SHRI KANNAN KASHI VISHWANATHAN,MUMBAI vs. DY CIT CC-5(2), MUMBAI

PER BENCH

These appeals by the assessee are directed against separate orders, each dated 02.02.2018, passed by the Ld. Commissioner of Income-tax (Appeals)-53, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2008-09 to assessment year 2014-15 respectively. As common grounds of appeal are involved, therefore, these appeals were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 2 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 3 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

assessment years. The assessment years. The assessments for assessment years 2008 assessment years 2008-09 to 2014-15 have been 15 have been completed on 31.03.2016 u/s 153A of the u/s 153A of the Act, wherein various , wherein various additions for total deposits in bank accounts, deposits in bank accounts, cash deposits in bank accounts, unexplained cash credit, cash deposits in bank accounts, unexplained cash credit cash deposits in bank accounts, unexplained cash credit commission for circular fund movement commission for circular fund movement etc. have been made. have been made. During the assessments in some years, assessments in some years, the assessee agreed that the assessee agreed that circular fund movement to the com circular fund movement to the company ‘DDLL’ has been made has been made through assessee, for which the assessee offered 0.5 percentile as for which the assessee offered 0.5 percentile as for which the assessee offered 0.5 percentile as commission income, which has been commission income, which has been increased by the Assessing by the Assessing Officer to 0.75 percentile 0.75 percentile of fund moved.

3.1 The assessee filed appeals before the ld CIT(A) and The assessee filed appeals before the ld CIT(A) and The assessee filed appeals before the ld CIT(A) and challenged various additions on merit. The assessee also challenged validity of on merit. The assessee also challenged validity of on merit. The assessee also challenged validity of proceedings u/s 153A on the ground, firstly, that no warrant was proceedings u/s 153A on the ground, , that no warrant was issued in the case of the assessee. This contention of the assessee in the case of the assessee. This contention of the assessee in the case of the assessee. This contention of the assessee has been rejected by the Ld CIT(A) and in t has been rejected by the Ld CIT(A) and in the impugned order, he he impugned order, he has duly referred the warrant and panchnamas prepared in the has duly referred the warrant and panchnamas prepared in the has duly referred the warrant and panchnamas prepared in the name of the assessee. Secondly, the assessee challenged that no name of the assessee. , the assessee challenged that no incriminating material was found or seized in the case of assessee incriminating material was found or seized in the case of assessee incriminating material was found or seized in the case of assessee qua the additions made, made, hence no addition could have been made could have been made in case of unabated assessment years, relying on the decision of the in case of unabated assessment years, relying on the decision of the in case of unabated assessment years, relying on the decision of the Hon’ble Bombay High Court in the case of CIT vs Continental CIT vs Continental Hon’ble Bombay High Court in the case of Warehousing Corporation (Nhava Sheva) Ltd [58 taxmann.com Warehousing Corporation (Nhava Sheva) Ltd [58 taxmann.com Warehousing Corporation (Nhava Sheva) Ltd [58 taxmann.com 78] (BombayHC).The ld The ld. CIT(A), however rejected this challenge of this challenge of the assessee and held that various material has been found in the the assessee and held that various material has been found in the the assessee and held that various material has been found in the

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search of the group search of the group cases, which are incriminating in the nature, incriminating in the nature, hence, no relief was granted relying the ratio of hon’ble hence, no relief was granted relying the ratio of hon’ble hence, no relief was granted relying the ratio of hon’ble Jurisdictional High Court in the case of Contin Jurisdictional High Court in the case of Continental warehousing ental warehousing Corporation (supra). On merit, the Ld Corporation (supra). On merit, the Ld. CIT(A) partly sustained the CIT(A) partly sustained the additions and directed relief, wherever addition was made twice in additions and directed relief, wherever addition was made twice in additions and directed relief, wherever addition was made twice in respect of same deposit, respect of same deposit, firstly, under the entries of banks and under the entries of banks and secondly as cash deposited in bank. Agg secondly as cash deposited in bank. Aggrieved, with the additions rieved, with the additions sustained, the assessee is in appeal before the Tribunal. sustained, the assessee is in appeal before the Tribunal. sustained, the assessee is in appeal before the Tribunal. 3.2 In the appeals before us, validity of In the appeals before us, validity of invoking section invoking section 153Ahas not been challenged on the ground thatno warrant no warrant was issued in the case of the assessee the case of the assessee. The appeals have challenged . The appeals have challenged only on the ground that no incriminating material was found qua the additions no incriminating material was found qua the additions no incriminating material was found qua the additions made, hence no addition could have been made in the assessments. made, hence no addition could have been made in the assessments made, hence no addition could have been made in the assessments We find that Hon’ble Bombay High Court in the case of Continental We find that Hon’ble Bombay High Court in the case of Continental We find that Hon’ble Bombay High Court in the case of Continental warehousing Corporation (supra) has held that in case of unabated ration (supra) has held that in case of unabated ration (supra) has held that in case of unabated assessments or completed assessments, no addition could have assessments or completed assessments, no addition could have assessments or completed assessments, no addition could have been made without the aid of been made without the aid of incriminating material material found during the course of search the course of search. Thus, it is relevant for us for us toanalyze the assessment years, which are unabated and the which are abated which are unabated and the which are abated which are unabated and the which are abated, out of the assessment years involved before us. It is settled law that out of the assessment years involved before us. It is settled law that out of the assessment years involved before us. It is settled law that if in any of the assessment year, assessment if in any of the assessment year, assessment proceedings proceedings see u/s 143(3) or 147 etc are pending 143(3) or 147 etc are pending as on the date of search as on the date of search, then those assessments are treated as abated in terms of are treated as abated in terms of second proviso to second proviso to section 153A(1) of the Act. 153A(1) of the Act. Further, if as on the date of search, the Further, if as on the date of search, the

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limitation for issue of notice u/s 143(2) of the for selection of case limitation for issue of notice u/s 143(2) of the for selection of case limitation for issue of notice u/s 143(2) of the for selection of case under scrutiny has not expired, then those assessments could have under scrutiny has not expired, then those assessments co under scrutiny has not expired, then those assessments co been validly taken for scrutiny been validly taken for scrutiny. The CBDT Circular Circular No. 549 dated 31st October, 1989, has clarified that when there was was a failure to issue a notice to an Assessee Assessee under Section 143(2) of of the Act within six months from the end end of the month in which the return return is furnished or during the financial financial year in which the return return is furnished, whichever is later, then then the Assessee “can take it that that the return filed by him has become final and no scrutiny proceedings proceedings are to be started in respect of that that return.” Therefore, those assessment years herefore, those assessment years, where limitation for issue of notice u/s 143(2) has not expired, also where limitation for issue of notice u/s 143(2) has not expired, also where limitation for issue of notice u/s 143(2) has not expired, also get abated. But for the assessment the assessment years, if assessment if assessment proceedings u/s 143(3) or u/s 147 u/s 143(3) or u/s 147 etc , is already completed before the date of already completed before the date of search or limitation for issue of notice u/s 143(2) already expired as search or limitation for issue of notice u/s 143(2) already expired as search or limitation for issue of notice u/s 143(2) already expired as on the date of search, those assessments would be unabated on the date of search, those assessments would be unabated on the date of search, those assessments would be unabated assessments.

3.3 In the case of In the case of assessee, search has been conducted on been conducted on 24.09.2013. There is no dispute between the parties on the fact that There is no dispute between the parties on the fact that There is no dispute between the parties on the fact that no assessments were pending either u/s 143(2) or u/s 147 of or no assessments were pending either u/s 143(2) or u/s 147 of or no assessments were pending either u/s 143(2) or u/s 147 of or any other section as on the date of search in relation to assessment as on the date of search in relation to assessment as on the date of search in relation to assessment years under reference years under reference, so the question of abatement has to be on of abatement has to be examined as to whether the limitation for issue of notice u/s 143(2) examined as to whether the limitation for issue of notice u/s 143(2) examined as to whether the limitation for issue of notice u/s 143(2) was available on the date of search qua was available on the date of search qua each assessment year. assessment year. Under the provisions of the Act, the limitation for issue of notice Under the provisions of the Act, the limitation for issue of notice Under the provisions of the Act, the limitation for issue of notice

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u/s 143(2) for each of the asse u/s 143(2) for each of the assessment year has been ssment year has been provided, which is summarised in below table: which is summarised in below table:

AY Due date of filing return of Due date of filing return of Expiry of Limitation for issue Expiry of Limitation for issue income in income in salary case salary case of of of notice u/s 143(2) of the of notice u/s 143(2) of the assessee assessee Act in the case of assessee Act in the case of assessee 08-09 31/07/2008 31/07/2008 30/09/2009 09-10 31/07/2009 31/07/2009 30/09/2010 10-11 31/07/2010 31/07/2010 30/09/2011 11-12 31/07/2011 31/07/2011 30/09/2012 12-13 31/07/2012 31/07/2012 30/09/2013 13-14 31/07/2013 31/07/2013 30/09/2014 14-15 31/07/2014 31/07/2014 30/09/2015 3.4 The assessment years 2008 he assessment years 2008-09 to 2011-12 were completed were completed u/s 143(1) of the Act and limitation for issuing notice u/s 143(2) u/s 143(1) of the Act and limitation for issuing notice u/s 143(2) u/s 143(1) of the Act and limitation for issuing notice u/s 143(2) hadexpired prior to prior to 24.09.2013, thus, those are the abated those are the abated assessment years. For assessment years. For assessment year 2012-13 onwards 13 onwards, the limitation for selection of cases under scrutiny was not expired as limitation for selection of cases under scrutiny was no limitation for selection of cases under scrutiny was no on the date of search, search, hence those are in the nature of abated those are in the nature of abated assessment. In case of unabated In case of unabated assessments,it is assessments,it is held by the Hon’ble Bombay High Court in the case of Continental Hon’ble Bombay High Court in the case of Continental Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (supra) Warehousing Corporation (supra) that only addition could have only addition could have been made with the aid of the incriminating material the aid of the incriminating material the aid of the incriminating material.

3.5 Therefore, now we take Therefore, now we take up the appeals for assessment years the appeals for assessment years 2008-09 to 2011-12, 12, which are unabated,for adjudication. The for adjudication. The grounds raised for assessment year 2008 grounds raised for assessment year 2008-09 are reproduced are reproduced as under:

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(hereinafter referred to as 'the Act'); despite the fact that (hereinafter referred to as 'the Act'); despite the fact that (hereinafter referred to as 'the Act'); despite the fact that no search was undertaken on the appellant. The no search was undertaken on the appellant. The no search was undertaken on the appellant. The appellant prays that the assessment us 1 appellant prays that the assessment us 153A is bad in 53A is bad in law and it be quashed. law and it be quashed. 2. 2. The learned Assessing Officer has erred in taxing the 2. The learned Assessing Officer has erred in taxing the 2. The learned Assessing Officer has erred in taxing the entire deposits in two Canara Bank accounts amounting entire deposits in two Canara Bank accounts amounting entire deposits in two Canara Bank accounts amounting to Rs. 12,16,39,728/ to Rs. 12,16,39,728/- u/s 68 of the Act. The learned u/s 68 of the Act. The learned Assessing Officer has blindly taxed the entire deposits Assessing Officer has blindly taxed the entire deposits Assessing Officer has blindly taxed the entire deposits in the bank account. The learned Commissioner of Income the bank account. The learned Commissioner of Income the bank account. The learned Commissioner of Income Tax (Appeals) has erred in upholding the same on merits Tax (Appeals) has erred in upholding the same on merits Tax (Appeals) has erred in upholding the same on merits subject to quantum being re subject to quantum being re-verified. 3. The learned Assessing Officer erred in making addition The learned Assessing Officer erred in making addition The learned Assessing Officer erred in making addition of the cash deposits in bank account of Rs. 13,38, of the cash deposits in bank account of Rs. 13,38, of the cash deposits in bank account of Rs. 13,38,000/- w/s 68 of the Act. The Fearned Assessing Officer failed w/s 68 of the Act. The Fearned Assessing Officer failed w/s 68 of the Act. The Fearned Assessing Officer failed to appreciate that the source of cash deposits and to appreciate that the source of cash deposits and to appreciate that the source of cash deposits and withdrawals was submitted. The learned Commissioner withdrawals was submitted. The learned Commissioner withdrawals was submitted. The learned Commissioner of Income Tax (Appeals) has upheld the addition which of Income Tax (Appeals) has upheld the addition which of Income Tax (Appeals) has upheld the addition which is already considered and part and pa is already considered and part and parcel of addition rcel of addition made in Ground No. 2 mentioned herein above. made in Ground No. 2 mentioned herein above. made in Ground No. 2 mentioned herein above. 4. 4. The learned Assessing Officer has erred in making 4. The learned Assessing Officer has erred in making 4. The learned Assessing Officer has erred in making addition of the unsecured loans u/s 68 of the Act of Rs. addition of the unsecured loans u/s 68 of the Act of Rs. addition of the unsecured loans u/s 68 of the Act of Rs. 3,20,18,059/ 3,20,18,059/-. The learned Assessing Officer failed to . The learned Assessing Officer failed to appreciate that the appellant appreciate that the appellant had submitted a revised had submitted a revised Balance Sheet netting off the loans. The learned Balance Sheet netting off the loans. The learned Balance Sheet netting off the loans. The learned Commissioner of Income Tax (Appeals) has given a Commissioner of Income Tax (Appeals) has given a Commissioner of Income Tax (Appeals) has given a partial partial partial relief relief relief and and and sustained sustained sustained addition addition addition of of of Rs. Rs. Rs. 1,14,22,000/ 1,14,22,000/-. 4. This is the year of unabated assessment, hence This is the year of unabated assessment, hence This is the year of unabated assessment, hence, as held in the case of Continental ware housing Continental ware housing corporation (supra) (supra), addition could have been made only on the basis of any incriminating could have been made only on the basis of any incriminating could have been made only on the basis of any incriminating material found during the course of search in the case of the material found during the course of search in the case of the material found during the course of search in the case of the assessee. As far as the issue of As far as the issue of no incriminating material qua the incriminating material qua the addition is concerned, the concerned, the Ld. CIT(A) has observed as under: Ld. CIT(A) has observed as under:

“4.4 I am unable to accept the appellant's aforesaid plea, 4.4 I am unable to accept the appellant's aforesaid plea, 4.4 I am unable to accept the appellant's aforesaid plea, because this is not a case where no incriminating material because this is not a case where no incriminating material because this is not a case where no incriminating material was found during the course of search. As regards the issue was found during the course of search. As regards the issue was found during the course of search. As regards the issue of abatement of assessment, of abatement of assessment, it is noticed that there was no it is noticed that there was no

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prior assessment us. 143(3) in this case. The return was only prior assessment us. 143(3) in this case. The return was only prior assessment us. 143(3) in this case. The return was only processed u/s. 143(1). As such, the Assessing Officer can look processed u/s. 143(1). As such, the Assessing Officer can look processed u/s. 143(1). As such, the Assessing Officer can look at all the issues while framing the assessment order and is at all the issues while framing the assessment order and is at all the issues while framing the assessment order and is not constrained by only the issues aris not constrained by only the issues arising from the findings of ing from the findings of the search action. As regards the claim that there was no the search action. As regards the claim that there was no the search action. As regards the claim that there was no incriminating documents found in the course of search, the incriminating documents found in the course of search, the incriminating documents found in the course of search, the facts are entirely different. Shri Kannan K.Vishwanath had facts are entirely different. Shri Kannan K.Vishwanath had facts are entirely different. Shri Kannan K.Vishwanath had promoted M/s. AanjaneyaLifecaré Ltd. later known as M/s promoted M/s. AanjaneyaLifecaré Ltd. later known as M/s promoted M/s. AanjaneyaLifecaré Ltd. later known as M/s. Dr. Datsons Labs Ltd. (DDLL) which was incorporated on 03 Dr. Datsons Labs Ltd. (DDLL) which was incorporated on 03 Dr. Datsons Labs Ltd. (DDLL) which was incorporated on 03- 01-2006. This company became public listed company for the 2006. This company became public listed company for the 2006. This company became public listed company for the year 2011 when it raised capital amounting to Rs. 117 crores year 2011 when it raised capital amounting to Rs. 117 crores year 2011 when it raised capital amounting to Rs. 117 crores through Initial Public Offering. The company appointed through Initial Public Offering. The company appointed through Initial Public Offering. The company appointed M/s.AnandRathi M/s.AnandRathi Advisors Adviso rs Ltd. Ltd. as as book book running running lead lead managers. In the case of DDLL, the appellant filed revised managers. In the case of DDLL, the appellant filed revised managers. In the case of DDLL, the appellant filed revised return for AY 2012 return for AY 2012-13 in which the original returned income of 13 in which the original returned income of Rs.32.56 crores was reduced to Rs. 1.68 crores and the book Rs.32.56 crores was reduced to Rs. 1.68 crores and the book Rs.32.56 crores was reduced to Rs. 1.68 crores and the book profit was reduced from Rs.55.47 crores to Rs profit was reduced from Rs.55.47 crores to Rs.7.36 crores. .7.36 crores. Irregularities were noticed in the IPO and the matter was Irregularities were noticed in the IPO and the matter was Irregularities were noticed in the IPO and the matter was enquired by SEBI. The share price of DDLL went upto enquired by SEBI. The share price of DDLL went upto enquired by SEBI. The share price of DDLL went upto Rs.850/- per share on 18 per share on 18-01-2013 which thereafter came 2013 which thereafter came down to Rs.30/ down to Rs.30/- per share on 02-09-2013.Hence, based on 2013.Hence, based on various otherinformat various otherinformation, search & seizure action was carried ion, search & seizure action was carried out in the appellant group comprising of DDLL and the out in the appellant group comprising of DDLL and the out in the appellant group comprising of DDLL and the appellant.It was found thatdepreciation was claimed on bogus appellant.It was found thatdepreciation was claimed on bogus appellant.It was found thatdepreciation was claimed on bogus capex purchases, circular trading transactions was carried out capex purchases, circular trading transactions was carried out capex purchases, circular trading transactions was carried out by DDLL without delivery of any mater by DDLL without delivery of any material.Bad debts were ial.Bad debts were claimed by DDLL. Documents were found showing cash claimed by DDLL. Documents were found showing cash claimed by DDLL. Documents were found showing cash transactions by M/s. Sudar Industries Ltd., a group concern transactions by M/s. Sudar Industries Ltd., a group concern transactions by M/s. Sudar Industries Ltd., a group concern promoted by the appellant, whose papers and cheque books promoted by the appellant, whose papers and cheque books promoted by the appellant, whose papers and cheque books including cancelled cheques were found and seized from the including cancelled cheques were found and seized from the including cancelled cheques were found and seized from the residential premises of the appellant which indicated the l premises of the appellant which indicated the l premises of the appellant which indicated the number of instances of cash transactions related to Sh. Kashi number of instances of cash transactions related to Sh. Kashi number of instances of cash transactions related to Sh. Kashi Vishwanath and Shri Kannan Vishwanath. Evidence was Vishwanath and Shri Kannan Vishwanath. Evidence was Vishwanath and Shri Kannan Vishwanath. Evidence was found that the appellant has a proprietory concern M/s. found that the appellant has a proprietory concern M/s. found that the appellant has a proprietory concern M/s. Benzolife which was used as conduit to Benzolife which was used as conduit to transfer funds to transfer funds to DDLL. This has been admitted by the appellant in his DDLL. This has been admitted by the appellant in his DDLL. This has been admitted by the appellant in his submission dated 26.3.2016 in the assessment proceedings. submission dated 26.3.2016 in the assessment proceedings. submission dated 26.3.2016 in the assessment proceedings. Bank account of the appellant with Axis Bank at Panel and Bank account of the appellant with Axis Bank at Panel and Bank account of the appellant with Axis Bank at Panel and Nariman Point Branches showed transactions with entities Nariman Point Branches showed transactions with entities Nariman Point Branches showed transactions with entities with whom b with whom bogus transactions were carried out. Documents ogus transactions were carried out. Documents showing unaccounted transactions of Sh. Kashi Vishwanath showing unaccounted transactions of Sh. Kashi Vishwanath showing unaccounted transactions of Sh. Kashi Vishwanath with M/s.All Ammar Developers were found suggesting out of with M/s.All Ammar Developers were found suggesting out of with M/s.All Ammar Developers were found suggesting out of books cash transactions. books cash transactions.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 9 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

4.5. Thus, it can by no means be said that no incriminating 4.5. Thus, it can by no means be said that no incriminating 4.5. Thus, it can by no means be said that no incriminating material was unearthed in case of the appellant during the was unearthed in case of the appellant during the was unearthed in case of the appellant during the course of search. In view of this, no fault can be found with course of search. In view of this, no fault can be found with course of search. In view of this, no fault can be found with the action of the A.O. in issuing notice u/s. 153A to the the action of the A.O. in issuing notice u/s. 153A to the the action of the A.O. in issuing notice u/s. 153A to the appellant proposing to make assessments for all six A.Ys. appellant proposing to make assessments for all six A.Ys. appellant proposing to make assessments for all six A.Ys. Reliance is placed in this r Reliance is placed in this regard on the judgement of Hon'ble egard on the judgement of Hon'ble Delhi High Court in the case of CIT v. Anil Kumar Bhatia 352 Delhi High Court in the case of CIT v. Anil Kumar Bhatia 352 Delhi High Court in the case of CIT v. Anil Kumar Bhatia 352 IT 493 (Del) wherein on similar facts, action of the Assessing IT 493 (Del) wherein on similar facts, action of the Assessing IT 493 (Del) wherein on similar facts, action of the Assessing Officer in invoking the provisions of section 153A of the Act Officer in invoking the provisions of section 153A of the Act Officer in invoking the provisions of section 153A of the Act and making additions on various grou and making additions on various grounds was upheld. In that nds was upheld. In that case, the A.Ys. involved were 2000 case, the A.Ys. involved were 2000-01 and2002 01 and2002-03 to 2006- 07. During the course of search, a written undertaking of loan 07. During the course of search, a written undertaking of loan 07. During the course of search, a written undertaking of loan of Rs. 1,50,000/ of Rs. 1,50,000/- dated 10.02.2003 given by the assessee in dated 10.02.2003 given by the assessee in that case to a lady had been recovered pertaining to that case to a lady had been recovered pertaining to that case to a lady had been recovered pertaining to A.Y.2003-04. In A.Ys.2001 04. In A.Ys.2001-02 and 2002-03 and even 03 and even subsequent years, the Assessing Officer had made additions subsequent years, the Assessing Officer had made additions subsequent years, the Assessing Officer had made additions on account of unexplained deposit,agricultural income and on account of unexplained deposit,agricultural income and on account of unexplained deposit,agricultural income and unexplained gift. After considering the legal provisions as well unexplained gift. After considering the legal provisions as well unexplained gift. After considering the legal provisions as well as the new scheme of po as the new scheme of post search block assessments st search block assessments introduced w.e.f.01.06.2003, the Hon'ble High Court held that introduced w.e.f.01.06.2003, the Hon'ble High Court held that introduced w.e.f.01.06.2003, the Hon'ble High Court held that the Tribunal was not justified in holding that no addition could the Tribunal was not justified in holding that no addition could the Tribunal was not justified in holding that no addition could be made for agricultural income, gift received and unexplained be made for agricultural income, gift received and unexplained be made for agricultural income, gift received and unexplained deposits as stated above on the ground deposits as stated above on the ground that in respect of that in respect of these additions, no material was found during the search these additions, no material was found during the search these additions, no material was found during the search carried out us. 132 and also on the ground that for all the carried out us. 132 and also on the ground that for all the carried out us. 132 and also on the ground that for all the A.Ys. under consideration, the returns filed by the assessee A.Ys. under consideration, the returns filed by the assessee A.Ys. under consideration, the returns filed by the assessee before the search had been processed us. 143(1)(a) of the before the search had been processed us. 143(1)(a) of the before the search had been processed us. 143(1)(a) of the Act. It was also held that the Assessing Officer has the power It was also held that the Assessing Officer has the power It was also held that the Assessing Officer has the power u/s.153A to make assessment for all the six years and u/s.153A to make assessment for all the six years and u/s.153A to make assessment for all the six years and compute the total income of the assessee including the compute the total income of the assessee including the compute the total income of the assessee including the undisclosed income notwithstanding that the assessee filed undisclosed income notwithstanding that the assessee filed undisclosed income notwithstanding that the assessee filed returns before the date o returns before the date of search which stood processed u/s. f search which stood processed u/s. 143(1)(a). In view of the broad parity of facts and issue 143(1)(a). In view of the broad parity of facts and issue 143(1)(a). In view of the broad parity of facts and issue involved, the ratio of aforesaid judgment will apply with full involved, the ratio of aforesaid judgment will apply with full involved, the ratio of aforesaid judgment will apply with full force in case of the appellant. Therefore, it is held that the A.0. force in case of the appellant. Therefore, it is held that the A.0. force in case of the appellant. Therefore, it is held that the A.0. was justified in making the imp was justified in making the impugned assessment in case of ugned assessment in case of the appellant by invoking the provisions of section 153A of the the appellant by invoking the provisions of section 153A of the the appellant by invoking the provisions of section 153A of the Act and his action in doing so being in accordance with law is Act and his action in doing so being in accordance with law is Act and his action in doing so being in accordance with law is upheld. In view of the above position, the contentions raised upheld. In view of the above position, the contentions raised upheld. In view of the above position, the contentions raised bythe appellant are found to be devoid bythe appellant are found to be devoid of merit and are of merit and are dismissed.Ground of Appeal No.2 is dismissed. dismissed.Ground of Appeal No.2 is dismissed.”

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 10 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

4.1. We have heard rival submissions on the issue of no We have heard rival submissions on the issue of no We have heard rival submissions on the issue of no incriminating material found during the course of the search. The incriminating material found during the course of the search. The incriminating material found during the course of the search. The Ld. CIT(A) formed the opinion of existence of incriminating material formed the opinion of existence of incriminating material formed the opinion of existence of incriminating material on many observations. Firstly, the Ld. CIT(A) has referred to facts on many observations. , the Ld. CIT(A) has referred to facts related to the company related to the company ‘DDLL’. He has referred that . He has referred that ‘DDLL’ was promoted by the assessee and irregularities were noticed in the promoted by the assessee and irregularities were noticed in the promoted by the assessee and irregularities were noticed in the initial public offering (IPO) raised by the said company, which led to initial public offering (IPO) raised by the said company, wh initial public offering (IPO) raised by the said company, wh search in the case of the company along with the assessee. in the case of the company along with the assessee. in the case of the company along with the assessee. Secondly, the Ld. CIT(A) has referred to claim of depreciation by , the Ld. CIT(A) has referred to claim of depreciation by , the Ld. CIT(A) has referred to claim of depreciation by the said company on bogus capex the said company on bogus capex purchase, circular trading urchase, circular trading transactions etc. We are of the opinion that certainly, no transactions etc. We are of the opinion that certainly, no transactions etc. We are of the opinion that certainly, no incriminating material criminating material qua the assessee has been referred in these has been referred in these two observations. Thirdly Thirdly, Ld. CIT(A) has referred to cash , Ld. CIT(A) has referred to cash transactions by M/s Sunder Industries transactions by M/s Sunder Industries Ltd, whose cheque whose cheque-book and other papers were seized from the residence of the assessee. and other papers were seized from the residence of the assessee. and other papers were seized from the residence of the assessee. These evidences being related to the said company, same cannot be evidences being related to the said company, same cannot be evidences being related to the said company, same cannot be treated as incriminating material found related to the assessee. treated as incriminating material found related to the assessee. treated as incriminating material found related to the assessee. Fourthly, the Ld. CIT(A) has referred to use of proprietary concern , the Ld. CIT(A) has referred to use of proprietary concern , the Ld. CIT(A) has referred to use of proprietary concern M/s Benzolife as conduit for transferring funds to DDLL. But, the M/s Benzolife as conduit for transferring funds to DDLL. But, t M/s Benzolife as conduit for transferring funds to DDLL. But, t Ld. CIT(A) himself has mentioned that this fact was admitted during Ld. CIT(A) himself has mentioned that this fact was admitted during Ld. CIT(A) himself has mentioned that this fact was admitted during the course of the assessment proceeding. the course of the assessment proceeding. Thus, this material also cannot be treated as incriminating material found during the course cannot be treated as incriminating material found during the course cannot be treated as incriminating material found during the course of the search. Fifthly Fifthly, the Ld. CIT(A) has referred to bank accounts to bank accounts of the assessee, which cannot be treated as incriminating material , which cannot be treated as incriminating material , which cannot be treated as incriminating material as same are part of the regular books of accounts of the assessee. part of the regular books of accounts of the assessee. part of the regular books of accounts of the assessee.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 11 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

Sixthly, the Ld. CIT(A) has referred to , the Ld. CIT(A) has referred to documents of unaccounted documents of unaccounted transactions of the assessee with M/s A transactions of the assessee with M/s All Ammar Developers, ll Ammar Developers, however, neither any any reference of particular seized material particular seized material has been made nor any addition has been made nor any addition has been made by the AO by the AO on the basis of the said seized material in the case of the assessee. Thus, the of the said seized material in the case of the assessee. of the said seized material in the case of the assessee. finding of ld CIT(A) reproduced above i finding of ld CIT(A) reproduced above is factually incorrect s factually incorrect to hold existence of incriminating material existence of incriminating material.

4.2 Now, examine reference of any seized material in additions 2 Now, examine reference of any seized material in additions 2 Now, examine reference of any seized material in additions made by the Assessing. made by the Assessing. We find that in assessment year 2008 We find that in assessment year 2008-09, the Assessing Officer has made three additions. Firstly, the the Assessing Officer has made three additions. the Assessing Officer has made three additions. addition of Rs.12,16,39,728/ addition of Rs.12,16,39,728/- u/s 68 of the Act on Act on the basis of credit entries of the bank accounts maintained with the bank accounts maintained with the bank accounts maintained with Canara bank i.e. a saving bank account No. 0232101101571 and another current i.e. a saving bank account No. 0232101101571 and another current i.e. a saving bank account No. 0232101101571 and another current account No. 0232201002250 account No. 0232201002250. The Assessing Officer held that the he Assessing Officer held that the entire credit entries of those bank accounts as unexplained u/s 68 entire credit entries of those bank accounts as unexplained u/s 68 entire credit entries of those bank accounts as unexplained u/s 68 of the Act. The relevant finding of the Assessing Officer is of the Act. The relevant finding of the Assessing Officer is of the Act. The relevant finding of the Assessing Officer is reproduced as under: reproduced as under:

“6.5 During the course of assessment proceedings. it has been 6.5 During the course of assessment proceedings. it has been 6.5 During the course of assessment proceedings. it has been found that the assessee is having two account found that the assessee is having two accounts in the Canara s in the Canara Bank, having account No. 0232101101571 and CA no. Bank, having account No. 0232101101571 and CA no. Bank, having account No. 0232101101571 and CA no. 0232201002250, However, the assessee has not furnished the 0232201002250, However, the assessee has not furnished the 0232201002250, However, the assessee has not furnished the nature and source of the credit entries in that bank account. nature and source of the credit entries in that bank account. nature and source of the credit entries in that bank account. Therefore, Therefore, Therefore, he he he has has has failed failed failed to to to prove prove prove the the the identity identity identity and and and creditworthiness o creditworthiness of the source along with the genuineness of f the source along with the genuineness of this transactions. The credit entries of Rs. 5.01.039/ this transactions. The credit entries of Rs. 5.01.039/ this transactions. The credit entries of Rs. 5.01.039/- and Rs.12.11,38,689/ Rs.12.11,38,689/- as appearing in the Canara Bank, having as appearing in the Canara Bank, having account 10. 02.12101.101571 and CA no. 0212201002250 account 10. 02.12101.101571 and CA no. 0212201002250 account 10. 02.12101.101571 and CA no. 0212201002250 respectively are treated as income of the respectively are treated as income of the assessee as the assessee as the assessee has not furnished nature and source of these entnies. assessee has not furnished nature and source of these entnies. assessee has not furnished nature and source of these entnies.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 12 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

The working of the unexplained income has been done on the The working of the unexplained income has been done on the The working of the unexplained income has been done on the basis of bank statement of these bank accounts running in 44 basis of bank statement of these bank accounts running in 44 basis of bank statement of these bank accounts running in 44 pages. Further, it has been noticed that there is absence pages. Further, it has been noticed that there is absence pages. Further, it has been noticed that there is absence of continuity in the dates of thebank statement. Therefore, it might continuity in the dates of thebank statement. Therefore, it might continuity in the dates of thebank statement. Therefore, it might be possible that there may be other credit entries pertaining to be possible that there may be other credit entries pertaining to be possible that there may be other credit entries pertaining to A.Y under consideration. The 44 pages of both bank accounts A.Y under consideration. The 44 pages of both bank accounts A.Y under consideration. The 44 pages of both bank accounts are annexed as annexure 'A'of this order. are annexed as annexure 'A'of this order. In light of above d In light of above discussion, an aggregate addition of Rs. iscussion, an aggregate addition of Rs. 12,16,39,728/ 12,16,39,728/- is made to the total income of the assessee. is made to the total income of the assessee. Further I am satisfied that the assessee has furnish the Further I am satisfied that the assessee has furnish the Further I am satisfied that the assessee has furnish the inaccurate particulars of income and concealed the particulars inaccurate particulars of income and concealed the particulars inaccurate particulars of income and concealed the particulars of income therefore, penalty u/s. 27 of income therefore, penalty u/s. 271(1)(c) of the I. T. Act is 1(1)(c) of the I. T. Act is initiated.” 4.3 The relevant finding of ld CIT(A) is reproduced as under: The relevant finding of ld CIT(A) is reproduced as under: The relevant finding of ld CIT(A) is reproduced as under:

“5.4 I have considered the submissions carefully. It is noted 5.4 I have considered the submissions carefully. It is noted 5.4 I have considered the submissions carefully. It is noted that the appellant has merit in as much as the quantum of total that the appellant has merit in as much as the quantum of total that the appellant has merit in as much as the quantum of total credits in the bank a/c appe credits in the bank a/c appears to be incorrectly computed by ars to be incorrectly computed by the assessing officer perhaps due to the fact that the bank the assessing officer perhaps due to the fact that the bank the assessing officer perhaps due to the fact that the bank statements annexed to the assessment order shows some statements annexed to the assessment order shows some statements annexed to the assessment order shows some pages containing repetition for same period (e.g. May 2007) and pages containing repetition for same period (e.g. May 2007) and pages containing repetition for same period (e.g. May 2007) and perhaps not carefully excluding the opening perhaps not carefully excluding the opening balancefor each balancefor each month. On test check basis, the appellant's contentions appears month. On test check basis, the appellant's contentions appears month. On test check basis, the appellant's contentions appears to be correct. However, the assessing officer is directed to check to be correct. However, the assessing officer is directed to check to be correct. However, the assessing officer is directed to check and verify the computation and restrict the addition to only and verify the computation and restrict the addition to only and verify the computation and restrict the addition to only credits received as reflected in the bank statem credits received as reflected in the bank statements.However, ents.However, as regards the explanation and justification of the credits, the as regards the explanation and justification of the credits, the as regards the explanation and justification of the credits, the appellant has failed to furnished the same.The addition made appellant has failed to furnished the same.The addition made appellant has failed to furnished the same.The addition made is, therefore, upheld onmerits subject to quantum being re is, therefore, upheld onmerits subject to quantum being re is, therefore, upheld onmerits subject to quantum being re- verified. Ground of Appeal No.3 is partly allowed. verified. Ground of Appeal No.3 is partly allowed.” ” 4.4 During the course of hearing before us, the Ld. Departmental uring the course of hearing before us, the Ld. Departmental uring the course of hearing before us, the Ld. Departmental Representative (DR) was specifically asked to refer and the produce Representative (DR) was specifically asked to refer and the produce Representative (DR) was specifically asked to refer and the produce the incriminating material qua this addition of unexplained credit the incriminating material qua this addition of unexplained credit the incriminating material qua this addition of unexplained credit into bank accounts. The Ld. DR despite providing sufficient time of into bank accounts. The Ld. DR despite providing sufficient t into bank accounts. The Ld. DR despite providing sufficient t more than one month, month, he failed to produce or link the addition with he failed to produce or link the addition with the any incriminating material. We may note that neither the the any incriminating material. We may note that the any incriminating material. We may note that

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 13 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

Assessing Officer nor the ld nor the ld. CIT(A) has specifically linked this has specifically linked this addition with any incriminating material found and seized during addition with any incriminating material found and addition with any incriminating material found and the course of search the course of search, therefore, in absence of any incriminating herefore, in absence of any incriminating material qua this addition material qua this addition, same cannot be sustained. cannot be sustained. The ground No. 2 of the appeal is accordingly allowed. No. 2 of the appeal is accordingly allowed.

8.2 The submission of the assesse 8.2 The submission of the assesse has been considered, has been considered, however, the same is not found to be tenable as in the earlier however, the same is not found to be tenable as in the earlier however, the same is not found to be tenable as in the earlier balance sheet there have been matching between the asset and balance sheet there have been matching between the asset and balance sheet there have been matching between the asset and liabilities. The assets shown in the balance sheet filed earlier liabilities. The assets shown in the balance sheet filed earlier liabilities. The assets shown in the balance sheet filed earlier were having direct relationship with the asse were having direct relationship with the assessee. Further, the ssee. Further, the plea of the assessee does not have force as the assessee has plea of the assessee does not have force as the assessee has plea of the assessee does not have force as the assessee has not furnished the supporting evidences to prove his point. It is not furnished the supporting evidences to prove his point. It is not furnished the supporting evidences to prove his point. It is to be noticed here that the loan has been shown to be taken to be noticed here that the loan has been shown to be taken to be noticed here that the loan has been shown to be taken from only two lenders i.e, M/s. Shree Ganesh Enterp from only two lenders i.e, M/s. Shree Ganesh Enterp from only two lenders i.e, M/s. Shree Ganesh Enterprises

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 14 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

&M/s. Trimula Corporation in both balance sheets, however the &M/s. Trimula Corporation in both balance sheets, however the &M/s. Trimula Corporation in both balance sheets, however the amount has been changed which is represented in tabular form amount has been changed which is represented in tabular form amount has been changed which is represented in tabular form herein as under: herein as under: Sr. Name of the Lenders Name of the Lenders Amount of loan in Amount of loan No. earlier B/S in later B/S 1. Tirumala Corporation Corporation 1,14,22,000 1,14,22,000 2. Shree Ganesh Enterprises Shree Ganesh Enterprises 2,05,96,059 74,85,186 Rs.3,20,18,059/- 1,89,07,186/- 6.1 The Ld. CIT(A) has allowed part relief to the assessee on this The Ld. CIT(A) has allowed part relief to the assessee on this The Ld. CIT(A) has allowed part relief to the assessee on this issue. The relevant finding of the Ld. CIT(A) is reproduced as under: issue. The relevant finding of the Ld. CIT(A) is reproduced as issue. The relevant finding of the Ld. CIT(A) is reproduced as

“7.4 I have considered the submission carefully. It is noted 7.4 I have considered the submission carefully. It is noted 7.4 I have considered the submission carefully. It is noted that the appellant did not require to have his accounts audited that the appellant did not require to have his accounts audited that the appellant did not require to have his accounts audited since the turnover of the business was below the prescribed since the turnover of the business was below the prescribed since the turnover of the business was below the prescribed limits and the balance sheet prepared and submitted was limits and the balance sheet prepared and submitted was limits and the balance sheet prepared and submitted was only in the course of assessment proceedings. It is noted that the course of assessment proceedings. It is noted that the course of assessment proceedings. It is noted that in the submission dated 23.3.2016 in the assessment in the submission dated 23.3.2016 in the assessment in the submission dated 23.3.2016 in the assessment proceedings, it was informed that bank statements of Dr. proceedings, it was informed that bank statements of Dr. proceedings, it was informed that bank statements of Dr. Datsons Labs Ltd. were not available as it was under Datsons Labs Ltd. were not available as it was under Datsons Labs Ltd. were not available as it was under liquidation and the earlier assessing o liquidation and the earlier assessing officer had insisted to fficer had insisted to submit balance sheet and capital accounts on as is where is submit balance sheet and capital accounts on as is where is submit balance sheet and capital accounts on as is where is basis. After the subsequent assessing officer provided the basis. After the subsequent assessing officer provided the basis. After the subsequent assessing officer provided the bank statements, a revised balance sheet and capital bank statements, a revised balance sheet and capital bank statements, a revised balance sheet and capital accounts was submitted. The amount of Rs. 1,89,07,186 / accounts was submitted. The amount of Rs. 1,89,07,186 / accounts was submitted. The amount of Rs. 1,89,07,186 /- was supported by the confirmations filed by the appellant. supported by the confirmations filed by the appellant. supported by the confirmations filed by the appellant. The AO did not carry out any independent verification of these The AO did not carry out any independent verification of these The AO did not carry out any independent verification of these unsecured loans. Thus, there is no basis to reject the unsecured loans. Thus, there is no basis to reject the unsecured loans. Thus, there is no basis to reject the subsequent submissions and make the addition based on the subsequent submissions and make the addition based on the subsequent submissions and make the addition based on the initial submission when t initial submission when the same is not in the form of an he same is not in the form of an audited balance sheet. Further, as regards the amount of Rs. audited balance sheet. Further, as regards the amount of Rs. audited balance sheet. Further, as regards the amount of Rs. 1,89,07,186/ 1,89,07,186/-, as per the appellant, this comprises of an , as per the appellant, this comprises of an amount of Rs. 1,14,22,000/ amount of Rs. 1,14,22,000/- from Tirumala Corporation and from Tirumala Corporation and Rs.74,85,186/ Rs.74,85,186/- from Shree Ganesh Enterprises. In the case of In the case of Shree Shree Shree Ganesh Ganesh Ganesh Enterprises Enterprises Enterprises total total total credits credits credits received received received is is is Rs.9,37,49,875/ Rs.9,37,49,875/- and after accounting for the journal entries, and after accounting for the journal entries, including that for sales of Rs.8,62,64,689/ including that for sales of Rs.8,62,64,689/-, the closing , the closing balance is shown as Rs.74,85,186/ balance is shown as Rs.74,85,186/-. The AO has taken only . The AO has taken only the closing balance as the unexplained cash credit. It is balance as the unexplained cash credit. It is further noted that the credit of Rs.9,37,49,875/ further noted that the credit of Rs.9,37,49,875/- is reflected as is reflected as credits in the current a/c of the appellant with Canara Bank. credits in the current a/c of the appellant with Canara Bank. credits in the current a/c of the appellant with Canara Bank. The total amount of credits appearing in the bank statements The total amount of credits appearing in the bank statements The total amount of credits appearing in the bank statements

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 15 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

with Canara Bank has with Canara Bank has already been added us.68 by the already been added us.68 by the Assessing Officer. Thus, to that extent, any addition in respect Assessing Officer. Thus, to that extent, any addition in respect Assessing Officer. Thus, to that extent, any addition in respect of unsecured loans from Shree Ganesh Enterprises amounts to of unsecured loans from Shree Ganesh Enterprises amounts to of unsecured loans from Shree Ganesh Enterprises amounts to double addition. Hence, addition in respect of 74,85,186/ double addition. Hence, addition in respect of 74,85,186/ double addition. Hence, addition in respect of 74,85,186/- comprised in Rs. 1,89,07,186/ comprised in Rs. 1,89,07,186/- amounts to double addition to double addition and is, therefore, deleted. As regards the amount of Rs. and is, therefore, deleted. As regards the amount of Rs. and is, therefore, deleted. As regards the amount of Rs. 1,14,22,200/ 1,14,22,200/- shown shown to to be be received received fromTirumala fromTirumala Corporation, it is noted that the amount received is not Corporation, it is noted that the amount received is not Corporation, it is noted that the amount received is not reflected in the bank statements with Canara Bank. Instead, reflected in the bank statements with Canara Bank. Instead, reflected in the bank statements with Canara Bank. Instead, this credit is this credit is reflected in the current a/c of the appellant with reflected in the current a/c of the appellant with HDFC Bank. Hence, the addition u/s.68 is sustained in HDFC Bank. Hence, the addition u/s.68 is sustained in HDFC Bank. Hence, the addition u/s.68 is sustained in respect of the amount shown as received from Tirumala respect of the amount shown as received from Tirumala respect of the amount shown as received from Tirumala Corporation. In effect, as against the addition made by the AO Corporation. In effect, as against the addition made by the AO Corporation. In effect, as against the addition made by the AO of Rs.3,20,18,059/ of Rs.3,20,18,059/-, addition is sustained only to the extent of ustained only to the extent of Rs. 1,14,22,000/ Rs. 1,14,22,000/-. Ground of Appeal No.5 is partly allowed. . Ground of Appeal No.5 is partly allowed.” 6.2 We have perused the relevant material on record We have perused the relevant material on record We have perused the relevant material on records, however, we do not find any we do not find any reference of incriminating material of incriminating material qua the addition either by the Ld. Assessing O either by the Ld. Assessing Officer or by the Ld. CIT(A). The fficer or by the Ld. CIT(A). The Ld. DR was also provided enough opportunity to produce any Ld. DR was also provided enough opportunity to produce any Ld. DR was also provided enough opportunity to produce any incriminating material qua the addition. It is evident from the incriminating material qua the addition. It is evident from the incriminating material qua the addition. It is evident from the finding of the Assessing Officer finding of the Assessing Officer that the addition made the addition made is on the basis of the balance sheet and pro basis of the balance sheet and profit and loss accounts furnished by fit and loss accounts furnished by the assessee during the course of the assessment proceedings. the assessee during the course of the assessment proceedings. the assessee during the course of the assessment proceedings. Therefore, in our opinion this addition Therefore, in our opinion this addition is not based on incriminating based on incriminating material found during the course of the search and accordingly material found during the course of the search and accordingly material found during the course of the search and accordingly same cannot be sustained cannot be sustained relying on ratio in the case of Continental in the case of Continental Warehousing Corporation (supra). Since the additions cannot be Warehousing Corporation (supra). Since the additions cannot be Warehousing Corporation (supra). Since the additions cannot be sustained on the legal ground of no incriminating material and sustained on the legal ground of no incriminating material and sustained on the legal ground of no incriminating material and therefore, we are not required to adjudicate upon the merit of the therefore, we are not required to adjudicate upon the merit of the therefore, we are not required to adjudicate upon the merit of the addition. The ground addition. The ground No. 4 of appeal of the assessee for assessment of appeal of the assessee for assessment year 2008-09 is accordingly allowed. accordingly allowed.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 16 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 17 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

“9. In the course of appellate proceedings, the appellant was 9. In the course of appellate proceedings, the appellant was 9. In the course of appellate proceedings, the appellant was asked to furnish the bank statements in respect of its asked to furnish the bank statements in respect of its asked to furnish the bank statements in respect of its accounts wit accounts with HDFC Bank account no. 00132320003567 at h HDFC Bank account no. 00132320003567 at Anchorage Building, 170/171 Central Avenue, Chembur, Anchorage Building, 170/171 Central Avenue, Chembur, Anchorage Building, 170/171 Central Avenue, Chembur, Mumbai and to explain the credit entries. He was also Mumbai and to explain the credit entries. He was also Mumbai and to explain the credit entries. He was also informed that the failure to do so may result in enhancement informed that the failure to do so may result in enhancement informed that the failure to do so may result in enhancement of income. The appellant submitted the copy of of income. The appellant submitted the copy of of income. The appellant submitted the copy of bank statement with HDFC Bank as per which the total credits statement with HDFC Bank as per which the total credits statement with HDFC Bank as per which the total credits during the year is 60,39,800/ during the year is 60,39,800/-. This shows credit of . This shows credit of Rs60,00,000 on 4.4.2008 from Shree Ganesh Enterprises. Rs60,00,000 on 4.4.2008 from Shree Ganesh Enterprises. Rs60,00,000 on 4.4.2008 from Shree Ganesh Enterprises. The other credit is Rs39,800/ The other credit is Rs39,800/- on 5.8.2008. The addition of on 5.8.2008. The addition of Rs60,00,000/ Rs60,00,000/- has been upheld in ground of appeal no 5 eld in ground of appeal no 5 earlier. There is no explanation in respect of Rs 39,800/ earlier. There is no explanation in respect of Rs 39,800/ earlier. There is no explanation in respect of Rs 39,800/- Hence enhancement of income of Rs 39,800/ Hence enhancement of income of Rs 39,800/- is considered is considered necessary based on the bank account with HDFC Bank. The necessary based on the bank account with HDFC Bank. The necessary based on the bank account with HDFC Bank. The income is therefore enhanced by Rs 39,800/ income is therefore enhanced by Rs 39,800/-.” 8.1 On perusal of above rusal of above finding, we find that there is no we find that there is no reference of any incriminating material found during the material found during the course of search qua course of search qua the income enhanced by the Ld CIT(A), therefore, no addition could the income enhanced by the Ld CIT(A), therefore, no addition could the income enhanced by the Ld CIT(A), therefore, no addition could have been sustained being unabated assessment have been sustained being unabated assessment, relying on the decision of Hon’ble Bombay High Court in the case of Continental decision of Hon’ble Bombay High Court in the case of Continental decision of Hon’ble Bombay High Court in the case of Continental warehousing corporation (supra). The ground No. 5 of the Appeal is warehousing corporation (supra). The ground No. 5 of the warehousing corporation (supra). The ground No. 5 of the accordingly allowed.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 18 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

search was undertaken on the appellant.The search was undertaken on the appellant.The search was undertaken on the appellant.The appellant prays that the assessment u/s 153A is bad in law and it prays that the assessment u/s 153A is bad in law and it prays that the assessment u/s 153A is bad in law and it be quashed. be quashed. 2. 2. The learned Assessing Officer has erred in taxing the 2. The learned Assessing Officer has erred in taxing the 2. The learned Assessing Officer has erred in taxing the entire deposits in two Canara Bank accounts amounting to entire deposits in two Canara Bank accounts amounting to entire deposits in two Canara Bank accounts amounting to Rs. 8,71,40,866/ Rs. 8,71,40,866/ - u/s 68 of the Act. The learned u/s 68 of the Act. The learned Assessing Off Assessing Officer failed to appreciate that the source of the icer failed to appreciate that the source of the deposits was explained. The learned Commissioner of deposits was explained. The learned Commissioner of deposits was explained. The learned Commissioner of Income Tax (Appeals) has erred in sustaining the addition Income Tax (Appeals) has erred in sustaining the addition Income Tax (Appeals) has erred in sustaining the addition while allowing relief subiect to verification of claim of the while allowing relief subiect to verification of claim of the while allowing relief subiect to verification of claim of the appellant of interest income being appellant of interest income being offered to tax. offered to tax. 3. 3. The learned Assessing Officer has erred in taxing the 3. The learned Assessing Officer has erred in taxing the 3. The learned Assessing Officer has erred in taxing the deposits in Axis Bank accounts amounting to Rs. deposits in Axis Bank accounts amounting to Rs. deposits in Axis Bank accounts amounting to Rs. 9,44,99,000/ 9,44,99,000/- u/s 68 of the Act. The learned Assessing u/s 68 of the Act. The learned Assessing Officer failed to appreciate that the source of the deposits Officer failed to appreciate that the source of the deposits Officer failed to appreciate that the source of the deposits was explained. was explained. 4. 4. The learned Assessing Officer has erred in taxing the he learned Assessing Officer has erred in taxing the he learned Assessing Officer has erred in taxing the unexplained income out of circular fund movements unexplained income out of circular fund movements unexplained income out of circular fund movements amounting to Rs. 7,26,000/ amounting to Rs. 7,26,000/-. The learned Assessing . The learned Assessing Officer ought to have accepted the disclosure made by the Officer ought to have accepted the disclosure made by the Officer ought to have accepted the disclosure made by the appellant of 0.5%. appellant of 0.5%. 5. 5. The learned Assessing 5. The learned Assessing Officer has erred in making Officer has erred in making addition of the unsecured loans us 68 of the Act of Rs. addition of the unsecured loans us 68 of the Act of Rs. addition of the unsecured loans us 68 of the Act of Rs. 29,54,95,384/ 29,54,95,384/-. The learned Assessing Officer failed to . The learned Assessing Officer failed to appreciate that the appellant had submitted a revised appreciate that the appellant had submitted a revised appreciate that the appellant had submitted a revised Balance Sheet Balance Sheet Balance Sheet netting netting netting off the loans. The learned off the loans. The learned off the loans. The learned Commissioner Commissioner of Income Tax (Appeals) has erred in of Income Tax (Appeals) has erred in sustaining the sustaining the addition while restricting the amount to Rs. restricting the amount to Rs. 3,35,98,005/ 3,35,98,005/- subject to re-verification of quantum. verification of quantum. 9.1 Before us the Ld Before us the Ld. Counsel submitted that the Ground No. 4 of the Ground No. 4 of the appeal was not pressed by the assesse the appeal was not pressed by the assessee, therefore, therefore, same is dismissed as infructuous. dismissed as infructuous. The other ground Nos. 1to 3 and 5 are . 1to 3 and 5 are identical to ground Nos identical to ground Nos. 1 to 4 of the appeal for Ay 2008 1 to 4 of the appeal for Ay 2008-09, therefore, same are decided mutat same are decided mutatis mutandis.

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 19 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 20 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

11.1 We have heard rival submissions of the parties We have heard rival submissions of the parties We have heard rival submissions of the parties on the issue in dispute. Since, the additional evidence Since, the additional evidences go to the root of the matter, go to the root of the matter, therefore we feel it appropriate to restore the therefore we feel it appropriate to restore the respective respective grounds raised in assessment year 2012 raised in assessment year 2012-13 to 2014-15 to the file of the Ld. 5 to the file of the Ld. Assessing Officer for deciding afresh. Before us, the Ld. Counsel of Assessing Officer for deciding afresh. Before us, the Ld. Counsel of Assessing Officer for deciding afresh. Before us, the Ld. Counsel of the assessee has submitted that the assessee has submitted that the Assessing officer held the Assessing officer held the entire credits in the bank statement as unexplained entire credits in the bank statement as unexplained, , and also made separate additions for the cash deposits in the bank statement and separate additions for the cash deposits in the bank statement and separate additions for the cash deposits in the bank statement and unexplained cash credit for the unexplained cash credit for the parties, which are already reflecting are already reflecting in the bank statement. Accordingly in the bank statement. Accordingly, he submitted that additions he submitted that additions

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 21 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

which are in respect of same party for s which are in respect of same party for same deposit, deposit, but made once under credit in bank account and secondly under unexplained cash under credit in bank account and secondly under unexplai under credit in bank account and secondly under unexplai credit in books of account, credit in books of account, same might be eliminated. We have might be eliminated. We have considered the submission of the considered the submission of the assessee. We are of the opinion e are of the opinion that addition could not be made twice for that addition could not be made twice for the same entry of the the same entry of the deposit, once, appearing in the bank statement appearing in the bank statement appearing in the bank statement and secondly appearing in the books of accounts of the assessee in the books of accounts of the assessee and similar is in the books of accounts of the assessee the situation in respect of cash deposit in bank account. The the situation in respect of cash deposit in bank account. the situation in respect of cash deposit in bank account. Assessing Officer shall verify the contention Assessing Officer shall verify the contention of the assessee and of the assessee and accordingly take appropriate action accordingly take appropriate action in accordance with law in accordance with law. The grounds of appeal for assessment year 2012 grounds of appeal for assessment year 2012-13 to 2014 13 to 2014-15 are accordingly allowed partly partly for statistical purposes.

Order pronounced in the open Court on nounced in the open Court on 31/05/2023. /05/2023. Sd/ Sd/- Sd/- (RAHUL CHA AHUL CHAUDHARY) (OM PRAKASH OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 31/05/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT

Shri Kannan Kashi Vishwantahn Shri Kannan Kashi Vishwantahn 22 ITA Nos. 4381 to 4387/Mum/2018 ITA Nos. 4381 to 4387/Mum/2018

BY ORDER, BY ORDER, //True Copy// (Assistant Registrar) (Assistant Registrar) ITAT, Mumbai ITAT, Mumbai