SHRI RAJESH TIWARI, JALANDHAR V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-II, JALANDHAR

ITA 84/ASR/2022

AI Insights

The case involves an appeal by Rajesh Tiwari against the order of the Commissioner of Income Tax (Appeals)-5, Ludhiana, which confirmed the additions made by the Assessing Officer (AO) under sections 69C and 68 of the Income Tax Act, 1961, following a search operation under section 132 at the premises of Sh. Rajan Batra and Sh. Kapil Batra. The AO had made protective additions in the hands of Rajesh Tiwari, an employee of the Batra Group, based on documents and transactions linked to him. The Tribunal, however, found that the additions were not sustainable as no incriminating material was found during the search that directly implicated Tiwari, and the assessments were not based on any ongoing proceedings at the time of the search.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114843 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2022
• Other Referred Cases: Smt. Sanjana Mittal Vs. DCIT ITA No. 487/Asr/2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Principle of natural justice; Deemed to accrue or arise in india; Documents seized
• Section: 131; 68; 132; 69C; 250; 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 Rajesh Tiwari 119, B Punjab Avenue, Ladhewali Jalandhar. [PAN:-AAFPT4090C] (Appellant) Vs. DCIT, Central Circle-II, Jalandhar. (Respondent) Appellant by None Respondent by Sh. Amit Jain, CIT.DR. Date of Hearing 23.08.2023 Date of Pronouncement 28.08.2023 ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana, (in brevity ‘the CIT (A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2012-13. The impugned order was emanated from the order of the ld. DCIT Central Circle-II Jalandhar, (in brevity the ld. AO) order passed u/s 153C/143(3) of the Act. I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 2 2. The assessee has taken the following grounds: “1. That the order passed by the Hon’ble CIT (A) dated 31.03.2022 is against the law and facts of the case. 2. That having regard to the facts and circumstances of the case, Hon’ble CIT (A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned assessment order u/s 143(3)/153C of the Act and without complying with the mandatory conditions u/s 153C/153D/153 as envisaged under the Income Tax Act, 1961. 3. That in any case and without prejudice to the above grounds, additions made in the impugned order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material has been found as a result of search warranting impugned addition. 4. That having regard to the facts and circumstances of the case, Hon’ble CIT (A) has erred in law and on facts in confirming the action of Ld. Assessing Officer in making an addition of Rs. 8,18,063/- u/s 69C of the Act, without considering the facts of the case and without observing the principles of natural justice. I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 3 5. That having regard to the facts and circumstances of the case, Hon’ble CIT (A) has erred in law and on facts in confirming the action of Ld. Assessing Officer in making an addition of Rs. 77,26,797/- u/s 68 of the Act, without considering the facts of the case and without observing the principles of natural justice. 6. That having regard to the facts and circumstances of the case, Hon’ble CIT (A) has erred in law and on facts in confirming the action of Ld. Assessing Officer in framing the impugned assessment order u/s 68 of the Act without complying with the mandatory conditions u/s 68 as envisaged under the Income Tax Act, 1961.” 3. Brief fact of the case is that the search operation was conducted u/s 132 (1) at the premises of Sh. Rajan Batra and Sh. Kapil Batra at Jalandhar. The assessee Sh. Rajesh Tiwari is an employee of the Batra Group on basis of incriminating documents the ld. AO had proceed to issue notice u/s 153C of the Act. The assessment was completed with addition Rs.8,17,462/- related to unexplained expenditure incurred in share transaction, Rs.77,26,797/- was added in the hands of the assessee in protective basis u/s 68 of the Act and undisclosed interest amount of Rs.601/- was added back with the total income of the assessee. Aggrieved assessee challenged the jurisdiction of assessment u/s I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 4 153C/143(3) framed by the ld. AO and the merit before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Aggrieved assessee filed an appeal before us. 4. When the appeal was called for hearing, none was present on behalf of the assessee. On perusal of the record, we find that the assessee filed an adjournment petition and mentioned that the counsel of the assessee is not well. But no such evidence was produced. The reason was not convincing before the bench. Accordingly, the adjournment petition was rejected. We proceed to dispose the matter on ex parte qua for assessee after hearing the ld. DR. 5. The ld. DR vehemently argued and relied on the order of the revenue authorities. 6. We heard the rival submission and considered the documents available in the record. The assessee first challenged the jurisdiction of the ld. AO for assessment proceeding u/s 153C/143(3) of the Act. First, we consider on the order of the ld. CIT(A) in page 2 which is reproduced as below: “3. During the course of appellate proceedings, the AR of the appellant submitted arguments as under: I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 5 “Sub: WRITTEN SUBMISSION IN THE CASE OF SH. RAJESH TIWARI, X19-B, PUNJAB AVENUE, LADHEWALI, JALANDHAR for the Assessment Year 2012-13 In addition to the grounds of appeal it is submitted that this is the case of assessee individual. A search u/s 132 of the Act was carried upon at the business premises of the Sh. Kapil Batra on 05.12.2012. Thereafter Notice u/s 153C of the Act was issued, in response to which assessee furnished return of income on 13.10.2015 declaring net income amounting to Rs. 1,74,960/-. During the course of assessment proceeding assessee furnished information and documents called for time to time. The Ld. Assessing Officer ignoring the submission of assessee framed assessment at an income of Rs. 87,19,820/- on protective basis. Aggrieved by the order assessee preferred appeal before your honour. SUBMISSION OF ASSESSEE: Sir, it is submitted that addition in the hands of assessee is made on protective basis on the basis of bank account which was operated by the employer of assessee Sh. Rajan Batra in which the cash deposits were made by them. Thus assessee was not the beneficiary of the credits in the bank accounts. Sir, during the course of assessment proceedings assessee appeared before the Ld. AO and duly stated that assessee is not the beneficiary of the credits in bank accounts and he had not carried any transactions on MCX. I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 6 During the course of assessment proceedings assessee filed Affidavit stating that he is only an employee of Sh. Kapil Batra and all the transactions are carried by him only. The Affidavit is reproduced by the Ld. AO on page 4 of the Assessment order and on page 11 of the Assessment Order reply is also produced of assessee wherein he states that Sh. Kapil Batra is the beneficiary of the transactions in bank accounts. Sir, it is stated that your attention is drawn to page 7 last para of the Assessment Order wherein Ld. AO is also accepting this fact that assessee is only an employee acting on the instruction of his employer Sh. Kapil Batra and Sh. Rajan Batra and also accepts Idle fact that Sh. Rajan Batra is the actual beneficiary. Sir, your attention is drawn to page 5 point d of the Assessment order where Ld. AO states that he directed Inspector to visit the field and submit the report regarding ascertaining he social status of the assessee and he confirmed that assessee is not a person that means and he has no worth that he could make such huge cash deposits in his bank accounts. Sir, your attention is drawn to page 5 point c of the Assessment order where Ld. AO states and accepts the fact that Rajesh Tiwari (assessee) was only a signatory and the key person of the Batra Group are the actual beneficiaries. Thus when Ld. AO is himself accepting the fact that assessee is only a puppet and is not the beneficiary of the transactions, thus no I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 7 addition on account of unexplained expenditure and cash deposits should be confirmed in the hands of assessee. Sir, it is stated that this is the case of search, where no incriminating material was found & seized relating to assessee and addition is not made on the basis of any incriminating material. In support of this reliance is being placed upon the following decisions: Smt. Sanjana Mittal Vs. DCIT ITA No. 487/Asr/2018, wherein the jurisdictional bench of Hon’ble ITAT, Amritsar held that “ no incriminating material has been found, no assessment proceedings were pending on the date of search proceedings, therefore, it was held by the bench that in a case, where no incriminating material is found during course of search proceedings and the assessment proceedings remain un-abated as on the said date, no addition cane be made validly in the hands of assessee....” 6.1. In argument the ld. DR relied on the appeal order page 6 para 4.2 which is reproduced as below: “4.2 Ground of Appeal No. 2 relates to addition of FIs. 8,17,462/- on orotective basis on account of trading on Multi Commodity Exchange of India Ltd. The AO mentioned that the assessee is an employee of Batra Group where search u/s 132 was carried out and in view of certain documents seized in the search belonging to him the assessee's case was covered u/s 153C of the Income Tax Act, 1961. It is mentioned that initially Sh. Rajesh Tiwari did not cooperate and a final show-cause notice was issued and he I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 8 appeared on 07.10.2015 and submitted that he was just a salaried employed in Batra Group and further submitted that all transactions as highlighted in various documents, bank account, client ID on MCX were undertaken by the key persons of the Batra Group namely Sh. Rajan Batra and Sh. Kapil Batra. The AO has mentioned that the assessee submitted an affidavit which is reproduced in the assessment order wherein, Sh. Rajesh Tiwari stated that he signed blank documents, cheques and other papers for entering into sale purchase of shares on behalf of clients of the company M/s. Bear Bull Global Commodities, that all the transactions in his name, in bank account and in the books of M/s. Bear Bull Global Commodities belonged to his employer and he did not have any right or interest in these transactions and did not earn any income or suffer loss from these transactions. The AO mentions that in view of the affidavit, summons u/s 131 were issue to Sh. Rajesh Tiwari and his statement was recorded where, he reiterated the fact mentioned in the affidavit. As per the AO, the submissions of the assessee have force in view of the facts mentioned in the assessment order that he was main employee present at the main office premises of Batra Group and his statement was recorded u/s 132. A number of undated cheques of various firms having registered office at the residence of Sh. Rajesh Tiwari in favor of M/s. Bear Bull Global Commodities duly signed by him were found & seized from the business of M/s. Bear Bull Global Commodities Prop. Sh. Rajan Batra which as per the AO, shows that though the residence of Sh. Rajesh Tiwari was shown as the office of these concerns, their actual'Activities were carried out I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 9 from the main business premises of Batra Group. The AO mentioned that the cash was being deposited in the bank accounts of these firms being run in the name of Sh. Rajesh Tiwari to introduce the same in the books of M/s. Bear Bull Global Commodities through cheques. The AO further mentioned that moreover, the pattern of transactions as carried out in the name of Sh. Rajesh Tiwari on MCX and through cash deposit in various bank accounts is actually the mode of transactions carried out by the Batra group and Sh. Rajesh Tiwari had submitted that he was only a paper signatory person in the firms like M/s. Friend Commodities, New Commodities. The AO further mentioned about the standard of living as ascertained through the Inspector who was directed to make field enquiries regarding Sh. Rajesh Tiwari and from the report, it emerged that the financial and social standing of Sh. Rajesh Tiwari is not commensurate with the transactions being seen in his bank account and MCX account. The AO concluded that therefore it is highly likely that Sh. Rajesh Tiwari was only a signatory and key person of Batra Group are the actual beneficiaries. These facts and submissions of Sh. Rajesh Tiwari were confronted to Sh. Rajan Batra vide questionnaire dated 14.09.2015 and 19.09.2015 and the reply of Sh. Rajan Batra is reproduced in the assessment order wherein, he submitted that the submissions regarding Sh. Rajesh Tiwari are totally incorrect and baseless. Sh. Rajan Batra also stated that the said concerns are duly registered at the address of Sh. Rajesh Tiwari as mentioned in the AO;s letter dated 19.10.2015. Regarding the cheque book, it was stated that Sh. I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 10 Rajesh Tiwari was working as an employee and might have kept these documents in the office of Batra Group. Sh. Rajan Batra also submitted that the said accounts/firms are not related to him and the cash deposits in the said accounts also do not belong to him. The reply of Sh. Rajan Batra was considered but the AO concluded that the case has to be seen in the light of total gamut of facts & circumstances and referred to judgments of various authorities that it was duty of the AO to unveil the truth behind the smoke screen and tax the assessee accordingly. The AO referred to various case laws as mentioned in the assessment order and concluded that the facts & circumstances of the case indicate that Sh. Rajesh Tiwari was just a puppet used by his employer to conceal the transactions carried out by them through him. The AO mentioned that Sh. Rajesh Tiwari was only an employee acting on the instructions of Sh. Rajan Batra and Sh. Kapil Batra and the transactions have been made out of bank account in his name and his ID on MCX through member Sh. Rajan Batra ID 8285. Therefore, the addition on the basis of unexplained transactions were made substantially in the case of Sh. Rajan Batra who was held to be actual beneficiary of the transaction, however in order to protect the interest of the revenue, the addition on protective basis has been made in the hands of Sh. Rajesh Tiwari the assessee, on the basis of transactions in the bank account and MCX account. The AO has tabulated the transactions on the basis of information called u/s 133(6) from MCX regarding transactions carried out by Sh. Rajesh Tiwari as a client with Client ID Code BJ01 and it was seen that Sh. Rajesh Tiwari had made a loss of Rs. 4,46,286/- as per net I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 11 position Mark to Market, however the same were not reflected in the return of Sh. Rajesh Tiwari and he has not shown the source of meeting the said loss and therefore, the assessee was confronted vide questionnaire dated 23.09.2015 as reproduced in the assessment order. As per the AO, Sh. Rajesh Tiwari just replied that he has no knowledge of any transactions or any income loss on these transactions and the investment made therein have been made by Sh. Rajan Batra. As per the AO, Sh. Rajan Batra was confronted with the reply of the assessee Sh. Rajesh Tiwari vide notice dated 14.10.2015 as reproduced in the assessment order. The reply of Sh. Rajan Batra was considered but not found acceptable and the AO mentioned that Sh. Rajan Batra had done all the transactions in the name of the assessee Sh. Rajesh Tiwari but did not show the said transaction in his (Sh. Rajan Batra) return. The AO mentioned that the amount had been paid by Sh. Rajan Batra from unaccounted sources and therefore, deserves to be treated as unexplained expenditure u/s 69C of the Income Tax Act, 1961. The AO calculated the amount of total unexplained expenditure at Rs. 8,17,462/- and the same was added to the income of the assessee u/s 69C on protective basis (and substantive addition was made in the case of Sh. Rajan Batra). The facts of the case, basis of addition made by the AO and the arguments of the AR during the course of appellate proceedings have been considered. The AR has submitted that the addition in the hands of the assessee was made on protective basis on the basis of bank account which was operated by his employer Sh. Rajan Batra and thus, the assessee was not the beneficiaries of the credits I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 12 in the bank accounts. It is also mentioned by the AR that: the assessee appeared before the AO and duly stated that he is not the beneficiary of credits in the bank account and had not carried any transactions on MCX. It is further submitted that the assessee filed an affidavit during the assessment proceedings stating that all transactions are carried out by his employer who is the beneficiary of all these transactions. As per the AR, the AO has accepted this fact that the assessee was acting on the instruction of his employer who are the actual beneficiary. The AR also mentioned about the field enquiry by the Inspector and contended that the AO himself accepted the fact that the assessee is only a puppet and thus, no addition on account of unexplained expenditure and cash deposits should be confirmed in the hands of the assessee. The AR relied upon various case laws mentioning that no incriminating material was found & seized relating to the assessee. The arguments of the AR have been considered and it is relevant to mention here that the AO has proceeded against the assessee u/s 153C mentioning that during the search of Batra Group certain incriminating material belonging to the assessee were found & seized and notice u/s 153 was issued. A perusal of the assessment order shows that the AO made addition on protective basis in the hands of the assessee and substantive addition was made in the case of Sh. Rajan Batra. The AO mentioned that during the course of search, certain documents belonging to and cheques signed by Sh. Rajesh Tiwari were found at business premises of Batra Group at G. K. Tower, BSF Colony, Jalandhar and therefore the case of Sh. Rajesh Tiwari was I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 13 reopened u/s 153C of the Income Tax Act, 1961. The AO also mentioned that it is relevant to note that Sh. Rajesh Tiwari was the main employee present at the main business premises at G. K. Tower, BSF Colony, Jalandhar on the date of search and in his statement was recorded u/s 132 of the Act on the date of search, he submitted that he was working as Compliance Officer with M/s. Bear Bull Global Commodities. It is further mentioned in the assessment order that Sh. Rajesh Tiwari also stated that he was a partner/proprietor in certain other concerns namely M/s. Friends Commodities, New Commodities and M/s. Rajesh Tiwari HUF and it was seen that these firms have their registered office at the residential premises of Sh. Rajesh Tiwari i.e. 119B, Punjab Avenue, Ladhewali, Jalandhar. It is also mentioned that a number of undated cheques of these concerns were found & seized from the business premises of M/s. Bear Bull Global Commodities. Sh. Rajesh Tiwari stated that Sh. Rajan Batra was the actual beneficiary of all these concerns and he was just an employee who used to sign on the instruction of the employer. These facts & submissions were confronted to Sh. Rajan Batra and the reply of Sh. Rajan Batra is reproduced in the assessment order as under: “Please refer to your letter No. 1516 dated 14.10.2015 and 1554 dated 19.10.2015 in connection with certain submissions regarding Sh. Rajesh Tiwari which are totally incorrect and baseless. Your letter dated 19.10.2015 confirms that the said concerns were duly registered in the address of the said Sh. Rajesh Tiwari i.e. 119B, Punjab Avenue, Jalandhar. As regards, the cheque book found at our premises, it is stated that the said person was working with us I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 14 as our employee and he might have kept his documents in our office. We would like to clarify that the said accounts/firms are not related to me and the cash deposits in the said accounts do not belong to me.” It is also mentioned by the AO that all the family members and concerns of the Batra group have been trading on MCX through independent client IDs through the member IDs of Sh. Rajan Batra. Similar trading has been done in the name of Sh. Rajesh Tiwari also and as per the AO, therefore it is highly likely that Sh. Rajesh Tiwari was only a signatory whereas key persons of the Batra Group are the actual beneficiaries. It is further mentioned by the AO that the transactions had been made out of bank account in the name of Sh. Rajesh Tiwari and client ID was maintained in his name on the MCX through member Sh. Rajan Batra ID 8285 and on that basis, addition has been made in the hands of Sh. Rajesh Tiwari on protective basis and addition on substantive basis in the hands of Sh. Rajan Batra. Here it is relevant to mention that if the transactions in the names of other persons having separate distinct/independent client IDs were assessed in their respective hands then the income in respect of client ID Code BJ01 in the name of Sh. Rajesh Tiwari should have been assessed in his hands and not in the hands of Sh. Rajan Batra. Moreover, as mentioned by the AO in the assessment order, the two bank accounts with HDFC Bank with Account Nos. 12630330000018 & 12632560000631 were in the name of Sh. Rajesh Tiwari only and thus the onus is on Sh. Rajesh Tiwari to explain these transactions. It is also relevant to mention that as noted by the AO, different I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 15 members and concerns of Batra Group were trading on MCX through independent Client IDs through the Member ID of Sh. Rajan Batra and the AO has assessed the income in their respective hands and these were not assessed in the hands of Sh. Rajan Batra, then giving a different treatment to the transactions in respect of client ID code BJ01 of Sh. Rajesh Tiwari is not found logical. There is no other independent evidence and the AO has based his conclusion on the testimony (statement/affidavit) of Sh. Rajesh Tiwari during the assessment proceedings, however it has no evidentiary value against Sh. Rajan Batra, because the assessee Sh. Rajesh Tiwari is the interested party in this case and has a motive in making such statement, as otherwise the tax liability will be on the assessee. Sh. Rajesh Tiwari may have given the testimony/ statement/ affidavit with a view to avoid tax burden on himself. As per facts on record arid referred above, the bank accounts were in the name of Sh. Rajesh Tiwari and the different concerns have the address of residence of Sh. Rajesh Tiwari as their registered office. Sh. Rajesh Tiwari was working as a Compliance Officer with M/s. Bear Bull Global Commodities and this will explain the presence of cheque book of Sh. Rajesh Tiwari/these concerns at the premises where he was working as Compliance Officer viz. business premises of M/s. Bear Bull Global Commodities at G. K. Tower, BSF Colony, Jalandhar. There are certain minimum qualification required for the post of Compliance Officer who should be at least a Graduate because he I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 16 has to perform many functions like Monitors all operational processes and procedures using a compliance management system to ensure that the company complies with all legal regulations and ethical standards, Manages information flow by researching, recording and analysing data and information, with a regular flow of information and conducting compliance risk assessments, they ensure that the business runs smoothly, Trains and educates staff so that they are informed of any legal changes and updates to compliance guidelines, Acts as contact person and liaison between department heads and senior management and Conducts regular assessments to determine whether policies are compliant with the law. Thus, Sh. Rajesh Tiwari cannot be said to bp unaware about the accounts, banking and the legal provisions. Sh. Rajesh Tiwari cannot play ignorance about the significance of opening the firms in his name as a partner/proprietor in the concerns, opening the bank account and the significance of signing the cheques etc. It is apparent that the assessee was just trying to shift his tax burden on Batra Group, his employer. The assessee was filing his independent return, but never disclosed income/loss from the firms in which he was a partner/proprietor and also opened & operated bank accounts which were never disclosed in his returns. The financial status and standard of living cannot be a conclusive proof of income because this will depend upon savings out of income but if a person spends all his earnings or incurred loss then the net savings may not be commensurate with the volume of transactions. Under the Income Tax Act, 1961 the tax is to be I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 17 levied on the income/deemed income and not on the savings or the wealth accumulated by a person. For this Wealth Tax was applicable. Therefore, to conclude, merely a testimony of the assessee who is an interested party cannot be the sole basis, without other supporting document, to fasten such a heavy tax liability on Sh. Rajan Batra. The person giving testimony has a clear motive of shifting his own tax liability on Sh. Rajan Batra. Hence the transactions or income relating to the three concerns namely M/s. Friends Commodities, M/s. New Commodities and Rajesh Tiwari HUF in which the assessee is a partner (but Sh. Rajan Batra is not connected with them in any manner) and the bank accounts opened in the name of Sh. Rajesh Tiwari cannot be imposed on any other person and legally Sh. Rajesh Tiwari was a partner and the bank account and cheque book etc. were also in his name and hence the assessee was required to explain these transactions. Similarly, the transactions on the MCX with his client ID BJ01 are also required to be assessed in the hands of Sh. Rajesh Tiwari. Mere statement of the assessee without giving any documentary evidence to substantiate the same coupled with the fact that Sh. Rajan Batra has also denounced the claim of Sh. Rajesh Tiwari in his reply to the AO as reproduced above, no addition can be made in the hands of Sh. Rajan Batra just by relying on the submissions of the assessee specially when the assessee was himself a interested party. Therefore, to conclude, the addition in respect of transactions carried out by Sh. Rajesh Tiwari as a client with Client ID code BJ 01 on MCX are required to be assessed in the hands of Sh. Rajesh I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 18 Tiwari only (as was done in the cases of different members of Batra Group who were also trading on MCX through independent Client IDs through the Member ID of Sh. Rajan Batra and the AO has assessed the income in their respective hands and these were not assessed in the hands of Sh. Rajan Batra). Therefore, the addition of Rs. 8,17,462/- made by the AO in the hands of the appellant on protective basis is found sustainable and hence confirmed (the addition made in the hands of Sh. Rajan Batra on this issue has been deleted). Accordingly, this ground of appeal is dismissed.” 6.2 Further, we find that in appeal the revenue was unable to find out the exact incriminating document on which the ld. AO relied to proceed the notice u/s 153C. The section 153C has two limbs, one is satisfaction note of the ld. AO and another is incriminating documents. Out of the two limbs, one limb, the incriminating documents is absence in the searched place related to the assessee. We relied on the order of the ITAT, Amritsar Bench in case of Smt. Sanjana Mittal vs. DCIT ITA No.487/Asr/2018, date of order 11/03/2019wherein. “10. We have deliberated at length on the issue under consideration and are of the considered view that in a case where no assessment proceedings are pending on the date of the search and seizure proceedings, the assessment under section 153A can be carried out only on the basis of seized material. In a case, where no incriminating material is unearthed during the course of search proceedings and the assessment proceedings remain unabated as on the said date, no additions can be validly made in the hands of the assessee. Our aforesaid view I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 19 is fortified by the judgment of the Hon’ble High Court of Delhi in the case of CIT vs. Kabul Chawla (2016) 380 ITR 573 (Del) Apart therefrom, a similar view had also been taken by the Hon’ble High Court of Bombay in the case of CIT vs. Murli Agro Product (ITA No. 36/2009) (Bom) and Commissioner Of Income-tax Vs. Continental Warehousing Corporation (2015) 374 ITR 645 (Bom). In the aforementioned cases, it has been observed by the High Court that as on the date of the initiation of search and seizure proceedings under section 132 of the IT Act, as no proceedings for the year under consideration were pending, therefore, in the absence of any incriminating evidence found during the course of search and seizure proceedings no addition/disallowance could have been made in respect of the unabated assessment of the assessee for the said year. In the backdrop of the aforesaid settled position of the law, we are of the considered view that as on the date of the search and seizure proceedings no assessment proceedings were pending in the case of the assessee, therefore, in the absence of any incriminating material having been found in the course of such proceedings no addition could have been validly made in the hands of the assessee. We thus not being able to persuade ourselves to subscribe to the view taken by the CIT(A) who had upheld the order of the A.O, thus set aside his order and vacate the addition of Rs.1,00,000/- that was sustained by him.” 6.3 In our considered view, the assessment u/s 153C is bad in law. We quashed the impugned appeal order. So, the addition amount of Rs.8,17,462/- and Rs.77,26,779/- and the interest amount of Rs.601/- are quashed. 7. In the result, the ground nos. 1,2 and 3 are allowed. I.T.A. No. 84/Asr/2022 Assessment Year: 2012-13 20 8. Ground Nos. 4, 5 and 6 are need not adjudicated only remained for academic purpose. 9. Ground No. 7 is general in nature. 10. In the result, the appeal of the assessee bearing ITA No. 84/Asr/2022 is allowed. Order pronounced in the open court on 28.08.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order