Appeal Details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 7051 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
7 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-08-2020
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2014-2015
Appeal Filed On
10-01-2020
Judgement Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH VC B, JAIPUR JH JES'K LH- 'KEKZ] YS[KK LNL; ,O A H JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA-@ ITA NO. 42 TO 46/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 TO 2016-17. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SHRI SANDEEP CHHABRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 47 TO 51/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 TO 2016-17. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SHRI SAJAY CHHABRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 56 TO 58/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 TO 2016-17. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SMT. NAMITA CHHABRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 52 TO 55/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 & 2014-15 TO 2016-17. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SMT. KAJAL CHHABRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT 2 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. VK;DJ VIHY LA-@ ITA NO. 59 TO 61/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 TO 2016-17. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. LATE SMT. VIMLA DEVI JAIN THROUGH LEGAL HEIR SHRI SANJAY CHHABRA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 63/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. CUKE VS. SHRI ATUL KUMAR SOGANI, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO. 07/JP/2020 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 63/JP/2020) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. SHRI ATUL KUMAR SOGANI, JAIPUR. CUKE VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29.07.2020. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 19/08/2020. 3 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THESE SIX BATCH OF 22 APPEALS BY THE REVENUE AND ON E CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST 6 SEPARATE ORDERS OF LD. CIT (A) ALL DATED 09.10.2019 FOR THE ASSESSMENT YEARS 2012-13 TO 2016-17. THESE APP EALS ARE ARISING FROM A SEARCH AND SEIZURE ACTION CARRIED OUT ON 22 ND JULY, 2015 IN CASE OF MOTISONS GROUP UNDER WHICH ALL THESE SIX ASSESSES ARE COVERED. SINCE COMMON I SSUES ARE INVOLVED IN ALL THESE APPEALS FILED BY THE REVENUE AND CROSS OBJECTION FI LED BY THE ASSESSEE ARISING FROM SAME IDENTICAL FACTS AND CIRCUMSTANCES AS WELL AS S AME SEARCH AND SEIZURE ACTION, THEREFORE, ALL THESE 22 APPEALS FILED BY THE REVENU E AND ONE CROSS OBJECTION FILED BY THE ASSESSEE ARE CLUBBED TOGETHER FOR THE PURPOSE OF HE ARING AND DISPOSAL. THE LD. CIT D/R AS WELL AS THE LD. A/R OF THE ASSESSEE HAVE AGREED THAT THE ISSUE INVOLVED IN THE APPEAL IN ITA NO. 49/JP/2020 COVERS ALL THE ISSUES INVOLVE D IN THE REST OF THE APPEALS. THEREFORE, THE APPEAL IN ITA NO. 49/JP/2020 IS TAKE N AS A LEAD CASE FOR THE PURPOSE OF RECORDING THE FACTS AND ADJUDICATION OF THE DISPUTE . IN ITA NO. 49JP/2020, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS (INDEPENDENTLY & SEVERALLY) IN GRANTING RELIEF TO THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF R S. 11,75,14,258/- AS UNEXPLAINED CREDIT, MADE U/S 68 OF THE INCOME TA X ACT, BY HOLDING THAT NO ADDITION COULD BE MADE U/S 153A OF THE INCOME TAX ACT ON THE BASIS OF STATEMENT RECORDED U/S 132( 4) AND THE 4 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. POWER OF THE ASSESSING OFFICER TO ASSESS OR REASSES S TOTAL INCOME U/S 153A IS RESTRICTED TO THE MATERIAL FOUND DURING SEARCH. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF R S. 11,75,14,258/- MADE U/S 68 ON ACCOUNT OF BOGUS LONG TERM CAPITAL G AIN WHICH WAS CLAIMED BY THE ASSESSEE AS EXEMPT INCOME U/S 10 (38) OF THE ACT, IGNORING THE FACT THAT AO HAS NOT PREDOMINATEL Y RELIED ON THE STATEMENT OF ENTRY PROVIDER AND INFORMATION RECEIVE D FROM INVESTIGATION WING, BUT ALSO ON ANALYSIS OF FINANCI AL FUNDAMENTALS OF THE SCRIP. THERE WAS NO REASON FOR A SHARE WITH SUCH WEAK FUNDAMENTALS TO HAVE RISEN TO SUCH ASTRONOMICAL PRI CE RANGING FROM 1000% TO 5000% IN SUCH A SHORT TIME. THUS THE LD. C IT (A), DID NOT CONSIDER THAT THESE TRANSACTIONS DO NOT WITHSTA ND THE TEST OF HUMAN PROBABILITY AS HELD BY THE HON'BLE SUPREME CO URT IN THE CASES OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (S C) AND CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC). 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF R S. 11,75,14,258/- MADE U/S 68 ON ACCOUNT OF BOGUS LONG TERM CAPITAL G AIN IN SPITE OF THE FACT THAT SH. SANJAY CHHABRA, THE KEY PERSON OF THE GROUP, IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT DURING SEARCH AND SEIZURE PROCEEDINGS CATEGORICALLY ADMITTED ON OATH AT Q.NO. 14 OF THE STATEMENT THAT HE AND HIS FAMILY MEMBERS I.E. S MT. KAJAL CHHABRA, SMT. NAMITA CHHABRA, SH. SANDEEP CHHABRA A ND SMT. VIMLA DEVI JAIN HAD TAKEN ACCOMMODATION ENTRY OF BO GUS CAPITAL GAIN BY GIVING CASH GENERATED BY UNDISCLOSED INCOME OF ANTIQUE JEWELLERY BUSINESS. THE RETRACTION OF DISCLOSURE/S URRENDER IS AN AFTERTHOUGHT AND THE RETRACTION DOES NOT MERIT ANY LEGAL COGNIZANCE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT (A) HAS ERRED IN ADJUDICATING THAT NO ENQUI RY/INVESTIGATION WERE MADE IN SPITE OF THE FACT THAT NOTICES U/S 133 (6) WERE ISSUED TO THE SELLER OF SHARES IN PHYSICAL FORM M/S. FESTI NO VINCOM PVT. LTD. AND TO THE COMPANIES (BAVISCON VINCOM LIMITED (NOW KNOWN AS UNNO INDUSTRIES LTD.) WHOSE SHARES WERE PURCHASE D/SOLD BY ASSESSEE. THE NOTICE ISSUED TO M/S. UNNO INDUSTRIES LTD. HAS RETURNED BACK WITH THE REMARKS LEFT AND TILL COMP LETION OF ASSESSMENT PROCEEDINGS NO COMPLIANCE HAS BEEN MADE BY OTHERS. FURTHER, EXCELLENT PAPER WORK CANNOT CAMOUFLAGE REA LITY. 5 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF R S. 11,75,14,258/- MADE U/S 68 ON ACCOUNT OF BOGUS LTCG IN SPITE OF TH E FACT THAT SEBI HAD, VIDE CIRCULAR NO. SMDRP/POLICY/CIT-21/99 DATED 14.09.1999 BANNED ALL NEGOTIATED DEALS INCLUDING CR OSS DEALS AND ALL SUCH DEALS WERE REQUIRED TO BE EXECUTED ONLY ON THE SCREENS OF EXCHANGES IN THE PRICE AND ORDER MATCHING MECHANISM OF THE EXCHANGE JUST LIKE ANY OTHER NORMAL TRADE. 7. THE LD. CIT (A) HAS FAILED TO FOLLOW PROPOSITION OF LAW AS LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF SUMAN PODDA R VS. ITO, 112 TAXMAN.COM 330 (SC) THAT THE PROFIT CLAIMED TO BE EARNED BY THE ASSESSEE ARE A PART OF MAJOR SCHEME OF ACCOMMOD ATION ENTRIES. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 2 3,50,285/- U/S 69 OF THE IT ACT, 1961 MADE BY THE AO ON ACCOUNT OF UN EXPLAINED COMMISSION EXPENDITURE FOR TAKING BOGUS ACCOMMODATI ON ENTRY IN THE FORM OF LONG TERM CAPITAL GAIN WITHOUT APPRECIA TING THE FACTS OF THE CASE. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN LAW, THE CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS. 9 ,56,02,794/- MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INCOME OF ANTIQUE JEWELLERY BUSINESS. THE ADDITION WAS MADE BASED ON STATEMENT RECORDED ON OATH U/S 132(4) OF THE IT ACT 1961. TH E STATEMENT RECORDED U/S 132(4) OF THE INCOME TAX ACT, IS HAVIN G EVIDENTIARY VALUE AND RETRACTION FROM IT IS AN AFTER THOUGHT AS IT WAS MADE AFTER 148 DAYS I.E. ABOUT 5 MONTHS FROM THE DAYS OF SEARC H. 10. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT THE TIME HE ARING OF THE APPEAL. THE HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDE O CONFERENCE DUE TO PREVAILING CONDITION OF COVID 19 PANDEMIC. 6 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 2. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FR OM SALARY, HOUSE PROPERTY, CAPITAL GAIN AND OTHER SOURCES. THE ASSESSEE FILED HIS RETURN OF INCOME UNDER SECTION 139(1) ON 28.11.2014 DECLARING TOTAL INCOME AT RS. 1,71,91,640/-. THEREAFTER THERE WAS A SEARCH AND SEIZURE UNDER SECTION 132(1) OF THE IT ACT ON 22 ND JULY, 2015 IN THE CASE OF MOTISONS GROUP IN WHICH, THE ASSESSEE ALONG WITH OTHER FAMILY MEMBERS ARE COVERED. IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE IT ACT ISSUED BY THE AO ON 30 TH SEPTEMBER, 2015, THE ASSESSEE FILED HIS RETURN OF I NCOME ON 25.11.2015 DECLARING TOTAL INCOME OF RS. 1,47,33,910/-. THE AO NOTED THAT THE ASSESSEE HAS DECLARED EVEN LESS INCOME THAN THE INCOME DECLARED IN THE RETURN OF IN COME FILED UNDER SECTION 139(1) OF THE IT ACT. THE AO FURTHER NOTED THAT DURING COURS E OF SEARCH AND SEIZURE PROCEEDINGS THE ASSESSEE, WHO IS ONE OF THE KEY PERSONS OF MOTI SONS GROUP, HAD ACCEPTED LONG TERM CAPITAL GAINS FROM SALE OF SHARES OF RS. 26,23 ,12,578/- ON BEHALF OF ALL FAMILY MEMBERS WHICH INCLUDES RS. 4,07,20,884/- PERTAINS T O THE ASSESSEE HIMSELF AS BOGUS ACCOMMODATION ENTRIES AND THEREBY VOLUNTARILY SURRE NDERED THIS AMOUNT FOR TAXATION IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE IT ACT. THE SAID STATEMENT WAS FURTHER CONFIRMED IN THE STATEMENT RECORDED DURING THE POST SEARCH PROCEEDINGS BUT THIS INCOME WAS NOT SHOWN IN THE RETURN OF INCOME FILED FOR THE RELEVANT PERIOD. THE AO FURTHER STATED THAT SEARCH AND SEIZURE OPERATIONS H AVE BEEN CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT AT VARIOUS PLA CES THROUGHOUT THE COUNTRY IN WHICH IT IS DISCOVERED THAT VARIOUS SYNDICATES HAVE ARRAN GED ACCOMMODATION ENTRIES OF BOGUS LONG TERM CAPITAL GAINS/LOSSES, BOGUS SHORT TERM CA PITAL GAINS/LOSSES THROUGH TRADING OF SHARES OF PENNY STOCKS. THE AO FURTHER NOTED THAT M/S. LAMBODAR NIRMIT 7 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PVT. LTD. ( LATER ON MERGED IN INDIA INFOTECH & SOF TWARE LTD.) AND M/S. UNNO INDUSTRIES LTD. ARE PENNY STOCK LISTED COMPANIES WHICH HAVE VE RY SMALL CAPITAL BASE BUT ITS MARKET CAPITALIZATION IS MULTIFOLD TO ITS CAPITAL BASE. TH E ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAINS FROM PURCHASE AND SALES OF SHARES OF M/S. INDIA INFOTECH & SOFTWARE LTD. AND M/S. UNNO INDUSTRIES LTD., WHICH ARE CLAIMED AS EXEMPT UNDER SECTION 10(38) OF THE IT ACT. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS REGARDING WHEN AND HOW THE SHARES OF THESE COMPANIES WERE PURCHASED. IN RESPO NSE, THE ASSESSEE FURNISHED THE DETAILS AND EXPLAINED THE DATES OF PURCHASE, PAYMEN T OF PURCHASE CONSIDERATION, INVOICES ISSUED BY THE SELLER, DEMATERIALIZATION OF THE SHARES IN THE DEMAT ACCOUNT OF THE ASSESSEE, MERGER OF THE COMPANIES AS PER THE SC HEME OF MERGER APPROVED BY THE HONBLE HIGH COURT AND SUBSEQUENT ISSUANCE OF SHAR ES OF THE POST MERGER ENTITY. THE ASSESSEE ALSO EXPLAINED THAT IN BETWEEN THE SHARES WERE SPLITTED IN THE RATIO OF 1:10 AND ORIGINAL HOLDING OF 2,00,000 SHARES WERE RESULT ED IN 20,00,000 SHARES. SIMILARLY, THE BONUS SHARES WERE ALSO ISSUED IN THE RATIO OF 7 9:1 AND ASSESSEE GOT ALLOTTED THE BONUS SHARES OF M/S. UNNO INDUSTRIES LTD. THEREAFT ER, SOME PREFERENTIAL ALLOTMENTS WERE ALSO RECEIVED BY THE ASSESSEE. ALL THESE SHAR ES WERE DEMATERIALIZED AND APPEARING IN THE DEMAT ACCOUNT OF THE ASSESSEE. TH US THE ASSESSEE PRODUCED THE DETAILS AND DOCUMENTS OF ACQUISITION AND SALE OF SH ARES. THE AO AFTER ANALYZING THE FINANCIAL CONDITIONS OF THESE COMPANIES HAS HELD TH AT THIS STEEP RISE IN THE SHARES OF THESE COMPANIES IS NOT JUSTIFIED BY THEIR FINANCES AND NET WORTH. THE AO THEREAFTER REFERRED TO VARIOUS STATEMENTS RECORDED BY THE INVE STIGATION WING, CALCUTTA IN THE YEARS 2013, 2015 AND 2016 DURING THE COURSE OF VARIOUS SE ARCH AND SEIZURE ACTIONS AND FINALLY 8 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. HELD THAT THE TRANSACTIONS OF PURCHASES AND SALES O F SHARES ARE BOGUS ACCOMMODATION ENTRIES RECEIVED BY THE ASSESSEE FROM THE PERSONS W HO WERE MANAGING THESE PENNY STOCK COMPANIES FOR THE PURPOSE OF PROVIDING THE AC COMMODATION ENTRY. THE AO ALSO HELD THAT THESE ARE ONLY PAPER COMPANIES NOT HAVING ACTUAL OPERATIONS OR BUSINESS. THEREFORE, THE ASTRONOMICAL PRICE RISE OF SHARES IS NOTHING BUT IS AN ORGANIZED MALPRACTICE OF SYNDICATE MEMBERS/BROKERS WHO ARE PR OVIDING ACCOMMODATION ENTRIES. THUS BASED ON THE ASSESSEES OWN DISCLOSURE DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AS WELL AS THE STATEMENTS RECORDED BY THE INVESTIGATION WING CALCUTTA, THE AO HAS MADE THE ADDITION OF THE ENTIRE LONG TERM CA PITAL GAIN ALONG WITH 2% COMMISSION ALLEGEDLY PAID IN RESPECT OF THE ACCOMMO DATION ENTRIES RECEIVED BY THE ASSESSEE BY TREATING THE SAME AS UNEXPLAINED INCOME AND EXPENDITURE. THE AO HAS ALSO MADE AN ADDITION THOUGH ON PROTECTIVE BASIS ON ACCOUNT OF UNDISCLOSED BUSINESS INCOME OF THE ASSESSEE FROM ANTIQUE JEWELLERY BUSIN ESS. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND SUBMITT ED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZ URE. EVEN THE ASSESSEE WAS SUBJECTED TO SECOND SEARCH WITHIN A SPAN OF LESS TH AN 3 YEARS AS THERE WAS EARLIER SEARCH ON 31.10.2012 AND THE TRANSACTIONS IN QUESTI ON REGARDING PURCHASE OF SHARES WERE ALREADY PART OF THE RECORD AT THE TIME OF FIRS T SEARCH. FURTHER, THE ASSESSEE HAS CONTENDED THAT SOME OF THE ASSESSMENT YEARS COVERED UNDER THESE SEARCHES I.E. 2012- 13 AND 2013-14 WERE ALREADY COMPLETED UNDER SECTION 143(3) READ WITH SECTION 153A OF THE IT ACT IN PURSUANT TO THE EARLIER SEARCH AND WE RE NOT PENDING ON THE DATE OF CURRENT SEARCH ON 22 ND JULY, 2015. THEREFORE, IN THE ABSENCE OF ANY INCR IMINATING MATERIAL 9 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTIO N, THE ADDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SECTION 153A IS NOT SUSTAINAB LE IN LAW. THE ASSESSEE RELIED UPON VARIOUS JUDGMENTS INCLUDING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF JAI STEEL (INDIA) VS. ACIT, 259 CTR (RAJ.) 281. THE LD. CIT (A) AFTER CONSIDERING THE FACTS AS WELL AS THE PRECEDENTS ON THE POINT HELD T HAT THE ADDITION MADE BY THE AO FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 WITHOUT AN Y INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION IS N OT SUSTAINABLE. SINCE THE OTHER ASSESSMENTS WERE NOT COMPLETED BUT WERE PENDING AS ON THE DATE OF SEARCH, THEREFORE, THE ADDITION MADE BY THE AO WAS ALSO CONSIDERED BY THE LD. CIT (A) ON THE MERITS AND THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN T REATED AS ACCOMMODATION ENTRY WAS DELETED BY THE LD. CIT (A) AS IT WAS BASED MERELY O N STATEMENTS WITHOUT ANY DOCUMENTARY EVIDENCE. AGGRIEVED BY THE ORDER OF TH E LD. CIT (A), THE REVENUE HAS FILED THE PRESENT APPEALS BEFORE US. 3. BEFORE US, THE LD. CIT D/R SUBMITTED THAT THE AS SESSMENTS WERE COMPLETED UNDER SECTION 153A OF THE IT ACT IN PURSUANT TO THE SEARCH AND SEIZURE ACTION. THE AO UNDER SECTION 153A SHALL ASSESS OR RE-ASSESS THE IN COME OF THE ASSESSEE FOR THE SIX YEARS AS COVERED UNDER THE SEARCH. THEREFORE, IT I S NOT THE INTENTION OF THE LEGISLATURES THAT IN THE PROCEEDINGS UNDER SECTION 153A THE AO C ANNOT MAKE THE ADDITION IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION. HE HAS FURTHER SUBMITTED THAT THE AO IS COMPETENT T O ASSESS THE INCOME OF THE ASSESSEE BASED ON THE OTHER MATERIAL NOTICED DURING THE COURSE OF ASSESSMENT 10 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PROCEEDINGS. THEREFORE, ANY STATEMENT MADE DURING THE COURSE OF SEARCH BY THE ASSESSEE IS A VALUABLE PIECE OF EVIDENCE IN ORDER T O INVOKE SECTION 153A OF THE IT ACT. HE HAS FURTHER CONTENDED THAT ONCE THE ASSESSMENT P ROCEEDINGS ARE INITIATED UNDER SECTION 153A OF THE IT ACT, THE SAME CAN BE CONCLUD ED AGAINST INTEREST OF THE ASSESSEE BY MAKING ADDITION EVEN WITHOUT ANY INCRIMINATING M ATERIAL BEING AVAILABLE AGAINST THE ASSESSEE IN SEARCH UNDER SECTION 132 ON THE BASIS O F WHICH NOTICE UNDER SECTION 153A WAS ISSUED. THE AO CAN FRAME THE ASSESSMENT UNDER SECTION 153A RELYING ON SOME INFORMATION NOT UNEARTHED DURING THE SEARCH AND THE ASSESSMENT ORDER PASSED UNDER SECTION 153A IS IN ACCORDANCE WITH THE LAW. THUS T HE LD. CIT D/R HAS SUBMITTED THAT WHEN THE ASSESSEE HIMSELF HAS STATED IN THE STATEME NT RECORDED DURING THE COURSE OF SEARCH AND POST SEARCH ENQUIRY THAT THE LONG TERM C APITAL GAINS SHOWN BY HIM AS WELL AS BY OTHER FAMILY MEMBERS ARE BOGUS ACCOMMODATION ENTRIES AVAILED BY THE ASSESSEE AND HIS FAMILY MEMBERS, THE SAID STATEMENT ITSELF I S AN INCRIMINATING MATERIAL SUFFICIENT FOR FRAMING THE ASSESSMENT UNDER SECTION 153A OF TH E ACT. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE FOLLOWING DECISIONS :- CIT VS. ST. FRANCIS CLAY DECOR TILES 70 TAXMANN.COM 234 (KERALA) SECTION 153A , READ WITH SECTION 132 AND 132A OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT IN CASE OF ( SCOPE OF) - ASSESSMENT YEARS 2002-03 TO 2006-07 - WHETHER WHERE THERE WAS A DISCLOSURE MADE BY GIVING A STATEMENT DURING COURSE OF SEARCH, ASSESSING OFFICER, BY VIRTUE OF POWER CONFERRED ON HIM UNDER SECTION 153A WAS COMPETENT TO ISSUE NOTICE UNDER SAID PROVISION AND REQUIRE ASSESSEE FIRM 11 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TO FURNISH RETURNS AS PROVIDED THEREUNDER - HELD, Y ES - WHETHER NEITHER UNDER SECTION 132 NOR UNDER SECTION 153A, PHRASEOLO GY 'INCRIMINATING' IS USED BY PARLIAMENT, THEREFORE, ANY MATERIAL WHICH W AS UNEARTHED DURING SEARCH OPERATIONS OR ANY STATEMENT MADE DURING COUR SE OF SEARCH BY ASSESSEE IS A VALUABLE PIECE OF EVIDENCE IN ORDER T O INVOKE SECTION 153A - HELD, YES [PARA 21][MATTER REMANDED/IN FAVOUR OF RE VENUE] E.N. GOPAKUMAR VS. CIT 75 TAXMANN.COM 215 (KERALA) SECTION 153A, READ WITH SECTION 132, OF THE INCOME- TAX ACT, 1961 - SEARCH & SEIZURE - ASSESSMENT IN CASE OF (SCOPE OF) - WHET HER FOR ISSUANCE OF A NOTICE UNDER SECTION 153A(1)(A), IT IS NOT NECESSAR Y THAT SEARCH ON WHICH IT WAS FOUNDED SHOULD HAVE NECESSARILY YIELDED ANY INCRIMINATING MATERIAL AGAINST ASSESSEE OR PERSON TO WHOM SUCH NOTICE IS I SSUED - HELD, YES - WHETHER, THEREFORE, ASSESSMENT PROCEEDINGS GENERATE D BY ISSUANCE OF A NOTICE UNDER SECTION 153A(1)(A) CAN BE CONCLUDED AG AINST INTEREST OF ASSESSEE INCLUDING MAKING ADDITIONS EVEN WITHOUT AN Y INCRIMINATING MATERIAL BEING AVAILABLE AGAINST ASSESSEE IN SEARCH UNDER SECTION 132 ON BASIS OF WHICH NOTICE WAS ISSUED UNDER SECTION 153A (1)(A) - HELD, YES [PARAS 7 AND 8] [IN FAVOUR OF REVENUE] CIT VS. MGF AUTOMOBILES LTD. 72 TAXMANN.COM 240 (SC), THE SLP FILED THE DEPARTME NT HAS BEEN ADMITTED. SECTION 153A , OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT IN CASE OF (CONDITIONS PRECEDENT) - ASSE SSMENT YEARS 2004-05 AND 2005-06 - PURSUANT TO HIGH COURT'S ORDER COMPAN Y CML WAS 12 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AMALGAMATED WITH ASSESSEE-COMPANY FROM 1-4-2003 - I N RETURNS OF INCOME, ASSESSEE SET OFF LOSSES OF COMPANY CML AGAI NST ITS INCOME - THEREAFTER A SEARCH TOOK PLACE IN ASSESSEE'S PREMIS ES AND CERTAIN INCRIMINATING MATERIAL WAS SEIZED, WHICH WAS STATED TO BE DESTROYED IN A FIRE THAT TOOK PLACE AT PREMISES OF REVENUE - CONSE QUENT TO SEARCH, ASSESSING OFFICER FRAMED ASSESSMENTS DISALLOWING SE T OFF OF LOSSES OF COMPANY CML AND MADE ADDITIONS - HIGH COURT BY IMPU GNED ORDER HELD THAT SINCE ASSESSING OFFICER PROCEEDED TO FRAME ASS ESSMENTS UNDER SECTION 153A RELYING ON SOME INFORMATION NOT UNEART HED DURING SEARCH, ASSESSMENT ORDERS SO PASSED WERE NOT SUSTAINABLE IN LAW - WHETHER SPECIAL LEAVE PETITION FILED AGAINST IMPUGNED ORDER WAS TO BE GRANTED - HELD, YES [PARA 2] [IN FAVOUR OF REVENUE] CIT VS. DR. P. SASIKUMAR 73 TAXMANN.COM 173 (KERALA) I. SECTION 153A , READ WITH SECTIONS 132 AND 132A , OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT IN CASE OF ( SUBMISSION OF RETURNS FOR SIX YEARS) - ASSESSMENT YEARS 2002-03 TO 2008-0 9 - WHETHER ANY MATERIAL UNEARTHED DURING SEARCH OPERATIONS OR ANY STATEMENT MADE DURING COURSE OF SEARCH BY ASSESSEE IS A VALUABLE P IECE OF EVIDENCE IN ORDER TO INVOKE SECTION 153A - HELD, YES - WHETHER ONCE SEARCH IS INITIATED UNDER SECTION 132 OR A REQUISITION IS MADE UNDER SE CTION 132A, ASSESSING OFFICER IS EMPOWERED TO ISSUE NOTICE TO PERSON SEAR CHED REQUIRING HIM TO FURNISH RETURN OF INCOME IN RESPECT OF EACH OF FOLL OWING SIX ASSESSMENT YEARS AS REFERRED TO IN CLAUSE (B) OF SECTION 153A( 1) - HELD, YES - WHETHER ONCE AFORESAID NOTICE IS ISSUED, ASSESSEE HAS TO FU RNISH ALL DETAILS WITH RESPECT TO EACH ASSESSMENT YEAR SINCE SAME IS TREAT ED AS A RETURN FILED UNDER SECTION 139 - HELD, YES - WHETHER EVEN IF NO DOCUMENTS ARE 13 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. UNEARTHED, NOR ANY STATEMENT WAS MADE BY ASSESSEE D URING COURSE OF SEARCH UNDER SECTION 132 OR ANY MATERIAL IS RECEIVE D FOR AFORE SPECIFIED PERIOD OF SIX YEARS, ASSESSEE IS BOUND TO FILE A RE TURN - HELD, YES - WHETHER ABATEMENT OF ASSESSMENT OR REASSESSMENT PEN DING ON DATE OF INITIATION OF SEARCH WITHIN PERIOD OF SIX ASSESSMEN T YEARS SPECIFIED UNDER SECTION 153A WILL ALSO NOT ABSOLVE ASSESSEE FROM HI S LIABILITY TO SUBMIT RETURNS AS PROVIDED UNDER SECTION 153A(1)(A) - HELD , YES [PARAS 5 & 6] [IN FAVOUR OF REVENUE] THE LD. CIT D/R HAS FURTHER SUBMITTED THAT THE LD. CIT (A) HAS RELIED UPON THE DECISION IN CASE OF PCIT VS. MEETA GUTGUTIA, 96 TAXMANN.COM 468 (SC) WHEREIN THE SLP FILED BY THE DEPARTMENT WAS DISMISSED BY THE HONBLE SUPREME COURT. HOWEVER, THE HONBLE SUPREME COURT HAS ADMITTED THE SLP FILED BY THE DEP ARTMENT IN CASE OF PCIT VS. DEVI DASS GARG REPORTED IN 114 TAXMANN.COM 552. SIMILAR LY, IN CASE OF PCIT VS. BEST INFRASTRUCTURE (INDIA) LTD. 94 TAXMAN.COM 115 (SC) AS WELL AS IN CASE OF PCIT VS. DHANANJAY INTERNATIONAL LTD. 114 TAXMAN.COM 351 (SC ), THE HONBLE SUPREME COURT HAS ADMITTED THE SLP FILED BY THE DEPARTMENT. HE HAS AL SO REFERRED THE CASE OF PCIT VS. GAHOI FOODS LTD. 117 TAXMAN.COM 118 (SC) WHEREIN TH E SLP FILED BY THE DEPARTMENT WAS ADMITTED BY THE HONBLE SUPREME COURT. THUS TH E LD. CIT D/R HAS SUBMITTED THAT THERE ARE DECISIONS IN FAVOUR OF THE REVENUE WHEREI N IT IS HELD THAT FOR MAKING ADDITION IN THE PROCEEDINGS UNDER SECTION 153A IT IS NOT MAN DATORY THAT ANY INCRIMINATING MATERIAL BE DETECTED DURING THE COURSE OF SEARCH AN D SEIZURE BUT IF THE AO HAS DETECTED ANY MATERIAL OR RECEIVED ANY INFORMATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS 14 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ITSELF, HE CAN MAKE THE ADDITION. THE LD. CIT D/R HAS FURTHER SUBMITTED THAT EVEN OTHERWISE THIS LEGAL OBJECTION WAS RAISED IN RESPEC T OF TWO ASSESSMENT YEARS BEING 2012-13 AND 2013-14 WHERE THE ASSESSMENTS WERE NOT PENDING AS ON THE DATE OF SEARCH BUT IN THE OTHER ASSESSMENTS WHERE THE PROCE EDINGS UNDER SECTION 153A OF THE IT ACT ARE IN THE NATURE OF REGULAR ASSESSMENT AND NOT IN THE NATURE OF RE-ASSESSMENT, THE AO CAN MAKE THE ADDITION EVEN WITHOUT ANY INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE ADMISSION OF THE ASSESSEE DU RING THE COURSE OF SEARCH AND POST- SEARCH ENQUIRY IS A MATERIAL EVIDENCE AND SUBSEQUEN T ATTEMPT OF THE ASSESSEE TO RETRACT FROM THE EARLIER ADMISSION CANNOT BE ACCEPTED. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL DATED 29. 12.2017 IN CASE OF BANNALAL JAT VS. ACIT IN ITA NO. 720/JP/2017 AS WELL AS JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN CASE OF CIT VS. RAVI MATHUR & OTHERS DATED 13.05.2 016 IN DB IT APPEAL NO. 67/2002 AND SUBMITTED THAT ONCE THE ASSESSEE HAS ADMITTED T HE BOGUS ACCOMMODATION ENTRY IN HIS STATEMENT RECORDED UNDER SECTION 132(4) OF THE IT ACT AND ALSO REITERATED THE SAID ADMISSION IN THE SUBSEQUENT STATEMENTS MADE BY THE ASSESSEE UNDER SECTION 131 DURING THE POST SEARCH ENQUIRY, THEN THE RETRACTION MADE BY THE ASSESSEE AFTER A GAP OF CONSIDERABLE TIME CANNOT BE ACCEPTED. THE ASSESSEE CANNOT TAKE THE PLEA OF ANY PRESSURE OR COERCIVE ACTION ON THE PART OF THE DEPA RTMENT WHEN IN THE STATEMENT RECORDED UNDER SECTION 131 DURING POST SEARCH ENQUI RY THE ASSESSEE HAS MADE THE SAME STATEMENT VOLUNTARILY CLEARLY AFFIRMED IN THE STATEMENT ITSELF. THEREFORE, CONSISTENTLY MAINTAINING HIS EARLIER STAND CANNOT B E RETRACTED MERELY ON THE GROUND THAT THE EARLIER STATEMENTS AND SURRENDER WERE MADE UNDE R PRESSURE. THE LD. CIT D/R HAS 15 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. FURTHER SUBMITTED THAT THE AO HAS BROUGHT SUFFICIEN T MATERIAL ON RECORD TO ARRIVE AT THE CONCLUSION THAT THE LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE IS NOTHING BUT BOGUS ACCOMMODATION ENTRIES. THE AO HAS GIVEN ALL T HE FINANCIAL DETAILS OF THESE COMPANIES I.E. M/S. INDIA INFOTECH & SOFTWARE LTD. AS WELL AS M/S. UNNO INDUSTRIES LTD. THE AO HAS DULY CONSIDERED AND ANALYZED THE VARIOUS FACTORS IN DETERMINING THE PRICE OF A SHARE AND IT WAS NOTICED THAT THE EPS OF THESE TW O COMPANIES IS ALMOST NIL AND, THEREFORE, THE PRICE AT WHICH THE SHARES CLAIMED TO HAVE BEEN SOLD BY THE ASSESSEE IS NOT SUPPORTED BY THE FINANCE OF THESE COMPANIES. T HE AO HAS GIVEN ALL THE DETAILS OF THE TRADING OF SHARES OF THESE COMPANIES SINCE THE YEAR 2010 TO OCTOBER, 2017 AND HAS NOTICED THAT EARLIER THERE WAS VERY LOW VOLUME/TURN OUT OF THE TRADING IN THE SHARES OF THESE COMPANIES AND EVEN THE SHARE PRICES WAS ONLY IN FRICTION OF A RUPEE AND SUDDENLY THE SHARE PRICES OF THESE COMPANIES WERE RIPE IN TH E STOCK EXCHANGE WHICH IS NOTHING BUT ARTIFICIAL PRICE RISE TO FACILITATE THE ACCOMMO DATION ENTRIES BY SHOWING THE SALE OF SHARES AT A STEEP HIGH PRICE. THE AO HAS REPRODUCE D THE STATEMENTS OF VARIOUS PERSONS RECORDED BY THE INVESTIGATION WING, CALCUTTA DURING THE SEARCH AND SEIZURE ACTION WHEREIN THE KEY PERSONS MANAGING THE AFFAIRS OF THE SE COMPANIES HAVE ADMITTED THE FACT THAT THESE COMPANIES ARE BEING USED ONLY FOR P ROVIDING ACCOMMODATION ENTRIES FOR LONG TERM/SHORT TERM CAPITAL GAINS AND LOSSES AND T HERE IS NO REAL BUSINESS OF THESE COMPANIES. THUS THE ADDITION MADE BY THE AO IS BAS ED ON SUFFICIENT MATERIAL AVAILABLE ON RECORD. HE HAS RELIED UPON THE ORDER OF THE AO. HE HAS RELIED UPON JUDGMENT OF HONBLE SUPREME COURT IN CASE OF NAWABGANJ SUGAR MI LLS CO. LTD. VS. CIT, 86 ITR 44 (SC) AND SUBMITTED THAT IT WAS HELD BY THE HONBLE SUPREME COURT THAT THE TRIBUNAL HAS 16 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TO ACT JUDICIOUSLY AND TO CONSIDER ALL THE MATERIAL FACTS IN FAVOUR AND AGAINST THE ASSESSEE WITH DUE CARE AND THEN RECORD ITS FINDING ON THE CONTENTIONS RAISED BY THE PARTIES IN THE LIGHT OF EVIDENCE AND RELEVANT LAW. THE HONBLE SUPREME COURT HAS FURTHER OBSERVED THAT AN ORDER RECORDED ON A REVIEW OF ONLY ONE PART OF THE EVIDENCE IGNORING REMAINING EVIDENCE CANNOT BE REGARDED AS H AVING CONCLUSIVELY DETERMINED THE QUESTION OF FACT PLACED BEFORE THE TRIBUNAL. THUS T HE LD. CIT D/R HAS SUBMITTED THAT THE EVIDENCE BROUGHT ON RECORD BY THE AO CANNOT BE IGNO RED. HE HAS ALSO RELIED UPON A DECISION OF HONBLE DELHI HIGH COURT IN CASE OF SUM AN PODDAR VS. ITO, 112 TAXMAN.COM 329 (DEL.) AND SLP FILED BY THE ASSESSEE HAS BEEN D ISMISSED BY THE HONBLE SUPREME COURT REPORTED IN 112 TAXMANN.COM 330 (SC). HE HAS ALSO RELIED UPON THE FOLLOWING DECISIONS :- UDIT KALRA VS. ITO VIDE ORDER DATED 08.03.2019 IN ITA NO. 10774/201 9 (DELHI HIGH COURT) SEBI VS. RAKHI TREADING PRIVATE LTD. IN CIVIL APPEAL NO. 1969 OF 2011 WITH CIVIL APPEAL NOS. 3174-3177 OF 2011 AND CIVIL APPEAL NO. 3180 OF 2011. (SUPREME COURT) CIT VS. SMT. SANGHAMITRA BHARALI 50 TAXMANN.COM 47 (GAUHATI HIGH COURT) THUS THE LD. CIT D/R HAS SUBMITTED THAT WHEN THE EV IDENCE BROUGHT ON RECORD BY THE AO AS WELL AS DISCLOSURE MADE BY THE ASSESSEE COUPL ED WITH THE STATEMENTS RECORDED UNDER SECTION 132(4) CONSTITUTE AN IMPORTANT PIECE OF EVIDENCE TO HOLD THAT THE 17 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TRANSACTION OF PURCHASE AND SALE OF THE SHARES AND ALLEGED LONG TERM CAPITAL GAIN IS NOTHING BUT BOGUS ACCOMMODATION ENTRIES AVAILED BY THE ASSESSEE. 4. ON THE OTHER HAND, THE LD. A/R HAS SUBMITTED THA T THE ACQUISITION OF SHARES IN QUESTION WERE DULY RECORDED IN THE BOOKS OF ACCOUNT AND THE TRANSACTION OF PURCHASE WAS SUPPORTED BY THE DOCUMENTARY EVIDENCE OF BILLS, TRANSFER OF SHARES IN THE NAME OF THE ASSESSEE AND THE PAYMENT OF PURCHASE CONSIDERAT ION BY THE ASSESSEE THROUGH BANKING CHANNEL. ALL THE PAYMENTS WERE MADE BY THE ASSESSEE THROUGH BANKING CHANNEL AND THERE IS NO PAYMENT IN CASH. FURTHER, THE SHARES WERE DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE AND THEREFORE, HO LDING OF THE SHARES BY THE ASSESSEE SINCE THE YEAR 2012 CANNOT BE DISPUTED. T HE EVIDENCES PRODUCED BY THE ASSESSEE ARE NOT THE DOCUMENTS PREPARED BY THE ASSE SSEE BUT ALL THESE EVIDENCES ARE THIRD PARTY EVIDENCE INCLUDING THE BANK STATEMENT A ND DEMAT ACCOUNT. THEREFORE, ONCE THE ASSESSEE HAS PRODUCED THE EVIDENCE IN SUPPORT O F THE CLAIM OF GENUINENESS OF THE TRANSACTION THEN IN THE ABSENCE OF ANY CONTRARY EVI DENCE TO DISPROVE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE, THE AO CANNOT TR EAT THESE TRANSACTIONS AS BOGUS ACCOMMODATION ENTRIES MERELY ON THE BASIS OF SOME S TATEMENTS RECORDED BY THE INVESTIGATION WING, CALCUTTA OF THE ALLEGED PERSONS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. THE LD. A/R HAS FURTHER SUB MITTED THAT THESE ARE NOT PENNY STOCKS BUT THE INITIAL PURCHASES OF SHARES OF M/S. UNNO INDUSTRIES LTD. WERE MADE BY THE ASSESSEE AGAINST THE CONSIDERATION OF RS. 1,000/- P ER SHARE. FURTHER THE SHARES WERE PURCHASED OF A COMPANY PRIOR TO THE MERGER WITH ANO THER COMPANY. THE SCHEME OF 18 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. MERGER WAS APPROVED BY THE HONBLE HIGH COURT AND T HEREAFTER THE ASSESSEE RECEIVED THE SHARES OF THE NEW ENTITY IN LIEU OF THE EARLIER SHARES. THESE FACTS ARE NOT IN DISPUTE AS THE MERGER SCHEME WAS DULY APPROVED BY THE HONB LE HIGH COURT AND, THEREFORE, THE SHARES ALLOTTED TO THE ASSESSEE POST MERGER WERE NO THING BUT ONLY IN LIEU OF THE EARLIER SHARES HELD BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED THE COMPLETE DETAIL OF CHAIN ALO NG WITH SUPPORTING DOCUMENTS WITH REGARD TO ACQUISITION OF SHARES TO SALES OF SHARES WHICH UNDOUBTEDLY PROVES THAT THE CAPITAL GAIN SO EARNED BY THE ASSESSEE WAS GENUINE. HOWEVER, THE AO DID NOT ACCEPT SUCH CAPITAL GAIN AS GENUINE, REAL AND TREATED THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. THE AO TREATED SUCH CAPITAL GAIN AS TAXAB LE INCOME OF THE ASSESSEE AND ADDED TO SUCH CAPITAL GAIN U/S 68 OF THE IT ACT, 19 61. THE AO MADE FURTHER ADDITION ON ACCOUNT OF ALLEGED COMMISSION PAID FOR ACQUIRING TH E BOGUS CAPITAL GAIN. IN AYS 2014- 15 AND 2015-16 THE AO MADE FURTHER PROTECTIVE ADDIT ION ON ACCOUNT OF ALLEGED UNACCOUNTED INCOME FROM ANTIQUE JEWELLERY BUSINESS WHICH WAS UTILIZED IN ACQUIRING THE ALLEGED BOGUS CAPITAL. 4.1. THE LD. A/R SUBMITTED THAT THE AO ISSUED SHOW CAUSE NOTICE TO ASSESSEE, CONTENTS OF WHICH WERE REPRODUCED BY AO IN ASSESSME NT ORDER. THE ASSESSEE FILED DETAILED REPLY OF THE SHOW CAUSE NOTICE OF THE AO, CONTENTS OF WHICH WAS REPRODUCED BY AO IN ASSESSMENT ORDER. WHILE COMPLETING THE ASSES SMENT AND MAKING THE IMPUGNED ADDITION UNDER SECTION 68 OF THE ACT, THE AO HAS RE LIED UPON SOME OF THE DOCUMENTS/ INFORMATION/ DETAILS/ THIRD PARTY INFORMATION/ STAT EMENTS RECORDED BY SOME OTHER 19 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AUTHORITIES IN SOME OTHER PROCEEDINGS BEHIND THE BA CK OF THE ASSESSEE. HOWEVER, THE SAID INFORMATION/ DOCUMENTS/ STATEMENTS RECORDED WE RE NOT CONFRONTED WITH THE ASSESSEE AND OPPORTUNITY OF CROSS EXAMINATION OF WI TNESSES WAS NOT GIVEN DESPITE OF REPEATED REQUEST OF THE ASSESSEE. THE AO CHOOSE TO PASS THE IMPUGNED ASSESSMENT ORDER IN UTTER DISREGARD TO JUDICIAL PRINCIPLES MOR E PARTICULARLY PRINCIPLES OF NATURAL JUSTICE AND EQUITY AND MADE HUGE ADDITION ON THE BA SIS OF PRESUMPTION, ASSUMPTION, SUSPICION, CONJECTURES AND SURMISES HAVING NO MATER IAL AGAINST THE ASSESSEE OR IRRELEVANT MATERIAL AND/OR THE MATERIAL/FINDING WHI CH DO NOT HAVE ANY BEARING IN THE CASE OF THE ASSESSEE. AS PER SETTLED PRINCIPLES OF LAW, IN VIEW OF VARIOUS PRONOUNCEMENTS BY THE HONBLE SUPREME COURT, HONBL E RAJASTHAN HIGH COURT, ITAT JAIPUR AND OTHER HIGH COURTS AND/OR ITATS IN THE CA SE OF COMPLETED ASSESSMENTS NO ADDITION CAN BE MADE DEHORS THE INCRIMINATING MATER IAL. THE INCOME TAX DEPARTMENT CARRIED OUT INTENSIVE SEARCH AND SEIZURE OPERATION OVER THE ASSESSEE AND DURING THE COURSE OF SEARCH NO MATERIAL FOUND FROM THE POSSESS ION OF THE ASSESSEE WHICH SHOWS THAT THE LONG TERM/SHORT TERM CAPITAL GAIN FROM SHA RES WAS NOT GENUINE. THE LD. A/R SUBMITTED THAT THE PROVISIONS OF SECTION 153A OF TH E ACT CANNOT BE APPLIED IN RESPECT OF ASSESSMENT YEAR IN RESPECT OF WHICH ASSESSMENT HAS ALREADY BEEN COMPLETED UNLESS SOME INCRIMINATING MATERIAL/ INFORMATION COMES IN T HE POSSESSION/ KNOWLEDGE OF THE ASSESSING OFFICER DURING THE COURSE OF SEARCH PROCE EDINGS. HE HAS RELIED UPON THE FOLLOWING DECISIONS :- 20 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PCIT VS. KURELE PAPER MILLS PVT. LTD. 380 ITR 571 (DELHI) PCIT VS. MEETA GUTGUTIA 395 ITR 526 (DELHI) PCIT VS. RAM NARAIN JINDAL ORDER DATED 21 ST NOVEMBER, 2017 (DELHI HIGH COURT) THE REVENUE FILED SLP BEFORE THE HONBLE SUPREME CO URT IN THE ABOVE THREE CASES AGAINST THE ORDERS OF THE HONBLE HIGH COURT, WHICH HAVE BEEN DISMISSED VIDE SLP NO. 21186/2015 DATED 07.12.2015, SLP NO. 1812/2018 DATE D 02.07.2018 AND SLP NO. 23833/2018 DATED 03.08.2018 RESPECTIVELY. HE HAS AL SO RELIED UPON THE FOLLOWING JUDGMENTS :- JAI STEEL (INDIA) VS. ACIT, 259 CTR (RAJ.) 281 KOTA DALL MILL VS. DCIT IN ITA NOS. 997 TO 1002, 1119/JP/2018 DATED 31.12 .2018 (JPR TRIB.) AS REGARDS THE STATEMENT RECORDED UNDER SECTION 132 (4) OF THE IT ACT, THE LD. A/R HAS SUBMITTED THAT DURING THE COURSE OF SEARCH THE ASSE SSEE IN HIS STATEMENT ADMITTED THE UNDISCLOSED INCOME ON ACCOUNT OF LONG TERM/SHORT TE RM CAPITAL GAINS FROM SALES OF SHARES OF M/S. UNNO INDUSTRIES LTD. AND M/S. SULABH ENGINEERING & SERVICES LTD. HOWEVER, DURING THIS YEAR THE ASSESSEE HAS NOT TRAN SACTED IN THESE SCRIPTS. FURTHER, THE ADMISSION WAS DUE TO FEAR, DURESS, MENTAL TENSION A ND UNDER MISCONCEPTION, AND ON MISREPRESENTATION OF FACTS BY THE SEARCH PARTY. TH E LD. A/R HAS POINTED OUT DURING THE 21 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. COURSE OF HEARING THAT SEARCH AND SEIZURE ACTION CA RRIED ON 31 ST OCTOBER, 2012 IN CASE OF THE ASSESSEE GROUP THE DEPARTMENT SEALED THE ENT IRE BUILDING OF THE ASSESSEE, NAMELY, MOTISONS TOWER SITUEATED AT SB-110, LAL KOT HI, JAIPUR BY ISSUING A PROHABITORY ORDER (PO) UNDER SECTION 132(3) OF THE I.T. ACT WHI CH RESULTED LOCKDOWN OF TERMINAL OF MOTISONS SHARES BROKERS (P) LTD. AND MOTISONS COMMO DITIES PVT. LTD. DUE TO THE SHUT DOWN OF THE TERMINAL THE STOCK EXCHANGE TOOK LEGAL ACTION AGAINST THE ASSESSEE AND CONSEQUENTLY THE ASSESSEE SUFFERED HEAVY FINANCIAL LOSSES AS WELL AS DAMAGE TO THE IMAGE OF THE ASSESSEE AMONGST THE CLIENTS AND MARKE T IN GENERAL. THE DEPARTMENT AGAIN DURING THE CURRENT SEARCH AND SEIZURE ACTION THREATENED TO SEAL THE ENTIRE BUSINESS PREMISES AS WELL AS FACTORY PREMISES OF TH E ASSESSEE AS IT WAS KEPT UNDER SEAL DURING THE LAST SEARCH AND SEIZURE ACTION. EVEN THE TERMINAL WAS KEPT UNDER LOCKDOWN FROM MORNING UPTO 1.30 P.M. AND THE ASSESSEE GROUP WAS UNDER TREMENDOUS FEAR AS WELL AS PRESSURE DUE TO THE BAD EXPERIENCE OF LAST SEARCH AND SEIZURE ACTION AS WELL AS THE BUSINESS PREMISES KEPT UNDER P.O. AND SEAL WHIC H WAS VACATED/LIFTED ONLY AFTER SURRENDER OF MORE THAN RS. 20,00,000/-. TO AVOID T HE REPETITION OF THE PAST BAD EXPERIENCE, THE ASSESSEE MADE THE SURRENDER OF THE INCOME AGAINST GENUINE TRANSACTIONS OF PURCHASES AND SALES AND LONG TERM C APITAL GAINS. THE BUSINESS PREMISES OF THE ASSESSEE GROUP WAS REMAINED SEALED FOR 3 (THREE) DAYS FROM 03.11.2012 TO 05.11.2012 DURING THE LAST SEARCH AND SEIZURE ACTION DURING WHICH THE ASSESSEE SUFFERED HUGE FINANCIAL LOSS AS WELL AS DA MAGES TO THE IMAGE AND GOODWILL OF THE BUSINESS OF THE ASSESSEE. THUS THE LD. A/R HAS SUBMITTED THAT DURING THE SEARCH AND SEIZURE ACTION CARRIED ON 22 ND JULY, 2015 THE DEPARTMENT KEPT ON THREATENING OF 22 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PUTTING THE ENTIRE BUILDING UNDER PO ORDER, AND SEA LED EVEN THE FACTORY PREMISES OF THE ASSESSEE GROUP LOCATED AT SITAPURA INDUSTRIAL AREA UNDER PO ORDER WHICH WAS VACATED ONLY ON 30 TH JULY, 2015 AT 4.30 P.M. AFTER GETTING THE DESIRED STATEMENT BY THE SEARCH PARTY. THE DEPARTMENT EVEN INITIATED THE PROSECUTIO N BY ISSUING SHOW CAUSE NOTICE UNDER SECTION 279(1) AND ONLY WHEN THE ASSESSEE HAS EXPLAINED THE FACTS AND CIRCUMSTANCES BY FILING A DETAILED REPLY TO THE SHO W CAUSE NOTICE ON 04.01.2016 THE PROPOSED PROSECUTION WAS DROPPED BY THE PR. DIT. T HE ASSESSEE HAS EXPLAINED THE CIRCUMSTANCES UNDER WHICH THE SURRENDER WAS OBTAINE D BY THE SEARCH PARTY AND CONFESSION OF THE ASSESSEE WAS RECORDED. THUS THE L D. A/R HAS PLEADED THAT THE SURRENDER WAS NOT VOLUNTARY. FROM THE PERUSAL OF THE STATEMENT, IT IS EVIDENT THAT THERE IS NO REFERENCE OF ANY DOCUMENT/EVIDENCE IN S UCH STATEMENT TO PROVE THAT THE ASSESSEE GROUP WAS ACTUALLY HAVING SUCH ADMITTED AL LEGED UNDISCLOSED INCOME. THE SURRENDER WAS NOT ACTUAL AND VOLUNTARY SURRENDER. F URTHER EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO THE AO COULD NOT POINT OUT ANY DOCUMENTS/MATERIAL FOUND AS A RESULT OF SEARCH/SURVEY WHICH SHOWS THAT THE A SSESSEE ACTUALLY EARNED THIS MUCH OF INCOME. THE SEARCH PARTY AFTER RECORDING THE STATE MENT OF ASSESSEE DID NOT PROVIDE COPIES OF STATEMENTS TO THE ASSESSEE GROUP. THE ASS ESSEE GROUP WAS UNDER BONA-FIDE BELIEF THAT SINCE THE SEARCH PARTY HAS NOT GIVEN TH E COPIES OF THE STATEMENTS, THEREFORE, THE SAME WOULD NOT BE USED AGAINST THEM. AFTER THE SEARCH, REQUEST WAS MADE TO INVESTIGATION WING AS WELL AS AO TO PROVIDE THE COP IES OF STATEMENTS RECORDED BY THE SEARCH PARTY. AFTER THE CONTINUOUS EFFORTS OF THE ASSESSEE GROUP, THE COPIES OF THE STATEMENTS WERE PROVIDED ON 08.12.2015 AND THEREAFT ER ON 16.12.2015 SHRI SANJAY 23 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. CHHABRA FILED THE AFFIDAVIT BEFORE THE AO TO RETRAC T THE STATEMENTS. THE ASSESSEE CLEARLY STATED ON OATH THAT THE SURRENDER WAS NOT VOLUNTARI LY BUT DUE TO FEAR AND MISREPRESENTATION OF FACTS BY THE SEARCH PARTY. THE LD. A/R FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO VERI FY THE VERACITY OF THE AFFIDAVIT FILED BY SHRI SANJAY CHHABRA WHEREBY HE RETRACTED THE SEA RCH STATEMENT, THE AO RECORDED THE STATEMENT ON 04.12.2017 U/S 131 OF THE IT ACT W HEREIN HE DENIED TO HAVE EARNED ANY UNDISCLOSED INCOME AND SAID THAT WHATEVER CAPIT AL GAIN EARNED BY HIM AND HIS FAMILY MEMBERS IS GENUINE. HOWEVER, NO HEED WAS GIV EN BY AO TO THE STATEMENT UNDER SECTION 131 OF THE IT ACT AND SWORN IN AFFIDAVIT. THUS WHATEVER SURRENDER MADE BY SHRI SANJAY CHHABRA DURING THE COURSE OF SEARCH WAS NOT VOLUNTARILY BUT THE SAME WAS BECAUSE OF MENTAL TENSION, FEAR AND DUE TO MISCONCE PTION AND MISREPRESENTATION OF FACTS BY THE SEARCH PARTY. THUS THE SURRENDER WAS N OT CORRECT AND REAL AND THE SAME IS NOT BACKED BY THE DOCUMENTS/EVIDENCE. FROM THE READ ING OF STATEMENT IT IS EVIDENT THAT THE SEARCH PARTY HAS NOT BROUGHT ANY POSITIVE MATER IAL OR INCRIMINATING DOCUMENTS BEFORE THE ASSESSEE GROUP WHICH MADE THE ASSESSEE T O SURRENDER THE UNDISCLOSED INCOME. THE SAME FACT PROVES FROM THE ASSESSMENT OR DER ALSO WHEREIN THE AO COULD NOT REFER ANY SEIZED DOCUMENT IN SUPPORT OF ADDITIO N MADE ON THE BASIS OF STATEMENT OF THE ASSESSEE. EXCEPT SEARCH STATEMENT WHICH WAS LA TER ON RETRACTED BY SHRI SANJAY CHHABRA BY FILING AFFIDAVIT THERE IS NOTHING WITH T HE DEPARTMENT TO VISUALIZE THAT THE ASSESSEE GROUP EARNED THIS MUCH UNDISCLOSED INCOME. IT IS WELL SETTLED PRINCIPLE OF LAW THAT NO ADDITION CAN BE MADE ONLY ON THE BASIS OF S EARCH STATEMENT MORE SO WHEN THERE IS NO SUPPORTING EVIDENCE WITH DEPARTMENT TO PROVE THAT THE SURRENDER MADE IN 24 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE STATEMENT WAS CORRECT. THE DEPARTMENT HAS NO EV IDENCE/DOCUMENTS WHICH PROVE THAT SURRENDER IN STATEMENT BY SHRI SANJAY CHHABRA IS CORRECT, THEREFORE THE SAME CANNOT BE RELIED UPON. THE LD. A/R HAS RELIED UPON CBDT INSTRUCTION NO. 286/2/2003- IT(INV) DATED 10.03.2003 AND 18.12.2014. THUS THE LD. A/R HAS SUBMITTED THAT THE STATEMENT CANNOT BE TAKEN AS INCRIMINATING MATERIAL . IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. HARJEEV AGGARWAL, 290 CTR 263 (DEL.). HE HAS FURTHER RELIED UPON THE FOLLOWING DECISIONS :- PCIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. 397 ITR 82 (DELHI) PULLANGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KERALA & ANOTHER 91 ITR 18 (SC) CIT VS. ASHOK KUMAR SONI 291 ITR 172 (RAJ.) MANTRI SHARE BROKERS PL 96 TAXMANN.COM 279 (RAJ.) SMT. S. JAYA LAKSHMI AMMAL 74 TAXMANN.COM 35 (MADRAS) CHETNABEN J. SHAH (LEGAL HEIR OF JAGDISHCHANDRA K. SHAH) IN TAX APPEAL NO. 1437 OF 2007 (GUJARAT) THE LD. A/R HAS POINTED OUT THAT THE ASSESSEE IS RE GULARLY DOING TRANSACTIONS IN SHARES SINCE LONG TIME. IN THE EARLIER YEARS SINCE ASSESS MENT YEAR 2007-08 ONWARDS THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN/LOSS A S WELL AS SHORT TERM CAPITAL GAIN/LOSS WHICH WERE NEVER DISPUTED BY THE AO. THE REFORE, THIS IS NOT THE ISOLATED 25 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TRANSACTION BUT THE ASSESSEE IS REGULARLY DOING THE SHARE TRANSACTIONS. FURTHER THE ASSESSEES FAMILY CONCERN M/S. MOTISONS SHARES PVT. LTD. IS ALSO DOING SHARE BUSINESS. THE ASSESSEE IS PROMOTER/DIRECTOR OF THIS COMPANY R EGISTERED WITH SEBI AND MEMBER OF NATIONAL STOCK EXCHANGE AND BOMBAY STOCK EXCHANGE. THIS COMPANY IS DEALING IN SHARES ON BROKERAGE BASIS. THUS DUE TO THE DEALING IN SHARES ON BROKERAGE BASIS THE ASSESSEE IS HAVING VAST EXPERIENCE IN SHARE BUSINES S AND THEREFORE, THE INVESTMENT IN THE SHARES IN QUESTION WERE MADE BY THE ASSESSEE DU E TO HIS KNOWLEDGE AND INFORMATION ABOUT THE MARKET. THE AO HAS PASSED T HE ASSESSMENT ORDER BASED ON THE STATEMENTS OF THIRD PARTY RECORDED BY THE INVESTIGA TION WING CALCUTTA, THEREFORE, THOSE STATEMENTS RECORDED AT THE BACK OF THE ASSESSEE CAN NOT BE USED AGAINST THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION. THE LD. A/R HAS CONTENDED THAT THE ASSESSEE HAS DEMANDED AN OPPORTUNITY OF CROSS EXAMI NATION BUT THE SAME WAS NOT GIVEN. IT IS A GROSS VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN CASE OF UNION OF INDIA VS. TULSI RAM PATEL AIR 1985 SC 1416 AT 14 60. HE HAS RELIED UPON THE FOLLOWING DECISIONS :- ANDAMAN TIMBER INDUSTRIES VS. COMMISSIONER OF CE NTRAL EXCISE (15) SCC 785 (SC) SMT. SUNITA DHADDA VS. DCIT 33 TAXMANN.COM 639 (JAIPUR TRIBUNAL) CIT VS. ASHWANI GUPTA 322 ITR 396 (DEL.) 26 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. H.R. MEHTA VS. ACIT 387 ITR 561 (BOMBAY) HE HAS SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT (A). HE HAS DISTINGUISHED THE DECISIONS RELIED UPON BY THE LD. CIT D/R AND SUBMIT TED THAT IN ALL THOSE DECISIONS INCLUDING IN THE CASE OF SUMAN PODDAR (SUPRA) IT WA S NOTED THAT THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE TRANSACTION OF PURCHASE AND SALE OF SHARES. THEREFORE, ON THE SPECIFIC FACTS OF THE CASE IT WAS HELD THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY DOCUMENT/CONTRACT NOTE. THER EFORE, THOSE DECISIONS CANNOT BE APPLIED IN THE FACTS OF THE PRESENT CASE WHERE THE ASSESSEE HAS PRODUCED ALL THE SUPPORTING DOCUMENTARY EVIDENCES WHICH CAN BE INDEP ENDENTLY VERIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. AFTER THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE IT ACT CARRIED OUT ON 22 ND JULY, 2015 IN CASE OF MEMBERS OF M/S. MOTISONS GRO UP, THE AO ISSUED NOTICE UNDER SECTION 153A ON 30 TH SEPTEMBER, 2015 REQUIRING THE ASSESSEE TO FILE RET URN OF INCOME WITHIN 30 DAYS OF SERVICE OF SAID NOTICE. I N RESPONSE THE ASSESSEE FILED THE RETURN OF INCOME ON 25 TH NOVEMBER, 2015 DECLARING TOTAL INCOME OF RS. 1,47, 33,910/-. IN THE ASSESSMENT PROCEEDINGS, THE MAIN ISSUE CONSI DERED BY THE AO IS ONLY REGARDING THE LONG TERM CAPITAL GAIN DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE IT ACT ON 28.11.2 014 AS WELL AS THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A AND CLAIMED THE SAME AS EXEMPT UNDER SECTION 10(38) OF THE IT ACT WHICH WAS QUESTIONED B Y THE AO ON ITS GENUINENESS AND 27 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PROPOSED TO TREAT THE SAME AS BOGUS ACCOMMODATION E NTRIES AVAILED BY THE ASSESSEE. THE BASIS OF QUESTIONING THE GENUINENESS AND TREATM ENT OF THE SAID AMOUNT AS ACCOMMODATION ENTRIES ARE THE STATEMENTS OF THE ASS ESSEE RECORDED UNDER SECTION 132(4) AS WELL AS UNDER SECTION 131 OF THE IT ACT B Y THE INVESTIGATION WING JAIPUR DURING THE SEARCH AND SEIZURE ACTION AND POST SEARC H ENQUIRY AND FURTHER THE INFORMATION RECEIVED BY THE AO FROM THE INVESTIGATI ON WING KOLKATA ALONG WITH CERTAIN STATEMENTS RECORDED BY THE DDIT INVESTIGATION KOLKA TA. IT IS PERTINENT TO NOTE THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION EXCE PT THE STATEMENTS OF THE ASSESSEE RECORDED UNDER SECTION 132(4), NO OTHER MATERIAL MU CH LESS THE INCRIMINATING MATERIAL WAS EITHER FOUND BY THE DEPARTMENT OR REVEALED BY T HE ASSESSEE. THE TRANSACTIONS OF PURCHASE OF SHARES ARE DULY RECORDED IN THE BOOKS O F ACCOUNT AND ALSO DISCLOSED IN THE RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE IT ACT PRIOR TO THE SEARCH AND SEIZURE ACTION. FURTHER THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 WERE NOT PENDING AS ON THE DATE OF SEARCH. HENCE THE ASS ESSMENTS FOR THESE TWO ASSESSMENT YEARS WERE NOT ABAITED BY VIRTUE OF SEARCH. WE FUR THER NOTE THAT EVEN THE STATEMENTS REFERRED BY THE AO AND FORMED THE BASIS OF ASSESSME NT ORDER WERE RECORDED BY THE INVESTIGATION WING KOLKATA ON 16.01.2016 WHICH SHOW S THAT THOSE STATEMENTS WERE NOT IN EXISTENCE OR AVAILABLE AT THE TIME OF SEARCH CAR RIED OUT IN THE CASE OF ASSESSEE ON 22 ND JULY, 2015. THEREFORE, THE QUESTION OF SUCH MATERI AL AVAILABLE WITH THE DEPARTMENT AT THE TIME OF SEARCH AND SEIZURE ACTION AND CONFRO NTED TO THE ASSESSEE DOES NOT ARISE. WE FURTHER NOTE THAT NEITHER IN THE POST SEARCH ENQ UIRY NOR IN THE ASSESSMENT PROCEEDINGS THE AO HAS CONFRONTED THOSE STATEMENTS RECORDED BY THE INVESTIGATION 28 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WING KOLKATA TO THE ASSESSEE THOUGH THE STATEMENTS OF THE ASSESSEE WAS RECORDED BY THE AO UNDER SECTION 131 OF THE IT ACT DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS ON 04.12.2017. IT IS CLEAR AND MANIFEST FROM THE ASSESSMENT RECORD THAT THE STATEMENTS RELIED UPON BY THE AO TO SUPPORT HIS FINDING WERE RECORDED AT THE BACK OF THE ASSESSEE AND THE SAME WERE NOT CONFRONTED TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS EVEN AT THE TIME OF RECORDIN G THE STATEMENT OF THE ASSESSEE UNDER SECTION 131 OF THE IT ACT. THUS WE FIND THAT THE ASSESSMENTS FRAMED BY THE AO FOR THESE ASSESSMENT YEARS ARE SOLELY BASED ON THE STATEMENTS OF THE ASSESSEE RECORDED UNDER SECTION 132(4), UNDER SECTION 131 OF THE IT ACT AND THE STATEMENTS RECORDED BY THE INVESTIGATION WING KOLKATA OF THIRD PARTY THAT TOO MUCH AFTER THE SEARCH AND SEIZURE ACTION IN CASE OF THE ASSESSEE. THOUGH THE AO HAS MADE REFERENCE TO THE FINANCIAL STATUS OF THESE COMPANIES AS WELL AS SHARE PRICE MOVEMENT OVER THE PERIOD, HOWEVER, THESE SHARES WERE DULY LISTED IN T HE STOCK EXCHANGE AND THE SHARE PRICE OF THESE SHARES ARE AVAILABLE IN THE PUBLIC D OMAIN AND PARTICULARLY AT THE RECORD OF THE STOCK EXCHANGE. THUS NOTHING HAS BEEN DETECTED OR FOUND BY THE AO BY CONDUCTING ANY ENQUIRY BUT THESE FACTS ARE MATTER O F RECORD AVAILABLE IN THE PUBLIC DOMAIN. THEREFORE, EXCEPT THE STATEMENTS AS REFERR ED BY THE AO, THERE IS NO OTHER MATERIAL OR INCRIMINATING MATERIAL EITHER FOUND DUR ING THE SEARCH OR RECEIVED BY THE AO EVEN AT THE TIME OF ASSESSMENT PROCEEDINGS. HENCE THE ASSESSMENTS FRAMED FOR THE ASSESSMENT YEARS 2012-13 AND 2013-14 WHICH WERE NOT PENDING AT THE TIME OF SEARCH ARE FALLING IN THE CATEGORY OF REASSESSMENT. THERE FORE, THE AO CANNOT MAKE ANY ADDITION IN THE ABSENCE OF ANY INCRIMINATING MATERI AL FOUND DURING THE COURSE OF SEARCH 29 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A OF THE IT ACT EXCEPT TO REITERATE OR RE-ASSERT THE ASSESSMENT ALREADY COMPLETED UNDER SE CTION 143(3) AND IN THE ASSESSEES CASE ONE YEAR WAS ALREADY COMPLETED UNDER SECTION 1 53A OF THE ACT IN PURSUANT TO THE EARLIER SEARCH AND SEIZURE ACTION DATED 31 ST OCTOBER, 2012. THE HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF JAI STEEL (INDIA) VS. ACIT (S UPRA) WHILE CONSIDERING AN IDENTICAL ISSUE HAS HELD IN PARA 15 TO 20 AS UNDER :- 15. A PLAIN READING OF THE ABOVE PROVISION WOULD REVEA L THAT IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.05.2003, THE AO I S UNDER AN OBLIGATION TO ISSUE NOTICE TO SUCH PERSON, WHO HAS BEEN SUBJECTED TO SE ARCH/REQUISITION TO FURNISH THE RETURN OF INCOME OF SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE AO IS THEN REQUIRED TO ASSESS OR REASSESS TOTAL INCOME OF THE SAID SIX YEARS AND, OUT OF THE SIX YEARS, IF ANY ASSESSMENT OR REASSESSMENT IS PENDING ON THE DATE OF INITIATION OF THE SEARCH, THE SAME WOULD ABATE I.E. PENDING PROCEEDINGS QUA THE SAID ASSESSMENT YEAR SHALL NOT PROCEED THEREAFTER A ND THE ASSESSMENT HAS TO BE MADE UNDER SECTION 153A(1)(B) OF THE ACT READ WITH THE FIRST PROVISO THEREUNDER. 16. FURTHER PROVISIONS HAVE BEEN MADE CONTEMPLATING A SITUATION WHERE AN ASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED I N APPEAL OR OTHER LEGAL PROCEEDINGS. THE SECTION STARTS WITH A NON OBSTANTE CLAUSE, WHICH REMOVES THE RESTRICTIONS UPON THE AO FROM ASSUMING JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147, 148 AND 151 ETC. 17. PRIOR TO INTRODUCTION OF SECTIONS 153A TO 153C, CH APTER XIVB OF THE ACT TOOK CARE OF THE ASSESSMENTS TO BE MADE IN CASES OF SEAR CH AND SEIZURE, WHICH WERE CALLED 'BLOCK ASSESSMENT', WHEREBY, A SINGLE ASSESS MENT WAS REQUIRED TO BE IN RESPECT OF A PERIOD OF BLOCK OF TEN YEARS PRIOR TO THE ASSESSMENT YEAR, IN WHICH, THE SEARCH WAS MADE. AFTER THE INTRODUCTION OF SECTIONS 153A TO 153C, A SINGLE BLOCK ASSESSMENT CONCEPT HAS BEEN GIVEN A GO BYE AND NOW THE AO HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF T HE SIX YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. 18. TO CONSIDER THE RIVAL SUBMISSIONS MADE AT THE BAR IN THE CONTEXT OF THE PRESENT CASE AND THE SUBSTANTIAL QUESTION OF LAW FRAMED, TH E SCOPE OF 'ASSESSMENT AND REASSESSMENT OF TOTAL INCOME' UNDER SECTION 153A(1) (B) AND THE FIRST AND SECOND PROVISO HAVE TO BE CONSIDERED. FURTHER, FOR ANSWERI NG THE ABOVE ISSUES, GUIDANCE WILL HAVE TO BE SOUGHT FROM SECTION 132(1) OF THE A CT, AS SECTION 153A OF THE ACT CANNOT BE READ IN ISOLATION, INASMUCH AS, THE SAME IS TRIGGERED ONLY ON ACCOUNT OF ANY SEARCH/REQUISITION UNDER SECTIONS 132 OR 132A O F THE ACT. IF ANY BOOKS OF 30 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACCOUNT OR OTHER DOCUMENTS RELEVANT TO THE ASSESSME NT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND, FOUND IN THE COURSE OF SEARCH, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO CONSIDERATION WHILE ASSESSING OR REASSESSING THE TOTAL INCOME UNDER THE PROVISION S OF SECTION 153A OF THE ACT. EVEN IN A CASE WHERE UNDISCLOSED INCOME OR UNDISCLO SED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CONSIDERATION. THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH S EARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMEN TS DOES NOT ARISE, WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN TH E CONTEXT OF THE ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED T O BE ASSESSED. 19. THE UNDERLINE PURPOSE OF MAKING ASSESSMENT OF TOTA L INCOME UNDER SECTION 153A OF THE ACT IS, THEREFORE, TO ASSESS INCOME WHI CH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED. THE PURPOSE OF SECOND PROV ISO IS ALSO VERY CLEAR, INASMUCH AS, ONCE A ASSESSMENT OR REASSESSMENT IS ' PENDING' ON THE DATE OF INITIATION OF SEARCH OR REQUISITION AND IN TERMS OF SECTION 153A A RETURN IS FILED AND THE AO IS REQUIRED TO ASSESS THE SAME, THERE CA NNOT BE TWO ASSESSMENT ORDERS DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR TH E SAID ASSESSMENT YEAR AND, THEREFORE, THE PROVISO PROVIDES FOR ABATEMENT OF SU CH PENDING ASSESSMENT AND REASSESSMENT PROCEEDINGS AND IT IS ONLY THE ASSESSM ENT MADE UNDER SECTION 153A OF THE ACT WOULD BE THE ASSESSMENT FOR THE SAID YEA R. 20. THE NECESSARY COROLLARY OF THE ABOVE SECOND PROVIS O IS THAT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS, WHICH HAVE ALREADY BEEN ' COMPLETED' AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND, SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE R EQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN SUCH CASES, WHERE THE ASSESSMENTS ALREADY STANDS COMPLETED, THE AO CA N REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE WITHOUT FOLLOWING THE PR OVISIONS OF SECTIONS 147, 148 AND 151 OF THE ACT AND DETERMINE THE TOTAL INCO ME OF THE ASSESSEE. THUS THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE REASSESSMENT OF TOTAL INCOME OF THE COMPLETED ASSESSMENT HAVE TO BE MADE TAKING NOTE OF UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH AND INC OME THAT ESCAPED ASSESSMENT ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCO ME DETERMINED IN THE ORIGINAL ASSESSMENT AND ASSESSED AS TOTAL INCOME. THE DETER MINATION OF UNDISCLOSED INCOME 31 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. UNDER CHAPTER XIVB HAS TO BE READ IN THE CONTEXT OF SECOND PROVISO ONLY WHICH DEALS WITH PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE NECESSARY COROLLARY OF SECOND PROVISO IS THAT THE ASSESSMENT OR REASSESSMENT PROC EEDINGS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEES TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME W HEN SEARCH OR REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROC EEDINGS ARE PENDING. IN SUCH CASES WHERE THE ASSESSMENT ALREADY STANDS COMPLETED, THE AO CANNOT REOPEN THE ASSESSMENT OR REASSESSMENT ALREADY MADE WITHOUT FOLLOWING THE PROVISIONS OF SECTION 147, 148 AND 151 OF THE IT ACT DETERMINING THE TOTAL INCOME OF T HE ASSESSEE. HENCE IT IS HELD THAT IN THE PROCEEDINGS UNDER SECTION 153A IN AS MUCH AS IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF CONCLUDED ASSESSMENT DOES NOT ARISE WHICH REQUIRE M ORE REITERATION AND IT IS ONLY IN THE CONTEXT OF ABATED ASSESSMENT UNDER SECOND PROVISO W HICH IS REQUIRED TO BE ASSESSED. FOLLOWING THIS JUDGMENT OF THE HON'BLE JURISDICTION AL HIGH COURT, THE HON'BLE DELHI HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA, 380 ITR 573 (DEL.) HAS HELD THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSM ENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE RE ARE SERIES OF DECISIONS ON THIS POINT WHEREIN THIS VIEW AS TAKEN BY THE HON'BLE JUR ISDICTIONAL HIGH COURT IN CASE OF M/S. JAI STEEL (INDIA) VS. ACIT (SUPRA) IS REITERATED AN D REAFFIRMED. WITHOUT MULTIPLYING THE PRECEDENTS TO AVOID THE OVER-BURDENING OF THIS ORDE R, WE MAY REFER THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF KOTA D ALL MILLS VS. DCIT (SUPRA) WHEREIN THIS TRIBUNAL HAS DEALT WITH THIS ISSUE EXHAUSTIVEL Y IN PARA 6 AS UNDER :- 32 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT PENDING ON THE DATE OF SEARCH ON 2 ND JULY, 2015. EVEN IN SOME OF THE ASSESSMENT YEARS O RDERS UNDER SECTION 143(3) WERE PASSED AND IN OTHER CASES THE ASSESSMEN T WAS COMPLETED UNDER SECTION 143(1) OF THE ACT. THUS THE ASSESSME NTS FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT GOT ABAT ED BY VIRTUE OF SEARCH UNDER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS I.E. 2010-11 TO 13-14. THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN T HE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASS ESSMENT YEARS I.E. 2014-15 AND 15-16 THOSE WERE GOT ABATED BY VIRTUE O F SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW THAT THE ASSESSMENT OR REASSESSM ENT UNDER SECTION 153A IN RESPECT OF THE ASSESSMENT YEARS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEES TOTAL INCOME, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED CAN BE MADE ONLY ON THE BASIS OF INCRIMINA TING MATERIAL. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE T HE ASSESSMENT OF ANY ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR M AKING OF REQUISITION UNDER SECTION 132A OF THE ACT. THEREFORE, THE ASSE SSMENT UNDER SECTION 153A IN RESPECT OF THOSE ASSESSMENT YEARS WHICH STA ND ABATED DUE TO THE REASON OF PENDING ON THE DATE OF INITIATION OF SEAR CH OR REQUISITION SHALL BE 33 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE ORIGINAL/FIRST ASSESSMENT. IN THE SECOND CATEG ORY WHERE THE ASSESSMENT OR REASSESSMENT HAS ALREADY BEEN COMPLET ED ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITION AS TH E CASE MAY BE, THE ASSESSMENT UNDER SECTION 153A WOULD BE IN THE NATUR E OF REASSESSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA WHILE ANALYZING THE PROVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED IN PARA 37 AND 38 AS UNDER :- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE 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 BE MANDATORILY ISSUED TO THE PERSON SE ARCHED 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 O F THE SEARCH SHALL ABATE. 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 RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. TH E AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WIL L BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV . ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MA DE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR O THER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSE SSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVA NCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT H AS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSM ENT 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 PEND ING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE 34 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N 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 INCRI MINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED I NCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED . SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAV E BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS THE HONBLE HIGH COURT HAS HELD THAT IN THE AB SENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE HONBLE HIGH COURT HAS ALSO REFERRED THE TERM USED IN SECTION 15 3A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS AND THE WORD REASS ESS RELATED TO COMPLETED ASSESSMENT PROCEEDINGS. THEREFORE, THE C OMPLETED 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 DOCUMENT 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. THE HONBLE DELHI H IGH COURT HAS REITERATED ITS VIEW IN CASE OF PRINCIPAL CIT VS. KU RELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UNDER :- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER D ATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUES TION WAS WHETHER THE 35 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE F ACTS IN DELETING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING OFFIC ER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAP ITAL. BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WH ATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDI NGS UNDER SECTION 153A OF THE ACT. 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENCE REL ATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT THE AO W AS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS N OTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL D ETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE F ACTS AND CIRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SU BSTANTIAL QUESTION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQU IRES EXAMINATION. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COU RT VIDE ORDER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HON BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUT IA HAS AGAIN ANALYZED THIS ISSUE IN PARA 55 TO 71 AS UNDER :- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLANK OF THE REVENU E'S SUBMISSION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA ( SUPRA ). BEFORE BEGINNING TO EXAMINE THE SAID DECISION, IT IS NECESSARY TO RE VISIT THE LEGAL LANDSCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SEARCH AND SEIZURE'. BOTH THESE PROVISIONS, THEREFORE, HAVE TO BE READ TOGETHER. SECTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENAB LES THE REVENUE TO RE-OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER T O THE YEAR OF SEARCH. IT IS NOT TO BE EXERCISED LIGHTLY. IT IS ONLY IF DURING T HE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE R E-OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS IS FOUND THAT TH E INVOCATION OF SECTION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 36 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA ( SUPRA ) AND CHETAN DAS LACHMAN DAS ( SUPRA ). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSED THREADBARE IN THE DECISION OF THIS C OURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS ANIL KUMAR BHATIA ( SUPRA ) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED THAT ' WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOU ND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFOR E EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDE R SUCH SITUATION'. THAT QUESTION WAS, THEREFORE, LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS ( SUPRA ) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS O BSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THIS SEC TION 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 AVAILA BLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA ( SUPRA ), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. ( SUPRA ) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED A S UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS ( SUPRA ), AND FILATEX INDIA LTD. V. CIT-IV ( SUPRA ) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THERE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FROM A CAREFUL READ ING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSE SSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 ( PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. ), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE , IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION O F PROCEEDINGS UNDER 37 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT ( A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WIT H.' 59. IN KABUL CHAWLA ( SUPRA ), THE COURT REFERRED TO THE DECISION OF THE RAJAST HAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA ( SUPRA ) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT ( SUPRA ) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE T AKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDE R SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROV ISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDE R SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN T ERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING M ATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLE TED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED B Y THE COURT ON THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHEME O F THE SAID PROVISION' WHICH WAS IN THE CONTEXT OF SEARCH AND/OR REQUISITI ON. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'RE ASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A O F THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF 38 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSES S HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETA TION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA ( SUPRA ), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF TH E ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA ( SUPRA ) AS UNDER: '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 T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UND ER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRI NG 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 SE ARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A F RESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPEC T OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN S EPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY O NE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS ' IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME W OULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOU LD 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 WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEV ANCE OR NEXUS WITH THE SEIZED MATERIAL. 39 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTIO N ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLE TED 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 SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JUR ISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES 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 ASSE SSMENTS 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 INCOM E OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSE D OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) BEGINNING WITH THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSM ENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETE RMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED IN COME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WA S NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT H IGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA ( SUPRA ), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) ( SUPRA ) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COUR T ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A SEARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASS ESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASS ESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ASSESS OR REASSESS THE SAME . SINCE THE ASSESSMENT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER 40 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THA T THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME W HICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTI ON 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPEC T OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECON D PROVISO MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROV IDES THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESSMEN T YEARS REFERRED TO IN THE SUB-SECTION PENDING ON THE DATE OF INITIATION OF SE ARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB- SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THA T IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, TH EN THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOULD STAND REVIVED. THE PROVISO THE RETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AND THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETE RMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUB-SECTION (2) PROVIDE S FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF A NY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SECT ION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SU PREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE RE GARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLE AR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE H EADING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PROVIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPO SE OF THE PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION , IT GOES WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEA RCH OR REQUISITION, IN OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH S OMETHING ROUND DURING THE SEARCH OR REQUISITION VIZ., INCRIMINATIN G MATERIAL WHICH REVEALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MAND ATE OF SUB-SECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THE RE IS A SEARCH OR REQUISITION, THE ASSESSING OFFICER IS OBLIGED TO IS SUE NOTICE TO SUCH PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PREC EDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR RE QUISITION, IN CASE NO 41 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. INCRIMINATING MATERIAL IS FOUND, AS HELD BY THE RAJ ASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESS MENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EA CH OF THE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE A SSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT UNDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153 A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN TH E SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF T HE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 1 53A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISITION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS F OUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESS MENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIE R ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CAS E OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVE D IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN T HE CASE OF CIT V. JAYABEN RATILAL SORATHIA ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN TH E PARTICULAR ASSESSMENT YEAR.' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA ( SUPRA ), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLL OWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ) AND OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. ( SUPRA ) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) AND HELD THAT THERE HAD TO BE INCRIMINATING MATER IAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE P URSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. ( SUPRA ), TOO, 42 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). IN GURINDER SINGH BAWA ( SUPRA ), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO T AX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT A PPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR D URING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/O R NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA ( SUPRA ) AND RAM AVTAR VERMA ( SUPRA ) FOLLOWED THE DECISION IN KABUL CHAWLA ( SUPRA ). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. ( SUPRA ) WHICH WAS REFERRED TO IN KABUL CHAWLA ( SUPRA ) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DIS MISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARI NG FOR THE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT C ASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN T HE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTK HA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SE ARCH AND SURVEY PROCEEDINGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN T HE FIRST PLACE, IT WAS STATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSAC TIONS MADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BO OKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIK E INABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SALES OF SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF ACCOUNTS MAINTAINED B Y OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA ( SUPRA ) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA ( SUPRA ) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURI NG THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND T HESE ARE ACTUALLY 43 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAME LY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILUR E TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTIO N. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTA INING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS O NLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HA D BEEN A YEAR-WISE NON- RECORDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHI CH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A), WHICH ORDER WA S AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DE LETIONS IN ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIO NS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSING AUTHORITIES IN S UCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCEALING INCOME OR INDU LGING IN CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METIC ULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AW AY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND D OCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THESE FINDINGS DO NOT CALL FOR INTERFERENCE. THE SE COND QUESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE O PERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTE D TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN T HE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMI SES AND ESTIMATES WITHOUT THERE 44 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA ( SUPRA ), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA ( SUPRA ) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQU ENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SEC TION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BA SIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. THE HONBLE DELHI HIGH COURT HAS CONCURRED WITH THE VIEW AS TAKEN IN CASE OF KABUL CHAWLA (SUPRA) AS WELL AS THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI STEEL INDIA LTD. VS. ACIT ( SUPRA). EVEN ON THE ISSUE OF ADDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SE CTION 153A IN RESPECT OF THE ASSESSMENT YEAR WHICH WAS ALREADY COMPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH AND WAS NO T ALREADY AVAILABLE TO THE AO, THE ADDITIONS MADE BY THE AO ON ACCOUNT OF SECU RITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. CIT (A). THE RELEVANT OBSERVATI ONS OF THE HONBLE HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA (SUPRA) ARE IN PARA 53 AS UNDER :- 53. AT THIS STAGE, IT IS ALSO TO BE NOTICED THAT AN EL ABORATE ARGUMENT WAS MADE BY MR. MANCHANDA ON THE ASPECT OF THE SECURITY DEPOSITS AC CEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFUNDABLE SECURITY DEPOS ITS AND THE OTHER FOR NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REFUNDABLE SECURIT Y DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMAND REPORT ACCEPTED THEM AS HAVIN G BEEN DISCLOSED. THIS HAS BEEN NOTICED BY THE CIT (A) IN PARA 7.2.1 OF HIS ORDER F OR AY 2004-05. AS REGARDS NON- REFUNDABLE SECURITY DEPOSIT, THE CIT (A) ACCEPTED T HE AO'S FINDINGS THAT TREATING THE SUM AS 'GOODWILL WRITTEN OFF ON DEFERRED BASIS' WAS NOT CORRECT, HENCE THE ADDITION OF RS. 5,09,343 WAS HELD TO BE JUSTIFIED AND CORRECT. IT W AS DULY ACCOUNTED FOR UNDER 'LIABILITIES' 45 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AND TRANSFERRED TO INCOME IN A PHASED MANNER. THIS WAS NOT DONE BY MANIPULATING THE ACCOUNT BOOKS OF THE ASSESSEE AS ALLEGED BY THE REV ENUE. THIS WOULD HAVE BEEN EVIDENT HAD THE RETURN BEEN PICKED UP FOR SCRUTINY UNDER SE CTION 143(3) OF THE ACT. THIS, THEREFORE, WAS NOT MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. CONSEQUENTLY, THE ADDITIONS SOUGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE CIT (A). THUS THE ESSENTIAL COROLLARY OF THESE DECISIONS IS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF TH E ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EXCEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. IT IS PERTINENT TO NOTE THAT THE SLP FILED BY THE R EVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT V S. MEETA GUTGUTIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT IN CASE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE HONBL E HIGH COURT HAS HELD IN PARA 23 TO 30 AS UNDER :- 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA ( SUPRA ) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO T HE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISITION WAS MADE. ANOTHER S IGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOW ERED TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF T HE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONLY 46 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(1)(A ) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUIS ITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AN D REASSESS THE TOTAL INCOME, TAKING NOTE TO THE UNDISCLOSED INCOME, IF A NY, UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASS ESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICT ION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN RE MOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF SECTI ON 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 14 8 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLIC ABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTIO N TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERE D BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMPLETION OF AN ASSE SSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CA SE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, TH E ASSESSING OFFICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED B Y SECTION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF N EED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSM ENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. I N SUCH A CASE, THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A S AYS THAT SUCH PROCEEDINGS 'SHALL ABATE'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDE RS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE U NDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE AS SESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT Y EAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DE TERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB-SECTION (1) OF SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEE DINGS ABATE, THE DECKS 47 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSE SSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. THE POSITION THUS EMERGING I S THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE M AKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY AB ATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MAD E (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING W ITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOT AL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTI ON 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSE SSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSE D AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON TH AT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE.' (EMPHASIS S UPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED ASSESSMENTS HAVE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGE THER WITH THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT AND ASSESSED AS THE TOTAL INCOME. THE OBSERVATIONS MADE IN THE JUDGMENT CONTRASTING THE P ROVISIONS OF DETERMINATION OF UNDISCLOSED INCOME UNDER CHAPTER XIVB WITH DETERMIN ATION OF TOTAL INCOME UNDER SECTIONS 153A TO 153C OF THE ACT HAVE TO BE R EAD IN THE CONTEXT OF SECOND PROVISO ONLY, WHICH DEALS WITH THE PENDING ASSESSME NT/REASSESSMENT PROCEEDINGS. THE FURTHER OBSERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDINGS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE O F THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH, THE NOTICE AND CONSEQUENTIAL ASSESSMENT UNDER SECTION 153A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIM INATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. THE PROVISIONS OF SECTIO NS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/ OR ASSESSEE BEYOND PROVISIONS 48 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING ASSESSMENT) AND 263 (REVISION OF O RDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN R ESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECT ION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF A N ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PRO CEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIA TION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPOR T THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S ( SUPRA ) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMENT PROCEEDINGS . THE WORD 'PENDING' DOES NOT OPERATE ANY SUCH INTERPRETATION, THAT WHER EVER THE APPEAL AGAINST SUCH ASSESSMENT OR REASSESSMENT IS PENDING, THE SAM E ALONG WITH ASSESSMENT OR REASSESSMENT PROCEEDINGS IS LIABLE TO BE ABATED. THE PRINCIPLES OF INTERPRETATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE SECOND PROVISO TO SECTION 153A IN A M ANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE , AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE ENTIRE PROCE EDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUC H AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWAY ALL THE CONSEQUENCES TH AT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASSESSMENT PROCEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 271(1)(C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR ASSESSMENT OR REASSESSMENT RESULTING INTO T HE DEMAND OR PROCEEDINGS OF PENALTY. ' (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSION, WHICH WE H AVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED.' 49 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARISING OU T OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A), ITAT AND THE HIGH C OURT, ON A NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE AO WOULD HAVE PO WER TO UNDO WHAT HAS BEEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED AND/OR AVOIDED AS HEL D BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE ( SUPRA ). 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN CLAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STANDS COMPLETED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUANCE OF SEARCH OR REQUISITI ON IS REQUIRED TO BE MADE. IN THE CASE IN HAND, THE TRANSACTIONS OF UNSECURED LOANS AS WELL AS INTRODUCTION OF CAPITAL BY THE PARTNERS WERE DULY RECORDED IN TH E BOOKS OF ACCOUNT AND AVAILABLE WITH THE AO. FURTHER, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATE RIAL WAS EITHER FOUND OR SEIZED TO DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUNT OF UNSECURED LOANS OR PARTNERS CAPITAL RECEIVED BY THE ASSESSEE FIRM. THE AO HAS PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CREDIT SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA. IT IS P ERTINENT TO NOTE THAT THE SAID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IN CASE OF THE ASSESSEE ON 2 ND JULY, 2015. THEREFORE, EVEN THE SOLE BASIS OF ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT IS THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKAT A AND STATEMENT OF ONE SHRI ANAND SHARMA, WHO IS STATED TO BE AN ENTRY OPERATOR AND MANAGED VARIOUS CONCERNS/COMPANIES INCLUDING M/S.ROYAL CRYSTAL DEAL ERS, ONE OF THE LOAN CREDITORS OF THE ASSESSEE. EXCEPT THE SAID STATEMEN T AND REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HAS NEITHER REFE RRED TO OR WAS HAVING IN POSSESSION OF ANY MATERIAL TO INDICATE THAT THE UNS ECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS WELL AS PARTNERS CAPITAL RECE IVED BY THE ASSESSEE ARE NOTHING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLO SED INCOME ROUTED BACK IN 50 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE GARB OF UNSECURED LOANS AND PARTNERS CAPITAL. THERE IS NO DISPUTE THAT THESE TRANSACTIONS OF UNSECURED LOANS AND PARTNERS CAPIT AL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSED IN THE RETURN OF INCOME WHICH WERE ALREADY COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSMENT YEARS WERE NOT PENDING ON THE DATE OF SEARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD THAT DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT IN THE CASE OF THE ASSESSEE NO MATERIAL MUCH LESS THE INCR IMINATING MATERIAL WAS UNEARTHED OR ANY UNDISCLOSED INCOME WHICH WAS NOT D ISCLOSED IN THE BOOKS OF ACCOUNTS WAS DETECTED OR FOUND. THE ONLY INCRIMINAT ING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 TO 26 OF ANNEXURE AS -1 IN RESPECT OF LONG TERM CAPITAL GAIN EARNED BY SHRI RAJENDRA AGARWAL AND HI S FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WAS DISCLOSED BY SHRI RAJEND RA AGARWAL IN HIS STATEMENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURREND ERED AND OFFERED TO TAX BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS IN THE YEAR OF SEARCH. THE AO HIMSELF HAS NOT MADE ANY ADDITION IN THE HAND OF TH E ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH WAS FOUND DURING THE C OURSE OF SEARCH AND SEIZURE. THUS, EXCEPT THE MATERIAL DISCLOSING THE LONG TERM CAPITAL GAIN IN THE HAND OF SHRI RAJENDRA AGARWAL, NO OTHER INCRIMINATING MATERIAL E ITHER FOUND OR REFERRED OR IS THE BASIS OF THE ADDITION MADE BY THE AO WHILE FRAM ING THE ASSESSMENT UNDER SECTION 153A OF THE ACT FOR THE ASSESSMENT YEARS 20 10-11 TO 13-14. IT IS APPROPRIATE TO REFER RELEVANT PART OF THE ASSESSMEN T ORDER IN PARA 12 PAGES 48 TO 50, PARA 19 PAGE 83 AND PARA 22 PAGE 86 AS UNDER :- 12. SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE FI RM HAVE BEEN DULY CONSIDERED. HOWEVER, EVEN THE VERY ELABORATE AND CA SE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TOTALLY OFF THE MAR K. AGAINST THE SELF- SPEAKING FACTS OF THE VERY NATURE OF THE ACTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUGE PARTNERS CAPITAL IN THE MOST UNINTE RESTED MANNER AND PROVIDING HUGE UNSECURED LOANS WITHOUT ANY COLLATER AL OR OTHER SECURITY, 51 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE EMPHASIS OF THE ASSESSEE FIRM IN ITS SUBMISSION S HAS BEEN ON SEEKING PROTECTION UNDER VARIOUS JUDICIAL DECISIONS EVEN WI THOUT HAVING ANY FACT COHERENCE. THE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGHT OF THE FOLLOWING FACTS AND CI RCUMSTANCES; A. THE DEPARTMENT HAS VERY SOUND BASIS TO TREAT, THE R ECEIPTS OF UNSECURED LOAN AND PARTNERS CAPITAL FROM THE ABOVE MENTIONED COMPANIES AS BOGUS AND IN GENUINE. THE FINDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVESTIGATION DIRECTORA TE KOLKATA ARE NOT BASED ON ANY PRESUMPTION, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATURE AND SOURCE OF A RECEIPT, WHETHER I T BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE AS ENUMERATED THE HONBLE SUP REME COURT IN THE CASE OF ROSHAN DI HATTI V. CIT (1977) 107 ITR 938 ( SC) AND KALE KHAN MOHAMMAD HANIF V. CIT (1963) 50 ITR 1 (SC). PRIMA FACIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND IN THE BOOKS OF ACCOUNT OF THE A SSESSEE. IN LAND MARK CASES LIKE KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING THE SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVED BY AN ASSESSEE, IS ON HIM. WHERE THE NATURE AND SOURCE THEREOF CANNOT BE EXPLAINED SATISFACTORI LY, IT IS OPEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME O F THE ASSESSEE AND NO FURTHER BURDEN IS ON THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. IT M AY ALSO BE POINTED OUT THAT THE BURDEN OF PROOF IS FLUID FOR T HE PURPOSES OF SECTION 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATING TO IDENTITY, GENUINENESS OF TRAN SACTION AND CREDITWORTHINESS THEN AO MUST DO SOME INQUIRY T O CALL FOR MORE DETAILS TO INVOKE SECTION 68. 52 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. B. THE ASSESSEE FIRM HAS FILED CONFIRMATION LETTERS AN D THIS OFFICE HAS CARRIED OUT FURTHER ENQUIRY TO EXAMINE THE REALITY OF THE TRANSACTIONS. AN ENQUIRY WAS SENT TO THE INVESTIGATION DIRECTORAT E KOLKATA AND IT HAS BEEN ESTABLISHED THAT THESE INVESTOR OR LENDER COMP ANIES ARE CONTROLLED BY THE ENTRY OPERATORS. THE STATEMENTS OF VARIOUS ENTRY OPERATORS ARE SUFFICIENT EVIDE4NCES TO SHOW THAT TH E UNSECURED LOAN AND PARTNERS CAPITAL ARE ASSESSEES OWN UNDISCLOSE D INCOME BROUGHT INTO THE BOOKS OF THE ASSESSEE UNDER THE GARB OF UN SECURED LOAN AND PARTNERS CAPITAL. C. THE DEPARTMENT HAS CARRIED OUT SEARCH OVER THE ASSE SSEE GROUP AND DURING THE COURSE OF SEARCH ACTION U/S 132 OF THE I .T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING SEARCH PROCEE DINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 OF PARTY B-1, WHEREIN THE DETAILS OF YEAR- WISE LTCG EARNED BY SHRI RAJENDRA AGRAWAL AND HIS F AMILY MEMBERS, IS MAINTAINED, WHICH DURING SEARCH ACTION HAS BEEN ACCEPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STA TEMENTS. 19. IN VIEW OF ABOVE FACTS OF THE CASE AND IN THE LIGHT OF ABOVE JUDICIAL DECISION, IT IS ESTABLISHED THAT GENUINENESS OF THE TRANSACTION HAS NOT BEEN PROVED. SECTION 68 OF THE I.T. ACT PROVIDES FOR CHA RGING TO INCOME TAX ON ANY SUM CREDITED IN THE BOOKS OF THE ASSESSEE MAINT AINED FOR ANY PREVIOUS YEAR IF THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED IS NOT, I N THE OPINION OF THE ASSESSING OFFICER, SATISFACTORY. IT PLACES NO DUTY UPON THE ASSESSING OFFICER TO POINT TO THE SOURCE FROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. WHERE AN ASSESSEE FAILS TO PROVE SATISFA CTORILY THE SOURCE AND THE NATURE OF CERTAIN AMOUNT OF CREDIT DURING THE A CCOUNTING YEAR, THE INCOME-TAX OFFICER IS ENTITLED TO DRAW THE INFERENC E THAT THE RECEIPT ARE OF AN ASSESSABLE NATURE. THUS, THE ASSESSEE IS UNABLE TO DISCHARGE ITS BURDEN 53 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. OF PROOF BY FAILING TO ESTABLISH LENDERS IDENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDER. H ENCE, THE UNSECURED LOANS AND PARTNERS CAPITAL SHOWN TO HAVE BEEN RECE IVED FROM VARIOUS KOLKATA BASED COMPANIES AND OTHER COMPANIES REMAINE D UNEXPLAINED. IN THE CIRCUMSTANCES, I AM LEFT WITH NO OPTION THAN TO TAX THE ENTIRE UNEXPLAINED CREDITS BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIVED FROM THE PERSONS MENTIONED IN PARA 5 ABOVE AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX ACT, CHARGEABLE TO TAX AS INCOME OF THE ASSESSEE FIRM FOR THE RESPECTIVE ASSESSMENT YEARS. 22. AFTER EXAMINATION OF THE INFORMATION AND DETA ILS PLACED ON RECORD AND DISCUSSION WITH THE ASSESSEE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- RETURNED INCOME AS PER ITR U/S 153A OF THE ACT. RS. 2,82,83,460/- ADDITIONS | UNEXPLAINED CASH CREDITS U/S | 68 OF THE ACT IN THE FORM OF | UNSECURED LOAN AND PARTNERS | CAPITAL RS. 67,20,14,999/- ASSESSED INCOME RS. 70,02,98,459/- R/O RS. 70,02,98,459/- THE TOTAL INCOME OF THE ASSESSEE IN THE STATUS OF F IRM FOR ASSESSMENT YEAR 2010-11 RELEVANT TO PREVIOUS YEAR 2009-10 IS A SSESSED AT RS. 70,02,98,459/- U/S 153A READ WITH SECTION 143(3) OF I.T. ACT, 1961. THE FORM ITNS-150 SHOWING CALCULATION OF TAX AND INTERE ST CHARGEABLE, IF ANY, IS ATTACHED HEREWITH AND FORMS A PART OF THIS ORDER . A NOTICE OF DEMAND U/S 156 OF THE ACT AND CHALLAN FOR PAYMENT OF TAX, IF PAYABLE, IS HEREBY ISSUED. PENALTY NOTICE U/S 274 RWS 271(1)(C) IS ISS UED SEPARATELY. 54 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE ENTIRE FINDING OF THE AO IS BASED ON THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING KOLKATA AND STATEMENT OF SHRI AN AND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITION O N THIS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY O N THE GROUND THAT THE SLPS FILED BY THE REVENUE IN THE CASES OF KABUL CHAWLA ( SUPRA) AND M/S. ALL CARGO GLOBAL LOGISTICS (SUPRA) ETC. HAVE BEEN ADMITTED FO R DECISION BY THE HONBLE SUPREME COURT. THE RELEVANT PART OF THE FINDING OF THE LD. CIT (A) IN PARA 3.2.2 AND 3.2.4 AT PAGES 35 AND 36 ARE AS UNDER :- 3.2.2 AS PER THE PROVISIONS OF THIS SECTION WHERE A SEARCH IS INITIATED U/S 132 OF THE ACT, THE A.O SHALL ISSUE A NOTICE REQUIR ING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASS ESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED, T HE AO HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YE ARS.(EMPHASIS SUPPLIED BY ME). (THE DECISIVE WORDS USED IN THE PROVISIONS ARE TO ' ASSESSEE OR REASSESS THE TOTAL INCOME' ). THE A.O. IS THUS DUTY BOUND TO DETERMINE THE 'TOTAL INCOME' OF THE ASSESSEE FOR SUCH SIX ASSESSM ENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCOME' REFERS TO THE SUM TOTAL OF INCO ME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME THEREFORE WI LL COVER NOT ONLY THE INCOME EMANATING FROM DECLARED SOURCES OR ANY MATER IAL PLACED BEFORE THE ASSESSING OFFICER BUT FROM ALL SOURCES INCLUDING TH E UNDISCLOSED ONES, OR BASED ON THE UNPLACED MATERIAL BEFORE THE AO. 3.2.3 THE CONCEPT OF ASSESS OR REASSESS AND SHALL ABATE AS CONTEMPLATED U/S 153A IS UNDER HOT JUDICIAL DEBATE. I FIND THAT LEGALLY, THIS ISSUE IS VERY CONTENTIOUS IN VIEW OF THE DIVERGENT VIEWS OF THE VARIOUS 55 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AUTHORITIES. THE APPELLANT HAS TRIED TO HIGHLIGHT M OST OF THEM. HOWEVER, IT IS EQUALLY PERTINENT TO MENTION HERE THAT THE DEPARTME NT HAS NOT ACCEPTED THE DECISIONS OF HON'BLE MUMBAI HIGH COURT IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FILED BEFORE THE HON'BLE SUPREME C OURT. THE HON'BLE SUPREME COURT HAS GRANTED LEAVE VIDE ORDER DATED 12 .10.2015 AS REPORTED IN 64 TAXMANN.COM 34 (S.C.). SIMILARLY, IN THE CASE OF KABUL CHAWLA SLP HAS ALSO BEEN FILED. 3.2.4 IN VIEW OF SLPS ADMITTED IN CASE OF KABUL CHAWLA, M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., (SUPRA), ASSESSEES CONTENTION CANNOT BE ACCEPTED. MOREOVER, IN ANY CASE, THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS AS PE R RELEVANT GROUND OF APPEAL, THE ISSUE RAISED IN THIS GROUND FOR PRESENT REMAINS FOR ACADEMIC DISCUSSION ONLY. ACCORDINGLY, ISSUE RAISED IN GROUN D NO. 12 IS DISMISSED. THEREFORE, NEITHER IN THE ASSESSMENT ORDER NOR IN T HE ORDER OF THE LD. CIT (A) THERE IS ANY MENTION OR FINDING THAT THE ADDITIONS HAVE BEEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HAS SO LELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHRI ANAND SHARMA RECORDED BY THE INVESTIGATION WING DURING THE SURVE Y UNDER SECTION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATION/REPORT OF THE INVESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANN OT BE REGARDED AS INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKING THE ADDITION UNDER SECTION 153A IN THE ASSESSMENT Y EARS WHERE THE ASSESSMENT WAS NOT PENDING ON THE DATE OF SEARCH AND THE PROCE EDINGS ARE IN THE NATURE OF 56 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATER IAL DISCLOSING UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED BY THE ASSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS NOT CLAIMED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS O N THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HON BLE SUPREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSME NT ORDERS UNDER SECTION 153A FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 ARE NOT SUSTAINABLE AND ACCORDINGLY THE SAME ARE LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. IN THE CASE IN HAND, THE TRANSACTIONS OF PURCHASE A ND SALE OF SHARES WERE NOT ONLY DULY RECORDED IN THE BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATION BUT FOR THE YEAR IN WHICH THE ASSESSEE ACQUIRED THE SHARES IN QUESTION. THE ASSESSEE ALSO BROUGHT ON RECORD THE EVIDENCE IN THE SHAPE OF BILLS, ALLOTMEN T OF SHARES, PAYMENT THROUGH BANKING CHANNEL, DEMATERIALIZING OF THE SHARES IN THE DEMAT ACCOUNT OF THE ASSESSEE AND SALE OF THE SHARES THROUGH STOCK EXCHANGE FROM THE DEMAT AC COUNT OF THE ASSESSEE. THE DOCUMENTARY EVIDENCE WHICH CAN BE INDEPENDENTLY VER IFIED AND THE CORRECTNESS OF THE SAME CANNOT BE QUESTIONED BEING THE PAYMENT MADE BY THE ASSESSEE THROUGH BANKING CHANNEL REFLECTED IN THE BANK ACCOUNT STATEMENT AS WELL AS DEMATERIALIZING OF THE SHARES IN THE DEMAT ACCOUNT PROVING THE FACT OF HOLDING OF THE SHARES BY THE ASSESSEE IN THE DEMAT ACCOUNT. THE EVIDENCE PRODUCED BY THE ASSESS EE HAS ESTABLISHED AT LEAST TWO FACTS THAT THE ASSESSEE WAS HOLDING THE SHARES IN H IS DEMAT ACCOUNT AND THE PAYMENT FOR PURCHASE CONSIDERATION WAS MADE THROUGH BANKING CHANNEL AT LEAST MORE THAN ONE YEAR PRIOR TO THE DATE OF SALE OF SHARES W HICH IS ALSO NOT DISPUTED BY THE AO. 57 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL TO CO NTROVERT OR DISPROVE THESE EVIDENCES OF PAYMENT THROUGH BANKING CHANNEL, HOLDI NG OF THE SHARES IN THE DEMAT ACCOUNT OF THE ASSESSEE, SALE OF SHARES FROM THE DE MAT ACCOUNT THROUGH STOCK EXCHANGE AT THE PREVAILING PRICE IN THE STOCK EXCHA NGE ON THE DATE OF SALE. THUS THE CONCLUSION OF THE AO IS BASED ON SUSPICION AND SURM ISES WITHOUT ANY TANGIBLE MATERIAL TO SHOW THAT THE ASSESSEES OWN UNACCOUNTED INCOME HAS ROUTED BACK TO THE ASSESSEE IN THE SHAPE OF LONG TERM CAPITAL GAIN. THOUGH THE LD. CIT D/R HAS RELIED UPON VARIOUS DECISIONS PARTICULARLY THE DECISION OF HON' BLE KERALA HIGH COURT, HOWEVER, THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT I S BINDING ON THE TRIBUNAL WHEN THERE ARE DIVERGENT VIEWS OF THE DIFFERENT HIGH COURTS ON AN ISSUE. FURTHER, THIS TRIBUNAL HAS ALREADY TAKEN A CONSISTENT VIEW ON THIS ISSUE IN TH E CASE OF KOTA DALL MILLS VS. DCIT (SUPRA) AS WELL AS IN A SERIES OF OTHER DECISIONS. IN CASE OF DCIT VS. A.M. EXPORTS, THE COORDINATE BENCH OF THE TRIBUNAL VIDE ORDER DATED 7 TH JANUARY, 2019 IN ITA NO. 561/JP/2018 HAS AGAIN CONSIDERED THIS ISSUE IN PARA 8 AS UNDER :- 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THE FIRST ASPECT INVOLVED IN TH E MATTER IS SUSTAINABILITY OF THE ADDITION MADE BY THE ASSESSING OFFICER WITHO UT ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARC H AND SEIZURE ACTION. THERE IS NO DISPUTE THAT THE ORIGINAL RETURN OF INC OME FILED BY THE ASSESSEE U/S 139(1) OF THE ACT ON 11/10/2010 WAS NOT PENDING ASSESSMENT AS ON THE DATE OF SEARCH ON 03/4/2013. THEREFORE, THE ASS ESSMENT WAS COMPLETED U/S 143(1) AND IT WAS NOT ABATED DUE TO T HE SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT ON 03/4/2013. THE ORDER O F THE ASSESSING OFFICER 58 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. IS BASED ON THE STATEMENT OF THE ASSESSEE RECORDED U/S 132(4) OF THE ACT AND SPECIFICALLY THE QUESTION NO. 77. IT IS PERTINE NT TO NOTE THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION, THE STATEMENT OF THE ASSESSEE WAS BEING RECORDED FROM 04/4/2013 TO 05/4/2013 AND AS M ANY AS 78 QUESTIONS WERE PUT TO THE ASSESSEE. THE STATEMENT O F THE ASSESSEE RECORDED U/S 132(4) RUNS INTO ABOUT 50 PAGES. THE S TATEMENT OF THE ASSESSEE WAS RECORDED FROM 12.00 NOON ON 04/4/2013 AND CONTINUED UP TO 1.00 A.M. ON 05/4/2013. AFTER THE BREAK, THE REC ORDING OF STATEMENT AGAIN RESUMED AT 7.50 A.M. ON 05/4/2013 WE NOTE THA T UP TO QUESTION NO. 67 WERE RECORDED ON 04/4/2013 AND UP TO 1.00 A.M. O N 05/4/2013 AND THEREAFTER THE STATEMENT OF THE ASSESSEE WAS AGAIN RESUMED IN THE MORNING OF 05/4/2013 AND CONTINUED UP TO QUESTION N O. 78. IT IS MANIFEST FROM THE STATEMENT RECORDED U/S 132(4) OF THE ACT T HAT REPEATED QUESTIONS WERE ASKED ABOUT THE GENUINENESS OF THE L OANS TAKEN BY THE ASSESSEE DURING THE FINANCIAL YEAR 2009-10 RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE ASSESSEE HAS GIVEN THE ANSWER AND STATED THAT ALL THESE LOANS ARE GENUINE AND TAKEN T HROUGH BANKING CHANNEL AND THE ASSESSEE ALSO REPAID THESE LOANS PRIOR TO T HE DATE OF THE SEARCH. THESE TRANSACTIONS ARE VERY MUCH PART OF THE REGULA R BOOKS OF ACCOUNT OF THE ASSESSEE. HOWEVER, THE SEARCH TEAM AGAIN PUT QU ESTION TO THE ASSESSEE AS QUESTION NO. 77 IN WHICH THE ASSESSEE H AS STATED THAT THE ASSESSEE HAS CHECKED THE DETAILS OF THE LOANS FROM M/S DIPNARAYAN VYAPAR PVT. LTD. FOR WHICH THE ASSESSEE RECEIVED CA SH AND THE SAME WAS DECLARED AS UNDISCLOSED INCOME FOR THE YEAR OF THE SEARCH. WE FIND THAT PRIOR TO THAT THE ASSESSEE WAS ALSO ASKED QUESTION NO. 34 TO 36 AND QUESTION NO. 39. EVEN AFTER THE STATEMENT RECORDED U/S 132(4) OF THE ACT, THE INVESTIGATION WING AGAIN SUMMONED THE ASSESSEE U/S 131 OF THE ACT FOR CONDUCTING POST SEARCH ENQUIRY AND THE STATEMEN T OF THE ASSESSEE WAS RECORDED ON 30/05/2013 WHEREIN IN RESPONSE TO QUEST ION NO. 12, THE 59 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSEE CLARIFIED THAT THE EARLIER STATEMENT OF TH E ASSESSEE IN QUESTION NO. 77 WAS NOT A CORRECT STATEMENT REGARDING THE LO AN TAKEN FROM M/S DIPNARAYAN VYAPAR PVT. LTD.. THUS, FOR UNDERSTANDIN G OF THE ISSUE, ALL THE RELEVANT QUESTIONS PUT TO THE ASSESSEE AND ANSWERED TO THEM ARE TO BE READ CONJOINTLY. HENCE, WE QUOTE QUESTION NO. 34 TO 36 AND QUESTION NO. 39 OF ASSESSEES STATEMENT RECORDED U/S 132(4) DATE D 04/4/2013 AND QUESTION NO. 77 OF STATEMENT RECORDED U/S 132(4) ON 05/4/2013 AND QUESTION NO. 12 AND REPLY OF THE STATEMENT OF THE A SSESSEE RECORDED U/S 131 OF THE ACT IN POST SEARCH INVESTIGATION BY THE ADIT AS UNDER: IZ IZIZ IZ- -- -34 3434 34 ESA VKILS VKIDH HKKXHNKJH QEZ ,-,E-,DLIKSVLZ CQD ESA FUEUFYF[KR VUFLD;KSJMZ YKSU SFMVLZ DS YSTJ FN[KK JGK GW& (I) INTERLINK SAVING & FINANCE PVT. LTD. 57 ADARSH NAGA R, RISHIKESH, DEHRADUN, UTTRANCHAL. (II) PARMATMA DEVELOPERS PVT. LTD., 101, BALARAM DEY STR EET, GR FLOOR, KOLKATA (III) RAMESHWAR FINVEST PVT. LTD., 101 BALARAM DEY STREET , KOLKATA (IV) SRI RAM TIE UP PVT. LTD., 2, BANARASHI GHOSH, 2 ND BYE LANE, KOLKATA (V) ________________________DO ________________________ _ (VI) TARA VINIMAY PVT. LTD., 101, BALARAM DEY STREET, G. FLOOR, KOLKATA (VII) VICTOR PROJECT PVT. LTD., 2 MULLICK STREET, IST FLO OR, KOLKATA (VIII) YATAN TRADERS PVT. LTD., 62/1, HRIDAY KRISHNA BANER JEE LANE, HOWRAH. MIJKSDR LHKH TRANSACTIONS DH IZEK.K LI'V DJSA\ MKJ MKJ MKJ MKJ& MIJKSDR [KKRKSA DH UDYKSA DKS ESAUS NS[KDJ ;G DGUK PKGRK GW ;G FOK O'KZ 2009&2010 C;KT IJ DTKZ FY;K GQVK FOK O'KZ 201 1&12 ESAUSA PQDK FN;KA IZ IZIZ IZ- -- -35 3535 35 MIJKSDR OF.KZR LHKH DEIFU;KA VKIDS LEIDZ ESA DSL S VK;H FOOJ.K NSA 60 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. MKJ MKJ MKJ MKJ& ESJH QEZ }KJK T;IQJ ,OA T;IQJ DS CKGJ ESA TGKA LS HKH O;KIKJ DS FY, EQ>S DTKZ IZKIR GQVK ESAUS FY;K RFKK YKSVK;K ,OA XR O'KKSZA EAS BULS ESJK LEIDZ DSLS JGK EQ>S VHKH ;KN UGHA VK JGK GSA IZ IZIZ IZ- -- -36 3636 36 BU DEIFU;KSA LS D;K JSV VKWQ BUVSLV FN;K GS FOOJ.K NS\ MKJ& MKJ& MKJ& MKJ& XR O'KKSZA DH CKR EQ>S TCKUHRKSJ IJ ;KN UGHA GSA ;G QEZ }KJK IS'K DH XBZ [KKRKSA ESA X.KUK DJ FUDKYUK GKSXK TKS JHEKU~ D S DK;KZY; ESA GKTJH NSUS VKAXK TC X.KUK DJ CRKAXKA IZ IZIZ IZ- -- -39 3939 39 VKIDH QEZ A.M. EXPORTS DK DIPNARAYAN VYAPAAR PVT. LTD. DS LKFK D;K LECU/K GS] LI'V DJSA\ MKJ MKJ MKJ MKJ& ESAUS DIPNARAYAN VYAPAAR PVT. LTD. LS YXHKX RHU O'KZ IGYS C;KT LS ISLK M/KKJ FY;K FKK EQ>S ;G ISLK FDL C;KT NJ IJ FNY K;K FKK EQ>S VHKH ;KN UGHA VK JGK GSA DIPNARAYAN VYAPAAR PVT. LTD. LS FDL O;FDR DS EK/;E LS ISLK M/KKJ FY;K FKK VHKH EQ>S ;KN UGHA VK JGK GSA B L LECU/K ESA TKUDKJH IZKIR DJ ESA VKIDKS CRK NWAXKA IZ IZIZ IZ- -- -77 7777 77 GEUS IZ'U LA- 39 ESA A.M. EXPORTS ,OA DIPNARAYAN O;KIKJ DS TRANSACTIONS DS CKJS ESA IWNK RKS VKIUS V/KWJH TKUD KJH NH FKH D;K VC VKIDKS BL CKCR~ VKSJ VF/KD FOOJ.K CRKUK GS\ MKJ MKJ MKJ MKJ& TH GK] ESJS DKS NKS FNU LS ;KN DJRS GQ, ;K N VK JGK GS ,OA FOHKKX LS LG;KSX DH BPNK J[KRS GQ, CRKUK PKGRK GW FD ESAUS E SLLZ DIPNARAYAN VAYAPAR PRIVATE LIMITED DKS PSD FN;K FKK FTLDK EQ>S BL LKY ESA DS'K IZKIR G KS X;K FTLS ESAUS BL FOK O'KZ DH V?KKSF'KR VK; DS :I ESA FOHKKX DKS LEFIZR DJ FN;KA IZ IZIZ IZ- -- -12 1212 12 VKIUS IZ'U LA[;K 11 DS TOKC ESA ,USDLJ AS EXIBIT- 5 DS IST LA[;K 37 D TOKC ESA CRK;K FD VKIUS ESLLZ NHIUKJK;.K O;KIKJ I ZK-FY- LS C;KT IJ ISLK FY;K GQVK GSA MLDK , ,E ,DLIKSVZ DH YS[KK IQLRDKSA ESA FNUKAD 01-04-11 LS FNUKAD 31-03-12 DH VOF/K DK YSTJ GSA ESA VKIDKS RYK 'KH ,OA TCRH DH DK;ZOKGH DS NKSJKU VKIDS L'KIFK NTZ C;KU DK IZ'U LA[;K 77 FN [KK JGK GW FTLDS MRRJ ESA VKIUS DGK FKK FD------- TH GKA ESJS DKS NKS FNU LS ;KN DJRS GQ, ;KN VK JG K GS ,OA FOHKKX LS LG;KSX DH BPNK J[KRS GQ, CRK;K PKGRK GWA FD ESAUS ESLLZ NH IUKJK;.K O;KIKJ IZK-FY- DKS 61 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PSD FN;K FKK FTLDK EQ>S BL LKY ESA DS'K IZKIR GKS X ;K FTLS ESAUS BL FORR O'KZ DH V?KKSF'KR VK; DS :I ESA FOHKKX DKS LEFIZR DJ FN; KA D`I;K RYK'KH ,OA TCRH DH DK;ZOKGH DS NKSJKU VKIDS L 'KIFK NTZ C;KU DK IZ'U LA[;K 77 DS TOKC DKS ,D CKJ IQU% I<+DJ LE> YSOSA FD VKIUS MIJKSDR IZ'U LA[;K 11 DS TOKC ESA D;K LGH MRRJ FN;K GSA BL LACA/ K ESA ESA VKIDK /;KU VK;DJ VF/KFU;E 1961 DS VFHK;KSTU IZKO/KKUKSA DH RJQ VKIDK /;KU VKDF'KZR DJUK PKGRK GW FD XYR C;KUH DH N'KK EAS VKIDS FO:) VFHK;KSTU DH DK;ZOKGH IZKJEHK DH TK LDRH GSA D`I;K ,D CKJ IQU% L KSPDJ CRK;SA FD VKIUS ESLLZ NHIUKJK;.K O;KIKJ IZK-FY- LS FDRUK :I;K M/KKJ FY;K GS VFKOK VKIUS PSD NSDJ MULS OKIL UXN JKF'K IZKIR DH FKH] LI'V DJSAA MKJ MKJ MKJ MKJ& ESAUS VKIDS }KJK FN[KK;S X;S ,USDLJ AS EXIBIT -5 DS IST LA[;K 37 ,OA RYK'KH ,OA TCRH DH DK;ZOKGH DS NKSJKU NTZ ESJS C;KU KSA DKS VPNH RJG LS I<+DJ LE> FY;K GSA ESA ;GKA ;G DGUK PKGRK GWA FD RYK'KH , OA TCRH DH DK;ZOKGH DS NKSJKU FOHKKX DS VF/KDKFJ;KSA }KJK BL LACA/K ESA EQ >LS CKJ&CKJ IWNK X;K RKS ESAUS EKUFLD :I LS FKDDJ ;G TOKC NS FN;K FKKA YSFDU VC ES AUS VIUH IWJH YS[KK IQLRDKSA DKS NS[K FY;K GS VKSJ ESA VC ;G 'KIFKIWOZD C;KU DJUK PKGRK GW FD ESAUS ESLLZ NHIUKJK;.K O;KIKJ IZK-FY- PSD LS C;KT IJ ISLK FY;K FKK ,OA MLDK HKQXRKU HKH PSD LS GH FD;K GSA ESAUS BL DEIUH DS LK FK DKSBZ UXN YSU&NSU UGHA FD;K GSA TGKA RD VK;DJ IZKO/KKUKSA DH CKR GS MLDS L ACA/K ESA ESJS C;KU NTZ DJRS ODR FOHKKX }KJK EQ>S VOXR DJK FN;K X;K FKK TKS ESJH TKUDKJH ESA GSA FQJ HKH ESA IW.KZ :I LS LARQ'V GKSDJ BL I`'B DS CKJ S ESA TOKC NS JGK GWAA IN REPLY TO THE QUESTION NO. 34, THE ASSESSEE HAS C LEARLY STATED THAT THE TRANSACTION OF LOAN FROM ALL THE PARTIES WERE TAKEN ON INTEREST IN THE F.Y. 2009-10 AND THESE WERE REPAID IN THE F.Y. 2011-12. THEREAFTER A SPECIFIC QUESTION WAS PUT TO THE ASSESSEE REGARDING THE LOAN TAKEN FROM M/S DIPNARAYAN VYAPAR PVT. LTD. AS QUESTION NO. 39 AND IN REPLY TO THE SAME, THE ASSESSEE STATED THAT THE LOAN WAS TAKEN ABOUT T HREE YEARS BACK ON INTEREST BUT THE ASSESSEE WAS NOT ABLE TO REMEMBER THE PERSON THROUGH 62 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WHOM THE LOAN WAS TAKEN. THEREFORE, THERE WAS NO AM BIGUITY IN THE REPLY TO QUESTION NO. 39 EXCEPT THAT THE ASSESSEE WAS NOT ABLE TO TELL THE NAME OF THE PERSON WHO HELPED THE ASSESSEE IN PROCURING THE LOAN. SINCE THE INVESTIGATION WING WAS NOT SATISFIED WITH THE ANSWE RS OF THE ASSESSEE AS THEY COULD NOT EXTRACT THE STATEMENT WHICH CAN BE U SED AGAINST THE ASSESSEE, THEREFORE, QUESTION WERE CONTINUOUSLY PUT TO THE ASSESSEE FOR TWO DAYS AND IT IS A MATTER OF RECORD THAT THE ASSE SSEE WAS GRILLED UP TO 1.00 A.M. ON THE NIGHT OF 04/4/2013 AND AGAIN RESTA RTED IN THE MORNING AT 7.50 A.M. AND THE QUESTION NO. 77 WAS AGAIN ASKED S PECIFICALLY REGARDING LOAN FROM M/S DIPNARAYAN VYAPAR PVT. LTD. IN REPLY TO THAT THE ASSESSEE HAS EXPLAINED THAT AFTER TRYING TO REMEMBER FOR CON TINUOUSLY FOR TWO DAYS AND HOPING THE COOPERATION FROM THE DEPARTMENT, HE SAID THAT HE RECEIVED CASH AGAINST THE SAID LOAN WHICH WAS DECLARED AS UN DISCLOSED INCOME FOR THE YEAR OF SEARCH. THE INVESTIGATION WING WAS STIL L NOT SATISFIED WITH THE STATEMENT OF THE ASSESSEE AND AGAIN CALLED THE ASSE SSEE FOR FURTHER INVESTIGATION ON 30/5/2013 AND THEREAFTER ON 21/6/2 013. THE ASSESSEE WAS AGAIN PUT THE QUESTION ABOUT THE LOAN TAKEN FRO M M/S DIPNARAYAN VYAPAR PVT. LTD., IN REPLY, THE ASSESSEE EXPLAINED THAT ON REPEATED INSTANCES OF THE INVESTIGATION TEAM AND DUE TO EXHA USTED MIND, THE ASSESSEE GIVEN AN INCORRECT REPLY TO QUESTION NO. 7 7 RECORDED U/S 132(4) OF THE ACT ON 05/4/2013 AND AGAIN STATED THAT AFTER VERIFYING THE BOOKS OF ACCOUNT, THE SAID LOAN WAS TAKEN ON INTEREST AND WA S ALSO REPAID BOTH THE 63 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TRANSACTIONS ARE THROUGH BANKING CHANNEL. THUS, HAV ING REGARD TO THE BACKGROUND OF THE CIRCUMSTANCES IN WHICH STATEMENT OF THE ASSESSEE REGARDING SAID TRANSACTION OF LOAN FROM M/S DIPNARA YAN VYAPAR PVT. LTD. WAS RECORDED AND FINALLY STATEMENT RECORDED IN POST SEARCH INQUIRY WE ARE OF THE VIEW THAT THE ASSESSEE FINALLY CLARIFIED THE ISSUE IN THE STATEMENT RECORDED U/S 131 OF THE ACT AND THEREFORE, THERE WA S NO ADMISSION ON THE PART OF THE ASSESSEE. EXCEPT THE STATEMENT OF PARTN ER OF THE ASSESSEE, THERE WAS NOTHING INCRIMINATING FOUND OR SEIZED DUR ING THE COURSE OF SEARCH AND SEIZURE ACTION, THEREFORE, THE STATEMENT OF THE ASSESSEE RECORDED DURING THE SEARCH AND POST SEARCH ENQUIRY HAS TO BE READ TOGETHER AND THE OUTCOME OF THE SAID STATEMENT IS T HAT THE ASSESSEE HAS NEVER ADMITTED ANY BOGUS TRANSACTION EXCEPT THE MIS UNDERSTANDING DUE TO CONTINUOUS GRILLING BY THE INVESTIGATION WING AND D UE TO MENTALLY EXHAUSTED, THE ASSESSEE GIVEN SOME INCONSISTENT REP LY TO QUESTION NO. 77 WHICH WAS SUBSEQUENTLY CLARIFIED IN QUESTION NO. 12 OF THE STATEMENT RECORDED BY THE INVESTIGATION WING IN THE POST SEAR CH ENQUIRY U/S 131 OF THE ACT. EVEN OTHERWISE, ALL THESE STATEMENTS ARE O NLY REGARDING ONE TRANSACTION OF LOAN THAT CANNOT BE APPLIED TO THE E NTIRE TRANSACTIONS OF LOAN TAKEN FROM 12 PARTIES. THEREFORE, EXCEPT THE S TATEMENT OF THE ASSESSEE TO QUESTION NO. 77, WHICH WAS SUBSEQUENTLY CLARIFIED IN QUESTION NO. 12, THERE WAS NOTHING IN THE SHAPE OF ANY MATER IAL OR DOCUMENT MUCH LESS INCRIMINATING MATERIAL WITH THE ASSESSING OFFI CER TO MAKE THE ADDITION 64 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TO THE TOTAL INCOME OF THE ASSESSEE. IF THE STATEME NT OF THE ASSESSEE IS READ IN TOTO THEN THERE WILL BE NO ADMISSION REGARD ING ANY OF THE LOAN TRANSACTIONS BEING AN ACCOMMODATION ENTRY. THEREFOR E, THE QUESTION ARISES WHETHER IN ABSENCE OF ANY INCRIMINATING MATE RIAL, THE ASSESSING OFFICER CAN MAKE ANY ADDITION TO THE TOTAL INCOME O F THE ASSESSEE WHEN THE ASSESSMENT WAS NOT ABATED DUE TO THE SEARCH AND SEIZURE ACTION. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA (SUPRA) HAS CONSIDERED AND OBSERVED IN PARA 37 AND 38 AS UNDER: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONE D DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I . ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF TH E ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SE ARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR REL EVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II . ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHA LL ABATE. 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 RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A Y IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE P OWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WIL L BE ONLY ONE ASSESSMENT 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 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR O THER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT AN Y RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MAD E UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V . IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED 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 SEARCH) AND THE WORD 65 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARAT ELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N 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 P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED . SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAV E BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS, THE HON'BLE HIGH COURT HAS RULED THAT THE ASS ESSING OFFICER WHILE MAKING THE ASSESSMENT U/S 153A OF THE ACT CAN MAKE THE ADD ITION ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE CO URSE OF SEARCH OR REQUISITION OF DOCUMENTS, WHICH WERE NOT PRODUCED OR NOT ALREAD Y DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN THE CASE I N HAND, ALL THE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT. EVEN TH E LOANS WERE ALREADY PAID DURING THE F.Y. 2011-12 AND THEREFORE, THESE TRANSA CTIONS WERE DISCLOSED AND KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT/RETURN O F INCOME. HENCE IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE ASSESSING OFFICE R CANNOT MAKE ANY ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. IN THE SUBSEQUENT DECISION, THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. MEETA GUTGUTIA (SUPRA) HAS HELD IN PARA 57 TO 72 AS UNDER: 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA ( SUPRA ) AND CHETAN DAS LACHMAN DAS ( SUPRA ). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSED THREADBARE IN T HE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS ANIL KUMAR BHATIA ( SUPRA ) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED THAT 'WE ARE NO T CONCERNED WITH A CASE WHERE NO 66 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUESTION WAS, THEREFORE , LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS ( SUPRA ) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS O BSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING T HE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE. TO RE PEAT, THERE IS NO CONDITION IN THIS SECTION THAT ADDITIONS SHOULD BE STRICTLY MADE ON T HE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDE NCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL.' 58. IN KABUL CHAWLA ( SUPRA ), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. ( SUPRA ) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED AS UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS ( SUPRA ), AND FILATEX INDIA LTD. V. CIT-IV ( SUPRA ) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THERE WAS SOME MATERIAL UNEARTH ED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, I T IS PLAIN FROM A CAREFUL READING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADD ITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DUR ING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 ( PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. ), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMIN ATING MATERIAL BEING FOUND DURING THE SEARCH UNDER SECTION 132 OF THE ACT, THE REVENUE SO UGHT TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE C IT (A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WITH.' 59. IN KABUL CHAWLA ( SUPRA ), THE COURT REFERRED TO THE DECISION OF THE RAJAST HAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA ( SUPRA ) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT ( SUPRA ) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS A ND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT WAS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDE R SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: 67 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JUR ISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDE R SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED BY THE COURT ON THE GROUND TH AT IT WAS 'NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION' WHICH WAS IN THE CONT EXT OF SEARCH AND/OR REQUISITION. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSE SS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN R ESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'AS SESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA ( SUPRA ), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO TH E ASSESSMENT UNDER SECTION 153A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA ( SUPRA ) AS UNDER: '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 AFOREMENTI ONED 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) 68 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SE ARCHED 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 O F THE SEARCH SHALL ABATE. 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 YEAR S PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. TH E AO HAS THE POWER TO 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 AS SESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED 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 O THER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE 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 HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'A SSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) 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 ME RGES 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 O N 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 INCRI MINATING 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 P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) BEGINNING WITH THE GUJARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIE D OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE FRAMED UNDER SECTION 1 43(3) READ WITH SECTION 153A(1)(B) IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT HIGH CO URT REFERRED TO THE DECISION IN KABUL CHAWLA ( SUPRA ), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) ( SUPRA ) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLA INED IN PARA 15 AND 16 AS UNDER: 69 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SEC TION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A SEARCH OR REQUISITION IS MA DE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153 A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSMENT UNDER SECTION 153A OF TH E ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME W HICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR REQUISITION. HOWEVER, INS TEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INC OME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS T HE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME I N RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVIS O MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASSESSM ENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SEC TION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTI ON 132A, AS THE CASE MAY BE, SHALL ABATE. SUB-SECTION (2) OF SECTION 153A OF THE ACT P ROVIDES THAT IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB- SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR R EASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOUL D STAND REVIVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT I F SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABA TED AND THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUB-SECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSM ENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSME NT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SUPREME COURT IN A CAT ENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETAT ION OF THE OPERATIVE PORTION OF THE SECTION AND IF THERE IS NO AMBIGUITY IN THE LANGUAG E OR IF IT IS PLAIN AND CLEAR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANIN G. FROM THE HEADING OF SECTION 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ., TO PROVIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF THE PROVI SION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOES WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR REQUISITION, IN OTHER WORDS, THE ASSESSME NT SHOULD CONNECTED WITH SOMETHING ROUND DURING THE SEARCH OR REQUISITION VIZ., INCRIM INATING MATERIAL WHICH REVEALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MAND ATE OF SUB-SECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEA RCH OR REQUISITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON T O FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE 70 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR RE QUISITION, IN CASE NO INCRIMINATING MATERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH CO URT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERAT ED, IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSIN G OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TO TAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FUR NISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT UNDER SECTION 147 OF THE ACT H AS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS W ELL AS UNDER SECTION 153A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN THE SIX ASSESSMENT YEARS. IN THE OPINION OF T HIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RE SPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISI TION, NAMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN R ELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DIS ALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POWERS UNDER SE CTION 153A OF THE ACT AND THE EARLIER ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REG ARD, THIS COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT I N THE CASE OF JAI STEEL (INDIA) V. ASST. CIT ( SUPRA ). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED C OUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CON CLUDED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA ( SUPRA ) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE A SSESSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR .' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA ( SUPRA ), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS E ARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. ( SUPRA ) AND OF THIS COURT IN KABUL CHAWLA ( SUPRA ). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KNOWLEDGE PARK (P.) LTD. ( SUPRA ) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO B E MADE PURSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. ( SUPRA ), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA ( SUPRA ). IN GURINDER SINGH BAWA ( SUPRA ), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR DURING PROCEEDI NGS UNDER SECTION 153A OF THE 71 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURI NG THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA ( SUPRA ) AND RAM AVTAR VERMA ( SUPRA ) FOLLOWED THE DECISION IN KABUL CHAWLA ( SUPRA ). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. ( SUPRA ) WHICH WAS REFERRED TO IN KABUL CHAWLA ( SUPRA ) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DISMISSAL OF T HE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARING FOR T HE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT CASE WHICH MAKES IT S RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE FIRST PLACE, THE ASSESSEES THE RE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIO NS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PROCEEDINGS IN THAT CAS E BRING OUT THE POINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS STATED THAT THE STATEMENT R ECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSES SEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSACTIONS M ADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACC OUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE INABILITY OF ACCOUNTA NT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SALES OF SUP ARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR B OOKS OF ACCOUNTS MAINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA ( SUPRA ) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOK S OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA ( SUPRA ) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURING THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND THESE ARE ACT UALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAMELY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILUR E TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. O N THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTAINING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEA RCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED B Y THE ASSESSEE IN THE PRESENT CASE 72 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTI ON NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF M ANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMI NG THAT THERE HAD BEEN A YEAR-WISE NON-RECORDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA ( SUPRA ), ON THE BASIS OF MATERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHICH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MA DE BY THE AO ONLY FOR AY 2004-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DELETED BY THE CIT (A), WHICH ORDER WA S AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS I N ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA ( SUPRA ), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFERENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIONS THEREFORE WERE NOT BASEL ESS. GIVEN THAT THE ASSESSING AUTHORITIES IN SUCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABI TUALLY CONCEALING INCOME OR INDULGING IN CLANDESTINE OPERATIONS CAN HARDLY BE E XPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT O F GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND D OCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE O NE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THESE FINDIN GS DO NOT CALL FOR INTERFERENCE. THE SECOND QUESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METI CULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THERE BEI NG ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHI SEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA ( SUPRA ), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA ( SUPRA ) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS T HERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. CONCLUSION 72. TO CONCLUDE: 73 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ( I ) QUESTION (I) IS ANSWERED IN THE NEGATIVE I.E., IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT IN THE FACTS AND CIRCUMSTA NCES, THE REVENUE WAS NOT JUSTIFIED IN INVOKING SECTION 153A OF THE ACT AGAINST THE ASSESS EE IN RELATION TO AYS 2000- 01 TO AYS 2003-04? ( II ) QUESTION (II) IS ANSWERED IN THE AFFIRMATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT WITH REFERENCE TO AY 2004- 05, THE ITAT WAS CORRECT IN CONFIRMING THE ORDERS OF THE CIT (A) TO THE EXTENT IT DELETED THE ADDITIONS MADE BY THE AO TO THE TAXABLE INCOME OF THE ASSESSEE OF FRANCHI SE COMMISSION IN THE SUM OF RS. 88 LAKHS AND RENT PAYMENT FOR THE SUM OF RS. 13.79 LAK HS? THE SAID DECISION OF HON'BLE HIGH COURT WAS CHALLEN GED BY THE REVENUE BEFORE THE HON'BLE SUPREME COURT, HOWEVER, THE SLP OF THE REVENUE WAS DISMISSED VIDE ORDER DATED 02/7/2018 REPORTED SUPRA. THUS, THE HON 'BLE HIGH COURT HAS REITERATED ITS VIEW AS TAKEN IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) AND SPECIFICALLY HELD THAT ONCE THE ASSESSMENT HAS ATTA INED THE FINALITY I.E. IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN P ROCEEDINGS U/S 153A OF THE ACT EXCEPT SOME INCRIMINATING MATERIAL ARE GATHERED IN COURSE OF SEARCH OR DURING THE PROCEEDINGS U/S 153A OF THE ACT. THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS ACIT (SUPRA) HA S ALSO CONSIDERED THIS ISSUE IN PARA 22 TO 26 AS UNDER: 22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN REA DING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JUR ISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THOUGH SUCH A CLAIM BY THE ASSESSEE FOR THE FIRST T IME UNDER SECTION 153A OF THE ACT IS NOT COMPLETED, THE CASE IN HAND, HAS TO BE CONSIDER ED AT BEST SIMILAR TO A CASE WHERE IN SPITE OF A SEARCH AND/OR REQUISITION, NOTHING INCRI MINATING IS FOUND. IN SUCH A CASE THOUGH 74 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. SECTION 153A OF THE ACT WOULD BE TRIGGERED AND ASSE SSMENT OR REASSESSMENT TO ASCERTAIN THE TOTAL INCOME OF THE PERSON IS REQUIRED TO BE DO NE, HOWEVER, THE SAME WOULD IN THAT CASE NOT RESULT IN ANY ADDITION AND THE ASSESSMENTS PASSED EARLIER MAY HAVE TO BE REITERATED. 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA ( SUPRA ) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH OR REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE AFO RESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULA R ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSES S OR REASSESS THE 'TOTAL INCOME' OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE AS SESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER IN RESPECT O F EACH OF THE SIX ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INC OME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE TO THE U NDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSE SSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOP EN THE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAU SE WITH WHICH SUB-SECTION (1) OF SECTION 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MA DE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE O BTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECT ION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIME-LIMIT PRESCR IBED FOR COMPLETION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED B Y SECTION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEA RS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB- SECTION (1) OF SECTION 153A SAYS 75 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THAT SUCH PROCEEDINGS 'SHALL ABATE'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSE SSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YE AR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF AFFA IRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELE VANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION O F THE TOTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB-SECTION (1) O F SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE A SSESSEE WHICH ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISIT ION 'SHALL ABATE'. ONCE THOSE PROCEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE A SSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLARED IN THE RETUR NS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. THE POSITION THUS EMERGING IS THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INC OME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDIN GS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS A RE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS O R REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVI SIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERM INE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTI ON 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, W HERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT E SCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDING S FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PEN DING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED ASSESSMENTS HAVE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCO ME DETERMINED IN THE ORIGINAL ASSESSMENT AND ASSESSED AS THE TOTAL INCOME. THE OB SERVATIONS MADE IN THE JUDGMENT CONTRASTING THE PROVISIONS OF DETERMINATION OF UNDI SCLOSED INCOME UNDER CHAPTER XIVB WITH DETERMINATION OF TOTAL INCOME UNDER SECTIONS 1 53A TO 153C OF THE ACT HAVE TO BE READ IN THE CONTEXT OF SECOND PROVISO ONLY, WHICH D EALS WITH THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE FURTHER OB SERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDINGS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE OF THE FACT 76 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, THE NOTICE AND CONSEQUENTIAL ASSESSMENT UNDER SECTION 153A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTER PRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISIONS OF SECTIONS 13 9 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING AS SESSMENT) AND 263 (REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN R ESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'AS SESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONS TRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'A SSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR C OMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON TH E DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSAR ILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS. THUS, THE HON'BLE HIGH COURT HAS HELD THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. THE L D. CIT(A) HAS DECIDED THIS ISSUE IN PARA 7 TO 7.7 AS UNDER: 7. I HAVE PERUSED THE ORDER OF THE AO AND SUBMISSI ONS MADE IN THIS REGARD. I HAVE ALSO GONE THROUGH THE VARIOUS CASE LAWS CITED BY THE AR. FOR THE SAKE OF CONVENIENCE THE LEGAL GROUND IS ADJUDICATED 1 ST AS IT GOES TO THE ROOT OF THE MATTER. 7.2 IN SUPPORT OF THE ADDITIONAL GROUND TAKEN/ CONT ENTION RAISED DETAILED WRITTEN SUBMISSION ARE MADE WHEREIN THE APPELLANT H AS CHALLENGED THE LEGAL VALIDITY OF THE ADDITION MADE IN THE ORDER FRAMED U /S 143(3)/153A. IT IS SUBMITTED THAT SUCH ADDITIONS CANNOT BE MADE AS THEY ARE NOT RELATABLE TO ANY INCRIMINATING SEIZED MATERIAL FOUND DURING THE COUR SE OF SEARCH. THE APPELLANT HAS CITED FOLLOWING JUDGMENTS IN SUPPORT OF THE CON TENTION TAKEN: 1) JAY STEEL LIMITED VS. ACIT (88 DTR 1) [RAJ HC] 2) KABUL CHAWLA VS. ACIT 380 ITR 573 (DEL HC) 77 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 3) CONTINENTAL WAREHOUSING CORPORATION 374 ITR 645 ETC. 7.3 I HAVE PERUSED THE ORDER OF THE AO AND SUBMISSI ONS MADE IN THIS REGARD. PERUSAL OF ASSESSMENT ORDER PASSED U/S 143(3)/153A SHOWS THAT ALL THE ADDITIONS MADE BY THE AO ARE NOT RELATABLE TO ANY SEIZED MATE RIAL. I ALSO FIND THAT FOR THE A.YR THE ASSESSMENT STOOD COMPLETED ON THE DATE OF SEARCH. 7.4 THE ISSUE OF ADDITIONS MADE BY THE AO IN THE AS SESSMENT U/S 143(3)/153A WITHOUT ANY REFERENCE TO INCRIMINATING SEIZED MATER IAL WAS CONSIDERED BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL LIMITED VS. ACIT (88 DTR 1). THE HONBLE COURT WAS OF THE VIEW IN CASE OF COMPLE TED ASSESSMENTS NO ADDITION CAN BE MADE IF NO INCRIMINA TING SEIZED MATERIAL IS FOUND DURING THE COURSE OF SEARCH. THE RELEVANT OBSERVATI ON OF THE JUDGMENT IS REPRODUCED BELOW: 'IN THE FIRM OPINION OF THIS COURT FROM A PLAIN REA DING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIG INAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INC OME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMI NATING MATERIAL AND JUST IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMEN T CAN BE REITERATED AND THE ABATED ASSESSMENT OR 13 D.B. INCOME TAX APPEAL NO.53/2011 JAI STEEL (INDIA), JODHPUR VS. ASSISTANT COMMISSIONER OF INCOME TAX, JODHPUR (ALON G WITH OTHER 16 SIMILAR MATTERS) REASSESSMENT CAN BE MADE.' 7.5 SIMILAR VIEW POINT WAS EXPRESSED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA VS. ACIT 380 ITR 573 (DEL HC). THE RELEVANT OBSERVATION OF HONBLE COURT COULD BE SEEN IN PARA 37 & 38 OF ORDER, SAME IS REPRODUCED BELOW: PARA 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 AFOREM ENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSO N SEARCHED REQUIRING HIM TO FILE 78 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVI OUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. 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 TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTION ED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER 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 ADDITI ONS 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 WHICH CAN BE RELA TED 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 ASSESS MENT HAS TO BE MADE UNDER THIS SECTION 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 REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETE D ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES 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 O N 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 REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005 -06 AND 2006-07.0N THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED . SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 79 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 7.6 THE ISSUE OF ADDITIONS MADE BY THE AO WHILE FRA MING THE ASSESSMENT U/S 143(3)/153A, IF NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH WAS CONSIDERED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF SOUMYA CONSTRUCTION PL VS CIT 387 ITR 529. IN ITS ORDER DATED 14/03/201 6 HONBLE COURT HAS CATEGORICALLY STATED THAT, IN CASES OF COMPLETED AS SESSMENT, IF NO INCRIMINATING MATERIAL IS FOUND THEN NO ADDITIONS CAN BE MADE IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT. THE RELEVANT PARA NO. 18 8S 19 OF THE COURT ORDER CAN BE REFERRED TO. SIMILAR VIEW OF ALSO TAKEN IN THE FOLLOWING JUDGME NTS, INCLUDING BY HON'BLE JAIPUR ITAT HON'BLE ITAT JAIPUR IN MANY CASES: A. CONTINENTAL WAREHOUSING CORPORATION 374 ITR 645 B. PCIT VS. MEETA GUTGUTIA 152 DTR 153 C. VIJAY KUMAR D AGARWAL V/S DCIT IN IT(SS)A NOS. 153,154,155 & 156/AHD/2012 D. RATAN KUMAR SHARMA VS. DCIT ITA 797 & 798 /JAIP UR/2014 E. VIKRAM GOYAL VS. DCIT ITA 174/JAIPUR/2017 ETC F. JADAU JEWELLERS & MANUFACTURER PL VS ACIT (686/ JAIPUR/2014) G. PRATEEK KOTHARI VS. ACIT (312/JAIPUR/2015. 7.7 CONSIDERING THE ABOVE I AM OF THE VIEW THAT AS THE ADDITIONS MADE BY AO ARE WITHOUT ANY REFERENCE TO THE SEIZED MATERIAL, T HEY ARE NOT LEGALLY TENABLE. THE SAME ARE THEREFORE DIRECTED TO BE DELETED. THE LEGA L GROUND TAKEN BY THE APPELLANT IS THUS ALLOWED. THE APPELLANT SUCCEEDS O N LEGAL GROUND. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AS WEL L AS IN THE LIGHT OF BINDING PRECEDENTS AS DISCUSSED IN THE FORGOING PAR AGRAPHS, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 80 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMS TANCES OF THE CASE AS WELL AS THE BINDING PRECEDENTS ON THIS ISSUE, WE DO NOT FIND AN Y ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) QUA THIS ISSUE OF NO ADDIT ION CAN BE MADE IN THE ABSENCE OF INCRIMINATING MATERIAL SO FAR AS THE ASSESSMENT UND ER SECTION 153A IN RESPECT OF THE ASSESSMENT YEARS ALREADY COMPLETED BEFORE THE DATE OF SEARCH AND NOT ABAITED BY VIRTUE OF SEARCH. 5.2. AS REGARDS THE ADDITION MADE BY THE AO IN RESP ECT OF THE ASSESSMENT YEARS 2014-15 TO 2016-17, AS WE HAVE DISCUSSED IN THE FOR EGOING PART OF THIS ORDER THAT THE ASSESSMENT ORDER IS BASED ON THE STATEMENT OF THE A SSESSEE RECORDED UNDER SECTION 132(4) AS WELL AS THE STATEMENTS RECORDED BY THE IN VESTIGATION WING KOLKATA OF THIRD PARTY. THE ASSESSEE RETRACTED THE STATEMENTS GIVEN UNDER SECTION 132(4) AS WELL AS UNDER SECTION 131 OF THE IT ACT DURING THE COURSE O F SEARCH AND SEIZURE ACTION AND POST SEARCH ENQUIRY RESPECTIVELY. IT IS PERTINENT TO NOT E THAT IN THE STATEMENTS RECORDED UNDER SECTION 132(4) AS WELL AS UNDER SECTION 131 O F THE ACT THERE IS NO REFERENCE MADE TO ANY INCRIMINATING MATERIAL REVEALING THE NATURE OF TRANSACTION BEING ACCOMMODATION ENTRY. THE AVERMENT OF THE STATEMENTS RECORDED U NDER SECTION 132(4) AS WELL AS UNDER SECTION 131 IS A SIMPLICITOR DISCLOSURE AND S URRENDER OF INCOME BY THE ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN. THE ASSESSE E WHILE RETRACTING FROM HIS STATEMENT, HAS EXPLAINED THE REASONS AS TO WHY THE ASSESSEE HAS ADMITTED AND SURRENDERED THE INCOME ON ACCOUNT OF LONG TERM CAPI TAL GAIN ON PURCHASE AND SALE OF SHARES AS ACCOMMODATION ENTRY. THE ASSESSEE IS EN GAGED IN THE SHARE TRANSACTIONS SINCE LONG. THE TRANSACTIONS OF PURCHASE AND SALE OF SHARES WERE NEVER DOUBTED BY 81 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE AO IN THE PRECEDING ASSESSMENT YEARS. THE FAMI LY CONCERN OF THE ASSESSEE M/S. MOTISONS SHARES PVT. LTD. IS ALSO DOING SHARE BUSIN ESS. THE COMPANY IS REGISTERED IN SEBI AND MEMBER OF NATIONAL STOCK EXCHANGE AND BOMB AY STOCK EXCHANGE. THE COMPANY IS DEALING IN SHARES ON BROKERAGE BASIS. THERE IS NO DISPUTE THAT AT THE TIME OF EARLIER SEARCH AND SEIZURE ACTION CARRIED ON 31 ST OCTOBER, 2012, THE BUSINESS PREMISES OF THE ASSESSEE GROUP AT SB-110, MOTISONS TOWER, LAL KOTHI, TONK ROAD, JAIPUR WAS PUT UNDER PROHIBATORY ORDER AND SEALED FOR 3 DAYS FROM 03.11.2012 TO 05.11.2012. THE SAID BUSINESS PREMISES HOUSES A NUM BER OF GROUP CONCERNS OF THE ASSESSEE WHICH ARE FUNCTIONING FROM THE VARIOUS FLO ORS OF THE MOTISONS TOWER INCLUDING M/S. MOTISONS JEWELLERS LTD, M/S. MOTISONS SHARE BR OKERS P. LTD. AND M/S. MOTISONS COMMODITIES PVT. LTD. ETC. THE ASSESSEE IS HAVING A BAD EXPERIENCE OF CLOSURE OF ENTIRE BUSINESS ACTIVITIES INCLUDING THE TERMINAL CARRYING OUT THE SHARE TRANSACTIONS AS WELL AS COMMODITY TRANSACTIONS ON BEHALF OF THE CLIENTS AND DUE TO LOCKDOWN AND SUSPENSION OF THE FUNCTIONS THE ASSESSEE SUFFERED HUGE FINANCIAL LOSS AS WELL AS DAMAGES OF IMAGE AND GOODWILL. TO AVOID THE REPETITION OF THE SAID BAD EXPERIENCE, THE ASSESSEE HAD NO OTHER OPTION BUT TO ACCEPT THE DICTUM OF THE SEA RCH PARTY. IT IS ALSO NOT IN DISPUTE THAT THE FACTORY BUILDING LOCATED AT SITAPURA INDUS TRIAL AREA WAS PUT UNDER PROHIBATORY ORDER BY THE SEARCH PARTY DURING THE SEARCH AND SEI ZURE ACTION CARRIED ON 28 TH JULY, 2015 AND THE SAID ORDE PO ORDER WAS VACATED ONLY ON 30.07.2015. THE BUSINESS PREMISES WAS ALSO REMAINED UNDER LOCKDOWN FOR THE E NTIRE FORENOON OF 22 ND JULY, 2015, WHICH HAS REMINDED THE ASSESSEE THE PA ST BAD EXPERIENCE DURING THE LAST SEARCH AND SEIZURE ACTION. THEREFORE, ALL THE SE FACTS AND CIRCUMSTANCES AS 82 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. EXPLAINED BY THE ASSESSEE CLEARLY SHOW THAT THE ASS ESSEE WAS UNDER TREMENDOUS PRESSURE AND FEAR OF FACING THE GRAVE CONSEQUENCES IF NOT AGREED TO THE DEMAND OF THE SEARCH PARTY FOR SURRENDER AND DISCLOSURE OF INCOME . THEREFORE, THE ASSESSEE WAS PUT UNDER GRAVE AND PRECARIOUS SITUATION TO SUFFER UNLI MITED AND IRREPARABLE LOSSES IN THE BUSINESSES INCLUDING THE BUSINESS OF MOTISONS SHARE S BROKERS PVT. LTD. UNDER WHICH THE ASSESSEE WAS DEALING IN THE SHARES AS REGISTERED BR OKER AND MEMBER OF THE NATIONAL STOCK EXCHANGE AND BOMBAY STOCK EXCHANGE. SINCE TH E TERMINAL CARRYING OUT THE SHARE TRANSACTIONS WAS NON-FUNCTIONAL ON 22.07.2015 FOR F EW HOURS, THEREFORE, THE ASSESSEE WAS AT THE RISK OF SUFFERING UNLIMITED LOSSES ON AC COUNT OF DERIVATIVE TRANSACTIONS (FUTURE AND OPTION) FOR WANT OF TIMELY SQUARING OF THE TRANSACTIONS. THESE CIRCUMSTANCES WERE SO GRAVE THAT NOBODY COULD AFFOR D TO OPPOSE THE DEMAND OF THE INVESTIGATION WING TO SURRENDER ITS INCOME AND, THE REFORE, THE ASSESSEE WAS BOUND TO SUCCUMB TO PRESSURE AND COERCION DUE TO THE CIRCUMS TANCES CREATED BY SEARCH PARTY AND TO AVOID THE REPEATITION OF SEIZURE OF THE ENTI RE BUSINESS PREMISES AS WELL AS THE FACTORY PREMISES OF THE GROUP. THE ASSESSEE HAS REI TERATED HIS STAND IN THE STATEMENT RECORDED BY THE AO UNDER SECTION 131 OF THE IT ACT. IT IS PERTINENT TO NOTE THAT THE AO THOUGH MADE THE REFERENCE OF VARIOUS STATEMENTS REC ORDED BY THE INVESTIGATION WING KOLKATA OF THIRD PARTY BUT THE AO HAS NOT EVEN REFE RRED OR CONFRONTED ANY OF THOSE STATEMENTS TO THE ASSESSEE DURING THE ASSESSMENT PR OCEEDINGS AND PARTICULARLY WHILE RECORDING THE STATEMENT OF THE ASSESSEE UNDER SECTI ON 131 OF THE IT ACT. THEREFORE, IT IS CLEAR THAT THE AO WAS NOT HAVING IN HIS POSSESSI ON ANY INCRIMINATING MATERIAL EXCEPT THE STATEMENTS OF THIRD PARTY RECORDED BY THE INVES TIGATION WING KOLKATA. EVEN IN 83 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THOSE STATEMENTS THERE WAS NO ALLEGATION REGARDING PARTICULAR TRANSACTION OF PURCHASE AND SALE OF SHARES BY THE ASSESSEE BUT THERE WERE G ENERAL AVERMENTS MADE BY THOSE PERSONS REGARDING THE MODUS OPERANDI OF PROVIDING A CCOMMODATION ENTRIES. WITHOUT GOING INTO THE CONTROVERSY OF THE CORRECTNESS AND E VIDENTIARY VALUE OF THOSE STATEMENTS WHEN NOTHING HAS BEEN BROUGHT ON RECORD BY THE AO T O SHOW THAT ANY OF THE ACT OR TRANSACTION CARRIED OUT BY THE ASSESSEE IS FALLING UNDER THE MODUS OPERANDI AS EXPLAINED BY THOSE PERSONS FOUND INVOLVED IN PROVIDING ACCOMM ODATION ENTRIES, THOSE STATEMENTS CANNOT BE REGARDED AS AN EVIDENCE OR INCRIMINATING MATERIAL AGAINST THE ASSESSEE AND PARTICULARLY IN RESPECT OF THE TRANSACTIONS WHICH A RE DULY RECORDED IN THE BOOKS OF ACCOUNT AND SUPPORTED BY EVIDENCE. THE STATEMENT R ECORDED UNDER SECTION 132(4) IN THE ABSENCE OF ANY MATERIAL MUCH LESS THE INCRIMINA TING MATERIAL HAS NO EVIDENTIARY VALUE AS HELD BY THE HON'BLE DELHI HIGH COURT IN CA SE OF CIT VS. HARJEEV AGARWAL, 290 CTR 263 (DEL.) AS WELL AS IN THE CASE OF PCIT VS. B EST INFRASTRUCTURE INDIA PVT. LTD. 84 TAXMANN.COM 287 (DEL.). AN IDENTICAL ISSUE HAS BEE N CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF KOTA DALL MILLS V S. DCIT (SUPRA) IN PARA 11 AS UNDER :- 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. FOR THE ASSESSMENT YEAR 2010-1 1, THE ASSESSEE HAS CHALLENGED THE ADDITION SUSTAINED BY LD. CIT (A) IN RESPECT OF UNSECURED LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. THE OTH ER ADDITIONS MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS AS WELL AS PAR TNERS CAPITAL FOR THE ASSESSMENT YEAR 2010-11 WERE DELETED BY THE LD. CIT (A) ON THE GROUND THAT THE AO WAS NOT HAVING IN HIS POSSESSION EVEN T HE STATEMENT OF THE CONCERNED PERSONS IN SUPPORT OF HIS FINDING THAT TH E ALLEGED LOAN AND 84 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PARTNERS CAPITAL IS NOTHING BUT BOGUS ACCOMMODATIO N ENTRIES. THEREFORE, THE REVENUE HAS CHALLENGED THAT PART OF THE ORDER I N THE CROSS APPEAL. THE LD. A/R OF THE ASSESSEE HAS POINTED OUT THAT FO R THE ASSESSMENT YEAR 2010-11 THERE WAS NO LOAN FROM THE COMPANY CONTROLL ED BY SHRI ANAND SHARMA, M/S. ROYAL CRYSTAL DEALERS PVT. LTD. BUT TH E ASSESSEE TOOK THE LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. WHICH IS NOT THE COMPANY OWNED OR CONTROLLED BY SHRI ANAND SHARMA. THE LD. CIT (A) HAS SUSTAINED THE ADDITION IN RESPECT OF LOAN FROM M/S. JALSAGAR COMMERCE PVT. LTD. IN PARA 5.1 TO 5.12 AS UNDER :- XXXXXXXXX XXXXXXXXXXX XXXXXXXXX XXXXXXXX THUS THE ADDITION WAS CONFIRMED BASED ON THE REPORT OF THE DDIT (INV.) KOLKATA. WE FIND THAT THE REPORT OF THE DDIT (INV. ) KOLKATA IS ALSO BASED ON THE STATEMENTS OF VARIOUS PERSONS RECORDED DURIN G THEIR INVESTIGATION AND THE STATEMENT OF SHRI ANAND SHARMA WAS ALSO SEN T ALONG WITH THE REPORT OF THE AO. THE LD. CIT (A) HAS CONFIRMED TH E ADDITION BECAUSE OF THE REASON THAT THE STATEMENT OF SHRI ANAND SHARMA WAS VERY MUCH IN THE POSSESSION OF THE AO WHO HAS ADMITTED IN HIS STATEM ENT THAT M/S. JALSAGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTI VITY OF PROVIDING ACCOMMODATION ENTRY. HOWEVER, WE FIND THAT M/S. JA LSAGAR COMMERCE PVT. LTD IS NOT MANAGED OR CONTROLLED BY SHRI ANAND SHARMA, RATHER THE COMPANY M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS ST ATED TO HAVE BEEN OWNED BY SHRI ANAND SHARMA AND IN HIS STATEMENT DAT ED 6 TH FEBRUARY, 2014 SHRI ANAND SHARMA HAS STATED TO HAVE BEEN PROV IDING ENTRIES FROM M/S. ROYAL CRYSTAL DEALERS PVT. LTD. TO M/S. JALSAG AR COMMERCE PVT. LTD. THEREFORE, THERE IS NO ALLEGATION OR ANY ADMISSION IN THE STATEMENT OF SHRI ANAND SHARMA THAT HE HAS PROVIDED BOGUS LOAN ENTRY TO THE ASSESSEE OR ANY GROUP CONCERNS OF THE ASSESSEE. SINCE THE NAME OF M/S. JALSAGAR 85 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. COMMERCE WAS CREPTED IN HIS STATEMENT, THE AO HAS P RESUMED THAT THE LOAN PROVIDED BY M/S. JALSAGAR COMMERCE PVT LTD IS NOTHING BUT THE BOGUS ACCOMMODATION ENTRY PROVIDED BY SHRI ANAND SHARMA T HROUGH M/S. ROYAL CRYSTAL DEALERS PVT. LTD. THE AO HAS TRIED TO ESTA BLISH THE NEXUS OF THE LOAN RECEIVED BY THE ASSESSEE THROUGH THE STATEMENT OF SHRI ANAND SHARMA WHERE HE HAS PURPORTED TO HAVE PROVIDED THE ALLEGED ENTRY. SINCE THERE IS NO DIRECT ALLEGATION OR ADMISSION OF PROVIDING LOAN BY SHRI ANAND SHARMA TO THE ASSESSEE THROUGH M/S.ROYAL CRYS TAL DEALERS PVT. LTD., THEN EVEN IF THERE IS A POSSIBILITY OF BOGUS ACCOMMODATION ENTRY ROUTED THROUGH ANOTHER INTERMEDIARY COMPANY M/S.JAL SAGAR COMMERCE PVT. LTD., IT REQUIRES A DEFINITE LINK OF THE TRANS ACTIONS FROM M/S.ROYAL CRYSTAL DEALERS PVT. LTD. TO M/S.JALSAGAR COMMERCE PVT. LTD. AND THEN THE LOAN TO THE ASSESSEE. ONCE THE CHAIN OF TRANSACTIO NS AND FLOW OF MONEY FROM ONE ENTITY TO ANOTHER ENTITY AND FINALLY TO TH E ASSESSEE HAS NOT BEEN ESTABLISHED, THEN THE ADDITION MADE MERELY ON SUSPI CION, HOW SO STRONG IT MAY BE, IS NOT SUSTAINABLE. ON THE CONTRARY, WHEN THE ASSESSEE PRODUCED ALL THE RELEVANT RECORD WHICH CONTAINS THEIR FINANC IAL STATEMENTS, BANK ACCOUNTS STATEMENT OF LOAN CREDITOR, RETURN OF INCO ME, ASSESSMENT ORDERS FRAMED UNDER SECTION 143(3), CONFIRMATION OF THE LO AN CREDITOR, THEN A PROPER EXAMINATION COULD HAVE VERY WELL ESTABLISHED THE LINK, IF ANY, IN PROVIDING THE ACCOMMODATION ENTRY FROM ONE ENTITY T O ANOTHER AND FINALLY TO THE ASSESSEE. HOWEVER, NO SUCH LINK WAS FOUND I N THE DOCUMENTS AND FINANCIAL STATEMENTS OF THESE COMPANIES, RATHER IN THE BANK ACCOUNT STATEMENT OF LOAN CREDITOR M/S. JALSAGAR COMMERCE P VT. LTD. THERE WAS NO SUSPICIOUS TRANSACTION OF RECEIVING ANY ENTRY OR AN Y DEPOSIT OF AN EQUAL AMOUNT PRIOR TO GIVING THE LOAN TO THE ASSESSEE. T HE ASSESSEE HAS PAID INTEREST TO THE CREDITOR, WHICH WAS DULY ACCEPTED B Y THE AO AS BUSINESS EXPENDITURE. UNDISPUTEDLY, THE ASSESSEE HAS PRODUC ED THE INCOME-TAX RECORD OF THE LOAN CREDITOR, BANK STATEMENT, FINANC IAL STATEMENTS INCLUDING 86 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. BALANCE SHEET, COPY OF ROC MASTER DATA SHOWING THE STATUS OF LOAN CREDITOR COMPANY AS ACTIVE, CONFIRMATION OF LOAN GIVEN TO THE ASSESSEE. FURTHER, THE AO ISSUED SUMMONS AND ALSO GOT THE SUM MONS SERVED THROUGH DDIT KOLKATA UNDER SECTION 131 OF THE IT AC T WHICH WERE DULY RESPONDED BY THE LOAN CREDITOR. EXCEPT THE STATEMEN T OF SHRI ANAND SHARMA AND THE REPORT OF THE INVESTIGATION WING KOL KATA, THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL TO CONTROVERT OR DISPROVE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE LOAN CREDITOR WAS ASSESSED TO TAX AND THE AO COMPLETED THE ASSESSMENT UNDER SECTION 143 (3) FOR VARIOUS ASSESS MENT YEARS WHICH ARE RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATIO N. THE AO IN CASE OF LOAN CREDITOR HAS NOT DISTURBED THE TRANSACTIONS OF LOAN GIVEN BY THIS COMPANY TO THE ASSESSEE. FROM THE FINANCIAL STAT EMENTS OF THE LOAN CREDITOR IT IS APPARENT THAT THE LOAN CREDITOR WAS HAVING SUFFICIENT FUNDS TO ADVANCE THE LOAN AMOUNT TO THE ASSESSEE AND ONCE TH E SAID FINANCIAL STATEMENTS WERE NOT DISTURBED, THEN THE CREDITWORTH INESS OF THE LOAN CREDITOR CANNOT BE DOUBTED WHEN IT WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE IT ACT. WE FURT HER NOTE THAT THE AO INSISTED THE ASSESSEE TO PRODUCE THE DIRECTORS OF T HE LOAN PROVIDER COMPANY. THE ASSESEE PRODUCED THE AFFIDAVIT, AND T HE NOTICES ISSUED BY THE AO UNDER SECTION 131 AND 133(6) OF THE ACT WERE DULY COMPLIED WITH BY THE CREDITOR. THE STATEMENT OF THE DIRECTOR OF M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS ALSO RECORDED BY THE AO WHERE IN THE DIRECTOR HAS CONFIRMED THE TRANSACTION OF LOAN. THERE ARE VARIO US REPORTS OF THE DDIT KOLKATA WHICH ARE PLACED AT PAGES 406 TO 422 OF THE PAPER BOOK. WE FIND THAT ALL THESE REPORTS ARE BASED ON THE STATEMENTS RECORDED DURING THE INVESTIGATION BUT NO DOCUMENTARY EVIDENCE WAS EITHE R GATHERED OR HAS BEEN REFERRED IN THESE REPORTS. THEREFORE, EVEN IF THESE REPORTS ARE TO BE TAKEN INTO CONSIDERATION, THESE ARE NOTHING BUT NAR RATION OF THE 87 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. STATEMENTS OF VARIOUS PERSONS TAKEN DURING THE INVE STIGATION. IT IS WELL SETTLED PRINCIPLE AS WELL AS THE DIRECTIONS OF THE CBDT ISSUED UNDER THE CIRCULARS THAT DURING THE COURSE OF INVESTIGATION, THE DEPARTMENT SHOULD CONCENTRATE AND FOCUS ON COLLECTING DOCUMENTARY EVI DENCE DISCLOSING UNDISCLOSED INCOME INSTEAD OF OBTAINING THE STATEME NT AND THEN SUPPORT OF THEIR CLAIM MERELY ON THE BASIS OF THE STATEMENT . THEREFORE, THE STATEMENTS RECORDED BY THE DDIT KOLKATA ARE ALSO NO T BASED ON ANY DOCUMENTARY EVIDENCE SO AS TO HAVE AN EVIDENTIARY V ALUE FOR SUSTAINING THE ADDITIONS MADE BY THE AO. THE ENTIRE REPORT OF THE INVESTIGATION WING IS BASED ON STATEMENTS RECORDED DURING SURVEY AND SEARCH. ONCE THE ASSESSEE HAS PRODUCED THE DOCUMENTARY EVIDENCE AND PARTICULARLY THE FINANCIAL STATEMENTS OF THE LOAN CREDITORS, THEIR B ANK ACCOUNT STATEMENT, THEN IN THE ABSENCE OF ANY DISCREPANCY OR FAULT IN THESE FINANCIAL STATEMENTS OR IN THE BANK ACCOUNT STATEMENT TO REFL ECT THAT THE TRANSACTIONS IN QUESTION ARE NOTHING BUT BOGUS ACCO MMODATION ENTRIES, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AS I T IS MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND NOT ON ANY TANGIBLE MATERIAL DISCLOSING THE NON-GENUINENESS OF THE TRANSACTIONS. THE AO HA S NOT DISPUTED THE TRANSACTIONS ROUTED THROUGH BANKING CHANNEL HAVING SUFFICIENT FUNDS WHICH IS ALSO SUPPORTED BY THE FINANCIAL STATEMENTS AND F URTHER THE ASSESSMENTS OF THE LOAN CREDITOR WERE COMPLETED UNDER SECTION 1 43(3). THE DETAILS OF LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD., INTERESTS CREDITED/PAID AND REPAYMENT OF LOAN AMOUNT AS WELL AS CLOSING BALANCE ARE AS UNDER :- 88 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. NAME OF COMPANY AY OPENING BALANCE LOAN TAKEN DURING THE YEAR INTEREST CREDITED IN LOAN A/C DURING THE YEAR INTEREST CREDITED IN INTEREST PAID /PAYABLE A/C LOAN REPAYMENT/ TDS/TRANSFER IN PARTNER CAPITAL DURING THE YEAR CLOSING BALANCE JALSAGAR COMMERCE PRIVATE LTD 10 - 11 41 , 298 34 , 70 , 40 , 000 13 , 96 , 176 12 , 56 , 558 34 , 21 , 15 , 916 51 , 05 , 000 JALSAGAR COMMERCE PRIVATE LTD 11 - 12 51 , 05 , 000 77 , 18 , 70 , 000 16 , 71 , 599 15 , 04 , 439 77 , 18 , 37 , 160 53 , 05 , 000 JALSAGAR COMMERCE PRIVATE LTD 12 - 13 53 , 05 , 000 78 , 95 , 00 , 000 1 , 07 , 08 , 434 96 , 37 , 591 31 , 72 , 80 , 655 47 , 85 , 95 , 188 JALSAGAR COMMERCE PRIVATE LTD 13 - 14 47 , 85 , 95 , 188 2 , 76 , 31 , 50 , 000 0 0 2 , 97 , 53 , 40 , 000 26 , 64 , 05 , 188 JALSAGAR COMMERCE PRIVATE LTD 14 - 15 26 , 64 , 05 , 188 97 , 34 , 50 , 000 0 0 1 , 24 , 03 , 55 , 188 ( 5 , 00 , 000 ) JALSAGAR COMMERCE PRIVATE LTD 15 - 16 0 1 , 34 , 89 , 00 , 000 49 , 00 , 600 44 , 10 , 540 1 , 34 , 93 , 90 , 060 0 JALSAGAR COMMERCE PRIVATE LTD 16 - 17 0 87 , 11 , 00 , 000 1 , 67 , 23 , 178 1 , 50 , 50 , 86 0 87 , 27 , 72 , 318 0 ALL THESE DETAILS WERE BEFORE THE AO AS ALL THESE A SSESSMENT YEARS WERE PASSED BY THE AO PURSUANT TO THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE IT ACT. THUS IT IS CLEAR THAT FOR THE A SSESSMENT YEAR 2015-16 THERE WAS NIL BALANCE ON ACCOUNT OF LOAN TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD. AND THE ENTIRE LOAN WAS ALREADY REPAID BY THE ASSESSEE. WE FURTHER NOTE THAT IT IS NOT THE CASE OF REPAYMENT OF LOAN AFTER THE SEARCH ACTION ON 2 ND JULY, 2015 BUT THERE IS A REGULAR REPAYMENT OF LOAN FOR EACH YEAR AS IT IS EVIDENT FROM THE DET AILS REPRODUCED ABOVE. THEREFORE, THE TRANSACTIONS OF TAKING LOAN AND REPA YMENT CANNOT BE TREATED AS BOGUS ONCE THE ASSESSEE HAS BEEN REGULAR LY REPAYING THE LOAN AMOUNT AND SMALL BALANCE WAS THERE AT THE END OF TH E YEAR. ONCE THERE WAS NO BALANCE AT THE END OF THE YEAR ON THE LOAN A CCOUNT, THEN THE ADDITION CANNOT BE MADE BY TREATING THE LOAN TAKEN AND REPAID AS BOGUS TRANSACTION. APART FROM THESE FACTS, THE ASSESSEE HAS ALSO MADE THE PAYMENT OF INTEREST WHICH WAS ALSO SUBJECTED TO TDS . THIS SHOWS THE GENUINENESS OF THE TRANSACTIONS AND ALL THESE TRANS ACTIONS HAVE TAKEN PLACE PRIOR TO THE DATE OF SEARCH AND DULY RECORDED IN THE BOOKS OF 89 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACCOUNTS AND ALSO SUBJECTED TO ASSESSMENT UNDER SEC TION 143(3) FOR SOME OF THE ASSESSMENT YEARS. THEREFORE, EVEN AS PER TH E EVIDENCE PRODUCED BY THE ASSESSEE, THE ALLEGED SUSPICION OF THE AO WA S GOT DISPELLED AND IN THE ABSENCE OF ANY CONTRARY EVIDENCE EXCEPT THE STA TEMENT WHICH IS NOT EVEN A CONCLUSIVE PROOF OF TRANSACTION OF BOGUS ENT RY TO THE ASSESSEE, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. 11.1. EVEN OTHERWISE, THE ASSESSMENT ORDER IS SOLEL Y BASED ON THE REPORT OF THE INVESTIGATION WING KOLKATA WHICH IN TURN IS NOTHING BUT THE NARRATION OF THE STATEMENTS RECORDED DURING THE INV ESTIGATION AND THE AO WAS HAVING IN POSSESSION THE STATEMENT OF ONLY SHRI ANAND SHARMA. THEREFORE, ALL THESE PROCEEDINGS CONDUCTED BY THE I NVESTIGATION WING KOLKATA WERE AT THE BACK OF THE ASSESSEE AND HENCE THE STATEMENT WHICH IS THE FOUNDATION OF THE REPORT OF THE INVESTIGATIO N WING KOLKATA AS WELL AS THE ASSESSMENT ORDER CANNOT BE ACCEPTED IN THE ABSE NCE OF GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. WE FIND THAT THE ASSESSEE HAS INSISTED FOR CROSS EXAMINATION DURING THE ASSESSMENT PROCEEDINGS AND FURTHER DURING THE APPELLATE PROCEE DINGS. THE LD.CIT(A) EVEN CALLED FOR A REMAND REPORT AND DIRECTED THE AO TO ALLOW CROSS EXAMINATION TO THE ASSESSEE. HOWEVER, THE AO HAS EX PRESSED HIS INABILITY TO ALLOW THE ASSESSEE CROSS EXAMINATION OF THE WITN ESSES DUE TO THE REASON THAT THE WITNESSES BELONG TO KOLKATA AND IT IS NOT POSSIBLE FOR AO TO MAKE SUCH ARRANGEMENT. THE LD. CIT(A) HAS FINALL Y DENIED THE CROSS EXAMINATION TO THE ASSESSEE BY GIVING HIS FINDING I N PARA 5.11 AT PAGE 188 ALREADY REPRODUCED IN THE EARLIER PART OF THIS ORDE R AND, THEREFORE, THE ONLY REASON FOR DENIAL OF CROSS EXAMINATION BY THE LD.CIT(A) IS THAT THE STATEMENTS ARE SO VOCAL AND UNDENIABLE THAT CROSS E XAMINATION OF SUCH ACCOMMODATION ENTRY PROVIDED BY THOUSANDS OF BENEFI CIARIES ACROSS INDIA IS NEITHER PRACTICABLE NOR VIABLE AND THEREFORE UNC ALLED FOR. WE FIND THAT 90 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE ASSESSEE HAS DEMANDED THE CROSS EXAMINATION ONL Y IN RESPECT OF THE ALLEGED TRANSACTIONS OF LOANS AND NOT FOR THE ENTIR E BUSINESS OF THE ENTRY PROVIDERS PROVIDING THE BOGUS ENTRIES. UNDISPUTEDLY , THE STATEMENT OF SHRI ANAND SHARMA WAS RECORDED BY THE INVESTIGATION WING KOLKATA AT THE BACK OF THE ASSESSEE, EVEN THE PROCEEDINGS BY THE I NVESTIGATION WERE CONDUCTED AT THE BACK OF THE ASSESSEE, THEREFORE, T HE SAID STATEMENT OF SHRI ANAND SHARMA CANNOT BE THE SOLE BASIS OF ASSES SMENT WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE . THE HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTR IES VS. CCE (SUPRA) WHILE DEALING WITH THE ISSUE OF VIOLATION OF PRINCI PLES OF NATURAL JUSTICE FOR NOT PROVIDING THE OPPORTUNITY OF CROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED ON BY THE AO HAS HELD IN PAR A 6 TO 9 AS UNDER :- 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CROSS -EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW WHICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNT ED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEMENTS GIVEN BY THE AFORESAID TW O WITNESSES. EVEN WHEN THE ASSESSEE DISPUTED THE CORRECTNESS OF THE S TATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDICATING AUTHORITY DID NO T GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID P LEA IS NOT EVEN DEALT WITH BY THE ADJUDICATING AUTHORITY. AS FAR AS THE T RIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTE NABLE. THE TRIBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DE ALERS COULD NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSS ESSION OF THE APPELLANT THEMSELVES TO EXPLAIN AS TO WHY THEIR EX- FACTORY PRICES REMAIN STATIC. IT WAS NOT FOR THE TRIBUNAL TO HAVE GUESS W ORK AS TO FOR WHAT PURPOSES THE APPELLANT WANTED TO CROSS-EXAMINE THOS E DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FROM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DISCREDIT THEIR 91 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS- EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPON THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OFLEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN F ACT, SOLD TO THE SAID DEALERS.WITNESSES AT THE PRICE WHICH IS MENTIONED I N THE PRICE LIST ITSELF COULD BE THE SUBJECT-MATTER OF CROSS-EXAMINATION. T HEREFORE, IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT- MATTER OF THE CROSS-EXAMINATION AND MAKE THE REMARK S AS MENTIONED ABOVE. WE MAY ALSO POINT OUT THAT ON AN EARLIER OCC ASION WHEN THE MATTER CAME UP BEFORE THIS COURT IN CCE V. ANDAMAN TIMBER INDUSTRIES LTD., ORDER DATED 17.3.2005 WAWS PASSED REMITTING THE CAS E BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL O N MERITS GIVING ITS REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. 8. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MA TERIAL WITH THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY I TS ACTION, AS THE STATEMENT OF THE AFORESAID TWO WITNESSES WAS THE ON LY BASIS OF ISSUING THE SHOW-CAUSE NOTICE. 9. WE, THUS, SET ASIDE THE IMPUGNED ORDER AS PASSED BY THE TRIBUNAL AND ALLOW THIS APPEAL. NO COSTS. ONCE THE ASSESSEE HAS DISPUTED THE CORRECTNESS OF T HE STATEMENT AND WANTED TO CROSS EXAMINE THE WITNESS WHICH WAS NOT G IVEN BY THE AO AS WELL AS LD. CIT (A), THEN THE ORDERS PASSED BASED O N SUCH STATEMENT ARE NOT SUSTAINABLE IN LAW. THE HONBLE DELHI HIGH COU RT IN CASE OF CIT VS. ASHWANI GUPTA, 322 ITR 396 (DELHI) WHILE DEALING WI TH THE ISSUE OF NOT PROVIDING THE OPPORTUNITY TO CROSS EXAMINE THE WITN ESSES HAS HELD IN PARA 5 TO 7 AS UNDER :- 5. SECONDLY, IN FACT, A RECTIFICATION APPLICATION BEI NG MA 264/DELHI/2008 UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961 HA D BEEN FILED BY THE REVENUE BEFORE THE SAID TRIBUNAL. IN THAT ALSO, IN PARAGRAPH ( G ) OF THE MISCELLANEOUS APPLICATION, THE REVENUE HAD SUBMITTE D AS UNDER: '( G )BECAUSE, ALTHOUGH FINDINGS OF THE TRIBUNAL ARE FACTUALLY COR RECT BUT THE DECISION OF THE TRIBUNAL IS NOT ACCEPTABLE BECA USE VIOLATION OF THE CANONS OF NATURAL JUSTICE IN ITSELF IS NOT FATAL EN OUGH SO AS TO JEOPARDIZE 92 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE ENTIRE PROCEEDINGS. IN THE INTEREST OF JUSTICE, THE TRIBUNAL COULD HAVE SET ASIDE THE ASSESSMENT ORDER WITH THE LIMITED PUR POSE OF OFFERING ASSESSEE AN OPPORTUNITY TO CROSS-EXAMINE SHRI MANOJ AGGARWAL BEFORE COMPLETING THE PROCEEDINGS.' [EMPHASIS SUPPLIED] 6. A READING OF THE SAID PARAGRAPH ( G ) MAKES IT CLEAR THAT THE REVENUE HAD ACCEPTED THE FINDINGS OF THE TRIBUNAL ON FACTS AS A LSO THE POSITION THAT THERE HAD BEEN A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HOWEVER, THE REVENUE'S PLEA WAS THAT THE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE WAS NOT FATAL SO AS TO JEOPARDIZE THE ENTIRE PROCEEDING S. THE SAID MISCELLANEOUS APPLICATION WAS ALSO REJECTED BY THE TRIBUNAL BY IT S ORDER DATED 28-11- 2008. 7. IN VIEW OF THE FOREGOING CIRCUMSTANCES, WE FEEL TH AT NO INTERFERENCE WITH THE IMPUGNED ORDER IS CALLED FOR. THE TRIBUNAL HAS CORRECTLY UNDERSTOOD THE LAW AND APPLIED IT TO THE FACTS OF T HE CASE. ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INAS MUCH AS SEIZED MATERIAL IS NOT PROVIDED TO AN ASSESSEE NOR IS CROSS-EXAMINATIO N OF THE PERSON ON WHOSE STATEMENT THE ASSESSING OFFICER RELIES UPON, GRANTED, THEN, SUCH DEFICIENCIES WOULD AMOUNT TO A DENIAL OF OPPORTUNIT Y AND, CONSEQUENTLY, WOULD BE FATAL TO THE PROCEEDINGS. FOLLOWING APPROA CH ADOPTED BY US IN SMC SHARE BROKERS LTD.'S CASE ( SUPRA ), WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDERATION. THUS THE HONBLE HIGH COURT HAS HELD THAT ONCE THER E IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MA TERIAL IS NOT PROVIDED TO THE ASSESSEE NOR IS CROSS EXAMINATION OF THE PERSON ON WHOSE STATEMENT THE AO RELIED UPON, GRANTED, THEN, SUCH DEFICIENCIE S WOULD AMOUNT TO DENIAL OF OPPORTUNITY AND CONSEQUENTLY WOULD BE FAT AL TO THE PROCEEDINGS. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF H.R. M EHTA VS. ACIT, 387 ITR 561 (BOMBAY) HAS ALSO CONSIDERED THE ISSUE OF N OT PROVIDING OPPORTUNITY OF CROSS EXAMINATION IN PARA 11 TO 17 A S UNDER :- 11. WE HAVE THEREFORE PROCEEDED TO HEAR AND DECIDE THE MATTER UNASSISTED BY THE REVENUE. IN THE COURSE OF HIS SUBMISSIONS MR . TRALSHAWALA HAD PRESSED INTO SERVICE INTER ALIA THE DECISION OF THE CALCUTTA HIGH COURT IN MATHER & PLATT (INDIA) LTD. ( SUPRA ) AND SUBMITTED THAT MERELY BECAUSE A PERSON IS NOT FOUND AT AN ADDRESS AFTER SEVERAL YEA RS IT CANNOT BE HELD THAT 93 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. HE IS NON EXISTENT AND THAT THE ASSESSEE HAD DISCHA RGED HIS PRIMARY ONUS BY IDENTIFYING THE SOURCE OF THE AMOUNT PAID. THE COUR T OBSERVED THAT ONCE THE PRIMARY ONUS IS DISCHARGED, THE ONUS SHIFTED TO THE REVENUE TO VERIFY GENUINENESS OF THE TRANSACTION. IN THE PRESENT CASE NO SUCH EFFORT WAS MADE BY THE REVENUE. WE FIND THAT IN S. HASTIMAL ( SUPRA ) THE MADRAS HIGH COURT OBSERVED THAT AFTER A LAPSE OF SEVERAL YEARS THE ASSESSEE SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPLAIN NOT ONLY MERELY, THE ORIGIN AND SOURCE OF HIS CAPITAL CONTRIBUTION BUT T HE ORIGIN OF ORIGIN AND THE SOURCE OF SOURCE AS WELL. IN YET ANOTHER CASE O F BAHRI BROTHERS (P) LTD. ( SUPRA ) THE DIVISION BENCH OF PATNA HIGH COURT OBSERVED T HAT WHERE THE ASSESSEE UPON WHOM THE INITIAL BURDEN LIES, PRO DUCES BANK CERTIFICATE TO ESTABLISH THAT THE TRANSACTION WAS CARRIED OUT T HROUGH ACCOUNT PAYEE CHEQUES THUS DISCLOSING THE IDENTITY OF THE CREDITO RS AS ALSO THE SOURCE OF INCOME, THE BURDEN SHIFTS ON TO THE DEPARTMENT AND THE DEPARTMENT CANNOT ADD THE CASH CREDITS TO HIS INCOME FROM UNDISCLOSED SOURCE. 12. THE HON'BLE SUPREME COURT IN NEMI CHAND KOTHARI ( SUPRA ) OBSERVED THAT IN ORDER TO ESTABLISH THE RECEIPT OF A CASH CR EDIT, THE ASSESSEE MUST SATISFY THREE CONDITIONS I.E. IDENTITY OF THE CREDI TOR, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CREDITOR. I N THE INSTANT CASE BY VIRTUE OF THE FACT THAT THE TRANSACTION WAS COMPLET ED BY CHEQUE PAYMENTS, THE APPELLANT HAS CONTENDED THAT IT HAD SATISFIED A LL THE THREE TESTS. 13. IN KISHANCHAND CHELLARAM ( SUPRA ) WHEREIN THE SUPREME COURT OBSERVED THAT THE REVENUE AUTHORITIES HAD NOT RECOR DED THE STATEMENT OF THE MANAGER OF THE BANK AND IT WAS DIFFICULT TO APPRECI ATE AS TO WHY IT WAS NOT DONE AND WHY THE MATTER WAS NOT PROBED FURTHER BY T HE REVENUE. 14. THE DELHI HIGH COURT IN ASHWANI GUPTA ( SUPRA )HELD THAT ONCE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IN ASMUCH AS WHEN ITS SEIZED MATERIAL WAS NOT PROVIDED TO AN ASSESSEE NOR WAS HE PERMITTED TO CROSS EXAMINE A PERSON ON WHOSE STATEMENT THE ASSESSING O FFICER RELIED, IT WOULD AMOUNT TO DEFICIENCY, AMOUNTING TO A DENIAL O F OPPORTUNITY AND THEREFORE VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. IN THAT CASE CIT (A) HAD DELETED ADDITION MADE BY THE ASSESSING OFFICER SINC E THE ASSESSING OFFICER HAD FAILED TO PROVIDE COPIES OF SEIZED MATE RIAL TO THE ASSESSEE NOR HAD HE ALLOWED THE ASSESSEE TO CROSS-EXAMINE THE PA RTY CONCERNED. THE DIVISION BENCH HELD THAT ONCE THERE IS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE INASMUCH AS SEIZED MATERIAL WAS NOT PROVIDE D TO THE ASSESSEE NOR WAS GIVEN OPPORTUNITY OF CROSS EXAMINING THE PERSON WHOSE STATEMENT WAS BEING USED AGAINST THE ASSESSEE THE ORDER COULD NOT BE SUSTAINED. 15. IN ANDAMAN TIMBER INDUSTRIES ( SUPRA ) THE SUPREME COURT FOUND THAT THE ADJUDICATING AUTHORITY HAD NOT GRANTED AN OPPOR TUNITY TO THE ASSESSEE TO CROSS EXAMINE THE WITNESSES AND THE TRIBUNAL MER ELY OBSERVED THAT THE CROSS EXAMINATION OF THE DEALERS IN THAT CASE, COUL D NOT HAVE BROUGHT OUT ANY MATERIAL WHICH WOULD NOT OTHERWISE BE IN POSSES SION OF THE APPELLANT- 94 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSEE. THE SUPREME COURT SET ASIDE THE IMPUGNED ORDER AND OBSERVED THAT IT WAS NOT FOR THE ADJUDICATING AUTHORITY TO P RESUPPOSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS EXAMINATIO N AND MAKE THE REMARKS SUCH AS WAS DONE IN THAT CASE. 16. IN THE INSTANT CASE ALTHOUGH THE APPELLANT ASSESSE E HAS CALLED UPON US TO DRAW AN INFERENCE THAT THE BURDEN SHIFTED TO THE REVENUE IN THE PRESENT CASE ONCE IT WAS ESTABLISHED THAT THE PAYMENTS WERE MADE AND REPAID BY CHEQUE WE NEED NOT HASTEN AND ADOPT THAT VIEW AFTER HAVING GIVEN OUR THOUGHT TO VARIOUS ISSUES RAISED AND THE DECISIONS CITED BY MR.TRALSHAWALLA AND FINDING THAT ON A VERY FUNDAMEN TAL ASPECT, THE REVENUE WAS NOT JUSTIFIED IN MAKING ADDITION AT THE TIME OF REASSESSMENT WITHOUT HAVING FIRST GIVEN THE ASSESSEE AN OPPORTUN ITY TO CROSS EXAMINE THE DEPONENT ON THE STATEMENTS RELIED UPON BY THE ACIT. QUITE APART FROM DENIAL OF AN OPPORTUNITY OF CROSS EXAMINATION, THE REVENUE DID NOT EVEN PROVIDE THE MATERIAL ON THE BASIS OF WHICH THE DEPA RTMENT SOUGHT TO CONCLUDE THAT THE LOAN WAS A BOGUS TRANSACTION. 17. IN OUR VIEW IN THE LIGHT OF THE FACT THAT THE MONI ES WERE ADVANCED APPARENTLY BY THE ACCOUNT PAYEE CHEQUE AND WAS REPA ID VIDE ACCOUNT PAYEE CHEQUE THE LEAST THAT THE REVENUE SHOULD HAVE DONE WAS TO GRANT AN OPPORTUNITY TO THE ASSESSEE TO MEET THE CASE AGAINS T HIM BY PROVIDING THE MATERIAL SOUGHT TO BE USED AGAINST ASSESSEE IN ARRI VING BEFORE PASSING THE ORDER OF REASSESSMENT. THIS NOT HAVING BEEN DONE, T HE DENIAL OF SUCH OPPORTUNITY GOES TO ROOT OF THE MATTER AND STRIKES AT THE VERY FOUNDATION OF THE REASSESSMENT AND THEREFORE RENDERS THE ORDERS P ASSED BY THE CIT (A) AND THE TRIBUNAL VULNERABLE. IN OUR VIEW THE ASSESS EE WAS BOUND TO BE PROVIDED WITH THE MATERIAL USED AGAINST HIM APART F ROM BEING PERMITTING HIM TO CROSS EXAMINE THE DEPONENTS. DESPITE THE REQ UEST DATED 15TH FEBRUARY, 1996 SEEKING AN OPPORTUNITY TO CROSS EXAM INE THE DEPONENT AND FURNISH THE ASSESSEE WITH COPIES OF STATEMENT AND D ISCLOSE MATERIAL, THESE WERE DENIED TO HIM. IN THIS VIEW OF THE MATTER WE A RE INCLINED TO ALLOW THE APPEAL ON THIS VERY ISSUE. THUS THE DENIAL OF OPPORTUNITY TO CROSS EXAMINE WAS CONSIDERED BY THE HONBLE HIGH COURT WHICH GOES TO THE ROOT OF THE MA TTER AND STRIKES AT THE VERY FOUNDATION OF THE ASSESSMENT AND, THEREFORE, R ENDERS THE ASSESSMENT ORDER PASSED BY THE AO NOT SUSTAINABLE. THE LD. A/ R HAS SUBMITTED THAT COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DC IT VS. SHRI PRATEEK KOTHARI VIDE ORDER DATED 16 TH DECEMBER, 2012 IN ITA NO. 159/JP/2016 HAS CONSIDERED THIS ISSUE IN PARA 2.8 TO 2.11 AS UNDER :- 95 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 2.8 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE TRANSACTION UNDER QUESTION RELATES TO UNSECURED LOANS TAKEN BY THE ASSESSEE AMOUNTING TO RS 1 CRORES FROM M/S MEHUL GEMS PVT LTD DURING THE IMPUNGED ASS ESSMENT YEAR AND NOT ACCEPTING THE SAID LOAN TRANSACTION AS A GENUINE TRANSACTION BY THE ASSESSING OFFICER AND THE RESULT ANT ADDITION MADE UNDER SECTION 68 OF THE ACT. UNDISPUTEDLY, THE PRIMARY ONUS TO ESTABLISH GENUINENESS OF THE LOAN TRANSACTION IS ON THE ASSESSEE. IN THE INSTANT CASE, THE ASSESSEE HAS PROVIDED THE NECESSARY EXPLANATION, FURNISHED DOCUMENTARY EVIDENCE IN TERM S OF TAX FILINGS, AFFIDAVITS AND CONFIRMATION OF THE DIRECTO RS, BANK STATEMENTS OF THE LENDER, BALANCE SHEET OF THE LEND ER COMPANY, AND AN INDEPENDENT CONFIRMATION HAS ALSO BEEN OBTAINED BY THE ASSESSING OFFICER TO SATISFY THE CARDINAL TEST OF I DENTITY, CREDITWORTHINESS AND GENUINENESS OF THE LOAN TRANSA CTION. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN ANY FI NDING IN RESPECT OF SUCH EXPLANATION, DOCUMENTARY EVIDENCE AS WELL A S INDEPENDENT CONFIRMATION. APPARENTLY, THE REASON FOR NOT ACCEPT ING THE SAME IS THAT THE ASSESSING OFFICER WAS IN RECEIPT OF CERTAI N INFORMATION FROM THE INVESTIGATION WING OF THE TAX DEPARTMENT A S PER WHICH THE TRANSACTION UNDER CONSIDERATION IS A BOGUS LOAN TRA NSACTION. THE SAID INFORMATION RECEIVED FROM THE INVESTIGATION WI NG THUS OVERWEIGHED THE MIND OF THE ASSESSING OFFICER. THE ASSESSING OFFICER STATED THAT THE PRIMARY ONUS IS ON THE ASSE SSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTION CLAIMED BY IT AN D IF THE INVESTIGATION DONE BY THE DEPARTMENT LEADS TO DOUBT REGARDING THE GENUINENESS OF THE TRANSACTIONS, IT IS INCUMBENT ON THE ASSESSEE TO PRODUCE THE PARTIES ALONGWITH NECESSARY DOCUMENTS T O ESTABLISH THE GENUINENESS OF THE TRANSACTION. IN RESPONSE, TH E ASSESSEE SUBMITTED THAT SHRI BHANWARLAL JAIN IS NOT KNOWN TO HIM AND REGARDING VARIOUS INCRIMINATING DOCUMENTARY EVIDENC ES SEIZED DURING THE COURSE OF SEARCH AND STATEMENTS RECORDED OF SHRI BHANWARLAL JAIN AND OTHER PERSONS, HE SPECIFICALLY REQUESTED THE AO TO PROVIDE COPIES OF SUCH INCRIMINATING DOCUMENT S AND STATEMENT OF ALL VARIOUS PERSONS RECORDED IN THIS R EGARD AND PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXA MINE SUCH PERSONS. HOWEVER, THE AO DIDNT PROVIDE TO THE ASSE SSEE COPIES OF SUCH INCRIMINATING DOCUMENTS AND STATEMENTS OF VARI OUS PERSONS RECORDED AND ALLOW THE CROSS-EXAMINATION OF ANY OF THESE PERSONS. WHILE DOING SO, THE AO STATED THAT IN HIS STATEMEN TS, BHANWARLAL JAIN HAD DESCRIBED THAT THEY ARE INDULGED IN PROVID ING ACCOMMODATION ENTRIES OF BOGUS UNSECURED LOANS AND ADVANCES THROUGH VARIOUS BENAMI CONCERNS (70) OPERATED AND M ANAGED BY 96 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THEM. THIS ADMISSION AUTOMATICALLY MAKES ALL THE TR ANSACTIONS DONE BY THEM AS MERE PAPER TRANSACTIONS AND IN THES E CIRCUMSTANCES, FURTHER AS PER THE INFORMATION NAME AND ADDRESS OF ASSESSEE AND THE BENAMI CONCERN THROUGH WHICH ACCOM MODATION ENTRY OF UNSECURED LOANS WAS PROVIDED IS APPEARING IN THE LIST OF BENEFICIARIES TO WHOM THE SAID GROUP HAS PROVIDED. THIS ADMISSION IS SUFFICIENT TO REJECT THE CONTENTIONS O F THE ASSEESSE. FURTHER, REGARDING CROSS EXAMINATION, THE AO STATED THAT THE RIGHT OF CROSS EXAMINATION IS NOT AN ABSOLUTE RIGHT AND IT DEPENDS UPON THE CIRCUMSTANCES OF EACH CASE AND ALSO ON THE STATUTE CONCERNED. IN THE PRESENT CASE, NO SUCH CIRCUMSTANC ES ARE WARRANTED AS IN THE LIST OF BENEFICIARIES TO WHOM A CCOMMODATION ENTRIES WERE PROVIDED BY THE SAID GROUP CATEGORICAL LY CONTAINS THE NAME AND ADDRESS OF THE ASSESSEE. FURTHER THE GROUP HAS CATEGORICALLY ADMITTED TO PROVIDING OF ACCOMMODATIO N ENTRIES OF UNSECURED LOANS THROUGH VARIOUS BENAMI CONCERNS. T HE AO FURTHER RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206(SC) A ND HONBLE RAJASTHAN HIGH COURT IN CASE OF RAMESHWARLAL MALI V S. CIT 256 ITR 536(RAJ.) AMONG OTHERS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE THAT IF THE ENTRIES AND MATERIAL ARE GATHE RED BEHIND THE BACK OF THE ASSESSEE AND IF THE AO PROPOSES TO ACT ON SUCH MATERIAL AS HE MIGHT HAVE GATHERED AS A RESULT OF HIS PRIVAT E ENQUIRIES, HE MUST DISCLOSE ALL SUCH MATERIAL TO THE ASSESSEE AND ALSO ALLOW THE CROSS EXAMINATION AND IF THIS IS NOT DONE, THE PRIN CIPLES OF NATURAL JUSTICE STAND VIOLATED. 2.9 IN LIGHT OF ABOVE DISCUSSIONS, IN OUR VIEW, TH E CRUX OF THE ISSUE AT HAND IS THAT WHETHER THE PRINCIPLE OF NATURAL JUSTI CE STAND VIOLATED IN THE INSTANT CASE. IN OTHER WORDS, WHERE THE AO D OESNT WANT TO ACCEPT THE EXPLANATION OF THE ASSESSEE AND THE DOCU MENTATION FURNISHED REGARDING THE GENUINENESS OF THE LOAN TRA NSACTION AND INSTEAD WANTS TO RELY UPON THE INFORMATION INDEPEND ENTLY RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT IN RE SPECT OF INVESTIGATION CARRIED OUT AT A THIRD PARTY, CAN THE SAID INFORMATION BE USED AGAINST THE ASSESSEE WITHOUT SHARING SUCH I NFORMATION WITH THE ASSESSEE AND ALLOWING AN OPPORTUNITY TO THE ASS ESSEE TO EXAMINE SUCH INFORMATION AND EXPLAIN ITS POSITION E SPECIALLY WHEN THE ASSESSEE HAS REQUESTED THE SAME TO THE ASSESSIN G OFFICER. 2.10 IN THIS REGARD, THE HONBLE SUPREME COURT IN THE CASE OF DHAKESWARI COTTON MILLS LTD. V. CIT (1954) 26 ITR 7 75 (SC) (COPY AT CASE LAW PB 812-818) HAS HELD THAT THE RULE OF LAW ON THIS SUBJECT HAS BEEN FAIRLY AND RIGHTLY STATED BY THE LAHORE HIGH COURT IN THE CASE OF SETH GURMUKH SINQH WHERE IT WAS STATED 97 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THAT WHILE PROCEEDING UNDER SUB-SECTION (3) OF SECT ION 23, THE INCOME-TAX OFFICER, THOUGH NOT BOUND TO RELY ON EVI DENCE PRODUCED BY THE ASSESSEE AS HE CONSIDERS TO BE FALSE, YET IF HE PROPOSES TO MAKE AN ESTIMATE IN DISREGARD OF THAT EVIDENCE, HE SHOULD IN FAIRNESS DISCLOSE TO THE ASSESSEE THE MATERIAL ON W HICH HE IS GOING TO FIND THAT ESTIMATE; AND THAT IN CASE HE PROPOSES TO USE AGAINST THE ASSESSEE THE RESULT OF ANY PRIVATE INQUIRIES MA DE BY HIM, HE MUST COMMUNICATE TO THE ASSESSEE THE SUBSTANCE OF T HE INFORMATION SO PROPOSED TO BE UTILIZED TO SUCH AN EXTENT AS TO PUT THE ASSESSEE IN POSSESSION OF FULL PARTICULARS OF THE CASE HE IS EXPECTED TO MEET AND THAT HE SHOULD FURTHER GIVE HIM AMPLE OPPORTUNI TY TO MEET IT. IT WAS HELD IN THAT CASE THAT IN THIS CASE WE ARE OF THE OPINION THAT THE TRIBUNAL VIOLATED CERTAIN FUNDAMENTAL RULES OF JUSTICE IN REACHING ITS CONCLUSIONS. FIRSTLY, IT DID NOT DISCL OSE TO THE ASSESSEE WHAT INFORMATION HAD BEEN SUPPLIED TO IT BY THE DEP ARTMENTAL REPRESENTATIVE. NEXT, IT DID NOT GIVE ANY OPPORTUNI TY TO THE COMPANY TO REBUT THE MATERIAL FURNISHED TO IT BY HI M, AND LASTLY, IT DECLINED TO TAKE ALL THE MATERIAL THAT THE ASSESSEE WANTED TO PRODUCE IN SUPPORT OF ITS CASE. THE RESULT IS THAT THE ASSESSEE HAD NOT HAD A FAIR HEARING. THE HONBLE SUPREME COURT IN CASE OF C. VASANTLAL & CO. VS. CIT 45 ITR 206 (SC) HAS HELD THAT THE ITO IS NOT BOUND BY ANY TECHNICAL RULES OF THE LAW OF EVIDENCE. IT IS OPEN TO HIM TO COLLECT MATERIAL TO FACILITATE ASSESSMENT EVEN BY PRIVATE E NQUIRY. BUT, IF HE DESIRES TO USE THE MATERIAL SO COLLECTED, THE ASSES SEE MUST BE INFORMED ABOUT THE MATERIAL AND GIVEN ADEQUATE OPPO RTUNITY TO EXPLAIN IT. THE STATEMENTS MADE BY PRAVEEN JAIN AND GROUP WERE MATERIAL ON WHICH THE IT AUTHORITIES COULD ACT PROV IDED THE MATERIAL WAS DISCLOSED AND THE ASSESSEE HAD AN OPPO RTUNITY TO RENDER THEIR EXPLANATION IN THAT REGARD. THE HONBLE SUPREME COURT IN CASE OF KISHINCHAND CH ELLARAM V. CIT (1980) 125 ITR 713 (SC) (COPY AT CASE LAW PB 585-591) HAS HELD THAT WHETHER THERE WAS ANY MATERIAL EVIDE NCE TO JUSTIFY THE FINDINGS OF THE TRIBUNAL THAT THE AMOUNT OF RS. 1,07,350 SAID TO HAVE BEEN REMITTED BY TILOKCHAND FROM MADRAS REPRES ENTED THE UNDISCLOSED INCOME OF THE ASSESSEE. THE ONLY EVIDEN CE ON WHICH THE TRIBUNAL COULD RELY FOR THE PURPOSE OF ARRIVING AT THIS FINDING WAS THE LETTER, DATED 18-2-1955 SAID TO HAVE BEEN A DDRESSED BY THE MANAGER OF THE BANK TO THE ITO. NOW IT IS DIFFICULT TO SEE HOW THIS LETTER COULD AT ALL BE RELIED UPON BY THE TRIBUNAL AS A MATERIAL PIECE OF EVIDENCE SUPPORTIVE OF ITS FINDING. IN THE FIRST PLACE, THIS LETTER WAS NOT DISCLOSED TO THE ASSESSEE BY THE ITO AND EVEN THOUGH THE AAC REPRODUCED AN EXTRACT FROM IT IN HIS ORDER, HE DID NOT CARE 98 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. TO PRODUCE IT BEFORE THE ASSESSEE OR GIVE A COPY OF IT TO THE ASSESSEE. THE SAME POSITION OBTAINED ALSO BEFORE TH E TRIBUNAL AND THE HIGH COURT AND IT WAS ONLY WHEN A SUPPLEMENTAL STATEMENT OF THE CASE WAS CALLED FOR BY THIS COURT BY ITS ORDER, DATED 16-8-1979 THAT, ACCORDING TO THE ITO, THIS LETTER WAS TRACED BY HIM AND EVEN THEN IT WAS NOT SHOWN BY HIM TO THE ASSESSEE BUT IT WAS FORWARDED TO THE TRIBUNAL AND IT WAS FOR THE FIRST TIME AT TH E HEARING BEFORE THE TRIBUNAL IN REGARD TO THE PREPARATION OF THE SU PPLEMENTAL STATEMENT OF THE CASE THAT THIS LETTER WAS SHOWN TO THE ASSESSEE. IT WILL, THEREFORE, BE SEEN THAT, EVEN IF WE ASSUME TH AT THIS LETTER WAS IN FACT ADDRESSED BY THE MANAGER OF THE BANK TO THE ITO, NO RELIANCE COULD BE PLACED UPON IT, SINCE IT WAS NOT SHOWN TO THE ASSESSEE UNTIL AT THE STAGE OF PREPARATION OF THE S UPPLEMENTAL STATEMENT OF THE CASE AND NO OPPORTUNITY TO CROSS E XAMINE THE MANAGER OF THE BANK COULD IN THE CIRCUMSTANCES BE S OUGHT OR AVAILED OF BY THE ASSESSEE. IT IS TRUE THAT THE PRO CEEDINGS UNDER THE INCOME-TAX LAW ARE NOT GOVERNED BY THE STRICT RULES OF EVIDENCE AND, THEREFORE, IT MIGHT BE SAID THAT EVEN WITHOUT CALLING THE MANAGER OF THE BANK IN EVIDENCE TO PROVE THIS LETTE R, IT COULD BE TAKEN INTO ACCOUNT AS EVIDENCE. BUT BEFORE THE INCO ME-TAX AUTHORITIES COULD RELY UPON IT, THEY WERE BOUND TO PRODUCE IT BEFORE THE ASSESSEE SO THAT THE ASSESSEE COULD CONTROVERT THE STATEMENTS CONTAINED IN IT BY ASKING FOR AN OPPORTUNITY TO CRO SS EXAMINE THE MANAGER OF THE BANK WITH REFERENCE TO THE STATEMENT S MADE BY HIM. 2.11 IN LIGHT OF ABOVE PROPOSITION IN LAW AND ESPE CIALLY TAKING INTO CONSIDERATION THE DECISION OF THE HONBLE SUPREME C OURT IN CASE OF C. VASANTLAL & CO. (SUPRA) RELIED UPON BY THE REVEN UE AND WHICH ACTUALLY SUPPORTS THE CASE OF THE ASSESSEE, IN THE INSTANT CASE, THE ASSESSMENT WAS COMPLETED BY THE AO RELYING SOLELY O N THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, S TATEMENT RECORDED U/S 132(4) OF SHRI BHANWARLAL JAIN AND OTH ERS, AND VARIOUS INCRIMINATING DOCUMENTARY EVIDENCE FOUND FR OM THE SEARCH AND SEIZURE CARRIED OUT BY INVESTIGATION WING, MUMB AI ON THE SHRI BHANWARLAL JAIN GROUP ON 03.10.2013. IT REMAINS UND ISPUTED THAT THE ASSESSEE WAS NEVER PROVIDED COPIES OF SUCH INCR IMINATING DOCUMENTS AND STATEMENTS OF SHRI BHANWARLAL JAIN AN D VARIOUS PERSONS AND AN OPPORTUNITY TO CROSS EXAMINE SUCH PE RSONS THOUGH HE SPECIFICALLY ASKED FOR SUCH DOCUMENTS AND CROSS EXAMINATION. ON THE OTHER HAND, THE BURDEN WAS SOUGHT TO BE SHIF TED ON THE ITA NO. 159/JP/16 THE ACIT, CENTRAL -2, JAIPUR VS. M/S PRATEEK KOTHARI, JAIPUR 21 ASSESSEE BY THE A.O. IT IS CLEAR CASE WHERE THE PRINCIPLE OF NATURAL JUSTICE STAND VIOLATED AND THE ADDITIONS MADE UNDER SECTION 68 THEREFORE ARE UNSUSTAINABLE IN THE EYE OF LAW AND 99 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WE HEREBY DELETE THE SAME. THE ORDER OF THE LD CIT( A) IS ACCORDINGLY CONFIRMED AND THE GROUND OF THE REVENUE IS DISMISSED. THUS WHEN THE ASSESSEE HAS SPECIFICALLY ASKED FOR C ROSS EXAMINATION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO, THEN THE DENIAL OF THE OPPORTUNITY TO CROSS EXAMINE WOULD CE RTAINLY IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND CONSEQUENTLY REND ERS THE ASSESSMENT ORDER BASED ON SUCH STATEMENT AS NOT SUSTAINABLE IN LAW. HENCE IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHERE TH E ASSESSEE HAS REPEATEDLY REQUESTED AND DEMANDED THE CROSS EXAMINA TION OF THE WITNESSES WHOSE STATEMENTS WERE RELIED UPON BY THE AO IN THE ASSESSMENT ORDER AND FURTHER THE REPORT OF THE DDIT INVESTIGATION KOLKATA IS ALSO BASED ON THE STATEMENT OF SUCH PERSON THEN THE DENIAL OF CROSS EXAMINATION BY THE AO AS WELL AS LD. CIT (A) DESPIT E THE FACT THAT THE ASSESSEE WAS READY TO BEAR THE COST OF THE CROSS EX AMINATION OF THE WITNESSES IS A GROSS VIOLATION OF PRINCIPLES OF NAT URAL JUSTICE. THUS THE ADDITIONS MADE BY THE AO ON THE BASIS OF SUCH STATE MENT WITHOUT ANY TANGIBLE MATERIAL IS NOT SUSTAINABLE IN LAW AND LIA BLE TO BE DELETED. ACCORDINGLY THE ADDITION MADE BY THE AO IS ALSO DEL ETED ON MERITS APART FROM THE LEGAL ISSUE DECIDED IN FAVOUR OF THE ASSES SEE. IN THE CASE IN HAND, THE ASSESSEE PURCHASED THE SHA RES OF VARIOUS COMPANIES WHICH INCLUDE M/S. AASTHA TRADE LINK PVT. LTD. WHICH WAS SUBSEQUENTLY MERGED INTO M/S. TWENTY FIRST CENTURY INDIA LTD. BY THE ORDER OF THE HONBLE BOMBAY HIGH COURT. THE ASSESSEE RECEIVED 38 SHARES OF TWENTY FIRST CENTURY INDIA LTD. IN LIEU OF 1 (ONE) SHARE HELD IN M/S. AASTHA TRADE LINK PVT. LTD. THE SHARE S OF POST MERGER NEW ENTITY WERE 100 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 12 TH MAY, 2011. THEREFORE, THE TRANSACTION OF PURCHASE OF SHARES CANNOT BE DOUBTED WHEN THE SHARES WERE PURCHASED OF THE ENTITY WHICH WAS SUBSEQUENTLY MERGED WITH AN OTHER COMPANY AND THEREAFTER THE SHARES WERE DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS PRODUCED THE COPIES OF BILLS, CONTRACT NOTES AND PA YMENT THROUGH BANKING CHANNEL REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. THE AO HAS TREATED THESE SHARES AS PENNY STOCKS AN D THEREBY TREATED THE TRANSACTIONS AS BOGUS ACCOMMODATION ENTRIES ON ACCO UNT OF LONG TERM CAPITAL GAIN. WE WILL CONSIDER THE RELEVANT FACTS, DOCUMENTARY EV IDENCE AND ANALYZE THE TRANSACTIONS OF PURCHASE AND SALE OF EACH SCRIP AS UNDER :- M/S. TWENTY FIRST CENTURY (INDIA) LTD. (ORIGINALLY : M/S. ASTHA TRADE LINK PVT. LTD.) DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF MERGER DATE OF TRANSFER IN DEMAT A/C NO. OF SHARES ALLOTTED POST MERGER 1 2 3 4 5 6 13.10.2009 2000 8,00,000 23.12.2010 12.05.2011 76,000 DATE OF SALE NO. OF SHARES SOLD SALE CONSIDERATION CAPITAL GAIN 7 8 9 10 28.11.2011 TO 13.12.2011 76,000 24,587,710 2,37,87,711 FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE INITIA LLY PURCHASED 2000 SHARES OF M/S. ASTHA TRADE LINK PVT. LTD. ON 13 TH OCTOBER, 2009 @ RS. 200/- PER SHARE FOR A TOTAL PURCHASE CONSIDERATION OF RS. 8,00,000/- WHICH WAS PAID THROUGH BANKING CHANNEL AS 101 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. REFLECTED IN THE BANK STATEMENT. THE SAID COMPANY W AS SUBSEQUENTLY MERGED WITH M/S. TWENTY FIRST CENTURY (INDIA) LTD. WITH EFFECT FROM 23.12.2010 AS PER THE SCHEME OF MERGER APPROVED BY THE HON'BLE HIGH COURT. THESE SH ARES WERE DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 12.05.2011. THEREF ORE, THE ASSESSEE WAS HOLDING THESE 2000 SHARES IN ITS DEMAT ACCOUNT SINCE 12 MAY , 2011 TILL THE SHARES WERE SOLD BY THE ASSESSEE STOCK EXCHANGE AND FROM ITS DEMAT ACCO UNT FROM 28 TH NOVEMBER, 2011 TO 13 TH DECEMBER, 2011. M/S. JRI INDUSTRIES & INFRASTRUCTURE LTD. DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF DEMATERIALIZATION DATE OF SPLIT & SHARES RECEIVED ON SPLIT TOTAL NUMBER OF SHARES HELD IN DEMAT A/C 1 2 3 4 5 6 07.04.2011 100000 4,000,000 25.06.2011 24.03.2012 500,000 DATE OF SALE NO. OF SHARES SOLD SALE CONSIDERATION CAPITAL GAIN 7 8 9 10 20.06.2012 TO 27.11.2012 500,000 61,391,802 5,73,91,802 THE ASSESSEE PURCHASED 1,00,000 SHARES OF M/S. JRI INDUSTRIES & INFRASTRUCTURE LTD. IN THE PREFERENTIAL ALLOTMENT FROM THE COMPANY FOR A C ONSIDERATION OF RS. 40,00,000/-. THIS SHOWS THAT THE SHARES WERE PURCHASED @ RS. 40/- PER SHARE, THEREFORE, IT WAS NOT A PENNY STOCK TRANSACTION OF PURCHASE OF SHARES BY TH E ASSESSEE. THESE SHARES WERE SPLITTED IN THE RATIO OF 1:5 AND ACCORDINGLY THE AS SESSEE GOT TOTAL NUMBER OF 5,00,000 SHARES AFTER SPLITTING. IT IS PERTINENT TO NOTE THA T PRIOR TO THE SPLITTING, THE ORIGINAL 102 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 1,00,000 SHARES ALLOTTED TO THE ASSESSEE WERE DEMAT ERIALIZED AND TRANSFERRED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 25 TH JUNE, 2011 AND THEREAFTER THERE WAS A SPLIT ON 24 TH MARCH, 2012 WHEREBY THE ASSESSEE RECEIVED 4,00,000 MORE SHARES. THUS THE TOTAL NUMBER OF SHARES CREDITED TO THE DEMAT ACCOUNT OF T HE ASSESSEE WERE 5,00,000 SHARES. SPLIT OF SHARE FROM HIGHER FACE VALUE TO SMALLER FA CE VALUE WOULD NOT INCREASE THE OVER- ALL VALUE OF THE SHARES BUT IT INCREASED ONLY THE N UMBER OF SHARES OF LESSER DENOMINATION. THUS IT IS CLEAR THAT AS ON 25 TH JUNE, 2011 THE ASSESSEE WAS HOLDING 1,00,000 SHARES OF M/S. JRI INDUSTRIES & INFRASTRUC TURE LTD. IN HIS DEMAT ACCOUNT. THE PURCHASE CONSIDERATION WAS PAID THROUGH BANKING CHA NNEL OF RS. 40,00,000/- WHICH IS REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. THE HOLDING OF THE SHARES IN THE DEMAT ACCOUNT AND THEREAFTER SPLITTING OF THE SHARES AND ALLOTMENT OF SHARES POST SPLIT ALSO CREDITED IN THE DEMAT ACCOUNT OF THE ASSESSEE. THE SHARES WERE FINALLY SOLD BY THE ASSESSEE FROM 26 TH JUNE, 2012 TO 27.11.2012 AT THE PREVAILING PRICE O N THE PLATFORM OF STOCK EXCHANGE FOR A TOTAL CONSIDERATION OF RS. 6,1 3,91,802/-. M/S. INDIA INFOTECH & SOFTWARE LTD. DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF SPLITTING & NO. OF SHARES DATE OF DEMATERIALIZATION DATE OF MERGER 1 2 3 4 5 6 01.02.2011 2,00,000 20,00,000 14.02.2012 18,00,000 27.03.2012 04.05.2012 103 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ALLOTMENT OF SHARES POST MERGER DATE OF SALE NO. OF SHARES SALE CONSIDERATION CAPITAL GAINS 7 8 9 10 11 18,00,000 01.01.2013 TO 08.03.2013 AND 09.04.2013 TO 12.08.2013. 15,42,300 AND 24,57,700 3,48,67,655/ - 3,28,67,655/ - AND 7,67,93,374/- THE ASSESSEE INITIALLY PURCHASED 2,00,000 SHARES OF M/S. LAMBODAR NIRMIT LTD ON 1 ST FEBRUARY, 2011 FOR A PURCHASE CONSIDERATION OF RS. 20,00,000/-. THE PURCHASE CONSIDERATION WAS PAID THROUGH BANKING CHANNEL AS I T IS REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. THESE 2,00,000 SHARES WERE SPLITTED INTO 20,00,000 SHARES WHICH MEANS 1 (ONE) SHARE WAS SPLITTED INTO 10 SHARES. AFTER S PLIT OF SHARES ON 14.02.2014 THESE SHARES WERE DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 27 TH MARCH, 2012. THEREAFTER THIS COMPANY M/S. LAMBODAR NIRMIT LTD. W AS MERGED WITH M/S. INDIA INFOTECH & SOFTWARE LTD. ON 04.05.2012. AFTER MERG ER THE ASSESSEE RECEIVED 40,00,000 SHARES OF NEW ENTITY IN LIEU OF 20,00,000 SHARES OF THE PRE-MERGER ENTITY. THUS IT IS CLEAR THAT EVEN PRIOR TO MERGER THE ASSESSEE WAS HO LDING THE SHARES IN HIS DEMAT ACCOUNT WHICH CANNOT BE DISPUTED AND THEREAFTER THE ASSESSEE RECEIVED THE SHARES OF MERGED ENTITY WHICH IS IN THE RATIO OF 1:2 OF EXIST ING SHARES OF POST MERGER ENTITY. THE ASSESSEE SOLD THESE SHARES FROM 1 ST JANUARY, 2013 TO 12 TH AUGUST, 2013 FOR A TOTAL SALE CONSIDERATION OF RS. 3,48,67,655/-. THE SALES OF S HARES WERE EFFECTED THROUGH STOCK EXCHANGE AND AT THE PREVAILING RATE ON THE EACH DAY OF SALE. 104 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. M/S. UNNO INDUSTRIES LTD. DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF BONUS SHARES RECEIVED & NO. OF BONUS SHARES DATE OF FURTHER ALLOTMENT OF PREFERENTIAL SHARES. NO. OF PREFERENTIAL ALLOTMENT OF SHARES. 1 2 3 4 5 6 28.06.2011 1250 12,50,000 23.03.2012 78,750 01.08.2012 1,75,000 AMOUNT PAID FOR PREFERENTIAL ALLOTMENT DATE OF DEMATERIALIZATION TOTAL NO. OF SHARES AFTER BONUS & PREFERENTIAL ALLOTMENT TOTAL PURCHASE CONSIDERATION DATE OF MERGER TOTAL ALLOTMENT OF SHARES POST MERGER 7 8 9 10 11 12 17,50,000 20.12.2012 2,55,000 30,00,000 18.01.2013 2,550,000 DATE OF PURCHASE OF MORE SHARES THROUGH STOCK EXCHANGE PURCHASE CONSIDERATION PAID FOR PURCHASES MADE THROUGH STOCK EXCHANGE DATE OF SALE OF SHARES NO. OF SHARES SOLD TOTAL SALE CONSIDERATION BALANCE SHARES WITH THE ASSESSEE 13 14 15 16 17 18 11.03.2014 TO 18.03.2014 17,111,859 26.04.2013 TO 20.09.2013 AND 29.05.2014 TO 03.11.2014 13,86,391 AND 13,22,291 4,25,57,276/ - 11,19,717 THE ASSESSEE INITIALLY PURCHASED 1250 SHARES OF BAV ISCON VINCOME PVT. LTD. ON 28 TH JUNE, 2011 @ RS. 1,000/- PER SHARE FOR A TOTAL CONS IDERATION OF RS. 12,50,000/-. THUS IT IS CLEAR THAT AT THE TIME OF PURCHASE THIS IS NOT A TRANSACTION OF PENNY STOCK BUT THE SHARES WERE PURCHASED BY THE ASSESSEE @ RS. 1000/- PER SHARE. THE PAYMENT OF PURCHASE CONSIDERATION WAS MADE THROUGH BANKING CHA NNEL AS EVIDENT FROM THE BANK STATEMENT OF THE ASSESSEE. THEREAFTER THE ASSESSEE RECEIVED 78,750 BONUS SHARES ON 105 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 23 RD MARCH, 2012. THE ASSESSEE WAS ALSO ALLOTTED 1,75,0 00 SHARES ON 01.08.2012 UNDER PREFERENTIAL ALLOTMENT BY THE SAID COMPANY AGAINST THE CONSIDERATION OF RS. 17,50,000/-. THE TOTAL NUMBER OF SHARES AFTER BONUS AND PREFEREN TIAL ALLOTMENT COMES TO RS. 2,55,000 SHARES WHICH WERE DEMATERIALIZED IN THE DE MAT ACCOUNT OF THE ASSESSEE ON 20.12.2012. THE TOTAL PURCHASE CONSIDERATION PAID BY THE ASSESSEE FOR ACQUIRING THESE SHARES WAS RS. 30,00,000/-. THE ENTIRE PAYMENT MAD E BY THE ASSESSEE IS THROUGH BANKING CHANNEL WHICH IS NOT DISPUTED BY THE AO. TH E SAID COMPANY M/S. BAVISCON VINCOME PVT. LTD. WAS SUBSEQUENTLY MERGED WITH M/S. UNNO INDUSTRIES LTD. ON 18.01.2013 AS PER THE SCHEME OF MERGER DULY APPROVE D BY HON'BLE HIGH COURT. AFTER MERGER, THE ASSESSEE WAS ALLOTTED THE SHARES OF NEW ENTITY THOUGH IN THE RATIO OF 1:10 AND CONSEQUENTLY 25,50,000 SHARES WERE ALLOTTED TO THE ASSESSEE IN LIEU OF 2,55,000 SHARES HELD IN THE PRE-MERGER ENTITY. THEREAFTER A SSESSEE HAS ACQUIRED 12,78,399 SHARES FROM 11.03.2014 TO 18.03.2014 THROUGH STOCK EXCHANGE FOR A CONSIDERATION OF RS. 1,71,11,859/-. IN THIS WAY THE ASSESSEE ACCUMU LATED THE SHARES IN HIS DEMAT ACCOUNT BY WAY OF FURTHER PURCHASES THROUGH STOCK E XCHANGE, PART OF THESE SHARES WERE SOLD BY THE ASSESSEE FROM 26 TH APRIL, 2013 TO 03.11.2014. THE SALE TRANSACTIONS WERE CARRIED OUT IN THE STOCK EXCHANGE ON VARIOUS D ATES AT THE PREVAILING PRICE AND, THEREFORE, IT IS NOT A CASE OF TRANSFER OF SHARES I N ONE GO. BUT THE ASSESSEE SOLD THESE SHARES DURING THE PERIOD OF MORE THAN 1 YEAR. TH E ASSESSEE IS STILL HOLDING 11,19,717 SHARES OF M/S. UNNO INDUSTRIES LTD. IN HI S DEMAT ACCOUNT. THUS THE TRANSACTIONS CARRIED OUT BY THE ASSESSEE FOR PURCHA SE AND SALE OF THESE SHARES THROUGH 106 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. STOCK EXCHANGE AT THE PREVAILING RATE ON THE FLOOR OF THE STOCK EXCHANGE CANNOT BE HELD TO BE BOGUS. M/S. SULABH ENGINEERING & SERVICE LTD. D ATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF SPLITTING AND NUMBER OF SHARES RECEIVED AS A RESULT OF SPLIT. DATE OF DEMATERIALIZATION TOTAL NO. OF SHARES AFTER SPLIT 1 2 3 4 5 6 02.01.2013 & 19.12.2013. 12,000 AND 25,000 50,69,064/ - AND 51,98,436/- 22.01.2013 108,000 02.01.2013 AND 19.12.2013. 1,45,000 DATE OF SALE NO. OF SHARES SALE CONSIDERATION CAPITAL GAIN 7 8 9 10 11 12 04.07.2014 TO 06.08.2014 1,45,000 35,065,196/ - 2,47,97,697/ - THE ASSESSEE PURCHASED 12,000 SHARES OF M/S. SULABH ENGINEERING & SERVICE LTD. ON 2 ND JANUARY, 2013 AND 25,000 SHARES ON 19.12.2013 FOR A TOTAL CONSIDERATION OF RS. 1,02,67,500/-. THE PURCHASE CONSIDERATION WAS PAID THROUGH BANKING CHANNEL AS APPEARING IN THE BANK ACCOUNT OF THE ASSESSEE. THE RE WAS A SPLIT OF SHARES ON 22.01.2013 AND THEREBY THE ASSESSEE RECEIVED 1,08,0 00 SHARES. THE TOTAL NUMBER OF SHARES RECEIVED BY THE ASSESSEE WERE 1,45,000 WHICH WERE DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON THE RESPECTIVE DATES I.E . 02.01.2013 AND 19.12.2013. THUS IT IS CLEAR THAT THE ASSESSEE WAS HOLDING TOTAL NUMBER OF 1,45,000 SHARES IN THE DEMAT 107 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACCOUNT WHICH WAS SUBSEQUENTLY SOLD THROUGH STOCK E XCHANGE FROM 4 TH JULY, 2014 TO 06.08.2014 FOR A CONSIDERATION OF RS. 3,50,65,196/- . THE SHARES WERE SOLD AT THE PREVAILING PRICE AT THE STOCK EXCHANGE ON THE DATE OF SALE. M/S. UNISHIRE URBAN INFRA LTD. DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF DEMATERIALIZATION DATE OF SALE OF SHARES NO. OF SHARES SOL D 1 2 3 4 5 6 05.09.2013 2,50,000 25,00,000 26.09.2013 20.03.2015 AND 07.04.2015 2,00,000 SALE CONSIDERATION CAPITAL GAIN 7 8 9 10 11 12 23,75,309 23,75,309/ - AND 46,564/- THE ASSESSEE PURCHASED 2,50,000 SHARES OF M/S. UNIS HIRE URBAN INFRA LTD. UNDER DIRECT ALLOTMENT FROM THE COMPANY ON 5 TH SEPTEMBER, 2013 FOR A CONSIDERATION OF RS. 25,00,000/-. THUS IT IS CLEAR THAT SHARES WERE PUR CHASED AT PAR AND SUBSEQUENTLY DEMATERIALIZED IN THE DEMAT ACCOUNT OF THE ASSESSEE ON 26 TH SEPTEMBER, 2013. THERE IS NO GAP BETWEEN THE PURCHASE OF SHARES AND DEMATERIA LIZATION OF THE SAME. THE ASSESSEE SOLD THESE SHARES FROM 20 TH MARCH, 2015 TO 7 TH APRIL, 2015 FOR A TOTAL CONSIDERATION OF RS. 23,75,309/-. IT APPEARS THAT T HERE IS NO MUCH DIFFERENCE OR APPRECIATION IN THE SHARE PRICE AFTER THE SHARES WE RE PURCHASED IN THE MONTH OF SEPTEMBER, 2013 AND WERE SOLD IN THE MONTH OF MARCH AND APRIL, 2015. THE ACQUISITION OF SHARES ARE ESTABLISHED BY WAY OF PRODUCING DOCUM ENTS AND THE PAYMENT OF PURCHASE 108 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. CONSIDERATION THROUGH BANKING CHANNEL AND DEMATERIA LIZATION OF THE SHARES IN THE DEMAT ACCOUNT IN THE MONTH OF PURCHASE ITSELF I.E. SEPTEMBER, 2013. THUS FROM THE CHAIN OF TRANSACTIONS FROM THE PURCHASE TO SALE, TH ERE IS NO ABNORMALITY FOUND. M/S. MODI UDYOG LIMITED DATE OF INITIAL PURCHASE NO. OF SHARES PURCHASE CONSIDERATION DATE OF DEMATERIALIZATION. DATE OF SALE. NO. OF SHARES SOLD 1 2 3 4 5 6 19.12.2014 3,00,000 30,00,000 27.12.2015 18.12.2015 TO 23.12.2015 42,000 SALE CONSIDERATION CAPITAL GAIN 7 8 9 10 11 12 9,546,724/- 91,15,123/- - - - - THE ASSESSEE PURCHASED 3,00,000 SHARES OF M/S. MODI UDYOG LIMITED FOR A TOTAL CONSIDERATION OF RS. 30,00,000/- ON 19.12.2014. TH US THE ASSESSEE HAS PURCHASED THE SHARES AT PAR AND THE PURCHASE CONSIDERATION WAS PA ID THROUGH BANKING CHANNEL AS REFLECTED IN THE BANK ACCOUNT OF THE ASSESSEE. THE SHARES WERE THEREAFTER DEMATERIALIZED ON 27 TH FEBRUARY, 2015 WITHIN A PERIOD OF LESS THAN 3 MONT HS. THEREAFTER THE ASSESSEE SOLD PART OF THE SHARES IN THE MONTH O F DECEMBER, 2015 I.E. FROM 18.12.2015 TO 23.12.2015. THE SHARES WERE SOLD THRO UGH STOCK EXCHANGE AT THE PREVAILING PRICE ON THE FLOOR OF STOCK EXCHANGE. TH E HOLDING OF THE SHARES IN THE DEMAT ACCOUNT CANNOT BE DISPUTED. ACCORDINGLY THE TRANSAC TIONS CANNOT BE HELD AS BOGUS. 109 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THUS ALL THESE TRANSACTIONS ARE MATTER OF RECORD AN D ALSO IN THE PUBLIC DOMAIN, THE SCHEME OF MERGER WAS DULY APPROVED BY THE HONBLE B OMBAY HIGH COURT. THESE SHARES WERE SOLD BY THE ASSESSEE FROM THE DEMAT ACCOUNT AN D AT A PREVAILING RATE OF STOCK EXCHANGE. THEREFORE, THE SALE CONSIDERATION AT THE RATE WHICH IS PREVAILING ON THE DATE OF SALE CANNOT BE DISPUTED THOUGH THE RISE IN THE P RICE MAY BE DUE TO SOME RIGGING ACTIVITY BUT UNTIL AND UNLESS IT IS ESTABLISHED THA T THE ASSESSEE WAS PART OF THE RIGGING ACTIVITY, THE BENEFIT RECEIVED BY THE ASSESSEE BECA USE OF THE STEEP RISE IN THE SHARE PRICE CANNOT BE A SOLE BASIS FOR TREATING THE TRANS ACTION AS BOGUS TRANSACTION. IT IS CLEAR FROM THE RECORD THAT THE AO HAS NOT EVEN CONFRONTED THE STATEMENTS OF THE THIRD PARTY RECORDED BY THE INVESTIGATION WING KOLKATA WITH THE ASSESSEE DESPITE THE FACT THAT STATEMENT UNDER SECTION 131 OF THE IT ACT WAS RECOR DED BY THE AO WHEREIN THE AO HAS CONFRONTED THE ASSESSEE WITH ASSESSEES OWN STATEME NTS RECORDED UNDER SECTION 132(4) AND UNDER SECTION 131 BY THE INVESTIGATION WING KOL KATA. THE AO HAS ALSO CONFRONTED WITH THE ASSESSEES AFFIDAVIT FILED BY THE ASSESSEE RETRACTING THE EARLIER STATEMENTS BUT THE AO HAS NOT EVEN MADE ANY REFERENCE OF THOSE STA TEMENTS OF THE THIRD PARTY RECORDED BY THE INVESTIGATION WING KOLKATA. THUS I T APPEARS THAT AT THE TIME OF RECORDING THE STATEMENT OF THE ASSESSEE AS ON 14.12 .2017, EITHER THE AO WAS NOT HAVING THOSE STATEMENTS OF THIRD PARTY RECORDED BY THE INVESTIGATION WING KOLKATA OR THE SAME WERE INTENTIONALLY NOT CONFRONTED TO THE A SSESSEE. IN BOTH SITUATION THE RELIANCE PLACED BY AO ON THESE STATEMENTS WHILE PAS SING THE ASSESSMENT ORDER DATED 28.12.2017 AT THE BACK OF THE ASSESSEE IS A CLEAR V IOLATION OF PRINCIPLES OF NATURAL JUSTICE 110 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AND, THEREFORE, THE ASSESSMENT ORDER BASED SOLELY O N THE STATEMENTS IS NOT VALID. THE LD. CIT (A) HAS GIVEN A FINDING ON THIS ISSUE IN PA RA 11.2 TO 28 AS UNDER :- 11.2. I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMIT TED BY THE LD. A/R AND THE ORDER OF AO. I HAVE ALSO GONE THROUGH VARIO US JUDGMENTS CITED BY THE LD. A/R AND THOSE CONTAINED IN THE ORDER OF AO. I HAVE ALSO GONE THROUGH THE APB PAGE NO. 1 TO 426 FILED BY THE LD. A/R. 11.3 BRIEFLY, THE LD. AO HAS DISALLOWED THE CLAIM O F U/S 10(38) OF THE ACT AND HAS MADE ADDITION OF RS. 11,75,14,258/- & CONSE QUENT COMMISSION U/S 69C OF RS. 23,50,285/- ON THE BASIS OF THE FOLL OWING EVIDENCES ELABORATED IN THE ORDER U/S 143(3)/ 153A OF THE ACT ; 1. THAT THE MAIN PERSON OF THE GROUP SHRI SANJAY CH HABRA HAS MADE AN DECLARATION U/S 132(4) OF THE ACT THAT LTCG OF RS. 26 CRORES ( ROUNDED OFF) EARNED BY HIM AND HIS FAMILY MEMBERS WAS NOT GENUINE AND WAS OFFERED FOR TAXATION DURING THE COURSE OF SEARCH ON 22-07-2015. THIS STATEMENT WAS RETRACT ED LATER BY FILING AFFIDAVIT DATED 16-12-2015. SUCH RETRACTION WAS REITERATED BEFORE THE ADIT (INV) WHEN SHRI CHHABRA WAS SUMMONE D U/S 131 OF THE ACT DATED 29-07-2016 OF THE ACT. 2. THAT THE UNDERLYING FINANCIAL OF SHARE PURCHASE WERE WEAK AS THE SAID COMPANY HAS NO FUNDAMENTALS NOR THERE W AS ANY CORPORATE ANNOUNCEMENT WHICH COULD JUSTIFY THE SHAR E PURCHASE BY THE APPELLANT. 3. THAT THE LD. AO LIST SHARE PRICE MOVEMENT OF THE COMPANY FROM 2011 TO 2014 IN ABOUT 20 ODD PAGES OF THE HIS ORDER . THEREAFTER BELL SHAPED TRADING PATTERN IS DISCUSSED TO DRAWN A N INFERENCE THAT THE PRICE MOVEMENT WAS RIGGED BY THE APPELLANT. 4. FOR THE A.YRS 2014-15 THE LD. AO EXTRACTED THE S TATEMENT OF THE FOLLOWING:- 111 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. S. NO. STATEMENT OF PERSON DATE OF STATEMENT FROM PAGE TO COMMENT 1 NITESH CHOUDHARY NOT EVIDENT 18 TO 19 STATEMENT NOT PROVIDED 2 DEEPA DALMIA 13-1-2016 20 TO 26 STATEMENT NOT PROVIDED 3 ALOK HARLALKA 14-1-2016 27 TO 38 STATEMENT NOT PROVIDED 4 ANIL KEDIA 16 - 6 - 2015 39 TO 48 STATEMENT PROVIDED BY LEARNED AO WITH SCN 5 SANJAY VORA 8-4-2015 81 TO 97 STATEMENT NOT PROVIDED 6 DEEPAK PATWARI 22-7-2013 98 TO 101 STATEMENT NOT PROVIDED NB: ALL THE STATEMENT ARE RECRIDED PRIOR TO THE DAT E OF SEACH ON APPELLANT EXCEPT THAT OF DEEPA DALMIA & ALOK HARLALKA 5. THAT LD. AO OBJECTED TO THE PHYSICAL PURCHASE OF SHARES STATING THAT IT IS NOT PERMISSIBLE UNDER THE LAW. 11.4 THE LD. AO BASED ON INFORMATION IN THE FORM OF VARIOUS STATEMENT IN HIS POSSESSION ISSUED A SCN TO THE APP ELLANT. COPIES OF THE STATEMENT OF SH ANIL KEDIA (AT S. NO. 4) WAS PR OVIDED WERE PROVIDED. FOR STATEMENT OF OTHER PERSONS MENTIONED IN SERIAL NO. 1 TO 6 (EXCEPT S NO. 4) NEITHER THE STATEMENT WAS PROVID ED NOR CROSS EXAMINATION ALLOWED DESPITE SPECIFIC REQUEST IN WRI TING BY THE LD. A/R. 12. I HAVE CAREFULLY STUDIED THE ORDER AND SUBMISSI ONS MADE. I AM OF THE VIEW THAT THE LD. AO DISALLOWANCE U/S 68 IS NOT TENABLE DUE TO FOLLOWING REASONS; ADDITION MADE ON THE BASIS OF STATEMENT OF SHRI SANJAY CHHABRA & STATEMENT OF 3 RD PERSONS- THE ENTRY OPERATORS. 13. THE AO HAS DISALLOWED CLAIM OF EXEMPTION U/S 10 (38) OF THE SET ON THE BASIS OF STATEMENTS MADE U/S 132(4)- RETRACT ED LATER BY FILING SUBSEQUENT AFFIDAVITS. THE AO REFERRED & RELIED ON THE STATEMENTS OF VARIOUS ENTRY OPERATORS. THE AO ALSO REFERRED TO TH E INQUIRY CONDUCTED U/S 133(6) OF THE ACT ON PENNY STOCK COMPANY, AND T HE REPORT OF EXPERT COMMITTEE. 13.2 IN THE DETAILED SUBMISSION MADE BY THE ASSESSE E IT HAS VEHEMENTLY ARGUED THAT THE SETTLED POSITION OF LAW IS THAT ADDITION CANNOT BE MADE SIMPLY ON THE BASIS OF STATEMENT OF THE ASSESSEE OR 112 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE 3 RD PERSON ALONE. THE SAME HAS TO BE SUBSTANTIATED AND CORROBORATED EITHER BY POST SEARCH ENQUIRIES OR BY LINKING THE MATERIAL FOUND IN SEARCH WITH THE STATEMENTS RELIED ON. 13.3 I AM IN AGREEMENT WITH THE LD. A/R THAT IT IS A SETTLED LAW THAT STATEMENT ALONE CANNOT BE TREATED AS INCRIMINATING MATERIAL FOR THE PURPOSES OF MAKING ADDITION FOR ASSESSMENT COMPLETE D U/S 153A/143(3). IT HAS BEEN HELD IN MANY JUDGMENTS THA T MERE STATEMENT U/S 132(4) OR U/S 131 IS NOT SUFFICIENT T O MAKE AN ADDITION. A STATEMENT MADE MUST BE RELATABLE TO INC RIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR THE S TATEMENT MUST BE MADE RELATABLE TO MATERIAL BY SUBSEQUENT INQUIRY /INVESTIGATIONS. HONTBLE HIGH COURT OF RAJASTHAN IN THE CASE OF MANT RI SHARE BROKERS PL (96 TAXMANN.COM 279) HAVE HELD AS UNDER: SECTION 69B OF THE INCOME-TAX ACT, 1961 - UNDISCLOS ED INVESTMENTS (BURDEN OF PROOF) - WHETHER WHERE EXCEP T STATEMENT OF DIRECTOR OF ASSESSEE-COMPANY OFFERING ADDITIONAL INCOME DURING SURVEY IN HIS PREMISES, THERE WAS NO OTHER MATERIAL EITHER IN FORM OF CASH, BULLION, JEWELLERY OR DOCUMENT OR IN ANY O THER FORM TO CONCLUDE THAT STATEMENT MADE WAS SUPPORTED BY SOME DOCUMENTARY EVIDENCE, SAID SUM COULD NOT BE ADDED I N HANDS OF ASSESSEE AS UNDISCLOSED INVESTMENTS - HELD, YES [PA RAS 10-11] [IN FAVOUR OF ASSESSEE] PARA 10 & 11 OF THE ORDER IS AS UNDER 10. BEFORE PROCEEDING WITH THE MATTER, IT WILL NOT BE OUT OF PLACE TO MENTION THAT EXCEPT THE STATEMENT IN THE LETTER, THE AO HAS NO OTHER MATERIAL ON RECORD TO ASSESS THE INCOME OF RS . 1,82,00,000/-. 11. IT IS SETTLED PROPOSITION OF LAW THAT MERELY ON TH E STATEMENT THAT TOO ALSO WAS TAKEN IN VIEW OF THREAT GIVEN IN QUESTION NO.36 AS NARRATED BY MR. GUPTA AND THE SAME SOUGHT TO HAVE B EEN RELIED UPON, THERE IS NO OTHER MATERIAL EITHER IN THE FORM OF CASH, BULLION, JEWELLERY OR DOCUMENT IN ANY OTHER FORM WHICH CAN C OME TO THE CONCLUSION THAT THE STATEMENT MADE WAS SUPPORTED BY SOME DOCUMENTARY EVIDENCE. WE HAVE GONE THROUGH THE RECO RD AND FIND THAT THE CIT (A) HAS RIGHTLY OBSERVED AS STATED HER EINABOVE, WHICH WAS CONFIRMED BY THE TRIBUNAL. 113 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. IT WOULD NOT BE OUT OF PLACE TO MENTION THAT THIS ORDER OF HON'BLE RAJASTHAN HIGH COURT HAS BEEN CONFIRMED BY HON'BLE SUPREME COURT ALSO. FURTHER, HON'BLE DELHI HIGH COURT IN CASE OF HARJEE V AGARWAL (70 TAXMANN.COM 95) HELD THUS: HARJEEV AGGARWAL [2016] 70 TAXMANN.COM 95 (DELHI) A PLAIN READING OF SECTION 132(4) INDICATES THAT THE AUTHORIZED OFFICER IS EMPOWERED TO EXAMINE ON OATH ANY PERSON WHO IS FOUND IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, D OCUMENTS, MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ART ICLE OR THING. THE EXPLANATION TO SECTION 132(4), WHICH WAS INSERT ED BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 WITH EFFECT F ROM 1-4- 1989, FURTHER CLARIFIES THAT A PERSON MAY BE EXAMIN ED NOT ONLY IN RESPECT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS FOUND AS A RESULT OF SEARCH BUT ALSO IN RESPECT OF ALL MATTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PR OCEEDING UNDER THE ACT. HOWEVER, AS STATED EARLIER, A STATEM ENT ON OATH CAN ONLY BE RECORDED OF A PERSON WHO IS FOUND IN POSSES SION OF BOOKS OF ACCOUNT, DOCUMENTS, ASSETS, ETC. PLAINLY, THE IN TENTION OF THE PARLIAMENT IS TO PERMIT SUCH EXAMINATION ONLY WHERE THE BOOKS OF ACCOUNT, DOCUMENTS AND ASSETS POSSESSED BY A PERSON ARE RELEVANT FOR THE PURPOSES OF THE INVESTIGATION BEING UNDERTA KEN. NOW, IF THE PROVISIONS OF SECTION 132(4) ARE READ IN THE CONTEX T OF SECTION 158BB(1), READ WITH SECTION 158B(B), IT IS AT ONCE CLEAR THAT A STATEMENT RECORDED UNDER SECTION 132(4) CAN BE USED IN EVIDENCE FOR MAKING A BLOCK ASSESSMENT ONLY IF THE SAID STAT EMENT IS MADE IN THE CONTEXT OF OTHER EVIDENCE OR MATERIAL DISCOV ERED DURING THE SEARCH. A STATEMENT OF A PERSON, WHICH IS NOT RELAT ABLE TO ANY INCRIMINATING DOCUMENT OR MATERIAL FOUND DURING SEA RCH AND SEIZURE OPERATION CANNOT, BY ITSELF, TRIGGER A BLOC K ASSESSMENT. THE UNDISCLOSED INCOME OF AN ASSESSEE HAS TO BE COMPUTE D ON THE BASIS OF EVIDENCE AND MATERIAL FOUND DURING SEARCH. THE STATEMENT RECORDED UNDER SECTION 132(4) MAY ALSO BE USED FOR MAKING THE ASSESSMENT, BUT ONLY TO THE EXTENT IT IS RELATABLE TO THE INCRIMINATING EVIDENCE/MATERIAL UNEARTHED OR FOUND DURING SEARCH. 114 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. IN OTHER WORDS, THERE MUST BE A NEXUS BETWEEN THE S TATEMENT RECORDED AND THE EVIDENCE/MATERIAL FOUND DURING SEA RCH IN ORDER TO FOR AN ASSESSMENT TO BE BASED ON THE STATEMENT RECO RDED.. 13.4 THOUGH THE ABOVE PRINCIPLE IS LAID DOWN IN RELATION TO ASSESSMENT OF BLOCK PERIOD U/S 158 BC OF THE ACT, THE SAME WAS ALSO APPLIED IN RESPECT OF ASSESSMENT U/S 153A BY DELHI HIGH COURT IN CASE OF BEST INFRASTRUCTURE (84 TAXMANN.COM 287) WHEN IT WAS HELD THUS: 38. FIFTHLY, STATEMENTS RECORDED UNDER SECTION 132 (4) OF THE ACT OF THE ACT DO NOT BY THEMSELVES CONSTITUTE INCRIMIN ATING MATERIAL AS HAS BEEN EXPLAINED BY THIS COURT IN HARJEEV AGGARWA L (SUPRA). 14. COMING TO THE STATEMENTS OF VARIOUS ENTRY OPERATORS IN THE ORDER. I HAVE PERUSED THE STATEMENTS FROM THE LD. AO'S ORDER & HAVE GONE THROUGH THE ENTIRE STATEMENT IN THE ORDER. I AGREE THAT VARIOUS ENTRY OPERATORS HAS STATED THAT CERTAIN ACCOMMODATION ENT RIES WAS PROVIDED IN THE FOUR' OF DOUBTFUL LTCG THROUGH CERTAIN LISTE D PENNY STICK COMPANIES, BUT NOWHERE IN THE STATEMENT SUCH PERSON S HAVE GIVEN SPECIFICALLY NAME OF THE APPELLANT NOR HAS STATED S PECIFICALLY THAT THE CASH FROM APPELLANT WAS GIVEN TO HIM OR EQUIVALENT AMOUNT OF CASH WAS GIVEN WHICH WAS ROTATED/ROUTED AND GIVEN IN THE FORM OF ACCOMMODATION ENTRIES IN THE FORM OF LTCG. IT MAY B E POINTED OUT THAT STATEMENT OF DEEPA DALMIA & ALOK HARLALKA WERE RECORDED ON 13- 01-2016 & 14-01-2016(AFTER THE DATE OF SEARCH ON AP PELLANT). EVEN IN THESE STATEMENTS THERE IS NO DIRECT EVIDENCE IMPLIC ATING THE APPELLANT. 14. 2 IN MY VIEW THE STATEMENTS WERE MERELY A PIECE OF INFORMATION AND DOES NOT QUALIFY AS EVIDENCE TO MAKE A DISALLOWANCE U/S 10(38) OF THE ACT. 14.3 FURTHER, MERE STATEMENT OF 3 RD PARTY IS NOT ENOUGH TO MAKE ADDITION IN THE HAND OF APPELLANT. IT WOULD NOT BE OUT OF PLACE TO MENTION THAT MERE STATEMENT OF APPELLANT RECORDED DURING TH E COURSE OF SEARCH U/S 132(4), AS ALREADY POINTED OUT, IS NOT SUFFICIENT T O MAKE ADDITION HAS BEEN DISCUSSED ABOVE. 115 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 14.4 FURTHER EVEN THE DISCUSSION BY THE AO ABOUT DUBIOUS FINANCIALS OF THE PENNY STOCK COMPANY OR REFERENCE TO THE REPORT OF SIT EXTRACTS OF WHICH FORMS PART OF THE ASSESSMENT ORDER ARE INDICA TIVE AND ARE OF THE NATURE OF INFORMATION. THE AO ALSO HAS FEW LINE ABO UT SEBI INQUIRY BUT NOTHING SPECIFIC HAS BEEN MENTIONED. I MAY ADD THAT SEBI REPORT IS RELATED TO THE STOCK MARKET REGULATIONS & ITS ORDER IS NOT IN ASSISTANCE TO THE REVENUE. THUS, STATEMENT OF ENTRY OPERATOR, DUBIOUS FINANCIAL OF THE PENNY STOCK COMPANY, OBSERVATION OF LD. AO A BOUT SEBI & SIT ARE PIECES OF INFORMATION AND THE AO WAS EXPECTED T O CONVERT IT INTO EVIDENCES BY FURTHER INQUIRY WHICH WOULD COMPREHENS IVELY PROVE THAT ITS APPELLANT CASH WHICH WAS ROUTED AND CAME BACK TO AP PELLANT IN THE FORM OF LTCG. PRECEDENCE OF DOCUMENTARY EVIDENCES OVER ORAL EVIDE NCE 15. THE LD. AO HAD ISSUE A DETAILED SCN WHICH WAS R EPLIED BY THE APPELLANT BY FILING ALL THE NECESSARY DOCUMENTA RY EVIDENCE RELATING TO PURCHASE AND CONSEQUENT PAYMENT THROUGH BANK ACCOUNTS, THE SALE OF SHARES AND RECEIPT OF PROCEED S IN THE BANK ACCOUNT. IN SHORT FOLLOWING DETAILS WERE FILE BEFOR E THE LD. AO. PARTICULARS PB PAGE NO. B) DOCUMENTS REGARDING ACQUISITION OF SHARES OF SH ARES OF LAMBODAR NIRMIT LTD. LATER ON MERGED INTO INDIA INFOTECH AND SOFTWA RE LTD SUBMITTED IN PB OF AY 2013-14 AND THE PAGE NO. MENTIONED HEREIN BELOW ARE PAGE NO. OF PB OF AY 2013-14 :- DATED:- 01.02.2011:- THE ASSESSEE PURCHASED SHARES OF L AMBODAR NIRMIT FROM CHIN PURNI TRADERS PVT. LTD. PURCHASE BILL. THE COPY OF RELEVANT BANK A/C REFLECTING PAYMENT THE COPY OF SHARE CERTIFICATE DATED:- 15.08.2011 :- SHARES TRANSFERRED IN THE NAM E OF ASSESSEE THE COPY OF TRANSFER LETTER RECEIVED FROM COMPANY DATED :- 14.02.2012 :- THE COMPANY SPLITTED ITS SH ARE IN THE RATIO OF 1:10 THE COPY OF LETTER RECEIVED FROM COMPANY THE COPY OF SHARE CERTIFICATE. IN MARCH-2013 THE SHARES WERE SEND FOR DEMATERIALIZ ATION AND THE SAME WERE CREDITED IN D-MAT A/C OF THE ASSESSEE ON 27.02. 2012. THE COPY OF REQUEST SLIP FOR DEMATERIALIZATION OF SHA RES COPY OF D-MAT A/C DATED :- MAY :-2012 :- THE COMPANY NAMING LAMBODA R NIRMIT LTD MERGED 116 117 118-119 120 121 122 123 116 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. INTO INDIA INFOTECH & SOFTWARE LTD BY THE ORDER OF HIGH COURT. THE COPY OF ORDER OF HIGH COURT ON THE BASIS OF ORDER OF HIGH COURT AGAINST THE SH ARES OF 20,00,000 TOTAL 40,00,000 SHARES WERE RECEIVED IN D-MAT A/C THE COPY OF D-MAT B) DOCUMENTS REGARDING SHARES SOLD FROM 09.04.2013 TO 12.08.2013 IS ENCLOSED IN PB OF THE YEAR UNDER CONSIDERATION :- THE COPY OF LEDGER A/C OF SHARES SHOWING THE DATE WIS E DETAIL OF SALES COPY OF BILLS OF SALES COPY OF D-MAT A/C REFLECTING THE ENTRY OF SALES OF SHA RES COPY OF LEDGER A/C OF ASSESSEE IN BOOKS OF BROKER 166 - 167 124-155 170 107-108 109-122 188-190 195-210 NB : SIMILAR DETAIL ARE FILED FOR EACH OF THE A.YRS WHEREIN DETAILS OF PURCHASES, THE PAYMENTS FROM RESPECTIVE BANK ACCOUNTS, SALE OF SHARES, WITH AMOUNT RECEIVED FROM THE EXCHANGE HAS BEEN FILED. 15.2 BEFORE PROCEEDINGS FURTHER, IT WOULD NOT BE OU T OF PLACE TO DISCUSS THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF PULLANGODE RUBBERS PRODUCES CO. LTD. (91 ITR 18) AS OBSERVED AS UNDER: 'IT IS NO DOUBT TRUE THAT ENTRIES IN THE ACCOUNT BO OKS OF THE ASSESSEE AMOUNT TO AN ADMISSION THAT THE AMOUNT IN QUESTION WAS LAID OUT OR EXPENDED FOR THE CULTIVATI ON, UPKEEP OR MAINTENANCE OF IMMATURE PLANTS FROM WHICH NO AGRICULTURAL INCOME WAS DERIVED DURING THE PREVIOUS YEAR. AN ADMISSION IS AN EXTREMELY IMPORTANT PIECE:OF EVIDEN CE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN TO THE PERSON WHO MADE THE ADMISSION TO SHOW THAT IT IS INCORRECT .' THE CRUX OF THE AFORESAID DECISION IS THAT A DECLAR ATION OR DISCLOSURE MADE BY THE PERSON IS BINDING UNLESS IT IS REBUTTED BY T HE VALID EVIDENCES. 15.3 IN THE PRESENT CASE THE MAIN PERSON OF THE GRO UP ADMITTED CERTAIN INCOME U/S 132(4) OF THE ACT WHICH WAS LATER RETRAC TED AND REASONS FOR SUCH RETRACTION IS FILED IN THE FORM OF DOCUMEN TARY EVIDENCES, AS DISCUSSED ABOVE. THUS THE APPELLANT RETRACTED THE S TATEMENT U/S 117 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 132(4) OF THE ACT SHOWING THE ADMISSION BY HIM WAS INCORRECT BY FILING ALL THE POSSIBLE DOCUMENTARY EVIDENCES. 16. ONCE SUCH DOCUMENTARY EVIDENCES WERE PLACED ON RECORD BEFORE THE LD. AO, NO DEFECT POINTED OUT BY THE LD. AO. TH E LD. AO DID ISSUED A LETTER U/S 133(6) OF THE ACT TO THE COMPAN Y UNNO SHARE OF WHICH WERE SOLD BY THE APPELLANT. THIS INQUIRY LETT ER WAS RESPONDED BY THE COMPANY COPY OF WHICH WAS ACCEPTED BY THE LD . AO AND NO FURTHER ACTION TAKEN. COPY OF SAME IS PLACE IN APB PAGE NO 383 & 350 RESPECTIVELY. SIMILARLY LD. AO ISSUED NOTICE U/S 13 3(6) OF THE A FOR ALL THE A.YRS FOR THE SCRIPTS ON WHICH WAS EARNED. THE DETAILS OF INQUIRY ARE AS UNDER: A.YRS NAME OF THE SCRIPT REMARK 2012-13 21 ST CENTURY 133(6) OF THE ACT SERVED BUT NO REPLY RECEIVED 2013-14 JRI INDUSTRIES INDIA INFOTECH 133(6) OF THE ACT SERVED BUT NO REPLY RECEIVED REPLY RECEIVED. COPY AT APB 356 2014-15 UNNO INDIA INFOTECH REPLY RECEIVED. COPY AT APB 383 REPLY RECEIVED. COPY AT APB 356 2015-16 UNNO UNSHIRE SULABH ENGINEERNIG REPLY RECEIVED COPY AT APB 383 REPLY RECEIVED AS MENTIONED BY ID. ASSESSING OFFICER ON PG 167 OF HIS ORDER NO NOTICE ISSUED BEING ONLINE PURCHASED BY APPELLANT 2016-17 UNISHIRE URBAN MODI UDYOG REPLY RECEIVED AS MENTIONED BY ID. ASSESSING OFFICE R ON PG 167 OF HIS ORDER REPLY RECEIVED COPY AT APB PAGE 13 6 16.2 THUS IT CAN BE SEEN FROM THE TABLE ABOVE THAT IN RESPONSE TO INQUIRY U/S 133(6) OF THE ACT NO ADVERSE MATERIAL W AS COLLECTED BY THE LD. AO. 17. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS, ARGUMENTS ADVANCED AND CASE LAWS CITED. IT IS CLEAR THAT AO HAS BASED DENIAL OF EXEMPTION U/S 10(38) OF THE ACT ON THE BASIS OF STATEMENT OF THE SANJAY CHHABRA, THE BROTHER OF APPELLANT , AND INFORMATION RECEIVED FROM THE 118 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. INVESTIGATION WING IN THE FORM OF STATEMENT OF ENTR Y OPERATORS. HOWEVER IN THE STATEMENT OF ENTRY OPERATORS NO QUES TION WAS EVER PUT TO ANY OF THE ENTRY OPERATOR REGARDING TRANSACTIONS THROUGH THE COMPANIED, THROUGH WHICH ALLEGED CASH OF APPELLANT WAS ROUTED. 17.2 ON ONE HAND THE AO HAS ORAL STATEMENTS MADE BY APPELLANT & ENTRY OPERATORS, THE APPELLANT HAS RETRACTED THE ST ATEMENT BY FILING AFFIDAVITS & DOCUMENTARY EVIDENCES LISTED ABOVE. IT IS A SETTLED LAW THAT DOCUMENTARY EVIDENCES WILL ALWAYS CARRY MORE W EIGHT THAN THE ORAL STATEMENTS. AFTER THE ORAL STATEMENTS WERE AVA ILABLE TO THE AO THE APPELLANT PROVED THE ORAL STATEMENTS TO BE INCO RRECT BY FILING DOCUMENTARY EVIDENCES. THEREAFTER THE AO DID NOT PR OVE THE DOCUMENTARY EVIDENCE TO BE UNTRUE/ BOGUS/ NON GENUI NE. THE AO NEVER CONFRONTED THE DOCUMENTARY EVIDENCE TO THE PE RSON WHOSE ORAL STATEMENT WAS RECORDED IN THIS CASE THE ENTRY OPERA TOR. THEREFORE THE ORAL STATEMENT LOSSES THEIR EVIDENTIARY VALUE IN LI GHT OF THE DOCUMENTARY EVIDENCE PLACED BY APPELLANT. EVEN THE ORAL STATEMENT IS GENERAL AND DOES NOT PIN POINT OR MENTION APPELLANT NAME ANYWHERE. NOR DOES IT MENTION ANYWHERE THAT CASH FROM APPELLA NT WAS RECEIVED & IT WAS SAME CASH WHICH WAS ROUTED BACK TO THE APP ELLANT BANK ACCOUNT. CONSIDERING THE ABOVE DOCUMENTARY EVIDENCE S CLEARLY OUT WEIGHT THE ORAL EVIDENCES RELIED UPON. 17.3 FURTHER THE AO HAS DISCUSSED THE ABNORMAL RISE I THE SHARE PRICE OF THE PENNY STOCK WITHOUT ANY UNDER LYING FUNDAMENTAL S. RECENTLY HON'BLE ITAT DELHI IN THE CASE OF MUKTA GUPTA VS. ITO, ITA 2766/DEL/2018 ORDER DATED 26-11-2018 HAVE HELD THAT CAPITAL GAINS CANNO T BE TREATED AS BOGUS SOLELY ON THE BASIS THAT THE PRICE OF THE SHA RES HAS RISEN MANIFOLD AND THE REASON FOR ASTRONOMICAL RISE IS .N OT RELATED TO ANY FUNDAMENTALS OF MARKET. IF THE TRANSACTIONS ARE DUL Y PROVED BY TRADING FROM STOCK EXCHANGE AND THE DOCUMENTATION I S PROPER, THE GAINS CANNOT BE ASSESSED AS UNEXPLAINED CREDIT OR A S UNEXPLAINED MONEY. IT WAS FURTHER OBSERVED BY THE HON'BLE ITAT JAIPUR DELHI THAT NOWHERE IT HAS BEEN FOUND THAT ASSESSEE WAS IN ANY MANNER FOUND TO BE BENEFICIARY OF ANY ACCOMMODATION ENTRY UNDER ANY INQUIRY OR INVESTIGATION. ONCE ALL THESE TRANSACTIONS ARE DULY PROVED BY TRADING 119 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. FROM STOCK EXCHANGE, THEN TO HOLD THE SALE OF SHARE S AS UNEXPLAINED CREDIT OR AS UNEXPLAINED MONEY CANNOT BE UPHELD. NOT PROVIDING THE CROSS EXAMINATIONS 18. IT WAS ALSO POINTED OUT THAT FOR THE A. YRS 201 4-15 ONLY THE COPY OF STATEMENT OF ANIL KEDIA WAS PROVIDED WITH THE SCN B Y THE LD. AO. COPY OF ANY OTHER STATEMENT WAS NOT PROVIDED NOT CR OSS EXAMINATION ALLOWED BY THE LD. AO. SIMILARLY FOR THE A. YRS 201 5-16 COPIES OF STATEMENT OF ANIL KEDIA & SANJAY VORA WAS PROVIDED WITH THE SCN FOR OTHER ENTRY OPERATORS NEITHER THE STATEMENT PROVIDE D NOR CROSS EXAMINATION ALLOWED BY THE LD. AO. IN THE A .YRS 20 16-17 THE LD. AO HAS NOT REFERRED TO ANY OF THE STATEMENT BY THE ENT RY OPERATOR. 18.2 THE LD. AIR HAS ALSO TAKEN A SPECIFIC LEGAL PL EA THAT NO CROSS EXAMINATION OF THE PERSONS, WHOSE STATEMENT WAS REL IED UPON, WAS GRANTED DESPITE SPECIFIC REQUEST MADE TO THE AO. TH E ASPECT OF NOT RANTING CROSS EXAMINATION HAS SPECIFICALLY BEEN ANS WERED BY THE HON'BLE ITAT JAIPUR IN THE CASE OF SHRI PRAMOD JAIN . THE RELEVANT EXTRACT ON THE ISSUE IS AS UNDER: AS REGARDS THE NON GRANT OF OPPORTUNITY TO CROSS E XAMINE, THE HONBLE SUPREME COURT IN CASE OF ANDAMAN TIMBER INDUSTRIES VS. CCE (SUPRA) WHILE DEALING WITH THE ISSUE HAS HELD IN PARA 5 TO 8 AS UNDER: 5. WE HAVE HEARD MR. KAVIN GULATI, LEARNED SENIOR COUNSEL APPEARING FOR THE ASSESSEE, AND MR. K. RADHAKRISHNAN, LEARNED SENIOR COUNSEL WHO APPEARED FOR THE REVENUE. 6. ACCORDING TO US, NOT ALLOWING THE ASSESSEE TO CR OSS-EXAMINE THE WITNESSES BY THE ADJUDICATING AUTHORITY THOUGH THE STATEMENTS OF THOSE WITNESSES WERE MADE THE BASIS OF THE IMPUGNED ORDER IS A SERIOUS FLAW W HICH MAKES THE ORDER NULLITY INASMUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE BECAUSE OF WHICH THE ASSESSEE WAS ADVERSELY AFFECTED. IT IS TO BE BORNE IN MIND THAT THE ORDER OF THE COMMISSIONER WAS BASED UPON THE STATEM ENTS GIVEN BY THE AFORESAID TWO WITNESSES. EVEN WHEN THE ASSESSEE DIS PUTED THE CORRECTNESS OF THE STATEMENTS AND WANTED TO CROSS-EXAMINE, THE ADJUDIC ATING AUTHORITY DID NOT GRANT THIS OPPORTUNITY TO THE ASSESSEE. IT WOULD BE PERTINENT TO NOTE THAT IN THE IMPUGNED ORDER PASSED BY THE ADJUDICATING AUTHORITY HE HAS SPECIFICALLY MENTIONED THAT SUCH AN OPPORTUNITY WAS SOUGHT BY TH E ASSESSEE. HOWEVER, NO SUCH OPPORTUNITY WAS GRANTED AND THE AFORESAID PLEA IS NOT EVEN DEALT WITH BY 120 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE ADJUDICATING AUTHORITY. AS FAR AS THE TRIBUNAL IS CONCERNED, WE FIND THAT REJECTION OF THIS PLEA IS TOTALLY UNTENABLE. THE TR IBUNAL HAS SIMPLY STATED THAT CROSS-EXAMINATION OF THE SAID DEALERS COULD NOT HAV E BROUGHT OUT ANY MATERIAL WHICH WOULD NOT BE IN POSSESSION OF THE APPELLANT T HEMSELVES TO EXPLAIN AS TO WHY THEIR EX-FACTORY PRICES REMAIN STATIC. IT WAS N OT FOR THE TRIBUNAL TO HAVE GUESS WORK AS TO FOR WHAT PURPOSES THE APPELLANT WA NTED TO CROSS-EXAMINE THOSE DEALERS AND WHAT EXTRACTION THE APPELLANT WANTED FR OM THEM. 7. AS MENTIONED ABOVE, THE APPELLANT HAD CONTESTED THE TRUTHFULNESS OF THE STATEMENTS OF THESE TWO WITNESSES AND WANTED TO DIS CREDIT THEIR TESTIMONY FOR WHICH PURPOSE IT WANTED TO AVAIL THE OPPORTUNITY OF CROSS-EXAMINATION. THAT APART, THE ADJUDICATING AUTHORITY SIMPLY RELIED UPO N THE PRICE LIST AS MAINTAINED AT THE DEPOT TO DETERMINE THE PRICE FOR THE PURPOSE OF LEVY OF EXCISE DUTY. WHETHER THE GOODS WERE, IN FACT, SOLD TO THE SAID D EALERS/WITNESSES AT THE PRICE WHICH IS MENTIONED IN THE PRICE LIST ITSELF COULD B E THE SUBJECT MATTER OF CROSS- EXAMINATION. THEREFORE, IT WAS NOT FOR THE ADJUDICA TING AUTHORITY TO PRESUPPOSE AS TO WHAT COULD BE THE SUBJECT MATTER OF THE CROSS -EXAMINATION AND MAKE THE REMARKS AS MENTIONED ABOVE. WE MAY ALSO POINT OUT T HAT ON AN EARLIER OCCASION WHEN THE MATTER CAME BEFORE THIS COURT IN CIVIL APP EAL NO. 2216 OF 2000, ORDER DATED 17.03.2005 WAS PASSED REMITTING THE CASE BACK TO THE TRIBUNAL WITH THE DIRECTIONS TO DECIDE THE APPEAL ON MERITS GIVING IT S REASONS FOR ACCEPTING OR REJECTING THE SUBMISSIONS. 8. IN VIEW THE ABOVE, WE ARE OF THE OPINION THAT IF THE TESTIMONY OF THESE TWO WITNESSES IS DISCREDITED, THERE WAS NO MATERIAL WIT H THE DEPARTMENT ON THE BASIS OF WHICH IT COULD JUSTIFY ITS ACTION, AS THE STATEM ENT OF THE AFORESAID TWO WITNESSES WAS THE ONLY BASIS OF ISSUING THE SHOW CA USE NOTICE. 18.3 THEREFORE, THE STATEMENT OF WITNESS CANNOT BE SOLE BASIS OF THE ASSESSMENT WITHOUT GIVEN AN OPPORTUNITY OF CROSS EX AMINATION AND CONSEQUENTLY IT IS A SERIOUS FLAW WHICH RENDERS THE ORDER A NULLITY. THE MUMBAI SPECIAL OF THE TRIBUNAL IN CASE OF GTC INDUS TRIES VS. ACIT (SUPRA) HAD THE OCCASION TO CONSIDER THE ADDITION M ADE BY THE AO ON THE BASIS OF SUSPICION AND SURMISES AND OBSERVED IN PARA 46 AS UNDER:- '46. IN SITUATIONS LIKE THIS CASE, ONE MAY FALL INT O REALM OF 'PREPONDERANCE OF PROBABILITY' WHERE THERE ARE MANY PROBABLE FACTO RS, SOME IN FAVOUR OF THE ASSESSEE AND SOME MAY GO AGAINST THE ASSESSEE. BUT THE PROBABLE FACTORS HAVE TO BE WEIGHED ON MATERIAL FACTS SO COL LECTED. HERE IN THIS 121 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. CASE THE MATERIAL FACTS STRONGLY INDICATE A PROBABI LITY THAT THE WHOLESALE BUYERS HAD COLLECTED THE PREMIUM MONEY FO R SPENDING IT ON ADVERTISEMENT AND OTHER EXPENSE AND IT WAS THEIR LI ABILITY AS PER THEIR MUTUAL UNDERSTANDING WITH THE ASSESSEE ANOTHER VERY STRONG FACTOR IS THAT THE ENTIRE SCHEME OF 'TWIN BRANDING' AND COLLE CTION OF PREMIUM WAS SO DESIGNED THAT ASSESSEE-COMPANY NEED NOT INCU R ADVERTISEMENT EXPENSES AND THE RESPONSIBILITY FOR S ALES PROMOTION AND ADVERTISEMENT LIES WHOLLY UPON WHOLESALE BUYERS WHO WILL BORNE OUT THESE EXPENSES FROM ALLEGED COLLECTION OF PREMI UM. THE PROBABLE FACTORS COULD HAVE GONE AGAINST THE ASSESSEE ONLY I F THERE WOULD HAVE BEEN SOME EVIDENCE FOUND FROM SEVERAL SEARCHES EITH ER CONDUCTED BY ORI OF BY THE DEPARTMENT THAT ASSESSEE-COMPANY WA S BENEFICIARY OF ANY SUCH ACCOUNTS, AT LEAST SOMETHING WOULD HAVE BEEN UNEARTHED FROM SUCH GLOBAL LEVEL INVESTIGATION BY TWO CENTRAL GOVERNMENT AUTHORITIES. IN CASE OF CERTAIN DONATIONS GIVEN TO A CHURCH, ORIGINATING THROUGH THESE BENAMI BANK ACCOUNTS ON THE BEHEST OF ONE OF THE EMPLOYEES OF THE ASSESSEE COMPANY, DOES NOT IMPLICA TE THAT GTC AS A CORPORATE ENTITY WAS HAVING THE CONTROL OF THESE BA NK ACCOUNTS COMPLETELY. WITHOUT GOING INTO THE AUTHENTICITY AND VERACITY OF THE STATEMENTS OF THE WITNESSES SMT. NIRMLALA SUNDARAM, WE ARE OF THE OPINION THAT THIS ONE INCIDENT OF DONATION THROUGH BANK ACCOUNTS AT THE DIRECTION OF ONE OF THE EMPLOYEE OF THE COMPANY DOES NOT IMPLICATE THAT THE ENTIRE PREMIUM COLLECTED ALL THR OUGHOUT THE COUNTRY AND DEPOSITED IN BENAMI BANK ACCOUNTS ACTUALLY BELO NGS TO THE ASSESSEE-COMPANY OR THE ASSESSEE-COMPANY HAD DIRECT CONTROL ON THESE BANK ACCOUNTS. ULTIMATELY, THE ENTIRE CASE OF THE REVENUE HINGES UPON THE PRESUMPTION THAT ASSESSEE IS BOUND TO HAVE SOME LARGE SHARE IN SO-CALLED SECRET MONEY IN THE FORM O F PREMIUM AND ITS CIRCULATION. HOWEVER, THIS PRESUMPTION OR SUSPICION HOW STRONG IT MAY APPEAR TO BE TRUE, BUT NEEDS TO BE CORROBORATED BY SOME EVIDENCE TO ESTABLISH A LINK THAT GTC ACTUALLY HAD SOME KIND OF A SHARE IN SUCH SECRET MONEY. IT IS QUITE A TRITE LAW THAT SUSPICIO N HOWSOEVER STRONG MAY BE BUT CANNOT BE THE BASIS OF ADDITION EXCEPT F OR SOME MATERIAL EVIDENCE ON RECORD. THE THEORY OF 'PREPONDERANCE OF PROBABILITY' IS APPLIED TO WEIGH THE EVIDENCES OF EITHER SIDE ARID DRAW A CONCLUSION IN FAVOUR OF A PARTY WHICH HAS MORE FAVOURABLE FACT ORS IN HIS SIDE. THE CONCLUSIONS HAVE TO BE DRAWN ON THE BASIS OF CE RTAIN ADMITTED FACTS AND MATERIALS AND NOT ON THE BASIS OF PRESUMP TION OF FACTS THAT MIGHT GO AGAINST ASSESSEE. ONCE NOTHING HAS BEEN PR OVED AGAINST THE ASSESSEE WITH AID OF ANY DIRECT MATERIAL ESPECIALLY WHEN VARIOUS ROUNDS OF INVESTIGATION HAVE BEEN CARRIED OUT, THEN NOTHING CAN BE IMPLICATED AGAINST THE ASSESSEE.' FURTHER IT IS NOTICED THAT THE APPELLANT HAS FAIRLY REGULAR IN SHARE TRANSACTIONS IN PAST TOO. NOT ONLY THE APPELLANT HA S INCURRED PROFITS I 122 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PAST BUT ALSO IT HAS INCURRED LOSSES TOO. THE SHARE TRANSACTIONS IN LAST FEW F.YRS. ARE LISTED AS UNDER: AY TURNOVER OF THE SHARE TRANSACTIONS SHORT TERM PROFIT/LOSS FROM SHARES LONG TERM PROFIT/LOSS FROM SHARES 2007-8 14,28,582/- (-) 1,10,328/- 2,05,454/ - - 2008-9 8,68,959/- 1,75,256/- (-) 1,960 2011-12 83,75,024/- 36,64,965/- 2,17,689/- FURTHER THE ASSESSEE'S FAMILY CONCERN M/S MOTISONS SHARES PVT LTD IS ALSO DOING SHARE BUSINESS. THE ASSESSEE WAS PROMOTE R/DIRECTOR AND SHAREHOLDER OF THIS COMPANY. THIS COMPANY IS REGIST ERED IN SEBI, AND MEMBER OF NATIONAL STOCK .EXCHANGE AND BOMBAY STOCK EXCHANGE.. THIS COMPANY IS DEALING IN SHARE ON BROKERAGE BASIS . DUE TO THIS THE ASSESSEE HAS VAST EXPERIENCE IN SHARE BUSINESS AND TIME TO TIME GETS INSIDE INFORMATION FROM THE SHARE MARKET. IN MY VIEW IT ALL INDICATES THAT APPELLANT IS FAIRL Y EXPOSED TO CAPITAL MARKET WITH PROFITS AND LOSSES BOTH IN HER KITTY IN LAST F EW YEARS JUDGMENTS OF HON'BLE HIGH COURT OF RAJASTHAN AND IT AT JAIPUR. 18.4 FROM THE ABOVE IT CAN BE NOTED THAT THE ASSESS EE HAS FURNISHED ALL THE EVIDENCES IN SUPPORT OF THE TRANS ACTION IN THE SHARES OF PENNY STOCK SHARE ON WHICH HE EARNED LONG TERM C APITAL GAIN. THE TRANSACTIONS ARE THROUGH BANKING CHANNEL AND ARE SU PPORTED BY THE CONTRACT NOTE OF THE BROKER TO WHOM BROKERAGE IS PA ID. THE STATEMENT REFERRED IN THE ASSESSMENT ORDER HAS NO R ELEVANCE AS THERE IS NO NAME OF THE ASSESSEE. 'THEREFORE IN THE ABSEN CE OF ANY ADVERSE MATERIAL TO PROVE THE DOCUMENTARY EVIDENCES FURNISH ED BY THE 123 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. APPELLANT OTHERWISE, THE INCOME EARNED BY THE ASSES SEE ON SALE OF THESE SHARES CAN'T BE TREATED AS BOGUS. VARIOUS COURTS IN SITUATION LIKE THIS, INCLUDING HO N'BLE HIGH COURT OF RAJASTHAN HAVE RULED IN FAVOUR OF ASSESSEE. SOME OF THE LEAD JUDGEMENTS DIRECTLY ON THE ISSUE OF PENNY STOCK AND CONSEQUENT CAPITAL GAIN THEREAFTER AREAS UNDER: I) PCIT V. PRAMOD JAIN & OTHERS DB APPEAL NO.209/20 18 DATED 24- 07-2018 {RAJ) IN THIS CASE THE HON'BLE ITAT AFTER RELYING ON THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN CASE OF CIT VS SMT. POOJA AGARWAL AND VARIOUS OTHER DECISIONS DELETED THE ADDITION MADE BY THE AO BY HOLDING AS U NDER:- 'IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF TH E CASE, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION MADE BY TH E AO IS BASED ON MERE SUSPICION AND SURMISES WITHOUT ANY COGENT MATE RIAL TO SHOW THAT THE ASSESSEE HAS BROUGHT BACK HIS UNACCOUNTED INCOME IN THE SHAPE OF LONG TERM CAPITAL GAIN. ON THE OTHER HAND, THE ASSESSEE HAS B ROUGHT ALL THE RELEVANT MATERIAL TO SUBSTANTIATE ITS CLAIM THAT TRANSACTION S OF THE PURCHASE AND SALE OF SHARES ARE GENUINE. EVEN OTHERWISE THE HOLDING OF T HE SHARES BY THE ASSESSEE AT THE TIME OF ALLOTMENT SUBSEQUENT TO THE AMALGAMA TION/ MERGER IS NOT IN DOUBT, THEREFORE, THE TRANSACTION CANNOT BE HELD AS BOGUS. ACCORDINGLY WE DELETE THE ADDITION MADE BY THE AO ON THIS ACCOUNT. ' ON FURTHER APPEAL BY THE DEPARTMENT TO THE HIGH COU RT, THE COURT BY REFERRING TO THE DECISION OF POOJA AGARWAL HELD THAT NO SUBSTANT IAL QUESTION OF LAW ARISE IN THIS CASE. (II) CIT VS. SMT. POOJA AGRAWAL DBLT APPEAL NO. 385 /2011 DATED 11.09.2017 (RAJ)(HC) IN THIS DECISION, THE HON'BLE HIGH COURT APPROVED T HE FOLLOWING FINDING OF THE ITAT REPRODUCED AT PARA 12 OF THE ORDER: 'CONTENTION OF THE AR IS CONSIDERED. ONE OF THE MAI N REASONS FOR NOT ACCEPTING THE GENUINENESS OF THE TRANSACTIONS DECLARED BY THE APPELLANT THAT AT THE TIME OF SURVEY THE APPELLANT IN HIS STATEMENT DENIED HAVING MADE ANY TRANSACTIONS IN SHARES. HOWEVER, SUBSEQUENTLY THE FACTS CAME ON REC ORD THAT THE APPELLANT HAD TRANSACTED NOT ONLY IN THE SHARES WHICH ARE DISPUTE D BUT SHARES OF VARIOUS OTHER COMPANIES LIKE SATYAM COMPUTERS, HCL, IPC L, BPCL AND TATA TEA ETC. REGARDING THE TRANSACTIONS IN QUESTION VARIOUS DETAILS LIKE C OPY OF CONTRACT NOTE REGARDING PURCHASE AND SALE OF SHARES OF LIMTEX AND KONARK CO MMERCE & IND. LTD., 124 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSEE'S ACCOUNT WITH P.K. AGARWAL & CO. SHARE BR OKER, COMPANY'S MASTER DETAILS FROM REGISTRAR OF COMPANIES, KOLKATA WERE F ILED. COP Y OF DEPOSITORY A/C OR DEMAT ACCOUNT WITH ALANKRIT ASSIGNMENT LTD., A SUBSIDIARY OF NSDL WAS ALSO FILED WHICH SHOWS THAT THE TRANSAC TIONS WERE MADE THROUGH DEMAT A/C. WHEN THE RELEVANT DOCUMENTS ARE AVAILABL E THE FACT OF TRANSACTIONS ENTERED INTO CANNOT BE DENIED SIMPLY ON THE GROUND THAT IN HIS STATEMENT THE APPELLANT DENIED HAVING MADE ANY TRANSACTIONS IN SH ARES. THE PAYMENTS AND RECEIPTS ARE MADE THROUGH A/C PAYEE CHEQUES AND THE TRANSACTIONS ARE ROUTED THROUGH KOLKATA STOCK EXCHANGE. THERE IS NO EVIDENC E THAT THE CASH HAS GONE BACK IN APPELLANTS'S ACCOUNT. PRIMA FACIE THE TRANS ACTION WHICH ARE SUPPORTED BY DOCUMENTS APPEAR TO BE GENUINE TRANSACTIONS. THE AO HAS (6 OF 7) [ITA- 209/2018] DISCUSSED MODUS OPERANDI IN SOME SHAM TRA NSACTIONS WHICH WERE DETECTED IN THE SEARCH CASE OF B.C. PUROHIT GROUP. THE AO HAS ALSO STATED IN THE ASSESSMENT ORDER ITSELF WHILE DISCUSSING THE MODUS OPERANDI THAT ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAIN WERE PURCHASED AS LONG TERM CAPITAL GAIN EITHER WAS EXEMPTED FROM TAX OR WAS TAXABLE AT A LOWER RAT E. AS THE APPELLANT'S CASE IS OF SHORT TERM CAPITAL GAIN, IT DOES NOT EXACTLY FAL L UNDER THAT CATEGORY OF ACCOMMODATION TRANSACTIONS. FURTHER AS PER THE REPO RT OF DCIT, CENTRAL CIRCLE- 3 SH. P.K. AGARWAL WAS FOUND TO BE AN ENTRY PROVIDER AS STATED BY SH. PAWAN PUROHIT OF B.C. PURIHIT AND CO. GROUP. THE AR MADE SUBMISSION BEFORE THE AO THAT THE FACT WAS NOT CORRECT AS IN THE STATEMENT O F SH. PAWAN PUROHIT THERE IS NO MENTION OF SH. P. K. AGARWAL. IT WAS ALSO SUBMITTED THAT THERE WAS NO MENTION OF SH. P. K. AGARWAL IN THE ORDER OF SETTLEMENT COMMIS SION IN THE CASE OF SH. SUSHIL KUMAR PUROHIT. COPY OF THE ORDER OF SETTLEMENT COMM ISSION WAS SUBMITTED. THE AO HAS FAILED TO COUNTER THE OBJECTIONS RAISED BY T HE APPELLANT DURING THE ASSESSMENT PROCEEDINGS. SIMPLY MENTIONING THAT THES E FINDINGS ARE IN THE APPRAISAL REPORT AND APPRAISAL REPORT IS MADE BY TH E INVESTING WING AFTER CONSIDERING ALL THEMATERIAL FACTS AVAILABLE ON RECO RD DOES NOT HELP MUCH. THE AO HAS FAILED TO PROVE THROUGH ANY INDEPENDENT INQUIRY OR RELYING ON SOME MATERIAL THAT THE TRANSACTIONS MADE BY THE APPELLANT THROUGH SHARE BROKER P.K. AGARWAL WERE NON-GENUINE OR THERE WAS ANY ADVERSE MENTION A BOUT THE TRANSACTION IN QUESTION IN STATEMENT OF SH. PAWAN PUROHI. SIMPLY B ECAUSE IN THE SHAM TRANSACTIONS BANK A/C WERE OPENED WITH HDFC BANK AN D THE APPELLANT HAS ALSO RECEIVED SHORT TERM CAPITAL GAIN IN HIS ACCOUNT WIT H HDFC BANK DOES NOT ESTABLISH THAT THE TRANSACTION MADE BY THE APPELLANT WERE NON GENUINE. CONSIDERING ALL THESE FACTS THE SHARE TRANSACTIONS MADE THROUGH SHR I P.K. AGARWAL CANNOT BE HELD AS NON- GENUINE. CONSEQUENTLY DENYING THE CLAIM OF SHORT TERM CAPITAL GAIN MADE BY THE APPELLANT BEFORE THE AO IS NOT APPROVED. THE AO IS THEREFORE, DIRECTED TO ACCEPT CLAIM OF SHORT TERM CAPITAL GAIN AS SHOWN BY THE APPELLANT.' CIT VS. SMT. SUMITRA DEVI (2014) 102 DTR 0342 (RAJ. ) IN THIS CASE, ASSESSEE HAD SHOWN LTCG FROM THE SALE OF SHARES AND SAME WAS CLAIMED - AS EXEMPT U/S 10(38). AO OBSERVED THAT COMPANIES, W HOSE 125 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. SHARES WERE ALLEGEDLY DEALT WITH, WERE NOT VERY WEL L KNOWN AND IT WAS ENTIRELY UNLIKELY THAT THERE WAS A HUGE RISE IN PRI CES OF THEIR SHARES IN A VERY SHORT SPAN OF TIME. AO TREATED HUGE RISE IN PRICE A S MANIPULATION BY STOCK BROKER AND MADE ADDITIONS IN INCOME OF ASSESSEE TOW ARDS TRANSACTIONS OF PURCHASE AND SALE OF SHARES AND UNDISCLOSED COMMISS ION PAID IN CASH.CIT(A) OBSERVED THAT SHARES WERE SOLD BY ASSESSEE FOR CONS IDERATION THOUGH NAMED STOCK BROKER AND APPELLANT FURNISHED ALL THE EVIDEN CE LIKE BROKER'S NOTE, CONTRACT NOTE, EXTRACT OF CASH BOOK, BALANCE-SHEET, SHARE CERTIFICATE ETC. TO ESTABLISH THE GENUINENESS OF TRANSACTIONS. THE AO F AILED TO BRING ANY EVIDENCE IN REBUTTAL NOR WAS IT PROVED THAT DOCUMEN TS PRODUCED BY ASSESSEE WERE FALSE, FABRICATED OR FICTITIOUS. FLAT UPHELD T HE ORDER OF CIT(A) THAT AO PROCEEDED ONLY ON PRESUMPTIONS AND WAS NOT JUSTIFIE D IN MAKING ADDITIONS U/S 68 OF THE ACT. HELD, FINDINGS OF AO WERE BASED ON PRESUMPTIONS RATHER THAN ON COGENT PROOF. CIT(A) AND ITAT FOUND THAT TH E AO FAILED TO SHOW THAT THE MATERIAL DOCUMENTS PLACED ON RECORD BY ASS ESSEE LIKE BROKER'S NOTE, CONTRACT NOTE, RELEVANT EXTRACT OF CASH BOOK, COPIE S OF SHARE CERTIFICATE, DE- MAT STATEMENT ETC. WERE FALSE, FABRICATED OR FICTIT IOUS. THE APPELLATE AUTHORITIES HAVE RIGHTLY OBSERVED THAT THE FACTS AS NOTICED BY THE AO, LIKE THE NOTICE U/S 136 TO THE COMPANY HAVING BEEN RETUR NED UNSERVED; DELAYED PAYMENT TO THE BROKERS; AND DE-MATERIALISATION OF S HARES JUST BEFORE THE SALE WOULD LEAD TO SUSPICION AND CALL FOR DETAILED EXAMINATION AND VERIFICATION BUT THEN, FOR THESE FACTS ALONE, THE T RANSACTION COULD NOT BE REJECTED ALTOGETHER, PARTICULARLY IN ABSENCE OF ANY COGENT EVIDENCE TO THE CONTRARY. THE FINDINGS AS RECORDED BY THE APPELLATE AUTHORITIES, AFTER THOROUGH CONSIDERATION OF MATERIAL ON RECORD THAT T HE TRANSACTION OF PURCHASE AND SALE OF SHARES COULD NOT BE TREATED AS NON-GENUINE WAS JUSTIFIED. NO SUBSTANTIAL QUESTION OF LAW WORTH CON SIDERATION IN PRESENT CASE. THE FINDINGS AS CONCURRENTLY RECORDED BY THE CIT(A) AND THE ITAT, THAT ADDITION UNDER SECTION 68 OF THE ACT WAS NOT SUSTAI NABLE, REMAIN ESSENTIALLY IN THE REALM OF APPRECIATION OF EVIDENCE. THE APPEL LATE AUTHORITIES HAVE RETURNED THE FINDING OF FACT IN FAVOUR OF THE ASSES SEE AFTER DUE APPRECIATION OF EVIDENCE ON RECORD; ON RELEVANT CONSIDERATIONS, AND ON SOUND REASONING. THE FINDING NEITHER APPEARS SUFFERING FROM ANY PERV ERSITY NOR IS OF SUCH NATURE THAT CANNOT BE REACHED AT ALL. HENCE, NO SUB STANTIAL QUESTION OF LAW IS INVOLVED IN THIS APPEAL. SHRI MEGHRAJ SINGH SHEKHAWAT VS. DCIT (2017) 443 &4 44/JP/2017 ORDER DATED 07-03-2018 BRIEF FACTS ARE THAT THE ASSESSEE IS ON INTLIVICLUA L AND ENGAGED IN THE BUSINESS OF RETAIL SALE OF IMFL/BEER. DURING THE AS SESSMENT PROCEEDING THE AO NOTED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPI TAL GAIN OF RS. 1,32,56,113/- WHICH IS CLAIMED AS EXEMPT U/S 10(38) OF THE ACT ON SALE OF SHARES OF M/S RUTRON INTERNATIONAL LTD. THE AO RECE IVED INFORMATION FROM INVESTIGATION WING, KOLKATA THAT DURING THE SEARCH CONDUCTED U/S 132 OF THE ACT ON 12.04.2015 AT THE BUSINESS PREMISES OF ONE S HRI ANIL AGARWAL GROUP IT 126 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. WAS FOUND THAT SHRI ANIL AGARWAL IS ONE OF THE PROM OTERS OF M/S RUTRON INTERNATIONAL LTD. THE SHORES WERE SOLD BY THE ASSE SEE- FROM HIS 0 MAT ACCOUNT THROUGH THE BROKER M/S ANANDFOLHI SHUTT. AN D STOCK BROKERS LTD. AND THEREFORE, THE ASSESSEE DENIED ANY INVOLVEMENT OF A VAILING THE BOGUS OF LONG TERM CAPITOL GAIN. CONSEQUENTLY THE AO MODE AN ADDI TION OF RS. 1,32,56,113/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE A CT. THE ID. AR HAS SUBMITTED THAT THE ASSESSEE WAS ALLOTTED 3,50,000/ EQUITY SHARES BY M/S RUTRON INTERNATIONAL LTD. ON 01.03.2012 VIDE ALLOTM ENT LETTER DATED 08.03.2012. THE SHARES WERE ALLOTTED BY THE COMPANY AT FACE VALUE OF RS. 107- EACH WITHOUT CHARGING ANY PREMIUM UNDER PREFER ENTIAL ISSUE. THE ASSESSEE PAID THE PURCHASE CONSIDERATION/ SHARE APP LICATION MONEY VIDE CHEQUE ON 29.02.2012 THE PAYMENT MADE BY THE ASSESS EE IS DULY REFLECTED IN THE BANK STATEMENT OF THE ASSESSEE. THE SHARES WERE DEMATERIALIZED ON 18.06.2012 AND THEREAFTER THE SHARES WERE SOLD FROM 13.03.2013 ONWARDS ON VARIOUS DATES THROUGH M/S ANAND RATHI SHARES & STOC K BROKERS LTD. THE ASSESSEE HAS PRODUCED ALL THE RELEVANT EVIDENCE TO SHOW THE ALLOTMENT OF SHARES, PAYMENT OF CONSIDERATION THROUGH CHEQUE AT THE TIME OF ALLOTMENT OF SHARES DEMATERIALIZATION OF THE SHARES AND THEREAFT ER, SALE OF SHARES FROM THE D-MAT ACCOUNT. THE ASSESSING OFFICER HAS NOT PRODUC ED ANY MATERIAL OR RECORD TO CONTROVERT THE EVIDENCE PRODUCE BY THE ASSESSEE. CONSIDERING ALL THESE FACTS THE HON'BLE ITAT HELD THAT THE ORDER OF THE A SSESSING OFFICER TREATING THE LONG TERM CAPITAL GAINAS BOGUS AND CONSEQUENTIA L ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE IS NOT SUSTAINABLE & D ELETED THE SAME. SHRI VIVEK AGRAWAL VS. ITO (2017) 292/JP/2017 (ITAT JAIPUR) ORDER DT. 6/4/18 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL & HAS CLAIMED EXEMPT INCOME OF RS. 4,78,38,157/- UNDER TH E HEAD LONG TERM CAPITAL GAINS ON ACCOUNT OF SHARES. THE AO WHILE PA SSING THE ASSESSMENT ORDER UNDER SECTION 143(3) HAS HELD THAT THE LONG T ERM CAPITAL GAINS CLAIMED BY THE ASSESSEE IS BOGUS AS THE ASSESSEE HAS ARRANG ED THE ACCOMMODATION ENTRIES FROM THE PERSONS WHO ARE ENGAGED IN PROVIDI NG BOGUS ACCOMMODATION ENTRIES OF CAPITAL GAINS. THE HON'BLE ITAT HELD THA T THE FACTS OF THE PRESENT CASE ACQUIRING OF SHARES OF M/S. PARIDHI PROPERTIES LTD. UNDER PRIVATE PLACEMENT DIRECTLY FROM THE COMPANY AND SUBSEQUENTL Y ON MERGER OF THE SAID COMPANY WITH M/S. LUMINAIRE TECHNOLOGIES LTD. THE S HARES OF THE NEW ENTITY WERE ALLOTTED TO THE ASSESSEE WHICH WERE DULY DEMAT ERIALIZED AND THEN SOLD FROM THE DEMUR ACCOUNT ARE IDENTICAL TO THE CASE OF SHRI PRAMOD JAIN & OTHERS VS. DOT & OTHERS. IN VIEW OF THE FINDING OF THE COORDINATE BENCH ON THE IDENTICAL ISSUE, IT WAS FOUND THAT WHEN THE PAY MENT OF PURCHASE CONSIDERATION PAID THROUGH CHEQUE DIRECTLY TO THE C OMPANY AND THE SUBSEQUENT MERGER OF THE COMPANY AS PER THE SCHEME OF MERGER APPROVED BY THE HIGH COURT, THEN THE TRANSACTION AND SALE OF SH ARES IN QUESTION CANNOT BE HELD AS BOGUS. THE AO HAS PASSED THE IMPUGNED ORDER ON THE BASIS OF THE STATEMENT OF SHRI DEEPAK PATWARI WHICH IS IDENTICAL AS IN THE CASE OF SHRI 127 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. PRAMOD JAIN & OTHERS VS. DCIT. ACCORDINGLY, FOLLOWI NG THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL, WE HOLD THAT THE ADDITION MADE BY THE AO IS MERELY BASED ON SUSPICION AND SURMISES WITHOUT A NY COGENT MATERIAL TO CONTROVERT THE EVIDENCE FILED BY THE ASSESSEE IN SU PPORT THE CLAIM. FURTHER, THE AO HAS ALSO FAILED TO. ESTABLISH THAT THE ASSES SEE HAS BROUGHT BACK HIS UNACCOUNTED INCOME IN THE SHAPE OF LONG TERM CAPITA L GAIN. HENCE WE DELETE THE ADDITION MADE BY THE AO ON THIS ACCOUNT. SHRI PURUSHOTM SONI VS. ITO (2017) 288/JP/2017 (ITA T JAIPUR) ORDER DT. 06/04/18 THE FACTS OF THIS CASE ARE THAT ASSESSEE CLAIMED LO NG TERM CAPITAL GAIN ON SALE OF SHARES OF LUMINARE TECHNOLOGY LIMITED. THE AO ON TH E BASIS OF THE INFORMATION RECEIVED FROM INVESTIGATION WING TREATED THE SAME A S BOGUS & MADE THE ADDITION. THE CIT(A) CONFIRMED THE SAME. ON FURTHER APPEAL, T HE HON'BLE ITAT BY FOLLOWING THE DECISION OF PRAMOD KUMAR LAIN & OTHERS VS. DOT ITA NO. 368/JP/2017 AS WELL AS IN THE CASE OF MEGHRAJ SINGH SHEKHAWAT VS. DOT 4 43 & 444/1P/2017 ALLOWED THE APPEAL OF THE ASSESSEE. MAHESH KUMAR BAID VS. ACIT,ITA NO. 1236/KOL/2017 DT 18.08.2017 (CA1.)(TRIB.) THE FINDING OF HON'BLE ITAT IN PARA 6 IS REPRODUCED AS UNDER: WE HAVE HEARD BOTH THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. WE FIND LOT OF FORCE IN THE ARGUMENTS OF TH E LD AR THAT THE LD AO WAS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF THEORY OF SURROUNDING CIRCUMSTANCES, HUMAN CONDUCT, AND PREPO NDERANCE OF PROBABILITY WITHOUT BRINGING ON RECORD ANY LEGAL EVIDENCE AGAIN ST THE ASSESSEE. WE RELY ON THE JUDGEMENT OF SPECIAL BENCH OF MUMBAI TRIBUNAL I N THE CASE OF GTC INDUSTRIES LTD. (SUPRA) FOR THIS PROPOSITION. THE VARIOUS FACE TS OF THE ARGUMENTS OF THE LD AR SUPRA, WITH REGARD TO IMPLEADING THE ASSESSEE FOR D RAWING ADVERSE INFERENCES WHICH REMAIN UNPROVED BASED ON THE EVIDENCES AVAILA BLE ON RECORD, ARE NOT REITERATED FOR THE SAKE OF BREVITY. THE PRINCIPLES LAID DOWN IN VARIOUS CASE LAWS RELIED UPON BY THE LD AR ARE ALSO NOT REITERATED FO R THE SAKE OF BREVITY. WE FIND THAT THE AMALGAMATION OF CPAL WITH KAFL HAS BEEN AP PROVED BY THE ORDER OF HONBLE HIGH COURT. THE LD AO OUGHT NOT TO HAVE QUE STIONED THE VALIDITY OF THE AMALGAMATION SCHEME APPROVED BY THE HONBLE HIGH CO URT IN MAY 2013 MERELY BASED ON A STATEMENT GIVEN BY A THIRD PARTY WHICH H AS NOT BEEN SUBJECT TO CROSS EXAMINATION. MOROEVER, IT IS ALSO PERTINENT TO NOT E THAT THE ASSESSEE AND / OR THE STOCK BROKER ASHITA STOCK BROKING LTD NAME IS NEITH ER MENTIONED IN THE SAID STATEMENT AS A PERSON WHO HAD ALLEGEDLY DEALT WITH SUSPICIOUS TRANSACTIONS NOR THEY HAD BEEN THE BENEFICIARIES OF THE TRANSACTIONS OF SHARES OF KAFL. HENCE WE HOLD THAT THERE IS ABSOLUTELY NO ADVERSE MATERIAL T O IMPLICATE THE ASSESSEE TO THE ENTIRE GAMUT OF UNWARRANTED ALLEGATIONS LEVELED BY THE LD AO AGAINST THE 128 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSEE, WHICH IN OUR CONSIDERED OPINION, HAS NO L EGS TO STAND IN THE EYES OF LAW. THE ENQUIRY BY THE INVESTIGATION WING IN CONNECT ION WITH THE ALLEGED BOGUS TRANSACTION IN SHARES ALSO DID NOT IMPLICATE THE AS SESSEE AND / OR HIS BROKER. IT IS ALSO A MATTER OF RECORD THAT THE ASSESSEE HAS FURNI SHED ALL EVIDENCES IN THE FORM OF BILLS, CONTRACT NOTES, DEMAT STATEMENTS AND THE BANK ACCOUNTS TO PROVE THE GENUINENESS OF THE TRANSACTIONS RELATING TO PURCHAS E AND SALE OF SHARES RESULTING IN LTCG. THESE EVIDENCES WERE NEITHER FOUND BY THE ID AO TO BE FALSE OR FABRICATED. THE FACTS OF THE CASE AND THE EVIDENCES IN SUPPORT OF THE ASSESSEE'S CASE CLEARLY SUPPORT THE CLAIM OF THE ASSESSEE THAT THE TRANSACTIONS OF THE ASSESSEE WERE BONAFIDE AND THEREFORE THE ID AO WAS NOT JUSTIFIED IN REJECTING THE ASSESSEE'S CLAIM OF EXEMPTION U/S 10(38) OF THE ACT . WE ALSO FIND THAT THE VARIOUS CASE LAWS OF HON'BLE JURISDICTIONAL HIGH COURT RELI ED UPON BY THE ID AR AND FINDINGS GIVEN THEREON WOULD APPLY TO THE FACTS OF THE INSTANT CASE. THE ID DR WAS NOT ABLE TO FURNISH ANY CONTRARY CASES TO THIS EFFECT. HENCE WE HOLD THAT THE ID AO WAS NOT JUSTIFIED IN ASSESSING THE SALE PROCE EDS OF SHARES OF KAFL AS UNDISCLOSED INCOME OF THE ASSESSEE U/S 68 OF THE AC T. WE ACCORDINGLY HOLD THAT THE REFRAMED QUESTION NO. 1 RAISED HEREINABOVE IS D ECIDED IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. MORE JUDGMENTS (WITH GIST) ON THE ISSUE OF LTCG BY VARIOUS HIGH COURT AND TRIBUNAL ARE: 1. ON BASIS OF INFORMATION FROM DGIT (INV.), KOIKAI A 'HOT SOME COMPANIES WERE ENGAGED IN BUSINESS OF ISSUING PENNY STOCKS FO R WHICH THERE WERE LARGE NUMBER OF BENEFICIARIES CLAIMING BOGUS LONG- TERM C APITAL GAIN/SHORT-TERM CAPITAL LOSS/BUSINESS LOSS/SPECULATION LOSS, ASSESS ING OFFICER FOUND THAT ASSESSEE WAS ONE OF BENEFICIARIES OF SAID RACKET AN D HAD EARNED PROFIT ON SALE OF INVESTMENTS IN EQUITY SHARES OF A COMPANY, (SCRI PT NAME 'RUTRON') AND CLAIMED SAME AS EXEMPT UNDER SECTION 10(38). THE TR IBUNAL HELD THAT ASSESSEE HAD PRODUCED RELEVANT RECORDS TO SHOW ALLOTMENT OF SHARES BY COMPANY ON PAYMENT OF PAGE 818 OF 884 CONSIDERATIONS BY CHEQUE AND HE DEMATERIALIZED SHARES IN D-MAT ACCOUNT WHICH WAS ALSO AN INDEPENDE NT MATERIAL AND SAID EVIDENCE COULD NOT BE MANIPULATED. IT HELD THAT ASS ESSING OFFICER HAD NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT ASSESSE E BUD PAID OVER AND ABOVE PURCHASE CONSIDERATION AND THAT THEREFORE IN ABSENC E OF ANY EVIDENCE, IT COULD NOT BE HELD THAT ASSESSEE HAD INTRODUCED HIS OWN UN ACCOUNTED MONEY BY WAY OF BOGUS LONG-TERM CAPITAL GAIN. RAMPRASAD AGARWAL V. ITO 2(3)(2), MUMBAI- 12018] 10 0 TAXMANN.COM 172 (MUMBAI - TRIB.)-ITA NOS. 1228 & 4843 (MUM.) OF 2018 DATED NOVEMBER 30, 2018 2. ASSESSEE, AN INDIVIDUAL, HAD CLAIMED TO HAVE REC EIVED LONG TERM CAPITAL GAIN (LTCG) ON SALE OF SHARES OF A COMPANY (NFGL). HOWEV ER, ASSESSING OFFICER NOTED 129 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THAT ASSESSEE HAD PURCHASED THESE SHARES OFF MARKET AND DOUBTED RECEIPT OF ASTRONOMICAL GAIN BY SELLING OF THESE SHARES. AFTER HAVING TAKEN NOTE OF REPORTS OF SEBI AND INVESTIGATION WING OF DEPARTMEN T THAT THERE WAS SUCH AN ADVERSE ADMISSION MADE BY AN ACCOMMODATION PROVIDER AGAINST NFGL, HE WAS OF OPINION THAT ENTIRE TRANSACTION WAS BOGUS AND, T HEREFORE, HE ADDED ENTIRE SALE CONSIDERATION UNDER SECTION 68 AS INCOME OF AS SESSEE. ASSESSEE HAD FURNISHED ALL PRIMARY EVIDENCES IN FORM OF BILLS, C ONTRACT NOTES, DEMAT STATEMENTS AND BANK ACCOUNTS TO PROVE GENUINENESS O F TRANSACTION RELATING TO PURCHASE AND SALE OF SHARES RESULTING IN LTCG. FURT HER, TRANSACTION WAS MADE BY ASSESSEE THROUGH REGISTERED STOCK BROKER THROUGH BOMBAY STOCK EXCHANGE, AFTER REMITTING STT AND ALL PAYMENTS WERE TRANSACTE D THROUGH BANK AND SHARES WERE HELD IN DEMAT ACCOUNT. FURTHER, NO ATTE MPT HAD BEEN MADE BY ASSESSING OFFICER TO ISSUE SUMMONS TO PARTIES INVOL VED IN ALL THESE TRANSACTIONS TO RECORD ANY ADVERSE INFERENCE AGAINS T ASSESSEE. IN LIGHT OF THE AFORESAID FACTS THE TRIBUNAL DELETED THE ADDITION. SMT. MADHU KILLA V. ASST. CIT, CIRCLE-36, KOLKATA-[ 2018] 100 TAXMANN.COM 264 (KOLKATA - TRIB.)- ITA NO. 834 (KOL.) OF 2018- NOVEMBER 2, 2018 3. ASSESSEE, AN INDIVIDUAL AND IN HIS RETURN OF INC OME HAD CLAIMED EXEMPTION ON ACCOUNT OF LONG-TERM CAPITAL GAINS ON PURCHASE A ND SALE OF SHARES OF M/S. UNNO INDUSTRIES LTD AND M/S. NCL RESEARCH & FINANCI AL SERVICES LTD. HOWEVER, DURING ASSESSMENT, AO ON BASIS OF A GENERAL REPORT AND MODUS OPERAND! ADOPTED GENERALLY IN THOSE CASES AND ON GENERAL OBS ERVATIONS HAD CONCLUDED THAT ASSESSEE HAD CLAIMED BOGUS LONG TERM CAPITAL G AIN. THEREFORE, HE MADE AN ADDITION OF ENTIRE SALE PROCEEDS OF SHARES AS INCOM E AND REJECTED CLAIM OF EXEMPTION MADE U/S 10(38).EVIDENCE PRODUCED BY ASSE SSEE IN SUPPORT OF GENUINENESS OF TRANSACTION WAS ALSO REJECTED. ON AP PEAL, CIT(A) UPHELD DECISION OF AO. THE TRIBUNAL HELD THAT, IN A NUMBER OF CASES BENCH OF TRIBUNAL HAD CONSISTENTLY HELD THAT DECISION IN ALL SUCH CAS ES SHOULD BE BASED ON EVIDENCE AND NOT ON GENERALIZATION, HUMAN PROBABILI TIES, SUSPICION, CONJECTURES AND SURMISES. THEREFORE, IN ALL SUCH, CASES ADDITIO NS WERE DELETED. REVENUE COULD NOT CONTROVERT CLAIM OF COUNSEL FOR ASSESSEE THAT ISSUE IN QUESTION WAS COVERED BY SUCH DECISIONS OF HIGH COURTS AND ITAT. CONSEQUENTLY, ADDITION MADE BY AO WAS DELETED. NEERAJ GUPTA VS ITO- (2018) 54 CCH 0238 KOLKATTA TR IB- ITA NO 863/KOI/2018 DATED 05.10.2018 5. THE ASSESSEE HAD PURCHASED OFF MARKET SCRIPTS AN D DERIVED PROFITS @ 6163% AND 1201%. THE AO HAD OPINED THAT SUCH ASTRON OMICAL RISE IN SHARES HAD REASONS ATTRIBUTABLE TO SOMETHING SUSPICIOUS RA THER THAN FLOWING FROM NORMAL MARKET TRENDS AND THUS BELIEVED SHARE PRICE MOVEMENT WAS A PRE- ARRANGED TRADING PATTERN REVEALING ARTIFICIAL PRICE RIGGING IN THESE TWO SCRIPS AS PER DETAILS RIGHT FROM THE DATE OF ACQUISITION. THE AO TREATED ASSESSEE TO HAVE 130 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ENGAGED IN BOGUS LONG-TERM CAPITAL GAIN ARRANGEMENT S AND IN COLLUSION WITH ENTRY OPERATORS. FURTHER AO ON REFERENCE TO DI T'S INVESTIGATION REPORT ASSESSED LONG TERM CAPITAL GAIN AS UNEXPLAINED CASH CREDITS AND ALSO MADE COMMISSION DISALLOWANCE/ADDITION @ 2.5% AS UNEXPLAI NED EXPENDITURE, WHICH WAS UPHELD BY CIT(A). THE TRIBUNAL ON APPEAL HELD T HAT AO AS WELL AS CIT(A) HAD BEEN GUIDED BY REPORT OF INVESTIGATION WING PRE PARED WITH RESPECT TO BOGUS CAPITAL GAINS TRANSACTIONS, HOWEVER, AO AS WE LL AS CIT(A) HAD NOT BROUGHT OUT ANY PART OF INVESTIGATION WING REPORT I N WHICH ASSESSEE HAD BEEN INVESTIGATED AND /OR FOUND TO BE PART OF ANY ARRANG EMENT FOR PURPOSE OF GENERATING BOGUS LONG TERM CAPITAL GAINS AND THE RE PORT ONLY INFORMED AO THAT SOME PERSONS MIGHT HAVE MISUSED SCRIPT FOR PUR POSE OF COLLUSIVE TRANSACTION. THUS, AS AO HAD NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT TRANSACTIONS ENTERED BY ASSESSEE WHICH WERE OT HERWISE SUPPORTED BY PROPER THIRD-PARTY DOCUMENTS WERE COLLUSIVE TRANSAC TIONS, THE ADDITION IN TERMS OF BOGUS LONG-TERM CAPITAL GAIN AS WELL AS UN EXPLAINED COMMISSION WAS DELETED. JIGNESH DESAI VS ITO- (2018) 54 CCH 0045 KOL TRIB- ITA NO 1263/2018 DATED 26.09.2018 7. THE TRIBUNAL DISMISSED REVENUE'S APPEAL AGAINST CIT(A)'S ORDER DELETING THE UNEXPLAINED CASH CREDIT ADDED U/S 68 BY THE AO BY D ISBELIEVING THE ASSESSEE'S CLAIM THAT THE IMPUNGED AMOUNT WAS RECEIVED ON SALE OF SHARES WHICH RESULTED IN LONG TERM CAPITAL GAINS ELIGIBLE FOR EXEMPTION U /S 10(38). THE TRIBUNAL RELIED ON COORDINATE BENCH DECISION OF SAURABH MITTAL (ITA NO.16/JP/2018) DEALING WITH THE IDENTICAL TRANSACTION OF SALE AND PURCHASE OF S HARES, WHEREIN IT WAS HELD THAT ASSESSEE HAD DISCHARGED ITS ONUS BY PROVIDING ALL N ECESSARY DETAILS/EVIDENCES NOTING THAT (I) PAYMENT FOR SHARES WERE MADE THROUG H BANK ACCOUNT (II) AO HAD NOT BROUGHT ANY MATERIAL TO CONTROVERT SUPPORTING E VIDENCE OF PURCHASE BILLS, PAYMENT OF CONSIDERATION THROUGH BANK, DEMATERIALIZ ATION OF SHARES IN DEMAT ACCOUNT, ALLOTMENT OF THE SHARES, ETC. IT WAS THUS HELD THAT THE AO WAS UNABLE TO SHOW THAT THE ASSESSEE HAD INTRODUCED HIS OWN UNACC OUNTED MONEY BY WAY OF BOGUS LONG TERM CAPITAL GAIN, HENCE SHARE TRANSACTI ON COULD NOT BE TREATED AS SHAM AND NOT GENUINE. ACCORDINGLY, SHARE TRANSACTIO N RESULTING IN CAPITAL GAINS WAS A VALID TRANSACTION AND ELIGIBLE FOR EXEMPTION U/S SECTION 10(38). ITO VS. KAPIL MITTAL [2018] 53 CCH 0532 JAITRIB-LTA NO.17/J P/2018 DATED AUGUST 30 2018. 8. THE ASSESSEE HAD EARNED LONG-TERM CAPITAL GAIN F ROM SALE OF SHARES OF ONE, CSL AND CLAIMED THE SAME AS EXEMPT. BASED ON INVEST IGATION CARRIED OUT BY DIT (INVESTIGATION), IT WAS FOUND THAT CSL WAS A SCRIP WHICH WAS IDENTIFIED TO BE INVOLVED IN SCHEME OF BOGUS LTCG/STCG TO MORE THAN 60,000 BENEFICIARIES AND THAT ASSESSEE WAS ALSO PART OF LIST OF SUCH BENEFIC IARIES. THUS, SALE CONSIDERATION RECEIVED BY ASSESSEE ON SALE OF SHARES WAS ADDED TO HIS INCOME AS UNEXPLAINED CASH CREDIT U/S 68. THE TRIBUNAL PAGE 820 OF 884 DE LETED THE SAID ADDITION NOTING THAT THE OBSERVATIONS OF INVESTIGATION WING WERE GE NERAL IN NATURE AND WERE 131 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. APPLIED ACROSS BOARD TO ALL 60,000 ASSESSEES WHO FE LL IN THIS CATEGORY AND THERE WAS NO SPECIFIC EVIDENCES PRODUCED AGAINST ASSESSEE . IT ALSO NOTED THAT NOTHING WAS BROUGHT ON RECORD TO SHOW THAT PERSONS INVESTIG ATED, INCLUDING ENTRY OPERATORS OR STOCK BROKERS, HAD NAMED THAT THE ASSE SSEE WAS IN COLLUSION WITH THEM. NAVNEET AGARWAL V ITO [2018] 97 TAXMANN.COM 76 (KOLKATA- TRIB.)-IT APPEAL NO. 2281 (KOL.) OF 2017 DATED JULY 20, 2018 9. THE TRIBUNAL DELETED THE ADDITION MADE BY THE AO U/S 68 BY TREATING THE AMOUNT RECEIVED ON SALE OF SHARES OF M/S K AS UNEXP LAINED CASH CREDIT WHERE, ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGA TION WING, THE AU OPINED THAT LONG TERM CAPITAL GAINS EARNED' BY ASSESSEE WE RE IN NATURE OF AN ACCOMMODATION ENTRY AND TRANSACTIONS IN QUESTION WE RE NOT GENUINE. IT NOTED THAT THE AO AND CIT(A) FAILED TO .CONTROVERT ASSESS EE'S COPIOUS EVIDENCES FILED WHICH CLEARLY SUPPORTED HIS CASE QUA LTCG CLAIMED A S EXEMPT U/S 10(38) ON SALE OF SHARES. THE TRIBUNAL RELIED ON THE IN THE C ASE OF CIT VS VISHAL HOLDING AND CAPITAL PVT. LTD (DEL HC) WHEREIN IT WAS HELD T HAT SINCE THE AO HAD MADE THE ADDITION WITH RESPECT TO LONG TERM CAPITAL GAIN S WITHOUT VERIFYING THE DETAILS FURNISHED BY THE ASSESSEE BUT ONLY BASED ON INFORMATION RECEIVED FROM INVESTIGATION WING, THE ADDITION COULD NOT BE SUSTA INED. ACCORDINGLY, IT ALLOWED ASSESSEE'S APPEAL. ARUN KUMAR AND ORS VS ASST CIT [2018] 54 CCH 0183 ( DEL TRIB) - ITA NOS. 2825, 2826 & 457/DEL/2018 DATED 05.11.2018 10 THE TRIBUNAL ALLOWED ASSESSEE'S APPEAL AND DELET ED THE ADDITION MADE BY THE AO ON ACCOUNT OF SUSPICIOUS LONG TERM CAPITAL GAINS ON SHARES ON BASIS OF STATEMENT OF SH.VK, HOLDING THAT THE ADDITION MADE ON THE BASIS OF A STATEMENT OF A THIRD PARTY WITHOUT PROVIDING ANY OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE HIM, WAS UNSUSTAINABLE IN LAW AND AGAINST T HE LAW LAID DOWN IN APEX COURT IN ANDAMAN TIMBER VS CIT (CIVIL APPEAL NO. 42 28 OF 2006) WHEREIN IT WAS HELD THAT NOT ALLOWING THE ASSESSEE TO CROSS-EXAMIN E THE WITNESSES BY THE ADJUDICATING AUTHORITY WAS A SERIOUS FLAW WHICH MAD E THE ORDER NULLITY IN AS MUCH AS IT AMOUNTED TO VIOLATION OF PRINCIPLES OF NATURA L JUSTICE. ANUBHAV JAIN VS ITO 12018] 54 CCH 0273 (DEL- TRIB.) - ITA NO.4565/DEL/2018 DATED 26.11.2018 13. THE TRIBUNAL DISMISSED REVENUE'S APPEAL AGAINST THE CIT(A)'S ORDER DELETING THE ADDITION MADE U/S 68 WITH RESPECT TO CAPITAL GA INS ARISING ON SALE OF SHARES [AND ALSO CONSEQUENT CLAIM FOR EXEMPTION U/S 10(38) ], NOTING THAT THE AO HAD NOT CONTROVERTED THE EVIDENCE OF PURCHASE HILLS, PA YMENT OF CONSIDERATION THROUGH BANK, DEMAT ACCOUNT, ALLOTMENT OF AMALGAMAT ED SHARES, SALE OF SHARES THROUGH STOCK EXCHANGE AT PREVAILING PRICE, PAYMENT OF STT ETC. IT ALSO HELD THAT THE RELIANCE BY AO ON STATEMENTS RECORDED BY THE IN VESTIGATION WING TO CONCLUDE 132 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THAT THE CAPITAL GAINS WERE BOGUS WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION WAS A COMPLETE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AS HELD IN CCE VS ANDAMAN TIMBER INDUSTRIES 127 DTR 241(SC). DC1T VS. SAURABH MITTAL - ITA NO. 16/JP/2018 DATED 29.08.2018 15. DURING ASSESSMENT PROCEEDING, AO NOTED THAT ASS ESSEE HAD CLAIMED AN AMOUNT AS LTCG WHICH WAS EARNED THROUGH SALE OF SHA RES OF M/S. E AND SAME WAS EXEMPTED U/S 10(38),IN SUPPORT OF ITS CLAIM ASS ESSEE HAD FURNISHED DETAILS OF MODE OF ACQUISITION OF THOSE SHARES, BANK A/C ST ATEMENTS WHERE SALE PROCEEDS WERE CREDITED, DEPOSITORY PARTICIPANT STAT EMENTS AND STOCK BROKER NOTES. AO FOUND THAT EXEMPT LTCG CLAIMED BY ASSESSE E WAS NOT GENUINE BUT WAS PRE-ARRANGED COLLUSIVE TRANSACTION IN FORM OF A CCOMMODATION ENTRY WITHOUT REAL SUBSTANCE. THERE WAS UNREALISTIC RETURNS ON IN VESTMENT. DIT(LNV.) CARRIED- OUT INVESTIGATION TO UN-EARTH ORGANIZED RACKET FOR GENERATING BOGUS ENTRIES OF LTCG WHICH WAS EXEMPT FROM TAX. STATEMENT OF SEVERA L ENTRY OPERATORS WERE RECORDED INCLUDING SHRI S WHO ADMITTED THAT M/S. E WAS A PENNY STOCK COMPANY WHOSE SHARES WERE ARTIFICIALLY MANIPULATED TO PROVI DE LTCG. FURTHER, ASSESSEE CONTENDED THAT OPPORTUNITY TO CROSS-EXAMINE SAID ST ATEMENTS WERE NOT GIVEN. ASSESSEE'S CASE WAS COVERED U/S 68.SECTION 1 15BBE WAS APPLICABLE AND SAME WAS TAXABLE @30%.AO COMPLETED A SSESSMENT AFTER MAKING REQUIRED ADDITIONS.CIT(A) HELD THAT AO WAS N OT UNDER OBLIGATION TO ALLOW CROSS-EXAMINATION OF ANY PERSON. THE TRIBUNAL HELD THAT, ASSESSEE PLACED SUFFICIENT DOCUMENTARY EVIDENCES BEFORE AO TO PROVE GENUINENESS OF TRANSACTION. ASSESSEE PURCHASED SHARES THROUGH BANK ING CHANNEL AND ACTUALLY GOT SHARES TRANSFERRED IN HIS NAME. PURCHASE WAS MA DE THROUGH CHEQUE WHICH WAS SUPPORTED BY BANK STATEMENT. TRANSACTIONS OF SA LE WAS MADE THROUGH DEMAT ACCOUNT. CONTRACT NOTE ALONG WITH OTHER DETAI LS WERE PRODUCED TO SHOW THAT PURCHASE AND SALE OF SHARES WERE MADE THROUGH BANKING CHANNEL THROUGH RECOGNIZED STOCK EXCHANGE THROUGH DEMAT ACCOUNT ON WHICH SECURITY TRANSACTION TAX WAS ALSO PAID. AO DID NOT MADE ANY ENQUIRY ON DOCUMENTARY EVIDENCES FILED BY ASSESSEE. NO MATERIALS WERE BROU GHT ON RECORD AGAINST ASSESSEE TO DISPROVE ITS CLAIM. ASSESSEE'S CLAIM OF PURCHASE AND SALE OF SHARES WERE SUPPORTED BY DOCUMENTARY EVIDENCES. STATEMENT OF SHRI S WAS RECORDED BY INVESTIGATION WING, KOLKATA, BUT, SAME WAS NOT C ONFRONTED TO ASSESSEE AND HIS STATEMENT WAS ALSO NOT SUBJECTED TO CROSS-EXAMI NATION ON BEHALF OF ASSESSEE. THEREFORE, HIS STATEMENT COULD NOT BE REA D IN EVIDENCE AGAINST ASSESSEE. AO DID NOT MENTION ANY FACT AS TO HOW CLA IM OF ASSESSEE WAS SHAM OR BOGUS. ASSESSEE SATISFIED CONDITIONS OF S. 10(38). BROKER THROUGH WHOM TRANSACTIONS WERE CARRIED OUT HAD NOT DENIED TRANSA CTION CONDUCTED ON BEHALF OF ASSESSEE. ADDITION WAS MERELY MADE ON PRESUMPTION A ND ASSUMPTIONS OF CERTAIN FACTS WHICH WERE NOT PART OF RECORD. THERE WAS NO OTHER MATERIAL AVAILABLE ON RECORD TO REBUT CLAIM OF ASSESSEE OF E XEMPTION CLAIMED U/S 10(38). ASSESSEE'S APPEAL WAS ALLOWED. 133 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. AMAR NATH GOENKA & ORS. VS. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. ((2018) 54 CCH 0344 DELTRIB ITA N O. 5882/DEL/2018, 5883/DE/2018, 6457/DEL/2018, 6458/DEL/2018, 6459/DEL/2018 DATED 12.12.2018 17. AO NOTED THAT ASSESSEE HAD CLAIMED AN EXEMPT IN COME RECEIVED ON ACCOUNT OF SHARES SOLD.A0 RECEIVED AN INFORMATION FROM INVE STIGATING UNIT, KOLKATA WHICH INDICATED THAT ASSESSEE ENTERED INTO A TRANSACTIONS THAT WAS MERELY ACCOMMODATION ENTRIES TAKEN FOR THE PURPOSE OF BOGU S LTCG MADE DURING PY. IN GARB OF ALLEGED LTCG, ASSESSEE EARNED EXEMPT INCOME AND HUGE AMOUNTS WERE BROUGHT INTO BOOKS WITHOUT PAYMENT OF ANY TAXES. AO COMPLETED ASSESSMENT AFTER MAKING ADDITION U/S 68. CIT(A) HELD THAT PAYM ENT THROUGH BANKS, PERFORMANCE THROUGH STOCK EXCHANGE AND OTHER SUCH F EATURES WERE ONLY APPARENT FEATURES. REAL FEATURES WERE MANIPULATED AND ABNORM AL PRICE OF OFF LOAD AND SUDDEN DIP THEREAFTER. SAID TRANSACTIONS AS DISCUSS ED BY AO WOULD FALL IN REALM OF 'SUSPICIOUS' AND 'DUBIOUS' TRANSACTIONS.AO HAD THER EFORE NECESSARILY TO CONSIDER SURROUNDING CIRCUMSTANCES, WHICH HE DID IN A VERY M ETICULOUS AND CAREFUL MANNER. THE TRIBUNAL HELD THAT ASSESSEE'S PAPER BOO K COMPRISED OF ALL DETAILS OF ITS LTCG, COPY OF ITS BILL IN CONNECTION WITH PURCH ASE OF SHARES OF M/S S AND M/S. P, BANK STATEMENT. SAID ENTITIES AMALGAMATED WITH M /S K, CONTRACT NOTES IN RESPECT OF SALE OF SHARE OF M/S S. SIMILAR CONTRACT NOTES REGARDING WS K SHARES SOLD, BANK STATEMENT REFLECTING PAYMENT RECEIPTS AL ONG WITH CORRESPONDING DEMAT STATEMENTS STOOD PERUSED. ONCE ASSESSEE HAD DISCHAR GED HIS ONUS, THEN ONUS SHIFTED TO SHOULDERS OF AO THEN AO HAD TO EXAMINE V ERACITY OF DOCUMENTS PRODUCED BY ASSESSEE AND IF IT WAS FOUND TO BE CORR ECT AND VALID THEN IN ALL FAIRNESS AO SHOULD ACCEPT CLAIM OF LTCG. IN CASE IF AO ON VERIFICATION FINDS THAT DOCUMENTS PRODUCED BY ASSESSEE WAS FALSE OR FABRICA TED, THEN AO SHOULD BRING HIS ADVERSE FINDINGS TO NOTICE OF ASSESSEE AND CONF RONT HER WITH ADVERSE MATERIAL/FINDINGS. THEN AGAIN ONUS WOULD SHIFT TO A SSESSEE TO PROVE GENUINENESS OF TRANSACTION. THOUGH AO/CIT(A) WERE SWAYED BY REP ORT OF SEBI/INVESTIGATION WING OF DEPARTMENT, BOTH AUTHORITIES COULD NOT POIN T OUT WHAT WAS ROLE OF ASSESSEE IN ANY WRONG DOING WHICH WAS PROHIBITED BY LAW. AO MERELY CARVED OUT CERTAIN FEATURES/MODUS-OPERANDI OF COMPANIES INDULG ING IN PRACTICES NOT SANCTIONED BY LAW. NEITHER ANY INVESTIGATION WERE C ARRIED OUT AGAINST ASSESSEE, NOR AGAINST BROKERS TO WHOM ASSESSEE DEAL T WITH OR COMPANIES IN WHICH ASSESSEE DEALT WITH PURCHASE AND SALE OF SHAR ES IN QUESTION WERE DONE BY AO. ACTION OF AD AND CIT(A) WAS NOT JUSTIFIED IN RE JECTING CLAIM OF ASSESSEE BASED ON THEORY OF SURROUNDING CIRCUMSTANCES AND HU MAN CONDUCT AND PREPONDERANCE OF PROBABILITY AGAINST ASSESSEE. IMPU GNED ADDITION MADE U/S 68 ON ACCOUNT OF BOGUS LTCG WAS TO BE DELETED. UDIT AGARWAL VS. DY. CIT (IT) [2018] 54 CCH 0424 (K OL- TRIB.)- ITA NO. 1839/KOL/2017 DATED 26.12.2018 18. DURING ASSESSMENT PROCEEDING, AO FOUND THAT ASS ESSEE HAD CLAIMED LTCG ON SALE OF SHARES OF M/S. UIL AND M/S. NCL, WHICH WAS CLAIMED AS EXEMPT U/S 134 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 10(38).A0 NOTICED THAT ASSESSEE BOUGHT PURCHASED SH ARES IN NAME OF M/S P FROM M/S. UDL. THEREAFTER, M/S. P WAS MERGED WITH M /S. UII. ACCORDINGLY, SAID PURCHASED SHARES WERE SOLD TO MA. TILL BY ASSESSEE. A0 RECEIVED AN INFORMATION FROM OGIT(INV.) IN RESPECT OF 'DISSEMINATION OF INT ELLIGENCE REGARDING TAX EVASION BY SHOWING LTCGS PERPETRATED THROUGH ACCOMM ODATION ENTRY OPERATORS'. THEREAFTER, AO OBSERVED THAT NAME, ADDR ESS AND PAN OF ASSESSEE ALONG WITH NAME OF SCRIP.A0 HELD THAT ASSESSEE HAD NOT PURCHASED OR SOLD ANY OTHER SHARE EXCEPT IMPUGNED TRANSACTION AND ONLY MA DE INVESTMENT IN THOSE SCRIPS ANTICIPATING A WINDFALL AND CLAIMED A SUBSTA NTIAL AMOUNT OF LTCG, WHICH WAS TOTALLY EXEMPT U/S 10(38). ASSESSEE'S SHARE TRA NSACTION WAS A KIND OF SHAM TRANSACTION TO EVADE TAXATION AND TO CHANNELIZ E HER OWN FUND FROM UNKNOWN SOURCES TO A LEGITIMATE FORM OF INCOME. ASS ESSEE'S CLAIM IN RESPECT OF EXEMPT INCOME UNDER HEAD LTCG WAS A BOGUS CLAIM.AO COMPLETED ASSESSMENT AFTER MAKING ADDITION UNDER HEAD UNDISCLOSED INCOME . CIT(A) CONFIRMED ACTION OF AO. THE TRIBUNAL HELD THAT AO/ CIT(A) HAD NOT AP PRECIATED THAT TRANSACTION OF SALE OF SHARES BY ASSESSEE WAS DULY BACKED UP BY MATERIAL/EVIDENCE INCLUDING CONTRACT NOTES, DE-MAT STATEMENT, BANK AC COUNT REFLECTING TRANSACTIONS, SHARES WERE SOLD ON ONLINE PLATFORM O F STOCK EXCHANGE AND EACH TRADE OF SALE OF SHARES WERE HAVING UNIQUE TRADE NU MBER AND TRADE TIME. AO HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT STATUTORY AGENCIES OF GOVERNMENT HAD ALLEGED ANY STOCK MANIPULATION BY AS SESSEE OR BROKERS OR COMPANY'S SCRIP IN QUESTION AT TIME WHEN ASSESSEE M ADE SALE. SHARES WERE SOLD ON DATE MENTIONED IN CONTRACT NOTE AT PREVAILI NG MARKET PRICE DULY RECORDED IN STOCK EXCHANGE. EVIDENCE GATHERED BY DI RECTOR INVESTIGATION'S OFFICE BY WAY OF UNKNOWN PARTIES STATEMENTS RECORDE D WHICH ADMITTEDLY WAS RECORDED BEHIND ASSESSEE'S BACK WAS RELIED UPON BY REVENUE TO MAKE ANY ADDITIONS. WHEN SUCH ACTIONS WERE CARRIED OUT, AO H AD TO ENSURE TO GIVE COPIES OF ADVERSE MATERIAL/ STATEMENT GIVEN TO ASSE SSEE AND ALLOWED ASSESSEE AN OPPORTUNITY OF CROSS EXAMINATION, IF AO WAS GOIN G TO RELY ON ANY ADVERSE STATEMENTS OF THIRD PARTY AS EVIDENCE TO DRAW ADVER SE INFERENCE AGAINST ASSESSEE. IF ANY MATERIAL OR EVIDENCE WAS SOUGHT TO BE RELIED UPON BY AO, HE HAD TO CONFRONT ASSESSEE WITH SUCH MATERIAL. ASSESS EE'S CLAIM COULD NOT BE REJECTED BASED ON MERE CONJECTURES UNVERIFIED EVIDE NCE UNDER PRETENTIOUS GARB OF PREPONDERANCE OF HUMAN PROBABILITIES AND TH EORY OF HUMAN BEHAVIOR BY DEPARTMENT. NOTHING WAS BROUGHT ON RECORD TO SHO W THAT PERSONS INVESTIGATED, INCLUDING ENTRY OPERATORS OR STOCK BR OKERS, HAD NAMED THAT ASSESSEE WAS IN COLLUSION WITH THEMIN ABSENCE OF S UCH FINDING HOW WAS IT POSSIBLE TO LINK THEIR WRONG DOINGS WITH ASSESSEEI N FACT, INVESTIGATION WING WAS A SEPARATE DEPARTMENT WHICH WAS NOT ASSIGNED WI TH ASSESSMENT WORK AND WAS DELEGATED THE WORK OF ONLY MAKING INVESTIGATION . INCOME TAX ACT HAD VESTED WIDEST POWERS ON THIS WINGIT WAS DUTY OF IN VESTIGATION WING TO CONDUCT PROPER AND DETAILED INQUIRY IN ANY MATTER W HERE THERE WAS ALLEGATION OF TAX EVASION AND AFTER MAKING PROPER INQUIRY AND COLLECTING PROPER EVIDENCES THE MATTER SHOULD BE SENT TO ASSESSMENT WING TO ASS ESS INCOME AS PER LAW. NO SUCH ACTION WAS EXECUTED BY INVESTIGATION WING AS A GAINST ASSESSEE. ASSESSEE 135 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. COULD NOT BE HELD TO BE GUILTY OR LINKED TO WRONG A CTS OF PERSONS INVESTIGOTED.AO AT BEST COULD HAVE CONSIDERED INVES TIGATION REPORT AS A STARTING POINT OF INVESTIGATION. SAID REPORT ONLY I NFORMED AO THAT SOME PERSONS MIGHT HAVE MISUSED SCRIP FOR PURPOSE OF COLLUSIVE T RANSACTION.AO WAS DUTY BOUND TO MAKE INQUIRY FROM ALL CONCERNED PARTIES RE LATING LU TRANSACTION AND THEN TO COLLECT EVIDENCES THAT TRANSACTION ENTERED INTO BY ASSESSEE WAS ALSO A COLLUSIVE TRANSACTION. ASSESSEE ' S CLAIM OF EXEMPT INCOME ON LTCG ON SALE OF SCRIPS OF M/S. NCL WAS ALLOWED. MINU GUPTA VS. ITO (2018) 54 CCH 0343 KOLTRIB ITA N O. 731/KOL/2018 DATED 12.12.2018 19. I AM OF THUS OF THE VIEW THAT APPELLANT CASE IS DIRECTLY COVERED BY THE DECISIONS OF HON'BLE HIGH COURT OF RAJASTHAN AN D ALSO OF HON'BLE ITAT JAIPUR ON THE MATTER. SUMMATION 19.1.1 TO SUM UP IN THE PRESENT CASE THE APPELLANT AS SUBJECTED TO SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT AND DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND WHICH MA Y INDICATE THAT THE APPELLANT HAS TAKEN LTCG ON PENNY STOCK WHICH IS BO GUS. A STATEMENT WAS RECORDED U/S 132(4) OF THE ACT WHICH WAS LATER RETRACTED BY THE APPELLANT. 19.1.2 THE LD. AO HAD INFORMATION IN THE FORM STATE MENTS RECORDED DURING SEARCH AND SURVEY ACTION ON VARIOUS ENTRY OP ERATORS. THIS INFORMATION INTER ALIA CONTAINS STATEMENTS OF ENTRY OPERATORS RECORDED BY INVESTIGATION DIRECTORATES, MAINLY KOLKATTA. THE LD. AO ISSUED A SCN TO THE APPELLANT. THE LD. AO DID NOT ALLOW CROSS EX AMINATION OF THE ENTRY OPERATOR FOR THE LEGAL REASONS ENUMERATED IN HIS ORDER. 19.1.3 IN RESPONSE TO THE SCN APPELLANT FILED ALL THE DOCUMENTARY EVIDENCES IN HIS POSSESSION BEFORE THE LD. AO WHICH WERE KEPT AS IT IS & WERE NOT REBUTTED BY VIRTUE OF ANY INQUIRY/ INVESTIGATION. THE LD. AO DID CONDUCTED INQUIRIES U/S 133(6) OF TH E ACT WHERE IN ALL THE NOTICES WERE SERVED AND SOME OF THEM WERE RESPO NDED BY THE COMPANIES (PLEASE SEE PAGE 65 OF THIS ORDER). 136 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 19.1.4 THE LD. AO PROCEEDED TO TREAT THE LTCG AS B OGUS AND MADE AN ADDITION. IN NUTSHELL THE EXTERNAL INFORMATION & RETRACTED STATEMENT WAS FORMED WHOLE & SOLE BASIS TO TREAT TH E LTCG CLAIM AS BOGUS. THUS, THE CRUCIAL QUESTION THAT IT WAS APPEL LANT MONEY (UNACCOUNTED CASH) WHICH CAME BACK TO APPELLANT IN THE FORM LTCG WAS NOT EVIDENT FROM THE INFORMATION SO RECEIVED, N OR INVESTIGATED NOR IS ANSWERED BY THE WHOLE EXERCISE. ALL THE DECISION OF HON'BLE HIGH COURT OF RAJASTHAN AND HON'BLE ITAT ' JAIPUR ON LTCG EARNED ON PENNY STOCK ARE IN FAVOUR OF APPELLANT. TO PUT IT OTHER WAY ROUND, NOT A SINGLE DECISION IS AGAINST APPELLANT. THUS THESE DECISIONS HAVE BINDIN G PRECEDENCE. THE DECISIONS ARE: 1. PCIT VS. PRAMOD JAIN & ORS ( APPEAL NO. 209/2018 DA TED 24-07-2018-(RAJASTHAN HIGH COURT ) 2. CIT VS. POOJA AGARWAL ( APPEAL NO. 385/2011 DATED 11-09-2017 ( RAJ HIGH COURT) 3. CIT VS. SUMITRA DEVI 102 DTR 342 ( RAJ HIGH COUR T ) 4. JVS FOOD PRIVATE LIMITED VS. DC1T 2018(11)TMI 1088 5. KAPIL MITTAL VS. ITO 20171(11) TMI 988 6. OM PRAKASH MODI VS. DCIT ITA NO. 402 & 403 /IP/201 7. 7. MEGHRAJ SINGH SHEKHAWAT VS. DCIT 443 & 444/ JP/201 7 8. DCIT VS. SAURABH MITTAL ITA NO. 16/JP/2016 9. VIVEK AGARWAL VS. ITO 292/JP/2017 ( JAIPUR) 10. PURUSHOTTAM SONI VS. ITO 288/1P/2017(JAIPUR) 19.1.5. RECENTLY HON'BLE SUPREME COURT IN ITS ORDER DATED 21-08- 2019 IN THE CASE OF ODEON BUILDERS PRIVATE LIMITED VS. CIT-7, NEW DELHI (CIVIL APPEAL NO. 9604-9605/2019) HAS HELD TH AT NO ADDITION CAN BE SUSTAINED IF IT IS DONE PURELY ON THE BASIS OF I NFORMATION RECEIVED FROM INVESTIGATION WING WITHOUT GIVING AN OPPORTUNI TY OF CROSS EXAMINATION TO THE ASSESSEE. 137 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE KEYS OBSERVATION BY THE HON'BLE COURT READS AS UNDER: 'THUS, THE ENTIRE DISALLOWANCE IN THIS CASE IS BASE D ON THIRD PARTY INFORMATION GATHERED BY THE INVESTIGATION WING OF T HE DEPARTMENT WHICH HAVE NOT BEEN INDEPENDENTLY SUBJECTED TO FURT HER VERIFICATION BY THE AD WHO HAS NOT PROVIDED THE COPY OF SUCH STATEM ENTS TO THE APPELLANT, THUS DENYING OPPORTUNITY OF CROSS EXAMIN ATION TO THE APPELLANT, WHO HAS PRIMA FACIE DISCHARGED THE INITI AL BURDEN OF SUBSTANTIATING THE PURCHASES THROUGH VARIOUS DOCUME NTATION INCLUDING PURCHASE BILLS, TRANSPORTATION BILLS, CONFIRMED COP Y OF ACCOUNTS AND THE FACT OF PAYMENT THROUGH CHEQUES, & VAT REGISTRATION OF THE SELLERS & THEIR INCOME TAX RETURN. IN VIEW OF THE ABOVE DISCU SSION IN TOTALITY, THE PURCHASES MADE BY THE APPELLANT FROM M/S PADMESH RE ALTORS PVT. LTD. IS FOUND TO BE ACCEPTABLE AND THE CONSEQUENT DISALL OWANCE RESULTING IN ADDITION TO INCOME MADE FOR RS.19,39,60,8661, IS DI RECTED TO BE DELETED 19.2 CONSIDERING THE ABOVE THE LD. AO IS DIRECTED T O ALLOW THE EXEMPTION CLAIMED U/S 10(38) OF THE ACT . SINCE THE LTCG IS HELD TO BE GENUINE THE CONSEQUENT COMMISSION PAID IS ALSO HELD TO BE ALLOWABLE. IN SUMMARY THE APPELLANT GETS RELIEF AS UNDER: AY LTCG CLAIMED U/S 10(38) OF THE ACT COMMISSION PAID REMARK 2012 - 13 RS. 23787711 RS. 475754 ALLOWED ON LEGAL AND ON MERITS 2013 - 14 RS. 90259457 RS. 1805189 ALLOWED ON LEGAL AND ON MERITS 2014 - 15 RS. 117514258 RS. 2350285 ALLOWED ON MERITS 2015-16 RS. 47943317 RS. 958866 ALLOWED ON MERITS 2016-17. RS. 9161687 RS. 183233 ALLOWED ON MERITS FACTS (ITA NO. 466/2017-18, AY 2014-15) GROUND NO. 4 20. WITH REFERENCE TO GROUND NO. 4, AO'S FINDING AR E REPRODUCED HEREIN AS UNDER: '...IT IS ALSO TO BE MENTIONED THAT DURING THE COUR SE OF SEARCH PROCEEDINGS IN THE CASE OF MOTISONS GROUP ON 22-07- 2015 SHRI SANJAY 138 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. CHHABRA (ONE OF THE KEY PERSON OF THE GROUP) HAD HI MSELF CATEGORICALLY ACCEPTED THE INVESTMENT IN BOGUS LONG TERM CAPITAL GAIN FROM SALE OF SHARES OF RS. 26,23,12,578/- ON BEHALF OF ALL THE F AMILY MEMBERS (WHICH INCLUDES RS. 7,71,35,2361 ON BEHALF OF OTHER FAMILY MEMBERS FOR THE YEAR UNDER CONSIDERATION) WHICH WAS STATED TO BE EA RNED FROM HIS ANTIQUE JEWELLERY BUSINESS. HE HAS VOLUNTARILY SURR ENDERED THIS AMOUNT FOR TAXATION DURING HIS STATEMENT RECORDED U/S 132( 4) OF THE LT. ACT WHICH WAS FURTHER CONFIRMED IN THE STATEMENTS RECOR DED DURING THE POST SEARCH PROCEEDINGS BUT THIS INCOME WAS NEITHER SHOW N IN THE RETURN OF INCOME FILED BY ANY OF THE FAMILY MEMBERS NOR BY TH E ASSESSEE HIMSELF FOR THE RELEVANT PERIOD. IT IS TO MENTION HERE THAT ALTHOUGH THE NECESSARY ADDITION HAD BEEN MADE IN THE RASP OF RELEVANT ASSE SSEE BY WHOM LTCG/STCG HAS BEEN CLAIMED IN HIS/HER RETURN OF INC OME OF AY 2014-15 AND TO PROTECT THE INTEREST OF REVENUE THE UNDISCLO SED BUSINESS INCOME OF RS. 7,71,35,236/-EARNED BY THE ASSESSEE FROM HIS ANTIQUE JEWELLERY BUSINESS IS TREATED AS HIS INCOME FOR YEAR UNDER CO NSIDERATION. THEREFORE, UNDISCLOSED BUSINESS INCOME AMOUNTING TO RS. 7,71,35,2361 AS DISCUSSED ABOVE IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON PROTECTIVE BASIS..' APPELLANT'S SUBMISSION 21. DURING THE COURSE OF APPELLATE PROCEEDINGS WRIT TEN SUBMISSIONS WERE MADE, THE MAIN PORTION OF WHICH ARE REPRODUCED BELOW . SUBMISSION OF ASSESSEE: - A) FROM PERUSAL OF THE ASSESSEE ORDER YOUR HONOUR W ILL FOUND THAT THE ENTIRE ADDITION IS BASED ON THE STATEMENT OF THE ASSESSMEN T GIVEN DURING THE COURSE OF SEARCH. THE SAID ADMISSION, DISCLOSURE AND SURRENDE R OF INCOME WAS WRONG, INCORRECT AND INVOLUNTARILY OBTAINED BY THE DEPARTM ENT FOR THE REASONS MENTIONED HEREUNDER. ACTUALLY, NO DOCUMENT WAS FOUN D SHOWING UNDISCLOSED INCOME FROM ANTIQUE JEWELLERY BUSINESS. THE INCOME FROM ANTIQUE JEWELLERY WAS STATED ON THE SUGGESTION OF SEARCH PARTY. NO AN Y DOCUMENT OR BOOK ENTRY OR STOCK WAS FOUND TO CORRELATE THE INCOME FROM ANT IQUE JEWELLERY. NO ANY DOCUMENT WAS FOUND BY THE SEARCH PARTY TO VISUALISE THE BOGUS SHARE PROFIT OR INCOME FROM ANTIQUE JEWELLERY. ALL THESE STATEMENTS WERE BECAUSE OF THE PRESSURE TECHNIQUE OF SEARCH PARTY. B) THE ADMISSION WAS DUE TO FEAR, DURESS, MENTAL TE NSION AND UNDER MISCONCEPTION, AND ON MISREPRESENTATION OF FACTS BY THE SEARCH PARTY. FROM THE PERUSAL OF THE STATEMENT, IT IS EVIDENT THAT THERE IS NO REFERENCE OF ANY DOCUMENT/EVIDENCE IN SUCH STATEMENT TO PROVE THAT T HE ASSESSEE GROUP WAS ACTUALLY HAVING SUCH ADMITTED ALLEGED UNDISCLOSED I NCOME. THE SURRENDER WAS NOT ACTUAL AND VOLUNTARY SURRENDER. FURTHER EVEN DU RING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO THE ID. AO COULD NOT PO INTED OUT ANY DOCUMENTS/MATERIAL FOUND AS A RESULT OF SEARCH/SURV EY WHICH SHOWS THAT THE ASSESSEE ACTUALLY EARNED THIS MUCH OF INCOME. 139 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. C) THE SEARCH PARTY AFTER RECORDING THE STATEMENT O F ASSESSEE DID NOT PROVIDE COPY OF STATEMENTS TO THE ASSESSEE GROUP. THE ASSES SEE GROUP WAS UNDER BONA-FIDE BELIEF THAT SINCE THE SEARCH PARTY HAS NO T GIVEN THE COPY OF THE STATEMENTS, THEREFORE, THE SAME WOULD NOT BE USED A GAINST THEM. AFTER THE SEARCH REQUEST WAS MADE TO INVESTIGATION WING AS WE LL AS AO TO PROVIDE THE COPY OF STATEMENTS RECORDED BY THE SEARCH PARTY. AF TER THE CONTINUOUS EFFORTS OF THE ASSESSEE GROUP, THE COPY OF THE STATEMENTS W ERE PROVIDED ON 08.12.2015 AND THEREAFTER ON 16.12.2015 SHRI SANJAY CHHABRA FILED THE AFFIDAVIT (COPY AT PB PAGE 67-69) BEFORE ID. AO TO RETRACT THE STATEMENTS. THE RELEVANT CONTENTS OF THE AFFIDAVIT IS AS UNDER: - 5. DURING THE COURSE OF SEARCH, I WAS UNDER FEAR, MENTAL TENSION AND UNDER MISCONCEPTION, AND ON MISREPRESENTATION OF FACTS BY THE SEARCH PARTY,. I ADMITTED IN THE STATEMENTS RECORDED BY SEARCH PARTY AND ALSO IN AFFIDAVIT FILED ALONGWITH LETTER DATED 28/07/2015 (ADDRESSED TO THE DY. DIRECTOR OF INCOME TAX, INVESTIGATION- 2, JAIPUR), THE UNDISCLOSED INC OME ON ACCOUNT OF LONG TERM/SHORT TERM CAPITAL GAIN FROM SALES OF SHARES O F UNNO INDUSTRIES LTD AND SULABH ENGINEERS & SERVICES LTD SHOWN IN MY NAME AN D IN THE NAME OF MY FAMILY MEMBERS NAMELY SMT. VIMLA DEVI JAIN (MOTHER) , SHRI SANDEEP CHHABRA (BROTHER), SMT. NAMITA CHHABRA (BROTHER'S WIFE) AND SMT. KAJAL CHHABRA (WIFE). IN THE STATEMENTS RECORDED DURING THE SEARC H, I WRONGLY ADMITTED FOR THE REASONS MENTIONED ABOVE THAT THE PROFIT OF RS. 26,10,07,521/- (RS. 11,78,56,123/- IN AY 2014-15 AND RS. 14,31,51,398/- IN AY 2015-16) FROM SHARES OF ABOVE NAMED COMPANIES IS BOGUS/MANAGED. F URTHER, IN THE STATEMENTS RECORDED DURING THE SEARCH, I WRONGLY AD MITTED FOR THE REASONS MENTIONED ABOVE THAT I PAID COMMISSION OF RS. 5,89, 300/ AND RS. 7,15,757/- IN AY 2014-15 AND AY 2015-16 RESPECTIVELY FOR ARRAN GING THE SHARE PROFITS FROM THE ABOVE NAMED COMPANIES. SIMILARLY, IN THE A FFIDAVIT FILED BEFORE DDIT, INV-2, JAIPUR ON 28/07/2015, I WRONGLY ADMITTED THE SURRENDER AND AGREED TO PAY TAX ON THE PROFIT OF RS. 26,23,12,578/- (RS. 11 ,84,45,423/- IN AY 2014-15 AND RS. 14,38,67,155/- IN AY 2015-16) ON ACCOUNT OF LONG TERM/SHORT TERM CAPITAL GAIN FROM SALES OF SHARES. THE ABOVE SAID A DMISSION, DISCLOSURE AND SURRENDER OF INCOME WAS WRONG, INCORRECT AND INVOLU NTARILY OBTAINED BY THE DEPARTMENT FOR THE REASONS MENTIONED ABOVE WHILE AL L THE TRANSACTIONS ARE GENUINE AND VERIFIABLE FROM THE RECORDS AND DOCUMEN TS FOUND AS THE RESULT OF SEARCH. I AM THEREFORE AFTER READING MY STATEMENTS, MAKING THIS AFFIDAVIT WITH A CLEAR PURPOSE TO RETRACT SUCH INCORRECT STATEMENT OBTAINE D BY IT DEPARTMENT FROM ME. 6) MY OTHER FAMILY MEMBERS HAS GIVEN ACCEPTANCE TO MY STATEMENT AT MY SAYING FOR THE REASONS EXPLAINED IN PARA 5 ABOVE. 7) THIS AFFIDAVIT IS MADE BY ME VOLUNTARILY TO CLAR IFY THE ABOVE FACTS AND PARTICULARLY TO RETRACT THE WRONGFULLY OBTAINED ABO VE SAID DISCLOSURE OF RS. 26,23,12,57W-ON ACCOUNT OF PROFIT FROM SHARES WHICH IN FACT IS NOT UNACCOUNTED INCOME EARNED BY ME AND THE SAME IS NOT BINDING ON ME.' FURTHER THE SAME POSITION WAS ALSO CLARIFIED BY SHR I SANJAY CHHABRA IN THE LETTER DATED 04/01/2016 FILED BEFORE PRINCIPLE DIT, JAIPUR COPY OF WHICH IS ENCLOSED HEREWITH. 140 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. D) DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO V ERIFY THE VERACITY OF THE AFFIDAVIT FILED BY SHRI SANJAY CHHABRA WHEREBY HE R ETRACTED THE SEARCH STATEMENT, THE ID. AO RECORDED THE STATEMENT ON 04. 12.2017 U/S 131 OF I. TAX ACT (COPY AT PB PAGE 70-77) WHEREIN HE DENIED TO HA VE EARNED ANY UNDISCLOSED INCOME ON THIS ACCOUNT. HOWEVER NO HEED WAS GIVEN B Y ID. AO TO STATEMENTS U/S 131 OF I. TUX ACT AND SWORN AFFIDAVIT. E) THUS WHATEVER SURRENDER MADE BY SHRI SANJAY CHHA BRA DURING THE COURSE OF SEARCH WAS NOT VOLUNTARILY BUT THE SAME WAS BECAUSE OF MENTAL TENSION, FEAR AND DUE TO MISCONCEPTION AND MISREPRESENTATION OF F ACTS BY THE SEARCH PARTY. THUS THE SURRENDER WAS NOT CORRECT AND REAL AND THE SAME IS NOT BACKED BY THE DOCUMENTS/EVIDENCE. FROM THE READING OF STATEMENT Y OUR HONOUR WOULD FIND THAT THE SEARCH PARTY HAS NOT BROUGHT ANY POSITIVE MATERIAL OR INCRIMINATING DOCUMENTS BEFORE THE ASSESSEE GROUP WHICH MADE THE ASSESSEE TO SURRENDER THE UNDISCLOSED INCOME. THE SAME FACTS PROVES FROM THE ASSESSMENT ORDER ALSO WHEREIN ALSO THE ID. AO COULD NOT REFER ANY SEIZED DOCUMENT IN SUPPORT OF ADDITION MADE ON THE BASIS OF STATEMENT OF THE ASSE SSEE. F) SHRI SANJAY CHHABRA RETRACTED FROM THE STATEMENT ON THIS ISSUE WHEN COPIES OF STATEMENT PROVIDED, THEREFORE THE RETRACTED STAT EMENT DOES NOT HAVE ANY LEGAL VALUE IN ABSENCE OF ANY CORROBORATIVE MATERIA L. THE INCOME TAX DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATION S OVER THE ASSESSEE GROUP AND DURING THE COURSE OF SEARCH NO EVIDENCE/DOCUMEN TS WAS FOUND TO THE DEPARTMENT WHICH SHOWS THAT THE ASSESSEE EARNED THE UNDISCLOSED INCOME WHICH ADMITTED IN THE STATEMENT. EXCEPT TO STATEMEN T OF SHRI SNAJAY CHHABRA WHICH WAS GIVEN FOR THE REASONS MENTIONED HEREINABO VE AND RETRACTED SUBSEQUENTLY THERE IS NO EVIDENCE WITH THE DEPARTME NT TO PROVE THAT THE ASSESSEE EARNED THIS MUCH OF UNDISCLOSED INCOME. G) THE INCOME TAX ACT IS SPECIFIC ACT AND THE ASSES SMENT HAS TO BE MADE ON THE BASIS OF MATERIAL GATHERED DURING SEARCH OR DURING ASSESSMENT PROCEEDINGS AND IN THE CASE OF ASSESSEE THERE IS NO SUCH MATERIAL W ITH THE DEPARTMENT. H) THE ADDITION CANNOT BE MADE MERELY ON THE BASIS OF SEARCH STATEMENT EXCEPT TO SEARCH STATEMENT WHICH WAS LATER ON RETRACTED BY SHRI SANJAY CHHABRA BY FILING AFFIDAVIT THERE IS NOTHING WITH THE DEPARTME NT TO VISUALIZE THAT THE ASSESSEE GROUP EARNED THIS MUCH UNDISCLOSED INCOME. IT IS WE LL SETTLED PRINCIPAL OF LAW THAT NO ADDITION CAN BE MADE ONLY ON THE BASIS OF S EARCH STATEMENT MORE SO WHEN THERE IS NO SUPPORTING EVIDENCE WITH DEPARTMEN T RO PROVE THAT THE SURRENDER MADE IN THE STATEMENT WAS CORRECT. THE DE PARTMENT HAS NO EVIDENCE/DOCUMENTS WHICH PROVE THAT SURRENDER IN ST ATEMENT BY SHRI SANJAY CHHABRA IS CORRECT, THEREFORE THE SAME CANNOT BE RE LY. I) THE BOARD OF DIRECT TAXES ISSUED INSTRUCTION TO THE ALL CHIEF COMMISSIONERS OF INCOME TAX, (CADRE CONTRA) & ALL D IRECTORS GENERAL OF INCOME TAX INV. VIDE LETTER F. NO. 286/2/2003-I T (INV) DATED 10.03.2003 IN REGARD OF CONFISCATORY STATEMENT IN THE COURSE OF SEARCH AND SEIZER AS UNDER: 'INSTANCES HAVE COME TO THE NOTICE OF THE BOARD WHE RE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH .& SEIZURE A ND SURVEY 141 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. OPERATIONS. SUCH CONFESSIONS, IF NOT BASED UPON CRE DIBLE EVIDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHIL E FILING RETURNS OF INCOME. IN THESE CIRCUMSTANCES, ON CONFESSIONS D URING THE COURSE OF SEARCH & SEIZURE AND SURVEY OPERATIONS DO NOT SERVE ANY USEFUL PURPOSE. IT IS, THEREFORE, ADVISED THAT THER E SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCO ME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILA RLY, WHILE RECORDING STATEMENT DURING THE COURSE OF SEARCH IT SEIZURES AND SURVEY OPERATIONS NO ATTEMPT SHOULD BE MADE TO OBTA IN CONFESSION AS TO THE UNDISCLOSED INCOME. ANY ACTION ON THE CON TRARY SHALL BE VIEWED ADVERSELY. FURTHER, IN RESPECT OF PENDING ASSESSMENT PROCEEDIN GS ALSO, ASSESSING OFFICERS SHOULD RELY UPON THE EVIDENCES/M ATERIALS GATHERED DURING THE COURSE OF SEARCH/SURVEY OPERATI ONS OR THEREAFTER WHILE FRAMING THE RELEVANT ASSESSMENT OR DERS'. THE BOARD HAS AGAIN ISSUED A CIRCULAR DATED 18 TH DECEMBER, 2014 AND ADVISED THE TAXING AUTHORITIES TO AVOID OBTAINI NG ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCE. EXCEPT THE STATEMENT UNDER SECTION 132(4) THERE IS NO UNDISCLO SED INCOME IN THE CASE OF THE ASSESSEE. THE ASSESSEE WAS FORCED T O ADMIT AND SURRENDER THE INCOME IN THE STATEMENT RECORDED UNDE R SECTION 132(4). J) IN THIS REGARD WE RELY ON THE JUDGMENTS REFERRED IN THE SUBMISSION OF PARA 1 OF GROUND NO. 1. IN VIEW OF ABOVE SUBMISSION YOUR HONOUR IS REQUESTE D KINDLY TO DELETED THE PROTECTIVE ADDITION MADE BY ID. AO SOLE LY ON THE BASIS OF STATEMENTS RECORDED DURING THE COURSE OF SEARCH. DECISION 22. I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMITTE D BY THE LD. A/R AND THE ORDER OF AO. I HAVE ALSO GONE THROUGH VARIO US JUDGMENTS CITED BY THE LD. A/R AND THOSE CONTAINED IN THE ORDER OF AO. 22.2 I AM IN AGREEMENT WITH THE LD. A/R THAT ADDITI ON CANNOT BE MADE MERELY ON THE BASIS OF STATEMENT. A DETAILED DISCUS SION IN THIS REGARD HAS ALREADY BEEN MADE IN PARA 12 ON PAGE 62 ONWARDS OF THOSE ORDER 142 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. (SUPRA). THAT BEING SO I AM NOT INCLINED TO SUSTAIN THE ADDITION OF RS. 7,71,35,236/- MADE ON PROTECTIVE BASIS. APPELLANTS GROUND NO. 4 IS ALLOWED. GROUND NO. 5. 23. WITH REFERENCE TO GROUND NO. 5, AOS FINDINGS A RE REPRODUCED HEREIN AS UNDER :- .ON PERUSAL OF PAGE NO. 83 OF ANNEXURE-A, EXHIBIT -1 SEIZED FROM THE RESIDENCE OF THE AT B-9, VIVEKANAND MARG, JAIPUR WHICH SHOWS DEBIT AND CREDIT BALANCES OF VARIOUS PARTIES AND HEADS. ON VERIFICATION OF THESE DETAILS WITH THE PROPERTY DETAILS FOUND IN THE HARD DISK ANNEXURE-AS-2 (SEIZE D FROM SB-110, MOTISONS TOWER, TONK ROAD, JAIPUR), IT HAS FOUND THAT ASSESS EE ALONG WITH HIS BROTHER (SHRI SANDEEP CHABBRA) PAID RS. 5,50,000/- ON ACCOU NT OF REGISTRATION CHARGES FOR PURCHASING THE PROPERTY AT GAIJI KHASARA NO. 91 5/1, KHASARA NO. 916/2/2/1, LAND AT BAGRU KHURD K.NO. 41 ETC. IN THIS REGARD V IDE ORDER SHEET DATED 23-12- 2017 ASSESSEE WAS ASKED TO STATE HIS CASE. THE A/R OF THE ASSESSEE VIDE LETTER DATED 26-12-2017 FURNISHED REPLY THAT THE TOTAL PAY MENT TOWARDS PURCHASE OF STAMP WAS OF RS. 5,00,000/- AS AGAINST RS. 5,50,000 /- MENTIONED IN THE SHOW CAUSE AND THIS AMOUNT WAS PAID BY THE ASSESSEE AND HIS BROTHER OUT OF THE SAVINGS FROM FUNDS WITHDRAWN TOWARDS THE HOUSEHOLD EXPENSES. ON PERUSAL OF THE BOOKS OF ACCOUNTS AND BALANCE SHEET OF THE ASSE SSEE IT REVEALS THAT THE LAND SO PURCHASE IS PART OF FIXED ASSETS OF THE ASSESSEE . THUS, THE STAMP DUTY PAID AT THE TIME OF REGISTRATION SHOULD HAVE BEEN ADDED IN THE COST OF THE PROPERTY WHICH HAS BEEN DONE BY THE ASSESSEE IN THE CASE OF OTHER PROPERTIES PURCHASED BY HIM. AS REGARD TO CLAIM OF THE ASSESSEE THAT THE PAYMENT MADE OUT OF HOUSEHOLD WITHDRAWALS IS NOT ACCEPTABLE AS THIS MUCH PAYMENT NOT FOUND DEBITED IN THE HOUSEHOLD EXPENSES IN THE BOOKS OF ACCOUNTS. THUS I N VIEW OF ABOVE IT IS CLEAR THAT THE ASSESSEE HAS NO JUSTIFICATION REGARDING TO PAYMENT MADE OF RS. 2,50,000/- HENCE THE SAME IS HERE BY ADDED TO THE T OTAL INCOME OF THE ASSESSEE U/S 69C OF THE I.T. ACT AS UNEXPLAINED EXPENDITURE . APPELLANTS SUBMISSION 24. DURING THE COURSE OF APPELLATE PROCEEDINGS WRIT TEN SUBMISSIONS WERE MADE, THE MAIN PORTION OF WHICH ARE REPRODUCED BELOW. SUBMISSION OF ASSESSEE :- I) ADMITTEDLY DURING THE YEAR THE ASSESSEE JOINTLY WIT H HIS BROTHER SHRI SANDEEP CHHABRA MOF RS. 5,00,000/- AGAINST STAMP PURCHASES FOR REGISTRATION OF SALES DEED OF LAND PURCHASES AT GAIJI. THE PAYMENT OF STA MP DUTY CHARGES WERE MADE 143 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. BY THE ASSESSEE AND HIS BROTHER OUT OF WITHDRAWALS MADE BY THE ASSESSEE GROUP TOWARDS HOUSE HOLD EXPENSES. II) THE CHAT CONTAINING THE HOUSEHOLD WITHDRAWALS OF TH E ENTIRE FAMILY OF THE ASSESSEE GROUP OF THE YEAR UNDER CONSIDERATION WAS AS UNDER :- A) SHRI SANDEEP CHHABRA RS. 13,45,569/- B) SHRI SANJAY CHHABRA RS. 13,03,385/- C) SMT. NAMITA CHHABRA RS. 4,98,507/- D) SMT. KAJAL CHHABRA RS. 2,45,000/- E) SMT. VIMLA DEVI JAIN RS. 2,68,715/- F) SANJAY CHHABRA HUF RS. 72,000/- TOTAL : RS. 37,33,176/- III) THUS THE WITHDRAWALS MADE BY THE ASSESSEE AND HIS F AMILY MEMBERS TOWARDS THE HOUSEHOLD EXPENSES ARE QUITE SUFFICIENT TO COVER TH E AMOUNT EXPENDED AGAINST STAMPS DUTY CHARGES. THERE IS NO FINDING OF THE LD. AO IN THE ASSESSMENT ORDER THAT THE DRAWINGS SHOWN BY THE ASSESSEE GROUP WAS N OT SUFFICIENT TO MEET OUT THE EXPENSES FOUND RECORDED IN SEIZED DOCUMENTS. IV) THE LD. AO REJECTED THE SUBMISSION OF THE ASSESSEE FOR THE FOLLOWING TWO REASONS :- A) THE AMOUNT NOT FOUND DEBITED IN COST OF LAND. B) THE AMOUNT NOT FOUND DEBITED IN HOUSEHOLD EXPENSES. IN THIS REGARD WE SUBMIT THAT PAYMENT WAS MADE BY T HE ASSESSEE AND HIS BROTHER OUT OF WITHDRAWAL MADE TOWARDS HOUSEHOLD WI THDRAWALS AND NO SEPARATE AMOUNT WAS EXPENSED FOR THIS PURPOSE, THEREFORE, TH E SAME WAS NOT FOUND DEBITED IN COST OF LAND. FURTHER THE ASSESSEE GROUP IS NOT MAINTAINING THE DAY TO DAY AND HEAD TO HEAD ACCOUNTING OF HOUSEHOLD WITHDR AWAL. THE CONSOLIDATE ENTRY OF AMOUNT WITHDRAWN FOR HOUSE HOLD IS DEBITED IN BO OKS OF ACCOUNTS AND THE NO ACCOUNTING IS BEING DONE FOR SUBSEQUENT EXPENDITURE AGAINST SUCH WITHDRAWAL. THEREFORE THIS AMOUNT CANNOT BE FOUND DEBITED IN HO USEHOLD EXPENSES BECAUSE PART AMOUNT WITHDRAW FROM BOOKS AGAINST HOUSEHOLD E XPENSES WAS UTILIZED FOR PURCHASING OF STAMPS FOR REGISTRATION. IN VIEW OF ABOVE THIS IS TO SUBMIT THAT THE ADDITIO N MADE BY LD. AO SHOULD BE DELETED. DECISION 25. I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMITTE D BY THE LD. A/R AND THE ORDER OF AO. THE FACT OF PAYMENT OF STAMP D UTY OF RS. 25 LAKHS, IN CASH, EVIDENCED FROM SEIZED DOCUMENT (PAGE 83 OF EXH 1 OF ANNEXURE AS). I HAVE EXAMINED THE SUBMISSIONS MADE & I AM O F THE VIEW THAT SUBMISSIONS ARE NOT FACTUALLY CORRECT. THE RELIANCE OF SUCH PAYMENT FROM 144 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. DRAWING IS AN AFTERTHOUGHT. THE ACTION OF LD. AO IN MAKING ADDITION IS CORRECT. THE ADDITION OF RS. 2.5 LAKHS IS CONFIRMED . APPELLANTS APPEAL IN GROUND NO. 5 IS DISMISSED. GROUND NO. 6. 26. WITH REFERENCE TO GROUND NO. 6, IT IS SEEN THAT THE AO HAS ERRED IN NOT REDUCING THE SHORT TERM CAPITAL GAIN OF RS. 67, 98,320/- EARNED ON SALES OF SHARES OF M/S. UNNO INDUSTRIES OUT OF ADDI TION OF RS. 11,75,14,258/- MADE U/S 68 OF THE ACT WHICH WAS ALR EADY PART OF TAXABLE TOTAL INCOME DECLARED BY THE ASSESSEE AND THUS THIS ADDITION TANTAMOUNT TO DOUBLE TAXATION. APPELLANTS SUBMISSION 27. DURING THE COURSE OF APPELLATE PROCEEDINGS WRIT TEN SUBMISSIONS WERE MADE, THE MAIN PORTION OF WHICH ARE REPRODUCED BELOW. WITHOUT PREJUDICE TO OUR SUBMISSION MADE FOR GROUND NO. 2 AND 3 OF APPEAL THIS IS TO SUBMIT THAT THE ADDITION OF RS . 11,75,14,258/- MADE BY LD. AO BY TREATING THE ALLEGED BOGUS CAPITG AL GAIN AS INCOME OF THE ASSESSEE INCLUDES THE SHORT TERM CAPI TAL GAIN OF RS. 67.98,320/- DECLARED BY ASSESSEE ON SALES OF SHARES OF UNNO INDUSTRIES (COMPUTATION AT PB PAGE 6) WHICH WAS TAX ABLE INCOME AND THE SAME WAS ALREADY TAXED BY THE ASSESSEE IN H IS ITR. WHILE MAKING THE ADDITION OF ALLEGED BOGUS CAPITAL GAIN T HE LD. AO DID NOT REDUCED THIS AMOUNT FROM THE RETURNED INCOME/ADDITI ON SO MADE BY HIM WHICH RESULTED THE DOUBLE TAXATION OF THIS I NCOME. DECISION 28. I HAVE PERUSED THE WRITTEN SUBMISSIONS SUBMITTE D BY THE LD. A/R AND THE ORDER OF AO. SINCE THE LTCG FROM M/S. UNNO IS TREATED AS GENUINE THE GROUND IS INFRUCTUOUS. THE SAME IS DISMISSED. T HE LD. AO SHALL ALLOW THE CLAIM OF STCG ON UNNO AS PER LAW. THE GROUND IS ALLOWED AS INDICATED. 145 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES DISCUSSED ABOVE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD . CIT (A). BEFORE PARTING WITH THE MATTER, WE MAY POINT OUT THAT THE STATEMENTS RECORD ED BY THE INVESTIGATION WING DURING THE SEARCH AND SEIZURE ACTION TAKING THE CON FESSION AND SURRENDER FROM THE ASSESSEE ARE CLEARLY IN VIOLATION OF THE INSTRUCTIO NS OF THE CBDT VIDE F. NO. 286/2/2003- IT(INV.) DATED 10 TH MARCH, 2003 WHEREIN THE BOARD HAS EXPRESSED ITS SE RIOUS CONCERN ABOUT THE FACT THAT THE ASSESSEES HAVE CLAIMED THAT THEY HAVE BEEN FORCED TO CONFESS THE UNDISCLOSED INCOME DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATION. SUCH CONFESSIONS, IF NOT BASED UPON THE CREDIBLE EV IDENCE, ARE LATER RETRACTED BY THE CONCERNED ASSESSEES WHILE FILING RETURNS OF INCOME. IT IS, THEREFORE, ADVISED THAT THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE OF INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NO T LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENTS. SIMILARLY, WHILE RECORDING THE STATEMENT DURING THE COURSE OF SEARCH AND SEIZURE AND SURVEY OPERATIONS, NO ATTEMP T SHOULD BE MADE TO OBTAIN CONFESSION AS TO THE UNDISCLOSED INCOME. THE BOARD HAS AGAIN ISSUED A CIRCULAR DATED 18 TH DECEMBER, 2014 AND ADVISED THE TAXING AUTHORITIES TO AVOID OBTAINING ADMISSION OF UNDISCLOSED INCOME UNDER COERCION/UNDUE INFLUENCES. THUS IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND SEIZURE ACTION, THE CONFESSION AS RECORDED DURING THE COURSE OF SEARCH AND SEIZURE ACTION HAS NO EVIDENTIARY VALUE. IT IS ALSO PERTINENT TO NOTE TH AT IF A CONFESSION REVEALING CERTAIN INFORMATION OR DISCLOSING CERTAIN TRANSACTIONS WHIC H ARE NOT DISCLOSED BY THE ASSESSEE IN 146 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. THE BOOKS OF ACCOUNT, THE SAME HAS A GOOD EVIDENTIA RY VALUE AND A SIMPLICITOR RETRACTION OF SUCH STATEMENT CANNOT BE ACCEPTED UNTIL AND UNLE SS THE ASSESSEE AT THE TIME OF RETRACTION EXPLAINS THE MISTAKES AND CIRCUMSTANCES UNDER WHICH SUCH MISTAKES WERE COMMITTED WHILE MAKING THE CONFESSION. IN THE CASE IN HAND, THE CONFESSION OF THE ASSESSEE IS NOT REVEALING ANY TRANSACTION WHICH IS NOT ALREADY DISCLOSED OR RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, ANY CONFESSION OF UNDISCLOSED INCOME WHICH IS ALREADY PART OF BOOKS OF ACCOUNT AS WELL AS ALREADY DISCLOS ED IN THE RETURN OF INCOME FILED UNDER SECTION 139(1), IN THE ABSENCE OF ANY SUPPORTING DO CUMENTARY EVIDENCE CANNOT BE REGARDED AS A GOOD EVIDENCE FOR ADDITION. HENCE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) QUA THIS I SSUE. THIS COVERS THE GROUND NOS. 1 TO 8 OF THE REVENUES APPEAL. GROUND NO. 9 IS REGARDING THE PROTECTIVE ADDITION M ADE BY THE AO ON ACCOUNT OF UNACCOUNTED INCOME FROM BUSINESS OF ANTI QUE JEWELLERS WAS DELETED BY THE LD. CIT (A). 6. WE HAVE HEARD THE LD. D/R AS WELL AS THE LD. A/R AN D CONSIDERED THE MATERIAL ON RECORD. THIS ADDITION MADE BY THE AO IS PROTECTIVE IN NATURE AS THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 132(4) HAS STATED THAT THE UNDISCLOSED INCOME ON ACCOUNT OF BOGUS CAPITAL GAIN IS DERIVED FROM THE A NTIQUE JEWELLERY BUSINESS OF THE ASSESSEE. THE AO HAS NEITHER REFERRED ANY MATERI AL/INCRIMINATING MATERIAL FOUND 147 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. DURING THE COURSE OF SEARCH AND SEIZURE NOR BROUGHT ON RECORD BY THE AO EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS THIS AD DITION WAS MADE BASED ON THE STATEMENT OF THE ASSESSEE RECORDED UNDER SECTION 13 2(4) OF THE IT ACT WITHOUT ANY MATERIAL OR EVIDENCE. SINCE THIS IS ONLY A CONSEQU ENTIAL AND ALTERNATIVE ADDITION MADE BY THE AO PURSUANT TO THE ADDITION MADE ON ACCOUNT OF BOGUS ACCOMMODATION ENTRIES IN RESPECT OF THE LONG TERM CAPITAL GAIN DECLARED B Y THE ASSESSEE, THEREFORE, IN VIEW OF OUR FINDING ON THE ISSUE OF TREATING THE LONG TERM CAPITAL GAIN BY THE AO AS BOGUS ACCOMMODATION ENTRIES, THIS PROTECTIVE ADDITION MAD E BY THE AO WOULD NOT SURVIVE. 7. SINCE THE ISSUES INVOLVED IN THE REST OF THE APP EALS ARE IDENTICAL AND BOTH PARTIES HAVE AGREED AT THE TIME OF HEARING THAT THE APPEAL IN ITA NO. 49/JP/2020 MAY BE TAKEN AS A LEAD CASE WHICH COVERS ALL OTHER APPEALS, THER EFORE, OUR FINDING IN ITA NO. 49/JP/2020 IS APPLICABLE IN ALL OTHER APPEALS AND C ONSEQUENTLY ALL THE APPEALS OF THE REVENUE STAND DISPOSED OFF BEING DISMISSED. CROSS OBJECTION NO. 07/JP/2020. 8. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE ORDER PASSED U/S 153A READ WITH SECTION 143(3) OF T HE INCOME TAX ACT 1961 IS BAD IN LAW, VOID AUTHORITIES BELOW-INIT IO, AND DESERVES TO BE ANNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND IN THE COMPLETED 148 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. ASSESSMENT NO ADDITION CAN BE MADE IN ASSESSMENT MA DE U/S 153A R.W.S. 143(3) CONSEQUENT TO SEARCH UNLESS SOME INCR IMINATING MATERIAL IN SUPPORT OF ADDITION IS FOUND AS A RESUL T OF SEARCH. THE LD. CIT (A) ERRED IN DISMISSING THIS GROUND OF APPE AL BY HOLDING THAT ON THE DAY OF SEARCH THE ASSESSMENT WAS PENDIN G AND NOTICE U/S 143(2) OF THE ACT CAN BE ISSUED WHILE THE NOTIC E U/S 143(2) COULD BE ISSUED UPTO 30.09.2014 I.E. MUCH PRIOR TO THE DATE OF SEARCH CARRIED OUT ON 22.07.2015. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING OF APPEAL. 9. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. CIT D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. CIT (A) WHILE PASSING THE IMPUGNED ORDER HAS HELD THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2013-14 WAS PEND ING IN THE CASE OF THE ASSESSEE ATUL KUMAR SOGANI ON THE DATE OF SEARCH WHICH IS FA CTUALLY INCORRECT AS THE TIME LIMIT FOR ISSUING THE NOTICE UNDER SECTION 143(2) OF THE IT A CT WAS UPTO 30 TH SEPTEMBER, 2014 WHEREAS THE SEARCH WAS CARRIED ON 22 ND JULY, 2015. THE LD. D/R HAS NOT DISPUTED THIS FACTUAL ERROR OCCURRED IN THE IMPUGNED ORDER OF THE LD. CIT (A). TO THAT EXTENT WE SET ASIDE THE ORDER OF THE LD. CIT (A) AND HOLD THAT TH E ASSESSMENT FOR THE ASSESSMENT YEAR 2013-14 WAS NOT PENDING AS ON THE DATE OF SEARCH I. E. 22 ND JULY, 2015. SINCE THE ISSUE IS OTHERWISE DECIDED IN FAVOUR OF THE ASSESSEE IN T HE APPEAL FILED BY THE REVENUE, THEREFORE, IN VIEW OF OUR FINDING ON THE APPEAL OF THE REVENUE, NO SEPARATE ADJUDICATION OF THE GROUND RAISED BY THE ASSESSEE IN THE CROSS O BJECTION IS REQUIRED EXCEPT CORRECTING THE MISTAKE IN THE ORDER OF THE LD. CIT (A). 149 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS. 9. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMIS SED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19/08 /2020. SD/- SD/- ( JES'K LH- 'KEKZ ) ( FOT; IKY JKWO (RAMESH C. SHARMA ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 19/08/2020. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI SANDEEP CHHABRA, SHRI SANJA Y CHHABRA, SMT. NAMITA CHHABRA, SMT. KAJAL CHHABRA, LATE SMT. VIMLA DEVI J AIN, SHRI ATUL KUMAR SOGANI, JAIPUR. 2. THE RESPONDENT THE DCIT, CENTRAL CIRCLE-2, JAI PUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 42 TO 61 & 63/JP/2020 & CO N O. 07/JP/2020) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 150 ITA NO. 42 TO 61 & 63/JP/2020 SHRI SANDEEP CHHABRA, JAIPUR & OTHERS.
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