AI Insights
The case involves multiple appeals by Mahendra Kumar Goyal against the orders of the CIT(A) and the AO concerning additions made to his income for various assessment years. The primary issues revolved around the alleged unexplained investments and income from unaccounted sources, which were based on documents seized during a search operation. The Tribunal examined the legal and factual basis of these additions, considering the principles of natural justice, the provisions of the Income Tax Act, and relevant judicial precedents. The Tribunal found that the additions were not sustainable as the income had been previously assessed and offered for tax, and the procedural requirements for reassessment were not met.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 776484 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-09-2025
Order Result
Allowed
Bench Allotted
A
Assessment Year
2020-2021
Appeal Filed On
28-03-2025
Judgement Text
"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA Nos. 493, 495 to 498, 500/JP/2025 fu/kZkj.k o\"kZ@Assessment Years : 2014-15 to 2016-17, 2018-19 to 2020-21 Mahendra Kumar Goyal Ward No. 2, Shahpura Road Neem Ka Thana, Sikar cuke Vs. ACIT/DCIT Central Circle-03, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACFPG0306G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P. C. Parwal, CA jktLo dh vksj ls@ Revenue by : Mrs. Anita Rinesh, JCIT, Sr. DR lquokbZ dh rkjh[k@ Date of Hearing : 09/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 15/09/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Feeling dissatisfied with the order of the learned Commissioner of Income Tax, Appeals-4, Jaipur-04 [ for short ‘CIT(A)’ ] as detailed herein below the assessee preferred the present appeal ITA Number Assessment Year Date of order of CIT(A) Section under which AO passed the order* Date of order Details of the AO who made the assessment* 493/JP/2025 2014-15 08.01.2025 153A 29.09.2021 ACIT, CC-3, JPR 495/JP/2025 2016-17 27.01.2025 153A 29.09.2021 ACIT, CC-3, JPR 496/JP/2025 2018-19 12.03.2025 153A 30.09.2021 ACIT, CC-3, Printed from counselvise.com 2 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal JPR 497/JP/2025 2019-20 27.01.2025 153A 29.09.2021 ACIT, CC-3, JPR 498/JP/2025 2020-21 28.01.2025 143(3)r.w.s.153B 30.09.2021 ACIT, CC-3, JPR 500/JP/2025 2015-16 08.01.2025 153A 29.09.2021 ACIT, CC-3, JPR *The section reference made in this order is referred to the Income Tax Act, 1961 [for short Act]. The reference of the ACIT, CC-3,JPR means the Assistant Commissioner of Income Tax, Central Circle-3, Jaipur [ for short AO]. Since the issue raised in all the six appeals were identical were heard together and are disposed of by a common order. 2. First we take up the appeal of the assessee in ITA no. 493/JP/2025 for assessment year 2014-15 thereby he raised the following grounds ; 1. The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. 2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 1 lacs u/s 69 of the Act on account of alleged unexplained investment in advances on the basis of Pg 57 of Exhibit 4 of AS-1 by not accepting the explanation that it is a memorandum noting without name, the source of giving such advance is out of the cash available as per the cash book and the amount is received back by holding that the explanation of assessee is not reliable and there is no evidence of receipt back of the amount few days after. 3. The appellant craves to alter, amend and modify any ground of appeal. Printed from counselvise.com 3 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 4. Necessary cost be awarded to the assessee.” 3. Succinctly, the fact as culled out from the records is that in this case, original return of income was filed by assessee on 29.11.2014, declaring total income at Rs.25,59,470/- for the Assessment Year 2014-15. Thereafter, assessment u/s 143(3) of the Act was made vide order dated 22.12.2016 wherein the returned income was accepted. A search was conducted on 13.06.2019 in the case of \"Goyal Group\" Neem Ka Thana, Sikar to which the assessee belongs. Various assets/books of account and documents were found and seized as per annexure prepared during the course of search. The jurisdiction over the case was assigned to ACIT, CC- 3, Jaipur vide order u/s 127 of the Act on 26.02.2021 by the Pr. Commissioner of Income tax-2, Jaipur. Accordingly, notice u/s 153A of the IT Act, 1961 for this year was issued on 23.03.2021 which was duly served upon the assessee. In compliance to the notice u/s 153A of the Act return of income was e-filed on 05.04.2021, declaring total income of Rs.25.59,470/- for the year under consideration. Record reveals that the assessee is proprietor of M/s Mahendra Kumar Goyal and also partner in M/s Galaxy Industries, M/s Goyal Mineral Printed from counselvise.com 4 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Grinding Mills and director in M/s Ganwari Silica Pvt. Ltd. Apart from the business income, the assessee has earns income from salary and interest on FDR. Statutory notices as required u/s 143(2) & 142(1) of the Act were issued along with questionnaire requiring certain details/ information from the assessee. In response to the above notices, details called for were filed by the assessee. Record also reveals that while search a Laptop was found from residence of Shri Daulatram Goyal at Galaxy Bhawan, Shahpura Road, Ward No. 4, Neem ka Thana, Sikar. In the post search enquiry data was extracted from the images of this laptop and it has been found that the assessee has given cash loans to various persons and earned interest on this loans. Name of persons to whom loans advanced was not given in that page but date of advancing loan and dates on which interest has been received was mentioned. From the said details, ld. AO noted that assessee has advanced loans from time to time and earned interest income thereon. Based on that record ld. AO issued a show cause notice asking the assessee to show cause as to why a sum of Rs. 16,08,000/- should not be added to his total income on account of cash loans given by him from unexplained sources and interest earned on those loans. The assessee submitted his reply on 19.09.2021 contending that:- Printed from counselvise.com 5 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal \"Alleged unaccounted cash loan extracted from the images of Laptop As per the showcause notice in post search enquiry data was extracted from the laptop and on that basis it has been stated that assessee has advanced certain amount during assessment year 2014-15 to 2017-18 amounting to Rs.90 Lacs on which interest is calculated at Rs. 21,94,167/- and accordingly it is proposed to make addition of Rs. 1,11,94,167/-. It is submitted that from the residential premises of the assessee no laptop was found as evident from annexure AS of Panchnama dated 13.06.2019 Neither in search nor in post search proceedings the copy of such extracted data from the laptop of assessee was provided nor confronted to assessee According to the assessee he has never given any such loan or received any interest thereof. Therefore it is requested to provide the source of such data extracted by you so that the detail explanation, if any required, can be submitted\" Ld. AO considered the reply of the assessee but not found acceptable as assessee has stated that no such laptop was found from the residence of assessee. This paper was extracted from the laptop of Shri Narayan Goyal, who is son of assessee. This paper contains the complete detail of loan transaction with date of loan and there is also periodical working of interest amount. Though name has not been mentioned on the paper but all other things such as amount of loan, date of loan, interest calculation was very well mentioned on the paper. Thus, ld. AO concluded that the assessee has advanced loan to various person and earned interest income thereon. Hence unexplained investment in loan & advances amounting Rs. 15,00,000/- has been added to income u/s 69 of the Act and interest income of Rs. 1,08,000/- on those loans and advances has been added as interest income of the assessee for the year under consideration. Printed from counselvise.com 6 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Ld. AO also on perusal of the seized document ie, imaging of \"One Plus T-6\" mobile phone of the assessee Exhibit-4 of Annexure-AS-1 from the residence of the assessee, out the above data, page no. 57 of the above Exhibit, it is noticed that the assessee has made cash advances amounting to Rs.1,00,000/- during the year under consideration. The assessee was asked to explain the source of the above expenses along with supporting evidences. In response the assessee replied as under : \"On page 57 (PB-47) of this Exhibit there is payment/ receipt of some amount. It appears to be advance amount as amount of Rs. 2,00,000/- has been received back and amount of Rs. 45,000/- has been paid within short period of time. In the absence of the name it is not possible to get it verified However from the paper it appears that on 21-02-2016 amount of 2,00,000/- is given for a temporary period which is received back on 02-03-2016 thereafter Rs. 45,000/- was taken for temporary period on 17-11-2016 which was paid back on 24-11-2016. It appears that that these advances were given out of cash balance of group business concerns available with assessee. As per cash books of group concern, assessee is having sufficient balance to advance these amount. However against amount of Rs. 1,00,000/- given on 18-03-2014 the corresponding receipt has not been noted. In any case on this paper temporary amount given/taken and amount received back/ taken is noted and therefore in the absence of any name no adverse is required to be drawn.\" Ld. AO considered the reply filed by the assessee but not found acceptable. As is evident from the above submission of the assessee that amount of Rs. 2 lacs & Rs. 45,000/- is temporary advance and same has been received back within a period of few days. This transaction pertains to AY 2016-17. However, the amount of Rs. 1 lacs advanced on 18.03.2014 has not yet received back and assessee has failed to prove source of the Printed from counselvise.com 7 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal aforesaid investment in advances. Thus, advance amount of Rs. 1,00,000/- has been added to income u/s 69 of the Act. 4. Aggrieved from the order of Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: Ground No. 1 4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The fact of this ground is that the Id. AO observed that during search a laptop was found from the residence of Shri Daulatram Goyal at Galaxy Bhawan, Shahpura Road, Neem ka Thana, Sikar. In post search enquiry data was extracted from this laptop and it was found that appellant has given cash loan to various persons and earned interest on such loan. In this regard the appellant claimed during the assessment proceedings that the impugned laptop was not found from his premises and as such the addition cannot be made in his case. In In this regard the learned AO has concluded in the assessment order as under- The reply of the assessee has been considered but not found acceptable as assessee has stated that no such laptop was found from the residence of assessee. This paper was extracted from the laptop of Shri Narayan Goyal, who is son of assessee. This paper contains the complete detail of loan transaction with date of loan and there is also periodical working of interest amount. Though name has not been mentioned on the paper but all other thing such as amount of loan, date of loan, interest calculation has been mentioned on the paper. Thus assessee has advanced loan to various person and earned interest income thereon. In the appeal the appellant has argued that no laptop was found from the assessee Even according to the AO the laptop was found from residence of Shri Daulat Ram Goyal. This is evident by panchnama dt. 13.06.2019 (PB 7-9) according to which at serial no. 13 of annexure AS, the laptop was seized. The Printed from counselvise.com 8 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal AO has incorrectly stated that the paper extracted from laptop of Narayan Goyal is son of the assessee. Infact Shri Narayan Goyal is son of Shri Daulat Ram Goyal and not son of the assessee as is evident from the panchanama his PAN and Aadhar (PB 9A). Thus when laptop belongs to Narayan Goyal and no evidence is brought on record by the department either during course of search or in post search proceeding or during the assessment proceedings that the transaction noted on the paper extracted from the laptop of Narayan Goyal belongs to or pertain to the assessee, no presumption can be drawn against the assessee u/s 292C of the Act and therefore the addition made by AO is prima facie incorrect and bad in law. Thus when assessee has denied any relationship of this paper with him, the onus shift to the AO u/s 69 of the Act to proof that the investment is made by the assessee In the absence of any such evidence, no addition can be made in the hands of the assessee On perusal of the overall facts it is noted that this paper is extracted from the laptop found from the residence of Shri Daulatram Goyal at Galaxy Bhawan, Shahpura Road, Neem ka Thana, Sikar. The Id. AO has stated that the paper was extracted from the laptop of Shri Narayan Goyal, who is son of assessee. However from the PAN and from aadhar card filed by the appellant it is seen that Sh Narayan Goyal is son of Sh Daulat Ram Goyal. Neither in search nor in post search enquiry any statement on this paper is seen to have apparently been recorded. Therefore the claim of the appellant that addition on the basis of this paper can't be made in his hands appears to be acceptable. At the same time it is noted that the appeal of Sh Daulat Ram Goyal is pending with the undersigned and Sh Daulat Ram Goyal has indulged into loan activities and also going by the investigation and finding of the learned AO the income mentioned in the impugned paper was found to be taxable in the hands of the father of Sh Narayan Goyal who is Sh Daulat Ram Goyal. Thus it appears that the addition in the end of the appellant was made by mistake and the addition is to be made in the hands of Sh Daulat Ram Goyal Accordingly, this ground of appeal is adjudicated in the above terms. For statistical purposes the ground is treated as allowed. Ground No. 2 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- Printed from counselvise.com 9 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal The fact of this ground is that in search from the mobile \"One Plus T-6\" of the appellant certain images were taken out marked as Exhibit 4 Annexure AS 1. Page 57 of this Exhibit (PB 10) is noting of some amount given and received back. No name is mentioned on this paper. The assessee vide letter dt. 19.09.2021 (PB 1-5) explained that the advances noted on the paper is temporary advance given out of the cash balance of group business concerns which was received back and therefore in the absence of any name no adverse inference is to be drawn. The Id. AO held that the amount of Rs. 1,00,000/- advanced on 18.03.2014 has not been received back and assessee has failed to prove the source of aforesaid investment in advances. Accordingly Id. AO made addition of Rs 1,00,000/- u/s 69 of the Act. The appellant has contended that the noting on this paper without any name is a memorandum noting Against the amount of Rs. 1,00,000/-dt, 18.03.2014 there is no noting of the amount received back but against the noting of Rs 2,00,000/- dt 21.02.2016 the amount received back is on 02.03.2016 & against the noting of Rs. 45,000/-dt. 24.11.2016 the amount received back is on 17. 11.2016. The subsequent noting indicate that the amount given on 18.03.2014 is also received back within few days but by mistake the date on which the amount is received back is not noted. Therefore it cannot be presumed that this amount is not received back when the subsequent advance given has been received back. So far as source of advance given on 18.03.2014 of Rs. 1,00,000/- is concerned it may be noted that as per the cashbook of the assessee (PB 11-13) he has the availability of cash of Rs. 4,55,275/-on 18.03.2014 which is the source of giving advance of Rs. 1,00,000/- but since it has been received back within few days the same is not recorded in the cashbook On perusal of the overall facts it is noted that the appellant has accepted the fact this advance is given by him. There is no mention of receipt back of the amount on the paper and therefore it can't be presumed that the same is received back few days after. When receipt back of other amounts are mentioned then the practice is to record the receipt and if there is no record of receipt then it means the amount was not received back. Further balance in cash book has no relation as there is no such entry of advance given and also the same is not reliable in the facts of the case Accordingly the addition of Rs. 100000/- made by the AO is hereby confirmed. At the same time it is seen that the facts need to be examined from the perspective of violation of section 269SS and 269T of the Act by the loanee (who received advance from appellant). The learned AO is directed to examine the Printed from counselvise.com 10 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal same from the perspective of penalty u/s 271D and 271E of the Act and make a reference to the Jt. Commissioner/Addl. Commissioner. In the result this ground of appeal is adjudicated in above terms and is hereby treated as dismissed. 6. Ground of Appeal No. 3 is as under: Ground No. 3: Assessee craves the right to add, alter or amend any of the grounds of appeal. 6.1 The appellant has not added or altered any of the above mentioned grounds of appeal. Accordingly such mention by the appellant in its ground is treated as general in nature, not needing any specific adjudication and is accordingly treated as disposed off. 7. In the result, the appeal of the appellant is partly allowed.” 5. Aggrieved with the above finding so recorded by the ld. CIT(A), the assessee preferred the present appeal on the two grounds, one challenging the direction of the ld. CIT(A) while deleting the addition and another for sustaining the addition of Rs. 1,00,000/-. To support the grounds raised by the assessee, ld. AR of the assessee, has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below: The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. Printed from counselvise.com 11 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Facts & Submission:- 1. Assessee is a proprietor of M/s Mahendra Kumar Goyal, partner of M/s Galaxy Industries, & M/s Goyal Mineral Grinding Mills and director of M/s Ganwari Silica Pvt. Ltd. He filed his return of income on 29.11.2014 declaring total income of Rs.25,59,470/-. 2. A search u/s 132 was carried out on Goyal Group, Neem Ka Thana, Sikar on 13.06.2019 of which assessee is one of the party. In response to notice issued u/s 153A dt.23.03.2021 return was filed on 05.04.2021 declaring the same income as shown in original return. 3. The AO at page 2-5, para 5 of the assessment order observed that during search a laptop was found from the residence of Shri Daulat Ram Goyal at Galaxy Bhawan, Shahpura Road, Neem ka Thana, Sikar. In post search enquiry data was extracted from this laptop and it was found that assesse has given cash loan to various persons and earned interest on such loan. The name of person to whom loan was advanced is not given on this page but date of advancing loan and the date on which interest has been received is mentioned on this page. As per the paper, the assessee has given cash loan at an interest rate of 10.80% / 12% p.a. during financial year 2013-2014 to 2016-2017. In the year under consideration cash loan of Rs.15,00,000/- was given on which interest for the period 02.08.2013 to 31.03.2014 works out at Rs.1,08,000/-. Accordingly a show cause notice was issued as to why Rs. 16,08,000/- should not be added to the total income. 4. The assessee vide letter dt.19.09.2021 (PB 16, point no. ix) submitted that from his residential premises no laptop was found. Neither in search nor in post search proceedings copy of the extracted data from the laptop was provided or confronted. He has not given any such loan or received any interest thereon. Request was made to provide the source of such extracted data. The AO however held that paper (PB 6) was extracted from the laptop of Shri Narayan Goyal, who is the son of assessee. The paper contains complete details of loan transactions along with periodical working of interest amount though the name is not mentioned on the paper. Accordingly it is presumed that assessee advanced Rs.15,00,000/- which is unexplained investment u/s 69 of the Act & assessee earned interest of Rs.1,08,000/- on such advances for which addition is made. 5. The Ld. CIT(A) at para 4.2 page 5 & 6 held that from the PAN and aadhar card of Shri Narayan Goyal it is found that he is son of Daulat Ram Goyal and not the assessee. Statement of the assessee on this paper is not recorded and Printed from counselvise.com 12 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal therefore addition on the basis of this paper cannot be made in the hands of the assessee. However, the Ld. CIT(A) further observed that since the appeal of Shri Daulat Ram Goyal is pending before him, he presumed that the same is taxable in the hands of father of Shri Narayan Goyal i.e., Shri Daulat Ram Goyal and thus a finding is given that addition in the hands of the assessee was made by mistake and the addition is to be made in the hands of Daulat Ram Goyal. 6. It is submitted that the Ld. CIT(A) rightly held that the addition on the basis of paper extracted from the laptop of Narayan Goyal at the residence of Shri Daulat Ram Goyal cannot be made in the hands of the assessee but his further direction that addition is to be made in the hands of Shri Daulat Ram Goyal is only on presumption and surmises. On the paper (PB 6) the name of Daulat Ram Goyal is not appearing. The Ld. CIT(A) has otherwise not brought on record any evidence to presume that the paper record the advance given by Daulat Ram Goyal. Hence, the finding given by CIT(A) that addition on the basis of the paper extracted from the laptop of Shri Narayan Goyal is to be made in the hands of Daulat Ram Goyal is beyond the powers given u/s 251 of the Act in deciding the appeal of the assessee. Hence the finding given by CIT(A) to that extent be expunged. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.1 lacs u/s 69 of the Act on account of alleged unexplained investment in advances on the basis of Pg 57 of Exhibit 4 of AS-1 by not accepting the explanation that it is a memorandum noting without name, the source of giving such advance is out of the cash available as per the cash book and the amount is received back by holding that the explanation of assessee is not reliable and there is no evidence of receipt back of the amount few days after. Facts & Submission:- 1. In search, from the mobile of the assessee, print out of images extracted were annexed as Exhibit 4 of Annexure AS 1. Page 57 of this Exhibit (PB 10) is noting of some amount given and received back without any name. The assessee vide letter dt.19.09.2021 (PB 2 point no. 7) explained that from the paper it appears that on 21.02.2016 amount given for a temporary period is received back on 02.03.2016. Thereafter Rs.45,000/- taken on 17.11.2016 was paid back on 24.11.2016. However, against amount of Rs.1,00,000/- dt.18.03.2014, there is no corresponding amount noted but from the paper it is Printed from counselvise.com 13 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal evident that amount given/taken is for a temporary period and therefore in the absence of any name no adverse inference is to be drawn. 2. The AO, however, held that the amount of Rs.1,00,000/- advanced on 18.03.2014 has not been received back and assessee has failed to prove the source of the aforesaid investment in advances. Accordingly, addition of Rs.1,00,000/- was made u/s 69 of the Act. 3. Before the CIT(A) the assessee alternatively contended that as per the cash book (PB 11-13), he has the availability of cash of Rs.4,55,275/- on 18.03.2014 but since the amount is given for a temporary period, neither the entry for amount given is made nor the entry of amount received back is made. The Ld. CIT(A) however at page 8 para 2.5 of the order held that assessee has accepted that advance is given by him but in the absence of receipt back of the amount the same cannot be presumed. Further balance in cash book has no relevance as no entry of advance given is recorded in the cash book. Accordingly, addition made by the AO is confirmed. 4. It is submitted that the noting on this paper without any name is only a memorandum noting. Against the amount of Rs.1,00,000/- dt.18.03.2014 there is no noting of the amount received back but against the noting of Rs.2,00,000/- dt.12.02.2016 the date of amount received back is 02.03.2016 & against the noting of receipt of Rs.45,000/- dt.17.11.2016 the date of amount paid back is 24.11.2016. The subsequent noting indicates that the amount given on 18.03.2014 is also received back within few days but the date on which the amount is received back is not noted. Therefore it cannot be presumed that this amount is not received back when the subsequent advance given/taken has been received back/paid back. Otherwise also, as per the cash book of the assessee (PB 11), he has cash balance of Rs. 4,55,275/- on 18.03.2014 which is the source of advance of Rs.1,00,000/-. However in the cashbook neither the advance given nor the advance received back is recorded as it was for a temporary period. The Ld. CIT(A) has incorrectly held that assessee has accepted that advance is given by him. Infact the assessee in order to explain the paper has stated that even if the transaction on the paper are considered to be of assessee, he has the source for such advance. In these facts the addition made by the AO and conformed by Ld. CIT(A) is unjustified and hence the same be deleted. ITA No. 500/JPR/2025, AY 2015-16 Printed from counselvise.com 14 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Ground No.1 The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. The facts and submission of this ground is same as in ground no.1 for AY 2014- 15 and therefore the same be considered in deciding this ground. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.6,23,963/- u/s 69A of the Act in the hands of assessee on account of advances given to employees noted in Exhibit AS-37 ignoring that such advances were given by various group concerns of the assessee to its employees and not by the assessee himself. He has further erred in not accepting the contention of assessee that opening advances of Rs.4,23,314/- noted therein were given prior to AY 2014-15 and the advances so given are otherwise covered by the cash balance available in the books of various group concerns. Facts:- 1. In search a diary marked Exhibit no. 37 of Annexure AS was found (PB 32-69). This diary written by Sanjay Kumar Goyal, brother of the assessee was found from the office of the group concern at RICCO Industrial Area, Neem ka Thana. In the diary, the amount advanced to employees of various group concerns is noted. It contains the details of opening outstanding, amount advanced, amount deducted from salary/amount received back and the outstanding amount on the date of search. The notings in this diary is from June- July 2014 to the date of search. 2. During course of assessment proceeding assessee vide letter dt.17.09.2021 (PB 14-31) at point no. 2 (xxi) (PB 28-31) provided the name of the concern where such employees are employed and statement of outstanding opening & closing balance and explanation with reference to each of such advance as narrated at page 15 to 21 of the assessment order. It was further explained that advance noted in this diary with the dates of June-July 2014 to the extent of Rs.3,90,314/- (correct amount Rs.4,23,314/-) is carried forward from Printed from counselvise.com 15 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal earlier years and advance given during the period covered by search assessment after considering the realisation is only Rs.1,22,650/-, source of which is out of the available cash balance of various concerns and thus the advance given to the employees is fully explained. 3. The AO however observed that Shri Kamal Sharma, accountant of Goyal Group was unable to explain the contents of the diary in his statement recorded u/s 132(4) of the Act. During post search verification the entries in the diary could not be got verified from the books of any of the concerns of the Goyal Group. By referring to page 1 & 2 of this Exhibit (PB 53) which contains details of FDR relating to the assessee and his wife, an inference is drawn that diary belongs to the assessee and advances are given by the assessee. The total of such advance from AY 2015-16 to 2020-21 was arrived at Rs.17,94,851/- (AO page 15) and accordingly the additions were made for Rs.6,23,963/- as against Rs.6,22,520/- worked out at page 15 of the assessment order. 4. The Ld. CIT(A) at para 5.2 page 8-11 of the order specifically in the last para of page 9 accepted that the amount noted in the diary represent the advance given to the employees of various concerns of the group of which assessee is the key person and the details of the FDR and his wife is also mentioned at page 1 & 2 of the seized annexure. Therefore the source of money needs to be explained by the assessee. Simply by raising some objections in the document, the assessee cannot evade the tax liability. Further the claim that various concerns of the assessee has sufficient cash balance when the advance was given but since such advance was adjusted against the salary or realized subsequently which are not recorded in the books to avoid multiple entries cannot be accepted as assessee has not produced affidavits from these persons. Accordingly by referring to the two decisions which are not relevant to the case of the assessee, the addition made by the AO is confirmed. Submission:- 1. At the outset it is submitted that Sh. Kamal Sharma in reply to question no. 44 of statement u/s 132(4) dt.14.06.2019 (PB 77) with reference to annexure AS 37 has stated that this diary contain the account of various persons which he would explain subsequently. During the course of assessment proceedings it was explained that in this diary the advance given to employees of various group concerns and the amount realized from their salary or otherwise is noted. This fact is not denied by the lower authorities. The details of concerns where these employees were employed is given at page 15 & 16 of the assessment order. There are 15 persons to whom the advance given is noted in this diary. The Printed from counselvise.com 16 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal statement giving the name of employees/persons, concerns where they are employed, opening advance given, advance given during FY 2014-15 to 2020- 21, closing balance of advance and the amount realized is placed at (PB 8A- 13A). The lower authorities have incorrectly drawn an inference on the basis of the noting of FDR of assessee and his wife at page 1-2 of this Annexure that advance was given by the assessee ignoring that Sh. Sanjay Goyal has noted these details only for memorandum purpose and on the basis of such noting it cannot be inferred that the advances was given by the assessee from his own sources. Thus the addition made in the hand of the assessee without bringing any material /evidence on record that such advance was given by the assessee is incorrect, unjustified and unwarranted. 2. Otherwise also, the addition made by the AO is incorrect. This is for the reason that the AO has incorrectly worked out advance given during the year at Rs.6,22,520/- ignoring that out of it against the amount of Rs.4,23,314/- there is a narration “Baki” with the date of 11.07.2014. This shows that noting in this dairy was stated on 11.07.2014 and the amount which was advanced in earlier period was noted with the narration “Baki”. Hence the amount of Rs.4,23,314/- cannot be added in the year under consideration. Further the AO in making the addition has not allowed set-off of realisation of advances which is source of giving the subsequent advance. Thus the addition made is arithmetically incorrect. 3. Without prejudice to above, it is submitted that the various concerns of the assessee have sufficient cash balance when the advance was given but since such advance was adjusted against the salary or realized subsequently, for the sake of avoiding multiple entries, they were not recorded in the books of accounts. However considering the availability of cash balance of these concerns, the source of giving advance is fully verifiable. If this explanation of the assessee is not accepted than addition can be made only in the hands of the respective concerns where these persons are employed and not in the hands of assessee. 4. The Ld. CIT(A) has erred in confirming the addition even after giving a finding that the amount recorded in annexure AS 37 represents the advance given to the employees of various concerns of the group. He has not brought on record any evidence that advance to these persons has been given by the assessee. Even in the subsequent years, no addition is made by the AO. Hence, the addition confirmed by CIT(A) is unjustified and the same be deleted. ITA No.495/JPR/2025, AY 2016-17 Printed from counselvise.com 17 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Ground No.1 The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. The facts and submission of this ground is same as in ground no.1 for AY 2014- 15 and therefore the same be considered in deciding this ground. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.5,47,500/- (8,00,000 - 2,52,500) u/s 69 of the Act on account of alleged unexplained investment in purchase of agriculture land on the basis of noting at back page of Pg 1 of Annexure AS-70 ignoring that assessee do know Pappi Yadav nor he has purchased any property from him. Facts & Submission:- 1. The AO at para 6 of the order observed that on examination of the backside of page 1 of Exhibit 70 of Annexure AS seized from the corporate office of the assessee group it is found that assessee has paid Rs.16,00,000/- in cash to Pappi Yadav on 03.07.2015. The reply filed by the assessee against the show cause notice is not found acceptable as source is not explained. Accordingly, addition of Rs.16,00,000/- was made on account of unexplained investment u/s 69 of the Act. 2. It is submitted that assessee has not provided the copy of this paper nor it is scanned in the assessment order. No show cause notice on this issue was raised during assessment proceedings and therefore no reply could be furnished by assessee. Hence the addition made by AO without providing the paper and without issuing show cause notice is bad in law. 3. It is further submitted that on this paper statement of Sh. Kamal Sharma, accountant of the group was recorded u/s 132(4) on 14.06.2019. Sh. Kamal Sharma with reference to this Annexure AS 70 (PB 74-75) stated that there are 46 pages in this annexure in which the document related to agricultural land purchased by the assessee, Ahir Ahmed Kureshi and Sh. Kesari Devi Agarwal are kept. On the backside of page 1 it is noted that Rs.6,00,000/- has been Printed from counselvise.com 18 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal received on 03.07.2015 and the balance would be received on finalizing the account of boundary wall. Total amount received is Rs. 16,00,000/-. He is unaware of these transactions and would explain subsequently. 4. During the appellate proceedings, assessee obtained this paper from the department (PB 25A). From the paper it can be noted that page 1 of this annexure is with reference to registration charges paid in respect of a property sold by Bhaga to the assessee on 10.06.2015. On the back side of this page there is a receipt dt.03.07.2015 by Sh. Pappi Yadav that he has received Rs.6,00,000/- against the plot and the total amount received is Rs.16,00,000/-. Assessee does not know Pappi Yadav nor he had purchased any property from Pappi Yadav. Hence this paper is not related to the assessee. However, the Ld. CIT(A) at para 5.2 page 8-9 of the order observed that the details of receipt of Rs.16,00,000/- is mentioned on the back side of the document or property purchased by the assessee with the narration that the remaining hisab will be done after the “Danda work”. Assessee has not explained how and why this working has been mentioned behind his deed of property. Thus, Invoking sec.292C it is held that paper is to be considered in the hands of the assessee. Since the share of the assessee in the property, on the back of which this is noted, is only 50%, the share of the assessee as per this paper was worked out at Rs.8,00,000/-. Out of this amount 50% of consideration recorded in the purchase deed i.e., Rs.2,52,500/- is reduced to confirm the addition of Rs.5,47,500/-. 5. It is submitted that assessee has not purchased the property from Pappi Yadav on the back of which the above noting is found recorded. Assessee has purchased the said property from Mr. Bhaga. The noting nowhere state that amount is paid by the assessee. The property was sold by Mr. Bhaga to the assessee by registered sale deed on 10.06.2015 whereas the noting is dt.03.07.2015. It is beyond human probability that cash would be paid after the sale deed is registered. The presumption u/s 292C is rebuttable presumption. The assessee does not know Pappi Yadav. Even the AO has not provided the paper during the assessment proceedings nor statement of the assessee was recorded on this paper during the course of search. Hence the addition of Rs.5,47,500/- confirmed by CIT(A) is unjustified and the same be deleted. Ground No.3 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.1,68,000/- on the basis of accrued interest on advance given even when the same has been taxed by the AO in AY 2017-18 when it was actually received Printed from counselvise.com 19 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal and such unrecorded interest receipt is otherwise taxable on receipt basis and not on accrual basis. Facts & Submission:- 1. The AO observed that as per page 61 of Exhibit 4 of Annexure AS (PB 78) it is found that assessee has earned interest of Rs.1,83,000/- during the year on the cash loan given. According to the reply furnished by the assessee the loan was given on 04.07.2015 and realized back subsequently on 18.10.2016. The contention of the assessee that temporary advance was given out of available cash balance in various concerns of the assessee appears to be reasonable. However, the contention that the entire interest income of Rs.2,80,000 should be taxed in AY 2017-18 is not proper and therefore proportionate interest for the year was worked out at Rs.1,68,000/- (2,80,000*9/15) and addition was made for the same. 2. The Ld. CIT(A) uphold the addition made by the AO. 3. It is submitted that from the paper it is clear that assessee advanced Rs.10,00,000/- on 04.07.2015 which was received back on 07.06.2016. On this amount interest for the period 04.07.2015 to 07.06.2016 was worked at Rs.2,20,000/- and thus the total amount due is Rs.12,20,000/-. Against this Rs.11,00,000/- was received on 07.06.2016 and Rs.1,00,000/- on 18.10.2016. Thus, the interest realized is Rs.2,00,000/-. Since the interest amount is actually received in AY 2017-18 & AO has also made addition of the interest so received in that year, again making the addition for the proportionate interest has amounted to double addition. The Ld. CIT(A) has though reduced the addition of Rs.2,80,000/- made in AY 2017-18 to Rs.1,12,000/- but Hon’ble Gauhati High Court in case of N.R. Sirker vs. CIT has held that where the assessment order show that no proper accounts were kept, it would not be justified to presume that assessee kept his accounts in the mercantile system. Income tax is normally paid on money actually received as income after deducting the allowable deductions. In the present case also the interest was actually received in AY 2017-18 and therefore the same can be taxed in that year. Hence the addition of 1,68,000/- confirmed by CIT(A) be deleted. ITA No.496/JPR/2025, AY 2018-19 Ground No.1 Printed from counselvise.com 20 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.20 lacs (9,43,285+12,16,715-1,60,000) on account of unexplained investment/ expenses on the basis of Pg 62 of Exhibit 4 of AS-1 by ignoring that this paper is linked to Pg 6 of Annexure A-1 on the basis of which assessee has offered for tax Rs.25 lacs in the return filed u/s 153A by incorrectly holding that assessee has not been able to show that the two papers are of the same transaction. Facts & Submission:- 1. In the return filed u/s 153A assessee offered for tax additional income of Rs.36,00,000 comprising of cash loan of Rs.25,00,000/- given to Prabhu Dayal Saini & Rs.11,00,000/- on account of investment in purchase of plot. 2. The AO at para 8 of the order observed that as per page 62 of Exhibit 4 of Annexure AS 1 (PB 100) assessee has made unaccounted investment and payment of Rs.21,60,000/-. Assessee vide letter dt.19.09.2021(PB 1-5, point no.12) explained that the noting on this paper is with reference to the amount given to Prabhu Dayal Saini who is neighbor of the assessee. Infact he purchased tiles for Rs.8,40,715/- against which he made payment of Rs.1,60,000/- and the balance Rs.6,80,715 was paid by the assessee on his behalf. The assessee further made payment of Rs.3,76,000/- and gave Rs.9,43,285/- so that as on 25.02.2017 the amount paid to him was Rs.20,00,000/-. This amount is also reflected at page 6 of Annexure A-1 (PB 101) found from the residence of the assessee. Assessee further gave Rs.5,00,000/- on 14.09.2017 as noted on this paper and thus the total amount advanced to him was Rs.25,00,000/-. Out of it Rs.16,00,000/- was received back from him on 29.08.2018 and the balance amount along with interest is due to him. It is further explained that assessee has offered the advance of Rs.25,00,000/- given to Sh. Prabhu Dayal Saini for tax in the return filed u/s 153A of the Act. 3. The AO however held that the noting at page 62 of Exhibit 4 is in the nature of business transaction while noting at page 6 of Annexure A-1 represent advances and interest thereon. The assessee has tried to match both the papers wherein the amount of Rs.20,00,000/- and the date 25.04.2017 (wrongly mentioned by AO as 20.04.2017) is same but since the nature of noting made on this paper are different from each other therefore explanation given by the assessee is not correct. Accordingly, AO made addition of Rs.12,16,715/- (840715+376000) & Rs.9,43,285/- totaling to Rs.21,60,000/-. 4. The Ld. CIT(A) held that assessee has not been able to show that paper at page 62 of Exhibit 4 of Annexure AS 1 and paper at page 6 of Annexure A1 Printed from counselvise.com 21 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal are for the same transaction, in as much as the nature of transaction in these two papers are different and even the handwriting appears to be different. He therefore confirmed the addition on account of advance of Rs.9,43,285/- given by the assessee to Shri Prabhu Dayal Saini. He further confirmed the addition of Rs.12,16,715/- made by the AO to Rs.10,56,715/-(8,40,715+3,76,000-1,60,000) and thus the addition is confirmed to the extent of Rs.20,00,000/-. 5. It is submitted that there is direct link of page 62 of Exhibit 4 extracted from the mobile of the assessee with page 6 of Annexure AS 1 found from the residence of the assessee in as much as at the bottom of page 62 of Exhibit 4 date of 25.04.2017 is noted against the amount of Rs.20,00,000/- and on the same date the same amount is noted on top of page 6 of Annexure A-1. Infact the amounts noted on these two pages relates to Shri Prabhu Dayal Saini who is known to assessee. He has purchased tiles for Rs.8,40,715/- against which Rs.1,60,000/- was received from him and balance Rs.6,81,715/- was due. Further Rs.3,76,000/- was paid for tiles purchased by him from Rajasthan Tiles and thus Rs.10,56,715 was due from him. Assessee further paid Rs.9,43,285/- so that as on 25.04.2017 an amount of Rs.20,00,00/- is due from him. Thereafter further Rs.5,00,000/- was advanced to him on 14.09.2017 and thus the total amount paid to him is Rs.25,00,000/-. This amount has been offered for tax by the assessee in the return filed in response to notice u/s 153A of the Act and therefore again making addition of Rs.21,60,000/- by AO which is reduced to Rs.20,00,000/- by Ld. CIT(A) has resulted into double addition. 6. It is further submitted that the reasons given by the lower authorities to allege that both these papers have no nexus to each other, only because on one paper there is notings relating to purchase of tile, is misconceived in as much as assessee is not engaged in any business of trading in tiles but the assessee made payment against the tiles purchased by Prabhu Dayal Saini and therefore the amount so paid along with further amount paid becomes Rs.20,00,000/- as on 25.04.2017. Thus the amount advanced by assessee to Sh. Prabhu Dayal Saini as on 25.04.2017 was Rs.20,00,000/-. Of course the handwriting of both the papers are different in as much as page 62 of Exhibit 4 extracted from the mobile phone of the assessee was sent by a different person whereas page 6 of Annexure A1 recovered from the residence of the assessee was written by a different person but the fact that Rs.20,00,000/- noted on page 62 of Exhibit 4 is carried out at page 6 of Annexure A1 with the same date is not controverted by the lower authorities. Thereafter further advance of Rs.5,00,000/- was given to him on 14.09.2017 (PB 101) and thus total amount advanced to him is Rs.25,00,000/- which has been offered for tax in the return filed u/s 153A. Hence Printed from counselvise.com 22 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal the addition of Rs.20,00,000/- confirmed by CIT(A) which is part of the amount of Rs.25,00,000/- offered for tax in the return filed u/s 153A of the Act be deleted. Ground No.2 The Ld. CIT(A) has erred on facts and in law in enhancing the income by Rs.3,84,000/- on account of notional interest on advance given to Sh. Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received by relying on his finding for AY 2019-20. Facts and Submission:- 1. On the advance of Rs.20,00,000/- due to Shri Prabhu Dayal Saini on 25.04.2017 and Rs.5,00,000/- further advanced to him on 14.09.2017, Rs.16,00,000/- was repaid by him on 29.08.2018 (PB 101). On this amount interest was calculated till 29.08.2018 at Rs.5,7,250/- (4,84,000+86,250). The Ld. CIT(A) observed that on the amount so advanced the interest till 31.03.2018 works out at Rs.3,84,000/- and accordingly he enhanced the income to that extent by not accepting the explanation of the assessee. 2. It is submitted that from the paper it is evident that against advance of Rs.25,00,000/-, Prabhu Dayal Saini paid Rs.16,00,000/- on 29.08.2018 thus the principal outstanding is Rs.9,00,000/-. On this advance interest of Rs.7,26,000/- was calculated till 31.03.2019 and thus the total amount outstanding on 31.3.2019 is Rs.16,26,000/-. This amount could not be recovered from Prabhu Dayal Saini. Shri Prabhu Dayal Saini in his affidavit dt.18.11.2024 (PB 159) has confirmed that due to his weak financial condition he has not paid any amount to the assessee though the assessee has promised to wave the interest if the principal amount is paid. Thus the interest debited to the account of the assessee is not recoverable. Even in the mercantile system of accounting, no income can be recognized unless there is reasonable certainty of its realisation in view of the fundamental accounting principal of prudence. Hon’ble Allahabad High Court in case of CIT vs. Laxmi Dal Mills 146 Taxman 625 has also held that interest cannot be assumed to have accrued to the assessee when in fact no interest is receivable. The relevant para 8 of the order is reproduced as under:- 8 So far as the second question is concerned, we find that it has come on record in the order of the CIT(A) that the loans advanced to M/s Shiv Refiners had not been made out of the borrowed fund by the respondent and further the loans were advanced in the asst. yr. 1974-75. Interest was being charged but subsequently the respondent-assessee came to the conclusion that the principal Printed from counselvise.com 23 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal amount itself was difficult to recover and, therefore, stopped charging interest. This position was accepted by the ITO till 1980-81 when no interest was charged. However, the Department took a different stand from 1981-82 onwards. As the recovery of principal amount itself was in doubt, as a prudent businessman, the respondent-assessee was wholly within its right to decide not to charge any interest from the debtor M/s Shiv Refiners. In this view of the matter, there was no question of adding the estimated amount of interest on the loan advanced to M/s Shiv Refiners. The Tribunal was, therefore, justified in deleting the addition of interest on the loan advanced to M/s Shiv Refiners. Further Hon’ble Guhati High Court in case of N.R. Sirker vs. CIT 111 ITR 281 at para 11 of the order has held that where the assessment order show that no proper accounts were kept, it would not be justified to presume that assessee kept his accounts in the mercantile system. Income tax is normally paid on money actually received as income after deducting the allowable deductions. In the present case also the advance given is not a part of books of accounts and there is no reasonable certainty of realisation of interest and therefore such interest cannot be taxed on mercantile system. Hence the addition of Rs.3,84,000 made by CIT(A) be directed to be deleted. Ground No.3 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.76,274/- u/s 69C of the Act on account of unexplained expenses by not accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries and Rs.7,06,485/- on account of undisclosed profit on unrecorded sale of Galaxy Industries. Facts & Submission:- 1. The AO at para 6, page 3 of the order has observed that on the back side of page 9 it is written that assessee will give Rs.1,00,000 to Sh. Deewan for getting the land converted during financial year 2017-18. The assessee has not given any specific submission on this paper and therefore it is held that assessee made payment of Rs.1,00,000/- for getting the land converted for which addition was made u/s 69C of the Act. 2. Before CIT(A) it was submitted that AO made addition of Rs.23,726/- on account of unaccounted sales. Further AO has also made an addition of Rs.23,41,289/- on account of TP Dala income and Rs.7,06,485/- on account of undisclosed profit on unrecorded sales in case of Galaxy industries in which Printed from counselvise.com 24 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessee and his family members are partners (PB 102-125). M/s Galaxy Industries has accepted this addition. Thus, these amounts aggregating to Rs.30,71,500/- was available with the assessee for which the set off was claimed. 3. However, the Ld. CIT(A) at para 5.2 page 13 & 14 allowed the set-off of the income of Rs.23,726/- assessed by AO on account of unaccounted sales but did not allow the set-off of income assessed in case of Galaxy Industries by holding that it does not matter whether the appellant is partner in this firm unless the assessee proves that such unaccounted money was used for making the investment. Accordingly, the addition was confirmed to the extent of Rs.76,274/-. 4. It is submitted that M/s Galaxy Industries is a family concern in which assessee and his wife is having 35% share and the family of his other two brothers have 65% share. It is not in dispute that undisclosed income of Rs.30,47,774/- (7,06,485+23,41,289) assessed in the hands of the firm has been accepted. Thus, the share of the assessee and his wife in this is Rs.10,66,721/-. It is not the case of the department that such income has been utilized elsewhere. Further the AO has also made addition of Rs.3,23,334/- (2,83,114+40,220) on account of profit on unrecorded sales in AY 2017-18 which is accepted by the assessee. Hence set-off of such income be allowed to the assessee against the addition of Rs.76,274/- confirmed by the CIT(A) and therefore the addition so confirmed by CIT(A) be deleted. ITA No.497/JPR/2025 AY 2019-20 Ground No.1 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.3,84,000/- on account of notional interest on advance given to Sh. Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received and by holding that affidavit of Sh. Prabhu Dayal Saini is incorrect & unreliable. This issue is same as Ground No.2 of AY 2018-19 and therefore considering the submission made in AY 2018-19, the addition confirmed by CIT(A) be deleted. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.31,000/- u/s 69C of the Act on account of unexplained expenses by not accepting the contention of assessee that the source of such expenditure is out Printed from counselvise.com 25 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal of TP Dala income of Rs.23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of income of Rs.2,83,119/- assessed and accepted by the assessee in AY 2017-18 against the addition of unexplained expenses. This issue is same as Ground No.3 of AY 2018-19 and therefore considering the submission made in AY 2018-19 and also in view of the fact that assessee was having availability of funds of Rs.2,83,119/- assessed by AO in AY 2017-18 which is accepted by the assessee, the addition confirmed by CIT(A) be deleted. ITA No. 498/JPR/2025, AY 2020-21 Ground No.1 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.10,69,135/- u/s 69 of the Act on account of unexplained investment in purchase of jewellery on the basis of Pg 51-53 of Exhibit 4 of Annexure AS-1 by not accepting the contention of assessee that the source of purchase of such jewellery is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of such investment out of Rs.16 lacs received by assessee from Sh. Prabhu Dayal Saini by way of realisation of advance on 29.08.2018 out of Rs.25 lacs given to him and offered for tax only for the reason that this contention is beyond the ground of appeal. He has further erred in not allowing the set off of income of Rs.2,83,119/- assessed and accepted by the assessee in AY 2017-18 and Rs.80,822/- assessed and accepted by the assessee in AY under consideration against the addition of unexplained investment in jewellery. Ground No.2 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.3,04,890/- u/s 69 of the Act on account of unexplained investment in construction on the basis of Pg 49 of Exhibit 4 of Annexure AS-1 by not accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of such investment out of Rs.16 lacs received by assessee from Sh. Prabhu Dayal Saini by way of realisation of advance on 29.08.2018 out of Rs.25 lacs given to him and offered for tax only for the reason that this contention is beyond the ground of appeal. He has further erred in not allowing the set off of income of Rs.2,83,119/- assessed and accepted by the assessee in AY 2017-18 and Rs.80,822/- assessed and Printed from counselvise.com 26 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal accepted by the assessee in AY under consideration against the addition of unexplained investment in construction. Facts & Submission: - 1. The AO on the basis of page 51-53 of Exhibit 4 of annexure AS 1 (PB 155-157) which is extracted from the mobile of the assessee noted that on these papers transaction of Rs.10,69,135/- (8,33,320 + 2,25,715+ 5,250 - 400) on account of purchase of ornaments of Gold/ Silver are noted. The assessee vide letter dt.19.09.2021 (PB 1-5, point no. 4) explained that as per the paper the amount of gold jewellery is Rs.9,13,160/- (8,33,320 +79,840) and silver coins of different weights of 10 grams, 20 grams & 50 grams is of Rs.1,55,975/-. The gold jewellery is purchased out of TP dala income of Rs.23,41,289/- offered for tax in case galaxy Industries in FY 2017-18 and silver coins was purchased out of such income for distribution to the customers on the occasion of Diwali 2018. The AO however observed that assessee has not proved nexus of utilization of TP Dala income with the gold/silver ornaments/ coins noted on the paper and thus made addition of the same u/s 69 of the Act. 2. The AO further on the basis of page 49 of Exhibit 4 of annexure AS 1 (PB 158) which is extracted from the mobile of the assessee noted that assessee has made investment in the construction of the house of Rs.3,04,890/-. The assessee vide letter dt.19.09.2021 (PB 1-5, point no. 3) explained that the construction expenditure is in respect of construction of boundary wall on Plot No.33, 34 & 35 which is owned by assessee, Sanjay Goyal & Narayan Goyal at Vidhyadhar Nagar Jaipur. The source of the expenditure is stated to be out of TP Dala income of galaxy Industries of Rs.23,41,289/- taxed in FY 2017-18. The AO however observed that assessee has not proved nexus of utilization of TP & Dala income with the construction expenditure noted on the paper and thus made addition of the same u/s 69 of the Act. 3. The Ld. CIT(A) observed that when the unaccounted income is earned by a different entity, assessee is to prove that unaccounted income earned by that entity was actually used by the assessee. Further the claim of assessee for set- off of Rs.16,00,000/- received back on 29.09.2018 from Shri Prabhu Dayal available against the above investment/expenditure cannot be entertained as no such specific ground was taken in the grounds of appeal, nor it was raised before the AO and the cash flow details are not placed on record. Accordingly he confirmed the addition of Rs.10,69,135/- and Rs.3,04,890/- made by the AO. Printed from counselvise.com 27 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 4. It is submitted that M/s Galaxy Industries is a family concern in which assessee and his wife is having 35% share and the family of his other two brothers have 65% share. It is not in dispute that undisclosed income of Rs.30,47,774/- (7,06,485+23,41,289) assessed in the hands of the firm in AY 2018-19 and undisclosed income of Rs.4,90,480/- (2,89,428/- + 2,01,052/-) (PB 126-152) assessed in AY 2019-20 in the hands of the firm has been accepted. Thus, the share of the assessee and his wife in such income is Rs.12,38,389/-. It is not the case of the department that such income has been utilized elsewhere. Further assessee has offered Rs.25,00,000/- on account of unexplained loan given to Prabhu Dayal Saini in AY 2018-19 against which Prabhu Dayal Saini has paid back Rs.16,00,000/- on 29.08.2018. The search took place on 14.06.2019. Thus assessee has sufficient sources of fund available with him for purchase of gold and silver ornament/coins and for incurring expenditure on construction. 5. The Ld. CIT(A) has observed that onus to claim set-off of income of a different entity is on a assessee but he ignored the fact that M/s Galaxy Industries is a family concern of the assessee in which assessee and his wife hold 35% share. It is not the case of the lower authorities that such income has been utilized elsewhere. Similarly, the fact of the receipt of Rs.16,00,000/- on 29.09.2018 from Shri Prabhu Dayal Saini as repayment of the loan is evident from the seized paper. The search on the assesse took place on 13.06.2019. The investment in purchase of gold/silver items and in construction is after 19.09.2018 in the absence of any date mentioned on the paper. Even if this contention is not specifically taken in the ground of appeal, the Income Tax Act do not debar to reach such a claim in course of appellate proceedings. The further observation of CIT(A) that assessee has not placed the cash flow details is incorrect and irrelevant in as much as assessee has only claimed that income of TP Dala of AY 2018-19 and 2019-20 as also the repayment of loan by Prabhu Dayal of Rs.16,00,000/- which is not utilized elsewhere is to be allowed set-off against the investment assessed by the AO and confirmed by the CIT(A) in those years and in the year under consideration which is more than the addition made by the AO. Hence the addition confirmed by CIT(A) be deleted. 6. In addition to the above written submission, the ld. AR of the assessee to support the arguments raised in hearing has filed the following Printed from counselvise.com 28 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal submission and the to support that contention the relevant documents were also filed; Hon’ble bench during the course of hearing has directed the assessee with reference to ITA No. 495/JP/2025 for AY 2016-17 to file the copy of sale deed on the back of which Rs. 16 lacs paid in cash to Papi Yadav on 03.07.2015 is noted and with reference to ITA No. 500/JP/2025 for AY 2015-16 directed to given confirmation of the concerns where the employees to whom advance given is noted in Exhibit AS-37 are employed. In this connection we are enclosing the copy of sale deed dt. 10.06.2015 between Shri Bhaga and Mahendra Goyal comprising of Page 1-5 of Ex-70, where on the back of page 1 the noting regarding Rs. 16 lacs paid to Pappi Yadav on 03.07.2015 is noted. Further there is another sale deed between Smt Keshri Devi Agarwal and Mahendra Goyal & Ahir Ahmed Quereshi dt. 21.04.2015 where assessee & Ahri Ahmed purchased the land from Smt Keshri Devi Agarwal for Rs. 5,05,000/-. Smt Keshri Devi Agarwal purchased part of this land from Bhaga as mentioned in the sale deed. So far as addition made on account of unexplained advances given to the employees as per Exhibit AS-37 of Rs. 6,23,963/- is concerned, we are enclosing the confirmation of the concerns where these employees were employed. Therefore when these employees are not under the employment of assessee but are employed by other concerns of the group, the addition made in the hands of the assessee is unjustified. 7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee having established that the laptop based upon which the addition were made was used by his son though he directed to delete the addition but has made certain direction which was beyond the power of the ld. CIT(A). As regards the addition of Rs. 1 lac sustained the assessee has sufficient cash balance Printed from counselvise.com 29 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal and even the money given were received back and therefore, once the source is explained, no addition is required to be made. In support of he referred the cash book page 11 shows the sufficient cash balance was available and therefore prayed that the necessary relief be granted. 8. The ld. DR is heard who relied on the findings of the lower authorities and submitted following written submission: -. It is most respectfully submitted that Ground No. 1 is technical is nature along with legal issue. The concerned Jurisdiction Assessing Office and Range Head has intimated above this. It is informed that concerned assessing office is on search duty from 14/07/2025 and he is likely to return by the coming weekend. It is most respectfully further requested that Ground No. 1 may be kept as open and after giving a hearing as per the convenience of the Hon’ble Bench a short adjournment may be given. Inconvenience is highly regretted and for the rest of the ground, revenue submits following Rejoinder. Ground No. 2: “The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 6,23,963/- u/s 69A of the Act in the hands of assessee on account of advances given to employees noted in Exhibit AS-37 ignoring that such advances were given by various group concerns of the assessee.” I. Rebuttal by the Revenue: 1. Presumption under Section 292C – Not Rebutted: The diary marked Exhibit AS-37, seized from the premises of the assessee group, clearly records unaccounted cash advances. As per Section 292C, a statutory presumption arises that the diary belongs to the assessee and its contents are true. The assessee has not discharged the burden to rebut this presumption even no violation of natural justice, pointed out. 2. FDR in Name of Assessee & Wife – Strong Evidentiary Link: The document contains references to FDRs in the name of the assessee and his Printed from counselvise.com 30 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal wife, which directly link ownership to him. The assessee has not denied these facts, and the presence of his wife's name is not a coincidence. No other group member’s name appears on the seized diary. 3. No Accounting Trail or Books Entry: The alleged advances are not recorded in the books of accounts of the assessee or any group concern. No journal entries, ledgers, or cash books have been produced. This constitutes a clear violation of accounting principles and results in treatment as unaccounted expenditure. 4. Unaccounted Cash Even If Assumed to Be from Group Concerns: Even if the assessee argues that the funds originated from group concerns, the fact remains that the transaction is entirely unrecorded. Unaccounted transactions, even by related parties, do not escape taxability under Section 69A. 5. Date of Diary Entry – Financial Year 2014–15 – Addition is Valid: The diary starts on 11.07.2014, which falls squarely within F.Y. 2014–15 (A.Y. 2015–16). The assessee's argument that the amount relates to earlier years is baseless. As per Section 69, the relevant criterion is \"found during the financial year\", not when the transaction allegedly began. Therefore, the addition is rightly made in this assessment year. 6. No Effort Post-Search to Reconcile or Justify: The assessee had sufficient time post-search to: • Obtain confirmations from alleged group concerns, • Match the cash advances with any cash withdrawals, • File evidence or bank statement, • Genuineness of transaction, • Books of accounts, • Ledger of advances with cross entry if regular but none of these were done. 7. No Consolidated Explanation from Other Family Members: The assessee has not submitted any consolidated statement of unaccounted cash availability or investment by other family members of the group to justify the source of cash allegedly used for these advances. In absence of such an integrated explanation, the plea of group-level cash availability is hollow and unsubstantiated. 8. CIT(A) Findings are Factually and Legally Correct: The Ld. CIT(A) has correctly upheld the addition by relying on: • The direct link between the assessee and the diary, • Lack of books entry or corroboration, Printed from counselvise.com 31 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal • Case laws such as Shri Chetan Gupta vs. ACIT, CIT v. Sharraf Trading Co., and K. Palaniappan, which clarify that unverifiable “opening balances” or unsupported source explanations cannot be accepted. II. Applicable Provisions: Sections 292C, 153A of the Income Tax Act & Indian Evidence Act To Rebut Assessee's Plea Against Additions Based on Seized Documents 1. Jurisdiction under Section 153A • Once a search is conducted under Section 132, the Assessing Officer acquires statutory jurisdiction under Section 153A to assess or reassess six preceding years and the year of search. • For concluded assessments, additions can only be made based on incriminating material found during the search. Citation: • CIT v. Singhad Technical Education Society (2017) 397 ITR 344 (SC) The AO acted same and addition was made on seized documents only, THE OWNER SHIP OF SEIZED DOCUMENT IS NOT DENIED 2. Statutory Presumption under Section 292C • Section 292C provides a rebuttable presumption that: 1. Documents or assets found belong to the person searched; 2. Are genuine; 3. Contain truthful contents. Citation: • Surendra M. Khandhar v. ACIT (2009) 224 CTR 409 (Bom) Assessee never objected that the documents were not genuine or does not belong to assessee. 3. Onus on Assessee to Rebut Presumption • Once documents/assets are found, initial burden lies on the assessee to explain the contents. • AO is not required to disprove them at the threshold. Printed from counselvise.com 32 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Citations: • CIT v. Chuharmal (1988) 172 ITR 250 (SC) • CIT v. P.V. Kalyanasundaram (2007) 294 ITR 49 (Mad) • Shashi Garg v. CIT (2007) 162 Taxman 171 (Del) This is not the duty or power of AO to disprove the incriminating document. It is the assesee who need to explain the details with evidence. Here assesee faile dto do so. Only oral argument without any evidence are not enough to rule out the ownership or addition. 4. Application of Evidence Act • Section 106: Where knowledge is specific to the assessee (e.g., initials, codes), onus is on him to explain. • Section 110: Possession implies ownership, unless rebutted with proof. Citation: • Sushil Kumar v. CIT (1980) 121 ITR 94 (P&H) Assessee has to brought the evidence that paper belongs to someone else as per Law. 5. \"Dumb Document\" Plea – Not a Valid Shield • A cryptic, unsigned, or informal document is not inadmissible per se. • If found in possession/control of the assessee and not explained, it can form the basis of addition. Citations: • CIT v. Ajay Gupta (2019) 101 taxmann.com 271 (All) • Dayawanti v. CIT (2016) 75 taxmann.com 308 (Del); SLP dismissed (SC, 2018) If assessee admits it is money but not able to explain source it is unaccounted as per law. 6. Timing of Rebuttal – Critical • Any explanation must be given during assessment proceedings. Printed from counselvise.com 33 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal • After thought and reasonable time both are easily distinguishable as per human probability test. • Fresh evidence at appellate stage is subject to Rule 46A of the IT Rules. Citation: • CIT v. Manish Buildwell Pvt. Ltd. (2011) 245 CTR 397 (Del) 7. Principles of Natural Justice • Revenue has provided opportunities to the assessee through notices and document copies. • Failure to respond is not a breach of natural justice. Citation: • Andaman Timber Industries v. CCE (2015) 62 taxmann.com 3 (SC) And when assessee fails to point out violation natural justice it must demonstrate wht wrong has been done by AO. 8. Section 292C & Third Party Documents • If document belongs to a third party, assessee must establish it \"belongs to\" other. Citations: • Pepsi Foods Pvt. Ltd. v. ACIT (2014) 367 ITR 112 (Del) 9. Summary of Key Supporting Judgments Issue Citation Ownership by possession Chuharmal v. CIT (1988) 172 ITR 250 (SC) Burden to explain seized cash Shashi Garg v. CIT (2007) 162 Taxman 171 (Del) Cryptic documents admissible Dayawanti v. CIT (2016) 75 taxmann.com 308 (Del) Dumb documents rebuttable CIT v. Ajay Gupta (2019) 101 taxmann.com 271 (All) Natural justice opportunity Andaman Timber Industries v. CCE (2015) 62 taxmann.com 3 Conclusion – In Favour of Revenue: Printed from counselvise.com 34 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 1. Section 153A empowers AO to make additions based on seized material. 2. Section 292C provides a strong presumption in favour of Revenue. 3. Assessee has primary onus to rebut the entries/documents with documentary proof. 4. Failure to rebut = valid addition under Sections 69/69A/69C. 5. “Dumb document” argument is not valid unless supported with concrete rebuttal. Therefore, entries in seized material must be credibly and contemporaneously explained. Failure to do so justifies addition as undisclosed income in law. Prayer: In view of the above: • The source of cash remains unexplained, • The diary was found in the relevant year and contains undisclosed transactions, • The plea of group-level funds is unsupported by evidence, and • The assessee’s failure to submit consolidated or corroborative financial data of family members or concerns weakens his claim further. The addition of Rs. 6,23,963/- under Section 69A is fully justified and the order of the CIT(A) deserves to be upheld. The assessee’s ground may be dismissed. Respectfully Submitted on Behalf of the Revenue. 9. We have heard the rival contentions and perused the material placed on record. Vide ground no. 1 the assessee challenged the finding of the ld. CIT(A) stating that though addition for the amount noted on the paper extracted from laptop of Shri Narayan Goyal, S/o Shri Daulat Ram Goyal cannot be added in the hands of assessee. But at the same time while doing so he directed to considered that the said amount to be consider as Printed from counselvise.com 35 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal taxable in the hands of Shri Daulat Ram Goyal whose appeal pending with him even when it was not an issue in appeal before him and thereby this direction contrary to the law. The brief facts related to the dispute are that a search u/s 132 was carried out on Goyal Group, Neem Ka Thana, Sikar on 13.06.2019 of which assessee is one of the party. We note that ld. AO at para 5 of the assessment order observed that while search a laptop was found from the residence of Shri Daulat Ram Goyal at Galaxy Bhawan, Shahpura Road, Neem ka Thana, Sikar. During post search enquiry data was extracted from this laptop and it was found that assessee has given cash loan to various persons and earned interest on such loan. The name of person to whom loan was advanced was not given on this page but date of advancing loan and the date on which interest received was mentioned. As per that paper, the assessee has given cash loan at an interest rate of 10.80% / 12% p.a. during financial year 2013-2014 to 2016-2017. In the year under consideration cash loan of Rs.15,00,000/- was given on which interest for the period 02.08.2013 to 31.03.2014 works out at Rs.1,08,000/-. In the assessment proceeding the assessee vide letter dt.19.09.2021 (PB 16, point no. ix) submitted that from his residential premises no laptop was found. Neither in search nor in post search proceedings copy of the Printed from counselvise.com 36 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal extracted data from the laptop was provided or confronted to the assessee. He has not given any such loan or received any interest thereon. Request was made to provide the source of such extracted data. The AO however held that paper (Paper book page 6) was extracted from the laptop of Shri Narayan Goyal, who is the son of assessee. The paper contains complete details of loan transactions along with periodical working of interest amount though the name is not mentioned on the paper. Accordingly, it was presumed that assessee advanced Rs.15,00,000/- which is unexplained investment u/s 69 of the Act & assessee earned interest of Rs.1,08,000/- on such advances for which addition is made. When the addition challenged before the ld. CIT(A) he has vide para 4.2 held that from the PAN and aadhar card of Shri Narayan Goyal it is found that he is son of Daulat Ram Goyal and not the assessee. Statement of the assessee on this paper was not recorded and therefore addition based on that paper cannot be made in the hands of the assessee. However, while holding so ld. CIT(A) directed that since the appeal of Shri Daulat Ram Goyal was pending before him, he presumed that the same is taxable in the hands of father of Shri Narayan Goyal i.e., Shri Daulat Ram Goyal and thus a finding is given that the addition of the impugned amount is required to be taxed in the hands of the assessee was made by mistake and the addition is to be made in the hands Printed from counselvise.com 37 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal of Daulat Ram Goyal. Thus, it is a fact that the addition was directed to be deleted because the laptop of Narayan Goyal at the residence of Shri Daulat Ram Goyal cannot be made in the hands of the assessee but his further direction that addition is to be made in the hands of Shri Daulat Ram Goyal is only on presumption and surmises. As is evident from the said paper [ paper book page 6 ] the name of Daulat Ram Goyal is not appearing. Ld. CIT(A) has otherwise not brought on record any evidence to presume that the paper / record the advance given by Daulat Ram Goyal. Hence, the finding given by CIT(A) that addition on the basis of the paper extracted from the laptop of Shri Narayan Goyal is to be made in the hands of Daulat Ram Goyal is beyond the powers given u/s 251 of the Act in deciding the appeal of the assessee. This issue raised by the assessee has already been decided by the co-ordinate bench of Jaipur ITAT in the case of Shri Vaibhav Banka in ITA no. 301/JP/2025 and the connected cross objection of assessee on it numbered as CO/2/JP/2025 wherein the bench has decided the issue by observing as under : 11. Now coming to the cross objection filed by the assessee against the appeal filed by the revenue. As the appeal of the assessee was allowed by the ld. CIT(A) on technical ground but while allowing that appeal of the assessee on technical ground he directed the ld. AO to implement judgment of Hon’ble Supreme Court in the case of Abhisar Buildwell 2023 149 taxmann.com and the CBDT Instruction No. 1 of 2023 dated 23.8.2023. This direction is challenged by the assessee in cross objection filed stating that the action of the ld. CIT(A) is illegal, unjustified, arbitrary, and against the facts of the case. Printed from counselvise.com 38 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal As is evident from the order of the ld. CIT(A) that after granting relief on technical ground ld. CIT(A) further directed the ld. AO to initiate appropriate proceedings under Section 147/148 of the Act, relying on the same judgment of Abhisar Buildwell (supra), CBDT Instruction No. 1/2023 (CLC 35-40), and the provisions of Section 150 of the Act. The assessee, while supporting the ultimate relief granted, is aggrieved by the directions given by the ld. CIT(A) in his order suggesting the AO initiate proceedings under Section 147/148 of the Act. The assessee therefore before us by preferring the present Cross-Objection to challenge the directions and to raise other legal and factual grounds in support of the deletion of the addition. Record reveals that ld. CIT(A) vide page 36 while dealing with the appeal of the assessee has issued direction to the ld. AO which reads as under : “Accordingly, the judgement of Hon’ble Supreme Court in the case of Abhisar Buildwell (supra) and U. K. Paints (supra) are squarely applicable to the facts of the case. Accordingly, following the judgment of honorable Supreme Court it is held that the ld. AO rightly issued notices u/s 153A of the Act and at the same time the impugned addition made in assessment order u/s 153A cannot be sustained and is hereby deleted as the same is without basis of incriminating material unearthed during the search action on the appellant and impugned addition could have been done by the learned assessing officer in re-assessment proceedings by issuance of notice under section 147/148. The ld. AO is directed to take necessary action in this regard. Further, the CBDT (ITJ Section) has issued Instruction No. 1 of 2023 dated 23-08- 2023 vide F.No. 279/Misc./M- 54/2023-ITJ on the subject “Implementation of the judgment of the Hon’ble Supreme Court in the case of Pr.CIT (Central-3) v/s AbhisarBuildwell Pvt. Ltd. (Civil Appeal No. 6580 of 2021)-Instruction regarding”. The learned assessing officer is directed to implement the law and ratio of the judgement of AbhisarBuildwell (supra) and the said Instruction No. 1 of 2023 dated 23-08-2023 and section 150 of the Act, in the case of the appellant appropriately as per the facts of the case and as per above findings. Accordingly this ground of appeal is adjudicated in above terms. For statistical purposes this ground is hereby treated as allowed” [Emphasis Supplied] Before us the ld. AR of the assessee submitted that the appeal of the assessee has decided considering the two landmark judgment of apex court in the case of Abhishar Buildwell and U. K. Paints. Thus, the issue before us is to be decided considering the following records placed on record: 1. Decision of the apex court in the case of Abhisar Buildwell & U. K. Paints. 2. Miscellaneous Application filed by Revenue before the apex court 3. CBDT’s Instruction No. 1 of 2023 dated 23-08-2023 Printed from counselvise.com 39 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal As is evident the cross objection of the assessee hinges on the provision of section 150, 251, Miscellaneous application filed by the revenue before the apex court and CBDT’s instructions. The provision of section 150 deals as under : Provision for cases where assessment is in pursuance of an order on appeal, etc. 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. Section 251 reads as follows : Powers of the70[Joint Commissioner (Appeals) or the] Commissioner (Appeals). 251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment: 71[Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;] (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the Printed from counselvise.com 40 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit. 70[(1A) In disposing of an appeal, the Joint Commissioner (Appeals) shall have the following powers— (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty; (c) in any other case, he may pass such orders in the appeal as he thinks fit.] (2) The 72[Joint Commissioner (Appeals) or the] Commissioner (Appeals) 72[, as the case may be,] shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation.—In disposing of an appeal, the 72[Joint Commissioner (Appeals) or the] Commissioner (Appeals), may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the 72[Joint Commissioner (Appeals) or the] Commissioner (Appeals) 72[, as the case may be,] by the appellant. The law is settled by the decision of the apex court in the case of Abhishar Buildwell and U. K. Paints and the revenue’s Miscellaneous application was disposed off by observing as under 1.1.i. Against the judgment dated 24.04.2023 passed by the Hon’ble Supreme Court in Abhisar Buildwell Pvt. Ltd. (supra) the revenue filed Misc. Application before the Hon’ble Supreme Court on 26.04.2023 seeking following reliefs: “(a) This Hon’ble Court may clarify that the waiver of limitation as stipulated in section 150(2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on the date the assessment under section 153A or section 153C was passed, a notice under section 148 could have been issued as per the law then in force, then fresh proceedings for Printed from counselvise.com 41 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal reassessment of such income not arising from the incriminating material found in searchcan now be initiated pursuant to the findings of this Hon’ble Court in the present appeals/application and may further clarify as follows: (i) That the findings in para 11 and 14 would apply to all the proceedings pending in all the forums including before this Hon’ble Court. (ii) That even though the appeals of the Revenue are dismissed in respect of assessments passed under 153A and 153C, in the absence of incriminating material found during the search, in respect of such income which was found to have escaped assessment other than through incriminating material, the assessing officers would be entitled to reassess such income in terms of Section 147/148 read with section 150. (iii) That the Assessing Officer, may if found necessary initiate fresh proceedings within 60 days from date of disposal of this application following the procedure stipulated in section 147-151 of the Act as is in force now.” 1.1.ii. The Hon’ble Supreme Court vide its order dated 12.05.2023 titled as PCIT v. Abhisar Buildwell Pvt. Ltd. [2023] 294 Taxman 70 (SC) (CLC 32-34) dismissed the Revenue’s Misc. Application by observing as under: “2. Having gone through the averments made in the application and the prayers, we are of the opinion that the prayers sought can be said to be in the form of review which requires detail consideration at length looking into the importance of the matter. Therefore, the present application in the form of clarification is not entertained and we relegate the Revenue to file an appropriate review application for the relief sought in the present application and as and when such review application is filed the same can be heard in the open court. 3. In view of the above and without further entering into the merits of the application and/or expressing anything on merits on the prayers sought in the present application, the present application is not entertained and we relegate the Revenue to file an appropriate review application seeking the reliefs which are sought in the present application and as and when such review application is filed the same be heard and decided and disposed of in the open court. At the cost of repetition, we observe that as we have not entered into the merits of the present application and we relegate the Revenue to file an appropriate review application, the review application be decided and disposed of in accordance with law and on its own merits.” 1.1.iii. Following the dismissal of the Revenue’s Miscellaneous Application in PCIT v. Abhisar Buildwell Pvt. Ltd. (supra), wherein the Hon’ble Supreme Court expressly relegated the Department to file a formal review petition—no such review was pursued. Instead, the CBDT issued Instruction No. 1/2023 dated 23.08.2023, which provided internal guidance to Assessing Officers regarding the Printed from counselvise.com 42 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal course of action in cases where assessments under Section 153A/153C have failed due to lack of incriminating material. 1.1.iv. The instruction outlines procedural steps for invoking reassessment under Sections 147/148 read with Section 150. However, the nature, scope, and legal force of this instruction remain subject to statutory limitations and judicial precedent, as discussed below. We also take note of the facts that CBDT’s instructions is an internal administrative directive intended solely for operational guidance of Assessing Officers. It attempts to clarify the post-Abhisar Buildwell (supra) reassessment landscape, specifically in situations where additions under Section 153A/153C were struck down due to absence of incriminating material. This administrative instructions are not binding on quasi-judicial authorities like the CIT(A). It is a settled principle of law, as held by the Hon’ble Supreme Court in UCO Bank v. CIT [(1999) 237 ITR 889 (SC)] (CLC 41-49), that CBDT circulars or instructions cannot override, supplement, or expand the scope of statutory provisions. Thus, taking shelter of Instruction No. 1/2023 as enabling or empowering appellate authorities to direct initiation of reassessment proceedings is a fundamental misapplication of the Instruction, which neither authorizes appellate intervention in reassessment matters nor vests any such power in the ld. CIT(A). Even other wise the Instruction cannot substitute the independent statutory preconditions under Sections 147/148 read with Section 149, which provides the timelines for issuance of notice of reopening. Provision of such section must be satisfied by the ld. AO at any given point of time, when the jurisdiction is assumed for reopening a particular assessment year. Even the power vested with ld. CIT(A) are limited wherein he may i.) confirm, or ii.) reduce, or iii.) enhance, or iv.) annul the assessment; Thus, he has no power to give any direction that what is prescribed in law. The issue related to the power of the commissioner of income has already been dealt with in a decision in the case of ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC) (CLC 111-128) wherein Hon’ble Supreme Court underscored that the appellate provisions (Section 33(4) of the 1922 Act, analogous to Section 250/254 of the 1961 Act) do not confer on the appellate authority a power to make any direction on matters not arising in the appeal, especially as the Act provides separate mechanisms (like Section 34 of 1922 Act, now Section 147) to deal with escaped income. Accordingly, the Apex Court held that; “It was not contended, nor was it possible to contend, that by reason of the reference to the said provisions the powers and jurisdiction conferred on the respective authorities, tribunals or courts referred to therein were enlarged or Printed from counselvise.com 43 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal modified by a reference in the proviso or that the proviso could be read or construed as amending those sections conferring on those bodies wider or different powers or jurisdiction. Learned counsel for the department expressly disclaimed any such submission. Therefore, the scope of the proviso cannot ordinarily exceed the scope of the jurisdiction conferred on an authority under the said provisions.” We also take note that the apex court has dealt with the provision of section 150 i.e. Provision for cases where assessment is in pursuance of an order on appeal and section 149 i.e. Time limit for notices undersection 148 of the Act. While dealing with that provision the apex court in the case of K. M. Sharma Vs. Income Tax Officer [122 Taxmann 426 (SC) ] while dealing with the judgment of the land revenue case and thereby the reopening of the case has in detailed analysis the provision for cases where assessment is in pursuance of an order of an appeal and time limit. The relevant finding is reproduced in full because this will clarify the issue on hand with that of the case decided by apex court; In this appeal, which is filed after obtaining special leave, the order dated 24-5- 1996 of the Delhi High Court has been assailed. The main question involved is on the application and interpretation of the provisions of section 150 of the Income-tax Act, 1961 ('the Act'). The relevant facts necessary for deciding the legal question raised are as under : 1. The appellant's lands were acquired under section 6 of the Land Acquisition Act, 1894, and an award was passed on 2-12-1967 by the Chief Commissioner of Delhi granting compensation in favour of the appellant. The Additional District Judge by the judgment dated 20-5-1980 held the appellant entitled to 1/32 share of the compensation awarded under various awards and the appellant was granted total compensation in the sum of Rs. 1,18,810 approximately in the year 1981. 2. On a reference under section 18 of the Land Acquisition Act, the learned Additional District Judge, Delhi vide his judgment dated 31-7-1991 awarded a sum of Rs. 1,10,20,624. The amount was paid to the appellant between 15-10- 1992 and 26-5-1993. The amounts paid represented principal sum of compensation of Rs. 41,96,496 and interest in the sum of Rs. 76,84,829 up to 18-5-1992. Before making the above payments, tax was deducted at source amounting to Rs. 8,60,701. 3. Since the lands acquired were agricultural lands and were acquired prior to 1- 4-1970, capital gains tax was not leviable but tax was leviable on interest earned on the amount awarded on year to year basis. 4. The appellant through counsel sent a letter dated 17-9-1993 informing the ITO that he had received interest amount of Rs. 76,84,829 and interest accrued from year to year was assessable in each year. Year-wise break up of the interest was also given in the letter. According to the appellant, no tax was leviable on interest Printed from counselvise.com 44 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal accruing up to 31-3-1982 as assessment for it had become barred by time. The appellant, therefore, requested that necessary action be taken under section 147 of the Act to enable the appellant as assessee to file his income-tax return and pay tax accordingly. 5. On 31-3-1994, the appellant was served with impugned notices under section 148 of the Act for 16 assessment years, i.e., 1968-69 to 1971-72 and the assessment years 1981-82 to 1992-93. 6. The appellant, in the High Court, assailed the notices issued under section 148 for reassessment for the assessment years 1968-69 to 1971-72 and for the year 1982-83 on the ground that the proposed reassessment for those assessment years had already become barred by time under section 149 of the Act, for which in the relevant periods maximum period of four years or seven years limitation was prescribed depending upon the quantum of liability towards tax. 7. The High Court by the impugned judgment accepted the contention of the department that the provisions of section 150(1) of the Act, as amended with effect from 1-4-1989, could be resorted to for reassessment to levy tax on the increased amount of interest earned by the appellant in the relevant assessment years. It was held that bar of limitation prescribed under section 149 of the Act was not attracted by virtue of the provisions of section 150(1) because notices for such reassessments are based on the awards passed in the land acquisition proceedings by the Court of the Additional District Judge on a reference under section 18 of the Land Acquisition Act. Upholding the validity of the assessment proceedings initiated by the department under section 148, the High Court rejected the contention of the assessee that sub-section (2) of section 150 is an Explanation to sub-section (1) and proceedings for reassessment, which had already become barred by time under section 149 before 1-4-1989, could not have been commenced on the amended provisions of sub-section (1) of section 150. 8. To appreciate the contentions advanced by the learned counsels for the parties and the decision of the High Court, it is necessary to reproduce for critical examination the provisions of section 150(1) and (2). The provisions read as under : \"Provision for cases where assessment is in pursuance of an order on appeal, etc.—(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision [or by a Court in any proceeding under any other law]. [The portion bracketed and italicised above is inserted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989]. Printed from counselvise.com 45 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.\" 9. Section 149 prescribes maximum period of four or seven years depending upon the quantum of tax as mentioned in the said section for initiating reassessment proceedings. Section 150(1) states that the period of limitation prescribed in section 149 is not applicable, if the reassessment is proposed on the basis of any order passed by any 'authority in any proceedings under the Act by way of appeal, reference or revision' or 'by Court in proceedings under any other law'. Sub-section (2) of section 150, however, makes it clear that reassessment permissible under sub-section (1) of section 150 would not be available to the department where the period of limitation for such assessment or reassessment has expired at the time it is proposed to be reopened. In sub- section (1) of section 150, by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989, the words 'or by a Court in any proceeding under any other law' were inserted which are shown in bracket with underline in the section reproduced above. 10. The main question that has been raised on behalf of the learned counsels appearing for the parties is whether the provisions of sub-section (1) of section 150 as amended can be availed for reopening assessments, which have attained finality and could not be reopened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of section 149. 11. The submission made on behalf of the appellant is that neither the provisions of sub-section (1) nor sub-section (2) can be read as giving more than intended operation to the said provision. The provisions, it is argued, do not permit the authorities to reopen assessments, which have become final and reassessment of which had become barred by time before 1-4-1989 when section 150(1) was amended. Reliance is placed on the decision of this Court in S.S. Gadgil v. Lal & Co. [1964] 53 ITR 231 . 12. The learned counsel appearing on behalf of the department has made an effort to persuade this Court to accept his construction of the provisions of section 150(1) and (2). It is argued that it is for the specific purpose of assessing income, which might accrue on the basis of any decision of any Court in any proceeding in any other law, that the provision has been amended to lift bar of limitation for reassessment. 13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to Printed from counselvise.com 46 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to sub-section (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to sub- section (1) of section 150 which intends to lift embargo of period of limitation under section 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the Act but also on order of a Court in any proceedings under any law, has to be applied prospectively on or after 1- 4-1989 when the said amendment was introduced to sub-section (1). The provision in sub-section (1), therefore, can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under section 149. 14. To hold that the amendment to sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under section 149 as applicable prior to 1-4-1989, would amount to give sub-section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section. 15. On behalf of the assessee before the High Court and in this Court reliance has been placed on the provisions contained in sub-section (2) of section 150. It is submitted that the provision contained in sub-section (2) of section 150 is in the nature of clarification or Explanation to sub-section (1). Sub-section (2) makes it clear that the embargo of period of limitation lifted under sub-section (1) for proposed reassessments based on order in proceedings under appeal, reference or revision, as the case may be, would not apply to assessments which have attained finality due to bar of limitation applicable at the relevant time. 16. The High Court rejected the above contention of the assessee on the ground that on the amendment introduced with effect from 1-4-1989 in sub-section (1), which enables reopening of assessment based on any order of 'Court in any proceedings in any law', there is no corresponding amendment made in sub- section (2) of section 150 to bar reassessment based on order of court passed in any proceedings in any law in cases where prescribed period of limitation for reassessment had already expired. 17. We do not find that the above reasoning of the High Court is sound. The plain language of sub-section (2) of section 150 clearly restricts application of sub- section (1) to enable the authority to reopen assessments which have not already become final on the expiry of prescribed period of limitation under section 149. As is sought to be done by the High Court, sub-section (2) of section 150 cannot be held applicable only to reassessments based on orders 'in proceedings under the Act' and not to orders of Court 'in proceedings under any other law'. Such an interpretation would make the whole provision under section 150 discriminatory Printed from counselvise.com 47 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal in its application to assessments sought to be reopened on the basis of orders under the Act and other assessments proposed to be reopened on the basis of orders under any other law. Interpretation, which creates such unjust and discriminatory situation, has to be avoided. We do not find that sub-section (2) of section 150 has that result. Sub-section (2) intends to insulate all proceedings of assessments, which have attained finality due to the then existing bar of limitation. To achieve the desired result it was not necessary to make any amendment in sub-section (2) corresponding to sub-section (1), as is the reasoning adopted by the High Court. 18. Sub-section (2) aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation. Sub-section (2) in putting such embargo refers to whole of sub-section (1) meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or recomputation either on the basis of orders in proceedings under the Act or orders of courts passed under any other law. The High Court, therefore, was in error in not reading whole of amended sub-section (1) into sub-section (2) and coming to the conclusion that reassessment proposed on the basis of order of the court in proceedings under the Land Acquisition Act could be commenced even though the original assessments for the relevant years in question have attained finality on expiry of period of limitation under section 149. On a combined reading of sub-section (1) as amended with effect from 1-4-1989 and sub-section (2) of section 150 as it stands, in our view, a fair and just interpretation would be that the authority under the Act has been empowered only to reopen assessments, which have not already been closed and attained finality due to the operation of the bar of limitation under section 149. 19. This Court took similar view in the case of S.S. Gadgil (supra) in somewhat comparable situation arising from the retrospective operation given to section 34(1) of the Indian Income-tax Act, 1922 as amended with retrospective effect from 1-4-1956 by the Finance Act, 1956. In the case of S.S. Gadgil ( supra) admittedly under clause (iii) of the proviso to section 34(I), as it then stood, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident under section 43, after the expiry of one year from the end of the year of assessment. The section was amended by section 18 of the Finance Act, 1956, extending this period of limitation to two years from the end of the assessment year. The amendment was given retrospective effect from 1-4-1956. On 12-3-1957, the ITO issued a notice calling upon the assessee to show cause as to why, in respect of the assessment year 1954-55, the assessee should not be treated as an agent under section 43 in respect of certain non-residents. The case of the assessee, inter alia, was that the proposed action was barred by limitation as right to commence proceedings of assessment against the assessee as an agent of non-resident for the assessment year 1954-55 ended on 31-3-1956, under the Act before it was amended in 1956. This Court in the case of S.S. Gadgil (supra) accepted the contention of the assessee and held as under : Printed from counselvise.com 48 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal \". . . The Legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to April 1, 1956 only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the Legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred.\" (p. 240) 20. On a proper construction of the provisions of section 150(1) and the effect of its operation from 1-4-1989, we are clearly of the opinion that the provisions cannot be given retrospective effect prior to 1-4-1989 for assessments which have already become final due to bar of limitation prior to 1-4-1989. Taxing provision imposing a liability is governed by normal presumption that it is not retrospective and settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot in the absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable the authorities to affect finality of tax assessments or to open up liabilities, which have become barred by lapse of time. Our conclusion, therefore, is that sub-section (1) of section 150, as amended with effect from 1-4-1989, does not enable the authorities to reopen assessments, which have become final due to bar of limitation prior to 1-4-1989 and this position is applicable equally to reassessments proposed on the basis of orders passed under the Act or under any other law. 21. As a result of the discussion aforesaid, the appeal is allowed. The judgment of the Delhi High Court dated 24-5-1996 is hereby set aside. As prayed in the petition, the impugned notices issued by the respondent of the Income-tax Department under sections 148 and 142 against the appellant for the assessment years 1968-69 to 1971-72 and 1981-82 are hereby quashed. The appeal stands allowed with costs. The above view is also get support by a decision of Nagpur Bench of this ITAT in the case of M B Traders Vs. ACIT [ 132 TTJ 490 ] wherein the co-ordinate bench held that ; 9. After an in-depth study of the entire case record, on a patient hearing of both the sides and after reading the case law cited at length, our observations and findings on the matter are as follows. Before giving our observation and finding, it has been deemed proper to quote ss. 150 and 151 as it is, as under : \"150. (1) Notwithstanding anything contained in s. 149 the notice under s. 148 may be issued at any time of the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding Printed from counselvise.com 49 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. (2) The provisions of sub-s. (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the lime the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. 151. (1) In a case where an assessment under sub-s. (3) of s. 143 or s. 147 has been made for relevant assessment year, no notice shall be issued under s. 148 by an AO, who is below the rank of Asstt. CIT or Dy. CIT unless the Jt. CIT is satisfied on the reasons recorded by such AO that it is a fit case for the issue of such notice. Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief CIT or CIT is satisfied, on the reasons recorded by the AO aforesaid, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-s. (1), no notice shall be issued under s. 148 by an AO, who is below the rank of Jt. CIT, after the expiry of four years from the end of the relevant assessment year, unless the Jt. CIT is satisfied, on the reasons recorded by such AO, that it is a fit case for the issue of such notice. Explanation : For the removal of doubts, it is hereby declared that the Jt. CIT, the CIT or the Chief CIT, as the case may be, being satisfied on the reasons recorded by the AO about fitness of a case for the issue of notice under s. 148, need not issue such notice himself.\" Sec. 149 deals as quoted above with regard to time-limit for notice. Sec. 150 deals with regard to provision for cases where assessment is in pursuance of an order on appeal. In our considered view there is no bar for issuing notice under s. 148 by the AO on the direction of the first appellate authority. At the same time, reassessment proceeding must be based on the belief of the AO and not of the CIT or appellate authority or that of the Tribunal as had been meant and interpreted from a perusal of s. 147 of the IT Act. The direction of higher authority should not be interpreted as a blanket direction by the AO. But that should be accompanied by the direct satisfaction of the AO with regard to the escapement of income. The appellate authorities or higher authorities cannot interfere on this power of the AO. It means the direction of the higher authorities and that of the appellate authorities must be acted upon by the AO with utter satisfaction. Taking initiation of reassessment proceeding without satisfaction of the AO, simply on the basis of the blanket direction, will not justify the action of initiation of Printed from counselvise.com 50 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal reopening proceeding. In this particular case as has been rightly pointed out by the learned Authorised Representative from p. 13 of the paper book filed, the AO has simply acted upon, i.e., initiated reopening proceeding on the basis of the direction of the CIT(A) and has totally ignored his part of the job i.e., his satisfaction, as is evident from p. 13 of the paper book filed by the learned counsel which is quoted below for better appraisal of facts : \"Assessee filed the return of income of Rs. 39,720 on 25th Jan., 1993. Assessment under s. 143(3) was completed on a total income of Rs. 15,55,579 on 29th March, 1996 making addition of Rs. 15,15,859. The order under s. 143(3) was contested before CIT(A) who cancelled the order of the AO and directed as under : 'It is held that assessment proceedings are bad in law and hence cancelled. The AO should take remedial action under s. 147 or any other provisions of the Act to tax the income escaping assessment.' Accordingly notice under s. 148 of the IT Act, 1961 was issued and sent by RPAD on 27th March, 1998, but assessee denied about the receipt of notice vide his letter dt. 12th Jan., 1999. Considering the legal aspect at the initial stage and considering the large amount of income to be taxed, an approval under s. 147 may kindly be granted. Sd/- Asstt. CIT, Circle-1(3), Nagpur.\" 10. Direction of the higher authority including that of the CIT(A) will not confer power to assume jurisdiction to the AO to initiate reassessment proceeding. With this considered view, on a total in-depth study of the case laws and considering the rival submissions, we allow the assessee's appeal and cancel the order of the CIT(A). Before parting with the order it is to be pointed out that the notice issued under s. 143(2) was also barred by time in this case and since the root of the matter had been dealt at length as above, we did not feel it proper to again deal with ground No. 5 in detail. Howsoever it is treated to have been considered and decided in favour of the assessee. 11. In the result, the assessee's appeal is allowed. Even the co-ordinate bench of Kolkata vide dealing with the appeal of the revenue in the case of ITO Vs. Sri Biswajit Chatterjee ITA no. 565/Kol/2023 has also held that “ CIT(A) has not power under the provision of law for giving any direction to AO for re-opening of assessment”. Respectfully following the finding as discussed herein above we are of the considered view that ld. CIT(A) will not confer power to assume jurisdiction to the AO to initiate reassessment Printed from counselvise.com 51 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal proceeding. Even otherwise the apex court has also while dealing with the provision of section 147/148 of the Act in the case of Parashuram Pottery Works Co. Ltd Vs ITO [ 1977] 106 ITR 1 held that; “According to section 148 of the Act of 1961, before making the assessment, reassessment or recomputation under section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of section 139; and the provisions of the Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. The Income-tax Officer has also, before issuing such notice, to record his reasons for doing so. Section 149 prescribes the time limit for the notice. The time limit in a case not falling under clause (ii) of sub-section (1) of section 149, with which we are not concerned, shall be eight years from the end of the relevant assessment year. Incases falling under clause (b) of section 147, however, the time limit for the notice is four years from the end of the relevant assessment year. Clause (a) of section 147 of the Act of 1961 corresponds to clause (a) of sub-section (1) of section 34 of the Act of 1922. The language of clause (a) of section 147 read with sections 148 and 149 of the Act of 1961 as also the corresponding provisions of the Act of 1922 makes it plain that two conditions have to be satisfied before the Income- tax Officer acquires jurisdiction to issue notice under section 148 in respect of an assessment beyond the period of four years but within a period of eight years from the end of the relevant year, viz., (i) the Income-tax Officer must have reason to believe that income chargeable to tax has escaped assessment, and (ii) he must have reason to believe that such income has escaped assessment by reason of the omission or failure on the part of the assessee (a) to make a return under section 139 for the assessment year to the Income-tax Officer, or (b) to disclose fully and truly material facts necessary for his assessment for that year. Both these conditions must co-exist to confer jurisdiction on the Income-tax Officer. It is also imperative for the Income-tax Officer to record his reasons before initiating proceedings as required by section 148(2). Another requirement is that before notice is issued after the expiry of four years from the end of the relevant assessment years, the Commissioner should be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment. Production before the Income-tax Officer of the account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure contemplated by law. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for Printed from counselvise.com 52 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal reopening assessments: See Income-tax Officer v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC). The words \"omission or failure to disclose fully and truly all material facts necessary for his assessment for that year\" postulate a duty on the assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority has to draw inference as regards certain other facts; and ultimately from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable: See Calcutta Discount Co. v. Income-tax Officer [1961] 41 ITR 191 , 201 (SC). As further observed in that case: \"Does the duty, however, extend beyond the full and truthful disclosure of all primary facts? In our opinion, the answer to this question must be in the negative, Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else—far less the assessee—to tell the assessing authority what inferences, whether of facts or law, should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences—whether of facts or law—he would draw from the primary facts.\" Keeping in view the principles enunciated above, we may deal with the contention advanced on behalf of the appellant that the present is not a case in which action could be taken under section 147(a) of the Act of 1961. This contention has been controverted by the learned counsel for the respondent who has canvassed for the correctness of the view taken by the High Court in the judgment under appeal. It would appear from what has been discussed above that one of the essential requisites for proceeding under clause (a) of section 147 of the Act of 1961 is that the income chargeable to tax should escape assessment because of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The present is not a case where the assessee had omitted or failed to file the return. Question then arises as to what has been omission or failure on the part of the assessee to make a full and true disclosure. There is nothing before us to show that in the return filed by the assessee-appellant the particulars given were not correct. Form C under rule 19 of the Indian Income-tax Rules, 1922, at the relevant time gives the form of return Printed from counselvise.com 53 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal which had to be filed by the companies. Part V of that form deals with depreciation. The said part requires a number of columns to be filled in by the assessee. It has not been suggested that any of the information furnished or any of the particulars given in those columns by the appellant-company were factually incorrect. Nor is it the case of the revenue that the appellant failed to furnish the particulars required to be inserted in those columns. Indeed, the copy of the return has not been filed and consequently no argument on that score could be or has been addressed before us. Part V of the form no doubt requires the assessee to state the written down value in column No. (2). Such written down value had to be specified without taking into account the initial depreciation because such depreciation in terms of clause (vi) of section 10(2) of the Act of 1922 could not be deducted in determining the written down value for the purpose of that clause. The case of the appellant is that in determining the amount of depreciation at the time of the original assessment for the two assessment years in question, the Income-tax Officer relied upon the written down value of the various capital assets as obtaining in the records of the department. This stand has not been controverted. When an Income-tax Officer relies upon his own records for determining the amount of depreciation and makes a mistake in doing so, we fail to understand as to how responsibility for that mistake can be ascribed to an omission or failure on the part of the assessee. It also cannot be disputed that initial depreciation in respect of items of capital assets in the shape of new machinery, plant and building installed or erected after the 31st day of March, 1945, and before the 1st day of April, 1956, is normally claimed and allowed. It seems that the Income-tax Officer in working the figures of depreciation for certain items of capital assets lost sight of the fact that the aggregate of the depreciation, including the initial depreciation, allowed under different heads could not exceed the original cost to the assessee of those items of capital assets. The appellant cannot be held liable because of this remissness on the part of the Income-tax Officer in not applying the law contained in clause (c) of the proviso to section 10(2)(vi) of the Act of 1922. As observed by Shah J. in Commissioner of Income-tax v. Bhanji Lavji [1971] 79 ITR 582 (SC), section 34(1)(a) of the Act of 1922 (corresponding to section 147(a) of the Act of 1961) does not cast a duty upon the assessee to instruct the Income- tax Officer on questions of law. It may also be mentioned that so far as the assessment for the assessment year 1957-58 is concerned, the assessment order was once rectified and at another time revised. Despite such rectification and revision, the above mistake in the calculation of the depreciation remained undetected. It was only in October, 1965, that the Income-tax Officer realised that higher amount of depreciation had been allowed to the appellant than was actually due. A letter to that effect was consequently sent to the assessee on October 5, 1965. It was, however, nowhere mentioned in that letter that the higher amount of depreciation had been allowed and the income as such had escaped assessment because of the omission or failure on the part of the assessee to disclose truly and fully all material facts. Reference to such omission or failure came only in a subsequent Printed from counselvise.com 54 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal communication. The submission made on behalf of the appellant is not without force that reference was made to the assessee's omission or failure to disclose truly and fully all material facts because it was realised that after the expiry of four years from the end of the relevant assessment year, no action for reopening of assessment could be taken on the basis of detection of mistake alone unless there was also an allegation that the income had escaped assessment because of the omission or failure of the appellant to disclose fully and truly material facts. Looking to all the facts, we are of the opinion that it cannot be said that the excess depreciation was allowed to the appellant-company and its income as such escaped assessment because of its omission or failure to disclose fully and truly all material facts. It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. So far as the income- tax assessment orders are concerned, they cannot be reopened on the score of income escaping assessment under section 147 of the Act of 1961 after the expiry of four years from the end of the assessment year unless there be omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. As already mentioned, this cannot be said in the present case. The appeal is consequently allowed, the judgment of the High Court is set aside and the impugned notices are quashed.” Thus, what is not permitted directly cannot be permitted indirectly and therefore, the ld. CIT(A) cannot broaden the scope of the appeal decision to “advise” or “compel” another round of litigation again and again and as held by the apex court that we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage. Thus, looking to the provision of the law, decided case and facts of the present case we are of the considered view that ld. CIT(A) was tasked with deciding whether the addition under Section 153A was sustainable given the specific facts and circumstance of the case. Ld. CIT(A) rightfully found it was not (for want of incriminating material) and deleted it. At that point, ld. CIT(A)’s authority ended. Ld. CIT(A) should have simply allowed the appeal on that issue. By proceeding to direct the AO to consider re-opening under Section 147, the ld. CIT(A) acted ultra vires and thereby we allow the cross objection of the assessee. Printed from counselvise.com 55 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Being consistent with the finding so recorded by the bench ground no. 1 raised by the assessee is allowed. 10. The second ground deals with the action of the ld. CIT(A) in confirming the addition of Rs. 1 lacs u/s 69 of the Act on account of alleged unexplained investment in advances on the basis of Page 57 of Exhibit 4 of AS-1 by not accepting the explanation that it is a memorandum noting without name. Even otherwise, the source of giving such advance was out of the cash available as per the cash book and the amount is received back by holding that the explanation of assessee is not reliable and there is no evidence of receipt back of the amount few days after. The brief facts related to the dispute are that while search from the mobile of the assessee, print out of images extracted were annexed as Exhibit 4 of Annexure AS 1. Page 57 of this Exhibit (page 10 of the paper book ) shows noting of some amount given and received back without any name. The assessee vide letter dt.19.09.2021 (paper book page 2 point no. 7) explained that from the paper it appears that on 21.02.2016 amount given for a temporary period is received back on 02.03.2016. Thereafter Rs.45,000/- taken on 17.11.2016 was paid back on 24.11.2016. However, against amount of Rs.1,00,000/- dated 18.03.2014, there is no corresponding amount noted but from the paper it is evident that amount given/taken is for a temporary Printed from counselvise.com 56 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal period and therefore in the absence of any name no adverse inference can be drawn. In the assessment proceeding ld. AO held that the amount of Rs.1,00,000/- advanced on 18.03.2014 has not been received back and assessee has failed to prove the source of the aforesaid investment in advances. Accordingly, addition of Rs.1,00,000/- was made u/s 69 of the Act. When the matter was challenged before the ld. CIT(A) the assessee alternatively contended that as per the cash book (page 11-13 of the paper book), assessee has available cash of Rs.4,55,275/- on 18.03.2014 but since the amount is given for a temporary period, neither the entry for amount given was made nor the entry of amount received back was also not made. The Ld. CIT(A) however at page 8 para 2.5 of the order held that assessee has accepted that advance is given by him but in the absence of receipt back of the amount the same cannot be presumed. Further balance in cash book has no relevance as no entry of advance given is recorded in the cash book. Accordingly, addition made by the AO was confirmed by him. Before us it was argued that the noting on this paper founds without any name and it is only a memorandum noting. Against the amount of Rs.1,00,000/- having date 18.03.2014 there was no noting of the amount received back. As is evident that against the noting of Rs.2,00,000/- date mentioned is of 12.02.2016 against that the date of amount received back Printed from counselvise.com 57 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal was 02.03.2016 & against the noting of receipt of Rs. 45,000/- date 17.11.2016 is the date of amount paid back on 24.11.2016. The subsequent noting indicates that the amount given on 18.03.2014 is also received back within few days but the date on which the amount is received back was not noted. Therefore, it was presumed that this amount was not received back when the subsequent advance given/taken has been received back/paid back. Otherwise also, as per the cash book of the assessee page 11, he has cash balance of Rs. 4,55,275/- on 18.03.2014 which is the source of advance of Rs.1,00,000/-. Merely the said entry was not reflected in the cashbook neither the advance given nor the advance received back was recorded as it was for a temporary period. Ld. CIT(A) has incorrectly held that assessee has accepted that advance is given by him but in fact the assessee in order to explain the paper has stated as alternative argument stating that he has the source for such advance. The record reveals that the assessee has recorded the money given and received back. The availability of cash in the cash book was also not denied by the lower authority and thereby merely the date is not mentioned the said amount cannot be added in the hands of the assessee and thereby we consider the explanation of the assessee that it was for a temporary period and the since the cash book Printed from counselvise.com 58 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal source the availability of cash no addition is required to be made and thereby ground no 2 raised by the assessee is allowed. 11. Ground no. 3 being general does not require our finding and ground no. 4 for the cost to be rewarded and there being no submission or argument advanced the same does not require any finding. In the result, the appeal in ITA no. 493/JP/2025 filed by the assessee is allowed. 12. Now we take up the appeal of the assessee in ITA no. 500/JP/2025 thereby the assessee has taken the following grounds of appeal; 1. The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. 2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.6,23,963/- u/s. 69A of the Act in the hands of assessee on account of advances given to employees noted in Exhibit AS-37 ignoring that such advances were given by various group concerns of the assessee to its employees and not by the assessee himself. He has further erred in not accepting the contention of assessee that opening advances of Rs.4,23,314/- noted therein were given prior to AY 2014-15 and the advances so given are otherwise covered by the cash balance available in the books of various group concerns. Printed from counselvise.com 59 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 13. Ground no. 4 being general does not require our finding and ground no. 1 for the cost to be rewarded and there being no submission or argument advanced the same does not require any finding. 14. So far as regards the facts of the ground no. 2 raised in this appeal are concerned the bench noted that the same are similar to the facts of the case in ITA no. 493/JP/2025 and therefore, it is not imperative to repeat the facts of the case, arguments and submission advanced so far as ground no. 2 is considered. Hence, the bench feels that the decision taken by us in ITA No. 493/JP/2025 for the Assessment Year 2014-15 while dealing with the ground no. 1 shall apply mutatis mutandis in the case of Shri Mahendra Kumar Goyal in ITA No 500/JP/2025 for Assessment Year 2015-16 in ground no. 2 raised by the assessee and thereby the ground no. 2 raised by the assessee in ITA no. 500/JP/2025 is allowed. 15. Now coming to the last ground no. 3 raised by the assessee in this appeal, the bench noted that the assessee challenges the addition of Rs. 6,23,963/- made u/s. 69A of the Act in the hands of the assessee on account of advances given to employees noted in Exhibit AS -37 ignoring to the fact that such advances were given by the various group concerns of Printed from counselvise.com 60 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal the assessee to its employees and not by the assessee himself. He also challenges that Rs. 4,23,314/- cannot be added in the year under consideration being prior to A.Y. 2014-15 and the advances so given are otherwise cash balance available in the group concerns. 15.1 The brief facts related to the dispute are that while search a diary marked Exhibit no. 37 of Annexure AS was found (refer paper book page 32-69). This diary was written by Sanjay Kumar Goyal, brother of the assessee, found from the office of the group concern at RICCO Industrial Area, Neem ka Thana. In the diary, the amount advanced to employees of various group concerns is noted. It contains the details of opening outstanding, amount advanced, amount deducted from salary/amount received back and the outstanding amount on the date of search. The noting in this diary is from June- July 2014 to the date of search. In the assessment proceeding assessee vide letter dt.17.09.2021 (PB 14-31) at point no. 2 (xxi) (PB 28-31) provided the name of the concern where such employees are employed and statement of outstanding opening & closing balance and explanation with reference to each of such advance as narrated at page 15 to 21 of the assessment order. It was further explained that advancassessment, this diary with the dates of June-July 2014 to the extent of Rs.3,90,314/- (correct amount Rs.4,23,314/-) is carried forward Printed from counselvise.com 61 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal from earlier years and advance given during the period covered by search assessment after considering the realization is only Rs.1,22,650/-, source of which is out of the available cash balance of various concerns and thus the advance given to the employees stands explained. 15.2 Ld. AO however observed that Shri Kamal Sharma, accountant of Goyal Group was unable to explain the contents of the diary in his statement recorded u/s 132(4) of the Act. During post search verification the entries in the diary could not be got verified from the books of any of the concerns of the Goyal Group. By referring to page 1 & 2 of this Exhibit (PB 53) which contains details of FDR relating to the assessee and his wife, an inference is drawn that diary belongs to the assessee and advances are given by the assessee. The total of such advance from AY 2015-16 to 2020-21 was arrived at Rs.17,94,851/- (AO page 15) and accordingly the additions were made for Rs.6,23,963/- as against Rs.6,22,520/- worked out at page 15 of the assessment order. 15.3 When the matter carried before the ld. CIT(A) at para 5.2 page 8-11 of the order specifically in the last para of page 9 accepted that the amount noted in the diary represent the advance given to the employees of various concerns of the group of which assessee is the key person and the details of the FDR and his wife is also mentioned at page 1 & 2 of the seized Printed from counselvise.com 62 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal annexure. Therefore, the source of money needs to be explained by the assessee. Simply by raising some objections in the document, the assessee cannot evade the tax liability. Further the claim that various concerns of the assessee has sufficient cash balance when the advance was given but since such advance was adjusted against the salary or realized subsequently which are not recorded in the books to avoid multiple entries cannot be accepted as assessee has not produced affidavits from these persons. Accordingly by referring to the two decisions which are not relevant to the case of the assessee, the addition made by the AO was confirmed. 15.4 Before us it was submitted that Shri Kamal Sharma while recording a statement u/s. 132(4) vide question no. 44 recorded on 14.06.2019 (paper book page 77) stated as regards to this annexure AS 37 that this diary contains the account of various persons recording the advance given to employees of various group concerns and the amount realized from their salary or otherwise recorded. The fact stated were not denied by the lower authority that these employees were employed in group concerns. The details is placed on record vide page 15 & 16 of the assessment order. Record reveals that 15 persons to whom the advance given were noted in that diary. The statement giving the name of employees/persons, concerns Printed from counselvise.com 63 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal where they are employed, opening advance given, advance given during FY 2014-15 to 2020-21, closing balance of advance and the amount realized was placed at record (Page 8A-13A of the paper book filed). The lower authorities have incorrectly drawn an inference on the basis of the noting of FDR of assessee and his wife at page 1-2 of this Annexure that advance was given by the assessee ignoring that Shri Sanjay Goyal has noted these details only for memorandum purpose and on the basis of such noting it cannot be inferred that the advances was given by the assessee from his own sources. Thus, the addition made in the hand of the assessee without bringing any material /evidence on record that such advance were given by the assessee. The alternative argument was that the working done by the ld. AO was not correct. As the worked out figure at Rs.6,22,520/- was arrived ignoring the fact that out of it against the amount of Rs.4,23,314/- there is a narration “Baki” meaning thereby with the date of 11.07.2014. This shows that noting in this dairy was stated on 11.07.2014 and the amount which was advanced in earlier period was noted with the narration “Baki”. Hence the amount of Rs.4,23,314/- cannot be added in the year under consideration. Further the AO in making the addition has not allowed set-off of realization of advances which is source of giving the Printed from counselvise.com 64 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal subsequent advance. Thus, the addition made is also incorrect in terms of figures. 15.5 On the other hand, ld. DR has relied upon the orders of the lower authority and has also filed a written submission on this aspect of the matter which reads as follows; Ground No. 2: “The Ld. CIT(A) has erred on facts and in law in confirming the addition of ₹6,23,963/- u/s 69A of the Act in the hands of assessee on account of advances given to employees noted in Exhibit AS-37 ignoring that such advances were given by various group concerns of the assessee.” I.Rebuttal by the Revenue: 1. Presumption under Section 292C – Not Rebutted: The diary marked Exhibit AS-37, seized from the premises of the assessee group, clearly records unaccounted cash advances. As per Section 292C, a statutory presumption arises that the diary belongs to the assessee and its contents are true. The assessee has not discharged the burden to rebut this presumption even no violation of natural justice, pointed out. 2. FDR in Name of Assessee & Wife – Strong Evidentiary Link: The document contains references to FDRs in the name of the assessee and his wife, which directly link ownership to him. The assessee has not denied these facts, and the presence of his wife's name is not a coincidence. No other group member’s name appears on the seized diary. 3. No Accounting Trail or Books Entry: The alleged advances are not recorded in the books of accounts of the assessee or any group concern. No journal entries, ledgers, or cash books have been produced. This constitutes a clear violation of accounting principles and results in treatment as unaccounted expenditure. Printed from counselvise.com 65 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 4. Unaccounted Cash Even If Assumed to Be from Group Concerns: Even if the assessee argues that the funds originated from group concerns, the fact remains that the transaction is entirely unrecorded. Unaccounted transactions, even by related parties, do not escape taxability under Section 69A. 5. Date of Diary Entry – Financial Year 2014–15 – Addition is Valid: The diary starts on 11.07.2014, which falls squarely within F.Y. 2014–15 (A.Y. 2015–16). The assessee's argument that the amount relates to earlier years is baseless. 6. As per Section 69, the relevant criterion is \"found during the financial year\", not when the transaction allegedly began. Therefore, the addition is rightly made in this assessment year. 7. No Effort Post-Search to Reconcile or Justify: The assessee had sufficient time post-search to: o Obtain confirmations from alleged group concerns, o Match the cash advances with any cash withdrawals, o File evidence or bank statement, o Genuineness of transaction, o Books of accounts, o Ledger of advances with cross entry if regular but none of these were done. 8. No Consolidated Explanation from Other Family Members: The assessee has not submitted any consolidated statement of unaccounted cash availability or investment by other family members of the group to justify the source of cash allegedly used for these advances. In absence of such an integrated explanation, the plea of group-level cash availability is hollow and unsubstantiated. 9. CIT(A) Findings are Factually and Legally Correct: The Ld. CIT(A) has correctly upheld the addition by relying on: o The direct link between the assessee and the diary, o Lack of books entry or corroboration, o Case laws such as Shri Chetan Gupta vs. ACIT, CIT v. Sharraf Trading Co., and K. Palaniappan, which clarify that unverifiable “opening balances” or unsupported source explanations cannot be accepted. Printed from counselvise.com 66 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal II. Applicable Provisions: Sections 292C, 153A of the Income Tax Act & Indian Evidence Act To Rebut Assessee's Plea Against Additions Based on Seized Documents 1. Jurisdiction under Section 153A • Once a search is conducted under Section 132, the Assessing Officer acquires statutory jurisdiction under Section 153A to assess or reassess six preceding years and the year of search. • For concluded assessments, additions can only be made based on incriminating material found during the search. Citation: • CIT v. Singhad Technical Education Society (2017) 397 ITR 344 (SC) The AO acted same and addition was made on seized documents only, THE OWNER SHIP OF SEIZED DOCUMENT IS NOT DENIED 2. Statutory Presumption under Section 292C • Section 292C provides a rebuttable presumption that: 1. Documents or assets found belong to the person searched; 2. Are genuine; 3. Contain truthful contents. Citation: • Surendra M. Khandhar v. ACIT (2009) 224 CTR 409 (Bom) Assessee never objected that the documents were not genuine or does not belong to assessee. 3. Onus on Assessee to Rebut Presumption • Once documents/assets are found, initial burden lies on the assessee to explain the contents. • AO is not required to disprove them at the threshold. Citations: • CIT v. Chuharmal (1988) 172 ITR 250 (SC) Printed from counselvise.com 67 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal • CIT v. P.V. Kalyanasundaram (2007) 294 ITR 49 (Mad) • Shashi Garg v. CIT (2007) 162 Taxman 171 (Del) This is not the duty or power of AO to disprove the incriminating document. It is the assesee who need to explain the details with evidence. Here assesee faile dto do so. Only oral argument without any evidence are not enough to rule out the ownership or addition. 4. Application of Evidence Act • Section 106: Where knowledge is specific to the assessee (e.g., initials, codes), onus is on him to explain. • Section 110: Possession implies ownership, unless rebutted with proof. Citation: • Sushil Kumar v. CIT (1980) 121 ITR 94 (P&H) Assessee has to brought the evidence that paper belongs to someone else as per Law. 5. \"Dumb Document\" Plea – Not a Valid Shield • A cryptic, unsigned, or informal document is not inadmissible per se. • If found in possession/control of the assessee and not explained, it can form the basis of addition. Citations: • CIT v. Ajay Gupta (2019) 101 taxmann.com 271 (All) • Dayawanti v. CIT (2016) 75 taxmann.com 308 (Del); SLP dismissed (SC, 2018) If assessee admits it is money but not able to explain source it is unaccounted as per law. 6. Timing of Rebuttal – Critical • Any explanation must be given during assessment proceedings. • After thought and reasonable time both are easily distinguishable as per human probability test. • Fresh evidence at appellate stage is subject to Rule 46A of the IT Rules. Printed from counselvise.com 68 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Citation: • CIT v. Manish Buildwell Pvt. Ltd. (2011) 245 CTR 397 (Del) 7. Principles of Natural Justice • Revenue has provided opportunities to the assessee through notices and document copies. • Failure to respond is not a breach of natural justice. Citation: • Andaman Timber Industries v. CCE (2015) 62 taxmann.com 3 (SC) And when assessee fails to point out violation natural justice it must demonstrate wht wrong has been done by AO. 8. Section 292C & Third Party Documents • If document belongs to a third party, assessee must establish it \"belongs to\" other. Citations: • Pepsi Foods Pvt. Ltd. v. ACIT (2014) 367 ITR 112 (Del) 9. Summary of Key Supporting Judgments Issue Citation Ownership by possession Chuharmal v. CIT (1988) 172 ITR 250 (SC) Burden to explain seized cash Shashi Garg v. CIT (2007) 162 Taxman 171 (Del) Cryptic documents admissible Dayawanti v. CIT (2016) 75 taxmann.com 308 (Del) Dumb documents rebuttable CIT v. Ajay Gupta (2019) 101 taxmann.com 271 (All) Natural justice opportunity Andaman Timber Industries v. CCE (2015) 62 taxmann.com 3 Conclusion – In Favour of Revenue: 6. Section 153A empowers AO to make additions based on seized material. Printed from counselvise.com 69 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 7. Section 292C provides a strong presumption in favour of Revenue. 8. Assessee has primary onus to rebut the entries/documents with documentary proof. 9. Failure to rebut = valid addition under Sections 69/69A/69C. 10. “Dumb document” argument is not valid unless supported with concrete rebuttal. Therefore, entries in seized material must be credibly and contemporaneously explained. Failure to do so justifies addition as undisclosed income in law. Prayer: In view of the above: • The source of cash remains unexplained, • The diary was found in the relevant year and contains undisclosed transactions, • The plea of group-level funds is unsupported by evidence, and • The assessee’s failure to submit consolidated or corroborative financial data of family members or concerns weakens his claim further. The addition of ₹6,23,963/- under Section 69A is fully justified and the order of the CIT(A) deserves to be upheld. The assessee’s ground may be dismissed. Respectfully Submitted on Behalf of the Revenue 15.6 Before us without prejudice it was argued that the various concerns of the assessee have sufficient cash balance when the advance was given but since such advance was adjusted against the salary or realized subsequently, for the sake of avoiding multiple entries, they were not recorded in the books of accounts. However, considering the availability of cash balance of these concerns, the source of giving advance since available it cannot be made. If at all even that also not considered then the addition can be made in the hands of those concerns where that Printed from counselvise.com 70 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal employees were employed and not in the hands of the assessee. The bench considered the issue and also note that the revenue in the subsequent years, made no addition. The assessee vide submission dated 24.07.2025 in support of the arguments advanced has also supported his arguments by placing on record the confirmation of the concerns where those employees were working. Looking to the detailed facts and arguments placed on record we are of the considered view that based on that set of fact the addition cannot be made in the hands of the assessee and thereby we direct the ld. AO to delete the addition of Rs. 6,23,963/-. In the result ground no. 3 raised by the assessee is allowed. In the result, the appeal in ITA no. 500/JP/2025 filed by the assessee is allowed. 16. Now we take up the appeal of the assessee in ITA no. 495/JP/2025 for the assessment year 2016-17, thereby the assessee has taken the following grounds of appeal; 1. The Ld. CIT(A) has erred on facts and in law in holding that though addition for the amount noted on the paper extracted from laptop of Sh. Narayan Goyal, s/o Sh. Daulat Ram Goyal cannot be I added in the hands of assessee but at the same time observing that impugned paper is found to be taxable in the hands of Sh. Daulat Ram Goyal whose appeal is pending with him even when it was not an issue in appeal before him. Printed from counselvise.com 71 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.5,47,500/- (8,00,000 - 2,52,500) u/s 69 of the Act on account of alleged unexplained investment in purchase of agriculture land on the basis of noting at back page of Pg 1 of Annexure AS-70 ignoring that assessee do know Pappi Yadav nor he has purchased any property from him. 3. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 1,68,000/- on the basis of accrued interest on advance given even when the same has been taxed by the AO in AY 2017-18 when it was actually received and such unrecorded interest receipt is otherwise taxable on receipt basis and not on accrual basis. 4. The appellant craves to alter, amend and modify any ground of appeal. 5. Necessary cost be awarded to the assessee. 17. The bench noted that Ground no. 4 being general does not require our finding and ground no. 5 for the cost to be rewarded and there being no submission or argument advanced the same does not require any finding. 18. So far as regards the ground no. 1 raised in this appeal no. 495/JP/2025 the bench noted that for that the facts of this ground are similar to ITA no. 493/JP/2025. Therefore, it is not imperative to repeat the facts of the case, arguments and submission advanced so far as ground no. 1 is concerned. Hence, the bench feels that the decision taken by us in ITA No. 493/JP/2025 for the Assessment Year 2014-15 while dealing with the ground no. 1 shall apply mutatis mutandis in the case of Shri Mahendra Printed from counselvise.com 72 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Kumar Goyal in ITA No 495/JP/2025 for Assessment Year 2016-17 in ground no. 1 raised by the assessee and thereby the ground no. 1 raised by the assessee in ITA no. 495/JP/2025 is allowed. 19. Now coming to the last ground no. 2 raised by the assessee in this appeal, the bench noted that the assessee challenges the finding of the ld. CIT(A) while sustaining the addition of Rs. 5,47,500/- [ 8,00,000 – 2,50,000 ] u/s 69 of the Act on account of alleged unexplained investment in purchase of agricultural land on the basis of noting at back page of 1 of Annexure AS – 70 ignoring the fact the assessee do not know Pappi Yadav nor he has purchased any property from him. 19.1 The brief facts related to this dispute are that the ld. AO para 6 of the order observed that on examination of the backside of page 1 of Exhibit 70 of Annexure AS seized from the corporate office of the assessee group it is found that assessee has paid Rs.16,00,000/- in cash to Pappi Yadav on 03.07.2015. The reply filed by the assessee against the show cause notice is not found acceptable as the assessee could not explain the source of that payment so made. Accordingly, an addition of Rs.16,00,000/- was made on account of unexplained investment u/s 69 of the Act. The assessee contended that he was not provided the copy of that paper nor it Printed from counselvise.com 73 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal was scanned in the assessment order. The assessee was also not given any show cause notice on this issue. Therefore no reply could be furnished by assessee. It is further submitted that on this paper statement of Sh. Kamal Sharma, accountant of the group was recorded u/s 132(4) on 14.06.2019. Sh. Kamal Sharma with reference to this Annexure AS 70 (PB 74-75) stated that there are 46 pages in this annexure in which the document related to agricultural land purchased by the assessee, Ahir Ahmed Kureshi and Shri Kesari Devi Agarwal are kept. On the backside of page 1 it is noted that Rs.6,00,000/- has been received on 03.07.2015 and the balance would be received on finalizing the account of boundary wall. Total amount received was Rs. 16,00,000/-. He is unaware of these transactions and stated to submit explanation late on. Considering that aspect of the matter the addition was made by AO without providing the paper and without issuing show cause notice for an amount of Rs. 16,00,000/-. The assessee challenged that addition before the ld. CIT(A). 19.2 While proceeding before the ld. CIT(A) the assessee obtained the impugned paper from the revenue [ paper book page 25A ]. As is evident that page 1 of this annexure is with reference to registration charges paid in respect of a property sold by Bhaga to the assessee on 10.06.2015. On the back side of this page there is a receipt recorded with date 03.07.2015 by Printed from counselvise.com 74 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Shri Pappi Yadav that he has received Rs.6,00,000/- against the plot and the total amount received is Rs.16,00,000/-. Assessee does not know Shri Pappi Yadav nor he had purchased any property from Pappi Yadav. Hence this paper does note relates to the assessee. However, the Ld. CIT(A) at para 5.2 page 8-9 of the order observed that the details of receipt of Rs.16,00,000/- is mentioned on the back side of the document or property purchased by the assessee with the narration that the remaining hisab will be done after the “Danda work”. Assessee has not explained how and why this working has been mentioned behind his deed of property. Thus, invoking provision of section 292C he hold that paper is to be considered in the hands of the assessee. Since the share of the assessee in the property, on the back of which this is noted, is only 50%, the share of the assessee as per this paper was worked out at Rs.8,00,000/-. Out of this amount 50% of consideration recorded in the purchase deed i.e., Rs.2,52,500/- and thereby the balance amount of Rs.5,47,500/- sustained in the hands of the assessee. 19.3 Before us the it was argued that the assessee has not purchased the property from Shri Pappi Yadav on the back of which the above noting is found recorded. Assessee has purchased the said property from Mr. Bhaga. The noting nowhere state that amount is paid by the assessee. The Printed from counselvise.com 75 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal property was sold by Mr. Bhaga to the assessee by registered sale deed on 10.06.2015 whereas the noting is dt.03.07.2015. It is beyond human probability that cash would be paid after the sale deed is registered. The presumption u/s 292C is rebuttable presumption. The assessee does not know Pappi Yadav. Even the AO has not provided the paper during the assessment proceedings nor statement of the assessee was recorded on this paper during the course of search. Hence the addition of Rs.5,47,500/- confirmed by CIT(A) is unjustified and the same be deleted. 19.4 On the other hand, ld. DR supported the orders of the lower authority and thereby also relied upon the following written submission to this ground; Ground No. 2 – Erroneous Deletion of Part of the Addition under Section 69 – ₹16,00,000 Cash Investment in Land (only ₹5,47,500 confirmed) The seized document (Annexure AS-70, back side of Page 1), recovered from the corporate office of the assessee group, records a cash transaction involving ₹16,00,000 towards land-related construction (\"danda work\"). The document, signed and witnessed by two persons, specifically mentions receipt of ₹6,00,000 on 03.07.2015 with the remaining amount payable later. This is direct, contemporaneous, and corroborated evidence of unaccounted investment. The assessee has not denied the handwriting or content, nor has any forensic analysis been provided to discredit the document. Printed from counselvise.com 76 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Instead, a vague explanation has been offered attributing the transaction to group-level activity without submitting any partnership agreement, registry of land, or contribution record. The CIT(A)'s partial acceptance of the addition (only ₹5,47,500) is not based on any cogent evidence. The assumption of 50% ownership or shared investment is purely presumptive and not supported by any legal or documentary basis. In the absence of verifiable records, the entire amount of ₹16,00,000 should be treated as the assessee’s unaccounted investment under Section 69. Supporting Case Laws: • Dayawanti v. CIT (2016) 75 taxmann.com 308 (Delhi HC): Seized documents with numerical entries and initials, if found during search and not rebutted, constitute admissible and valid evidence. Such documents are not ‘dumb’ merely because they are informal or unregistered. (SLP dismissed by Hon’ble Supreme Court in 2018). • Chuharmal v. CIT (1988) 172 ITR 250 (SC): The presumptions under the Indian Evidence Act, particularly Sections 110 and 106, apply to income-tax proceedings. Possession of documents gives rise to the presumption of ownership unless rebutted by the assessee with credible proof. 19.5 We have heard the rival contentions and perused the material placed on record. As is evident from the submission of the ld. DR that she is even disputing the finding of the ld. CIT(A) while deleting the addition partially but since the revenue is not challenging that finding we restrict the issue to the Printed from counselvise.com 77 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal extent the same is disputed before us. The bench noted that the assessee has not purchased the property from Shri Pappi Yadav. So the writing made on the back of which the above noting is found recorded does not so any co-relation whatsoever with the assessee. Not only that while the search proceeding or in the post search or that of in the assessment proceeding the assessee was not confronted to this evidence that the revenue relies. No enquiry whatsoever nor that a specific shows cause notice as required was given to the assessee and thereby the addition made is in gross violation of principles of natural justice and thereby the same cannot be sustained. Not only that the revenue did not prove any relation with that Pappu Yadav. Record reveals that the assessee has purchased the said property from Mr. Bhaga. The noting nowhere state that amount is paid by the assessee. The property was sold by Mr. Bhaga to the assessee by registered sale deed on 10.06.2015 whereas the noting is dt.03.07.2015. It is beyond human probability that cash would be paid after the sale deed is registered. The presumption u/s 292C is rebuttable presumption. The assessee does not know Pappi Yadav and the revenue did not make any effort to place on correct facts on record. Based on that set of facts we see no reason even to sustain the addition of Rs. 5,47,500/- Printed from counselvise.com 78 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal confirmed by CIT(A) and therefore, we direct to delete the same also. In the result ground no. 2 raised by the assessee is allowed. 20. Vide ground no. 3 raised the assessee challenges the finding of the ld. CIT(A) while sustaining the addition of Rs. 1,68,000/- being the amount of interest on advances given when the same has been taxed in the A. Y. 2017-18 by the ld. AO on receipt basis how the same is again sustainable in the year under consideration i.e. 2016-17. 20.1 The brief facts related to the disputes are that based on the page 61 of Exhibit 4 of Annexure AS (page 78) it is found that assessee has earned interest of Rs.1,83,000/- during the year on the cash loan given. According to the reply furnished by the assessee the loan was given on 04.07.2015 and realized back subsequently on 18.10.2016. The contention of the assessee that temporary advance was given out of available cash balance in various concerns of the assessee appears to be reasonable. However, the contention that the entire interest income of Rs.2,80,000 should be taxed in AY 2017-18 is not proper and therefore proportionate interest for the year was worked out at Rs.1,68,000/- (2,80,000*9/15) and addition was made for the same. When the matter carried before the ld. CIT(A) he has confirmed the addition as made by the ld. AO. Printed from counselvise.com 79 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 20.2 Before us the ld. AR of the assessee submitted that assessee advanced Rs.10,00,000/- on 04.07.2015 which was received back on 07.06.2016. On this amount interest for the period 04.07.2015 to 07.06.2016 was worked at Rs.2,20,000/- and thus the total amount due is Rs.12,20,000/-. Against this Rs.11,00,000/- was received on 07.06.2016 and Rs.1,00,000/- on 18.10.2016. Thus, the interest realized is Rs.2,00,000/-. Since the interest amount is actually received in AY 2017-18 & AO has also made addition of the interest so received in that year, again making the addition for the proportionate interest has amounted to double addition. The Ld. CIT(A) has though reduced the addition of Rs.2,80,000/- made in AY 2017-18 to Rs.1,12,000/- but as held by Hon’ble Gauhati High Court in case of N.R. Sirker vs. CIT that where the assessment order show that no proper accounts were kept, it would not be justified to presume that assessee kept his accounts in the mercantile system. Income tax is normally paid on money actually received as income after deducting the allowable deductions. In the present case also the interest was actually received in AY 2017-18 and therefore the same can be taxed in that year. Hence the addition of 1,68,000/- confirmed by CIT(A) required to be deleted. Printed from counselvise.com 80 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 20.3 On the other hand, ld. DR supporting the finding recorded in the order of the ld. CIT(A) and thereby also filed a following written submission on the issue; Ground No. 3 – Addition of ₹1,68,000 for Accrued Interest on Cash Loan – Section 69A The Assessing Officer made an addition of ₹1,68,000 under Section 69A based on a seized noting (Page 61 of Exhibit-4 of Annexure AS-1) from the assessee’smobile. The document records interest of ₹2.80 lakh on a cash loan of ₹10 lakh advanced on 04.07.2015. The AO bifurcated the interest on an accrual basis: ₹1.68 lakh was taxed in A.Y. 2016–17 (up to June 2016), and the remaining ₹1.12 lakh in A.Y. 2017–18. The assessee contended that the entire interest was taxed in A.Y. 2017–18 and that taxing it again in A.Y. 2016–17 would amount to double taxation. However, no documentary proof, computation, or return acknowledgement showing taxation of ₹2.80 lakh in A.Y. 2017–18 was furnished. Further, the assessee failed to establish that he maintained books of account on cash basis, which would justify taxation only on receipt. The CIT(A) rightly upheld the AO’s approach of taxing the interest on accrual basis, citing the absence of any accounting system to the contrary. As per judicial precedent, in the absence of books, the Revenue is empowered to compute income on accrual. Supporting Judgement • N.R. Sirket v. CIT (Gauhati HC): where no books are maintained, income may be taxed on accrual. 20.4 We have heard the rival contentions and perused the material placed on record. Record reveals that the assessee advanced Rs. 10,00,000/- on Printed from counselvise.com 81 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 04.07.2015 which was received back on 07.06.2016. Thus, interest for the period 04.07.2015 to 07.06.2016 was worked at Rs.2,20,000/- on that amount and thereby the due amount was worked out at Rs. 12,20,000/-. Against that receivable Rs.11,00,000/- was received on 07.06.2016 and Rs.1,00,000/- on 18.10.2016. These primary facts placed on record are not disputed. Thus, the interest realized is Rs. 2,00,000/-. On this aspect of the matter ld. DR argued that the assessee failed to establish that he maintains the books on receipt basis and thereby to support the contention no documentary proof was placed on record. But she did not dispute the fact that the assessee was already asked to pay tax on this interest on receipt basis and therefore, we find force in the arguments of the ld. AR of the assessee that the same income cannot be taxed twice and therefore, since the interest amount is actually received in AY 2017-18 & AO has also made addition of the interest so received in that year, again making the addition for the proportionate interest is nothing but taxing the same amount twice. The Ld. CIT(A) has though reduced the addition of Rs.2,80,000/- made in AY 2017-18 to Rs.1,12,000/- . Respectfully following the decision serviced before us of Hon’ble Gauhati High Court in case of N.R. Sirker vs. CIT that where the assessment order show that no proper accounts were kept, it would not be justified to presume that assessee kept his accounts in the Printed from counselvise.com 82 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal mercantile system. Income tax is normally paid on money received as income after deducting the allowable deductions. In the present case also the interest was received in AY 2017-18 and therefore the same can be taxed in that year. In the light of the facts and figures as discussed herein above we see no reason to sustain the addition of Rs. 1,68,000/- and thereby we direct to delete the same. In the result the ground no. 3 raised by the assessee is allowed. In the result the appeal of the assessee in ITA No. 495/JP/2025 stands allowed. 21. Going further now we take up the appeal of the assessee in ITA no. 496/JP/2025. The assessee has filed that appeal on the following grounds of appeal and dispute relates to the assessment year 2018-19; 1 The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.20 lacs (9,43,285+12,16,715-1,60,000) on account of unexplained investment/ expenses on the basis of Pg 62 of Exhibit 4 of AS-1 by ignoring that this paper is linked to Pg 6 of Annexure A-1 on the basis of which assessee has offered for tax Rs.25 lacs in the return filed u/s 153A by incorrectly holding that assessee has not been able to show that the two papers are of the same transaction. 2. The Ld. CIT(A) has erred on facts and in law in enhancing the income by Rs.3,84,000/- on account of notional interest on advance given to Sh. Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received by relying on his finding for AY 2019-20. 3. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.76,274/- u/s 69C of the Act on account of unexplained expenses by not Printed from counselvise.com 83 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries and Rs.7,06,485/-on account of undisclosed profit on unrecorded sale of Galaxy Industries. 4. The appellant craves to alter, amend and modify any ground of appeal. 5. Necessary cost be awarded to the assessee. 22. The brief facts related to the disputes are that the assessee filed its return of income on 20.10.2018 declaring total income at Rs. 60,00,300/-. Record reveals that there was search operation on 13.06.2019 in the case of “Goyal Group” Neem Ka Thana, Sikar to which the assessee belongs. Record reveals that the assessee in response to notice u/s. 153A of the Act declared the additional income of Rs. 36,00,000/- consists of loan given to Prabhu Dayal Saini amounting to Rs. 25,00,000/- and Rs. 11,00,000/- being the amount of investment in purchase of plot. 23. In the assessment proceeding ld. AO noted that on the back side of page no. 9 it was noted that Shri Mahendra Kumar Goyal gave Rs. 1,00,000/- to Shri Deewan for getting his land converted. The assessee was asked to explain the source of the payment made as the assessee could not explain the said amount was added as per provision of section 69C of the Act in the hands of the assessee. 24. Record reveals that while verifying the data in an excel filed containing two pages it was noted that the assessee made unaccounted Printed from counselvise.com 84 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal sales and payments. The year wise working of this sales was jotted down and it was found that the assessee has made unaccounted sales to the extent of Rs. 49,316/-. Ld. AO considering the Gross Profit declared by the assessee @ 48.11 the same was considered for these unaccounted sales and thereby made an addition of Rs. 23,726/-. 25. While search at the resident one mobile phone One Plus T-6 of assessee number as Exhibit-4 of Annexure AS-1 found. On that data’s page 62 it was noticed that the assessee has made unaccounted investment and payment for an amount of Rs. 21,60,000/-. On being asked the assessee submitted the reply. Ld. AO considered the reply of the assessee but found not acceptable and ultimately made an addition of Rs. 12,16,715/- as the amount noted on this page as unexplained investment u/s. 69 of the Act. He also added a sum of Rs. 9,43,285/- as unexplained expenditure u/s. 69C of the Act. 26. Feeling dissatisfied with the finding so recorded by the ld. AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised by the assessee the ld. CIT(A) has partly allowed the appeal but while doing so he enhanced the assessment. The relevant finding of the ld. CIT(A) as under : Printed from counselvise.com 85 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 4.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The brief facts of the case on the issue from the assessment order are that seized document i.e. imaging of \"One Plus T-6\" mobile phone of the assessee Exhibit-4 of Annexure-AS-1 from the residence of the assessee, out the above data, page no. 62 of the above Exhibit, it is noticed that the assessee has made unaccounted investment and payment amounting to Rs.21,60,000/- during FY 2017-18. The claim of assesee that the amounted noted in this paper is an advances is not found correct as noting made in this paper is a nature of business transactions i.e. \"2 GADI RASTA, RAJASTHAN TILES\". Ld. AO has further noted that noting of page no. 6 of Annexure-A-1 represent as advances and interest thereon. The assessee has tried to match page No. 62 of Ex-4 connected with page no. 6 of A-1 wherein the amount of Rs. 20,00,000/- and date 20.04.20217 written at bottom of this page and the same has noted in another page of 62 at top. The Id. AO concluded that the nature of noting made on these papers are different each other, therefore, the explanation given by the assessee in respect to the above is not found correct Finally, the addition has been made of Rs. 9,43,285 wirit the amount mentioned in Exhibit-4 of Annexure-AS-1. And also an addition has been made of Rs. 12,16,715 apparently w.r.t. the same page which is apparently total of Rs. 8,40,715 & Rs. 3,76,000 as mentioned on that page. Consequently, it appears, the learned AO has not made any addition in this year with respect to page no. 6 of A-1. The Id. AO in the order for AY 2019-20 has stated that Shri Prabhu Dayal Saini amounting Rs. 25,00,000/-has been offered for tax by the assessee in the return of income filed u/s 153A of the Income tax Act, 1961. Since assessee himself has included investment amount in the income, hence no further addition is required to made.\". Further as noted in the order for AY 2019-20, \"In his statement recorded on 14.06.2019 Shm Mahendra Kumar Goyal has accepted that he has given this cash loan to Shri Prabhu Dayal Saini The appellant has contended that Sh Prabhu Dayal (name as given by the appellant in his submissions) has purchased tiles for Rs. 8,40,715/- against which Rs. 1,60,000/- was received from Sh Prabhu Dayal and balance Rs.6.81,715/- Printed from counselvise.com 86 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal was due. Further Rs.3,76,000/- was paid for tiles purchased by him from Rajasthan Tiles and thus Rs.10,56,715 was due from him. Assessee appellant further paid Rs.9,43,285/- so that as on 25.04.2017 an amount of Rs. 20,00,000/- is due from him. Firstly the appellant has not been able to show that the two papers are for the same transaction. The nature of the transactions in the nature of entries of the two papers are different and even the handwriting appears to be different, for example on comparison of \"5\" on both the pages. Hence the conclusion of the learned AO in this regard is hereby upheld. It is undisputed from the side of the appellant that the advance of Rs. 9,43,285 was made by the appellant to Sh Prabhu Dayal (name as given by the appellant in his submissions) and the sources of such cash payment of the unexplained and undisclosed and hence this addition made in the assessment order is hereby upheld. With respect to the addition made of Rs. 12,16,715, the appellant has contended that Sh Prabhu Dayal has purchased tiles for Rs. 8,40,715/- against which Rs. 1,60,000/-was received from Sh Prabhu Dayal and balance Rs.6,81,715/- was due. Further Rs.3,76,000/- was paid for tiles purchased by him from Rajasthan Tiles. The appellant has inter-alia contended that the addition made without giving credit of Rs. 1,60,000 received from him amounts to double addition. The contention of the appellant in this regard is found to be acceptable as, as per the seized paper, Rs 1,60,000 was paid back by Sh. Prabhu Dayal (name as given by the appellant in his submissions) before the payment was made of Rs.3.76.000 by the appellant. At the same time it is undisputed that while the two papers as discussed in this ground of appeal are de-linked, the appellant has not been able to substantiate and explain the sources for such transactions and advances. Thus the addition of Rs. 12,16,715 u/s 69 is hereby reduced by the amount of Rs.1,60,000 and the addition is sustained to the extent of Rs. 10,56,715. Accordingly this ground of appeal is hereby partly allowed. However this is subject to the enhancement of assessment which is discussed here under Enhancement of assessment- A notice of enhancement was issued to the appellant on the date of 11.02.2025 with the remarks that. The Id. Assessing Officer has mistakenly made addition pertaining to assessment year 2018-19 into assessment order of A. Y. 2019-20. As per para 5 of Printed from counselvise.com 87 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessment order of A. Y. 2019-20, the Id AO has discussed the addition of Rs 384000/- pertaining to AY 2018-19 and addition of Rs.342000/- pertaining to A.Y 2019-20 in the assessment order passed for A Y. 2019-20. However, Id. AO has made addition of Rs 384000/- in A.Y. 2019-20 whereas no addition as per this discussion made in A Y. 2018-19 You are therefore being provided an opportunity to furnish your explanation in this regard as to why assessment should not be enhanced by an amount of Rs. 3,84,000/- The appellant has replied to the notice as under.- Vide dt 17/02/2025 With reference to hearing notice u/s 250 dt. 1 1.02 2025 wherein your goodself observed as under- \"The Ld. AO has mistakenly made addition pertaining to AY 2018-19 into assessment order of AY 2019-20. As per Para 5 of assessment order of AY 2019-20, the Ld. AO has discussed the addition of Rs.3,84,000/- pertaining to AY 2018-19 and addition of Rs. 3,42,000/- pertaining to AY 2019-20 in the assessment order passed for AY 2019-20. However, Ld. AO has made addition of Rs.3,84,000/- in AY 2019-20 whereas no addition as per this discussion made in AY2018-19.\" On this basis an opportunity is provided to fumish the explanation in this regard as to why the assessment should not be enhanced by an amount of Rs 3.84,000/- In this connection we are to submit as under- 1 There is no dispute as to the fact that the assessee has given advance of Rs 25,00,000/- to Prabhu Dayal Saini The only question is whether interest on the same is to be taxed or not as no such interest is recovered by the assessee as evident from the seized paper itself 2 The AO observed that as per page no 6 of Exhibit-1 assessee admitted that he has given cash advance of Rs. 25,00,000/- to Sh. Prabhu Dayal Saini On this amount interest of Rs. 3,84,000/- is calculated at page 62 of exhibit 4 of Annexure AS 1 which is extracted from the mobile data of the assessee it is explained by assessee that Sh Prabhu Dayal Saini has not even repaid the complete principal amount and therefore there is no chance of recovery of interest from him. It is simply a calculation. However AO after discussing the fact relating to AY 2018-19 and AY 2019-20 in the order, made addition in the AY 2019-20 but not made any addition in AY 2018-19 Printed from counselvise.com 88 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 3 From the paper it can be noted that as on 25.04.2017 an amount of Rs.20,00,000/-was due from Sh. Prabhu Dayal Saini. Thereafter further advance of Rs.5,00,000/-was given on 14.09 2017. Against the principal amount, Rs 16,00,000/- was received from him on 29.08.2018 and thus principal amount due from him is Rs 9,00,000/- On this amount interest was calculated at Rs.5.70,250/- (484000+86250) from date of advance to 29.08.2018 Thereafter, further interest of Rs.1,55,750/- was calculated from 29.08.2018 to 31.03.2019. The interest pertains to year under consideration was calculated by AO at Rs.3.84,000/- This amount could not be recovered from Sh. Prabhu dayal Saini. Thus when the principal amount is not recoverable from him, even in mercantile system of accounting, interest accrued thereon, following the principal of prudence, that no income can be said to have accrued unless there is reasonable certainty of its realisation be considered as income. Reliance in this connection is placed on the decision of Guhawati Highcourt in case of N. R. Sirkar where it was held \"No accounts maintained by assessee. No presumption can be raised that assessee followed mercantile system of accounting.\" The Affidavit of Sh. Prabhu Dayal Saini is enclosed. Thus when interest is not realizable, the addition made by the AO on accrual basis in AY 2019-20 was unjustified and he has correctly not made any addition in the year under consideration. Hence the enhancement note is issued by your goodself be dropped 4 Without prejudice to the above, it is to further submit that your goodself had confirmed addition of Rs. 3,84,000/- in AY 2019-20 and therefor the same addition cannot be again made in AY 2018-19. In case, this addition is made in AY 2018-19, the order passed in AY 2019-20 be rectified. The submissions of the appellant have been perused careful. The Id. AO has noted in the assessment order for the AY 2019-20 as under:- On perusal page 6 of exhibit-1 of annexure A seized from the residence of the assessee, it is noticed that the assessee has given cash loan to Shri Prabhu (Dayal) Saini. In his statement recorded on 14.06.2019 Shri Mahendra Kumar Goyal has accepted that he has given this cash loan to Shri Prabhu Dayal Saini as per details given below:- A.Y Principal (Rs.) Interest (Rs.) Total (Rs.) 2018-19 25,00,000 3,84,000 28,84,000 2019-20 3,42,000 3,42,000 Printed from counselvise.com 89 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Accordingly show cause notice was given why the said investment of Rs. 25,00,000/-along with interest income of Rs. 384,000/- should not be added to income. In response to show cause notice, assessee submitted as under:- ……………… The reply of the assessee has been considered and noticed that investment in advance given to Shri Prabhu Dayal Saini amounting Rs. 25,00,000/-has been offered for tax by the assessee in the return of income filed u/s 153A of the Income tax Act, 1961. Since assessee himself has included investment amount in the income, hence no further addition is required to made. Regarding contention of assessee that no recovery was made from Shri Prabhu Dayal Saini and therefore no interest income was received by assessee is not acceptable for the reason that assessee is following mercantile system of accounting and therefore interest income of Rs. 3,84,000/- is added to income as undisclosed interest income for the year under consideration The penalty proceedings u/s 270A(1) of the Income tax Act, 1961 for under reporting of income are initiated separately for the year under consideration. However no addition of interest was done in the assessment order for the AY 2018-19 and the amount which was to be added in the assessment order of AY 2018-19 of Rs. 3,84,000 was added in the assessment order for the AY 2019-20 and the amount which was pertaining to the AY 2019-20 was noted anywhere. The issue raised by the appellant on the merits in reply to the enhancement notice has been considered and the same is on the similar lines as in the case of submission made in the appeal for the AY 2019-20. The facts of the two years are pari materia. In the appeal for the AY 2019-20, the contention of the appellant have been rejected. Respectfully following the same, the contentions of the appellant on the merit are rejected hereby. Accordingly addition of Rs. 3,84,000 is hereby made to the income of the appellant and the assessment is enhanced. 5. Grounds of Appeal No. 2 and 3 are inter related hence they are clubbed together for adjudication and these grounds are as under: Ground No. 2: The Ld. AO has erred on facts and in law in making an addition of Rs. 1,00,000/- towards unexplained expenses without considering that source of such expenses is TP Dala Income of Galaxy Industries where income of Rs. 23,41,289/- is offered for tax. Printed from counselvise.com 90 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Ground No. 3: The Ld. AO has erred on facts and in law in making an addition both for undisclosed income and also for unrecorded investment/ expenditure and also not allowing setoff of income assessed in M/s Galaxy Industries where assessee is a partner resulting into double taxation. 5.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under:- The brief facts of the issue as per the assessment order are that as per the noting on the backside of page no. 9, the appellant has made payment of Rs. 1,00,000/- to Sh Deewan for getting land conversion, and the appellant did not give an explanation regarding the source of the same, hence, the same was added to the total income on account of unexplained conversion expenses u/s 69C of the IT Act, 1961. The appellant has contended in the appeal that the Id. AO made addition of Rs. 23,726/- on account of unaccounted sales. Further AO has also made an addition of Rs. 23,41,289/- on account of TP Dala income and Rs. 7,06,485/- on account of undisclosed profit on unrecorded sales in case of Galaxy industries in which assessee and his family members are partners (PB 110-133). M/s Galaxy Industries has accepted this addition. Thus these amounts aggregating to Rs. 30,71,500/- was available with the assessee for the investment. Hence set-off of this amount needs to be allowed against the addition of any unexplained investment sustained/ accepted by the assessee to avoid double taxation. The appellant has also placed reliance on number of judgements in this regard. However regarding the claim of the appellant it is seen that the claim of the appellant is limited to Rs. 23,726 with respect to the addition made in his own hands. The credit /set off of this income of the appellant is allowed from the addition made is being adjudicated in this ground of appeal. However with respect to the other claims of the appellant the appellant is claiming the set off of income of a separate legal entity. It does not matter whether the appellant is partner in such firm or not. What happened to such unaccounted money which was earned by the partnership firm is not in the knowledge of the undersigned and the appellant has also not been able to prove that such unaccounted money was actually used by the appellant When the income is unaccounted income earned by the assessee and the set off is claimed against the application, in that case generally the onus is on the Printed from counselvise.com 91 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessing authority to show that such unaccounted money out of unaccounted income was not used anywhere else and if the assessing authority is not contending otherwise in that case the set off is generally allowed to the assessee. However when the unaccounted income is earned by a different entity a separate legal person, in that case the same principles regarding the onus does not apply. In that case the onus shifts to the assessee. The assessee is required to show and prove that the unaccounted income earned by a different entity was actually used by the assessee in the application or expenses. In the present ground of appeal the appellant has not been able to show and prove so. In view of the above discussion the addition made in the assessment order is reduced by the amount of Rs. 23,726 and the appellant gets partial relief in this regard. This ground of appeal is hereby partly allowed. 27. Aggrieved with the finding so recorded in the order of the ld. CIT(A), the assessee preferred the present appeal. A common submission was filed by the ld. AR of the assessee which is reproduced herein above and therefore, not repeated here. While hearing the ld. AR of the assessee referring to page 62 of Exhibit 4 of Annexure AS 1 (Paper book page 100) assessee has made unaccounted investment and payment of Rs.21,60,000/-. Assessee vide letter dated 19.09.2021 [ page 1-5 of the paper book and point no.12 of that letter) explained that the noting on this paper is with reference to the amount given to Prabhu Dayal Saini who is neighbour of the assessee. In fact he purchased tiles for Rs.8,40,715/- against which he made payment of Rs.1,60,000/- and the balance Printed from counselvise.com 92 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Rs.6,80,715 was paid by the assessee on his behalf. The assessee further made payment of Rs.3,76,000/- and gave Rs.9,43,285/- so that as on 25.02.2017 the amount paid to him was Rs.20,00,000/-. This amount is also reflected at page 6 of Annexure A-1 (Paper book page 101) found from the residence of the assessee. Assessee further gave Rs.5,00,000/- on 14.09.2017 as noted on this paper and thus the total amount advanced to him was Rs.25,00,000/-. Out of it Rs.16,00,000/- was received back from him on 29.08.2018 and the balance amount along with interest is due to him. It is further explained that assessee has offered the advance of Rs.25,00,000/- given to Shri Prabhu Dayal Saini for tax in the return filed u/s 153A of the Act. Ignoring that explanation the ld. AO held that the noting at page 62 of Exhibit 4 is in the nature of business transaction while noting at page 6 of Annexure A-1 represent advances and interest thereon. The assessee has tried to match both the papers wherein the amount of Rs.20,00,000/- and the date 25.04.2017 (wrongly mentioned by AO as 20.04.2017) is same but since the nature of noting made on this paper are different from each other therefore explanation given by the assessee was not accepted. Therefore, ld. AO made addition of Rs.12,16,715/- (840715+376000) & Rs.9,43,285/- totalling to Rs.21,60,000/-. When the matter carried before the ld. CIT(A) he held that assessee has not been Printed from counselvise.com 93 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal able to show that paper at page 62 of Exhibit 4 of Annexure AS 1 and paper at page 6 of Annexure A1 are for the same transaction, in as much as the nature of transaction in these two papers are different and even the handwriting appears to be different. He therefore confirmed the addition on account of advance of Rs.9,43,285/- given by the assessee to Shri Prabhu Dayal Saini. He further confirmed the addition of Rs.12,16,715/- made by the AO to Rs.10,56,715/-(8,40,715+3,76,000-1,60,000) and thus the addition is confirmed to the extent of Rs.20,00,000/-. In respect of this issue before us the ld. AR of the assessee submitted that there is direct link of page 62 of Exhibit 4 extracted from the mobile of the assessee with page 6 of Annexure AS 1 found from the residence of the assessee in as much as at the bottom of page 62 of Exhibit 4 date of 25.04.2017 is noted against the amount of Rs.20,00,000/- and on the same date the same amount is noted on top of page 6 of Annexure A-1. In fact the amounts noted on these two pages relates to Shri Prabhu Dayal Saini who is known to assessee. He has purchased tiles for Rs.8,40,715/- against which Rs.1,60,000/- was received from him and balance Rs.6,81,715/- was due. Further Rs.3,76,000/- was paid for tiles purchased by him from Rajasthan Tiles and thus Rs.10,56,715 was due from him. Assessee further paid Rs.9,43,285/- so that as on 25.04.2017 an Printed from counselvise.com 94 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal amount of Rs.20,00,00/- is due from him. Thereafter further Rs.5,00,000/- was advanced to him on 14.09.2017 and thus the total amount paid to him is Rs.25,00,000/-. This amount has been offered for tax by the assessee in the return filed in response to notice u/s 153A of the Act and therefore again making addition of Rs.21,60,000/- by AO which is reduced to Rs.20,00,000/- by Ld. CIT(A) has resulted into double addition and thereby required to be deleted. As is evident from the record that the reasons given by the lower authorities to allege that both these papers have no nexus to each other, only because on one paper there is notings relating to purchase of tile, is misconceived in as much as assessee is not engaged in any business of trading in tiles but the assessee made payment against the tiles purchased by Prabhu Dayal Saini and therefore the amount so paid along with further amount paid becomes Rs.20,00,000/- as on 25.04.2017. Thus the amount advanced by assessee to Shri Prabhu Dayal Saini as on 25.04.2017 was Rs.20,00,000/-. The reasons of having the handwriting being different in as much as page 62 of Exhibit 4 extracted from the mobile phone of the assessee was sent by a different person whereas page 6 of Annexure A1 recovered from the residence of the assessee was written by a different person but the fact that Rs.20,00,000/- noted on page 62 of Exhibit 4 is carried out at page 6 of Annexure A1 with the same date Printed from counselvise.com 95 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal is not controverted by the lower authorities and nor further enquiries were conducted to rebut the explanation of the assessee. Thereafter further advance of Rs.5,00,000/- was given to him on 14.09.2017 (Page 101) and thus total amount advanced to him is Rs.25,00,000/- which has been offered for tax in the return filed u/s 153A. Hence the addition of Rs.20,00,000/- confirmed by CIT(A) which is part of the amount of Rs.25,00,000/- offered for tax in the return filed u/s 153A of the Act is duplicated addition. 28. On the other hand, ld. DR filed a detailed submission while relying on the finding of the lower authority. The submission so filed by the ld. DR reads as follows: At the outset, it is respectfully submitted that the Revenue has not preferred any appeal against the relief granted by the Ld. CIT(A) solely due to low tax effect in accordance with CBDT Circular No. 17/2019 dated 08.08.2019. However, this cannot be construed as acceptance of the findings of the Ld. CIT(A). The Department fully reserves its right to contest such findings on merits in appropriate cases and forums. Ground No. 1- Confirmation of Addition of ₹10,56,715/- under Section 69 on Account of Unexplained Investment and Expenses Detailed Rejoinder on Ground No. 1: The assessee has challenged the confirmation of addition of ₹10,56,715/-, comprising: Rs. 9,43,285/- towards unexplained expenses (e.g., land conversion charges, etc.) Printed from counselvise.com 96 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Rs. 1,60,00/- representing alleged investment in land on behalf of Shri Prabhu Dayal Saini Total addition is reduced to Rs. 1056715/- This addition is based on Page 62 of Exhibit-4 (Annexure AS-1) seized during the search. The assessee's attempt to relate this page to Page 6 of Annexure A-1 and treat it as part of the already disclosed 25 lakh (offered in earlier year) is devoid of merit, unsupported by evidence, and stands rightly rejected. Key Legal and Factual Points: 1. Independent Noting's: The seized Pages 6 and 62 belong to distinct annexures and contain independent figures and noting's. In the absence of contemporaneous records or corroboration, the assessee's claim of these being part of the same transaction lacks credibility. 2. Assessee's Admission in Prior Years Irrelevant: The 25 lakh offered in A.Y. 2015-16 (based on Page 6) does not extinguish the evidentiary value of a separate entry in A.Y. 2018-19 (based on Page 62). Each seized document must be independently explained by the assessee, which has not been done. 3. Statutory Presumption under Section 292C: Under Sections 132(4A) and 292C of the Act, documents found in possession of the assessee are presumed to belong to him and to be truthful unless rebutted. The assessee has neither produced any evidence to dislodge this presumption nor explained the entries in black and white. 4. Failure to Rebut AO's Findings: The AO had specifically recorded that Page 62 indicates a distinct business transaction unrelated to Page 6. The assessee failed to rebut this finding with any documentary evidence, relying merely on oral submissions. 5. Absence of a Documentary Trail: Had both papers formed part of the same transaction, there would have been a consolidated record, flow of funds, or a matching accounting entry. No such linkage was found in the books of accounts or produced during proceedings. Printed from counselvise.com 97 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 6. Lack of Effort to Verify: Even during appellate proceedings, the assessee neither produced Shri Prabhu Dayal Saini for cross-verification nor sought any clarification from the Department. Filing of a post-facto affidavit is self-serving and insufficient without examination and corroboration. 7. Responsibility under Section 69: The burden to explain the nature and source of investment and expenditure lies solely on the assessee. Unsupported claims or contradictory explanations cannot discharge this statutory burden. Key Judicial Precedents: Dayawanti V. CIT [(2016) 75 taxmann.com 308(Del)] Seized documents with numerical entries and initials are admissible evidence unless specifically rebutted. Chuharmal V. CIT [(1988) 172 ITR 250(SC)] Possession of document implies ownership and evidentiary responsibility under the Indian Evidence Act. Conclusion: The assessee's attempt to link two independent seized documents as a single transaction is an afterthought, unsupported by documentary evidence or accounting trail. The CIT(A) has rightly confirmed the addition of ₹10,56,715under Sections 69 based on independent material, statutory presumptions, and the assessee's failure to discharge the burden of proof. It is, therefore, humbly prayed that the Hon'ble Bench may be pleased to uphold the order of the CIT(A) confirming this addition and dismiss Ground No. 1 of the assessee's appeal. GROUND NUMBER 2 Challenge to Enhancement of Income by ₹3,84,000/- on Account of Notional Interest on Cash Advance to Shri Prabhu Dayal Saini The Ld. CIT(A) has erred on facts and in law in enhancing the income by Rs.3,84,000/- on account of notional interest on advance given to Sh. Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received by relying on his findings for AY 2019-20, This rejoinder is respectfully submitted on behalf of the Revenue in response to the assessee's challenge to Printed from counselvise.com 98 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal the enhancement of ₹3,84,000/- made by the Ld. CIT(A) in the appellate order dated 29.03.2025. I. Factual Background: 1. The assessee had given a cash loan of ₹25,00,000/- to Shri Prabhu Dayal Saini as evidenced from seized page no. 6 of Exhibit-1 of Annexure A, found during the search conducted on 13.06.2019. 2. The mobile data (page 62 of Exhibit-4 of Annexure A-1) extracted from the assessee's phone reflects the accrual of interest of ₹3,84,000/- for the relevant previous year. The same is also substantiated through calculations in the AO's order for A.Y. 2019-20. 3. The Ld. CIT(A) noted that the AO had erroneously added 23,84,000/- in A.Y. 2019-20, although the interest pertained to A.Y. 2018-19. As per para 5 of the AO's order, ₹3,84,000/- relates to A.Y. 2018-19 and 23,42,000/- to Α.Υ. 2019-20. II. Rebuttal to Assessee's Objections: 1. Incorrect Claim of Double Taxation: The assessee contends that since ₹3,84,000/- was already added in A.Y. 2019- 20, the same cannot be added again. However, the Ld. CIT(A) has merely corrected the error in the year of taxability shifting the addition to the correct A.Y. 2018-19 and not made a duplicative assessment. This is a valid rectification of assessment timing and not a case of double addition. 2. Accrual of Interest under Mercantile System: The assessee admittedly follows the mercantile system of accounting. Thus, once the loan is given and interest accrues on a time basis, taxability arises, irrespective of actual recovery. This is well settled in law. 3. No Evidence of Interest-Free Loan: The assessee failed to produce any agreement, declaration, or affidavit from Shri Prabhu Dayal Saini stating that the loan was interest-free. Instead, the seized mobile record shows explicit calculations of interest, confirming that it was not gratuitous. III. Legal Position: The Ld. CIT(A) has correctly invoked settled judicial principles in enhancing the income for A.Y. 2018-19. The following case laws are relied upon by the Revenue in support:- Printed from counselvise.com 99 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Case Law Citation Held/Relevance CIT v. Shiv Dhooti Pearls & Investment Ltd. [2015] 61 taxmann.com 314 (Delhi HC) Interest income is taxable on accrual under mercantile system even if not actually received; real income theory cannot override method of accounting N. R. Sirkar vs. CIT [1954] 26 ITR 83 (Gauhati HC) No presumption of accrual unless mercantile system is followed-but in present case, assessee does follow mercantile system, so this case is distinguishable. Godhra Electricity Co. Ltd. v.CIT (1997) 225 ITR 746 (SC) Real income theory applies only where uncertainty of receipt exists-not applicable where accounts and seized documents show interest calculations. iv. Findings of Ld. CIT(A) (Key Points Incorporated): The AO's failure to add 23,84,000/- in A.Y. 2018-19 was an inadvertent omission. The seized documents (Exhibit-4, Page 62) clearly indicate that interest was due and accrued in F.Y. 2017-18 relevant to A.Y. 2018-19. The assessee's affidavit of non-recovery is not sufficient to deny accrual under the mercantile system. The CIT(A) has clarified that penalty u/s 270A(1) has been initiated separately and enhancement pertains strictly to interest income not offered. Ground of Appeal number -3 (Assessee): Challenge to confirmation of addition of 76,274/-under Section 69C of the Income Tax Act, 1961, on the ground that the source of such unexplained expenditure was the TP Dala income and unaccounted profit on unrecorded sales of M/s Galaxy Industries. Printed from counselvise.com 100 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Preliminary Submission: At the outset, it is respectfully submitted that the Ld. CIT(A) has passed a well- reasoned and partly favourable order, granting the assessee due relief of ₹23,726/-(being the amount added in assessee's individual capacity) but rightly confirmed the balance addition of 276,274/- under Section 69C for unexplained expenditure. The Revenue supports this finding. Rebuttal to Assessee's Claim: 1. Claim of Set-Off from TP Dala Income of Galaxy Industries: The assessee has claimed that the source of the impugned unexplained expenditure (76,274/-) is covered by the TP Dala income of 223,41,289/-and unaccounted profit of ₹7,06,485/- on unrecorded sales in Galaxy Industries. However, the Ld. CIT(A) has categorically held that these incomes pertain to a separate legal entity, i.e., M/s Galaxy Industries. The assessee has failed to establish: That this income was transferred or diverted to him in his personal capacity. That the funds from Galaxy Industries were actually used to meet the said expenditure. Any accounting or financial trail connecting the unaccounted income of the partnership firm to the impugned land conversion expense. Thus, in absence of any nexus between the entity's income and the assessee's individual expenditure, the claim for set-off is speculative and unsupported. 2. Onus on the Assessee Not Discharged: The Hon'ble Supreme Court in the case of Anantharam Veerasinghaiah & Co. vs. CIT [(1980) 123 ITR 457 (SC)] held that even when intangible income is assessed, the burden lies on the assessee to prove that such income was available and was used to meet subsequent unexplained investments or expenses. The assessee has failed this test. Similarly, the principle laid down in CIT v. Tyaryamal Bal Chand [(1986) 54 CTR 0304 (Raj.)] makes it clear that only the part of unexplained cash credits or Printed from counselvise.com 101 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal expenses for which adequate source is proven can be telescoped. The rest must be independently explained. 3. Mere Availability Does Not Justify Set-Off: The assessee's argument is premised merely on theory of availability, which has been rightly rejected by the Ld. CIT(A), relying on settled law that unless there is a direct nexus, availability alone does not suffice. The assessee also did not demonstrate whether the so-called TP Dala income or undisclosed profit was accounted for, drawn, or applied towards the 1,00,000/- land conversion payment noted by the AO on the back of page 9. In fact, no explanation was provided during the assessment in response to this noting, leading to valid application of Section 69C. 4. Assessee is Not Distinct from the Partnership Firm: The claim that the assessee is a partner in Galaxy Industries does not legally entitle him to use or claim its undisclosed income as his own, unless proven. The Ld. CIT(A) rightly distinguished between income in assessee's hands (for which 23,726/- was allowed) and income in hands of Galaxy Industries (for which no linkage was proven). Conclusion: The addition of ₹76,274/- under Section 69C has been correctly confirmed by the Ld. CIT(A) on sound legal and factual footing. The assessee has failed to establish: Ownership or nexus of funds claimed to be source, Any documentary evidence tracing the impugned expenditure to his share of partnership income, That the funds were actually applied for the expenditure in question. Accordingly, the Revenue respectfully submits that no interference is warranted in the findings of the Ld. CIT(A), and the impugned ground raised by the assessee deserves to be rejected. V. Prayer: Printed from counselvise.com 102 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal In view of the above facts, legal position, and findings of the Ld. CIT(A), is fully justified and based on seized evidence and correct application of accounting principles. The plea of the assessee lacks merit and deserves to be rejected. It is humbly prayed that the Hon'ble Bench may be pleased to uphold the order by the Ld. CIT(A) and dismiss the ground of appeal filed by the assessee. Respectfully Submitted on Behalf of the Revenue. 29. We have heard the rival contentions and perused the material placed on record. As regards the ground no. 1 thereby the assessee challenging the addition of Rs. 20 lac sustained by the ld. CIT(A) even though the assessee disclosed a sum of Rs. 25 Lacs while filling the return of income u/s. 153A of the Act. Record reveals that the addition made in the assessment order was based on the page 62 of Exhibit 4 extracted from the mobile read with page 6 of Annexure A -1. The contention of the revenue is that the both the transaction is separate and assessee was not been able to prove the contention and both are independent noting. The assessee not provided any trail to the contention so raised. Before us on the issue it has been argued that there is direct link of page 62 of Exhibit 4 extracted from the mobile of the assessee with page 6 of Annexure AS 1 found from the residence of the assessee in as much as Printed from counselvise.com 103 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal at the bottom of page 62 of Exhibit 4 date of 25.04.2017 is noted against the amount of Rs.20,00,000/- and on the same date the same amount is noted on top of page 6 of Annexure A-1. In fact the amounts noted on these two pages relates to Shri Prabhu Dayal Saini who is known to assessee. He has purchased tiles for Rs.8,40,715/- against which Rs.1,60,000/- was received from him and balance Rs.6,81,715/- was due. Further Rs.3,76,000/- was paid for tiles purchased by him from Rajasthan Tiles and thus Rs.10,56,715 was due from him. Assessee further paid Rs.9,43,285/- so that as on 25.04.2017 an amount of Rs.20,00,00/- is due from him. Thereafter further Rs.5,00,000/- was advanced to him on 14.09.2017 and thus the total amount paid to him is Rs.25,00,000/-. The assessee has offered for tax that amount of Rs. 25,00,000/- in response to notice u/s 153A of the Act. Making addition of those transaction again results into double addition. Though ld. CIT(A) understand that aspect has reduced it to Rs.20,00,000/-. The ld. AR of the assessee submitted that both the page read together suggest the payment of Rs. 20,00,000 matches paper book pae 100 and 101. In support while explaining the transaction the assessee filed an affidavit dated 18.11.2024 of Shri Prabhu Dayal Saini. The content of Printed from counselvise.com 104 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal the affidavit has not been rebutted by the revenue and therefore, looking to the evidence placed on record we are of the considered view that the transaction relates to Shri Prabhu Dayal Saini. The reasons given by the lower authorities to allege that both these papers have no nexus to each other, only because on one paper there is notings relating to purchase of tile, is misconceived in as much as assessee is not engaged in any business of trading in tiles but the assessee made payment against the tiles purchased by Prabhu Dayal Saini and therefore the amount so paid along with further amount paid becomes Rs.20,00,000/- as on 25.04.2017. Thus the amount advanced by assessee to Shri Prabhu Dayal Saini as on 25.04.2017 was Rs.20,00,000/-. The reasons of having the handwriting being different in as much as page 62 of Exhibit 4 extracted from the mobile phone of the assessee was sent by a different person whereas page 6 of Annexure A1 recovered from the residence of the assessee was written by a different person but the fact that Rs.20,00,000/- noted on page 62 of Exhibit 4 is carried out at page 6 of Annexure A1 with the same date is not controverted by the lower authorities and nor further enquiries were conducted to rebut the explanation of the assessee and that of the affidavit so filed having the third person confirmation on the contention raised by the assessee. The fact that further advance of Rs.5,00,000/- was given to him Printed from counselvise.com 105 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal on 14.09.2017 (Page 101) and thus total amount advanced to him is Rs.25,00,000/- which has been offered for tax in the return filed u/s 153A and is also supported by an affidavit filed of Shri Prabhu Dayal. Revenue did not raise single question to Shri Prabhu Dayal so as to controvert the version stated by the assessee and that affidavit of Shri Prabhu Dayal. Therefore, we see no reason to sustain the addition of Rs. 20,00,000/- confirmed by CIT(A) as the assessee already offered Rs.25,00,000/- and therefore, no separate addition is required. Based on this observation ground no. 1 raised by the assessee is allowed. 30. Vide ground no. 2 the assessee challenges the finding of the lower authority while sustaining the addition of Rs. 3,84,000/- being the amount of interest on advances given to Shri Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received by the assessee. Since, we have while dealing with the ground no. 1 noted the fact arising on account of the dispute the same are not repeated. As is evident from the finding in Ground no. 1 that we have while dealing with the ground no. 1 accepted the fact that the content of the affidavit filed by Shri Prabhu Dayal has not been disputed by the ld. AO through ld. DR wherein Shri Prabhu Dayal categorically confirmed that he has not given the interest to the assessee on the money that has been taken by him from the Printed from counselvise.com 106 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessee [ page 159 of the paper book filed]. Thus, respectfully following the decision of the Apex Court in the case of Mehta Parikh & Co. Vs. CIT [ 30 ITR 181 (SC) ] wherein the Apex Court held that the affidavits and the entries as made in the account books not having been controverted, [ here in the case entries confirmed in the affidavit ] the department could not challenge its nature the other content mentioned in that affidavit of having not been paid the interest to the assessee cannot be disputed. In the light of this fact declared by Shri Prabhu Dayal in an affidavit and the content of that affidavit was not disputed by revenue we see no reason to sustain the addition of Rs. 3,84,000/-. Hence, we direct the ld. AO to delete that addition of Rs. 3,84,000/- and thereby ground no. 2 raised by the assessee is allowed. 31. Vide Ground no. 3 the assessee challenges the addition of Rs.76,274/- u/s 69C of the Act on account of unexplained expenses by not accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries and Rs.7,06,485/- on account of undisclosed profit on unrecorded sale of Galaxy Industries. 31.1 The brief facts related to the dispute are that ld. AO at para 6, page 3 of the order observed that on the back side of page 9 it is written that Printed from counselvise.com 107 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal assessee has to give Rs.1,00,000 to Shri Deewan for getting the land converted during financial year 2017-18. The assessee has not given any specific submission on this paper and therefore it was held that assessee made payment of Rs.1,00,000/- for getting the land converted for which addition was made u/s 69C of the Act. When the matter carried before the ld. CIT(A) it was submitted by the assessee that AO made addition of Rs.23,726/- on account of unaccounted sales. Further AO has also made an addition of Rs.23,41,289/- on account of TP Dala income and Rs.7,06,485/- on account of undisclosed profit on unrecorded sales in case of Galaxy industries in which assessee and his family members are partners (page 102-125 of the paper book). M/s Galaxy Industries has accepted this addition. Thus, these amounts aggregating to Rs.30,71,500/- was available with the assessee for which the set off was claimed against this addition. While dealing with this contention ld. CIT(A) at para 5.2 page 13 & 14 allowed the set-off of the income of Rs.23,726/- assessed by AO on account of unaccounted sales but did not allow the set-off of income assessed in case of Galaxy Industries by holding that it does not matter whether the appellant is partner in this firm unless the assessee proves that such unaccounted money was used for making the investment. Accordingly, the addition was confirmed to the extent of Rs.76,274/-. Printed from counselvise.com 108 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 31.2 Before us it was submitted that M/s Galaxy Industries is a family concern in which assessee and his wife is having 35% share and the family of his other two brothers have 65% share. It is not in dispute that undisclosed income of Rs.30,47,774/- (7,06,485+23,41,289) assessed in the hands of the firm has been accepted. Thus, the share of the assessee and his wife in this is Rs.10,66,721/-. It is not the case of the department that such income has been utilized elsewhere. Further the AO has also made addition of Rs.3,23,334/- (2,83,114+40,220) on account of profit on unrecorded sales in AY 2017-18 which is accepted by the assessee. Hence set-off of such income be allowed to the assessee against the addition of Rs.76,274/- confirmed by the CIT(A). 31.3 On the other hand, ld. DR relied upon the orders of the lower authorities and also filed the written submission which we have extracted herein above while dealing with the ground no. 1 wherein the ld. DR contended that the ownership or nexus of funds were not established and even there is no evidence that the said fund were used by the assessee. 31.4 We have heard the rival contentions and perused the material placed on record. As is evident from the assessment order that the ld. AO at para 6 of the order noted that page 9 back side record the fact that the assessee has given Rs. 1,00,000/- to Shri Deewan for the getting the land converted Printed from counselvise.com 109 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal during the financial year 17-18. Since the assessee has not given any submission the same was considered as unexplained expenditure u/s. 69C of the Act. When the matter carried before the ld. CIT(A) he has considered the submission of the assessee that the ld. AO has made an addition of Rs. 23,726/- on account of unaccounted sales transaction and therefore, the set of that income was given and accordingly balance amount of Rs.76,274/- was confirmed by the CIT(A). For the sustained addition it was argued that M/s Galaxy Industries is a family concern in which assessee and his wife is having 35% share and the family of his other two brothers have 65% share. It is not in dispute that undisclosed income of Rs.30,47,774/- (7,06,485+23,41,289) assessed in the hands of the firm has been accepted and therefore, the share of the assessee and his wife in this is Rs.10,66,721/-. It is not the case of the department that such income has been utilized elsewhere. Further the AO has also made addition of Rs.3,23,334/- (2,83,114+40,220) on account of profit on unrecorded sales in AY 2017-18 which is accepted by the assessee. Hence set-off of such income be allowed to the assessee against the addition of Rs.76,274/- confirmed by ld. CIT(A). Since, there is no finding that that income so taxed was not available with the assessee and thereby we consider the Printed from counselvise.com 110 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal alternative plea of the assessee and direct the ld. AO delete the addition of Rs. 76,274/- and thereby ground no. 3 raised by the assessee is allowed. In the result the appeal of the assessee in ITA No. 496/JP/2025 stands allowed. 32. Now take up the appeal of the assessee in ITA No. 497/JP/2025 for assessment year 2019-20 wherein the assessee has raised the following grounds of appeal: 1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.3,84,000/- on account of notional interest on advance given to Sh. Prabhu Dayal Saini by not accepting the contention of assessee that no interest income is received and by holding that affidavit of Sh. Prabhu Dayal Saini is incorrect & unreliable. 2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.31,000/- u/s 69C of the Act on account of unexplained expenses by not accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs.23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of income of Rs. 2,83,119/- assessed and accepted by the assessee in AY 2017-18 against the addition of unexplained expenses. 3. The appellant craves to alter, amend and modify and ground of appeal. 4. Necessary cost be awarded to the assessee. 33. The bench noted that the facts of the case in ITA no. 497/JP/2025 raised by the assessee vide ground no. 1 & 2 are similar on facts except the difference in the amount of dispute with that of the assessee’s grounds of appeal no. 2 & 3 in ITA No. 496/JP/2025. Therefore, it is not imperative to repeat the facts, arguments and finding and therefore, decision taken by Printed from counselvise.com 111 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal us while dealing with the ground no. 2 & 3 of the assessee in ITA no. 496/JP/2025 shall apply mutatis mutandis in the case of Sh. Mahendra Kumar Goyal in ITA no. 497/JP/2025 and thereby the appeal filed by the assessee in ITA no. 497/JP/2025 stands allowed. 34. Vide ITA no. 498/JP/2025 the assessee has challenged the finding of the ld. CIT(A) on the following grounds of appeal before us; 1. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs. 10,69,135/- u/s 69 of the Act on account of unexplained investment in purchase of jewellery on the basis of Pg 51-53 of Exhibit 4 of Annexure AS-1 by not accepting the contention of assessee that the source of purchase of such jewellery is out of TP Dala income of Rs. 23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of such investment out of Rs. 16 lacs received by assessee from Sh. Prabhu Dayal Saini by way of realisation of advance on 29.08.2018 out of Rs. 25 lacs given to him and offered for tax only for the reason that this contention is beyond the ground of appeal. He has further erred in not allowing the set off of income of Rs.2,83,119/- assessed and accepted by the assessee in AY 2017-18 and Rs.80,822/-assessed and accepted by the assessee in AY under consideration against the addition of unexplained investment in jewellery. 2. The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.3,04,890/- u/s 69 of the Act on account of unexplained investment in construction on the basis of Pg 49 of Exhibit 4 of Annexure AS-1 by not accepting the contention of assessee that the source of such expenditure is out of TP Dala income of Rs. 23,41,289/- of Galaxy Industries offered for tax in AY 2018-19. He has further erred in not allowing the set off of such investment out of Rs. 16 lacs received by assessee from Sh. Prabhu Dayal Saini by way of realisation of advance on 29.08.2018 out of Rs.25 lacs given to him and offered for tax only for the reason that this contention is beyond the ground of appeal. He has further erred in not allowing the set off of income of Rs.2,83,119/-assessed and accepted by the assessee in AY 2017-18 and Rs.80,822/- assessed and accepted by the assessee in AY under consideration against the addition of unexplained investment in construction. Printed from counselvise.com 112 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee. 35. As is evident from the ground no. 1 & 2 raised by the assessee the bench noted that the issue raised by the assessee vide above ground no. 1 & 2 has already been decided by the bench while dealing with the ground no. 3 in ITA no. 496/JP/2025. Therefore, the bench feels that it is not imperative to repeat the facts, contentions, arguments and the submission of each party and there by the decision taken by us while dealing in Ground no. 3 in ITA no. 496/JP/2025 shall apply mutatis mutandis in the case of Shri Mahendra Kumar Goyal in ITA 498/JP/2025 and thereby the appeal filed by the assessee in ITA no. 498/JP/2025 stands allowed. In the result of the appeal of the assessee are disposed off as under S. no. Appeal Number Assessment Year Results 1 493/JP/2025 2014-15 Allowed 2 495/JP/2025 2016-17 Allowed 3 496/JP/2025 2018-19 Allowed 4 497/JP/2025 2019-20 Allowed 5 498/JP/2025 2020-21 Allowed 6 500/JP/2025 2015-16 Allowed Order pronounced in the open court on 15/09/2025. Printed from counselvise.com 113 ITA Nos. 493. 495 to 498/JP/2025 Sh. Mahendra Kumar Goyal Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 15/09/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Mahendra Kumar Goyal, Sikar 2. izR;FkhZ@ The Respondent- ACIT/DCIT, Central Circle-03, Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA Nos. 493, 495 to 498/JP/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "
Other Referred Cases
N.R. Sirker vs. CIT, Abhisar Buildwell Pvt. Ltd. vs. PCIT, U. K. Paints vs. CIT, S.S. Gadgil vs. CIT, CIT vs. Laxmi Dal Mills, CIT vs. Chuharmal, CIT vs. P.V. Kalyanasundaram, Shashi Garg vs. CIT, CIT vs. Ajay Gupta, Dayawanti vs. CIT, CIT vs. Shiv Dhooti Pearls & Investment Ltd., CIT vs. N.R. Sirker
Laws Referred To
Income Tax Act, 1961
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360 Brand Audit (30 mins)
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Sales Forecasting Sheet
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Assignment of Registered Trademark
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