Springbok Properties P Ltd, Indore V. ACIT,Central Circle-1, Indore

ITSSA 117/Ind/2021

AI Insights

The case involves Springbok Properties Pvt. Ltd., which appealed against the additions made by the Assessing Officer (AO) under sections 68 and 69C of the Income Tax Act, following a search and seizure operation. The AO had added amounts as unexplained cash credits and disallowed interest expenses, suspecting the transactions to be mere accommodation entries. The Tribunal examined the merits of the case, including the identity and creditworthiness of the creditors, the genuineness of the transactions, and the legal provisions under sections 153A and 132 of the Act. The Tribunal concluded that the additions were not justified as the assessee had proved the genuineness of the transactions and the AO had not provided any incriminating material to support the additions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130879 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-03-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 21-07-2021
• Other Referred Cases: CIT vs. Kabul Chawla, Pr. CIT vs. Gahoi & Oil Mills and Ors., Pr. CIT vs. Great Galleon Ventures Ltd., Pr. CIT vs. Kurele Paper Mills Pvt. Ltd., Pr. CIT vs. Meeta Gutgutia, Pr. CIT vs. Devangi alias Rupa, Pr. CIT vs. IBC Knowledge Park P. Ltd., Pr. Commissioner of Income Tax vs. Saumya Construction Pvt. Ltd., Pr. Commissioner of Income Tax vs. Abhisar Buildwell Pvt. Ltd., Pr. Commissioner of Income Tax vs. Jayaben Ratilal Sorathia, Pr. Commissioner of Income Tax vs. Mahesh Kumar Gupta, Pr. Commissioner of Income Tax vs. Ram Avtar Verma, Pr. Commissioner of Income Tax vs. Dayawanti Gupta
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained expenditure; Gift; Income from undisclosed sources; Search and seizure; Principle of natural justice; Rule of consistency; Source of fund; Question of law; Tangible material; Validity of assessment; Accommodation entries; Block assessment; Onus to prove; Retraction; Revised return; Documents seized; Reassessment proceedings; TDS; CHAPTER XIVB; Bogus
• Section: 147; 148; 63; 132; 69C; 139; 143(3); 153A; 260A; 139(5); 292BB; 251; 139(1); 64; 113; 43; 48; 13; 153; 22; 153C; 20

Judgement Text

Page 1 of 68 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER IT(SS)A No.117 to 119/Ind/2021 (Assessment Years:2016-17 to 2018-19) Springbok Properties Pvt. Ltd. 4 th Floor BPK Star Towar Above Shoppers Stop, Indore Vs. ACIT (Central)-1 Indore (Appellant / Assessee) (Respondent/ Revenue) PAN: AADCS 5974 R Assessee by Shri V.N. Dubey, and Shri Idrahim Kannodwala, ARs Revenue by Shri P.K. Mishra, CIT- DR Date of Hearing 02.03.2023 Date of Pronouncement 17.05.2023 O R D E R Per Vijay Pal Rao, JM: These three appeals by the assessee are directed against the composite order of Commissioner of Income Tax(Appeal) dated 19.03.2021 for Assessment Years 2016-17 to 2018-19 respectively. The assessee has raised common grounds in these appeals except the quantum of additions, the grounds raised for A.Y. 2016-17 are reproduced as under: “1. That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) - 3 Bhopal, grossly erred in confirming the addition under observation that the A.O was justified to make addition of Rs. 2,72,54,290/- (Rs.2,45,50,000/- plus interest IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 2 of 68 Page 2 of 68 amount of Rs.27.04,290/-) u/s 68 and 69C of the Act, as unexplained cash credit wrongly treating the same as undisclosed income. 2. Notice issued u/s 153A is bad in Law. That the learned Commissioner of Income Tax (Appeals), erred in dismissing the ground under observation that "once the Assessee has been put to notice and has filed return in response to the notices and has attend the assessment proceedings and the Assessee has participated in assessment proceeding before the A.O the appellant cannot claim that issue of notice u/s 153A is not in order" without appreciating that the appellant has filed the return under protest without prejudice to the provisions of section 292BB and other applicable provisions of the Income Tax Act. 3. That the learned Commissioner of Income Tax (Appeals), erred in dismissing the ground "Notice issued u/s 153A is bad in Law" under observation "that during the search and seizure operation books of account, document, loose papers etc were seized" and "the seized documents and papers are the incriminating material on the basis of which the additions have been made" without appreciating that AO is not able to pin point any incriminating material and the documents under question are audited Balance sheet, Profit & loss account, vouchers, invoices, Bank statement and books of accounts forming part of regular books of accounts/records and no discrepancy is found/pointed out by the AO in respect of declaring such documents as incriminating. 4. Confirming the addition of Rs.2,72,54,290/- (Rs. 2,45,50,000/- plus Rs.27.04.290/- by the Hon'ble CIT(A)) as Unexplained Cash Credit u/s. 68 and disallowance of interest expenses u/s 69C of the Act. That the learned Commissioner of Income Tax (Appeals) - 3 Bhopal erred in confirming the addition of Rs. 2,45,50,000/- as unexplained cash credit under section 68 of the Act, under observation that unsecured loans received from Moriya Merchandise Pvt Ltd (a group concern) converted into share capital and disallowance of Rs. 27,04,290/- on account of interest payment on such loan without appreciating that the appellant had proved the identity of the loan creditors, their credit worthiness and genuineness of the transaction by submitting complete documentary proof and evidence substantiated the same in relation to section 68 and 69C of the act, therefore confirming the addition made merely on the basis of presumption and surmises without any incriminating material was not justified, therefore addition may be deleted. 5. That the learned Commissioner of Income Tax (Appeals) erred in even confirming the addition of Rs. 2,72,54,290/- as unexplained share capital u/s. 68 of the Act without appreciating that the IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 3 of 68 Page 3 of 68 conversion of loan taken after charging interest and TDS thereon into share capital during the year against the loan taken from the group / associate company namely Moriya Merchandise Pvt Ltd. 6. That Learned CIT (A) erred in confirming the addition of entire receipt of loan from a company, by relying on certain statements, reports and material without confronting the appellant with the same, thus principle of natural justice is violated. 7. That the Learned CIT (A) failed to appreciate that the loan received from a Company was utilised for the acquisition of immovable property and the appellant company allotted equity share after charging interest & TDS thereon during the financial year 2015-16 and the transaction under question was reflected in the regular books accounts of the appellant Company as well as in the books of accounts of the lender company. Hence the addition and disallowance made u/s 153A of the Act, unwarranted and unjustified. 8. That the learned Commissioner of Income Tax (Appeals) erred in evading the facts and evidences available on record that the transaction entered by the appellant with the company of the group/associate are genuine and in support appellant filed copy of the Bank statement along with the Balance Sheet and the Profit & Loss Account, the ITR acknowledgement loan confirmation and source of source of the concerned group company and fully substantiated the transaction as regards its identity, genuineness as well as creditworthiness of the loan creditor. 9. That the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 2,72,54,290/- as unexplained cash credit u/s. 68 of the Act, by evading the fact that the addition made by A.O (u/s 143(3) r.w.s 153A of the Act) is merely on the basis of presumptions without having any incriminating material found during the course of search and even there after (either during the course of investigation post search or during course of assessment proceeding). 10. That the learned Commissioner of Income Tax (Appeals) erred in confirming the additions made by A.O merely to justify the unwarranted search and seizure operations conducted on the various entities of the group on 14.11.2017 merely on presumptions without any justification and further failed to appreciate that the provision of section 115BBE (2) is applicable from 1.04.2017 i.e for the financial year 2016-17 corresponding to the assessment year 2017-18 and not for the prior financial year. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 4 of 68 Page 4 of 68 2. The assessee company is engaged in the business of Real Estate and owns primarily commercial properties in the Indore City. The assessee filed its return of income u/s 139(1) of the Act from 1 st October 2016 declaring total income of Rs.76,14,000/-. Thereafter search and seizure operation u/s 132 was conducted on 14.11.2017 in the premises of the assessee company. Pursuant to the search and seizure action the AO issued notice u/s 153A on 05.02.2019. In response to that the assessee filed the return of income declaring the income as declared in the original return of income filed u/s 139(1) of the Act. During the course of assessment proceedings the AO observed that the assessee has received huge amount of unsecured loans from various companies having common address as 106A, Shyam Bazar Street, Kolkata. Since most of these companies from whom the alleged unsecured loan was received by the assessee have meager business activities and making investment in the shares of similar paper companies therefore, the AO doubted the genuineness of the claim of unsecured loan shown by the assessee in the books of account and particularly in the balance sheet of the assessee. The AO has reproduced the statements of Shri Anand Kumar Kedia recorded u/s 132(4) on 16.11.2017 and observed that the entire modus operandi of routing unaccounted funds have been lucidly described and admitted by the promoter of the assesse company as well as other group companies including Associated Alcohols & Breweries Ltd. (AABL). Since the statement recorded u/s 132(4) of Shri Anand Kumar Kedia was in respect of M/s. Mount Everest Breweries (MEBL) was considered by the AO as a confession for the bogus transactions of unsecured loan for the entire group companies including the assessee under consideration. The AO while passing the order u/s 153A r.w.s. 143(3) has made addition of Rs.2,45,50,000/- u/s 68 r.w.s. 115BBE as well as on account of disallowance of interest on these loans amounting to Rs.27,04,290/-. The assessee challenged the action of the AO before Ld. CIT(A) and raised issue of validity of addition made by the AO while passing assessment order u/s 153A in absence of any incriminating material fond or seized IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 5 of 68 Page 5 of 68 during the course of search. The ld. CIT(A) dismissed the legal issue raised by the assessee against the validity of assessment order passed u/s 153A. 3. On merits Ld. CIT(A) has partly deleted the addition to the extent of Rs.3,24,333/- and Rs.2,452/- for the A.Y.2017-18 & 2018-19. However, addition made by the AO for A.Y. 2016-17 was confirmed by the Ld. CIT(A). 4. Before the Tribunal the Ld. AR of the assessee has submitted that the unsecured loan was taken by the assessee from group companies the registered address of all the group companies is the same as the said building bearing 106A, Shyam Bazar Street, Kolkata belong to the assessee group and therefore having common address of all the group concerns cannot be reason for doubting transactions of unsecured loans between the group concerns. The AO treated the group concerns as shell companies on the ground that having meager business and income to justify the investment being unsecured loan to the assessee. 5. Ld. Counsel for the assessee has vehemently contended that the addition has been made by the AO in the proceedings u/s 153A without any incriminating material found or seized during the course of search and seizure action. All the facts and transactions are duly recorded in the books of account and available with the AO. He has referred to the relevant record filed in paper book and submitted that the assessee has given all the details regarding unsecured loan taken from Moriya Merchandise Pvt. Ltd. of Rs.2,45,50,000/- and produced the documents like loan confirmation, Income Tax acknowledgement, Balance Sheet and profit and loss account, ledger account and bank statement for the F.Y. 2015-16 relevant to the assessment year under consideration. These transactions are not only recorded in the books of the assessee but also recorded in books of the loan creditor, which is a group concern of the assessee. He has further contended that assessee has also produced entire record of the investment made by the lender company in various other companies and subsequently those investments were IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 6 of 68 Page 6 of 68 sold/transferred and as such the assessee has proved the source of funds regarding unsecured loan in question. Thus, the assessee has discharged the primary onus to prove the identity and creditworthiness of the creditors which is a group concern of the assessee as well as genuineness of the transactions. The source of the said loan given by the Group company M/s Moriya Merchandise Pvt. Ltd. was also explained along with relevant evidence regarding the sale of various investment made by the lender company. Even the AO collected the affidavit/confirmation of such investment sale transactions. The entire transaction was through banking channels and therefore the assessee has proved without any doubt with supporting evidence the creditworthiness of the loan creditors and genuineness of the transactions. Ld. AR has further submitted that the AO has made addition on the basis of surmises and conjectures without bringing any material or evidence to show that the transactions are tented or doubtful much less the bogus. He has pointed out that the addition was made on protective basis in the hands of the group company subsequently assessee issued shares to the credit concerns for advance repayments of the unsecured loans. This issuance of the shares of the assessee has not been doubted by the AO or the Ld. CIT(A) but the transactions of loan has been treated as bogus transactions and made addition u/s 68 of the Act r.w.s. 115BBE. Ld. AR has submitted that when there was no incriminating material found during the search and seizure operation then the addition made by the AO on the basis of presumption is not justified and liable to be deleted. 6. Rather the addition was made by the AO on the basis of entries in the regular books of account reflected in the assesse’s financial accounts. He has relied upon the judgment of Hon’ble Delhi High Court in case of CIT vs. Kabul Chawla 380 ITR 573 (Delhi) and submitted that when the assessment was already completed and not pending as on the date of search then the AO can make assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 7 of 68 Page 7 of 68 the course of search. He has referred to the judgment of Hon’ble jurisdiction High Court in the case of Pr. CIT vs. Gahoi & Oil Mills and Ors. 272 Taxman 522 (MP) and submitted that Hon’ble jurisdictional High Court has concurred with the view of Hon’ble Delhi High Court in case of Kabul Chawla (supra) and held that in absence of any incriminating material the AO has no jurisdiction to make addition u/s 153A of the Act. He has also relied upon the judgment dated 02.02.2023 of Hon’ble jurisdictional High Court in case of Pr. CIT vs. Great Galleon Ventures Ltd. Appeal No.222 of 2022 wherein the Hon’ble High Court has relied its earlier decision and held that in the absence of any incriminating material AO has no jurisdiction to make addition u/s 153A of the Act. 7. He has then relied upon the judgment of Hon’ble Delhi High court in case of Pr. CIT vs. Kurele Paper Mills Pvt. Ltd. 380 ITR 571 (Delhi) and submitted that the Hon’ble High Court has held that the Ld. AO was not justified in invoking the provisions of section 68 of the Act when there was no incriminating material found during the course of search. He has then relied upon the decision of the Coordinate Bench of this Tribunal in the matter of group concern of the assessee namely M/s Mount Everest Breweries Ltd. vs. ACIT in ITANo.59 to 61/Ind/2021 and IT(SS)A No.68 to 70/Ind/2021 and submitted that in identical facts and circumstances the Tribunal has considered and decided the legal issue of addition made in absence of incriminating material found during the course of search as well as on merits of the addition. He has then relied upon the decision of Delhi Bench of this Tribunal dated 27.11.2020 in case of ACIT vs. Moon Beverages ltd. and others in ITA Nos. 115 to 118/Del/2018 and others and submitted that the Tribunal has held statements recorded u/s 132(4) does not construed as incriminating material and therefore in the absence of any incriminating material addition made by the AO is not justified. 8. As regards the interest disallowance made by the AO Ld. AR has submitted that this is consequential disallowance and assessee has paid the interest after TDS in accordance with provisions of law. Thus, the Ld. AR has submitted that the addition made by the AO is neither justified on IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 8 of 68 Page 8 of 68 the legal ground in absence of jurisdiction for want of incriminating material found during the search nor on the merits as the assessee has discharged its onus to prove the identity and creditworthiness of the creditors as well as genuineness of the transactions. 9. On the other hand, Ld. DR has submitted that the statement of the promoter of the group concerns has an evidentiary value and would construed incriminating material for the purpose of assessment u/s 153A of the Act. The Addition has been made on the basis of the record as several companies are part of the list of paper companies as per investigation carried out by the Department. Ld. DR has referred to the statement of Shri Anand Kumar Kedia recorded u/s 132(4) of the Income Tax Act and submitted that the promoter of all these group companies has admitted the fact that unaccounted income of the group concern is routed back in the shape of unsecured loan. In reply question no.46 to 48 Mr. Anand Kumar Kedia has admitted that the group has acquired three companies through which these investments were received in the other group companies to the tune of Rs.45.11 crores. Thus, it is a clear case of receiving funds from its own shell companies. The arrangement has been made by the assessee for routing its funds by forming of shell companies which in turn make investment within the group companies and ultimately relinquish the same to other shell companies and then providing these funds to the assessee in shape of unsecured loan. The AO has given the lists of companies having tented past record operated by the entry operator namely Shri Pankaj Agrawal. Though the assessee retracted the statement record u/s 132(4) which was duly dealt with by the AO in para 17.1 of the assessment order. The retraction by shri Anand Kumar Kedia was attempted after more than two years from statement recorded u/s 132(4) therefore, in view of the judgment of Hon’ble Supreme Court in case of Bannalal Jat Construction Pr. Ltd. vs. ACIT 106 taxmann.com 128(SC) whereby the order of the Hon’ble High Court has been upheld and SLP filed by the assessee was dismissed. The assesse is required to establish that the statement made by the Director was wrong IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 9 of 68 Page 9 of 68 and such retraction had to be supported by a strong evidence showing that earlier statement was recorded under duress and coercion. In absence of any allegation of any duress and coercion at time of recording the statement u/s 132(4), subsequent retraction cannot be accepted. The AO has referred various decisions of the Hon’ble Supreme Court on the evidentiary value of the statement recorded during the search u/s 132(4) of the Act. He has relied upon the orders of the authorities below. 10. In rejoinder the Ld. AR has submitted that the entire order of the AO is based on the suspicion having no tangible material to show that transactions are bogus or only paper entries whereby the assessee has brought its own unaccounted income in the shape of unsecured loan. He has further submitted that loan creditors are subjected to scrutiny assessment for past several years and therefore their identity, creditworthiness cannot be doubted. He has pointed out that retraction in the case of the assessee is within five days from the statement. 11. We have considered the rival submission as well as relevant material on record. In pursuant to the search and seizure operation conducted on 14.11.2017 the AO issued notice u/s 153A for A.Y. 2012-13 to 2017-18 on 05.02.2019. The assessment for the Assessment year 2016-17 was not pending as on the date of search i.e. 14.11.2017. This fact is not in dispute that assessment for the assessment year 2016-17 has not got abated by virtue of search and seizure action u/s 132 of the Act. The only allegation of the AO in the assessment order that during the course of assessment proceedings it was found that the registered office of the assessee company was shown as 106A, Shyam Bazar Street, Kolkata which is a common address for around 30 companies which are group concerns or associate companies of the assessee company part of associated Alcohol Group. Ld. AR has specifically explained that this building bearing no.106A, Shyam Bazar Street, Kolkata belongs to the assessee group and therefore all the group concerns as well as associated concern of the assesse group are having their registered office in the same building therefore, there is nothing wrong or unusual in having a common IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 10 of 68 Page 10 of 68 address of registered office of various group concerns. The second observation of the Ld. AO is that most of the associate concern of the assessee have meager business activities and/or making investment in shares of the similar companies which AO terms as paper companies but there is no material much less tangible material found during the search to show that the associate concerns of the assessee are only paper company. 12. Ld. AR has produced before us the assessment orders of all the associate companies and particularly the loan creditors wherein the department has not question existence of those companies and their business activities. It is also not in dispute that all the transactions of loan and particularly for the assessment year 2016-17 are duly recorded in the books of account and therefore it is not the case of the revenue that these transactions were first time detected/unearthed during the course of search and seizure action. 13. In fact except the statement recorded u/s 132(4) of Shri Anand Kumar Kedia the Ld. AO has not referred any material or evidence in the assessment order which could reveal that the transactions of unsecured loans recorded in the books of account are bogus transactions are in the nature of accommodation entries as a result of assessee’s own unaccounted fund routed back in the shape of unaccounted loan. The details of the loan taken by the assesse for A.Y. 2016-17 to 2018-19 are as under: Details of Loan taken A.Y. 2016-17 PARTY NAME Op. Balance as on 1.04.2015 Recd. During the Year Interest paid during the year Mode of repayment by allotment of Share TDS deducted Cl. Balance year end as on 31.03.2016 IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 11 of 68 Page 11 of 68 MORIYA MERCHANDISE PVT. LTD. 0.00 2,45,50,000 27,04,290 2,69,61,000 2,70,429 22,861 Un-secured Loan Details A.Y. 2017-18 PARTY NAME Op. Balance as on 1.04.2016 Recd. During the Year Interest paid during the year net of TDS Mode of repayment by Issuance of Share Mode of repayment Through Bank Cl. Balance year end as on 31.03.2017 VENEERS MERCANTILES PVT. LTD. 0 500000 1644 0 0 501644 SAFFRON PLANTATION PVT. LTD. 0 1100000 3616 0 0 1103616 VENKATESHWARA INVESTMENT & FINANCE PVT. LTD. 421896 (DEBIT BALANCE) 700000 20632 0 0 298736 SNEHSIL HIRISE PVT. LTD. 0 2650000 8712 0 0 2658712 MORIYA MERCHANDISE PRIVATE LTD 22861 0 2736 0 0 25597 Un-secured Loan Details A.Y. 2018-19 PARTY NAME Op. Balance as on 1.04.2017 Recd. During the Year Interest paid during the year Mode of repayment by allotment of Share Mode of repayment Through Bank channel Cl. Balance as on 31.03.2018 Veneers Mercantiles Pvt. Ltd. 5,01,644 84 47,525 5,44,500 0 0 Saffron Plantation Pvt Ltd 11,03,616 189 1,04,550 11,97,900 0 0 Snehsil Hirise Pvt Ltd 26,58,712 112 251885 28,85,520 0 0 IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 12 of 68 Page 12 of 68 Venkateshwar Investment & Finance Pvt 2,98,736 0 0 0 2,98,736 0 Moriya Merchandise Pvt Ltd 25,597 0 2,425 0 28,022 0 TOTAL 45,88,305 385 4,06,385 46,27,920 326758 0 14. Further the AO has referred the list of various entities which were found to be involved in providing accommodation entries in the nature of unsecured loan, share application money etc. The said list was taken by the AO as a result of investigation done by the department but the transactions as recorded by the assesse in the books of account between the group concerns are not part of the so-called tented list of entities involved in providing accommodation entries. Thus, it is clear that except the statement recorded in section 132(4) of the Act there is nothing on record to show that the unsecured loan taken by the assessee from group concerns are bogus transactions in the nature of accommodation entries to bring the assessee own unaccounted income back in the shape of unsecured loans. It is pertinent to note that when no incriminating material found during the course of search and seizure action to reveal any undisclosed income and particularly the bogus transaction of unsecured loan the jurisdiction of the AO to frame the assessment u/s 153A in respect of complete assessment not pending as on the date of search and thereby is unabated assessment is limited to reiterate the original assessment. The AO has taken all these details of unsecured loan taken by the assessee from books of account and particularly from the balance sheet of the assessee. Therefore, no new information or material was either found or gathered in respect of these transactions during the course of search and seizure proceedings. Once there was no incriminating material found during the course of search and seizure action disclosing any undisclosed income of the assessee and assessment for assessment year under consideration i.e. 2016-17 has not got abated by virtue of search then the AO though is under obligation to reassess the total income of the assessee cannot make an addition which is not based on any incriminating material found during the course of search and seizure action. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 13 of 68 Page 13 of 68 15. Though the Assessing Officer is bound to reassess total income of the assessee, once a search and seizure u/s 132 is conducted however, reassessment in pursuant to the search does not mean that Assessing Officer has jurisdiction to make made the addition to the total income declared by the assessee in the absence of any incriminating material. There were series of judgment of Hon’ble High Courts on this point holding that the AO cannot make addition while framing the assessment u/s 153A in respect of the assessment year which were not abated by virtue of search in absence of any incriminating material. The Hon’ble Rajasthan High Court in case of Jai Steel India vs. ACIT 219 taxman.com 223 had occasion to consider this issue in para 22 to 30 as under: “The learned counsel vehemently submitted, in contradistinction to the provisions of Chapter XIVB of the Act, that the assessment as envisaged under provisions of Section 153A of the Act is no more assessment of 'undisclosed income' as was the case under Chapter XIVB and, therefore, it is open for an assessee to claim a new deduction while filing return under Section 153A of the Act, which deduction was not claimed under the regular assessment; the assessment proceedings under Section 153A of the Act are de novo assessment proceedings and irrespective of any claim pertaining to income, expenditure or deduction made in the original assessment proceedings, the assessee or AO is free to determine/claim the same in the assessment proceedings under Section 153A of the Act; for six assessment years, for which, a notice under Section 153A(1)(a) of the Act has been issued and a return has been furnished, the AO was bound to assess the 'total income' of six assessment years immediately preceding the assessment year relevant to the previous year, in which, such search is conducted or requisition is made and, therefore, once the requirement of Section 153A(1)(b) of the Act is to assess the 'total income' in contradistinction to 'undisclosed income', the assessee is entitled to seek deduction, which might not have been sought at the time of original assessment proceedings. Attention was drawn to the language of Section 153A(1)(b) of the Act and to the fact that the Section itself starts with a non obstante clause. Reliance was placed on the judgment of Delhi High Court in Commissioner of Income Tax v. Anil Kumar Bhatia : (2012) 211 TAXMAN 453. Replying to the contentions raised aforesaid, Mr. K.K. Bissa, learned counsel appearing for the department contended that a comprehensive reading of the provisions of Section 153A of the Act IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 14 of 68 Page 14 of 68 would reveal that it is not open for the assessee to claim any deduction, which was not claimed in the original assessment proceedings. Attention was drawn to second proviso to Section 153A of the Act, which provides for abatement of only 'pending assessment or reassessment' on the date of initiation of the search and not the concluded assessment proceedings. It was submitted that the assessee having failed to claim the deduction while filing original return under Section 139 and having failed to furnish any revised return under Section 139(5) of the Act and those assessments having become final, it is not open for the assessee to use the proceedings under Section 153A of the Act to reopen the concluded assessments. It was also submitted that the assessee can only claim income or expenditure or deduction in pending assessment or reassessment proceedings, which abate in terms of second proviso to Section 153A of the Act and not otherwise. Reliance was placed on the judgment of Allahabad High Court in Commissioner of Income-tax (Central), Kanpur v. Smt. Shaila Agarwal : (2012) 346 ITR 130. Though while admitting the appeal, four substantial questions of law were framed by this Court, as noticed above, first three questions relate to the nature of Sales Tax Incentive and need for remand of the case to the Tribunal for not recording a finding on the said issue. However, the need for decision on the said three questions would depend upon answer to question No.(iv), which relates to interpretation of Section 153A of the Act and whether the assessee is entitled to raise a fresh claim under the said Section. It would be relevant to notice the provisions of Section 153A of the Act, which reads as under:- “153A. Assessment in case of search or requisition.-[(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: 9 D.B. INCOME TAX APPEAL NO.53/2011 Jai IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 15 of 68 Page 15 of 68 Steel (India), Jodhpur vs. Assistant Commissioner of Income Tax, Jodhpur (Alongwith other 16 similar matters) Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [referred to in this sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in case where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.] [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.-For the removal of doubts, it is hereby declared that- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.]” A plain reading of the above provision would reveal that if a search or requisition is initiated after 31.05.2003, the AO is under an obligation to issue notice to such person, who has been subjected to search/requisition to furnish the return of income of six years immediately preceding the year of search. The AO is then required to assess or reassess total income of the said six years and, out of the six 10 D.B. INCOME TAX APPEAL NO.53/2011 Jai Steel (India), Jodhpur vs. Assistant Commissioner of Income Tax, Jodhpur (Alongwith other 16 similar matters) years, if any assessment or reassessment is pending on the date of initiation of the search, the same would abate i.e. pending proceedings qua the said assessment year shall not proceed thereafter and the assessment has to be made under Section 153A(1)(b) of the Act read with the first proviso thereunder. Further provisions have been made contemplating a situation where an assessment made under sub-section (1) is annulled in appeal or IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 16 of 68 Page 16 of 68 other legal proceedings. The Section starts with a non obstante clause, which removes the restrictions upon the AO from assuming jurisdiction to reopen the assessment under Sections 147, 148 and 151 etc. Prior to introduction of Sections 153A to 153C, Chapter XIVB of the Act took care of the assessments to be made in cases of search and seizure, which were called 'block assessment', whereby, a single assessment was required to be in respect of a period of block of ten years prior to the assessment year, in which, the search was made. After the introduction of Sections 153A to 153C, a single block assessment concept has been given a go bye and now the AO has been given the power to assess or reassess the 'total income' of the six years in question in separate assessment orders. To consider the rival submissions made at the Bar in the context of the present case and the substantial question of law framed, the scope of 'assessment and reassessment of total income' under Section 153A(1)(b) and the first and second proviso have to be considered. Further, for answering the above issues, guidance will have to be sought from Section 132(1) of the Act, as Section 153A of the Act cannot be read in isolation, inasmuch as, the same is triggered only on 11 D.B. INCOME TAX APPEAL NO.53/2011 Jai Steel (India), Jodhpur vs. Assistant Commissioner of Income Tax, Jodhpur (Alongwith other 16 similar matters) account of any search/requisition under Sections 132 or 132A of the Act. If any books of accounts or other documents relevant to the assessment had not been produced in the course of original assessment and, found in the course of search, such books of accounts or other documents have to be taken into consideration while assessing or reassessing the total income under the provisions of Section 153A of the Act. Even in a case where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration. The requirement of assessment or reassessment under the said section has to be read in the context of Sections 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed. The underline purpose of making assessment of total income under Section 153A of the Act is, therefore, to assess income which was not disclosed or would not have been disclosed. The purpose of second proviso is also very clear, inasmuch as, once a assessment or reassessment is 'pending' on the date of initiation of search or requisition and in terms of Section 153A a return is filed and the AO is required to assess the same, there cannot be two assessment orders determining the total income of the assessee for the said IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 17 of 68 Page 17 of 68 assessment year and, therefore, the proviso provides for abatement of such pending assessment and reassessment proceedings and it is only the assessment made under Section 153A of the Act would be the assessment for the said year. The necessary corollary of the above second proviso is that the assessment or reassessment proceedings, which have already been 'completed' and assessment orders have been passed determining the assessee's total income and, such orders are subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In such cases, where the assessments already stands completed, the AO can reopen the assessments or reassessments already made without following the provisions of Sections 147, 148 and 151 of the Act and determine the total income of the assessee. The argument raised by the counsel for the appellant to the effect that once a notice under Section 153A of the Act is issued, the assessments for six years are at large both for the AO and assessee has no warrant in law. In the firm opinion of this Court from a plain reading of the provision alongwith the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be triggered and assessment or reassessment to ascertain the total income of the person is required to be done, however, the same would in that case not result in any addition and the assessments passed earlier may have to be reiterated. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:- “ 19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 18 of 68 Page 18 of 68 made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the “total income” of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. 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. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and 14 D.B. INCOME TAX APPEAL NO.53/2011 Jai Steel (India), Jodhpur vs. Assistant Commissioner of Income Tax, Jodhpur (Alongwith other 16 similar matters) reassess the total income, taking note to the undisclosed income, if any, unearthed during the search. For this purpose, 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 sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case 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 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings “shall abate”. The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 19 of 68 Page 19 of 68 orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition “shall abate”. Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income and such orders subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made.” (emphasis supplied) The said judgment also in no uncertain terms holds that the reassessment of the total income of the completed assessments have to be made taking note of the undisclosed income, if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 20 of 68 Page 20 of 68 also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. The Allahabad High Court in Commissioner of Income-tax (Central, Kanpur v. Smt. Shaila Agarwal (supra) has held as under:- “19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or reassessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same alongwith assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271 (1)(c) of the Act. The material found in the search may be a ground for notice and assessment under Section IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 21 of 68 Page 21 of 68 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty.” (emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. Income Tax Officer : (1981) 131 ITR 597 that “it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided.” The argument of the counsel for the appellant if taken to its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded upto the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. In view of the above discussion, the answer to the substantial question of law (iv) above is in the positive and against the appellant assessee, the other three questions consequently do not arise, and, as such, the appeal fails and is, therefore, dismissed. No costs. 16. This decision was one of the initial rulings of the Hon’ble High Courts wherein it has been held that in case of search and seizure action u/s 132 of the Act though section 153A would be triggered and assessment or reassessment to ascertain the total income of the person is required to be done however, in the absence of any incriminating material the same would not result in any addition and the assessments passed earlier may have to be reiterated. The Hon’ble High Court has observed that provisions of Sections 153A cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 147 the same rule is applicable for the assesse and it does not open for the assessee to seek deduction or claim expenditure which has not been claimed in the IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 22 of 68 Page 22 of 68 original assessment, which assessment already stands completed. Thereafter a series of decision were delivered by the Hon’ble High Courts on this issue and in one of the leading judgments the Hon’ble Delhi High Court in case of CIT vs. Kabul Chawla 380 ITR 573 has thoroughly analyze the provisions of section 153A r.w.s. 132 of the Act and concluded in para 37 & 38 as under: “37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 23 of 68 Page 23 of 68 separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006- 07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 17. The Hon’ble Delhi High Court has held that completed assessment can be interfered with by the Assessing Officer while making assessment u/s 153A only on the basis of some incriminating material unearthed during the course of search u/s 132 or requisition u/s 132A of the Act reveals undisclosed income or property which was not produced or already disclosed or may not in the course of original assessment. There, except in the facts and circumstances where incriminating material is found during the course of search and seizure revealing undisclosed income, no addition can be made to the total income of the assessee while framing u/s 153A of the Act for assessment year which was not got abated by virtue of search. The Hon’ble Delhi High Court has reiterated its view in case of Pr. CIT vs. Kurele Paper Mills Pvt. Ltd. (supra) in para 1 to 3 as under: 1.The Revenue has filed the appeal against an order dated November 14, 2014, passed by the Income-tax Appellate Tribunal ("the ITAT") in 3761/Del/2011 pertaining to the assessment year 2002-03. The question was whether the learned Commissioner of Income-tax (Appeals) had erred in law and on the facts in deleting the addition of Rs. 89 lakhs made by the Assessing Officer under section 68 of the Income-tax Act, 1961 (the Act) on bogus share capital. But the issue was whether there was any incriminat- ing material whatsoever found during the search to justify initiation of proceedings un- der section 153A of the Act. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 24 of 68 Page 24 of 68 2. The court finds that the order of the Commissioner of Income-tax (Appeals) reveals that there is a factual finding that "no incriminating evidence related to share capital is- sued was found during the course of search as is manifest from the order of the Assessing Officer Consequently, it was held that the Assessing Officer was not justi- fied in invoking section 63 of the Act for the purposes of making additions on account of share capital. 3. As far as the above facts are concerned, there is nothing shown to the court to per- suade and hold that the above factual determination is perverse. Consequently, after considering all the facts and circumstances of the case the court is of the opinion that no substantial question of law arises in the impugned order of the Income Tax Appellate Tribunal which requires examination. 18. Thus, it has been held that when the assessment was not pending on the date of search the same can be interfere with the AO while making assessment u/s 153A only on the basis of some incriminating material found during the course of search or requisition undisclosed income or discovery of property which were not produced or disclosed by the assessee.The Hon’ble Delhi High Court again reiterated its view in case of Pr. CIT vs. Meeta Gutgutia 395 ITR 526 and held in para 55 to 71 as under: 55. On the legal aspect of invocation of Section 153A in relation to AYs 2000-01 to 2003-04, the central plank of the Revenue‟s submission is the decision of this Court in Dayawanti Gupta (supra). Before beginning to examine the said decision, it is necessary to revisit the legal landscape in light of the elaborate arguments advanced by the Revenue. 56. Section 153A of the Act is titled "Assessment in case of search or requisition". It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re- open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of Section 153A qua each of the AYs would be justified. 57. The question whether unearthing of incriminating material relating to any one of the AYs could justify the re-opening of the assessment for all the earlier AYs was considered both in CIT v. Anil IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 25 of 68 Page 25 of 68 Kumar Bhatia (supra) and CIT v. Chetan Das Lachman Das (supra). Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla (supra). As far as CIT v. Anil Kumar Bhatia (supra) was concerned, the Court in paragraph 24 of that decision noted that "we are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We therefore express no opinion as to whether Section 153A can be invoked even under such situation". That question was, therefore, left open. As far as CIT v Chetan Das Lachman Das (supra) is concerned, in para 11 of the decision it was observed: "11. Section 153A (1) (b) provides for the assessment or reassessment of the total income of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section that additions should be strictly made on the basis of evidence found in the course of the search or other post-search material or Information available with the Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." 58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. v. CIT (supra) as well as the above two decisions and observed as under: "31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two . decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT(A), affirmed by the ITAT, deleting the addition, was not interfered with." IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 26 of 68 Page 26 of 68 59. In Kabul Chawla (supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (2013) 36 Taxman 523 (Raj). The said part of the decision in Kabul Chawla (supra) in paras 33 and 34 reads as under: "33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: "22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material; and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made." 34. The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "assess" and "reassess", which have been found at more than one place in Section 153A of the Act as under: "26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 27 of 68 Page 27 of 68 and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents." 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in Commissioner of Income Tax v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78 (Bom) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supra) as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the. aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 28 of 68 Page 28 of 68 vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla (supra) beginning with the Gujarat High Court in Principal Commissioner of Income Tax v. Saumya Construction Pvt. Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) and one earlier decision of the Gujarat High Court itself. It explained in para 15 and 16 as under: "15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 29 of 68 Page 29 of 68 the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub- section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub- section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading "Assessment in case of search or requisition". It is "well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition' or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 30 of 68 Page 30 of 68 would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. xxx 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of an the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as. the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court In the case of CIT v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years ; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year." 62. Subsequently, in Principal Commissioner of Income Tax- 1 v. Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Principal Commissioner of Income Tax v. Saumya Construction P. Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in CIT v. IBC Knowledge Park P. Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. (supra), too, followed the decision of this Court in Kabul Chawla (supra). In CIT v. Gurinder Singh Bawa (supra), the Bombay High Court held that: "6...once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 31 of 68 Page 31 of 68 apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to and/or not disclosed during the regular assessment proceedings." 63. Even this Court has in CIT v Mahesh Kumar Gupta (supra) and The Pr. Commissioner of Income Tax-9 v. Ram Avtar Verma (supra) followed the decision in Kabul Chawla (supra). The decision of this Court in Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd. (supra) which was referred to in Kabul Chawla (supra) has been affirmed by the Supreme Court by the dismissal of the Revenue's SLP on 7th December, 2015. The decision in Dayawanti Gupta 64. That brings us to the decision in Dayawanti Gupta (supra). As rightly pointed out by Mr. Kaushik, learned counsel appearing for the Respondent, that there are several distinguishing features in that case which makes its ratio inapplicable to the facts of the present case. In the first place, the Assessees there were engaged in the business of Pan Masala and Gutkha etc. The answers given to questions posed to the Assessee in the course of search and survey proceedings in that case bring out the points of distinction. In the first place, it was stated that the statement recorded was under Section 132(4) and not under Section 133A. It was a statement by the Assessee himself. In response to question no. 7 whether all the purchases made by the family firms, were entered in the regular books of account, the answer was: "We and our family firms namely M/s Assam Supari Traders and M/s Balaji Perfumes generally try to record the transactions made in respect of purchase, manufacturing and sales in our regular books of accounts but it is also fact that some time due to some factors like inability of accountant, our busy schedule and some family problems, various purchases and sales of Supari, Gutka and other items dealt by our firms is not entered and shown in the regular books of accounts maintained by our firms." 65. Therefore, there was a clear admission by the Assessees in Dayawanti Gupta (supra) there that they were not maintaining regular books of accounts and the transactions were not recorded therein. 66. Further, in answer to Question No. 11, the Assessee in Dayawanti Gupta (supra) was confronted with certain documents seized during the search. The answer was categorical and reads thus: IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 32 of 68 Page 32 of 68 "Ans:- I hereby admit that these papers also contend details of various transactions include purchase/ sales/ manufacturing trading of Gutkha, Supari made in cash outside Books of accounts and these are actually unaccounted transactions made by our two firms namely M/s Asom Trading and M/s. Balaji Perfumes." 67. By contrast, there is no such statement in the present case which can be said to constitute an admission by the Assessee of a failure to record any transaction in the accounts of the Assessee for the AYs in question. On the contrary, the Assessee herein stated that, he is regularly maintaining the books of accounts. The disclosure made in the sum of Rs. 1.10 crores was only for the year of search and not for the earlier years. As already noticed, the books of accounts maintained by the Assessee in the present case have been accepted by the AO. In response to question No. 16 posed to Mr. Pawan Gadia, he stated that there was no possibility of manipulation of the accounts. In Dayawanti Gupta (supra), by contrast, there was a chart prepared confirming that there had been a year-wise non- recording of transactions. In Dayawanti Gupta (supra), on the basis of material recovered during search, the additions which were made for all the years whereas additions in the present case were made by the AO only for AY 2004-05 and not any of the other years. Even the additions made for AYs 2004-05 were subsequently deleted by the CIT(A), which order was affirmed by the ITAT. Even the Revenue has challenged only two of such deletions in ITA No. 306/2017. 68. In para 23 of the decision in Dayawanti Gupta (supra), it was observed as under: "23. This court is of opinion that the ITAT's findings do not reveal any fundamental error, calling for correction. The inferences drawn in respect of undeclared income were premised on the materials found as well as the statements recorded by the assessees. These additions therefore were not baseless. Given that the assessing authorities in such cases have to draw inferences, because of the nature of the materials - since they could be scanty (as one habitually concealing income or indulging in clandestine operations can hardly be expected to maintain meticulous books or records for long and in all probability be anxious to do away with such evidence at the shortest possibility) the element of guess work is to have some reasonable nexus with the statements recorded and documents seized. In tills case, the differences of opinion between the CIT (A) on the one hand and the AO and ITAT on the other cannot be the sole basis for disagreeing with what is essentially a factual surmise that is logical and plausible. These findings do not call for interference. The second question of law is answered again in favour of the revenue and against the assessee." IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 33 of 68 Page 33 of 68 69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs. 19. There are number of judgments relied upon by Ld. AR including the decision of Hon’ble Jurisdictional High Court dated 02.02.2023 in case of Pr. CIT vs. M/s Great Galleon Ventures ltd. Income Tax Appeal No.222 of 2022 wherein it has been held as under: This appeal u/S 260A of the Income Tax Act 1961(for short, the Act of 1961 hereinafter) is directed against the order dated 23.12.2021 passed by the Income Tax Appellate Tribunal, Bench Indore in ITA No. 67/Ind/2021(Revenue’s Appeal) for the Assessment Year 2015- 16. The substantial question of law which has been raised by the appellant in this appeal is “whether in absence of any incriminating documents seized during the course of search, the Assessing Officer is justified in making the addition in non-abated assessment orders u/S 153-A r/W Sec 143(3) of the Act of 1961.” The assessment is u/S 153A r/W Sec 143(3) of the Act of 1961 for the assessment year 2015-16. Learned Tribunal was in seisin with the appellant and cross appeals arising from respective orders passed by the Commissioner Income Tax(Appeals). The appeal before the CIT(Appeals) was directed against the addition of income by the Assessing Officer taking production on presumptive basis and working out estimated income. ADVERTISEMENT The factum of addition not being based on any incriminating material found during the search is not disputed. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 34 of 68 Page 34 of 68 Exactly identical substantial question of law came up for consideration before the Division Bench of this Court at Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019 and ITA No. 32/2019(Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). Vide order dated 12.07.2019, these appeals were disposed of holding that in the given facts of the present case, as no incriminating documents during the course of search were found, the order in appeal cannot be said to have suffered any illegality as would give rise to proposed substantial question of law. Consequently, the appeals were dismissed. In view of the fact that the aforesaid question of law was dealt by the Division Bench of this Court in the aforesaid cases, no different view can be taken in this appeal. Accordingly, finding no substantial question of law, this appeal fails and is hereby dismissed. 20. The Hon’ble jurisdictional High Court in case of Pr. CIT vs. Gahoi & Oil Mills and Ors. 272 Taxman 522 (MP) has reiterated its view in para 7 to 10 as under: 7. In view of the facts discussed above in clause No. (i) to (ix) of para No.6, I am of the considered opinion that the addition in respect of unaccounted production/sale and profit on such production/sale has been made by the A.O in a mechanical manner without any basis. The income has been estimated merely on the basis of imagination, presumption and suspicion. The addition based on imagination, presumption and suspicion. Cannot be sustained. I am of the considered opinion that THE HIGH COURT OF MADHYA PRADESH I.T.A.No.21/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Dal & Oil Mills) I.T.A.No.31/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) I.T.A.No.32/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) the addition made by A.O is uncalled for any unwarranted, hence the addition made by the A.O is hereby deleted." 7. Section 153 A (1) of the Act stipulates : "(1) Assessment in case of search or requisition.-- Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall - (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 35 of 68 Page 35 of 68 referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment THE HIGH COURT OF MADHYA PRADESH I.T.A.No.21/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Dal & Oil Mills) I.T.A.No.31/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) I.T.A.No.32/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) year falling within such six assessment years. Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless - (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years ; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years ; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1 st day of April, 2017." IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 36 of 68 Page 36 of 68 THE HIGH COURT OF MADHYA PRADESH I.T.A.No.21/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Dal & Oil Mills) I.T.A.No.31/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) I.T.A.No.32/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) 8. Dwelling on the scope of Sub-section (1) of Section 153 A of the Act, a Division Bench of Delhi High Court in CIT Vs. Kabul Chawla; (2016) 380 ITR 573 observed: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i) Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. (iii) The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs 'in which both the disclosed and the undisclosed income would be brought to tax'. (iv) Although Section 153 A does not say THE HIGH COURT OF MADHYA PRADESH I.T.A.No.21/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Dal & Oil Mills) I.T.A.No.31/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) I.T.A.No.32/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment 'can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.' (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 37 of 68 Page 37 of 68 those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi) Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vii) Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the THE HIGH COURT OF MADHYA PRADESH I.T.A.No.21/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Dal & Oil Mills) I.T.A.No.31/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) I.T.A.No.32/2019 (Pr. Commissioner of Income Tax Vs. Gahoi Foods Pvt. Ltd.) course of original assessment." 9. We are in respectful agreement with the view expressed. 10. In the given facts of present case as no incriminating documents during course of search are found, the order in appeal cannot be said to have suffered the illegality as would give rise to the proposed substantial question of law. 21. The revenue filed SLPs against the decisions of Hon’ble High Court including in case of Pr. CIT vs. Meeta Gutgutia (supra) which was dismissed by the Hon’ble Supreme Court however, SLP’s against judgment in case of Kabul Chawla(supra) and other decisions were admitted by the Hon’ble Supreme Court and finally decided vide judgment reported in 149 taxmann.com 399(SC). The Hon’ble Supreme Court while deciding lead Civil appeal in case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. along with a series of other civil appeals has upheld the view and judgment of Hon’ble Delhi High Court in case of Kabul Chawla(supra). The Hon’ble Supreme Court has recorded the question which was posed for consideration of Hon’ble Apex Court in para 5 as under: 5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 38 of 68 Page 38 of 68 during the course of search under Section 132 or requisition under Section 132A or not, i.e., whether any 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 132 A of the Act, 1961 or not. 22. The said question was answered by the Hon’ble Supreme Court in para 9 to 14 as under: 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 39 of 68 Page 39 of 68 preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: “153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, Section 153- B and Section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.” 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the ‘total income’ in respect of each assessment year falling within six assessment years. However, it is IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 40 of 68 Page 40 of 68 required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 41 of 68 Page 41 of 68 Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and 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. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 42 of 68 Page 42 of 68 review petition preferred by the Revenue are hereby dismissed. No costs. 23. The view taken by the Hon’ble Delhi High Court in case of Kabul Chawla (supra) as well as The Hon’ble jurisdictional High Court in case sited above has been affirmed by the Hon’ble Supreme Court while resolving the issue to its finality. Following binding precedence of Hon’ble High Court as well as Hon’ble Supreme Court we hold that the addition made by the AO on account of unsecured loan for the assessment year 2016-17 is not sustainable for want of any incriminating material and liable to be deleted. We order accordingly. On merits 24. On the merits of the additions made by the AO for assessment years 2016-17 to 2018-19 the details of the loans taken by the assessee during these assessment year are as under: Details of Loan taken A.Y. 2016-17 PARTY NAME Op. Balance as on 1.04.2015 Recd. During the Year Interest paid during the year Mode of repayment by allotment of Share TDS deducted Cl. Balance year end as on 31.03.2016 MORIYA MERCHANDISE PVT. LTD. 0.00 2,45,50,00 0 27,04,290 2,69,61,000 2,70,429 22,861 Un-secured Loan Details A.Y. 2017-18 PARTY NAME Op. Balance as on 1.04.2016 Recd. During the Year Interest paid during the year net of TDS Mode of repayment by Issuance of Share Mode of repayment Through Bank Cl. Balance year end as on 31.03.2017 IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 43 of 68 Page 43 of 68 VENEERS MERCANTILES PVT. LTD. 0 500000 1644 0 0 501644 SAFFRON PLANTATION PVT. LTD. 0 1100000 3616 0 0 1103616 VENKATESHWARA INVESTMENT & FINANCE PVT. LTD. 421896 (DEBIT BALANCE) 700000 20632 0 0 298736 SNEHSIL HIRISE PVT. LTD. 0 2650000 8712 0 0 2658712 MORIYA MERCHANDISE PRIVATE LTD 22861 0 2736 0 0 25597 Un-secured Loan Details A.Y. 2018-19 PARTY NAME Op. Balance as on 1.04.2017 Recd. During the Year Interest paid during the year Mode of repayment by allotment of Share Mode of repayment Through Bank channel Cl. Balance as on 31.03.2018 Veneers Mercantiles Pvt. Ltd. 5,01,644 84 47,525 5,44,500 0 0 Saffron Plantation Pvt Ltd 11,03,616 189 1,04,550 11,97,900 0 0 Snehsil Hirise Pvt Ltd 26,58,712 112 251885 28,85,520 0 0 Venkateshwar Investment & Finance Pvt 2,98,736 0 0 0 2,98,736 0 Moriya Merchandise Pvt Ltd 25,597 0 2,425 0 28,022 0 TOTAL 45,88,305 385 4,06,385 46,27,920 326758 0 25. As we have discussed in the foregoing paragraphs of this order that the AO has made the addition primarily on the ground that associate concerns who have given loan to the assessee were having very meager business activities to justify the advance of loan to the assessee. The AO has not conducted any inquiry about the availability of the funds with the group concerns of the assessee for granting these loans but the AO presumed that the transactions are bogus and assesse’s own IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 44 of 68 Page 44 of 68 unaccounted income is routed back in the shape of unsecured loans through its group concerns. The second reason for doubting the transaction is the common address of all the group concerns. So far as the common address is concerned since the building bearing 106A, Shyam Bazar Street, Kolkata belongs to the associate Alcohol and Breweries Ltd. and Mount Everest Breweries of the same group. Therefore, we do not find anything incriminating in nature merely because all the group concerns are having their registered office in the same building which belongs to the assessee group hence, the reasons assigned by the AO in treated the group concerns as paper companies lack any substance and without any tangible material. The AO has presumed these transactions as accommodation entries between the group concerns without bringing any material on record to reveal that transactions are bogus in nature and assesse’s own undisclosed income has been routed back in the shape of unsecured loan through its group concern. There is no quarrel that primary onus is on the assessee to prove the identity and creditworthiness of the creditors as well as the genuineness of the transactions. The identities of the creditors are not in dispute as all the loan creditors are group concerns of assessee and even otherwise these companies duly assessed to tax by the department as per the record available. The creditworthiness has been shown by the assessee by producing audited financial statements as well as bank account statement of these loan creditors showing availability of funds with the group concerns to advance to the loan to the assessee. It is pertinent to note that AO has not given a finding to establish the fact that the fund available with these group concerns as result of the unaccounted income of the assessee travelled to the group concerns. The entire order of the AO is based on the presumption and not based on any tangible material. The AO has referred various case laws to support its view that these transactions are nothing but accommodation entries however, no factual finding is given by the AO on the basis of any inquiry conducted revealing the fact that these transactions are not genuine transactions. There is no dispute that the transactions are carried out through banking channel which may not in IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 45 of 68 Page 45 of 68 itself establish the genuineness of the transactions but in the absence of any contrary fact or material brought by the AO to show that these amounts are nothing but assesse’s own unaccounted income, addition cannot be made merely on the basis of suspicion. The assesse has produced the financials of these loans creditors including banking account which shows the availability of the funds with these concerns and Ld. AR of the assessee has relied upon the decision of Coordinate Bench of this Tribunal in case of group concern. We find that this tribunal in case ACIT(Central) vs. Mount Everest Breweries Ltd. in IT(SS)A No.59/Ind/2021 & ITANo.60 & 61/Ind/2021 & IT(SS)ANo. 68 to 70/Ind/2021 CO No.06/ind/2021 and CO Nos. 7 & 8/Ind/2021 vide order dated 20.01.2022 has held in para 27 to 38 as under: “27. We have heard rival contentions and perused the records placed before us and carefully gone through the oral and written submissions made from both the sides and the judicial pronouncements referred by them. On merits of the case both the assessee and revenue are in appeal before us against the additions made by the ld. AO u/s 68 r.w.s. 115 BBE of the Act for unsecured loan/share capital and for unexplained interest expenditure u/s 69C r.w.s. 115BBE of the Act. We observe that the assessee is a well- established company engaged in the business of manufacturing Beer and consistently assessed to tax. Search action u/s 132 of the Act was carried out on 14.11.2017 on the group namely Associated Alhocal Group of which assessee is also a related concern. During the search proceedings financial and bank statement of various alleged paper companies were found. Statement of key person Mr. Anand Kedia was recorded wherein he stated to have converted undisclosed income of Rs. 45,11,49,372/- through various companies of the group in the form of share capital, share premium and unsecured loan. This statement was retracted within five days stating on affidavit to have been given under pressure of department, under stress and duress and at odd hours. As far as the assessee’s case is concerned examination of the ld. AO was finally settled with regard to seven companies namely Bhilai Properties Investments Pvt. Ltd., Accord Vanijya Pvt. Ltd., Mayfair Mercantiles Pvt. Ltd., Moriya Merchandise Pvt. Ltd., Eagle Agencies Pvt. Ltd.,Novelty Realtors Pvt. Ltd. &. Welplan Traders Pvt. Ltd. alleging therein to be shell/paper companies. Ld. AO found that through these companies assessee has received unsecured loans and in some years unsecured loan has been converted into share capital and share premium also. While making addition Ld. AO also considered the opening credit balance in the account of alleged cash creditor companies namely Bhilai IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 46 of 68 Page 46 of 68 Properties Investments Pvt. Ltd., at Rs. 75 lacs and in the case of Accord Vanijya Pvt. Ltd. Rs.2.42 cr as part of the undisclosed income. The addition made by the ld. AO are categorize in three parts. a. Addition for share capital u/s 68 r.w.s. 115BBE of the Act for A.Y.2015-16 at Rs.2,99,86,944/- received from following two companies: Share capital received from AY 2015-16 (Addition u/s 68 r.w.s. 115BBE) Bhilai Property Investment Pvt. Ltd. 63,25,200/- Accord Vanijya Pvt. Ltd. 2,36,61,744/- Total 2,99,86,944/- b. Addition for unsecure loan u/s 68 r.w.s. 115BBE of the Act for A.Ys. 2013-14, 2015-16, 2017-18 totaling to Rs.33.86 cr. (approx..) in the case of following companies: Particulars Assessment years Unsecured loan received from 2013-14 2015-16 2016-17 2017-18 Moriya Merchandise Pvt. Ltd. 00 50000280 29400000 00 Welplan Traders Pvt. Ltd. 00 00 00 12000000 Bhilai Properties & Investment Pvt. Ltd. 16500000 200 00 00 Mayfair Mercantile Pvt. Ltd. 00 7300200 00 00 Accord Vanijya Pvt. Ltd. 18000000 00 00 00 Eagle Agencies Pvt. Ltd. 00 56163252 00 00 Novelty Realtors Pvt. Ltd. 00 00 163950000 16327790 IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 47 of 68 Page 47 of 68 total 34500000 113463932 193350000 28327790 c. Addition for unexplained expenditure u/s 69C r.w.s. 115BBE of the Act for the interest expenses at Rs.64,42,747/- in case of following companies: Particulars Assessment years Unsecured loan received from 2013-14 2015-16 2016-17 2017-18 Moriya Merchandise Pvt. Ltd. 00 00 2611321 103636 Eagle Agencies Pvt. Ltd. 00 00 3727790 00 total 00 00 6339111 103636 28. We further find that when the assessee carried the matter before the first appellate authority Ld. CIT(A) after making detailed examination of the documentary evidences filed by the assessee, retraction made by the key person Mr. Anand Kedia within five days of the search stating that the surrender was taken under stress and duress by the revenue authorities and also Ld. CIT(A) appreciated the fact that all alleged seven cash creditors companies are closely held by the promoter group and there and the unsecured loans taken have been repaid mostly before the date of search and also taking into consideration the settled judicial precedents deleted the addition for interest expenditure u/s 69C of the Act in total and partly deleted the addition for unsecured loan u/s 68 of the Act observing as follows: i. With regard to confirmation of addition of remaining amount of said loan being Rs. 14,34,50,864, Rs. 13,73,11,321/- and Rs. 1,63,27,790/- for A.Y. 2015-16, 2016- 17 and 2017-18 respectively as unexplained in respect of very same loan transaction Ld. Counsel for Assessee has vehemently submitted that Ld. CIT (A) has taken a dual view in respect of unexplained cash credit under section 68 of the Act, in respect of unsecured loans received from certain companies converted into share capital in spite of fact that Assessee had even proved the source of source of loan amount given by the group loan creditors, the identity of the loan creditors, their creditworthiness and genuineness of the transaction by submitting complete information, explanation, documentary proof/evidence thereof, Ld. CIT(A) gone ahead in IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 48 of 68 Page 48 of 68 confirming the addition made by AO merely on the basis of presumption and surmises without having any incriminating material. ii. It was submitted by Ld. Counsel for Assessee that the learned CIT (Appeals) erred in taking the dual view in respect of amount received by the Assessee from very same loan transaction by taking the separate stand in respect proving identity, creditworthiness, and genuineness of the transaction for the amount which was repaid after that vis-a-vis the amount converted into share capital of the Assessee. iii. Further attention was drawn by the Ld. Counsel for the Assessee that while partly allowing the appeal of the assessee on the basis of facts and evidences, the Ld. CIT (A) made the following observations in the aforesaid order: - “4.2.5 The assessee was required to establish identity of creditors, capacity of the creditors and genuineness of the transaction. The AO considering the reply of the assessee stated that genuineness of the transaction between the assessee and creditors are not established and held that the loan taken from various companies are paper/shell/briefcase companies which does not have any operative business and are involved in providing accommodation entries. 4.2.6 The appellant during appellate proceedings has contended that the loan was taken from various associated group concerns. Further, the appellant has filed various documentary evidences in support of genuineness of the transaction, creditworthiness of the lender and identity of the lender which were also filed before the AO. The appellant has also strongly contended that no incriminating material was found during search on the basis of which additions have been made by the AO. The appellant has also taken a plea that entire addition has been made on conjectures, surmises and suspicion basis. 4.2.7 I have considered the facts of the case, material evidences on record & written submissions filed by the ld AR of the appellant. I have also given my thoughtful consideration to the facts and findings of the AO inter alia material brought on record. As culled out from assessment order the appellant has taken unsecured loan from above cited company. The AR has vehemently challenged the arbitrary approach of the AO mainly on two major Counts: (a) The AO erred in considering the documentary evidences filed in support of creditworthiness of the lender and genuineness of the transaction. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 49 of 68 Page 49 of 68 (b) The AO erred in making addition based on statement without any incriminating material on record. (a) The AO erred in considering the documentary evidences filed in support of creditworthiness of the lender and genuineness of the transaction: Appellant before the AO as well as before me has filed copies of PAN, bank account statement of lenders, audited balance sheet, profit and loss statement, certificate of incorporation, copy of MOA, details collected from website of Ministry of Corporate Affairs, and confirmations of lenders. The brief details of these lender companies are as under: b) The AO erred in making addition based on statement without any incriminating material on record. Shri Anand Kumar Kedia in his statement recorded on oath on 16.11.2017 has admitted that a sum of Rs. 45,11,49,372/- was through three companies namely, M/s Moriya Merchandise Pvt Ltd, M/s Eagle Agencies Pvt ltd and M/s Novelty Realtors Pvt Ltd. However, the said statement was retracted vide dated 22.11.2017 and affidavit dated 30.11.2017. However, the AO vide para 19 has alleged that the said retraction was made after two years. In support appellant has filed copy of letter dated 22.11.2017 duly received in the office of The DDIT(Inv)-III, Indore. The search in the case of appellant initiated on 14.11.2017 and concluded on 18.11.2017 and the said retraction letter was filed on 22.11.2017 i.e. within 4 days, therefore, it cannot be said that the retraction is an afterthought. Shri Anand Kumar Kedia vide retraction letter dated 22.11.2017 has contended that the statement was given under pressure and at odd hours. This fact has also been confirmed by the AO vide para 19 of the assessment order. However, the AO has not placed reliance on any incriminating material having its bearing on the surrendered income. The A.O has also failed to bring on record any positive evidence having nexus with the impunged investment in share capital. Further, the declaration was made for Mount Everest Breweries Ltd. Thus, it can be safely concluded that the addition made by the A.O was not on the basis of the incriminating material found during the course of search but only on the basis of retracted statement of Shri Anand Kumar Kedia. 4.2.8 As discussed above, the appellant has furnished all details such as documents relating to identity, creditworthiness of the lender and genuineness of the transactions. Thus, prima facie liability of the assessee to prove the genuineness of the transaction and to establish the IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 50 of 68 Page 50 of 68 identity and credit worthiness of the lender stands discharged. Thus considering the fact that the lender is group companies and is regular tax assessee's, and have given the loan through account payee cheque and have confirmed the transaction the liability of the assessee of explaining the genuineness of the transaction stands discharged and the addition cannot be made on mere suspicion how so strong the reasons of suspicion may be. Also, the appellant has repaid the loan. The repayment of loan has been done from 29.09.2014 to 20.01.2015. Hon'ble Gujarat High Court in the case of Ayachi Chandrashekhar A.Y. 2013-14, 2015-16 to 2017-18 Narsangji (2014) 42 Taxmann.com 251 (Guj HC) has held that "It has also come on record that the said loan amount has been repaid by the assessee to Shri Ishwar Adwaniin the immediate next FY and the Deptt has accepted the repayment of loan without probing into it. In the aforesaid facts and circumstances of the case, when the Tribunal has held that the matter is not required to be remanded as no other view would be possible we see no reason to interfere with the impugned order passed by ITAT". 4.2.9 The loan party furnished the loan confirmation, copy of bank account and proof of filing of the return. By filing the above documents the appellant is able to establish the i. Identity of the creditors-the creditors are income tax payer and filed the loan confirmations. ii. Genuineness of the transaction- the appellant has taken the loan through banking channel. The appellant is in the receipt of loan by cheque. Copies of bank statements of lender companies are placed on record and perused. Appellant has made repayments of the loan taken per his convenience of fund availability as is evident from loan confirmation letters and ledger statements of the lender companies duly accompanied by bank statements. Appellant has also paid interest to the lender companies on the loans borrowed and the same have been offered to tax by the respective lender companies in their regular income tax return. The appellant has also deducted TDS on interest and the TDS credit has also been availed by respective lender company. iii. Creditworthiness of the creditors the creditors are income tax payer and filing the income tax return. The companies have not only given the loan to the appellant but to other parties also. 4.2.10 From the above it is clear that the appellant has satisfied all the three conditions required for genuineness of IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 51 of 68 Page 51 of 68 the transaction. The same view has been upheld by Honb'le ITAT in the following cases: i. Umesh Electricals v/s Asst. CIT(2011) 18 ITJ 635 (Trib.- Agra):-(2011) 131 ITD 127: (2011) 141 TTJ Establishment of identity and credit-worthiness proved- Assessee produced the bank account of creditor in his bank account on the same day on which loan was given- Assessee furnished the cash flow statement of creditor-Based on inquiry, AO noted that creditor was engaged in providing accommodation entries HELD- In group cases, it has been held that there was no evidence against the creditor to prove that he was providing accommodation entries-Further, mere deposit of money by the creditor on the same day, does not establish that the loan is not genuine-Assessee has proved the source of credit and also the source of source-Addition cannot be made. ii. Aseem Singh v/s Asst. CIT (2012) 19 ITJ 52 (Trib.-Indore) Identity and credit-worthiness proved-Assessee took loan of Rs.1,00,000/- confirmation of creditor was filed-Lower authorities made addition u/s 68 holding that amount was deposited in cash in the bank account of lender immediately prior to date of loan- HELD- Assessee has established the identity- The party has confirmed the transaction-If AO doubted the transaction, AO should have called creditor u/s 131-Addition cannot be made. Thus, appellant has furnished all the required details in order to prove identity of lenders, genuineness of the transaction and creditworthiness of the creditors. 4.2.11 As far as case laws relied upon by the A.O. are concerned, on perusal it is seen that none of the case laws relied upon by the A.O. are applicable to the facts of this case//The case laws referred by AO are as under: (a) Sumatidayal vs CIT 214 ITR 801 (SC) Section 68 of the Income-tax Act, 1961-Cash credits - Assessment years 1971-72 and 1972-73-Assessee had shown certain amounts in capital accounts in books claiming same to be winnings from horse races- She filed sworn statement to effect that she started going for races only towards end of year 1969 and had no experience in races but she purchased jackpot tickets on combination worked out by her on basis of advice given by her husband - She had allegedly won 16 jackpots besides trebles Assessing Officer disbelieved her version and taxed amount as income from undisclosed sources Settlement Commission by its majority order upheld assessment order holding that it was reasonable to infer, on facts, that assessee did not participate races but purchased IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 52 of 68 Page 52 of 68 winning tickets after events with unaccounted money Whether matter in question had to be considered in light of human probabilities - Held, yes - Whether having record to conduct of assessee as disclosed by her in nworn affidavit as well as other material on record, an inference could reasonably be drawn that winning tickets were purchased by her after race event - Held, yes - Whether, therefore, finding of majority of Settlement Commission that amount in question was not winnings from horse races but income from undisclosed sources was justified-Held, yes In the above mentioned case, the assessee has claimed certain amounts in capital account from winnings from horse races. But in reality assessee has purchased lottery tickets out of unaccounted money. However, facts of the case of appellant are entirely different from the above cited case. Moreover, when the primary and direct evidences provide all the explanation, the surrounding circumstances bear no significance. (a) Pavankumar M Sanghvi (2018) 97 taxmann.com 398 (b) Seema Jain (2018) 96 taxmann.com 307 (Delhi) (c) Aaradhna estate Pvt Ltd (2018) 91 taxmann.com 19 (Guj HC) (d) Pratik SyntexPvt Ltd (2018) 94 taxmann.com 12 (ITAT Mumbai) (e) Mid East Folio Management Ltd vs CIT(2003) 81 TTJ 37(Mum) (f) PCIT vs NRA Iron & Steel (P) Ltd (2019) 103 taxmann.com 48 (SC) (g) Navodaya Castle Pvt Ltd (2015) 56 taxmann.com 18 (SC) All the case laws cited by the AO are relating to failure on the part of assessee to prove genuineness of the credit which is not in the case of appellant. Appellant has proved genuineness of the transaction, and creditworthiness of the creditors with supportive evidences. Therefore, facts of the case relied by the AO are clearly distinguishable from the facts of the case of appellant. 4.2.12 In my considered view, the AO except relying upon the findings of the Investigation Wing could not bring on record any cogent material to establish that the lender company from whome appellant had claimed to have received loan was non- existent or bogus or paper company. In my view, the appellant could be able to fully discharge its onus of proving the IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 53 of 68 Page 53 of 68 genuineness of the loan transaction beyond all doubts. It is important to mention here that during the course of search a stock audit was also done in the case of appellant, where no discrepancy was found. The identity of the lender company is self-proven from the fact that the assessments in the case of the lender company have been framed either by the AO himself or by some other assessing officer. The genuineness of the transactions also gets fully established as the transactions have been taken place through banking channels and these have been confirmed by the lender companies. Also find that all the lender company was having sufficient net owned funds for making advances to the appellant or any one also. The appellant has been able to establish even the sources of the source in the hands of the lender company. The lender company is assessed to Income Tax. During the course of the search/survey no incriminating material or any other evidence was found from which it could have been inferred that the appellant had provided any fund to the lender company before obtaining loans. 4.2.13 Once it has been established and proven beyond doubt that the loan taken by appellant from various companies is genuine. Therefore, the interest payment on loan is also considered as genuine business expenditure. The appellant has also deducted applicable TDS on the interest paid and no delay in payment of TDS to government by the appellant has been brought on record by the AO. 4.2.14 Therefore, in view of the above discussion, the AO was not justified in making addition on account of unsecured loan amount and interest on loan amount to various companies. The appellant has repaid the loan of Rs.3,45,00,000/- taken in the AY 2013-14 from M/s Bhilai Properties & Investments Pvt Ltd and M/s Accord Vanijya Pvt Ltd. The appellant has repaid the loan of Rs. 12/-in AY 2015-13 taken from M/s Eagle Agencies Pvt Ltd. The appellant has repaid the loan of Rs.4,92,00,000/- in AY 2016-17 taken from M/s Novelty Realtors Pvt Ltd through cheque. The appellant has also repaid loan of Rs. 1,18,50,000/-in AY 2017-18 taker from M/s Novelty Realtors Pvt Ltd and Rs. 1,20,00,000/- from M/s Welplan Traders Pvt Ltd. Thus, keeping in view facts of the case, the documentary evidences filed by the appellant and the case laws cited above, the additions made by the AO amounting to Rs.3,45,00,000/-in the AY 2013-14, Rs.12/- in AY 2015-16, Rs. 5,86,50,000/- in AY 2016-17 and Rs.1,20,00,000/- in AY 2017-18 are Deleted.” 29. After going through the finding of ld. CIT(A) we find that he has accepted the identity and creditworthiness of the companies and also accepted the genuineness of the transactions relating to the IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 54 of 68 Page 54 of 68 unsecured loans taken and repaid and also allowed the interest expenditure. We have further examined the facts of the case with reference to each of the assessment years and all the alleged seven cash creditors namely Bhilai Properties Investments Pvt. Ltd., Accord Vanijya Pvt. Ltd., Mayfair Mercantiles Pvt. Ltd., Moriya Merchandise Pvt. Ltd., Eagle Agencies Pvt. Ltd.,Novelty Realtors Pvt. Ltd. &. Welplan Traders Pvt. Ltd. with which transaction have taken place so as to examine the source of fund brought in the books of accounts in the form of unsecured loan as well as share capital and share premium. The same has been dealt in the following manner: A. Assessment Year 2013-14 Even the source of source of funds under question infused by the Bhillai Properties Investments Pvt Ltd and Accord Vanijya Pvt. Ltd. amounting to Rs. 1,65,00,000/ and Rs. 1,80,00,000/- during the F.Y 2012-13 were substantiated and explained that the same is obtained by them from Millennium Urja Limited another group / associate company of the group, which in turn obtained the funds from promoters of the group (namely Anand Kumar Kedia, Prasann Kumar Kedia and Shweta Kedia, they have received the fund from maturity of life insurance policies at that time apart from their own balances). Hence the conclusion drawn by the AO that these funds received by the assessee company is the unaccounted funds of the assessee routed in form of unsecured loans stands erroneous and even factually incorrect. (Copy of submissions along with Bank Statements of concerned parties are appearing on page no. 384 to 407 of the paper book) a) The promoters of group received the proceeds from the maturity of Insurance policies, obtained by them in earlier years, between 23rd January 2013 to 28th January 2013 out of which Rs. 3,17,95,000/- were subsequently transferred to the group company namely Millennium Urja Ltd. between the same period. b) Apart from this policy maturity proceeds, Millennium Urja has sourced the balance amount of Rs. 27,05,000/- from the members of Kedia Family and other prime real estate company of the group namely Smilington Holdings Pvt. Ltd. which have. transferred these funds out of loans obtained from the independent third parties. and its internal accruals respectively c) That Millennium Urja Limited in turn advanced these funds to Accord Vanijya Pvt. Ltd. and Bhillai Properties Investment Pvt. Ltd. amounting to Rs. 1,80,60,000/- and Rs. 1,65,00,000/- respectively between 23rd January 2013 to 25th March 2013. d) The Accord Vanijya Pvt. Ltd. and Bhillai Properties Investment Pvt. Ltd. transferred, out of the funds received from Millennium Urja Limited, to the assessee company amounting to Rs. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 55 of 68 Page 55 of 68 1,80,00,000/- and Rs. 1,65,00,000/- respectively between 23rd January 2013 to 25th March 2013. e) The loan under question taken from the concern group companies having its promoters and their relatives as directors (namely Mr. Anshuman Kedia and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. f) The loan under question is fully explained and substantiated, and was repaid in the next year itself (F.Y. 2014-15). Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. B. Assessment Year 2015-16 The Assessee was having the opening balance of the loan from the concerned group companies amounting to Rs. 6,63,00,000/- as on 01.04.2014 and received a sum of Rs. 11, 34,63,932/- from the concerned companies during the year and repaid Rs. 3,63,13,268/- through banking channels during the year and liquidated the balance loan of Rs. 14, 34,50,664/- by way of issuance of equity shares upon conversion of the loan into equity during the year. The Ld. AO made the addition of Rs. 14,34,50,876/- (even making the additions in respect of opening balances of the loan carried forward from earlier years and converted into share capital during the year) a) Bhillai Properties Investments Pvt Ltd the assessee has not received any amount from the aforesaid group company during the year (except Rs. 200/-) however, liquidated the loan taken by the Assessee from the aforesaid group company interalia by issuance of share capital of the aforesaid amount during the year, which was added by ld. AO as unexplained cash credit for the year. Balance Sheet, I.T Ack, ledger A/c (appearing on page no. 453-465 of the paper book) , PAS -3 allotment of share by the Assessee Company (appearing on page no. 358-370 of the paper book), Loan confirmation of the lender company (appearing on page no. 347-348 of the paper book), The share capital was issued to the associate / group company namely Bhillai Properties Investments Pvt. Ltd Rs. 63,25,200/- during the F.Y 2014-15 against opening balance of the loan amount carry forwarded from earlier years even prior to 1.04.2012 {apart from the further loans taken from Bhillai Properties Investments Pvt Ltd amounting to Rs. 1,65,00,000/- during the F.Y 2012-13, which were funded from the loans obtained from Millennium Urja Limited another group / associate company of the group, which in turn obtained the funds from promoters of the group (namely Anand Kumar Kedia, Prasann Kumar Kedia and Shweta Kedia, they have received the fund from maturity of life insurance policies at that IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 56 of 68 Page 56 of 68 time apart from their own balances) as explained and substantiated in respect of such loan amount for A.Y. 2013-14}. Hence the conclusion drawn by the A.O that these funds received by the assessee company is the unaccounted funds of the assessee routed in form of unsecured loans stands erroneous and even factually incorrect. b) Accord Vanijya Pvt Ltd the assessee has not received any amount from the aforesaid group company however, liquidated the loan taken by the Assessee from the aforesaid group company interalia by issuance of share capital of the aforesaid amount during the year, which was added by ld. AO as unexplained cash credit for the year. Balance Sheet, I.T Ack, ledger A/c (appearing on page no. 466-477 of the paper book), , PAS -3 allotment of shares by the Assessee Company (appearing on page no. 358-370 of the paper book), Loan confirmation of the lender company (appearing on page no. 351-352 of the paper book) The share capital was issued to the associate / group company namely Accord Vanijya Pvt Ltd of Rs. 2,36,61,744/- during the F.Y 2014-15 against opening balance of the loan amount carry forwarded from earlier years even prior to 1.04.2012 {apart from the further loans taken from Accord Vanijya Pvt Ltd amounting to Rs. 1,80,00,000/- during the F.Y 2012-13, which was funded from the loans obtained from Millennium Urja Limited another group / associate company of the group, which in turn obtained the funds from promoters of the group (namely Anand Kumar Kedia, Prasann Kumar Kedia and Shweta Kedia, they have received the fund from maturity of life insurance policies at that time apart from their own balances) as explained and substantiated in respect of such loan amount for A.Y. 2013-14}. Hence the conclusion drawn by the A.O that these funds received by the assessee company is the unaccounted funds of the assessee routed in form of unsecured loans stands erroneous and even factually incorrect. c) Mayfair Mercantiles Pvt Ltd, . The assesse company received the loan amounting to Rs. 73,00,200/ during the year from the aforesaid group company , against which the shares were issued by the Assessee company by conversion of such loan into equity .Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor (appearing on page no. 401-414, 529-541 of the paper book), PAS -3 in respect of allotment of shares by the Assessee company (appearing on page no. 358-370 of the paper book). Even source of source said loan of the loan creditor group company was explained and substantiated. Source of amount of Rs. 73,00,200/- advanced by M/s Mayfair Mercantiles Pvt Ltd to the Assessee Company is the receipt of fund Rs. 4,34,249/ - on 12.09.2014 from Venkateshwar Investment & Finance Pvt Ltd, Rs. 10,90,000/- and Rs. 58,00,000/- on 12.09.2014 & IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 57 of 68 Page 57 of 68 18.09.2014 from Prasann Kumar Kedia. The source of Venkateshwar Investment & Finance Pvt Ltd is the receipt of proceed Rs. 21,91,041/- on 10.09.2014 from sale of shares of AABL. The source of Prasann Kumar Kedia is the receipt of fund from family members and associate / group Company on 12.09.2014 from Anand Kumar Kedia HUF Rs. 3,60,000/-, on 12.09.2014, from Ramdulari Kedia Rs. 7,30,000/- and on 17.09.2014 Rs. 58,00,000/- from Springbok Properties Pvt Ltd. The source of Anand Kumar Kedia HUF is the receipt of fund Rs. 3,59,123/- from Venkateshwar Investment & Finance Pvt Ltd on 12.09.2014, the source of Ram Dulari Kedia is the receipt of fund from Venkateshwar Investment & Finance Pvt Ltd Rs. 7,30,444/ - on 12.09.2014., the source of Springbok Properties Pvt Ltd is the receipt of fund from Millennium Urja Limited on 17.09.2014 for advancing Rs. 58, 00,000/- to Springbok Properties Pvt Ltd is the receipt of FDR on 16.09.2014 Rs. 5,47,84,000/- ( copy of submission, bank statements appearing on page no. 512-514, 529-541 of the paper book). Hence the conclusion drawn by the A.O that these funds received by the assessee company is the unaccounted funds of the assessee routed in form of unsecured loans stands erroneous and even factually incorrect. d) Moriya Merchandise Pvt Ltd, The assessee company received the loan amounting to Rs. 5,00,00,280/ during the year from the aforesaid group company, against which the shares were issued by the Assessee company by conversion of such loan into equity. Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor (appearing on page no. 415-432, 353-355 of the paper book), PAS -3 in respect of allotment of shares by the Assessee company (appearing on page no. 358-370 of the paper book). Even source of source said loan of the loan creditor group company was explained and substantiated. The amount under question infused by the group company out of sale proceed of the investment held by the concerned loan creditor company from over the years (for the period even prior to 1 st April 2012), which was disposed by the loan creditor company during the year for the purpose of making onward investment into the brewery company of the group. Statement showing the details of investment sold, affidavit of buyers confirming sale of investment for the F.Y 2014-15 of the lender Company, (appearing on page no. 542-562 of the paper book). The Balance sheet, Profit & Loss account and Income tax acknowledgement of the lending Company for the year ended on 31st March 2012, reflecting investments in investee companies (appearing on page no. 600-610 of the paper book). Copy of form no.2 return for the allotment of shares to the lenders company by investee companies reflecting allotment of shares to the Moriya Merchandise Pvt Ltd and carrying such IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 58 of 68 Page 58 of 68 investment from from financial year 2011-12 (appearing on page no. 612-465 of the paper book), Copy of sale invoice for the sale of investment issued in F.Y 2014-15 Rs. 5,00,00,000 (appearing on page no. 655-667 of the paper book), Copy of Balance Sheet and Profit & Loss account, Income Tax Acknowledgement, Bank Statement of the concerned buyers companies from whom share sale proceeds received by lender Company (appearing on page no. 668-869 of the paper book). The loan under question taken from the concern group companies having its promoters/their relatives as directors (namely Mr. Vimal Kumar Tibrewal and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. The loan under question is fully explained and substantiated, and even source of source of such loan (being sale proceeds of investment held by concerned loan creditor group company from the period F.Y. 2011-12 onwards) was explained and substantiated. The aforesaid loan creditor company already subjected to scrutiny assessment u/s 143(3) of the Act vide assessment order dated 21.03.2014 for A.Y. 2012-13 (for the year in which the concerned share capital was raised by the loan creditor company), Copy of the Assessment order appearing on page no. 23-26 of additional paper book filed on 30 th November, 2021. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. e) Eagle Agencies Pvt Ltd, The assessee company received the loan amounting to Rs. 5,61,63,252/- during the year from the aforesaid group company, out of which Rs. 5,61,63,240 converted into equity. Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor (appearing on page no. 433-452, 356-357 of the paper book), PAS -3 in respect of allotment of shares by the Assessee company (appearing on page no. 358-370 of the paper book). Even source of source said loan of the loan creditor group company was explained and substantiated. The amount under question infused by the group company out of sale proceed of the investment held by the concerned loan creditor company from over the years (for the period from F.Y. 2010-11 onwards), which was disposed by the loan creditor company during the year for the purpose of making onward investment into the brewery company of the group. Statement showing the details of investment sold, affidavit of buyers confirming sale of investment for the F.Y 2014-15 of the lender Company (appearing on page no. 563-593 of the paper book). The Balance sheet, Profit & Loss account and Income tax acknowledgement of the lending Company for the year ended on 31st March 2012, reflecting investments in investee companies and carrying such investment from financial year IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 59 of 68 Page 59 of 68 2011-12 (appearing on page no. 870-875 of the paper book), Copy of Form no. 2 return for the allotment of shares to the lender company by the investee companies and carrying of such investment by the concerned lender companies from F.Y. 2011-12 onwards (appearing on page no. 876-888 of the paper book) Copy of statement showing the details of investment sold along with investment sale invoices raised during the financial year 2014-15 of Rs. 5,61,84,000/- (appearing on page no. 889- 907 of the paper book), Copy of Balance Sheet and Profit & Loss account, Income Tax Acknowledgement, Bank Statement of the concerned buyers companies from whom share sale proceeds received by lender Company (appearing on page no. 908-1162 of the paper book). The loan under question taken from the concern group companies having its promoters/their relatives as directors (namely Mr. Anshuman Kedia and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. The loan under question is fully explained and substantiated, and even source of source of such loan (being sale proceeds of investment held by concerned loan creditor group company from the period F.Y. 2010-11 onwards) was explained and substantiated. The aforesaid loan creditor company already subjected to scrutiny assessment u/s 143(3) of the Act vide assessment order dated 08.02.2014 for A.Y. 2011-12 (for the year in which the concerned share capital was raised by the loan creditor company), Copy of the Assessment order appearing on page no. 27-30 of additional paper book filed on 30 th November, 2021. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. C. Assessment Year 2016-17 The Assessee has received a sum of Rs. 19,96,89,111/- from the concerned companies during the year and repaid Rs. 4,92,00,000/- through banking channels during the year and liquidated the loan of Rs. 13,63,51,728/- by way of issuance of equity shares upon conversion of the loan into equity during the year. The Ld. AO made the addition of Rs. 19,96,89,111/- a) Novelty Realtors Pvt Ltd, the assessee company received the loan amounting to Rs. 16,76,77,790/ during the year from the aforesaid group company, out of which Rs. 4,92,00,000/- has been retuned/repaid during very same year and loan amount i.e., 10,53,00,000/- against which the shares were issued by the Assessee company by conversion of such loan into equity, leaving the closing balance (as on date 31.03.2016) of Loan- Rs 1,31,77,790/-. Even source of source said loan of the loan creditor group company was explained and IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 60 of 68 Page 60 of 68 substantiated. The amount under question infused by the group company out of sale proceed of the investment held by the concerned loan creditor company from over the years (for the period from F.Y. 2009-10 onwards), which was disposed by the loan creditor company during the year for the purpose of making onward investment into the brewery company of the group. Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor for the financial year 2015-16 (appearing on page no. 398-414, 346-350 of the paper book), PAS -3 allotment of share by the Assessee Company (appearing on page no. 354-368 of the paper book), Statement showing the details of investment sold, sale invoice, affidavit of buyers company confirming sale of investment for the F.Y 2015-16 of the lender Company (appearing on page no. 473- 505 of the paper book), The Balance sheet, Profit & Loss account and Income tax acknowledgement of the lending Company for the year ended on 31st March 2012 and 31 st March, 2016, reflecting investments in investee companies (appearing on page no. 720-733, 398-404 of the paper book). Copy of Audited Balance Sheet and Profit and Loss A/c, Annual Return, form no.2 return for the allotment of shares to the lenders company by the concerned investee companies, reflecting allotment/issuance of shares to the Novelty Realtors Pvt Ltd carrying such investment from financial year 2011-12 (appearing on page no. 751-897 of the paper book)., Copy of sale invoice for the sale of investment issued in F.Y 2015-16 Rs. 17,10,00,000/- (appearing on page no. 898-954 of the paper book) , Copy of Balance Sheet and Profit & Loss account, Income Tax Acknowledgement, Bank Statement of the concerned buyers companies from whom share sale proceeds received by lender Company (appearing on page no. 955-1386 of the paper book) The loan under question taken from the concern group company having its promoters/their relatives as directors (namely Mr. Anshuman Kedia and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. The loan under question is fully explained and substantiated, and even source of source of such loan (being sale proceeds of investment held by concerned loan creditor group company from the period F.Y. 2009-10 onwards) was explained and substantiated. The aforesaid loan creditor company already subjected to scrutiny assessment u/s 143(3)/147 of the Act vide assessment order dated 25.02.2014 and 30.10.2017 for A.Y. 2010-11 (for the year in which the concerned share capital was raised by the loan creditor company) Copy of the Assessment orders appearing on page no. 31-37 of additional paper book filed on 30 th November, IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 61 of 68 Page 61 of 68 2021. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. b) Moriya Merchandise Pvt Ltd, the assessee company received the loan amounting to Rs. 3,20,11,321/- during the year from the aforesaid group company, out of aforesaid loan Rs. 3,10,51,728/-against which the shares were issued by the Assessee company by conversion of such loan into equity, leaving the closing balance (as on date 31.03.2016) of Loan Rs 9,59,593/-. Even source of source said loan of the loan creditor group company was explained and substantiated. The amount under question infused by the group company out of sale proceed of the investment held by the concerned loan creditor company from over the years (for the period even prior to 1 st April 2012) , which was disposed by the loan creditor company during the year for the purpose of making onward investment into the brewery company of the group. Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor for the financial year 2015-16 (appearing on page no. 415-426, 351-352 of the paper book), PAS -3 allotment of share by the Assessee Company (appearing on page no. 354-368 of the paper book)., Statement showing the details of investment sold, affidavit of buyers confirming sale of investment for the F.Y 2014-15 of the lender Company (appearing on page no. 506-518 of the paper book)., The Balance sheet, Profit & Loss account and Income tax acknowledgement of the lending Company for the year ended on 31st March 2012, reflecting investments in investee companies (appearing on page no. 525- 535 of the paper book). Copy of form no.2 return for the allotment of shares to the lenders company by the concerned investee companies, reflecting allotment of shares to the Moriya Merchandise Pvt Ltd carrying such investment from financial year 2011-12 onwards (appearing on page no. 537-566 of the paper book)., Copy of sale invoice for the sale of investment issued in F.Y 2015-16 Rs. 2,94,00,000 (appearing on page no. 567-579 of the paper book)., Copy of Balance Sheet and Profit & Loss account, Income Tax Acknowledgement, Bank Statement of the concerned buyers companies from whom share sale proceeds received by lender Company (appearing on page no. 580-719 of the paper book).. The loan under question taken from the concern group company having its promoters/their relatives as directors (namely Mr. Vimal Kumar Tibrewal and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. The loan under question is fully explained and substantiated, and even source of source of such loan (being sale proceeds of investment held by concerned loan creditor group company from the period F.Y. 2011-12 onwards) was explained and substantiated. The aforesaid loan creditor IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 62 of 68 Page 62 of 68 company already subjected to scrutiny assessment u/s 143(3) of the Act vide assessment order dated 21.03.2014 for A.Y. 2012-13 (for the year in which the concerned share capital was raised by the loan creditor company) Copy of the Assessment orders appearing on page no. 23-26 of additional paper book filed on 30 th November, 2021. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. D. Assessment Year 2017-18 The Assessee was having the opening balance of the loan from the concerned group companies amounting to Rs. 1,41,37,383/- as on 01.04.2014 and received a sum of Rs. 2,71,03,636/- from the concerned companies during the year and repaid Rs. 2,38,50,000/- through banking channels during the year and was having closing balance of Rs. 1,73,91,019/- at the year end. The Ld. AO made the addition of Rs. 2,84,31,426/- (even making the additions in respect of opening balances of the loan carried forward from earlier years) a) Novelty Realtors Pvt Ltd, The assessee company received the loan amounting to Rs. 1,50,00,000/- during the year from the aforesaid group company and was having a opening balance of Rs. 1,31,77,790/- carried forward from earlier years, out of which Rs. 1,18,50,000/- has been retuned/repaid during the year and was having outstanding closing balance of Rs. 1,63,27,790/- of the loan amount at the year end, which was added by the Ld. AO (as against the loan of Rs. 1,50,00,000/- received by the Assessee during the year). Even source of source said loan of the loan creditor group company was explained and substantiated. The amount under question infused by the group company out of sale proceed of the investment held by the concerned loan creditor company from over the years (from the F.Y. 2009-10 onwards), which was disposed by the loan creditor company during the year for the purpose of making onward investment into the brewery company of the group. Balance Sheet, I.T Ack, ledger A/c, Bank statement, Loan confirmation of the loan creditor for the financial year 2016-17 (appearing on page no. 372-394, 342 of the paper book), Statement showing the details of investment sold, sale invoice, affidavit of buyers company confirming sale of investment for the F.Y 2016-17 of the lender Company (appearing on page no. 443-450 of the paper book), The Balance sheet, Profit & Loss account and Income tax acknowledgement of the lending Company for the year ended on 31st March 2012, and 31 st March, 2016, reflecting investments in investee companies (appearing on page no. 454- 483 of the paper book), Copy of balance Sheet, Annual Return, IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 63 of 68 Page 63 of 68 form no.2 return for the allotment of shares to the lenders company by investee companies, reflecting allotment/Issuance of shares to the Novelty Realtors Pvt Ltd carrying such investment from financial year 2011-12 (appearing on page no. 485-518 of the paper book), Copy of sale invoice for the sale of investment issued in F.Y 2016-17 Rs. 1,50,00,000/- (appearing on page no. 519-522 of the paper book), Copy of Balance Sheet and Profit & Loss account, Annual Return,Income Tax Acknowledgement, Bank Statement of the concerned buyers companies from whom share sale proceeds received by lender Company (appearing on page no. 523-616 of the paper book). The loan under question taken from the concern group company having its promoters/their relatives as directors (namely Mr. Anshuman Kedia and Mr. Kamal Kumar Tibrewal) and shares of the loan creditor companies totally controlled and owned by the promoters and having common place of business as of the assessee company. The loan under question is fully explained and substantiated, and even source of source of such loan (being sale proceeds of investment held by concerned loan creditor group company from the period F.Y. 2009-10 onwards) was explained and substantiated. The aforesaid loan creditor company already subjected to scrutiny assessment u/s 143(3)/147 of the Act vide assessment order dated 25.02.2014 and 30.10.2017 for A.Y. 2010-11 (for the year in which the concerned share capital was raised by the loan creditor company) Copy of the Assessment orders appearing on page no. 31-37 of additional paper book filed on 30 th November, 2021. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. b) Welplan Traders Pvt Ltd. That the loan under question from the prime property holding company of the group amounting to Rs. 1,20,00,000/- was undertaken by the assessee company for the purpose of expansion of its brewery project. The source of Rs.1,20,00,000/- given by Welplan Traders Pvt Ltd to the Mount Everest Breweries Ltd is receipt of sale proceed of immovable property situated in Indore Rs. 51,000/- on 14.10.2016, Rs. 25,00,000/- on 14.10.2016, Rs. 20,00,000/- on 21.10.2016, Rs. 25,00,000/- on 04.11.2016, Rs. 25,00,000/- on 07.11.2016 and Rs. 25,00,000/- on 08.11.2016. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. c) Moriya Merchandise Pvt Ltd. That the loan under question from Moriya Merchandise Pvt. Ltd. is the interest amount of Rs. 1,03,636/- on the carry forward balance of loan taken from group Company. No loan taken during the financial year 2016-17 from Moriya Merchandise Pvt Ltd. Thus, Ld. AO’s observation is totally incorrect baseless and totally based on hypothetical presumption. IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 64 of 68 Page 64 of 68 30. On examining the complete details of transactions carried out between the assesse and the alleged seven cash creditor companies, complete details of documents furnished to prove the identity and creditworthiness of the cash creditors, and also the genuineness of transactions carried out in the form of unsecured loan and the share capital, before us Ld. CIT-DR failed to controvert the fact that all the alleged companies are closely held by the directors and promoters of the assessee and other group companies. Ld. CIT-DR also failed to controvert the fact that ld. CIT(A) took double view in respect of amount received by the assessee from very same loan transactions by taking a separate stand in respect of proving the identity and creditworthiness of cash creditors and genuineness of the transaction for the amount which was repaid vis-à-vis amount converted into share capital of the assessee. 31. We also notice that Ld. CIT(A) failed to appreciate that during the course of search/in the course of assessment proceedings, the documents found/provided by Appellant ( copy of the Bank statement along with the Balance Sheet and the Profit & Loss Account, and ITR acknowledgement of the aforesaid companies), reflecting these investments held by the company from over the years (from the period prior to 01.04.2012) and which were later on liquidated for the purpose making the investment in the appellant group concern and the same are reflected in the regular books of accounts of the company and therefore treating such material as incriminating is totally misplaced. 32. We also observe that the learned CIT (Appeals) erred in confirming the addition made by A.O merely on the basis of surmises and conjectures and without any substance as no incriminating material have been found during course of search and seizure operations conducted on various office/factory/other premises of the appellant in respect of any unaccounted business/turnover/stock/assets, which Ld. CIT(A) himself accepted while allowing the appeal in respect of part of receipt of very same loan in the order. 33. We also notice that except relying upon the findings of the Investigation wing Ld. AO could not bring on record any cogent material to establish that the lender Company from whom appellant had claimed to have received loan was non-existent or bogus or paper company which shows that the appellant is able to fully discharge its onus of proving the genuineness of the loan transaction beyond all doubts. That during the course of search a stock audit was also done in the case of appellant where no discrepancy was found. That the identity of the lender companies is itself proven from the fact that the assessments in the case of such lender companies have been framed either by the A.O himself or by some other assessing officer. That the genuineness of the transactions also gets fully established as the transactions have been taken place through banking channel and IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 65 of 68 Page 65 of 68 these have been confirmed by the lender companies. They were having sufficient net owned funds for making advances to the appellant or any one also. That the appellant has also been able to establish even the sources of the source in the hands of the lender companies. The lender companies are regularly assessed to Income Tax. During the course of search no incriminating material or any other evidence was found from which it could have been inferred that the appellant company had provided any fund to the lender Company, as appearing in the very same order. 34. We also note that the learned CIT(Appeals) has given a finding that it has been established and proven beyond doubt that the loan taken by appellant from lender companies is genuine and therefore the interest payment on loan is also considered as genuine business expenditure and the appellant has also deducted applicable TDS on the interest paid and no delay in payment of TDS to the government by the appellant has been brought on record by the learned assessing officer. 35. We also notice that in the case of two cash creditors namely Bhilai Properties Investment Pvt. Ltd. and Accord Vanijya Pvt. Ltd. There was an opening balance of Rs. 75,00,000/- and Rs.2.42 cr. as on 01.04.2012. ld. Assessing Officer while making addition for unexplained share capital and unexplained unsecured loan also considered the opening balance totalling to Rs. 3,17,00,000/- appearing in the books as on 01.04.2012. Out of this sum Ld. CIT(A) confirmed the addition of Rs.2,99,86,944/- for the year under 2015- 16 towards unexplained share capital addition made by the ld. Assessing Officer It is judicially settled that each assessment year is separate and there is no reason for making addition of opening balance of previous year for which assessment is being framed. In other words Ld. Revenue authorities cannot includ certain receipts as income of the year which actually pertains to some other years. As in the case of assessee the amount which was received prior to A.Y. 2013-14 has been added to the income of assessee during A.Y. 2015- 16. For arriving on this view we find support from following judicial pronouncements. a) In the case of ITAT, New Delhi in Suraj Bhan Bajaj v. Income Tax officer [2008] 21 SOT 22 (Delhi) herein Hon’ble Tribunal has held that “each assessment year is separate and there is no reason for making addition in respect of gifts received in years earlier to the year for which assessment is being framed. Even while invoking deeming provisions for making addition, Income Tax Act does not empower the revenue authorities to include certain receipt as income of the year which actually pertains to some other years. The Commissioner (Appeals), therefore, correctly deleted the addition in respect of part of the gifts and loans which was not pertaining to the year under consideration, and was received IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 66 of 68 Page 66 of 68 by the assessee in earlier years and was explained before the lower authorities vide his cash flow statement”. b) In the case of CIT v. Usha Stud Agricultural Farms Ltd. [2008) 301 ITR 384 (Delhi) Section 68 of the Income-tax Act, 1961 - Cash credits - Assessment year 1999-2000 - During assessment proceedings, Assessing Officer noticed that assessee had shown certain amount as advance from one 'B1 - As assessee failed to file confirmation from B, Assessing Officer made addition of that amount under section 68 - On appeal. Commissioner (Appeals) deleted addition on ground that said cash credit was appearing in books of assessee over past four to five years and, thus, it was not fresh credit entry pertaining to relevant assessment year - Tribunal dismissed appeal filed by revenue -Whether finding recorded by Commissioner (Appeals) was a finding of fact and, as such, no fault could be found with order of Tribunal in endorsing decision of Commissioner (Appeals) - Held, yes 36. It is also not in dispute that all the alleged seven cash creditors are closely held owned and controlled by assessee and its associated group companies. Directors/promoters of the assessee group companies and their relatives are directors and shareholders in the alleged cash creditor companies. Also perusal of the balance sheet of these seven companies shows that prior to A.Y.2013-14 there were sufficient reserves and surplus and share capital which has actually carried forwarded to A.Y.2013-14 and in subsequent years. These accumulated funds stood invested as loans in other entities. The transaction with the assessee company are merely shift over from one loan account to another. Assessee has satisfactorily proved the source of source of the alleged funds received/ transferred to share capital account for the years under appeal. The documents seized during the course of search are not incriminating in nature as they not indicating that the accumulated reserves and other unsecured loan taken by the alleged cash creditor companies are bogus nor any cogent material is found to prove that the alleged sum is unaccounted income of the assessee routed through these cash creditors in question before us. The main basis of the Ld. Assessing Officer for making addition was the theory of meagre income which was in the nature of surmises and conjecture and the statement given u/s 132 of the Act but the same was retracted immediately within five days of the conclusion of search which in itself sufficient to prove that the alleged statement did not carry any evidentiary value as it was claimed to have been taken at odd hours under presser of the search team and was under stress and duress. It is also proved by the documentary evidences that some portion of the alleged addition are the funds infused by the promoters/director/shareholder of assessee company and their relatives received on maturity of Life Insurance Policy during the year 2013 and the same fund was routed through IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 67 of 68 Page 67 of 68 group company namely Millennium Urga Ltd. to the other companies and thereafter reaching in the bank account of the assesse company. 37. We also find that most of the alleged cash creditors were subjected to scrutiny assessment prior to A.Y. 2013-14 during which there was capital form and also security premium was received and nothing adverse was held against these companies. Therefore, so far as identity and creditworthiness of the alleged cash creditor companies are concerned, we are fully satisfied and the assessee has discharged its onus to prove the same. As regards the genuineness of the transaction is concerned as we have stated in earlier paras that promoters, directors and shareholders of the alleged cash creditor companies are also the promoters, directors and shareholders of the assessee and group companies. In other words all alleged cash creditors are closely held companies with that of assessee group and the transactions carried out by the assesse are not with any unknown or unrelated person for which genuineness needs to be proved but they are within their own closely held companies which were carried out for managing the funds required for the purpose of business of Breweries as well as for taking finance from banks, for giving growth to the sales, for acquiring fixed assets and expansion of the business. We, therefore, are satisfied with the genuineness of the alleged transaction in the nature of unsecured loan/share capital/security premium taken by the assessee from the alleged seven companies. 38. We, therefore under the given facts and circumstances of the case find that with respect to the alleged cash creditor namely Bhilai Properties Investments Pvt. Ltd., Accord Vanijya Pvt. Ltd., Mayfair Mercantiles Pvt. Ltd., Moriya Merchandise Pvt. Ltd., Eagle Agencies Pvt. Ltd.,Novelty Realtors Pvt. Ltd. &. Welplan Traders Pvt. Ltd. the assesse has successfully proved to our satisfaction their identity and creditworthiness by providing documentary evidences, providing proof of source of source and also proved the genuineness of the transactions, thus, fulfilling all three parameters i.e. identity and creditworthiness of cash creditors and genuineness of transaction. We therefore, hold that no addition for unexplained cash credit u/s 68 r.w.s. 115BBE of the Act was called for in the assessment completed for A.Ys. 2013-14, 2015-16, 2016-17 & 2017-18 in respect of the alleged sum received from the above stated alleged cash creditors. Thus, the addition for unexplained cash credit, unexplained share capital/premium and unexplained expenditure made by the ld. AO at Rs. 3,45,00,000/-, Rs.14, 34,50,876/-, Rs.19,96,89,111/-, Rs.2,84,31,426/- for A.Y.2013-14, 2015-16, 2016-17 & 2017-18 respectively was uncalled for and the same is deleted. We, thus, confirm the finding of Ld. CIT(A) to the extent of deletion of the addition of Rs. 10,89,81,438/- (Rs.3,45,00,000/-, Rs.12, Rs.6,23,77,790/- & Rs.1,21,03,636/-) and reverse the finding of the ld. CIT(A) confirming the remaining addition totaling to Rs. 29,70,89,975/-(Rs. Nil, Rs.14,34,50,864/-, Rs.13,73,11,321/- & IT(SS)A No.117 to 119/Ind/2021 Springbok Properties P. Ltd. Page 68 of 68 Page 68 of 68 Rs.1,63,27,790/-) for A.Ys.2013-14, 2015-16, 2016-17 & 2017-18. Thus, grounds on merit raised by the revenue are dismissed for 2013- 14, 2016-17 & 2017-18 and those raised by the assessee for A.Y. 2015-16 to A.Y. 2017-18 are allowed as per terms indicated above. 26. The facts and the creditors are identical in case of assessee as well as in case of M/s. Mount Everest Breweries ltd a group concern. Therefore, to maintain rule of consistency we follow the earlier order of coordinate Bench of this Tribunal in case of group concerns M/s. Mount Everest Breweries wherein identical loan transactions and repayment of the same by issuing shares by the assessee has been found to be proved beyond any doubt we hold that the assessee has discharged its onus to prove the identity and creditworthiness of the loan creditors as well as the genuineness of the transactions. Accordingly, the additions made by the AO and confirmed by the CIT(A) are deleted. 27. In the result, appeals of assessee for the AYs 2016-17 to 2018-19 are allowed. Order pronounced in the open court on 17.05.2023. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore, 17.05.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore