Shri Ramswaroop Shivhare, Gwalior V. The ACIT,Central-1,Bhopal, Bhopal

ITSSA 126/Ind/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4720 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Unexplained expenditure; Capital asset; Gift; Business income; Search and seizure; Loose papers; Document seized; Principle of natural justice; Opportunity of cross examination; Maximum Marginal Rate; Source of fund; Additional evidence; Question of law; Fair market value; Documents seized; TDS; Audi alteram partem
• Section: 69; 145; 56; 2; 69C; 139; 143(3); 2(14); 153A; 40(a)(ia); 69B; 192; 139(1); 142(2A); 44AB; 2(A); 13; 145(3); 22; 153C

Judgement Text

आयकरअपील यअ धकरण,इंदौर यायपीठ,इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING IT(SS)A No.12 to 18/Ind/2021 Assessment Year: 2010-11 to 2016-17 JCIT (OSD) Central-1, Bhopal बनाम/ Vs. Shri Ramswaroop Shivhare, Gwalior (Appellant) (Respondent ) P.A. No.AGHPS8985R IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare, Gwalior बनाम/ Vs. ACIT Central-1, Bhopal (Appellant) (Respondent ) P.A. No.AGHPS8985R Appellant by S/Shri Anil Kamal Garg & Arpit Gaur, CAs Respondent by Shri P.K. Mitra, CIT-DR Date of Hearing: 20.01.2022 Date of Pronouncement: 19.04.2022 IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 2 आदेश / O R D E R PER BENCH: The above captioned cross appeals are directed against the Common Order of the Ld. Commissioner of Income Tax (Appeals)-3, Bhopal (in short ‘CIT(A)’), dated 02.07.2020, which is arising out of the Common Assessment Order u/s. 153A r.w.s. 143(3) for A.Y. 2010-11 to A.Y. 2015-16 and u/s. 143(3) for A.Y. 2016-17 of the Income-Tax Act, 1961 (in short, ‘the Act’) dated 10.08.2018 framed by the ACIT (Central) -I, Bhopal. 2.1 Grounds of appeal raised by the Revenue for AY 2010-11 in IT(SS)A No.12/Ind/2021: “1. On the fact and in the circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.7,48,05,284/- made by the AO on account of undisclosed income of liquor trading business.” 2.2 Grounds of appeal raised by the Revenue for AY 2011-12 in IT(SS)A No.13/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.24,09,50,400/- made by the AO on account of undisclosed income of liquor trading business.” 2.3 Grounds of appeal raised by the Revenue for AY 2012-13 in IT(SS)A No. 14/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 25,46,55,134/- made by the AO on account of undisclosed income from liquor trade business. 2. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 5,41,800/- made by the AO on account of unexplained income from mining. 3. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,83,62,600/- made by the AO on account of undisclosed investment. 4. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 40,32,000/- made by the AO on account of undisclosed investment.” IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 3 2.4 Grounds of appeal raised by the Revenue for AY 2013-14 in IT(SS)A No. 15/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 86,36,20,532/- made by the AO on account of undisclosed income from liquor trade business.” 2.5 Grounds of appeal raised by the Revenue for AY 2014-15 in IT(SS)A No. 16/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 46,28,52,994/- made by the AO on account of undisclosed income from liquor trade business. 2. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 53,57,275/- made by the AO on account of interest from capital.” 2.6 Grounds of appeal raised by the Revenue for AY 2015-16 in IT(SS)A No.17/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 45,70,77,387/- made by the AO on account of undisclosed income from liquor trade business.” 2.7 Grounds of appeal raised by the Revenue for AY 2016-17 in IT(SS)A No. 18/Ind/2021: “1. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 24,43,63,247/- made by the AO on account of undisclosed income from liquor trade business. 2. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 22,33,960/- made by the AO on account of unexplained cash found and seized during course of search. 3. On the fact and in the Circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs. 1,75,50,000/- made by the AO on account of undisclosed investment.” 2.8 Grounds of appeal raised by the Assessee for AY 2010-11 in IT(SS)A No.125/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 4 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 2c) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for making proposal for referring the case of the appellant to Special Audit under s.142(2A) of the Act without considering and appreciating the material fact that the same sets of books of account of the appellant had also undergone scrutiny assessment under s.143(3) of the Act for the relevant assessment year and the then AO has passed the assessment order in the case of the appellant after verification of such books of account only. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 5 extent of Rs.3,83,03,319/- in the appellant’s income which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 5 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure were detected during the course of search and seizure operations under s.132(1) of the Act. 7a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 7b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 8a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.3,83,03,319/- made by the AO in the appellant’s income on account of alleged undisclosed capital investment of the appellant in so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business and therefore, neither he was required nor he actually made any capital investment in any syndicate. 8b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.3,83,03,319/-, IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 6 merely on some incomplete and fictitious accounts, documents and datas, the veracity whereof by themselves were not getting established. 8c) That, without prejudice to the above and without in any manner admitting the existence of any Syndicate and making of any investment by the appellant in such Syndicates, even if for the sake of presumption, it is assumed that the appellant had formed some association of persons, in the form of Syndicates, for carrying out the business of liquor and also made some investments in such Syndicates, then also working of the amount of alleged undisclosed investment so determined by the AO at Rs.3,83,03,319/- and confirmed by the learned CIT(A) is not correct but excessive. 8d) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition of Rs.3,83,03,319/- as the appellant’s undisclosed investment in liquor business without considering and appreciating the investment, by way of own capital as well as borrowed funds, already recorded in the regular books of account maintained by the appellant and duly shown in the audited financial statements furnished along with the return of income. 9. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.9 Grounds of appeal raised by the Assessee for AY 2011-12 in IT(SS)A No.126/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 7 without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 2c) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for making proposal for referring the case of the appellant to Special Audit under s.142(2A) of the Act without considering and appreciating the material fact that the same sets of books of account of the appellant had also undergone scrutiny assessment under s.143(3) of the Act for the relevant assessment year and the then AO has passed the assessment order in the case of the appellant after verification of such books of account only. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 5a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 5b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 8 were detected during the course of search and seizure operations under s.132(1) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 7. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.10 Grounds of appeal raised by the Assessee for AY 2012-13 in IT(SS)A No. 127/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 9 Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 2c) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for making proposal for referring the case of the appellant to Special Audit under s.142(2A) of the Act without considering and appreciating the material fact that the same sets of books of account of the appellant had also undergone scrutiny assessment under s.143(3) of the Act for the relevant assessment year and the then AO has passed the assessment order in the case of the appellant after verification of such books of account only. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 5a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 5b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure were detected during the course of search and seizure operations under s.132(1) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 10 appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 7. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.11 Grounds of appeal raised by the Assessee for AY 2013-14 in IT(SS)A No. 128/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 11 audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.4,84,04,187/- in the appellant’s income which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 5 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure were detected during the course of search and seizure operations under s.132(1) of the Act. 7a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 7b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 12 8a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in partially confirming the addition to the extent of Rs.4,84,04,187/- out of the total addition of Rs.8,67,07,506/- made by the AO in the appellant’s income on account of alleged undisclosed capital investment of the appellant in so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business and therefore, neither he was required nor he actually made any capital investment in any syndicate. 8b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in partially confirming the addition to the extent of Rs.4,84,04,187/- out of the total addition of Rs.8,67,07,506/-, merely on some incomplete and fictitious accounts, documents and datas, the veracity whereof by themselves were not getting established. 8c) That, without prejudice to the above and without in any manner admitting the existence of any Syndicate and making of any investment by the appellant in such Syndicates, even if for the sake of presumption, it is assumed that the appellant had formed some association of persons, in the form of Syndicates, for carrying out the business of liquor and also made some investments in such Syndicates, then also working of the amount of alleged undisclosed investment so determined by the AO at Rs.8,67,07,506/- and confirmed by the learned CIT(A) to the extent of Rs.4,84,04,187/- is not correct but excessive. 8d) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in partially confirming the addition to the extent of Rs.4,84,04,187/- out of the total addition of Rs.8,67,07,506/- as the appellant’s undisclosed investment in liquor business without considering and appreciating the investment, by way of own capital as well as borrowed funds, already recorded in the regular books of account maintained by the appellant and duly shown in the audited financial statements furnished along with the return of income. 9. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.12 Grounds of appeal raised by the Assessee for AY 2014-15 in IT(SS)A No. 129/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 13 be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.15,07,300/- made by the AO in the appellant’s income which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 5 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 14 appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure were detected during the course of search and seizure operations under s.132(1) of the Act. 7a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 7b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 8. That, the learned CIT(A) grossly erred, both on facts and in law, in making a finding that the appellant had formed some syndicate named and titled as ‘Damoh Syndicate’. 9a) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.15,07,300/- made by the AO in the appellant’s income on account of alleged unexplained expenditure by the appellant in the marriage of his daughter. 9b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the said addition of Rs.15,07,300/- in the appellant’s income on account of alleged unexplained expenditure by the appellant in the marriage of his daughter without properly considering and appreciating the material fact that during the previous year relevant to the assessment year under consideration, the appellant neither performed marriage of his daughter nor incurred any expenditure in relation thereto. 10. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.13 Grounds of appeal raised by the Assessee for AY 2015-16 in IT(SS)A No.130/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 15 Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.45,91,645/- made by the AO in the appellant’s income which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 5 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 16 additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation upon the appellant for deriving share of profit from various so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in not appreciating the appellant’s contention made before him that corresponding to the undisclosed income determined by the AO for various assessment years, no undisclosed assets or investments or expenditure were detected during the course of search and seizure operations under s.132(1) of the Act. 7a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. 7b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 8 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO that the appellant had made certain capital investments in so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business and therefore, neither he was required nor he actually made any capital investment in any syndicate. 9a) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.19,12,895/- made by the AO in the appellant’s income on account of alleged unexplained investment in purchase of land at village Purani Chhawni, Gwalior. 9b) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.19,12,895/- on account of alleged unexplained investment in purchase of land at village Purani Chhawni, Gwalior without IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 17 considering the material fact that the subject land was purchased by the appellant out of the sales proceeds of some other lands sold by him in earlier years. 9c) That, without prejudice to the above and without admitting any alleged unexplained investment in the subject land and as also, without admitting any receipt of income by the appellant from any Syndicate, the learned CIT(A) grossly erred in not granting benefit of telescoping to the appellant in respect of the alleged unexplained investment against the alleged receipt of income by the appellant from various Syndicates. 10 That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.26,78,750/- made by the AO in the appellant’s income by invoking the provisions of s.56(2)(vii) of the Act in respect of three plots situated at 36, 37 & 38, Royal Residency, Tehsil Huzur, Bhopal, purchased by the appellant without first making any reference to the DVO in accordance with the first proviso to clause (vii) of sub-section (2) to section 56 of the Act read with sub-section (2) of section 56 of the Act. 11. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.14 Grounds of appeal raised by the Assessee for AY 2016-17 in IT(SS)A No. 131/Ind/2020: “1a) That, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred in confirming the action of the AO in passing the impugned Assessment Order without considering the material fact that the impugned Assessment Order is barred by the time limit prescribed under s.153B(1)(a) of the Income-Tax Act, 1961 inasmuch in the instant case, last of the authorisations for search under s.132 of the Act was executed during the financial year ended on 31-03-2016 and consequently, the Assessment Order was statutorily required to be passed uptill 31-12-2017 whereas such Assessment Order has actually been passed after 31-12-2017, therefore, the impugned Assessment Order, being a nullity, deserves to be quashed on this legal ground alone. 1b) That, without prejudice to the above, the learned CIT(A) grossly erred in not considering the material fact that in the instant case, clause (ii) of Explanation to section 153B would be having no application for the reason that the direction issued by the AO to the appellant to get his books of account audited under s.142(2A) of the Act by itself was illegal and void ab initio and consequently, based upon such direction, any extension of time limit for framing the assessment could not have been presumed. 2a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for directing the appellant to get his books of account audited by special auditors under s.142(2A) of the Act IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 18 without giving any single opportunity of being heard to the appellant as contemplated under the proviso to sub-section (2A) of section 142 of the Act. 2b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction of Special Audit under s.142(2A) of the Act without having any return of income, for the relevant assessment year, on his record and as also without examining and verifying the books of account maintained by the appellant. 2c) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO for giving direction for Special Audit under s.142(2A) of the Act without bringing on record any specific observation and without confronting the same to the appellant as regard to the nature and complexity of the accounts or volume of accounts or doubts about the correctness of accounts or multiplicity of transactions or specialized nature of business activity of the appellant which could warrant the necessity of special audit under s.142(2A) of the Act, in a circumstance when the books of account of the appellant were not referred but books of account and documents of some other so-called Syndicates only were referred to before making such proposal. 3 That, without prejudice to the above, the learned CIT(A) grossly erred in confirming the action of the AO for framing the assessment, on the basis of the Report submitted by the Special Auditors under s.142(2A) of the Act, without first giving any opportunity of being heard to the appellant on the report and datas contained in such report, as required under the provisions of sub-section (3) of section 142 of the Act. 4 That, without prejudice to the above, on the facts and in the circumstances of the case, the action of the learned CIT(A) in confirming the additions to the extent of Rs.2,38,85,660/- made by the AO in the appellant’s income which is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 5 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the action of the AO for making trading additions in the business income of the appellant without first rejecting the regular books of account maintained by the appellant, by invoking the provisions of s.145(3) of the Act. 6a) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in upholding the AO’s action of making allegation of appellant’s share in the inadmissible expenses incurred by so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 19 6b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the findings of the AO that the alleged syndicates had incurred inadmissible expenses. 7 That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the action of the AO that the appellant had made certain capital investments in so-called Syndicates without considering and appreciating the appellant’s submission to the effect that the appellant was carrying out the liquor business, in his individual capacity only, without forming any Syndicate or Group with others for carrying out such liquor business and therefore, neither he was required nor he actually made any capital investment in any syndicate. 8a) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.21,09,914/- made by the AO in the appellant’s income on account of jewellery found during the course of search. 8b) That, without prejudice to the above and without admitting any alleged unexplained investment in the jewellery and as also, without admitting any receipt of income by the appellant from any Syndicate, the learned CIT(A) grossly erred in not granting benefit of telescoping to the appellant in respect of the alleged unexplained investment against the alleged receipt of income by the appellant from various Syndicates in various years. 9a) That, the learned CIT(A) grossly erred, both on facts and in law, in partially maintaining an addition to the extent of Rs.1,29,50,000/- out of the total addition of Rs.3,05,00,000/- made by the AO in the appellant’s income on allegation of unexplained investment in purchase of shares of a company namely ‘M/s. Agrawal Distilleries Pvt. Ltd.’ (ADPL) merely on the basis of some loose paper impounded during the course of survey under s.133A in the premises of some other person. 9b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in partially maintaining an addition to the extent of Rs.1,29,50,000/- out of the total addition of Rs.3,05,00,000/- made by the AO in the appellant’s income on allegation of unexplained investment in purchase of shares of ADPL without properly considering and appreciating the explanation of the appellant made along with necessary evidences and without having any corroborative cogent material on record to give any iota of evidence that the appellant made any unexplained investment in purchase of shares of ADPL. 9c) That, without prejudice to the above and without admitting any unexplained investment in purchase of shares of ADPL, the learned CIT(A) grossly erred, both on facts and in law, in partially maintaining an addition to the extent of Rs.1,29,50,000/- out of the total addition of Rs.3,05,00,000/- made by the AO in the appellant’s income on allegation of unexplained investment in purchase of shares of ADPL without considering and appreciating the material fact that no IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 20 investment, whatsoever, in the subject shares was made by the appellant during the previous year relevant to the assessment year under consideration. 9d) That, without prejudice to the above and without admitting any alleged unexplained investment in purchase of shares in ADPL and as also, without admitting any receipt of income by the appellant from any Syndicate, the learned CIT(A) grossly erred in not granting benefit of telescoping to the appellant in respect of the alleged unexplained investment against the alleged receipt of income by the appellant from various Syndicates in various years. 10a) That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.88,25,746/- made by the AO in the appellant’s income on account of alleged undisclosed investment in capital of some Ujjain Syndicate merely on the basis of some loose papers and that too, without properly considering and appreciating the explanation of the appellant. 10b) That, without prejudice to the above, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.88,25,746/- made by the AO in the appellant’s income without considering and appreciating the material fact that the appellant neither carried out any financial transaction with the so-called Ujjain Syndicate nor he made any investment therein. 10c) That, without prejudice to the above and without admitting any alleged unexplained investment in capital of Ujjain Syndicate and as also, without admitting any receipt of income by the appellant from any Syndicate, the learned CIT(A) grossly erred in not granting benefit of telescoping to the appellant in respect of the alleged unexplained investment against the alleged receipt of income by the appellant from various Syndicates in various years. 11. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 3.1 The brief facts of the case as culled out from the records are that the assessee is an individual carrying out the business of liquor. Besides, the assessee also derived income from certain partnership firms in which he was one of the partners. The assessee furnished his original returns of income for the various years u/s. 139 of the I.T. Act, 1961. Search and seizure operations u/s. 132 were carried out at various premises of Shivhare group and the assessee on 07/01/2016. Consequently, notices u/s. 153A were issued to the assessee for A.Y. 2010-11 to A.Y. 2015-16 on 27/10/2016. In response to the above notices, the assessee filed returns of income for A.Ys. 2010-11 to 2015- 16 on 25/03/2017. The assessee filed regular return of income for A.Y. 2016- 17 on 05/10/2018 declaring total income of Rs. 1,00,89,472/-. The details of returns of income for A.Y. 2010-11 to 2016-17 are as under: IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 21 A.Y. Date of filing of Return u/s. 139 Returned income (in Rs.) Date of filing of Return in response to the notice u/s. 153A Income declared in Return u/s. 153A (In Rs.) Additional Income offered, if any (In Rs.) 2010-11 15/10/2010 91,19,790/- 25/03/2017 92,69,790/- 1,50,000/- 2011-12 30/09/2011 1,13,36,710/- 25/03/2017 1,13,36,710/- Nil 2012-13 30/09/2012 1,03,29,770/- 25/03/2017 1,03,29,770/- Nil 2013-14 30/09/2013 1,01,28,950/- 25/03/2017 1,01,28,950/- Nil 2014-15 24/11/2014 1,57,13,370/- 25/03/2017 1,57,13,370/- Nil 2015-16 29/09/2015 84,40,830/- 25/03/2017 84,40,830/- Nil 2016-17 05/10/2018 1,00,89,472/- N.A. N.A. Nil 3.2 In the case of the assessee, a reference was made for special audit u/s. 142(2A) of the Act and accordingly, the special auditors submitted their report on 15/06/2018. The report of the special auditors, as produced by the assessee, was duly perused and considered by the AO and as also, by the CIT(A). A copy of the Special Auditors Report was also filed by the assessee before this Bench which has been placed on record. 3.3 Finally, the AO made additions of Rs. 11,31,08,603/- in A.Y. 2010-11, Rs. 24,09,50,400/- in A.Y. 2011-12, Rs. 25,46,55,134/- in A.Y. 2012-13, Rs. 91,20,24,719/- in A.Y. 2013-14, Rs. 46,28,52,994/- in A.Y. 2014-15, Rs. 45,70,77,387/- in A.Y. 2015-16 and Rs. 24,43,63,247/- in A.Y. 2016-17 on account of share of assessee in undisclosed income of some syndicates, share in inadmissible expenses incurred by such syndicates and some undisclosed capital invested by the assessee in various syndicates (para 15). Undisclosed income from the business of mining at Rs. 5,41,800/- in A.Y. 2012-13 (para 19), Rs. 2,23,94,600/- in A.Y. 2012-13 and Rs. 45,91,645/- in A.Y. 2015-16 on account of undisclosed income from property, undisclosed investment in property and u/s. 56(2)(vii) of the Act (para 21), Rs. 53,57,275/- in A.Y. 2014- 15 (para 17) on account of undisclosed interest income from other syndicates, Rs. 15,07,300/- in A.Y. 2014-15 on account of unexplained expenditure on the marriage of daughter (para 17), Rs. 22,23,960/- in A.Y. 2016-17 on account of unexplained cash found during search (para 13), Rs. 21,09,914/- in A.Y. 2016- 17 on account of unexplained investment in purchase of jewellery (para 14), Rs. 3,05,00,000/- in A.Y. 2016-17 on account of undisclosed investment in purchase of shares (para 18) and Rs. 88,25,746/- in A.Y. 2016-17 on account of undisclosed investment in Ujjain Syndicate (para 20). IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 22 4. Aggrieved assessee preferred separate appeals for all the assessment years under consideration before Ld. CIT(A). The ld. CIT(A), vide his common Order dated 02/07/2020 adjudicated the appeals of the assessee thereby giving substantial relief and also confirming certain additions for the assessment years under consideration. 5. Now, aggrieved by the relief granted by the ld. CIT(A) to the assessee, the revenue is in appeal before this Tribunal for the assessment years under consideration. Against the additions confirmed by the ld. CIT(A), the assessee has preferred cross appeals before us. 6. As all the appeals relate to the same assessee and the issues raised are common, they were heard together and are being disposed off by this common order for sake of convenience and brevity. 7. Ground No. 1 of the Revenue for A.Ys. 2010-11 to 2016-17; Ground Nos. 6(a), 6(b), 7(a) & 7(b) of the Assessee for A.Ys. 2010-11, 2013-14, 2014-15 & 2015-16; Ground Nos. 5(a), 5(b), 6(a) & 6(b) of the Assessee for A.Ys. 2011-12, 2012-13; and Ground Nos. 6(a) & 6(b) of the Assessee for A.Y. 2016-17 7.1 Through the Ground No. 1, common for all the assessment years under consideration, the revenue has challenged the action of the ld. CIT(A) in deleting the additions made by the AO in the assessee’s income in all the assessment years, on account of undisclosed income from liquor trade business through Syndicates. Further, through the grounds of appeal for various assessment years, the assessee has challenged the action of the ld. CIT(A) in confirming the finding of the AO that the assessee was carrying out the business through formation of Syndicates. The assessee also agitated that the ld. CIT(A) did not appreciate that corresponding to the undisclosed income determined by the AO, no undisclosed asset or investment or expenditure was detected during the course of search and seizure operations u/s. 132 of the Act. 7.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the premises of the assessee’s group on 07.01.2016, various incriminating documents were seized from which it was revealed that to operate liquor trading business, the assessee had formed syndicates/cartels/group in different districts as self organizing group formed to transact specific business, to pursue or promote a shared interest. As per IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 23 the AO, from the seized documents it was evident that the assessee was one of the key members of multiple syndicates. The AO further taking support from dictionary clarified that such syndicates were formed by individuals or organizations to promote common interest of profit. According to the AO, the existence of syndicates was beyond doubts as the same was accepted by the various members of the group in their statements given during the search/post search investigation. Further, according to the AO, the term ‘syndicate’ was taken from the seized material in which they have used this term to explain their modus operandi. At sub para (v) of para 15.2 of the Order, the AO made a clear and unequivocal finding that various investigations strengthened the contention that there existed a syndicate and various assessees are part of such syndicates. The AO also found that incriminating documents seized during the course of the search also contained some bank transactions which were carried out by the assessee from his bank accounts. The AO further made reference of various incriminating data which inter alia include, tally accounts, balance sheet, profit and loss account etc. of various syndicates in which the assessee was found to be one of the members. At para 15.4.3 the AO has given a finding that liquor syndicates, which are otherwise not legally permissible, have been maintained and operated. The AO further made a finding that the seized data reflect the correct income of the syndicates and as also share of profit of the assessee in such syndicates as mentioned in such data. The AO further found, from the seized data and documents, that the aforesaid syndicates had incurred certain expenditure for payment of illegal gratification to local police and government officers etc. which were not allowable under the Act. The AO while examining the tally data of the syndicates also found that such syndicates had incurred expenses on payment of rents without making any TDS u/s. 194-IA of the Act. Further, some seized documents reveal that these syndicates have made payments towards commission which were not allowable. Likewise, expenses on gifts, donation, personal expenses, breakage and leakages, etc. were not permissible. The AO also noted that some expenditure exceeding amount of Rs. 20,000/- were incurred by the syndicates in violation of the provisions of section of 40A(3)/(3A) of the Act. The AO also relied upon the findings of the special auditors given in their report. At the same time, the AO also found that the assessee had made investment in various syndicates. The sources whereof were not satisfactorily explained by the assessee. After giving detailed findings, reproducing various seized data and drawing the syndicate wise details in tabular form, the AO made additions, for various assessment years under appeal, under three sub heads viz. (i) share IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 24 of assessee in the undisclosed income from the syndicates; (ii) share of assessee in inadmissible expenditure incurred by the syndicates; and (iii) sum of undisclosed capital invested by the assessee in syndicates, by drawing various tables at para 15.11. In such table, based upon the seized documents, the AO also mentioned the assessee's share in profit in each and every syndicate. Finally, after fairly giving set-off for the assessee’s share in the losses incurred by the syndicates for various assessment years, the AO made the addition, for various assessment years, as per the table given at para 15.12 of the Order. Against such addition, the assessee has taken the above grounds. The details of the assessment year wise additions made by the AO, as summarized by the ld. CIT(A) at para (4.5) of his Order, are as under: A.Y. Share of profit of the assessee in syndicates (A) Share of loss of the assessee in syndicates (B) Net Share of Profit of the assessee in syndicates (C=A-B) Share of the assessee in inadmissible expenses incurred by the syndicates (D) Undisclosed Capital Invested by the assessee in syndicates (E) Total (F = C+D+E) 2010-11 13299784 6755433 6544351 68260933 38303319 113108603 2011-12 55989494 1262750 54726744 186223656 - 240950400 2012-13 101799120 745488 101053632 153601502 - 254655134 2013-14 265968947 21407618 244561329 580755884 86707506 912024718 2014-15 133441231 86612563 46828668 416024326 - 462852994 2015-16 80143479 31938037 48205442 395224939 13647007 457077388 2016-17 23741319 23741319 - 203311173 41052074 244363246 Total 674383374 172463209 501920165 2003402413 179709906 2685032484 7.3 Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. Before the ld. CIT(A), the assessee also produced copy of Special Auditors’ Report. The Ld. CIT(A), on the basis of the various datas seized from the premises of assessee as well as third persons, dismissing the grounds raised by the assessee to the effect that he was carrying out his liquor business in his individual capacity and had not formed any syndicate, came to the conclusion that the assessee had certainly formed Syndicates with various persons. The ld. CIT(A) has given the relevant findings at para (4.5.3) and (4.5.4) of his order which are reproduced as under: IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 25 “4.5.3 I do not find any substance in the contention of the appellant that since he was carrying out the business of liquor in his individual capacity and was also showing income from carrying out such business in his returns of income, from year to year, no further income can be considered on the ground of share of his profit in the syndicates. From the records and seized material, it is evident that the appellant was carrying out liquor business by forming different syndicates and therefore, there cannot be two views that the appellant had derived income from such syndicates. The appellant has vehemently claimed that factually, he had not formed any syndicate. In support of his contention, the A.R. of the appellant was heavily harping upon the license policy of the State Government and according to the A.R. of the appellant, the syndicates were not granted any separate licenses for carrying out the business of liquor and without having the licenses, such syndicates could not have carried out any business. However, such an argument of the A.R. of the appellant has no stand for the reason that merely because the appellant and other members of the syndicates have violated Excise Laws, it cannot be said that factually no syndicates were formed by them in a situation where the seized data and incriminating documents clearly reveal formation of such syndicates. Looking into totality of the facts, the appellant along with other persons had formed syndicates to carry out the business of liquor in which the appellant and other members were having certain share as agreed upon between themselves. Further, the syndicates had incurred certain expenses which were either prohibitory or inadmissible in the nature u/s. 37 of the Act or were not allowable for non compliance of the provisions of section 40(a)(ia) or section 40A(3)/(3A) of the Act. The appellant had made undisclosed investment towards his capital contribution in the various syndicates and in various years. 4.5.4 Having given the findings as aforesaid, now, it has to be adjudicated here that whether the share of profit of the appellant in the syndicates’ income, even if it remained undisclosed in the returns furnished by him, can legally be added to the income of the appellant and whether any tax, effectively, be levied on such income. As discussed above, the nature of share of appellant in the inadmissible expenses incurred by the syndicates is the same as that of share in profit from such syndicates, the tax treatment for both the additions in the hands of the appellant would remain the same. Thus, in my considered view, the appellant had derived undisclosed income in the form of share of profit from some syndicates, which are nothing but Association of Persons (AOP) or Body of Individuals (BOI) formed by the appellant along with various other persons for the purpose of carrying out the liquor business with a motive to earn profit from such business in an agreed ratio. The provisions of section 2(31) of the Act which gives the definition of the expression ‘Person’, a person includes, an association of persons or a body of individuals, whether incorporated or not. It is therefore, the syndicates formed by the appellant along with others is a separate taxable legal entity and separately chargeable to tax u/s. 4 of the IT Act. Further, such syndicates (AOPs/BOIs) are chargeable to tax at the Maximum Marginal Rate (MMR). Thus, in the instant case, any assessment of income, on the basis of the seized incriminating material and data, ought to have been made in the hands of the respective syndicates, a separate taxable entity, either u/s. 153C of the Act or under any other legal recourse available to the Department. However, in view IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 26 of the specific provisions of section 86 of the IT Act, 1961 r.w.s. 67A, in computing the total income of the appellant, his share, as member of the AOP/BOI, was not liable to be included. The appellant has also taken separate grounds taking the aforesaid plea and therefore, a detailed separate adjudication has been made elsewhere in the present order, while adjudicating the relevant grounds. However, since, in the Ground Nos. 6(a),6(b), 7(a) & 7(b), the appellant is agitating the additions on account of share of profit of the appellant in the various syndicates and share of appellant in inadmissible expenses of the syndicates, without having recourse to the provisions of section 86 and section 67A of the Act, these Grounds of Appeal of the appellant, are held as academic in the nature only, requiring no specific adjudication.” However, after giving the aforesaid findings, the ld. CIT(A) held that although, the assessee had undisputedly formed various syndicates/groups with various persons for carrying out the business of liquor, for a definite share of profit, but, in any case, the share of the assessee in the profit of these syndicates and as also, in the inadmissible expenses incurred by such syndicates cannot be added to the income of the assessee in view of the specific provisions of section 86 of the Income-Tax Act, 1961 r.w.s. 67A of the Act. According to the ld. CIT(A), the status of these syndicates is that of Association of Persons (AOP) or Body of Individuals (BOI) which are included in the definition of the expression 'Person' as ascribed to in section 2(31) of the Act. According to the ld. CIT(A), such syndicates are separate taxable legal entity and separately charged to tax u/s. 4 of the Act at the maximum marginal rate (MMR). The ld. CIT(A) further held that income derived by various syndicates, in which the assessee was one of the members, was required to be assessed in the hands of such syndicates only and the direct assessment in the hands of the assessee could not have been made in respect of such income derived by the syndicates. The ld. CIT(A) also held that even the question of admissibility or inadmissibility of any expenditure could have been raised only while making the assessment in cases of such syndicates. The ld. CIT(A) further held that the assessee could have, at the best, been assessed in respect of his share in taxable income of such syndicates but for the provisions of section 86 of the Act, which provides that Income Tax shall not be payable by the assessee in respect of his share in the income of the Association of Persons or Body of Individuals. Thus, relying upon the decisions of the Hon'ble Supreme Court in the case of ITO vs. CH. Atchaiah (1996) 218 ITR 239 (SC), the ld. CIT(A) deleted the entire additions made by the AO in the assessee's income, for various assessment years, on the grounds of assessee's share in profit of various syndicates and as also, share in the inadmissible expenses incurred by such syndicates. The relevant findings have been given by the ld. CIT(A) at para IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 27 (4.5.5) and again at para (4.7.1) to (4.7.5) of his Order. The same are being reproduced as under: “4.5.5 However, in respect of appellant’s undisclosed investment in various syndicates, in various assessment years, for which the appellant has taken Ground Nos. 8(a) and 8(b), there is no substance in the appellant’s contention. Before me, it has been argued that first of all there was no syndicate and even if there was any such syndicate, the investments were made out of the explained sources only. It has also been argued that the amount of unexplained investments determined by the AO is not correct and suffer from various errors. In respect of incorrect determination of amount of undisclosed investment in syndicates, the appellant has also taken separate grounds of appeal bearing ground nos. 8(c) & 8(d) for A.Y. 2010-11, A.Y. 2013-14 and A.Y. 2015-16 and ground nos. 7(c) & 7(d) for A.Y. 2016-17. I have already given the finding that the appellant had formed syndicates with various persons for carrying out the business of liquor. From the ample of seized material, it is also evident that the appellant had made investment towards capital contribution in such syndicates. The appellant, neither during the course of the assessment proceedings nor before me, could explain the sources of making investments in such syndicates. Hence, the ground nos. 8(a) & 8(b) for A.Y. 2010-11, A.Y. 2013-14 and A.Y. 2015- 16 and ground nos. 7(a) & 7(b) for A.Y. 2016-17 raised by the appellant, so far as they relate to his denial of forming any syndicates and making of any undisclosed investment in such syndicates are concerned, have no merit. However, since for quantum of undisclosed investments, the appellant has raised separate grounds viz. ground nos. 8(c) & 8(d) for A.Y. 2010-11, A.Y. 2013-14 and A.Y. 2015-16 and ground nos. 7(c) & 7(d) for A.Y. 2016-17, the issue relating to quantum of addition on these grounds of undisclosed investment has been adjudicated separately while dealing with such grounds. Therefore, appeal on these grounds is Dismissed. 4.7.1 I have duly considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. On perusal of the seized tally data and other documents, it is evidently clear that the appellant had formed syndicates with various persons, in various years and such syndicates had carried out liquor business for deriving profits to be shared by the appellant and other members of the syndicates in certain agreed ratio. The Special Auditors nominated under section 142(2A) of the Act have also given the same finding in their report. Further, the AO, at various places in the Order, has given clear findings that (i) the appellant had formed syndicates with various persons for carrying out the liquor business; (ii) from carrying out such businesses, the appellant had derived share of profit; (iii) such syndicates had incurred certain expenditure which were not permissible under the provisions of the Income Tax Act, 1961; and (iv) the appellant had made investment by way of capital contribution in such syndicates the sources whereof were not explained. Also, while adjudicating the ground nos. 6(a), 6(b), 7(a), 7(b), 8(a) & 8(b) for A.Y. 2010- 11 to A.Y. 2016-17, supra, it has been held that the appellant had formed syndicates for carrying out the liquor business. Once such findings are given, it becomes apparent that under the scheme of the Income Tax Act, 1961, such IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 28 syndicates would fall within the definition of ‘Persons’ as ascribed to under clause (31) of section 2 of the Act either as ‘Association of Persons’ or ‘Body of Individuals’. Consequently, in respect of any income derived by such syndicates, such syndicates alone would be chargeable to tax under section 4 of the Act. The Syndicates would be chargeable to tax independent from the members forming such syndicates. Needless to say, the income of such syndicates either under the head ‘Income from profits or gains from Business or Profession’ or under any other head would be required to be computed in accordance with the provisions of the Act only. Consequently, income under the head ‘Income from Profits or Gains from Business or Profession’, would be required to be computed in the manner provided under Part-D of the Chapter-IV of the Act which, inter alia, provides for disallowance of certain expenditure on various grounds. Such assessments in the hands of the syndicates, are to be made in accordance with the provisions of section 167B of the Act. Section 167B contemplates two situations. Sub-section (1) of section 167B deals with those cases in which individual shares of the members of an Association of Persons or Body of Individuals in the whole or any part of the income of such AOP/BOI are indeterminate or unknown. In such a situation, it has been provided that the tax shall be charged on the total income of the AOP or BOI at the maximum marginal rate and if any member of the AOP or BOI is chargeable to tax at a rate higher than maximum marginal rate, then, tax on the AOP or BOI shall be charged at such higher rate. Sub-section (2) of section 167B deals with other cases, viz. those cases which do not fall under sub-section (1) of section 167B of the Act. Accordingly, it envisages those cases in which the shares of the members of AOP or BOI are determinate and known. In such cases, if income of any of the members of the AOP or BOI exceeds the maximum amount which is not chargeable to tax, in the case of that member, such AOP or BOI would be chargeable to tax at the maximum marginal rate and where income of any member or members is chargeable at a rate or rates higher than the maximum marginal rate, tax shall be charged on that portion or portions of the total income of the AOP or BOI which is relatable to the income of such member or members and for the balance income, the tax shall be charged at the maximum marginal rate. In other words, irrespective of the status of the AOP/ BOI, it is required to pay tax atleast at maximum marginal rate on its income. 4.7.2 I find a significant force in the contention of the appellant that if there existed any syndicates, then income earned by such syndicates from carrying out businesses would be required to be assessed in the hands of such syndicates and such income cannot directly be assessed to tax in the hands of its members forming the syndicates. The investigation wing duirng the course of search found that the appellant is doing liquor business along with other persons by forming syndicates. The investigation wing has emphasized the formation of syndicates (group) to carryout the liquor business. The emphasis is on that there exists an entity syndicate which is carrying out the business. Statements of key persons of the syndicates were also recorded wherein, they has accepted the existence of syndicates. The AO during the course of assessment proceedings has referred the matter to special auditor u/s 142(2A) of the Act for special audit in the case of appellant. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 29 The Auditor has also emphasized the formation of the syndicate and has given a finding that the syndicate is carrying out the business independently. The syndicates are functioning from separate offices and are preparing accounts separately. Further, the AO while passing the impugned assessment order from page no 32 to 112 of the assessment order has elaborately dealt that there exists a syndicate. The AO has also dealt with ingredients of the syndicates. Also, the AO has accepted the statements of key persons of the syndicates wherein they had accepted existence of the syndicate. Nevertheless, the appellant during appellate proceedings has brought to my knowledge that the AO’s of the syndicates has made addition of the undisclosed income in the hands of syndicate for respective assessment years. In support appellant has filed copies of assessment orders passed in the case of syndicates (AOP). The brief details of assessment orders passed by DCIT circle-3, Gwalior are as under:- S.No Name of AOP Order under section AYs Income assessed 1 Shri Ram Swaroop Shivhare & Others, AOP (Gwalior Group) 144/153C r.w.s 153A of the Act 2010-11 to 2016-17 AYs 2010-11 to 2012-13, 2015-16 & 2016-17 (Rs. Nil.) AY 2013-14 (Rs. 8,60,26,366/- AY 2014-15 (Rs. 2,51,72,607/- On perusal of these assessment orders, it is found that the concerned AO i.e. DCIT Circle-3, Gwalior in the cases of AOP has made additions on account of undisclosed business income from carrying out the liquor business have been assessed on the basis of various materials which were seized during the course of the search carried out in the case of Shivhare Group. Further, in these assessment orders, it has been held that these AOPs being the liquor syndicates, had carried out business of liquor in various years and as per the Special Auditors Report given under s.142(2A) of the Act in the case of Shivhare Group, these syndicates had earned profit and had also incurred some expenses which were liable for disallowance. The amount of profits/ inadmissible expenses, considered by the AO framing the separate assessments of the syndicates, were the same as were considered while making the assessment in the hands of the appellant. In view of the findings of the investigation wing, special auditor, AO of the appellant and AO of the syndicates, the income earned by the syndicates is taxable in the hands of syndicate and not in the hands of appellant. Therefore, making any addition on account of income earned by syndicate in the hands of IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 30 appellant is nothing but double taxation of the same income. The settled law is that right income should be added in the hands of the right person and in the right year. Under the new scheme of the law, there is no option available to an Assessing Officer either to make the assessment in the hands of the AOP/BOI or in the hands of the members of the AOP/BOI. The similar view was expressed by the Hon’ble Apex Court in the case of ITO vs. Ch. Atchaiah (1996) 218 ITR 239 (SC). The relevant findings of the Hon’ble Apex Court are reproduced as under: “4. In our opinion, the contention urged by Dr. Gauri shanker merits acceptance. We are of the opinion that under the present Act, the ITO has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By "right person", we mean the person who is liable to be taxed, according to law, with respect to a particular income. The expression "wrong person" is obviously used as the opposite of the expression "right person". Merely because a wrong person is taxed with respect to a particular income, the AO is not precluded from taxing the right person with respect to that income. This is so irrespective of the fact which course is more beneficial to the Revenue. In our opinion, the language of the relevant provisions of the present Act is quite clear and unambiguous. Sec. 183 shows that where the Parliament intended to provide an option, it provided so expressly. Where a person is taxed wrongfully, he is no doubt entitled to be relieved of it in accordance with law but that is a different matter altogether. The person lawfully liable to be taxed can claim no immunity because the AO (ITO) has taxed the said income in the hands of another person contrary to law. We may proceed to elaborate. 5. Sec. 3 of the Indian IT Act, 1922, as amended by the Indian IT (Amendment) Act, 1939, read as follows: "3. Charge of Income-tax.—Where any Central Act enacts that income-tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, HUF, company and local authority, and of every firm and other AOP or the partners of the firm or the members of the association individually." (Emphasis, italicised in print, supplied) The expression "person" was defined in cl. (9) of s. 2 in the following words: "9. `Person' includes an HUF and a local authority". As against the above provisions, s. 4 of the Present Act [before it was amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989] read thus: "4(1). Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year or previous years, as the case may be, of every person: IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 31 Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. (2) In respect of income chargeable under sub-s. (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act." (The amendments made by the aforesaid Amendment Act of 1987 do not make any difference so far as the present controversy is concerned.) The expression "person" is defined in cl. (31) of s. 2 in the following words: "`Person' includes— (i) an individual, (ii) an HUF, (iii) a company, (iv) a firm, (v) an AOP or a BOI, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses." A comparison of the provisions of both enactments immediately bring out the difference between them. Sec. 3 of the 1922 Act provided that in respect of the total income of a firm or an AOP, the income tax shall be charged either on the firm or the AOP or on the partners of the firm or on the members of the AOP individually. It is evident that this option was to be exercised by him keeping in view of the interest of Revenue. Whichever course was more advantageous to Revenue, he was entitled to follow it. In such a situation, it was generally held that once the ITO opted for one course, the other course was barred to him. But no such option is provided to him under the present Act. Sec. 4 extracted hereinabove says that income-tax shall be charged on the total income "of every person" and the expression "person" is defined in cl. (31) of s. 2. The definition merely says that expression "person" includes inter alia a firm and an AOP or a BOI whether incorporated or not. There are no words in the present Act which empower the ITO or give him an option to tax either the AOP or its members individually or for that matter to tax the firm or its partners individually. If it is the income of the AOP in law, AOP alone has to be taxed; the members of the AOP cannot be taxed individually in respect of the income of the AOPs. Consideration of the interest of revenue has no place in this scheme. When s. 4(1) of the present Act speaks of levy of income-tax on the total income of every person, it necessarily means the person who is liable to pay income-tax in respect of that total income according to law. The tax has to be levied on that person, whether an individual, HUF, Company, Firm, AOP/BOI, a local authority or an artificial juridical person. From this, it follows that if income of A is taxed in the hands of B, A may be legitimately aggrieved but that does not mean that B is exonerated of his liability on that account. B cannot say, when he is sought to be taxed in respect of the total income which is lawfully taxable in his hands, that since the ITO has taxed very same income in the hands of A, he himself IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 32 cannot be taxed with respect to the said total income. This is not only logical but is consistent with the provisions of the Act. In this connection, it may be pointed out that where the Parliament wanted to provide an option, a discretion, to the ITO, it has provided so expressly. Sec. 183 [which has since been omitted w.e.f. 1st April, 1993 by the Finance Act, 1992] provided that in the case of an unregistered firm, it is open to the ITO to treat it, and make an assessment on it, as if it were a registered firm, if such a course was more beneficial to Revenue in the sense that such a course would fetch more tax to the public exchequer. Sec. 183 read as follows : "183. Assessment of unregistered firms.—In the case of an unregistered firm, the Assessing Officer— (a) may determine the tax payable by the firm itself on the basis of the total income of the firm, or (b) if, in his opinion, the aggregate amount of the tax payable by the firm if it were assessed as a registered firm and the tax payable by the partners individually if the firm were so assessed would be greater than the aggregate amount of the tax payable by the firm under cl. (a) and the tax which would be payable by the partners individually, may proceed to make the assessment under sub-s. (1) of s. 182 as if the firm were a registered firm; and, where the procedure specified in this clause is applied to any unregistered firm, the provisions of sub-ss. (2), (3) and (4) of s. 182 shall apply thereto as they apply in relation to a registered firm." It may be mentioned that s. 183 corresponded to s. 23(5)(b) of the 1922 Act. The 1922 Act not only provided an option to the ITO in the matter of firm and AOP under s. 3 but also expressly enabled him to assess an unregistered firm as a registered firm [s. 23(5)(b)], if by doing so, more tax accrued to the State. The 1961 Act has omitted the first option, while retaining the second. 6. In this connection, it would be relevant to notice the relevant provisions of the draft Bill proposed by the Law Commission in its XIIth Report, which constitutes the basis for the 1961 Act. Clause (27) of s. 2 of the draft (definition of "person") did expressly provide an option similar to the one contained in s. 3 of the 1922 Act. Clause 27 read thus : "(27) `Person' includes— (i) an individual, (ii) an HUF, (iii) a company, (iv) a firm or other AOPs, whether incorporated or not, or the partners of the firm or the members of the association individually, (v) a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within sub-cl. (i) to (vi)" [Emphasis, italicised in print, supplied] In the "Notes on Clauses" appended to the draft, the Commission stated : "27. Person. The definition of `person' in existing s. 2(9) has been amplified. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 33 The existing definition includes (a) HUF and (b) a local authority. The General Clauses Act, defines `person' as including a company or AOP or BOI whether incorporated or not. The charging section (s. 3) of the IT Act enumerates the units for taxation as `individual, HUF, company, local authority, firm and other AOPs or the partners of a firm or the members of the association individually'. Sec. 4 of the Act refers to a `person'. It seems desirable to have a comprehensive definition of the word `person' in the Act so as to cover all entities mentioned in— (i) the existing definition [s. 2(9)]. (ii) the existing charging provisions [ss. 3 and 4], and (iii) the General Clauses Act. The definition has therefore been amplified on the above lines." The Parliament, however, chose not to accept the suggested definition in toto; it deleted the words indicating the option. The Committee, which drafted the draft Bill comprised Sri P. Satyanarayana Rao, Sri G.N. Joshi and Sri N.A. Palkhivala, who was specifically appointed as a member for the purpose of the revision of the IT Act. [Extracts are taken from the XIIth Report of the Law Commission of India, published by Govt. of India, Ministry of Law.] 7. This question has also been troubling the High Courts in the country. As a matter of fact, Patna and Andhra Pradesh High Courts have taken different views. Be that as it may, we may mention that the Patna High Court in Mahendra Kumar Agrawalla vs. ITO 1975 CTR (Pat) 33 : (1976) 103 ITR 688 (Pat), Punjab and Haryana High Court in Rodamal Lalchand vs. CIT (1977) 109 ITR 7 (P&H), Andhra Pradesh High Court in Choudry (supra) and Delhi High Court in Punjab Cloth Stores vs. CIT 1978 CTR (Del) 257 : (1980) 121 ITR 604 (Del) have taken the view which we have taken. On the other hand, Madras High Court in CIT vs. Blue Mountain Engg.Corpn. 1978 CTR (Mad) 142 : (1978) 112 ITR 839 (Mad) and Patna High Court in its earlier decision in CIT vs. Pure Nichitpur Colliery Co. 1975 CTR (Pat) 83 : (1975) 101 ITR 79 (Pat) have taken the opposite view. The Andhra Pradesh High Court first expressed the other view, then in Choudry it took the view which we have taken and again in B.R. Constructions (FB) (supra) it has gone back to the other view and reiterated the view taken in the judgment under appeal. In Ramanlal Madanlal vs. CIT (1979) 116 ITR 657 (Cal), Sabyasachi Mukharji, J., speaking for a Bench of the Calcutta High Court, recognised the distinction in the language employed in s. 3 of the 1922 Act and s. 4 of the present Act but that was a case of an unregistered firm where the ITO had assessed the incomes in the hands of the partners individually. In such a situation, the learned Judge held, the ITO cannot, at the same time, bring the unregistered firm to tax in respect of the very same income. Sec. 183 was also referred to in that connection. The decision of the High Courts taking the contrary view appears to have been influenced largely by the decisions of this Court in CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) : TC 6R.197 and CIT vs. Murlidhar IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 34 Jhawar & Purna Ginning & Pressing Factory (1966) 60 ITR 95 (SC) which were rendered under the 1922 Act and have not given due weight to the marked difference in the language of the relevant provisions in the two enactments.” 4.7.3 In view of the specific finding of the Hon’ble Supreme Court, I am of the firm view that income derived by various syndicates, in which the appellant was found one of the members, was required to be assessed in the hands of such syndicates only and a direct assessment in the hands of the appellant could not have been made in respect of such income derived by the syndicates. Even the question of admissibility or inadmissibility of any expenditure could have been raised only while making the assessment in the cases of such syndicates. The appellant could have, at the best, been assessed in respect of his share in taxable income of such syndicates but for the provisions of section 86 of the Income Tax Act, 1961, which provide that income tax shall not be payable by an assessee in respect of his share in the income of the association of persons or body of individuals. 4.7.4 The AO while making the addition in the hands of the appellant, has worked out the appellant’s share in each of the syndicates under consideration. It is thus evident that the syndicates formed as AOP or BOI are such in which the shares of their members are determinate and known. In such circumstances, the share of the appellant, being a member of such AOP/ BOI, would be required to be computed in accordance with the provisions of section 67A of the Act. However, in view of the specific provisions of clause (a) of the proviso to section 86 of the Act, where the Association of Persons or Body of Individuals is chargeable to tax on its total income at the maximum marginal rate or at any higher rate under any of the provisions of Act, the share of a member in the income of such AOP/BOI as computed under section 67A shall not be included in the total income of such member. In my view, in the instant case, all the conditions for invoking the clause (a) to section 86 of the Act are getting explicitly fulfilled. For a ready reference, the provisions of section 86 are being reproduced as under: “S. 86: Share of member of an association of persons or body of individuals in the income of the association or body.-Where the appellant is a member of an association of persons or body of individuals (other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India), income-tax shall not be payable by the appellant in respect of his share in the income of the association or body computed in the manner provided in Section 67A. Provided that,- (a) where the association or body is chargeable to tax on its total income at the maximum marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income; IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 35 (b) in any other case, the share of a member computed as aforesaid shall form part of his total income: Provided further that where no income-tax is chargeable on the total income of the association or body, the share of a member computed as aforesaid shall be chargeable to tax as part of his total income and nothing contained in this section shall apply to the case." 4.7.5 In nutshell, (i) the appellant was a member of an Association of Persons or Body of Individuals; (ii) share of the members of such Association of Persons or Body of Individuals were determinate and known; and (iii) such Association of Persons or Body of Individuals were chargeable to tax on their total income at the maximum marginal rate or any higher rate. In such circumstances, the appellant’s case would squarely fall under substantive provisions of section 86 of the Act read with clause (a) of the first proviso to such section 86 and the other clause (b) of the first proviso and as also, the second proviso would have no application. Accordingly, in my view, there was no justification for the AO in making the addition in the appellant’s income on account of his share in profit of the syndicates and as also, on account of his share in inadmissible expenses incurred by the syndicates. Accordingly, the additions made by the AO amounting to Rs. 11,31,08,603/- in AY 2010-11, Rs. 24,09,50,400/- in AY 2011- 12, Rs. 25,46,55,134/- in AY 2012-13, Rs. 91,20,24,719/- in AY 2013-14, Rs. 46,28,52,994/- in AY 2014-15, Rs. 45,70,77,387/- in AY 2015-16 and Rs. 24,43,63,247/- in AY 2016-17 are Deleted. Therefore, appeal on these grounds is Allowed.” 7.4 Aggrieved with the additions deleted by the ld. CIT(A), the revenue is in appeal before us. Further, aggrieved with the findings of the ld. CIT(A) in holding that the assessee had carried out business through formation of Syndicates, the assessee has raised separate grounds before us. 7.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. The learned CIT(DR) argued that in the instant case, ample of documentary evidences and tally data were found during the course of the search and from such material, it was evident that the assessee had carried out unaccounted business of liquor by forming syndicates and groups with other persons. It was further contended that many of the syndicates could not be subjected to tax and therefore, for collecting the due tax for the exchequer, the tax should be collected from its members and assessee is one of the members. It was submitted that if the action of the learned CIT(A) is confirmed, then, it would result into a huge revenue loss. Finally, the learned CIT(DR) placed the reliance on the detailed findings given by the AO in the Assessment Order. 7.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A) as has been reproduced by the ld. CIT(A) himself in his Order. The assessee's counsel at the first place, in support of his grounds raised before us, agitated the findings given by the AO, which was also IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 36 confirmed by the ld. CIT(A), that the assessee had formed the syndicates with various other persons for carrying out the business of liquor with a definite share of profit in the syndicates. The relevant part of the assessee's submission for this contention, as made before the ld. CIT(A), is being reproduced as under: “4.01 Your Honour, the appellant is an under-educated person of the age of nearly 55 years. He belong to ‘Kalal’ community and since ages, his ancestors are carrying out liquor business. Almost, 35 years back, the appellant inherited liquor business from his forefathers, and since then he himself and his family members are carrying out the retail trading of Country liquor (CL) and Indian- made Foreign liquor (IMFL). 4.02 That, except operating one liquor shop at Jhalandar (Punjab) and that too only in one financial year, i.e. F.Y. 2009-10, during the entire period covered under the assessment proceedings carried out under s. 153A, the appellant’s area of operation of business remained restricted to the territory of state of Madhya Pradesh only. 4.03 That, in any State, liquor business has to be carried out only in accordance with the relevant laws of Excise legislated by the concerning state and as also, in accordance with the rules, regulations and policies framed under such legislations from time to time. Accordingly, in the state of Madhya Pradesh, as per the policies prevailing for the last 8-10 years, first the State Excise Authorities, identifies the areas/ shops where from the retail sale of intoxicant, which inter- alia, includes liquor, can be sold. The right or privilege to sell liquor is given by grant of a liquor license. These licenses are granted for a period of one year. Such license is given for a consideration and is granted to the person who gets himself agreed for payment of highest local Excise duty, during the period of license, for any particular shop. For such purpose, the State Excise Authorities, by paper publications and gazette notifications, invites tenders from the interested bidders who wish to obtain right to sell liquor from any particular shop, commonly known as liquor license. The person bidding is commonly known as Liquor Contractor. Before participating in the bid, the liquor contractor is required to deposit a certain percentage of the license value for which he intends to bid. After bidding, the liquor contract for any liquor shop, in any specified area, is awarded to the highest bidder. Thus, the highest bidder for any shop, gets the license for one year to sell the liquor, in retail, subject to his agreeing to pay a minimum amount by way of duty for which he had made the bid. After bidding, the successful liquor contractor has to furnish bank guarantee of the stipulated amount in favour of the Excise Authorities. After getting the license, the liquor contractor has to identify any shop in the specified area at his own. After opening the shop, the contractor is required to procure the material (liquor), from the district warehouse of the Excise department (hereinafter referred to as the designated warehouse). For procuring material every time, over and above payment of duty at the prescribed rate, he is also required to make payment for the material, which in the case of purchase of country liquor is also known as Ceiling Charges. The IMFL is also uplifted from the designated warehouse by the liquor contractor. The IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 37 designated warehouse obtain such IMFL from the various liquor manufacturing units, who have been so licensed and authorized on this behalf. After procuring the material from time to time, the liquor contractor effects sale thereof strictly in cash from his shop. As per Rule XV of General License Conditions under Other Madhya Pradesh Rules under the Madhya Pradesh Excise Act, 1915, all sales under licences for the sale of country liquor or for the retail sale of intoxicating drugs shall be for cash only, and such cash shall be paid over at the time of sale only. After collection of cash from sales, from time to time, either the cash is deposited into the Bank by the liquor contractor or it is utilized for making payment to the Excise Authorities towards duty or to the warehouses towards purchase of material. It is submitted that many a times, on the insistence of the designated warehouses and the State Excise Authorities, the liquor contractor is required to make direct payment to the liquor manufacturing company on behalf of the Department of Excise, State Government. 4.04 That, in a particular financial year, a liquor contractor may hold several licenses for retail sale of liquor in various areas through various shops. Such sales are effected by the salesmen deputed on each shop by the liquor contractor himself. At the end of each day, every shop in charge use to send one daily consolidated report of a day to head office. In such daily report, the shop in charge, specifies the quantity of sales, rate of sales and as also amount of sales made on a particular day. In such report, the utilization of sales proceeds, in the form of cash, is also mentioned such as whether it was deposited in bank account or it was used for payment of duty or for payment to warehouse or for incurring day to day petty expenses. After obtaining daily sales report, in respect of various shops, a consolidated entry for sales is made by the liquor contractor in his regular cash book. Likewise, consolidated entries in respect of purchases, payment of duties, deposits in bank accounts and expenses etc. are made by the liquor contractor in the regular cash book maintained by him on day to day basis. From such cash book, in the computerized system, entries automatically get posted to concerning accounts. At the end of every financial year, the books of accounts are finalized on the basis of trial balance extracted and thereafter Financial Statements are drawn. It is submitted that the appellant was also regularly maintaining such accounts and maintenance of such accounts was also verified by the search party. During the course of search under s. 132 in appellant’s premises, the search party had also found these regular accounts maintained in his computer system and soft copies of all such accounts were also taken by them and such soft copies were placed on record of the assessing officer. 4.05 That after drawing the financial statements from year to year, the appellant used to get his books of accounts, regularly maintained in the ordinary course of business, duly audited from some qualified Chartered Accountants and also used to get Audit Reports, in the prescribed form no. 3CB and 3CD, under the provisions of section 44AB of the Income Tax Act, 1961. A copy of the Audited Financial Statements along with the Tax Audit Report, pertaining to the previous year under consideration, was already placed on record of the assessing officer. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 38 Such Audited Financial Statements are placed at page no. 170 to 189 of our paper book. 4.06 That, after obtaining Tax Audit Report under s. 44AB of the Act, the appellant used to furnish his returns of income, quite regularly, under the provisions of section 139(1) of the Act and in such returns, for year to year, the appellant, inter-alia, incorporated his income from liquor trade. It is submitted that for the assessment year under consideration, the appellant had shown an income of Rs.90,00,786/-, from carrying out the liquor trade business, in his Return of Income furnished for the year under consideration [kindly refer PB Page No. 51 & 52]. 5.01 That, as noted by the learned AO herself at para No.(vi) at page No.35 of the impugned assessment order, the license granted to a liquor contractor in respect of any particular shop or area cannot be sold, transferred or sub-leased to any other contractor, without the written permission of the Collector. It can also not be transferred to any partnership without the written permission of the Collector. Any such transfer is duly endorsed on the license. For a ready reference, we are reproducing herewith the relevant condition for grant of license, as enumerated in the General License Conditions under Other Madhya Pradesh Rules under the Madhya Pradesh Excise Act, 1915, as under : “VI. Transfer or sub-lease of Licence. - No privilege of supply or sale shall be sold transferred or sub-leased, nor shall a holder of any such privilege enter into a partnership for the working of such privilege in any way or manner without the written permission of the Collector, which shall be endorsed on the licence. A partner sub-lessee, or transferee shall be bound by all the conditions of the licence, but the original licensee shall also continue to be responsible to the State Government for the due payment of the licence fee and proper working of the shop.”(emphasis supplied) 5.02 That, during the course of the assessment proceedings, it was submitted before the learned AO that in the liquor trade, no purchase could be made from any private party. All the purchases have to be made only from the State Government, through its State Excise Department, after making payment of duties and cost of materials. The State Excise Authorities, while receiving the payment, are compulsorily required to collect tax at source in accordance with the provisions of section 206C of the Income Tax Act, 1961. It was further submitted that in the appellant’s case, no variation of even a single penny had arisen between the purchases and TCS thereon shown by the appellant in his regular books of accounts and that shown by the State Excise Authorities in their annual returns submitted before the Income Tax Authorities in respect of TCS made by them. Thus, in other words, purchases and payment of duties shown by the appellant in his Audited Financial Statements were fully verifiable and in such circumstances, there could not have been any slightest doubt as regard to suppression of any purchases in his Audited Books of accounts. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 39 5.03 It was also submitted before the learned AO that, in response to the returns of income furnished by the appellant under s. 139(1) of the Act, out of the seven assessment years under assessment before the learned AO, assessments for as many as three assessment years were completed, after full verification of books of accounts and other records of the appellant. A chart giving the details of the various assessments made under s. 143(3) in the appellant’s case is being submitted herewith for kind perusal and ready reference of Your Honour, as Annexure A-12.00 [PB Page No. 456]. On a perusal of the Order of Hon’ble ITAT, Agra Bench, passed in the appellant’s case for assessment year under consideration, in ITA No. -142/AGR/2014 dated 23-04-2018, which was commonly passed, along with appeals of some other appellants in the same trade [kindly refer PB Page No. 407 to 455], it shall be appreciated by Your Honour that, the Hon’ble Bench at para 35 of the order, has clearly determined the N.P. rate of 2.70% on Sales of liquor. Although, according to the appellant, with all due respect to the Hon’ble Bench, no estimation of Net Profit was warranted over and above that shown in his regular Audited books of accounts but still it can safely be concluded that in the liquor trade, net profit ranges between 1.50% to 3.00% only. 6.00 Your Honour, the learned AO has made the allegation that the appellant was carrying out business of liquor trade by forming syndicates/ groups with various persons and in support of such allegation, the learned AO has made various findings in the body of the assessment order. In this regard, it is submitted that none of the findings of the learned AO is justifiable for the basic reason that without seeking the prior approval of the license granting authority, no one is permitted to assign the license in favour of anyone else or to any syndicate or group. It is submitted that the findings of the learned AO are based only upon some loose papers/ documents/ datas recovered from the premises of third person without taking into consideration various documentary evidences placed on his record. As has been demonstrated in the subsequent paras, all the findings of the learned AO are incorrect and not sustainable in the eyes of the law. 6.01 That, the first averment made in the impugned assessment order, on the subject issue, to the effect that during the course of search under s. 132 carried out at various premises incriminating evidences pertaining to the appellant were seized, it is submitted that such an averment is factually incorrect. The fact remained that during the course of the entire search and seizure proceedings, not even a single document or loose paper or any other material was found from which it could have been inferred that the appellant was indulged in carrying out of books transactions. It is submitted that the whole assessment of the learned AO is hinging on the pivot of some loose papers/ datas which were not found in the premises of the appellant and there is no positive material on record that such loose papers/ datas were prepared either by the appellant or by anyone else on the instruction of the appellant. 6.02 That, the second averment made in the impugned assessment order that the appellant had formed various syndicates/cartels/groups, in different IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 40 districts, as self organizing group formed to transact specific business, to pursue or promote a shared interest is also factually incorrect. The fact remained that the appellant had not formed any syndicate/ group either for the purpose of carrying out liquor business jointly or for the purpose of deriving any income there from and therefore, the question of his earning any income from any syndicate/ group, in any of the assessment years under consideration, does not arise at all. 6.03 That, the third averment made in the impugned assessment order that the existence of syndicate was also accepted by the key members of the group, it is submitted that first of all, there is no alleged group as such of the various persons, as referred to by the learned AO at para (15.2) of the impugned assessment order. It is submitted that Shri L.N. Shivhare, Shri Ashish Shivhare and Shri Ramesh Chandra Rai, whose names have been mentioned in the above referred para, are not family members of the appellant. It is submitted that the appellant was carrying out his liquor business independently and the above named persons were not in any manner associated with the retail liquor trading business of the appellant. It is further submitted that during the course of the assessment proceedings, despite making a request before the learned AO, the aforesaid persons were not produced before the appellant for cross examination. In these circumstances, any statement allegedly given by Shri L.N. Shivhare, Shri Ashish Shivhare and Shri Ramesh Chandra Rai cannot be used, as an evidence against the appellant. 6.03.1 Your Honour, on the issue of cross-examination, the Hon’ble Supreme Court in the case of M/s. Andaman Timber Industries V/s. Commissioner of Central Excise, Kolkatta-II 2016 (15) SCC 785 (SC) was pleased to hold as under: “5. According to us, not allowing the Appellant to cross examine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the Appellant was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Appellant disputed the correctness of the statements and wanted to cross examine, the Adjudicating Authority did not grant this opportunity to the Appellant. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the Appellant. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that cross examination of the said dealers could not have brought out any material which would not be in possession of the Appellant themselves to explain as to why their ex-factory prices remain static. It was not for the Tribunal to have guess work as to for what purposes the Appellant wanted to cross-examine those dealers and what extraction the Appellant wanted from them. 6. As mentioned above, the Appellant had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 41 which purpose it wanted to avail the opportunity of cross-examination. That apart, the Adjudicating Authority simply relied upon the price list as maintained at the depot to determine the price for the purpose of levy of excise duty. Whether the goods were, in fact, sold to the said dealers/witnesses at the price which is mentioned in the price list itself could be the subject matter of cross-examination. Therefore, it was not for the Adjudicating Authority to presuppose as to what could be the subject matter of the cross examination and make the remarks as mentioned above. We may also point out that on an earlier occasion when the matter came before this Court in Civil Appeal No. 2216 of 2000, order dated 17-3- 2005 [2005 (187) E.L.T. A33 (S.C.)] was passed remitting the case back to the Tribunal with the directions to decide the appeal on merits giving its reasons for accepting or rejecting the submissions. 7. In view the above, we are of the opinion that if the testimony of these two witnesses is discredited, there was no material with the Department on the basis of which it could justify its action, as the statement of the aforesaid two witnesses was the only basis of issuing the show cause notice.” 6.03.2 The Hon’ble Supreme Court, again, in the case of Ayaaubkhan Noorkhan Pathan vs. The State of Maharashtra and Ors., 2013 AIR 58 (SC) was pleased to hold as under: “23. A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Vaishampayan AIR 1961 SC 1623, held that the rules of natural justice, require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross- examining the witnesses examined by that party. Not providing the said opportunity to cross-examine witnesses, would violate the principles of natural justice. (See also: Union of India v. T.R. Varma, AIR 1957 SC 882; Meenglas Tea Estate v. Workmen, AIR 1963 SC 1719; M/s. Kesoram Cotton Mills Ltd. v. Gangadhar and Ors. ,AIR 1964 SC 708; New India Assurance Co. Ltd. v. Nusli Neville Wadia and Anr. AIR 2008 SC 876; Rachpal Singh and Ors.v. Gurmit Singh and Ors.AIR 2009 SC 2448; Biecco Lawrie and Anr. v. State of West Bengal and Anr. AIR 2010 SC 142; and State of Uttar Pradesh v. Saroj Kumar Sinha AIR 2010 SC 3131). 24. In Lakshman Exports Ltd. v. Collector of Central Excise (2005) 10 SCC 634, this Court, while dealing with a case under the Central Excise Act, 1944, considered a similar issue i.e. permission with respect to the cross-examination of a witness. In the said case, the Appellant had specifically asked to be allowed to cross-examine the representatives of the firms concern, to establish that the goods in question had been accounted for in their books of accounts, and that excise duty had been paid. The Court held that such a request could not be turned down, as the denial of the right to cross-examine, would amount to a denial of the right to be heard i.e. audi alteram partem. 28. The meaning of providing a reasonable opportunity to show cause against an action proposed to be taken by the government, is that the government servant is afforded a reasonable opportunity to defend himself against the charges, on the basis of which an inquiry is held. The government servant should be given an opportunity to deny his guilt and establish his innocence. He can do so only when IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 42 he is told what the charges against him are. He can therefore, do so by cross- examining the witnesses produced against him. The object of supplying statements is that, the government servant will be able to refer to the previous statements of the witnesses proposed to be examined against him. Unless the said statements are provided to the government servant, he will not be able to conduct an effective and useful cross examination. 29. In Rajiv Arora v. Union of India and Ors. AIR 2009 SC 1100, this Court held: 30. The aforesaid discussion makes it evident that, not only should the opportunity of cross-examination be made available, but it should be one of effective cross examination, so as to meet the requirement of the principles of natural justice. In the absence of such an opportunity, it cannot be held that the matter has been decided in accordance with law, as cross-examination is an integral part and parcel of the principles of natural justice.” [Emphasis supplied] 6.03.3 The Hon’ble Gujarat High Court in the case of the Principal Commissioner of Income Tax Ahmedabad and Ors. vs. Kanubhai Maganlal Patel 2017 (3) TMI 271 (Guj.) has held as under: “12. We have heard Shri Varun K Patel, learned counsel appearing on behalf of the Revenue at length. It emerges from the impugned orders and even the order passed by the Assessing Officer that the Assessing Officer made additions under Section 69B of the Act, relying upon the statements of two farmers [i.e., two sellers of the land] in which, according to the Department, they admitted of having received on-money in cash. However, it is required to be noted and it is an admitted position that the statements of those two farmers upon which reliance was placed by the Department were not furnished/given to the appellant to controvert the same. Not only that when a specific request was made before the Assessing Officer to permit them to cross examine the aforesaid two farmers, the same was rejected by the Assessing Officer. Under the circumstances, as rightly observed by the learned Tribunal, the Assessing Officer was not justified in making addition under Section 69B of the Act solely relying upon the statements of those two farmers. 13. We see no reason to interfere with the findings recorded by the learned Tribunal. We are in complete agreement with the view taken by the learned Tribunal while deleting the addition made by the Assessing Officer made under Section 69B of the Act. No substantial question of law arises.” 6.03.4 The Hon’ble Gujarat High Court, again, in the case of the Commissioner of Income Tax-V vs. Indrajit Singh Suri 2013 (8) TMI 111 (Guj.) has held as under: “The entire issue is based on factual matrix presented before the authorities. We are in complete agreement with the findings of the Tribunal that the Assessing Officer had largely proceeded on the basis of the statement of one Shri Gajjar in whose books of account, the said transaction of Ninad Co-op. Housing Society had emerged. It further appears that no opportunity of cross examination of Shri Gajjar, though requested for, was granted by the Assessing Officer. Cumulatively, thus, when the Tribunal found that there was violation of principles of natural justice by not allowing cross examination despite such request coupled with absence of any evidence, no error much less any substantial error is committed by the Tribunal in deleting the said amount. This issue, therefore, requires no further consideration.” IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 43 6.03.5 The Hon’ble Gujarat High Court, again, in the case of the CIT vs. Supertech Diamond Tools Pvt. Ltd. 2013 (12) TMI 1529 (Guj.) has held as under: “The reference to the statements made by some of the persons related with the said investing companies is of no effect because such statements could not have been utilized against the appellant Company when the appellant company had not been afforded an opportunity of confronting and cross-examining the persons concerned. There does not appear anything occurring in the statements of the persons relating with the appellant Company so as to provide a basis for the findings recorded by the AO.” [Emphasis supplied] 6.04 Your Honour, as regard to the appellant’s statement recorded under s. 132 on 08-03-2016, it is submitted that in reply to question no. 2, the appellant had stated that in the name of “Gwalior Syndicate”, some liquor business was carried out by different persons, at their own, to whom liquor licenses have been granted by the State Government but at the same breath, in unequivocal terms, the appellant had stated that the business was carried out by each of the persons, individually, i.e. in his personal capacity by maintaining their accounts individually. It was stated by the appellant that no formal or in the legal form, any syndicate had been formed by the appellant. It was further stated by the appellant that sometimes, for the purpose of showing the strength to the outside world, the appellant used to club the names of his family members and close friends hailing from the same trade, as a unit, without actually having any business connection with each other. It was submitted that such unit was commonly called as a Syndicate. A copy of the statement of the appellant duly recorded on 08-03-2016, as referred to by the learned AO, at para (15.2.iii.a) is being submitted herewith for kind perusal and record of Your Honour as Annexure A-13.00 [PB Page No. 457 to 468]. 6.05 Your Honour, it was submitted before the learned AO that the liquor retail trade is carried out on the basis of a periodical license granted by the State Excise Authorities. It was reiterated that the license so obtained by any liquor licensee was not transferable and it could not be transferred to any partnership firm or group even if the licensee himself was a partner or member of such firm or group. Such an exercise requires written permission of the concerning State Excise Authorities. It was also submitted that during the course of the entire Search, not even in a single premises any evidence of grant of any permission, for transfer of any license by any person to any firm or association or syndicate or group, by any Excise Authorities was found. 6.06 Your Honour, at para (v) at page No.35 of the impugned assessment order, the learned AO has averted that some investigations in the form of correspondence with various departments were made by him. It has further been averted that online searching of data as well as third party inquiries revealed that there existed a syndicate and various appellants were part of such syndicate. In this regard, it is submitted that first of all the averment so made by the learned AO is factually incorrect. Even otherwise, it is submitted that all such third party inquiries were never confronted to the appellant during the course of the assessment proceedings and, therefore, no reliance ought to have been placed IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 44 by the learned AO on such inquiries for reaching to some conclusion against the appellant, as per the various judicial pronouncements, already referred to in the preceding paras. 7.01 Your Honour, at para (15.3) of the impugned assessment order, the learned AO has made a reference of seizure of some documents from the appellant and his relatives’ premises. On a perusal of the description of the seized documents, it shall be appreciated by Your Honour that all the documents referred to by the learned AO are the legal and regular documents which are supposed to be found in the premises of any person carrying out the liquor business. It shall be appreciated by Your Honour that the copies of the licenses issued by the Excise Authorities, copies of challans of license fees paid, documents relating to the running of liquor business, correspondences with Government authorities, documents relating to bank guarantees furnished, copies of the liquor policies announced by the Government Authorities, can by no stretch of imagination, be regarded as incriminating documents for drawing any adverse inference against the appellant. On the contrary, the documents referred to by the learned AO prove the stand of the appellant that he was carrying out liquor retail trade in his individual capacity without forming any group or syndicate with any person. 7.02 Your Honour, as regard the references of various Tally accounts/ so-called evidences alleged to have been seized from various premises, as per details given at page No. 39 to 66 of the assessment order, it is submitted that first of all the appellant is not aware of maintenance/ preparation of any tally data/document, as referred to in the impugned order, secondly, such tally accounts/ documents have not been prepared either by the appellant or by anyone on his instruction. It is further submitted that under the provisions of section 292C(1)(i) of the Act, the prima-facie presumption which prevails upon finding of any books of account or document in anyone’s possession is that the books of account or document belongs to the person from whose possession it is found. It will be appreciated that none of the tally accounts/ other evidences, relied upon by the learned AO, were found either in possession or control of the appellant. Undisputedly, all these materials were allegedly found in possession of a third person. Accordingly, it was incumbent upon the assessing officer to first seek the explanation of the concerning person on the seized materials and then only, the appellant could have been asked to tender his explanation on the said material and that too, after apprising the appellant about the explanation of the person from whose possession such material was found and as also after giving due opportunity of cross examination of such person to the appellant. However, in the instant case, unfortunately, the learned AO has not undertaken all these exercise and instead, directly ventured to seek the appellant’s explanation on such material. As the appellant was not the author/ creator of these materials, he was unable to make his explanation on each and every paper. 7.02.1 During the course of the assessment proceedings, the appellant had clearly expressed his apprehension that one of the accountants (who had been working for the appellant till search for several years and who has since been IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 45 terminated) was also looking after accounting affairs of many other liquor contractors and probably, either himself or in connivance with some other mischievous persons, with some ulterior motive or for some statistical purpose or for any other purpose, best known to him only, he might have recorded the business transactions of all his clients, carried out separately and individually, in one single tally account which were so found. It is submitted that upon going through tally accounts, referred to by the learned AO, it has been observed that besides recording transactions of many of his clients at one place, the accountant further went mischievous by incorporating even those imaginary transactions, which it is believed, could not have actually taken place in case of any of liquor contractor clients of that accountant. It was also submitted that in such books some those types of transactions have been entered which in reality do not take place in the liquor business. The liquor business is a legalized business which is carried out under a lawful license granted by the State Excise Authorities and therefore, not only for the appellant but even for other liquor contractors, there could not have been any reason to provide any illegal gratification to anyone. Such entries of gratification in the tally accounts, by themselves, completely falsify the credence of such accounts. 7.03 As regard the findings given by the learned AO at para (15.3.1) of the impugned assessment order as regard to matching of some transactions of bank account of the appellant with the seized data, it was submitted before the learned AO that since the accountant was also aware of appellant’s individual transactions (including the transactions carried out through his bank accounts) he might have incorporated such transactions in the above said tally account just to give it colour of a real account, which, according to the appellant, is nothing but a flimsy compilation of datas without having any correlation, whatsoever, with the reality. At the cost of repetition, it is submitted that all the transactions relating to liquor business of the appellant, for all the years under consideration, have duly been recorded by him, fully and truly, in his regular books of accounts and the tally accounts, so referred to by the learned AO, do not factually relate to appellant’s liquor business. 7.04 Your Honour, in the instant case, the learned AO has made an allegation that the appellant had formed various syndicates/ groups with various persons but except making such allegation he could not bring on record many vital facts such as (i) when such syndicate/ group was formed; (ii) what was the mode of formation of syndicate/ group, whether oral or written; (iii) the place at which such syndicate/ group was formed; (iv) who were the other members of the syndicate/ group; (v) the specific purpose of the syndicate/ group, the place of operation of the group; (vi) profit/ loss sharing ratio of the members of the group; (vii) manner of distribution of profit/ loss of the group etc.. It is submitted that unless and until, the full identity of all the members of a group are made known, no allegation as regard to forming of any so-called group or syndicate can validly be made. It shall be appreciated that whenever any syndicate or AOP or partnership is formed, some documents are necessarily prepared between the members of such syndicate or AOP or partnership for determining the purpose, sharing ratio, capital contribution etc. of the members. However, in the instant IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 46 case not even a single document of formation of any syndicate or group was found from any of the premises. It is submitted that allegation of formation of syndicate is mere assumption and not a reality. 7.04.1 Your Honour, in the instant case, the learned AO has not conducted any independent enquiry that whether or not the appellant was running any liquor business by forming any syndicate. The learned AO could have deputed his officios for conducting enquiries at the places where the appellant had claimed to have run liquor shops in his individual capacity in the past. From the enquiries, it could have been gathered that whether it was appellant only or some other persons too, who were running the shops, in the capacity of owner. The learned AO could have also made necessary enquiry from the employees and as also from the landlords of the shops, from which the appellant was running his liquor business. Merely on the basis of tally datas, which by themselves are not reliable and have no credence, the learned AO ought not to have formed a view that the appellant was carrying out the business of liquor by forming syndicates/ groups. 7.05 Your Honour, as regard the observation of the learned AO at para (15.3.1.C), to the effect that in the seized items, the appellant’s bank accounts were also found appearing, it is reiterated that the mischievous accountant for giving colour of the tally data as that of real one has incorporated transactions of bank accounts of the appellant in the tally data prepared by him for the reason best known to him only. 7.06 Finally, it is submitted that in view of the facts and circumstances of the appellant’s case and as also the submissions made herein above, it shall be appreciated by Your Honour that the allegations made by the learned AO in the body of the assessment order to the effect that the appellant had formed various syndicates/ groups for carrying out his liquor business, have no legs to stand and therefore, such allegations deserve to be negated at threshold only. Once, the allegation of forming any syndicate/ group gets disproved, the consequent additions made by the learned AO, in the appellant’s income, on such presumption would also get deleted automatically. 8.00 Your Honour, without prejudice to the above and without in any manner admitting that the appellant had formed any syndicate/ group for carrying out his liquor business, it is submitted that even for the sake of assumption, the allegation of the learned AO, on this count, is taken to be true on its face even then, the additions made by the learned AO on the various counts are not correct and sustainable in view of the foregoing discussion. 9.00 Your Honour, the learned AO, while framing the assessment for the year under consideration, has made an addition of Rs.11,31,08,603/- in the appellant’s income on the allegations of the appellant having formed various syndicates and derived share of profit from such syndicates. Besides, ironically, additions have also been made on the count of share of the appellant in the inadmissible expenses, allegedly incurred by the syndicates during the relevant previous year. The head-wise break-up of the above addition is given at para no. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 47 (2.02) supra. It is submitted that although in the assessment order the learned AO has not given a year-wise and head-wise break-up of the above said addition, however, it appears that such addition of the learned AO is based upon the table given at para (15.7) from page no. 75 to 96 by partially considering the various discrepancies in such table pointed out by the appellant vide his letter dated 02- 08-2018 [kindly refer PB Page no. 341 to 346]. The said table in its turn is based upon the table given in the final show-cause notice dated 05-07-2018 issued by the learned AO. 9.01 Your Honour, during the course of the assessment proceedings, the appellant, vide its letter dated 02-08-2018, had, without admitting formation of any syndicate and making of any investment therein, demonstrated that in the said table, some mistakes of principle had got crept-in. It was submitted that in the table, alleged share of profit of the appellant from various syndicates, in a year, was duly taken into consideration but on the other hand, the similar nature of share of loss from such syndicates had not been taken into consideration. It is submitted that even the Special Auditors, who worked out the share of profit of the appellant from various syndicates in various years, had worked out the share of loss of the appellant from such syndicates. A copy of the relevant summary of share income of the appellant from various liquor business during the period from 01-04-2009 to 31-03-2016, as prepared by the Special Auditors, is being submitted herewith for kind perusal and ready reference of Your Honour, as Annexure A-14.00[ PB Page No. 469 to 483]. 9.02 Your Honour, on a perusal of the above said summary, it shall be appreciated that in the case of the appellant, for the assessment year under consideration, the Special Auditors had determined share of loss of the appellant from various syndicates at Rs.67,55,433/-. It is submitted that the learned AO while framing the assessment order, has duly corrected such mistake and eventually, addition in respect of share of profit of the appellant from various syndicates has been determined after giving due set-off of share of loss from various syndicates incurred in the same year and accordingly the addition on account of share of income of the appellant has been made to the extent of Rs.65,44,351/- only while framing the assessment order. 10.00 Your Honour, based upon the table given by the then learned AO in his show cause notice and the Special Auditors Report, we have prepared a master statement showing syndicate-wise addition made by the learned AO, under the different heads, for the relevant assessment years. A copy of such master statement is being submitted herewith for kind perusal and ready reference of Your Honour, as Annexure A-15.00[PB Page no. 484 & 485]. 10.01 Your Honour, on a perusal of the master statement, it shall be observed by Your Honour that none of the incriminating documents, on the basis of which, huge additions of Rs.11,31,08,603/- have been made in the appellant’s income were found or seized from the appellant’s premises. It shall be observed by Your Honour that all such documents were found from the premises of third parties and therefore, the presumption under section 292C was not available to the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 48 learned AO against the appellant without first positively bringing on record that such documents contain the transactions relating to the appellant. 10.02 Your Honour, in the instant case, the learned AO has made additions on the allegation of appellant’s deriving income from as many as nine syndicates. However, on a perusal of the column no. 13 of the said master statement, it shall be observed by Your Honour that out of the nine places of the syndicates, as stated in the column no. 5 of master statement, as many as at eight places, during the relevant previous year, the appellant was not carrying out any liquor business activity. It is submitted that aforesaid nine places, during the relevant previous year, the appellant was having liquor license only in respect of some territory in Bhopal and income derived from carrying out business from such territory has duly been shown by the appellant, in his return of income, for the relevant assessment year. In evidence of our aforesaid assertion, we are submitting herewith a copy of statement showing details of license fees paid by the appellant during the financial year 2009-10 relevant to the A.Y. 2010-11, as Annexure A-16.00 [PB Page No. 486]. It is submitted that the total license fees shown to have been paid as per this statement at Rs.30,49,66,723/- is getting perfectly tallied with the Audited Profit and Loss Account of the appellant for the relevant previous year [kindly refer PB Page No. 178]. On a perusal of the details of license fees paid, it shall be observed by Your Honour that for the places like Khandwa, Dhar, Ramganj Mandi, Chaibasa, Jamshedpur, Bhind, Mandla etc., in respect of whom the appellant has been alleged to have formed syndicates, the appellant was not holding any liquor license and therefore the question of assumption of forming of any syndicate at such places does not arise. At the cost of repetition, it is submitted that without holding any liquor license, no one is permitted to carry out any liquor business across the country. 10.03 Your Honour, the learned AO has made the subject additions on the basis of some loose papers, excel sheets etc.. These seized materials have been identified by the Special Auditors as well as the learned AO in the form of E-39, E-40, E-49, E-62 etc.. Copies of such seized materials are being produced herewith for kind perusal and verification by Your Honour. On a perusal of such seized materials, it shall be observed by Your Honour that while interpreting the contents of the seized materials, the learned AO has applied a great degree of guess work. The brief comments in respect of such seized materials have been given by us at column no. 14 of the master statement. On a perusal of such statement, it shall be observed by Your Honour that the finding and guess work of the learned AO do not match with the contents of such seized materials. It is submitted that the learned AO, at his own made a presumption as regard to percentage of share of profit of the appellant in the alleged syndicates despite the fact that there was no such mention in the concerning seized material. Further, in many of the seized materials, the name of the appellant has not been found appearing. 10.04 In respect of three syndicates, serialized at sno. 4, 5 & 8, viz. Chaibasa Syndicate, Jamshedpur Syndicate and Shriram No. 2 Syndicate, the learned AO has assumed the share of appellant to be at 100%, which contradicts the very IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 49 theory of the learned AO regarding formation of syndicate by the appellant with other persons. It is submitted that an entity in which a person holds 100% share cannot be said to be a syndicate but it has to be regarded as the proprietorship entity of the person holding 100% share. Such fact speaks in volume that the learned AO has not applied his mind while developing the story of formation of syndicates by the appellant.” 7.6.1 The assessee after making submissions for grounds raised by him, agitate the ground raised by the revenue against the deletion of the addition made by the CIT(A) on account of assessee's share in profit and inadmissible expenses of the syndicates. The relevant abstracts of the assessee's submission are as under: “1.00 In this context, without in any manner admitting that the appellant had formed any syndicate or group for carrying out any business even if, based upon the findings given by the learned AO in the assessment order itself, it is presumed that the appellant had formed various syndicates/ groups (AOPs) for carrying out the business of liquor with other persons and had derived share of income from such syndicates then also, no addition was warranted in the appellant’s hands in view of the foregoing submissions. 2.01 That, while passing the impugned assessment order, at various places such as at paras (15.1), (15.2), (15.3), (15.4) in the body of the order, it has been alleged that the appellant had formed various syndicates/ groups with other persons for carrying out the liquor business. It has further been asserted that in such syndicates, the appellant made certain investments by way of contribution of capital and also derived certain share in profit of such syndicates. Besides, in the body of the assessment order, it has also been asserted by the learned AO that such syndicates incurred some expenses which were not admissible as deduction from the net profit of the syndicates, in accordance with provisions of the Income-Tax Act, 1961. 2.02 That, the working of the alleged undisclosed investments, alleged share of profit of the appellant in the syndicates and alleged share of the appellant in the inadmissible expenses incurred by such syndicates have been given, by way of a table, at para (15.7) of the subject assessment order. After considering the appellant’s submission on the issues, the final addition on this count has been determined at paras (15.11) & (15.12) of the subject assessment order. 2.03 That, in the second table at page no. 111 of the order, the details of the additions have been given wherein it has explicitly been stated that what is being added is the appellant’s share in the profit of syndicates and as also share of profit in inadmissible expenses. Thus, undisputedly, both the items have been regarded as the share of profit of the appellant from syndicates. 2.04 That, as per findings given in the subject assessment order itself, the appellant had formed various syndicates/ groups with various persons for IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 50 carrying out the business of liquor and in such syndicates/ groups the appellant was having a definite, determinate and known share. Thus, there cannot be two views that according to the subject assessment order, the appellant derived share of income as a member of an association of persons (AOP), with the determinate and known share. Accordingly, in the instant case, for the relevant assessment year, the appellant’s share in the income of the AOPs, as a member, in accordance with the provisions of section 67A would work out to be as under: Sno. Description Amount 1 Share of Profit in various syndicates (AOPs) 1,32,99,784.36 2 Share of Profit in inadmissible expenses (AOPs) 6,82,60,933.32 8,15,60,717.68 3 Less Share of Loss in various syndicates (AOPs) 67,55,433.00 Net Share of Profit in various AOPs u/s. 67A 7,48,05,284.68 2.05 That, undoubtedly, the entire share of income of the appellant in various AOPs, as determined in the assessment order itself, at Rs.7,48,05,285/- has duly been incorporated and included in the total assessed income of the appellant at Rs.12,87,25,889/-. 2.06 That, as per the provisions of section 86, as contained in Chapter VII of the Income-Tax Act, 1961, the entire share of the appellant in income of the Association of Persons, as computed in the manner provided in section 67A is not chargeable to income-tax. Further, since, undisputedly, such syndicates are separately chargeable to tax on their respective total income, at the maximum marginal rate, in accordance with the proviso (a) to section 86 of the Act, the share of the appellant, as a member in the syndicates, ought not to have been included in his total income. For a ready reference, the provisions of section 67A & 86 of the Income-Tax Act, 1961 are being reproduced as under: “CHAPTER VI AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD LOSS Aggregation of Income Method of computing a member’s share in income of association of persons or body of individuals. S. 67A (1) In computing the total income of an appellant who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a co-operative society or society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 51 profit or net loss) shall be computed as follows, namely :- (a) Any interest, salary, bonus, commission or remuneration by whatever name called, paid to any member in respect of the previous year shall be deducted from the total income of the association or body and the balance ascertained and apportioned among the members in the proportions in which they are entitled to share in the income of the association or body; (b) Where the amount apportioned to a member under clause (a) is a profit, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be added to that amount, and the result shall be treated as the member's share in the income of the association or body; (c) Where the amount apportioned to a member under clause (a) is a loss, any interest, salary, bonus, commission or remuneration aforesaid paid to the member by the association or body in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the member's share in the income of the association or body. (2) The share of a member in the income or loss of the association or body, as computed under sub-section (1), shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the association or body has been determined under each head of income. (3) Any interest paid by a member on capital borrowed by him for the purposes of investment in the association or body shall, in computing his share chargeable under the head "Profits and gains of business or profession" in respect of his share in the income of the association or body, be deducted from his share. Explanation: In this section "paid" has the same meaning as is assigned to it in clause (2) of section 43.” “CHAPTER VII INCOMES FORMING PART OF TOTAL INCOME ON WHICH NO INCOME-TAX IS PAYABLE Share of member of an association of persons or body of individuals in the income of the association or body. S. 86: "Share of member of an association of persons or body of individuals in the income of the association or body.-Where the appellant is a member of an association of persons or body of individuals (other than a company or a co-operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India), income-tax shall not be payable by the appellant in respect of his share in the income of the association or body computed in the manner provided in Section 67A. [emphasis supplied] IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 52 Provided that,- (a) where the association or body is chargeable to tax on its total income at the maximum marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income; [emphasis supplied] (b) in any other case, the share of a member computed as aforesaid shall form part of his total income: Provided further that where no income-tax is chargeable on the total income of the association or body, the share of a member computed as aforesaid shall be chargeable to tax as part of his total income and nothing contained in this section shall apply to the case." 2.07 On a combined reading of the provisions of section 67A and section 86 of the Act, it shall be observed by Your Honour that the income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known shall be computed in accordance with the methodology provided in section 67A. However, after making the computation of share of a member in AOP or BOI, in view of the specific provisions of section 86, such share of income shall be excluded from the total income of the assessee. There are only two exceptions to the applicability of the provisions of section 86 viz. (i) when the association or body is not chargeable to tax on its total income at the maximum marginal rate or any higher rate; and (ii) where no income-tax is chargeable on the total income of the association or body. 2.08 Your Honour, the necessary provisions, as regard to charging of tax on the total income of an association or body at the maximum marginal rate are contained in section 167B of the Act. For a ready reference, the relevant provisions of section 167B are reproduced, as under: “CHAPTER XV LIABILITY IN SPECIAL CASES – FIRMS, AOPs, BOIs Charge of tax where shares of members in association of persons or body of individuals unknown, etc. (1) Where the individual shares of the members of an association of persons or body of individuals (other than a company or a co- operative society or a society registered under the Societies Registration Act, 1860 (21 of 1860 ), or under any law corresponding to that Act in force in any part of India) in the whole or any part of the income of such association or body are indeterminate or unknown, tax shall be charged on the total income of the association or body at the maximum marginal rate: Provided that, where the total income of any member of such association or body is chargeable to tax at a rate which is higher than the maximum marginal rate, tax shall be charged on the total income of the association or body at such higher rate. (2) Where, in the case of an association of persons or body of individuals as aforesaid[ not being a case falling under sub- section (1)],- IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 53 (i) the total income of any member thereof for the previous year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of that member under the Finance Act of the relevant year, tax shall be charged on the total income of the association or body at the maximum marginal rate; (ii) any member or members thereof is or are chargeable to tax at a rate or rates which is or are higher than the maximum marginal rate, tax shall be charged on that portion or portions of the total income of the association or body which is or are relatable to the share or shares of such member or members at such higher rate or rates, as the case may be, and the balance of the total income of the association or body shall be taxed at the maximum marginal rate. Explanation.- For the purposes of this section, the individual shares of the members of an association of persons or body of individuals in the whole or any part of the income of such association or body shall be deemed to be indeterminate or unknown if such shares (in relation to the whole or any part of such income) are indeterminate or unknown on the date of formation of such association or body or at any time thereafter.] 2.09 Your Honour, in the instant case, as per the findings given by the learned AO himself, the share of the appellant as a member of the syndicates (AOPs) was determinate and therefore, the appellant’s case would not fall under the provisions of sub-section (1) to section 167B of the Act. On the other hand, the case of the appellant would fall under the provisions of sub-section (2) to section 167B of the Act. In such a situation, the entire income of the alleged syndicates, of which the appellant is allegedly claimed to be a member, would be chargeable to maximum marginal rate in accordance with clause (i) of sub-section (2) to section 167B of the Act. 2.10 Your Honour, it is thus evident that the subject syndicates being liable for charge of tax at the maximum marginal rate, the first exclusion as contemplated in clause (b) read with clause (a) of proviso to section 86 of the Act would have no application. As regard the second proviso to section 86, it is submitted that the income of the syndicates are, undisputedly, chargeable to tax under section 167B of the Act and therefore, the exclusion provision from operation of section 86 would not apply in the instant case. In other words, by having a combined reading of section 167B, section 86 and section 67A, it would be observed that the alleged share of profit of the appellant in various syndicates, which in the eyes of the law are nothing but Association of Persons, would be completely entitled for exclusion of total income. However, in the instant case, the learned AO, in complete derogation of the scheme of law, has not taken such aspect into consideration and made the impugned addition. 2.11 Your Honour, in the instant case, the learned AO besides making addition on the allegation of the appellant’s having derived share of profit from various syndicates, has also made addition, to the extent of the appellant’s share in such IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 54 syndicate, qua some alleged inadmissible expenses incurred by such syndicates. It is submitted that first of all, any disallowance for claim of any expenses can be made only in the hands of the person who claims it and not in the hands of the other persons. It is submitted that the appellant never claimed any alleged inadmissible expenses, in his audited books of account and therefore, the question of making any addition in the hands of the appellant does not arise. It is submitted that even if such disallowance was warranted then the additions ought to have been made, while making the assessment, in the hands of the syndicates only. It is submitted that after making such additions on account of disallowances of expenses, the income of the syndicates ought to have been computed in accordance with the various provisions of the Act and once such income of the syndicate was computed, for the purpose of section 67A, the resultant share of income of the appellant in the total income of the syndicates was required to be apportioned. Thus, any share of the appellant in the inadmissible expenses of the syndicates ought to have been taken as in the nature of share of profit and that was required to be added under section 67A of the Act. Needless to say, after making the addition on account of share of profit, which in its turn ought to have been inclusive of share in inadmissible expenses, the necessary relief in accordance with the provisions of section 86 ought to have been granted to the appellant which has not been so done in the instant case. 3.00 Your Honour, to the best of the knowledge of the appellant, subsequent to the framing of the assessment in the case of the appellant under section 153A of the Act, separate proceedings have been initiated by the revenue under section 153C of the Act for making assessment in the hands of syndicates. It is submitted that although the appellant has not been made a party to such assessments carried out under s. 153C of the Act but still, if the information of the appellant to this effect is found to be correct then having assessed the syndicates separately in the capacity of AOPs, now there would be no room and justification for sustaining the impugned addition in the hands of the appellant too. It is a well known maxim of the tax laws that the same income cannot be taxed twice in the hands of two different persons. 4.01 Your Honour, even if it is presumed that in the case of syndicates, the Department failed to make any assessment, then also the income, which is otherwise chargeable to tax in a different tax entity i.e. the syndicate, cannot be added to the income of the appellant. It is submitted that unlike under section 3 of the Income-Tax Act, 1922, in the present Income Tax Act, 1961 there is no such discretion or option available to an assessing officer as regard to taxing of any income earned by an AOP either in the hands of AOP or its members. Now, the assessing officer, subject to the provisions contained in ss. 67A, 86 and 167B is duty bound to make the assessment only in the hands of AOP and no addition, on the count of share of profit of a member in the AOP, can be made in the hands of such member. 4.02 Your Honour, in the similar circumstances, the Hon’ble Apex Court in the case of ITO vs. Ch. Atchaiah (1996) 218 ITR 0239 (SC) was pleased to hold that under the present Act the right income has to be assessed in the hands of the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 55 right person. A copy of the judgment of the Apex Court is being submitted herewith for kind perusal and record of Your Honour, as Annexure A-17.00[PB Page no. 487 to 493]. For a ready reference, the relevant paras of the judgment are reproduced, as below: “4. In our opinion, the contention urged by Dr. Gauri shanker merits acceptance. We are of the opinion that under the present Act, the ITO has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By "right person", we mean the person who is liable to be taxed, according to law, with respect to a particular income. The expression "wrong person" is obviously used as the opposite of the expression "right person". Merely because a wrong person is taxed with respect to a particular income, the AO is not precluded from taxing the right person with respect to that income. This is so irrespective of the fact which course is more beneficial to the Revenue. In our opinion, the language of the relevant provisions of the present Act is quite clear and unambiguous. Sec. 183 shows that where the Parliament intended to provide an option, it provided so expressly. Where a person is taxed wrongfully, he is no doubt entitled to be relieved of it in accordance with law but that is a different matter altogether. The person lawfully liable to be taxed can claim no immunity because the AO (ITO) has taxed the said income in the hands of another person contrary to law. We may proceed to elaborate. 5. Sec. 3 of the Indian IT Act, 1922, as amended by the Indian IT (Amendment) Act, 1939, read as follows : "3. Charge of Income-tax.—Where any Central Act enacts that income-tax shall be charged for any year at any rate or rates, tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, HUF, company and local authority, and of every firm and other AOP or the partners of the firm or the members of the association individually." (Emphasis, italicised in print, supplied) The expression "person" was defined in cl. (9) of s. 2 in the following words : "9. `Person' includes an HUF and a local authority". As against the above provisions, s. 4 of the Present Act [before it was amended by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989] read thus : "4(1). Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year or previous years, as the case may be, of every person : Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 56 (2) In respect of income chargeable under sub-s. (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act." (The amendments made by the aforesaid Amendment Act of 1987 do not make any difference so far as the present controversy is concerned.) The expression "person" is defined in cl. (31) of s. 2 in the following words : "`Person' includes— (i) an individual, (ii) an HUF, (iii) a company, (iv) a firm, (v) an AOP or a BOI, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses." A comparison of the provisions of both enactments immediately bring out the difference between them. Sec. 3 of the 1922 Act provided that in respect of the total income of a firm or an AOP, the income tax shall be charged either on the firm or the AOP or on the partners of the firm or on the members of the AOP individually. It is evident that this option was to be exercised by him keeping in view of the interest of Revenue. Whichever course was more advantageous to Revenue, he was entitled to follow it. In such a situation, it was generally held that once the ITO opted for one course, the other course was barred to him. But no such option is provided to him under the present Act. Sec. 4 extracted hereinabove says that income-tax shall be charged on the total income "of every person" and the expression "person" is defined in cl. (31) of s. 2. The definition merely says that expression "person" includes inter alia a firm and an AOP or a BOI whether incorporated or not. There are no words in the present Act which empower the ITO or give him an option to tax either the AOP or its members individually or for that matter to tax the firm or its partners individually. If it is the income of the AOP in law, AOP alone has to be taxed; the members of the AOP cannot be taxed individually in respect of the income of the AOPs. Consideration of the interest of revenue has no place in this scheme. When s. 4(1) of the present Act speaks of levy of income-tax on the total income of every person, it necessarily means the person who is liable to pay income-tax in respect of that total income according to law. The tax has to be levied on that person, whether an individual, HUF, Company, Firm, AOP/BOI, a local authority or an artificial juridical person. From this, it follows that if income of A is taxed in the hands of B, A may be legitimately aggrieved but that does not mean that B is exonerated of his liability on that account. B cannot say, when he is sought to be taxed in respect of the total income which is lawfully taxable in his hands, that since the ITO has taxed very same income in the hands of A, he himself cannot be taxed with respect to the said total income. This is not only logical but is consistent with the provisions of the Act. In this connection, it may be pointed out that where the Parliament wanted to provide an option, IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 57 a discretion, to the ITO, it has provided so expressly. Sec. 183 [which has since been omitted w.e.f. 1st April, 1993 by the Finance Act, 1992] provided that in the case of an unregistered firm, it is open to the ITO to treat it, and make an assessment on it, as if it were a registered firm, if such a course was more beneficial to Revenue in the sense that such a course would fetch more tax to the public exchequer. Sec. 183 read as follows : "183. Assessment of unregistered firms.—In the case of an unregistered firm, the Assessing Officer— (a) may determine the tax payable by the firm itself on the basis of the total income of the firm, or (b) if, in his opinion, the aggregate amount of the tax payable by the firm if it were assessed as a registered firm and the tax payable by the partners individually if the firm were so assessed would be greater than the aggregate amount of the tax payable by the firm under cl. (a) and the tax which would be payable by the partners individually, may proceed to make the assessment under sub-s. (1) of s. 182 as if the firm were a registered firm; and, where the procedure specified in this clause is applied to any unregistered firm, the provisions of sub-ss. (2), (3) and (4) of s. 182 shall apply thereto as they apply in relation to a registered firm." It may be mentioned that s. 183 corresponded to s. 23(5)(b) of the 1922 Act. The 1922 Act not only provided an option to the ITO in the matter of firm and AOP under s. 3 but also expressly enabled him to assess an unregistered firm as a registered firm [s. 23(5)(b)], if by doing so, more tax accrued to the State. The 1961 Act has omitted the first option, while retaining the second. 6. In this connection, it would be relevant to notice the relevant provisions of the draft Bill proposed by the Law Commission in its XIIth Report, which constitutes the basis for the 1961 Act. Clause (27) of s. 2 of the draft (definition of "person") did expressly provide an option similar to the one contained in s. 3 of the 1922 Act. Clause 27 read thus : "(27) `Person' includes— (i) an individual, (ii) an HUF, (iii) a company, (iv) a firm or other AOPs, whether incorporated or not, or the partners of the firm or the members of the association individually, (v) a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within sub-cl. (i) to (vi)" [Emphasis, italicised in print, supplied] In the "Notes on Clauses" appended to the draft, the Commission stated : "27. Person. The definition of `person' in existing s. 2(9) has been amplified. The existing definition includes (a) HUF and (b) a local authority. The General Clauses Act, defines `person' as including a company or AOP or BOI whether incorporated or not. The charging section (s. 3) of the IT Act IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 58 enumerates the units for taxation as `individual, HUF, company, local authority, firm and other AOPs or the partners of a firm or the members of the association individually'. Sec. 4 of the Act refers to a `person'. It seems desirable to have a comprehensive definition of the word `person' in the Act so as to cover all entities mentioned in— (i) the existing definition [s. 2(9)]. (ii) the existing charging provisions [ss. 3 and 4], and (iii) the General Clauses Act. The definition has therefore been amplified on the above lines." The Parliament, however, chose not to accept the suggested definition in toto; it deleted the words indicating the option. The Committee, which drafted the draft Bill comprised Sri P. Satyanarayana Rao, Sri G.N. Joshi and Sri N.A. Palkhivala, who was specifically appointed as a member for the purpose of the revision of the IT Act. [Extracts are taken from the XIIth Report of the Law Commission of India, published by Govt. of India, Ministry of Law.] 7. This question has also been troubling the High Courts in the country. As a matter of fact, Patna and Andhra Pradesh High Courts have taken different views. Be that as it may, we may mention that the Patna High Court in Mahendra Kumar Agrawalla vs. ITO 1975 CTR (Pat) 33 : (1976) 103 ITR 688 (Pat), Punjab and Haryana High Court in Rodamal Lalchand vs. CIT (1977) 109 ITR 7 (P&H), Andhra Pradesh High Court in Choudry (supra) and Delhi High Court in Punjab Cloth Stores vs. CIT 1978 CTR (Del) 257 : (1980) 121 ITR 604 (Del) have taken the view which we have taken. On the other hand, Madras High Court in CIT vs. Blue Mountain Engg.Corpn. 1978 CTR (Mad) 142 : (1978) 112 ITR 839 (Mad) and Patna High Court in its earlier decision in CIT vs. Pure Nichitpur Colliery Co. 1975 CTR (Pat) 83 : (1975) 101 ITR 79 (Pat) have taken the opposite view. The Andhra Pradesh High Court first expressed the other view, then in Choudry it took the view which we have taken and again in B.R. Constructions (FB) (supra) it has gone back to the other view and reiterated the view taken in the judgment under appeal. In Ramanlal Madanlal vs. CIT (1979) 116 ITR 657 (Cal), Sabyasachi Mukharji, J., speaking for a Bench of the Calcutta High Court, recognised the distinction in the language employed in s. 3 of the 1922 Act and s. 4 of the present Act but that was a case of an unregistered firm where the ITO had assessed the incomes in the hands of the partners individually. In such a situation, the learned Judge held, the ITO cannot, at the same time, bring the unregistered firm to tax in respect of the very same income. Sec. 183 was also referred to in that connection. The decision of the High Courts taking the contrary view appears to have been influenced largely by the decisions of this Court in CIT vs. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) : TC 6R.197 and CIT vs. Murlidhar Jhawar & Purna Ginning & Pressing Factory (1966) 60 ITR 95 (SC) which were rendered under the 1922 Act and have not given due weight to the marked difference in the language of the relevant provisions in the two enactments.” IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 59 4.03 Your Honour, in the instant case, having assessed the appellant in the capacity of member of syndicate, the revenue would still have a valid right to assess separately the syndicates which would result into making assessment of the same income in two hands which is not permissible in the eyes of the law. It is submitted that in the similar circumstances, the Hon’ble High Court of Karnataka in the case of Pr. CIT vs. Ind Sing Developers (P) Ltd. (2016) 288 CTR 0154 (Kar) relying upon the decision of Hon’ble Supreme Court of Ch. Atchaiah held the same view. The Hon’ble High Court further held that merely because the right person could not be taxed it would not be open to the Revenue to tax a wrong person. A copy of the judgment of the Hon’ble High Court is being submitted herewith for kind perusal of Your Honour, as Annexure A-18.00[PB Page no. 494 to 506] 4.04 The Hon’ble ITAT Delhi ‘G’ Special Bench, in the case of Pradeep Agencies – Joint Venture vs. ITO (2007) 111 TTJ 0346 (SB) held that under the 1961 Act, ITO has no option to assess the members of the AOP. A copy of the said judgment is being submitted herewith for kind perusal and record of Your Honour, as Annexure A-19.00[PB Page no. 507 to 510] 4.05 Reliance is also placed on the judgment of Hon’ble ITAT Bangalore Bench, in the case of K.S. Sathyanarayana vs. ACIT (2008) TTJ 0716. A copy of the said judgment is being submitted herewith for kind perusal and record of Your Honour, as Annexure A-20.00[PB Page no. 511 & 512] 4.06 Reliance is also placed on the following judicial pronouncements: i) CIT vs. Virendra Kumar Gupta (2013) 87 CCH 0010 (Del) ii) CIT vs. Murugesa Naicker Mansion (2000) 244 ITR 0461 (Chen) 5.00 In view of the above facts and circumstances, it is submitted that the learned AO was not justified in making additions of Rs.65,44,351/- and Rs.6,42,60,933/-respectively in the total income of the appellant on the allegation of appellant’s having derived share of profit from various syndicates and appellant’s share in inadmissible expenses of such syndicates. Accordingly, the same deserve to be deleted on this count too.” 8.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides and also gone through the judgments and decisions referred to and relied upon by both the sides. 8.2 First we would take the assessee's grounds of Appeal challenging the action of the ld. CIT(A) confirming the AO's action of holding that the assessee had formed syndicates with various persons and had derived share of profit IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 60 from such syndicates. In our view, considering the voluminous tally datas and as also, financial statements of the various syndicates as seized during the course of search u/s. 132 of the Act in the different premises of the liquor group, there is absolutely no infirmity in the AO's action in holding that the assessee had carried out liquor business with various other persons by forming group, under the garb of syndicates, for a definite share of profit. We find that the AO has rightly placed reliance on the statements of various members of the syndicates who have also admitted to have formed syndicates. We find that the Special Auditors appointed u/s. 142(2A) of the Act, have made a very detailed working in which they have determined the various inadmissible expenses incurred by such syndicates and have also worked out the assessee's share in profit as well as in inadmissible expenditure incurred by each of the syndicates. Before us, the counsel of the assessee could not establish that the seized material relied upon by the AO was not belonging to the syndicates in which he was clearly stated to be one of the members. In these circumstances, we do not find any substance in the assessee's ground that he had not formed any syndicate. We also do not find any merit in the assessee's ground to the effect that corresponding to the quantum of share of profit of the assessee in various syndicates, as determined by the AO, no corresponding asset or expenditure was found. We find that first of all, this assertion itself is factually incorrect and contrary to the assessee's own submissions before us in respect of other grounds of appeals through which for explaining the sources of undisclosed investment/expenditure the assessee has claimed that these were the share of profit from the syndicates. Even otherwise, not finding of any corresponding asset/expenditure, ipso facto, cannot be a ground for presuming that the assessee had not derived undisclosed income, especially in a circumstance when such undisclosed income is evident from ample of documentary evidences found during the course of search. Accordingly, the Ground Nos. 6(a), 6(b), 7(a) & 7(b) of the Assessee for A.Ys. 2010-11, 2013-14, 2014-15 & 2015-16; Ground Nos. 5(a), 5(b), 6(a) & 6(b) of the Assessee for A.Ys. 2011-12 & 2012-13; and Ground Nos. 6(a) & 6(b) of the Assessee for A.Y. 2016-17, being without substance are dismissed. 8.3 Now, coming to the Revenue's Ground No. 1 for all the assessment years, through which the Revenue has agitated the action of the ld. CIT(A) in deleting the additions, for various assessment years, made by the AO in the assessee's income on account of undisclosed income from liquor trade business. Upon overall consideration, we find absolutely no infirmity in the findings given by the ld. CIT(A). We find that undisputedly, the assessee had formed various IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 61 Association of Persons (AOP), in form of syndicates/cartels/groups, with various other persons to carry out the business of liquor trade which is evident from the seized material/data and as also, report given by the Special Auditors. We also find ourselves in agreement with the findings given by the AO that the assessee was having specified percentage of share of profit in all such syndicates. We find that the AO at para (15.7) at page no. 75 to 96, by way of drawing a table, has given the details of various syndicates and the assessee's share in such syndicates. Further, we find that in the same table, the ld. AO has also made a reference of the relevant seized documents. Thus, there cannot be two views that the assessee had formed the syndicates and had also derived share of profit from such syndicates. We find that while computing the income of the assessee from such syndicates, the AO at para (15.11) of his Assessment Order has taken into consideration the assessment year wise aggregate amount of share of profit/(loss) of the assessee from the syndicates and has also taken into consideration the assessee's share in inadmissible expenses found incurred by such syndicates. We find that while making the assessment year wise additions in the assessee's income, the AO has taken the sum of both the figures after giving set-off for share of loss in syndicates for each year. We are of the view that that having given a finding to the effect that the assessee had formed the syndicates and such syndicates had carried out the liquor business as separate entities there was absolutely no justification for the AO to subject the assessee in respect of profit of such syndicates which in the legal phraseology are nothing but Association of Persons/Body of Individuals, a separate taxable legal entity. 8.3.1 We find that as per the provisions of section 86, as contained in Chapter VII of the Income-Tax Act, 1961, the entire share of an assessee in income of the Association of Persons or Body of Individuals, as computed in the manner provided in section 67A shall not be chargeable to income-tax. In our view, in the present case, the clause (a) of the first proviso to section 86 would apply, inasmuch, the syndicates are chargeable to tax at the maximum marginal rate and consequently, the share of any member in the syndicates as computed in the manner provided in section 67A shall not be included in the total income of the member i.e. the assessee in the present case. 8.3.2 We find as per the provisions of section 67A of the Act, in computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known, after making certain adjustments share of each member is required to IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 62 be computed. However, after making the computation of share of a member in AOP or BOI as per the provisions of section 67A, in view of the specific provisions of section 86, such share of income shall be excluded from the total income of the assessee. We find that there are only two exceptions to the applicability of the provisions of section 86 viz. (i) when the association or body is not chargeable to tax on its total income at the maximum marginal rate or any higher rate; and (ii) where no income-tax is chargeable on the total income of the association or body, but, for the reasons discussed hereinbelow, none of the exceptions to section 86 are applicable in the present case. 8.3.3 We further find that in the instant case, as per the findings given by the AO himself, the share of the assessee, as a member of the syndicates (AOPs), was determinate and therefore, the assessee’s case would not fall under the provisions of sub-section (1) to section 167B of the Act. On the other hand, the case of the assessee would fall under the provisions of sub-section (2) to section 167B of the Act. In such a situation, the entire income of the syndicates, of which the assessee was found to be a member, would be chargeable to maximum marginal rate in accordance with clause (i) of sub- section (2) to section 167B of the Act in the hands of such syndicates only. 8.3.4 We find that since all the subject syndicates are liable for charge of tax at the maximum marginal rate and therefore, the first exclusion as contemplated in clause (b) of the first proviso to the section 86 read with clause (a) of the first proviso thereof would have no application. For the second proviso to section 86, we find that the income of the syndicates are, undisputedly, chargeable to tax under section 167B of the Act and therefore, such proviso would also not apply in the instant case. In other words, by having a combined reading of section 167B, section 86 and section 67A, it can be safely concluded that the share of profit of the assessee in various syndicates, which in the eyes of the law are nothing but Association of Persons, would be completely entitled for exclusion from total income of the assessee. 8.3.5 In the light of the legal position, as enunciated hereinabove, in our considered view, income of all the syndicates, as determined by the AO, can be assessed in the hands of the respective syndicates only as these syndicates, being AOPs are classified as separate persons and tax entity u/s. 2(31) of the Act, but, in any circumstance, in the present case, any share of profit from such syndicates cannot be added as income chargeable to tax in the hands of any of its members. We find that, as per the findings given by the ld. CIT(A) at IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 63 para (4.7.2) which remained uncontroverted by the Revenue, even in respect of one of the syndicates, separate assessments have already been framed by one assessing officer u/s. 144/153C of Act and while making assessments in the hands of such syndicate, the amount of undisclosed income earned by such syndicate, has already been determined. It is well known maxim of the law that same income cannot be taxed twice in the multiple hands unless otherwise so warranted by the specific provisions of the Act itself. 8.3.6 In the present case, we also find that the AO besides making addition on account of assessee’s having derived share of profit from various syndicates, has also made addition, to the extent of the assessee’s share in such syndicate, qua some alleged inadmissible expenses incurred by these syndicates. We find full substance in the assessee's contention that since none of these inadmissible expenditure was claimed by the assessee himself, and therefore, any disallowance for claim of any such expenses can only be made in the hands of the syndicates which have actually incurred such expenditure. In our view, after making such additions on account of disallowances of expenses, the income of the syndicates ought to have been computed in accordance with the various provisions of the Act and once such income of the syndicate was computed, for the purpose of section 67A, the resultant share of income of the assessee in the total income of the syndicates was required to be apportioned. Thus, any share of the assessee in the inadmissible expenses of the syndicates ought to have been taken as in the nature of share of profit and that was required to be added under section 67A of the Act, but again, after making such addition, the necessary relief in accordance with the provisions of section 86 ought to have been granted by the AO to the assessee which has not been so done in the instant case. 8.3.7 In our view, even if for any reason the Revenue failed to make any assessment in the hands of the syndicates, then also the income, which is otherwise chargeable to tax in a different tax entity i.e. the syndicate, cannot be added to the income of the assessee. We find that unlike under section 3 of the Income-Tax Act, 1922, in the present Income Tax Act, 1961 there is no such discretion or option available to an assessing officer as regard to taxing of any income earned by an AOP either in the hands of AOP or its members. Now, the assessing officer, subject to the provisions contained in ss. 67A, 86 and 167B is statutorily bound to make the assessment only in the hands of AOP and no addition, on the count of share of profit of a member in the AOP, can be made in the hands of such member. For such proposition, we rely on the decision of IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 64 the Hon’ble Apex Court in the case of ITO vs. Ch. Atchaiah (1996) 218 ITR 0239 (SC) in which their Lordships was pleased to hold that under the present Act there is no discretion available to an AO either to assess the income in the hands of AOP or its members, but the same has to be assessed only in the hands of the AOP. The Apex Court further held that right income must be assessed in the hands of the right person. We also respectfully follow the decision of the Hon’ble High Court of Karnataka in the case of Pr. CIT vs. Ind Sing Developers (P) Ltd. (2016) 288 CTR 0154 (Kar) in which the Lordships relying upon the decision of Hon’ble Supreme Court of Ch. Atchaiah held that merely because the right person could not be taxed it would not be open to the Revenue to tax a wrong person. We find that the similar view was expressed by the Coordinate Delhi ‘G’ Special Bench, in the case of Pradeep Agencies – Joint Venture vs. ITO (2007) 111 TTJ 0346 (SB) and as also, by the Bangalore Bench, in the case of K.S. Sathyanarayana vs. ACIT (2008) TTJ 0716. 9. In view of the above findings, we find no infirmity in the findings given by the ld. CIT(A) deleting the entire additions made by the AO in the hands of the assessee on account of assessee's share in profit and inadmissible expenses of various syndicates, for various assessment years in the appeal. Accordingly, Ground No. 1 of the Revenue for all the assessment years viz. A.Y. 2010-11 to A.Y. 2016-17, being devoid of any merit, are hereby Dismissed. 10. Ground No. 2 of the Revenue for A.Y. 2012-13 10.1 Through the Ground No. 2, for the A.Y. 2012-13, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.5,41,800/- made by the AO on account of undisclosed income from mining. 10.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of the search in the premises of some Shri Ranjeet Shivhare and Smt. Sunita Shivhare of Civil Lines, Betul, some incriminating documents were found and inventorized as LPS-4 (BPS-2) and from such documents, it was observed that license of some mines situated at Bhaura had been allotted in the name of Shri Pramod Shivhare for the period 01/04/2011 to 31/03/2012. From the same premises, some documents relating to the VAT Assessment and Entry Tax Assessment were also found which have been reproduced by the AO in the body of the assessment order. Further, from one of the loose papers, it was found that an amount of Rs.91,050/- was reimbursed to Shri Pramod Shivhare through Manual Voucher which contained header naming ‘Ramswaroop Shivhare’, the assessee towards sales IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 65 tax challan against sales tax assessment. On the basis of such voucher, the AO reached to the conclusion that the assessee was connected with the mine. Accordingly, the sale value of the extraction shown in the entry tax assessment at Rs.5,41,800/- was considered to be unexplained income of the assessee for A.Y. 2012-13 and corresponding addition was made to the income of the assessee. 10.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences. The Ld. CIT(A) observed that the AO made the addition only on the ground that payment relating to some taxes determined in the sales tax assessment of some mine business, framed in the name of some Pramod Shivhare, was found made on a voucher containing the header with the name of the assessee. The ld. CIT(A) further noted that the assessee has not carried out any business of mining and the AO has not brought on record any positive evidence to establish that the apparent owner of the business of the mine namely Shri Pramod Shivhare was merely a name lender or benamidar of the assessee. The ld. CIT(A) further observed that AO has not made any enquiry either from the mining department or from Shri Ranjeet Shivhare and Smt. Sunita Shivhare in whose premises such papers were found or from Shri Pramod Shivhare in whose name sales tax and entry tax assessments were made. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.5,41,800/- made by the AO on this count. The ld. CIT(A) has given the relevant findings at para (4.11.1) of his order which are reproduced as under: “4.11.1 I have considered the AO’s findings and the written as well as oral submissions of the appellant. The addition has been made by the AO only on the ground that payment relating to some taxes determined in the sales tax assessment of some mine business framed in the name of some Pramod Shivhare was found made on a voucher containing the header with the name of the appellant. The appellant has taken a plea that he was not carrying out any mining business. The AO has not brought on record any positive evidence that the apparent owner of the business of the mine namely Shri Pramod Shivhare was merely a name lender or benamidar of the appellant. Except relying upon the said vouchers, the AO has not conducted any enquiry as to whether or not the appellant was indulged into any mining business. The AO has not made any enquiry either from the mining department or from Shri Ranjeet Shivhare and Smt. Sunita Shivhare in whose premises such papers were found or from Shri IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 66 Pramod Shivhare in whose name sales tax and entry tax assessments were made. I find significant force in the contentions of the appellant that he was carrying out his separate business of liquor in the premises of Shri Ranjeet Shivhare wherefrom the said vouchers were seized, the common cashier wrongly used the pre-printed voucher containing the name of the appellant. The addition has been made merely on guess work and conjectures without any concrete evidence on record and thus, addition made by the AO amounting to Rs. 5,41,800/- in A.Y. 2012-13 is Deleted. Therefore, appeal on this ground is Allowed.” 10.4 Aggrieved with the addition deleted by the ld. CIT(A), the revenue is in appeal before us. 10.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 10.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A) and has also filed short hand notes before this Bench. 11.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. 11.2 We find that first of all, except making an addition for A.Y. 2012-13 on account of assessee’s undisclosed income from carrying out the business of mining, for all other six assessment years, the AO has not made any addition which proves that for other assessment years viz. either before the A.Y. 2012- 13 or after A.Y. 2012-13, the AO did not find the assessee carrying on the mining business. In our considered view, such fact establishes the stand of the assessee that he had not carried out any mining business. 11.3 We find that the subject addition of Rs.5,41,800/- has been made by the AO only on the basis of some loose papers inventorized as LPS-4 (BPS-2) seized during the course of search from the premises of third persons namely, Shri Ranjeet Shivhare & Smt. Sunita Shivhare situated at Civil Lines, Betul. The copies of the loose papers inventorized as LPS-4 have been filed by the assessee before us at page no. 74 to 88 of his Paper Book for A.Y. 2012-13. On a perusal of such seized documents, we find that the seized documents placed at page nos. 76 to 85 are in the nature of Demand Notices and Assessment Orders IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 67 passed under Madhya Pradesh Vat Act, 2002 for the period from 01/04/2009 to 31/03/2012 in the name of some M/s. Pramod Shivhare, Sand Contractor, Betul. We find that in all such Assessment Orders framed under the M.P. Vat Act, 2002, the name of the assessee has not been mentioned and from such seized documents, it cannot be inferred that the assessee was carrying out any mining or sand trading business. However, from the other three loose papers placed at page no. 86 to 88 of the assessee’s Paper Book for A.Y. 2012-13, copies whereof have also been scanned by the AO in the body of the assessment order, we find that such loose papers are in the form of vouchers, with the header ‘Ramswaroop Shivhare’ for some petty payments. On a careful examination of such vouchers, we find that first of all such vouchers bear the dates as 29/08/2012, 30/08/2012 and 31/08/2012 and since, all such dates fall in the financial year 2012-13 relevant to A.Y. 2013-14, at any rate, on the basis of such vouchers, without having any other corroborative evidence, the AO could not have formed a view that during the previous year relevant to A.Y. 2012-13, the assessee has carried out any business of mining. 11.4 We find sufficient merit in the contention of the assessee that from the premises situated at Civil Lines, Betul, wherefrom the seized documents were found, although, the assessee was carrying out his liquor business, but, from the same premises, Shri Ranjeet Shivhare, Smt. Sunita Shivhare and Shri Pramod Shivhare were also carrying out their businesses. In such circumstances, in our considered view, the explanation of the assessee to the effect that the cashier looking after the affairs of mining business of Shri Pramod Shivhare, used pre-printed vouchers of the assessee for making payments in the course of mining business, cannot be brushed aside completely. We find merit in the contention of the assessee that on the seized vouchers or any of the other documents, except mention of the name of the assessee at the caption of the vouchers, no where the assessee’s name is appearing either as the recipient or as payers or in any other capacity. We find that, from the said documents, nowhere any nexus of the assessee with sand business gets established. In such circumstances, there cannot be any presumption for making any payment or earning of any income in respect of the said sand business. 11.5 We find that the ld. AO has alleged that the assessee has carried out the business of mining, but, the AO has not brought on record and proof that License for mining was issued in the name of the assessee. We find that in the instant case, the ld. AO has also not made any independent inquiry from the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 68 mining department or from the persons from whose possession the subject seized documents were found. 11.6 In view of the findings given above, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition of Rs. 5,41,800/- made by the AO in the assessee’s income on account of unexplained income from mining. Resultantly, the Ground No. 2 of the Revenue for A.Y. 2012-13 is hereby Dismissed. 12. Ground No. 3 of the Revenue for A.Y. 2012-13 12.1 Through the Ground No. 3, for the A.Y. 2012-13, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.1,83,62,600/- made by the AO on account of undisclosed income from sale of some agricultural land. 12.2 Briefly stated facts relating to the case, as emerging out from the assessment order, are that during the course of the search in the premises of the accountant of Shri L.N. Shivhare namely Shri Brijmohan Kushwaha, one loose paper in the form of an excel sheet was found and inventorized as Page No. 77 of LPS-34 (GWS-10). The scanned copy of the seized document has been given by the AO at page no. 137 of her Assessment Order. From such loose paper, the AO observed that the assessee along with other three co-owners sold some ‘16 Bigha land’ situated at Shitla Road for a total consideration of Rs.4,61,50,000/- and the assessee was having 25% share in the sales consideration. On the basis of notings made on such loose paper, the AO reached to a conclusion that the assessee had received a sum of Rs.1,83,62,600/- [Rs. 1,43,00,100/- + Rs. 40,62,500/-] from sale of above property, in cash, which was not disclosed by the assessee in his return of income for the relevant assessment year. Accordingly, the AO made an addition of Rs.1,83,62,600/- in the assessee’s income on account of undisclosed income. 12.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which has been reproduced by the ld. CIT(A) at page no. 99 to 102 of his Order. The Ld. CIT(A) observed that the said excel sheet, on the basis whereof the subject addition was made, pertains to the accounts for sale of some agricultural land which IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 69 was a rural agricultural land out of the ambit of the definition of the capital asset under s.2(14) of the Act and any profit or gain arising from sale of such land cannot be charged to tax under section 45 of the Act. The ld. CIT(A) also held that there cannot be two different methods for computing disclosed income or undisclosed income but, both the incomes are necessarily required to be computed in accordance with the various provisions of the Act only. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.1,83,62,600/- made by the AO on this count. The ld. CIT(A) has given the relevant findings at para (4.12.3) of his order which are reproduced as under: “4.12.3 I have considered the facts of the case, the Assessment Order, the written as well as oral submissions of the appellant, the remand report of the AO and the counter comments of the appellant. I find that there cannot be two views that the appellant had made cash receipts aggregating to a sum of Rs.1,83,62,600/- as is also evident from the seized excel sheet inventorized as Page No. 77 of LPS-34 (GWS-10) and reproduced by the AO at page no. 137 of the impugned Order. On a perusal of such excel sheet, it becomes clear that it is relating to some profit from sale of some ‘16 Bighas Land’ at Shitla Road, which was in ownership of four persons including the appellant who was having 25% share in such land. The entire amount of receipts from sale of land cannot be taxed but only the amount of capital gain arising from such sale of land can be a subject matter of tax. I have gone through the certificate issued by the concerning Patwari of the village in which the land was situated and the Patwari has clearly certified that the land was agricultural in the nature and it was situated at a distance of nearly 15 kms. from the city of Gwalior, the nearest municipality. It has further been certified that the total population of the village was nearly 890. In such circumstances, I am of the firm view that the said excel sheet pertains to the accounts for sale of some agricultural land which was a rural agricultural land out of the ambit of the definition of the capital asset under s.2(14) of the Act. Once, this being the situation, any profit or gain arising from sale of such land cannot be charged to tax under section 45 of the Act. In my view, there cannot be two different methods for computing disclosed income or undisclosed income but, both the incomes are necessarily required to be computed in accordance with the various provisions of the Act only. Although the appellant had made cash receipts of Rs.1,83,62,600/- but, in respect of such cash receipts, no taxable income, in accordance with the provisions of the law, arisen in the hands of the appellant and thus, addition made by the AO amounting to Rs. 1,83,62,600/- in A.Y. 2012- 13 is Deleted. Therefore, appeal on these grounds is Allowed.” 12.4 Aggrieved with the addition deleted by the ld. CIT(A), the revenue is in appeal before us. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 70 12.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 12.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 13.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides. 13.2 We find that in the instant case, the AO has made the addition on the basis of one excel sheet, a copy whereof has been scanned by the AO herself at para (21.2) at page no. 137 of her Order. On a perusal of the seized document, we find that it is in the form of some excel sheet with the handwritten caption ‘Land Shitla Road Final’. In such excel sheet, the name of the assessee in the abbreviated form as ‘RS’ along with his 25% share has been mentioned. In the said excel sheet, under the name of the assessee, two receipts of cash, amounting to Rs. 1,43,00,100/- and Rs. 40,62,500/- aggregating to a sum of Rs. 1,83,62,600/- have been stated as determined by the AO. In the same sheet, out of such receipts of Rs. 1,83,62,600/-, some payment in the form of cash amounting to Rs. 8,00,000/- has also been shown with the result of net cash receipts of Rs. 1,75,62,600/- from the sale of some 16 Bhiga Land at Shitla Road. Accordingly, in our considered view, the AO has rightly reached to a conclusion that from the sale of land at Shitla Road, the assessee, as his share, had received a sum of Rs. 1,83,62,600/-. From the computation of income of the assessee, placed at page no. 53 to 56 of the assessee’s Paper Book for A.Y. 2012-13, furnished by the assessee along with his return of income u/s. 153A for A.Y. 2012-13, we did not find any income or loss shown by the assessee from sale of such land. 13.3 However, we find that as on 31/03/2011, the assessee along with some Shri Laxmi Narayan Shivhare had executed one sale deed in respect of Land situated at Patwari Halka No. 24 and 25/74, Village Chandohakhurd, Tehsil Bari, District Gwalior, admeasuring 1.463 Hectares. In such deed, it has been mentioned that the said Land is nearby Shitla Mandir. We find that in respect of such land, the assessee has filed one certificate duly issued by the concerning Patwari, which is placed at page no. 100 & 101 of the assessee’s Paper Book for A.Y. 2012-13 and from such certificate, it is evident that the land sold by the assessee was in the nature of agriculture land as per the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 71 revenue record and such land was situated beyond 15 Kms from the local limits of the nearest municipal corporation i.e. Municipal Corporation of Gwalior and further, the population of the village in which such land was situated was also to the extent of 890 only. Thus, in our view, the land sold by the assessee remains out of the ambit of the definition of the capital asset as ascribed to in clause (14) of s. 2 of the Act and consequently, any gain arising out of the sale of such exempted rural agricultural land cannot be subjected to tax. In our considered view, for the purpose of taxation under the Act, the nature of any undisclosed consideration in respect of transfer of such land would remain the same as that of the disclosed consideration. In view of such facts, we find no infirmity in the action of the ld. CIT(A) in deleting the addition of Rs. 1,83,62,600/- from the assessee’s income on account of undisclosed income. Consequently, the Ground No. 3 of the Revenue for A.Y. 2012-13 is hereby Dismissed. 14. Ground No. 4 of the Revenue for A.Y. 2012-13 14.1 Through the Ground No. 4, for the A.Y. 2012-13, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.40,32,000/- made by the AO on account of undisclosed investment in immovable property. 14.2 Briefly stated facts relating to the case, as emerging out from the assessment order, are that the AO, at first para on page no. 141 of the Order, has merely stated in two lines that ‘Considering the fact that the amount of Rs.40,32,000/- is hereby added to the total income of the assessee for A.Y. 2012-13 as undisclosed investment’. Except making the above comments, there is no discussion or finding by the AO, anywhere in the entire body of the assessment order. The AO has not brought on record either the nature or description or the location of the property in which the said investment was allegedly made by the assessee. 14.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made written submissions. The Ld. CIT(A) forwarded the written submission along with additional evidences for AY 2012-13 to AO for comments. According to the ld. CIT(A), the AO did not make any counter comment in respect of the assessee’s written submission on the above ground. Thus, the ld. CIT(A) noted that even at the time of forwarding the remand report, the AO was not in possession of any detail as regard to the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 72 subject addition. As per the ld. CIT(A), the AO could not justify his action of making the addition without giving necessary details. The ld. CIT(A) observed that in the instant case, not a single detail as regard to the alleged undisclosed investment, such as the nature of description of the investment or the date of investment or the details of seized material or any other document from which making of such undisclosed investment could have been discerned. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.40,32,000/- made by the AO on this count. The ld. CIT(A) has given the relevant findings at para (4.13.1) of his order which are reproduced as under: “4.13.1 I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. During the course of the appellate proceedings, written submission along with additional evidences for AY 2012-13 were forwarded to AO for comments. The AO has not made any counter comment in respect of the appellant’s written submission on the above ground. It is thus evident that even at the time of forwarding the remand report, the AO was not in possession of any detail as regard to the subject addition. The AO could not justify his action of making the addition without giving necessary details. I find merit in the contention of the appellant that an addition cannot be made in the income of an assessee without any basis. In the instant case, not a single detail as regard to the alleged undisclosed investment, such as the nature of description of the investment or the date of investment or the details of seized material or any other document from which making of such undisclosed investment could have been discerned. Thus, addition made by the AO amounting to Rs. 40,32,000/- is Deleted. Therefore, appeal on this ground is Allowed.” 14.4 Aggrieved with the addition deleted by the ld. CIT(A), the revenue is in appeal before us. 14.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 14.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 15.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. Upon overall consideration of all, we find ourselves in full agreement with the findings given by the ld. CIT(A). We find that in the entire body of the assessment order, the AO has not discussed or even IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 73 whispered regarding the basis for making the said addition. We find that except stating two lines, at page no. 141 in the assessment order read as “Considering the fact that the amount of Rs.40,32,000/- is hereby added to the total income of the assessee for A.Y. 2012-13 as undisclosed investment”, the AO has not uttered any single word regarding the said addition. We find substance in the contention of the counsel of the assessee that for making any addition on the allegation of unexplained investment, the onus lies on the assessing officer first to identity the property in which the investment has been made and then to quantify the amount of total investment and as also, the amount of unexplained investment. But, in the instant case, the AO has not even brought on record the description or nature of the property for which the allegation against making of undisclosed investment has been made. We find that neither during the course of the assessment proceedings nor during the course of the Remand proceedings, the AO could furnish the necessary details regarding the said addition and therefore, the ld. CIT(A) was justified in deleting the addition. We find that even during the course of proceedings before us, the ld. CIT(DR) could not bring on record any detail regarding to any property or any investment for justifying the said addition made by the AO. Consequently, the Ground No. 4 of the Revenue for A.Y. 2012-13 is hereby Dismissed. 16. Ground No. 2 of the Revenue for A.Y. 2014-15 16.1 Through the Ground No. 2, for the A.Y. 2014-15, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.53,57,275/- made by the AO on account of undisclosed interest income from capital invested by the assessee in Damoh Syndicate. 16.2 Briefly stated facts relating to the issue, as emerging out from the assessment order, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the premises of Shri Rameshchandra Rai, Shri Manish Rai & Smt. Nidhi Rai, situated at 5th Floor, Shekhar Planet, Vijay Nagar, Indore, some loose papers in the form of copy of account of some Jabalpur Co. in the books of some Damoh syndicate for 2013-14 were found and seized. The AO, from the subject loose papers, noted that the assessee had made capital investment in the group and on such capital, the assessee had derived interest income to the tune of Rs.53,57,275/-. Accordingly, the AO made an addition of Rs.53,57,275/- in the assessee’s income on account of undisclosed interest income on capital in Damoh Syndicate. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 74 16.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made written submissions, which has been reproduced by the ld. CIT(A) at page no. 107 and 108 of his Order. The Ld. CIT(A) observed that the interest income derived by the assessee from capital investment in Syndicate is not chargeable to tax as his personal income under section 86 r.w.s. 67A of the Act. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.53,57,275/- made by the AO on this count. The ld. CIT(A) has given the relevant findings at para (4.14.1) of his order which is reproduced as under: “4.14.1 I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. As far as the contention of the appellant to the effect that the subject seized papers have no nexus with his financial affairs, I do not find any substance as the papers were recovered from the persons with whom undisputedly, the appellant had formed liquor syndicates. However, I find merit in the legal plea of the appellant that even if the interest income of the appellant from capital invested in such syndicates is accepted as correct, then also the same having been derived from an AOP which is separately chargeable to tax, any interest income earned from such AOP cannot be charged to tax under section 86 read with section 67A of the Act. Under sub-section (1) to section 67A of the Act, any interest received by a member of an AOP is considered to be the share of income of that member in the AOP and the same is not chargeable to tax in accordance with the provisions of section 86 of the Act. A detailed findings as regard to the taxability of income of a member of AOP (Syndicate) from such AOP has been given above and it was held that such income is not chargeable to tax in the hands of the members. Thus, addition made by the AO amounting to Rs.53,57,275/- is Deleted. Therefore, appeal on these grounds is Allowed.” 16.4 Aggrieved with the addition deleted by the ld. CIT(A), the revenue is in appeal before us. 16.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 16.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 17.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. Upon a perusal of the copies of the seized documents, as scanned by the AO herself at page nos.114 to 118 of her IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 75 Assessment Order, we find that the Jabalpur Company in which the assessee was having 50% share had made investment in the Damoh Syndicate and from making such investment by way of capital, Jabalpur Company had earned interest income amounting to Rs. 1,07,14,550/- and accordingly, the assessee’s share in such interest income worked out to be at Rs. 53,57,275/- as rightly determined by the AO. 17.2 However, in our considered view, the interest income earned by the assessee from such syndicate which is in the form of an AOP/BOI, cannot be charged to tax in the hands of the assessee. We find that while dealing with the Ground No. 1 of the Revenue for all the assessment years, we have already discussed the legal position of law that if any AOP is chargeable to tax at the maximum marginal rate, then any income earned by any member from such AOP cannot be charged to tax in the individual hands of the member thereof. In the present case, we find that the M/s. Damoh Syndicate as also, M/s. Jabalpur Company are AOPs which are separate taxable entities and which are chargeable to tax at the maximum marginal rate and therefore, any interest income derived by the assessee from such syndicates cannot be added to the taxable total income of the assessee. Thus, we find no infirmity in the action taken by the ld.CIT(A) in deleting the entire addition of Rs. 53,57,275/- made by the AO on this count. Accordingly, the Ground No. 2 of the Revenue for A.Y. 2014-15 is hereby Dismissed. 18. Ground No. 2 of the Revenue for A.Y. 2016-17 18.1 Through the Ground No. 2, for the A.Y. 2016-17, the revenue has challenged the action of the ld. CIT(A) in deleting the addition of Rs.22,33,960/- made by the AO on account of unexplained cash found and seized during the course of search. 18.2 Briefly stated facts relating to the issue, as emerging out from the assessment order, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the three premises of the assessee, cash aggregating to Rs.26,22,702/- was found. Out of the total cash of Rs.26,22,702/-, cash amounting to Rs.22,23,960/- was found to be pertaining to the assessee. During the course of the assessment proceedings, the AO required the assessee to furnish explanation on the sources of the cash so found. The assessee furnished his explanation on the subject issue which has also been reproduced by the AO at para (13.3) on page no. 22 & 23 of the Order. The assessee claimed that out of the total cash of Rs.22,23,960/- so IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 76 found at two premises viz. Rs.2,85,800/- from residence at 47, Durgapuri, Tansen Nagar, Gwalior and Rs.19,38,160/- from office at 01, New Kherapati Colony, Gwalior, cash amounting to Rs.2,10,800/- was belonging to assessee’s wife namely Smt. Kalpana Shivhare and the remaining cash amounting to Rs.20,13,160/- was belonging to the assessee. The assessee claimed that the main source of the aforesaid cash of Rs.20,13,160/- was out of the cash withdrawal of Rs.30,00,000/- which was made by the assessee immediately just before 7 days of the date of search i.e. on 30-12-2015. The AO discarded and disregarded such explanation of the AO and accordingly, an addition of Rs.22,23,960/- on account of unexplained cash has been made by the AO in the assessee’s income. 18.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made written submissions. The Ld. CIT(A) observed that out of the cash of Rs.22,23,960/- so found from two premises of the assessee situated at Gwalior, cash amounting to Rs.2,10,800/- kept at residential premises situated at 47, Durgapuri, Tansen Road, Gwalior, was belonging to the wife of the assessee Smt. Kalpana Shivhare who was having independent sources of income and was separately assessed to income- tax. As regard to the sources of remaining cash of Rs.20,13,160/- found from the residential as well as office premises of the assessee situated at Gwalior, the ld. CIT(A) further noted that such cash was available with the assessee in the regular course of his liquor business and immediately prior to 7 days of the search i.e. on 30-12-2015, the assessee had made a withdrawal of a sum of Rs.30,00,000/- through cheque no. 100008 from his CC account maintained with UCO Bank, Old High Court Road Branch, Gwalior. According to the ld. CIT(A), the AO could not controvert such fact and has also not brought on record utilization of the cash so withdrawn by the assessee for any other purpose. Accordingly, the ld. CIT(A) deleted the entire addition of Rs.22,23,960/- made by the AO on this count. The ld. CIT(A) has given the relevant findings at para (4.18.1) of his order which are reproduced as under: “4.18.1 I have duly considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. I find strong force in the contentions raised by the appellant that out of the cash of Rs.22,23,960/- so found from two premises of the appellant situated at Gwalior, cash amounting to Rs.2,10,800/- kept at residential premises situated at 47, Durgapuri, Tansen Road, Gwalior, was belonging to the wife of the appellant Smt. Kalpana Shivhare who is having independent sources of income and is separately assessed to IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 77 income-tax. In support of such contention, the appellant has furnished a copy of letter of undertaking duly given by Smt. Kalpana Shivhare and as also, a copy of the separate assessment order framed in the case of Smt. Kalpana Shivhare under s.153A r.w.s. 143(3) of the Act for A.Y. 2010-11 to A.Y. 2016-17. From the copy of the assessment order, it was observed that Smt. Kalpana Shivhare had shown substantial amount of income in her returns from year to year and therefore, ownership of meager cash of Rs.2,10,800/- by Smt. Kalpana Shivhare deserves to be accepted. As regard to the sources of remaining cash of Rs.20,13,160/- found from the residential as well as office premises of the appellant situated at Gwalior, the appellant has claimed that such cash was available with him in the regular course of his liquor business and immediately prior to 7 days of the search i.e. on 30-12-2015, the appellant had made a withdrawal of a sum of Rs.30,00,000/- through cheque no. 100008 from his CC account maintained with UCO Bank, Old High Court Road Branch, Gwalior. On perusal of bank account statement of the appellant it is seen that appellant has made withdrawal of sum of Rs. 30 lakh from his bank account. Further, the AO could not controvert such fact and has also not brought on record utilization of the cash so withdrawn by the appellant for any other purpose. Hence, appellant has explaind the sources of cash found from his possession and therefore, no addition on this ground was warranted. Thus, addition made by the AO amounting to Rs. 22,23,960/- is Deleted. Therefore, appeal on this ground is Allowed.” 18.4 Aggrieved with the addition deleted by the ld. CIT(A), the revenue is in appeal before us. 18.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 19.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. We find that during the course of search and seizure actions carried out in the case of the assessee u/s. 132 of the Act, cash aggregating to Rs. 22,23,960/- was found from various premises of the assessee. We find that the assessee has contended that out of the total cash aggregating to a sum of Rs. 22,23,960/-, cash aggregating to Rs. 2,10,800/- was belonging to his wife namely Smt. Kalpana Shivhare, who is separately assessed under PAN: AGHPS8986N and who is having independent source of income. Further, in the case of Smt. Kalpana Shivhare, simultaneous assessment proceedings u/s. 153A r.w.s. 143(3) of the Act were carried out by the same AO. We find that in evidence of the aforesaid assertions of the assessee, the assessee has filed one Letter of Confirmation cum Undertaking from Smt. Kalpana Shivhare, which is placed at page no. 84 of the assessee’s Paper Book for A.Y. 2016-17. Under para (4) of the subject Undertaking, Smt. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 78 Kalpana Shivhare has clearly admitted that an amount of Rs. 2,10,800/- was belonging to her only. Further, in evidence of the claim of the assessee that Smt. Kalpana Shivhare is regularly assessed to Income tax and was having sufficient sources of income, the assessee has also filed a copy of the assessment order framed by the same assessing officer i.e. ACIT (Central) – I, Bhopal, in the case of Smt. Kalpana Shivhare, u/s. 153A r.w.s. 143(3) for A.Y. 2010-11 to A.Y. 2015-16 and u/s. 143(3) for A.Y. 2016-17, at page nos. 85 to 89 of his Paper Book for A.Y. 2016-17. From the copy of assessment order placed on record, we find that for A.Y. 2016-17, Smt. Kalpana Shivhare has been assessed u/s. 143(3) by the same AO determining an income of Rs. 7,13,590/-. Before us, the ld. CIT(DR) could not controvert these assertions made by the assessee. Thus, in our considered view, we do not find any infirmity in the action of the ld. CIT(A) in treating the cash amounting to Rs. 2,10,800/- as belonging to Smt. Kalpana Shivhare and not of the assessee. 19.2 Now, as regard to the balance cash found amounting to Rs. 20,13,160/- we find sufficient force in the contention of the assessee that the source of such cash was the cash withdrawn by the assessee from his bank account maintained with UCO Bank, Old High Court Branch, Gwalior in the regular course of his retail trade of liquor. We find that the assessee has filed before us a copy of the relevant bank statement of his bank account maintained with the UCO Bank, Gwalior, at page no. 90 of the Paper Book for A.Y. 2016-17. Upon going through such bank statement, we find that on 30/12/2015, the assessee has withdrawn cash amounting to Rs. 30,00,000/- vide cheque no. 100008. Further, upon perusal of the relevant bank statement, we observed that after making the cash withdrawals of Rs. 30,00,000/-, the assessee has not re- deposited such cash in his bank account up till the date of the search. Furthermore, the AO could not bring any positive material on record to disbelieve the fact that the assessee has used the cash so withdrawn for some other purposes. Thus, in our considered view, we find merit in the contention of the assessee that the cash amounting to Rs. 20,13,160/- was available with him out of the cash withdrawals made from his disclosed bank account. Accordingly, we do not find any infirmity in the action of the ld. CIT(A) in deleting the entire addition of Rs. 22,23,960/- made by the AO in the assessee’s income on account of unexplained cash. Resultantly, the Ground No. 2 of the Revenue for A.Y. 2016-17 is hereby Dismissed. 20. Ground No. 3 of the Revenue and Ground Nos. 9(a) to 9(d) of the Assessee for A.Y. 2016-17 IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 79 20.1 Through the ground no.3, the revenue has challenged the action of the ld. CIT(A) in deleting the addition to the extent of Rs.1,75,50,000/- out of the total addition of Rs.3,05,00,000/- made by the AO on account of undisclosed investment of shares of M/s. Agrawal Distilleries Pvt. Ltd. in A.Y. 2016-17. For the addition sustained by the ld. CIT(A) to the tune of Rs.1,29,50,000/-, the assessee has raised Ground Nos. 9(a) to 9(d) in his appeal for A.Y. 2016-17. 20.2 Briefly stated facts of the issue, as culled out from the records, are that during the course of the survey operations carried out under s.133A of the Act in the premises of M/s. Hotel Ambrosia, Nanak Ganj, Jhansi belonging to Shri Ramesh Chand Rai, some incriminating documents inventorized as LP-1, backside of Page-29, were found and impounded. The scanned copy of the seized document has been reproduced by the AO at page no. 124 of the Order. From such loose paper, the AO noted that the assessee had made investment of Rs.5,85,00,000/- in shares of one company namely M/s. Agrawal Distilleries Pvt. Ltd. During the course of the assessment proceedings, the AO required the assessee to furnish his explanation on the subject issue. The assessee furnished his explanation which has also been reproduced by the AO at para (18.1) on page no. 124 to 127 of the Assessment Order. The assessee claimed that since the subject loose paper was not found from his premises and further since, the same has neither been prepared by him or on his instructions and therefore, no adverse inference could have been drawn against him on the basis of such loose paper. The assessee further contended that as against the notings made on the subject loose paper for 20% shareholding to be bought by the assessee in the said company for a total consideration of Rs.5,85,00,000/-, the assessee had actually made an investment only in respect of 14% shares of the said company and even if the amounts noted in the said loose paper are taken to be correct, then too, as per pro-rata consideration, investment of the assessee at the most be considered to be at Rs.4,09,50,000/-. The assessee further claimed that since he had already shown an amount of Rs.2,80,00,000/- having been made through banking channels and duly recorded in his books of account, the remaining addition to the tune of Rs.1,29,50,000/- could have been made in the hands of the assessee on this count. The AO, after partly considering the submission of the assessee, granted a credit of Rs.2,80,00,000/- as shown by the assessee in his books but, did not accept the claim of the assessee for having invested in only 14% shares of the said company in place of 20% as noted in the subject loose paper. Accordingly, after giving credit of Rs.2,80,00,000/- from the total investment of Rs.5,85,00,000/- found noted on the said loose paper, the AO made an IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 80 addition of Rs.3,05,00,000/- in the hands of the assessee on account of unexplained investment in purchase of shares of the company. 20.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences which were also furnished by him before the AO. The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) at page no. 142 to 150 of his Order. The ld. CIT(A) while upholding the evidentiary value of the seized document, accepted the contention of the assessee to the effect that as against the mentioning of acquisition of 20% share in the company M/s. Agrawal Distilleries Pvt. Ltd., factually the assessee had purchased only 14% shares of the said company. Accordingly, the ld. CIT(A), firstly by proportionately reducing the alleged amount of investment, as mentioned in the same loose paper, from Rs.5,85,00,000/- to Rs.4,09,50,000/-, and secondly, granting the credit for investment aggregating to Rs.2,80,00,000/- which were duly recorded in the books of the assessee, confirmed the addition amounting to Rs.1,29,50,000/- which resulted into relief of a sum of Rs.1,75,50,000/- to the assessee. 20.4 Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us and against the addition confirmed by the ld. CIT(A), the assessee has preferred a cross appeal before us. 20.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. 20.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 20.7 Before us, the ld. counsel of the assessee, in addition to relying upon his written submissions, had raised an alternate plea that first of all the assessee had not made unexplained investment in acquisition of share of M/s. Agrawal Distilleries Private Limited (in short ADPL), as has been alleged by the AO, but, even otherwise, if it is presumed that the assessee had made unexplained investment to the extent of Rs. 1,29,50,000/- as held by the ld. CIT(A) then also, the investment not having been made during the previous year relevant to A.Y. 2016-17, no addition was warranted on this count. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 81 21.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of lower authorities and written and oral submissions made from both the sides and also gone through the judgments and decisions referred to and relied upon by both the sides. We have carefully gone through the subject loose paper seized from the premises of the assessee, inventorised as Page – 29, LP-1, placed at Page No. 93 of the Paper Book filed by the assessee for A.Y. 2016-17. A copy of such loose paper has also been scanned by the AO herself at page no. 124 of her Assessment Order. We find that such loose paper is in the form of a computerized excel sheet with the title ‘Agrawal Distillaries Private Limited’ and heading ‘Investment Details’. We find that such excel sheet contains many columns with the headings ‘Name’, ‘Share’, ‘Amount Paid’, ‘Total Amount to Pay’, ‘Balance to Pay’, ‘Remarks’ etc. We further find that in the said excel sheet, at the second serial no. the name of the assessee along with his share ratio of 20% is getting clearly reflected. However, we find full merit in the contention of the assessee that initially he had agreed for making investment for purchase of 20% shares of ADPL but, afterwards, he could only make investment upto 14% of the shares of ADPL. Upon going through the Audited Financial Statements of ADPL for the F.Y. 2014-15, placed at page no. 101 to 115 of the assessee’s Paper Book for A.Y. 2016-17, and particularly upon going through the Schedule 2 of the Share Capital at page no. 110, we find that the paid up share capital of the ADPL, as on 31/03/2015 comprises of 40,034 equity shares of Face Value of Rs. 100/- each thereby totaling to Rs. 40,03,400/- and out of such paid up capital the ADPL has shown the shareholding of the assessee in respect of 5,604 equity shares, as on 31/03/2015, which works out to be 14% only. Further, upon going through the reply of the assessee filed before the AO, reproduced by the AO herself at page no. 126 & 127 of the assessment order, we find that the as per the assessee, he had made the investment only in 14% shares of the ADPL for a total consideration of Rs.2,80,00,000/- and that too, through banking channels only. We find that the AO has merely relied upon the subject loose paper without conducting any further inquiry and without bringing any other corroborative evidence to her rescue. The ld. CIT(DR) could also not bring on record any facts or evidences to controvert the assertion made by the assessee in this behalf. Thus, in light of the aforesaid, we find full merit in the contention of the assessee that he had only made investment in 14% of shares of ADPL and not 20% as alleged by the AO. From the seized excel sheet for making an investment of 20% in shares of ADPL, the assessee was required to IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 82 make an investment of Rs. 5,85,00,000/-, either by way of cash or cheque and since, as against such 20%, the assessee has only acquired 14% share, the assessee’s share of investment will have to be re-computed on pro-rata basis which works out to be at Rs.4,09,50,000/- and since, as per the AO’s own finding, the assessee had found to have made investments to the extent of Rs. 2,80,00,000/- through banking channels, the balance amount of the investment i.e. Rs. 1,29,50,000/- remained unexplained and therefore, such amount of unexplained investment was rightly determined by the ld. CIT(A). 21.2 However, as regard to the year of making of the aforesaid amount of unexplained investment by the assessee, we find that during the previous year relevant to the assessment year under consideration, since, the assessee had not purchased any shares of ADPL therefore, no addition qua the investment made in shares of ADPL can be subjected to tax during the relevant assessment year. On careful examination of the Audited Financial Statement of the ADPL, as placed at page no. 110 of the assessee’s Paper Book for A.Y. 2016-17, we find that as per such balance sheet, the assessee had become shareholder in the ADPL holding 14% share in the company. We find that the assessee had purchased such shares from one company named as Vivashwan Hotels India Pvt. Ltd. and in the audited financial statements of the assessee for the F.Y. 2014-15, placed at page no. 125 to 127 of the assessee’s Paper Book for A.Y. 2016-17, the said investment of Rs.2,80,00,000/- is getting reflected as on 31/03/2015 under the head ‘Investments’. From the copy of the confirmation letter given by the sellers of the shares, as placed at page no. 100 of the assessee’s Paper Book for A.Y. 2016-17, we find that the sellers of the share i.e. M/s. Vivaswan Hotels (India) Pvt. Ltd. have also confirmed that they have sold only 5604 nos. of shares for a total consideration of Rs. 2,80,00,000/- to the assessee. We further find from the copy of the relevant bank statement of the assessee placed at page no. 94 to 96 and copies of the demand drafts issued in favour of M/s. Vivaswan Hotels (India) Pvt. Ltd. placed at page nos. 97 to 99 that the entire disclosed consideration of Rs. 2,80,00,000/- was paid by the assessee to the sellers of the shares during the financial year relevant to A.Y. 2015-16 only. Thus, it is evident that the assessee had made the entire disclosed investment during the financial year 2014-15 only. We find that in the seized document, there is no mention of any date or period, so logically, in absence of any other contradictory material, it has to be inferred that the undisclosed investment was also made in the same year in which the disclosed investment was made. Before us, the ld. CIT(DR) could not controvert the various documentary evidences furnished by the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 83 assessee in his Paper Book. In such circumstances, we are inclined to hold that the assessee had not made any investment in the shares of ADPL during the financial year 2015-16 relevant to A.Y. 2016-17 and therefore, the addition having been made by the AO in a wrong year, is not sustainable in the eyes of the law. Accordingly, we are inclined to hold that during the previous year relevant to assessment year 2016-17, the assessee had not made any unexplained or unaccounted investment in purchase of shares of ADPL and therefore, no addition of any amount was warranted in the assessee’s income for A.Y. 2016-17 on this count. Accordingly, in our considered view, the ld. CIT(A) was not justified in confirming addition even to the extent of Rs. 1,29,50,000/- in the income of the assessee for A.Y. 2016-17 out of the total addition of Rs. 3,05,00,000/- made by the AO on this count. Consequently, the Ground No. 3 of the Revenue for A.Y. 2016-17 is hereby Dismissed whereas, the Ground Nos. 9(a) to 9(d) of the Assessee for A.Y. 2016-17 are allowed. 22. Ground Nos. 1(a), 1(b), 2(a) & 2(b) of the Assessee for A.Y. 2010-11 to A.Y. 2016-17; Ground No. 2(c) for A.Y. 2010-11, A.Y. 2011-12 , A.Y. 2012-13 & A.Y. 2016-17 22.1 Through these grounds of appeal, the assessee has challenged the time limit for passing of the assessment order and as also auditing of books of account u/s. 142(2A) of the IT Act, 1961. 22.2 Before us, the counsel of the assessee did not press the grounds so raised and therefore, Ground Nos. 1(a), 1(b), 2(a) & 2(b) of the Assessee for A.Y. 2010-11 to A.Y. 2016-17; Ground No. 2(c) for A.Y. 2010-11, A.Y. 2011-12 , A.Y. 2012-13 & A.Y. 2016-17 are hereby Dismissed. 23. Ground No. 3 of the Assessee for A.Y. 2010-11 to A.Y. 2016-17 23.1 Through this ground of appeal taken for all the assessment years under consideration, the assessee has challenged the framing of the assessment on the basis of the report submitted by the special auditors without giving any opportunity to the assessee on such report. 23.2 Before us, the counsel of the assessee has not pressed this ground and therefore, the Ground No. 3 for A.Y. 2010-11 to A.Y. 2016-17 is hereby Dismissed. 24. Ground No. 4 of the Assessee for A.Y. 2010-11, A.Y. 2013-14, A.Y. 2014- 15, A.Y. 2015-16 & A.Y. 2016-17 IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 84 24.1 Through the Ground No. 4 of appeal for A.Ys. 2010-11, 2013-14, 2014- 15, 2015-16 & 2016-17, the assessee has challenged the additions confirmed by the ld. CIT(A). In the written submissions, the assessee himself has submitted that he has taken separate grounds of appeal in respect of each and every addition confirmed by the ld. CIT(A) on different grounds and therefore, no separate adjudication is warranted. Accordingly, the Ground No. 4 of the Assessee for A.Y. 2010-11, A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16 & A.Y. 2016-17 is hereby dismissed. 25. Ground No. 5 of the Assessee for A.Y. 2010-11, A.Y. 2013-14, A.Y. 2014- 15, A.Y. 2015-16 & A.Y. 2016-17 and Ground No. 4 of the Assessee for A.Y. 2011-12 & A.Y. 2012-13 25.1 Through these grounds of appeal, taken for all the assessment years under consideration, the assessee has challenged the action of the ld. CIT(A) in upholding the action of the AO for making trading additions in the business income of the assessee without first rejecting the regular books of account u/s. 145(3) of the Act. 25.2 Aggrieved with the Order of Assessment, the assessee preferred separate appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee challenged that in the impugned assessment order, the AO has made trading additions in the hands of the assessee but, before making such addition, she has not specifically rejected the books of account of the assessee. 25.3 The ld. CIT(A) by way of giving his finding at para (4.4.1) of his Order dismissed the similar ground so raised by the assessee before him. The ld. CIT(A) held that during the course of the search and seizure operation in the group, certain incriminating documents and tally data were recovered and from such seized material, it got emanated that the assessee had carried out the liquor business by forming some syndicates with the other persons and from such syndicates the assessee had derived income. The CIT(A) further found that income from such syndicates were not recorded by the assessee in his regular books of account. According to the ld. CIT(A) since the AO had detected an altogether different source of income of the assessee, there was absolutely no necessity for the AO to first reject the books of account of the assessee u/s. 145(3) of the Act which was maintained in respect of individual business of liquor carried out by the assessee and in respect of syndicate businesses. Accordingly, the ld. CIT(A) dismissed the Ground so raised. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 85 25.4 Aggrieved with the Order of the ld. CIT(A), the assessee is in appeal before us. 25.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 25.6 Per Contra, Learned Counsel for the assessee relied upon the written submissions made before the ld. CIT(A). The relevant portion of the submission, as made by the assessee before the ld. CIT(A), is being reproduced as under: “In this context, it is submitted as under: 1.00 Your Honour, in the instant case, the substantial additions have been made by the learned AO on the allegation of unaccounted share of profit of the appellant in various syndicates. It is submitted that the appellant was maintaining regular books of account in ordinary course of his liquor business and in such books of account, his income from his proprietorship concern as well as income from other partnership firms in which he was one of the partners were duly incorporated. The books of accounts, so maintained, were subjected to audit by a firm of qualified chartered accountants. It is submitted that the appellant had obtained an Audit Report, in the prescribed form, from the Auditors in accordance with the provisions of s.44AB of the Act. The auditors conducting the audit had not found any defect or discrepancy in the maintenance of books of account of the appellant. It shall be worthwhile to note that during the course of the assessment proceedings, the appellant had furnished a copy of the aforesaid Audit Report before the learned AO and had also produced all his books of account, receipt books, bills, etc. before the learned AO for his verification. It is submitted that the learned AO has not found any defect or discrepancy in the books of account so maintained by the appellant. Since no defect or discrepancy was found, the learned AO has not rejected the books of account of the appellant by invoking the provisions of s.145(3) of the Act. Now, it is submitted that once the books of account of the appellant were accepted, the learned AO was duty bound to determine the business income of the appellant only as per the transactions shown in his regular books of account, in accordance with the provisions of sub-section (1) to section 145 of the Act. Consequently, without rejecting the books of account, the learned AO could not have made any addition in the appellant’s income on the presumption of receipt of income by the appellant from any liquor syndicate. 2.00 Your Honour, for the aforesaid proposition, reliance is placed on the following judicial pronouncements: i) Pyarelal Mittal vs. ACIT (2007) 291 ITR 214 (Gau) ii) The ACIT vs. M/s. Narendra Industries (2008) 10 ITJ 88 (Ind) (Trib) iii) CIT vs. Maharaja Shree Umed Mills Ltd. (1991) 192 ITR 565(Raj) iv) ITO vs. Skyjet Aviation (P) Ltd. (2006) 66 TTJ (Ahd) (TM) 21. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 86 In view of the above facts and circumstances of the case, the entire additions so made by the ld. AO on the ground of unaccounted business income deserve to be deleted in toto.” 26.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of lower authorities and written and oral submissions made from both the sides and also gone through the judgments and decisions referred to and relied upon by both the sides. In our considered view, the AO has not disturbed the trading results shown by the assessee in his books of accounts which were containing the records only in respect of the liquor business carried out by the assessee in his individual capacity. We find that the AO has made addition in the income of the assessee on a different ground i.e. the assessee's share of profit in various syndicates. Since, the addition has been made by way of discovering a new source of income by the assessee, without disturbing the results shown by the assessee in his regular books of account, there was absolutely no occasion for the AO to reject the regular books by invoking the provisions of s. 145(3) of the Act. Accordingly, the Ground No. 5 of the Assessee for A.Y. 2010-11, A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16 & A.Y. 2016-17 and Ground No. 4 of the Assessee for A.Y. 2011-12 & A.Y. 2012-13 are hereby Dismissed. 27. Ground Nos. 8(a) to 8(d) of the Assessee for A.Y. 2010-11 & A.Y. 2013-14 27.1 Through these Grounds of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the additions to the tune of Rs.3,83,03,319/- and Rs.4,84,04,187/- made by the AO in A.Y. 2010-11 and A.Y. 2013-14 respectively, on account of unexplained investment of the assessee in various syndicates. 27.2 Briefly stated facts of the issue have already been discussed while adjudicating the Ground No. 1 of the Revenue for A.Ys. 2010-11 to 2016-17; Ground Nos. 6(a), 6(b), 7(a) & 7(b) of the Assessee for A.Ys. 2010-11, 2013-14, 2014-15 & 2015-16; Ground Nos. 5(a), 5(b), 6(a) & 6(b) of the Assessee for A.Ys. 2011-12, 2012-13; and Ground Nos. 6(a) & 6(b) of the Assessee for A.Y. 2016-17 and therefore, the same are not being repeated here. In the specific ground nos. 8(a) & 8(b), the assessee has agitated the very making of the addition on the ground that he had neither formed any syndicate nor made any investment in such syndicates. While adjudicating the above grounds, it has IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 87 already been held by us that the assessee, in fact, had formed syndicates with others for carrying out the business of liquor and in such syndicates, he had also made some investments, towards his capital contribution, the sources whereof remained unexplained. However, the quantum of such unexplained investment was not determined for the reason that the assessee has taken the aforesaid specific grounds agitating the quantum of the additions. The AO has dealt with the issue of unaccounted capital investment at para (15.11) at page no. 106 of the order. After reproducing the written submission made by the assessee before him, the AO, on the basis of the working of the Special Auditors, furnished the break-up of undisclosed capital investment for various assessment years in respect of which the assessee was issued a show cause notice. As per the break-up, the assessee was required to explain the sources of unexplained investment in capital of syndicates, for all the assessment years involved, at Rs.116,67,12,549/-. In the same para, the AO has also discussed, at length, the written submission made by the assessee before him. The AO has also made a reference of various charts and finally, on the basis of such charts and considering the submissions of the assessee, the AO at page no. 110 of the Order, by way of giving a table, reached to the conclusion that the assessee had made unexplained investments towards capital of the syndicates, in various assessment years, for an aggregate sum of Rs.17,97,09,906/-. Finally, based upon such table, the AO determined the amount of undisclosed capital investment at Rs.3,83,03,319/-, Rs.8,67,07,506/-, Rs.1,36,47,007/- and Rs.4,10,52,074/- respectively for A.Y. 2010-11, A.Y. 2013-14, A.Y. 2015-16 and A.Y. 2016-17. 27.3 Aggrieved with the Order of Assessment, the assessee preferred appeals for the subject assessment years before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences. Before the ld. CIT(A), the assessee contended that in his case, only peak investment ought to have been added and credit for additions already made in earlier years ought to have been granted by the AO. The assessee contended that only the addition of peak investment of Rs.8,67,07,506/- for all the assessment years was required to be added with the break-up of Rs.3,83,03,319/- in A.Y. 2010-11 and of Rs.4,84,04,187/- in A.Y. 2013-14. The ld. CIT(A), after considering the submissions of the assessee, confirmed the additions of Rs.3,83,03,319/- and Rs.4,84,04,187/- respectively for A.Y. 2010-11 and A.Y. 2013-14. The ld. CIT(A) has given the relevant findings at paras (4.10.3) to (4.10.5) of his order which are reproduced as under: IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 88 “4.10.3 During the course of the appellate proceedings, the counsel of the appellant, also made a request that the supplementary submission made by him before the AO, which has been reproduced by the AO himself at para (15.11) on page no. 106 of the Order, be also taken into consideration while adjudicating the issue in hand. The appellant contended that in the instant case, only peak investment ought to have been added and credit for the additions already made in earlier years ought to have been granted by the AO. The counsel of the appellant got agreed that based upon the seized material, fresh investment in capital of syndicates for A.Y. 2010-11 at Rs.3,83,03,319/- can be said to be correct but, according to the counsel, from the seized material, it was evident that the investment so made got withdrawn in the subsequent years and the same was available to the appellant for making fresh investment of Rs.8,67,07,506/- during the financial year 2012-13 relevant to A.Y. 2013-14. The counsel of the appellant invited my attention to the Annexure MS-1.00, which was furnished by the appellant before the AO and which has also been reproduced by the AO at page no. 110 of the body of the assessment order. The counsel contended that the AO has made the addition by relying upon the details and amounts furnished in such table. It was argued before me that at column no. (7) of the said chart, figures of capital investment are getting reflected with both positive and negative signs. It has been argued that the AO has made the addition in respect of those years in which the capital investment is resulting with positive signs and no cognizance has been given for the capital investment showing the negative signs. It was submitted that the capital investment with negative signs for A.Y. 2010-11, A.Y. 2011-12 and A.Y. 2014-15 respectively at Rs.30,56,976/-, Rs.3,74,89,969/- and Rs.10,56,14,509/- in fact represents the over withdrawing of capital from syndicates by the appellant in such years. Thereafter, the appellant submitted that the unexplained capital invested for A.Y. 2010-11 was subsequently withdrawn by him in A.Y. 2011-12 and A.Y. 2012-13 and due to such withdrawal of capital, the level of fresh capital introduction for A.Y. 2010-11 and A.Y. 2012-13 are getting reflected at Rs.(-)30,56,976/- and Rs.(-)3,74,89,969/- aggregating to a sum of Rs.(-)4,05,46,945/-, as is evident from the above said chart. On such basis, the appellant argued that the capital invested by him in the various syndicates during A.Y. 2010-11 at Rs.3,83,03,319/- was completely and rather over withdrawn in subsequent years and therefore, the same was available to him for making fresh investment during A.Y. 2012-13. It was submitted before me that the same plea was also raised before the AO as is evident from the first para of page no. 109 of the assessment order. It was accordingly claimed that since a separate addition for A.Y. 2010-11 at Rs.3,83,03,319/- was already made on account of undisclosed investment and further since, as per the chart relied upon by the AO himself, such capital was subsequently withdrawn fully, for A.Y. 2012-13, instead of making addition for the entire fresh capital found invested in such year at Rs.8,67,07,506/-, the addition ought to have been restricted to Rs.4,84,04,187/- only. It was submitted that it is a settled law that undisclosed investment in any asset has to be made on the peak investment theory only by taking into consideration disinvestment of earlier investments. On the same analogy, the appellant demonstrated that during the financial year 2013-14 relevant to A.Y. 2014-15, the appellant had made over-withdrawn of capital at Rs.10,56,14,509/- which was available to him IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 89 for explaining the sources of investment of Rs.1,36,47,007/- and of Rs.4,10,52,074/- respectively in A.Y. 2015-16 and A.Y. 2016-17. Thus, according to the appellant, for the last two assessment years, viz. A.Y. 2015-16 and A.Y. 2016-17, no further addition on the count of unexplained investment in capital was warranted. Thus, in nutshell, according to the appellant, in his case, only the addition of peak investment of Rs.8,67,07,506/- for all the assessment years was required to be added with the break-up of Rs.3,83,03,319/- in A.Y. 2010-11 and of Rs.4,84,04,187/- in A.Y. 2013-14. 4.10.4. After going through the chart MS-1.00, which has been relied upon and reproduced by the AO, working made by the Special Auditors as well as the Assessing Officer, findings of the AO and written as well as oral submissions of the appellant made before me. The appellant has made fresh investment during the financial year 2009-10 relevant to A.Y. 2010-11 at Rs.3,83,03,319/- and no satisfactory explanation was offered and therefore, the same was liable for making addition under section 69 of the Act. Accordingly, the addition of Rs.3,83,03,319/- made by the AO in A.Y. 2010-11 is Confirmed and the aforesaid ground nos. 8(c) & 8(d) of the appellant for A.Y. 2010-11 are Dismissed. 4.10.5 However, from the chart, it was further observed that against making of fresh investment in syndicates in A.Y. 2013-14 at Rs.8,67,07,506/-, funds invested by the appellant in A.Y. 2010-11 at Rs.3,83,03,319/- and subsequently withdrawn in A.Y. 2011-12 and A.Y. 2012-13 were available with the appellant. Such fact is discerning from the chart reproduced by the AO himself. In such circumstances, it has to be held that out of the total investments of Rs.8,67,07,506/- for A.Y. 2013-14, the appellant was having funds of Rs.3,83,03,319/- which are getting taxed separately and therefore, credit for such available funds was required to be granted to the appellant. Accordingly, the addition made by the AO amounting to Rs. 4,84,04,187/- is Confirmed and appellant gets relief of Rs. 3,83,03,319/- in AY 2013-14. Therefore, appeal on this ground is Partly Allowed.” 27.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 27.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 27.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A), which have been reproduced by the ld. CIT(A) in his body of the Order itself. Before us, in addition to relying upon the written submission made before the ld. CIT(A), the counsel of the assessee further argued that for A.Y. 2013-14, he was required to give a further credit of a sum of Rs. 1,83,62,600/- in respect of the funds which were undisputedly available in his hands out of the sales proceeds of the agriculture land situated at Shitla Road. It has been contended by the counsel of the assessee that while IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 90 making the assessment for A.Y. 2012-13, the AO vide para (21.3) of her Order has made an addition of the aforesaid amount in the hands of the assessee under the head undisclosed income. It has been further argued that although, the ld. CIT(A) has deleted the addition so made by the AO by virtue of the fact that the land from the sales whereof, the aforesaid proceeds were realized, was not a capital asset but, a rural agricultural land, but, in any case, such proceeds having been received by the assessee just in the immediately preceding year, has to be considered as available in the hands of the assessee for the purpose of explaining his sources of investments in various syndicates during the year relevant to A.Y. 2013-14. 28.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. 28.2 We find sufficient merit in the contention of the assessee that while making the assessments in the search cases for determining any quantum of undisclosed investment, peak investment theory is required to be applied and accordingly, only peak investment is required to be added and credit for the additions already made in earlier years ought to have been granted by the AO. We find that in the instant case, the counsel of the assessee fairly agreed that based upon the seized material, fresh investment in capital of syndicates for A.Y. 2010-11 at Rs.3,83,03,319/- can be said to be correct but, according to the counsel, from the seized material, it was evident that the investment so made got withdrawn in the subsequent years and the same was available to the assessee for making fresh investment of Rs.8,67,07,506/- during the financial year 2012-13 relevant to A.Y. 2013-14. The counsel of the assessee invited our attention to the Annexure MS-1.00, which was furnished by the assessee before the AO and which has also been reproduced by the AO at page no. 110 of the body of the assessment order. The counsel contended that the AO has made the addition by relying upon the details and amounts furnished in such table. It was further submitted that as per the last sub-para at page no. 110, the AO has also found the working given by the assessee, as scanned by her at page no. 110 itself in the form of Annexure MS-1.00, was found correct and justified. From such table, we find that in the last column of the table, peak capital investments of the assessee in various syndicates in various years, have been determined and according to such determination, for A.Y. 2010-11, A.Y. 2011-12, A.Y. 2013-14 and A.Y. 2015-16, positive investments at Rs. IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 91 3,83,03,319/-, Rs. 3,52,46,344/-, Rs. 8,44,63,880/- and Rs. 3,35,38,452/- have been shown respectively. In our considered view for A.Y. 2010-11, the assessee was found to have made investment in capital of various syndicates to the extent of Rs. 3,83,03,319/- and for the sources of such investment, the assessee could not tender any explanation either before the lower authorities or before us. In such circumstances, we find that the AO has rightly made addition to the extent of Rs. 3,83,03,319/- in the assessee’s income for A.Y. 2010-11 on account of undisclosed investments in syndicates. Consequently, we find no infirmity in the action of the ld. CIT(A) in confirming such addition. Accordingly, the Ground Nos. 8(a) to 8(d) of the Assessee for A.Y. 2010-11 are hereby Dismissed. 28.3 We find that as per the above referred table MS-1.00, the investment of the assessee in various syndicates at the end of the financial year relevant to A.Y. 2013-14 was to the extent of Rs. 8,44,63,880/-. However, during the financial year relevant to A.Y. 2013-14, the fresh investment made by the assessee was to the extent of Rs. 8,67,07,506/-. We also find that before making the fresh investment of Rs. 8,67,07,506/- during the financial year relevant to A.Y. 2013-14, the assessee had not only withdrawn the fresh investment amounting to Rs. 3,83,03,319/- made by him during A.Y. 2010-11 but had also overdrawn from his capital in syndicate to the extent of Rs. 22,43,626/-. Thus, in our considered view, for making the fresh investment of Rs. 8,67,07,506/- during A.Y. 2013-14, the assessee was having explained/already taxed funds to the extent of Rs. 4,05,46,945/- and therefore, for A.Y. 2013-14, addition on this count could have been made only to the extent of Rs. 4,61,60,561/- and not to the extent of Rs. 4,84,04,187/- as determined by the ld. CIT(A). 28.4 We further find sufficient merit in the contention of the assessee that as per the findings given by the AO herself at para (21.2.i) at page no. 137 of her Order, the assessee had received a sum of Rs. 1,83,62,600/- from sale of some land at Shitla Road, during the financial year relevant to A.Y. 2012-13. We find that in respect of such receipt, the AO had found that such receipts were not shown by the assessee in his return of income for A.Y. 2012-13 and accordingly, along with some other addition of Rs. 40,32,000/-, total addition of Rs. 2,23,94,600/- was made by the AO in assessee’s income for A.Y. 2012- 13. We find that against such addition, the assessee had preferred an appeal before the ld. CIT(A) and the ld. CIT(A) had deleted the subject addition holding that the land against which the sale proceeds were received by the assessee IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 92 was not a capital asset but, a rural agricultural land and accordingly, deleted the addition. Against the action of the ld. CIT(A) in deleting the addition, the Revenue has taken Ground No. 3 for A.Y. 2012-13 before us and while adjudicating such ground supra, we have upheld that the assessee had made the receipts of 1,83,62,600/- from the sale of the subject land but, since the land so sold was not a capital asset u/s. 2(14) of the Act, we have confirmed the action of the ld. CIT(A) in deleting the addition. But, in any case, in our considered view, unless it is established that the proceeds so received from the sale of land were utilized by the assessee for some other purposes, the claim of the assessee to the effect that such receipts were available with him for making investment in various syndicates during A.Y. 2013-14 is worth consideration. Accordingly, in our considered view, out of the total addition of Rs. 8,44,63,880/- made by the AO in the assessee’s income for A.Y. 2013-14 on account of investment in syndicates, besides giving the benefit of addition already confirmed on this count for A.Y. 2010-11 at Rs. 3,83,03,319/- and over withdrawn of capital from various syndicates amounting to Rs. 22,43,626/- during A.Y. 2012-13 as per chart MS-1.00, the assessee is further squarely eligible for grant of credit of Rs. 1,83,62,600/- on account of funds available in his hands from the sale of land during the A.Y. 2012-13. Thus, in our considered view, out of the total addition of Rs. 8,67,07,506/- made by the AO, addition to the extent of only Rs. 2,77,97,961/- [Rs. 8,67,07,506/- (-) Rs. 3,83,03,319/- (-) 22,43,626/- (-) 1,83,62,600/-] is sustainable in the assessee’s income for A.Y. 2013-14 on account of unexplained investment in syndicate. Thus, the assessee gets further relief of Rs. 2,06,06,226/-. Accordingly, the Ground No. 8(a) to 8(d) of the Assessee for A.Y. 2013-14 are Partly Allowed. 29. Ground No. 8 of the Assessee for A.Y. 2014-15 & A.Y. 2015-16 and Ground No. 7 of the Assessee for A.Y. 2016-17 29.1 Through these ground of appeal, the assessee has challenged the finding of the ld. CIT(A) to the effect that the assessee had formed some Syndicate named as ‘Damoh Syndicate’. 29.2 Before us, the counsel of the assessee has not pressed these grounds of appeal and therefore, the Ground No. 8 of the Assessee for A.Y. 2014-15 & A.Y. 2015-16 and Ground No. 7 of the Assessee for A.Y. 2016-17 are hereby Dismissed. 30. Ground Nos. 9(a) & 9(b) of the Assessee for A.Y. 2014-15 IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 93 30.1 Through these Grounds of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.15,07,300/- made by the AO in A.Y. 2014-15 on account of unexplained expenditure on the occasion of daughter’s marriage. 30.2 Briefly stated facts of the issue, as emerging out from the assessment order, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the office premises of the assessee, some loose papers inventorized as LPS-2, Page No. 1-28 (GWS-09) were found and seized. The AO, from the subject loose papers, noted that the assessee had received an amount of Rs.32,66,045/- on the occasion of marriage of his daughter as gifts and had also incurred an amount of Rs.15,07,300/- as expenditure as per the seized loose papers. Accordingly, the AO made an addition of Rs.15,07,300/- in the assessee’s income on account of unexplained expenditure on daughter’s marriage. 30.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences, which has been reproduced by the ld. CIT(A) at page no. 110 to 112 of his Order. The ld. CIT(A) discarded the contention of the assessee to the effect that his daughter was having independent sources of income and therefore, expenses on ceremonizing marriage of the daughter was not incurred by him but by the daughter only. However, the ld. CIT(A) noted that the AO was having evidences of incurrence of expenditure on marriage in respect of a sum of Rs.15,07,300/- only and further, against such incurrence of expenditure, the receipts of marriage gifts at Rs.32,66,045/- have been found by the AO himself. The ld. CIT(A) further noted that since the amount of receipts of gifts is more than the amount of expenditure, on simple arithmetic, no addition was required, but, according to the ld. CIT(A), it is highly improbable that the assessee incurred the entire expenditure only after receipt of amount of gifts on marriage and did not incur any expenditure prior to such occasion of marriage. Accordingly, the ld. CIT(A) confirmed the entire addition of Rs.15,07,300/- for A.Y. 2014-15. The ld. CIT(A) has given the relevant findings at paras (4.15.1) of his order which are reproduced as under: “4.15.1 I have duly considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. I have examined the xerox copies of loose papers inventorized as LPS-2 Page No. 1-28 (GWS-09) as IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 94 were produced before me during the course of the appellate proceedings. On a perusal of such loose papers, it was observed that the loose paper inventorized as Page no. 1 to 26 are in the nature of a list without containing any dates in which the names of as many as 552 persons have been mentioned and against their names, amounts like 501, 5100, 1100, 1100, 100, 21001, etc. have been mentioned. On a bare perusal of the list, it appears that it is a list of the gifts received on some occasion from various persons. The AO has given a specific finding that as per the loose papers, an amount of Rs.32,66,045/- has been found received by the appellant on the occasion of marriage of his daughter as gifts. Further, on a perusal of the loose paper inventorized as page no. 27, it appears that some expenditure on ceremonizing some marriage has been incurred at Rs.15,07,300/-. The AO has given a finding that from such loose paper, incurrence of marriage expenses, at Rs.15,07,300/-, by the appellant on the marriage of his daughter, were noted by him. During the course of the assessment proceedings, the appellant has contended that his daughter was having independent sources of income and therefore, expenses on ceremonizing marriage of the daughter was not incurred by him but by the daughter only. Such claim was negated by the AO. I also find no substance in this claim of the appellant as looking to his status in the society, it cannot be said that the entire expenses on solemnizing daughter’s marriage were incurred by such daughter only. However, the AO was having evidences of incurrence of expenditure on marriage in respect of a sum of Rs.15,07,300/- only and further, against such incurrence of expenditure, the receipts of marriage gifts at Rs.32,66,045/- have been found by the AO himself. In such circumstances, since the amount of receipts of gifts is more than the amount of expenditure, on simple arithmetic, no addition was required. But, it is highly improbable that the appellant incurred the entire expenditure only after receipt of amount of gifts on marriage and did not incur any expenditure prior to such occasion of marriage. In such circumstances, considering all the facts, I hold that the appellant had incurred expenses out of his unaccounted income. Thus, addition made by the AO amounting to Rs. 15,07,300/- is Confirmed. Therefore, appeal on these grounds is Dismissed.” 30.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 30.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 30.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 31.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. We find that in the instant case, the AO as well as the ld. CIT(A) both have given a categorical finding that on the seized IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 95 document, the very basis for making the subject addition, besides the details of incurrence of expenditure to the extent of Rs. 15,07,300/- incurred by the assessee for solemnizing marriage of his daughter, the details of receipts of marriage gifts by the assessee from various persons to the extent of Rs. 32,66,045/- has also been found mentioned. In our considered view, any seized document has to be read in its entirety and partial interpretation of such seized document, which is beneficial to the revenue only, is not permissible. In our considered view, although the AO has not invoked the specific provisions of section 69C of the Act, but, in the present circumstances, this is the only section which could have been invoked by the AO for making the addition. But, again, for invoking such provision, only those expenditure can be said to be unexplained the sources whereof could not be explained or satisfactorily explained by the assessee. In the instant case, evidently, the sources of incurrence of expenditure have been found noted on the very same seized document and such fact has was also admitted by both the lower authorities and therefore, only on guess work, conjecture, surmises and probabilities, the explanation of the assessee as regard to the sources of incurrence of expenditure ought not to have been discarded by the authorities below. Accordingly, we find no substance in the action of the AO in making the addition of Rs. 15,07,300/- on account of unexplained marriage expenses for A.Y. 2014-15 and the same is hereby Deleted. Consequently, the Ground No. 9(a) & 9(b) of the Assessee for A.Y. 2014-15 are hereby Allowed. 32. Ground Nos. 9(a) to 9(c) of the Assessee for A.Y. 2015-16 32.1 Through these Grounds of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.19,12,895/- made by the AO in A.Y. 2015-16 on account of undisclosed investment in purchase of agricultural land situated at village Purani Chhawni, Ghatigaon. 32.2 Briefly stated facts of the issue, as emerging out from the assessment order, are that during the relevant previous year, the assessee had purchased two agricultural lands admeasuring 0.466 hectares situated at village Purani Chhawni, Halka No. 46, Vikas Khand, Ghatigaon for a total consideration of Rs.17,00,000/- in cash. Further, the assessee also incurred a sum of Rs.2,12,895/- towards stamp duty and registration of the aforesaid lands. The AO, during the course of the assessment proceedings, required the assessee to furnish the sources of making investment in such agricultural lands. The assessee furnished his explanation before the AO which has been reproduced IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 96 by the AO at page no. 137 & 138 of the Order. The assessee claimed the sources of investment to be mainly from sale of some agricultural lands at Rs.15,00,000/- during F.Y. 2008-09 which was available with him for making investment in the subject land. The AO disregarded the explanation of the assessee and made an addition of Rs.19,12,895/- in the assessee’s income on account of undisclosed investment in agricultural lands. 32.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences, which have been reproduced by the ld. CIT(A) at page no. 115 to 117 of his Order. The ld. CIT(A) noted that the assessee could not produce any evidence in support of his claim that the investment was made out of receipt of sale proceeds of some properties in earlier years. According to the ld. CIT(A), the assessee could also not explain that how the proceeds of some properties sold in the financial year 2008-09 was available to him for making investment in the subject property during the F.Y. 2014-15. Accordingly, the ld. CIT(A) confirmed the entire addition of Rs.19,12,895/- for A.Y. 2015-16. The ld. CIT(A) has given the relevant findings at paras (4.16.1) of his order which are reproduced as under: “4.16.1 I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. The appellant could not produce any evidence in support of his claim that the investment was made out of receipt of sale proceeds of some properties in earlier years. The appellant could also not explain that how the proceeds of some properties sold in the financial year 2008-09 was available to him for making investment in the subject property during the F.Y. 2014-15. In such circumstances, the claim of the appellant is liable to be rejected. Thus, addition made by the AO amounting to Rs.19,12,895/- is Confirmed. Therefore, appeal on these grounds is Dismissed." 32.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 32.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 32.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 33.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 97 of the authorities below, Special Auditors Report, written and oral submissions made from both the sides. Before us, the counsel of the assessee has taken an alternate plea that the subject land was purchased by the assessee during the financial year relevant to A.Y. 2015-16 out of his accumulated funds, in the form of share of profit from various syndicates which were withdrawn by him from various syndicates, during the financial year 2013-14 relevant to A.Y. 2014-15, to the extent of Rs. 10,56,14,509/- as per the findings given by the AO herself by way of reproducing one table titled as ‘MS-1.00’ at page no. 110 of her Order. On a verification of the table MS-1.00 reproduced by the AO at page no. 110 of her Order, we find that as per the said table, the assessee had made peak investment in various syndicates up till A.Y. 2013-14 to the extent of Rs. 8,44,63,880/- and in respect of such investment, we have already given our necessary findings while adjudicating the various grounds raised by the revenue and the assessee on this issue, supra. However, we find force in the contention of the assessee that as per the said table, during the financial year relevant to A.Y. 2014-15, the assessee had made net withdrawals amounting to Rs. 10,56,14,509/- and out of such withdrawals made during the subsequent two assessment years viz. A.Y. 2015-16 and A.Y. 2016-17, the assessee had made re-deposition of capital in various syndicates respectively to the extent of Rs. 1,36,47,007/- and Rs. 4,10,52,074/-, thereby aggregating to a sum of Rs. 5,46,99,081/- and therefore, even if such re-deposition of capital in the subsequent years is reduced from the net capital withdrawn during the A.Y. 2014-15 at Rs. 10,56,14,509/-, still there would remain a substantial balance of funds to the extent of Rs. 5,09,15,428/- in the hands of the assessee out of the accumulated share of profit from various syndicates. While adjudicating the ground no. 1 of the Revenue for all the assessment years under appeal, although, we have deleted the additions made by the AO in the assessee’s income on account of his share of profit in various syndicates due to applicability of provisions of section 86, 67A and 167B of the Act, but, still, in our considered view, such exempted income would still be available in the hands of the assessee for explaining his sources in various other investments. We find that for A.Y. 2014-15, the AO herself, at page no. 111, has given a finding that for such assessment year, the assessee had earned share of profit from various syndicates to the extent of Rs. 13,34,41,231/- and out of such profit earned, the assessee had made net withdrawals to the extent of Rs. 10,56,14,509/-. In view of the above discussion, we find substance in the assessee’s submission that the sources of investment in the land at Purani Chawni, Ghatigaon can be considered to be out of the aforesaid withdrawal of IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 98 the funds. Thus, we find no substance in the addition of Rs. 19,12,895/- made by the AO in the assessee’s income on account of unexplained investment in land at Purani Chawni for A.Y. 2015-16 and accordingly, the same is hereby deleted. Consequently, the Ground Nos. 9(a) to 9(c) of the Assessee for A.Y. 2015-16 are hereby Allowed. 34. Ground No. 10 of the Assessee for A.Y. 2015-16 34.1 Through the Ground No. 10 raised for A.Y. 2015-16, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.26,78,750/- made by the AO in A.Y. 2015-16 on account of undisclosed investment in purchase of three houses situated at Royal Residency, village Bavdiya, Bhopal, by invoking the provisions of s.56(2)(vii) of the Act. 34.2 Briefly stated facts of the issue, as emerging out from the assessment order, are that during the relevant previous year, the assessee had purchased three residential houses situated at Royal Residency, Bhopal for a total purchase consideration of Rs.1,50,00,000/-. The AO noted that the guideline value of the said houses was at Rs.1,76,78,750/-. The AO, during the course of the assessment proceedings, required the assessee to show-cause as to why not the provisions of section 56(2)(vii) be invoked in his case in respect of the difference of fair market value of Rs.1,76,78,750/- and purchase consideration of Rs.1,50,00,000/-. The assessee furnished his explanation before the AO which has been reproduced by the AO at page no. 139 of the Order. The assessee claimed that the subject property was suffering from illegal encroachments and therefore, the actual consideration was much below its fair market value due to which the assessee had actually purchased such property at Rs.1,50,00,000/- only. The assessee also submitted that the entire payment towards purchase consideration was made through banking channels only. The AO disregarded the explanation of the assessee and made an addition of Rs.26,78,750/- in the assessee’s income on account of undisclosed investment in house by invoking the provisions of section 56(2)(vii) of the Act. 34.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences. The ld. CIT(A) noted that the assessee had purchased three plots at Bhopal, as per details given by the AO at page no. 140 of the Order, for an apparent consideration of Rs.1,50,00,000/- whereas the value adopted by the Stamp Valuation Authority IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 99 for stamp duty valuation was of Rs.1,76,78,750/-. Thus, as per ld. CIT(A), the assessee’s case squarely falls under clause (vii) of sub-section (2) to section 56 of the Act. The ld. CIT(A) has given the relevant findings at paras (4.17.1) of his order which are reproduced as under: “4.17.1 I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. On perusal of the copies of sale deed on record, it is evident that the appellant had purchased three plots at Bhopal, as per details given by the AO at page no. 140 of the Order, for an apparent consideration of Rs.1,50,00,000/- whereas the value adopted by the Stamp Valuation Authority for stamp duty valuation was of Rs.1,76,78,750/-. Thus, the appellant’s case squarely falls under clause (vii) of sub-section (2) to section 56 of the Act. Thus, addition made by the AO amounting to Rs.26,78,750/- is Confirmed. Therefore, appeal on this ground is dismissed.” 34.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 34.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 34.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 35.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides. In our considered view, evidently, the assessee had made the purchase of three plots for a total consideration of Rs. 1,50,00,000/- as against the value determined by the Stamp Duty Valuation Authority at Rs. 1,76,78,750/- as per the details given by the AO herself at para (21.2.iii) at page no. 140 of her Order. Before us, the counsel of the assessee argued that in the instant case, the ld. AO has made the addition without first making a reference to the DVO, as contemplated under the proviso to sub-clause (c) of clause (vii) of sub- section (2) of section 56 of the Act. Alternatively, the counsel made a prayer that since, out of three properties in respect of two properties, difference between the stamp duty valuation and actual consideration shown by the assessee was less than 10%, and therefore, in view of the amendments made in the pari materia section 56(2)(x)(B)(ii) of the Act by the Finance Act, 2021 w.e.f. 1-4-2021, which has been held by the various authorities to be clarificatory in the nature, the addition in respect of two properties where the difference is within the permissible limit, the addition can be deleted. We find merit in the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 100 contention of the assessee and therefore, out of the three properties in respect of only property where the difference between the actual consideration paid by the assessee and the Stamp Duty Valuation is more than 10% i.e. in respect of Plot No. 38, the addition to the extent of Rs. 13,39,600/- is confirmed. Accordingly, the assessee would get a relief of Rs. 13,39,150/- out of the total additions of Rs. 26,78,750/- made by the AO for A.Y. 2015-16. Consequently, the Ground No. 10 of the Assessee for A.Y. 2015-16 is Partly Allowed. 36. Ground Nos. 8(a) & 8(b) of the Assessee for A.Y. 2016-17 36.1 Through the Ground No. 8(a), the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.21,09,914/- made by the AO in A.Y. 2016-17 on account of unexplained jewellery found during the course of search. Through the Ground No. 8(b), the assessee has sought the grant of benefit against the unexplained investment out of the accumulated funds available from share of profit from various syndicates. 36.2 Briefly stated facts of the issue, as emanating from the assessment order, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the residential premises of the assessee situated at 47, Durgapuri, Tansen Nagar, Gwalior, gold and silver jewelleries respectively weighing 815.200 gms. and 18554.800 gms. valuing Rs.18,09,356/- and Rs.5,86,217/- thereby aggregating to a sum of Rs.23,95,573/- were found. Further, during the course of search in the bank locker bearing no. 64-A, UCO Bank, Gwalior, gold jewelleries weighing 834.200 gms. valuing Rs.17,83,034/- were found. During the course of the assessment proceedings, the AO required the assessee to furnish explanation on the sources of the jewelleries so found. The assessee furnished his explanation on the subject issue which has also been reproduced by the AO at para (14.1) on page no. 26 to 29 of the impugned Order. The assessee claimed that out of the total gold jewelleries weighing 815.200 gms found from the residential premises, gold jewelleries weighing 300.000 gms. were held by the assessee and his family members as ‘Stridhan’ and the remaining jewelleries weighing 515.200 gms. were out of purchases made by the assessee and his family members and were getting reflected in their respective statement of affairs/ balance sheets. The AO accepted the claim of the assessee to the extent of the jewelleries held as stridhan and accordingly granted a credit in respect of the gold jewelleries weighing 300.00 gms. However, in respect of the remaining jewelleries weighing 515.200 gms., the AO has given credit only in respect of jewelleries weighing 180.000 gms. out IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 101 of the total purchases of 280.800 gms. made by one of the family members of the assessee namely Shri Akash Shivhare. Resultantly, the AO disbelieved the purchases of gold jewelleries weighing 335.200 gms. as claimed by the assessee and made an addition of Rs.7,43,540/- on account of unexplained gold jewelleries found during the course of search in the residential premises of the assessee. The AO also disbelieved the entire silver jewelleries & Utensils weighing 18554.800 gms. claimed by the assessee as Stridhan and made an addition of Rs.5,86,217/- in the assessee’s income on this count. Further, in respect of the gold jewelleries weighing 834.200 gms. found from the bank locker, the assessee claimed 496.400 gms. as a stridhan and the remaining jewelleries weighing 337.800 gms. were purchased by one of the family members of the assessee namely Smt. Kalpana Shivhare. The claim of the assessee as regard to stridhan was duly accepted by the AO and a credit of 500 gms. was granted to the assessee and the gold jewelleries weighing 365.000 gms. valuing a sum of Rs.7,80,157/- were regarded as unexplained and an addition for a sum of Rs.7,80,157/- was made in the assessee’s income. In nutshell, the AO made an aggregate addition of Rs.21,09,914/- on account of unexplained jewelleries in the hands of the assessee. 36.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences, which has been reproduced by the ld. CIT(A) at page no. 132 to 140 of his Order. The ld. CIT(A) held that the AO during the course of assessment proceedings has already allowed relief of the explained jewelleries which were either held as stridhan or in respect of which the assessee could produce credible evidences. However, according to the ld. CIT(A), for the balance jewellery, the assessee neither before the AO nor before him could furnish any documentary evidences to establish the sources of investment in the remaining jewelleries in respect of which additions have been made by the AO. Accordingly, the ld. CIT(A) confirmed the addition of Rs.21,09,914/- made by the AO for A.Y. 2016-17. The ld. CIT(A) has given the relevant findings at para (4.19.1) of his order which are reproduced as under: “4.19.1. I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. The AO during the course of assessment proceedings has already allowed relief of the explained jewelleries which were either held as stridhan or in respect of which the appellant could produce credible evidences. However, for the balance jewellery, the appellant IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 102 neither before the AO nor before me has furnished any documentary evidences to establish the sources of investment in the remaining jewelleries in respect of which additions have been made by the AO. Thus, I do not find any infirmity in the Order of the AO. Hence, addition made by the AO amounting to Rs.21,09,914/- is Confirmed. Therefore, appeal on this ground is Dismissed.” 36.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 36.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 36.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 37.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides. 37.2 We find that both the authorities below have rightly determined the unrecorded investment of the assessee in gold ornaments and silver utensils and articles aggregating to a sum of Rs. 21,09,914/-.Thus, the Ground No. 8(a) of the Assessee agitating that he had not made any undisclosed investment in purchase of jewellery is hereby Dismissed. 37.3 However, in terms of our findings given while adjudicating the Ground Nos. 9(a) to 9(c) of the Assessee for A.Y. 2015-16, we are inclined to hold that the assessee was having sufficient funds by way of accumulated share of profit from various syndicates out of the net fresh capital withdrawn by the assessee during the financial year relevant to A.Y. 2014-15 at Rs. 10,56,14,509/- as worked by the AO herself at page no. 110 of her Order in the form of a table marked as MS-1.00. Accordingly, in our considered view, no addition was warranted in the hands of the assessee for A.Y. 2016-17 on account of unexplained jewellery amounting to Rs. 21,09,914/-. Thus, the addition so made by the AO is hereby directed to be deleted. Consequently, the Ground No. 8(b) of the Assessee for A.Y. 2016-17 is hereby Allowed. 38. Ground Nos. 10(a) to 10(c) of the Assessee for A.Y. 2016-17 38.1 Through this Ground of appeal, the assessee has challenged the action of the ld. CIT(A) in upholding the addition of Rs.88,25,746/- made by the AO in IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 103 A.Y. 2016-17 on account of undisclosed investment of capital in some Ujjain Syndicate. 38.2 Briefly stated facts of the issue, as emanating from the assessment order, are that during the course of the search and seizure action u/s. 132 of the Act carried out in the premises of M/s. Bharti Devbuild Pvt. Ltd. and M/s. Bharti Devcon Pvt. Ltd. at FH-322, Scheme No. 54, Vijay Nagar, Indore, some loose papers were found and seized. The seized paper has been scanned by the AO herself at page no. 132 in which capital amounting to Rs. 88,25,746/- in the nick name of the assessee i.e. Shri Lalla Bhaiya was found jotted. Thus, the AO, from the subject loose papers, noted that the assessee had made capital investment in some Ujjain Syndicate to the tune of Rs.88,25,746/-. Accordingly, the AO made an addition of Rs.88,25,746/- in the assessee’s income on account of undisclosed investment in Ujjain Syndicate. 38.3 Aggrieved with the Order of Assessment, the assessee preferred an appeal for the subject assessment year before the ld. CIT(A). During the course of the first appellate proceedings, the assessee made detailed written submissions along with the documentary evidences, which is reproduced by the ld. CIT(A) in his Order at page no. 152 to 154. The ld. CIT(A) noted that during the course of search a loose paper was found and as per such loose paper, the assessee was found to have made an investment of Rs. 88,25,746/- in some Ujjain Syndicate. The ld. CIT(A) further observed that on such loose paper, with the description “Lalla Bhaiya” a capital of Rs. 88,25,746/- was clearly shown. As per the ld. CIT(A), during the course of the search and post search investigations, it was established that the assessee was also known as “Lalla Bhaiya” and the assessee could not controvert the notings made on such loose paper neither before the AO nor before him. The ld. CIT(A) further noted that the assessee had formed various syndicates with various persons in various years for carrying out the business of liquor and in such syndicates, the assessee had made investment towards his capital, the sources whereof have not been explained. According to the ld. CIT(A), the subject seized document also reveals the investment in capital of Ujjain Syndicate by the assessee. Accordingly, the ld. CIT(A) confirmed the addition of Rs.88,25,746/- made by the AO for A.Y. 2016-17. The ld. CIT(A) has given the relevant findings at para (4.21.1) of his order which are reproduced as under: “4.21.1. I have considered the facts of the case, the Assessment Order and the written as well as oral submissions of the appellant. During the course of search a loose paper was found and inventorized and as per such loose paper the IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 104 appellant was found to have made an investment of Rs. 88,25,746/- in some Ujjain Syndicate. On such loose paper, with the description “Lalla Bhaiya” a capital of Rs. 88,25,746/- has been clearly shown. During the course of the search and post search investigations, it has been established that the appellant is also known as “Lalla Bhaiya”. The appellant could not controvert the notings made on such loose paper neither before the AO nor before me. It has been established that the appellant had formed various syndicates with various persons in various years for carrying out the business of liquor and in such syndicates, the appellant had made investment towards his capital, the sources whereof have not been explained. The subject seized document also reveals the investment in capital of Ujjain Syndicate by the appellant. Thus, I find no infirmity in the action of AO in making the addition and therefore, addition made by the AO amounting to Rs. 88,25,746/- is Confirmed. Therefore, appeal on this ground is Dismissed.” 38.4 Aggrieved with the addition confirmed by the ld. CIT(A), the assessee is in appeal before us. 38.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. 38.6 Per Contra, Learned Counsel for the assessee has relied upon the written submission made before the ld. CIT(A). 39.1 We have heard rival contentions, perused the records placed before us, duly considered the facts and circumstances, carefully gone through the orders of the authorities below, written and oral submissions made from both the sides. 39.2 We find that the handwritten document was seized one of the related premises of the assessee and in such document, a sum of Rs. 88,25,746/- with the description ‘Lalla Bhaiya’ the nick name of the assessee has been mentioned as his investment in some Ujjain Syndicate. In such circumstances, we do not find any substance in the contention of the assessee that he had not formed any syndicate or the amount found noted on the seized document was not his capital investment in the said syndicate. Accordingly, the Ground Nos. 10(a) and 10(b) of the Assessee for A.Y. 2016-17 are hereby dismissed. 39.3 However, in terms of our findings given while adjudicating the Ground Nos. 9(a) to 9(c) of the Assessee for A.Y. 2015-16, we are inclined to hold that the assessee was having sufficient funds by way of accumulated share of profit from various syndicates out of the net fresh capital withdrawn by the assessee during the financial year relevant to A.Y. 2014-15 at Rs. 10,56,14,509/- as IT(SS)A No.12 to 18/Ind/2021 IT(SS)A No.125 to 131/Ind/2020 Assessment Year: 2010-11 to 2016-17 Shri Ramswaroop Shivhare. 105 worked by the AO herself at page no. 110 of her Order in the form of a table marked as MS-1.00. Accordingly, in our considered view, no addition was warranted in the hands of the assessee for A.Y. 2016-17 on account of unexplained capital investment amounting to Rs. 88,25,746/- in the Ujjain Syndicate. Thus, the addition so made by the AO is hereby directed to be deleted. Consequently, the Ground No. 10(c) of the Assessee for A.Y. 2016-17 is allowed. 40. In the result, the appeals of the Revenue are dismissed and that of the assessee are partly allowed as per terms indicated hereinabove. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 19.04.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 19.04.2022 Patel/PS Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt. Registrar, I.T.A.T., Indore