9911796707
TMI Blog2024 (12) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... a tabular form as under: Name of assessee Asstt. year Dt. of assessment order Assessed income Dt. of impugned appellate order of learned CIT(A) Outcome of impugned appellate order of learned CIT(A) Standard Frozen Foods Exports Pvt. Ltd. 12-13 29/12/2019 5,62,470 31/01/2022 Dismissed -Do- 13-14 29/12/2019 32,94,360 31/01/2022 Partly allowed -Do- 16-17 30/12/2019 87,42,900 31/01/2022 Partly allowed -Do- 17-18 30/12/2019 34,94,030 31/01/2022 Partly allowed -Do- 18-19 31/12/2019 2,97,93,070 31/01/2022 Partly allowed Standard Agro Vet Pvt. Ltd. 12-13 28/12/2019 47,43,180 31/01/2022 Partly allowed -Do- 13-14 29/12/2019 1,22,06,030 31/01/2022 Partly allowed -Do- 14-15 29/12/2019 72,29,750 31/01/2022 Partly allowed -Do- 15-16 29/12/2019 96,13,740 31/12/2022 Partly allowed Kamal Kant Verma 15-16 30/12/2019 68,45,160 31/01/2022 Partly allowed -Do- 16-17 30/12/2019 1,00,02,230 31/01/2022 Partly allowed -Do- 17-18 30/12/2019 92,76,090 31/01/2022 Partly allowed -Do- 18-19 31/12/2019 3,72,59,560 31/01/2022 Partly allowed Shri Sachin Verma 12-13 30/12/2019 9,98,580 31/01/2022 Dismissed -Do- 14-15 29/12/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 40,80,000/- on a account of unexplained share application money received us. 68 of the Income Tax Act, 1961. 6. That the learned CIT(A) has erred in confirming addition of Rs. 43,00,000/- on account of unsecured loan as unexplained cash credit u/s 68 of the IT Act. 7. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 8. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.44/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .47/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 81,45,000/- on a account of unexplained share application money received us. 68 of the Income Tax Act, 1961. 6. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.48/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.51/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 56,00,000/- on a account of unsecured loan us. 68 of the Income Tax Act, 1961. 6. That the Ld. CIT (A) has erred in confirming addition of Rs. 56,00,000/- on a account of gift received as unexplained cash credit u/s 68 of the IT Act. 7. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 8. That the learned assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the Ld. CIT (A) has erred in confirming disallowance on account of interest on unsecured loan of Rs. 789/-. 7. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 8. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.55/Lkw/2022 "1. That the notice issued and assessment completed under section 153A of the act is invalid and unlawful being without jurisdiction. 2. That the learned assessing officer has erred in invoking section 153A of the Income Tax Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 4,00,000/- u/s 56(2)(vii)(b) of the Income Tax Act, 1961. 6. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 7. That the learned assessing officer has erred in not providing proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961. 3. That the learned assessing officer has erred in making addition arbitrarily without any relevance or nexus to the seized material. 4. That the assessment order passed by Ld. AO is without jurisdiction and bad in law as without valid and lawful approval u/s. 153D of the Income Tax Act, 1961. 5. That the Ld. CIT (A) has erred in confirming addition of Rs. 25,00,000/- on a account of unsecured loan us. 68 of the Income Tax Act, 1961. 6. That the Ld. CIT (A) has erred in confirming disallowance on account of interest on unsecured loan of Rs. 3,13,739/-. 7. That the assessment completed by learned assessing officer is arbitrary, prejudicial and unlawful. 8. That the learned assessing officer has erred in not providing proper and adequate opportunity to the appellant." I.T.A. No.59/Lkw/2022 1. That the assessment order passed by learned Assessing Officer is without jurisdiction and bad in law as without valid and lawful approval u/s 153D of the IT Act. 2. That the learned CIT(A) as well as Assessing Officer has erred in making addition of Rs. 2,63,00,000/- on account of profit on sale of poultry feed (MBM) 3. That the learned CIT(A) as well as Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opy of CBDT order under section 119 of the Act dated 27th September 2019 8. Copy of rectification orders passed by Assessing Officer u/s 154 of the Act in the case of appellant group of cases 9. Copy of letters filed before the Assessing Officer during the course of assessment proceedings provide allow adequate opportunity and summon/inquire third parties at the cost of assessee 10. Copy of notice u/s 142(1) dated 23/12/2019 in the case of Standard Frozen Foods Export Pvt. Ltd. for assessment year 2018-19 11. Coy pfo reply to Assessing Officer on notice u/s 142(1) dated 231/12/2019 in the case of Standard Frozen Foods Export Pvt. Ltd. for assessment year 18-19 on LOOSE PAPERS 5 pag 44 12. Copy of reply to Assessing Officer on notice u/s 142(1) dated 27/11/2019 in the case of Standard Frozen Foods Export Pvt. Ltd. for assessment year 18-19 on AT International 13. Copy of notice u/s 142(1) dated 19/09/2019 and 09/09/2019 in the case of Sachin Verma for assessment year 2018-19 14. Copy of reply to Assessing Officer in the case of Sachin Verma for assessment year 18-19 15. Copy of Panchnama drawn at the Premise - Unnao of Standard Frozen Foods Export Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 for compliance on 24.09.2019 and subsequently the search assessment proceeding was completed u/s 153A vide order dated 29.12.2019 with mechanical approval of Addl.CIT, Central Circle, Kanpur. 2. The case of the appellant involves legal issue of approval u/s 153D and the issue of assessment completed without incriminating material u/s 153A as well as on merit as following: * ASSESSMENT ORDER IS ILLEGAL AND WITHOUT JURISDICTION AS THE APPROVAL REQUIRED U/S 153D OF THE ADDL.CIT, CENTRAL IS MECHANICAL AND WITHOUT APPLICATION OF MIND IN VIOLATION OF REQUIREMENT U/S 153D [page no. 5-18] * NO ADDITION CAN BE MADE BY AO IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING SEARCH [page no. 19-27] * ON MERIT [page no. 28-51] 3. The appellant humbly makes submission before your honour issue wise legal as well as on meritas following along with brief submission on legal issues as under: Brief Submission on Legal Issues:Issue of Statutory Approval by JCIT u/s 153D of the IT Act, 1961 &Issue of Assessment framed u/s 153A in absence of incriminating material. ISSUE OF STATUTORY APPROVAL BY JCIT U/S 153D OF THE IT ACT, 1961: The appellant humbly submits that in all 19 appeals fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 for compliance on 24/12/2019 as show-cause notice for the first time on the issue of certain cash payment of Rs. 80 Lacs appearing on LP 05 page 44 seized from Saleem Qureshi, Lucknow to which the appellant filed reply and denied to have any connection with these transaction as neither it was found from the possession of appellant nor contains name of the appellant and further requested for confrontation of the person with whom such paper was found to which the ld.AO has simply made addition without any basis. (Notice and reply on Page 204-219 of PB Vol-1) - No Cross Examination: At page 223 of the PB Vol-1, the appellant had requested the ld.AO regarding transaction with AT Internationalof Rs. 1.77 Crore and requested for confrontation but the ld.AO simply brushed aside the request. - Inquiry before Assessment u/s 142(1): The appellant has requested the ld.AO to make summon and make inquiry at appellant cost on the issue of share application and unsecured loan which the ld.AO simply brushed aside. (Relevant Para O Page 183- Letters on Page 180-203) * Mechanical Approval for the sake of completion of search assessment proceeding time barring on 31.12.2019: Absence of appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax, Central-3 v. AbhisarBuildwell (P.) Ltd. [2023] 454 ITR 212 (SC)and also in the following decisions subsequent to AbhisarBuildwell, the Apex Court affirmed its decision inthe following cases: - PCIT vs. Saroj Sudhir Kothari, SLP (C) No. 4077 of 2023 dated 07.08.2023 - PCIT vs. King Buildcom (P) Ltd, Civil Appeal No. 4326 of 2023 dated 10.07.2023 - PCIT vs. Jay Ambey Aromatics, SLP (Civil) 24524 of 20223 dated 24.11.2023 - PCIT vs. S.S. Con Build (P) Ltd., SLP (C) No. 7799 of 2023 dated 04.05.2023 * On the basis of tabular chart ( at page 1-2 of PB Vol-1) Income Tax Appeal and the appellant wise categorisation of appellant with legal issue and its judicial precedence has been made as following: Sl. No 1 to 10 : In these cases no incriminating material was found during search and the addition has been made on account of share application received during the year. Reliance is placed upon the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. AbhisarBuildwell (P.) Ltd. [2023] 454 ITR 212 (SC) where the Hon'ble Court has held that no addition can be made in absence of incriminating material found and seized during se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke of administrative approval for completion of assessment at the fag end of assessment proceeding for the following reasons: * Firstly, that the approval has been given to the draft assessment order for multiple assessee's and assessment years by common approvalin violation of mandatory requirement of law being for 'each assessment year' * Secondly, the approval has been granted by the Addl.CIT to 110 cases in two days i.e. 48 approvals on 27.12.2019 and 62 approvals on 28.12.2019 by way of common approvals among which the approval of appellant case has also given by the Addl.CIT at the fag end of assessment proceedingi.e. 31.12.2019 for the sake of administrative approval for completion of assessment proceeding (approvals at page 76-84, relevant approval at page 80 & 83 of the PB Vol-1) and * Thirdly on facts of the case that there has been no application of mind while giving statutory approval to the cases approved in the approval letter as the approving authority also failed on various aspect in the assessment order where the draft assessment order stood erroneous and there was statutory obligation casted upon the statutory authority which is JCIT while approving the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, it is clear that the time frame available to the appellant and ld.AO for compliance by the appellant and inquiry before assessment u/s 142(1) and completion of assessment u/s 153A with approval of JCIT u/s 153D available to ld.AO was only of 3 months 20 days as the notice u/s 142(1) was issued on 19.09.20219 and assessment was completed on 29.12.2019 to complete the whole search group of cases including Rustom Group of Cases and Appellant group of cases alongwith other search group of cases (Shatabdi Group of Cases and Vivek Agarwal Group of Cases) and regular assessments. Meaning thereby, that the ld.AO has competed Rustom Food Group and Standard Frozen Group of cases assessment in 3 months without inquiry on the issue of which addition has been made by the ld.AO and also where the request for inquiry of share application and unsecured loan and cross examination of alleged transaction with AT International and Rustom Foods was requested by the appellant as apparent from the reply filed during the assessment proceeding appearing on page 180-203 and 220-224 of the paperbook vol-1. 6. The appellant very humbly submits before your honour that from the above timeline and cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout conducting any inquiry and providing cross examination to the appellant before making any addition even though requested by the appellant and on this count as well as legal requirement the Addl.CITfailed to discharge the statutory obligation entrusted by the provision of section 153D of the Act. The very purpose and intent of legislature to put obligation on the statutory authority before giving approval u/s 153D to protect the interest of taxpayer and unjust exercise of discretion by the AO in search assessment has been mechanically followed by the Addl.CIT as the ld.Addl.CIT failed to supervise or check before giving approval as to whether addition proposed in the draft assessment order has been made after proper examination of reply with documentary evidence and inquiry and cross examination as requested by the appellant. 8. Furthermore, the appellant humbly submits before your honour that the appellant case has been approved by the Addl.CIT, Central Circle, Kanpur mechanically without application of mind in violation to provision u/s 153D as the approval has given approval mechanically for the sake of administrative requirement at the fag end of assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also given vide approval no. 1488 and 1490 appearing at page 80 & 83 of the PB Vol-1alongwith other approvals at page 76-84of the PB Vol-1. 13. This mandatory provision u/s 153D for each assessment year is parimateria to the provision of section 151 where sanction required for issue of notice u/s 148 is mandatory by JCIT/ CIT with application of mind and parimateria to section 153D. Similar is the position u/s 153D, approval is mandatory requirement and required to be approved for each assessment year with application of mind and not merely a piece of formality to approve the search assessment collectively by of common approval letter without application of mind. 14. That the legislature in its highest wisdom made it compulsory that the assessments of search cases should be made with the prior approval of superior authority, so that the superior authority apply their mind on the materials and other attending circumstances on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authority have to approve the Assessment order. Object of entrusting the duty of Approval of assessment in search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the requirement of previous approval of the Chief Commissioner or Commissioner in terms of said provision being inbuilt protection against the arbitrary or unjust exercise of power by the assessing officer, casts a very heavy duty on the said high-ranking authority to see it that the approval envisaged in the section is not turned into an empty ritual. The Hon'ble Apex Court held that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. 16. Reliance is placed upon the Jurisdictional Allahabad High Court in the case of PCIT vs. Subodh Agarwal, ITA 86 of 2022 dated 12.12.2022 in which the Hon'ble High Court held that approval of draft assessment order is an inbuilt protection against any arbitrary or unjust exercise of power by Assessing Officer cannot said to be a mechanical exercise without application of mind. It is trite in law that the approval must be granted only on the basis of material available on record and the approval must reflect the application of mind to the facts of the case. The requirement of approval under section 153D is prerequisite to pass an order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation in possession of the Income-tax Authorities. Section 153A prescribes assessment in case of search or requisition. Section 153A provides that in the case of a person where a search is initiated under section 132, the Assessing Officer shall issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years (and for the relevant assessment year or years) referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may apply accordingly as if such return were a return required to be furnished under section 139. 10. Section 153D of the Act relevant for our purposes is to be noted hereinunder: "Prior approval necessary for assessment in cases of search or requisition. 153D.-No order of assessment or reassessment shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of each assessment year referred to in clause (b) of [sub-section (1) of] section 153A or the assessment year re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered to hold that effective and proper meaning has to be given so that underlying legislative intent as per scheme of assessment of sections 153A to 153D is fulfilled. It was held that the "approval" as contemplated under 153D of the Act, requires the approving authority, i.e. Joint Commissioner to verify the issues raised by the Assessing Officer in the draft assessment order and apply his mind to ascertain as to whether the required procedure has been followed by the Assessing Officer or not in framing the assessment. The approval, thus, cannot be a mere formality and, in any case, cannot be a mechanical exercise of power. 13. It was noted that the obligations of the approval of the Approving Authority serves two purposes: (i) On the one hand, he has to apply his mind to ensure the interest of the revenue against any ommission or negligence by the Assessing Officer in taxing right income in the hands of right person and in right assessment year. (ii) On the other hand, superior authority is also responsible and duty-bound to do justice with the tax-payer by granting protection against arbitrary or creating baseless tax liability on the assessee. 14. The Tribunal has fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted in the impugned order passed by the Tribunal, as noted above, there cannot be any two opinion to the requirement of prior approval of the Joint Commissioner to the draft assessment order prepared by the Assessing Officer, as per the mandate of section 153D of the Income tax Act. 18. The approval of draft assessment order being an in-built protection against any arbitrary or unjust exercise of power by the Assessing Officer, cannot be said to be a mechanical exercise, without application of independent mind by the Approving Authority on the material placed before it and the reasoning given in the assessment order. It is admitted by Sri Gaurav Mahajan, learned counsel for the appellant-revenue that the approval order is an administrative exercise of power on the part of the Approving Authority but it is sought to be submitted that mere fact that the approval was in existence on the date of the passing of the assessment order, it could not have been vitiated. This submission is found to be a fallacy, in as much as, the prior approval of superior authority means that it should appraise the material before it so as to appreciate on factual and legal aspects to ascertain that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us. 22. The Appeal is dismissed being devoid of merit. 17. Reliance is placed upon the decision of KhodayEhshwarsa and Sons vs. DCIT, ITA 1079 & 1080/Bang/2024 dated 20.09.2024 where the Hon'ble Tribunal observed and held that all the draft orders involving 6 assessment years i.e. assessment years 2015-16 to 2020-21, were sent to the ld. Additional CIT for approval vide letter dated 30 March 2022 which were approved on the next date i.e. 31.3.2022. The assessment order for the AY 2020-2021 contained only 62 pages involving complex issues with respect to the business income and capital gains transaction but the same was approved by the ld. Additional Commissioner of Income Tax on the next date which evidence that the approval was granted in mechanical manner. Thus, in the absence of proper approval under section 153D of the Act, the assessment order is bad in law. 18. Further reliance is placed upon recent decision of Hon'ble Lucknow Tribunal in the case of Quality Structure Pvt Ltd. vs. DCIT, CC-2, Kanpur, ITSSA 679 & 680/Lkw/2019 dated 30.09.2024in which the Hon'ble Tribunal following the decision in the case of Shri Navin Jain vs. Dy. CIT in IT(SS)A No.s 639 to 641/LK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 132 or making of requisition under section 132A as the case may be, shall abated. Thus, when provisions of Section 153A are applicable in a case of assessee, A.O. shall have to give separate notice of each assessment year and assessee shall have to be directed to file return of income for each year and separate orders shall have to be passed for each assessment year. In Section 153A of the I.T. Act, the A.O. shall have to see whether there are abated or non-abated assessments which was not provided in earlier provisions for block assessments. The Hon'ble Delhi High Court in the case of CIT vs., Kabul Chawla [2016] 380 ITR 573 (Del.) considered the issue of abated and non-abated assessments and with regard to completed assessments held that the same can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search which was not produced or not already disclosed or made known in the course of original assessment. It is also held in the same Judgment that in so far as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11.2. The meaning of the word "Approval" as defined in Black Law Dictionary is - "The Act of confirming, rectifying, sanctioning or consenting to some act or thing done by another. To approve means to be satisfied with, to confirm, rectify, sanction or 'consent to some act or thing done by another, to consent officially, to rectify, to confirm, to pronounce good, thing or Judgment of, admitting propriety or excels or to pleas with." 11.3. The Hon'ble Supreme Court of South Carolina in State vs., Duckett 133 SC 85 [SC 1925], 130 SE 340 decided on 05.11.1925 held that "Approval implies knowledge and, the exercise or discretion after knowledge." 11.4. The Hon'ble Supreme Court in the case of Vijayadevi Naval Kishore Bharatia vs., Land Acquisition Officer [2003] 5 SCC 83 wherein it has been held that : "Whenever there is an administrative approval given by higher authority, higher authority applies its mind to see whether the proposed Award is acceptable to the Government or not ? Such Authority may satisfy itself as to the material relied upon by the Adjudicator, but, the Approving Authority cannot reverse the finding, as he is an Appellate Authority for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pass assessment order or reassessment order in search cases, then, it is the duty of the JCIT to exercise such powers by applying his judicious mind. We are of the view that the obligation of the approval of the Approving Authority is of two folds ; on one hand, he has to apply his mind to secure in build for the Department against any omission or negligence by the A.O. in taxing right income in the hands of right person and in right assessment year and on the other hand, JCIT is also responsible and duty bound to do justice with the tax payer [Assessee] by granting protection against arbitrary or unjust or unsustainable exercise and decision by the A.O. creating baseless tax liability on the assessee and thus, the JCIT has to discharge his duty as per Law. Thus, granting approval under section 153D of the I.T. Act is not a mere formality, but, it is a supervisory act which requires proper application of administrative and judicial skill by the JCIT on the application of mind and this exercise should be discernable from the Orders of the approval under section 153D of the I.T. Act." 20. The above facts of the case and the conduct of assessment proceeding alongwith with its appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2018 and notice u/s 153A was issued on 12.07.2019 for the AY 2012-13 to AY 2017-18 (six assessment year) whereas the limitation for issuance of notice u/s 143(2) for the last assessment year i.e. AY 2017-18 was 30.09.2018 whereas no assessment proceeding was pending or abated for assessment as apparent from the assessment order framed u/s 153A of the Income Tax Act, 1961. The details of the appellant alongwith status of the appellant in which no incriminating material has been found during search is as following: SL.No. Appeal Number A.Y Appellant Whether assessment completed/ Unabated? Whether any incriminating material found during search for the assessment year 1 ITSSA 41/LKW/2022 2012-13 Standard Frozen Foods Exports Pvt. Ltd Yes No 2 ITSSA 42/LKW/2022 2013-14 Standard Frozen Foods Exports Pvt. Ltd Yes No 3 ITSSA 43/LKW/2022 2016-17 Standard Frozen Foods Exports Pvt. Ltd Yes No 4 ITSSA 44/LKW/2022 2017-18 Standard Frozen Foods Exports Pvt. Ltd Yes No 5 ITSSA 46/LKW/2022 2012-13 Standard Agro-Vet Pvt. Ltd Yes No 6 ITSSA 47/LKW/2022 2013-14 Standard Agro-Vet Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(4) of the brother of the appellant during search and that no confirmation or statement to confront the same was done during search or assessment proceeding. Reliance is placed upon the decision of Delhi High Court in the case of PCIT vs. Shiv Kumar Agarwal, ITA No 231 of 2022 dated 28.07.2022, PCIT vs. Anand Kumar Jain (2021) 432 ITR 384 dated 12.02.2021,Best Infrastructure India (P.) Ltd [2017] 397 ITR 82 (Delhi)and recent decision in the case of Dviya Exim (P) Ltd v. DCIT, ITA 7442, 5952 & 5957 (Delhi) of 2018 dated 15.01.2024 in which the Hon'ble Court held that no addition can be made in absence of incriminating material found during search on the basis of statement recorded u/s 132(4) of the IT Act, 1961. 24. In the case of Principal Commissioner of Income-tax, Central-3 v. AbhisarBuildwell (P.) Ltd [2023] 454 ITR 212 (SC)[24-04-2023],the Hon'ble Supreme Court has held that in respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during course of search under section 132 or requisition under section 132A. The relevant finding of the Hon'ble Supreme Court is reproduced as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.-For the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in this section, section 153-B and section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (P.) Ltd. [2023] 454 ITR 212 (SC)in the following decisions subsequent to AbhisarBuildwell as following: * PCIT vs. Saroj Sudhir Kothari, SLP (C) No. 4077 of 2023 dated 07.08.2023 * PCIT vs. King Buildcom (P) Ltd, Civil Appeal No. 4326 of 2023 dated 10.07.2023 * PCIT vs. Jay Ambey Aromatics, SLP (Civil) 24524 of 20223 dated 24.11.2023 * PCIT vs. S.S. Con Build (P) Ltd., SLP (C) No. 7799 of 2023 dated 04.05.2023 26. As regard to addition made on the basis of statement recorded during search the appellant places reliance on the following judicial precedence where the Hon'ble Courts has held that no addition can be made on the basis of statement recorded in absence of incriminating material found during search as the same does not constitute incriminating material: * Delhi High Court in the case of PCIT vs. Shiv Kumar Agarwal, ITA No 231 of 2022 dated 28.07.2022 * PCIT vs. Anand Kumar Jain (2021) 432 ITR 384 dated 12.02.2021 * Best Infrastructure India (P.) Ltd [2017] 397 ITR 82 (Delhi) * Recent decision in the case of Dviya Exim (P) Ltd v. DCIT, ITA 7442, 5952 & 5957 (Delhi) of 2018 dated 15.01.2024 In the case of PCIT vs. Shiv Kumar Agarwal, ITA No 231 of 2022 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 127 of the Act and a notice under section 153A of the Act was issued on 6th September, 2016, which was duly served. Upon receipt of notice the assessee filed his return for the relevant assessment year 2011-12 declaring an income of Rs. 5,41,130/- on 2nd March, 2017. During the year under consideration, the assessee declared income under the head 'income from salary', 'income from capital gains' and 'income from other sources'. With respect to the income from capital gains, the assessee submitted in his reply to state that he had purchased 400 shares of one M/s KGN Industries Ltd. for a total consideration of Rs. 4,000/- at Rs. 10/- per share subsequently dematerialised the shares and sold the shares on 13th October, 2010 i.e., in Financial Year (FY) 2010-11 for a sum of Rs. 3,62,996/-. It is submitted that the assessee had earned capital gain of Rs. 3,61,496/- on the sale of the said shares. However, LTCG of Rs. 3,61,496/- was claimed by the assessee as an exempt income under section 10(38) of the Act. The Assessing Officer (AO) relying upon the letter dated 31st July, 2015 and statement by Sh. Madho Gopal Agarwal dated 3rd August, 2015 hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a result of the search conducted against the assessee on record, allowed the appeal and set aside the addition made by the AO. The ITAT has relied upon the judgment of this Court in Pr. CIT v. Anand Kumar Jain [2021] 432 ITR 384 and CIT v. Best Infrastructure India (P.) Ltd. [2017] 84 taxmann.com 287/397 ITR 82 (Delhi) wherein this Court has held that statements recorded under section 132(4) of the Act do not themselves constitute as incriminating material in the absence of any corroborative evidence. The ITAT placed reliance on para 35 of Best Infrastructure India (P.) Ltd. (supra) as reproduced hereinbelow:- "35. Turning to the facts of the present case, it requires to be noted that the statements of Mr. Anu Aggarwal, portions of which have been extracted hereinbefore, make it plain that the surrender of the sum of Rs. 8 crores was only for the AY in question and not for each of the six AYs preceding the year of search. Secondly, when Mr. Anu Aggarwal was confronted with A-1, A-4 and A-11 he explained that these documents did not pertain to any undisclosed income and had, in fact been accounted for. Even these, therefore, could not be said to be incriminating material qua ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no incriminating material was found during the course of search, the issue is covered in favour of the assessee by the judgment of this Court in the case of Commissioner of Income tax v. Kabul Chawla (2016) 380 ITR 573 and Principal CIT v. MeetaGutgutia(2017) 395 ITR 526 as well as by the orders of the ITAT in the group cases of Madho Gopal Agarwal and M/s Kapis Impex LLP (supra). 11. A predecessor Division Bench of this Court in Kabul Chawla (supra) has held that if no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under sections 153A and 153C of the Act. The legal position summarized in the subsequent decision of MeetaGutgutia (supra) is reproduced hereinbelow:- "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under section 132 of the Act, notice under section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or consideration. Accordingly, the present appeal is dismissed. 27. In view of above facts and case authorities relied upon the appellant humbly request your honour to quash the assessment order framed u/s 153A for the AY 2012-13 to AY 2017-18 in appeal in absence of incriminating material found during search. ON MERIT: I. Standard Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19- [Page No. 28-32] II. Standard Agro Vet Pvt Ltd- ITSSA 46-49/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2014-15 and AY 2015-16 [Page No. 32-33] III. Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 53/lKw/2022 for AY 2018-19 [Page No. 33-39] IV. Sachin Verma- ITSSA 54-58/Lkw/2022 for AY 2012-13, AY 2014-15, AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 59/Lkw/2022 for AY 2018-19 [Page No. 39-51] Standard Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19: The appellant humbly submits before your honour that in the above appeal, the issues on account of which addition has been made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le amount which a person could hold in his saving to invest in share application of the company to become shareholder of that company. As regard to Unsecured Loan of Rs. 43,00,000/- in AY 2016-17, the appellant humbly submits that the this is not an unsecured loan from U.S. Traders but an advance from customer to whom sale has been made. The ledger account, confirmation, letter from U.S Trader and Bill of Supply is enclosed in the paperbook at page 259-263 of PB Vol2- Part1. Furthermore, the audited books of account has not been rejected by the AO and also the sales are accepted. Moreover, the arbitrary addition without application of mind has resulted in double taxation. As regard to addition on the basis of LP-5 page 44 found with the third party of Rs. 80,76,000/- in the AY 2018-19: 01. it is undisputed fact that alleged document/ paper was not found from the possession of appellant. In other words alleged paper was found from the possession of the third parties. 02. That this alleged paper is not part of the books of accounts. 03. That this alleged paper is not written by assessee and who has written/ maintained this paper does not known to appellant. 04. That appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to appellant only, may be relates to others. Only few business transaction appearing in this sheet alone does not establish that cash transactions relates to assessee as this sheet was not found from the possession of assessee. 10. That appellant during assessment proceeding strongly denied having cash receipts from Mr. Saleem Qureshi. The assessee also does not know who is MLA and why payment has been made to MLA and how payment made to MLA relates to assessee. What Mr. Saleem Qureshi has stated about transaction appearing in this alleged sized loose document is not known to assessee. The appellant was requested AO for cross examination with the Saleem Qureshi for confrontation of facts but the said requests was not entertained 11. The legal effect of the statement recorded behind the back of the assessee and without furnishing the copy thereof to the assessee or without giving an opportunity of cross-examination, no addition could be made as it will be amount to violation of principles of natural justice. No addition can be made only the basis of presumptions. 12. Your honour may please very kindly be appreciate that no addition could be made merely on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , conjectures and surmises which cannot take the place of proof. We also agree with the Tribunal that the assessing officer did not conduct any independent enquiry relating to the value of the property purchased and the burden of proving the actual consideration in the purchase of the property is on the Revenue and it had failed to discharge the said burden. 16. Reliance is also placed on the decision in the case of CBI vs. VC Shukla (1998) 3 SCC 410) it has been held that the loose sheets of paper cannot be considered to be books. 17. In the case of CIT vs. Girish Chaudhary (2008) 296 ITR 619 (Delhi) - Delhi High Court has held as under:- "That the revenue has to prove the undisclosed income beyond doubt. Further it was held that the document should be a speaking one and it should contain narration in respect of various figures noted therein. Otherwise the same should be considered as dumb document on which reliance could not placed upon." 18. Your honour may please very kindly be appreciate that without collecting any evidence and bringing the same on record, no addition cannot be made on loose sheet / dumb documents found from the possession of third party, that too on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholder details were available with the ld.AO who failed to confirm or conduct any inquiry. The identity in the form of name, address in the share allotment alongwith share applicants details available were provided. Moreover, the share applicants were allotted shares and made shareholder of the company and as regard to the creditworthiness of the shareholders looking at the amount of share application money ranging from 35,000/- to 2,00,000/- the same may is reasonable amount which a person could hold in his saving to invest in share application of the company to become shareholder of that company whereas as regard to the share application money above 2,00,000/- the PAN and Bank Statement has also been provided which are enclosed in the paperbook vol2 part 2 page 312-566. As regard to Unsecured Loan of Rs. 6,00,000/- in AY 2012-13, the appellant humbly submits that the this is not share application from S.K.Nigam but unsecured loan which has been repaid. The copy confirmed copy of account, ITR, acknowledgement from S.K. Nigam and bank reflecting reparyment is enclosed in the paperbook at page 343-347 of PB Vol2- Part2. Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r found during search nor any corroborative evidence to support the allegation brought on record during the assessment proceeding by the ld.AO. The ld.AO also failed to conduct any inquiry during the assessment proceeding and the ld.CIT(A) confirmed the addition on the basis of statement. 01. That Ld. AO has made addition on the basis of seized loose paper Page No- 32 of LP-5 and relying on the statement of Shri Sachin Verma recorded u/s 132(4) of the Income Tax Act, 1961. In this regards appellant respectfully submitted that paper seems printout taken from of tally accounting software and is account ledger named Net Profit MBM Sales (GST Exempted) for the period 30.04.2017 to 31.12.2017 containing 10 entries on monthly basis. It is also important to address being doubtful as to whether the printout being taken as LP 5 Page 31 & 32 are from the tally computer of Standard Frozen Foods Export Pvt Ltd, Unnao which the department is claiming or mischievously kept or provided by someone to the department. 02. This paper contains details of cash sales on the very last day of the every month with narration Being Net Profit Received. 03. Except to only this tally printout, no other d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in any movable or immovable assets have been found. viii) No such cash as was found at the time of search. 06. Your honour may appreciate that in GST regime which requires E way bill for supplying of goods over to value of 50000/- such supply is not possible in a single day. The address mentioned in the loose paper is E-20, UPSIDC Industrial Area, Unnao which does not belongs to appellant. This address is factory premises of Standard Frozen Foods Exports Pvt Ltd and thus this paper was not found from the possession of appellant. 07. That during the course of assessment proceeding, assessee has filed detailed submissions on the query raised along with supporting evidences and explanations but the ld. AO disregarded the same and has come to conclusion with predetermined and preconceived mind of making addition on the basis of investigation report, solely considering amount of surrender made in the statements recorded u/s 132(4) of Sachin Verma without bringing any evidence to disregards the explanations/ submissions and without establishing with corroborative evidences whether the alleged transactions having been actually carried out or not. 08. It Is fact that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be accounts books of a party. Even if it is taken as an informal accounting it is not the record of the assessee. Even assuming such entries as correct and authentic they cannot without independent evidence fix a liability upon a person. In that connection the court also referred to Section 9 of the Evidence Act and observed that even if such entries are admissible under the said provisions to support an inference about correctness of the entries still such entries would not suffice without supportive independent evidence. They have no probative value in the absence of some corroborative primary evidence of the reality of such transaction shown in the noting in such loose sheets of paper. Even entries in the books of account need corroboration before acting against the third party on the basis of any entry in the books of account of a person. Any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational and hence legal unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. 12. That all these things clearly suggests that this paper is nothing but a dumb paper having no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y". This instruction is in line with the recommendation of the Task Force on Direct Taxes Chaired by Dr. Vijay Kelker." Recommendation in final Report Para 3.27 of Task Force on Direct Taxes Chaired byDr. Vijay Kelkar in this context: * The CBDT must issue immediate instruction to the effect that no raiding party should obtain any surrender whatsoever. * Where, a taxpayer desire to voluntarily make a disclosure, he should be advised to make so after the search. * All cases where surrender is obtained during the course of the search in violation of the instruction of the CBDT, the leader of the raiding party be subjected to vigilance enquiry. * All statements recorded during the search should be Video recorded. Subsequently, CBDT also issued another letter [F.NO.286/98/2013-IT (INV.II)], DATED 18-12-2014, emphasizing upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. The letter is being reproduced herein under:- "SECTION 132, READ WITH SECTION 133A OF THE INCOME-TAX ACT, 1961 - SEARCH & SEIZURE - ADMISSIONS OF UNDISCLOSED INCOME UNDERCOERCION/PRESSURE DURIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s open to an assessee to demonstrate and satisfy the authority concerned with documentary evidence. Supreme Court decisions on admission being not conclusive:- The settled principle of law suggests that a confession of an accused would need corroboration with evidences to convict the accused. It is a matter of acceptance that though an admission is an important piece of evidence but it is not conclusive and it is open to the assessee to show that it is incorrect. At this stage, it shall not be out of place to quote the verdict of Hon'ble Supreme Court of India in case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1973] 91 ITR 18 wherein their Lordships while observing that admission is an extremely important piece of evidence, held that, it cannot be said to be conclusive and the maker can show that it was incorrect. The landmark verdict was followed by the Hon'ble Delhi High Court of Delhi in case of S. Arjun Singh v. CWT [1989] 175 ITR 91. Further reliance can also be placed on the judgement of the apex court in case of NagubaiArmul V. B Sharma Rao AIR 1956 SC 100 wherein it was held that an admission is an extremely important piece of evidence but it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceeding. The ld.CIT(A) confirmed the addition on the basis of statement of the appellant under undue coercion contrary to the fact. The appellant has filed details of the unsecured loan comprising of ledger account, PAN, ITR & Bank Statement have been filed and appearing in the paperbook vol 2 part 1 from page 2 to 43 fulfilling the requirement of section 68 three ingredients i.e. identity, genuineness and creditworthiness. In view of above, the appellant humbly request your honour to kindly delete the addition made on the basis of statement recorded without any incriminating material was found during search nor any corroborative evidence to support the allegation brought on record during the assessment proceeding by the ld.AO. ADDITION OF Rs. 4,00,000/- IN AY 2014-15 ON OF DIFFERENCE IN VALUE OF PROPERTY U/S 56(2)(vii) OF THE IT ACT, 1961: 1. That appellant re-producing the provisions of section 56(2)(vii)(b) for ready reference as under : - (b) any immovable property,- i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; ii) for a consideration which is less than the stamp duty val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "cost", "price" and "value". As a matter of fact, a price indicates a fact that has already occurred in practice, a completed affair after a property has been, or agreed to be sold. On the other hand, "value" indicates the estimation of a probable price of the property concerned. The value of a property cannot be stated in an abstract form and it varies from time to time and can only be stated with reference to so many factors, i.e. the locality, situation, general appearance in the area, availability of shopping and marketing facilities, condition of public ways and transportation, availability of utilities, and many other things. As far as "cost" is concerned, it indicates cost to the purchaser for the purchase of the property after the purchase has been completed or agreed to. The provisions of sec. 56 of the Act state the fair market value and value is estimation of a probable price of the property, i.e. the deeming fiction. 5. The value of a property cannot be stated in an abstract form and it varies from time to time and can only be stated with reference to so many factors, i.e., the locality, situation, general appearance in the area, availability of shopping and marketin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, in fact, made investments over and above that recorded in the books in the year under consideration. 10. Your honour may please very kindly be appreciate that no addition could be made solely on presumption without affording reasonable opportunity to the appellant and without fallowing the provisions of section section56(2)(x)(B)as amended. There is no presumption under Law that the difference between the actual purchase price and the stamp duty value would be unaccounted investment by the purchaser. In view of the above, it is prayed that addition made by AO may please very kindly be deleted as:- i) No evidence either at the time of search or at the time of assessment was found that appellant has paid any extra amount other than actual price. ii) No opportunity has been allowed to appellant before making addition. iii) The AO has failed to fallow the provisions of section 56(2)(x)(B), as amended, as the provisions is curative in nature and must be adhered. ADDITION OF Rs. 2,60,00,000/- IN AY 2018-19 ON THE BASIS OF LP 5 PAGE 31: In respect of addition of Rs. 2,60,00,000/- in AY 2018-19 on the basis of LP 5 Page 31, the appellant humbly submits that the addition ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur honour may appreciate that to earn income of Rs. 37 lacs to 60 lacs in a single day, there must be sale at least 2,46,00,000/- to 4,00,00,000/-in that day if the profit rate is assumed being 15%. The rate of MBM is approx.35000/- PMT meaning thereby at least goods to the extents of 700 Ton to 1140 Ton must have been supplied. The truck capacity is approx. 15 MT thus at least 50 to 76 trucks must be required. Further no stock was found undisclosed in the hand of assessee and all these things clearly supports that this paper was prepared by someone only with intent to mischief the appellant. Your honour may please very kindly be appreciate that department has carried out action u/s 132 covering business as well as residential premises and except to this alleged seized document, no other evidence with regards to fallowing transactions which is integral part of business ,were found: ix) No single evidence regarding sales of MBM to earn such huge profit in a day was found. x) No Single evidence regarding purchases of MBM was found. xi) No evidence regarding the buyers or suppliers was found. xii) No single Kg. of stock was found. xiii) No single evidence regarding transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act, 1961 without collecting any concrete evidence to justify the addition. 10. Your honour may appreciate that no addition can be made or sustained simply on the basis of statement recorded at the time of search, for which no corroborative material is found. In order to make a genuine and legally sustainable addition on the basis of surrender during search, there must be some incriminating material must have been found to correlate the undisclosed income with such statement which is absent in the case of appellant. 11. That if the contents are alleged documents is treated as genuine then cash to the extent of Rs. 3,45,00,000/- must have been found available at the time of search or undisclosed investment to that extents must have been found which is absent in the appellant case. The cash in the case of appellant was found tallied with the books of accounts and therefore no addition has been made on account of cash. The Hon'ble Supreme Court in Ramji Dayawala& Sons (P.) Ltd. v. Invest import AIR 1981 SC 2085 observed that the truth of the facts stated in the documents had to be proved by admissible evidence and not by mere handwriting. In the case of CBI v. V.C. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is account ledger of A T International. b) This paper does not contain the name of person/ company to whom it belongs. In other words name of the receiver is no where mentioned in this loose paper. c) This paper contains details of cash taken /given to/from A.T International during the periods 09.06.2017 to 02.01.2018. d) That Ld. AO allegation on the hand is that this printout was taken from tally systems and another hand it has been alleged that no one has to records such types of transactions in regular books. e) That in no where it has been found that appellant was maintaining two sets of books. f) Only a account ledger could be construed as books. g) That as per alleged printout, assessee has taken loan of Rs. 1,77,17,070/- and repaid Rs. 1,01,50,000/- leaving balance payable amounts to Rs. 7567070/-. If the transactions are recognized as loan, then interest element must be there because no one has to give such huge money without any benefits. h) Further during the course of search, no other supporting evidence in token to acceptance was found showing name of receiver/ payers. i) Your honour may appreciate that during the course of assessment proceeding, appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational and hence legal unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. l) Similar view was taken in ITO v. Smt. Pratibha Goyal [2011] 14 taxmann.com 50/132 ITD 517 (Jp.): wherein reference was made to Mumbai Bench of the Tribunal in the case of Universal Impex v. ITO [IT Appeal No. 444 (Mum.) of 2007, dated 7-5-2009] held that addition made on the basis of statement of one of the partners and entries recorded in the diary cannot be upheld solely on the strength of the statement without any supporting material. The onus was on the AO to collect supporting material and since the AO has not discharged his onus, therefore, the addition was deleted. m) In the case of CIT v. Ravi Kumar [2008] 168 Taxman 150/[2007] 294 ITR 78 (Punj. & Har.), The Hon'ble High Court has observed as under: The assessee was found to be in possession of loose slips and not of any valuable articles or things. Neither the possession nor the ownership of any jewellery mentioned in the slips was proved. Held that, the assessee had discharged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of undisclosed investments. The addition has been made solely on presumption basis without affording proper opportunity to the appellant and thus suffers from legal infirmity. Reliance is placed to the decision of Hon'ble Gauhati High Court in the case Greenview Restaurant vs. Assistant Commissioner of Income-tax reported in (2003] 133 Taxman 432 (Gauhati) in which Hon'ble High Court has held as under: A plain reading of section 143(2) and (3) makes it manifestly clear that if the Assessing Officer while making the assessment of the tax liability considers it necessary to ensure that the assessee had not understated the income or had not computed excessive loss and had not underpaid the tax in any manner, he shall serve on the assessee a notice requiring him either to attend his (Assessing Officer) office or to produce or cause to be produced any evidence on which the assessee may rely in support of the return. It is thereafter on the date specified in the notice or subsequent thereto as may be, that the Assessing Officer, after hearing such evidence as the assessee may produce as well as any other evidence as he may require on specified points and after taking into a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed above, it was clear that the mandatory requirement of affording opportunity to the appellant-firm to adduce evidence in support of the return and explain the disclosures made in the statement of its partner had not been complied with. The Tribunal in passing the impugned orders also did not address itself to that vital aspect of the matter. Thus, one could not sustain the impugned orders of the Tribunal restoring the amount of Rs. 4 lakhs as undisclosed income of the appellant- firm for the assessment years in question. Matter was to be remitted back to the Assessing Officer. [Para 17] 13. Evidentiary value of statement recorded u/s 132(4) of the Income Tax Act, 1961: The CBDT has issued Instruction to curb such erroneous practices of seeking involuntary forced confession of undisclosed income, the CBDT issued Circular F. No. 286/2/2003-IT(Inv.), dated 10-3-2003 after taking due recommendation of Kelker Committee, which clearly states that 'no attempt should be made to obtain confession/surrender as to the undisclosed income during search. Any action on the contrary shall be viewed adversely'. CBDT Instruction F. No. 286/2/2003-IT (Inv.), dated 10-3-2003 regarding confess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DATED 18-12-2014 Instances/complaints of undue influence/coercion have come to notice of the CBDT that some assessees were coerced to admit undisclosed income during Searches/Surveys conducted by the Department. It is also seen that many such admissions are retracted in the subsequent proceedings since the same are not backed by credible evidence. Such actions defeat the very purpose of Search/Survey operations as they fail to bring the undisclosed income to tax in a sustainable manner leave alone levy of penalty or launching of prosecution. Further, such actions show the Department as a whole and officers concerned in poor light. 2. I am further directed to invite your attention to the Instructions/Guidelines issued by CBDT from time to time, as referred above, through which the Board has emphasized upon the need to focus on gathering evidences during Search/Survey and to strictly avoid obtaining admission of undisclosed income under coercion/undue influence. 3. In view of the above, while reiterating the aforesaid guidelines of the Board, I am directed to convey that any instance of undue influence/coercion in the recording of the statement during Search/Survey/Other pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect. In yet another case of Sarwan Singh Rattan Singh v. State of Punjab AIR 1957 SC 637 , the Hon'ble Supreme Court of India held that an admission is not conclusive as to the truth of the matters stated therein. It is only a piece of evidence, the weight to be attached to which must depend on the circumstances in which it is made. It can be shown to be erroneous or untrue." 14. In view of above facts submitted, it is humbly prayed that the addition made on the basis of statement made by the appellant and LP 5 Pg 32 alleged to be found being doubtful as to whether the printout being taken as LP 5 Page 31 & 32 are from the tally computer of Standard Frozen Foods Export Pvt Ltd, Unnao which the department is claiming or mischievously kept or provided by someone to the department and moreover, the ld.AO failed to corroborate or substantiate factually or through evidences as to how the profit from such business is practically perceivable or possible as explained and submitted by the appellant no addition can be made on the basis of dumb document and suspicion without corroboration with material evidence. PRAYER The appellant humbly submits in brief and pray before your honour tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd Frozen Foods Export Pvt Lt - ITSSA 41-44/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2016-17 & AY 2017-18 and ITA 45/Lkw/2022 for AY 2018-19 Standard Agro Vet Pvt Ltd- ITSSA 46-49/Lkw/2022 for AY 2012-13, AY 2013-14, AY 2014-15 and AY 2015-16 Kamal Kant Verma- ITSSA 50-52/Lkw/2022 for AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 53/lKw/2022 for AY 2018-19 Sachin Verma- ITSSA 54-58/Lkw/2022 for AY 2012-13, AY 2014-15, AY 2015-16, AY 2016-17 & AY 2017-18 and ITA 59/Lkw/2022 for AY 2018-19 In connection to the above, the appellant humbly submits before your honour as under: Legal Issues:Issue of Statutory Approval by JCIT u/s 153D of the IT Act, 1961&Issue of Assessment framed u/s 153A in absence of incriminating material. ISSUE OF STATUTORY APPROVAL BY JCIT U/S 153D OF THE IT ACT, 1961: The appellant humbly submits that in all 19 appeals from ITSSA 41-59/LKW/2022 common legal issue of statutory approval u/s 153D of the Income Tax Act, 1961 is involved. The appellant humbly submits before your honour in brief legally as well as factually as to how there has been violation of mandatory and legal requirement u/s 153D as well as factually how the Addl.CIT failed to do dischar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contains name of the appellant and further requested for confrontation of the person with whom such paper was found to which the ld.AO has simply made addition without any basis. (Notice and reply on Page 204-219 of PB Vol-1) - No Cross Examination: At page 223 of the PB Vol-1, the appellant had requested the ld.AO regarding transaction with AT International of Rs. 1.77 Crore and requested for confrontation but the ld.AO simply brushed aside the request. - Inquiry before Assessment u/s 142(1): The appellant has requested the ld.AO to make summon and make inquiry at appellant cost on the issue of share application and unsecured loan which the ld.AO simply brushed aside. (Relevant Para O Page 183- Letters on Page 180-203) * Mechanical Approval for the sake of completion of search assessment proceeding time barring on 31.12.2019: Absence of application on mind on the cases in which Approval have been granted also prima-facie apparent from the Approval Letter itself. The approval has been granted by way of common approval being an empty formality at the fag end of assessment proceeding on 27.12.2019 and 28.12.2018 to multiple assessee and assessment years upto 110 cases for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2023 dated 10.07.2023 - PCIT vs. Jay Ambey Aromatics, SLP (Civil) 24524 of 20223 dated 24.11.2023 - PCIT vs. S.S. Con Build (P) Ltd., SLP (C) No. 7799 of 2023 dated 04.05.2023 * On the basis of tabular chart ( at page 1-2 of PB Vol-1) Income Tax Appeal and the appellant wise categorisation of appellant with legal issue and its judicial precedence has been made as following: Sl. No 1 to 10 : In these cases no incriminating material was found during search and the addition has been made on account of share application received during the year. Reliance is placed upon the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC) where the Hon'ble Court has held that no addition can be made in absence of incriminating material found and seized during search. Sl.No. 11 to 13:In these cases no incriminating material was found during search and the addition has been made on account of unsecured loan received during the year on the basis of statement recorded u/s 132(4) of the appellant during search. Reliance is placed upon the decision of Delhi High Court in the case of PCIT vs. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 cases which is also in violation of requirement u/s 153D of the IT Act, 1961 only for the sake of providing administrative approval at the fag end of assessment proceeding on 27.12.2019 and 28.12.2019 for completion of assessment proceeding getting time barred on 31.12.2019. Reliance is placed upon Jurisdictional Allahabad High Court in the case of PCIT vs. Subodh Agarwal, ITA 86 of 2022 dated 12.12.2022, recent decision in the case of Khoday Ehshwarsa and Sons vs. DCIT, ITA 1079 & 1080/Bang/2024 dated 20.09.2024, I.T.A. No.1813/Del/2019 in the case of Sanjay Duggal and Others and Hon'ble Lucknow Tribunal in the case of Quality Structure Pvt Ltd. vs. DCIT, CC-2, Kanpur, ITSSA 679 & 680/Lkw/2019 dated 30.09.2024 Also, that the assessment has been framed u/s 153A for AY 2012-13 to AY 2017-18 in appeal before your honour as illegal and without jurisdiction in absence of incriminating material. Reliance is placed upon Principal Commissioner of Income tax, Central-3 v. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC) and others by Supreme Court in the case of PCIT vs. Saroj Sudhir Kothari, SLP (C) No. 4077 of 2023 dated 07.08.2023, PCIT vs. King Buildcom (P) Ltd, Civil Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve approval after due application of mind. The learned Counsel for the assessee submitted that the Addl. CIT gave approval to 110 cases in two days which included; 48 cases on 27/12/2019 and 62 cases on 28/12/2019. These cases included approvals given for assessment orders which are subject matters of the present batch of appeals before us. The learned Counsel for the assessee further drew our attention to the fact that approval No. 1490 was requested by the Assessing Officer for 16 cases on 28/12/2019 and approval was given by the Addl. CIT on the same day i.e. on 28/12/2019. He further drew our attention to the fact that approval No. 1488 was requested by the Assessing Officer for 15 cases on 26/12/2019 and approval was given by the Addl. CIT on the very next day i.e. on 27/12/2019. He also drew our attention to the fact that draft assessment orders were sent by the Assessing Officer for approval to the Addl. CIT at the fag end of the assessment proceedings on 26/12/2019 and 28/12/2019 though the assessments were going to be barred by limitation barely a few days later, on 31/12/2019. Placing reliance on the order of Hon'ble Allahabad High Court in the case of Pr. CIT vs. Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d further, that the assessees were in no way responsible for the delay. After hearing both sides, we are of the view that the issue in dispute is squarely covered by the order of the Hon'ble Allahabad High Court in the case of Pr. CIT vs. Subodh Agarwal, I.T.A. No.86 of 2022, dated 12/12/2022, order of Hon'ble Orissa High Court in the case of ACIT vs. Serajuddin & Co. (supra) and order of Hon'ble Delhi High Court in the case of Pr. Commissioner of Income Tax vs. Shiv Kumar Nayyar (supra), in favour of the assessee. Further the issue in dispute is also squarely covered in favour of the assessee by the orders of the Income Tax Appellate Tribunal in the case of Khoday Ehshwarsa and Sons vs. DCIT, I.T.A. No.1079 & 1080/Bang/2024 dated 20/09/2024 and in the case of Sanjay Duggal and Others, I.T.A. No.1813/Del/2019 and in the case of Quality Structure Pvt. Ltd. vs. DCIT, IT(SS)A No. 679 & 680/Lkw/2019 (supra). In view of the foregoing, we set aside the impugned appellate orders of learned CIT(A) deserve to be set aside; and the assessment orders passed by the Assessing Officer deserve to be annulled. (D.2) The second limb of the contentions made by the learned Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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