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TMI Blog2021 (3) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... of search with respect to Assessment Year 2003-04 to Assessment Year 2006-07 and therefore the additions made by the Ld. A.O for all these years in respect of the assessee(s) mentioned in the instant Miscellaneous Application deserves to be deleted. Looking to the peculiarity of the facts and in the interest of justice, it will be fair for both the parties, if this issue is set aside to the file of Ld. A.O for limited purpose of examining the veracity of the submissions made by the Ld. Counsel for the assessee. We accordingly order so and direct the Ld. A.O that after giving necessary and reasonable opportunity of being heard to the assessee(s), should examine, firstly as to whether any incriminating material was found during the course of search for Assessment Year 2003-04 to Assessment Year 2006-07 having any nexus with the additions made and secondly whether the Assessment Year 2003-04 to Assessment Year 2006-07 were falling under the category of concluded and non abated assessments. In case the Ld. A.O finds that Assessment Year 2003-04 to Assessment Year 2006-07 were concluded and non abated assessments and there was no incriminating material found during the course of sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hands of assessee - AO has also identified Asim Ansari to be the same person who was assessed by him simultaneously. But even in case of Asim Ansari also, neither he was examined by AO nor any corresponding income in the hands of the Asim Ansari, as alleged recipient, was ever made. We are of the considered view that the issue raised in Ground No.5 in the case of Arun Sahlot for Assessment Year 2004-05 needs to be set aside to the file of Ld. A.O for afresh examination. On perusal it seems that the additions are based merely on rough jottings and rough diary but still in the interest of justice and fair play we are of the view that the issue needs to be examined afresh by Ld. A.O after providing reasonable opportunity of being heard to the assessee and the Ld. A.O is also directed that in view of the settled judicial precedents and discussions herein above the addition can be made on the basis of the seized diary only if proper nexus is established and same is corroborated with relevant material. If the Ld. A.O is not able to establish any such nexus between the notings in the seized diary and the actual transaction having taken place then no addition deserves to be made and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on two common issues relating to all the assessees of the group which have remained undecided warranting rectification: i. No addition ought to have been made in respect those years where no incriminating material was found as these assessments stood completed u/s. 143(3)/143(1) and were not pending on the date of search. ii. In absence of corroboration by way of independent evidence, no addition ought to have been made in respect of rough notings in the diary found in search. 5. Ld. Counsel for the assessee took us through the impugned orders of this Tribunal in order to show that above stated two issues remained to be adjudicated by this Tribunal even though they were specifically raised in the grounds of appeal filed before this Tribunal. 6. Ld. Departmental Representative was also fair enough to accept this fact that the above stated two issues remained to be adjudicated by this Tribunal. We therefore are of the considered view that the assessee s above captioned Miscellaneous Applications deserves to be allowed to the effect that above stated two issues needs to be adjudicated as there was an apparent mistake in the order of this Tribunal mentioned herein abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmit denovo assessment devoid of any material / evidence, as done by the AO. 9. The ld. AR submitted that the above specific legal grounds remained un adjudicated in all the cases and hence it warrant rectification u/s. 254(2). He further asserted that in case of one of the assessees of the group, Arun Sahlot, in ITA no. IT(SS).A.Nos.186 to 192/Ind/2012 261 to 267/Ind/2012, hon ble Bench has already held that additions in respect of completed assessments should not be made in absence of any incriminating material in view of Special Bench Decision in the cases of All Cargo global vs. DCIT 20 ITJ 45 (Mum.)(SB) and Gurinder singh Bawa in ITA no. 2075/mum/2010 dtd. 16.11.2012. He took us through Para no. 28- 31 at Page 61-65 of the above referred ITAT order of Mr. Arun Sahlot ( the leading case), to demonstrate that the Bench had held that assessment years 2003-04 to 2006-07 were not pending and stood completed on the date of search and hence in respect of deemed dividend, the AO should decide afresh taking in to consideration the legal proposition decided in the case of All Cargo global and Gurinder singh Baba (Supra) . It was stated that, this was done in respect of deemed div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se years. Before us Ld. Counsel for the assessee has demonstrated through the documents placed in the paper book that Assessment Year 2003-04 to Assessment Year 2006-07 with respect to all the assessee(s) mentioned in the instant Miscellaneous Application are concluded and non abated assessments as they have either to be assessed u/s 143(3) of the Act or the time limit for issuance of notice u/s 143(2) of the Act had expired and there was no incriminating material found during the course of search with respect to Assessment Year 2003-04 to Assessment Year 2006-07 and therefore the additions made by the Ld. A.O for all these years in respect of the assessee(s) mentioned in the instant Miscellaneous Application deserves to be deleted. 14. We, however are of the considered view that looking to the peculiarity of the facts and in the interest of justice, it will be fair for both the parties, if this issue is set aside to the file of Ld. A.O for limited purpose of examining the veracity of the submissions made by the Ld. Counsel for the assessee. We accordingly order so and direct the Ld. A.O that after giving necessary and reasonable opportunity of being heard to the assessee(s), sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us the copy of the submissions and argued that this issue also goes to the root of the case and is necessary for correct determination of tax liability of the assessee and having remained undecided, calls for rectification u/s. 254(2) of Income Tax Act, 1961. 17. We have gone through the facts of the case, submissions made by the Ld.AR and have also heard Learned DR on the issue who has supported the order of this Tribunal. 18. We find that this very issue goes to the root of the matter for determination of tax liability of the assessee, has not been decided by the Bench though it was raised by the assessee and hence it warrants rectification u/s. 254(2) of the Income Tax Act, 1961. 19. We observe that two diaries were found from the possession of the assessee namely Arun Sahlot during the course of search conducted on 30.05.2008. The assessee, Arun sahlot, used to live in this house and vacated the same way back in 2003. It remained unguarded for three years and a guard to look after the house was appointed only in 2006.The diary was found in a scrap form from a Bister peti and inventorised as B-3.. Another diary was found from present house of assessee at E3/10, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y would make exactly identical payment to same persons repeatedly. But the AO has added all such entries. Even some proposed receipts were jotted in the notings, which AO has treated as payments. It was contended that the jottings are in round figures further vindicates that these estimated figures were noted only for planning, proposal, business targets, projections etc. It was also explained that no undisclosed source of income or undisclosed cash was found in the search of assessee and only cash of ₹ 15,350/- and jewellery less than 500 gm. was found from assessee during search, which speaks for itself. 23. The Ld. AR also stated that the action of the Ld.AO was whimsical and arbitrary because he accepted plea of the assessee partly that the scribbling are mere business proposals and did not make additions in respect of some of these entries like entry at Diary pg. no. 89, pg.25 / sr. no. 17, pg.48 / sr. no. 9, pg.49 / sr. no. 11, pg.60 / sr. no. 8, pg. 70 / sr. no. 6.It was argued that such casual and arbitrary approach of the AO is impermissible in law as the explanation of the assessee cannot be accepted in part and rejected in part and for this proposition he relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this very significant and important fact oozing out from AO order that the AO claims to have identified so -called recipients of the alleged payments contained in the diary by collecting their addresses and even phone numbers as narrated in his assessment order at Page 55 and 61-65 but he has neither examined any of them nor even tried to take pain to corroborate, much less corroborated, the same by way of independent evidence. 27. Even one employee, Asim Ansari, was simultaneously searched and was simultaneously assessed by same AO and addition on account of three alleged payments to him were made in the hands of assessee to the tune of ₹ 8,25,000 ( 2,00,000 + 3,25,000 + 3,00,000) at Page 46 ( Table) at sr. 8 of AO order. The AO has also identified Asim Ansari at Page 53 of his order/para 3 to be the same person who was assessed by him simultaneously. But even in case of Asim Ansari also, neither he was examined by AO nor any corresponding income in the hands of the Asim Ansari, as alleged recipient, was ever made. 28. Ld. Counsel for the assessee has brought the facts on record to demonstrate that the additions made by the Ld. A.O are merely on the basis of scribbli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not talk to Mr. Samal on the proposal, he dropped the idea. 30. We note that here also, the Ld. AO did nothing to corroborate, much less corroborated, his presumption of undisclosed payment and without finding any adversity in the deposition of the assessee, he went on to make addition only on surmises and conjectures but since we have already set aside the issue of additions made on the basis of seized diary B-3 to Ld. A.O for afresh examination, we are of the view that the issue of additions made at ₹ 2,00,000/- raised by the assessee in Ground No.4 of in IT(SS)A No.192/Ind/2012 which was made by the Ld. A.O on the basis of seized diary marked as A-3 is also set aside to the file of Ld. A.O for fresh examination and is hereby directed to give reasonable opportunity of being heard to the assessee and should make addition only if nexus with corroborative evidence is established between the jottings in the diary with the actual transaction having taken place. 31. In the result all the Miscellaneous Applications filed before us are allowed to the extent of the claim that two common issues remained to be adjudicated by this Tribunal and further the two issues mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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