M/s. M.L. Singhi & Associates (P) Ltd., New Delhi V. DCIT, New Delhi

ITA 3335/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0695 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Gift; Search and seizure; Loose papers; Document seized; Opportunity of being heard; Principle of natural justice; Source of fund; Question of law; Corroborative evidences; Accommodation entries; Block assessment; Onus to prove; Documents seized
• Section: 143(3); 133A; 153A; 260A; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 3335/DEL/2017 : ASSTT. YEAR : 2006 - 07 ITA NO. 3336/DEL/2017 : ASSTT. YEAR : 2007 - 08 ITA NO. 3337/DEL/2017 : ASSTT. YEAR : 200 8 - 09 M/S M.L. SINGHI & ASSOCIATES (P) LTD., BRAHMAPUTRA HOUSE, A - 7, NH - 8, MAHIPALPUR CROSSING, MAHIPALPUR, NEW DELHI - 110037 VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 7, NEW DELHI (APPELLANT) (RESPONDE NT) PAN NO. A AA CM8160E ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH. PIYUSH KUMAR KAMAL, ADV. REVENUE BY : SMT. SHEFALI SWAROOP , CIT DR SH. S. R. SENAPATI, SR. DR DATE OF HEARI NG : 18.06 .201 8 DATE OF PRONOUNCE MENT : 17 .09 .201 8 ORDER PER N. K. SAINI, AM : THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 27.03.2017 OF LD. CIT(A) - 35, NEW DELHI. 2. SINCE, THE APPEAL S RELATE TO THE SAME ASSESSEE, HAVING COMMON ISSUES, WERE HEARD TOGETHER, SO, THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. AT THE FIRST INSTANCE, WE WILL DEAL WITH THE APPEAL IN ITA NO. 3335/DEL/2017 FOR THE ASSESSMENT YEAR 2006 - 07. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 2 1 . THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 35, NEW DELHI HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE INITIATION OF PROCEEDINGS U/S 153A OF THE ACT AN D, FRAMING OF ASSESSMENT U/S 153A/143(3) OF THE ACT SINCE NO INCRIMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH CONDUCTED ON THE APPELLANT AND THEREFORE, BOTH THE NOTICE ISSUED AND, ASSESSMENT FRAMED WERE WITHOUT JURISDICTION AND, DESERVED TO BE QUASHE D AS SUCH. 1.1 THAT ADDITION MADE AND UPHELD OF RS. 87,00,000/ - IS WITHOUT JURISDICTION SINCE IT IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF SEARCH ON THE APPELLANT, AS HAS BEEN ALSO HELD BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CI T VS. KABUL CHAWLA REPORTED IN 380 1TR 573. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING AN ADDITION MADE BY LEARNED DEPUTY COMMISSIONER OF INCOME OF RS. 87,00,000/ - ON ACCOUNT OF FOLLOWING SUMS RECEIVED FROM THE SHARE APPLICANT AS SHARE CAPITAL AND ERRONEOUSLY HELD AS UNEXPLAINED CASH CREDITS UNDER SECTION 68 OF THE ACT PARTICULARLY WHEN NO INCRIMINATING MATERIAL EITHER IN THE SHAPE OF UNEXPLAINED CASH OR INVESTMENT OR DOCUMENT HAD BEEN DETECTED AS A RESULT OF SEARCH ON THE APPELLANT COMPANY OR EVEN GATHERED IN THE INSTANT ASSESSMENT PROCEEDINGS: SR. NO. NAME OF THE COMPANY NO OF SHARES NOMINAL VALUE OF SHARE (RS) I) SPA STOCK SECURITIES (P) LTD 800000 80,00,000 II) MEENAKSHI OVERSEAS (P) LT D 40000 4,00.000 II I) TVF FINANCE & INVESTMENT (P) LTD 30000 3,00,000 TOTAL 870000 87,00,000 2.1 THAT WHILE SUSTAINING THE AFORESAID ADDITION THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS COMPLETELY OVERLOOKED THAT THERE WAS NO ADVERSE MATER IAL ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 3 BROUGHT ON RECORD BY THE LEARNED ASSESSING OFFICER TO ASSUME THAT CREDITS BY WAY OF SHARE CAPITAL REPRESENTS UNEXPLAINED CASH CREDIT AND, BURDEN WHICH LAY UPON THE ASSESSEE IN TERMS OF SECTION 68 OF THE ACT HAD NOT BEEN DISCHARGED. 2.2 THAT THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT ONCE THE AFORESAID SHARE APPLICANT HAD DULY CONFIRMED THE INVESTMENT MADE, HE COULD NOT HAVE UPHELD THE ADDITION ON ARBITRARY GROUNDS AND THAT TOO WITHOUT BRINGING ANY EVIDENCE OR EVEN AL LEGING THAT AFORESAID CREDITS BY WAY OF SHARE CAPITAL EMANATED FROM THE SOURCE OF FUNDS PROVIDED BY THE APPELLANT COMPANY. 2.3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT ALL THE SHAREHOLDERS WERE CORPORATE ENTITIES , DULY ASSESSED TO TAX AND, HAD SUBSCRIBED TO SHARE - CAPITAL BY ACCOUNT PAYEE CHEQUES AND SUPPORTED BY NECESSARY DOCUMENTS AND THEREFORE, ONCE ALL SUCH SHAREHOLDERS WERE IDENTIFIABLE COMPANIES, SHARE CAPITAL RECEIVED COULD NOT IN LAW OR ON FACT BE BROUGHT T O TAX U/S 68 OF THE ACT. 2.4 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO FAILED TO APPRECIATE THAT APPELLANT HAD PLACED ON RECORD VOLUMINOUS EVIDENCES IN THE SHAPE OF AUDITED FINANCIAL STATEMENT, ANNUAL RETURNS, ORDERS OF ASSESSMENT OF THE SHARE APPLICANT TO DISCHARGE THE BURDEN WITH REGARD TO BOTH GENUINENESS OF THE TRANSACTIONS AND CREDITWORTHINESS OF THE SHARE APPLICANTS AND THEREFORE, THERE IN ABSENCE OF ANY WHISPER TO REBUT THE SAID EVIDENCE, THE CREDITS COULD NOT ARBITRARILY BE REG ARDED AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. 2.5 THAT FURTHER MORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS PROCEEDED TO CONFIRM THE ADDITION ON MERE SPECULATION, GENERALIZED STATEMENTS, THEORETICAL ASSUMPTIONS AND ALLEGATIONS AND ASSERTIONS, ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 4 WITHOUT THERE BEING ANY SUPPORTING EVIDENCE AND IS THEREFORE NOT IN ACCORDANCE WITH LAW. 3. THAT BOTH THE AUTHORITIES BELOW HAVE FRAMED THE IMPUGNED ORDER WITHOUT GRANTING SUFFICIENT PROPER OPPORTUNITY TO THE APPELLANT COMPANY AND THEREFO RE THE SAME ARE CONTRARY TO PRINCIPLE OF NATURAL JUSTICE AND HENCE VITIATED. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST UNDER SECTION 234A, U/S 234B, U/S 234C AND U/S 234D OF THE ACT WHICH ARE NOT LEVIABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT COMPANY. IT IS THEREFORE, PRAYED THAT, IT BE HELD THAT ASSESSMENT MADE BY THE LEARNED ASSESSING OFFICER AND SUSTAINED BY THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) BE QUASHED AND, FURTHER ADDITION SO UPHELD BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALONGWITH INTEREST LEVIED BE DELETED AND APPEAL OF THE APPELLANT COMPANY BE ALLOWED. 4. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL VIDE GROUND N OS. 1 TO 3 RELATES TO THE SUSTENANCE OF ADDITION OF RS.87,00,000/ - ON ACCOUNT OF SHARE APPLICATION MONEY , TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN THE ABSENCE OF INCRIMINATING M ATERIAL FOUND AS RESULT OF SEARCH. 5. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME ON 28.10.2006 DECLARING AN INCOME OF RS.13,559/ - WHICH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERA TION U/S 132 OF THE ACT WAS ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 5 CONDUCTED IN BRAHMAPUTRA GROUP OF CASES INCLUDING THE ASSESSEE ON 28.09.2010 AND VARIOUS BOOKS OF ACCOUNTS AND DOCUMENTS INCLUDING THOSE BELONGING TO THE ASSESSEE WERE FOUND AND SEIZED. THEREAFTER, THE AO ISSUED NOTICE U/S 153A OF THE ACT ON 02.02.2012 REQUIRING THE ASSESSEE TO FILE THE RETURN OF ITS INCOME. IN RESPONSE, THE ASSESSEE VIDE LETTER DATED 13.03.2012 SUBMITTED THAT THE ORIGINAL RETURN FILED BY IT MAY BE TREATED TO HAVE BEEN FILED IN THIS REGARD. HOWEVER, THE ASSESSEE FILED OBJECTION AGAINST THE ISSUANCE OF NOTICE U/S 153A OF THE ACT WHICH WAS DISPOSED OFF BY THE AO VIDE LETTER DATED 31.12.2013. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEA R UNDER CONSIDERATION, THE ASSESSEE HAD RAISED SHARE CAPITAL MONEY TO THE TUNE OF RS.87,00,000/ - FROM THE KOLKATA/HOWRAH BASED COMPANIES AS PER FOLLOWING DETAILS: SI. NO. NAME AND ADDRESS OF THE COMPANY NO. OF SHARES NOMINAL VALUE OF SHARE (RS.) PREMIUM PAID PER SHARE (RS.) DATED OF ALLOTMENT 1. SPA STOCK SECURITIES P. LTD. 2A, GANESH CHANDRA AVENUE, 6 TH FLOOR, R. NO. 8E, KOLKATA 8,00,000 80,00,000 (RS. 10 PER SHARE) -------------- 07.11.2005 2 MINA KSHI OVERSEAS P. LTD., C - 4/151, 1 ST FLOOR, SECTOR - 6, ROHINI, DELHI - 85 40, 000 4,00.000 ( RS. 10 PER SHARE) --------------- 31.03.2006 3 TVF FINANCE & INVESTMENT P. LTD., B - 156, 1 ST FLOOR, PHASE - 1, ASHOK VIHAR, DELHI 30,000 3,00,000 (RS. 10 PER SHARE) ----------- 31.03.2006 7 . THE AO CONTROVERTED THE ASSESSEE WITH THE RESULT OF INVESTIGATION MADE BY THE DEPARTMENT AND ASKED TO PRODUCE THE ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 6 AFORESAID SHAREHOLDER COMPANIES THROUGH THEIR DIRECTORS FOR VERIFICATION OF GENUINENESS OF T HE INVESTMENT IN SHARES BY THEM. IT WAS POINTED OUT THAT DURING THE COURSE OF SEARCH OPERATION TO VERIFY THE EXISTENCE OF THOSE COMPANIES, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE SHARE INVESTMENT TRANSACTIONS, THE DEPARTMENT AUTHORIZED SURVEY U/S 133A OF THE ACT ON THE PREMISES OF CERTAIN SHAREHOLDER COMPANIES AT KOLKATA AND HOWRAH BUT IT WAS FOUND THAT THOSE COMPANIES WERE NOT EXISTING AT THE GIVEN ADDRESS AND/OR MERELY EXISTING ON PAPER HAVING NO OFFICE AS SUCH AND THERE F ORE, THE SURVEY OPERATIO N COULD NOT BE CARRIED OUT AND EVEN THERE AFTER, DURING POST SEARCH PERIOD FURTHER SPOT VERIFICATION S WERE CARRIED OUT BY THE INVESTIGATION WING AND THEN ALSO IT WAS CONFIRMED THAT THE ABOVE MENTIONED COMPANIES WERE NOT EXISTING AT THE GIVEN ADDRESS ES AND T HE OTHERS WERE MAINLY OPERATIONAL ON PAPER JUST TO PROVIDE ENTRIES IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONEY AND LOAN S /ADVANCES AND THAT THE SAID COMPANIES WERE NEITHER ENGAGED IN ANY RE GULAR BUSINESS OR TRADE NOR HAD CREDITWORTHINESS TO FORWARD SUCH SUBSTANTIAL AMOUNT OF FUND AS SHARE APPLICATION/SHARE CAPITAL MONEY WHICH WERE SHOWN BY THE ASSESSEE AS SHARE CAPITAL/SHARE APPLICATION MONEY RECEIPTS. THE AO ALSO POINTED OUT THAT DURING THE COURSE OF SEARCH PROCEEDING , STATEMENT OF SH. SAMPAT SHARM A, DIRECTOR IN SOME OF THE COMPANIES OF THE BRAHMPUTRA GROUP WAS RECORDED IN WHICH HE HAD STATED THAT HE HAD NO IDEA ABOUT HOW THIS SHARE CAPITAL/SHARE APPLICATION MONEY WAS RECEIVED AND THAT HE WAS JUST A DUMMY DIRECTOR IN THE COMPANY AND USED TO DO THE N EEDFUL AT THE INSTRUCTION OF ENTRUSTED PERSONS OF BRAHMAPUTRA GROUP. THE AO VIDE QUERY NO. 27 IN THE QUESTIONNAIRE ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 7 DATED 31.08.2012 CONFRONTED THE ASSESSEE WITH THE FACT THAT CERTAIN DOCUMENTS INCLUDING BLANK SINGED SHARE TRANSFER FORMS, BLANK MONEY TRANSF ER RECEIPTS, BLANK SIGNED POWER OF ATTORNEY ETC. WERE FOUND AT THE PREMISES NO. M - 3, N - 5, AZADPUR COMMERCIAL COMPLEX, NEW DELHI DURING THE COURSE OF ACTION U/S 133A OF THE ACT. IN RESPONSE TO THE ABOVE QUESTIONNAIRE, THE ASSESSEE FILED A REPLY DATED 22.02. 2013 ALONGWITH CONFIRMATIONS, BANK STATEMENTS, COPIES OF ITRS, BALANCE SHEETS ETC. OF THE INVESTOR COMPANIES BASED AT KOLKATA AND HOWRAH WHICH WERE NOT FOUND TO BE SATISFACTORY BY THE AO WHO OBSERVED THAT THE ASSESSEE DID NOT PRODUCE THE COMPANIES THROUGH THEIR DIRECTORS FOR VERIFICATION AND NO EXPLANATION HAD BEEN FILED IN RESPECT OF QUERY NO. 27. THE AO ALSO POINTED OUT THAT DURING THE COURSE OF SEARCH OPERATION IN BRAHMPUTRA GROUP OF CASES, CARRIED OUT AT PREMISES A - 7, MAHIPALPUR, NEW DELHI, THE FOLLOWIN G INCRIMINATING DOCUMENTS WERE INTER ALIA SEIZED BY PARTY BA - 5: I. PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO F.Y. 2009 - 10) - ON THE BACK SIDE OF THIS PAGE RECORDING IS MADE IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM P. LTD.' AGAINST WHICH RS. 50 LAK HS IS WRITTEN. II. PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT AS WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAL AGGARWAL DATED 31.05.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI L AL AGGARWAL (MLA) IS MADE III. THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTIONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 8 IV. PAGE 1 OF ANNEXURE A - 10 - IT CO NTAINS A HAND WRITTEN EXTRACT OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE NAME OF M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARWAL. THE ENTRIES ARE FOR THE DATE 28. 05.2008, THE DATE OF WRITING OF THIS PAGE. V. PAG E NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME OF MR. A SINGHAL AND M.L. AGGARWALA DIVIDING INTO RS. 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. 8 . THE AO OBSERVED THAT S H. SAMPAT SHARMA WHOSE STATEMENT WAS RECORDED DURING THE COURSE OF SEARCH, DENIED TO KNOW ABOUT THE COMPANIES REGISTERED AT KOLKATA WHO INVESTED IN ASSESSEE COMPANY AND M/S BRAHMAPUTRA FINLEASE PVT. LTD. ON HIGH PREMIUM WHICH PROVED THAT THIS GROUP HAD BEE N USING SH. SAMPAT SHARMA AND SMT. KAVITA SHARMA AS DUMMY DIRECTORS IN THE ABOVE TWO COMPANIES WHICH WERE THE ASSOCIATED COMPANIES OF THIS GROUP , TO BRING BACK THEIR UNACCOUNTED/UNDISCLOSED INCOME IN THE GUISE OF SHARE CAPITAL/SHARE APPLICATION MONEY RECEI PTS. HE ALSO POINTED OUT THAT SH. SAMPAT SHARMA IN HIS STATEMENT HAD ALSO ADMITTED THAT THE SHARE APPLICATION MONEY RECEIPTS HAD BEEN ROUTED BACK TO MAIN BRAHMAPUTRA COMPANIES VIZ. BRAHMAPUTRA INFRASTRUCTURE LTD., BRAHMAPUTRA INFRA PROJECT LTD. AND OTHERS IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONE Y/ADVANCES ETC. THE AO ALSO OBSERVED THAT ADIT(INVESTIGATION), UNIT - III(3), KOLKATA VIDE HIS LETTER F.NO. ACIT(INV.)/KOL./10 - 11/7879 DATED 28.02.2011 HAD SUBMITTED HIS REPORT ON THE INVESTIGATION M ADE IN R ESPECT OF THE COMPANIES, L IST OF THE SAME IS MENTIONED BY THE AO IN THE ASSESSMENT ORDER DATED 22.03.2013, FOR THE COST OF REPETITION, THE ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 9 SAME IS NOT REPRODUCE D HEREIN. THE AO ON THE BASIS OF THE CORRESPONDENCES WITH THOSE COMPANIES AND ENQUIRY REPORTS OF THE INSPECTORS OF THE DEPARTMENT, THE ADIT(INVESTIGATION), UNIT - III(3), KOLKATA , OBSERVED THAT THE SAID COMPANIES WERE MERE PAPER COMPANIES AND THEY HAD NO ACTUAL BUSINESS ACTIVITY. THEREFORE, THE INVESTMENT MADE BY THOSE COMPANIES IN THE SHARE CAPITAL OF BRAHMAPUTRA GROUP OF CASES, APPEARED TO BE NON - GENUINE. THE AO POINTED OUT THAT THE DDIT(INVESTIGATION), UNIT - III(3), KOLKATA VIDE HIS REPORT DATED 22.03.2013 STATED AS UNDER: WITH REFERENCE TO THE ABOVE, IT IS KINDLY SUBMITTED THAT AS MOST OF THE COMPAN IES WERE FOUND TO BE NON - EXISTENT, THEREFORE, FURTHER INVESTIGATION DID NOT BRING ANY ADDITIONAL RESULT AND STATUS OF THE REPORT REMAINS THE SAME. SO, ON THE BASIS OF INVESTIGATION DONE, IT CAN BE CONCLUDED THAT THESE COMPANIES ARE JAMAKHARCHI COMPANIES OF KOLKATA HAVING NO REAL BUSINESS AND FORMED FOR THE PURPOSE OF PROVIDING ACCOMMODATION ENTRY IN THE FORM OF SHARE CAPITAL AND UNSECURED LOANS MOSTLY. 9 . THE AO MADE THE ADDITION OF RS.87,00,000/ - BY OBSERVING AS UNDER: AS A COROLLARY, THEREFORE, THE ASS ESSEE IN THIS CASE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY OF THE SHARE APPLICANTS, THEIR CREDITWORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS IN RESPECT OF SHARE CAPITAL/SHARE APPLICATION MONEY/SHARE PREMIUM AMOUNTING TO RS.87,00,000/ - AND THEREFORE, THE SAME IS BEING TREATED AS UNEXPLAINED AND WILL BE ADDED TO THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT, 1961 AS INCOME FROM OTHER SOURCES. RELIANCE IS ALSO PLACED ON THE DECISION OF THE JURISDICTIO NAL DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS NIPUN BUILDERS & DEVELOPERS (PVT.) LTD. IN ITA APPEAL NO. 120 OF 2012 DATED 07.01.2013. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 10 10 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO OBSERVED THAT THE NOTICE U/ S 153A OF THE ACT WAS RIGHTLY ISSUED BY THE AO. SH E FURTHER OBSERVED THAT THE ASSESSMENT ORDER DATED 28.03.2013 REVEALED THAT MANDATORY NOTICES UNDER THE ACT WERE DULY SERVED ON THE ASSESSEE BY THE AO, WITHIN THE GIVEN TIME FRAME AND THE AUTHORIZED REPRESE NTATIVE OF THE ASSESSEE ALSO APPEARED DURING THE ASSESSMENT PROCEEDINGS, THE AO HAD GIVEN THE QUEST IONNAIRE WHICH WERE RESPONDED. SH E ALSO OBSERVED THAT THE ASSESSEE HAD BEEN GIVEN AMPLE OPPORTUNITY FROM TIME TO TIME TO PROVE ITS CASE. THE LD. CIT(A), THER EFORE, DID NOT ACCEPT THE GROUNDS RAISED BY THE ASSESSEE ON THE VALIDITY OF THE NOTICES U/S 153A/143(2)/142(1) OF THE ACT. SH E ALSO DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE THAT THE OPPORTUNITY OF BEING HEARD HAD NOT BEEN AFFORDED TO IT BY THE AO, BY OBSERVING THAT THE ASSESSMENT R ECORD AS WELL AS REMAND REPORT OF THE AO DATED 01.02.2017 REVEALED THAT THE OPPORTUNITY OF BEING HEARD HAD BEEN OFFERED VIA ISSUE OF NOTICES, QUESTIONNAIRES AND SUBSEQUENT HEARINGS AND THAT THE REPLIES OF THE ASSESSEE WERE C ONSIDERED BY THE AO AND REJECTED THEREAFTER. 11. AS REGARDS TO THE MERIT OF THE CASE, THE LD. CIT(A) OBSERVED THAT THE AO INFORM ED THE ASSESSEE ABOUT THE FINDINGS OF THE INVESTIGATION WING OF THE DEPARTMENT DURING THE SEARCH AND POST SEARCH ENQUIRIES WHE REBY INFORMATION S AND EVIDENCE S WERE FOUND TO REVEAL THAT MOST OF THE COMPANIES WHICH WERE SHOWN AS CONTRIBUTING TO THE SHARE CAPITAL IN BRAHMAPUTRA GROUP OF COMPANIES INCLUDING THE ASSESSEE WERE PAPER COMPANIES , NON - ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 11 EXISTING AT THE REGISTERED ADDRESS ES. S H E ALSO REPRODUCED THE REMAND REPORT OF THE AO IN PARA 4.5.2 OF THE IMPUGNED ORDER WHICH READ AS UNDER: IN BRAHMAPUTRA GROUP OF COMPANIES WHEREIN IT HAS BEEN STATED THAT THESE COMPANIES ARE MERE PAPER COMPANIES AND THEY HAVE NO ACTUAL BUSINESS ACTIVITIES. FURTHER, THESE COMPANIES WERE NOT EXISTING AT THE GIVEN ADDRESS. EVEN AFTER THE SEARCH IN THE CASE, DURING POST SEARCH PERIOD FURTHER SPOT VERIFICATION WERE CARRIED OUT BY THE INVESTIGATION WING AND THEN ALSO IT WAS CONFIRMED THAT THE AB OVE MENTIONED COMP ANIES ARE NOT EXISTING AT THE GIVEN ADDRESS AND OTHERS ARE MAINLY OPERATIONAL ON PAP ER JUST TO PROVIDE ENTRIES IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONEY AND LOAN/ADVANCES. IT WAS FURTHER OBSERVED THAT THE SAID COMPANIES ARE NEITHER ENGAGED IN AN Y REGULAR BUSINESS OR TRADE NOR HAVE CREDIT WORTHINESS TO FORWARD SUCH SUBSTANTIAL AMOUNT OF FUND AS SHARE APPLICATION/SHARE C APITAL MONEY WHICH WERE SHOWN BY THE ASSESSEE COMPANY AS SHARE, CAPITAL/SH ARE APPLICATION MONEY RECEIPTS. ' 12 . THE LD. CIT(A) OBS ERVED THAT IN THE PRESENT CASE SEARCH ACTION WAS UNDERTAKEN AND A REPORT ON ENQUIRIES MADE BY DIT(INV.), NEW DELHI INTO ACCOMMODATION ENTRIES GIVEN BY ENTRY OPERATORS WAS RECEIVED. THOSE ENQUIRIES WERE INITIATED TO PROBE INTO SOME BANK ACCOUNT WHICH WERE U SED TO ISSUE CHEQUES TO THE ENTRY SEEKERS OR BENEFICIARIES AGAINST CASH PAID BY THEM TO THE ENTRY OPERATORS AND THOSE INVESTIGATIONS LED TO REVEALING OF MANY BANK ACCOUNT WHICH WERE BEING USED BY THE ENTRY OPERATORS FOR THE PURPOSE OF GIVING ACCOMMODATION ENTRIES. ACCORDING TO THE LD. CIT(A) , THE MODUS OPERANDI ADOPTED BY THE BENEFICIARIES OF THE SERVICES OF ACCOMMODATION ENTRY PROVIDERS WERE DETECTED TO BE AS UNDER: ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 12 (I) THE PERSONS WHO HAD UNACCOUNTED MONEY OR THE BENEFICIARY WOULD APPROACH THE ENTRY OPER ATOR AND WOULD HAND OVER CASH (PLUS COMMISSION) TO THE LATTER. (II) THE ENTRY OPERATOR IN TURN WOULD ISSUE CH EQUE/DDS, IN THE NAME OF THE BENEFICIARY FROM THE SAME ACCOUNT (IN WHICH CASH IS DEPOSITED) OR ANOTHER ACCOUNT IN WHICH FUNDS ARE TRANSFERRED THRO UGH CLEARI NG IN TWO OR MORE STAGES. (III) THE BENEFICIARY THEREAFTER DEPOSITED THESE INSTRUMENTS IN ITS BANK ACCOUNT AND THE MONEY WOULD COME TO ITS REGULAR BOOKS OF ACCOUNT IN THE FORM OF SHARE APPLICATION MONEY, OR GIFTS ETC, THROUGH BANKING CHANNEL. 1 3 . ON THE BASIS OF THE AFORESAID MODUS OPERANDI AND THE EXTENSIVE ENQUIRIES CARRIED OUT BY THE DIT(INV.), NEW DELHI, T HE LD. CIT(A) OBSERVED IN PARA 4.5.6 OF THE IMPUGNED ORDER AS UNDER: (I) IN THE SEARCH AND POST SEARCH ENQUIRY BY THE INVESTIGATION WING OF THE DEPARTMENT, ON SPOT VERIFICATION, STATEMENT ON OATH OF DIRECTORS OF BHARMAPUTRA GROUP OF COMPANIES AS WELL AS CHARTED ACCOUNTANT FIRMS AND AUTHORIZED REPRESENTATIVE WERE CARRIED OUT TO TRACK THE UNDISCLOSED AND UNEXPLAINED SOURCE OF SHARE CAPITAL. (II) THE ENQUIRIES CONDUCTED DURING POST SEARCH INVESTIGATIONS AS WELL AS ASSESSMENT PROCEEDINGS, REVEALS THE EXTENSIVE USE OF ACCOMMODATION ENTRIES. (III) IT WAS FOUND THAT THE MODUS OPERAND! ADOPTED BY THE ENTRY OPERATORS IS THAT THESE ENTRY PROVIDERS ISSUE CHEQUES IN THE FORM OF SHARE CAP I T AL FROM THE PAPER COMPANIES AGAINST CASH PAID TO THEM BY THE APPELLANT. (IV) THIS FACT IS FURTHER CORROBORATED BY THE INVESTIGATIONS WHICH PROVED THAT THE COMPANIES FROM WHERE SHARE CAPITAL IS BEING PROVIDED, ARE NE ITHER ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 13 ENGAGED IN ANY BUSINESS ACTIVITY NOR HAVE SUFFICIENT FUNDS TO CONTRIBUTE TOWARDS SHARE CAPITAL. 14 . THE LD. CIT(A) ALSO OBSERVED TH AT EVEN IF ONE TAKES INTO CONSIDERATION THAT SH. SAMPAT SHARMA WAS A DUMMY DIRECTOR, THEN THE ASSESSEE SHOULD HAVE EX PLAINED AS TO WHY HE HAD BEEN KEPT AS A DUMMY PURPOSE FOR SUCH A MEASURE AND THAT IF SH. SHARMA HAD THE AUTHORITY TO SIGN DOCUMENTS OF THE COMPANY THEN HOW CAN HE BE TAKE N ONLY BEING A DUMMY DIRECTOR. SH E CONCLUDED THAT SH. SAMPAT SHARMA WAS A DUMMY ONLY F OR THE PURPOSE OF PLEADING IGNORANCE FOR THE MODUS OPERANDI OF THE ASSESSEE S AFFAIRS AND FOR NOT REVEALING THE SAME TO THE TAX AUTHORITIES AND I N REALITY, HE WAS FULLY AWARE OF THE ASSESSEE COMPANY S STYLE OF WORKING AND APPEARED AS AN IMPORTANT INSTRUME NT IN THE NETWORK OF ROUTING UNDISCLOSED INCOME AS SHARE CAPITAL. 15. THE LD. CIT(A) HELD THAT THE AO HAD RIGHTLY MENTIONED THAT MERELY THE FACT THAT TRANSACTION WAS THROUGH BANKING CHANNELS OR THAT ALL THE RELEVANT DOCUMENTS HAD BEEN SUBMITTED COULD NOT BE ENOUGH TO DISCHARGE THE ONUS OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION. THE LD. CIT(A) ALSO OBSERVED THAT THE TRANSACTION CAME INTO OPEN DURING A SEARCH OPERATION ON BRAHMAPUTRA GROUP AND ALL THE COMPANIES WHO HAD APPARENTLY INVESTED IN THE ASSESSEE COMPANY WERE A PART OF THE SAME GROUP AND WERE SURVEYED ALONGWITH. THE LD. CIT(A) REFERRED TO THE FOLLOWING JUDICIAL PRONOUNCEMENTS OF THE VARIOUS HON BLE HIGH COURTS: MAF ACADEMY PVT. LTD. ORDER DATED 28.11.2013 (DEL.) CIT VS NR PORTFOLIO PVT. LTD. ORDER DATED 22.11.2013 ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 14 A. GOVINDARAJULU MUDALIAR VS CIT (1958) 34 ITR 807 (SC) CIT VS M. GANAPATHI MUDALIAR (1964) 53 ITR 623 (SC) CIT VS STELLER INVESTMENT LTD. (1991) 192 ITR 287 (DEL.) CIT VS SOPHIA FINANCE LTD. (1994) 205 ITR 98 (FB) (DEL.) CIT VS NOVA PROMOTERS AND FINLEASE (P) LTD. NIPUN BUILDERS AND DEVELOPERS (2013) 350 ITR 407 (DEL.) M/S NAVODAYA CASTLES PVT. LTD. ORDER DATED 25.08.2014 (DEL.) CIT VS DURGA PRASAD MORE (1971) 82 ITR 540 (SC) CIT VS MAF ACADEMY P. LTD. (2014) 206 DLT 277 ( DEL.) 16 . THE LD. CIT(A) OBSERVED THAT THE AFORESAID QUOTED CASE LAWS HAD DISCUSSED ALL MAJOR DECISIONS CONCERNING ADDITION S ON ACCOUNT OF INTRODUCTION OF SHARE CAPITAL INCLUDING THE DECISIONS IN FAVOUR OF BOTH THE ASSESSEE AND THE REVENUE. SH E ALSO OBSER VED THAT IT WAS CLEARLY HELD THAT DOCUMENTS LIKE CERTIFICATE OF INCORPORATION, PAN NUMBER, IT RETURNS ETC. WERE RELEVANT FOR THE PURPOSE OF IDENTIFICATION, BUT HAD THEIR LIMITATION WHEN THERE WAS EVIDENCE AND MATERIAL TO SHOW THAT THE SUBSCRIBER WAS A PAPE R COMPANY AND NOT A GENUINE INVESTOR AND THAT AT BEST THESE WERE SELF - SERVING STATEMENTS IN DOCUMENTS . ACCORDING TO THE LD. CIT(A), THE TAXING AUTHORITIES ARE NOT REQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUME NTS PRODUCED BEFORE THEM BUT HAS TO LO OK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY TO THE RECITALS MADE IN THOSE DOCUMENTS. THE LD. CIT(A) ACCORDINGLY CONFIRMED THE ADDITION MADE BY THE AO. 17 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 15 BELOW AND FURTHER SUBMITTED THAT THE ORIGINAL RETURN OF INCOME WAS FILED ON 28.10.2006 ALONGWITH AUDITED FINANCIAL STATEMENTS AND TAX AUDIT REPORT. A REFERENCE WAS MADE TO PAGE NOS. 1 TO 253 OF THE ASSESSEE S PAPER BOOK . IT WAS FURTHER SUBMITTED THAT THE ASSESSMENT U/S 143(3) OF THE ACT WAS FRAMED VIDE ORDER DATED 28.11.2008 BY MAKING THE ADDITIONS AND THEREAFTER A SEARCH WAS CARRIED OUT ON 28.09.2010 ON BRAHMAPUTRA GROUP AND THE NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 02.02.2012 , I N RESPONSE TO WHICH, THE ASSESSEE REPLIED ON 13.03.2012 AND FILED THE RETURN OF INCOME DECLARING THE SAME INCOME WHICH WAS DECLARED IN THE ORIGINAL RETURN OF INCOME. HOWEVER, THE AO MADE THE ADDITI ON OF RS.87,00,000/ - . IT WAS C O NTENDED THAT THE ASSESSMENT FRAMED BY THE AO U/S 143(3) OF THE ACT WAS A NON - ABATED ASSESSMENT AND THAT NO INCRIMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH . IT WAS FURTHER CONTENDED THAT THE AO REFERRED IN THE ASSESSMENT ORDER AT PAGE NO. 5, THE FOL LOWING DOCUMENTS IN SUPPORT OF THE IMPUGNED ADDITION: I) PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO FY 2009 - 10) - ON THE BACK SIDE OF THIS PAGE RECORDING IS MADE IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM (P) LTD.' AGAINST WHICH RS. 50 LAKHS IS WRITTE N; II) PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT AS WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAL AGGARWAL DATED 31.5.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (M LA) IS MADE; III) THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTIONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008; ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 16 IV) PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WR ITTEN EXTRACTED OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE NAME OF M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARAL. THE ENTRIES ARE FOR THE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE; AND V) PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME OF MR. A. SINGHAL AND M.L. AGGARWALA DIVIDING INTO RS. 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. 18 . IT WAS FURTHER SUBMITTED THAT NO NE OF THE ABOVE SAID DOCUMENTS HAD ANY BEARING ON ISSUE UNDER CONSIDERATION AND THE RELIANCE PLACED BY THE AO ON THE STATEMENT OF SH. SAMPAT SHARMA WAS ALSO REJECTED BY THE ITAT IN THE EARLIER ORDERS DATED 29.12.2017 IN THE CASE OF M/S BRAHMAPUTRA FINLEASE (P) LTD. IN ITA NO. 3332/DEL/2017 FOR THE ASSESSMENT YEAR 2007 - 08 AND IT HAD BEEN HELD THAT THE SIMILAR ADDITION S WERE BEYOND THE SCOPE OF ASSESSMENT U/S 153A OF THE ACT. IT WAS FURTHER SUBMITTED THAT SIMILAR ADDITIONS HAD ALSO BEEN DELETED VIDE ORDER DAT ED 23.04.2018 IN ITA NO.3406/DEL/2017 IN THE CASE OF M/S BRAHMAPUTRA REALTORS (P) LTD. VS DCIT FOR THE ASSESSMENT YEAR 2007 - 08 AND ALSO IN THE CASE OF M/S BRAHMAPUTRA HOLDINGS (P) LTD. VS DCIT IN ITA NO. 3330/DEL/2017 FOR THE ASSESSMENT YEAR 2007 - 08 VIDE O RDER DATED 29.05.2018 (COPIES OF THE SAID ORDER S WERE FURNISHED WHICH ARE PLACED ON RECORD). IT WAS CONTENDED THAT THE AFORESAID COMPANIES ALSO BELONGED TO THE SAME GROUP TO WHICH THE ASSESSEE BELONGS AND THE SEARCH WAS ALSO CONDUCTED SIMULTANEOUSLY AND TH AT THE AO RELIED THE AFORESAID REFERRED TO DOCUMENTS WHILE MAKING THE IMPUGNED ADDITIONS . THEREFORE, THE ISSUE NOW STANDS COVERED VIDE ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 17 AFORESAID REFERRED TO ORDERS IN THE CASE OF DIFFERENT COMPANIES BELONGING TO THE SAME GROUP. 19. IT WAS FURTHER SUBMITT ED THAT THE ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 09.10.2017 FOR THE ASSESSMENT YEAR 2007 - 08 WAS ALSO A NON - ABATED ASSESSMENT AND THAT FOR THE ASSESSMENT YEAR 2008 - 09, THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2008 WHICH WAS PROCESSED U/ S 143(1) OF THE ACT AND THE TIME TO ISSUE THE NOTICE U/S 143(2) OF THE ACT FOR THE REGULAR ASSESSMENT U/S 143(3) OF THE ACT HAS ALREADY EXPIRED MUCH BEFORE THE INITIATION OF THE SEARCH PROCEEDINGS AND ISSUING OF THE NOTICE U/S 153A OF THE ACT ON 02.02.2013 . THEREFORE, THE SAID ASSESSMENT S ALSO ATTAINED FINALITY AND NO ADDITION WAS CALLED FOR, THOSE ASSESSMENT YEARS I.E. 2007 - 08 & 2008 - 09 ALSO, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 20 . IN HER RIVAL SUBMISSIONS, THE LD. CIT DR REITERATED THE OBSERVATIONS MADE BY THE AUTHORITIES BELOW AND STRONG LY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) . IT WAS FURTHER SUBMITTED THAT FOR THE ASSESSMENT U/S 153A OF THE ACT , THE ADDITION NEED NOT BE RESTRICTED OR LIMITED O NLY TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE RELIANCE WAS PLACED ON THE JUDG MENT OF THE HON BLE DELHI HIGH C OURT IN THE CASE OF FILATEX INDIA LTD. VS CIT REPORTED AT 49 TAXMANN.COM 465. 21 . THE RELIANCE WAS ALSO PLACED ON THE FOLLO WING CASE LAWS: PCIT VS SHEETAL INTERNATIONAL PVT. LTD. (2017 - TIOL - 1355 - HC - DEL - IT) ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 18 PCIT VS INSTRONICS LTD. (2017) 82 TAXMANN.COM 357 (DEL.) GANPATI FINCAP SERVICES (P.) LTD. VS CIT (2017) 82 TAXMANN.COM 408 (DEL.) PCIT VS SUPER MALLS PVT. LTD. 393 ITR 557 (DEL.) PCIT VS M/S NAU NIDH OVERSEAS PVT. LTD. IN ITA NO. 58/2017 (DEL.) KAMLESHBHAI DHARAMSHIBHAI PATEL VS CIT (2013) 31 TAXMANN.COM 50 (GUJ.) RAJESH SUNDERDAS VASWANI VS ACIT (2016) 76 TAXMANN.COM 311 (GUJ.) SSP AVIATION LTD. VS DCIT 20 TAXMANN.COM 214 ( DEL.) CIT VS CLASSIC ENTERPRISES 358 ITR 465 (ALL.) SAVESH KUMAR AGARWAL VS UNION OF INDIA 353 ITR 26 (ALL.) CIT VS ANIL KUMAR BHATIA 24 TAXMANN.COM 98 (DEL.) 22 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE O N THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT A SEARCH WAS CONDUCTED SIMULTANEOUSLY IN THE CASES BELONGING TO THE BRAHMAPUTRA GROUP. FEW OF THE CASES RELATED TO THE SAID GROUP HAVING IDENTICAL FACTS AS WERE INVOLVED IN THE ASSESSEE S CASE WERE SUBJECT MATTER OF THE ADJUDICATION BEFORE THE ITAT DELHI BENCH A , NEW DELHI. EVEN THE CONTENTIONS RAISED BY BOTH THE PARTIES ARE ALSO SIMILAR. 23 . ON A SIMILAR ISSUE, THE ITAT DELHI BENCH A , NEW DELHI IN THE CASE OF BRAHMAPUTRA HOLDINGS (P) LTD. VS DCIT, CENTRAL CIRCLE - 17, NEW DELHI IN ITA NO. 3330/DEL/2017 FOR THE ASSESSMENT YEAR 2007 - 08 , VIDE ORDER DATED 29.05.2018 HAS GIVEN T HE RELEVANT FINDINGS IN PARAS 3 TO 7 , WHICH READ AS UNDER: 3. ASSAILING THE IMPUGNED ORDER, THE LD. AR, SHRI GAUTAM JAIN , ADVOCATE SUBMITTED THAT THE ORDER OF ASSESSMENT MADE U/S. 153C IN THE INSTANT CASE IS NOT ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 19 LEGALLY VALID, AS THE SAME IS NOT BASED ON ANY INCRIMINATING MATERIAL DETECTED AS A RESULT OF SEARCH ON THE SEARCHED PERSON, VIZ., BRAHMAPUTRA GROUP OF CASES. IT WA S SUBMITTED THAT NO PROCEEDINGS WERE PENDING EITHER ON THE DATE OF SEARCH OR ON THE DATE OF ISSUANCE OF NOTICE U/S. 153C OF THE ACT AND THE LD. CIT(A) HAS NOT CONSIDERED THIS SUBMISSION RAISED BEFORE HIM BY WAY OF GROUND NO. 3. IT IS ALSO THE CONTENTION OF THE ASSESSEE THAT THE DOCUMENTS ALLEGED TO HAVE BEEN REFERRED TO BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAVE BEEN USED BY THE ASSESSING OFFICER IN MULTIPLE CASES OF THE GROUP INCLUDING THE ASSESSEE WITHOUT POINTING OUT AS TO HOW THE SAID DOCUMEN TS WERE INCRIMINATING TO THE ASSESSEE OR THE SAME BELONG TO THE ASSESSEE. IT IS FURTHER SUBMITTED THAT TWO SUCH CASES OF THE GROUP ARE BRAHMAPUTRA FINLEASE (P) LTD. FOR A.Y. 2007 - 07 AND M/S. BRAHMAPUTRA REALTORS (P) LTD. (A.Y. 2007 - 08) WHERE ALSO SIMILAR A DDITIONS WERE MADE ON THE BASIS OF THE VERY SAME DOCUMENTS. THE MATTER IN THOSE CASES TRAVELLED UPTO THE TRIBUNAL AND THE IDENTICAL ADDITIONS HAVE BEEN DELETED BY THE TRIBUNAL IN BOTH THE ABOVE CASES VIDE ORDERS DATED 29.12.2017 AND 23.04.2018. IT WAS NEXT CONTENDED ON BEHALF OF THE ASSESSEE THAT NONE OF THE DOCUMENTS/PAPERS POINTED OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER BELONG TO THE ASSESSEE AND THEREFORE, THE NOTICE ISSUED U/S. 153C ITSELF IS INVALID. RELIANCE IS PL ACED ON THE FOLLOWING DE CISIONS : (I). PR. CIT VS. VINITA CHAURASIA, 394 ITR 758 (DEL.) (II). CIT VS. ARPIT LAND (P) LTD., 393 ITR 276 (BOM) (III). CANYON FINANCIAL SERVICES LTD. VS. ITO, 399 ITR 202 (DEL) (IV). CIT VS. RENU CONSTRUCTION (P) LTD. , 399 ITR 262 (DEL.) (V). PEPSI FO ODS PVT. LTD. VS. ITO, 367 ITR 112 (DEL), SLP DISMISSED BY SUPREME COURT IN APPEAL NO. 4659/2015 DATED 04.12.2017 ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 20 (VI). M/S. PEPSICO INDIA HOLDING PVT. LTD. VS. ACIT, 370 ITR 295 (DEL) (VII). CIT VS. LAVANYA LAND (P) LTD., 397 ITR 246 (BOM) 4. IT WAS NE XT CONTENDED THAT NONE OF THE DOCUMENTS REFERRED TO BY THE ASSESSING OFFICER ARE THE MATERIAL, MUCH LESS INCRIMINATING MATERIAL, TO DENOTE ANY INCOME OR SHARE CAPITAL AND SHARE PREMIUM AND THEREFORE, THE NOTICE ISSUED U/S. 153C IS LEGALLY INVALID, HAVING B EEN ISSUED WITHOUT ANY JURISDICTION. RELIANCE IS FURTHER PLACED ON THE FOLLOWING DECISIONS IN SUPPORT: (I). CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY, 378 ITR 84 (BOM) UPHELD BY HON BLE SUPREME COURT (397 ITR 344(SC) (II). CIT VS. RRJ SECURITIES LTD., 3 80 ITR 612 (DEL.) (III) PR. CIT VS. INDEX SECURITIES (P) LTD., 157 DTR 20(DEL) 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE DECI SIONS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LD. CIT(A) HAS PASSED A REASONED ORDER WHICH NEEDS NOT TO BE INTERFERE D WITH. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD INCLUDING THE DECISIONS CITED. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFFICER WHILE INVOKING THE PROVISIONS OF SECTION 153C AND ISSUING NOTICE UNDER THAT SECTION TO THE ASSESSEE, HAS CONSIDERED THE FOLLOWING DOCUMENTS FOUND AS A RESULT OF SEARCH AT THE PREMISES OF BRAHMAPUTRA GROUP OF CASES, BELONGING TO THE ASSESSEE: I) PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO FY 2009 - 10) - ON THE BACK SIDE OF THIS PAGE RECORDING IS MADE IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM (P) LTD.' AGAINST WHICH RS. 50 LAKHS IS WRITTEN; ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 21 II) PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT A S WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAL AGGARWAL DATED 31.5.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (MLA) IS MADE; III) THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTIONS THAT SARA T AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008; IV) PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WRITTEN EXTRACTED OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE NAME OF M.L. AGGARW AL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARAL. THE ENTRIES ARE FOR THE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE; AND V) PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME OF MR. A. SINGHAL AND M.L. A GGARWALA DIVIDING INTO RS. 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. THESE DOCUMENTS LED THE ASSESSING OFFICER TO DOUBT SHARE CAPITAL RAISED BY THE ASSESSEE AND TO MAKE ADDITION OF RS.10,00,000/ - U/S. 68 OF THE ACT. WE FIND CONSIDERABLE SUBSTANCE IN THE CONTENTION OF THE ASSESSEE THAT THE ABOVE DOCUMENTS NEITHER GO TO SUGGEST ANY UNDISCLOSED INCOME OF THE ASSESSEE NOR ANY NEXUS WITH THE SHARE CAPITAL DECLARED BY THE ASSESSEE. IN FACT, THE ASSESSI NG OFFICER HAS DERIVED INFERENCES/PRESUMPTIONS ON THE BASIS OF ABOVE PAPERS FOUND IN THE SEARCH WITHOUT PROVING THEM AS BELONGING TO THE ASSESSEE OR THEIR NATURE BEING INCRIMINATING TO THE ASSESSEE. THEREFORE, THE ASSESSMENT ORDER CONFIRMED BY THE LD. CIT( A) IS NOT FOUND FIT TO SUPPORT, HAVING BEEN PASSED WITHOUT PROVING THE PRIMARY INGREDIENTS OF SECTION 153C OF THE ACT. IT IS WORTHWHILE TO NOTE THAT THE VERY SAME PAPERS, AS LISTED ABOVE, WERE ALSO TAKEN AGAINST THE OTHER GROUP ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 22 COMPANIES, I.E., BRAHMAPUTR A FINLEASE (P) LTD. AND M/S. BRAHMAPUTRA REALTORS (P) LTD. FOR THE ASSESSMENT YEAR 2007 - 08 AND SIMILAR ADDITIONS WERE MADE IN THOSE CASES ALSO BASED ON THE SAME SEARCH AND SAME PAPERS. HOWEVER, THE ITAT DELHI BENCH IN THE CASE OF BRAHMAPUTA FINLEASE (P) LTD. (ITA NO. 3332/DEL./2017) VIDE ORDER DATED 29.12.2017 HAS EXAMINED THE SAME DOCUMENTS AND DELETED THE ADDITION BY QUASHED THE ASSESSMENT ORDER AS U NDER : 4.10 ANOTHER ARGUMENT, MADE BY THE LD. CIT(DR) IN SUPPORT OF HER CLAIM OF INCRIMINATING MATERIAL W AS THAT THE ITEM NO.(I) MENTIONED ON PAGE 6 OF THE ASSESSMENT ORDER, WAS INCRIMINATING IN NATURE AS IT CONTAINED DETAIL OF ACCOMMODATION ENTRY. FOR HAVING CLARITY ON THE ISSUE RAISED BY THE LD. CIT(DR), WE MAY LIKE TO REPRODUCE THE RELEVANT PART OF THE ASS ESSMENT ORDER AS UNDER: APART FROM, DURING THE COURSE OF SEARCH OPERATION IN BRAHMAPUTRA GROUP OF CASES, CARRIED OUT AT PREMISES A - 7, MAHIPALPUR, NEW DELHI, THE FOLLOWING INCRIMINATING DOCUMENTS WERE INTER ALIA SEIZED BY PARTY BA - 5 . I. PAGE NO. 23 OF ANN EXURE A - 6 (A DIARY RELATING TO F.Y. 2009 - 10) - ON THE BACK SIDE \ OF THIS PAGE RECORDING IS MADE IN THE NAME OF SHRI SHYAM TREXIM & FINCOM P. LTD. AGAINST WHICH RS. 50 LAKHS IS WRITTEN. II. PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS ME NTIONING DEBIT AS WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAI AGGARWAL DATED 31.05.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (MLA) IS MADE . III. THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 ME NTIONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 23 IV. PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WRITTEN EXTRACT OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE MAI N OF M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARWAL. THE ENTRIES ARE FOR THE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE. V. PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME MR. A SINGHAL AND M.L. AGGARWALA DIVIDING INTO RS. 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION, THE ASSESSEES OF THIS GROUP HAVE NOT BEEN ABLE TO EXPLA IN THE ABOVE ENTRIES SATISFACTORILY. THOUGH THESE ENTRIES ARE TO BE DEALT WITH IN RELEVANT CASES BUT THIS ALSO PROVES THE FACT THAT THIS GROUP IS ENGAGED IN BRING BACK THEIR UNACCOUNTED / UNDISCLOSED INCOME IN THE GUISE OF SHARE CAPITAL/ SHARE APPLICATI ON MONEY. 4.11 WE FIND THAT THE ITEM NO. (I) CONTAINS RECORDING IN THE NAME OF SHRI SHYAM TREXIM & FINCOM PVT. LTD . THE ASSESSING OFFICER HAS NOWHERE BROUGHT ON RECORD HOW THE SAID RECORDING ON THE PAGE RELATES TO THE ADDITION IN QUESTION OF SHARE CAPI TAL. THE LD. CIT(DR) ALSO COULD NOT EXPLAIN AS HOW THE SAID RECORDING WAS RELATED TO THE ADDITION IN QUESTION MADE IN RESPECT OF ALLEGED UNEXPLAINED SHARE CAPITAL. SHE ONLY STATED THAT SAID RECORDING ON THE PAGE REFLECTED ACCOMMODATION ENTRY OBTAINED BY TH E BRAHMAPUTRA GROUP AND BUT NO DOCUMENTARY EVIDENCE REGARDING THE CLAIM THAT THE DOCUMENT WAS INCRIMINATING QUA THE ADDITION, ARE FILED. IN RESPECT OF THE ITEMS NO. (II) TO (V), THE LD. COUNSEL HAS SUBMITTED THAT ADDITIONS IN RESPECT OF THE AMOUNTS MEN TIONED IN THE DOCUMENT HAS BEEN MADE IN THE CASE OF ANOTHER COMPANY NAMELY M/S BRAHMAPUTRA ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 24 INFRASTRUCTURE LTD IN ASSESSMENT YEAR 2009 - 10. THIS FACT WAS NOT CONTROVERTED BY LD. CIT(DR). THUS, WE FIND THAT NO INCRIMINATING MATERIAL QUA THE ADDITION MADE IS FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. ACCORDINGLY, ABOVE CONTENTION OF LD. CIT(DR) ARE REJECTED. SHE ALSO SUBMITTED THAT DURING THE COURSE OF SEARCH, HARD DISKS OF COMPUTERS AND OTHERS MATERIAL WERE ALSO SEIZED WHICH CON TAINED INCRIMINATING MATERIAL. THE LD. CIT(A) FAILED TO SUBSTANTIATE THE CLAIM EITHER BY THE IMPUGNED ASSESSMENT ORDER OR THROUGH ANY OTHER DOCUMENTARY EVIDENCE. IN THE ASSESSMENT ORDER, THERE IS NO MENTION THAT ANY INCRIMINATING MATERIAL IS FOUND IN HARD DISK ETC. THUS, THIS CONTENTION OF LD. CIT(A) IS ALSO REJECTED. FURTHER, THE LD. AUTHORITIES BELOW HAVE ALSO REFERRED TO THE STATEMENTS RECORDED OF SHRI SAMPAT SHARMA AGAINST THE ASSESSEE. THE SAME STATEMENTS WERE ALSO READ AGAINST M/S. BRAHMAPUTRA FI NLEASE (P) LTD. (SUPRA), WHERE, THE TRIBUNAL AFTER RELYING ON VARI OUS DECISIONS HAS HELD AS UNDER : 4.19 WE FIND THAT IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PRIVATE LIMITED (SUPRA), DESPITE THE ADMISSION OF ACCOMMODATION ENTRY IN STATEMENTS UNDER SECT ION 132(4) OF THE ACT, THE COURT HELD THAT THE STATEMENT DO NOT CONSTITUTE AS INCRIMINATING MATERIAL. IN THE INSTANT CASE, NEITHER IS THERE ANY STATEMENT OF ANY ACCOMMODATION ENTRY OPERATOR CLAIMING THAT ANY ENTRY WAS NOT PROVIDED NOR ANY DIRECTOR HAS ADMI TTED THAT ASSESSEE OBTAINED ACCOMMODATION ENTRY. THUS, THE CASE OF THE ASSESSEE IS ON BETTER FOOTING THEN THE CASE OF BEST INFRASTRUCTURE (I) P. LTD (SUPRA). IN SUCH FACTS AND CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE DELHI HIGH COU RT IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PRIVATE LIMITED (SUPRA), WE DO NOT HAVE ANY HESITATION TO HOLD THAT THE STATEMENT UNDER SECTION 132(4) OF SH. SAMPAT SHARMA ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 25 CANNOT BE TREATED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN TH E RESULT, WE HOLD THAT ADDITION OF SHARE CAPITAL IN THE YEAR UNDER CONSIDERATION HAS BEEN MADE WITHOUT RELYING ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE RESULT, WE HOLD THAT ADDITION OF SHARE CAPITAL IN THE YEAR UNDER CONSI DERATION HAS BEEN MADE WITHOUT RELYING ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 4.20 IN VIEW OF THE ABOVE FINDING, BOTH THE CONDITIONS AS COMPLETED ASSESSMENT AND NO INCRIMINATING MATERIAL, HAVE BEEN SATISFIED IN THE CASE, THUS, NO ADDITION COULD HAVE BEEN MADE IN THE INSTANT ASSESSMENT YEAR IN VIEW OF THE FINDING OF THE HON BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THE GROUNDS NO. 1 AND 1.1 OF APPEAL ARE ACCORDINGLY ALLOWED. 7. THE ABOVE DECISION OF TRIBUNAL WA S ALSO FOLLOWED BY COORDINATE BENCH IN ANOTHER GROUP CASE, NAMELY M/S. BRAHMAPUTRA REALTORS (P) LTD. VS. DCIT (ITA NO. 3406/DEL./2017) WHERE VIDE ORDER DATED 23.04.2018, THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL STOOD DELETED IN THE IDENTIC AL FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF COORDINATE BENCH AND THERE BEING NO CONTRARY MATERIAL ON RECORD AND FURTHER RELYING ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA AND PLETHORA OF OTHER DECISIONS RELIED BY THE ASSESSEE, WE FIND NO JUSTIFICATION TO SUSTAIN THE IMPUGNED ORDER AND THE ADDITION MADE AGAINST THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED, BEING FULL OF MERITS. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 26 24 . SIMILARLY, IN THE CASE OF M/S BRAHMAPUTRA REALTORS (P) LTD. VS DCIT, CENTRAL CIRCLE - 17, NEW DELHI IN ITA NO. 3406/DEL/2017 FOR THE ASSESSMENT YEAR 2007 - 08, THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 3 TO 9 OF THE ORDER DATED 23.04.2018 WHICH READ AS UNDER: 3. IT IS THE SUBMISSION OF THE LEARNED AR THAT THOUGH THE LEARNED AO MADE ANNEXURES A - 6, A - 7 AND A - 10 AS THE BASIS FOR MAKING THE ADDITION, HE FAILED TO SUBSTANTIATE HOW THESE DOCUMENTS ARE INCRIMINATING THE ASSESSEE SO AS TO MAKE THE ADDITION IN THEIR HANDS. N OWHERE LEARNED AO BROUGHT ON RECORD TO CONNECT THESE DOCUMENTS TO THE ADDITIONS UNDER THE HEAD SHARE CAPITAL AND EVEN IF THE AUTHORITY FAILED TO NOTICE THAT THE SAID DOCUMENTS GO UNEXPLAINED TO HAVE ANY NEXUS WITH THE ADDITION IN DISPUTE OR TO SHOW THAT THOSE RELATE TO ANY ACCOMMODATION ENTRIES ENTERED BY THE BRAHAMPUTRA GROUP. FURTHER, THE ADDITIONS IN RESPECT OF THE AMOUNTS MENTIONED IN SOME OF THE DOCUMENTS WERE MADE IN THE CASE OF ANOTHER COMPANY M/S BRAHMPUTRA INFRASTRUCTURE LTD. IN THE ASSTT. YEAR 2 009 - 10. THE SUM AND SUBSTANCE OF THE ARGUMENT OF THE LEARNED AR IS THAT THE DOCUMENTS NEITHER BELONG TO NOR PERTAIN TO THE ASSESSEE AND THEY DO NOT ESTABLISH ANY NEXUS AS ALLEGED BETWEEN THE CONTENTION OF THE DEPARTMENT THAT THE ASSESSEE OBTAINED THE ACCOM MODATION ENTRIES THEREUNDER AND THE ADDITIONS MADE IN THIS CASE. FOR THESE REASONS, IT IS CONTENDED THAT IN SO FAR AS ALL THE PROCEEDINGS U/S 153C OF THE ACT ARE BAD AND EVEN ON MERITS, THE ADDITION IS LIABLE TO BE DELETED. 4. ACCORDING TO THE LEARNED DR, DURING THE COURSE OF SEARCH HARD DISCS OF COMPUTERS WERE SEIZED, WHICH CONTAIN INCRIMINATING MATERIAL AND THE RECORDINGS ON THE DOCUMENTS REFLECTED ACCOMMODATION ENTRIES OBTAINED BY THE BRAHMPUTRA GROUP, AS SUCH, THE AUTHORITIES BELOW ARE JUSTIFIED IN MAK ING ADDITION AND SUSTAINING THE SAME. 5. AT THE OUTSET, LEARNED AR SUBMITTED THAT THE FIVE DOCUMENTS RELIED UPON BY THE LEARNED AO IN THIS MATTER ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 27 WERE ALSO RELIED UPON BY THE REVENUE IN THE CASE OF ANOTHER GROUP COMPANY I.E. M/S BRAHMPUTRA FINLEASE P. LTD . ITA NO.3332/DEL/2017 AND A COORDINATE BENCH OF THIS TRIBUNAL BY ORDER DATED 29.12.2017 DISCUSSED THE MATTER AT LENGTH AND FOUND THAT THE REVENUE FAILED TO BRING ON RECORD ANY COGENT REASONS TO CONNECT THESE DOCUMENTS WITH THE ADDITIONS OF SHARE CAPITAL A ND INASMUCH AS NO MATERIAL, MUCH LESS INCRIMINATING, SUPPORTING THE ADDITION IS AVAILABLE ON RECORD, THE ADDITION CANNOT BE SUSTAINED AND SINCE AS THE DOCUMENTS NEITHER BELONG TO NOR PERTAIN TO THE ASSESSEE THEREON BY APPLYING THE PRINCIPLE LAID DOWN BY TH E HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA, 380 ITR 573, THE BENCH HELD THAT NO ADDITION COULD BE SUSTAINED. 6. WE HAVE PERUSED THE RECORD. THE ASSESSMENT ORDER READS THAT THE LD. AO PLACED RELIANCE ON FIVE DOCUMENTS AND ALSO THE STATEM ENT OF ONE SHRI SAMPATH SHARMA, DIRECTOR, TO REACH THE CONCLUSION THAT THE ASSESSEE OBTAINED ACCOMMODATION ENTRIES. ON A CAREFUL PERUSAL OF THE DESCRIPTION OF THE DOCUMENTS GIVEN IN THIS MATTER WITH THE DOCUMENTS RELIED UPON IN THE CASE OF BRAHMPUTRAS FINL EASE CO. (SUPRA), WE FIND THAT THEY ARE IDENTICAL AS DEMONSTRATED BELOW: REFERENCE TO DOCUMENTS IN THE CASE OF M/S BRAHMPUTRA FINLEASE P. LTD. ITA NO.3332/DEL/2017 REFERENCE TO DOCUMENTS IN THE CASE M/S BRAHMPUTRA REALTORS P. LTD. ITA NO.3406/DEL/2017 'A PART FROM, DURING THE COURSE OF SEARCH OPERATION IN BRAHMAPUTRA GROUP OF CASES, CARRIED OUT AT PREMISES A - 7, MAHIPALPUR, NEW DELHI, THE FOLLOWING INCRIMINATING DOCUMENTS WERE INTER ALIA SEIZED BY PARTY BA - 5 I. PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO F.Y. 2009 - 10) - ON THE BACK SIDE \ OF THIS 'APART FROM, DURING THE COURSE OF SEARCH OPERATION IN BRAHMAPUTRA GROUP OF CASES, CARRIED OUT AT PREMISES A - 7, MAHIPALPUR, NEW DELHI, THE FOLLOWING INCRIMINATING DOCUMENTS WERE INTER ALIA SEIZED BY PARTY BA - 5 I. PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO F.Y. 2009 - 10) - ON THE BACK SIDE \ ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 28 PAGE RECORDING IS MADE IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM P. LTD.' AGAINST WHICH RS. 50 LAKHS IS WRITTEN. II. PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT AS WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAI AGGARWAL DATED 31.05.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (MLA) IS MADE ITA NO. 3332/DEL/2017 III. THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTI ONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008. IV. PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WRITTEN EXTRACT OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE MAIN O F M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARWAL. THE ENTRIES ARE FOR THE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE. V. PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME MR. A SINGHAL AN D M.L. AGGARWALA DIVIDING INTO RS. 25 LAKHS AND OF THIS PAGE RECORDING IS MADE IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM P. LTD.' AGAINST WHICH RS. 50 LAKHS IS WRITTEN. II. PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT AS W ELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAI AGGARWAL DATED 31.05.2008 AND FURTHER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (MLA) IS MADE ITA NO. 3332/DEL/2017 III. THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTIONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008. IV. PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WRITTEN EXTRACT OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE MAIN OF M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARWAL. THE ENTRIES ARE FOR THE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE. V. PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME MR. A SINGH AL AND M.L. AGGARWALA DIVIDING INTO RS. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 29 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION, THE ASSESSEES OF THIS GROUP HAVE NOT BEEN ABLE TO EXPLAIN THE ABOVE ENTRIES SATISFACTORILY. THOUGH THESE ENTRIES ARE TO BE DEALT WITH IN RELEVANT CASES BUT THIS ALSO PROVES THE FACT THAT THIS GROUP IS ENGAGED IN BRING BACK THEIR UNACCOUNTED/UNDISCLOSED INCOME IN THE GUISE OF SHARE CAPITAL/SHARE APPLICATION MONEY .' 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CASTING P. LTD. IS ALSO WRITTEN. DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION, THE ASSESSEES OF THIS GROUP HAVE NOT BEEN ABLE TO EXP LAIN THE ABOVE ENTRIES SATISFACTORILY. THOUGH THESE ENTRIES ARE TO BE DEALT WITH IN RELEVANT CASES BUT THIS ALSO PROVES THE FACT THAT THIS GROUP IS ENGAGED IN BRING BACK THEIR UNACCOUNTED / UNDISCLOSED INCOME IN THE GUISE OF SHARE CAPITAL/SHARE APPLICATION MONEY.' 7. ON CONSIDERING THE ABOVE DOCUMENTS VIDE PARA 4.11, A COORDINATE BENCH OF THIS TRIBUNAL CONSIDERED THE RELEVANCE OF THESE DOCUMENTS TO THE COMPANIES OF BRAHMPUTRA GROUP AND ALSO THE INCRIMINATORY NATURE OF THESE DOCUMENTS INASMUCH AS THE NAMES OF SHRI SHYAM TREXIM AND FINCOM P. LTD., SHRI MURARI LAL AGGARWAL, SHRI SARAT AGGAR5WAL, AND SHRI A. SINGHAL ARE MENTIONED IN THESE DOCUMENTS AND NOTHING INCRIMINATING THE ASSESSEE COULD BE INFERRED FROM THESE DOCUMENTS. RELEVANT OBSERVATIONS OF THE TRIBU NAL ARE AS FOLLOWS: 4.11 WE FIND THAT THE ITEM NO. (I) CONTAINS RECORDING IN THE NAME OF 'SHRI SHYAM TREXIM & FINCOM PVT. LTD'. THE ASSESSING OFFICER HAS NOWHERE BROUGHT ON RECORD HOW THE SAID RECORDING ON THE PAGE RELATES TO THE ADDITION IN QUESTION OF S HARE CAPITAL. THE LD. CIT(DR) ALSO COULD NOT EXPLAIN AS HOW THE SAID RECORDING WAS RELATED TO THE ADDITION IN QUESTION MADE IN RESPECT OF ALLEGED UNEXPLAINED SHARE CAPITAL. SHE ONLY STATED THAT ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 30 SAID RECORDING ON THE PAGE REFLECTED ACCOMMODATION ENTRY OBTAI NED BY THE 'BRAHMAPUTRA GROUP' AND BUT NO DOCUMENTARY EVIDENCE REGARDING THE CLAIM THAT THE DOCUMENT WAS INCRIMINATING QUA THE ADDITION, ARE FILED. IN RESPECT OF THE ITEMS NO. (II) TO (V), THE LD. COUNSEL HAS SUBMITTED THAT ADDITIONS IN RESPECT OF THE AMOU NTS MENTIONED IN THE DOCUMENT HAS BEEN MADE IN THE CASE OF ANOTHER COMPANY NAMELY 'M/S BRAHMAPUTRA INFRASTRUCTURE LTD' IN ASSESSMENT YEAR 2009 - 10. THIS FACT WAS NOT CONTROVERTED BY LD. CIT(DR). THUS, WE FIND THAT NO INCRIMINATING MATERIAL QUA THE ADDITION MADE IS FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. ACCORDINGLY, ABOVE CONTENTION OF LD. CIT(DR) ARE REJECTED. SHE ALSO SUBMITTED THAT DURING THE COURSE OF SEARCH, HARD DISKS OF COMPUTERS AND OTHERS MATERIAL WERE ALSO SEIZED WHICH CONTAINED INCRIMINATING MATERIAL. THE LD. CIT(A) FAILED TO SUBSTANTIATE THE CLAIM EITHER BY THE IMPUGNED ASSESSMENT ORDER OR THROUGH ANY OTHER DOCUMENTARY EVIDENCE. IN THE ASSESSMENT ORDER, THERE IS NO MENTION THAT ANY INCRIMINATING MATERIAL IS FOUND IN HA RD DISK ETC. THUS, THIS CONTENTION OF LD. CIT(A) IS ALSO REJECTED. 8. FURTHER, IN RESPECT OF RELEVANCE AND RELIABILITY OF THE STATEMENT OF SHRI SAMPATH SHARMA, DIRECTOR, THE TRIBUNAL OBSERVED AS FOLLOWS: 4.19 WE FIND THAT IN THE CASE OF BEST INFRASTRUCTU RE (INDIA) PRIVATE LIMITED (SUPRA), DESPITE THE ADMISSION OF ACCOMMODATION ENTRY IN STATEMENTS UNDER SECTION 132(4) OF THE ACT, THE COURT HELD THAT THE STATEMENT DO NOT CONSTITUTE AS INCRIMINATING MATERIAL. IN THE INSTANT CASE, NEITHER IS THERE ANY STATEME NT OF ANY ACCOMMODATION ENTRY OPERATOR CLAIMING THAT ANY ENTRY WAS NOT PROVIDED NOR ANY DIRECTOR HAS ADMITTED THAT ASSESSEE OBTAINED ACCOMMODATION ENTRY. THUS, THE CASE OF THE ASSESSEE IS ON BETTER FOOTING THEN THE CASE OF BEST INFRASTRUCTURE (I) P. LTD (S UPRA). IN SUCH FACTS AND CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 31 THE HON'BLE DELHI HIGH COURT IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PRIVATE LIMITED (SUPRA), WE DO NOT HAVE ANY HESITATION TO HOLD THAT THE STATEMENT UNDER SECTION 132(4) OF SH. SAMPAT SHARMA CANNOT BE TREATED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE RESULT, WE HOLD THAT ADDITION OF SHARE CAPITAL IN THE YEAR UNDER CONSIDERATION HAS BEEN MADE WITHOUT RELYING ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 9. ON A CONSIDERATION OF THE ENTIRE MATERIAL IN THE LIGHT OF THE LAW LAID DOWN IN THE CASE OF CIT VS. KABUL CHAWLA REPORTED IN 380 ITR 573, THE COORDINATE BENCH OF THIS TRIBUNAL CONCLUDED THAT, - 4.20 IN VIEW OF THE ABOVE FINDING, BOTH THE CONDITIONS AS COMPLETED ASSESSMENT AND NO INCRIMINATING MATERIAL, HAVE BEEN SATISFIED IN THE CASE, THUS, NO ADDITION COULD HAVE BEEN MADE IN THE INSTANT ASSESSMENT YEAR IN VIEW OF THE FINDING OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CH AWLA (SUPRA). THE GROUNDS NO. 1 AND 1.1 OF APPEAL ARE ACCORDINGLY ALLOWED. 25 . A SIMILAR VIEW HAS BEEN TAKEN BY THE ITAT DELHI BENCH A , NEW DELHI IN THE CASE OF M/S BRAHMAPUTRA FINLEASE (P) LTD. VS DCIT, CENTRAL CIRCLE - 17, NEW DELHI IN ITA NO. 3332/DEL /2017 FOR THE ASSESSMENT YEAR 2007 - 08 WHEREIN VIDE ORDER DATED 29.12.2017, THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARAS 4.7 TO 4.20 WHICH READ AS UNDER: 4.7 WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT MATERIAL ON RECORD. MAIN ISSUE IN DI SPUTE IN THE GROUNDS RAISED BEFORE US IS WHETHER ANY ADDITION COULD HAVE BEEN MADE UNDER SECTION 153A OF THE ACT IN THE CASE OF THE ASSESSEE. IN THE CASE OF KABUL CHAWLA (SUPRA) RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE, ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 32 THE HON BLE HIGH COURT OF DELH I IN PARA - 37 OF THE DECISION HAS SUMMARIZED THE LEGAL POSITION AS UNDER: SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO B E MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL AB ATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER T O ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST - SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHI CH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 33 HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. ' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARC H) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MER GES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREA DY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. (EMPHASIS SUPPLIED EXTERNALLY) 4.7.1 IN VIEW OF THE LEGAL POSITION SUMMARIZED ABOVE, THE HON BLE HIGH COURT IN PARA - 38 OF THE DECISION HELD THAT IN THE CASE, ON THE DATE OF SEARCH, IF TH E ASSESSMENT ALREADY STOOD COMPLETED, THEB IN ABSENCE OF INCRIMINATING MATERIAL, NO ADDITION COULD HAVE BEEN MADE. THE RELEVANT PARAGRAPH OF THE DECISION IS REPRODUCED AS UNDER: CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002 - 03, 2005 - 06 AND 2006 - 07 .ON THE DATE OF THE SEARCH THE SAID ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 34 ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 4.7.2 IN VIEW OF ABOVE DECISION, WE ARE REQUIRED T O EXAMINE THE TWO CONDITIONS. THE FIRST CONDITION IS WHETHER FOR THE YEAR UNDER CONSIDERATION, THE ASSESSMENT STOOD COMPLETED BEFORE THE DATE OF SEARCH OR NOT. THE SECOND CONDITION IS THAT WHETHER ANY INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF T HE SEARCH QUA THE ADDITION MADE, WHICH WAS NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 4.8 AS REGARD THE FIRST CONDITION, THE LD. COUNSEL HAS ALREADY REFERRED TO PAGE 105A OF THE PAPER BOOK, WHICH IS A COPY OF THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT ON 24/11/2009. SINCE IN THE CASE OF THE ASSESSEE SEARCH WAS CARRIED OUT ON 28/09/2010, THUS, IT IS UNDISPUTED THAT ASSESSMENT WAS COMPLETED PRIOR TO THE DATE OF SEARCH. 4.9 NOW REGARDING THE SECOND CONDITION, THE LD. CIT(DR) HAS MENTIONED THAT DOCUMENTS IMPOUNDED FROM THE PREMISES OF SH. M.L. AGGARWAL, CHARTERED ACCOUNTANT, DURING THE COURSE OF SURVEY PROCEEDING ARE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. WE DO NOT AGREE WITH THE CONTENTION O F THE LD. CIT (DR) THAT THESE MATERIALS LIKE BLANK SHARES TRANSFER FORMS ETC COULD BE TERMED AS FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF THE ASSESSEE. THE SURVEY PROCEEDINGS CARRIED OUT AT THE PREMISES OF THE CHARTERED ACCOUNTANTS, ML AGGARWAL ARE SEPARATE FROM THE SEARCH PROCEEDINGS CARRIED OUT AT THE PREMISES OF THE ASSESSEE. THERE IS NO CONCEPT OF GROUP OF ASSESSEE IN INCOME - TAX ASSESSMENTS. EACH ASSESSEE IS TREATED SEPARATELY. IF ANY MATERIAL IS FOUND DURING THE COURSE OF SEARCH FROM THE PRE MISES OF ONE ASSESSEE, IT CAN BE USED AGAINST ANOTHER ASSESSEE EITHER UNDER SECTION 153C OR UNDER SECTION 148 ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 35 OF THE ACT DEPENDING ON MATERIAL BELONGING TO OR PERTAINING TO THAT ANOTHER ASSESSEE BUT IT CANNOT BE TERMED AS MATERIAL FOUND DURING THE COURSE O F THE SEARCH OF ANOTHER ASSESSEE FOR MAKING ADDITION UNDER SECTION 153A OF THE ACT. IF ANY MATERIAL IMPOUNDED DURING THE COURSE THE SURVEY AT THE PREMISES OF ONE ASSESSEE AND FOUND TO BE BELONGING TO OR RELATED TO ANOTHER ASSESSEE, THEN ACTION MAY BE TAKEN IN TERMS OF SECTION 148 OF THE ACT DEPENDING ON THE MATERIAL FOUND BUT THAT MATERIAL CANNOT BE TREATED AS PART OF THE SEARCH CARRIED OUT AT THE PREMISES OF THE ANOTHER ASSESSEE. FURTHER, THE ASSESSING OFFICER IN THE IMPUGNED ORDER HAS NOT BROUGHT ON RECOR D WHAT WAS INCRIMINATING IN THE SAID MATERIAL IMPOUNDED FROM THE PREMISES OF SH. M.L. AGRAWAL. IN VIEW OF OUR DISCUSSION, WE REJECT THE ABOVE CONTENTIONS OF THE LD. CIT(DR) THAT ANY INCRIMINATING MATERIAL QUA THE ADDITION WAS FOUND DURING THE COURSE OF THE SEARCH ACTION UNDER SECTION 132 OF THE ACT. 4.10 ANOTHER ARGUMENT, MADE BY THE LD. CIT(DR) IN SUPPORT OF HER CLAIM OF INCRIMINATING MATERIAL WAS THAT THE ITEM NO.(I) MENTIONED ON PAGE 6 OF THE ASSESSMENT ORDER, WAS INCRIMINATING IN NATURE AS IT CONTAINED DETAIL OF ACCOMMODATION ENTRY. FOR HAVING CLARITY ON THE ISSUE RAISED BY THE LD. CIT(DR), WE MAY LIKE TO REPRODUCE THE RELEVANT PART OF THE ASSESSMENT ORDER AS UNDER: APART FROM, DURING THE COURSE OF SEARCH OPERATION IN BRAHMAPUTRA GROUP OF CASES, CARR IED OUT AT PREMISES A - 7, MAHIPALPUR, NEW DELHI, THE FOLLOWING INCRIMINATING DOCUMENTS WERE INTER ALIA SEIZED BY PARTY BA - 5 I. PAGE NO. 23 OF ANNEXURE A - 6 (A DIARY RELATING TO F.Y. 2009 - 10) - ON THE BACK SIDE \ OF THIS PAGE RECORDING IS MADE IN THE NAME OF SHRI SHYAM TREXIM & FINCOM P. LTD. AGAINST WHICH RS. 50 LAKHS IS WRITTEN. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 36 II. PAGE NO. 1 OF ANNEXURE A - 7 - ON THIS PAGE A RECORDING OF FUNDS MENTIONING DEBIT AS WELL AS CREDIT OF RS. 25 LAKHS IN THE NAME OF MURARI LAI AGGARWAL DATED 31.05.2008 AND FURTH ER COMMENTS OF THE PAYMENT OF SAME AMOUNT BY CASH TO MURARI LAL AGGARWAL (MLA) IS MADE III. THE BACK SIDE OF THE ABOVE PAGE 1 OF ANNEXURE A - 7 MENTIONS THAT SARAT AGGARWAL WAS PAID WITH CASH OF RS. 30 LAKHS BRING BACK EQUAL AMOUNT IN OTHER FORM. THE DATE OF NOTING IS 04.06.2008. IV. PAGE 1 OF ANNEXURE A - 10 - IT CONTAINS A HAND WRITTEN EXTRACT OF CASH BOOK CONTAINING ENTRY OF RS. 5 LAKHS IN THE MAIN OF M.L. AGGARWAL. IT ALSO SHOWS AS DEBIT OF RS. 3 LAKHS IN THE NAME OF SARAT AGGARWAL. THE ENTRIES ARE FOR T HE DATE 28.05.2008, THE DATE OF WRITING OF THIS PAGE. V. PAGE NO. 4 OF ABOVE ANNEXURE A - 10 CONTAINS RECORD OF 30 LAKHS IN THE NAME MR. A SINGHAL AND M.L. AGGARWALA DIVIDING INTO RS. 25 LAKHS AND 5 LAKHS RESPECTIVELY. ON THIS PAGE THE NAME OF SUDARSHAN CAS TING P. LTD. IS ALSO WRITTEN. DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION, THE ASSESSEES OF THIS GROUP HAVE NOT BEEN ABLE TO EXPLAIN THE ABOVE ENTRIES SATISFACTORILY. THOUGH THESE ENTRIES ARE TO BE DEALT WITH IN RELEVANT CASES BUT THIS ALSO PROVES THE FACT THAT THIS GROUP IS ENGAGED IN BRING BACK THEIR UNACCOUNTED/UNDISCLOSED INCOME IN THE GUISE OF SHARE CAPITAL/SHARE APPLICATION MONEY. 4.11 WE FIND THAT THE ITEM NO. (I) CONTAINS RECORDING IN THE NAME OF SHRI SHYAM TREXIM & FINCOM PVT. LTD . THE ASSESSING OFFICER HAS NOWHERE BROUGHT ON RECORD HOW THE SAID RECORDING ON THE PAGE RELATES TO THE ADDITION IN QUESTION OF SHARE CAPITAL. THE LD. CIT(DR) ALSO COULD NOT EXPLAIN AS HOW THE SAID RECORDING WAS ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 37 RELATED TO THE ADDITION IN QUESTION MADE IN RESPECT OF ALLEGED UNEXPLAINED SHARE CAPITAL. SHE ONLY STATED THAT SAID RECORDING ON THE PAGE REFLECTED ACCOMMODATION ENTRY OBTAINED BY THE BRAHMAPUTRA GROUP AND BUT NO DOCUMENTARY EVIDENCE REGARDING THE CLAIM THAT THE DOCUMENT WAS INCRIMINATING QUA THE ADDITION, ARE FILED. IN RESPECT OF THE ITEMS NO. (II) TO (V), THE LD. COUNSEL HAS SUBMITTED THAT ADDITIONS IN RESPECT OF THE AMOUNTS MENTIONED IN THE DOCUMENT HAS BEEN MADE IN THE CASE OF ANOTHER C OMPANY NAMELY M/S BRAHMAPUTRA INFRASTRUCTURE LTD IN ASSESSMENT YEAR 2009 - 10. THIS FACT WAS NOT CONTROVERTED BY LD. CIT(DR). THUS, WE FIND THAT NO INCRIMINATING MATERIAL QUA THE ADDITION MADE IS FOUND DURING THE COURSE OF SEARCH FROM THE PREMISES OF THE ASSESSEE. ACCORDINGLY, ABOVE CONTENTION OF LD. CIT(DR ) ARE REJECTED. SHE ALSO SUBMITTED THAT DURING THE COURSE OF SEARCH, HARD DISKS OF COMPUTERS AND OTHERS MATERIAL WERE ALSO SEIZED WHICH CONTAINED INCRIMINATING MATERIAL. THE LD. CIT(A) FAILED TO SUBSTANTIATE THE CLAIM EITHER BY THE IMPUGNED ASSESSMENT ORD ER OR THROUGH ANY OTHER DOCUMENTARY EVIDENCE. IN THE ASSESSMENT ORDER, THERE IS NO MENTION THAT ANY INCRIMINATING MATERIAL IS FOUND IN HARD DISK ETC. THUS, THIS CONTENTION OF LD. CIT(A) IS ALSO REJECTED. 4.12 THE NEXT ARGUMENT OF THE LD. CIT(DR) IS THAT THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT OF SRI SAMPAT SHRAMA IS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. WE HAVE OBSERVED THAT SAID STATEMENT OF SH. SAMPAT SHARMA WAS RECORDED AT HIS RESIDENTIAL PREMISES DURING SEARCH PROCE EDING CARRIED OUT SEPARATELY. IN OUR OPINION, THE STATEMENT OF SH. SAMPAT SHARMA WAS NOT RECORDED IN SEARCH PROCEEDING OF THE ASSESSEE AND THUS, IT CANNOT BE CONSIDERED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH OF THE ASSESSEE. 4.13 WITHOUT PREJUDICE TO OUR OBSERVATION, WE DO NOT FIND ANY MENTION OF ANY INCRIMINATING MATERIAL IN THE STATEMENT OF SH. SAMPAT SHRAMA RECORDED UNDER SECTION ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 38 132(4) OF THE ACT. THE LD. COUNSEL DRAWN OUR ATTENTION TO COPY OF THE STATEMENT AVAILABLE ON PAGE 42 7 TO 450 OF THE PAPER BOOK AND ENGLISH TRANSLATION OF THE SAME AVAILABLE ON PAGES 420 TO 426 OF THE PAPER BOOK. IN RESPONSE TO QUESTION NO. 6, REGARDING DETAILS OF THE BANK ACCOUNTS, SH. SHARMA STATED THAT HE DID NOT REMEMBER THE BANK ACCOUNT NUMBERS AND A LL THE PASS BOOKS OF THE ACCOUNTS WERE KEPT IN THE OFFICE OF BRAHMAPUTRA INFRA PROJECTS LTD. IN RESPONSE TO QUESTION NO. 8, HE EXPLAINED WHERE THE BOOKS WERE KEPT. THE DOCUMENTS REFERRED IN QUESTION NO. 20 TO 25 ARE ADMITTEDLY NOT BELONGING TO THE ASSESSEE . THE QUESTION NO. 26 RELATES TO INVESTMENT BY SH. SHARMA. ON PERUSAL OF THE ENTIRE STATEMENT OF SH. SAMPAT SHRAMA, WE DO NOT FIND ANY MENTION OF ANY INCRIMINATING MATERIAL QUA THE ADDITION MADE. 4.14 FURTHER, IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PR IVATE LIMITED (SUPRA) THE QUESTION OF LAW FRAMED IS AS UNDER: DID THE ITAT FALL INTO ERROR IN HOLDING THAT THE ADDITIONS MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961, ON ACCOUNT OF THE STATEMENTS MADE BY THE ASSESSEE S DIRECTORS IN THE COURSE OF SE ARCH UNDER SECTION 132 OF THE ACT WERE NOT JUSTIFIED ? 4.15 IN THE SAID CASE, A SEARCH WAS CONDUCTED IN CASE OF MR. TARUN GOYAL AND BEST GROUP COMPANIES. DURING THE COURSE OF SEARCH, SH TARUN GOEL ADMITTED OF HAVING PROVIDED ACCOMMODATION ENTRY TO THE BE ST GROUP COMPANIES. THE DIRECTOR OF THE BEST GROUP OF COMPANIES, SH ANU AGGARWAL ALSO SURRENDERED RS.8 CRORE DURING THE COURSE OF SEARCH AGAINST SHARE CAPITAL AND SHARE PREMIUM. ANOTHER DIRECTOR, SH. HARJIT SINGH IN HIS STATEMENT ALSO CONCURRED WITH THE ST ATEMENT OF SH. ANU AGGARWAL. IN THE CASE, THE LEARNED CIT - (A) HELD THAT EVIDENCE DOES NOT MEAN ONLY DOCUMENTARY EVIDENCE AND THE STATEMENT UNDER SECTION 132(4) OF THE ACT IS AN IMPORTANT EVIDENCE COLLECTED AS A RESULT OF SEARCH AND SEIZURE OPERATION AND TH US, THE ADDITION OF SHARE CAPITAL ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 39 WAS BASED ON EVIDENCE GATHERED DURING THE SEARCH. HOWEVER, THE TRIBUNAL HELD THAT NO INCRIMINATING MATERIAL FOR EACH OF THE ASSESSMENT YEAR OTHER THAN THE YEAR OF SEARCH, TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SEC TION 153A OF THE ACT. THE HON BLE HIGH COURT, AFTER CONSIDERING THE ARGUMENTS OF BOTH PARTIES ON THE ISSUE WHETHER STATEMENT UNDER SECTION 132(4) OF THE ACT CONSTITUTE INCRIMINATING MATERIAL, HELD AS UNDER: 38. FIFTHLY, STATEMENTS RECORDED UNDER SECTION 132(4) OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCRIMINATING MATERIAL AS HAS BEEN EXPLAINED BY THIS COURT IN COMMISSIONER OF INCOME TAX VS. HARJEEV AGGARWAL (SUPRA). LASTLY, AS ALREADY POINTED OUT HEREINBEFORE, THE FACTS IN THE PRESENT CASE ARE DIFFEREN T FROM THE FACTS IN SMT. DAYAWANTI GUPTA VS. CIT (SUPRA) WHERE THE ADMISSION BY THE ASSESSEES THEMSELVES ON CRITICAL ASPECTS, OF FAILURE TO MAINTAINED ACCOUNTS AND ADMISSION THAT THE SEIZED DOCUMENTS REFLECTED TRANSACTIONS OF UNACCOUNTED SALES AND PURCHASE S, IS NON - EXISTENT IN THE PRESENT CASE. IN THE SAID CASE, THERE WAS A FACTUAL FINDING TO THE EFFECT THAT THE ASSESSEE WERE HABITUAL OFFENDERS, INDULGING IN CLANDESTINE OPERATIONS WHEREAS THERE IS NOTHING IN THE PRESENT CASE, WHATSOEVER, TO SUGGEST THAT ANY STATEMENT MADE BY MR. ANU AGGARWAL OR MR. HARJEET SINGH CONTAINED ANY SUCH ADMISSION. 39. FOR ALL THE AFOREMENTIONED REASONS, THE COURT IS OF THE VIEW THAT THE ITAT WAS FULLY JUSTIFIED IN CONCLUDING THAT THE ASSUMPTION OF JURISDICTION UNDER SECTION 153A OF THE ACT QUA THE ASSESSEE HEREIN WAS NOT JUSTIFIED IN LAW. 4.16 IN THE CASE OF HARJEEV AGGARWAL (SUPRA), THE HON BLE HIGH COURT OBSERVED AS UNDER: 19 IN VIEW OF THE SETTLED LEGAL POSITION, THE FIRST AND FOREMOST ISSUE TO BE ADDRESSED IS WHETHER A STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT WOULD BY ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 40 ITSELF BE SUFFICIENT TO ASSESS THE INCOME, AS DISCLOSED BY THE ASSESSEE IN ITS STATEMENT, UNDER THE PROVISIONS OF CHAPTER XIV B OF THE ACT. 20. IN OUR VIEW, A PLAIN READING OF SECTION 158BB(1) O F THE ACT DOES NOT CONTEMPLATE COMPUTING OF UNDISCLOSED INCOME SOLELY ON THE BASIS OF A STATEMENT RECORDED DURING THE SEARCH. THE WORKS EVIDENCE FOUND AS A RESULT OF SEARCH WOULD NOT TAKEN WITHIN ITS SWEEP STATEMENTS RECORDED DURING SEARCH AND SEIZURE OPE RATIONS. HOWEVER, THE STATEMENTS RECORDED WOULD CERTAINLY CONSTITUTE INFORMATION AND IF SUCH INFORMATION IS RELATABLE TO THE EVIDENCE OR MATERIAL FOUND DURING SEARCH, THE SAME COULD CERTAINLY BE USED IN EVIDENCE IN ANY PROCEEDINGS UNDER THE ACT AS EXPRESSL Y MANDATED BY VIRTUE OF THE EXPLANATION TO SECTION 132(4) OF THE ACT. HOWEVER, SUCH STATEMENTS ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATIONS WOULD NOT EMPOWER THE ASSESSING OFFICER TO MAKE A B LOCK ASSESSMENT MERELY BECAUSE ANY ADMISSION WAS MADE BY THE ASSESSEE DURING SEARCH OPERATION. 4.17 THE HON BLE HIGH COURT IN THE ABOVE CASE FURTHER NOTED THAT THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT MAY BE USED FOR MAKING THE ASSESSMENT BU T ONLY TO THE EXTENT IT IS RELATABLE TO THE INCRIMINATING EVIDENCE/MATERIAL UNEARTHED OR FOUND DURING THE COURSE OF SEARCH. THE HON BLE HIGH COURT ALSO CITED THE DECISION OF CIT VS. SH. RAMDAS MOTOR TRANSPORT, (1999) 238 ITR 177 OF HON BLE ANDHRA PRADESH H IGH COURT, WHERE IT IS EXPLAINED THAT IN CASE NO UNACCOUNTED DOCUMENTS OR INCRIMINATING MATERIAL IS FOUND, THE POWERS UNDER SECTION 132(4) OF THE ACT CANNOT BE INVOKED. 4.18 FURTHER, AS FAR AS THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF VID EO MASTER (SUPRA), IS CONCERNED, WE AGREE WITH THE ARGUMENT OF THE LD. ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 41 COUNSEL THAT IN SAID CASE CERTAIN OTHER MATERIALS LIKE LOOSE PAPERS AND VOUCHERS WERE FOUND WHICH CORROBORATED THE STATEMENT AND IN THOSE CIRCUMSTANCES IT WAS HELD THAT IT COULD NOT BE SAID THAT ADDITION WAS BASED ON NO EVIDENCE. THE RELEVANT FINDING OF THE HON BLE SUPREME COURT IS REPRODUCED AS UNDER: 3. IN THE SECOND ROUND, THE ASSESSMENT ORDER DATED MARCH 29, 2000, GAVE DETAILED REASONS FOR ARRIVING AT THE CONCLUSION THAT THE FIGURE S STATED IN THE STATEMENT RECORDED WERE CORROBORATED, IN PARTICULAR, BY VARIOUS LOOSE SHEETS FOUND AT THE PREMISES OF THE ASSESSEE AS WELL AS VOUCHERS, SOME OF WHICH RELATED TO THE TWO FILMS IN QUESTION. IN AN APPEAL FILED TO THE TRIBUNAL, THE TRIBUNAL FRA MED THREE ISSUES, TWO OF WHICH WERE UNNECESSARY FOR THE REASON THAT THE STATEMENT RECORDED ON AUGUST 25, 1995, WAS SAID TO BE RELEVANT BUT NOT CONCLUSIVE. THEREFORE, WHETHER THE STATEMENT WAS MADE UNDER DURESS AND WHETHER IT WAS RETRACTED LAWFULLY WOULD HA VE NO RELEVANCE AT THIS STAGE. HOWEVER, THE TRIBUNAL WENT INTO THESE ISSUES AS WELL AND ULTIMATELY, FOUND THAT THE STATEMENT COULD BE USED AS EVIDENCE. FURTHER, IT EXAMINED OTHER CORROBORATIVE EVIDENCE REFERRED TO IN THE ASSESSMENT ORDER AND ARRIVED AT A F INDING THAT THE ADDED INCOME WOULD BE INCOME WHICH CAN BE ADDED UNDER SECTION 158BC FOR THE BLOCK ASSESSMENT PERIOD IN QUESTION. IN AN APPEAL FILED UNDER SECTION 260A TO THE BOMBAY HIGH COURT, THE HIGH COURT FOUND, AFTER NARRATING THE FACTS, THAT NO SUBSTA NTIAL QUESTION OF LAW ARISES. 4. WE ARE OF THE VIEW, IN ACCORDANCE WITH THE VIEW OF THE HIGH COURT, THAT NO SUBSTANTIAL QUESTION OF LAW ARISES. FURTHER, THOUGH IT WAS VEHEMENTLY ARGUED BY SHRI DEVANSH A. MOHTA, LEARNED COUNSEL APPEARING FOR THE ASSESSEE, THAT THIS WAS A CASE BOTH OF PERVERSITY AND OF THERE BEING NO EVIDENCE AT ALL. WE FIND THAT NOT ONLY ARE THE FINDINGS OF FACT RECORDED IN SOME DETAIL BUT THAT IT IS NOT POSSIBLE TO SAY THAT THIS IS A CASE OF NO EVIDENCE AT ALL INASMUCH AS EVIDENCE IN THE F ORM OF ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 42 THE STATEMENT MADE BY THE ASSESSEE HIMSELF AND OTHER CORROBORATIVE MATERIAL ARE THERE ON RECORD. 4.19 WE FIND THAT IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PRIVATE LIMITED (SUPRA), DESPITE THE ADMISSION OF ACCOMMODATION ENTRY IN STATEMENTS UNDER SECTION 132(4) OF THE ACT, THE COURT HELD THAT THE STATEMENT DO NOT CONSTITUTE AS INCRIMINATING MATERIAL. IN THE INSTANT CASE, NEITHER IS THERE ANY STATEMENT OF ANY ACCOMMODATION ENTRY OPERATOR CLAIMING THAT ANY ENTRY WAS NOT PROVIDED NOR ANY DIRECTOR HAS ADMITTED THAT ASSESSEE OBTAINED ACCOMMODATION ENTRY. THUS, THE CASE OF THE ASSESSEE IS ON BETTER FOOTING THEN THE CASE OF BEST INFRASTRUCTURE (I) P. LTD (SUPRA). IN SUCH FACTS AND CIRCUMSTANCES, RESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE DELHI HIG H COURT IN THE CASE OF BEST INFRASTRUCTURE (INDIA) PRIVATE LIMITED (SUPRA), WE DO NOT HAVE ANY HESITATION TO HOLD THAT THE STATEMENT UNDER SECTION 132(4) OF SH. SAMPAT SHARMA CANNOT BE TREATED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE RESULT, WE HOLD THAT ADDITION OF SHARE CAPITAL IN THE YEAR UNDER CONSIDERATION HAS BEEN MADE WITHOUT RELYING ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 4.20 IN VIEW OF THE ABOVE FINDING, BOTH THE CONDITIONS AS COMPLETED ASSES SMENT AND NO INCRIMINATING MATERIAL, HAVE BEEN SATISFIED IN THE CASE, THUS,NO ADDITION COULD HAVE BEEN MADE IN THE INSTANT ASSESSMENT YEAR IN VIEW OF THE FINDING OF THE HON BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THE GROUNDS NO. 1 AND 1. 1 OF APPEAL ARE ACCORDINGLY ALLOWED. 26 . SINCE, THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS INVOLVED IN THE AFORESAID REFERRED TO CASES BELONGING TO THE SAME GROUP AND EVEN THE SEARCH TOOK PLACE SIMULTANEOUSLY AND THE AO RELIED UPON THE SIM ILAR FIVE DOCUMENTS AND THE STATEMENTS WHILE ITA NO S. 3335, 3336 & 3337 /DE L/201 7 M. L. SINGHI & ASSOCIATES (P) LTD. 43 MAKING THE ADDITIONS. WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDERS IN THE CASE OF THE VARIOUS ASSESSEES BELONGING TO THE SAME GROUP DELETE THE IMPUGNED ADDITION. 27 . THE FACTS INVO LVED IN OTHER TWO ASSESSMENT YEARS I.E. 2007 - 08 AND 2008 - 09 IN ITA NOS. 3336 & 3337/DEL/2017 ARE SIMILAR TO THE FACTS INVOLVED IN ITA NO. 3335/DEL/2017 FOR THE ASSESSMENT YEAR 2006 - 07 WHICH WE HAVE ALREADY DISPOSED OFF IN THE FORMER PART OF THIS ORDER, THE REFORE, OUR FINDINGS GIVEN THEREIN SHALL APPLY MUTATIS MUTANDIS. 28 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED . (ORDER PRON OUNCED IN THE COURT ON 17 /0 9 /2018) SD/ - SD/ - ( KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17 /09 /2018 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR