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TMI Blog2024 (1) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... was collected in case of search of a third party. No doubt subsequent search was conducted at the premises of the assessee on 18.12.2017 but no material was found or seized. Para 5.14 of the assessment order apparently proves that the alleged incriminating materials viz. promissory note etc. brought on record as Annexure A-16 and A-17 was seized in case of search on a third party and not the assessee and in these circumstances assessment proceedings were required to be initiated under section 153C and not 153A as has been done in this case. No incriminating evidence against the assessee from the material seized from the premises of Mr. Nilesh Bharani and in these circumstances the Ld. CIT(A) has validly and legally deleted the addition made by the AO under section 69 56 of the Act. Decided in favour of assessee. - SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos. 1511 to 1517/M/2023, CO No.84/Mum/2023 (Arising Out of I.T.A. No.1512/Mum/2023), CO No.85/Mum/2023 (Arising Out of I.T.A. No.1513/Mum/2023), CO No.86/Mum/2023 (Arising Out of I.T.A. No.1514/Mum/2023), CO No.87/Mum/2023 (Arising Out of I.T.A. No.1515/Mum/2023) For the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer as well as Learned CIT(A) has erred in not appreciating the fact that no addition in the assessment framed u/s 143(3) read with section 153A can be made on the basis of statement of third party and documents found at the premises of third party. 3. The respondent craves leave to add, amend, alter or delete the said ground of appeal. 4. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : original assessment for A.Y. 2012-13 to 2017-18 was framed under section 143(3) of the Income Tax Act, 1961 (for short the Act ) at an assessed income. Subsequently assessment under section 143(3) read with section 147 of the Act was completed. Thereafter search and survey operation was carried out on 06.10.2017 in case of M/s. Sunshine Group, M/s. Sabari Developers LLP and M/s. Evergreen Enterprises and other entities at their offices and branches and residences, out of which some entities were also covered under section 133A of the Act. In the search operation evidence was unearthed showing the involvement of this group in providing accommodation entries in the form of unsecured loan, bogus purchases and bogus Long Term Capital G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Tribunal by way of filing present appeals and cross objections respectively. 8. We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto. 9. We have perused the order passed by the Ld. CIT(A) who has deleted the addition by returning following findings: 7.10. In the light of above discussion, the following are seen: a. The assessment for AY 2012-13 to AY 2017-18 is made u/s. 153A and not u/s. 153C. So, this is not a case where assessment is made solely on the basis of search conducted in another party. Rather, a search action has been conducted in the case of appellant itself. b. Apart from the excel sheet stated to be in the possession of Shri. Dipak Padia and his statement, no other incriminating material has been referred by the AO. c. From the excel sheet, it is seen that Shri Dipak Padia refers to transactions during the period 31.03.2017 to 19.05.2017, (para 5.21 of assessment order). In the reply to question no. 26, Shri. Nilesh Bharani ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be the case for the appellant. Facts have to be seen in each case independently and the cross-verifiability of evidences has indeed been discussed above. i. Seen in this background, it can be concluded that there is no clinching evidence in the case of the appellant to link up the material seized in the case of Shri. Nilesh Bharani to that of the appellant. At the cost of repetition, it is reiterated that no opinion is being passed on the adequacy of material found and seized from Shri Nilesh Bharani, but only on whether it can be concluded that the transactions recorded therein are adequate enough for addition to be sustained in the hands of the appellant given the specific facts of the case. j. Besides, it is noted that the AQ had given an opportunity to the appellant to cross-examine Shri. Nilesh Bharani on 28.11.2019, which goes in favour of the appellant. Similarly, the AO has also given an opportunity to Shri. Rashmin Rughani to cross-examine Shri. Dipak Padia on 28.11.2019 and no further counter has been given by the AO. 7.11. In view of the above and in the absence of any clinching evidence to conclusively show that the transactions are unrecorded cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact on record that the evidence relied upon the by the AO in this case was collected in case of search of a third party. 13. No doubt subsequent search was conducted at the premises of the assessee on 18.12.2017 but no material was found or seized. Para 5.14 of the assessment order apparently proves that the alleged incriminating materials viz. promissory note etc. brought on record as Annexure A-16 and A-17 was seized in case of search on a third party and not the assessee and in these circumstances assessment proceedings were required to be initiated under section 153C and not 153A as has been done in this case. 13. Furthermore, when we examine para 5.18 of the assessment order the AO has discussed the documentary evidence seized and statement obtained during search at the premises of one Mr. Nilesh Bharani on 06.10.2017 wherein one document showing Bharani was coded as R/08/B, which is assessee. Mr. Nilesh Bharani has stated that the list of lenders consisting the details of code, name, outstanding amount, contact person and contact number, address which belongs to the assessee and is extracted as under: 14. Aforesaid extract is prepared during the statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) has validly and legally deleted the addition made by the AO under section 69 56 of the Act. So the appeals filed by the Revenue for A.Y. 2012-13 to 2017-18 are dismissed. 20. So far as addition made by the AO in A.Y. 2018-19 is concerned, facts and evidence relied upon by the AO are same but in A.Y. 2018-19 the AO has made the addition on account of interest earned/received by the assessee to the tune of Rs. 22,57,83,125/- from A.Y. 2012-13 to A.Y. 2018-19 on the undisclosed investment in loans amounting to Rs. 50,25,00,000/- which is consequential, because when the addition made by the AO under section 69 of the Act for A.Y. 2012-13 to A.Y. 2017-18 is not sustainable the consequential addition on account of interest in A.Y. 2018-19 is also not sustainable, hence rightly deleted by the Ld. CIT(A). So appeal filed by the Revenue for A.Y. 2018-19 is also not sustainable, hence ordered to be dismissed. 21. In view of what has been discussed above, appeals filed by the Revenue for A.Y. 2012-13 to A.Y. 2018-19 are hereby dismissed. 22. Since the assessee has filed the cross objections just to support the findings returned by the Ld. CIT(A) cross objections filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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