9911796707
TMI Blog2023 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of ld. Commissioner of Income Tax (Appeals)-11, Pune ['the CIT(A)'] dated 29.07.2022 for the assessment year 2018-19. 2. Since the identical facts and common issues are involved in all the above captioned nine cross appeals, we proceed to dispose of the same by this common order. 3. Briefly, the facts of the case are that the assessee is an individual engaged in the business of dealing in the real estate/property and carrying on business under the name and style of "M/s. Siddhi Properties" (a proprietary concern). The particulars of Returns of Income filed by the assessee u/s 139(1) of the Income Tax Act, 1961 ('the Act') are detailed below :- A.Y. Date of filing of return u/s 139(1) Returned Income 2012-13 30/09/2012 56,72,948 2013-14 30/09/2013 33,93,088 2014-15 30/11/2014 78,36,709 2015-16 29/10/2015 22,27,420 2016-17 15/10/2016 46,95,030 2017-18 02/11/2017 75,91,350 2018-19 09/02/2019 23,53,680 4. The search and seizure operations were conducted in the residential and business premises of the assessee on 04.11.2017. During the course of such search and seizure operations, the Department had found and seized a Diary of 2009 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,33,93,090 1,00,00,000 2014-15 24/01/2019 1,78,36,710 1,00,00,000 2015-16 24/01/2019 22,27,420 NIL 2016-17 24/01/2019 1,46,95,030 1,00,00,000 2017-18 24/01/2019 1,75,91,360 1,00,00,000 2018-19 - - NIL 5. Subsequently, the Assessing Officer had proceeded to frame the assessment u/s 143(3) r.w.s. 153A vide order dated 31.12.2019. 6. Now, we shall take up the appeal of the assessee in IT(SS)A No. 91/PUN/2022 for the assessment year 2012-13 as a lead case for adjudication. IT(SS)A No. 91/PUN/2022, A.Y. 2012-13 - By Assessee : 7. The assessee raised the following grounds of appeal :- "a) The Appellant states that the Assessing Officer erred in treating genuine loans as non- genuine and creating unjust additions on loans u/s 68 of the Income Tax Act, 1961 of Rs. 13,27,54,925/- and the Appellate Authority erred in partially confirming such unjust additions on loans u/s 68 of Rs. 10,11,00.000/-, ignoring the detailed documentary evidence brought on record which clearly shows that loans were received from genuine parties and these amounts were returned with interest from banking channels. b) The Appellant states that the Assessing Officer erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t :- (i) The unsecured loans were received through account payee cheques and also repaid in the same year through RTGS or cheque and also interest was paid on these loans after deducting TDS. The assessee further submitted that the statement recorded during the course of search and seizure proceedings should not to be considered, as it was retracted vide letter dated 06.03.2018 submitted on 07.03.2018 before the DDIT (Investigation), Pune. The assessee also filed confirmation letters received from unsecured loans creditors. Further, it is contended that there is no incriminating material found as a result of search and seizure operations to show that the said loans were bogus, are merely accommodation entries. In the absence of any such incriminating material, no addition u/s 153A can be made, placing reliance on the following judicial precedents :- (i) PCIT vs. Meeta Gutgutia, 257 Taxman 441 (SC). (ii) CIT vs. Gurinder Singh Bawa, 386 ITR 483 (Bom.). (iii) CIT vs. Kabul Chawala, 380 ITR 573 (Delhi). (iv) PCIT vs. Dipak Jashvantlal Panchal, 397 ITR 153 (Guj.). (v) PCIT vs. Best Infrastructure (India) (P.) Ltd., 94 taxman.com 115 (SC). 9. However, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction of sale of property, which had actually not materialized. 11. Then the Assessing Officer based on the notings found in page no.2, 13, 22, 168 of bundle no.1, images of which are reproduced vide page nos. 18, 19, 20 and 21 of the assessment order had concluded that the assessee had paid on-money consideration at the time of purchase of property at Paud Road rejecting the contention of the assessee that the notings made are nothing but a proposal of sale of property and probable schedule of payment etc. However, the Assessing Officer placing reliance on the statement given by the assessee during the course of search and seizure proceedings u/s 132(4), which is reproduced at page no.21 of the assessment order, held that the assessee had received on-money consideration of Rs. 24,00,000/- and brought to tax as unexplained consideration u/s 69 of the Act. 12. Similarly, the Assessing Officer based on the notings found in page no.2, 3, 13, and 168 of bundle no.1 had concluded that the assessee had paid on-money consideration in cash in connection with the purchase of land at Paud Road amounting to Rs. 6,27,20,500/- and brought to tax as unexplained expenditure u/s 69C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after deducting the TDS on the interest, it can be concluded that the loans received are genuine. 14. On due consideration of the above submissions, the ld. CIT(A) held that the retraction of the statement given u/s 132(4) is not valid in law and the retraction is not supported by any cogent material and the statement given by an assessee u/s 132(4) constitutes a primafacie evidence placing reliance on the decision of the Hon'ble Delhi High Court in the case of Bhagirath Aggarwal vs. CIT, 351 ITR 143 (Delhi), in the case of CIT vs. M. S. Aggarwal, 93 taxmann.com 247 (Delhi) and the decision of the Hon'ble Supreme Court in the case of Bannalal Jat Constructions (P.) Ltd. vs. ACIT, 413 ITR 322 (SC). Then the ld. CIT(A) had proceeded to hold that the assessee had failed to prove the genuineness of the creditors placing reliance on the decision of the Hon'ble Supreme Court in the case of Sreelekha Banerjee vs. CIT, 49 ITR 112 (SC) and Sumati Dayal vs. CIT, 214 ITR 801 (SC), decision of the Hon'ble Kerala High Court in the case of M.A. Unneeri Kutty vs. CIT, 198 ITR 147 (Ker.), decision of the Hon'ble Delhi High Court in the case of CIT vs. Nova Promoters and Finlease (P.) Ltd. 342 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 based on the evidence available on record. 15. Being aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us in the present appeal. 16. The ld. Counsel for the assessee submits that as a result of search and seizure actions, no incriminating material was found suggesting the existence of undisclosed income, therefore, in the absence of such incriminating material, no addition can be made in the assessment framed u/s 143(3) r.w.s. 153A of the Act. In this connection, he placed reliance on the following decisions :- (i) PCIT vs. Meeta Gutgutia, 257 Taxman 441 (SC). (ii) CIT vs. Gurinder Singh Bawa, 386 ITR 483 (Bom.). (iii) CIT vs. Kabul Chawala, 380 ITR 573 (Delhi). (iv) PCIT vs. Dipak Jashvantlal Panchal, 397 ITR 153 (Guj.). (v) PCIT vs. Best Infrastructure (India) (P.) Ltd., 94 taxman.com 115 (SC). B. He further submits that the statement given by the assessee during the course of search and seizure proceedings u/s 132(4) has to be considered in its entirety. Drawing our attention to the statement recorded u/s 132(4), which is placed before us at page nos. 1 to 26 of the Paper Book, he submits that the statement given by the assessee does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 410. (ii) Common Cause vs. Union of Inda, 394 ITR 220 (SC). (iii) CIT vs. Girish Chaudhary, 296 ITR 619 (Delhi). 17. On the other hand, ld. CIT-DR submits that the statement given by the assessee during the course of search and seizure operations u/s 132(4) together with the notings in the Diary constitutes an incriminating material and can form the basis for making the addition since the assessee failed to rebut the presumption u/s 132(4A) r.w.s. 292C of the Act. B. As regards, the addition made on account on-money purchase consideration and receipt of on-money consideration, he submits that the notings found in the Diary of 2009 clearly indicates the transaction of unaccounted receipts as well as payments at the time of purchase of property. Therefore, he submits that the orders of the lower authorities are very reasoned and speaking based on the proper appreciation of material on record requires no interference. 18. We heard the rival submissions and perused the material on record. Ground of appeal no.(a), (b) and (c) challenges the addition of unsecured loans of Rs. 13,27,54,925/-. The assessee had raised the preliminary issue that in the absence of any incriminating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be disturbed. Then, we proceed to examine whether or not any incriminating material was found by the Department as result of search and seizure operations. B. On perusal of the assessment order, it would reveal that the entire case of the Assessing Officer is hinged upon the following : (i) Entries found in the Diary in page no.9, 20 to 22 and 83 of bundle no.11 which is found and seized during the course of search and seizure proceedings in the case of assessee. (ii) Statement of the assessee recorded u/s 132(4) of the Act. (iii) Statement recorded by the Directorate of Investigation, Income Tax Department, Kolkata from the Directors control of shell companies based at Kolkata, namely, Shri Praveen Agarwal, Shri Anuj Agarwal and Shri Jeevendra Mishra. C. Now, we shall deal with the notings in the Diary, it is clear that an amount of Rs. 1,09,00,000/- is recorded against "Kolkata". Similarly, at page no.22, entries of Rs. 11,000/- is found against "Kolkata" and page no.83 entries of Rs. 3,60,000/- was found against the "Sushil, Kolkata" on 25.03.2015. D. We have carefully gone through the notings found in the seized material i.e. Diary of 2009. These notings are fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are not clearly and definitely ascertainable, it is difficult to say that the levy exists in point of law. Any uncertainty or vagueness in the legislation scheme defining any of those components of the levy will be fatal to its validity." E. Reliance can be placed on the decision of the Hon'ble Delhi High Court in the case of CIT vs. S.M. Aggarwal, 293 ITR 43 (Delhi), in the case of CIT vs. Girish Chaudhary, 296 ITR 619 (Delhi), decision of the Hon'ble Calcutta High Court in the case of PCIT vs. Ajanta Footcare (India) (P.) Ltd. 84 taxmann.com 109 (Cal.) and the decision of the Hon'ble Bombay High Court in the case of Harish Textile Engineers Ltd. Vs. DCIT, 379 ITR 160 (Bom.) in support of the proposition that a document will be a dumb document, where any of the above four ingredients is missing and AO fails fill-up the gap with the help of other documents or from post search investigation enquiries. And no addition can be made based on such dumb documents. In other words, a dumb document does not constitute incriminating material for the purpose of assessment u/s 143(3) r.w.s. 153A of the Act. F. Since the entries do not contain any details to indicate the nature of transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s pointed out that there is confusion in the recordings. I further like to mention that there could be inconsistencies in the figures that have been recorded as such as hundreds, thousands and lakhs. There are some recording for sale of plots which are at exaggerated prices. This has been kept as it is because while selling the plots these figures are used to fetch higher price from the prospective buyers. There are also some transactions which have not been completed or have got cancelled. But the recordings exist in the diary. There are some figures which have been recorded in full but the customer has negotiated the same at a later point and so those may not be the actual realised prices. At many places only figures have been mentioned without noting whether these are amounts received or paid. I have recorded my statement for such amounts purely on my memory and so they could be vise-versa also. The dates recorded in the Diaries may differ with the dates recorded in the regular books of accounts or the dates as per Bank. This is because I am not sure whether the dates in the Diaries are the date on which amounts have been received or paid or dates on which the transactions have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year under consideration during the course of recording statement u/s 132(4) of the Act. Further, the Assessing Officer had not examined the assessee on the entries found in page no.20, 25 and 26 of the bundle no.11. As held by us supra, these entries do not lead to the conclusion that the loans received are bogus. In the given above circumstances, we are of the considered opinion that the statement given by the assessee u/s 132(4) has no effect, evidentiary value, cannot be construed as a confessional statement, no cognizance can be taken of the statement made by the assessee. Therefore, it cannot constitute the incriminating material. 21. Even assuming for a moment that the statement given by the assessee can be construed as confessional statement and has evidentiary value, such statement does not form part of evidence found as a result of search and seizure, as the word "evidence found as a result of search" would not take within its sweep, statements recorded during the course of search and seizure operations, which is not relatable to the evidence and material found during the course of search. In this connection, reliance can be placed on the decision of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are relevant for the purposes of the investigation being undertaken. Now, if the provisions of Section 132(4) of the Act are read in the context of Section 158BB(1) read with Section 158B(b) of the Act, it is at once clear that a statement recorded under Section 132(4) of the Act can be used in evidence for making a block assessment only if the said statement is made in the context of other evidence or material discovered during the search. A statement of a person, which is not relatable to any incriminating document or material found during search and seizure operation cannot, by itself, trigger a block assessment. The undisclosed income of an Assessee has to be computed on the basis of evidence and material found during search. The statement recorded under Section 132(4) of the Act may also be used for making the assessment, but only to the extent it is relatable to the incriminating evidence/material unearthed or found during search. In other words, there must be a nexus between the statement recorded and the evidence/material found during search in order to for an assessment to be based on the statement recorded. 22. In CIT v. Shri Ramdas Motor Transport [1999] 238 ITR 177/10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act must be read with the explanation to Section 132(4) of the Act which expressly provides that the scope of examination under Section 132(4) of the Act is not limited only to the books of accounts or other assets or material found during the search. However, in the context of Section 158BB(1) of the Act which expressly restricts the computation of undisclosed income to the evidence found during search, the statement recorded under Section 132(4) of the Act can form a basis for a block assessment only if such statement relates to any incriminating evidence of undisclosed income unearthed during search and cannot be the sole basis for making a block assessment. 24. If the Revenue's contention that the block assessment can be framed only on the basis of a statement recorded under Section 132(4) is accepted, it would result in ignoring an important check on the power of the AO and would expose assessees to arbitrary assessments based only on the statements, which we are conscious are sometimes extracted by exerting undue influence or by coercion. Sometimes statements are recorded by officers in circumstances which can most charitably be described as oppressive and in most such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement recorded of the assessee u/s 132(4) it would be evident that the assessee was examined and confronted on the statements given by Shri Praveen Agarwal, Shri Anuj Agarwal and Shri Jeevendra Mishra recorded during the course of search and seizure proceedings in their case. The assessee was never examined on the notings found in the Diary, 9, 20 to 22 and 83 of bundle no.11. Therefore, in view of the legal position discussed supra the statement recorded from the assessee u/s 132(4) cannot be considered as incriminating material to be used for the purpose of assessment to be made pursuant to notice u/s 153A of the Act. 22. Even otherwise, it is a settled position of law that mere statement u/s 132(4) on a standalone basis without referring to any other material discovered during the search and seizure operations empowers the Assessing Officer to make the addition in the assessment framed pursuant to notice issued u/s 153A of the Act. Reference can be made on the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Pilot Industries Ltd., 146 taxmann.com 233 (Delhi), PCIT vs. Best Infrastructure (India) (P.) Ltd. 397 ITR 82 (Delhi), CIT vs Harjeev Aggarwal 70 taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies based at Kolkata. Thus, the conditions precedent for purpose of making addition u/s 143(3) r.w.s. 153A does not stand satisfied in the present case. Therefore, the Assessing Officer was not justified in making the addition of Rs. 13,27,54,925/- being the unsecured loans as unexplained income in the assessment u/s 143(3) r.w.s. 153A of the Act. 24. The order of the ld. CIT(A) cannot be sustained in the eyes of law for the reasons that the ld. CIT(A) had failed to consider that (i) statement of the assessee u/s 132(4) in its entirety, merely swayed away by the answers given by the assessee in reply to question nos. 24, 25 and 26 ignoring the answers given by the assessee to the question no.39, (ii) examine the evidentiary value of the statement recorded u/s 132(4) from the assessee (iii) that the statement recorded u/s 132(4) on standalone basis cannot form the basis to make the addition u/s 153A of the Act (iv) appreciate that the statement recorded u/s 132(4) is not related to the material found as result of search and seizure operations, cannot be called as "incriminating material". The ld. CIT(A) also had seriously fell in error in applying the proposition of law that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of unexplained expenditure. On perusal of the assessment order, it would show that the Assessing Officer made addition on account of alleged on-money consideration paid in cash at the time of purchase of property based on the notings found in the Diary of 2009 as well as statement of the assessee u/s 132(4) of the Act. The Assessing Officer had reproduced scanned images of the notings found in the Diary at page no.2, 3, 13, 22 and 168 of bundle no.1 and also reproduced the statement given by the assessee at page no.18, 19, 20, 21 and 22 of the assessment order. These notings were explained by the assessee in the statement given u/s 132(4), which is extracted in page no.22 of the assessment order. On perusal of assessment order, it would show that the Assessing Officer had inferred that the assessee had paid on-money consideration at the time of purchase of properties, details of which are given at page no.17 of the assessment order and, accordingly, brought to tax as unexplained expenditure u/s 69C of the Act. The Assessing Officer also observed that the appellant had failed to discharge the onus of rebuttal of presumption raised u/s 292C of the Act. On appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f accounts maintained by the assessee regularly for the business. Similarly, these documents also cannot be termed as "speaking documents" for the reason that it does not reveal any taxable event and person on whom tax can be levied as well as year of taxability etc. Therefore, these documents can be termed as "dumb documents" which cannot form the basis for making the addition in the assessment. It is settled position of law that onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers which are in the nature of "dumb document" having no evidentiary value. The onus lies on the Department to collect the evidence to corroborate the notings on the loose sheets. The Hon'ble Supreme Court in the case of CIT vs. Kalyansundaram (P.V.), 294 ITR 49 (SC) endorsed the decision of the Hon'ble Madras High Court confirming the findings of the Tribunal that no on-money payment was made though the other party to the transaction accepted the receipts of on-money consideration in the absence of any prima-facie a case made by the Department. The Hon'ble Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circles. At page 299 of the report, it was observed as follows : "Adverting to the various probabilities which weighed with the Income-tax Officer we may observe that the notoriety for smuggling food grains and other commodities to Bengal by country boats acquired by Sahibgunj and the notoriety achieved by Dhulian as a great receiving centre for such commodities were merely a background of suspicion and the appellant could not be tarred with the same brush as every arhatdar and grain merchant who might have been indulging in smuggling operations, without an iota of evidence in that behalf. " 15. This takes care of the argument of Mr. Sabharwal that judicial notice can be taken of the practice prevailing in the property market of not disclosing the full consideration for transfer of properties." 31. The Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597 (SC) held that the capital gains is intended to tax the gains of assessee not what an assessee might have gained and what is not gained cannot be computed as gain and the assessee cannot fastened with the liability on a fictional income. Similarly, the Hon'ble Supreme Court in the case of CIT V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peak credit in respect of accommodation entries of unsecured loan from M/s Divyadrishti Merchants Private Limited which is proven shell/paper company and doing no real business. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that peak credit theory is not applicable where deposits remain unexplained under section 68 of the Income-tax Act, 1961 and particular withdrawal/repayment is not available on the date of subsequent credit. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating the fact that the assessee in his statement recorded u/s 132(4) has admitted that he had taken accommodation entries in the form of unsecured loan by giving equal amount of cash to controller of shell company M/s Divyadrishti Merchants Private Limited. 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in allowing adjustment of Rs. 2,50,00,000/- in quantifying undisclosed income in the form of accommodation entries of unsecured loan without appreciating the fact that during the year under consideration the assessee had taken accommodatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already been paid. Therefore, the authorities erred in upholding additions on transactions which have not at all materialized. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in partially confirming the unjust additions u/s 69C of the Income Tax Act, 1961 solely relying upon a statement which was subsequently retracted by the Appellant without bringing forth any incriminating corroborative evidence in support of the unjust additions. e) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions on surmises ignoring the detailed documentary evidence and legal propositions including judicial precedents advanced before such authorities. f) The Appellant craves leave to add, alter, amend, vary, or delete any of the aforesaid grounds." 38. The appellant had filed the originally Return of Income under the provisions of section 139(1) of the Act in pursuant to notice u/s 153A disclosing an additional income of Rs. 1 crore. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 13.12.2019 passed u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer in the assessment order. The entire assessment order is hinged upon two things : (i) the statement recorded from the assessee u/s 132(4) of the Act and (ii) the notings found in the diary at page nos. 62, 63 and 68 of bundle no.1. We dealt with in great detail on the evidentiary value of the statement recorded from the assessee u/s 132(4) in assessee's own appeal for the assessment year 2012-13, we held that the statement recoded u/s 132(4) cannot be construed as confessional statement for the reasons stated therein. Therefore, the statements recorded u/s 132(4) have no evidentiary value. Then, what remains to be dealt with the notings found in diary at page nos. 62, 63 and 68 of bundle no.1. We have carefully examined the said notings and we find that the notings does not contain any date, name of the persons, as well as four components required to be satisfied to constitute a taxable event, cannot be discerned from such notings. The first is the taxable event which attracts the levy, the second is the person on whom the levy is imposed and who is obliged to pay the tax. The third is the assessment year in which charge of income-tax is levied. The fourth is the total income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,35,00.000/- u/s 69A and upholding additions of Rs. 70,97,500/- u/s 69C of the Income Tax Act, 1961 ignoring the fact that the transactions have only partially materialized and the portion which has materialized has been recorded in the balance sheet and books of accounts on which tax has already been paid. Therefore, the authorities erred in upholding additions on transactions which have not at all materialized. e) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in partially confirming the unjust additions u/s 69A and u/s 69C of the Income Tax Act, 1961 solely relying upon a statement which was subsequently retracted by the Appellant without bringing forth any incriminating corroborative evidence in support of the unjust additions. f) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions on surmises ignoring the detailed documentary evidence and legal propositions including judicial precedents advanced before such authorities. g) The Appellant craves leave to add, alter amend, vary, or delete any of the aforesaid grounds." 47. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l submission and perused the material on record. The issue in the present ground of appeal revolves around the interpretation of the notings found in the diary at page nos. 18 and 94 of bundle no.1. The scanned images of the said notings were reproduced by the Assessing Officer in the assessment order. The entire assessment order is hinged upon two things : (i) the statement recorded from the assessee u/s 132(4) of the Act and (ii) the notings found in the diary at page nos. 62, 63 and 68 of bundle no.1. We dealt with in great detail on the evidentiary value of the statement recorded from the assessee u/s 132(4) in assessee's own appeal for the assessment year 2012-13, we held that the statement recoded u/s 132(4) cannot be construed as confessional statement for the reasons stated therein. Therefore, the statements recorded u/s 132(4) have no evidentiary value. Then, what remains to be dealt with the notings found in diary at page nos. 18 and 94 of bundle no.1. We have carefully examined the said notings and we find that the notings does not contain any date, name of the assessee as well as four components required to be satisfied to constitute a taxable event. The first is the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njust additions. c) The Appellant states that the Assessing Officer erred in creating additions on loans of Rs. 11,56,99,693/- and the Appellate Authority erred in partially confirming the unjust additions on loans of Rs. 7,79,62,568/- u/s 68 of the Income Tax Act, 1961 based completely on borrowed satisfaction on the basis of investigation conducted by a third-party investigating authority. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions of Rs. 3,82.50,000/- u/s 69A of the Income Tax Act, 1961 without bringing any incriminating or corroborative evidence on record solely based on loose papers and loose diaries contrary to the settled judicial precedents on the issue. e) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions of Rs. 3,82,50,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions in the diary notings had only partially materialized, out of which die materialized portions were already declared in the balance sheets and tax was paid. Therefore, the authorities erred in up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) were pending as on date of search. Therefore, identical issue involving common facts had arisen in assessee's own case filed by the assessee for the assessment year 2012-13, wherein, considering the whole gamut of the case, we held that the Assessing Officer had failed to satisfy the jurisdictional conditions precedent i.e. existence of incriminating material found as result of search and seizure operations to make the additions in the assessment made pursuant to the notice u/s 153A of the Act. Since the identical facts and issues are involved in the present appeal as in the assessment year 201213, therefore, our decision in IT(SS)A No. 91/PUN/2022 for A.Y. 2012-13 shall apply mutatis mutandis to the present appeal of the assessee in ITA No. 94/PUN/2022 for A.Y. 2015-16. Thus, the ground of appeal nos. (a), (b) and (c) filed by the assessee stands allowed. 60. Ground of appal nos. (d) and (e) raised seeking relief from the addition of Rs. 3,82,50,000/- made on account of receipt of alleged on-money consideration on sale of property. The Assessing Officer based on the notings found at page nos. 60, 93, 94 and 101 of bungle no.1, the scanned images of the said pages were reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th is the total income of the previous year and the fifth is the rate or rates at which tax is to be imposed. The rates are prescribed in the annual Finance Act. Therefore, "this component" has no value in determining total income on the basis of seized document. Therefore, we are of the considered opinion that these entries/notings found in diary at page nos. 60, 93, 94 and 101 of bundle no.1 can be safely terms as "dumb documents" in view of the legal position discussed by us in the assessee's own appeal for the assessment year 2012-13 that a dumb document cannot form basis for the addition. Accordingly, we direct the Assessing Officer to delete the addition of Rs. 3,82,50,000/- made for the year under consideration. 66. In the result, the appeal filed by the assessee in IT(SS)A No. 94/PUN/2022 for A.Y. 2015-16 stands allowed. IT(SS)A No. 98/PUN/2022, A.Y. 2015-16 - By Revenue : 67. The Revenue raised the following grounds of appeal :- "1. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in applying peak theory and determining peak credit in respect of accommodation entries of unsecured loan from M/s Grammy Agencies which is proven shell/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. IT(SS)A No. 95/PUN/2022, A.Y. 2016-17 - By Assessee : 71. The assessee raised the following grounds of appeal :- "a) The Appellant states that the Assessing Officer and the Appellate Authority erred in confirming alleged unaccounted expenditure additions u/s 153A of the Income Tax Act, 1961 without bringing any incriminating material and without corroborating evidence and by relying on a statement which was later retracted leading to the contradiction to settled judicial precedents. b) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 14,00,000/- u/s 69A of the Income Tax Act, 1961 solely based on loose papers, loose documents and loose diaries despite the fact that such transactions have not at all materialized. c) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 14,00,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions have only partially materialized and the portion which has materialized has been recorded in the balance sheet and books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 3,04,144/- and the same was brought to tax as unexplained expenditure. Similarly, the Assessing Officer based on the statement given by one Mr. Devendra Shingavi given u/s 132(4) recorded during the course of search and seizure operations in his case that the loan of Rs. 20,00,000/- was received from the assessee on 31.12.2015, the Assessing Officer had brought to tax of Rs. 20,00,000/- by holding that the assessee had paid cash loan of Rs. 20,00,000/- to the said person. 73. On appeal before the ld. CIT(A), the addition on account of on-money consideration of Rs. 14,00,000/- was confirmed. However, the ld. CIT(A) deleted the addition made on account of loss of Dabba Trading of Rs. 3,04,144/- and the addition of Rs. 20,00,000/- made on account of cash loan given to Mr. Devendra Shingavi by granting the benefit of telescoping against the addition on account of receipt of on-money consideration. 74. Being aggrieved, the assessee in appeal before us in the present appeal challenging the upholding of addition of Rs. 14,00,000/- made on account of receipt of on-money consideration. The addition was made by the Assessing Officer based on the notings found in page nos. 20, 102 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture additions u/s 153A of the Income Tax Act, 1961 without bringing any incriminating material and without corroborating evidence and by relying on a statement which was later retracted leading to the contradiction to settled judicial precedents. b) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 45,34,000/- u/s 69A of the Income Tax Act, 1961 solely based on loose papers, loose documents and loose diaries despite the fact that such transactions have not at all materialized. c) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in unjustly upholding the additions of Rs. 45,34,000/- u/s 69A of the Income Tax Act, 1961 ignoring the fact that the transactions have only partially materialized and the portion which has materialized has been recorded in the balance sheet and books of accounts on which tax has already been paid. Therefore, the authorities erred in upholding additions on transactions which have not at all materialized. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rading by granting the benefit of telescoping against the addition made on account of receipt of on-money consideration of Rs. 43,34,000/-. 79. Being aggrieved, the assessee is in appeal before us challenging the decision of the ld. CIT(A) confirming the addition of Rs. 45,34,000/-. 80. We heard the rival submissions and perused the material on record. The addition is made by the Assessing Officer based on the page nos. 111, 116 and 118 of bundle no.1, the scanned images of the said pages were reproduced by the Assessing Officer in page no.4 and 5 of the assessment order. We dealt with in great detail on the evidentiary value of the statement recorded from the assessee u/s 132(4) in assessee's own appeal for the assessment year 2012-13, we held that the statement recoded u/s 132(4) cannot be construed as confessional statement for the reasons stated therein. Therefore, the statements recorded u/s 132(4) have no evidentiary value. Then, what remains to be dealt with by us is interpretation of the notings found in diary at page nos. 111, 116 and 118 of bundle no.1. We have carefully examined the said notings and we find that the notings does not contain any date, name of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating corroborative evidence in support of die unjust additions. d) The Appellant states that the Assessing Officer erred in creating and the Appellate Authority erred in confirming the unjust additions on surmises ignoring the detailed documentary evidence and legal propositions including judicial precedents advanced before such authorities. e) The Appellant craves leave to add. alter, amend, vary, or delete any of the aforesaid grounds." 83. The assessee was filed the return of income for the assessment year 2018-19 on 09.02.2019 declaring total income of Rs. 23,53,680/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.12.2019 at a total income of Rs. 33,53,680/-. While doing so, the Assessing Officer made addition of Rs. 10,00,000/- by holding that during the course of search and seizure proceedings, the assessee had incurred loss of Rs. 10,00,000/- in Dabba Trading. The source of said loss was not explained. The Assessing Officer had come to this conclusion based on the entries found in the note books of bundle nos. 11 and 12 and the statement given by the assessee during the course of search proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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