Deputy Commissioner Of Income Tax (Central), Jabalpur V. Tarun Devcon Private Limited, Jabalpur

ITA 18/JAB/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0311 (ITAT-JABALPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 11-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Search and seizure; Loose papers; Capital receipt
• Section: 131; 68; 143(3); 208; 264; 153C

Judgement Text

ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 1 | P A G E IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR [THROUGH VIRTUAL HEARING] BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER & SHRI SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO.18/JAB/2019 ASSESSMENT YEARS: 2015-16 DEPUTY COMMISSIONER OF INCOME TAX (CENTRAL), JABALPUR, 2 ND FLOOR, 291, RAMNATH BUILDING, NAPIER TOWN, JABALPUR (M.P.) - 482001 VS. TARUN DEVECON PVT. LTD. D-24, DIXIT ENCLAVE, NARMADA ROAD, JABALPUR (M.P.) [PAN: AAECT 5367N] (APPELLANT) (RESPONDENT) REVENUE BY SHRI PHAGU ORAM, CIT-DR ASSESSEE BY SHRI PAVAN VED, ADV. & SHRI RAHUL BARDIA, FCA DATE OF HEARING 14/10/2020 DATE OF PRONOUNCEMENT 29/12/2020 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE REVENUE AGITATING THE ORDE R DATED 11.02.2019 BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, JABALPU R (CIT(A) FOR SHORT), ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSE SSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FO R ASSESSMENT YEAR (AY) 2015- 16 VIDE ORDER DATED 26.12.2017. ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 2 | P A G E 2.1 THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASS ESSEE, A PRIVATE LIMITED COMPANY IN THE BUSINESS OF REAL ESTATE DEVELOPMENT, HAVING ITS REGISTERED OFFICE AT JABALPUR, RETURNED NIL INCOME FOR THE RELEVANT YEAR U/S. 139( 1) OF THE ACT ON 26.09.2015, WHICH RETURN WAS SELECTED FOR SCRUTINY UNDER CASS. THE ASSESSING OFFICER (AO) OBSERVED FRESH CREDITS DURING THE YEAR FROM SHRI TA RUN KHATRI, DIRECTOR (TK) AND SHRI JETHA NAND KHATRI (JK), HIS FATHER, AT RS.117. 60 LACS AND RS.252.50 LACS RESPECTIVELY. THE INCOME TAX RETURNS OF THE TWO CRE DITORS FOR THE LAST FEW YEARS WERE TABULATED BY HIM (AT PG.2 OF THE ASSESSMENT OR DER) TO FIND THE INCOME RETURNED BY THEM TO BE VARYING FROM RS.1.50 LACS TO 10 LACS (AVERAGE: RS. 5.45 LACS) AND FROM RS.5 LACS TO 15 LACS (AVERAGE: RS.13 LACS) FOR TK AND JK RESPECTIVELY (FROM AY 2010-11 TO AY 2014-15), WHICH DID NOT AGREE WITH THE CREDITS UNDER REFERENCE, REQUIRED TO BE PROVED BY THE ASSESSEE ON THE PARAME TERS OF IDENTITY, CAPACITY AND GENUINENESS. THE ASSESSEE WAS ACCORDINGLY REQUIRED BY HIM TO PRODUCE THE SAID CREDITORS, WHICH IT FAILED TO. HE, ACCORDINGLY, REL YING ON ROSHAN DI HATTI VS. CIT [1977] 107 ITR 938 (SC); CIT VS. KORLAY TRADING CO . LTD . [1998] 232 ITR 820 (CAL); AND CIT V. PRECISION FINANCE P. LTD . [1994] 208 ITR 465 (CAL), ASSESSED THE SAID CREDITS AS THE ASSESSEES INCOME ON ACCOUNT OF UNEXPLAINED CREDIT U/S. 68 FOR WANT OF NECESSARY SATISFACTION TOWARD THE CREDITWOR THINESS OF THE CREDITORS. 2.2 IN APPEAL, THE ASSESSEE FURNISHED THE SOURCE OF EACH OF THE SEVERAL SUMS COMPRISING THE IMPUGNED CREDITS IN A TABULAR FORM, STATING THEIR SOURCES AS THE REFUND OF THE AMOUNTS ADVANCED EARLIER BY THE CREDI TORS TO DIFFERENT FIRMS/PERSONS, VIZ. JAI MATA DI ARTS AND CREATION, MBK TRADERS PVT . LTD., SHANTI DEVI KHATRI (RELATED PARTIES) AND HARISH CHANDRA YADAV (UNRELAT ED), AT AN AGGREGATE OF RS.160.74 LACS AND RS.44 LACS RESPECTIVELY, I.E., T HEIR EXISTING CAPITAL. ANOTHER RS.154.16 LACS WAS, AGAIN, A CAPITAL RECEIPT BY WAY OF SALE OF CAPITAL ASSETS, BEING LAND (RS.105.54 LACS) AND SHARES (RS.48.62 LACS), W HICH THOUGH DID NOT GIVE RISE TO ANY TAXABLE INCOME DUE TO THE SAME BEING AT A LOSS OR BEING TAX-EXEMPT (U/S. 10(38)) (REPRODUCED AT PGS. 10 TO 12 OF THE IMPUGNE D ORDER (IO)). ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 3 | P A G E 2.3 THE LD. CIT(A) FOUND THE ADDITIONS MADE UNTENAB LE FOR THE FOLLOWING REASONS: A. THE ASSESSEE-COMPANY HAD SUBMITTED ALL THE NECES SARY DOCUMENTS TO THE AO, INCLUDING THE BALANCE-SHEET AS ON 31/3/2015 OF THE CREDITORS WHO WERE IN FACT ASSESSED WITH HIM, PROVING THEIR CREDITWORTHINESS; B. THE CREDITS REPRESENTING LOANS BY THE FAMILY MEM BERS FOR FINANCING THE BUSINESS OF THE ASSESSEE-COMPANY, THEIR GENUINENESS COULD NOT BE DOUBTED; AND C. THE AO, IF HE WANTED TO, OUGHT TO HAVE ISSUED SU MMONS TO THE CREDITORS U/S. 131 TO ENFORCE THEIR ATTENDANCE, BEING THE WITNESSE S OF THE DEPARTMENT. IN VIEW THEREOF, IN HIS VIEW THE ONUS U/S. 68 HAD B EEN DISCHARGED BY THE ASSESSEE. RELIANCE WAS PLACED BY HIM ON SEVERAL DECISIONS, NO TABLY CIT VS. ORISSA CORPORATION (P.) LTD . [1986] 159 ITR 78 (SC); CIT VS. METACHEM IND S. [2000] 245 ITR 160 (MP); NEMI CHAND KOTHARI VS. CIT [2003] 264 ITR 254 (GAU); SAROGI CREDIT CORPORATION VS. CIT [1976] 103 ITR 344 (PATNA); AND TOLARAM DAGA VS. CIT [1966] 59 ITR 632 (ASS). THE REVENUE CHALLENGES THE IR DELETION BEFORE US. 3. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. 3.1 OUR FIRST OBSERVATION IN THE MATTER IS THAT THE AO HAS NOT DOUBTED EITHER THE GENUINENESS (OF THE CREDITS) OR THE IDENTITY OF THE CREDITORS, BUT ONLY THEIR CREDITWORTHINESS IN VIEW OF THE GROSS MISMATCH BETW EEN THEIR REPORTED ANNUAL EARNINGS (AS PER THEIR RETURNS OF INCOME) AND THE C REDITS UNDER REFERENCE, BEING AT RS.5.45 LACS AND RS.13 LACS FOR THE TWO CREDITORS A S AGAINST THEIR RESPECTIVE CREDITS AT RS.117.60 LACS AND RS.252.50 LACS. IN FACT, TK H AS A CREDIT BALANCE OF RS. 25 LACS WITH THE ASSESSEE AS ON 31/3/2014, SO THAT HIS CAPITAL STANDS ALREADY LOCKED UP THEREWITH TO THAT EXTENT PRIOR TO THE RELEVANT PREV IOUS YEAR. THE AO, THEREFORE, DOUBTING THE CAPACITY, OR STATING THE SAME TO HAVE BEEN NOT PROVED, CANNOT BE FAULTED WITH. THAT THE ASSESSEE MAY THOUGH, ON THE BASIS OF THE MATERIAL ON RECORD, ESTABLISH THE SOURCE, WHICH HE HAS TO SEPARATELY QUA EACH SUM CREDITED IN ITS BOOKS OF ACCOUNT, IS ANOTHER MATTER. THIS IS PARTICULARLY SO AS THE ASSESSEE, DESPITE BEING ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 4 | P A G E CALLED FOR, DID NOT PRODUCE THE CREDITORS. IN THIS REGARD, LD. CIT(A) STATING THAT THE CREDITORS WERE THE DEPARTMENTS WITNESSES IS AN INC ORRECT APPRECIATION OF FACTS AND OF LAW. THE CALLING OF THE CREDITORS BY THE AO IS O NLY IN SUPPORT OF THE CONFIRMATIONS FILED BY THEM, OR AN ENQUIRY ABOUT AN Y OF THE ENTRIES IN THEIR BANK ACCOUNTS. 3.2 THE MATTER, THEREFORE, BOILS DOWN TO PROVING TH E CREDITWORTHINESS OF THE CREDITORS TOWARD EXPLAINING SATISFACTORILY THE SOUR CE OF THE SUMS FOUND CREDITED IN ITS BOOKS BY THE ASSESSEE, WHICH, THEREFORE, HAS T O BE PROVED W.R.T. THE TOTAL SUM CREDITED. THE MATTER, AS WOULD BE APPARENT, IS PURE LY FACTUAL, TO BE DECIDED UPON EXAMINING THE STATED SOURCE, BY ISSUING DEFINITE FI NDING/S OF FACT. NO SUCH EXERCISE WAS DONE BY THE AO, WHO MERELY WENT BY THE INCOME-T AX RETURNS OF THE CREDITORS, WHILE A CREDIT/S COULD EQUALLY BE FROM A CREDITORS ACCUMULATED CAPITAL OR, AS ALSO SOUGHT TO BE MADE OUT BEFORE US, HIS NON-TAXABLE IN COME, SO THAT THE SOLE RELIANCE ON THEIR TAXABLE INCOME BY THE AO, AS A MEASURE OF THEIR CREDITWORTHINESS, IS CLEARLY INCORRECT. ON THE ASSESSEES PART ALSO, WE ARE AFRAID TO SAY, THERE HAS BEEN NO CORRELATION OF THE DIFFERENT CREDITS, I.E., AS A PPEARING IN THE LEDGER ACCOUNTS OF THE CREDITORS IN ITS BOOKS, WITH THEIR RESPECTIVE SOURCES, AS HAS BEEN BEFORE THE LD. CIT(A). IT WAS, THEREFORE, INCUMBENT ON THE LD. CIT (A) TO HAVE EITHER CAUSED THE AO TO VERIFY THE SAME, CALLING FOR A REMAND REPORT FROM HIM, OR OUGHT TO HAVE DONE IT HIMSELF. SUCH AN EXERCISE, IN THE ABSENCE OF EIT HER REVENUE AUTHORITY DOING SO, WAS ATTEMPTED BY US DURING HEARING, I.E., PRELIMINA RILY, TO FIND THE CREDITS AS LARGELY EXPLAINED. OUR FINDINGS IN THE MATTER ARE AS UNDER: (I) TARUN KHATRI: (A) THE CREDITORS RECEIPT AND PAYMENT (AS PER HIS BANK STATEMENT AT PB PG. 19, INSOFAR AS IT RELATES TO THE CREDITS IN THE ASS ESSEES ACCOUNTS DURING THE YEAR) IS AT RS.76.50 LACS AND RS.92.60 LAKHS RESPECTIVELY (R EFER PGS. 10-11 OF THE IO); THE LATTER AMOUNT REPRESENTING THE TOTAL SUM CREDITED I N THE ASSESSEES ACCOUNTS, AS ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 5 | P A G E AGAINST RS.117.60 LACS FOUND TO BE SO BY THE AO/CIT (A), WHICH IS THUS CLEARLY IN EXCESS BY RS. 25 LACS, BEING THE CREDITORS OPENING BALANCE IN THE ASSESSEES BOOKS. PERUSAL OF HIS BANK STATEMENT, HOWEVER, REVEALS AN OMISSION TO RECORD RS.30,000 (DEPOSITED CASH ON 04.3.2015) AND RS.21 LACS (STATE D AS RECEIVED FROM ONE, HARISH CHANDRA YADAV, THROUGH YES BANK, ON 07.3.2015), CON SIDERING WHICH THE TOTAL RECEIPT FROM THE CREDITOR, INDICATING THE ORIGIN TH EREOF, WORKS TO RS.97.80 LACS. (B) A PERUSAL OF THE BALANCE-SHEET OF THE CREDITOR AS ON 31.03.2015 (PB PGS. 94, 94A) REFLECTS THE DEBIT BALANCE OF THE ASSESSEE IN LIKE AMOUNT, I.E., RS. 117.60 LACS. (C) THE ENTIRE CREDIT OF RS.92.60 LACS DURING THE Y EAR, STATED AS SOURCED FROM THIS CREDITOR, IS THUS SHOWN TO BE FROM HIS EXISTIN G CAPITAL. IN VIEW OF AVAILABILITY OF CASH (AS ON 31.03.2015) IN HIS ACCOUNTS, NO ADVE RSE INFERENCE IN RESPECT OF THE CASH DEPOSITED IN HIS BANK ACCOUNT ON 04/3/2015 IS ALSO CALLED FOR. THE CAPACITY OF THE CREDITOR, DOUBTED BY THE AO, STANDS, THUS, REAS ONABLY DEMONSTRATED. (D) SUBJECT, THEREFORE, TO THE ANNEXURE TO THE CRED ITORS BALANCE-SHEET (PB PG. 94A), REFLECTING THE LOAN TO THE ASSESSEE AS ON 31/ 3/2015 AT RS. 117.60 LACS, FURNISHED DURING HEARING, THE ENTIRE CREDIT OF RS.9 2.60 LACS STANDS SATISFACTORILY EXPLAINED AS BY WAY OF AN UNSECURED LOAN FROM TK, A ND THE ASSESSEE CAN BE SAID TO HAVE DISCHARGED THE ONUS CAST ON IT IN ITS RESPECT. (II) JETHA NAND KHATRI: (A) THE CREDITORS RECEIPT AND PAYMENT (AS PER HIS BANK STATEMENT INSOFAR AS IT RELATES TO THE CREDITS IN THE ASSESSEES ACCOUNTS D URING THE RELEVANT YEAR) IS AT RS.241.68 LACS AND RS.252.50 LACS RESPECTIVELY. A P ERUSAL OF THE BANK STATEMENT OF THE CREDITOR (PB PG. 43), HOWEVER, SHOWS AN OMISSIO N TO RECORD THE DEPOSIT OF RS.19,70,536 ON 13.3.2015, STATED TO BE BY WAY OF ( TAX-FREE) CAPITAL GAIN, AS ALSO RS.28,91,159, STATED AS, AGAIN, ON SALE OF SHARES, TAX-EXEMPT U/S. 10(38), IN THE RECEIPT/PAYMENT CHART (REPRODUCED AT PGS. 11-12 OF THE IO). CONSIDERING THESE TWO ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 6 | P A G E RECEIPTS, THE RECEIPT SIDE OF THE CREDITOR SHALL BE AT RS.261.39 LACS, FULLY COVERING THE CREDITS FOR RS.252.50 LACS IN THE ASSESSEES AC COUNTS ASCRIBED TO THIS CREDITOR. (B) TOWARD THE SALE OF SHARES AFORE-STATED, THE LD. COUNSEL FOR THE ASSESSEE, SHRI BARDIA, WOULD ADDUCE DURING HEARING THE COMPUTATION OF INCOME (FOR AY 2015- 16), STATED TO HAVE BEEN OMITTED TO SUBMITTED ALONG WITH THE ACKNOWLEDGMENT OF HIS RETURN OF INCOME FOR THAT YEAR (AT PB PG. 100). (C) A PERUSAL OF THE BALANCE-SHEET OF THE CREDITOR AS ON 31.03.2015 (PB PGS. 99, 99A) REFLECTS THE DEBIT BALANCE OF THE ASSESSEE IN LIKE AMOUNT, I.E., RS. 252.50 LACS. (D) SUBJECT, THEREFORE, TO THE ANNEXURE TO THE CRED ITORS BALANCE-SHEET (PB PG. 99A), REFLECTING THE LOAN TO THE ASSESSEE AS ON 31/ 3/2015 AT RS. 252.50 LACS, AS WELL AS THE COMPUTATION OF INCOME, AS FURNISHED DURING H EARING BOTH BEING NOT A PART OF THE RECORD AS THE SAME WERE ADMITTEDLY NOT FILED BEFORE THE AUTHORITIES BELOW, BEING THE SAME AS THAT FILED BY THE SAID CREDITOR W ITH THE DEPARTMENT, THE ENTIRE CREDIT OF RS.252.50 LACS STANDS REASONABLY EXPLAINE D BY THE ASSESSEE IN TERMS OF THE SAID CREDITORS CAPITAL AND/OR NON-TAXABLE/TAX-EXEM PT INCOME FOR THE RELEVANT YEAR. 3.3 WE, THEREFORE, IN VIEW OF THE FOREGOING, CONSID ER IT TO BE A SUFFICIENT DISCHARGE BY THE ASSESSEE OF THE BURDEN CAST ON IT U/S. 68 OF THE ACT. THE AO SHALL THOUGH VERIFY THE ASSESSEES CLAIM OF JK HAVING RET URNED LONG-TERM CAPITAL GAIN ON SALE OF SHARES AT RS. 48.62 LACS (I.E., RS. 19.71 L ACS + RS. 28.91 LACS) TOWARD EXHIBITING HIS CREDITWORTHINESS QUA THE SAID SUM CREDITED BY THE ASSESSEE. HE SHALL ALSO VERIFY THE RETURNING OF LONG-TERM CAPITAL GAIN ON SALE OF LAND AGAINST RECEIPT OF RS. 105.54 LACS; THE COMPUTATION FILED REFLECTING A CAPITAL GAIN ON BUILDING INSTEAD, WITH SOME DIFFERENCE IN AMOUNT AS WELL, WHICH THOUG H COULD BE ON ACCOUNT OF SOME DEDUCTION/S FROM THE SALE PRICE INASMUCH AS TH E TWO APPEAR TO PERTAIN TO THE SAME TRANSACTION. THE AO SHALL VERIFY THE ASSESSEE S BALANCE IN THE CREDITORS ACCOUNTS AS ON 31/3/2015. SUBJECT TO THE SAID CONFI RMATIONS, TO BE MADE BY THE AO WHILE GIVING APPEAL-EFFECT TO THIS ORDER, WE CONFIR M THE IMPUGNED ORDER. WE MAY ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 7 | P A G E THOUGH BEFORE PARTING (WITH THIS ASPECT) RECORD OUR COMPLETE DISSATISFACTION WITH THE MANNER IN WHICH BOTH THE AO AND THE LD. CIT(A), I.E., THE ASSESSING AND THE FIRST APPELLATE AUTHORITY RESPECTIVELY, HAVE PROCEE DED TO UNDERTAKE THEIR OBLIGATIONS TOWARD VERIFYING THE ASSESSEES CLAIMS IN THE PRESE NT CASE, RESULTING IN A SIMPLE MATTER OF FACTUAL VERIFICATION BEING CARRIED TO THE SECOND APPELLATE STAGE. IN FACT, EVEN THE AMOUNT CREDITED TO ONE OF THE CREDITORS (T K) HAS NOT BEEN CORRECTLY NOTED. 3.4 WE MAY ALSO ADVERT TO THE ABUNDANT CASE LAW CIT ED BY THE PARTIES. THE MATTER AS, AFORE-NOTED, IS PURELY FACTUAL, I.E., WHETHER T HE MATERIAL ADDUCED BY THE ASSESSEE, TOGETHER WITH EXPLANATION/S FURNISHED, LE ADS TO A SATISFACTORY EXPLANATION OF THE NATURE AND SOURCE OF THE CREDITS IN ITS BOO KS OF ACCOUNT IN TERMS OF IDENTITY, CREDITWORTHINESS (OF THE CREDITOR/S) AND THE GENUIN ENESS OF THE CREDIT/S, OF WHICH ONLY THE CAPACITY WAS DOUBTED BY THE AO IN THE INST ANT CASE. INASMUCH AS THE CAPACITY IS TO BE FOR THE ENTIRE SUM CREDITED, I.E. , INCLUDING THAT ALREADY CREDITED TO A CREDITORS ACCOUNT, THE SAME SHALL THEREFORE HAVE TO BE WITH REFERENCE TO THE ENTIRE SUM FOUND CREDITED. THIS REPRESENTS TRITE LAW, AND FOR WHICH, BEGINNING WITH KALE KHAN MOHAMMAD HANIF [1963] 50 ITR 1 (SC), AFFIRMING THE DECISION BY TH E HONBLE JURISDICTIONAL HIGH COURT (REPORTED AT [195 8] 34 ITR 669 (MP)), THE CASE LAW BY THE APEX COURT IS LEGION. A PERUSAL OF THE M ATERIAL ON RECORD SHOWS THAT THE ENTIRE SUM CREDITED STANDS EXPLAINED WITH REFERENCE THE CREDITORS EXISTING CAPITAL AND/OR CURRENT INCOME. NO VERIFICATION OF THE SAME WAS HOWEVER DONE BY THE AO. IN FACT, AS EXPLAINED BY SH. BARDIA DURING HEARING, THE PRODUCTION OF THE CREDITORS BY THE ASSESSEE WAS SOUGHT BY THE AO IN THE ASSESSM ENT PROCEEDINGS AS AN ALTERNATE TO THE SUBMISSION OF AN EXPLANATION IN WR ITING (PB PG. 7). EVEN SO, THE ASSESSEE, DESPITE FURNISHING DOCUMENTARY EVIDENCES, OFFERED TO PRODUCE THE CREDITORS, AND FOR WHICH HE REFERRED TO THE ASSESSE ES COMMUNICATIONS TO THE AO DATED NIL AND 07/12/2017 (PB PGS. 15-17). IT WAS FO R THIS REASON THAT WE HAVE OPINED THAT THE IMPUGNED CREDITS ARE TO BE REGARDED AS EXPLAINED UPON CONFIRMATION OF THE CLAIMS NOT CLARIFIED WITH REFERENCE TO THE MATERIAL ON RECORD. ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 8 | P A G E OUR DECISION, IT MAY BE APPRECIATED, IS IN COMPLETE AGREEMENT WITH METACHEM INDUSTRIES (SUPRA) BY THE JURISDICTIONAL HIGH COURT, WHEREIN I T STANDS HELD THAT ONCE IT IS ESTABLISHED THAT IT IS THE CREDITORS MONEY T HAT HAS FOUND ITS WAY IN THE BOOKS OF THE ASSESSEE, NO ADVERSE INFERENCE U/S. 68 COULD BE DRAWN IN ITS RESPECT IN THE CASE OF THE ASSESSE. THE SAID ESTABLISHMENT, IT MAY BE THOUGH CLARIFIED, IS TO BE, IN TERMS OF THE SETTLED LAW, NOT ON THE BASIS THE CRED ITORS IDENTITY ALONE, AS WHERE THE SUM CREDITED IS SHOWN TO ORIGINATE FROM HIS BANK AC COUNT, BUT ALSO HIS CAPACITY AS WELL AS THE GENUINENESS OF THE CREDIT TRANSACTION. 4. THE ASSESSEE RAISED ANOTHER PLEA DURING HEARING, I.E., THAT THE IMPUGNED ASSESSMENT IS BAD IN LAW INASMUCH AS THE SAME IS NO T U/S. 153C AS THE FILING OF THE RETURN OF INCOME FOR THE YEAR ON 26/9/2015 WAS FOLL OWED BY A SEARCH U/S. 132(1) AT THE PREMISES OF SH. TARA CHAND KHATRI, LOOSE PAPERS AND DOCUMENTS FROM WHOSE RESIDENCE RELATING TO THE ASSESSEE WERE FOUND AND S EIZED (PB PGS. 101-112). EVEN AS THE SAME WAS NOT SERIOUSLY PRESSED DURING HEARIN G, WE EXPRESS OUR OPINION IN THE MATTER, AS INDEED WE ARE OBLIGED TO. WE ARE WHO LLY UNABLE TO APPRECIATE THE ASSESSEES CASE IN THIS REGARD. A SEIZURE OF A DOCU MENT PERTAINING TO THE ASSESSEE WOULD NOT BY ITSELF GIVE RISE TO THE JURISDICTION T O THE AO TO PROCEED U/S. 153C BY ISSUING NOTICE U/S. 153A. THE SAME COULD ONLY BE ON THE AO BEING POSITIVELY SATISFIED AS TO THE SAID MATERIAL HAVING A BEARING ON THE ASSESSEES INCOME FOR A SPECIFIED YEAR/S. THERE IS NO WHISPER OF ANY RELIAN CE BY THE AO ON THE SAID MATERIAL WHILE ASSESSING THE ASSESSEES INCOME FOR THE RELEVANT YEAR, OR EVEN IN THE APPELLATE PROCEEDINGS. NOW IT COULD BE NOBODYS CAS E THAT THE AO OUGHT TO BE NECESSARILY SO SATISFIED A MATTER OF FACT, AND WH ICH THEREFORE IS TO BE DEMONSTRATED, AND, FURTHER, WITHOUT IN ANY MANNER S TATING, MUCH LESS SHOWING, THE BASIS THEREOF, EVEN AS THERE IS NOTHING ON RECORD, NOR ANY POINTED OUT, TO EXHIBIT THE SAID SATISFACTION. THE PROVISION, AS ITS READING W OULD SHOW, IS FOR THE BENEFIT OF THE REVENUE, PROVIDING IT ADDITIONAL TIME TO FRAME AN ASSESSMENT IN SEARCH AND SEARCH-RELATED CASES. NO CASE STANDS MADE OUT, WITH THERE EVEN BEING NO REFERENCE ITA NO. 18/JAB/2019 (AY 2015-16) DY. CIT VS. TARUN DEVCON (P.) LTD. 9 | P A G E TO ANY SUCH MATERIAL RELIED UPON IN DETERMINING THE ASSESSEES INCOME EVEN DURING HEARING. THE ASSESSEES CHALLENGE IS WITHOUT ANY BA SIS ON FACTS AND IN LAW. WE DRAW SUPPORT FOR THE SAME FROM OUR DECISION IN NITIN SHARMA V. PR. CIT (IN ITA NO. 25/JAB/2019, DATED 28.9.2020). 5. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED IN TERMS OF THE FOREGOING. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29/12/2020 AKS/-(P) // TRUE COPY //