MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LTD, MUMBAI V. ACIT, CC -8(2), MUMBAI

ITA 2938/MUM/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6176 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 15-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Unexplained expenditure; Loose papers; Document seized; Corroborative evidences; Condonation of delay; Documents seized; Set aside
• Section: 143(3); 142(1); 133A; 153A; 201; 274; 207; 13; 22; 153C; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAMLAL NEGI, JUDICIAL MEMBER ITA NOS.2938, 2939, 2940 & 2941/M/2015 ASSESSMENT YEARS: 2005-06, 2006-07, 2007-08 & 2011- 12 M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LTD., 5, AGNELO, 1 ST FLOOR, KHANDESWARI MARG, NEAR MOUNT MARY STEPS, BANDRA WEST, MUMBAI 400 050 PAN: AACCM7659J VS. ASSISTANT COMMISSIONER OF INCOME TAX- 8(2), (ERSTWHILE CENTRAL CIRCLE- 47) 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ITA NOS.3208, 3209 & 3210/M/2015 ASSESSMENT YEARS: 2009-10, 2010-11 & 2011-12 ASSISTANT COMMISSIONER OF INCOME TAX- 8(2), (ERSTWHILE CENTRAL CIRCLE- 47) 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. MATRIX INDIA ENTERTAINMENT CONSULTANT PVT. LTD., 5, AGNELO, 1 ST FLOOR, KHANDESWARI MARG, NEAR MOUNT MARY STEPS, BANDRA (W), MUMBAI 400 050 PAN: AACCM7659J (APPELLANT) (RESPONDENT) CO NOS.26, 27 & 28/M/2017 (ARISING OUT OF ITA NOS.3207, 3208 & 3209/M/2015 ASSESSMENT YEAR: 2008-09, 2009-10 & 2010-11 M/S. MATRIX INDIA ENTERTAINMENT CONSULTANT PVT. LTD., 5, AGNELO, 1 ST FLOOR, KHANDESWARI MARG, NEAR MOUNT MARY STEPS, BANDRA (W), MUMBAI 400 050 PAN: AACCM7659J VS. ASSISTANT COMMISSIONER OF INCOME TAX- 8(2), (ERSTWHILE CENTRAL CIRCLE- 47) 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 2 PRESENT FOR: ASSESSEE BY : DR. K. SHIVARAM, A.R. & SHRI RAHUL HAKANI, A.R. REVENUE BY : SHRI SANDEEP RAJ, D.R. DATE OF HEARING : 02.07.2021 DATE OF PRONOUNCEMENT : 23.07 2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED CROSS APPEALS AND CROSS OBJECTIONS HAVE BEEN PREFERRED BY THE ASSESSEE AND THE REVENUE AGAI NST THE ORDERS EVEN DATED 23.03.2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A )] RELEVANT TO ASSESSMENT YEAR 2005-06, 2006-07 & 2007-08, 2008-09 , 2009- 10, 2010-11 & 2011-12. 2. WE ARE FIRST TAKING UP THE ITA NO.2938/M/2015 A .Y. 2005-06 FOR ADJUDICATION. ITA NO.2938/M/2015 A.Y. 2005-06 (ASSESSEES APPEAL) 3. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCE D AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 OUGHT TO HA VE CONSIDERED THE ASSESSMENT AS WITHOUT JURISDICTION AND BAD IN LAW S INCE THE ORDER OF THE SAME WAS PASSED U/S. 153A R.W.S. 143(3) OF THE ACT. HOWEVER , THE APPELLANTS PREMISES WERE NEVER SEARCHED U/S. 132 OF THE ACT BUT ONLY A SURVE Y WAS CONDUCTED U/S. 133A OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.94,000/- ON ALLEGED GROUND OF UNRECONCILED JOB CONFIRMATION ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE CO MPUTER OF MS. SANDHYA RAMCHANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EM PLOYED WITH THE APPELLANT COMPANY. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.37,851/- AS UNEXPLAINED EXPENDITURE ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE COMPUTER OF MS. SANDHYA RAMC HANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EMPLOYED WITH THE APPELLANT COMPA NY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.7,650/- AS UNEXPLAINED EXPENDITURE ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE COMPUTER OF MS. SANDHYA RAMC HANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EMPLOYED WITH THE APPELLANT COMPA NY. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.40,900/- AS UNEXPLAINED EXPENDITURE ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE COMPUTER OF MS. SANDHYA RAMC HANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EMPLOYED WITH THE APPELLANT COMPA NY. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.33,416/- AS UNEXPLAINED EXPENDITURE ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE COMPUTER OF MS. SANDHYA RAMC HANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EMPLOYED WITH THE APPELLANT COMPA NY. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-47 ERRED IN CO NFIRMING ADDITION OF RS.76,001/- AS UNEXPLAINED EXPENDITURE ON THE BASIS OF SOME ROUGH WORKINGS FOUND FROM THE BACKUP OF THE COMPUTER OF MS. SANDHYA RAMC HANDRAN FOR THE PERIOD FOR WHICH SHE WAS NOT EMPLOYED WITH THE APPELLANT COMPA NY. 8. IN VIEW OF THE ABOVE, THE APPELLANT PRAYS THAT T HE ASSESSING OFFICER BE DIRECTED TO NOT TO INITIATE THE PENALTY U/S 271(1)( C) OF THE ACT. 9. THE APPELLANT PRAYS THAT : I) ASSESSMENT ORDER MY BE CANCELLED AS BEING WITHOUT J URISDICTION AND BAD IN LAW, II) ADDITION OF RS.94,000/- MAY BE DELETED III) ADDITION OF RS.37,851/- MAY BE DELETED IV) ADDITION OF RS.7,650/- MAY BE DELETED V) ADDITION OF RS.40,900/- MAY BE DELETED VI) ADDITION OF RS.33,416/- MAY BE DELETED VII) ADDITION OF RS.76,001/- MAY BE DELETED VIII) ANY OTHER RELIEF YOUR HONOURS MAY DEEM FIT. 10. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OR ALL THE ABOVE GROUNDS OF APPEAL. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 4 4. THE ISSUE RAISED IN THE 1 ST GROUND OF APPEAL IS A JURISDICTIONAL ISSUE CHALLENGING THE ORDER OF LD. C IT(A) ON THE GROUND OF WRONG UPHOLDING OF THE ASSESSMENT ORDER F RAMED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT BY THE AO BY IGNORING THE FACT THAT THERE HAS NEVER BEEN ANY SEARCH CONDUCTED ON THE ASSESSEE BUT A SURVEY UNDER SECTIO N 133A OF THE ACT WAS CONDUCTED. 5. THE FACTS IN BRIEF ARE THAT A SEARCH ACTION UNDE R SECTION 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL A ND BUSINESS PREMISES OF KATRINA KAIF AND GROUP CONCERNS ON 24. 01.2011 BY DY.DIT(INV.), MUMBAI AND DURING SEARCH ON KK GROUP, SEVERAL INCRIMINATING MATERIALS AND DOCUMENTS WERE FOUND AN D SEIZED. THE ASSESSEE IS ONE OF THE PERSONS OF KK GROUP AND BUT WAS NOT COVERED UNDER SEARCH. HOWEVER A SURVEY WAS CONDUCT ED ON THE ASSESSEE UNDER SECTION 133A OF THE ACT ON 24.01.201 1 AND STATEMENT OF SHRI VIVEK KAMAT, DIRECTOR OF THE ASSES SEE COMPANY WAS RECORDED. A NOTICE UNDER SECTION 153C OF THE A CT WAS ISSUED TO THE ASSESSEE ON 09.01.2012(WRONGLY MENTIO NED AS NOTICE U/S 153A OF THE ACT IN THE ASSESSMENT ORDER) WHICH WAS COMPLIED WITH BY THE ASSESSEE VIDE LETTER DATED 27. 01.2012 SUBMITTING THAT RETURN ALREADY FILED FOR A.Y. 2005- 06 DECLARING TOTAL INCOME OF RS.88,23,465/- MAY KINDLY BE TREATE D AS RETURN FILED IN COMPLIANCE TO NOTICE UNDER SECTION 153C OF THE ACT. THEREAFTER, NOTICE UNDER SECTION 142(1) DATED 14.11 .2012 ALONG WITH QUESTIONNAIRE WAS ISSUED WHICH WAS ATTENDED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FROM TIME TO TIME. THE ASSESSEE IS ENGAGED IN THE ACTIVITY OF COORDINATING AND PROVIDING SERVICES OF MODEL AND CELEBRITIES. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, THE AO CALLED FOR VARIOUS D ETAILS AND ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 5 INFORMATION WHICH WERE DULY FURNISHED BY THE ASSES SEE AND FINALLY AN ASSESSMENT WAS FRAMED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT DATED 30.03.2013 WHEREIN AFTER MAKING VARIOUS ADDITIONS, THE INCOME WAS ASSESSED AT RS.1, 20,92,038/-. 6. THE ASSESSEE CHALLENGED THE ORDER OF AO BEFORE L D. CIT(A) ON THE LEGAL GROUND THAT ASSESSMENT FRAMED UNDER SE CTION 153A READ WITH SECTION 143(3) DATED 30.03.2013 IS BAD IN LAW AND VOID AB-INITIO AS THE ASSESSMENT SHOULD HAVE BEEN MADE U NDER SECTION 153C OF THE ACT AS THE ASSESSEE WAS NOT COV ERED UNDER SEARCH ACTION U/S 132(1) OF THE ACT BUT A SURVEY W AS CONDUCTED ON THE ASSESSEE UNDER SECTION 133A OF THE ACT ON 24 .01.2011. HOWEVER, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON THIS ISSUE BY STATING THAT THE GROUND IS GENERAL IN NATURE AND REQUIRED NO ADJUDICATION. 7. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE US THAT THE ORDER PASSED BY LD. CIT(A), UPHOLDING THE ASSESSMENT ORD ER WHICH IS BAD IN LAW AS IT IS PASSED U/S. 153A R.W.S. 143(3) AND NOT U/S. 153C OF THE ACT, IS WRONG AND AGAINST THE PROVISION S OF THE ACT. SECONDLY, THE LD AR SUBMITTED THAT THERE WAS A SUR VEY ACTION U/S 133A OF THE ACT ON THE ASSESSEE ON 24.1.2011 AN D THERE WAS NO SEARCH ACTION ON THE ASSESSEE. THE LD AR SUBMITT ED THAT THERE WAS A SEARCH ACTION ON MS KAITRENA KAIF IN WH ICH SOME DOCUMENTS WERE REPORTED SEIZED AND ACCORDINGLY THE ASSESSEE WAS ISSUED NOTICE UNDER SECTION 153C OF THE ACT ON 9.01.2012. THE LD AR ARGUED THAT ONCE THE ASSESSEE IS OTHER TH AN THE SEARCHED PERSON AND NOTICE IS ISSUED UNDER SECTION 153C OF THE ACT, THEN THE ASSESSMENT HAS TO BE FRAMED UNDER SEC TION 143(3) R.W.S. 153C OF THE ACT WHEREAS THE ASSESSMENT WAS F RAMED ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 6 UNDER SECTION 153A R.W.S.143(3) OF THE ACT AND THER EFORE THE SAME IS INVALID AND BAD IN LAW. THE LD AR ALSO MAD E A WITHOUT PREJUDICE CONTENTION TO THE ABOVE ONE THAT THE NOT ICE U/S. 153C OF THE ACT AND THE CONSEQUENT ASSESSMENT ORDER IS B AD IN LAW. THE LD AR ARGUED THAT DURING SEARCH IN CASE OF KATR INA KAIF, NO INCRIMINATING MATERIAL WAS FOUND PERTAINING TO THE ASSESSEE AS IN FACT NONE OF THE MATERIALS/DOCUMENTS SEIZED AS STATED IN THE PANCHNAMA BELONGED TO THE ASSESSEE. THE LD COUNSEL FOR THE ASSESSEE FURTHER STATED THAT STATEMENT OF KATRINA K AIF AS RECORDED DURING SEARCH U/S 132(4) OF THE ACT A COPY OF WHICH IS FILED AT PG 173 TO 189, NO QUERY WAS EVER RAISED ON ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WH ICH WAS FOUND DURING THE SEARCH ACTION. BESIDES, NOT A SING LE ADDITION WAS MADE ON THE BASIS OF ANY MATERIAL FOUND DURING SEARCH IN CASE OF KATRINA KAIF IN WHOSE CASE THE SEARCH WAS C ONDUCTED. THE LD AR, ELABORATING THE PROVISIONS OF SECTION 15 3C OF THE ACT, SUBMITTED THAT AS PER S.153C OF THE ACT, THE BULLIO N, MONEY, DOCUMENTS SEIZED MUST BELONG TO PERSON OTHER THAN S EARCHED PERSON AND THE NOTICE TO THAT OTHER PERSON CAN ONLY BE ISSUED NOTICE U/S 153C OF THE ACT. THE LD AR SUBMITTED TH AT BEFORE ISSUING NOTICE U/S 153C OF THE ACT TO THE PERSON OT HER THAN THE SEARCH PERSON, THE AO OF THE SEARCH PERSON HAS TO R ECORD A SATISFACTION ON THE BASIS OF INCRIMINATING MATERIAL S THAT INCOME CONTAINED IN THE INCRIMINATING PAPER BELONGED TO TH E PERSON OTHER THAN THE SEARCHED PERSON AND PASSED ON THE AO OF THE OTHER PERSON WHO ALSO AFTER HIS SATISFACTION, ISSUE NOTICE U/S 153C OF THE ACT. THE LD. AR REFERRED TO THE ORDER U/S. 7(1) I.E., RESPONSE TO RTI APPLICATION BY THE ASSESSEE, WHEREI N IT IS ADMITTED BY THE AO THAT HE DOES NOT POSSESS THE SAT ISFACTION ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 7 NOTE ORDER IN CASE OF THE ASSESSEE A COPY OF WHICH IS FILED AT PG. NO. 207-208 OF THE PAPER BOOK. IN VIEW OF THESE FAC TS, THE NOTICE ISSUED U/S 153C OF THE ACT AND CONSEQUENT ASSESSMEN T ORDER IS BAD IN LAW. IN DEFENSE OF HIS ARGUMENTS, THE LD AR RELIED HEAVILY ON THE FOLLOWING DECISIONS: I) CIT VS. IBC KNOWLEDGE PARK PVT. LTD. (2016) 385 ITR 346 (KAR.)(HC) II) CIT VS. VEERPRABHU MARKETING LTD. (2016) 388 IT R 574 (CAL.)(HC) III) PR CIT V. SMT. LAKSHMI SINGH [2017] 78 TAXMANN.COM 207 (KAR.)(HC) IV) SMT. SUNITA BAI [2017] 78 TAXMANN.COM 274 (KAR .)(HC) V) CIT V SINHGAD TECHNICAL EDUCATION SOCIETY [2015] 378 ITR 84 (BOM.) THE BOMBAY HIGH COURT DECISION IS CONFIRMED BY THE SUPREME COURT IN CIT VS. SINHAGAD TECHNICAL EDUCATI ON SOCIETY CIVIL APPEAL NO. 11080 OF 2017 DT. 29/8/201 7. (2017) 397 ITR 344 (SC) VI) SKYLARK BUILD VS. ACIT (2018) 97 TAXMANN.COM 68 2 (MUM.)(TRIB.) 8. THIRDLY, THE LD COUNSEL STATED FURTHER THAT, IN TERMS OF THE PROVISIONS OF S.153A OF THE ACT IN CASE OF COMPLETE D ASSESSMENT NO ADDITION CAN BE MADE UNLESS THERE IS INCRIMINATI NG SEIZED MATERIAL DURING THE SEARCH. THE LD AR SUBMITTED THA T IN THE FACTS OF PRESENT CASE, AS IS CLEAR FROM PANCHNAMA, NO MATERIAL SEIZED BELONGED TO THE ASSESSEE. THE LD AR SUBMITTE D THAT EVEN OTHERWISE NOTHING SEIZED DURING SEARCH IS EVEN PRIM A FACIE INCRIMINATING AS ADDITIONS WERE NOT MADE ON THE BAS IS OF ANYTHING FOUND DURING THE COURSE OF SEARCH IN CASE OF KATRINA KAIF. THEREFORE THE LD COUNSEL FOR THE ASSESSEE MA KE A WITHOUT ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 8 PREJUDICE ARGUMENT TO THE ABOVE THAT SINCE A.Y. 05 -06 TO A.Y. 09-10 ARE COMPLETED ASSESSMENTS, ALL ADDITIONS OUGH T TO BE DELETED AS SAME ARE NOT MADE BASED ON ANY INCRIMINA TING MATERIAL FOUND DURING SEARCH IN THE CASE OF KATRINA KAIF. IN VIEW OF ABOVE SUBMISSIONS IT IS PRAYED THAT ASSE SSEE APPEALS AND CROSS- OBJECTIONS/ APPLICATION UNDER RULE 27 MA Y BE ALLOWED AND DEPARTMENT APPEALS MAY BE DISMISSED. 9. THE LD DR, PER CONTRA, STRONGLY REBUTTED THE ARG UMENTS OF THE LD AR BY SUBMITTING THAT THE ASSESSMENT HAS BEE N RIGHTLY FRAMED UNDER SECTION 153A READ WITH 143(3) OF THE A CT. THE LD. D R. SUBMITTED THAT A SEARCH ACTION WAS CONDUCTED O N KATRINA KAIF GROUP AND ASSESSEE ALSO RELATED TO KATRINA KAI F GROUP THOUGH THE ASSESSEE WAS COVERED UNDER SURVEY ACTION UNDER SECTION 133A OF THE ACT AND WAS ISSUED NOTICE UNDER SECTION 153C OF THE ACT. DURING THE COURSE OF SEARCH ON KA TRINA KAIF SOME INCRIMINATING MATERIAL WERE FOUND AND SEIZED D URING THE SEARCH. THE LD. D.R. WHILE DRAWING DISTINCTION BET WEEN THE SECTION 153A AND 153C SUBMITTED THAT BOTH THE SECTI ONS ARE PART OF THE SAME CHAPTER AND IT IS NOT MADE MUCH DI FFERENCE IF ASSESSMENT IS FRAMED UNDER SECTION 153A INSTEAD OF 153C OF THE ACT. AS REGARDS, NON RECORDING OF SATISFACTION THE LD D.R. SUBMITTED THAT IT IS SUFFICE IF THE INCRIMINATING I NFORMATION IS SHARED BY THE AO OF THE SEARCHED PERSON UNDER SECTI ON 132(1) WITH THE AO OF THE OTHER PERSON AND NO SATISFACTION IS REQUIRED TO BE RECORDED. MOREOVER, IT HAS BEEN STATED BY TH E AO IN RESPONSE TO RTI APPLICATION BY THE ASSESSEE THAT SA TISFACTION NOTE IN CASE OF SEARCH ARE NOT SHARED WITH THE AO A ND THEREFORE ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 9 NOT AVAILABLE WITH HIM. THE LD. D.R. PRAYED THAT T HE LEGAL ISSUE RAISED BY THE ASSESSEE MAY KINDLY BE DISMISSED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING WRITTE N SUBMISSIONS BY BOTH THE PARTIES AS PLACED BEFORE US INCLUDING THE WRITTEN SUBMISSIONS. THE UNDISPUTED FACTS ARE THAT A SEARCH U/S 132(1) OF THE ACT WAS CONDUCTED ON KATRINA KAIF GROUP ON 24.01.2011 DURING WHICH SOME INCRIMINATING PAPER/DO CUMENTS WERE FOUND AND SEIZED. SIMULTANEOUSLY A SURVEY U/S 133A OF THE ACT WAS CONDUCTED ON THE ASSESSEE ON 24.01.2011. CO NSEQUENT TO THE SURVEY ACTION ON THE ASSESSEE, A NOTICE U/S 153C OF THE ACT DATED 09.01.2012 WAS ISSUED AND DULY SERVED UPO N THE ASSESSEE A COPY OF WHICH IS FILED AT PAGE NO.17 OF THE PAPER BOOK. ULTIMATELY THE ASSESSMENT WAS FRAMED U/S 143(3) R.W .S. 153A OF THE ACT VIDE ORDER DATED 30.03.2013. NOW THE ONLY I SSUE BEFORE US AS RAISED BY THE ASSESSEE IS WHETHER THE ASSESSM ENT IS TO BE FRAMED UNDER SECTION 143(3) R.W.S.153C OF THE ACT O R UNDER SECTION 143(3) R.W.S.153A OF THE ACT. AFTER PERUSI NG THE RELEVANT PROVISIONS OF THE ACT VIS--VIS THE FACTS OF THE IN STANT CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT HAS TO BE FRAMED U/S 143(3) R.W.S. 153C OF THE ACT AS THERE WAS NO S EARCH ON THE ASSESSEE U/S 132(1) OF THE ACT. THE ASSESSEE WAS ON LY COVERED UNDER SURVEY ACTION U/S 133A OF THE ACT ON 24.01.20 11. SO THE SCORE THE ORDER OF THE AO IS BAD IN LAW. FURTHER SO FAR AS PROCEEDINGS U/S 153C OF THE ACT IS CONCERNED ON THE PERSON OTHER THAN THE SEARCHED PERSON, IT IS PREREQUISITE THAT PROPER SATISFACTION IS RECORDED BY THE AO OF THE SEARCHED PERSON THAT SOME INCRIMINATING DOCUMENTS SEIZED DURING SEARCH BELONGED TO THE ASSESSEE AND AFTER RECEIVING THE SATISFACTION B Y THE AO OF THE ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 10 ASSESSEE(THE PERSON OTHER THAN THE SEARCHED PERSON) AGAIN THE AO WILL RECORD HIS SATISFACTION AND ONLY THEN THE NOTICE U/S 2153C OF THE ACT CAN BE ISSUE TO THE PERSON OTHER T HAN THE SEARCHED PERSON AND NOT OTHERWISE. IN THE PRESENT C ASE THE ASSESSEE IS A PERSON OTHER THAN THE SEARCHED PERSON . SO THE PROCEEDINGS U/S 153C OF THE ACT CAN BE INITIATED WH EN THESE PRE-CONDITIONS ARE FULFILLED OTHERWISE THE PROCEEDI NGS AND CONSEQUENT ASSESSMENT WOULD BE RENDERED BAD AND INV ALID. WE NOTE THAT NO SUCH SATISFACTION HAS BEEN RECORDED BY THE AO OF THE SEARCHED PERSON ON THE BASIS OF INCRIMINATING M ATERIALS SEIZED DURING THE SEARCH AS HAS BEEN TESTIFIED AND BROUGHT OUT BY RTI APPLICATION BY THE ASSESSEE AND RESPONSE THE RETO BY THE AO THAT NO SATISFACTION HAS BEEN RECORDED BY THE AO OF THE SEARCHED PERSON I.E. KATRINA KAIF. WE ALSO NOTE THA T NO INCRIMINATING DOCUMENTS WERE SEIZED DURING SEARCH O N KAITRINA KAIF BELONGING TO THE ASSESSEE AS IS APPARENT FROM THE PUNCHNAMA PREPARED DURING SEARCH. ALSO DURING THE C OURSE OF RECORDING OF STATEMENT OF KAITRINA KAIF NOT EVEN A SINGLE QUERY WAS RAISED ON THE BASIS OF MATERIALS SEIZED FROM MS KATRINA KAIF ABOUT THE ASSESSEE. UNDER THE PRESENT FACTS AND CI RCUMSTANCES, THE CONTENTIONS OF THE LD. COUNSEL OF THE ASSESSEE CARRY WEIGHT THAT EVEN IF THE ASSESSMENT FRAMED IS PRESUMED TO BE UNDER SECTION U/S 143(3) R.W.S. 153C OF THE ACT, EVEN TH EN THE ASSESSMENT IS BAD IN LAW AS THE NOTICE HAS BEEN ISS UED WITH THE SATISFACTION OF THE AO OF THE SEARCHED PERSON. IN O UR OPINION THE ASSESSMENT FRAMED BY THE AO IS WITHOUT JURISDICTI ON AND CAN NOT BE SUSTAINED. THE CASE OF THE ASSESSEE FIND SUP PORTS FROM THE DECISIONS AS DISCUSSED HEREINAFTER: ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 11 A) IN THE CASE OF CIT VS. IBC KNOWLEDGE PARK PVT. LTD. (2016) 385 ITR 346 (KAR.)(HC) IT HAS BEEN HELD THAT INCR IMINATING MATERIAL LEADING TO AN INFERENCE OF UNDISCLOSED INC OME IS A SINE QUA NON FOR INVOCATION OF S. 153C OF THE ACT. B) IN THE CASE OF CIT VS. VEERPRABHU MARKETING LTD. (2 016) 388 ITR 574 (CAL.)(HC) IT HAS BEEN HELD THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A . C) IN THE CASE OF PR CIT V. SMT. LAKSHMI SINGH [SUPRA), HONBLE KARNATKA HIGH COURT HAS HELD THAT POWER UNDER SECTION 153C COULD NOT BE INVOKED WHEN NO INCRIMINATING EVIDENCE WAS DISCOVERED DURING SEARCH D) IN THE CASE OF PR CIT V SMT. SUNITA BAI [SUPRA), T HE KARNATKA HIGH COURT HAS HELD THAT POWER UNDER SECTION 153C COULD NOT BE INVOKED AGAINST ASS ESSEE WHEN THERE WAS NO INCRIMINATING DOCUMENT OR EVIDENC E DISCOVERED DURING SEARCH OF THIRD PARTY UNDER SECTI ON 132 E) IN THE CASE OF CIT V SINHGAD TECHNICAL EDUCATION SO CIETY [SUPRA) HAS APPROVED SINHGADTECHNICAL EDUCATION SOC IETY V ACIT (2011) 140 TTJ 233(PUNE)(TRIB.) WHEREIN IT H AS BEEN HELD THAT LOOSE PAPERS FOUND AND SEIZED FROM RESI DENCE OF PRESIDENT OF ASSESSEE, AN EDUCATIONAL INSTITUTION, INDICATING SOME 'ON MONEY' RECEIPT DURING ADMISSION PROCESS DI D NOT ESTABLISH CO-RELATION DOCUMENT-WISE WITH ASSESSMENT YEARS IN QUESTION, NOTICE ISSUED UNDER SECTION 153C TO AS SESSEE WAS INVALID. HENCE, INCRIMINATING MATERIAL IS SINE QUA NON. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 12 THE BOMBAY HIGH COURT DECISION IS CONFIRMED BY THE SUPREME COURT IN CIT VS. SINHAGAD TECHNICAL EDUCATI ON SOCIETY CIVIL APPEAL NO. 11080 OF 2017 DT. 29/8/201 7. (2017) 397 ITR 344 (SC) VI) IN THE CASE OF SKYLARK BUILD VS. ACIT (SUPRA) WHERE IN IT IS HELD THAT RECORDING OF SATISFACTION IN THE CASE OF THE SEARCH PARTY IS A SINE QUA NON FOR ASSUMING JURISDICTION F OR THE ISSUE OF NOTICE U/S. 153C. IT IS FURTHER HELD THAT EVEN IF ASSESSING OFFICER IS THE SAME, RECORDING OF SATISFA CTION IS MANDATORY. FOR COMING TO THIS CONCLUSION, ITAT HAS RELIED UPON CIRCULAR NO. 24/2015 DT. 31/12/2015. 11. WE ALSO FIND MERIT IN THE THIRD WITHOUT PREJUDI CE ARGUMENT OF THE LD COUNSEL OF THE ASSESSEE THAT A.Y. 05-06 TO A.Y. 09-10 HAVE ATTAINED FINALITY ON THE DATE OF SEARCH AND WE RE COMPLETED ASSESSMENTS, AND THEREFORE THE ADDITIONS OUGHT TO BE MADE ON THE BASIS OF SEIZED INCRIMINATING MATERIALS DURING SEARCH AND NOT OTHERWISE. IN THE PRESENT CASE THE SEARCH TEAM HAS NOT SEIZED ANY INCRIMINATING MATERIALS. THEREFORE WE AR E INCLINED TO HOLD THAT ADDITIONS CAN NOT BE SUSTAINED AND ACCOR DINGLY HAVE TO BE DELETED AS SAME ARE NOT MADE BASED ON ANY INC RIMINATING MATERIAL FOUND DURING SEARCH IN THE CASE OF KATRINA . 12. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES AND DE CISIONS OF VARIOUS JUDICIAL FORUMS WE SET ASIDE THE ORDER OF T HE CIT(A) AND QUASH THE ASSESSMENT FRAMED BY THE AO. CONSEQUENTL Y THE GROUND 1 IS ALLOWED IN FAVOUR OF THE ASSESSEE. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 13 THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLO WED. 13. SINCE WE HAVE DECIDED THE GROUND RAISED BY THE ASSESSEE ON LEGAL ISSUE THERE IS NO NEED TO ADJUDICATE OTHER GROUNDS RAISED BY THE ASSESSEE ON MERITS. 14. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NOS.2939 & 2940/M/2015 A.YS. 2006-07 & 2007-08 ; (ASSESSEES APPEALS); ITA NOS.3208 & 3209/M/2015 A.YS: 2009-10 & 2010-11 (REVENUES APPEALS) ; & CO NOS.26, 27 & 28/M/2017 AY 2008-09, 2009-10 & 2010-11 (ASSESSEES COS) 15. THE ASSESSEE HAS RAISED THE SIMILAR JURISDICTIO NAL ISSUE IN ITA NOS.2939 & 2940/M/2015 FOR AY 2006-07, 2007-08 AND CROSS OBJECTIONS NOS.26, 27 & 28/M/2017 FOR AY 2008 -09 TO 2010-11 RAISING THE SAME JURISDICTIONAL ISSUE AS DE CIDED BY US IN ITA NO.2938/M/2015 AY 2005-06.HOWEVER THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE LATE BY 33 DAY S. SO WE WILL FIRST DEAL WITH THE ISSUE OF CONDONATION OF DELAY. 16. THE CROSS OBJECTIONS FILED BY THE ASSESSEE IN A LL THE THREE YEARS ARE LATE BY 33 DAYS AND ASSESSEE HAS FILED A PPLICATION FOR CONDONATION OF DELAY AND SUPPORTING AFFIDAVIT A.Y 2 008-09,2009- 10,2010-11 AND PRAYED BEFORE THE BENCH THE DELAY I N FILING COS OF 33 DAYS MAY BE CONDONED. THE LD AR OF THE ASSESS EE FURTHER RELY ON THE OBSERVATION OF THE APEX COURT THE CASE OF COLLECTOR, LAND ACQUISITION V. KATIJI 167 ITR 471 (SC). THE LD DR ON THE OTHER HAND OPPOSED THE CONDONATION OF DELAY IN FILI NG OF CROSS OBJECTIONS. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 14 17. AFTER HEARING BOTH THE SIDES AND PERUSING THE R ECORDS AS PLACED BEFORE US, WE FIND THAT THE ASSESSEE HAS EXP LAINED THE DELAY IN FILING THE CROSS OBJECTIONS BY FILING COND ONATION APPLICATION AND AFFIDAVIT EXPLAINING THE DELAY IN F ILING CROSS OBJECTIONS AND THE SUBSTANTIAL JUSTICE AND EQUITY SHOULD PREVAIL OVER TECHNICALITIES. THE CASE OF THE ASSESSEE FIND SUPPORT FROM THE ABOVE DECISION NAMELY COLLECTOR, LAND ACQUISITI ON V. KATIJI(SUPRA) WHEREIN THE HONBLE APEX COURT HAS OB SERVED THAT 'WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATI ONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON- DELIBERATE DELAY.' WE ARE THEREFORE INCLINED TO CON DONE THE DELAY OF 33 DELAYS. 18. THE ASSESSEE HAS ALSO FILED UNDER RULE 27 APPLI CATION SUBMITTING THEREIN THAT THE RESPONDENT IS ENTITLED TO RAISE AN OBJECTION UNDER RULE 27 EVEN IN RESPECT OF FRESH IS SUES. THE LD AR SUBMITTED THAT IT IS NOT NECESSARY THAT THE GROU ND SHOULD HAVE BEEN DECIDED AGAINST THE RESPONDENT BY THE CIT (A) BY RELYING ON THE DECISION IN THE CASE OF AAP PAPER MA RKETING LTD. V ACIT ITA NO 167/LKW/2016 AY 11-12 DTD 28/4/17(LUCK) (TRIB.). THE APPLICATION IS NOT BEING DECIDED AS WE HAVE CON DONED THE DELAY IN FILING THE CROSS OBJECTIONS. 19. THE LD AR SUBMITTED THAT SINCE THERE IS NO APPE AL OF THE REVENUE IN AY 2008-09, THE CROSS OBJECTION OF THE A SSESSEE FOR THE SAID YEAR BECOMES INFRUCTUOUS AND ACCORDINGLY M AY BE DISMISSED. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 15 20. SINCE WE HAVE ALREADY DECIDED THE JURISDICTION AL ISSUE AS RAISED IN THE ABOVE ITA NOS.2939 & 2940/M/2015 FOR AY 2006- 07, 2007-08 AND CROSS OBJECTIONS NOS.26, 27 & 28/M/ 2017 FOR AY 2008-09 TO 2010-11 IN ITA NO.2938/M/2015 A.Y. 20 05-06. THEREFORE OUR DECISION IN ITA NO.2938/M/2015 AY 200 5-06 WOULD, MUTATIS MUTANDIS, APPLY TO THESE APPEALS AND CROSS OBJECTIONS AS WELL EXCEPT CO NO .26/M/2017 AY2008-0 9 WHICH IS BEING DISMISSED AS INFRUCTUOUS. CONSEQUENTLY THE APPEALS AND TWO CROSS OBJECTIONS ARE ALLOWED ON JURISDICTIO NAL ISSUE. 21. SINCE WE HAVE ALLOWED THE CROSS OBJECTIONS FILE D FOR 2009- 10 & 2010-11 ON THE JURISDICTIONAL ISSUE, THE APPEA L OF THE REVENUE BECOMES INFRUCTUOUS AND ARE ACCORDINGLY DI SMISSED. ITA NO.2941/M/2015 AY 2011-12 (ASSESSEES APPEAL) 22. THE ISSUE RAISED IN FIRST GROUND OF APPEAL IS A GAINST THE CONFIRMATION OF ADDITION OF RS.24,000/- BY LD. CIT( A) AS UNDISCLOSED RECEIPT FROM THE CLIENTS ON THE BASIS O F SOME ROUGH WORKINGS FOUND FROM THE BACK UP OF THE COMPUTER OF MS. SANDHYA RAMACHANDRAN FOR THE PERIOD FOR WHICH SHE W AS NOT EMPLOYED WITH THE ASSESSEE COMPANY. 23. THE FACTS IN BRIEF ARE THAT DURING THE COURSE O F SURVEY ON THE ASSESSEE ON 24.01.2011, A STATEMENT OF DIRECTOR OF THE ASSESSEE COMPANY MR. VIVEK M. KAMAT WAS RECORDED AN D SPECIFIC QUERY WAS PUT AS REGARDS THE LOOSE PAPERS FOUND AND IN REPLY TO QUESTION NO.24 MR. KAMAT SPECIFICALLY MENT IONED THAT THOSE LOOSE PAPERS ARE NOTHING BUT ROUGH SHEETS WHI CH ARE USED TO RECORD THE OFFERS FROM VARIOUS COMPANIES AND THE SE ARE JUST SCRIBBLING PAD AND IT IS NOT NECESSARY THAT EVERY D ATA RECORDED ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 16 IN THE LOOSE SHEETS RESULTED INTO ACTUAL MATERIALIZ ATION OF THE OFFER. THE AO, HOWEVER, REJECTED THE SUBMISSION OF THE ASSESSEE AND ADDED RS.24,000/- BEING 20% OF RS.1,20,000/- ON THE BASIS OF THESE LOOSE SHEETS WHICH WAS AFFIRMED BY LD. CIT (A). 24. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT SEIZED DOCUMENTS DO NOT PROVE THAT ANY CASH IS PAID TO MR. ZARINE KHAN WHOSE NAME IS MENTI ONED IN THE DOCUMENT. WE ALSO NOTE THAT MR. ZARINE KHAN HAS NO T BEEN EXAMINED. MOREOVER MS. SANDHYA RAMACHANDRAN STATED IN HER STATEMENT THAT SHE WAS NOT AWARE OF THE SEIZED DOCU MENTS AS THE SAME PERTAIN TO THE PERIOD PRIOR TO JOINING THE EMPLOYMENT. WE FIND THAT THE ADDITION IN THIS CASE IS BASED UPO N SURMISES AND CONJUNCTURE AND AO & LD CIT(A) HAVE FAILED TO BRING ANY MATERIAL ON RECORD AND CONSEQUENTLY THE SAME CAN NO T BE SUSTAINED. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. THE GROUND NO . 1 OF THE ASSESSEES APPEAL IS ALLOWED. 25. THE 2 ND GROUND RAISED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDITION OF RS.5,00,000/- BEING 25% OF RS.25,00,000/- AND ALSO ENHANCING IT TO RS.25,00,0 00/- THEREBY ADDING 100% OF THE UNDISCLOSED PROFESSIONAL RECEIPTS ON THE BASIS OF BLACKBERRY CONVERSATION BETWEEN ONE MS. SANDHYA RAMACHANDRAN AND UNKNOWN SOME THIRD PARTY. 26. THE FACTS IN BRIEF ARE THAT THE AO ON THE BASIS OF CHAT IN A BLACKBERRY PHONE OF MS. SANDHYA RAMACHANDRAN CAME T O CONCLUSION THAT ASSESSEE HAS RECEIVED RS.25,00,000/ - IN CASH AND ACCORDINGLY A SHOW CAUSE NOTICE WAS ISSUED AS T O WHY THE ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 17 SAME SHOULD NOT BE TREATED AS PROFESSIONAL FEES IN CASH IN THE HANDS OF THE ASSESSEE. FINALLY, THE AO ADDED 25% ON THE SAME TO THE INCOME OF THE ASSESSEE ON THE GROUND THAT AS SESSEE HAS NOT OFFERED ANY EXPLANATION AND THEREFORE ISSUE REM AINED UNEXPLAINED. THUS AO MADE AN ADDITION OF RS.5,00, 000/- BEING 25% OF RS.25,00,000/- WHICH WAS ALLEGED TO BE PAID IN CASH. 27. IN THE APPELLATE PROCEEDINGS THE LD. CIT(A) ENH ANCED THE ADDITION BY OBSERVING AND HOLDING AS UNDER: 10.3 VIDE ORDER DATED 20.03.2014 IN THE CASE OF KA TRINA ROSEMARY TURCOTTE FOR A.Y.2011-12 THE ADDITION OF RS.20,00,000/- (BEING 8 0%) HAD BEEN DELETED BY ME HOLDING THE VIEW THAT THE ENTIRE RS.25,00,000/- BEI NG 100% (AS PER SEIZED DOCUMENT EL) IS TO BE SUSTAINED IN THE HANDS OF MATRIX COMPA NY. THEREFORE, GROUND OF APPEAL NO.3 IS DISMISSED. THUS HERE THE ADDITION OF RS.5,00,000/- IS ENHANCED TO RS.25,00,000/-. 28. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THIS ADDITION WAS ALSO BASED O N CONJUNCTURE AND SURMISES. UPON PERUSAL OF THE RECORD BEFORE US WE FIND THAT THERE IS NO EVIDENCE OF ANY CASH PAYMENT TO MS. KAT RINA KAIF OR ON HER BEHALF. EVEN THE THIRD PARTY WHO WAS ON THE CHAT WITH MS. SANDHYA RAMACHANDRAN IS NOT KNOWN AND MS. KATRI NA KAIF IN HER STATEMENT HAS DENIED SUCH TRANSACTIONS. WE ALSO NOTE THE ADDITION IN THE HAND OF KATRINA KAIF OF RS. 20, 00,000/- HAS BEEN DELETED BY LD CIT(A) AND COORDINATE BENCH HAS UPHELD THE ORDER OF LD CIT(A) IN ITA NO.3092/M/2015 A.Y. 2006 -07 & ORS VIDE ORDER DATED 11.10.2017. THE OPERATIVE PART IS REPRODUCED AS UNDER: 57. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE SEIZED DOCUMENTS ON THE BASIS OF WHICH THE ADDITION WAS MADE BY THE AO IS A CONVERSATION BETWEEN MS. SANDHYA RAM ACHANDRAN AND ONE OF THE CLIENTS OF M/S. MATRIX. EXCEPT THE DOCUMENT CONTAIN ING CONVERSATION BETWEEN TWO THIRD PARTIES THERE IS NO OTHER EVIDENCE BROUGHT ON RECORD BY THE AO TO INDICATE CASH PAYMENT TO THE ASSESSEE. IN FACT IN THE COURSE OF ASSESSMENT PROCEEDINGS ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 18 WHEN THE ASSESSEE WAS CONFRONTED WITH THE SEIZED DO CUMENT SHE FLATLY DENIED OF HAVING RECEIVED ANY CASH FROM MATRIX. FURTHER, AN A FFIDAVIT WAS ALSO FILED ON BEHALF OF MATRIX STATING THAT NO CASH WAS EITHER ACCEPTED ON BEHALF OF THE ASSESSEE OR PAID TO HER. THUS, WHEN NO CORROBORATIVE EVIDENCE HAS BE EN BROUGHT ON RECORD INDICATING CASH PAYMENT, MERELY RELYING UPON SOME C ONVERSATION BETWEEN TWO THIRD PARTIES IT CANNOT BE CONCLUDED THAT THE ASSES SEE HAS RECEIVED CASH PAYMENT OF 20,00,000. THEREFORE, THE ADDITION MADE ON PURE GUE SS WORK, CONJECTURE AND SURMISES CANNOT BE SUSTAINED. WE THEREFORE, UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. GROUND RAISED BY THE DEPARTMENT IS DISMISSED . 29. SINCE THE FACTS BEFORE US ARE MATERIALLY SAME Q UA THE ESTIMATION OF INCOME BASED UPON CONJECTURES AND SUR MISES WITHOUT ANY EVIDENCES, WE ,THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL S ET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 30. THE ISSUE RAISED IN GROUND NO.3 IS SIMILAR TO O NE AS RAISED IN GROUND NO.2 WITH EXCEPTION OF VARIATION IN THE A MOUNT. THEREFORE, OUR FINDING IN GROUND NO.2, WOULD MUTATI S MUTANDIS, APPLY TO GROUND NO.3 AS WELL. ACCORDINGLY, GROUND NO.3 IS ALLOWED. 31. ACCORDINGLY, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.3210/M/2015 (REVENUES APPEAL) 32. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE DELETION OF ADDITION OF RS.35,00,000/- BY LD. CIT(A) AS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED RECEIPTS. 33. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED ON THE BASIS OF SMS AND CONVERSATION IN B LACKBERRY MOBILE BACK UP OF MS. SANDHYA RAMACHANDRAN WHICH WA S FOUND AT THE TIME OF SEARCH THAT A PROFESSIONAL FEE S OF RS.50 LAKHS WAS COLLECTED AGAINST THE ISSUANCE OF BILLS W HILE RS.75 LAKHS WAS RECEIVED IN CASH ON THE ACCOUNT OF MS. KA TRINA KAIF. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 19 SIMILARLY RS.75 LAKHS WERE RECEIVED AGAINST BILLS AND RS.1.00 CR IN CASH ON THE ACCOUNT OF MR. SALMAN KHAN. ACCORDI NGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY THE SAME SHOULD NOT BE ADDED TO THE INCOME OF THE ASSES SEE. THE ASSESSEE SUBMITTED BEFORE THE AO THAT THIS WAS JUST A PROPOSAL AND NO CASH HAS ACTUALLY BEEN RECEIVED. HOWEVER, THE AO CAME TO THE CONCLUSION THAT CASH INVOLVEMENT IN PROFESS IONAL FEE CAN NOT BE RULED OUT AND ACCORDINGLY RS.1,75,00,000/- W AS TREATED AS UNACCOUNTED PROFESSIONAL RECEIPT AND BY APPLYING A RATE OF 25%, ADDED A SUM OF RS.35,00,000/- TO THE INCOME OF THE ASSESSEE. 34. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DE LETED THE ADDITION BY OBSERVING AND HOLDING AS UNDER: 9.3 I HAVE CAREFULLY PERUSED THE ABOVE. IT IS SEEN THAT THE DHAKA PERFORMANCE HAS DEFINITELY MATERIALIZED BUT IT IS THROUGH ANOTHER A GENT I.E. ATN RECORDS LTD. THE INCOME RECEIVED OF RS.60,00,000/- FOR KATRINA ROSEM ARY TURCOTTE VIDE CHEQUE BY THE APPELLANT COMPANY OF RS.1.60 CRORES (APPELLANT RS.1 CRORE & KATRINA ROSEMARY TURCOTTE RS.60 LAKHS) HAS ALSO BEEN OFFERED AS ITS INCOME FOR A.Y.2011-12 BY KATRINA ROSEMARY TURCOTTE IN HER INDIVIDUAL RETURN. THE NOT ING MADE OF THE SAID PERFORMANCE BY THE APPELLANT REGARDING ITS CLIENTS IS A NOTING ONLY WHICH DID NOT MATERIALIZE. CHEQUE PAYMENT OF RS.1.60 CRORES WHICH HAD BEEN RECEIVED FOR DHAKA EVENT IS ALSO DULY REFLECTED IN BOOKS OF ACCOUNTS O F THE APPELLANT COMPANY. THEREFORE, GROUND OF APPEAL NO.2 IS ALLOWED AND RS. 35,00,000/- IS DELETED. 35. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE CORRESPONDING ADDITION MAD E IN THE HAND OF MS. KATRINA KAIF WAS ALREADY DELETED BY LD. CIT(A) AND AFFIRMED BY THE COORDINATE BENCH. WE NOTE THAT THE SE RECEIPTS WERE IN RESPECT OF BANGLADESH, DHAKA PERFORMANCE AN D THE CO- ORDINATE BENCH OF THE TRIBUNAL WHILE DELETING THE A DDITION HAS OBSERVED AND HELD AS UNDER: 73. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON THE ASSESSMENT ORDER IT IS VERY MUCH CLEAR THAT DURING MATRIX A LO OSE PAPER WAS FOUND CONTAINING DETAILS OF CERTAIN TRANSACTIONS BOTH IN CHEQUE AND IN CASH. HOWEVER, WHEN THE LOOSE ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 20 WAS CONFRONTED TO THE DIRECTOR OF M/S. MATRIX INDIA ENTERTAINMENT P. LTD. DURING SURVEY, HE HAD CATEGORICALLY STATED THAT IT WAS ONL Y IN THE NATURE OF AN OFFER RECEIVED FROM SOME PARTY BUT IT HAS NOT BEEN ACCEPT ED. SIMILARLY, WHEN SUCH EVIDENCE WAS CONFRONTED TO MS. SANDHYA RAMACHANDRAN SHE ALSO DENIED OF KNOWING ANY SUCH CASH TRANSACTION AND ALSO STATED T HAT THE EVENT IN DHAKA DID NOT MATERIALIZE THROUGH THEM. THOUGH IT MAY BE A FACT T HAT THE DHAKA EVENT DID TAKE PLACE IN FEBRUARY, 2011, BUT AS STATED BY THE ASSES SEE IT WAS THROUGH ANOTHER AGENCY, M/S. ATN RECORDS LTD. AND NOT THROUGH M/S. MATRIX INDIA ENTERTAINMENT P. LTD. THEREFORE THERE IS NO MATERIAL IN THE POSSESSI ON OF THE AO TO DEMONSTRATE THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT IN CASH FROM M /S. MATRIX INDIA ENTERTAINMENT P. LTD. FOR DHAKA EVENT. ON THE CONTR ARY, THE EVIDENCES ON RECORD DO INDICATE, THOUGH, THE ASSESSEE APPEARED IN THE DHAK A EVENT CONDUCTED THROUGH M/S. ATN RECORDS LTD., HOWEVER, SHE HAS RECEIVED HE R FEES FULLY IN CHEQUE AND HAS OFFERED IT AS INCOME IN THE RELEVANT ASSESSMENT YEA R. AS NO MATERIAL HAS BEEN BROUGHT BEFORE US BY THE REVENUE TO CONTROVERT THE AFORESAID FACTS WE ARE INCLINED TO AFFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE BY DISMISSING THE GROUND RAISED BY THE REVENUE. 36. IN THE PRESENT CASE ALSO THE REVENUE COULD NOT BRING ANY MATERIALS ON RECORDS TO CONTROVERT FINDINGS OF THE LD CIT(A). SINCE THE FACTS BEFORE US ARE SIMILAR TO ONES AS DECIDED BY THE COORDINATE BENCH IN THE CASE OF KATRINA KAIF AS DIS CUSSED HEREINABOVE. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL UPHOLD THE OR DER OF LD. CIT(A). ACCORDINGLY, GROUND NO.1 IS DISMISSED. 37. THE ISSUE RAISED IN GROUND NO.2 IS AGAINST THE DELETION OF ADDITION OF RS.5,52,05,923/- BY LD. CIT(A) AS MADE BY THE AO ON THE BASIS OF ENTRIES IN THE LOOSE PAPERS SEIZED. 38. THE FACTS IN BRIEF ARE THAT THE ADDITION WAS MA DE ON THE BASIS OF LAPTOP BACKUP OF EMPLOYEE MS SANDHYA RAMCH ANDRAN BEING ANNEXURE G WHICH WAS A EVALUATION SHEET FO R AY 06-07. ON THE BASIS OF ANNEXURE G-5 WHICH PERTAIN TO A.Y. 2006-2007, AO CAME TO THE CONCLUSION THAT PERCENTAGE OF UNACCO UNTED CASH INCOME IS 27% OF CHEQUE INCOME DURING THE AY 2006-0 7. ACCORDINGLY THE AO EXTRAPOLATED THE INCOME IN THE INSTANT YEAR ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 21 BY APPLYING 27% TO CURRENT AY 11-12 TURNOVER OF RS 1,02,23,31,906/- AND HELD THAT THE ESTIMATED CASH I NCOME FOR AY 11-12 WOULD BE RS 27,60,29,615/- . THE AO CALCUL ATED THE ASSESSEE SHARE BEING 20%, AN ADDITION OF RS 5,52,05 ,923/- WAS MADE IN THE ASSESSMENT FRAMED. 39. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DEL ETED THE ADDITION BY OBSERVING AND UPHOLDING THAT ADDITION A S MADE BY THE AO IS BASED UPON THE PRESUMPTIONS, ASSUMPTIONS AND EXTRAPOLATION AND THERE WAS NO MATERIALS BEFORE THE AO. THE LD CIT(A) CALLED FOR A REMAND REPORT FROM THE AO AND A O CLEARLY STATED THAT THE INCOME WAS EXTRAPOLATED ON THE BASI S AY 2006- 07. THE LD CIT(A) RECORDED A FINDING THAT AO ESTIMA TED THE CASH RECEIPTS @ 27% OF THE CHEQUES RECEIPTS WITHOUT ANY BASIS AND THUS DELETED THE ADDITION. 40. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORDS. WE NOTE THAT THE AO MADE THE ADDITION ON THE BASIS OF EVALUATION SHEETS PREPARED BY THE EX-E MPLOYEE. WE FURTHER NOTE THAT EX- EMPLOYEE WAS NOT ADMITTEDLY E XAMINED BY THE REVENUE. HENCE, SAID DOCUMENT CANNOT BE RELIED UPON. IT IS NOTHING BUT A DUMB DOCUMENT. BESIDES, EXTRAPOLATION IS BASED UPON A.Y. 2006-07 AND THERE IS NO BASIS FOR ESTIMAT ION IN THE CURRENT YEAR OR CORROBORATIVE EVIDENCES BROUGHT ON RECORD BY THE DEPARTMENT TO SUPPORT ITS ALLEGATION OF CASH PAYMEN TS. WE NOTE THAT DURING THE APPELLATE PROCEEDINGS THE LD CIT(A) CALLED FOR A REMAND REPORT FROM THE AO AND THE AO HAS ALSO CONFI RMED IN HIS REMAND REPORT DATED 9.3.2015 THAT THERE WAS NO EVID ENCE FOR CASH INCOME AND ENTIRE ADDITION WAS ON THE BASIS O F ESTIMATION AD EXTRAPOLATION. WE NOTE THAT SEIZED MATERIAL HAS BEEN ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 22 DISCUSSED IN DETAIL BY THE COORDINATE BENCH IN THE CASE OF KATRINA AT PARA 74 WHEREIN IT WAS HELD THAT SAID DO CUMENT DOES NOT PROVE THAT CASH WAS PAID TO KATRINA AND THUS RE VENUE APPEAL ON SAID GROUND WAS DISMISSED. IT WAS HELD TH AT AO HAS NOT BROUGHT ON RECORD ANY CLINCHING EVIDENCES TO PR OVE THAT CASH WAS PAID. THUS, THE ORDER OF CIT(A) WHICH IS IN CONFORMITY WITH THE OBSERVATIONS OF THE COORDINATE BENCH IN T HE CASE OF KATRINA KAIF DESERVED TO BE CONFIRMED. THE OBSERV ATIONS OF LD. CIT(DR) IN HIS WRITTEN SUBMISSIONS WITH RESPECT TO THE ANNEXURES DO NOT SURVIVE IN VIEW OF DECISION OF THI S CO-ORDINATE BENCH IN THE CASE OF KATRINA KAIF. THE LEARNED CIT (DR) HAS RELIED ON FOLLOWING DECISIONS TO JUSTIFY ESTIMATION / EXTRAPOLATION WHICH WERE DISTINGUISHED BY THE COUNSEL OF THE ASSE SSEE AS UNDER: A)SHRI SURINDER KUMAR V. CIT (APPEAL NOS. 389 AND 390 OF 2009) (P&H)(HC) / [2012] 340 ITR 173 (PUNJAB & HARYANA)(HC)-THIS DECISION IS NOT APPLICABLE AS THE RE WAS CORROBORATIVE MATERIAL AND ALSO IT DOES NOT PERTAIN TO ESTIMATION OF ANOTHER ASSESSMENT YEAR. B)CST VS. H.M. ESUFALI H M ABDULAI (1973) SCC (2) 1 37 (SC) / [1973] 90 ITR 271 (SC)-THE ISSUE WAS RELATIN G TO ESTIMATION FOR SAME YEAR AND NOT OTHER ASSESSMENT Y EARS. HENCE, THIS DECISION IS NOT APPLICABLE. C)GOPAL LAL BHADRUKA VS. DCIT (2012) 346 ITR 106 (AP)(HC)-THE ISSUE DECIDED BY SAID DECISION WAS ON MATERIAL FOUND POST SEARCH IN CASE OF PERSON SEARCH ED WHICH IS NOT THE ISSUE IN THE PRESENT CASE. ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 23 D) CIT VS. C L KHATRI (2006) 282 ITR 97 (MP)(HC)-TH IS DECISION IS IN FAVOUR OF ASSESSEE. IT HOLDS, THERE CANNOT BE ESTIMATION FOR OTHER YEARS. E)CIT VS. CHETAN DAS LACHMAN DAS 25 TAXMANN.COM 227 (DELHI)(HC) / [2012] 211 TAXMAN 61 (DELHI)-IN THIS CASE ORDER OF ITAT WAS SET-ASIDE AND RESTORED BACK TO IT AT. IN THIS CASE INCRIMINATING MATERIAL WAS FOUND DURING S EARCH WHICH IS NOT THE FACT IN THE PRESENT CASE. THE HIGH COURT ACCEPTED THAT THERE WAS CORROBORATIVE EVIDENCE WHER EAS IN PRESENT CASE, IT IS HELD IN CASE OF KATRINA THAT TH ERE WAS CORROBORATIVE EVIDENCE. 41. THUS, ALL THE ABOVE DECISIONS ARE NOT APPLICABL E IN THE FACTS OF THE PRESENT CASE AS THE SEIZED MATERIAL IS UNREL IABLE WITHOUT ANY CORROBORATIVE EVIDENCES AND AS ALREADY HELD BY THE COORDINATE BENCH IN THE CASE KATRINA KAIF THE SAID MATERIAL DOES NOT PROVE THE ALLEGATION OF THE REVENUE THAT C ASH WAS PAID TO KATRINA. IN FOLLOWING CASES IT IS HELD THAT EST IMATION CANNOT BE MADE FOR A DIFFERENT ASSESSMENT YEAR IN RESPECT OF WHICH THERE IS NO INCRIMINATING MATERIAL NAMELY CIT-1 V J AYABEN RATILAL SORATHIA (2014) 222 TAXMAN 64(GUJ.) (TRIB.) (MAG), UDAY C TAMHANKAR V DCIT (2015) 174 TTJ 151(MUM)(TRIB.), DR M.K.E MEMON (2008) 248 ITR 310 (BOM)(HC). BESIDES IN THE CASE .IN MEHTA PARIKH & CO V CIT (1956) 30 ITR 181(SC), IT I S HELD THAT AN AFFIDAVIT IS VALID UNLESS PROVEN FALSE. THE SUP REME COURT IN COMMAN CAUSE V UOI [2017] [2017] 394 ITR 220 (SC) ( PG. NO. 140-148) WAS DEALING WITH INCRIMINATING MATERIALS I N FORM OF RANDOM SHEETS AND LOOSE PAPERS, COMPUTER PRINTS, HA RD DISK, ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 24 PEN DRIVES ETC. WHICH WERE FOUND DURING SEARCH. IT WAS HELD THAT ENTRIES IN LOOSE PAPERS/ SHEETS ARE IRRELEVANT AND INADMISSIBLE AS EVIDENCE. SUCH LOOSE PAPERS ARE NOT BOOKS OF AC COUNT AND THE ENTRIES THEREIN ARE NOT SUFFICIENT TO CHARGE A PERSON WITH LIABILITY. EVEN IF BOOKS OF ACCOUNT ARE REGULARLY K EPT IN THE ORDINARY COURSE OF BUSINESS, THE ENTRIES THEREIN SH ALL NOT ALONE BE SUFFICIENT EVIDENCE TO CHARGE ANY PERSON WITH LI ABILITY. IT IS INCUMBENT UPON THE PERSON RELYING UPON THOSE ENTRIE S TO PROVE THAT THEY ARE IN ACCORDANCE WITH FACTS. THE BOMBAY HIGH COURT IN CIT V DEVESH AGARWAL [2017] 81 TAXMANN.COM 257 ( BOM)(HC) (PG. NO. 105-106) HAS HELD THAT NO ADDITION CAN BE MADE ON THE BASIS OF PRESUMPTIONS, SURMISES AND CONJECTURES. IN VIEW OF THESE FACTS AND THE DECISIONS AS STATED ABOVE, WE A RE INCLINED TO UPHOLD THE ORDER PASSED BY THE LD CIT(A) ON THIS IS SUE. THE GROUND NO. 2 IS ALLOWED. 44. IN THE RESULT THE APPEALS FOR 2005-06, 2006-07, 2007-08 & 2011-12 AND CROSS OBJECTIONS OF THE ASSESSEE FOR AY 2009-10 & 2010-11 ARE ALLOWED WHILE CROSS OBJECTION OF THE AS SESSEE FOR 2008-09 AND APPEALS OF THE REVENUE FOR 2009-10, 201 0-11 & 2011-12 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.07.2021. SD/- SD/- (RAMLAL NEGI ) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23.07.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT ITA NOS.2938, 2939 & 2940/M/2015 & ORS M/S. MATRIX INDIA ENTERTAINMENT CONSULTANTS PVT. LT D 25 THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.