The DCIT, Central Circle-1(1), Ahmedabad V. Shri.Sunit Sudhirbhai Chokshi, Ahmedabad

ITSSA 42/AHD/2021

AI Insights

The case involves multiple appeals related to the assessment years 2012-13 to 2018-19, concerning the assessee, Shri Sunit Sudhirbhai Chokshi, a real estate developer, and the Revenue represented by the DCIT, Central Circle-1(1), Ahmedabad. The primary issues revolved around the additions made by the Assessing Officer under various sections of the Income Tax Act, including Section 153A, 143(3), 69A, and 68, concerning alleged unaccounted income, on-money receipts, and unexplained investments. The Tribunal examined the legality of these additions, the evidentiary value of WhatsApp messages and other documents, and the applicability of CBDT instructions regarding the treatment of jewellery and other assets found during the search.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114105 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-08-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 09-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 30-03-2021
• Other Referred Cases: CIT Vs Anil Kumar Bhatia, E.N. Gopakumar vs. Commissioner of Income-tax (Central), Mahalaxmi Sugar Mills, Saumya Construction, CST vs. H.M. Esufali H.M. Abdulali, Hon'ble Delhi High Court in case of CIT (Central)-III vs. Kabul Chawla, Hon'ble Gujarat High Court in case of Pr.CIT Vs Anil Bholabhai Patel, Hon'ble Gujarat High Court in the case of Pr.CIT Tax -Vs- Sanghvi Fincap Ltd, Hon'ble Gujarat High Court in the case of Pr.CIT Vadodara -Vs- RSA DIGI Prints, Hon'ble Gujarat High Court in the case of Pr.CIT-2 -Vs- Kamlesh Prahladbhai Modi, Hon'ble Gujarat High Court in case of Sunrise Finlease (P.) Ltd., Hon'ble Ahmedabad ITAT in the case of Smit Thakkar, Hon'ble Gujarat High Court in case of CIT Vs. Saumya Construction Pvt Ltd, Hon'ble Delhi High Court in case of CIT (Central)-III vs. Kabul Chawla, Hon'ble Gujarat High Court in case of CIT Vs. Anil Kumar Bhatia, Hon'ble Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central), Hon'ble Delhi High Court in case of CIT (Central)-III vs. Kabul Chawla, Hon'ble Gujarat High Court in case of CIT Vs. Anil Kumar Bhatia, Hon'ble Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Search and seizure; Loose papers; Question of law; Corroborative evidences; Assessment record; Block assessment; Onus to prove; Retraction; Bogus loan; TDS; Set aside; Bogus
• Section: 131; 68; 132; 69C; 40A(3); 143(3); 133A; 153A; 205; 251; 143(2); 69A; 208; 192; 43; 48; 73; 72; 13; 153; 22; 101; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The DCIT, Central Circle-1(1), Ahmedabad (Appellant) Vs Shri Sunit Sudhirbhai Chokshi 62, Sonarupa Apartments, Ellisbridge, Navrangpura, Ahmedabad-380006 PAN: ABDPC2570K (Respondent) Shri Sunit Sudhirbhai Chokshi 62, Sonarupa Apartments, Ellisbridge, Navrangpura, Ahmedabad-380006 PAN: ABDPC2570K (Appellant) Vs The DCIT, Central Circle-1(1), Ahmedabad (Respondent) Assessee Represented: Shri Vartik Chokshi, A.R. & Shri Biren Shah, A.R. Revenue Represented: Shri Vijay Kumar Jaiswal, CIT-DR Date of hearing : 10-05-2023 Date of pronouncement : 08-08-2023 IT(SS)A Nos. 37 to 43/Ahd/2021 Assessment Years. 2012-13 to 2018-19 IT(SS)A Nos. 25 & 26/Ahd/2021 Assessment Years. 2017-18 & 2018-19 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 2 आदेश/ORDER PER BENCH :- IT(SS)A Nos. 37 to 43/Ahd/2021 these seven appeals are filed by the Revenue against the separate Appellate Orders all dated 11.01.2021 passed by the Commissioner of Income Tax (Appeals)- 11, Ahmedabad arising out of the Assessment orders passed under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years (A.Ys) 2012-13 to 2017-18 and order passed u/s.143[3] for the Asst. Year 2018-19 respectively. IT(SS)A Nos.25 & 26/Ahd/2021 are the Cross Appeals filed by the assessee relating to the Assessment Years (A.Ys) 2017-18 and 2018-19 respectively. 2. The brief facts of the case is that the assessee is an individual and Proprietor of Armaan Developers, Partners in Armaan Infrastructure, Anayata Tradecom L.L.P. and Director in Armaan Developers Pvt. Ltd. and his source of income is from Real Estate Development, Jewellery Shop, Readymade Garments, Stock, Shares Commodity and Foreign Exchange (currency)Trading, Interest and Dividend Income. The Assessee filed its original Returns of Income regularly and paid taxes thereon. The assessee developed, constructed and sold four different schemes being Arman Park & Arman Green at Nadiad, Nandanvan & Nandanvan Heights at Ahmedabad. 2.1. There was a search action u/s. 132 of the Act was carried out at the premises of the assessee on 11-04-2017 which is forming part of the search action in the case of Navratna Organisers and I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 3 Developers Pvt. Ltd. After completion of the search action, assessment proceedings were initiated by issuance of notice u/s. 153A of the Act, dated 12-07-2018 requiring the assessee to file the Return of Income within 30 days of receipt of the notice. In response, the assessee filed the Return of Income on 10-10-2018 declaring total income. Thereafter by issuing notices u/s. 143(2) and 142(1), the A.O. called for various information and based on the details/explanation furnished by the assessee, the assessment were completed making the following additions/disallowances [i] on account of receipt of On-Money by extrapolation, [ii] disallowance u/s.40A(3), [iii] addition u/s. 69A, whatsapp messages [iv] disallowance of commission expenses, [v] addition u/s. 68 and [vi] disallowance of interest expenses thereon, etc. 2.2. For better understanding of the seven appeals filed by the Revenue, the issues involved therein and the Grounds of Appeal raised before us are summarized as follows: IT(SS)A Nos./ Asst. Years Challenge of Asst. made u/s. 153A Extrapolation of On-Money on Sale of Flats Disallow ance u/s. 40A(3) Addition u/s. 69A Disallowance of Commission expenses Addition u/s. 68 & Int. Exp. 37/Ahd/21 2012-13 Yes, Ground Nos. 1-5 1,47,04,000/- 48,39,705/ 5,00,000/- - - 38/Ahd/21 2013-14 Yes, Ground Nos. 1-5 6,13,76,000/- - - - - 39/Ahd/21 2014-15 Yes, Ground Nos. 1-5 1,29,60,000/- - - 4,92,373/- 19,69,49,246/- Int. Exp. 77,21,384/- 40/Ahd/21 2015-16 Yes, Ground Nos. 1-5 4,46,00,000/- - 9,11,000/- 3,90,525/- 15,62,10,036/- Int.Exp. 1,13,44,489/- 42/Ahd/21 2016-17 No Grounds 15,52,60,402/- - - Rs.10 crores (Whatasapp Conversation) - 41/Ahd/21 2017-18 No Grounds 6,37,94,296/- - 28,84,000/- - 10,60,10,356/- Int.Exp. 2,29,79,520/- 43/Ahd/21 2018-19 No Grounds 17,32,95,220/- - Trial Balance Difference 14,25,731/- 8,50,20,181/- Int.Exp. 1,07,57,213/- I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 4 3. We take IT(SS)A No.37/Ahd/2021 relating to Assessment Years 2012-13 as the lead case and the Grounds of Appeal raised by the Revenue reads as under: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s 132(1) of the Act, even though, there is no such stipulation in sec. 153A of the Act. 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s.15888 was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.15381 specifically states that the provisions of Chapter-XIV-B, under which sec.15888 falls, would not be applied where a search was initiated u/s.132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s.132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. Further, the AO is duty bound to assess correct income of assessee as held by the Hon'ble Apex Court in the case of Mahalaxmi Sugar Mills, 160 ITR 920(SC). I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 5 5. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the decisions of Hon'ble Delhi High court in the case of CIT Vs Anil Kumar Bhatia [211 Taxman 453, 352 ITR (493)] & Kerala High Court in the case of E.N. Gopakumar vs. Commissioner of Income-tax (Central) [2016] 75 Taxmann.com 215 (ker.) wherein Courts held that assessments in a search case can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132. 6. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting entire addition of on-money receipts of Rs.1,47,04,000/- without appreciating the extrapolation made by the Assessing Officer as envisaged Hon'ble Supreme Court in CST vs. H.M. Esufali H.M. Abdulali (SC) 1973 CTR (SC) 317, (1973) 90 ITR 271 (SC)? 7. On the facts and circumstances of the case and in law, the Ld.CIT(A) is right in law in his interpretation of the decision of Saumya Construction as the judgment says incriminating material should be found during the course of search which in this case has been found related to "on-money" receipt. 8. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the disallowance u/s 40A(3) of Rs.48,39,705/- without appreciating the seized documents which reflects the expenses exceeding Rs.20,000/- were made in cash in contravention to section 40A(3). 9. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of unexplained money u/s 69A of Rs.500,000/- despite the assessee failed to explain the source of such cash receipts with supporting evidence. 10. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 11. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 4. We have heard extensive arguments of rival parties. Shri Vartik Chokshi learned Counsel appearing for the assessee submitted before us Paper Books for each assessment year and summary I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 6 of submissions. Shri Vijay Kumar Jaiswal, CIT DR appearing for the Revenue filed a common Paper Book and supported the orders passed by the Assessing Officer and requested to upheld the same. Since the issues involved in the above appeals are more or less common for all seven assessment years it is useful to decide the appeals each issue/ground wise as follows: 5. Validity Assessment made u/s. 153A of the Act: Aggrieved against the assessment orders, the assessee challenged by way of appeals before Ld. CIT(A) on the ground that additions made u/s. 153A of the Act cannot be made in absence of any incriminating material. The assessee submitted that during the course of search, no incriminating material in the form of books of accounts/ documents or noting or jottings were found which prove that the assessee has taken On-money. The documents relied by the Assessing Officer for making alleged addition cannot be regarded as incriminating material. The summary of seized documents and explanations offered by the assessee clearly explained that the same already recorded in the books of accounts, projected price at which assessee wish to sell, wrongly compared Tally data with excel sheet workings, etc and that wrong assumption cannot be considered as incriminating material as under: Loose papers referred by AO Basis for making addition by A.O. Remarks given by assessee Page No. 22 of Annexure- A-l Rough projection made by an employee to get loan from the bank. The sheet contains details of units sold and inventory in hand. The said sheet cannot be considered as incriminating material since there is no mention of receipt of on money by the assessee. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 7 Page No. 23 of Annexure- A-l Tally data which contains summary of consideration received against sale of units in Arman Green project The data relied by the Assessing Officer is already recorded in books of accounts and does not substantiate receipt of any On- money. Such sheet cannot be considered as incriminating material and no addition on the basis of same can be done. Page No. 24 of Annexure- A-l Tally data which contains summary of consideration received against sale of units in Arman Park project The data relied by the Assessing Officer is already recorded in books of accounts and does not substantiate receipt of any On-money. Such sheet cannot be considered as incriminating material and no addition on the basis of same can be done. Page No. 12 of Annexure-A The sheet contains total value of the bungalow including land value and construction cost. Assessing Officer relied on this and concluded that the value of the bungalow at Armaan Green and Armaan Park ranges between Rs. 73 lakhs and Rs. 87 lakhs. The table reflected on alleged sheet shows projected price at which, Assessee wished to sell the units in Armaan Green. The assessee in his statement duly accepted that rates mentioned therein were projected rates at which the assessee wished to sell the units but practically was unable to sell at such rates considering the market conditions. Such projected data cannot be termed as incriminating material and addition on the basis of such loose paper cannot be made. Page No.38 and 48 of Annexure A These pages contain the details of transaction of sale of Unit-4 of Armaan Green Project to Nikunj Barot. On the basis of notings in these sheets, the AO has concluded that unit has been sold for 85,00,000/- and registered sale deed has been made for 45,70,000/- which On perusal of the sheets it is no where mentioned that assessee has received on money of Rs. 36,30,000/-. Such calculation has been made on assumption by the Assessing Officer and such assumption cannot be termed as incriminating material, hence addition on the basis of such sheet I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 8 means that balance of Rs.36,30,000 is received in cash by the assessee. cannot be made. The detailed explanation of the sheet has already been made herein above. Even otherwise such document relate to A.Y. 2018-19, hence cannot be considered in making addition in A.Y. 2012-13 to 2015-16. Snip of Image in Electronic Seized Materia On perusal of such image the Assessing Officer had observed that the assessee receives cash component of 50% against sale of units. Assessee has duly explained that such image was received from one of the brokers who had approached the assessee for buying one of the land. On perusal of the aforesaid image. It is quite clear that details mentioned" are basically for the land deals and not for the sale of affordable housing projects or bungalow, hence such image cannot be termed as incriminating material and addition on the basis of same cannot be made. Whatsapp communication between the assessee and his Accountant The Assessing Officer has relied on whatsapp communication between the appellant and his Accountant wherein they have discussed the revenue, expense and profitability of two schemes being Nandanvan and Nandanvan Heights and held that profits in excess of that reflected in books have been earned by the assessee. As already explained, the details of revenue, expense and profit discussed by the assessee and his Accountant duly reconciles with data in books of accounts, hence such communication cannot be considered as incriminating material and addition on the basis of same cannot be made. Excel sheets on page No. 39 to 41 of the assessment order On the basis of these excel sheets, the Assessing Officer has assumed that total amount received by the assessee for the units sold is in excess of amount reflected in books tally data. Alleged noting referred by Ld. Assessing officer is for internal purpose and cannot be compared with tally data. The said sheet contains data of other years and cannot be considered as incriminating material for making addition during the years under consideration. Even I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 9 otherwise alleged sheet is dated 13.10.2016 and cannot be relied for making addition in A.Y. 2014-15 and 2015-16. Tally summary on page No. 42 to 46 of the assessment order Tally summary contains details of amount received on sale of Projects. The receipt shown in such tally data has been compared with details mentioned in excel sheet and difference in consideration received and offered in books has been worked out by the Assessing Officer The assessee has explained in detail herein above that data mentioned in Tally data cannot be compared with the data of excel sheet, hence these documents which are actually part of books of accounts cannot be treated as incriminating material and addition cannot be made on such basis. Page No. 66 of Annexure- A-2 The said page contains details of cash received Rs. 5,00,000/- from Mineshbhai Maheta for unit 55 Addition for the same is done in A.Y. 2011-12. The same cannot be considered as incriminating material for the year under consideration and addition cannot be made on such basis. 5.1. Thus the assessee submitted that the additions made by the Assessing Officer in the assessment orders framed u/s.153A are bad in law as there is no incriminating material found at the time of search proceedings in support of the additions made by the LdAO. It is very settled position of law as evident from various decisions of Jurisdictional High Court, Tribunal and various other High Courts that AO has no jurisdiction to make additions in the assessment order passed u/s 153A of the Act, which are not pertaining to any undisclosed income or seized material when assessment proceedings are completed and attained finality. (i) Hon'ble Gujarat High Court in case of CIT Vs. Saumya Construction Pvt Ltd (Tax appeal No. 24 of 2016) dated 14 th March 2016 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 10 (ii) HIGH COURT OF GUJARAT in the case of Pr.CIT V/s Anil Bholabhai Patel Dated-30/08/2017. (iii) Hon'ble Delhi High Court in case of CIT (Central)-III vs. Kabul Chawla [2015] 61 taxmann.com 412 (Delhi) (iv) Decision of HIGH COURT OF GUJARAT in the case of Pr.CIT Tax -Vs- Sanghvi Fincap Ltd. Dated-20/02/2018 (v) HIGH COURT OF GUJARAT in the case of Pr.CIT Vadodara -Vs- RSA DIGI Prints Dated-06/09/2017 (vi) HIGH COURT OF GUJARAT in the case of Pr.CIT-2 -Vs- Kamlesh Prahladbhai Modi. Dated- 18/04/2018. (vii) Hon'ble Gujarat High Court in case of Sunrise Finlease (P.) Ltd. reported in 89 taxmann.com 1. (viii) Decision of Hon'ble Ahmedabad ITAT in the case of Smit Thakkar IT(ss) No 213 and 214/Ahd/2017 dated 10/06/2019 5.3. The Ld. CIT[A] considered the submissions of the assessee and held that though search and seizure action under Section 132 of the Act was conducted in the case of the assessee on 11-04-2017, the assessee has already filed his original return of income prior to date of search. But while passing the search Assessment Orders, the Ld AO has estimated on-money receipts for two projects being Armaan Green and Armaan Park at Nadiad. The Ld AO has adopted on money ratio @ 80% of accounted turnover and adopted formula of Sales x (80/100%), while arriving at conclusion that assessee is accepting on-money receipts for each and every unit booked/sold by him. It is found that tally data or extracts of ledger account reproduced in Assessment Order are already accounted in books of accounts, hence such data cannot be held to be incriminating in nature for the asst. years under consideration. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 11 5.4. The Ld. CIT[A] further held that the AO has referred to page No. 22 of Annexure-A/1, page No.12 of Annexure-A, which are mere projections and does not contain any data relating to alleged unaccounted sales. [a] Further, seized electronic material referred by the AO "payment schedule" is already held to be dumb document, as it was related to land deal, but does not contain data relating to actual deal or does not prove that it relates to sale of bungalows for which on-money is estimated by Ld AO. [b] Further the AO has also referred to page No. 38 and 48 of Annexure-A related to Unit-4 of Armaan Green Project but such document relates to the Asst. Year 2018-19 and cannot be held to be incriminating in nature for the other asst. years under consideration. [c] The AO has also referred to tally summary and WhatsApp communication related to two projects being Nandanvan and Nandanvan Heights and as no sales were made in current year, the AO has not estimated on-money receipt in current year, hence such loose papers have no relevance for current year. Thus all the loose papers including accounted data are considered by the Ld CIT [A] but it is found that no incriminating material reflecting actual on-money receipt in current assessment years as observed by the AO. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 12 5.5. The Ld. CIT[A] further considered various decisions of the High Courts relied upon by the assessee and discussed in detail the application of provisions of section 153A of the Act. The Hon'ble Courts have held that completed assessments can be interfered with by the AO, while making assessment under section 153A of the Act only on the basis of incriminating material found during the course of search or undisclosed income discovered during the course of search. It is pertinent to consider that Hon'ble Gujarat High Court in case of CIT Vs. Saumya Construction Pvt Ltd reported in 387 ITR 529 has considered the decisions given by various High Courts and held as under: 18. In this case, it is not the case of the appellant at 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 far 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. 11,05,51,000/- 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 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 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 13 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 v. Assistant Commissioner of Income Tax (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 Commissioner of Income-tax-1 v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years, however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 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." 5.6. Further, the Hon'ble Gujarat High Court has taken a similar view in case of PCIT -Vs- Anil Bholabhai Patel dated 30.08.2017 Tax Appeal No. 469 of 2017 wherein it was held as follows : "...2. Brief facts are that a search operation was undertaken at the premises of the respondent assessee on 09.08.2011. Pursuant to the search, assessment under section 153A of the Act for the assessment year 2007-08 was framed on 28.03.2014. Certain additions in terms of business income were made in such assessment. The Tribunal by the impugned judgment set aside the assessment on the ground that there was no incriminating material found during the search which would permit the Assessing Officer to make the additions. The Tribunal noted that the return filed by the assessee in the ordinary course was accepted without a scrutiny and the time limit for scrutiny assessment was over. Essentially therefore what the Assessing Officer had done was to realign the income from capital gain to business income. Since this was without the aid of any material unearthed during the search, the Tribunal reversed the assessment order as confirmed by the Commissioner of Income Tax (Appeals). I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 14 3. As per the settled law, the approach before the Tribunal cannot be faulted particularly when the Revenue is unable to dispute the factual findings of the Tribunal. We notice that there are additional questions raised by the Revenue which pertained to the actual additions. However, when we hold the main issue against the Revenue, it is not necessary to enter into the subsidiary questions.” 5.7. The Ld. CIT[A] further held that similar view has also been taken by Hon'ble Gujarat High Court in the case of PCIT -Vs- Sunrise Finlease (P) Ltd [2018] 89 taxmann.com 1, and PCIT -Vs- Sanghi Fincap Ltd in Tax Appeal No. 142 of 2018, dated 20th February, 2018, Hon'ble Bombay High Court in case of Learned CIT (Appeals) -Vs- Continental Warehousing Corporation (Nhava Sheva) Ltd [2015] 58 taxmann.com 78 (Bombay) and Hon'ble Delhi High Court in case of Commissioner of Income Tax-7 -Vs- RRJ Securities Ltd 1962 taxmann.com 391). 5.8. Following the above judgments of various High Courts, the Ld. CIT[A] held that NO addition without the incriminating material is permissible in the years under consideration, as the same is beyond the scope of Section 153A of the Act. Thus when there was no incriminating material found during the course of search relating to additions/disallowances made and thereby allowed this ground in favour of the assessee. 6. We have given our thoughtful consideration and perused the materials on record including case laws and Paper Books filed by the assessee and the Revenue. It is well settled Principle of law by various judgements rendered by the Jurisdictional Gujarat High Court when an assessment has to be made in relation to the search or requisition under section 153A of the Act, namely, in relation to I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 15 material disclosed during the course of search or requisition, if in relation to any particular assessment year, at the same time when there is no incriminating material 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. This legal preposition is now settled by the Hon’ble Supreme Court by judgement dated 24-04-2023 in the batch of cases namely PCIT, Central-3 -Vs- Abhisar Buildwell Pvt. Ltd. reported [2023] 149 taxmann.com 399 (SC) holding that in respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act observing as follows: “Section 153A, read with sections 132 and 143, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Conditions precedent) - Whether object of section 153A is to bring under tax undisclosed income which is found during course of search or pursuant to search or requisition; therefore, only in a case where undisclosed income is found on basis of incriminating material, Assessing Officer would assume the jurisdiction to assess or reassess total income for entire six years block assessment period even in case of completed/unabated assessment- Held, yes - Whether in case of search under section 132 or requisition under section 132A, Assessing Officer assumes jurisdiction for block assessment under section 153A and that all pending assessments/reassessments shall stand abated - Held, yes - Whether in respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during course of search under section 132 or requisition under section 132A - Held, yes - Whether, however, completed/unabated assessments can be reopened by Assessing Officer in exercise of powers under section 147/148 subject to fulfilment of conditions as envisaged/mentioned under section 147/148 and those powers are saved - Held, yes I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 16 6.1. The Hon’ble Supreme Court in this case of Abhisar Buildwell Pvt. Ltd. considered Judgements of various High Courts and concurred with one of the Judgement of the Gujarat High Court in the case of Saumya Construction and laid down the following points in a nutshell : “... ... 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 17 6.2. Pursuant to the above judgement of the Hon’ble Supreme Court it is required to determine whether the “loose papers” sized from the premises of the assessee are “incriminating documents” or “dump documents”. The factual aspects of the case are considered by the Ld CIT[A] in his detailed order as follows: (a) With regards to reliance of Page no 22 of Annexure A-11 (containing date 27/07/2016), assessee contended that such loose paper nowhere contain actual receipts of on-money. The valuation of stock shown in such loose paper is mere projection and prepared for obtaining loan from bank by the assessee. The alleged noting referred by the AO is incomplete as compared to the details mentioned for 'Nandanvan & Nadanvan Heights Projects'. Thus, it was contended that on the basis of such loose paper, sales value cannot be presumed to be Rs.70 lacs in Armaan Park and Rs.80 lacs in Armaan Green more particularly when plenty of units are unsold even after starting of project since 6 to 7 years and the assessee in his statement recorded u/s 132(4) of the Act, clearly denied that no transaction took place at such value. (b) With regards to variation in sale price, the AO has referred sale data from 2010 to 2017 and variation in sale price was due to location of the unit, terms of payment, relation with the customers, time of sale/booking etc and in absence of any other corroborative evidence of cash trail regarding on money receipt, the AO cannot presume that difference amount represent on money receipt by the assessee. Further during the course of assessment proceedings various affidavits from buyers were submitted confirming that no I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 18 on money payment was made by them and the AO has not made any inquires with such buyers or inquiries if any made with buyers by the AO, he presumed that on money payment was received by the assessee without any material evidences. (c) The AO’s finding that there is credit entries of Rs.72 lacs against sale made to Navghanbhai Bharvad as mentioned in page No. 24 of Annexure -A/1, the assessee explained that cheque of Rs 24 lacs were dis-honoured twice and such entries are reflected in bank statement. The supporting evidences in form of bank statement, ledger account of client from books of account, copy of sale deed etc were already submitted which clearly prove that sale has not actually taken place at Rs 72 lacs. (d) With respect to Page No. 12 of Annexure-A1 reproduced on Page No. 34 of the assessment order, the assessee submitted that the said table shows projected price at which, assessee wished to sell the units in Armaan Green. It is appropriate to refer the reply to question no 22 in statement recorded u/s 132(4) of the Act, wherein assessee while explaining noting of such page has explained that price mentioned was at a higher rate and assessee had to sell them at the lower price as against the price mentioned in loose paper. Even no other cash trail regarding on money receipt was found and even after lapse of six to seven years, further 25% of inventory is still unsold which support the contention of the assessee that there was no scope of receiving on money receipts. (e) With regards to Page no 66 of Annexure A-2 containing noting of Rs.5,00,000 being on money receipts from Minesh Mehta for sale of I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 19 bungalow No. 55 of Arman Park, the assessee stated that same was already subject matter of addition in AY 2011-12 and noting is not pertaining to period covered by notices issues u/s 153A of the Act. (f) With respect to allegation made by the AO for payment schedule (page 37 of assessment order), the assessee stated that such noting nowhere contain date, name of the person, bungalow number and not in the hand writing of the assessee hence such paper is dumb document. It was also stated by the assessee that noting contain consideration against apply for title hence such noting cannot be pertaining to projects developed on land which is actually in the name of the assessee, hence such loose paper cannot be used for estimating on money receipts in the hands of the assessee. 6.3. The above findings arrived by the Ld CIT[A] could not be contravened by the Revenue with relevant materials. Only loose paper noting of Rs.5 lakhs being on-money receipts from one Mr. Minesh Mehta for sale of bungalow No. 55 of Arman Park, was subjected to tax in the Asst. Year 2011-12 by way reopening of assessment u/s.147 of the Act and the noting in the loose sheet is not pertaining to period covered by notices issues u/s.153A of the Act relating to the asst. years 2012-13 to 2017-18. Thus the Revenue could not establish that the above documents are incriminating materials in absence of any other corroborative evidence of cash trail regarding on-money receipt by the assessee. Thus the AO cannot presume that difference amount represent on-money receipt by the assessee. Further the loose papers noting nowhere contain date, name of the person, bungalow number and I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 20 not in the hand writing of the assessee, hence such paper is to be considered only as dumb documents. Thus we are of the considered opinion that the additions made by the Ld AO are not sustainable as per the ruling of the Apex Court in the case of Abhisar Buildwell Pvt. Ltd. [cited supra] that in respect of completed/ unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 of the Act. 6.4. This view of ours is further supported by the Hon'ble Supreme Court in case of Common Cause (A Registered Society) v. Union of India [2017] 394 ITR 220, wherein it was held that noting on loose sheet/diary does carry any evidentiary value under the provision of section 34 of the Evidence Act, the relevant extract reads as under : “... Loose sheets of papers are wholly irrelevant as evidence being not admissible under section 34 so as to constitute evidence with respect to the transactions mentioned therein being of no evidentiary value. The entire prosecution based upon such entries which led to the investigation was quashed by this Court.” 6.5. We also find that Hon'ble Supreme Court in the case of CBI v. V. C. Shukla 1998 taxmann.com 2155 (SC) held that entry can be made by any person against the name of any other person in any sheet, paper or computer, but the same cannot be the basis of making charges against the person whose name noted on sheet without corroborating the same. The relevant extract reads as under: From a plain reading of the section it is manifest that to make an entry relevant thereunder it must be shown that it has been made in a book, that book is a book of account and that book of account has been I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 21 regularly kept in the course of business. From the above section it is also manifest that even if the above requirements are fulfilled and the entry becomes admissible as relevant evidence, still, the statement made therein shall not alone be sufficient evidence, still, the statement made therein shall not along be sufficient evidence to charge any person with liability. It is thus seen that while the first part of the section speaks of the relevancy of the entry as evidence, the second park speaks, in a negative way, of its evidentiary value for charging a person with a liability. It will, therefore, be necessary for us to first ascertain whether the entries in the documents, with which we are concerned, fulfil the requirements of the above section so as to be admissible in evidence and if this question is answered in the affirmative then only its probative value need be assessed. 6.6. It is also settled law that statement recorded during the course of search u/s.132[4] without corroborative incriminating material found during the course of search, such statement alone cannot be considered as incriminating material collected during the course of search. It is further seen from the statement recorded of the assessee in reply to Question No.9 wherein it was stated that no sale has taken place at such rate and in spite of lapse of 6 to 7 years of the commencement of the building projects, there are unsold units. It is well settled principle of law that no addition could be made merely by relying on the statement recorded u/s. 132(4) of the Act when there was no material evidence available during the course of search. Such an addition is unjustifiable in the eye of law. 6.7. Further the whole purpose of conduct of search/survey is to collect evidences to determine the undisclosed income of the assessee. CBDT, itself has issued an Instruction No.286/2003 dated 10-3-2003 to the effect that the confession made through a I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 22 statement in the course of Search/Survey cannot be the basis for any addition in absence of supporting or corroborative material. The contents of the instruction is reproduced for ready reference: "Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search and seizure and survey operations. Such confessions, if not based upon credible evidence, are altered retracted by the concerned assessee while filing returns of income. In these circumstances, confessions during the course of search and seizure and survey operations do not serve any useful purpose. It is therefore advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the IT Department. Similarly, while recording statement during the course of search and seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action contrary shall be viewed adversely." 6.8. The above CBDT instruction has been considered by the Hon'ble Jurisdictional High Court in the following cases: Chetnaben J. Shah 79 taxmann.com 328 (Guj.) Where there was no material to show that assessee was carrying on speculation business in shares, addition on account of unexplained income from speculation business only on basis of assessee's disclosure under section 132(4) could not be sustained. M. P. Scrap Traders 60 taxmann.com 205 (Guj.) Unexplained investments (Retraction of statements) Assessment year 2007- 08 - Assessing Officer made addition in hands of assessee-firm as well as its partner, as unexplained investments solely relying upon statement of partner recorded at time of survey which was subsequently retracted - Except said statement, there was no other material or corroborative material with Assessing Officer to justify I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 23 said addition Whether additions made by Assessing Officer were to be deleted - Held, yes Chandrakumar Jethmal Kochar 55 taxmann.com (Gujarat) During search conducted at assessee's business premises, his statement was recorded under section 132(4) wherein he admitted that few benami concerns were being run by assessee in name of his employees. Thereafter, during assessment proceeding, he retracted from said admission contending that it was made at mid night under pressure and coercion Assessing Officer, however, made addition on basis of disclosure made by assessee in statement recorded under section 132(4)- Whether merely on basis of admission that few benami concerns were being run by assessee, assessee could not be subjected to such addition when despite retraction revenue could not furnish any corroborative evidence in support of such admission - Held, yes. 6.9. After considering the above case laws, CBDT instruction and statement recorded, the Ld CIT[A] is correct in holding that there is no incriminating materials found by the Revenue, what was found from loose sheets pertaining to the Asst. year 2011-12 which assessment was also reopened and assessed to tax and the same not covered for the present 153A assessments proceedings relating to the asst. years 2012-13 to 2017-18. Thus in our considered view the Ground Nos.1 to 5 raised by the Revenue in ITA Nos. 37 to 40/AHD/2021 challenging the validity of assessment u/s.153A are devoid of merits and the same are hereby rejected. 7. Next issue is addition on account of receipt of On-Money : The brief facts of the case are that the Assessee has developed, constructed and sold four different schemes being Arman Park & I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 24 Arman Green at Nadiad which are low/medium budget housing projects, whereas Nandanvan & Nandanvan Heights at Ahmedabad are independent Bangalows projects. While passing the assessment orders, AO has estimated on-money receipt in all the above projects for all the seven assessment years as under: Asst. Years. Armaan Greens Armaan Park Nandanvan Nandanvan Heights Total receipts in the books of account Alleged on money receipt (total * 80/100) 2012-13 1,37,00,000 46,80,000 1,83,80,000 1,47,04,000 2013-14 99,00,000 6,68,20,000 7,67,20,000 6,13,76,000 2014-15 66,00,000 96,00,000 1,62,00,000 1,29,60,000 2015-16 1,23,50,000 4,34,00,000 5,57,50,000 4,46,00,000 2016-17 44,00,001 1,13,00,000 1783,75,502 19,40,75,503 15,52,60,402 2017-18 45,70,000 38,52,000 7,58,58,370 8,42,80,370 6,74,24,296 2018-19 52,00,001 84,00,000 2,68,64,356 17,61,54,668 21,66,19,025 17,32,95,220 Total 5,67,20,002 14,80,52,000 28,10,98,228 17,61,54,668 66,20,24,898 52,96,19,918 7.1. We have already reproduced the summary of seized documents and explanation of the assessee at paragraph of this 5 of this order, hence the same is not repeated here. The Ld AO observed that value of Arman Green is approximately Rs 80 lacs against which the assessee has shown sale consideration of Rs 33 lacs to 49 lacs in the books of accounts and Rs 70 lacs for Arman Park against which sale consideration recorded in the books of account for Rs 24 lacs to 48 lacs. Thus the A.O. presumed that balance amount represent on-money receipts by the assessee. The I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 25 above loose paper shows details as on 27-07-2016 and mainly contain details of total units, month wise booked units and closing inventory. The said loose paper nowhere contain noting relating to on-money receipts towards sale of such units or member wise collection reflecting cheque payment and cash payment towards units sold by the assessee. During the course of assessment proceedings, the assessee has clearly stated that such loose paper is reflecting only projections and merely inventory shown therein is reflecting value of Arman Green at Rs. 80 lacs and Rs 70 lacs for Arman Park does not mean that the assessee has in fact sold such units at such rates, more particularly same is not corroborated by other notings in the very same seized material or cash trail found during the course of search establishing such presumption of the Ld AO. 7.2. Further it is seen that during the course of search, a specific statement of assessee was recorded u/s 132(4) of the Act, wherein the assessee has categorically stated that no sale has taken place at such rate and in spite of lapse of 6 to 7 years, there are unsold units. For sake of clarity, relevant statement of the assessee recorded u/s.132[4] is reproduced herein below: “....Q. No. 9. I am showing you page 22 of “Annexure A-1” which contains the inventory details for various projects of M/s. Armaan Groups as on 27-07-2016. From the details therein, it comes to notice that the price of each unit in Armaan Green projects is Rs. 80 lacs and for Armaan Park projects, it is Rs. 70 lacs/unit. Further on Page Nos. 23 & 24 of “A-1” contains the sale consideration received from the sale of units in Armaan Green and Armaan Park projects, the details show that the unit price for Armaan Green Projects varies varies from Rs. 33 lacs I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 26 to Rs.49 lacs whereas in the case of Armaan Park it varies from Rs. 24 lacs to Rs. 38 lacs. Please explain the same. Reply: We are quoting price of 70 lacs in Armaan Park and Rs. 80 lacs in Armaan Green and hence this statement of inventory is based on our M.R.P. Actual sale does not happen on these price and customers ask for heavy discount. We have increased the price from Rs. 24 to Rs. 38 lacs in Armaan Park and from Rs. 33 to Rs. 49 lacs in Armaan Green. Also please note that in spite of that we have plenty of unsold units even after 6-7 years of starting the projects. Q. No. 10. I am showing you the Page Nos. 13 to 20 of “A-A1” wherein some hand written details/receipts have been endorsed. Please see it and explain. Reply: These are statements of the name of the clients along with the receipt number, amount and date. All these reflects in our books of accounts. On Page No. 11, it shows the quarterly collection for maintenance from the members who have not paid their maintenance due. This amount have nothing to do with my concern or myself. I happen to be the Chairman of this housing society on a completely honorary position. He will find on this page that Bungalow No. 58 Kasaben Vakil shown that she has paid by cheque on 02-08-2016. On page No. 10, it shows that the installments paid by the clients for our projects “Nandanvan Heights”. All these amounts reflect in our books of accounts. ... ... .... .... Q. No. 15. I am showing you “A-A3” containing Page Nos. 1 to109. Please explain? Reply: These are all sale deed of my project Nandanvan at Vatva. Q. No. 16. With reference to the reply to the Question No. ‘9’ Please check whether you are receiving cash other than which is appearing on sale deed as ‘on money’ for any of your projects. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 27 Reply: I have accepted cash other than sale deed in Armaan Park and Armaan Green from a few buyers. I will submit the details in due course. In Nandavan and Nandanvan Heights project, we have not accepted any cash other than the sale consideration from any of the buyers.” 7.3. The Ld CIT[A] after considering the above statement of the assessee recorded during the course of search wherein he has stated that sales have not taken at such rate and prices have been increased gradually from 24 lacs to 38 lacs for Arman Park and Rs 33 lacs to 49 lacs for Arman Green. Such statement recorded during the course of search and contention of the assessee that sheet was showing projection cannot be rejected on flimsy ground by the AO and that too without referring to the notings in loose paper which can prove his contention that standard sale value of each unit of Arman Green and Arman Park was Rs.70 to 80 lacs. The assessee had explained that both the projects were developed far from main city of Nadiad and there was no basic amenities like hospital, school, shopping mall, etc. Even assessee has received Building Usage [BU] permission in 2012 for Arman Park and in 2011 for Arman Green, the assessee could not sell all the units even till 2021 [when the CIT[A] passed this impugned order]. Further when the AO has passed the assessments orders u/s 153A of the Act on 31 March 2018 and even as on that date eight units of Arman green out of total 24 units and 18 Arman Park out of total 69 units were not booked. These circumstantial data also prove that assessee could not easily sell units in above referred both the schemes unless and until some specific evidences of receipt of on-money are found during the course of search. Thus I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 28 the AO is not empowered to estimate sale value for all the units merely on presumption and assumption. 7.4. It is pertinent to note that during the course of assessment proceedings, the assessee vide letter dated 17th December 2019 has filed Affidavits of various purchasers who have purchased units in the above referred scheme including their PAN or Aadhar card, residential address, wherein they have duly stated that no payments are made other than what is mentioned in sale deed. But on perusal of assessment orders, it is found that AO seems to have made no enquiry with the buyers or if any enquiries are made or summons were issued to such buyers, no cogent evidences are on record of the AO which can prove that assessee has collected on-money for each and every units and sale price of Arman Green at Rs 80 lacs and Arman Park at Rs 70 lacs as considered by the AO in the assessment orders. The same is against the ratio of the decisions of [a] Hon'ble Kolkata ITAT in the case of Fort Projects Pvt Limited Vs DCIT 29 Taxman.com 84 and [b] Hon'ble Ahmedabad ITAT in the case of Nishant Construction Pvt Limited in ITA No 1502/Ahd/2015 dated 14/02/2017. 7.5. Considering facts and decisions referred supra the Ld CIT[A] held that the AO was incorrect in presuming that as there is variation in sale price, assessee ought to have taken on money which is nothing but presumption not supported by concrete, incriminating and tangible evidences. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 29 7.6. Further we notice that the AO at para 5(ii) has observed that collection data from Tally ERP reflects that assessee has received Rs 72 lacs from Naghanbhai V Bharvad for sale of bungalow No. 68 of Arman Park. The assessee submitted before the AO that cheque of Rs 24 lacs was dishonoured and entries relating to the cheque redeposits were also forming part of credit in ledger account of above party. The Assessee provided (i) Copy of Sale deed, (ii) Copy of ledger account of above party from assessee's bank account which reflects entries of Rs 48 lacs (24 lacs+24 lacs) being cheques received and subsequent dishonoured of such cheques and actual realisation of cheque of Rs 24 lacs and (iii) Copy of bank statement reflecting above entries. Without considering these facts, the AO held that the assessee has received Rs 72 lacs towards sale of one of bungalow is incorrect and same cannot be the basis for computing on-money receipts in the hands of assessee. 7.7. On the basis of above loose paper, AO has observed that assessee has sold Unit 4 @ Arman Green Nadiad for Rs 85 lacs and buyer has paid Rs.36,30,000 in cash which also prove that assessee has received on money @ 40% of value of bungalow. On perusal of relevant facts of record, seized material and copies of relevant statement recorded during the course of search, it is observed that above seized material clearly reflects notings pertaining to sale of Unit to Nikunj bhai and cheque figure noted in seized material tallies with figure recorded in books of account and sale deed. The notings clearly prove that said buyer has given Rs.36,30,000 (36,00,000+ 30,000) in cash which is not recorded in books of account. During the course of survey proceedings under I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 30 section 133A of the Act, statement of Shri Harish Chunnilal Patel, caretaker at the site of assessee was recorded on 11/04/2017. The assessee has clearly admitted that he has accepted cash other than sale deed for schemes of Nadiad developed from few buyers which also support the contention of the AO that assessee has taken on money from sale of Unit 4. 7.8. Considering these facts, so far as sale of Unit No 4 is concerned, the Ld. CIT [A] held that assessee has in fact received on-money of Rs.36,30,000 in A.Y 2017-18 and as such amount is not accounted in books of account, addition to that extent is confirmed in the Asst. Year 2017-18. However, this loose paper found during the course of search is not pertaining to other Assessment Years and hence it has no bearing on any addition of unaccounted income by extrapolating the same as made by AO in the other assessment years. 8. After hearing rival parties at length we are of the considered opinion that during the course of exhaustive search carried out at the premises of the assessee, no incriminating material containing unit number, name of the purchaser, cheque receipts and cash receipts against such cheques or any other cash trails were found (except for unit no 4) hence based upon one single instance of obtaining on-money during above period, the AO cannot extrapolate the ratio of on-money to all the units sold for both the projects. It is also found that assessee has claimed that cash mentioned in loose paper page no 48 is payment made by the buyer Mr. Nikuj Bhai directly to the interior designer and even the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 31 affidavit of such buyer is also submitted by the assessee. Though such contention of the assessee was not acceptable, but equally the AO has not made any enquiry with the buyer of unit no 4, regarding nature of cash payment made by him. In the present case, assessee has submitted affidavits of other buyers, accepting the fact that they have not made any cash payment other than what is reflected in the sale deeds. Further the AO has not rebutted such facts in the assessment orders nor made any enquiry with such buyers. Affidavits filed by the buyers of flats cannot be ignored as such. Further, there are no other corroborative evidences on records which support contention of the AO that the assessee has received on-money for all units sold by him, thus the addition made by extrapolating by the AO on all the units cannot be sustained and liable to be deleted. 8.1. This view of ours is supported by the decision of the co- ordinate Bench in the case of M/s. Amar Corporation which was confirmed by the Jurisdictional High Court in the case of CIT Vs. Amar Corporation in Tax Appeal No. 26 of 2012 dated 18-07-2012 as follows: “....A search was carried out under section 132 of the Act on 18.06.2003 in which certain loose papers and documents were found and were seized. The statement of Vimal Chimanbhai Shah, partner of the assessee firm, and that of one Chimanbhai Shah, whose proprietary concern had carried out the construction work, came to be recorded. In the initial statement, undisclosed income was admitted, but that was retracted in statement under section 132(4) of the Act by way of affidavit. 3.1 From the loose papers being page No.19, page No.80 and page No.65 found during the search, the Assessing Officer came to a conclusion that the assessee had received On-money at the rate of Rs.180/- per sq. ft. On that basis, he worked out the `On-money' additions for all the Assessment Years 1988- I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 32 99 to 2004-05, the amounts of Rs.96,50,613/-, Rs.10,54,695/-, Rs.11,95,195/-, Rs.1,58,17,291/-, Rs.41,23,447/- and Rs.1,03,18,945/- respectively. In respect of the year under consideration i.e. 2005-06, in course of assessment proceedings under section 143(3), the Assessing Officer made addition of Rs.1,52,53,128/-. ............................. 5. It could be seen from the facts that the housing projects were developed during the years prior to Assessment Year 2004-05. The search was conducted on 18.06.2003 wherein the loose papers or the documents were seized. The material seized in form of loose paper was qua one flat No. A/204 only in respect of which taking of `on-money' could be alleged. It was on the basis of such loose papers, the addition on On-money account was sought to be made. That material could not have been used for the subsequent years for making addition on the same count. The addition in the Assessment Year 2004-05 was not sustained by the Tribunal in the appeal before it on the ground that the Assessing Officer ought to have confined himself in respect of sale transaction of one particular flat and he could not have on that basis calculated the addition for all flats. Accordingly, in respect of previous Assessment Year 2004-05, it was held by the Tribunal that the addition for On-money, made in the said year was not proper inasmuch as such addition could have been made only in respect of the flat in respect of which the evidence of On-money was found at the time of search. The said decision dated 31.03.2011 of ITAT, Ahmedabad was relied on, on behalf of the assessee. 5.1 Even as for the year 2004-05 also, the addition on account of On money was held to be on the basis of guess work and extrapolation, again in the next year 2005-06 being year under consideration the addition of Rs.1,52,53,128/- was made repeating the same story. When in respect of previous Assessment Year 2004-05 also the Tribunal had dismissed the Department’s appeal on the ground that the addition in that year also was based on extrapolation, it emerged beyond pale of doubt that for the addition made for the year 2005-06 there was no evidence whatsoever and the same was presumptive in nature. 6. In above view, the findings recorded by the Tribunal were proper and legal flowing logically from the facts on record. The Tribunal has not committed any error in passing the impugned order. The appeal is devoid I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 33 of merit, and raises no substantial question of law required to be considered.” 8.2. Further Jurisdictional High Court in the case of CIT Vs. Maulik Kumar K. Shah reported in 307 ITR 137 held that additions made by the AO based on mere presumptions and assumptions and without any corroborative evidence, the same cannot be sustained and the said additions was rightly been deleted observing as follows: “The assessee has booked 35 shops as on the date of search, on which the Department has charged "on-money" in the asst. yr. 1995-96. In his statement recorded under s. 132(4), S denied to have charged any "on- money". The notings on the seized diary found from the premises of S is the only material on the basis of which the AO has made the impugned additions. The AO has not brought any corroborative material on record to prove that such sales were made and "on-money" was received by the assessee outside the books of account. The AO has not examined any purchaser to whom the sales of shops were effected. Onus heavily lay on the Revenue to prove with corroborative evidence that the entries in the seized diary actually represent the sales made by the assessee. Such onus has not been discharged by the Revenue. Mere entries in the seized material are not sufficient to prove that the assessee has indulged in such a transaction. It is well-settled that if certain documents were found from the possession of the assessee during the course of search operation, burden lies on the assessee to explain the nature of transactions recorded in the said seized material. The assessee is duty-bound to explain discrepancy, if found, on the basis of seized materials vis-a-vis books of account. But when the assessee furnishes explanation which sought to be supported by evidence, the burden is shifted to the Revenue to establish that the explanation of the assessee is false. Right from the beginning the assessee is stating that the notings appearing in the diary are rough estimates and estimation was made for submission to the bank for obtaining the loan from bank. The inference of the AO that the assessee has received "on-money", i.e., the differential amount as shown in the seized diary and books of account, is merely based on suspicion and surmises and there is no material whatsoever to support the conclusion of the AO that the assessee has in fact received any "on-money". The AO has I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 34 no evidence with him to support his conclusion. The Court also take juridical note of the fact that the assessee has worked out floor-wise rate of the shop on the seized paper but it is not possible that every shop can be sold at that price and while selling the shops many purchasers may pay advance money. Therefore, rates of all the shops at the time of actual sales cannot be the same as estimated in the seized paper. The additions as made by the AO being based on mere presumptions and assumptions and without any corroborative evidence, cannot be sustained and the said additions have rightly been deleted by the CIT(A) in all the years under consideration. The amount mentioned along with rates per square feet of different floors on the loose papers is in respect of an estimate asking for the loan from the bank. No other evidence has been shown to justify that these amounts were received from purchasers. The CIT(A) and the Tribunal both found that on the basis of these loose papers, no addition is justified. No interference is, therefore, called for in the order of the Tribunal.” 8.3. The Hon'ble Gujarat High Court in the case of Jayaben Ratilal Sorathia [2013] 40 taxmann.com held as follows: "Assessment [Additions to income] Assessment year 2005-06 - Whether Assessing Officer would not be justified in making addition in year under consideration on basis of disclosure regarding on-money receipt pertaining to land selling transactions in subsequent years without any direct or corroborating material in support of receipt of on-money in year under consideration " 8.4. It is appropriate to place on record the Hon'ble Supreme Court decisions in the case of Omar Salav Mohamed Sait reported in (1989) [37 ITR 151] (SC) where it is held that no addition can be made on the basis of surmises, suspicion and conjectures. In the case of CIT(Central), Kolkata vs. Daulat Ram Rawatmull reported in [87 ITR 349], the Hon'ble Apex Court held that, the onus to prove that the apparent is not the real is on the party who claims it to be so. The burden of proving a transaction to be bogus has to be I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 35 strictly discharged by adducing legal evidences, which would directly prove the fact of bogusness or establish circumstance unerringly and reasonably raising an interference to that effect. The Hon'ble Supreme Court in the case of Umacharan Shah & Bros. Vs. CIT [37 ITR 271] held that suspicion however strong, cannot take the place of evidence. 8.5. Respectfully following the above judgments, we have no hesitation in deleting the additions made by the Assessing Officer on account of on-money received by the assessee on the entire projects by extrapolating the same for the Asst years 2012-13 to 2016-17 and 2018-19, however restricting to the extent, the assessee has in fact received on-money of Rs.36,30,000 for the A.Y 2017-18. Thus the Grounds raised by the Revenue, namely deletion of receipt of on-money on account of extrapolation are devoid of merits and the same are liable to be dismissed for the Asst years 2012-12 to 2016-17 and 2018-19. 9. Now let us deal with the issue of on-money received by the assessee for the Asst. year 2017-18. The Ld. CIT(A) while adjudicating appeal of the assessee, deleted each addition made by Assessing officer based on seized material found during the course of search, except addition made by AO based on page no 48 of Annexure-A found during the course of search. Based on such seized material, CIT(A) has confirmed addition of Rs.36,30,000/- for the year under consideration as the registered sale deed of such flat has been executed in this assessment year. Findings of the Ld. CIT(A) in respect of this issue is reproduced as under : I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 36 “The AO at para 5(iv), (viii) & (x) of assessment order has referred following page no 48 of Annexure A seized from Site office of Arman Greens and Arman Park, Nadiad. On the basis of above loose paper, AO has observed that appellant has sold Unit 4@ Arman Green Nadiad for Rs 85 lacs and buyer has paid Rs 36,30,000 in cash which also prove that assessee has received on money @ 40% of value of bungalow. On perusal of relevant facts of record, seized material and copies of relevant statement recorded during the course of search, it is observed that above seized material clearly reflects notings pertaining to sale of Unit to Nikunj bhai and cheque figure noted in seized material tallies with figure recorded in books of account and sale deed. The notings clearly prove that said buyer has given Rs.36,30,000 (36,00,000 + 30,000) in cash which is not recorded in books of account. During the course of survey proceedings, statement of Shri Harish Chunnilal Patel, caretaker at the site of appellant was recorded on 11/04/2017 and relevant extracts of said statement is reproduced herein below: I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 37 It is clear from above statement recorded during the course of survey proceedings at the site of appellant that Mr. Harish Chunnilal Patel has received cash as mentioned in loose paper and he has accepted that such loose paper is in his own handwriting. During the course of assessment proceedings, appellant has submitted affidavit of said caretaker wherein he has stated that his statement was taken under stress but such affidavit does not help assessee as his retraction is almost after two years and statement is corroborated by material evidence found during the course of survey proceedings. Even during the course of assessment proceedings, AO has allowed appellant opportunity to produce such person but has failed to produce such person who was his own employee. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 38 Reliance is placed on decision of Hon‟ble Gujarat High court in the case of Pradeep Kumar Biyani Vs ITO [2019] 101 taxmann.com 130 wherein court has observed as under 7. We may, however, recall that when the CIT (A) reduced the addition to Rs. 56 lakhs from Rs. 59.40 lakhs made by the Assessing Officer, in an appeal filed by the assessee, the Tribunal set aside the order on technical ground and restored the appeal before the CIT (A) for fresh consideration and disposal on merits. This order of the Tribunal did not provide any further rider. In other words, the CIT (A) was free to decide the appeal of the assessee fresh without any limitation. It was in the second round that the CIT (A) confirmed the addition made by the Assessing Officer. When the CIT (A)'s first order was set aside by the Tribunal and the appeal itself was revived and placed back before him for fresh disposal, he was not bound by any earlier order and observations that may have been made. In plain terms, the entire issue was at large to be debated freshly and decided again. This contention of the assessee therefore, must fail. This brings us to the nature of additions and the permissibility thereof. Having heard learned counsel for the parties and having perused the documents on record, we notice that neither CIT (A) nor the Tribunal have solely relied on the confessional statement of Mahesh Biyani, brother of the assessee, in sustaining the addition made by the Assessing Officer. In fact, the order of CIT (A) which is elaborate, refers to other materials collected during the course of survey such as gross profit rate in the line of business done bv the assessee. It was noticed that the gross profit declared bv the assessee was much lesser than the profit in the trade. CIT (A) also noted that during the survey as well as after the survey, assessee failed to submit the stock reconciliation. He had in fact conveyed that no stock was maintained. The assessee had failed to provide stock register despite several opportunities. Inter alia on such grounds, the CIT (A) had confirmed the addition. It is true that the Tribunal has discussed the issue somewhat briefly. Nevertheless, the Tribunal has observed that the information given by Mahesh Biyani cannot be brushed aside nor has the assessee brought on record any material to show that the same was incorrect or unreasonable. More importantly, the Tribunal noted that the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 39 material found during the survey proceedings showed that the books of account were not correctly maintained and that therefore, there was no error in rejection of the assessee's books of account. Though appellant has claimed that statement recorded during the course of survey proceedings has no evidentiary value as held by Hon’ble Supreme court in the case of Commissioner of Income-tax, Salem V/s Kader Khan Son [2012] 25 taxmann. com 413, in present case, AO has not arrived at conclusion that appellant has taken on money for sale of above referred unit solely based upon statement of Mr. Harish Chunnilal Patel but such statement is further corroborated by loose paper found during the course of search referred supra. During the course of assessment proceedings, appellant has claimed that said buyer has given cash of Rs 36.30 lacs towards interior designing on his own and such payment is not received by appellant. The appellant has also submitted Affidavit of such buyer in support of such contention. Though in present case, appellant has submitted affidavit of buyer accepting above fact that no cash payment is made to appellant and AO has not made any further enquiry with said buyer in assessment proceedings nor his statement was recorded by issuing summons u/s 131 of the Act, there is no corroborative evidences which can prove that such cash was not received by appellant but received by interior designer. Even appellant has not submitted any details of such interior designer which can prove bald contention raised in assessment proceedings. It is pertinent to refer to answer to question number 16 of statement of appellant recorded during the course of search on 12/04/2017: I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 40 The appellant has clearly admitted that he has accepted cash other than sale deed for schemes of Nadiad developed from few buyers which also support the contention of AO that appellant has taken on money from sale of Unit 4. Considering these facts, so far as sale of Unit No 4 is concern, it is held that appellant has in fact received on money of Rs 36,30,000 in A.Y. 2017-18 and as such amount is not accounted in books of account, addition to that extent is confirmed in AY 2017-18 in separate Appellate Order. However, this loose paper found during the course of search is not pertaining to current Assessment Year hence it has no bearing on any addition of unaccounted income made by AO in current year” 9.1. Before us, Ld. Counsel of the assessee submitted that, against sale of unit no 4 to Mr. Nikunj Bhai, the assessee has not received such amount in cash but it has been directly given to third person, who has done interior/extra works as per direction of the buyer, i.e Mr. Nikunj Bhai. Further, in support of such argument assessee has submitted copy of Affidavit of the buyer, Nikunj Bhai, at paper book page nos. 98-101, wherein Mr.Nikunj Bhai has admitted that, he has not paid any amount to the assessee otherwise than cheque for purchase of unit no.4 from the assessee. Without prejudice to such argument, Ld. Counsel of the assessee has further submitted that, total amount received from such party cannot be taxed but only profit margin of 8 to 10% may be taxed since the assessee would have incurred at least some expenses towards furnishing of the apartment. Alternatively, the Ld. Counsel also pointed out that if the addition of this amount is confirmed then, the AO be directed to give telescoping of this amount in the current asst. year 2017-18 as well as the succeeding assessment year against any unexplained expenses/advances/ investments made from such receipt. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 41 9.2. Per contra Ld. CIT DR placed extensive reliance on the appellate order. He further submitted that the assessee has not been able to provide any documents or point out any incriminating material suggesting that the proceeds received from Mr. Nikunj Bhai had been paid directly to a third party for interior works of the apartment. Therefore, he argued that the affidavit was a self- serving document and had no evidentiary value. He further pointed out that the expenses incurred, if any, would nevertheless be disallowed u/s.40A(3) of the Act. Accordingly, he prayed that the additions were rightly confirmed by the Ld. CIT(A). 9.3. We have given our thoughtful consideration and carefully perused orders passed by the lower authorities as well as facts pertaining to this addition. It is a matter of fact that the affidavit of the Mr. Nikunj Bhai was filed at a much later date and the assessee has failed to bring on record any evidence, which demonstrates that the funds of Rs. 36.30 lacs were collected for the purposes of furnishing interior works of the apartment. Merely on the basis of this document the Ld.AO completely erred in extrapolating the profits for all the projects undertaken by the assessee. It is also a matter of fact that the AO has also not made any inquiries by examining Mr. Nikunj Bhai. In the absence of any credible evidences, we are not inclined to accept the arguments put forth by the Ld. Counsel to accept merely on a duly sworn-in affidavit that the funds were utilized by the assessee for the purposes of furnishing interior works of the apartment and therefore the same is rejected. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 42 9.4. However, we find merits in the submission of the assessee that the entire on-money receipt should not be taxed, but only the profit attributable to the on-money should alone be taxed. The Jurisdictional High Court in the case of CIT vs. President Industries wherein it has held that the amount of sales by itself cannot represent the income of the assessee, who has not disclosed the sales, only the net profit embedded in sales and not whole sale proceeds itself would be treated as undisclosed income of the assessee. This ratio is been followed in the case of ITO Vs. Anand Builders wherein Co-ordinate Bench of this Tribunal held that in such circumstances, 8% of the unaccounted on-money could be taxed in place of the entire unaccounted on-money receipts, since there is always the unaccounted payments. The above decision of the Hon’ble ITAT was upheld by the Hon’ble Gujarat High Court and the SLP filed against the judgment before the Hon’ble Supreme Court was also dismissed and reported in 265 ITR 37 held as follows: “Dismissed the special leave petition filed by the Department against the judgment dated January 21, 2002 of the Gujarat High Court in ITA No, 52 of 2002 whereby the High Court dismissed the Department's appeal on the ground that no substantial question of law arose. The question of law raised in the appeal before the High Court was whether the Appellate Tribunal's finding while directing the Assessing Officer to tax only 8 per cent of the unaccounted on money receipt instead of fully taxing it, in the absence of any evidence of expenditure, could not be stated to be perverse. ITO Vs. Anand Builders: SLP (C) No. 14166 of 2003.” 9.5. However in the facts of the present case the Ld. Counsel of the assessee has not been able to bring on record any evidences showcasing expenses incurred for interior works carried out. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 43 Accordingly, in the absence of any details pertaining to payments made for furnishing the apartment and not recording this entry in the regular books of account, the profits on the sales proceeds is restricted to 20% of Rs.36,30,000/-. Accordingly, the Ld. AO is directed to restrict the addition at Rs.7,26,000/- on estimation basis. 9.6. Now adverting to the submission put forth by the Ld. Counsel whether the addition confirmed would be eligible for telescoping or not. As this amount is not recorded in the regular books of accounts, the question of telescoping does not arise and this plea of the assessee is hereby rejected. Before concluding another question raised by the Ld CIT DR is also to be addressed, whether the unaccounted expenses incurred by the assessee in cash shall be subject to the provisions of section 40A(3) of the Act. Admittedly, in the given facts and circumstances the assessee has not claimed any deduction in the profit and loss account, the payment of which is in excess of the limit specified under the provisions of the Act. Therefore in our consider view the question of making the disallowance under the provisions of section 40A(3) of the Act in the given facts and circums tances does not arise. 9.7. In view of the above, the ground of appeal filed by the Revenue in IT[SS]A No. 41/Ahd/2021 on the issue of On-money is partly allowed. 10. Next issue is disallowance u/s.40A [3] amounting to Rs. 48,39,705/ [applicable only for the A.Y. 2012-13] : I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 44 10.1. In the seized material a document recording expenses made in cash by the assessee for his project along with cash receipts was found. The document referred by the Assessing Officer is reproduced as under: 10.2. The asseesee vide his reply submitted that during the earlier Asst. Year 2011-12 that the total expenses paid in cash amounted to Rs. 48,39,705/- and the same has not been claimed in regular books of accounts for the A.Y. 2011-12, as NO Sales were affected in the said year. Therefore, following the matching principle of accounting, the expenses are capitalized as Work in Progress [WIP]. The assessee furnished copy of ledger account wherein expense paid in cash of Rs.48,39,705/- has been recorded, it was explained that such expenses are neither claimed in A.Y. 2012-13 or any subsequent years. However the AO observed that the assessee has I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 45 not submitted any evidence in support of its claim that expenditure was not claimed in A.Y.2012-13 onwards and confirmed the addition u/s.40A(3) for Rs.48,39,705/-. 10.3. The assessee during the appellate proceedings before CIT[A] vehemently objected to the above findings of Ld. AO which are purely on surmises and without appreciating the facts which are already available on record of the Assessing Officer. The entire loose paper has been decoded in the manner which is beneficial to the AO ignoring the actual facts. While making alleged addition, the Assessing Officer failed to appreciate the following two vital facts: (i) The above loose paper has already been considered in proceedings of A.Y. 2011- 12 (since as per date mentioned therein, the expenses relate to such year) and alleged addition has been made by Assessing Officer while passing Assessment Order of such year. (ii) The above loose sheet not only mentions details of expenses incurred in cash for Rs. 48,39,705/- but also list out details of income of Rs. 50,00,000/- and Assessing, Officer has considered only part details of such sheet pertaining to expenses. 10.4. On perusal of relevant facts on records, the Ld CIT[A] observed that the above referred loose paper was considered by AO while passing the assessment order for A.Y. 2011-12 u/s 143(3) r.w.s 148 wherein addition of Rs 50,00,000 [being notings on upper part of loose paper] was considered as undisclosed income and Rs 48,39,705 [being notings on bottom part of loose paper] was considered as unexplained expenditure in the assessment order. The AO while making both the additions have rejected all the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 46 contention raised by assessee in the assessment proceedings which includes contention of the assessee for considering such notings in subsequent year namely A.Y. 2012-13, when income is offered to tax in regular books of accounts. The undisputed facts are that above noting clearly contain date of receipt/payment which falls in earlier year, same are for cash transactions and same are not recorded in books of accounts hence there is no question of treating such expenditure as Work In Progress in any year. It is also found that both the additions are considered by the CIT(A) in his appellate order dated 05-03-2019 for the A.Y. 2011-12 and considered the net income as undisclosed income of the assessee and also rejected alternate contention of the assessee for taxing such amount as income in A.Y. 2012-13 and the AO was not justified in making addition in current year. In view of the above facts, addition made by A.O. for Rs.48,39,705/- was deleted by the Ld CIT[A]. 11. Before us the Ld CIT-DR has no serious arguments on the above findings of the Ld CIT [A] and also could not contravent the concurrent findings of the two appellate authorities. It is an undisputed fact that the above notings clearly contain date of receipt/payment which pertains to the earlier assessment year 2011-12, therefore the Ld AO was not justified in making addition for the next A.Y. 2012-13. Further the above transactions were by cash mode and the same are not recorded in the regular books of accounts, hence there is no question of treating such expenditure as Work In Progress in subsequent asst. years as claimed by the assessee. Thus the ground of appeal raised by the Revenue on I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 47 disallowance u/s. 40A(3) is devoid of merits and the same is hereby dismissed. 12. Next issue is Additions made u/s. 69A: 12.1. Addition of Rs.5 lakhs relating to the A.Y. 2012-13: Regarding addition of Rs.5 lakh received in cash from Sri. Minesh Bhai Mehta treated as unaccounted income for Asst. Year 2012-13. It is noticed by AO that on perusal of Page no 66 of Annexure A-2 seized from the premises of the assessee, he has received Rs 5,00,000 in cash from Sri. Minesh Bhai Mehta for 55, Arman Park. During the course of assessment proceeding the assessee has explained that such amount is already considered as undisclosed income of Asst. Year 2011-12. However, the AO has not accepted contention of the assessee on the ground that assessee has not submitted any documentary evidence, hence such amount is required to be taxed as unaccounted income u/s.69A of the Act. The assessee submitted that entire loose paper referred by AO contains date of receipt which pertains to A.Y. 2011-12 and based upon such loose paper, AO had already made addition of Rs.50 lakhs being undisclosed income which includes notings of Rs.5 lakhs received from above person Sri. Minesh Bhai Mehta. On this basis, the assessee has explained that there is no need of submitting any documentary evidence and no such addition can be made in the asst. year 2012-13. 12.2. The Ld CIT[A] on perusal of assessment order and appellate order for Asst. Year 2011-12 in assessee's case, held that noting of Rs.5,00,000 is already subject matter of addition in the said asst. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 48 year 2011-12. Further the date mentioned in loose paper also pertains to earlier assessment year 2011-12. Hence the AO was not justified in treating the receipt mentioned in loose paper as undisclosed income for the asst. year 2012-13 and thereby deleted the addition. 12.3. We have already dealt with this issue in our earlier paragraph 11 of this order, wherein undisclosed income of Rs.50 lakhs which is relating to the Asst. Year 2011-12 and the same assessed to tax in the reassessment proceeding and therefore the Ld AO was not justified in making addition for the next Asst. Year 2012-13. This Rs.5 lakhs received from Sri. Minesh Bhai Mehta is inclusive of the above Rs.50 lakhs which is relating to the Asst. Year 2011-12, therefore the same cannot be assessed for the present Asst. Year 2012-13. Thus the findings arrived by the Ld CIT[A] does not require any interference, therefore the grounds of appeal raised by the Revenue is devoid of merits and the same is hereby dismissed. 12.4. Addition of Rs.9,11,000/- relating to the A.Y. 2015-16: During the course of search, certain SMS message files were found making reference of monetary transactions. The AO relied on some of such messages between the Assessee, Maulik and Anandbhai saket wherein discussion of cash received from and paid to various person has been made and addition to the extent of Rs.9,11,000/- was made during the asst year 2015-16. The AO has observed that the assessee failed to provide reasonable explanation with respect I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 49 to transactions mentioned in such messages and accordingly made addition of Rs.9,11,000/- under section 69A of the Act. 12.5. During the course of Appellate Proceedings, the assessee stated that the messages relied by the Assessing Officer are general conversation and are not related to any financial transactions, hence addition on account of same cannot be made. The assessee provided explanation of each message separately along with relevant details and contended that no addition should be made based upon such conversion. (a) With respect to message between assessee and Anandbhai Saket dated 09/01/2015 wherein it is stated that cash of Rs. 3.5 lacs is received from Kshitijbhai, the assessee has stated that such message has been received by him (in the capacity of the chairman of the society where he resides) from Anandbhai Saket stating that Rs. 3,50,000 is received from Mr. Kshitijbhai Patel, member of a Saket-1 towards society common road construction/maintenance. The assessee has provided notarized affidavit of Anand Kothawala confirming the aforesaid facts during assessment proceedings. On perusal of details and explanation submitted by the assessee, the CIT[A] observed that Rs.3,50,000/- has been received by the assessee in capacity of chairman of the society for maintenance of society and is not received by the assessee in his personal capacity. The affidavit of Anand Kothawala filed by the assessee duly substantiates the above argument. The AO has not brought on record any contrary evidences. Since aforesaid amount does not I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 50 relate to the assessee, addition made by Assessing Officer for Rs. 3,50,000/- is deleted. (b) With respect to message between assessee and Maulikbhai, Accountant dated 30/01/2015 wherein it is stated to pay Rs. 3,50,000/- to wife of the assessee, the assessee has stated that it is a normal practice of the Assessee not to keep excess cash at the office premises and the same was being kept at the house of the Assessee. On perusal of details and explanation submitted by the assessee, the CI T[A] observed that there was sufficient balance as per books available with the assessee, out of which cash was given to wife to be kept at home. Since source of such cash is duly explained, addition made for Rs. 3,50,000/- is deleted. (c) With respect to message between assessee and Maulikbhai accountant dated 03/02/2015 wherein the accountant of the assessee asked whether to take his raise in salary of Rs. 10,000/- via cash or cheque, the assessee has explained that alleged amount of Rs.10,000/- has been paid to the Accountant via banking channel and the same has been duly recorded in the books of accounts. The assessee has provided copy of ledger account of Neha M Thaker (wife of accountant), wherein salary amount is increased from 30,000/- to 40,000/- for the month of February and March, 2015. Based on the above explanation offered by the assessee the CIT[A] held that the alleged expense has been duly explained, addition made by the Assessing Officer for Rs.10,000/- is deleted. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 51 (d) With respect to message between assessee and Maulikbhai Accountant dated 11/03/2015 wherein it is stated that according to him cash in hand would be Rs.2,01,000/- at that particular day, the assessee has argued that in the said message, it is merely mentioned that cash in hand is Rs.2,01,000/-; hence addition cannot be made on the basis of such statement which does not represent any financial transaction. The CIT[A] accepted the above submission, since the above statement does not represent any financial transaction, addition made by the A O for Rs. 2,01,000/- was deleted. 12.5. Before us the Ld CIT-DR has no serious arguments on the above findings arrived by the Ld CIT[A] and also could not contravent the findings of the appellate authority with any materials on record. Thus the Ld AO is not correct in making additions based on every SMS message received by the assessee as unexplained addition u/s.69A of the Act and the entire addition made by the AO for Rs.9,11,000/- is hereby deleted. Thus the findings arrived by the Ld CIT[A] does not require any interference, therefore the grounds of appeal raised by the Revenue is devoid of merits and the same is hereby dismissed. 12.6. Addition of Rs.28,84,000/- relating to the A.Y. 2017-18: During the course of search, certain SMS message files were found making reference of monetary transactions. The AO relied on some of such messages between the Assessee, Maulik, Accountant wherein discussion of cash received from and paid to various person has been made. In view of conversations in such messages, I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 52 addition to the extent of Rs.45,24,000/- was made by the AO, observing that the assessee failed to provide reasonable explanation with respect to transactions mentioned in such messages however by mistake such addition was not made in computation of total income at the end of assessment. 12.7. During the course of Appellate Proceedings, the assessee stated that the messages relied by the Assessing Officer are general conversation and are not relate to any financial transactions, hence addition on account of same cannot be made. The assessee provided explanation of each message separately in tabular form along with relevant details as follows: Sr. No. Sender Receiver Date Massage Amount Received (in Rs.) 5 Sunit Maulik 03/08/2016 Please pay Mr. Kunal parikh 3.5 lacs cash. 3,50,000/- 6 Maulik Accountant Sunit 05/08/2016 Cash salary requirement: 2.54 Lac will use the same from available cash. Fyi and approval please. 2,54,000/- 7 Maulik Accountant Sunit 03/08/2016 Cash on hand is 7. Will give 5 to bhabhi tomorrow. Fyi please. 7,00,000/- 8 Maulik Accountant Sunit 31/08/2016 Cash diff read from Rasesbhai (Prakashbhai) 9.80 sent to Bhabhi Fyi Please. Also there is diff of 77k in the same, Prakash 9,80,000/- I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 53 bhai and Rasesbhai will come tomorrow forthesame. Fyi please. 9 Maulik Accountant Sunit 07/09/2016 5 given to Bhabhi today Fyi please 5,00,000/- 10 Maulik Accountant Sunit 27/10/2016 RTGS reed : 3.40 and 1 cash 4,40,000/- 11 Sunit Maulik Accountant 27/10/2016 Have we received the 6.5 from Baroliya. 6,50,000/- 12 Sunit Maulik Accountant 27/10/2016 Hitesh Baroliya ws supposed to do RTGS of 4.5 and pay 2 cash. 6,50,000/- 12.8. The arguments of the assessee and the findings of the AO were considered by the Ld CIT[A] and partly deleted and partly confirmed the additions observing as follows : (a) With respect to message between assessee and Maulik Accountant dated 03.08.2016 which states to pay Mr. Kunal Parikh Rs.3,50,000/- cash, the assessee has argued that this was merely a conversation and no actual payment has been made. The above argument of assessee is not supported by any concrete evidence. The assessee has not provided any evidence in order to prove his contention. Even confirmation of Mr. Kunal Parkh has not been provided wherein he denies receiving any such amount in cash. In absence of any details coupled with the fact that the said transaction is not recorded in books of accounts, genuineness of same cannot be established. In the aforesaid conversation, when the assessee has clearly directed his accountant to make cash payment of Rs.3,50,000/- to Mr. Kunal Parikh, it is implied that payment would have been made moreover when anything contrary I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 54 has not been substantiated by the assessee. In view of such facts, addition of Rs.3,50,000/- made by the Assessing Officer is confirmed. (b) With respect to message between assessee and Maulik accountant dated 05/08/2016 wherein cash requirement of Rs. 2,54,000/- has been ascertained for salary purpose, the assessee has stated that only requirement was made by the accountant and actual financial transaction was not carried out by the Assessee, hence addition cannot be made. On perusal of the contents of the message, it is observed that merely requirement of funds have been confirmed and no financial transaction has stated to be taken place. The accountant has also stated that he will use available cash and there is nothing on record that such salary has not been recorded in books of accounts. In view of same it has not been stated or proved that any unaccounted cash has exchanged hands, hence addition of Rs.2,54,000/- is deleted. (c) With respect to message between assessee and Maulik accountant dated 30/08/2016 wherein it is discussed that total cash in hand is 7 lacs out of which 5 lacs if to be provided to wife of assessee, the assessee has stated that it is a normal practice of the Assessee not to keep excess cash at the office premises and the same was being kept at the house of the Assessee. On perusal of details and explanation submitted by the assessee, it is observed that there was sufficient cash balance as per books available with the assessee to the extent of Rs.11,25,737, out of which cash of Rs.5,00,000/- was given to wife to be kept at home. Since source of I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 55 such cash is duly explained, which is out of cash recorded in books of account, and during the course of search, no cash trail was found hence such conversation cannot be considered as unexplained, hence addition made for Rs. 5,00,000/- is deleted. (d) With respect to message between assessee and Maulik accountant dated 31/08/2016 wherein it is discussed that cash of Rs.9,80,000/- received from Rakeshbhai has been sent to wife of the assessee, the assessee has argued that no such amount has been received by him. On perusal of above messages, it is observed that there is direct mention of cash being received from such party by the assessee which has been sent to his wife. It has also been mentioned that there is difference in cash received to the extent of Rs. 67,000/- for which the party will visit the next day. The assessee has failed to prove with necessary evidence that such cash was not received by him. Since the assessee has failed to establish source of such cash and considering the fact that the same has not been recorded in the books of accounts, addition of Rs.9,80,000/- made by the Assessing Officer is confirmed. (e) With respect to message between assessee and Maulik accountant dated 07/09/2016 wherein it is discussed to provide Rs. 5 lacs to wife of the assessee, to be kept at the house of the Assessee. On perusal of details and explanation submitted by the assessee, it is observed that there was sufficient cash balance as per books available with the assessee to the extent of Rs. 14,07,937/= as on 07/09/2016, out of which cash was given to I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 56 wife to be kept at home. Since source of such cash is duly explained, addition made for Rs. 5,00,000/- is deleted. (f) With respect to message between assessee and Maulik accountant dated 27/10/2016 wherein it is mentioned that RTGS of Rs.3,40,000/- and cash of Rs.1,00,000/- is received. The assessee stated that receipt through RTGS amounting to Rs. 3.40 lacs has been duly recorded in the books of account and cannot be added to income. However explanation of Rs.1,00,000/- received in cash has not been provided by the assessee. On perusal of details submitted by the assessee, it is observed that RTGS of Rs.3,40,000/- received by the assessee has already been recorded in books of accounts which duly explains the source of same, addition to such extent is deleted. Once assessee has received cheque, there cannot be denial of non- receipt of cash and once cash is not recorded in books of account, addition to such extent is confirmed. Therefore, out of total addition of 4,40,000/, addition of Rs.3,40,000/- is deleted and Rs.1,00,000/- is confirmed. (g) With respect to message between assessee and Maulik accountant dated 27/10/2016 wherein it has been mentioned that Hitesh Baroliya was supposed to do RTGS of 4.5 lacs and pay cash of Rs. 2 lacs, the assessee has explained that there is no financial transaction in this message and addition cannot be made on basis of same. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 57 On perusal of aforesaid message wherein it has been clearly mentioned in that Baroliya is to do RTGS of 4.5 lacs and pay cash of Rs. 2 lacs. When assessee asked accountant of the assessee that whether he received funds of Rs 6.5 lacs from Boraliya, on very same day, Mr Maulik, accountant has stated that RTGS of Rs 3.40 lacs and Rs 1 lacs is received. The conversation of assessee to Mr Maulik, states that assessee was about to receive Rs 6.50 lacs out of which Rs 4.40 lacs was already received hence it cannot be held that balance amount would not have been received by assessee. As assessee has failed to provide explanation regarding balance amount of Rs 2,10,000/-, addition made by AO for Rs 6,50,000/- is confirmed to the extent of Rs 2,10,000/- [h] In view of discussion made herein above, out of total addition of Rs.45,24,000/- made by the AO, addition of Rs.16,40,000/- is confirmed and addition of Rs.28,84,000/- is deleted. 12.7. Before us the Ld CIT-DR has no serious arguments on the above findings recorded by the Ld.CIT[A] and also could not contravent the findings of the appellate authority with any materials on record neither for the confirmation nor the additions deleted by the Ld CIT[A]. Thus the Ld AO is not correct in making additions based on every SMS message received by the assessee as unexplained addition u/s.69A of the Act and the addition made by the AO for Rs.28,84,000/- is hereby deleted. Thus the partial relief given by the Ld CIT[A] does not require any interference, therefore the grounds of appeal raised by the Revenue is devoid of merits and the same is hereby dismissed. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 58 13. Next issue is addition made u/s.68 on Unsecured Loans, consequence disallowance of interest expenses u/s.37 and Commission expenses u/s.69C: 13.1. The brief facts of the case is that Assessing officer has asked the assessee to explain the details of unsecured loan taken from Kolkata based companies totalling to Rs.16.60 Crores vide letter dated 07-12-2019. The assessee vide letter dated 18-12-2019 requested the Ld.AO to provide break up of such parties aggregating to Rs.16.60 crores. However the assessee provided confirmation of parties as appearing in his books of accounts, copy of the Return of Income filed by the creditors, bank statement and audited annual accounts along with reply dated 18-12-2019. The assessee has submitted demand notices received by him from the creditors for repayment of loan given by them. Thereafter, AO vide letter dated 24-12-2019 asked the assessee to submit details of all the unsecured loans taken by him and details were submitted by the assessee vide letter dated 27-12-2019. While passing the assessment order for A.Y. 2015-16, the Ld AO made addition u/s. 68 of the Act for loans taken for Rs.15,62,10,036/- through Mr. Barun More with respect to the following parties (relating to the A.Y. 2015-16) with the following observations: Name of Party Addition by AO Allied Commodeal Pvt. Ltd. 75,34,952 Ambaashreelnfratech 25,39,390 Anamika Dealmark Pvt. Ltd. 83,66,386 Bholenath Commosale Pvt. Ltd. 1,54,94,085 BlockdealDealcomPvt. Ltd. 35,63,690 Brajdham Mercantile Pvt. Ltd. 3,07,723 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 59 Conceit Mercantile Pvt. Ltd. 1,03,66,286 Cygnet Realtors Pvt. Ltd. 61,55,082 Ganeshvani Commosales Pvt. Ltd. 15,27,296 Indian Info Tech and Software Ltd. 1,59,42,626 Kulaga Agencies Pvt. Ltd. 66,39,031 Monalika Taxfab Pvt. Ltd. 61,29,561 Moonnight Suppliers Pvt. Ltd. 1,52,66,856 Mountview Dealcomm Pvt. Ltd. 75,34,952 Ostrich commodities Pvt. Ltd. 2,33,45,201 Shivom Investment and Consultancy Ltd. 1,02,98,147 Stylish Agencies Pvt. Ltd. 50,22,192 Subhrekha Dealmark Pvt. Ltd, 25,76,561 Unifour Commodales Pvt. Ltd. 41,00,019 Haji Ebrahim & sons 35,00,000 Total 15,62,10,036 (i) The AO has referred to Return of Income of Anamika Dealmark Pvt. Ltd, and observed that though such party has given loan of Rs.1.50 crore, it has filed Return of Income declaring total income of Rs.16,141/= which means that depositors have no creditworthiness to give loan. (ii) The AO has referred to statement of assessee recorded u/s 132(4) of the Act wherein the assessee has stated that he didn't know Kolkatta based companies from whom unsecured loan is taken and Mr. Barun More arranged such loans and he has paid commission of 0.25% to him. The assessee has failed to produce such Mr. Barun More. (iii] The AO in notice dated 24/12/2019 has referred to inquiry report made in the case of Anamika Dealmark Pvt. Ltd by ADIT and it was found that premises was occupied as residential address. (iv) The AO has referred to Page no 38 of Annexure A-1 being list of unsecured loan as on 31 st March 2017 (extract from Tally) which states that assessee has taken loan of Rs.59.39 crore which includes loan through Barun More for Rs 16.54 crore. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 60 (v) The AO has reproduced legal notice given by Anamika Dealmark Pvt. Ltd in assessment order and observed that there is no letter of authorization in favour of Advocate, address of the Company on this letter does not match with address provided by the assessee, such notice is after commencement of notice issued u/s.153A of the Act, which is after thought to conjure evidence. Thus the AO observed that in such notices, demand is made for repayment of loan and payment of interest, the assessee has failed to provide any reply filed against such legal notice. Notice states that depositor has demanded repayment of loan and interest through repeated request but no evidences were submitted for such request and if such notices have come to the assessee, he would be knowing such party but in his statement, he has mentioned that he does not know Kolkatta based parties which clearly suggest that legal notice is after thought to give colour of genuineness to the accommodative loans. (vi) The Notice to creditor companies could not be served by post at the address provided by the assessee and the company was found to be non-existent at the given address during physical verification which means that identity of depositor and genuineness of the transaction cannot be established. (vii) The AO has reproduced balance sheet of Anamika Dealmark Pvt. Ltd and stated that loans & advances are out of huge share premium and as there is no fixed asset and inventory, such company is Paper Company. (viii) The AO has referred to conversation of assessee and his accountant pertaining to A.Y. 2017-18 and observed that these are record of cash transactions relating to loan. 13.2. Thus the AO held that there is failure of service of notice to the creditor at given address, non-existence of creditor at given address confirmed through physical verification, admission by the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 61 assessee that he was not aware of Kolkata base parties and admission under oath regarding arranging unsecured loan through middle man in lieu of commission paid out of books, failure of the assessee to give contact information of such middle person, meager and negligible income of depositors clearly justify [a] addition u/s 68 of the Act for Rs.15,62,10,036/-. [b] The AO has also made disallowance of interest paid to such parties for Rs.1,13,44,489/- u/s. 37 of the Act. [c] On the basis of statement of the assessee that he made payment of commission in cash to Mr. Barun More, AO has made further addition of Rs.3,90,525/- u/s 69C of the Act. 13.3. During the course of appellate hearing, the assessee contended that he has submitted during the course of assessment proceedings, confirmation of depositors along with PAN, Return of Income, Bank Statement and Annual accounts which means that identity, creditworthiness of the depositors and genuineness of loan were established. The assessee has relied upon various judgments including that of Hon'ble Gujarat High Court in the case of DCIT vs. Rohini Builders 256 ITR 36. The assessee has also contended that entire additions have been made on presumption that cash has been rotated through Mr. Barun More, Mahesh Rohera, Rashesh Bhai, etc., who have arranged the loans, but the Assessing officer has not brought any evidences on record to prove that assessee has given cash in lieu of cheques or even during exhaustive search carried out at assessee's premises, no such details were found, hence additions should not be made on such presumption. The assessee also relied upon various decisions, which relates to discharge of assessee's onus u/s.68 of the Act. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 62 With regard to observation of the AO that various Kolkata based parties were not found at their addresses or summons could not be served to them, the assessee contended that such observation is based upon inquiry carried out by ADIT during post search proceedings, but such inquiries were not made during assessment proceedings by the AO. The assessee has argued that all the parties are assessed to tax, there is no statement of third parties that loan given to assessee are bogus, they have filed their ROC Return and when such details are already on record before AO, even if such parties are not found at the address, addition u/s.68 cannot be made, for which reliance was placed on various decisions. It was also argued by assessee that without providing cross examination of such parties, addition u/s. 68 cannot be made by the AO. 13.4. With regard to observation of the AO regarding legal notice issued by one of the creditor being Anamika Dealmark Pvt. Ltd, the assessee has rebutted such observation and also contended even one of the party had legal sent notice for taking assessee to Insolvency and Bankruptcy Code Proceedings. With regards to loan taken through Mr. Barun More, the assessee has referred his statement recorded u/s.132(4) of the Act and contended that he has never stated that loan through such persons are accommodative loan, but such person has arranged unsecured loan for assessee and for this act, the assessee has paid commission of 0.25% to the said party. It was also stated that even contact number was also mentioned in such statement, hence mere non-production of such person does not mean that loan obtained through such parties are bogus loan. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 63 13.5. With regards to "Whats app conversation between assessee and his Accountant, the assessee has stated that same are not pertaining to current year, separate addition is already made in Asst. Year 2017-18 and the same not related to unsecured loan taken by assessee, hence same cannot be the base for treating loan taken from parties as bogus loan u/s. 68 of the Act. With regard to observation of the AO that balance sheet of Anamika Dealmark Pvt. Ltd make such company as paper company, the assessee has stated that merely such company has no assets or inventory does not make it paper company. It was alternatively argued that above loans are repaid in subsequent period and such repayment is accepted by the AO, hence even on this ground addition u/s.68 cannot be made for which reliance is placed on decision of Hon'ble Gujarat High court in the case of Commissioner of Income- tax, Rajkot -Vs- Ayachi Chandrashekhar Narsangji [2014] 42 taxmann. com 251 and others. 13.6. Thus the assessee contended that the AO has considered loan received during the year along with interest as subject matter of addition u/s.68 of the Act, hence there is no need for separate disallowance of interest expenditure u/s 37 of the Act for Rs.1,13 crore. So far as addition u/s 69C of the Act, assessee has claimed that during the course of search, no evidence was found which prove that such payment is made in cash, hence addition cannot be made on presumption. 13.7. On careful consideration of the relevant facts on records, the CIT[A] observed that the AO has made addition of unsecured loan I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 64 taken from four parties u/s.68 of the Act mainly relying upon investigation report (Kolkata based parties) of ADIT and considering loan taken through Mr. Barun More as accommodative loan. Before dealing with contention of the AO, it is observed that though AO has observed that unsecured loan from Kolkata based parties are non-genuine for the reason that such parties are not found at their addresses in post-search proceedings, it is observed that AO has also made addition of Rs.1,59,42,626 being loan received from Indian Infotech and Software Limited which is Mumbai based party. During the course of assessment proceedings, the assessee has submitted confirmation of such parties, PAN copies, Return of Income, Annual Accounts and Bank statements of depositors to the AO and from such details, it is apparent that all the unsecured loans were received through account payee cheques and AO has not found that no cash has been deposited prior to issuance of cheque to the assessee or assessee's unaccounted money is introduced in the bank accounts of the Creditors. The assessee has also made interest payment to such creditors after deducting TDS. 13.7. It is further observed that during the course of search, no incriminating evidences were found which can prove that the assessee has made cash payment against loan received from such parties or no statement of such creditors are recorded by AO which can prove that such parties are bogus or providing accommodating entries. It is settled position of law that addition cannot be made merely on presumption and when the Assessee has discharged his initial onus casted under section 68 of the Act, the AO ought to have brought evidences to disprove such evidences. In absence of I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 65 any corroborative evidence brought on record by the AO, addition made by him under Section 68 of the Act cannot be upheld. (i) Gujarat High Court in case of Dharmadev Finance in 43 taxmann.com 395 "Section 68 of the Income-tax Act, 1961-Cash credits (Burden of proof)-Various additions were made to assessee's income on account of cash credits - It was found that in respect of said credits assessee had filed PAN of creditors, their confirmation and their bank statement which established their creditworthiness - Moreover, transactions were made through banking channels Whether any addition could not be made to assessee's income under section 68- Held, yes [Para 5] [In favour of assessee)". (ii) Gujarat High Court in case of PCIT -Vs- RSA DIGI Prints vide Tax Appeal No: 503 of 2017 dated 06/09/2017 "3. From the materials on record, Commissioner of Income Tax (Appeals) and Tribunal both had come to the conclusion that the assessee had produced the copy of PAN card, address confirmation, copy of the return and the bank statements of the payee for the present assessment year as well as in the earlier assessment year where such an issue had cropped up. Essentially, Commissioner of Income Tax (Appeals) as well as the Tribunal held that the assessee established the genuineness of transaction, creditworthiness of payee and the source of the payment. The issue hinges on appreciation of material on record. No question of law arises. Tax Appeal is dismissed." (iii) Gujarat High Court in case of CIT Vs. Apex Therm Packaging (P.) Ltd [2014] 42 taxmann.com 473 (Gujarat) “Section 68 of the Income-tax Act - Cash credit (Unsecured loan) Assessment year 2007-08 Whether when full particulars, inclusive of confirmation with name, address and PAN Number, copy of income tax returns, balance sheet, profit and loss account and computation of total income in respect of all creditors/lenders were furnished and when it had been found that loans were furnished I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 66 through cheques and loan account were duly reflected in balance sheet, Assessing Officer was not justified in making addition - Held, yes [Para 6] [In favour of assessee).” (iv) Apart from above, reliance is placed on following decisions, wherein various courts have deleted addition under Section 68 of the Act. Gujarat High Court in case of Rohini Builders 256 ITR 360 "The assessee was a firm engaged in the business of dealings in land. During the assessment year under consideration the assessee had taken loans from various parties and during the course of assessment proceedings, the assessee had furnished the loan confirmations giving full address, GIR numbers/permanent account numbers, etc., of all the depositors. The Assessing Officer however issued summons to some of the creditors and also conducted inquiries into the genuineness or otherwise of the loans taken by the assessee. After considering the evidence, the Assessing Officer made an addition of Rs. 12,85,000/- to the returned ---income of the assessee. This was confirmed by the Commissioner of Income-tax (Appeals). On further appeal to the Tribunal the Tribunal held that the phraseology of section 68 of the Income-tax Act, 1961, was clear, that the Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year, that the legislative mandate is not in terms of the words "shall be charged to income- tax as the income of the assessee of that previous year, that the un- satisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as income of the assessee. The Tribunal found that the assessee had discharged the initial onus which lay on it in terms of section 68 by proving the identity of the creditors by giving their complete addresses, GIR numbers/permanent account numbers and the copies of assessment orders wherever readily available, that it had also proved the capacity of the creditors by showing that the amounts were received by the assessee by account payee cheques drawn from bank accounts of the creditors and the assessee was not expected to prove the genuineness of the cash deposited in the bank accounts of those creditors because under law the assessee can be asked to prove the source of the credit in its books of account but not the source of the source. Thus taking into I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 67 consideration the totality of the facts and circumstances of the case, and, in particular the fact that the Assessing Officer had not disallowed the interest claimed/paid in relation to these credits in the assessment year under consideration or even in the subsequent years, and tax had been deducted at source out of the interest paid/credited to the creditors, the Tribunal held that the Departmental authorities were not justified in making the addition of Rs. 12,85,000. On appeal to the High Court: Held, that considering the facts and circumstances of the case narrated by the Tribunal and the law explained by it, the appeal was liable to be dismissed. THE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THIS JUDGMENT: [2021] 254 ITR (ST.) 275-ED.” 13.8. The Ld. CIT[A] further held that the AO in his show cause notice as well as in assessment order has referred inquiry report pertaining to loan taken from Anamika Dealmark Pvt. Ltd. from whom assessee has taken loan for Rs.80,00,000 in current year and in such report, it was stated that such party was not found at address 3rd Floor, 28, Baroda Charan Bhattacharjee Lane, West Bengal. It is observed that during the course of assessment proceedings, the assessee has submitted copy of Return of Income of such party (AO has also received it from departmental record as mentioned in assessment order) and on perusal of such details, it is found that communication address was mentioned as Chamber No.121, Asha Chambers, 68 Bentick Street, Kolkatta and it is apparent from assessment order that no such inquiry was made by the AO at such address. The assessee has submitted legal notice issued by the creditors which contained address of the above creditors and on such address, no inquiry was made by the AO. Even the creditors are Private Limited Companies and all the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 68 parties are regularly filing their ROC Return and from website of ROC, the AO could have easily obtained addresses of the company and their directors, and would have made further inquiries. But the AO has relied upon investigation report during post search proceedings, however he has independently not made any inquiry during assessment proceedings or issued notice u/s.133(6) of the Act or summons u/s 131 of the Act even though assessee has submitted complete details of loan taken from such parties. In present Assessment Year 2015-16, the assessee has taken loan of Rs.1,59,42,626/- from M/s. Indian Infotech and Software Ltd and such depositor has communication address is of Mumbai and not Kolkatta and even during post search inquiry, no inquiry was made at Mumbai/Jaipur/Delhi based companies hence investigation report of Kolkatta Based company cannot be applied on Mumbai- based companies. It is relevant to consider decision of Hon'ble Gujarat High Court in case of PCIT Vs. D & H Enterprises [2016] 72 taxmann.com 91 wherein it is held as under: "Section 68, read with section 131. of the Income-tax Act, 1961-Cash credit (Advance) - Assessment years 2006-07 and 2007-08-In scrutiny, it was revealed that assessee had shown advances from 84 persons towards investment in land - Assessee submitted that these were received as advance booking amounts through cheques in ordinary course of business - Assessee had filed confirmations of all persons, copies of their bank statements, income tax returns, etc. - Assessing Officers was not satisfied and made additions of certain amounts for both assessment years Assessing Officer could have easily verified these sums from details available, merely Whether since because summons could not be served upon some parties or they did not appear before him, transactions could not be held to be non-genuine- Held, yes [Para 7] [In favour of assessee).” I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 69 13.9. Hon'ble Delhi High Court in the case of PCIT vs Adamine Constructions (P.) Ltd. [2018] 99 taxmann.com 44 held as under: "2. We notice that the search in the premises of the Bhushan Steel Group, had led to survey in the premises of various other assessees including M/s Adamine Construction Pvt. Ltd., and in the end the additions made in that case too were deleted. The deletion - again concurrently by the lower appellate authorities was upheld by this Court recently in respect of the same assessee for an earlier assessment. Here too, the Court has considered the materials. What is evident is that the AO went by only the report received and did not make the necessary further enquiries such as into the bank accounts or other particulars available with him but rather received the entire findings on the report, which cannot be considered as primary material. The assessee had discharged the onus initially cast upon it by providing the basic details which were not suitably enquired into by the AO. 3. No question of law arises; the appeal is consequently dismissed. The SLP filed by the Department was dismissed by the Hon'ble Supreme Court as reported in [2018] 99 taxmann.com 45.” 13.10. In other words, on one hand cases where the AO has conducted an inquiry and disproved whatever submitted by the assessee and in other hand, the AO simply assumed existence of such facts. All Hon'ble High Courts are unanimous in their approach that where the AO remained silent, did not conduct any inquiry, and merely on the basis of certain details submitted by the assessee draw an inference in such cases, he cannot simply doubt the stand of the assessee. 13.11. It is further observed that assessee has provided PAN of all the depositors and if he was having doubt regarding sources of funds which are used for making such loan to assessee or bank statements are not provided, AO would have easily verified such I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 70 details from concerned AO of such share applicants. Reliance is placed on decision of 37 Hon'ble Gujarat High court in the case of CIT vs. Ranchhod Jivabhai Nakhava, 208 Taxman 116. 13.12. The Hon'ble Bombay High court in the case of CIT v. Orchid Industries Pvt. Ltd, reported in [2017] 88 taxmann.com 502 held that merely the parties were not traceable and did not appear before the AO in response to summons, it does not mean that the transaction can be treated as bogus, if the documentation shows the genuineness of the transaction. The High court held that only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. 13.13. Similarly Hon'ble Delhi High Court in the case of PCIT vs Hi- Tech Residency (P.) Ltd [2018] 96 taxmann.com 402 has also held as under: “... Section 68 of the Income-tax Act, 1961 - Cash credit (Share capital) - Assessment year 2009-10 Section 68 addition was made in hands of assessee company since assessee was not able to produce any of director, shareholders or principal officer of companies to whom shares were allotted lenders from whom unsecured loans was taken - Tribunal considered said issued in detailed manner and deleted said addition holding that assessee had discharged its onus of establishing identity, genuineness and creditworthiness of both investors as well as lenders - Whether, on facts, there was no infirmity in said order - Held, yes [Paras 4 to 6] [In favour of assessee)" The SLP filed by the Revenue against the above decision was dismissed by Hon'ble Supreme Court in [2018] 96 taxmann.com 403. Ratio of above referred decisions are squarely applicable on present cases more particularly in case of assessee as exhaustive I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 71 search was carried out and no evidences were found which prove that assessee has obtained accommodative loan from the above persons and cash is exchanged against such loans. 14. The Ld CIT[A] after considering the submissions of the assessee and the assessment order passed by the Ld AO held that a. the AO has also referred to the Balance Sheet of Anamika Dealmark Pvt. Ltd and observed that as there is no inventory or fixed assets and entire loans & advances are represented by Reserves & Surplus, such company is Shell Company. b. that such company has shown meagre income in its Return of Income which means that said creditor has not creditworthiness. This presumption of AO is not supported by any concrete inquiry conducted by AO or based upon any ROC inquiry or based upon statement of entry operator or director of such company. c. that said company has shown gross interest income of Rs 22.16 lacs in its Profit & Loss account for current year and there is no evidence that Share capital & reserves and surplus shown in its balance sheet for Rs 20.99 crore are non-genuine or such company provides accommodative loans. d. However the AO has not given any adverse comments for other creditors in the assessment order, hence he was not justified in applying ratio of his analysis of Annual Account of one creditor being Anamika Dealmark Pvt Ltd to other companies and held that all other creditor companies are also not having any credit worthiness. e. With regards to adverse comments based upon recovery notice given by Anamika Dealmark Pvt. Ltd, through Advocate, it is I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 72 observed that such notice was dated 03/06/2019 wherein they have asked for recovery of Rs. 1.80 crore from assessee along with interest. It is observed that during the year under consideration, assessee has taken loan of Rs 1.55 crore inclusive of interest from such party and such loan was repaid in subsequent year. f. Further, assessee has taken loan of Rs.1.40 crore in A.Y. 2017- 18 from such party and such amount was not paid by assessee. The above notice was issued by Prashant Agarwal, Advocate of said company on behalf of depositor hence, assessee was not obliged to submit authority letter given by depositor to such advocate. Thus, observation of AO that there is no letter of authorization by depositor in favour of advocate and same cannot be reason for doubting loan taken by assessee. g. The AO has stated that address of depositor mentioned in such notice is different than that of address given in confirmation which also prove that loan is bogus. However, such observation of AO is incorrect because once AO was in knowledge of new address, he ought to have made inquiry at such new address or with advocate of said depositor. h. The AO has doubted the notice on the ground that such notice is issued after date of notice u/s 153A of the Act hence such notice is arranged notice. This is merely presumption and not corroborated by any other evidences. Once the assessee has submitted such notice, AO was empowered to conduct any inquiry with depositor or advocate of such depositor but AO has remained silent on this aspect. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 73 i. The AO has stated that depositor has demanded repayment of loan but in spite of lapse of six months, assessee has failed to provide any evidence regarding legal proceedings launched against such company. The assessee has already explained that he was under financial crunch so he couldn't repay such loan. When assessee is accepting above loan to be payable by him to depositor and acknowledging debt in annual accounts, there cannot be any issue of carrying legal matter against depositor as alleged by AO. j. The AO has also observed that in notice, it is stated that repeated requests were made by depositors for repaying such loan but assessee has not submitted any proof. The assessee has stated that that such communications were oral hence there cannot be any proof of same and such contention is found acceptable for the reason that if there were any written communication made by such depositors to assessee, Advocate ought to have referred them in notice. This contention of AO is mere presumption and does not make loan taken from such party as non-genuine. k. The assessee in his statement recorded during the course of search already stated that such loans were taken through Mr Barun More hence he was not aware of such parties. It is observed that loan taken in current year was already repaid in current year i.e. before the date of search. However, assessee has taken fresh loan of Rs 1.40 crore in March 2016 and interest on such loan is already paid on 30/09/2016. The search took place at the premises of assessee on April 2017 and on that day, loan was outstanding for merely one year hence there is force in I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 74 contention of assessee that said party would not have demanded loan repayment. l. During the course of appellate proceedings, ARS of the assessee have also drawn attention to one of the notice received from depositor for taking assessee to IBC proceedings and on this basis, ARS of the assessee have contended that there cannot be any intention on part of assessee for requesting depositor to issue such notices to show accommodative loan as genuine loan as alleged by AO. Considering these facts, it is observed that AO has merely created doubt in loan transactions and that too without any substance hence such contention cannot be upheld. 14.1. In addition to the above, the Ld CIT[A] observed that unsecured loan taken in the asst. year 2015-16 to the extent of Rs. 10.01 crore are already repaid by the assessee in current year/ subsequent year through account payee cheques and no adverse inference is drawn by the AO, that assessee has received cash against such repayment or such repayment is non-genuine hence as per decision of Hon'ble Gujarat High Court in the case of CIT-Vs- Ayachi Chandrashekhar Narsangji [2014] 42 taxmann.com 251 (supra) and the judgments/decisions of various courts, in such cases, addition u/s.68 is not justified. Details of the repayments made to various depositors are as under: Sr. No Name of the alleged party Asst Year of receipt of loan Amount as alleged by the AO Asset Year of repaid of loan Amount of loan repaid including interest (if any) 1 Allied Commodeal Pvt. Ltd 2015-16 75 34 952 2016-17 75 34 952 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 75 2 Anamika Dealmark Pvt. Ltd. 2015-16 83 66 386 2015-16 83 66 386 3 Bholenath Commosale Pvt. Ltd 2015-16 1 54 94 085 2015-16 1 54 94 085 4 Brajdham Mercantile Pvt . Ltd 2015-16 3 07 723 2015-16 3 07 723 5 Cygnet Realtors Pvt. Ltd 2015-16 6155082 2015-16 61 55 082 6 Indian Info Tech and software Ltd 2015-16 1 59 42 626 2017-18 1 59 42 626 7 Monalika Texfab Pvt. Ltd 2015-16 6129561 2015-16 & 2017-18 61 29 561 8 Moonnight Suppliers Pvt Ltd 2015-16 1 52 66 856 2015-16 1 52 66 856 9 Mountview Dealcomm Pvt Ltd. 2015-16 7534952 2015-16 & 2016-17 75 34 952 10 Shivom Investment and Consultancy Pvt Ltd 2015-16 1 02 98 147 2015-16 & 2016-17 1 02 98 147 11 Stylish Agencies Pvt Ltd 2015-16 50 22 192 2015-16 & 2016-17 5022192 12 Subhrekha Dealmark Pvt Ltd 2015-16 2576561 2018-19 2076561 Total 10 06 29 123 10 01 29 123 14.2. Thus the Ld CIT[A] confirmed the addition made u/s. 68 of the Act for Rs.12,57,45,942 on principle, however, the additions made in this year already been held to be non maintainable for want of incriminating material hence on technical/legal grounds this addition would not sustain observing as follows: “It is observed that AO has made addition u/s 68 of the Act for Rs 15,62,10,036/- for loan received from various parties. As discussed herein above elaborately, appellant is required to prove identity, genuineness and creditworthiness of depositors. However, appellant I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 76 has not provided bank statements for loon taken from various parties (Except in the case of Cygnet Realtors Pvt Limited for Rs 61,55,082/-, Rs 1,59,42,626/- from India Infotech and software Limited and Rs 83,66,386/- being Anamika Dealmark Pvt Limited) for Rs 12,57,45,942/- hence it is not proved that funds are received by appellant from these parties only or not from other accounts and whether such parties have explained sources to give loan to appellant or not is also not verifiable. It is not apparent from records that whether depositors have made cash deposits prior to giving loan to appellant or not and such details cannot be verified in absence of bank statements. As appellant has failed to prove one of the basic ingredients being creditworthiness of depositors as envisaged u/s 68 of the Act, AO was justified in making addition u/s 68 of the Act to that extent. However, as stated in preceding grounds, during the course of search, no incriminating evidences were found which can prove that loan taken by appellant are bogus or any cash trail was referred by AO in assessment order which can prove that appellant has exchanged cash against loan taken by him/repaid by him. While adjudicating Ground No 2 herein above, it is already held that addition u/s 68 of the Act made by AO is beyond the scope of provisions of section 153A as upheld by various courts referred therein hence considering these facts, it is held that addition u/s 68 of the Act made by AO in present assessment year cannot be upheld. In view of detailed discussion made herein above and relying upon binding decisions referred supra, AO has not brought any concrete evidences to prove that unsecured loan taken by appellant from above referred four parties are bogus hence addition made u/s 68 of the Act for Rs.12,57,45,942 is confirmed on principle. However, additions made in the year under consideration have already been held to be non-maintainable for want of incriminating material hence on technical/legal grounds this addition would not sustain.” 15. During the course of hearing before us, Ld. CIT DR for the Revenue strongly supported the orders passed by the Assessing Officer and pleaded to uphold the additions made by him. Per contra the Ld Counsel appearing for the assessee submitted a chart, showing details of name of the lenders, amount of loan taken, whether such loan is repaid details, nature of evidences produced before AO and CIT(A), to substantiate unsecured loans I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 77 are genuine and referring to the various documents in the Paper Book where such details are filed before the lower authorities. For better understanding copy of the chart [for A.Y. 2015-16] is reproduced hereunder: Name of Creditor Addition by AO Remarks Allied Commodeal Pvt. Ltd. 75,34,952 (PB Pg 35-58) Confirmation, ITR, Financial Statement & repaid in Subsequent year Ambashree Infratech 25,39,390 (PB Pg 59-78) Confirmation, ITR, Financial Statements Anamika Dealmark Pvt. Ltd. 83,66,386 (PB Pg 79-103) Confirmation, ITR, Financial Statement, repaid in same year Bholenath Commosale Pvt. Ltd. 1,54,94,085 (PB Pg 104 to 127) Confirmation, ITR, Financial Statement, repaid in same year Blockdeal Dealcom Pvt. Ltd. 35,63,690 (PB Pg 128-139) Confirmation, ITR, Financial Statement Brajdham Mercantile Pvt. Ltd. 3,07,723 (PB Pg 140-170) Confirmation, ITR, Financial Statement, repaid in same year Conceit Mercentile Pvt. Ltd. 1,03,66,286 (PB Pg 171 - 191) PAN, ITR, Confirmation, Financial Statements Cygnet Realtors Pvt. Ltd. 61,55,082 (PB Pg 192- 211) Confirmation, ITR, Bank & Financial Statements, repaid in same year F.Y. Ganeshvani Commosales Pvt. Ltd. 15,27,296 (PB Pg 212-235) Confirmation, ITR, Financial Statement Indian Infotech and Software Ltd. 1,59,42,626 (PB Pg 243 - 323) confirmation, Bank & Financial statement, repaid in A.Y. 2017-18 Kulaga Agencies Pvt. Ltd. 66,39,031 (PB Pg 324-343) Confirmation, ITR, Financial Statements I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 78 Monalika Texfab Pvt. Ltd. (Delhi) 61,29,561 (PB Pg 344-363) Confirmation, ITR, Financial Statements, repaid in same and subsequent FY Moonnigh Suppliers Pvt. Ltd. (Thane) 1,52,66,856 (PB Pg 364-389) Confirmation, ITR, Financial Statements, repaid in same A.Y. Mountview Dealcomm Pvt. Ltd. (Kolkata) 75,34,952 (PB Pg 390-391) Confirmation, ITR, Repaid in A.Y. 15-16 & 16-17 Ostrich Commodities Pvt. Ltd. (Kolkata) 2,33,45,201 (PB Pg 392-414) Confirmation, PAN, Computation, Financial Statements Shivom Investment and Consultancy Pvt. Ltd. (Kolkata] 1,02,98,147 (PB Pg 415 - 444) Confirmation, ITR, Financial Statements, repaid in same and subsequent AYs Stylish Agencies Pvt. Ltd. (Kolkata) 50,22,192 (PB Pg 445- 467) Confirmation, ITR, Financial Statement, repaid in same and subsequent AY Subhreka Dealmark Pvt. Ltd. (KolKata) 25,76,561 (PB Pg 468 - 475) Confirmation, ITR, Financial Statements, repaid in same and subsequent AY Unifour Commosales Pvt. Ltd. (Kolkata) 41,00,019 (PB Pg 476- 497) Confirmation, ITR, Financial Statements Haji Ibrahim & Sons (Mumbai) 35,00,000 (PB Pg 236 -242) Affidavit, ledger A/c Total 15,62,10,036 15.1. Ld. Counsel submitted that, though substantial details are provided by referring to relevant pages in the Paper Book, the Ld. CIT(A) has deleted addition on merits only loans taken from M/s. Cygnet Realtors Pvt. Ltd loan of Rs. 61,55,082/- from M/s. India Infotech and Software Ltd of Rs.1,59,42,626/- and from M/s. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 79 Anamika Dealmark Pvt Ltd of Rs.83,66,386/- were proved. Ld. Counsel further submitted that apart from the above referred three parties, addition of all other unsecured loan taken by the assessee has been confirmed by CIT(A) merely for the reason that assessee could not provide copy of bank statements of such lenders. It is further submitted that except from bank statements, assessee has provided copy of ITR, Confirmation of all parties, financial statements, in some of cases Affidavit of lender and further out of total unsecured loan of Rs.15,62,10,036, Ld. AR of the assessee has submitted that, loan of Rs.10,06,29,123/- has been repaid in the same asst year or subsequent asst years. Thus the Counsel submitted that the addition made by the Ld AO is not in accordance with law and not maintainable and relied upon various case laws. 15.3. We have given our thoughtful consideration and perused the materials available on record. The addition made by the Assessing Officer invoking Section 68 does not hold it good, since the assessee has filed the confirmation from the lenders, Bank statements, Income Tax Return of the creditors, Financial Statements, etc. Thus the assessee has discharged its initial onus namely identity of the creditors, genuineness of the transactions and creditworthiness of the creditors. Further the Assessing Officer has disbelieved the same, but has not considered the repayment of loans by the assessee in the very same assessment year and subsequent assessment years. Thus the credit worthiness of the lenders, genuineness of the transactions are proved. Therefore the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 80 addition made by the Assessing Officer u/s. 68 of the Act is not sustainable in law. 15.4. Further the Hon’ble Jurisdictional High Court in the case of Ayachi Chandrashekhar Narsangji (cited supra) it was held that when the repayment of loan is accepted by the Revenue then the genuineness of the transactions cannot be doubted observing as follows: Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit [Loans] -Assessment year 2006-07 - Assessing Officer framed ,assessment under section 143(3) wherein he made addition of Rs. 1.45 crore under section 68 on ground that loan taken from one ‘IA’ was not explained satisfactorily - On appeal, Commissioner (Appeals) was satisfied with respect to genuineness of transaction and creditworthiness of MA' and, therefore, deleted addition - It was found that total loan of Rs. 1.60 crore was advanced to assessee, out of which Rs.15 lakh was repaid - Therefore, an amount of Rs.1.45 crore remained outstanding to be paid to ‘IA’ - Balance loan amount was repaid by assessee in immediately next financial year - Whether when Department had accepted same, addition made by Assessing Officer was to be deleted - Held, yes [Para 6] [In favour of assessee] 15.5. In the case of CIT Vs. Shri Mahavir Crimpers, [2018] 95 taxmann.com 323 (Guj.) wherein it has been held as follows: "5. We have heard both the parties. There is no dispute so far as identity of the creditor party M/s. Raj Capital & Finance Pvt. Ltd. is concerned. There is further no quarrel that the Assessing Officer does not dispute the fact that the assessee has not availed any cash loan from the said entity. His only case is that the assessee has not been able to prove source along with genuineness and creditworthiness of the above stated entity. It emanates from above extracted portion that the assessee has filed all relevant details along with assessment records of the said entity explaining source of the loans to the above entity's balance sheet indicating sufficient reserves, surplus and share premium as followed by repayment in succeeding assessment year. Learned Departmental Representative fails to I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 81 rebut CIT (A)'s conclusion that the assessee has been having regular loan transactions with the said entity. We notice in this backdrop that Hon'ble Jurisdictional high court's decision in DCIT v. Rohini Builders, (2002) 256 ITR 360 (Guj) upholding tribunal's conclusion deleting Section 68 addition in view of identical details; squarely applies here. So in their lordships' latter decision in CIT v. Ayachi Chandrashekhar Narsangji (2014) 42 taxmann.com 251 (Guj) confirming this tribunal's another decision reversing Section 68 addition wherein the department head accepted repayment of loan in subsequent year to be correct. We take into account all these facts and judicial precedents to affirm CIT(A)'s findings under challenge deleting the impugned addition. This first substantive ground is accordingly declined." 15.6. In the case of ITO Vs. Shanti Enterprise, [2016] 71 taxmann.com 275 wherein it has been held as follows: ".....amounts were received by the assessee by account payee cheques and initial burden of proving the credits was discharged. It is held that the assessee need not prove the source of the credits and the fact that the explanation was not satisfactory would not automatically result in deeming amounts as income of the assessee...." 15.7. Respectfully following the ratio of the above judgments rendered by the Jurisdictional High Court and decisions of the Tribunal, we have no hesitation in confirming the order passed by the Ld. CIT(A), who deleted the addition made by the Assessing Officer u/s. 68 of the Act. Thus the grounds raised by the Revenue for the A.Y. 2015-16 is devoid of merits and the same is dismissed. 15.8. Consequently similar Grounds raised by the Revenue for the Asst. Year 2014-15 of Rs.19,69,49,246/=; for the Asst. Year 2017-18 of Rs.10,60,10,356/= and for the Asst. Year 2018-19 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 82 of Rs.8,50,20,181/= are devoid of merits and the same is dismissed. 16. The Ld AO disallowed interest expenditure paid u/s 37 of the Act on such loan of Rs.1,13,44,489/- for the A.Y.2015-16. It is found that while making addition u/s. 68 of the Act, the AO has not only considered principle amount outstanding at year end, but also considered interest expenditure credited in creditors account [net of TDS) which means that addition u/s.68 of the Act made by AO is inclusive of interest payment made to such parties. Hence on this ground, the LdCIT[A] held that no separate disallowance/ double disallowance of interest expenditure is justified. Therefore, that part of addition made by AO u/s.68 of the Act is deleted, hence even on this ground, consequential interest payment disallowed by the AO cannot be sustained. Otherwise also this double disallowance of interest needs be deleted. 16.2. The assessee has alternatively argued that telescoping of on-money receipt should be given against the addition made u/s.68 of the Act. However the CIT[A] held that as the entire addition made by the AO u/s. 68 is deleted on technical ground, this plea of telescoping was rejected. 16.3. The ld CIT DR could not produce any contra view, evidences on the above findings of the Ld CIT[A]. Further the interest is paid through cheque payments with appropriate TDS. Therefore the grounds raised by the Revenue on interest disallowance u/s.37 of the Act is devoid of merits and the same is dismissed for the Asst. years 2014-15, 2015-16, 2017-18 and 2018-19. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 83 17. So far as the addition u/s 69C of the commission expenses paid in cash is concerned, it is found that the assessee himself in his statement u/s 132(4) of the Act has admitted that he has made such payment in cash and such expenditure is not recorded in books of accounts. Further the assessee has not retracted from such statement during post search inquiry or in assessment proceedings, hence the AO was correct in making addition u/s 69C of the Act of Rs.3,90,525/-, as this was paid for obtaining loans through middle man and these loans have been found genuine. 17.1. The Revenue wrongly raised the Ground No.11 that the CIT[A] erred in deleting the commission expenses of Rs.3,90,525/=. Since the Ld CIT[A] confirmed this addition, Revenue is NOT aggrieved and therefore this Ground No.11 [ITA No. 40/ Ahd/2021 for AY.2015-16] is not maintainable and the same is hereby dismissed. 17.2. Similarly the Revenue wrongly raised the Ground No.10 that the CIT[A] erred in deleting the commission expenses of Rs.4,92,373/=. Since the Ld CIT[A] confirmed this addition, Revenue is NOT aggrieved and therefore this Ground No.10 [ITA No. 39/ Ahd/2021 for AY.2014-15] is not maintainable and the same is hereby dismissed. 18. Next issue is addition of Rs.10 crores considering Whatsapp conversation [for A.Y.2016-17] : I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 84 18.1. It is noticed by the AO that during the course of search at the premises of assessee, “WhatsApp" message was found from mobile of the assessee which proves that assessee has received Rs. 10 crore from deal of an immovable property. It was the contention of assessee before the AO that he was not owner of land and such message nowhere prove that he has received such commission. It was stated that as the deal was not getting materialized, assessee acted as mediator between two parties as friend and his role was very limited for which he has not received any consideration. 18.2. The AO has not accepted the above explanation of the assessee and observed the following discrepancies in explanation offered by the assessee: (i) Identity of the parties involved are not given. (ii) Identity about the land in which the transaction was made. (iii) Current status of the transaction. (iv) From the conversation it was seen that the Assessee was talking about returning the amounts received. If the Assessee was merely a mediator where is the question of him returning any money? On this basis, AO has made addition of Rs 10 crore as unaccounted commission in the hands of the assessee. 18.3. The assessee has submitted that "Whats app" message relied upon by AO nowhere prove that assessee has in fact received such amount as commission nor during the course of search, any other document was found which establishes cash trail of such transaction. It was contended by the assessee that he was not I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 85 having any interest in the property and as deal of the property was not getting materialized, assessee out of love and affection initially acted as mediator to assist both purchaser and seller of land and even on later stage of finalization of deal, assessee was not at all involved in such transaction nor was any party to final sale deed hence there cannot be any presumption of receipt of alleged Rs. 10 crore by assessee. The assessee has also contended that nowhere from the messages, it is emerging that the Assessee has either accepted or repaid the alleged amount from the proposed buyer/ seller as presumed by the AO and even parties involved in the said transactions was already centralized with same assessing officer. It was argued by assessee that there was no admission by either purchaser or seller of the property regarding payment of Rs 10 crore to assessee during the course of search hence addition made by AO on presumption should be deleted. 18.4. On perusal of the relevant facts on records, the CIT[A] held that the entire addition of Rs 10 crore being alleged undisclosed commission is made in the hands of assessee based upon "Whatsapp text with Devang Shah found and seized from assessees mobile during the course of search. The AO has made entire addition based upon show cause notice dated 27-12-2019 issued at the fag end of assessment proceedings and assessee has filed written submission on very same date and no other specific queries based upon such submission was raised by the AO. It is pertinent to note that though above referred "Whats conversation" was seized during the course of search. Even there was no statement of assessee recorded u/s 132(4)/131 during the course of search or I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 86 subsequently admission of unaccounted receipts/commission by the assessee. Even on perusal of various statements of assessee recorded during the course of search and post search proceedings, it is found that no specific question was raised on this conversation by Authorized Officer. 18.5. The AO has taxed Rs 10 crore as undisclosed commission in the hands of assessee but conversation referred by the AO in the assessment order nowhere prove that assessee has in fact received such commission. Such conversation nowhere establishes that assessee was having any interest or rights in such land when the transaction was between two parties i.e. one Devang and other being Jayesh. The conversation of Devang to Sunit states that "... as per concluded deal, on getting FP, NA and Title certificate, we will enter into MOU and or Banakhat and pay Rs.10 crore.” But such conversation relates to future event and nowhere prove that such amount was to be received by assessee or infect received by assessee. It would have been the advance against the sale consideration. 18.6. Further during the course of exhaustive search carried out in the case of the assessee, no incriminating material was found which establishes exact cash trail of receipt of such money by the assessee on the date of conversation or later date. The assessee has clearly stated that he has acted as intermediary between two parties as deal was not getting materialized and he acted only out of love & affection for which no consideration was received nor he I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 87 was party at the time of final execution of sale deed. These facts are not rebutted by the AO in his assessment order nor brought any contrary evidences on record, which can prove that the assessee has in fact received such commission. The onus was on the AO to co-relate such conversation with actual transaction of the land by cogent evidences or notings found during the course of search including statement of other parties, if any recorded in connection with his allegation in the assessment order. The clinching evidences establishing AO's theory of receipt of money by the assessee are not found during the course of search nor brought on record by the AO by subsequent inquires. The AO in the assessment order observed that from the conversation it was seen that the Assessee was talking about returning the amounts received and if the Assessee was merely a mediator, where is the question of him returning any money. However, on perusal of conversation referred supra, it is not emanating that assessee was having conversation regarding returning of any amount as observed by AO hence finding given by AO without any substance cannot be upheld. The onus was on AO to bring on record nature of land deal, persons with whom such deal was going on and how assessee has received such commission but such onus is not discharged by AO. 18.7. It is pertinent to refer to decision of the co-ordinate Bench in the case of Nishant Construction Pvt. Limited (ITA No.2732/Ahd/ 2016) dated 25/09/2019 wherein it is held as under: “.....18. Firstly, we would like to deal with that piece of paper seized and impounded from the employee of the assessee company namely Shri Virendra N Thakkar at premises No. 801, 802, Regency Plaza, Satellite Road, Ahmedabad during survey proceeding. Admittedly, I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 88 the said document as is having no title or date or broad details to draw an inference that it was particularly relating to payment made by the appellant to Dasharathbhai Punjabhai Mahendtabhai Dashrathbhai and Rajendrabhai Dashrathbhai for purchase of land for the residential project of Ratnakar VI of the assessee company. In this regard, we find that no independent enquiry has been conducted by the Revenue by cross verification from the vendors of the land in question; the revenue has only cooked up a story on the basis of the figures appeared on such loose papers on surmises and conjectures. Purely on assumption basis the Revenue has drawn an inference that the same is nothing but relating to the property deal in question which remains an inherent defect while making addition against the assessee. If that be so, then the document can only be titled as "dumb document "and nothing else. It is also a fact as the deed of conveyance registered with the registration authorities at the prevailing Jantri rate upon payment of appropriate stamp duty charges; such stamp duty charges has been calculated on the basis of the Jantri rate not by the appellant company but by the office of the Registrar and thus the amount declared in the Deed of Registration cannot, at all be said to be incorrect and/questioned provided there is an independent enquiry made by the authorities below to that effect. In this respect, we would like to discuss the judgment passed by the Hon'ble Delhi High Court in the matter of CIT. C-1-vs-Vatika Landbase Pvt. Ltd. in that matter, the Assessing Officer did not make any enquiry from the employee or from buyers of flats in respect of actual price paid by them. In that circumstances of the case the impugned addition made merely on the basis of and unsigned and undated seized document has been held to be unsustainable in the eye of law. Thus, the proposition made by the revenue towards making addition on the basis of the figures mentioned on the said loose dumb document, thus, cannot be considered to be valid evidence in the absence of any enquiry made by the authorities which ought to have done in the manner as already dealt with us hereinabove. No authority acting judicially would have acted on the basis of a loose paper having no evidentiary value had there been minimum application of mind. In this regard we have considered the judgment relied upon by the Learned AR passed in the matter of V. C. Shukla, reported in 1998(3) SCC 410 wherein, it was held that the loose sheet cannot be said to be the book or entries therein is not an admissible evidence. In the case before us such loose paper was found from one of the employees of the assessee company namely Mr. Virender N. Thakkar. Shri Thakkar did not depose that this particular loose paper belongs to the appellant company or it relates to the payment I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 89 made for land in cash by the appellant company. Relying on the figure mentioned in that particular loose paper and assuming that relates to the payment made by the appellant in cash towards land dealing is ultimately is of no value if the very basis of such conclusion is not having any true force in the eye of law. We have further considered the judgment passed in the matter of CIT, Delhi- VI-vs-Girish Chaudhary. reported in (2007) 163 Taxmann 608 (Delhi) where in similar circumstances a document containing entry '48' was seized from the premises of the company in which the assessee was a Director. As assessee failed to explain the said entry, the Assessing Officer treated Rs.48 Lakh as assessee's undisclosed income and made addition. The Hon'ble Court held that since there was no material on record to show as to on what basis the Assessing Officer has reached at the conclusion that figure "48" was to be read as 48 lakhs and thus document recovered was a "dumb document", addition therefore was unjustified and upheld the order passed by the Learned Tribunal in deleting such addition. In another matter the Hon'ble ITAT, Chennai Bench in the case of M.M. Fisheries Private Ltd.-vs.-DCIT, reported in 17 ITA No.2732/ Ahd/ 2016 SOT 5 observed as follows "...the duty the Assessing Officer is not only to assess the income but also to investigate into the details of such income. The Assessing Officer had not established Nexus between the loose slips and the seized material. There was no date or signature in the loose slips. No narrations or descriptions and not strictly bound by rules and pleading as well as materials on record and is legitimately entitled to Act on the material which may not be accepted as evidences, nevertheless such discretion does not entitled them to make a pure guess and base an assessment entirely upon it without reference to any material or evidence at all". If the ratio of this particular judgment is made to be applied in the instant case then the addition made on the basis of the loose paper impounded from the office premises of the appellant company is of no value at all. 19. Secondly, we find that time and again the authorities below has relied upon the statement made by Shri Upendra C. Shah recorded during the survey on 20.05.2011 accepting discrepancy in the books and disclosing Rs.15 crore but the affidavit dated 25.05.2011 shown by the assessee with a specific statement that such statement so recorded during survey was under pressure and coercion has not been taken into consideration in its proper perspective. The judgment passed by the Hon'ble Madras High Court I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 90 in the matter of CIT -vs- S. Kadarkhan, reported in 352 ITR 480 holding that statement during survey has no evidentiary value has been upheld by the Hon'ble Apex Court. The ratio has also been followed by the Jurisdictional High Court in the case of CIT-vs- Sardaben K. Modi, reported in 217 Taxman 89. In the said judgment the Hon'ble Court was pleased to refer the CBDT Circular dated 10.03.2003 whereby and whereunder the Board has instructed that no attempt should be made to obtain confessional statement of disclosure and evidence should be collected. We further find from the submissions made by the revenue that they have prayed for setting aside the issue to the learned AO for re- examination of the matter which, according to us is not permissible at this stage. If the prayer is granted by us, then this will be nothing but a premium on the inaction made by the authorities below on this aspect when they failed to avail the chances to do so at the relevant time. Both the Learned AO or by the Learned CIT(A) failed to do it. Opportunity of cross verification from the vendors, in our considered view should not be given in the hands of the Revenue once again which will be opening a further avenue for multiple innings which has been deprecated by the Hon'ble Jurisdictional High Court in the matter of Rajesh Babubhai Damania-vs-CIT, reported in 251 ITR 54 particularly when the alleged unaccounted investment made by the assessee in respect of the property in question has not been established by the Revenue before us. Thus, taking into consideration the entire aspect of the matter, the addition made on the basis of the "dumb document" is unjustified, unwarranted and bad in law which is liable to be set aside. Hence, with the aforesaid observation, we delete the addition of Rs. 18,05,87,658/- towards alleged unaccounted investment in purchase of land of the project Ratnakar-IV of the assessee company. Thus, this ground of appeal preferred by the assessee is allowed. " 18.8. Co-ordinate Bench decision of the ITAT in the case of Dr. Keyur Parikh & Others -Vs- ACIT No. IT(SS)A Nos. 604/Ahd/2011 dated 18/10/2013 wherein it is held as under: "Unaccounted investment for the purchase of land taxability in the hands of individual assessee or company held that:- the registered sale deed dated 17.10.2007 was not executed between two individuals but it was purchased on behalf of a company, namely, CCCPL, on one hand, from other corporate entities, seven in number, on the other hand. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 91 Therefore, the transaction carried out was a well-publicized transaction. Rather facts of the case have further revealed that earlier the land in question belonged to certain co-operative societies. Such a sale deed thus cannot be treated as a "close-door-deal". Suspicion howsoever strong cannot take the place of evidence - those were not even the incriminating material but simply computer generated projection sheets, therefore, hard to say, synonymous to clinching material evidence depicting cash transaction, hence erroneously suspected by the Revenue Department. We hereby hold that there was no evidence in possession of the Revenue Department to hold that the assessee had in fact made an unaccounted investment towards the purchase of the property.” 18.9. The decisions referred in the above cases have discussed the provisions of section 292C of the Act, about the Dumb Documents and evidentiary value of loose sheet etc. found during the course of search. In our considered view the ratio of above decisions are squarely applicable in the present case as the AO has not brought on record any material evidence to prove that the assessee has actually received Rs. 10 crore as commission for alleged property deal. Considering facts and decisions referred supra, the addition of Rs. 10 crore made by the AO is deleted and the Grounds raised by the Revenue is devoid of merits and the same is hereby rejected. 19. The next issue is deletion of Rs. 14,25,731/- being difference of cash found as per the trial balance (For the Asst Year 2018-19) 19.1. During the course of search, the A O found cash balance as per trial balance of various concerns of the assessee was Rs. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 92 30,03,931/- against which cash of Rs. 15,78,200/- was found from the residence as well as business premises of the assessee, therefore the difference in cash balance of Rs.14,25,731/- was noticed. After calling for explanation from the assessee, the Assessing Officer added the difference in cash balance of Rs.14,25,731/- as expenses made out of books and added to the total income of the assessee. 19.2. During the course of search, the assessee explained that cash balance as per books of account was higher than what was found physically during the course of search which means that source of such expenses would be out of cash-on-hand as per trial balance dated 7th April, 2017 and addition made by the Ld. Assessing officer is simply on the basis of assumption without having any clinching evidence to justify or to prove that the Assessee has incurred an expenses out of the books. After considering the above submissions of the assessee, the Ld. CIT(A) held that mere difference in physical cash balance compared to book balance cannot lead to an automatic conclusion that the same is on account of incurrence of cash expenses out of books. The assessee has duly explained that there was sufficient cash balance and the same was in excess of physical cash found during the course of search, hence even if cash expenses are incurred by the assessee, the same are out of explained sources. Thus the Assessing Officer has not provided any evidence to prove his contention and in absence of same, the addition cannot be made more particularly when the assessee has proved that expenses are incurred out of explained sources of cash. The Ld. CIT(A) following Kolkata I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 93 Tribunal decision in the case of Subhas Brothers Jewellers (P.) Ltd. reported in 51 taxmann.com 422 wherein it was held that merely because shortages had been noticed as compared to books, it could not be said that any undisclosed investment/money was made by assessee. As regards cash shortages, shortage has been found as compared to books. The cash might have been used for making unaccounted purchases or other purposes for which no cogent material is available. In such circumstances merely on conjectures or surmises addition under section 69A of the Act cannot be made. Therefore the Ld. CIT(A) deleted the addition of Rs. 14,25,731/- as difference in cash balance. 19.3. The Ld. D.R. appearing for the Revenue could not contravent the above findings of the Ld. CIT(A). Further the Hon'ble Pune ITAT in case of M/s Kamble Gold vs ITO in ITA No. 899/PUN/2019 dated 24th September, 2019 has held that when there is no evidence to show that the short cash was utilized elsewhere, addition on account of same cannot be made. Following are the relevant findings: “7. After hearing both the sides and perusing the said order of the Tribunal (supra), find the para 5 of the said order of the Tribunal (supra) is relevant for the legal proposition that the said cash shortage can be given against the unaccounted purchase of jewellery. For the sake of completeness, the said para 5 of the order of the Tribunal (supra) is extracted hereunder:- 5. From the above paras, we find that on the date of survey, stock was found in excess of book stock to the extent of Rs.24,10,868/- and the cash was found short as compared to cash balance as per cash book to the extent of Rs.1,82,527)- The AO has noted that the assessee firm has declared additional income of Rs. 24.20 Lakhs in the P&L account whereas no additional income was declared in respect of short cash found of Rs.1,82,527/- and therefore, the AO made addition of short cash found of Rs.1,82,527/-. We fail to I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 94 understand the basis of making this additions. In fact, in the absence of any other evidence regarding the user of such cash available as per book but not found physically at the time of survey, the same should have been considered as utilizer for purchasing goods which was found in excess of book stock and therefore, even in respect of excess book stock, extra income to be declared or added could have been reduced to the extent of short cash found. But it is seen that the assessee has declared total amount of excess stock found as additional income. Be that as it may but in our considered opinion, no addition is called for in respect of short cash found at the time of survey in the facts and circumstances of the present case and hence, we delete the same." 8. Thus, like in the above said case, the Revenue did not have any evidence to show that the short cash was utilized elsewhere. Considering the above and following the parity of reasoning, I am of the opinion that the said issue should be allowed in favour of the assessee. Therefore, it is directed to the Assessing Officer and the CIT(A) to delete the entire addition made on account of unaccounted purchase of jewellery as well as cash shortage. Thus, the ground no 2 raised by the assessee is allowed.” 19.4. Respectfully following the above decision, the grounds raised by the Revenue is devoid of merit and the same is hereby dismissed. 20. Now let us take assessee appeal in IT(SS)A No.25/Ahd/2021 relating to Assessment Year 2017-18 and the Grounds of Appeal raised by the Assessee reads as under: 1. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs.36,30,000/- on account of unexplained income in the form of on-money receipts, when no such addition is called. The CIT(A) ought to have allowed the same. 2. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in not granting application of alleged on-money against addition upheld u/s 68 of the Act. 3. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition on account of unsecured I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 95 loans for Rs. 1,81,79,546/- u/s 68 of the Act. The CIT(A) ought to have allowed the same. 4. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs. 3,10,475/- on account of alleged unexplained commission payment under section 69C of the Act, where no such addition is called for. 5. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs. 1,37,96,000 as unexplained expenditure under section 69C of the Act, where no such addition is called for. The Ld. CIT(A) ought to have allowed the same. 6. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs. 91,70,000 as unexplained money under section 69A of the Act, where no such addition is called for. The Ld. CIT(A) ought to have allowed the same 7. On the facts and in the circumstances of the case, the leamed CIT(Appeals) erred in confirming addition of Rs. 16,40,000/- as unexplained money under section 69A of the Act, where no such addition is called for. The Ld. CIT(A) ought to have allowed the same. 8. On the facts and in the circumstances of the case, the leamed CIT(Appeals) erred in confirming addition of Rs. 3,91,663/- under section 69A of the Act as unaccounted money. The Ld. CIT(A) ough to have allowed the same. 21. Regarding Ground No. 1 namely addition on account of receipt of on-money of Rs. 36,30,000/- and Ground No. 2 giving benefit of telescoping the unexplained expenses on the on-money receipt. 21.1. This issue is considered by us vide Para Nos. 9.4 to 9.6 of this common order, wherein restricting the profit ratio of the on-money receipt at 20% of Rs.36,30,000/- and directed the Assessing Officer to make addition of Rs.7,26,000/- only. Thus the Ground No. 1 raised by the Assessee is partly allowed. Further on-money having not been recorded in the regular books of account, the question of telescoping does not arise. Thus the Ground No. 2 raised by the Assessee is hereby rejected. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 96 22. Ground No. 3 confirming the addition of unsecured loan of Rs. 1,81,79,546/-. The Ld. Counsel for the assessee submitted that the Ld. CIT(A) has confirmed the addition since the assessee could not provide copy of the Bank Statement of the three parties namely Mr. Bahubali S. Shah for Rs. 29,10,026, M/s. Flumox Marketing Pvt. Ltd. of Rs. 1,26,20,260/- and M/s. Monalica Tex Fav Pvt. Ltd. of Rs. 52,68,260/- in all aggregating to Rs. 1,81,79,546/-. 22.1. Ld. Counsel drawn our attention to Page Nos. 44 & 45 of the Paper Book wherein confirmation of accounts from Mr. Bahubali S. Shah is placed on record. Similarly in the case of M/s. Flumox Marketing Pvt. Ltd. copy of the confirmation is placed on record at Page No. 46 & 47 of the Paper Book. In the case of M/s. Monalica Tex Fab Pvt. Ltd. copy of the balance confirmation at page no. 81 of the Paper Book. The Ld. Counsel brought to our notice to page No. 110 of the Ld. CIT(A)’s order wherein the assessee having repaid the above loans to the above three parties with appropriate interest. The above addition is liable to be deleted. 22.2. Per contra, the Ld. D.R. appearing for the Revenue supported the order passed by the Lower Authorities. 22.3. We have given our thoughtful consideration and perused the materials available on record. The assessee claimed that the loans were repaid through banking channels with appropriate TDS. Therefore in our considered view, it requires verification from the Assessing Officer on production of bank statements of the three parties concerned. To this extent, this ground no.3 raised by the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 97 assessee, is remitted back to the file of the Assessing Officer for verification and allow the claim in accordance with law. Thus this ground raised by the Assessee is partly allowed. 23. Ground no. 4 namely unexplained commission payment of Rs. 3,10,475/- made u/s. 69C of the Act. The Ld. Counsel submitted that the assessee himself in the statement recorded u/s. 132(4) of the Act, admitted that he made such commission payments in cash and not recorded in the books of accounts. This statement is not retracted by the assessee during the post search enquiry or during assessment and appellate proceedings. Therefore the addition on this account was confirmed. We do not find any infirmity in the order passed by the Lower Authorities. Therefore addition on this account of commission expenses of Rs.3,10,475/- is hereby confirmed. Thus the ground raised by the Assessee is hereby dismissed. 24. Ground nos. 5 & 6 confirming the addition of Rs. 1,37,96,000/- and Rs. 91,70,000/- as unexplained money u/s. 69C and 69A of the Act. 24.1. During the course of search, some Whats App messages from the mobile of the assessee was found based on the above messages, the A.O. added unexplained expenditure u/s. 69C of Rs. 1.37 crores being amount given (betting of Rs. 61,30,000 + financial transaction in cash Rs.76,66,000/-) which was confirmed by the Ld. CIT(A). Similarly on-money receipt of Rs. 91,70,000/- being hawala transaction treated the same as unexplained money u/s. 69A of the Act which is also confirmed by the Ld. CIT(A). I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 98 24.2. The Ld. Counsel submitted that such addition made by the A.O. is merely based on ‘Whatts App’ messages found during the course of search without any corroborative and cogent evidences. Such messages have no financial implication and nothing is coming out of such messages to prove that the assessee has received or paid any unaccounted money. It is further argued that the assessee has no control on third party who was sending on this messages and the A.O. also failed to bring on record that the assessee has replied that any confirmation again such Whatts App messages received by him. Therefore the addition cannot be made based on the Whatts App messages and relied upon Tribunal decision in the case of Atul Tantia Vs. DCIT in ITA No. 492/Kol/2021 wherein it was held as follows: “...6. We, further note that in the WhatsApp messages, it was never stated that the money belonged to the assessee but it was stated to be transactions between the concerns/parties of GPT Group and others. In our considered view the addition cannot be sustained as it based on the SMS or WhatsApp messages without any corroborative evidences. Considering these facts of the case, and the decisions of the Co-ordinate Benches of the ITAT, we are inclined to set aside the order of the ld. CITIA) and direct the Assessing Officer to delete the addition." 24.3. The assessee also further relied upon on same lines of various Tribunal decisions as follows: (i) Ajay Gupta Vs. CIT(A), Meerut and another of Allahabad High Court having ITA No. 357 of 2010. (ii) Smt. Harmohinder Kaur Vs. Dy. CIT, Central Circle - II, Amritsar ITAT having ITA No. 568/Asr/2018. iii) ACIT-1(3)(1) Vs. Shri B.S. Yediyurappa of Bangalore ITAT having ITA No. 14/Bang/2019. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 99 (iv) Pradeep Kumar Sharma Vs. DCIT of Delhi ITAT reported in [2021] 132 taxmann.com 41. (v) ACIT VS. M/s. Layer Exports Pvt. Ltd., of Mumbai Tribunal having ITA Nos. 1097 and 5613/Mum/2013. 24.3. Per contra, the Ld. D.R. submitted that the concurrent findings of the Lower Authorities need not be disturbed and the additions made thereon is to be upheld. 25. We have given our thoughtful consideration and perused the materials available on record. It is admitted position that the above additions were made by the Assessing Officer and confirmed by the Ld. CIT(A) solely on the basis of Whats App messages found during the course of search without any corroborative evidence. It is settled position of law that addition cannot be sustained merely based on documents found during the course of search unless it is related with any corroborative evidences. In the facts of the present case, the additions are made based on the ‘Whats App messages without any corroborative evidence by the Revenue. There is no finding that the Assessing Officer made inquiries with the parties who sent the above messages. Therefore in our considered view, the addition cannot be made without corroborative evidences is liable to be deleted following the ratio of the decisions cited supra. Therefore we are inclined to set aside the order passed by the Lower Authorities and direct the Assessing officer to delete the above addition u/s.69C of Rs. 1,37,96,000/- and u/s. 69A of Rs. 91,70,000/-. Accordingly the grounds raised by the Assessee is hereby partly allowed. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 100 26. Ground no. 7 confirming the addition of Rs. 16,40,000/- as unexplained money u/s. 69A of the Act. This addition was confirmed by the Ld. CIT(A) based on the ‘Whats App’ messages between the assessee and his Accountant Mr. Maulik and Anandbhai Saket. As against the total addition of Rs. 45,24,000/-, the Ld. CIT(A) deleted Rs.28,84,000/- and confirmed the balance of Rs.16,40,000/- against which the assessee is in appeal before us. Before us, however no documentary evidences produced by the assessee relating to the Whats App messages between the parties. In the absence of the same, the addition made by the Ld. CIT(A) does not require any interference. Thus the ground raised by the assessee is dismissed. 27. Ground no. 8 namely addition of Rs.3,91,663/- u/s. 69A of the unaccounted money. This is relating to the receipt of $ 6,000/- by the assessee’s wife, in whose case substantial addition is being made and protective addition made in the hands of the assessee. However the Ld. CIT(A) in the case of the assessee’s wife has deleted the above addition, directed to make addition in the hands of the assessee as substantive addition. Therefore in the assessee case, the Ld. CIT(A) confirmed the above addition since this money in foreign currency is required by the assessee for his personal purposes. Therefore addition is confirmed in the hands of the assessee. No serious arguments are placed before us contraventing the above findings of the Ld CIT[A]. Therefore the addition made in the hands of the assessee as Substantive basis is hereby confirmed and the Ground raised by the assessee is rejected. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 101 28. In the result, the appeal filed by the Assessee in IT[SS]A No.25/Ahd/2021 is partly allowed. 29. IT(SS)A No. 26/Ahd/2021 filed by assessee relating to Asst. Year 2018-19 and the Grounds of Appeal raised by the Assessee reads as under: 1. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs.80,00,000/- on account of unexplained investment under section 69A of the Act. The CIT(A) ought to have allowed the same. 2. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs.2,12,550/- on account of alleged unexplained commission payment under section 69C of the Act, where no such addition is called for. 3. On the facts and in the circumstances of the case, the learned CIT(Appeals) erred in confirming addition of Rs.69,15,339/- pertaining to alleged unexplained jewellery found during the course of search. The Ld. CIT(A) ought to have allowed the same. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 30. Regarding ground no. 1 confirming addition of Rs. 80,00,000/- on account of unexplained investment u/s. 69A of the Act. 30.1. This addition is based on the Whats App messages received by the assessee of Rs.30,00,000/- and Rs.50,00,000/- which is not corroborative with any evidence. This ground is similar to Ground Nos. 5 & 6 raised by the assessee in ITA No. 25/Ahd/2021 wherein we at paragraph 25 of this order we delete the addition made by the Assessing Officer. Similarly the above addition made by the Assessing Officer is hereby deleted. I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 102 31. Ground no. 2 namely addition of Rs.2,12,550/- made on account of alleged unexplained commission payment u/s. 69C of the Act. This issue is decided against the assessee vide our decision in IT[ss]A No.25/Ahd/2021 in Paragraph No.23 on similar commission payment. Following the same, this ground raised by the assessee is hereby dismissed. 32. Ground no. 3 addition of Rs.69,15,339/- pertaining to unexplained jewellery found during the course of search. 32.1. During the course of search jewellery worth Rs.1,31,13,023 was found and the assessee could not explain the source of such investment, therefore AO has made addition of Rs.1,31,13,023 as unexplained investment and added to the income of the assessee. Breakup of jewellery found and seized during search is as under: Particulars Jewellery Found Jewellery seized Gold Jewelery (Net wright in Gms) Diamond studded (crt.) Amount Net weight in gms Amount Gold and diamond jewellery Locker No. 216 in the name of Sunit Choksi & Rina Choksi 2146.720 0.67 61,47,003 841.020 20,53,881 Locker No. 126 in the name of Kanan 572.170 0.83 16,59,530 140.550 4,91,430 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 103 Choksi & Shaili Mehta Locker No. 63 in the name of Kanan Choksi and Shaili Mehta 808.000 16.18 28,36,366 292.710 14,18,258 From residence of appellant: 20,07,216 - - Total (A) 3663.24 42.41 1,27,40,121 1274.28 39,93,569 Silver Utensils Locker No. 216 in the name of Sunit Choksi &Rina Choksi 77,152 Locker No. 126 in the name of Kanan choksi and Shaili Mehta 2,95,750 Total (B) 3,72,902 Grand Total (A + B) 3663.24 42.41 1,31,13,023 1274.28 39,93,569 32.2. The assessee submitted vide letter dated 27th December, 2019 detailed explanation of jewellery made before the Assessing Officer and referred to the extract of the said letter as reproduced by the Ld. CIT(A) in his order. The Ld AR brought to our notice that the jewellery was recorded in books of accounts and that the I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 104 balance jewellery was covered by CBDT instruction no 1916. However, Ld AO has not accepted explanation of the assessee and held that instruction referred is applicable only to seizure of jewellery and such instruction nowhere states that assessee is not required to explain sources of such jewellery. The Ld. AO further held that as the assessee has not explained sources of such investments, entire jewellery found during search was added as unexplained investment. 32.3. Before the Ld CIT(A), the assessee submitted an alternative plea that, Locker no 126 and 63 are in the name of appellant's mother and married sister who are assessed to income tax separately, gold jewellery and silver articles found during search from these lockers should not be subject matter of addition in assessee's case. However, at para 8.5, the Ld CIT(A) dismissed this contention for the reason that assessee failed to prove that jewellery found from such lockers are already reflected in their Returns of Income and owned by them only. 32.4. The Ld. Counsel of the assessee has alternatively argued that gold Jewellery of 1469.158 gms. have duly been recorded in the books of accounts of the assessee. It was contended that during the course of assessment proceedings, copies of bills along with copies of bank statements were already filed before the AO vide letter dated 27/12/2019 and as the AO has not found any discrepancies, Gold Jewellery to that extent should not be considered as unexplained in the hands of the assessee. Further, relying co- ordinate Bench decision of Jaipur ITAT in the case of Ram Prakash I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 105 Mahawar reported in 115 taxmann.com 241, the assessee further argued that, apart from jewellery recorded in books of accounts, the assessee is additionally entitled for credit of CBDT Instruction No.1916, and explained jewellery details as follows: Sr. No. Name Family Relationship As per instruction no. 1916 (in gms) 1 Sunit Choksi Assessee 100.00 2 Rina Chokshi Assessee’s wife 500.00 3 Rhea Chokshi Assessee’s Daughter 500.00 4 Karan Sudhir Chokshi Assessee’s Mother 500.00 5 Shaili Anuj Chokshi Assessee’s Sister 500.00 Total 1,850.00 32.5. Ld. Counsel has also submitted that, balance gold jewellery of 244.082 (3663.24 found during search less 1469.158 recorded in books of accounts less 1850 to be consider as explained as per CBDT instruction no 1916 less 100 gm Bullion), is "STREE DHAN" and looking to customary practice, marriage life of more than 25 years, such jewellery needs to be treated as explained. Further, the Ld. Counsel also submitted that, while allowing credit as per instruction no 1916, credit need to be given for diamond studded on such gold jewellery relying upon decision of Delhi Tribunal in the case of Kumkum Kanodia v DCIT vide ITA No 5260/Del/2014. 33. Per contra Ld CIT DR relied upon the order passed by the lower authorities and pleaded to sustain the addition. 34. We have heard both the parties as well as perused the orders passed by lower authorities. First we deal with the issue of whether assessee is eligible for the benefit of CBDT instruction no 1916 I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 106 additionally over and above the jewellery already recorded in books of accounts. For this, Ld AR before us, relied upon direct decision of Hon'ble Jaipur ITAT in the case of Ram Prakash Mahawar Reported in 115 taxmann.com 241, relevant para is reproduce as under: "Section 69A of the Income-tax Act, 1961 Unexplained moneys (Jewellery) - Assessment year 2016-17 - During course of search and seizure, gold and silver jewelleries were found from assessee's residential premises In assessment proceedings, assessee c 1916, dated 11-5-1994 to extent of 850 Named benefit of CBDT Instruction No. gms of Jewellery in hands of his wife, daughter and himself In excess of said amount, he also claimed benefit of gold Jewellery of 343.328 gms that were purchased and recorded in books of account Relevant purchase bills were also found during search Whether CBDT Instruction No. 1916 allows specific quantity of Jewellery received by various family members on occassion of marriages and other social and customary occasions which assessee is not required to explain Held, yes - Whether since Jewellery over and above weight allowed in CBD instruction was explained by proof of documents of acquisition and same was declared/recorded in books of account of assessee, same has to be allowed separately as sexplained Jewellery Held, yes "Paras 2.6 and 2.6.2+ Partly in favour of assessee.” 34.1. We find that Hon'ble JAIPUR ITAT took the view that, apart from recorded jewellery in books of accounts, the benefit of CBDT instruction shall be allowed to the assessee. Ld. DR failed to bring on record any contrary decision. Respectfully following the ratio of Hon'ble Jaipur ITAT the assessee is entitled to the benefit as allowed by CBDT circular No. 1916. Accordingly the Assessing officer is directed to give relief to this extent. 35. Now coming to next controversy involved in this ground is whether the diamond studded in the Gold jewellery is to be I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 107 excluded or not diamond value is to be separately added. For this proposition the Ld. Counsel has relied on the decision of Hon'ble Delhi ITAT in the case of Kumkum Kanodia v DCIT vide ITA No 5260/Del/2014, relevant portion of held is reproduce as under "It is the submission of the ld. counsel for the assessee that Jewellery includes ornaments made of gold, silver, platinum or any other precious metals or any alloy containing one or more precious metals, whether or not containing any precious or semi-precious stones. We find merit in the above arguments of the ld. counsel for the assessee. In our opinion, merely because the Jewellery is studded with the diamond of 47.18 carat in the instant case, the same cannot be added in the hands of the assessee when such Jewellery formed part of the gross weight of the Jewellery found from the premises of the assessee which is within the permissible limits prescribed as per CBDT Instruction No.1916 dated 11th April, 1994. The decision of the Mumbai Bench of the Tribunal relied on by the ld. counsel for the assessee supports his case wherein the Tribunal, after considering the CBDT Instruction dated 11th April, 1994, has deleted the addition on account of gold and diamond Jewellery. Since the addition has been deleted by the CIT(A) and the Revenue is not in appeal before the Tribunal, therefore, considering the totality of the facts of the case, we are of the considered opinion that the ld.CIT(A) is not justified in sustaining the addition to the tune of Rs. 4,24,773/- on account of unexplained diamond Jewellery of 47.18 carat treating the same as not covered by the CBDT Instruction No. 1916 dated 11th April, 1994. We, therefore, set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition. The grounds raised by the assessee are, accordingly, allowed." 35.1. Respectfully following the above ratio laid down in the above decision we hereby direct the Ld. Assessing Officer to delete addition of diamond studded jewellery. 36. It is also noted that the Ld. Counsel of the assessee has argued that the silver utensils found and seized during the course of assessment proceedings were found in the locker of the sister and I.T.(SS)A No. 37 to 43/Ahd/2021 A.Ys. 2012-13 to 2018-19 Page No DCIT Vs. Shri Sunit Sudhirbhai Chokshi 108 mother of the assessee. However no evidences to this extent was placed in the paper book. In light of this fact, we hereby direct the Ld. AO to verify whether the utensils were found and seized from the locker of mother and sister of the assessee and assess the same in accordance with law. 37. In the result, the appeal filed by the Assessee in IT[SS]A No.26/Ahd/2021 is partly allowed. 38. In total the appeals filed by the Revenue and the assessee are partly allowed. Order pronounced in the open court on 08-08-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 08/08/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद