BRC Construction Company Pvt. Ltd., Kolkata V. DCIT, CC-2(3), Kolkata, Kolkata

ITSSA 60/KOL/2022

AI Insights

The case involves multiple appeals by different companies and individuals against the orders of the CIT(A) which upheld the additions made by the AO under sections 143(3) and 153A of the Income Tax Act, 1961. The additions were primarily based on the AO's findings from the audited balance sheets and books of accounts, which were not considered as incriminating material. The Tribunal examined whether the AO had the jurisdiction to make these additions in the absence of incriminating material during an unabated assessment year at the time of search. The Tribunal's decision was influenced by various judicial precedents that restrict the AO's powers in such scenarios.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302893 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-05-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 21-08-2022
• Other Referred Cases: CIT V. Kabul Chawla 380 ITR 573, CIT V. Continental Warehousing Corpn. Ltd. 374 ITR 645, CIT vs. Gurinder Singh Bawa (2017) 79 taxmann.com 398 (Bombay), CIT vs. Deepak Kumar Agarwal (2017) 86 taxmann.com 3 (Bombay), CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 58 taxmann.com 78 (Bombay), PCIT-Vs.- Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Transactions in derivatives; Corroborative evidences; Accommodation entries; Documents seized; TDS; Set aside
• Section: 143(3); 133A; 153A; 143(2)

Judgement Text

IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Rajesh Kumar,Accountant Member I.T.(SS)A. Nos. 16& 17/KOL/2022 Assessment Years: 2012-2013& 2015-2016 Square Four Assets Management And Reconstruction Company Pvt. Limited,........Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AAFCA5966P] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 19/KOL/2022 Assessment Year: 2011-2012 G.S. Global Projects Pvt. Limited,................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AABCG7279H] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 2 -AND- I.T.(SS)A. No. 32/KOL/2022 Assessment Year: 2011-2012 Anita Singhania,.......................................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:ADAPA6445Q] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 38/KOL/2022 Assessment Year: 2013-14 G.S. Global Projects Pvt. Limited,................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AABCG7279H] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. Nos. 39 & 41/KOL/2022 Assessment Years: 2011-2012 & 2014-2015 Square Four Housing & Infrastructure Development Pvt. Limited,.........................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AABCO4154H] IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 3 -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 43/KOL/2022 Assessment Year: 2012-2013 Macro Network Pvt. Limited.....................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AADCM1415D] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 50/KOL/2022 Assessment Year: 2011-2012 Srijan Tie Up Pvt. Limited,......................Appellant 238A, A.J.C. Bose Road, Flat No. 2B, 2 nd Floor, Kolkata-700020 [PAN:AAMCS2678H] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 4 I.T.(SS)A. No. 51/KOL/2022 Assessment Year: 2013-2014 Square Four Assets Management And Reconstruction Company Pvt. Limited,........Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AAFCA5966P] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 52/KOL/2022 Assessment Year: 2014-2015 Asstt. Commissioner of Income Tax,..........Appellant Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, Kolkata-700107 -Vs.- M/s. Mechano Paper Machines Limited,.....Respondent 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AACCM0602M] -AND- I.T.(SS)A. Nos. 60 & 61/KOL/2022 Assessment Years: 2011-2012 & 2012-2013 BRC Construction Company Pvt. Limited,.....Appellant 238A, A.J.C. Bose Road, 2 nd Floor, Suite-2B, Kolkata-700020 [PAN:AACCB1091P] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 5 Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 62/KOL/2022 Assessment Year: 2011-2012 Square Four Assets Management And Reconstruction Company Pvt. Limited,........Appellant 238A, A.J.C. Bose Road, 2 nd Floor, Kolkata-700020 [PAN:AAFCA5966P] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. No. 63/KOL/2022 Assessment Year: 2011-2012 Macro Network Pvt. Limited.....................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AADCM1415D] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 -AND- I.T.(SS)A. Nos. 101 to 105/KOL/2022 Assessment Years: 2011-2012, 12-13, 13-14, 14-15, 2015-2016 IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 6 Ganesh Kumar Singhania,........................Appellant 238A, A.J.C. Bose Road, Kolkata-700020 [PAN:AKTPS7277C] -Vs.- Deputy Commissioner of Income Tax,........Respondent Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, Room No. 403, 4 th Floor, 110, Shantipally, Kolkata-700107 Appearances by: Shri Miraj D. Shah, A.R., appeared on behalf of the assessees Shri Abhijit Kundu &Sudipta Guha, CIT (DR), appeared on behalf of the Revenue Date of concluding the hearing : May 19, 2023 Date of pronouncing the order : May 24, 2023 O R D E R Per Bench:- These appeals by the assessee are directed against the orders of ld. CIT(Appeals) on legal issues as well as on merits. Since common issues are involved in all these appeal, these are being decided and disposed off together for the sake of brevity and convenience. The IT(SS)A No. 16/KOL/2022 for A.Y. 2012-13 is taken as lead case and common legal and jurisdictional issue raised by the assessee is that the ld. AO has no authority and IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 7 jurisdiction under the Income Tax Act, 1961 to make addition in an unabated assessment in absence of any incriminating documents found and seized during the course of search”. 2. The facts in brief are that the assessee filed its return of income electronically on 01.09.2012 declaring total income at ‘NIL’. The case was processed under section 143(1) of the Act accepting returned income on 21.02.2013. A search and seizure operation under section 132(1) of the Act as well as survey under section 133A of the Act were conducted on 03.02.2017 and subsequent dates, in the office premises of “Square Four Group of Companies” at 238A, A.J.C. Bose Road, 2 nd Floor, Suit No. 2B, Flat No. 2D, Kolkata-700020 as well as at the residential address of the Directors and key persons connected with this group. Shri Ganesh Kumar Singhania is the key person of the group. According to the Investigation Wing, Shri Ganesh Kumar Singhania is managing the affairs of 50 companies. During the course of search on the residential premises of Shri Ganesh Kumar Singhania, Smt. Anita Singhania and Shri Arun Kumar Singh, cash, valuables and voluminous documents were found and seized. Consequently notice under section 153A of the Act was issued to the assessee on 10.07.2018, which was complied by filing a letter dated 19.07.2018 IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 8 objecting to issuance of notice under section 153A of the Act. The assessee also complied with the notice by filing a return of income on 17.07.2018 declaring ‘nil’ income. Thereafter, statutory notices under section 143(2) and 142(1) of the Act were issued and duly served upon the assessee. The ld. Assessing Officer on perusal of the balance-sheet, details of unsecured loans taken and bank statements filed during the course of search assessment proceedings observed that the assessee has taken Rs.70,00,000/- from two entities, namely Sunghandha Nirman Pvt. Limited and Sagar Vinimay Pvt. Limited during financial year 2011-12. It was also noted that the loan was squared off during the same F.Y. in the case of Sagar Vinimay Pvt. Limited. It was also observed by the ld AO that interest of Rs.3,65,499/- excluding TDS was paid to Superior Vanijya Pvt. Limited on the unsecured loan. The ld. Assessing Officer made the addition of Rs.70,00,000/- on the ground that the loans taken from two entities were bogus loans and were in the nature of accommodation entries and accordingly added the same to the income of the assessee in the assessment framed under section 143(3) read with section 153A of the Act dated 31.12.2018.Similarly the ld AO also made additions of Rs. 35,000/- on account of commission for arranging these accommodation entries, 3,65,499/- towards bogus interest expenses, 38,11,401/-bogus commodity profits IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 9 and Rs. 3,811/- brokerage charges for commodity profits on the basis of books of accounts of the assessee. It is pertinent to mention that this being an unabated assessment on the date of search as the it has attained finality on that date and no proceedings were pending on the date of search. 3. The assessee challenged the order of ld. Assessing Officer before the ld. CIT(Appeals) on the legal issue that no addition can be made in absence of any incriminating seized material found during the course of search in an unabated assessment year. However, the appeal of the assessee was dismissed by the ld. CIT(Appeals). The finding of the ld. CIT(Appeals) in para 5.2 reads as under:- “5.2. I have carefully consideredthe facts of the case and submission of the appellant. Contrary to the claim of the appellant, addition has been made on the basis of incriminating materials found during search and during post search enquiries. These were further corroborated through independent enquiry from the commodity exchange. Statements of entry operators were recorded and acted upon before arriving at a conclusion. Action u/s.132(1) had started on 03.02.2017. It appears that the action u/s.132(1) was concluded on 02.03.2017 when P.O. u/s. 132(3) was operated at assessee’s premises. In between the leads gathered from search was acted upon. On 10.02.2017, a survey was conducted u/s.133A of the Act on the concerns operated by Mr. Sujit Kumar, who is the key person in providing accommodation entries to the Group. During the course of survey, several incriminating documents were impounded which pointed out the collusion between Mr. Sujit Kumar and Shri Ganesh Kumar Singhania, key person of Square Four Group. Impounded documents included print outs of the e- mails sent by the key persons of Square Four Group which IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 10 clearly showed that the Group was requesting for arranging bogus commodity profit. When confronted with these evidences, Mr. Sujit Kumar accepted his role in arranging bogus commodity profit by accepting unaccounted cash. He further admitted that the commodity transactions resulting in profit were not reflected on any commodity stock exchange. The Investigation Wing followed up the lead by recording the statements of some of the dummy directors of the shell companies through which Mr. Sujit Kumar had arranged bogus profits. These dummy directors confirmed that their companies were used for providing entries on the instructions of Mr. Sujit Kumar. These leads were followed up and during assessment proceedings the AO had sought information from National Multi Commodity Exchange (NMCE), Ahemdabad which confirmed that the assessee was not registered as a client under any of its members. It had also provided other relevant information against shell companies, which were involved in providing bogus commodity profit. Based on these evidences, commodity trading profit shown by the assessee was held not genuine as it was arranged through entry operators by providing cash. In view of the facts discussed above, it is apparent that additions have been made on the basis of incriminating material gathered during search & seizure action. As mentioned above, search started on 03.02.2017, and appears to have been concluded on 02.03.2017. In the meantime, the Investigation Wing had been following on the lead gathered on the initial date of search and through diligent enquiry it has been able to gather the incriminating material in this case, survey at the business premises of Mr. Sujit Kumar has been conducted as part of lead gathered during search. The impounded documents clearly establish that assessee had arranged bogus commodity profits in lieu of its unaccounted cash. Statement of Mr. Sujit Kumar is corroborated by the evidences gathered in the form of impounded materials and enquiries made from commodity exchange. Statement of the dummy director of the shell company used to provide entry also corroborates the evidences gathered during search/ survey. In view of the facts narrated above it is apparent that the facts of assessee’s case are different from the case laws on which it has placed its reliance. In appellant's case additions have been made on the basis of incriminating material gathered during the course of search and related enquiries. It is not merely based on the statements of third IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 11 parties but corroborative evidences in the form of print outs of e-mails and other documents have also been found and impounded. During assessment proceedings, AO has further made enquiry from the NMCE and established that no genuine transaction has taken place through the commodity exchange. All these facts were brought to the notice of the assessee and it was asked to give its explanation. It is apparent that addition has been made on the basis of incriminating material gathered during search and the related enquiries. Entire modus operandi of routing its unaccounted cash has been unearthed due to search. Therefore, case laws cited by the appellant are not relevant for its case, as incriminating evidences have been gathered during search-survey proceedings and additions/adjustments are based on these evidences. Hence, AO is justified in making additions u/s 153A read with section 143(3) and the additions made are sustained. Hence, these grounds are dismissed”. 4. The ld. A.R. submitted that the search was conducted on 03.02.2017 whereas instant assessment year involved is 2012-13 and, therefore, the assessment is non-abated assessment on the date of search as there were no proceedings pending for on that date and also the time limit as contemplated u/s 143(2) for issue of notice has already expired. The ld AR submitted by referring to various materials seized by the search team that there is no incriminating material qua the unsecured loans raised from two parties and whatever is gathered by the search team was from the audited balance sheets and books of accounts of the assessee. The ld. A.R. contended that the same was position with regard to other additions. The ld. A.R. therefore vehemently argued that the AO has no jurisdiction to make the additions in the IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 12 impugned assessment year as there was no incriminating material found and seized during the search operation. The ld. A.R. while to the assessment order framed by the AO contended that the AO has not referred to any such materials and, therefore, the additions made in respect of unsecured loans from two parties and other items are without valid jurisdiction. The ld. A.R. argued that the AO has no valid jurisdiction to make such additions. The ld AR also elaborated the provisions of section 153A of the Act by submitting that the section is a complete code in itself so far as the search assessments are concerned. The ld. A.R. submitted that in search case, the assessment can be reopened for six assessment years preceding the date of search. The ld. A.R. dichotomised these assessments into two parts. One is unabated on the date of search and second abated assessments. In the case of unabated assessments, which have attained finality on the date of search, the ld. counsel argued that addition has to be based and backed by incriminating search materials which was seized during the search operation as the provisions of section 153A of the Act as propounded by the judicial pronouncements limit the authority of the assessing officer on the grounds that the assessment which had attained finality and as such cannot be disturbed. Whereas the ld. counsel argued that in case of abated assessments the jurisdiction of the A.O. IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 13 is para materia with normal scrutiny proceedings. The counsel argued that in case of abated assessments the AO has the powers to make additions even in respect of those issues qua, which there is no incriminating seized materials but the AO comes across the materials/evidences during the assessment proceedings. The ld. AR submitted that the AO has only on the basis of audited annual accounts and books of accounts of the assessee made additions/disallowances. The Ld. A.R submitted that since this is an unabated assessment on the date of search in terms of provisions of Section 153A of the Act, therefore in order to make additions to the income of the assesse, the basis could be made only the seized incriminating material during the course search. The ld. A.R. contended that since in the present case, there is no incriminating material seized during the course of search, therefore, the AO has no jurisdiction to make the additions in the assessment framed u/s 153A read with Section 143(3) of the Act. In defence of its argument, the Ld. Counsel for the assessee relied on the following decisions: 1. CIT V. Kabul Chawla 380 ITR 573; 2. CIT V. Continental Warehousing Corpn. Ltd. 374 ITR 645; 3.CIT vs. Gurinder Singh Bawa (2017) 79 taxmann.com 398 (Bombay); 4.CIT vs. Deepak Kumar Agarwal (2017) 86 taxmann.com 3 (Bombay); IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 14 5. CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 58 taxmann.com 78 (Bombay). The ld counsel also submitted that now the controversy as to the said issue has been set at rest by the decision of the Hon’ble Apex Court in the case of PCIT-Vs.- Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399). The Ld. A.R. therefore prayed that since the additions made by the AO were not based on the incriminating material, therefore the order of Ld. CIT(A) upholding the jurisdiction of AO to make additions is erroneous and is against the provisions of the Act and also against the ratio laid down in the above decisions. The Ld. A.R therefore prayed that the appeal of the assessee may kindly be allowed by setting aside the order of Ld. CIT(A) on this issue. 5. The ld. D.R., on the other hand, relied heavily on the orders of ld. Assessing Officer and ld. CIT(Appeals) by submitting that the incriminating seized material was in the form of independent inquiries and statement of third parties. The ld. D.R. submitted that the action under section 132(1) of the Act was concluded on 02.03.2017 when P.O. under section 132(3) was operated at the assessee’s premises and which appears to have concluded on 02.03.2017. In between the leads gathered from search was acted upon. On 10.02.2017, a survey was conducted under section 133A of the Act on the concerns operated by IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 15 Shri Sujit Kumar, who was the key person in providing accommodation entries to the group. Besides, during the course of survey, several incriminating documents were impounded, which pointed to the collusion between Mr. Sujit Kumar and Shri Ganesh Kumar Singhania, key person of Square Four Group. While relying heavily on the orders of authorities below on this issue, the ld DR submitted that the AO’s power cannot be restricted to making addition on the basis of seized incriminating documents during the search otherwise the provisions of related to search would be rendered as otiose and redundant. The Ld. D.R submitted that it is not the case that nothing was found during the course of search. The Ld. D.R prayed that the assessment framed on the basis of books of accounts and discrepancies found there were on the basis of information furnished by the assessee and therefore the plea of the assessee’s Counsel that there was no incriminating material is wrong and deserved to be rejected. The Ld. D.R while referring to the decisions relied by the assessee’s counsel submitted that the Ld. CIT(A) has rightly dismissed the issue by referring the certain decisions which were in favour of revenue wherein it has been held that in case of search the addition can be made even without any seized incriminating search materials and therefore the ground taken by the assessee may kindly be dismissed. The ld. D.R. submitted that the ld.CIT(Appeals) has rightly rejected and dismissed the legal issue raised by the assessee qua lack of jurisdiction in absence of any incriminating material IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 16 seized during the course of search, whereas there was sufficient seized incriminating material impounded in the form of inquiries that the Group was arranging bogus commodity profits. The ld. D.R. also submitted that it was a case of organized racket carried on by the assessee and, therefore, the plea of the assessee that there was no incriminating material seized during the course of search is bereft of truth and may kindly be dismissed. 7. After hearing the rival contentions and perusing the material on record, we observe that a search action was conducted on the assessee on 3.2.2017 u/s 132(1) of the Act on the business and residential premises of Padam Kumar Jain and group companies. On the date of search undisputedly the assessment has attained finality in terms of provision of Section 153A of the Act. We further find that the AO made addition on the basis of the information gathered from the annual audited accounts and books of accounts of the assessee qua the unsecured loans and other various items taken from two companies. Thus we note that the additions were not based upon the incriminating seized material during the search but on the basis information in the audited accounts and books of accounts which in our opinion does not constitute incriminating material in any manner whatsoever. In our considered opinion, any addition in unabated assessment year on the date of search can only be made on the IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 17 basis of incriminating material seized during the course of search and not otherwise. The case of the assessee finds support from several decisions referred to by the Ld. Counsel namely CIT V. Kabul Chawla (supra),CIT vs. Gurinder Singh Bawa (supra), CIT vs. Deepak Kumar Agarwal (supra) and CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra). Above all the issue has been finally decided by the Hon’ble Supreme Court in the case of PCIT Vs Abhisar Buildwell Pvt. Ltd (Supra) affirming the view that in an unabated assessment year addition can be made only on the basis of seized incriminating materials and not otherwise. Since in the instant case, there is no incriminating materials/documents seized during the search and the additions were made on the basis of books of account of the assessee, therefore, we are inclined to set aside the order of Ld. CIT(A) on this issue by holding that the additions made by the A.O. are without valid jurisdiction. The appeal of the assessee is allowed. IT(SS)A Nos 17 to 19,32,38,39,41,43,50,51,60 to 62 & 101 to 105/Kol/2022 8. Issue raised in these appeals by the assessee is against the jurisdiction of the AO to make addition in the assessment framed u/s 153A read with Section 143(3) of the Act in the unabated years in absence of any incriminating seized material which has been decided by us in favour of assessee by setting aside the order of Ld. CIT(A) and allowing the appeal of the assessee in IT(SS)A No. 16/RAN/2020 A.Y. 2009-10 (supra) and therefore our IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 18 findings in IT(SS) A No. 16/RAN/2020 A.Y. 2009-10 (supra) would, mutatis mutandis, apply to these appeals as well. Consequently all these appeals of the assessee are allowed. I.T.(SS)A. No. 52/KOL/2022 9. The Revenue has also assailed the order of Ld. CIT(A) by filing this appeal challenging the deleting of additions on merit as well on legal issue of no incriminating materials found during search, since we have allowed the appeal of the assessee on legal issue (supra) by holding that AO has no jurisdiction to make addition in an unabated assessment in absence of incriminating searched materials. Our decision in the above appeals would apply to this appeal as well and accordingly the appeal of the Revenue is dismissed. 10. In the result, all the appeals of the assessee are allowed and the appeal of the revenue is dismissed. Order pronounced in the Open Court on 24 th May, 2023. Sd/- Sd/- (Rajpal Yadav) (Rajesh Kumar) Vice-President(KZ) Accountant Member Kolkata, 24 th day of May, 2023 Copies to :(1) Square Four Assets Management And Reconstruction Company Pvt. Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (2) G.S. Global Projects Pvt. Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (3) Anita Singhania, IT(SS)A Nos. 16 & 17/KOL/2022, 19/KOL/2022. 32/KOL/2022, 38/KOL/2022, 39, 41/KOL/2022, 43/KOL/2022, 50/KOL/2022, 51/KOL/2022, 52/KOL/2022, 60, 61/KOL/2022, 62/KOL/2022, 63/KOL/2022, 101 to 105/KOL/2022 19 238A, A.J.C. Bose Road, Kolkata-700020 (4) Macro Network Pvt. Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (5) Srijan Tie Up Pvt. Limited, 238A, A.J.C. Bose Road, Flat No. 2B, 2 nd Floor, Kolkata-700020 (6) M/s. Mechano Paper Machines Limited, 238A, A.J.C. Bose Road, Kolkata-700020 (7) BRC Construction Company Pvt. Limited, 238A, A.J.C. Bose Road, 2 nd Floor, Suite-2B, Kolkata-700020 (8) Ganesh Kumar Singhania, 238A, A.J.C. Bose Road, Kolkata-700020 (9) Deputy Commissioner of Income Tax, Central Circle-2(3), Kolkata, Aayakar Bhawan Poorva, 110, Shantipally, Kolkata-700107 (10) Commissioner of Income Tax (Appeals)-, Kolkata; (11) Commissioner of Income Tax-; (12) The Departmental Representative (13) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.