SARAVANA REALITY PRIVATE LIMITED, CHENNAI V. DCIT CENTRAL CIRCLE 3 (4), CHENNAI

ITA 697/CHNY/2018

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9785 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Assessee Lawyers: R MEENAKSHISUNDARAM
• Keywords: Unexplained cash credit; Income from undisclosed sources; Search and seizure; Peak credit; Additional evidence; Condonation of delay; Set aside
• Section: 251; 13; 153C; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.696 & 697/CHNY/2018 ( / ASSESSMENT YEAR: 2007-08 & 2013-14 ) M/S. SARAVANA REALTY PVT.LTD KGS CORPORATE HOUSE, 63, KAMARAJ AVENUE ROAD 1 ST STREET, ADYAR,CHENNAI-600 020. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4) CHENNAI-600 034. PAN: AAKCS0474R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. R.MEENAKSHI SUNDARAM, ADVOCATE /RESPONDENT BY : MR ABANI KANTA NAYAK, CIT & MR G.JOHNSON, ADDL.CIT /DATE OF HEARING : 17.12.2020 /DATE OF PRONOUNCEMENT : 31.12.2020 / O R D E R PER BENCH: THESE TWO APPEALS ARE FILED BY THE ASSESSEE ARE DIR ECTED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF LEARNED C IT(A) -19, CHENNAI BOTH DATED 07.12.2017 AND PERTAIN TO ASSESSMENT YE ARS 2007-08 AND 2013-14. SINCE, THE FACTS ARE IDENTICAL AND I SSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY WERE HEAR D TOGETHER AND ARE DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. THE ASSESSEE HAS MORE OR LESS RAISED COMMON GR OUNDS OF APPEAL FOR THE ABOVE MENTIONED ASSESSMENT YEARS, THEREFORE, FOR 2 ITA NOS.696 & 697/CHNY/2018 THE SAKE OF BREVITY, GROUNDS OF APPEAL FILED FOR T HE ASSESSMENT YEAR 2007-08 IN ITA NO.696/CHNY/2018 ARE REPRODUCED AS U NDER:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAIS)-1, CHENNAI DATED 12-12-2017 IN ITA NO.260 /2015- 16 ENHANCING THE ASSESSMENT TO THE EXTENT OF RS.15, 000/- AND RS47,053/- IN A PROCEEDING U/S.153A/153C OF THE ACT CONSEQUENT TO THE SEARCH CONDUCTED ON A PARTY OTHER THAN THE APPELLANT-ASSESSEE AND IN WHICH NO MATERIAL RELEVAN T TO THE ENHANCEMENT MADE BY THE COMMISSIONER WAS SEIZED, IS WITHOUT JURISDICTION, BARRED BY LIMITATION, AGAINST THE PROVISIONS OF LAW AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) SHOU LD HAVE FOUND THAT WHEN AN ASSESSMENT IS SOUGHT TO BE MADE U/S.153C OF THE ACT, NO ADDITION CAN BE MADE EXCEP T ON THE BASIS OF MATERIAL SEIZED DURING THE SEARCH ON SOME OTHER ASSESSEE. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) SHOUL D HAVE FOUND THAT THE JURISDICTION TO MAKE AN ASSESSMENT U /S.153C R.W.S.153A CAN BE ASSUMED BY THE ASSESSING OFFICER ONLY ON THE BASIS OF ANY BOOKS OF ACCOUNT OR DOCUMENTS SEIZ ED AS STIPULATED BY SUB-CLAUSE (B) OF SECTION 153C(1) AS ALSO SUB CLAUSE (A) OF THE SAID SECTION AND IN THE ABSENCE O F ANY MATERIAL SEIZED DURING THE SEARCH, NO SATISFACTION COULD HAVE BEEN RECORDED BY THE ASSESSING OFFICER CONFERRING J URISDICTION U/S.153C OF THE ACT AND CONSEQUENTLY, THE IMPUGNED ASSESSMENT MADE IS ILLEGAL AND WITHOUT JURISDICTION . 4. THE COMMISSIONER OF INCOME TAX (APPEALS) SHO ULD HAVE FOUND THAT THE ISSUE AS TO THE REQUIREMENT OF MATER IAL SEIZED DURING THE SEARCH FOR MAKING AN ASSESSMENT U/S.153C R.W.S.153A HAS BEEN DECIDED IN FAVOUR OF THE ASSESS EE IN A NUMBER OF CASES INCLUDING THE DECISION OF THE KERAL A HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. PROMY KURIAKOSE 386 ITR 597 AND ALSO THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. REFAM MANAGEMENT SERVICES PRIVATE LIMITED 386 ITR 693 (DE L.) AS ALSO THE DECISION OF COMMISSIONER OF INCOME TAX VS. RENU CONSTRUCTIONS PRIVATE LIMITED 399 ITR 262 AND CANYO N FINANCIAL SERVICES LIMITED VS. INCOME TAX OFFICER 3 99 ITR 202 (DEL.). RELIANCE IS ALSO PLACED UPON DECISION OF TH E SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SINGAD TECHNICAL EDUCATION SOCIETY (SC) 397 ITR 344 AFFIRM ING THE DECISION OF THE BOMBAY HIGH COURT IN 378 ITR 84 (BO M.) AS ALSO THE DECISION OF THE GUJARAT HIGH COURT IN KAMA LESHBHAI 3 ITA NOS.696 & 697/CHNY/2018 DHARAMSHIBHAI PATEL WHICH HAS BEEN APPROVED BY THE SUPREME COURT. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) SHOU LD HAVE FOUND THAT IN THE PRESENT CASE THE ENHANCEMENT MADE BY HIM TO THE EXTENT OF RS.15,000/- AND RS.47,053/- IS NOT ON THE BASIS OF ANY MATERIAL SEIZED DURING THE SEARCH NOR ON THE BASIS OF ANY SATISFACTION RECORDED BY THE ASSESSING OFFIC ER HAVING JURISDICTION OVER THE PARTY SUBJECTED TO THE SEARCH AND CONSEQUENTLY THE ASSUMPTION U/S.153C FOR ENHANCING THE ASSESSMENT BY THE COMMISSIONER IN EXERCISE OF HIS P OWERS U/S.251(1)(B) OF THE ACT, IS MISCONCEIVED, WITHOUT AUTHORITY OF LAW AND BEYOND THE POWERS OF THE COMMISSIONER OF IN COME TAX (APPEALS) U/S.251OF THE ACT. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ENHANCING THE ASSESSMENT WITHOUT PROVIDING AN OPPOR TUNITY TO THE APPELLANT FOR FILING ITS OBJECTIONS TO THE PROP OSAL. THE COMMISSIONERS STATEMENT AS TO GIVING AN OPPORTUNIT Y TO THE APPELLANT IN THE COURSE OF APPEAL HEARING IS FACTUA LLY INCORRECT AND NO SUCH OPPORTUNITY WAS GIVEN. THE COMMISSIONER SHOULD HAVE FURTHER FOUND THAT IN THE PRESENT CASE THE SO- CALLED ENHANCEMENT HAS BEEN MADE IN RESPECT OF A SOURCE WH ICH WAS NOT UNDER CONSIDERATION OF THE ASSESSING OFFICE R IN THE COURSE OF ASSESSMENT UNDER APPEAL AND THE MATERIAL HAS BEEN GATHERED BY THE REVENUE FROM THE ACCOUNT STATEMENT OF THE BANK PRODUCED AT THE TIME OF REMAND HEARING BEFORE THE ASSESSING OFFICER. 7. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN MAKING THE ENHANCEMENT BY TAKING RECOURSE TO A NEW SOURCE, HE SHOULD HAVE FOUND THAT UNDER THE PROVISIONS OF S ECTION 251(1)(B) OF THE ACT, THE COMMISSIONER OF INCOME TAX (APPEALS) CAN ENHANCE AN ASSESSMENT MADE BY THE ASSESSING OFFICER BUT NOT ASSESS A NEW SOURCE OF IN COME AS HELD IN COMMISSIONER OF INCOME TAX VS. SHERAFUDIN 3 99 ITR 524 AND FULL BENCH OF DELHI HIGH COURT IN COMMISSIO NER OF INCOME TAX VS. SARDARI LAL AND CO 251 ITR 864 (DELH I )(FB). IN THE PRESENT CASE, THE COMMISSIONER HAS: FOR THE PURPOSE OF ENHANCEMENT, RELIED NOT ON ANY MATERIAL WHICH WAS B EFORE THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER APPEAL BEFORE HIM NOR ON ANY MATERIAL SEIZED DURING THE SE ARCH ATTRACTING THE PROVISIONS OF SECTION 153C, BUT ON T HE BASIS OF AN ENTRY IN THE BANK STATEMENT PRODUCED BEFORE THE ASSESSING OFFICER FOR THE PURPOSE OF VERIFICATION AND IN RESP ECT OF WHICH SOME OBSERVATION WAS MADE BY THE ASSESSING OFFICER PASSING THE ASSESSMENT IN THE COURSE OF SUBMITTING HIS REMA ND REPORT TO THE COMMISSIONER AND HENCE, THE ACTION OF THE 4 ITA NOS.696 & 697/CHNY/2018 COMMISSIONER OF INCOME TAX (APPEALS) ENHANCING THE ASSESSMENT U/S.251(1)(B) OF THE ACT IS WITHOUT JURI SDICTION AND NOT SUSTAINABLE EITHER IN LAW OR ON FACTS. 8. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ENHANCING THE ASSESSMENT TO THE EXTENT OF RS.15,000 /- AND RS.47,053/- WITHOUT ANY MATERIAL WHATSOEVER AND ON THE BASIS OF ASSUMPTIONS AND PRESUMPTIONS AND THAT TOO, IN A PROCEEDING U/S. 153C OF THE ACT. FOR THESE REASONS AND FOR ANY OTHER REASON THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE HONBLE TRIBUNAL NAY BE PLEASED TO SET ASIDE THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-19 DATED 12-12 -2017 AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDI TIONS MADE AND RENDER JUSTICE. 3. AT THE OUTSET, LEARNED AR FOR THE ASSESSEE SU BMITTED THAT THE APPEALS FILED BY THE ASSESSEE IS TIME BARRED BY 14 DAYS FOR WHICH NECESSARY PETITION FOR CONDONATION OF DELAY ALON G WITH AFFIDAVIT EXPLAINING THE REASONS FOR THE DELAY HAS BEEN FIL ED. THE AR FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT FILE APPEALS WITHIN THE TIME ALLOWED UNDER THE ACT, DUE TO THE FACT THAT A PPEAL PAPERS RECEIVED FROM TAX CONSULTANT WERE MIXED UP WITH OTHER PAPERS WHICH CAUSED DELAY OF 14 DAYS. THE DELAY IN FILING APPEALS IS NEITHER INTENTIONAL NOR WILLFUL BUT FOR THE UNAVO IDABLE REASONS, THEREFORE, DELAY MAY BE CONDONED IN THE INTEREST OF ADVANCEMENT OF SUBSTANTIAL JUSTICE. 4. THE LEARNED DR, ON THE OTHER HAND, STRONGLY OPPO SING CONDONATION OF DELAY PETITION FILED BY THE ASSESSE E SUBMITTED THAT 5 ITA NOS.696 & 697/CHNY/2018 THE REASONS GIVEN BY THE ASSESSEE DO NOT COME WIT HIN THE AMBIT OF REASONABLE AND BONAFIDE REASONS, WHICH CAN BE CONS IDERED FOR CONDONATION OF DELAY AND HENCE, APPEAL FILED BY T HE ASSESSEE MAY BE DISMISSED AS NOT MAINTAINABLE. 5. HAVING HEARD BOTH SIDES AND CONSIDERED THE PETIT ION FILED BY THE ASSESSEE FOR CONDONATION OF DELAY, WE ARE OF THE CO NSIDERED VIEW THAT REASONS GIVEN BY THE ASSESSEE FOR NOT FILING THE APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT COMES UNDER REASON ABLE CAUSE AS PROVIDED UNDER THE ACT FOR CONDONATION OF DELAY A ND HENCE, DELAY IN FILING OF APPEALS IS CONDONED AND APPEALS FIL ED BY THE ASSESSEE ARE ADMITTED FOR ADJUDICATION. 6. BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NO.69 6/CHNY/2018 FOR THE ASSESSMENT YEAR 2007-08 ARE THAT THE ASSESSEE BELONGS TO CHALLANI GROUP OF COMPANIES WAS SUBJECTED TO SEARCH AND SEIZURE OPERATION U/S.132 OF THE ACT,1961 ON 19.04.2012. CO NSEQUENT TO SEARCH, NOTICE U/S.153C DATED 07.11.2014 WAS ISSUED TO ASSESSEE TO FURNISH RETURN OF INCOME. IN RESPONSE TO NOTICE, THE ASSESSEE VIDE LETTER DATED 09.03.2015 INFORMED ASSESSING OFFICER THAT ORIGINAL RETURN FILED FOR THE ASSESSMENT YEAR ON 30.10.2007 DECLARING NIL 6 ITA NOS.696 & 697/CHNY/2018 INCOME MAY BE TREATED AS RETURN FILED FOR IN RESPO NSE TO NOTICE ISSUED U/S.153C OF THE ACT. THE CASE WAS TAKEN UP F OR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S.153C READ WITH SE CTION 144 OF THE ACT ON 30.03.2015 DETERMINING TOTAL INCOME OF R S.8,90,00,000/-, AFTER MAKING ADDITION TOWARDS UNEXPLAINED CREDITS FOUND IN BANK ACCOUNT ON PEAK CREDIT BASIS. THE RELEVANT FINDING S OF THE ASSESSING OFFICER ARE AS UNDER:- 5. FROM THE AUDITED ACCOUNTS. IT IS SEEN THAT THE RE IS NO PROFIT AND LOSS ACCOUNT INDICATING THAT NO ACTIVITIES HAV E BEEN UNDERTAKEN BY THE COMPANY DURING THE YEAR. THE SHA RE CAPITAL IS ` .1,00,00,000/- AND THERE ARE NO LOAN FUNDS ETC. H OWEVER FROM PART OF THE STATEMENT OF BANK ACCOUNT FILED ALONG WITH AUDIT REPORT IT IS SEEN THAT THERE ARE MANY CREDITS AND DEBIT IN THE BANK ACCOUNT, WHICH INDICATES THAT BUSINESS ACTIVI TIES HAVE BEEN UNDERTAKEN BY THE ASSESSEE COMPANY. PEAK CREDI T IN THE BANK ACCOUNT DURING PERIOD IS ` 8,90,00,000/-. IN THE ABSENCE OF ANY EXPLANATION THE PEAK CREDIT IS TAKEN TO BE ITS INCOME FROM UNDISCLOSED SOURCES AND IS ADDED TO THE TOTA L INCOME, MORE SO BECAUSE THE TRANSACTIONS IN THE BANK ACCO UNT INDICATE MUCH MORE FUNDS AVAILABLE THAN THE FUNDS AVAILAB LE ACCORDING TO BALANCE SHEET. PENALTY PROCEEDINGS U/S.271(1)(C ) OF I.T.ACT,1961 FOR NON-COMPLIANCE TO NOTICE U/S.142 (1) OF THE ACT ARE ALSO INITIATED. 7. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE LEARNED CIT(A). BEFORE T HE LEARNED CIT(A), ASSESSEE HAS CHALLENGED ADDITIONS MADE BY T HE ASSESSING OFFICER TOWARDS CREDITS FOUND IN BANK ACCOUNT AS U NEXPLAINED CASH CREDIT ON PEAK CREDIT BASIS. THE ASSESSEE HAS ALSO FILED PETITION FOR 7 ITA NOS.696 & 697/CHNY/2018 ADMISSION OF ADDITIONAL GROUNDS ALONG WITH CERTAIN DOCUMENTS INCLUDING FINANCIAL STATEMENT FOR THE RELEVANT ASSE SSMENT YEAR. THE ADDITIONAL GROUNDS FILED BY THE ASSESSEE HAVE BEEN FORWARDED TO THE ASSESSING OFFICER FOR REMAND REPORT. THE ASS ESSING OFFICER VIDE REMAND REPORT COMMENTED ON ADDITIONAL EVIDENC ES FILED BY THE ASSESSEE AND HAS ACCEPTED THE SOURCE FOR CREDITS FO UND IN BANK ACCOUNT TO THE EXTENT OF ` 8,90,00,000/-. HOWEVER, THE ASSESSING OFFICER HAS FURTHER NOTED THAT THERE ARE THREE CR EDITS OF ` 5,000/- EACH ON 28.08.2006, 28.09.2006 AND 09.10.2006 RESPE CTIVELY IN THE ABOVE SAID BANK ACCOUNT FOR WHICH NO SATISFACTORY EXPLANATION INCLUDING SOURCE HAS BEEN FILED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO NOTICED THAT ASSESSEE HAS RECEIVED INT EREST ON FIXED DEPOSITS OF ` 47,053/- WHICH WAS NOT OFFERED TO TAX IN THE RETU RN OF INCOME FILED FOR RELEVANT YEAR. 8. THE LEARNED CIT(A), AFTER TAKING INTO CONSIDERAT ION ADDITIONAL EVIDENCE FILED BY THE ASSESSE, REMAND REPORT OF AS SESSING OFFICER AND REJOINDER FILED BY THE ASSESSEE TO REMAND REPOR T ISSUED BY THE ASSESSING OFFICER OBSERVED THAT ASSESSING OFFICER HAS ACCEPTED THE EXPLANATION OFFERED BY THE ASSESSEE TOWARDS SOU RCE FOR CREDIT FOUND IN BANK ACCOUNT OF ` 8,90,00,000/- AND HENCE , ADDITIONS MADE TOWARDS UNEXPLAINED CASH CREDIT CANNOT SURVIV E, ACCORDINGLY, 8 ITA NOS.696 & 697/CHNY/2018 DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICE R . AS REGARDS, THREE CREDITS FOUND ON 28.08.2006, 28.09.2006 AND 0 9.10.2006, THE LEARNED CIT(A) OBSERVED THAT ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN SOURCE FOR DEPOSIT OF ` 15,000/- BEFORE THE ASSESSING OFFICER AND HENCE, ENHANCED THE ASSESSMENT AND MADE ADDITI ON OF ` 15,000/- AS UNEXPLAINED CREDITS. SIMILARLY, LEARNED CIT(A) MADE ADDITION OF ` 47,053/- TOWARDS INTEREST ON FIXED DEPOSITS WITH THE BANKS ON THE GROUND THAT NO EXPLANATION HAS BEEN GI VEN BY ASSESSEE ON INTEREST INCOME AND HENCE, ENHANCED THE INCOME AND MADE ADDITIONS. AGGRIEVED BY THE LEARNED CIT( A)S ORDER, ASSESSEE IS APPEAL BEFORE US. 9. THE LEARNED AR FOR ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) HAS ERRED IN ENHANCING ASSESSMENT TO THE EXTENT OF ` 15,000/- AND ` 47,053/- WITHOUT ANY REFERENCE TO THE INCRIMINATIN G MATERIALS FOUND AS A RESULT OF SEARCH IN THE ASSESSMENTS FRA MED U/S.153A / 153C OF THE ACT. THE LEARNED AR FURTHER SUBMITTED T HAT THE LEARNED CIT(A) FAILED TO APPRECIATE THAT ENHANCEMENTS MADE BY HIM TO ` 15,000/- AND ` 47,053/- IS NOT ON THE BASIS OF ANY MATERIAL SEIZE D DURING THE COURSE OF SEARCH AND WITHOUT ANY SATISFA CTION RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER TH E PARTY SUBJECTED TO 9 ITA NOS.696 & 697/CHNY/2018 SEARCH AND CONSEQUENTLY, ASSUMPTION OF JURISDICTI ON U/S.153C FOR ENHANCING THE ASSESSMENT IS MISCONCEIVED, WITHOUT A NY AUTHORITY OF LAW AND BEYOND THE POWERS OF LEARNED CIT(A) . IN TH IS REGARD, HE HAS RELIED UPON THE DECISION OF HONBLE KERALA HIGH COU RT IN THE CASE OF CIT VS. PROMY KURIAKOSE REPORTED IN 386 ITR 597AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. M/S. RENU CONSTRUCTIONS PVT.LTD. REPORTED IN 399 ITR 262. TH E ASSESSEE HAS ALSO RELIED UPON JUDGEMENT OF HONBLE SUPREME COUR T IN THE CASE OF CIT VS. SINGAD TECHNICAL EDUCATION SOCIETY REPOR TED IN 397 ITR 344. 10. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUP PORTING THE ORDER OF LEARNED CIT(A) SUBMITTED THAT ASSESSEE H AS TAKEN LEGAL GROUND CHALLENGING ADDITIONS MADE TOWARDS CASH D EPOSITS AND INTEREST INCOME WITHOUT ANY REFERENCE TO SEIZED MATERIALS FOUND AT THE TIME OF SEARCH IN THE ASSESSMENTS FOR THE FIRST TIME BEFORE THE TRIBUNAL AND FURTHER ADDITIONS MADE BY THE ASSESSIN G OFFICER TOWARDS CASH DEPOSITS WAS ON THE BASIS OF SAME BAN K ACCOUNT WHICH WAS SUBJECT MATTER OF CONSIDERATION BEFORE LE ARNED CIT(A) . SINCE THE ASSESSEE HAS NOT TAKEN ANY GROUND CHALLEN GING ADDITIONS BEFORE THE LEARNED CIT(A) ON THE BASIS OF SAME BA NK ACCOUNT, THEN 10 ITA NOS.696 & 697/CHNY/2018 IT CANNOT TAKE A NEW GROUND CHALLENGING ENHANCEME NT MADE BY THE LEARNED CIT(A) ON THE BASIS OF SAME BANK ACCOUNT. 11. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH SIDES , PERUSED MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW ALONG WITH CASE LAWS CITED BY C OUNSEL FOR THE ASSESSEE. AS REGARDS LEGAL GROUND TAKEN BY ASSESSEE CHALLENGING ENHANCEMENT OF ASSESSMENT TOWARDS CASH CREDIT OF ` 15,000/- AND INTEREST INCOME OF ` 47,093/- WITHOUT ANY REFERENCE TO THE INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH UNDER SECTION 153A/153C(1) OF THE ACT, WE ARE OF THE CON SIDERED VIEW THAT ASSESSEE HAS NOT TAKEN ANY SPECIFIC GROUND CHALLEN GING ISSUE BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A), WHEN THE ASSESSING OFFICER HAS MADE ADDITIONS TOWARDS CASH CREDIT OF ` 8,90,00,000/- WHICH WAS ON THE BASIS OF SAME BANK A CCOUNT WHERE THE ASSESSING OFFICER HAS FOUND CREDIT OF ` 15,000/- AND INTEREST INCOME OF ` 47,053/- AND HENCE, AT THIS STAGE, ASSESSEE CANN OT TAKE GROUND CHALLENGING VALIDITY OF ADDITIONS MADE IN ABSENCE OF SEIZED MATERIAL IN THE ASSESSMENT FRAMED U/S.153A/1 53C(1) OF THE ACT. NO DOUBT, IT IS WELL SETTLED PRINCIPLE OF LAW BY THE DECISION OF VARIOUS HIGH COURTS AND HONBLE SUPREME COURT THAT IN ABSENCE OF 11 ITA NOS.696 & 697/CHNY/2018 ANY INCRIMINATING MATERIAL, NO ADDITION CAN BE MADE IN THE ASSESSMENT FRAMED U/S.153C /153A, IF SUCH ASSESSME NTS ARE UNABATED AS ON THE DATE OF SEARCH. BUT, FACT REMAIN S THAT IN THE PRESENT CASE FACTS WITH REGARD TO ABATEMENT AND U NABATEMENT OF ASSESSMENTS WAS NOT FORTHCOMING FROM THE RECORDS A S WELL AS ADDITIONS MADE TOWARDS ENHANCEMENT OF ASSESSMENT AND CASH CREDIT AND INTEREST INCOME WAS ON THE BASIS OF BA NK ACCOUNT WHICH WAS THE BASIS FOR MAKING ADDITIONS FOR ` 8,90,00,000/- ON PEAK CREDIT AND HENCE, ARGUMENTS OF THE ASSESSEE THAT E NHANCEMENT MADE BY THE LEARNED CIT(A) IS NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IS UNFOU NDED. THEREFORE, WE REJECT THE GROUND TAKEN BY THE ASSESSEE. 12. AS REGARDS THREE CREDITS FOUND ON 28.08.2006 , 28.09.2006 AND 09.10.2006 AMOUNTING TO ` 15,000/-, WE FIND THAT ADDITION TO CASH DEPOSITS WAS ON THE BASIS OF SAME BANK ACCOU NT, WHERE THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS HA S RECORDED CATEGORICAL FINDING THAT ALTHOUGH ASSESSEE CLAIMED THAT SOURCE FOR CASH DEPOSITS IS OUT OF CASH RECEIVED FROM M/S.SAR AVANA GLOBAL HOLDINGS LTD., BUT ACCOUNT STATEMENT OF ASSESSEE D OES NOT VOUCH THE SAME, WHEREAS THE ASSESSEE CLAIMS THAT SOURCE FOR THREE CASH 12 ITA NOS.696 & 697/CHNY/2018 DEPOSITS WAS FROM M/S. SARAVANA GLOBAL HOLDINGS LT D., FOR WHICH ACCOUNT STATEMENT OF THE PARTY HAS BEEN FURNISHED BEFORE THE ASSESSING OFFICER . FACTS ARE NOT CLEAR INSOFAR AS SOURCE OF INCOME FOR CASH DEPOSITS. THEREFORE, WE ARE OF THE CONSIDE RED VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFI CER IN LIGHT OF ACCOUNT STATEMENT FURNISHED BY THE ASSESSEE TO EXPL AIN SOURCE FOR THREE CASH CREDITS FOUND ON THREE DATES . INSOFAR A S INTEREST ON FIXED DEPOSITS OF ` 47,053/-, ASSESSING OFFICER DURING THE REMAND PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS RECEIVED INTEREST INCOME ON FIXED DEPOSITS AND CREDITED IN THE SAME BANK ACCOUNT . HOWEVER, ON PERUSAL OF RETURN OF INCOME FILED FOR THE YEAR, THE SAME WAS NOT OFFERED FOR TAXATION. THEREFORE, WE AR E OF THE CONSIDERED VIEW THAT THIS ISSUE ALSO NEEDS VERIFI CATION BY THE ASSESSING OFFICER IN LIGHT OF RETURN OF INCOME FIL ED BY THE ASSESSEE FOR RELEVANT ASSESSMENT YEAR. IN CASE, INTEREST E ARNED ON FIXED DEPOSITS WAS NOT OFFERED TO TAX, THEN ENHANCEMENT MADE BY THE LEARNED CIT(A) TOWARDS INTEREST INCOME SURVIVES. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 13 ITA NOS.696 & 697/CHNY/2018 ITA NO.697/CHNY/2018 (A.Y.2013-14): 14. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL AR E IDENTICAL TO THE FACTS AND ISSUES CONSIDERED BY US IN ITA NO.696/ CHNY/2018 FOR THE ASSESSMENT YEAR 2007-08. THE REASONS GIVEN B Y US IN PRECEDING PARAGRAPH SHALL MUTATIS MUTANDIS APPLIES TO THIS APPEAL AS WELL EXCEPT TO ADDITIONS MADE TOWARDS DIFFEREN CE SHOWN IN THE ACCOUNTS OF THE ASSESSEE TO M/S. SARAVANA GLOBAL H OLDINGS LTD. THE LEARNED CIT(A) HAS RECORDED CATEGORICAL FINDIN G THAT ASSESSEE HAS FAILED TO EXPLAIN DIFFERENCE OF ` 7,61,447/-. AS REGARDS ENHANCEMENT OF ` 22,000/-, THE LEARNED CIT(A) HAS RECORDED CATEGORICAL FINDING THAT ASSESSEE HAS EXPLAINED DIF FERENCE IN AMOUNT OF ` 2,06,444/- OUT OF ` 2,28,445/- AND HENCE, BALANCE AMOUNT OF ` 22,000/- HAS BEEN REMAINED UNEXPLAINED OR RECONCIL ED. THE ASSESSEE CLAIMS THAT IT HAS SATISFACTORILY EXPLAIN ED DIFFERENCE AMOUNT SHOWN IN THE BOOKS OF ACCOUNT OF THE ASSESS EE AND RECONCILIATION TO THE CREDIT OF M/S.SARAVANA GLOBAL HOLDINGS LTD,, AND DIFFERENCE IN AMOUNT RECEIVED FROM M/S. KGS DE VELOPERS LTD. THE FACTS ARE CONTRADICTORY. THEREFORE, WE ARE OF T HE CONSIDERED VIEW THAT THE ISSUE NEEDS TO BE RE-EXAMINED BY TH E ASSESSING OFFICER IN LIGHT OF CLAIM OF THE ASSESSEE THAT IT HAS FILED RECONCILIATION EXPLAINING THE DIFFERENCE. HENCE, WE SET ASIDE THE 14 ITA NOS.696 & 697/CHNY/2018 APPEAL FILED BY THE ASSESSEE TO THE FILE OF ASSESSI NG OFFICER AND DIRECT HIM TO EXAMINE THE ISSUE AND DECIDE IN ACCOR DANCE WITH LAW. 15. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2020 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) (G.MANJUNATHA ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 31 ST DECEMBER, 2020 DS *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /G