Appeal Details
Counselvise Citation
[2024] 101 COUNSELVISE.COM (IT) 5575 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 10 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-07-2024
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
A
Next Hearing Date
21-05-2024
Assessment Year
2014-2015
Appeal Filed On
20-09-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER IT(SS)A Nos.75 to 78/PUN/2022 Assessment Years : 2013-14 to 2016-17 Modi Builders 1022, Shukrawar Peth, Pramukh Park Apartments, Pune – 411002 Vs. ACIT, Central Circle – 1(2), Pune PAN : AAIFM7044C (Appellant) (Respondent) Assessee by : Shri Kishor B Phadke Department by : S/Shri Keyur Patel, CIT-DR & Ramnath P Murkunde Date of hearing : 22-05-2024 Date of pronouncement : 26-07-2024 O R D E R PER R. K. PANDA, VP : The above batch of 4 appeals filed by the assessee are directed against the common order dated 30.06.2022 of the Ld. CIT(A), Pune-11, relating to assessment years 2013-14 to 2016-17, respectively. Since common issues are involved in these appeals, therefore, for the sake of convenience, these appeals were heard together and are being disposed of by this common order. 2. The assessee in IT(SS)A No.75/PUN/2022 for assessment year 2013-14 has raised the following grounds: 1.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 1,90,71,302 [i.e. Total addition by AO of Rs. 2,10,51,203 – Relief granted by 2 IT(SS)A Nos.75 to 78/PUN/2022 learned CIT(A) of Rs. 19,80,000]without appreciating all facts of the case in proper perspective. 2.Learned CIT(A) erred in confirming addition of Rs. 1,90,71,302 simply on the basis of cash receipt entries appearing in DIARY & other documents found in the course of search despite the fact that,there was no corroborating recordfound in search revealing any undisclosed income. 3.Learned CIT(A) erred on facts in confirming addition of Rs. 1,90,71,302 without appreciating that, firstly, no any unaccounted cash was found during the course of search and secondly, no any unexplained assets / investments were found during the course of search. Appellant contends that, various land investments of Appellant are continuing in the same status-quo as they were prior to AY 20212- 13. 4.Learned CIT(A) erred on facts in confirming the addition of Rs. 1,90,71,302 mad by learned AO by assuming that, DIARY and other documents found in search indicate parallel set of accounts unrelated to regular books of account. The I-T authorities ought to have appreciated that, many entries in these seized DIARY and other documents were later on recorded in regular books of account calling for appropriate adjustment. 5.Learned CIT(A) erred on facts in confirming the additions of Rs. 1,90,71,302 despite the fact that, Appellant has explained all credit entries in DIARY and other documents found seized course of search. 6.Learned I-T authorities erred on facts in not deciding any reasonable threshold of house-hold expenses considering family size of Appellant‟s stake-holders. Appellant contends that, after reduction of a fair estimate of house-hold and personal expenses, excess cash balance will transpire which will be available for telescoping of DIARY credit entries and other incriminating material seized during search. 7.Appellant contends that credit entries relating to cash receipt from M/s CHOCOLATE RETAIL PVT LTD were simply current account transactions arising out of safe custody& other support pursuits. Additions w.r.t. such cash receipt entries appearing in the DIARY & other material ought to be deleted. 8.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 1,90,71,302 without granting telescoping benefits of – a) introduction of cash withdrawn by partners earlier for house-hold purpose b) introduction of cash withdrawn earlier and shown in name of partners c) receipt of cash paid earlier to relatives / associates of partners/ stake-holders, etc. d) release of cash balance from cash payments recorded in regular books e) alleged irregular payment entries relating interest on loans 9.Learned I-T authorities erred in law and on facts in thus, assessing unreal and unearned income in the hands of Appellant. Learned I-T authorities glossed over 3 IT(SS)A Nos.75 to 78/PUN/2022 human tendencies and natural probabilities considering which, addition of Rs. 1,90,71,302 appears uncalled for / excessive / unreasonable and illogical. 10.Learned CIT(A) erred on facts in dealing with specific credit entries totaling to Rs. 71,95,775 (13 line items)though, the addition made by learned AO was amounting to Rs. 2,10,51,302 (about 100 line items). Appellant contends that, all amounts involved in the overall amount of Rs. 2,10,51,302 ought to have been dealt with one-by-one during the Appellate proceedings. 11.Appellant contends that, addition of undisclosed income with respect to unrecorded cash receipts entries emanating from DIARY and other material seized during search, ought to have been restricted to appropriate Gross Profit Percentage (G.P.%) instead of 100% addition as so done at present. 12.Appellant contents that, project lands related cash payments (unrecorded in regular books of account) ought to be allowed for capitalization with suitable enhancements in carrying WIP value of such project lands. 3. The assessee in IT(SS)A No.76/PUN/2022 for assessment year 2014-15 has raised the following grounds: Issue-1-Alleged Unrecorded Cash Receipts 1.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 70,27,617 [i.e. Total addition by AO of Rs. 1,02,65,514 – Relief granted by learned CIT(A) of Rs.32,37,897] without appreciating all facts of the case in proper perspective. 2.Learned CIT(A) erred in confirming addition of Rs. 70,27,617 simply on the basis of cash receipt entries appearing in DIARY & other documents found in the course of search despite the fact that, there was no corroborating record found in search revealing any undisclosed income. 3.Learned CIT(A) erred on facts in confirming addition of Rs. 70,27,617 without appreciating that, firstly, no any unaccounted cash was found during the course of search and secondly, no any unexplained assets / investments were found during the course of search. Appellant contends that, various land investments of Appellant are continuing in the same status-quo as they were prior to AY 20212- 13. 4.Learned CIT(A) erred on facts in confirming the addition of Rs. 70,27,617 mad by learned AO by assuming that, DIARY and other documents found in search indicate parallel set of accounts unrelated to regular books of account. The I-T authorities ought to have appreciated that, many entries in these seized DIARY and other documents were later on recorded in regular books of account calling for appropriate adjustment. 4 IT(SS)A Nos.75 to 78/PUN/2022 5.Learned CIT(A) erred on facts in confirming the additions of Rs. 70,27,617 despite the fact that, Appellant has explained all credit entries in DIARY and other documents found seized course of search. 6.Learned I-T authorities erred on facts in not deciding any reasonable threshold of house-hold expenses considering family size of Appellant‟s stake-holders. Appellant contends that, after reduction of a fair estimate of house-hold and personal expenses, excess cash balance will transpire which will be available for telescoping of DIARY credit entries and other incriminating material seized during search. 7.Appellant contends that credit entries relating to cash receipt from M/s CHOCOLATE RETAIL PVT LTD were simply current account transactions arising out of safe custody& other support pursuits. Additions w.r.t. such cash receipt entries appearing in the DIARY & other material ought to be deleted in totality. 8.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 70,27,617 without granting telescoping benefits of – a) introduction of cash withdrawn by partners earlier for house-hold purpose b) introduction of cash withdrawn earlier and shown in name of partners c) receipt of cash paid earlier to relatives / associates of partners / stake-holders, etc. d) release of cash balance from cash payments recorded in regular books e) alleged irregular payment entries relating interest on loans 9.Learned I-T authorities erred in law and on facts in thus, assessing unreal and unearned income in the hands of Appellant. Learned I-T authorities glossed over human tendencies and natural probabilities considering which, addition of Rs. 70,27,617 appears uncalled for / excessive / unreasonable and illogical. 10.Learned CIT(A) erred on facts in dealing with specific credit entries totaling to Rs. 57,45,400 (15 line items) though, the addition made by learned AO was amounting to Rs. 1,02,65,514 (about 155 line items). Appellant contends that, all amounts involved in the overall amount of Rs. 1,02,65,514 ought to have been dealt with one-by-one during the Appellate proceedings. 11.Appellant contends that, addition of undisclosed income with respect to unrecorded cash receipts entries emanating from DIARY and other material seized during search, ought to have been restricted to appropriate Gross Profit Percentage (G.P.%) instead of 100% addition as so done at present. 12.Appellant contents that, project lands related cash payments (unrecorded in regular books of account) ought to be allowed for capitalization with suitable enhancements in carrying WIP value of such project lands. Issue-2-Alleged Cash loan to Mr. Jalan 5 IT(SS)A Nos.75 to 78/PUN/2022 13.Learned I-T authorities erred on facts in making addition of Rs. 1,25,00,000 to Appellant‟s income, holding that, Appellant has made a cash-loan to Mr. Jalan without appreciating that, no any corroborating entry was found in DIARY of Appellant or any other accounting papers seized during search. 4. The assessee in IT(SS)A No.77/PUN/2022 for assessment year 2015-16 has raised the following grounds: Issue-1-Alleged Unrecorded Cash Receipts 1.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 1,53,53,415 [i.e. Total addition by AO of Rs. 1,89,45,518 – Relief granted by learned CIT(A) of Rs.35,92,103] without appreciating all facts of the case in proper perspective. 2.Learned CIT(A) erred in confirming addition of Rs. 1,53,53,415 simply on the basis of cash receipt entries appearing in DIARY & other documents found in the course of search despite the fact that, there was no corroborating recordfound in search revealing any undisclosed income. 3.Learned CIT(A) erred on facts in confirming addition of Rs. 1,53,53,415 without appreciating that, firstly, no any unaccounted cash was found during the course of search and secondly, no any unexplained assets / investments were found during the course of search. Appellant contends that, various land investments of Appellant are continuing in the same status-quo as they were prior to AY 20212- 13. 4.Learned CIT(A) erred on facts in confirming the addition of Rs. 1,53,53,415 mad by learned AO by assuming that, DIARY and other documents found in search indicate parallel set of accounts unrelated to regular books of account. The I-T authorities ought to have appreciated that, many entries in these seized DIARY and other documents were later on recorded in regular books of account calling for appropriate adjustment. 5.Learned CIT(A) erred on facts in confirming the additions of Rs. 1,53,53,415 despite the fact that, Appellant has explained all credit entries in DIARY and other documents found seized course of search. 6.Learned I-T authorities erred on facts in not deciding any reasonable threshold of house-hold expenses considering family size of Appellant‟s stake-holders. Appellant contends that, after reduction of a fair estimate of house-hold and personal expenses, excess cash balance will transpire which will be available for telescoping of DIARY credit entries and other incriminating material seized during search. 6 IT(SS)A Nos.75 to 78/PUN/2022 7.Appellant contends that credit entries relating to cash receipt from M/s CHOCOLATE RETAIL PVT LTD were simply current account transactions arising out of safe custody& other support pursuits. Additions w.r.t. such cash receipt entries appearing in the DIARY & other material ought to be deleted in totality. 8.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 1,53,53,415 without granting telescoping benefits of – a) introduction of cash withdrawn by partners earlier for house-hold purpose b) introduction of cash withdrawn earlier and shown in name of partners c) receipt of cash paid earlier to relatives / associates of partners / stake-holders, etc. d) release of cash balance from cash payments recorded in regular books e) alleged irregular payment entries relating interest on loans 9.Learned I-T authorities erred in law and on facts in thus, assessing unreal and unearned income in the hands of Appellant. Learned I-T authorities glossed over human tendencies and natural probabilities considering which, addition of Rs. 1,53,53,415 appears uncalled for / excessive / unreasonable and illogical. 10.Learned CIT(A) erred on facts in dealing with specific credit entries totaling to Rs. 54,50,000 (6 line items) though, the addition made by learned AO was amounting to Rs. 1,89,45,712 14 (about 130 line items). Appellant contends that, all amounts involved in the overall amount of Rs. 1,02,65,514 ought to have been dealt with one-by-one during the Appellate proceedings. 11.Appellant contends that, addition of undisclosed income with respect to unrecorded cash receipts entries emanating from DIARY and other material seized during search, ought to have been restricted to appropriate Gross Profit Percentage (G.P.%) instead of 100% addition as so done at present. 12.Appellant contents that, project lands related cash payments (unrecorded in regular books of account) ought to be allowed for capitalization with suitable enhancements in carrying WIP value of such project lands. Issue-2-Alleged Cash loan to Mr. Jalan 13.Learned CIT(A) erred on facts in not granting telescoping benefit (to avoid double taxation) w.r.t. entries totaling to Rs. 65,00,000 (i.e. Rs. 20,00,000 + Rs. 20,00,000 + Rs. 10,00,000 + Rs. 5,00,000) and reduce additions made by learned AO to that extent. Appellant contends that, cash receipt entries in the DIARY, appearing in name of M. Ramesh Modi should be telescoped against the noting entries in name of Mr. Jalan. 11.Learned CIT(A) erred on facts in retaining addition of Rs. 183,600 on account of earning of alleged interest income on alleged loan given to Mr. Jalan. Issue-3 – Alleged cash receipt from Mr. Ghavate 7 IT(SS)A Nos.75 to 78/PUN/2022 13.Lerned CIT(A) erred in law and on facts in confirming the addition of Rs. 4,50,00,000 allegedly received from Mr. Ghavate without appreciating complete absence of any corroborative entry in DIARY or other papers found during the seach. 12.Learned CIT(A) erred on facts in not sustaining the addition of Rs. 4,50,00,000 overlooking the confirmation given by Mr. Ghavate and without appreciating that even the cheque receipts are being refunded by Appellant. 13.Learnd CIT(A) erred on facts in glossing over the typical practice of realty industry as regards cash receipts taking place either at the point of registration of properties or possession of properties, etc. 14.Learned I-T authorities ought to have granted telescoping benefit, w.r.t. various entries of cash payment, appearing on the page no. 61 of Bundle No. 4 of the seized papers, and which get linked to unrecorded cash receipts in the DIARY of period (such as Nahar – Rs. 50 lacs or Bhurmal – Rs. 50 lacs), etc. 15.Learned I-T authorities ought to have granted telescoping benefit w.r.t. various entries of cash payment, appearing on page no. 61 of Bundle No. 4 of the seized papers, and for which, no any transaction has been concluded and no any corroborative entries are found in search proceedings. Issue-3 – Alleged cash receipts from Ramesh Builders & Sakar 16.Lerned CIT(A) erred in law and on facts in confirming addition of Rs. 28,00,000 allegedly received from Ramesh Builders in CASH and allegedly remained unexplained. The I-T authorities ought to have appreciated that, the said amount was a mere „noting‟ related to a bank through receipt transactions of Rs. 14 lacs each, received from Mr. Ramesh Thakkar and Mr. Mahesh Thakkar, partners of M/s Ramesh Builders. 17.Learned CIT(A) erred in law and on facts in confirming addition of Rs. 27,00,000 alleged received from M/s SAKR in CASH and allegedly remained unexplained. The I-T authorities ought to have appreciated that, the said amount was a mere „noting‟ related a bank through receipt transaction of Rs. 27,00,000, received from M/s Sakar Corporation. 5. The assessee in IT(SS)A No.78/PUN/2022 for assessment year 2016-17 has raised the following grounds: Issue-1-Alleged Unrecorded Cash Receipts 1.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 40,08,900without appreciating all facts of the case in proper perspective. 8 IT(SS)A Nos.75 to 78/PUN/2022 2.Learned CIT(A) erred in confirming addition of Rs. 40,08,900 simply on the basis of cash receipt entries appearing in DIARY & other documents found in the course of search despite the fact that, there was no corroborating recordfound in search revealing any undisclosed income. 3.Learned CIT(A) erred on facts in confirming addition of Rs. 40,08,900 without appreciating that, firstly, no any unaccounted cash was found during the course of search and secondly, no any unexplained assets / investments were found during the course of search. Appellant contends that, various land investments of Appellant are continuing in the same status-quo as they were prior to AY 2012-13. 4.Learned CIT(A) erred on facts in confirming the addition of Rs. 40,08,900 mad by learned AO by assuming that, DIARY and other documents found in search indicate parallel set of accounts unrelated to regular books of account. The I-T authorities ought to have appreciated that, many entries in these seized DIARY and other documents were later on recorded in regular books of account calling for appropriate adjustment. 5.Learned CIT(A) erred on facts in confirming the additions of Rs. 40,08,900despite the fact that, Appellant has explained all credit entries in DIARY and other documents found seized course of search. 6.Learned I-T authorities erred on facts in not deciding any reasonable threshold of house-hold expenses considering family size of Appellant‟s stake-holders. Appellant contends that, after reduction of a fair estimate of house-hold and personal expenses, excess cash balance will transpire which will be available for telescoping of DIARY credit entries and other incriminating material seized during search. 7.Appellant contends that credit entries relating to cash receipt from M/s CHOCOLATE RETAIL PVT LTD were simply current account transactions arising out of safe custody& other support pursuits. Additions w.r.t. such cash receipt entries appearing in the DIARY & other material ought to be deleted. 8.Learned CIT(A) erred in confirming the learned AO‟s addition of Rs. 40,08,900 without granting telescoping benefits of – a) introduction of cash withdrawn by partners earlier for house-hold purpose b) introduction of cash withdrawn earlier and shown in name of partners c) receipt of cash paid earlier to relatives / associates of partners / stake-holders, etc. d) release of cash balance from cash payments recorded in regular books e) alleged irregular payment entries relating interest on loans 9.Learned I-T authorities erred in law and on facts in thus, assessing unreal and unearned income in the hands of Appellant. Learned I-T authorities glossed over human tendencies and natural probabilities considering which, addition of Rs. 40,08,900 appears uncalled for / excessive / unreasonable and illogical. 9 IT(SS)A Nos.75 to 78/PUN/2022 10.Learned CIT(A) erred on facts in dealing with specific credit entries totaling to Rs. 61,80,900 (7 line items) though, the addition made by learned AO was amounting to Rs. 40,08,900 (about 90 line items). Appellant contends that, all amounts involved in the overall amount of Rs.40,08,900 ought to have been dealt with one-by-one during the Appellate proceedings. 11.Appellant contends that, addition of undisclosed income with respect to unrecorded cash receipts entries emanating from DIARY and other material seized during search, ought to have been restricted to appropriate Gross Profit Percentage (G.P.%) instead of 100% addition as so done at present. 12.Appellant contents that, project lands related cash payments (unrecorded in regular books of account) ought to be allowed for capitalization with suitable enhancements in carrying WIP value of such project lands. First, we take up IT(SS)A No.75/PUN/2022 for AY 2013-14 as the lead case. 6. Facts of the case in brief, are that the assessee is a firm engaged in the business of land developer, builders and leasing out of commercial and residential properties. It filed original return of income on 12.12.2013 declaring total income of Rs.7,03,980/-. A search and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was conducted in Modi group of cases on 18.11.2015. The case of the assessee was also covered by the same search. In response to notice u/s 153A of the Act, the assessee firm submitted its return of income on 22.11.2016 declaring total income at Rs.1,70,61,380/-. The Assessing Officer thereafter issued statutory notices u/s 143(2) and 142(1) of the Act, in response to which, the AR of the assessee appeared before the Assessing Officer from time to time and filed the requisite details. 10 IT(SS)A Nos.75 to 78/PUN/2022 7. During the course of assessment proceedings the Assessing Officer noted that at the time of search at 1022, Modi towers, Shukrawarpeth, Pune, it was found that the assessee is maintaining parallel cash registers and cash book. The cash registers were found and seized as bundle No.1 to 8. When confronted with seized material, Shri Ramesh Modi, one of the partners of the firm and the key person of the Modi group, in reply to question No.4 of the statements recorded u/s 132(4) on 20.11.2015, stated that these diaries and note books were written by Shri Ramesh Patni who looks after the overall supervision of the office on his instruction. These bundles contain the cash entries received from and paid to the respective persons as narrated in the diaries. These diaries were maintained for date-wise cash receipt and expenses and that each page of these bundles have been signed either by Shri Bharat Modi or by Shri Ramesh Modi. The statement of Shri Ramesh Patni was also recorded who stated that the diaries were written on the instructions of Shri Ramesh Modi for cash receipt and payment and that these entries were not recorded in the books of account. During the course of search proceedings, the assessee was asked to prepare summary of cash receipt and payment. The month- wise summary of cash receipt and payment was made, according to which total cash receipt was arrived at Rs.15,98,40,744/- and cash expenditure was arrived at Rs.13,69,54,446/-. 8. During the post search inquiry, Shri Ramesh Modi was asked to submit the reconciliation of cash receipt and payment and cash vouchers. Subsequently, the assessee vide letter dated 15.03.2016 stated that it is humanly impracticable to 11 IT(SS)A Nos.75 to 78/PUN/2022 explain the nature and relevance of every receipt and payment. Therefore, he prepared a lump sum profit and loss account and declared the undisclosed income of Rs.6,36,42,800/- in the hands of Modi Builders, Shri Ramesh Modi and Shri Bharat Modi across four assessment years 2013-14 to 2016-17 as follows: Name of the assessee FY 2012-13 FY 2013-14 FY 2014-15 FY 2015-16 Particulars AY 2013-14 AY 2014-15 AY 2015-16 AY 2016-17 Ramesh Modi 38910 1563453 2772867 756182 Bharat Modi 2087750 1548453 4216767 364064 Modi Builders 14230740 11129095 15725967 9208555 Total 16357400 14241000 22715600 10328800 Grand Total Rs.6,36,42,800/- 9. However, at the time of filing of return of income, the entire amount of additional income declared at Rs.6,36,42,800/- was offered in the hands of the firm for various assessment years as under: AY 2013-14 Rs.1,63,57,400/- AY 2014-15 Rs.1,42,41,000/- AY 2015-16 Rs.2,27,15,600/- AY 2016-17 Rs.1,03,28,800/- Total Rs.6,36,42,800/- 10. The Assessing Officer, therefore, asked the assessee to explain the entries reflected in the seized diaries and to substantiate whether the transactions are accounted for in its regular books of account. The assessee submitted that the total credit works out to Rs.13,69,54,448/- which was accepted by the Assessing Officer. Further, due to certain bank withdrawals narrated in the diaries and confirmations filed by Shri Sandeep Modi, one of the partners of G Naik & Co and jointly signed by Shri Ramesh Modi, the credits were further reduced to 12 IT(SS)A Nos.75 to 78/PUN/2022 Rs.11,95,25,108/-. The Assessing Officer thereafter asked the assessee to explain the details in respect of the various credit and debit entries reflected in the seized diaries. In absence of any satisfactory explanation given by the assessee and observing that the presumption u/s 132(4) of the Act is rebuttable presumption i.e. they are inferences which the law requires to be drawn from given facts and which are conclusive until disproved by evidence to the contrary and since the assessee failed to submit any such evidence in support of his contention to disprove the presumptions made, the Assessing Officer made addition of Rs.5,58,90,877/- to the total income of the assessee u/s 68 of the Act over the period from A.Y. 2012-13 to 2016-17 being the difference between the additional income declared by the assessee at Rs.6,36,42,800/- and the total of the amount as per the seized diary at Rs.11,95,25,108/-. For the impugned assessment year, the Assessing Officer made addition of Rs.2,10,51,302/-. 11. Similar additions were made for other assessment years also, the details of which are as under: A.Y. 2012-13 2013-14 2014-15 2015-16 2016-17 Total of credit entries 16,20,000 4,37,71,262 3,14,36,544 4,51,27,268 1,50,08,300 Less: Income declared in Return -- 1,63,57,400 1,42,41,368 2,27,15,588 1,03,28,800 Less: Amount corresponding to explained entries -- 63,62,560 69,30,030 34,66,150 6,70,600 Net addition made in the assessment order 16,20,000 2,10,51,302 1,02,65,145 1,89,45,530 40,08,900 13 IT(SS)A Nos.75 to 78/PUN/2022 12. The Assessing Officer accordingly determined the total income of the assessee for the assessment year 2013-14 at Rs.3,81,12,682/- 13. Before the CIT(A), the assessee filed certain details based on which the Ld. CIT(A) called for a remand report from the Assessing Officer. After considering the remand report of the Assessing Officer and rejoinder of the assessee to such remand report, the CIT(A) deleted Rs.19,80,000/- and sustained the balance amount of Rs.1,90,71,302/- by observing as under: “30. I have considered these contentions of the appellant and my findings on each of these contentions are as under: 30.1 The first two contentions of the appellant are that these seized diaries do not exclusively belong to the appellant firm and contain transactions of other group concerns as well. It has also been contended that some of the transactions are duly explained. These contentions were raised by the appellant during the assessment proceedings itself and the assessing officer accepted the same and accordingly, reduced certain transactions belonging to M/s G Naik & Co., bank withdrawals, etc. Also, initially, the disclosure on account of these diaries were made in the hands of appellant firm Shri Bharat Modi and Shri Ramesh Modi, but subsequently, while filing the return, whole of the undisclosed income was declared only in the hands of appellant firm. Considering these facts, the assessing officer held that any further addition on the basis of credit entries in the diaries should be made in the hands of the appellant only. Before me, the AR of the appellant stated that for the appellant also it was not possible to link individual transaction to various members/concerns of Modi group and for the sake of simplicity, whole of undisclosed income was declared in the hands of the appellant. Considering the facts of the case and the submissions made before me, the action of the Assessing officer in making further addition in the hands of the appellant firm is upheld. 30.2 The appellant has claimed all the credit entries have been explained, is not correct because there is a clear finding of the AO in this regard stating that the Appellant has failed to explain the credit entries. Before me, nothing has been filed to controvert the said finding of the Assessing Officer; therefore, the said finding of the AO is upheld. 30.3 As far as debit entries noted in the diaries are concerned, the AO himself has held that the same stand explained out of the credit entries and he has not made any separate addition on account of debit entries found recorded in the diaries. Therefore, the contention of the appellant regarding debit entries, is out of place. 14 IT(SS)A Nos.75 to 78/PUN/2022 30.4 The next contention of the appellant is that many entries in the diaries are proposed transactions. A perusal of seized diaries suggests that these are day to day cash book written by the Modi family wherein both receipt and cash payments are maintained. Receipts are mentioned at the left side of the page and payments are mentioned on the right side of the page. Totalling of each day is also done at the bottom of each page. The balance has been carried forward for the next day. In such situation, the contention that the transactions were only proposed transactions cannot be accepted. In case, the appellant claims that there were some transactions which did not materialise and the cash was received back, naturally, the appellant is required to give complete details of such transactions and the persons involved in such transactions so that the AO can make necessary verifications. Without these details, the claim of the appellant cannot be accepted on the face of it. Considering the totality of facts, this contention of the appellant cannot be accepted. 30.5 As far as the credit entries in the name of M/s Chocolate Retails Pvt Limited is concerned, the said issue has been discussed-earlier in this order, wherein, after considering the submissions of the appellant, it has been held that the said credit entries cannot be treated as explained in the books of M/s Chocolate Retails Private Limited. Accordingly, the said contention of the appellant is rejected. 30.6 The last contention of the appellant is that during the search, the department did not find any unaccounted cash or unaccounted investment and the undisclosed income declared by the appellant was sufficient to cover the unexplained investment / expenditure mentioned in the diaries. The said argument of the appellant is misleading because while quantifying the appellant has not considered various expenditures (drawing, household expenditure, running expenses) as found recorded in the diaries which were funded through the unexplained credit entries found recorded in these diaries. 30.7 To sum up, all the general contentions of the appellant are rejected. 31. The appellant has alternatively submitted that there are instances where the cash withdrawals by Modi family/partners, etc. were subsequently redeposited as per the diary and therefore such amounts should be reduced while computing the unexplained credits, as it amounts to double taxation. The appellant has pointed out specific instances of such withdrawals in its submission dated 7/02/2022. I have considered the alternate submission of the appellant along with the seized documents and my decision on each of these entries as pointed out by the appellant are tabulated as under: Sl. No Claim of the Appellant My Decision with remarks i. Bundle No.6, page 11, date 11.6.2012, cash withdrawn by Modi Group Partners Mr. C.S. Ghule Rs.5,00,000/- and Mr. R.N. Thakkar Rs.5,00,000/- Mr C S Ghule and Mr R N Thakkar are not members of Modi Family. Neither are they partners in the appellant firm. These two persons are business partners in M/s Modi Landscape Pvt Limited 15 IT(SS)A Nos.75 to 78/PUN/2022 and there is no evidence that the cash given to these persons was received back or credited in their name. In such situation, it cannot be presumed that the cash withdrawn by these persons was reintroduced in the diary. Therefore, the claim of the appellant is rejected. ii. Bundle No.6, page 12, date 21.6.2012, cash withdrawn by Bharatbhai Modi Rs.3,05,500/- As per seized diary, the narration mentioned against this entry is "house hold' which suggests that this amount was withdrawn for household expenses. In such situation, the appellant contention that this amount was later redeposited cannot be accepted. Therefore, the claim of the appellant is rejected. iii. Bundle No.6, page 12, date 23.6.2012, cash withdrawn by Hardik Modi Rs.40,000/- This amount of withdrawal is quite nominal and there is no evidence that the said amount was not spent for his personal expenditure by Mr.Hardik Modi. Therefore, the claim of the appellant is rejected. iv. Bundle No.6, page 13. Date 27.6.2012, cash withdrawn by Ramesh Modi Rs.3,02,000/- Same as (ii) above. Therefore, the claim of the appellant is rejected. v Bundle No.6, page 16, date 14.7.2012, cash withdrawn by Ramesh Thakkar Rs.23,50,000/-. Same as (i) above. Therefore, the claim of the appellant is rejected. vi Bundle No.6, page 16, date 14.7.2012, cash withdrawn by Ramesh Modi Rs.2,93,275/- Same as (ii) above. Therefore, the claim of the appellant is rejected. vii Bundle N0,6, page 16, date 17.7.2012, cash withdrawn by Ramesh Modi Rs.15,00,000/- The narration mentioned against this entry is 'Hand loan' which indicates that it was a loan and may not be in the nature of expenditure. Further, there are following credit entries inthe name of Ramesh Modi 7.8.2012 3,00,000 9.8.2012 5,00,000 16 IT(SS)A Nos.75 to 78/PUN/2022 23.8.2012 50,000 27.8.2012 80,000 28.8.2012 1,50,000 30.8.2012 2,50,000 31.8.2012 1,00,000 04.9.2012 4,00,000 10.10.2012 3,15,000 11.10.2012 2,00,000 And further credit entries as well. Since narration of this entry suggests that it was a loan, therefore, possibility of returning of this loan in installment by Mr Ramesh Modi and redeposit as per the diary cannot be ruled out. Accordingly, this contention of the appellant is accepted. viii Bundle No.6. page 25. date 06.09.2012. cash withdrawn by Jayaben Modi Rs.55,000/- Same as (ii) above. Therefore, the claim of the appellant is rejected. ix Bundle No.6, page 27, date 28.09.2012, cash withdrawn by Chocolate Retail Pvt. Ltd. (Sister concern, Ramesh Modi being director) Rs.10,00,000/- The narration mentioned against this entry is 'Hand loan' which indicates that it was a loan and may not be in the nature of expenditure. Further, there are following credit entries in the name of 'Chocolate Retail Pvt Ltd': 22/02/2012 30,000 18/03/2013 3,00,000 26/03/2013 1,50,000 And further credit entries in next FY as well. Since narration of this entry suggests that it was a loan, therefore, possibility of returning of this loan in installment by Chocolate Retail and redeposit as per the diary cannot be ruled out. Accordingly, this contention of the appellant is accepted to the extent of credit amount appearing in the name of M/s Chocolate 17 IT(SS)A Nos.75 to 78/PUN/2022 Retail Private Limited. x Bundle No.6, page 27, date 29.09.2012, cash withdrawn by Chocolate Retail Pvt. Ltd. (Sister concern, Ramesh Modi being director) Rs.5,00,000/- Same as (ix) above. xi Bundle No.6, page 34 date 03.11.2012. cash withdrawn by Ramesh Thakkar Rs.2,50,000/- Same as (i) above. Therefore, the claim of the appellant is rejected. xii Bundle No.6. page 39, date 04.12.2012, cash withdrawn by Geetaben Modi Rs.1,00,000/- Same as (ii) above. Therefore, the claim of the appellant is rejected. 32. To sum up, out of 12 instances as pointed out by the appellant, only in the case of Shri Ramesh Modi and M/s Chocolate Retail Private Limited, it is accepted that the amount of Rs.15,00,000 each, withdrawn by these persons as Loan could have been redeposited on subsequent dates. Since, the amount of subsequent credit entries in the name of Shri Ramesh Modi is more than Rs.I5,00,000/- for the year, therefore, in order to avoid double taxation, the Assessing Officer is directed to reduce the addition by an amount of Rs. 15,00,000/-. However, the credit entries in the name of M/s Chocolate Retails Private Limited for the year is only 4,80,000/-, therefore, for the year under consideration, only this amount should be reduced to avoid double taxation. The benefit of remaining debit amount of Rs 10,20,000/- is being given in subsequent assessment year. 33. In this manner, out of an amount of Rs.2,10,51,302/-, the appellant will get a relief of Rs.19,80,000/- and remaining addition is confirmed. The grounds No. 1 to 7 raised by the appellant are disposed accordingly.” 14. Aggrieved with such order of CIT(A), the assessee is in appeal before the Tribunal. 15. The Ld. Counsel for the assessee at the outset did not press grounds No.4, 7, 11 and 12 for which the said grounds are dismissed as not pressed. The ground No.1 being general in nature, is dismissed. So far as the grounds No.2, 3, 5 and 9 are concerned, the Ld. Counsel for the assessee filed the following written submissions: “b. Ground-2 + Ground 3 + Ground 5 + Ground 9 - These grounds relate to the factum that, except the DIARY of parallel accounting of cash transactions found during the course of search, no any corroborating 18 IT(SS)A Nos.75 to 78/PUN/2022 material was found during the search, which can support contention that, credit entries in the DIARY are items of "undisclosed income". In particular, Appellant has been submitting that, no any evidence relating to any sale of realty units sale of land / land rights, etc were found in the course of search. Further, no any corroborating evidences were found during the course of search such as, any excessive cash balance / excessive jewellery / excessive investments, etc were found which can substantiate presence of any "undisclosed income" found / located in the course of search. It is the knowledge of the Appellant that, learned AO has carried out a massive enquiry with all Registrar offices in Maharashtra and Gujarat for knowing realty transactions entered into by any of the Appellant's entities/key stake holders by sending PAN numbers of all these persons. It is the belief of the Appellant that, replies were indeed received from the registering authorities and, all the reported transactions were matching one-by-one with these transactions recorded in regular books of account. In other words, no any unrecorded / undisclosed transaction transpires after this major enquiry done by learned AO. Appellant tries to get copies of these enquiries from the learned AO, but, without success. Recently, Appellant has also written an email to the jurisdictional AO i.e. DCIT, Central Circle 1(2), Pune on 11/06/2023 enquiring status of the letters of the learned AO, copy of which is enclosed at Page 2161 to Page 2163 of Paper-Book-IH for AY 2013-14. As such, barring internal cash vouchers were prepared by Appellant, no any corroborating evidence is available, either in records / papers sized during search, or, in the papers / evidences availed by AO from enquiries, etc. As such, corroboration of DIARY entries relating to any additional "undisclosed income" does not exist at all.” 16. So far as the grounds No.6, 8 and 10 are concerned, he filed the following written submissions for giving telescoping benefit since the whole addition is based on diary entries which contain entries relating to all Modi group concerns and Modi family members: “g. Ground No. 6 + Ground No. 8 + Ground No. 10-Telescoping of payments in the first instance and receipts in the second instance – Without prejudice to the other grounds of appeal, Appellant contends that, telescoping of debits (i.e. payments) and subsequent credits (i.e. receipts) ought to be granted to the Appellant. Appellant's family members stay together in common premises as a joint family. The said Telescoping mechanism ought to be extended even to transactions with Modi group entities and Modi Associates, since, the DIARY was related combined cash box and cash transactions of all such entities. Request for grant of benefit of peak credit / telescoping on an overall basis, was made before the learned AO at Para- 6.4 on Page-6 of the order. Learned AO did not adjudicate on this issue. 19 IT(SS)A Nos.75 to 78/PUN/2022 However, learned CIT(A) adjudicated on this issue, though in a restrictive manner. Learned CIT(A) granted telescoping of such entries, where, name of the person matches and no mismatch appears in narration. This issue is discussed in para no. 61 on page no. 50 of order of learned CIT(A). On this issue, specific contentions of the Appellant are as under- a) Transactions listed in the DIARY which was seized in the course of search pertain to - Modi family members, - Mod group entities, - Modi group associates Since, names of various Modi family members, various Modi group entities and various Modi group associates appear in a single consolidated DIARY, the credits and debits in the DAIRY in the names of Modi family members. Modi group entities and Modi group associates should be considered on a totality basis for locating peak credit on-telescoping principle. b) Without prejudice to the above (and alternately), Appellant contends that, such peak credit / telescoping should be worked out by considering all Modi family members and Modi group entities on a totality basis. c) Without prejudice to the above (and alternately), Appellant contends that, such peak credit / telescoping should be worked out by considering all Modi family members on a totality basis. d) Without prejudice to the above (and alternately). Appellant contends that, such credit / telescoping should be considered considering Mr. Ramesh Modi and Mr. Bharat Modi together, since, these two persons are the key stake-holders of all entities of Modi Group. e) Without prejudice to the above (and alternately), Appellant contends that, such peak credit /telescoping should be worked out qua each person without considering narrations thereto. f) Lastly, Appellant contends that, entries relating to payment of interest appearing in the DIARY may please be considered for working out peak credit / telescoping, since, all unexplained loan entries are considered as "undisclosed income" of the Appellant, either at the point of filing of 153A return or, during the course of assessment. In other words, "undisclosed income" emanating from loan taken entries ought to be taken to their logical end.” 20 IT(SS)A Nos.75 to 78/PUN/2022 17. The Ld. Counsel for the assessee without prejudice to the above requested for granting telescopic benefit on totality basis and filed the following written submissions: “Without prejudice to the above requests for granting TELSCOPING on In the totality of the above said facts and circumstances, basis (i.e. all members of Modi family + Modi group entities + Modi group associates), Appellant requests for grant of telescoping of payments and receipts pertaining to various persons of Modi Family, in following specific cases. Appellant has identified such close transactions of payments firstly, and receipts secondly, on a case-to-case basis. However, in case Appellant succeeds on overall Telescoping basis, following specific telescoping will be uncalled for. Name Particulars of Diary CIT(A) observations for not granting telescoping benefit Date Amount Positive fig. = Payment Negative fig. = Receipts Narration Ramesh Thakkar 11-06-2012 5,00,000 R.N. Thakkar Hand Loan Mr C S Ghule and Mr R N Thakkar are not members of Modi Family. Neither are they partners in the appellant firm. These two persons are business partners in M/s Modi Landscape Pvt Limited and there is no evidence that the cash given to these persons was received back or credited in their name. In such situation, it cannot be presumed that the cash withdrawn by these persons was reintroduced in the diary 14-07-2012 23,50,000 R.N. Thakkar Hand Loan (same as above) 28-09-2012 -10,00,000 Ramesh NA 21 IT(SS)A Nos.75 to 78/PUN/2022 Builder 31-07-2014 -3,00,000 Ramesh Thakkar NA 16-05-2015 -2,00,000 R T Kakak NA Appellant, as such, submits that, relief on account of peak credit / telescoping may please be extended and double addition may please be removed.” 18. So far as other years are concerned, the Ld. Counsel for the assessee filed the following written submissions: For the assessment year 2014-15 1. Ground-wise Submission a. Ground No. 13 – Challenge to addition of Rs. 1,25,00,000 regarding one Mr. Jalan Facts: Learned AO has made an addition of Rs. 1.25 CR alleging extension of a CASH loan by the Appellant during AY 2014-15. The issue starts from two pages seized during the course of search, vide Page No. 57 of Bundle No. 13, copies of which are enclosed herewith and marked as Annexure-1. These two pages are reproduced by the learned AO in his order at Para-7 on Page – 10 to page – 12. As per the learned AO, reason for making the said addition is summarised in following manner - - Alleged Cash loan given to Mr. Jalan by Appellant - Rs. 2.00 CR - Less : Amounts offered by Appellant in its Return of income - Rs. 0.75 CR (on the basis of receipt entries in the DIARY) -------------- - Difference - Rs. 1.25 CR ======= Learned CIT(A) has confirmed the above addition of Rs. 1.25 CR vide Para-48 on Page-42 of his order. Contentions / Submissions 1. No any name / PAN / address of Mr. Jalan on page no. 57 of bundle no. 13 – Perusal of the said page no. 57 reveals that, it does not clearly relate to Mr. Jalan. No indicative narration exists thereto for linking the said page to Mr. Jalan. As such, additions mere on the basis of existence of such dumb document / non- speaking seized paper ought to be deleted. 22 IT(SS)A Nos.75 to 78/PUN/2022 2. No corroboration of the amount of Rs. 1.25 CR in DIARY – All parties involved, i.e. the search party, then the Appellant Assessee, and the learned AO; have proceeded to cull out the quantum of undisclosed income from the credits in the DIARY. Search party made a list of such credits, from which some deletions took place from time to time. Now, the issue of grant of Cash Loan to Mr. Jalan amounting to Rs. 2.00 CR, does not exist accounted for, anywhere in the DIARY. The sole reason of the learned AO, for making the said addition, was the seized paper enclosed herewith vide Annexure-1. In absence of corroboration of the seized paper no. 57 of Bundle No. 13 with the DIARY, the said addition of Rs. 1.25 CR ought to be deleted. 3. Absence of mention of any specific date for Cash Loan of Rs. 2.00 CR – Scribblings on the said page no. 57 of Bundle No. 13 (copy enclosed at Annexure- 1) refers to some indicative “balance” of Rs. 2.00 CR prior to 28/11/2013. In fact, learned AO, at para-7, page no. 10 has also observed that, the said loan of Rs. 2.00 CR was extended to Shri Jalan on or before 28/11/2013. Now, description of “before 28/11/2013” can‟t be straightway understood as an amount extended during the period from 1/4/13 to 28/11/2013. As an analogy, such amount may pertain to (say) AY 2013-14 or (say) AY 2012-13 or (say) AY 2011-12 and so on. In absence of any clear mention of date, the addition of Rs. 1.25 CR so made, is uncalled for. 4. Receipt of cash amounts of Rs. 1.65 CR from Mr. Jalan in AY 2013-14 – Kindly refer to Page-2174 of Paper-Book-IV for AY 2013-14, wherein, Rs. 1.65 CR has been received from Mr. Jalan from time to time, and which has already been accounted for in the DIARY. Further, this amount of Rs. 1.65 CR has already been offered to tax by Appellant in AY 2013-14. Existence of such entries of cash receipts in AY 2013-14, amounting to Rs. 1.65 CR would logically lead to some different situation. It leads to a situation that, a) cash loan was extended to Mr. Jalan prior to AY 2013-14 b) same was equal to or more than Rs. 3.65 CR (i.e. Rs. 2.00 CR as per Annexure-1 enclosed + Rs. 1.65 CR as above). Assuming such an analogy, then, addition of Rs. 2.00 CR in AY 2014-15 on the pretext that, the said amount of Rs. 2.00 CR was extended in AY 2014-15 is, incorrect. Considering the above contentions, it is submitted that, addition of Rs. 1.25 CR made on assumption of cash loan given in AY 2014-15 is, incorrect. 2. Specific Contention w.r.t Telescoping of payments and receipts pertaining to MODI FAMILY Without prejudice to the above requests for granting TELSCOPING on totality basis (i.e. all members of Modi family + Modi group entities + Modi group associates), Appellant requests for grant of telescoping of payments and receipts pertaining to various persons of Modi Family, in following specific cases. Appellant has identified such close transactions of payments firstly, and receipts secondly, on a 23 IT(SS)A Nos.75 to 78/PUN/2022 case-to-case basis. However, in case Appellant succeeds on overall Telescoping basis, following specific telescoping will be uncalled for. Name Particulars of Diary CIT(A) observations for not granting telescoping benefit Date Amount Positive fig. = Payment Negative fig.= Receipts Narration Jayaben Modi 19-03- 2014 6,04,000 Jayaben Gold Name in seized document was "Jayaben Gaur" and "A" had claimed telescoping for Geetaben Modi 06-10- 2014 -50,000 Jayaben NA 06-01- 2015 -75,000 Jayaben NA 04-03- 2015 -45,000 Jayaben purch 01-04- 2015 -10,000 Jayaben NA 06-05- 2015 -15,000 Jayaben Modi NA 07-05- 2015 -10,000 Jayaben Modi NA For assessment year 2015-16 1. Ground-Wise Contention a. Ground No. 13 + Ground No. 14 – Challenge to addition of Rs. 65,00,000 Facts Learned AO has made an addition of Rs. 0.90 CR alleging some undisclosed receipts in the DIARY. Appellant contended that, all these are amounts received from Mr. Jalan out of the old loan transaction carrying from earlier years. But, learned AO did not accept this explanation, since, entries in the DIARY were not showing clear name of Mr. Jalan. The various related entries show the name as ... Mr. R S / R M (J) .... Learned CIT(A) deleted amount of Rs. 0.25 CR out of the above amount of Rs. 0.90 CR saying that, the amounts totalling to Rs. 0.25 CR stand in name of Mr. Jalan in the DIARY and that, these amounts are already offered to tax by Appellant itself. 24 IT(SS)A Nos.75 to 78/PUN/2022 Submission From overall reading of the orders, it reveals that, I-T department has treated page no. 57 of bundle no. 13 as one, showing entries related to Mr. Jalan. Now, once such a conclusion is reached, then thereafter, expecting the clear name of Mr. Jalan in DIARY is incorrect. Accordingly, it is submitted, the said addition of Rs. 0.65 CR is uncalled for. b. Ground No. 15 to Ground No. 19 – Addition of Rs. 4.50 CR relating to Mr. GHAVATE Facts During the search, a paper was seized at No. 61 of Bundle no. 14 which includes an amount of Rs. 4.50 CR in name of Mr. Ghavate. Copy of the said seized page is enclosed herewith and marked as Annexure-1. Learned AO has treated the said amount of Rs. 4.50 CR as cash receipt from Mr. Ghavate on account of some land transaction, and added the same vide Para-7 on Page-18 (2 nd last page of the order). Appellant‟s objections were turned down even by learned CIT(A) vide para-77.4 on page-68. Submissions 1. Dumb document – Entries on the said Page-61 of Bundle No. 14 do not specifically show any plausible land transaction amounting to Rs. 4.50 CR. As such, the said document is a mere dumb document which does not warrant any addition per se. 2. No corroboration with DIARY – Appellant has submitted that, the said alleged transaction of cash receipt of Rs. 4.50 CR from Mr. Ghavate is not found anywhere in the DIARY. Learned I-T authorities have treated entries in DIARY as a key basis for making various additions. As such, there is no corroboration of the said alleged entry and hence, the said addition ought to be deleted. 3. No corroboration with any land transaction found in search – Appellant has been submitting that, no any land transaction with the said Mr. Ghavate was found in the course of search. Further, no any such alleged land transaction was reported by the registering authorities in specific enquiry of the learned AO. As such, there is total absence of any corroboration. 4. Non-making of addition in hands of Mr. Ghavate by learned AO – Appellant, at Page-2064 to Page-2074 of paper-Book-III of AY 2013-14 has enclosed the assessment order u/s 147 dated 9/5/2023 in which, entire issue of alleged land transaction between Mr. Ghavate and the Appellant has been discussed by the learned AO (NFAC). After going through all relevant facts, learned AO (NFAC) has, vide conspicuous findings at para-3.4 on Page-9 of the 147 order dated 9/5/2023 has refrained from any addition in hands of Mr. Ghavate. Appellant herein submits that, findings of the learned AO (NFAC) refraining from making additions in hands of Mr. Ghavate (and in period sequence, after the assessment 25 IT(SS)A Nos.75 to 78/PUN/2022 order in case of Appellant) stands on an elevated level as regards facts of the matter. Considering the conspicuous non-making of additions in hands of Mr. Ghavate, grounds of Appellant herein, requesting for deletion of the addition of Rs. 4.50 CR may please be allowed. c. Ground No. 20 – Addition of Rs. 28 lacs pertaining to M/s Ramesh Builders Facts During the search, a paper was seized at No. 61 of Bundle no. 14 which includes an amount of Rs. 28 lacs standing in name of one M/s Ramesh Builders. Learned AO, vide para-7 on page-19 (2 nd last page of the order) has held that, Appellant has received an amount of Rs. 28 lacs from M/s Ramesh Builders which has remained “undisclosed”. As such, the said amount of Rs. 28 lacs has been added by learned AO. The said addition has been confirmed by learned CIT(A) vide para-78 on page- 68 of the appellate order. Submissions 1. Dumb document – Entries on the said Page-61 of Bundle No. 14 do not specifically show any plausible land / realty transaction amounting to Rs. 28 lacs. Further, in the narration of the said page-61, there is no any specific mention that, the amount of Rs. 28 lacs relates to any “cash ́ transaction. As such, the said document is a mere dumb document which does not warrant any addition per se. 2. No corroboration with DIARY – Appellant has submitted that, the said alleged transaction of cash receipt of Rs. 28 lacs from M/s Ramesh Builders is not found anywhere in the DIARY. Learned I-T authorities have treated entries in DIARY as a key basis for making various additions. As such, there is no corroboration of the said alleged entry and hence, the said addition ought to be deleted. 3. No corroboration with any land transaction found in search – Appellant has been submitting that, no any land / realty transaction with the said M/s Ramesh Builders was found in the course of search. Further, no any such alleged land transaction was reported by the registering authorities in specific enquiry of the learned AO. As such, there is total absence of any corroboration. 4. Receipt of Rs. 28 lacs by CHEQUE – Appellant contends that, Appellant has received following two amounts from the said M/s Ramesh Builders by CHEQUE in associate concerns of Modi Group. - On 16/6/2014 - Rs. 14 lacs – recd in M/s Modi Landscape P Ltd - On 9/7/2014 - Rs. 14 lacs -recd in name of Mr. Ramesh Modi Bank statements showing the above two receipts are enclosed herewith and marked as Annexure-2. As such, alleging the said amt of Rs. 28 lacs as undisclosed cash receipt is incorrect. d. Ground no. 21 – Addition of Rs. 27 lacs in name of “Saakar” Facts 26 IT(SS)A Nos.75 to 78/PUN/2022 During the search, a paper was seized at No. 61 of Bundle no. 14 which includes an amount of Rs. 27 lacs standing in name of one M/s “Saakar”. Learned AO, vide para-7 on page-19 (2 nd last page of the order) has held that, Appellant has received an amount of Rs. 27 lacs from M/s Saakar which has remained “undisclosed”. As such, the said amount of Rs. 27 lacs has been added by learned AO. The said addition has been confirmed by learned CIT(A) vide para-79.1 on page-69 of the appellate order. Submissions 1. Dumb document – Entries on the said Page-61 of Bundle No. 14 do not specifically show any plausible land / realty transaction amounting to Rs. 27 lacs. Further, in the narration of the said page-61, there is no any specific mention that, the amount of Rs. 27 lacs relates to any “cash ́ transaction. As such, the said document is a mere dumb document which does not warrant any addition per se. 2. No corroboration with DIARY – Appellant has submitted that, the said alleged transaction of cash receipt of Rs. 27 lacs from M/s Saakar is not found anywhere in the DIARY. Learned I-T authorities have treated entries in DIARY as a key basis for making various additions. As such, there is no corroboration of the said alleged entry and hence, the said addition ought to be deleted. 3. No corroboration with any land transaction found in search – Appellant has been submitting that, no any land / realty transaction with the said M/s Saakar was found in the course of search. Further, no any such alleged land transaction was reported by the registering authorities in specific enquiry of the learned AO. As such, there is total absence of any corroboration. 4.Receipt of Rs. 27 lacs by CHEQUE – Appellant contends that, Appellant has received the said amount of Rs. 27 lacs from said M/s Saakar Corporation by CHEQUE in associate concerns of Modi Group as follows – - On 13/2/2015 - Rs. 27 lacs – recd in M/s Modi Landscape P Ltd Bank statements showing the above receipt is enclosed herewith and marked as Annexure-3. As such, alleging the said amt of Rs. 27 lacs as undisclosed cash receipt is incorrect. 2. Specific Contention w.r.t Telescoping of payments and receipts pertaining to MODI FAMILY Without prejudice to the above requests for granting TELSCOPING on totality basis (i.e. all members of Modi family + Modi group entities + Modi group associates), Appellant requests for grant of telescoping of payments and receipts pertaining to various persons of Modi Family, in following specific cases. Appellant has identified such close transactions of payments firstly, and receipts secondly, on a case-to-case 27 IT(SS)A Nos.75 to 78/PUN/2022 basis. However, in case Appellant succeeds on overall Telescoping basis, following specific telescoping will be uncalled for. Sr No. Assessee Particulars of Diary CIT(A) Remarks Date Amount Positive fig. = Payment Negative fig.= Receipts Narration 1. Bharat Modi 04-03-2014 4,00,000 Bharatbhai Modi Gujarat Trip Kheralu Bungalow As per seized document, the said amount was withdrawn for „Gujrat trip KheraluBunglow‟. The Modi family was constructing a bunglow at Kheralu and clearly the said withdrawal was utilised for that purpose. So it cannot be used for redeposit as claimed by the appellant. 06-05-2014 -15,000 B.S. Modi NA 28-05-2014 -2,00,000 Bharat Modi NA 2. Bharat Modi 05-06-2014 5,00,000 BS Modi Kheralu Bungalow NA 10-09-2014 -3,50,000 B.S. Modi NA 3. Ramesh Modi 27-08-2014 45,00,000 R.S. Modi - Paid for purchasing flat at SURAT As per seized diary, the narration mentioned against this entry is „paid for purchase of flat at Surat‟ which suggests that this amount was paid for purchase of property. No evidence has been filed substantiating that the said amount was not paid for purchasing the immovable 28 IT(SS)A Nos.75 to 78/PUN/2022 Sr No. Assessee Particulars of Diary CIT(A) Remarks Date Amount Positive fig. = Payment Negative fig.= Receipts Narration property and was subsequently redeposited. In such situation, the appellant contention that this amount was later redeposited cannot be accepted 27-08-2014 50,000 R.S. Modi - Paid for registration and other expenses for purchasing flat at SURAT NA 19-11-2014 -1,00,000 R.S. Modi NA 09-01-2015 -5,00,000 R.S NA 10-01-2015 -5,00,000 R.S NA 12-01-2015 -1,00,000 R.S NA 13-01-2015 -1,00,000 R.S NA 14-01-2015 -1,00,000 R.S NA 23-01-2015 -1,00,000 R.S NA 27-01-2015 -50,000 R.S NA 28-01-2015 -1,00,000 R.S NA 05-02-2015 -1,00,000 R.S NA 07-02-2015 -50,000 R.S. Modi NA 11-02-2015 -1,00,000 R.S NA 12-02-2015 -50,000 R.S NA 17-02-2015 -6,00,000 R.S NA 18-02-2015 -1,00,000 R.S NA 24-02-2015 -38,000 R.S Modi NA 13-03-2015 -7,00,000 R.S Modi NA 14-03-2015 -2,00,000 R.S Modi NA 16-03-2015 -1,00,000 R.S Modi NA 24-03-2015 -5,00,000 R.S Modi NA 27-03-2015 -50,000 R.S Modi NA 30-03-2015 -30,000 R.S Modi NA 04-04-2015 -2,50,000 R.S Modi (Kiran) NA 29 IT(SS)A Nos.75 to 78/PUN/2022 Sr No. Assessee Particulars of Diary CIT(A) Remarks Date Amount Positive fig. = Payment Negative fig.= Receipts Narration 4. Ornament s 21-10-2014 41,10,000 Dimple Modi paid for Gold ornaments NA 06-11-2014 18,35,400 Gold NA For assessment year 2016-17 1. Specific Contention w.r.t Telescoping of payments and receipts pertaining to MODI FAMILY Without prejudice to the above requests for granting TELSCOPING on totality basis (i.e. all members of Modi family + Modi group entities + Modi group associates), Appellant requests for grant of telescoping of payments and receipts pertaining to various persons of Modi Family, in following specific cases. Appellant has identified such close transactions of payments firstly, and receipts secondly, on a case-to-case basis. However, in case Appellant succeeds on overall Telescoping basis, following specific telescoping will be uncalled for. Sr No. Assessee Particulars of Diary CIT(A) Remarks Date Amount Positive fig. = Payment Negative fig.= Receipts Narration 1. Ramesh Modi 16-05-2015 50,00,0000 Chocolate Surat The narration against this entry “Chocolate Retail Surat.” Apparently, M/s Chocolate Retail Private Limited opened a new retail showroom at Surat and the said payment was given for the same. Also, subsequent to this date, there are no credit entries in the name of Chocolate Retails Pvt Limited, therefore, no set off as claimed by the appellant can be given. 30 IT(SS)A Nos.75 to 78/PUN/2022 Sr No. Assessee Particulars of Diary CIT(A) Remarks Date Amount Positive fig. = Payment Negative fig.= Receipts Narration 30-06-2015 2,75,900 RS Modi – Franking, Registration Fee, Franking Charges, Data entry, stamp paper, notary etc for Mortgage Deed for Flat No 5 & 6 for Premukh Park for Loan Purpose of Chocolate Retail As per seized diary, the narration mentioned against this entry is „franking and registration charges, purchase of stamp papers, notary, data entry, etc for mortgage deed for OD loan from Syndicate Bank‟ which suggests that this amount was withdrawn for specific expenditure and by no stretch of imagination, it can be expected that this amount was redeposited, as claimed by the appellant. 01-08-2015 -50,000 Swapnil Sanjeev Kumar 04-08-2015 -1,50,000 Swapnil Sanjeev Kumar 27-08-2015 -5,000 Rameshbhai 29-08-2015 -15,000 Shirasgaon property 12-09-2015 -35,000 Pradip Patil 19. The Ld. Counsel for the assessee thereafter filed the following supplementary synopsis: 1. Additional income, accepted by Appellant, at this Appellate stage before Honourable ITAT – (relevant for all four years) - While preparing various charts / tables / summaried, Appellant realised that, some amounts of cash receipts, which have been contested by Appellant till date, are not being contested any more. These amounts are listed at Sr. No. 13 of the Schedule-1 enclosed herewith. Total of these amounts works out to Rs. 45,75,000 and in Sr. No. 13 of Schedule-1, specific reasons for the said acceptance are clearly given. 31 IT(SS)A Nos.75 to 78/PUN/2022 2. Errors – (relevant for all four years) - Appellant has pointed out various errors which have crept into the working of additional income, as so framed by the learned AO. These errors have been highlighted for each year‟s Credit Summation Charts. In the said charts, these errors have been explained by way of Foot-notes. Here is the summary of these errors – AY Amount (Rs.) Nature of Error Submission 2013-14 Note-2 ofPage- 2175 of PB-IV 10,00,000 received from Mr. Mulla- Patil / KASHIL Receipt of erstwhile advance is added as unexplained income Erstwhile advance entry appears on Page-904 of PB-II (DIARY) and subsequent receipt appears on Page-916 of PB-II (DIARY). 2014-15 Note-2 of page- 2195 of PB-IV 1,51,300 Rent deposit forfeiture Already offered to tax in regular return of income 2014-15 Note-3 of Page- 2195 of PB-IV 1,25,000 This amount is simply mentioned in Annexure, but not found in DIARY Since DIARY entries is the basis of all additions of learned AO, the said addition is totally incorrect 2014-15 Note-4 of Page- 2195 of PB-IV 14,00,000 Double addition w.r.t. amt received from Mr. Chopada. Double addition clearly emerges from Page-190 and Page-191 of Paper-Book-II 2015-16 Note-3 of Page- 2208 of 3,00,000 Double addition w.r.t. amt. received from Mr. Ramesh Thakkar Double addition clearly emerges from Page-593 Of Paper-Book-II 32 IT(SS)A Nos.75 to 78/PUN/2022 AY Amount (Rs.) Nature of Error Submission PB-IV 2015-16 Note-4 of Page- 2208 of PB-IV 5,00,000 Receipt of erstwhile advance is added as unexplained income Erstwhile advance entry appears on Page-593 of PB-II (DIARY) and subsequent receipt appears on Page-599 of PB-II (DIARY). 2015-16 Note-5 of PB-IV 46,000 Rent income from Dollar-4-U already offered to tax Already offered to tax in regular return of income 2016-17 Note-2 on Page- 2220 of PB-IV 25,000 Receipt from Prabhudas Modi, of erstwhile advance is added as unexplained income Erstwhile advance entry appears on Page-627 of PB-II (DIARY) and subsequent receipt appears on Page-629 of PB-II (DIARY). 2016-17 Note-3 on Page- 2220 of PB-IV 6,00,000 Receipt from Mr. Borkar, to whom, erstwhile advance was given and then, amt weas received from him. Erstwhile advance entry appears on Page-618 of PB-II (DIARY) and subsequent receipt appears on Page-772 of PB-II (DIARY). 3. Paper relating to alleged loan of Rs. 2 CR to Mr. Jalan – AY 14-15 & AY 15-16 3.1. During the course of search, Page No 57 of Bundle No 13 was found and seized from the premises of M/s Modi Builders. On the said seized paper, several notings were found w.r.t some loan transactions. 3.2. The said Page No 57 is reproduced by the ld. AO atPara-7 on Pg-10 to Pg- 12 of order u/s 143(3) r.w.s 153A for AY 2014-15. Learned AO added Rs. 1.25 CR (i.e. alleged loan given of Rs. 2 CR LESS amounts received from Mr. Jalan of Rs. 0.75 CR) 3.3. Learned CIT(A) has also reproduced contents of the said seized page vide a TABLE given at Para 45.1 & 45.3 on Page-39 & 40 of the Appellate order. 33 IT(SS)A Nos.75 to 78/PUN/2022 Learned CIT(A) has given relief of Rs. 0.25 CR (i.e. Rs. 25 lacs) on account of amount received from Mr. Jalan in AY 2015-16 vide Para-67 on Page-55 of his appellate order. 3.4. As such, on an effective basis, addition which remains finally, is Rs. 1 CR. 3.5. Appellant has also submitted a copy of the Page no 57 in Annexure-1 of Synopsis submitted before the Honourable Bench for AY 2014-15 dated 14/12/2023. 3.6. Appellant, vide SYNOPSIS filed on 14/12/2023, has already made key submissions w.r.t. the said Page No. 57 of Bundle No. 13. The key points of the said SYNOPSIS are that: - No name of Mr Jalan on the said Page No. 57 of Bundle No. 13 - No corroboration of the alleged loan of Rs. 2 CR found in DIARY - Absence of mention of any specific date for loan of Rs. 2 CR - Receipt of Rs. 1.65 CR from Mr. Jalan (which stands offered to tax already) 3.7. Appellant has contended that, in absence of name of Mr. Jalan on the said Page No. 57 of Bundle No. 13, no any addition should take place any further. 3.8. Alternately, Appellant submits that, the following receipts from Mr. Jalan, which have been offered to tax already, may please be telescoped against the net remaining addition of Rs. 1 CR. 12/06/2014 - Rs. 20,00,000 - Bundle No 7, Page 87 (R S Modi – Jal. Ent) 16/06/2014 - Rs. 30,00,000 - Bundle No 7, Page 89 (R S Modi – J Ent.) 29/07/2014 - Rs. 10,00,000 - Bundle No 7, Page 112 (Jalan) 11/09/2014 - Rs. 5,00,000 - Bundle No 7, Page 135 (Jalan) ------------------ Rs. 65,00,000 ------------------ 3.9. The above contention of double taxation of income of Rs. 0.65 CR was raised by the appellant before the ld. CIT(A), which was dealt with in Para 65 and 66 on Page 53, 54 and 55 of the Appellate order. 3.10. The ld. CIT(A) did not accept the above request by observing that, above referred entries of loan return were not mentioned on seized paper No 57 of Bundle No 13. 34 IT(SS)A Nos.75 to 78/PUN/2022 3.11. If the DIARY is to be the basis for effecting additions, Rs. 1 CR addition was uncalled for, since, the assumed transaction of extending loan to Mr. Jalan is not appearing in the DIARY. 3.12. If Page No. 57 of Bundle No. 13 (along with DIARY) is to be the basis of addition above entries of Rs. 0.65 CR, since already taxed by the learned AO while framing original assessment order. The said amount of Rs. 0.65 CR ought to be removed from taxation to avoid double taxation. In other words, TELESCOPING of Rs. 0.65 CR ought to have been granted. 4. Paper relating to alleged cash transaction of Rs. 4.5 crores with Mr. Ghavate in AY 15-16: 4.1. During the course of search Page No 61 of Bundle No 14, was seized from the premises of M/s Modi Builders. The said page no 61 is reproduced by the ld. AO on Pg No 17 in his order u/s 143(3) r.w.s 153A for AY 2015-16. 4.2. Appellant has also submitted the copy of Pg No 61 asAnnexure-1 in Synopsis for AY 2015-16 submitted before the Honourable Bench on 14/12/2023. A copy of the said page nol. 61 of Bundle No. 61 of the seized papers, was also submitted for a quick review before the Honourable ITAT bench during the course of hearing. 4.3. On the said document, there were several notings, including an amount of Rs. 4.5 crore in the name of Mr. Ghavate. Appellant contended before the ld. AO and ld. CIT(A), that no any cash of Rs. 4.50 CR was received from Mr Ghavate. Appellant‟s contentions were turned down by the ld. AO, who treated the amount of Rs. 4.5 Cr as cash receipt from Mr. Ghavate on account of some land transaction and made an addition to the income of appellant vide Para 7 on Pg 18 of his order u/s 143(3) r.w.s 153A for AY 2015-16. 4.4. Before learned CIT(A), it was also stated that, many entries of CHQ payments as well as cash payments had not taken place. Detailed submissions in this regard are reproduced by the learned CIT(A) at Para 75 opnwards, on Page-61 to Page-65. 4.5. However, learned CIT(A), vide Para 77.4, confirmed the addition of Rs. 4.50 CR, by observing that, once some entries on the said Page No. 61 are found in regular books, all other entries ought considered as TRUE, etc. 4.6. Vide Synopsis filed before the Honourable Bench on 14 th Dec ember 2023, following submissions for following contentions were made - - No corroboration with DIARY - No corroboration with any land transaction found in search - Non-making of addition in hands of Mr. Ghavate by learned FAO 35 IT(SS)A Nos.75 to 78/PUN/2022 4.7. After the conclusion of CIT(A) proceedings u/s 250 in case of appellant, proceedings u/s 147 were carried out in case of Mr. Rajaram Ghavate for AY 2015-16, wherein, the entire issue of alleged land transaction and cash payment to M/s Modi Builders was dealt with by the ld. FAO, who passed a clean order u/s 147 dt. 09/05/2023, without making any addition in hands of Mr. Ghavate and after conspicuous consideration of all evidence and facts on record. The findings of the ld. AO are given in order u/s 147 of Mr. Ghavate submitted in Paper Book-III of AY 2013-14 on Pg-2064 to Pg-2074. 4.8. Finally, Appellant submits as under – - The said Page No. 61 of Bundle No. 13 was a mere estimation of plausible funds sources / applications, which includes CHQ & Cash transactions - Total of applications written on left side of the said Page is erroneous by a huge difference either of Rs. 249 lacs or of Rs. 81.6 lacs or of Rs. 105 lacs. All these plausible totals are submitted before the Honourable Bench vide a separate working. Copy of the same is enclosed herewith for sake of completeness and marked as Schedule-2. - In the said Page No. 61, many futuristic entries of expenses for JAN / FEB / MARCH were written, which indicates that, the said scribbled Page No. 61 was not sacrosanct, but a mere futuristic working of plausible sources & applications. - Many entries on the said Page No. 61 are not found in DIARY - Some of the entries did not have any narration / particulars of application, etc. 4.9. Appellant has made elaborate submissions before lower authorities. Appellant submits that, endeavour for preparing the said Page No. 61 was an futuristic exercise of tallying all plausible present and future sources of inflow of funds, and plausible applications of funds. As such, assumption that, all entries on the said page represent past & concluded transactions is erroneous. 4.10. It is against any human probability that, large sum of cash of Rs. 4.50 CR gets extended without any fructified land transaction taking place, or which has already taken place. It has already been submitted by the assessee, and confirmed by Mr. Ghavate, that, no any land purchase-sale transaction has taken place with any members of the Modi family or with any entity of Modi group. Learned I-T authorities have not taxed the CHQ receipt of Rs. 2.50 CR in absence of any actual transaction. 4.11. Even the CHQ of Rs. 2.50 CR of Mr. Ghavate has been used for such purposes, which are different than the outflow purposes mentioned on the said Page No. 61. Reason cited by learned CIT(A), vide observations in Para-77.4 are incorrect considering the facts of the case. As such, factual reality of 36 IT(SS)A Nos.75 to 78/PUN/2022 situation, and entries on the said Page No. 61 of Bundle No. 13 are in major disagreement. 4.12. Appellant submits, a mere futuristic exercise of funds tally, replete with totalling errors, having many mis-matches with DIARY and having factual variations as regards actual funds use; ought to have been appreciated in proper perspective, and ought to have been left at that on logical reasoning. It is submission of Appellant that, transaction with Mr. Ghavate was expected to be concluded and at such conclusion point, some funds over and above CHQ amt of Rs. 2.50 CR was expected to be received. Since, no such deal took place, no question can arise w.r.t. actual transaction. 5. Paper relating to alleged undisclosed transaction of Rs. 28 Lakhs pertaining to Ramesh Builders (AY 2015-16) : 5.1. During the course of search action, Page No 61 of Bundle No 14, was seized from the premises of M/s Modi Builders. The said page no 61 is reproduced by the ld. AO on Pg No 17 in his order u/s 143(3) r.w.s 153A for AY 2015-16. Appellant has also submitted the copy of Pg No 61 in as Annexure-1 in Synopsis for AY 2015-16 submitted before the Honourable Bench on 14/12/2023. 5.2. On the said document, there were several noting, including an amount of Rs. 28 Lakhs in the name of M/s Ramesh Builders. Appellant contended, before the ld. AO and ld. CIT(A), that the said amt of Rs. 28 lacs was received by CHQ from Mr. Ramesh Thakkar and Mr. Mahesh Thakkar, who are equal partners in M/s Ramesh Builders. As such, Appellant has received two CHQ.s of Rs. 14 lacs each on following dates – - On 9/7/2014 – Rs. 14 lacs (CHQ deposited in Bank of Maharashtra) - On 16/6/2014 – Rs. 14 lacs (CHQ deposited I Syndicate Bank) The copies of the bank statements are submitted by appellant as Annexure-2 in Synopsis for AY 2015-16 submitted before the Honourable Bench on 14/12/2023. 5.3. Since the two partners, Mr. Ramesh Thakkar and Mr. Mahesh Thakkar represent M/s Ramesh Builders, Appellant has noted the entry in their name of M/s Ramesh Builders. It will be relevant to note that, on the said Page No. 61, there exist CHQ entries for source of funds / inflow of funds too. (For example, Rs. 2.5 CR received from Mr. Ghavate). Hence, the amt of Rs. 28 lacs can‟t be presumed as any CASH receipt straightway. 5.4. Appellant also submits that, assumed cash receipt of Rs. 28 lacs as against actual bank receipt of Rs. 28 lacs will be a case of far reached coincidence. Such an illogical assumption ought not to be made. 5.5. Appellant has also submitted that the said alleged cash receipt of Rs. 28 lacs is not existing in DIARY seized during course of search. 37 IT(SS)A Nos.75 to 78/PUN/2022 5.6. Appellant‟s contentions were turned down by the ld. AO, who treated the amount of Rs. 28 lakhs as “undisclosed income” from M/sRamesh Builders and made an addition to the income of appellant vide Para 7 on Pg 19 of his order u/s 143(3) r.w.s 153A for AY 2015-16. Further, the ld. CIT(A) did not accept appellant‟s contentions, and sustained the addition made the ld. AO vide Para 78 on Pg 68 of order u/s 250. 5.7. On a totality, Appellant submits that, addition of Rs. 28 lacs allegedly received in cash from M/s Ramesh Builders is a totally incorrect addition. 6. Paper relating to alleged undisclosed transaction of Rs. 28 Lakhs pertaining to M/s Saakar (AY 2015-16): 6.1. During the course of search action, a Page No 61 of Bundle No 14, was seized from the premises of M/s Modi Builders. The said page no 61 is reproduced by the ld. AO on Pg No 17 in his order u/s 143(3) r.w.s 153A for AY 2015-16. Appellant has also submitted the copy of Pg No 61 in as Annexure-1 in Synopsis for AY 2015-16 submitted before the Honourable Bench on 14/12/2023. 6.2. On the said document, there were several notings, including an amount of Rs. 27 Lakhs in the name of M/s Saakar. Appellant contended, before the ld. AO and ld. CIT(A), that amount of Rs. 27 Lakhs was received in CHEQUE from M/s Saakar Corporation in bank account of M/s Modi Landscapes, being share of M/s Modi Landscapes in the joint venture entered into with Saakar Corporation. The copies of the bank statements wherein the amount of Rs. 27 Lakh is received is submitted by appellant as Annexure-3 in Synopsis for AY 2015-16 submitted before the Honourable Bench on 14/12/2023. It will be relevant to note that, name of M/s SAAKR also appears in the bank statement given at Page-?? Of Paper-Book-??. 6.3. Thus, appellant contended before the ld. AO and ld. CIT(A) that the amount of Rs. 27 lakhs was received by proper banking channel and already offered to tax in hands while filing the return of income, and thus, was not “undisclosed income”. 6.4. Appellant also contended that, no any cash receipt entry relating to M/s SAAKRAR was existing in the parallel cash book / DIARY, and as such, no addition on this count be made. 6.5. Appellant‟s contentions were turned down by the ld. AO, who treated the amount of Rs. 28 lakhs as “undisclosed income” from M/sSaakarand made an addition to the income of appellant vide Para 7 on Pg 19 of his order u/s 143(3) r.w.s 153A for AY 2015-16. 6.6. Further, the ld. CIT(A) did not accept appellant‟s contentions, and sustained the addition made the ld. AO vide Para 79.2 on Pg 69 of order u/s 250 dated ----. 38 IT(SS)A Nos.75 to 78/PUN/2022 6.7. It is submitted, I-T authorities have added the said amount of Rs. 27 lacs merely on basis of assumption. Appellant prays that, the said addition ought to be deleted. 7. Interest expenses appearing in DIARY – (relevant for all four years) 7.1. In the Appellant‟s DIARY, some cash outflow entries exist, which are stated as “interest on loans”. Ledger extract of such “interest on loan” is given at Page-2291 to Page-2293 of Paper-Book-V. Total of such “interest on loan” was Rs. 37,30,830 over the block period of four years. 7.2. Now, as per facts, all cash receipts in DIARY have been accepted as “own money / own income” of the Appellant, and, no any cash loan remained for adjudication any more. 7.3. Now, in absence of any unaccounted cash loan, entries related to payment of interest on such loans is clearly an incorrect application. 7.4. As such, considering the present situation, all cash outflow entries related to “interest on loans” ought to be considered as “own money” of the Appellant. Proceeding further, the said amount of Rs. 37,30,830 ought to be considered for overall TELESCOPING of unexplained cash sources & it‟s applications. 7.5. For sake of simplicity, the said cash outflows in the ledger “interest on loans” amounting to Rs. 37,30,850 is amended and considered as “own money”. For TELSCOPING purpose, the said amounts are considered as paid to Mr. Ramesh Modi, so that, the amt of Rs. 37,30,830 will automatically enter into working of TELSCOPING. 8. All-out 360 degrees Enquiry of learned AO – (relevant for all four years) – During the course of assessment proceedings, learned AO has made an elaborate enquiry as regards acquisition of any immovable property, other than the entries appearing in the regular books and in the DIARY. For this purpose, learned AO had made wide enquiries with the Registration Authorities in Maharashtra and Gujarat regarding any sale / purchase of immovable property made by M/s Modi Builders group, including family members. It is the belief of the Appellant that no any irregular property deals were reported by any of the registering authorities. In fact, no addition has taken place on the basis of any such information received from Registrar‟s offices. Appellant has submitted an email correspondence with the ld. AO for sharing the results of the search and replies from the Registration Authorities on Pg-2161 to Pg-2163 of Paper Book-III for AY 2013-14. 9. TELESCOPING – (relevant for all four years in appeal) - Appellant, vide various grounds of appeal for every year, has requested for grant of benefit of TELESCOPING, i.e. benefit of cash withdrawals by any of the family member 39 IT(SS)A Nos.75 to 78/PUN/2022 of Modi family or, business entity of Modi group, or, business associate of Modi group. Appellant has already carried out detailed exercise of such TELSCOPING vide an EXCEL sheet, after considering all these grouped parties, along with day-totals, along with Running cumulative balance and peak negative balance working. Same is given for respective years, as follows– Page-2184 for AY 2013-14 Page- 2197 – AY 2014-15 Page-2210 – AY 2015-16 Page-2223 – AY 2016-17 Page-2228 – AY 2012-13 to AY 2016-17 (with c/f & b/f of Running balances) Appellant has been requesting for benefit of set-off / Telescoping before the lower authorities. Unfortunately, the detailed exercise could not be carried out and submitted before learned AO. Appellant prays that, the said exercise be considered by Honorable ITAT, or, related grounds of appeal may please be restored to the learned AO for considering the detailed working. 20. He accordingly submitted that appropriate orders may be passed by the Bench. 21. The Ld. DR on the other hand, filed the following written submissions: “Being aggrieved with the order of the CIT(A), the assessee has filed the instant appeal before the Hon‟ble ITAT, Pune. Before the CIT(A), the AR of the Appellant stated that for the Appellant it was not possible to link individual transactions to various members/concerns of the Modi group and for the sake of simplicity, whole of undisclosed income was declared in the hands of the Appellant. As regards, the re-deposition of the cash claimed to have been done by members other than the one who had taken the cash in the 1st instance, the CIT (A) did not allow relief to the Appellant as no evidence was produced to substantiate such correlation. It is to submit that the assessee appellant is trying to produce fresh evidence which was never before the lower authorities in the form of various charts as produced in Paper Book No. III & IV to substantiate such correlation. Further, it is not substantiated with respect to each entry of debit by respective credit entry from the same person. Assessee is a firm and not a AOP wherein entries of respective members can be jointly and severally explained. The ground of telescoping taken by the appellant on the basis of such facts / evidences which were never before the lower authorities need not be admitted in the light of the decision of the Hon'ble Supreme Court in the case of NTPC Ltd vs CIT [ (1998) 97 Taxman 358 (SC) ]. The copy of the decision in M/s NTPC Ltd vs CIT is as per annexure "A" to this submission. The Ld. AO and Ld. CIT(A) has already granted relief on the basis of facts that were produced and substantiated before them. At the one end the 40 IT(SS)A Nos.75 to 78/PUN/2022 appellant has been expressing its concern with regard to reconciliation of cash receipts and payments. Kind attention is drawn to para 9.2 at page 5 of the Ld. CIT(A) Order. During the post search enquiry in written submission vide letter dated 15.03.2016 it was submitted that, it is humanly impracticable to explain the nature and relevance of every receipt and payment. However, during the course of proceeding before the Hon'ble Tribunal, an attempt is being made to take the benefit of telescoping on the same material which was earlier humanly impracticable to correlate and has neither been correlated even now, by way of submitting an explanation in the form of circular transactions of receipts and payments within the members of the Modi family. It needs to be noted that there is no correlation between receipts and payments vis-a-vis individual members of the family and with respect to the Cash Book of the firm. It is to state and submit that the Ld. CIT(A) has deliberated and addressed all the issues by taking into consideration all the facts on records and the Revenue supports the order of the Ld. CIT(A) and prays that the same may be upheld. In view of the above, it is humbly submitted that the above written submission may be taken on record and appeal of the assessee be dismissed. It is prayed accordingly.” 22. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed on behalf of the assessee. We find Shri Ramesh Modi during the course of post-search enquiry in his statement had declared undisclosed income of Rs.6,36,42,800/- in the hands of himself, Shri Bharat Modi and Modi builders for different assessment years, the details of which are given at para 8 of the impugned order. However, while filing the return of income the entire additional income of Rs.6,36,42,800/- was offered in the hands of the assessee firm for various assessment years, the details of which are already given at para 9 of the impugned order. We find the Assessing Officer during the course of assessment proceedings, after considering the various submissions made by the assessee determined the undisclosed income of the assessee for AYs 2012-13 to 2016-17 at Rs.11,95,25,108/-. After considering the additional income declared at Rs.6,36,42,800/-, he made the addition of Rs.5,58,90,877/- for different assessment years i.e. from A.Y. 2012-13 41 IT(SS)A Nos.75 to 78/PUN/2022 to 2016-17, the details of which are given at para 11 of the impugned order. We find the Ld. CIT(A) for assessment year 2013-14 deleted an amount of Rs.19,80,000/- and sustained the balance amount of Rs.1,90,71,302/-, the details of which are already given at para 13 of the impugned order. It is the submission of the Ld. Counsel for the assessee that since the transactions listed in the diary seized during the course of search pertain to Modi family members, Modi group entities and Modi group associates, therefore, all the credits and debits in the diary should be considered on totality basis for working out peak credit on telescopic principle. It is his alternate argument that since Shri Ramesh Modi and Shri Bharat Modi are the key stakeholders of all the entities of Modi group, therefore, such credit / telescopic benefit should be considered. It is also the submission of the Ld. Counsel for the assessee that the entries relating to payment of interest appearing in the diary should be considered for working out the peak credit / telescopic principle since all the unexplained loan entries are considered as undisclosed income of the assessee either at the time of filing of 153A return or during the course of assessment. Finally, it is the submission of the Ld. Counsel for the assessee that there are certain errors committed by both the assessee as well as the Assessing Officer where certain amounts which were already offered to tax have been added again which amounts to double addition. Similarly in some cases certain amounts which are mentioned in the annexure but were not found in the diary which is the basis for the addition and therefore same be deleted. 42 IT(SS)A Nos.75 to 78/PUN/2022 23. We find some force in the above arguments of the Ld. Counsel for the assessee. It is an admitted fact that the diary, which was seized during the course of search contains transactions relating to Modi family members, Modi group entities and Modi group associates which were scrutinized by the Assessing Officer and accordingly, he determined the total unexplained income at Rs.11,95,25,108/-. After considering the additional income of Rs.6,36,42,800/- declared by the assessee, he made the balance addition of Rs.5,58,90,877/- for different assessment years. For the A.Y. 2013-14, such addition was determined at Rs.2,10,51,302/- out of which the Ld. CIT(A) deleted an amount of Rs.19,80,000/- and sustained the balance amount. The Revenue is not in appeal for the said deletion. In our opinion, since the diary so seized, which is the basis for addition, contains various entries relating to Modi family members, Modi group entities and Modi group associates, therefore, the credits and debits in the diary in the names of Modi family members, Modi group entities and Modi group associates should be considered on a totality basis for calculating peak credit on telescopic principle. 24. We further find some force in the arguments of the Ld. Counsel for the assessee regarding certain discrepancies. We find there is an amount of Rs.10,00,000/- received from Mr. Mulla Patil Kashil which is added as unexplained income. However, the entry appears on page 904 of paper book-II of diary and subsequent receipt appearing on page 916 of paper book-II. Similarly, the rent deposit of Rs.1,51,300/- which was forfeited has already been offered to tax in the regular return however, the same has been added by the Assessing 43 IT(SS)A Nos.75 to 78/PUN/2022 Officer which amounts to double addition. We further find an amount of Rs.1,25,000/- which is mentioned in the annexure but has not been found in the diary. Since the diary entries are the basis for all the additions made by the Assessing Officer, therefore, this addition in our opinion, is incorrect. Similarly, an amount of Rs.14,00,000/- relating to assessment year 2014-15 appears to be double addition if we consider pages 190 and 191 of paper book-II. 25. Similarly, for assessment year 2015-16, we find an amount of Rs.3,00,000/- appears to be double addition as per page 593 of paper book-II. An amount of Rs.5,00,000/- which is added as unexplained income appears at page 593 of paper book-II and subsequent receipt appears on page 599 of paper book-II. We find an amount of Rs.46,000/- which has been added by the Assessing Officer has already been offered to tax in the regular return of income. 26. Similarly, for assessment year 2016-17, we find an amount of Rs.6,00,000/- was received from Mr. Borkar, to whom advance was given earlier and such details can be found from page 618 of paper book-II (diary) and subsequent receipt appears on page 722 of paper book-II i.e. diary. 27. So far as the alleged loan of Rs.2 crore to Mr. Jalan is concerned, a perusal of the seized paper at page 57 of bundle – 13 shows that no name of Jalan is appearing, there is no specific date and no corroboration of alleged loan of Rs.2 crore found in the diary. An amount of Rs.1.65 crore which was received from Mr. Jalan has already been offered to tax. Therefore, addition to this extent again 44 IT(SS)A Nos.75 to 78/PUN/2022 amounts to double addition. Similarly, in the case of Mr. Ghavate which is the basis for addition of Rs.4.5 crores being the alleged cash transaction, it is seen that there is no corroboration of any land transaction found during the course of search and no such addition has been made in the hands of Mr. Ghavate even in the re- assessment proceedings in his hands. There are also certain other irregularities / discrepancies found in the assessment order which have been narrated by the Ld. AR in his written submissions. 28. Considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that the matter requires re-adjudication at the level of the Assessing Officer who shall consider and allow telescoping benefit to the assessee since the diary which was seized during the course of search contains various entries relating to Modi family members, Modi group entities and Modi group associates and all the credits and debits of above group were found from the seized diary. Similarly, the Assessing Officer shall verify the items which were already offered to tax in the return of income and upon satisfaction that it amounts to double addition, shall delete those additions. The Assessing Officer is also directed to consider the entries relating to the payment of interest appearing in the diary for working out the peak credit / telescopic benefit since all the unexplained loan entries are considered as undisclosed income. The Assessing Officer shall also look into the fact that in case of Mr. Jalan an amount of Rs.1.65 crore has already been offered to tax and if that be so, the addition to that extent may be deleted as it amounts to double addition. Similarly, in case of Mr. Gavate, it was 45 IT(SS)A Nos.75 to 78/PUN/2022 argued that no addition has been made in his hands in the re-assessment proceedings. If that be so, how the addition can be made in the hands of the assessee needs to be examined and if no such addition has been made in his hands, then no addition can be made in the hands of the assessee also. In the light of the above directions, we remit the matter to the file of the Assessing Officer for all four years for adjudication afresh. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. The grounds raised by the assessee for all years are accordingly partly allowed for statistical purposes. 29. In the result, all the four appeals of the assessee are partly allowed for statistical purposes. Order pronounced in the open Court on 26 th July, 2024. Sd/- Sd/- (ASHTA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दिन ांक Dated : 26 th July, 2024 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 46 IT(SS)A Nos.75 to 78/PUN/2022 S.No. Details Date Initials Designation 1 Draft dictated on 25.06.2024 Sr. PS/PS 2 Draft placed before author 26.06.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order
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