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TMI Blog2023 (4) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 69A have been invoked for A.Y 2015-16 which is under consideration because u/s 69A of the Act, addition can be made in the year in which asset etc is found and since no such asset was found during the course of search, section 69A of the Act cannot be applied to the alleged loss. The transaction sheet extracted in the body of the assessment order shows that it pertained to M/s Rajlaxmi Commodities Pvt Ltd and not to the assessee. Therefore, if any person needs to be questioned about the impugned loss is M/s Rajlaxmi Commodities Pvt Ltd and not the assessee. The entire addition has been made merely on surmises and conjectures and hypothesis. Moreover, we fail to understand how the statement recorded on 29.12.2015 is relevant for the search conducted on 07.04.2017. In fact, in his statement itself, in reply to question Nos. 22 and 24, Shri Naresh Aggarwal has categorically stated that all transactions were recorded in the books of account of M/s Rajlaxmi Commodities Pvt Ltd and in reply to Question Nos. 25 and 32, Shri Naresh Aggarwal has stated that profit and loss of USR ID 3 pertained to M/s Rajlaxmi Commodities Pvt Ltd. The undisputed fact is that income from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the orders were still being placed on the directions of Sh. Sanjay Singhal. 5. The Ld. CIT(A) has erred on facts and in law in ignoring that Sh. Naresh Kumar Aggarwal has categorically stated that any profit/loss in the trades were settled by actual movement of funds. 6. The Ld. CIT(A) has erred on facts and in law by stating that a profit of Rs. 11,35,85,032/-was made in the transactions, thus there was no motive for taking accommodation entries, but, in actuality, there was a loss of Rs. 11,35,85,032/- in the concerned AY. 7. (a) The Order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. - 4. Peculiar facts are that a search and seizure, and survey operation u/s 132/133A of the Income-tax Act, 1961 [the Act, for short] were conducted by the Investigation Wing of the department on 07.04.2017 in Sharp group of cases. The premises of the assessee were also covered and, accordingly, statutory notices were issued and served upon the assessee. 5. During the course of survey operation u/s 133A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue, protective addition was made in the hands of Sharp group u/s 69A r.w.s 115BBE of the Act. 13. Additions were challenged before the ld. CIT(A) wherein the first challenge was in respect of assessment framed u/s 153A r.w.s 143(3) of the Act on the ground that a completed assessment could not have been reopened, as no incriminating material was found during the course of search. 14. Second challenge was in respect of invoking provisions of section 69A of the Act. Evidentiary value of statement of Shri Naresh Aggarwal was also challenged. 15. It was strongly contended that the impugned transactions have not been undertaken in the name of the assessee at MCX portal but have been undertaken by the said company in its own name in its proprietary account and loss or profit arising thereon has been recorded in the books of account and return of income of M/s Rajlaxmi Commodities Pvt Ltd. It was brought to the notice of the ld. CIT(A) that these transactions were neither undertaken in the name of the assessee nor have been recorded in the books of account of the assessee nor loss has been claimed in the return of income by the assessee. Thus, the assessee has not taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction between the broker and the assessee was also rejected by the ld. CIT(A) who found that during the course of search on 07.04.2017 and also during the course of survey on 30.12.2015 in the premises of the assessee and broker, no such evidence indicating cash receipt or payment was found. 24. The ld. CIT(A) finally concluded by holding that addition of Rs. 11,35,85,032/- cannot be made on substantive basis in the hands of Shri Sanjay Singhal nor on protective basis in the hands of Sharp Group. 25. Before us, the ld. DR strongly supported the findings of the Assessing Officer and once again heavily relied upon the statement of Shri Naresh Aggarwal which is extracted in the body of the assessment order. 26. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 27. We have given thoughtful consideration to the orders of the authorities below. The undisputed fact is that the substantive as well as protective additions have been made u/s 69A r.w.s 115BBE of the Act. Therefore, it would be pertinent to understand the provisions of section 69A of the Act, which read as under: Unexplained money, etc. 69A. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained to M/s Rajlaxmi Commodities Pvt Ltd and not to the assessee. Therefore, if any person needs to be questioned about the impugned loss is M/s Rajlaxmi Commodities Pvt Ltd and not the assessee. 32. We are of the considered view that the entire addition has been made merely on surmises and conjectures and hypothesis. Moreover, we fail to understand how the statement recorded on 29.12.2015 is relevant for the search conducted on 07.04.2017. In fact, in his statement itself, in reply to question Nos. 22 and 24, Shri Naresh Aggarwal has categorically stated that all transactions were recorded in the books of account of M/s Rajlaxmi Commodities Pvt Ltd and in reply to Question Nos. 25 and 32, Shri Naresh Aggarwal has stated that profit and loss of USR ID 3 pertained to M/s Rajlaxmi Commodities Pvt Ltd. 33. The undisputed fact is that income from the same transaction USR 3 for A.Y under consideration has been accepted by the department as income of M/s Rajlaxmi Commodities Pvt Ltd. Therefore, there appears to be no motive behind the allegation that the assessee Shri Sanjay Singhal has taken accommodation entries to reduce his taxable income as he has never claimed any loss in h ..... 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