9911796707
TMI Blog2020 (9) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... erred by the revenue assails the aforesaid finding of fact by the Ld CIT(A). Therefore we find that the aforesaid factual finding of the Ld. CIT(A) crystallizes and therefore we do not see any reason to interfere with the order of the Ld. CIT(A) on this matter and confirm the finding of Ld. CIT(A) and accordingly hold that the documents ID marked MSL/23 Pages 1 to 3, MSL/8 Page 13, SJ/MHD/MZ Page 2 and MSL/21 Page 32 to 36 also did not constitute incriminating material or evidence qua the assessee. Additions made u/s 68 69C in the hands of the assessee and M/s IQCIPL (since merged into the appellant company) - addition had referred to the statements of so-called entry operators recorded by different officers of Income-tax Department between the years 2013 to 2015 - HELD THAT:- Third party statements referred by the AO to justify additions without being tested by cross examination cannot be the basis for making addition u/s 68 69C both in the case of M/s. IQCIPL and the appellant/assessee and we hold that these statements with the legal infirmities pointed out does not constitute as an incriminating material unearthed in the course of search conducted upon the assessee and in that v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and un-reasonable, therefore he rightly deleted the addition made. On this score, these grounds of the Revenue fail. Additionally, we also find merit in the Ld. CIT(A) s reliance on the following decisions holding that the theory of extrapolation cannot be applied on mere theoretical or hypothetical basis in absence of any incriminating corroborative evidence or material brought on record by the AO to warrant the same. Unsecured loans and interest paid thereon u/s 68 69C - HELD THAT:- We note that no addition u/s 68 of the Act in respect of the loans brought forward from the earlier years was made in the past assessments. In the circumstances therefore we find that if in the past assessments, the Revenue did not draw adverse inference in respect of the principal loan amounts received from these 27 parties, then there was no apparent reason for the AO to dispute and disbelieve the genuineness of the transaction involving only the interest payment. We also note that in respect of interest paid during the relevant year, the appellant had complied with relevant provisions of Section 194A of the Act [TDS] and necessary evidence in respect thereof was also furnished. In the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without entering it in the regular books of account - CIT-A deleted addition - HELD THAT:- The conclusion of the Ld. CIT(A) on the facts discussed cannot be termed perverse and is a plausible view for the reason that the AO has assumed facts from a perusal of MSL-8 page 15 that the assessee has received sale consideration 10 lacs from Manoj Rathi in respect of Swarnamani project. We note that the AO has not made any attempt to summon Shri Manoj Rathi and confront him with MSL-8 page 15 and recorded his statement as to whether he has given 10 lacs to assessee on 21.06.2016 for the servant quarter in the said Swarnamani project. In the absence of any enquiry whatsoever, the hand written parchi/loose sheet cannot be the basis for the assumption of adverse facts against the assessee and, therefore, the Ld. CIT(A) rightly deleted the addition and, therefore, we confirm the action of the Ld. CIT(A). X X X X Extracts X X X X X X X X Extracts X X X X ..... (since merged with Mani Square Ltd] 2,15,00,000 - 60,00,000 - - Unexplained interest expenditure u/s 69C [in the hands of IQ C Infrastructure Pvt Ltd (since merged with Mani Square Ltd] 25,76,219 22,68,000 - - - Cash Purchases [Proloy Mandal & Satyendra Singh etc.] 15,07,993 14,37,690 15,31,380 14,55,893 - Delayed payment of EPF & ESI u/s 36(1)(va) - 5,59,622 6,41,059 25,57,784 74,65,217 Interest receivable from Hari Sharma - - 1,93,75,000 5,69,06,250 7,29,42,188 Undisclosed On-monies on sale of flats in Swarnmani Project - - 44,33,46,979 9,91,12,262 10,91,55,961 TOTAL in Rupees 92,69,57,539 24,41,87,809 56,29,11,183 19,65,23,641 20,96,87,674 3. We first take up the appeals filed by the assessee and the Revenue for AY 2013-14 in IT(SS) No.58/Kol/2019 & IT(SS) No.75/Kol/2019. For AY 2013-14, the assessee had originally filed return of income on 30.11.2013 declaring total income of ₹ 4,68,76,660/-. The income tax scrutiny assessment u/s 143(3) of the Act for AY 2013- 14 was completed on 29-03-2016 at total income of ₹ 4,97,56,300/-. After the search conducted on 22.06.2016, the assessee filed a return in response to notice u/s 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- was paid by Satyam Bubna (HUF) and 'Otherwise' (cash) mode and was received by Mani Square Limited. It is noteworthy that even interest of ₹ 16,33,2181 - was charged @ 18% p.a. for delay payment from Sat yam Bubna (HUF) by Mani Square Limited. The calculation mentioned in the extracts of RB-12 Page No.3 is pretty detailed and clear and thus not require further calculation. The calculation of interest part which found in RB-12 page No.2 is also detailed and reproduced below:- Relevant Extracts of RB-12 Page No.2 Shree Interest Calculation Date of demand Date of receipt No. of Days Demand Account Deficit b/f Shortfall Interest @18% (Rs.) (Rs.) (Rs.) (Rs.) 01-04-2013 30-06-2013 91 67,34,752 - 67,34,752 3,02,234 01-07-2013 30-09-2013 92 - 70,36,986 70,36,986 3,19,267 01-10-2013 31-12-2013 92 - 73,56,253 73,56,253 3,33,752 01-01-2014 31-03-2014 90 - 76,90,005 76,90,005 3,41,310 01-04-2014 24-06-2014 85 - 80,31,315 80,31,315 3,36,655 67,34,752 16,33,218 Due as per Statement 72,38,042 Less: a)deposit 3,34,750 b) Legal Charges1,68,540 5,03,290 67,34,752 Thus, the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate) ₹ 15,000/- per sq.ft % of Cash Component in total consideration 46.67% (₹ 7,000/₹ 15,000) Computation of cash component in total deal value (cash + agreement) value for sale of car parks: Particulars Details Total Deal Value (Cash+Agreement value) of Car Parks ₹ 9,00,000 per car park Agreement Rate of Car Park ₹ 9,00,000 per car park Cash Component for Car Park ₹ 6,00,000 per car park No. of Car Parks Per Flat 4 nos. Cash Component of Car Park for sale of each Flat ₹ 24,00,000/- ( 4 car parks * ₹ 6,00,000 per car park) Computation of ON MONEY (Cash Consideration) for sale of Flats Particulars Details No.of Flats Sold in AY 2013-14 12 Nos. Total Sales Consideration (including consideration for car parks) received as per agreement rate ₹ 52,08,57,725/- Less: Consideration of Car Parks ( as per Agreement Rate) (₹ 1,44,00,000) ( 4 car parks * ₹ 3,00,000 per car park * 12 Nos. Net Consideration ( as per agreement rate) for sale of flats ₹ 50,64,57,725/- (₹ 52,08,57,725 - ₹ 1,44,00,000) Agreement value represents 53.33% (100% - 46.67%) of tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Mani Square Ltd. is also charging interest on the overdue amount. This also shows that these papers relate to sale of flat by Mani Square Ltd to Sat yam Bubna, HUF. I also agree with the observation of the A.O. that in view of the noting like received till date, short fall ,deficit etc. indicates that these papers were prepared by Mani Square Ltd. and sent to Sat yam Bubna, HUF for payments follow up(AO page -6). Regarding the point of the assessee that third party document cannot be used to foist liability on the assessee, it may be pointed out that income tax proceedings are in the nature of civil proceedings and therefore, what is required is preponderance of probability and not proof beyond doubt. The noting details which were seized from search in the case of clearly indicates that the assessee has received cash on sale of flats. Regarding the assessee's statement that Mr. Sat yam Bubna, HUF has not accepted these papers in his statement recorded. Non admission of alleged unaccounted transaction will not nullify the evidence gathered which are fairly detailed and authentic. In view of the above discussion, I agree with the findings of the A.O. that these papers does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed hard disk ID marked, SVPL-PD-1-33A, Canal Circular Road-File No.F-Loan.xls-Cash which according to AO showed that the assessee had received loan of ₹ 75.99 crores from more than 50 parties on different dates. The AO also referred to the documents seized and ID marked MSL/8 Pages 23 & 24 which according to him were acknowledgment slips of cash loans. However, the AO thereafter acknowledged the fact that the notings found in SVPL-PD-1-33A, Canal Circular Road-File No.F-Loan.xls- Cash had already been considered in the preceding search and offered to tax by the assessee before the Income-Tax Settlement Commission,[in short ITSC] Kolkata. The AO further observed that the documents seized and ID marked MSL/8 Pages 23 & 24 were duly covered under Income Disclosure Scheme, 2016 (in short IDS scheme 2016). The AO accordingly did not draw any adverse inference with reference to these seized documents. According to the AO, however, the aforesaid facts necessitated enquiry into the unsecured loans taken by the assessee. The AO claimed to have undertaken a three step process wherein, (a) Firstly he issued summons u/s 131 of the Act to verify physical identity of parties (lenders), (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of unaccounted receipt were confirmed then the assessee was entitled to benefit of telescoping these unaccounted expenses and (c) the assessee had duly substantiated that these entries were recorded in the books of accounts and that these expenses were disbursed/paid in cash 'through' assessee's own staff, namely Shri Proloy Mondal and Shri Satyendra Singh and not 'to' these persons. 8. It is further noted that the AO had separately framed the income-tax assessment u/s 153A/143(3) dated 31.12.2018 of M/s IQ City Infrastructure Pvt Ltd. (hereinafter referred to as "M/s. IQCIPL") which, according to AO, stood amalgamated with the appellant/assessee vide order of the Hon'ble Calcutta High Court dated 12.12.2016. The Ld. AR however pointed out that M/s IQCIPL stood amalgamated with the appellant/assessee on 06.03.2017. He further submitted that although the Department was informed about the amalgamation, but the notice u/s 153A dated 05.02.2018 was issued in the name of the non-existent entity. Our attention was drawn to the notice issued u/s 143(2) dated 05.10.2018 which was also issued in the name of the non-existent entity. The AO however framed the assessment order in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee to warrant the reopening of a concluded assessment, and making/sustaining the subsequent impugned additions/disallowances under assessments concluded u/s 153A of the I.T.Act,1961. 3. That, the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition made vis-à-vis the sale of flat and car park(s) in the Shiromani Project on the alleged basis of cash consideration having been received by the Assessee against the sale of flat and car park(s) to Satyam Bubna (HUF). 4. That, the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition made vis-à-vis the sale of flat and car park(s) in the Shiromani Project, by erroneously placing reliance on the documents seized during the course of the third party search dt. 22.09.2015 conducted at the business premises of the Ambica Datu Group, and the third party statement of Mr. Satyam Bubna, dt.17.11.2015 u/s 132(4) of the I. T. Act, 1961 in spite of the fact that they do not in any manner implicate the Assessee to warrant the impugned addition u/s 153A of the I. T. Act, 1961. 5. That, the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pite of that fact that both the lower authorities have not once doubted and/or rebutted the material/evidences brought on record by the assessee, that effectively meet the ingredients of Sec.68 (i.e., identity, geniuses and creditworthiness) and which thereby result in the discharging of the Assessee's burden of proof. 10. That the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition u/s 69C with respect to the disallowance of interest on such unsecured loans in an unwarranted, whimsical and arbitrary manner, purely on the basis of surmises and conjectures. 11. That the Ld. A.O. has erred and the Ld.CIT(A) has wrongly sustained the impugned addition u/s 69C with respect to the disallowance of interest on such unsecured loans in complete ignorance of the fact that the addition u/s 69C was unwarranted since the payment of interest was out of the regular books of accounts of the Assessee, the source of which was duly explained, and no such transaction was undertaken outside the regular books of accounts. 12. That, since the order of the Ld.CIT(A) on the above issues suffers form illegality, and infirmity and is devoid of any merit, the impugned add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court (respectively), therefore rendering their existence as nonexistent in Law. 3) That the Ld. A.O has erred in computing a separate total income for the amalgamating/merging entity, i.e., M/s IQ City Infrastructure Pvt. Ltd. and the amalgamated/merged entity (M/s Mani Square Ltd.) in complete ignorance of the fact and law that upon the merger/amalgamation of the Appellant with M/s Mani Square Ltd. vide Order dt. 06.03.2017 of the Hon'ble Calcutta High Court, only one such total income ought to have been computed as per the provisions of the Income Tax Act, 1961 in the name of the merged/amalgamated entity, i.e., M/s Mani Square Ltd." 11. It is noted that the above additional grounds have been raised for the first time before this Tribunal. We note that the issue involved in these additional grounds is purely legal in nature. The jurisdictional facts relating to these grounds are already available on record and no verification of new fact is required. Thus, following the ratio of the decision of the Hon'ble Supreme Court in the case of NTPC Vs. CIT 229 ITR 383, we deem it fit to admit this legal issue for adjudication. 12. After giving thoughtful consideration to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completing assessments in case of search conducted u/s 132 of the Act or requisition made u/s 132A of the Act. These provisions can be invoked only in cases where the Income-tax Department has exercised its extra ordinary powers of conducting search and seizure operations after complying with stringent pre-conditions prescribed in Section 132 of the Act. We do not deny the ld. CIT, DR's contention that once a search u/s 132 is conducted against a person, then irrespective whether any incriminating material is found, the AO is required to proceed against such person for completing the assessments u/s 153A of the Act for the specified six assessment years. To this extent, there is no quarrel. However we find that Section 153A itself creates the fine distinction/differentiation amongst specified six assessment years depending whether prior to the date of search, the assessment proceedings are pending or not before the AO. We note that the relevant section itself clarifies that where an assessment was already completed against an assessee and any appeals or further proceedings are pending, then such appeals or other proceedings do not abate. We should keep in mind that merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the Ld AOs as a fresh exercise. The Ld AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The Ld AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Ld AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Kabul Chawla (Supra) was dismissed by the Hon'ble Apex Court which is reported in 380 ITR (St.) 4 (SC). 15. We also find that the Hon'ble Jurisdictional High Court in the case of Principal CIT vs M/s Salasar Stock Broking Ltd in G.A.No. 1929 of 2016 ITAT No. 264 of 2016 dated 24.8.2016 endorsed the aforesaid view of Hon'ble Delhi High Court in Kabul Chawla's case. The Hon'ble High Court also placed reliance on their own decision in the case of CIT vs Veerprabhu Marketing Ltd reported in (2016) 73 taxmann.com 149 (Cal HC) and held as follows: "Subject matter of challenge is a judgement and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No.1775/Kol/2012 and allowed a cross-objection registered as CO-30/Kol/2013 both pertaining to the assessment year 2005-06. The learned Tribunal was of the opinion that the Assessing Officer had no jurisdiction under Section 153A of the Income Tax Act to reopen the concluded cases when the search and seizure did not disclose any incriminating material. In taking the aforesaid view, the learned Tribunal relied upon a judgement of Delhi High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (III) Third Party Statements recorded in 2013-2015 Obtained from public domain of the Department Additions u/s 68 & 69C of the Act - ₹ 42,93,63,463/- [Appellant] and ₹ 2,40,76,219/- [IQ Infrastructure Pvt Ltd] (IV) MSL/HD/1 Appellant Cash payments in excess of ₹ 20,000 - ₹ 15,07,993/- 18. Before we proceed to examine the contents of the seized documents referred to by the AO, it is first relevant to understand as to the meaning of the expression "incriminating material" or evidence. There can be several forms of incriminating material or evidence. In order to constitute an incriminating material or evidence, it is necessary for the AO to establish that the information, document or material, whether tangible or intangible, is of such nature which incriminates or militates against the person from whom it is found. Some common forms of incriminating material, inter alia, are for instance, where the search action u/s 132 of the Act reveals information (oral or documented) that the assets found from the possession of the assessee in form of land, building, jewellery, deposits or other valuable assets etc. do not corroborate with his returned income (which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments maintained in the ordinary course of business, then in such event the AO is not permitted to straightaway treat such material as 'incriminating' in nature unless the AO thereafter brings on record further corroborative material or evidence to transform his suspicion to belief and conclude that the transaction reflected in regular books or documents did not represent the true state of affairs and rather that can be the starting point of inquiry to un-earth further material or evidence to transform his suspicion to belief and conclude that the transaction reflected in regular books or documents did not represent the true state of affairs. Until these conditions are satisfied, it cannot be held that every seized material or document found in the course of search as incriminating in nature qua the assessee justifying the additions in unabated assessments. In other words, any and every seized material which comes in AO's possession cannot be construed as 'incriminating material' straightaway. For instance, scribbling or rough notings found on loose papers cannot be straightaway classified as 'incriminating material' unless the AO establishes nexus or connect of such notings with u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suggested any receipt of cash/on-monies from third party M/s Satyam Bubna (HUF). Further the Ld. AR also took us through the statement given by Shri Satyam Bubna u/s 132(4) of the Act wherein he had explained the contents of the document ID Marked RB/12 found from his premises in the course of search. The Ld. AR pointed out that Mr. Bubna himself had stated that this bunch of documents comprised of loose papers which had rough calculations having no bearing on the actual transaction with the appellant/assessee. Shri Bubna also affirmed that all the payments made for purchase of flat in Shiromani Project were made through proper banking channel and that there was no involvement of any cash. The Ld. AR submitted that the explanation put forth by Shri Bubna was accepted by the Department and no addition on account of payment of alleged on-monies was made in the hands of M/s Satyam Bubna (HUF). Further, to support this contention, the Ld. AR invited our attention to the information gathered by the assessee under the Right to Information Act, 2005 [in short the RTI], which revealed that no adverse inference was drawn with regard to these documents ID marked RB/12 in the income-tax asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngth and after giving our thoughtful consideration to the submissions of rival parties and after careful examination of the material on record, it is noted that the Pages 2 & 3 of the document ID Marked RB/12 are un-earthed from third party premises and nine (9) months before search took place in assessee's premises. And these are loose sheets of paper which neither contained the name of the assessee nor any mention of its project. Further the document also does not suggest that this document was prepared at the instance of the assessee. After going through each line of these loose papers, we do not find any mention of any cash payment by M/s Satyam Bubna (HUF) to the assessee. Moreover even if the document is taken at its face value [literal sense] then also we note that it suggests that these notings pertained to the year 2010 and therefore no inference could be drawn against the assessee qua the relevant AY 2013-14. It is however observed that the AO had assumed that the amounts mentioned as 'otherwise' represented on-monies/cash paid by M/s Satyam Bubna (HUF) to the assessee for the relevant AY 2013-14. The AO however has not been able to spell out as to how he arrived at such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the document ID Marked RB/12 relied upon by the AO to justify the impugned addition were merely rough notings which was just an estimate and it cannot be a cogent basis to draw adverse inference against the appellant. We further note that the assessee had raised an RTI query dated 02.03.2020 with the information officer of the Income Tax Department wherein the following questions were raised in relation to the income-tax assessment of M/s Satyam Bubna HUF (third party): 1. Whether any such search assessment order(s) u/s 153A r.w.s. 143(3) of the Income Tax Act has been passed in the name of Satyam Bubna (HUF) for the Assessment Year (AY) 2010- 2011 and AY 2013-2014 pursuant to the search conducted on 22.09.2015 2. If the answer to Q.No.1 is yes, then please provide for the copies of the search assessment orders passed u/s 153A r.w.s. 143(3) of the Income Tax Act that has been passed in the name of Satyam Bubna (HUF) for the AY 2010-2011 and AY 2013-2014. 3. If the answer to Q.No.1 is yes, then please also provide for the certified copy of the order sheet of the assessing officer w.r.t. the search assessment proceedings conducted in the case of Satyam Bubna (HUF) for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the Hon'ble High Court are as follows: 3. The facts leading to the filing of the present appeal are that a search took place on 17th August, 2011 in the corporate office of AEZ Group at 301-303, Bakshi House, Nehru Place, New Delhi during which a hard disc was found and seized from which, a print out of a file named "D.P. Correction Sheet.xls" was taken. This sheet contained details of Sales Status of lndirapuram Habitant Centre and at serial No. 32 of the said sheet, the name of the Assessee appeared. According to the Revenue, the Assessee had invested a sum of ₹ 20 crores. Therefore, on 10th February, 2012, a search operation was undertaken under Section 132 of the Act in the case of the Assessee. There is no dispute that this search did not result in the discovery of any incriminating material qua the Assessee. ……. 6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the addition/s. The relevant submissions made by the Ld. AR before this Tribunal were as follows: "He reiterated the submissions made before the lower authorities with regard to framing of additions in section 153A assessments without any incriminating material found thereon. He further stated that the only seized document found in the assessee's premises was KKS / 1 comprising of 8 pages and the explanation given thereon explaining its contents had been duly accepted by the ld AO and no addition was made in section 153A assessments. He argued that the materials found and seized from the premises of any other company should be considered in their respective search assessments in view of presumption provided in section 292C of he Act. He argued further that if at all such materials are to be used against the assessee, then the ld AO of the other person (i.e the party from whose premises materials were seized) should record a satisfaction in terms of section 153C of the Act and transfer those materials to the AO of the assessee and the AO of the assessee should have initiated proceedings u/s 153C of the Act on the assessee on the very same material. In the instant case, the materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.3.2017, wherein it was held that, no addition could be made on the basis of evidence gathered from extraneous source and on the basis of statement or document received subsequent to search. Hence we hold that the said materials cannot be used in section 153A of the Act against the assessee." 27. In this regard, we may also refer to the following observations made by the Ranchi Bench of this Tribunal in the case of Rajat Minerals (P) Ltd Vs DCIT reported in 114 taxmann.com 536; "15. We shall now venture to delineate on yet another legal objection of assessee towards proposition (v) carved out in para 13 above. As per the aforesaid proposition, the controversy that arises for adjudication is on the scope and ambit of assessment proceedings in search cases under s.153A of the Act. section 153A of the Act provides for the procedure for completion of assessment where a search is initiated under s.132 of the Act or books of accounts or other documents or any assets are requisitioned under s.132A of the Act. The case propounded on behalf of the assessee is that additions/disallowances made in section 153A of the Act proceedings has no rational connection with incriminating material, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee as contented in TEP dated 21.11.2016 was obtained post search at a very belated stage after time limit for assessment in relation to AYs. 2009-10, 2010-11, 2011- 12 & 2012-13 stood expired and thus remained unabated and achieved finality. It was however fairly conceded that assessments for AYs. 2013-14; 2014-15 & 2015-16 were pending assessment at the time of search and therefore normal assessments under s.153A r.w.s. 143(3) of the Act would be possible in accordance with law subject however to the findings on plea towards all assessment orders being antedated are bad in law and non-est." 28. In view of the facts discussed in the foregoing and the above judicial precedents, we are of the considered view additions/disallowances made by the AO on account of alleged on-monies/cash received on sale of flats & car parks in the Shiromani Project was clearly beyond the scope of authority vested under section153A of the Act owing to absence of any incriminating material or evidence deduced as a result of search conducted at the premises of the assessee in so far as unabated assessment for AY 2013- 14 is concerned. 29. With regard to the documents ID marked MSL/23 Pages 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid finding of fact by the Ld CIT(A). Therefore we find that the aforesaid factual finding of the Ld. CIT(A) crystallizes and therefore we do not see any reason to interfere with the order of the Ld. CIT(A) on this matter and confirm the finding of Ld. CIT(A) (supra) and accordingly hold that the documents ID marked MSL/23 Pages 1 to 3, MSL/8 Page 13, SJ/MHD/MZ Page 2 and MSL/21 Page 32 to 36 also did not constitute incriminating material or evidence qua the assessee. 31. Coming next to the additions made u/s 68 & 69C in the hands of the assessee and M/s IQCIPL (since merged into the appellant company), the AO for justifying the addition had referred to the statements of so-called entry operators recorded by different officers of Income-tax Department between the years 2013 to 2015. The Ld. AR pointed out that none of the statements referred to by the AO, justifying the additions made in the assessment order were recorded in the course of search conducted against the assessee on 22.06.2016 or in any proceedings connected with the said search. It is noted from the assessment order that the AO has stated that these statements and data were obtained by him from departmental database ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Hon'ble Supreme Court decision in Andaman Timber Industries in Civil Appeal No. 4228 of 2006). In the circumstances we find merit in the Ld. AR's claim that the third party statements relied upon by the AO without even recording their statement and allowing the assessee to cross examine, cannot justify the additions u/s 68 & 69C and the statements cannot be said to be incriminating material or documents found and/or collected in the course of search conducted against the assessee and so, cannot be used against the assessee. 32. For the above finding of ours, we rely on the decision rendered by the coordinate Bench of this Tribunal in the case of Bankatesh Synthetic Pvt Ltd Vs ACIT in IT(SS) No. 142/Kol/2018 dated 24.04.2019. In this decided case also the AO had made additions by way of unexplained share capital in assessment framed u/s 153A of the Act. The basis of the addition was the third party statements of alleged entry operators who had purportedly admitted of providing accommodation entries to the assessee. On appeal the Ld. CIT(A) confirmed the order of the AO. Before this Tribunal the question which came up for consideration was whether addition made by the AO u/s 68 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies of Banktesh Group. 2.A search and seizure operation was conducted in the case of Banktesh Group on 29/05/2012 and the assessee company was covered in the search warrant. 3.Thereafter again on 02/03/2016 a search and seizure operation was conducted in the case of Banktesh Group and the assessee company's name was covered in the search warrant. IT SS) A No. 142/Kol/2018 A.Y 2010-11 M/s. Banktesh Synthetics Ltd 4.Pursuant to the search operation a notice u/s 153A of the Act was issued to the assessee for A.Y. 2010-11 and in response the assessee filed the Return of Income on 10/12/2016 declaring a total income of ₹ 5,98,550/- 5.Assessment u/s 153A/143(3) of the Act was completed on 31/12/2017 assessing the total income at ₹ 56,23,550/- and raised consequential demand of ₹ 28,25,940/-. In the assessment order the ld. ACIT, Central Circle--3(2), Kolkata (A.O.) made the following additions to the assessee's income. a. Addition u/s 68 of the Act on account of share capital- ₹ 50,00,000/- b. Addition of alleged expenditure on commission paid - ₹ 25,000/- For raising the share capital u/s 69C. Total ₹ 50,25,000/- 6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 139 (1) of the Act was submitted by the assessee company on 12.10.2010. The said Return of income of the assessee was processed under section 143(1) of the Income Tax Act, 1961, on 14.04.2011. Before us, the assessee is in appeal for assessment year 2010-11, which was completed on 14.04.2011. We note that after completion of original assessment dated 14.04.2011, for A.Y.2010- 11, a search and seizure operation was conducted in the case of Banktesh Group on 29.05.2012 (first search) and the assessee company was covered in the search warrant, therefore, A.Y.2010-11 is an unabated assessment. Consequent upon the said search operation, assessment u/s 153A r/w 143(3) of the Act was completed on 30.03.2015 and no adverse inference was drawn in the said assessment order regarding the share capital raised during the previous year relevant to the A.Y. 2010-11. Thereafter, again on 02.03.2016, a search and seizure operation (second search) was conducted in the case of Banktesh Group and the assessee company's name was covered in the search warrant. Pursuant to the search operation, a notice u/s 153A of the Act was issued to the assessee for A.Y. 2010-11 and in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld CITA that there is absolutely no incriminating materials found during the course of search regarding the share capital and share premium received by the assessee company during the year under appeal except the fact that the modus operandi of raising of such capital was discovered in the search action. We find that the ld CITA was only harping on the admission made by certain parties at the time of search without corroborating the same with material evidences found during the course of search. In this regard, the instructions issued by the Central Board of Direct Taxes (CBDT in short) in F.No.286/2/2003-IT(Inv) dated 10.3.2003 would be relevant to be looked into wherein it is mentioned that while recording statement during the course of search and seizure and survey operations, no attempt should be made to obtain confession as to the undisclosed income. For the sake of convenience and clarity, the relevant instructions dated 10.3.2003 issued by CBDT is reproduced hereunder:- To All Chief Commissioners of Income tax (Cadre Contra) & All Directors General of Income Tax Inv. Sir, Sub:- Confession of additional Income during the course of search & seizure and survey operation - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l i.e. MSL/HD/1 referred to by the AO for justifying the disallowance of ₹ 15,07,993/- in respect of cash payments made to Mr. Proloy Mondal and Mr. Satyendra Singh towards professional fees and purchases respectively. The Ld. AR of the assessee invited our attention to the fact that Mr. Proloy Mondal and Mr. Satyendra Singh were the employees of the assessee through whom these cash payments were made to various parties. According to him, each individual payment was however less than ₹ 20,000/- per day and therefore no disallowance was warranted. Taking us through the cash books attached at Page Nos. 1123 to 1264 of PB- 2, he explained that the statement made out by the AO at Pages 263 to 267 of the assessment order from MSL/HD/1 formed part of the regular books and all these expenses were recorded in the books. The Ld. CIT(A) also found that the assessee has given cogent reason that the entries are duly accounted for in the books. Before us the Ld. CIT, DR was unable to dislodge the aforesaid factual finding of the Ld. CIT(A) that the entries are duly accounted for in the books and we also note that no grounds of appeal has been preferred by the revenue challenging thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent based on which the AO inferred payment of onmonies of ₹ 4,81,38,000/- is dated 2010 [year] and therefore we found that no adverse inference could have been legally drawn qua the relevant AY 2013-14 under consideration. It was further noted that Shri Satyam Bubna, from whose premises the documents were seized, had denied the Department's version of the contents of these documents. In his statement recorded u/s 132(4) of the Act, Shri Bubna had stated on oath that these documents were merely rough calculations prepared by him and did not represent actual transaction. He also affirmed that all the payments were made only through account payee cheques and no cash transactions were made by him. We further note from the reply dated 02-02-2020 gathered by the assessee in response to the RTI query made from the AO of Satyam Bubna HUF, goes on to show that the AO of the third party Satyam Bubna HUF had not made any addition on account of alleged undisclosed cash payments made upon purchase of flat & car park from the appellant/assessee. The orders passed u/s 143(1) of the Act in the case of M/s Satyam Bubna HUF for AYs 2010-11& 2013-14 are found placed at Pages 382 to 393 of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on-monies alleged to have been received from M/s Satyam Bubna HUF, have no legs to stand and has to necessary fall. Moreover we note that the AO had made independent enquiries from all the flat purchasers in the 'Shiromani' Project and despite such enquiries, the AO did not find any statement/material or transaction which would in any manner suggest let alone prove that the other flat purchasers had paid any part of the consideration in cash/ onmonies over and above the declared sale consideration. In absence of any such material (oral or documentary) therefore, we find merit in the Ld. CIT(A)'s conclusion that the extrapolation made by the AO was per-se arbitrary and un-reasonable, therefore he rightly deleted the addition made. On this score, these grounds of the Revenue fail. Additionally, we also find merit in the Ld. CIT(A)'s reliance on the following decisions holding that the theory of extrapolation cannot be applied on mere theoretical or hypothetical basis in absence of any incriminating & corroborative evidence or material brought on record by the AO to warrant the same. (A) C.J. Shah & Co., [2000] 246 ITR 671 (Bombay H.C.) "3. It is well-settled that in cases where ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d making an exorbitant addition of ₹ 64.83 crores on the basis of surmises and conjectures. However, assessee contended that CIT(A) was correct to the extent of holding that assessee was regularly following project completion method of accounting and these three projects were incomplete till asst. yr. 2008-09, no receipt, whether in cheque or cash was taxable for asst. yr. 2008-09. 5. … …. …. We find that AO has summarized on-money receipts of seized document RM-1 and even this document is enclosed in assessee's paper book at pp. 101 to 111. We find that the assessee vide letter dt. 28th Dec., 2009 filed before AO, pointed out following defects/inconsistencies in seized documents RM/5 and according to assessee which proved that same were manufactured by search party at the time of search and did not represent actual state of affairs………We find that AO rejected assessee's plea that seized papers were forcibly manufactured by search party at the time of search on the pretext that the said issue had been raised after 22 months from the date of search and furthermore there was no evidence that Sri Vivek Kathotia was forced to wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial evidence on record……Therefore, we agree with the findings of CIT(A) that assessee was following project completion method of accounting, therefore all the amounts whether allegedly received in cash or by cheque were taxable in the years in which the projects were completed. In regard to extrapolating of noting in RM/5, the same cannot be applied to other projects, because on-money would fructify into income or partake the character of income only in the year of completion of project in accordance with project completion method of accounting followed by assessee. The undisclosed income, if any, had to be computed in accordance with the method of accounting followed by assessee and not in the year of receipt in accordance with cash system of accounting. 7. Further, Hon'ble Rajasthan High Court in the case of CIT v. Rajendra Prasad Gupta [2001] 248 ITR 350/117 Taxman 507 wherein Hon'ble High Court observed that under the scheme of provisions for block assessment it is apparent that it related to assessment of ''undisclosed income'' of assessee excluding incomes subjected to regular assessment in pursuance of returns filed by assessee for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case held that both ITO and Tribunal in estimating the GP rate on sales of the assessee did not act on any material but acted on pure guess and suspicion and therefore it was a fit case for the exercise of the power of the Supreme Court under Art. 136 of the Constitution of India. 10. In the present case before us, we find that assessee was following project completion method of accounting and these projects were incomplete during the year under consideration. Even if it is assumed that AO was justified in extrapolating the noting in RM/5, no income from other projects could be recognized for asst. yr. 2008-09. We are of the view that on-money would fructify into income or partake the character of income only in the year of completion of the project in accordance with the project completion method of accounting followed by the assessee. The AO was not justified in extrapolating few notings of RM/5 to balance flats of other three projects given that no incriminating evidence pertaining thereto was found during the course of search and even authenticity of document RM/5 was under challenge. Under these circumstances, we are of the view that Revenue as well as assessee were b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppears that after the post search inquiry, two of the purchasers of the residential flats in the housing projects of the assessee have confessed to have given ₹ 9Lakhs and ₹ 5.10 Lakhs to assessee in a statement recorded under s.131 of the Act. The AO on the basis of such statements at its command, proceeded to make estimation of probable unaccounted receipt from sale of residential flats in respect of all the flats sold during the year. Applying the theory of extrapolation to remaining 87 flats on the basis of statement recorded in respect of the two flats, the AO arrived at an estimated on-money receipt of ₹ 5,28,13,355/- in the hands of the assessee. After giving credit for the amount already disclosed in the search proceedings amounting to ₹ 2 Crore, the AO made an addition of remaining amount of ₹ 3,28,13,355/- in the hands of the assessee. 8.1 In the first appeal, the CIT(A) found merit in the plea of the assessee that suo motu disclosure conceded in the course of search proceedings was without any incriminating material towards any clandestine income. The disclosure was made to buy peace and avoid protracted litigation. The CIT(A) also opined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y material which could expose the falsehood in the records of the assessee despite drastic action of search. Therefore, we are unable to subscribe to the view taken by the AO for exercise of the power in a manner most beneficial to the Revenue and consequently most adverse to the assessee in total disregard of fairness in its action. From its submissions before lower authorities, the assessee has clearly demonstrated that it has repeatedly asked for cross examination of the witnesses against him. The department was thus duty bound to produce its witness for cross examination more particularly when no other tangible material is shown to be available to implicate the assessee. In the absence of any corroborating evidence and in the absence of cross examination offered, the statement of third party cannot be taken cognizance of, as it will apparently lead to miscarriage of justice. Therefore, we find total justification in the action of the CIT(A) in directing the AO to delete the estimated additions towards unaccounted receipt in respect of flats sold on the basis of some unverified and bald statement. Once such statements of the purchasers are taken out of reckoning, the edifice of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not point out any judgment to the contrary and in favour of the Department in this regard. It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment of the Hon'ble Delhi High Court in the case of Principal CIT versus Smt. Anita Rani reported in 392 ITR 501 (Delhi). Another judgment of the jurisdictional High Court to the point is Principal CIT versus Kurele Paper Mills (Private) Limited reported in 380 ITR 571 (Delhi). Therefore, in view of the finding of fact by the Ld. CIT (Appeals) that incriminating material found in respect of the scrap sales amounted to ₹ 20,73,211/- only and further in view of the judgments of the Hon'ble Delhi High Court as aforementioned, we find no reason to interfere with the findings of the Ld. CIT (Appeals) on this issue and we, accordingly, dismiss ground No. 2 of the Department's appeal. 39. For the reasons set out above therefore, the Ground No. 1 of the Revenue's appeal stand dismissed. 40. Now we proceed to decide the issue (C), which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness) 42. The Ld. AR submitted that (a) the identity of loan creditor stood established by the very fact that the names, addresses of the lenders, PAN numbers, bank details and confirmatory letters were filed before both the lower authorities, (b) creditworthiness stood proved by the financial statements, bank details and payment by account payee cheques and (c) the genuineness of the transaction was established by the details of interest paid, TDS deducted thereon, brokerage paid to the finance brokers for arranging the loans, loan confirmations and also the MCA data evidencing that all the lenders were existing and active companies. The Ld. AR thus argued that the appellant had placed on AO's record sufficient material and evidences to discharge its onus for establishing the identity and creditworthiness of the loan creditors and the genuineness of the transaction. He pointed out that none of the documentary evidences filed by the appellant/assessee were found defective nor any falsity or infirmity in the documents filed by it could be pointed out the AO. The Ld. AR submitted that the additions u/s 68 & 69C of the Act were made primarily on the basis of the statements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. 1,00,00,000 10,70,137 2 Venkatesh Vyapaar Pvt. Ltd. 25,00,000 73,973 3 Sanwaria Marketing Pvt. Ltd. 1,50,00,000 10,99,726 4 Narantak Dealcomm Pvt. Ltd. 2,00,00,000 6,44,384 5 Remahay Stores Pvt. Ltd. 2,06,00,000 9,87,024 6 Satyam Vyapaar Pvt. Ltd. 3,13,00,000 18,69,140 7 Shaily Sales & Services Pvt. Ltd. 1,00,00,000 2,89,315 8 Romanchak Merchandise Pvt. Ltd. 50,00,000 3,53,424 9 Speed Business Pvt. Ltd. 1,00,00,000 4,99,726 10 Reetal Vyapaar Pvt. Ltd. 1,50,00,000 1,21,644 11 Sri Durga Minerals Pvt. Ltd. 80,00,000 9,03,616 12 Vicky Fincon Pvt. Ltd. 5,75,00,000 34,03,068 13 Aastha Tradelink Pvt. Ltd. 25,00,000 1,04,384 14 Nagancheji Credit Pvt. Ltd. 25,00,000 2,74,520 15 Desire Vincom Pvt. Ltd. - 5,49,863 16 City Wings Courier & Travels Pvt. Ltd. 50,00,000 3,45,205 17 Dayanidhi Vyapaar Ltd. 25,00,000 84,658 18 Orbital Contractors & Fin. 25,00,000 1,96,438 19 PCJ Finvest Pvt. LTd. 30,00,000 84,822 20 Samrat Finvestors Pvt. Ltd. 50,00,000 3,30,411 21 Seema Holdings Pvt. Ltd. 4,62,50,000 26,66,959 22 Pragya Commodities Pvt. Ltd. 35,00,000 1,63,726 23 Postitive Management Pvt. Ltd. 50,00,000 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also paid brokerage to the tune of ₹ 1.98 crores to these finance brokers for securing the loans and in the assessment order framed against the assessee, the AO did not disallow the payment of brokerage paid for availing the services of those finance brokers for arranging the loans. 45. Moreover, from the assessment order it is discerned that the AO made independent enquiries from some of these loan creditors. From the information set out at Pages 23 to 25 of the assessment order, it is noted that summons were issued u/s 131 of the Act to loan creditors at Serial No.1 to 33 above. And out of the 33 loan creditors, lenders at Serial No.1 to 7 had responded to the notices, notices were served on lenders at Serial No.8 to 15 but no reply was received and the notices sent to the lenders at Serial No.16 to 33 remained un-served. We note that the AO did not make any enquiries whatsoever from the loan creditors mentioned at Serial Nos.34 to 52. According to AO, the nonattendance and/or non-service of the summons indicated that the transactions with the loan creditors were not genuine. 46. From the material on record, it is noted that the transactions in question involved receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, creditworthiness and genuineness of the transactions. Presence of creditor before the AO in such case is a Rule of Prudence to repel the doubts if any in the mind of the AO. However, in this case on hand we note that the appellant/assessee had furnished the requisite documentary evidences; to substantiate the loan creditors' identity, creditworthiness and genuineness of the transactions. Having received these documents, the AO was not able to point out as to which other documentary proof was required or expected by him, which had not been submitted by the appellant/assessee, or found any infirmities on these documents. On these facts and in our considered view therefore the adverse inference drawn by the AO u/s 68 and 69C of the Act solely on the premise that the summons went non-complied or remained unserved was not justified. 48. At this juncture, we may gainfully refer to the observations made by the Hon'ble Apex Court in a similar case of CIT Vs Orissa Corporation Ltd reported in 159 ITR 78, which are reproduced hereunder as follows: "In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 68 by the Revenue Department shall remain confined to the transactions, which have taken place between the assessee and the creditor nor does the wording of section 68 indicate that section 68 does not authorize the Revenue Department to make inquiry into the source(s) of the credit and/or sub-creditor. The language employed by section 68 cannot be read to impose such limitations on the powers of the Assessing Officer. The logical conclusion, therefore, has to be, and we hold that an inquiry under section 68 need not necessarily be kept confined by the Assessing Officer within the transactions, which took place between the assessee and his creditor, but that the same may be extended to the transactions, which have taken place between the creditor and his sub-creditor. Thus, while the Assessing Officer is under section 68, free to look into the source(s) of the creditor and/or of the sub-creditor, the burden on the assessee under section 68 is definitely limited. This limit has been imposed by section 106 of the Evidence Act which reads as follows: "Burden of proving fact especially within knowledge.- When any fact is especially within the knowledge of any person, the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee to find out the source of money of his creditor or of the genuineness of the transactions, which took between the creditor and subcreditor and/or creditworthiness of the sub- creditors, for, these aspects may not be within the special knowledge of the assessee. " ********** " ... If a creditor has, by any undisclosed source, a particular amount of money in the bank, there is no limitation under the law on the part of the assessee to obtain such amount of money or part thereof from the creditor, by way of cheque in the form of loan and in such a case, if the creditor fails to satisfy as to how he had actually received the said amount and happened to keep the same in the bank, the said amount cannot be treated as income of the assessee from undisclosed source. In other words, the genuineness as well as the creditworthiness of a creditor have to be adjudged vis-a-vis the transactions, which he has with the assessee. The reason why we have formed the opinion that it is not the business of the assessee to find out the actual source or sources from where the creditor has accumulated the amount, which he advances, as loan, to the assessee is that so far as an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, such failure, as a corollary, could not have been and ought not to have been, under the law, treated as the income from the undisclosed sources of the assessee himself, when there was neither direct nor circumstantial evidence on record that the said loan amounts actually belonged to, or were owned by, the assessee. Viewed from this angle, we have no hesitation in holding that in the case at hand, the Assessing Officer had failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub-creditors, had actually been received by the sub-creditors from the assessee. In the absence of any such evidence on record, the Assessing Officer could not have treated the said amounts as income derived by the appellant from undisclosed sources. The learned Tribunal seriously fell into error in treating the said amounts as income derived by the appellant from. undisclosed sources merely on the failure of the sub-creditors to prove their creditworthiness." 50. Further the Hon'ble jurisdictional Calcutta High Court in the case of S.K. Bothra & Sons, HUF v. Income-tax Officer, Ward- 46(3), Kolkata (347 ITR 347)also held as follows: "15. It is now a settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other portion of the same. The judicial propriety and fairness demands that the entire judgment both favourable and unfavourable should have been considered. By not doing so the Tribunal committed grave error in law in upsetting the judgment in the order of the Commissioner of Income-tax (Appeals). 9. In this connection he has drawn our attention to a decision of the Supreme Court in the case of UdhavdasKewalram v. CIT [19671 66 ITR 462. In this judgment it is noticed that the Supreme Court as proposition of law held that the Tribunal must In deciding an appeal, consider with due care, all the material facts and record its finding on all the contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. 10. We find considerable force of the submissions of the learned counsel for the appellant that the Tribunal has merely noticed that since the summons issued before assessment returned unserved and no one came forward to prove. Therefore, it shall be assumed that the assessee failed to prove the existence of the creditors or for that matter the creditworthiness. As rightly pointed out by the learned counsel that the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence, the judgment and order of the Tribunal is not sustainable. Accordingly, the same is set aside. We restore the judgment and order of the Commissioner of Income-tax (Appeals). The appeal is allowed." 52. The Ld. AR's reliance on the decision of the Hon'ble Gujarat High Court in the case of CIT Vs Apex Therm Packaging (P) Ltd reported in 42 taxmann.com 473 is also found to be of much relevance. In this decided case in the course of proceedings u/s 143(3) of the Act, the assessee had furnished complete details of loan creditors along with their PAN, financial statements, loan confirmations, bank statements etc. The AO however added the entire loan received u/s 68 of the Act and also disallowed the interest paid thereon. On appeal the Ld. CIT(A) allowed the assessee's appeal which was also affirmed by this Tribunal. On appeal by the Department u/s 260A, the Hon'ble High Court observed that when full particulars, inclusive of the confirmation with name, address, PAN, IT returns, balance sheet & profit and loss account in respect of all the lenders were furnished and that it has been found that the loans were received through cheques, then the AO was not justified in making add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived through cheques and the loan account were duly reflected in the balance sheet of lenders. The CIT(A) has further held once the onus was fulfilled by the assessee, it was for the Assessing Officer to examine and bring any material on record which may help in rebutting the onus of assessee. The Assessing Officer has not brought any material on record in its support. The CIT(A) while deleting the addition has also relied on the decision of the Hon'ble Gujarat High Court in the case of Dy. CIT v. Rohini Builders [2002] 256 ITR 360 and the decision of Hon'ble Supreme Court, in the case of Orissa Corpn. Ltd. 153 ITR 78. Before us, nothing has been brought on record by the revenue to controvert the findings of CIT(A). Revenue has relied on the decision of Hon'ble Delhi High Court in the case of N.R. Portfolio (supra). We however find that the ratio of the aforesaid Delhi High Court decision are distinguishable on facts and therefore cannot be applied to the facts of the present case. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus dismiss this ground of revenue." 6. We are in complete agreement with the reasoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in the cases of creditors at serial Nos. 1, 2, 4, 5, 6, 7, 9, 10, 11, 12 and 16. In the remaining cases where the assessment orders passed were not readily available, the assessee has furnished the copies of returns filed by the creditors with the Department along with their statement of income. All the loans were received by the assessee by account payee cheques and the repayments of loans have also been made by account payee cheques along with the interest in relation to those loans. It is rather strange that although the Assessing Officer has treated the cash credits as nongenuine, he has not made any addition on account of interest claimed/paid by the assessee in relation to those cash credits, which has been claimed as business expenditure and has been allowed by the Assessing Officer. It is also pertinent to note that in respect of some of the creditors the interest was credited to their accounts/paid to them after deduction of tax at source and information to this effect was given in the loan confirmation statements by those creditors filed by the assessee before the Assessing Officer. Thus it is clear that the assessee had discharged the initial onus which lays on i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs under section 69. 8. Further, we may point out that section 68 under which the addition has been made by the Assessing Officer reads as under : "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 9. The phraseology of section 68 is clear. The Legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income-tax as the income of the assessee of that previous year. In this, case the legislative mandate is not in terms of the words "shall be charged to income-tax as the income of the assessee of that previous year". The Supreme Court while interpreting similar phraseology used in section 69 has held that in creating the legal fiction the phraseology employs the word "may" and not "shall". Thus the unsatisfactoriness of the explanation does not and need no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuineness of the lender by furnishing the documents & details which it was required to maintain in the normal course and under law and therefore the addition made u/s 68 of the Act was deleted by the Hon'ble High Court. The relevant findings of the Hon'ble High Court are as follows: "12. The Court has examined the decision of the Gauhati High Court in Nemi Chand Kothari (supra). Therein the Gauhati High Court referred to Section 68 of the Act and observed that the onus of the Assessee "to the extent of his proving the source whom which he has received the cash credit." The High Court held that the AO had ample 'freedom' to make inquiry "not only into the source(s) of the creditor, but also of his (creditor's) subcreditors and prove, as a result, of such inquiry, that the money received by the Assessee, in the form of loan from the creditor, though routed through the sub-creditors, actually belongs to, or was of, the assessee himself." Thereafter, the High Court, on a harmonious construction of Section 106 of the Evidence Act and Section 68 of the Act, held as under: "What, thus, transpires from the above discussion is that while Section 106 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-creditor and/or creditworthiness of the sub-creditors, for, these aspects may not be within the special knowledge of the Assessee." (Emphasis Supplied) 13. The above observations, far from supporting the case of the Revenue, does the opposite. In the subsequent decision of this Court in Mod. Creations (P.) Ltd. v. ITO [2013] 354 ITR 282/[2011] 202 Taxman 10 (Mag.)/13 taxmann.com. 114 (Delhi), the position was clarified by the Court and it was held: "It will have to be kept in mind that Section 68 of the I.T. Act only sets up a presumption against the Assessee whenever unexplained credits are found in the books of accounts of the Assessee. It cannot but be gainsaid that the presumption is rebuttable. In refuting the presumption raised, the initial burden is on the Assessee. This burden, which is placed on the Assessee, shifts as soon as the Assessee establishes the authenticity of transactions as executed between the Assessee and its creditors. It is no part of the Assessee's burden to prove either the genuineness of the transactions executed between the creditors and the subcreditors nor is it the burden of the Assessee to prove the creditworthiness of the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case is concerned, the Assessee has indeed discharged its onus of proving the creditworthiness and genuineness of the lender (TIL). There was no requirement in law for the Assessee to prove the genuineness and creditworthiness of the sub-creditor, which is in this case was TCL. 56. In the light of the aforesaid decisions of the Hon'ble Apex Court and jurisdictional and other High Courts, let us now examine the facts of the present case. From the analysis of the loan creditors we note that during the FY 2012-13, the appellant had received loans aggregating to ₹ 11,97,00,000/- from eight parties set out at Serial No.12, 13, 14, 29, 31, 35 & 36 of Table from whom the loans were received in the earlier years as well to whom interest of ₹ 71,60,833/- was paid. Besides, the appellant had paid interest of ₹ 1,06,48,905/- to 19 parties at Serial No. 15, 32, 33, 37 to 52 of the Table in respect of loans brought forward from the earlier years. We note that no addition u/s 68 of the Act in respect of the loans brought forward from the earlier years was made in the past assessments. In the circumstances therefore we find that if in the past assessments, the Revenue di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the applicant having indulged in any jamaKharchi transaction. Further, the department did not afford the applicant company any opportunity to cross examine Mr. Kejriwal though the hearings of scrutiny assessments were held on 11 different dates. Being a tainted person Mr.Kejriwal's unilateral statement should not be relied upon without putting the same to the test of further scrutiny. (iii) During the course of hearing, it was submitted by the AR that if these are the only jama kharchi transactions, the normal tendency of any person is to carry the entries for a long periods, and normally, there will not be any repayment in a short period. It was also submitted by him that not only the money has been borrowed from these parties, but the repayment has also been made by cheque, and the interest on the same has also been paid by cheque, on which the TDS has also been deducted. (iv) The CIT, ITSC, vide his letter dt. 31.03.2014 requested the applicant to file the copy of complete accounts along with the details of interest on TDS deducted, the details were filed by the applicant on 3.4.2014. It was submitted by the AR that the applicant and its group is not acquainted with Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, PAN, address, financial statements, bank details, loan confirmations and MCA data to substantiate genuineness of the loan transaction. On receipt of the relevant documents, the AO did not thereafter conduct any further verification of the documents or independent enquiry from the loan creditor. We also find that no notice u/s 131 or 133(6) of the Act was issued to M/s Earthlink Estates Pvt Ltd though the address of the creditor was made known. We also note that unlike other cases, where the AO had relied on third party statements of entry providers to justify the addition, the AO did not bring on record any material which would even suggest let alone show that the loan received from M/s Earthlink Estates Pvt Ltd was in the nature of accommodation entry or that the loan was not genuine. In this factual background therefore we find that the addition had been made by the AO simply on surmise and conjecture and without bringing on record any tangible and cogent material which proved that the loan received from M/s Earthlink Estates Pvt Ltd was not genuine. Applying the ratio discussed in Paras 48 to 55 above, we hold that the appellant had discharged the primary onus of proving ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the AO was able to show any credible link between the person whose statement was relied upon and the company from whom the loans were received by the appellant/assessee. The Ld. AR has pointed out to us that the so-called entry operators were not even shareholders or directors of the loan creditor companies. We also note that although the AO had heavily relied upon the statements of the sundry creditors/entry operators, the AO had neither personally or independently examined even a single entry operator in the capacity as the Assessing Officer to verify the correctness of the facts or to dig or probe and unearth the link if any with the Appellant/assessee. However, the unfortunate part is that the AO blindly relied on the bald statements of these operators and in the process has not brought out any link to connect them with the Appellant/assessee. And if the AO wanted to use the statements of the so-called entry operators, then the AO during the assessment proceedings ought to have summoned these entry operators and examined them thoroughly and should have unearthed the links, materials or relevant evidences if any against the appellant/assessee and thereafter called the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Limited as beneficiary of accommodation entries provided by him. We also note that while recording statement u/s 131 of the Act, Shri Anirban Dutta was asked to identify the parties to whom he had provided accommodation entries in form of share capital/loans. From his answers extracted at Page 58 & 59 of the assessment order, we note that though he identified the groups/parties to whom he provided accommodation entries but none of the parties or groups identified inter alia included the name of Shri Sanjay Jhunjhunwala or Mani Square Limited. As stated earlier, the AO before he relied upon the statement of Shri Anirban Dutta as evidence, he himself never issued notice u/s 131 or 133(6) of the Act to Shri Anirban Dutta and examined him to ascertain the facts regarding the appellant's case, particularly when no information contained in his statement dated 16.11.2015 connected the loan transactions of the appellant/assessee with M/s Narantak Dealcomm Pvt. Ltd., M/s Remahay Stores Pvt. Ltd., M/s Satyam Vyapaar Pvt. Ltd. and M/s Shaily Sales & Services Pvt. Ltd. The statement of Shri Anirban Dutta which was available in the public domain an year before search was conducted in assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of which any prudent person instructed in law would have reached the conclusion that the loans received by the appellant from M/s Sharma Hire Purchase Limited had any connection with Shri Anuj Bhukediwala. Moreover, when the AO himself never examined the socalled entry operator or opportunity of cross examination of Shri Anuj Bhukediwala was given to the assessee, the AO erred in relying on the statement. So, we find that the addition made by the AO by relying on such statement was erroneous and, therefore, the addition was untenable on facts and in law. (C) The assessee received loan of ₹ 50,00,000/- from M/s Romanchak Merchandise Pvt Ltd. According to AO this body corporate was allegedly controlled by Shri B D Agarwal whose statement was recorded u/s 133A of the Act on 09-04-2015 at 21, Hemanta Basu Sarani, Kolkata - 700 001. This fact also shows that the statement of Shri B D Agarwal was not recorded in pursuance of any proceedings against the assessee and in connection with search u/s 132 conducted upon the appellant on 22-06-2016. Instead the statement of Shri B D Agarwal was recorded in some other proceedings unconnected with the appellant's search. From the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i B D Agarwal's statement was never tested on the touch stone of cross examination. Therefore, the addition made by AO on the basis of Shri B. D. Agarwal was erroneous, so it is untenable. (D) The assessee received loans aggregating to ₹ 4,67,00,000/- from M/s Lavanya Nirman Pvt. Ltd., M/s Kasturi Home Pvt. Ltd., M/s Himadri Enclave Pvt. Ltd., M/sTista Nirman Pvt. Ltd. and M/s Orbital Contractors & Financiers Pvt Ltd. According to AO all the loan creditors were allegedly controlled by Shri Pankaj Agarwal whose statement was recorded u/s 131 of the Act on 03-02-2015 at 138B Manicktala Main Road, Kolkata - 700 054. From the foregoing facts it is evident that the statement of Shri Pankaj Agarwal was not recorded in pursuance of any proceedings against the appellant/assessee in connection with search u/s 132 conducted upon the appellant on 22-06-2016. From the contents of the statement extracted at Pages 126 to 129 of the assessment order, we note that he had stated that he was providing accommodation entries only till the year 2011 and thereafter he was engaged in the business of producing films. This fact, on its face, itself suggests that the loans obtained by the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act on 24-02-2014 at 88 Regent Park, Tollygunge, Kolkata - 700 040. It is noted that even this statement was not recorded in pursuance of any proceedings against the assessee/appellant in connection with search u/s 132 of the Act conducted upon the appellant on 22-06-2016. It is noted from the contents of the statement selectively extracted at Pages 147 to 148 of the assessment order that he had admitted that previously he was involved in providing accommodation entries but now he was rendering accounting services. It is further observed that in his answer to Q No. 18, he has admitted of providing accommodation entries to three bodies corporate, none of which figures the name of Shri Sanjay Jhunjhunwala or Mani Square Limited or the loan creditor M/s. Susri Finance Pvt. Ltd. We thus note that the selective extracts of the statement did not contain any assertion/admission/material whatsoever on the basis of which any prudent person instructed in law would have reached the conclusion that the loans received by the appellant from M/s Susri Finance Pvt Ltd. had any connection with Shri P K Jain. Moreover when the AO himself never examined the so-called entry operator, nor opportunit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to AO this body corporate was controlled by Shri R K Ajitsaria whose statement was recorded u/s 131 of the Act on 21-05-2014 at AA/2/2, Rajarhat Road, Miranda Appt, Baguihati, Kolkata - 700 059. This fact shows that the statement of Shri R K Ajitsaria was not recorded in pursuance of any proceedings conducted against the appellant/assessee in connection with search u/s 132 conducted upon the appellant on 22- 06-2016. Instead the statement of Shri R K Ajitsaria was recorded in some other proceedings unconnected with the appellant's search. From the contents of the statement extracted at Pages 189 to 191 of the assessment order, we note that nowhere in his statement Shri R K Ajitsaria had admitted of providing accommodation entries in form of unsecured loans. On perusal of the entire statement it is noted that he had admitted of providing accommodation entries in form of bogus commodity profits. In his answer to Q Nos. 8, 9 & 10 he had set out the modus operandi followed by him for providing accommodation entries in the form of bogus commodity gains/losses through a commodity brokerage entity controlled and managed by him. Neither did he admit of providing accommodation entries i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs to advance loans to the appellant on the ground the financial positions revealed by the audited accounts of the respective loan creditors did not prove their capacity and ability to advance such loans. We however find that before rejecting the financial ability of the loan creditors, the AO did not carry out the objective analysis of the financial strength and net worth of the loan creditors from their audited accounts. This fact can be analyzed from the following facts, which the Ld. CIT(A) cited in his impugned appellate order. (A) In respect of loans received from M/s Nikhar Dealers Pvt Ltd, apart from relying on the statement of Shri Amit Dalmia, both the AO and the Ld. CIT(A) fortified the addition on the ground that the financial position revealed by its Profit & Loss Account and Balance Sheet did not establish the creditworthiness of the loan creditor. In support of this conclusion, the AO set out the salient financial details at Page31 of the assessment order. We note that the conclusions drawn by the AO were based on mere suspicion and conjectures and not supported by the overall financial data available from the audited accounts. In order to decide the financial capa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. We note from the financial statements of M/s Majestic Commercial Pvt Ltd for the year ended 31st March 2013, the capital & reserves as on 31.03.2013 were ₹ 38.11 crores. The total loans & advances granted by the company were ₹ 37.87 crores. Out of such loan portfolio, the loan given to the appellant was only ₹ 2,50,00,000/- which in percentage terms amounted only to 6.60%. During the FY 2012-13, the creditor had earned interest income of ₹ 1,62,75,613/- from its loan portfolio which inter alia comprised of interest of only ₹ 4,62,329/- received from the appellant. The net profit of the company for the relevant year was ₹ 65,78,979/- against which provision for tax of ₹ 20.77 lacs was provided for by the loan creditor. From the foregoing facts and figures, it is evident that the loan creditor was engaged in the business of money lending and it had substantial business activities as well as reasonable profitability. On these facts therefore we are unable to accept the AO's conclusion that M/s Majestic Commercial Pvt Ltd did not have the requisite financial capacity to grant loan to the appellant. (C) It is noted that the AO had treated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly lower. We also note that the interest paid by the appellant was accounted in the books of the loan creditor and before payment of interest, the tax was duly deducted u/s 194A of the Act. Having regard to the totality of the facts and circumstances of the case therefore, we do not find merit in the conclusion of the lower authorities that the loan creditors did not have financial credentials to advance loans and on that ground justify the addition u/s 68 & 69C of the Act. 66. As far as the decisions cited by the Ld. CIT(A) in his impugned appellate order for upholding the additions made u/s 68 & 69C of the Act are concerned, we have examined the facts involved in each of these judgments and found them to be materially different from the facts involved in the present case, for the following reasons: (A) As far as the decision of Hon'ble Calcutta High Court in the case of CIT Vs Precision Finance Pvt Ltd reported in 208 ITR 465 is concerned, it is noted that in this decided case, the income tax file numbers of the creditors provided by the assessee were either found to be non-existent or did not tally with the Department's records. It is on this fact that the Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had received share application monies on private placement. By its very nature, the shares of private limited companies are transacted between the small circle and therefore the Court held that it was unnatural for the shareholders who continued to have stake in the company did not cooperate with the Department and provide the requisite evidences as called for. In the present case however, as noted earlier, the relationship was that of the debtor-creditor and which had ceased to exist when the loans were fully repaid. As such it was not a case of continued relationship at the time when the enquiries were conducted by the AO. We therefore do not find merit in the reliance placed by the Ld. CIT(A) on these decisions for upholding the addition. 67. For the aforesaid facts and the reasons discussed in the foregoing therefore we hold that the addition of ₹ 24,76,50,000/- being principal loan amount received by the appellant from twenty four bodies corporate did not constitute its income chargeable u/s 68 of the Act. Consequently, for the same reason we also do not find any justification in sustaining the disallowance of ₹ 1,41,11,013/- being the interest on such loans u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested supra, we find that the AO has accepted the statements recorded by some other officers of the Department in some unconnected proceedings and believed it as gospel truth against the appellant/assessee and relying on it proceeded to draw inference against the appellant, even though there was nothing contained in these statements which would in any manner suggest that the entry providers had any relation or connection with the appellant or that they had provided accommodation entries to the appellant/assessee. Be that as it may be, if these statements of the so-called entry operators somehow triggered suspicion in the mind of the AO in relation to appellant's loan transactions with the bodies corporate, then as said earlier the AO was duty bound to conduct enquiry independently from the said persons and not simply rely on the statements recorded by some officers of the Department in unconnected proceedings admittedly behind the back of assessee and cannot be used against the assessee without testing it on the touch stone of cross-examination. The AO is no doubt an authority appointed by the State to exercise statutory powers to ascertain the income of a subject and the tax payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll relevant documentary evidences which it was ordinarily required to maintain in the regular course of business, whereas on the other hand, the Revenue had denied the opportunity of cross examination to the appellant. The Ld. CIT(A) therefore held the purchases to be acceptable and deleted the disallowance made by the AO. On the self-same reasoning this Tribunal and later on the Hon'ble High Court also dismissed the appeal of the Revenue. On further appeal, the Hon'ble Supreme Court also concurred with the findings of the Ld. CIT(A) and did not find any infirmity in the orders passed by the lower appellate authorities and accordingly dismissed the appeal of the Revenue. The relevant portion of the judgment of the Hon'ble Supreme Court reads as under: "3. However, on going through the judgments of the CIT, ITAT and the High Court, we find that on merits a disallowance of ₹ 19,39,60,866/- was based solely on third party information, which was not subjected to any further scrutiny. Thus, the CIT (Appeals) allowed the appeal of the assessee stating: "Thus, the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for consultancy charges paid to one S, a Consultant. On the basis of statement recorded from S, in the course of search conducted u/s 132 of the Act, the AO held that S. did not render any service to the assessee and therefore the deduction claimed for consultancy charges paid was not allowable. The Tribunal held that the disallowance; based solely relying on the statement of S, recorded in the course of search without there being any independent material was not justified. On appeal by the revenue the Hon'ble Bombay High Court upheld the order of the Tribunal. In this judgment, it was thus in principle held that unless and until there is a corroborative evidence or material to substantiate the statement of a third party, it is not open for the Tax Authorities to draw conclusions against the assessee solely based on the statement recorded in the course of search. The relevant findings of the Hon'ble High Court are as follows: "Question Nos.1 and 2 are elements of the same issue and relate to the addition of ₹ 3.39 crores (rounded off) made by the Assessing Officer by disallowing expenditure of the said sum incurred by the respondent-assessee in form of payments to one Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d registered document and the value has been accepted as to correct by registering authority to the charge of stamp duty. There was no material or evidence that any on money was paid by the appellant on the transaction. Ld. A.O. had not referred this land to the DVO for determining the market value on date of registration. The statement given by Vikas A. Shah was self service statement without any supporting evidence. There was no search carried out on the appellant. The seized papers were found in the possession of Shri Vikas A. Shah. The third person evidence cannot be base for addition on the basis of any entries therein. The ld. CIT(A) had also considered following decisions. I. Prathana Construction (P.) Ltd. v. Dy. CIT [2001] 70 TTJ 122 (Ahd.) II. Asstt. CIT v. Prabhat Oil Mills [1995] 52 TTJ 533 (Ahd.) III. Jindal Stainless Ltd. v. Asstt CIT [2009] 120 ITD 301 (Delhi) After considering all the facts and legal position of this issue, we do not find any reason to intervene in the order of the CIT(A). Accordingly, we uphold the order of the CIT(A)." 6. It is required to be noted that the order passed by the ITAT in the case of the copurchaser- Abhalbhai Arja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with M/s. B.C. Purohit & Company and a member of the group and has drawn inference regarding providing accommodation entries and the assessing officer was of the view that details made available by the assessee as regards unsecured loans and share application money, reference of which has been made in para-4 of its order, appears to be the accommodation entries and the present assessee was middle man and invoking Sec.68 of the Act, it was considered to be part of the income in the hands of the assessee. However, on appeal preferred before the Commissioner (Appeals) by the assessee U/s 143(3) r/w 147 of the Act, 1961 all the factual statements were examined at length and the Commissioner (Appeals), after due appreciation of material which came on record, observed that from independent enquiry the copies of bank account were obtained by the assessing officer and found that for clearing of the cheques issued by these companies either cash was deposited in the same account or in another account of the group company in fact was M/s. B.C. Purohit of which the present assessee was considered to be one of the group member. However, it was further observed that summons issued U/s 131 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on record any credible evidence/material which could show that the appellant had routed its unaccounted monies in the form of bogus loans. In fact the AO himself never examined any one of the persons whose statements were relied upon by him in the assessment order nor did he grant the appellant/assessee an opportunity to cross-examine the witnesses whose statements were extracted in the assessment order. Except the bald references to the recorded statements, the AO did not bring on record any material which could link the appellant with any wrong doing as held by him that the assessee's unaccounted monies were introduced in the garb of unsecured loans. For the reasons set out in foregoing, we are of the considered view that the AO's failure to personally examine the witnesses and his denial to allow the appellant opportunity to cross examine the third parties/Departmental witnesses on whose statements he was relying upon was a serious and fundamental error which resulted in the additions as well as the action of AO to point out any material and irrelevant to justify the addition made u/s 68 & 69C of the Act in the assessment order untenable and so it cannot be sustained. 75. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould enquire from the Assessing Officer of the creditor as to the genuineness of the transaction and whether such transaction has been accepted by the Assessing officer of the creditor but instead of adopting such course, the Assessing officer himself could not enter into the return of the creditor and brand the same as unworthy of credence. So long it is not established that the return submitted by the creditor has been rejected by its Assessing Officer, the Assessing officer of the assessee is bound to accept the same as genuine when the identity of the creditor and the genuineness of transaction through account payee cheque has been established." 76. For the reasons as discussed in the foregoing, the additions of ₹ 39,73,50,000/-& ₹ 3,20,13,463/- made u/s 68 & 69C of the Act in the hands of the appellant therefore stand deleted. 77. We further note that in the impugned order the Ld. CIT(A) upheld the additions of ₹ 2,15,00,000/- & ₹ 25,76,219/- being loan received & interest paid by M/s IQCIPL [since merged with the appellant] on the ground that the factual matrix of the addition was same as in the case of the appellant. Since in the foregoing paragra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPL) which according to the Ld. AR was an incurable defect u/s. 292BB of the Act and as a consequence, the assessment order passed by the AO dated 31.12.2018 in the name of M/s. IQCIPL was non-est in the eyes of law, since M/s. IQCIPL is a non-existing /expired entity in the eyes of law from the appointed date i.e. on 01.04.2015 and, therefore, assessment order framed after issuance of invalid mandatory statutory notice u/s. 143(2) of the Act is null in the eyes of law and, therefore, AO's order in respect of non-existing entity is void in the eyes of law and, therefore, has to be quashed. The Ld. Counsel for the appellant, in this regard, relied on the decision of the Hon'ble Supreme Court in the case of M/s. Saraswati Industrial Syndicate and M/s. Spice Infotainment Ltd. He therefore urged us to quash the additions made by the AO to the tune of ₹ 2,15,00,000/- u/s. 68 of the Act and ₹ 25,76,219/- u/s. 69C of the Act in the relevant AY 2013-14 and likewise for AYs 2014-15 and 2015-16. 80. Per contra, the Ld. CIT, DR vehemently opposed the argument of the Ld. Counsel for the assessee and submitted that the assessment has been passed by the AO in the name of "M/s IQ Cit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged/ amalgamated / dissolved is ab initio void and bad in law. Once it is found that the notice assuming jurisdiction is issued in the name of a non-existent entity, then the assessment framed consequent thereto, is non-est in the eyes of law. In this case, the mandatory notice to scrutinize the assessment of the amalgamated company (appointed date of amalgamation dated w.e.f. 01.04.2015) u/s. 143(2) of the Act was issued on 05.10.2018 in the name of the already amalgamated company/non-existing entity [M/s IQCIPL] was void ab initio and therefore, the AO usurped without jurisdiction to assess the non-existing entity (M/s. IQCIPL). So the framing of assessment u/s. 143(3) of the Act without assuming valid jurisdiction is null in the eyes of law. It is settled law that the issuance of mandatory notice in the name of a non-existent entity is an incurable defect and cannot be treated as a procedural irregularity and section 292BB of the Act cannot come to the rescue of revenue. Instead it is a jurisdictional defect which renders the proceedings / assessment non-est in the eyes of law. This legal proposition finds support in the judgments of the Hon'ble Supreme court in the case of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that, since the cause title of the assessment order bore the names of both amalgamating company M/s. IQCIPL and the name of amalgamated company, M/s. MSPL, the assessment order shall survive and cannot be held to be bad in law. In this regard, we note that this identical argument was taken by the Revenue before the Hon'ble Supreme Court in the case of CIT Vs Maruti Suzuki India Limited reported in 416 ITR 613 wherein the Hon'ble Apex Court dealt with it as follows: "17. Mr Zoheb Hossain, learned Counsel appearing on behalf of the appellant submitted that: (i) The High Court was not justified in quashing the final assessment order under Section 143 (3) only on the ground that the assessment was framed in the name of the amalgamating company, which was not in existence, ignoring the fact that the names of both the amalgamated company and the amalgamating company were mentioned in the assessment order; (ii) Even on the hypothesis that the assessment order was framed incorrectly in the name of the amalgamating company, it would amount to a "mistake, defect or omission" which is curable under Section 292B when the assessment is, "in substance and effect, in conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly 'amalgamation' does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury's Laws of England (4th edition volume 7 para 1539). Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity." (iv) Fourthly, upon the amalgamating company ceasing to exist, it cannot be regarded as a person under Section 2(31) of the Act 1961 against whom assessment proceedings can be initiated or an order of assessment pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice which was non existing entity on that day. In such proceedings an assessment order passed in the name of M/s Spice would clearly be void. Such a defect cannot be treated as procedural defect. Mere participation by the appellant would be of no effect as there is no estoppel against law. 12. Once it is found that assessment is framed in the name of non-existing entity, it does not remain a procedural irregularity of the nature which could be cured by invoking the provisions of Section 292B of the Act." Following the decision in Spice Entertainment, (supra) the Delhi High Court quashed assessment orders which were framed in the name of the amalgamating company in: (i) Dimension Apparels (supra); (ii) Micron Steels; and (supra) (iii) Micra India (supra). 21. In Dimension Apparels, (supra) a Division Bench of the Delhi High Court affirmed the quashing of an assessment order dated 31 December 2010. The Respondent had amalgamated with another company and thus, ceased to exist from 7 December 2009. The Court rejected the argument of the Revenue that the assessment was in substance and effect in conformity with the Act by reason of the fact that the assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist as a result of the approved scheme of amalgamation, the jurisdictional notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation. Participation in the proceedings by the appellant in the circumstances cannot operate as an estoppel against law. This position now holds the field in view of the judgment of a coordinate Bench of two learned judges which dismissed the appeal of the Revenue in Spice Enfotainment (supra) on 2 November 2017. The decision in Spice Enfotainment has been followed in the case of the respondent while dismissing the Special Leave Petition for AY 2011-2012. In doing so, this Court has relied on the decision in Spice Enfotainment (supra). (emphasis supplied) 85. In view of the above ratio decidenti of the Hon'ble Apex Court and judicial precedents (supra), the assessee succeeds on the legal issues raised as additional grounds and since in this case, the mandatory notice to scrutinize the assessment of the amalgamated company (appointed date of amalgamation dated w.e.f. 01.04.2015) u/s. 143(2) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical to the additional grounds raised in AY 2013-14. Following our reasons and conclusions drawn in AY 2013-14 at Para 78 to 85, we hold that the assessment order framed in the name of M/s. IQCIPL was without jurisdiction and so assessment framed is non-est and null in the eyes of law and, therefore, all the additions made against M/s. IQCIPL which were confirmed by the Ld CIT(A) stand deleted. The additional grounds of assessee are accordingly allowed. IT (SS) No. 60/Kol/2019 (Assessee's Appeal - A.Y 2015-16 as well as ground No. 2 of Revenue appeal) 91. Ground Nos. 1,12,13 and 14 are general in nature and therefore does not call for any specific adjudication. 92. Ground Nos. 2 to 5 of the assessee appeal are against the addition of ₹ 1,29,07,228/- confirmed by the Ld. CIT(A) on account of cash/on-monies allegedly received by the appellant on sale of Flat Nos. 23EA and 24EA in its 'Swarnamani Project'[Another Project] , which was made on the basis of on-monies/cash alleged to have been received from Shri S S Patodia and Ground No. 2 of the Revenue's appeal in IT (SS) No.76/Kol/2019 is connected with the same issue. The Revenue's ground No 2 is against the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertone Dealcom Pvt. Ltd. and other companies at 3A, Hare Street, Kolkata on 22.06.2016: Date Main A/c Sub A/c Received Paid R. Balance Remarks 22nd May Flat Booking Mani Square Ltd 32,43,038 97,63,547 A/c Swarnamani 22nd May Flat Booking Mani Square Ltd 32,10,576 65,52,971 A/c Swarnamani 22nd May Flat Booking Mani Square Ltd 32,43,038 33,09,933 A/c Swarnamani 22nd May Flat Booking Mani Square Ltd 32,10,575 99,358 A/c Swarnamani Ans: Sir, these transactions refer to amount paid to Mani Group of Companies in cash against the two flats that I purchased from Mani Group in Swarnmani .Initially Mani Group demanded ₹ 2000/- per sq. fl. in cash for each of these two flats I purchased, but because of my old business relation I requested Mani Group to reduce this rate and finally rate was fixed to₹ 1400/- per sq. ft. that i needed to pay in cash for these two flats my group companies purchased from Mani Group of Companies. I have paid the amounts in cash aggregating to approx.₹ 1.29 crore on 22.05.2014 to Shri. Sanjay Jhunjhunwala of Mani Group, Kolkata. Q.17 Kindly explain whether the transactions referred in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing built-up area of 4758 sq ft was booked by M/s Kalamunj Height Pvt Ltd and M/s Kalamunj Construction Pvt Ltd vide Agreement for sale dated 08-03-2014. The AO added the following sums by way of, paid by the purchasers to the appellant over and above the declared sale consideration. Flat Paid 23EA 32,43,038 23EA 32,10,576 24EA 32,43,038 24EA 32,10,575 TOTAL 1,29,07,228 96. The above data was gathered from a cash book impounded from the business premises of M/s Overtone Dealcom Pvt Ltd and the edifice of the impugned addition is the above statement of Shri S S Patodia. From the orders of the lower authorities, it is noted that the contents of above extracted statement of Shi S S Patodia has been taken to be gospel of truth for justifying the impugned addition. This action of the lower authorities has been challenged by the appellant/assessee as untenable both factually as well as legally. It is true that Section 132(4A) read with Section 292C of the Act, raises a presumption that that the contents of books of account and other documents seized during the course of search is true. But it should be kept in mind that this presumption is only qua the person who i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Received Date of Payment Balance Amount deposited as TDS during 21013-14 (1) (2) (3) (4) (5) (6) (7) 32,10,576 32,106 30.05.2014 31,78,470 31,58,626 22.05.2014 19,844 32,10,576 32,106 30.05.2014 31,78,470 31,58,626 22.05.2014 19,844 32,43,038 32,430 30.05.2014 32,10,608 31,87,646 22.05.2014 22,962 32,43,038 32,430 30.05.2014 32,10,608 31,87,646 22.05.2014 22,962 1,29,07,228 1,29,072 1,27,78,156 1,26,92,544 85,612 98. It is noted that each figure of 'Gross Amount Paid' in Column (1) fully tallies with each of the figures mentioned in the alleged cash book found in SSP/HD/MZ/2. The period of payment reconciles as well. It is noted that these payments were received on 30- 05-2014 which is much prior to the date of search, i.e. 22-06-2016 and the receipts are corroborated by the entries in the bank statements, therefore it cannot be termed as an after-thought action. It is further observed that the AO in this regard had made independent enquiry from UCO Bank u/s 133(6) of the Act, which in response, also affirmed the explanation put forth of the assessee. The appellant has also furnished copy of the Form 26AS which also shows that these amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made by the various group companies is enclosed herewith. The balance amount was either outstanding or adjusted with TDS. Sir, I confirm that I have made payment of ₹ 1,26,92,544/- by banking channel and not by cash. And out of balance amount of ₹ 2, 14, 6841- (1,29,07,228 - 1,26,92,544 = 2,14,684) the sum of ₹ 1,29,072/-was the TDS amount and ₹ 85, 612/- was the outstanding balance. Sir, we request your honour to verify the same from our bank statement. " 100. In the above letter dated 20-12-2018, Shri S S Patodia has thus affirmed that the sum of ₹ 1,29,07,228/- was paid via banking channel after deducting tax at source, which finding of fact we have already recorded supra at para 98, which now stands further corroborated. The statement of Shri S. S. Patodia recorded on 05.08.2016 pursuant to survey in his premises is infirm because it has been obtained by pressure/coercion from the Officer (DDIT) and due to inadvertence (mistake of fact). Accordingly, not only do we find the statement of Shri S. S. Patodia after survey to be factually erroneous and obtained by coercion, so it cannot be acted upon or relied upon and therefore, in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt upheld the findings of the Tribunal. The Hon'ble High Court held that the addition made by the AO by merely relying on the statement given by the seller was untenable in law and thereby upheld the order of this Tribunal and the Ld. CIT(A). The relevant findings of the Hon'ble High Court are as follows: 5. We heard counsel. The seller had initially given conflicting statement about the sale consideration he received. When confronted by the Revenue on 11-12-1998, the seller admitted that he had deposited ₹ 4.10 lakhs received through draft in the bank and the rest amount was held by him in cash. The Revenue authorities could well have seized the cash invoking section 132 of the Act, but for obvious reasons this was not done. Had the cash been seized from the seller, the matter would have been concluded in favour of the Revenue. In a subsequent submission, the seller claimed on 20-11-2000 that he had paid ₹ 15 lakhs out of the sale proceeds to settle old family debts, ₹ 4.80 lakhs for construction of house in Pullkasi Village and the balance was advanced to parties for keeping ₹ 2 lakhs and ₹ 3 lakhs in the house for family expenses and educational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. In view of the foregoing conclusions, we find no error in the order of the Income-tax Appellate Tribunal and requires no interference. Hence no substantial questions of law arises for consideration of this Court. Accordingly, the above tax case is dismissed." 102. It is material to mention here that the Revenue went in further appeal before the Hon'ble Supreme Court. The Hon'ble Apex Court in its judgment reported in 294 ITR 49 did not find any infirmity in the order of the Hon'ble High Court. 103. We may also make useful reference in this regard to the decision of the Chennai Bench of this Tribunal in the case of M.M. Financers (P) Ltd Vs Dy CIT reported in 17 SOT 5. In the decided case search actions were conducted at business premises of assessee and also at premises of a known business associate, 'KM'. From the premises of 'KM' an unsigned MOU between the assessee and five others on one hand and 'KM' and 'KMR' firm on the other, was found wherein transaction for purchase of 95 acres of land for a total consideration of ₹ 2,40,40,000/- was reflected. The AO however noted that the amount of purchase consideration of land disclosed by the assessee in its books was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the original statement of 'KM' to prove as to why the original statement alone should prevail. The addition made by the AO was thus deleted in full. 104. In view of the corroborative facts and evidences brought on record by the appellant which showed that the payment of ₹ 1,29,07,228/- was actually received in cheque (para 98 & para 100 refers)and the ratio laid down in the judicial precedents (supra), we do not find merit in the Ld. CIT(A)'s action of confirming the addition of ₹ 1,29,07,228/- by way of alleged on-monies received upon sale of Flat Nos. 23EA and 24EA u/s 68 of the Act. The AO is accordingly directed to delete the same. Ground Nos. 2 to 5 of the assessee's appeal succeeds and therefore stands allowed in favour of the assessee and against the Revenue. 105. As a consequence of the above discussion and the finding of fact recorded in para 98 & para 100 supra , the Revenue's ground No 2 against the Ld. CIT(A)'s action of deleting the addition of ₹ 43,04,39,751/- made by the AO u/s 68 of the Act, by extrapolating unaccounted sales across all units sold by the appellant in Swarnamani Project, on the sole basis of the addition made on account of on-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the notice issued u/s 143(2) of the Act was issued to M/s IQCIPL, a non-existent entity consequent to its amalgamation with the appellant pursuant to the order of the Hon'ble Calcutta High Court dated 06-03-2017. After considering the rival submissions, it is observed that these additional grounds are identical to the additional grounds raised in AY 2013-14. Following our conclusions drawn in AY 2013-14 at Paras 78 to 84, we hold that the assessment order framed is without jurisdiction since AO issued mandatory notice u/s 143(2) of the Act in the name of M/s IQCIPL is non-est and therefore null in the eyes of law and, therefore, all the additions made against M/s. IQCIPL which were been confirmed by the Ld CIT(A) stand deleted. The legal issue raised by assessee as additional grounds succeeds and are accordingly allowed. IT (SS) No. 76/Kol/2019 (Department's Appeal - A.Y 2015-16) 109. Ground No. 2 of the Revenue's appeal has already been dealt with along with the Ground Nos. 2 to 5 of the assessee's appeal in IT (SS) No.60/Kol/2019. For the reasons set out in Para 91 to 105 above, this ground of the Revenue stands dismissed. 110. Ground No. 1 of the revenue is against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue has come up with the present appeal. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1 st April, 1988. Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal." 113. In view of the aforesaid decision of the Hon'ble Calcutta High court, we are of the view that Ld. CIT(A) has rightly allowed the deduction in respect of employee's contribution to PF & ESI which had been admittedly remitted on or before the due date for filing the return of income u/s. 139(1) of the Act. Therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CFO of the appellant. The AO further referred to another calculation sheet which was impounded with ID mark Page 112 of MSL/27. Relying on these loose papers, the AO concluded that the appellant was entitled to received interest from Abasan Realty (controlled by Hari Sharma) which was not accounted in the books of the assessee. According to AO the right to receive interest had accrued during the relevant year and therefore added interest of ₹ 1,93,75,000/- computed for the period 01.11.2014 to 31.03.2015 to the total income of the appellant on the ground that the appellant regularly followed mercantile system of accounting. 115. On appeal, the Ld. CIT(A) sought a remand report from the AO on this issue wherein the AO stated that the impugned interest was rightly assessed to tax on accrual basis, since according to him the appellant had legal right to receive interest in the relevant year. The Ld. CIT(A) however did not agree with the AO's findings. According to Ld. CIT(A) merely because the arbitrators had directed Shri Hari Sharma to pay compensation calculated @ 15% by itself was not sufficient to result in accrual of income to the appellant. The Ld. CIT(A) observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant/assessee had acquired the legal right to receive interest. In our considered view, such presumption drawn by the AO was clearly not borne out from the facts on record. 118. From the facts on record, it is abundantly clear that M/s Abasan Realty LLP did not perform its obligation agreed in the sub-lease agreement for which dispute was referred for arbitration/reconciliation to fellow builders. It is noted that even after the award of the fellow builders, M/s Abasan Realty LLP did not act on the same. Neither did it pay the interest which it was/is required to pay within 31-10-2015 nor did it ensure that the bottlenecks in construction are removed and the work resumed. Instead, the construction got suspended and no payment was ever made to the appellant by either M/s Abasan Realty LLP or Shri Hari Sharma. In the circumstances it is erroneous to hold that the appellant/assessee could have been able to realize interest from M/s Abasan Realty LLP or Shri Hari Sharma in real terms. Further such compensatory interest determined in terms of an award, by its very nature is such that unless the payment is actually received from the defaulter, one cannot estimate its chances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t's contention that the interest calculated by the CFO of the appellant on loose papers did not represent 'real' income of the appellant and hence the same was rightly not recognized as income in the books by the appellant. 121. Useful reference in this regard may be made to the decision of the jurisdictional Hon'ble Calcutta High Court in the case of Sri Kewal Chand Bagri Vs CIT reported in 183 ITR 207. In the decided case, the assessee had advanced interest bearing loan to its father. Due to setback in father's business, the loan itself had become doubtful. In the circumstances the assessee did not recognize notional interest income on such doubtful loan. The AO however rejected the assessee's claim and added interest income since the assessee followed mercantile system of accounting. On appeal the Hon'ble High Court upheld the assessee's claim stating as follows: "In the instant case, it was true that the assessee had been maintaining his accounts on the basis of mercantile system of accounting. The interest income might have accrued according to the mercantile system, but the issue had to be viewed in the context of commercial and business realities of the situation. The fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner was right in deleting the said addition made by the Income-tax Officer and the Tribunal had rightly held that the claim at the increased rates as made by the assessee-company on the basis of which necessary entries were made represented only hypothetical income and the impugned amounts as brought to tax by the Income-tax Officer did not represent the income which had really accrued to the assessee-company during the relevant previous years. The High Court, in our opinion, was in error in upsetting the said views of the Tribunal." [Emphasis supplied] (p. 757) 5. The relevant observations of this court in Goyal M.G. Gases (P.) Ltd.'s case (supra) are as under : "Applying the law laid down by the Supreme Court, what has to be seen in the present case is whether there was any real accrual of interest to the assessee. Both the CIT(A) as well as the Tribunal came to the conclusion that there was real accrual of interest. It has been noted that the interest had not even been recorded by the assessee in its books of account. The assessee had also issued a notice to the parties under section 138 of the Negotiable Instruments Act for dishonour of cheques issued by al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the considered view that the Ld. CIT(A) had rightly deleted the addition of ₹ 1,93,75,000/- made by the AO on account of interest allegedly receivable from Shri Hari Sharma. It is noted that neither there was any enforceable award nor any claim was raised by the appellant. There is also no material on record which shows that Shri Hari Sharma acknowledged his liability for payment of interest. It is further taken note that Shri Hari Sharma has not paid any interest to the appellant. On these facts and circumstances, we hold that no 'real income' accrued to the appellant and hence no addition on account of interest receivable was warranted in the given facts of the case. Accordingly, this ground of the Revenue stands dismissed. IT (SS) No. 61/Kol/2019 (Assessee's Appeal - A.Y 2016-17) 124. Ground No. 1,8, 9 and 10 are general in nature and therefore does not call for any specific adjudication. 125. Ground Nos. 2 to 7 of the appeal relates to the additions of ₹ 2,55,00,000/- and ₹ 1,09,91,452/- made u/s 68 & 69C of the Act. After considering the rival submissions, it is observed that, except variation in figures, the reasoning adopted both by the AO & Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y 2017-18) 131. Ground No. 1,7,8,9 and 10 are general in nature and therefore does not call for any specific adjudication. 132. Ground Nos. 2 to 6 of the appeal relates to the additions of ₹ 67,50,000/-and ₹ 1,33,74,309/- made u/s 68 & 69C of the Act. After considering the rival submissions, it is observed that, except variation in figures, the reasoning adopted both by the AO & Ld. CIT(A) to justify these additions is verbatim same as in AY 2013-14. 133. Following our conclusions recorded in Paras 43 to 77, while deciding Ground Nos. 6 to 11 of assessee's appeal in A.Y. 2013-14, we hold that the additions of ₹ 67,50,000/- & ₹ 1,33,74,309/- u/s 68 & 69C of the Act are also untenable on facts and in law. We therefore allow the Ground Nos. 2 to 7 raised by the assessee and direct the AO delete the impugned additions made u/s 68 & 69C of the Act. IT (SS) No. 78/Kol/2019 (Department's Appeal - A.Y 2017-18) 134. Ground No. 1 of the revenue is against the action of Ld. CIT(A) in holding that employees' contribution deposited by employer beyond due date is an allowable deduction. After considering the rival submissions, it is observed that the issue i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no. 122 of the assessment order, wherein the (MSL-8 page 15) has been scanned and reproduced, we note that it is a hand written 'parchi' written under the heading 'Swarnamani'. The scribbling on the loose sheet of paper states the name of Manoj Rathi, amount ₹ 10 lacs on account of servant quarter is seen which was marked on the top as 15. On a perusal of the same, AO was of the opinion that one servant quarter was sold to one Manoj Rathi who was a customer in the Swarnamani project for ₹ 10 lacs and the same transaction has not been recorded in the regular books of account, so the AO added it. So, we note that the AO has made the addition based on this fact that from a perusal of MSL-8 page 15 it reveals that the assessee has received sale consideration of ₹ 10 lacs on the sale of servant quarter to a customer Manoj Rathi without entering it in the regular books of account, so, according to AO, it was the undisclosed sale consideration of the servant quarter received by the assessee on 21.06.2016. However, the ground of appeal raised by the revenue reads as under: "4. On the facts and circumstances of the case, the Ld. CIT(A) is not justified in law as well a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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