DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2) , MUMBAI V. M/S CAPACIT'E INFRAPROJECTS LTD, MUMBAI

ITA 904/MUM/2023

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) for the assessment years 2014-15, 2015-16, and 2016-17 concerning M/s. Capacit'e Infraprojects Ltd. The primary legal issue was whether the additions made by the Assessing Officer (AO) under section 153A of the Income Tax Act, 1961, were valid in the absence of incriminating material found during the search. The CIT(A) had ruled in favor of the assessee, stating that the additions could not stand without such material, a decision supported by various judicial precedents. The Revenue's appeals were based on the argument that the AO had the authority to make such additions irrespective of the presence of incriminating material, citing different judicial interpretations. However, the Tribunal upheld the CIT(A)'s decision, referencing the lack of any incriminating evidence linked to the additions made.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125501 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2023
• Other Referred Cases: CIT Vs. Anil Kumar Bhatia, Canara Housing Development Company Vs. DCIT, Continental Warehousing Corporation Vs. All Cargo Global Logistics Vs. DCIT, Checkmate Services (P.) Ltd. Vs CIT, PCIT Vs. Abhisar Buildwell (P.) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure
• Section: 147; 145; 148; 132; 69C; 143(3); 142(1); 153A; 37(1); 143(1); 250; 274; 143(2); 139(1); 153; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.904/Mum./2023 (Assessment Year : 2014–15) ITA no.905/Mum./2023 (Assessment Year : 2015–16) ITA no.906/Mum./2023 (Assessment Year : 2016–17) Dy. Commissioner of Income Tax Central Circle–1(2), Mumbai ................ Appellant v/s M/s. Capacit’e Infraprojects Ltd. 605–607, Shrikant Chamber, Phase–I 6 th Floor, Adjacent to R.K. Studio Sion–Trombay Road, Chembur Mumbai 400 071 PAN – AAECC9463G ................ Respondent Assessee by : Shri Viraj Mehta Revenue by : Shri Manish Sareen a/w Shri Prasoon Kabra Date of Hearing – 22/06/2023 Date of Order – 27/06/2023 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the Revenue challenging the separate impugned orders of even date 02/01/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals)–47, Mumbai, [“learned CIT(A)”], for the assessment years 2014–15, 2015–16 and 2016–17. M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 2 2. Since these appeals pertain to the same assessee and involve similar issues, therefore, as a matter of convenience, these appeals were heard together and are being disposed off by way of this consolidated order. With the consent of the parties, the Revenue’s appeal for the assessment year 2014-15 is taken up as a lead case. ITA no.904/Mum./2023 Revenue’s Appeal – A.Y. 2014–15 3. In its appeal, the Revenue has raised the following grounds:– "1. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that there is nothing in the language of the provisions which would indicate that the assessment is restricted to incriminating material or the basis of the assessment would be that which is discovered during the search or during the process contemplated by Section 132A of the Income Tax Act, 1961 and that this view finds full support from the judgement of the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia, 352 ITR 493 (Del) and the judgement of the Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT, 274 CTR 122 (Kar). 2. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in placing reliance on various judicial pronouncements including in the cases of CIT Vs. Continental Warehousing Corporation, All Cargo Global Logistics Vs. DCIT, etc., without appreciating that these judgements have not been accepted by the Department and in fact, SLP filed by the Department against Bombay High Court's order in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd., has been admitted by the Hon'ble Apex Court [vide order dated 12.10.2015 in Special Leave to Appeal (C) CC 18506/2015] and is pending for adjudication 3. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the grounds of appeal raised by the assessee on the merits of the case but has merely held that the additions made by the AO in the assessment order framed u/s 153A r.w.s 143(3) of the Act cannot survive de hors the incriminating evidences.” 4. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to delete the disallowance made u/s 37(1) of the Income- tax Act, 1961 on account of unverified purchases of Rs. 2,70,47,191/-. 5. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to delete the disallowance made on account of employee's contribution to welfare funds beyond the due date without considering the fact that the Apex Court in the latest judgement in the case of Checkmate Services (P.) Ltd. Vs CIT [2022] 143 taxmann.com 178 (SC) has decided this issue in favour of the Revenue.” 4. The issue arising in grounds no.1-3, raised in Revenue’s appeal, is pertaining to the existence of incriminating material for making additions under section 153A of the Act. M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 3 5. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a public company that was incorporated on 09/08/2012. The assessee is classified as a non-government company and is registered at ROC in Mumbai. The assessee is a civil contractor and provides end-to-end construction services for residential buildings, multilevel car parking, corporate offices, and institutional buildings for the educational, hospitality, and healthcare sectors. For the year under consideration, the assessee originally filed its return of income under section 139(1) of the Act on 30/09/2014 declaring a total income of Rs.8,74,30,147. The case of the assessee was selected for scrutiny under CASS. Vide order dated 16/12/2016 passed under section 143(3) of the Act, scrutiny assessment proceedings in the case of the assessee were concluded by assessing the total income of the assessee at Rs.8,77,75,570 after making certain additions/disallowances. 6. Subsequently, search and seizure action under section 132 of the Act was conducted in the case of the assessee, its associated concerns, directors, and related persons on 20/08/2019. Accordingly, notice under section 153A of the Act was issued to the assessee on 13/10/2020. In response to the aforesaid notice, the assessee filed its return of income on 07/10/2020 declaring a total income of Rs.8,77,75,570 (i.e. equivalent to the assessed income as per the assessment order passed under section 143(3) of the Act). Thereafter, notices under section 143(2) as well as 142(1) along with a detailed questionnaire were issued and served on the assessee, which were responded to by the assessee. The Assessing Officer (“AO”) vide order dated 27/07/2021 passed under section 153A of the Act computed the total income of the assessee at Rs.11,52,58,220 after making certain additions. 7. In its appeal before the learned CIT(A), the assessee, inter-alia, raised additional ground challenging the additions made vide order passed under section 153A of the Act in the absence of incriminating material found during the course of the search. The learned CIT(A), in this regard, sought the remand report from the AO. After considering the remand report and assessee’s response thereto, the learned CIT(A), vide impugned order, decided M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 4 this issue in favour of the assessee and held that since in the year under consideration, the assessment was already concluded, the AO can make any addition under section 153A of the Act only on the basis of incriminating material found and seized during the course of the search, which aspect is absent in the present case. The relevant findings of the learned CIT(A), in this regard, are as under:- “7.5 It has been observed from the assessment order that the AO has not highlighted any incriminating material found and/or seized during the search action, which can be relatable to the appellant, based on which the impugned additions are made. The appellant, on the other hand, has emphatically stated that the impugned additions are not based on any material found/seized during the course of search action at the premises of the appellant. The appellant has also relied on a no. of judicial decisions on this issue. 7.6 On perusal of the impugned assessment order, it is evident that the AO has not referred to any seized material found during the course of search to make the impugned additions. The due date for issuing notice u/s 143(2) had already expired on the date of search or the date of issue of notice u/s 143(2) in the current proceeding, which was issued on 09.12.2020. Since, the proceedings for A.Y. 2015-16 had not abated, the contention of the appellant that the AO was empowered to make additions based on the incriminating material found and seized during the course of search operation, appears to be true, as held in a no. of judicial decisions including the decision of jurisdictional High Court. 7.7 Before proceeding further, it is necessary to apprise with the legal principles settled by Hon'ble Jurisdictional High Court and other courts on this issue. The Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation [374 ITR 645]. has held that when the assessment has attained finality, then the AO while passing the independent assessment order u/s 153C of the Act can't disturb the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s 132 of the Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of search operation. 7.8 to 7.15 ............. 7.16 Conclusion- The aforesaid detailed discussion with respect to various Judicial decisions clearly laid down the following principles- (i) the assessments which have been concluded u/s 143(3) of the Act and not pending at the time of search proceedings, do not abate. (ii) for this purpose, intimation u/s 143(1) would constitute an assessment, relying on the decision of Hon'ble Bombay High Court in CIT v/s Gurinder Singh Bawa (79 taxmann.com 398). (iii) the proceedings u/s 153A/153C of the Act do not empower the Assessing officer to re-adjudicate the settled issues again, unless fresh incriminating material is found during the course of search proceedings. (iv) the Assessing officer does not have jurisdiction to make additions / disallowances which are not based on any incriminating material found during the course of search proceedings. M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 5 (v) in the case of completed/un-abetted assessments, where no incriminating material is found during the course of search, the assessment u/s 153A/153C of the Act is to be made on originally assessed/returned income and no addition or disallowance can be made de hors the incriminating evidences recovered during the course of search. (vi) Any admission or confession needs corroboration with evidences. In order to make a genuine and legally sustainable addition on the basis of admission or confession during search action, it is necessary that some incriminating material must have been found to correlate the undisclosed income with such statement. (vii) Any statement recorded under section 132(4) cannot be considered as incriminating material found in the course of search as these are recorded to elicit more information/explanation of the search person on the incriminating documents/gold/jewellery found during search. 7.17 Conclusion-As stated above, the AO has not brought on record either through the assessment order or through remand report any incriminating document or material found or seized during the Search and Seizure action u/s 132 of the Act in the group cases which can be connected with these additions. Considering the totality of the facts and circumstances, I am of the considered view that these additions cannot survive de hors the incriminating evidences as held in the above binding judicial decisions. The AO is accordingly directed to delete the impugned additions made in the assessment order. Thus, the additional ground of appeal no. 7 is allowed.” Being aggrieved, the Revenue is in appeal before us. 8. We have considered the submissions of both sides and perused the material available on record. In the present case, it is undisputed that the scrutiny assessment under section 143(3) of the Act was already concluded vide order dated 16/12/2016 in the case of the assessee. Thus, on the date of search and seizure action under section 132 of the Act, i.e. 20/08/2019, no assessment for the year under consideration was pending and therefore the same was not abated as per the second proviso to section 153A of the Act. From the perusal of the order passed under section 153A of the Act, we find that the AO made three additions/disallowances. We find that two additions/disallowances were made on account of unverified purchases on the basis of verification of data available on the ITBA/ITD database. While the third addition was made on the basis of the perusal of details regarding the delayed payment of employees’ contributions to the Provident Fund and ESIC. Therefore, it is discernible that none of these additions are based on the material found during the course of the search in the case of the assessee, its associated concerns, directors, and related persons. We find that even in its remand report, the AO did not highlight the existence of any incriminating M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 6 material found during the course of the search to support the addition made in the hands of the assessee vide order passed under section 153A of the Act. For reference, the remand report filed by the AO, which is taken note of in para 7.2 of the impugned order, is reproduced as under:- “7. The assessee had contended that the assessments were already made in the case of the assessee for these assessment years and that additions made in the assessment order passed u/s 153A of the Act are not on the basis of any incriminating material/ evidences found during the course of search, ergo, these orders are bad in law. 8. The argument made by the assessee is not acceptable. The disallowances in the assessment order u/s 153A of the Act passed for A.YS. 2014-15, 2015-16 and 2016-17 were made in the light of facts and legal position narrated therein. As far as the issue of these disallowances being not based on incriminating material seized during the course of search is concerned, the language of section 153A of the Act is very much clear and unambiguous. While the triggering point may be the search, but the notice that is contemplated by section 153A and which is mandatory requires the Assessing Officer to assess the income of six years. That is independent of the search. The mandate is to issue the notice for six assessment years. The assessment or reassessment is of the total income of the assessee disclosed or undisclosed and pertaining to these six years. There is nothing in the language of the provisions which would indicate that the assessment is restricted to incriminating material or the basis of the assessment would be that which is discovered during the search or during the process contemplated by section 132A of the IT Act. 9. Reliance in this regard is placed on the judgement of Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia, 352 ITR 493 (Del). The relevant portion of this judgement is reproduced herein under: “10. Section 1534 of the Acts start with a non obstante clause. The fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sumction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 145 has also been excluded in a case covered by Section 153A, the time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153,4 has been entrusted with the duty of bringing to lax the total income of an assessee whose case is covered by a Section 153,4, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section14301) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedmas and reassess the total income taking note of the undisclosed income, ifany, unearthed during the search After such reopening of the assessment, the Assessing Officer is empowered to assess or reassess the total income of the aforesaid years. The condition) precedent for application of Section 15374 is there should be a search under Section 132. Initiation of proceedings under Section 153,4 is not dependent on any undisclosed income being unearthed during such search. The proviso to the aforesaid section makes it clear the assessing officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. If any assessment proceedings are pending within the period of six assessment years M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 7 referred to in the aforesaid sub-section on the date of initiation of the search under Section 132, the said proceeding shall abate. If such proceedings are already concluded by the assessing officer by initiation of proceedings under Section 153.4, the legal effect is the assessment gets reopened. The block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153.4, however, the Assessing Officer has been given the power to assess or reassess the total income" of the stx assessment years in question in separate assessment orders. The Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 1534, by even making reassessments without any letters. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. When once the proceedings are initiated under Section 153A of the Act, the legal effect is even in case where the assessment order is passed it stands reopened. In the eye of law there is no order of assessment. Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order." 10. This view finds full support from the judgement of the Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT, 274 CTR 122 (Kar), wherein, the stand taken by the Delhi High Court in its judgement cited supra, was endorsed. 11. The assessee has placed reliance on various judicial pronouncements including in the cases of CIT Vs. Continental Warehousing Corporation (2015) 58 taxmann.com 78 (Bom), All Cargo Global Logistics Vs. DCIT 137 ITD 287 (SB) (Mum), etc. In these cases, it has been held that no addition can be made in respect of assessments which have become final if no incriminating material is found during search or during 153C proceedings. However, these judgements have not been accepted by the Department. In fact, SLP filed by the department against Bombay High Court's order in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd., has been admitted by the Hon'ble Apex Court [vide order dated 12.10.2015 in Special Leave to Appeal (C) CC 18506/20 1 5] and is pending for adjudication. In the light of the facts and legal position narrated hereinabove, it is humbly submitted that the assessments u/s 153A of the Act in the case of M/S. Capacite Infraprojects Ltd. for the abovementioned assessment years have been made in accordance with the provisions of law.” 9. We find that the learned CIT(A), vide impugned order, inter-alia followed the decision of the Hon’ble jurisdictional High Court in CIT v/s Continental Warehousing Corporation (Nhava Sheva) Ltd., (2015) 374 ITR 645 (Bom.), wherein it was held that no addition can be made in respect of assessments which have become final if no incriminating material is found during the search. We further find that recently the Hon’ble Supreme Court affirmed this M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 8 position in PCIT v/s Abhisar Buildwell (P.) Ltd., [2023] 149 taxmann.com 399 (SC), by observing as under:- “14. In view of the above and for the reasons stated above, it is concluded as under: i) to iii) ........ iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved.” 10. Since, in the present case, it is undisputed that the assessment year under consideration is an unabated/concluded year, therefore, we find no infirmity in the impugned order deleting the additions made by the AO in the absence of incriminating evidence found during the course of the search. As a result, grounds no.1-3 raised in Revenue’s appeal are dismissed. 11. In view of aforesaid findings, grounds no.4 and 5, raised in Revenue’s appeal, are rendered infructuous and therefore are dismissed. 12. In the result, the appeal by the Revenue for the assessment year 2014- 15 is dismissed. ITA no.905/Mum./2023 Revenue’s Appeal – A.Y. 2015–16 13. In its appeal, the Revenue has raised the following grounds:– "1. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that there is nothing in the language of the provisions which would indicate that the assessment is restricted to incriminating material or the basis of the assessment would be that which is discovered during the search or during the process contemplated by Section 132A of the Income Tax Act, 1961 and that this view finds full support from the judgement of the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia, 352 ITR 493 (Del) and the judgement of the Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT, 274 CTR 122 (Kar). 2. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in placing reliance on various judicial pronouncements including in the cases of CIT Vs. Continental Warehousing Corporation, All Cargo Global Logistics Vs. DCIT, etc., without M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 9 appreciating that these judgements have not been accepted by the Department and in fact, SLP filed by the Department against Bombay High Court's order in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd, has been admitted by the Hon'ble Apex Court [vide order dated 12.10.2015 in Special Leave to Appeal (C) CC 18506/2015) and is pending for adjudication 3. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the grounds of appeal raised by the assessee on the merits of the case but has merely held that the additions made by the AO in the assessment order framed u/s 153A r.w.s 143(3) of the Act cannot survive de hors the incriminating evidences. 4. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to delete the disallowance made w/s 37(1) of the Income- tax Act, 1961 on account of unverified purchases of Rs.12,42,36,888/-. 5. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO. delete the to disallowance made w/s 37(1) of the Income- tax Act, 1961 on account of unverified sub- contract expenses of Rs.34,28,598/-. 6. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the 4.0. delete the to disallowance made us 37(1) of the Income- tax Act, 1961 on account of unverified sub- contract expenses of Rs.64,20,793/- on protective basis without first deciding the appeal on substantive addition made in the hands of M/s Bhupati Infrabuild Services Pvt Ltd. 7. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to delete the disallowance made on account of employee's contribution to welfare funds beyond the due date without considering the fact that the Apex Court in the latest judgement in the case of Checkmate Services (P.) Ltd. Vs CIT [2022] 143 taxmann.com 178 (SC) has decided this issue in favour of the Revenue.” 14. In the assessment year 2015-16 also we find that on the date of the search and seizure action under section 132 of the Act on 20/08/2019, the assessment under section 143(3) of the Act was already completed on 16/08/2017. Therefore, no assessment for this year was pending on the date of search and thus the same is also not abated as per the second proviso to section 153A of the Act. We further find that vide order dated 27/07/2021 passed under section 153A of the Act the additions made by the AO are not based on any incriminating material found during the course of the search rather the same are either based on pre-search/post-survey enquiries, perusal of information available on ITBA/ITD database or information already available on record in terms of delayed payment of employee’s contribution to Provident Fund/ ESIC. Further, it is pertinent to note that the remand report furnished by the AO, as sought during the appellate proceedings before the learned CIT(A), is common for all the assessment years under consideration, which as noted above does not highlight the existence of any incriminating material M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 10 found/seized during the course of search. Thus, in view of the above, our findings/conclusion rendered in Revenue’s appeal for the assessment year 2014-15 shall apply mutatis mutandis to the present appeal. Accordingly, grounds no.1-3 raised in Revenue’s appeal are dismissed. 15. In view of aforesaid findings, grounds no.4-7, raised in Revenue’s appeal, are rendered infructuous and therefore are dismissed. 16. In the result, the appeal by the Revenue for the assessment year 2015- 16 is dismissed. ITA no.906/Mum./2023 Revenue’s Appeal – A.Y. 2016–17 17. In its appeal, the Revenue has raised the following grounds:– "1. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating the fact that there is nothing in the language of the provisions which would indicate that the assessment is restricted to incriminating material or the basis of the assessment would be that which is discovered during the search or during the process contemplated by Section 132A of the Income Tax Act, 1961 and that this view finds full support from the judgement of the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia, 352 ITR 493 (Del) and the judgement of the Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT, 274 CTR 122 (Kar). 2. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in placing reliance on various judicial pronouncements including in the cases of CIT Vs. Continental Warehousing Corporation, All Cargo Global Logistics Vs. DCIT, etc., without appreciating that these judgements have not been accepted by the Department and in fact, SLP filed by the Department against Bombay High Court's order in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd., has been admitted by the Hon'ble Apex Court [vide order dated 12.10.2015 in Special Leave to Appeal (C) CC 18506/2015] and is pending for adjudication. 3. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not deciding the grounds of appeal raised by the assessee on the merits of the case but has merely held that the additions made by the AO in the assessment order framed u/s 153A r.w.s 143(3) of the Act cannot survive de hors the incriminating evidences. 4. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO to delete the disallowance made us 37(1) of the I.T.Act on account of unverified purchases of Rs.14,49,12,290/-. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O to delete the disallowance made u/s 37(1) of the Income- tax Act, 1961 on account of unverified sub- contract expenses of Rs.2,82,92,430/- on protective basis without first deciding the appeal on substantive addition made in the hands of M/s Bhupati Infrabuild Services Pvt Ltd. M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 11 6. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. delete the to disallowance made us 37(1) of the Income- tax Act, 1961. on account of unverified sub- contract expenses of Rs. 2,97,27,657/-. 7. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. delete the 10 disallowance made u/s 37(1) of the Income- tax Act, 1961. on account of unallowable educational expenses claimed of Rs.42,00,762/–. 8. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O. to delete the addition made u/s 69C of the Income-tax Act, 1961 on account of unexplained expenditure of Rs. 58.31,600/-. 9. In the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in directing the A.O. to delete the disallowance made u/s 40A(2)(a) of the Income-tax Act, 1961 on account of excessive and unreasonable expenses of Rs. 11,94,445/-. 10. In the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O to delete the addition made u/s 23(1) rows. 23(4) of the Income-tax Act 1961 on account of deemed rent of Rs. 4,69,700/-.” 18. It is undisputed that the assessment year 2016-17 is also a case of concluded/unabated assessment. Further, the Revenue could not highlight the existence of any incriminating material to make the additions vide order passed under section 153A of the Act. Therefore, in view of the above, our findings/conclusion rendered in Revenue’s appeal for the assessment year 2014-15 shall apply mutatis mutandis to the present appeal. Accordingly, grounds no.1-3 raised in Revenue’s appeal are dismissed. 19. In view of aforesaid findings, grounds no.4-10, raised in Revenue’s appeal, are rendered infructuous and therefore are dismissed. 20. In the result, the appeal by the Revenue for the assessment year 2016- 17 is dismissed. 21. To sum up, all the appeals by the Revenue are dismissed. Order pronounced in the open Court on 27/06/2023 Sd/- PRASHANT MAHARISHI ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 27/06/2023 M/s. Capacit’e Infraprojects Ltd. ITAs no.904, 905 & 906/Mum./2023 Page | 12 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai