OF THE ASSESSEE THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN NOT AFFORDING OPPORTUNITY TO CROSS-EXAMINE THE THIRD PARTIES WHOSE STATEMENTS WERE USED AGAINST THE ASSESSEE. HE POINTED OUT THAT AS PER GROUND NO.9C RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2007-08, THIS IS ALSO A GRIEVANCE OF THE ASSESSEE ITA NOS. 1619 TO 1623/BANG/2018 PAGE 20 OF 26 THAT THE AUTHORITIES BELOW HAVE ERRED IN NOT PROVIDING THE COPY OF SWORN STATEMENT RECORDED FROM THE MD OF THE ASSESSEE COMPANY ALTHOUGH IT WAS USED AGAINST THE ASSESSEE. IN THE COURSE OF HEARING, HE ALSO SUBMITTED THAT BY 08.09.2020, HE WILL SUBMIT A BRIEF SYNOPSIS IN WHICH HE WILL POINT OUT THE RELEVANT PAGE NOS. OF THE PAPER BOOK AS PER WHICH THIS CLAIM OF THE ASSESSEE CAN BE EXAMINED THAT RELEVANT DOCUMENTS WERE ALTHOUGH SUBMITTED BY THE ASSESSEE BEFORE THE AO BUT THE SAME WERE NOT EXAMINED BY THE AO PROPERLY AND THIS CLAIM OF THE ASSESSEE CAN ALSO BE EXAMINED THAT COPY OF INVESTIGATION REPORTS WERE NOT PROVIDED TO THE ASSESSEE ETC. HE SUBMITTED THAT SIMILAR GROUNDS ARE THERE IN ALL THE YEARS WHICH ARE BEFORE THE TRIBUNAL I.E., ASSESSMENT YEAR 2007-08 AND ASSESSMENT YEARS 2010-11 TO 2013-14 ALTHOUGH THE GROUND NO. MAY DEFER. HE ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2013-14, THERE ARE CERTAIN OTHER GROUNDS SUCH AS ADDITION MADE BY THE AO OF RS.11,76,380/- BEING 449 GRAMS OF GOLD ADDED BY THE AO BY ALLEGING THAT THE SAME IS UNEXPLAINED INVESTMENT OF THE ASSESSEE AND THE ADDITION OF RS.66,22,780/- MADE BY THE AO BY TREATING THE PURCHASES OF 2154.490 GRAMS OF GOLD MADE FROM M/S. SPARKLE JEWELLERY AS BOGUS PURCHASES AND SIMILARLY THE ASSESSEE IS ALSO OBJECTING TO THE ADDITION OF RS.23,03,100/- MADE BY THE AO BY TREATING THE PERSONAL SILVER ARTICLES OF THE DIRECTOR OF THE ASSESSEE COMPANY AS UNEXPLAINED INVESTMENT OF THE ASSESSEE COMPANY AND THE ASSESSEE ITA NOS. 1619 TO 1623/BANG/2018 PAGE 21 OF 26 IS ALSO OBJECTING TO THE ADDITION MADE BY THE AO OF RS.34 LAKHS WHICH ADDITION IS MADE BY THE AO BY ALLEGING THAT THE CASH SEIZED AT THE TIME OF SEARCH IS UNEXPLAINED MONEY OF THE ASSESSEE COMPANY. IT WAS HIS SUBMISSION THAT SINCE, THE MAJOR ISSUE INVOLVED IN ALL THE YEARS HAS TO BE RESTORED BACK TO THE FILE OF THE AO, THESE SMALL ISSUES IN ASSESSMENT YEAR 2013-14 MAY ALSO BE RESTORED BACK TO THE FILE OF THE AO FOR A FRESH DECISION BECAUSE ON THESE ISSUES ALSO, THE ORDERS OF AUTHORITIES BELOW ARE WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO WITHOUT PROPERLY CONSIDERING THE EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. AS AGAINST THIS, LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF CIT(A) BUT HE HAD NO SERIOUS OBJECTION REGARDING THIS REQUEST OF THE LEARNED AR OF THE ASSESSEE THAT THE ENTIRE MATTER IN ALL THESE FIVE APPEALS SHOULD BE RESTORED BACK TO THE FILE OF AO FOR A FRESH DECISION. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE THE BRIEF SYNOPSIS FILED BY LEARNED AR OF THE ASSESSEE AFTER COMPLETION OF THE HEARING. THE SAME IS AS UNDER: ITA NOS. 1619 TO 1623/BANG/2018 PAGE 22 OF 26 ITA NOS. 1619 TO 1623/BANG/2018 PAGE 23 OF 26 ITA NOS. 1619 TO 1623/BANG/2018 PAGE 24 OF 26 4. WE HAVE NOTED THE CONTENTIONS RAISED BY THE LEARNED AR OF THE ASSESSES IN THE BRIEF SYNOPSIS AS REPRODUCED ABOVE IN ADDITION TO THE ORAL ARGUMENTS ADVANCED BY BOTH SIDES. WE FIND THAT ON PAGE NO.324 OF THE PAPER BOOK BEING PART OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE AO ON 26.02.2015, IT HAS BEEN SUBMITTED BY THE ASSESSEE BEFORE THE AO IN PARA 16 THAT ALTHOUGH IT WAS STATED IN THE LETTER GIVEN BY THE AO TO THE ASSESSEE THAT COPY OF ENQUIRY REPORT WAS ENCLOSED BUT NO SUCH DOCUMENT HAS BEEN ENCLOSED ALONG WITH THAT LETTER AND THE ASSESSEE HAS NOT RECEIVED THE SAME. WE ALSO FIND THAT ON PAGE NO.1253 OF THE PAPER BOOK IS A CERTIFICATE OF REGISTRATION ISSUED BY RESERVE BANK OF INDIA, DEPARTMENT OF NON-BANKING SUPERVISION, REGIONAL OFFICE, KOLKATA TO ONE OF THE INVESTORS M/S. AMIT GOODS & SUPPLIES PVT. LTD. AND ON PAGE NO.1311 OF THE PAPER BOOK IS A CERTIFICATE OF REGISTRATION ISSUED BY RESERVE BANK OF INDIA, DEPARTMENT OF NON-BANKING SUPERVISION, REGIONAL OFFICE, KOLKATA TO ANOTHER INVESTOR M/S. APSARA FINTRADE PVT. LTD. AND SIMILARLY, ON PAGE 1362 OF THE PAPER BOOK IS SIMILAR CERTIFICATE OF REGISTRATION ISSUED BY RESERVE BANK OF INDIA, DEPARTMENT OF NON-BANKING SUPERVISION, REGIONAL OFFICE, KOLKATA ISSUED TO M/S. CUBE TRAFIN PVT. LTD., ANOTHER INVESTOR. SIMILAR CERTIFICATE ISSUED BY RESERVE BANK OF INDIA IS AVAILABLE ON VARIOUS PAGES OF PAPER BOOK I.E. ISSUED TO M/S. DABRIWAL INVESTMENT AND FINANCE PVT. LTD. ON PAGE NO. 1415, ISSUED TO M/S. IRIS COMMERCIAL PVT. LTD. ON PAGE NO. 1456, ISSUED TO M/S. JAISHREE RAM VYAPAR PVT. LTD. ON PAGE NO. 1503, ISSUED TO M/S. LYTON CONSULTANCY PVT. LTD. ON PAGE NO.1598, ISSUED TO M/S. MACRO LEAFIN PVT. LTD. ON PAGE NO. 1649, ISSUED TO M/S. MIDPOINT MARKETING PVT. LTD. ON PAGE NO.1705 AND ISSUED TO M/S. STUPENDORS TRADERS PVT. LTD. ON PAGE 1768. WE ALSO FIND THAT CONFIRMATION OF AT LEAST 4 INVESTORS IS AVAILABLE IN THE PAPER BOOK BEING OF M/S. ALPHA SALES PVT. LTD. ON PAGE 787, M/S. JEEVANDARSHI MARKETING ON PAGE NOS.789 TO 790, OF M/S. SHIVANAND VANIJYA ON PAGE 326 AND OF M/S. MOTCAB FINANCE ON PAGE NO.328. BANK STATEMENTS OF AT LEAST 9 INVESTORS ARE ALSO AVAILABLE IN PAPER BOOK OF M/S. ALPHA SALES PVT. LTD. ON PAGE 788, OF AMIT GOODS & SUPPLIERS PVT LTD. ON PAGE NO.336, OF ANMOL COMMERCE PVT LTD. ON PAGE NO.796, OF APSARA FINTRADE PVT LTD, ON PAGE NO.334, OF CUBE TRAFIN PVT LTD. ON PAGE NO.338, OF DABRIWAL INVESTMENT & FINANCE PVT. LTD. ON PAGE NO.342, OF IRIS COMMERCIALS PVT LTD, ON PAGE NO.340, OF JALSAGAR DEALERS PVT LTD. ON PAGE NO.332 AND OF LYTON CONSULTANCY PVT. LTD. ON PAGE NO.346. IT IS ALSO SEEN ITA NOS. 1619 TO 1623/BANG/2018 PAGE 25 OF 26 THAT DETAILS REGARDING PURCHASE FROM M/S. SPARKLE JEWELLERS IS ALSO AVAILABLE IN PAPER BOOK AND SIMILARLY SOME EXPLANATION SUBMITTED BY THE ASSESSEE REGARDING CASH SEIZED AT THE TIME OF SEARCH IS ALSO AVAILABLE IN THE PAPER BOOK AS PER PAGE NUMBERS GIVEN BY THE LEARNED AR OF THE ASSESSEE IN THE BRIEF SYNOPSIS REPRODUCED ABOVE. UNDER THESE FACTS, WE ARE SATISFIED THAT THE MATTER SHOULD GO BACK TO THE FILE OF AO FOR A FRESH DECISION ON ALL THE ISSUES BECAUSE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO WITHOUT PROPERLY CONSIDERING THE DETAILS BROUGHT ON RECORD BY THE ASSESSEE. ON PAGES 6 AND 7 OF THE ASSESSMENT ORDER FOR A. Y. 2007 08, THE AO HAS NOTED THAT THE ASSESSEE HAS FURNISHED SEVERAL PAPERS RUNNING INTO THOUSANDS OF PAGES INCLUDING PAN OF INVESTORS, COPY OF SHARE APPLICATION FORMS AND LEDGER ACCOUNTS OF THE SHARE APPLICANTS BUT THE AO BRUSHED ASIDE ALL THESE DOCUMENTS BY SAYING THAT CONFIRMATION LETTERS AND SOURCE OF THE SHARE APPLICATION MONEY WAS NOT SUBMITTED ALTHOUGH BEFORE US, IT IS ESTABLISHED BY THE ASSESSEE BY FILING VARIOUS DOCUMENTS IN THE PAPER BOOK THAT CONFIRMATION OF SOME INVESTORS, BANK STATEMENTS OF SOME INVESTORS, NBFC CERTIFICATE OF SOME INVESTORS ISSUED BY RBI ETC. WERE VERY MUCH SUBMITTED BEFORE THE AO AND THERE IS NO FINDING OF THE AO AS TO HOW THE SAME ARE NOT RELEVANT FOR EXAMINING AND DECIDING THE IDENTITY AND CREDIT WORTHINESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTION. IN OUR CONSIDERED OPINION, INSTEAD OF BRUSHING ASIDE ALL DOCUMENTS WITHOUT ANY DISCUSSION, THE AO SHOULD HAVE DISCUSSED ABOUT THE ISSUE AND THE DOCUMENTS BROUGHT ON RECORD BY THE ASSESSEE AS TO HOW THE SAME FAILS TO ESTABLISH THE IDENTITY AND CREDIT WORTHINESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTION. BUT THE AO HAS NOT DONE SO AND THEREFORE, IT IS NOT POSSIBLE FOR US TO EXAMINE THE CORRECTNESS OR OTHERWISE OF THE CONCLUSION DRAWN BY THE AO IN A SUMMARY MANNER. IT IS ALSO SEEN THAT COPY OF INVESTIGATION WING REPORT WAS ALSO NOT PROVIDED TO THE ASSESSEE TO ENABLE THE ASSESSEE TO FILE REPLY. HENCE, WE DO NOT DECIDE ANY OF THE ISSUES ON MERIT AND RESTORE THE ENTIRE MATTER (TECHNICAL ISSUE OR ISSUE ON MERIT) INVOLVED IN THESE FIVE APPEALS BACK TO THE FILE OF AO FOR A FRESH DECISION BY WAY OF A SPEAKING AND REASONED ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE AO TO PROVIDE COPY OF INVESTIGATION WING REPORTS AND STATEMENTS OF MD OF THE ASSESSEE OR ANY OTHER PERSON WHICH IS BEING USED BY THE AO AGAINST THE ASSESSEE BECAUSE WITHOUT GETTING THE COPY OF THE SAME, THE ASSESSEE CANNOT FILE PROPER REPLY. WE ALSO DIRECT THE AO TO ITA NOS. 1619 TO 1623/BANG/2018 PAGE 26 OF 26 PROVIDE TO THE ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE A PERSON WHOSE STATEMENT IS BEING USED BY THE AO AGAINST THE ASSESSEE AND THE ASSESSEE WANTS TO CROSS EXAMINE HIM. IN VIEW OF THIS DISCUSSION, WE DO NOT MAKE ANY COMMENT ON ANY OF THE ISSUES ON MERIT OR TECHNICAL ISSUE INVOLVED IN THESE FIVE APPEALS AND WE HOLD THAT ALL THE ISSUES ARE OPEN BEFORE THE AO WHICH HE SHOULD DECIDE AS PER LAW IN LINE WITH ABOVE DISCUSSION BY WAY OF A SPEAKING AND REASONED ORDER AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, ALL THE FIVE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- SD/- (BEENA PILLAI) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED: 11 TH SEPTEMBER, 2020. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.