MANSI INFRABUILD PVT. LTD.,AHMEDABAD V. THE DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD

ITSSA 110/AHD/2021

AI Insights

The case involves Mansi Infrabuild Pvt. Ltd., which faced scrutiny under sections 68 and 153C of the Income Tax Act following a search operation that uncovered incriminating documents. The primary issues revolved around the unexplained cash credits in the company's accounts and the procedural validity of the assessments made under the aforementioned sections. The Tribunal examined the additions made by the Assessing Officer and the subsequent confirmations by the CIT(A), focusing on whether the additions were supported by incriminating material found during the search and whether the procedural requirements for invoking section 153C were met.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24998 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 22-10-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 23-08-2021
• Other Referred Cases: PCIT v. Jay Ambey Aromatics, Pr. CIT v. Abhisar Buildwell (P.) Ltd., PCIT v. Saroj Sudhir Kothari, PCIT v. Panchmukhi Management (P.) Ltd., Sanjay R. Shah v. ITO, Gautambhai A. Parmar v. Jt. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RIGNESH DAS
• Assessee Lawyers: SURESH GANDHI; SAKAR SHARMA
• Keywords: Additional evidence; Revenue expenditure; Corroborative evidences; Unexplained cash credit; Unexplained investment; Document seized; Documents seized; Onus to prove; Capital expenditure; Principle of natural justice; Search and seizure; Source of fund; Bogus Share capital; Share purchase agreement; Bogus
• Section: 143(3); 142(1); 271(1)(c); 153; 132; 153A; 139(1); 68; 131; 22; 69; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER I.T(SS).A. Nos.110 to 112 & 127/Ahd/2021 (A.Ys.: 2010-11 to 2013-14) Mansi Infrabuild Pvt. Ltd., 210, Anal Apartment, Nr. Commerce Six Road, Navrangpura, Ahmedabad-380009 Vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Ahmedabad [PAN No.AAGCM2906E] (Appellant) .. (Respondent) Appellant by : Shri Suresh Gandhi & Shri Sakar Sharma, A.Rs. Respondent by: Shri Rignesh Das, Sr. DR Date of Hearing 22.10.2024 Date of Pronouncement 22.11.2024 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: These appeals filed by the Assessee against the order of Commissioner of Income Tax (Appeals)-12 (in short “CIT(A)”, Ahmedabad vide separate orders dated 31.01.2020 and 28.07.2020 passed for A.Ys. 2010-11 to 2013-14. Since common facts and issues for consideration are involved for all the years under consideration before us, all the appeals filed by the assessee for the aforesaid Assessment Years are being taken up together. Condonation of Delay: 2. At the outset, we observe that the appeals filed by the assessee in IT(SS)A Nos. 110 to 112/Ahd/2021 & IT(SS)A No. 127/Ahd/2021 are time barred by 331 days to 492 days. As all the appeals before us have been delayed due to covid pandemic, so we are hereby condoning the delay for all the assessment years. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 2– We shall first deal with Assessee’s appeal for Assessment Year 2010-11 (IT(SS)A No. 110/Ahd/2021) 3. The assessee has taken the following grounds of appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.1,00,000/- originally made by the AO, which was in respect of increase in share capital, treating the same as unexplained cash credit under section 68 of the Act. 2. Without prejudice and through this additional legal ground, the Appellant challenges the addition made by the AO without the same having any base or co-relation with the findings of the underlying search and by ignoring the fact of this being a non- abated year. 3. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 153C r.w.s. 153A r.w.s. 143(3) of the Act. He did these clearly against the provisions of law, as interpreted by various judicial authorities.” 4. The brief facts of the case are that a search operation was carried out under section 132 of the Income Tax Act, 1961 (Act), at the residence of Shri Vikas A. Shah on January 3, 2013, which led to the discovery of incriminating documents pertaining to M/s. Mansi Infrabuild Pvt. Ltd. These documents were seized from his residence at 210-310, Aanal Flats, Navrangpura, Ahmedabad. The seized material, detailed in Annexure-X, led to the centralization of the case and the issuance of a notice under section 153C of the Income Tax Act on February 27, 2015. This notice, served on the assessee on March 4, 2015, required the assessee to file return of incomes for the assessment years 2009-10 through 2014-15. The reason for issuing the notice was based on the fact that documents seized during the search were found to be related to M/s Mansi Infrabuild Pvt. Ltd., a company managed and controlled by Shri Vikas A. Shah and his wife Smt. Chhaya Vikas Shah. These documents included a suspense account for the period from April 1, 2011, to March 15, 2012, and papers concerning a payment of Rs. 10 lakh IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 3– made by M/s Mansi Infrabuild Pvt. Ltd. for a long-term lease of immovable property in Bangalore. The Assessing Officer observed that Shri Vikas A. Shah had also admitted in his statement recorded during the search that the documents belonged to M/s Mansi Infrabuild Pvt. Ltd. Consequently, the notice under section 153C was issued to the assessee company. In response to this, the assessee filed a letter on June 8, 2015, requesting that the original return filed under section 139(1) for the current assessment year be treated as the return filed under section 153C. Subsequently, notices under sections 143(2) and 142(1) were issued seeking further details and documents, including the books of accounts, to verify the nature of the transactions related to the seized documents. During the assessment, the Assessing Officer noted that the assessee had introduced a share capital of Rs. 1,00,000/- in the first year of incorporation. The share capital was reportedly contributed equally by Shri Vikas A. Shah and Smt. Chhaya Vikas Shah, with each contributing Rs. 50,000/-. The AO sought evidence to substantiate the source of this share capital, and asked the assessee to submit details such as bank passbooks, balance sheets of the shareholders, and the source of funds. In response, the assessee submitted a reply on December 11, 2015, stating that 5000 equity shares of Rs. 10 each had been allotted to both Shri Vikas A. Shah and Smt. Chhaya Vikas Shah, with each shareholder contributing Rs. 50,000/- in cash. The assessee submitted a cash book indicating that Shri Vikas A. Shah had withdrawn Rs. 11,04,056/- from his bank account during the financial year 2009-10, part of which was used to pay the share capital. The assessee also provided details of the taxable income of both shareholders, claiming that the share capital was supported by the cash withdrawal and subsequent investment in the company. However, the AO found this explanation unsatisfactory. The AO noted that during the search, no “cash book” for Shri Vikas A. Shah was IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 4– found, and no cash book had been produced during the assessment proceedings in his individual case. Furthermore, the evidence provided by the assessee, including the printout of a cash book prepared afterwards, appeared to be fabricated. The AO pointed out that the cash withdrawal of Rs. 50,000/- from Shri Vikas A. Shah’s account could not be directly linked to the share capital contribution made to the company. Therefore, the AO concluded that the share capital of Rs. 1,00,000/- could not be explained, as the source of the funds remained unsubstantiated. 5. In appeal before Ld. CIT(A), the assessee submitted that a complete cash book had not been maintained by the shareholders, and only the bank transactions were provided to the AO. The assessee further submitted that large additions had been made in the individual assessments of Shri Vikas A. Shah and Smt. Chhaya V. Shah, and that these additions should be allowed to offset the share capital contribution under the concept of telescoping. However, the AO had rejected this argument, noting that the additions in the individual assessments had not been accepted by the assessee, and were still under dispute. Since the finality of these additions had not been established, the AO held that telescoping could not be applied without a complete cash book, which the assessee had failed to provide for the year under consideration. Ld. CIT(A) observed that the AO found the assessee's claim that the creditworthiness of the shareholders was established by their past tax returns unconvincing. In the case of Smt. Chhaya V. Shah, the income declared in her returns ranged from Rs. 1,52,890/- in A.Y. 2008-09 to Rs. 2,67,480/- in A.Y. 2011-12, which the AO felt was insufficient to substantiate her capacity to contribute the cash amounts in question. Similarly, there was no evidence on record to show that Shri Vikas A. Shah had filed income tax returns. In another submission, the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 5– assessee gave reference to a statement made by Shri Vikas A. Shah under section 131 of the Income Tax Act, in which he stated to have received a cash advance of Rs. 1,25,00,000/- from Shri Ghanshyam B. Patel for the sale of land at various survey numbers. Additionally, Shri Vikas A. Shah stated that he had received Rs. 5,00,000/- each from Praveen Pansuriya and Shri Harshadbhai Bopal as advances for land transactions. Upon reviewing the material on record, the Ld. CIT(A) observed that the AO had noted that these advance payments were not reflected in the cash book submitted by the assessee. Furthermore, the assessee failed to provide any documentary evidence, such as sale agreements or proof of ownership of the lands purportedly sold by Shri Vikas A. Shah. The Ld. CIT(A) held that in light of these facts, AO had correctly concluded that the claims were self-serving and lacked supporting documentation, making them unacceptable. The reliance on these claims, without proper verification, could not be considered credible. In light of these findings, Ld. CIT(A) held that the AO was correct in holding that the addition made to the share capital of Rs. 1,00,000/- was unexplained credits under Section 68 of the Income Tax Act. As a result, Ld. CIT(A) dismissed the ground of appeal raised by the assessee, confirming the addition of Rs. 1,00,000/- as unexplained credits in the company's books. 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). At the outset, the counsel for the assessee submitted that he shall not be pressing for Ground no. 3 and accordingly, the same is being dismissed as \"not pressed\". Further, the counsel for the assessee also submitted that similar Grounds of Appeal raised by the assessee with respect to challenge of the Assessing Officer’s jurisdiction to invoke the provisions of section 153C of the Act for the other assessment years before us would also not be pressed. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 6– Accordingly, the same are being dismissed as \"not pressed\" for the assessment years under consideration before us. 7. Further, with regards to Ground Number 1, the counsel for the assessee submitted that this is a case of unabated assessment year, and the additions made by the assessing officer and confirmed the Ld. CIT(A) are not based on any incriminating material seized during the course of search and since the assessment being an unabated assessment year, such addition/disallowance cannot be sustained in light of various judicial precedents on the subject. 8. In response, DR placed reliance on the observations made by assessing Officer in Ld. CIT(A) in their respective orders. 9. We have heard the rival contentions and perused the material on record. 10. On going to the facts of the instant case, we observe that the additions have been made on the basis of certain share application money received by the assessee company amounting to ₹ 1 lakhs, from its Directors/promoters, being the first year of its incorporation. However, while making the addition, we observe that there is no specific reference to any “incriminating material” found during the course of search. It is a well settled law that in case of unabated assessment year, no addition can be sustained under section 153A/C of the Act, in absence of any incriminating material found during the course of search. In the case of PCIT v. Jay Ambey Aromatics 156 taxmann.com 691 (SC), the High Court held that where assessment of assessee had attained finality prior to date of search and no incriminating documents or materials had been found and seized at time of search, no addition could be made under section 153A as case of assessee was of non-abated assessment. Supreme IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 7– Court held that in view of decision of Supreme Court in case of Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399/293 Taxman 141/454 ITR 212, no case was made out for interference and, thus, Special Leave Petition against High Court's order was to be dismissed. In the case of PCIT v. Saroj Sudhir Kothari 154 taxmann.com 360 (SC), the High Court by impugned order held that no addition can be made in respect of unabated assessments which have become final if no incriminating material is found during search. Supreme Court held that since the matter is squarely covered by judgment in Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399/293 Taxman 141/454 ITR 212 (SC) and thus, SLP filed by revenue against impugned order of High Court was to be dismissed. In the case of PCIT v. Panchmukhi Management (P.) Ltd. 153 taxmann.com 298 (SC), Hon'ble Supreme Court dismissed SLP against order passed by High Court that where AO made protective additions in case of assessee based on share certificate of assessee found pursuant to search and seizure carried out in case of M group (issuing company), evidencing that investor companies were bogus/accommodation entry providers, however, genuineness of share capital had been accepted both by Commissioner (Appeals) and Tribunal and also there was no live link between seized material and additions made, assumption of jurisdiction by AO was erroneous. In the case of PCIT v. Abhisar Buildwell (P.) Ltd. 150 taxmann.com 257 (SC), Hon'ble Supreme Court upheld the principle that in respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during course of search under section 132 or requisition under section 132A. Now coming to the instant facts, we observe that both the assessment order as well as order passed by Ld. CIT(A), there is no specific reference to any material found during the course of search, on the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 8– basis of which the additions have been made/sustained. The fact that the new company and share capital has been introduced by two of its Directors, it is a fact which is coming from the financial statements of the company itself. Therefore, it is seen that the present additions have not been made on the basis of any incriminating material found in course of search and therefore, in our considered view, the aforesaid addition made by the assessing officer is not liable to be sustained. 11. In the result, Ground No. 1 of the assessee’s appeal is allowed. Assessee’s Appeal for Assessment Year 2011-12 (in IT(SS)A No. 111Ahd/2021) 12. The assessee has taken the following grounds of appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.27,42,000/-, as originally made by the AO on protective basis, in respect of share application money received from Vikas Shah and Chhaya Shah, treating the same as unexplained income under section 68 of the Act. 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs.12,650/-, as originally made by the AO, in respect of expenditure on account of increase in authorized share capital. 3. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.10,00,000/-, as originally made by the AO under section 69 of the Act. 4. Without prejudice through this additional legal ground, the Appellant challenges the addition made by the AO without the same having any base or co-relation with the findings of the underlying search and by ignoring the fact of this being a non-abated year. 5. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 153C r.w.s. 153A r.w.s. 143(3) of the Act. He did these clearly against the provisions of law, as interpreted by various judicial authorities.” IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 9– 13. The background of the case remains the same for all assessment years under consideration before us. The brief facts of the case are that a search operation carried out under section 132 of the Income Tax Act, 1961 (Act), at the residence of Shri Vikas A. Shah on January 3, 2013, which led to the discovery of incriminating documents pertaining to M/s Mansi Infrabuild Pvt. Ltd. The seized material, detailed in Annexure-X, led to the centralization of the case and the issuance of a notice under section 153C of the Income Tax Act on February 27, 2015 asking the assessee to file returns of income for assessment years 2009-10 to 2014-15. 14. During the course of the course of assessment proceedings for assessment year 2011-12, the Assessing Officer made three additions, which have been discussed in the succeeding paragraphs: Addition under section 68 of the Act on account of unexplained income towards share application money: 15. During the course of the course of assessment proceedings, the Assessing Officer upon reviewing the balance sheet of the assessee, noted that the assessee had received fresh share application money amounting to Rs. 27,42,000/- during the year, and the authorized share capital had increased from Rs. 1,00,000/- to Rs. 50,00,000/-. Following this, the AO issued a notice under Section 142(1) of the Act asking the assessee to provide detailed information about the share application money received, including the names, PANs, bank statements, income tax returns (ITRs), and balance sheets of the individuals who contributed the money. The Assessing Officer also requested the assessee to explain the status of the share application money and whether any ROC expenses related to the increase in authorized capital had been IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 10– capitalized. In response, the assessee submitted that the share application money of Rs. 27,42,000/- had been received from Shri Vikas A. Shah, the company’s director. The AO, however, found this reply insufficient and asked the assessee to provide further evidence such as the cash book, bank passbook, ITR, and balance sheet of Shri Vikas A. Shah to substantiate the source of the share application money. Additionally, the Assessing Officer required the assessee to submit the complete books of accounts for the financial year 2010- 11. The assessee submitted ledger accounts of the share application money, a bank statement of Shri Vikas A. Shah, and his ITR. However, the AO found the submission unsatisfactory, as the requested balance sheet of Shri Vikas A. Shah for the relevant financial year was not provided. The assessee submitted that the share application money was sourced from an unsecured loan given by Shri Vikas A. Shah, which had been reflected in the bank account deposits and credit entries for the assessment year 2011-12. However, this explanation was deemed insufficient by the AO, since as per the Assessing Officer, it remained unclear whether the unsecured loan had been properly reflected in Shri Vikas A. Shah's balance sheet for FY 2010-11. As a result, the AO held that since the source of the share application money could not be satisfactorily explained, the amount of Rs. 27,42,000/- was treated as unexplained income of the assessee and added to the total income for the year u/s 68 of the Act. Disallowance of expenditure increase of authorised share capital 16. During the course of during the course of assessment proceedings, the assessee was asked to provide details about the increase in authorized share capital during the year, along with any ROC (Registrar of Companies) expenses incurred for this increase, and whether such expenses were capitalized. The Assessing Officer observed that in its reply dated 15.10.2015, IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 11– the assessee did not clarify whether the ROC expenses related to the increase in authorized share capital were capitalized. Upon reviewing the balance sheet, the Assessing Officer found that the authorized share capital had been increased from Rs. 1,00,000/- to Rs. 50,00,000/- during the year, and the company had incurred ROC expenses of Rs. 1,26,500/- for this purpose. However, the assessee had only claimed Rs. 12,650/- of the ROC expenses as a revenue expense in the computation of income, while the remaining amount was treated as capital expenditure. Assessing Officer noted that according to the provisions of Section 35(1)(i) and (ii) of the Income-tax Act, any expenditure incurred for the increase of authorized share capital must be capitalized. As a result, the claim of ROC expenses of Rs. 12,650/- was disallowed and added to the total income of the assessee. Addition u/s 69 of the I.T. Act on account of unexplained investment: 17. During the course of the course of assessment proceedings, the Assessing Officer observed that in the seized documents, specifically Annexure-AA/2 (page 22), it was found that M/s. Ants Studio Pvt. Ltd. (ANTS Group) had recorded an unsecured loan of Rs. 10,00,000/- from the assessee company, Mansi Infrabuild Pvt. Ltd. Additionally, Annexure-A/4 (page 25) contained a draft application for the sanction of an immovable property lease, showing a payment of Rs. 10,00,000/- made to Jamia Masjid Sunni (Wakf) in Bangalore as advance lease payment. Based on these documents, the Assessing Officer raised specific queries regarding the nature of these transactions, the mode of payment, and the accounting treatment of the Rs. 10,00,000/- in the books of the assessee company. The assessee was asked to provide supporting bank statements, ledger accounts, and clarify whether the loan was squared off during the year. In response, the assessee stated that the sum of Rs. 10,00,000/- IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 12– was transferred via cheque from the company's ICICI Bank account to Ants Studio Pvt. Ltd. on 30.06.2010. The transaction was reflected in the company’s books, and the amount was intended for a transaction involving Jamia Masjid Sunni (Wakf), Bangalore. However, the assessee explained that the required consent from the Jamia Masjid was not received, and there had been no progress on the matter. Upon further review, the Assessing Officer found that while the Rs. 10,00,000/- was indeed paid to M/s. Ants Studio Pvt. Ltd. on 30.06.2010, a separate payment of Rs. 10,00,000/- was made to Jamia Masjid Sunni (Wakf), Bangalore on 20.07.2010. The assessee’s explanation regarding the lack of consent and the absence of progress was not supported by accounting records or any reflection of the payment in the balance sheet under \"loans and advances\" or \"deposits.\" Furthermore, the amount paid to Jamia Masjid was not returned to the assessee during the year. Given that the payment to Jamia Masjid Sunni (Wakf), Bangalore was not properly recorded in the books and lacked any supporting documentation, the same was considered an unexplained investment by the Assessing Officer. Consequently, Rs. 10,00,000/- was added to the total income of the assessee under Section 69 of the Income-tax Act as unexplained investment. Additionally, penalty proceedings under Section 271(1)(c) were initiated for furnishing inaccurate particulars of income. 18. In appeal, all Grounds of Appeal of the assessee were dismissed by Ld. CIT(A) with the following observations: “8.1 I have considered the facts and submission of the appellant. The AO has made the addition of Rs.10,00,000/- in respect of the amount paid toJamia Masjid Sunni Wakf, Bangalore which was not found recorded in the books of accounts of the appellant. The assessee has failed to explain as to what was the accounting in the books of the appellant with regard to such payment as in the balance-sheet of the assessee no name of Jamia Masjid Sunni Wakf, Bangalore was found. It has also been observed by the AO that the aforesaid amount was not received by the appellant during the year. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 13– 8.2 In the submission, the appellant has mentioned that this amount was included in the deposit account of the balance-sheet which has not been seen by the AO and hence this payment was recorded in the books of the appellant. It has been noticed that the assessee has not explained this accounting treatment in the books of accounts to the AO during the course of assessment proceedings. Simply making the submission in the present appellant proceedings first time without any authenticated document is not accepted. Thus, for want of verification, there is no other way except to confirm the stand of the AO and hence addition made is confirmed. This ground of appeal is dismissed. 9. In grounds of appeal No.4, the appellant has mentioned as under: \"Due to paucity of time given by the Ld. AO, we were not able to produce the evidence at the time of hearing as it will take some period and the Ld. AO passed the order.” 10. DECISION 10.1 The AO has passed the assessment order considering the details and submissions made before him by the appellant and the same have been duly discussed in the assessment order. In the present appellate proceedings a number of opportunities have been given to the appellant for representing its case, however it has chosen not to comply any of the notices issued by this office. This impliedly gives the inference that the appellant does not want to say furthermore, over and above to what has been stated before the AO in the assessment proceedings. 10.2 Following the principle of natural justice the present appellate proceedings have been taken up and are decided as per the material available on record. Therefore there is no substance in the ground of appeal so taken and thus the ground of appeal is dismissed. 11. In ground of appeal No.5, the appellant has stated that \"the appellant witt provide judicial decisions at the time of hearing of appeal.\" 12. DECISION 12.1 Since the written submission and/or quoted judicial decision in support of the grounds of appeal have already been considered in the decision taken in the preceding paras, no separate adjudication is required in this ground of appeal. Hence the ground of appeal is dismissed. 13. The ground of appeal No.6 is general in nature and no modification or alteration of any of the grounds of appeal have been made by the assessee. Thus no decision on this ground is required. Hence this ground of appeal is dismissed. 14. The appeal is dismissed.” 19. The assessee is in appeal before us against the aforesaid additions made by the assessing officer and confirmed by Ld. CIT(A). On going to the facts of IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 14– the instant case, we observe that so far as the first two additions are concerned, there is no specific reference to any incriminating material found during the course of search. It is a well settled law that in case of unabated assessment year, no addition can be sustained under section 153A/C of the Act, in absence of any incriminating material found during the course of search. We have already discussed this aspect in the preceding part of our judgement. Accordingly, since it is seen that the first two additions are not on the basis of any specific incriminating material found during the course of search, the same are liable to be deleted. 20. With respect to the third addition, before us the counsel for the assessee submitted that the Assessing Officer (AO) has incorrectly interpreted the seized documents, specifically page 22 of Annexure AA-2, pages 23 to 25 of Annexure A/4, and the statement given under section 131 of the Income Tax Act by Shri Vikas A. Shah, a director of the company, on 10.02.2013. According to the assessee, the documents in question have been misread, and the proper treatment of these documents would show that the amounts in question were already accounted for in the books of Mansi Infrabuild Pvt. Ltd. It was submitted that the seized document at page 22 of Annexure AA-2 mentions a credit balance of Rs. 10,00,000/- in the name of Mansi Infrabuild Pvt. Ltd., which corresponds to an entry in the audited balance sheet of the company. As per the audited balance sheet, a sum of Rs. 12,40,000/- is shown as loans and advances under Schedule 3, with Rs. 10,00,000/- due to Ants Studio Pvt. Ltd. Additionally, there is a further amount of Rs. 27,500/- owed to RNR Hotels Pvt. Ltd. The schedule also shows that deposits of Rs. 13,22,000/- have been made, including a payment of Rs. 10,00,000/- by cheque (Cheque No. 29179) to Jamia Masjid Sunni (Wakf) on 20.07.2010. The counsel for the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 15– assessee submitted that the AO failed to examine the deposit account in detail, which would have shown that the amount of Rs. 10,00,000/- given to Jamia Masjid Sunni (Wakf) was duly recorded in the books of Mansi Infrabuild Pvt. Ltd. as part of the company's deposits. Other similar payments, including deposits made to various persons by cheque, are also reflected in the company's books. Given this, the counsel for the assessee contended that the amount shown in the seized papers has already been accounted for in the books, and there is no unexplained investment under Section 69 of the Act. The statement made by Shri Vikas A. Shah under section 131 of the Act confirms this, as it corroborates the entries in the books. Moreover, the counsel for the assessee pointed out that the AO did not verify the deposit account properly or reconciled it with the bank statements of Mansi Infrabuild Pvt. Ltd. and Ants Studio Pvt. Ltd. The counsel for the assessee submitted that the sum of Rs. 10,00,000/-, shown as a deposit under loans and advances in Schedule 3 of the audited balance sheet is liable to be accepted, and the relevant bank statements (enclosed as Annexure 15) be verified for further confirmation. In support of this argument, the appellant refered to the case of Sanjay R. Shah v. ITO (ITA No. 492/Ahd/2016), where the ITAT Ahmedabad ruled that if the amount pertains to a sale agreement supported by documentation and reflected in the balance sheet, it cannot be treated as unexplained investment. Similarly, in the case of Gautambhai A. Parmar v. Jt. CIT (ITA No. 1811/Ahd/2012), the ITAT held that when all necessary details regarding the source of investment are provided, no addition under Section 69 could be sustained. Based on the legal precedents and the detailed accounting records maintained by Mansi Infrabuild Pvt. Ltd., the counsel for the assessee submitted that the addition made by the AO under Section 69 is incorrect. The amount of Rs. 10,00,000/- given to Jamia Masjid Sunni (Wakf) is properly shown in the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 16– audited balance sheet under loans and advances and should not be treated as an unexplained investment. Therefore, the counsel for the assessee submitted that the addition be deleted and the treatment of the amount be accepted as per the audited financial statements. 21. In response, Ld. Departmental Representative placed reliance on the observations made by the Assessing Officer and Ld. CIT(A) in their respective orders. 22. We have heard the rival contentions and perused the material on record. In our considered view, looking into the facts and the said case, we observe that the assessee has been able to substantiate that the source of investment has been duly recorded in the books of accounts maintained by the assessee and the same were not duly considered by the Tax Authorities. 23. In the result, in our considered view, taking into consideration the facts the assessee’s facts in relation to this addition, the appeal of the assessee succeeds with respect to this Ground of Appeal. 24. In the result, appeal of the assessee is allowed for assessment year 2011- 12. Assessee’s Appeal for Assessment Year 2012-13 (in IT(SS)A No. 112/Ahd/2021) 25. The assessee has raised the following Grounds of Appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs. 10,49,110/-, as originally made by the AO in respect of the explained and accounted cash deposited in the banking account. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 17– 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the disallowance of Rs.12,650/-, as originally made by the AO in respect the pro-rata expenses incurred for increase in authorized share capital in the past. 3. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.50,00,000/-, as originally made by the AO, in respect of long term borrowings accepted, treating the same as unexplained cash credit. 4. Without prejudice and through this additional legal ground, the Appellant challenges the action of the AO in assuming jurisdiction, thereby issuing notice under section 153C and in consequently passing the assessment order 153C r.w.s. 153A r.w.s. 143(3) of the Act. He did these clearly against the provisions of law, as interpreted by various judicial authorities.” 26. The background of the case remains the same wherein, the assessment proceedings were initiated against the assessee in the course of search conducted at the premises of Shri Vikas Shah. During the assessment, the assessing officer made the additions, the details of which are summarised as below: Addition of share application money as well as cash deposit in bank: 27. During the course of the course of assessment proceedings, the AO noticed from the balance sheet of the assessee that fresh share application money amounting to Rs. 10,00,000/- was received by the company during the relevant financial year. In response to a query raised under section 142(1) of the Income Tax Act, the assessee stated that this share application money had been received in cash from Shri Vikas A. Shah, who was the director of the company. The AO further requested the assessee to provide comprehensive details such as the name, PAN, bank statements, Income Tax Returns (ITRs), and balance sheets of the person from whom the share application money had been received. The assessee subsequently provided reply dated 15.10.2015, stating that the Rs. 10,00,000/- had been received as share application money from Shri Vikas A. Shah, and attached a copy of the ledger account, cash book, IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 18– and ITR of Shri Vikas A. Shah. The assessee further explained that the cash was sourced from advance payments made for land deals and that the same had already been added to Shri Vikas A. Shah’s income in various assessment years. The AO then asked for further clarification on the source of the share application money, including providing the books of accounts for the financial year 2011-12. In response, the assessee again submitted a brief explanation stating that the cash deposited into the bank account of the company came from an advance paid for land transactions to Shri Vikas A. Shah. The assessee also argued that the cash deposit of Rs. 10,00,000/- should be treated as genuine based on the assessment made by the AO in Shri Vikas A. Shah’s case, where an addition of Rs. 23,90,49,949/- had already been made based on seized documents. Additionally, the AO analyzed the bank account of the assessee held with ICICI Bank and found significant cash deposits amounting to Rs. 10,49,110/- in the relevant financial year. Despite several requests for clarification, the assessee only provided the cash book for the period from 01.04.2011 to 10.01.2012 but did not provide satisfactory explanations or documentary evidence for the source of these deposits. In response to a further notice issued by AO, the assessee stated that Rs. 10,00,000/- of the total deposits represented the share application money from Shri Vikas A. Shah, and the remaining Rs. 49,110 came from cash on hand shown in the books. 28. However, the AO found the assessee’s explanation inadequate and rejected it after considering several inconsistencies. The AO observed that cash book provided by the assessee was not credible as it was not produced during the search or any prior assessments related to Shri Vikas A. Shah. Furthermore, the AO noted that there was no direct link established between the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 19– withdrawals from Shri Vikas A. Shah’s bank account and the deposits made into the assessee’s bank account. The AO found the claim that the cash was withdrawn and deposited solely for share application purposes unconvincing, especially since the funds could have been used for other personal expenses or investments unrelated to the company. The AO also observed that Shri Vikas A. Shah had invested substantial amounts in cash across several companies, including Rs. 10,00,000/- in the assessee company and Rs. 18,00,000/- in M/s. Ants Multimedia Pvt. Ltd., which added up to a total of Rs. 37,66,410/- in cash investments for the year. This raised further doubts regarding the source of the cash. Given the failure of the assessee to provide adequate evidence or an acceptable explanation for the source of the cash deposited in the bank account, the AO held that the entire cash deposit of Rs. 10,49,110/- was unexplained income. As a result, the amount was added to the assessee's total income, and penalty proceedings were initiated under section 271(1)(c) of the Income Tax Act for concealment of income. 29. In appeal, Ld. CIT(A) observed that the AO had examined the issue in detail, noting that the assessee had provided a printout of Shri Vikas A. Shah's cash book to support the source of the cash deposit, which had a significant opening balance. However, the AO observed several discrepancies and issues with the cash book presented by the assessee. Firstly, no cash book was found during the search or produced during the post-search enquiries. Additionally, Shri Vikas A. Shah had not filed his balance sheet or return of income for earlier years, making it impossible to verify the authenticity of the cash book, which appeared to have been prepared based on bank withdrawals and deposits. The AO raised concerns about the cash withdrawals from Shri Vikas A. Shah's bank account and how the cash was subsequently deposited into the IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 20– company's bank account. The AO pointed out that there was no evidence to show that the cash withdrawn was exclusively used for the share application money and not for any other personal expenses or other investments. According to the cash book printout, the total cash withdrawn by Shri Vikas A. Shah during the year amounted to Rs. 2,87,300/-, with Rs. 4,80,000/- reportedly spent on personal expenses. Additionally, Shri Vikas A. Shah had made significant cash investments across different entities, including Rs. 10,00,000/- in the assessee company and Rs. 18,00,000/- in another company, M/s Ants Multimedia Pvt. Ltd. This raised doubts as the total cash investments (Rs.37,66,410/-) far exceeded the cash withdrawn by him, suggesting that the source of these funds was not properly explained. Ld. CIT(A) observed that the assessee also admitted in its submission that it did not maintain a complete cash book but only provided the bank transactions, which further weakened its case. The AO, therefore, correctly observed this to be inadequate for verifying the source of funds, especially in the context of the total cash deposits made into the company's bank account. The assessee’s argument that the share application money was sourced from cash withdrawn for land transactions was also found to be doubtful. The CIT(A) observed that the AO found that no supporting evidence for the land transactions, such as sale agreements, was provided, and there was no clear evidence of the lands being owned by Shri Vikas A. Shah. The assessee had further contended that the cash deposits should be accepted as genuine based on the assessment made in the individual returns of Shri Vikas A. Shah, where substantial additions had already been made. However, the AO rejected this contention, noting that these additions were still under dispute in the individual assessments and did not provide conclusive proof of the source of the deposits in the company’s accounts. Therefore, Ld. CIT(A) IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 21– held that the AO rightly treated the share capital introduced in cash as unexplained credits under section 68 of the Income Tax Act, as the assessee failed to provide satisfactory evidence or explanation for the source of the funds. The addition of Rs. 10,49,110/- to the assessee's income was upheld, and the ground of appeal was dismissed. 30. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) confirming the addition in hands of the assessee. On going through the facts of the instant case, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. This for the reason that firstly this is a case of an abated assessment year, and hence the AO was not under any restrictions/compulsion to only make additions with respect to material found during the course of search. Secondly, we observe that the assessing officer gave several opportunities to the assessee to explain the source of share application money, but despite the same, the assessee, as correctly noted by Ld. CIT(A) as well, did not/was not able to substantiate the source of share application money. During the course of assessment proceedings, the assessing officer found several discrepancies in the explanation given by the assessee, thereby leading to the present addition. Further, the assessee had submitted that the source of investment by way of share application money was on account of certain advances related to land deals received by the assessee, in cash, however, neither before the assessing officer and nor before Ld. CIT(A) the assessee could furnish any details of such land deals, for which the assessee had received advances. Further, even before us nothing concrete has been submitted by the counsel for the assessee on this issue. Further, as noted above the contention of the assessee is that the aforesaid amount IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 22– was received in cash only and therefore, on this count as well, the source of investment in share application money clearly remains unexplained. 31. Therefore, in looking into the instant facts and for the reason as highlighted above, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 32. Therefore, the assessee’s appeal with respect to this ground of appeal/addition is dismissed. 33. With regard to the second addition in relation to deduction of ₹12,650/-, we observe that Ld. CIT(A) has correctly observed that several Courts have taken a unanimous view that expenses incurred in respect of increase in authorised share capital is not an allowable revenue expenditure. Further, as noted above, this is a case of unabated assessment year and therefore, looking into the instant facts, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 34. In the result, appeal of the assessee with respect to this addition is dismissed. The third ground pertains to an addition of Rs. 50,00,000 made under section 68 of the Income Tax Act, relating to a long-term borrowing by the assessee from Silverline Technology Pvt. Ltd. 35. The brief facts relating to this issue are that during the assessment proceedings, it was noted that the assessee had recorded this amount as an inter-corporate deposit in its books. In response to a query from the AO, the assessee provided a ledger for the inter-corporate deposits but failed to submit IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 23– the required documentation such as PAN details, income tax returns (ITR), bank statements, balance sheets, and confirmations from the lender, which were necessary to establish the genuineness and creditworthiness of the loan transaction. Despite several requests from the AO, the assessee only provided a brief explanation, stating that Silverline Technology Pvt. Ltd. was a Bombay- based company that had been facing financial difficulties and was no longer in operation. The assessee further claimed that they had repaid Rs. 18 lakh to the company by cheque and could not provide the requested documentation due to the company's inactive status. This response, however, did not satisfy the AO, who pointed out that the assessee failed to establish the existence, genuineness, or creditworthiness of the lender. The AO noted that under the provisions of section 68, if a sum is found credited in the books of an assessee and the explanation offered by the assessee regarding the nature and source of the credit is not satisfactory, the amount can be treated as income and taxed accordingly. In this case, the Assessing Officer held that the assessee did not provide adequate documentation or evidence to substantiate the long-term borrowing of Rs. 50,00,000/- from Silverline Technology Pvt. Ltd., and as such, the amount was deemed unexplained. The AO, therefore, treated this sum as unexplained income and added the same to the total income of the assessee for the relevant year. 36. In appeal, Ld. CIT(A) confirmed the addition with the following observations: “8.1 I have considered the facts and submission of the appellant. The AO has made the addition of Rs.50,00,000/- in respect of the borrowings taken from Silverline Technology Pvt. Ltd. In spite of repeated requisitions, the assessee has failed to provide the basic documents to prove the genuineness, existence and creditworthiness of the loan transaction. Since the assessee has filed to provide the copy of ITR, bank statement, confirmation and balance-sheet of the above, party, thus, the onus cast upon the appellant remained undischarged. Even in the present IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 24– appellate proceedings also, the assessee has failed to provide the above basic documents to comply with the three ingredients of Section 68 of the IT Act. Moreover, the assessee simply submitted audited balance-sheet from Bombay Stock Exchange Website which is also in the nature of additional evidence under Rule 46A. In absence of any request for admission of additional evidence, the same is not considered. In view of the above discussion, the addition made by the AO for the unexplained credits is found correct and justified and hence the same is confirmed. This ground of appeal is dismissed.” 37. The assessee is in appeal before us against the aforesaid addition confirmed by Ld. CIT(A). During the course of arguments before us, we observed certain facts, which we would like to mention in the order. Firstly, we observe that the persons from whom the aforesaid amount of ₹50 lakhs was taken i.e. M/s. Silver Line Technologies Limited is a limited company. Further, on going through the Annual Report of this company for the impugned year under consideration, we observe that during the year under consideration, this company has given “loans and advances” amounting to ₹ 5.70 crores to various parties, including the assessee. Further, it is also been brought to our notice that this company is an unrelated entity and the fact of advance having been taken by the assessee was duly recorded in the books of accounts. Further, on going through the audited financials of Silver Line Technologies, we observe that this company has reserves and surplus is amounting to ₹ 86.91 crores and share capital of Rs. 59.98 crores. Accordingly, in our view, the above facts have not been looked into by the Tax Authorities before coming to the conclusion that the assessee has not been able to establish the creditworthiness of this entity, which had advanced a sum of ₹ 50 lakhs to the assessee during the impugned year under consideration. The counsel for the assessee submitted before us that this advance has been duly recorded in the books of accounts and was by way of banking channels. Further, it was also submitted that out of the said advance, a sum of ₹ 18 lakhs has also been returned back to the company. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 25– 38. Accordingly, in light of the above facts as noted by us in the preceding paragraphs, in interest of justice, the matter is restored to the file of Ld. CIT(A) to look into the above aspects, the and thereafter, pass appropriate orders, in accordance with law after giving due opportunity of hearing to the assessee. 39. In the result, appeal of the assessee with respect to this ground of appeal is allowed for statistical purposes. 40. In the result, the appeal of the assessee is partly allowed for statistical purposes for assessment year 2012-13. Assessee’s Appeal for Assessment Year 2013-14 (in IT(SS)A No. 127/Ahd/2021) 41. The assessee has raised the following grounds of appeal: “1. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.2,00,150/- originally made by the AO, in respect of cash found deposited in the banking account. 2. The learned CIT(A)-12, Ahmedabad has erred in law and on facts in confirming the addition of Rs.18,11,045/- originally made by the AO, in respect of suspense A/c as stated in Annexure A/4, treating the same as unexplained cash credit under section 68 of the Act. 3. Without prejudice and through this additional ground, the Appellant challenges the invocation of the provisions of section 153C and consequential passing of the assessment order under section 153C r.w.s. 153A r.w.s. 143(3) of the Act by the AO, which are against the express provisions of law, thus bad in law as well as on facts.” 42. At the outset, we observe that this is a case of an unabated assessment year and accordingly, there is no restriction of the assessing officer to limit the addition on the basis of material found during the course of search. IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 26– 43. The background in the case remains the same as for the balance assessment years. The first ground of appeal relates to addition of ₹ 2,00,150/- on account of share application money: 44. The brief facts relating to this Ground of Appeal are that the AO made an addition of Rs. 200,150/- to the income of the assessee, treating it as unexplained credits under Section 68 of the Income Tax Act, in relation to share capital introduced by Shri Vikas A. Shah. The AO's observed that the assessee’s claim that this amount was received from Shri Vikas A. Shah's cash on hand was unsupported by sufficient evidence. The AO noted discrepancies in the cash book submitted by the assessee, which showed large opening balances that were not corroborated by records found during a search or by post-search enquiries. Furthermore, the Assessing Officer observed that there was no clear nexus between the cash withdrawals from Shri Vikas A. Shah's personal bank account and the deposits in the assessee's bank account. The AO also highlighted that the cash book appeared to be prepared based on bank transactions, but lacked proper verification of the sources of the cash deposits. The assessee had not provided adequate details regarding the use of cash withdrawn and failed to substantiate whether the funds were used exclusively for the share capital investment or for personal expenses. Additionally, submission of the assessee that investments in both the assessee and other group companies were funded by these withdrawals was deemed misleading by the Assessing Officer, as the figures did not align with the available cash balance. The absence of a full cash book and the lack of documentary evidence for the investments, such as agreements for land transactions cited by the assessee, led the AO to hold that the explanation provided by the assessee was IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 27– unsatisfactory. In appeal, the AO’s decision to treat the Rs. 200,150/- as unexplained credits under Section 68 was upheld by Ld. CIT(A), and the appeal of the assessee was dismissed. 45. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A) confirming the additions made by the assessing officer. On going through the facts of the instant case, we observe that the assessee has not been able to establish the creditworthiness of the lender and the source of investment in the share application money. In our view, the assessing officer has correctly observed that there are certain discrepancies in the submissions made by the assessee with regards to the source of share application money. Further, the explanation of the assessee that the source of share application money was from cash received by the assessee towards advance towards sale of land are also found to be doubtful, in absence of any corroborative evidence having been furnished by the assessee. 46. Accordingly, looking into the facts of the case, we find no infirmity in the order of Ld. CIT(A) so to call for any interference. 47. In the result, the assessee’s appeal in relation to this ground of appeal is hereby dismissed. Addition on account of suspense account: 48. The brief facts relating to the second Ground of Appeal raised by the assessee are that during the assessment proceedings for the assessment year 2013-14, the AO raised a specific query regarding a Suspense Account found in the books of the assessee company, which was identified during the search of Shri Vikas A. Shah’s premises. The Assessing Officer observed that a IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 28– ledger entry of the Suspense Account in the company’s books, which contained various credit entries and two debit entries, with the amounts appearing to have routed through an ICICI bank account (account number 002405500256). The AO asked the assessee to provide explanations for each of these entries along with supporting evidence, including a full bank statement for the above mentioned ICICI account. In response to this query, the assessee submitted reply dated November 9, 2015, stating that the Suspense Account entries had been provided by the company’s accountant for clarification, and that the entries were reconciled with the bank statement submitted. The assessee further explained that two entries of Rs. 8,00,000/- each, dated May 30, 2011, were mistakenly written as 2011 instead of 2012, and that the amount of Rs. 11,155.41/-, dated December 3, 2011, was merely the bank balance as per the bank book. However, the AO found the reply insufficient, as it did not adequately explain the nature and source of the credit entries in the Suspense Account. As a result, the AO specifically asked the assessee to again clarify why the credit balance in the Suspense Account, as reflected in Annexure A/4 (page 92), should not be treated as unexplained income, subject to addition under Section 68 of the Income Tax Act. In response, the assessee filed another reply on December 11, 2015, reiterating its earlier explanation. The assessee stated that the Rs. 8,00,000/- and Rs. 8,00,000/- entries were related to Ants Studio Pvt. Ltd., and that the Rs. 11,155.41/- entry was merely an outstanding balance from September 3, 2011. The assessee also submitted a copy of the relevant bank statement and the bank book for the year 2012-13 to support its claims. However, the AO found the assessee’s explanation unconvincing. The AO noted that the assessee had failed to provide documentary evidence to substantiate the source and nature of the credit entries under the Suspense Account. Specifically, the Suspense Account showed a IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 29– cheque deposit of Rs. 23,00,000/- and a cheque issuance of Rs. 5,00,000/-, with an opening balance of Rs. 11,155.41/-. Despite being asked to provide complete documentary evidence, the assessee had only provided a general explanation without any supporting documents to prove the source of the funds deposited in the account. The AO pointed out that the credit balance of Rs. 18,11,045/- in the Suspense Account remained unsubstantiated. Since the assessee could not substantiate the credit balance in the Suspense Account, the AO treated the sum of Rs. 18,11,045/- as unexplained income and added it to the total income of the assessee. 49. In appeal, Ld. CIT(A) dismissed the appeal of the assessee with the following observations: “6.1 I have considered the facts and submission of the appellant. The addition of Rs.18,11,045/- has been made in respect of credits in the suspense account maintained by the assessee in the books of accounts as per the seized page No. 92 of Annexure A/4. The assessee has failed to furnish the evidences to establish the source of such credit entries and the nature of transactions pertaining to the credit entries. Thus, the appellant has failed to discharge its onus to prove the credit balance of suspense account. In the present appellate proceedings also, the assessee has made self serving contention with copies of some additional evidence in the form of confirmation and bank statement of the parties without any request for admission of those additional evidences under Rule 46A of IT Rules. Therefore, these additional evidences cannot be considered while deciding the issue under consideration. 6.2 Since the assessee has failed to provide the necessary documents in support to explain the nature of the credit entries in the suspense accounts, therefore, the addition has been found in order and hence the same is confirmed. This ground of appeal is dismissed.” 50. The assessee is in appeal before us against the aforesaid addition confirmed by Ld. CIT(A). However, even before us during the course of hearing, the assessee has not been able to give any substantive evidence to establish the source of credits appearing in the suspense account maintained by the assessee and has also not been able to explain the nature of transaction pertaining to these credit entries. Accordingly, in view of the evident lack of IT(SS)A Nos.110 to 112/Ahd/2021 & 127/Ahd/2021 Mansi Infrabuild Pvt. Ltd. vs. DCIT Asst.Years –2010-11 to 2013-14 - 30– explanation by the assessee with respect to this ground of appeal, we find no infirmity in the order of Ld. CIT(A) so as to call for any interference. 51. In the result, the assessee’s appeal in relation to this ground of appeal is dismissed. 52. In the result, assessee’s appeal is dismissed for assessment year 2013- 14. 53. In the combined result, the assessee’s appeal are partly allowed for statistical purposes. This Order pronounced in Open Court on 22/11/2024 Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/11/2024 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 11.11.2024(Dictation given by Hon’ble Member on his dragon software) 2. Date on which the typed draft is placed before the Dictating Member 12.11.2024 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 20.11.2024 5. Date on which the fair order is placed before the Dictating Member for pronouncement .11.2024 6. Date on which the fair order comes back to the Sr.P.S./P.S 22.11.2024 7. Date on which the file goes to the Bench Clerk 22.11.2024 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "