Hari Mohan Shivhare, Gwalior V. ACIT,Central-1, Bhopal

ITSSA 151/Ind/2020

AI Insights

The case involves multiple appeals by both the assessee, Hari Mohan Shivhare, and the revenue, ACIT, Central-1, Bhopal, concerning various assessment years. The primary issues revolved around the additions made by the AO on account of undisclosed investments and income from syndicate businesses involved in liquor trading. The Tribunal examined the application of the peak investment theory and the treatment of shares of profit and inadmissible expenses in the hands of the assessee versus the syndicates. The Tribunal's decision leaned heavily on the interpretation of sections 67A and 86 of the Income-tax Act, particularly concerning the taxation of income in the hands of syndicates as AOPs and the non-taxation of shares of profit received by members.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122570 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 01-12-2020
• Other Referred Cases: ITO vs. Ch. Atchaiah (1996) 218 ITR 239 (SC), Pr. CIT vs. Ind Sing Developers (P) Ltd. (2016) 288 CTR 0154 (Kar), Pradeep Agencies \/ Joint Venture vs. ITO (2007) 111 TTJ 0346 (SB), K.S. Sathyanarayana vs. ACIT (2008) TTJ 0716
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Maximum Marginal Rate; Corroborative evidences; Set aside
• Section: 132; 143(3); 153A; 64; 142(2A); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER IT(SS)A Nos.149 to 152/Ind/2020 Assessment Years: 2010-11, 2013-14, 2014-15 & 2016-17 Hari Mohan Shivhare, 31, Ganpati Vihar, Tansen Road, Gwalior – 474006. PAN: AYHPS9453N Vs. ACIT, Central-1, Bhopal. IT(SS)A Nos.23 & 43 to 46/Ind/2021 Assessment Years: 2010-11, 2012-13 to 2014-15 & 2016-17 ACIT, Central-1, Bhopal. Vs. Hari Mohan Shivhare, 31, Ganpati Vihar, Tansen Road, Gwalior – 474006. PAN: AYHPS9453N (Appellant) (Respondent) Assessee by : Shri Anil Kamal Garg, CA; Shri Arpit Gaur & Shri Devendra Bansal. Revenue by : Shri P.K. Mishra, CIT, DR Date of Hearing : 22.02.2023 Date of Pronouncement : 15.05.2023 ORDER PER C.M. GARG, JM: These appeals filed by the assessee are directed against the consolidated order dated 08.09.2020 of the CIT(A)-3, Bhopal, relating to Assessment Years 2010-11, IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 2 2013-14, 2014-15 & 2016-17. The Revenue has also filed appeals against the said order of the ld.CIT(A)-3, Bhopal for AYs 2010-11, 2012-13 to 2014-15 & 2016-17. Assessee’s Appeals 2. The identical grounds raised by the assessee for the AYs 2010-11, 2013-14, 2014-15 read as under:- “1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in confirming addition of Rs.60,42,042/- (Rs.1,66,96,140 for AY 2013-14 and Rs.55,13,917/- for AY 2014-15) on account of investment in syndicate business as unexplained investment is illegal, unjustified and bad in law. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in not considering the fact that no documents was found from the possession of the assessee and confirming addition of Rs.60,42,042/- (Rs.1,66,96,140 for AY 2013-14 and Rs.55,13,917/- for AY 2014-15) on account of investment in syndicate business based on these documents found in possession of third party is illegal, unjustified and bad in law. 3. Crave: The appellant crave for adding, deleting and/or modifying any ground of appeal before its final hearing. Prayer: The appellant pray your honour to kindly grant relief and for your this kindness he shall remain very grateful.” 3. The grounds raised by the assessee for 2016-17 read as under:- “1. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in confirming addition of Rs.7,85,820/- on account of cash found during search as unexplained income is illegal, unjustified and bad in law. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in ignoring the fact that cash was available in books of accounts and confirming the addition of Rs.7,85,820/- on account of cash found during search considering as unexplained income is illegal, unjustified and bad in law. 3. Crave: The appellant crave for adding, deleting and/or modifying any ground of appeal before its final hearing. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 3 Prayer: The appellant pray your honour to kindly grant relief and for your this kindness he shall remain very grateful.” Revenue’s Appeals 4. Grounds of Appeal of the Revenue No.1 for AY 2012-13 and the grounds of appeal for all other assessment years are identical except that there is different in figures. Ground of appeal for AY 2010-11 reads as under:- “On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.1,66,66,205/- made by the AO on account of undisclosed income from liquor trading business.” 5. Grounds of Appeal No.2 of the Revenue for AY 2012-13 reads as under:- “2. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.90,95,873/- made by the AO on account of undisclosed investment.” Assessee’s appeal for AYs 2010-11, 2013-14 & 2014-15 6. At the very outset, we note that the ld. Representatives of both the sides have agreed that the facts and circumstances of all the three appeals on the issue of undisclosed investment by the assessee in the syndicate business are quite similar and identical. Therefore, we are taking up AY 2010-11 as the lead case. 7. The ld. AR submitted that the ld.CIT(A) has erred in confirming the addition of Rs.60,42,042/- on account of undisclosed investment in syndicate business treating the same as unexplained/undisclosed investment is illegal, unjustified and bad in law. The ld. AR further submitted that the ld.CIT(A) has grossly erred in not considering the fact that no document was found and seized from the possession of the assessee and he confirmed the addition on account of investment in syndicate business based on the documents found and seized in possession of third party and, thus, the action IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 4 of the AO as well as the ld.CIT(A) is illegal, unjustified and bad in law. The ld. AR also vehemently pointed out that the AO while making the addition has not given the benefit of telescoping for the opening capital for each year and the ld.CIT(A) has not given the benefit of share in profit of the syndicate which was available to the assessee for making further investment in capital for subsequent assessment years. The ld. AR further pointed out that the AO and the ld.CIT(A) has not given the benefit of capital of the assessee reflected in audited financial statements. 7.1 The ld. AR drawing our attention towards page no. 36 of assessment order and chart framed by the AO therein and submitted that the AO has made addition of Rs. 60,42,042/- for AY 2010-11, addition of Rs. 1,66,96,140/- for AY 2013-14 and addition of Rs. 55,13,917/- for AY 2014-15 on account of investment in syndicate business as a unexplained investment, which is not only unjustified, illegal and bad in law but also not sustainable as the AO himself in the assessment order para 11 page no. 36 and 37 noted that the assessee has earned share of profit from syndicate and after adjustment of closing accumulated cash balance out of withdrawals there was amount of Rs. 1,80,13,819/- and amount of Rs. 2,10,73,683/- for AY 2012-13 and 2013-14 respectively, was available for reinvestment in subsequent AY 2013-14 and 2014-15. The ld. AR submitted that in para 11 at page no. 36 & 37 the AO noted that the share of undisclosed income earned by the assessee from syndicate business for AY 2012-13 & 2013-14 was Rs. 1,53,84,934/- and 2,54,40,169/- which was available for investment in the syndicate business for subsequent assessment years 2013-14 & 2014-15 which is included in the said amount available for reinvestment as closing accumulated cash balance. The ld. AR submitted that in such a situation no addition can be made in the hands of assessee on this count. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 5 8. The ld. AR extraneously contended that the AO wrongly made addition of Rs.18,50,000/- in the calculation para for AY 2012-13 whereas there was no finding regarding such alleged capital investment in the table drawn by the AO in para 11.8 of the assessment order. The ld. AR submitted that the addition made by the AO may kindly be deleted considering the entire facts and circumstances of the case. The ld. AR also pointed out that the audited balance sheet for the capital reflected in financial statements has to be considered while making any addition on account of unexplained capital investment especially when the statement showing accumulated cash balance including share of profit received from syndicate business which was available for investment in the subsequent assessment years, clearly reveals that there was amount available with the assessee out of withdrawals made during earlier assessment years from closing capital balance and share of profit brought forward in the subsequent assessment year as opening capital or readily available capital. The ld. AR, therefore, submitted that the entire additions made by the Assessing Officer may kindly be deleted for all three assessment years. 9. Replying to the above, the ld. CIT-DR drew our attention to para 11.9 and 11.10 of the assessment order and submitted that the AO after considering the authenticity of seized documents, corroborative evidence establishing the veracity of evidence and nature of transactions, rightly concluded that the assessee has made undisclosed capital investment in the syndicate business and, for this purpose, the AO, by rightly considering the facts and figures, prepared tabulated charts wherein the AO categorically noted the sum of amount of undisclosed capital investment by the assessee during the relevant assessment year, therefore, the addition deserves to be confirmed. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 6 10. Further, drawing our attention to para 4.3.6 and 4.3.7 at page 59 of the first appellate order, the ld.CIT-DR submitted that the counsel of the assessee before the AO voluntarily agreed that based upon seized material, fresh investments in capital of syndicates for AYs 2010-11, 2013-14 and 2014-15 can be said to be correct. The ld. CIT-DR further pointed out that, however, according to the ld. Counsel of the assessee, from the seized material it was evident that the investment so made got withdrawn in the subsequent year and the same was again available to the assessee for making fresh investments in AYs 2012-13, 2013-14 and 2016-17. The ld. CIT-DR submitted that the ld.CIT(A) has taken a very justified and sustainable approach in holding that the undisclosed investment in any asset has to be made on peak investments theory only by taking into consideration disinvestment of earlier investments. The ld. CIT-DR vehemently pointed out that the assessee, for AY 2010- 11 made investment of Rs.60,42,042/- which has not been satisfactorily explained with documentary evidences. Therefore, the addition made in AY 2010-11 was rightly confirmed by the ld.CIT(A). The ld.CIT-DR also submitted that for AY 2012-13, it was noted that no fresh investment has been made and if any investment was made by the assessee, then, the investment made for AY 2010-11 was withdrawn and utilized for making fresh nvestments in AY 2012-13. The ld.CIT-DR further pointed out that for AY 2013-14, the assessee made investment of Rs.2,08,87,582/- for which no explanation was advanced and the ld.CIT(A), by applying peak investment theory, rightly held that the resultant amount of capital investment was Rs.1,66,96,140/- which was rightly treated as unexplained and confirmed. The ld.CIT-DR also submitted that for AY 2014-15, the assessee has made fresh investment of Rs.55,13,917/- for which no explanation was offered and advanced. Therefore, the IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 7 ld.CIT(A) rightly confirmed the part addition of Rs.60,42,042/- for AY 2010-11, Rs.1,66,96,140/- for AY 2013-14 and Rs.55,13,917/- for AY 2014-15 and the same may kindly be confirmed by dismissing the grounds of the assessee. 10.1 Placing rejoinder to the above the ld. AR submitted that when the Assessing Officer is proceeding to tax unexplained investments in the syndicate business and the ld CIT(A) by applying peak investment theory reduced the same by confirming part addition of Rs.60,42,042/- for AY 2010-11, Rs.1,66,96,140/- for AY 2013-14 and Rs.55,13,917/- for AY 2014-15 then the ld CIT(A) has ignored a very vital fact which is clearly discernable from the assessment order para 11 at page no. 36 & 37 that there was accumulated cash balance as well as share of profit from syndicate business received by the assessee which was not used anywhere and the same invested in the syndicate business therefore no addition is called for in this regard. 11. On careful consideration of the above rival submissions, first of all, we note that the ld.CIT(A) has adjudicated the issue with the following observations and findings:- “4.3.6 During the course of the appellate proceedings, the counsel of 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 in AYs 2010-11, 2013-14 & 2014-15 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 in AYs 2012-13, 2013-14 & 2016-17. 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, Therefore, the appellant during AY 2010-11 has made investment of Rs. 60,42,042/- which has not been satisfactorily explained with documentary evidences. Thus, addition made in AY 2010-1 1 is IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 8 confirmed. However, in AY 2012-13 prim a facie it is seen that no fresh investment has been made, however, if the investment made by appellant is fresh investment then the Investment made in AY 2010-11 was withdrawn and thereafter fresh investment was made. Thus, appellant has sufficient funds in hand to make investment of Rs.18,50,600/- in AY 2012- 13, Further, in AY 2013-14, the appellant has made investment of Rs, 2,08,87,582/- for which no explanation has been advanced. However, by applying peak theory, the appellant has balance amount of Rs. 41,91,442/- (Rs. 40,42,042/- - Rs. 18,50,600/-) which was utilized by him in making the said investment in Ay 2013-14. Therefore, the resultant amount of Rs. 1,66,96,140/- (Rs. 2,08,87,582/- - Rs. 41,91,442/-) is only to be treated as unexplained and is confirmed. Further, in AY 2014-15, the appellant has made fresh investment of Rs. 55,13,917/- (Rs. 2,64,01,499/- - Rs, 2,08,87,582/-) for which no explanation has been advanced. Further, in AY 2016-17 the total investment was at Rs. 2,36,09,274/- which prima facie seems that no fresh investment has been made by appellant. However, if it is presumed that the appellant has made fresh investment in AY 2016-17 then the previous withdrawal of capital was available with the appellant for fresh investment in AY 2016- 17. It is also important to mention that the AO has brought nothing on record which could prove that such funds were invested by the appellant elsewhere.” 12. From the assessment order, we note that the assessee’s representative contended that in the present case, peak investment theory should be applied and the credit for the additions already made during earlier assessment years should be granted to the assessee. We clearly note that the ld. Assessee’s representative/counsel before the ld.CIT(A) voluntarily agreed that based on the seized material, fresh investment in capital of syndicates for AYs 2010-11, 2013-14 and 2014-15 can be said to be correct. However, the ld. Counsel of the assessee also submitted that the seized material clearly reveals that the investment made by the assessee during the initial assessment year got withdrawn and reinvested in the subsequent assessment years and the same was available to the assessee for making fresh investments in subsequent assessment years, i.e., AY 2012-13, 2013-14 and 2016-17. The ld. CIT(A) has also considered that the undisclosed investment in any IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 9 asset has to be made on the peak investment theory only by taking into consideration disinvestments of earlier investments and, thus, he note that the assessee, during AY 2010-11, has made investment of Rs.60,42,042/- which has not been satisfactorily explained with documentary evidences. Even on being asked by the Bench, the ld. AR could not substantiate any sustainable explanation on source by way of documentary evidence that the investment so made by the assessee during AY 2010-11 as capital in the syndicate business was already available with the assessee and the same was recorded in his books of account. Neither the assessee has established that the assessee has undertaken the sole business activity through syndicates and all available capital was utilized for this purpose. Therefore, the ld.CIT(A) was right in confirming the addition of Rs.60,42,042/- for AY 2010-11 on account of undisclosed capital investments in the syndicate business by the assessee. 13. So far as additions for AYs 2013-14 and 2014-15 is concerned, the ld.CIT(A) granted adjustment of earlier capital withdrawn during earlier year and reinvested during AY 2013-14 and after applying peak investment theory granting adjustment, held that the fresh investment after considering the earlier investments during AY 2013-14 was Rs.1,66,96,140/- and during AY 2014-15 after considering the earlier investments by the assessee made addition of Rs. 55,13,917/- by observing that the said amounts are fresh undisclosed capital investments of assessee. From relevant part of assessment order para 11 at page no. 36 & 37 the Assessing Officer has made a table which reveals that the Assessing Officer has noted various facts and figures including a fact that during AY 2012-13 Rs. 1,53,84,934/- and during AY 2013-14 the assessee received share of profit of Rs. 2,54,40,169/- from syndicate business and ld CIT(DR) has not disputed a fact that at the end of AY 2012-13, there was IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 10 accumulated cash balance of Rs. 1,80,13,819/- and at the end of AY 2013-14 the amount was Rs. 2,10,73,683/- including said share of profit. There is no positive finding either by the Assessing Officer or by the ld. CIT(A) that the said share of profit received from syndicate by the assessee was either utilised elsewhere for another purpose or was kept by the assessee somewhere else. In absence any adverse positive finding against the assessee it has to be safely presume that the accumulated cash balance of Rs. 1,80,13,819/- and Rs. 2,10,73,683/- (including share of profit from syndicate received by the assessee during AY 2012-13 & 2013-14 Rs. 1,53,84,934/- and Rs. 2,54,40,169/- respectively) was available for investment in the syndicate business for subsequent assessments years i.e. 2013-14 & 2014-15. In our considered view the said amount of accumulated cash balance is higher than the amount of Rs. 1,66,96,140/- for AY 2013-14 and Rs. 55,13,917/- for AY 2014-15 respectively therefore no addition should have been made in the hands of assessee on account of undisclosed investment in the syndicate business for AY 2013-14 & 2014- 15. 14. The factual position and discussion made hereinabove clearly reveals that the ld CIT(A) by applying peak investment theory has rightly made addition of Rs. 60,42,042/- for AY 2010-11 accordingly ground of assessee for AY 2010-11 is dismissed. 15. Further, from the above discussion pertaining to addition made by AO and confirmed by the ld. CIT(A) for AY 2013-14 & 2014-15, we are of the view that the addition made by the AO and restricted by the ld CIT(A) by applying peak investment theory is not sustainable in view of availability of accumulated cash balance including IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 11 share of profit from syndicate received by the assessee during immediately preceding AY 2012-13 & 2013-14 which was readily available with the assessee for fresh investment in the subsequent assessment year 2013-14 & 2014-15 and the amount of accumulated cash and share of profit is higher than the amount restricted by the ld CIT(A) after applying peak investment theory. Thus, addition made by the Assessing Officer and restricted by the ld. CIT(A) for AY 2013-14 & 2014-15 are not sustainable and ground no. 1 of assessee for both the years are allowed and AO’s directed to delete the entire addition made on account of undisclosed investment. Assessee’s appeal for AY 2016-17 16. The sole ground of the assessee for AY 2016-17 is pertaining to the challenge to the orders of the authorities below confirming addition of Rs.7,85,820/- on account of cash found and seized during the search and seizure operation treating the same as unexplained income. The ld. AR submitted that the AO made an illegal, unjustified and unsustainable addition based on wrong facts only on the basis of surmises and conjectures. The ld. AR also pointed out that the ld.CIT(A) has also erred in ignoring the fact that the cash was available in books of account and he was not justified in upholding the addition on account of cash found and seized during the search and seizure operation. The ld. AR submitted that the assessee had sufficient cash balance in his regular books of account as on the date of search, i.e., as on 07.01.2016 as per copy of cash book available at page 228 of the assessee’s paper book. Therefore, the addition may kindly be deleted. 17. Replying to the above, the ld.CIT-DR drew our attention to para 10 of page 6 and 7 of the assessment order and submitted that during the search and seizure IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 12 operation cash of Rs.7,85,820/- was found and seized from the residence, locker and BPO-1 pertaining to the assessee and the assessee failed to explain the source of such cash. Therefore, the same was rightly treated as unexplained cash found and seized during the search operation. The ld.CIT-DR submitted that neither during the assessment proceedings nor during the first appellate proceedings the assessee had given any sustainable explanation and evidence pertaining to the source of cash and even could not explain the source of such cash before the special auditor. The ld. CIT-DR submitted that the extract of cash book submitted by the assessee was not available during the search and seizure operation nor it was filed before the special auditor. Hence, this document which was prepared clearly on afterthought subsequently, cannot be taken as sustainable and plausible evidence on this issue. Finally, the ld. CIT-DR, drawing our attention to para 4.5 at page 62 of the first appellate order, submitted that the ld.CIT(A) was right in confirming the addition in the hands of the assessee by holding that no copy of cash book has been filed by the assessee which could prove that there was sufficient cash in hand which was subsequently found during the course of search. The ld. CIT-DR vehemently supporting the orders of the authorities below, submitted that the grounds of the assessee may kindly be dismissed. 18. On careful consideration of the above rival submissions, we are of the view that the assessee has challenged the addition on account of unexplained cash found and seized during the course of search and seizure operation held on 07.01.2016. The ld. AO as well as the ld.CIT(A) allowed due opportunity of hearing to the assessee to explain the source of cash and the assessee also got an opportunity to explain the source of such cash before the special auditor, but, no copy of cash book was filed IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 13 before the authorities below and the special auditor proved that there was sufficient cash in hand with the assessee and recorded in the books of account including the cash book at the time of search and seizure operation. Therefore, the Authorities below have rightly presumed that the assessee has failed to explain the source of cash found and seized during the search and seizure operation and the same was rightly treated as unexplained cash for making addition in the hands of the assessee. Accordingly, the grounds of the assessee for AY 2016-17 being devoid of merits are dismissed. 19. In the result, the appeal filed by the assessee for AY 2016-17 in IT(SS)A No.152/Ind./2020 is dismissed. Revenue’s Appeals (ITA Nos.23 & 43 to 46/Ind/2021 - AYs: 2010-11, 2012-13 to 2014-15 & 2016-17 20. The ld. Representatives of both the sides agreed that the facts and circumstances pertaining to the ground of the Revenue challenging the deletion of addition made by the AO on account of undisclosed income from liquor trading business and disallowance of inadmissible expenses in syndicates are identical and similar, except quantum of addition, in all five appeals. Therefore, for adjudication of this issue we take up appeal of Revenue for AY 2010-11 as lead case wherein sole ground of revenue reads as follows:- “On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.1,66,66,205/- made by the AO on account of undisclosed income from liquor trading business.” IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 14 21. The ld. CIT-DR, supporting the assessment order, submitted that the AO, in para 11.6 and 11.7 rightly recorded a finding that the seized data and accounts clearly prove that the real transactions which were hidden by the assessee and not duly disclosed in his return of income. The ld. CIT-DR further submitted that the syndicates formed by the assessee along with other associates during AY 2010-11 to 2016-17 were not filing mandatory returns of income and they were not existing in the departmental database, thus, it was apparent that the formation of syndicates was resulting into unaccounted investment of assessee as the capital of syndicates resulting into generation of unaccounted income of the assessee. The ld. CIT-DR further submitted that the details of undisclosed capital investments made which resulted in undisclosed income earned and proportionate share of inadmissible expenses is clearly discernible from the seized documents pertaining to syndicate transactions along with corroborative evidences clearly show that the assessee have direct linkage in the liquor business of group/syndicates. Therefore, the AO was right in making addition in the hands of the assessee pertaining to share of profit received by the assessee from liquor trading business. Therefore, the syndicates and the AO was also correct and justified in making disallowance of share pertaining to the assessee with regard to the inadmissible expenses of syndicates. The ld. CIT-DR submitted that the ld.CIT(A) has ignored these facts and granted relief to the assessee without any basis. Hence, the impugned first appellate order may kindly be set aside by restoring that of the AO. 22. Replying to the above, the ld. AR, vehemently supporting the first appellate order, submitted that the issue is covered in favour of the assessee by the order of the ITAT Indore Bench dated 19.04.2022 in the case of associate member of some IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 15 other syndicate Shri Ramswaroop Shivhare in IT(SS)A No.12 to 18/Ind./2021. He also took us through the relevant paras 8.3.7 at pages 63 and 64 of the said Tribunal order. The ld. AR submitted that the Tribunal has concurred with the findings recorded by the ld. First appellate authority that the share of profit received by the assessee from liquor business conducted through syndicates cannot be taxed again when the AO has already taxed the entire income in the hands of the syndicates and issue of inadmissible expenditure has also been considered in the assessment orders of syndicates, then, if any addition or disallowance is made in the hands of the assessee, that would amount to double taxation and would be against the proviso of section 86 r.w. section 67A of the Income-tax Act, therefore, no addition could be made in the hands of the assessee on account of share of profit from liquor business conducted through syndicates and share of inadmissible expenses in syndicates. The ld. AR also drew our attention to para 4.3.2 of the first appellate order and submitted that the ld.CIT(A) has granted relief to the assessee after considering the very glaring fact that the AO while passing the impugned assessment order has elaborately dealt that there exists a syndicate and also dealt with the ingredients of syndicates. The ld. AR further submitted that the AO has accepted the statements of key persons of syndicates wherein they had accepted the existence of syndicates and the AO of the syndicates in the other group concern has made addition of undisclosed income in the hands of the syndicate for the respective assessment years. The ld. AR submitted that the ld.CIT(A) has listed 11 syndicates whose income was assessed by the AO and recovered all due taxes, etc. The ld. AR submitted that in view of the above as per the judgement of the Hon’ble Supreme Court in the case of ITO vs. Ch. Atchaiah (1996) 218 ITR 239 (SC) wherein it was held that the correct income should be taxed IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 16 in the right hand in the right assessment year. The ld. AR submitted that in view of the above when the AO has taxed the income of liquor business earned by the assessee in the hands of the respective syndicate and has also made disallowance pertaining to the inadmissible expenses in the hands of the respective syndicates. The ld. AR further submitted that the assessee has received share of profit from the respective syndicates after adjustment of inadmissible expenses and due income-tax, etc., paid thereon then such share of profit cannot be taxed again in the hands of the assessee as per clause (a) of first proviso to section 86 r.w.s 67A of the Act, and no further disallowance can be made on account of inadmissible expenses in the hands of the assessee otherwise it would amount to double taxation in firstly, in the hands of syndicate and secondly, in the hands of assessee. The ld. AR submitted that therefore, the order of the ld.CIT(A) may kindly be upheld in view of the factual matrix of the issue as well as order of the Tribunal in the case of ITO vs. Ramswaroop Shivhare (supra). 23. On careful consideration of the above rival submissions, we note that the ld.CIT(A) has granted relief to the assessee with the following observations and findings:- IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 17 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 18 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 19 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 20 24. Further, from the order of the Tribunal in the case of ITO vs. Ramswaroop Shivhare (supra), we observe that the Tribunal has upheld the order of the ld.CIT(A) confirming the deletion of addition made by the ld. First appellate authority on IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 21 account of share of profit from liquor business through syndicates and share of inadmissible expenses in the syndicates with the following observations and findings:- “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 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. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 22 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 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 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 23 member is required to 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 subsection (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 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 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 24 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 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, IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 25 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.” 25. First of all, we may point out that the ld.CIT-DR has not controverted or brought on record any distinct or different facts and circumstances of the present case from the case of ITO vs. Ramswaroop Shivhare (supra) on this issue, therefore, we safely presume that the facts and circumstances of both the cases are similar and identical on the issue of share of profit received by the assessee from trading of liquor through syndicates and on the issue of share of inadmissible expenses in syndicates. At the cost of repetition we note that the AO categorically noted that these syndicates were formed by the assessee and his associates during AYs 2010-11 to 2016-17 which were not filing various statutory returns and from income-tax database, no syndicate could be traced and found existing. Therefore, the AO noted that the syndicates do not have PAN and they did not file any return of income. Thus, it was further observed by the AO that the formation of syndicate was resulting into unaccounted investment of the assessee as the capital of syndicates can also result into diversion of unaccounted income of the assessee. The AO also noted that details of undisclosed capital investment resulted in undisclosed income and proportionate share of inadmissible expenses as per seized documents of syndicate transactions along with corroborative evidences clearly show that the assessee have direct linkage with the liquor business of the groups/syndicates. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 26 26. In view of the above, it is clearly discernible that the assessee was a member of association of persons or body of individuals i.e., syndicates and share of members of such association of persons or body of individuals were determined and known and the income of such syndicates was chargeable to tax on their total income at the maximum marginal rate or at any higher rate and the AO after allotting PANs to the syndicates, framed assessment order and the syndicates paid due taxes thereon after consideration of all inadmissible expenses, etc., pertaining to the liquor business of syndicates. We are satisfied about the contention of the ld. AR that after consideration of all disallowances and additions including the disallowance of inadmissible expenses in the syndicates the respective syndicate paid all due taxes etc., thereon and after such adjustment and payment of taxes the assessee received the share of net profit from the syndicates. In such a situation, the case of the assessee would squarely fall under substantive provision of clause (a) of first proviso to section 86 r.w.s. 67A of the Act. 26.1 From the relevant paras of the first appellate order as has been reproduced hereinabove, it is amply clear that the ld.CIT(A) has granted relief to the assessee deleting the addition made by the AO on account of undisclosed income from liquor trading business and share of inadmissible expenses by observing that the assessee was a member of association of persons or body of individuals i.e., syndicates, the share of members of such association of persons or body of individuals were determined and known and such association of persons were chargeable to tax on their total income at the maximum marginal rate, therefore, no further addition or disallowance is required to be made in the hands of the assessee as the same would amount to double addition and taxation. As per the scheme of the Act, the issue is IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 27 covered in favour of the assessee as per clause (a) of the first proviso to section 86 r.w.s.67A of the Act as well as the findings recorded by the Tribunal in the case of ITO vs. Ramswaroop Shivhare (supra), as has been reproduced hereinabove. 27. Besides the above findings, it is also pertinent to mention that it is a well settled legal position that as per clause (a) of proviso to section 86 of the Act r.w.s 67A of the Act, if the assessee is a member in AOP/BOI and income earned from such AOP/BOI have been offered to tax, then, the share received by the assessee from such AOP/BOI after payment of due taxes cannot be taxed again in the hands of the recipient assessee. From the relevant part of the assessment order para 11.6 to 11.10, as has been discussed hereinabove, the AO recorded his observations and findings while making addition in the hands of the assessee on account of undisclosed income. At the same time, from relevant paras 4.2 to 4.2.9 of first appellate order, we further observe that the ld.CIT(A) in earlier paras noted the factual position, stand of the AO and submissions of the assessee. Thereafter, he considered factum of the formation of syndicates by the assessee and his associates and in para 4.2.2 noted the contention of the assessee that if there exists any syndicate, then, the income earned by such syndicate from carrying out the business 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 including the assessee being member of syndicate forming the syndicates. The ld.CIT(A) also noted that during the search and seizure operation, the Investigation Wing found that the assessee is doing liquor business along with their other associates by forming syndicates and the Wing has emphasized the formation of syndicates to carry out the liquor business. The emphasis was on the fact that there exist an entity i.e., syndicate which is carrying out business and, in IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 28 this regard, staements of key persons of syndicates were also recorded wherein they accepted the existence of syndicates. 28. The ld.CIT(A) further noted that the AO, during the course of assessment proceedings, referred the matter to special auditor u/s 142(2A) of the Act for special audit in the case of present assessee. In his reprot the auditor also emphasized the formation of syndicate and given a finding that the syndicate is carrying out the business independently functioning from separate offices and maintaining separate books of account. The ld.CIT(A) at pages 38 to 40 noted a table of 11 syndicates and also took cognizance of the fact that the AOs of the syndicates in all the group concerns has made addition of undisclosed incomes in the hands of the syndicates for respective assessment years. The ld.CIT(A) noted brief details of various assessment orders passed by ACIT-2(1), Indore/DCIT-3(1), Gwalior/ITO, Shivpuri in a tabular form wherein name of syndicate/AOP, section under which orders have been passed, assessment years and income assessed has been mentioned. We also note that the ld.CIT(A), after perusal of the relevant assessment orders noted that these AOPs being the liquor syndicates had carried out the business of liquor in various years and as per special auditor’s report given u/s 142(2A) of the Act in the case of Shivhare group, these syndicates have earned profit and had also incurred some expenses which were liable for disallowance. The ld.CIT(A) further noted another factual matrix that the amount of profit/inadmissible expenses considered by the AO for framing separate assessments of syndicates were the same as were considered while making assessments in the hands of the assessee and other members of Shivhare group. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 29 29. Thereafter, the ld.CIT(A) referred to the legal position rendered by the Hon’ble Supreme Court in the case of ITO vs. Ch. Achataiya (supra) and took the view that the income derived by various syndicates in which the assessee 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 assessee could not have been made in respect of such income derived by the syndicates. The ld.CIT(A) rightly noted that the question of admissibility or inadmissibility of any expenditure could have been raised only while making the assessment in the cases of such syndicates and the assessee at the best could have been assessed in respect of his share out of income of such syndicate, but, as per provision clause (a) of first provision to section 86 r.w.s. 67A of the Act, income-tax will not be payable by an assessee in respect of a share received by the assessee in the income of association of persons or body of individuals/syndicates. 30. In view of the foregoing discussion, we conclude that the present assessee was a member of an association of persons or body individuals, share of members of such association of persons or body individuals were determinate and known. Such association of persons or body individuals were chargeable to tax on their total income at the maximum marginal rate or any higher rate. In such a factual position and circumstances, the share of profit/income received by the assessee from association of persons or body individuals/syndicates fall under the clause (a) of the first proviso to section 86 r.w.s 67A of the Act and, thus, the AO was not justified in making the addition in the hands of the assessee on account of his share in profits of syndicates and on account of his share of inadmissible expenses incurred by the syndicates. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 30 31. On careful perusal of the chart/table as has been noted by the Ld. CIT(A) inp para 4.3.2 of pages 50 & 51 of his order, it is clearly discernible that the income of syndicates/associate of persons or body individuals have been assessed to tax and respective AO have framed assessment orders u/s 153A r.w.s 143(3) of the Act by making certain additions and disallowances pertaining to the income earned by the syndicates and inadmissible expenditures incurred by them. In view of the above, we are in agreement with the conclusion drawn by the ld.CIT(A) that while framing the assessments in the case of such syndicates, the income of syndicates as worked out by the special auditors have duly been incorporated and have been subjected to maximum marginal rate of tax, such facts fortifies the claim of the assessee that incomes of the syndicate were liable to be taxed separately in the hands of the respective syndicate in the status of AOP/BOI at the maximum marginal rate and the assessee’s share in the profit of such syndicates cannot be added as individual income of the assessee in view of specific provision of clause(a)of first proviso to section 86 r.w. section 67A of the Act. The above noted facts and findings have not been controverted by the ld.CIT-DR in any manner and these observations and allegations made by the AO in para 11.6 to 11.10 of the assessment order cannot be held as correct and sustainable. 32. Thus, we are inclined to hold that the AO made additions by taking a hyper technical approach whereas the ld.CIT(A), after considering the entire facts and circumstances of the case and factum of taxation of profit and disallowance of inadmissible expenses in the hands of syndicates/AOP or BOI, rightly held that the share of profit received by the assessee from such syndicates cannot be added to the IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 31 individual income of the assessee in view of the clause (a) of first proviso to section 86 r.w.s. 67A of the Act. We are unable to see any ambiguity, perversity or any other valid reason to interfere with the findings arrived at by the ld.CIT(A). Therefore, we hold that the ld.CIT(A) was right in deleting the addition in the hands of the assessee and, consequently, the sole ground of the Revenue for AY 2010-11 being devoid of merits is dismissed. 33. Since facts and circumstances pertaining to this issue are identical and similar for all the five years, therefore, our conclusion drawn for A.Y. 2010-11, in the earlier part of this order would apply mutatis mutandis to other four appeals of revenue for A.Y. 2012-13 to 2014-15 & 2016-17. Accordingly, sole ground of revenue in other four appeals are also dismissed. 34. Ground of Appeal No.2 of the Revenue for AY 2012-13 reads as under:- “2. On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.90,95,873/- made by the AO on account of undisclosed investment.” 35. The ld. CIT-DR, drawing our attention towards the relevant para 12.1 to 12.5 of the assessment order, submitted that on verification of seized documents, it was noted by the AO that the assessee have entered into various transactions in respect of immovable properties which were not disclosed in the books of account. The ld.CIT- DR submitted that even in response to the show cause notice issued by the AO, the assessee could not substantiate any plausible explanation in this regard. The ld.CIT- DR further submitted that the AO rightly noted that on going through the incriminating documents and considering the fact that numerous opportunities were granted to the assessee to explain the transaction, the assessee failed to do so and IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 32 the documents have found and seized from the premises of the assessee clearly suggested that the assessee has made undisclosed investment in the land along with Shri Lakshmi Narayan Shivhare. The ld.CIT-DR, drawing our attention to capital account of Shri Lakshmi Narayan Shivhare seized during the course of search operation placed at pages 114 to 117 of LPS 27 seized from the premises i.e., 31, Ganpati Vihar, Gwalior, it was clear that the assessee has transferred an amount of Rs.90,95,873/- in the account of Shri Lakshmi Narayan Shivhare in order to purchase land. Therefore, the AO was right in making addition in the hands of the assessee alleging the same as undisclosed investment in the immovable property for AY 2012- 13. The ld.CIT-DR submitted that the ld.CIT(A) has granted relief to the assessee without any justified reason and basis. Therefore, the impugned first appellate order may kindly be set aside by restoring that of the AO. 36. Replying to the above, the ld. AR vehemently supporting the first appellate order, submitted that the AO has made addition in the hands of the assessee without considering the all irrelevant facts and circumstances and by wrong appreciation of documentary evidences available with him in the assessment orders of Shri Lakshminarayan Shivhare. The ld. AR drawing our attention to para 4.4.1 of the first appellate order, submitted that the assessee, before the authorities below, it was consistently stated that the assessee has not made any investment in the said property and, in fact, Shri Lakshmi Narayan Shivhare and other co-owners of the property have transferred the said property to a firm M/s Maa Vaishno Devi Constructions as per clause 6 of the partnership deed. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 33 36.1 It was also submitted, by the Ld. AR on behalf of the assessee, that the entire amount invested in the property has been paid by all co-owners as mentioned in the title deed/purchase deed of the property and corresponding evidence in the partnership deed of the firm also supports this fact. The ld. AR submitted that the loose paper relied by the AO was rough estimate which does not represent any real transactions. Therefore, the Ld. AR contended that the ld.CIT(A) was right in deleting the addition by observing that the copy of the balance sheet of the firm M/s Maa Vaishno Devi Constructions clearly reveals that the said property was part of stock of the firm and duly incorporated in the final accounts of the firm including the balance sheet and, thus, he rightly arrived at a conclusion that the assessee has not made any investment in the said property and the firm has duly incorporated the investment in the said property in its final accounts including the balance sheet. Therefore, the investment in the said property cannot be alleged as unexplained investment by the assessee and no addition was required to be made in the hands of the assessee in this regard. The ld. AR submitted that the AO has ignored the explanation of the assessee supported by the sustainable and self-speaking documentary evidence, which was properly considered by the learned first appellate authority therefore, the ld.CIT(A) was quite correct and justified in allowing the relief to the assessee on this point. 37. On careful consideration of above rival submissions, first of all we note that the ld.CIT(A) has granted relief to the assessee with the following observations and findings:- IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 34 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 35 IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 36 38. On careful consideration of the assessment and first appellate order, we clearly note that from the copy of the registered sale deed executed in favour of Shri Lakshminarayan Shivhare, Shri Narendra Singh Chouhan, M/s Maa Narmada Construction and M/s Dilip Construction Pvt. Ltd., and this fact was also noted by the AO in the assessment order. The ld.CIT(A), on perusal of the sale deed note that the said four entities jointly purchased the property and the assessee was not found to be an owner or joint owner of the property. Therefore, the ld.CIT(A) was right in concluding that the AO has made addition of share of investment merely on the basis of assumptions and presumptions without any substantial, positive and adverse evidence. The ld.CIT(A) also took cognizance of clause 6 of the partnership deed of the firm M/s Maa Vaishno Devi Constructions which revealed that the purchasers transferred their respective shares in the property to the firm and copy of balance sheet of the said firm further revealed that the said property was part of stock of firm which was duly incorporated in the books of account of the firm. In view of the above factual matrix, the ld.CIT(A) was right in holding that the assessee has not made any investment in the said property and the firm M/s Maa Vaishnodevi Constructions has duly incorporated the property in its final books of account and balance sheet. Therefore, the said property or any part thereof cannot be alleged as unexplained investment in the hands of the assessee. Accordingly, ground No.2 of the Revenue for AY 2012-13 being devoid of merits is also dismissed. IT(SS)A Nos.149 to 152/Ind/2020 IT (SS) A Nos.23 & 43 to 46/Ind/2021 37 39. In the result, appeals of the assessee in IT (SS)A Nos. 149 & 152/Ind/2020 are dismissed and assessee appeals in IT (SS)A Nos. 150 & 151/Ind/2020 are allowed. The appeals filed by the revenue in IT (SS)A Nos. 23 & 43 to 46/Ind/2021 are dismissed. Order pronounced u/r 34(4) of the Income-tax (Appellate Tribunal) Rules, 1963 on 15.05.2023. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15 th May, 2023. Dk/NV Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, Indore Date 1. Draft dictated on 10.04.2023 2. Draft placed before the author 10.04.2023 3. Draft placed before the other Member 4. Approved Draft comes to the Sr.PS/PS 5. Order uploaded on 6. File sent to the Bench Clerk 7. Date on which file goes to the Head Clerk. 8. Date on which file goes to the AR 9. Date of dispatch of Order.