ROBIN RAMAVTAR GOENKA,AHMEDABAD V. THE ACIT, CENTRAL CIRCLE-1(2), AHMEDABAD

ITSSA 46/AHD/2023

AI Insights

This case involves a series of appeals related to the income tax assessments of Robin Ramavtar Goenka and other associated entities following a search and seizure operation under section 132 of the Income Tax Act, 1961. The search, conducted on 30-10-2018, uncovered various unaccounted transactions and receipts linked to real estate business activities. The Assessing Officer made substantial additions to the income of the assessee based on these findings, which were contested in subsequent appeals. The main legal contention revolved around whether the entire unaccounted receipts should be taxed or only the profit element therein. The Tribunal's decision leaned towards taxing only the profit element, aligning with various judicial precedents.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396697 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: Sankalp Recreation P. Ltd. vs. ACIT, Ginger Properties Pvt. Ltd. vs. ACIT, CIT vs. President Industries, CIT vs. Balchand Ajit Kumar, CIT v. Gurubachhan Singh, Man Mohan Sadani vs. CIT, CIT v. Samir Synthetics Mill, DCIT v. Panna Corporation, Chetan C. Patel v. ACIT, CIT v. Jay Builders, Greenfield Reality P. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: OBSERVING
• Keywords: Set aside; Business income; Question of law; Unexplained cash credit; Unexplained expenditure; Unexplained investment; Income from undisclosed sources; Principle of natural justice; Search and seizure; Block assessment; Loose papers; Rule 8D; Bogus
• Section: 143(3); 132; 153A; 68; 69C; 28; 14A; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member Sri. Robin Ramavtar Goenka Plot No.3, Sankalp House, B/h. Rajpath Club, Bodakdev, Ahmedabad- Gujarat 380054 PAN: AFAPG9631E Vs The ACIT Central Circle-1(2), Ahmedabad The ACIT Central Circle-1(2), Ahmedabad (Appellant) Vs Sri. Robin Ramavtar Goenka Plot No.3, Sankalp House, B/h.Rajpath Club, Bodakdev, Ahmedabad, Gujarat 380054 PAN: AFAPG9631E (Respondent) The ACIT Central Circle-1(2), Ahmedabad (Appellant) Vs Dilipkumar Chhotalal Patel A-Atulyam, Opp. Palam Plaza, Torrent, Makarba, Ahmedabad Gujarat-380051 PAN: AJRPP7897G (Respondent) IT(SS)A No. 46/Ahd/2023 and ITA No. 434/Ahd/2023 IT(SS)A Nos: 119 & 120/Ahd/2023 for Asst Years: 2018-19 & 2019-20 IT(SS)A Nos: 117 & 118/Ahd/2023 Asst. Years: 2018-19 & 2019-20 I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 2 The ACIT Central Circle-1(2), Ahmedabad (Appellant) Vs Dimple Robin Goenka Sur. No. 207/20, F.P. No. 271/2, Sankalp House, B/h. Rajpath Club, Bodakdev, Ahmedabad, Gujarat 380054 PAN: ANDPG9739Q (Respondent) Assessee Represented: Shri Tushar Hemani, Sr. Adv. & Shri Parimalsinh B. Parmar, A.R. Revenue Represented: Shri Durga Dutt, CIT-DR & Shri B.P. Srivastava, Sr. D.R. Date of hearing : 03-04-2025 Date of pronouncement : 30-05-2025 आदेश/ORDER PER BENCH:- These appeals are filed by the Assessee and Revenue as against the different appellate orders dated 02-05-2023 and 22-05- 2023 passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad arising out of the assessment orders passed under section 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to various Assessment Years. A Search action under section 132 of the IT Act was carried out in Sankalp group on 30-10-2018, during the course of search premises of M/s. Sankalp Organisers Pvt Ltd,, M/s. Sankalp Venture LLP wherein Mr. Robin Ramavatar Goenka is the key IT(SS)A Nos: 72 to 75/Ahd/2023 Asst. Years: 2013-14, 2015-16 to 2017-18 I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 3 person of the group and Substantial Additions were made in his hands, whereas Protective Additions made in the hands of his Accountant Mr. Dilipkumar Chhotalal Patel. Further Mrs. Dimple R Goenka is the wife of Mr. Robin R Goenka. Since the additions made are identical and inter connected, for the sake convenience all the above appeals are heard as a group and disposed of by this common order. 2. We have taken first Mr. Robin Ramavatar Goenka’s case as the lead case. Brief facts of the case is that the assessee is engaged in real estate business. Assessee is a part of “Sankalp group” of Ahmedabad. A search and seizure action under section 132 of the Act was carried out in “Sankalp Group of Ahmedabad” on 30.10.2018 and on subsequent dates inter-alia covering “Kailash Goenka Group” as well as “Robin Goenka Group”. Incriminating materials, including handwritten diaries, loose papers, unrecorded bills and other documents were seized. During the course of search evidence of on-money transactions in real estate projects, unaccounted cash sales were found which were not recorded in the books of accounts. Unexplained cash payments for land purchases, brokerage, salaries, personal expenses and jewellery were seized. Statements of key employees of the group handling cash transactions were recorded. Consequently, assessments were framed under sections 153A and 143[3] of the Act for the Asst Years 2018-19 & 2019-20 whereby Assessment Year wise unaccounted cash receipts and payments, as summarized by the AO, is given below for the sake of clarity: I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 4 No. Particulars Addition (Rs.) Page of AO AY 2018-19 AY 2019-20 1 Unaccounted receipts 1,74,90,000 27,49,02,539 77-79 (AY 18-19) 2 Unaccounted payments 24,74,37,451 5,34,32,500 79-89 (AY 18-19) 3 Unaccounted expenses --- 2,50,000 90-93 (AY 19-20) 4 Unexplained payment --- 36,50,000 93-97 (AY 19-20) 5 Unexplained investment --- 15,57,000 97-107 (AY 19-20) 6 Negative cash-in-hand --- 51,246 107-111 (AY 19-20) 7 Unaccounted receipts --- 2,00,000 111-116 (AY 19-20) 8 Payout on sale of stock --- 40,60,983 25-27.1 (AY 19-20) 9 Bogus loss in stock --- 18,50,853 25-27.1 (AY 19-20) 2.1. Accordingly, assessee was called upon to show cause as to why the amount being unaccounted receipts should not be treated as undisclosed income and the amount being unaccounted payments incurred in cash should not be treated as unaccounted expenditure u/s.69C of the Act. 2.2. Assessee furnished a detailed reply to the SCN wherein, the assessee claimed that as regards receipts pertaining to real estate business, even from the noting in the seized material, it is clear that such expenses have been incurred for the purpose of business. Therefore, the entire receipts and entire payments cannot be subject to additions. Rather, only profit element (approx. 8 to 10%) may be applied to the receipts. Only the real income can be taxed in the hands of the assessee. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 5 2.3. The Ld AO was not satisfied with the reply furnished by the assessee. Accordingly, entire unaccounted receipts and entire unaccounted payments, appearing in the seized material, were added as income of the respective assessment years and demanded taxes thereon. 3. Aggrieved against the assessment orders, assessee filed appeals before the Commissioner of Income Tax [Appeals] who has decided the issues for all the assessment years as total unaccounted receipts aggregate to Rs.29,44,43,392/- as against which total unaccounted payments aggregate to Rs.31,04,39,180/-. Break-up of total unaccounted receipts of Rs.29,44,43,392/- is as follows: Particulars AY 2018-19 AY 2019-20 Total Unaccounted receipts 1,74,90,000 27,49,02,539 29,23,92,539 Unaccounted cash receipts --- 2,00,000 2,00,000 Bogus loss in penny stock --- 18,50,853 18,50,853 Total 1,74,90,000 27,69,53,392 29,44,43,392 3.1. Break-up of “total unaccounted payments” of Rs.31,04,39,180/- is as follows: Particulars AY 2018-19 AY 2019-20 Total Unaccounted payments 24,74,37,451 5,34,32,500 30,08,69,951 Unaccounted expenses --- 2,50,000 2,50,000 Unexplained payment --- 36,50,000 36,50,000 Unexplained investment --- 15,57,000 15,57,000 Negative cash-in-hand --- 51,246 51,246 Payout on sale of stock --- 40,60,983 40,60,983 Total 24,74,37,451 6,30,01,729 31,04,39,180 I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 6 3.2. Since unaccounted payments are higher than the unaccounted receipts, ‘unaccounted payments’ are considered for determining net profit at 14% which worked out at Rs.4,34,84,000/= (Pgs.73-74 of CIT(A)’s order) as follows: Particulars AY 18-19 AY 19-20 Total Total payments (A) 24,74,37,451 6,30,01,729 31,04,39,180 Rounded off amount (B) 24,75,00,000 6,31,00,000 31,06,00,000 Income @ 14% (B * 14%) 3,46,50,000 88,34,000 4,34,84,000 4. Further with regards to the other additions made on account of various payment/expenditure incurred by the group, the assessee contented that the same be telescoped against the unaccounted receipts. The Ld CIT[A] considered the issue in detail and directed the AO to confine the business income at Rs.3,46,50,000/= and delete the remaining amount and also not to charge u/s.115BE of the Act this being business income by observing as follows: “ 7.4. The appellant in its submissions has also contended that from the very same seized/impounded material, the AO made addition on two counts, as much as the Unaccounted receipts are required to be brought to tax on gross basis and further the payments arising out of the same are also added separately, thus, casting into double taxation in the hands of the appellant. It is submitted that even for the purpose of the provisions of the Act, it is only when the AO of convinced about the source of the expenses incurred, it is then that the said addition is warranted u/s 69C of the Act. Thus, the addition by the AO is contrary to the facts and legality of the case of the appellant. The appellant also contended that the theory of telescoping of payments and receipts must be made applicable in the case of the appellant 7.5. In this regard, I have perused the findings of the AO and submission of the appellant. On perusal of the records, it is observed that the claim of I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 7 the appellant is correct because when the AO had made addition on account of unaccounted receipts on gross basis and further, he made addition on the payment made for unaccounted expenses, then addition on both counts resulted into double taxation, which is not justified as per settled law. Further in the appellants own case following income of Rs 4,34,84,000/- considering payments as benchmarking has been confirmed in the Assessment Years as per below:- A.Y. Gross Amount 14% thereof 2018-19 24,75,00,000 3,46,50,000 2019-20 6,31,00,000 88,34,000 Total 31,06,00,000 4,34,84,000 7.6. Further it is also found that the substantial real income in the hands of the other group entities of the appellant i.e. Sankalp Venture LLP, Sankalp Organisers Pvt. Ltd. & Ginger Properties Pvt. Ltd. has also been brought to tax in respective assessment years from AY 2013-14 to AY 2019-20. The appellant is the main key person and controller of the appellants group entities. 7.7. Looking to the overall affairs of the group and the facts that addition of unaccounted receipts was already made as well as large amount has been confirmed in the various group concerns. the AO is directed to delete the addition made on account of unexplained expenditure/payments for the all assessment years under consideration as the same has been sourced from unaccounted receipts which have already been confirmed in the respective assessment years. Considering the overall facts of the case and as discussed in foregoing paras the addition of the following payments totaling to Rs.31,04,39,180/- being allowed to be telescoped against the unaccounted receipts benchmarked Rs.31,06,00,000/- as discussed vide para 7.5 of the appellant. Sr. no. Particulars Amount (Rs) 1 Unaccounted Cash Expenses (Rutul Bhai Stamp Duty Payment Sankalp Venture LLP) 2,50,000 2 Unexplained Payment (35.00 lacs to Broker Bhaveshbhai & 1.50 lacs to Ajaybhai) 36,50,000 3 Unexplained Investment (Land at Sitapur) 15,57,000 4 Payout on sale Penny Stock (Kushal Tradelink) 40,60,983 5 Excess Payment over Receipts 84,77,412 6 Unexplained Payments 30,08,69,951 Total 31,04,39,180 I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 8 7.8. In the nutshell, the AO is directed to consider the amount of confirmed addition as business income at Rs.3,46,50,000/- in the case of appellant as per the table mentioned in para 7.5 of this order while giving the appeal effect of this order and remaining amount stands deleted. Thus the ground of appeal is partly allowed. 8. The ground of appeal no. 3, since the income of the appellant is brought to be taxed under the head income from business and not under any section to which provision of section 115BBE of the Act are attracted, the ground of appeal is allowed.” 5. Aggrieved against the Appellate Order the Assessee is in appeal before us raising the following Grounds of Appeal in IT(SS)A No. 46/Ahd/2023 [A.Y. 2018-9]: 1. The learned CIT(A) has erred in law and on facts of the case in confirming the assessment order u/s 153A of the Act which is passed in violations of provisions of the Act and against the scheme of assessment related to search cases. 2. The learned CIT(A) has erred in law and on facts of the case in confirming the additions made by learned Assessing Officer without any incriminating material found during the search. 3. The learned CIT(A) has erred in law and on facts of the case in confirming an addition of Rs. 3,46,50,000/- by estimating profit margin at the rate of 14%. In the facts and circumstances of the case, such estimation is highly excessive and does not reflect the real income earned by the appellant. 4. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. The action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 9 5. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty under various sections of the Act. 6. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 6. Aggrieved against the Appellate Order the Revenue is in appeal before us raising the following Grounds of Appeal in IT(SS)A No. 120/Ahd/2023 [A.Y. 2018-19]: 1. In the facts and on the circumstances of the case, Ld. CIT(A) erred in holding that the unaccounted income should be telescoped against the unaccounted expenditure to determine the real income of the assessee 2 In the facts and on the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs. 1,74,90,000/- towards unaccounted cash receipts holding that the appellant suo-moto has offered income @14 of unaccounted expenses. 3. In the facts and on the circumstances of the case, Ld. CIT(A) erred in restricting the addition of Rs.24,74,37,451/- towards unaccounted cash receipts and unaccounted expenses income to Rs.3,46.50,000/- estimating the profit at 14% without giving any substantial basis e.g. documentary evidences in support of claim of expenses by the assessee. 7. Ld Senior Counsel Sri. Thusar Hemani appearing for the Assessee submitted that the assessee company is engaged in the real estate business basis. The seized material in question contained noting in respect of unaccounted receipts as well as unaccounted expenses. Unaccounted receipts (appearing in the seized material) were generated in the course of business activities. It is not the case of the AO that such receipts were not related with the business activities of the assessee. Also there is nothing on I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 10 record to demonstrate that the assessee had any other source of income from which, such receipts could have been generated. Further, the very same seized material in question contained noting in respect of “unaccounted expenses” as well. Perusal of the particulars mentioned against such expenses would make it clear that such expenses have also been incurred in the course of normal business activities. Perusal of seized material would indicate that a part of receipts generated in the normal course of business are kept outside the books of accounts and similarly, certain part of expenses are also being incurred in cash in the normal course of business which are kept outside the books of accounts. Under such facts and circumstances of the present case, question that falls for consideration of this Hon’ble Tribunal is as follows: A. Whether Ld AO was justified in making separate additions in respect of “unaccounted receipts” as well as “unaccounted expenses” in relation to the “business activities” carried on by the assessee ? OR B. Whether Ld CIT(A) was justified in restricting the impugned additions made by AO to the extent of “real income” earned in relation to the unaccounted “business activities” carried on by the assessee by adopting reasonable Gross Profit rate and applying the same to the total unaccounted receipts reflected in the seized material ? 7.1. Ld Senior Counsel Sri. Thusar Hemani thus submitted that it is well settled legal proposition that entire unaccounted receipts cannot be added. Rather, only the profit element embedded therein can be added in the hands of the assessee. Reliance is placed on following decisions for the said legal proposition: I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 11 * Sankalp Recreation P. Ltd. vs. ACIT – IT(SS)A 65/Ahd/2022; * Ginger Properties Pvt. Ltd. vs. ACIT – IT(SS)A 45/Ahd/2023; * CIT vs. President Industries – (2002) 258 ITR 654 (Guj.); * CIT vs. Balchand Ajit Kumar – (2003) 263 ITR 610 (MP); * CIT v. Gurubachhan Singh – (2008) 302 ITR 63 (Guj); * Man Mohan Sadani vs. CIT – (2008) 304 ITR 52 (MP); * CIT v. Samir Synthetics Mill – (2010) 326 ITR 410 (Guj); * DCIT v. Panna Corporation – Tax Appeal 323 of 2000 (Guj); * Chetan C. Patel v. ACIT – IT(SS)A 522/Ahd/2011 and others; * CIT v. Jay Builders – (2013) 33 taxmann.com 62 (Guj); * Greenfield Reality P. Ltd.– IT(SS)A 289/Ahd/2018 & others; 7.2. The next logical step is to determine the quantum of income element embedded in such “unaccounted receipts”. Considering the actual profit ratio as per the books of accounts as well as actual unaccounted transactions and in order to pluck the leakage in Revenue, Ld CIT(A) estimated Real estate business profit at 14% to determine real income, which is substantially on higher side. Therefore, in the interest of justice, some reasonable rate of profit may be decided. Further it is well settled that only real income has to be taxed in the hands of the assessee. Reliance is placed on Godhra Electricity Co. Ltd.-vs-CIT (1997) 225 ITR 746 (SC). Further it is well settled principle of law that AO is duty bound to give relief to an assessee wherever due, even if it has not been claimed by the assessee. Reliance is placed on decision in the case of S. R. Koshti Vs- CIT (2005) 276 ITR 165 (Guj). 7.3. Thus Ld Senior Counsel pleaded that the methodology adopted by Ld CIT(A) is not absolutely scientific and leaves room for arbitrariness. It is further submitted that the very same seized materials contain noting of ‘unaccounted receipts’ and ‘unaccounted payments’. Such receipts as well as payments are I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 12 relating to the business of the assessee and hence, as a natural corollary, such unaccounted expenses would have been incurred out of unaccounted receipts. Accordingly, AO was not justified in denying set-off of such unaccounted expenses against unaccounted income. It is well settled that seized material has to be read in its entirety. Pick and choose theory cannot be adopted while interpreting seized material. Reliance is placed on following decisions: * Navjivan Oil Mills vs. CIT – (2002) 252 ITR 417 (Guj); * Glass Line Equipments Co. vs CIT – 253 ITR 454 (Guj); * Mehta Parikh & Co. v. CIT – (1956) 30 ITR 181 (SC); * Kantilal & Bros. vs. ACIT – (1995) 52 ITD 412 (Pune); * Chander Mohan Mehta v ACIT – (1999) ITD 245 (Pune); * Biren V. Savla vs. ACIT – (2006) 155 Taxman 270 (Mum); * Madhav Corpn. vs ACIT– (2017) 85 taxmann.com 238 (Ahd); * DCIT v Kankakia Hospitality P Ltd. – (2019) 179 ITD 1 (Mum); 7.4. In view of the above, Ld Senior Counsel submitted that Ld CIT(A) has taken utmost care while determining the income based on seized material. Consequently, balance additions have been rightly deleted. Hence, revenue’s appeals deserve to be dismissed and assessee’s appeals be allowed with real estate business be estimated at some reasonable rate of profit. 8. Per Contra Ld CIT-DR Shri Durga Dutt and Sr DR Shri B.P. Srivastava appearing for the Revenue submitted that the assessee was involved in substantial unaccounted cash transactions, which were discovered only due to the search and seizure operations. The assessee had not provided any satisfactory explanation for the unaccounted receipts and expenses which led to the invocation of Sections 68 (unexplained credits) and 69C I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 13 (unexplained expenditure) of the Act. Further the Ld DRs stated that there are violations of provisions of the Act and the assessee has not provided the details of expenses which will determine whether they are incurred wholly and exclusively incurred for the purpose of business; whether they are of capital or revenue nature and therefore, such expenses incurred in violation of the provisions of the Act cannot be allowed as a deduction under Section 37(1) of the Act. Further the assessee failed to demonstrate any nexus between the unaccounted receipts and expenses. In the above circumstances the Ld CIT(A) made ad-hoc estimation of the net profit rate and therefore requested to sustain the additions made by the A.O. 9. We have heard rival submissions at length and perused the materials available on record including the paper books and case laws filed by the parties. We had an occasion to deal with identical issue in the group case namely Sankalp In [IT(SS)A Nos. 45 to 48/Ahd/2022 dated 31-01-2025] were similar activities and search action taken palace. The ratio held in that decision is squarely applicable in these cases also. Well established mechanism to calculate profit is provided under sections 28 to 40 of the Act and when the books of accounts are rejected, invoking section 145, the estimation has to be resorted to. Various judicial precedents including the judgements of Hon’ble Gujarat High Court in case of DCIT Vs. Panna Corporation in Tax Appeal No.323 of 2000 which has followed series of judgements rendered by Jurisdictional High Court in the case CIT -Vs-President Industries Ltd (2002) 258 ITR 654; CIT -Vs- Gurubachhan Singh [2208] 302 ITR 63; CIT -Vs- I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 14 Samir Synthetics Mill [2010] 326 ITR 410, etc. wherein it was held that even upon detection of unaccounted cash receipt or on-money receipt, what can be brought to tax is the profit embedded in such receipts and not the entire receipts themselves by observing as follows: \"... 9. Having heard the learned counsel for the parties and having perused the orders under consideration, what emerges is that the findings arrived at by the Assessing Officer that the respondent - partnership firm received on money of Rs.62 lakhs during the block period for sale of the flats, is not seriously in dispute. The Tribunal confirmed such findings arrived at by the Assessing Officer. However, the Tribunal did not permit the revenue to collect the tax on the entire receipt believing the it was only the income embedded in such receipt which can be subjected to tax. 10. As pointed out by the counsel for the respondent, this Court in the case of Commissioner of Income Tax v. President Industries, reported in (2002) 258 ITR 654 had taken a similar view. In the said case, during the course of survey conducted on the premises of the assessee, from the excise records found, an inference was drawn by the Assessing Officer that sales accounting to Rs.29 lakhs and odd had not been disclosed in the books of account. The Assessing Officer made addition of the entire sum of the said undisclosed sales as income of the assessee for the assessment year 1994-95. Such addition was confirmed by the Commissioner (Appeals). The Tribunal, however, held that the entire sales could not have been added as income of the assessee, but only to the extent the estimated profits embedded in the sales for which the net profit rate was adopted entailing addition of income on the suppressed amount of sales. Such decision was carried in appeal by the revenue before the High Court. The High Court rejected the appeal, observing that unless there is a finding to the effect that investment by way of incurring the cost in acquiring the goods which have been sold has been made by the assessee and that has also not been disclosed, such addition could not be sustained. It was observed that in absence of such findings of fact, the question whether the entire sum of undisclosed sale proceeds can be treated as income of the relevant assessment year answers by itself in the negative. The High Court rejected the appeal holding that no question of law which requires to be referred arises. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 15 11. In the case of Commissioner of Income Tax v. Gurubachhan Singh J. Juneja, reported in (2008) 302 ITR 63 (Guj.), once again a somewhat similar issue came up before this Court. In the said case, the assessee was engaged in the business of trading of tyres. Search proceedings were carried out at the residential and business premises of the assessee. On the basis of loose sheets which were seized during such search operation, the Assessing Officer held that sales to the extent of Rs.10.85 lakhs was not found in the books of account. Such amount was included in the total income of the assessee. The Commissioner (Appeals) gave substantial relief to the assessee and reduced the income on the basis of gross profit rate. The Tribunal confirmed the order of the Commissioner (Appeals). On further appeal before the High Court by the revenue, the High Court refused to refer any question holding that in absence of any material on record to show that there was any unexplained investment made by the assessee which was reflected by the alleged undisclosed sales, the finding of the Tribunal that only the gross profit on the said amount can be brought to tax does not call for any interference. 12. Counsel also relied on the decision in the case of Commissioner of Income Tax v. Samir Synthetics Mill, reported in (2010) 326 ITR 410, wherein the High Court confirmed the view of the Tribunal accepting only the profit of unaccounted sale for the purpose of collecting tax. 13. Our attention was also drawn to the decision of the M. P. High Court in the case of Man Mohan Sadani v. Commissioner of Income Tax, reported in (2008) 304 ITR 52, wherein referring to and relying upon the decision of this Court in the case of Commissioner of Income Tax v. President Industries (supra) and other decisions of other High Courts, the M.P. High Court had also taken a similar view. It was observed that entire sale proceeds of the assessee should not be added in his income and that the Tribunal has erred in doing so. 14. We may recall that the Tribunal, in the impugned judgement, relied on its previous judgement in case of Kishor Mohanlal Telwala. The said judgement of the Tribunal was apparently carried in appeal by the revenue. The High Court by a speaking order dated 24.4.2000, dismissed the appeal holding that no question of law was involved. Significantly, in case or Kishor Mohanlal Telwala, the assessee was engaged in the business of construction. In his case, unaccounted receipt of Rs.1.47 crores was detected. In this background, the Division Bench confirmed the view of the Tribunal and did not accept the contention of the revenue that as no accounts had been maintained to substantiate the expenditure incurred by I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 16 the assessee, the entire amount received by the respondent should be treated as income. The Court concluded that the Tribunal was justified in considering that the respondent assessee ought to have spent reasonable amount for the purpose of receiving such gross receipt. 15. It can, thus, be seen that consistently, this Court and some other Courts have been following the principle that even upon detection of on money receipt or unaccounted cash receipt, what can be brought to tax is the profit embedded in such receipts and not the entire receipts themselves. If that be the legal position, what should be estimated as a reasonable profit out of such receipts, must bear an element of estimation. 16. In view of the legal position that not the entire receipts, but the profit element embedded in such receipts can be brought to tax, in our view, no interference is called for in the decision of the Tribunal accepting such element of profit at Rs.26 lakhs out of total undisclosed receipt of Rs.62 lakhs. In other words, we accept the legal proposition, the Tribunal accepting of total undisclosed receipt of Rs.62 lakhs, would not give rise to any question of law.\" 9.1. Thus, the primary issue under consideration is whether the entire unaccounted receipts should be taxed as income or whether only the profit element embedded in these receipts should be considered. The assessee has relied on the Gujarat High Court’s judgement in President Industries (cited supra), wherein it was held that the entire amount of unaccounted sales cannot be treated as income. In that case, the Hon’ble Court have ruled that only the net profit element should be taxed, as the sales represent receipts from which the cost of goods sold must be deducted. 9.2. It is undisputed fact that the seized materials contain noting of both unaccounted receipts and unaccounted payments and they are relating to the business of the assessee. It cannot be denied that such unaccounted expenses would have been incurred out of unaccounted receipts. It is well settled principle of law that seized I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 17 material has to be read in its entirety. Accordingly, Ld AO was not justified in denying set-off of such unaccounted expenses against unaccounted income. Further the methodology adopted by Ld CIT(A) is not absolutely scientific and leaves room for arbitrariness. 9.3. It is well settled principle of law by the Jurisdictional High Court in the case of Navjivan Oil Mills -Vs- CIT reported in (2002) 252 ITR 417 (Guj) that seized material has to be read and accepted as a whole and it is not permissible to Pick and Choose theory or make further estimates therefrom unless and until there is cogent material in support of undertaking such an exercise. 9.4. The Hon'ble Supreme Court in the case of Godhra Electricity Co. Ltd. -Vs- CIT reported in [1997] 225 ITR 746 held that only real income has to be taxed in the hands of the assessee by observing as follows: \"..... 14. The question whether there was real accrual of income to the assessee-company in respect of the enhanced charges for supply of electricity has to be considered by taking the probability or improbability of realisation in a realistic manner. If the matter is considered in this light, it is not possible to hold that there was real accrual of income to the assessee-company in respect of the enhanced charges for supply of electricity which were added by the ITO while passing the assessment orders in respect of the assessment years under consideration. The AAC was right in deleting the said addition made by the ITO and the Tribunal had rightly held that the claim at the increased rates as made by the assessee- company on the basis of which necessary entries were made represented only hypothetical income and the impugned amounts as brought to tax by the ITO did not represent the income which had really accrued to the assessee-company during the relevant previous years. The High Court, in our opinion, was in error in upsetting the said view of the Tribunal. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 18 15. In the result, the appeals are allowed, the impugned judgment of the High Court is set aside and the questions referred by the Tribunal for opinion are answered in favour of the assessee-company and against the revenue. But in the circumstances, there will be no order as to costs.” 9.5. Following the above judicial precedents and considering the actual profit ratio as per the books of accounts at 12.98% as well as profit ratio on actual unaccounted transactions at 6.75%. Therefore in the interest of justice, we deem it to estimate 13% as the reasonable profit margin considering the facts and figures in the present case. Thus the Jurisdictional Assessing Officer is directed to adopt 13% profit margin on real estate business in the place of 14 % as determined by the Ld CIT[A]. Further substantial real income has also been taxed in the hands of other entities namely Sankalp Ventures LLP, Sankalp Organisers Pvt. Ltd. and Ginger Properties Pvt. Ltd. in respect of the Asst. Years 2013-14 to 2019-20. Thus Ld. CIT(A) was correct in allowing telescoping the unaccounted receipts. It is sell settled law that source of income and application of income cannot be taxed simultaneously. Since the assessee has been taxed on source of income, the Ld. CIT(A) has rightly granted the benefit of telescoping of payments against receipts. Hence Grounds raised by the Revenue is devoid of merits. 10. In the result the for the Asst. year 2018-19 Ground Nos 1 to 4 raised by the assessee are partly allowed and the Ground Nos. 1 & 3 raised by the Revenue are hereby dismissed. The remaining ground raised by the assessee are consequential or general in nature which does not require any adjudication. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 19 11. In the result, the appeal filed by the Assessee in IT[SS]A No.46/Ahd/2023 is partly allowed and the appeal filed by the Revenue IT[SS]A No.120/Ahd/2023 is hereby dismissed. ITA No. 434/Ahd/2023 filed by the Assessee and IT(SS)A No. 119/Ahd/2023 filed by the Revenue relating to the Asst Year 2019-20. 12. There is no change in the facts of the case except the disallowances made in the figures by the AO. Therefore respectfully following the decision rendered in assessee’s own case in IT(SS)A No.46/Ahd/2023 from Paragraph Nos. 9 to 9.5 will be squarely applicable to the facts of the present case. 13. In the result, the appeal filed by the Assessee in ITA No. 434/Ahd/2023 is partly allowed and the appeal filed by the Revenue IT[SS]A No.119/Ahd/2023 is hereby dismissed. IT(SS)A No.117 & 118/Ahd/2023 filed by the Revenue relating to Asst. Years 2018-19 & 2019-20 [Dilipkumar C Patel]: 14. These appeals are filed by the Revenue as against the appellate order dated 02-05-2023 passed by Commissioner of Income Tax (Appeals)-11, Ahmedabad relating to the Asst. Years. 2018-19 & 2019-20. The undisputed fact is that the assessee is working as Accountant and key person on Sankalp Group of concerns belonging to Mr. Robin R. Goenka. Pursuant to the search action, the Assessing Officer made protective addition in the hands of this assessee as well as substantive addition in the hands of Robin R. Goenka and Sankalp Organisers Pvt. Ltd. as follows: I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 20 Particulars Robin Goenka SOPL(#) Total Assessment Year 2018-19 2019-20 2019-20 Unaccounted Cash Receipt (Protective Basis) 1,47,90,000 27,02,83,500 - 28,50,73,500 Unaccounted Cash Expenses(Protective Basis) 24,63,72,451 2,53,60,000 - 27,17,32451 Unexplained expenses u/s 69C of the Act(Protective Basis) - 2,50,000 - 2,50,000 Cash found during search (Protective Basis) - - 5,58,350 5,58,350 Unaccounted cash receipt (Protective basis) - - 2,00,000 2,00,000 Total 26,11,62,451 29,58,93,500 7,58,350 55,78,14,301 (#) - Sankalp Organisers Private Limited 15. On appeal, Ld. CIT(A) considered the submissions of the assessee and deleted the protective addition made in the hands of the assessee by observing as follows: “12.2 have perused the facts of the case, the assessment order and the submission of the appellant. From the perusal of the assessment order passed in the case of the Robin Goenka and Sankalp Organisers Private Limited, it has been observed that the same has been made on substantive basis. Further even from the appeals filed by Robin Goenka and Sankalp Organizers Private Limited and submissions made by them, Shri Robin Goenka and Sankalp Organisers Private Limited has nowhere disputed that the said transactions and have owned up the transactions. Considering the said facts on record, the additions been considered in the hands of Robin Goenka and Sankalp Organisers Private Limited even for adjudication purposes, the additions made in the hands of the appellant on protective basis is hereby deleted.” 16. The Grounds of Appeal raised by the Revenue in IT(SS)A No. 117/Ahd/2023 are as follows: 1. In the facts and on the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs.26,11,62,451/- made by Assessing Officer on I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 21 protective basis on account of unaccounted cash receipts and unaccounted cash expenses, considering that the additions are made in the case of Shri Robin Goenka and M/s. Sankalp Organisers Pvt Ltd on substantive basis and are owned up by them, which is factually incorrect, as Shri Robin Goenka didn't owned up the same and Ld. CIT(A) only confirmed Rs.3,46,50,000/- (@14% of unaccounted cash expense) and deleted the addition of unaccounted cash receipts. 2. In the facts and on the circumstances of the case, Ld. CIT(A) erred in holding that the addition made in the case of Shri Robin Goenka and M/s.Sankalp Organisers Pvt. Ltd. on substantive basis and are owned up by them, which is factually incorrect. The addition was made on protective basis and appeal proceedings are still pending in the case of M/s. Sankalp Organisers Pvt Ltd and Shri Robin Goenka at various stages of appeal.” 16.1. The Grounds of Appeal raised by the Revenue in IT(SS)A No. 118/Ahd/2023 are as follows: 1. In the facts and on the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs. 30,03,01,850/- made by Assessing Officer on protective basis on account of unaccounted cash receipts and unaccounted cash expenses, considering that the additions are made in the case of Shri Robin Goenka and M/s. Sankalp Organisers Pvt. Ltd on substantive basis and are owned up by them, which is factually incorrect, as Shri Robin Goenka didn owned up the same and Ld. CIT(A) only confirmed Rs.3.46,50,000/- (@14% of unaccounted cash expense) and deleted the addition of unaccounted cash receipts. 2 In the facts and on the circumstances of the case, Ld. CIT(A) erred in deleting the addition of Rs.3,00,000/- made by Assessing Officer on protective basis on account of cash found during the search, considering that the assessee regularly maintaining cash in hand-between 3 to 4 lakh. However, assessee failed to explain the source of same before A.O 3. In the facts and on the circumstances of the case, Ld. CIT(A) erred in holding that the addition made in the case of Shri Robin Goenka and M/s Sankalp Organisers Pvt. Ltd. on substantive basis and are owned up by them, which is factually incorrect. The addition was made on protective basis and appeal proceedings are still pending in the case of M/s. Sankalp Organisers Pvt Ltd and Shri Robin Goenka at various stages of appeal.” I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 22 17. The Revenue could not dispute that substantive addition made in the hands of Robin R. Goenka and Sankalp Organisers Pvt. Ltd. Consequently the Protective addition made in the hands of the employee Accountant is liable to be deleted for both the Asst. Years 2018-19 and 2019-20. 17.1. In the Asst. Year 2019-20, the A.O. made another addition of Rs.3,00,000/- which was deleted by Ld. CIT(A) by observing as follows: “18.2 Further with regards to the addition of Rs.3 lacs found at the time of search from the appellant, it has been contended by the appellant that the appellant has been regularly maintaining such cash in hand between 3 to 4 lacs. The appellant relied upon the cash book submitted by the appellant before the AO for A.Y.2016-17, which justified the cash deposits of Rs.4,14,805/- and the said fact has also been accepted by the A.O. Further the appellant contended that it was never required to provide any justification or explanation by the AO for the said cash found from the appellant. The appellant also relied upon the CBDT instruction issued at the time of Demonetization, wherein for small individuals a cash limit of Rs.2.5 lacs was considered as explained. The appellant contended that in his statement recorded on oath at the time of search, he had stated that he had been working with Sankalp Group since past 27 years and drawing a salary of Rs.39,000/- per month and his daughter was also doing part time job in hospital drawing a salary of 4,500/-. 18.3 Considering the overall facts of the case and the contention of the AO and the submission of the appellant, I find merits in the submission of the appellant. Accordingly, the addition of Rs.3,00,000/- made is directed to be deleted.” 17.2. The Revenue could not justify the deletion made by Ld. CIT(A) with relevant materials. Thus this Ground No. 2 raised by the Revenue is also liable to be dismissed. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 23 18. In the result, the appeal filed by the Revenue IT(SS)A No.117 & 118/Ahd/2023 are hereby dismissed. IT(SS)A Nos.72 to 75/Ahd/2023 filed by the Revenue relating to Asst. Years 2013-14, 2015-16 to 2017-18 [Dimple R Goenka] 19. The assessee herein is the wife of Mr. Robin R. Goenka, where search action taken place on 30-10-2018. Assessments were framed u/s 153A of the Act for the Asst. Years 2013-14, 2015-16 to 2017-18 whereby, following types of additions were made by the AO are summarised as follows: Sr. No. Particulars Assessment Years 2013-14 2014-15 2015-16 2016-17 2017-18 Total * Return Income 28,34,950 21,30,500 62,88,470 94,54,120 50,38,990 2,94,34,430 1 Considered sale of shares as penny stock A JRI Industries & Infrastructure Limited 31,50,000 - - - - 31,50,000 B Kushal Tradelink - - - 1,50,01,944 - 1,50,01,944 C Alora Trading - - - - 28,73,400 28,73,400 2 Unsecured Loans u/s 68 of the Act 6,55,72,706 5,22,51,753 15,86,80,953 5,53,96,556 33,19,01,968 3 Disallowance of expenses u/s 14A r.w. Rule-80 1,07,373 65,658 4,29,347 47,81,026 13,97,966 1,50,01,944 Total Additions 6,88,30,079 65,658 5,26,81,100 17,84,63,923 5,96,67,922 36,79,29,256 Assessed Income 7,16,65,029 21,96,158 5,89,69,570 18,79,18,043 6,47,06,912 38,54,55,712 I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 24 20. On appeal against the assessment orders, Ld CIT[A] deleted the additions by observing as follows: “6.1. During the course of appellate proceedings, the appellant has filed written submission in support of its claim. In the submission, the appellant has stated that the AO has sought to make the addition on the basis of verification of return of income (i.e. computation of total income and balance sheet) filed u/s.139 of the Act and not on the basis of any incriminating material found during the search. The appellant has further stated that on the date of search on 30.10.2018, the assessment for the year under appeal was not pending. Therefore, question of abatement of assessment under the second proviso to Section 153A of the Act did not arise and also the AO had no authority or jurisdiction to make the impugned disallowance which is made dehors incriminating material found during the search. Therefore, the addition on account of bogus sale of penny stock u/s.68 of the Act, Disallowance of Short Term Capital loss, Unexplained Cash Credit u/s 68 of the Act and disallowance of expenses u/s 14A r.w. Rule 8D so made is therefore not sustainable in law and is liable to be deleted. The appellant has also relied on the decision of the Hon'ble Jurisdictional High Court of Gujarat in the case of PCIT-4 Vs. Saumya Construction Pvt. Ltd. and other judicial pronouncement of the Hon'ble High Court and Hon'ble Tribunal, where the Hon'ble Courts have held that in case of unabated assessment u/s. 153A of the Act, addition could be made only on the basis of incriminating material found during the search 6.3 On careful consideration of relevant facts along with assessment order, it is observed that the appellant had filed original return of income from Α.Υ.2013-14 to A.Y 2017-18 for the years under consideration as under: Assessment Year Date of filing of return Returned Income/(Loss) 2013-14 14/10/2013 28,34,950 2014-15 30/11/2014 21,30,500 2015-16 30/09/2015 62,83,140 2016-17 17/10/2016 94,54,120 2017-18 31/10/2017 50,38,990 6.4 Further, a search action u/s. 132 of the Act was conducted on 30/10/2018 in the case of Sankalp Group of concerns inter-alia covering the appellant. It is an undisputed fact that on the date of search, time limit for issuing notice under Section 143(2) of the Act had expired for I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 25 Assessment years from A.Y 2013-14 to A.Y 2017-18 which means that Assessment years from A.Y 2013-14 to A.Y 2017-18 are unabated year for the purpose of making assessment under Section 153A of the Act. Further, ongoing through the assessment order and appellant's submission, it can be concluded that the AO had made entire addition of Rs.36,79,29,256/- dehors any incriminating material found and seized during the course of search. It is observed that no live nexus with the incriminating material found during the course of search in the case of the appellant was established by AO related to the additions. 21. Aggrieved against the appellate orders Revenue are in appeal raising the following Grounds of Appeal IT(SS)A No. 72/Ahd/2023 [A.Y. 2013-14] are as follows: 1 In the facts and on the circumstances of the case, the Ld.CIT(A) has erred IN law in deleting the additions made in the assessment order, relying on the decision of Hon'ble Gujarat High Court in the case of Saumya Construction without appreciating the facts that there is no restrictive provision as per section 153A, for the AO to assess or reassess the income of the assessee only on the basis of the incriminating material. 2. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 26,47,500/- made on account of disallowance of short term capital loss. 3. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 5,02,500/- made on account of payout on sale of penny stock. 4. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 6,55,72,706/- made u/s 68 of the Act. 5. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 1,07,373/- disallowance made u/s 14A r.w.r. BD of the Act. 6. In the facts and on the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 7. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 26 21.1. The Grounds of Appeal raised by the Revenue in IT(SS)A No. 73/Ahd/2023 [A.Y. 2015-16] are as follows: 1 In the facts and on the circumstances of the case, the Ld CIT(A) has erred on facts and law in deleting the additions made in the assessment order, relying on the decision of Hon'ble Gujarat High Court in the case of Saumya Construction without appreciating the facts that there is no restrictive provision as per section 153A, for the AO to assess or reassess the income of the assessee only on the basis of the incriminating material 2 In the facts and on the circumstances of the case, the Ld CIT(A) has erred in law in deleting the addition made of Rs. 5,22,51,753/-made u/s 68 of the Act. 3. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 4,29,347/- disallowance made u/s 14A r.w.r. 8D of the Act. 4. In the facts and on the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 21.2. The Grounds of Appeal raised by the Revenue in IT(SS)A No. 74/Ahd/2023 [A.Y. 2016-17] are as follows: 1 In the facts and on the circumstances of the case, the Ld CIT(A) has erred on facts and law in deleting the additions made in the assessment order, relying on the decision of Hon'ble Gujarat High Court in the case of Saumya Construction without appreciating the facts that there is no restrictive provision as per section 153A, for the AO to assess or reassess the income of the assessee only on the basis of the incriminating material. 2. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 1,50,01,944/- made on account of payout on bogus sale of penny stock. 3. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 15,86,80,953/- made u/s 68 of the Act. I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 27 4. In the facts and on the circumstances of the case, the Ld CIT(A) has erred in law in deleting the addition made of Rs. 47,81,026/- disallowance made u/s 14A r.w.r. BD of the Act. 5. In the facts and on the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 6. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 21.3. The Grounds of Appeal raised by the Revenue in IT(SS)A No. 75/Ahd/2023 [A.Y. 2017-18] are as follows: 1. In the facts and on the circumstances of the case, the Ld CIT(A) has erred on facts and law in deleting the additions made in the assessment order, relying on the decision of Hon'ble Gujarat High Court in the case of Saumya Construction without appreciating the facts that there is no restrictive provision as per section 153A, for the AO to assess or reassess the income of the assessee only on the basis of the incriminating material. 2. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 28,73,400/- made on account of payout on bogus sale of penny stock. 3. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 5,53,96,556/- made u/s 68 of the Act. 4. In the facts and on the circumstances of the case, the Ld.CIT(A) has erred in law in deleting the addition made of Rs. 13,97,966/- disallowance made u/s 14A r.w.r. 8D of the Act. 5. In the facts and on the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 6. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 22. Ld Senior Counsel submitted that none of the additions made by the Ld AO in all the four appeals in question preferred by the I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 28 Revenue are NOT based on incriminating material found during the course of search. Thus all the assessment years in question are unabated assessment years and limitation for issuing notice u/s 143(2) for assessment years in question will be as follows: Asst Years Date of filing Limitation for issuing original ITR notice u/s 143(2) 2013-14 14.10.2013 30.09.2014 2015-16 30.09.2015 30.09.2016 2016-17 17.10.2016 30.09.2017 2017-18 31.10.2017 30.09.2018 22.1. As is evident from the above table, limitation for issuing notice u/s 143(2) for all the assessment years in question expired prior to the date of search namely 30.10.2018. Thus, all the assessment years in question are unabated assessment years. It is well settled that assessment u/s 143(3) r.w.s. 153A of the Act is to be framed strictly on the basis of incriminating material found during the course of search action carried out in the case of the assessee concerned. Reliance is placed on following decisions:  PCIT vs. Abhisar Buildwell P. Ltd.–(2023) 454 ITR 212 (SC);  PCIT vs. Saumya Construction – (2017) 387 ITR 529 (Guj);  CIT vs. Kabul Chawla – (2015) 380 ITR 573 (Del.);  Priyablue Shipping P. Ltd. – IT(SS)A 40-41/Ahd/2022;  PCIT - Kutch Salt & Allies Ind Ltd. – TA 283 of 2023 (Guj)  PCIT vs. Backbone Projects Ltd. – TA88& 205 of 2023 (Guj) 22.2. Thus Ld CIT(A) has rightly held given a factual finding that none of the additions in the captioned appeals are based on any incriminating material found during the course of search. Under I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 29 such facts and circumstances, additions made by AO in all the years in question have been rightly deleted by CIT(A). 23. Ld DR appearing for the Revenue could not contravent the facts and not placed on record any seized material from the premises/related of the assessee. 24. We have given our thoughtful consideration and perused the materials available on record. It is undisputed fact that the Ld AO made entire addition of addition on account of sale of shares as penny stock, unsecured loan u/s.68 of the Act and disallowance u/s.14A rwr 8D, though there is no seized material during the course of search proceedings. Further perusal of assessment orders nowhere discuss about any seized materials for the asst. years 2013-14, 2015-16 to 2017-18 which are also abated assessment years. 24.1. The Hon’ble Supreme Court in the case of Abhisar Buildwell (supra) has held that no addition can be made in respect of completed assessments in the absence of any incriminating material. The conclusion recorded by the Apex Court in Para 14 of the judgement reads as follows: “14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 30 (iii) in case any incriminating material is found/ unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. 24.2. The Hon’ble Apex Court has categorically held that the AO would assume the jurisdiction to assess or re-assessee the “total income” by taking into consideration the incriminating material unearthed during the search and the ‘other material’ available with the AO, including the income declared in the returns. The ratio of the judgement is that the incriminating material found during the search gives the AO the jurisdiction to assess or reassess the ‘total income’ u/s.153A of the Act of the unabated/completed assessment. In the absence of any incriminating material unearthed during the search, the AO would not have the I.T.(SS)A No. 46/Ahd/2023 and Ors. A.Ys. 2018-19 & ors Page No Robin R Goenka. Vs. ACIT 31 jurisdiction to proceed in the unabated/completed year(s), only on the basis of other material. 24.3. Respectfully following the judicial precedents the additions made by the Ld AO without any seized materials are liable to be deleted. Thus we do not find any merits in the Grounds of Appeal filed by the Revenue and the findings arrived by the Ld CIT[A] does not require any interference. 25. In the result, the appeal filed by the Revenue IT[SS]A Nos.72 to 75/Ahd/2023 are hereby dismissed. Order pronounced in the open court on 30 -05-2025 Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 30/05/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद "