ACIT, Cen. Cir. 3(1), Kolkata V. Pritam Beria, Kolkata

ITSSA 35/KOL/2022

AI Insights

The case involves appeals by the Revenue against the orders of the CIT(A) which had deleted the additions made by the Assessing Officer in the case of Pritam Beria for the Assessment Years 2014-15 and 2015-16. The additions were made on the basis of the respondent's alleged undisclosed investments in Siddha Group projects, which the Assessing Officer treated as unexplained investments under section 69 of the Income Tax Act. The CIT(A) found that the additions were not justified as no incriminating material was found during the search, and the investments were made by separate legal entities which were independently assessed for tax. The Tribunal agreed with the CIT(A)'s decision, emphasizing that the additions were made on the basis of suspicion and conjecture rather than concrete evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 128760 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-11-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 02-06-2022
• Other Referred Cases: CIT vs. Kabul Chawla, PCIT vs. Meeta Gutgutia, PCIT vs. Kurele Paper Mills (P.) Ltd., CIT vs. Veerprabhu Marketing Ltd., PCIT vs. Salasar Stock Broking Ltd., CIT vs. Param Dairy Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained investment; Search and seizure; Document seized; Additional evidence; Question of law; Retraction; Documents seized
• Section: 147; 68; 69; 132; 271(1)(c); 139; 143(3); 142(1); 133A; 153A; 14A; 143(1); 250; 143(2); 264; 139(1); 158BC; 43; 73; 13; 153; 22; 153C

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA डॉ. मनीष बोरड, ल े खा सदस्य एवं श्री संजय शमा ा , न्याधयक सदस्य क े समक्ष Before DR. MANISH BORAD, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 A.C.I.T., Central Circle-3(1), Kolkata........................Appellant Vs. Pritam Beria.........................................................Respondent [PAN: ACBPB 1015 D] Appearances by: Sh. G.H. Sema, CIT (DR), appeared on behalf of the Revenue. Sh. Manish Tiwari, FCA, appeared on behalf of the Assessee. Date of concluding the hearing : November 22 nd , 2022 Date of pronouncing the order : February 20 th , 2023 ORDER Per Manish Borad, Accountant Member: The captioned appeals filed by the Revenue pertaining to the Assessment Years (in short “AY”) 2014-15 & 2015-16 are directed against separate orders passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income Tax (Appeals)-21, Kolkata [in short ld. “CIT(A)”] dated 31.03.2022. I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 2 of 46 2. The Revenue is in appeal before this Tribunal raising the following common grounds: “I) That on the facts and circumstances of the case, the Ld. CIT (A) is not justified in law as well as facts in deleting the addition made during assessment proceedings completed u/s 153A/143(3). II) That on the facts and circumstances of the case, the Ld. CIT(A) is not justified in law as well as facts in ignoring the facts that being partner in a concern some investment is required. III) That on the facts and circumstances of the case, the Ld. CIT (A) is not justified in law as well as facts in ignoring the statement of the Shri Pritam Beria, wherein he has admitted that he was partner in Siddha Projects for 4 to 5 years. IV) That the Department craves leave to add, modify or alter any of the grounds and/or adduce additional evidence at the time of hearing of the case.” 3. As the issues raised in these appeals are common and the facts are identical, therefore, as agreed by both the parties, they are heard together and disposed off by way of this common order for the sake of convenience and brevity. For adjudication purpose we will take up the facts in IT(SS)A No. 35/KOL/2022 for AY 2014- 15 and our decision in this appeal shall apply mutatis mutandis on all the remaining appeals. 4. Brief facts of the case as culled out from the records are that search and seizure action u/s 132 of the Act was conducted on12.09.2017 at GPT Group which is engaged in the business of manufacturing of concrete sleeper for railways, hospital, manufacturing of SG cast iron shoulders. The assessee was also covered in search. The assessee is a practicing-chartered accountant and is a partner of M/s. P. Beria & Associate and derives income mainly out of remuneration received from the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 3 of 46 partnership firm in lieu of services rendered, share of profit and income from interest and capital gain. Original return of income u/s 139(1) of the Act for AY 2014-15 was submitted on 11.06.2014 declaring total income of Rs. 2,64,100/-. Subsequent to search notice U/s 153A of the Act was issued and in response, the assessee filed the return for the year under appeal i.e. AY 2014-15 on 27.11.2018 declaring the same income i.e. 2,64,100/- as declared in the original return of income. This was followed by serving of notices u/s 143(2) & 142(1) of the Act. During the course of search, documents bearing ID-PB/1, PB/2 & PB/3 were found and seized which contain the details of different project of details Group. Ld. AO observed that the assessee is a partner in many projects of Siddha Group. In the assessment order ld. AO referred to various loan transactions taken by Siddha Infradev LLP and other concerns of Siddha Group and has also referred to booking money received by Siddha Group. Ld. AO also observed that though the assessee is one of the partners in many Siddha Projects but in his books, no amounts were shown as investment. 5. It was stated by the assessee before ld. AO that unsecured loan/booking money was given through companies which have separate legal identity and the unsecured loan/booking money invested in Siddha Group are duly recorded in the books of accounts of respective companies and their sources were duly explained. It was also submitted that the treatment of unsecured loan/investment in form of booking money in the hands of assessee is merely assumption and suspicion. Ld. AO was not convinced and he again made reference to various transactions of credits received by various companies in the Siddha Group I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 4 of 46 treating them to be controlled by Pritam Beria i.e. the assessee and for the said unsecured loans taken by the Siddha Group of companies ld. AO treated it as unexplained investment of the assessee u/s 69 of the Act and made an addition of Rs. 7,30,00,000/- for AY 2014-15. Similarly, for AY 2015-16 adopting the same analogy ld. AO made an addition u/s 69 of the Act at Rs. 13,59,33,000/-. The final observation of the ld. AO in para 9 & 9.1 for AY 2014-15 reads as follows: “9. As per the above discussion, it is clear that Shri Pritam Beria had used its concern for fulfilling his obligation being a partners in Siddha Projects and the capital contribution required to be paid by him routed in the books of Siddha’s Group through his group concern in form of Unsecured loan and booking. Further, it is fact that the concern which was used for providing unsecured loan & booking money in to Siddha Project has no worth. Therefore, it is clear that Shri Pritam Beria had used its group concern to accommodate his unaccounted money. Accordingly, after taking in to consideration of facts available on record, daywise entry of loan & booking money, peak of investment has been prepared and the peak amount as on end of financial year is taken as undisclosed investment of Shri Pritam Beria and the same is added to his total income. 9.1 As discussed in the above table, for the year under consideration, it is found that the peak of the investment in the books of Siddha Group’s from the assessee through his group concern was of Rs. 7,30,00,000/-.In course of the assessment proceeding assessee was asked to explain as to why the peak for this year shall not be added in his hand as undisclosed investment. In this regard, reply has been received and same has been duly considered before drawing conclusion that the assessee has introduced his own undisclosed money in the different project of Siddha Group's Project, being a partner, through his controlled and managed group concern. Accordingly, the same is treated as undisclosed investment of the assessee u/s 69 and added to the total income for the year under consideration. Penalty proceeding u/s 271(1)(c) of the I T Act initiated for concealment of income.” I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 5 of 46 6. Accordingly, against the returned of Rs. 2,64,100/-, income for AY 2014-15 assessed at Rs. 7,32,64,100/- and for AY 2015-16 against the returned income of Rs. 2,17,875/- income assessed at Rs. 13,62,81,160/-. 7. Aggrieved, the assessee preferred appeal before ld. CIT(A). During the course of appellate proceedings, the assessee filed complete details stating that no incriminating material was found indicating any undisclosed income in the name of the assessee and all the other documents which ld. AO has referred in the assessment order only provides the details of unsecured loan and booking money taken by Siddha Group in companies for various projects. Ld. CIT(A) was satisfied with this contention and came to a conclusion that all the alleged loans taken by Siddha Group are duly disclosed in the regular books of accounts of the related companies which are separate legal entities and are assessed to tax and the fate of such unsecured loans/booking money can be considered only in the hands of the respective companies receiving such investments/booking money. Ld. CIT(A) also held that the assessee is not under any legal position to control the transactions in the group companies and is purely a practicing-chartered accountant providing services in the course of practice and earning income therefrom. Ld. CIT(A) also held that no incriminating material was found relating/pertaining/belonging to the assessee and since for AY 2014-15 & AY 2015-16 original returns have been filed and they were not selected for scrutiny and the time limit for selecting the case for scrutiny by way of notice u/s 143(2) of the Act lapsed before the date of conducting of search, therefore, in view of the ratio laid down by Hon'ble Delhi High Court in the cases I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 6 of 46 of CIT vs. Kabul Chawla [2016] 380 ITR 573 (Delhi), PCIT vs. Meeta Gutgutia [2017] 82 taxmann.com 287 (Delhi), PCIT vs. Kurele Paper Mills (P.) Ltd. [2016] 380 ITR 571 (Delhi) concluded the appellate proceedings deleting the additions made by ld. AO u/s 69 of the Act. 8. Aggrieved, the Revenue is now in appeal before this Tribunal. Ld. D/R vehemently argued referring to the finding of ld. AO and also relied on the judgment of Hon'ble Supreme Court of India in the case of PCIT vs. Param Dairy Ltd. SLP Appeal (C) No. 13775 of 2021 dated 20.09.2021. 9. On the other hand, ld. Counsel for the assessee reiterated the submissions filed before ld. CIT(A) and vehemently argued supporting the finding of ld. CIT(A), judgments and decisions referred therein and also summarized the contentions in the following manner: “1) For Assessment Year 2014-15 Return of income filed by assessee on 11.06.2014 for Assessment Year 2014-15. The last date for issue of notice u/s 143(2) was September 2015. No proceedings u/s 143(3) or 147 of the Income Tax Act was pending on the date of search being 12.09.2017. Therefore, since no proceedings were pending and the assessment was already completed this was an unabated assessment. In view of judicial pronouncements relied upon in the written submissions filed in paper book no addition or disallowance can be mad u/s 153A other than based upon any incriminating materials found during the search and since the addition is purely on suspicion & surmises without reference to any incriminating materials, the addition made by AO is bad in law. 2) For Assessment Year 2015-16 Return of income filed by assessee on 21.08.2015 for Assessment Year 2015-16. The last date for issue of notice u/s 143(2) was I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 7 of 46 September 2016. No proceedings u/s 143(3) or 147 of the Income Tax Act was pending on the date of search being 12.09.2017. Therefore, since no proceedings were pending and the assessment was already completed this was an unabated assessment. In view of judicial pronouncements relied upon in the written submissions filed in paper book no addition or disallowance can be mad u/s 153A other than based upon any incriminating materials found during the search and since the addition is purely on suspicion & surmises without reference to any incriminating materials, the addition made by AO is bad in law. Points on merits 1) The assessee produced documents to substantiate that loan I booking advance to Siddha Group was granted by independent entities from their own funds reflected in their Balance Sheets and no part of such loan or booking advance was funded by the assessee or any entity acting on behalf of the assessee. Thus, the allegation of AO in the assessment order that assessee had advanced loans, booking advances through his undisclosed sources was merely based on suspicion, surmises and conjecture, and addition made u/s 69 was not justified. 2) It is also to be noted that the loan amount granted I booking advances made by the companies from own funds were exposed to financial risk on their own, the assessee was not exposed to any financial risk hence the action of AO to make addition u/s 69 in the hands of assessee is not justified. 3) It is also pointed out that the observation of AO in the assessment order are purely based on suspicion, surmises and conjectures. The cloud of suspicion arose in the mind of AO from the information received by him from the AO of Siddha Group that large amount of unsecured loan I booking money was received in the Siddha Group from companies mentioned at page 3 to 5 of the Assessment Order. In spite of verifying the details and documents submitted by assessee, the AO could not bring any material on record to corroborate that the assessee in any manner participated in extending loan I booking money to Siddha Group. There has been no substantive evidence on record to corroborate the findings of AO. The findings of AO that assessee had advanced loan I booking money from his undisclosed sources is merely based on surmises and conjectures. It is well settled legal proposition that suspicion howsoever strong, cannot takes place of evidence. There is no material to back the allegation of the AO. The I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 8 of 46 assessee cannot be expected to prove the negative. The onus is on the AO to substantiate that assessee had advanced loan I booking money from his undisclosed sources to make addition u/s 69 of the Act. 4) The transactions of loan / booking advance was made by the respective companies from their own sources of funds reflected in their Balance Sheet. The repayments made by Siddha Group companies also happened between them and assessee was not a party to these transactions. The assessee had filed ledger copies, Audited Accounts of all the parties whose names are appearing in the assessment order. Confirmation was also filed to evidence that the transactions between the entities with regard to giving loan and repayment of loan was regular business transactions. No evidence has been brought on record to prove that any of the parties either paid or received cash from the assessee, thus there is no reason with the AO to invoke section 69 of the Act. 5) The nature of loan transactions I booking advance between the respective entities are verifiable and hence section 69 cannot be invoked in the hands of assessee. The additions based on surmises and conjectures must be deleted.” 10. We have heard rival contentions and perused the records placed before us. The Revenue is aggrieved with the finding of ld. CIT(A) deleting the additions made by ld. AO u/s 69 of the Act towards undisclosed investment in various group companies of Siddha Group. We observe that the assessee is a practicing- chartered accountant and is partner of M/s. P. Beria & Associate. He was subjected to search in the course of proceedings carried out u/s 132 of the Act dated 12.09.2017 in GPT Group of cases. During the course of search, certain documents were found in the possession of the assessee which contained the details of the unsecured loan taken by Siddha Group of companies which mainly included Siddha Real Estate Developer, Siddha Infradev LLP, Siddha Happyville LLP, Siddha Waterfront LLP, SREDPL-Lakeville etc. In all these details name of the assessee is not appearing and I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 9 of 46 only the transactions of unsecured loan and booking money received by Siddha Group are appearing. Ld. AO mainly harped upon the statement given by the assessee during the course of search that he is engaged in the business of providing accommodation entries. However, it remains an undisputed fact that within three days of the date of search i.e. on 15.09.2017 the assessee retracted the statement given on 12.09.2017 by way of an affidavit stating that the statement given by him on 12.09.2017 was under immense pressure and abnormal situation. Now, ld. AO based on the initial statement of the assessee concluded the assessment proceedings observing that the assessee is a partner in Siddha Group of companies and the alleged unsecured loans/booking money is actually the unaccounted investment of the assessee which is liable to be taxed u/s 69 of the Act. We also notice that in the assessment order itself ld. AO observed that the assessee has not shown any investment in the Siddha Projects in its books of accounts but still he is a partner. Similarly, ld. AO also could not dispute the fact that in various companies run by Siddha Group the assessee’s name is not appearing in any of the companies investing in the Siddha Projects. The alleged addition made u/s 69 of the Act by ld. AO is purely based on the statement given at the time of search on 12.09.2017. We also notice that the incriminating material referred to by ld. AO do not contain any reference to the assessee nor any undisclosed income in the name of the assessee is said to be appearing in any of the seized material. 11. Further, we notice that ld. CIT(A) considering these facts specially the retraction statement of the assessee given in the affidavit sworn in within three days of the date of search, no I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 10 of 46 reference to any incriminating material relating to the assessee found during the course of search and also considering the fact that all the alleged investments have come from various companies/LLP/Legal entities duly assessed to tax and have been received by Siddha Group of companies/LLP/business concerns which are also duly assessed to tax concluded that unaccounted investment u/s 69 of the Act was uncalled for in the hands of the assessee and is to be deleted observing as follows: “Discussions and Findings I have carefully examined the entire material on record including the assessment order and the submissions of the appellant. Thereafter, this appeal, ground-wise is being disposed as under: Ground 1 This ground agitates against the order being passed by the AO, u/s 153A of the Income Tax Act, 1961, in the absence of any incriminating document found in the course of Search and Seizure proceedings conducted u/s 132 of the Income Tax Act, 1961. The brief facts of this case are that the appellant, a practising Chartered Accountant, had filed his return of income for the impugned assessment year on 11.06.2014 as per the order of assessment dated 30.12.2019. Thereafter, a search and seizure operation was conducted on 12-09-2017 under section 132 of the I.T Act, 1961 in the GPT group of cases, the appellant along with his family members was also covered in the same search, on the same day, by execution of search warrant, details being summarised as under: Sl.No Address of Promise Date of operation Covered Under Details of seized/ impounded material 1. Rameshwar Apartment Flat- No-3D, 19A, Sarat Bose Road, Kolkata- 700020 12-09-2017 132 PB/1, PB/2, PB/3 2. Unit No-202, 2 nd floor, 22 Sarat Bose Road, Kolkata - 700020 12-09-2017 133A BA/1 to BA/3, BA/HD/1 I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 11 of 46 and BA/Mobile/1 The other family members who were subjected to Search and seizure were (i) Sri Purushottam Beria (Father) (ii) Smt. Pushpa Beria (Mother) (iii) Smt. Julie Beria (Wife) (iv) Sri Prawesh Beria (Brother) (v) Smt. Nftiarika Beria (Brothers Wife). In consequence of the Search, a notice u/s 153A of the Income Tax Act, 1961 dated 12.10.2018 was issued directing the appellant to file Return of Income for the relevant financial year which was duly complied by Filing of Return of Income on 27-11-2018. In course of search and seizure operation conducted u/s 132 of the Income Tax Acct, 1961 at the residential and office premise of the appellant, various documents bearing identification mark PB-1, PB-2 and PB-3 were inventorised and seized. The seized documents mainly contained details of transactions of various companies controlled by and belonging to the Beria Family with various concerns of Siddha Group and the nature of transactions were mainly unsecured loan and Flat Booking Advance money paid, to various concerns of Siddha Group. All the transactions referred to in various seized documents under the identification marks PB-1 to PB-3 were duly disclosed in the Audited Financial Statements of the respective companies, Income Tax Returns were duly filed in respect of all those companies and all statutory obligations were duly discharged by the respective companies from time to time. In fact these companies from which first unsecured loans and thereafter booking advances were given have been separately scrutinized under the IT Act for the same period. Up until now the entire factual matrix is undisputed either by the appellant or the AO. In fact the AO, on page 2 of his order has recorded that the appellant had stated that all the bank accounts found and/or seized during the search had been duly declared in the regular books of account and requisite returns filed. The AO has neither disputed this fact not brought anything on record to show that this was not true. In paragraph 4C of his order, the AO, while dealing with the books of account and other incriminating documents has unequivocally recorded that all these were shown to the appellant, who, in his reply, has stated that all the seized documents had already been incorporated in the regular books of account for which admittedly the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 12 of 46 returns had been filed. Once again the AO has not controverted these statements nor brought anything on record to suggest that the averments of the appellant in this regard were incorrect and that there indeed was some incriminating material found during the search - material that had not already been duly disclosed by the appellant in his books of account. In fact the impugned transactions were duly recorded in the books of the transacting entities also and nothing extra was fund during search. Proceeding further, in this matter, it is also recorded by the AO that in the course of assessment proceedings, he received some information from the Assessing Officer of Siddha Group that large amount of unsecured loan and Booking advance money was received by the SIDDHA GROUP from various companies details of which have been mentioned in page nos 3 to 5 of the Assessment order, however that the that the information received was already part of and contained in the seized documents PB-1 to PB-3 as already explained in the above paragraph. In paragraph 7.1 of his order, the AO has further recorded that the documents seized from the premises of the appellant, bearing ID No. PB-1, PB-2 and PB-3 had also mentioned details of various projects of the Siddha group. It was based upon these documents that the AO proceeded to make enquires from the appellant about investments that had been made by the appellant’s group companies into the various projects of the Siddha Group. He has thereafter gone on to hold that the appellant would be deemed to have made these investments in his personal capacity - rather than what was undisputedly shown on these documents - that these loans/advances had in reality been made by companies of the appellant into Siddha Group and not by the appellant himself. The appellant in this ground has relied upon several case laws to contend that the said assessment u/s 153A could not have been completed in the absence of any incriminating material having been found during the course of search. The appellant has given various arguments as well as placed his reliance upon various judicial pronouncements to support his stand. These have been reproduced above and need not be repeated here. In evaluating whether there is any merit in the arguments of the appellant, the first question that arises is whether all the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 13 of 46 assessments had been completed for this assessment year and whether the time for these assessments had already elapsed as on the date on which the search was conducted. I find that the return of income was filed by the appetent on 11.06.2014 for the instant AY 2014-15. Neither the appellant nor the AO have suggested that any proceeding u/s 143(3) had been going on or was pending as on the date of search. The search itself was conducted on 12.09.2017. Therefore as on the date of search, no proceedings had been pending and all the assessments had already been completed or deemed to have been completed. There was no question of any proceedings to get abated due to the search. With the above facts in mind, I see that various judicial pronouncements have held that if all the assessments have been completed as on the date of the search, then any addition or disallowance that is made during assessment proceedings u/s 153A or C, cannot be done other than based upon incriminating material found during the search. This proposition has been reiterated by very many courts across the country and been endorsed by the Apex Court. Some of these decisions from the jurisdictional High Court are: 1. CIT Vs. Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta), the Hon’ble Calcutta High Court expressed the following views: - "We are in agreement with the views of the Karnataka High Court that incriminating material is a pre pre-requisite requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the asses assessing sing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." 2. Calcutta High Court in the case of PCIT VS. Salasar Stock Broking Ltd. (ITAT No. 264 of 2016 dated 24.08.2016 expressed its decision as under:- “In this case, the Honourable High Court observed that the Ld. ITAT, Kolkata was of the opinion that the assessing officer had no I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 14 of 46 jurisdiction u/s 153A of the I.T. Act to reopen the concluded cases when the search & seizure did not disclose any incriminating material. In taking the aforesaid view, the Ld. ITAT relied upon the judgments of Delhi High Court in the case of CIT(A) Vs. Kabul Chawla in ITA No. 707/2014 dated 28.08.2014 28.08.2014. The Court also observed that more or less an identical view has been taken by this Bench in ITA No. 661/2008 in the case of CIT Vs. Veerprabhu Marketing Limited. Considering the above facts, the Honourable High Court did not admit the appeal filed by the Department. Some further discussion upon this important proposition, along with the relevant judicial pronouncements in this context, underlining the aforementioned proposition of law deserves to be conducted: The legal position in respect of the search conducted under section 153A of the Act is well settled. The assessment made pursuant to the search has to be on the basis of incriminating materials gathered or unearthed during the course of the search. It is relevant to state that the words “incriminating material” has been deemed to mean and include the following: Incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search” 3. Reliance for this view can be upon the Hon’ble Calcutta High Court in the case of Veerprabhu Marketing Ltd, ITA No. 661/2008 dated 04/08/2016. In this case the question of law was framed as follows: "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in not holding that all assessments were made under section 143(1) of the I. T. Act, therefore, disallowance as per law were not earlier made. As per Section 153(c) of the I. T. Act assessment is to be made afresh and Income to be assessed or reassessed. The meaning of reassessment is that there is no need to resort to Section 147 of the I. T. Act and to consider the disallowance in the assessment to be made under section 153 of the I. T. Act? 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is correct in misinterpreting the CBDT's I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 15 of 46 Circular No. 7 as the same applies to assessments made u/s. 143(3), 144 or 147 of the I. T. Act where appeals or rectification application will not abate? 3. Whetheron the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is correct in law lor the fact that the decision of Jharkhand High Court (290ITR 114) has not been properly interpreted as the same does not deal with a situation where assessment are made u/s. 143(1) of the I. T. Act and there is no proposition laid down that disallowance which required to be made if the return was selected for regular assessment u/s. 143(3) or u/s. 147 of the I.T. Act could not be made u/s. 153A of the I. T. Act? While disposing appeal the Hon’ble High Court held: “We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances. We find no infirmity in the aforesaid act of the learned Tribunal. The appeal is, therefore, dismissed.” 4. In the case of Pr. CIT vs. Salasar Stock Broking Ltd ITAT No. 264 of 2016 dated 24/08/2016, Hon’ble Calcutta High Court took the same view and held: “Subject matter of challenge is a judgment and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No.1775/Kol/2012 and allowed a cross-objection registered as C0-30/Kol/2013 both pertaining to the assessment year 2005-06. The learned Tribunal was of the opinion that the Assessing Officer had no jurisdiction under Section 153A of the Income Tax Act to reopen the concluded cases when the search and seizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Court in the case of CIT[A] vs. Kabul I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 16 of 46 Chawla in ITA No.707/2014 dated 28th August, 2014. The aggrieved Revenue has come up in appeal. Mr. Bagaria, learned Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 66112008 [CIT vs. Veerprabhu Marketing Ltd.] wherein the following views were expressed - "We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre- requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances." In that view of the matter, we are unable to admit the appeal. The appeal is, therefore, dismissed.” The Apex court in the case of CIT v. Sinhgad Technical Education Society [2017] 397 ITR 344/250 Taxman 225/84 taxmann.com 290 (SC) has held as under: "(18) In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 17 of 46 respondent, argued that notice in respect of Assessment Years 2000- 01 and 2001-02 was even time barred." The Hon'ble Mumbai ITAT in the case of All Cargo Global Logistics Ltd. vs. DCIT [2012] 23 taxmann.com 103 (Mum) (SB), has categorically held that the assessment u/s 153A has to be strictly restricted only to the incriminating material found during search. The view was confirmed by the Hon’ble Bombay High Court reported in 374 ITR 675 (Bom) while adjudicating the case along with the appeal of CIT vs. Continental Warehousing Corporation. The questions before the Hon’ble High Court were as follows: “(i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is correct in narrowing down the scope of assessment u/s 153A in respect of completed assessments by holding that only undisclosed income and undisclosed assets detected during search could be brought to tax? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is correct in law in holding that the scope of Section 153A is limited to assessing only search related income thereby denying Revenue the opportunity of taxing other escaped income, that comes to the riotice of the AO? (iii) Whether on the facts and in the circumstance of the case, the Hon'ble ITAT was right in limiting the scope of Section 153A only to undisclosed income when as per the section the AO has to assess the total income of the six assessment years? Hon’ble Bombay High Court rejected the revenue appeal, accepting the findings of the Special Bench as follows: “53. The question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results:- I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 18 of 46 a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in the course of search, and undisclosed income or undisclosed property discovered in the course of search.” Further in the said judgment, the words “incriminating material” was defined as follows: “(a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means- (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search” 5. In the case of Kabul Chawla (2016) 380 ITR 573, Hon'ble Delhi High Court had summarized the legal position in respect of proceedings u/s Section 153A of the IT Act in paragraph 37 and conclusion of the case in paragraph 38, which are reproduced below:- "Summary of the legal position. 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 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 19 of 46 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 153A 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 153A 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 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern AYs 2002-03, 2005-06 and 2006- 07. On the date of the search the said assessments already stood I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 20 of 46 completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed." Conclusion 6. Pr. CIT v. Meeta Gutgutia Prop. Ferns 'N' Petals [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526 (Delhi), wherein the Hon'ble Delhi High Court has held as under: "56. Section 153A of the Act is titled "Assessment in case of search or requisition". It is connected to section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re- open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under section 132 incriminating material justifying the reopening of the assessments for six previous years is found that the invocation of section 153A qua each of the AYs would be justified." It is also pertinent to mention here that the SLP filed by the I.T. Department before the Supreme Court against this judgement of Delhi High Court, has already been dismissed by the Supreme Court, vide judgement in the case of Meeta Gutgutiya (supra). 7. In the case of Pr. CIT vs. Ram Narain Jindal, 2017(11) TMI 1677, Hon’ble Delhi High Court had taken the same view. The special leave petition filed by the Revenue at Supreme Court was dismissed as reported under 2018 (8) TMI 295 (Special Leave Petition (Civil) Diary No(s). 23833/2018) dated 03/08/2018. 8. In the case of Hon’ble Delhi High Court in the case of RRJ Securities Ltd., 2015- TIOL-2539-HC-DEL-IT, held as under:- "In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may be remained undisclosed in the relevant assessment years. This Court in Commissioner of Income Tax (Central)-III v. Kabul Chawla: ITA 707/2014, decided on 28th August,2015 [2015-TIOL- 2006-HC-DEL-IT] has held that completed assessments could only be interfered with by the AO on the basis of I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 21 of 46 any incriminating material unearthed during the course of the search or requisition of the documents. In absence of any incriminating material, the AO does not have any jurisdiction to interfere in concluded assessments 9. Similar view was taken by the judiciaries in the case of Pr. CIT vs. Kurele Paper Mills P. Ltd. (2016) 380 ITR 571, Hon’ble Delhi High Court held that proceedings u/s 153A of the IT Act, 1961 were without jurisdiction where no assessments were pending at the time of initiation of proceedings u/s 153A and no incriminating evidence was found during the course of search: “Held, dismissing the appeal, that the order of the Commissioner (Appeals) revealed that there was a factual finding that no incriminating evidence related to share capital issued was found during the course of search as was manifest from the order of the Assessing Officer. Consequently, it was held that the Assessing Officer was not justified in invoking section 68 for the purposes of making additions on account of share capital. There was nothing to show that the factual determination was perverse.(AY. 2002- 2003).” The Supreme Court has dismissed the special leave petition filed by the Department against this judgment [2016] 380 ITR 64(St.) In the present facts and circumstances, therefore I find that the factual matrix of the instant appeal necessitates the applicability of the afore-discussed proposition of law in this case. It is clear from the above discussions that the only addition that could have been made in the instant case has to emanate from incriminating material found during search. The only matter that needs to be examined is whether there was any incriminating material at all that necessitated and/or led to the additions challenged in this appeal. The above discussion has clearly brought to the fore the fact that even though there indeed was some seized material emanating from the search, it had no bearing upon the financials of the appellant; it is equally true that this material had been shown to the appellant and whose claim that all the material so-seized had already been included in the books of account of the appellant as well as of the concerns mentioned therein was accepted by the AO. It has been noted earlier in this order that the AO has not opposed this position and also has not brought anything on record to show that the averments of the appellant in this regard were incorrect. It is thereof clear that all the material seized during the search as identified by PB-1 to 3 does not constitute incriminating material I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 22 of 46 found during search since the same had already been part of the regular books of account and the required returns in this regard had already been filed. Coming finally to the information that had been received by the appellant during assessment, from the assessing officer of the Siddha Group, it has once again been recorded that this information was present in the afore-mentioned seized material pertaining to the appellant. No incriminating material has been brought on record nor shown to exist, which could be said not to have been declared in the regular books of account of the appellant or of the concerns that advanced the moneys. Therefore it is clear that the additions made in the case of the appellant, whatever their merits, did not in any case emanate from any incriminating material found during search. In view of these facts, and respectfully relying upon the various authorities cited above I hold that this addition made by the AO cannot be confirmed and is deleted accordingly. Grounds 2, 3 and 4 Without prejudice to the findings of ground 1, on merits, these grounds, 2,3and 4, agitate the same issue-the addition made by the AO on account of alleged undisclosed investments made by the appellant. The appellant has contended that the AO was wrong and unjustified in treating the unsecured loan and Booking Advance money given by various companies owned by Beria Family to Siddha Group concerns as undisclosed Investment of the appellant. He has further argued that the A.O. was wrong and unjustified in summarily and arbitrarily rejecting the explanation offered by the appellant and acting with a preconceived notion to treat the unsecured loan and Booking Advance money received by various concerns of Siddha Group as undisclosed Investment of the appellant without bringing on record any credible or material evidence on record. Facts relating to this addition, as narrated by the appellant are: “In course of assessment proceedings the AO received an information from another AO who held jurisdiction over cases of SIDDHA group informing that large amount of unsecured loan & booking money was received by SIDDHA group details of which are embossed at pages 3 to 5 of the assessment order. The AO observed that tie unsecured loans were initially advanced to SIDDHA group through appellant’s various concern as unsecured loans. These loans were subsequently I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 23 of 46 refunded and again the money was given to other concerns of SIDDHA group as booking advance by appellant’s concerns. Based on this factual finding the AO issued a Show cause notice dated 14.12.2019 to the appellant seeking appellant’s explanation as to why these unsecured loans and booking advances given by the appellant’s concern to SIDDHA group companies should not treated as appellant’s undisclosed investments. In response to the show cause notice of the AO, the appellant vide its reply dated 19.12.19 explained that unsecured loans/booking money has been given through separate companies who have their own legal identity and they have their own books of accounts and are separately assessed to income tax. It was also explained that the unsecured loans/booking advances invested in SIDDHA group were duly recorded in the respective books of accounts of respective companies and their source of funds were also explained and duly recorded. It was also explained that the allegations of AO that these moneys were appellant’s undisclosed money was purely on presumption and suspicion and assumptions without any material brought on record. The AO did not accept appellant’s any of the contentions and concluded that appellant has used his concerns for fulfilling his obligation of being a partner in SIDDHA projects and the capital contribution required to be paid by him was routed in the books of SIDDHA group this his concerns in the form of Unsecured Loan and booking advance. The AO also concluded that the concerns who gave unsecured loans/booking advances has no worth. Finally AO treated the peak amount of investment in SIDDHA group during the year as undisclosed investment of the appellant being his capital contribution through his controlled and managed group concerns. The action of AO is not only bad in law but also beyond the Income Tax Act. It was explained that unsecured loans and flat booking advance was given from various companies. These companies have their separate PAN, they are separate set of books of accounts which are audited by auditors, they file their Income Tax returns separately, and their Annual returns are filed with the Registrar of companies separately annually. The granting of loans are reflected in their audited accounts under the head assets separately. The source of funds for giving loans and booking advances are duly explained by the companies. Almost all of them are subjected to Scrutiny assessments by the Income Tax department. However, the AO has rejected all the contentions of the appellant whimsically. No enquiry I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 24 of 46 either from the respective companies or from SIDDHA group has been done by the AO to conclude that the appellant has made investment from his undisclosed sources through these companies. No material has been brought on record to suggest that the allegations of AO has any truth behind it. It is a settled law that suspicion how so ever strong it may be cannot partake the character of evidence thus the action of AO is bad in law. This is neither probable nor possible. It is a fact that the unsecured loans granted by the companies were refunded to a large extent by SIDDHA Group and then the Money’s were given to SIDDHA group as Booking Advance. But that does not prove that the appellant has infused his unaccounted money into SIDDHA group through these companies. It is also pointed out that all the investments by way of unsecured loans/booking advances have been treated as genuine both in the hands of all the entities. The AO did not even make any enquiries from the AO’s of the respective companies to verify the investments. The entire addition is based on allegations which are far from truth and hence do not have legs to stand upon. It is also pointed out that the AO did not share the information received by him from the AO of the SIDDHA Group for giving any rebuttal by the appellant. The AO has failed to bring any evidence on record to prove that the appellant had any earnings outside his books of accounts in cash which has been brought in the books through various companies for making investments in SIDDHA group. The AO has completely ignored the explanations filed by the appellant in course of assessment proceedings. Thus it is re iterated that the addition has to be made on the basis of hard facts or on corroborative evidences and not just on pure suspicion & surmises. Reliance is placed upon the decision of Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd vs CIT reported in 26 ITR 775 and the decision of Omar Salay Mohd.Salt vs CIT reported in 37 ITR 151 (SC) and decision in the case of Lalchand Bhagat Ambica Ram vs CIT reported in 37 ITR 288 (SC) where in it was held that there must be something more than mere suspicion in support of an assessment and mere suspicion cannot take the place for the purpose of passing an order of assessment. It is further reiterated that all the companies who have paid unsecured loans/ booking advances are separate entities with separate assessment thus the addition in the hands of appellant is absolutely baseless and bad in law. The allegation of AO that appellant was a partner in some projects of SIDDHA group and that there was no investment made by the appellant individually to these projects and therefore these loans/booking advances are appellant’s undisclosed money is completely wrong particularly when I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 25 of 46 there is no material on record to support the contentions of the AO. The AO conveniently ignored the fact that moneys were advanced as loans/booking advance by the companies from their respective sources disclosed in their books of accounts. This by no stretch of imagination can lead to conclusion that appellant has used his undisclosed funds through these companies to give money to SIDDHA group.” Upon going through the assessment order, the above factual matrix is fully bome out. The AO starts in paragraph 7.1.b of his order by himself admitting that the entire impugned investments, whether made in the form of unsecured loans or Booking Money, were made by the concerns of the appellant and not by the appellant himself. In fact nowhere has it been the case of the AO that the impugned advances of money had been made directly by the appellant. Even the show cause reproduced in the assessment order does not allege that it is the appellant who has advanced any of these amounts. The AO has, throughout the assessment order, not doubted that the said amounts were advanced not by the appellant himself, but by the concerns of the appellant. He has not commented upon whether the fact of these advances/loans having come from the various concerns from which they had admittedly come, had been accepted in the assessment of the recipient concerns of the Siddha Group or In the cases of the concerns which had admittedly advanced these amounts. As a matter of fact during the scrutiny assessments of these concerns that had made these loans/advances, these loans/advances have been accepted. Assessment orders of these concerns have been filed during appeal. The only reason given by the AO for adding these advances/loans in the hands of the appellant is that the appellant was a partner in several projects of Siddha group and this would necessitate some investment being made by the appellant into this group. Therefore, as per the AO, it was at the behest of the appellant that these investments were made by concerns controlled by him or his family members, as a means of making investment in Siddha Group in the form, perhaps, of his capital share since he was a partner in Siddha Group. There are various defects in the reasoning given by the AO in this regard. The first is that he has not established that the appellant indeed was a partner in some concerns of the Siddha Group. The AO has not specified or brought anything on record to show into which I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 26 of 46 projects of the Siddha group or which concerns of the Siddha group the appellant was alleged to be a partner. If indeed such a partnership did exist, then the terms of such a partnership were not brought on record. The AO has not specified whether the appellant was a partner, if at all he was a partner, in the impugned period. The only observation of the AO in this regard is that the appellant had, during search admitted to being a partner for 4 - 5 years- which at best is a general statement in the absence of any material brought on record by the AO, who is relying upon this statement to make a huge addition. These observations are of course material, and bring to the fore the unsustainability of these additions for want of any corroborative evidence. However, there are also other reasons that cast a shadow upon the reasoning and inference of the AO. The AO has made a categorical finding, that the appellant had not made any direct investments or advances to the any of the concerns of the Siddha group. Given this finding, there is absolutely no basis at all for the assumption of the AO that the impugned moneys advanced by various concerns into the Siddha Group had actually come from the appellant. The AO was in possession of all the seized material, from a search that had been conducted upon Siddha Group and the appellant as well as the appellant’s family members. Even after this search no material connecting the money trail from the appellant either to the concerns or to Siddha Group was unearthed. The AO has recorded that the appellant had, during appeal proceedings, pointed out these facts to him while stating that the various concerns from which the money had been advanced to Siddha Group had an independent legal existence and that the amounts advanced by these concerns could not legally be added in the hands of the appellant. The AO, without assigning any reasons or getting into any discussions for his action, rejected these arguments of the appellant summarily. This can hardly be called a lawful or even reasonable procedure for assessing income. During assessment proceedings, in paragraph 7.5 of the impugned order, it has been recorded that the appellant had explained that the said advances of moneys had been duly recorded in the books of account of the various concerns involved in the transaction and the sources had duly been explained. The appellant has further submitted that this money was later received back from Siddha Group by these concerns, and later, once again reinvested in other entities of the Siddha Group. In the subsequent paragraph, 8.1, of his order the AO has confirmed the veracity of these facts having himself I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 27 of 46 examined the seized material in his possession. After accepting these facts, it is not clear as to how the AO can go ahead with assessing these advances of money in the hands of the present appellant. The procedures followed during any assessment or related proceedings clearly stipulate that the person who is furthering or asserting a point of fact has to adduce concrete evidence and/or cogent arguments to establish his propositions. The appellant has discharged this onus sufficiently before the AO. The AO, in turn, has accepted the fact that the said advances of money to Siddha Group were made by concerns controlled by him. He has explained that this has been duly declared in the books of Siddha as well as of the concerns, with the sources also having been explained. If the AO was not satisfied with these explanations, then the onus lay upon him to bring on record the objections, both, legal and/or factual for not agreeing with the appellant. This has not been done by the AO. The AO has also not taken the next step - that of establishing his own proposition the burden of proving which lay upon the AO. This proposition was that the moneys so advanced by independent entities to Siddha Group actually were the appellant’s own undisclosed income and not of the concerns that had advanced them. For this, some form of tangible monetary connection would have to be established between the sources of these amounts shown by the advancing concerns and the appellant. The AO would also have to establish that the moneys advanced by those concerns had not been from their own incomes, but through undisclosed sources of these concerns. Also this undisclosed source would have to be shown to be the appellant himself. Nothing even remotely resembling the above procedure has been attempted by the AO. This proof would have to be done through a process of adducing lawful, concrete evidence and providing acceptable reasoning. The propositions furthered by an AO cannot be regarded as acceptable, based solely upon suspicions, conjectural constructs and surmises. In this case, the entire addition has been made based solely upon suspicions and conjectures, with scant interest in adducing any tangible evidence. In view of the above discussions, I cannot find merit in the actions of the AO and the same are not sustained.” 12. From perusal of the above finding, ld. CIT(A) and also the plethora of judgments referred therein, we find that the assessee has produced sufficient documents to substantiate that the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 28 of 46 loan/booking advance of Siddha Group were made by independent entities from their own funds reflected in the audited balance sheet and there is no evidence that such loan/booking advance are funded by the assessee or any other entity acting on behalf of the assessee. There is a complete lack of evidence in the hands of ld. AO which could indicate that the investment made in the Siddha Group in the form of loan and booking money is made by the assessee and the alleged addition seems to be made purely on suspicion, surmises and conjectures. Ld. AO ought to have carried out the exercise in the case of respective companies who gave loan/ booking money to the Siddha Group and the test laid down u/s 68/69 of the Act for the said unsecured loan/ booking money or the investment as the case may be ought to have been carried out in the respective hands of such concerns/entities carrying out the proceedings u/s 153A/153C of the Act. However, by no canon such exercise could have been made in the hands of the assessee who is a practicing-chartered accountant and the partner of a firm duly registered with the Institute of Chartered Accountants of India. The only evidence which ld. AO had was the statement given by the assessee during the course of search which has been retracted within three days himself and therefore, there remains no sanctity to refer/rely on such a statement which has been retracted within three days of the date of search. Even otherwise on legal grounds also since no incriminating material has been referred to by ld. AO which has a direct nexus with the assessee nor is there any material which could throw any light that the assessee has parked its unaccounted funds with the Siddha Group as loans and advances/booking money of the Siddha Projects the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 29 of 46 proceedings carried out u/s 153A of the Act deserves to be quashed since for AY 2014-15 & AY 2015-16 the original returns were duly submitted on 11.06.2014 & 21.08.2015 and the time limit for issuance of notice u/s 143(2) of the Act stood expired and no proceedings u/s 143(3)/147 of the Act were pending on the date of search, therefore, both the assessment years were completed assessment years which cannot be abated and for such completed assessment year, no additions can be made unless until supported by incriminating material found during the course of search belonging/pertaining to the assessee. Plethora of judgments laying down this ratio has been referred by ld. CIT(A) and we, further find that recently this Tribunal in the case of Aditya Himatsingka vs. DCIT in I.T.(S.S.)A. No. 27/Kol/2022 order dated 09.09.2022 dealing with same issue and identical facts has held as follows: “9. We have heard rival contentions and perused the records placed before us as well as the case laws cited by Ld. Counsel for the assessee. First we take up Ground Nos. 1 to 3 challenging the legality of the assessment proceedings carried out subsequent to search u/s 132 of the Act. (i) It is an admitted fact that no incriminating documents or material were found in course of the search and no addition has been made in the assessment made pursuant thereto on such account. Only two additions have been made in the assessment under section 153A of the Act in respect of the said alleged bank account at the HSBC and the disallowance of Rs. 587 under Section 14A of the Act. It was submitted that the disallowance under section 14A of the Act is on the basis of a legal interpretation of the said section and is not as a result of any incriminating documents found in course of the search which would warrant such disallowance. (ii) Only other addition in the assessment is the sum of Rs. 4,73,20,709 being the bank balance of the said two companies. For Gingest Marketing Ltd it amounts to Rs. 4,52,40,074 and Masonic I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 30 of 46 Limited amounts to Rs. 20,80,685. Admittedly the said addition has been made without reference to any incriminating material or documents found as a result of the search. The said documents relating to the alleged bank account at HSBC Switzerland were in the possession of the Department prior to the search and the appellant was confronted with them in the course of search proceedings. (iii) AO has alleged that during the Search & Seizure operations, assessee accepted the existence of a/c but stated it was in the name of M/s Masonic Ltd., in which his NRI son, Mr. Amitabh Himatsingka held 600 class-B non- voting equity shares. In the same statement, the Assessee had clarified and subsequently asserted, through filing of affidavits, that he was neither a director nor a shareholder in the said companies. (iv) As no incriminating material or documents whatsoever was found during the course of search under section 132 of the Act and since the time limit for issuing notice u/s 143(2) of the Act for A.Y. 2006-07 stood expired as on the date of search i.e., 22/09/2011, the said assessment falls under the category of completed assessment and additions could be made in such completed assessments only if they are supported with any incriminating material found during the course of search. Therefore, the Assessing Officer has no jurisdiction whatsoever to frame assessment under section 153A/143(3) of the Act with reference to the issue for which no incriminating evidence or documents was found. It is by now well settled in law that in case of unabated assessments, only when any incriminating material or evidence is gathered in the course of search that the assessment can be framed u/s 153A of the Act in respect of income assessable with reference to such material. The assessment was completed under section 143(3) of the Act and no proceedings were pending when the search was conducted against the appellant. Assessment u/s 153A can be conducted only where any proceedings were pending at the time of search and got abated and/or any incriminating material or documents were found in the course of search. From the facts of the case it is clear that the assessment u/s 153A/143(3) was framed with reference to unverified and unsubstantiated information allegedly gathered by the Income Tax Department from some unnamed and unspecified authorities whose identity has never been disclosed to the appellant till date. No documents, details or papers even remotely connected with the alleged bank account were found from the appellant’s premises or were in the possession of the appellant. In absence of any incriminating details found in the course I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 31 of 46 of search and the fact that the assessment for A.Y. 2006-07 had not abated, no addition or disallowance was permissible in the assessments framed u/s 153A of the Act. 10. This is now well settled by the judgments of various High Courts and Co-ordinate Benches of the Tribunal. It can also be seen from pages 16 to 26 of the order of the CIT(A) set out from the written submissions filed by the Appellant before him. In addition to the above, we may also refer to the following orders : a) In the context of Section 153C of the Act which is para materia to Section 153A of the Act the Hon'ble Apex court in the case of CIT v. Sinhgad Technical Education Society 397 ITR 344 in the context of section 153C of the Act has held as under: "18) In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act." b) Similar view was taken by the Hon'ble Calcutta High Court in the case of Veerprabhu Marketing Ltd, ITA No. 661/2008 dated 04108/2016. In this case the question of law was framed as follows: "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in not holding that all assessments were made under section 143(1) of the I. T. Act; therefore, disallowance as per law were not earlier made. As per Section 153(c) of the I. T. Act assessment is to be made afresh and Income to be assessed or reassessed. The meaning of reassessment is that there is no need to resort to Section 147 of the I. T. Act and to consider the disallowance in the assessment to be made under section 153 of the I.T. Act? 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is correct in misinterpreting the CBDT's Circular NO.7 as the same applies to assessments made u/s.143(3), 144 or 147 of the I. T. Act where appeals or rectification application will not abate? I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 32 of 46 2. Whether on the facts and in the· circumstances of the case, the Income Tax Appellate Tribunal is correct in law for the fact that the decision of Jharkhand High Court (2901TR 114) has not been properly interpreted as the same does not deal with a situation where assessment are made u/s. 143(1) of the I. T. Act and there is no proposition laid down that disallowance which required to be made if the return was selected for regular assessment u/s. 143(3) or u/s. 147 of the I. T,. Act could not be made u/s. 153A of the I. T. Act? While disposing appeal the Hon'ble High Court held: We are in agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section 153C read with section 153A. In the case before us, the assessing officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances. We find no infirmity in the aforesaid act of the learned Tribunal. The appeal is, therefore, dismissed. No Special Leave Petition was filed in the Supreme Court by the Revenue against the aforesaid decision of the Hon'ble Calcutta High Court. c) In the case of Pr. CIT vs. Salasar Stock Broking Ltd ITAT No. 264 of 2016, the Hon’ble Calcutta High Court took the same view and held: "Subject matter of challenge is a judgment and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No. 1775/Kol/2012 and allowed a cross-objection registered as CO-30/Kol/2013 both pertaining to the assessment year 2005-06. The learned Tribunal was of the opinion that the Assessing Officer had no jurisdiction under section 153A of the Income Tax Act to reopen the concluded cases when the search and seizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Court in the case of Kabul Chawla in ITA No. 78.7/2014 dated 28th August, 2014. The aggrieved Revenue has come up in appeal. I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 33 of 46 Mr. Bagaria, learned Advocate appearing for the assessee, submitted that more or less an identical view was taken by this Bench in ITA 66112008, [CIT vs. Veerprabhu Marketing Ltd] wherein the following views were expressed ¬ "We are in· agreement with the views expressed by the Karnataka High Court that incriminating material is a pre-requisite before power could have been exercised under section153C read with section 153A. In the case before us, the assessing. officer has made disallowances of the expenditure, which were already disclosed, for one reason or the other. But such disallowances were not contemplated by the provisions contained under section 153C read with section 153A. The disallowances made by the assessing officer were upheld by the CIT(A) but the learned Tribunal deleted those disallowances" In that view of the matter, we are unable to admit the appeal. The appeal is, therefore, dismissed." d) In the case of PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-1, KOLKATA VERSUS M/S. RASHMI INFRASTRUCTURE PVT. LTD., 2020 (2) TMI 1463 the Hon'ble Calcutta High Court took the same view and held: ''The question is whether the assessee had unexplained cash credit in their books which could be charged to income tax in the previous year in question? We find on scrutiny of paragraphs 10 and 10.2 of the order of the tribunal that questions of fact and evidence were discussed and adjudicated upon by it. We set out paragraphs 10 and 10.2 of the impugned order of the tribunal is as follows: "10. Coming to the alleged cash 'trail, none of the material gathered by the Assessing Officer by way of bank account copies of various companies supposed to be part of the chain of companies was not confronted to the assessee. The alleged statements that were recorded from directors of these companies which formed this alleged chain were also not brought on record. Only a general statement has been made. There is no evidence whatsoever that cash has been routed from the assessee company to any of these chain of companies. There is no evidence that any cash was deposited by the assessee company. Moreover, there is no material whatsoever brought on record to demonstrate that the alleged cash deposit made in the bank account of a third party was from the assessee company. I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 34 of 46 No opportunity to cross examine any these parties was provided to the assessee. The bank statements based on which the cash trail was prepared are part of the disclosed documents and cannot be held as incriminating material. 10.2. Thus, none of these materials gathered by the Assessing Officer can be categorized as incriminating material found during the course of search or found during the course of any other operation under the Act. Thus, we hold that the additions in question are not based on any incriminating material. The Id. CIT(A) on page 38 of his order held as follows: " I have considered the findings of the AO in the assessment order, different case laws was brought on record and appeal orders passed by my predecessors on this legal issue. I find from the assessment order that during the search & seizure operations conducted u/s 132 of the IT Act, 1961, incriminating documents/papers were not seized. At least addition made by AO in the assessment order passed u/s 153A1143(3) are not based of any incriminating documents/papers seized during the search operation. It would also not to be out of context to mention here that in this case, on the date of search, no assessment for this year was pending. Therefore, keeping in view the ratio decided by the jurisdictional bench of Kolkata tribunal in case referred above and the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd. (Supra) in the light of CBDT's decision of not filing SLP in this 'case in the Supreme Court and keeping in view the Apex Court's decision to dismiss SLP on the similar issue in the case of Pr CIT vs Kurele Paper Mills Pvt. Ltd: SLP (C) No. 34554 of 2015 dt. 07.12.2015, I am of this view that in order to maintain judicial continuity on this issue and respectfully following the ratio decided by the Hon'ble Calcutta High Court in the case of Veer Prabhu Marketing Ltd (Supra), assessee's appeal on ground no 1 is allowed and as such I am not inclined to adjudicate appeal on ground no. 2 on merit. " The tribunal is the final fact finding authority. A plausible adjudication on facts has been made. We cannot reopen the facts any more in this jurisdiction. No questions of law far less any substantial question of law is involved. For those reasons, the appeal (ITAT NO.99 of 2019) and the connected application (GA No.1211 of 2019) are dismissed." I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 35 of 46 e) In the case of M/s Shree Sai Builders, 43, R.R. Archade, Zone-II, M.P. Nagar, Bhopal -vs- ACIT (Central)-II, Bhopal in I.T.(SS).A. No. 245 to 249/Ind/2017 & ITA No. 631/Ind/2017 for Assessment Years : 2008-09 to 2011-12 & 2013-14 to 2014-15 Income Tax Appellate Tribunal, Indore Bench, Indore by its order dated 30.05.2019 held as follows : 8. We have heard rival contentions and perused the records placed before us and gone through the decision referred and relied by the Ld. Counsel for the assessee. For Assessment Year 2008-09 assessee has raised two grounds of appeal. Ground No.1 challenges the addition on the ground that no incriminating material was found during the course of search and addition has been made merely on the basis of information called during the course of assessment proceedings. Through Ground No.2 the impugned addition of Rs.2,24,326/- is challenged with regard to disallowance of interest paid on loan holding that the loan funds were not utilized for the business purposes. 9. We find that the Co-ordinate Bench while adjudicating similar issue in the case of Sainath Coloniers V ACIT (2019) 35 ITJ 77 (Trib. Indore) following the judgment of Hon’ble High Court of Delhi in the case of CIT V/s Kabul Chawla (2016) 380 ITR 573 (Del) observed as follows: “We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied by the Ld. Counsel for the assessee are of the considered view that no addition/disallowance was called for Assessment Year 2008-09 to 2010-11 as no incriminating material was found during the course of search at the premises of the assessee as the time limit of issuance of notice u/s 143(2) of the Act stood expired much before the date of conducting search u/s 132 of the Act”. 10. Examining facts of the instant appeal in the light of decision of Coordinate Bench, we find that the assessee filed regular return of income u/s 139 of the Act for Assessment Year on 30.09.2008. Assessee’s case was not selected for scrutiny, as notice u/s 143(2) of the Act was not issued to the assessee on or before 30.09.2009. Search was conducted on 29.1.2014. Impugned addition at Rs.2,24,326/- is purely based on information called during the course of search proceedings. In this situation the assessment for Assessment Year 2008-09 is to be treated as non-abated assessments for which additions could be made only on the basis of incriminating material found during the course of search. Therefore, I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 36 of 46 in the given facts and circumstances of the case and respectfully following the decision of the co-ordinate bench referred above, we direct the Ld. A.O to delete the disallowance of Rs.2,24,326/- and accordingly allow Ground No.1 and consequentially Ground No. 2 of the assessee’s appeal for 2008-09 raised in IT(SS)No.245/Ind/2017. f) In the case of Sreedeb Commodities Pvt. Ltd., 158, Lenin Sarani, Kolkata 700013 -vs- DCIT, Central Circle-2(1), Kolkata in I.T.(SS).A. Nos. 15/Kol/2022 for Assessment Year : 2007-08 Income Tax Appellate Tribunal “A” Bench, Kolkata by its order dated 26.07.2022 held as follows : “8. We have duly considered rival contentions and gone through the record carefully. Before adverting to the facts and alleged seized material considered by the ld.AO for making the addition in the hands of the present assessees, we deem it appropriate to bear in mind the position of law propounded in various authoritative judgments expounding scope of section 153A of the Act. We are of the view that in this regard, there were large numbers of decisions. First, we refer to the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla, 380 ITR 573 (Del). Hon'ble Delhi High Court after detailed analysis has summarized the following legal position: 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 I.T(SS).A. No. 15/Kol/2022 Assessment Year: 2007-08 Sreedeb Commodities Pvt. Ltd. 5 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 I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 37 of 46 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." ITAT Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153 A of the Act has to be specifically made on the basis of seized I.T(SS).A. No. 15/Kol/2022 Assessment Year: 2007-08 Sreedeb Commodities Pvt. Ltd. 6 material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. ITAT Delhi Bench has specifically held that material recovered from the premises of I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 38 of 46 other person cannot be used in the hands of the searched person. For that purpose an assessment under section 153C or 147 is to be made. At this stage, in order to fortify ourselves, we would like to make reference to the following paragraphs of the ITAT Delhi Bench's order. It reads as under: “15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law?" After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: "6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the IT AT. The IT AT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in I.T(SS).A. No. 15/Kol/2022 Assessment Year: 2007-08 Sreedeb Commodities Pvt. Ltd. 7 the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 39 of 46 when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so- called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not wider Section 153A. This goes to the root of the matter." 9. Hon'ble Court has specifically observed for the purpose of section 153A that only seized material is required. However, if there is any other incriminating material belong to the assessee found at the premises of the some other person, then the assessment has to be made under other provisions and not under section 153 A of the Act. 10. Hon'ble Gujarat High Court has also considered the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra). Hon'ble Gujarat High Court framed the following question of law in the case of Pr.CIT Vs. Saumya Construction (supra): "[A] Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? [B] Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 40 of 46 "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 41 of 46 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.l 1,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 42 of 46 be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 11. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon’ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006- 07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon’ble Delhi Court as completion of assessments and this acceptance of return, according to the Hon’ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. Though, it is not necessary to recite and recapitulate this proposition in other judgments, suffice to say that in the following judgments, unanimous view is taken by Hon’ble High Court as well as ITAT on I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 43 of 46 this point. They concur with the Hon’ble High Court. Just for reference, we note the citations as under:- Sl. No. Particulars 1. CIT vs. Kabul Chawla [2015] 61 taxmann.com 412 (Delhi) 2. PCIT –vs.- Kurele Paper Mills (P) Ltd. [2017] 81 taxmann.com 82 (Delhi) 3. PCIT –vs.- Rashmi Infrastructure Pvt. Ltd. ITAT 99 of 2019, GA No. 1211 of 2019 (Calcutta HC) 4. CIT –vs.- Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta) 5. PCIT –vs.- Salasar Stock Broking Ltd. ITAT No. 264 of 2016, GA No. 1929 of 2016 (Calcutta HC) 6. M/s. Mani Square Ltd. –vs.- ACIT [IT(SS)A Nos. 58/KOL/2019 & others 7. ACIT –vs.- Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kolkata Trib.) 8. PCIT –vs.- Anand Kumar Jain & Others [ITA 23/2021 & others (Delhi High Court) 9. DCIT –vs.- Bhavya Merchandise (P) Ltd. [2020] 121 taxmann.com 112 (Kolkata Trib.) 10. Sarva Priya Holdings Pvt. Ltd. –vs.- DCIT [IT(SS)A Nos. 97 & 98/KOL/2014 11. Purulia Metal Casting –vs.- DCIT [ITA No. 1217/KOL/2019) 12. DCIT –vs.- Shri Ram Realcon Pvt. Ltd. [IT(SS)A No. 14 & 15/KOL/2017 13. Vikram Financial Services Ltd. –vs.- DCIT [IT(SS)A No. 81/KOL/2010 14. DCIT –vs.- M/s. Bohra G. & NN Brothers Pvt. Ltd. [IT(SS)A No. 89/KOL/2017 14. A perusal of the above finding would indicate that the Assessing Officer has nowhere made reference to any seized material in the assessment order. The Assessing Officer has been examining the matter as if he is passing a regular assessment order u/s 143(3) or 147 of the Act. Under the scheme of assessment as propounded in the various judgments of the Hon’ble High Courts referred above, an addition can only be made if some incriminating material regarding receipt of bogus share application money was found during the course of search. The Assessing Officer did not make reference to this effect. The ld. CIT(A) is on the same line. The ld. CIT(A) has discussed the I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 44 of 46 issue on merits but did not address whether the issue can be examined in an assessment framed u/s 153A of the Act or not. The judgment of the Hon’ble Delhi High Court in the case of Kabul Chawla (supra) is very specific which has been discussed above. The time limit to issue notice u/s 143(2) of the Act has expired long back. Hence, it is an unabated assessment year and this assessment can be tinkered with only if incriminating material pertaining to this year has been found during the course of search. In view of the above discussion and respectfully following the judgments of various Hon’ble High Courts and Co-ordinate Benches, we allow the preliminary ground of the appeal and delete the additions made in the assessment order dt. 30/03/2015 passed u/s 153A r.w.s. 143(3) of the Act. 11. In view of the facts of this case and the settled legal position as discussed above, we hold that the addition of INR 4,52,40,074/- in respect of Gingest Marketing Limited and INR 20,80,685/- in respect of Masonic Limited and the dis-allowance of INR 587/- u/s 14A of the Act are wrong and are directed to be deleted. Since we have already quashed the assessment proceedings carried out u/s 153A r.w.s. 143(3) of the Act dt. 30/03/2015, as bad in law, and all the additions made therein stands deleted, renders the remaining grounds infructuous. In view of our finding as above, we do not deem it necessary to decide other grounds of appeal. 12. In the result, the appeal is partly allowed.” 13. As far as the reliance placed by ld. D/R on the judgment of Hon'ble Supreme Court of India in the case of Param Dairy Ltd. (supra) is concerned we find that it is only with regard to the notice to be issued in the SLP filed by the Revenue against the order of the Hon'ble High Court and there is no discussion on the issue regarding carrying out the assessment proceedings u/s 153A of the Act in absence of incriminating material found during the course of search and therefore, it will not support the contention of ld. D/R. 14. We, therefore, under the given facts and circumstances of the case and respectfully following the decisions referred herein above I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 45 of 46 by ld. CIT(A) as well as the decision of this Tribunal in the case of Aditya Himatsingka (supra) are inclined to hold that ld. CIT(A) has rightly appreciated the facts that the addition made by ld. AO u/s 69 of the Act are merely based on surmises and conjectures since the alleged investments have not been made by the assessee but have been made by various legal entities towards various projects/group companies of Siddha Group and there is no connection of the assessee on record with any of such alleged investments and also since no incriminating material found during the course of search on the premises of the assessee having nexus of any undisclosed income/investment/credit in the hands of the assessee and the assessment under question are completed assessment, the proceedings carried out u/s 153A of the Act are liable to be quashed and the additions for alleged investment deserves to be deleted. Thus, no interference is called for in the finding of ld. CIT(A). All the grounds raised by the Revenue for AY 2014-15 & AY 2015-16 are dismissed. 15. In the result, both the appeals filed by the Revenue are dismissed. Kolkata, the 20 th February, 2023 Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 20.02.2023 Bidhan (P.S.) I.T.(S.S.)A. Nos.: 35 & 36/KOL/2022 Assessment Years: 2014-15 & 2015-16 Pritam Beria. Page 46 of 46 Copy of the order forwarded to: 1. A.C.I.T., Central Circle-3(1), Kolkata. 2. Pritam Beria, 3D, 19A, Rameswara, Sarat Bose Road, Bhowanipur, Kolkata-700 020. 3. CIT(A)-21, Kolkata 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata