DCIT, Jaipur V. SUMS EXIM PVT. LTD., Jaipur

ITA 860/JPR/2016

AI Insights

The case involves a series of appeals by the revenue against M/s. Sums Exim Pvt. Ltd. and M/s. S.M. Developers concerning the assessment years 2006-07 to 2012-13. The appeals were primarily based on the grounds that the proceedings initiated under section 153C were null and void and that substantial additions were made on account of undisclosed sales. The Tribunal examined the validity of the proceedings under section 153C and the merits of the additions made. It was found that the documents and materials used for the assessments were incriminating and pertained to the firms, leading to the initiation of proceedings under section 153C. However, the Tribunal dismissed the protective additions, noting that the income had already been disclosed by Shri Sanjay Jain, who was associated with the firms but had left before the relevant assessment years.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132469 (ITAT-JAIPUR)
• Duration Of Justice: 6 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 13-03-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 27-09-2016
• Other Referred Cases: ACIT Vs Satyapal Wassan, Surendra M. Khandhar Vs ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Principle of natural justice; Retrospective amendment; Corroborative evidences; Documents seized; Set aside
• Section: 131; 143(3); 153A; 150(1); 143(2); 64; 13; 153; 145(3); 153C

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR JhlaanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 428/JP/2017 TO 430/JP/2017 fu/kZkj.ko"kZ@AssessmentYear : 2006-07 TO 2008-09 The DCIT Central Circle-3 Jaipur cuke Vs. M/s. Sums Exim Pvt. Ltd. A-1, Ist Floor, Yamuna Path, Suraj Nagar (West), Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAICS 9072 R vihykFkhZ@Appellant izR;FkhZ@Respondent vk;djvihy la-@ITA No. 860/JP/2016 TO 863/JP/2016 fu/kZkj.ko"kZ@AssessmentYear : 2009-10 TO 2012-13 The DCIT Central Circle-3 Jaipur cuke Vs. M/s. Sums Exim Pvt. Ltd. A-1, Ist Floor, Yamuna Path, Suraj Nagar (West), Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAICS 9072 R vihykFkhZ@Appellant izR;FkhZ@Respondent vk;djvihy la-@ITA No. 431/JP/2017 TO 433/JP/2017 fu/kZkj.ko"kZ@AssessmentYear : 2006-07 TO 2008-09 The DCIT Central Circle-3 Jaipur cuke Vs. M/s. S.M. Developers A-1, Ist Floor, Yamuna Path, Suraj Nagar (West), Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABEFS0165 R vihykFkhZ@Appellant izR;FkhZ@Respondent 2 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. vk;djvihy la-@ITA No. 864/JP/2016 TO 867/JP/2016 fu/kZkj.ko"kZ@AssessmentYear : 2009-10 TO 2012-13 The DCIT Central Circle-3 Jaipur cuke Vs. M/s. S.M. Developers A-1, Ist Floor, Yamuna Path, Suraj Nagar (West), Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABEFS 0165 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri B.P. Mundra, CA Shri Atharv Mundra, Adv. jktLo dh vksj ls@Revenue by: Shri Sanjay Dhariwal, CIT Smt. Runi Pal, Addl. CIT lquokbZ dh rkjh[k@Date of Hearing : 14/03/2023 Date of Pronouncement: 24/04/2023 vkns'k@ORDER PER: PER BENCH The Revenue has filed all these fourteen appeals in respect of above assessee’snamely M/s. SUMS Exim Pvt. Ltd. Jaipur and M/s. S.M. Developers, Jaipur against different orders of the ld. CIT(A)-4, Jaipur dated 30-03-2017 and 26-07-2016 for the assessment years 2006-07 to 2008-09 and 2009-10 to 2012-13respectively whose details are mentioned as under:- 3 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Name of the assessee ITA Nos. CIT(A) Date of order A.Y. M/s.SUMS Exim Pvt. Ltd. 428/JP/2017 to 430/JP/2017 CIT(A)-4, Jaipur 30-03-2017 2006-07 to 2008-09 M/s.SUMS Exim Pvt. Ltd. 860/JP/2016 to 863/JP/2016 CIT(A)-4, Jaipur 26-07-2016 2009-10 to 2012-13 M/s. S.M. Developers 431/JP/2017 to 433/JP/2017 CIT(A)-4, Jaipur 30-03-2017 2006-07 to 2008-09 Ms/s. S.M. Developers 864/JP/2016 to 867/JP/2016 CIT(A)-4, Jaipur 26-07-2016 2009-10 to 2012-13 2. The grounds of appeals raised by the Revenue in the above mentioned appeals are as under:- M/s.SUMS Exim Pvt. Ltd ITA NO. 428/JP/2017- A.Y. 2006-07 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings-initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs.1,4913,171/- made by AO on account of undisclosed sales.’’ M/s.SUMS Exim Pvt. Ltd ITA NO. 429/JP/2017- A.Y. 2007-08 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director for the A.Y. under consideration.’’ 4 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs.5,24,17,096/- made by AO on account of undisclosed sales.’’ M/s.SUMS Exim Pvt. Ltd ITA NO. 430/JP/2017- A.Y. 2008-09 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings-initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs.4,57,10,029/- made by AO on account of undisclosed sales.’’ M/s.SUMS Exim Pvt. Ltd ITA NO. 860/JP/2016 - A.Y. 2009-10 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.4,23,99,946/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis ofextrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/s.SUMS Exim Pvt. Ltd ITA NO. 861/JP/2016 - A.Y. 2010-11 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.1,88,61,272/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/s.SUMS Exim Pvt. Ltd ITA NO. 862/JP/2016 - A.Y. 2011-12 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.2,59,00,183/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 5 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/s.SUMS Exim Pvt. Ltd ITA NO. 863/JP/2016 - A.Y. 2012-13 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.1,80,50,149/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/S. S.M. DEVELOPERS ITA NO. 431/JP/2017 - A.Y. 2006-07 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director of the partner company M/s. SUMS Exim Pvt. Ltd for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs.1,30,03,657/- made by AO on account of undisclosed investment/ expenditure.’’ M/S. S.M. DEVELOPERS ITA NO. 432/JP/2017- A.Y. 2007-08 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director of the partner company M/s. SUMS Exim Pvt. Ltd for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs.4,07,44,017/- made by AO on account of undisclosed investment/ expenditure.’’ M/S. S.M. DEVELOPERS ITA NO. 433/JP/2017- A.Y. 2008-09 6 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director of the partner company M/s. SUMS Exim Pvt. Ltd for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs.3,45,40,546/- and of Rs.11,75,84,639/-/- made by AO on account of undisclosed sales and undisclosed investment/ expenditure.’’ M/S. S.M. DEVELOPERS ITA NO. 864/JP/2016 - A.Y. 2009-10 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.5,61,44,663/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis ofextrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/S. S.M. DEVELOPERS ITA NO. 865/JP/2016 - A.Y. 2010-11 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.5,61,44,663/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year. M/S. S.M. DEVELOPERS ITA NO. 866/JP/2016 - A.Y. 2011-12 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.3,11,96,149/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions 7 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. cannot be made in all the six years on the basis of material related to a particular year. M/S. S.M. DEVELOPERS ITA NO. 867/JP/2016 - A.Y. 2012-13 ‘’1. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in deleting the addition of Rs.6,14,44,984/- made by the AO on account of undisclosed sales holding that additions in subsequent years were made on the basis of extrapolation of on money received in earlier years. 2. Whether on the facts and in the circumstances of the case the ld. CIT(A) was right in holding that in proceedings u/s 153A/153C of the Act, additions cannot be made in all the six years on the basis of material related to a particular year.’’ 3. Since in all these appeals of the revenue the only issue involved is of on money transactions undertaken by Shri Sanjay Jain for the two firms i.e. M/s. Sums Exim Pvt. Ltd and M/s. S.M. Developers Pvt. Ltd. based on the paper found in the search. Thus, the issues involved for all the years are almost identical and are almost common, except the difference in figure of additions disputed in each assessment year and are related to those seized document. Therefore, all these appeals were heard together with the agreement of both the parties and are being disposed off by this consolidated order. 4. At the outset, the ld. DR submitted that the matter pertaining to Sums Exim Private Limited in ITA no. 430/JP/2017- A.Y. 2008-09may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwovenand the facts and 8 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. circumstances of other cases are exactly identical except the difference in the amount in other assessment year. The ld. AR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of ITA No. 430/JP/2017is taken as a lead case of each party’s contentions for the discussion. 4.1 Based on the above arguments we have also seen that for all these appeals facts are similar and arguments were similar and therefore, were heard together and are disposed by taking lead case facts, grounds and arguments from the folder inITA No.430/JP/2017. 5. Both parties have disputed the orders of lower authorities and heavily relied upon to support their claims of their respective orders as appearing from the order of the AO and ld. CIT(A) respectively to the extent the finding support their contentions.So, before moving towards the facts of the case we would like to mention that the revenue has assailed the appeal in ITA No.430/JP/2017on the following grounds; M/s.SUMS Exim Pvt. Ltd ITA NO. 430/JP/2017- A.Y. 2008-09 ‘’1. Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) erred in holding the proceedings-initiated u/s 153C of Income Tax Act, 1961 as Null and void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile Director for the A.Y. under consideration.’’ 2. Whether on the facts and in the circumstances of the case, the ld. CIT(A) was right in deleting the addition of Rs.4,57,10,029/- made by AO on account of undisclosed sales.’’ 9 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 6. As it is seen that the revenue has taken two grounds one is related to challenging the finding on issue of notice u/s. 153C of the Act and another the addition on merits of the case. 7. But before dealing with each grounds of appeal of the revenue we note the fact as culled out from the assessment order here in below: In this case original return declaring income at Rs.(-) 8,71,988/- was filed on 30-09-2008.A search was conducted on 28-04-2011 in the case of Supreme Group, Jaipur to which the assessee belongs. Various assets/ books of accounts and documents were found and seized as per annexure prepared during the course of search. Thereafter, jurisdiction over this case was assigned to ACIT, Central Circle-2, Jaipur vide notification u/s 127 of the Income Tax Act, 1961 by the CIT, Jaipur-1, Jaipur circulated vide order No.CIT-I/ACIT/Hqrs)/JPR/2013-14/1581 dated 29-07-2013.Accordingly, notice u/s 153A r.w.s. 153C of the I.T. Act, 1961 was issued on 03-02-2014 for the assessment year 2008-09 which was duly served upon the assessee on 06-02-2014. In compliance of this notice return declaring total income at Nil was filed on 28-02-2014 for the A.Y. 2008-09.The main business of assessee is development and selling of Land, trading of various items and commission agent.M/S SUMS Exim Pvt. Ltd., having its registered office at A-1, Yamuna Path, Suraj Nagar (West), Civil Lines, Jaipur was incorporated in 2005 by four persons Sh. Sanjay Jain, Uttam Khatwani (alias Tharyamal), Mantosh Dass and Sunil Mehta (hence-SUMS). All four persons were directors in this company holding 25% equity stake. The main objects and business interests of this company were- (a) Import / domestic sale of silk yarn and Fake Currency Detection machines; (b) Export of land ready-made garments. (c) Purchase of land on the Jaipur Delhi Highway at Vill: ChakCharanvas Tehsil Jamwa Ramgarh District-Jaipur and development of a plotted residential colony under the tile ‘’Nature Farms.’’ Besides the trading of articles, the company took up the real estate project “Nature Farms’’ which lies off National Highway No. 8 (Delhi-Jaipur). The seized documents reveal that the land was sold in the shape of plots ranging from 700 sq. yards to 2500 sq. yard for which money was taken by the company in form of cheques as well as in cash. The seized documents contain computed generated sheets clearly indicating the cheque rate, cash rete, cheque received, cash 10 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. received and cheque amount outstanding and cash amount outstanding against each of the plot allottees.The seized documents also contain printed pages which indicates the total receipts and expenses including the cash element, in the sale of plots. Another concern M/s. SM Developers is a partnership concern with two partners – M/s. MamonIspat Private Ltd. (represented by Shri Shashank Goyal) and M/s. UMS Exim Pvt. Ltd. This firm also entered into purchase of land at Village ChakChaaranwas and its contiguous villages and developed a residential area under the scheme ‘Nature Farms Hill Retreat’. The modus operandi in this company was identical to that of M/s. SUMS Exim/Nature Farm, and even the data regarding sale of plots in Nature Farms Hill Retreat was found on the same set of documents. In the year 2008, some differences among directors were born and Shri Sanjay Jain stopped working as director of the assessee company and left the group. The other three directors continued working in the assessee company. Thereafter, some FIRS were filed against Shri Sanjay Jain by the assessessee company and its other directors. Then settlement (out of court) took place and profits including cash were redistributed among these directors. Some papers were claimed to have been prepared before settlement took place. After the settlement, on 28-04-2011, search was conducted on Shri Sanjay Jain and his associates and group concerns. Therefore, papers relating to M/s. SUMS Exim Pvt Ltd. and M/s. S.M. Developers were found during the course of search and the same being incriminating in nature were seized also. On the basis of such seized papers Shri Sanjay Jain admitted voluntarily to have earned sales consideration (in cash) of land plots of M/s. SUMS Exim Pvt Ltd. and M/s. S.M. Developers. Since, cash sales were not recorded in the books of said concerns, he disclosed unaccounted income of Rs.4 crore as his share. As the search was conducted on 28.04.2011 in the case of Supreme 6. Group, Jaipur (key person Sh. Sanjay Jain) at various residential/business premises. During the course of search various books of account/loose papers/documents related to the assessee (M/S SUMS Exim Pvt. Ltd.) were found and seized as per annexure prepared during the course of search at residential/business premises covered in the search. Accordingly, in the case of the assessee proceedings u/s 153C r.w.s. 153A of the IT Act, 1961 has been initiated after recording reasons. During the course of assessment proceedings, vide questionnaire dated 03.03.2014 the assessee was asked to furnish complete details of each page of the following exhibits of the Annexure related to it found and seized during the search: - (i) Pages 115 to 131, Exhibit-1 of Annexure-A dated 29.04.2011 seized from theFactory-cum-office of M/s Supreme Polymers Pvt. Ltd., 137-138, Jhotwara Industrial Area, Jaipur 11 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. (ii) Pages 21 to 88, Exhibit-2 of Annexure-AS dated 28.04.2011 seized from the Residence of Sh. Lal Singh Sisodia, 5, Nemi Sagar Colony, Queen's Road, Jaipur (iii) Pages 1 to 66, Exhibit-1 of Annexure-AS dated 28.04.2011 seized from the Factory-cum-office of M/s Shreya's India Pvt. Ltd., 57, Jhotwara Industrial Area, Jaipur (iv) Pages 1 to 75, Exhibit-2 of Annexure-AS dated 28.04.2011 seized from the Factory-cum-office of M/s Shreya's India Pvt. Ltd., 57, Jhotwara Industrial Area, Jaipur Further, the assessee was also required to explain the nature of entries and transactions mentioned on these papers and to get these entries verified from its regular books of account.In reply, vide letter dated 13.03.2014 the assessee submitted its reply on each page of above exhibits at point No. 14 to 17. In this reply, in point No. 1 to 12 the assessee submitted that it has nothing to do with these documents and these are not related to it. The AO considered the reply of the assessee and not found fully satisfactory. There are some entries appeared on these seized papers which belong to the assessee, this fact has also been admitted by the assessee in its reply. Though there is difference in size of plots or name appeared against the plot number which was due to change in the size of plot or change in the plot numbers. On perusal of the seized paper, the AO observed that soe ledger accounts were prepared under the ‘’SUMS PL or ‘’1. SUMS PL’ in which cheque amounts as well as cash amounts related to sale of plots in ‘’Nature Farms’’ scheme were mentioned. Most of the names of purchasers are appearing in the assessee’s books. During the post search proceedings statement of Shri Sanjay Jain one of the Ex-Directors of the assessee company was recorded on 16-05-2011 and 19-05-2011. In his statements Shri Sanjay Jain admittedthat pages 115 to 131, Exhibit-1 of Annexure-A dated 29-04-2011 seized from the Factory-cum-office of M/s.Supreme Polymers Pvt. Ltd. , 137-138, Jhotwara Industrial Area, Jaipur, pages 1 to 75, Exhibit-2 of Annexure-AS dated 28-04-2011 seized from the Factory-cum-office of M/s. Shreya’s India Pvt. Ltd., 57, Jhotwara Industrial Area, Jaipur, pages 1 to 66, Exhibit-1 of Annexure-AS datted 28-04-2011 seized from the Factory-cum-office of M/s. Shreya’s India Pvt. Ltd., 57, Jhotwara Industrial Area, Jaipur, Jaipur and pages 21 to 88, Exhibit-2 of Annexure-AS dated 28-04-2011 seized from the residence of Sh. Lal Singh Sisodia, 5, Nemi Sagar Colony, Queen’s Road, Jaipur are related to him, M/s. SUMS Exim Pvt Ltd. and M/s. S.M. Developers Pvt. Ltd. In his statements Shri Sanjay Jain described the nature of transactions mentioned on these papers and admitted that unaccounted cash entries mentioned on these papers/documents are related to M/s. SUMS Exim 12 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Pvt Ltd. and M/s. S.M. Developers are not related in the books of these concerns. In the the post search proceedings, statements of Sh. Bhaskar Sharma, erstwhile accountant of the assessee, were also recorded on oath u/s 131 of the I.T. Act, 1961 on 28-06-2011 and 01-08-0211. In this statements, Sh. Bhaskar Sharma admitted that he used to maintain the books of account of the assessee on computer from April 2005 to to July 2008. He further admitted that all entries mentioned on page 1 to 75 of Exhibit -2 ofAnnexure –AS are cash and cheque amounts received by M/s. SUMS Exim Pvt Ltd. and M/s. S.M. Developers. He also narrated te nature of entries mentioned on all the seized documents/ papers specifically giving the details of actual rate of sale of plots in the’’Nature Farms’’ Scheme and ‘Nature Farm Hill Retreat’ Scheme.Accordingly, a show cause letter dated 20-03-2014 was issued to the assessee.The A/R of the asessee vide letter dated 26-03-2014 submitted the reply of the said show cause notice. Based on the submission and a detailed discussion, the AO observed that the authenticity of the documents/papers seized from various premises in Supreme Group of cases related to M/S SUMS Exim Pvt. Ltd. and SM Developers can not be denied. It is also to point out that Shri Sanjay Jain admitted the undisclosed income of Rs. 4 Cr. In his statement recorded during the course of search from sale of plots in these concerns. Thus, it proves that in the sale of plots in both the concerns unaccounted money was taken, but the question remains that who was the beneficiary of this unaccounted income on sales of plots. Since the documents have been seized from the premises of the concerns of Shri Sanjay Jain and Shri Sunil Mehta in his statement recorded during the post search enquiry u/s 131 of the IT Act, 1961, denied of having any relation with these documents & in absence of any concrete evidences it is held that both the concerns M/S SUMS Exim Pvt. Ltd and M/s SM Developers have earned (unaccounted money over and above the amount shown in this books of account) but this income was earned by Shri Sanjay Jain under the name of these concerns. Hence, it is held that addition of undisclosed income of 4,57,10,029/- determined in-next para will be added on substantive basis in the hands of Shri Shri Sanjay Jain/Supreme Polymers Pvt. Ltd./Shreyas India Pvt. Ltd. whose case is pending before Hon'ble Settlement Commission, but to protect the interest of revenue same addition on protective basis, is made in the hands of the assessee. The assessment yearwise undisclosed sales of the assessee are as under:- A.Y.s 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 Undisclosed sales 1,49,13,171 5,24,17,096 4,57,10,946 4,23,99,946 1,88,61,272 2,59,00,183 1,80,50,149 The sales determined in the above para represents the undisclosed income of the assessee for the various assessment years as it is assumed that all the expenditure for purchase and development of land and sale were already 13 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. booked by the assessee in its books of accounts. Moreover, in the seize documents, no such documents were seized which suggests any undisclosed investment made by the assessee in the development of plots. As per the above chart, the undisclosed income of the assessee for the year under consideration comes to Rs. 4,57,10,029/- which is protectively assessed in his hands. This would result in an addition of Rs.4,57,10,029/- 8. Apropos to Ground no. 1 of the revenue, the facts as emerges from the order of the ld. CIT(A) are as under: ‘’4.1.1. I have duly considered assessee's submission and also carefully gone through the assessment order. I have also taken a note of factual matrix of the case as well as case laws relied upon with regard to proceedings u/s 153C of the Act in absence of incriminating documents found as a result of search carried out. Assessee contends that on the basis of some documents seized from the possession of 3rd party, addition cannot be made. Legally, Section 132(4) of the Act empowers the Authorized Officer to record the statement of any person on oath in course of search and seizure proceedings from whose possession the incriminating materials found and seized. It is specifically provided that such statement may be used in evidence in any proceedings under this Act. Therefore, such statement has an evidentiary value in law. Generally, it is presumed that whatever is stated at the time of recording of preliminary statement u/s 132(4) of the Act is true and correct. Thus, whenever assessee pleaded that the statement has been obtained forcefully/under coercion/undue influence/without material/contrary to the material then it should be supported by strong evidence. Therefore, in view of these, now I put following questions for the adjudication of case as under: (i) Whether presumption u/s 292C r.w.s 132(4A) is available to the assessee or not? Whether the seized documents supra are dumb documents? Whether can it be termed as 3rd party document or not as claimed by the assessee? (ii) What is the relevance of seized documents found from the premises of concerns of Sh Sanjay Jain in this case? Whether assessee's contention with regard to "seized document supra by asssessee" is acceptable or not? What are the other corroborative evidences gathered during the search operation? Whether transactions recorded there in are relatable to other documentary evidences of not? whether has AO brought 14 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. about all these in the Asst. Order or not ? Whether the documentary evidences and oral evidences gathered during the Remand Proceedings will have any bearing on this case or not? (iii) Relevance of sworn statements of Sh Sanjay Jain &Sh Sunil Mehta during search operation and remand proceedings are so crucial for the analysts of evidences and adjudication of this case? What are the other corroborative evidences gathered to substantiate AO's contention? The observations with regard to questions framed above are, as under: - Question (1) Whether presumption u/s 292C r.w.s 132(4A) is available to the assessee or not ?Whether the seized documents supra are dumb documents ? Whether can it be termed as 3rd party document or not as claimed by the assessee? Findings: The presumptions u/s. 292C r.w.s. 132(4A) of the Act are that the documents belong to the persons i.e., Sh Sanjay Jain and his concerns from whose possession and control they were found. The second presumption is that the contents of such documents are true. The third presumption is that the signature and handwriting shall be taken to be that of the person from whom the documents were found. The documents belong to the appellant. The contents are also true. The dispute is: what are the contents? Is it permissible to draw the inference against the appellant on his failure to explain the contents of the documents after presuming that the contents are correct? Here I would like to quote the decision of Hon'ble ITAT Jabalpur in the case of ACIT Vs Satyapal Wassan (2007) 295 ITR (AT) 352 ITAT Jabalpur wherein elucidating with respect to the same issue, the Hon'ble the Tribunal has held as under: "The crux of these decisions is that a document found during the course of search must be a speaking one and without any second interpretation, must reflect all the details about the transactions of the assessee in the relevant assessment year. Any gap in the various components as mentioned in section 4 of the Income tax Act must be filled up by the Assessing Officer through investigations and correlations with the other material found either during the course of the search or on investigation... From above decision of Hon'ble ITAT Jabalpur Bench it is pertinent to note that a charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and /or in the search. The document should be clear and unambiguous in respect of all four components of charge of tax if it is not so, the document is only a 15 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. dumb document and no charge of tax can be levied on the assessee on the basis of a dumb document. Here in this case, document in question is a speaking one a dumb document. The legal presumption does not permit the inference that documents found from assessee's premise, is none other than the appellant. The search action at the residence of the plant has yielded materials which justify such inference. It is an in my opinion, even after presumption applied to the facts under Section 292C, there are adequate material to conclude that the transactions in the seized dements are the transactions of the appellant which remained undisclosed. The appellant, under the principles of natural justice, has the right to rebut the presumption. Under that right also, assessee and Sh Sunil Mehta are entitled to state that the transactions belonging to assessee are not recorded. In the opinion of AO, the information about the undisclosed income of the appellant is based on adequate relevant material. This is very important since the presumption under section 292C permitted only in respect of the documents in possession or control of the assessee. Onus is on the assessee to prove that what was stated in the seized document was true. Such an interpretation would render the deeming provisions of section 292C otiose and presumption as to the correctness of seized documents is under section 292C of the Act unless the contrary is proved and as such, the assessee was legally required to substantiate the seized documents with supporting evidence. Where the Statute provides a deeming provision, what is prescribed is to be deemed without seeking corroborative evidence. AO has observed that these are speaking documents and not dumb documents. A dumb document is a document which does not speak for itself and not a self explanatory and detailed document like present one. Since in assessee own case AY 2009-10, 2010-11 & 2011-12 it has been decided that the document in question is NOT a "DUMB DOCUMENT "BUT A "SPEAKING DOCUMENT" on the basis of noting and jottings made therein which are easily verifiable anal corroborated with other documentary evidences gathered during the course of search operation conducted against the assessee. However, AO has not conducted any enquiry to establish that the impugned seized documents actually belonged to assessee. AO has simply relied upon the statement recorded on oath of Sh Sanjay Jain &Sh Bhasker Sharma u/s 131 of the Act during assessment proceeding, In view of that the A.O has righty rejected assessee's objection. Now, it is to be seen whether the facts and circumstances in it given case may by itself would be sufficient to rebut the presumption w/s 292C of the Act? AO contents that as per the sworn statement recorded on oath of Sh Sanjay Jain, notings/ transactions mentioned therein the sized document pertains to therefore, presumption w/s 292C r.w.s. 132(4A) of the Act would arise against the assessee. AO in the order passed has correctly explained the presumption under section 132(4A) of the Act to the assessment proceedings. This aspect is all the more significant in view of 16 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. the provisions contained in section 292C, which was inserted by the Finance Act 2007 and has been given retrospective effect from October 1, 1975 and provides for legal presumption. The Hon'ble Bombay High Court in the use of Surendra M. Khandhar Vs ACIT 321 ITR 254 held as under: "The language of section 132(4A) of the Income-tax Act, 1961, is similar the language used in section 292C. The previsions raise a presumption that the contents of a document found during search proceedings are rue. The presumption can be rebutted." In view of these facts, AO has been asked to carry out necessary enquiry u/s 250(4) of the Act from Tehsildar to established ownership of the plots as mentioned in the Khata/ Khesra No. in the seized document. On receipt of documentary evidences gathered and examination /cross-examination of Sh Sanjay Jain by Sh Sunil Mehta, it is seen that the impugned document actually belonged to Sh Sanjay Jain & his entities Question (ii) What is the relevance of seized documents found from the premises of concerns of Sh Sanjay Jain in this case? Whether assessee's contention with regard to "seized document supra by asssessee" is acceptable or not? What are the other corroborative evidences gathered during the search operation? Whether transactions recorded there in are relatable to other documentary evidences of not? whether has AO brought about all these in the Asst. Order or not? Whether the documentary evidences and oral evidences gathered during the Remand Proceedings will have any bearing on this case or not? Question (iii) Relevance of sworn statements of Sh Sanjay Jain &Sh Sunil Mehta during search operation and remand proceedings are so crucial for the analysis of evidences and adjudication of this case? What are the other corroborative evidences gathered to substantiate AO's contention? Findings: The corroborative evidences gathered during the remand proceeding have been discussed in details in para no. 2.16.4 & 2.16.6 During the assessment proceeding. AO has not accorded opportunity to Sh Sunil Mehta to cross-examine Sh Sanjay Jain. AO has simply relied upon the sworn statement of Sh Bhasker Sharma &Sh Sanjay Jain, In fact AO has also not property examined the impugned seized documents and also not carried out necessary investigation to establish veracity of entries recorded therein and the ownership of seized documents. During appellate proceeding and the remand proceeding documentary and oral evidences have been gathered which clearly suggest that the impugned documents don't pertain to the assessee rather they belong to Sh Sanjay Jain & his associates /entities. These facts were not placed before the Hon'ble ITSC, New Delhi at the time of passing order, accordingly, they 17 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. have not been considered which makes the order passed u/s 245D(4) of the Act as void because it has been obtained by fraud and misrepresentation of facts on the part of Sh Sanjay Jain & his entities. In view of these facts, AO is hereby directed under section 150(1) of the Act to re-open the case of Sh Sanjay Jain, M/s Shrey's India Pvt Ltd. M/s Supreme Polymers Pvt Ltd & M/s SiddarthPolysacks Pvt Ltd for AY 2006-07, 2007-08 & 2008-09. In view of facts & circumstances of the case as discussed above, and also on the basis of documentary and oral evidences gathered during the remand proceeding conducted u/s 250(4) of the Act. It has been established that the impugned documents don't pertain to the assessee rather they belong to Sh Sanjay Jain & his entities, Accordingly, proceeding initiated u/s 153C of the Act becomes null & void. Assessee's appeal stands allowed on this ground.’’ 9. During hearing, ld. DR submitted that the ld. CIT(A) has wrongly annulled the proceedings-initiated u/s 153C made in the case of the assessee.To support the contentions raised before us the ld. DR has filed two papers book. The index showing the papers filed and relied upon are as under: Paper Book dated 30-06-2022 with Index S.N. Description of case Page No. 1. Copy of page No.115 to 131, exhibit 1 of annexure A dated 29-04-2011 seized from the factory cum office of M/s. Supreme Polymers Pvt. Ltd. 137-138, JhotwaraIndustrialArea, Jaipur 2-19 2. Copy of page no. 21 to 28, exhibit-2 of annexure AS dated 28-04-2011 seized from rsidence of Shri Lal Singh Sisodoa, 5, Nemi Sagar Colony,Queen’s Road, Japur 20-28 3. Copy of Page No. 1 to 66, exhibit-1 of annexure AS dated 28-04-2011 seized from the factory cum office of M/s. Shreya’s India Pvt. Ltd.l57, Jhotwara Industrial Area, Jaipur 89-155 4. Copy of page no. 1 to 75, exhibit 2 of annexure AS dated 28-04-2011 seized from factory cum office of M/s. Shreya’s India Pvt. Ltd.l57, Jhotwara Industrial Area, Jaipur 156-231 5. Statement of Shri Sanjay Jain recorded u/s 132(4) on 29-04- 232-237 18 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 2011 6. Statement of Shri Sanjay Jain recorded u/s 131 on 16-05-2011 238-244 7. Statement of Shri Sanjay Jain recorded u/s 131 on 19-05-2011 245-254 8. Statement of Shri Bhaskar Sharma recorded u/s 132(4) on 28-04-2011 255-260 9. Statement of Shri Bhaskar recorded u/s 131 on 28-06-2011 261-270 10. Statement of Shri Sunil Mehta recorded u/s 131 on 21-06-2011 271-300 11. Statement of Shri Bhaskar Sharma recorded u/s 131 on 01-08-2011 301-315 Paper Book –II dated 22-08-2022 with Index S.N. Description of case Page No. 1. Order of Hon’ble Rajasthan High Court on writ petition filed by Shri SanjayJain 1 2. Copy of SB Civil Writ Petition No.26828/2018 filed by Shri Sanjay Jain before Hon’ble Rajasthan HighCourt 2-15 9.1 Dealing with the facts of the case based on the documents so submitted he stated that both the assessee’s represented by a Group of 04 persons and they are running the firm M/s. S.M. Developers and M/s. Sum Exims (P) Ltd. As the Group divided amongst themselves because of disputes arose between them related to the business of these firms and Mr. Sanjay Jain who was handling the finance of these two entities. The other group raised the FIR against Mr. Sanjay Jain on account of claim of embezzlement of money and he has ultimately resigned in 2008. It is also undisputed that both these assessee’s premises were not searched but based on the loose papers and incriminating material found from the 19 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. company where Mr. Sanjay Jain involved, notices were issued to the assessee u/s 153C of the Act. The ld. DR relying on the disclosure statement relating to the business of these firms wherein the disclosure was made for an amount of Rs.4.00 Crores and the revenue contended that balance amount is required to be taxed in the case of these assessee. As the documents found were having the nature of incriminating material found during search, addition made were made and the same were made as per provision of section 153C of the Act. Before the Assessing Officer, the assessee pleaded that they have not received the on money and the dispute is going on between themselves. Even the complaint was made against Shri Sanjay Jain to this aspect. The assessee also challenged the authority of making the assessment u/s. 153C of the Act as these seized documents saying that the size of plot and numbers are not matching and even the plot sold were agricultural whereas based on the information on these seized materials, it seems related to be of non-agriculture plots and thereby distinguishing the seized material. The revenue made the protective addition considering the peculiar facts on hands. The ld. DR also vehemently argued that the view taken by the ld.CIT(A) saying that the documents were not related to these assessee firm is incorrect view and is not correct on his part to interpret the fact that names and amount accepted 20 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. by the assessee so far as it relates to cheque money. Even based on these findings, the reopening was made in the case of Shri Sanjay Jain who has challenged the reopening proceedings in the Hon’ble High Court and the matter is under adjudication. Hence, based on set of documents, the transactions are related to the assessee’s business and the same has correctly been taxed by the AO on protective basis. Since the transactions and documents are clearly pertaining to the case of the assessee and the view taken by the ld. CIT(A) that the proceedings are incorrectly initiated is not correct view since the ld AR did not controvert by filling any documents that the same found is not recorded in the books of the assessee so far it relates to the cheque money then in that case how the ld. CIT(A) hold in favour of the issue on technical ground. The assessee before Settlement Commission submitted that he is not concerned about these concerns and the case of the assessee was reopened and protective addition was made in the hands of the assessee firm. The AO has correctly made addition in the case of M/s. Sum Exims and in the case of M/s. S.M. Developers over a period of seven years on protective basis. Without dealing with the facts of the case, the ld. CIT(A) has quashed the notice u/s 153C of the Act considering the view that the information unearth in search is not pertaining to the assessee firms. As it is evident in these papers, it is clearly 21 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. mentioned that the portion of cash and cheque is correctly written against the name of each party. The ld. DR tried to reconcile the amount recorded on these pages with that of accounts of the assessee firm and based on that facts submitted that the view taken by ld. CIT(A) is incorrect that these documents were not pertain to the assessee. Shri Sanjay Jain has not disclosed correct income at Rs.4.00 crores and, therefore, to tax his income substantive the matter is pending with Hon’ble High Court. Based on that facts as these papers are related to these firms, the addition made on protective basis requires to be sustained as even the Settlement Commission has not dealt with this aspect as the assessee has already resigned. Based on this detailed argument, the ld. DR stated that the ld. CIT(A) has exceeded the jurisdiction in allowing the appeal of the assessee on technical ground and same is bad in law. Based on these facts he supported the order of the ld. AO andaddition so made on protective basis should be confirmed. 10. On the other hand, the ld. AR supported the order of the ld. CIT(A) praying that he has explicitly mentioned in his order that it has been established that the impugned documents don't pertain to the assessee rather they belong to Shri Sanjay Jain & his entities. Accordingly, proceeding initiated u/s 153C of the Act becomes null & void. Accordingly, 22 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. the ld. CIT(A) rightly allowed the appeal of the assessee on this issue. To this effect, the ld. AR filed the following detailed written submission: 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) erred in holding the proceedings initiated u/s 153C of Income Tax Act, 1961 as Null and Void ignoring the incriminating documents and admission made u/s 132(4) of the Income Tax Act, 1961 by the erstwhile director for the A.Y. under consideration. Kindly refer to submissions/arguments made by the Ld. DR on the strength of the paper book submitted by the Ld. DR. The Ld. DR made submissions on various papers / documents seized during the search conducted by the department against Shri Sanjay Jain and his Group from the premises of Shri Sanjay Jain and his Group as well statement of Shri Sanjay Jain, Bhaskar Shram and Shri Sunil Mehta. In defence the AR submits as under:- 1.1. Your Honour, the AR relied the order of the Ld CIT (Appeals). 1.2. As regard to paper book submitted by the Ld. AO the AR submits as under:- Sno Paper Book Point no Ld. AO considered in his order at page no. 1 Ld. AO PB Point no 1-4 Ld. AO order Page no. 1-2 2 Ld. AO PB Point no 5 Ld. AO Order page no. 14 point no. 11(a) 3 Ld. AO PB Point no 6-7 Ld. AO Order page no. 5 point 8.2 para 2 4 Ld. AO PB Point no 8-9-11 Ld. AO Order page no. 6point 8.2 para 3 5 Ld. AO PB Point no 10 Ld. AO Order page no. 11point 10 23 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 1.3. Hence, your honour Ld. AO had already considered the entire paper book submitted by the department during the assessment proceedings. Your honour, the assessee was also required to explain the nature of entries and transactions mentioned on the incriminating materials as appearing in the assessment order page no. 2 point no. 6 last para 8th last line on wards. 24 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 1.4. Kindly refer Ld. AO order page no. 3 point no. 7 wherein the submission of the assessee is appearing that these documents are not related to the assessee. 1.5. Kindly refer Ld. AO order page no. 6 point no. 9 wherein the Ld AO issued show cause notice. The main contents of the show cause notice were as under:- A. The Ld. AO gave details about partners and nature of business and about another concern M/s SM Developers and also regarding dispute, FIR and settlement out of court at page no. 3 to 5 point no. 8.1. The relevant scanned portion is as under- 25 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 26 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. B. The Ld. AO further examined the seized documents under the name “SUMS PL” of “1. SUMS PL” and “NATURE FARMS”. Further the Ld. AO considered the statement of Shri Sanjay Jain that seized documents are related to M/s SUMS EXIM Pvt. Ltd. And M/s SM Developers and that these seized documents are not entered in the books of these concerns. Further statement of Shri Bhaskar Sharma was also examined. Kindly see Ld. AO order page no. 5-6 point no. 8.2. The relevant scanned portion is as under:- 27 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 1.6. After considering all above points the Ld. AO issued show cause notice. As appearing in the Ld. AO Order page no.6-7 point no. 9. The relevant scanned portion is as under:- 28 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 1.7. The assessee submitted the reply of show cause notice on 26.03.2014 appearing in the Ld. AO Order page no. 7-14 point no. 10. The relevant scanned portion is as under:- 29 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 30 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 31 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 32 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 33 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 34 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 35 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 36 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Hence your honour, the Assessee submitted complete details on each seized paper (kindly see Ld. AO Order page no. 3 point no. 7). Further the submission was made that the document were seized from 3rd party against whom the assessee filed FIR. The assessee submitted that “SUMS PL” of “1. SUMS PL” and “NATURE FARMS” are not belonging to the assessee and the document were seized not from the premises of the assessee. The assessee also requested for cross-examination of Shri Sanjay Jain and Shri Bhasker Sharma. It was further requested that the burden was on department to show that the seized document were belonging to the assessee . Sizes of the plots, purchases and sales do not match with the record of the assessee. Seized documents are Computer prints bearing neither any sign nor any marking/initials of the assessee/any authorized employee of the assessee. The assessee requested to exercise Quasi-Judicial Statutory Powers to make inquiry and verification of facts. Further the books of accounts were not rejected u/s 145 of the It Act. Hence, seized Documents do not belong to the assessee. 1.8. The Ld. AO has performed detailed examination / verification of accounts books and also of submissions made. Further the Ld. AO discussed the statement of Shri Sanjay Jain, Shri Bhasker Sharma and Shri Sunil Metha. Kindly see Ld. AO Order page no. 14-21 point no. 11. The relevant scanned portion is as under:- 37 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 38 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 39 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 40 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 41 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 42 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 43 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 44 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 45 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 1.9. Hence your honour the Ld. AO considered the submission made by the assessee that the seized document does not belong to the assessee and also discussed the statement of Shri Sanjay Jain, Shri Bhaskar Sharma and Shri Sunil Metha. Your honour kindly see paper book dated 30.06.2022 submitted by the department paper book page no. 7. Your honour this paper book page no. 7 is the part of Seized Document Annexure-A Exibit-1. This Exibit-1 is having page no. 1-169 and having details of purchases, sales, income and expenses. The Ld. AO also gave these findings on page no. 15 and 16 that page no. 127 which is paper book page no. 7 is showing summary of purchases, sales, income and expenses. Your honour this page no. 127 has not been disputed by the Ld. AO which shows that the net profit of the seized document is Rs. 2,24,87,607/-. Shri Sanjay Jain also surrendered Rs. 4 Crores. 1.10. On the basis of the facts of the case, statement recorded during the search and post search proceedings, submission of the assessee and on the basis of the seized record the Ld. AO stated facts emerged at Ld AO Order page no. 21-24 point no. 11.1. The relevant scanned portion is as under:- 46 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 47 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 48 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Hence Your honour the assessee submitted defence on each seized document as well as statement of Shri Sanjay Jain, Shri Bhaskar Sharma and Shri Sunil Metha and successfully with evidences that the seized documents does not belong to the assessee. The Ld. AO considered reply of the assessee and also verified/examined each seized page, evidences, statements of Shri Sanjay Jain, Shri Bhaskar Sharma and Shri Sunil Metha and held that On the basis of the facts of the case, statement recorded during the search and post search proceedings, submission of the assessee and on the basis of the seized record held that in view of the above discussion, it is clear that the authenticity of the documents/papers seized from various premises in Supreme Group of cases related to M/s SUMS Exim Pvt. Ltd. and SM Developers cannot be denied. It is also to point out that Shri Sanjay Jain one of the ex-directors of its partner company admitted the undisclosed income Rs. 4.00 Crores in his statement recorded during the course of search from sale of plots in these projects. Thus, it proves that in sale of the plots in both the projects unaccounted money was taken, but the question remains that who was the beneficiary of this unaccounted income on sales of plots. Since the documents have been seized from the premises of the concerns of Shri Sanjay Jain and Shri Sunil Mehta in his statement recorded during the post search enquiry U/s 131 of the IT Act,1961 denied of having any relation with these documents and in absence of any concrete evidences it is held that both the concerns M/s SUMS Exim Pvt.Ltd. and M/s SM Developers have earned (unaccounted money over and above the amount 49 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. shown in this books of account) but this income was earned by Shri Sanjay Jain under the name of these concerns. Hence, it is held that addition of undisclosed income of Rs. 1,49,13,171/- determined in the next paras will be added on substantive basis in the hands of Shri Sanjay Jain/Supreme Polymers Pvt. Ltd./Shreya’s India Pvt. Ltd. whose case is pending before Hon’ble Settlement Commission, but to protect the interest of revenue same addition on protective basis, is made in the hands of the assessee. Being aggrieved with the protective order the assessee filled appeal with the Ld CIT (A) and the Ld CIT (A) Conducted Enquiry U/s 250(4) of the Act and the AR submits as under:- A. Your honour kind attention is invited to the order of the Ld. CIT appeal page no. 12 to 24 wherein the Ld. CIT Appeal u/s 250(4) asked for submitting of factual report from the Ld. AO after conducting an investigation/enquiry u/s 250(4) of the Act on the incriminating materials, statement and reply of cross questioning of Shri Sunil Mehta, FIR, Tehsild report etc. The relevant scanned portion is as under:- 50 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 51 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 52 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 53 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 54 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 55 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 56 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 57 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 58 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 59 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 60 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 61 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. B. In Compliance the Ld. AO submitted the report which is appearing at page no. 25 to 41. The relevant scanned portion is as under: 62 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 63 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 64 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 65 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 66 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 67 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 68 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 69 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 70 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 71 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 72 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 73 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 74 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 75 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 76 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 77 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 78 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 79 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your honour kindly note that the Hon’ble CIT Appeal sent the above Enquiry on dated 11.11.2016 (Kindly see page no. 13 of the Ld. CIT Appeal order wherein the above date is appearing.) and the Ld. AO submitted the Enquiry report after more than 4 months, i.e; on dated 24.03.2017 with detailed examination (Kindly see page no. 25 POINT NO. 2.16.1 of the Ld. CIT Appeal order wherein the above date is appearing.). The brief of the same is as under:- 1) Your honour kindly refer Ld. CIT Appeal order page no. 15- 20 point no. 2.1 wherein the Ld. AO was asked to furnish his factual comments on the issue of , AO is required lo offer his factual comments after conducting necessary inquiry on seized documents. YOUR HONOUR KINDLY SEE LD. CIT APPEAL ORDER PAGE NO. 25-30 POINT NO. 2.16.1 WHEREIN THE FACTUAL REPORT OF THE LD. AO ON SEIZED DOCUMENTS IS APPEARING. Your honour the Ld. AO conducted enquiry as well as issued summon u/s 131 of the IT Act and gave his report on each document that the documents could not be verified and therefore gave factual comments that no comments can therefore be offered on this documents being unverified. The Ld. CIT Appeals provided an opportunity to the Ld. AO that the Ld. AO may furnish additional documentary evidences to rebut assessee contention but the Ld. AO failed to rebut any contention of the assessee. 2) Your Honour Kindly refer Ld. CIT Appeal order page no. 20 point no. 2.2 wherein the Ld. AO was asked to furnish his factual comments on the issue of to whom nature farm is relating? Whether to Sums Exim Pvt. Ltd. or SM Developers? Further page no. 31 to 38 of the Exhibit 1 of the Annexure AS are almost similar to page no. 120 to 126 and same addition on two places on the basis of same documents which is bad in law. Similarly Ld. CIT Appeal order page no. 20 point no. 2.3 wherein the Ld. AO was asked to furnish his factual comments on the issue of seized documents which are very different from the records of the assessee. The order of the Ld. AO was silent on both the issue. Hence, the Ld. CIT Appeals asked for factual comments u/s 250(4) of the act. Your Honour Kindly refer Ld. CIT Appeal order page no. 30 point no. 2.2 wherein the Ld. AO gave his finding that the said documents are not fresh evidences, Hence no further comments can be offered. Your honour these seized documents were not seized from the premises of the assessee rather they were seized from 3rd parties, since, the Ld. AO failed to discharge the primary obligation to prove that the seized documents are belonging to the assessee. 3) Your Honour, Kindly refer Ld CIT(A) order page no. 30 wherein point no. 2.4 regarding Kindly refer Ld CIT(A) order page no. 54-64 wherein point no. D regarding submitting of Tehsildar report. The relevant scanned portion is as under:- 80 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 81 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 82 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 83 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 84 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 85 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 86 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 87 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 88 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 89 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 90 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 91 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 4) Your Honour, Kindly refer Ld CIT(A) order page no. 30 wherein point no. 2.5 regarding Kindly refer Ld CIT(A) order page no. 66-74 wherein point no. F & G regarding Shri Sanjay Jain statement and reply of questioning in cross examination by Shri Sunil Mehta. The relevant scanned portion is as under:- 92 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 93 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 94 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 95 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 96 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 97 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 98 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 99 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 5) Your Honour, Kindly refer Ld CIT(A) order page no. 51-54 point no. ii regarding statement Shri Sanjay Jain along with his relative and others did real estate business in and around assessee owned ”NATURE FARMS” & “NATURE FARM HILL RETREAT” & SHRI SANJAY JAIN PURCHASED LAND AROUND ASSESSEE’S PROJECT IN BENAMI NAMES. Which says as under:- 100 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 101 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 102 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 103 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your Honour the above Statements as appearing in the order of Ld. CIT (Appeals) from page no. 51 to 54 was submitted by the Ld. AO in compliance of remand report u/s 250(4) which clearly establish that incriminating materials / seized documents does not belong to the assessee. The Ld. AO while submitting the Statements along with the Factual Report had not found any adverse inference against the Assessee. 6) Kindly refer Ld CIT(A) order page no. 54-64 wherein point no. D regarding submitting of Tehsildar report.The relevant scanned portion is as under:- 104 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 105 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 106 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 107 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 108 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 109 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 110 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 111 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 112 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 113 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your Honour the above Tehsildar Report as appearing in the order of Ld. CIT (Appeals) from page no. 56 to 64 was submitted by the Ld. AO in compliance of remand report u/s 250(4) which clearly establish that incriminating materials / seized documents does not belong to the assessee. The Ld. AO while submitting the Tehsildar Report along with the Factual Report had not found any adverse inference against the Assessee. 114 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 7) Your Honour, Kindly refer Ld CIT(A) order page no. 30 wherein point no. 2.9 regarding police investigation report which is available at page no. 45-52, 65-66 point no. B & E. 115 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 116 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 117 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 118 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 119 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 120 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 121 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 122 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your honour the relevant scanned portion of page no. 65 and 66 is as under:- 123 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The Ld AO has not given any adverse inference with the police investigation report which confirm that Shri Sanjay Jain along with his relative and others did real estate business in and around assessee owned ”NATURE FARMS” & “NATURE FARM HILL RETREAT” & SHRI SANJAY JAIN PURCHASED LAND AROUND 124 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. ASSESSEE’S PROJECT IN BENAMI NAMES. Hence, seized documents are not belonging to the assessee. 8) Your Honour, Kindly refer Ld CIT(A) order page no. 22-24 wherein point no. 2.10 is appearing The relevant scanned portion is as under:- 125 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 126 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your Honour the Ld AO submitted Tehsildar report which is appearing in Ld. CIT appeal order page no. 54 to 64. The Ld AO has not given any adverse inference with the Tehsildar report which confirm that seized documents are not belonging to the assessee. C. THE FINDING AND THE ORDER OF THE LD CIT (A) 1) Your Honour, Kindly refer Ld CIT(A) order page no. 74-83 and 180-184 wherein point no. 2.16.4, 2.16.5, 2.16.6 and 4.1.1 respectively regarding finding of the Ld CIT (A) is appearing. 127 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 128 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 129 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 130 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 131 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 132 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 133 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 134 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 135 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 136 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 137 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 138 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 139 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 140 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 141 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 142 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The AR relied on the finding and request that impugned seized documents are not pertaining to the assessee. D. Your Honour kind attention is to the Ld AO page no. 24 para 1st line no. 8 wherein Ld AO hold that both the concerns M/s SUMS Exim Pvt.Ltd. and M/s SM Developers have earned (unaccounted money over and above the amount shown in this books of account) but this income was earned by Shri Sanjay Jain under the name of these concerns. E. Hence Your Honour no incriminating material was found and the assessment u/s 153C is not based on any incriminating material. F. Your honour kindly refer page no. 4 of the paper book submitted on 09.02.2017. Your honour this is the copy of the note sheet. The relevant scanned portion is as under:- Kindly see page no. 3 of the paper book submitted on 09.02.2017. This is the satisfaction note prepared by Ld. AO on 03.02.2014. The relevant scanned portion is as under:- 143 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Your honour can see that the proceeding for the AY 2006-07 to 2012-13 was started on 27.09.2013. The Ld. AO written on top of the note sheet the name of the assessee and there after AY 2006-07 to 2012-13 and there after very first is written 27.09.2013 that notice under section 143(2) issued for AY 2012-13. Your honour can verified that on 30.09.2013 the AR took adjournment and there after on dated 03.02.2014 notice under section 143(3) r.w.s. 153B of the IT Act was issued for the AY 2006-07 to 2011-12. Reason recorded are placed on record for the AY 2006-07 to 2011-12. Your honour can verify that the above note sheet was started with the heading M/s Sums Exim Pvt. Ltd. A.Y. 2006-07 to 2012-13. Hence your honour it is very clear that proceeding has been started on 27.09.2013 before preparing Satisfaction Note which is having date 03.02.2014. Hence the whole 144 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. proceeding is bad in law and facts. G. Your Honour kind attention to the paper book submitted by the assessee on 10.06.2022 in which the copy of the Writ Petition filed by the department on dated 24.08.2016 before Honarable High Court Total 25 page. Your Honour kind attention is invited to page no. 12 of the writ last 4 lines wherein the Ld AO submitted on oath to Honarable High Court that Shri Sanjay Jain did the business in the name of the assessee. kindly see the paper book submitted by the AR on 10 June 2022 page no. 14 point no. xi. The relevant scanned portion is as under:- The Oath is available is page no. 24-25 of the writ wherein the Ld. AO took oath on the Stamp before the Hon’ble Court that contents of the Writ Petition are true and correct to the best of my knowledge, legal advice and as per office records. Your honour on the strength of the Ld. CIT Appeal Order the Ld. AO filed Writ and submitted that Shri Sanjay Jain had not made a full and true disclosure of their income and the manner in which the income was derived. The relevant scanned 145 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. portion is as under:- 1.11. Your Honour kind attention to the paper book submitted on 25.09.2018 wherein the copy of the amendment Writ Petition on dated 14.03.2018 before Honarable High Court page no. 168-181 were submitted by the department. Your Honour kind attention is invited to page no. 174 of the writ last para to page no. 175.The relevant scanned portion is as under:- 146 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The Ld AO submitted on oath to Hon’ble High Court that after having taken cognizance of the all the facts and oral / documentary evidences gathered by Ld AO and rejoinder filled by the assessee observed by the Ld AO that addition made on protective basis in the hands of the assessee because of the facts that the seized documents actually pertained to Shri Sanjay Jain and his group entities, and therefore, these additions are required to be made in their hands and not in the hands of the assessee. The oath is available is page no. 180-181 of the writ. 1.12. Hence, your honour the Ld. AO clearly stated that this income was earned 147 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. by Shri Sanjay Jain under the name of these concerns. Therefore, the Ld. AO held that addition of undisclosed income determined will be added on substantive basis in the hands of Shri Sanjay Jain/Supreme Polymers Pvt. Ltd./Shreya’s India Pvt. Ltd. whose case is pending before Hon’ble Settlement Commission, but to protect the interest of revenue same addition on protective basis, is made in the hands of the assessee. The addition was made in the hand of the assessee only to protect the interest of the revenue. Hence it is undisputed fact that the this income was earned by Shri Sanjay Jain under the name of these concerns.Hence it is undisputed fact that the incriminating materials are not belonging to the assessee. 1.13. The Ld DR submitted/aruged that FIR has no relevance since both parties assessee and Shri Sanjay Jain Group made settlement out of Court. In this respect the AR submit that contents of FIR and finding by police has relevance as out of Court settlement does not means that contents is insignificant. Your Honour the FIR, Finding of Police, Tehsildar Report was obtained by the Ld AO in compliance of section 250(4) the Ld AO was instructed to submit the factual report thereon. The Ld AO had not given any adverse inference and therefore the contents of FIR and finding by police and Tehsildar Report is undisputed wherein it was clearly proved that the sezied documents does not belongs to the assessee. So your Honour is requested kindly to not to allow the appeal of the revenue and confirmed that proceeding initiated u/s 153C of the Act is correctly hold as null & void by the Ld CIT (A) and request Kindly to delete the addition made by the Ld AO.’’ 11. We heard the rival contentions as argued by both the parties to drive home to their contentions from the order of the lower authorities. We have also perused the written submission and the detailed paper book containing 1321 pages of the assessee and 315 (I) +15(II) pages filed by the revenue. The bench noted that the apple of discord in all these appeals are arising out of page 31 to 38 of Exhibit -1 of Annexure AS seized from M/s. Shreya’s India Private Limited related to the plot of the scheme “Nature Farm. On perusal of these papers ld. AO noted that it contains plot no. 148 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. booked, area sold, whether the registered or not, receipt of cheque and cash and balance of the amount. Similarly, page no. 122 to 127 of Exhibit-1 of Annexure -A to the Panchnama dated 28.04.2011 found and seized from M/s. Supreme Polymers Private Limited having similar details. As in these companies are group concerns of Shri Sanjay Jain who is also attached to the assessee firms based on these seized incriminating material wherein transaction of on money were recorded. These papers contains the details of the project under taken by the assessee in the name of “Nature Farm Hill Retreat” and “Natural Firm” undertaken by these firms. As the premises of these concerns were not searched, the assessment of these concerns were reopened in accordance with the provisions of Section 153C of the Act. Since the assessee has challenged the technical ground before the ld. CIT(A) who has delivered his judgement based on the technical ground raised by the assessee and appeal was consequently allowed on technical ground. Before us, the DR vehemently argued that the ld. CIT(A) erred in giving findings on technical ground as it is evidently clear that the transactions recorded in the form of cheque money is identical that has been recorded in the books of these concerns. Based on these observations the bench also observed from the page 21 of the department paper book as extracted here in below : 149 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 150 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. As it is evident from the sample sale document produced by the assessee at the instance of the bench the bench noted sale of Nature firm plot no. 24 to Ms. Urmila Singh w/o Shri P. K. Singh at a sum of Rs. 4,17,816/- for the amount recorded in the books of the assessee from the books of the Sums Exim Private Limited. Similar entry of this plot is appearing on page 131 of the seized document wherein the cheque rate is matching at Rs. 4,17,816/- [ 2089.08*200 rate of cheque in seized document =4,17,816/-] similarly for Ms. ChnadraniBasu Rs. 2,28,400/- [ 1210*189 rate of cheque in seized documents]. Against both transaction cash rate of Rs. 550& Rs. 1011 is written thus the contention of the ld. AR of the assessee is incorrect that this document does not pertains to the assessee as the transaction is not only supported in the entry in the books of account but is also supports the documents registered with the state government. Thus, we are of the considered view that based on these documents it cannot be considered that these documents does not pertains to the assessee as hold by the ld. CIT(A) and therefore, the finding of the ld. CIT(A) is against the set of facts available on record holding that impugned documents do not pertains to the assessee rather they belong to Shri Sanjay Jain is against the above set of evidence produced by the ld. DR representing the revenue. Since, this finding of the ld. CIT(A) is incorrect the consequent holding of the 151 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. proceedings us/. 153 of Act as null and void is also incorrect and against the evidence placed on record. Now to decide the applicability of the legal ground of the revenue. It would be proper to extract the provision of section 153C of the Act here in below: Assessment of income of any other person. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A : As it is evident from the provision of section 153C of the Act is its object and purpose is to address the persons other than the searched person as it is beyond doubt based on the fact that the seized documents belongs and pertains to the assessee and therefore, the proceedings initiated by the assessing officer is correct and action of the ld. Assessing Officer is upheld based on the above findings on facts. Based on this observation, the 152 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Ground No. 1 raised by the revenue is allowed as it is evidently clear that the documents found in the search pertain to this firm and therefore, the proceedings-initiated u/s 153C is upheld as we have seen that direct nexus is established from the seized material that the amount recorded to the extent of cheque amount is already reflected in the books of account of the assessee. Therefore, we uphold the action of the AO initiated by him u/s 153C of the Act. In terms of observation, the Ground No. 1 raised by the Revenue is allowed. 12. Apropos to the ground no. 2 the relevant finding of the ld. CIT(A) is reiterated here in below for the sake of convenience and to understand the issue: “I have carefully considered assessee’s submission and also carefully gone though the assessment order. I have also taken a note of factual matrix of the case as well as applicable case laws relied upon. AO is required to invoke the provision of section 145(3) of the Act before estimating assessee’s income. However, in view of relied given in Gr no. 2 & 3 becomes academic in nature. Accordingly same is not adjudicated. 12.1 As it is evident that the ld. CIT(A) has considered the appeal of the assessee on technical ground he has not dealt with the merits of the case. Thus, so far as the merits of the case is concerned the bench noted that the addition made by the assessing officer is on protective basis. Therefore, we have heard the parties on merits also. The reason behind as it is evident from the records that the challenged seized material found at 153 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. the premises of the company wherein Shri Sanjay Jain is Director and during search certain incriminating documents were found and incriminating materials were seized and the initiation of proceedings were made u/s 153C of the Act against the assessee based on that material. Based on the evidence presented by both the parties the ld. AR of the assessee submitted that even if the transaction is considered to be pertains / belongs to the assessee the related income has already been disclosed and accepted by the revenue in the case of Shri Sanjay Jain and that is why the addition is made on protective basis. The action of the ld. AO adding the whole consideration is also incorrect. On merits the ld. AR of the assessee submitted that as these transactions were completely under control of Shri Sanjay Jain the same was disclosed by him as income and once the same is accepted there cannot be double addition of the same income. The other three Directors/ Partners have no knowledge of the modus operandi in relation to the project developed by the assessee firm and that why the dispute arose and FIR was made. Accepting the contention of the revenue that the details written in these papers are somewhere matching to the extent of name and amount of documents executed but the Plot No. and area is not matching as the assessee firm has sold the agriculture land and, therefore, to that extent the documents 154 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. do not fully pertain to the assessee. Even if the contention of the Revenue is accepted and then in that case revenue themselves decided to tax the assessee on these on money as protective addition and now even the protective addition should not sustained as Shri Sanjay Jain has offered the income related to these documents there is no meaning of making protective addition in this case. In addition to the above oral arguments the ld. AR of the assessee further submitted following submissions on mertis: SYNOPSIS THE BASIC PRINCIPLE OF TAXATION IS THAT AT A TIME SAME INCOME CANNOT BE CHARGED / TAXED ON TWO PERSONS. UNDISPUTED FACTS 1 Protective addition is made by the Ld. AO in both the assessee 2 Alleged protective addition has been made in both the assessee on the hinged of page no. 127 of Exhibit-1 of AnnexureA. 3 As per the aforesaid Page no. 127 the alleged undisclosed income is Rs. 2,24,87,607/-. 4 Page no. 127 is the final calculation of all the seized documents. 5 Since Shri Sanjay Jain had already surrendered Rs. 4 Crores covering all these seized documents, Therefore, the alleged income of seized documents has already been taxed 6 Revenue has confirmed all these findings. 7 Kindly see page no. 203 of paper book submitted by the Revenue in 09.10.2017 wherein the revenue took the stand before Hon’ble ITSC that the Tehsildar Report also confirms that the assessee sold land without conversion charges and the seized documents are relating to land sold with conversion charges. 1. Your honour, It is undisputed fact that the Ld. AO passed the protective order. 2. Your honour, the Ld. AO calculated undisclosed income of SUMS Exim (India) Private Limited on the strength of seized documents and the details of which are as under:- (a) Your honour kind attention is invited to the AO order page no. 155 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 24 point no. 12 of SUMS Exim AY 2006-07 wherein the Ld. AO considered all the seized documents in point no. 1 and thereafter in point no. 2 gave finding of “page no. 128 to 130 of exhibit-1 of Annexure A” thereafter in continuance thereof on page no. 25 point no. 3 considered the seized documents “page no. 120 to 126 of exhibit-1 of Annexure A” and concluded just below the table that Total alleged undisclosed sales receipts of Rs. 22,99,18,429. In point no. 4 the Ld. AO mentioned the sales of the assessee for the assessment years 2006-07 to 2012-13. Thereafter, in point no. 5 the undisclosed sales was calculated by multiplying with the alleged sales appearing in the seized document page no. 127 and that is alleged sales of Rs. 22,99,18,429. Therefore, the alleged undisclosed sales for the AY 2006-07 to 2008-09was calculated Rs. 12,23,18,100 (AY 2006-07 Rs. 1,49,13,171) of SUMS Exim. Hence, the whole alleged undisclosed sales for the AY 2006-07 to 2012-13 is based on “seized documents page no. 127 of exhibit-1 of Annexure A.” For your honour ready reference the aforesaid page no. 127 is enclosed herewith. (b) Even the above finding have been confirmed by the revenue in the Confidential report submitted by the deptt to the Secretory, Income Tax Settlement Commission on 22.09.2017 (Kindly see paper book IV submitted on 09.10.2017 page no. 210 on the table where all the above findings appear). 3. Similarly, your honour, the Ld. AO calculated undisclosed income of S.M. Developers on the strength of seized documents and the details of which is as under:- (a) Your honour kind attention is invited to the AO order page no. 27 point no. 13 of S. M. Developers AY 2006-07 wherein the Ld. AO considered the finding of “page no. 127 of exhibit-1 of Annexure A” an alleged investment of Rs. 19,27,81,502 thereafter in continuance thereof on page no. 28 considered the seized documents “page no. 127 of exhibit-1 of Annexure A” and concluded just below the table that Total alleged undisclosed investment / expenditure of Rs. 19,27,81,502. The Ld. AO mentioned the undisclosed investment / expenditure of the assessee for the assessment years 2006-07 to 2008-09. Thereafter, the alleged undisclosed investment / expenditure was calculated by multiplying with the sales appearing in the seized document page no. 127 and that is Rs. 19,27,81,502. Therefore, the undisclosed investment / expenditure for the AY 2006-07 was calculated Rs. 1,30,03,657 of S.M. Developers. Hence, the whole undisclosed sales for the AY 2006-07 to 2008-09 is based on “seized documents page no. 127 of exhibit-1 of Annexure A.” (b) Even the above findings have been confirmed by the revenue 156 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. in the Confidential report submitted by the dept to the Secretory, Income Tax Settlement Commission on 22.09.2017 (Kindly see paper book IV submitted on 09.10.2017 page no. 211 on the table where all the above findings appear). 4. Your honour kindly see paper book dated 30.06.2022 submitted by the department paper book page no. 7. Your honour, this paper book page no. 7 is the part of Seized Document Annexure-A Exibit-1. This Exhibit-1 is having page no. 1-169 and has details of purchases, sales, income and expenses. The Ld. AO also gave these findings on page no. 15 and 16 that page no. 127 which is paper book page no. 7 shows a summary of purchases, sales, income and expenses. Your honour this page no. 127 has not been disputed by the Ld. AO which shows that the net profit of the seized document is Rs. 2,24,87,607/- against which Shri Sanjay Jain has already surrendered Rs. 4 Crores as income and tax thereon has already been paid. Kindly see paper book dated 30.06.2022 submitted by the department paper book page no. 235-236 wherein Shri Sanjay Jain surrendered Rs. 4 crores on these seized documents. Please allow me to read this statement. Your honour can see that the protective order passed by the Ld. AO only on the hinges of these papers. 5. Your honour, Hence, this income has already been taxed. Kindly note that it is an undisputed fact that aforesaid page no. 127 is the final calculation of all the seized documents. Your honour, the Ld. AO made the addition to both the assessee by taking alleged sales in the hands of Sums Exim Pvt. Ltd. and the alleged investment in the hands of S.M. Developers. Hence, your honour can see that in both the cases, the addition has been confirmed on the hinges of page no. 127 which is appearing in paper book 1st submitted by the Revenue on dated 30.06.2022 page no. 7. 6. Your honour, the above seized page no. 127 clearly states that the land was purchased and expenses of Rs. 19,27,81,502/- (with the heading as B) in the name of NF Hill Retreat and sale of Rs. 21,52,69,109/- (with the heading as A) was made in the name of Nature Farms. Thereafter, the difference of Income & Expenditure (A-B) is appears as Rs. 2,24,87,607/-. Whereas the Ld. AO made the addition in both the assessee by taking alleged expenses of NF Hill Retreat Rs. 19,27,81,502/-(B) as undisclosed investment of M/s S.M. Developers and by taking alleged sales of Nature Farms Rs. 22,99,18,429/- as undisclosed sales of SUMS Exim Pvt. Ltd. Whereas in the above seized paper 127 sales, purchases and expenditure incurred by the same alleged person to whom this paper belongs. 7. With this above page several pages having calculation of the sales amount (page no. 120-126 of exhibit-1 of the Annexure -A (kindly see paper book 1st submitted by the Revenue on dated 30.06.2022 page no. 8-14 wherein page no. 120-126 of Exhibit 1 of Annexure A is appearing) as well as page no. 31 to 38 of the exhibit-1 of the Annexure -AS (kindly see paper book 1st submitted by the Revenue on 157 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. dated 30.06.2022 page no. 118-124 wherein page no. 31-38 of Exhibit 1 of Annexure AS is appearing) Few pages show the collection of conversion charges also whereas no conversion charges were charged by the assessee. 8. Hence, while the seized documents do not pertain to the assessee, and they are clearly a narration of the real estate business of Shri Sanjay Jain and group only, which is confirmed by the Tehsildar Report as well. 9. It is undisputed fact that Shri Sanjay Jain has already paid income tax against the said alleged undisclosed income by surrendering Rs. 4 Crores. Undoubtedly, the alleged unexplained income of the seized documents stands categorically surrendered as undisclosed income of Shri Sanjay Jain during the 132 proceedings (kindly see paper book 1st submitted by the revenue on 30.06.2022 on page no. 235-236 wherein this fact of surrender appears. Further, your honour is requested to kindly see paper book no. iv submitted by AR on 09.10.2017. Your honour, this paper book is a copy of a factual report sent on 06.10.2017 by the Ld. PCIT(Central) Jaipur to the Hon’ble ITSC page no. 4 of the report wherein in table Sr. No. 2 the surrender of above Rs. 4 Crores is appearing before the Settlement Commission. The Revenue has not controverted the said fact. The impugned income having been categorically taxed as undisclosed income of Shri Sanjay Jain, and therefore request that it should not be taxed in the hands of the assessee also, which would only result in taxing the same income twice. So your Honour is requested kindly to not to allow the appeal of the revenue on this ground and request to confirm that the Ld CIT (A) is correctly deleted the addition made by the Ld AO.’’ 12.2 The ld. AR further argued that Revenue has misconceived the findings of the Hon’ble Settlement Commission and thereby added the whole sums of on money and that is also on protective basis which is incorrect. The Revenue while making the petition before the Hon’ble Rajasthan High Court in the case of Shri Sanjay Jain and Others has raised the issue which is reproduced para 8 to 11 as under:- 158 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. ‘’8. That in view of the emergence of these above mentioned new facts arising after the order of learned CIT (A)-4, Jaipur, the humble applicant-petitioner prays for amending the writ petition in the following manner: The Para-9 (iii) of the writ petition, may kindly be read as follows :- "9-iii) That revenue while submitting its Rule-9 report raised an issue relating to the protective assessments completed in the case of M/s. Sums Exim Pvt. Ltd. and M/s. S.M. Developers. In the Rule-9 report it was submitted that during search certain incriminating documents were seized from the premises of Shri Sanjay Jain allegedly pertaining to M/s. Sums Exim Pvt. Ltd. and M/s. S.M. Developers in which Shri Sanjay Jain was one of the director and key person who left these companies in FY 2008-09. For protecting the interest of revenue protective assessments u/s 153C were completed in the above mentioned cases from AY 2006-07 to AY 2012-13. It was mentioned in the report that additions may be made in the case of the applicants on the basis of the facts narrated in the assessment orders. Before the ITSC also, department submitted that most of the transactions were made by Shri Sanjay Jain therefore protective additions made in the cases of M/s Sums Exim Pvt. Ltd. and M/s S.M. Developers needs to be added as the undisclosed income of Shri Sanjay Jain. The settlement commission while passing its order failed to consider the submissions made by the revenue." After para-9 (iii) of the writ petition, a new para No.9 (iii) (a) may kindly be permitted to be inserted as follows: "9-iii) (a) That the CIT (A)-4, Jaipur after having taken cognizance of all the facts and oral/documentary evidence gathered by the Assessing Officer and rejoinder filed by the assessee observed that additions made by the AO on protective basis in the hands of M/s. SM Developers and M/s. SUMS Exim Pvt. Ltd. cannot be sustained because of the fact that the seized documents actually pertained to respondents, Shri Sanjay Jain and his group entities, and therefore, these additions are required to be made in the hands of the respondents." The Para-9 (v) of the writ petition, may kindly be read as follows :- "9-v) That the assessing officer had worked out the unrecorded sales in the case of M/s SUMS Exim Pvt. Ltd. on the basis of the data found recorded in the seized papers/ documents allegedly relating to the sale of plots. The data was found recorded upto May, 2008 i.e. when Shri Sanjay Jain left the company. 159 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The assessing officer has calculated the proportionate sales as per seized material as well as on the basis of recorded sales for the period 01/04/2005 to 31/05/2008. On the same analogy, income of the assessee company relating to sale of plots was calculated for the later period also, i.e. from 01/04/2008 to 31/03/2012." The Para-9 (vi) of the writ petition, may kindly be read as follows :- "9-vi) That the assessing officer has calculated the undisclosed sales in the case of M/s S.M. Developers on the basis of alleged seized documents for the period 01/04/2005 to 31/05/2008 and specifically mentioned in the order that for every disclosed sale of Rs. 100/-, undisclosed income of Rs. 784.87/- was being earned by the assessee. On the same analogy, income of the assessee company was calculated for the later period also, i.e. from 01/04/2008 to 31/03/2012. The assessing officer has also worked out the undisclosed investment/ expenditure on the basis of seized documents for AY 2006-07 to 2008- 09 and separate addition has also been made for the same. The settlement commission failed to consider the evidences filed along with the Rule-9 report by the revenue." The Para-9 (viii) of the writ petition, may kindly be read as follows :- "9-viii) That the assessing officer while completing the protective assessment had taken into consideration and has also discussed in its order the statements of Shri Sunil Mehta, recorded on 21/06/2011 u/s 131 of the Income Tax Act. The copies of FIRs, documentary evidences submitted by the A/R of Shri Sunil Mehta, M/s SUMS Exim Pvt. Ltd. and M/s S.M. Developers were made available to the settlement commission along with the Rule-9 report. The settlement commission while passing the order has not taken into consideration the above mentioned evidences which shows that Shri Sanjay Jain did the business in the name of these concerns and collected such entire sale proceeds." After ground (I) of the Writ Petition, a new grounds (I) (A) may kindly be permitted to be inserted as follows: "(I) (A). Because, in view of the orders dated 30.03.2017 passed by the learned CIT(A) in the case of M/s. SM Developers and M/s. SUMS Exim Pvt. Ltd. it is apparent that the respondents have not placed all the relevant and necessary documents before the Learned ITSC and as such, the impugned order dated 11.09.2015 is obtained by fraud and misrepresentation of facts 160 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. on the part of respondents rendering the impugned order as null and void, thus, liable to be set aside." 10. That amendment in the aforesaid manner is required to be carried out in the present Writ Petition to bring additional facts on record which further prove absence of a full and true disclosure by the respondents before obtaining the impugned order dated 11.09.2015 from the Learned ITSC. The amendment is bonafide and has been occasioned on account of subsequent events during the pendency of the writ petition. It is, therefore requested, in the interest of justice that the same may be allowed to incorporated. 11. That other submissions shall be made at the time of oral hearing of the case.’’ As it is clear that Revenue is of the view that if further addition if any is to be made, is required to be made in the case of Shri Sanjay Jain and there is no force in the arguments of the ld DR to sustain the addition on protective basis to safe guard the interest of the revenue even the department has since beginning choose not to tax the assessee on substantive basis and revenue has already taken a stand before the Honourable High court to tax this money in the hands of Shri Sanjay Jain to keep these issue alive sustaining the addition. The assessee established and demonstrated that the documents are not fully correct. The on money transaction if any was carried out by Shri Sanjay Jain and the seized records found at the time of search itself proves that income is required to be taxed in the hands of Shri Sanjay Jain as the Department repeatedly taken a stand including before the Hon’ble High Court taking a view that the addition is required to be made in the hands of Shri Sanjay Jain. Therefore, 161 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. in the light of these facts, there is no reason to sustain the addition on protective basis. 12.3 On the other hand ld. DR reiterated the fact that as it is clearly demonstrated that these transactions relates to the assessee and the same is required to be taxed in the hands of the assessee and the ld. AO has based on the admission of Shri Sanjay Jain made the protective addition which is correct and is required to be sustained. The ld. DR further submitted that substantial amount of unrecorded sales is found recorded on these documents and Shri Sanjay Jain has accepted only 4 Cr on this papers but in fact the stake is much more and that is why the revenue is in high court. 12.4 We have heard both the parties and perused the materials available on record. In this case, it is noted that a search was conducted on 28-04-2011 in the case of Supreme Group, Jaipur ( key person Shri Sanjay Jain) at various residential / business premises. During the course of search various books of accounts/loose papers/documents related to the assessee (M/s. SUMS Exim Pvt. Ltd.) were found and seized as per annexure prepared during the course of search at residential / business premises covered in the search. Accordingly, in the case of the assessee, proceedings u/s 153C r.w.s. 153A of the Act had been initiated after 162 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. recording the reasons by the AO as mentioned in the assessment order (Para 6). It is also noted from the assessment order that the show cause letter dated 20-03-2014 was issued to the assessee for which the assessee submitted the detailed reply vide letter dated 26-03-2014 to the AO. The AO considered the submission of the assessee but recorded the statements of some related persons u/s 132(4)/131 of the Act like Shri Sanjay Jain, Shri Bhaskar Sharma and Shri Sunil Mehta on various dates as mentioned in the assessment order. It is noted that the AO taking into consideration the above facts initiated the proceedings u/s 153C r.w.s. 143(3) of the Act in the case of M/s. Sums Exim Pvt. Ltd. It also noteworthy to mention that proceedings had been started on 29-09-2013 and the satisfaction note for initiating proceeding has been prepared on 03-02-2014 in the case of the assessee (M/s. SUMS Exim Pvt. Ltd.).It is also noted that the paper book had been submitted by the assessee on 10-06-2022 in which the copy of the writ petition filed by the Department on 24-08-2016 before the Hon’ble High Court. It is also noted that the AO submitted an Oath before Hon’ble High Court that Shri Sanjay Jain did the business in the name of the assessee (PBP 24-25 of the Writ). However, in first appeal before the ld. CIT(A) who noticed that no incriminating material were found for the period after 31-05-2008 and the additions made on the 163 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. basis of material found and based on that material extrapolation additions have also been deleted considering it as academic in nature. Since, we have based on the arguments on the ld. DR allowed the ground no. 1 of initiation proceeding u/s. 153C of the Act it is also necessary to decide the second ground so of the revenue that based on the material available by both the parties even the protective addition made by the ld. AO is to be sustained on merits or not. It is not disputed by the revenue that the addition made on protective basis is required to be made on substantive basis. Merely revenue is contending that the Shri Sanjay Jain has accepted Rs. 4 Cr on these transactions but the whole sale proceeds is required to be added. Since the matter of reopening of the case of Shri Sanjay Jain is pending in the high court revenue is praying to sustain the protective addition. The bench noted that since beginning Shri Sanjay Jain is owning up the transaction recorded in the seized material. Shri Sanjay Jain has offered and has already disclosed a sum of Rs.4.00 crores out of Rs.2,24,87,607/- profit as calculated at page 127 of loose paper found named exhibit 1. Since these loose papers based upon which the addition is proposed in the case of assessee firm is already explained and disclosed by Shri Sanjay Jain and now there is no further scope of sustaining the protective addition as even on merits on these pages Shri Sanjay Jain has 164 ITA NO. 860/JP/2016 DCIT, CC disclosed a sum of Rs.4.00 Crores.based on the seized material which is extracted The revenue while submitting the report to the settlement commissionagainst the sales proceeds recorded and found in the disputed page also found the related expenditure incurred in cash on this project as extracted ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD.disclosed a sum of Rs.4.00 Crores. The ld. AR has explained the working based on the seized material which is extracted hereinbelow:The revenue while submitting the report to the settlement commissionagainst the sales proceeds recorded and found in the disputed page also ated expenditure incurred in cash on this project as extracted 3,JAIPUR VS SUMS EXIM (P) LTD. The ld. AR has explained the working hereinbelow: The revenue while submitting the report to the settlement commission against the sales proceeds recorded and found in the disputed page also ated expenditure incurred in cash on this project as extracted 165 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. above at page 127 of exhibit 1 and the relevant observation of the revenue in that report submitted to settlement commission is as under: (o) In the page Nol. 127 of exhibit of annexure A seized from the business premises of M/s Supreme Polymers Pvt Ltd. details of expenses of NF Hill Retreat are mentioned. In this impugned seized documents, details of land purchase direct expenses, indirect expenses and advanced against expenses are given. This detail is reproduced as under:- Expenses of Hill Retreat Book 1 Book 2 Total Land Bigha 159.185 sq yard 4181534.625 1,60,04,300 7,78,12,652 9,38,16,952 Direct expenses 3,44,69,355 99,14,588 4,43,83,943 Direct expenses 1,36,36,756 3,05,47,064 4,41,83,820 Advance against Expenses 86,54,548 17,42,239 10,39,66,787 (p) As per page No. 31 to 38 of the exhibit-1 of the Annexure –AS seized from M/s.Shreya’s India Pvt Ltd. the total cheque and cash amount received on sale of various plot Nature Form Scheme are as under:- Receipts Amount (In Rs.) Cheque received 2,42,16,053 Cheque received 2,41,46,187 Cheque receivable 43,72,848 Total 6,14,80,043 Total receipts of Rs.6,14,80,043/- is related to land already booked/sold upto May8 2008. The remaining land to be sold after May, 2008 as per the facts of the cases and material seized during the course of search. Thus, when the revenue has already explained the page that against the unrecorded sales proceeds unrecorded expenditure is also found recorded and the same is already accepted in the proceeding in the settlement 166 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. commission by the revenue and thus, the income disclosed at 4 Cr was substantiated by the revenue even though the profit earned at Rs. 2,24,87,607/-. Thus, we found that action of taxing the assessee on based on the sales proceeds and that too without allowing the related expenditure on protective basis is not correct. Not only that when the action of the offering the income by Shri Sanjay Jain is accepted by the revenue and revenue since the stage of the assessment considered that the addition is not required to be made on substantive basis and choose to tax on protective basis. This action itself suggest that the revenue has choose to tax the income in the hands of Shri Sanjay Jain who is found in possession of all these records and has already accepted the undisclosed income which the revenue is accepting since the search proceedings. Based on the set of evidence and arguments made by both the parties is not disputed that the explanation made by Shri Sanjay Jain is found to be correct and he has already explained nature of income and expenditure related to these unrecorded sales for which he has also found in possession of the details of the unrecorded expenditure and the profit of the project is also found recorded at page 127 as extracted here in above for an amount of Rs. 2,24,87,607/- against which Shri Sanjay Jain has 167 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. disclosed a sum of Rs.4.00 crores wherein relevant question and answer is reproduced hereinbelow from the records produced before us iz- 5 vcvkidksAnnexure AS-1ds page No.116 ls 133 fn[kk;stkjgsgS d``i;kvkibldsckjsesa fVIi.kh nsa m- mijksDrIk``"V eSus ns[k fy;sgSAbuIk``"Vksaesaesjs }kjkrhuvU; O;fDr;ksa ds lkFkfeydj [kjhnhxbZrFkkcsphxbZtehu ls lacaf/krdkxtkrgSA ;g HkwfeDelhi roadijfLFkrgSvkSj bls Nature Farms ds uke ls develop & promote fd;kx;kFkkApage No. 116 ls 126 ij bl project ls fofHkUuplots ds sale dh detailsgSrFkkpage No. 121 ij bl project dk actual P & L A/C gSA ;g tehucsprs le; sale amount dk dqNfgLlkudnesafy;kx;kFkkA bl udn dh jkf’k ls further tehu [kjhnus ds fy;susefd;kx;kFkkA bl izdkjgeproject dh dqNizkfIrrFkkdqy [kpksZa dh summary page no.127 ijekStwngSA bl project dh tehu [kjhn ds fy;sesjs }kjkfuos’klhektkspage No.132 ls 133 ls fofnrgSAlu~~ 2008 esackfdpartners ls esjkeueqVkogksx;kvkSj ml le; rdyxHkx 30&40 tehu unsoldjgxbZFkhbldsckn bl projectesaesjsprofit ,oaunsoldtehu ds stoke ds cnys eq>s jdeizkIrgksukcurkgSA bl lkjstransactions dh actual workingvHkhdjikuklaHkoughagSAfQjHkhesjsfglkc ls bl project ls eq>s pkjdjksM dk ykHkgqvkvkSj bls eSusvkxstehu [kjhn ds fy;svfxze ns j[ksgSaAbldhdetailseSvkidksizLrqrdjnwaxkA bl pkjdjksM :Ik;s dh v?kksf"krykHk ,oamlusfd;sgq, fuos’kdksv?kksf"krvkidksdjjksi.kgsrq ?kks"k.kkdjrkgWwA iz- 6 vcvkidksAnnexure AS ls page No. 01 ls 18 fn[kkustkjgsgSA d``Ik;kbuesnTkZentriesdksLi"VdjsaA m- mijksDrpagesesadqNcash receiptsrFkkcash expenses ls lacaf/krdetailsgSAbudsbooksesaverifiedjkuklaHkoughagSA iz- 7 vktsearch dh dk;Zokgh ds nkSjkudqyyxHkx 35 yk[k :i;sudn ¼fofHkUu LFkkuksa ij½ rFkkyxHkx 1&20 djksM dh jewelleryik;hxbZgSA d``i;kbldkSource Li"VdjsaA 168 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. m- 7 tgkardudn dk lokygSyxHkx 10 & 12 yk[k :Ik;s dk cashgSvkSjckdh ds ckjsesaeScrkusesavleFkZgwWaA iz- 8 vkidksdqNvkSjdgukgSA m- 8 vktesjsfofHkUupremises ijsearch dh dk;Zokgh ds nkSjkucgqrlkjs ,slstransactions ,oanLrkostik;sx;sgSftudkeSLi"Vhdj.knsusesavleFkZjgkgWwAbunLrkostksaesadbZizdkj ds cash receipts ,oacash expensestSlsysu&nsuHkhntZgSA The ld. AR of the assessee further explained that the basis of calculating the profit at Rs.4.00 crores and therefore, to substantiate this we have to rely upon the working as it is available in seized record and the same is reproduced hereinbelow 169 ITA NO. 860/JP/2016 DCIT, CC The ld. AR of the assessee thus substantwhich is under dispute against this, the assessee has incurred various expenses in connection with these properties which is also made out unrecorded sales and, therefore, even theshared by the revenue Sanjay Jain has incurred the ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The ld. AR of the assessee thus substantiates the total on money recorded which is under dispute against this, the assessee has incurred various expenses in connection with these properties which is also made out unrecorded sales and, therefore, even these details and submission were he revenue Rule 9, the Revenue has accepted Sanjay Jain has incurred the expenditure on this project. Our of the profit 3,JAIPUR VS SUMS EXIM (P) LTD. iates the total on money recorded which is under dispute against this, the assessee has incurred various expenses in connection with these properties which is also made out se details and submission were Rule 9, the Revenue has accepted the fact that Shri on this project. Our of the profit 170 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. so determined Shri Sanjay Jain has already offered the sum of Rs.4.00 crores to justify the error and omission in making the profit of these entities. It is also not disputed that the assessee firm and their partners made claim of the money embezzled for which a FIR for recovery of the money is pending for the money that he has collected behind the back of other partners / directors. This fact is also not disputed by the Revenue which is clear in taxing Shri Sanjay Jain on substantive basis.The fact is that Shri Sanjay Jain has offered Rs.4.00 crores as it is evidently clear from the findings recorded in para 8.10 of Hon’ble Settlement Commission which is reproduced as under:- ‘’ 8.10 Issue regarding addition made u/s 153C in the case of M/s. SUMS Exim Pvt Ltd. and M/s. S.M. Developers to be added in the hands of Shri Sanjay Jain: In her Rule 19, report, the Principal CIT has stated that substantive addition should be made in the hands of Shri Sanjay Jain in various assessment years, of the amounts already added protectively in the assessments of M/s SUMS Exim Pvt. Lid, and M/s S.M. Developers. The Principal CIT has further stated that these additions course are warranted in view of incriminating documents seized during the of search from Sh. Sanjay Jain's premises, as these papers pertain to M/s SUMS Exim Pvt. Ltd. and M/s S.M. Developers in which Sanjay Jain was one of the directors and the key person till financial year 2009-10. The Principal CIT has also stated that additions of Rs.21,82,51,846/- and Rs.38,96,63,496/- were made u/s 153 C of the I.T. Act in the hands of M/s SUMS Exim Pvt. Ltd. and M/s S.M. Developers on protective basis. 171 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. The learned counsel for the applicant has submitted that purposed addition in respect of incriminating documents found and seized in respect of activities of M/s SUMS Exim Pvt. Ltd. and M/s S.M. Developers is not justified as the Principal CIT as himself noted in his report that these incrimination documents/paper pertain to M/S SUMS Exim Pvt. Ltd. and M/s S.M. Developers. It is, however, clarified that M/s S.M. Developers is a partnership firm wherein M/s SUMS Exim Pvt. Ltd. and M/s MamonIspat Pvt. Ltd. are partners. It is submitted that these documents were found as the accountant of the firm was maintaining in the firms office in the applicants premises. Shri Sanjay Jain was only having 25% share holding in M/s Sums Exim Pvt. Ltd. The Ld. AR further submitted that M/S SUMS Exim Pvt. Ltd. and M/s S.M. Developers are separated entities for tax purposes, therefore, any income which is earned by company or firm does not become the income of the partner or share holder thereof. It is therefore submitted that the undisclosed income in the hands of firm or company cannot be charged to tax in the hands of partner or shareholder as they are separate entities for the purpose of taxation. It has been submitted that M/s SUMS Exim Pvt. Ltd. had a real estate project "Nature Farms" where as per seized records a profit of Rs 16 crores was revealed. Accordingly, the applicant holding 25% shareholding had offered Rs.4 crores in the present application. Commission Findings: We have considered the facts carefully, the material facts relevant are that during the course of search documents/papers were found pertaining to activities M/s SUMS Exim Pvt. Ltd. and M/s S.M. Developers relating to period before F.Y. 2008-09 and that Sh. Sanjay Jain had left the company M/s SUMS Exim Pvt. Ltd. during F.Y. 2008-09. In support of these facts, the following documents were filed by the AR: a) Copy of memorandum settlement arrived at between Shri Sunil Mehta and the applicant Shri Sanjay Jain. b) Copy of resignation from M/s. SUMS Exim Pvt. Ltd. c) Board Resoluton regarding resignation of Sh. Sanjay Jain Considering that Shri Sanjay Jain had left M/s Sums Exim Pvt Ltd. in FY 2009-10 also that the supporting evidence filed is not controverted by the CIT, the income of the company cannot be taxed in the heads of Sh. Sanjay Jain. Similarly, M/s.S.M. Developers being a Regd. Firm and separately assessed where Shri 172 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. Sanjay Jain is not a partner, its income after AY 2010-11 cannot be included in Sanjay Jain hand. For the earlier period, the applicant Sanjay Jain has already accounted for the income in the SoF as started by the AR. We find the disclosure made in this regard to be full and true. The Department may examine modification, if any, in the hands of the other partners/ shareholders who continue to be partners / shareholders any stay invested in properties.’’ 12.5 In the light of detailed deliberations as recorded in above para 12.4, we are of the considered view that the protective addition made upon the assessee is not sustainable when the revenue in the case of Shri Sanjay Jain accepted the income on substantive basis based on incriminating material and in the case of assessee since at the assessment stage Department made protective additions which we hold is not warranted based on the set of facts as discussed here in above. In the result , ground no. 2 raised by the revenue is dismissed. 12.6 The decision take by the bench in the ITA NO. 430/JP/2017 for A.Y. 2008-09 shall apply mutatis mundis in the following appeal of the revenue :- Name of the assessee ITA Nos. CIT(A) Date of order A.Y. M/s.SUMS Exim Pvt. Ltd. 428/JP/2017 to 429/JP/2017 CIT(A)-4, Jaipur 30-03-2017 2006-07 to 2008-09 M/s.SUMS Exim Pvt. Ltd. 860/JP/2016 to 863/JP/2016 CIT(A)-4, Jaipur 26-07-2016 2009-10 to 2012-13 M/s. S.M. Developers 431/JP/2017 to 433/JP/2017 CIT(A)-4, Jaipur 30-03-2017 2006-07 to 2008-09 Ms/s. S.M. Developers 864/JP/2016 to 867/JP/2016 CIT(A)-4, Jaipur 26-07-2016 2009-10 to 2012-13 173 ITA NO. 860/JP/2016 DCIT, CC-3,JAIPUR VS SUMS EXIM (P) LTD. 13.0 In the result, all the appeals of the revenue are partly allowed as indicated here in above. Order pronounced in the open court on 24 /04/2023. Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 24 /04/2023 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- The DCIT, Central Circle-3, Jaipur 2. izR;FkhZ@ The Respondent- M/s. Sums Exim Pvt. Ltd., Jaipur 3. vk;djvk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File (ITA No. 860 to 863/JP/2016) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar