SURESH KUMAR BANTHIA,KOLKATA V. ACIT, CC 4.3, KOLKATA

CO 75/KOL/2025

AI Insights

This case involves an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals), which annulled the assessment of Suresh Kumar Banthia for the assessment year 2016-17. The original assessment was reopened under section 148 based on materials seized during a search operation on finance brokers, which allegedly linked Banthia to unaccounted cash loan transactions. However, the CIT(A) found the reopening invalid, stating that the proper procedure under section 153C should have been followed, as the incriminating documents were seized from third parties and not directly from Banthia. The Tribunal's decision supported the CIT(A)'s findings, leading to the dismissal of the Revenue's appeal and the acceptance of Banthia's cross objection.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 829774 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: misc
• Appeal Filed On: 23-10-2025
• Other Referred Cases: PCIT vs. Naveen Kr. Gupta, Shyam Sunder Khandelwal vs ACIT, Sejal Jewellary vs UOI, Jagjeet Singh vs DCIT, D G Land Developers (P.) Ltd. vs ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA; UPHOLDING
• Assessee Lawyers: S M SURANA
• Keywords: Set aside; Opportunity of being heard; Revised return; Reassessment proceedings; Question of law; Income from undisclosed sources; Document seized; Documents seized; Retraction; Search and seizure; Competent authority; Right to appeal
• Section: 148; 143(3); 132; 153A; 68; 131; 133A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.1894/KOL/2025 (Assessment Year: 2016-17) DCIT, CC 4(3), Kolkata Aaykar Bhawan Poorva, 110 Shantipally, Kolkata-700107, West Bengal Vs. Suresh Kumar Banthia 147 Banthia House Mahatma Gandhi Road, Burra Bazar Calcutta, Kolkata-700007, West Bengal (Appellant) (Respondent) PAN No. AEVPB2317L CO No. 75/KOL/2025 (Arising in ITA no. 1894/KOL/2025 for A.Y. 2016-17) Suresh Kumar Banthia 147 Banthia House Mahatma Gandhi Road, Burra Bazar Calcutta, Kolkata-700007, West Bengal Vs. DCIT, CC 4(3), Kolkata Aaykar Bhawan Poorva, 110 Shantipally, Kolkata-700107, West Bengal (Appellant) (Respondent) Assessee by : Shri SM Surana, AR Revenue by : Shri Sanat Kumar Raha, DR Date of hearing: 04.12.2025 Date of pronouncement: 13.01.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue and Cross Objection filed by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-27 (hereinafter referred to as the “Ld. CIT(A)”] dated 31.03.2025 for the AY 2016-17. Printed from counselvise.com Page | 2 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 2. At the outset, we observe from the appeal folder that there is a delay of 20 days in filing the appeal by the department in support of which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approvals from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 3. The issue raised by the Revenue in ground no.1 is against the order of ld. CIT (A) annulling the assessment framed u/s 147 of the Income-tax Act, 1961 (the Act) by the ld. AO on the ground of being invalid and void ab initio without considering the facts on record. 3.1. The facts in brief are that the assessment in this case was originally completed on 31.12.2018 u/s 143(3)/153A. There was search in the case of some finance brokers Kasera and Sanwaria on 30.11.2018. During the course of said search, some documents/papers were found and seized. Their statements were also recorded with regard to their modus operandi of arranging cash loans. However, none of the brokers in their statement named the assessee as loan provider or loan taker nor in any of the seized papers the name of the assessee .i.e. Suresh Kumar Banthia was found/appeared. Thereafter there was a survey conducted u/s 133A on 19.2.2020 on the assessee and his group concern namely Citizen Umbrella Mfg Co Ltd. In the course of survey, some papers with identification mark SKB/1 and 2 were found from the assessee and CUML/1 and 2 from Citizen Umbrella were impounded. Statement of the assessee was recorded u/s 133A on 20.2.2020 wherein the Printed from counselvise.com Page | 3 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 assessee admitted having given initial loan of Rs. 1.60 crores as noted by the AO vide para 5.4.8 (Page 48 of assessment order) in FY 2016-17 which was rotated periodically. The Ld. ADIT recorded that initial loan of Rs. 3.00 crores was given in December 2017 or July 2018 through finance brokers as noted by the AO vide Q 22 of page 49 of Assessment order. In the statement recorded on 20.2.2020, the assessee also admitted to make disclosure of Rs. 50.00 crores however, the assessee retracted the said statement by filing affidavit before the ADIT on 24.2.2020 i.e. within 3 days which is available in page 66-78 of Paper book. The Ld. AIDT thereafter did not record any further statement. 3.2. The assessment was reopened u/s 148 on 26.3.2021 for which reasons were recorded available from page 201-204 of the paper book. The reasons stated that there was search operation on finance brokers Sanwaria and Kasera group on 30.11.208 and that incriminating documents pertaining to Citizen group were seized and further that Suresh Kumar Bathia alias Jain was the main person of Citizen group abbreviated as SK Jan/Citizen. Further that there was survey in the hands of the assessee. The AO further also noted that the assessee declared low profit against turnover and there were high cash loan transactions. The AO observed that assessee Suresh Kumar Banthia was involved in unaccounted cash loan transactions. The AO further bifurcated year wise cash loan transactions and for the assessment year in question calculated such eash loan transactions at Rs. 36.65 crores. The AO relied on the statement of one Praveen Kumar Kasea and further observed that Suresh Kumar Banthia accepted in his statement dated 20.2.2020 that he used to lend cash through Praveen Kasera. The Ld AO therefore recorded that assessee generated unaccounted income of Rs.36.65 crores Printed from counselvise.com Page | 4 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 which has escaped assessment. The AO finally made an addition of ₹36.65 crores as cash loans u/s 69A of the Act as unexplained money and also added towards interest earned of ₹1,64,92,500/- in the assessment framed u/s 147 of the Act dated 21.03.2022. 3.3. The ld. CIT (A) in the appellate proceedings, allowed the appeal of the assessee by quashing the assessment framed u/s 147 of the Act on the ground of being invalid and void ab initio for the reason that the proceedings u/s 147 read with section 148 of the Act was invalidly initiated whereas the correct proceedings would have been u/s 153C of the Act because the source of information on the basis of which the reassessment proceedings were initiated emanated during the course of search on the third party M/s Uma Shankar Kasera, Anil Kumar Kasera and Jai Bhagwan Sanweria on 30.11.2018. While allowing the appeal of the assessee on legal issue the learned CIT(A) has taken into account the reply / submissions of the assessee and remand report called for during the appellate proceedings including the reply filed by the assessee. The relevant finding of the ld. CIT (A), are as under:- “5.2. Discussion and decision: 5.2.1. I have gone through the assessment order as well as the submission of the assesses On perusal of the same, it is observed that a search operation u/s 132 of the Act was conducted in the case of three brokers namely Shri. Uma Shankar Kasera, Anil Kumar Kasera, Jai Bhagwan Sanweria on 30.11.2018. Subsequently, a survey operation u/s 133A was carried out on 19.02.2020 by Directorate of Income Tax, Investigation, Kolkata at various premises of M/s Citizen Umbrella Manufacturers Ltd. in which the assessee was a key person. Thereafter, the Investigation Directorate communicated the papers seized at the time of search in the case of Sanwaria and Kasera and statement of Shri Praveen Kumar Kasera recorded U/s 132(4) on 02/12/2018 along with the survey materials to the AO. It is observed that, on the basis of statement of the aforesaid brokers and the document seized in the said search operation and also relying upon the statement of the assessee and the documents Impounded during the course of survey on the assessee, the AO reopened the assessment u/s 147 after recording the reasons. In the said reasons, the AO had illustrated the fact that during the year under consideration, the assessee had given Printed from counselvise.com Page | 5 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 cash loans to various partiesthrough several brokers namely Shri. Uma Shankar Kasera Anil Kumar Kasera. Ja Bhagwan Sanweria of Rs 38.65.00.000. Hence, the AO had added the total cash loans of Rs.36,65,00,000/- in the hands of the assessee as unexplained money u/s 69A of the Act. 5.2.2. However, the initiation of the proceedings u/s 147 of the Act in the present case of the assessee by the AO for the AY 2016-17 is not tenable as per the provisions of the Act. It is observed that the proceedings u/s 147 of the Act was initiated in the present case was only based on material seized during the search operation in the cases of the aforesaid brokers viz. Sanweria and Kasera. In the asst, order, the AO had pressed upon that the essence of the seized materials with identification mark USK-1 to USK-3 and interpreted the names of the borrowers of the cash loans given by the assessee seized document wise, like for USK-1, borrower name is Sanjay Surekha, loan amount is Rs 50.00.000/-, for USK-2, borrower name is Ujjal, Loan amount is Rs 50,00,000/- and so on etc. However, the AO had not corroborated the findings in these said seized documents with any of the books of the assessee. It is admitted that the assessee had confessed his practice of giving cash loans from his unaccounted cash. However, the said statement was retracted by the assessee on 24.02.2020 before the ADIT, Inv-2(4), Kolkata, ie, the conducting officer within three days of the said survey conducted on 19.02.2020. It also appears from the assessment order that the AO had relied on the statement made by the assessee on 19.02.2020 wherein he admitted income of Rs. 50 crores which statement was made during survey operations. Apart from that the AO has also relied on the statement made by Praveen Kasera and Jai Bhagwan Sanwaria recorded u/s 132(4) of the Act in search operation conducted in the case of the brokers i.e., Sanweria and Kasera. Based on the seized material of the said search action of the brokers, the AO also concluded that the assessee generated Rs. 36.65 crores during the year as unaccounted income which was utilized for cash loan and further the assessee also eamed interest income on the said cash loan. RT 5.2.3. It is also observed that the AO had relied on the documents found and seized in the case of search of Sanwaria and Kasera and their statement recorded in the course of search in their hands, The AO relied on the seized material of the said search in the case of the brokers Sanwaria and Kasera ie., the alleged 'Rukkhas' in the present case of the assessee In this regard, the assessee in his submission had raised a legal concern that if the whole assessment was conducted by the AO only relying upon the said seized material in the said search action on the aforesaid brokers, the AO should adhere the provision of section 153C of the Act which was prescribed in the Act separately for seized documents found of any person in a third-party search action. Hence, there is a rudimentary flaw in the action of the AO to initiate section 147 in the present case of the assessee instead of invoking section 153C of the Act on account of dealing with seized material in a third-party search. The AO is given an opportunity to give a remand report on the issues raised by the assessee with regard to the reopening u/s 147 of the Act instead of section 153C of the Act. 5.2.2. However, the initiation of the proceedings u/s 147 of the Act in the present case of the assessee by the AO for the AY 2016-17 is not tenable as per the provisions of the Act. It is observed that the proceedings u/s 147 of the Act was initiated in the present case was only based on material seized during the search operation in the cases of the aforesaid brokers viz., Sanweria and Kasera. In the asst, order, the AO had pressed upon that the essence of the seized materials with identification mark Printed from counselvise.com Page | 6 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 USK-1 to USK-3 and interpreted the names of the borrowers of the cash loans given by the assessee seized document wise, like for USK-1. borrower name is Sanjay Surekha, loan amount is Rs.50,00,000/-, for USK-2, borrower name is Ujjal, Loan amount is Rs.50,00,000/- and so on etc. However, the AO had not corroborated the findings in these said seized documents with any of the books of the assessee. It is admitted that the assessee had confessed his practice of giving cash loans from his unaccounted cash. However, the said statement was retracted by the assessee on 24.02.2020 before the ADIT, Inv-2(4), Kolkata, l.e., the conducting officer within three days of the said survey conducted on 19.02.2020. It also appears from the assessment order that the AO had relied on the statement made by the assessee on 19.02.2020 wherein he admitted income of Rs. 50 crores which statement was made during survey operations. Apart from that the AO has also relied on the statement made by Praveen Kasera and Jai Bhagwan Sanwaria recorded u/s 132(4) of the Act in search operation conducted in the case of the brokers l.e., Sanweria and Kasera. Based on the seized material of the said search action of the brokers, the AO also concluded that the assessee generated Rs. 36.65 crores during the year as unaccounted income which was utilized for cash loan and further the assessee also earned interest income on the said cash loan, HE TAX DEPARTME 5.2.3. It is also observed that the AO had relied on the documents found and seized in the case of search of Sanwaria and Kasera and their statement recorded in the course of search in their hands. The AO relied on the seized material of the said search in the case of the brokers Sanwaria and Kasera i.e., the alleged 'Rukkhas' in the present case of the assessee. In this regard, the assessee in his submission had raised a legal concern that if the whole assessment was conducted by the AO only relying upon the said seized material in the said search action on the aforesaid brokers, the AO should adhere the provision of section 153C of the Act which was prescribed in the Act separately for seized documents found of any person in a third-party search action. Hence, there is a rudimentary flaw in the action of the AO to initiate section 147 in the present case of the assessee instead of invoking section 153C of the Act on account of dealing with seized material in a third-party search. The AO is given an opportunity to give a remand report on the issues raised by the assessee with regard to the reopening u/s 147 of the Act instead of section 153C of the Act. 5.2.4. The AO has submitted his remand report on 27.02 2025. In the remand report, the AO had referred to the seized documents evidencing certain cash loans found and seized from the said brokers viz. Umashankar Kasera and Jai Bhagwan Sanwaria which were claimed by the AO as pertaining to the assessee. Further, the AO had also referred to the forensic analysis of the seized documents and the report and calculation made by the investigating officer to justify the addition u/s 147 of the Act. However, the AO had also not denied the fact that there was no date in the said seized papers but such dispute has been raised for the first time and the assessee failed to state the reasons as to why the said dispute was not raised at the time of assessment proceedings. The AO had also referred to the judgment of the Hon'ble Supreme Court on the ground that it is not the choice of the assessee to exercise due diligence to file legal remedy forgetting the merits. Further, the AO had also referred to the judgment of Hon'ble Supreme Court on the ground that no satisfaction of the AO of the searched person was received and therefore the question of assuming jurisdiction uls 1530 does not arise. Further, the AO had also referred to the judgment of the Hon'ble Delhi High Court in the case of 'PCIT vs. Naveen Kr. Gupta [2024] 168 taxmann.com 574 (Delhi), Printed from counselvise.com Page | 7 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 for the proposition that where jurisdictional conditions to initiate proceedings u/s 153C were not satisfied, the same cannot exclude the applicability of sec 147 of the Act. The copy of the remand report supplied to the assessee to offer comments on the AO's observations. The assessee filed his reply on 20.03.2025 distinguishing the AO's proposition to invoke provisions u/s 147 instead of 153C of the Act. The assessee quoted the same Delhi High Court's judgement and stated that it is not applicable in his case. The relevant portion is as under: \"Moreover, in the said case of Principal Commissioner of Income Tax vs. Naveen Kumar Gupta [2024] 168 taxmann.com 574 (Delhi), the assessing officer also received information from investigation wing that the assessee had purchased penny scrips. Based on the information and material available, Assessing Officer issued a notice under section 148, for reassessment of income after prior approval from the competent authority. The reassessment order was passed wherein additions were made under section 68 with respect to ledger submitted by the assessee indicating receipt of entries from shell companies operated by 'J' and 'N': amount which was disclosed to be the commission paid for the alleged entries; and, an amount paid to the assessee for investment in penny stock. Just because parallel proceedings cannot be conducted for the same year under consideration ie., one under section 147 and one under 153C, the Hon'ble High Court ruled in the favour of the revenue stating hereunder In the present case, the reassessment proceedings are initiated under section 147 not only on the basis of the material containing information that was found during the search conducted in respect of Jain Brothers, but is also founded on the basis of other information as obtained by the Investigation Wing, namely, that the assessee had purchased units of a penny scrip. This being the case, the decision of the Assessing Officer to reassess the income of the assessee under section 147 cannot be faulted [Para 66) In the case of the assessee, the Ld. AO was not in possession of any information based on which proceeding u/s 147 could have been initiated. The only basis of initiation of proceedings as per the AO was some papers seized from the finance brokers. There was noother material to justify action u/s 147. Hence the reopening u/s 147 was bad in law\" 5.2.5. The assessee further relied upon on the recent decision of the Hon'ble Rajasthan High Court delivered in the case of 'Shyam Sunder Khandelwal vs ACIT Income-tax, reported in [2024] 161 taxmann.com 255 (Rajasthan)', where facts to the case is that reassessment proceedings under section 147 of the Act was initiated on the assessee. The reasons supplied for initiation of proceedings under section 147/148 was based on the incriminating material and documents including Pen Drives seized during the search carried out of the Manihar Group and the statements recorded during proceedings. From the information received the AO noticed that the loan advanced and interest earned thereon were unaccounted. In other words, the basis for initiation of section 147 proceedings is the material seized relating to or belonging to the assessee, during the search conducted of Manihar Group. It is also noticed that being aggrieved with the reassessment notices issued under section 148 of the Act by the AO the assessee filed Writ Petition before the Hon'ble Rajasthan High court challenging the Printed from counselvise.com Page | 8 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 notice issued under section 148 of the Act. contending that the basis of issuance of notice under section 148 of the Act is the material seized during the search conducted on Manihar Group, as such, the proceedings should have been initiated under section 153C of the Act. 5.2.6. In the said case, the Hon'ble High Court quashed the notice issued under section 148 of the Act on the ground that basis for initiation of reassessment proceedings under section 148 of the Act in case of the assessee was material seized relating to or belonging to assessee during search conducted on Manihar Group. It was held by the Hon'ble Court that the provisions of sections 153A to 153D of the Act have prevalence over the regular provisions for assessment under section 143 and reassessment under sections 147/148. It was further held by the Hon'ble Court that once there is încriminating material seized or requisitioned belonging or relatable to person other than on whom search was conducted, section 153C of the Act is to be resorted to, relevant portion of the decision in verbatim is reproduced as under: \"32. The argument that section 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise section 148 is to be resorted to, is misplaced. On satisfaction of the twin condition for proceedings under section 153C, the AO has to proceed in accordance with section 153A. Notice is to be issued for filing of the returns for relevant preceding years and thereupon proceed to assess or reassess the \"total income\". It is not obligatory on the AO to make assessment for all the years, the earlier orders passed may be accepted. But once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted, section 153C is to be resorted to. 5.2.7. Attention in this regard is further drawn to the another decision of the Hon'ble Rajasthan High Court delivered in the case of \"Tirupati Construction Company vs ITO, reported in [2024] 165 taxmann.com 176 (Rajasthan HC), wherein it has been held that since entire basis for reopening assessment was material and information collected during search conducted in the premises of another assessee, only legally permissible course of action was one provided under section 153C of the Act and not under section 148 of the Act. The same ratio of law was laid down in the following judicial pronouncements: i. Sejal Jewellary vs UOI, reported in [2025] 171 taxmann.com 846 (Bombay HC), ii. PCIT vs VSL Mining Company (P.) Ltd, reported in [2024] 167 taxmann.com 373 (Karnataka): iii. Smt. Neelam Dubey vs UOI, reported in [2024] 162 taxmann.com 545 (Allahabad HC) iv. Kalyanika Infra Mega Ventures (P.) Ltd. Vs DCIT, reported in [2023] 157 taxmann.com 34 (Jabalpur - Trib.) (Third Member) v. Jagjeet Singh vs DCIT, reported in [2024] 164 taxmann.com 324 (Amritsar - Trib.) Printed from counselvise.com Page | 9 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 vi. D G Land Developers (P.) Ltd. Vs ACIT, reported in [2024] 166 taxmann.com 620 (Mumbai - Trib.); 5.2.8. It is pertinent to mention that the AO had relied only on the incriminating evidences found and seized from Uma shanker Kasera and Jai Bhagwan Sanwaria. If the said papers were stated to be pertaining to the assessee, the provision of sec 153C alone can be invoked in such cases because the said section specifically empowers the AO for invoking section 153C in such cases. The AO had also referred to the forensic analysis report and calculation made by the investigating officer. However, the same report was prepared on the said seized material only. 5.2.9. Further, the AO had contended that the reopening was not only based on the seized documents in the search action of the brokers, but also relying on the papers impounded from assessee and Citizen Group during the course of survey u/s 133A of the Act dated 19.02.2020. It is imperative to mention that from the assessment order of AY 2016-17, none of the impounded papers and documents of survey utilized in the present assessment year to make any addition. The additions made by the AD to the extent of Rs.36.65 cores based onthe seized material found from the search action uls 132 of the Act on the finance brokers dated 30.11.2018. It appears from page 68 of the assessment order that the AQ has worked out the total figures of investments in cash loans at Rs 80.05 crores but all these figures have been correlated with different years is coming out from the seized material only 5.2.10. Further, it may be mentioned that the AO also stated about Rs 16 crores as confirmed by the assessee as loan given to Praveen Kasera However, this statement was recorded by the assessee during the course of survey on the seized material of Sanwena and Kasera only. These definite figures of 1.6 crores is not available anywhere in the Impounded papers. More, so the statement itself was retracted immediately after 3 days and has no evidentiary value for which the judgement of the Supreme Court has been cited. The AO had also referred to the judgment of Hon'ble Supreme Court in the case of 'National Thermal Power Corporation Ltd. v. CIT 229 ITR 383', on the ground that the assessee had failed to explain the reason for not raising the above legal dispute on earlier occasion and also not given any reason for such omission. In this regard, the exact citation of the order is quoted hereunder \"Para 5. Under section 254 of the Income-tax Act, 1961, the Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is, thus, expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under section 254 only to decide the grounds which arise from the order of the Commissioner (Appeals) Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why Printed from counselvise.com Page | 10 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier ………….. Para 8. The reframed question, therefore, is answered in the affirmative, ie, the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authonties below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits. 5.2.11. Hence, going by the plain and simple reading of the abovementioned judgement, the ratio of judgement is that a legal and jurisdictional issue can be raised at any forum. In fact,the Hon'ble Supreme Court has followed and applied its earlier judgment in the case of Jute Corporation of india 187 ITR 688 wherein it was held that jurisdictional and legal issue can be raised at any forum. Further the Hon'ble Supreme Court in the case of 'Kiran Singh vs Chaman Paswan' has gone to the extent holding that jurisdictional issue can be raised before any higher authority and even in collateral proceedings. The said judgement has been followed by Rajasthan High court in the case of 'Deepchand Kothai reported in 171 ITR page 381. It has been held by full Bench of Hon'ble Gujrat High Court in the case of P. V. Doshi that jurisdictional issue can be raised even in second round of proceedings Thus, the interpretation of judgment in National Thermal Power as done by the AO is not applicable 5.2.12. Hence, on going through the above-mentioned citation and the contention of the AO in the remand report, it is palpable that that the said judgments as relied on by the AO bears no resemblance on the facts as well as on the law points involved in the case of the assessee. The fact of the present case strongly contradicts the observations of the AD as presented in the remand report. The fact of the case reveals that information used for the assessment of the AY 2016-17 by the AO was outcome of search conducted at brokers le.. Sanweria and Kasera. Thus, it is submitted that the present assessment was based on incriminating material that was found and seized in the premises of those brokers i.e.. Kaseras and Sanwerias and therefore, the present case is also to be considered as a case connected with search and seizure operations. Section 153C deals with the procedure of assessment of income of 'any other person' other than the person in whose name the warrant is issued and who is covered u/s. 153A. Therefore, the main person in whose name the warrants were served are some brokers and the present assessee is an individual where no warrant was issued nor searched and only certain documents belongs to him were found which lead to the information that there are certain cash loan transactions pertaining to the assessee are found and that too in the premises of those brokers. Thus, the provisions u/s 153C of the Act are automatically triggered when the books of account, documents and assets belonging to any other person found in the course of search of the party against whom the warrant is issued. Therefore, the Assessing Officer would have initiated the assessment proceedings against appellant as 'Other Person' and accordingly would have issued a notice u/s 153C after recording satisfaction note, instead, the AO reopened the assessment u/s 147 of the Act. 5.2.13. There is no specific bar in the Act against issuance of notice u/s 148 to the other person. However, the notice might face legal hurdles because section 153C is a Printed from counselvise.com Page | 11 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 special provision to deal with the case of 'other person' arising out of search. Hence, when a case is covered by the provisions of section 153C, jurisdiction u/s 147 is ousted by legislative mandate. If during the course of search on Mr. A, some documents were seized which either pertains to Mr. B or any information contained therein relates to Mr. B, then any proceedings on Mr. B can be initiated u/s 153C (r.w.s. 153A) only and not u/s 148. The relevant provisions of Section 153C of the Act are reproduced below: “153C(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,— any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed againsteach such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: 5.2.14. Hence, from a bare reading of section 153C, it is clear that section 153C inter- alia provides that notwithstanding anything contained in section 147/148/149/151/153, where the Assessing Officer of the searched person is satisfied that any seized money, bullion, jewellery or other valuable article or thing belongs to a person other than the searched person; any seized documents pertains or pertain to a person other than the searched person; or any information contained in the seized documents relates to a person other than the searched person, then, seized documents etc. shall be handed over to the AO having jurisdiction over such other person (Mr. B in our example) and that AO of such other person shall proceed against such other person and issue notice and assess or re-assess the income of such other person in accordance with the provisions of section 153C (r.w.s. 153A), if, the AO of such other person is satisfied that the seized documents etc. have a bearing on the determination of the total income of such other person. Thus, if the seized documents pertain or pertain to a person other than the searched person, then the AO of such other person shall make an assessment as per section 153C of the Act; or even if the Printed from counselvise.com Page | 12 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 seized documents do not pertains to a person other than the searched person but some information contained in seized documents relates to a person (Mr. B in our example) other than thesearched person (Mr. A in our example), still the AO of such other person shall make an assessment as per section 153C (r.w.s. 153A) of the Act & not as per section 147/148 of the Act. Section 153C of the Act supersedes the applicability of provisions of section 148 of the Act. Therefore, if any documents etc. received from the AO of the searched person and such documents etc. pertains to or any information contained therein relates to the assessee, then proceedings could be initiated u/s 153C and not u/s 148. In such a situation, any proceedings u/s 148 would be invalid and any notice issued u/s 148 and proceedings u/s 147 would be void ab- initio. 5.2.15. It is also observed that the AO had also referred to the judgment of the Hon’ble Delhi High Court in the case of ‘Principal Commissioner of Income Tax vs. Naveen Kumar Gupta [2024] 168 taxmann.com 574 (Delhi)’ for the proposition that where jurisdictional conditions to initiate proceedings u/s 153C were not satisfied, the same cannot exclude the applicability of sec 147 of the Act. In this connection the assessee’s reference was made to the latest judgement of the Hon’ble Bombay High Court in the case of “18.2.2025_in WRIT PETITIONNO. 3057 OF 2019 in the case of Sejal Jewellary & Anr. … Petitioners and ors vs Versus Union of India & Ors. …Respondents” wherein it was held as under:- “23. Insofar as Mr. Suresh Kumar’s contention supporting the proceedings under Section 147 and 148 of I.T. Act are concerned, for the aforesaid reasons, such contention would in fact go contrary to the intention of the legislature as depicted by the provisions of Section 153A and 153C of the I.T. Act. There would not be any difficulty in accepting the proposition as canvassed by Mr. Suresh Kumar, referring to the decision of the Supreme Court in Phool Chand Bajrang Lal (supra), however, the facts in the present case are distinct. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 read with Section 147. We have already observedthat the provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153C are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given under Section 153A read with Section 153C by incorporating the “non-obstante” clause, in these provisions, which carves out an exception to any normal/regular action being resorted under Section 147. 24. In this view of the matter, we are of the clear opinion that the impugned notice under Section 147 of the I.T. Act and all actions consequent thereto are required to be held to be without jurisdiction and bad in law. The petition is Page 30 of 31 18 February, 2025 WP3057_2019.DOC accordingly allowed in terms of prayer clauses (a) and (b).” 5.2.16. The issue is therefore covered by the aforesaid latest judgement. Moreover, it was settled by the Hon’ble Supreme Court that the judgement when there are two divergent viewsof two distinct High Courts, one which favours the assessee should be accepted. Further, in the said case of ‘Principal Commissioner of Income Tax vs. Naveen Kumar Gupta [2024] 168taxmann.com 574 (Delhi)’, as relied by the AO, the assessing officer also received information from investigation wing that the assessee Printed from counselvise.com Page | 13 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 had purchased penny scrips. Based on the information and material available, Assessing Officer issued a notice under section 148, for reassessment of income after prior approval from the competent authority. The reassessment order was passed wherein additions were made under section 68 with respect to ledger submitted by the assessee indicating receipt of entries from shell companies operated by 'J' and 'N'; amount which was disclosed to be the commission paid for the alleged entries; and, an amount paid to the assessee for investment in penny stock. Just because parallel proceedings cannot be conducted for the same year under consideration i.e., one under section 147 and one under 153C, the Hon’ble High Court ruled in the favour of the revenue stating hereunder: “In the present case, the reassessment proceedings are initiated under section 147 not only on the basis of the material containing information that was found during the search conducted in respect of Jain Brothers, but is also founded on the basis of other informationas obtained by the Investigation Wing, namely, that the assessee had purchased units of a penny scrip. This being the case, the decision of the Assessing Officer to reassess the income of the assessee under section 147 cannot be faulted. [Para 66]” 5.2.17. It is worth mentioning that the decision of four Hon’ble High Courts, one Hon’ble Larger Bench of Tribunal and two other Tribunals and in favor of the assessee and decision of only one Hon’ble High Court that too for the presence of other materials along with seized material supported the revenue for action u/s 147 of the Act. In a situation when there are contradictory decisions by the Hon’ble High Courts and no decision of Jurisdictional High Court is available, the one which is favoring the assessee is to be adopted. Further, in this regard, it is respectfully contended that where there are two possible interpretations of a tax law, the one favouring the assessee should be adopted as held by the Hon’ble Apex Court in the case of ‘CIT vs. Vegetables Products Ltd. [1973], 88 ITR 192 SC’. The relevant ruling by the Hon’ble Apex Court is as under: ‘since there was a conflict in High Court decisions on the issue, the court ruled in favour of the assessee, holding that if two reasonable constructions of a taxing provision are possible, the one that favours the tax payers should be adopted.’ 5.2.18. The same ratio of Law had been also followed by different Hon’ble Courts including the Apex Court in the following judicial pronouncements: i. Manish Maheshwari: 289 ITR 341 (SC); ii. ACIT V. Thanthi Trust: 247 ITR 785 (SC); iii. CIT V. Orissa Cement Limited: 254 ITR 24, 29 (Del.); iv. Dr. Prannoy Roy V. CIT: 254 ITR 755, 770 (Del.); v. CIT vs. Karam Chand Prem Chand Ltd: 40 ITR 106; vi. C.A. Abraham vs. ITO: 41 ITR 425; Printed from counselvise.com Page | 14 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 vii. CIT vs. N.H.T. Company: AIR 1973 SC 2524; viii. Petron Engineering Construction Pvt.Ltd vs. CBDT: 175 ITR 523; ix. Birla Cement Works vs. CBDT: 248 ITR 216 and x. Union of India vs. Kanunga Industry: 178 ELT 19. 5.2.19. In view of the foregoing and respectfully following the decisions as detailed above, it can be inferred that the reassessment proceedings completed under section 147 read with section 143(3) of the Act is liable to be quashed on the ground of wrong assumption of jurisdiction under section 147/148 of the Act, instead of assuming jurisdiction under section 153C of the Act. 5.2.20. However, in the present case of the assessee, the AO was in possession of information based on which proceeding u/s 153C of the Act only can be initiated. The only basis of initiation of proceedings u/s 147 of the Act as per the AO was the seized material found from the finance brokers. There was no other material to justify action u/s 147 of the Act for the AY 2016-17. Hence the reopening u/s 147 was bad in law. 5.2.21. Further, the Ld. AO also refers to the judgment of Hon’ble Supreme Court in the case of ‘Poonam Mal v. Director of Inspection [1974] 93 ITR 505’, on the ground that evidences collected even in illegal search may be used against the assessee in appropriate proceedings under the law. In this regard, it is to mention that the said citation also has no resemblance to the case of the assessee. The said judgment of the Hon’ble Supreme Court of India pertains to the ‘legal validity of the search’ conducted whereas the facts and matters of the case of the assessee are completely different as compared to the said case. Therefore, the said judgement of the Hon’ble Supreme Court could not applicable to assess the case of the assessee. 5.2.22. Reliance was placed by the assessee on the following judicial pronouncements in support of its contention: (a) In the recent decision the Hon’ble Karnataka High Court in the case of ‘SriDinakara Suvarna vs. Dy. Commissioner of Income Tax (2022) 143 taxmann.com 362 (Karnataka)’ had held that: “Section 147, read with section 153C, of the Income-tax Act, 1961 - Income escaping assessment - General (Recording of satisfaction) - Assessment years 2005-06 to 2007- 08 - During search conducted at premises of 'A', a diary was seized which contained details of payment made by 'A' to assessee - Later on, survey was conducted in assessee's premises and he agreed to other additional receipts as income but did not file his revised return - Thereafter, Assessing Officer initiated proceedings under section 147 - Whether since no proceedings were initiated under section 153C against assessee, there was patent non- application of mind - Held, yes - Whether since Assessing Officer had not recorded his satisfaction with regard to escapement of income and he had based revenue's case entirely on statement of assessee, impugned reassessment order was not sustainable as assessee's admission could not be conclusive evidence - Held, yes”. Printed from counselvise.com Page | 15 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 Further, on SLP preferred by the revenue the Apex Court in same case, dismissed the SLP vide its order in (2023) 151 taxmann.com 489 (SC) which says as under: Section 147, read with section 153C, of the Income-tax Act, 1961 Income escaping assessment - General (Recording of satisfaction) - Assessment years 2005-06 to 2007- 08-During search conducted at premises of 'A', a diary was seized which contained details of payment made by 'A' to assessee - Later on, survey was conducted in assessee's premises and he agreed to offer additional receipts as income but did not file his revised retum Thereafter, Assessing Officer initiated proceedings under section 147 High Court by impugned order held that Assessing Officer on basis of search conducted at premises of A reopened assessment of assessee, since no proceedings were initiated against assessee under section 153C and Assessing Officer did not record his satisfaction with regard to escapement of income, impugned reassessment order was not sustainable - Whether SLP filed against impugned order of High Court was to be dismissed - Held, yes\" (b) The Hon’ble Vishakhapatnam Tribunal in the case of ‘G. Koteswara Rao vs. Deputy Commissioner of Income Tax, Central Circle-1, Vishakhapatnam (2015) 64 Taxmann.com 159’ had held as under: “Section 153A, read with sections 143, 147 and 153C, of the Income-tax Act, 1961 - Search and seizure - Assessment in case of (Scope of) - Assessment year 2008-09 - Whether in case of assessment made on assessee consequent to search in another case, Assessing Officer is bound to issue notice under section 153C and thereafter proceed to assess income under section 153A and, where Assessing Officer, instead of complying with provisions of section 153C, proceeded with reassessment under section 147/148 which is not applicable to search cases, assessment order passed under section 143(3), read with section 147, would be illegal, arbitrary and without any jurisdiction - Held, yes [Para 17] [In favour of assessee]. (c) The Hon’ble Delhi Tribunal in the case of ‘Sushil Gaur v. ITO – I.T.A. No. 1500/Del/2017 and Shelly Agarwal v. ITO- I.T.A. No. 1501/Del/2017, Order dated 08th August, 2017’, held that: “I have heard both the parties and perused the records, especially the impugned order as well as the Paper Book. On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), I find that in that case as in the present case before me, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. 147 as illegal and void ab initio. It was held thatAssessing Officer having not followed procedure under sec. 153C, reassessment order was rightly quashed by the Learned CIT(Appeals). I also draw my support from the ITAT, New Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016, wherein the reassessment was quashed on the similar facts and circumstances by following the ITAT, Amritsar decision in the case of ITO vs. Arun Printed from counselvise.com Page | 16 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 Kumar Kapoor (supra). In the present case before me, it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on the basis of information available with the AO. I thus respectfully following the decision of Co-ordinate Bench of the ITAT, Amritsar in the case of ACIT vs. Arun Kapur – 140 TTJ 249 vs. (Amritsar) and the ITAT, Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016 hold that provisions of sec. 153C of the Act were applicable in the present case for framing the assessment, if any, which excludes the application of sec. 147 of the Act hence, notice issued under sec. 148 of the Act and assessment framed in furtherance thereto under sec. 147 read with section 143(3) of the Act are void ab initio. Hence, the reassessment inquestion is accordingly quashed. Since I have already quashed the reassessment, there is no need to adjudicate other grounds.” (d) Recently The Hon’ble High Court of Rajasthan in the case of ‘Shyam Sunder Khandelwal v. ACIT [2024] 161 taxmann.com 255 (Rajasthan)’, had held that: “Section 153A, read with sections 148 and 153C, of the Income-Tax Act, 1961 - Search and seizure - Assessment in case of (Section 153C vis-a-vis section 148) - Assessment year Assessment year 2014-15 - Whether applicability of section 153C in cases where seized material related to or belonged to person other than on whom search is conducted or requisition made does not render section 148 otiose - Held, yes – Whether section 148 shall continue to apply to regular proceedings and also in cases where no incriminating material is seized during search or requisition – Held, yes - Whether on satisfaction of twin condition forproceedings under section 153C, Assessing Officer has to proceed in accordance with section 153A, however, it is not obligatory on Assessing Officer to make assessment for all years – Held, yes - Whether once there is incriminating material seized or requisitioned belonging or relatable to person other than on whom search was conducted, section 153C is to be resorted to - Held, yes [Paras 30 and 32] [In favour of assessee]” 5.2.23. Hence, in view of the above judicial pronouncement and the discussion held above, it can be inferred that as in the present case the incriminating material found from the search & seizure operation in the cases of brokers namely Sanweria and Kasera, the assessee should be treated as ‘Other person’ and the same seized incriminating details or documents whatever found should be used to conduct an assessment u/s 153C of the Act not U/s 147 of the Act for the AY 2016-17. Hence, the proceedings u/s 147 of the Act is not appropriate in the assessee’s case. Therefore, the assessment made u/s 147 of the Act is treated as annulled and void-ab-initio. Consequently, these grounds raised by the assessee are allowed. 3.4. After hearing the rival contentions and perusing the materials available on record, we find that a search action u/s 132 of the Act was conducted on finance brokers Kasera and Sanweria on 30.11.2018. We note that during the course of said search, certain documents/ papers were impounded and seized. The statements of Printed from counselvise.com Page | 17 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 the finance brokers were also recorded u/s 132(4) of the Act with regard to the modus operandi of arranging loans. We note from the said statements that though the brokers admitted to have engaged in the business of arranging cash loans but the none of the brokers in the statements named the assessee as loan provider or loan receiver nor the documents seized during the course of search contained the name of the assessee. We note that the assessee was surveyed u/s 133A of the Act on 19.02.2020, along with group concerns Citizen Umbrella Mfg Co. Ltd. and during the course of search, the some documents marked as SKB/1 and 2 of the assessee and CUML/1 and 2 of Citizen Umbrella Mfg. Co. Ltd. were impounded. The statement u/s 133A of the Act was recorded on 20.02.2020, wherein the assessee admitted to have given some initial loan of ₹1.60 crores during the financial year 2016-17, which was only rotated periodically. However, the assessee made disclosure by ₹50 crores during the course of survey in the statement recorded on 20.02.2020. We note that the said surrender/ disclosure was withdrawn on 24.02.2020, within three days by filing an affidavit before ADIT and therefore, statements were retracted. The case of the assessee was reopened on 26.03.2021, after recording the reasons to believe which stated that during the course of search operation on finance brokers Sanwaria and Kasera group on 31.11.2018, certain incriminating material/ documents were seized pertaining to the assessee group in which the assessee Suresh Kumar Bathia alias Jain is main person of Citizen Group and abbreviated as SK Jan/ Citizen. The ld. AO further noted that thereafter a survey was carried out on the assessee. The ld. AO also noted that there was a low profitability vis a vis the high turnover and high cash loan transactions and thus, the ld. AO noted that the Printed from counselvise.com Page | 18 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 assessee Shri Suresh Kumar Banthia was involved in unaccounted cash transactions. The ld. AO bifurcated the year wise loan transactions and for the year under consideration the ld. AO computed the loan transactions at 36.65 crores by relying on the statement of Shri Pravin Kumar Kasera and concluded that the same was accepted by the assessee in the statement recorded on 20.02.2020 that he used to lend cash through Praveen Kasera. 3.5. We have perused the rival contention material before us as well as the appellate order and find that the source of incriminating material/ documents on the basis of which the assessment was reopened was the documents seized during the course of search and the finance brokers Kasera and Sanwaria on 30.11.2018. Therefore, the proceedings u/s 153C of the Act should have been initiated as there exists separate code for assessing such incomes which starts with non-abstante clause overriding the other provisions of the Act. Therefore, the ld. CIT (A) has correctly passed the order that the proceedings u/s 147 of the Act as well as the consequent assessment proceedings were invalid and void ab initio. The same have been initiated under the wrong provisions of the Act. We note that the ld. CIT (A) while passing the order relied on several decisions as extracted above. Therefore, we do not find any occasion to interfere with the said appellate order which is very reasoned and speaking order. Consequently, we uphold the order of ld. CIT (A) on this issue by dismissing the ground no.1 of Revenue’s appeal. 4. Ground nos.2, 3 and 4 of the Revenue’s appeal are against the order of ld. CIT (A) deleting the addition of cash loans amounting to ₹36.65 crores u/s 69A of the Act and interest income of ₹1,64,92,500/- u/s Printed from counselvise.com Page | 19 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 69A of the Act on technical ground without deciding the issue on merit. 5. Besides, the assessee has raised the issue in the cross objection in ground nos.7 to 9 in the cross objection, which is qua the addition of ₹36.65 crores u/s 69A of the Act and ₹1,64,92,500/- towards interest u/s 69A of the Act not in accordance with the law and that to based on the statements relied on by ld. AO which has been retracted and has no legal sanctity. 6. Since, we have already upheld the order of ld. CIT (A) on the legal issue, therefore there is no need for adjudication of these grounds in Revenue’s appeal as well as in the cross objection. However, we would just like to mention that in this case the assessment has been framed by the ld. AO by making the above addition u/s 69A of the Act in respect of cash loans as well as in respect of estimated interest u/s 69A of the Act. The sole basis for making the said addition is the statement recorded during the course of survey action of the assessee. We note that the assessee has already retracted the statement just three days after recording all the statements in which the admission of disclosure was made. The ld. AO has failed to bring on record of any substantive material corroborating the admission by the assessee in the statement. We also note that the documents seized from the possession of Kasera and Sanwaria during the course of search on 30.11.2018, did not mention the name of the assessee nor did the Sanwaria and Kasera in their statements recorded ever named the assessee. Therefore, even on merit the addition made by the ld. AO u/s 69A of the Act which is based on surmises and presumption and has not followed the basis. It is also settled law that the addition based on the statement alone cannot be made specially Printed from counselvise.com Page | 20 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 when the same is retracted by the assessee unless and until there are corroborating evidences. The case of the assessee is squarely covered by the decision of the co-ordinate bench in assessee’s own case in ITA No. 835/KOL/2025 for A.Y. 2020-21, which was also covered in the same survey operation. The co-ordinate Bench while deleting the addition in respect of loan transaction observed as under:- “08. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly there was search on finance broker ‘Kaseras’ and ‘Sanwaria’ during which certain documents were seized which are stated to have contained the details of cash transactions/ loans by the assessee. The said search took place on 30.11.2018. Thereafter, a survey was conducted on the assessee and M/s Citizen Umbrella Mfg. ltd. during which the statement of the assessee was recorded u/s 131 of the Act. Admittedly, the search was conducted on a date which falls prior to the start of the assessment year i.e. A.Y. 2020-21 and even the start of the financial year relevant to A.Y. 2020-21. Therefore, material found during the course of said search on ‘Kaseras’ and ‘Sanwaria’ has nothing to do with the assessment of income in the assessment of the assessee. Therefore, we hold that finding recorded by the ld. AO at pages no. 1 to 4 and 20 to 45 are not relevant for the purpose of assessment of income for the year under consideration. We also note that the assessee retracted his statement given during the course of survey u/s 133A of the Act immediately on 24.2.2020 which was within 5 days of the date of survey by filing affidavit on the ground that the statement was taken under coercion and there was no corroborative material found during the course of survey. In the said retraction, the assessee also stated that entries in the impounded documents CUM1 and SKB were not relevant or they were part of the books of account maintained by the assessee. Therefore, we find merit in the contention of the assessee that the ld. AO could not bring on record any substantive material to corroborate the entries the documents/material seized. We also note that though the name of Gajraj Choraria and others Pawan Mundhhra were taken by the finance brokers as stated above i.e. Pawan Mundhhra and Gajraj Choraria and others, however, their statements were not recorded nor any summons were issued even though their phone numbers as well as addresses were given to the survey party as well as to the ld. AO. We note that apart before the statement and jottings in the impugned papers, no corroborative materials were there to show that the assessee was involved in advancing any cash loans through the said brokers Gajraj Choraria and Pawan Mundhhra. We find that the ld. AO has relied on the pages/documents impounded viz SKB/1, CUML/1, CUML/2 as is apparent from the order. We have examined the said papers/documents and find that nothing comes out of the said documents to show that there was any investments made by the assessee. We note that thus there was no material before the AO which corroborates the conclusion of making huge investments by way of giving loans and earning interest thereon. There is no supporting materials or evidences in corroboration of impounded papers of making investment by the assessee. We further note that no statement of any broker or borrower was brought on record. Printed from counselvise.com Page | 21 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 09. We further find that the revenue has relied on the statement of assessee recorded u/s 133A of the Act by the IO on 19.02.2020 which was retracted on 24.02.20. Thus, the retracted statement cannot be the basis or evidence to make the addition. We also note that after retraction of the statement no further statement of the assessee was recorded by the IO or by the AO in the course of assessment proceedings. The CBDT in its instruction F.286/98/2013 dt. 18.12.2014 has also directed the revenue to avoid obtaining admission of undisclosed income without evidences. 010. We also note that the ld. AO has noted that the assessee has received and re- invested through Satish but nowhere the ld. AO has stated that from where he has picked up the said name. We note that from the papers impounded from M/s Citizen Umbrella Mfg. ltd. that there is no mention of assessee’s name that there was debit as well as credit entries in the name of Satish on the same day but there was no mentioning about any interest or investments and there was no justification for adding two zeros to the said figures. Therefore, considering the facts and circumstances of the case and the nature of documents which contains only jotting, we are of the view that there can be best described as dumb document as there was no corroborative material to support the entries made in the said documents and therefore, no adverse inference could be drawn against the assessee. The case of the assessee is squarely covered by series of decision; (i) Satyapal Wassan (supra) (ii) VC Shukla (supra) (iii) Rakesh Goyal (supra) (iv) Mohan Foods Ltd. (v) SM Agarwal (supra) (vi)Chandra Chemouse P. Ltd.(supra) (vii) S. Khader Khan Son (supra). We also find supports in the decision of Hon’ble Apex Court the case of Vinod Solanki & Others vs. UOI (SCC 537 209) wherein it has been held as under: \"22. It is a trite law that evidences brought on record by way of confession which stood retracted must be substantially corroborated by other independent and cogent evidences, which would lend adequate assurance to the court that it may seek to rely thereupon. We are not oblivious of some decisions of this Court wherein reliance has been placed for supporting such contention but we must also notice that in some of the cases retracted confession has been used as a piece of corroborative evidence and not as the evidence on the basis whereof alone a judgment of conviction and sentence has been recorded.\" 011. The judgment of Hon'ble Delhi High Court 293 ITR 43 may also be cited wherein the Ld. Court dismissed the revenues appeal. The finding of the Ld. Tribunal in the said case vide para 10 was as under: - \"We have ourselves examined the contents of the document and are unable to draw any clear and positive conclusion on the basis of figures noted on it. The letters 'H.S.', 'T.2' and 'D-Shop' cannot be explained and no material has been collected to explain the same. Likewise, the figures too are totally unexplained and on the basis of nothings and jottings, it cannot be said that these are the transactions carried out by the assessed for advancing money or for taking money. Thus, in our opinion, this is a dumb document.\" 012. In view of the above decisions and facts of the assessee’s case, we are inclined to set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition. Printed from counselvise.com Page | 22 ITA No. 1894/KOL/2025& CO No. 75/KOL/2025 Suresh Kumar Banthia; A.Y. 2016-17 013. In the result, the appeal of the assessee is allowed.” 6.1. Therefore, even on merit, the addition made by the ld. AO is wrong and cannot be sustained. 7. Since, we have dismissed the appeal of the Revenue by upholding the order of ld. CIT (A) and also allowed the cross objection filed by the assessee on merit by allowing ground no.7,8 and 9, the other grounds raised by the assessee in ground no.1,2,3,4,5 and 6 are not adjudicated and left open to be decided if the need arises for the same. 8. In the result, the appeal of the Revenue is dismissed and the Cross Objection of the assessee is partly allowed. Order pronounced in the open court on 13.01.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 13.01.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "