Kishor B. Mutha, V. DeputyCommisioner of Income-tax,

ITA 1794/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1020 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-07-2015
• Assessment Year: misc
• Appeal Filed On: 03-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Document seized; Principle of natural justice; Peak credit; Source of fund; Question of law; Corroborative evidences; Block assessment; Documents seized
• Section: 69C; 68; 148

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.1794/PN/2013 BLOCK PERIOD : 1996-97 TO 2002-03 KISHOR B. MUTHA, 30, NEW TIMBER MARKET, PUNE 411 042. PAN : ABNPM7538D . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 5, PUNE. . RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI B. C. MALAKAR / DATE OF HEARING : 06.10.2015 / DATE OF PRONOUNCEMENT: 14.10.2015 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE IS AGAINST THE ORDER OF CIT(A)-III, PUNE DATED 18.07.2013 RELATING TO BLOCK PERIOD 1996-97 TO 2002-03 PASSED UNDER SECTION 158BD R.W.S. 158BC OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REPRODUCED AS UNDER :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LOWER AUTHORITIES ERRED IN ADDING A SUM OF RS.16,00,000/- RECEIVED AS LOAN FROM M/S MAHESHWARI FINANCERS & M/S RAJASHREE ENTERPRISE S, AS UN-EXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. YOU R APPELLANT MOST HUMBLY SUBMITS THAT THE SAID LOAN HAS BEEN DULY EXPLAINED BY SUPPORTING EVIDENCE AND HENCE THE SAID ADDITION IS BAD IN LAW AND REQUI RES TO BE DELETED IN FULL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LOWER AUTHORITIES ERRED IN MAKING AN ADDITION ON ACCOUNT OF UN-EXPLAINED EXPENDITURE IN THE NATURE OF INTEREST PAID ON THE A BOVE LOAN U/S 69C IS ALSO 2 ITA NO.1794/PN/2013 BAD IN LAW, AS THE SAME IS AN EXPENDITURE INCURRED IN THE NORMAL COURSE OF BUSINESS OUT OF EXPLAINED SOURCES OF INCOME AND THE REFORE, THE SAID ADDITION MAY PLEASE BE DELETED IN FULL. THE APPELLANT CRAVES FOR TO LEAVE, ADD, ALTER, MODI FY, DELETE, ALTER ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME HEARING, IN THE INTERE ST OF NATURAL JUSTICE. 3. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE, AT THE OUTSET, POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT AP PEAL IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN SHRI VIJAYKUMAR DEVICH AND NIBJIYA VS. DCIT IN ITA NO.1745/PN/2013 RELATING TO BLOCK PERIOD 1996-9 7 TO 2002-03; ORDER DATED 22.07.2015, WHEREIN SIMILAR ISSUE OF ADDITION MADE ON ACCOUNT OF SEARCH IN THE CASE OF M/S MAHESHWARI FINANCIERS, PROPRIETO R OF SHRI MAHENDRA SHAH AND M/S RAJASHREE ENTERPRISES, PROPRIETOR OF SHRI R AMANLAL SHAH AROSE FOR CONSIDERATION. IN THE IMPUGNED CASE BEFORE THE PUN E BENCH OF THE TRIBUNAL IN WHICH THE ASSESSEE THEREIN SHRI VIJAYKUMAR DEVICHAN D NIBJIYA HAD ALSO TAKEN LOAN FROM THE SAME LENDERS, NAMELY, M/S MAHESHWARI FINANCIERS AND M/S RAJASHREE ENTERPRISES. THE ISSUE WAS DECIDED IN FA VOUR OF THE ASSESSEE ON THE SIMILAR FACTS IN THAT CASE. THE LD. AUTHORIZED REP RESENTATIVE FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RAJSHREE HOTELIERS IN INCOME TAX APPEAL NO. 246 OF 2011, ORDER DATED 29.01.2013 FOR THE PROPOSITION THAT IF THE PERSON H AD MAINTAINED REGULAR BOOKS OF ACCOUNTS AND DULY ENTERED THE LOAN ENTRIES IN RE GULAR MANNER WHICH WAS FOUND AVAILABLE AT THE TIME OF SEARCH THEN SUCH AN INCOME OR ENTRIES CANNOT BE SAID TO BE DETECTED OR UNEARTHED CONSEQUENT UPON TH E SEARCH AND CONSEQUENTLY WOULD BE OUT OF THE AMBIT OF DEFINITION OF UNDISCL OSED INCOME AS CONTAINED UNDER SECTION 158B OF THE ACT. IN THE PRESENT CASE ALSO, IT IS EXPLICIT THAT THE REGULAR BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AND L OAN ENTRIES DULY RECORDED IN THE BOOKS ARE SUBJECT-MATTER OF SECTION 158BD OF THE ACT WHICH IS NOT PERMISSIBLE IN LAW IN VIEW OF THE DECISION OF THE H ONBLE BOMBAY HIGH COURT. FOR THIS PROPOSITION, THE LD. AUTHORIZED REPRESENTA TIVE FOR THE ASSESSEE RELIED UPON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI MANRUPLAL M. SANGHVI AND ANOTHER VS. CIT IN ITA NO.385/PN/200 6 AND ANOTHER, ORDER DATED 29.05.2009. 3 ITA NO.1794/PN/2013 4. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE PLACED RELIANCE ON THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION T O ADDITION OF RS.16,00,000/- RECEIVED TOWARDS AGGREGATE LOAN AMOUNT TAKEN FROM M /S MAHESHWARI FINANCIERS AND M/S RAJASHREE ENTERPRISES AS UNEXPLA INED CASH CREDIT UNDER SECTION 68 OF THE ACT AND ADDITION TOWARDS INTEREST PAID THEREON AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. THE BASI S FOR THE SAID ADDITION WAS THE STATEMENT RECORDED OF ACCOUNTANT OF M/S MAHESHW ARI FINANCIERS AND M/S RAJASHREE ENTERPRISES WITHOUT MAKING ANY INDEPENDEN T ENQUIRY. THE CASE OF THE ASSESSEE WAS THAT IT HAD NOT MADE ANY CASH PAYM ENT AGAINST LOAN RECEIVED AND ALSO QUESTIONED THE ACTION OF THE ASSESSING OFF ICER ON THE GROUND THAT COPIES OF SEIZED DOCUMENTS AND STATEMENTS WERE NOT PROVIDED. AN OPPORTUNITY TO CROSS-EXAMINE THE LENDERS/DEPONENT OF THE STATEM ENT WAS ALSO NOT PROVIDED INSPITE OF THE SPECIFIC REQUEST. IT IS THE CASE OF THE ASSESSEE THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER IS NOT BASED ON ANY D IRECT INCRIMINATING EVIDENCE TO ESTABLISH THE TRANSACTIONS SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WERE NOT GENUINE AND THERE IS NO INDEPENDE NT APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER ON THE SATISFACTI ON NOTE SENT BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. WE FIND THAT AN ID ENTICAL ISSUE AROSE BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI VIJA YKUMAR DEVICHAND NIBJIYA (SUPRA) WHEREIN THE TRIBUNAL, ON APPRAISAL OF SIMIL AR FACTS PERTAINING TO THE SAME SEARCHED PERSON AS INVOLVED IN THIS CASE, NAME LY, M/S MAHESHWARI FINANCIERS AND M/S RAJASHREE ENTERPRISES, HELD THAT BOTH ON FACTS AND ON LEGAL GROUNDS, THE ADDITION MADE BY THE ASSESSING OFFICER IN THAT CASE IS NOT SUSTAINABLE IN LAW. THE RELEVANT PARAS NARRATING T HE FACTS AND CONCLUSION THEREON ARE REPRODUCED BELOW FOR READY REFERENCE :- 2. FIRST WE TAKE UP ITA NO.1745/PN/2013 IN THE CAS E OF SHRI VIJAY KUMAR DEVICHAND NIBJIYA AS THE LEAD CASE. FACTS OF THE C ASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS AS A B UILDER. IN RESPONSE TO NOTICE U/S.158BD THE ASSESSEE FILED THE BLOCK RETURN IN FO RM NO.2B ON 10-04-2006 DECLARING NIL UNDISCLOSED INCOME. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, THE AO CALLED FOR THE DETAILS OF TRANSACTIONS MADE BY THE ASSESSEE IN RESPECT OF M/S. 4 ITA NO.1794/PN/2013 MAHESHWARI FINANCIERS, ADONI (ANDHRA PRADESH) AND R AJASHREE ENTERPRISES. THE ASSESSEE IN HIS REPLY STATED THAT THE LOANS AND INT EREST PAYMENT ARE GENUINE AND ARE REFLECTED IN REGULAR BOOKS OF ACCOUNT AND SHOULD NO T BE TREATED AS UNDISCLOSED INCOME U/S.68 AND UNEXPLAINED EXPENDITURE U/S.69. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT A SEARCH AND SEIZURE ACTION U/S.132 OF THE I.T. ACT WAS CARR IED OUT ON 12-10-2001 IN THE CASE OF M/S. RAJASHREE ENTERPRISES, PROPRIETOR SHRI RAMA NLAL SHAH AND M/S. MAHESHWARI FINANCIERS, PROPRIETOR SHRI MAHENDRA SHAH AT ADONI, ANDHRA PRADESH. IT WAS FOUND THAT SHRI RAMANLAL SHAH WAS THE MAIN PERSON W HO HAD GENERATED UNACCOUNTED CASH FROM VARIOUS BUSINESS ACTIVITIES W HICH WAS DEPOSITED IN 1980 BY OPENING MANY BANK ACCOUNTS IN THE NAME OF DIFFERENT HUFS AND KARTAS WHO WERE FAMILY MEMBERS AND CONCERNS. THIS PROCESS OF DEPOS IT OF CASH IN HUF ACCOUNTS CONTINUED TILL 1997-1998. HE ALSO WANTED TO ACCOMM ODATE OTHER PERSONS BY PROVIDING MANY LENDING LIST OF MEMBERS. TO BRING B ACK THE UNACCOUNTED CASH BELONGING TO SHRI RAMANLAL SHAH AS WELL AS OTHER BU SINESSMEN AT PUNE INTO THE REGULAR BOOKS OF ACCOUNTS, SHRI MAHENDRA SHAH AND SHRI RAMANLAL SHAH OPENED 2 FINANCIAL CONCERNS AT ADONI BY OPENING BANK ACCOUNT S AT BANK OF INDIA, BHAVANI PETH, PUNE (ACCOUNT NO.1740 AND 1728). THE MODUS O PERANDI WAS TO DEPOSIT CASH INTO THESE BANK ACCOUNTS AND TO IMMEDIATELY THEREAF TER ISSUE CHEQUES IN FAVOUR OF PUNE BASED BUSINESSMEN AND TO CHARGE INTEREST @18% FROM THESE CONCERNS. WHEN THE MONEY WAS RECEIVED BACK FROM THE BUSINESSMEN AT PUNE BY CHEQUE, THE CASH WAS WITHDRAWN FROM THESE BANK ACCOUNTS. BEFORE THE INC OME-TAX AUTHORITIES SHRI RAMANLAL SHAH HAD CLAIMED THAT THE 2 FINANCIAL CONC ERNS WERE BASED AT ADONI AND SOME OF THE ACTIVITIES WERE CARRIED OUT AT PUNE. T HE CASH WAS WITHDRAWN FROM THE BANK ACCOUNTS OF THE FINANCIAL CONCERNS AT ADONI AN D BROUGHT TO PUNE PHYSICALLY. HOWEVER, ON EXAMINATION OF THE STATEMENTS RECORDED OF THE ACCOUNTANT OF SHRI RAMANLAL SHAH AND HIS OWN STATEMENT AND AFTER FURTH ER ENQUIRIES THE AO OF SHRI RAMANLAL SHAH CAME TO A FINDING THAT THE ENTIRE MOD US OPERANDI WAS OPERATED BY THE PERSONS RECEIVING LOAN ENTRIES FROM THESE FINAN CIAL CONCERNS. THE ASSESSEE WAS ONE OF THE PERSONS WHO ALLEGEDLY RECEIVED THE FICTI TIOUS LOAN AMOUNTS OF RS.22 LAKHS SPREAD OVER 3 ASSESSMENT YEARS. 4. THE AO OBSERVED THAT IN THE CASH BOOK OF M/S. MA HESHWARI FINANCIERS (SEA- 12 SEIZED ON 11-10-2001) IT WAS FOUND THAT THERE AR E TWO FIGURES OF BALANCE OF CASH IN HAND, DRAWN AT THE END OF EACH DATE, FROM PAGE N O.21 DATED 24-05-1999 TO PAGE 142 DATED 30-03-2000. THE FIRST BALANCE WAS DRAWN IN THE REGULAR COURSE. THE SECOND BALANCE OF CASH IN HAND WAS DRAWN AFTER CERT AIN CASH EXPENSES WERE DEBITED AT A LATER DATE IN THE CASH BOOK. DUE TO CERTAIN D ISCREPANCIES THE ACCOUNTANT OF THE FIRM, IN WHOSE HAND WRITING THESE TRANSACTIONS WERE WRITTEN, WAS RECORDED. AS PER THE SAID STATEMENT THE AO OBSERVED THAT THE PERSONS WHO HAVE RECEIVED CHEQUES OF LOAN ENTRIES ARE MAINLY PROMOTERS AND BUILDERS OR P ERSONS INVOLVED IN THE BUSINESS WHERE THERE IS AMPLE SCOPE OF GENERATION OF UNACCOU NTED MONEY LIKE TIMBER, BUILDING MATERIALS, FINANCE COMPANIES ETC. THESE P ERSONS HAVE UNACCOUNTED CASH AVAILABLE WITH THEM. IT IS BROUGHT BACK TO THEIR B OOKS OF ACCOUNTS THROUGH THESE FINANCE CONCERNS. THEREFORE, IT CAN ONLY BE POSSIB LE IF THESE PERSONS ARE EITHER CLOSELY RELATED TO SHAH SANGHVI GROUP OR THERE WERE SOME SORT OF BUSINESS UNDERSTANDING OR PARTNERSHIP WITH SHAH GROUP SO THA T THERE IS NO PROBLEM IN THE RECOVERY OF LOAN OR THE INTEREST AMOUNT. THE TWO F INANCE CONCERNS, I.E. M/S. MAHESHWARI FINANCIES AND M/S. RAJASHREE ENTERPRISES HAVE GIVEN THE LOAN ENTRIES TO PUNE PARTIES AND TO GIVE A COLOUR OF REAL TRANSA CTION, INTEREST WAS CHARGED ON THESE LOANS AND FROM THIS INTEREST RECEIVED INTERES T PAYMENTS WERE SHOWN TO HAVE BEEN MADE TO FAMILY AND FRIENDLY HUFS. RELYING ON THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF SUMATI DAYAL VS. CIT R EPORTED IN 214 ITR 801 AND THE DECISION IN THE CASE OF CIT VS. DURGA PRASAD MORE R EPORTED IN 82 ITR 540 THE AO CAME TO THE CONCLUSION THAT THE LOAN AMOUNT OF RS.2 2 LAKHS GIVEN BY M/S. MAHESHWARI FINANCIERS AND M/S. RAJASHREE ENTERPRISE S TO THE ASSESSEE WAS THE 5 ITA NO.1794/PN/2013 ASSESSEES OWN MONEY WHICH WAS ROUTED THROUGH THE C ONCERNS OF M/S. MAHESHWARI FINANCIERS IN THE GARB OF LOAN. THE AO ACCORDINGLY TREATED THE AMOUNT OF RS.22 LAKHS SHOWN BY THE ASSESSEE AS LOAN RECEIVED FROM M /S. MAHESHWARI FINANCIERS, ADONI AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD BEING UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T. ACT. SIMILARLY, HE ALSO DISALLOWED THE YEAR-WISE INTEREST PAID ON SUCH LOAN TOTALING TO RS.7,03,485/- AS UNEX PLAINED EXPENDITURE U/S.69 OF THE I.T. ACT. THUS, THE AO DETERMINED THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE PERIOD AT RS.29,03,485/-. 5. BEFORE CIT(A) THE ASSESSEE CHALLENGED THE VALIDI TY OF NOTICE ISSUED U/S.158BD ON THE GROUND THAT THE REQUISITE CONDITIO NS FOR SUCH NOTICE WERE NOT SATISFIED. IT WAS ARGUED THAT THE SATISFACTION NOT E RECORDED BY THE AO OF M/S. MAHESHWARI FINANCIERS IS GENERAL IN NATURE MENTIONI NG PUNE BASED CONCERNS/PARTIES WITHOUT SPECIFIC NAMES AND ALLEGIN G THAT LOANS WERE OBTAINED BY THESE PARTIES BY CHEQUE FOR WHICH THEY HAVE PAID CA SH TO M/S. MAHESHWARI FINANCIERS. IT WAS FURTHER ARGUED THAT THE NOTICE ISSUED U/S.158BD IS BAD IN LAW BEING ISSUED BEYOND A REASONABLE TIME OF THE DATE O F COMPLETION OF THE ASSESSMENT OF THE SEARCHED PERSON. WITHOUT PREJUDICE TO THE ABOV E THE ASSESSEE FURTHER ARGUED THAT THE LOAN OF RS.22 LAKHS WAS ACCEPTED BY CROSSE D ACCOUNT PAYEE CHEQUES FROM M/S. MAHESHWARI FINANCIERS AND IS FROM A PERSON DUL Y IDENTIFIED BY THE DEPARTMENT. THE AO OF THE SEARCHED PERSON IN THE SATISFACTION N OTE IN PARA 8 THEREOF HAS CLEARLY ACCEPTED THAT THERE IS NO DIRECT EVIDENCE THAT THE ASSESSEE HAD PAID CASH FOR OBTAINING THIS LOAN FROM M/S. MAHESHWARI FINANCIER. THE ASSESSEE HAS ALSO PAID INTEREST ON THE LOAN TO THE LENDERS FROM TIME TO TI ME BY CROSSED ACCOUNT PAYEE CHEQUES AND HAS ALSO REPAID THE ENTIRE LOAN AMOUNT BY CROSSED ACCOUNT PAYEE CHEQUE. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THAT THE ADDITION MADE U/S.68 AS WELL AS U/S.69C IS UNWARRANTED AND ILLEGAL. 6. IT WAS ALSO STATED THAT THE SATISFACTION U/S.15 8BD OF THE ACT OF THE SEARCHED PERSON IS SUSPECT, NOT IN GOOD FAITH AND UN-CREDITW ORTHY BECAUSE THE SUCCESSOR AO OF THE SEARCHED PERSON, AFTER THE MATTER WAS SET AS IDE BY THE CIT U/S.263, HAS GIVEN A FINDING THAT THE PEAK CREDITS OF THE CASH INTRODUCE D IN THE BANK ACCOUNT MAINTAINED WITH BANK OF INDIA, BHAVANI PETH BRANCH, PUNE FOR E NABLING THE SEARCHED PERSON TO ISSUE CHEQUES FOR THE LOANS GIVEN THROUGH THAT ACCO UNT IS THE UNDISCLOSED INCOME OF THE SEARCHED PERSON. THEREFORE, WHEN THE UNEXPLAIN ED CASH SO INTRODUCED IS THE UNDISCLOSED INCOME OF THE SEARCHED PERSON, I.E. M/S . MAHESHWARI FINANCIERS, THE SAME AMOUNT CANNOT BE ADDED IN THE HANDS OF THE ASS ESSEE AS UNDISCLOSED INCOME. IT WAS ACCORDINGLY ARGUED THAT BOTH FACTUALLY AND LEGA LLY THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION. 7. HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH TH E ARGUMENTS ADVANCED BY THE ASSESSEE. HE CALLED FOR A REMAND REPORT FROM T HE AO. AFTER CONSIDERING THE REMAND REPORT OF THE AO AND SUBMISSION OF THE ASSES SEE TO SUCH REMAND REPORT THE LD.CIT(A) UPHELD THE ADDITION MADE BY THE AO. WHIL E DOING SO, SHE OBSERVED ON PERUSAL OF THE SATISFACTION NOTE OF THE AO OF M/S. MAHESHWARI FINANCIERS, WHICH WAS ENCLOSED BY WAY OF A COVERING LETTER, THAT THE SAME CLEARLY SHOWS THAT LOAN TRANSACTIONS AMOUNTING TO RS.22 LAKHS WERE SHOWN IN THE BOOKS OF ACCOUNT OF M/S. MAHESHWARI FINANCIERS AGAINST WHOM SEARCH AND SEIZU RE WAS CONDUCTED ON 12-02- 2001. THE COVERING LETTER IS ACCOMPANIED BY A SATI SFACTION NOTE INTO 10 PAGES WHICH DETAILS THE BOOKS OF ACCOUNTS, DOCUMENTS, BANK PASS BOOKS ETC., THAT WERE SEIZED AND VERIFIED DURING THE COURSE OF SEARCH AND THE ENQUIR IES THAT WERE CONDUCTED POST SEARCH. THEREFORE, THE SATISFACTION OF THE AO WHO HAS JURISDICTION OVER THE SEARCHED PERSON IS FOUND TO BE CLEARLY RECORDED THAT THE UND ISCLOSED INCOME FOUND IN THE BOOKS BELONGING TO THE ASSESSEE. THE EXTRACT OF TH E BOOKS OF ACCOUNT INCLUDING THE LOAN AMOUNTS AND INTEREST THEREON HAVE BEEN DULY RE PRODUCED IN THE SATISFACTION NOTE AND THEREFORE THE REQUIREMENT OF SECTION 158BD THAT THE BOOKS OF ACCOUNTS, OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED T HEREOF TO BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSONS HAS BEEN MADE. THE ASSESSEE HAS 6 ITA NO.1794/PN/2013 ALREADY BEEN PROVIDED A COPY OF SATISFACTION NOTE W HICH CONTAINS THE DETAILED WORKING OF THE LOAN ENTRIES AND THE INTEREST THEREO N AS FOUND IN THE BOOKS OF M/S. MAHESHWARI FINANCIERS. THEREFORE, THE ARGUMENT OF THE ASSESSEE THAT NO DOCUMENTS, PAPERS AND OTHER EVIDENCE HAVE BEEN ACTUALLY HANDED OVER TO HIS AO BY THE AO OF THE SEARCHED PERSON IS A FRIVOLOUS GROUND. 8. AS REGARDS THE ARGUMENT OF THE ASSESSEE THAT THE NOTICE ISSUED U/S.158BD IS BAD IN LAW BEING ISSUED BEYOND A REASONABLE TIME FR OM THE DATE OF COMPLETION OF THE ASSESSMENT OF THE SEARCHED PERSON IS CONCERNED, THE LD.CIT(A) FOLLOWING VARIOUS DECISIONS HELD THAT THERE IS NO UNREASONABLE DELAY IN NOTICE ISSUED U/S.158BD. THE DELAY OF 18-19 MONTHS IN ISSUANCE OF NOTICE U/S.158 BD FROM THE DATE OF SATISFACTION RECORDED BY THE AO OF THE SEARCHED PERSON CANNOT BE HELD TO BE UNREASONABLE PARTICULARLY WHEN THE SECTION DOES NOT PROVIDE ANY TIME LIMIT FOR ISSUANCE OF SUCH NOTICE. 9. SO FAR AS THE ARGUMENT OF THE ASSESSEE ON MERIT IS CONCERNED SHE ALSO DISMISSED THE SAME ON THE GROUND THAT THE LOAN AMOU NT THOUGH ADVANCED BY WAY OF CHEQUE BY M/S. MAHESHWARI FINANCIERS HAS ITS ORIGIN IN THE CASH AND SINCE THE CASH HAS BEEN PROVED BY THE AO OF THE SEARCHED PERSON AS NOT BELONGING TO HIM CAN BE CERTAINLY INFERRED TO BE BELONGING TO THE ASSESSEE. SHE ACCORDINGLY HELD THAT THE AO IS CORRECT IN LAW IN ASSESSING THE LOAN OF AMOUNT O F RS.22 LAKHS U/S.68 AND THE INTEREST THEREON AS UNEXPLAINED EXPENDITURE U/S.69C IN ABSENCE OF ANY EVIDENCE PRODUCED BY THE ASSESSEE THAT THE CASH DOES NOT BEL ONG TO HIM. SHE ACCORDINGLY UPHELD THE ACTION OF THE AO. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASS ESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT FRAMED BY A.O. U/S 158BD OF THE ACT AND CONFIRMED BY CIT (A) MAY BE HELD AS BAD IN LAW, INVALID , AND MAYBE QUASHED AS NULLITY. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IT M AY BE HELD THAT THE A.O. HAS ASSUMED JURISDICTION U/S.158BD WITHOUT FOL LOWING DUE PROCESS OF LAW, BEYOND REASONABLE TIME AND VIOLATING PRINCIPLE S OF NATURAL JUSTICE AND THEREFORE BAD IN LAW AND BE CANCELLED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IT M AY BE HELD THAT A.O. AND CIT(A) HAVE FAILED TO FOLLOW THE BINDING JUDICI AL PRECEDENTS AND THE REMARKS MAY BE QUASHED. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS ON THE FA CTS AND CIRCUMSTANCES OF THE CASE, THE A.O. ERRED IN BRINGI NG TO TAX AMOUNTS TOTALING RS. 29,03,485 U/S.68, 69C OF THE ACT AND CIT(A) CON FIRMED WITHOUT APPRECIATING EVIDENCE ON RECORD, LEGAL POSITION AND EXPLANATION FURNISHED BEFORE HIM AND SAME MAY BE DELETED , CANCELLED OR A PPROPRIATE RELIEF GRANTED TO THE ASSESSEE. 5. THE APPELLANT CRAVES LEAVE TO ADD/AMEND /ALTER/M ODIFY OR RAISE ADDITIONAL GROUNDS OF APPEAL AND TO PROVIDE ADDITIO NAL EVIDENCE IF FOUND NECESSARY, AT THE TIME OF HEARING. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SEARCH IN THE CASE OF M/S. MAHESHWARI FINANCIERS AND M/S. RAJASHREE ENTERPRISE S TOOK PLACE ON 11-10-2001 AND THE BLOCK ASSESSMENTS IN THESE CASES WERE COMPL ETED ON 24-12-2003 BY MAKING CERTAIN ADDITIONS IN THE HANDS OF THE SEARCHED PERS ON. SUBSEQUENTLY, THE LD.CIT SET ASIDE THE ORDERS U/S.263 ON 23-03-2006. SUBSEQUENT TO THE ORDER PASSED U/S.263 THE AO COMPLETED THE ASSESSMENT OF THE SEARCHED PERSONS ON 29-12-2006 BY MAKING ADDITION U/S.69A AMOUNTING TO RS.1,63,77,713/- AS M ONEY LENT TO THIRD PARTIES. HE SUBMITTED THAT THE ASSESSEE IN THE INSTANT CASE REC EIVED NOTICE U/S.158BD ON 10-02- 2006 ON THE BASIS OF A LETTER DATED 06-04-2004 WITH SATISFACTION NOTE WHICH WAS 7 ITA NO.1794/PN/2013 UNDATED. THE ASSESSEE FILED THE BLOCK RETURNS ON 1 0-04-2006 AND THE ASSESSMENT WAS COMPLETED ON 28-02-2008. HE SUBMITTED THAT THERE I S NO QUESTION OF ASSESSING THE ASSESSEE WHEN THE 263 ORDER WAS IN FORCE IN CASE OF THE SEARCHED PERSON. THE SATISFACTION NOTE WAS RECEIVED BY THE ASSESSEE ON 0 7-12-2007 ALONG WITH THE SHOW CAUSE NOTICE. HE SUBMITTED THAT THE SATISFACTION N OTE IS UNDATED AND IS MUCH LATE AFTER ORIGINAL ASSESSMENT ON 24-12-2003. THUS, THE RE IS A GAP OF ABOUT 4 YEARS. HE SUBMITTED THAT TILL TODAY NO DETAILS OF MATERIALS T RANSFERRED IS SHOWN AND IT IS ADMITTED THAT THERE IS NO SEIZED MATERIAL WHICH ARE INCRIMINATING AND DISCLOSE UNDISCLOSED INCOME. REFERRING TO THE DECISION OF T HE BANGALORE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF Y. SUBBARAJU & CO. VS. ACIT REPORTED IN 91 ITD 118 AND THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MA NISH MAHESHWARI VS. ACIT REPORTED IN 289 ITR 341 HE SUBMITTED THAT THE PRIMA RY REQUIREMENT FOR ACTION U/S.158BD IS NOT FULFILLED. THE OBSERVATION OF THE CIT(A) IN PARA 4.2 ARE CONTRARY TO LEGAL REQUIREMENTS IN VIEW OF THE ABOVE 2 DECISIONS . REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. CALCUT TA KNITWEARS REPORTED IN 362 ITR 673 HE SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD THAT THOUGH THERE IS NO TIME LIMIT FOR RECORDING SATISFACTION NOTE, HOWE VER, IT CAN BE DONE TILL SEIZED MATERIALS ARE HANDED OVER AND HAVE NOT DISPENSED WI TH REQUIREMENT OF EXISTENCE OF INCRIMINATING SEIZED MATERIAL AND THEIR HANDING OVE R TO THE CONCERNED AO HAVING JURISDICTION. HE ACCORDINGLY SUBMITTED THAT THE NO TICE ISSUED U/S.158BD IS BAD IN LAW BECAUSE (A) THERE IS NO INCRIMINATING SEIZED MA TERIAL RELATING TO ASSESSEES UNDISCLOSED INCOME, (B) NO MATERIAL HAS BEEN HANDED OVER TO THE AO AND CONSEQUENTLY TO ASSESSEE TILL DATE, (C) THE ISSUE O F NOTICE U/S.158BD WITHOUT SEIZED MATERIAL IS BAD IN LAW AND CANNOT BE DONE ON BASIS OF PRESUMPTIONS AND ASSUMPTIONS AS IT IS SPECIAL PROVISION FOR ASSESSMENT OF CERTAI N TYPES OF CASES AND (D) STATEMENTS RECORDED ARE NO MATERIAL FOR PURPOSE OF 158BD. 12. SO FAR AS THE MERIT OF THE CASE IS CONCERNED HE SUBMITTED THAT THERE IS NO EVIDENCE OF DEPOSIT OF CASH BY THE ASSESSEE IN BANK ACCOUNT OF M/S. MAHESHWARI FINANCIERS. THE ENTRIES WERE RECORDED IN THE BOOKS OF M/S. MAHESHWARI FINANCIERS BEFORE THE SEARCH TOOK PLACE. THE ASSESSEE HAS DIS CHARGED THE ONUS AND THERE IS NO MATERIAL BEFORE THE REVENUE THAT ASSESSEE HAS DEPOS ITED CASH IN THE BANK ACCOUNT OF M/S. MAHESHWARI FINANCIERS. THEREFORE, THE APPLICA TION OF PROVISIONS OF SECTION 68 ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 13. HE ALSO RELIED ON THE FOLLOWING CASES: 1. MANISH MAHESWARI VS. ACIT & ANOTHER REPORTED IN 289 ITR 341 (SC) 2. CIT VS. ALKA BHANDARI REPORTED IN (2015) 92 CCH 0027 (DEL.) 3. CIT VS. LATE RAJPAL BHATIA REPORTED IN 333 ITR 3 15 4. CIT VS. UTTAMCHAND JAIN REPORTED IN 320 ITR 554 5. CIT VS. MANOJ BANSAL REPORTED IN (2015) 92 CCH 0 005 (DEL.) 6. NIVEDITA M. MAKWANA VS. P.M. SHUKLA REPORTED IN (2008) 11 DTR (GUJ.) 225 7. CIT VS. BHARAT BHUSHAN JAIN REPORTED IN (2015) 9 2 CCH 0004 (DEL.) 14. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE A SEARCH AND SEIZURE ACTIO N TOOK PLACE IN THE CASE OF M/S. RAJASHREE ENTERPRISES, PROPRIETOR SHRI RAMANLAL SHA H AND M/S. MAHESHWARI FINANCIERS, PROPRIETOR SHRI MAHENDRA SHAH ON 12-10- 2001. THE BLOCK ASSESSMENTS 8 ITA NO.1794/PN/2013 IN THE CASE OF THE ABOVE SEARCHED PERSONS WERE COMP LETED ON 24-12-2003. THE SATISFACTION U/S.158BD HAS BEEN RECORDED BY THE AO OF THE SEARCHED PERSON ON 06- 04-2004 AND THE NOTICES HAS BEEN ISSUED TO THE ASSE SSEE U/S.158BD ON 10-02-2006, I.E. AFTER A GAP OF OVER 23 MONTHS WITH REFERENCE T O THE DATE OF RECORDING OF SATISFACTION. FURTHER, THE LOAN OF RS.22 LAKHS TAK EN BY THE ASSESSEE FROM THE SEARCHED PERSON HAS BEEN RECORDED IN THE BOOKS OF A CCOUNT OF THE SEARCHED PERSONS PRIOR TO THE DATE OF SEARCH. NO OTHER INCRIMINATIN G MATERIAL WAS FOUND EXCEPT THE SAID ENTRIES IN THE BOOKS OF ACCOUNT PRIOR TO THE D ATE OF SEARCH AND THE STATEMENT OF ONE MR. M. SRINIVASULU, ACCOUNTANT OF THE SEARCHED PERSONS. UNDER THESE CIRCUMSTANCES THE QUESTION THAT ARISES IS AS TO WHE THER THE NOTICE ISSUED U/S.158BD TO THE ASSESSEE IS VALID AND WHETHER THE ADDITION M ADE BY THE AO IN THE HANDS OF THE ASSESSEE U/S.68 AND 69C IS SUSTAINABLE. 16. FROM THE DETAILS FURNISHED BY THE ASSESSEE IN T HE PAPER BOOK AS WELL AS THE PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.22 LAKHS, I.E. R.5 LAKHS DURING A.Y. 1 998-99, RS.2 LAKHS IN A.Y. 2000- 01 AND RS.15 LAKHS IN A.Y. 2001-02 FROM M/S. MAHESH WARI FINANCIERS BY ACCOUNT PAYEE CHEQUES AND THESE WERE ENTERED IN THE BOOKS O F ACCOUNT OF M/S. MAHESWARI FINANCIERS PRIOR TO THE DATE OF SEARCH. THERE IS N O PROOF WITH THE DEPARTMENT THAT MONEY WAS GIVEN BY THE ASSESSEE TO M/S. MAHESHWARI FINANCIERS FOR OBTAINING THE CHEQUES OR THAT AFTER THE LOANS WERE OBTAINED CASH WAS WITHDRAWN AND GIVEN TO M/S. MAHESWARI FINANCIERS. MERELY ON THE BASIS OF STATE MENT OF THE ACCOUNTANT AND WITHOUT ANY CORROBORATIVE EVIDENCE THE ADDITION MAD E BY THE AO IN A BLOCK ASSESSMENT PASSED U/S.158BD R.W.S. 158BC WHICH HAS BEEN UPHELD BY THE CIT(A), IN OUR OPINION, IS NOT CORRECT AND PROPER. IT IS FURT HER TO BE NOTED HERE THAT THE BLOCK ASSESSMENT ORDER PASSED IN THE CASE OF THE SEARCHED PERSON HAS BEEN SET ASIDE BY THE CIT U/S.263 ON 23-03-2006. SUBSEQUENT TO THE ORDER PASSED U/S.263 THE AO COMPLETED THE ASSESSMENT OF THE SEARCHED PERSONS ON 29-12-2006 BY MAKING ADDITION U/S.69A AMOUNTING TO RS.1,63,77,713/- AS M ONEY LENT TO THIRD PARTIES, A STATEMENT MADE BY THE LD. COUNSEL FOR THE ASSESSEE AT THE BAR AND NOT CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT WHEN THE O RDER PASSED U/S.263 IS IN FORCE IN CASE OF THE SEARCHED PERSON, THERE WAS NO QUESTION OF MAKING ADDITION IN THE HANDS OF THE ASSESSEE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS.22 LAKHS AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD. SINCE THE LOAN AMOUNT HAS BEEN TREATED AS GENUINE, THEREFORE, THE DISALLOWANC E OF INTEREST U/S.69C BY THE AO AND UPHELD BY THE CIT(A) ALSO IS NOT WARRANTED. AC CORDINGLY, THE DISALLOWANCE OF SUCH INTEREST ON SUCH LOAN BY THE AO U/S.69C AND UP HELD BY THE CIT(A) IS DIRECTED TO BE DELETED. 17. EVEN OTHERWISE ALSO, IT IS A FACT THAT NO INCRI MINATING MATERIAL BELONGING TO THE ASSESSEE WERE FOUND FROM THE PREMISES OF THE SE ARCHED PERSON. THE SATISFACTION NOTE WAS MAINLY BASED ON THE BASIS OF ENTRIES MADE IN THE REGULAR BOOKS OF ACCOUNT AND THE STATEMENT OF THE ACCOUNTANT. 18. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. LATE RAJPAL BHATIA REPORTED IN 333 ITR 315 HAS HELD THAT PROCEE DINGS INITIATED AGAINST THE ASSESSEE U/S.158BD ON THE BASIS OF THE STATEMENT RE CORDED DURING SEARCH ARE NOT VALID AS THE STATEMENT IS NEITHER DOCUMENT NOR ASSE T. IT HAS FURTHER BEEN HELD THAT INITIATION OF PROCEEDINGS U/S.158BD BY THE AO AGAIN ST THE ASSESSEE WITHOUT RECORDING THE REQUISITE SATISFACTION WAS ILLEGAL. THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT AT PARA NOS. 11 TO 13 ARE AS UND ER : 11. IT CLEARLY EMERGES FROM THE READING OF THIS PROVISI ON THAT BEFORE INVOKING THE PROVISIONS OF S. 158BD OF THE ACT, THE AO OF THE PERSON SEARCHED 'UNDER S. 132(1) MUST SATISFY HIMSELF THAT SOME UND ISCLOSED INCOME BELONGS TO A PERSON OTHER THAN THE PERSONS WITH RESPECT TO WHOM SEARCH WAS MADE 9 ITA NO.1794/PN/2013 UNDER S. 132(1) OF THE ACT. SUCH SATISFACTION MUST BE BASED ON THE MATERIAL FOUND IN THE COURSE OF SEARCH. IN THE ABSENCE OF AN Y SUCH SATISFACTION (WHICH IS TO BE RECORDED IN WRITING) THE CONCERNED AO DOES NOT GET ANY JURISDICTION TO ASSESS THAT OTHER PERSON BY INVOKING THE S. 158B D OF THE ACT. FURTHER, THE SATISFACTION OF THE AO HAS TO BE IN RESPECT OF THE FOLLOWING ASPECTS : (I) THERE SHOULD BE 'UNDISCLOSED INCOME' WITHIN THE MEANING OF S. 158B(B) REFERABLE TO THE ASSETS OR BOOKS/DOCUMENTS FOUND SEIZED/ REQUISITIONED; (II) THERE SHOULD A FINDING BY THE AO THAT THERE WA S UNDISCLOSED INCOME IN SUCH ASSETS OR BOOKS OF ACCOUNT OR DOCUMENTS OF THE SEARCHED PERSON; (III) AND THAT SUCH UNDISCLOSED INCOME BELONGED TO THE PERSON OTHER THAN THE ONE SEARCHED. 12. IN THE PRESENT CASE, ADMITTEDLY, DURING THE SEARCH CARRIED OUT AT THE PREMISES OF MR. AND MRS. CHARLA, NO BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR OTHER ASSETS PERTAINING TO THE ASSESSEES HEREIN WER E FOUND OR SEIZED. THE ENTIRE FOUNDATION OF THE BLOCK ASSESSMENT UNDER S. 158BD O F THE ACT, INSOFAR ASSESSEES ARE CONCERNED, WAS THE STATEMENT OF SMT. SURKSHA CH ARLA RECORDED DURING THE COURSE OF SEARCH. 13. THE TRIBUNAL HAS HELD THAT THIS STATEMENT COULD NOT BE TREATED 'BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ASSETS' WHICH ONLY COULD BE THE BASIS FOR INVOKING THE PROVISION OF S. 158BD OF THE ACT. ADMITTEDLY, STATEMENT OF MRS. CHARLA IS NEITHER 'BOOKS OF ACCOUNTS' NOR 'ASSETS'. THE QUEST ION, THEREFORE, IS AS TO WHETHER THIS STATEMENT CAN BE TREATED AS 'OTHER DOCUMENTS'. PRIMA FACIE, IT IS DIFFICULT TO ACCEPT THIS PROPOSITION. STATEMENT WAS NOT THE DOCU MENT WHICH WAS FOUND DURING SEARCH. IN FACT THIS WAS THE DOCUMENT WHICH CAME TO BE CREATED DURING THE SEARCH AS THE STATEMENT WAS RECORDED AT THE TIME OF SEARCH . THEREFORE, IT CANNOT BE SAID THAT THE STATEMENT WAS 'SEIZED' DURING THE SEARCH A ND THUS, WOULD NOT QUALIFY THE EXPRESSION 'DOCUMENT' HAVING BEEN SEIZED DURING THE SEARCH. IN SUCH A SCENARIO, PROPER COURSE OF ACTION WAS REASSESSMENT UNDER S.14 7 R.W S. 148 OF THE ACT. 19. THE BANGALORE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF Y. SUBBARAJU & CO. AND OTHERS VS. ACIT REPORTED IN 91 ITD 118 HAS HELD THAT IN A CASE WHERE NOT AN IOTA OF EVIDENCE WAS FOUND DURING SEARCH REGARDI NG UNDISCLOSED INCOME OF ANY OTHER PERSON, THERE IS NO QUESTION OF ASSESSMENT OF SUCH OTHER PERSONS U/S.158BD ON THE BASIS OF REAPPRAISAL OF FACTS ALREADY IN POSSES SION OF THE DEPARTMENT. 20. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANOJ BANSAL REPORTED IN 92 CCH 0005 HAS HELD THAT IN ABSENCE OF SATISFAC TION NOTE OF AO OF SEARCHED PERSON THAT ANY UNDISCLOSED INCOME BELONGED TO ANY PERSON, OTHER THAN THE PERSON SEARCHED, ORDER PASSED U/S.158BD CANNOT BE HELD TO BE VALID. 21. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. BHARAT BHUSHAN JAIN REPORTED IN 92 CCH 0004 HAS HELD THAT REVENUE HAS T O BE VIGILANT IN ISSUING NOTICE TO THIRD PARTIES U/S.158BD IMMEDIATELY AFTER COMPLE TION OF ASSESSMENT OF SEARCHED PERSON. WHERE THE SATISFACTION NOTE WAS RECORDED M ORE THAN A YEAR AFTER COMPLETION OF ASSESSMENT OF THE SEARCHED PERSON NOTICES ISSUED WERE RIGHTLY HELD TO BE NOT ISSUED IN CONFORMITY WITH REQUIREMENT OF SECTION 15 8BD. THE RELEVANT OBSERVATION OF HONBLE HIGH COURT AT PARA 6 OF THE ORDER READS AS UNDER : 6. HAVING REGARD TO THE INTENT OF THE SUPREME COUR T IN PARA 44 OF THE CALCUTTA KNITWEARS (SUPRA), WHERE IT WAS INDICATED THAT THE REVENUE HAS TO BE VIGILANT IN ISSUING NOTICE TO THE THIRD PARTY UN DER SECTION 158 BD, IMMEDIATELY AFTER THE COMPLETION OF ASSESSMENT OF T HE SEARCHED PERSON, THIS COURT IS OF THE OPINION THAT A DELAY RANGING BETWEE N 10 MONTHS OF 1 YEARS CANNOT BE CONSIDERED CONTEMPORANEOUS TO ASSESSMENT PROCEEDINGS. WE ARE OF THE OPINION THAT NOTICES WERE NOT ISSUED IN CONF ORMITY WITH THE 10 ITA NO.1794/PN/2013 REQUIREMENTS OF SECTION 158BD, AND WERE UNDULY DELA YED. THE APPEALS OF THE REVENUE ACCORDINGLY FAIL AND ARE DISMISSED. 22. SINCE IN THE INSTANT CASE THE BLOCK ASSESSMENT OF THE SEARCHED PERSONS WERE COMPLETED ON 24-12-2003 AND SINCE THE NOTICE U/S.15 8BD WAS ISSUED ON 10-02-2006, I.E. AFTER A GAP OF 26 MONTHS, THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT BHUSHAN JAIN (SUPR A) THE NOTICES ISSUED U/S.158BD ARE NOT IN CONFORMITY WITH THE REQUIREMENTS OF SECT ION 158BD WHICH WERE UNDULY DELAYED. THEREFORE, ON THIS ASPECT ALSO, THE NOTIC E ISSUED U/S.158BD HAS TO BE HELD AS INVALID AND VOID. THUS, BOTH FACTUALLY AND LEGA LLY THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE. THE ORDER OF THE CIT(A) IS ACCORD INGLY SET ASIDE AND THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 6. WE NOTICE THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RAJSHREE HOTELIERS (SUPRA) HAS ALREADY DISMISSED THE SUBSTAN TIAL QUESTION OF LAW RAISED BY THE REVENUE CHALLENGING THE GROUND THAT IF THE PERSON HAD MAINTAINED REGULAR BOOKS OF ACCOUNTS AND DULY ENTERED THE LOAN ENTRIES IN REGULAR MANNER WHICH WAS FOUND AVAILABLE AT THE TIME OF SEARCH THE N SUCH AN INCOME OR ENTRIES CANNOT BE SAID TO BE DETECTED OR UNEARTHED CONSEQUE NT UPON THE SEARCH AND CONSEQUENTLY WOULD BE OUT OF THE AMBIT OF DEFINITIO N OF UNDISCLOSED INCOME AS CONTAINED UNDER SECTION 158B OF THE ACT. IN TH E PRESENT CASE ALSO SIMILAR CIRCUMSTANCES EXIST AND THEREFORE THE CONTENTION OF THE ASSESSEE DESERVES TO BE ACCEPTED. SECONDLY, THE ISSUE RAISED IN THE PRESEN T APPEAL IS IDENTICAL TO THE ISSUE BEFORE THE PUNE BENCH OF THE TRIBUNAL IN SHRI VIJAYKUMAR DEVICHAND NIBJIYA (SUPRA). FOLLOWING THE PARITY OF REASONING AND IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT NOTED ABO VE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED ADDITION MADE UNDER SECTION 68 AND SECTION 69C OF THE ACT. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THIS 14 TH DAY OF OCTOBER, 2015. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 14 TH OCTOBER, 2015. 11 ITA NO.1794/PN/2013 & ' ()* +*( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE