Ganesh Plantations Ltd., Ahmedabad V. The DCIT, Central Circle-1(3), Ahmedabad

ITA 2200/AHD/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6703 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 30-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Unexplained cash credit; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Earning of tax free income; Difference of opinion; Accommodation entries; Documents seized; Change of opinion; Reassessment proceedings; Borrowed satisfaction
• Section: 143(3); 153A; 14A; 201; 64; 13; 153; 119; 22; 153C; 131; 68; 148; 132

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD ( CONVENED THROUGH VIRTUAL COURT ) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER . / I.T.A. NOS. 2295/AHD/2018 WITH CROSS OBJECTION NO. 146/AHD/2019 ( ASSESSMENT YEAR : 2011-12) DCIT CENTRAL CIRCLE 1(3), AHMEDABAD / VS. GANESH PLANTATION LTD. GANESH CORPORATE HOUSE, 100 FEET HEBATPUR-THALTEJ ROAD, NR. SOLA BRIDGE, OFF. S. G. HIGHWAY, AHMEDABAD ./ ./ PAN/GIR NO. : AAACG7004R ( APPELLANT / RESPONDENT ) .. ( RESPONDENT / CROSS OBJECTOR ) & . / I.T.A. NOS. 2200/AHD/2018 ( ASSESSMENT YEAR : 2011-12) GANESH PLANTATION LTD. GANESH CORPORATE HOUSE, 100 FEET HEBATPUR-THALTEJ ROAD, NR. SOLA BRIDGE, OFF. S. G. HIGHWAY, AHMEDABAD - 380054 / VS. THE ACIT CENTRAL CIRCLE 1(3), ROOM NO. 304, AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD- 380009 ( APPELLANT ) .. ( / RESPONDENT ) / REVENUE BY : SHRI L. P. JAIN, SR.D.R. / ASSESSEE BY : MS. NUPUR SHAH ALONGWITH SHRI DHIREN SHAH, A.RS. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 2 - DATE OF HEARING 15/02/2021 !'# / DATE OF PRONOUNCEMENT 13/04/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED CROSS APPEALS HAVE BEEN FILED AT THE INSTANCE OF THE REVENUE AND T HE ASSESSEE. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN THE APPEAL OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, AHMEDABAD (CIT(A) IN SHORT) DATED 04.09.2018 ARISING IN THE ASSESSMENT ORDER DA TED 29.12.2017 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (THE ACT) CO NCERNING AY 2011-12. 2. BOTH CROSS APPEALS OF REVENUE AND ASSESSEE AS WE LL AS CROSS OBJECTION OF ASSESSEE ARISES FROM THE SAME ASSESSME NT ORDER AND FIRST APPELLATE ORDER AND INVOLVE CONNECTED ISSUES. HENCE, ALL THE CAPTIONED APPEALS ARE DISPOSED OFF BY THIS COMMON O RDER. 3. TO BEGIN WITH, WE SHALL TAKE UP REVENUE APPEAL I N ITA NO.2295/AHD/2018 FOR ADJUDICATION PURPOSES. 4. GROUNDS OF APPEAL RAISED BY THE REVENUE IN ITA N O. 2295/AHD/2018 READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.4,00,00,000/- ON ACCOUNT OF UNEXPLAI NED CREDIT U/S 68 OF THE ACT. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 3 - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION MADE BY THE AO IGNORING THE OVERWHELMING A ND STRONG EVIDENCES DISCUSSED BY THE AO IN THE ASSESSM ENT ORDER RELATING TO THE IMPUGNED UNEXPLAINED TRANSACT ION OF RS.4,00,00,000/- ENTERED INTO BY THE ASSESSEE. 5. GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITS CROSS APPEAL IN ITA NO. 2200/AHD/2018 WHEREBY THE JURISDICTION ASSU MED BY AO UNDER S.147 OF THE ACT WAS RAISED, READ AS UNDER: 1. THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN ALLOWING THE APPEAL PARTLY. HE OUGHT TO HAVE ALLOWE D THE APPEAL FULLY IN ACCORDANCE WITH THE GROUNDS OF APPEAL RAIS ED BY THE APPELLANT BEFORE HIM. I. LACK OF JURISDCITION :- THE ENTIRE PROCEEDINGS ARE INVALID AND EX FACIE BAD IN LAW AS THE SAME ARE NOT SUPPORTED BY INGREDIENTS OF THE STATUT ORY PROVISIONS UNDER WHICH INITIATION OF PROCEEDINGS IS DONE. HENC E ALL SUBSEQUENT PROCEEDINGS IN FURTHERANCE TO ILLEGAL IN ITIATION OF PROCEEDINGS ARE MERE CONTINUATION OF ILLEGALITY IN PERPETUITY. II. CHALLEN1NG THE VALIDITY OF ISSUANCE OF NOTICE U/S. 148 OF THE ACT AND REOPENING THE ASSESSMENT U/S. 147 OF THE ACT AS WELL AS PASSING THE ORDER U/S. 143(3) R.W.S. 147 OF THE ACT. 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS WH ILE UPHOLDING THE ISSUE OF NOTICE UNDER SECTION 148 AND SUSTAINING THE ASSESSMENT MADE UNDER SECTION 143 READ WITH 147 OF THE ACT, 1961 IS UNSUSTAINABLE BOTH ON FACTS AND IN LAW. THE APPE LLANT SUBMITS THAT THE IMPUGNED RE-ASSESSMENT PROCEEDINGS U/S 148 AND THE ORDER PASSED U/S. 143(3) R.W.S. 147 OF THE ACT IN P URSUANCE THEREOF WAS NOT IN ACCORDANCE WITH LAW AND CONSEQUENTLY OUG HT TO BE HELD AS VOID AB-INITIO. 2. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN FAILING TO PROPERLY APPRECIATING THE WRITTEN SUBMISSION OF THE APPELLANT COMPANY AND VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLANT COMPANY THERETO. 6. BRIEFLY STATED, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR AY 2011-12 ON 12.07.2012 DECLARING TOTAL INCOME AT ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 4 - RS.6,54,22,430/-. THE CASE WAS SELECTED FOR SCRUTI NY ASSESSMENT AND THE TOTAL INCOME WAS ASSESSED AT RS.6,67,58,012 /- UNDER S.143(3) OF THE ACT VIDE ASSESSMENT ORDER DATED 18. 03.2014. SUBSEQUENTLY, THE NOTICE UNDER S.148 OF THE ACT DAT ED 30.03.2017 WAS ISSUED AND SERVED UPON THE ASSESSEE COMPANY. I N RESPONSE, THE ASSESSEE FILED RETURN OF INCOME FOR THE AY 2011-12 IN QUESTION AND THE RE-ASSESSMENT OF TAXABLE INCOME WAS THUS CARRIE D OUT. WHILE PASSING THE RE-ASSESSMENT ORDER UNDER S.143(3) R.W. S. 147 OF THE ACT DATED 29.12.2017, THE AO INTER ALIA MADE AN ADDITION OF RS.4 CRORE ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDITS UNDE R S.68 OF THE ACT. 6.1 THE AO REPRODUCED THE REASONS RECORDED FOR REVO KING JURISDICTION UNDER S.147 OF THE ACT IN ITS RE-ASSES SMENT ORDER AND NOTED THAT SEARCH AND SEIZURE ACTION UNDER S.132 OF THE ACT WAS COMMENCED IN THE CASE OF VENUS GROUP OF AHMEDABAD O N 10.03.2015. DOCUMENTS RELATED TO UNACCOUNTED CASH TRANSACTION OF THE VENUS GROUP WERE SEIZED ON THE PREMISES FROM TH E PREMISES TERRACE OF CRYSTAL ARCADE, C G ROAD, AHMEDABAD. THE BUILDING, TERRACE OF CRYSTAL ARCADE WAS CONSTRUCTED BY M/S. SUNDERDEEP BUILDERS (PROP.-RAJESH SUNDERDAS VASWANI) DURING F. Y. 2003-04. AFTER A DETAILED DISCUSSION, THE AO BROADLY OBSERVE D THAT THE DOCUMENTS WERE SEIZED AND ON THEIR CO-RELATION WITH BOOKS OF ACCOUNTS/BANK STATEMENT OF VENUS GROUP, IT WAS FOUN D (BY THE AO OF VENUS GROUP) THAT UNACCOUNTED CASH TRANSACTIONS OF VENUS GROUP WERE FIRST RECORDED ON CASH VOUCHERS AND THEN ON TH E BASIS OF SUCH RECORDING, THE ENTRIES WERE RECORDED ON A DAY CASH BOOK. AS ALSO OBSERVED, IT WAS NOTED BY THE AO OF THE VENUS GROUP THAT THE CASH ENTRIES IN SEIZED DOCUMENTS PERTAINS TO THE BENEFIC IARY, GANESH PLANTATION LTD. (ASSESSEE) FOR F.Y. 2010-11 (A.Y. 2 011-12). ON RECEIPT OF SUCH INFORMATION, THE AO OF THE ASSESSEE HEREIN CALLED FOR ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 5 - AND VERIFIED THE CASH RECORDS OF THE ASSESSEE FOR R ELEVANT YEAR VIS-- VIS INFORMATION SO RECEIVED. AFTER SUCH VERIFICATION, REASONS WERE RECORDED UNDER S.148(2) OF THE ACT AND APPROVAL THE REON WAS TAKEN UNDER S.151 OF THE ACT TO REOPEN THE COMPLETED ASSE SSMENT. 6.2 IN THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE OBJECTED TO THE ACTION TAKEN UNDER S.147 R.W.S. 148 OF THE ACT, WHICH WAS DISPOSED OF BY THE AO AGAINST THE ASSESSEE. ON MERITS, THE AO LISTED OUT VARIOUS DOCUMENTS SEIZED FROM THE TERRAC E OF CRYSTAL ARCADE AND BELONGING TO VASWANI FAMILY AND VENUS GR OUP AS CONFRONTED TO THE ASSESSEE AS PER PARA 7 OF REASSES SMENT ORDER. A STATEMENT DATED 07.08.2015 OF THE ORAL WITNESS MR. DEEPAK M. GAJJAR WHO WAS WRITER OF THE SEIZED MATERIAL AND US ED AGAINST THE ASSESSEE, WAS ALSO STATED TO BE PROVIDED TO ASSESSE E. IT WAS NOTED BY THE AO THAT IN THE COURSE OF CROSS EXAMINATION C ARRIED OUT ON BEHALF OF THE ASSESSEE, THE WITNESS MR. DEEPAK M. G AJJAR REITERATED HIS EARLIER STATEMENT UNDER S.131 OF THE ACT. MR. DEEPAK M. GAJJAR THUS RE-AFFIRMED THAT HE HAD WRITTEN THE CASH ENTRI ES IN THE SEIZED DOCUMENTS ON DIRECTIONS OF ASHOK VASWANI. THE ASSE SSEE DEMANDED FOR RECORDING OF STATEMENT OF VASWANI BROTHERS AND THEIR CROSS EXAMINATIONS BY THE ASSESSEE WHICH WAS DENIED ON TH E GROUND THAT WHERE THE REVENUE AUTHORITIES HAVE NOT PLACED RELIA NCE ON THE ORAL EVIDENCE OF VASWANI BROTHERS, THE ASSESSEE CANNOT S TRETCH ITS RIGHT TO CROSS EXAMINE ALL THESE PERSONS WHO NEVER MADE A NY EXAMINATION IN CHIEF IN THE FIRST PLACE. IT WAS ASSERTED BY TH E AO THAT COPIES OF ALL EVIDENCES COLLECTED FROM THE SEARCHED PERSON (V ENUS GROUP/VASWANI GROUP) WAS PROVIDED TO THE ASSESSEE A ND MR. DEEPAK M. GAJJAR, THE WRITER OF MAIN SEIZED DOCUMEN T (DAY CASH BOOK) HAS CONFIRMED IN CROSS EXAMINATION BY THE ASS ESSEE IN THIS PROCEEDING THAT HE HAD HAND WRITTEN THIS DOCUMENT O N REGULAR BASIS. THE AO FINALLY PROCEEDED AGAINST THE ASSESSEE ON TH E BASIS OF SEIZED ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 6 - MATERIALS STATED TO BE BELONGING TO VENUS GROUP ETC . AND HELD THAT ASSESSEE HAS PAID UNACCOUNTED CASH OF RS.4 CRORE IN AGGREGATE TO VENUS GROUP AND TAKEN ACCOMMODATION FROM VENUS GROU P THROUGH BANKING CHANNEL IN LIEU THEREOF. THE AO TABULATED A DECODED AMOUNT OF RS.4 CRORE IN AGGREGATE FROM THE ANNEXURE S/LOOSE PAPERS WRITTEN IN ENCRYPTED FORM FROM MATERIAL SEIZED AND HELD THAT TRANSFER OF AMOUNT THROUGH BANKING CHANNEL BY VENUS GROUP CONCERN TO ASSESSEE CONFIRMS THE TRANSACTION IN EXC HANGE OF CORRESPONDING CASH PAYMENT BY THE ASSESSEE. BASED ON SUCH FACTUAL ANALYSIS, THE AO INVOKED PROVISIONS OF SECTION 68 O F THE ACT AND HELD THAT CREDIT OF RS.4 CRORE RECEIVED BY THE ASSE SSEE THROUGH BANKING CHANNEL DURING F.Y. 2010-11 FROM M/S. SUNDE RDEEP BUILDERS LACKS IN BONAFIDE AND NATURE AND SOURCE OF SUCH CREDIT IN BOOKS IS UNSATISFACTORY. ACCORDINGLY, AN AMOUNT OF RS.4CRORE WAS ADDED TO THE INCOME PREVIOUSLY ASSESSED AND BROUGHT WITHIN THE AMBIT OF TAXATION IN THE REOPENED PROCEEDINGS UNDER CHALLENGE. 7. AGGRIEVED BY THE AFORESAID ADDITION MADE UNDER S .68 OF THE ACT BY THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 7.1 BEFORE THE CIT(A), THE ASSESSEE MADE TWO FOLD C HALLENGES (I) WRONGFUL ASSUMPTION OF JURISDICTION UNDER S.147 OF THE ACT AND (II) UNJUSTIFIED ADDITIONS ON FACTUAL MATRIX. 7.2 FOR CHALLENGE ON JURISDICTION, THE CIT(A) TOOK NOTE OF THE REASONS RECORDED AS WELL AS THE LEGAL OBJECTIONS. HOWEVER, THE CIT(A) FOUND SCARCE MERIT IN THE LEGAL CHALLENGE FO R INVOCATION OF JURISDICTION UNDER S.147 OF THE ACT. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 7 - 7.2.1 THE REASONS RECORDED BY THE AO FORMING THE BA SIS FOR REOPENING THE COMPLETED ASSESSMENT ARE REPRODUCED H EREUNDER FOR READY REFERENCE: AN INFORMATION WAS RECEIVED FROM ACIT, CC-1(1), AH MEDABAD ON 18.01.2017. 1. A SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED IN THE CASE OF VENUS. GROUP OF AHMEDABAD ON I0.03.2015 . ON THE TERRACE OF CRYSTAL ARCADE, C G ROAD, AHMEDABAD , WH ICH WAS ALSO COVERED U/S 132 OF THE INCOME TAX ACT, DOCUMEN TS RELATED TO UNACCOUNTED CASH TRANSACTIONS OF THE VENUS GROUP WERE SEIZED. THE ASSESSING OFFICER OF VENUS GROUP, ACIT-CENTRAL CIRCLE-1 (1), AHMEDABAD VIDE HIS LETTER DATED 16.01.2017 HAS INFORMED THAT ON ANALYSIS OF DOCUMENTS SEIZED AND THEIR CORR ELATION, IT WAS FOUND THAT UNACCOUNTED CASH TRANSACTIONS WERE F IRST RECORDED ON CASH VOUCHERS AND THEN ON THE BASIS OF RECORDING MADE ON THESE CASH VOUCHERS, THE ENTRIES WERE RECOR DED ON THE 'DAY CASH BOOK'. THE UNACCOUNTED CASH BOOK HAS TRAN SACTION RECORDED IN CONTINUOUS MANNER WITHOUT ANY GAP BETWE EN JANUARY 2007 & 07/03/2015. THE CONTINUITY OF RECORD ING OF UNACCOUNTED CASH TRANSACTION INDICATES THAT ENTRIES ARE MADE TO RECORD ALL UNACCOUNTED CASH TRANSACTIONS OF VENUS G ROUP AND VASWANI FAMILY MEMBERS. THE CASH BOOK IS WRITTEN IN CODED FROM FOR NAMES, AMOUNT, DATES AND ESTIMATES. THE SI GNATURE ON SEIZED UNACCOUNTED DAY CASH BOOK BY SHRI DEEPAK BUD HARMAL VASWANI/ASHOK SUNDERDAS VASWANI INDICATES THAT SUCH TRANSACTIONS ARE REGULAR & CONTINUOUS. 2. BASIC FEATURES OF UNACCOUNTED DAY CASH BOOK ARE AS UNDER: THE UNACCOUNTED DAILY CASH BOOK WAS FOUND AND SEIZE D SINCE 01.01.2007. THE CASH BOOK IS MAINTAINED IN A SYSTEMATIC MANNER ON DAILY BASIS. THE CASH ENTRIES ARE WRITTEN ON THE BASIS OF SUPPOR TING VOUCHERS. THERE' IS CODING OF DATES, AMOUNT AND OTHER DESCRI PTIONS IN THE UNACCOUNTED DAY CASH BOOK. ONCE THE ENTRIES ARE MADE IN DAILY CASH BOOK, THE CASH BOOK FOR A PARTICULAR MONTH WAS KEPT IN GREEN COLOR ENVE LOPES. THE PERIOD IS ALSO MENTIONED ON ENVELOPES THE SUPPORTING VOUCHERS ARE IN TWO DIFFERENT COLOU RS. THE GREEN COLOUR VOUCHERS INDICATE THE RECEIPT OF CASH AND PINK COLOUR VOUCHER INDICATES THE EXPENSES/PAYMENT. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 8 - THE SUPPORTING PINK/GREEN COLOUR VOUCHERS ARE ARRA NGED IF* THE SYSTEMATIC MANNER AS PER THE NATURE OF EXPENSES LIKE LAND/PERSON ETC. CASH VOUCHERS RELATED TO PERSON ARE ALSO KEPT IN GR EEN COLOUR ENVELOPES. THESE GREEN COLOUR ENVELOPES HAD NOTING AS PER THE NATURE. FOR EXAMPLE IF IT IS RELATED TO A IAND PROPERTY, TH EN LAND SURVEY NO. ALONGWITH THE BROKER NAME IS WRITTEN PN THE ENVELOPE. IN THIS MANNER, THE UNACCOUNTED CASH BOOK WAS FOUN D TO HAVE BEEN MAINTAINED IN A HIGHLY SYSTEMATIC FASHION . 3. ON ANALYSIS OF SEIZED EVIDENCES FOUND DURING THE SEARCH, IT HAS BEEN NOTICED THAT THE MAIN PERSONS OF THE GROUP ARE ENGAGED IN HUGE LAND DEALINGS. UPON CORRELATION OF CASH BOOKS/CASH VOUCHERS/DAY BOOKS WITH THE SALE DEEDS O F LAND TRANSACTIONS, IT HAS BEEN NOTICED THAT THERE IS HUG E TRANSACTION OF UNACCOUNTED CASH IN THESE LAND DEALI NGS. SUCH CASH TRANSACTION ARE RECORDED IN THE NAME OF D IFFERENT ENTITIES IN THE SEIZED CASH VOUCHERS. THE AMOUNT WH ICH IS LEGALLY PAID FOR THE PURCHASE/SALE OF THE LAND HAS BEEN PAID VIDE CHEQUE THROUGH BANK ACCOUNTS. THIS FIGURE IS S HOWN AS THE TOTAL CONSIDERATION OF DEALS IN THE REGISTERED SALES/PURCHASE DEED OF THE LANDS. ALSO, THE AMOUNT PAID THROUGH CHEQUE AND WHICH IS THE TOTAL CONSIDERATION OF LAND DEALING AS SHOWN IN SALES/PURCHASE DEEDS, IS ENTERE D WITH A NOTING AS ' AGAINST EC ' IN THE SEIZED PAPERS. 4. 'AGAINST EC' TRANSACTIONS : THE 'AGAINST EC TRANSACTIONS IN THE UNACCOUNTED DA Y CASH BOOK HAVE THEIR RELATION WITH THE RECEIPT AND PAYME NT OF EQUIVALENT AMOUNT OF RTGS IN THE BANK ACCOUNT. FOR E.G., IF THERE IS CASH- RECEIPT AGAINST EC, IT INDICATES THAT EQUIVALENT AMOUNT OF RTGS HAS BEEN PAID TO THE OTHE R PARTY THROUGH BANKING CHANNEL. 5. THESE ARE INDEPENDENTLY CORRELATED AND VERIFIED FROM VARIOUS SEIZED DOCUMENTS. IT HAS BEEN FOUND THAT TH ESE TRANSACTIONS ARE RELATED TO CASH TRANSACTION AND BA NK TRANSACTION FOR EXCHANGE OF CASH WITH RTGS/EC. AS P ER THE UNACCOUNTED CASH BOOK, SUMMARY SHEET AND CASH VOUCH ERS SEIZED FROM TERRACE OF CRYSTAL ARCADE C.G ROAD AHMEDABAD, IT HAS BEEN FOUND THAT THERE ARE ENTRIES WITH THE PARTICULARS AS 'AGAINST EC'. IT HAS BEEN FURTHER FO UND ON THE BASIS OF NOTING IN THE UNACCOUNTED CASH BOOK THAT 'AGAINST EC' ENTRIES HAVE BEEN WRITTEN WITH NAME OF SOME PERSON S/ ENTITIES/CONCERNS- ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 9 - 6. ON FURTHER ANALYSIS & CORRELATION OF INCRIMINATI NG SEIZED EVIDENCES RELATED TO 'AGAINST EC' . IT HAS BEEN FOUND THAT; I) THE 'AGAINST EC' ENTRIES HAVE ALSO BEEN RECORDED IN THE DAY CASH BOOK SEIZED FROM THE TERRACE OF CRYSTA L ARCADE, C. G. ROAD AHMEDABAD. II) THE ENTRIES/NOTING OF 'AGAINST EC' IN THE UNACCOUNTED DAY CASH BOOK PROVES THAT 'AGAINST EC' ENTRIES ARE ESSENTIALLY .CASH RECEIPT AND CASH PAYMENT ON PAYMENT/RECEIPT OF RTGS/CHEQUES IN THE BANK ACCOUNT. III) THE ENTRIES ARE REVERSED AS AND WHEN THE CASH IS RETURNED BACK TO THE VENUS GROUP AND THEREBY THE ACCOUNT IS SQUARED OFF IN MOST OF THE CASES. THIS C AN BE ILLUSTRATED ASUNDER; (A) IF CASH IS RECEIVED ON A PARTICULAR DATE, THE CORRESPONDING AMOUNT OF RTGS/EC HAS BEEN PAID BACK TO THE CONCERNED PARTY FROM THE BANK. (B) IN MOST OF THE CASES THE TRANSACTION ARE ROUT ED THROUGH THE BANK ACCOUNT OF SDB (SUNDERDEEP BUILDERS) AND GREEN STONE AGRO PRODUCTS & INFRASTRUCTURE PRIVATE LIMITED MAINTAINED IN INDIAN BANK/YES BANK. (C) ON VARIOUS VOUCHER THE NOTING HAVE BEEN RECORDED AS 'SDB'/ GREEN STONE. (D) LATER ON, AFTER ACQUISITION OF SANJEET MOTOR FINANCIAL PRIVATE LIMITED (SMFPL) SUCH TRANSACTIONS ARE ALSO ROUTED THROUGH IT 7. CORRELATION OF 'AGAINST EC' ENTRIES WITH SEIZED MATERIAL FROM 901 SAPPHIRE COMPLEX, C.G. ROAD AHMEDABAD IN T HE CASE OF VENUS GROUP ESTABLISHED THE FOLLOWING FACTS: (I) ASHOK S VASWANI IS MAIN PERSON OF VENUS GROUP W HO MANAGES THE FINANCE OF THE VENUS GROUP & VASWANI FA MILY MEMBERS. IT IS FROM THIS OFFICE PREMISE AT 901 5 SA PPHIRE COMPLEX, OPP; RATNAM, C G ROAD AHMEDABAD THAT ASHOK S VASWANI WAS DOING ALL FINANCE RELATED TRANSACTION. (II) SOME OF THE NAMES OF 'AGAINST EC' PARTIES/ENTI TIES ALONG WITH THE CONCERNED PERSON IN WHOSE NAME THE ' AGAINST EC' ARE NOTED IN THE SEIZED DOCUMENTS (UNACCOUNTED CASH BOOK, CASH VOUCHER) ARE ALSO FOUND IN THE SEIZED MA TERIAL FROM 901 SAPPHIRE COMPLEX, C. G. ROAD AHMEDABAD AND CORRELATE WITH EVIDENCES SEIZED FROM TERRACE OF CRY STAL ARCADE C.G. ROAD AHMEDABAD. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 10 - (III) IT HAS BEEN FOUND THAT THE NAMES MENTIONED ON THESE PAGES ARE ALSO MENTIONED ON THE OTHER SEIZED EVIDEN CES LIKE CASH VOUCHER, SUMMARY SHEET OF AGAINST EC TRANSACTI ONS (PAGE NUMBER 2 TO 9 OF ANNEXURE A-129, SEIZED FROM THE TERRACE OF CRYSTAL ARCADE) AND CASH BOOK RELATED TO 'AGAINST EC' TRANSACTIONS (IV) IT HAS BEEN FOUND THAT 'AGAINST EC' ENTRIES AR E THE CASH RECEIPT AND CASH PAYMENT TO VARIOUS PARTIES WH O ARE IN THE NEED OF RTGS/CASH. THE VENUS GROUP THROUGH; ITS CONCERNS LIKE SUNDERDEEP BUILDERS (SDB), SANJEET MO TOR FINANCE PRIVATE LIMITED (SMFPL) AND GREENSTONE AGRO - PRODUCTS & INFRASTRUCTURE PRIVATE LIMITED IS INVOLV ED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. 8. CORRELATION OF 'AGAINST EC' ENTRIES WITH BANK ACCOU NTS OF VENUS GROUP: EVERY TRANSACTION- OF NATURE 'AGAINST EC' WAS FIRST RECORDED ON SOME VOUCHER IN THE SIMILAR PATTERN AS FOR THE O THER CASH TRANSACTIONS LIKE GREEN COLOUR VOUCHER FOR CASH REC EIPT AND RED COLOUR VOUCHER FOR CASH PAYMENT. IT HAS BEEN FO UND FROM THE CORRELATION OF THE SEIZED MATERIAL THAT THE NAM E ON THE CASH VOUCHER IS OF KEY PERSON DOING THE CASH TRANSA CTION ON BEHALF OF THE ENTITIES/CONCERNS. ON BASIS OF NAME, DATE AND AMOUNT NOTED ON THE VOUCHERS, MANY BANK ENTRIES WER E CORRELATED, THAT CLEARLY ESTABLISHES THAT THE ENTRI ES RECORDED IN THE NAME OF 'AGAINST EC' IN THE CASH BOOK ARE CA SH RECEIPT/PAYMENT AGAINST PAYMENT/RECEIPT THROUGH RTGC/CHEQUE/OTHER BANKING CHANNEL. THE CORRELATION OF THE BANK ACCOUNT DISPLAYS THE REAL BENEFICIARIES OF THE CASH TRANSACTION. - 9. FROM THE CORRELATION OF THE BANK STATEMENTS AND THE TRANSACTIONS RECORDED IN THE SEIZED UNACCOUNTED CAS H BOOK AND SUPPORTING CASH VOUCHERS, VARIOUS BENEFICIARIES HAVE BEEN IDENTIFIED WHO HAVE TRANSACTED IN UNACCOUNTED CASH WHILE DEALING WITH THE ENTITIES OF VENUS GROUP. IT WAS FOUND THAT ASSESSEE HAS BEEN INVOLVED IN ACCOMMODATION EN TRY OF RS. 4,00,00.000 THROUGH THE VENUS GROUP IN FINANCIA L YEAR 2010-11. THE CASH VOUCHER ON SEIZED PAGE NO. 118 & 119 OF AN NEXURE A-129 SEIZED FROM TERRACE OF CRYSTAL ARCADE C.G. RO AD AHMEDABAD SHOWS THAT IT IS RELATED TO CASH ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 11 - ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 12 - ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 13 - SEEN THAT ASSESSEE IS ENGAGED IN REAL ESTATE & SHAR E TRADING. IT HAS FILED RETURN OF INCOME U/S 143 (1) DECLARING TOTAL INCOME OF RS.6,54,22,430/- ON 12/07/2042. THEREAFTER, T HE ASSESSMENT WAS COMPLETED U/S 143(3) WITH ASSESSED- INCOME OF RS.6,67,58,012/- ON 18/03/2014 WITH DISALLOWANCE U/S 14A OF RS.7,94,670/- ON EXEMPT INCOME FROM SHARE TRANSACTI ONS. FURTHER, ON VERIFICATION OF THE BALANCE SHEET & REC ORDS, IT IS REVEALED THAT ASSESSEE HAS ADVANCED HUGE UNSECURED LOAN TO J P FINCORP SERVICES PVT. LTD (NOW RENAMED AS AMBE TR ADECORP PVT.LTD.) OF RS. 72,40,00,000/- DURING THE F.Y. 201 0-11. J P FINCORP SERVICES PVT. LTD IS A GROUP CONCERN OF THE J P ISCON GROUP WHICH IS HEADED BY JAYESH KOTAK PRAVIN KOTAK, AMIT GUPTA & JATEEN GUPTA. DURING F.Y. 2010-1 1 (AY 2011 -12), JAYESH KOTAK , PRAVIN KOTAK, AMIT GUPTA & JATEEN GU PTA WERE DIRECTORS IN J P FINCORP SERVICES PVT LTD. IN FACT, JAYESH KOTAK HAS VERIFIED THE RETURN OF INCOME OF J P FINC ORP SERVICES PVT LTD FOR A Y20H- 12. FURTHER JAYESH KOTAK HAS ALSO TAKEN UNSECURED LOAN OF RS. 1 CRORE DURING F.Y. 2009-10 FROM ASSESSEE WHICH WAS R EPAID BY HIM DURING THE FY 2010-11 . 11. IT IS IMPORTANT TO NOTE HERE THAT A SEARCH HAD ATEA BEEN CONDUCTED ON J P ISCON GROUP ON 25/02/2017. DURING THE SEARCH, IT WAS GATHERED THAT DIRECTORS JAYESH KOTAK & PRAVIN KOTAK OPERATED THE BANK ACCOUNT OF J P FINCORP SERV ICES PVT LTD., WHICH IS A FINAL BENEFICIARY COMPANY OF J P I SCON GROUP FOR ACCOMMODATION ENTRIES TAKEN BY THE GROUP FROM B OGUS CONCERNS RUN BY SHRISH CHANDRAKANT SHAH, MUMBAI-BAS ED KNOWN ACCOMMODATION ENTRY PROVIDER. THE CASES OF JP ISOCN GROUP- RELATED TO SEARCH? OPERATION ARE ALSO ASSESS ED BY THIS OFFICE. HENCE, CONSIDERING THE ABOVE FACTS AND EVIDENCES, I BELIEVE THAT ASSESSEE HAS PAID UNACCOUNTED CASH RS.4,00,00. 000/- TO VENUS GROUP AND TAKEN ACCOMMODATION ENTRY FROM VENU S GROUP. THE RELATION OF THE VENUS GROUP AND J P ISCO N GROUP IS VERY WELL ESTABLISHED FROM ABOVE GIVEN FACTS WHICH AGAIN LEADS TO BELIEVE THAT ASSESSEE HAS FACILITATED ACCOMMODAT ION ENTRY OF RS. 4,00,00,000/- FURTHER TO JP ISCON GROUP. 12. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEV E THAT INCOME, IN THE FORM OF UNACCOUNTED CASH, OF RS.4,00,00,000/- HAS ESCAPED ASSESSMENT FOR F.Y. 20-10-11 I.E. A.Y. 2011 -12 IN THE HANDS OF ASSESSEE BY REASON OF THE FAILURE ON PART OF ASSESSEE TO DISCLOSE FULLY & TRULY ALL THE MATERIAL FACTS NE CESSARY FOR ITS ASSESSMENT IN THIS AY 2011-12. ACCORDINGLY, I T IS A FIT CASE FOR REOPENING U/S. 147 OF THE I.T. ACT & ISSUE OF NOTICE U/S 148 OF THE I.T. ACT 1961. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 14 - 7.3 IN THE BACKDROP OF FACTUAL MATRIX, THE LEGAL OB JECTION OF ASSUMPTION OF JURISDICTION UNDER S.147/S.148 OF THE ACT WAS DISPOSED OFF AGAINST THE ASSESSEE BY THE CIT(A). T HE RELEVANT OPERATIVE PARA IN THIS REGARD IS REPRODUCED HEREUND ER: 4.2. SUBMISSION OF THE APPELLANT AND ASSESSMENT OR DER HAS BEEN CAREFULLY CONSIDERED. THE AO IN PARA 5 ON PAGE 7 OF THE ASSESSMENT ORDER HAS REPRODUCED THE REASON RECORDED FOR REOPEN ING OF THE CASE U/S. 147 OF THE ACT FOR A.Y. 2011-12 BY STATING THA T AN INFORMATION WAS RECEIVED FROM THE ACIT, CENTRAL CIRCLE 1(1), AH MEDABAD, ON 18.01.2017 AND IN PARA 1, THE AO HAS STATED ABOUT T HE SEARCH U/S. 132 OF THE ACT CONDUCTED IN THE CASE OF VENUS GROUP ON 10.03.2015 AND THEREAFTER, IN THE REASON RECORDED, THE AO HAS REFERRED TO CERTAIN SEIZED LOOSE PAPER VOUCHERS FOUND AND SEIZE D IN THE SEARCH CASE OF VENUS GROUP FOR RECORDING OF THE REASON FOR REOPENING OF THE CASE U/S. 147 OF THE ACT AND FOR ISSUANCE OF NOTICE U/S. 148 OF THE ACT DATED 27.03.2017. THE APPELLANT COMPANY IN ITS SYNO PSIS OF ARGUMENTS HAS TAKEN A CONTENTION THAT PROVISIONS OF SECTION 153C(1) WHICH STARTS WITH ' I53C(1) NOTWITHSTANDING ANYTHIN G CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFI ED THAT,' . THEREFORE, AS PER THE WORD USED IN SECTION 153C(1) OF THE ACT, ONCE THE AO HAS RELIED UPON THE SEIZED MATERIAL LOOSE PA PER PAGES FOUND AND SEIZED IN THE SEARCH CASE OF VENUS GROUP, THE N OTICE ISSUED U/S. 148 AND PROCEEDINGS INITIATED U/S. 147 OF THE ACT I S ILLEGAL AND VOID AB INITIO. THE APPELLANT COMPANY FURTHER CONTENDED THAT PROVISIONS OF SECTION 153C WERE APPLICABLE FOR FRAMING ASSESSM ENT, IF ANY, WHICH EXCLUDES THE APPLICATION OF SECTION 147, HENC E, NOTICE ISSUED U/S. 148 OF THE ACT AND ASSESSMENT FRAMED IN FURTHE RANCE THERETO U/S. 147 READ WITH SECTION 143(3) OF THE ACT ARE VOID AB INITIO. IN SUPPORT OF THE AFORESAID CONTENTION, THE APPELLANT COMPANY RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI V. ASSTT. CIT [2007] 159 TAXMAN 258 (SC) AND FOLLOWING JUDICIAL PRONOUNCEMENTS OF VARIOUS INCOME -TAX APPELLATE TRIBUNALS AS UNDER:- I) G. KOTESWARARAOVS DCIT [2015] 64 TAXMANN.COM 159 (VISAKHAPATNAM - TRIB.) II) INCOME-TAX OFFICER V. ARUN KUMAR KAPOOR [2011] 16 TAXMANN.COM 373 (AMRITSAR) III) RAJAT SHUBRA CHATTERJI V. ACIT (ITA NO. 2430/ DEL/2015 DATED 20.05.2016) ITAT DELHI IV) STATE BANK OF INDIA V. DY CIT [2013] 22 ITR ( TRIB.) 609 V) JINDAL STAINLESS LTD. V. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 6, NEW DELHI [2009] 120 ITD 301 (DELHI) ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 15 - DURING THE COURSE OF APPEAL HEARING , THE AUTHORIZE D REPRESENTATIVE RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIO NAL GUJARAT HIGH COURT IN THE CASE OF CARGO CLEARING AGENCY (GUJARAT ) VS. JOINT COMMISSIONER OF INCOME-TAX [2008] 307 ITR 1 (GUJ) W HEREIN, IT HAS BEEN HELD THAT' WHEN ONE CONSIDERS THE ENTIRE SCHEM E RELATING TO THE PROCEDURE FOR REASSESSMENT AS LAID DOWN IN THE GROU P OF SECTIONS FROM SECTIONS 147 TO SECTION 153 OF THE INCOME-TAX ACT, 1961 AND COMPARES IT WITH THE SPECIAL PROCEDURE FOR ASSESSME NT OF OTHER PERSONS AS PER SECTION 153C R.W.S 153A OF THE ACT, NO JURISDICTION TO REOPENING AN ASSESSMENT WHILE RELYING ON THE SEIZED MATERIAL FOUND AND SEIZED IN THE CASE OF THIRD PARTY IN THE CASE O F APPELLANT IS PERMISSIBLE AS PER PROVISIONS OF THE INCOME-TAX ACT , 1961 WHILE ISSUING THE NOTICE U/S. 148 R.W.S. 147 OF THE ACT. THEREFORE, THERE IS A LACK OF JURISDICTION IN THE PRESENT CASE OF THE APP ELLANT AS THE AO HAS ISSUED THE NOTICE U/S 148 OF THE ACT BY RECORDING T HE REASON FOR REOPENING OF THE CASE U/S. 147 OF THE ACT BY RELYIN G UPON THE SEIZED MATERIAL FOUND AND SEIZED IN THE SEARCH CASE OF VEN US GROUP. THEREFORE, THE REOPENING OF THE CASE IN THE CASE OF THE APPELLANT COMPANY IS REQUIRED TO BE QUASHED ON THE GROUND OF LACK OF JURISDICTION. 4.3 THE SUBMISSION OF THE APPELLANT AND FACTS OF TH E CASE AS MENTIONED IN THE ASSESSMENT ORDER HAVE BEEN CAREFUL LY CONSIDERED. THE CASE LAWS CITED UPON BY THE APPELLANT ARE NOT R ELEVANT, AS THE FACTS OF THE APPELLANT'S CASE ARE NOT IDENTICAL TO THE FACTS OF THE CASE LAWS CITED UPON, THUS, THESE ARE NOT RELIED UPON. O N GOING THROUGH THE PROVISIONS CONTAINED U/S. 147 OF THE ACT, THERE IS NO BAR UPON ASSESSING OFFICER NOT TO USE INFORMATION/DETAILS FO UND DURING THE COURSE OF SEARCH. PROVISIONS U/S.153C ARE APPLICABL E ONLY IF THE EVIDENCE FOUND DURING THE COURSE OF SEARCH BELONG T O THE OTHER PERSON BUT PROVISIONS OF SECTION 147 ARE WIDER AND THE AO IS FREE TO USE THE EVIDENCE FOUND DURING THE COURSE OF SEARCH. HENCE, THIS GROUND OF APPEAL IS DISMISSED . 7.4 THE CIT(A), HOWEVER, FOUND CONSIDERABLE MERIT I N THE PLEA OF THE ASSESSEE FOR UNSUSTAINABILITY OF ADDITION OF RS .4CRORE ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT UNDER S. 68 OF THE ACT. THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CIT (A) IS REPRODUCED HEREUNDER: 6.2 SUBMISSION OF THE APPELLANT AND ASSESSMENT ORD ER HAS BEEN CAREFULLY CONSIDERED. THE AO IN THE ASSESSMENT ORDE R IN PARA 5 UNDER THE HEADING 'REASONS AND BASIS OF REOPENING O F THE CASE ' HAS REPRODUCED THE REASONS RECORDED FOR REOPENING OF TH E CASE U/S. 147 OF THE ACT IN THE CASE OF THE APPELLANT COMPANY. TH E AO HAS MAINLY RELIED UPON THE INFORMATION RECEIVED FROM THE ACIT, CENTRAL CIRCLE 1(1), AHMEDABAD VIDE HIS LETTER DATED 18.10.2017 AN D SEIZED LOOSE PAPER PAGES FOUND AND SEIZED IN THE SEARCH PROCEEDI NGS OF VENUS ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 16 - GROUP CASES. I N THE REASONS RECORDED, THE AO HAS M ADE AN ALLEGATION OF ACCOMMODATION ENTRY TRANSACTION AND H AS ALLEGED THAT THE APPELLANT COMPANY HAS MADE AN UNCOUNTED CASH PA YMENT OF RS. 4 CRORE AGAINST THE RECEIPT OF OUTSTANDING ADVANCE OF LOAN OF RS. 4 CRORE FROM M/S. SUNDERDEEP BUILDERS WHICH WAS THE A DVANCE GIVEN BY THE APPELLANT COMPANY TO M/S. SUNDERDEEP BUILDERS I N EARLIER YEARS, WHICH WAS OUTSTANDING AS PAYABLE ON THE 1ST DAY OF F.Y. 2010-11 RELEVANT TO A.Y. 2011-12 IN THE BOOKS OF ACCOUNTS O F M/S. SUNDERDEEP BUILDERS. THE AO IN THE ASSESSMENT ORDER HAS NOT ID ENTIFIED ANY OF THE STATEMENT OF MAIN PERSONS OF VENUS GROUP NAMELY SHRI ASHOK VASWANI, SHRI DEEPAK VASWANI AND SHRI RAJESH VASWAN I, PROPRIETOR SUNDERDEEP BUILDERS ABOUT THEIR ADMISSION THAT THE VENUS GROUP IS INDULGED INTO ANY ACCOMMODATION ENTRY TRANSACTION A ND NOTHING HAS BEEN BROUGHT ON RECORD AGAINST THE APPELLANT COMPAN Y EVEN FROM THE SUBMISSIONS MADE BY THE VENUS GROUP SEARCH CASE ASS ESSES IN THEIR SEARCH CASE ASSESSMENT PROCEEDINGS IN RESPECT OF SE IZED LOOSE PAPER PAGES RELIED UPON BY THE AO AGAINST THE APPELLANT C OMPANY IN THE REASON RECORDED FOR REOPENING OF THE CASE AND IN TH E REASSESSMENT PROCEEDINGS. THERE IS NO STATEMENT OF SHRI RAJESH VASWANI, ASHOK VASWANI AND SHRI DEEPAK VASWANI RECORDED U/S. 132(4 ) OF THE ACT AND U/S. 131 OF THE ACT IN RESPECT OF SCANNED COPIE S OF THE SEIZED LOOSE PAPER PAGES REPRODUCED BY THE AO IN THE ASSES SMENT ORDER. FROM PERUSAL OF THE SYNOPSIS OF ARGUMENTS SUBMITT ED BY THE APPELLANT COMPANY AND SUPPORTING DOCUMENTS AND EVID ENCES COMPILED IN THE PAPER BOOK, I HAVE VERIFIED THE LED GER ACCOUNT OF M/S. SUNDERDEEP BUILDERS FROM THE BOOKS OF ACCOUNT OF THE APPELLANT COMPANY COMPILED AT PAGE NO. 710 OF THE PAPER BOOK NO. ILL, THERE WAS AN OPENING DEBIT BALANCE OF M/S. SUNDERDEEP BUI LDERS ON 01.04.2008 FOR AN AMOUNT OF RS. 1 CRORE AND THEREAF TER ON 26.05.2008, THE APPELLANT COMPANY ADVANCED RS. 10 C RORE TO M/S. SUNDERDEEP BUILDERS IN F.Y. 2008-09 AND IN THE SAME FINANCIAL YEAR 2008-09, M/S. SUNDERDEEP BUILDERS HAS REPAID BACK T O THE APPELLANT COMPANY AN AMOUNT OF RS. 7 CRORE BETWEEN THE PERIOD 29.09.2008 TO 20.10.2008. THE APPELLANT COMPANY IN ITS SYNOPSIS O F ARGUMENTS HAS SUBMITTED THAT THE AO IN HIS REASON RECORDED FOR RE OPENING OF THE CASE IN PARA 5 OF THE ASSESSMENT ORDER, UNDER THE H EAD ' REASONS & BASIS OF REOPENING OF THE CASE', IN PARA (I) HAS S TATED THAT ' UNACCOUNTED CASH TRANSACTIONS WERE FIRST RECORDED O N CASH VOUCHERS AND THEN ON THE BASIS OF RECORDING MADE ON THESE CA SH VOUCHERS, THE ENTRIES WERE RECORDED ON THE ' DAY CASH BOOK'. THE UNACCOUNTED CASH BOOK HAS TRANSACTION RECORDED IN CONTINUOUS MANNER WITHOUT ANY GAP BETWEEN JANUARY 2007 & 07/03/2015'. HOWEVER, THE AO IN THE ASSESSMENT ORDER HAS NOT BROUGHT ON RECORD ANY SEIZ ED MATERIAL TO SUPPORT THE ALLEGATION OF ACCOMMODATION ENTRY TRANS ACTION FOR THE ADVANCE OF RS. 10 CRORE GIVEN BY THE APPELLANT COMP ANY TO M/S. SUNDERDEEP BUILDERS IN F.Y. 2008-09 AND REPAYMENT O F ADVANCE TAKEN BY M/S. SUNDERDEEP BUILDERS FOR AN AMOUNT OF RS. 7 CRORE IN F.Y. 2008-09. THE APPELLANT COMPANY EMPHATICALLY S UBMITTED THAT THE OUTSTANDING PAYABLE OF RS. 4 CRORE ON 31.03.2009 BY M/S. SUNDERDEEP BUILDERS WAS REPAID TO THE APPELLANT COM PANY ON 24.01.2011 BY ACCOUNT PAYEE CHEQUE DULY REFLECTED I N THE BANK ACCOUNT OF THE APPELLANT COMPANY AND THEREFORE, THE ALLEGATION OF ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 17 - ANY ACCOMMODATION ENTRY TRANSACTION AND ALLEGED CAS H PAYMENT BY THE APPELLANT COMPANY TO M/S. SUNDERDEEP BUILDERS F OR RECOVERING BACK THE ADVANCE OF RS. 4 CRORE FROM M/S. SUNDERDEE P BUILDERS DOES NOT ARISE AT ALL. THE APPELLANT COMPANY FURTHER TOO K A CONTENTION THAT THERE WAS NO SEARCH PROCEEDINGS IN THE CASE OF THE APPELLANT COMPANY AND CONSEQUENT TO THE SEARCH PROCEEDINGS IN THE CASE OF VENUS GROUP, THERE WAS NO CROSS ENQUIRY WITH THE AP PELLANT COMPANY IN RESPECT OF THE ALLEGED LOOSE PAPER VOUCHERS RELI ED UPON BY THE AO IN THE ASSESSMENT ORDER BY THE INVESTIGATION WING A ND THERE WAS NO CROSS ENQUIRY BY THE ASSESSING OFFICER OF THE VENUS GROUP CASES. THE APPELLANT COMPANY HAS SUBMITTED THAT THE AO HAS TAK EN A CONTRADICTORY STAND IN THE ASSESSMENT ORDER BY MAKI NG AN OBSERVATION ABOUT THE ALLEGED CASH OF RS. 4 CRORE B Y THE APPELLANT COMPANY IN LIEU OF CHEQUE PAYMENT AND SUBSEQUENTLY OF MAKING ALLEGATION OF CASH RECEIVED 'AGAINST EC' FROM JAYES H KOTAK FOR GANESH PLANTATION LTD. THE APPELLANT COMPANY HAS STATED THAT SHRI JAYESH KOTAK IS NEITHER A DIRECTOR OF GANESH PLANTA TIONS LTD OR A SHAREHOLDER OR AN EMPLOYEE OF APPELLANT COMPANY GAN ESH PLANTATIONS LTD. I HAVE ALSO VERIFIED THE SEIZED SCANNED COPY OF LOOSE PAPER PAGES REPRODUCED BY THE AO ON PAGE 32 OF THE ASSESSMENT ORDER, WHEREIN, NOTHING HAS BEEN FOUND T O BE NOTED AS THE WORD ' CASH ' AND THERE IS NO SIGNATURE OR NAME OF ANY DIRECTOR OF APPELLANT COMPANY GANESH PLANTATIONS LTD OR ANY EMPLOYEE OF GANESH PLANTATIONS LTD AND THE NAME WRITTEN IS JAYE SH KOTAK AND THE AO HAS NOT BROUGHT ON RECORD ANY EVIDENCE THAT SHRI JAYESH KOTAK IS A DIRECTOR OF GANESH PLANTATIONS LTD OR SH AREHOLDER OF GANESH PLANTATIONS LTD. THE FACTS OF APPELLANT COMPANY'S CASE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE C.B .I. VS. V.C. SHUKLA & OTHERS (CITED SUPRA) THAT LOOSE PAPER VOUC HERS / PAGES FOUND AND SEIZED FROM THIRD PARTY CANNOT BE CONSIDE RED AS AN EVIDENCE IN THE CASE OF THE APPELLANT COMPANY AND F OLLOWING THE DECISION OF THE HON'BLE ITAT IN THE CASE OF PRARTHNA CONSTRUCTION PVT.LTD, WHICH HAS BEEN UPHELD BY THE HON'BLE GUJARAT HIG H COURT (CITED SUPRA) I AM OF THE VIEW THAT THE ADDITION MA DE BY THE AO ON ACCOUNTED OF UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT OF RS. 4,00,00,000/- IS NOT JUSTIFIED. I ALSO AGREE WITH THE CONTENTION OF THE APPELLANT COMPANY THAT LOOSE PAPER PAGES FOUND AND SEIZED IN VENUS GROUP SEARCH CASES REQUIRED TO BE TREATED AS DUMB DOCUMENT FOR WHICH THE APPELLANT COMPANY RELIED UPON THE LAT EST DECISION OF THE HON'BLE ITAT, AHMEDABAD 'C' BENCH IN THE CASE O F NISHANT CONSTRUCTION PVT. LTD VS. ACIT, CIRCLE 5, AHMEDABAD , ITA NO. 1502/AHD/2015 (A.Y. 2011-12) DATED 14.02.2017, WH EREIN, THE HON'BLE TRIBUNAL IN PARA 25 TO 31 HAS HELD AS UNDER :- 25. COMING TO THE EVIDENTIARY VALUE OF THE IMPOUND ED LOOSE SHEET MENTIONED ELSEWHERE, THE HON'BLE SUPREME COUR T IN THE CASE OF COMMON CAUSE (A REGISTERED SOCIETY) AND OTH ERS VS. UNION OF INDIA AND OTHERS IN WRIT PETITION CIVIL AP PEAL NO. 505 OF 2015 HAS OBSERVED AS UNDER :- 16. WITH RESPECT TO THE KIND OF MATERIALS WHICH HAV E BEEN PLACED ON RECORD, THIS COURT IN V.C. SHUKLA'S CASE ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 18 - (SUPRA) HAS DEALT WITH THE MATTER THOUGH AT THE STA GE OF DISCHARGE WHEN INVESTIGATION HAD BEEN COMPLETED BUT SAME IS RELEVANT FOR THE PURPOSE OF DECISION OF THI S CASE ALSO. THIS COURT HAS CONSIDERED THE ENTRIES IN JAIN HAWALA DIARIES, NOTE BOOKS AND FILE CONTAINING LOOS E SHEETS OF PAPERS NOT IN THE FORM OF 'BOOKS OF ACCOU NTS' AND HAS HELD THAT SUCH ENTRIES IN LOOSE PAPERS/SHEE TS ARE IRRELEVANT AND NOT ADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT, AND THAT ONLY WHERE THE ENTRIES A RE IN THE BOOKS OF ACCOUNTS REGULARLY KEPT, DEPENDING ON THE NATURE OF OCCUPATION, THAT THOSE ARE ADMISSIBLE 17. IT HAS FURTHER BEEN LAID DOWN IN V.C. SHUKLA (SUPRA) AS TO THE VALUE OF ENTRIES IN THE BOOKS OF ACCOUNT, THAT SUCH STATEMENT SHALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABI LITY, EVEN IF THEY ARE RELEVANT AND ADMISSIBLE, AND THAT THEY ARE ONLY CORROBORATIVE EVIDENCE. IT HAS BEEN HELD E VEN THEN INDEPENDENT EVIDENCE IS NECESSARY AS TO TRUSTWORTHINESS OF THOSE ENTRIES WHICH IS A REQUIRE MENT TO FASTEN THE LIABILITY. 26. THE HON'BLE SUPREME COURT FURTHER OBSERVED :- 17. FROM A PLAIN READING OF THE SECTION IT IS MANIF EST THAT TO MAKE AN ENTRY RELEVANT THEREUNDER IT MUST B E SHOWN THAT IT HAS BEEN MADE IN A BOOK, THAT BOOK IS A BONK OF ACCOUNT AND THAT BOOK OF ACCOUNT HAS BEEN REGULARLY KEPT IN THE COURSE OF BUSINESS. FROM THE ABOVE SECTION IT IS ALSO MANIFEST THAT EVEN IF THE ABOVE REQUIREMENTS ARE FULFILLED AND THE ENTRY BECOMES ADMISSIBLE AS/ RELEVANT EVIDENCE, STILL, THE STATEM ENT MODE THEREIN SHALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABILITY. IT IS THUS SEEN T HAT WHILE THE FIRST PART OF THE SECTION SPEAKS OF THE RELEVANCY OF THE ENTRY AS EVIDENCE, THE SECOND PART SPEAKS, IN A NEGATIVE WAY, OF ITS EVIDENTIARY VALUE FOR CHARGING A PERSON WITH A LIABILITY. IT WILL, THEREF ORE, BE NECESSARY FOR US TO FIRST ASCERTAIN WHETHER THE ENT RIES IN THE DOCUMENTS, WITH WHICH WE ARE CONCERNED, FULFILL THE REQUIREMENTS OF THE ABOVE SECTION SO AS TO BE ADMIS SIBLE IN EVIDENCE AND IF THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE THEN ONLY ITS PROBATIVE VALUE NEED BE ASSESSED. 27. WITH RESPECT TO EVIDENTIARY VALUE OF REGULAR AC COUNT BOOK, THE HON'BLE SUPREME COURT IN THE CASE OF V.C. SHUKLA 1998 (3) SCC 410 HAS LAID DOWN :- ' 37. IN BENI V. BISAN DAYAL IT WAS OBSERVED THAT ENTRIES IN BOOKS OF ACCOUNT ARE NOT BY THEMSELVES SUFFICIENT TO CHARGE ANY PERSON WITH LIABILITY, THE REASON ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 19 - BEING THAT A MAN CANNOT BE ALLOWED TO MAKE EVIDENCE FOR HIMSELF BY WHAT HE CHOOSES TO WRITE IN HIS OWN BOOKS BEHIND THE BACK OF THE PARTIES. THERE MUST BE INDEPENDENT EVIDENCE OF THE TRANSACTION TO WHICH TH E ENTRIES RELATE AND IN ABSENCE OF SUCH EVIDENCE NO R ELIEF CAN BE GIVEN TO THE PARTY WHO RELIES UPON SUCH ENTR IES TO SUPPORT HIS CLAIM AGAINST ANOTHER. IN HIRA LAL V . RAM RAKHA THE HIGH COURT, WHILE NEGATIVING A CONTENTION THAT IT HAVING BEEN PROVED THAT THE BOOKS OF ACCOUN T WERE REGULARLY KEPT IN THE ORDINARY COURSE OF BUSIN ESS AND THAT, THEREFORE, ALL ENTRIES THEREIN SHOULD BE CONSIDERED TO BE RELEVANT AND TO HAVE BEEN PROVED, SAID, THAT THE RULE AS LAID DOWN IN SECTION 34 OF TIE ACT THAT ENTRIES IN THE BOOKS OF ACCOUNT REGULARLY KEPT IN T HE COURSE OF BUSINESS ARE RELEVANT WHENEVER THEY REFER TO A MATTER IN WHICH THE COURT HAS TO ENQUIRE WAS SUBJEC T TO THE SALIENT PROVISO THAT SUCH ENTRIES SHALL NOT ALO NE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LIABI LITY. IT IS NOT, THEREFORE, ENOUGH MERELY TO PROVE THAT T HE BOOKS HAVE BEEN REGULARLY KEPT IN THE COURSE OF BUS INESS AND THE ENTRIES THEREIN ARE CORRECT. IT IS FURTHER INCUMBENT UPON THE PERSON RELYING UPON THOSE ENTRIE S TO PROVE THAT THEY WERE IN ACCORDANCE WITH FACTS.' 28. IT IS APPARENT FROM THE AFORESAID DISCUSSION TH AT THE LOOSE SHEET OF PAPERS ARE WHOLLY IRRELEVANT AS EVID ENCE BEING NOT ADMISSIBLE U/S. 34 SO AS TO CONSTITUTE EVIDENCE WITH RESPECT TO THE TRANSACTIONS MENTIONED THEREIN BEING OF NO E VIDENTIARY VALUE. 29. MOREOVER, THE ASSESSING OFFICE DID NOT MAKE ANY INQUIRY FROM BUYERS OF FLAT IN RESPECT OF ACTUAL PRICES PAI D BY THEM. HE ALSO DID NOT MAKE ANY OTHER INQUIRY IN ORDER TO COR ROBORATE HIS CONCLUSION. THERE IS NO INCRIMINATING EVIDENCE TO SHOW THAT THE ASSESSEE HAS SOLD THE FLATS AT A HIGHER RA TE. 30. IN OUR UNDERSTANDING OF THE FACTS, THE IMPOUNDE D LOOSE SHEET CAN AT THE MOST BE TERMED AS 'DUMB DOCUMENT' WHICH DID NOT CONTAIN FULL DETAILS ABOUT THE DATES, AND ITS C ONTENTS WERE NOT CORROBORATED BY ANY MATERIAL AND-COULD NOT RELI ED UPON AND MADE THE BASIS OF ADDITION. 31. IN THE CASE OF CIT VS. KULWANT RAI 291 ITR 36 T HE RULING GIVEN IN THE CASE OF DHAKESWARI COTTON MILLS LTD. 2 6 ITR 775 BY THE HON'BLE SUPREME COURT HAS BEEN RELIED UPON W HEREIN THE HON'BLE SUPREME COURT HAS HELD ' EVEN THOUGH IN COME TAX AUTHORITIES INCLUDING THE ASSESSING OFFICER HAS UNF ETTERED DISCRETION AND NOT STRICTLY BOUND BY THE RULES AND PLEADINGS AS WELL AS MATERIALS ON RECORD AND IS LEGITIMATELY ENT ITLED TO ACT ON THE MATERIAL WHICH MAY NOT BE ACCEPTED AS EVIDEN CE, NEVERTHELESS SUCH DISCRETION DOES NOT ENTITLE THEM TO MAKE A ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 20 - PURE GUESS AND BASE AN ASSESSMENT ENTIRELY UPON IT WITHOUT REFERENCE TO ANY MATERIAL OR EVIDENCE AT ALL'. CONSIDERING THE DISCUSSION MADE HEREIN ABOVE AND FO LLOWING THE DECISIONS OF THE HON'BLE SUPREME COURT, JURISDICTIO NAL GUJARAT HIGH COURT AND HON'BLE ITAT, AHMEDABAD, (CITED SUPRA), I HOLD THAT THE ADDITION MADE BY THE AO AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT FOR AN AMOUNT OF RS. 4,00,00,000/- IS NOT JUSTI FIED AND THE SAME IS HEREBY DELETED. THIS GROUND OF APPEAL IS ALLOWED . 8. AGGRIEVED BY THE REVERSAL OF ADDITIONS MADE BY T HE AO UNDER S.68 OF THE ACT ON MERITS, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL IN ITA NO.2295/AHD/2018. 9. THE ASSESSEE IS ALSO IN CROSS APPEAL IN ITA NO.2 200/AHD/2018 WHEREBY THE VALIDITY OF JURISDICTION ASSUMED UNDER S.147 OF THE ACT HAS BEEN CHALLENGED. THE ASSESSEE HAS ALSO FILED C ROSS OBJECTION IN CO NO.146/AHD/2019 WHEREBY IT SUPPORTED THE ACTION OF THE CIT(A) IN DELETING THE ADDITIONS UNDER S.68 OF THE ACT ON MERITS. 10. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED DR FOR THE REVENUE SUBMITTED THAT WHILE THE CIT(A) WAS RIG HT IN ADJUDICATING THE JURISDICTION ASSUMED BY THE AO UND ER S.147 OF THE ACT IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESS EE, IT WAS ALLEGED THAT THE CIT(A) FELL IN GROSS ERROR IN NOT ENDORSING THE ACTION OF THE AO TOWARDS ADDITIONS UNDER S.68 OF TH E ACT ON MERITS. THE LEARNED DR RELIED UPON THE PROCESS OF REASONING ADOPTED BY THE CIT(A) FOR UPHOLDING THE ASSUMPTION OF JURISDICTION UNDER S.147 OF THE ACT. IT WAS POINTED OUT THAT THE AO HAS NOT ME RELY ACTED UPON A REPORT/INFORMATION OF INVESTIGATION WING OF SEARCHE D PERSON BUT HAS CONDUCTED APPROPRIATE ENQUIRIES ON HIS PART AS REGA RDS THE ALLEGATIONS AND ITS RELEVANCE TO THE FACTS AND THAT TOO AFTER HEARING THE ASSESSEE ON ALLEGATIONS. IT WAS SUBMITTED THAT IT IS ONLY AFTER ENQUIRIES MADE, THE ACTION UNDER S.147 OF THE ACT W ERE INITIATED AND THUS THE BELIEF FORMED BY AO ON THE MATERIAL OBTAIN ED FROM AO OF ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 21 - SEARCHED PERSON CANNOT BE REGARDED AS BORROWED SAT ISFACTION. IT WAS THUS CONTENDED THAT ISSUANCE OF NOTICE UNDER S. 147 OF THE ACT WAS AFTER PROPER APPLICATION OF MIND TO THE FACTS E XISTING IN THE INSTANT CASE. 11. AS REGARDS THE ADDITIONS ON MERITS, THE LEARNED DR RELIED UPON THE DETAILED FACTUAL ANALYSIS CARRIED OUT BY THE AO AND DETAILED OBSERVATIONS MADE BY THE AO IN ITS RE-ASSESSMENT OR DER. IN FURTHERANCE, IT WAS CONTENDED ON BEHALF OF THE REVE NUE THAT TELL-TALE EVIDENCES WERE FOUND FROM THE PREMISES OF THE SEARC HED PERSON I.E. VENUS GROUP. THE ENCRYPTED TRANSACTIONS IN UNACCOU NTED CASH RECORDED IN SEIZED DOCUMENTS WERE DECODED AND CO-RE LATED WITH THE TRANSACTIONS CARRIED OUT AND RECORDED BETWEEN THE V ENUS GROUP AND THE ASSESSEE. IT WAS ESTABLISHED BY THE AO AFTER D ETAILED DISCUSSION THAT THE ASSESSEE HAS PAID RS.4CRORE IN CASH (RS.1C RORE ON 27.01.2011 & RS.3 CRORE ON 25.01.2011) IN EXCHANGE OF CORRESPONDING RECEIPT OF RS.4 CRORE THROUGH BANK CH ANNEL FROM M/S. SUNDERDEEP BUILDERS ON 24.01.2011 IN SETTLEMENT OF OUTSTANDING RECEIVABLES OF THE ASSESSEE. THE CREDIT RECEIVED B Y THE ASSESSEE THROUGH BANKING CHANNEL AND RECORDED IN ITS BOOK WA S NOT FOUND GENUINE BY AO AS A RESULT OF UNDERHAND CASH DEALING . THE NATURE AND SOURCE OF CREDIT OF RS.4 CRORES SHOWN TO BE REC EIVED BY ASSESSEE FROM SUNDERDEEP BUILDERS WAS THUS RIGHTLY FOUND UNSATISFACTORY BY THE AO. IT WAS CONTENDED THAT TH E CIT(A) HAS ADJUDICATED THE ISSUE ON MERITS AGAINST REVENUE ON IRRELEVANT AND FLIMSY CONSIDERATIONS. THE LEARNED DR ACCORDINGLY URGED FOR REVERSAL OF THE ACTION OF THE CIT(A) AND RESTORATIO N OF THE ORDER OF THE AO ON MERITS. 12. IN SUPPORT OF ITS CROSS APPEAL IN ITA NO. 2200/ AHD/2018 AND IN REBUTTAL TO THE STAND TAKEN ON BEHALF OF THE REV ENUE ON THE POINT ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 22 - OF VALIDITY OF JURISDICTION ASSUMED UNDER S. 147 OF THE ACT, THE LEARNED COUNSEL FOR THE ASSESSEE MS. SHAH ADVERTED TO THE REASONS RECORDED AND CONTENDED THAT THE ACTION OF THE AO SU FFERS FROM THE VICE OF CHANGE OF OPINION ON THE EXISTING ISSUE WHI CH TANTAMOUNTS TO REVIEW OF THE EXISTING ACTION IN THE GARB OF SECTIO N 147 OF THE ACT WHICH IS NOT PERMISSIBLE IN LAW. A REFERENCE WAS M ADE TO THE NOTICE ISSUED UNDER S.142(1) OF THE ACT DATED 03.12.2013 I SSUED IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS UNDER S.1 43(3) OF THE ACT. QUESTION NOS. 8 & 9 THEREOF WERE ADVERTED IN THIS R EGARD WHEREIN SPECIFIC QUERY WAS MADE BY THE AO IN RESPECT OF ALL SUNDRY CREDITORS AND ALL ADVANCES MADE PARTY-WISE, IT WAS CONTENDED THAT THE ISSUE WAS EXAMINED TOWARDS THE TRANSACTIONS BETWEEN THE A SSESSEE AND THE VENUS GROUP WHICH IS SOUGHT TO BE REVIEWED BY WRONG LY EXERCISING JURISDICTION UNDER S.147 OF THE ACT. IT WAS CONTEN DED THAT THE MERE CHANGE OF OPINION CANNOT BE THE BASIS FOR REOPENING A COMPLETED STATEMENT IS A WELL SETTLED PRINCIPLE AS UNDERSTOOD IN LONG LINE OF JUDICIAL PRECEDENTS. IT WAS NEXT CONTENDED THAT ON PERUSAL OF REASONS RECORDED UNDER S.148(2) OF THE ACT, IT CAN BE SEEN THAT A SEARCH ACTION WAS CARRIED OUT UNDER S.132 OF THE AC T IN THE CASE OF VENUS GROUP OF AHMEDABAD ON 10.03.2015. IT IS POIN TED OUT IN THE REASONS RECORDED THAT A CASE AGAINST THE ASSESSEE H AS BEEN BUILT ON THE PREMISE THAT DOCUMENTS RELATING TO CERTAIN UNAC COUNTED CASH TRANSACTIONS BETWEEN ASSESSEE AND VENUS GROUP WERE FOUND FROM THE PREMISES OF THE SEARCHED PERSON, NAMELY, VENUS GROU P. IN THIS REGARD, IT WAS SUBMITTED THAT THE AO HAS RECORDED T HE REASONS FOR REOPENING OF THE CASE UNDER S.148 OF THE ACT MERELY ON THE BASIS OF INFORMATION AND DOCUMENTS RECEIVED FROM THE AO OF T HE SEARCHED PERSON. THE REASONS RECORDED WERE BASED ON BORROW ED SATISFACTION ALREADY DRAWN BY THE AO OF SEARCHED PERSON AND SUFF ERS FROM NON- APPLICATION OF MIND OF THE AO OF ASSESSEE. IT WAS S IMULTANEOUSLY CONTENDED IN THE ALTERNATIVE THAT IN THE FACTS AND CIRCUMSTANCES, ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 23 - WHERE THE SEIZED DOCUMENTS BELONG TO THE THIRD PART Y I.E. ASSESSEE, THE JURISDICTION OF THE AO, AT BEST, FALLS UNDER S. 153C OF THE ACT AND INVOCATION OF SECTION 147 OF THE ACT IN SUCH CIRCUM STANCES IS NOT PERMISSIBLE TO THE REVENUE UNDER THE SCHEME OF THE ACT. IT WAS THUS CONTENDED THAT THE ISSUANCE OF NOTICE UNDER S.148 R .W.S. 147 OF THE ACT IS A COMPLETE NON-STARTER AND IS THUS BAD IN LA W. 13. WE HAVE ALSO HEARD THE RIVAL SUBMISSIONS ON FAC TUAL ASPECTS TOWARDS MERITS OF ADDITIONS MADE. WE SHALL DEAL WI TH THE ARGUMENTS CANVASSED ON BEHALF OF THE REVENUE TO SUPPORT THE O RDER OF THE AO AND DEFENSE MADE ON BEHALF OF THE ASSESSEE OF THE C IT(A)S ORDER ON ASPECTS OF MERITS IN SUCCEEDING PARAGRAPHS. 14. TO BEGIN WITH, BEFORE WE PROCEED TO DEAL ON ASP ECTS OF MERITS, WE SHALL STRAIGHTWAY ADDRESS OURSELVES ON THE PRELI MINARY OBJECTS RAISED TOWARDS ASSUMPTION OF JURISDICTION. THE MAI N GRIEVANCES OF THE ASSESSEE ON ASSUMPTION OF JURISDICTION ARE THRE E FOLD; (I) THE JURISDICTION TO THE AO WOULD LIE UNDER S.153C OF TH E ACT, IF ANY AND INVOCATION OF JURISDICTION UNDER S.147 OF THE ACT I N THE CASE OF ASSESSEE, ARISING FROM SEARCH IN VENUS GROUP, IS C ONTRARY TO SCHEME OF THE ACT AND THUS DEVOID OF LEGITIMACY; (II) THE SATISFACTION OF THE AO ON THE REASONS CITED SUFFERS FROM THE VICE OF NO N-APPLICATION OF MIND AND A MERE BORROWED SATISFACTION; & (III) THE ACTION TAKEN UNDER S.147 OF THE ACT IS ACTUATED BY RE-VISITING A N OPINION ALREADY FORMED ON THE SUBJECT MATTER OF DISPUTE AT THE TIME OF ORIGINAL ASSESSMENT AND THUS VITIATED ON THE GROUNDS OF CHAN GE OF OPINION / REVIEW OF ASSESSMENT. 14.1 WE DO NOT SEE ANY SUBSTANCE IN THE LINE OF ARG UMENTS RAISED ON BEHALF OF THE ASSESSEE IN THESE OBJECTIONS FOR ASSU MPTION OF JURISDICTION. PRIOR TO AMENDMENT CARRIED OUT IN S. 153C APPLICABLE ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 24 - FROM 1 ST JUNE, 2015, THE JURISDICTION UNDER SECTION 153C OF THE ACT WOULD COME INTO PLAY IN THE CASE OF PERSON OTHER TH AN SEARCHED PERSON ONLY WHERE SEIZED DOCUMENTS IN THE HANDS OF PERSON SEARCHED/ COVERED UNDER S.132/132A OF THE ACT BELO NG TO SUCH OTHER PERSON (THE ASSESSEE HEREIN) AND THE AO OF TH E SEARCHED PERSON FORMS A REQUISITE SATISFACTION TOWARDS SEIZE D MATERIAL BELONGING TO AND INCRIMINATING SUCH OTHER PERSON OF UNDISCLOSED INCOME. LIKEWISE, THE AO OF THE THIRD PERSON SIMULT ANEOUSLY IS ALSO EXPECTED TO BE SATISFIED TOWARDS EXISTENCE OF JURIS DICTION UNDER S.153C OF THE ACT VESTED WITH HIM BASED ON SEIZED D OCUMENTS FOUND FROM THE COMMAND OF SEARCHED PERSON AS BELONGING TO THIRD PERSON. THE DEBATE ON SCOPE OF CONFERMENT OF POWERS UNDER S . 153C PRIOR TO ITS AMENDMENT BY FINANCE ACT, 2015 WAS SUBJECTED TO JUDICIAL SCRUTINY. THE COURTS HAVE CONSISTENTLY HELD THAT TH E EXPRESSION BELONGS TO WITH REFERENCE TO PERSON OTHER THAN SE ARCHED PERSON IMPLIES SOMETHING MORE THAN IDEA OF CASUAL ASSOCIAT ION AND SECTION 153C OF THE ACT COULD NOT BE INVOKED IN THE PRE AME NDMENT ERA UNLESS THE AO OF THE SEARCHED PERSON IS SATISFIED F OR COGENT REASON THAT THE SEIZED DOCUMENTS BELONG TO THE PERSON OTHE R THAN SEARCHED PERSON. IN THE INSTANT CASE, NO SUCH SATISFACTION PER SE IS FOUND TO HAVE BEEN FORMED BY THE AO OF THE SEARCHED PERSON( VENUS GROUP) AND IN THE ABSENCE OF SUCH EXPRESS SATISFACTION, TH E AO OF THE ASSESSEE WAS NOT VESTED WITH JURISDICTION TO EXERCI SE POWERS CONFERRED UNDER S.153C OF THE ACT. THE AO OF THE AS SESSEE WAS THUS OUSTED FROM EXERCISE OF JURISDICTION UNDER S. 153C. IN THE CIRCUMSTANCES, THE AO OF THE ASSESSEE HAS RIGHTLY R ESORTED TO S. 147 OF THE ACT ON FULFILLMENT OF STIPULATED CONDITIONS. THE LOOSE PAPERS SEIZED TOGETHER WITH CASH DIARY RECORDED BY/ FOR TH E SEARCHED PERSON ARE ADMITTEDLY NOT BELONGING TO THE ASSESSEE PER SE ALTHOUGH CERTAIN ENTRIES SHOWING THEREIN ARE CLAIMED TO BE PERTAININ G TO / RELATABLE TO THE ASSESSEE. NOTICEABLY, THE AO OF ASSESSEE HAS E XPLICITLY STATED IN ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 25 - PARA 4.2 AND PARA 9.4 OF THE IMPUGNED RE-ASSESSMENT ORDER THAT SEIZED MATERIAL BELONGS TO SEARCHED PERSON I.E. V ENUS GROUP. IN THE BACKDROP OF THESE FACTS, THE PLEA CANVASSED ON BEHALF OF THE ASSESSEE FOR AVAILABILITY OF JURISDICTION UNDER S.1 53C OF THE ACT IN SUPERSESSION TO SECTION 147 OF THE ACT DOES NOT MER IT ACCEPTANCE. 14.2 THE SECOND CONTENTION OF ASSESSEE TOWARDS BORR OWED SATISFACTION OF THE AO MERELY ON THE BASIS OF CERTA IN INFORMATION RECEIVED FROM OTHER AO IS ALSO APPARENTLY WITHOUT A NY FORCE. ON PERUSAL OF THE REASONS RECORDED FOR REOPENING OF TH E ASSESSMENT, IT BECOMES CRYSTAL CLEAR THAT CERTAIN SEIZED PAPERS WE RE FOUND FROM THE POSSESSION OF THE THIRD PARTY I.E. SEARCHED PERSON WHICH ALLEGED CERTAIN SURREPTITIOUS UNACCOUNTED CASH TRANSACTIONS BETWEEN THE ASSESSEE AND THE SEARCHED PERSON. THE AO HAS CLEAR LY INDICATED THAT THE SEIZED DOCUMENTS WERE DULY ANALYZED BY HIM. FUR THERMORE, FROM PARA 10 OF THE REASONS RECORDED, IT IS NOTICED THAT ON RECEIPT OF THE INFORMATION FROM THE AO OF THE SEARCHED PERSON, A P RE-VERIFICATION EXERCISE OF RECORDS OF THE ASSESSEE WAS ALSO CARRIE D OUT TO ASCERTAIN THE FACTS INDICATED IN THE SEIZED MATERIAL. IT IS O NLY AFTER VERIFICATION OF THE SEIZED DOCUMENTS QUA THE RECORDS OF THE ASSESSEE, THE ACTION WAS INITIATED UNDER S.147/ S. 148 OF THE ACT. THUS, THESE FACTS CLEARLY SUGGEST THAT THE AO EXERTED HIMSELF ON THE INFORMATION RECEIVED FROM THE AO OF SEARCHED PERSON AND FORMED HIS OWN AND INDEPENDENT PRIMA FACIE BELIEF ON PURPORTED ESCAPEMENT OF INCOME. IT IS NOTICED THAT THE AO HAS SET OUT THE FACTS IN GREAT LENGTH IN THE REASONS RECORDED WHICH OVERTLY INDICATE THE REQUISI TE APPLICATION OF MIND REASONABLY EXPECTED FROM AO AT THE STAGE OF CO MMENCEMENT ON PROCEEDINGS UNDER S.147 OF THE ACT. IN THE CIRC UMSTANCES, WHEN SEEN HOLISTICALLY, THE BELIEF OF THE AO IS CLEARLY AN INDEPENDENT BELIEF AND CANNOT BE LABELED AS A BORROWED SATISFAC TION OR A SATISFACTION WITHOUT ANY APPLICATION OF MIND. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 26 - 14.3 THE THIRD PLEA ASSAILING THE ACTION OF THE AO TAKEN UNDER S.147 OF THE ACT ON THE GROUNDS OF CHANGE OF OPINIO N IS APPARENTLY A DAMP SQUIB. AS SEEN IN THE INSTANT CASE, A SEARCH AND SURVEY WAS CONDUCTED AT THE PREMISES OF VENUS GROUP AND CERTAI N DOCUMENTS WERE SEIZED. THESE DOCUMENTS ALLEGED THAT CERTAIN CLANDESTINE TRANSACTIONS HAVE BEEN ENTERED BETWEEN THE ASSESSEE AND VENUS GROUP WHICH REMAINED UNRECORDED IN THE REGULAR BOOK S MAINTAINED BY BOTH THE PARTIES. SUCH SEIZED MATERIAL GATHERED IN THE COURSE OF SEARCH PROCEEDINGS SUBSEQUENT TO ORIGINAL ASSESSMEN T PROCEEDINGS ADDED AN ENTIRELY NEW DIMENSION TO THE SET OF TRANS ACTIONS TOWARDS CREDITS/ADVANCES RECORDED IN REGULAR BOOKS BY THE A SSESSEE AND SUBJECTED TO SCRUTINY EARLIER. THE FACTS REVEALED I N THE SEIZED DOCUMENTS/ STATEMENTS CLAIMING TO REVEAL UNTRUTHFUL NESS IN THE ENTRIES RECORDED BY AO IN REGULAR BOOKS DID NOT PR ESENT TO THE MIND OF THE AO IN THE COURSE OF ORIGINAL PROCEEDINGS. TH E AO SIMPLY COULD NOT BE EXPECTED TO PUT BLINKERS ON HIS EYES A ND IGNORE INFORMATION JUST FOR THE REASON THAT THE TRANSACTIO NS THROUGH BANKING CHANNEL AS RECORDED IN BOOKS WERE EARLIER SUBJECTED TO SCRUTINY. THE SEIZED MATERIAL WHEN SEEN IN CONJUNCTION WITH C ERTAIN TESTAMENTS MADE ON BEHALF OF THE SEARCHED PERSON AP PEARS TO BE A RELEVANT MATERIAL ON STANDALONE BASIS ON WHICH PRIMA FACIE BELIEF TOWARDS ESCAPEMENT OF INCOME IS COGNIZABLE. CONCLUS IVE PROOF OF ESCAPEMENT IS NOT GERMANE AT THE STAGE OF ASSUMPTIO N OF JURISDICTION UNDER S.147 OF THE ACT. AT THE STAGE OF ASSUMPTION OF JURISDICTION, FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. TH E MATERIAL AT THE STAGE OF REOPENING ONLY NEED TO BE RELEVANT TO INVO KE PRIMA FACIE BELIEF OF ESCAPEMENT IN THE MIND OF PERSON INSTRUCT ED UNDER LAW. IT IS WELL SETTLED THAT THE INFORMATION SO RECEIVED NE ED NOT BE SUBJECTED TO SUFFICIENCY TEST AT THE STAGE OF INVOK ING JURISDICTION UNDER S.147 OF THE ACT. WHETHER THE MATERIAL SO GAT HERED WOULD CONCLUSIVELY PROVE THE ESCAPEMENT IS NOT CONCERNED AT THE STAGE OF ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 27 - ASSUMING JURISDICTION UNDER S.147 OF THE ACT. WHAT IS PARAMOUNT IS THE RELEVANCY OF THE MATERIAL COLLECTED. A REFERENC E IN THIS REGARD CAN BE MADE TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS. ITO (1999) 236 ITR 3 4 (SC) AND DR. LATA CHOUHAN VS. ITO, (2010) 329 ITR 400 (MP). THE FRESH INFORMATION RECD. BY THE AO IS AUTHENTIC AND EVOKES CERTAIN DISQUIET. CERTAIN ELEMENT OF SUBJECTIVITY INVOLVED IN FORMATION OF BELIEF THUS CANNOT OVERSTRETCHED AT THE THRESHOLD S TAGE. HENCE, THE PLEA OF THE ASSESSEE THAT THE FINALITY OF ASSESSMEN T EARLIER MADE UNDER S.143(3) OF THE ACT CANNOT BE DISTURBED IS TO TALLY MISPLACED IN THE WAKE OF NEW FACTS COMING TO THE LIGHT OF THE AO AT THE TIME OF INVOKING JURISDICTION. 14.4 HENCE, THE OBJECTION OF THE ASSESSEE CANVASSED ON POINT OF JURISDICTION FAILS ON ALL COUNTS. THUS, WE SEE NO ERROR IN THE ACTION OF THE CIT(A) IN UPHOLDING THE JURISDICTION. CONSE QUENTLY, THE CROSS APPEAL OF THE ASSESSEE IN ITA NO.2200/AHD/201 8 CHALLENGING THE VALIDITY OF ASSUMPTION OF JURISDICTION UNDER S. 147 OF THE ACT IS DISMISSED. 15. WE SHALL NOW MOVE TO ADDRESS THE CHALLENGE TO T HE ADDITIONS TOWARDS ALLEGED UNEXPLAINED CASH CREDIT UNDER S.68 OF THE ACT ON MERITS. AS NARRATED EARLIER, THE AO HAS MADE ADDIT IONS OF RS.4 CRORE TO THE TOTAL INCOME OF THE ASSESSEE HEREIN TA KING SHELTER OF S.68 OF THE ACT HAVING REGARD TO THE SEIZED MATERIA L FOUND FROM THE POSSESSION OF THE SEARCHED PERSON(VENUS GROUP CASES ). IT WAS OBSERVED THAT CERTAIN INCRIMINATING MATERIAL WERE F OUND AND SEIZED FROM THE SEARCHED PERSON IMPLICATING THE ASSESSEE T OWARDS UNDISCLOSED INCOME. IN THE SEIZED MATERIAL FORWARDE D TO THE AO OF THE ASSESSEE BY THE AO OF THE SEARCHED PERSON, IT I S ALLEGED THAT THE AMOUNTS WERE SURREPTITIOUSLY RECORDED IN ENCRYPTED FORM WHICH WAS ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 28 - DECODED BY THE REVENUE AND SOUGHT TO BE CO-RELATED WITH THE CORRESPONDING BANK TRANSACTIONS BETWEEN THE SEARCHE D PERSON AND ASSESSEE. ON THE BASIS OF SUCH DOCUMENTS/ LOSSE PAP ERS/ STATEMENTS ETC, IT WAS ALLEGED BY THE AO THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 4 CRORE FROM SUNDERDEEP BUILDERS OF V ENUS GROUP TOWARDS THROUGH BANKING CHANNEL IN JAN 2011 AGAINST THE CORRESPONDING PAYMENT OF UNACCOUNTED CASH BY THE AS SESSEE TO SUNDERDEEP BUILDERS. THE AO HAS THUS TIED THE LOOSE PAPERS/ CASH DIARY FOUND FROM THE POSSESSION OF THE SEARCHED PER SON TO THE ASSESSEE AND INVOKED SECTION 68 OF THE ACT IN THIS REGARD. 15.1 THE ASSESSEE HAS CATEGORICALLY DENIED ALLEGATI ON OF CASH REIMBURSEMENT TO M/S. SUNDERDEEP BUILDERS (PROP.-RA JESH SUNDERDAS VASWANI) AGAINST THE RECEIPT THROUGH BANK ING CHANNEL AND ALSO DENIED THE ALLEGATIONS OF AN ALLEGED ACCOM MODATION ENTRY. MAKING REFERENCE TO THE ELABORATE SUBMISSIONS MADE BY THE ASSESSEE COMPANY IN ITS DEFENSE BEFORE THE AO AND CIT(A), IT IS THE CASE OF THE ASSESSEE THAT THE AO HAS NOT BROUGHT ANY COGENT MATERIAL OR CREDIBLE EVIDENCE ON RECORD TO SUPPORT THE PROPRIET Y OF SEIZED MATERIAL AGAINST THE ASSESSEE. IT IS CONTENDED THAT THE SEIZED MATERIAL DOES NOT EVEN MAKE ANY REFERENCE TO THE AS SESSEE HEREIN. THE LINK BETWEEN THE MATERIAL SEIZED AND ASSESSEE I S MISSING AND THUS ACTION AGAINST ASSESSEE HAS BEEN INITIATED IN FLIMSY GROUNDS. IT IS ALLEGED ON BEHALF OF THE ASSESSEE THAT WHOLE CAS E HAS BUILT AGAINST THE ASSESSEE ON ASSUMPTIONS AND PRESUMPTIONS. 15.2 ON PERUSAL OF THE CASE RECORDS, WE NOTICE THAT CERTAIN UNACCOUNTED CASH TRANSACTIONS OF VENUS GROUP WERE D ETECTED FROM THE PREMISES OF THE SEARCHED PERSON. THE UNACCOUNT ED CASH TRANSACTIONS WERE STATED TO BE FIRST RECORDED BY TH E SEARCHED PERSON ON LOOSE PAPER/ CASH VOUCHERS IN ENCRYPTED FORM AN D THEN ON THE ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 29 - BASIS OF RECORDING MADE ON THESE CASH VOUCHERS, THE ENTRIES WERE RECORDED ON A DAY CASH BOOK NOT FORMING PART OF T HE REGULAR BOOKS OF ACCOUNTS MAINTAINED IN ORDINARY COURSE. NOTABLY, THE AFORESAID UNACCOUNTED CASH BOOK WERE FOUND TO HAVE TRANSACTIO N RECORDED IN CONTINUOUS MANNER WITHOUT ANY GAP BETWEEN JANUARY 2 007 TO 07.03.2015. THE CASH BOOK WAS ALSO WRITTEN IN CODED FORMS FOR NAMES, AMOUNTS, DATES AND VOUCHERS AND WERE CLAIMED TO BE HEADLINED AS ESTIMATES. THE REVENUE HAS CONTENDED THAT SUCH CODING WAS DONE TO ALIBI AND CAMOUFLAGE THE REAL VA LUE OF UNACCOUNTED CASH TRANSACTIONS WITH THE ASSESSEE AND TO TAKE A SUITABLE DEFENSE IN THE CASE OF DISCOVERY BY THE RE VENUE AUTHORITIES. AS FURTHER CLAIMED, THE TRANSACTIONS WERE DECODED B Y THE REVENUE AUTHORITIES AND IT WAS FOUND THAT A SUM OF RS.4 CRO RE IN AGGREGATE WAS PAID IN CASH BY ASSESSEE TO VENUS GROUP IN LIEU OF CORRESPONDING RECEIPT OF EQUIVALENT AMOUNT OF PAYME NT THROUGH BANKING CHANNEL AND THUS SUCH PAYMENT RECEIVED THRO UGH BANKING CHANNEL IS NOTHING BUT AN ACCOMMODATION ENTRY, WHIC H WAS RECORDED IN THE BOOKS OF THE ASSESSEE ON 24.01.2011. IN SHO RT, ON THE BASIS OF LOOSE PAPERS/ CASH BOOK SEIZED FROM VENUS GROUP, TH E AO HAS ALLEGED THAT AFORESAID RECEIPT OF RS.4 CRORE FROM M /S. SUNDERDEEP BUILDERS IS A SHAM TRANSACTION AND AN ACCOMMODATION ENTRY AGAINST PAYMENT OF UNACCOUNTED INCOME. 15.3 IN THE BACKDROP OF FACTS SET OUT BY AO, WE NOT ICE THAT THE ALLEGATION OF ALLEGED ACCOMMODATION ENTRY OF RECEIP T/REPAYMENT OF EXISTING LOANS RECEIVABLE BY ASSESSEE FROM M/S. SUN DERDEEP BUILDERS IS LARGELY CENTERED AROUND A STATEMENT REC ORDED UNDER S.131 OF THE ACT OF ACCOUNTANT, DEEPAK M. GAJJAR OF VENUS GROUP IN WHICH HE HAS MERELY DEPOSED THAT THE UNACCOUNTED CA SH BOOKS WERE WRITTEN BY HIM AS PER THE DIRECTION OF ASHOK SUNDER DAS VASWANI AND SUCH DAY CASH BOOK WAS HANDED OVER TO ONE VASIBHAI AT CRYSTAL ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 30 - ARCHADE AS PER DIRECTIONS OF ASHOK SUNDERDAS VASWAN I/VENUS GROUP. THE SIGNATURES ON THE UNACCOUNTED DAY CASH B OOK WERE STATED TO BE PUT BY SHRI DEEPAK BUDHARMAL VASWANI A ND / OR ASHOK SUNDERDAS VASWANI OF VENUS GROUP. THE DOCUMENTS SE IZED WERE EVENTUALLY LINKED BY AO TO THE ASSESSEE READ WITH T HE STATEMENT OF MR. GAJJAR AND THE IMPUGNED ADDITIONS WERE CARRIED OUT. SIGNIFICANTLY, THE STATEMENT OF MR. GAJJAR (WHO IS ACTING ON BEHALF OF VASWANI BROTHERS) DOESNT ANYWHERE APPEAR TO SAY THAT HE IS PRIVY TO THE SOURCE OF CASH RECORDED BY HIM IN CASH BOOK. HE HAS SIMPLY CLAIMED TO HAVE MERELY RECORDED THE ENTRIES IN AN UNACCOUNTED CASH BOOK UNDER THE INSTRUCTION DIRECTI ONS OF VASWANI BROTHERS. THUS, THE STATEMENT OF A WITNESS WHO HAS NO KNOWLEDGE OF RELEVANT FACTS TOWARDS RECEIPT OF CASH FROM ASSESSE E IS NOT ENTITLED TO ANY WEIGHT AND IS NOT PERTINENT IN SO FAR AS ASS ESSEE IS CONCERNED. INEXPLICABLY, WHILE IMPLICATING A THIRD PARTY WITH GRAVE CHARGES, NO ENQUIRY HAS BEEN MADE BY AO FROM KEY PERSONS I.E. V ASWANI BROTHERS TO ELICIT ANY CREDIBLE INFORMATION, DESPIT E SPECIFIC REQUEST & SUGGESTION FROM THE ASSESSEE AS RECORDED IN PARA 8.3 OF THE ASSESSMENT ORDER. IN THE ABSENCE OF ANY EXAMINATION OF THE KEY PERSONS, THE CONTEST BY WAY OF CROSS EXAMINATION TH EREON BY ASSESSEE WAS ALSO STONEWALLED. THE UNILATERAL ENTRI ES MADE BY VENUS GROUP (AN OUTSIDE PARTY) IN THEIR RECORDS AND ADMIT TEDLY BELONGING TO THEM (PARA 4.2 & PARA 9.4 OF THE ASSESSMENT ORDE R) CANNOT, IN OUR VIEW, HAS ANY RATIONAL BASIS TO CRUCIFY A THIRD PAR TY AND FIX TAX LIABILITY ON IT. NO LIVE LINK/PROXIMATE NEXUS OF AL LEGED DUBIOUS TRANSACTIONS BETWEEN SEARCHED PERSON AND THE ASSESS EE HAS BEEN BROUGHT ON RECORD. THE ENQUIRIES MADE WERE DIRECTIO NLESS WITHOUT QUIZZING THE KEY PERSONS WHO NEEDED TO BE. NOTHING OF THIS SORT HAS BEEN DONE. NO ACQUIESCENCE OF RECEIPT OF CASH BY SE ARCHED PERSON FROM ASSESSEE HAS BEEN SUCCESSFULLY ESTABLISHED. N ATURALLY, PROPRIETY DEMANDED THE CROSS EXAMINATION THEREON IN THE EVENT ANY ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 31 - CULPABLE STATEMENT ROPING THE ASSESSEE SOMEWHERE. T HE AO HAS CONVENIENTLY IMPLICATED THE ASSESSEE WITHOUT ANY CO GENT PREMISE ON THE BASIS OF SOME AIMLESS EXAMINATIONS. 15.4 NO DOUBT, THE DOCUMENTS FOUND POSSESSED FROM T HE CUSTODY OF A SEARCHED PERSON MAY POSSIBLY OPERATE AS AN ESTOPP EL AGAINST THAT SEARCHED PERSON, IF THE CIRCUMSTANCES SO WARRANT, B UT IT IS UNCONCEIVABLE TO BIND A THIRD PARTY FOR SUCH ENTRIE S/DIARY WITHOUT DEMONSTRATING COGENT NEXUS. THE WHOLE ACTION IS IN THE REALM OF CONJECTURES AND SURMISES MAINLY ON THE BASIS OF SOM E SCANTY AND SKETCHY STATEMENT YIELDED FROM THE ACCOUNTANT OF TH E SEARCHED PERSON. THE REVENUE HAS ALLEGED UNDERHAND CASH TRAN SACTIONS. HENCE, THE PRIMARY ONUS IN THE INSTANT CASE, SQUARE LY LIED UPON THE REVENUE AND THAT TO JUSTIFY IT WITH DIRECT OR CIRCU MSTANTIAL EVIDENCES. THE ONUS RESTED UPON THE REVENUE HAS NO T BEEN DISCHARGED AT ALL AND THUS DID NOT SHIFT ON TO ASSE SSEE. CONSEQUENTLY, IN THE ABSENCE OF ANY CREDIBLE PROOF OF RECEIPT OF CASH FROM ASSESSEE, THE APPARENT HAS TO BE TAKEN AS REAL I.E. SUNDERDEEP BUILDERS HAVE REPAID RS.4 CRORE THROUGH BANKING CHANNEL IN DISCHARGE OF ITS EXISTING OUTSTANDING LI ABILITY AS A MATTER OF COURSE. THE CIT(A) HAS CORRECTLY APPRECIATED THE FACTS AND CIRCUMSTANCES IN ITS ENTIRETY AND HAS COME TO A RIG HTFUL CONCLUSION IN THIS REGARD AND THUS EXONERATING THE ASSESSEE FR OM UNVOUCHED AND UNSUPPORTED TAX LIABILITY. THE CIT(A) HAS RIGHTLY OBSERVED THAT THE ALLEGATION OF ACCOMMODATION ENTRY IS NOT SUSTAINABL E BY APPRECIATING THE FACT THAT DURING THE F.Y. 2008-09 RELEVANT TO AY 2009-10, THERE WAS OPENING RECEIVABLE BY THE ASSESS EE FROM M/S. SUNDERDEEP BUILDERS (PROP.-RAJESH SUNDERDAS VASWANI ) PEGGED AT RS.1 CRORE WHICH WAS GIVEN AS A LOAN / ADVANCES BY THE ASSESSEE COMPANY THROUGH REGULAR BOOKS OF ACCOUNTS PRIOR TO F.Y. 2008-09. INTERESTINGLY, THE ASSESSEE COMPANY DURING F.Y. 200 8-09 HAD GIVEN ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 32 - ANOTHER TEMPORARY LOAN/ ADVANCES AGGREGATING TO RS. 10 CRORE IN THE MONTH OF MAY 2008 AND AGAINST WHICH IN THE SAME YEA R, THE SAID BORROWER (SUNDERDEEP BUILDERS) REPAID BACK THE TEMP ORARY LOAN PARTLY TO THE ASSESSEE COMPANY AGGREGATING TO RS.7 CRORE. RESULTANTLY, A BALANCE OF RS.4 CRORE REMAINED OUTST ANDING AS RECEIVABLE BY THE ASSESSEE AS ON 31.03.2009 ( FY 20 08-09). TO SUMMARISE, A LOAN OF RS.7 CRORE WAS SQUARED OFF BY THE BORROWER BY WAY OF REPAYMENT IN F.Y. 2008-09. WHEN SEEN IN CONJ UNCTION WITH THE SO CALLED UNACCOUNTED DAY CASH BOOK WHEREIN UNA CCOUNTED CASH TRANSACTIONS ALLEGEDLY RECORDED CONTINUOUSLY SPANNI NG OVER JAN. 2007 TO MARCH 2015, NO REFERENCE HAS BEEN FOUND TO BE MADE IN RESPECT ANY UNDERHAND DEALING OF CASH IN EXCHANGE O F SQUARE OFF OF RS. 7 CRORES. THIS FACT ALSO OVERSHADOWS THE ALLEGA TION OF THE REVENUE AND CASTS SERIOUS DOUBT ON THE TACIT INVOLV EMENT OF CASH AS A QUID PRO QUO AGAINST BANKING TRANSACTIONS QUA THE ASSESSEE. HENCE, A NORMAL INFERENCE THAT REMAINING OUTSTANDIN G AMOUNT OF RS.4 CRORE PAID BACK TO ASSESSEE BY BORROWER THROUG H BANKING CHANNEL WITHOUT CORRESPONDING RECEIPT OF CASH, HAS TO BE GIVEN PRIMACY AND CANNOT BE DISTURBED. 15.5 IN THE CIRCUMSTANCES, ON HOLISTIC APPRECIATION OF FACTUAL POSITION, WE SEE NO ERROR IN THE CONCLUSION DRAWN B Y THE CIT(A). THE CIT(A), IN OUR VIEW, HAS RIGHTFULLY DELETED THE ADDITION MADE UNDER S.68 OF THE ACT HOLDING THE ACT OF AO TO BE W ITHOUT ANY RATIONAL BASIS AND THUS UNSUSTAINABLE IN LAW. WE E NTIRELY AGREE WITH THE CONCLUSION DRAWN BY THE CIT(A) ON THE ASPECTS O F THE MERITS AND HENCE, WE DECLINE TO INTERFERE THEREWITH. 16. IN THE RESULT, APPEAL OF THE REVENUE AS WELL AS CROSS APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 2295/AHD/18 WITH CO NO.146/AHD/19 & ITA NO.2200/AHD/18 (GANESH PLANTATION LTD.) A.Y. 2011 -12 - 33 - 17. IN THE CROSS OBJECTION FILED BY THE ASSESSEE AG AINST THE REVENUES APPEAL, THE ASSESSEE HAS MERELY SUPPORTED THE ACTION OF THE CIT(A) WHEREBY THE ADDITIONS OF RS.4 CRORE MADE BY THE AO AS UNEXPLAINED CASH CREDIT UNDER S.68 OF THE ACT STAND S DELETED BY THE CIT(A). IN THE ABSENCE OF ANY GRIEVANCE ARISING OUT OF THE ORDER OF CIT(A), THE CROSS OBJECTION IS DISMISSED AS INFRUCT UOUS. 18. IN THE RESULT, BOTH APPEALS OF REVENUE & ASSESS EE AND CROSS OBJECTION OF ASSESSEE ALL ARE DISMISSED. SD/- SD/- (RAJPAL YADAV) (PRADIP KUMA R KEDIA) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD: DATED 13/04/2021 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED ON 13/04/2021