YOGESH MEHRA, Mumbai V. DCIT CENTRAL CIRCLE-3(1), Mumbai

ITA 4006/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6827 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY PRATAP SINGH
• Keywords: Search and seizure; Deemed dividend; Block assessment; Commercial expediency; Set aside
• Section: 143(3); 153A; 2(22)(e); 143(2); 139(1); 13; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NOS.4006 & 4008/M/2019 ASSESSMENT YEARS: 2007-08 & 2009-10 SHRI YOGESH MEHRA, FLAT NO.201, HARE KRISHNA SOCIETY, NORTH SOUTH ROAD NO.8, VILE PARLE (W), MUMBAI 400 049 PAN: AAAPM6139N VS. DCIT, CENTRAL CIRCLE-3(1), AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (R ESPONDENT) ITA NOS.4009 & 4010/M/2019 ASSESSMENT YEARS: 2011-12 & 2012-13 SMT. SUDERSHAN MEHRA, FLAT NO.301, HARE KRISHNA SOCIETY, NORTH SOUTH ROAD NO.8, VILE PARLE (W), MUMBAI 400 049 PAN: AADPM5472F VS. DCIT, CENTRAL CIRCLE-3(1), AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (R ESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RITU KAMAL KISHOR, A.R. REVENUE BY : SHRI AJAY PRATAP SINGH, D.R. DATE OF HEARING : 06.07.2021 DATE OF PRONOUNCEMENT : 22.07.2021 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED FOUR APPEALS HAVE BEEN PREFERRED BY TWO DIFFERENT ASSESSEES AGAINST THE ORDERS EVEN DATED 2 9.03.2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFT ER REFERRED ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 2 TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2007 -08, 2009-10, 2011-12 & 2012-13. FIRST WE WILL TAKE APPEAL FOR A .Y. 2007-08: ITA NO.4006/M/2019 A.Y. 2007-08 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPEL LANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING AO'S ACTION OF MAKING AD DITION U/S. 2(22)(E) DESPITE THE FACT THAT DURING THE COURSE OF SEARCH NO INCRIMINAT ING MATERIAL OR EVIDENCE WAS FOUND RELATING TO DEEMED DIVIDEND AND AS ON THE DAT E OF SEARCH NO ASSESSMENT OR REASSESSMENT WAS PENDING FOR THE AY 2007-08 THAT CO ULD BE ABATED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE ISSUE THAT THE APPELLANT HELD ONLY 14.29% SHARES IN VISH WIND INFRASTRUCTURE LIMITED PRIOR TO 22.05.2010 DESPITE THE FACT ALL THE RELEVANT MATERIAL WAS AVAILABLE BEFORE THE LD. CIT(A). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE GROUND RELATIN G TO AO'S ACTION IN CONSIDERING THE COMMERCIAL AND BUSINESS TRANSACTION BETWEEN EIL AND GROUP COMPANIES WHICH WERE UNDERTAKEN BY EIL FOR THE PURPOSE OF CARRYING ON ITS BUSINESS AS PAYMENT BY WAY OF LOANS AND ADVANCES FOR THE PURPOSE OF SECTIO N 2(22)(E). 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO VERIFY THE LEDG ER ACCOUNTS OF WWIL/EIL IN THE BOOKS OF 5 RELATED CONCERNS FOR ASCERTAINING THE CLAIM OF APPE LLANT THAT THERE ARE NO ACTUAL PAYMENTS MADE/RECEIVED AND ONLY JOURNAL ENTR IES WERE PASSED AND IF FOUND CORRECT DELETE THE ADDITION OF RS. 1,49,55,1147- ON ACCOUNT OF DEEMED DIVIDEND MADE BY THE AO IN RESPECT OF TRANSACTION BETWEEN WW IL/EIL WITH 5 RELATED COMPANIES DESPITE THE FACT THAT THE LEDGER ACCOUNTS WERE AVAILABLE BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE SAME WERE ALSO FILED BEFORE THE LD. CIT(A)INSTEAD OF DELETING THE ADDITION OF R S. 1,49,55,1147- MADE BY THE AO. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO VERIFY THE CLAI M OF APPELLANT THAT PRIOR TO 22.05.2010, THE APPELLANT WAS HOLDING ONLY 14.29% S TAKE IN VISH WIND INFRASTRUCTURE LTD. AND IF FOUND CORRECT, NOT TO CO NSIDER THE TRANSACTION ENTERED INTO IN THE RELEVANT YEAR BETWEEN M/S. WWIL/EIL AND M/S. VWIL FOR THE PURPOSE OF APPLICABILITY OF PROVISIONS OF SECTION 2(22)(E ) DE SPITE THE FACT THAT EVIDENCES RELATING TO SHAREHOLDING OF THE APPELLANT PRIOR TO 22.05.2010 WASAVAILABLE BEFORE THE LD. CIT(A) INSTEAD OF DELETING THE ADDITION OF RS. 2,95,38,0197- MADE BY THE AO. 6. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND AND /OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 7. THE APPELLANT PRAYS BEFORE THE HON'BLE TRIBUN AL TO DELETE THE ADDITION MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 2(22)( E ) IN THE ABSENCE OF ANY INCRIMINATING MATERIAL RELATING TO THE SAME WAS FOU ND DURING THE COURSE OF SEARCH. ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 3 3. THE ISSUE RAISED IN GROUND NO.1 IS AGAINST THE ORDER OF LD. CIT(A) UPHOLDING THE ASSESSMENT FRAMED UNDER SECTIO N 143(3) READ WITH SECTION 153A OF THE ACT BY IGNORING THE F ACT THAT NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH ACTION AND THEREFORE NO ADDITION CAN BE MADE IN ABSENCE OF ANY SEIZED INCRIMINATING MATERIAL AS THE ASSESSMENT HAS ATTAINED FINALITY AND WAS UNABATED ON THE DATE OF SEARCH. 4. THE FACTS IN BRIEF ARE THAT THE SEARCH ACTION UN DER SECTION 132 OF THE ACT WAS CARRIED OUT ON 14.03.2013 BY DDI T (INV.), UNIT 4, MUMBAI AT PRIVATE OFFICES, SITE OFFICE, RES IDENCE OF MAIN PERSONS OF M/S. ENERCON (INDIA) LTD. NOW KNOWN AS M /S. WIND WORLD INDIA LTD. AND OTHER RELATED COMPANIES PROMOT ED BY MR. YOGESH JOGENDRANATH MEHRA AND MR. AJAY MEHRA. THE ASSESSEE WAS ALSO COVERED UNDER THE SAID SEARCH. CONSEQUENT TO THE SEARCH A NOTICE UNDER SECTION 153A OF THE ACT DATED 28.01.2014 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE WHICH WAS COMPLIED WITH BY THE ASSESSEE BY FILING THE RETURN OF INCOME ON 11.08.2014 DECLARING TOTAL INCOME AT RS.1,02,90,407 /-. THE AO NOTED THAT SEARCH TEAM DURING THE COURSE OF SEARCH OPERATION HAS NOTICED THAT LOANS AND ADVANCES HAVE BEEN GIVEN BY M/S. WIND WORLD INDIA LTD. TO THE ASSOCIATED CONCERNS OF THE GROUP AND THESE WERE IN THE NATURE OF DEEMED DIVIDEND WIT HIN THE MEANING OF SECTION 2(22)(E) OF THE ACT. THE AO NOT ED THAT M/S. WIND WORLD INDIA LTD. HAS GIVEN ADVANCES TO M/S. VIS H WIND INFRASTRUCTURE LTD. RS.2,95,38,019/-, M/S. ENERCON WIND FARM (AP) PCT LTD RS.2,61,439/-, M/S. ENERCON WIND FARMS (KERALA) P LTD. RS.60,14,730/0, M/S. ENERCON WIND FARMS (MAHAR ASHTRA) P LTD. RS. 1,69,920/-, M/S. ENERCON WIND FARMS (TAM IL NADU) P LTD. RS.1,78,530/- AND M/S. ENERCON WIND FARMS (GU JRAT) P ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 4 LTD. RS.83,30,495/-. THE AGGREGATE AMOUNT OF THESE LOANS AND ADVANCES CAME TO RS.4,44,93,133/-. DURING THE SEAR CH IT WAS REVEALED THAT THE ASSESSEE AND HIS MOTHER HELD EQUI TY SHARES IN M/S. WIND WORLD INDIA LTD. OF MORE THAN 10% AND MOR E THAN 20% IN OTHER RELATED COMPANIES AS STATED ABOVE. TH E AO CAME TO CONCLUSION THAT SINCE THE M/S. WIND WORLD INDIA LTD. HAS ACCUMULATED PROFITS IN THE FORM OF RESERVE AND SURP LUS AND THE ASSESSEE HAS SHAREHOLDINGS AS STATED ABOVE, THEREFO RE, THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT ARE ATTR ACTED. ACCORDINGLY ISSUED A SHOW CAUSE NOTICE TO THE ASSES SEE WHICH WAS REPLIED BY THE ASSESSEE BY SUBMITTING THAT THE MONEY ADVANCED BY M/S. WIND WORLD INDIA LTD. TO VARIOUS RELATED ENTITIES WAS OUT OF COMMERCIAL CONSIDERATION AND EXPEDIENCY. THE ASSESSEE SUBMITTED THAT THESE ADVANCES WERE GIV EN FOR PURCHASE OF LAND AS THE BUSINESS OF THE ASSESSEE IS TO SET UP WIND MILLS FOR ITS CUSTOMERS. IT WAS SUBMITTED TH AT DUE TO LAND CEILING ACT IN VARIOUS STATES THE LAND CAN NOT BE P URCHASED IN THE NAME OF SINGLE ENTITY AND HENCE THE PURCHASE OF LAND IN THE NAME OF GROUP COMPANIES IS DONE. IT WAS SUBMITTED THAT THESE ADVANCES WERE IN THE NATURE OF BUSINESS ADVANCES BY THE ASSESSEE TO CARRY ON AND TO EXPAND ITS BUSINESS BY INSTALLING MORE AND MORE WIND MILLS SMOOTHLY AND EFFICIENTLY. THEREFORE THESE ADVANCES WERE GIVEN FOR GENUINE BUSINESS REQU IREMENTS AND COMMERCIAL TRANSACTIONS AND COULD NOT BE TREAT ED AS DEEMED DIVIDEND IN TERMS OF SECTION 2(22)(E) OF TH E ACT. HOWEVER, THE SUBMISSIONS OF THE ASSESSEE DID NOT FI ND FAVOUR WITH THE AO AND HE TREATED THE ADVANCES OF RS.4,44, 93,133/- AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT A ND ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY FRAMING THE A SSESSMENT ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 5 UNDER SECTION 143(3) READ WITH 153A VIDE ORDER DATE D 28.06.2017. 5. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE CHALL ENGED THE ORDER OF AO ON JURISDICTIONAL GROUND AS WELL AS ON MERIT. THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESS EE ON LEGAL/JURISDICTIONAL ISSUE WHEREAS ON MERIT THE A PPEAL WAS PARTLY ALLOWED. WHILE DISMISSING THE APPEAL OF THE ASSESSEE ON JURISDICTIONAL ISSUE THE LD. CIT(A) OBSERVED AND HE LD AS UNDER: 5.1 THE DETAILED SUBMISSIONS/CONTENTIONS OF THE AS SESSEE HAVE BEEN DULY CONSIDERED. ON THE ISSUE AS TO WHETHER THE ASSESSME NTS WHICH HAVE ATTAINED FINALITY CAN BE DISTURBED IN ABSENCE OF SEIZED MATE RIAL, THERE ARE A NUMBER OF DECISIONS WHERE THIS ISSUE HAS BEEN EXAMINED BY THE HON'BLE COURTS WHICH INCLUDES THE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN T HE CASES OF CONTINENTAL WAREHOUSING CORPN. (NHAVA SHEVA LTD.) (58 TAXMANN. COM 78) AND MURLI AGRO PRODUCTS ( 49 TAXMANN.COM 172), DECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASES OF ANIL KUMAR BHATIA (352 ITR 493) AND CHETANDAS LA CHMANDAS (211 TAXMANN. 61) AND HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT CO. (49 TAXMANN.COM 98). AFTER ANALYZING ALL SUCH DECISIONS ON THE SAID ISSUE, THE HON'BLE DELHI HIGH COURT IN THE CAS E OF KABUL CHAWLA (61 TAXMANN. 412), HAS SUMMARIZED THE LEGAL POSITION THAT EMERGES AS U NDER:- I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX A.YS. IMMEDIA TELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH A.YS. 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 SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INC OME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS, THERE WILL BE ONLY ONE ASSES SMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIO NS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F SEARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE A O WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE AS SESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 6 OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS S ECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABLE TO ABATE D PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSE SS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SE CTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY F OR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIA L 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 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 5.2 FROM THE AFORESAID, IT CAN BE OBSERVED THAT A N ON-ABATED ASSESSMENT CAN BE INTERFERED WITH BY THE AO WHILE MAKING ASSESSMENT U /S 143(3) R.W.S. 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH ACTION. THEREFORE, IN PRINCIPLE, THE CONTENTION OF THE ASSE SSEE IS ACCEPTABLE THAT A NON- ABATED ASSESSMENT CAN ONLY BE DISTURBED ON THE BASI S OF INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH ACTION. IN THE INSTANT CASE, THE ORIGINAL RETURN OF INCOME FOR THE RELEVANT YEAR WAS FILED ON 30.07.200 7 AND THE TIME LIMIT FOR SELECTING THE CASE FOR SCRUTINY BY ISSUE OF NOTICE U/S. 143(2) HAD ALREADY LAPSED BEFORE THE DATE OF SEARCH ACTION I.E. 14.03.2013 AN D THERE WERE ALSO NO OTHER PROCEEDINGS PENDING, THEREFORE, THE ASSESSMENT FOR THE RELEVANT YEAR WAS A NON- ABATED ASSESSMENT WHICH COULD BE DISTURBED ONLY ON THE BASIS OF INCRIMINATING MATERIAL UNEARTHED. HOWEVER, IT IS OBSERVED FROM TH E PAPERBOOK SUBMITTED THAT ON THE SAID ISSUE OF DEEMED DIVIDEND, THE ASSESSEE (MA NAGING DIRECTOR AND MAIN PERSON OF THE ASSESSEE GROUP) WAS EXAMINED ON OATH ON 10.04.2013 IN COURSE OF THE SEARCH ACTION ON THE EVIDENCES FOUND DURING THE SEARCH ACTION ABOUT THE SHAREHOLDING PATTERNS OF THE VARIOUS RELATED CONCER NS TO WHOM LOANS/ADVANCES WERE GIVEN BY WWIL / EIL. THUS, THE ISSUE OF DEEME D DIVIDEND IS EMERGING FROM THE SEIZED MATERIAL FOUND IN COURSE OF THE SEARCH A CTION. IT IS RELEVANT TO NOTE THAT INCRIMINATING STATEMENTS RECORDED ON OATH AT THE TI ME OF SEARCH ACTION CAN ALSO BE TREATED AT PAR WITH THE INCRIMINATING DOCUMENTS UNE ARTHED DURING THE SEARCH AS EXPLAINED IN SUBSEQUENT PARAS. 5.3 THE HON'BLE SUPREME COURT IN THE CASE OF P.R. METRANIV. CIT [20061 287 ITR 209/157 TAXMAN 325 (SC) HAS EXPLAINED THE SCOPE OF SECTION 132. IT HAS BEE N EXPLAINED BY THE HON'BLE SUPREME COURT THAT THE BOO KS OF ACCOUNTS, DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENTS RECORDED OF THE PERSONS SEARCHED MAY BE USED AS EVI DENCE FOR ANY PROCEEDINGS UNDER THE ACT. THE RELEVANT PORTION OF THE ORDER OF THE HON'BLE SU PREME COURT IS REPRODUCED AS UNDER: ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 7 '18. SECTION 132 IS A CODE IN ITSELF. IT PROVIDES FOR THE CONDITIONS UPON WHIC H AND THE CIRCUMSTANCES IN WHICH THE WARRANTS OF AUTH ORIZATION CAN BE ISSUED. SUB-SECTION (2) AUTHORIZES THE AUTHORIZED OFFICER T O REQUISITION THE SERVICES OF ANY POLICE OFFICER OR OF ANY OFFICER OF THE CENTRAL GOVERNMENT OR OF BOTH TO ASSIST HIM FOR ALL OR ANY OF THE PURPOSES FOR WHICH THE SEARCH IS CONDUCTED. UNDER SUB-SECTION (4) THE AUTHORIZED OFFICER CAN DU RING THE COURSE OF SEARCH OR SEIZURE EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT M ADE BY SUCH PERSONS DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN E VIDENCE IN ANY PROCEEDING UNDER THE ACT.' 5.4 FURTHER, PROCEEDINGS BEFORE THE INCOME-TAX AUTH ORITIES, AS EXPLAINED BY THE ALLAHABAD HIGH COURT IN GARGI DEVI JWALA PRASAD V. CIT [1974] 96 ITR 97 , ARE CONSIDERED TO BE OF JUDICIAL NATURE WHERE THE ISSUE S ARE DECIDED ON THE BASIS OF EVIDENCES WHICH CAN BE ORAL OR DOCUMENTARY. ORAL EV IDENCES, INTER ALIA, INCLUDE STATEMENTS WHICH ARE MADE BEFORE THE INCOME-TAX AUT HORITY IN RELATION TO MATTER OF INQUIRY AND MAY INCLUDE EXAMINATION OF THE ASSES SEE ITSELF. ALSO, THE STATEMENT ON OATH RECORDED IN COURSE OF THE SEARCH ACTION U/S ' 132(4) HAS BEEN HELD TO BE OF EVIDENTIARY VALUE BY THE HON'BLE DELHI HIGH COURT I N THE CASE OF DHINGRA METAL WORKS (328 ITR 384) AND THE HON'BLE KERALA HIGH COURT IN THE CASE OF PAUL MATHEWS (263 ITR 101) AS AGAINST STATEMENT ON OATH RECORDED U/S 133A. 5.5 IN THE INSTANT CASE, IT IS OBSERVED THAT INCRIM INATING STATEMENTS ON OATH WERE RECORDED OF THE ASSESSEE AND OTHERS BASED ON THE IN CRIMINATING FACTS NOTED IN RESPECT OF THE PATTERN OF SHARE HOLDING OF M/S WWIL / EIL AND M/S VWIL, ETC. AND THE FACT THAT LOANS HAVE BEEN ADVANCED BY M/S. WWIL /EIL TO M/S. VWIL AND OTHER RELATED ENTITIES FOR WHICH THE PROVISIONS OF SECTIO N 2(22)(E) ARE CLEARLY ATTRACTED. IN VIEW OF THE AFORESAID DECISIONS OF THE HON'BLE SUPR EME COURT IN THE CASE OF P.R. METRANI (SUPRA) AND THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF GARGI DEVI JWALA PRASAD, THIS WAS ALSO SUFFICIENT INCRIMINATING MATERIAL UNE ARTHED ON ACCOUNT OF THE SEARCH ACTION TO WARRANT APPROPRIATE ACTION U/S 153A R.W.S. 143(3). 5.6 IN VIEW OF THE ABOVE DETAILED DISCUSSION, NO IN FIRMITY IS FOUND IN THE ACTION OF THE AO IN UNDERTAKING ACTION U/S 153A RWS 143(3) SI NCE THERE WAS ENOUGH EVIDENCE TO INCRIMINATE THE ASSESSEE IN THE FORM OF STATEMEN TS RECORDED OF THE ASSESSEE & OTHERS ON THE FACTS NOTED IN RESPECT OF THE PATTERN OF SHARE HOLDING OF M/S WWIL / EIL AND M/S VWIL, ETC. AND THE FACT THAT LOANS HAVE BEEN ADVANCED BY M/S. WWIL/EIL TO M/S. VWIL AND OTHER RELATED ENTITIES FO R WHICH THE PROVISIONS OF SECTION 2(22)(E) ARE CLEARLY ATTRACTED. ACCORDINGLY, GROUND NO. 1 OF THE APPEAL ARE DISMISSED. 6. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE THE BEN CH THAT SEARCH IN THIS CASE WAS CONDUCTED ON 14.03.2013 WHE REAS THE RETURN WAS FILED UNDER SECTION 139(1) OF THE ACT ON 30.07.2007 DECLARING AN INCOME OF RS.1,02,90,409/- MEANING THE REBY THAT SEARCH WAS CONDUCTED AFTER MORE THAN 5 YEARS FROM T HE DATE OF ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 8 FILING THE RETURN OF INCOME. THE LD. A.R. SUBMITTED THAT ON THE DATE OF SEARCH THE ASSESSMENT IN THE INSTANT CASE H AS ALREADY ATTAINED FINALITY AND WAS UNABATED. THE LD AR VEHE MENTLY SUBMITTED THAT THE IMPUGNED ASSESSMENT YEAR, BEING A NON- ABATED ASSESSMENT YEAR, ADDITION, IF ANY , COULD B E MADE ONLY IN THE ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT IF INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH TO SUPPORT THE ADDITION AND NOT OTHERWISE. THE LD AR R EITERATED THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND HENCE NO ADDITION COULD BE MADE BY THE A SSESSING OFFICER IN ABSENCE OF INCRIMINATING MATERIAL. THE L D AR, REFERRING TO THE ORDER OF LD. CIT(A), SUBMITTED THAT THE LD CIT(A) HAS REJECTED THIS CONTENTION OF THE ASSESSEE BY HOLDING THAT EVEN THE LEDGER COPIES AND STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT AT THE TIME OF SEARCH CONSTITUTED INCRIMINATIN G MATERIALS TO MAKE ADDITION IN THE HANDS OF THE ASSESSEE. THE LD AR ALSO SUBMITTED THAT STATEMENT OF ASSESSEE RECORDED U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH CAN NOT BE CONSIDE RED AS INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH AND THUS THE FINDINGS OF LD CIT(A) THAT STATEMENT OF ASSESSEE RECORDED DURING THE COURSE OF SEARCH CONSTITUTED IN CRIMINATING MATERIAL IS CONTRARY TO LAW. IT IS VEHEMENTLY SUBMI TTED BY THE LD AR THAT STATEMENT RECORDED DURING THE COURSE OF SEARCH CANNOT BE CONSIDERED AS INCRIMINATING EVIDENCE FOUN D DURING THE COURSE OF SEARCH. THE LD AR RELIED ON THE DEC ISION OF THE COORDINATE BENCH IN THE CASE OF DY. CIT V. SHIVALI MAHAJAN & OTHERS IN ITA NO. 5585/DEL/2015) DATED 19.03.2019 W HEREIN IT HAS BEEN HELD THAT STATEMENT RECORDED DURING SEARCH IS NOT AN INCRIMINATING MATERIAL. THE LD AR SUBMITTED THAT STATEMENT ON ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 9 A STANDALONE BASIS WOULD NOT CONSTITUTE INCRIMINATI NG EVIDENCE FOUND DURING COURSE OF SEARCH. THE LD AR ARGUED THA T, IN FACT, THE STATEMENT CAN NEVER BE SAID TO BE FOUND DURING THE COURSE OF THE SEARCH AS THE SAME IS ALWAYS OBTAINED DURING THE COURSE OF SEARCH. THE LD AR SUBMITTED THAT IN THE PRESENT CASE, THE CONTENTS OF THE STATEMENT WERE ALSO NOT INCRIMINATI NG AND ADDITION CAN NOT BE BASED ON THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE LD AR ALSO SUBMITTED THAT NEEDLESS TO ADD THAT APART FROM THE REQUIREMENT THAT THE MATERIAL MUST B E FOUND DURING THE COURSE OF SEARCH, THERE ARE TWO MORE REQ UIREMENTS VIZ. I)MATERIAL MUST BE INCRIMINATING AND II) ADDIT ION MUST BE BASED ON SUCH MATERIAL. THE LD AR SUBMITTED THAT NONE OF THE CONDITIONS WERE SATISFIED IN THE PRESENT CASE. FINA LLY THE LD. AR CONTENDED THAT THE ADDITION IN THE YEAR UNDER CONSI DERATION BEING THE UNABATED ASSESSMENT, CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING SEARCH. SIN CE NO INCRIMINATING MATERIAL WAS FOUND, ADDITION MADE OR SUSTAINED ARE WITHOUT JURISDICTION AND HAVE TO BE DELETED. IN DEFENCE OF HIS ARGUMENTS THE LD COUNSEL OF THE ASSESSEE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. ALL CARGO GLOBAL LOGISTICS LTD (374 ITR 645) WHEREIN IT HAS B EEN HELD THAT, IN RESPECT OF UNABATED YEARS, NO ADDITION CAN BE MA DE IF NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH. SIMILAR RATIOS HAVE BEEN LAID DOWN IN PCIT V. GAHOI FOODS (P.) LTD. [2020] 117 TAXMANN.COM 118 (SC), CIT V. DEEPAK KUMAR AGARWAL [2017] 86 TAXMANN.COM 3 (BOM)(HC) AND CIT V . GURINDER SINGH BAWA [2017] 79 TAXMANN.COM 398 (BOM) (HC). THE LD AR PRAYED THAT IN VIEW OF THE ABOVE JUDICIAL DECISIONS, THE ADDITION MADE BY THE ASSESSING OFFICER AND UPHELD B Y CIT(A) IN ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 10 RESPECT OF THE IMPUGNED ASSESSMENT YEAR WHICH IS AN UNABATED YEAR IS BAD IN LAW AND MAY BE DELETED SINCE IT IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 7. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT THE MATERIAL GATHERED BY THE SEARCH TEAM AND SEIZED IN THE FORM OF COPIES OF LEDGER ACCOUNTS OF THE ASSESSEE AND ALSO STATEMENT RECORDED DURING THE COURSE OF SEARCH CONSTITUTE INC RIMINATING MATERIAL AND THEREFORE THE LD. CIT(A) HAS CORRECTLY PASSED THE ORDER DISMISSING THE JURISDICTIONAL ISSUE RAISED BY THE ASSESSEE. THE LD. D.R. THEREFORE PRAYED THAT IN VIEW OF THE D ETAILED FINDING GIVEN BY LD. CIT(A), THE JURISDICTIONAL ISSUE RAIS ED BY THE ASSESSEE MAY KINDLY BE DISMISSED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE OR DERS OF AUTHORITIES BELOW AND VARIOUS DECISIONS CITED BEFOR E US. IT IS UNDISPUTED THAT DURING THE COURSE OF SEARCH PROCEED INGS ON THE ASSESSEE NO INCRIMINATING MATERIALS WERE FOUND IN R ESPECT OF THE ASSESSEE EXCEPT THE COPIES OF ASSESSEE LEDGER ACCOU NTS WHICH ARE PART OF BOOKS OF ACCOUNTS AND STATEMENT RECORDED D URING THE SEARCH ACTION U/S 132(4) OF THE ACT. IN THE INSTANT CASE, THE ASSESSEE FILED THE ORIGINAL RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT ON 30.07.2007 WHEREAS THE SEARCH WAS CON DUCTED UNDER SECTION 132(1) OF THE ACT ON14.03.2013 ALMOST AFTER MORE THAN FIVE YEARS. THUS THE ASSESSMENT HAS ATTAINED FINALITY ON THE DATE OF SEARCH MEANING THEREBY THAT IT HAS NOT ABATED ON THE DATE OF SEARCH. IT IS ALSO A SETTLED POSITION OF LA W THAT ANY ADDITION IN A NON ABATED ASSESSMENT YEAR CAN ONLY B E MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH AND NOT OTHERWISE. WE FIND THAT DURING THE COURSE OF ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 11 SEARCH NO SUCH INCRIMINATING MATERIAL WAS FOUND BY THE SEARCH TEAM. WE HAVE ALSO PERUSED THE ORDER OF LD. CIT(A) WHEREIN LD. CIT(A) HAS NOTED THAT THE ADDITION MADE BY THE AO W AS BASED UPON INCRIMINATING IN THE FORM OF STATEMENT RECORD ED DURING SEARCH ACTION UNDER SECTION 132(4) OF THE ACT AND THE FACTS COLLECTED DURING THE SEARCH FROM BOOKS OF ACCOUNTS THAT THE M/S. WIND WORLD INDIA LTD. WHICH HAS ADVANCED SOME LOANS TO THE RELATED ENTITIES THEREBY ATTRACTING THE PROVISI ONS OF SECTION 2(22)(E) OF THE ACT AS THE ASSESSEE HELD MORE THAN 10% SHAREHOLDING IN M/S. WIND WORLD INDIA LTD. AND MORE THAN 20% IN THOSE COMPANIES TO WHICH THE LOANS WERE ADVANCED . THE ISSUE BEFORE US WHETHER THE STATEMENT RECORDED DURING SE ARCH U/S 132(4) OF THE ACT OR EXTRACTS OF BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE CONSTITUTE INCRIMINATING MATERIALS FOU ND DURING SEARCH OR NOT. WE HAVE PERUSED THE FACTS ON RECORDS AND AFTER ANALYZING THEM IN THE LIGHT OF VARIOUS DECISIONS OF TRIBUNAL, WE OPINE THAT SUCH MATERIALS/EVIDENCES CAN NOT BE SAID TO BE FOUND DURING THE COURSE OF SEARCH. WE FURTHER FIND MERITS IN THE CONTENTIONS OF THE ASSESSEE THAT MATERIALS HAS TO B E FOUND DURING SEARCH AND IT HAS TO BE INCRIMINATING. THERE FORE, WE ARE NOT IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE L D. CIT(A) ON THIS ISSUE. IN OUR CONSIDERED OPINION, THE FINDING S OF THE LD CIT(A) THAT STATEMENT RECORDED DURING SEARCH CONSTI TUTES INCRIMINATING MATERIAL IS ALSO NOT CORRECT AS THE S AME CAN NOT BE SAID TO BE FOUND DURING THE COURSE OF SEARCH BUT IS RECORDED TO ELICIT MORE INFORMATION/EXPLANATION OF THE SEARCHED PERSON ON THE INCRIMINATING DOCUMENTS/GOLD/JEWELLERY FOUND DU RING SEARCH. THEREFORE AFTER PERUSING THE MATERIAL ON RE CORD AND CONSIDERING RIVAL CONTENTIONS AND ALSO THE DECISION S CITED BEFORE ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 12 US, WE ARE OF THE CONSIDERED VIEW THAT A STATEMENT RECORDED DURING THE COURSE OF SEARCH CAN NOT BE CONSIDERED A N INCRIMINATING MATERIAL IN ORDER TO MAKE ADDITION IN AN UNABATED ASSESSMENT YEAR. THE CASE OF THE ASSESSEE IS SUPPO RTED BY THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL I N THE CASE OF DCIT VS. SHIVALI MAHAJAN & OTHERS (SUPRA). THE REL EVANT PARAS ARE REPRODUCED BELOW: 3. DURING THE COURSE OF SEARCH, STATEMENT OF SHR I LALIT MAHAJAN I.E., THE ASSESSEE IN APPEAL NO.5590/DEL/2015 WAS RECORDED, IN WHICH, HE ADMITTED OF CASH INVESTMENT BY HIM AND OTHER FAMILY MEMBERS IN RESPEC T OF BOOKING OF SPACE IN INDIRAPURAM HABITAT CENTRE 4. .. 7. LEARNED DR, ON THE OTHER HAND, STATED THAT DURIN G THE COURSE OF SEARCH OF AERENS GROUP WHO IS THE BUILDER AND DEVELOPER OF INDIRAPURAM HABITAT CENTRE.... THAT THE STATEMENT UNDER SECTION 1 32(4) HAS A LEGAL SANCTITY AND THAT BY ITSELF CONSTITUTES AN EVIDENCE AND ADDITION CAN BE MADE ON THE BASIS OF ASSESSEES STATEMENT 8. .. 9. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. AFTER CONSIDERING TH E FACTS OF THE CASE AND THE RIVAL SUBMISSIONS, WE FIND THAT IN THESE APPEALS, FOLLOWI NG TWO QUESTIONS ARISE FOR OUR CONSIDERATION : (I) WHETHER ANY MATERIAL FOUND IN THE SEARCH OF ANY OTH ER PERSON THAN THE ASSESSEE IN APPEAL CAN BE CONSIDERED IN THE ASSESSM ENT UNDER SECTION 153A OF THE ASSESSEE. (II) WHETHER THE ADDITION CAN BE MADE ONLY ON THE BASIS OF STATEMENT GIVEN BY THE ASSESSEE DURING THE COURSE OF SEARCH. . 16 NOW, COMING TO QUESTION NO.2, WE FIND THAT THIS ISS UE IS ALSO COVERED BY THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF HARJEEV AGGARWAL (SUPRA) AND BEST INFRASTRUCTURE (INDIA) (P .) LTD. (SUPRA). IN THE CASE OF HARJEEV AGGARWAL (SUPRA), HON'BLE JURISDICTIONAL HIG H COURT CONSIDERED THE EVIDENTIARY VALUE OF THE STATEMENT RECORDED DURING THE COURSE OF SEARCH. THE RELEVANT PORTION IS PARAGRAPH 19, 20 & 24, WHIC H ARE REPRODUCED BELOW FOR READY REFERENCE :-.. 17. THUS, HON'BLE JURISDICTIONAL HIGH COURT HAS HEL D THE WORDS EVIDENCE FOUND AS A RESULT OF SEARCH WOULD NOT TAKE WITHIN ITS SWEEP STATEMENTS RECORDED DURING SEARCH AND SEIZURE OPERATIONS. THE IR LORDSHIPS FURTHER OBSERVED HOWEVER, SUCH STATEMENTS ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING S EARCH AND SEIZURE ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 13 OPERATIONS WOULD NOT EMPOWER THE AO TO MAKE A BLOCK ASSESSMENT MERELY BECAUSE ANY ADMISSION WAS MADE BY THE ASSESSEE DURI NG SEARCH OPERATION. IN PARAGRAPH 24, THEIR LORDSHIPS HAVE MENTIONED ABO UT THE PREVAILING PRACTICE OF EXTRACTING STATEMENT BY EXERTING UNDUE INFLUENCE OR COERCION BY THE SEARCH PARTY. THOUGH THE ABOVE DECISION IN THE C ASE OF HARJEEV AGGARWAL IS WITH REFERENCE TO THE MEANING OF UNDISCLOSED INCOME U/S 158BB OF THE INCOME-TAX ACT, HOWEVER, IN OUR OPINION, THE ABOVE OBSERVATION OF HON'BLE JURISDICTIONAL HIGH COURT WOULD BE SQUARELY APPLICA BLE WHILE CONSIDERING THE EVIDENTIARY VALUE OF THE STATEMENT WHILE MAKING THE ASSESSMENT U/S 153A 18. IN THE CASE OF BEST INFRASTRUCTURE (INDIA) (P.) LTD. (SUPRA), HON'BLE JURISDICTIONAL HIGH COURT REITERATED IN PARAGRAPH 3 8 FIFTHLY, STATEMENTS RECORDED UNDER SECTION 132(4) OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCRIMINATING MATERIAL AS HAS BEEN EXPLAINED BY THI S COURT IN HARJEEV AGGARWAL. 9. THEREFORE, ON THE ISSUE OF STATEMENT RECORDED U/ S 132(4) OF THE ACT BEING INCRIMINATING MATERIAL, WE ARE NOT IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE LD. CIT( A). IN OUR CONSIDERED VIEW THE STATEMENT RECORDED UNDER SECTIO N 132(4) OF THE ACT CAN NOT BE CONSIDERED AS INCRIMINATING MAT ERIAL FOUND IN THE COURSE OF SEARCH. BESIDES IT IS A SETTLED LE GAL POSITION THAT IN AN ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT WHICH IS UNABATED ON THE DATE OF SEARCH, NO ADDITIO N CAN BE MADE WITHOUT INCRIMINATING SEIZED MATERIALS. THE CA SE OF THE ASSESSEE IS COVERED BY THE FOLLOWING DECISIONS: A) IN CIT V. CONTINENTAL WAREHOUSING CORPORATION (N HAVA SHEVA) LTD. (2016) 374 ITR 645 (BOM)(HC) WHEREIN I T WAS HELD THAT NO ADDITION CAN BE MADE IN RESPECT OF ASSESSMENTS WHICH HAVE BECOME FINAL IF NO INCRIMINA TING MATERIAL IS FOUND DURING SEARCH. B) IN CIT V. GURINDER SINGH BAWA [2017] 79 TAXMANN. COM 398 (BOM) WHERE IT WAS HELD THAT WHERE NO INCRIMINA TING MATERIAL WAS FOUND DURING COURSE OF THE SEARCH, ENT IRE ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 14 PROCEEDINGS UNDER SECTION 153A OF THE ACT WERE WITH OUT JURISDICTION. C) IN CIT V. DEEPAK KUMAR AGARWAL [2017] 86 TAXMANN.COM 3 (BOM) WHEREIN IT WAS HELD THAT ASSESS MENT UNDER SECTION 153A OF THE ACT CAN BE MADE ONLY ON B ASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH UNDER SECTIO N 132 OF THE ACT AND ONLY INCOME RELATED TO INCRIMINATING DOCUMENTS FOUND DURING SEARCH CAN BE CONSIDERED IN THE ASSESSMENT. D) THE ITAT SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DCIT [2012] 18 ITR(T) 106 (MUM) (SB) (PAGE 1-20 OF PB - II) (PARA 7 AT PAGE 16) IT WAS HELD THAT IN CASE OF ASSESSMENTS WHICH DO NOT ABATE PURS UANT TO ISSUE OF NOTICE UNDER SECTION 153A, IN ADDITION TO INCOME THAT HAS ALREADY BEEN ASSESSED, ASSESSMENT WILL BE MADE ON BASIS OF INCRIMINATING MATERIAL FOUND IN COURSE OF SEARCH BUT NOT PRODUCED IN COURSE OF ORIGINAL ASSES SMENT AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN CO URSE OF SEARCH. 10. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND VARIOUS DECISIONS AS DISCUSSED ABOVE, WE ARE IN CLINED TO SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO DELETE THE ADDITION AS AO HAS NO JURISDICTION TO MA KE THE ADDITION. THE GROUND NO.1 IS ALLOWED. 11. BY VIRTUE OF GROUND NO. 2 TO 5, THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) IN PARTLY UPHOLDING THE ADDITI ON TO THE EXTENT OF RS. 2,95,38,019/-. ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 15 12. THE FACTS QUA THE LOANS AND ADVANCES GIVEN BY M /S. WIND WORLD INDIA LTD. HAVE ALREADY BEEN DISCUSSED IN T HE GROUND NO 1 AND ARE NOT BEING REPEATED HERE. AFTER HEARING T HE RIVAL PARTIES AND PERUSING THE MATERIAL ON RECORDS, WE FI ND THAT EVEN ON MERITS, THE ASSESSEE HAS A VERY STRONG CASE IN H IS FAVOUR. WE NOTE THAT THESE LOANS AND ADVANCES WERE GIVEN OUT O F COMMERCIAL CONSIDERATIONS AND EXPEDIENCY. THE WIND WORD (INDIA) LTD. IS ENGAGED IN THE BUSINESS OF INSTALL ING WIND MILLS AND SALES THEREOF. IN ORDER TO INSTALL THE WINDMILL S IT NEEDS LAND. THE WIND WORD (INDIA) LTD. PURCHASES LAND IN THE NA ME OF THESE RELATED COMPANIES IN ORDER TO OVERCOME THE LAND CEI LING CONDITIONS IMPOSED BY LAND CEILING ACT IN VOGUE IN VARIOUS STATES. FOR THE SAID PURPOSE, THE WIND WORD (INDIA) LTD. ADVANCES LOANS TO THESE COMPANIES AND THEREAFTER TH E NECESSARY ADJUSTMENTS ARE MADE UPON PURCHASE OF LAND. WE NOTE THAT THE WIND WORD (INDIA) LTD. HAS TO BUY LAND IN THE NAME OF RELATED ENTITIES/COMPANIES AND IT IS ONLY THAT PURPOSE THE LOANS WERE ADVANCED TO THE RELATED COMPANIES. IN OUR OPINION T HE MONEY WAS ADVANCED OUT OF BUSINESS AND COMMERCIAL CONSIDE RATION AND THEREFORE NOT COVERED BY THE PROVISIONS OF SEC TION 2(22)(E) OF THE ACT. THE CASE OF THE ASSESSEE IS SUPPORTED BY T HE FOLLOWING DECISIONS NAMELY (I) CHANDRASHEKHAR MARUTI VS. ACIT ITA NO.5410/MUM/2012 47 CCH 0783, 183 TTJ 0459, (II). ACKRUTI CITY LTD. VS. DCIT [ITA NO. 4869/MUM/2009(III)CIT V S. SURAJ DEV DADA [(2014) 46 TAXMANN.COM 402 (PUNJAB & HARYA NA)]. IN THE CASE OF CHANDRASEKHAR MARUTI VS. ACIT (SUPRA) T HE CO- ORDINATE BENCH OF THE TRIBUNAL HAS HELD THAT WHERE THERE IS A RUNNING ACCOUNT BETWEEN THE TWO SISTER CONCERNS WHE REIN THERE IS A CONTINUOUS EXCHANGE OF TRANSACTIONS AND THE AC COUNT WAS ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 16 SQUARED UP DURING THE YEAR, NO PART OF THE SAID AMO UNTS COULD BE TREATED AS BEING ATTRIBUTED TO THE SHAREHOLDERS. WE FIND THAT IN THE CASE OF THE ASSESSEE, THE FACTS ARE EXACTLY SAME AS THE FUNDS WERE TRANSFERRED TO VARIOUS ENTITIES INTER SE OUT OF COMMERCIAL EXPEDIENCY IN ORDER TO PURCHASE LAND IN THE NAME OF THESE ENTITIES IN VARIOUS STATES IN VIEW OF THE LAN D CEILING ACT IN VOGUE IN THOSE STATES. AS THE INSTALLATION OF WINDM ILLS AND SALES THEREOF IS THE BUSINESS OF THE ASSESSEE AND THE NEC ESSARY ADJUSTMENTS ARE MADE AFTER PURCHASE OF LAND BY THES E ENTITIES AND THEREFORE THE ADVANCING OF LOANS IS OUT OF BUSI NESS AND COMMERCIAL CONSIDERATION. SIMILARLY, IN THE CASE O F AKRUTI CITY LTD. VS. DCIT (SUPRA) THE IDENTICAL ISSUE WAS DECID ED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT FINANCIAL TRANSACTIONS OUT OF BUSINESS EXPEDIENCY BETWEEN TWO SISTER CONCERNS CAN NOT BE CALLED AS LOANS OR ADVANCES FOR THE PURPOSE OF INVO KING SECTION 2(22)(E) OF THE ACT. THE SAME VIEW AS HELD BY THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. S URAJ DEV DADA (SUPRA) WHEREIN IT HAS BEEN HELD THAT IT WILL BE A TRAVESTY OF LAW TO APPLY THE PROVISION OF SECTION 2(22)(E) OF T HE ACT WHERE THE ASSESSEE HAD RUNNING ACCOUNT WITH THE COMPANY WITH WHOM THE ASSESSEE ADVANCED MONEY TO THE COMPANY AS AND WHEN REQUIRED FOR THE PURPOSE OF BUSINESS AND ALSO IN REAL SENSE THE ASSESSEE HAS NOT DERIVED ANY BENEFIT FROM THE FUNDS OF THE C OMPANY. THE ISSUE IS ALSO CLARIFIED BY CBDT IN ITS CIRCULAR NO. 19/2017 DATED 12.06.2017 WHEREIN IT HAS BEEN CLARIFIED THAT TRADE ADVANCES IN THE NATURE OF COMMERCIAL TRANSACTIONS WOULD NOT FAL L WITHIN THE AMBIT OF WORDS LOANS/ADVANCES WITHIN THE MEANING O F SECTION 2(22)(E) OF THE ACT. CONSIDERING THE FACTS AND C IRCUMSTANCES OF THE CASE IN THE LIGHT OF VARIOUS DECISIONS AS DISCU SSED ABOVE, WE ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 17 ARE OF THE CONSIDERED VIEW THAT THE MONEY ADVANCED IS USED FOR THE PURPOSE OF BUSINESS OF THE FORMER A ND THEREFORE CAN NOT A LOAN/DEPOSIT TO BE TREATED AS DEEMED DIV IDEND. ACCORDINGLY, WE ARE NOT IN AGREEMENT WITH THE CONCL USION DRAWN BY THE LD. CIT(A) ON THIS ISSUE. THUS WE ARE INC LINED TO SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ITA NOS.4008, 4009 & 4010/M/2019 A.YS 2009-10, 2011- 12 & 2012-13 14. THE ISSUE RAISED IN THESE APPEALS IS SIMILAR TO ONE AS DECIDED BY US IN ITA NO.4006/M/2019 A.Y. 2007-08. THEREFORE, OUT FINDING/DECISION IN ITA NO.4006/M/2019 A.Y. 200 7-08 WOULD, MUTATIS MUTANDIS APPLY TO THESE APPEALS AS W ELL. RESULTANTLY, THE APPEALS OF THE ASSESSEES ARE ALLOW ED. 15. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2021. SD/- SD/- (AMARJIT SINGH) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 22.07.2021. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ ITA NOS.4006 & 4008/M/2019 & ORS SHRI YOGESH MEHRA & ORS 18 BY ORDER DY/ASS TT. REGISTRAR, ITAT, MUMBAI.