Appeal Details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 4623 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 4 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-04-2022
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Assessment Year
2015-2016
Appeal Filed On
13-12-2020
Judgement Text
आयकर अपील य अ 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.166 to 169/Ind/2020 Assessment Years: 2012-13 to 2016-17 M/s. Global Trade Venture Pvt. Ltd. Mumbai बनाम/ Vs. ACIT(Central)-1 Indore (Appellant) (Respondent ) P.A. No.AAECG0048H IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2014-15 to 2017-18 ACIT(Central)-1 Indore बनाम/ Vs. M/s. Global Trade Venture Pvt. Ltd. Mumbai (Appellant) (Respondent ) P.A. No.AAECG0048H Appellant by S/Shri Anil Kamal Garg & Arpit Gaur, CAs Respondent by Shri P.K. Mitra, CIT-DR Date of Hearing: 27.01.2022 Date of Pronouncement: 26.04.2022 आदेश / O R D E R PER BENCH: The above captioned appeals filed at the instance of the Revenue and cross appeals filed by the Assessee are directed against the Common Order of the Ld. Commissioner of Income Tax (Appeals)-3, Bhopal (in short ‘CIT(A)’), dated 23.09.2020, which is arising out of the Common Assessment Order dated 17.08.2019 passed u/s. 153A r.w.s. 143(3) of the Income-Tax Act, IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 2 of 110 1961 (in short, ‘the Act’), for A.Y. 2011-12 to A.Y. 2016-17 and u/s. 143(3) of the Act for A.Y. 2017-18by the ACIT (Central) -I, Indore. 2.1 Grounds of appeal raised by the Revenue for AY 2014-15 in IT(SS)A No.77/Ind/2021: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 20,02,67,817/- made by the Assessing Officer u/s 69C of the Income Tax Act, 1961 on account of bogus purchases holding them as unexplained expenditure. 2. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 43,97,536/- made by the Assessing Officer u/s 68 of the Income Tax Act, 1961 on account of difference between bogus purchases and bogus sales holding them as unexplained case credits. 3. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 29,65,568/- made by the Assessing Officer on account of interest expenses u/s 37(1) of the Income Tax Act, 1961 disallowing interest expenses.” 2.2 Grounds of appeal raised by the Revenue for AY 2015-16 in IT(SS)A No.78/Ind/2021: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,17,14,723/- made by the Assessing Officer on account of unexplained cash credits u/s 68 of the Income Tax Act, 1961 corresponding interest expenses u/s 69C of the Act. 2. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 21,56,98,886 /- made by the Assessing Officer u/s 69C of the Income Tax Act, 1961 on account of bogus purchases holding it as unexplained expenditure. 3. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 49,22,364/- made by the Assessing Officer on account of difference between the bogus purchases and bogus sale holding it as unexplained case credits. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 61,12,977/- made by the Assessing Officer on account of interest expenses u/s 37(1) of the Income Tax Act, 1961 disallowing such expenses.” 2.3 Grounds of appeal raised by the Revenue for AY 2016-17 in IT(SS)A No. 79/Ind/2021: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 6,29,990/- made by the Assessing Officer on account of unexplained interest expenses u/s 69C of the Income Tax Act, 1961. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 3 of 110 2. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 29,15,83,534/- made by the Assessing Officer on account of bogus purchase as unexplained expenditure u/s 69C of the Income Tax Act, 1961. 3. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 95,07,721/- made by the Assessing Officer on account of difference between the bogus purchases and bogus sale as unexplained interest expenses u/s 68 of the Income Tax Act, 1961. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 64,69,257/- made by the Assessing Officer on account of interest expenses u/s 37(1) of the Income Tax Act, 1961 disallowing such expenses.” 2.4 Grounds of appeal raised by the Revenue for AY 2017-18 in IT(SS)A No. 80/Ind/2021: “1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 6,81,020/- made by the Assessing Officer on account of unexplained interest expenses u/s 69C of the Income Tax Act, 1961. 2. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 33,40,81,325/- made by the Assessing Officer on account of bogus purchase as unexplained expenditure u/s 69C of the Income Tax Act, 1961. 3. On the facts and in circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 1,14,63,760/- made by the Assessing Officer on account of difference between the bogus purchases and bogus sale as unexplained interest expenses u/s 68 of the Income Tax Act, 1961. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the addition of Rs. 59,60,777/- made by the Assessing Officer on account of interest expenses u/s 37(1) of the Income Tax Act, 1961 disallowing such expenses.” 2.5 Grounds of appeal raised by the Assessee for AY 2013-14 in IT(SS)A No.166/Ind/2020: “1. That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making various additions in the appellant’s income for the relevant assessment year without considering the material fact that having already furnished original return of income under s.139 of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any count in view of the settled legal position. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 4 of 110 2. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.6 Grounds of appeal raised by the Assessee for AY 2014-15 in IT(SS)A No.167/Ind/2020: “1. That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the AO’s action of making various additions in the appellant’s income for the relevant assessment year without considering the material fact that having already furnished original return of income under s.139 of the Act, on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, no addition could have been made on any count in view of the settled legal position. 2. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.7 Grounds of appeal raised by the Assessee for AY 2015-16 in IT(SS)A No. 168/Ind/2020: “1. That, 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.45,41,918/- made by the AO in the appellant’s income is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.25,41,918/- made by the AO in the appellant’s income on account of alleged unexplained unsecured loan from one company namely M/s. VRR Financial Services Pvt. Ltd., by invoking the provisions of s.68 of the Act, by making a reference of the audited books of account of the appellant, without confronting the appellant with any information as regard to the creditor allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant. 2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.25,41,918/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences. 2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.25,41,918/- without adhering to the appellant’s prayer to issue either summons under s.131 or letter under s.133(6) of the Act to the loan creditor. 3a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition of Rs.20,00,000/- made by the AO in the appellant’s IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 5 of 110 income on account of unsecured loan claimed to have been received by the appellant from one concern namely M/s. Sumeet & Sumeet Sales, by alleging the receipt of such loan as unexplained cash credit under s.68 of the Act. 3b). 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.20,00,000/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditor, the genuineness of the transaction and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences. 4. That, the appellant further craves leave to add, alter and/or amend any of the foregoing grounds of appeal as and when considered necessary.” 2.8 Grounds of appeal raised by the Assessee for AY 2016-17 in IT(SS)A No. 169/Ind/2020: 1. That, 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.10,07,726/- made by the AO in the appellant’s income is quite unjustified, unwarranted, excessive, arbitrary and bad-in-law. 2a). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the addition to the extent of Rs.10,07,726/- made by the AO in the appellant’s income on account of alleged unexplained unsecured loan from one company namely M/s. VRR Financial Services Pvt. Ltd., by invoking the provisions of s.68 of the Act, by making a reference of the audited books of account of the appellant, without confronting the appellant with any information as regard to the creditor allegedly gathered behind the back of the appellant either in the case of the appellant itself or in the cases of some other assessees and as also, without giving any opportunity of cross-examination to the appellant. 2b). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.10,07,726/- without considering the material fact that the appellant had duly discharged its initial onus of proving the identity of the loan creditor, the genuineness of the transactions and creditworthiness of loan creditor beyond all doubts by producing all the necessary documentary evidences. 2c). That, the learned CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition to the extent of Rs.10,07,726/- without adhering to the appellant’s prayer to issue either summons under s.131 or letter under s.133(6) of the Act to the loan creditor. 3. 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 a private limited company claiming to be engaged in the business of trading in food grains and food products and also trading of shares. The assessee furnished its original returns of income for the various IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 6 of 110 years u/s. 139 of the I.T. Act, 1961. Search and seizure operations u/s. 132 were carried out at various premises of Global group and the assessee on 12/07/2016. Consequently, notices u/s. 153A were issued to the assessee for A.Y. 2013-14 to A.Y. 2016-17 on 09/10/2017. In response to the above notices, the assessee filed returns of income for A.Y. 2013-14 to A.Y. 2016- 17 on 19/03/2018. The assessee furnished its regular return of income for A.Y. 2017-18 on 30/03/2018. The details of returns of income for A.Y. 2013-14 to 2017-18 are as under: 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.) 2013-14 31/10/2013 (-)7,26,107 19/03/2018 (-)7,26,107 Nil 2014-15 24/09/2014 Nil 19/03/2018 Nil Nil 2015-16 18/09/2015 23,12,480 19/03/2018 23,12,480 Nil 2016-17 29/03/2017 25,92,840 19/03/2018 25,92,840 Nil 2017-18 30/03/2018 19,90,920 NA NA 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 20.06.2019. 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 has also been furnished by the assessee before this Bench, which after carefull perusal has been kept on record. 3.3 Finally, the AO made additions of Rs.4,99,475/- in A.Y. 2013-14, Rs.1,42,56,641/- in A.Y. 2015-16, Rs.16,37,716/- in A.Y. 2016-17 and Rs.6,81,020/- in A.Y. 2017-18 on accounts of unexplained cash credits u/s. 68 and unexplained expenditure u/s. 69C respectively in context of unsecured loans obtained by the assessee and interest expenses thereon (Para 8); addition of Rs.2,57,454/- in A.Y. 2013-14, Rs.20,02,67,817/- in A.Y. 2014-15, Rs.21,56,98,886/- in A.Y. 2015-16, Rs.29,15,83,534/- in A.Y. 2016-17 and Rs.33,40,81,325/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s. 69C (para 9); addition of Rs.705/- in A.Y. 2013-14, Rs.43,97,536/- in A.Y. 2014-15, Rs.49,22,364/- in A.Y. 2015-16, Rs.95,07,721/- in A.Y. 2016-17 and Rs.1,14,63,760/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 (para 9); addition of Rs.29,65,568/- in A.Y. 2014-15, Rs.61,12,977/- in A.Y. 2015-16, Rs.64,69,257/- in A.Y. 2016-17 and Rs.59,60,777/- in A.Y. 2017-18 on account of disallowance of interest expenses claimed on CC/OD limits treated as capital expenditure u/s. 37(1) of the Act (para 10); addition of Rs.20,00,000/- in A.Y. 2015-16 and Rs.20,50,000/- in A.Y. 2016-17 on account of receipt from bank account of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 7 of 110 M/s. Sumeet & Sumeet Sales treated as unexplained cash credit u/s. 68 (para 11); addition of Rs.5,74,619/- in A.Y. 2015-16 on account of negative cash balance considered as unexplained money u/s. 69A (para 12). 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 23.09.2020 adjudicated the appeals of the assessee thereby giving substantial relief to the assessee and as also, by 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 Assessee for A.Y. 2013-14 & A.Y. 2014-15 7.1 Through the Ground No. 1 taken for A.Y. 2013-14 & A.Y. 2014-15, the assessee has challenged the action of the ld. CIT(A) in upholding the additions made by the AO in completed assessment years without having recourse to any incriminating material found during the course of search. 7.2 Before the ld. CIT(A), the assessee furnished the detailed written submissions on the subject ground, which has been reproduced by the ld. CIT(A) at page no. 25 to 33 of his Order. While adjudicating the ground, the ld. CIT(A) held that for A.Y. 2013-14 and A.Y. 2014-15, the assessee had filed its return of income u/s. 139 of the Act much prior to the date of search and seizure operations in its case which were carried out on 12/07/2016. The ld. CIT(A) further held that as on the date of the search no assessment proceedings were pending for such assessment years and further, the time limit for issuance of any notice u/s. 143(2) had also got expired on 30/09/2015 and no such notice was issued to the assessee prior to the date of the search. Thus, the ld. CIT(A) went on holding that for A.Y. 2013-14 and A.Y. 2014-15, the assessment proceedings had got completed and therefore, they did not get abated in accordance with the second proviso to section 153A(1) of the Act. However, having given these findings, the ld. CIT(A) further held that during the course of the search and seizure operations carried u/s. 132 of the Act, in the various premises of the Dixit/Global Group, various incriminating bills, vouchers, loose papers, documents etc. were found evidencing deriving of substantial amount of undisclosed income by the assessee and other group assessees. Thus, the ld. CIT(A) did not find any substance in the contention of the assessee that for the aforesaid assessment years, no incriminating documents or materials were found or seized. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 8 of 110 7.3 Aggrieved with the Order of the ld. CIT(A), the assessee has preferred appeals before us. 7.4 Before us, the learned CIT(DR) vehemently argued supporting the observations of the AO and the ld. CIT(A) on this issue. However, during the course of the hearing before us, the ld. CIT(DR) failed to bring on record any incriminating material on the basis whereof the subject additions were made in the A.Y. 2013-14 & A.Y. 2014-15. 7.5 Per Contra, Learned Counsel for the assessee has filed written synopsis. The relevant part of the assessee's submission for this contention, treating A.Y. 2013-14 as Lead Year, is being reproduced as under: “D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.01 That, in the instant case, the impugned assessment order has been framed by the learned Assessing Officer in pursuance of the Search Operations carried out under the provisions of s.132 in the business premises of the assessee company as well as in the residential premises of its directors. 1.02 That, on the date of initiation of the search under s.132 of the Act, i.e. on 12-07-2016, no assessment proceedings were pending in respect of the assessment year under consideration. Further, during the course of search operations carried out in the business premises of the assessee and as also in the residential premises of its directors along with the group concerns, not even a single incriminating material or document or valuable article or thing, pertaining to the assessment year under consideration, was found on the basis of which addition has been made by the learned AO in the returned income of the assessee. 1.03 The learned AO has made the impugned additions of Rs.7,57,634/-in the assessee’s income for A.Y. 2013-14 and that of Rs. 20,76,30,921/- for A.Y. 2014-15. The additions have been made by the AO on three counts viz. (i) on account of unsecured loan obtained by the assessee company by invoking provisions of section 68 of the Act; (ii) by holding certain purchase expenses claimed by the assessee in its books of account as bogus; and (iii) by holding the difference of amount of alleged bogus sales and amount of alleged bogus purchases being the profit already shown by the assessee in its books of account as its deemed income under s.68 of the Act, without having any recourse to any seized incriminating document or material or valuable article found during the course of search proceedings. Such an act on the part of the learned AO is patently wrong, unjustified, unwarranted and bad in the eyes of law in view of the facts and circumstances of the case and as also in view of the settled legal position as discussed in the ensuing paras. 2.01 On a plain reading of the provisions of section 153A, one may note that these provisions can be set into motion only in the case of a person where a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A. Even, the caption of the provision is read as ‘assessment in case of search or requisition’. Thus, there remains no IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 9 of 110 doubt to the proposition that the section 153A cannot be invoked in each and any case but it can be invoked only for the purpose of making an assessment or reassessment in the case of a person in whose case either a search under s. 132 is initiated or a requisition under s. 132A is made. The sole purpose of the section 153A is to bring home the tax on the undisclosed income, unearthed during the course of action under s. 132/ 132A, to the kitty of the ex-chequer. It is submitted that the section 153A is not meant for assessing/ reassessing any income which in the opinion of revenue authorities has escaped to the assessment and for that there are other provisions such as section 147 and section 263 in the statute. Although, not explicitly stated, the provisions of section 153A are aimed for making the assessment/ reassessment, for six assessment years, of the persons searched/ requisitioned, only, on the basis of money, bullion, jewellery, other valuable articles or things or books of account or documents found and seized either under s. 132 or requisitioned under s. 132A. In other words, subject to certain exceptions, as discussed here-in-after, under the scheme of the law any assessment/ reassessment under the provisions of section 153A has to be made only on the basis of incriminating material or undisclosed assets found during the course of action under s. 132/ 132A and it cannot be made on those issues in respect of which no incriminating material/ undisclosed asset was found. 2.02 It is submitted that normally provisions of section 132 are invoked only when the authorizing officer being the Principal Director General or Principal Director or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner, in consequence of information in his possession, has reason to believe that any person is in possession of some money, bullion, jewellery or other valuable articles or things or books of account or documents which have not been or would not have been disclosed by such person for the purpose of the Income-Tax Act, 1961. The purpose of the provisions of section 132 is not to make any assessment or reassessment but to gather the material necessary for the purpose of making assessment or reassessment. It is submitted that the provisions of section 132 are not aimed for discovery of those assets, books or documents or transactions, which are already in the specific knowledge or domain of the revenue or if required may come in the specific knowledge or domain of the revenue. It shall thus be appreciated that the provisions of section 132 are not meant for verifying the transactions which are already recorded in the regular books of account of an assessee. For such verification, the powers of assessment or reassessment are duly vested with the AO under the provisions of section 143/ 147 of the Act. As a natural corollary it thus follows that very purpose of initiating action under s. 132 is to unearth or discover any undisclosed income or undisclosed asset of an assessee and its objective is not at all to verify the veracity of the transactions already recorded in the regular books of account or in respect of which assessments have already attained finality. Since, the provisions of section 153A have the sole objective of framing the assessment/ reassessment in the case of a person in whose case search under s. 132 is initiated or requisition under s. 132 is made, it has to be necessarily concluded that the scope of the assessment/ reassessment under the provisions of section 153A is limited and restricted IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 10 of 110 only to the undisclosed income based upon the incriminating material/ undisclosed assets found during the course of search/ requisition. 2.03 It is submitted that the scheme of section 153A takes within its sweeps not only the assessment/ reassessment for those completed assessment years in respect of which either the assessments under s. 143(3) have already got completed previously or the time limit for issuance of notice under s. 143(2) have got expired but it also include those assessment years in respect of which either the assessment proceedings were pending or the statutory time limit for issuance of notice under s. 143(2) were alive, on the date of initiation of the search. The later situation has been contemplated under clause (b) of sub-section (1) to section 153A of the Act which prescribes that all the assessment proceedings which are pending on the date of search shall get abate. It is so because while legislating the law the legislature were not intending to carry out two parallel assessment/ reassessment proceedings for the same assessment years under two different sections which was the situation prevalent in the old block assessment scheme under Chapter XIV-B of the Act in respect of search initiated up till 31st day of May, 2003. It is therefore, it has been prescribed that no sooner any search under s. 132 takes place in case of any assessee, all the assessment proceedings which were either in the motion or which were pending shall come to a halt. 2.04 It is submitted that under the provisions of section 153A of the Act, assessment or reassessment of total income of the person searched or requisitioned for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made has to be made by the concerning Assessing Officer. Under the second proviso to section 153A, it has been enjoined that assessment or reassessment, if any, relating to any of the six assessment years which is pending on the date of initiation of the search or making the requisition shall abate. On a plain reading of the proviso, it becomes abundantly clear that only the assessment proceedings which were pending on the date of initiation of search or requisition shall get abate whereas the assessment proceedings for other assessment years, which have attained finality, shall not get abated. Thus, a clear cut distinction has been made in the section itself in respect of those assessment years in respect of which proceedings have attained finality at the AO stage and those assessment years where the assessment proceeding have not so attained the finality at AO stage. It is submitted that while making the assessment under s. 153A, an AO has to make a specific distinction for non-abated assessment years with that of the abated assessment years. 3.00 It is submitted that the issue relating to scope of assessment under s. 153A/153C is not res integra. The Hon’ble High Court of Delhi in the case of CIT vs. Kabul Chawla (2015) 9 TMI 80 (Del.), after considering all the available decisions on the issue has held that in respect of the completed assessment, additions can be made only on the basis of incriminating documents. 3.01 Your Honours, earlier the Hon’ble High Court of Rajasthan in the case of Jai Steel (India) vs. CIT (2013) 259 CTR 281 (Raj.) has also held that in respect of the assessment years which have got abated due to initiation of the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 11 of 110 search, an AO is free to make addition on any ground but in respect of the assessment years which have got completed before the date of the search, the assessment has to be made on the basis of the material seized during the course of search. 3.02 Your Honours, the decision of the Hon'ble Delhi High Court in the case of Kabul Chawla has been followed by the Hon'ble Gujarat High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. (2016) 387 ITR 529 (Guj.) and again in the case of Pr. CIT vs. Deepak Jashwantlal Panchal (2017) 397 ITR 153 (Guj.). 3.03 Your Honours, it is submitted that following the above judgment of the Hon’ble Delhi High Court, the Hon’ble jurisdictional Indore Bench of ITAT in case of Kalani Brothers in IT(SS)A No. 71/Ind/2014 and again in the case of Anant Steel Pvt. Ltd. in IT(SS)A Nos. 31, 28, 29 & 30/Ind/2010 and in many other cases, has held that in respect of the completed assessment years, in absence of any incriminating documents found and seized during the course of search, no addition can be made. 3.04 Reliance is also placed on the following judicial pronouncements: i) Pr. CIT vs. Smt. Kusum Gupta (2015) 9 TMI 1406 (DelHC) ii) CIT vs. RRJ Securities Ltd. (2016) 380 ITR 612 (DelHC) iii) Pr. CIT vs. Mrs. Lata Jain (2016) 384 ITR 543 (DelHC) iv) Pr. CIT vs. Jai Infrastructure & Properties Pvt. Ltd. (2016) 10 TMI 1022 (GujHC) v) CIT vs. Anil Kumar Bhatia 211 Taxman 453 (Del) vi) Amandeep Singh Bhatia vs. Addl. CIT (2016) 29 ITJ 1 (Indore-Trib) vii) Bhatia International Ltd. vs. Addl. CIT (2016) 29 ITJ 109 (Trib-Indore) viii) Pr. CIT vs. Dharampal Premchand Ltd. (2018) 408 ITR 0170 (Del. HC) ix) Pr. CIT & Ors. vs. Meeta Gutgutia & Ors. (2017) 295 CTR 0466 (Del.) x) Pr. CIT vs. Dipak J Panchal (2017) 397 ITR 0153 (Guj.) xi) Pr. CIT vs. Devangi Alias Rupa (2017) 98 CCH 0051 (Guj.) xii) Rakesh Kumar Jain vs. DCIT (2019) 57 CCH 0098 (Jaipur Trib.) xiii) DCIT vs. SMS SME Ltd. (2019) 57 CCH 0031 (Gau. Trib.) xiv) Rashmi Metaliks Ltd. and ANR vs. DCIT and ANR (2019) 72 ITR (Trib.) 0226 (Kolkata) xv) Amitbhai Manubhai Kachadiya and Ors. vs. DCIT (2019) 56 CCH 0189 (SuratTrib.) xvi) Smt. Sanjana Mittal vs. DCIT (2019) 55 CCH 0644 Asr Trib. xvii) SVM Buildcon Pvt. Ltd. vs. DCIT [IT(SS) A no. 71/Ind/2016 Order dated 26-10-2017] xviii) Chugh Real Estate Pvt. Ltd. vs. DCIT [IT(SS) A no. 60&61/Ind/2016 Order dated 26-10-2017] xix) Kamta Prasad Dwivedi vs. ACIT-1(1), Bhopal 2018 (9) TMI 1746 - ITAT Indore xx) Smt. Rashmi Mujumdar vs. DCIT(Central)-1, Bhopal 2018 (12) TMI 688 - ITAT Indore xxi) ACIT vs. Sudeep Maheshwari [ITA No. 524/Ind/2013, Order dated 13- 02-2019] IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 12 of 110 xxii) M/s. Ultimate Builders vs. ACIT [ITA No. 134/Ind/2019, Order dated 09-08-2019] xxiii) Sainath Builders vs. ACIT (2019) 35 ITJ 77 (Trib.-Indore) xxiv) DCIT-2(1), Indore vs. Shri Satish Neema [IT(SS) 149, 150 & 152/Ind/2016; Order dated 07-02-2020] 4.00 Your Honours, in the instant case, undisputedly, the assessee had voluntarily furnished its return of income under the provisions of s.139 of the Act for A.Y. 2013-14 on 31-10-2013 and further since, the time limit for issuance of notice under s.143(2) in response to the return so filed had also got expired much before the date of initiation of search, it has to be necessarily regarded that as on the date of search, i.e. on 12-07-2016, the assessment of the assessee for the assessment year 2013-14 was not pending and the same had got completed. In view of such position, the assessment year under consideration cannot be termed to be a year in respect of which assessment proceedings got abated in terms of second proviso to sub-section (1) of section 153A of the Act. It shall be worthwhile to mention here that in many of the judicial authorities, as cited above, it has been held that if in respect of any assessment year, an assessee had filed a return under s.139 and the time limit for issuance of notice under s.143(2) in respect of such return had got expired before the date of search, such assessment year would have to be regarded as a year in respect of which no proceeding was pending. 5.00 Your Honours, the similar legal ground was also raised by the assessee before the ld. CIT(A). However, The ld. CIT(A) at para (4.3.2) at page nos. 34 of the impugned Order dismissed the ground. The ld. CIT(A) held that during the course of the search under s. 132 in the various premises of the Dixit/Global Group, various incriminating bills, vouchers, loose papers, documents etc. were found evidencing deriving of substantial amount of undisclosed income by the assessee and other group assessee.. 5.01 Your Honours, it is humbly submitted that none of the findings given by the ld. CIT(A) is factually correct. It is submitted that during the course of the search proceedings, not even a single incriminating document was found relating to the assessee and even, the ld. AO while making the various additions in the income of the assessee for A.Y. 2013-14 & A.Y. 2014-15 has not made any reference of any seized document. Even further, while submitting his Remand Report, the ld. AO has not rebbuted the claim of the assessee made before the ld. CIT(A) that none of the additions is based upon any seized material. It is submitted that even in the Show Cause Notices issued to the assessee, there is no reference of any so called seized documents. It is submitted that the entire additions have been made by the ld. AO only based upon the regular books of account maintained by the assessee company in its normal course of business and no addition is based upon any incriminating seized material. 6.00 Your Honours, in view of the facts and circumstances of the case of the assessee and various judicial pronouncements, it is submitted that since the assessment years 2013-14 & 2014-15 are the years in respect of which assessment proceedings had already got completed and the same were not pending on the date of the search, any addition which is not based on any IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 13 of 110 incriminating material found during the course of search is not legally sustainable and the same deserves to be knocked down on the threshold itself.” 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, written and oral submissions made from both the sides and as also, various judicial authorities cited by both the sides. 8.2 We find that search and seizure operations u/s 132(1) were carried out in the case of assessee on 12/07/2016. We further find that,prior to the date of search, the assessee had already filed its returns of income, u/s. 139 of the Act, for A.Y. 2013-14 and A.Y. 2014-15, on 31/10/2013 and 24/09/2014 respectively. We noted that as on the date of search, i.e. 12/07/2016, no assessment proceedings were pending for AYs 2013-14 & 2014-15 and further, time limit for issuance of any notice under s.143(2) had also got expired on 30-09-2015 but, no such notice was issued to the assessee prior to the date of the search. In such circumstances, it can be concluded that for A.Y. 2013-14& A.Y. 2014-15, the assessment proceedings had got completed and they did not get abatedin accordance with the second proviso to the provisions of section 153A(1) of the Act, as also held by the ld. CIT(A). 8.3 We also find that the AO, while making the additions on account of bogus purchases and unsecured loans in the two assessment years viz. A.Y. 2013-14 & A.Y. 2014-15, has not made any single reference to any incriminating material found during the course of the search. We find that in the instant case, the AO has made the additions in the A.Y. 2013-14 & A.Y. 2014-15 on the sole basis of the audited financial statements furnished by the assessee during the course of the assessment proceedings and the entries found made in the tally data containing the regular books of account of the assessee, without making reference of any seized document or any other evidence gathered during the course of search. Before us, the ld. CIT (DR) also could not bring on record any single incriminating material on the basis whereof the additions have been made by the AO in the assessment order for the aforesaid two assessment years. Thus, in our considered view, the two assessment years viz. A.Y. 2013-14 and A.Y. 2014-15 are non- abated assessment years and therefore, as per the settled position of the law, any addition in such non-abated assessment years could have been made only on the basis of some incriminating material or evidences gathered during the course of the search which is not a case here. 8.4 We find support from the decision of the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 53 (Del HC) wherein the Hon’ble Court after considering various judgments had dealt with this issue as under: IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 14 of 110 “37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” 8.5 The above stated ratio laid down by the Hon’ble Delhi High Court has been applied by this Tribunal in the case of Kalani Bros. [IT(SS) No.71/Ind/2015 dated 6.11.15] observing as follows:- IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 15 of 110 "We have heard both the sides. We have also gone through the case laws relied upon by both the sides. We have also considered various relevant facts of the case. It is a settled legal position that once a search and seizure action has taken place u/ s 132 of the Act or a requisition has been made u/ s 132A, the provisions of section 153A trigged and Assessing Officer is bound to issue notice u/ s 153A of the Act. Once notices are issued u/ s 153A of, the Act then assessee is legally obliged to file return of income for six years. The assessment and reassessment for six years shall be finalised by the Assessing Officer. It is also held by various Courts that once notice u/ s 153A of the Act issued, then assessment for six years shall be at large both for Assessing Officer and assessee have no warrant of law. It has been also held that in the assessment years where assessments have been abated in terms of second proviso to section 153A then Assessing Officer acts under original jurisdiction and one assessment is made for total income including the addition made on the basis of seized material. But where there is no abatement of assessments and assessments were completed on the date of search then addition can be made only on the basis of incriminating documents or undisclosed assets, etc. In these cases there was no incriminating document found and seized. No assessment proceedings were abated in these assessees. Thus assessments for these assessment years were completed on the date of search. The assessments were completed u/ s 143(3} of the Act read with section 153A/ 153C of the Act after the search. There was no abatement of any proceedings in these cases for these assessment years in terms of second proviso to section 153A of the Act. There is no seized material belonging to the assessee which was found and seized in relation to additions made. In. a recent decision, Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) has held that completed assessments can be interfered with by the Assessing Officer while making assessment u/ s 153A of the Act, only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. In. all these cases no assessments were pending on the date of search for these assessment years. No assessments were abated in terms of second proviso to section 153A of the Act. Hon'ble Delhi High / Court in the case of CIT vs. Kabul Chawla (supra) has considered various High Court decisions relied upon by the learned DR. The Hon'ble Delhi High Court has considered the cases of Canara Housing Development Co. vs. DCfT; Madugula vs. DCIT; CIT vs. Chetandas Laxmandas and CIT vs. Anil Kumar Bhatia (supra). The only decision of the Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora; 367 ITR 517 relied on by the learned DR was not considered by Hon'ble Delhi High Court while deciding the issue in the case of Kabul Chawla. The Hon'ble Allahabad High Court has reversed the order of the Tribunal and remanded the issue to the Tribunal to consider the appeal of the department on merits. It is a settled legal position that when two views are possible on a particulars issue then the view favourable to the assessee should be followed as held by the Hon'ble Apex Court in the case of CIT vs. Vegetable Products; 88 ITR 192. Respectively following the decision of the Hon'ble Apex Court, we dismiss the ground of appeals of the Revenue. Departmental appeals are disposed accordingly." IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 16 of 110 8.6 Similar view also taken in the case of DCIT, Indore vs. Shri Satish Neema (2020) 37 ITJ 308 (Trib. Indore). Relevant extract of the decision is reproduced below: “19. We therefore respectfully following the decision referred above and also considering the latest judgement of Hon'ble High court of Delhi in the case of Pr. CIT & Ors. Vs. Meeta Gutgutia (supra) come to the conclusion that since the assessment orders in question were concluded and non-abated assessments no addition can be made in the assessment proceedings u/s 153A of the act unless there is any incriminating material found during the course of search. We find no inconsistency in the finding of Ld. CIT(A) quashing the assessment proceedings u/s 153A of the Act since the additions were not made on the basis of any incriminating material found during the course of search. Thus revenue's appeal for Assessment Years 2005-06, 2006- 07 and 2009-10 stands dismissed.” 8.7 Similar view was also taken by this Tribunal in the case of Rajmohan Agrawal (Ind), Bhopal vs. ACIT-2(1), Bhopal [IT(SS)A No.04/Ind/2019 Order dated 07-09-2021] 8.8 Thus, respectfully following the settled judicial precedence which are squarely applicable on the instant issue, we are of the view that while making an assessment under s.153A of the Act in pursuance of a search under s.132, no addition could have been made by the AO in the assessee’s income in a completed year of assessment without having recourse to any incriminating material. Accordingly, in our considered view, the action of the ld. CIT(A) in confirming the AO’s action of making additions in completed years of assessment i.e. A.Y. 2013-14 and A.Y. 2014-15, without having any recourse to any incriminating material was unjustified and unwarranted. Thus, the Ground No. 1 of the assessee’s appeal for A.Y. 2013-14 & A.Y. 2014-15 is Allowed. 9. Ground Nos. 1 & 2 of the Revenue for A.Y. 2014-15 and Ground Nos. 2 & 3 of the Revenue for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 9.1 Through the Ground No. 1 for A.Y. 2014-15 and Ground No. 2 for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18, the revenue has challenged the action of the ld. CIT(A) in deleting the additions made by the AO on account of bogus purchases as unexplained expenditure u/s. 69C of the Act. Further, through Ground No. 2 for A.Y. 2014-15 and Ground No. 3 for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18, the revenue has challenged the action of the ld. CIT(A) in deleting the additions made by the AO on account of difference between purchases and sales as unexplained cash credits u/s. 68 of the Act. The AO has made the aforesaid additions vide para 9, from Page No. 31 to 68, of the assessment order. Further, the ld. CIT(A) has given his common findings in respect of both the aforesaid additions from para (4.5) at page no. 82 to para (4.5.16) at page no. 146 of his Order. Since both the AO as well as the ld. CIT(A) have given common findings in respect of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 17 of 110 both types of additions, as aforesaid, and further since, the issues are connected to each other, these grounds of appeals of the revenue are adjudicated together. 9.2 Briefly stated facts of the issue, as culled out from the records, are that during the search/ post search proceedings as well as Special Audit proceedings, it was found that the assessee had shown purchases and sales with paper entities. Accordingly, the AO, vide Show-Cause Notice dated 31- 10-2018, averted the assessee company that as per its bank account with Bank of Maharashtra for the period from 01/04/2013 to 31/03/2014, it was found by him that the amount of Rs. 3,60,33,530/- was debited and paid to M/s. Shanti World Wide (in short ‘SWW’) and during the course of post search inquiries, in response to the summons issued u/s. 131 to SWW, its partner Shri Ashish Kacholiya appeared and his statement was recorded and in his statement Shri Ashish Kacholiya confirmed that the sales transactions shown by it to the assessee are not actual, but just book entries. In the light of such findings, the AO required the assessee to explain as to why the payments of Rs. 3,60,33,530/- made to SWW should not be treated as unaccounted income of the assessee. Subsequently, the AO, again issued a show-cause notice dated 19-07-2019, averting the assessee that during A.Y. 2013-14 to A.Y. 2017-18, the Auditors had observed that due to lack of documentary support and circumstantial evidences, the purchases/sales transactions said to be undertaken by the assessee cannot be termed as genuine. The AO, further, in the show cause notice, averted that the Auditor had remarked that from overall examination of the books of account, it appears to be that no genuine business activity had been carried out by the assessee. In other words, both purchases as well as sales are bogus and there is no connection between them. Finally, the AO made an addition of Rs.2,57,454/- in A.Y. 2013-14, Rs.20,02,67,817/- in A.Y. 2014- 15, Rs.21,56,98,886/- in A.Y. 2015-16, Rs.29,15,83,534/- in A.Y. 2016-17 and Rs.33,40,81,325/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s. 69C of the Act. Further, the AO also made addition of Rs.705/- in A.Y. 2013-14, Rs.43,97,536/- in A.Y. 2014-15, Rs.49,22,364/- in A.Y. 2015-16, Rs.95,07,721/- in A.Y. 2016-17 and Rs.1,14,63,760/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 of the Act. 9.3 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.The written submission made by the assessee before the ld. CIT(A) has been reproduced by the ld. CIT(A) in his Order from page no. 88 to 134.During the course of the appellate proceedings, before the ld. CIT(A), the assessee also furnished certain documents, as additional evidences under Rule 46A which were forwarded to the Assessing Officer for comments. The AO submitted his Remand IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 18 of 110 Report vide his letter dated 17/09/2020, a copy whereof is placed at page no. 217 to 233 of the assessee’s Paper Book for A.Y. 2013-14. The copy of the Remand Report of the AO was provided by the ld. CIT(A) to the assessee and in response, the assessee filed its rejoinder, which is placed at page no. 234 to 242 of the assessee’s Paper Book for A.Y. 2013-14. The Ld. CIT(A), after considering the remand report of the AO as well as the rejoinder of the assessee and as also, by taking into consideration the entire facts and circumstances of the assessee’s case, deleted the entire additions made by the AO on these two counts. The ld. CIT(A) has given the relevant findings at paras (4.5.5) at page no. 135 to para (4.5.16) at page no. 146 of his order. 9.4 Aggrieved with the relief granted by the ld. CIT(A), the revenue is in appeal before us. 9.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. However, before us, the ld. CIT(DR) could not controvert the various findings given by the ld. CIT(A) in his Order. We find that the ld. CIT(DR) could also not point out any specific defect or discrepancy in the various documentary evidences furnished by the assessee, in his support, before us. 9.6 Per Contra, Learned Counsel for the assessee has filed written submissions before us. The relevant portion of such written submission is being reproduced as under: “D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.00 That,the impugned addition of Rs.20,02,67,817/- has been made by the learned AO in the total income of the assessee on the allegation that the entire purchases and sales transactions recorded by the assessee in its books of account, relevant to A.Y.2013-14 to A.Y.2017-18, are fictitious, bogus and just an eye wash. According to the ld. AO, these entries of purchases and sales are mere accommodation entries. The ld. AO made the additions in the total income of the assessee, for various assessment years, equivalent to the amount of purchases recorded in the regular books of account maintained by the assessee for each year, by invoking the provisions of s.69C of the Act. Accordingly, for the year under consideration, the ld. AO has made the aforesaid addition of Rs. 20,02,67,817/- in the total income of the assessee for the assessment year under consideration. The ld. AO, on the subject issue, has made his findings in the assessment order from para (9) at page no. 31 to para (9.33) at page no. 68 of the order. 1.01 Your Honours, in this regard, for A.Y. 2014-15, the preliminary objection of the assessee, on the legal ground, is that such addition has been made by the learned AO merely by making a reference to the audited books of account of the assessee.It is submitted that in respect of the assessment year under consideration, the assessee had furnished its regular return of income under s. 139(1) of the Act on 24-09-2014 [kindly refer PB Page no. 61 to 64]. Along with such return of income, the assessee had also furnished a copy of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 19 of 110 Audit Report obtained by it under s. 44AB of the Act, and as also, copies of the Audited Financial Statements for the relevant previous year [kindly refer PB Page no. 70 to 110]. It is submitted that in response to the return so furnished, no notice under s. 143(2) was issued to the assessee and further, the time limit for issuance of any such notice on the date of search i.e. on 12-07-2016 had got expired. Thus, in other words, as on the date of the search, no assessment proceedings in respect of the assessment year under consideration were pending and therefore, the same can be said to be completed for the assessment year under reference. It is submitted that in such a situation, without having recourse to any seized incriminating document or material, no addition couldhave been made on the allegation of non-genuineness of certain entries recorded by the assessee in its regular and audited books of accounts in respect of the discrepancies found in the books of account of the assessee. It would be worthwhile to note that during the course of the entire search, not a single incriminating material or document was found from which it could have been inferred that the assessee had carried out any transactions of purchases or sales which were not genuine. Even, in the entire body of the assessment order, the ld. AO has not given any finding to such effect. 1.02 Your Honours, the learned AO, himself, at para no. (9.6) on page no.36 of the impugned assessment order has admitted the fact that during the course of search operations carried out in the premises of the assessee, only Tally Data was found and no documentary evidences in respect of the purchases and sale transactions of assessee was found, impliedly meaning thereby that no document/ material/ evidence was found or seized during the course of search operations which was in the nature of incriminating material and which substantiates the allegation of the learned AO that the purchases made by the assessee are non-genuine or bogus. 1.03 Your Honours, recently, in the similar circumstances, the Hon’ble ITAT Delhi Bench, Delhi in the case of Asst. CIT, Central Circle-04, New Delhi vs. M/s.Jakson Limited 2020 (1) TMI 1054 (Delh.-Trib.), by following the land mark judgment pronounced by the Hon’ble Delhi High Court in the CIT vs. Kabul Chawla (2015) 9 TMI 80 (Del.), was pleased to hold that in case of assessment framed under s.153A in pursuance of a search operation carried out under the provisions of s.132 of the Act, no addition on account of bogus purchases, in an unabated assessment year, can be made in the total income of the assessee merely by making a reference to the information already found recorded in the form of audited balance sheet and books of account. Further, the Hon’ble Bench in its Order has also held that no such addition on account of bogus purchases can be made without having any recourse to any incriminating material found or seized during the course of search operations. A copy of the judgment of the Hon’ble ITAT Delhi Bench, Delhi is placed at Page No. 111 to 116 of our Paper Book. 1.04 Your Honours, the Hon’ble ITAT Delhi Bench, again, in the case of Tegh International vs. Assistant Commissioner of Income Tax (2016) 47 CCH 0141 DelTrib., has held that the addition made by the assessing officer on account of bogus purchases was not sustainable in the eyes of law for the very reason that such addition was not based on any incriminating material seized during IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 20 of 110 the course of search operations. The Hon’ble Bench while pronouncing the decision as aforesaid has categorically held that the dispute of making additions without having any recourse to any incriminating material found or seized during the course of search operations, in a completed assessment year is no more res-integra in view of the decision pronounced in the case of CIT vs. Kabul Chawla (2015) 9 TMI 80 (Del.) by the Hon’ble Delhi High Court. A copy of the judgment of the Hon’ble ITAT Delhi Bench, Delhi is placed at No. 117 to 122 of our Paper Book. 2.00 Your Honours, the learned AO has grossly erred in making the impugned addition of Rs.20,02,67,817/- without first rejecting the books of maintained by the assessee, under the provisions of s.145(3) of the Act. It is submitted that the assessee was maintaining regular books of account in ordinary course of its business and in such books of account, all the transactions of purchases, sales, payments, receipts etc. were fully and truly recorded. It is submitted that the assessee had got its books of accounts, so maintained, duly audited by a firm of independent qualified chartered accountants and had also obtained an Audit Report, in the prescribed form, from the Auditors in accordance with the provisions of s.44AB of the Act. A copy of such audit report along with the audited financial statements was duly furnished by the assessee before the ld. AO. Copies of such documents are placed at page no. 70 to 110 of our Paper Book. 1.01 Your Honours, it shall be worthwhile to note that the auditors conducting the audit of books of accounts of the assessee had not found any defect or discrepancy in the maintenance of books of account by the assessee. It shall be worthwhile to note that during the course of the assessment proceedings, the assessee had produced all its books of account along with supporting documents such as vouchers, receipt books, bank statements, sale bills, purchase bills etc. before the learned AO. Besides, such books of account and supporting documents were also produced by the assessee before the special auditors to whom the reference for audit was made by the AO under s. 142(2A) of the Act. 1.02 Your Honours, once the assessee had maintained the books of account and the same were produced by it before the ld. AO for making the assessment of its business income, it was incumbent upon the ld. AO either to make the assessment of business income of the assessee on the basis of books of accounts so maintained, in accordance with the provisions of sub- section (1) to section 145 of the Act, or to reject the books of account, by invoking the provisions of sub-section (3) to section 145 of the Act, if he was not satisfied about the correctness or completeness of the books of account so maintained by the assessee. In the scheme of the law, no other option is available to an assessing officer in respect of the books of account maintained by an assessee. 1.03 Your Honours, in the instant case, undisputedly, the ld. AO has not invoked the provisions of sub-section (3) of section 145 of the Act, and thus, has not rejected the books of account of the assessee. In such circumstances, he was statutorily bound to accept the trading results and overall business income shown by the assessee in its regular and audited books of accounts, in accordance with the provisions of sub-section (1) to section 145 of the Act. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 21 of 110 However, the ld. AO without rejecting the books of accounts, disregarded all the transactions of purchases and sales recorded by the assessee in the said books and made huge additions. Such an action of the ld. AO cannot be said to be justified in the eyes of the law. For such 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. v) Shivam Metal Sharper Industries vs. DCIT (2017) 51 CCH 0067 (Asr. Trib) vi) Ram Bansal Prop. Vs. ITO (2014) 40 CCH 0189 (Agra Trib.) 1.01 Your Honours, the brief facts relating to the issue are that during the previous year relevant to the assessment year under consideration, the assessee company had started the business of trading in soya DOC.The modus operandi of such business was that, the assessee, first used to obtain supply orders from various parties and thereafter, on the basis of the supply orders, the assessee used to approach various other parties who were in the business of supply of soya DOC. The assessee used to make the supply against sales directly from the premises of the parties from whom it was making the purchases. Since, the assessee was making a direct supply to its customers from the premises of the purchasers, it was not required to maintain any godown or warehouse for storing the goods. Further, as per the stipulation of the sale, these were only customers who were required to bear the transportation cost from the premises of the purchasers to its own premises. In such circumstances, the assessee was also not required to incur any expenditure either on account of transportation of goods or loading/unloading of goods. Since, the assessee was not required to deploy substantial resources for carrying out such business, the assessee could derive a very nominal rates of gross profits and net profit from such business. 1.02 Your Honours, all the transactions of purchases and sales were genuinely carried out by the assessee with the registered dealers, who, at the relevant time, were duly registered under the Madhya Pradesh Vat Act, 2002. Further, all such parties were also duly assessed to income-tax. The entire transactions of purchases and sales are duly supported by sales bills issued by the parties from whom the assessee made the purchases and as also, by the sales bills issued by the assessee itself to its various customers. During the course of the assessment proceedings, the assessee had produced all the original purchase bills and sales bills for the necessary verification by the learned AO vide his submission letter dated 07-12-2018 [kindly refer PB Page no 116 to 163 of our paperbook for A.Y. 2013-14]. Copies of all such purchase bills and sales bills are also being produced herewith for kind perusal and necessary verification by Your Honours. Further, in order to furnish the details of the purchases and sales, the assessee had also furnished copies of its purchase register and sales register, for the relevant year, before the ld. AO IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 22 of 110 vide his submission letter dated 07-12-2018. Copies of such purchase register and sales register are placed at Page no. 123 to 158 of our Paper Book. 1.03 Your Honours, it is further submitted that receipts/payments against all the transactions of sales/purchases have taken place through banking channels only. In evidence of such fact, we are submitting herewith copy of Bank Book of the assessee, for the relevant year is placed at Page no. 159 of our Paper Book. In addition, the copies of the relevant bank statements of the assessee, reflecting the entries of receipts and payments against the transactions of sales and purchases are placed at Page no. 185 to 235 of our Paper Book. 1.04 Your Honours, all the transactions of purchases and sales have fully and truly been recorded by the assessee in its regular books of account which have duly been audited by a firm of qualified chartered accountants. It is reiterated that the auditors, conducting the audit, have not found any defect or discrepancy either in the books of account or the supporting documents produced by the assessee before the auditors. 1.05 Your Honours, besides maintaining the financial records, the assessee had also maintained day to day stock register, in which, all the transactions relating to the receipt of goods on purchases and dispatch of goods on sales have been recorded. Such stock register was also examined by the Tax Auditors as is evident from the comments given by them at Clause 11(c) of their Audit Report in Form No. 3CD, for the relevant assessment year under consideration [kindly refer PB Page no 70 to 100]. It would be worthwhile to note that based upon the quantitative details maintained in the day to day stock register, the assessee had drawn annual quantitative details which have been reproduced by the Tax Auditors in Schedule-H annexed to and forming part of the Tax Audit Report in Form No. 3CD [kindly refer PB Page no 70 to 100]. 1.06 Your Honours, the veracity of the purchases and sales transactions, as recorded by the assessee in its regular books of accounts, can also be verified from a very vital fact that such transactions have duly been disclosed by the assessee in its periodical returns furnished under the Madhya Pradesh Vat Act, 2002, under which the assessee was duly registered as a dealer. It shall be worthwhile to note that in response to such returns, the assessee has also been assessed under the aforesaid Act, accepting the sales and purchase transactions disclosed by the assessee in its books of account. Copies of relevant assessment orders passed under the commercial tax laws are placed at Page no. 236 to 243 of our Paper Book. 1.07 Your Honours, further, in order to establish the genuineness of the transactions of purchases and sales, the assessee is also furnishing now, copies of the ledger accounts of the sellers/buyers in the books of account of the assessee, duly signed by the respective sellers/buyers, are placed at Page no. 244 to 269 of our Paper Book, in token of confirmation of the transactions as claimed by the assessee. It is submitted that since such confirmations are quite vital and significant to adjudicate the issue on hand and therefore, in order to meet the ends of justice, the aforesaid documents may kindly be admitted at your end as additional evidences, in accordance IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 23 of 110 with Rule 46A of the Income-Tax Rules, 1962. An application under Rule 46A to this effect, with an additional copy to the concerned AO, is being made separately. 2.00 Your Honours, during the course of the assessment proceedings, the learned AO vide his two show-cause notices dated 31-10-2018 and 19-07- 2019 [kindly refer Page No. 101 to 115 and Page No. 168 to 173 of our Paper Book for A.Y. 2013-14], required the assessee to furnish its explanation on the subject issue. Vide the notice dated 31-10-2018, the ld.AO averted the assessee that as per enquiry conducted, post-search, one supplier namely M/s. Shanti World Wide had denied to have sold any goods to the assessee. Further, vide the notice dated 19-07-2019, the ld.AO, by making a reference of the comment of the special auditors, averted that purchases as well as sales transactions shown by the assessee in its books of account are not genuine. Accordingly, the assessee was show-caused as to why the purchases should not be treated as unaccounted expenses under s.69C r.w.s.115BBE and sales should not be treated as unaccounted income under s.68 r.w.s.115BBE of the Act. 3.01 Your Honours, in response to the aforesaid query, the assessee vide its twoletters dated 31-10-2018 and 25-07-2019[kindly refer Page No. 116 to 163 and 174 to 215 of our Paper Book for A.Y. 2013-14],furnished his detailed explanation on the subject issue. For a ready reference, the relevant abstract of the reply of the assessee made before the ld.AO, vide letter dated 31-10- 2018, is being reproduced as under : “II. EXPLANATION ON THE ISSUE OF TRANSACTION OF PURCHASES WITH M/S. SHANTI WORLD WIDE, DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2014-15 - Rs.3,60,33,530/- On this issue, I wish to submit as under: (i) At the outset, it is humbly submitted that the allegation made by your good self to the effect that the transactions made by our company with a firm named as M/s. Shanti World Wide (in short SWW), Indore are just book entries for concealing unaccounted income is completely baseless, factually incorrect and devoid of any merit. It is submitted that during the periods under assessment, our company had actually and genuinely carried out transactions of purchases, from time to time, with the above named SWW. It is submitted that as per audited books of account of our company, during the financial year ended on 31-03- 2014, our company had carried out following transactions with the SWW: Financial Year Nature of Transaction Commodity Purchased Quantity (in M.T) Purchase Value Payments made against purchases 2013-14 Purchases Soya DOC 997.010 3,60,33,530 3,60,33,530 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 24 of 110 (ii) Sir, our company, during the course of its ordinary business of trading in Soya DOC, had made genuine and actual purchases of Soya DOC from the aforesaid SWW. It is submitted that during the financial year 2013-14, our company made the purchases of 997.010 M.T. from SWW. It is submitted that SWW is a partnership firm genuinely engaged in the business of Soya DOC. It is submitted that such firm is a very reputed firm and it is carrying out its business at a large scale and further, to the best of our knowledge, it is also engaged in the business of export. The firm SWW is assessed to income-tax under PAN-ABPFS6840N and it was also duly registered under the then applicable M.P. VAT Act, 2002 under registration No. 23851404543. A copy of ledger account of SWW in the books of account of in our company, for the financial year 2013-14, is being submitted herewith, as Annexure B- 3.01. (iii) Sir, the transactions of purchases so made by our company from SWW are duly evident by the purchase bills issued by such concern, from time to time, in respect of each purchases made by our company. Copies of all such purchase bills are being furnished herewith for your kind perusal and ready reference of your good self, as Annexure B-3.02 [B-3.02.01 to B-3.02.47]. (iv) Sir, against the purchases so made from SWW, our company had made the entire payments through RTGS only duly issued from the current account of our company maintained with Bank of Maharashtra. Such fact can be verified by your good self from the copies of the bank statement of the aforesaid bank, for the relevant period, which are already available on your record having been furnished along with the previous submission letter dated 22-11-2018. (v) Sir, in order to establish the genuineness of purchases made from SWW, we are also submitting herewith a copy of ledger account of our company in the books of account of SWW, for the financial year 2013- 14, duly signed and confirmed by one of the partners of SWW, as Annexure B-3.03. (vi) Sir, the entire purchases of 997.010 M.T. of Soya DOC purchased from SWW for a consideration of Rs.3,60,33,530/-, during the financial year 2013-14, were sold by our company to three different concerns, in the same financial year, for a total consideration of Rs.3,68,27,095/-. Further, against such sales, the entire sales proceeds were received through banking channels, in the same year. For a ready reference, the details of corresponding sales made against the purchases from SWW and payments received against the sales so made are given, in a tabular form, as under: Sno. Name of Quantity Sales Value Amount Mode of Remarks IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 25 of 110 the customer to whom sales were made of the Sales [in M.T] Receive d Receipt 1 M/s. Ganpati Corporation 257.490 95,06,373 95,06,373 Through Banking Channel In evidence of sales, sales bills are produced and in evidence of receipt of payments through RTGS, Bank statements are being produced 2 M/s. Pitambara Exports 469.140 1,73,34,747 1,73,34,747 --do-- --do-- 3 M/s. Shrikrishna Trading Company 270.380 99,85,975 99,85,975 --do-- --do-- Total 997.010 3,68,27,095 3,68,27,095 (vii) Sir, in evidence of our assertion to the effect that sales of Soya DOC made to aforesaid three concerns and receipts of payments from such concerns through banking channels, we are also submitting herewith copies of ledger accounts of our company in the books of account of these three concerns, for the financial year 2013-14, duly signed and confirmed by the concerning persons, as Annexure B-3.04 to B-3.06. (viii) Sir, our company is maintaining day to day books of account in its ordinary course of business. It is submitted that all the transactions of purchases and sales made by our company are fully and truly recorded in such books of account. It is submitted that besides maintaining the books of account, our company has also maintained stock register in which the details as regard to each and every purchases and sales are maintained on day to day basis. It shall be appreciated that we have got books of account of our company duly audited under the provisions of section 44AB of the Act and in pursuance of such audit, we have also obtained audit report in the prescribed Form No. 3CB & 3CD. Such Audit Reports, for all the years under consideration, are already placed on record of your good self. On a perusal of the Schedule-H of Quantitative Details of the Audit Report, pertaining to financial year 2013-14, it shall be observed by your good self that the Auditors, after verification of books of account and stock register, have reported that during the relevant previous year we have made purchases 55044.900 qtl. Soya DOC and had also made sales of exactly the same quantity during the relevant year. Further, from a perusal of the copy of the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 26 of 110 Audited Profit and Loss Account, for the year ended 31-03-2014, it shall be observed by your good self that against the sales of the aforesaid 55044.900 qtl. Soya DOC we have booked sales revenue of a sum of Rs.20,46,65,353/- whereas we have claimed purchases against such sales at a value of Rs.20,02,67,817/- only. Thus from carrying out such transactions of purchases and sales we have duly shown an income of Rs.43,97,536/- which has duly been considered by our company while filing our return of income for A.Y. 2014-15. (ix) Sir, in view of the facts and submission made hereinabove, it shall be appreciated by your good self that all the transactions of purchases and sales of Soya DOC, including the transactions of purchases made from SWW, have duly been genuinely carried out by our company during the course of its ordinary business Soya DOC during the financial year 2013-14. It shall also be appreciated that all the transactions are duly supported by the corresponding purchase bills and sales bills. Further, the transactions of payments and receipts against the purchases and sales have taken place through account payee cheques only. Furthermore, these transactions are also evident from the copies of ledger accounts of our company in the books of account of the purchasers/ sellers. It would thus be appreciated that by furnishing the details and documentary evidences as above, we have discharged our onus of proving the genuineness of the purchases and sales transactions carried out by our company. Consequently, in the present set of facts, no adverse inference deserves to be drawn. (x) Sir, in the captioned notice, your good self has made reference of one statement of Shri Ashish Kacholia, a partner of M/s. Shanti World Wide, alleged to have been recorded, under s. 131 of the Act, during search/ post-search enquiry. A copy of such statement has also been provided to our company. We have duly gone through the copy of the statement and have found many discrepancies as regard to the recording of the statement and as also as regard to the contents of the statement. It is submitted that according to us, the statement so given by Shri Ashish Kacholia is factually incorrect, and far from truth and documentary evidences available on record. Since, your good self is proposing to use the aforesaid statement of Shri Ashish Kacholia, as an evidence against our company, as a legal right conferred to us by the various judicial authorities including the Apex Court, we hereby request your good self to afford us an opportunity of cross examination of Shri Ashish Kacholia, before your good self, on a date and time as may be felt convenient by your good self. (xi) Sir, pending cross examination of Shri Ashish Kacholia before your good self as requested in the preceding para, we have obtained an Affidavit duly sworn in before the Notary Public by Shri Ashish Kacholia, in which he has not only confirmed the transaction of purchases as claimed by our company but has also stated the circumstances in which the statement under s. 131 was given by him before the Investigation Wing. The original copy of such Affidavit is IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 27 of 110 being submitted herewith for your kind perusal and record, as Annexure B-3.07. (xii) Sir, upon going through the copy of the statement of Shri Ashish Kacholia recorded on 08-11-2016, we have noted many discrepancies, which are stated as below: (a) First of all it is submitted that the statement purported to be recorded under s. 131 has no evidentiary value in the eyes of the law for the very reason that in the statement nowhere it has been stated that before which authority such statement was recorded. It is also not clear that who had administrated the oath to Shri Ashish Kacholia. It is submitted that the powers and procedures under s. 131 of the Act are the same powers as are vested in a court under the Code of Civil Procedure, 1908 and such Code mandates the aforesaid requirements. (b) In reply to question No. (6), Shri Ashish Kacholia has impliedly admitted that the information about the affairs of his firm are not within his exclusive and specific domain but those are also within the domain of his brother Shri Amit Kacholia. Accordingly, it can be inferred that Shri Ashish Kacholia was not fully aware of the transactions carried out by SWW with our company and under such ignorance of facts, he might have stated certain facts which are not correct. (c) In reply to question No.(7), Shri Ashish Kacholia has furnished copy of ledger account of our company in the books of account of his firm. It is not the case that the transactions stated in the books of account of SWW are not getting tallied with those shown in books of account of our company. (d) In reply to question No.(10), Shri Ashish Kacholia has clearly stated that in the entire transactions carried out by his firm with our company there was no involvement of cash. Once this being the position, it has to be inferred that Shri Ashish Kacholia has never claimed that the payments through cheques made to his firm were given back in the form of cash to our company. If against the issuance of cheques by our company, there is no case of receipt of any cash, the under lying transaction i.e. the transaction of purchase for which such cheques were issued cannot be doubted or disputed. It shall be appreciated that no person of ordinary prudence would give payments of a substantial sum to any person without obtaining any goods or services in consideration of such payments. If the payments are found genuinely made by our company, as a natural corollary, it has to be taken that the purchases against which the payments were made are also genuine. (e) In reply to question No.(11), Shri Ashish Kacholia has stated that they have made corresponding purchases of soya DOC from IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 28 of 110 some other firms namely M/s. Padmavati Export, M/s. Ganpati Corporation, etc. and according to Shri Kacholia, such purchases were also not genuine. However, Shri Kacholia failed to clarify that how the non genuine purchases made by them have a nexus with the actual sales made by them to our company. (f) In reply to question No.(12), Shri Ashish Kacholia stated that he did not remember the name of the person through whom the transactions of purchase and sales were arranged. It raises a question mark on the entire story of Shri Ashish Kacholia. (xiii) Sir, in view of the various discrepancies in the statement given by Shri Ashish Kacholia and as also in view of the retraction statement given by Shri Ashish Kacholia through the affidavit, furnished herewith, it would be appreciated by your good self that no credence deserves to be given to the statement of Shri Ashish Kacholia recorded earlier on 08- 11-2016. (xiv) Without prejudice to the above and without in any manner conceding that the transactions claimed to have been carried out by our company with M/s. SWW are not genuine, it is submitted that even if for the sake of presumption, for a moment, such transactions of purchases are regarded to be bogus transactions at your end, then correspondingly, transactions of sales shown in our books of account against such purchases have also to be regarded as bogus transactions. It shall be appreciated by your good self that without there being any purchase of any goods there cannot be a case of sale thereof. As has already been stated in the preceding paras, I am maintaining quantitative details in respect of purchases and sales of goods and, therefore, if the quantity of purchases are excluded from the quantity tally, the stock would result out into negative figure which cannot be a ground reality and, therefore, the corresponding quantity of sales would also be required to be excluded. In such a situation, if our purchases of soya DOC from SWW at Rs.3,60,33,530/- are excluded from the purchase account, then correspondingly, sales of a sum of Rs.3,68,27,095/- would also be required to be excluded from the sales account as shown in books of account of our company. In such a situation, rather than any increase in our taxable income, our taxable income would get reduced by a sum of Rs.7,93,565/-. In view of the above facts and circumstances of our case, it is submitted that no addition on the count of transactions carried out by our company with M/s. Shanti Worldwide deserves to be made at your end. “ 3.02 Your Honours, during the course of the assessment proceedings, the assessee had made a further written submission vide its letter dated 25-07- 2019 [kindly refer PB Page no. 174 to 215 of our paper book]. The relevant abstract of the written submission, on the subject issue, is being reproduced hereunder: IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 29 of 110 “vii. EXPLANATION REGARDING GENUINENESS OF THE PURCHASES AND SALES MADE BY OUR COMPANY In this context, it is submitted as under: 1.01 At the outset, it is submitted that our company had duly produced the entire bills and vouchers in respect of the purchases and sales made by it during the relevant previous year before the Special Auditors. It shall be appreciated by your good self that based upon such bills and books of account only, the Special Auditors have given the party-wise details of purchases and sales in the body of their Report. All the purchase bills and sales bills of our company for the relevant period are being produced herewith for kind perusal and necessary verification by your good self. 1.02 That, all the transactions of purchases and sales have been made by our company with the dealers who were at the relevant time registered under the MP VAT Act, 2002. 1.03 That, all the transactions regarding payments against purchases and receipts against sales have taken place through banking channels only. In evidence of such fact, we are producing herewith all the bank statements of our company for kind perusal and necessary verification by your good self. 2.00 That, all the dealers with whom the transactions have been carried out are duly assessed to income-tax. 3.00 That, for the purpose of verifying the genuineness of the transactions, summons under s.131(1) or letters under s.133(6) may be issued to the concerning dealers. In order to facilitate your good self to make further enquiries or verification, in the matter, we are submitting herewith two separate statements marked as Annexure SCN-2.01 & SCN-2.02 respectively showing the complete details for purchases and sales made by our company during the previous years under consideration. In such statements, we have furnished all the necessary information such as name and address of the concerning parties, the details of their VAT/ GST Nos., the details of their PAN Nos., the description of the goods purchased/ sold, the quantity of goods purchased/ sold, the value of purchases/ sales, the mode of payment/ receipt etc. 4.00 That, as regard the observation of the Special Auditors that Vehicle Nos. mentioned in Purchase/Sales ledgers belong to scooters, vans, cars etc., it is submitted that the Special Auditors have given a very generic remark without pin-pointing any instance where any vehicle number, as mentioned by our company in its books of account, was found to be that of a two wheeler or vans, cars etc. It is humbly submitted that the finding given by the Special Auditors is factually incorrect. Our company is prepared to substantiate its claim as regard to the vehicle no. as mentioned in the books, if so required. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 30 of 110 5.00 Sir, as regard the observation of the Special Auditors that as per their understanding, the trade of Soya DOC is carried out at very small margin and payment is at sight but, in our case, the transactions of payments / receipts have taken place much after the date of purchases / sales, it is submitted that the notion of the Special Auditors is not universally correct and it is their own presumption. There is no straight jacket formula for carrying out any business in any particular manner. Different businessmen carry on the same business in different manner as per their own prudence and therefore, it is not required to be adjudged from the wisdom of any outsider. If our company considered that by selling the goods for a long credit and by purchasing the goods on a long credit, it would be able to generate the desired profit, then, no fault can be found with such business modus operandi. The Special Auditors have not doubted the transactions of payments and receipts as recorded in the books of account of our company. It shall be appreciated by your good self that from carrying out the trading transactions, during the relevant previous year, our company could be able to generate a substantial gross profits and net profits as shown in the Tax Audit Reports in Form No. 3CA/3CD for the relevant previous years which are already placed on record of your good self. 6.00 Sir, it shall be pertinent to note that the entire purchases and sales have been made by our company from/ to non-related entities. Further, the payments/ receipts have been made through banking channels. The Purchases and Sales are substantiated by actual and physical delivery of goods. Thus, the genuineness of transactions cannot be doubted. It shall be worthwhile to note that the Special Auditors have not pointed out that besides purchase bills, sales bills, books of account, motor transport receipts, bank statements, etc. which further documents were needed to hold the transactions as genuine. It is most humbly requested that if any other document or evidence is required at your end which in your eyes could substantiate our genuine claim for purchases and sales, then the same may kindly be intimated to us so as to enable us to make necessary compliance. 7.00 Sir, the entire purchases and sales made by our company are absolutely genuine as demonstrated above. However, without in any manner admitting that the transactions of purchases and sales so recorded in our books of account are not genuine but merely book entries, even if it is presumed to be so, then in such a situation, it has to be held that our company did not derive the net profits as shown in the audited Profit & Loss Accounts for the relevant previous years and consequently, the income shown in our returns of income for the assessment years under consideration would also be required to be scaled down with the result that there would arise a refund of the entire taxes paid by our company for such years. 8.00 Sir, in the case of our company, it would be quite strange to hold the purchases recorded in the books of account as unaccounted expenses under s.69C for the very reason that a transaction which is claimed to IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 31 of 110 have been recorded in the books of account by your good self cannot be, at the same breathe, be held as unaccounted transactions. As regard to the applicability of the provisions of s.69C of the Act, it is submitted that such provisions can be invoked only in those situations when an assessee is found to have incurred some expenditure which have not been found recorded in his books of account and for the sources whereof an assessee fails to offer any explanation. In the case of our company, first of all, the transactions are duly recorded and secondly, the payments having been made by our company through banking channels out of the balances available in our regular bank accounts, there cannot be any case of any unexplained source of expenditure. Here, it is most humbly submitted that the observations of the learned Special Auditors and your good self are in radical contradiction to each other inasmuch on one hand, the allegation of you both the authorities is that our company did not actually carry out any transaction of purchases and on the other hand, it is being alleged that the sources of such purchases are not explained. Without in any manner admitting the version of your good self as regard to the genuineness of purchase transactions carried out by our company, it is most humbly submitted that if for a moment, just for an assumption, it is presumed that our company did not carry out any purchase transaction genuinely then, there would not be any question of sources of payment against such so-called fictitious purchase transactions and as also of invoking of the provisions of s.69C r.w.s. 115BBE of the Act. 8.01 Sir, as regard to holding the sales as our unaccounted income, again, very respectfully, it is submitted that your good self has skipped a very vital point that our company, has itself offered the entire sales transactions as revenue (income) in its audited Statements of Profit & Loss and has also offered the taxable income resulting from such sales transactions after claiming legitimate and allowable expenditure and allowances, how there can be any question of unaccounted income in the hands of our company on account of disbelieved sales transactions. It shall be appreciated by your good self that by no canon of law, same income can be taxed twice. Once again, without admitting and concurring with the observations of the Special Auditors and your good self as regard to the genuineness of the sales transactions recorded in the regular books of account, it is submitted that even if for a moment, such transactions are considered to be non-genuine, then the million dollar question arises, how there can arise any incidence of tax on an imaginary or hypothetical income which has never got accrued or received by the assessee. It is humbly submitted that the Principle of Estoppel would prevent your good self to have any adverse cognizance against our company once it is held that both the transactions of purchases and sales as recorded in our books of account are not genuine. 9.00 Sir, as regard the applicability of the provisions of section 115BBE of the Act, at the outset, it is submitted that since the case of our company does not fall within the ambit of deemed income referred to in sections IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 32 of 110 68/69/69A/69B/69C/69D of the Act, there cannot be any question of invoking the provisions of sec.115BBE of the Act. 9.01 Without prejudice to the above, it is submitted that the provisions of section 115BBE of the Act have been inserted in the statute by the Finance Act, 2012 w.e.f. 1-4-2013 and therefore, even if any income of our company for the assessment years under consideration is proposed to be assessed under s.68 of the Act, then too the provisions of section 115BBE of the Act cannot be invoked in our case for the assessment years prior to A.Y. 2013-14. It is further submitted that the amendment as regard to increase in rate of tax in the provisions of section 115BBE has been made only by the Taxation Laws (Second Amendment) Act, 2016 w.e.f. 1-4-2017 and therefore the higher rate of tax being 60% shall be applicable only for the A.Y. 2017-18. 10.00 In the aforesaid facts and circumstances, it shall be appreciated by your good self that the entire purchases and sales made by our company are fully genuine and deserve no interference and even the presumption drawn by your good self or the Special Auditors would not result into any addition in the income of our company for any of the assessment years under consideration.” 4.00 Your Honours, as has been stated in the earlier paras, during the course of the assessment proceedings, the case of the assessee was referred for special audit under s.142(2A) of the Act and the special auditors submitted their report to the ld.AO with a copy to the assessee. The special auditors have given their comments, on the transactions of purchases and sales shown by the assessee in its books of account, year to year from A.Y.2013-14 to A.Y.2017-18. For a ready reference, the relevant pages of the special auditors report are scanned herein below: IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 33 of 110 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 34 of 110 5.00 Your Honours, despite making a detailed explanation on the issue, as extracted hereinabove, and despite producing all the documentary evidences such as copies of purchase bills, sales bills, purchase registers, sales registers, bank statements, name and addresses of buyers & sellers, the learned AO, on extraneous considerations, at operative para i.e. para no. (9.33) of the impugned assessment order has held that there had been no connection between the bogus sales and bogus purchases. The learned AO further held that in the interest of the justice since the initiation of the bogus transaction is bogus purchases, only the bogus purchases are considered as unexplained expenditure under s.69C. The learned AO further made a specific finding that since sales are also bogus, the difference between the purchase and sales is also considered as unexplained cash credit under s.68 of the Act. Finally, the ld.AO made an addition of Rs.20,02,67,817/- in the assessee’s income under s.69C of the Act on the allegation of bogus purchases. The learned AO further made an addition of Rs.43,97,536/-, in the assessee’s income for the assessment year under consideration, on account of difference between the alleged bogus sales and alleged bogus purchases. 5.01 Your Honours, the learned AO has given his findings from para (9) at page no. 31 to para (9.33) at page no. 68 of the impugned assessment order. For the sake of brevity, the gist of the AO’s findings can be summarized as under : (i) The transactions being undertaken through banking channel and being recorded in the books of account by themselves do not legitimize the actual underlying transaction and cannot be considered as an evidence of actual delivery of goods (para 9.3); (ii) During the course of the search, at the registered office of the assessee company situated at 408, 4 th floor, Landmark Building, opposite Raheja Classic Complex, New Link Road, Andheri, Mumbai,not a single piece of paper was found which could depict that any trading business was being conducted (para 9.4); (iii) A statement of Mr. Vishwajeet Yadav, Manager of M/s. Global Metal & Energy Pvt. Ltd. was recorded which reveals that no business is conducted from the registered office by the assessee (para 9.5); (iv) From the seized tally data it was seen that stock-in-hand was nil on any given date. The assessee also could not produce any of the counter parties or transportation bills, truck details etc. and no such papers were found during the course of the search too (para 9.6); (v) An inspector of the department was deputed to enquire about of the actual existence of the parties and it was found that these were just paper concerns. The summons issued at the given addresses also remained uncomplied (para 9.6); (vi) During the course of the search & seizure operations, tally data was obtained from the premises of the assessee situated at 178, BhaktPrahlad Nagar, Indore. The stock-in-hand was found to be nil on any given date. On being questioned, the assessee replied that he was involved in the chain of trading and the delivery of the goods was directly made from its suppliers to its buyers. It has been reiterated that no party could be identified or produced by the assessee. Further, no transportation bills, even details of trucks or any other details were IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 35 of 110 provided by the assessee and these were not found at the time of search (para 9.9); (vii) During the post-search enquiries, efforts were made to identify the trading parties and an inspector was deputed, who reported that these concerns are not real but just a façade. The summons issued to these concerns remained unattainted. The gist of report of the inspector, in respect of four of the parties, has been reproduced (para 9.10); (viii) The field enquiry report of the inspector reveals that all these concerns were bogus paper entities being operated by dubious individuals involved in providing accommodation entries and are a conduit for rotation of unaccounted funds (para 9.11); (ix) Despite innumerable purchase transactions seen in the tally data, not a single bill or voucher in the name of Adinath Exports, Indore was found or submitted during the search and seizure proceedings by the assessee company (para 9.13); (x) No supporting documents pertaining to the sales were found. In absence of bills and vouchers and on the basis of inspector report, the sales of the assessee with Padmavati Exports during the F.Y.2013-14 are also nothing but bogus (para 9.14); (xi) The transactions of sales made by the assessee with M/s. Sara Cattle Feeds are bogus and unverifiable(para.9.15); (xii) The assessee has brought back its unaccounted funds into the books in the garb of sales proceeds and actually no business activity was carried out by the assessee(para 9.16); (xiii) Notices under s. 133(6) were issued to various parties which returned unserved (para 9.19); (xiv) The transactions of sales shown by the associate concerns of the assessee with M/s. Sumeet & Sumeet Sales are bogus. An abstract of the statement of the proprietor of such concern has also been reproduced (para 9.20); (xv) The proprietor of M/s. Sumeet & Sumeet has categorically accepted that no actual sales and purchases had taken place. He further stated that cash deposited in his bank accounts were provided by the Global group only (para 9.21); (xvi) The transactions of purchases shown by the assessee and its associate concerns from M/s. Shanti Worldwide are bogus. An abstract of the statement of one of the partners of such concern has also been reproduced (para 9.22); (xvii) One of the partners of M/s. Shanti Worldwide has categorically accepted that no actual sales was made by them to the assessee and its associate concern (para 9.23); (xviii) It is clear that the sale-purchase transactions are fake and those seen in the seized tally data are bogus and mere accommodation entries for laundering unaccounted money of the group. In other words, both purchase as well as sales is bogus. Even the special auditors have given categorical observations/ remarks on this aspect of bogus sales/ purchases in his special audit report. The auditors have stated that from the overall examination of the books of account/documents, it appears that the auditee has not carried out any genuine business activity of trading and thus both the transactions of sales and purchases are mere book entries (para 9.27); IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 36 of 110 (xix) At para (9.31) of the impugned assessment order, the learned AO has given a table summarizing the assessment year wise figures of the alleged bogus and alleged bogus purchases. (xx) From the entire discussion, it is amply clear that all the purchases/ sales transactions recorded by the assessee in its books of accounts are just an eye wash. These are mere accommodation entries meant for routing of unaccounted income through the process of money laundering (para 9.32); (xxi) No connection has been established between the bogus sales and bogus purchases. However, in the interest of justice, since the initiation of the bogus transactions is bogus purchases, only the bogus purchases are considered as unexplained expenditure under s.69C of the Act and since sales are also bogus, the difference between the purchases and sales is also considered as unexplained cash credit under s.68 of the Act (para 9.33); 6.00 Your Honours, none of the observations of the ld. AO, as extracted hereinabove, is tenable in view of the facts and circumstances of the assessee’s case. Before making our rebuttal on the various observations of the ld. AO, we wish to throw some more lights on the facts of the case, in the ensuing paras. 7.00 Your Honours, the learned AO at page no.58 of the impugned assessment order has given a supplier-wise bifurcation of the purchases of Rs.20,02,67,817/- in respect of which addition has been made by the him. For the sake of convenience, the supplier-wise details of the purchases of Rs.20,02,67,817/- are being given as under: S.No. Name of the supplier from whom purchases have been claimed during the year Amount (Rs.) 1. M/s. Adinath Export 8,36,84,570 2 M/s. Arawali Export 8,05,49,717 3 M/s. Shanti Worldwide 3,60,33,530 Total 20,02,67,817 8.01 Your Honours, it is submitted that the assessee has genuinely made the purchases from the suppliers mentioned in the table above. It is submitted that all the suppliers from whom the purchases have been made by the assessee were duly registered under the then prevailing MP VAT ACT, 2002.In assertion of such fact, we are furnishing herewith the necessary details of the subject suppliers, as under : S. No. Name of the supplier Address VAT/ GST Registration No. 1. M/s. Adinath Exports 176-A, Dwarkadheesh Colony, Airport Road, Indore 23039076670 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 37 of 110 (M.P.) 2. M/s. Arawali Exports 301, SukhdhamAppartment, 303, Usha Nagar Extension, Indore 23839063980 3. M/s. Shanti Worldwide 218, Vikram Tower, Sapna Sangeeta Road, Indore VAT Reg. No. – 23851404543 GST No. - 23ABPFS6840N1ZI & 23ABPFS6840N2ZH 8.02 Your Honours, it is submitted that the entire purchases of Rs.20,02,67,817/- as made by the assessee are duly recorded in the regular books of account of the assessee. It is further submitted that the books of account maintained by the assessee were subjected to audit by a firm of qualified Chartered Accountants. It is submitted that the entire purchases are fully vouched and duly supported by the purchase bills. The auditors did not find any discrepancy in the purchases recorded by the assessee. 8.03 Your Honours, it is further submitted that the entire purchases so made by the assessee have been sold by it to various customers and it was therefore, at no point of time, the assessee was required to maintain any stock. It is submitted that against every purchase the assessee had made corresponding sales and such fact was duly verified by the ld. AO as well as the special auditors from the day-to-day stock register maintained by the assessee in its ordinary course of business. In such stock register, the assessee has recorded inward quantity of each and every purchases and has also recorded, corresponding outward quantity of the sales made by it. For a ready reference, the date-wise stock register maintained by the assessee is placed at Page no. 270 to 282 of our Paper Book. It shall be appreciated that, in the assessee’s case, the transactions of purchases and sales, both, are interlinked and interlaced with each other. Meaning thereby, if the transactions of sales are considered to be genuine then the transactions of purchases are also, essentially, required to be considered as genuine and vice versa. Consequently, if for any reason, the transactions of purchases are considered to be bogus then the transactions of sales would also be required to be held as bogus. 8.03 Your Honours, it is submitted that all the transactions of the purchases and sales shown by the assessee, in its regular and audited books of accounts, are duly supported by the relevant purchase bills and sales bills duly issued either by the suppliers of the goods to the assessee or issued by the assessee to its customers. Further, the necessary entries regarding such transactions have duly been made in the books of the assessee, the suppliers and the customers. In evidence of such fact, we are submitting herewith copies of accounts of the suppliers/ customers in the books of the assessee duly counter confirmed by such suppliers/ customers, is placed at Page no. 244 to 269 of our Paper Book, as referred to in para (1.07) supra. Thus, in such circumstances, the genuineness of the transactions cannot be doubted. 8.04 Your Honours, it further submitted that the assessee has made the entire payments towards the purchases through banking channels only. Such IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 38 of 110 fact can also be verified by Your Honours from the copies of the relevant abstracts of the bank statement of the assessee, for the relevant previous year, is placed at Page No. 185 to 235 of our Paper Book, as referred to in para (1.03) supra. It is submitted that on a perusal of the bank statements of the assessee, it would be appreciated that the assessee was having sufficient funds in its bank account before making the payments towards purchase consideration. It shall also be observed by Your Honours that at no instance the assessee had deposited cash in its bank accounts for making the payment of purchase consideration. Such fact establishes the genuineness of the purchase transactions claimed by the assessee and also, negates the AO’s presumption that such transactions were carried out by the assessee for routing its unaccounted money. 9.00 Your Honours, having demonstrated, in the preceding paras, that the assessee had genuinely carried out all the transactions of purchases and sales, now, we wish to rebut the various findings of the ld. AO, made by him in the impugned order, as summarized by us in the para (5.01) supra in the ensuing paras. 9.01 Your Honours, as regard the finding of the ld. AO, as given at para (9.3) of his order, to the effect that the transactions being undertaken through banking channels and being recorded in the books of accounts, by themselves, do not legitimize the actual underlying transactions and cannot be considered to be an evidence of actual delivery of goods, it is submitted that the ld. AO has made an attempt to undermine the evidentiary value of a transaction carried out through banking channel. It is submitted that bank statement being a third party evidence, is a good proof to establish genuineness of any transactions. By disregarding such fact, the ld. AO wants to convert a good proof into no proof, which is not sustainable in the eyes of the law. Likewise, the recording of transactions by the assessee in its books of account, is also a very significant evidence to establish the genuineness of the transactions especially, in a circumstance when such transactions were found recorded in the tally datas found during the course of the search. The recording of such transactions in the books are also very crucial, yet from another angle of invoking the provisions of section 69C in the case of the assessee, which has been discussed at length, elsewhere, while dealing with a separate ground relevant to such issue. 9.02 Your Honours, as regard the allegation of the ld. AO to the effect that during the course of the search at the registered office of the assessee company at Mumbai, not a single piece of paper was found establishing the genuineness of the transactions. It is submitted that the office referred to by the ld. AO was registered office of the assessee and other group companies, but, such office was not a place of business for the assessee. Since, the assessee was neither maintaining any books of account or any other record relating to its business in the office situated at Mumbai, the question of finding any such record from the Mumbai office does not arise. Accordingly, such finding of the ld. AO cannot be viewed against the assessee. 9.03 Your Honours, as regard the allegation of the ld. AO made at para (9.5) of the impugned order, to the effect that from the seized tally data it was seen IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 39 of 110 that stock-in-trade was Nil on any given date, it is submitted that first of all, non maintenance of stock-in-trade by itself, cannot be a ground of doubting the transactions of purchases and sales. Secondly, it is submitted that the nature of the business of the assessee was that in which it was not required to maintain any stock-in-trade. As submitted in the opening paras, supra, the assessee first used to obtain the supply order and then to place the order of the purchases. Further, the delivery to the customers used to be directly made from the premises of the suppliers. In such circumstances, the assessee was not required to maintain any stock-in-trade. Furthermore, since the delivery of the goods were directly made by the suppliers of goods to the buyers of the goods of the assessee, the necessary evidences regarding freight payments for transportation of goods were neither required to be maintained by the assessee, nor the same were actually maintained by the assessee in its premises. 9.04 Your Honours, as regard the allegation of the ld. AO made at paras (9.05), (9.10) and para (9.11) of the impugned order, to the effect that as per the Inspector’s Report the parties were found to be just paper concerns and facade, it is submitted that such a finding of the ld. AO is contrary to his own findings. It is submitted that the ld. AO himself, in the para (9.06), has stated that summons issued to the parties remained uncomplied. It is submitted that it is not the allegation of the ld. AO that the summons remained unserved, but, what he alleged is that the summons remained uncomplied or unattended. Once it is established that the summons got duly served on the addresses given by the parties, such parties cannot be said to be mere paper concerns. Further, the ld. AO in the body of the order itself, at para (9.20) and again at para (9.22), has made reference of statements of proprietor/partner of the subject parties recorded under s. 131(1A) of the Act, and therefore, it cannot be said that these concerns or their owners were not in existence. Furthermore, the existence of VAT/GST registration number and Bank Accounts of the parties prove beyond doubts the actual existence and functioning of such parties. 9.05 Your Honours, as regard the finding of the ld. AO given at para (9.8) of the impugned order that during the course of search a statement of Shri Vishwajeet Yadav was recorded at Mumbai, who revealed that no business was being carried out from the registered office, it is submitted that first of all, Shri Vishwajeet Yadav, whose statement was recorded was not an employee of, or any authorized person for, the assessee company. Further, the assessee company carried out its business activities from its Indore Office and therefore, the statement of Shri Vishwajeet Yadav has no adverse impact for determining the genuineness of business activities carried out by the assessee from its Indore office. 9.06 Your Honours, as regard the finding of the ld. AO given at para (9.9), it has already been discussed in the preceding paras that the assessee was neither required to hold any stock-in-trade, nor it was required to maintain any transportation bills, builties etc. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 40 of 110 9.07 Your Honours, as regard the finding of the ld. AO given at para (9.13) that innumerable purchase transactions were seen by him in the tally data, but, not a single bill or voucher of assessee, was found in the name of M/s. Adinath Exports, it is submitted that all the purchase bills and sales bills were duly kept at the office of the assessee situated at 178, BhaktPrahlad Nagar, Indore. It is submitted that the search party, upon conducting the search messed up the entire records of the assessee. The search party thrown record here and there and therefore, at the spot, upon asking the particular bill of M/s. Adinath Exports, it was difficult for the assessee to unearth the same from the records lying in its business premises in a very haphazard and messed up manner. 9.08 Your Honours, the ld. AO besides doubting the genuineness of the purchases, has also doubted the genuineness of the entire sales shown by the assessee in its regular books of account. The ld. AO at para (9.15) of the order alleged that the transactions of sales made by the assessee with one of the parties namely, M/s. Sara Cattle Feeds is bogus. The ld. AO further alleged that by showing the transactions of sales, the assessee has brought back its unaccounted income in the books. In this regard, at the outset, it is submitted that such transactions of sales were genuinely made by the assessee. Even, if presuming, but not in any manner admitting, for the sake of presumption, if it is presumed that the assessee had not made any actual sales to its parties, then, it is submitted that the assessee has already offered income from such sales in its books of account and has also been assessed by the AO himself, in respect of such sales and therefore, no adverse cognizance ought to have been taken by the ld. AO qua such alleged bogus sales and as also, qua the alleged purchases corresponding to such alleged bogus sales. 9.09 Your Honours, in the para (9.18), again the ld. AO has held that neither the associate companies of the assessee, nor the assessee itself, actually carried out any trading activity. Now, it is submitted that first of all, such a finding is not factually correct, in view of the various documentary evidences which were furnished before the ld. AO and which are also being furnished herewith before Your Honours. Despite such evidences, if for any reason it is held that the assessee did not carry out any trading activity as shown in its audited financial statements, it is submitted that in such an event, since the assessee is presumed to have not carried out any activity of purchases and any activity of sales, there cannot be any case of any Gross Profit or Net Profit in the hands of the assessee from carrying out such activities. It is submitted that for such proposition, the assessee has taken a separate ground, as serialized in the Appeal Memo as serial no. (6h), in respect of which a detailed submission has been made while delving with such ground, infra. 9.10 Your Honours, at para (9.19) the ld. AO has given a finding that notices under s. 133(6) were issued to the parties which returned unserved. It is submitted that such a finding of the ld. AO is contrary to his own findings given at para (9.6) in which he has merely stated that the summons issued to the parties remained uncomplied. It is submitted that the question of compliance can arise only once the summons are issued and served meaning thereby, as per the findings given by the ld. AO at para (9.6), the summons got duly served. It is further submitted that during the course of the assessment IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 41 of 110 proceedings, the ld. AO never brought such fact to the notice of the assessee. The ld. AO neither provided the details of the parties in respect of whom the alleged notices under s. 133(6) remained unserved. The ld. AO also did not apprise the assessee about the addresses at which such notices were allegedly sent. The ld. AO also did not share with the assessee the reasons quoted by the postal authorities for return of the notices. In such circumstances, no adverse inference deserves to be drawn on the basis of this finding of the ld. AO. 9.11 Your Honours, at paras (9.20) and (9.21) the ld. AO has made reference and rather reproduced, some statement of one Shri Sumeet Garg who happens to be the proprietor of M/s. Sumeet & Sumeet Sales. It is submitted that during the entire assessment years under consideration the assessee had not entered into any trading transaction with Shri Sumeet Garg. Such fact can also be verified by Your Honours from the copies of the financial statements already placed on record of Your Honours. Thus, making a reference of the statement of Shri Sumeet Garg in the assessment order passed in the impugned addition of the assessee was of no relevance. 9.12 Your Honours, the learned AO in the impugned assessment order, at paras (9.22) and (9.23), has also made reference of one statement of Shri Ashish Kacholia, a partner of M/s. Shanti World Wide [in short ‘SWW’], recorded under s. 131 of the Act, during search/ post-search enquiry, by the Investigation Wing. The learned AO at page no. 55 of the assessment order has also reproduced the aforesaid statement. However, the ld. AO, while framing the assessment, miserably failed to take into consideration the subsequent Affidavit duly sworn before the Notary by Shri Ashish Kacholia on 24-11-2018, which was furnished by the assessee before the ld. AO along with its submission letter dated 31-10-2018. A copy of the Affidavit is placed at Page no. 283 to 285 of our Paper Book. In such Affidavit, Shri Ashish Kacholia, in unequivocal terms, has stated that his statement under s. 131 was recorded in a forceful manner. Shri Kacholia also confirmed the transactions of sales effected by his firm to the assessee. In effect, throught the said Affidavit, Shri Ashish Kacholia, categorically, retracted his earlier statement recorded by the Investigation Wing. For a ready referecce, the Affidavit of Shri Ashish Kacholia is being scanned as under: IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 42 of 110 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 43 of 110 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 44 of 110 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 45 of 110 9.13 Your Honours, the ld. AO at para (9.27) and again at para (9.33) has reiterated that both, sales as well as purchase transactions of the assessee are fake and those shown in the seized tally data are bogus and mere accommodation entries for laundering unaccounted money. The ld. AO has also made a reference of the special auditors’ comments that the assessee had not carried out any genuine business activity of trading and both the activities of sales and purchases are mere book entries. In this regard, it is reiterated that first of all, such findings of the ld. AO and special auditors are not factually correct. Secondly, if such findings are taken to be true, then, the assessee having not carried out any business activity, the question of making any assessment in the hands of the assessee in respect of the business income should not have arisen. 10.00 Your Honours, the ld. AO has made the impugned addition of Rs.20,02,67,817/- in respect of purchases shown by the assessee in its books of account. The details of the purchases made by the assessee, during the relevant previous year, have been reproduced by the ld. AO at page no. 58 of the impugned order. On a perusal of such details, it shall be observed by Your Honours that during the relevant previous year, the assessee had made purchases from three parties only, namely, (i) M/s. Adinath Exports, Indore; (ii) M/s. Arawali Exports; and (iii) M/s. Shanti Worldwide. It is submitted that in respect of M/s. Adinath Exports, the ld. AO has merely relied upon the comments of the Inspector, as given at para no. (9.10) of the impugned order. In respect of M/s. Shanti Worldwide, the ld. AO at paras (9.22) and (9.23) has relied upon the statement of Shri Ashish Kacholia, a partner of the said firm. However, as has been demonstrated above, the ld. AO has not taken into consideration the subsequent Affidavit given by Shri Ashish Kacholia confirming the transactions. Ironically, in the entire body of the assessment order, the ld. AO has not whispered a single word about the Affidavit of Shri Ashish Kacholia. In respect of the second party, namely, M/s. Arawali Exports, in the entire body of the assessment order, the ld. AO has not given any single finding or made any comment. In such circumstances, the entire findings of the ld. AO, making the impugned addition, deserves to be set- aside. 11.00 Your Honours, the learned AO has also referred two case laws for applying the test of human probabilities in the case of the assessee. It is submitted that in both the cases there was a question of tax evasion by the assesses through claiming certain receipt of income as exempt. However, in the instant case, the assessee has not claimed any exemption in respect of any income rather the assessee had paid the due taxes on the profit derived by it from the sale of such purchased. Therefore, the finding noted by the learned AO has no relevance. 12.00 Your Honours, without prejudice to the above, the learned AO for leveling the allegation against the assessee has referred some field enquiry carried out by one of the inspectors, during the course of post search enquiries, for indentifying the suppliers of the assessee. In such enquiry, it was allegedly gathered that the concerns are not real because they were not found present at their respective premises. The learned AO at page no. 44 of the assessment order has reproduced the report of the aforesaid field enquiry. On a perusal of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 46 of 110 the report, it can be gathered that the inspector had enquired at addresses of four parties i.e. namely (i) M/s. Sara Cattle Feeds Pvt. Ltd. at LG-15, Sunrise Tower, M.G. Road, Indore; (ii) M/s. Padmavati Exports at UG -27, Sunrise Tower, M.G. Road, Indore; (iii) M/s. PitambaraExports at 214-A, Silicon City, Indore and; (iv) M/s. Adinath Exports at 176, Dwarkadhish Colony, Airport Road, Indore. Such addresses have been gathered by the inspector from the seized Tally Data of the assessee’s group. The inspector in his report has concluded that the aforesaid parties were not found at their respective addresses. In this regard, it is submitted that the deputed inspector has reached the conclusion as aforesaid only because he failed to make necessary enquiry as regard the then existing address of the aforesaid entities. Your Honours, for the sake of convenience and better understanding, our necessary rebuttal on the enquiry made by the inspector in case of aforesaid parties is being given, as under : S. No. Name of the party Address at which the inspector has carried out the enquiry Our rebuttal 1. M/s. Sara Cattle Feeds Pvt. Ltd. LG-15, Sunrise Tower, M.G. Road, Indore By the relevant time, when the inspector made enquiry, the company had shifted its address from LG-15, Sunrise Tower, M.G. Road, Indore to 51, Bengali Colony, Bengali Square, Kanadiya Road, Indore. In evidence of same, we are submitting herewith a copy of Company Master Data of the Company, is placed at Page No 286 of our Paper Book. 2. M/s. Padmavati Exports LG-15, Sunrise Tower, M.G. Road, Indore This firm had also got shifted its place of business to Rituraj Colony, Kityani, Mandsaur. Therefore, the inspector could not find any such concern on the address enquired. 3. M/s. Pitambara Exports 214-A, Silicon City, Indore On the date of enquiry the aforesaid concern had ceased its business operations and therefore, the inspector could not find any such concern on the address enquired. 4. M/s. Adinath Exports 176, Dwarkadhish Colony, Airport Road, Indore On the date of enquiry the aforesaid concern had also ceased its business operations and therefore, the inspector could not find any such concern on the address enquired. 13.00 Your Honours, it is submitted that the allegation made by the learned AO that the suppliers of the assessee are dummy paper entities is completely baseless and is not supported with any corroborative evidences. It is IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 47 of 110 reiterated that all the suppliers from whom the assessee have made purchases are genuine and the same are regularly assessed under various prevailing Tax Laws. Your Honours, it is submitted that we have already established the genuineness of the purchases made by the assessee during the relevant previous year with the aid of ample of documentary evidences, as referred to in the preceding paras. Further, in order to counter the allegation of the learned AO to the effect that the suppliers are dummy paper entities, we are submitting herewith the following documentary evidences to establish the identity of the suppliers: (i) Copies of the Registration Certificates of the respective suppliers duly obtained by them under the M.P. VAT Act, 2002; (ii) Copies of VAT returns of the suppliers for the relevant previous year; (iii) Copies of assessment orders framed in the cases of suppliers by the Commercial Tax Department All the aforesaid documents are placed at Page No. 287 to 307 of our Paper Book. 13.01 Your Honours, on a perusal of documentary evidences furnished hereinabove, it would be appreciated that the identity of the suppliers from whom the assessee had made purchases is established beyond all doubts. 14.00 Your Honours, it is submitted that once the purchases made by the assessee from third parties is established with the help of plethora of documentary evidences, then no addition can be made by the taxing authorities by treating such purchases as bogus and shame transactions. For such proposition, reliance is placed on the following judicial pronouncements : i) DCIT vs. ATC India Tower Corporation Pvt. Ltd. (2019) 56 CCH 0212 (Mum.) ii) CIT vs. Nikunj Eximp Pvt. Ltd. (2015) 372 ITR 619 iii) ITO vs. Vaman International Pvt. Ltd. [ITA No. 794/Mum/2015 dated 16/11/2016] iv) CIT vs. Jansampark Advertising & Mkt. Pvt. Ltd. (2015) 376 ITR 373 v) Indian Wollen Carpet Factory vs. ITAT (2002) 260 ITR 658 vi) M.B. Jewellers& ORS vs. DCIT (2018) 52 CCH 0234 Kol.Trib. vii) Prabhat Gupta & ANR. vs. Income Tax Officer & ANR. (2017) 51 CCH 0713 (Mum.-Trib.) 15.00 Your Honours, in the case of the assessee, it is not the case or allegation of the ld. AO that the payment made by the assessee to its suppliers of the goods, routed back to it and therefore, in such circumstances, neither the purchases could have been disbelieved nor any addition under s. 69C could have been made. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Gujrat in the case of CIT vs. Kashiram IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 48 of 110 Textiles Mills Pvt. Ltd. (2006) 284 ITR 61 (Guj.). The Hon’ble High Court, at paras (9 & 10) of the judgment was pleased to hold as under: “9. Insofar as question No. 1 is concerned, the Tribunal has taken note of the fact that Revenue has not disputed the details of the closing stock. Therefore, the Tribunal has found, that in the facts and circumstances of the case, the existence of the raw materials purchased cannot be doubted, and if that is the situation, there could be no case for disputing the purchases. The Tribunal has further recorded that there was no material on record to conclude that in addition to the alleged fictitious purchases there were also some other purchases for the same material under different invoices which could be reflected in the closing stock. It is further recorded by the Tribunal that to the contrary, from the details submitted, even if such a doubt existed regarding existence of some purchases over and above the alleged fictitious purchases, the doubt on this aspect was also removed. For this purpose, the Tribunal has by way of illustration analyzed the account of one of the items, appearing as Annex. '6’ in the paper book filed before the Tribunal and come to the irresistible conclusion that quantity remaining in the closing stock is only out of the purchases effected by the assessee. It is in light of the aforesaid findings that the Tribunal has held that no addition was warranted on account of alleged fictitious purchases. 10. Similarly, in relation to the rate of purchases, the Tribunal has recorded that in absence of any material to show that the purchase price shown in the invoices was inflated it was not possible to sustain the addition on the said ground. The Tribunal has further recorded that there was no evidence to show that a part of the amount paid to the suppliers had come back to the assessee and therefore also there was no case for any addition in respect of such purchases. It has further been found by the Tribunal that purchases as such are deductible while computing profits and hence even if some higher purchase price had been paid that would be no ground for making or sustaining any addition, in absence of any evidence to show what was the prevailing market price.” (Emphasis Supplied). 15.01 Your Honours, in the present case, the ld. AO has invoked the provisions of section 69C of the Act merely by doubting the genuineness and authenticity of the expenditure towards purchases claimed by the assessee. Undisputedly, such expenditure was found recorded in the audited books of account of the assessee. It is submitted that sec. 69C refers to the source of the expenditure and not to the expenditure itself. In the similar circumstances, the Hon’ble High Court of Delhi in the case of CIT vs. Radhika Creation (2010) 78 CCH 0423 (Del.HC) held the same view.A copy of the judgement is placed at Page no 308 to 311 our Paper Book. In the said judgemement their Lordships at paras (5 & 6) were pleased to hold as under: “5. Insofar as the first aspect of the matter is concerned, we find that s. 69C clearly stipulates that where, in any financial year, the assessee has incurred an expenditure and he offers no explanation about 'the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 49 of 110 source of such expenditure or part thereof', or the explanation, if it is offered by him, is not, in the opinion of the AO, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. Thus, the focus of s. 69C is on the "source" of such expenditure and not on the authenticity of the expenditure itself. It is an admitted position that the expenditure was shown by the assessee in its regular books of accounts and it is because of this reason that the Tribunal had observed : "As the expenditure was accounted in the regular books, the source is obviously explained. The provisions of s. 69C are not applicable as there was no unaccounted expenditure."[underlining, italicized in print, added] 6. What the AO attempted to do was to go into the authenticity of the expenditure and he returned a finding that the expenditure was not authenticated by vouchers and consequently, he added the said expenditure as unexplained expenditure under s. 69C. We are in agreement with the observations and findings of the CIT(A) as well as that of the Tribunal that this is not a case which falls under s. 69C. Clearly, s. 69C refers to the 'source of the expenditure' and not to the expenditure itself. Consequently, the AO was clearly wrong in treating the said expenditure as unexplained expenditure under s. 69C of the said Act and the lower appellate authorities were right in their conclusions in deleting the said addition.” 15.02 Your Honours, in the instant case, the entire payments against the purchases were made by the assessee through account payee cheques only and the same were duly recorded in the regular books of account. In such circumstances, the provisions of section 69C of the Act cannot be invoked. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Gujarat in the case of Sajani Jewels vs. DCIT (2016) 96 CCH 0240 (Guj. HC). 16.00 Your Honours, in the instant case, the entire case of the learned AO, so far as it relates to the assessment year under consideration, is hovering around one field enquiry conducted by one of the inspectors of the investigation wing and recording of statements of one supplier. It is submitted that, during the course of entire assessment proceedings, the assessee was not confronted with any field enquiry conducted by an inspector of the Department.Further, in respect of the party whose statements were recorded under s.131(1A) of the Act, despite making a specific request vide para 1.01.5 and sub-para (x) of para (II) of the assessee’s submission letter dated 07-12- 2018 [kindly refer PB Page no. 116 to 163 of our Paper Book for A.Y. 2013-14], the learned AO did not afford any opportunity of cross-examination to the assessee. It is submitted that the learned AO was not only duty bound to apprise the assessee about the information gathered by him, through such enquiries, against the assessee but was also required to afford opportunity of cross examination of his witnesses to the assessee, which he miserably failed to do. In such circumstances, in view of the plethora of judicial IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 50 of 110 pronouncements, referred hereinafter, it is submitted that no reliance deserves to be placed upon the statements/ information/material/evidences gathered by the learned AO and further, the culminated assessment order so framed also deserves to be set aside. 16.01 Your Honours, on the issue of cross-examination, the Hon’ble Supreme Court in the case of M/s. KishinchandChellaram vs. CIT (1980) 125 ITR 713 (SC) was pleased to hold that the assessing officer is duty bound to confront the material collected by him to the assessee. The Hon’ble Supreme Court again 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: 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.” 16.02 Similar view was again taken by the Hon’ble Supreme Court, again, in the case of AyaaubkhanNoorkhan Pathan vs. The State of Maharashtra and Ors., 2013 AIR 58 (SC), Hon’ble Gujarat High Court in the case of thePrincipal Commissioner of Income Tax Ahmedabad and Ors. vs. KanubhaiMaganlal Patel 2017 (3) TMI 271 (Guj.) , 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.) , Hon’ble Gujarat High Court, again, in the case of the CIT vs. Supertech Diamond Tools Pvt. Ltd. 2013 (12) TMI 1529 (Guj.) ,Hon’ble Delhi High Court in the case of the Commissioner of Income Tax vs. Ashwani Gupta (2010) 322 ITR 396 (Del.) ,Hon’ble Gujarat High Court in the case of the ACIT vs. Govindbhai N. Patel 2013 (8) TMI 239 (Guj.), Hon’ble Delhi High Court in the case of the CIT vs. DhrampalPremchand Ltd. (2007) 295 ITR 105 (Del.),,Hon’ble Delhi High Court, again, in the case of the CIT vs. S.M.Aggarwal(2007) 293 ITR 43 (Del.) ,Hon’ble Bombay High Court in the case of the CIT-13 Vs. M/s. Ashish International 2011 (2) TMI 1506 (Bom.) ,Hon’ble Gujarat High Court, again, in the case of the Commissioner vs. Motabhai Iron and Steel Industries 2014 (10) TMI 723 (Guj.) ,Hon’ble Rajasthan High Court in the case of the CIT vs. S.C. Sethi (2007) 295 ITR 351 (Raj.) , and Hon’ble Rajasthan High Court in the case of the CIT vs. Smt. Sunita Dhadda 2017 (7) TMI 1164 (Raj.), by taking into consideration the relevant case laws pronounced in various parts of the country, has also allowed the appeal of the assessee on the ground that the assessee was not given any opportunity of cross-examination of the persons whose statements were recorded and relied upon. Such an Order of the Hon’ble Rajasthan High Court has been upheld by the Hon’ble Supreme Court in CIT vs. Smt. Sunita Dhadda 2018 (3) TMI 1610 (SC) by dismissing the SLP of the Department. 16.03 In view of the aforesaid judicial pronouncements, it is submitted that the impugned addition of Rs.20,02,67,817/- so made by the ld. AO deserves to be knocked down on this legal ground alone. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 51 of 110 17.00 Your Honours, in this context, it is submitted that the learned AO was not justified in invoking the provisions of s.69C of the Act in the case of the assessee. It is submitted that it is an undisputed fact that in the case of the assessee, all the transactions of purchases carried out by the assessee, which have been held by the ld. AO as non-genuine or bogus, were fully recorded in the regular books of account maintained by the assessee in its ordinary course of business. The purchases so made are also duly reflected in the audited financial statements of the assessee for the relevant previous year [kindly refer PB Page no. 70 to 110], and based upon such audited financial statements only, the assessee had furnished its original return of income under s.139(1) and as also, under s.153A of the Act. 18.00 Your Honours, the provisions of section 69C of the Act come into motion only when an assessee in any financial year has incurred any expenditure and he offers no explanation about the sources of such expenditure or part thereof or the explanation offered by him is not satisfactory, in the opinion of the assessing officer then the amount covered by such expenditure or part thereof may be deemed to the income of assessee for such financial year. For a ready reference of Your Honours, the provisions of s.69C of the Act are being reproduced as under : “69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year : Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.” 18.01 On a plain reading of the provisions of s.69C of the Act reproduced hereinabove, one may note that these provisions can be set into motion only when the following two conditions are triggered i.e. (i) an assessee has incurred some expenditure which have not been found recorded in his books of account and; (ii) if such expenditure are recorded but the assessee fails to offer any explanation about the sources of such expenditure or the explanation offered by the assessee is not found satisfactory in the opinion of the assessing officer. Your Honours, in the instant case, undisputedly, the expenditure relating to the purchases were duly recorded in the regular audited books of account of the assessee. Now, as regard to the sources of the incurrence of such expenditure towards purchases, it is submitted that the sources wherefrom the assessee made payments against such purchases are also duly recorded in regular books of account of the assessee. It is submitted that such books of account were produced by the assessee, on several IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 52 of 110 occasions, before the search party, before the special auditors and as also, before the learned AO. 18.02 Your Honours, on a verification of the books of account of the assessee along with the copies of the bank statements furnished by the assessee, the learned AO could have verified that all the payments against purchases were made by the assessee to the suppliers of the goods through banking channels only. From such books and bank statements, the learned AO could have also verified that on each and every occasion, before making the payment to the suppliers, the assessee was having sufficient balance in its bank accounts. Further, from the books of account and bank statements the learned AO could have also noted that the goods purchased by the assessee from various parties were sold by it to various other parties and out of the sales realization made from various parties, which invariably took place through banking channel only, balances got accumulated in the bank accounts of the assessee which became the sources of making payments to suppliers. In nutshell, the payments against purchases were to be made by the assessee against the sales proceeds of the sales. It shall be worthwhile to note that the entire sales, which have given rise to receipt of sum in the bank accounts of the assessee, are duly recorded in the audited books of account of the assessee and the assessee has also suffered due tax on such sales proceeds. In such circumstances, it will be appreciated by Your Honours that the entire sources of the expenditure, being purchases, are fully explained and duly supported by the documentary evidences. In such circumstances, the provisions of s.69C of the Act ought not to have been invoked in the case of the assessee. 18.01 Your Honours, the Hon’ble ITAT “H” Bench, Mumbai in the case of M/s. Fancy Wear vs. Income Tax Officer Ward-24(3)(1) in Appeal No. ITA No.1596/Mum/2016 hasdeleted the entire addition made by the assessing officer, on account of bogus purchases under s. 69C of the Act by concluding that the basic pre-condition for invoking the provisions of s.69C is that the expenditure incurred by the assessee should be out of his books of account maintained. A copy of the aforesaid judgment is placed at Page No 312 to 321 of our Paper Book. 18.02 Your Honours, the Hon’ble ITAT Mumbai Bench, Mumbai also in the case of Parekh Corporation UI Building & Parekh Distributors UI Building vs. Assistant Commissioner Of Income Tax (2012) 32 CCH 0129 (Mum. Trib.), held as under: “.... In so far as the application of 69C is concerned, we find that the same cannot be attracted because section 69C applies here in any financial year and assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, of by the assessee is not satisfactory. It is then that the amount covered by such expenditure or part thereof is deemed as income of the assessee for such financial year. The bedrock for making an addition under section 69C is that there must have been some expenditure incurred by the assessee, the source of which is not disclosed. If our such expenditure is recorded in the books of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 53 of 110 accounts, there cannot be any reason to invoke the provisions of section 69C of the Act. In that view of the matter is it is held that provisions of section 69C were strongly restore by the AO for making this addition.”[Emphasis Supplied] A copy of the judgment of the Hon’ble ITAT Mumbai Bench, Mumbai, is placed at Page No 322 to 329 of our Paper Book. 18.03 The Hon’ble High Court of Gujarat in case of Sajani Jewels vs. DCIT (2016) 241 Taxmann 0383 (Guj.), at para (12) was pleased to hold that when the payments for purchases have been made through cheques the provisions of s.69C cannot be invoked. A copy such judgment is placed at Page no. 330 to 334 of our Paper Book. 18.04 The Hon’ble Bombay High Court in the case of Babulal C. Borana vs. ITO (2006) 282 ITR 252 (Bom.) was also pleased to hold that in respect of the purchases which are duly recorded in the books of account of an assessee, the provisions of section 69 cannot be invoked. 19.00 Your Honours, without prejudice to the above, yet from another angle, in the present case the invocation of provisions of s.69C was not warranted. It is submitted that here the case of the AO is that the assessee did not carry out any actual trading activity and the purchases so shown by the assessee in its books of account are not genuine. Without accepting the findings of the learned AO, it is submitted that incurrence of some expenditure is sine qua non for invoking the provisions of s.69C of the Act and if according to the AO himself, no expenditure was actually incurred, then the question of explaining its sources by the assessee and making of any addition under s.69C of the Act does not arise. 20.00 Your Honours, in the instant case, the learned AO has made an addition of Rs.20,02,67,817/- in the assessee’s income by holding the entire purchases shown by the assessee in its books of account as non-genuine. Now, it is submitted that as against the aforesaid purchases of Rs.20,02,67,817/-, during the relevant previous year, the assessee had also effected sales to the extent of Rs.20,46,65,353/- thereby resulting in a gross profit of Rs.43,97,536/- in the hands of the assessee. It is submitted that after claim of legitimate deductions such income was duly offered by the assessee in its return of income for taxation. 21.00 Your Honours, in the instant case, while computing the total income of the assessee, the learned AO has started the computation by taking the income of Rs. Nil shown by the assessee in its return of income furnished under s. 153A of the Act. On a perusal of the computation of total income of the assessee, as annexed to and forming part of the return filed under s. 153A [kindly refer PB page no 66 to 69], it shall be observed by Your Honours that under the head ‘Income from Business’, the assessee has shown net profit as per profit and loss account, at Rs.7,01,446/- and to such net profit after making certain adjustments on account of depreciation and inadmissible expenses, after claiming of set-off of carry forward losses, the net taxable income from such business has been shown to be at Rs. Nil only. Now, the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 54 of 110 aforesaid net profit of Rs.7,01,446/- has been taken into computation by the assessee on the basis of its audited profit and loss account for the assessment year under consideration [kindly refer PB page no 70 to 110]. On a perusal of such audited profit and loss account, it shall be observed by Your Honours that in such profit and loss account, the assessee had shown sales amounting to Rs.20,46,65,353/- as its income from the business. It is submitted that out of such income, the assessee claimed total expenditure and depreciation aggregating to a sum of Rs.20,39,63,907/- and after claiming such expenditure, net profit for the relevant previous year, has been shown to be at Rs.7,01,446/-, as shown in the computation of income. It would be worthwhile to note that the aforesaid expenditure of Rs.20,39,63,907/- were consisting of purchase expenditure of Rs.20,02,67,817/-, which have been considered by the learned AO as non-genuine and in respect of which the impugned addition has been made. From the above discussion, it is manifest that corresponding to the purchases, qua which the addition has been made by the learned AO, the assessee had shown sales in its books of account. However, while computing the income of the assessee, the learned AO has duly taken into consideration the amount of income by way of sales shown by the assessee in its audited profit and loss account but has disregarded the entire purchases which were corresponding to such sales. Such an approach of the learned AO has resulted into making the same addition twice. It is submitted that the learned AO either not to have disturbed the trading results as shown by the assessee in its audited books of account and if he chose to disturb the same, the same ought to have been disturbed completely i.e. by disregarding both purchases and sales while making the computation of income. Although, in the body of the assessment order, at many places, the learned AO has given a categorical finding that the sales were not found to be genuine by him but while computing the income of the assessee, he conveniently and for the reasons best known to him, escaped to exclude such income from sales which was already incorporated in the income shown by the assessee in its return of income. It shall be appreciated by Your Honours that without making any purchases the assessee could not have made any sales. It is therefore, if it is presumed that the purchases were not genuine and on such presumption, the additions are made then correspondingly, it ought to have been held that the sales, corresponding to such purchases, are also not genuine. Consequently, the learned AO ought to have recasted the trading and profit and loss account of the assessee, at his own, by giving effect to his findings. Had the learned AO, undertook such exercise, then instead of there being any net profit there would have resulted a net loss of Rs.36,96,090/- in the hands of the assessee. In support of such assertion, we are submitting herewith a copy of the recasted trading and profit & loss account of the assessee for the relevant previous year, in which all the transactions related to the trading business have been excluded, is placed at Page no. 335 of our Paper Book. In nutshell, having assessed the assessee in respect of the alleged bogus sales recorded in the books of account, there was absolutely no justification for the ld. AO to make any addition in the assessee’s hands on account of alleged bogus purchases. 22.00 Your Honours, in the instant case, the assessee has not only maintained financial books of accounts on regular basis, but, has also maintained quantitative details in respect of each and every receipt and issue IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 55 of 110 of the goods. It is submitted that the assessee has kept a meticulous record of each and every details of the quantity of goods purchased and as also, each and every details of the quantity of the goods sold. Such quantitative details, kept in the Tally Form, were duly found by the search party during the course of the assessment proceedings and were also produced before the Special Auditors and the ld. AO. It is submitted that neither the Special Auditors nor the ld. AO found any defect or discrepancy in maintenance of such quantitative details. It is further submitted that based upon such quantitative details maintained by the assessee, the Tax Auditors, in their Report given in Form No. 3CD, have also furnished the quantitative details of purchases and sales made by the assessee, during the relevant previous year, in the Schedule ‘H’ of the Tax Audit Report for the relevant year [kindly refer PB Page no 70 to 110]. On a perusal of the quantitative details, it shall be observed by Your Honours that the entire quantity of the goods purchased by the assessee have subsequently been sold by it. It would thus be appreciated that without there being any purchase of goods, there could not have been any sales of goods and vice- versa. In such circumstances, having assessed the assessee in respect of the quantities of goods sold, the ld. AO was not correct in his approach in disregarding only one limb of such trading transactions i.e. the purchases, without considering that both the transactions of purchases and sales are inter linked and inter laced with each other. 23.00 Your Honours, in the instant case, both the learned Special Auditors as well as the learned AO, in their respective report and assessment order, at many places have given a clear finding that according to them, both the transactions of purchases and sales as recorded by the assessee in its books of account are fictitious, non-genuine and bogus. Both the Authorities have also given a categorical finding that, in fact, the assessee had not carried out any business activity during the relevant previous year. For our above assertion, kind attention of Your Honours is invited to page no. 32 of para (9) of the impugned assessment order in which the learned AO, inter-alia, has reproduced the show-cause notices issued by him. On a perusal of the show- cause notice dated 19-07-2019, it shall be observed by Your Honours that the learned AO has averted the assessee regarding the comments of the Special Auditors. The learned AO has stated as “the Auditors has further remarked that from the overall examination of the books of account it appears that no genuine business activity has been carried out. In other words Purchases as well as Sales are bogus and there is no connection between them”. The learned AO, again at para (9.6) at page no. 36 of the order, stated that both sort of the parties, from whom the assessee shown to have purchases as well as sales, were found to be just paper concerns. Again at para (9.14) at page no. 46 of the order, the learned AO has given a finding that the sales of the assessee are bogus. At para (9.15) at page no.46 of the order, the learned AO has completely disregarded the sales shown by the assessee, to one M/s. Sara Cattle Feeds Pvt. Ltd., in its books of account as bogus by holding such concern as a paper concern. Further at para (9.20), by producing the statement of one Mr. Sumit Garg of M/s. Sumit&Sumit Sales, to whom no trading transaction was carried out by the assessee, the learned AO has taken a stand that sales shown to such M/s. Sumit&Sumit Sales are non-genuine. Furthermore, at para (9.25) at page no. 57, the learned AO himself has given IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 56 of 110 the details of alleged sales/ purchase transactions undertaken by the assessee in the various assessment years which inter-alia includes the transactions relating to the assessment year under consideration. As per the details given by the AO himself, for the relevant assessment year i.e. A.Y. 2014-15, the assessee had made bogus purchases to the extent of Rs.20,02,67,817/- and had effected bogus sales to the extent of Rs.20,46,65,353/-. Again at para (9.27) at page no. 60, the learned AO has given a finding that the sales-purchase transactions are fake and those seen in the seized tally data are bogus and mere accommodation entries. In such para again, the findings of the Special Auditors to the effect that no genuine business activity of trading was carried out by the assessee and both the transactions of sales and purchases are mere book entries, have been referred to. Further, in all the show-cause notices, for all the assessment years, as reproduced in the assessment order it has been alleged that the assessee did not carry out any genuine business activity of trading and both the transactions of sales and purchases are mere book entries. Finally, while making the impugned additions, the learned AO at para (9.33) at page no. 68 of the impugned order has again given a finding that the transactions of sales and purchases, both, are bogus. In other words, it is explicitly apparent that the case of the learned AO is that the assessee had not carried out any genuine business activity and the transactions of both, sales and purchases are bogus. 24.00 Your Honours, according to the assessee all the trading transactions of purchases and sales, as recorded in its regular audited books of account are true and correct and those were actually carried out, as submitted and established in the earlier paras. However, if despite such fact, without any admission whatsoever, merely for the sake of presumption, it is presumed that the assessee has not actually carried out any business activity at all and all the purchases and sales are bogus, then in such cases, merely on the basis of entries made in the books of account no income, whatsoever, in the hands of the assessee can be assessed in accordance with the law. It is submitted that law does not contemplate to fasten liability of tax merely on the basis of book entries, but, the law requires a person to pay legitimate tax on the real income as envisaged under s. 4 of the Act. It is a settled law that tax has to be levied on real income only and not on imaginary or hypothetical income. If the transactions recorded in the books of account are disbelieved then again, on the basis of such books of accounts, no addition can be made. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Rajasthan in the case of Malpani House of Stones vs. CIT (2017) 395 ITR 0385 (Raj.HC). 24.01 Your Honours, it is a trite law that any document or books of account should either be accepted fully or should be rejected in its entirety. If the assessing officer disbelieves one side of the transaction claimed to have taken placei.e. purchases then, at the same breath, he cannot presume that the other part of the transaction involving the sale of the goods claimed to be so purchased as aforesaid, was correct or for that matter, any proceeds against such sales was ever received by the assessee. This being the position, if the assessing officer chose to disbelieve the transactions of purchases as recorded in the books IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 57 of 110 then, he cannot rely upon the other part of the transaction i.e. the receipt of any sum claimed by the assessee out of the sales proceeds against the purchases so made. In such circumstances, the ld. AO ought to have completely disregarded the books of account and all the transactions recorded therein. In such circumstances, there could not have been any occasion for the ld. AO to make any addition under s.68 of the Act in respect of the part of the sales proceeds. For such proposition, reliance is placed on the decision of the Hon’ble High Court of Gujarat in the case of CIT vs. Tirupati Construction Co. (2014) 90 CCH 0466 (Guj. HC). Reliance is also placed on the following judicial pronouncements: i) Biren V. Salva vs. ACIT (2006) 100 TTJ 1006 (Mum) ii) Glass Lines Equipment & Co. Ltd. vs. CIT (2002) 253 ITR 454 (Guj.) iii) Mehta Parikh & Co. vs. CIT (1956) 30 ITR 181 (SC) iv) Navjivan Oil Mill vs. CIT (2001) 252 ITR 417 (Guj.) v) Chander Mohan Mehta vs. ACIT (Inv.) (1999) 65 TTJ (Pune) 327 vi) Kantilal& Bros. vs. ACIT (1995) 51 TTJ (Pune) 513 25.00 Your Honours, as has been demonstrated by drawing a recasted Trading and Profit & Loss Account [kindly refer PB Page no 335], if the theory of the ld. AO as regard to holding both purchase and sales transactions as bogus is upheld, there would result a net loss of Rs.36,96,090/- to the assessee as per its recasted Profit and Loss Account as against the net profit of Rs. 7,01,446/- shown in the Audited Profit and Loss Account for the relevant previous year. It is therefore submitted that either the entire theory of the ld. AO deserves to be discarded else, the ld. AO be directed to compute the income of the assessee in accordance with the recasted Trading and Profit & Loss Account only. 26.00 Your Honours, it is submitted that the impugned addition of Rs.43,97,536/-,so made by the learned AO by holding the difference in alleged bogus sales and alleged bogus purchases, as shown by the assessee itself in its books of account, as assessee’s unexplained cash credit under the provisions of s.68 of the Act, suffers from the serious legal deficiency inasmuch such addition has been made by the learned AO merely by making a reference to the audited books of account of the assesseeitself. It is submitted that on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year under consideration and therefore, without having recourse to any seized incriminating document or material, no addition can be made in respect of the discrepancies found in the books of account of the assessee. It is further submitted that in respect of the subject issue, the assessee has made its detailed submission in ground no. 4 in Appeal No. 10326/2019-20 for A.Y. 2013-14and therefore, in order to avoid repetition, our submission made in the aforesaid ground may kindly be considered by Your Honours at the time of adjudicating the issue on hand. 27.00 Your Honours, without prejudice to the above, it is submitted that the impugned addition of Rs.43,97,536/- has been made by the learned AO merely on the basis of his guess work, conjectures and surmises. It is IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 58 of 110 submitted that no addition was called in view of the facts and circumstances of the case as discussed in the ensuing paras. 3.00 Your Honours, it is submitted that the impugned amount of Rs.43,97,536/- has been arrived by the learned AO by deducting the entire purchases of Rs.20,02,67,817/- made by the assessee during the relevant previous year, from the total sales of Rs.20,46,65,353/- effected by the assessee during the relevant previous year. In other words, the learned AO has made the impugned addition in respect of the gross profit earned by the assessee on the alleged bogus purchase and sales transactions. 28.00 Your Honours, the ld. AO has indirectly made the addition of entire sales amount shown by the assessee in its audited books of account inasmuch, at the first instance, the ld. AO made an addition of Rs.20,02,67,817/- in the assessee’s income, under s. 69C of the Act, by holding the entire purchases of the assessee as bogus and then, in the second instance, he added the Gross Profit of Rs.43,97,536/- shown by the assessee in its books of account on the sales realization of the aforesaid purchases. Thus, through two separate additions, the ld. AO has made gross addition of Rs.20,46,65,353/- which is equivalent to the sales amount shown by the assessee in its books of account. It is a settled law that whatever could be the nature of discrepancy in books of account, the entire sales cannot become subject matter of tax. For such proposition reliance is placed on the decision of Hon’ble Delhi Bench of the ITAT in the case of Ambika Steels Ltd. vs. DCIT (2008) 305 ITR(AT) 0049. 28.01 Your Honours, the Hon’ble Gujarat High Court in the case of Pr. CIT vs. TejuaRohitkumar Kapadia 2017 (10) TMI 729 (Guj) has dismissed the appeal of the Revenue by holding that when the purchases made were duly supported by bills and payments were made through account payee cheques and there was no evidence to show that the amount was recycled back to the assessee. A copy of the said judgment is placed at Page No. 336 & 337 of our Paper Book. 28.02 Reliance is also placed on the decision of the Hon’ble Delhi High Court in the case of Pr. CIT vs. Nandan Auto Tech Ltd. 2017 (9) TMI 1293 (DelHC). 29.00 Your Honours, during the year under consideration, the assessee had made purchases of Rs.20,02,67,817/- and against the same the assessee has also made corresponding sales of Rs.20,46,65,353/-. The party-wise details of the purchases of Rs.20,02,67,817/- have already been given by us in the earlier para, supra. Now, the necessary details of customer-wise sales of Rs.20,46,65,353/- are being given as under : [Amount in Rs.] S. No. Name of the customer Amount 1 M/s. Amit Refined Pvt. Ltd. 1,36,70,250 2 M/s. Ganesh Trading Company 2,55,12,500 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 59 of 110 3 M/s. Ganpati Corporation 2,71,00,000 4 M/s. GoverdhanAgro Foods 89,20,000 5 M/s. J.P. Traders 1,55,60,000 6 M/s. Padmavati Export 38,40,000 7 M/s. Pitambara Export 4,31,06,629 8 M/s. Rajkumar & Co. 19,50,000 9 M/s. Rokadia Trading Co. 30,00,000 10 M/s. Sara Cattel Feed 3,01,05,974 11 M/s. Shree Krishna Trading Co. 2,96,00,000 12 M/s. Shree Sai Trading Co. 23,00,000 Total 20,46,65,353 6.00 Your Honours, it is submitted that the learned AO while making the impugned addition of Rs.43,97,536/- has held the entire purchases and sales made/effected by the assessee as bogus or non-genuine. It is submitted that such an allegation of the learned AO is completely based upon his own guesswork, surmises and conjectures. The learned AO for leveling the allegation as aforesaid has not brought on record any cogent or corroborative evidence to substantiate his allegation. 7.00 Your Honours, the foundation of making the addition of Rs.43,97,536/- are same to that of the findings noted by the learned AO in respect of the alleged bogus purchases. It is submitted that the assessee while making its submission on ground nos. 5(c) to 5(f) has given a point-wise rebuttal on each and every finding and allegation of the learned AO on the subject issue of alleged bogus sales and purchases. Thus, in order to avoid repetition, our submission made on the subject issue in present ground nos. 5(c) to 5(f) of the appeal may kindly taken into consideration while adjudicating the issue on hand. 8.00 Further, as regard the sales of Rs.20,46,65,353/-, it is submitted that the entire sales effected by the assessee are genuine and the same are duly recorded in the audited books of account of the assessee. Further, the entire consideration against sales of Rs.20,46,65,353/- has been received by the assessee through banking channels only. It is further submitted that the entire sales transactions have duly been confirmed by the customers by issuing a confirmation letter to the assessee. Copies of the confirmation letters duly signed by the customers are placed at Page No. 244 to 269 of our Paper Book. On a perusal of the confirmation letters, it would be appreciated by Your Honours that the respective customers have confirmed the transactions undertaken by them with the assessee and thus, the genuineness of sale transactions gets established beyond all doubts. It is submitted that as the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 60 of 110 assessments were made at the fag end of the limitation period, the assessee could not procure and produce the aforesaid confirmation letters which are being submitted for the first time before Your Honours. It is submitted that since such confirmation letters are quite vital and significant to adjudicate the issue on hand and therefore, in order to meet the ends of justice, the aforesaid documents may kindly be admitted at your end as additional evidences, in accordance with Rule 46A of the Income-Tax Rules, 1962. An application under Rule 46A to this effect, with an additional copy to the concerned AO, is being made separately. 7.01 Your Honours, it is submitted that the allegation made by the learned AO that the sales made by the assessee are bogus as the same are made to dummy paper entities, is completely baseless and is not supported with any corroborative evidences. It is submitted that all the customers to whom the assessee have made sales are genuine and the same are regularly assessed under various prevailing Tax Laws. In order to counter the allegation of the learned AO to the effect that the customers are dummy paper entities, we are submitting herewith the following documentary evidences to establish the identity of the customers: (i) Copies of the Registration Certificates of the respective customers duly obtained by them under the M.P. VAT Act, 2002; (ii) Copies of VAT returns of the customers for the relevant previous year; (iii) Copies of assessment orders framed in the cases of customers by the Commercial Tax Department All the aforesaid documents are placed at Page No. 338 to 446 of our Paper Book. 7.03 Your Honours, on a perusal of documentary evidences furnished hereinabove, it would be appreciated that the identity of the customers to whom the assessee had made sales is established beyond all doubts and therefore, the allegation leveled by the learned AO to effect that the sales made by the assessee are bogus deserves to struck down. 8.00 Your Honours, without prejudice to the above, it is submitted that the learned AO has grossly erred in making the impugned addition of Rs.43,97,536/- in the assessee’s income on account of unexplained cash credit under s.68 of the Act without considering the material fact that the assessee in its audited books of account has already shown both the transactions of sales and purchases and the assesseecompany itself has shown the difference on such transactions, being the gross profit, in its audited financial statements. Further, the assessee on such gross profit has also paid the due tax after claiming the legitimate deductions and allowances in respect of the business expenditures incurred by it in its ordinary course of business. Thus, in such circumstances, the learned AO was not justified in making the impugned addition of Rs.43,97,536/- because such addition has eventually resulted into taxing the same income twice which is not permissible in the eyes of the law.For such proposition, reliance is placed on the decision of the Hon’ble Chandigarh Bench of the ITAT in the case of Bansal Rice Mills Vs. ITO (2001) 20 CCH 0134 Chd-Trib. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 61 of 110 9.00 Your Honours, the ld. CIT(A) has discussed the subject issues at a great length at page no. 82 to 146 of the impugned appellate order. At para (4.5.1) the ld. CIT(A) has narrated the facts of the case whereas, at para (4.5.2), the ld. CIT(A) has summarized the findings given by the ld. AO. At para (4.5.3), the ld. CIT(A) has reproduced the written submission of the assessee made before him. At para (4.5.4), the ld. CIT(A) has discussed the various documentary evidences furnished by the assessee before him. From para (4.5.5) at page no. 135 to para (4.5.12) at page no. 144, the ld. CIT(A) has given his detailed finding on the subject issue. At para (4.5.13), the ld. CIT(A) has held that the ld. AO was required to afford an opportunity of cross examination to the assessee. At para (4.5.14) at page no. 145, the ld. CIT(A) has given a categorical finding that when according to the AO, no actual business activity was carried out by the assessee and both the transactions of purchases and sales were bogus, then under the Real Income theory, no addition was called for. At para (4.5.15) at page no. 145 & 146, the ld. CIT(A) has given a finding that the expenditure which are duly recorded in the books of account cannot be subject matter of addition under s. 69C of the Act. It is submitted that the ld. CIT(A) has given the finding after an in-depth analysis of the facts and circumstances of the case, assessment order, various documentary evidences furnished by the assessee and as also, the explanation of the assessee made before him, no fault deserves to be found in his findings and accordingly, same deserve to be upheld. Consequently, the various grounds raised by the Revenue on this count deserves to be Dismissed.” 10.1 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, Remand Report of the AO, Rejoinder of the assessee and also gone through the judgments and decisions referred to and relied upon by both the sides. Revenue is aggrieved with the action of the ld. CIT(A) in deleting both the additions made by the AO in the assessee’s income for various assessment years, on the ground of bogus purchases u/s. 69C and as also, on the ground of difference between the bogus purchases and bogus sales u/s. 68 of the Act. 10.2 We find that in the instant case, the AO has made the subject additions in the income of the assessee (i) on the basis of the Report given by the Special Auditors; (ii) on the basis of non-availability of any document or stock-in-trade regarding to the trading business in the premises of the assessee during the course of the search u/s.132 of the Act; (iii) on the basis of statement of some of the employees of a group company of the assessee; (iv) on the basis of some field inquiry got conducted by the AO; on the basis of some statement of the proprietor of a concern titled as ‘M/s. Sumeet & Sumeet’ and also of some Mr. Ashish Kacholiya of M/s. Shanti World Wide. However, we find that in the entire body of the assessment order, for making the subject additions, the ld. AO has not made reference of any single incriminating material or document found or seized during the course of the search u/s. 132 of the Act, in any of the premises of the assessee company or its directors. Thus, as far as the additions amounting to Rs. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 62 of 110 20,02,67,817/- and Rs. 43,97,536/- respectively made by the AO on the grounds of bogus purchases and difference between the bogus purchases and bogus sales, for A.Y. 2014-15 are concerned, the same are not sustainable in view of the findings given by us while adjudicating the Ground No. 1 of the Assessee for A.Y. 2013-14 and A.Y. 2014-15, supra. We have already held that in the assessment proceedings,carried out u/s. 153A of the Act in pursuance of a search u/s. 132, for a completed and non abated assessment year, no addition can be made without having recourse to any incriminating material found or seized during the course of the search. Thus, for A.Y. 2014-15, in our considered view, the additions so made by the AO are liable to be deleted on this legal count alone. 10.3 Now, coming to the merits of the additions made by the AO for all the relevant assessment years under appeal, we find that in the instant case, the assessee has filed voluminous Paper Book, separately, for various assessment years under appeals containing 242 pages, 488 pages, 557 pages, 477 pages and 467 pages respectively for A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18. We find that in its Paper Book for A.Y. 2014-15, in support of its contention and written submission on the subject issues, the assessee has furnished the copy of (i) purchase and sales register; (ii) copy of its bank book in support of transactions having been taken place through banking channel; (iii) copies of the bank statements of the assessee for the relevant period in support of the transactions recorded in the bank book maintained by it; (iv) copies of the ledger accounts of the sellers/buyers in the books of account of the assessee; (v) copy of the assessment order under the M.P. Vat Act, 2002 of the assessee; (vi) copy of the date wise stock register maintained by the assessee; (vii) copy of the Affidavit of Shri Ashish Kacholiya retracting his earlier statement and confirming the transactions of sales to the assessee; (viii) copy of Master Data downloaded from the Official Webiste of the MCA of Sara Cattle Foods Pvt. Ltd. for establishing its identity; (ix) copies of the assessment orders and copies of the registration certificates of the suppliers from whom the assessee made purchases of the goods; (x) copies of the assessment orders and copies of the registration certificates of the customers to whom the assessee made sales of the goods; (xi) copy of the recasted trading and the profit and loss account drawn by eliminating both the purchases as well as the sales from the audited trading and profit & loss account; and (xii) copies of certain judicial pronouncements upon which the assessee places reliance. The assessee furnished the similar documents, in its Paper Book for other assessment years too. 10.4 We find that the material facts of the assessee’s case for all the assessment years, in respect of which the Revenue has raised the captioned grounds in the appeal memos for the concerning years, are materially same, except with the variation of amount and parties involved. The AO has also given common findings in respect of all such assessment years. Further, the written submissions of the assessee are also almost similar. In such IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 63 of 110 circumstances, we consider it necessary to take the A.Y. 2014-15 as the lead year for giving our findings in the subsequent paras. We find that in the computation of income furnished along with the return of income filed by the assessee for A.Y. 2014-15, u/s. 153A of the Act, the assessee has shown an income of Rs. 12,99,104/-, before claiming set-off of carry forward unabsorbed depreciation of earlier years. We find that in respect of such business, the assessee has maintained the regular books of account and has also got such books of account duly audited under the Companies Act, 1956 as well as u/s. 44AB of the Act. Copies of the Audit Reports obtained by the assessee under the Companies Act, 1956 and u/s. 44AB of the Act, along with copies of the Audited financial statements have been filed by the assessee before us. From the Tax Audit Report for A.Y. 2014-15, as placed at page no. 70 to 88 of the asssesse’s Paper Book for A.Y. 2014-15, we find that in such report, at page no. 71, the assessee has been shown to have carried out the business of trading in Soya DOC. The details of books of account maintained by the assessee and as also those examined by the Tax Auditors have been given respectively at clause no. [11(b)] and [11(c)] of the Tax Audit Report. From the clause [11(c)] of the Tax Audit Report, we find that the Tax Auditors have reported that they have examined the cash book, bank book, journal, purchase register, sales register, stock register, ledger, bill, vouchers and bank statements etc. We find that neither the Statutory Auditors appointed uner the Companeis Act,1956 nor the Tax Auditors have reported any discrepancy or defect either in the maintenance of books of account by the assessee or the system of accounting observed by the assessee. We also find that in Schedule ‘H’ of quantitative details, annexed to and forming part of the Tax Audit Report, the Tax Auditors have duly furnished the quantities of the purchases and sales of the goods and as also purchases and sales of shares. From such quantitative details, we also find that the assessee was not having any stock of Soya DOC, either at the beginning or end of the financial year. Further, from the copy of the Audited Profit and Loss Account of the assessee for the year ended 31/03/2014, we find that the assessee has shown sales and purchases (exluding purchases of shares) amounting to Rs. 20,46,65,353/- and Rs. 20,02,67,817/- respectively. 10.5 We find that during the course of the assessment proceedings, the assessee had furnished complete details of purchases and sales by way of furnishing the copies of its purchase register and sales register for the relevant year. The copy of the complete purchase register and copy of the complete sales register have also been furnished by the assessee before us at page no.123 to 158 of its Paper Book for A.Y. 2014-15. From the purchase register, we find that the assessee has given complete details in respect of each and every purchases comprising of total purchases of Rs. 20,02,67,817/-. Likewise, in the sales register also, we find that the assessee has furnished the complete details of sales for the entire sales amount of Rs. 20,46,65,353/-. From the purchase register, we find that in such register, the assessee has maintained all the necessary details such as IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 64 of 110 the date of purchase, name of the supplier, invoice no. and date of the invoice as issued by the supplier, TIN/sales tax no. of supplier, quantity of the goods purchased, rate and purchase amount. In the similar manner, from the sales register we could gather that the assessee has maintained all the necessary details in respect of the sales transactions too, such as sales invoice no. serially issued by the assessee to the customer, date of the sales, name of the customer, TIN/sales tax no. of customer, quantity of goods sold, rate and sales amount. From both the registers, we find that the assessee has shown to have made purchases and sales only from those parties who were having TIN/sales tax no. From a perusal of the copy of the stock register for the whole relevant year and its verification from the purchase register and sales register furnished before us, we find that in respect of each and every purchase and sales transaction, the assessee has made necessary recording in its stock register so maintained. However, from such stock register, we find that the AO has rightly given a finding that the assessee was not having any closing stock and on every occasion, the sales of the goods have been found to have been made on the very same date of the corresponding purchase. We find that the assessee itself, in its submission before the AO had explained that its modus operandi was that first, it used to receive the order of supply of goods from any customer for the required quantity and at the stipulated rate and only after receipt of the sales order from a customer, it used to procure equivalent quantity of goods from the parties known to it, again, at the agreed rate by maintaining some nominal margin of profit. As per the terms of purchase, according to the assessee, the supplier was supposed to deliver the entire quantity of goods to the door step of the customer of the assessee by raising sales invoice in the name of the assessee only and thereafter, the assessee used to raise its own sales invoices upon its customers by adding its own margin of profit. According to the assessee, in such circumstances, it was not required to get involved into logistic of movement of goods and it was therefore, it neither claimed any expenditure under the head transportation/ loading or unloading expenses nor, any vouchers regarding such expenditure were found in its business premises during the course of the search. In our considered view, merely because the assessee was not found to be maintaining any stock-in-trade, it cannot be concluded that the assessee was not carrying out any trading activity. 10.6 We have also carefully perused the copies of the ledger accounts of the sellers/buyers in the audited books of account of the assessee, as placed at page no. 244 to 269 of the assessee’s Paper Book for A.Y. 2014-15 and we find that such ledger accounts have duly been signed by the concerning parties. From such ledger accounts, we also find that against all the transactions of sales, the assessee had received consideration through banking channels and likewise, against all the transactions of purchases, the assessee had made payments, again, through banking channels only. For the veracity of the receipts of funds from customers and payments to the suppliers, through banking channels, we have duly perused the relevant IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 65 of 110 bank book maintained by the assessee, for the whole year, a copy whereof has been placed by the assessee at page no. 159 to 184 of its Paper Book for A.Y. 2014-15. Further, for verifying the veracity of the transactions recorded in the bank book, we have also gone through the copies of its bank statements for the relevant year as placed at page no. 185 to 235 of the assessee’s Paper Book for A.Y. 2014-15. From a perusal of the bank book and the bank statements of the assessee, we also find merit in the contention of the assessee that it was not required to deploy its substantial capital for its running business for the very reason that on every occasion, the payment against purchase consideration has been made by it after realization of the sales proceeds. 10.7 Wealso find that the very existence of the various suppliers and various customers of the assessee is evident from the the copies of assessment orders and registration certificates under the M.P. Vat Act, 2002 along with Vat returns of the suppliers and customers, as placed at page no. 287 to 307 of the assessee’s Paper Book for A.Y. 2014-15. In our considered view, all these documents establish the claim of the assessee that the transactions of purchases and sales were duly carried out by it only with the registered dealers. On careful perusal and verification of all the aforesaid documentary evidences, as were also filed by the assessee before the AO as well the ld. CIT(A), we are of the considered view that prima facie, the assessee could be able to discharge its onus of proving the genuineness of the transactions of purchases and sales. 10.8 We find that the AO has observed that the assessee is not maintaining any stock on any given date, as per the seized tally data. On this observation, we have already held in the preceding para that since the assessee was operating on the tailor made supply policy, it was not required to maintain any stock in hand. Further, for not finding any transportation bill, truck details also, the contention of the assessee is worth consideration that as the delivery of the goods used to be directly made to the customer of the assessee by the supplier of the assessee, the assessee was neither required to maintain any detail of transportation, nor, was required to incur any expenditure on this behalf. We find that the AO at para (9.10) has further averted that some of the parties from whom the assessee had claimed to have carried out the transactions of purchases and sales, were not found at the address given, upon deputation of the Inspector. However, at para (9.19), the AO has controverted his own findings by stating that the summons issued to the parties remained unattended. Thus, it can be inferred that the summons got duly served upon the parties, but, the parties did not make the compliance. We also find that the AO himself at para (9.22) has admitted that summons issued to M/s. Shanti Worldwide u/s. 131(1A) of the Act, got duly served and in response to such summons, one of the partners made statement before the investigation wing. We find substance in the contention of the assessee that the AO had issued the summons to some of the parties as per the addresses mentioned in the tally data seized, but, IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 66 of 110 subsequently, at the time of framing of the assessment, due to passage of time, addresses of some of the parties had got changed. The assessee has furnished such details of changed addresses at para (12.00) of its written submission for A.Y. 2014-15.We find that in the copies of the purchase and sales register filed before us, the assessee has duly furnished the details of TIN/sales tax number of all the parties. We also find that the assessee has also furnished the copies of assessment orders framed under the commercial tax laws and as also copies of the periodical returns under such enactments furnished by the sellers and purchasers. Further, even the assessee has shown all the transactions of purchases and sales in its periodical returns furnished under the M.P. Vat Act, 2002. We find that all the transactions relating to the receipts and payments have been carried out through banking channels only which are verifiable from the bank statements of the assessee. In our view, the AO could not bring on record any specific instance in which he found that against the cheque issued, for purchases, the assessee had received the equivalent cash from suppliers or for that matter, against the cheques received, for sales, the assessee had passed on the equivalent cash to the customers. For such proposition, we place reliance on the decision of Hon’ble High Court of Gujrat in the case of CIT vs. Kashiram Textiles Mills Pvt. Ltd. (2006) 284 ITR 61 (Guj.). We find merit in the contention of the assessee that the sellers/buyers have also confirmed the transactions by putting their signature on their respective ledger accounts in the books of account of the assessee. 10.9 We find that in the body of the assessment order, the AO has made a reference of three nos. of statements, all recorded only during the course of the search and not by the AO himself. The AO at para (9.8) of the order has reproduced the statement of Shri Vishwajeet Yadav, one of the employees of the group company of the assessee, namely, M/s. Global Metal and Energy Pvt. Ltd.. Such statement was recorded u/s. 132(4) of the Act, in the office premises of M/s. Global Realcon and the assessee. We find substance in the contention of the assessee that since, in the statement no reference of the assessee’s business has been made and therefore, such statement cannot be given any credence in the assessee’s case. Further, we find that the AO at para (9.20) has made a reference of statement of some Shri Sumit Garg, Proprietor of M/s. Sumeet & Sumeet Sales, but, again, in such statement, the question was asked from Shri Sumeet Garg regarding the business transactions with the assessee. We also find substance in the contention of the assessee that from such M/s. Sumeet and Sumeet Sales, the assessee had not carried out any trading transactions during any of the assessment years under consideration and therefore, for adjudicating the issue in hand, the statement of Shri Sumit Garg has no relevance. We find that the AO himself at page no. 57 to 59 of the assessment order has given the details of purchases and sales effected by the assessee during the A.Y. 2013-14, A.Y. 2014-15, A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18 and in none of the years, the name of M/s. Sumeet and Sumeet Sales is getting appeared. Thus, in our view, when the assessee company itself has not claimed to have IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 67 of 110 carried out any transaction with the abovenamed M/s. Sumeet & Sumeet Sales, then, the denial of any transaction by such concern can also not be viewed against the assessee. We further find that at para (9.22), the AO has made reference of statement of Shri Ashish Kacholiya, a partner of M/s. Shanti World Wide from whom the assessee had shown to have made purchases. The AO has also reproduced the copy of such statement in the body of the assessment order. In the said statement, recorded on 08/11/2016, Shri Ashish Kacholiya has denied to have carried out any supply of goods to the assessee. However, we find sufficient force in the contention of the assessee that after the search, during the course of the assessment proceedings itself, Shri Ashish Kacholiya vide his Affdivait dated 24/11/2018, duly sworn before the Notary Public, had retracted his earlier statement given u/s. 131 of the Act on 08/11/2016 and had duly confirmed that during the financial year 2013-14 relevant to A.Y. 2014-15, he had actually effected sales of 997.010 Metric Tone of Soya DOC for an aggregate value of Rs. 3,60,33,530/- and the entire payments against such sales were received by them through account payee cheques. In the retracted statement, Shri Ashish Kacholiya, stated that his statements had been wrongly been typed and his signature on such statement was obtained forcefully. He also denied to have made any statement of denial of transactions before the investigation wing. A copy of Shri Ashish Kacholiya has also been filed by the assessee in its Paper Book for A.Y. 2014-15 at page no. 283 to 285. In our considered view, although, a statement given by a third person is a good piece of evidence, but if subsequently, such statement is retracted by the person making the deposition by way of an Affdiavit and in such retraction, also specify the circumstances in which the earlier statement was given, then, without bringing any other corroborative material on record, solely on the basis of the statement given by such third person, no adverse inference can be drawn against an assessee. For such proposition we find support from the decision of the Hon’ble Gujarat High Court in the case of Kailashben Mnaharlal Chokshi vs. CIT (2008) 220 CTR 138 (GujHC). 10.10 We further find that the AO at para (9.16) averted that a concern named as M/s. Sara Cattle Feeds from whom the assessee had shown to have made sales is also a paper concern. In respect of such observation, first of all, while adjudicating the issue of purchases, the findings given as regard to the sale transactions have no bearing. Even otherwise, we find that in the case of M/s. Sara Cattle Feeds, which is having TIN as 23669092127 one order of assessment for the period from 01/04/2013 to 31/03/2014 has been framed by the Asst. Commisisoner of Commercial Tax, Indore, Division-III on 21/01/2016. We find that during the assessment year under consideration, the assessee has made transactions of purchases and sales from many parties, but, merely on the basis of findings given in respect of some of the parties, which have also not been found sustainable in terms of the discussions made hereinabove, the AO has disregarded all the transactions of purchases and sales of the assessee and that too, for all the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 68 of 110 years under appeal, under surmises and conjectures. Such an action of the AO cannot be upheld under any cannon of law. 10.11 Thus, in view of the facts and circumstances of the case of the assessee, and in view of our findings given in the above paras, we absolutely find no merit in the action of the AO in holding the entire purchases and sales transactions of the assessee as non-genuine. We find that by furnishing the various documentary evidences, the assessee could conclusively establish the genuineness of all the transactions of purchases and sales and the basis of adverse findings of the AO are based merely on guess work and suspicion. It is a settled law that suspicion, howsoever strong it might be, cannot substitute legal proof or evidences. Since, we have already held that the transactions of purchases and sales shown by the assessee are quite genuine, there does not remain any room for upholding the action of the AO in making the addition u/s. 68 of the Act, in respect of the difference between the Sales Value and Purchase Value as shown in the books of accounts. We are in agreement with the findings given by the ld. CIT(A) that since, against the sales, the assessee had genuinely received funds from its customers and therefore, in respect of entire receipts of funds, the provisions of s. 68 cannot be invoked. Even otherwise, we find that the assessee itself has shown the entire amount of receipts against sales as its revenue in the audited financial statements, and therefore, the question of making any further addition in respect of any component of such sales value does not arise. Further, all the decisions cited by the AO are distinguishable from the facts of the case of the assessee. We find that the judgment in the case of N.K. Proteins referred to by the AO is not applicable in the case of the assessee. First of all, in this case, the assessee could be able to establish the transactions of purchases beyond all doubts and secondly, in the present case, the AO has doubted both the side of the transactions viz. the purchases and as also the sales, whereas, in the case of the N.K. Proteins, only the transactions of purchases were found non- genuine and transactions of sales were found genuine. 10.12 We also find substance in the contention of the assessee that during the course of the assessment proceedings, it has relied upon some statements given by some persons, but, the opportunity of cross- examination of such persons were not afforded to the assessee. In our view, in the light of the decision of the Hon’ble Supreme Court in the case of M/s. KishanchandChelaram vs. CIT (1980)125 ITR 713 (SC) and again in the case of M/s. Andaman Timber Industries vs. Commissioner of Central Excise (2016) 15 SCC 785 (SC) it was incumbent upon the AO to provide such opportunities of cross-examination. We find that on this issue, the assessee has rightly placed reliance upon the various judicial pronouncements as cited in the written submission extracted hereinabove. 10.13 We also find substance in the contention of the assessee that the provisions of s. 69C refers to the source of the expenditure and not to the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 69 of 110 expenditure itself. In the similar circumstances, the Hon’ble High Court of Delhi in the case of CIT vs. Radhika Creation (2010) 78 CCH0423 (Del. HC) held that as the expenditure was accounted in the regular books, the source is obviously explained. The provisions of s. 69C are not applicable as there was no accounted expenditure. Further, the Hon’ble High Court of Gujrat in the case of SajaniJewellers vs. DCIT (2016) 96 CCH 0240 (Guj.HC) has held that when the purchases were made by the assessee through account payee cheques only and the same were duly recorded in the regular books of account, the provisions of s. 69C could not be invoked. 10.14 We also find full substance in the alternate plea of the assessee that in the instant case, the Special Auditors upon whose report the AO has made complete reliance, and as also the AO himself in the body of the assessment order, at various places, have categorically stated and accepted that the transactions of both the purchases and sales shown by the assessee in its books of accounts are bogus and have conclusively given a finding that in fact, the assessee has not carried out any business activity during the assessment years under consideration. In our considered view, in a case when according to the AO, no actual business activity of purchase and sales were carried out and both the sides of the transactions were alleged to be bogus or on paper only, the question of taxability of any income under any of the provisions does not arise at all. Ultimately, under the scheme of the law, tax is to be levied only on the Real Income and not on the alleged ficticious income emanated allegedly from bogus transactions. In such a situation, the expenditure having been not actually incurred, the question of invoking the provisions of s. 69C does not arise and likewise, when the transactions of receipts by themselves are doubted, the provisions of s. 68 also cannot be applied. For such proposition, we rely on the decision of the Hon’ble High Court of Rajasthan in the case of Malpani House of Stones vs. CIT (2017) 395 ITR 0385 (Raj. HC). 10.15 Accordingly, we find no infirmity in the action of the ld. CIT(A) in deleting the additions of Rs.20,02,67,817/- in A.Y. 2014-15, Rs.21,56,98,886/- in A.Y. 2015-16, Rs.29,15,83,534/- in A.Y. 2016-17 and Rs.33,40,81,325/- in A.Y. 2017-18 on account of bogus purchases as unexplained expenditure u/s. 69C of the Act and as also, in deleting the additions of Rs.43,97,536/- in A.Y. 2014-15, Rs.49,22,364/- in A.Y. 2015- 16, Rs.95,07,721/- in A.Y. 2016-17 and Rs.1,14,63,760/- in A.Y. 2017-18 on account of difference between purchases and sales as unexplained cash credits u/s. 68 of the Act.Consequenlty, the Revenue’s Ground Nos. 1 & 2 for A.Y. 2014-15 and Ground Nos. 2 & 3 for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 are hereby Dismissed. 11. Ground No. 3 of the Revenue for A.Y. 2014-15 and Ground No. 4 of the Revenue for A.Y. 2015-16, A.Y. 2016-17 and A.Y. 2017-18 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 70 of 110 11.1 Through these grounds of appeal, the revenue has challenged the action of the ld. CIT(A) in deleting the additions made by the AO on account of disallowance of interest expenses u/s. 36(1)(iii) of the Act. 11.2 Briefly stated facts of the issue, as emanated from the records, are that during the course of the assessment proceedings, the AO noted that the assessee had used its CC limit for making investment in shares of group company GMEPL and for providing interest free advances to related parties. Accordingly, vide show-cause notice dated 19-07-2019, required the assessee to furnish its explanation on the proposed disallowance of interest expenses u/s. 36(1)(iii) of the Act. In reply, the assessee, vide its letter dated 25.07.2019, furnished its detailed explanation. The assessee claimed that during the relevant previous years, it had utilized the working capital facilities obtained from the banks only for the purposes of its business of trading in food grains and food products. The AO, while framing the assessment order, averted that the assessee had not carried out reportable business activities and the assessee failed to demonstrate that the interest bearing funds have been used by it for its business purposes and the assessee failed to produce its books of account for verification. Finally, the AO made an addition of Rs.29,65,568/- in A.Y. 2014-15, Rs.61,12,977/- in A.Y. 2015-16, Rs.64,69,257/- in A.Y. 2016-17 and Rs.59,60,777/- in A.Y. 2017-18 on account of disallowance of interest expenses by holding the interest expenses incurred by the assessee as is capital expenditure. 11.3 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 it before the AO. The ld. CIT(A) reproduced the written submission of the assessee at page no. 147 to 153 of his Order. The ld. CIT(A), after considering the written submissions made by the assessee as well as the facts and circumstances of the case, made a finding that the borrowings made by the assessee were invested into the shares and the shares were held by the assessee company as Stock in Trade and therefore, the entire interest expenditure incurred on such borrowing was fully allowable. Accordingly, the ld. CIT(A) deleted the entire additionsof Rs.29,65,568/- in A.Y. 2014-15, Rs.61,12,977/- in A.Y. 2015-16, Rs.64,69,257/- in A.Y. 2016-17 and Rs.59,60,777/- in A.Y. 2017-18 made by the AO on this count. The ld. CIT(A) made the necessary findings at paras (4.6.2)& (4.6.3) at page no. 153 to155of his Order. 11.4 Aggrieved with the Order of the ld. CIT(A), the revenue is in appeal before us. 11.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO on this issue. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 71 of 110 11.6 Per Contra, Learned Counsel for the assessee has filed written submission before us. The relevant portion of such written submission is being reproduced as under: “D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.00 Your Honours, at the outset, for A.Y. 2014-15, it is submitted that the impugned addition of Rs.29,65,568/-, so made by the learned AO on account of disallowance of interest expenses under the provisions of s.36(1)(iii) of the Act, suffers from legal infirmity inasmuch such addition has been made by the learned AO merely on the basis of entries found in the regular books of account of the assessee. As has already been discussed elaborately in our Legal Ground, is reiterated that on the date of initiation of the search under s. 132, no assessment proceeding was pending in respect of the assessment year 2014-15 and therefore, without having recourse to any seized incriminating document or material, no addition could have been made in the total income of the assessee. 2.01 Your Honours, it shall be appreciated that the assessee had incurred the subject interest expenses on the loans availed by it in the form of cash credit facility from a Nationalized Bank i.e. Bank of Maharashtra, Indore. It is submitted that the aforesaid credit facility has been sanctioned by the bank against the hypothecation of stock and receivables of the assessee, to meet the working capital requirement of the assessee company. Thus, it shall be appreciated by Your Honours that the bankers, in their best wisdom, have sanctioned the working capital facilities only after having satisfied themselves with the actual business requirement of the assessee. Further, the funds so obtained by the assessee were wholly and exclusively utilized by it for the purpose of its business only. 4.02 Your Honours, it is submitted that during the year under consideration, the assessee had purchased 36,00,000 number of Equity Sharers of ‘Global Metal and Energy Private Limited’ (in short “GMEPL’), for a total consideration of Rs.3,60,00,000/-. Since the aforesaid shares were purchased by the assessee company in the course of its business of trading of shares, the same were held by the assessee company as its Stock-In-Trade.Such fact can very well be verified by Your Honoursfrom the Schedule-12 of Inventories of the Audited Financial Statements of the assessee company for the relevant previous year wherein the shares of the aforesaid company have been classified as such by the assessee company [kindly refer PB Page no. 70 to 110]. 4.03 Your Honours, the learned AO has made the disallowance of the entire interest expenses incurred by the assessee company on the basis that the assessee has used its CC limit for making investment in shares of group company. In this regard, it is submitted that such shares have been acquired by the assessee as a part of its trading activity and held as inventories and not as investments. It shall be appreciated by Your IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 72 of 110 Honours that even the learned AO, at para (9.25) of the impugned Order, while furnishing the details of purchases made by the assessee for the financial year 2013-14 relevant to A.Y. 2014-15, has shown the purchases of shares amounting to a sum of Rs.3,60,00,000/- as the trading purchases of the assessee. It is thus submitted that having accepted the purchases of shares by the assessee as for the purpose of the business and having accepted the genuineness of such purchases, there was absolutely no justification for the learned AO to disallow any interest on the loan borrowed and utilized for purchases of such shares under s.36(1)(iii) of the Act. 4.04 Your Honours, from a bare reading of section 36(1)(iii)of the Act, it is clear that deduction shall be allowed in respect of the amount of interest paid if the capital is borrowed for the purpose of business or profession. The language used in the said provision is very plain, clear and unambiguous. The intent of the said provision is that so long as the assessee has utilized the capital borrowed for the purpose of business, the amount of interest paid in respect of such capital borrowed should be allowed as deduction. In the similar circumstances, the Hon’ble Madras High Court in the case of the CIT vs. Shriram Investments (Firm) 2014 (11) TMI 55(Mad.) by relying upon the decision of the Hon’ble Calcutta High Court in the case of CIT vs. Rajeeva Lochan Kanoria (1994) 208 ITR 616 (Cal.),held the same view. A copy of the judgement is placed at Page no 447 to 450 of our Paper Book. For a ready reference, the relevant para (8) of the judgment is being reproduced as under: “8. We may also gainfully refer to the judgment of the Calcutta High Court in CIT v. Rajeeva Lochan Kanoria [1994] 208 ITR 616. The learned court was considering section 36(1)(iii) and was pleased to observe as under (page 620) : 'The only enquiry that is to be made is whether the payment of interest was in respect of capital borrowed for the purpose of the assessee's business or profession. There is no dispute that the capital was borrowed in the instant case and interest was paid on the borrowed capital. It is to be established that the amount was borrowed for the purpose of business or profession. The amount borrowed may be utilized for the purpose of acquisition of stock-in trade or for the purpose of acquisition of capital assets. But so long as the money is utilised for business purposes the interest will have to be allowed as deduction. It is well settled that business expenditure is not confirmed to expenses incurred on revenue account. Capital expenditure may not be allowed as a deduction under section 37 because the section specifically bars any deduction of expenditure of capital nature. But section 36 is differently worded. There is no bar in section 36(1)(iii) to allowance of interest paid in respect of capital borrowed which has been utilised for purchase of a capital asset. The position of law in this regard was explained by the Supreme Court in the cases of India Cements Ltd. v. CIT [1966] 60 ITR 52 (SC) and State of Madras v. G.J. Coelho [1964] 53 ITR 186 (SC).' IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 73 of 110 (emphasis supplied) 8. We have considered the reasoning given in the decisions referred to supra and are in respectful agreement with the view expressed in the said decisions, for the reason already given by us that there is nothing in Section 36(1)(iii) of the Act that would dis-entitle the assessee to claim deduction in respect of interest paid on the capital borrowed for the purposes of business.” 4.05 Likewise, in the case of India Cement Ltd. vs. CIT 1966 (60) ITR (SC), the Hon’ble Supreme Court of Indiaheld as under: ‘That, while adjudicating the claim for deduction under section 36(1)(iii) of the Act, the nature of the expense-whether the expense was on capital account or revenue account-was irrelevant as the section itself says that interest paid by the assessee on the capital borrowed by the assessee was an item of deduction. That the utilization of the capital was irrelevant for the purpose of adjudicating the claim for deduction under section 36(1)(iii) of the Act. (see the judgement of the Bombay High Court in the case of Calico Dyening and Printing Works v. CIT 1958 (34) ITR 265). In that judgement, it has been laid down that where an assessee claims deduction of interest paid on capital borrowed, all that the assessee had to show was that the capital which was used for business purpose in the relevant year of account and it did not matter whether the capital was borrowed in order to acquire a revenue asset or a capital asset.” 4.06 Your Honours, it shall thus be appreciated that under the provisions of s.36(1)(iii) of the Act, the only requirement is that the amount must be borrowed for the purpose of business or profession. The amount borrowed may be utilized for the purpose of acquisition of stock-in trade or for the purpose of acquisition of capital assets. But so long as the money is utilised for business purposes, the interest will have to be allowed as deduction. It shall be worthwhile to note that in the instant case, there is no dispute that the amount has been borrowed by the assessee company for the purpose of its business only and therefore, the interest expenditure incurred by the assessee company on such borrowed funds would be entitled for deduction under s.36(1)(iii) of the Act. 5.01 Your Honours, it is further submitted that for the purpose of acquisition of the subject shares for a sum of Rs.3.60 Crores, a sum of Rs.2.11 Crores had been paid by the assessee company from its Cash Credit Account and the remaining amount of Rs.1.49 Crores was paid out of the interest-free fresh unsecured loans borrowed by it from its directors and their relatives. It is a settled law that disallowance under s.36(1)(iii) of the Act cannot be made in respect of the interest expenses when the assessee is having sufficient interest free funds. For such proposition, reliance is placed on the following judicial pronouncements: i) S.A. Builders Ltd. vs. CIT (2007) 288 ITR 1 (SC) IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 74 of 110 ii) CIT vs. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom.) iii) CIT vs. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom.) iv) Ravi Seeds & Research Pvt. Ltd. vs. ACIT (2018) 33 ITJ 416 (Trib.-Indore) 5.02 Your Honours, the Hon’ble Apex Court in the case of CIT vs. Reliance Industries Ltd. 2019 (1) TMI 757 (SC) has once again held the same view. 6.00 Your Honours, the finding of ld. AO to the effect that the assessee has provided interest free advances to related party is factually incorrect. It is submitted that in respect of the loans and advances given by the assessee company, it had derived interest income to the tune of Rs.19,28,972/- during the year under consideration. Such interest income of Rs.19,28,972/-has been shown by the assessee company under the Note-22 of Finance Costs of its audited financial statements for the relevant previous year [kindly refer PB Page No. 70 to 110]. On a perusal of such Note, it shall be observed by Your Honoursthat theassessee has incurred interest expenses to the tune of Rs.29,65,568/- on account of Cash Credit facility and after reducing the interest income of Rs.19,28,972/-, as aforesaid, the assessee company has claimed net interest expenses of Rs.10,36,596/-. It is submitted that the ld. AO, while making the impugned addition in the assessee’s income, has completely disregarded such fact of earning of interest income of Rs.19,28,972/- by the assessee company and has proceeded to make the disallowance of entireinterest expenses of Rs.29,65,568/- by giving a factually incorrect finding that the assessee has given interest-free loans to related parties. 7.00 Your Honours, without prejudice to the above and without in any manner admitting that the investment has been made out of borrowed funds, it is submitted that theassessee company had made payment towards purchase of shares from its Cash Credit Account which is a mixed pool of both interest free and interest bearing funds, no disallowance of interest expenses under s.36(1)(iii) can be made. For such proposition, reliance is placed on the decision of the Hon’ble Jurisdictional ITAT, Indore in the case of Agrawal Indotex Ltd. vs. ACIT (2014) 24 ITJ 489 (ITAT-Indore). A copy of the judgment is placed at Page No. 451to 461 of our Paper Book. 8.00 Your Honours, the ld. CIT(A) has dealt with the subject issue at para (4.6.2) at page no. 153 to para (4.6.3) at page no. 155 of the impugned order. The ld. CIT(A) has given a finding that the borrowings made by the assessee were invested into the shares and the shares were held by the assessee company as Stock in Trade and therefore, the entire interest expenditure incurred on such borrowing was fully allowable. It is submitted that the findings so given by the ld. CIT(A) being squarely in accordance with the Law, deserve to be upheld by this Hon’ble Bench. Consequently, the Revenue’s appeal on these grounds be Dismissed.” IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 75 of 110 12.1 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, also gone through the judgments and decisions referred to and relied upon by both the sides. 12.2 We find that in the instant case, the AO has made the disallowances of interest by holding that the assessee had used its CC Limit for making investment in share of one of the group companies, namly GMEPL i.e. ‘Global Metal and Energy Private Limited’ and as also for providing interest free advances to related parties. Accordingly, the AO, by holding that the funds having been utilized for the purpose of investment, the same were not allowable under s. 37(1) of the Act, hence, made the subject additions in various assessment years. From the copies of the Audited Financial Statements of the assessee, for various assessment years, as placed in the paper books for the respective years, we find that the assessee has claimed the subject interest expenses on the loans availed by it in the form of cash credit facility from a Nationalized Bank i.e. Bank of Maharashtra, Indore, which has been sanctioned by the bank against the hypothecation of stock and receivables of the assessee, to meet the working capital requirement of the assessee company. We find merit in the contention of the assessee that the bankers, in their best wisdom, have sanctioned the working capital facilities only after having satisfied themselves with the actual business requirement of the assessee. From the Note-12-of Inventories, forming part of the Audited Financial Statements of the assessee company for the financial year 2013-14, as placed at page no. 89 to 110 of the assessee’s Paper Book for A.Y. 2014-15, we could gather that during the previous year relevant to A.Y. 2014-15, the assessee had purchased 36,00,000 number of Equity Sharers of ‘Global Metal and Energy Private Limited’ (in short “GMEPL’), for a total consideration of Rs.3,60,00,000/-. We find full substance in the contention of the assessee that the shares so purchased have been shown by it in its audited Balance Sheet as its Stock-In-Trade only and not as Investment, as wrongly held by the ld. AO. 12.3 We find that the ld. AO has made the disallowance mainly on the ground that the assessee had used its CC limit for making investment in shares of group company. We find that the purchases of shares were made by the assessee company in the course of its regular business which inter alia includes the business of trading in shares and therefore, any amount of interest which is attributable to the borrowings made towards such trading purchases are fully allowable u/s. 36(1)(iii) of the Act. I find that even the AO while giving the details of year wise purchases and sales, at para (9.25) of the impugned order, in respect of purchases for A.Y. 2014-15, at page no. 58 of the Order, has clearly included the amount of purchases of shares of Rs. 3,60,00,000/- by the assessee in GMEPL and therefore, there cannot be two views that the shares were held by the assessee only as Stock in Trade and not as investments. Accordingly, as per the accounting principles, which provides for charging of interest expenditure on working capital as the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 76 of 110 revenue expenditure, the assessee has rightly claimed such interest expenditure in its profit & loss account as an allowable business expenditure. In respect of the loans given to group concerns, we find that the assessee has duly charged interest against such loans. From the break- up of the interest expenditure, as placed at page no. 110 of the assessee’s Paper Book for A.Y. 2014-15, we find that for such year, besides claiming the interest expenditure on CC Limit, the assessee has also shown interest income of Rs. 19,28,972/-. Likewise, for the F.Y. 2014-15 relevant to A.Y. 2015-16, the assessee has shown interest income of Rs. 32,32,528/-, for F.Y. 2016-17 relevant to A.Y. 2017-18, the assessee has shown interest income of Rs. 34,09,506/-. We find that such receipt of interest on loans given have duly been taken into consideration by the assessee while computing its taxable income from year to year. We find that in the instance cases, the AO has not doubted the genuineness of the borrowings which have been made from a Nationalized bank. The AO has also not disputed that the borrowings were made through cash credit accounts only. The AO has also not disputed the genuineness of the incurrence of interest expenditure. We have already held that the borrowings on which the subject interest expenses got incurred, were utilized by the assessee for its purchase activities only. In our considered view, once an assessee has established that the borrowings were genuinely made for the purpose of business, then, the entire interest expenses is to be allowed. The Hon’ble High Court of Madras in the case of CIT vs. Shriram Investments (2014) 11 TMI 55 (Mad.), has held that even in such a case, it is not to be seen that whether the funds utilized from borrowing are used for holding the shares as stock in trade or for the purpose of having controlling interest in other companies. Further, we have also found that on the amount of loan given, the assessee has shown receipt of interest also. In such circumstances, in our considered view, the entire expenditure is wholly allowable u/s. 36(1)(iii) of the Act for all the assessment years under consideration. In our considered view, since, the shares in the GMEPL were not held by the assessee as capital assets by no cannon of law or principle of accountancy, any interest paid on any loan borrowed for the purpose of acquisition of such shares can be said to be in the nature of capital expenditure. Thus, we find absolutely no infirmity in the action of the ld. CIT(A) in deleting the additions of Rs. 29,65,568/- in A.Y. 2014-15, Rs.61,12,977/- in A.Y. 2015-16, Rs.64,69,257/- in A.Y. 2016- 17 and Rs.59,60,777/- in A.Y. 2017-18 made by the AO on account of disallowance of interest expenses u/s. 37(1) of the Act.Accordingly, the Revenue’s Ground No. 3 for A.Y. 2014-15 and Ground No. 4 for A.Y. 2015- 16, A.Y. 2016-17 and A.Y. 2017-18 are hereby dismissed. 13. Ground No. 1 of the Revenue for A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 and Ground Nos. 2(a) to 2(c) of the Assessee for A.Y. 2015-16 & A.Y. 2016-17; Ground Nos. 3(a) & 3(b) of the Assessee for A.Y. 2015-16 13.1 Through Ground No. 1 for A.Y. 2015-16 to A.Y. 2017-18, the Revenue has challenged the action of the ld. CIT(A) in deleting the various additions IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 77 of 110 made by the AO in the aforesaid assessment years on account of unsecured loans by invoking the provisions of section 68 r.w.s. 115BBE of the Act and by making addition u/s. 69C of the Act in respect of interest payments made by the assessee on aforesaid loans. Further, through the ground nos. 2(a) to 2(c) of appeal for A.Y. 2015-16 & A.Y. 2016-17, the assessee has challenged the action of the ld. CIT(A) in upholding the additions of Rs.25,41,918/- and Rs.10,07,726/- respectively for A.Y. 2015-16 & A.Y. 2016-17 made by the AO on account of unsecured loans from M/s. VRR Financial Services Pvt. Ltd. and interest payment thereon.Besides, through Ground Nos. 3(a) & 3(b) for A.Y. 2015-16, the assessee has challenged the action of the ld. CIT(A) in confirming the addition of Rs.20,00,000/- made by the AO on account of unsecured loan from some‘M/s. Sumeet & Sumeet Sales’. Since the issues in respect of the aforesaid grounds are inter-connected to each other, these grounds of appeals of the assessee and the revenue are adjudicated together. 13.2 Briefly stated facts of the issue, as culled out from the records, are that during the search and post search proceedings, it was found by the AO that the assessee had accepted unsecured loans from certain dubious/ shell entities/ companies. According to the AO, some of such entities/ companies were found to be managed/ controlled directly/ indirectly by a well-known entry provider of Indore namely Shri Sharad Darak and some of the loan creditor companies were self-managed shell companies of the group itself which were used for routing of unaccounted funds,while some of these loans were shown as accepted from employees/ others. Accordingly, the AO issued show-cause notices dated 31/10/2018 and 19/07/2019 to the assessee i.e. one before the receipt of the Report from the Special Auditors and one after that. In reply, the assessee, vide its letters dated 07.12.2018 and 30.07.2019, furnished its detailed explanation along with documentary evidences in support of establishing the identity & creditworthiness of loan creditors and genuineness of loan transactions. The AO, while framing the assessment order, averted that the assessee had accepted unsecured loans from shell/ paper companies and employees. Finally, the AO made an addition of Rs.1,42,56,641/- in A.Y. 2015-16, Rs.16,37,716/- in A.Y. 2016- 17 and Rs.6,81,020/- in A.Y. 2017-18 by holding the unsecured loans obtained by the assessee and interest paid thereon as unexplained cash credits u/s. 68 and unexplained expenditure u/s. 69C respectively. Further, the facts relating to the issue of unsecured loan of Rs.20,00,000/- in A.Y. 2015-16 from M/s. Sumeet & Sumeet Sales are that during the course of search/post search proceedings, it was found that the assessee has shown certain transactions with one concern called Sumeet & Sumeet Sales. As per the AO, this is a namesake proprietary concern of Shri Sumeet Garg who is an ordinary person who has no connection with the assessee’s business. Accordingly, the AO, vide show-cause notice dated 31/10/2018, required the assessee to furnish its explanation on the said issue. In reply, the assessee, vide its letter dated 07.12.2018, furnished its detailed explanation. The AO, while framing the assessment order, averted that cash was IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 78 of 110 introduced in the bank account of M/s. Sumeet & Sumeet Sales which was then transferred to various companies of Global group including the assessee. Finally, the AO made an addition of Rs.20,00,000/- in A.Y. 2015- 16 on account of receipts from bank account of M/s. Sumeet & Sumeet Sales by treating the same as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act. 13.3 Aggrieved with the Order of Assessment, the assessee preferred appeals for each of the relevant 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 it before the AO. The written submission made by the assessee has been reproduced by the ld. CIT(A) at page no. 39 to 69 of his Order. During the course of the appellate proceedings, before the ld. CIT(A), the assessee also furnished certain documents, as additional evidences under Rule 46A which were forwarded to the Assessing Officer for comments. The copy of the Remand Report of the AO was provided by the ld. CIT(A) to the assessee and in response, the assessee filed its rejoinder. The Ld. CIT(A), after considering the remand report of the AO as well as the rejoinder of the assessee, deleted the substantial additions made by the AO in respect of the unsecured loans obtained from certain entities/ persons. However, at the same time, the ld. CIT(A) confirmed certain additions made in respect of the two entities namely M/s. VRR Financial Services Pvt. Ltd. and M/s. Sumeet & Sumeet Sales. The ld. CIT(A) has given the relevant findings in respect of the unsecured loans obtained from various entities from paras (4.4.5) at page no. 69 to para (4.4.6) at page no. 81 of his order. Further, the relevant findings in respect of unsecured loan obtained from M/s. Sumeet & Sumeet Sales are given by the ld. CIT(A) at para (4.7.2)at page no. 169 to 172 of his Order. 13.4 Aggrieved with the Order of the ld. CIT(A), both the assessee as well as the Revenue are in appeal before us. 13.5 Before us, learned CIT(DR) vehemently argued supporting the observations of the AO as well as of the ld. CIT(A) on this issue. 13.6 Per Contra, Learned Counsel for the assessee has filed written submission before us. The relevant portion of such written submission is being reproduced as under: “D. Key Points of Assessee’s Submission and Relevant Pages of the Paper Books: 1.00 Your Honours, during the course of the assessment proceedings, the learned AO vide his show-cause notice dated 19-07-2019 [kindly refer Page No. 168 to 173 of our Paper Book for A.Y. 2013-14] had required the assessee to furnish its explanation on the subject issue. In response to the aforesaid query, the assessee vide its letter dated 25-07-2019[kindly refer Page No. 174 to 215 of our Paper Book for A.Y. 2013-14], made its very elaborative IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 79 of 110 explanation on the subject issue along with ample of documentary evidences, filed by way of furnishing a separate Volume marked as ‘Volume –UL’. By tendering the explanations which were duly supported by all the necessary documentary evidences, the assessee had discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. Consequently, no addition in the hands of the assessee was warranted under s. 68 of the Act, in respect of the subject loan amounts. 1.02 Your Honours, despite making the explanation as aforesaid, the learned AO made the addition of Rs.1,42,56,641/- merely on his whims, surmises, presumptions, assumptions and extraneous considerations and also without bringing any positive material on record to substantiate his allegation that the assessee was engaged in routing its own unaccounted funds into its books of account in form of cash credits, by making its employees and other persons/ concerns as conduit for the same. 1.03 Your Honours, the learned AO, at page no. 31 of the assessment order has given the break-up of the sum of Rs.1,42,56,641/- in respect whereof the subject addition has been made for the assessment year 2015-16. For the sake of convenience, the break-up so given by the learned AO is summarized, in a tabular form, as under: S. No. Name of the loan creditor Amount 1 M/s. Prudent Tradex Pvt. Ltd. 54,05,436 2 M/s. Sujata Trade Services Pvt. Ltd. 16,05,000 3 M/s. VRR Financial Services Pvt. Ltd. 25,41,918 4 M/s. Vaibhav Gems & Jewels Pvt. Ltd. 46,48,561 5 M/s. Sumeet & Sumeet Sales (Interest) 55,726 Total 1,42,56,641 2.00 Your Honours, during the course of assessment proceedings, the assessee vide its letter dated 25-07-2019 [kindly refer Page No 174 to 215 of our Paper Book for A.Y. 2013-14], had furnished the necessary documentary evidences to establish the identity of the loan creditors, the genuineness of the loan transactions and the creditworthiness of the loan creditors, as contemplated under the provisions of s.68 of the Act. 3.00 Your Honours, it is submitted that the assessee by furnishing the necessary documents had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. It is further submitted that during the course of assessment proceedings the assessee had specifically requested the learned AO that if he wish to make further verification or investigation in the matter,then a summons under s.131 or letters under s.133(6) of the Act to the loan creditors may be issued in order to further substantiate the claim of the assessee. However, despite making such specific request, the learned AO did not carry out any enquiry by himself and proceeded further in regarding the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 80 of 110 unsecured loan as unexplained credits of the assessee. Such a failure on the part of the learned AO was not permissible and is bad-in-law. For such proposition, reliance is placed on the following judicial pronouncements : i) CIT vs. Shri Sai Vihar (2016) 28 ITJ 158 (Trib. - Raipur) ii) CIT V Ramesh Chander Shukla10 ITJ 286 (Madhya Pradesh HC) iii) Manna Lal Murlidhar79 ITR 540 iv) Radhe Sham Jagdish Prashad117 ITR 186 v) G. Shubha Devi vs. ITO (2019) 307 CTR 0536 (Kar.) vi) Anil Kumar Midha (HUF) vs. ITO (2006) 100 TTJ 0644 vii) ITO vs. Sanjay Kumar Goel (2007) 108 TTJ 0823 (Del.) viii) Mass Con (India) Pvt. Ltd. vs. ITO (2013) 37 CCH 0143 (Del.) ix) CIT vs. Rajeev Shukla (2007) 207 CTR 0253 (MP HC) 4.00 Your Honours, it is submitted that once the initial onus has been discharged by the assessee, the burden to prove the credits as unexplained shifts from the shoulder of the assessee to the taxing authorities. It is submitted that, in the instant case, the learned AO has failed to discharge his onus by failing to substantiate his assertion with the aid of corroborative evidences and thus, there was absolutely no justification for the learned AO to make the addition merely on the basis of some hearsay allegations against the loan creditor and information gathered behind the back of the assessee. 5.00 Your Honours, the learned AO for making the addition relied on the reports submitted by the Special Auditors u/s. 142(2A) of the Act. However, during the course of assessment proceedings, the assessee had got its preliminary objection registered against the observation made by the ld. AO as well as by the Special Auditors appointed under s.142(2A) of the Act, that the scope of the Special Auditors had to be restricted to the examination, verification and audit of books of account and other documents, pertaining to the assessee or as found and seized during the course of the search. The scope would not include an investigation into the affairs of the auditee or for that matter, to occupy the judgment seat of an Assessing Officer. The scheme of the Special Audit nowhere contemplates satisfaction of the Special Auditors as regard to the genuineness of the loan transactions which have duly been recorded in the books of account. The Assessing Officer who is competent to examine the ingredients of the cash credits such as identity of the loan creditor, genuineness of the transactions and creditworthiness of the loan creditor as contemplated under the provisions of s.68 of the Act and it is his satisfaction only, which matters for invocation of provisions of s.68 of the Act. It is submitted that in the instant case, the ld. AO is heavily harping on the comments given by the Special Auditors in their Report without even going through the various documentary evidences already placed by our company on his record for establishing the genuineness of the loan transactions as claimed by the assessee. 6.01 Your Honours, it has been averted by the ld. AOin para (8.1) that during search and post search proceeding it was found that assessee has accepted IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 81 of 110 unsecured loan from certain dubious/ shell entities/ companies. Some of such entities/ companies were found to be managed/ controlled by Shri Sharad Darak, a well known accommodation entry provider. Your Honours, it is submitted that the assessee or any of its functionaries do not know any entry provider and have never made any transaction with any entry provider. 6.02 Your Honours, the ld. Assessing Officer in the Assessment Order at para (8.09 and 8.12 to 8.20) has given his findings related to entities/ companies managed/ controlled by Shri Sharad Darak.In the aforesaid paras, the ld. AO has averted that Shri Sharad Darak through his companies had been involved in providing the accommodation entries to the assessee and to its group companies.At the outset, it is submitted that the assessee has not obtained any loan from any company which were controlled/ managed by Shri Sharad Darak, during the year under consideration or in any other years. It is further submitted that the companies, in respect of which such allegation has been made by the ld. AO by treating its dummy/ shell companies, have no direct or indirect association with Mr. Sharad Darak or any of his companies. 7.00 Your Honours, without prejudice to the above, now, on the merits of the case, we will be dealing with each and every ingredients of s. 68 of the Income-Tax Act, 1961 in respect of the subject loan creditorsin the ensuing paras. 7.01 LOAN FROM M/S. PRUDENT TRADEX PVT. LTD. [‘PTPL’]– Rs.54,05,436/- - DEPARTMENTAL APPEAL – A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 [AO’s Findings at para (8.38) at page no. 31] [CIT(A)’s Findings at para (4.4.5)[B] at page no. 71 to 73] (A) IDENTITY: (i) The PTPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Madhya Pradesh, on 31-03-2014, vide registration No.U52590MP2014PTC032632 of 2013-14. A copy of certificate of incorporation of the company is placed at Page No. 140 of our Paper Book. (ii) The PTPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 141 to 152 our Paper Book. (iii) The registered office of the PTPL was situated at 236, 3 rd Floor, Raj Plaza, Chhawani, Indore (M.P.). (iv) The PTPL, since its inception, is regularly assessed to income-tax under PAN-AAHCP7072R. The PTPL had also furnished its return of income for the relevant assessment year. In evidence of such fact, a copy of IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 82 of 110 acknowledgement of return of PTPL, for A.Y. 2015-16, is placed at Page No. 153 of our Paper Book. (v) The PTPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is being placed at Page No. 154 of our Paper Book. (vi) The PTPL has been maintaining its bank accounts with various banks. During the relevant previous year, the PTPL was maintaining its current account with Karnataka Bank at its Branch at Indore vide account No. 3522000100059501 (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with PTPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the PTPL to the assessee, is placed at Page No. 155 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions regarding to receipt of loan by the assessee fromPTPL are clearly getting reflected. Copies of such abstracts of the relevant bank statements of the assessee are placed at Page No.156 & 157 of our Paper Book. (iii) Your Honours, during the course of the assessment proceedings, the assessee could not furnish the copy of relevant bank statements of the loan creditor namely, PTPL, before the ld. AO for the very reason that due to passage of a considerable long time, at the relevant time when the assessment proceedings were undergoing, such bank statements were not available with the loan creditor and consequently, the assessee could not procure the same and produce before the ld. AO. Now, since, the loan creditor has obtained bank statements, copies of the relevant bank statements are placed at Page no 158 & 159 of our Paper Book. It is prayed that since, the assessee was prevented by a reasonable cause to furnish such evidences during the course of assessment proceedings, the same may kindly be admitted now as an additional evidences, in accordance with the provisions of Rule 46A of the Income-Tax Rules, 1962. A separate application for admission of such additional evidences, under Rule 46A of the Rules, is being submitted herewith separately. In order to facilitate the concerning AO to go through such additional evidences, and make his comments on such evidences, copies of such additional evidences along with a copy of the application, refereed hereinabove, is also being submitted along with the copy of the application. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 83 of 110 (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making due TDS,which has been duly incorporated by the loan creditor PTPL in its return of income. (C) CREDITWORTHINESS OF PTPL: (i) For establishing capacity and creditworthiness of PTPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of PTPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2015. A copy of such audited financial statements are placed at Page No. 160 to 169 of our Paper Book. (ii) On a perusal of the audited financial statements of PTPL, it shall be observed by Your Honours that as on 31-03-2015, the PTPL was having sufficient funds at its disposal for making loans to the assessee company. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, PTPL, with Karnataka Bank [kindly refer PB Page no. 159], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speaks in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the PTPL, it would be observed by Your Honours that PTPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with PTPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by PTPL cannot be doubted (v) Finally, in respect of the loan transactions with PTPL, it is submitted that the assessee has fully established the creditability of the loan creditor and as also the genuineness of the transactions, and therefore, the findings given by the learned AO at para (8.38) at page no. 31 of the assessment order, deserves to be set-aside. 7.02 LOAN FROMM/s. SUJATA TRADE SERVICES PVT. LTD. [‘STSPL’]– Rs.16,05,000/- DEPARTMENT’S APPEAL – A.Y. 2015-16, A.Y. 2016-17 & A.Y. 2017-18 [AO’s Findings at para (8.38) at page no. 31] [CIT(A)’s Findings at para (4.4.5)[C] at page no. 74 to 76] (A) IDENTITY: (i) The STSPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Maharashtra, on 28-04-2004, vide registration IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 84 of 110 No.U51909MH2004PTC145953. A copy of certificate of incorporation of the company is placed at Page No. 170 of our Paper Book (ii) The STSPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at Page No. 171 to 184 of our Paper Book. (iii) The registered office of the STSPL was situated at 290, Anand Bhavan, 1 st Floor, Shahid Bhagat Singh Road, Fort Mumbai, Mumbai City (M.H.). (iv) The STSPL, since its inception, is regularly assessed to income-tax under PAN-AAICS9035L. The STSPL had also furnished its return of income for the relevant assessment year. In evidence of such fact, we are furnishing herewith a copy of acknowledgement of return of STSPL, for A.Y. 2015-16, is placed at Page No. 185 of our Paper Book. (v) The STSPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 186 of our Paper Book. (vi) The STSPL has been maintaining its bank accounts with various banks. During the relevant previous year, the STSPL was maintaining its current account with South Indian Bank at its Branch atFort Greater Mumbai vide account No. 026307300002024 (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with STSPL had taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the STSPL tothe assessee, is placed at Page No. 187 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions regarding to receipt of loan by the assessee fromSTSPL are clearly getting reflected. Copies of such abstracts of the relevant bank statements of the assessee is placed at Page No. 188 of our Paper Book. (iii) Further, to establish the fact that loans were genuinely given by STSPL through their bank account, a copy of relevant bank statement of STSPL for the relevant period is placed at Page No. 189 of our Paper Book. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 85 of 110 (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making due TDS,which has been duly incorporated by the loan creditor STSPL in its return of income. (C) CREDITWORTHINESS OF STSPL: (i) For establishing capacity and creditworthiness of STSPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of STSPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2015. A copy of such audited financial statements are placed at Page No. 190 to 202 of our Paper Book. (ii) On a perusal of the audited financial statements of STSPL, it shall be observed by Your Honours that as on 31-03-2015, the STSPL was having its net owned funds to the extent of Rs.1.84lakhs by way of share capital and reserves & surplus and borrowed funds to the tune of Rs.71.25lakhs. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, STSPL, with South IndianBank [kindly refer PB Page no. 189], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the STSPL, it would be observed by Your Honours that STSPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with STSPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by STSPL cannot be doubted. (v) Finally, in respect of the loan transactions with STSPL, it is submitted that the assessee has fully established the creditability of the loan creditor and as also the genuineness of the transactions, and therefore, the findings given by the learned AO at para (8.38) at page no. 31 of the assessment order, deserves to be set-aside. 7.04 LOAN FROM M/s. VAIBHAV GEMS & JEWELS [‘VGJ’]–Rs.46,48,561/- DEPARTMENT’S APPEAL – A.Y. 2015-16 [AO’s Findings at para (8.38) at page no. 31] [CIT(A)’s Findings at para (4.4.5)[D] at page no. 76 to 79] (i) The VGJ is a proprietorship concern of Shri Vaibhav Dnyaneshwar Rajgururesident of Flat No. 102, A Wing DhawalGiri Building, Lokhandwala, Andheri (W), Mumbai (M.H.), aged nearly 32 years, is regularly assessed to Income-Tax, under PAN – AMAPR4361B, for the last many years. It is IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 86 of 110 submitted that during the course of the assessment proceedings, the assessee, in order to establish the identity of the loan creditor, had furnished copy of his PAN card. Further, in order to establish the genuineness of the transactions, the assessee had furnished a copy of letter of confirmation duly given by the creditor and as also, a copy of relevant bank statement of the assessee reflecting the receipts of such loans and bank statement of the loan creditor. A copy of such PAN Card, copy of letter of confirmation and a copy of relevant bank statement of the assessee and of loan creditor, are placed at Page no. 237 to 240 of our Paper Book. (ii) Your Honours, during the course of the assessment proceedings, the assessee could not furnish the copy of income tax return of the loan creditor namely, Shri Vaibhav Dnyaneshwar Rajguru, before the ld. AO for the very reason that due to passage of a considerable long time, at the relevant time when the assessment proceedings were undergoing, such income tax return were not available with the loan creditor and consequently, the assessee could not procure the same and produce before the ld. AO. Now, since, the loan creditor has obtained the income tax return, copy of the income tax return is placed at Page no 241 of our Paper Book. It is prayed that since, the assessee was prevented by a reasonable cause to furnish such evidences during the course of assessment proceedings, the same may kindly be admitted now as additional evidences, in accordance with the provisions of Rule 46A of the Income-Tax Rules, 1962. A separate application for admission of such additional evidences, under Rule 46A of the Rules, is being submitted herewith separately. In order to facilitate the concerning AO to go through such additional evidences, and make his comments on such evidences, copies of such additional evidences are also being submitted along with the copy of the application. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, with HDFCBank [kindly refer PB Page no. 240], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. (iv) Your Honours, on a further perusal of the bank statement of the VGJ, it would be observed by Your Honours that VGJ was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with VGJ by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by VGJ cannot be doubted (v) Finally, in respect of the loan transactions with VGJ, it is submitted that the assessee has fully established the credibility of the loan creditor and as also the genuineness of the transactions, and therefore, the findings given by the learned AO at para (8.38) at page no. 31 of the assessment order, deserves to be set-aside.” IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 87 of 110 14.1 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, also gone through and carefully considered the various judgments and decisions referred to and relied upon by both the sides. 14.2 We find that the ld. CIT(A) at para (4.4.5) of his Order from page no. 69 to 81 and against at (4.7.2) from page no. 169 to 172 has elaborately dealt with each and every unsecured loan in respect of which the AO has made addition in various assessment years. In order to analyse the facts of each of the loan creditors, we have also considered it necessary to give our findings, for all such creditors in the paras set out below. 14.3 M/s. Prudent Tradex Pvt. Ltd. (‘PTPL’) M/s. SUJATA TRADE SERVICES PVT. LTD. (‘STSPL’) and M/s. Vaibhab Gems and Jewels (‘VGJ’) 14.3.1 We find that the AO has made addition u/s. 68 of the Act, in respect of the all the aforesaid three loan creditors without giving any specific finding.We find that the subject additions in respect of the unsecured loans from PTPL, STSPL and VGJ have got made by the AO by presuming the same to be the companies controlled by Mr. Sharad Darak. We find that during the course of the appellate proceedings before the ld. CIT(A), the assessee had contended that the lender companies were not belonging to or in any way having any direct or indirect connection with Mr. Sharad Darak. We find that the AO has given the names of the companies directly or indirectly controlled by Shri Sharad Darak at para (8.12) and again at para (8.14) of the assessment order and from such paras, we noted that the AO himself has not shown the above named threecompanies as belonging to Shri Sharad Darak. 14.3.2 We further find that in order to establish the genuineness of the loansclaimed to have been received by the assessee company from the above named loan creditors, the assessee company had furnished various documentary evidences before the ld. AO and as also, before the ld. CIT(A). We find that before us also, in its Paper Book for A.Y. 2015-16, from page no. 140 to 169, the assessee has furnished various documentary evidences such as a copy of certificate of incorporation of the PTPL, its copy of Memorandum and Articles of Association, copy of acknowledgement of its income tax return for A.Y. 2015-16, copy of the master data downloaded from the official website of the MCA, copy of letter of confirmation duly signed by one of the director of the company, a copy of the relevant abstract of the bank account of the PTPL and a copy of the audited financial statements of PTPL as of 31/03/2015.We find that the similar sets of documents in respect of STSPL and VGJ have been furnished by the assessee in his Paper Book for A.Y. 2015-16 filed before us, respectively IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 88 of 110 from page no. 170 to 202 and from page no. 237 to 241. On a perusal of the aforesaid documents, we find that PTPL and STSPL are private limited companies, duly incorporated under the Companies Act, 1956 by the concerning Registrar of Companies. From the abstracts of the master datas of PTPL and STSPL, as abstracted from the official website of the Ministry of Corporate Affairs, Government of India, we find that in the ROC records, both the lender companies have been shown as Active companies. Further, in respect of VGJ, we find that it is a proprietorship concern of Shri Vaibhav Rajguru s/o Shri Jaganath Rajguru, R/o Flat No. 102, A Wing, Dhawal Giri Building, Lokhandwala, Anhdheri (W), Mumbai. We further find that Shri Vaibha Rajguru is assessed to Income-Tax under PAN AMAPR4361B. Thus, in our considered view, by furnishing all the necessary documents, such as the certificates of incorporation, copies of Memorandum and Articles of Association, copies of acknowledgement of income tax returns, copies of the master datas downloaded from the official website of the MCA, copies of the PAN Cards, the assessee could be able to establish the statutory as well as the physical identity and existence of all the aforesaid three loan creditors. We further find from the copies of duly signed letters of confirmation, copy of the relevant abstracts of the bank accounts of the loan creditors that all the loan transactions have been carried out through banking channels which were found duly reflected in the bank statements of the assessee as well as the loan creditors. Further, from a perusal of the copies of the lender’s bank statements placed in the Paper Book for A.Y. 2015-16, we find that in none of the cases, before making remmitance to the assessee towards loan transactions, any cash was deposited by the lenders. We have also perused the audited financial statemens of the lenders and from such financial statements, we found that such lenders were having sufficient funds available for providing loans to the assessee company. We find that although all the documentary evidences for establishing the genuineness of the loans, as aforesaid, were also filed by the assessee before the AO, but the AO could not find any specific defect or discrepancy in any of such documentary evidences. We find that even before us, the ld. CIT(DR) could not point out any single defect or discrepancy in such documents. 14.3.3 Thus, in our considered view, in respect of the aforesaid three loan creditors, by furnishing the documentary evidences as discussed hereinabove, the assessee could be able to fullydischarge its onus of proving all the three ingredients as contemplated u/s. 68 of the Act viz. (i) identity of the creditors; (ii) genuineness of the loan transactions; and (iii) creditworthiness of the loan creditors beyond all doubts. We also find that during the course of the search u/s. 132 of the Act, in the premises of the assessee company and its directors, no incriminating material or any evidence raising any doubt regarding the genuineness of the loan transactions was found or seized. We further find that during the course of the assessment proceedings, despite making a specific request to this effect by the assessee, the AO did not make any independent inquiry either by way of issuance of summons u/s. 131 or by way of issuance of letters u/s. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 89 of 110 133(6) of the Act to the aforesaid lenders. We also find that the various case laws relied upon by the AO are not applicable to the assessee’s case. Thus, relying upon the decisions of the Hon’ble Jurisdictional High Court in the cases ofCIT vs. Metachem Industries (2000) 245 ITR 0160 (MP),CIT vs. STL Extrusions Pvt. Ltd. (2011) 333 ITR 269 (MP), PCIT vs. Chain House Internationatioal (P) Ltd. & Ors. (2018) 408 ITR 0561 (MP), Ashok Pal Daga vs. CIT (1996) 220 ITR 0452 (MP), CIT vs. Mehrotra Brothers (2004) 270 ITR 0157 (MP), the decision of the Hon’ble High Court of Gujarat in the case of DCIT vs. Rohini Builders (2002) 256 ITR 360 (Guj.), the decisions of the Hon’ble High Court of Delhi in the cases of CIT vs. Kamdhenu Steel and Alloys Ltd. & Ors. (2014) 361 ITR 0220 (Del.) and CIT vs. Dalmia Resorts International (2007) 290 ITR 508 (Del.), the decision of the Hon’ble High Court of Patna in the cases of CIT vs. Hanuman Agrawal (1985) 151 ITR 150 (Patna) and again in the case of Add. CIT vs. Bahari Brothers (P) Ltd. (1985) 154 ITR 0244 (Patna) andthe decision of the Hon’ble Apex Court in the case of CIT vs. Orissa Corporation P. Ltd. (1986) 159 ITR 0078 (SC) we find absolutely no justification in the AO’s making the addition in respect of the aforesaid loan creditors in the income of the assessee u/s. 68 of the Act. Accordingly, in our considered view, all the additionsin respect of the loans made by the AO in the assessee’s income have rightly been deleted by the ld. CIT(A). Since, we have already upheld the genuineness of the loans transactions, the additionsmade by the AO on account of interest paid on such loans are also not substainable. 14.4 M/s. VRR FINANCIAL SERVICES PVT. LTD. (‘VFSPL’) 14.4.1 We find that the AO has made addition amounting to Rs. 25,00,000/- and Rs. 10,07,726/- respectively for A.Y. 2015-16 and A.Y. 2016-17, u/s. 68 of the Act, in respect of loan claimed to have been received by the assessee company from one other company namely M/s. VRR Financial Services Pvt. Ltd. Besides, in respect of such loan transaction, the AO has also made an addition amounting to Rs. 41,918/- in the assessee’s income u/s. 69C of the Act by holding such loan transaction as well as payment of interest thereon as non-genuine. 14.4.2 We find that the necessary findings in respect of the above loan creditor, VFSPL, have been given by the AO at para (8.22) & (8.23) of the Order. According to the AO, the above named company was being operated by another entry operator namely Shri Rajesh Vyas who was a director of the above said company. At para (8.22), the AO has reproduced the statement of Shri Rajesh Vyas recorded on 03.01.2017 u/s. 131(1A) of the Act during the post search investigation. Before us, the assessee has filed a written synopsis on the subject addition, which is being reproduced as under: “7.03 LOAN FROMM/s. VRR FINANCIAL SERVICES PVT. LTD. [‘VFSPL’]– Rs.25,41,918/- ASSESSEE’S APPEAL – A.Y. 2015-16 & A.Y. 2016-17 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 90 of 110 [AO’s Findings at para (8.38) at page no. 31] [CIT(A)’s Findings at para (4.4.5)[E] at page no. 79 to 81] (A) IDENTITY: (i) The VFSPL is a private limited company duly registered under the erstwhile Companies Act, 1956, under the Certificate of Incorporation granted by the Registrar of Companies, Madhya Pradesh, on 28-04-2009, vide registration No.U74140MP2009PTC021855. A copy of certificate of incorporation of the company is placed at Page No. 203 of our Paper Book. (ii) The VFSPL was incorporated with the objects of carrying out the business of trading in various commodities, financing and investment as per the objects contained in its Memorandum of Association, under which it has got incorporated. A copy of the Memorandum and Articles of Association of the company is placed at No. 204 to 219 of our Paper Book. (iii) The registered office of the VFSPL was situated at 43, Jati Colony, (Ram Baugh), Near Khare Coaching Classes, Indore (M.P.). (iv) The VFSPL, since its inception, is regularly assessed to income-tax under PAN-AADCV0284H. The VFSPLhad also furnished its return of income for the relevant assessment year. In evidence of such fact, we are furnishing herewith a copy of acknowledgement of return of VFSPL, for A.Y. 2015-16, is placed at Page No. 220 of our Paper Book. (v) The VFSPL is an active and functionary company as per the records and data of the Ministry of Corporate Affairs (MCA), Government of India. In evidence of such fact, a copy of the Master Data downloaded from the official website of the MCA is placed at Page No. 221 of our Paper Book. (vi) The VFSPL has been maintaining its bank accounts with various banks. During the relevant previous year, the VFSPL was maintaining its current account with Yes Bank at its Branch atIndore vide account No. 004083900002707 (B) GENUINENESS OF THE TRANSACTIONS: (i) As regard the genuineness of the transactions, it is submitted that all the transactions entered into by the assessee with VFSPLhad taken place through account payee cheques/ banking channels only and none of the transactions had taken place in the form of cash. In evidence of such fact, a copy of loan confirmation letter duly signed by the authorized signatory of the lender company, confirming the transactions of loan given by the VFSPL to the assessee, is placed at Page No. 222 of our Paper Book. (ii) The assessee’s claim to the effect that all the loan transactions had taken place through banking channels can be verified from the copy of the relevant statements maintained with the banks in which the transactions regarding to receipt of loan by the assessee fromVFSPL are clearly getting IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 91 of 110 reflected. Copies of such abstract of the relevant bank statements of the assessee is placed at Page No. 223 of our Paper Book. (iii) Your Honours, during the course of the assessment proceedings, the assessee could not furnish the copy of relevant bank statements of the loan creditor namely, VFSPL, before the ld. AO for the very reason that due to passage of a considerable long time, at the relevant time when the assessment proceedings were undergoing, such bank statements were not available with the loan creditor and consequently, the assessee could not procure the same and produce before the ld. AO. Now, since, the loan creditor has obtained bank statements, copies of the relevant bank statements is placed at Page no. 224 of our Paper Book. It is prayed that since, the assessee was prevented by a reasonable cause to furnish such evidences during the course of assessment proceedings, the same may kindly be admitted now as an additional evidences, in accordance with the provisions of Rule 46A of the Income-Tax Rules, 1962. A separate application for admission of such additional evidences, under Rule 46A of the Rules, is being submitted herewith separately. In order to facilitate the concerning AO to go through such additional evidences, and make his comments on such evidences, copies of such additional evidences along with a copy of the application, refereed hereinabove, is also being submitted along with the copy of the application. (iv) Furthermore, it is also submitted that the assessee has paid interest on such loans after making due TDS,which has been duly incorporated by the loan creditor VFSPL in its return of income. (C) CREDITWORTHINESS OF VFSPL: (i) For establishing capacity and creditworthiness of VFSPL to provide loan to the assessee, during the course of the assessment proceedings, the assessee had duly furnished a copy of the audited financial statements of VFSPL along with Auditors’ Report, in respect of the financial year ended 31 st March 2015. A copy of such audited financial statements are placed at Page No. 225 to 236 of our Paper Book. (ii) On a perusal of the audited financial statements of VFSPL, it shall be observed by Your Honours that as on 31-03-2015, the VFSPL was having its net owned funds to the extent of Rs. 1.13crores by way of share capital and reserves & surplus. (iii) Your Honours, on a perusal of the copy of the bank statement in respect of the bank account maintained by the loan creditor, VFSPL, with YesBank [kindly refer PB Page no. 224], it shall be observed by Your Honours that, in such bank statement, entries regarding issuance of cheques for the purpose of providing the subject unsecured loan to the assessee are getting clearly reflected. Such entries by themselves, speak in volume, regarding the identity of the loan creditor, genuineness of the loan transaction and as also, creditworthiness of the loan creditor. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 92 of 110 (iv) Your Honours, on a further perusal of the bank statement of the VFSPL, it would be observed by Your Honours that VFSPL was having sufficient balance in its bank statement before providing the subject loan to the assessee. It shall further be observed by Your Honours that such bank balance in its turn had not got accumulated with VFSPL by making cash deposits in bank account. Thus, in such circumstances, the sources of providing loan by VFSPL cannot be doubted (v) Finally, in respect of the loan transactions with VFSPL, it is submitted that the assessee has fully established the creditability of the loan creditor and as also the genuineness of the transactions, and therefore, the findings given by the learned AO at para (8.38) at page no. 31 of the assessment order, deserves to be set-aside. (vi) It is submitted that in respect of the above named lender company, the assessee had furnished all the necessary documentary evidences to establish the identitiy of the creditor company, the genuineness of the transactions and as also, the creditworthiness of the lender company. All these documents have also been placed by the assesssee in its Paper Book for A.Y. 2015-16. It is submitted that neither the AO, nor the ld. CIT(A) could find any specific discrepancy in respect of the documentary evidences furnished by the assessee. The ld. CIT(A) merely on the basis of some alleged statement given by Shri Rajesh Vyas has confirmed the additions. The ld. CIT(A) grossly erred in not appreciating the material fact that the statement of Shri Rajesh Vyas was recorded behind the back of the assessee and the assessee was not given any opportunity to cross-examine Shri Rajesh Vyas. It is submitted that in view of the ratio laid down by the Apex Court in the various judicial pronouncements, third parties statements cannot be relied upon without giving an opportunity of cross-examination to the person against whom such statements are purported to be used as evidences.” 14.4.3 We find that the main grounds of contention of the assessee are that (i) during the course of the assessment proceedings, it had furnished all the necessary documents to establish the identity of the loan creditor, the genuineness of the loan transactions and the creditworthiness of the loan creditor, as contemplated under the provisions of s.68 of the Act; (ii) the entire additions have been made by the AO only on the basis of some statement recorded behind the back of the assessee without providing the copy of such statement to the assessee and as also, without giving any opportunity of cross examination of Shri Rajesh Vyas to the assessee; (iii) the AO except relying upon some statement recorded behind the back of the assessee by some other authorities in some other proceedings did not bring on record any adverse material against the assessee; (iv) during the course of the assessment proceedings, no incriminating material or document was found wherefrom it could have been inferred that the unsecured loan transactions recorded in the regular books of account of the assessee were not genuine; (v) the transactions carried out by the assessee were of the nature of loan and not of the nature of share capital or share premium and IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 93 of 110 therefore, it was not required to prove the source of the source as contemplated under the proviso to section 68 of the Act; and (vi) since the interest expenditure were fully recorded in the books, the provisions of section 69C could not have been invoked. 14.4.4 We have carefully considered the findings of the AO, written as well as oral submissions made by the assessee, Special Audit Report, remand report of the AO and the rejoinder of the assessee thereon. We find that, before both the authorities below, the assessee had furnished the various documents relating to the above named lender company such as copy of certificate of incorporation, memorandum & articles of association, copy of income-tax return, copy of master data downloaded from website of MCA, copy of loan confirmation letter duly given by the lender company, copy of relevant bank statement of the lender company, copy of the relevant bank statement of the assessee, copy of the audited financial statements of the lender company.We find that all these documents have also been furnished by the assessee before us in its Paper Book for A.Y. 2015-16 at page no. 203 to 236. 14.4.5 We find that the ld. CIT(A) has confirmed the addition made by the AO in the assessee’s income in respect of the loan transaction claimed to have been carried out by tthe assessee with the above named loan creditor. We find that the relevant findings have been given by the ld. CIT(A) at para (4.4.5.E)of his Order. We find that the ld. CIT (A) has duly given a finding that before him, the assessee had furnished numerous documents for establishing its claim regarding the identity of the loan creditors, genuineness of the loan transactions and creditworthiness of the loan creditors. At the same breath, the ld. CIT(A) has also given the details and descripitions of the various documentary evidences furnished by the assessee before him. We find that despite acknowledging furnishing of all the documentary evidences by the assessee before him, the ld. CIT(A) has dislodged the claim of the assessee regarding the genuineness of the transactions merely on the basis of the statement of Shri Rajesh Vyas, one of the directors of the lender company which were recorded before the Investigation Wing u/s. 131(1A) of the Act. On the sole basis of the statement of Shri Rajesh Vyas, the ld. CIT(A) went on to confirm the action of the AO in making the subject additions. 14.4.6 We find that in the instant case, by furnishing all the necessary documentary evidences, as discussed hereinabove, the assessee could be able to discharge its initial onus of proving the nature and sources of credit entries relaing to the aforesaid loan creditor, as contemplated u/s. 68 of the Act. However, we find that in the instant case, both, the AO as well as the ld. CIT(A) have discarded and brushed aside such documentary evidences merely on the basis of some statement of Shri Rajesh Vyas, one of the directors of the lender company, recorded by some authority on 03/01/2017 u/s. 131(1A) of the Act. We find that the full text of the statement has been IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 94 of 110 reproduced by the AO at para (8.22) from page no. 17 to 23 of his Order. On a perusal of such statement, we find that, although the statement has been given on oath by Shri Rajesh Vyas, but, before which authority he administrated the Oath is not discernible. We find that from the entire statement name of the authority recording the statement is not given. We find that in the instant case, assessment proceedings u/s. 153A were initiated by the assessing officer by way of issuance of a notice dated 09/10/2017 which is placed at page no. 95 of the assessee’s Paper Book for A.Y. 2015-16. Thus, it is evident that the statement of Shri Rajesh Vyas was not recorded by the assessing officer during the course of the assessment proceedings. We further find that although at para (8.22) of the assessment order, the AO has made reference of such statement, but, nowhere it is the claim of the AO that the assessee was provided a copy of such statement. Since, the copy of the statement itself of Shri Rajesh Vyas was not provided to the assessee, in our considered view, there could not have been any occasion for the assessee to have a cross-examination of such Shri Rajesh Vyas upon his statement claimed to have been recorded on 03/01/2017 by the Investigation Wing. 14.4.7 We find full substance in the contention of the assessee that in the instant case, the AO was not only duty bound to provide a copy of the statement of Shri Rajesh Vyas, which was intended to be used against the assessee as an evidence, but, was also required to afford opportunity of cross examination of his witnesses to the assessee, which he miserably failed to do. In such circumstances, in our considered view, merely on the basis of one unconfronted statement, the AO was not legally justified in making the additions in respect of the aforesaid loan creditor i.e. VFSPL. 14.4.8 We find that on the issue of cross-examination, the Hon’ble Supreme Court in the case of M/s. KishinchandChellaram vs. CIT (1980) 125 ITR 713 (SC) was pleased to hold that the assessing officer is duty bound to confront the material collected by him to the assessee. The Hon’ble Supreme Court again 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 Assessee to crossexamine 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 Assessee was adversely affected. It is to be borne in mind that the orderof the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the Assessee disputed the correctness of the statements and wanted to crossexamine, the Adjudicating Authority did not grant this opportunity to the Assessee. 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 Assessee. However, no such opportunity was granted and the aforesaid plea is not even dealt with by the Adjudicating Authority. As far as IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 95 of 110 the Tribunal is concerned, we find that rejection of this plea is totally untenable. The Tribunal has simply stated that crossexamination of the said dealers could not have brought out any material which would not be in possession of the Assessee 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 Assessee wanted to cross-examine those dealers and what extraction the Assessee wanted from them. 6. As mentioned above, the Assessee had contested the truthfulness of the statements of these two witnesses and wanted to discredit their testimony for 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 crossexamination 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.” 14.4.9 Their Lordships of the Hon’ble Supreme Court, again, in the case of AyaaubkhanNoorkhan 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. ChintamanSadashivaVaishampayan 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- IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 96 of 110 examination of a witness. In the said case, the Assessee 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 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 crossexamination. 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 crossexamination, 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.” 14.4.10 The Hon’ble Gujarat High Court in the case of the Principal Commissioner of Income Tax Ahmedabad and Ors. vs. KanubhaiMaganlal 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 assessee 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.” IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 97 of 110 14.4.11 The Hon’ble Rajasthan High Court in the case of the CIT vs. S.C. Sethi (2007) 295 ITR 351 (Raj.) has held as under: “10. The facts stated above clearly indicate that no question of law arises in this appeal. The findings recorded by the Tribunal are findings of fact affirming the earlier finding of fact recorded by the Commissioner of Income- Tax (Appeals). Apparently when the loose papers by itself did not indicate receipt of the alleged undisclosed income by the assessee and peripheral reliance on the document was not earlier countenanced in absence of opportunity of cross examination of the person from whose possession the loose papers were recovered. The fact that the Assessing Officer has not made any efforts to serve the said Sh. A.K. Chhajer and secure his presence by invoking powers under the Income-tax Act for securing presence of any witness also goes to show that the Assessing Officer has not really made efforts to give effect to the directions of the Commissioner of Income-tax (Appeals) for making available opportunity of cross-examining Sh. A.K. Chhajer by the assessee.” 14.4.12 The Hon’ble Rajasthan High Court in the case of the CIT vs. Smt. Sunita Dhadda 2017 (7) TMI 1164 (Raj.), by taking into consideration the relevant case laws pronounced in various parts of the country, has also allowed the appeal of the assessee on the ground that the assessee was not given any opportunity of cross-examination of the persons whose statements were recorded and relied upon. Such an Order of the Hon’ble Rajasthan High Court has been upheld by the Hon’ble Supreme Court in CIT vs. Smt. Sunita Dhadda 2018 (3) TMI 1610 (SC) by dismissing the SLP of the Department. 14.4.13 Thus, in our considered view, in respect of the aforesaid loan creditor too, by furnishing the documentary evidences as discussed hereinabove, the assessee could be able to fully discharge its onus of proving all the three ingredients as contemplated u/s. 68 of the Act viz. (i) identity of the creditor; (ii) genuineness of the loan transactions; and (iii) creditworthiness of the loan creditor beyond all doubts. We also find that during the course of the search u/s. 132 of the Act, in the premises of the assessee company and its directors, no incriminating material or any evidence raising any doubt regarding the genuineness of the loan transactions with the above named creditor was found or seized. We further find that during the course of the assessment proceedings, despite making a specific request to this effect by the assessee, the AO did not make any independent inquiry either by way of issuance of summons u/s. 131 or by way of issuance of letters u/s. 133(6) of the Act to the aforesaid lender. We find that the sole basis for making the addition by the AO was some statement of Shri Rajesh Vyas recorded but since, neither the copy of such statement was provided to the assessee nor the assessee was given an opportunity of cross examination of Shri Rajesh Vyas, in our considered view, such statement of Shri Rajesh Vyas has no evidentiary value in the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 98 of 110 eyes of law against the assessee. We also find that the various case laws relied upon by the AO are not applicable to the assessee’s case. Thus, relying upon the decisions of the various judicial authorities as cited in the preceding paras, we find absolutely no justification in the AO’s making the addition in respect of the aforesaid loan creditor in the income of the assessee u/s. 68 of the Act. Accordingly, in our considered view, the addition u/s. 68 as well as u/s. 69C of the Act, made by the AO in respect of loan transactions carried out by it with M/s. VRR Financial Services Private Limited are not justified. 14.5 M/s. Sumeet & Sumeet Sales 14.5.1 We find that the AO, vide para (11) of his Order has made an addition of Rs. 20,00,000/- in the assessee’s income for A.Y. 2015-16 u/s. 68 of the Act in respect of credit entries found in the books of account of the assessee, for the relevant previous year, in the name of some ‘M/s. Sumeet & Sumeet Sales’. The brief facts relating to the issue, as emerging out from the assessment order, are that during the course of search/post search proceedings, it was found that the assessee has shown certain transactions with one concern called Sumeet & Sumeet Sales. As per the AO, this is a namesake proprietary concern of Shri Sumeet Garg who is an ordinary person who has no connection with the assessee’s business. Accordingly, the AO, vide show-cause notice dated 31/10/2018, required the assessee to furnish its explanation on the said issue. The AO also made a reference of statement of Shri Sumeet Garg recorded by the Investigation Wing. In reply, the assessee, vide its letter dated 07.12.2018, furnished its detailed explanation. The AO, while framing the assessment order, averted that cash was introduced in the bank account of M/s. Sumeet & Sumeet Sales which was then transferred to various companies of Global group including the assessee. Finally, the AO, inter alia, made an addition of Rs.20,00,000/- in A.Y. 2015-16 in the assessee’s income on account of receipts from bank account of M/s. Sumeet & Sumeet Sales by treating the same as unexplained cash credit u/s. 68 r.w.s. 115BBE of the Act. 14.5.2 We find that the ld. CIT(A) while adjudicating the appeal of the assessee on this issue for A.Y. 2015-16, has confirmed the addition of Rs. 20,00,000/- so made by the AO on account of receipts made by the assessee from the bank account of M/s. Sumeet & Sumeet Sales against which the assessee is in appeal before us. The ld. CIT(A) has given the necessary findings at para (4.7.2) from page no.169 to 171 of his Order. Before us, the assessee has filed a written synopsis on the subject addition, the relevant abstract whereof is reproduced as under: “7.05 LOAN OF RS. 20,00,000/- FROM M/S. SUMEET & SUMEET SALES A.Y. 2015-16 [ASSESSEE’S APPEAL] & LOAN OF RS. 20,50,000/- A.Y. 2016-17 [DEPARTMENT’S APPEAL] & INTEREST THEREON IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 99 of 110 [AO’s Findings at para (8.38) at page no. 31] [CIT(A)’s Findings at para (4.7. 2) at page no. 169 to 171] (i) Your Honours, it is submitted that during the previous year relevant to A.Y. 2015-16, the assessee company has obtained fresh loan of Rs.20,00,000/- from M/s. Sumeet & Sumeet Sales and has paid interest of Rs.55,726/- to the aforesaid concern. It is submitted that the ld. AO has made a separate addition of Rs.20,00,000/- in the assessee’s income for the relevant assessment year on account of unsecured loan from the aforesaid concern. (ii) Your Honours, at the outset, it is submitted that the finding of the learned AO to the effect that the assessee had taken the unsecured loansof Rs.20,00,000/- and Rs.20,50,000/- respectively in A.Y. 2015-16 and A.Y. 2016-17 from M/s. Sumeet & Sumeet Sales is partially incorrect. It is submitted that during the previous year relevant to A.Y. 2015-16, the assesseecompany had taken unsecured loan from M/s. Sumeet & Sumeet Sales only for the sum of Rs.20,00,000/- and the sum of Rs.20,50,000/- pertains to refund of loan along with interest thereon during the immediately succeeding previous year relevant to A.Y. 2016-17. (iii) Your Honours, it is submitted that even the impugned addition of Rs.20,00,000/-so made by the learned AO in the assessee’s income on account of unsecured loan from M/s. Sumeet & Sumeet Sales during the previous year relevant to A.Y. 2015-16 was not called for, in view of the facts and circumstances, as discussed in the ensuing paras. 3.00 Your Honours, the relevant findings on the subject issue have been given by the learned AO, from para (11.00) at page no. 72 to para (11.11) at page no. 88 of the impugned order. 3.01 Your Honours, during the course of the assessment proceedings, the learned AO vide his show-cause notice dated 31-10-2018[kindly refer Page No. 116 to 163 of our Paper Book for A.Y. 2013-14] had required the assessee to furnish its explanation on the subject issue. In response to the aforesaid query, the assessee vide its letter dated 07-12-2018[kindly refer Page No. 116 to 163 of our Paper Book for A.Y. 2013-14],made its very elaborative explanation on the subject issue along with necessary documentary evidences.For a ready reference, the relevant abstract of the reply of the assessee made before the ld.AO, vide letter dated 07-12-2018, is being reproduced as under : I. EXPLANATION ON THE ISSUE OF CREDIT ENTRIES FOUND MADE IN VARIOUS BANK ACCOUNTS DURING THE FINANCIAL YEARS RELEVANT TO ASSESSMENT YEARS 2011-12 TO ASSESSMENT YEAR 2017-18 INCLUDING ON THE CREDIT ENTRIES RELATING TO M/S. SUMEET AND SUMEET SALES 1.01 In this context, at the outset, it is submitted that except carrying out certain financial transactions during the financial year 2014-15 and 2015-16, relevant to A.Y. 2015-16 and A.Y. 2016-17, during the entire periods under assessment, we have NOT carried out any financial transaction either with IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 100 of 110 Shri Sumeet Garg or with his proprietorship concern M/s. Sumeet & Sumeet Sales. It is submitted that during the financial year 2014-15 relevant to A.Y. 2015-16, we had genuinely taken unsecured loans aggregating to a sum of Rs.20,00,000/- through RTGS from M/s. Sumeet & Sumeet Sales Corporation. On such unsecured loans, our company credited the account of M/s. Sumeet & Sumeet Sales Corporation with a sum of Rs.55,726/- after debiting the account with the amount of TDS at Rs.5,573/-. Thus, at the end of the financial year 2014-15 as on 31-03-2015, our company was having deposit of Rs.20,50,153/- from the aforesaid concern. The entire deposits have been repaid by our company, in three trenches, again through RTGS during the financial year 2015-16 relevant to A.Y. 2016-17, thereby squaring-off its account completely in our books of account. In evidence of such assertion, we are submitting herewith a copy of account of M/s. Sumeet & Sumeet Sales in our books of account for the period from 01-04-2010 to 31-03-2017 as Annexure B-1.01. 1.01.1 Sir, in the captioned notice, your good self has made reference of a statement given by Shri Sumeet Garg (Proprietor, Sumeet & Sumeet Sales). A copy of the statement of Shri Sumeet Garg has also been provided to us. For a ready reference, the same is being submitted herewith as Annexure B-1.02. On a perusal of such statement, we observed that the statement of Shri Sumeet Garg is not hand written but it is in a computerized form. Upon enquiry from Shri Sumeet Garg, he intimated us that the contents of this computerized statement are not factually correct. It has been apprised to us that originally his statement was recorded by one of the inspectors of the Investigation Wing in hand written form and such statement was duly shown to him. It has been averted by Shri Sumeet Garg that in the originally recorded hand written statement, those contents were not there as he found in the computerized statement. He affirmed that he had never stated that any cash in any of his bank accounts was deposited by any of the persons of Global group. On the contrary, he asserted that before the officer recording the statement he had categorically stated that he was in receipt of certain cash amount against sale of a property, in which he had vested interest under an agreement to purchase, from some farmer. It was stated that out of cash so received, from time to time, he had, voluntarily, deposited cash in his bank account. Shri Sumeet Garg also confirmed that he had apprised before the officer recording the statement that the funds to various entities of the Global group were genuinely given by him and also confirmed that within a short span of time, the entire funds so given have got refunded to him. He categorically denied to have stated that cash for making deposits in his bank accounts were provided either by Shri Ashok Choudhary or anyone else of the Global group. Shri Sumeet Garg, firmly confirmed that he was detained in the office of the Investigation Officer till 8 PM and after taking the print out of computerized statement he was compelled, rather pressurized to put his signatures on the statement without even allowing him to read the same. In such circumstances, Shri Sumeet Garg completely denied the contents of the computerized statement referred to by your good self. In support of his retraction of the computerized statement, Shri Sumeet Garg has given an affidavit before Notary Public and the same, in original, is being submitted herewith for your kind perusal and record as Annexure B-1.03. IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 101 of 110 1.01.3 Sir, on a perusal of the facts stated above, it shall be appreciated by your good self that the statement of Shri Sumeet Garg as referred to by your good self were obtained forcefully and without his free consent and, therefore, no credence can be given to such statement for forming any adverse view against our company. It is reiterated that the transactions carried out by our company with Shri Sumeet Garg, as recorded in our books of account, are correct and our company never provided any cash to Shri Sumeet Garg or anyone else for issuing cheques in our favour. In order to establish the genuineness of the transactions carried out by our company, we are also submitting herewith a copy of letter of confirmation duly given by Shri Sumeet Garg as Annexure B-1.04. 1.01.4 In view of the above facts, it is submitted that no adverse inference deserves to be drawn at your end in respect of genuine transactions carried out by our company with M/s. Sumeet & Sumeet Sales through its proprietor Shri Sumeet Garg. 1.01.5 Before parting on the issue, it is submitted that despite our making submission as aforesaid and despite our furnishing an affidavit of Shri Sumeet Garg, retracting his earlier computerized statement, if still your good self chooses to rely upon the statement of Shri Sumeet Garg, then it is prayed that as per the settled position of law, before relying upon the statement of a third party, your good self would be duty bound to provide us an opportunity of cross examination of Shri Sumeet Garg and, therefore, such an opportunity, if needed, be given to us. 3.02 Your Honours, the learned AO, by discarding and disregarding the explanation of the assessee,made the impugned additions of Rs.20,00,000/- and Rs.20,50,000/- in the assessee’s income in the A.Y. 2015-16 and A.Y. 2016-17 respectively on account of alleged unexplained unsecured loans from M/s. Sumeet & Sumeet Sales by making an allegation that the assessee was engaged in routing its own unaccounted funds into its books of account in form of cash credits, by making M/s. Sumeet & Sumeet Sales as conduit for the same. 4.00 Your Honours, before delving with the issue, it shall be pertinent to note that the learned AO has made the impugned addition merely on the basis of some information available with him as regard to the loan creditor allegedly gathered behind the back of the assessee.The learned AO in the Assessment Order has referred to one statement of Shri Sumeet Garg Prop. of M/s. Sumeet & Sumeet Sales allegedly recorded under s.131(1A) of the Act by the Investigation Wing. Besides relying on such statement, the learned AO also made a reference of the bank statement of Shri Sumeet Garg. It is submitted that during the course of the assessment proceedings, the assessee company, vide its letter dated 07-12-2018 [kindly refer PB Page No. 116 to 163 of our Paper Book for A.Y. 2013-14],requested the learned AO to provide it an opportunity of cross examination of Shri Sumeet Garg on whose statement the learned AO has placed his reliance.However, the learned AO has not afforded any opportunity of cross examination to the assessee company and straight forward, ventured into making the impugned addition in the hands of the assessee. It is a settled law that without giving any opportunity of cross IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 102 of 110 examination of third persons, on whose statements the ld. AO relied upon, no addition can be made. 5.01 Your Honours,during the financial year 2014-15 relevant to A.Y. 2015- 16, the assessee had genuinely taken unsecured loans aggregating to a sum of Rs.20,00,000/- through RTGS, in three trenches, from M/s. Sumeet & Sumeet Sales Corporation. On such unsecured loans, the assessee company had credited the account of M/s. Sumeet & Sumeet Sales Corporation with a sum of Rs.55,726/- after debiting the account with the amount of TDS at Rs.5,573/-, at the end of the financial year 2014-15 as on 31-03-2015, the assessee was having deposit of Rs.20,50,153/- from the aforesaid concern. It is submitted that the entire deposits had been repaid by the assessee, in three trenches, again through RTGS during the financial year 2015-16 relevant to A.Y. 2016-17, thereby squaring-off its account completely in the books of account. For a better understanding of the financial transactions entered with M/s. Sumeet & Sumeet Sales, we are submitting herewith an abstract of ledger account of M/s. Sumeet & Sumeet Sales for the financial year 2014-15 & financial year 2015-16, as under : Date Particulars Debit Amount Date Particular Credit Amount Financial Year 2014-15 31-03-2015 To TDS 5,573 08-12-2014 By Bank 6,00,000 31-03-2015 To Bal c/d. 20,50,153 08-12-2014 By Bank 8,00,000 08-12-2014 By Bank 6,00,000 31-03-2015 By Interest 55,726 TOTAL 20,55,726 TOTAL 20,55,726 Financial Year 2015-16 20-05-2015 To Bank 9,00,000 01-04-2015 By Bal b/d. 20,50,153 21-05-2015 To Bank 5,50,153 21-05-2015 To Bank 6,00,000 TOTAL 20,50,153 TOTAL 20,50,153 Further, in evidence of the aforesaid assertion, a copy of account of M/s. Sumeet & Sumeet Sales in the assessee’s books of account is placed at Page No. 519 of our Paper Book. 5.02 Your Honours, it is submitted thatthe entire loan of Rs.20,00,000/- had been obtained by the assessee company through banking channels only, which can very well be verified from the copies of the relevant bank IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 103 of 110 statements of M/s. Sumeet & Sumeet Sales which are also being reproduced by the ld. AO at para (11.7) on page no. 80 to 84 of the impugned Order. 5.02.1 Your Honours, the fact of repayment of loan by the assessee to the lender Shri Sumeet Garg in itself speaks about the genuineness of the loan transactions as claimed by the assessee. It is submitted that had the assessee not taken any genuine loan, the question of repayment thereof and that too, through the banking channel would not have arisen. It is submitted that it is not the case of the learned AO that the sum of repayment routed back to the assessee by the lender. In such circumstances, by any stretch of imagination, the genuineness of the loan transaction ought not to have been disbelieved by the learned AO. For such proposition, reliance is placed on the following judicial pronouncements: i) Gujarat Television Pvt. Ltd. vs. ACIT (2018) 101 CCH 451 (GujHC) ii) ITO vs. Satyanarayan Agrawal (2007) 112 TTJ 717 (JodhTrib.) iii) ITO vs. Gouri Shankar Singhal (2013) 38 CCH 24 (JodhTrib.) iv) KundlesLoh Udyog vs. ITO (2016) 45 ITR (Trib.) 11 (Chd.) v) ACIT vs. H.K. Pujara Builders (2019) 198 TTJ 981 (MumTrib.) 5.03 Your Honours, the learned AO, while making the impugned addition, has alleged that before the subject loan transaction, cash was deposited by the Global group itself in the bank account of Shri Sumeet Garg. In this regard, it is submitted that undisputedly, the immediate source of the loan given by the loan creditor is the deposition of cash in his bank account. However, it is strongly objected that such cash was not deposited by the assessee company or any of its employee/associates but the cash was actually deposited by Shri Sumeet Garg himself out of the receipt of certain cash amount against sale of a property, in which he had vested interest under an agreement to purchase, from some farmer. 6.00 Your Honours, it is submitted that the assessee by furnishing the necessary documents had duly discharged its initial onus of proving the identity of the loan creditors, the genuineness of the transactions and creditworthiness of loan creditors beyond all doubts and in accordance with the provisions of s.68 of the Act. It isfurther submitted that during the course of assessment proceedings, the assessee, vide its letter dated 25-07- 2019[kindly refer PB Page No. 174 to 215 of our Paper Book for A.Y. 2013-14], had specifically requested the learned AO that if he wish to make further verification or investigation in the matter,then a summons under s.131 or letters under s.133(6) of the Act to the loan creditors may be issued in order to further substantiate the claim of the assessee. However, despite making such specific request, the learned AO did not carry out any independent enquiry by himself and proceeded further by solely relying upon the statement of the loan creditor recorded by the Investigation Wing. Such a failure on the part of the learned AO was not permissible and is bad-in-law. For such proposition, reliance is placed on the following judicial pronouncements : IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 104 of 110 i) CIT vs. Shri Sai Vihar (2016) 28 ITJ 158 (Trib. - Raipur) ii) CIT V Ramesh Chander Shukla10 ITJ 286 (Madhya Pradesh HC) iii) Manna Lal Murlidhar79 ITR 540 iv) Radhe Sham Jagdish Prashad117 ITR 186 v) G. Shubha Devi vs. ITO (2019) 307 CTR 0536 (Kar.) vi) Anil Kumar Midha (HUF) vs. ITO (2006) 100 TTJ 0644 vii) ITO vs. Sanjay Kumar Goel (2007) 108 TTJ 0823 (Del.) viii) Mass Con (India) Pvt. Ltd. vs. ITO (2013) 37 CCH 0143 (Del.) ix) CIT vs. Rajeev Shukla (2007) 207 CTR 0253 (MP HC) 7.00 Your Honours, in the impugned assessment order at para (11.5) the ld. AO has made reference of a statement given by Shri Sumeet Garg (Proprietor, Sumeet & Sumeet Sales). On a perusal of such statement,it would be observed that the statement of Shri Sumeet Garg is not hand written but it is in a computerized form. Upon enquiry from Shri Sumeet Garg by the assessee, Shri Sumeet Garg intimated the assessee that the contents of this computerized statement are not factually correct. It has been apprised to the assessee that originally his statement was recorded by one of the inspectors of the Investigation Wing in hand written form and such statement was duly shown to him. It has been further averted by Shri Sumeet Garg that in the originally recorded hand written statement, those contents were not there as he found in the computerized statement. Shri Sumeet Garg affirmed that he had never stated that any cash in any of his bank accounts was deposited by any of the persons of Global group. On the contrary, he asserted that before the officer recording the statement he had categorically stated that he was in receipt of certain cash amount against sale of a property, in which he had vested interest under an agreement to purchase, from some farmer. It was stated that out of cash so received, from time to time, he had, voluntarily, deposited cash in his bank account. Shri Sumeet Garg also confirmed that he had apprised before the officer recording the statement that the funds to various entities of the Global group were genuinely given by him and also confirmed that within a short span of time, the entire funds so given have got refunded to him. He categorically denied to have stated that cash for making deposits in his bank accounts were provided either by Shri Ashok Choudhary or anyone else of the Global group. Shri Sumeet Garg, firmly confirmed that he was detained in the office of the Investigation Officer till 8 PM and after taking the print out of computerized statement he was compelled, rather pressurized to put his signatures on the statement without even allowing him to read the same. In such circumstances, Shri Sumeet Garg completely denied the contents of the computerized statement referred to by the ld. AO. In support of his retraction of the computerized statement, Shri Sumeet Garg had given an affidavit duly sworn before the Notary Public and a copy of such Affidavit was duly furnished by the assessee along with its written submission dated 07-12- 2018 made before the learned AO during the course of the assessment proceedings. A copy of such Affidavit is placed at Page No 520 to 526 of our Paper Book. 7.01 Your Honours, in the present case, it is reiterated that the learned AO himself neither conducted any independent enquiry nor recorded statement of the lender Shri Sumeet Garg. Despite making specific request, the learned AO IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 105 of 110 stucked to the statement of the lender, allegedly recorded by the Investigation Wing. The learned AO did not give any attention to the subsequent Affidavit furnished by the lender in which he had unequivocally, confirmed the loan transactions and had also denied the veracity of the typed statement purported to be given by him before the Investigation Wing. It is submitted that it is a settled law that a statement taken under influence and coercion has no evidentiary value if subsequently the person giving the statement denies the same and also show the circumstances under which such statement came to be prepared. It is submitted that in the light of the denial of the contents of the purported statement by Shri Sumeet Garg, it was incumbent upon the learned AO to record the fresh statement of Shri Sumeet Garg to unearth the truth, which he miserably failed to do so. 8.00 Your Honours, on the facts and circumstances of the case, it shall be appreciated that the assessee had fully discharged its onus of proving the genuineness of the loan transactions by furnishing all the necessary documentary evidences. It shall also be appreciated that the learned AO neither could find any defect or discrepancy in the documentary evidences so furnished by the assessee nor could conduct any independent enquiry on his own to rebut the documentary evidences so furnished. The learned AO also failed to appreciate that the subject loan was subsequently repaid by the assessee through banking channels. The learned AO also could not rebut or controvert or make any adverse comment on the Affidavit given by the lender despite assessee’s furnishing a copy of the same before him during the course of the assessment proceedings. 8.01 Your Honours, it is a settled law that merely for the reason that the cash creditor has deposited cash in his bank account before giving loan to an assessee, it is not a sine-qua-non that such loan transactions should be disbelieved. If the cash creditor is able to demonstrate the sources of availability of cash with him, then, the utilization of such cash by him for making deposit in his own bank account and advancing such funds, through banking channels, need not to be doubted per se. It is submitted that during the course of the entire search proceedings in the premises of the assessee and its directors, not a single evidence was found from which it could have been inferred that the assessee had provided any cash to the lender for procuring the subject loan. 5.00 Your Honours, the ld. CIT(A) has confirmed the subject addition made by the ld. AO under s. 68 of the Act by way of giving his findings at para (4.7.2) at page no. 169 to 172 of the impugned appellate order. It is submitted that the ld. CIT(A) has although acknowledged furnishing all the necessary documents by the assessee for establishing the genuiness of the loans. However, the ld. CIT(A) without assigning any cogent reason, chose to brush aside all these documentary evidences. The ld. CIT(A) has confirmed the impugned addition merely for two reasons viz. (i) the cash deposits were found made in the bank accounts of the lender and (ii) the lender in his statement given under s. 131(1A) of the Act, before the investigation wing, had admitted the non-genuinness of transactions. In this regard, it is submitted that the genuineness of the loan transactions, cannot be disbelieved merely for the reason that the lender had advanced the money by way of making the deposit IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 106 of 110 in his bank account. It is submitted that in the instant case, the assessee had established that the lender was in receipt of some cash proceeds against sale of some of his properties to some farmers and out of such cash proceeds, he had advanced loan to the assessee company. The assessee had also furnished an Affidavit of the proprietor of M/s. Sumeet & Sumeet to this effect which remained uncontroverted or unrebuted. As regard the placing of the reliance on the statement of Shri Sumeet Garg, by the Investigation Wing, it is reiterated that subsequently, by way of an Affidavit, Shri Sumeet Garg has retracted his earlier statement by way of an Affidavit sworn before Notary public which was duly furnished before the AO as well as the ld. CIT(A). In the Affidavit, Shri Sumeet Garg has clearly denied to have given any adverse statement accepting non genuineness of the loan transactions with the assessee. Shri Sumeet Garg further stated that under what circumstances his signatures were obtained forcefully on the statement recorded by the Investigation Wing. It is submitted that after having the Affidavit of Shri Sumeet Garg on record, it was incumbent upon the ld. AO to record a fresh statement of Shri Sumeet Garg to unearth the truth for which he miserably failed to. In such circumstances, it is submitted that the ld. CIT(A) was not justified in upholding the addition of Rs. 20,00,000/- so confirmed by the ld. AO under s. 68 of the Act in respect of loan from M/s. Sumeet & Sumeet Sales. 8.00 Your Honours, there are plethora of judgments including those of the Hon’ble Jurisdictional High Court which have held that once the identity & creditworthiness of the loan creditors and genuineness of loan transactions are established, no addition can be made in the hands of the loan recipient. 18.00 Your Honours, the submissions set out in the preceding paras pertain to the additions made by the AO for A.Y. 2015-16 only. However, our submissions and arguments, on the issue for the other assessment years involve are also on the similar line. It is submitted that in respect of those loan creditors for which the ld. CIT(A) has granted relief to the assessee, we, wish to place reliance on the findings given by the ld. CIT(A) and for those additions which have been confirmed by the ld. CIT(A), we wish to place reliance upon our written submissions made before the ld. CIT(A). 20.00 Your Honours, now, in respect of the alleged unexplained expenditure of the assessee towards payment of interest to various lenders, it is submitted that the learned AO was not justified in invoking the provisions of section 69C of the Income-Tax Act, 1961. Before delving with the issue in hand, it shall be appropriate to have a look at the provisions of section 69C of the Income-Tax Act, 1961, which, for a ready reference, is reproduced as under: "Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year: IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 107 of 110 Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income." 20.01 Your Honours, it is submitted that the provisions of section 69C can be invoked if an assessee is found to have incurred any expenditure and the sources of such expenditure are not explained by the assessee. However, in the instant case, the assessee has not only explained the interest payments made by it but has also explained the sources of the funds in respect of which such interest payments havebeen made. It is therefore, most humbly submitted that the entire interest payment to various lender companies be held as genuine and allowable under s. 36(1)(iii) of the Act.” 14.5.3 We find that the main grounds of contention of the assessee, on the subject addition of Rs. 20,00,000/-, are that(i) during the course of the assessment proceedings, it had furnished all the necessary documents to establish the identity of the loan creditor, the genuineness of the loan transactions and the creditworthiness of the loan creditor, as contemplated under the provisions of s.68 of the Act; (ii) the entire loan so taken was repaid by it through banking channel during the financial year relevant to A.Y. 2016-17 along with the amount of interest. (iii) after having discharged its initial onus of proving during the course of the assessment proceedings, the assessee had specifically requested the AO to issue the summons u/s. 131 / notices u/s. 133(6) to the loan creditor but despite making such specific request, the AO did not do the same and made the addition; (iv) the entire additions have been made by the AO only on the basis of statement of Shri Sumeet Garg recorded u/s. 131(1A) of the Act before the Investigation Wing; (v) the AO has not given any credence and even made a reference of an Affidavit of retraction duly given by Shri Sumeet Garg before him, a copy whereof is placed on record; (vi) during the course of the assessment proceedings, it was duly explained that cash were deposited by Shri Sumeet Garg, Proprietor of M/s. Sumeet & Sumeet Sales from his own sources; (vii) during the course of the assessment proceedings, no incriminating material or document was found wherefrom it could have been inferred that the unsecured loan transactions carried out by the assessee with M/s. Sumeet & Sumeet Sales recorded in the regular books of account of the assessee were not genuine and finally, (viii) the AO relied upon the statement of Shri Sumeet Garg, but, no opportunity of cross-examination was afforded to the assessee. 14.5.4 We find that the ld. CIT(A) has confirmed the addition made by the AO in the assessee’s income in respect of the loan transaction claimed to have been carried out by tthe assessee with the above named M/s Sumeet and Sumeet Sales Corporation. We find that the relevant findings have been given by the ld. CIT(A) at para (4.7.2) of his Order. We find that the ld. CIT (A) has duly given a finding that before him, the assessee had furnished IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 108 of 110 numerous documents for establishing its claim regarding the identity of the loan creditors, genuineness of the loan transactions and creditworthiness of the loan creditors and as also, a copy of an Affidavit of Shri Sumeet Garg retracting his own statemen given earlier. However, the ld. CIT(A) discarded the assessee’s claim only on two counts viz. (i) finding of huge cash deposits in the bank accounts of M/s. Summet & Sumeet Sales and (ii) admission of non-genuineness of the transactions by the proprietor of the concern in the statement recorded u/s. 131(1A) of the Act. 14.5.5 We find that in the instant case, undisputedly, the identity of the loan creditor cannot be doubted as according to the AO himself, in response to the summons issued by the Investigation Wing, the proprietor of the loan creditor concern i.e. Shri Sumeet Garg had got appeared before the Investigation Wing and had given his statements u/s. 131(1A) of the Act. We further find that undisputedly, the subject loan transaction was carried out through banking channels and the AO in the body of the assessment order itself at page nos. 80 to 84 has scanned the copies of bank statements of the loan creditors. From the copy of the bank statement of the loan creditor, we find that in such bank statement, clearance of three cheques amounting to Rs. 6,00,000/-, 6,00,000/- and Rs. 8,00,000/- on 08/12/2014 in the name of the assessee company are getting clearly reflected. However, we find that on the same date, four entries of deposition of cash for an aggregate sum of Rs. 20,00,000/- are also getting reflected. We find that before the authorities below, the assessee had submitted that the very source of cash in the hands of the loan creditor was sales proceed from some of his agricultural lands. We find that the AO has not made any further enquiry on the explanation of the assessee. In our considered view, merely for the reason that immediately before issuance of the cheques, equivalent amount of cash was found deposited in the bank account of the lender, could not be the sole reason for disbelieving the genuineness of any loan transaction. 14.5.6 We further find that before the authorities below, the assessee had furnished a copy of Declaration duly signed by Shri Sumeet Garg Proprietor of M/s.Sumeet & Sumeet Sales dated 03/10/2018. A copy of such Declaration has also been furnished by the assessee before us in his Paper Book for A.Y. 2015-16 at page no. 520 to 526. From such declaration, we find that at para (4) of the Declaration, Shri Sumeet Garg has clearly stated to have given loan aggregating to a sum of Rs. 20,00,000/- to the assessee company. At para (5) of the Declaration, Shri Sumeet Garg has stated to have given the loans out of his explained sources only. At para (8) of the Declaration, Shri Sumeet Garg has clearly denied to have made any statement before any authority admitting the non-genuineness of the transactions. At para (9), Shri Sumeet Garg has clearly stated that his statement was obtained under duress and pressure and finally, at para (10), Shri Sumeet Garg has retracted his statement recorded on 26/12/2016.In our considered view, a statement given by a third party, behind the back of an assessee, which is subsequently retracted by specifying the IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 109 of 110 circumstances in which the original statement was given, has no evidentiary value by itself. We also find that Shri Sumeet Garg has clearly stated that cash deposits in his bank account were made by him only out of his own resources only. We find that during the course of the search proceedings in the various premises of the assessee company and its directors, no incriminating material or evidence was found or recovered which could have given a slightest idea regarding the non-genuineness of the loan transactions carried out by the assessee with M/s. Sumeet & Sumeet. We also find that in the instant case, the ld. AO himself has not conducted any independent enquiry either by way of issuance of summons u/s. 131 or letters u/s. 133(6) of the Act to the lender, despite the assessee’s making a specific request to this effect. We find that the ld. AO sticked only to the statement given by the lender before the Investigation Wing which got subsequently retracted. 14.5.7 We also find full substance in the contention of the assessee that in the instant case, the AO was not only duty bound to provide a copy of the statement of Shri Sumeet Garg, which was intended to be used against the assessee as an evidence, but, was also required to afford opportunity of cross examination of his witnesses to the assessee, which he miserably failed to do. In such circumstances, in our considered view, merely on the basis of one unconfronted statement, the AO was not legally justified in making the additions in respect of the aforesaid loan creditor i.e. M/s. Sumeet & Sumeet Sales. In the preceding paras, we have already cited various judicial authorities for the proposition that without giving an opportunity of cross examination of the person making the statement, merely on the basis of the statement of a third party, no adverse inference can be drawn against an assessee and therefore, in respect of the present lender, we refrain ourselves to make the same discussions again. 14.5.8 In the light of the aforesaid findings, we find no substance in the action of the AO in making the addition of Rs. 20,00,000/- in the assessee’s income for A.Y. 2015-16 on account of unexplained receipts from bank account of M/s. Sumeet & Sumeet Sales and accordingly, the same is hereby directed to be Deleted. 14.5.9 In view of the findings given above, we find absolutely no substance in the various additions made by the AO, vide para (9) and (11) of his assessment order in respect of various unsecured loans and interest payments thereon. Consequently, the Revenue’s Ground No. 1 for A.Y. 2015- 16, A.Y. 2016-17 & A.Y. 2017-18 is hereby dismissed and the Assessee’s Ground Nos. 2(a) to 2(c) for A.Y. 2015-16 & A.Y. 2016-17 and Ground Nos. 3(a) & 3(b) A.Y. 2015-16 are Allowed. 15. Ground No. 1 of the Assessee for A.Y. 2015-16 & A.Y. 2016-17 IT(SS)A No.166 to 169/Ind/2020 IT(SS)A No.77 to 80/Ind/2021 Assessment Years: 2012-13 to 2016-17 Assessment Years: 2014-15 to 2017-18 M/s. Global Trade Venture Pvt. Ltd. Page 110 of 110 15.1 Through this ground of appeal, the assessee has challenged the additions confirmed by the ld. CIT(A). In the written submissions, the assessee itself has submitted that in the Appeal Memos, it has taken separate grounds of appeal in respect of each and every addition confirmed by the ld. CIT(A) and further since, all the grounds of the assessee agitating the addition confirmed by the ld. CIT(A) have already been adjudicated supra, in our considered view, no separate adjudication on this Ground is warranted. Accordingly, this ground of appeal of the Assessee for A.Y. 2015- 16 & A.Y. 2016-17 is hereby Dismissed. 16. In the result, the appeals of the Revenue are dismissed and the appeals of the assessee are partly allowed. The order pronounced as per Rule 34 of ITAT Rules, 1963 on 26.04.2022. Sd/- Sd/- (MAHAVIR PRASAD) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 26.04.2022 Patel/Sr. 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
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